Truckers’ $2.35 Million Dollar Class Settlement Vacated Due to District Court’s Cursory Analysis
The U.S Court of Appeals for the Tenth Circuit recently vacated a Utah district court’s finding that a class of truckers satisfied Rule 23 for purposes of settling two wage-hour actions due to a cursory review below, setting aside a multi-million dollar settlement and remanding the case for further proceedings.
In 2016, two putative wage-hour class action cases were filed against trucking company C.R. England, which ultimately ended up in federal court in Utah, challenging the company’s practice of paying drivers only on a piece rate basis—per mile driven, despite spending substantial time engaged in non-driving tasks such as completing paperwork, performing pre- and post-trip inspections, and loading and unloading freight. By late 2016, the company reached a $2,350,000 class settlement to resolve the cases.
The parties submitted a proposed class settlement to the district court. Subsequently, a group of objectors opted out of the settlement, challenging the settlement’s fairness. In December 2016, Senior Judge Dee Benson in the District of Utah overruled the objector’s challenges and granted approval of the class settlement. The objectors appealed that decision to the Tenth Circuit.
A unanimous Tenth Circuit panel tossed out the class certification finding for settlement purposes, stating that the district court’s decision, which provided only a short discussion on the appropriateness of class certification, and was “incompatible with the district court’s obligation for thorough examination.” Citing circuit precedent, the Tenth Circuit emphasized that class actions “may only be certified…after a rigorous analysis, that the prerequisites of [Federal Rules of Civil Procedure] 23(a) [and 23(b)] have been satisfied.” Instead of carefully applying the requirements of Rule 23, “the district court left little analysis by which [the Tenth Circuit could] review its determination of the appropriateness of the proposed class.”
Ultimately, the panel concluded that “the district court fell short of its obligation to analyze, independently and rigorously, the proposed class suitability.” Thus, the Tenth Circuit vacated, affording the district court another opportunity “to more meaningfully explain its bases for class certification.”