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Court Wrong to Exclude Inadmissible Evidence at Preliminary Class Certification Stage (Wednesday, February 6, 2019)

Corona Regional Medical Center operates a hospital in Southern California that employs hourly-wage RNs. Marlyn Sali and Deborah Spriggs formerly worked for Corona.

In a lawsuit, they asserted that several of Corona’s employment policies and practices violated California law and resulted in underpayment of RN wages. They filed a putative class action in California state court on behalf of all RNs employed by defendants in California at any time.  Sali and Spriggs alleged Corona violated California law by (1) failing to pay all regular hourly wages; (2) failing to pay time-and-a-half for all overtime; (3) failing to pay double time for all hours worked in excess of twelve hours in a day; (4) not providing compliant meal and rest breaks; (5) failing to timely pay all wages due to separated former employees within seventy-two hours of separation; and (6) failing to provide accurate itemized wage statements. Corona removed the case to the United States District Court for the Central District of California.

Sali and Spriggs later moved for class certification of seven different classes. In support of their motion for class certification, Sali and Spriggs submitted a declaration by Javier Ruiz to demonstrate their injuries. Ruiz, a paralegal at law firm Bisnar Chase, reviewed time and payroll records for the named plaintiffs to determine whether they were fully compensated under Corona’s rounding-time pay practice, as well as to address several other questions.

The rounding-time practice itself was not disputed. Corona paid RNs an hourly wage based on the time they punched in and out, rounded to the nearest quarter hour.  Ruiz used Excel spreadsheets to compare Sali’s and Spriggs’ rounded times with their actual clock-in and clock-out times using a random sampling of timesheets. Ruiz’s analysis demonstrated 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.

Corona objected to the Ruiz declaration, arguing that (1) the declaration constituted improper lay opinion testimony and had to be excluded under Federal Rules of Evidence 701 and 702; (2) Ruiz’s opinions were unreliable; (3) the declaration lacked foundation and Ruiz lacked personal knowledge of the information analyzed; and (4) the data underlying Ruiz’s analysis was unauthenticated hearsay. In reply, Sali and Spriggs submitted declarations attesting to the authenticity and accuracy of the data and conclusions contained in Ruiz’s declaration and the attached exhibits.

The district court denied certification of each of the proposed classes on multiple grounds. 

Of particular interest to this article, the district court held that Rule 23(a)’s typicality requirement was not satisfied for any of the proposed classes because Sali and Spriggs failed to submit admissible evidence of their injuries.

In particular, the district court concluded that Sali and Spriggs failed to carry their burden of demonstrating that the injuries allegedly inflicted by Defendants on Plaintiffs were similar to the injuries of the putative class members. Plaintiffs did not offer any admissible evidence of their injuries in their motion for class certification. The district court further noted that the motion did not contain sworn testimony from either of the named plaintiffs.

Sali and Spriggs appealed the district court’s denial of class certification on several grounds, only one of which is discussed here. The Ninth Circuit noted that it reviews a district court’s class certification decision for abuse of discretion, and that an error of law is a per se abuse of discretion.

According to the appeals court, denial of preliminary class certification was error. At the preliminary stage, a district court may not decline to consider evidence solely on the basis that the evidence is inadmissible at trial. 

Before certifying a class, the trial court must conduct a rigorous analysis to determine whether the party seeking certification has met the prerequisites of Rule 23. However, said the appeals court, “[w]e have never equated a district court’s “rigorous analysis” at the class certification stage with conducting a mini-trial.”

The evidence needed to prove a class’s case often lies in the defendant’s possession and may be obtained only through discovery. Limiting class-certification-stage proof to admissible evidence risks terminating actions before a putative class may gather crucial admissible evidence. And transforming a preliminary stage into an evidentiary shooting match inhibits an early determination of the best manner to conduct the action.

Inadmissibility alone is not a proper basis to reject evidence submitted in support of class certification. Neither the possibility that a plaintiff will be unable to prove his allegations, nor the possibility that the later course of the suit might unforeseeably prove the original decision to certify the class wrong, is a basis for declining to certify a class which apparently satisfies Rule 23.  Therefore, in evaluating a motion for class certification, a district court need only consider material sufficient to form a reasonable judgment on each Rule 23(a) requirement. The court’s consideration should not be limited to only admissible evidence.

The Ninth Circuit observed that other circuits have reached varying conclusions on the extent to which admissible evidence is required at the class certification stage. Only the Fifth Circuit has directly held that admissible evidence is required to support class certification. See Unger v. Amedisys, Inc., 401 F.3d 316, 319 (5th Cir. 2005).

The Seventh Circuit, in holding that a district court erred by giving an expert report “the weight ... it is due” rather than ruling on the report’s admissibility under Daubert v. Merrell Dow Pharms., Inc., 509 U.S. 579, 597 (1993), suggested that expert evidence submitted in support of class certification must be admissible. Messner v. Northshore Univ. Health Sys., 669 F.3d 802, 812 (7th Cir. 2012) (quoting In re Evanston Nw. Healthcare Corp. Antitrust Litig., 268 F.R.D. 56, 57 (N.D. Ill. 2010) ). The Third Circuit has held that a plaintiff may rely on challenged expert testimony to satisfy the requirements of Rule 23 if that expert testimony satisfies the evidentiary standard set out in DaubertIn re Blood Reagents Antitrust Litig., 783 F.3d 183, 187 (3d Cir. 2015).

The appeals court agreed with the Eighth Circuit, however, which held that a district court is not limited to considering only admissible evidence in evaluating whether Rule 23’s requirements are met. Zurn Pex Plumbing Prod. Liab. Litig., 644 F.3d 604, at 612-13 (8th Cir. 2011).

When conducting its “rigorous analysis” into whether the Rule 23(a) requirements are met, the district court need not dispense with the standards of admissibility entirely. The court may consider whether the plaintiff’s proof is, or will likely lead to, admissible evidence. Indeed, in evaluating challenged expert testimony in support of class certification, a district court should evaluate admissibility under the standard set forth in Daubert.  But admissibility must not be dispositive. Instead, an inquiry into the evidence’s ultimate admissibility should go to the weight that evidence is given at the class certification stage.

The district court abused its discretion in this case by declining to consider the Ruiz declaration solely on the basis of inadmissibility. At this point, whether inadmissible evidence must be considered in the early stages of class certification depends on the relevant circuit’s case law.

The case is Sali v Corona Regional Medical Center, 909 F.3d 996 (9th Cir. 2018).


Michael R. Lied
Howard & Howard Attorneys PLLC
One Technology Plaza, 211 Fulton Street, Suite 600, Peoria, IL 61602
(309) 999-6311
MLied@howardandhoward.com
 

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