Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-4_05-cv-02320/USCOURTS-cand-4_05-cv-02320-9/pdf.json

Parties Involved:
Fedex Kinko's Office and Print Services, Inc.
Counter-claimant
Stephen Whiteway
Counter-defendant

Document Text:

United States District Court

For the Northern District of California

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The executive exemption is set out in California Labor Code section 515, which states:

(a) The Industrial Welfare Commission may establish exemptions from the

requirement that an overtime rate of compensation be paid pursuant to Sections

510 and 511 for executive, administrative, and professional employees,

provided that the employee is primarily engaged in the duties that meet the test

of the exemption, customarily and regularly exercises discretion and

independent judgment in performing those duties, and earns a monthly salary

equivalent to no less than two times the state minimum wage for full-time

employment. The commission shall conduct a review of the duties that meet

IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF CALIFORNIA

STEPHEN WHITEWAY, individually and on

behalf of all others similarly situated,

Plaintiffs,

 v.

FEDEX KINKO'S OFFICE AND PRINT

SERVICES, INC., and DOES 1 through 25,

inclusive, 

Defendants. _______________________________________

No. C 05-2320 SBA

 

ORDER

[Docket No. 59]

This matter comes before the Court on Plaintiff's Motion for Class Certification [Docket No.

59]. The Court has considered the parties' filings and statements made at oral argument on this

Motion, which was held on September 12, 2005.

BACKGROUND

Plaintiff Stephen Whiteway works as a Center Manager ("CM") for a California retail

location of Defendant FedEx Kinko's Office and Print Services, Inc. On May 19, 2005, Plaintiff

filed a complaint against FedEx Kinko's in the Superior Court of the State of California. Plaintiff

alleged that FedEx Kinko's improperly exempts CMs from certain employment benefits, particularly

overtime compensation, by categorizing the group as "executive exempt."1

 Compl. at ¶ 12. Plaintiff

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the test of the exemption. The commission may, based upon this review,

convene a public hearing to adopt or modify regulations at that hearing

pertaining to duties that meet the test of the exemption without convening wage

boards. . . . 

(e) For the purpose of this section, "primarily" means more than one-half of the

employee's worktime. 

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claims that Defendant's classification of CMs as executive exempt, and failure to investigate the

propriety of that classification, violates California Labor Code §§ 201, 202, 203, 218.5, 226, 226.7,

510, 512, 1174, 1194, 1198 and 1199; and California Business & Professions Code §§ 17200-17208. 

Plaintiff seeks injunctive relief, back pay, and punitive damages.

On June 8, 2005, Defendant removed the action to this Court pursuant to 28 U.S.C. §§ 1441

and 1332. Defendant answered the complaint and filed a counterclaim for declaratory judgment on

November 30, 2005. 

On May 12, 2006, Plaintiff filed the instant Motion for Class Certification. The proposed

class consists of "all members who are/were employed as salaried Store Managers of Kinko's, and

were classified thereby as overtime-exempt employees at any time between the commencement of

the pay period including May 19, 2001 and the present." Compl. at ¶ 14. 

A. Facts

FedEx Kinko's operates about 200 Centers in California. The state is divided into two

regions, Southern California and the West Area. These regions are further divided into districts,

which are run by District Managers who report to the Regional Vice-President of the given region. 

The Southern California region has eight districts and the West Area region, which covers northern

California, has six districts. Each district contains multiple centers or retail stores. The West Area

region contains about eighty-eight centers and the Southern California region contains about 112-

120 centers. 

 Each of these centers is run by a Center Manager. Each CM oversees an Assistant Manager

(Retail) and Assistant Manager (Production). Along with overseeing these two hourly managers,

some CMs also manage a Senior Customer Consultant and/or a Senior Technology Consultant. The

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Assistant Managers manage the 12 to18 entry-level employees in these centers, which include

Associate Retail Consultants, Retail Consultants, Couriers, Associate Production Operators, and

Production Operators. Since 2003, FedEx Kinko's has trained CMs in Dallas, Texas. The training

materials used in this eight week program are uniform for each center. 

FedEx Kinko's has five different types of centers: (1) Hub Centers, (2) Spoke Centers, (3)

Standalone Centers, (4) Ship Centers, and (5) Commercial Processing Centers ("CPCs"). 

Hub Centers are 24-hour, full-service retail and commercial stores. Generally, Hubs are

larger than Spokes in terms of sales volume, headcount, machine capacity and capabilities. Hub

CMs are known as Senior Center Managers. They are "primarily responsible for managing the

overall operations of branches within the assigned local branch network, including supervision of

Branch Mangers (Spoke) ["Spoke CMs"] and the administration of branch sales performance and

profitability objectives. " Cole Decl., Ex G. at 31. Along with other duties, Hub CMs hire, promote,

discipline, and discharge employees at their own Hub Center as well as at the Spoke Center.

Spoke Centers are connected with a Hub branch, which oversees the Spoke Center's

operations. The Hub Center coordinates with the Spoke Center for overnight customer coverage. 

Spokes vary by size, revenue, and number of employees.

Standalone Centers are not connected to a Hub because of their geographic remoteness. 

They can have a structure that is similar to either a Hub or a Spoke in terms of the commercial/retail

mix, revenue, and number of employees. Standalones are generally open 24 hours, but can close

during certain hours based on customer traffic and needs. Standalone CMs are "primarily

responsible for managing the overall branch operation, including supervision of team members and

the administration of branch sales performance and profitability objectives." Cole Decl., Ex. G at

35. The Standalone CMs' job responsibilities are similar to those of Spoke CMs. 

Ship Centers are primarily shipping facilities, and are are typically smaller than other centers. 

CPC Centers service other FedEx Kinko's Centers, rather than the general public. CPC centers are

primarily responsible for large print jobs or print jobs needing a quick turnaround.

Hub, Spoke, and Standalone CMs are required to achieve the company's sales and profit

objectives, supervise employees, hire employees, train employees, evaluate workers, recommend

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wage increases, recommend promotions, initiate disciplinary proceedings, terminate employees,

maintain the Defendant's fiscal reporting procedures, supervise marketing initiatives, manage

inventory, manage machinery, comply with Federal/State law safety requirements, and ensure

subordinate employees are consistently applying Kinko's Policies and Procedures. Cole Decl. Ex G.

at 31-35 (FedEx Kinko's Standard Roles & Job Descriptions: Implementation Guide February 2002). 

District Managers evaluate CMs' performance based on leadership skills and business results. Cole

Decl., Ex. K (FedEx Kinko's Performance Appraisal for Center Managers).

LEGAL STANDARD

I. Class Certification

Class certification is governed by Federal Rule of Civil Procedure 23, which sets forth a twostep procedure. First, the Court must determine that the following four requirements of Rule 23(a)

have been satisfied: (1) numerosity; (2) common questions of law and fact; (3) typicality; and (4)

fair and adequate representation. Fed. R. Civ. P. 23(a). Once these requirements are met, the

plaintiff must also show that the lawsuit qualifies for class action status under one of the criteria

found in Rule 23(b). See Zinser v. Accufix Research Institute, Inc., 253 F.3d 1180, 1186 (9th Cir.

2001), amended and superceded on denial of rehearing by Zinser v. Accufix Research Institute, Inc.,

273 F.3d 1266 (9th Cir. 2001) (noting that Plaintiff "bears the burden of demonstrating that [he] has

met each of the four requirements of Rule 23(a) and at least one of the requirements of Rule 23(b)"). 

Rule 23(b) requires that the plaintiff establish that either: (1) there is a risk of inconsistent

adjudication, or adjudication of individual class member's claims would substantially impair nonparty members' ability to protect their interests; (2) the defendant acted on grounds generally

applicable to the class; or (3) common questions of law or fact predominate and class resolution is

superior to other available methods. Fed. R. Civ. P. 23(b). 

The plaintiff bears the burden of proving that certification is appropriate. See Hawkins v.

Comparet-Cassani, 251 F.3d 1230, 1238 (9th Cir. 2001). The Court maintains great discretion in

certifying a class action. Vizena v. Union Pac. R. R. Co., 360 F.3d 496, 502 (5th Cir. 2004). The

Court must rigorously analyze whether the class action allegations meet the requirements of Rule 23.

 See General Telephone Co. Of the Southwest v. Falcon, 457 U.S. 147, 161 (1982). However,

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The settlement class included: "All current and former employees of Defendant who worked

in the position of [Center] Manager within the State of California between March 14, 1996 and the

Effective Date (as defined in the Agreement)(the "Class Period")." The "Effective Date" was defined

as "the date upon which the Judgement becomes Final." Counterclaim, Ex. B at 3. The Superior Court

signed the Final Judgement and Order of Dismissal on April 18, 2002. Defendants request that this

Court take judicial notice of the Sanders settlement. That request is granted. Judicial notice may be

taken of facts "not subject to reasonable dispute" because they are either "(1) generally known within

the territorial jurisdiction of the trial court or (2) capable of accurate and ready determination by resort

to sources whose accuracy cannot reasonably be questioned." Fed. R. Evid. 201(b). The existence of

the Sanders settlement is not disputed by the parties, and it is readily verifiable through examination of

the court file in that case.

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"[b]ecause the early resolution of the class certification question requires some degree of speculation

. . . all that is required is that the Court form a 'reasonable judgment' on each certification

requirement." In re Citric Acid Antitrust Litig., 1996 WL 655791 *2 (N.D. Cal. 1996). "In

formulating this judgment, the Court may properly consider both the allegations of the class action

complaint and the supplemental evidentiary submissions of the parties." Id. at * 2. The Court may

also consider how the plaintiffs' claims will be tried. Castano v. Am. Tabacco Co., 84 F.3d 734, 744

(5th Cir. 1996). 

ANALYSIS

A. Class Period

California CMs sued Defendant's predecessor Kinko's in California Superior Court on March

14, 2000, for failure to pay overtime to nonexempt employees who had been misclassified as exempt

employees. See Sanders v. Kinko's, Case No. 00CC03304. Kinko's settled this case and certified the

CMs as a class for settlement purposes only. Counterclaim at ¶ 14.2 The parties agreed at oral

argument that April 18, 2002, the effective date of the Sanders settlement, is the cut-off date for this

class.

I. Ascertainability

An implied prerequisite to certification is that the class must be sufficiently definite. See 

DeBremaeker v. Short, 433 F.2d 733, 734 (5th Cir. 1970). An identifiable class exists if its members

can be ascertained by reference to objective criteria. See id. at 734-35 (declining to certify a class

made up of Texas residents "active in the peace movement" because identification of members was

dependent on their subjective states of mind). See also Lukovsky v. City and County of San

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Although neither Rule 23(a) nor the courts have imposed an absolute "magic number," some

courts have held that numerosity may be presumed at a level of forty members. See, e.g., Consolidated

Rail Corp. v. Town of Hyde Park, 47 F.3d 473, 483 (2d Cir. 1995). On the other hand, classes of fifteen

or fewer people have frequently been rejected as too small for certification. See, e.g., General Tel. Co.

v. EEOC, 446 U.S. 318, 329-30 (1980) (fifteen affected employees "would be too small to meet the

numerosity requirement"); Harik v. Cal. Teachers Ass’n, 298 F.3d 863, 872 (9th Cir. 2002) (certification

of classes of seven, nine, and ten members vacated on numerosity grounds).

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Francisco, 2006 WL 140574 at *2 (Jan. 17, 2006). The Court must be able to determine class

members without having to answer numerous fact-intensive questions. Daniels v. City of New York,

198 F.R.D. 409, 414 (S.D.N.Y. 2001). 

Plaintiff plans to determine class membership by analyzing employee, payroll, and other

records maintained by Defendant. Compl. at ¶ 23(a). This is a reasonable, objective method of

ascertaining those individuals Defendant employed as CMs in a California retail location at any

point between April 18, 2002 and the present. Accordingly, Plaintiff has satisfied the

ascertainability requirement for class certification. 

II. Federal Rule 23(a) Requirements

A. Numerosity

Rule 23(a)'s first requirement is that the proposed class must be so numerous that joinder of

all members is "impracticable." Fed. R. Civ. P. 23(a)(1). "Impracticable" does not mean

"impossible," and a plaintiff only need establish the difficulty or inconvenience of joining all

members of the class to meet the numerosity requirement. Harris v. Palm Springs Alpine Estates,

Inc., 329 F.2d 909, 913-14 (9th Cir. 1964). There is no set numerical cutoff; a court must examine

the specific facts of each case to determine whether numerosity has been satisfied. General Tel. Co.,

446 U.S. at 329-30. Moreover, a plaintiff need not allege the precise number of class members, "but

may instead [make a reasonable] estimate on the basis of the size of a disputed offering." Brosious

v. Children's Place Retail Stores, 189 F.R.D. 138, 145 (D.N.J. 1999). 

Given the parameters of the proposed class, the parties agree that it will include several

hundred individuals. This is sufficient to meet the numerosity requirement.3

 

B. Commonality

To prevail on his Motion for Class Certification, Plaintiff must establish that there are

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"questions of law or fact common to the class." Fed. R. Civ. P. 23(a)(2). As the Ninth Circuit stated

in Hanlon v. Chrysler Corporation, 150 F.3d 1011, 1019 (9th Cir. 1998), the commonality

requirements of Rule 23(a) are less rigorous than the companion requirements of Rule 23(b)(3). All

questions of fact and law need not be common to satisfy the rule. Id. The existence of shared legal

issues with divergent factual predicates is sufficient, as is a common core of salient facts coupled

with disparate legal remedies within the class. Id.; see also Staton v. Boeing Co., 327 F.3d 938, 953

(9th Cir. 2003) ("Rule 23(a)(2) has been construed permissively."). Factual variations or individual

differences concerning damages, for example, will generally not defeat commonality. See, e.g.,

Blackie v. Barrack, 524 F.2d 891, 905 (9th Cir. 1975) (noting that differences in individual damage

calculations are insufficient to defeat commonality). 

Plaintiff asserts that commonality is established because the central question in this case – 

whether CMs' duties and responsibilities qualify as executive exempt – will require the Court to

determine what tasks CMs, as a group, perform and the amount of time they spend on non-exempt

tasks. In essence, Plaintiff's argument is that because CMs have similar job descriptions, and

Defendant applies the executive exemption to all CMs, the "minimal" showing necessary to establish

commonality is met. See Hanlon, 150 F.3d at 1020. Further, Plaintiff identifies the following

common questions of law: 

i. whether defendant Kinko's violated IWC Wage Orders and/or Labor Code § 510 by

failing to pay overtime compensation to Store Managers who worked in excess of

forty hours per week and/or eight hours per day.

ii whether defendant Kinko's violated Business and Professions Code § 17200 by

failing to pay overtime compensation to Store Managers who worked in excess of

forty hours per week and/or eight hours per day.

iii. whether defendant Kinko's violated Labor Code § § 226.7 and/or 512 by failing to

consistently provide meal and rest periods to its Store Managers.

iv. whether defendant Kinko's violated Labor Code § 1174 by failing to keep accurate

records of employees' hours of work.

v. whether defendant Kinko's violated Labor Code § § 201-203 by failing to pay

overtime wages due and owing at the time that certain Class Members' employment

with Defendant terminated.

vi. whether defendant Kinko's violated Labor Code § 226 by failing to provide the

semimonthly itemized statements to Class Members of total hours worked by each

and all applicable hourly rates in effect during the pay period.

vii. whether Representative Plaintiff and the Class are entitled to "waiting time" penalties,

pursuant to Labor Code § 203. 

Compl. at ¶ 23. 

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The Court agrees that CMs share similar job duties and responsibilities regardless of center

type. Even assuming there are some variations among the daily tasks performed by CMs, as

Defendant alleges, the similarities create common questions as to whether CMs are properly

classified as executive exempt.

Defendant contends that in light of General Telephone Company v. Falcon, 457 U.S. 147

(1982), Plaintiff's reliance on uniform employment policies for all CMs does not satisfy

commonality. In Falcon, the plaintiff alleged that he was discriminated against on the basis of race,

and sought to certify a class composed of all Mexican-Americans employed by his employer. The

Supreme Court overturned the lower's court's decision to certify the class, because there was no

common question of law or fact. In the Court's view, “there is a wide gap between [] an individual's

claim that he has been denied a promotion on discriminatory grounds, and his otherwise unsupported

allegation that the company has a policy of discrimination.” Falcon, 457 U.S. at 157. In order to

find a common question, the Court would need to infer: 

(1) that this discriminatory treatment is typical of petitioner's promotion practices, (2) that

petitioner's promotion practices are motivated by a policy of ethnic discrimination that

pervades petitioner's Irving division, or (3) that this policy of ethnic discrimination is

reflected in petitioner's other employment practices, such as hiring, in the same way it is

manifested in the promotion practices.

Falcon, 457 U.S. at 157-158. The Falcon Court rejected claimant’s “across-the-board” allegation

that, as a member of a racial class, his personal experience with racial discrimination automatically

evidenced company-wide discrimination. Plaintiff, however, does not ask the Court to infer that

Defendants' allegedly illegal actions toward him translated into a company-wide policy of illegal

action for those sharing common characteristics. Rather, Plaintiff directly challenges FedEx Kinko’s

undisputed company-wide policy of categorizing all CMs as exempt employees. 

Defendant insists that simply because CMs are subject to common policies does not mean

that they have identical job duties. According to Defendant, commonality is destroyed by the fact

that different CMs supervise different numbers of employees and have different business volume

and mix depending on which type of center they work at. Defendant asserts that "[t]here is no single

"CM" job." 

As discussed, differences between Hub, Spoke, and Standalone CMs’ job duties and

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responsibilities appear to be minimal, according to FedEx Kinko's own manual. Further,

commonality is not defeated simply because CMs' job duties vary to some extent. In Wang v.

Chinese Daily News, 231 F.R.D. 602, 605, 613 (C.D. Cal. 2005), the court certified a class

consisting of employees with various job descriptions, and held that 

Defendant cannot, on the one hand, argue that all reporters and account

executives are exempt from overtime wages and, on the other hand, argue

that the Court must inquire into the job duties of each reporter and account

executive in order to determine whether that individual is "exempt."

Moreover, Defendant's argument ignores the fact that Plaintiffs are

challenging Defendant's policy of classifying all reporters and account

executives as "exempt."

Defendant further argues that commonality is defeated because some, but not all, CMs signed

arbitration agreements. However, Defendant stated at oral argument that nearly all CMs signed

arbitration agreements, and that the agreements are substantially similar. As such, commonality is

not defeated by the arbitration agreements.

 Plaintiff has met his burden of establishing commonality.

C. Typicality

The third requirement of Rule 23(a) is typicality. The typicality requirement focuses on the

similarity between the lead plaintiff's legal theories and those of the people he or she purports to

represent. Lightbourn v. County of El Paso, 118 F.3d 421, 426 (5th Cir. 1998). As such, "[t]he

commonality and typicality requirements of Rule 23(a) tend to merge." Falcon, 457 U.S. at 158

n.13. However, “[t]ypicality refers to the nature of the claim . . . of the class representative, and not

to the specific facts from which it arose or the relief sought.” Hanon v. Dataproducts Corp., 976

F.2d 497, 508 (9th Cir. 1992). 

Defendant presents several arguments in support of its position that Plaintiff's claims are not

typical: (1) Whiteway did not follow the "2 Assistant Manager" policy and did not receive extensive

training; (2) Whiteway was a CM at a Standalone Center; (3) Whiteway was a CM from November

2001 to the present and, as such, not a CM during the entire proposed class period; (4) Whiteway

lacks standing for some of the claims. 

Whiteway has been a CM in a California retail location of FedEx Kinko's since November

2001. Because the alleged injury is based on a misclassification of CMs as executive exempt, he has

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suffered the same injuries and has the same interests as other CMs that FedEx Kinko's classified as

executive exempt at any point during the proposed class period. Thus, it is irrelevant whether he

followed the "2 Assistant Manager" policy and did not receive extensive training, as long as his job

duties were similar to those of other CMs. As discussed, the duties of Standalone CMs are

substantially similar to those of other CMs, so Whiteway’s position as a Standalone Center CM is

also irrelevant. Whiteway does not have to have been a CM for the entire class period, as the class

covers those individuals who were CMs at any time during the class period. 

This Court also rejects Defendant's argument that Plaintiff lacks standing to sue on behalf of

former CMs. Defendant is correct that because Plaintiff is currently employed as a CM, he cannot

recover under California Labor Code sections 201 to 203, which deal with an employer's "willful

[failure] to pay, without abatement or reduction, in accordance with Sections 201, 201.5, 202, and

205.5, any wages of an employee who is discharged or who quits." However, the fact that Plaintiff

is ineligible for one of several damage remedies sought does not defeat the typicality requirement. 

A "representative's claims are 'typical' if they are reasonably co-extensive with those of absent class

members; they need not be substantially identical." Hanlon, 150 F.3d at 1020. Plaintiff and ex-CMs

are eligible to recover under California Labor Code sections 510, 226, 226.7, and 512, as well as

under California Business & Professions Code sections 17200-17208. Those statutes do not require

that the employee terminate employment with the company. Further, Defendant's argument is based

on a mischaracterization of the California Court of Appeals' decision in Pfizer v. Superior Court,

141 Cal. App. 4th 290 (2006). In Pfizer, the Court held that a plaintiff bringing a class action for

relief under the amended California Business & Professions Code section 17204 must have "suffered

injury and lost money or property" as a result of the violation of the Unfair Competition Law in

order to meet the statute's requirement of standing. Id. at 300. Pfizer did not hold that the named

plaintiff in a class action suit must be able to recover under every statute alleged to have been

violated by the defendant. 

Further, this Court is bound to follow the Supreme Court's statement that, "to have standing

to sue as a class representative it is essential that a plaintiff must be a part of that class, that is, he

must possess the same interest and suffer the same injury shared by all members of the class he

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represents." Schlesinger v. Reservists Comm. to Stop the War, 418 U.S. 208, 216 (1974). The Court

declines to impose additional requirements. Whiteway and ex-CMs have suffered similar injuries if

misclassified as executive exempt employees during the class period. They have a similar interest in

recovering overtime pay and other damages. Accordingly, the Court finds that the typicality

requirement is met.

D. Adequacy of Representation

The final requirement of Rule 23(a) is that Whiteway must be able to "fairly and adequately

protect the interests of the class." Fed. R. Civ. P. 23(a)(4). Adequacy of representation assures due

process of law to all unnamed class members; if a person is to be conclusively bound by a judgment

prosecuted by a representative, he must have received adequate representation. Hansberry v. Lee,

311 U.S. 32, 42-43 (1940). To establish adequacy of representation, Whiteway must show: (1) that

his interests are common with, and not antagonistic to, the classes' interests; and (2) that he is "able

to prosecute the action vigorously through qualified counsel." Lerwill v. Inflight Motion Pictures,

Inc., 582 F.2d 507, 512 (9th Cir. 1978).

Plaintiff has established adequacy of representation. There is no evidence that Whiteway has

any conflicts of interest with other CMs in the class. Plaintiff's counsel has already investigated the

claims of the class through depositions, discovery, and interviews. Thus, Plaintiff can adequately

represent the interests of his fellow class members. 

III. Rule 23(b) Requirements

After satisfying the requirements of Rule 23(a), Whiteway must also show that at least one of

the three requirements of Rule 23(b) is satisfied before the Court can certify the class. Amchem

Prods., Inc. v. Windsor, 521 U.S. 591, 614-15 (1997). Plaintiff asserts that the Court could certify

the class pursuant to any of the three requirements.. 

A. Rule 23(b)(1)

Rule 23(b)(1) allows a court to certify a class when the party requesting certification meets

the requirements of Rule 23(a) and either (A) if trying each case separately, would create a risk of

"inconsistent or varying adjudications with respect to individual members of the class which would

establish incompatible standards of conduct for the party opposing the class," or (B) adjudication of

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individual member's claims would substantially impair or impede non-party members' ability to

protect their interests. Fed. R. Civ. P. 23(b)(1). 

According to Plaintiff, the class should be certified under Rule 23(b)(1)(A), because there is

a risk of inconsistent results if individual CMs’ claims as to the validity of their exempt status are

resolved separately. FedEx Kinko's has categorized CMs as a group as executive exempt, and a

decision about such categorization would impact each individual CM. If the Court were to order

Defendant to reclassify an individual as nonexempt, granting that CM overtime, meal breaks, and

rest breaks, then that CM would be treated differently than her fellow CMs, and FedEx Kinko's

would have incompatible standards of conduct toward each CM. Although there is some force to

this argument, the Ninth Circuit has held, as noted by Defendant, that "[c]ertification under Rule

23(b)(1)(A) is . . . not appropriate in an action for damages." Zinser, 253 F.3d at 1193. As

discussed below, although Plaintiff also seeks injunctive relief, this case is best characterized as

primarily a suit for money damages. Thus, the Court declines to certify the class pursuant to Rule

23(b)(1)(A). 

Plaintiff contends that Rule 23(b)(1)(B) also applies, because class members may pursue

punitive damages, and there is a limited fund from which individual class members would be able to

recover. Punitive damage awards for individual members could deplete the corporation's resources

to the point where it could not satisfy judgments against it, and later plaintiffs would be unable to

recover. Defendant contends that Plaintiff has not brought a claim for which the Court could award

punitive damages. Plaintiff responds that the facts alleged in the Complaint show intentional

violations of law, which give rise to a claim for punitive damages. Assuming arguendo that punitive

damages are available, the Zinser court identified a test for determining whether the existence of a

"limited fund" justifies certification under Rule 23(b)(1)(B):

The Supreme Court has held that certain characteristics are

“presumptively necessary, and not merely sufficient, to satisfy the limited

fund rationale” Ortiz v. Fibreboard Corp., 527 U.S. 815, 842 (1999). 

Thus, to satisfy Rule 23(b)(1)(B), a class action plaintiff must demonstrate

that the case involves a “‘fund’ with a definitely ascertained limit, all of

which would be distributed to satisfy all those with liquidated claims

based on a common theory of liability, by an equitable, pro rata

distribution.” Id. at 841.

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Zinser, 253 F.3d at 1197. Plaintiff has not satisfied this test. He has identified no ascertainable limit

on any potential fund for payment of damages, punitive or otherwise, aside from pointing out that

there are due process limits on the size of punitive damage awards. In the absence of a more

complete showing, the Court rejects Plaintiff's argument that the class should be certified under Rule

23(b)(1)(B).

B. Rule 23(b)(2)

Rule 23(b)(2) allows a class action to be certified where Rule 23(a) is met and "the party

opposing the class has acted or refused to act on grounds generally applicable to the class," making

it appropriate to grant relief sought to the class as a whole. Fed. R. Civ. P. 23(b)(2). This subsection

primarily applies to suits injunctive relief, but the Court can certify a class seeking money damages

if “the claim for monetary damages [is] secondary to the primary claim for injunctive or declaratory

relief.” Molski v. Gleich, 318 F.3d 937, 947 (9th Cir. 2003). 

Plaintiff contends that this subsection applies, because many of the class members are current

employees who would benefit from injunctive relief. Plaintiff has not shown that monetary relief is

secondary to the injunctive relief sought. Thus, the Court will not certify the class under Rule

23(b)(2). 

C. Rule 23(b)(3)

Under Rule 23(b)(3), the Court must find that the questions of law or fact common to the

members of the class predominate over any questions affecting only individual members, and that a

class action is superior to other available methods for the fair and efficient adjudication of the

controversy. Fed. R. Civ. P. 23(b)(3). The matters pertinent to a finding under Rule 23(b)(3)

include: (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 litigation concerning the controversy

already commenced by or against members of the class; (c) the desirability or undesirability of

concentrating the litigation of the claims in the particular forum; (d) the difficulties likely to be

encountered in the management of a class action. Id.

The objective behind the two requirements of Rule 23(b)(3) is the promotion of economy and

efficiency in actions that primarily involve monetary damages. See Fed. R. Civ. P. 23(b)(3) advisory

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committee notes. When common issues predominate, true economy may be achieved through the

class action device, as time, effort and expense can be saved as compared to individual suits, and the

confusion over differing outcomes can be avoided. Id. 

The Court agrees with Plaintiff that common questions of law and fact predominate. 

"Because no precise test can determine whether common issues predominate, the Court must

pragmatically assess the entire action and the issues involved." Romero v. Producers Dairy Foods,

Inc., 235 F.R.D. 474, 489 (E.D. Cal. 2006). The Court can more efficiently answer the question of

whether Defendant's exemption of all CMs is correct through a class action than through case-bycase adjudication. 

A recently-decided case, Tierno v. Rite Aid Corp., No. 05-02520 (N.D. Cal Aug. 31, 2006),

lends support to the Court's holding on Rule 23(b)(3). In Tierno, a group of Rite Aid store managers

claimed that their classification as exempt employees violates California labor laws, and moved for

class certification. Judge Henderson granted the motion under Rule 23(b)(3), holding that

"significant aspects" of the case could be resolved on a class basis including "the actual requirements

of the job, the realistic expectations of the employer, the proper classification of Store Manager tasks

as exempt or non-exempt, and Rite Aid's state of mind, knowledge, historical actions, and policies

with respect to its classification and treatment of Store Managers." Id. at 16. Tierno relied on SavOn Drug Stores v. Superior Court, 34 Cal. 4th 319, 336 (2004) (holding that common questions

predominated in overtime case brought by chain store managers). This case presents very similar

issues to Tierno and Sav-On. 

Defendants argue that Plaintiff has not and cannot establish common questions of law or fact,

and as such, no common questions of law or fact could predominate. That argument has been

discussed and rejected. Next, Defendant contends the varying characteristics of the class would

render the class unmanageable. Again, the class has similar characteristics except, perhaps, with

respect to damages. While Defendant argues that this Court should not certify this case as a class

action because it may have to "conduct a particularized assessment of damages for each putative

class member," class certification is not defeated merely because individualized damage issues may

remain. See Smilo v. South Western Bell Mobil Systems, 323 F.3d 32, 40 (1st Cir. 2003) ("Where . . .

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common questions predominate regarding liability, then courts generally find the predominance

requirement to be satisfied even if individual damages issues remain."). 

Once liability issues have been determined, there are various methods available in a class

action lawsuit that the Court may effectively use to resolve the damages issues. Plaintiff proposes

dealing with liability and damages in separate stages, and calculating damages on a collective basis

through questionnaires, surveys, exemplar plaintiffs, a Special Master or some other "innovative

procedural tool." See Tierno at 18 (noting that "courts in overtime cases such as this may properly

couple uniform findings on common issues regarding the proper classification of the position at

issue with innovative procedural tools that can efficiently resolve individual questions regarding

eligibility and damages," and identifying several such tools). 

A class action is superior to multiple individual lawsuits. The needless expenditure of

additional time, effort and money that would be attendant to numerous individual suits is greatly

reduced, and the potential for differing outcomes is avoided as well. See Tierno at 19.

Whiteway has satisfied the criteria of Rule 23(a) and Rule 23(b)(3). Class certification is

appropriate.

CONCLUSION

Plaintiff's Motion for Class Certification is GRANTED. The Court certifies the class of

current and former FedEx Kinko's CMs who were classified as exempt employees at any time

between April 18, 2002, and the present. Plaintiff's counsel is directed to publish notice of the class

action in a newspaper of general circulation twice weekly for two weeks within forty-five days of

the Court's Order. 

IT IS SO ORDERED.

Dated: 9/13/06 _________________________________

Saundra Brown Armstrong 

United States District Judge

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