Jacob v. Duane Reade, Inc.
2013 U.S. Dist. LEXIS 111989
S.D.N.Y.2013Background
- Plaintiffs (Duane Reade assistant store managers, "ASMs") sued for unpaid overtime under the FLSA and New York Labor Law, asserting company-wide misclassification as exempt.
- The court previously certified a NYLL class under Rule 23; Outten & Golden et al. were appointed class counsel.
- After the Supreme Court decided Comcast v. Behrend and vacated a Seventh Circuit certification in RBS Citizens, Duane Reade moved for reconsideration seeking decertification.
- DR argued Comcast requires a classwide damages model tied to liability and that individualized damages (different pay formulas for different ASMs) defeat predominance.
- Plaintiffs urged that Comcast is an antitrust-specific decision and alternatively asked for liability-only certification under Rule 23(c)(4).
- The court concluded common liability questions predominate but that individualized damages (standard, fluctuating-workweek, and "hybrid" ASMs; week-by-week rate issues) require individual proceedings, so it retained liability certification and decertified damages.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does Comcast require decertification because damages cannot be proven classwide? | Comcast is antitrust-focused and inapplicable; damages can follow liability or be calculated from payroll records. | Comcast requires a damages model tied to liability; individualized damages for ~750 ASMs defeat predominance. | Comcast requires linkage of liability and damages, but does not forbid liability-only certification; class remains certified for liability but decertified for damages. |
| May the court certify liability only under Rule 23(c)(4) when damages are individualized? | Yes — liability can be tried classwide and damages determined individually after a class liability finding. | No — individualized damages overwhelm common issues and preclude meaningful class adjudication. | Yes — Rule 23(c)(4) is appropriate here: certify liability class; reserve/decertify damages for individual resolution. |
| Do individualized pay formulas (regular rate, FWW, hybrid) prevent classwide proof of damages? | Plaintiffs contend regular-rate calculation is objective and manageable classwide using records. | DR shows multiple ASM subgroups and week-by-week fluctuations making damages individualized and requiring mini-trials. | Held that subgroup distinctions and week-by-week FWW calculations make damages individualized; classwide damages model is not feasible. |
| Does Dukes invalidate certification here or require a different commonality analysis? | Plaintiffs: Dukes requires a rigorous inquiry but facts here differ from Wal-Mart; common questions still produce common answers. | DR: Dukes applies to wage-and-hour classes and warrants reconsideration. | Dukes applies, but court’s rigorous commonality analysis still supports liability certification; Dukes does not mandate decertification of liability here. |
Key Cases Cited
- Comcast Corp. v. Behrend, 133 S. Ct. 1426 (2013) (class certification requires a damages model consistent with the liability theory)
- Wal-Mart Stores, Inc. v. Dukes, 131 S. Ct. 2541 (2011) (commonality requires a rigorous analysis; trial-by-formula and individual defenses limit (b)(2) classes)
- Amgen Inc. v. Connecticut Retirement Plans & Trust Funds, 133 S. Ct. 1184 (2013) (predominance focuses on common questions provable through classwide evidence)
- Leyva v. Medline Industries, Inc., 716 F.3d 510 (9th Cir. 2013) (distinguishes Comcast where payroll/timekeeping records allow classwide damages calculations)
- In re Whirlpool Corp. Front-Loading Washer Products Liability Litig., 678 F.3d 409 (6th Cir. 2012) (upheld liability-only class certification and discussed bifurcation of damages; considered in light of Comcast)