UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF NEW YORK
February 22, 2011
FAY RUGGLES, ANTOINETTE BOONE, GEORGIA WOODRUFF, MAURICE BILLMAN, KAREN HAWKINS, HARRIET CHILDRESS, AND NANCY COLEMAN, ON BEHALF OF THEMSELVES AND ALL SIMILARLY SITUATED EMPLOYEES PLAINTIFFS,
WELLPOINT, INC., DEFENDANT.
MEMORANDUM-DECISION and ORDER*fn1
Pending before the Court are Motions seeking the certification and the denial of certification of proposed Rule 23 classes for alleged violations of New York, California, and Illinois wage and hour laws. See Dkt. Nos. 197, 198, 200, 204. For the reasons that follow, Plaintiffs' consolidated Motion for class certification (Dkt. No. 204) is denied, and Defendant's Motions for denial of certification of a New York Rule 23 class (Dkt. No. 197); a California Rule 23 class (Dkt. No. 198); and an Illinois Rule 23 class (Dkt. No. 200) are granted.
A. Factual Background
Plaintiffs are all registered nurses ("RNs"), employed, or previously employed by Defendant WellPoint, Inc. ("Defendant" or "WellPoint") in the position of "Utilization Review Nurse," "Case Management Nurse," or "Medical Management Nurse." Am. Compl. (Dkt. No. 166) ¶ 1. WellPoint, one of the nation's largest health benefits companies, is a complex corporate entity headquartered in Indianapolis, Indiana, which provides health insurance benefits and services to approximately 34 million customers nationwide. Among the services WellPoint provides are "medical management," "case management," and "utilization review."*fn2 Formed in 2004, WellPoint has a corporate presence in California, Colorado, Connecticut, Georgia, Indiana, Kentucky, Maine, Missouri, Nevada, New Hampshire, New York, Ohio, Virginia, and Wisconsin. See Ginzinger Decl. (Dkt. No. 53-3) ¶¶ 2-4.
WellPoint's current structure is the result of numerous mergers and acquisitions, some of which are pertinent to the instant Motions. See Ginzinger Decl. (Dkt. No. 53-3) ¶¶ 3-4; WelkerFinney Decl. (Dkt. No. 200-2) ¶¶ 4-6. In 1992, Blue Cross of California created a for-profit entity, WellPoint Health Networks Inc., to operate its managed care business. Blue Cross of California, a managed care program in California, and Blue Cross Life and Health Insurance Company, an insurance program in California, became subsidiaries of WellPoint Health Networks Inc., operating under the trade names Anthem Blue Cross and Anthem Blue Cross Life & Health Insurance Company (collectively "Anthem Blue Cross"). Welker-Finney Decl. (Dkt. No. 200-2) ¶¶ 4-6.
UniCare Life & Health Insurance Company ("UniCare") existed as another subsidiary of WellPoint Health Networks Inc. and in 1995 became the brand name for the parent company's non-Blue Cross Blue Shield businesses operating outside of California. In early 2000, WellPoint Health Networks Inc. acquired Rush Prudential Health Plazas in Illinois. Id. ¶ 5.
WellPoint, Inc. was formed in November 2004, when WellPoint Health Networks Inc. merged with Anthem, Inc. Ginzinger Decl. ¶ 3-4; Welker-Finney Decl. (Dkt. No. 200-2) ¶¶ 4-6. Anthem Blue Cross continues to operate in numerous locations throughout California, including Anaheim, Camarillo, Costa Mesa, Fresno, Glendale, Los Angeles, Modesto, Newbury Park, North Hollywood, Oakland, Pomona, Rancho Cordon, Sacramento, San Bernardino, San Diego, San Francisco, San Jose, Santa Barbara, Thousand Oaks, Visalia, Walnut Creek, West Hills, and Woodland Hills; it employs registered nurses in the following job positions: Nurse Case Manager I, Nurse Case Manager II, Nurse Case Manager Senior, Nurse Case Manager Lead, Nurse Medical Management I, Nurse Medical Management II, Nurse Medical Management Senior, and Nurse Medical Management Lead. Welker-Finney Decl. (Dkt. No. 200-2) ¶ 7-8. Unicare continues to operate in a number of locations in Illinois, including: Chicago, Deerfield, Mt. Vernon, Schaumburg, and Westchester; it employs registered nurses in the following job positions: Nurse Case Manager I, Nurse Case Manager II, Nurse Case Manager Senior, Nurse Case Manager Lead, Nurse Medical Management I, Nurse Medical Management II, Nurse Medical Management Senior, Nurse Medical Management Lead, and HMC Nurse Care Manager Senior. Id. ¶¶ 9-10.*fn3
Subsequent to its formation, WellPoint continued expanding its operations, including through its December 2005 acquisition of WellChoice Inc. and WellChoice Inc. subsidiary, Empire Blue Cross Blue Shield ("Empire"). Through that deal, WellPoint acquired Empire's New York operations, including those in Albany, Brooklyn, Melville, and New York City. Pekrol Decl. (Dkt. No. 197-1, Ex. 6) ¶¶ 1, 3. Under Empire, all nurse employees, regardless of their duties, carried the same title, "Case Manager." Id. ¶ 6. Following Empire's acquisition by WellPoint, all of Empire's employees became employees of WellPoint. As part of the restructuring, nurse employees previously designated uniformly as "Case Managers" took on various job titles including "Utilization Review Nurse," "Medical Management Nurse," and "Case Manager Nurse." Id.
According to WellPoint, the legacy organizations from which its current structure is derived employed registered nurses in differently titled positions who performed a wide array of duties that varied based on the entity that employed them. Ginzinger Decl. WellPoint insists that variation survives to date, yielding significant differences among its nurses nationwide in terms of the duties they perform and their compensation structure both within and across job categories. See, e.g., Ginzinger Decl. (Dkt. No. 53-3); Pekrol Decl. ¶ 8; Fooks Decl. (Dkt. No. 200-6) ¶ 10; Nieweglowski Decl. (Dkt. No. 200-6) ¶ 7. Nurses in the job titles at issue work in a variety of different departments, often specializing in discrete areas of WellPoint's business, and are employed in different settings including large buildings, small office complexes, hospitals, and their own homes. Dkt. No. 53 at 4-5. Nevertheless, Plaintiffs contend that WellPoint has devoted itself to a program of "job mapping" that has achieved substantial uniformity nationwide, and they have submitted job descriptions for the "job families" of Medical Management and Case Management that they claim are applicable to all WellPoint employees. Mem. in Supp. Mot. to Certify (Dkt. No. 204-2) ("Pls.' Certification MOL") at 15-16; Selby Dep. at 64-72, 77-80, 85-89, 101, 120-21; Srey Aff, Exs. D-E (Dkt. Nos. 204-7, 204-8). Each job family contains several subcategories, or grades, and while some of the "Core Content" and "Roles" for the subcategories overlap, variation based on grade is also readily apparent in the descriptions. For example, in the Medical Management family, all grades conduct pre-certification, concurrent, and retrospective reviews, guide customers to covered care options, identify discharge planning needs, and work with hospitals and healthcare providers; the higher grades handle complex cases, act as company representatives, develop training materials, and monitor and prioritize workflows. See Dkt. No. 204-7. Similarly, in the Case Management family, all grades conduct assessments to identify insured's needs and goals, prepare and implement suitable case management plans, link policy holders with appropriate care facilities and providers, and participate in "rounds." The higher grades are described as fulfilling additional functions, such as acting as a preceptor, facilitating conflict resolution, monitoring workflows, and evaluating the Utilization Management processes. Dkt. No. 204-8. Both job families' descriptions note that all grades shall be expected to "[p]erform other related duties as required."
Some WellPoint nurses utilize various guidelines and regulations, produced or endorsed by WellPoint, as tools in making their managed care recommendations. These include, but are not limited to the Milliman Guidelines, WellPoint Clinical Guidelines, NICU Guidelines, ACOEM Guidelines, MTUS Guidelines, and McKesson Guidelines. See, e.g., Whitney Decl. ¶ 6; Parisi Dep. (Dkt. No. 215-15) at 29; Kennedy Dep. (Dkt. No. 204-14) at 17:1-3. From the interrogatory responses and deposition testimony, the Milliman Guidelines appear to be widely used in utilization review. Numerous deponents and declarants attest to collecting clinical information on an insured, comparing these against the insured's policy and the Milliman Guidelines and approving the requested benefit or service if the relevant Milliman criteria were met; if they were not met, under WellPoint policies, the nurse could not deny the request but would send the insured's information to a physician reviewer. But see Sager Dep (Dkt. No. 214-15) at 49-51 (Nurses in Nation Accounts can authorize a requested benefit even if it does not meet the guidelines). Similar testimony exists from Case Managers, with WellPoint care plans providing the criteria for evaluating an insured's needs and generating appropriate care plans. See Pls.' Certification MOL at 7-13 (overviewing certain testimony).
The Milliman Guidelines open with a disclaimer:
The appropriate use of these Guidelines requires professional medical judgment . . . . Professional medical judgment is required in all phases of the health care delivery and management process that should include consideration of the individual circumstances of any particular patient. These Guidelines are not intended as a substitute for this important professional judgment.
Use of the Guidelines as a basis for denying authorization for treatment without proper consideration of the unique characteristics of each patient or as a basis for denying payment for treatment received is an inappropriate use of the Guidelines.
Milliman Care Guidelines: Inpatient and Surgical Care, 8th ed. (Dkt. No. 216-4) at viii. The Guidelines' Introduction reiterates this point: "Use of the Guidelines requires, and never replaces, clinical judgment." Id. at 1.
WellPoint issues company-wide policies emphasizing that it does not provide medical services and strives to avoid the appearance of providing such services. The policies coach employees on the correct vocabulary to employ so as to ensure the understanding that WellPoint nurses assist in providing health benefits, health education, and other health related services for "members," but do not engage in the practice of medicine for "patients." Srey Aff., Ex. A, WellPoint Do's and Don't(s) Guidelines (Dkt. No. 204-4).
B. Procedural History
On February 21, 2008, Plaintiffs Fay Ruggles, Antoinette Boone, and Georgia Woodruff, on behalf of themselves and all similarly situated employees, filed a class action and collective action Complaint, alleging, inter alia, that Defendant failed to pay required overtime compensation in violation of the Fair Labor Standards Act ("FLSA"), 29 U.S.C. §§ 201 et seq., and state labor law and regulations. Compl. (Dkt. No. 1). Ruggles, Boone, and Woodruff claim that Defendant's failure to pay overtime wages results from its improper classification of utilization review nurses, case management nurses, and medical management nurses as "exempt" salary employees. Id. Accordingly, they brought a collective action under the FLSA on behalf of all persons who Defendant employed nationwide in those three job categories. Id. Defendant denies any violation and avers that the nurses in the relevant positions qualify under the "administrative" or "professional" exemptions provided for by state and federal law. Answer (Dkt. No. 79). On largely the same facts, Plaintiff Ruggles asserts a claim arising under New York Labor Law §§ 190 et seq., New York Labor Law §§ 650 et seq., and the New York State Department of Labor Regulations, 12 N.Y.C.R.R. Part 142. Compl. ¶ 21. Ruggles brings the New York claim as a class action, pursuant to Federal Rule of Civil Procedure 23. Compl. ¶¶ 9, 19; see also Am. Compl. ¶ 25.
On May 5, 2008, Defendant moved to dismiss or strike the New York class action allegations and claims for individual relief asserted by Ruggles, and to dismiss or strike certain claims arising under the FLSA. Dkt. No. 19. Shortly thereafter, Ruggles, Boone, and Woodruff moved for conditional certification and court-authorized notice pursuant to 29 U.S.C. § 216(b). Dkt. No. 37. On September 24, 2008, this Court largely denied Defendant's Motion to dismiss, and found that while Plaintiffs' Complaint was facially sufficient, certification of the proposed Rule 23 class would be premature as there was insufficient evidence at that juncture to determine whether the conditions for certification are met. Ruggles v. Wellpoint, Inc., 253 F.R.D. 61, 65-67 (N.D.N.Y. 2008) (Kahn, J.). The Court noted, [t]o determine whether Plaintiff Ruggles is entitled to certification of the putative New York class, the Court requires a significant amount of information that will likely surface in discovery. Namely, the similarity or dissimilarity of the three job classifications Plaintiff Ruggles seeks to represent is an outstanding factual question that is central to the scope of the putative class. Without evidence addressing the actual duties of case management nurse, medical management nurse, and utilization review nurse . . . the Court cannot be assured that any of the four prerequisites delineated in Rule 23(a) are satisfied.
Id. at 67.
On November 6, 2008, Magistrate Judge Treece granted conditional certification under the FLSA (the "FLSA class"), ordering that "the class of potential opt-in plaintiffs entitled to notice is defined as utilization review nurses, case management nurses, and medical management nurses . . . nationwide during the three-years prior to the filing of the Complaint." Dkt. No. 73. On October 16, 2009, after the expiration of the FLSA opt-in period, Plaintiffs filed an Amended Complaint, re-alleging the earlier claims; naming Maurice Billman, Karen Hawkins, Harriet Childress, and Nancy Coleman as additional Plaintiffs (collectively with Ruggles, Boone, and Woodruff, the "Named Plaintiffs"); asserting additional state law claims under California and Illinois wage and hour laws on behalf of the individual Named Plaintiffs and as Rule 23 class actions. Dkt. No. 166. The Amended Complaint states seven causes of action, each for essentially the same conduct, improperly classifying the Named Plaintiffs and proposed class members as "exempt" salary employees under federal and state labor laws that mandate overtime wages for hours worked over forty hours per week. The claims for relief are brought as follows: the first under the FLSA; the second under New York Labor Law Article 19, §§ 650 et seq. and 12 N.Y.C.R.R. 142; the third through sixth under California Wage Order No. 4, the California Labor Code §§ 510 and 1198, 226 and 1174, and 201, 202, and 203, and California Unfair Competition Law, California Business and Professional Code § 17200 et seq.; and the seventh under the Illinois Minimum Wage Act, 820 Ill. Comp. Stat. § 105/1, et seq., and the regulations promulgated thereunder, Ill. Admin. Code, tit. 56 §§ 210.100 et. seq.
Discovery has proceeded with great divisiveness between the parties, requiring numerous discovery-related conferences and court orders by Magistrate Judge Treece. The scope of discovery was partially resolved by Judge Treece's January 4, 2010 Memorandum-Decision and Order, which allowed ten interrogatories, drafted by the Court, to be directed to each opt-in Plaintiff, but limited depositions to 25% of randomly selected Plaintiffs and restricted these depositions to 2.5 hours each. Dkt. No. 176. The interrogatories provided by the Court include requests for Plaintiffs to identify and produce degrees, diplomas, certificates, and licenses; state the number of hours worked as a case management, utilization review, or medical management nurse; and describe the duties and responsibilities associated with those positions and the amount of time devoted to each on a daily basis. Dkt. No.176, App. A.
After extensive discovery, on March 26, 2010, Defendant preemptively filed three separate Motions to deny Rule 23 class certification of the New York class (Dkt. No. 197), Illinois class (Dkt. No. 200), and California class (Dkt. No. 198). On March 30, 2010, the Named Plaintiffs filed a Consolidated Motion to certify all three classes pursuant to Rule 23(b)(3). Dkt. No. 204. The Named Plaintiffs seek to be designated class representatives and Nichols Kaster, PLLP to be named class counsel.*fn4 Pls.' Certification MOL at 35. Each side has attached to its various submissions hundreds of pages of deposition testimony from numerous putative class members, declarations, interrogatory responses, documentation of WellPoint policies, job descriptions, and other materials. Plaintiff argues this documentation supports class certification; Defendant asserts it demonstrates the unsuitability of the class action vehicle to this litigation.
III. LEGAL FRAMEWORK
A. State Law Claims
1. New York
Under New York Department of Labor Regulations, "[a]n employer shall pay an employee for overtime at a wage rate of one and one-half times the employee's regular rate in the manner and methods provided in and subject to the exemptions of sections 7 and 13 of 29 U.S.C. § 201."*fn5 12 N.Y.C.R.R. § 142-2.2. While the Regulations expressly reference the exemptions of the FLSA, New York law also contains its own exemptions. See 12 N.Y.C.C.R.R.142-3.12(c)(2). Thus, state and federal regulation exempt those who "work in a bona fide executive, administrative, and professional capacity from these overtime wage laws." Id.; N.Y. LAB. LAW § 651(5)(c); 29 U.S.C. § 213(a)(1); Reiseck v. Universal Commc'ns of Miami, Inc., 591 F.3d 101, 105 (2d Cir. 2010).
Illinois law generally requires employers to compensate non-exempt employees at not less than one and one-half times their regular rate for any work performed in excess of forty hours per workweek. See 820 ILL. COMP. STAT. 105/4a(1). An exemption applies to "[a]ny employee employed in bona fide executive, administrative or professional capacity . . . as defined by or covered by the Federal Fair Labor Standards Act of 1938 and the rules adopted under that Act . . . ." 820 ILL. COMP. STAT. 105/4a(2)(E); Ross v. RBS Citizens, N.A., No. 09 CV 5695, 2010 WL 3980113, at *7 n.9 (N.D. Ill. Oct. 8, 2010).
Under California law, subject to certain exemptions, employers must pay employees an overtime rate of not less than one and one-half times their regular rate where such employees work more than eight hours in any workday or more than forty hours in any workweek. CAL. LAB. CODE §§ 510, 1198; Cal. Indus. Welfare Comm'n Wage Order ("IWC Wage Order") 4-2001. State law additionally requires that, at the time of each payment of wages, an employer shall provide each employee with a wage statement itemizing, among other things, the total hours worked by the employee in the pay period. CAL. LAB. CODE § 226(a).
As noted, both New York and Illinois law incorporate, at least in part, the exemptions from the overtime pay requirement that are provided for under the FLSA and its attendant regulations.*fn6 See 29 U.S.C. § 213(a)(1) (exempting those "employed in a bona fide executive, administrative, or professional capacity"). Under the United States Department of Labor's ("DOL") Regulations the administrative employee exemption applies to any employee:
(1) Compensated on a salary or fee basis at a rate of not less than $455 per week . . .;
(2) Whose primary duty is the performance of office or non-manual work directly related to the management or general business operations of the employer . . . ; and
(3) Whose primary duty includes the exercise of discretion and independent judgment with respect to matters of significance.
29 C.F.R. § 541.200(a). For the purpose of this exemption the Regulations define "primary duty" asthe principal, main, major or most important duty that the employee performs. Determination of an employee's primary duty must be based on all the facts in a particular case, with the major emphasis on the character of the employee's job as a whole. Factors to consider when determining the primary duty of an employee include, but are not limited to, the relative importance of the exempt duties as compared with other types of duties; the amount of time spent performing exempt work; the employee's relative freedom from direct supervision; and the relationship between the employee's salary and the wages paid to other employees for the kind of nonexempt work performed by the employee. 29 C.F.R. § 541.700(a). The time an employee spends performing exempt work is an important but non-determinative factor in determining an employee's primary duty. 29 C.F.R. § 541.700(b).
Under the DOL's Regulations,
To qualify for the learned professional exemption, an employee's primary duty must be the performance of work requiring advanced knowledge in a field of science or learning customarily acquired by a prolonged course of specialized intellectual instruction. This primary duty test includes three elements:
(1) The employee must perform work requiring advanced knowledge;
(2) The advanced knowledge must be in a field of science or learning; and
(3) The advanced knowledge must be customarily acquired by a prolonged course of specialized intellectual instruction.
29 C.F.R. § 541.301(a).
The Regulations explain that, [t]he use of manuals, guidelines or other established procedures containing or relating to highly technical, scientific, legal, financial or other similarly complex matters that can be understood or interpreted only by those with advanced or specialized knowledge or skills does not preclude exemption under section 13(a)(1) . . . . The section 13(a)(1) exemptions are not available, however, for employees who simply apply well-established techniques or procedures described in manuals or other sources within closely prescribed limits to determine the correct response to an inquiry or set of circumstances.
29 C.F.R. § 541.704.
They further state that "[r]egistered nurses who are registered by the appropriate State examining board generally meet the duties requirements for the learned professional exemption."
29 C.F.R. § 541.301(e)(2).In addition, an employer is not liable for failing to pay overtime wages if it did so "in good faith in conformity with and in reliance on any written administrative regulation, order, ruling, approval, or interpretation" of the DOL. 29 U.S.C. § 259(a).
California law treats overtime exemptions for administrative and professional workers slightly differently.*fn7 Pertinently, the administrative employee exemption applies to those:
(a) Whose duties and responsibilities involve :
(i) The performance of office or non-manual work directly related to management policies or general business operations of his/her employer or his/her employer's customers; [and]
(b) Who customarily and regularly exercises discretion and independent judgment; and
(c) Who regularly and directly assists a proprietor, or an employee employed in a bona fide executive or administrative capacity . . . ; or
(d) Who performs under only general supervision work along specialized or technical lines requiring special training, experience, or knowledge; or
(e) Who executes under only general supervision special assignments and tasks; and
(f) Who isprimarily engaged in duties that meet the test of the exemption. The activities constituting exempt work and non-exempt work shall be construed in the same manner as such terms are construed in the following regulations under the Fair Labor Standards Act effective as of the date of this order: 29 C.F.R. Sections 541.201-205, 541.207-208, 541.210, and 541.215 . . . . The work actually performed by the employee during the course of the workweek must, first and foremost, be examined and the amount of time the employee spends on such work, together with the employer's realistic expectations and the realistic requirements of the job, shall be considered in determining whether the employee satisfies this requirement.
(g) Such employee must also earn a monthly salary equivalent to no less than two (2) times the state minimum wage for full-time employment.
IWC Wage Order 4-2001(1)(A)(2); see also CAL. LAB. CODE § 515(a).Notably, under California law, there is no presumed exemption for registered nurses. See IWC Wage Order 4-2001(3)(f).
California law applies a test akin to but not identical with the federal regulations' "primary duty" test. Compare IWC Wage Order 4(2)\(N) (defining "primarily" as "more than one-half the employee's work time") with 29 C.F.R. § 541.201, 541.700 ("'primary duty' means the principal, main, major or most important duty that the employee performs"); see Ramirez v. Yosemite Water Co., Inc., 20 Cal. 4th 785 (1999) (interpreting Wage Order No. 7-80 and finding that under state law an employee's exempt status must be determined based on quantitative analysis of her duties, rather than the qualitative analysis associated with the federal regulations).
B. Rule 23 Class Actions
Rule 23 class actions are designed to promote efficiency and economy of litigation, and to preserve small claims through aggregation without sacrificing procedural fairness or unfairness. Am. Pipe & Constr. Co. v. Utah, 414 U.S. 538, 553 (1974); Amchem Prods. v. Windsor, 521 U.S. 591, 614 (1997); Eisen v. Carlisle & Jacquelin, 391 F.2d 555, 560 (2d Cir. 1968) ("class suit both eliminates the possibility of repetitious litigation and provides small claimants with a method of obtaining redress for claims which would otherwise be too small to warrant individual litigation."). Rule 23(a) lists four prerequisites for class certification: "(1) numerosity (a 'class [so large] that joinder of all members is impracticable'); (2) commonality ('questions of law or fact common to the class'); (3) typicality (named parties' claims or defenses 'are typical . . . of the class'); and (4) adequacy of representation (representatives 'will fairly and adequately protect the interests of the class')." Amchem, 521 U.S. at 613 (quoting FED. R. CIV. P. 23(a)). A district court shall grant certification only if plaintiffs sustain their burden of demonstrating, by a preponderance of the evidence, that the prerequisites are met. See Gen. Tel. Co. of Sw. v. Falcon, 457 U.S. 147, 161 (1982) (class action "may only be certified if the trial court is satisfied, after a rigorous analysis, that the prerequisites of Rule 23(a) have been satisfied); In re Initial Public Offerings Securities Litig., 471 F.3d 24, 40-41 (2d Cir. 2006) ("In re IPO"); Teamsters Local 445 Freight Div. Pension Fund v. Bombardier Inc., 546 F.3d 196, 202 (2d Cir. 2008) ("preponderance of the evidence standard applies to evidence proffered to establish Rule 23's requirements").
Finally, assuming the prerequisites for class certification are met, a class action may be maintained only if at least one subsection of Rule 23(b) is satisfied. See FED. R. CIV. P. 23(b);
Amchem, 521 U.S. at 614; In re Simon II Litig., 407 F.3d 125, 132 (2d Cir. 2005).Throughout this entire analysis, a court's determination as to whether the requirements for class certification are met involves mixed questions of fact and law and may require the court to resolve factual disputes that implicate merits issues. In re IPO, 471 F.3d at 40-41. To the extent that such overlap occurs, a district court must reach those issues before certifying a Rule 23 class. Id.
IV. MOTIONS TO CERTIFY AND DENY CERTIFICATION FOR RULE 23 CLASSES
The main points of dispute as to the appropriateness of class certification for each of the classes are the degree to which there is variation between the relevant job descriptions; the amount of variation within a given job category, and relatedly, the degree of correspondence between a job description and the work each employee actually performs; the extent to which putative class members exercise discretion in performing their duties, and the affect that policies, manuals, and other tools provided by Defendant have on that exercise of discretion; and whether employees used their professional training and expertise as registered nurses. The parties also dispute the adequacy of the Named Plaintiffs' to represent their respective classes.
All parties agree that the actual duties performed by putative class members are key to class certification. Plaintiffs suggest that the "primary duty" of all the nurses at issue are uniform: "Utilization reviews consist of collecting medical information (either by telephone, fax, email, or other means) that a hospital or healthcare provider has gathered about an insured to assist in authorizing requests for certain health insurance benefits or services"; comparing that information against WellPoint's specific criteria; and either granting the request if the information matches the criteria, or passing it to another reviewer, without any independent input from the nurses. Pls.' Certification MOL at 7-10. Similarly, "Case management duties consist of communicating with the insured, the healthcare provider, or others, to collect information about the insured to assist in coordinating health insurance benefits and services to make sure the insureds receive care consistent with typically pre-determined 'care plans' scripted to fit specific medical conditions." Id. at 11.
Defendant claims that certification based upon the shared characteristic of putative class members' providing "case management" functions or "utilization management" functions oversimplifies and inaccurately describes the duties each nurse performs. Opp'n to Pls.'
Certification Mot (Dkt. No. 214) ("Def.'s Opp'n MOL") at 2. Defendant avers that the duties performed vary tremendously,*fn8 and that no informed determination on this issue can be made without individualized inquiries.
The parties take the same basic positions with regard to the degree of discretion putative class members exercise in performing their duties. Plaintiffs argue that the nurses' primary duty is one allowing little or no discretion, and that company policies, procedures, and guidelines essentially dictate employees' decisions and actions. Defendant counters that nurses are expected to exercise discretion and, in fact, do so with varying degrees depending on a number of factors.*fn9 Id. at 7-9;Whitney Decl. ¶¶ 6-10.
A. New York Rule 23 Class
Fay Ruggles (the "New York Named Plaintiff") seeks certification of a Rule 23 class defined as "all persons who worked for Defendant as a utilization review nurse, case management nurse, medical management nurse, or other job titles performing substantially similar job duties as the New York Named Plaintiff, in the state of New York at any time from six years prior to the filing of this Complaint to the entry of judgment in the case." Am. Compl. ¶ 25. On behalf of herself and this putative class, Ruggles seeks redress for alleged violations by Defendant of New York Labor Law Article 6 §§ 190 et seq., the New York Minimum Wage Act, New York Labor Law §§ 650 et seq., and the supporting New York State Department of Labor regulations, 12 N.Y.C.R.R. Part 142. Id. ¶ 27(a). The Amended Complaint announces Ruggles as the sole Named Plaintiff for the New York class. Am. Compl. ¶ 3.Among the issues raised by Defendant in its Motion to deny certification of a New York class (Dkt. No. 197) is whether Ruggles has standing to act as a representative.
On November 11, 2003, non-party Empire Blue Cross Blue Shield ("Empire"), at the time a subsidiary of non-party Wellchoice, Inc., hired Ruggles to work as a Case Manager I. Bartlett Decl., Ex. A, Ruggles Dep. (Dkt. No. 197-1) at 38:14-16; Bartlett Decl., Ex. A-1, Ruggles Resume (Dkt. No. 197-1, Ex. 1) at 2; Pekrol Decl. ¶ 5. Ruggles was terminated on August 16, 2005. Ruggles Dep. 4:17-18; Ruggles Resume at 2. In September 2005, WellPoint announced a merger deal whereby it would acquire Wellchoice, Inc., including Empire. The merger occurred on December 27, 2005. Pekrol Decl. ¶ 5; Mem. in supp. Mot. to deny NY class (Dkt. No. 197) at 5.
In its Answer (Dkt. No. 170), Defendant "admits that it employed the named Plaintiffs. WellPoint admits that it employed Plaintiff Ruggles in the job title Case Manager . . . ." In its Motion to deny certification of a New York class, however, Defendant asserts that Plaintiff Ruggles lacks standing to represent the proposed New York Rule 23 class as she "never worked for the named Defendant in this case, WellPoint Inc. The entity for which she worked is not a party to this litigation, and she, therefore, stands apart from the WellPoint employees she seeks to represent." Id. at 12-13. Defendant asserts that there is "no evidence in the record to tie Empire's potential acts or omissions to WellPoint for the period of time that Empire employed Ruggles." Id. at 13.
The Named Plaintiffs insist that because WellPoint admitted in its Answer that it employed Ruggles, it is bound to that position throughout the litigation. Pls.' Consol. Response. (Dkt. No. 213) at 19-20 (citing N.L.R.B. v. Consol. Bus Transit, Inc., 577 F.3d 467, 474 (2d Cir. 2009)). While an admission by a party binds that party, that admission does not engender Ruggles with standing as a class representative, nor does it bar WellPoint from contesting her adequacy as a representative.
"[A] class representative must be part of the class" that she purports to represent. Falcon, 457 U.S. at 156 (1982) (citation and internal quotation omitted); Norwalk Core v. Norwalk Redevelopment Agency, 42 F.R.D. 617, 622 (D. Conn. 1967) modified in part and rev'd on other grounds by Norwalk Core v. Norwalk Redevelopment Agency, 395 F.2d 920, 937-38 (2d Cir. 1968). "[I]f none of the named plaintiffs purporting to represent a class establishes the requisite of a case or controversy with the defendants, none may seek relief on behalf of himself or any other member of the class." O'Shea v. Littleton, 414 U.S. 488, 494 (1974); Schlesinger v. Reservists Comm. to Stop the War, 418 U.S. 208, 216 (1974); Cordes & Co. Fin. Servs, Inc. v. A.G. Edwards & Sons, Inc., 502 F.3d 91, 99 (2d Cir. 2007).
Ruggles is not part of the New York class; regardless of Defendant's Answer, she is not a "person who worked for Defendant as a utilization review nurse, case management nurse, [or] medical management nurse . . . ."*fn10 Am. Compl. ¶ 25. The Court therefore grants Defendant's Motion to deny Rule 23 New York class certification (Dkt. No. 197) and denies without prejudice that portion of Plaintiffs' Motion to certify Rule 23 class (Dkt. No. 204) seeking certification of a New York class.*fn11
B. Illinois Rule 23 Class
Harriet Childress, and Nancy Coleman (the "Illinois Named Plaintiffs") seek certification of a Rule 23 class defined as "all persons who worked for Defendant as a utilization review nurse, case management nurse, medical management nurse, or other job titles performing substantially similar job duties in the state of Illinois at any time from three years prior to the filing of this Complaint . . . ."*fn12 Am. Compl. ¶ 43. On behalf of themselves and this putative class, the Illinois Named Plaintiffs allege that Defendant violated the Illinois Minimum Wage Law, 820 Ill. Comp. Stat. § 105/1, et seq. and the regulations promulgated thereunder, Ill. Admin. Code, tit. 56 §§ 210.100 et seq. Id. ¶ 45.
From approximately September 2005 until September 2007, Harriet Childress worked as a Medical Management I Nurse in the Unicare Utilization Management at Defendant's Sears Tower facility in Chicago, Illinois. Childress Decl. (Dkt. No. 204-12) ¶ 2; Nieweglowski Decl. ¶ 19. Childress asserts that her "primary job duty was to communicate with hospitals or doctor's offices regarding whether certain healthcare benefits and procedures were 'authorized' by WellPoint," a task that she claims provided her with no opportunity to "provide [her] opinion or advice on what the physician reviewer should do" and which she believes does not require the expertise of a registered nurse. Childress Decl. ¶¶ 3, 8, 15. Childress states that as part of her medical management duties, she "was responsible for completing 'preauthorization,' 'concurrent,' and 'retrospective' reviews [but] . . . . [r]egardless of the medical management function [she] performed . . . [her] primary duties remained the same." Id. ¶ 9. Childress asserts that her discretion was circumscribed by WellPoint's rigid policies and procedures and demand for strict adherence to Milliman guidelines and WellPoint's medical policy and clinical guidelines. Id. ¶ 4.
Nancy Coleman was also employed as a Medical Management Nurse in Defendant's Chicago UniCare and Healthlink business units. Coleman Decl. (Dkt. No. 204-12) ¶ 1. Hired in July 2005 as a Medical Management Nurse I, she became a Medical Management II Nurse in August 2007, a position she retained until she resigned in March 2009. Nieweglowski Decl. ¶¶ 16, 18. Coleman's Declaration (Dkt. No. 204-12) largely mirrors that provided by Childress regarding the limited discretion she exercised in job duties, the determinative effect given to the Milliman Guidelines and WellPoint policies in the authorization process, and her belief that her duties did not require the expertise of an RN.*fn13 See generally Coleman Decl.
Childress and Coleman assert that they are adequate representatives asserting claims typical of those of a sufficiently numerous class to justify certification, the requirements of commonality are met, as are the predominance and superiority requirements of Rule 23(b)(3). Plaintiffs aver that "the type of uniform corporate policies that can be shown through common proof . . . will allow the fact finder to analyze WellPoint's exemption defenses based on common proof. This evidence includes, but is not necessarily limited to: (1) common job descriptions; (2) uniform job mapping process; (3) a uniform classification decision; (4) no treatment of patients; and (5) use of guidelines, policies, and procedures." Pls.' Consol. Response at 18.
Under Rule 23(a)(1) class certification is proper if joinder of all members is "impracticable," though not necessarily impossible. FED. R. CIV. P. 23(a)(1); Robidoux v. Celani, 987 F.2d 931, 935 (2d Cir. 1993). In this Circuit, "numerosity is presumed at a level of 40 members." Consol. Rail Corp. v. Hyde Park, 47 F.3d 473, 483 (2d Cir. 1995). Those seeking certification need not identify the precise number or identity of potential class members, but must offer evidence supporting a reasonable estimate of the size of the potential class. Robidoux, 987 F.2d at 935. Defendant admits that the putative Rule 23 Illinois class could be as large as sixty-two people. Mem. in Supp. of Mot. to Deny Il. Class Certification (Dkt. No. 200) ("Def.'s Il. MOL") at 14. That is sufficiently numerous to make joinder impracticable.
The second prerequisite for class certification is the existence of "questions of law or fact common to the class." FED. R. CIV. P. 23(a)(2). To demonstrate "commonality," a common question of law or fact must underlie both the named plaintiff's claim and those of the putative class. Marisol A. by Forbes v. Giuliani, 126 F.3d 372, 376 (2d Cir. 1997). "Commonality does not mandate that all class members make identical claims and arguments, only that common issues of fact or law affect all class members." Trief v. Dun & Bradstreet Corp., 144 F.R.D. 193, 198 (S.D.N.Y. 1992) (citing Port Auth. Police Benevolent Ass'n v. Port Auth., 698 F.2d 150, 153-54 (2d Cir. 1983)). A single common question may satisfy the commonality requirement if it is at the "core" of the cause of action alleged. Dunnigan v. Metro. Life Ins. Co., 214 F.R.D. 125, 136 (S.D.N.Y. 2003) (quotations and citations omitted).
All putative Illinois class members make the same broad claim: he or she has not been paid overtime wages for work performed due to an improper and uniform classification of all persons in his or her job position as exempt. The overriding issue, however, is not whether overtime was paid, but whether Defendant's failure to pay overtime is excused by one or more statutory exemptions, or by its good faith belief in an exemption's applicability.*fn14 Thus, to satisfy Rule 23(a)(2), Plaintiffs must show that common issues of law or fact exist as to these issues. See Myers v. Hertz, No. 02 Civ. 4325, 2007 WL 2126264, at * 4-6 (E.D.N.Y. July 24, 2007); Damassia v. Duane Reade, 250 F.R.D. 152, 155 (S.D.N.Y. 2008).
Plaintiffs meet the commonality prerequisite, as shared legal and factual issues central to this litigation exist across the class. One shared issue is whether the presumptive exemption of registered nurses applies to registered nurses who do not provide direct medical care. See 29 C.F.R. § 541.301(e)(2); see also Johnson v. WellPoint, No. 1:06-CV-2430 at 2-3, n.3 (N.D. Ga. Mar. 30, 2009) (Dkt. No. 204-10) (denying WellPoint summary judgment in action alleging unlawful denial of overtime pay to WellPoint nurses, despite presumptive exemption of registered nurses from overtime pay requirements under the FLSA); Morrow v. Unicare, No. 1:04-CV-1774 (N.D. Ga. 2006) (Dkt. No. 204-10) (same). All putative class members are registered nurses and are subject to commonly applicable policies that make clear that WellPoint nurses provide health benefits, health education, and other health related services for "members," but do not engage in the practice of medicine for "patients." Whitney Decl. ¶ 19; Srey Aff., Ex. A, WellPoint Do's and Don't(s) Guidelines (Dkt. No. 204-4). Another commonly shared issue is whether the duties listed in the job descriptions are consistent with those covered by the professional or administrative exemptions. The actual duties performed by WellPoint nurses, as opposed to the job titles held, control the determination of whether exemption was proper, see Cooke v. Gen. Dynamics Corp., 993 F. Supp. 56, 61 (D. Conn. 1997), but the job descriptions are probative of what those duties comprise. See Damassia, 250 F.R.D. at 157; Scott v. Aetna Servs., Inc., 210 F.R.D. 261, 265, 267 (D. Conn 2002). A third common issue is whether WellPoint's decision to withhold overtime pay from the putative Illinois class was made in good faith. 29 U.S.C. § 259(a). The evidence supports a conclusion that WellPoint classified all of the putative Illinois class members as exempt not through any individualized assessment of their actual duties, but simply on the basis of their job title. While the ultimate determination of whether that classification was appropriate with regard to specific class members may require individualized inquiry into each member's actual duties, that fact most appropriately factors into the predominance inquiry below, infra Sec. IV.B.5.*fn15 See Damassia, 250 F.R.D. at 157; Deboissiere v. Am. Modification Agency, No. 09-CV-2316, 2010 WL 4340642 (E.D.N.Y. Oct. 22, 2010); see also Vinole v. Countrywide Home Loans, Inc., 246 F.R.D. 637 (S.D. Cal. 2007), (commonality criterion met but predominance requirement of Rule 23(b)(3) not satisfied), aff'd 571 F.3d at 935 (9th Cir. 2009); Campbell v PricewaterhouseCoopers LLP, 253 F.R.D. 586, 603 (E.D. Cal. 2006) (same); Kernats v. Comcast Corp., Nos. 09 C 3368, 09 C 4305, 2010 WL 4193219, at *6-8 (N.D. ILL. Oct. 20 2010) (easily finding the "low hurdle" required by the commonality requirement cleared, but conducting a more thorough analysis at the predominance inquiry). In determining whether the commonality criterion is met, the blanket treatment of persons occupying certain job categories exists as a class-wide concern, namely whether the decision to exempt this group was made in good faith. Damassia, 250 F.R.D. at 156-57 (finding that "good faith" defense subject to common proof suffices for purposes of Rule 23(a)(2) and finding further that the decision to classify assistant managers pursuant to an agreement between defendant and its employee union rather than systematic review of the actual duties performed supports a finding of commonality). In light of the above, the Court finds that Plaintiffs have met their burden under Rule 23(a)(2) with respect to the proposed Illinois class.
Rule 23(a)(3) requires "the claims or defenses of the representative parties [be] typical of the claims or defenses of the class." FED. R. CIV. P. 23(a)(3). While conceptually distinguishable, in practice "[t]he commonality and typicality requirements tend to merge into one another . . . ." Marisol A., 126 F.3d at 376 (citations omitted). Both prongs are meant "to ensure that 'maintenance of a class action is economical and [that] the named plaintiff's claim and the class claims are so interrelated that the interests of the class members will be fairly and adequately protected in their absence.'" Id. (quoting Falcon, 457 U.S. at 157 n.13). Whereas the commonality requirement is meant to ensure the existence of a certifiable class, the typicality criterion focuses on the correspondence between the claims raised by the named parties and those of the class they seek to represent. See Caridad v. Metro-North Commuter R.R., 191 F.3d 283, 293 (2d Cir. 1999) (typicality requires "the disputed issue of law or fact occupy essentially the same degree of centrality to the named plaintiff's claim as to that of other members of the proposed class.") (internal quotation marks and citation omitted); In re Frontier Ins. Grp., 172 F.R.D. at 41. This prerequisite is met when each class member's claim arises from the same course of events, and each class member will offer similar arguments to demonstrate a defendant's liability. Marisol A., 126 F.3d at 376 (citations omitted). The named plaintiffs' claims are not required to be identical with those of each class member. Marriott v. Cnty. of Montgomery, 227 F.R.D. 159, 172 (N.D.N.Y. 2005) (citation omitted).
The Illinois Named Plaintiffs' claims present a close call on the issue of typicality, but ultimately satisfies this prerequisite. Both of the Illinois Named Plaintiffs worked as Medical Management I or Medical Management II Nurses in a single small department in Defendant's Chicago operations. Yet the putative class contains "all persons who worked for Defendant as a utilization review nurse, case management nurse, medical management nurse . . . in the state of Illinois." Am. Compl. ¶ 43. Those three job titles contain several subcategories, for which there is evidence of pertinent variation, and the decision by WellPoint to classify as exempt all Medical Management Nurses could be viewed as distinct from its decision to similarly classify all Case Management and Utilization Management Nurses. These facts weigh against certification, as the experience of the Illinois Named Plaintiffs is significantly more limited than that of the class which they seek to represent. See Myers, 2007 WL 2126264, at * 5-6 (where named plaintiffs worked at the same job in the same location, their claims do not satisfy commonality or typicality with members of a class dispersed state wide); Diaz, 2005 WL 2654270, at *5, 7.
Nevertheless, the common issue of whether the presumptive exemption of RNs applies to RNs who do not provide direct medical care occupies "essentially the same degree of centrality," Caridad, 191 F.3d at 293, for the Illinois Named Plaintiffs' claims as it does for all putative class members. Additionally, while the differences in location and job setting distinguish the Illinois Plaintiffs' experience from other class members, they are not fatal to finding typicality. See Bolanos, 212 F.R.D. at 155 (typicality found where representatives and employees worked in different positions and departments on different vessels under different supervisors); Iglesias-Mendoza v. La Belle Farm, Inc., 239 F.R.D. 363 (S.D.N.Y. 2007) (23(a)(3) satisfied where named plaintiffs worked almost exclusively as duck feeders in a single department but purported to represent all poultry workers employed by defendant state-wide); Ross, 2010 WL 3980113, at *3 ("differences between an [assistant branch manager's] job duties at in-store and traditional branches, [and] factual distinctions between the named plaintiffs' claims and those of other class members do not necessarily undermine typicality.") (footnote and citation omitted). Furthermore, while WellPoint may have separately arrived at its decisions to exempt Case Management Nurses, Utilization Management Nurses, and Medical Management Nurses, the fact that the Illinois Named Plaintiffs were designated exempt resulted from a decision to categorize nurses based on job title and without regard to the actual duties performed by individuals occupying that position. These facts make their claim typical, if not identical to, those of putative class members.
4. Adequate Representation
The final prerequisite to class certification demands the representative parties "fairly and adequately protect the interests of the class." FED. R. CIV. P. 23(a)(4). To determine whether this criterion is satisfied, a court must consider numerous factors including whether the proposed representative understands, is involved in, and is committed to pursuing the litigation, and whether she has conflicts of interest with other members of the class. See Marisol A., 126 F.3d at 378; Parker v. Time Warner Entm't Co., L.P., 239 F.R.D. 318, 38 (E.D.N.Y. 2007). Additionally "certification is inappropriate where a putative class representative is subject to unique defenses which threaten to become the focus of the litigation." Gary Plastic Packaging Corp. v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 903 F.2d 176, 180 (2d Cir. 1990) (internal citation omitted). Relatedly, a court must also ensure that plaintiffs' counsel "fairly and adequately represent the interests of the class" and meets the criteria of Rule 23(g)(1). FED. R. CIV. P. 23(g)(1); Hilton v. Wright, 235 F.R.D. 40, 54 (N.D.N.Y. 2006).
Defendant alleges that the variation in duties performed by nurses in the proposed Illinois class make any one member of the class an inadequate representative. Def.'s Il. MOL at 16-17. Further, as both of the Illinois Named Plaintiffs are former employees, Defendant claims that they cannot adequately represent current employees who may be harmed by this lawsuit insofar as they wish to maintain their current exempt status and the "flexibility" it affords them. Id. at 17.
Childress and Coleman are adequate representatives. Their claims share legal and factual predicates with those of the putative class and are typical of the claims raised by that class. The evidence sufficiently shows that they understand and are committed to this litigation, and are unencumbered by conflicts of interest with the class that they seek to represent. The Court rejects Defendant's premise that the potential desire of certain current employees to maintain their exempt status precludes a class action represented by persons who do not share that concern. "In any substantial class action there is always the possibility that some members of the class will take a position different from that of those who have assumed the laboring oar in a litigation. But such differences of opinion do not preclude a class action." Rosado v. Wyman, 322 F. Supp. 1173, 1193-94 (E.D.N.Y. 1970) (citing Eisen, 391 F.2d at 563 n.7). This does not create a conflict sufficient to render the named representatives inadequate even where, as here, opting out of the class does not protect those with divergent opinions because the litigation will necessarily impact their rights. Id. Adequacy is not undermined where the opposed class members' position requires continuation of an allegedly unlawful practice. Thus, the Illinois Named Plaintiffs satisfy Rule 23(a)(4). Additionally, Nichols Kaster, PLLP is clearly competent to act as class counsel. See FED. R. CIV. P. 23(g)(1).
5. Rule 23(b)
Having satisfied the prerequisites for class certification, Plaintiffs now must satisfy Rule 23(b)(1), (2), or (3). FED. R. CIV. P. 23(b). They seek certification under Rule 23(b)(3), Pls.' Certification MOL at 30-34, and so must establish that: (1) common questions predominate over questions affecting individual plaintiffs; and (2) class resolution is the superior means of adjudicating the case. FED. R. CIV. P. 23(b)(3); Amchem, 521 U.S. at 615. The "predominance" requirement "is a more demanding criterion than the commonality inquiry under Rule 23(a)." Moore v. PaineWebber, Inc., 306 F.3d at 1252 (citing Amchem, 521 U.S. at 623); Ansoumana v. Gristede's Operating Corp., 201 F.R.D. 81, 89 (S.D.N.Y. 2001). To establish the predominance of common questions, "a plaintiff must establish that 'the issues in the class action that are subject to generalized proof, and thus applicable to the class as a whole, . . . predominate over those issues that are subject only to individualized proof.'" Wal-Mart Stores, Inc. v. Visa USA Inc., 280 F.3d 124, 136 (2d Cir. 2001) (quoting Rutstein v. Avis Rent-A-Car Sys., Inc., 211 F.3d 1228, 1233 (11th Cir. 2000)). The predominance inquiry "should particularly 'focus on the liability issue . . . and if the liability issue is common to the class, common questions are held to predominate over individual questions.'" Bolanos, 212 F.R.D. at 148 (quoting Dura-Bilt Corp. v. Chase Manhattan Corp., 89 F.R.D. 87, 93 (S.D.N.Y. 1981)).
Plaintiffs must additionally demonstrate that a class action is the superior mechanism for the litigation. Factors relevant to this showing include: (1) the interest of the members of the class in individually controlling the prosecution or defense of separate actions; (2) the extent and nature of any litigation concerning the controversy already commenced by or against members of the class; (3) the desirability or undesirability of concentrating the litigation of the claims in the particular forum; and (4) the difficulties likely to be encountered in the management of a class action. FED. R. CIV. P. 23(b)(3).
Plaintiffs fail to meet these standards. First, their proposed class puts at issue between six and nine job tiles, see Welker-Finney Decl. ¶¶ 9-10; Havette Decl. ¶ 3, which show variation even by reference to the broad outlines found in the job descriptions, Srey Aff. Exs. D-E. None of the cases relied upon by Plaintiffs in support of certification involve so many job categories. See Damassia, 250 F.R.D. 152 (certifying class comprising a single job category); Lee v. ABC Home & Carpet, 236 F.R.D. 193 (S.D.N.Y. 2006) (same); Scott, 210 F.R.D. 261 (single job category with two subcategories); Ross, 2010 WL 3980113 (certifying two exempt job categories); Krzesniak v. Cendant Corp., No. 05-05156, 2007 WL 1795703 (certifying class comprising only one of two proposed job categories); Nerland v. Caribou Coffee Co., Inc., 564 F. Supp. 2d 1010 (D. Minn. 2007) (one category); but see Wang, 231 F.R.D. 602 (certifying a diverse class inclusive of multiple non-exempt job categories and arguably exempt reporters and account executives).*fn16
Next, and more importantly, even if the Court recognized only the overlap in the job descriptions, "[w]hether an employee is exempt is determined by the employees actual work activities, not by the employer's characterization of those activities through a job title or job description." Cooke, 993 F. Supp. at 61. Plaintiffs argue that despite this fact, "[c]courts routinely certify misclassification cases like this one," and "[i]n overtime cases like this, the predominance factor is easily met." Pls.' Certification Mem. at 26, 32. This is a gross overstatement of the law. See Vinole v. Countrywide Home Loans, Inc., 571 F.3d 935, 946 n.13 (9th Cir. 2009). First, numerous courts considering certification in overtime cases reach exactly the opposite conclusion. See, e.g., Edwards, 268 F.R.D. 181 (S.D.N.Y. 2010); Myers, 2007 WL 2126264, at * 4-6; Diaz, 2005 WL 2654270 (denying certification for lack of commonality without reaching predominance inquiry); Deboissiere, 2010 WL 4340642, at *3-4; Vinole v. Countrywide Home Loans, Inc., 246 F.R.D. 637 (S.D. Cal. 2007), aff'd 571 F.3d at 935; Weigele v. FedEx Ground Package Sys., Inc., 267 F.R.D. at 622; Campbell, 253 F.R.D. 586; Jimenez v. Domino's Pizza, 238 F.R.D. 241, 251 (C.D. Cal. 2006); Morisky, 111 F. Supp. 2d 493; Dunbar, 47 Cal. Rptr.3d 83. Second, none of the cases Plaintiffs cite for support involve the learned professional exemption defense that Defendant employs, nor a class of persons presumptively covered by that exemption.*fn17
Critical to the applicability of the professional exemption are considerations of what activities a nurse engages in, whether such work requires advanced knowledge in a field of science or learning, what guidelines or tools a nurse employs, how often she consults them, and in what manner she does so. See 29 C.F.R. § 541.301(a); 29 C.F.R. § 541.704. As noted, the record shows important variation on these issues. The additional considerations of the administrative exemption also factor in as an alternative basis for the exemption. See Def.'s Il. MOL at 15; see generally Pls.' Certification Mem. These include, "the relative importance of the exempt duties as compared with other types of duties; the amount of time spent performing exempt work; the employee's relative freedom from direct supervision." 29 C.F.R. § 541.700(a). Here too, the record evinces some variation. Under these circumstances, individualized inquiries would be necessary to determine the correct categorization of each nurse subsumed within the proposed class. See Vinole, 571 F.3d at 945 (noting that analysis of exemptions under the FLSA is a fact-intensive inquiry); see also Johnson v. WellPoint, No. 1:06-CV-2430 at 2-3, n.3 (N.D. Ga. Mar. 30, 2009) (Dkt. No. 204-10) (finding immaterial the deposition testimony of WellPoint nurses taken in prior case brought against WellPoint, see Morrow v. Unicare, No. 1:04-CV-1774 (N.D. Ga. 2006) (Dkt. No. 201-10), because those plaintiffs held different job titles (Nurse Case Managers) from some of the plaintiffs in the Johnson case, and because the key question of whether exemption was proper requires an analysis of the job duties of the Johnson plaintiffs with particular emphasis on the discretion and judgment that they exercised).
Plaintiffs argue that the role of commonly applicable procedures and tools, such as the Milliman Guidelines, on nurses' discretion predominate over individual concerns. This is incorrect. The evidence shows that nurses employ different tools in different combinations and consult them with varying frequency depending upon the work each performs. Compare, e.g., Clay Dep. (Dkt. NO. 214-14) at 56-57 (only used Milliman) and Greenberg Dep. (Dkt. No. 214-15) at 29:15 (case management nurse who "used Milliman for everything") with Marchese Dep. (Dkt. No. 214-15) at 42 (commercial group medical management nurses "don't use the guidelines as much" as other departments); and Parisi Dep. (Dkt. No. 215-15) at 29 (used Milliman and NICU guidelines); id. at 81 (describing the training she provided as a Senior Case Management Nurse in the Retrospective Claims Unit as requiring her to explain the different guidelines nurses should use in different circumstances); Kennedy Dep. (Dkt. No. 204-14) at 16:14-16 ("we use . . . many different sets of guidelines); Sager Dep (Dkt. No. 214-15) at 49-51 (Nurses in Nation Accounts department do not use Milliman for concurrent reviews and can authorize a requested benefit even if it does not meet the guidelines);*fn18 cf. Edwards, 268 F.R.D. at 187 (neither commonality nor predominance demonstrated by uniform training material without evidence demonstrating that company used the training materials in a common manner). Moreover, even if all nurses in the proposed class used the Milliman Guidelines, this would not dispense with the need for individualized inquiries. The Regulations specifically note that reliance upon manuals does not, in itself, preclude exemption. 29 C.F.R. § 541.704. The Milliman Guidelines explicitly state that "[u]se of the Guidelines requires, and never replaces, clinical judgment" and that "[p]rofessional medical judgment is required in all phases of the health care delivery and management process that should include consideration of the individual circumstances of any particular patient. These Guidelines are not intended as a substitute for this important professional judgment." Milliman Care Guidelines: Inpatient and Surgical Care, 8th ed. (Dkt. No. 216-4) at 1, viii. Thus, the pertinent questions of whether, in the duties performed by each nurse, advanced learning is required, and what, if any, avenues for independent judgment and discretion are left open, can be answered only through fact-intensive investigations.
The record evinces differences in opinion as to whether the duties performed actually require the advanced knowledge possessed by an RN. Compare, e.g., Coleman Decl. ¶ 15; Childress Decl. ¶ 15 with Gibbs Decl. (Dkt. No. 214-4) ¶ 7; Nieweglowski Decl. ¶ 9. This variance may simply result from differing subjective assessments, or it may result from the differing demands faced by nurses performing different tasks. Certainly the job descriptions suggest varying levels of complexity in work performed by different grade nurses. The deposition testimony and declarations further indicate that this may be the case.
Finally, the fact that WellPoint uniformly exempts all persons in the proposed class without itself undertaking an individualized assessment of the duties such persons performs does not mean that common issues predominate. The existence uniform exemption does not relieve the Court from inquiring how individual employees actually spend their time, and therefore such a "policy says little about the main concern in the predominance inquiry: the balance between individual and common issues." In re Wells Fargo , 571 F.3d at 959 (9th Cir. 2009); see also Myers, 2007 WL 2126264, at * 5, 7; Edwards, 268 F.R.D. at 184; Vinole, 571 F.3d at 946-47 (9th Cir. 2009); Weigele, 267 F.R.D. at 622.
Plaintiffs overemphasize the holding in Wang, 231 F.R.D. 602 to suggest that WellPoint's uniform exemption of all putative class nurses is proof that the duties performed by these individuals are largely uniform and supports certification. See Pls.' Certification MOL at 27, 32. In Wang, the court ruled that "[d]efendant cannot, on the one hand, argue that all reporters and account executives are exempt from overtime wages and, on the other hand, argue that the Court must inquire into the job duties of each reporter and account executive in order to determine whether that individual is 'exempt.'" 231 F.R.D. at 613. The Ninth Circuit has since found that "the rule espoused in Wang has little justification," In re Wells Fargo, 571 F.3d at 958, and held that a "blanket application of exemption status, whether right or wrong, is not  a rule" capable of "facilitat[ing] common proof on otherwise individualized issues. . . . Whether such a policy is in place or not, courts must still ask where the individual employees actually spent their time." Id. at 959. As such, a "uniform exemption policy says little about the main concern in the predominance inquiry: the balance between individual and common issues." Id.; see also Campbell, 253 F.R.D. at 603 (A uniform exemption policy "does not eliminate the need to make a factual determination as to whether class members are actually performing similar duties."). This Court adopts the Ninth Circuit's reasoning in this respect.
Finally, Plaintiffs cite Iglesias-Mendoza, 239 F.R.D. at 373, for the proposition that, despite variation in duties of representatives and persons across a class, the question of whether overtime pay was wrongfully withheld is "about the most perfect question for class treatment." Pls.' Certification Mem. at 32. This statement was made on fundamentally different facts than those presented here. In Iglesias-Mendoza, the class consisted of individuals employed by defendant as poultry workers in facilities across the state. The court found that the fact that some putative class members "worked with one kind of animal while other class members worked with another kind of animal, or that the named plaintiffs worked on feeding while other class members worked on slaughtering or packaging, is not a distinction that makes a difference." Id. at 371. By contrast, where the duties at issue go directly to key aspects of the exemption, those differences are of utmost significance to the ultimate question of whether each employee's exemption was proper. See Johnson v. WellPoint, No. 1:06-CV-2430 at 42-43 (finding issues of triable fact as to whether WellPoint nurses exercised discretion and judgment and whether they required advanced medical knowledge to understand the clinical information they collected and use the guidelines effectively). In such circumstances, individual issues predominate and a class action cannot be maintained.
Plaintiffs also fail to meet the second prong of Rule 23(b)(3), that a class action be superior to other available methods of adjudicating the issues. Because individualized proof is required to determine the correctness of Defendant's categorizing putative class members as exempt, a class action is not a superior mechanism for adjudicating their claims. See Dunnigan, 214 F.R.D. at 142 (where the court would be required to conduct a series of mini-trials in order to determine whether each putative class member is entitled to relief, "a class action is not a feasible, let alone superior, method for the fair, efficient, and manageable adjudication of the putative class's claims for interest.") (citation omitted); see also FED. R. CIV. P. 23(b)(3)(D).
C. California Rule 23 Class
Maurice Billman and Karen Hawkins (collectively, "the California Named Plaintiffs") seek certification of a Rule 23 class defined as "all persons who worked for Defendant as a utilization review nurse, case management nurse, medical management nurse, or other job titles performing substantially similar job duties in the state of California at any time from four years prior to the filing of this Complaint to the entry of judgment in the case."*fn19 Am. Compl. ¶ 34. On behalf of themselves and this putative class, the California Named Plaintiffs seek redress for what they allege are Defendant's violations of the California Labor Code §§ 510 and 1198, and California Wage Order No. 4 (8 C.C.R. § 1140, as amended); California Labor Code §§ 226 and 1174, and the California Wage Orders; California Labor Code §§ 201, 202, and 203; the California Unfair Competition Law set forth in the Business and Professions Code § 17200 et seq. Id. ¶ 36.
Maurice Billman began working for Anthem, Inc. in July 1999 and, following Anthem's merger with WellPoint Health Networks, came to work for WellPoint in its Camarillo, California "state sponsored business" department. Billman Decl. (Dkt. No. 204-13) ¶¶ 2-3. From October 2005 to May 2008, Billman held the position of Medical Management Nurse Senior at WellPoint's Camarillo facility. Welker-Finney Decl. (Dkt. No. 198-3) ¶ 11. Billman's account of his duties and experience at WellPoint mirrors that of Coleman and Childress. Billman Decl. Billman, who suffered from sleep apnea, was terminated in May 2008 for sleeping on the job. Framptom Dep. (Dkt. No. 198-1, Ex. B) 61:10-15, Ex. C. He subsequently sued WellPoint for disability discrimination. Mem. in Supp. Mot. to Deny Ca. Class at 8. That claim appears to have been resolved in 2009. Billman Second Decl. (Dkt. No. 213-8) ¶¶ 4, 6.
Beginning in September of 2000, Karen Hawkins acted as a Case Manager within WellPoint's Utilization Management department in WellPoint's Camarillo, California location. In May 2004, she changed positions, acting as Nurse Medical Management Senior for the Prior Authorization department in the State Sponsored Business unit, also in Camarillo. She switched positions again in October 2006 to work as a Medical Management Nurse Senior in the Specialty Pharmacy Medical Management department in WellPoint's Newbury Park and Camarillo, California locations. She retained this position, with a brief stint as Medical Management Lead in the same department until she resigned in April 2009. Hawkins' account of her experience at WellPoint, which she provides by way of declaration, mirrors those of the other Named Plaintiffs in all relevant respects. Hawkins Decl. She subsequently filed a disability discrimination clam against WellPoint. Hawkins Decl. (Dkt. No. 204-13) ¶ 2; Hawkins Second Decl. (Dkt. No. 213-8) ¶¶ 4-5; Sparks Decl. (Dkt. No. 198-7, Ex. 12) ¶¶ 15-22; Gibbs Decl. (Dkt. No. 198-7, Ex. 8) ¶ 12.
The Court's analysis of the proposed California class tracks, albeit inexactly, the foregoing analysis of the proposed Illinois class. The demands of Rule 23 do not change, though variations in the relevant state law and among the named representatives, as well as Defendant's reliance upon California's administrative rather than professional exemption, force some additional discussion.*fn20
Defendant acknowledges that the California class is sufficiently numerous for Rule 23 certification. Mot. to Deny CA Class at 2, 5.
One of the key common legal issues shared by members of the proposed Illinois class is not applicable to the proposed California class. Under California law, there is no presumption that registered nurses are exempt from the overtime pay requirements. See IWC Wage Order 4-2001(3)(f). Thus, there is no common question as to whether such a presumption applies where such nurses do not provide direct medical care. Nevertheless, all putative California class members share the salient factual predicate of being employed as nurses but not providing direct medical services. That fact holds relevance as it is probative of the duties actually performed and relates to the issue of whether they perform "work along specialized or technical lines requiring special training, experience, or knowledge." See IWC Wage Order 4-2001(1)(A)(2). Other shared legal and factual issues also exist that satisfy Rule 23(a)(1).
As with the proposed Illinois class, each member of the California class raises the same broad claim: his or her exemption from overtime pay requirements is improper. As with the Illinois class, under California law, the answer to this question requires looking into the duties each putative class member performed. See IWC Wage Order 4-2001(1)(A)(2); CAL. LAB. CODE § 515(a). And,
while the common job descriptions do not substitute for that inquiry, it is common proof that is probative of what those duties entailed. Similarly, the various guidelines used by putative class members and the corporate policies to which putative class members are subject present shared issues. Another issue common across the class is whether Defendant complied with its record keeping and wage statement obligations under state law. See CAL. LAB. CODE § 226. In sum, Plaintiffs satisfy Rule 23(a)(2).
The California Named Plaintiffs' claims are typical of those of the proposed class and satisfy the Rule 23(a)(3) prerequisite. The California Named Plaintiffs each allege claims in which the above-noted common issues factor with the same degree of centrality as those of the putative class.
4. Adequate Representation
Defendant challenges the adequacy of the California Named Plaintiffs. See Mem in Supp. Mot to Deny Ca. Class at 18-20. In addition to repeating arguments disposed of in the proposed Illinois class analysis, Defendant asserts that the discrimination lawsuits that the Named California Plaintiffs have against WellPoint may distract them from vigorously defending the rights of putative class members and divulge a conflict with those who are happy to work at WellPoint. Id. at 20. This arguments is without support. There is no indication that the California Named Plaintiffs' lawsuits will affect their attention and diligence in this matter. Billman's suit has been resolved and Hawkins attests to her intention to vigorously prosecute this matter. The Named California Plaintiffs satisfy Rule 23(a)(4).
5. Rule 23(b)(3)
The same considerations leading to the Court's finding a lack of predominance of common issues with regard to the Illinois class, apply with greater force to the California class. Under California law, the administrative employee exemption applies where 50% or more of an employee's time is spent on exempt activities. See IWC Wage Order 4-2001(1)(A)(2)(f) ("The work actually performed by the employee during the course of the workweek must, first and foremost, be examined and the amount of time the employee spends on such work . . . ."); Ramirez, 20 Cal. 4th 785 (1999) (California law "requires only more than 50 percent in exempt activities in order to qualify" for exemption). That California law requires a quantitative analysis of an employee's duties, rather than the qualitative analysis associated with the federal regulations to determine the applicability of the exemption, see Ramirez, 20 Cal. 4th at 797-98, reinforces the conclusion that Rule 23(b)(3) is not met here. The (in)correctness of putative class members' designation as exempt can only be determined through individual inquiries investigating the amount of time each member spent on exempt activities; these fact intensive inquiries will overwhelm the issues common to the class. See Vinole, 246 F.R.D. 637, 641, aff'd 571 F.3d 935; Weigele, 267 F.R.D. at 622 (where employees perform numerous tasks and spend varying degrees of time on each, individualized inquiries are necessary to determine the appropriateness of exemption status, making the individual issues predominate over those that are common across the proposed class); Jimenez, 238 F.R.D. at 251 n.9 ("the question presented here is not whether the tasks performed are exempt but rather how much time is spent on each task, which is necessarily an individualized inquiry"); Campbell, 253 F.R.D. 586. Under these circumstances, the predominance criterion of Rule 23(b)(3) is unmet, and class certification is not warranted.
Based on the foregoing discussion, it is hereby ORDERED, that Plaintiffs' Consolidated Motion for Rule 23 class certification (Dkt. No. 204) is DENIED; and it is further ORDERED, that Defendant's Motions to deny class certification of a New York class (Dkt. No. 197); a California class (Dkt. No. 198); and an Illinois class (Dkt. No. 200) are GRANTED; and it is further ORDERED, that the Clerk serve a copy of this Order on the parties. IT IS SO ORDERED.
Albany, New York