Court Opinion

ID: 4018040
Source: CourtListenerOpinion
Date Created: 2016-07-21 20:01:15.178997+00
Date Added: 2024-06-11T07:44:56.705938
License: Public Domain

NOT FOR PUBLICATION

                     UNITED STATES COURT OF APPEALS
                                                                            FILED
                            FOR THE NINTH CIRCUIT
                                                                                JUL 21 2016
                                                                         MOLLY C. DWYER, CLERK
                                                                           U.S. COURT OF APPEALS
RODERICK WRIGHT; FERNANDO                         No. 14-55944
OLIVAREZ; MARCUS HAYNES, Jr., On
Behalf of Themselves and Others                   D.C. No. 2:13-cv-06642-GAF-
Similarly Situated,                               AGR

              Plaintiffs - Appellants,
                                                  MEMORANDUM*
 v.

RENZENBERGER, INC., a Kansas
corporation,

              Defendant - Appellee.

                    Appeal from the United States District Court
                       for the Central District of California
                     Gary A. Feess, District Judge, Presiding

                         Argued and Submitted May 5, 2016
                               Pasadena, California

Before: FISHER, M. SMITH, and NGUYEN, Circuit Judges.

      Plaintiffs-Appellants Roderick Wright, Fernando Olivarez, and Marcus

Haynes, Jr. appeal from the district court’s denial of their motion for class

        *
             This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
certification. We affirm in part, reverse in part, vacate in part, and remand for

further proceedings.

      Defendant-Appellee Renzenberger, Inc. (Renzenberger) employed

Appellants as drivers to transport railroad crews between and within railroad yards.

In the operative complaint, Appellants alleged that Renzenberger failed to comply

with laws concerning rest breaks and compensation. Appellants moved for

certification of five classes. The district court granted certification as to the one

class not opposed by Defendant, the Separate Pay Class, but denied certification as

to the other four classes. We do not disturb the ruling concerning the Separate Pay

Class, and address the remaining proposed classes in turn. At the outset, we note a

district court can resolve merits questions at the class certification stage “only to

the extent . . . that they are relevant to determining whether the Rule 23

prerequisites for class certification are satisfied.” Amgen Inc. v. Conn. Ret. Plans &

Trust Funds, 133 S. Ct. 1184, 1195 (2013). The district court erred in determining

merits issues best left for a motion to dismiss or motion for summary judgment.

I.    The Rest Break Class

      The proposed Rest Break Class alleged Renzenberger’s rest break policies

failed to “authorize and permit” rest breaks as required under California law. The

district court denied class certification for lack of commonality, reasoning that

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“[b]ecause Renzenberger’s policies plainly comply with [California law], Plaintiffs

have not demonstrated the possibility of any common injury or any common

resolution.”

       This was an abuse of discretion. Commonality turns on whether class

treatment will “‘generate common answers apt to drive the resolution of the

litigation.’” Ellis v. Costco Wholesale Corp., 657 F.3d 970, 981 (9th Cir. 2011)

(quoting Wal-Mart Stores, Inc. v. Dukes, 564 U.S. 338, 350 (2011)). Whether

Renzenberger’s policies complied with the law was a common question, whatever

its merits. See Stockwell v. City & County of San Francisco, 749 F.3d 1107, 1113-

14 (9th Cir. 2014) (“[T]he district court erred in denying class certification because

of its legal error of evaluating merits questions, rather than focusing on whether the

questions presented, whether meritorious or not, were common to the members of

the putative class.”).

       However, “Rule 23(b)(3) requires a showing that questions common to the

class predominate.” Amgen, 133 S. Ct. at 1191 (emphasis omitted). And here, the

common question of the policies’ legality does not predominate. Renzenberger’s

rest break policy in its July 10, 2011 handbook stated: “Drivers are provided one

paid 10-minute rest break for every four hours worked. Drivers should aim to take

their rest breaks during the middle of each four hour period. Waiting time and time

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in between yard moves will be counted as rest breaks.” Renzenberger’s rest break

policy in its January 2, 2014 handbook stated: “Drivers are provided one paid and

uninterrupted 10-minute rest break for every four hours worked, or major fraction

of four hours. . . . Drivers should aim to take their rest breaks during the middle of

each four hour period. Rest breaks should be taken during waiting time and time in

between yard moves.”

      Appellants argue that these policies fail to provide the statutorily required

rest breaks because “Renzenberger does not guarantee any minimum amount of

‘waiting time’ or ‘time in between yard moves’ and makes no effort to know in

advance whether ‘waiting time’ or ‘time in between yard moves’ will actually

occur, when it will occur, or how long it will last.” Because the policies on their

face permit rest breaks, Appellants can establish liability only by showing that, by

operation of the policies, they were not permitted to take ten consecutive minutes

of break per four hours.

      But as Appellants conceded below, “[t]he amount of ‘waiting time’ and

‘time in between yard moves’ varies each day depending on numerous variables,

such as the number of drivers, the number of trains, how far a driver has to travel,

the number of vans available, whether there was a train derailment, and traffic.”

Mem. P. & A. in Supp. of Pls.’ Mot. for Class Certification at 6 (Mar. 10, 2014)

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(ECF 26). Unlike the policy at issue in Brinker Restaurant Corp. v. Superior

Court, 273 P.3d 513, 531 (Cal. 2012), Renzenberger’s policies do not uniformly

deprive employees of rest breaks; the effect of the policies depends instead on their

interaction with these variables, which differ for each class member. Because these

individualized determinations predominate over the common questions, we affirm

the denial of certification of the Rest Break Class.

II.   The Pay Averaging Class

      The proposed Pay Averaging Class challenged the legality of a policy that

ensured an employee’s average hourly rate for the workweek was at or above

minimum wage, instead of ensuring that each hour was separately compensated at

no less than minimum wage. Renzenberger’s January 2012 road payroll policy

provided:

      The Fair Labor Standards Act requires employers to compensate non-
      exempt employees at a minimum hourly wage. The unit of measure
      used for determining compliance with the minimum wage requirement
      is a pay week. Therefore, all trips for a pay week must be used to
      calculate a Driver’s effective hourly rate. The pay system compares
      effective hourly rate to minimum wage and makes an adjustment if at
      any time the effective hourly rate is less than the minimum wage. The
      adjustment shows on your pay stub.

The district court held that this policy did not give rise to any injury because all

non-driving work was compensated by hourly wages at or above minimum wage,

                                           5
such that the only possible injury would arise from piece rate pay. The district

court distinguished the cases upon which Appellants relied, reasoning that all work

was compensated either by a piece rate or an hourly wage, and there could be no

injury because Renzenberger provided additional compensation if the overall

average hourly rate was too low and “[t]he very nature of piece rate pay is such

that this type of averaging must happen from time to time.” On that basis, the

district court denied certification.1

       Again, the district court abused its discretion by denying certification based

on its view that the common question would be resolved against the proposed

class. But unlike for the Rest Break Class, the common questions for the Pay

Averaging Class predominate because liability as to all class members turns on

whether averaging is permissible.

       Renzenberger urges us to uphold the denial of certification on the alternative

ground that the case could not be manageably tried on a classwide basis because

the court would have to determine for each hour worked whether the pay was

       1
        The district court also denied certification due to an ambiguity relating to
the class period. The proposed class period was from August 1, 2011 until
February 22, 2014, but the district court noted that the policy appears to have been
put into effect in January 2012, and Renzenberger stated that it operated under the
policy beginning only in July 2012. The district court could have tailored the class
definition to account for this timing issue.

                                           6
hourly or piece rate, and if the latter, whether the rate fell below minimum wage.

But the case does not involve a dispute about which hours were piece rate and

which were hourly. Renzenberger maintains that all non-driving work was

compensated at or above minimum wage. Thus, the question is only whether it is

permissible to average piece rate hours.

       If that averaging is not permissible, whether the rate fell below minimum

wage for any given piece rate hour is merely a question of calculating damages.

“[D]amages determinations are individual in nearly all wage-and-hour class

actions,” and “damage calculations alone cannot defeat class certification.”

Jimenez v. Allstate Ins. Co., 765 F.3d 1161, 1167 (9th Cir. 2014) (quoting Leyva v.

Medline Indus., Inc., 716 F.3d 510, 513 (9th Cir. 2013)). Certification would not

preclude Renzenberger’s “opportunity to raise any individualized defense it might

have at the damages phase of the proceedings.” Id. at 1168. Accordingly, we

reverse the district court’s denial of class certification of the Pay Averaging Class.

III.   The Wage Statement Class

       The proposed Wage Statement Class alleged Renzenberger failed to provide

“an accurate itemized statement” showing “all applicable hourly rates in effect

during the pay period and the corresponding number of hours worked at each

hourly rate,” as required by Cal. Labor Code § 226(a). Specifically, Appellants

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contended that the road driver wage statements showed wait time and

corresponding rates in only per-minute—not hourly—increments, although total

hours were provided using an hourly measure. And Appellants contended that the

yard driver wage statements provided the average hourly pay rate only per week,

rather than per day. Appellants also contended that for both road and yard drivers,

Renzenberger’s statements incorrectly listed the overtime rate as one-half the

regular rate, the same as the regular rate, or did not list the overtime rate at all.

       The district court observed that class certification might be appropriate if it

considered only the wage sheets, but that employees also received pay stubs with

their wage sheets, and the pay stubs “provide[d] both the total time worked and an

hourly rate for each component of that time.” The district court held that Plaintiffs

had not demonstrated any injury, “and have therefore not demonstrated that they

have an injury typical of the class,” and denied certification.

       This was an abuse of discretion. “The test of typicality is whether other

members have the same or similar injury, whether the action is based on conduct

which is not unique to the named plaintiffs, and whether other class members have

been injured by the same course of conduct.” Ellis, 657 F.3d at 984 (quotation

marks and citation omitted). “The purpose of the typicality requirement is to assure

that the interest of the named representative aligns with the interests of the class.”

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Hanon v. Dataproducts Corp., 976 F.2d 497, 508 (9th Cir. 1992). Thus, whether a

named plaintiff actually suffered injury is irrelevant;2 what matters is whether the

plaintiff has alleged the same type of injury as other plaintiffs. Here, Wright’s

claims are typical of the class because, according to Appellants, their “theory of

liability is that drivers are injured because they are required to perform

mathematical calculations to determine whether they were accurately paid for all

hours worked.”3 Though Rezenberger asserts that liability is precluded by

information provided to employees in pay stubs, the legality of Rezenberger’s

policies regarding the information included in pay stubs can be determined on a

classwide basis. We therefore reverse the district court’s denial of class

certification of the Wage Statement Class.

      2
         Renzenberger contends it was appropriate to list a half-of-regular rate for
overtime pay because employees had already been paid at the regular hourly rate
for the total number of hours worked, including overtime hours, such that the half
rate accurately reflected the incremental payment due. That contention goes to the
merits, and can be determined on a class-wide basis. It does not affect the typicality
of the claim.
      3
        As Appellants noted, there is variation in the wage statements and pay
stubs, which sometimes represent the overtime rate as one-and-half times the
regular pay rate, sometimes as half the regular pay rate—sometimes as both on the
same document—and sometimes omit the rate. Given the nature of the asserted
claim, this limited variation does not show that the named plaintiffs’ injury is
atypical or that the claim is not amenable to class treatment.

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IV.    The Waiting Time Class

       The proposed Waiting Time Class sought penalties for failure to timely pay

all wages owing at the time of termination of employment for all members of the

Rest Break, Separate Pay, and Pay Averaging Classes whose employment ended

between August 1, 2011 through the date of certification. Thus, Waiting Time

Class members needed to show they were owed additional rest break and minimum

wages—i.e., they must prevail on their rest break, separate pay and pay averaging

class claims—and that Renzenberger willfully failed to pay those wages. See Cal.

Labor Code § 203(a).

       The district court denied certification on the ground that Appellants failed to

allege that Renzenberger failed to provide named plaintiff Haynes with the wages

due at the conclusion of his employment. This finding was an abuse of discretion.

Appellants had, in fact, alleged that “Plaintiff Haynes, Jr. and other Waiting Time

Class members were not timely paid all wages owing at the time of termination of

employment.” However, while appellants alleged that the failure to pay wages at

the time employment ended was willful, no specific facts supported that allegation.

       We leave the question of whether the willfulness determination is suitable

for class treatment to the district court in the first instance. Should the district court

determine that class treatment is proper, it will need to modify the definition of the

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Waiting Time Class to account for the denial of certification of the Rest Break

Class.

V.       Conclusion

         We therefore affirm the denial of certification as to the Rest Break Class,

reverse the denial of certification as to the Pay Averaging and Wage Statement

Classes, and vacate and remand as to the Waiting Time Class.

AFFIRMED in part, REVERSED in part, and VACATED in part.

         Each party shall bear its own costs.

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