It's not uncommon to see putative classes pleaded in terms of the violation of a specific statute, such as "all managers misclassified as exempt by defendant" or "all persons harmed by defendant's discriminatory policies." In all likelihood, classes may be pleaded this way due to the attorney's bravado that, of course, all of the defendant's managers are misclassified, or that all of its employees within a protected group are harmed by the targeted policy. But it is also the classic "heads I win, tails you lose ploy." Such a class definition doesn't really tell us who is in or out of the class. Class members are bound only if they win, and if the defendant wins on the merits the decision doesn't apply to anyone since technically no-one was in the class to begin with.
A growing number of courts are refusing to recognize such classes, as a recent West Virginia District Court decision reflects. In Paulino v. Dollar General Corp., Case No. 3:12-cv-00075 (D. W. Va. May 9, 2014), the plaintiff brought yet another of the countless wage and hour suits against the various dollar store chains. This particular suit involved a claimed failure to pay pages promptly to involuntarily terminated employees within 72 hours under West Virginia state law.
The magistrate judge assigned to the case, following an evidentiary hearing, certified the action. The timing in the opinion is less than clear, but apparently the magistrate judge granted the motion without even being aware of the proposed class definition. After the motion was granted, the plaintiffs proposed the class definition of "All former employees of Dollar General stores located in West Virginia who, according to Dollar General's records, were involuntarily terminated from employment on or after July 10, 2005 and who were not paid their final wages within 72 hours of termination." The employer appealed to the district court judge.
The district court, largely because of the fail safe class definition found that certification was improper. The court concluded that because the definition relied on a merits determination – whether the individual met several elements under West Virginia law – even deciding who was a class member would require an individualized inquiry. This would include, for example, the question of whether an individual was voluntarily or involuntarily terminated – an often ambiguous question in real life. The need for an individualized inquiry necessitated by the class definition implicated several Rule 23 requirements, including commonality, typicality, predominance, and superiority. The court therefore held that certification was improper.
The Paulino decision is interesting in two respects. First, it is odd, to say the least, that the magistrate judge would certify a class without even having a definition. It is impossible, for example, to say that the class members have claims in common when the court doesn't know who they are. Second, it is an example of a thoughtful district court decision not only overruling the magistrate judge, but walking through how a fail safe class can fall short of Rule 23's requirements. In this instance, the court's analysis also suggests that the case probably should not have been brought as a class in any event due to the likely individualized inquiry on the underlying claims.
The Bottom Line: Courts should not certify classes when they don't have a class definition and should not approve fail safe classes that are defined largely in terms of having valid claims on the merits.
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