Ricardo Bermudez Vaquero v. Ashley Furniture Industries , 824 F.3d 1150 ( 2016 )

FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
RICARDO BERMUDEZ No. 13-56606
VAQUERO, on behalf of
himself and all others D.C. No.
similarly situated, 2:12-cv-08590-PA-MAN
Plaintiff-Appellee,
v. OPINION
ASHLEY FURNITURE
INDUSTRIES, INC., A
Wisconsin Corporation;
STONELEDGE FURNITURE,
LLC, a Wisconsin Limited
Liability Corporation,
Defendants-Appellants.
Appeal from the United States District Court
for the Central District of California
Percy Anderson, District Judge, Presiding
Submitted May 24, 2016*
Pasadena, California
Filed June 8, 2016
*
The panel unanimously concludes that this case is suitable for decision
without oral argument. Fed. R. App. P. 34(a)(2).
2 VAQUERO V. ASHLEY FURNITURE
Before: Susan P. Graber and Ronald M. Gould, Circuit
Judges, and Wiley Y. Daniel,** Senior District Judge.
Opinion by Judge Graber
SUMMARY***
Class Certification
The panel affirmed the district court’s order granting class
certification under Fed. R. Civ. P. 23 to a plaintiff
representing a class of former and current sales associates of
Stoneledge Furniture, LLC, alleging violations of California’s
minimum wage and hour laws.
The panel held that plaintiff established commonality, as
required by Fed. R. Civ. P. 23(a), and the district court
permissibly concluded that plaintiff pleaded a common injury
capable of class-wide resolution. The panel also held that
plaintiff established the predominance of class claims, as
required by Fed. R. Civ. P. 23(b)(3); and the district court
permissibly ruled that individual claims did not predominate
in this case. Finally, the panel held that class certification did
not alter the parties’ substantive rights, and the district court
did not violate the Rules Enabling Act in certifying the class.
**
The Honorable Wiley Y. Daniel, Senior United States District Judge
for the District of Colorado, 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.
VAQUERO V. ASHLEY FURNITURE 3
COUNSEL
J. Kevin Lilly and Scott M. Lidman, Littler Mendelson, P.C.,
Los Angeles, California, for Defendants-Appellants.
Michael D. Singer and Jeff Geraci, Cohelan Khoury &
Singer, San Diego, California; Kevin T. Barnes and Gregg
Lander, Law Offices of Kevin T. Barnes, Los Angeles,
California; Raphael Katri, Law Offices of Raphael A. Katri,
Beverly Hills, California; Michael Rubin, Altshuler Berzon
LLP, San Francisco, California; for Plaintiff-Appellee.
OPINION
GRABER, Circuit Judge:
Defendant Stoneledge Furniture, LLC, pays its sales
associates only on commission but, it is alleged, requires
sales associates to do many tasks that are unrelated to sales.
Plaintiff Ricardo Bermudez Vaquero, a former sales
associate, asserts that this policy violates California’s
minimum wage and hour laws. He sued Stoneledge Furniture
and its parent company, Defendant Ashley Furniture
Industries, Inc., on his own behalf and also moved to
represent 605 former and current sales associates as a class.
The district court granted class certification under Federal
Rule of Civil Procedure 23. We affirm that decision in this
interlocutory appeal.
Stoneledge Furniture is a wholly owned subsidiary of
Ashley Furniture Industries. At the time the district court
granted class certification, Stoneledge operated 14 retail
furniture stores in California and employed about 600 sales
4 VAQUERO V. ASHLEY FURNITURE
associates, who primarily sold furniture and accessories to
Stoneledge’s customers. Stoneledge paid its sales associates
on commission.
Vaquero worked as a sales associate at Stoneledge from
2010 to 2012. He alleges that Stoneledge requires sales
associates to perform many tasks unrelated to sales, for
example, cleaning the store, attending meetings, and carrying
furniture. According to Vaquero, Stoneledge does not pay its
sales associates for such work, beyond what they earn in
commissions, and this policy violates California wage and
hour laws.
Vaquero initially filed this action in state court in
California and sought class certification. Under the Class
Action Fairness Act of 2005, 28 U.S.C. § 1332(d)(2),
Defendants removed the case to federal court, and Vaquero
moved to be named a class representative. He asked to
represent four subclasses, three of which were derivative of
the first: (1) a class of all California sales associates
employed from August 24, 2008, to the present who were
paid less than minimum wage for non-sales time worked;
(2) sales associates who were not provided with itemized
wage statements; (3) former sales associates who were not
paid all wages due at separation; and (4) sales associates who
were subject to unlawful business practices. Vaquero
introduced pay plans and policies, along with declarations
from putative class members, to serve as representative
evidence on liability. If successful on the merits, Vaquero
proposed to resolve the damages phase of the litigation
through use of a survey, sampling evidence, or a special
master.
VAQUERO V. ASHLEY FURNITURE 5
The district court denied class certification for the third
subclass (what it called the “waiting class”), but granted it for
the other subclasses. Defendants moved to appeal the district
court’s decision to certify the remaining subclasses pursuant
to Federal Rule of Civil Procedure 23(f). We granted
permission for the appeal. For purposes of the appeal, both
parties have treated the remaining subclasses as a single
entity, which they describe, in general terms, the way the first
subclass is defined. The sole issue before us on appeal is
whether the district court properly granted class certification.
We review for abuse of discretion a district court’s class
certification ruling. Parra v. Bashas’, Inc., 536 F.3d 975, 977
(9th Cir. 2008). In reviewing any particular underlying Rule
23 determination, the standard is also abuse of discretion.
Yokoyama v. Midland Nat’l Life Ins. Co., 594 F.3d 1087,
1091 (9th Cir. 2010).
The district court granted class certification under Rule
23(b)(3). To justify certification under that provision, a
plaintiff must prove that the class meets all prerequisites
under Rule 23(a)1 and that the class meets two requirements
under Rule 23(b)(3).2 Defendants argue that Vaquero has
1
Rule 23(a) provides: “One or more members of a class may sue or be
sued as representative parties on behalf of all members only if: (1) the
class is so numerous that joinder of all members is impracticable; (2) there
are questions of law or fact common to the class; (3) the claims or
defenses of the representative parties are typical of the claims or defenses
of the class; and (4) the representative parties will fairly and adequately
protect the interests of the class.”
2
Rule 23(b)(3) provides: “A class action may be maintained if Rule
23(a) is satisfied and if . . . the court finds that the questions of law or fact
common to class members predominate over any questions affecting only
6 VAQUERO V. ASHLEY FURNITURE
failed to prove commonality, as required by Rule 23(a), and
predominance of class claims, as required by Rule 23(b)(3).
Defendants also assert that class certification has altered the
parties’ substantive rights in violation of the Rules Enabling
Act, 28 U.S.C. § 2072(b).
A. Commonality
Rule 23(a)(2) provides that a plaintiff may sue as a
representative member of a class only if “there are questions
of law or fact common to the class.” The requirement of
“commonality” means that the class members’ claims “must
depend upon a common contention” and that the “common
contention, moreover, must be of such a nature that it is
capable of classwide resolution—which means that
determination of its truth or falsity will resolve an issue that
is central to the validity of each one of the claims in one
stroke.” Wal-Mart Stores, Inc. v. Dukes, 564 U.S. 338, 350
(2011).
The Supreme Court’s most thorough interpretation of the
commonality requirement is Dukes, and Defendants rely on
that case to argue that commonality does not exist here. In
Dukes, the Supreme Court denied certification of a class of
more than a million members—female employees of the
corporation—who claimed that the retailer’s delegation of
promotion decisions to individual managers, in combination
with its corporate culture, denied them equal pay and
promotional opportunities in violation of Title VII. Id. at
367. The Court held that the plaintiffs “wish to sue about
individual members, and that a class action is superior to other available
methods for fairly and efficiently adjudicating the controversy.”
(Emphases added.)
VAQUERO V. ASHLEY FURNITURE 7
literally millions of employment decisions at once. Without
some glue holding the alleged reasons for all those decisions
together, it will be impossible to say that examination of all
the class members’ claims for relief will produce a common
answer to the crucial question why was I disfavored.” Id. at
352. In that case, subjective decisions by many managers in
different locations could not be considered a common injury
across a class of more than one million plaintiffs. Id.
Therefore, the plaintiffs failed to make the prerequisite
showing of commonality required by Rule 23(a). Id.
Here, by contrast, the common injury is far less extensive,
far less abstract, far less dispersed, and far more objective and
focused. California law proscribes compensation through
commission for work that is not “directly involved in
selling.” Ramirez v. Yosemite Water Co., 978 P.2d 2, 10 (Cal.
1999) (internal quotation marks omitted). California law also
prohibits “averaging” to meet minimum wage requirements.
Armenta v. Osmose, Inc., 37 Cal. Rptr. 3d 460, 468 (Ct. App.
2005). Stoneledge paid sales associates only through
commissions. If the company required sales associates to do
work not “directly involved in selling” and failed to
compensate the sales associates for such work, then it
violated California’s minimum wage laws for all such
employees. Thus, the complaint contains a “common
contention” that easily “is capable of classwide resolution”:
it is one type of injury allegedly inflicted by one actor in
violation of one legal norm against a relatively small number
of class members who all generally performed the same work.
Dukes, 564 U.S. at 350. The district court permissibly
concluded that Vaquero had pleaded a common injury
capable of class-wide resolution.
8 VAQUERO V. ASHLEY FURNITURE
B. Predominance
Under Rule 23(b)(3), a class may be certified only if
“questions of law or fact common to class members
predominate over any questions affecting only individual
members.” The Supreme Court has noted that, “[i]f anything,
Rule 23(b)(3)’s predominance criterion is even more
demanding than Rule 23(a).” Comcast Corp. v. Behrend,
133 S. Ct. 1426, 1432 (2013).
Defendants argue that, when damages calculations cannot
be performed on a class-wide basis, predominance has not
been reached. Defendants maintain that the Supreme Court’s
holding in Comcast controls. There, in an antitrust case, the
Court reviewed the certification of a class of consumers. Id.
The plaintiffs offered a complex damages model to show how
the customers were subject to anti-competitive prices. Id. at
1432–33. The Court reversed the class certification because
the model “failed to measure damages resulting from the
particular antitrust injury on which petitioners’ liability in this
action is premised.” Id. at 1433.
We have interpreted Comcast to mean that “plaintiffs
must be able to show that their damages stemmed from the
defendant’s actions that created the legal liability.” Pulaski
& Middleman, LLC v. Google, Inc., 802 F.3d 979, 987–88
(9th Cir. 2015) (quoting Leyva v. Medline Indus., Inc.,
716 F.3d 510, 514 (9th Cir. 2013)), petition for cert. filed,
84 U.S.L.W. 3500 (U.S. Mar. 1, 2016) (No. 15-1101). If the
plaintiffs cannot prove that damages resulted from the
defendant’s conduct, then the plaintiffs cannot establish
predominance. Id.
VAQUERO V. ASHLEY FURNITURE 9
No such problem exists in this case. Vaquero alleges that
Defendants’ consciously chosen compensation policy
deprived the class members of earnings in violation of
California’s minimum wage laws. In a wage and hour case,
unlike in an antitrust class action, the employer-defendant’s
actions necessarily caused the class members’ injury.
Defendants either paid or did not pay their sales associates for
work performed. No other factor could have contributed to
the alleged injury. Therefore, even if the measure of damages
proposed here is imperfect, it cannot be disputed that the
damages (if any are proved) stemmed from Defendants’
actions. The district court did not abuse its discretion in
holding that different damages calculations do not defeat
predominance in this circumstance.
Our precedent is well settled on this point. In Yokoyama,
we held that “damage calculations alone cannot defeat
certification.” 594 F.3d at 1094. That is, the “amount of
damages is invariably an individual question and does not
defeat class action treatment.” Id. (quoting Blackie v.
Barrack, 524 F.2d 891, 905 (9th Cir. 1975)). We have
repeatedly confirmed the Yokoyama holding that the need for
individualized findings as to the amount of damages does not
defeat class certification. See Leyva, 716 F.3d at 514
(holding that “the presence of individualized damages cannot,
by itself, defeat class certification under Rule 23(b)(3)”);
Jimenez v. Allstate Ins. Co., 765 F.3d 1161, 1167 (9th Cir.
2014) (holding that Leyva was the “controlling case,” and that
individual damages calculations did not defeat class
certification), cert. denied, 135 S. Ct. 2835 (2015). Indeed,
“Yokoyama remains the law of this court, even after
Comcast.” Pulaski & Middleman, 802 F.3d at 988.
10 VAQUERO V. ASHLEY FURNITURE
The Supreme Court has not disturbed our precedent. In
Tyson Foods, Inc. v. Bouaphakeo, 136 S. Ct. 1036 (2016), the
district court had certified a class of employees who claimed
that their employer had violated wage and hour laws by
failing to pay overtime compensation for time spent donning
and doffing protective gear. The employer had failed to keep
records of such time, so employees relied on “representative
evidence,” including employees’ testimony, video recordings,
and an expert’s statistical analysis, to establish both liability
and damages on a class-wide basis. Id. at 1043. The
employer challenged the certification of the class, in that case
as here, contending that individual inquiries predominated
over common questions. Id. at 1046. The use of expert
statisticians and statistical surveys, it claimed, could not
defeat the need for individualized liability determinations for
each class member. Id. The employer sought a “broad rule
against the use in class actions of what the parties call
representative evidence.” Id. The Court declined to establish
such a rule. Id. It held that a “representative or statistical
sample, like all evidence, is a means to establish or defend
against liability. Its permissibility turns not on the form a
proceeding takes—be it a class or individual action—but on
the degree to which the evidence is reliable in proving or
disproving the elements of the relevant cause of action.” Id.
The Court held that class certification was appropriate even
though class members might have to prove liability and
damages individually. Id.
Under Tyson Foods and our precedent, therefore, the rule
is clear: the need for individual damages calculations does
not, alone, defeat class certification. Accordingly, we hold
that the district court permissibly ruled that individual claims
did not predominate in this case.
VAQUERO V. ASHLEY FURNITURE 11
C. Rules Enabling Act
The Rules Enabling Act provides that a procedural rule
“shall not abridge, enlarge or modify any substantive right.”
28 U.S.C. § 2072(b). This mandate applies to class actions
brought under Rule 23. Ortiz v. Fibreboard Corp., 527 U.S.
815, 845 (1999). Defendants claim that the nature of the
damages calculations in this case violates their rights under
the Rules Enabling Act. They argue that the use of
representative evidence would inevitably change the
substantive rights of the parties by preventing Defendants
from individually cross-examining and challenging each class
member’s claims. Again, Defendants rely heavily on the
Supreme Court’s opinion in Dukes. In Dukes, the Court
rejected the plaintiffs’ trial plan to determine individual
entitlement to backpay through statistical sampling. 564 U.S.
at 367. The Court held that the “class cannot be certified on
the premise that Wal-Mart will not be entitled to litigate its
statutory defenses to individual claims.” Id.
Defendants’ reliance on Dukes, in this regard, is
misplaced. As the Court made clear in Tyson Foods:
“[Dukes] does not stand for the broad proposition that a
representative sample is an impermissible means of
establishing classwide liability.” Tyson Foods, 136 S. Ct. at
1048. “In a case where representative evidence is relevant in
proving a plaintiff’s individual claim, that evidence cannot be
deemed improper merely because the claim is brought on
behalf of a class. To so hold would ignore the Rules
Enabling Act’s pellucid instruction that use of the class
device cannot ‘abridge any substantive right.’” Id. at 1046
(ellipsis omitted).
12 VAQUERO V. ASHLEY FURNITURE
In Tyson Foods, the Court made clear that the defendants
could still challenge the sufficiency of the evidence,
notwithstanding class certification: “When, as here, the
concern about the proposed class is not that it exhibits some
fatal dissimilarity but, rather, a fatal similarity—an alleged
failure of proof as to an element of the plaintiffs’ cause of
action—courts should engage that question as a matter of
summary judgment, not class certification.” Id. at 1047
(internal quotation marks and brackets omitted).
We also note that Defendants’ concerns are hypothetical
at this stage of the litigation. The district court has discretion
to shape the proceedings. With a class of only about 600
members, the court could choose an option such as the use of
individual claim forms or the appointment of a special
master, which plainly would allow Defendants to raise any
defenses they may have to individual claims.
In this case, as in Tyson Foods, the district court’s grant
of class certification has not expanded Vaquero’s substantive
rights or those of the class. Defendants may challenge the
viability of Vaquero’s evidence at a later stage of the
proceedings. Accordingly, the district court did not violate
the Rules Enabling Act or abuse its discretion in certifying
the class.
AFFIRMED.