Sali v. Corona Reg'l Med. Ctr.
| Decision Date | 01 November 2018 |
| Docket Number | No. 15-56460,15-56460 |
| Citation | 907 F.3d 1185 (Mem) |
| Parties | Marlyn SALI and Deborah Spriggs, on Behalf of Themselves, all Others Similarly Situated and the General Public, Plaintiffs-Appellants, v. CORONA REGIONAL MEDICAL CENTER; UHS of Delaware Inc., Defendants-Appellees. |
| Court | U.S. Court of Appeals — Ninth Circuit |
ORDER
The panel has voted to deny the petition for panel rehearing.
The full court was advised of the petition for rehearing en banc. A judge requested a vote on whether to rehear the matter en banc. The matter failed to receive a majority of votes of the nonrecused active judges in favor of en banc consideration. Fed. R. App. P. 35.
The petition for panel rehearing and the petition for rehearing en banc are DENIED .
I regret that we decided not to rehear this case en banc because we could have corrected our own errors. Rather than do that, we have established a rule that undermines the purpose of the class certification proceeding. We have been instructed by the Court that facts necessary to establish the elements of a class cannot simply be those that meet a pleading standard.1 But the panel has reduced the requirements of class certification below even a pleading standard. It has accepted the undisputedly inadmissible opinion of plaintiffs’ paralegal —not even that of an attorney who is subject to certain pleading standards2 —that the plaintiffs have damages typical of the class sought to be certified.
This doesn’t pass the straight-face test.
It is no surprise the panel’s holding that expert opinion testimony need not be admissible at the class certification stage is contrary to our own precedent, but also contrary to decisions of four other circuits and clear Supreme Court guidance.
This case arises out of a wage and hour class action under California law. Sali v. Corona Reg’l Med. Ctr. , 889 F.3d 623 (9th Cir. 2018). The two named plaintiffs, Marlyn Sali and Deborah Spriggs ("Plaintiffs"), are Registered Nurses ("RNs") who were formerly employed by Corona Regional Medical Center ("Corona"). Id. at 627. Plaintiffs brought a putative class action alleging that, during their employment by Corona, they and other nurses were subject to a number of policies and practices that violated California’s wage and hour laws. Id. Based on each of their claims, Plaintiffs moved to certify seven classes. Id. at 628.
The district court denied the motion to certify as to all of the proposed sub-classes, holding, in relevant part, that Sali and Spriggs had failed to satisfy Rule 23(a)’s typicality requirement because they failed to submit admissible evidence that they had suffered any of the damages suffered by the putative class. Id. In reaching this decision, the district court refused to consider the only piece of evidence offered to establish Plaintiffs’ injuries—the declaration of Javier Ruiz, a paralegal employed by the law firm representing Plaintiffs—because it contained inadmissible evidence. Id. at 630. The panel explains that the paralegal took a "random sampling" of Plaintiffs’ timesheets to determine how Corona’s policy of "rounding" clock-in and clock-out times to the nearest quarter hour had affected each plaintiff’s pay individually. Id. Based on this "random sampling," Ruiz concluded that "on average over hundreds of shifts, Corona’s rounded time policy undercounted Sali’s clock-in and clock-out times by eight minutes per shift and Spriggs’s times by six minutes per shift." Id.
The district court found the Ruiz declaration was inadmissible for three reasons. First, Ruiz lacked personal knowledge of the data in the spreadsheets, and thus could not authenticate the data. Id. at 630-31. Second, Ruiz offered opinion testimony, improper unless he qualified as an expert witness. Id. at 631. Third, Ruiz lacked the qualifications necessary for the "cumulative conclusions" he reached via "manipulation and analysis of raw data" to be admissible under Federal Rule of Evidence 702.3 Id . Because the Ruiz declaration was inadmissible, the district court did not consider it. Left with no other evidence from which to conclude Plaintiffs had been injured (much less that their injuries were typical of class injuries), the district court found that Plaintiffs had failed to satisfy Rule 23(a)’s typicality requirement.4 Plaintiffs challenged this ruling on appeal.
The panel held that the district court’s typicality determination was premised on an error of law. Id. at 630. Specifically, the panel concluded that, because the class certification order is "preliminary" and can be entered at an early stage of the litigation, but changed later, a motion for class certification need not be supported by admissible evidence.5 Id. at 631. Noting that the Supreme Court has previously stated that class certification proceedings are "not accompanied by the traditional rules and procedure applicable to civil trials," the panel held that the district court abused its discretion by limiting its Rule 23 analysis to admissible evidence. Id. (citing In re Zurn Pex Plumbing Prod. Liab. Litig. , 644 F.3d 604, 613 (8th Cir. 2011) (quoting Eisen v. Carlisle & Jacquelin , 417 U.S. 156, 178, 94 S.Ct. 2140, 40 L.Ed.2d 732 (1974) ) ).6 "Inadmissibility alone," said the panel, "is not a proper basis to reject evidence submitted in support of class certification." Id. at 632. On this basis, the panel reversed the district court’s denial of class certification and remanded for the district court to reconsider the typicality issue without excluding the Ruiz declaration.
The class certification stage cannot be disdained as the panel has done here. We have held a district court’s determination on class certification often "sounds the death knell of the litigation," whether by dismissal, if class certification is denied, or by settlement, if class certification is granted. Chamberlan v. Ford Motor Co. , 402 F.3d 952, 957 (9th Cir. 2005) (quoting Blair v. Equifax Check Servs., Inc. , 181 F.3d 832, 834 (7th Cir. 1999) ). It is for this reason that federal courts in the past—including the U.S. Supreme Court—have treated the class certification stage not as a "preliminary" step in the litigation, but as an oftentimes dispositive step demanding a more stringent evidentiary standard.
Besides the fact that the panel’s decision is contrary to our own precedent,7 I take issue with the panel’s decision for two important reasons. First, it puts our court on the wrong side of a lopsided circuit split. And second, it defies clear Supreme Court guidance on this issue.
The panel’s opinion also puts us on the short side of a lopsided circuit split—the Second, Third, Fifth, and Seventh Circuits all require expert testimony to be admissible to be considered at the class certification stage. See In re Blood Reagents Antitrust Litig. , 783 F.3d 183, 187 (3d Cir. 2015) (); In re U.S. Foodservice Inc. Pricing Litig. , 729 F.3d 108, 129 (2d Cir. 2013) () (emphasis added); Am. Honda Motor Co. v. Allen , 600 F.3d 813, 817 (7th Cir. 2010) (); Unger v. Amedisys Inc. , 401 F.3d 316, 319 (5th Cir. 2005) (). Two other circuits have so held in unpublished rulings. See In re Carpenter Co. , No. 14-0302, 2014 WL 12809636, at *3 (6th Cir. Sept. 29, 2014) (); Sher v. Raytheon Co. , 419 F. App'x 887, 890 (11th Cir. 2011) ().
The panel acknowledges its conflict with the Third, Fifth, and Seventh Circuits, but emphasizes its agreement with the Eighth—the only circuit to come out the other way. Sali , 889 F.3d at 632 (citing Zurn Pex , 644 F.3d at 612–13 ). But even that case does not fully support the panel’s decision. In Zurn Pex , homeowners brought a class action against a plumbing company, claiming that the systems installed by the company were defective. 644 F.3d at 608. At the class certification stage, the plaintiffs proffered evidence from two experts regarding the failure of the plumbing systems. Id. at 609. The defendant attempted to exclude the testimony under Daubert , and the plaintiffs argued Daubert did not apply. Id. at 610.
The district court conducted a "focused" Daubert analysis, declining to rule on whether the testimony was admissible, but also taking the Daubert factors into consideration in determining whether the expert testimony supported class certification. Id. at 610–11. The district court found that the expert testimony supported class certification and certified the class. Id. The Eighth Circuit affirmed, holding that the district court’s "focused" Daubert analysis was correct and stating that expert testimony need not be admissible at the class certification stage, although the Daubert factors should be considered. Id. at 613.
Zurn Pex is consistent with the panel’s position that inadmissible expert...
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