Extensive expert report still fails to establish fairness and manageability for trial.
A growing number of courts are questioning classwide proof in off-the-clock cases, and those examining expert testimony in such matters are increasingly coming to the conclusion that they cannot be fairly managed for trial.
We’ve blogged this issue several times (see, for example, January 8, 2019 and April 9, 2018). Another interesting recent example is the decision of the California Court of Appeal in McCleery v. Allstate Insurance Co., Case No. B282851 (Cal. App. Dec. 14, 2018). The McCleery plaintiffs were property inspectors working for various insurers who had been classified as independent contractors. They alleged that they were, in fact, employees and that they had been deprived of the minimum wage, overtime, and meal and rest periods under California law.
The case looked like hundreds of others brought in California, but it did have the interesting combination of independent contractor and off-the-clock (actually timekeeping) issues. It was also unusual in that the trial court initially refused to certify the class but was reversed by the court of appeal to more carefully review the plaintiffs’ proposed trial plan.
On remand, the plaintiffs relied on an expert who conducted a number of surveys and double-blind studies of the putative class members. In a nutshell, the statistical expert had a team reach out to class members and pay them $100 to participate in a 45-minute interview about the time it took for them to do their work and the amounts they spent on business expenses. The studies also included questions designed to gauge the accuracy of the respondents’ time estimates. The studies were conducted in a way to keep the respondents’ identities secret, ostensibly to remove any possible fear of retaliation.
Importantly, the surveys asked few questions relating to the independent contractor issue and nothing that would reflect how much control the insurers had exercised over the inspectors’ work. It also failed to distinguish among the various defendants, apparently relying on the contention that they were all in cahoots together and should be treated as co-conspirators. As the defendants’ expert pointed out, the survey also relied heavily on the class members’ own precise recollection of events occurring as far back as 10 years before. Tellingly, when asked at his deposition about the accuracy of those memories, the plaintiffs’ expert stated, “I’m not here to testify about the accuracy of the survey respondents’ memories.”
The trial court rejected the expert’s conclusions on numerous grounds. Among those reasons was its failure to distinguish between the different experiences of different inspectors. It further did not consider differences between part-time and full-time inspectors. It seemed to avoid questions about who decided when or how long an inspector might schedule an inspection, perform work, or take a rest or meal period. It thus refused to certify the case.
The court of appeal noted that many of these issues come down to the question of predominance under federal Rule 23(b)(3) or its state law equivalent. In this case, however, the court noted that the real question was whether a class could be managed fairly and efficiently. Among the considerations was whether the proposed trial plan would include respect for the defendants’ affirmative defenses.
And that was where the expert’s report failed. The court of appeal specifically declined to opine on the merits of his survey (although many of its comments were critical of it), but rather found that it would not suffice as a trial plan. Among other problems the court noted was its failure to distinguish among the defendants and whether, in fact, the plaintiffs had actually worked any overtime for any one of them. Nor did it consider other places where the plaintiffs might have worked during the same time. The court was also critical of the expert’s use of anonymous surveys, as making them anonymous vitiated the ability to test their reliability and veracity.
The court of appeal thus affirmed the trial court’s refusal to certify the class.
The McCleery case highlights the problems with off-the-clock cases, issues that are even more complicated when independent contractor status is challenged as well. These issues almost inherently will devolve into the kinds of individual inquiries that make class action treatment unsuitable.
The bottom line:
Even with an expert, trial management issues may very likely derail off-the-clock class claims due to the differing experiences of individual class members.