Good news for Chinese Daily News when Ninth Circuit vacates certification under 23(b)(2), remands for further review of 23(b)(3) certification


The long-running saga of Wang v. Chinese Daily News, Inc. took its latest turn today, when the Ninth Circuit, on remand from the United States Supreme Court, issued the most decision in Wang v. Chinese Daily News, Inc. (9th Cir. Mar. 4, 2013).  The Ninth Circuit reversed various aspects of the District Court's certification order after applying Wal-Mart Stores, Inc. v. Dukes, 131 S. Ct. 2541 (2011) to the District Court's decision.

First, the Court vacated the District Court's Rule 23(a)(2) analysis and directed the District Court to conduct the rigorous analysis required by Wal-Mart:

We vacate the district court’s Rule 23(a)(2) commonality finding and remand for reconsideration in light of Wal-Mart. On remand, the district court must determine whether the claims of the proposed class “depend upon a common contention . . . of such a nature that it is capable of classwide resolution — which means that determination of its truth or falsity will resolve an issue that is central to the validity of each one of the claims in one stroke.” Wal-Mart, 131 S. Ct. at 2551. Plaintiffs must show “significant proof that [CDN] operated under a general policy of [violating California labor laws].” Ellis, 657 F.3d at 983 (quoting Wal-Mart, 131 S. Ct. at 2553 (alteration omitted)). However, plaintiffs need not show that every question in the case, or even a preponderance of questions, is capable of classwide resolution. So long as there is “even a single common question,” a would-be class can satisfy the commonality requirement of Rule 23(a)(2).

Slip op., at 10.

Next, the Court quickly concluded that the monetary relief sought by the plaintiffs was not "incidental."  The Court reversed the District Court's order certifying the class under Rule 23(b)(2).

Finally, the Court remanded for further consideration as to whether certification was warranted under Rule 23(b)(3):

For two reasons, we remand to the district court for reconsideration of the propriety of class certification under Rule 23(b)(3). First, the district court’s conclusion that common questions predominate in this case rested on the fact, considered largely in isolation, that plaintiffs are challenging CDN’s uniform policy of classifying all reporters and account executives as exempt employees. See Wang, 231 F.R.D. at 612–13. In two recent decisions, we criticized the nature of the district court’s Rule 23(b)(3) predominance inquiry in this case. See In re Wells Fargo Home Mortg. Overtime Pay Litig., 571 F.3d 953, 958–59 (9th Cir. 2009); Vinole v. Countrywide Home Loans, Inc., 571 F.3d 935, 944–48 & n.14 (9th Cir. 2009). We observed that the district court in this case “essentially create[d] a presumption that class certification is proper when an employer’s internal exemption policies are applied uniformly to the employees.” In re Wells Fargo Home Mortg. Overtime Pay Litig., 571 F.3d at 958. We wrote that such a presumption “disregards the existence of other potential individual issues that may make class treatment difficult if not impossible.” Id. The main concern of the predominance inquiry under Rule 23(b)(3) is “the balance between individual and common issues.” Id. at 959. “[A] district court abuses its discretion in relying on an internal uniform exemption policy to the near exclusion of other factors relevant to the predominance inquiry.” Vinole, 571 F.3d at 946.

Slip op., at 13.  The Court also noted that Brinker impacted the analysis of meal period claims and required evaluation by the District Court.