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Roach v. T.L. Cannon Corp.

United States Court of Appeals, Second Circuit

February 10, 2015

MATTHEW ROACH, MELISSA LONGO, GARRETT TICHEN, CHRISTINA APPLE, Plaintiffs-Appellants,
v.
T.L. CANNON CORP., d/b/a Applebees, T.L. CANNON MANAGEMENT CORP., TLC WEST, LLC, TLC CENTRAL, LLC, TLC UTICA, LLC, TLC EAST, LLC, TLC NORTH, LLC, DAVID A. STEIN, individually and as Owner and Chairman of T.L. Cannon Corp. and as Director and Chairman of T.L. Cannon Management Corp., MATTHEW J. FAIRBARN, individually and as Owner and President of T.L. Cannon Corp. and as Director and Chief Executive Officer of T.L. Cannon Management Corp., JOHN A. PERRY, individually and as Vice-President and Director of Operations of T.L. Cannon Corp. and as President of T.L. Cannon Management Corp., Defendants-Appellees

Argued: September 8, 2014.

Appeal from the United States District Court for the Northern District of New York. No. 10-cv-591 -- Thomas J. McAvoy, Judge. Appeal from an order of the United States District Court for the Northern District of New York (McAvoy, Judge) denying class certification under Rule 23(b)(3) of the Federal Rules of Civil Procedure. We hold that Comcast Corp. v. Behrend, 133 S.Ct. 1426, 185 L.Ed.2d 515 (2013), does not require that damages be measurable on a classwide basis for certification under Rule 23(b)(3) . Since the district court denied class certification solely because it believed damages were not measurable on a classwide basis, we VACATE and REMAND.

SCOTT MICHELMAN, Public Citizen Litigation Group, Washington, DC, (J. Nelson Thomas, Michael J. Lingle, and Annette Gifford, Thomas & Solomon, LLP, Rochester, NY, Frank S. Gattuso and Dennis G. O'Hara, O'Hara, O'Connell & Ciotoli, Fayetteville, NY, Michael T. Kirkpatrick, Public Citizen Litigation Group, Washington, DC, on the brief), for Plaintiffs-Appellants.

CRAIG R. BENSON, Littler Mendelson, P.C. (Andrew P. Marks, Elena Paraskevas-Thadani, and Erin W. Smith, on the brief), New York, NY, for Defendants-Appellees.

Jamie G. Sypulski, Law Office of Jamie Golden Sypulski, and Douglas M. Werman, Werman Law Office, P.C., Chicago, IL, for the National Employment Lawyers Association as amicus curiae in support of Plaintiffs-Appellants.

Before: JACOBS and DRONEY, Circuit Judges; KAPLAN, District Judge.[*]

OPINION

Page 402

Droney, Circuit Judge :

This appeal presents the question of whether the Supreme Court's decision in Comcast Corp. v. Behrend, 133 S.Ct. 1426, 185 L.Ed.2d 515 (2013), overruled the law of this Circuit that class certification pursuant to Rule 23(b)(3) of the Federal Rules of Civil Procedure cannot be denied merely because damages have to be ascertained on an individual basis. The United States District Court for the Northern District of New York (McAvoy, J.) concluded that Comcast permits certification under Rule 23(b)(3) only when damages are measurable on a classwide basis, and denied Plaintiffs-Appellants' motion for class certification.

We hold that Comcast does not mandate that certification pursuant to Rule 23(b)(3) requires a finding that damages are capable of measurement on a classwide basis. Accordingly, we VACATE the order of the

Page 403

district court denying class certification, and REMAND.

BACKGROUND

Plaintiffs-Appellants (" Plaintiffs" ), four former employees at certain Applebee's restaurants owned and operated in upstate New York by T.L. Cannon Corp. (" Cannon" ), filed suit against Cannon in the United States District Court for the Northern District of New York.[1] The amended complaint alleged a collective action for violation of the Fair Labor Standards Act and a putative class action for violations of the New York Labor Law. Plaintiffs alleged that Cannon had a policy of not paying hourly employees an extra hour of pay when working a ten-hour work day as was then required by N.Y. Comp. Codes R. & Regs. tit. 12, § 137-1.7 (the " spread-of-hours" claim).[2] Plaintiffs also alleged that Cannon required its managerial staff to subtract pay for statutorily-mandated rest breaks that the employees did not actually take (the " rest-break" claim).[3]

Following discovery, Plaintiffs moved to certify subclasses corresponding to each New York Labor Law claim pursuant to Rule 23(b)(1) and Rule 23(b)(3) of the Federal Rules of Civil Procedure. With respect to Rule 23(b)(3), Plaintiffs argued that issues common to the question of liability predominated over any individual questions relating to damages. The district court referred Plaintiffs' motion to Magistrate Judge David E. Peebles, who issued a report and recommendation on March 5, 2013.

With respect to Plaintiffs' spread-of-hours claim, Magistrate Judge Peebles recommended that Plaintiffs' motion be granted in part. Magistrate Judge Peebles found that Plaintiffs had satisfied the Rule 23(a) prerequisites to class certification, but only with respect to minimum-wage employees employed between April 2005 and August 2010. Magistrate Judge Peebles also found that the common question of whether Cannon had a policy of depriving minimum-wage employees the extra hour of pay was subject to generalized proof that predominated over individual questions, thus warranting class certification under Rule 23(b)(3).

With respect to the rest-break claim, Magistrate Judge Peebles recommended that Plaintiffs' motion be denied. Magistrate Judge Peebles found that Plaintiffs had satisfied the commonality and typicality requirements of Rule 23(a), but that Plaintiffs could not satisfy the adequacy of representation requirement because three of the four Plaintiffs, when serving in a managerial capacity, had revised employee timecards to deduct pay for untaken rest breaks. Because Plaintiffs could not satisfy ...


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