In a class action brought under the Fair Labor Standard Act and New York Labor Law, the Second Circuit court of appeals reversed the district court’s denial of class certification and held that the Supreme Court’s 2013 decision in Comcast Corp. v. Behrend does not overrule the established principle that “the fact that damages may have to be ascertained on an individual basis is not sufficient to defeat class certification under Rule 23(b)(3).”
Plaintiff alleged that defendant employer had failed to pay its employees for an extra hour when working ten-hour work days and had also wrongfully subtracted pay for statutorily-required rest breaks which the employees did not actually take. Shortly after pre-certification discovery was completed and after the magistrate issued a report recommending partial certification, the Supreme Court issued its decision in Comcast. In ruling on the parties’ objections to the magistrate’s report the district court held that because the damages claimed by plaintiffs were “highly individualized,” the failure by plaintiffs to proffer a model that could measure damages across the entire putative class automatically mandates a denial of certification under Comcast.
In reversing the decision, the court of appeals ruled that the district judge had misread and misapplied the Comcast decision. According to the court, Comcast held only that there must be a direct nexus between the theory of injury/liability and the model of class damages. In other words, that the model used to measure class-wide damages must actually measure the damages that result from the class’s asserted theory of injury, and not, as was the case in Comcast, also include other, rejected theories of injury. Comcast did not hold, as it was interpreted by the district judge, that a plaintiff who is seeking certification must rely on a class-wide damages model, and did not foreclose certification in cases where damages were to be established on an individualized basis. Rather, individual vs. class-wide damages remains part of the weighing process to be conducted by the courts when analyzing the question of “preponderance,” i.e., whether questions of law or fact common to class members predominate over questions affecting only individual members. To that extent, pre-Comcast jurisprudence remains unaffected by Comcast. The court also stated that several courts of appeals, including the First, Sixth, Ninth and Tenth circuits, have interpreted Comcast consistently with its decision.