Third Circuit Class Action Litigation | Winter 2019/2020
Third Circuit reverses class certification because plaintiffs failed to meet their burden on commonality and predominance.
Ferreras was a wage and hour case in which plaintiffs claimed American Airlines violated the New Jersey Wage and Hour Law by failing to pay its employees for all time worked, due to the manner in which the timekeeping system was programmed. The Third Circuit reversed class certification, finding “three problems: first, the district court effectively certified the class conditionally; second, it applied a pleading and initial evidence standard; and third, it failed to resolve conflicts in the evidence.
As to the first error, the panel directed that “reliance on, and application of, principles of conditional certification [under FLSA] in the Rule 23 context cannot be permitted.” On the second error, the panel observed that the district court essentially required plaintiffs only to make a “threshold showing” that the Rule 23 elements were met, reiterating that the Third Circuit “requires a showing that each of the Rule 23 requirements has been met by a preponderance of the evidence at the time of class certification.”
Finally, the panel faulted the district court’s finding that factual differences among the class could be “addressed during discovery,” concluding that “[t]he rigorous analysis demanded by Rule 23 requires a court to resolve such disputes relevant to class certification, before being satisfied that each of the Rule’s requirements has been met.” Rather than remanding the case, the panel reversed the grant of certification because discovery was complete, and “based on our review of the record, it is clear that commonality and predominance cannot be met.”
Ferreras is a reminder that a rigorous analysis must be conducted at the class certification stage, and that plaintiffs must satisfy the Rule 23 elements by a preponderance of the evidence.