California Supreme Court Issues Favorable Decision for Employers in Duran v. U.S. Bank

by Nossaman LLP

The California Supreme Court has issued its long-awaited decision in Duran v. U.S. Bank.  In a significant victory for employers, the Court unanimously agreed to overturn a $15 million judgment in a wage and hour class action based on the trial court’s improper use of statistical sampling.  The opinion is likely to guide how wage and hour class actions and representative actions are tried in state court for the foreseeable future.

In Duran, loan officers sued the U.S. Bank National Association (USB), claiming they had been misclassified as exempt employees under the California Labor Code and thus were owed overtime wages.  After certifying a class of 260 plaintiffs, the trial court devised a plan to determine the extent of USB’s liability to all class members by extrapolating from a random sample.  The trial proceeded in two phases: in the first phase (liability), the court heard testimony about the work habits of 21 plaintiffs.  USB was not permitted to introduce evidence about the work habits of any plaintiff outside the sample.  Nevertheless, based on testimony from the sample group of 21, the trial court found that the entire class of 260 individuals had been misclassified.  In the second phase (damages), the court heard testimony from statisticians and extrapolated the average amount of overtime reported by the sample group of 21 to the entire class, resulting in a verdict of approximately $15 million against USB.

The Supreme Court rejected the statistical model used by the trial court, finding it “profoundly flawed.”  Here are highlights from the opinion:

1. A workable trial plan needs to be developed prior to class certification and should be considered by the court in assessing whether certification is appropriate.  “If statistical evidence will compromise part of the proof on class action claims, the court should consider at the certification phase whether a trial plan has been developed to address its use.”  While predominance of common questions is an important factor, a trial court also has to determine that individual issues can be effectively managed in the ensuing litigation.

2. Employers have a constitutional due process right to litigate their affirmative defenses.  The class action is a procedural device that may not be used to abridge a party’s substantive rights.  “If a defense depends upon questions individual to each class member, the statistical model must be designed to accommodate these case-specific deviations.  If statistical methods are ultimately incompatible with the nature of plaintiffs’ claims or defendant’s defenses, resort to statistical proof may not be appropriate.”  Defendant must have an opportunity to present proof of affirmative defenses.

3. Statistical sampling may be an appropriate means of proving liability or damages in a wage and hour class action, but in Duran, the statistical model was intolerably flawed for the following reasons: (a) the sample size was too small.  The court chose a sample size that was not “sufficiently large to provide reliable information about the larger group,” and instead chose a size that would be convenient and manageable at the expense of the parties’ ability to litigate their case; (b) the sample size was not random.  A sample must be randomly selected for its results to be fairly extrapolated to the entire case.  In Duran, numerous rulings undermined randomness and gave class counsel the ability to influence the cases selected to be tried in the sample group; (c) there was an intolerably large margin of error; plaintiff’s statistician expert calculated a margin of error of 43.3 percent.

4. If a trial proceeds with a statistical model of proof, a defendant must be given a chance to impeach that model or otherwise show that its liability is reduced.

The Supreme Court’s decision in Duran provides an important affirmation of defendants’ due process rights in class litigation, and provides employers with helpful guidance on the limitations of statistical sampling in such matters.


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.

© Nossaman LLP | Attorney Advertising

Written by:

Nossaman LLP

Nossaman LLP on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign up using*

Already signed up? Log in here

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
Privacy Policy (Updated: October 8, 2015):

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

Information Collection and Use by JD Supra

JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.


JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at:

- hide
*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.