Ninth Circuit: "Fortuitous Non-Injury" Does Not Defeat Class Certification
Jocelyn D. Larkin, Executive Director - The Impact Fund
The recent appellate decision affirming class certification, Ruiz Torres v. Mercer Canyons Inc., No. 15-35615 (9th Cir. Aug. 31, 2016), written by Judge Milan Smith, skillfully addresses the issues of informational injury, non-injured class members, class definition, and aggregate damages while scrupulously declining defendant's invitation to engage the underlying merits.
In the case the defendant, Mercer Canyons, sought and received permission to hire foreign agricultural workers through the federal H-2A visa program for vineyard work in 2013 to be paid at a rate of $12. As a condition of the program, Mercer was obligated to engage in "positive recruitment" of domestic workers and hire any qualified domestic worker for the H-2A work (and at the $12 rate). The company maintained an employment call-back list for those who were interested in employment opportunities. The company hired, with the assistance of labor contractors, some domestic workers as well as foreign workers to perform the H-2A work. The named plaintiffs, domestic workers, alleged that they were not informed about opportunities or referred for hire, in violation of the Agricultural Workers Protection Act and the Washington Consumer Protection Act, and that those hired were not paid at $12 per hour for H-2A work performed.
The defendant made the strategic choice to seek summary judgment on the underlying liability theories before the class certification motion was heard. The district court (J. Bastian) denied the motion and also declined to certify an interlocutory appeal. That ruling would have a significant impact on the certification decision and the ensuing appeal.
The district court subsequently certified an Inaccurate Information class, and an Equal Pay subclass. The information class presented two common legal issues: whether the defendant had a policy and practice of withholding information about H-2A jobs from domestic workers and whether a material omission (i.e. withholding information) constituted "providing false or misleading information" in violation of the statutes.
On appeal, the defendant argued that the district court misread the substantive law in order to find common issues. The panel observed that this argument was a merits issue and the same merits issue raised and rejected in the summary judgment motion. Defendant could not use a Rule 23(f) appeal to resolve that issue.
On predominance, the panel focused on whether the alleged "informational injury" was too individualized. While the defendant argued that the only cognizable injury would be the actual deprivation of an H-2A job (which would required individual proof of availability, qualifications, immigration status etc.), the court described the injury as "the opportunity to apply for an H-2A job." That "injury" differed, of course, from proof of "actual damages" that could be individualized without running afoul of Rule 23(b)(3).
Defendant also argued that the class could not be certified because it contained both injured and non-injured class members (clearly briefed pre-Tyson). The panel rejected the general proposition and also reiterated that this issue of who was harmed reflected a merits dispute about the scope of liability. Recognizing that some class members may not have suffered harm by the lack of accurate information, it concluded "such fortuitous non-injury to a subset of class members does not necessarily defeat certification of the entire class." The critical fact is that all were exposed to a common course of conduct.
The defendant also contested the class definition as overbroad based on the same merits dispute, but the appellate court concluded that plaintiffs' definition properly tracked its theory of liability. "What is critical is that Plaintiffs' theory of informational injury. . . actually maps onto the membership of the class." This language and the analysis is a useful guiding principle in developing appropriate class definitions.
With respect to the Equal Pay subclass, plaintiffs planned to prove wage underpayment on an aggregate basis. Defendant unsurprisingly labeled this "Trial by Formula." The court, invoking Tyson Foods v. Bouaphakeo, found no error given that the employer did not maintain complete records. And the icing on the analysis, the appeals court highlighted that partitioning an aggregate award of damages may involve individual calculations but that the defendant had no interest in "the identities of those receiving damage awards," resurrecting from the dead the Ninth Circuit's decision in Hilao v. Estate of Marcos.
Congratulations to the team at Columbia Legal Services (Lori Isley, Joachim Morrison, David Solis) and Schroeter Goldmark & Bender (Adam Berger, Martin Garfinkel).
