Impact Fund and Amici: Ninth Circuit’s New “De Minimis” Standard for Predominance Is Wrong and Disadvantages Workers

Andrea Núñez, Law Fellow, The Impact Fund

We recently posted about the decision of the Ninth Circuit Court of Appeals in Olean Wholesale Grocery Coop., Inc. v. Bumble Bee Foods LLC, 993 F.3d 774 (9th Cir. 2021), an antitrust class action alleging a price-fixing conspiracy among the three largest domestic producers of packaged tuna. A 2-1 panel (Bumatay, Kleinfeld, and Hurwitz, JJ.) held that in order to satisfy Rule 23(b)(3)’s predominance requirement, plaintiffs must show that there is no more than a “de minimis” number of uninjured class members in the proposed class. One of the judges on the Ninth Circuit later sua sponte called for a vote on whether the court should rehear the case en banc. 

Yesterday, Impact Fund, along with Bet Tzedek, California Rural Legal Assistance Foundation, Centro Legal de la Raza, Legal Aid at Work, and Public Counsel, filed an amicus brief supporting en banc rehearing. The Ninth Circuit generally disfavors en banc rehearing unless a particular decision conflicts with its precedent or presents a “question of exceptional importance.” As we explain in the brief, the Olean decision satisfies both counts and should be reheard and reversed.  

Our brief argues that the Ninth Circuit should review the Olean decision en banc.

Our brief argues that the panel’s decision is inconsistent with decades of Supreme Court and Ninth Circuit precedent regarding class certification and trials challenging employment discrimination and other workplace violations, such as wage theft. To require plaintiffs to demonstrate no more than a “de minimis” number of uninjured class members at the class certification stage forces district courts to engage in a full-blown inquiry into the merits of the case, an inquiry which the Supreme Court and the Ninth Circuit have repeatedly stated courts are expressly forbidden to undertake at that stage.   

The panel’s decision is inconsistent with the model for certifying and trying employment discrimination class actions under Title VII of the 1964 Civil Rights Act that the Supreme Court articulated decades ago in the landmark Teamsters decision and later endorsed in Wal-Mart Stores, Inc. v. Dukes, 564 U.S. 338, 366-67 (2011). The Teamsters model requires at “stage one” of the trial that plaintiffs first establish that the defendant employer maintained a discriminatory workplace policy. Once the court has found that the defendant was liable under Title VII, the court conducts “stage two” proceedings—“Teamsters hearings”—to determine which class members were injured and which were uninjured, and to determine individual remedies for those who were injured. These individualized injury determinations are not required at the time of class certification and come only during the trial stage. Multiple employment discrimination class actions have been certified classes using the Teamsters model, where the number and identity of uninjured class members are not known until “stage two.” (The Impact Fund and our co-counsel’s case Ellis v. Costco Wholesale Corp., 285 F.R.D. 492 (N.D. Cal. 2012) is one such case.)  

Our brief argues that the panel’s decision is inconsistent with decades of Supreme Court and Ninth Circuit precedent.

The Olean requirement that plaintiffs identify the number of uninjured class members and meet a “de minimis" threshold turns this model on its head. It would effectively force plaintiffs to show proof of liability for every class member at class certification. It would also require that the district court conduct impermissible individualized merits inquiries to differentiate between injured and uninjured class members before it has ruled on liability, rather than at the back end of the litigation as prescribed by Teamsters and Dukes. 

The Olean decision is also inconsistent with Supreme Court and Ninth Circuit case law in class actions challenging wage violations. Those decisions recognize that uninjured class members need not be determined at class certification. See Tyson Foods, Inc. v. Bouaphakeo, 577 U.S. 442 (2016); Ruiz Torres v. Mercer Canyons Inc., 835 F.3d 1125 (9th Cir. 2016). In Ruiz Torres, the Ninth Circuit expressly affirmed class certification of a Rule 23(b)(3) class of domestic farmworkers and held that the presence of uninjured class members did not defeat predominance. 835 F.3d at 1136. So long as there is a way to later “winnow out” uninjured class members at the damages phase of litigation, the Ninth Circuit concluded that “fortuitous non-injury to a subset of class members does not necessarily defeat certification of the entire class.” Id. at 1137. 

Liability and individual injury are critical questions in class actions enforcing workplace rights. But, as the Supreme Court and Ninth Circuit agree, the injury determination is properly conducted after class certification and liability is established. Should the panel decision be allowed to stand, it will continue to exact onerous evidentiary burdens on plaintiffs seeking class certification. This is particularly true of plaintiffs in employment discrimination and other workers’ rights and civil rights cases, where plaintiffs have less access to information than defendants. The majority’s unrealistic class certification requirements will thus deprive vulnerable communities—including those that proposed amici serve—of class actions, one of the most important procedural mechanisms available for enforcing their rights. We hope that the full Ninth Circuit will reconsider this harmful decision.  

The Impact Fund is grateful for the support of their fellow amici. 

UPDATE 08.03.21:

The full Ninth Circuit vacated the panel opinion and ordered en banc rehearing in Olean Wholesale Grocery v. Bumble Bee Foods. The Impact Fund welcomes this news and opportunity for the full court to reject the unwritten class certification requirement that the class include no more than a de minimus number of uninjured class members.