The California Supreme Court heard oral argument yesterday in Duran v. U.S. Bank, a case that gives the Justices the opportunity to answer broad questions about whether statistical evidence and or a sampling of testimony may ever be used to establish class liability in a misclassification/overtime case. (See here for our prior posting on the California Court of Appeals’ decision)  Based on the oral argument, it appears as if a clear majority of the Court is prepared to overturn the class liability verdict and decertify the class, but without issuing a ruling that would resolve the most important legal issues in sweeping fashion.

From the tenor of their questions and comments, it appears as if five or six of the Justices believe that the so-called “random” sampling of testimony permitted by the trial court was anything but that and therefore an insufficient foundation for a finding of class liability.  The Justices appeared concerned that the sample size (roughly 20 employees) was too small to have any statistical significance, and had been created in a way that enabled plaintiffs to cherry-pick the most favorable group.  They also were concerned about the exclusion of 75 individual declarations offered by the defense to counter the “sampled” testimony, and by the large error rate that plaintiffs’ expert acknowledged existed.

But while it seemed clear that most Justices regarded the evidentiary basis for the class judgment as wholly inadequate, those Justices gave no indication that they intended to determine whether statistics or sampling evidence may ever be the foundation for class liability and, if so, when.  And the majority of the Justices–while clearly troubled by the exclusion of the numerous defense declarations–gave no indication as to the scope of the employer’s right to present individual testimony generally. To the contrary, several Justices suggested there would be no need on this record to resolve such broad questions.

Of all the justices, only one, Justice Liu, seemed to think that the sampling permitted by the trial court was adequate and consistent with due process.  He repeatedly suggested–without apparent agreement from the other Justices–that the sampled testimony was simply like all other evidence–inherently uncertain, but a permissible basis for drawing an inference that extrapolated the experience of the members of the sampled group to the entire class.

A majority of the Justices also appeared to be ready to conclude that the trial court erred in refusing to decertify the class after the proof at trial showed that the plaintiffs’ theory of recovery was not susceptible to class-wide proof.  The Court, however, appeared more closely divided on this question than as to liability.  Justice Werdegar, who appeared to agree that the 20 person sample was too small, appeared to suggest that a larger, better-selected sample could have solved the problem.  And Justice Baxter, who appeared very critical of the liability judgment, wondered whether a remand for consideration of a more narrowly-defined class would be appropriate.

All in all, it appears as if Duran will result in a pro-employer ruling.  But the decision appears likely to leave many important questions unanswered.  The Supreme Court’s decision is expected within the next 90 days.  We will have a full analysis of the decision as soon as it is issued.