In a short, unpublished opinion, the Ninth Circuit has reversed a significant portion of District Court order denying class certification in a wage and hour class action against Wal-Mart. In Sepulveda v. Wal-Mart Stores, Inc., a group of assistant managers asserting various wage and hour claims (overtime and meal and rest period pay) brought a putative class action against against the retailer. The District Court denied the plaintiffs' motion for class certification in Sepulveda v. Wal-Mart Stores, Inc. (C.D.Cal. 2006) 237 F.R.D. 229, because the claims for monetary relief in the class action complaint were not incidental (failing the requirements for certification under Rule 23(b)(2)) and the duties of assistant managers were not susceptible to collective proof (failing the requirements for certification under Rule 23(b)(3)). On appeal, the Ninth Circuit held:
Plaintiffs, current and former Assistant Managers of Defendant, Wal-Mart Stores, Inc., appeal the district court’s order denying their motion for class certification. We have jurisdiction under 28 U.S.C. § 1292(e) and Federal Rule of Civil Procedure 23(f).
The district court misapplied Ninth Circuit precedent when, relying on its conclusion that Plaintiffs’ claims for monetary relief were non-incidental, it denied class certification under Federal Rule of Civil Procedure 23(b)(2). See Molski v. Gleich, 318 F.3d 937, 949–50 (9th Cir. 2003) (refusing to adopt the incidental damages approach set forth by the Fifth Circuit in Allison v. Citgo Petroleum Corp., 151 F.3d 402 (5th Cir. 1998)). The district court must focus on the intent of the Plaintiffs in bringing suit. Id. at 950. We therefore hold that the district court abused its discretion in denying class certification. See Sw. Voter Registration Educ. Project v. Shelley, 344 F.3d 914, 918 (9th Cir. 2003) (en banc) (per curiam). On remand the district court shall reconsider class certification under Federal Rule of Civil Procedure 23(b)(2), and, in the alternative, also reconsider using Rule 23(c)(4) to certify specific issues under the Rule 23(b)(2) standard. See Society for Individual Rights, Inc. v. Hampton, 528 F.2d 905, 906 (9th Cir. 1975). In reconsidering these issues, the district court may find the California Supreme Court’s decision in Gentry v. Superior Court, 42 Cal. 4th 443, 457–59, 462, 464–65 (2007), instructive.
The district court did not abuse its discretion in denying class certification under Federal Rule of Civil Procedure 23(b)(3), and we therefore affirm that portion of its order. Each party shall bear its own costs on appeal.
We previously discussed the case in a January 2007 post that can be found at this link, where we observed:
The appeal is noteworthy because, unlike several other pending appeals in similar cases, this is a discretionary, interlocutory appeal, rather than a standard, post-judgment appeal. The standard for allowing such an appeal is extremely high, and the fact that the Ninth Circuit allowed the appeal suggests that the District Court’s decision to deny certification will be reversed.
The result was very close to what we expected.