Marlyn Sali v. Corona Regional Medical Center ( 2018 )

FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
MARLYN SALI and DEBORAH No. 15-56460
SPRIGGS, on behalf of themselves, all
others similarly situated and the D.C. No.
general public, 5:14-cv-00985-
Plaintiffs-Appellants, PSG-JPR
v.
ORDER AND
CORONA REGIONAL MEDICAL AMENDED
CENTER; UHS OF DELAWARE INC., OPINION
Defendants-Appellees.
Appeal from the United States District Court
for the Central District of California
Phillip S. Gutierrez, District Judge, Presiding
Argued and Submitted February 16, 2018
Pasadena, California
Filed May 3, 2018
Amended November 27, 2018
2 SALI V. CORONA REGIONAL MED. CTR.
Before: M. Margaret McKeown and Kim McLane
Wardlaw, Circuit Judges, and Salvador Mendoza, Jr., *
District Judge.
Order;
Opinion by Judge Mendoza
SUMMARY **
Class Certification
The panel reversed the district court’s denial of class
certification in a putative class action alleging employment
claims against Corona Medical Center and UHS of
Delaware, Inc; and remanded.
Plaintiffs Marlyn Sali and Deborah Spriggs moved for
certification of seven classes of Registered Nurses, alleging
they were underpaid by Corona as a result of certain
employment policies and practices. The district court denied
certification under Fed. R. Civ. P. 23 of each of the proposed
classes on multiple grounds.
The panel held that the district court’s determination,
that plaintiffs failed to demonstrate their injuries were
typical of the proposed classes, was premised on an error of
*
The Honorable Salvador Mendoza, Jr., District Judge for the U.S.
District Court for the Eastern District of Washington, sitting by
designation.
**
This summary constitutes no part of the opinion of the court. It
has been prepared by court staff for the convenience of the reader.
SALI V. CORONA REGIONAL MED. CTR. 3
law. The panel held that the district court erred by striking a
declaration at this preliminary stage, and the district court
may not decline to consider evidence solely on the basis that
the evidence is inadmissible at trial.
The panel agreed with the district court’s conclusion that
plaintiff Spriggs was not an adequate class representative
because she was not a member of any class she sought to
represent. The panel held, however, that plaintiff Sali was
an adequate class representative, and Spriggs’s inadequacy
was not a valid basis to deny class certification.
The panel held that the district court abused its discretion
by concluding that attorneys from the law firm Bisnar Chase
could not serve as adequate class counsel. The panel also
held that at this early stage of the litigation, the district
court’s decision on this issue was premature, but the district
court was not precluded from considering counsel’s prior
sanctions as evidence of inadequacy if they continue to
neglect their duties.
The panel held that the district court erred by denying
certification of the proposed rounding-time and wage-
statement classes on the basis that they failed Rule 23(b)(3)’s
predominance requirement. First, the panel held that the
district court’s determination that individual questions
predominated in the claims of the proposed rounding-time
class was based on an error of law. Under California law,
the district court erred by interpreting time “actually
worked” to mean only time spent engaged in work-related
activities because time is compensable when an employee is
working or under the control of his or her employer. Second,
the panel held that the district court’s determination - that
individual questions predominate in the claims of the
proposed wage-statement class - was premised on legal
4 SALI V. CORONA REGIONAL MED. CTR.
error. The district court erred by concluding that damages
for members of the wage statement class would require an
individualized determination because California Labor Code
specifies that a violation of § 226 is a per se injury.
COUNSEL
Jerusalem F. Beligan (argued) and Brian D. Chase, Bisnar
Chase LLP, Newport Beach, California, for Plaintiffs-
Appellants.
Christina H. Hayes (argued), Khatereh Sage Fahimi, and
Stacey E. James, Littler Mendelson P.C., San Diego,
California, for Defendants-Appellees.
ORDER
The opinion filed on May 3, 2018, and appearing at
889 F.3d 623 (9th Cir. 2018), is hereby amended. An
amended opinion is filed concurrently with this order.
OPINION
MENDOZA, District Judge
Marlyn Sali and Deborah Spriggs (“Sali and Spriggs”)
appeal the district court’s denial of class certification in this
putative class action alleging employment claims against
Corona Regional Medical Center and UHS of Delaware, Inc.
SALI V. CORONA REGIONAL MED. CTR. 5
(collectively “Corona”). 1 Sali and Spriggs moved for
certification of seven classes of Registered Nurses (“RNs”)
they allege were underpaid by Corona as a result of certain
employment policies and practices. The district court denied
certification on the basis that (1) Federal Rule of Civil
Procedure 23(a)’s typicality requirement is not satisfied for
any of the proposed classes because Sali and Spriggs failed
to submit admissible evidence of their injuries; (2) Plaintiff
Spriggs and proposed class counsel have not demonstrated
they will adequately represent the proposed classes; and
(3) several proposed classes fail to satisfy Rule 23(b)(3)’s
predominance requirement. Because the district court
abused its discretion by relying on each of these reasons to
deny class certification, we reverse.
BACKGROUND
Corona operates a hospital in Southern California that
employs hourly-wage RNs. Sali and Spriggs are RNs
formerly employed by Corona. They assert that a number of
Corona’s employment policies and practices with respect to
RNs violate California law and have resulted in
underpayment of wages. They filed this putative class action
in California State Court on behalf of “all RNs employed by
Defendants in California at any time during the Proposed
Class Period who (a) were not paid all wages at their regular
rate of pay; (b) not paid time and a-half and/or double time
for all overtime hours worked; and (c) denied uninterrupted,
1
We refer to Corona Regional Medical Center and UHS of
Delaware, Inc. collectively as the employer or former employer of the
named plaintiffs and proposed class members. This does not reflect any
judgment about the nature of the relationship between Corona Regional
Medical Center and UHS of Delaware, Inc. or their relative share of
potential liability, which have not been addressed by the district court
and are not at issue on this appeal.
6 SALI V. CORONA REGIONAL MED. CTR.
‘off-duty’ meal-and-rest periods.” They allege Corona
violated California law by (1) failing to pay all regular
hourly wages; (2) failing to pay time-and-a-half for all
overtime; (3) failing to pay double time for all hours worked
in excess of twelve hours in a day; (4) not providing
compliant meal and rest breaks; (5) failing to timely pay all
wages due to separated former employees within seventy-
two hours of separation; and (6) failing to provide accurate
itemized wage statements. Corona removed the case to the
United States District Court for the Central District of
California.
Sali and Spriggs moved for certification of the following
seven classes:
1. Rounding Time Class:
All current and former nurses who work or
worked for Defendants during the Proposed
Class Period who were not paid all wages due
them, including straight time, overtime,
double time, meal premiums, and rest
premiums due to Defendants’ rounding time
policy.
2. Short Shift Class:
All current and former nurses of Defendants
who work or worked pursuant to an
Alternative Workweek Schedule (“AWS”)
during the Proposed Class Period who were
“flexed” between the 8th and 12th hour of
work due to low patient census and not paid
daily overtime.
SALI V. CORONA REGIONAL MED. CTR. 7
3. Meal Period Class:
All current and former nurses of Defendants
who work or worked pursuant to an AWS
during the Proposed Class Period who signed
an invalid meal period waiver, and (1) not
provided a second meal break after 10 hours
of work; (2) not provided meal periods before
5 and 10 hours of work; and/or, (3) not
provided a second meal period after 12 hours
of work.
4. Rest Break Class:
All current and former nurses who work or
worked for Defendants during the Proposed
Class Period who were not relieved of all
duty and therefore not authorized and
permitted to take 10-minute, uninterrupted
rest breaks for every four hours worked.
5. Regular Rate Class:
All current and former nurses who work or
worked for Defendants during the Proposed
Class Period who were not paid at the correct
regular rate for overtime, double time, meal
premiums, and rest premiums.
6. Wage Statement Class:
All current and former nurses who work or
worked for Defendants during the Proposed
Class Period who were not provided pay
stubs that complied with Labor Code § 226.
8 SALI V. CORONA REGIONAL MED. CTR.
7. Waiting Time Class:
All former nurses who worked for
Defendants from August 23, 2010 who were
not paid all wages due at the time of
separation from their employment with
Defendants.
The district court denied certification of each of the
proposed classes on multiple grounds. First, the district court
concluded that Sali and Spriggs’s proposed rounding-time,
short-shift, rest-break, and wage-statement classes failed to
satisfy Rule 23(b)(3)’s predominance requirement. Second,
the district court held that Rule 23(a)’s typicality
requirement was not satisfied for any of the proposed classes
because Sali and Spriggs failed to submit admissible
evidence of their injuries. Third, the district court concluded
that Spriggs was not an adequate class representative
because she is not a member of the proposed class she is
attempting to represent. Finally, the district court held the
attorneys from the law firm Bisnar Chase had not
demonstrated they will adequately serve as class counsel.
Sali and Spriggs appealed the district court’s denial of
class certification. Upon Sali and Spriggs’s motion, we
stayed proceedings in this appeal pending resolution in the
California State Courts of Gerard v. Orange Coast
Memorial Medical Center, a case involving issues related to
certain of the proposed classes. See 381 P.3d 219 (Cal.
2016); 215 Cal. Rptr. 3d 778 (Ct. App. 2017). In light of the
Gerard decision, Sali and Spriggs chose to appeal only the
district court’s denial of class certification with respect to the
proposed rounding-time, regular-rate, wage-statement, and
waiting-time classes.
SALI V. CORONA REGIONAL MED. CTR. 9
STANDARD OF REVIEW
We review a district court’s class certification decision
for abuse of discretion. Parra v. Bashas’, Inc., 536 F.3d 975,
977 (9th Cir. 2008). “[A]n error of law is a per se abuse of
discretion.” Abdullah v. U.S. Sec. Assocs., Inc., 731 F.3d
952, 956 (9th Cir. 2013) (citing Yokoyama v. Midland Nat.
Life Ins. Co., 594 F.3d 1087, 1091 (9th Cir. 2010)).
Accordingly, we first review a class certification
determination for legal error under a de novo standard, and
“if no legal error occurred, we will proceed to review the . . .
decision for abuse of discretion.” Yokoyama, 594 F.3d at
1091. A district court applying the correct legal standard
abuses its discretion only if “it (1) relies on an improper
factor, (2) omits a substantial factor, or (3) commits a clear
error of judgment in weighing the correct mix of factors.”
Abdullah, 731 F.3d at 956. Additionally, “we review the
district court’s findings of fact under the clearly erroneous
standard, meaning we will reverse them only if they are
(1) illogical, (2) implausible, or (3) without ‘support in
inferences that may be drawn from the record.’” Id. (quoting
United States v. Hinkson, 585 F.3d 1247, 1262 (9th Cir.
2009)).
DISCUSSION
A representative plaintiff may sue on behalf of a class
when the plaintiff affirmatively demonstrates the proposed
class meets the four threshold requirements of Federal Rule
of Civil Procedure 23(a): numerosity, commonality,
typicality, and adequacy of representation. In re Hyundai
and Kia Fuel Econ. Litig., 881 F.3d 679, 690 (9th Cir. 2018)
(citing Comcast Corp. v. Behrend, 569 U.S. 27, 33 (2013));
Leyva v. Medline Indus. Inc., 716 F.3d 510, 512 (9th Cir.
2016). Additionally, a plaintiff seeking certification under
Rule 23(b)(3) must demonstrate that “questions of law or
10 SALI V. CORONA REGIONAL MED. CTR.
fact common to class members predominate over any
questions affecting only individual members, and that a class
action is superior to other available methods for fairly and
efficiently adjudicating the controversy.” In re Hyundai,
881 F.3d at 690–91 (quoting Fed. R. Civ. P. 23(b)(3)).
The issues on appeal here concern only Rule 23’s
typicality, adequacy, and predominance requirements: Sali
and Spriggs appeal the district court’s determinations that
(1) Sali and Spriggs failed to demonstrate their injuries were
typical of the proposed classes; (2) plaintiff Spriggs is not an
adequate class representative; (3) attorneys from the firm
Bisnar Chase have not demonstrated they will adequately
serve as class counsel; and (4) the proposed rounding-time,
wage-statement, and waiting-time classes fail Rule
23(b)(3)’s predominance requirement. We conclude that the
district court abused its discretion in each of these
determinations, excluding its finding that Spriggs was not an
adequate class representative. And because plaintiff Sali
remains as a representative plaintiff, Spriggs’s inadequacy
alone is not a basis to deny class certification. Accordingly,
the district court abused its discretion by denying
certification of the proposed rounding-time, regular-rate,
waiting-time, and wage-statement classes.
A. The district court’s typicality determination was
premised on an error of law.
The district court concluded that Sali and Spriggs “have
not carried their burden of demonstrating that the injuries
allegedly inflicted by Defendants on Plaintiffs are similar to
the injuries of the putative class members because [they] do
not offer any admissible evidence of [their] injuries in their
motion for class certification.” The district court further
noted that the “motion does not contain sworn testimony
from either of the named Plaintiffs.” The district court
SALI V. CORONA REGIONAL MED. CTR. 11
reached this decision after striking the declaration of Javier
Ruiz—upon which Sali and Spriggs relied to demonstrate
their individual injuries—on the basis that the declaration
contained inadmissible evidence. This was error. At this
preliminary stage, a district court may not decline to consider
evidence solely on the basis that the evidence is inadmissible
at trial.
1. The district court’s decision to strike the Ruiz
declaration
In support of their motion for class certification, Sali and
Spriggs submitted a declaration by Javier Ruiz to
demonstrate their injuries. Ruiz, a paralegal at Bisnar Chase,
reviewed time and payroll records for the named plaintiffs to
determine whether they were fully compensated under
Corona’s rounding-time pay practice, as well as to address
several other questions that are no longer at issue on this
appeal. The rounding-time practice itself is not disputed.
Corona paid RNs an hourly wage based on the time they
punched in and out, rounded to the nearest quarter hour. For
example, if an RN clocked in at 6:53 a.m. or at 7:07 a.m., his
or her time was rounded to 7:00 a.m. Sali and Spriggs allege
that this policy, over time, resulted in failure to pay RNs for
all of their time worked. To determine the policy’s effect on
Sali and Spriggs individually, Ruiz used Excel spreadsheets
to compare Sali and Spriggs’s rounded times with their
actual clock-in and clock-out times using a random sampling
of timesheets. Ruiz’s analysis demonstrated that on average
over hundreds of shifts, Corona’s rounded time policy
undercounted Sali’s clock-in and clock-out times by eight
minutes per shift and Spriggs’s times by six minutes per
shift.
Corona objected to the Ruiz declaration, arguing that
(1) the declaration constituted improper lay opinion
12 SALI V. CORONA REGIONAL MED. CTR.
testimony and must be excluded under Federal Rules of
Evidence 701 and 702; (2) Ruiz’s opinions were unreliable;
(3) the declaration lacked foundation and Ruiz lacked
personal knowledge of the information analyzed; and (4) the
data underlying Ruiz’s analysis was unauthenticated
hearsay. In reply, Sali and Spriggs submitted declarations
attesting to the authenticity and accuracy of the data and
conclusions contained in Ruiz’s declaration and the attached
exhibits.
The district court agreed with Corona’s arguments that
the Ruiz declaration was inadmissible and struck the
declaration on that basis. First, the district court concluded
that “Ruiz cannot authenticate the manipulated Excel
Spreadsheets and other data that he relied upon to conduct
his analysis because he does not have personal knowledge to
attest to the fact that the data accurately represents Plaintiffs’
employment records.” Second, the district court concluded
that Ruiz’s declaration offered improper opinion testimony.
Third, the district court found that Ruiz’s “manipulation and
analysis of raw data to reach cumulative conclusions is the
technical or specialized work of an expert witness,” and that
Ruiz lacked the qualifications to conduct this analysis. The
district court further concluded that the declarations
submitted by Sali and Spriggs were new evidence
improperly submitted in reply, and the court declined to
consider the declarations.
2. The district court erred by striking the Ruiz
declaration on the basis of inadmissibility.
A plaintiff seeking class certification bears the burden of
affirmatively demonstrating “through evidentiary proof that
the class meets the prerequisites of Rule 23(a).” In re
Hyundai, 881 F.3d at 690 (citing Comcast Corp., 569 U.S.
at 33). In other words, the plaintiff “must be prepared to
SALI V. CORONA REGIONAL MED. CTR. 13
prove that there are in fact sufficiently numerous parties,
common questions of law or fact, etc.” Wal-Mart Stores, Inc.
v. Dukes, 564 U.S. 338, 350 (2011). Accordingly, “[b]efore
certifying a class, the trial court must conduct a rigorous
analysis to determine whether the party seeking certification
has met the prerequisites of Rule 23.” In re Hyundai,
881 F.3d at 690 (quoting Zinser v. Accufix Research Inst.,
Inc., 253 F.3d 1180, 1186 (9th Cir. 2001)).
For practical reasons, we have never equated a district
court’s “rigorous analysis” at the class certification stage
with conducting a mini-trial. District courts “must determine
by order whether to certify the action as a class action” at
“an early practicable time after a person sues or is sued as a
class representative.” Fed. R. Civ. P. 23(c)(1)(A). The
district court’s class certification order, while important, is
also preliminary: “An order that grants or denies class
certification may be altered or amended before final
judgment.” Fed. R. Civ. P. 23(c)(1)(C); see also Coopers &
Lybrand v. Livesay, 437 U.S. 463, 469 n.11 (1978) (“[A]
district court’s order denying or granting class status is
inherently tentative.”); In re Zurn Pex Plumbing Prod. Liab.
Litig., 644 F.3d 604, 613 (8th Cir. 2011) (“[A] court’s
inquiry on a motion for class certification is ‘tentative,’
‘preliminary,’ and ‘limited.’” (quoting Coopers & Lybrand,
437 U.S. at 469 n.11)).
Applying the formal strictures of trial to such an early
stage of litigation makes little common sense. Because a
class certification decision “is far from a conclusive
judgment on the merits of the case, it is ‘of necessity . . . not
accompanied by the traditional rules and procedure
applicable to civil trials.’” Zurn Pex, 644 F.3d at 613(quoting Eisen v. Carlisle & Jacquelin, 417 U.S. 156, 178
(1974)). Notably, the evidence needed to prove a class’s case
14 SALI V. CORONA REGIONAL MED. CTR.
often lies in a defendant’s possession and may be obtained
only through discovery. Limiting class-certification-stage
proof to admissible evidence risks terminating actions before
a putative class may gather crucial admissible evidence. And
transforming a preliminary stage into an evidentiary
shooting match inhibits an early determination of the best
manner to conduct the action.
It follows that we have found an abuse of discretion
where a “district court limited its analysis of whether” class
plaintiffs satisfied a Rule 23 requirement “to a determination
of whether Plaintiffs’ evidence on that point was
admissible.” Ellis v. Costco Wholesale Corp., 657 F.3d 970,
982 (9th Cir. 2011). Although we have not squarely
addressed the nature of the “evidentiary proof” a plaintiff
must submit in support of class certification, we now hold
that such proof need not be admissible evidence.
Inadmissibility alone is not a proper basis to reject
evidence submitted in support of class certification. 2
2
Numerous district courts in this Circuit have long concluded that
it is appropriate to consider evidence at the class certification stage that
may ultimately be inadmissible. See, e.g., Garter v. Cty. of San Diego,
2017 WL 5177028, at *2 (S.D. Cal. Nov. 7, 2017) (“District [c]ourts may
consider all material evidence submitted by the parties and need not
address the ultimate admissibility of evidence proffered by the parties.”);
In re ConAgra Foods, Inc., 90 F. Supp. 3d 919, 965 n.147 (C.D. Cal.
2015) (“[T]he court can consider inadmissible evidence in deciding
whether it is appropriate to certify a class.”); Arredondo v. Delano Farms
Co., 301 F.R.D. 493, 505 (E.D. Cal. 2014); Keilholtz v. Lennox Hearth
Prods., Inc., 268 F.R.D. 330, 337 n.3 (N.D. Cal. 2010) (“On a motion
for class certification, the Court may consider evidence that may not be
admissible at trial.”); Parkinson v. Hyundai Motor Am., 258 F.R.D. 580,
599 (C.D. Cal. 2008) (“[A] motion for class certification need not be
supported by admissible evidence.”); Bell v. Addus Healthcare, Inc.,
2007 WL 3012507, at *2 (W.D. Wash. Oct. 12, 2007) (“[Rule] 23 does
SALI V. CORONA REGIONAL MED. CTR. 15
“Neither the possibility that a plaintiff will be unable to
prove his allegations, nor the possibility that the later course
of the suit might unforeseeably prove the original decision
to certify the class wrong, is a basis for declining to certify a
class which apparently satisfies” Rule 23. Blackie v.
Barrack, 524 F.2d 891, 901 (9th Cir. 1975). Therefore, in
evaluating a motion for class certification, a district court
need only consider “material sufficient to form a reasonable
judgment on each [Rule 23(a)] requirement.” Id. The court’s
consideration should not be limited to only admissible
evidence.
Other circuits have reached varying conclusions on the
extent to which admissible evidence is required at the class
certification stage. Only the Fifth Circuit has directly held
that admissible evidence is required to support class
certification. See Unger v. Amedisys Inc., 401 F.3d 316, 319
(5th Cir. 2005) (holding that the court’s “findings must be
made based on adequate admissible evidence to justify class
certification”).
The Seventh Circuit, in holding that a district court erred
by giving an expert report “the weight . . . it is due” rather
than ruling on the report’s admissibility under Daubert v.
Merrell Dow Pharms., Inc., 509 U.S. 579, 597 (1993), has
suggested that expert evidence submitted in support of class
certification must be admissible. Messner v. Northshore
Univ. Health Sys., 669 F.3d 802, 812 (7th Cir. 2012)
(quoting In re Evanston Nw. Healthcare Corp. Antitrust
Litig., 268 F.R.D. 56, 57 (N.D. Ill. 2010)). The Third Circuit
has similarly held that a plaintiff may rely on challenged
expert testimony to satisfy the requirements of Rule 23 only
not require admissible evidence in support of a motion for class
certification . . . .”).
16 SALI V. CORONA REGIONAL MED. CTR.
if that expert testimony satisfies the evidentiary standard set
out in Daubert. In re Blood Reagents Antitrust Litig.,
783 F.3d 183, 187 (3d Cir. 2015).
We agree with the Eighth Circuit, however, which has
held that a district court is not limited to considering only
admissible evidence in evaluating whether Rule 23’s
requirements are met. Zurn Pex, 644 F.3d at 612–13.
Contrary to other courts’ conclusory presumptions that Rule
23 proof must be admissible, the Eighth Circuit probed the
differences between Rule 23, summary judgment and trial
that warrant greater evidentiary freedom at the class
certification stage:
Because summary judgment ends litigation
without a trial, the court must review the
evidence in light of what would be admissible
before either the court or jury.
In contrast, a court’s inquiry on a motion
for class certification is “tentative,”
“preliminary,” and “limited.” The court must
determine only if questions of law or fact
common to class members predominate over
any questions affecting only individual
members [and if] a class action is superior to
other available methods for fairly and
efficiently adjudicating the controversy. As
class certification decisions are generally
made before the close of merits discovery, the
court’s analysis is necessarily prospective
and subject to change, and there is bound to
be some evidentiary uncertainty.
SALI V. CORONA REGIONAL MED. CTR. 17
Id. at 613 (internal citations and quotation marks omitted).
We find the Eighth Circuit’s analysis persuasive.
The Supreme Court’s guidance in the analogous field of
standing is also instructive. Like standing, Rule 23 presents
more than a “mere pleading standard.” Wal-Mart, 564 U.S.
at 350. Because the elements of standing “are not mere
pleading requirements but rather an indispensable part of the
plaintiff’s case, each element must be supported in the same
way as any other matter on which the plaintiff bears the
burden of proof, i.e., with the manner and degree of evidence
required at the successive stages of the litigation.” Lujan v.
Defs. of Wildlife, 504 U.S. 555, 561 (1992) (emphasis
added). Hence, the proof required to establish standing
varies at the complaint, summary judgment and trial phases.
Id. Similarly, the “manner and degree of evidence required”
at the preliminary class certification stage is not the same as
“at the successive stages of the litigation”—i.e., at trial.
The present case aptly illustrates why we license greater
evidentiary freedom at the class certification stage: By
relying on formalistic evidentiary objections, the district
court unnecessarily excluded proof that tended to support
class certification. Corona did not dispute the authenticity of
the payroll data underlying Ruiz’s analysis, nor did it
directly dispute the accuracy of his calculations. Instead,
Corona argued that Ruiz’s declaration and spreadsheet were
inadmissible because Ruiz extracted data without explaining
his methods, and the district court agreed. But by relying on
admissibility alone as a basis to strike the Ruiz declaration,
the district court rejected evidence that likely could have
been presented in an admissible form at trial. In fact, when
Sali and Spriggs submitted their own sworn declarations to
authenticate the payroll data and vouch for its accuracy, the
district court again leaned on evidentiary formalism in
18 SALI V. CORONA REGIONAL MED. CTR.
striking those declarations as “new evidence” submitted in
reply. That narrow approach tells us nothing about the
satisfaction of the typicality requirement—“whether other
members have the same or similar injury, whether the action
is based on conduct which is not unique to the named
plaintiffs, and whether other class members have been
injured by the same course of conduct.” Hanon v.
Dataproducts Corp., 976 F.2d 497, 508 (9th Cir. 1992). The
district court should have considered the declarations of
Ruiz, Sali, and Spriggs in determining whether the typicality
prerequisite was satisfied.
When conducting its “rigorous analysis” into whether
the Rule 23(a) requirements are met, the district court need
not dispense with the standards of admissibility entirely. The
court may consider whether the plaintiff’s proof is, or will
likely lead to, admissible evidence. Indeed, in evaluating
challenged expert testimony in support of class certification,
a district court should evaluate admissibility under the
standard set forth in Daubert. Ellis, 657 F.3d at 982. But
admissibility must not be dispositive. Instead, an inquiry into
the evidence’s ultimate admissibility should go to the weight
that evidence is given at the class certification stage. This
approach accords with our prior guidance that a district court
should analyze the “persuasiveness of the evidence
presented” at the Rule 23 stage. Id. The district court abused
its discretion here by declining to consider the Ruiz
declaration solely on the basis of inadmissibility. Because
the district court applied the wrong standard for evaluating
the plaintiffs’ evidence, we do not reach whether the
plaintiffs have in fact demonstrated typicality and leave it to
the district court to resolve in the first instance.
SALI V. CORONA REGIONAL MED. CTR. 19
B. Spriggs is not an adequate class representative, but
Sali remains as an adequate representative plaintiff.
The district court concluded that plaintiff Spriggs is not
an adequate class representative because she is not a member
of any class she seeks to represent. The district court
reasoned that Spriggs cannot represent a class including “all
current and former [RNs] of Defendants . . . who were
classified by Defendants as either full-time or full-time
equivalent employees,” given that she was not classified as a
full-time employee. We agree. A named plaintiff must be a
member of the class she seeks to represent and Spriggs does
not qualify. Gen. Tel. Co. of Sw. v. Falcon, 457 U.S. 147,
156 (1982). Nevertheless, because Plaintiff Sali remains as
an adequate class representative, Spriggs’s inadequacy is not
a basis to deny class certification. See Fed. R. Civ. P. 23(a)
(“One or more members of a class may sue or be sued as
representative parties on behalf of all members . . . .”
(emphasis added)).
C. The district court abused its discretion by concluding
that attorneys from Bisnar Chase cannot serve as
adequate class counsel.
Determining whether representation is adequate requires
the court to consider two questions: “(a) do the named
plaintiffs and their counsel have any conflicts of interest with
other class members and (b) will the named plaintiffs and
their counsel prosecute the action vigorously on behalf of the
class?” In re Mego Fin. Corp. Secs. Litig., 213 F.3d 454, 462
(9th Cir. 2000) (citing Hanlon v. Chrysler Corp., 150 F.3d
111, 120 (9th Cir. 1998)). Adequacy of representation also
depends on the qualifications of counsel. In re N. Dist. Cal.,
Dalkon Shield IUD Prods Liab. Litig., 693 F.2d 847, 855
(9th Cir. 1982). “[T]he named representative’s attorney
[must] be qualified, experienced, and generally capable to
20 SALI V. CORONA REGIONAL MED. CTR.
conduct the litigation . . . .” Jordan v. L.A. Cty., 669 F.2d
1311, 1323 (9th Cir. 1982), vacated on other grounds by Cty.
of L.A. v. Jordan, 459 U.S. 810 (1982). It is undisputed that
there is no conflict here, so the only questions before the
district court were whether proposed class counsel were
qualified and would prosecute the action vigorously.
The district court concluded that proposed class counsel
failed to demonstrate they would adequately serve as class
counsel. The district court noted that “attorneys from Bisnar
Chase failed to attend any of the depositions of Plaintiffs’
putative class witnesses’ (four scheduled depositions), failed
to produce Plaintiffs’ expert, Falkenhagen, for a deposition
despite being ordered to do so by a Magistrate Judge, 3 and,
as detailed in the typicality analysis, failed to submit any
sworn testimony from Plaintiffs in support of the class
certification motion.” The court also noted that Bisnar Chase
submitted nearly identical declarations from twenty-two
putative class members attesting to their personal
experiences with Corona’s employment practices. The
district court found that “Plaintiffs’ counsel’s ‘lax approach’
to personalizing declarations, ensuring that declarants knew
and understood what they were signing, and verifying the
accuracy of the statements is ‘unacceptable’ conduct.”
The district court did not indicate what legal standard it
relied on in evaluating the adequacy of class counsel.
Moreover, the district court discussed only the apparent
errors by counsel with no mention of the evidence in the
record demonstrating class counsel’s substantial and
3
The district court sanctioned Bisnar Chase under Federal Rule of
Civil Procedure 37 for failing to produce Falkenhagen at deposition after
being ordered to do so. We affirmed the sanctions order. See Sali v.
Corona Reg’l Med. Ctr., 884 F.3d 1218, 1225 (9th Cir. 2018).
SALI V. CORONA REGIONAL MED. CTR. 21
competent work on this case. Bisnar Chase attorneys have
incurred thousands of dollars in costs and invested
significant time in this matter, including preparing dozens of
interrogatories and requests for production, taking numerous
depositions, retaining experts, defending the named
plaintiffs’ depositions and the deposition of the plaintiffs’
expert economist, reviewing and analyzing thousands of
documents, interviewing hundreds of class members,
obtaining signed declarations, and preparing and filing a
motion for class certification. Additionally, attorney
Jerusalem Beligan has extensive experience litigating class-
action cases in state and federal court.
At this early stage of the litigation, the district court’s
decision that attorneys from Bisnar Chase could not
adequately serve as class counsel was premature and an
abuse of discretion. However, the district court is not
precluded from considering counsel’s prior sanctions as
evidence of inadequacy if Bisnar Chase attorneys continue
to neglect their duties.
D. The district court erred by denying certification of
the proposed rounding-time and wage-statement
classes on the basis that they failed Rule 23(b)(3)’s
predominance requirement.
Rule 23(b)(3)’s predominance inquiry is “far more
demanding” than Rule 23(a)’s commonality requirement.
Amchem Prods., Inc. v. Windsor, 521 U.S. 591, 624 (1997).
When evaluating predominance, “a court has a ‘duty to take
a close look at whether common questions predominate over
individual ones,’ and ensure that individual questions do not
‘overwhelm questions common to the class.’” In re Hyundai,
881 F.3d at 691 (quoting Comcast Corp., 569 U.S. at 34).
“The main concern of the predominance inquiry under Rule
23(b)(3) is ‘the balance between individual and common
22 SALI V. CORONA REGIONAL MED. CTR.
issues.’” Wang v. Chinese Daily News, Inc., 737 F.3d 538,
545–46 (9th Cir. 2013) (quoting In re Wells Fargo Home
Mortg. Overtime Pay Litig., 571 F.3d 935, 959 (9th Cir.
2009)).
Because the district court concluded that the
predominance requirement was met by the proposed regular-
rate class, and because the parties agree that the waiting-time
class is entirely derivative of other proposed classes, we
review the district court’s predominance analysis with
respect to the rounding-time and wage-statement classes
only.
1. The district court’s determination that individual
questions predominated in the claims of the
proposed rounding-time class was based on an
error of law.
For the purpose of class certification, the parties do not
dispute how Corona’s rounding-time pay system worked.
Corona used an electronic timekeeping system that tracked
when employees clocked in and clocked out and rounded the
time to the nearest quarter hour. Corona paid RNs an hourly
wage calculated based on that rounded time. For example, if
an RN clocked in at 6:53 a.m. or 7:07 a.m., his or her time
was rounded to 7:00 a.m. Kronos recorded both actual clock-
in and rounded times.
Sali and Spriggs allege that Corona’s rounding-time
policy resulted in systematic underpayment of RNs. They
seek certification of a rounding-time class consisting of:
All current and former nurses who work or
worked for Defendants during the Proposed
Class Period who were not paid all wages due
them, including straight time, overtime,
SALI V. CORONA REGIONAL MED. CTR. 23
double time, meal premiums, and rest
premiums due to Defendants’ rounding time
policy.
The district court concluded that individualized issues
predominate in determining Corona’s liability with respect
to the proposed rounding-time class because “whether
[Corona’s] rounding policy resulted in the underpayment of
the proposed class members, and was thus against California
law, depends on individual findings as to whether RNs were
actually working when punched in.” In support of this
conclusion, the district court cited Corona’s explanation that
“time records are not a reliable indicator of the time RNs
actually spent working because RNs frequently clock-in for
work and then perform non-compensable activities, such as
waiting in the break room, getting coffee, or chatting with
their co-workers, until the start of their scheduled shift.”
Thus, the court reasoned, “determining whether [Corona]
underpaid members of the Rounding Time Class would
entail factualized inquiries into whether particular RNs were
actually working during the grace period, and whether the
rounding of time during this period resulted in the
underpayment of hours actually worked—the only conduct
that is prohibited under California law.”
Sali and Spriggs first argue that whether RNs were
“actually working” is a merits question that should not have
been considered at the class certification stage. In the
alternative, Sali and Spriggs argue that the district court’s
analysis was based on an error of California law because
compensable time is not measured by time employees spend
“actually working.” Sali and Spriggs’s argument that the
district court improperly reached a merits question fails
because the district court plainly did not attempt to resolve
whether RNs were actually working on the merits. Instead,
24 SALI V. CORONA REGIONAL MED. CTR.
the court merely concluded that, assuming clock-in times
were on average rounded up to the shift-start time,
individualized questions would predominate in determining
whether RNs were “actually working” during any period
between their clock-in time and the start of their shift. But
the district court clearly misapplied California law in
reaching that conclusion.
A rounding-time policy is permissible under California
law if it “is fair and neutral on its face and ‘it is used in such
a manner that it will not result, over a period of time, in
failure to compensate the employees properly for all the time
they have actually worked.’” See’s Candy Shops, Inc. v.
Super. Ct., 148 Cal. Rptr. 3d 690, 704–05 (Ct. App. 2012)
(quoting 29 C.F.R. § 785.48) (emphasis added). The district
court therefore did not err by concluding that whether RNs
were “actually working” during the time between their
clock-in and shift-start time is a relevant inquiry in this case.
But by suggesting that “non-compensable activities, such as
waiting in the break room, getting coffee, or chatting with
their co-workers” are categorically not time “actually
worked,” the district court incorrectly interpreted “actually
worked” to mean only time spent engaged in work-related
activities.
Under California law, compensable time is “the time
during which an employee is subject to the control of an
employer, and includes all the time the employee is suffered
or permitted to work, whether or not required to do so.”4
4
Both parties agreed in the district court and in this court that this
standard for compensable time applies to Sali and Spriggs under
California law. Corona’s new argument in its petition for rehearing that
a different standard applies is waived. See Boardman v. Estelle, 957 F.2d
1523, 1535 (9th Cir. 1992), as supplemented on denial of reh’g (Mar. 11,
1992).
SALI V. CORONA REGIONAL MED. CTR. 25
Morillion v. Royal Packaging Co., 995 P.2d 139, 141 (Cal.
2000) (quoting Cal. Code Regs., tit. 8, § 11140, subd. 2(G)).
Both parties correctly interpret the term “actually worked”
as used in See’s Candy as referencing this compensable-time
standard. The district court also nominally acknowledged
“employer control” as part of the standard, but in doing so
the court materially misstated the law. The district court
stated that “[t]he punch times are only indicative of time
‘actually worked’ if RNs are working and under the control
of their employer whenever they are punched into work.”
(emphasis added). In fact, under California law, time is
compensable when an employee is working or under the
control of his or her employer. See Morillion, 995 P.2d at
141.
California’s compensable-time standard encompasses
two categories of time. First, time is compensable if an
employee is “under the control” of his or her employer,
whether or not he or she is engaging in work activities, such
as by being required to remain on the employer’s premises
or being restricted from engaging in certain personal
activities. See id. at 145–47 (holding that compulsory travel
time on bus from departure point to work site is
compensable); Aguilar v. Assn. of Retarded Citizens,
285 Cal. Rptr. 515, 519–21 (Ct. App. 1991) (holding that
time employees are required to be on premises is included in
hours worked). Second, time is compensable if an employee
“is suffered or permitted to work, whether or not required to
do so.” Morillion, 995 P.2d at 141 (citing Cal. Code Regs.,
tit. 8, § 11140, subd. 2(G)). This may include “time an
employee is working but is not subject to an employer’s
control,” such as “unauthorized overtime, which the
employer has not requested or required.” Id. at 145
(emphasis added).
26 SALI V. CORONA REGIONAL MED. CTR.
The district court did not abuse its discretion to the extent
it concluded that individualized questions predominate on
whether the RNs fall within the second category, which
amounts to a question of whether they engaged in work
activities even if they were not required to do so. But the
district court erred by assuming that was the only question
to be decided. Under California law, the RNs were also
actually working if they were subject to Corona’s control
even if they were not engaging in work activities—for
example, if they were required to remain on the hospital
premises during that time. See Aguilar, 234 Cal. Rptr. at 520.
The district court failed to consider whether the RNs could
establish on a class-wide basis that they were subject to
Corona’s control during the grace period even if the RNs
were not always engaged in work-related activities during
that time.
This “employer control” question necessarily requires an
employer-focused inquiry into whether Corona had a policy
or practice that restricted RNs in a manner that amounted to
employer control during the period between their clock-in
and clock-out times and their rounded shift-start and shift-
end times. The types of activities RNs generally engaged in
during this period are certainly relevant, but the activities of
any particular RN are not dispositive of whether he or she
was under Corona’s control. Determination of this question
does not depend on individualized factual questions and is
capable of class-wide resolution. Accordingly, the district
court abused its discretion by denying certification of the
rounding-time class on the basis of predominance.
SALI V. CORONA REGIONAL MED. CTR. 27
2. The district court’s determination that individual
questions predominate in the claims of the
proposed wage-statement class was premised on
legal error.
Corona issued wage statements to RNs that listed the
employer as Corona Regional Medical Center, rather than
Corona’s corporate name, UHS-Corona, Inc. Sali and
Spriggs allege this violated California law and seek
certification of a class consisting of “[a]ll current and former
nurses who work or worked for Defendants during the
Proposed Class Period who were not provided pay stubs that
complied with Labor Code § 226.” The district court
concluded that this proposed wage-statement class failed
Rule 23(b)(3)’s predominance requirement because
“demonstrating that each class member was damaged by the
claimed inaccuracy in the wage statement is a critical
individualized issue in determining liability that is not
amenable to common systems of proof.” In doing so, the
district court noted that it agreed with Corona’s argument
that “common issues do not predominate ‘because, in order
to determine liability, each employee must prove for each
paystub received during the relevant time period that he/she
was damaged by the inadequate pay stub.’”
The California Labor Code requires that a wage
statement include, among other things, “the name and
address of the legal entity that is the employer.” Cal. Lab.
Code § 226(a)(8). The Code specifies the amount of
damages for violation of this requirement. 5 The Code further
5
California Labor Code § 226(e)(1) provides:
An employee suffering injury as a result of a
knowing and intentional failure by an employer to
28 SALI V. CORONA REGIONAL MED. CTR.
provides that “[a]n employee is deemed to suffer injury for
purposes of this subdivision if the employer fails to provide
accurate and complete information as required . . . and the
employee cannot promptly determine from the wage
statement alone . . . the name and address of the employer.”
Id. § 226(e)(2)(B)(iii).
The district court erred by concluding that damages for
members of the wage statement class would require an
individualized determination. Because the Code specifies
that a violation of § 226 is a per se injury, there is no
individualized issue of damages. If Corona knowingly and
intentionally failed to provide the name of the legal entity
that was the class members’ employer, each class member
was injured in precisely the same manner by each paystub in
which Corona failed to provide that information. See id.
Moreover, even if there is variation in the amount of each
class members’ damages, this is an insufficient basis by itself
to deny certification. See Yokoyama, 594 F.3d at 1094 (the
“amount of damages is invariably an individual question and
does not defeat class action treatment” (quoting Blackie,
524 F.2d at 905)).
The district court abused its discretion by denying
certification on the basis that individual questions
comply with subdivision (a) is entitled to recover the
greater of all actual damages or fifty dollars ($50) for
the initial pay period in which a violation occurs and
one hundred dollars ($100) per employee for each
violation in a subsequent pay period, not to exceed an
aggregate penalty of four thousand dollars ($4,000),
and is entitled to an award of costs and reasonable
attorney’s fees.
SALI V. CORONA REGIONAL MED. CTR. 29
predominate in the claims of the proposed wage-statement
class.
CONCLUSION
For the reasons discussed, the district court’s denial of
class certification is REVERSED and REMANDED for
further proceedings consistent with this opinion.