Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca9-12-56112/USCOURTS-ca9-12-56112-0/pdf.json

Nature of Suit Code: 790
Nature of Suit: Other Labor Litigation
Cause of Action: 

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FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

JACK JIMENEZ, individually and on

behalf of other members of the

general public similarly situated,

Plaintiff-Appellee,

v.

ALLSTATE INSURANCE COMPANY, an

Illinois corporation,

Defendant-Appellant.

No. 12-56112

D.C. No.

2:10-cv-08486-

JAK-FFM

OPINION

Appeal from the United States District Court

for the Central District of California

John A. Kronstadt, District Judge, Presiding

Argued and Submitted

June 4, 2014—Pasadena, California

Filed September 3, 2014

Before: Ronald M. Gould and N.R. Smith, Circuit Judges,

and Edward R. Korman, Senior District Judge.*

Opinion by Judge Gould

* The Honorable Edward R. Korman, Senior District Judge for the U.S.

District Court for the Eastern District of New York, sitting by designation.

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2 JIMENEZ V. ALLSTATE

SUMMARY**

Class Certification 

The panel affirmed the district court’s grant of class

certification to about 800 Allstate Insurance Company

employees in California who alleged that Allstate had a

practice or unofficial policy of requiring its claim adjusters to

work unpaid off the-the-clock overtime in violation of

California law.

The panel held that the district court did not abuse its

discretion in applying Fed. R. Civ. P. 23(a)(2)’s commonality

requirement. 

The panel also held that the class certification order did

not violate Allstate’s due process rights. Specifically, the

panel held that the class certification order preserved

Allstate’s opportunity to raise any individualized defenses at

the damages phase, and that the district court’s approval of

statistical modeling did not violate Allstate’s due process

rights.

COUNSEL

James M. Harris (argued), Andrew M. Paley, Sheryl L.

Skibbe, John R. Giovannone, and Kiran Aftab Seldon,

Seyfarth Shaw LLP, Los Angeles, California, for DefendantAppellant.

** This summary constitutes no part of the opinion of the court. It has

been prepared by court staff for the convenience of the reader.

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JIMENEZ V. ALLSTATE 3

Alexander R. Wheeler (argued), R. Rex Parris, Kitty Szeto,

Jacob L. Karczewski, and John M. Bickford, R. Rex Parris

Law Firm, Lancaster, California, for Plaintiff-Appellee.

Gretchen M. Nelson, Kreindler & Kreindler LLP, Los

Angeles California; and David M. Arbogast, Arbogast Bowen

LLP, Los Angeles, California, for Amici Curiae The

Consumer Attorneys of California, California Employment

Lawyers Association, and The Impact Fund.

OPINION

GOULD, Circuit Judge:

Allstate appeals from the district court’s grant of class

certification to Jack Jimenez and about 800 other Allstate

employees in California who allege that Allstate has a

practice or unofficial policy of requiring its claims adjusters

to work unpaid off-the-clock overtime in violation of

California law. We have jurisdiction under 28 U.S.C.

§ 1292(e), and we affirm.

I

Allstate has 13 local offices in California, which are

individually managed but under centralized leadership.1 At

those 13 offices, Allstate employs five categories of claims

1 We draw the factual background for our opinion from the district

court’s class-certification order. The district court’s factual findings are

reviewed for clear error, Berger v. Home Depot USA, Inc., 741 F.3d 1061,

1066 (9th Cir. 2014), and neither party has challenged those findings on

appeal.

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4 JIMENEZ V. ALLSTATE

adjusters: Auto, Liability Determination, Casualty, Property,

and a Special Investigation Unit. Some adjusters spend most

of their work day in a particular office (“inside” adjusters),

while others, although they are officially assigned to a

particular office, spend most of their time in the field

(“outside” adjusters). The amount and type of work, as well

as the level and quality of claims adjusters’ interaction with

managers, varies between offices, between categories of

adjusters, and between inside and outside adjusters.

In 2005, Allstate shifted all of its California-based claims

adjusters to hourly status from exempt, or salaried, positions. 

Before that reclassification, claims adjusters often worked

more than 8 hours per day or 40 hours per week. Since the

reclassification, claims adjusters’ workload has been

substantially the same as it was before the reclassification,

their compensation is still referred to as an annual salary, and

hourly payment rates are not shared with current or

prospective employees.

Claims adjusters do not keep time records. Rather, the

manager of each local office has the power to file a

timekeeping “exception” or “deviation” from the default

expectation of 8 hours per day and 40 hours per week. This

adjustment takes place when a claims adjuster’s request for

overtime or early leave is approved. Managers do not adjust

time cards based on either their own observations of work

habits or on the technological records contained in computer

and telephone systems. Each local office has a nonnegotiable compensation budget, which creates a functional

limit on the amount of overtime a manager may approve.

Jimenez filed a class action suit alleging that Allstate had

not paid overtime to current and former California-based

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JIMENEZ V. ALLSTATE 5

claims adjusters in violation of California Labor Code §§ 510

and 1198 and had not paid adjusters for missed meal breaks

in violation of California Labor Code §§ 226.7 and 512(a). 

The complaint also made derivative claims that Allstate had

not timely paid wages upon termination in violation of

California Labor Code §§ 201 and 202, had issued noncompliant wage statements in violation of California Labor

Code § 226(a), and had engaged in unfair competition in

violation of California Business and Professions Code

§ 17200.

The district court certified the class with respect to the

unpaid overtime, timely payment, and unfair competition

claims.2It found that Jimenez had presented sufficient

evidence to establish the following common questions under

Federal Rule of Civil Procedure 23(a)(2):3

(i) whether class members generally worked

overtime without receiving compensation as

a result of Defendant’s unofficial policy of

discouraging reporting of such overtime,

Defendant’s failure to reduce class members’

workload after the reclassification, and

2 The district court did not certify the class with respect to the meal

break and wage statement claims because, in contrast to the off-the-clock

claim, Jimenez did not bring forth evidence of specific policies or

practices that would have caused claims adjusters as a group not to take

breaks. It also excluded all members of a currently ongoing class of autofield adjusters. Jimenez did not appeal these parts ofthe class certification

order.

3 The district court’s class certification order discussed all applicable

Rule 23 prongs, but because this appeal focuses on commonality, we do

not repeat the district court’s findings on other issues here.

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6 JIMENEZ V. ALLSTATE

Defendant’s policy of treating their pay as

salaries for which overtime was an

“exception”; (ii) whether Defendant knew or

should have known that class members did so;

and (iii) whether Defendant stood idly by

without compensating class members for such

overtime.

Under Rule 23(b)(3), the district court held that the common

question of whether Allstate had an “unofficial policy” of

denying overtime payments while requiring overtime work

predominated over any individualized issues regarding the

specific amount of damages a particular class member may be

able to prove. Finally, it held that class treatment was a

superior method of adjudication because statistical sampling

of class members could accurately and efficiently resolve the

question of liability, while leaving the potentially difficult

issue of individualized damage assessments for a later day.

We granted permission for an interlocutory appeal under

Federal Rule of Civil Procedure 23(f). See Chamberlan v.

Ford Motor Co., 402 F.3d 952, 959 (9th Cir. 2005). Allstate

timely perfected its appeal, and this proceeding followed.

II

We review a district court’s class certification order for

abuse of discretion. Berger, 741 F.3d at 1066–67. A class

certification order is an abuse of discretion if the district court

applied an incorrect legal rule or if its application of the

correct legal rule was based on a “factual finding that was

illogical, implausible, or without support in inferences that

may be drawn from the facts in the record.” Leyva v. Medline

Indus. Inc., 716 F.3d 510, 513 (9th Cir. 2013) (quoting United

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JIMENEZ V. ALLSTATE 7

States v. Hinkson, 585 F.3d 1247, 1263 (9th Cir. 2009) (en

banc)).

III

Allstate raises two substantial legal challenges to the

district court’s class certification order. First, it argues that

the order does not comply with Rule 23 because the common

questions it identified will not resolve class-wide liability

issues. Second, it argues that the district court’s approval of

statistical modeling violates Allstate’s due process rights and

conflicts with Wal-Mart Stores, Inc. v. Dukes, 131 S.Ct. 2541

(2011). For the reasons given below, we affirm the ruling of

the district court.

A

Allstate’s first argument is that the district court’s class

certification order misapplied Rule 23(a)(2)’s commonality

requirement.4“The Supreme Court has recently emphasized

that commonality requires that the class members’ claims

‘depend upon a common contention’ such that ‘determination

4 Allstate’s opening brief includes two cursory statements that the

district court’s order also incorrectly applied Rule 23(b)(3)’srequirement

that classwide questions predominate over individual issues. That is not

enough to preserve the issue for appeal. See, e.g.,United States v.

Stoterau, 524 F.3d 988, 1003 fn. 7 (9thCir. 2008) (“These contentions are

general, mentioned only in passing, and are unsupported by meaningful

argument. Accordingly, they are waived.”); Greenwood v. FAA, 28 F.3d

971, 977 (9th Cir. 1994) (“We review only issues which are argued

specifically and distinctly in a party’s opening brief. We will not

manufacture arguments for an appellant, and a bare assertion does not

preserve a claim.”). However, if we were to reach that claim, we would

affirm the district court’s predominance holding for many of the same

reasons that we affirm the result of its commonality analysis.

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8 JIMENEZ V. ALLSTATE

of its truth or falsity will resolve an issue that is central to the

validity of each claim in one stroke.’” Mazza v. Am. Honda

Motor Co., 666 F.3d 581, 588 (9th Cir. 2012) (quoting Dukes,

131 S.Ct at 2551) (internal alteration omitted). These

common questions may center on “shared legal issues with

divergent factual predicates [or] a common core of salient

facts coupled with disparate legal remedies.” Hanlon v.

Chrysler Corp., 150 F.3d 1011, 1019 (9th Cir. 1998). We

agree with the district court’s determination that the three

common questions identified in this case have that capacity

because of their close relationship with the three prongs of the

underlying substantive legal test.

This analysis does not turn on the number of common

questions, but on their relevance to the factual and legal

issues at the core of the purported class’ claims. Compare

Dukes, 131 S.Ct. at 2556 ( “We quite agree that for purposes

of Rule 23(a)(2), even a single common question will do.”)

(internal quotation marks omitted), Wang v. Chinese Daily

News, 737 F.3d 538, 544 (9th Cir. 2013) (“Plaintiffs need not

show that every question in the case, or even a preponderance

of questions, is capable of classwide resolution.”), Mazza,

666 F.3d at 589 (“[C]ommonality only requires a single

significant question of law or fact.”), with Dukes, 131 S.Ct.

at 2551 (“What matters to class certification is not the raising

of common ‘questions’—even in droves.”) (quoting

Nagareda, Class Certification in the Age of Aggregate Proof,

84 N.Y.U. L.Rev. 97, 132 (2009) (alteration omitted)). As

Dukes and all of our subsequent caselaw have made clear, a

class meets Rule 23(a)(2)’s commonality requirement when

the common questions it has raised are “apt to drive the

resolution of the litigation,” no matter their number. 

Abdullah, 731 F.3d at 962 (quoting Dukes, 131 S.Ct. at 2551.)

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JIMENEZ V. ALLSTATE 9

Whether a question will drive the resolution of the

litigation necessarily depends on the nature of the underlying

legal claims that the class members have raised. Parsons v.

Ryan, 754 F.3d 657, 676 (9th Cir. 2014) (“commonality

cannot be determined without a precise understanding of the

nature of the underlying claims.”); see also Abdullah,

731 F.3d at 958–63 (comparing a common question to the

elements of California’s “nature of the work” standard in an

employment classification class action). Under California

law, there are three elements of an off-the-clock claim of the

type raised by the class here: “[A] plaintiff may establish

liability for an off-the-clock claim by proving that (1) he

performed work for which he did not receive compensation;

(2) that defendants knew or should have known that plaintiff

did so; but that (3) the defendants stood idly by.” Adoma v.

Univ. of Phoenix, Inc., 270 F.R.D. 543, 548 (E.D. Cal. 2010)

(internal quotation marks omitted).

Each of the three common questions recognized by the

district court will drive the answer to the plaintiffs’ claims on

one of these three elements of their claim. First, the district

court found that the plaintiffs’ arguments had raised the

common question of whether the class had worked unpaid

overtime as a result of “Defendant’s unofficial policy of

discouraging reporting of such overtime, Defendant’s failure

to reduce class members’ workload after the reclassification,

and Defendant’s policy of treating their pay as salaries for

which overtime was an “exception.” Proving at trial whether

such informal or unofficial policies existed will drive the

resolution of prong one of the Adoma test.5 The second

 

5 Allstate argues that its formal policies which call for employees to be

paid for all overtime worked are lawful, and that the alleged informal

“policy-to-violate-the-policy” does not exist. This argument is

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10 JIMENEZ V. ALLSTATE

common question was whether Allstate “knew or should have

known” that the class was working unpaid overtime, which

plaintiffs allege could be shown through either the testimony

of managers who saw the class members work schedules or

through an analysis of the telephone and computer systems

used by class members. Resolution of this common

question–whether in favor of the class or in favor of

Allstate–will tend to show whether Allstate is liable under the

second Adoma prong.

6 Finally, the third common question,

whether “Defendants stood idly by,” repeats verbatim the

standard from the third Adoma prong. The close connection

between the common questions noted by the district court and

the legal test it must apply to determine whether plaintiffs can

make out an off-the-clock claim under California law means

appropriately made at trial or at the summary judgment stage, as it goes

to the merits of the plaintiffs’ claim. See In re Whirlpool Corp.

Front-Loading Washer Products Liab. Litig., 722 F.3d 838, 857 (6th Cir.

2013) (noting that if a defendant has a strong argument against classwide

liability, it “should welcome class certification” as that allows it the

opportunity to resolve claims of all class members at once). Whether any

of these common questions are ultimately resolved in favor of either side

is immaterial at this class certification stage, where we determine whether

any answer that the questions could produce will drive resolution of the

class’ claims.

6 Allstate also argues that the district court improperly expanded the

second element of California’s three part test for “off-the-clock” claims

by allowing plaintiffs to proceed on a theory that Allstate “could have

known” rather than “knew or should have known” about the alleged

unpaid overtime. See Adoma, 270 F.R.D. at 548. “We review de novo a

district court’s interpretation of law, including state law.” Trishan Air,

Inc. v. Fed. Ins. Co., 635 F.3d 422, 426-27 (9th Cir. 2011). The district

court’s order recited the correct legal standard and noted reasons that the

evidence brought forth by Jimenez and the class had the potential to meet

that burden as properly understood. The district court did not err in its

application of California law.

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JIMENEZ V. ALLSTATE 11

that these are precisely the kind of common questions that

Rule 23(a)(2) and Dukes require.

The district court did not abuse its discretion in

determining that these three common questions contained the

“glue” necessary to say that “examination of all the class

members’ claims for relief will produce a common answer to

the crucial question[s]” raised by the plaintiffs’ complaint. 

Dukes, 131 S. Ct. at 2552.

B

Allstate’s second contention is that the district court’s

class certification order violated Allstate’s due process rights

in two ways. First, it argues that the order improperly limited

Allstate’s ability to raise affirmative defenses at trial,7and

second, it argues that the use of statistical sampling among

class members to determine liability contradicts Dukes.

In Dukes, the Supreme Court reversed certification of a

class of employees because the employer was “entitled to

individualized determination of each employee’s eligibility

for backpay.” 131 S.Ct. at 2560. In making this holding, the

Court relied on two key factors. First, it noted as significant

that its holding was made in the context of a class certified

under Rule 23(b)(2), which contains fewer procedural

safeguards than Rule 23(b)(3). Id. And second, it looked at

7 Allstate raised three potential affirmative defenses to the class’ claims:

that class members performed only de minimis amounts of off-the-clock

overtime, that knowledge of any substantial off-the-clock work could not

reasonably be imputed to managers, and that class members may have

unreasonably failed to pursue compensation for their off-the-clock work. 

The merits of these claims are not before us in this appeal, and we take no

position on them.

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12 JIMENEZ V. ALLSTATE

the statutory context of Title VII suits, which explicitly

includes affirmative defenses relating to motive and

alternative explanations. Id. at 2561 (noting the need for

class procedures to “give[] effect to . . . statutory

requirements”). In a more recent case, Comcast Corp. v.

Behrend, 133 S.Ct. 1426 (2013), the Supreme Court

expanded on the notion that individualized determinations of

certain questions were necessary to comply with the Fifth

Amendment’s Due Process Clause. Reversing the Third

Circuit’s affirmance of class certification under Rule

23(b)(3), the Court held that a methodology for calculation of

damages that could not produce a class-wide result was not

sufficient to support certification. Comcast, 133 S.Ct. at

1434–35 (noting the “nearly endless” permutations of

potential damages issues arising out of the model’s flaws).

However, none of the problems identified by Dukes or

Comcast exist in the district court’s certification order here.8

Since Dukes and Comcast were issued, circuit courts

including this one have consistently held that statistical

sampling and representative testimony are acceptable ways to

determine liability so long as the use of these techniques is

not expanded into the realm of damages.

In this circuit, Leyva v. Medline Industries, Inc., 716 F.3d

510 (9th Cir. 2013), is the controlling case. There, we held

8 The parties contest whether Dukes and Comcast apply in the same

fashion to classes certified under Rule 23(b)(2) as opposed to Rule

23(b)(3) classes and whether there may be a potential distinction between

statutory and non-statutory affirmative defenses. We need not resolve

these doctrinal complications to resolve this case. Assuming without

deciding that all of the requirements of Dukes apply here, the class

certification order was not an abuse of discretion or a violation of

Allstate’s due process rights.

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JIMENEZ V. ALLSTATE 13

that a district court’s denial of class certification was an abuse

of discretion. Id. at 513–14. The district court had denied

certification because individual issues predominated on

damages calculations. We reversed because we recognized

that “damages determinations are individual in nearly all

wage-and-hour class actions,” id. at 513 (quoting Brinker

Rest. Corp. v. Superior Court, 273 P.3d 513, 546 (Cal. 2012),

and “[i]n this circuit . . . damage calculations alone cannot

defeat class certification,” id. (quoting Yokoyama v. Midland

Nat’l Life Ins. Co., 594 F.3d 1087, 1094 (9th Cir. 2010). We

therefore held that the district court had applied the wrong

legal standard, a per se abuse of discretion, id. at 514 (citing

Hinkson, 585 F.3d at 1263.

Similar positions have been adopted by those of our sister

circuits that have faced related issues after the Supreme

Court’s Dukes and Comcast decisions. In re Whirlpool

affirmed a grant of class certification in a consumer class

action alleging product liability claims. 722 F.3d at 850–61. 

In that case, the Sixth Circuit held that, “no matter how

individualized the issue of damages may be, determination of

damages may be reserved for individual treatment with the

question of liability tried as a class action,” a position that it

said held true even when some consumers might have no

harms at all. Id. at 853–55 (internal quotation marks

omitted). Butler v. Sears, Roebuck and Co., 727 F.3d 796,

801–02 (7th Cir. 2013) affirmed class certification for a group

of plaintiffs alleging very similar product liability claims as

those in Whirlpool. Judge Posner’s opinion for the Seventh

Circuit concluded that “[i]t would drive a stake through the

heart of the class action device . . . to require that every

member of the class have identical damages.” Id. at 801. He

noted that the existence of a “single, central, common issue

of liability” was sufficient to support class certification, and

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14 JIMENEZ V. ALLSTATE

the defendant was free to address complications with the

district court during the damages phase. Id. at 801–02. More

recently, the Fifth Circuit in In re Deepwater Horizon,

739 F.3d 790, 810–17 (5th Cir. 2014) affirmed certification

of a settlement class for those harmed by the an oil spill in the

Gulf of Mexico. BP challenged the proposed settlement on

the grounds that the claims from thousands of plaintiffs in the

Gulf region were too disparate to meet Rule 23(a)(2)’s

commonality requirement. The Fifth Circuit rejected this

argument, holding that the proper focus of the analysis was

the defendant’s conduct, and “even an instance of injurious

conduct” satisfies Rule 23, Dukes, and due process. Id. at

810–11. So long as the plaintiffs were harmed by the same

conduct, disparities in how or by how much they were

harmed did not defeat class certification. Id. We conclude

that these cases are compelling. And their reasoning is

consistent with our circuit precedent in Leyva.

9

In crafting the class certification order in this case, the

district court was careful to preserve Allstate’s opportunity to

9 The California Supreme Court’s recent decision in Duran v. U.S. Bank

Nat’l Association, 325 P.3d 916 (Cal. 2014) is not to the contrary. While

it reversed the result of a trial that had used statistical sampling and

representative testimony to find in favor of a class of employees alleging

mis-classification under California labor laws, it did not place a wholesale

bar on the use of such tactics. Id. at 939 (“We need not reach a sweeping

conclusion as to whether or when sampling should be available as a tool

for proving liability in a class action.”) Rather, it noted serious problems

with the size of the sample, the way it was selected, and the application of

sample evidence to the larger class. Id. at 940–45. These errors required

reversal because the sample itself was so flawed as to violate the

defendant’s due process rights andCalifornia class certification principles. 

Id. at 945. That is not the question we face in this appeal.

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JIMENEZ V. ALLSTATE 15

raise any individualized defense it might have at the damages

phase of the proceedings. It rejected the plaintiffs’ motion to

use representative testimony and sampling at the damages

phase, and bifurcated the proceedings. This split preserved

both Allstate’s due process right to present individualized

defenses to damages claims and the plaintiffs’ ability to

pursue class certification on liability issues based on the

common questions of whether Allstate’s practices or informal

policies violated California labor law.

Further, the district court carefully analyzed the specific

statistical methods proposed by plaintiffs. It struck some of

the expert testimony offered by plaintiffs as insufficiently

empirically supported and took pains to ensure that the

statistical analysis it did accept conformed to the legal

questions to which the analysis was being applied. Unlike the

putative class in Comcast, 133 S.Ct. at 1434, which relied on

statistical analysis that was not closely tied to the relevant

legal questions, or in Duran, 325 P.3d at 940, which used a

sample of 20 names drawn from a hat without evidence

showing that the number of names chosen or the method of

selection would produce a result that could be “fairly

extrapolated to the entire class,” the district court has

accepted a form of statistical analysis that is capable of

leading to a fair determination of Allstate’s liability, and

preserved the rights of Allstate to present its damages

defenses on an individual basis. The district court did not

abuse its discretion by entering its class certification order,

and did not violate Allstate’s due process rights.

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16 JIMENEZ V. ALLSTATE

IV

The district court’s class certification order is affirmed. 

The case is remanded to the district court for further

proceedings consistent with this opinion.

AFFIRMED.

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