Opinion ID: 7263
Heading Depth: 1
Heading Rank: 2

Heading: denial of representative action

Text: The ADEA, at 29 U.S.C. § 626(b), explicitly incorporates section 16(b) of the Fair Labor Standards Act,4 which provides that a person may maintain an action on behalf of himself ... and other employees similarly situated. No employee shall be a party plaintiff to any such action unless he gives his consent in writing to become such a party and such consent is filed in the court in which such action is brought. 29 U.S.C. § 216(b) (emphasis supplied). A difference between an ADEA representative action and a Fed.R.Civ.P. 23 class action is that the ADEA action follows an opt-in rather than an opt-out procedure. See La Chapelle v. Owens-Illinois, Inc., 513 F.2d 286, 289 (5th Cir.1975). However, in discussing the representative action, most courts utilize class action terminology from Rule 23 cases.
In the Fed.R.Civ.P. 23 context, a district court's class certification or decertification decision is reviewed under a 4 29 U.S.C. § 216(b). 4 clearly erroneous standard. See Merrill v. Southern Methodist University, 806 F.2d 600, 607 (5th Cir.1986), We review the district court's refusal to certify the class on an abuse of discretion standard. On appeal, however, we examine not only the evidence available to the district court, but also the facts developed at the trial of plaintiffs' individual claims. (citations omitted); Briggs v. Anderson, 796 F.2d 1009, 1017 (8th Cir.1986) (abuse of discretion review of district court's decision to decertify the class). Appellee argues that the same standard should be applied to an ADEA certification/decertification determination. Appellants, on the other hand, argue that this court should exercise plenary review because the district court employed an incorrect legal standard. For this proposition, Appellants cite Forbush v. J.C. Penney Co., 994 F.2d 1101, 1104-06 (5th Cir.1993). Therein, we employed a de novo standard to review whether the district court properly applied Fed.R.Civ.P. 23 to a class certification question. We hold that the ADEA decertification decision requires a two-part standard of review. The initial question—i.e. what legal standard should the district court have used—is a question of law to be reviewed de novo. Once the correct legal standard is ascertained, the district court's application of the standard must be reviewed for abuse of discretion.
The center of this dispute is what similarly situated means in the ADEA context. Although there are many district court cases 5 addressing the issue, the proper class certification procedure for an ADEA representative action is largely a matter of first impression for the circuit courts. The district court cases seem to divide along two basic lines.
The first line of cases is typified by Lusardi v. Xerox Corp.,5 and represents the method followed by the trial court in this matter.6 Lusardi and its progeny are remarkable in that they do not set out a definition of similarly situated, but rather they define the requirement by virtue of the factors considered in the similarly situated analysis.7 In other words, this line of 5 Lusardi v. Xerox Corp., 118 F.R.D. 351 (D.N.J.1987), mandamus granted in part, appeal dismissed, Lusardi v. Lechner, 855 F.2d 1062 (3rd Cir.1988), vacated in part, modified in part, and remanded, Lusardi v. Xerox Corp., 122 F.R.D. 463 (D.N.J.1988), aff'd in part, appeal dismissed, Lusardi v. Xerox Corp., 975 F.2d 964 (3rd Cir.1992). 6 Appellants advance Sperling v. Hoffman-La Roche, Inc., 118 F.R.D. 392, 407 (D.N.J.1988), aff'd in part and appeal dismissed in part, 862 F.2d 439 (3rd Cir.1988), aff'd and remanded, Hoffman-La Roche, Inc. v. Sperling, 493 U.S. 165, 110 S.Ct. 482, 107 L.Ed.2d 480 (1989), as a different approach to the similarly situated inquiry. Upon careful examination, however, it is obvious that the Sperling court only addressed class certification at the notice stage. In fact, the court leaves open the possibility of future decertification of the class. See id. at 407 ([N]othing would appear to prevent the court from modifying or reversing a decision on similar situations' at a later time in an action, as new facts emerge.). We read the Sperling case as simply another example of the two-stage Lusardi analysis. 7 Four factors were named as the primary reasons for the initial decertification of the Lusardi class. See Lusardi v. Xerox Corp., 118 F.R.D. 351, 359 (D.N.J.1987), For several reasons, including (1) the disparate factual and employment settings of the individual plaintiffs; (2) the various defenses available to 6 cases, by its nature, does not give a recognizable form to an ADEA representative class, but lends itself to ad hoc analysis on a case-by-case basis. Under Lusardi, the trial court approaches the similarly situated inquiry via a two-step analysis. The first determination is made at the so-called notice stage. At the notice stage, the district court makes a decision—usually based only on the pleadings and any affidavits which have been submitted—whether notice of the Xerox which appear to be individual to each plaintiff; (3) fairness and procedural considerations; and (4) the apparent absence of filings required by the ADEA prior to instituting suit, the class will be decertified. On remand, the Lusardi court examined a variety of factors, and again decided to decertify the class. The members of the proposed class come from different departments, groups, organizations, sub-organizations, units and local offices within the Xerox organization. The opt-in plaintiffs performed different jobs at different geographic locations and were subject to different job actions concerning reductions in work force which occurred at various times as a result of various decisions by different supervisors made on a decentralized employee-by-employee basis. This case should not continue in a class status. .... There is no commonality amoung [sic] the people who were subject to more than sixty-five separate reductions in force, virtually all of which occurred at separate points in time. In the absence of one corporate wide reduction in force, about all that the members of the proposed class have in common is their termination and age within the protected range. The disparate individual defenses asserted by Xerox heightens the individuality of the claims and complicates the significant management problems. Lusardi v. Xerox Corp., 122 F.R.D. 463, 465-66 (D.N.J.1988) (citations omitted). 7 action should be given to potential class members. Because the court has minimal evidence, this determination is made using a fairly lenient standard,8 and typically results in conditional certification of a representative class. If the district court conditionally certifies the class, putative class members are given notice and the opportunity to opt-in. The action proceeds as a representative action throughout discovery. The second determination is typically precipitated by a motion for decertification by the defendant usually filed after discovery is largely complete and the matter is ready for trial. At this stage, the court has much more information on which to base its decision, and makes a factual determination on the similarly situated question. If the claimants are similarly situated, the district court allows the representative action to proceed to trial. If the claimants are not similarly situated, the district court decertifies the class, and the opt-in plaintiffs are dismissed without prejudice. The class representatives—i.e. the original plaintiffs—proceed to trial on their individual claims. Based on our review of the case law, no representative class has ever survived the second stage of review.
The second line of cases is typified by Shushan v. University of Colorado, 132 F.R.D. 263 (D.Colo.1990). Shushan espouses the 8 At the notice stage, courts appear to require nothing more than substantial allegations that the putative class members were together the victims of a single decision, policy, or plan infected by discrimination. Sperling v. Hoffman-La Roche, Inc., 118 F.R.D. at 407. 8 view that § 16(b) of the Fair Labor Standards Act (FLSA) merely breathes new life into the so-called spurious class action procedure previously eliminated from Fed.R.Civ.P. 23. Building on this foundation, the court determined that Congress did not intend to create a completely separate class action structure for the FLSA and ADEA context, but merely desired to limit the availability of Rule 23 class action relief under either Act. In application, the court determined that Congress intended the similarly situated inquiry to be coextensive with Rule 23 class certification. In other words, the court looks at numerosity, commonality, typicality and adequacy of representation to determine whether a class should be certified. Under this methodology, the primary distinction between an ADEA representative action and a Fed.R.Civ.P. 23 class action is that persons who do not elect to opt-in to the ADEA representative action are not bound by its results. In contrast, Rule 23 class members become party to the litigation through no action of their own, and are bound by its results.
The Lusardi procedure was followed in this case. Judge Hughes made an initial determination that the claimants were similarly situated, and permitted notice to be given to the putative class. Later, after 154 persons had opted-in, and after extensive discovery had been conducted, Aramco moved to decertify the class. Judge Werlein determined that the claimants were not similarly situated, granted Aramco's motion and dismissed the opt-in 9 plaintiffs without prejudice. Judge Werlein set out extensive reasons for his finding. An analysis of the pertinent facts in the case at bar reveals that the would-be members of the ADEA representative class were subject to vastly disparate employment situations. First ... Plaintiffs were employed by at least 93 different Aramco departments scattered over 11 separate locations in Saudi Arabia. Virtually every plaintiff worked in a different division of the company and held a distinct job title requiring different job skills. Moreover, Plaintiffs differ significantly in employment characteristics such as job tenure (varying from 1 to 34 years), employment history, salary grade, qualifications, and education. Plaintiffs were of vastly different ages when hired, and varied in age at termination from 40 to 68. As discussed in more detail below, Plaintiffs were discharged from their employment in several different years upon the recommendation of different decision-making supervisors for a variety of reasons. The specific circumstances of termination alleged by Plaintiffs are equally diverse. Deposition testimony from the respective Plaintiffs reveals a wide range of claims and theories of recovery, including: discriminatory selection for RIF, forced retirement, replacement with younger, older, American, Saudi, or Muslim employees, and Aramco's refusal to transfer Plaintiffs to other departments. Some Plaintiffs allege that Aramco should have bumped other employees to create open positions for them. Still others claim that Aramco retaliated against them by refusing to rehire them after they complained of discriminatory treatment. .... In view of the hodgepodge of claims and allegations, it is clear that the defenses available to Aramco are just about as disparate as the Plaintiffs themselves. .... Moreover, because Aramco, as a defendant in an ADEA action, is entitled to articulate legitimate, nondiscriminatory reason[s] for the employees' reaction, including reasonable factors other than age (RFOA), the court's evaluation of Aramco's defenses inevitably will require presentation of evidence unique to each individual plaintiff. .... Third, the evidence submitted by Aramco indicates that there existed no single company-wide reduction in force 10 (RIF). As reflected in the affidavits of Aramco officers and supervisors, the downsizing of the Aramco work force was implemented on a highly decentralized level by local management. In contrast to the cases relied upon by Plaintiffs, wherein the common thread unifying Plaintiffs' claims was a company-wide action executed by a relatively small number of supervisors within a short time period, in the instant case it appears that the elections for individual terminations were made by hundreds of different supervisors in separate departments with differing constraints and objectives, based upon considerations of various skills, performance factors, and business need in each [of five] year[s]. .... These facts, and the absence of any controverting evidence submitted by Plaintiffs, lead the Court to conclude that Aramco's surplussing decisions were made in a manner similar to that in Lusardi: between 1984 and 1988, Aramco experienced not one, but well over 297 separate RIFs of expatriate employees. .... The facts developed at this time indicate that it would be difficult, if not impossible, to identify as many as two or three of the more than 130 potential Plaintiffs who could be said to be similarly situated within the meaning of the ADEA statute. Moreover, Plaintiffs themselves have made no attempt to identify a smaller group of individuals who might comprise a similarly situated sub-class for ADEA purposes. .... Other than the global allegations of Plaintiffs that the ADEA was violated, that they were formerly Aramco employees, and that they were in the protected age group over forty, there is no real commonality among the named Plaintiffs and the opt-in group. .... For numerous reasons, including (1) the widely disparate factual, employment, and discharge histories of the individual Plaintiffs; (2) the variety of particular, differing, and sometimes unique defenses available to Aramco in contesting the varied and disparate claims of 130 or more former employees; and (3) fairness and procedural considerations, the Court concludes that Plaintiffs are not similarly situated within the meaning of Section 16(b) of the ADEA. 11 (citations and footnotes omitted).
We find it unnecessary to decide which, if either, of the competing methodologies should be employed in making an ADEA class certification decision. From the record, it is apparent that in this case, no matter how we analyze the similarly situated requirement, we cannot say that the district court abused its discretion in finding that the opt-in plaintiffs were not similarly situated. In so holding we specifically do not endorse the methodology employed by the district court, and do not sanction any particular methodology. We simply need not decide the appropriate methodology under these facts, and therefore leave that inquiry for another day.