United States: California Supreme Court Provides Guidance On Class Certification

Last Updated: June 11 2014
Article by Robert Jon Hendricks and Carrie A. Gonell

In its Duran decision, the court emphasized that trial courts considering class certification must determine whether the case is manageable as a class action.

On May 29, the California Supreme Court issued its decision in Duran v. U.S. Bank National Association,1 outlining the guiding principles for trial courts for both the class certification and trial phases of wage and hour class actions with respect to (1) the manageability of class action trials and (2) the use of statistical sampling in wage and hour trials.

The decision reaffirmed that trial courts considering certification need to focus not only on whether there are potential common questions to be litigated in the class action, but also whether it is "feasible to try the case as a class action."2 The court emphasized that, at the class certification stage, whether a class trial may be successfully managed is as important as whether common questions exist. Courts also have a continuing obligation to decertify a class if they determine that the case is no longer viable as a class action.

The court did not completely rule out the use of statistical sampling in wage and hour cases, but a plaintiff who wants to use such sampling must show that there is a statistically defensible way to do so that allows the defendant to litigate its defenses—even when those defenses are potentially individualized in nature. Given that this may not be possible, alternatively, any viable trial plan has to set out how the parties will litigate those individual issues on a manageable basis, if it is possible to do so. Ultimately, any trial plan must account for the fact that "[l]iability to one employee is in no way excused or established by the employer's classification of other employees."3

The following sections provide a more in-depth look at the lower court proceedings as well as the California Supreme Court's decision.

Lower Court Proceedings

In December 2001, a putative class action complaint was filed, alleging that U.S. Bank National Association (USB) had improperly classified its business banking officers (BBOs) as exempt, thus depriving them of overtime pay under California law. USB relied primarily on the outside sales exemption, which provides that individuals who customarily and regularly work more than half their working time away from the employer's place of business engaged in sales activities are exempt from overtime pay. The trial court certified a class of more than 200 BBOs.

During a classwide trial, the court relied on representative witness testimony from 22 class members, including the two named plaintiffs, to find that the entire class of BBOs was misclassified and owed overtime. Although USB repeatedly sought during and after the trial to introduce evidence of other class members' experiences to support its outside sales exemption defense, the trial court refused to hear this evidence.

On appeal, the appellate court vacated the judgment and decertified the class, finding that USB's due process rights had been violated because of the trial court's conduct.

California Supreme Court Decision

Echoing the appellate court, the California Supreme Court found the injustice of the trial court proceedings to be "manifest" and concluded that USB's due process rights had been violated by the trial court's refusal to consider pertinent evidence that it sought to admit to prove many BBOs qualified for the outside sales exemption and, thus, had no claims for overtime pay.4

The California Supreme Court recognized an employer's right to assert and submit evidence to support relevant affirmative defenses, such as the outside sales exemption, that would preclude liability, "even when these defenses turn on individual questions."5 The court acknowledged that "a misclassification claim has the potential to raise numerous individual questions that may be difficult, or even impossible, to litigate on a classwide basis."6

Continuing Obligation to Decertify

According to the Duran court, even after a trial court has certified a class, it has an ongoing duty, throughout the life of a case, to determine whether the action may be maintained as a class action. If it cannot be, then the class should be decertified. For example, in Duran, USB moved to decertify the class both before and after the trial. In both instances, the trial court denied USB's motions without considering USB's evidence that showed why the case could not proceed as a class action.

An important takeaway for employers going forward is to understand that, even if a trial court initially certifies a class, that does not necessarily mean that the case will proceed as a class through the trial. Discovery that occurs after a class has been certified, for example, could bolster an employer's position that individual questions predominate or that a class trial could not be effectively managed.

Trial Management Plan

The court stressed the importance that trial courts consider the manageability of class actions at the certification stage, including whether and how statistical evidence will comprise part of the proof on class action claims. The court explained that "the manageability of individual issues is just as important as the existence of common questions uniting the proposed class."7 The court further explained that "a defense in which liability itself is predicated on factual questions specific to individual claimants poses a much greater challenge to manageability."8

Statistical Sampling—Errors Committed by the Trial Court in Duran

If statistical sampling is ever used in the class context, it must be (1) representative and (2) "the results obtained must be sufficiently reliable to satisfy concerns of fundamental fairness."9 The court was clear that statistical evidence alone would not be sufficient to establish classwide liability. In this particular case, the court faulted the lower court for the representative sampling it relied on to find classwide liability. The errors that the trial court committed in the eyes of the Duran court included the following:

  • Sample size too small: The trial court selected a sample of 22 individuals out of a class of more than 200 without consulting either party's experts or relying on any statistical methodology. Although the Duran court did not offer a hard and fast rule for what an appropriate sample size would be, it advised that the parties' experts should be involved, the sample size must be "statistically appropriate," and the sample size must be "capable of producing valid results within a reasonable margin of error."10 Thus, the variability of class member experiences must also be taken into account when determining an appropriate sample size.
  • Sample was not random: Even though the trial court initially selected 20 class members at random as a sample, it also included the two named plaintiffs, which undermined the randomness of the sample. The court subsequently excluded one class member from the sample because the court found his experience to be unique and excluded another member because he failed to appear at trial. Also, after permitting the plaintiffs an opportunity to amend their complaint, the court allowed class members a second opportunity to opt out of the class, resulting in four plaintiffs within the sample group opting out. The Duran court thus concluded that the sample was not truly random and was biased in the plaintiffs' favor.
  • Intolerably large margin of error: The trial court erred by relying on a sample that produced a margin of error of more than 43%. The sampled class members worked on average 11.86 hours of overtime per week, but, because of the margin of error, the actual overtime worked could have ranged from 6.72 hours to 17 hours per week. Although noting that such a high margin of error is impermissible, the Duran court did not provide any bright-line guidance as to how high the margin of error could be and still be acceptable.

Any trial plan that relies on statistical sampling must not only avoid the deficiencies in the methodology adopted by the trial court here, but it also "must be developed with expert input and must afford the defendant an opportunity to impeach the model or otherwise show its liability is reduced."11

Scope of the Case

Although the Duran court issued its decision in the context of a misclassification case, its general principles regarding the importance of manageability, particularly at the class certification stage, have widespread applicability.

Next Phase of the Duran Case

On remand, the plaintiffs in Duran may attempt to move to recertify a class of BBOs, but they will have to demonstrate the feasibility of trying the case on a classwide basis. Given the record evidence of differences among how and where the BBOs performed their duties, it is unclear if any trial plan that relies on statistical evidence can ever successfully be developed in this particular case.


1. No. S200923 (Cal. May 29, 2014).

2. Id., slip op. at 22.

3. Id. at 33,

4. Id. at 31.

5. Id. at 19.

6. Id. at 22.

7. Id. at 24.

8. Id. at 25 (emphasis in original).

9. Id. at 50.

10. Id. at 41.

11. Id. at 2.

This article is provided as a general informational service and it should not be construed as imparting legal advice on any specific matter.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Similar Articles
Relevancy Powered by MondaqAI
In association with
Related Topics
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions