The United States Court of Appeals for the Second Circuit has joined the growing number of circuit courts that have rejected a broad reading of Comcast Corp. v. Behrend, 133 S.Ct. 1426 (2013). In Roach v. T.L. Cannon Corp., 2015 WL 528125 (2d Cir. Feb. 10, 2015), the Second Circuit held that Comcast left undisturbed the Second Circuit’s prior holdings that individualized damages determinations alone cannot preclude class certification under Rule 23(b)(3).
In Roach, former restaurant employees filed a putative class action under the New York Labor Law alleging that their employer enforced unlawful pay policies. The employees argued that common liability questions predominated over any individual damages questions and sought certification under Rule 23(b)(3). The district court denied certification under its interpretation of Comcast, holding that the employees’ failure to offer a damages model susceptible of measurement on a class-wide basis was fatal to certification under Rule 23(b)(3).
The Second Circuit vacated the district court’s decision and held that Comcast did not overrule the circuit’s prior decisions that found the need to ascertain damages on an individualized basis is insufficient to defeat class certification under Rule 23(b)(3). Instead, the Second Circuit adopted a narrow interpretation of Comcast, requiring only that when a model for determining class-wide damages is relied upon to certify a Rule 23(b)(3) class, the model must actually measure damages resulting from the class’s asserted theory of injury. Under this interpretation, a plaintiff need not rely on a class-wide damages model to meet the predominance requirement of Rule 23(b)(3). Rather, the fact that damages require individualized proof is just one factor to consider when applying Rule 23(b)(3)’s predominance test.
With the Roach decision, the Second Circuit has joined the courts of appeals for the First, Fifth, Sixth, Seventh, Ninth, and Tenth Circuits in adopting this narrow reading of Comcast. As we have discussed in prior blog posts Oct. 10, 2014, July 11, 2014, June 7, 2014, May 16, 2014, the Comcast dissent’s view that the majority’s “ruling is good for this day and case only” seems to have all of the momentum, and the circuit courts have exhibited little interest in changing their prior practices as a result of Comcast.