Decision: In Roach v. T.L. Cannon Corp., the US Circuit Court of Appeals for the Second Circuit reversed a lower court’s dismissal of a wage-and-hour class action against a New York Applebee’s franchise. The trial court denied class certification, holding that the US Supreme Court’s decision in Comcast Corp. v. Behrend precluded class treatment solely because the employees’ damages could not be measured on a class-wide basis. The Second Circuit noted that the trial court’s failure to consider whether the question of the employees’ individualized damages predominated over common questions of the employer’s liability. The Second Circuit reversed the denial of certification, holding that the trial court’s certification denial “was not required by Comcast, was contrary to the law of this circuit—left undisturbed by Comcast—that individualized damages determinations alone cannot preclude certification under Rule 23(b)(3) and cannot support the district court’s denial of Plaintiffs’ motion for certification.”
Impact: This decision clarifies that individualized damages determinations, which are typical in many wage-and-hour cases, by themselves generally will not preclude class certification. The Second Circuit’s ruling is consistent with other appellate court interpretations ofComcast as not precluding class certification where individualized damages determinations may be required. Rather, courts will assess whether any individualized issues of damages predominate over common issues of liability, as well as whether the other Rule 23 requirements are satisfied. Employers facing class certification motions—in wage-and-hour cases or otherwise—should remember this important point when developing their class certification defense strategy.