Duran v. U.S. Bank National Association case

The Duran decision, preceding the Brinker case by 2 months is yet another milestone in the judicial effort to curtail or eliminate the right to recovery of unpaid overtime wages.  Duran was a class action case; the class plaintiffs followed the mechanism by which most class actions have been tried in this State for the past 50 years.  In brief, the Duran Plaintiffs were 260 employees of the Defendant bank who claimed that they were misclassified as exempt from the right to overtime.  At the trial court level, the judge selected 21 Plaintiffs as representative of the class of 260 plaintiffs and certified the class.  (By certifying the class the court in essence said that common issues of fact outweigh individual issues and that the most expeditious way to proceed was to “certify” a class of people who would be represented by the 21 chosen plaintiffs.  Liability would then be determined by the 21 witnesses as representative of the whole class.  In that fashion, the parties would avoid 260 separate trials).  USB challenged the Court’s certification on two grounds. First, USB argued that taking a statistical sampling to represent all of the people in the class was unfair because USB believed that at least a third of the people in the class were not misclassified; and, even if this were legitimate, the statistical methodology was unsound.  Second, USB argued that on the issue of liability, it had the right to present a defense to each and every claimant on hours worked and whether they were exempt.  In short, USB argued that determining liability in a class action could not be determined by use of a sample group.

The appellate court bought USB’s arguments with every bell and whistle attached.  While it did not have the nerve to say that there could be no wage and hour class action claims, it did hold that a defendant has the right to defend against every single claim in a class action.  In a decision stretching to 38 pages and 80 footnotes (a sure sign that a court thinks it is making new law) the court attacked the concept of trial by representative parties; i.e. the class action as it has been known for half a century.  To illustrate its point, the court noted that even if the trial were to take 520 days, as plaintiffs claimed, that was acceptable to protect the defendant.  Further, according to the court a class of 260 is really too small to worry about things like efficiency (“We also note that the class here is comprised of 260 members…it would not have been implausible …to conduct some type of individualized inquiries as to each plaintiff’s entitlement to damages.”).  This is a flat out re-writing of the law.  The whole point of class actions is judicial economy and protection of the class.  To eliminate the class action process with as many as 260 plaintiffs is unprecedented.

Plaintiffs in this case correctly stated that USB’s position, if upheld, would effectively kill off class actions, in wage and hour cases at least, in California.  That is most certainly true and the court does not really try to deny it.  The most it can say is that the “situation is not quite that dire.”  Ah, but it is that dire.  This decision must either be overturned or legislatively annulled; if not, there is a very small chance of any class action case surviving.  At a minimum, every plaintiff may look forward to an appeal.  It worked for UBS, precedent is now out there, and any like minded conservative judge can simply follow the lead.

This case is a true milestone; a de jure throw over of the legislature’s injunction in Code of Civil Procedure section 382 that cases with common issues may be tried as one if common issues prevail.  This decision is nothing more than an attempt to kill off what the big business lobby considers nuisance number 1.  While we are all in favor of job creation and a friendly business environment, we do not believe that extends to a carte blanche to deprive workers of their statutory rights.  Simply put, an individual case for overtime is, to the employer, not something to lose sleep over.  A class action is altogether different and encourages employers to respect the law because the damages can be very high indeed.  When, as here, the judiciary becomes a cheerleader for big business (banks, no less) the incentive to follow the law drops dramatically.  As a weatherman might say: “we are looking at unpaid overtime increasing in the near future.”