1 UNITED STATES DISTRICT COURT
2 DISTRICT OF NEVADA
3 LATONYA TYUS, an individual, on behalf of ) 4 herself and all similarly situated individuals, et ) al., ) Case No.: 2:14-cv-00729-GMN-VCF 5 ) Plaintiffs, ) ORDER 6 vs. ) 7 ) WENDY’S OF LAS VEGAS, INC.; CEDAR ) 8 ENTERPRISES, INC. ) ) 9 Defendants. ) 10 ) 11 Pending before the Court is the Second Renewed Motion for Summary Judgment, (ECF 12 No. 110), filed by Defendants Wendy’s of Las Vegas, Inc. and Cedar Enterprises, Inc. 13 (collectively “Defendants”). Plaintiffs Latonya Tyus, Raissa Burton, Florence Edjeou, David 14 Hunsicker, Lee Jones, Collins Kwayisi, Jeremy McKinney, Terron Sharp, and Linda Davis 15 (collectively “Plaintiffs”) filed a Response, (ECF No. 119), and Defendants filed a Reply, (ECF 16 No. 122). Also pending before the Court is Plaintiffs’ Renewed Motion to Certify Class, (ECF 17 No. 108), to which Defendants filed a Response, (ECF No. 117), and Plaintiffs filed a Reply, 18 (ECF No. 118). 19 For the reasons discussed herein, Defendants’ Motion for Summary Judgment is 20 DENIED and Plaintiffs’ Motion to Certify Class is GRANTED. 21 I. BACKGROUND 22 This case arises out of Defendants’ alleged violations of Nevada’s Minimum Wage 23 Amendment, Nev. Const. art. XV, § 16 (the “MWA”). During all relevant times, Defendants 24 owned and operated approximately thirty Wendy’s Restaurants (collectively “Restaurants”) in 25 Nevada; and Plaintiffs are either current or former employees of Defendants’ Restaurants. 1 (Mot. to Certify 4:22–5:12, ECF No. 108). Plaintiffs bring this action in their individual 2 capacities and on behalf of other similarly situated employees of the Restaurants whom 3 Defendants allegedly failed to offer MWA-compliant health benefits plans. (Id.); (Am. Compl. 4 ¶¶ 2–23, 79–105, ECF No. 3). 5 On September 2017, the Court granted summary judgment in favor of Defendants for 6 Plaintiffs’ wage-violation claim, reasoning that Defendants’ health plan was consistent with the 7 MWA and its corresponding regulations. (See Order 12:1–3, ECF No. 92). The Court based its 8 conclusion on two decisions in which the Nevada Supreme Court stated the MWA is governed 9 by the standards set forth in Nevada Administrative Code (“NAC”) 608.102. (Id. 7:1–11) 10 (citing MDC Rests., LLC v. Eighth Judicial Dist. Court, 383 P.3d 262, 268 (Nev. 2016) (“MDC 11 I”); W. Cab Co. v. Eighth Judicial Dist. Court, 390 P.3d 662, 670 (Nev. 2017) (“Western 12 Cab”)). Applying NAC 608.102, this Court found that Defendants’ health-benefits plan met 13 the four-factor test for defining health insurance. (Id. 7:22–12:3). Consequently, the Court 14 denied as moot Plaintiff’s motion to certify class and instructed the clerk of court to enter 15 judgment in favor of Defendant. (Id. 12:4–9); (see also Clerk’s J., ECF No. 93). 16 Plaintiff appealed the Court’s decision, (ECF No. 94), and during the appeal’s pendency, 17 the Nevada Supreme Court issued its decision in MDC Rests., LLC v. Eighth Jud. Dist. Court, 18 419 P.3d 148 (Nev. 2018) (“MDC II”). In MDC II, the Supreme Court addressed “whether 19 there is some minimum quality or substance of health insurance that an employer must provide 20 for the employer to pay the lower-tier minimum wage under the MWA.” See MDC II, 419 P.3d
21 at 154. To answer this question, the MDC II Court looked to the “text, history, and purpose of 22 the MWA,” and stated that “NAC 608.102 is an unworkable standard for making such a 23 determination.” Id. Declining to stray from the “simple meaning found within the text and 24 purpose of the MWA,” the Nevada Supreme Court held: 25 [A]n employer is qualified to pay the lower-tier minimum wage to an employee if the employer offers a benefit to the employee in the 1 form of health insurance of a value greater than or equal to the wage of an additional dollar per hour, and covers “the employee 2 and the employee’s dependents at a total cost to the employee for premiums of not more than 10 percent of the employee's gross 3 taxable income from the employer.” Nev. Const. art. 15, § 16. An 4 employer who pays the lower-tier minimum wage will have the burden of showing that it provided the employee with a benefit in 5 the form of health insurance equal to a value of at least an additional dollar per hour in wages. If an employer cannot offer 6 such insurance to an employee, the employer must pay the employee the upper-tier minimum wage. 7
8 Id. at 155–56. In light of this holding, the Ninth Circuit Court of Appeals remanded this case 9 for consideration. (Mem. Op., ECF No. 102). Shortly thereafter, Plaintiffs filed the instant 10 renewed Motion to Certify, and Defendants filed its second renewed Motion for Summary 11 Judgment. 12 The Court begins with Defendants’ Motion for Summary Judgment, followed by 13 Plaintiff’s Motion to Certify. 14 II. MOTION FOR SUMMARY JUDGMENT 15 A. Legal Standard 16 The Federal Rules of Civil Procedure provide for summary adjudication when the 17 pleadings, depositions, answers to interrogatories, and admissions on file, together with the 18 affidavits, if any, show that “there is no genuine dispute as to any material fact and the movant 19 is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(a). Material facts are those that 20 may affect the outcome of the case. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). 21 A dispute as to a material fact is genuine if there is sufficient evidence for a reasonable jury to 22 return a verdict for the nonmoving party. Id. “Summary judgment is inappropriate if 23 reasonable jurors, drawing all inferences in favor of the nonmoving party, could return a verdict 24 in the nonmoving party’s favor.” Diaz v. Eagle Produce Ltd. P’ship, 521 F.3d 1201, 1207 (9th 25 Cir. 2008) (citing United States v. Shumway, 199 F.3d 1093, 1103–04 (9th Cir. 1999)). A 1 principal purpose of summary judgment is “to isolate and dispose of factually unsupported 2 claims.” Celotex Corp. v. Catrett, 477 U.S. 317, 323–24 (1986). 3 In determining summary judgment, a court applies a burden-shifting analysis. “When 4 the party moving for summary judgment would bear the burden of proof at trial, it must come 5 forward with evidence which would entitle it to a directed verdict if the evidence went 6 uncontroverted at trial. In such a case, the moving party has the initial burden of establishing 7 the absence of a genuine issue of fact on each issue material to its case.” C.A.R. Transp. 8 Brokerage Co. v. Darden Rests., Inc., 213 F.3d 474, 480 (9th Cir. 2000) (citations omitted). In 9 contrast, when the nonmoving party bears the burden of proving the claim or defense, the 10 moving party can meet its burden in two ways: (1) by presenting evidence to negate an 11 essential element of the nonmoving party’s case; or (2) by demonstrating that the nonmoving 12 party failed to make a showing sufficient to establish an element essential to that party’s case 13 on which that party will bear the burden of proof at trial. Celotex Corp., 477 U.S. at 323–24. If 14 the moving party fails to meet its initial burden, summary judgment must be denied and the 15 court need not consider the nonmoving party’s evidence. Adickes v. S.H. Kress & Co., 398 U.S. 16 144, 159–60 (1970). 17 If the moving party satisfies its initial burden, the burden then shifts to the opposing 18 party to establish that a genuine issue of material fact exists. Matsushita Elec. Indus. Co. v. 19 Zenith Radio Corp., 475 U.S. 574, 586 (1986). To establish the existence of a factual dispute, 20 the opposing party need not establish a material issue of fact conclusively in its favor. It is
21 sufficient that “the claimed factual dispute be shown to require a jury or judge to resolve the 22 parties’ differing versions of the truth at trial.” T.W. Elec. Serv., Inc. v. Pac. Elec. Contractors 23 Ass’n, 809 F.2d 626, 631 (9th Cir. 1987). In other words, the nonmoving party cannot avoid 24 summary judgment by relying solely on conclusory allegations that are unsupported by factual 25 data. Taylor v. List, 880 F.2d 1040, 1045 (9th Cir. 1989). Instead, the opposition must go 1 beyond the assertions and allegations of the pleadings and set forth specific facts by producing 2 competent evidence that shows a genuine issue for trial. Celotex Corp., 477 U.S. at 324. 3 At summary judgment, a court’s function is not to weigh the evidence and determine the 4 truth but to determine whether there is a genuine issue for trial. Anderson, 477 U.S. at 249. The 5 evidence of the nonmovant is “to be believed, and all justifiable inferences are to be drawn in 6 his favor.” Id. at 255. But if the evidence of the nonmoving party is merely colorable or is not 7 significantly probative, summary judgment may be granted. Id. at 249–50. 8 B. Discussion 9 Defendants’ Motion for Summary Judgment presents a purely legal issue: whether the 10 MDC II decision applies retroactively. (Defs.’ MSJ 3:23–4:2, ECF No. 110). Defendants argue 11 that, because MDC II overruled Western Cab—a decision which Defendants claim they 12 modeled their health benefits practices after—the Nevada Supreme Court would hold that 13 equitable considerations dictate MDC II applies only prospectively. (Id. 5:17–6:24). Therefore, 14 Defendants contend that Western Cab supplies the relevant legal standard, and the Court’s prior 15 Order remains on solid ground. (Id.). 16 As a threshold matter, the Court notes that whether MDC II is limited to prospective 17 application is a question of first impression. Because there is no controlling law on point, “this 18 Court must predict how the Nevada Supreme Court would decide the question.” Brown v. 19 Kinross Gold U.S.A., Inc., 531 F. Supp. 2d 1234, 1245 (D. Nev. 2008); see also Gravquick A/S 20 v. Trimble Navigation Int’l Ltd., 323 F.3d 1219, 1222 (9th Cir. 2003).
21 The Court predicts that the Nevada Supreme Court would apply MDC II retroactively. 22 The Court is persuaded by the Nevada Supreme Court’s handling of retroactivity in a pair of 23 cases construing the Nevada Minimum Wage Amendment (“MWA”). See Nevada Yellow Cab 24 Corp. v. Eighth Jud. Dist. Court, 383 P.3d 246 (Nev. 2016) (“Yellow Cab”); Thomas v. Nevada 25 Yellow Cab Corp., 327 P.3d 518 (Nev. 2014) (“Thomas”). 1 In Thomas, the Supreme Court held that the MWA superseded a Nevada statute 2 exempting taxicab drivers from state minimum wage laws. Thomas, 327 P.3d at 520–22. The 3 legislature’s exemption of taxicab drivers, according to Thomas, was impliedly repealed upon 4 the subsequent enactment of the MWA, which defines employees broadly and carves out 5 specific exemptions not including taxicab drivers. See id. at 521–22 (citing Nev. Const. art. 15 6 § 16). 7 Two years later, in Yellow Cab, the Nevada Supreme Court considered whether the 8 “holding in Thomas is effective from the date the opinion was published in 2014, only, or 9 whether it should apply retroactively from the date the Amendment was enacted in 2006.” 10 Yellow Cab, 383 P.3d at 247. In that case, like the present one, the employer taxicab 11 companies argued that “inequitable results will occur if taxicab drivers are provided back 12 wages for work performed prior to the 2014 opinion.” Id. at 249. The Nevada Court rejected 13 this argument, explaining that equitable balancing would be inappropriate when construing 14 state constitutional minimum wage law. Id. at 249–50. Quoting a concurrence by Justice 15 Scalia, the Court reasoned that “[t]o hold a governmental Act to be unconstitutional is not to 16 announce that we forbid it, but that the Constitution forbids it.” Id. at 250 (quoting Am. 17 Trucking Ass’ns., Inc. v. Smith, 496 U.S. 167, 201 (1990) (Scalia, J., concurring)). To conclude 18 otherwise, the Nevada Supreme Court continued, would be to “presuppose[ ] a view of our 19 decisions as creating the law, as opposed to declaring what the law already is.” Id. (quoting 20 Am. Trucking, 496 U.S. at 201).
21 Accordingly, the Nevada Supreme Court articulated the principle that when it 22 “interpret[s] a constitutional amendment and conclude[s] that it impliedly repeals a statute, that 23 decision applies retroactively to when the amendment was enacted regardless of the balance of 24 equities.” Id. at 251. Therefore, the decision in Thomas “did not create the law in 2014,” but 25 rather “declared what the law was upon enactment of the Amendment in 2006.” Id. 1 Applying Yellow Cab’s reasoning here, the Nevada Supreme Court would likely give 2 retroactive effect to MDC II. Because the Yellow Cab Court expressly held, in the MWA 3 context, that a new interpretation of a constitutional amendment applies back to the date of 4 enactment “regardless of the balance of equities,” id. at 251, this Court predicts that the Nevada 5 Supreme Court would come to same conclusion with respect to MDC II. 6 Defendants argue that the Nevada Supreme Court would likely limit MDC II to 7 prospective application because the instant case closely approximates the “paradigm case” 8 discussed in Yellow Cab as well as K&P Homes v. Christiana Tr., 398 P.3d 292, 293 (Nev. 9 2017). (MSJ 7:2–20, ECF No. 181). In these cases, the Court cautioned that equitable 10 balancing may apply in the so-called “paradigm case” “when a court expressly overrules a 11 precedent upon which the contest would otherwise be decided differently and by which the 12 parties may previously have regulated their conduct.” Yellow Cab, 383 P.3d at 251 n.5; K&P 13 Homes, 398 P.3d at 295. According to Defendants, because Defendants regulated their conduct 14 in conformity with Western Cab, and given MDC II’s implicit rejection of Western Cab, this 15 case meets the paradigmatic hypothetical case alluded to in Yellow Cab and K&P Homes. 16 Preliminarily, the Court is unpersuaded by Defendants’ central premise that MDC II 17 overturned Western Cab. By its express language, MDC II distinguished rather than overturned 18 Western Cab. In Western Cab, the Nevada Supreme Court considered, among other things, 19 whether Nevada’s MWA is preempted by federal law or void for vagueness. W. Cab, 390 P.3d 20 at 666. To address these questions, the Western Cab Court looked to the text of NAC 608.102
21 to ascertain the type of benefit that would qualify as a health-insurance benefit under the 22 MWA. Id. at 670–71. In MDC II, the Supreme Court addressed “whether there is some 23 minimum quality or substance of health insurance that an employer must provide for the 24 employer to pay the lower-tier minimum wage under the MWA.” MDC II, 419 P.3d at 154. On 25 this inquiry, the Court stated that “[t]his question was not argued in Western Cab,” and that the 1 NAC—upon which the Western Cab holding was based—is “an unworkable standard for 2 making such a determination.” Id. Nevertheless, the Court reiterated that the NAC, as well as 3 other sources of law, “are primarily reference points and useful illustrations of the types of 4 benefits and coverages that insurance must cover to qualify as health insurance.” Id. (emphasis 5 in original). Thus, MDC II distinguished the constitutional inquiry before it from the 6 preemption and void-for-vagueness issue presented in Western Cab. Because the MDC II 7 Court did so without explicitly or implicitly overturning Western Cab, this Court finds no basis 8 to hold otherwise. 9 Even insofar as MDC II diverged from Western Cab, the Court nevertheless concludes 10 that the Nevada Supreme Court would treat MDC II retroactively. As noted above, the Nevada 11 Supreme Court in Thomas undisputedly did overturn existing precedent. Nevertheless, the 12 Yellow Cab Court held that Thomas applies retroactively. Yellow Cab, like the instant case, 13 concerned interpretation of the MWA and involved the defendant’s argument that inequity 14 would result were Thomas to be given retroactive treatment. Given the similarities in the 15 cases—including the same equitable arguments Defendants raise here—the Court cannot 16 discern why this case would not be treated in the same manner by the Nevada Supreme Court. 17 In sum, the Court predicts that the Nevada Supreme Court would follow its reasoning in 18 Thomas and hold that MDC II clarified what the Nevada Constitution requires and did not 19 create new law. On this basis, the Court denies Defendants’ Motion for Summary Judgment. 20 III. Motion to Certify Class
21 A. Legal Standard 22 “The class action is ‘an exception to the usual rule that litigation is conducted by and on 23 behalf of the individual named parties only.’” Wal-Mart Stores, Inc. v. Dukes, 564 U.S. 338, 24 348 (2011) (quoting Califano v. Yamasaki, 442 U.S. 682, 700–01 (1979)). “[C]ertification is 25 proper only if the ‘trial court is satisfied, after a rigorous analysis, that the prerequisites of Rule 1 23(a) have been satisfied.’” Id. at 350–51 (quoting Gen. Tel. Co. of Sw. v. Falcon, 457 U.S. 2 147, 161 (1982)). The four Rule 23(a) requirements are numerosity, commonality, typicality, 3 and adequacy of representation. Id. at 349; Fed. R. Civ. P. 23(a). 4 Upon satisfying “Rule 23(a)’s prerequisites, parties seeking class certification must 5 show that the action is maintainable under Rule 23(b)(1), (2), or (3).” Amchem Prods., Inc. v. 6 Windsor, 521 U.S. 591, 614 (1997). “To qualify for certification under Rule 23(b)(3), a class 7 must meet two requirements beyond the Rule 23(a) prerequisites.” Id. at 615. First, “common 8 questions must ‘predominate over any questions affecting only individual members.’” Hanlon 9 v. Chrysler Corp., 150 F.3d 1011, 1022 (9th Cir. 1998) (quoting Fed. R. Civ. P. 23(b)(3)). 10 Second, “class resolution must be ‘superior to other available methods for the fair and efficient 11 adjudication of the controversy.’” Id. (quoting Fed. R. Civ. P. 23(b)(3)). 12 The moving party must affirmatively demonstrate that he or she meets the above 13 requirements. Parsons v. Ryan, 754 F.3d 657, 674 (9th Cir. 2014) (citing Dukes, 564 U.S. at 14 350). However, when presented with a motion to certify, a court should not “‘turn class 15 certification into a mini-trial’ on the merits.” Edwards v. First Am. Corp., 798 F.3d 1172, 1178 16 (9th Cir. 2015) (quoting Ellis v. Costco Wholesale Corp., 657 F.3d 970, 983 n.8 (9th Cir. 17 2011)). 18 B. Discussion 19 Plaintiffs move to certify a proposed class encompassing “[a]ll current and former 20 employees of Defendants at their Nevada locations who were paid less than $8.25 per hour but
21 were not provided with qualifying health benefits pursuant to Nev. Const. art. XV, sec. 16, at 22 any time since May 9, 2012.” (Mot. to Certify 4:15–17, ECF No. 108). Defendants oppose 23 certification on the following grounds: Plaintiffs cannot meet the commonality and typicality 24 elements of Rule 23(a); Plaintiffs are inadequate representative parties for purposes of Rule 25 23(a)(4); and Plaintiffs cannot meet the predominance and superpriority requirements of Rule 1 23(b). (Resp. to Mot. to Certify 7:7–23:2, ECF No. 117). The below discussion first addresses 2 Defendants’ arguments based on Rule 23(a)’s requirements, then moves to those regarding 3 Rule 23(b). 4 1. Rule 23(a) 5 a) Numerosity 6 Rule 23(a)(1) requires that a class be so numerous that joinder of all members is 7 impracticable. Fed. R. Civ. P. 23(a)(1). Generally, courts have held that numerosity is satisfied 8 when the class size exceeds forty members. See, e.g., Slaven v. BP Am., Inc., 190 F.R.D. 649, 9 654–56 (C.D. Cal. 2000); In re Cooper Cos. Inc. Secs. Litig., 254 F.R.D. 628, 634 (C.D. Cal. 10 2009). Further, a plaintiff “need not state exact figures; instead, they can satisfy the numerosity 11 requirement by providing reasonable estimates.” Sobel v. Hertz Corp., 291 F.R.D. 525, 541 (D. 12 Nev. 2013). 13 Here, based upon Defendants’ answers to Plaintiffs’ interrogatories, Plaintiffs state that 14 the number of employees allegedly paid at an unlawful rate is “at the very least” approximately 15 3,153 employees between May 9, 2012, and March 10, 2016. (Mot. to Certify 9:8–14, ECF No. 16 108); (See Def.’s Resp. to Interrog. No. 5, Ex. 3 to Mot. to Certify, ECF No. 108-3). The Court 17 can safely conclude that the potential class is sufficiently numerous such that joinder of each 18 member would be impracticable. 19 b) Commonality 20 “A class has sufficient commonality ‘if there are questions of fact and law which are
21 common to the class.’” Hanlon, 150 F.3d at 1019 (internal citation omitted). As clarified in 22 Dukes, a plaintiff must demonstrate that the class members “have suffered the same injury” and 23 that their claims “depend upon a common contention . . . . of such a nature that it is capable of 24 classwide resolution—which means that determination of its truth or falsity will resolve an 25 issue that is central to the validity of each one of the claims in one stroke.” 564 U.S. at 350. 1 The Court finds that the commonality element is satisfied because this case involves 2 both common legal and factual questions affecting all class members. First, the class members 3 share the common facts of being paid below the upper-tier minimum hourly wage of $8.25 and 4 subject to a common insurance benefits policy. (See Mot. to Certify 10:20–27). Defendants’ 5 pleadings and answers to interrogatories reveal that these facts pervade the class, not just 6 certain individuals, because Defendants admit to paying employees the lower-tier wage of less 7 than $8.25 based on the same health benefits plan offered throughout the coverage years. 8 (Answer ¶¶ 13–20, 27–66, ECF No. 42); (Def.’s Resp. to Interrog. No. 5, Ex. 3 to Mot. to 9 Certify, ECF No. 108-3); (Def.’s Resp. to Am. Interrog. Nos. 21–24, Ex. 4 to Mot. to Certify, 10 ECF No. 108-4); (Dep. Kelly Pratt 45:10–13, Ex. 5 to Mot. to Certify, ECF No. 108-5). 11 Because of the evidence that Defendants had a uniform policy, and that Plaintiffs’ proposed 12 class is tailored to including only those employees who were allegedly damaged by this 13 uniform policy, commonality sufficiently exists. See Cruz v. MM 879, Inc., 329 F.R.D. 639, 14 645 (E.D. Cal. 2019) (“Plaintiffs have demonstrated the existence of a common compensation 15 scheme and meal break policy that allegedly harmed the entire class of MM 879 employees, 16 and that showing is sufficient.”); Millan v. Cascade Water Servs., Inc., 310 F.R.D. 593, 604 17 (E.D. Cal. Oct. 8, 2015) (“In the wage and hour context, the inquiry is whether the entire class 18 was injured by the same allegedly unlawful wage and hour practice.”). 19 Defendants’ main argument to defeat commonality is that whether they offered a 20 qualifying health benefits plan to each class member depends on an individualized inquiry that
21 looks to how much it cost Defendants to offer the benefits in comparison with each employees’ 22 schedules and rates of pay. (Resp. to Mot. to Certify 9:7–18, ECF No. 117). However, this 23 individualized inquiry argument confuses Rule 23(a)’s commonality requirement with Rule 24 23(b)’s “predominance” requirement. As clarified by the United States Supreme Court, “even a 25 single common question will do” for the purposes of Rule 23(a)(2). Dukes, 564 U.S. at 359; see 1 also Negrete v. Allianz Life Ins. Co. of N. Am., 287 F.R.D. 590, 601–602 (C.D. Cal. 2012) 2 (“Even after Dukes, the commonality inquiry does not require plaintiffs to demonstrate the 3 “predominance” of common issues over individualized ones, nor the “cohesion” of the class.”). 4 Defendants’ individualized inquiry argument is thus better addressed below in the context of 5 the predominance prong of Rule 23(b). 6 c) Typicality 7 To demonstrate typicality, a plaintiff must show that her claims are typical of that of the 8 class. Fed. R. Civ. P. 23(a)(3). “[T]he typicality inquiry involves comparing the injury asserted 9 in the claims raised by the named plaintiffs with those of the rest of the class.” Armstrong v. 10 Davis, 275 F.3d 849, 869 (9th Cir. 2001). In other words, “[t]he test of typicality ‘is whether 11 other members have the same or similar injury, whether the action is based on conduct which is 12 not unique to the named plaintiffs, and whether other class members have been injured by the 13 same course of conduct.’” Hanon v. Dataproducts Corp., 976 F.2d 497, 508 (9th Cir. 1992) 14 (citation omitted). The named plaintiff’s injuries need not be “identically positioned” with 15 those of the class to satisfy the typicality requirement. Parsons v. Ryan, 754 F.3d 657, 686 (9th 16 Cir. 2014). Rather, the typicality requirement looks to ensure that “the unnamed class members 17 have injuries similar to those of the named plaintiffs and that the injuries result from the same, 18 injurious course of conduct.” Id. at 685 (quoting Armstrong, 275 F.3d at 869). 19 Here, Plaintiffs allege an injury that emanates from Defendants’ uniform policy 20 impacting all class members. Defendants’ responses to Plaintiffs’ interrogatories reveal this
21 uniformity, stating that Defendants employed “a total of 3,153 employees that were paid less 22 than $8.25 per hour” and that the reason for this pay amount was “that Defendant offered such 23 employees qualifying health insurance benefits.” (Resp. to Interrog. No. 5, Ex. 3 to Mot. to 24 Certify, ECF No. 108-3); (Resp. to Interrog. No. 21, Ex. 4 to Mot. to Certify, ECF No. 108-4). 25 This evidence not only shows how Plaintiffs’ injuries are typical of that with the class 1 members, but also how Defendants appear to advance a defense that is equally typical to 2 Plaintiffs and the class. Further, in conjunction with the commonality analysis above, the fact 3 that each class member would be subject to individualized damage awards does not defeat 4 typicality. See Hanon, 976 F.2d at 508 (“Typicality refers to the nature of the claim . . . of the 5 class representative, and not to the specific facts from which it arose or the relief sought.”); 6 Torres v. Mercer Canyons Inc., 835 F.3d 1125, 1140–41 (9th Cir. 2016) (“In wage-and-hour 7 disputes, such individualized damages inquiries are common, and typically do not defeat 8 certification.”). 9 d) Adequacy of Representation 10 “To satisfy constitutional due process concerns, absent class members must be afforded 11 adequate representation before entry of a judgment which binds them.” Hanlon, 150 F.3d at 12 1020 (citing Hansberry v. Lee, 311 U.S. 32, 42–43 (1940)). In Hanlon, the Ninth Circuit 13 identified two issues for determining the adequacy of representation: (1) whether the named 14 plaintiffs and their counsel have any conflicts of interest with other class members, and (2) 15 whether the named plaintiffs and their counsel will “prosecute the action vigorously on behalf 16 of the class.” Id. 17 The Court need only find one class representative to be adequate, Local Joint Exec. Bd. 18 of Culinary/Bartender Tr. Fund v. Las Vegas Sands, Inc., 244 F.3d 1152, 1162 n.2 (9th Cir. 19 2001), and the Court finds it to be met through Latonya Tyus.1 First, nothing in the record 20 suggests a conflict of interest between Tyus—or any named Plaintiff—and counsel. Second,
21 Defendants present no evidence that Tyus lacks a willingness to prosecute this case. Tyus has a 22 basic understanding about the claim here, as shown in her testimony on the wage tiers under the 23
24 1 In finding the adequacy of representation element satisfied through Latonya Tyus, the Court expresses no 25 doubt or negative opinion as to whether the other named Plaintiffs could adequately serve as representatives for the class. The Court merely proceeds with an analysis of Tyus because she is the first named Plaintiff to be addressed in Defendants’ Response when discussing this element. (See Defs.’ Resp. 18:15–26, ECF No. 117). 1 MWA and the requirement that employers pay $8.25 unless there is qualifying health 2 insurance. (Dep. Latonya Tyus 19:14–25, 104:20–105:2, Ex. 3 to Defs.’ Resp., ECF No. 117- 3 3). Though Defendants point to several misstatements by Tyus about when her claim arose, 4 (Defs.’ Resp. 18:16–26), those misstatements do not reveal her to be “startlingly unfamiliar” 5 with this case or blindly relying on counsel. See In re Twitter Inc. Secs. Litig., 326 F.R.D. 619, 6 628 (N.D. Cal. 2018) (“[T]he threshold of knowledge required to qualify a class representative 7 is low; a party must be familiar with the basic elements of her claim [ ] and will be deemed 8 inadequate only if she is ‘startlingly unfamiliar’ with the case.”); Stuart v. Radioshack Corp., 9 No. C-07-4499 EMC, 2009 WL 281941, at *10 (N.D. Cal. Feb. 5, 2009). Moreover, the Ninth 10 Circuit applies a low bar for qualifying as an adequate class representative, and Tyus meets that 11 standard. See Local Joint Exec. Bd. of Culinary/Bartender Tr. Fund, 244 F.3d at 1162 (“The 12 record indicates clearly that he understands his duties and is currently willing and able to 13 perform them. The Rule does not require more.”). 14 The Court further finds that class counsel, having thirty-five years of legal experience 15 and overseeing class action and complex high damages litigation for his firm, will competently 16 and vigorously prosecute the instant case with the assistance of Tyus and other named 17 Plaintiffs. (See Springmeyer Biography, Ex. 8 to Mot. to Certify, ECF No. 108-8). Therefore, 18 the adequacy of representation requirement is satisfied. 19 2. Rule 23(b) 20 Rule 23(b)(3) permits certification where “the court finds that questions of law or fact
21 common to the members of the class predominate over any questions affecting only individual 22 members, and that a class action is superior to other available methods for the fair and efficient 23 adjudication of the controversy” in light of, among other things, “the difficulties likely to be 24 encountered in the management of a class action.” Fed. R. Civ. P. 23(b)(3). 25 1 a) Predominance 2 Defendants first argue that Plaintiffs cannot satisfy the predominance requirement of 3 Rule 23(b)(3) because the proposed class definition is improperly “fail-safe.” (Defs.’ Resp. 4 13:1–13:22, ECF No. 117). A fail-safe class is “one that is defined so narrowly as to 5 ‘preclude[ ] membership unless the liability of the defendant is established.’” Torres v. Mercer 6 Canyons Inc., 835 F.3d 1125, 1138 n.7 (9th Cir. 2016) (quoting Kamar v. RadioShack Corp., 7 375 Fed. App’x. 734, 736 (9th Cir. 2010)). To make this fail-safe argument, Defendants point 8 to the proposed class definition’s language of including persons “who were offered health 9 benefits that did not qualify Defendants to pay less than [$8.25 per hour] pursuant to Nev. 10 Const. art XV, § 16.” Defendants’ contention is that this definition mirrors the precise legal 11 issue that defines this case: whether employees received sufficient health benefits to warrant 12 wages less than $8.25. According to Defendants, for Plaintiffs’ class definition to essentially 13 use the same language as the legal issue here, it will improperly prevent the Court from finding 14 someone to be a class member until after the Court resolves the merits of this class-wide 15 dispute. (Id.). 16 The Ninth Circuit has cautioned, however, that “our circuit’s caselaw appears to 17 disapprove of the premise that a class can be fail-safe,” though the circuit has not ruled directly 18 on the appropriateness of fail-safe classes. See Melgar v. CSK Auto, Inc., 681 F. App’x 605, 19 607 (9th Cir. 2017) (citing William B. Rubenstein, Newberg on Class Actions § 3:6 (5th ed. 20 2016), which states, “many courts have held that class definitions referencing the merits of the
21 case are not necessarily problematic.”). The rationale for this caution, as suggested by the 22 circuit’s decisions, is that “[i]t is implicit in the definition of [a] class that its members are 23 persons who claim to have been (or to be)” wronged. Vizcaino v. U.S. Dist. Court for W. Dist. 24 of Washington, 173 F.3d 713, 722 (9th Cir. 1999). Because a class is similarly linked by 25 allegations of wrongful conduct, denying certification based on the definition’s mere reference 1 to the ultimate issue linking them would “preclude certification of just about any class of 2 persons alleging injury from a particular action.” Vizcaino, 173 F.3d at 722 (quoting Forbush v. 3 J.C. Penney Coe., 994 F.2d 1101 (5th Cir. 1993), abrogated on other grounds by Wal-Mart 4 Stores, Inc. v. Dukes, 564 U.S. 338, 348 (2011); see also In re Rodriguez, 695 F.3d 360, 370 5 (5th Cir. 2012). From the ninth circuit’s caselaw, district courts in this circuit have thus 6 permitted apparent fail-safe definitions that reference the legal issue at the heart of cases, 7 though most approved definitions are in the context of discrimination claims. See, e.g., Nevarez 8 v. Forty Niners Football Co., LLC, 326 F.R.D. 562, 572 (N.D. Cal. 2018) (certifying a class, as 9 well as others, defined as persons “who have been denied equal access to Levi’s Stadium’s 10 facilities, services, accessible seating, parking, amenities, and privileges . . . .”). The circuit’s 11 disapproval of the fail-safe concept, consequently, makes Defendants’ argument “tenuous at 12 best.” Id. 13 The Court, moreover, is not persuaded that Plaintiffs’ proposed definition is 14 impermissibly fail-safe and should preclude certification. As discussed in this Order’s section 15 denying summary judgment, this case draws on unique circumstances because the Nevada 16 Supreme Court has largely outlined—through objective requirements—the precise facts needed 17 to prove a violation of the MWA. Consequently, while Plaintiffs’ definition references the 18 legal issue here, it does not place the Court in an untenable, fail-safe position where it could 19 determine membership only after proceeding through a series of individualized, subjective 20 determinations that ultimately resolve the merits of each person’s claim. See 1 McLaughlin on
21 Class Actions § 4:2 (15th ed. 2018) (explaining that courts “properly look below the surface of 22 the class definition” to determine if there are issues of ascertainability which should preclude 23 certification); cf. Melgar, 681 F. App’x 605, 607 (“[T]he class definition did not presuppose its 24 success, because the liability standard applied by the district court required class members to 25 prove more facts to establish liability than are referenced in the class definition.”). 1 Because Plaintiffs’ class definition is not impermissibly fail-safe, the next issue is Rule 2 23(b)(3)’s mandate that a case’s common questions predominate over individualized issues. 3 The predominance analysis focuses on “the legal or factual questions that qualify each class 4 member’s case as a genuine controversy” to determine “whether proposed classes are 5 sufficiently cohesive to warrant adjudication by representation.” Amchem Prods., Inc. v. 6 Windsor, 521 U.S. 591, 623 (1997); see also Fed. R. Civ. P. 23(b)(3); Nevarez v. Forty Niners 7 Football Co., LLC, 326 F.R.D. 562, 584 (N.D. Cal. 2018). “An individual question is one 8 where members of a proposed class will need to present evidence that varies from member to 9 member, while a common question is one where the same evidence will suffice for each 10 member to make a prima facie showing [or] the issue is susceptible to generalized, class-wide 11 proof.” Tyson Foods, Inc. v. Bouaphakeo, 136 S. Ct. 1036, 1045 (2016) (internal quotations 12 omitted). “When common questions present a significant aspect of the case and they can be 13 resolved for all members of the class in a single adjudication, there is clear justification for 14 handling the dispute on a representative rather than on an individual basis.” Cruz v. MM 879, 15 Inc., 329 F.R.D. 639, 648 (E.D. Cal. 2019) (quoting Hanlon, 150 F.3d at 1022). 16 Here, Plaintiffs provide evidence to show that Defendants uniformly paid the proposed 17 class employees below $8.25 and offered a common health benefits plan each year. That 18 evidence consequently reveals a uniform corporate practice that carries “great weight for 19 certification purposes.” Senne v. Kansas City Royals Baseball Corp., No. 17-16245, 2019 WL 20 3849564, at *19 (9th Cir. Aug. 16, 2019). Defendants argue that there will need to be a need an
21 individualized inquiry to determine each class member’s owed wages and whether they 22 received qualifying health benefits under the MWA; but there are two reasons why that 23 argument does not counter the predominance of common facts and related issues shared by the 24 class. First, the Ninth Circuit has repeatedly stated that “the rule is clear: the need for 25 individual damages calculations does not, alone, defeat class certification.” Vaquero v. Ashley 1 Furniture Indus., Inc., 824 F.3d 1150, 1155 (9th Cir. 2016). Thus, while the final amount of 2 wages owed to a class member here could differ depending on an employee’s hours worked and 3 base wage, that is not fatal to class certification. See Local Joint Exec. Bd. of 4 Culinary/Bartender Tr. Fund v. Las Vegas Sands, Inc., 244 F.3d 1152, 1163 (9th Cir. 2001). 5 Second, to the extent Defendants paid part of an employee’s health benefits premium, 6 deposition testimony shows how Defendants’ payment toward premiums would appear in less 7 than “a tenth of one percent” of potential class members, (Mot. to Certify 12:8–12); (see Dep. 8 Nancy Holliday 23:4–27:22, Ex. 31 to Defs.’ Renewed MSJ, ECF No. 77-32), and Defendants 9 do not provide support to dispute that calculation. Similarly, when asked if paying for 10 assistance with premiums of some employees was “the only cost associated with offering the 11 SRC plans,” the Director of Human Resources for Defendant Cedar answered “yes.” (Dep. 12 Deborah Harmon 115:24–116:7, ECF No. 108-6). 13 Accordingly, the common factual circumstances, common wage policy, and common 14 benefits plans at issue here guide the Court to find that common issues predominate over the 15 individualized inquiries in this matter. See Millan v. Cascade Water Servs., Inc., 310 F.R.D. 16 593, 606 (E.D. Cal. 2015) (finding predominance to be satisfied pursuant to Rule 23(b)(3) after 17 explaining that, “although the scope of the underpayment will vary from plaintiff to plaintiff, 18 the determination of whether the policies at issue actually violate [the applicable law] will 19 answer a bulk of the inquiry before the Court.”). 20 b) Superiority
21 Rule 23(b)(3) requires that a class action format be “superior to other available methods 22 for fairly and efficiently adjudicating the controversy.” Fed. R. Civ. P. 23(b)(3). To determine 23 superiority, Rule 23(b)(3) provides a non-exhaustive list of factors for courts to consider: 24 (A) the interest of members of the class in individually controlling the prosecution or defense of separate actions; (B) the extent and nature of any 25 litigation concerning the controversy already commenced by or against members of the class; (C) the desirability or undesirability of concentrating the litigation of 1 the claims in the particular forum; [and] (D) the difficulties likely to be encountered in the management of a class action. 2 Plaintiffs first argue that a class is the superior method to litigate this case because of the 3 “relatively small amount of damages at stake for each individual.” (Mot. to Certify 17:10–16, 4 ECF No. 108). Indeed, since the claim here seeks recovery for minimum wage violations, the 5 potential recovery for each claimant would be greatly disproportionate to litigation costs if each 6 employee were to bring their claim individually. Courts routinely find such circumstances to 7 favor the class mechanism. See, e.g., Local Joint Exec. Bd. of Culinary/Bartender Tr. Fund v. 8 Las Vegas Sands, Inc., 244 F.3d 1152, 1163 (9th Cir. 2001). Additionally, because much of the 9 evidence in this case, according to Plaintiffs, will rely on the same payroll records, computer 10 systems, insurance benefits, and testimony, the class mechanism preserves resources of the 11 Court and parties by avoiding thousands of individual lawsuits that would involve duplicative 12 discovery. The Court thus finds that the superiority element satisfied here. (Mot. to Certify 13 17:27–18:3). 14 Altogether, after scrutinizing the applicable requirements of Rule 23(a) and Rule 23(b), 15 the Court finds that class certification is warranted. 16 IV. CONCLUSION 17 IT IS HEREBY ORDERED that Plaintiff’s Motion for Class Certification, (ECF No. 18 108), is GRANTED. 19 IT IS FURTHER ORDERED that Defendants’ Motion for Summary Judgment, (ECF 20 No. 110), is DENIED. 21 DATED this __2_6__ day of September, 2019. 22 23 ___________________________________ 24 Gloria M. Navarro, District Judge United States District Court 25