United States: Courts Deny Certification For Adequacy Of Representation In Second Class Action

Last Updated: February 20 2018
Article by Gregory V. Mersol

One of the tactics in the current plaintiffs' wage and hour playbook is to bring a second claim after settlement of an initial class or collective action lawsuit. In these cases, the second set of claims is purportedly brought on behalf of those who did not opt in or participate, or it is for alleged violations occurring after the settlement of the initial case. The strategy in some respects is that this is relatively easy money, as much of the discovery has already been done and the employer has already settled the claims once and presumably may do so again to save litigation cost. As two recent cases demonstrate, these tagalong cases may present problems of their own when there are problems with the class representatives.

It's not clear what the attorneys were thinking in the first case, Robinson v. The Chef's Warehouse, Case No. 15-cv-05421-RS (N.D. Cal., Feb. 8, 2018). The Robinson case concerned a putative class of delivery drivers in California who asserted that the employer had not properly publicized its meal and rest period policies and had denied them the meal and rest time provided under California law. This case followed a 2012 action brought against the employer involving the very same class and claims in California state court. That first action was settled in 2014.

The employer's response in the second case, the court acknowledged, was atypical in that it challenged the adequacy of representation based both on the past conduct of plaintiffs' counsel and the claims of the class representatives themselves. The court disposed of the challenge to the attorneys largely by sidestepping it, as the attorneys being accused of inappropriate conduct allegedly were not the ones being proposed as class counsel. Having said that, one might question why that was an issue and whether an attorney deemed unfit to act as class counsel based on conduct should be permitted near a putative class action at all.

The court's concern, rather, was with the two plaintiffs. In the prior litigation, they had submitted declarations in 2013 that they understood the company's meal and rest break policies, had always been provided with them, and had been paid properly for all hours worked. While they attempted in this later case to claim that they were complaining of conduct after that time, the court was skeptical. It found that for whatever reason, any claim they might bring on behalf of the class would be undercut by their prior testimony, rendering them inappropriate class representatives.

The opinion does not state why these employees sought to bring a second class action when they had admitted that the employer had followed California law. Nor does it state what motivated the attorneys to file a second action on the same subject matter when the first case was settled. Whether it was buyer's remorse or some unexplained change in course by the employer, the court found that their prior position was fatal to their claims.

The second case is Butler v. Harvest Management Sub LLC, Case No. 2:17-cv-00685 (W.D. Wa., Feb. 15, 2018). The Butler case involved claims of misclassification of what was claimed to be thousands of property managers. The defendant had settled a similar case brought in the Central District of California in 2013. In 2017, two of the original class members (who appear to be spouses – the record is less than clear) filed a second class action in federal court in the state of Washington to bring the same claims for the period after the settlement. Along the way, however, these two individuals had declared bankruptcy without listing potential wage and hour claims as an asset. The defendant did not simply oppose certification but also sought to dismiss their claims outright under Rule 12(b)(6) due to the failure to disclose the claims during the bankruptcy proceeding. Two weeks later, the plaintiffs moved to reopen their bankruptcy to disclose the claims.

The district court found the timing of the plaintiffs' actions "disingenuous" and concluded that they were estopped from asserting their claims. It rejected outright their contention that they were unaware of their claims at the time, a remarkable contention given that they had received settlement funds from the first action and, they claimed, the employer had not changed its policies after the first case. As a result, the claims were dismissed entirely.

The two cases highlight employers' risk of facing a second round of litigation following the resolution of an initial matter, but they also show that while a second case may be easier in some respects, the plaintiffs may face additional hurdles when the named representatives are less than ideal.

The bottom line: Disappointed claimants from a prior case may not make good class representatives in a later action.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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