The opinion of the court was delivered by: Jennifer L. Thurston United States Magistrate Judge
FINDINGS AND RECOMMENDATIONS DENYING PLAINTIFFS' MOTION FOR CLASS CERTIFICATION (Doc. 99)
Plaintiffs Candace Casida and Lizette Galvan ("Plaintiffs") seek class certification pursuant to Rule 23 of the Federal Rules of Civil Procedure in its suit against Defendant Sears Holdings Corporation, Sears, Roebuck & Co. ("Defendants"). (Docs. 131, 128). Plaintiffs are former Assistant Managers of Sears who were employed in Sears' full-line retail stores. (Doc. 131 at 6). Plaintiffs contend that Sears misclassified its Assistant Managers as exempt employees, thereby depriving them of overtime. (Doc. 131). Plaintiffs seek to represent a class of former and current Assistant Managers for Sears. (Doc. 131 at 19). For their part, Defendants dispute that Plaintiffs have demonstrated the Fed. R. Civ. 23 requirements but focus their attack on their claim that individual questions predominate such that a class action is not the superior method of adjudicating Plaintiffs' claims.
The Court has read and considered the pleadings and supporting documents, and heard oral arguments by counsel on August 3, 2012. For the reasons set forth below, the Court recommends Plaintiffs' motion for class certification be DENIED.
Plaintiff Casida filed her initial Complaint in the Northern District of Illinois on March 28, 2011.
(Doc. 1). Plaintiff filed the Complaint as a collective and class action in which she alleged violations 4 of the Fair Labor Standards Act (FLSA), 29 U.S.C. § 201, et seq., and the California Labor Code. Id.
After Plaintiff revised her Complaint and Sears answered, the Illinois Court ordered Plaintiff's California claims transferred to the Eastern District of California. (Doc. 59). 7
Plaintiff filed a Second Amended Complaint ("SAC") in this Court on December 5, 2011.
(Doc. 77). The SAC removed Plaintiff's FLSA claim and added a claim for civil penalties under the 9 California Private Attorney General Act ("PAGA"), Labor Code Section 2698, et. seq. After Defendants answered, Plaintiffs filed notice that Plaintiff Casida's case was related to a case filed by Plaintiff Galvan in the San Diego County Superior Court, then removed to the United States District Court for the Southern District of California. (Doc. 95). The notice explained that the matters were related as follows:
[B]oth cases are brought against Sears, seek recovery on behalf of a similar class and involve similar allegations and factual issues. Both cases seek to represent a class of persons who are or were employed by Sears in Assistant Store Managers positions in California, and assert that Plaintiff and putative class members were misclassified as exempt employees under California law, and assert that Sears misclassified employees in Assistant Store Manager positions as exempt from overtime, failed to timely pay all compensation owed at termination, and failed to provide itemized wage statements. (Doc. 95). Plaintiff Galvan's case was later transferred from the Southern District Court to this Court. (Doc. 109).
Plaintiffs filed a motion for class certification on May 11, 2012. (Doc. 99). On June 6, 2012, Defendants filed a motion to dismiss the Galvan case, or in the alternative, to consolidate it with the Casida case. (Doc. 107). Before the motion was heard, the parties stipulated to consolidate the cases. (Doc. 109). On June 28, 2012, the Court ordered the cases consolidated.
Plaintiffs filed their consolidated class action complaint on June 29, 2012. (Doc. 130). Aside from references to Plaintiff "Galvan," the consolidated complaint is identical to Casida's second amended complaint. (Doc. 130). Defendants filed their Answer on July 18, 2012.
In support of the motion for class certification, Plaintiffs submitted 12 declarations of proposed class members. (Docs. 101, 103). On June 22, 2012, Defendants filed their Opposition to the motion (Docs. 110-114), to which Plaintiffs filed a reply on July 20, 2012 (Docs. 135-139). Defendants 2 submitted 48 declarations of its employees and/or experts, in support of its Opposition. (Doc. 113). 3
II.REQUEST FOR JUDICIAL NOTICE
Defendants request that the Court take judicial notice of a California Division of Labor Standards Enforcement's ("DLSE") July 6, 1993 Opinion Letter. (Doc. 112). A court may take judicial notice of a fact "not subject to reasonable dispute in that it is either (1) generally known within the territorial jurisdiction of the trial court or (2) capable of accurate and 8 ready determination by resort to sources whose accuracy cannot reasonably be questioned." 9
Fed.R.Evid. 201. The content of records and reports of administrative bodies are proper subjects for judicial notice under Rule 201(d). (See Gonzalez v. Millard Mall Services, Inc. (S.D. Cal. 2012) 281 F.R.D. 455, 459 (citing Interstate Natural Gas Co. v. S. Cal. Gas Co., 209 F.2d 380, 385 (9th Cir.1953). Since the parties have not disputed the taking of judicial notice of these documents, and the documents are subject to judicial notice, the Court GRANTS Defendants' and Plaintiffs' requests for judicial notice.
Plaintiffs and Defendants object to evidence submitted by their opponents. (Doc. 111; Doc. 138). Defendants request also the Court strike the evidence to which they have objected. (Doc. 111). However, in conjunction with a Rule 23 class certification motion, the Court may consider all material evidence submitted by the parties to determine Rule 23 requirements are satisfied. Blackie v. Barrack, 524 F.2d 891, 901 (9th Cir. 1975). Accordingly, declarations may be used to support or oppose a motion where presented in writing, subscribed as true under penalty of perjury, and dated. 28 U.S.C. § 1746. "On a motion for class certification, the court may consider evidence that may not be admissible at trial." Mazza v. Am. Honda Motor Co., 254 F.R.D. 610 (C.D. Cal. 2008) (citing Eisen v. Carlisle & Jacquelin, 417 U.S. 156, 178 (1974) (describing a court's determination of class certification as based on "tentative findings, made in the absence of established safeguards" and describing a class certification as "of necessity . . . not accompanied by the traditional rules and procedures applicable to civil trials"); see also Keilholtz v. Lennox Hearth Prods., 268 F.R.D. 330, 337 (N.D. Cal. 2010) ("On a motion for class certification, the Court may consider evidence that may not be admissible at trial"); Williams v. Veolia Transp. Servs., 2009 U.S. Dist. LEXIS 123600 at *7 2 (C.D. Cal. Mar. 20, 2009) ("Unlike evidence presented in a summary judgment motion, evidence 3 presented at the class certification stage need not be admissible at trial."). Regardless, the Court has 4 considered only the evidence deemed admissible in its analysis.*fn1 *fn2
A. DEFENDANTS' OBJECTIONS TO PLAINTIFFS' EVIDENCE
Defendants assert the following "common objections" to Plaintiffs' declarations of proposed 7 class members and to the declaration of Candace Casida: 1) lack of foundation/speculation; 2) vague 8 and ambiguous; 3) relevance; and 4) "best evidence." Defendants' objections cite to an entire 9 paragraph (Doc. 111 at 6-11) or quote multiple sentences of a paragraph (highlighting the objectionable sentence(s) in bold type) and then list two to three objections to the highlighted portions. (Doc. 111 at 13-19, 25, 27, 29-30, 32). For example, one column in Defendants' table quotes seven sentences from the Baldwin declaration, highlights three of those sentences as objectionable, and lists three objections in the adjacent column without any indication about which objections apply to which highlighted sentences. (Doc. 111 at 13). In doing so, Defendants expect the Court to speculate about which of the listed objections correspond to each of the highlighted sentences. "It is not the Court's role to divine Defendant's arguments." Dukes v. Wal-Mart, Inc. (N.D. Cal. 2004) 222 F.R.D. 189, 198-99 (summarily denying defendants' objections as unduly vague and denying defendants' motion to strike where defendants highlighted multiple portions of each declaration without specifying which objection applied to which statement and where it was not obvious why many objections had been asserted).
Defendants incorrectly assume that the Court is required to sift through the multiple sentences and determine which objections Defendants might have intended to apply to which sentence. (Doc. 111 at 13-19, 25, 27, 29-30, 32). Even where Defendants only list a single sentence, it is unclear to which phrase or portion of the sentence they object or why. Because Defendants failed to specify 2 which objections correspond with which objectionable portion(s) of the sentence(s), Defendants have 3 waived the objections to Plaintiffs' evidence that were presented in the manner described above. Even 4 if the Court excluded some portion of the declarations submitted by Plaintiffs, the Court is satisfied it 5 would have no bearing on the outcome of Plaintiffs' motion for class certification. Dukes, 222 F.R.D. 6 at 198-99. Accordingly, Defendants' common objections to Plaintiffs' proposed class member 7 declarations on the grounds that they lack of foundation, call for speculation, are vague and 8 ambiguous, irrelevant, or in violation of F.R.E. 1002 (best evidence) summarily denied and any 9 corresponding motion to strike is denied.
Defendants seek to strike the declaration of Norma Gonzalez because she failed to appear for her noticed deposition on June 5, 2012. (Doc. 111 at 12). The Court reporter's Declaration re Failure of Norma Gonzalez to appear for her deposition indicates that counsel for Plaintiffs agreed to accept service of the deposition subpoena on Ms. Gonzalez' behalf, that service was accomplished, but Ms. Gonzalez failed to appear. (Doc. 114-16 at 3-4). Plaintiffs acknowledge that Ms. Gonzalez failed to appear, but assert her declaration should not be stricken because it was signed under penalty of perjury and her non-appearance does not affect the facts set forth in her declaration. (Doc. 139 at 44-45). "Striking a witness' direct testimony is an ‗extreme sanction,' one that should only be employed by a court after a party has demonstrated that [it] has taken adequate steps to protect [its] own rights." United States v. Seifert, 648 F.2d 557, 561 (9th Cir.1980) (denying request to strike testimony where moving party did not bring a motion to compel after declarant failed to appear for deposition).
Here, Defendants did not take steps to protect their position after Gonzalez failed to appear for her June deposition. Rather than bring a motion to compel, Defendants chose instead to raise the issue at this juncture. "It is not the province of this Court to ensure that parties protect their own rights." (See S.E.C. v. Private Equity Management Group, Inc. (C.D. Cal., July 2, 2009) 2009 WL 2019788 order clarified, (C.D. Cal., Aug. 10, 2009) 2009 WL 2488044 and modified sub nom. SEC v. Private Equity Management Group, LLC (C.D. Cal., May 7, 2010) 2010 WL 1929869. Defendants should have taken adequate steps to protect their rights by seeking the Court's assistance and intervention and their failure to do so now precludes them from excluding Ms. Gonzalez' declaration. (Id.) Thus, the 2 motion is DENIED. 3
ii. Contradicting Testimony
Defendants assert nearly 100 objections to portions of each of the declarations submitted by Plaintiffs on the basis that the cited statements contradict the declarants' deposition testimony. (Doc. 6 111 at 11-12, 16-35) (citing Foster v. Arcata Associates, 772 F.2d 1453, 1462 (9th Cir.1985), cert. 7 denied, 475 U.S. 1048 (1986) and Radobenko v. Automated Equipment Corp., 520 F.2d 540, 543-44 8 (9th Cir.1975)). The cases cited by Defendant set forth the general rule in the Ninth Circuit that a 9 party cannot create an issue of fact by an affidavit contradicting his prior deposition testimony. (See also Kennedy v. Allied Mut. Ins. Co. (9th Cir. 1991) 952 F.2d 262, 266 (emphasis added). The concern in those cases was that a plaintiff who had been thoroughly deposed could later sign a declaration contrary to his/her testimony in order to create a material fact and avoid summary judgment.
Here, Defendants took each of the depositions after the declarations had already been signed.*fn3
Thus, the situation is reversed: the deposition testimony allegedly contradicts prior declarations. Defendants have not cited any binding authority for the proposition that declarations must be stricken when contradicted-in whole or in part-by later depositions, and the Court has located none. Contradictions in the testimony affect the weight given to the evidence, rather than its admissibility, and at the class certification stage the Court is unable to weigh the evidence. See Marlo v. UPS, Inc., 639 F.3d 942, 949 (9th Cir.2011) (characterizing the district court's statement that it "could not ‗weigh the evidence' when evaluating the requirements of Rule 23" as "a correct statement of law").
Consequently, Defendant's objections on the basis of contradictions in testimony are overruled. 3
B. PLAINTIFFS' OBJECTIONS TO DEFENDANTS' EVIDENCE
Plaintiffs object generically to the declarations of Sears' managers on the grounds that they 6 lack foundation, personal knowledge, are based on hearsay and are irrelevant. (Doc. 138 at 3-4). With 7 the exception of five citations to specific testimony, Plaintiffs list the names of all declarants to whom 8 they intend their objections to apply. (See Doc. 138 at 3 and fn. 1). As the Court explained above, 9
Plaintiffs' failure to identify a specific objection waives such objections.
With regard to the specific objections cited by Plaintiffs, the Court finds as follows:
1) Declarations of Funai and King (Doc. 113-4 at 56, ¶4 and Doc. 113-5 at 41, ¶4)Plaintiffs object to each of these declarations on the basis that Funai admits she did not directly supervise Baldwin and King admits that she did not directly supervise Gillespie. (Doc. 138 at 3). Defendants assert that the declarations of Funai and King are sufficient because they merely testify to whether the experiences set forth in the declarations of Baldwin or Gillespie, reflect the experiences of other ASMs in the managers' respective stores. Because declarants Funai and King are only testifying as to what they perceive to occur in their stores, they need not personally know declarants Baldwin or Gillespie to establish foundation for their testimony. As such, Plaintiffs objections are overruled.
a. Declarations of Lawson , Adams, and Cooper (Doc. 113-5 at 56, ¶7, 5 and Doc. 113-2 and Doc. 113).
Plaintiffs object to the declarations of Lawson and Adams because the managers testify about how the ASM spent his/her time, but either do not indicate how often they observed the ASM or only indicate that they spent a limited amount of time in the store. Plaintiffs object to Cooper's declaration because he characterizes the ASM as weak, but states he relied on the ASM's hiring/firing recommendations. The Court finds that each of these objections goes to the weight of the evidence and not the admissibility of the statements and on this basis, overrules Plaintiffs' objections.
Plaintiffs ask the Court to "reject" the declaration of Robert Crandall ("Crandall") for two primary reasons: 1) there is no evidence that the sample used in Crandall's report is representative of 2 the current class of California ASMs and 2) the report lacks foundation because Crandall does not 3 explain how he determined certain tasks to be "managerial" versus "non-managerial." (Doc. 138 at 4-4 6). Defendants assert that Crandall's report need not be limited to California ASMs to be relevant and 5 that any such variation would go to the weight of the evidence, not its admissibility. (Doc. at 141 at 6 6).
Plaintiffs' argument that the Crandall report needs to limit itself to California ASMs to 8 be relevant flies in the face of their overall argument that Defendants' utilize numerous standardized 9 corporate procedures to make the duties of an ASM similar in every store and every department within a store. The policies Plaintiffs rely upon to support their motion for class certification and the Rule 30(b) depositions cited by Plaintiffs demonstrate that Defendants' policies are established nationally and set expectations for Defendants' employees nationwide, not just in California. As a result, the Court will not exclude Crandall's report as irrelevant.
Additionally, Crandall's report sets forth his methodology, the controls used in the study and his conclusions (Doc. 113-3 at Exh. 11). Crandall explains that the observers utilized a task list of approximately 583 unique tasks that were pre-loaded on the work study software devices used to capture the data for the study. (Doc. 113-3 at 25-27). These tasks were then divided into 14 broad categories: computer/office work, associate related, merchandise related, monitor/travel, manager related, phone/walkie, customer related, cashiering, safety, security, other ASM tasks, interview/hiring, cleaning vendor related, and other. (Doc. 113-3 at 10). Crandall's report notes that many of the categories contained both managerial and non-managerial tasks. (Id.) From the data, Crandall sets forth the percentage of time the sample ASMs spent working on tasks in the various categories (as demonstrated through graphs at Doc. 113-3 at 51-68). Crandall also calculates the percentage of time the ASMs spent on managerial verses non-managerial tasks (as demonstrated in graphs at Doc. 113-3 at 44-49 and 69-74).
Plaintiffs have not provided expert testimony to call into question or undermine the reliability of Crandall's study. Because bare assertions of unreliability and bias are insufficient, there is no basis for this Court to call into question the Crandall's study as it relates to the methods used to gather the data and the calculations demonstrating how the sample ASMs allocated their time among the 14 2 categories. Akaosugi v. Benihana Nat. Corp. (N.D. Cal., Mar. 30, 2012) 2012 WL 1094425. 3
However, the Court finds that Crandall's failure to explain which tasks he characterized as "managerial" translates into a failure to explain his conclusions regarding the percentage of time spent 5 on managerial versus non-managerial tasks. The Court's gatekeeper function requires it to conduct "a 6 preliminary assessment of whether the reasoning or methodology underlying the testimony is 7 scientifically valid and of whether that reasoning or methodology properly can be applied to the facts 8 in issue." Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579, 592-93 (1993). Thus, the Court will sustain the objection to the report.
iii. Happy Camper Declarations
Plaintiffs ask this Court to reject the declarations from Defendants' current employees because such declarations are inherently suspect. (Doc. 138 at 6-7). The Court notes that the ASM declarations submitted by Defendants are signed under penalty of perjury and each declarant admits awareness that the Plaintiffs are current and former employees of Sears and that the attorney assisting with the declaration represents Sears, and reports that the statement is made voluntarily. Plaintiffs have not provided any evidence to the contrary. The Court finds that this current factual situation is distinguishable from the cases cited by Plaintiffs. In both Mevorah v. Wells Fargo Home Mortg., Inc., a div. of Wells Fargo Bank (N.D. Cal., Nov. 17, 2005) 2005 WL 4813532 and In re Wells Fargo Home Mortg. Overtime Pay Litigation (N.D. Cal., Oct. 18, 2007) 2007 WL 3045995 rev'd and remanded, (9th Cir. 2009) 571 F.3d 953, the declarations suggested that defendants improperly mislead the declarants about the purpose of the litigation. There is no evidence in this case that such actions have occurred here. As such, the Court will not exclude these declarations from its consideration of this matter and overrules the objection.
IV.LEGAL STANDARDS FOR CLASS ...