Class Action Claims

A class action is a procedural device of the courts permitting one or more persons to act as a plaintiff(s) representing the interests of a larger group of persons with similar claims. It has been stated that a class action, “is a procedural device that was adopted with the goals of economies of time, effort and expense, uniformity of decisions, the promotion of efficiency and fairness in handling large numbers of similar claims.” In re West Virginia Rezulin Litigiation, 585 S.E. 2d. 52, 62 (5th Cir. 2004). There are many different types of claims that can be well-suited for a class action lawsuit. Examples include “mass tort” claims where recovery is sought for defective products such as pharmaceutical drugs, medical devices, motor vehicles and other consumer products that have injured consumers. Class actions can also be brought for consumer and securities fraud, and unlawful employment practices. Unlawful employment practices can take the form, among others, of misclassifying employees as exempt from being eligible for overtime pay or employers misclassifying its worker as independent contractors instead of employees to illegally avoid paying overtime, employer required payroll taxes and providing employee fringe benefits.

The core issues facing a court when deciding if a class action is the appropriate way to resolve a multitude of similar claims is to determine: (1) whether common issues of law and fact predominate over individual ones concerning the putative (proposed) class members, (2) whether the class action is superior to a myriad of individually litigated cases, and (3) whether a class action-given the number of individual claims involved is manageable. Lee v. Carter-Reed Co., LLC., 203 N.J. 496, 517-518 (2010). For a class action to proceed, a court must conclude that: (1) that the class is so numerous that joinder of all members is impracticable (the “numerosity requirement”); (2) that there are questions of law or fact common to the class (the “commonality requirement”); (3) that the claims or defenses of the representative parties are typical of those of the class (the “typicality requirement”); and (4) that the representative parties will adequately protect the interests of the class (the “adequacy of representation” requirement). Wal-Mart Stores, Inc. v. Dukes, 564 U.S. 338 (2011). See generally Federal Rule of Civil Procedure 23 and New Jersey Rule of Court 4:32.

To satisfy the requirement of numerosity, a Plaintiff must demonstrate that the class is so “numerous that joinder of all parties is impracticable.” Fed. R. Civ. P. 23(a)(1). The United States Supreme Court has stated that, “[t]he numerosity requirement requires examination of the specific facts of each case and imposes no absolute limitations. General Tel. Co. of The Northwest, Inc. v. Equal Employment Opportunity Commission, 446 U.S. 318, 330 (1980).

Generally, a class will not be certified unless “there are questions of law or fact common to the class.” La Fata v. Raytheon Co., 207 F.R.D. 35 (E.D. Pa. 2002). This provision ensures that there are shared factual or legal issues among claimants such that it is efficient, fair and sensible to permit a single adjudication of similar claims. See Wal-Mart Stores Inc., v. Dukes, 564 U.S. 338 (2011). A common question is one that, when answered as to one class member, will advance the resolution of the claims of the other members of the putative class. See General Telephone Co. of Southwest v. Falcon, 457 U.S. 147 (1982).

The “typicality” requirement is satisfied if the claims of the representative parties are typical of the claims of the class. Fed. R. Civ. P. 23(a)(3). However, class members are not required to have identical claims or underlying factual circumstances; if the claims at issue arise from the same practice or course of conduct, or are based on the same underlying legal theory, the typicality requirement will be satisfied. In re Prudential Ins. Co. Am. Sales Practice Litig. Agent Actions, 148 F.3d 283, 311-12 (3d Cir. 1998). Though the concepts of commonality and typicality are analytically similar, the typicality requirement is specifically "designed to align the interests of the class and the class representatives so that the latter will work to benefit the entire class through the pursuit of their own goals," Id. at 311, and to avoid situations where the legal theories of the named plaintiffs conflict with the legal theories of the absentees. Baby Neal for and by Kanter v. Casey, 43 F.3d 48, 57-58 (3d Cir. 1994).

“Adequacy” commands that the representative parties will fairly and adequately protect the interests of the class.” Fed. R. Civ. P. 23(a)(4). The adequacy inquiry concerns the “interests and incentives of the representative plaintiffs.” Dewey v. Volkswagon AG, 681 F.3d 170, 181 (3rd Cir. 2012). To be considered an intra-class conflict “divisions should render the class representation so defective in structure as to rise to the level of a constitutional dereliction, or violat[e] R. 23(a)(4).” Dewey, 681 F.3d at 184. However, unless the conflict is “fundamental” there is no violation of R. 23(a)(4). Id.

Under the federal Fair Labor Standards Act (FLSA), no employee can be a party in an action to recover unpaid minimum wages or overtime, “… unless he gives his consent in writing to become such a party and such consent is filed in the court in which such action is brought.” 29 U.S.C. § 216(b). These so-called “opt-in” employees are party plaintiffs, unlike absent class members in a Federal Rule 23 or NJ Rule 32 class action. See 7B Wright, Miller, & Kane, Federal Practice and Procedure § 1807 at 474 n.13 (3d ed. 2005). In a class action claim, all similarly situated class members will automatically be included in the putative class action brought under Rule 32 “unless they elect to be excluded.” R. 4:32-2(b)(2)E; See generally Phillips Petroleum Co. v. Shutts, 472 U.S. 797, 812 (1985) (“a fully descriptive notice…sent first class mail to each class member, with an explanation of their right to “opt out”, satisfies due process).

Tolling of Statue of Limitations: FLSA Collective Action Claims
vs. Class Action Claims

Claims for unpaid wages (overtime pay or otherwise) have statute of limitations which are laws setting the time by which a legal action must be filed. The statute of limitations for a FLSA claim is 2 years but can be expanded to 3 years if a willful violation is found. 29 U.S.C. § 255(a). The New Jersey Wage and Hour Law (NJWHL) has a 2 year statute of limitations. N.J.S.A. 34:56a25. The filing of a class action complaint tolls the statute of limitations for all putative class members. American-Pipe & Construction Co. v. Utah, 414 U.S. 538 (1974). By contrast, the filing of a FLSA collective action tolls only the claims of those individuals who have expressed an intent to “opt-in” to the action by filing a consent form with the court. See e.g., Perez v. Comcast, 2011 WL 5979769, at *2 (N.D. Ill. Nov. 29, 2011) (citing 29 U.S.C. §§ 255, 256; Woods v. N.Y. Life Ins. Co., 686 F.2d 578, 580 (7th Cir. 1982)).

At the initial “conditional certification” stage of a FLSA collective action, the court determines whether notice of the action should be issued to potential opt-in plaintiffs and whether the action should proceed initially as a collective action. See, e.g., White v. MPW Indus. Serv., Inc., 236 F.R.D. 363, 366 (E.D. Tenn. 2006); Laroque v. Domino’s Pizza, LLC, 557 F. Supp. 2d 346, 352 (E.D.N.Y. 2008); De Asencio v. Tyson Foods, Inc., 130 F. Supp. 2d 660, 662- 63 (E.D. Pa. 2001), rev’d on other grounds, 342 F.3d 301 (3d Cir. 2003). The court bases its determination at the conditional certification stage on the plaintiffs’ ability to make a threshold showing that plaintiff(s) and members of the proposed collective action are “similarly situated.” Quinteros v. Sparkle Cleaning, Inc., 532 F. Supp. 2d 762, 772, n.6 (D. Md. 2008).

If believe you work for a company who fails to pay its employees the wages and benefits you and your coworkers are legally entitled to under federal or state law, do not hesitate to contact the lawyers at Mashel Law (732) 536-6161 or fill out the contact form on this page to learn what your rights are. Mashel Law located in Marlboro, New Jersey, is dedicated exclusively to protecting the rights of employees.