Opinion
Case Number 01-10357-BC.
October 17, 2002
OPINION AND ORDER ADJUDICATING MOTION TO CERTIFY CLASS
The plaintiffs have filed an amended complaint alleging that the defendant failed to give the proper notice when closing its Oscoda, Michigan plant in violation of the Worker Adjustment and Retraining Act, 29 U.S.C. § 2101, et seq. (WARN Act), and now seek to certify the matter as a class action under Federal Rule of Civil Procedure 23. The Court scheduled a hearing on the motion for class certification for September 18, 2002 but the parties, having filed a stipulation to certify a class, did not appear. The Court scheduled a status conference for October 2, 2002, but the parties once again did not appear when they reached agreement on a facilitator to conduct settlement discussions. The proposed order submitted by the parties does not address all the issues pertinent to class certification, including notice to prospective class members. The Court, however, has an independent obligation to determine the propriety of proceeding as a class action, with or without the assistance of the parties, and will therefore do so now. See In re Amer. Med. Sys., 75 F.3d 1069, 1078-79 (6th Cir. 1996) (citing Gen. Tel. Co. v. Falcon, 457 U.S. 147, 161 (1982)) (holding that although the certification of a class lies within the sound discretion of the trial court, the Court must conduct a "rigorous analysis" to ensure that Rule 23's requirements have been met.).
According to the amended complaint, the named plaintiffs are former employees of Triad International Maintenance Corporation, (TIMCO), an aircraft repair station located on the site of the decommissioned Wurtsmith Air Force Base in Oscoda, Michigan. The plant employed over 400 workers before March 2001. On March 14, 2001, TIMCO laid off 197 workers without providing advance notice, and laid off 87 additional employees within thirty days thereafter. Some time after April 13, 2001, TIMCO terminated an additional 140 employees. The plaintiffs allege that this later group lost their jobs as a consequence of the March 14, 2001 lay-offs, as one would reasonably expect.
The WARN Act requires employers to give written notice at least sixty days in advance to each worker to each worker who will be or reasonable could be terminated as part of a plant closing or mass layoff. 29 U.S.C. § 2101(a)(1) 2102(a)(1). Employers with 100 or more employees who fail to comply with the Act's requirements can be held liable for up to sixty days pay and benefits for each affected worker. 29 U.S.C. § 2104. The WARN Act does not allow injunctive relief.
The named plaintiffs are former employees of TIMCO's Oscoda, Michigan plant who were either laid off on March 14, 2001 or within thirty days thereafter, or who were reasonably expected to and did lose their jobs after April 14, 2001 as a result of the decision to lay off employees on March 14, 2001. The proposed class would include all similarly situated former employees, but would exclude those former employees whom TIMCO offered to transfer to another plant within commuting distance of the closed plant within six months of their layoff, those who accepted a transfer to another TIMCO facility, those whom TIMCO rehired within six months of their layoff, those who voluntarily left TIMCO's employ, and those fired by TIMCO for reasons other than lack of work. According to interrogatory answers furnished by the defendant, the putative class totals 284 individuals.
According to Fed.R.Civ.P. 23, a matter may proceed as a class action in the name of representative parties if (1) the class is so numerous that joinder of all members is impracticable; (2) there are questions of law and fact common to the class; (3) the claims and defenses of the representative parties are typical of the claims and defenses of the class; and (4) the representative parties will fairly and adequately protect the interests of the class. Fed.R.Civ.P. 23(a). A class must meet all of the above prerequisites plus one of those listed in Fed.R.Civ.P. 23(b) to be certified. Sprague v. General Motors Corp., 133 F.3d 388, 397 (6th Cir. 1998).
Olden v. LaFarge Corp., 203 F.R.D. 254, 268 (E.D.Mich. 2001). The requirements of Rule 23(b) include, alternatively, the risk of separate actions resulting in " inconsistent or varying adjudications with respect to individual members of the class" or "adjudications with respect to individual members of the class which would as a practical matter be dispositive of the interests of the other members not parties to the adjudications," an opposite party acting toward the class is such a way as to render injunctive relief in favor of the class as a whole appropriate, and common questions of law and fact predominating such " that a class action is superior to other available methods for the fair and efficient adjudication of the controversy." Rule 23(b)(1)-(3).
The requirement of numerosity is not governed by any strict numerical test. Olden, 203 F.R.D. at 268. Factors to be considered include "class size, ease of identification of members of the proposed class, geographic distribution of class members, and the ability of the class members to pursue individual actions." Id. (citing Krieger v. Gast, 197 F.R.D. 310, 314 (W.D.Mich. 2000)).
Courts have repeatedly found the numerosity requirement to be satisfied in WARN cases when more than 50 employees are alleged to have been wrongfully separated. See, e.g., Crux v. Robert Abbey, Inc., 778 F. Supp. 605 (E.D.N.Y. 1991) (holding class of at least 114 employees to be sufficiently numerous, and noting that WARN recoveries are usually too small to justify individual suits); Carrier v. JPB Enters., 206 F.R.D. 332, 334 (D.Me. 2002) (finding class of 123 individuals to be sufficient); Gomez v. Amer. Garment Finishers Corp., 200 F.R.D. 579, 582 (W.D.Tex. 2000) (350 employee-class plainly satisfies numerosity requirement).
In this Circuit, the requirements of commonality and typicality overlap. Olden, 203 F.R.D. at 269. Both issues will therefore be addressed under the heading of typicality. Id. Typicality requires a sufficient nexus "between the injury to the named plaintiff and the conduct affecting the class, so that the court may properly attribute a collective nature to the challenged conduct." Id. (citing Stout v. J.D. Byrider, 228 F.3d 709, 717 (6th Cir. 2000)).
A variance in damages does not destroy commonality or typicality provided that "the same event or practice or course of conduct gives rise to the claims of other class members," and if the named representatives' claims "are based on the same legal theory." Id. (citing Amer. Med. Sys., 75 F.3d at 1082). These requirements also tend to be easily established in WARN cases. Cruz, 778 F. Supp. at 612 (noting that all claims in the class naturally arise from their termination from the company on certain dates); Gomez, 200 F.R.D. at 582 (holding that "liability on behalf of the representative plaintiffs, once established, necessarily will establish liability for the benefit of the class also").
The final issue, adequacy of representation, inquires into the sufficiency both of the named class representatives and class counsel. Olden, 203 F.R.D. at 270. The inquiry into the fitness of the named representatives considers both the possibility of a conflict of interest and the ability of the representative to withstand the rigors of suit. Amer. Med. Sys., 75 F.3d at 1083. In appointing class counsel, the Court determines whether counsel are "qualified, experienced and generally able to conduct the litigation." Olden, 203 F.R.D. at 270 (citing Stout v. Byrider, 228 F.3d 709, 717 (6th Cir. 2000)). The absence of a conflict of interest and the adequacy of counsel do not, by themselves, give rise to a presumption that the named plaintiffs will properly represent the class. Berger v. Compaq Computer Corp., 257 F.3d 475, 481 (5th Cir. 2001).
In this case, the requirements of Rule 23(a) are all easily met. The size of the proposed class — approximately 280 employees — is sufficiently numerous, and there is no indication that these individuals are uniquely capable of bringing their own suits. See Crux, 778 F. Supp. at 612 (holding class of at least 114 employees to be sufficiently numerous, and noting that WARN recoveries are usually too small to justify individual suits); Carrier, 206 F.R.D. at 334 (finding class of 123 individuals to be sufficient).
Typicality and commonality are present, as the class members' claims are identical, stemming from the exact same series of incidents — layoffs. See Cruz, 778 F. Supp. at 612 (noting that all claims in the class naturally arise from their termination from the company on certain dates); Gomez, 200 F.R.D. at 582 (holding that "liability on behalf of the representative plaintiffs, once established, necessarily will establish liability for the benefit of the class also"). Furthermore, any variance in damages does not destroy commonality and typicality as to the adjudication of liability to the class as a whole. See Olden, 203 F.R.D. at 269. Finally, there is no indication that the class representatives are somehow unfit to serve, and plaintiffs' counsel have adequate experience with this sort of litigation and appear to have diligently prosecuted this case. Lead counsel claims to have prosecuted over thirty WARN cases over the last six years, and co-counsel also have significant experience in the field. There is also no indication that the named plaintiffs would have difficulty coping with the rigors of litigation. Of course, to the extent that any of these findings may later prove untrue, the Court retains the authority to decertify the class at any time prior to entry of judgment. At present, however, the Court concludes that Rule 23(a) has been likely satisfied.
Rule 23(b) condones two basic types of class actions. Mandatory classes, represented by subsections (b)(1) and (b)(2), are designed to represent classes with homogenous interests and do not require the Court to provide class members with notice and an opportunity to opt out of the class. Coleman v. Gen. Motors Acceptance Corp., 296 F.3d 443, 447 (6th Cir. 2002). Subsection (b)(3), however, is an "opt-out" class provision because all class members are required to receive notice and "the opportunity to decline to participate in the action." Id. at 448. Class members are given more options in (b)(3) class actions because they are assumed to have heterogenous interests. Id. Close scrutiny is required of any attempt to impose a mandatory class upon persons entitled to money damages. Id. Nonetheless, the Sixth Circuit has held that when the Court has a choice between a (b)(1) and a (b)(3) class action, the Court should favor the former to " avoid the inconsistent adjudication or compromise of class interests that might otherwise occur." First Fed. of Mich. v. Barrow , 878 F.2d 912, 919-20 (6th Cir. 1989). The named plaintiffs in this case have raised the possibility of a class certified pursuant to subsection (b)(1)(B), which governs " adjudications with respect to individual members of the class which would as a practical matter be dispositive of the interests of the other members not parties to the adjudications or substantially impair or impede their ability to protect their interests." Fed.R.Civ.P. 23(b)(1)(B). Many courts have been receptive to certifying WARN actions under this section. See Cruz, 778 F. Supp. at 612 (reasoning, somewhat tautologically, that the "adjudication of facts concerning lay-offs executed" by the defendant "will dispose of all of the classes' WARN claims"); Washington v. Aircap Indus. Corp., 831 F. Supp. 1292, 1294 (D.S.C. 1993) (possibility of issue preclusion, more than stare decisis, counsels in favor of (b)(1)(B) certification). Class actions under this section most commonly deal with the problem of numerous complainants seeking compensation from a limited fund, s ee Moore's Fed. Practice § 23.42[2][a], at 23-172 (1997), but have also been used in labor relations cases where the adjudication of the rights of some employees would inevitably determine the rights of others. Id. § 23.42[3][c], at 23-183. On the other hand, several courts, consistent with the statements in the treatise, have found that subsection (b)(1)(B) cannot be used in actions that seek only monetary damages, excepting, of course, limited fund cases. Id. § 23.42[4], at 23-185 (collecting cases).
Because WARN does not provide for injunctive relief, only monetary damages, a court accepting this proposition could not properly certify a WARN class under this provision. Cf. Gomez, 200 F.R.D. at 583 (denying certification under subsection (b)(2)). The Sixth Circuit has not interpreted this aspect of Rule 23(b)(1)(B).
There is no evidence or even an allegation in this case that the defendant is in financial jeopardy or that resolution of the claims must be relegated to a limited fund. Although a WARN action is properly viewed as a labor relations matter of sorts, the rights adjudicated are by definition those of former employees; the adjudication would have a finite effect on the determination of rights of others. This Court concludes that the nature of the relief sought and the circumstances of this case render inappropriate a certification of a mandatory class under Subsection (b)(1)(B).
Under subsection (b)(3), the Court may certify the class if common questions of law or fact "predominate" over other questions affecting individual members and if a class action would be a superior method of adjudicating the matter. Courts generally agree that this test is met in WARN cases. In Gomez, the Court found that (b)(3) certification was appropriate. Gomez, 200 F.R.D. at 584. Common questions predominated because all class members could would need to prove a violation of WARN to establish liability; in turn, the company sued can assert defenses, such as good faith, common to the entire class. Id. The calculation of back wages is a fairly simple matter that requires little individualized effort.
The Gomez Court did find that benefit decisions would require individual determinations, especially for individuals who had incurred substantial medical expenses. Id. Such difficult cases, however, are likely to be rare and can always be accommodated by opting out of the class. Id.
In this case, the common issue of finding liability based on a single series of events — the layoffs absent proper notice as alleged in the amended complaint — substantially predominates over the possibility that a few claimants may require particularly intricate benefits reimbursement calculations. The relatively small amount of damages likely to be awarded to each class member makes it highly unlikely that individual actions would be brought, and there is no indication that any such suits have been or will be filed. From an efficiency standpoint, the advantage of resolving the matter in one case rather than 280 is unquestionable. The Court has been presented with no manageability concerns.
Accordingly, it is ORDERED that the plaintiffs' motion for class certification is GRANTED.
It is further ORDERED that, pursuant to Federal Rule of Civil Procedure 23(b)(3), the following class is certified in this cause:
all former employees of Triad Intentional Maintenance Corporation (TIMCO) who were terminated on March 14, 2001, within thirty days after March 14, 2001, and after April 14, 2001, to the extent that their employment loss was reasonably expected to occur as a consequence of the decision to lay off employees on March 14, 2001. The Class excludes all employees: a) who were offered a transfer to another TIMCO facility within commuting distance of Oscoda, Michigan within six months of their layoff, b) who accepted a transfer to another TIMCO facility within six months of their layoff, c) who were rehired by TIMCO within six months of their layoff, d) who quit, resigned, retired or otherwise departed voluntarily, or e) who were terminated by TIMCO within six months of March 14, 2001 for reasons other than lack of work.
It is further ORDERED that counsel of record for the named plaintiffs in this matter, namely George B. Mullison, Esquire, Mark P. Fancher, Esquire, and John C. Lankenau, Esquire, shall be appointed counsel for the designated class.
It is further ORDERED that the plaintiffs shall, at their expense, provide appropriate notice to all class members via first-class mail and in conformance with the requirements of Rule 23 of the Federal Rules of Civil Procedure. The notice shall provide putative class members until January 6, 2003 to notify the counsel for the parties and the Court of their intent to opt-out of the proposed class. The notice shall also provide that class members wishing to enter their own appearance in the matter through counsel shall do so by that same date.
It is further ORDERED that the parties shall confer and forward to the Court by November 1, 2002 an agreed document that will be used to serve notice upon all members of the class. If the parties are unable to agree on the proper text for said notice, the parties shall forward the plaintiffs' proposed text along with a detailed list of objections from the defendant.
It is further ORDERED that the parties may raise their request to adjust the deadlines currently set forth in the Case Management and Scheduling Order at the status conference currently scheduled for December 16, 2002 at 3:00 PM.