Rule 23(b) or Not to Be: Wang v. Chinese News the Ninth Circuit’s Latest Decision to Reevaluate Certification after Wal-Mart

The Ninth Circuit’s recent decision in Wang v. Chinese Daily News is the latest to affirm that Wal-Mart v. Dukes is controlling in wage-and-hour class action cases.

The Ninth Circuit previously affirmed a $2.5 million damages award in favor of plaintiffs, who brought claims against their employer Chinese Daily News under the FLSA and California law on the basis that they were wrongfully denied overtime and meal and rest breaks. The district court had certified the class under Rule 23(b)(2) or, in the alternative, Rule 23(b)(3). After the Ninth Circuit’s opinion, the defendant petitioned the Supreme Court for certiorari. The Supreme Court granted the petition and vacated and remanded to the Ninth Circuit for reconsideration in light of Wal-Mart.

On remand, the Ninth Circuit’s three-judge panel first vacated and remanded the district court’s commonality finding under Rule 23(a)(2), concluding that there were potentially significant differences among class members that required further consideration in light of Wal-Mart. The Ninth Circuit also reversed certification of the class under Rule 23(b)(2) on the grounds that Wal-Mart made clear that individualized monetary claims could not be certified under Rule 23(b)(2), but instead belong under Rule 23(b)(3). The court further remanded for reconsideration as to whether common questions predominated over questions affecting only individual class members under Rule 23(b)(3) in light of Wal-Mart and the California Supreme Court’s decision in Brinker Rest. Corp. v. Superior Court. In Brinker, the California Supreme Court held that an employer is obligated to relieve employees of all duties during their meal breaks but need not ensure that employees actually take them.

The Ninth Circuit’s decision likely makes it more challenging for future wage-and-hour plaintiffs to satisfy the predominance standards under Rule 23, potentially making it more appealing for plaintiffs to bring collective actions under the FLSA.


DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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