Barnett v. Wal-Mart Stores, Inc., No. 55491-3-I (Wash. App. 7/3/2006), 55491-3-I

Decision Date03 July 2006
Docket NumberNo. 55491-3-I,55491-3-I
PartiesDEBRA BARNETT, GEORGIE HARTWIG, and BELLA BLAUBERGS, on their own behalf and on behalf of all other similar situated, Respondents, v. WAL-MART STORES, INC., a Delaware corporation, d/b/a WAL-MART, d/b/a SAM'S CLUB, and d/b/a SUPERCENTER, Appellant.
CourtCourt of Appeals of Washington

Appeal from Superior Court of King County. Docket No: 01-2-24553-8. Judgment or order under review. Date filed: 11/29/2004. Judge signing: Hon. Terry Lukens.

Counsel for Petitioner(s), Michael John Killeen, Davis Wright Tremaine LLP, 1501 4th Ave Ste 2600, Seattle, WA 98101-1688.

Roger Ashley Leishman, Davis Wright Tremaine, 1501 4th Ave Ste 2600, Seattle, WA 98101-1688.

Michael Reiss, Attorney at Law, 1501 4th Ave Ste 2600, Seattle, WA 98101-1664.

Counsel for Respondent(s), Christopher Ian Brain, Tousley Brain & Stephens PLLC, 1700 7th Ave Ste 2200, Seattle, WA 98101-1332.

James M. Finberg, Liff Cabraser, Heimann Bernstein LLP, Embacadero Center West, 275 Battery Street 30th Floor, San Francisco, CA 94111-339.

Karin Kramer, Liff Cabraser Heimann Bernstein LLP, Embacadero Center West, 275 Battery Street 30th Floor, San Francisco, CA 94111-339.

Toby James Marshall, Tousley Brain Stephens PLLC, 1700 7th Ave Ste 2200, Seattle, WA 98101-1332.

Beth Ellen Terrell, Tousley Brain Stephens PLLC, 1700 7th Ave Ste 2200, Seattle, WA 98101-1332.

COX, J.

The sole issue before us in this review is the propriety of the trial court's certification of a class in this action for wages and other relief by former and current Washington employees of Wal-Mart. Specifically, we must decide whether the trial court's revised definition of a class originally proposed by plaintiffs satisfies the requirements of CR 23. Because the trial court did not abuse its discretion by redefining the class as it did, we affirm.

This case arises from allegations by putative members of a class of potentially 53,000 former and current Wal-Mart employees who have worked in Wal-Mart's 35 stores in Washington since September 10, 1997. The essence of their claims is that Wal-Mart routinely and systematically denies its employees proper rest and meal breaks, requires employees to work off the clock to complete their tasks, and manipulates employee time records to avoid paying overtime.

Debra Barnett, Georgie Hartwig, and Bella Blaubergs (`Barnett') commenced this action in September 2001. After two years of extensive discovery, they moved to certify this case as a class action. The trial court issued its memorandum opinion certifying a class for `Labor Claims' and `Consumer Claims' that it incorporated into its Order Granting Class Certification in Part, entered on November 29, 2004. The court rejected Barnett's proposed class definition, but revised it in respects that we describe later in this opinion.

Wal-Mart sought discretionary review of the order certifying the class. We granted discretionary review in part and denied it in part. Thereafter, a panel of judges considered additional briefing of the parties and heard oral argument.

CLASS DEFINITION

Wal-Mart maintains that the trial court abused its discretion in certifying the class, as redefined by the court, because the class definition does not comport with the requirements of CR 23(b)(3). More specifically, Wal-Mart argues that the court's revised definition requires the court to delve into the merits of individual claims, creates an improper `fail-safe' class, and is not administratively feasible. None of these arguments is persuasive.

`A prerequisite to a Rule 23 action is the actual existence of a `class."1 Class definition is critical because it "identifies the persons (1) entitled to relief, (2) bound by a final judgment, and (3) entitled to notice in a Rule 23(b)(3) action."2 The defined class must be sufficiently identifiable without being overly broad.3 A class definition that is defined objectively and with sufficient precision makes it possible for a court to determine that all the CR 23 requirements for class certification have been met.4

A proposed class definition must not depend on subjective criteria or the merits of the case or require extensive factual inquiry to determine who is a class member.5 Because courts may not determine the merits of the case at the certification stage, a class definition is inadequate if it requires the court to make a determination on the merits in order to identify individual class members.6

Our courts generally favor a liberal interpretation of CR 23 because the rule `avoids multiplicity of litigation, `saves members of the class the cost and trouble of filing individual suits{,} and . . . also frees the defendant from the harassment of identical future litigation."7 One moving for class certification bears the burden of demonstrating that they meet the requirements of that rule.8 Courts may consider both the pleadings and examine the parties' evidence to the extent necessary to determine whether the requirements of CR 23 have been met.9 When a court considers the pleadings at a relatively early stage of the litigation, it may generally assume that because the class actions are a specialized proceeding available in limited circumstances, the trial court must conduct a "'rigorous analysis'" of the CR 23 requirements to determine whether a class action is appropriate in a particular case.10

We review a trial court's class certification decision for an abuse of discretion.11 We will uphold the court's decision if the record indicates that the court considered the CR 23 criteria and if the decision is based on tenable grounds and is not manifestly unreasonable.12 We resolve close cases in favor of allowing or maintaining the class.13

Individualized Merits Determination

Wal-Mart first argues that the trial court's class definition does not meet the requirements of CR 23(b)(3) because it requires the court to make individual determinations on the merits in order to identify members of the class. We disagree.

The Order Granting Class Certification in Part entered on November 29, 2004 redefines the plaintiffs' proposed class as follows:

All current and former hourly paid employees of Wal-Mart Stores, Inc. (including Wal-Mart Stores, Supercenters and Sam's Clubs, but excluding distribution centers) in the state of Washington who worked off the clock without compensation and/or worked through any part of a rest or meal break from September 10, 1997 through the date judgment is entered in this action and who have not held a salaried management position with Wal-Mart at any time during that period.

. . .

The order further provides that:

The liability phase will determine whether Defendant {Wal-Mart} had actual or constructive knowledge that its hourly employees were not being paid for all hours worked, either because that work was performed off the clock, because employees were not permitted to take all or part of their meal and rest breaks, or because time records were deleted or otherwise altered. . . . .14

Wal-Mart argues that the order defines a class where `the only way to identify Wal-Mart associates who are actual class members would be to {first} resolve the {} merits of liability for each person's individual claim.'15 Wal-Mart claims that the court must resolve `the paramount liability issue presented by this case: whether each individual Wal-Mart associate was required or permitted to work without receiving compensation that he or she was entitled to, or was required to work through breaks.'16

We disagree.

We begin our application of the relevant law to this case by identifying what the class must prove. As the trial court correctly noted in its order, the employees prove their statutory claims for wages by showing the employer failed to pay them for all the time they were `employed.' Under the relevant wage and hour statutes, `to employ' includes `to permit' to work.17 And an employer `permits' its employee to work when it has either actual or constructive knowledge of the allegedly uncompensated work.18 Thus, the question is whether members of the class worked off the clock, missed meal and/or rest breaks, or were locked in the building at the end of the shift and whether Wal-Mart had actual or constructive knowledge of uncompensated work.

First, although Wal-Mart argues that the class definition demands a resolution of whether Wal-Mart `required or permitted' its employees to work without compensation, no such language appears in the order. We would be inclined to agree that such language, if included in the order, would suggest a resolution of liability. That is because such language would, in effect, suggest knowledge of Wal-Mart that its employees were working without statutorily required compensation. But no such language is in this order.

Rather, the plain words of the order define the class differently:

`employees of Wal-Mart stores who worked off the clock without compensation and/or who worked through any part of a rest or meal break.' The order further separates the liability issue by framing it as `whether {Wal-Mart} had actual or constructive knowledge that its hourly employees' were not being properly compensated under the wage statutes.

We see no other way in which the court could have adequately defined the relevant class without offending the rule that it could not resolve the merits of individual claims. The definition is proper.

Second, the relevant cases support our conclusion that the definition is proper. Barnett cites, among other cases, Dunn v. Midwest Buslines, Inc.,19 a racial discrimination case in which the court denied class certification for a number of reasons, among them the fact that the class definition required a finding on the merits in order to identify class members.20 The definition included African American employment applicants `who have been denied employment by defendant due to race.' The court held the definition improper...

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