This week, the U.S. District Court for the District of Massachusetts took retailer Lowe’s advice to “never stop improving” — on the class certification standard. The court issued a decision that may demonstrate that employers are gaining ground in convincing district courts to more narrowly interpret the class certification requirements in light of recent Supreme Court case law.
The case, Magalhaes v. Lowe’s, was filed by a Lowe’s subcontractor who installed shades and blinds for Lowe’s customers. The plaintiff claimed that the arrangement violated Massachusetts’s restrictive independent contractor statute and sought class certification on behalf of a putative class of installation subcontractors whom he claimed should have been classified as employees. District Judge Denise Casper denied the plaintiff’s motion, stating that he had failed to meet the commonality, typicality, adequate representation prongs of Rule 23(a), as well as the predominance requirement of Rule 23(b)(3).
The court relied heavily on the Supreme Court’s 2011 decision in Wal-Mart v. Dukes in rejecting the plaintiff’s claim that commonality was satisfied because all of the subcontractors signed identical contracts with Lowe’s. The court stated that the contract was insufficient to demonstrate common questions of fact because degree of control that Lowe’s actually asserted over the contractors varied despite the terms of the contract. For example, the amount of interaction that each contractor had with Lowe’s representatives varied widely. In addition, the work at issue involved “over fifty different industries” that would each have to be examined individually to determine whether they were “outside the usual course” of the defendant’s business. As a result, a class-wide proceeding could not “produce a common answer” to the central questions in the case.
The court also determined that the plaintiff’s claims were not typical of the putative class and that he was not an adequate representative because he had his own established window treatment installation business and employed two other individuals who also did work for Lowe’s customers. Not only were other class members differently situated for this reason, but the plaintiff’s status as an employer in his own right created a conflict because the contract he signed with Lowe’s required him to indemnify the company for lawsuits brought by his own employees.
Finally, the court stated that the factual distinctions it had identified in addressing the commonality, typicality and adequate representation prongs would create individual inquiries that would overwhelm any common issues. As a result, the predominance requirement of Rule 23(b)(3) was not met.
The case is notable for the its heavy reliance on Dukes’ admonition that common questions must be able to “resolve an issue that is central to the validity of each one of the claims in one stroke.” The decision undoubtedly will help many employers build their own defenses to class certification.