Roach v. T.L. Cannon Corp., No. 13-3070-cv (2d Cir. Feb. 10, 2015): The Second Circuit Court of Appeals recently vacated and remanded the U.S. District Court for the Northern District of New York’s decision denying class certification to a group of restaurant workers alleging wage violations. The Second Circuit found that the decision in Comcast v. Behrend issued by the Supreme Court of the United States in 2013 did not stand for the proposition that Federal Rule of Civil Procedure 23(b)(3) mandates that damages must be capable of measurement on a class-wide basis for certification. The Second Circuit instead held that Comcast left undisturbed prior circuit precedent that class certification cannot be defeated solely because damages must be ascertained on an individual basis.
The plaintiffs claimed that their restaurant employer violated the “spread of hours” and rest period requirements under the New York State Labor Laws. Following discovery, the plaintiffs moved for class certification pursuant to Rule 23(b)(3). The district court denied class certification, holding that damages under the plaintiffs’ claims were “highly individualized.” As such, the district court found thatComcast required that the plaintiffs’ failure to offer a “damages model” that is “susceptible of measurement” across the entire class for purposes of Rule 23(b)(3) was fatal to certification.
Although the Second Circuit did not accept the plaintiffs’ request to grant certification, it did vacate and remand the case to the district court. In doing so, the Second Circuit instructed that, even though damages may be considered in the predominance query at the class certification stage, “Comcast held that a model for determining classwide damages relied upon to certify a class under Rule 23(b)(3) must actually measure damages that result from the class’s asserted theory of injury . . . the Court did not hold that proponents of class certification must rely upon a classwide damages model to demonstrate predominance.” The Second Circuit thus instructed the lower court to consider predominance and whether there existed any common questions of law or fact. Under this ruling, Second Circuit district courts therefore must evaluate whether individualized damages questions predominate over common questions of liability, and cannot only consider whether the plaintiffs’ damages would be capable of measurement on a classwide basis. The Second Circuit’s evaluation is consistent with other circuits that have examined Comcast in the context of wage and hour claims, and shows the somewhat limited ability of employers to defeat Rule 23 class certification of wage claims even under Comcast.