Wage Law

A pro-employer decision in an assistant manager class action case against Wal-Mart is making its way to the 9th Circuit for review. Last May, Judge Dale Fischer, USDC CD Cal., denied a motion for class certification in Sepulveda v. Wal-Mart (C.D. Cal. 2006) 237 F.R.D. 229. As we learned from a declaration submitted by the plaintiff's counsel in Sepulveda, some defendants continue to cite Sepulveda in opposition to motions for class certification in similar cases (perhaps because it was mentioned in Tierno v. Rite Aid Corp. (N.D. Cal. Aug. 31, 2006) 2006 U.S. Dist. LEXIS 71794). However, on August 11, 2006, the Ninth Circuit Court of Appeals granted the Sepulveda plaintiffs permission to appeal the order denying class certification under Federal Rule 23(f). Sepulveda v. Wal-Mart Stores, Inc., U.S.D.C. Case No. CV 04-1003 DSF (EX), Ninth Circuit Court of Appeals Case No. 06-56090.

The standard for such appeals is very high. Interlocutory appeals of orders denying class certification are granted only in the most limited circumstances: (1) where there is a death-knell situation for either the plaintiff or defendant that is independent of the merits of the underlying claims, coupled with a class certification decision by the district court that is questionable; (2) where the certification decision presents an unsettled and fundamental issue of law relating to class actions, important both to the specific litigation and generally, that is likely to evade end-of-the-case review; or (3) where the district court’s decision is manifestly erroneous. Chamberlan v. Ford Motor Co. (9th Cir. 2005) 402 F.3d 952, 959.

Curiously enough, the Sepulveda plaintiffs argued that the District Court’s decision denying class certification was “manifestly erroneous,”  and on June 26, 2006, before the Ninth Circuit even granted plaintiffs’ petition for permission to appeal, the District Court agreed that the petition was likely to be granted and stayed the action. The Court found that the stay was appropriate because the class certification decision involves an unsettled, fundamental issue of law. The Court then found: “Thus there is at least some likelihood that the Ninth Circuit may grant the Petition, and ultimately find in Plaintiffs’ favor.”

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. This should be pointed out in any brief responding to an employer's opposition which cites Sepulveda v. Wal-Mart (C.D. Cal. 2006) 237 F.R.D. 229.