Due Process Rights of Employers and Class Action Defendants Upheld

by Allen Matkins

The highly anticipated decision of the California Supreme Court in Duran v. U.S. Bank is a big win for employers and class action defendants. On Thursday, the Supreme Court in Duran affirmed the appellate court's decision in its entirety. Duran is the first case that squarely addresses the use of statistical sampling for establishing liability in class actions. The use of this statistical evidence—by which the results of a sample of putative class members are extrapolated and applied as true to all putative class members—was previously accepted only in the context of establishing damages. (See, e.g., Bell v. Farmers Ins. Exchange (2004) 115 Cal. App.4th 715.)


Duran was a wage-and-hour class action lawsuit involving claims of misclassification and nonpayment of overtime, brought by employee loan officers. After certifying a class of 260 plaintiffs, the trial court devised a trial plan to determine the extent of the defendant's liability, by extrapolating from a random sample of approximately 20 class members (plus the two named plaintiffs). The court ultimately heard testimony from 21 plaintiffs about their work habits. The defendant was not permitted to introduce evidence about the work habits of any plaintiff outside this sample. Based on testimony from this small sample group, the trial court found that the entire class had been misclassified. The court again used statistical sampling to assess damages, and assessed damages at a total of $15 million, averaging over $57,000 per class member.

Statistical Sampling to Establish Liability is Improper

The Supreme Court affirmed the appellate court's decision, finding that the trial court's use of statistical sampling to establish liability was improper, as it precluded the defendant employer from presenting relevant evidence and violated its due process rights. The Supreme Court also found that the trial court's chosen statistical methodology was flawed because it arbitrarily sampled a small group of employees without regard to whether the sample was statistically significant or representative of the class as a whole. The Supreme Court further noted that even the statistical sampling used to calculate damages was improper, as the methodology had an unacceptably high margin of error at 43 percent. The Supreme Court not only reversed the trial court's findings on liability and damages, but also decertified the class.

Still No Case Law to Support This Trial Plan

There are several important takeaways from the Duran opinion.

  1. Most importantly, the court found that the statistical evidence used to establish liability was improper, meaning there is still no case law or other legal authority affirming the use of this evidence at the liability stage of a case.
  2. The Supreme Court also noted that if an appropriate statistical sampling method were ever developed, defendants must still be permitted to introduce evidence in their defense, even if such evidence involves individual issues or defenses. Refusal to allow this evidence, as the trial court in Duran did, would constitute a violation of due process rights.
  3. The Duran decision also means that no class action plaintiffs to date have been able to devise a trial plan that is both workable and preserves a defendant's due process rights. The class action process is a procedural mechanism that was devised to make lawsuits with numerous plaintiffs (class members) more manageable. As the Supreme Court suggested, however, what makes a case more manageable in the beginning of a case does not necessarily translate well at trial.

As this problem for class action plaintiffs becomes more noticeable and well-known, we hope that more victories will be had by class action defendants. Although the court left open the possibility that statistical evidence could be used in the future to establish liability, the court also expressed skepticism on how that could be accomplished.

Next Steps for Employers

Employers should be aware that the Duran decision confirms prior cases which indicate that unless an employer has a uniform policy or consistent practice that violates wage/hour laws, class certification will not be granted. Employers are advised to work with counsel to ensure that their policies and practices are current and do not inadvertently violate any employment laws.

Lastly, employers can expect that expert opinions will become more important earlier in a case. Although this could increase the burden on employers in gathering data and conducting discovery, it will likely also increase the burden for plaintiffs' counsel. This too may help employers gain leverage earlier in the case, leading to more victories for employers.

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.

© Allen Matkins | Attorney Advertising

Written by:

Allen Matkins

Allen Matkins 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 info@jdsupra.com. 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: info@jdsupra.com.

- 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.