Plaintiffs Must Offer 'Significant Proof' Of A Common Policy Or Practice To Satisfy Commonality Under Rule 23 Post-Dukes

On January 28, 2013, Hon. George King of the United States District Court for the Central District of California issued an order in Pedroza v. PetSmart, Inc. denying class certification of exempt misclassification claims brought by a former PetSmart store manager. The opinion is interesting in that it contains a detailed examination of certification requirements pursuant to Wal-Mart Stores, Inc. v. Dukes, 131 S.Ct. 2541 (2011). The analysis Judge King employed would lead to denial of certification in many exemption cases. However, Judge King separately ruled that the case could proceed as an uncertified PAGA collective action, leaving open the possibility that PAGA penalties could somehow be determined notwithstanding the Court's finding that common issues predominated on the underlying exemption issue.

The Plaintiff's Underlying Allegations

Plaintiff, a former store manager, alleged that PetSmart uniformly misclassified its store managers as exempt employees resulting in unpaid overtime, meal and rest period violations, inaccurate wage statements and waiting time penalties. The plaintiff asserted that the store managers were improperly classified as exempt because they allegedly did not "customarily and regularly exercise discretion and independent judgment" and because they did not "primarily engage in duties which meet the test of exemption" under California law.

The District Court's Analysis in Denying Certification

The district court began its analysis for class certification by examining whether the plaintiff had established commonality under Rule 23(a)(2) based on the standards announced in Dukes v. Wal-Mart. Quoting the Supreme Court in Dukes, the district court stated "what matters to class certification is not the raising of common questionseven in drovesbut, rather the capacity of a classwide proceeding to generate common answers apt to drive the resolution of the litigation. Dissimilarities within the proposed class are what have the potential to impede the generation of common answers." Under Dukes, the district court stated that it "must conduct a 'rigorous analysis' to determine if [p]laintiff has offered 'significant proof' of a common policy or practice 'that could affect the class as a whole.'" The court then conducted such an analysis as to the two elements of the exemption at issuewhether the managers spent the majority of time on exempt duties and whether store managers customarily and regularly exercised discretion and...