Opinion
Civil Action No. 02-009, Section: 1/4.
July 27, 2004
ORDER AND REASONS
Plaintiffs have filed a motion to certify a class in this action brought pursuant to the Employee Retirement and Income Security Act ("ERISA"), the Louisiana Age Discrimination in Employment Act ("LADEA"), and Louisiana tort law. Plaintiffs also seek conditional certification as a collective action in order to pursue their federal Age Discrimination in Employment Act ("ADEA") claims.
The named plaintiffs in this action who seek to proceed individually and as representatives of the class are Deanna Dillon Baroni, Alberta Desselle Breecher, Yvonne L. Brown, Mary M. Miller, Noreen W. Johnson, Dolores B. Lewis, Gwendolyn M. Gabriel, Elveria B. Evans, Beverly F. Garcia, Theis P. Bacemin, Eula Jones, Charlotte M. Edwards, Carol Rogers, Linda Harper, Connie Nelson, and Victoria C. Sudkamp. Rec. Doc. Nos. 33 and 55. Plaintiffs, William Morris, Ann Glover, and Karen Walker are joined as individual claimants who do not seek to represent the class. Rec. Doc. No. 55.
Rec. Doc. Nos. 21 and 56.
Relevant Facts and Procedural History
Defendant, BellSouth Telecommunications, Inc. ("BellSouth"), operates several Directory Assistance ("DA") operator facilities in Louisiana and in other southern states. Prior to November 30, 2000, BellSouth employed sixty DA operators at a DA facility in Marrero, Louisiana. During the second quarter of 2000, BellSouth decided to close the Marrero DA operator office. The sixty DA operators employed at the Marrero office were notified on September 15, 2000, that the Marrero office would be closed effective November 30, 2000. The office was in fact closed on that date.All sixty of the DA operators employed at the Marrero facility were over forty years old and all of them had in excess of twenty-five years of BellSouth employment. They were given a number of job application and benefit options by BellSouth. Twelve DA operators bid on and received other non-DA operator BellSouth jobs in the New Orleans "exchange", i.e., in the New Orleans area. They had no break in service or loss of seniority and they retained all rights which they had pursuant to the collective bargaining agreement and employee benefit plans. Their BellSouth employment was never effectively terminated, i.e., they never left the BellSouth payroll.
Rec. Doc. No. 56, Exh. 1; Rec. Doc. No. 59, Exh. C-1.
Rec. Doc. No. 59, Exh. C.
Rec. Doc. No. 59, Exh. C.
Rec. Doc. No. 59, Exh. C.
Four of the sixty DA operators exercised the option of transferring as DA operators to the Bogalusa DA operator office and, because their BellSouth employment was also never terminated, they suffered no loss of collective bargaining agreement or pension benefit rights. None of the DA operators accepted a transfer to the Lake Charles DA office.
Rec. Doc. No. 59, Exh. C.
Forty-four of the DA operators were offered the option of entering the BellSouth "Partnership Job Bank". Of these, forty-three elected to enter the job bank which entitled them to severance pay. The amount of the severance pay depended upon the employee's job title and seniority. During the time they were in the job bank, the DA operators drew termination pay in bi-weekly installments although they were still BellSouth employees entitled to all employment fringe benefits. They continued to accrue seniority for pension purposes. They were also afforded the opportunity to bid on and seek jobs with BellSouth. Any employee whose eligibility to remain in the job bank expired and who was unable to obtain another BellSouth position was terminated. Such employees received their remaining severance pay in a lump sum.
Rec. Doc. No. 59, Exh. C.
Rec. Doc. No. 59, Exh. C.
In January, 2001, BellSouth decided to open a new DA operator facility in Hammond, Louisiana. On February 15, 2001, the former Marrero DA operators were first notified by letter from the Communication Workers of America ("CWA") union that BellSouth would open a Hammond DA office. A February 23, 2001, letter from the CWA explained to the former Marrero DA operators the options offered by BellSouth with respect to employment in the Hammond DA facility. On March 29, 2001, the Marrero DA operators were informed by a BellSouth letter of the opening of the Hammond DA office. On April 12, 2001, a meeting was held to advise all of the Marrero DA operators of the Hammond facility's opening and to provide information regarding the conditions that have to be met if one wanted to accept such employment. All of the Marrero DA operators, including the forty-three former DA operators in the job bank, were offered a job at the Hammond facility. Fourteen employees accepted that offer. With respect to those employees who took lump sum pensions or termination pay, BellSouth offered a number of options. Former Marrero DA operators who accepted other BellSouth employment were treated as if they never left the payroll. BellSouth offered relocation benefits to any employee electing to take a job at the Hammond facility.
Rec. Doc. No. 59, Exh. C.
Rec. Doc. No. 56, Exhs. 1 and 31.
Rec. Doc. No. 56, Exh. 32.
Rec. Doc. No. 56, Exh. 33.
Rec. Doc. No. 56, Exhs. 16 and 33.
Rec. Doc. No. 59, Exh. C, p. 3.
Rec. Doc. No. 59, Exh. C, p. 3.
Rec. Doc. Nos. 56, Exh. 33, and 59, Exh. C, pp. 2-3.
Rec. Doc. No. 59, Exh. C, pp. 2-3.
Rec. Doc. No. 56, Exh. 33.
Of the forty-three employees who entered the job bank and who did not accept a position in Hammond, twenty-two elected to take their BellSouth pension. Seven employees who entered the job bank neither took their pensions nor acquired another BellSouth position. These employees received their severance pay and their employment was terminated.
BellSouth DA operators participate in the BellSouth pension plan and they are fully vested in the funds earned in their plan after five vesting eligibility years. A DA operator who has accrued 30 years of employment has a fully vested service pension. An employee also attains vesting rights to a service pension if the employee is (a) at least fifty years old and has a minimum of twenty-five years of BellSouth employment, (b) at least fifty-five years old and has a minimum of twenty years of BellSouth employment, or (c) at least sixty-five years old and has a minimum of ten years of service. In addition to service pensions, vested employees are entitled to other retiree benefits such as medical and group life insurance coverage and discounted telephone service. Rec. Doc. No. 59, Exh. B.
Rec. Doc. No. 59, Exhs. C and C-1.
Sometime during the summer of 2001, but prior to the first week of September, 2001, Deanna Baroni ("Baroni"), one of the former Marrero DA operators, called all of her former co-workers at the Marrero office to inform them that she planned to see an attorney for the purpose of suing BellSouth and to determine if any of them were also interested in filing a lawsuit against their former employer. Baroni stated in her deposition that "[m]ost were interested" in filing a lawsuit in the summer of 2001.
Rec. Doc. No. 59, Exh. D, Baroni dep., p. 32.
Rec. Doc. No. 59, Exh. D., Baroni dep., p. 32.
On September 7, 2001, plaintiffs, Baroni and Alberta Deselle Breecher ("Breecher"), filed a lawsuit in the Twenty-Fourth Judicial District Court in Jefferson Parish alleging that defendant, BellSouth, discriminated against them on the basis of their age and terminated them in violation of the LADEA, LSA-R.S. 23:311, et seq. In their petition, plaintiffs claimed damages for themselves and for all plaintiffs similarly situated. BellSouth removed the action to this court on the basis of diversity jurisdiction as plaintiffs are Louisiana citizens and the defendant is a Georgia citizen.
Rec. Doc. No. 1, Exh. A.
Rec. Doc. No. 1, Exh. A, para. IX.
Rec. Doc. No. 1.
On November 2, 2001, more than three hundred days after she learned that the Marrero facility would be closing, but less than three hundred days after she learned of the opening of the Hammond facility, Baroni filed a charge of age discrimination with the EEOC. She is the only plaintiff who filed an administrative claim with the EEOC charging age discrimination.
Rec. Doc. No. 59, p. 26.
On December 22, 2001, plaintiffs, Baroni and Breecher, the only named plaintiffs, filed an amended petition in state court alleging that the defendant violated $510 of ERISA, 29 U.S.C. § 1001, et seq when they were terminated. The amended petition was removed on January 16, 2002, on the basis of federal question jurisdiction.
Rec. Doc. No. 3, Exh. A. The complaint also invokes § 502 of ERISA. § 502 of ERISA, 29 U.S.C. § 1132(a), provides a cause of action for participants or beneficiaries of welfare benefit plans to recover benefits due, enforce rights, or clarify rights to future benefits under the terms of employee welfare benefit plans. In their complaints, plaintiffs allege that the defendant interfered with their employee benefits rights in violation of § 510 of ERISA, 29 U.S.C. § 1140, which specifically incorporates § 1132.
Rec. Doc. No. 3.
On March 28, 2002, plaintiffs filed a second amended complaint adding ten additional plaintiffs, all Louisiana citizens, asserting the same causes of action and again seeking to proceed as a class action. On September 6, 2002, plaintiff filed a third amended complaint adding another seven plaintiffs, all Louisiana citizens, and adding an age discrimination claim pursuant to the ADEA, 29 U.S.C. § 621. On January 9, 2003, plaintiffs filed their fourth amended complaint seeking to exclude three formerly named plaintiffs as representatives of the class, but reserving their right to maintain their individual claims.
The additional named plaintiffs in the second amended complaint are Yvonne L. Brown, Mary M. Miller, Noreen W. Johnson, Dolores B. Lewis, Gwendolyn M. Gabriel, Beverly F. Garcia, Eula Jones, Charlotte M. Edwards, Elveria B. Evans, and Theis P. Bachemin. Rec. Doc. No. 13.
The additional named plaintiffs in the third amended complaint are Carol Rogers, Linda Harper, Bill Morris, Connie Nelson, Victoria C. Sudkamp, Ann Glover, and Karen Walker. Rec. Doc. No. 33.
Rec. Doc. No. 55. No evidence has been adduced indicating that any other former Marrero DA operator, other than those named in the instant complaint, have filed individual actions in any state or federal court seeking redress pursuant to ERISA, the ADEA, the LADEA or state tort law.
F.R.Civ.P. 23(a) ERISA
Plaintiffs allege that they "are similarly situated to those former and current employees of BellSouth Telecommunications, Inc. who were employed at the Marrero facility at the time of its closing." They seek to prosecute their federal ERISA claims as a class pursuant to Federal Rule of Civil Procedure 23(a) and (b). "The party seeking class certification has the burden of showing that the requirements for a class action have been met."Applewhite v. Reichhold Chemicals, Inc., 67 F.3d 571, 573 (5th Cir. 1995). "A district court must conduct a rigorous analysis of the rule 23 prerequisites before certifying a class." Castano v. American Tobacco Co., 84 F.3d 734, 740 (5th Cir. 1996) ( citing General Tel. Co. v. Falcon, 457 U.S. 147, 161, 102 S.Ct. 2364, 2372, 72 L.Ed.2d 740 (1982);Applewhite, 67 F.3d at 573)). "An action may proceed [as a class] only if the party seeking certification demonstrates that all four requirements of Rule 23(a) are met, and that at least one of the three requirements of Rule 23(b) are met." Vizena v. Union Pacific Railroad Co., 360 F.3d 496, 503 (5th Cir. 2004) ( citing F.R.Civ.P. 23(a-b);Amchem Products, Inc. v. Windsor, 521 U.S. 591, 614, 117 S.Ct. 2231, 138 L.Ed.2d 689 (1997)).The first F.R.Civ.P. 23(a) requirement is numerosity, i.e., plaintiff must prove that "the class is so numerous that joinder of all members is impracticable." In Zeidman v. J. Ray McDermott Co., 651 F.2d 1030 (5th Cir. 1981), the court explained that:
In order to satisfy his burden with respect to this prerequisite, a plaintiff must ordinarily demonstrate some evidence or reasonable estimate of the number of purported class members. [citation omitted]. However, this does not mean that the actual number of class members is the determinative question, for '(t)he proper focus (under Rule 23(a)(1)) is not on numbers alone, but on whether joinder of all members is practicable in view of the numerosity of the class and all other relevant factors." Philips v. Joint Legislative Committee, 637 F.2d 1014, 1022 (5th Cir. 1981). [other citation omitted]. Thus, a number of facts other than the actual or estimated number of purported class members may be relevant to the 'numerosity' question; these include, for example, the geographical dispersion of the class, the ease with which class members may be identified, the nature of the action, and the size of each plaintiff's claim. [citation omitted].651 F.2d at 1038. See also Mullen v. Treasure Chest Casino, 186 F.3d 620, 624-625 (5th Cir. 1999).
Plaintiffs bring this lawsuit pursuant to § 510 of ERISA, 29 U.S.C. § 1140. Section 510 prohibits an employer from discharge or discriminating against a pension participant "for the purpose of interfering with the attainment of any right to which such participant may become entitled under the plan." "To sustain a valid § 510 claim, an employee must show: (1) prohibited (adverse) employer action (2) taken for the purpose of interfering with the attainment of (3) any right to which the employee is entitled." Bodine v. Employers Casualty Co., 352 F.3d 245, 250 (5th Cir. 2003) ( citing Van Zant v. Todd Shipyards Corp., 847 F. Supp. 69, 72 (S.D. Tex. 1994)).
Section 510 of ERISA, 29 U.S.C. § 1140 provides that:
It shall be unlawful for any person to discharge, fine, suspend, expel, discipline, or discriminate against a participant or beneficiary for exercising any right to which he is entitled under the provisions of an employee benefit plan . . . or for the purpose of interfering with the attainment of any right to which such participant may become entitled under the plan . . . The provisions of section 1132 of this title shall be applicable in the enforcement of this section.29 U.S.C. § 1132 allows a person to file a civil action to enforce § 1140 rights. § 1132(g)(1) allows the court to award a reasonable attorney's fee and costs to either party.
"To recover under section 510, a plaintiff 'need not show that the sole reason for his termination was to interfere with pension rights; however, the plaintiff must show that the employer had the specific intent to violate ERISA.'" Hypes v. First Commerce Corp., 134 F.3d 721, 728 (5th Cir. 1988) ( quoting Olitsky v. Spencer Gifts, Inc., 964 F.2d 1471, 1478 (5th Cir. 1992) ( original quotation source omitted)).
There are sixty persons in the proposed class of BellSouth DA operators who were working at the Marrero DA facility at the time it closed. Defendant alleges that although sixty persons were terminated when the Marrero DA facility closed, there are actually less than sixty class members with respect to the ERISA claim because several putative class members were fully vested in their BellSouth service pensions at the time the Marrero facility was closed. The defendant argues that because they were fully vested in their service pensions, these putative class members should be excluded from the class.
See Rec. Doc. No. 59, Exh. C-1. See fn. 1. Two persons not included in the sixty person putative class list have joined the action as individual plaintiffs.
The Fifth Circuit has noted that "where the only evidence that an employer specifically intended to violate ERISA is the employee's lost opportunity to accrue additional benefits, the employee has not put forth evidence sufficient to separate that intent from the myriad of other possible reasons for which an employer might have discharged him." Clark v. Resistoflex Co., a Division of Unidynamics Corp., 854 F.2d 762, 771 (5th Cir. 1988). The Clark court, however, specifically did not reach the question of whether a fully vested pension plan participant fails to state a cause of action pursuant to § 510 if she is able to sustain her burden of proving that she was terminated for the purpose of interfering with her pension rights. At this stage of the proceedings, the putative class members who had vested BellSouth pension rights are to be counted in determining the number of potential plaintiffs in the proposed class.
The plaintiff in Clark alleged that he had been discharged in part because his employer "desired to prevent him from accruing enhanced benefits under the pension plan in which he was vested." The court stated that:
This appeal raises the question of whether an employee, fully vested in a retirement plan, can state a claim under section 510 of ERISA by demonstrating that the employer took action calculated to prevent accrual of additional retirement benefits under the vested plan. The district court answered negatively and further concluded that, assuming arguendo the validity of such a claim, Clark has failed to raise a fact issue as to whether the motive for his discharge was to interfere with the attainment of enhanced pension benefits.854 F.2d at 770.
The Fifth Circuit declined the defendant's invitation to hold that § 510 provides a cause of action only for employees whose pension rights have not vested and that it is unavailable to those with vested pension rights who claim a loss of opportunity to enhance those rights. Id. at 770. The court affirmed the "dismissal of Clark's ERISA claim as factually insufficient, without reaching whether Clark's allegations, if true, state a cause of action." Clark, 854 F.2d 762, 764 (5th Cir. 1988).
BellSouth suggests that those putative class members who transferred to other BellSouth positions should also be excluded from the numerosity calculation. The former Marrero DA operators who accepted other employment with BellSouth, whether by transfer, through the job bank, or by job offer at the Hammond DA operator facility, lost no seniority or job benefits. They continued to accrue time toward their pension vesting. Under such circumstances, whether or not their termination as Marrero DA operators interfered with the attainment of any employment rights or benefits is questionable. Of the twenty-nine employees who fit into this category, only one is a named plaintiff. If these twenty-eight employees are deleted from the proposed class, the number of putative class members would be reduced to thirty-two. If those transferring to other BellSouth jobs are excluded, there remain only fifteen persons in the putative class in addition to the named plaintiffs.
Of the twenty-nine persons in the putative class who transferred to other BellSouth positions, only one, William Morris, joined the lawsuit individually.
As stated, other factors to be balanced in determining numerosity include geographic dispersion and ease of identification. All sixty of the putative class members have been readily and easily identified. Plaintiff has not demonstrated that they are geographically dispersed; indeed, of the sixty, seventeen of the proposed class members took positions in Hammond, Louisiana, which is located within this judicial district. Of the sixteen proposed class members whose addresses are identified, fifteen reside within this district. There is no indication that communication with the class members would be difficult or cumbersome as evidenced by the fact that Baroni telephoned every one of the proposed sixty class members prior to the time she filed this lawsuit.
Rec. Doc. No. 59, Exh. C-1.
Rec. Doc. No. 59, Exh. C-1.
Rec. Doc. No. 59, Exh. D, Baroni dep., p. 32.
Another consideration which bears on the numerosity factor is the size of each putative class member's claim. The claim's size is dependent upon the putative class member's employment circumstances. For example, was the member fully vested in her pension? If the member was not fully vested, how many years until she attained full vesting? If the member accepted another BellSouth position, what benefits did she actually lose as a result of being terminated when the Marrero facility closed? Neither plaintiffs nor defendant has projected or estimated the amount of a typical putative class member's claim, perhaps due to the fact that there would be a huge divergence in the amount depending upon each person's individual circumstances.
Numerosity is established by a showing that joinder of all the prospective class members is impracticable. Upon weighing all of the factors outlined above, the Court finds that numerosity is lacking because joinder of all class members in this action is not impracticable. Because plaintiff has failed to establish numerosity, one of the prerequisites of Rule 23(a), the ERISA action may not proceed as a class.
F.R.Civ.P. 23(a). In Garcia v. Gloor, 618 F.2d 264 (5th Cir. 1980), the Fifth Circuit affirmed the district court's denial of class certification to a proposed class of thirty-one, observing:
Only thirty-one persons, those Gloor employees who were Hispanic, were affected by the English-only rule. Their identity and addresses were readily ascertainable, and they all lived in a compact geographical area. The suggested class therefore failed to meet the elementary requirement that supports the whole theory of class actions [sic] representation by one person of a group so numerous that joinder in one suit would be impracticable.Id. at 267.
See Vizena, 360 F.3d at 503.
F.R.Civ.P. 23(b) Predominance and superiority
Notwithstanding the Court's finding that plaintiffs have not met their burden with respect to Rule 23(a), the Court will consider whether the proposed class meets F.R.Civ.P. 23(b)(3) class certification requirements. In Bell Atlantic Corp. v. ATT Corp., 339 F.3d 294 (5th Cir. 2003), the court summarized the Rule 23(b)(3) requirements as follows:
Beyond [the] four prerequisites of Rule 23(a), Rule 23(b)(3) demands of a party seeking class certification yet two further requirements, namely the burden of demonstrating both (1) that questions common to the class members predominate over questions affecting only individual members, and (2) that class resolution is superior to alternative methods for adjudication of the controversy. [Amchem Products, Inc. v. Windsor, 521 U.S. 591, 117 S.Ct. 2231, 2249, 138 L.Ed.2d 689 (1997)].Id. at 301.
"By inquiring into predominance, Rule 23(b)(3) thus tests 'whether the proposed classes are sufficiently cohesive to warrant adjudication by representation.'" Bell Atlantic, 339 F.3d at 301 ( quoting Alchem Products, 117 S.Ct. at 2249). "The standard for certification imposed by Rule 23(b)(3) is also more demanding than the commonality requirement of Rule 23(a), and as such, mandates caution, particularly where 'individual stakes are high and disparities among class members great.'" Bell Atlantic, 339 F.3d at 301-302 ( quoting Amchem Products, 117 S.Ct. at 2250). "To decide whether common issues predominate, the district court must consider how a trial on the merits would be conducted if a class were certified." Sandwich Chef of Texas, Inc. v. Reliance National Indemnity Ins. Co., 319 F.3d 205, 218 (5th Cir. 2003). "This entails identifying the substantive issues that will control the outcome, assessing which issues will predominate, and then determining whether issues are common to the class. Although this inquiry does not resolve the case on its merits, it requires that the court look beyond the pleadings to 'understand the claims, defenses, relevant facts, and applicable substantive law.'" O'Sullivan v. Countrywide Home Loans, Inc., 319 F.3d 732, 738 (5th Cir. 2003) ( quoting Castano, 84 F.3d at 744). "Such an understanding prevents the class from degenerating into a series of individual trials." O'Sullivan, 319 F.3d at 738.
With respect to the predominance factor, the plaintiffs' ERISA claims are a mixed bag. As to the liability questions, common issues predominate over questions affecting individual members. Such liability inquiries include whether defendant's decision to close the Marrero DA office and to open a Hammond DA office a few months later was motivated by an intent to interfere with the attainment of plaintiffs' employee benefit rights. The employee rights of all of the former Marrero DA operators were uniformly affected by BellSouth's determination that the Marrero office should be closed.
Individual issues predominate, however, with respect to damages. As previously noted, those employees who accepted positions as DA operators at BellSouth's Hammond facility lost no employee benefits or rights. The same is true of those employees who accepted positions at other BellSouth facilities. Those employees who were already vested in their service pensions will certainly have a different damage claim than those employees who were not yet vested. Among those employees who were not yet vested, the differences in damages will depend upon the amount of time until vesting. If loss of ability to contribute to the BellSouth 401(k) plan or loss of vision plan benefits are compensable losses, as plaintiffs suggest in their depositions, the amount of the loss will depend on the amount each employee was contributing and/or whether that employee utilized the vision benefits provided by the health plan. The issue of causation is also unique to each putative class member.
The named plaintiffs seek only money damages, not injunctive relief, on behalf of themselves and proposed members of the defined class. When, as here, plaintiffs in the action seek only monetary damages and the amount is highly dependent on the circumstances of each plaintiff, the Fifth Circuit has been somewhat reluctant to certify a 23(b)(3) class. For example, inO'Sullivan, the Fifth Circuit reversed the district court's certification of claims brought pursuant to the Texas Unauthorized Practice of Law statute ("UPL") against a mortgage company which allegedly charged legal fees for non-lawyer employees who performed data entry functions, generated a set of real estate closing documents, faxed the documents to the closing attorneys, and entered suggested changes. 319 F.3d at 744. The court held that:
Even though a class is theoretically certifiable [with respect to the issue of whether the mortgage company's practices violated the TUPL], we find that an apportioned calculation of damages — required by the Texas UPL statute — means that individual issues predominate. . . .
The extent (but not the nature) of Countrywide's participation in the transactions varies, making individualized calculations predominate. Where the plaintiffs' damage claims 'focus almost entirely on facts and issues specific to individuals rather than the class as a whole,' Allison, 151 F.3d at 419, the potential exists that the class action may 'degenerate in practice into multiple lawsuits separately tried,' Castano, 84 F.3d at 745 n. 19 (citation omitted). In such cases, class certification is inappropriate.319 F.3d at 744-745. See also O'Sullivan, 319 F.3d at 745 n. 27 ( quoting Allison, 151 F.3d at 413: ("[A]s claims for individually based money damages begin to predominate, the presumption of cohesiveness decreases while the need for enhanced procedural safeguards . . . increases.") (citation omitted); Montelongo v. Meese, 803 F.2d 1341, 1351 (5th Cir. 1986) ("stating that claims are unsuitable for class treatment when individual questions, such as reliance and damages, predominate over class questions") (emphasis added). 319 F.3d at 745-746.
See, e.g., Rec. Doc. No. 59, Exh. D, Breecher dep., pp. 31-32.
See, e.g., Rec. Doc. No. 59, Exh. D, Breecher dep., pp. 31-32.
The final 23(b)(3) factor to be analyzed to determine the efficacy of class treatment of the plaintiffs' ERISA claims is superiority, i.e., whether "a class action is superior to other available methods for the fair and efficient adjudication of the controversy." In Castano, the Fifth Circuit analyzed the following factors as those necessary to assess superiority: (1) management problems, including whether difficult choice of law determinations must be made, difficulties in class and subclass determination problems, and the ease in which putative class members may be furnished notice; (2) the conservation of judicial resources in circumstances where large numbers of lawsuits may be filed; (3) the existence of a negative value suit; and (4) judicial efficiency.
Predominance and superiority have a symbiotic relationship. For example, the court in Allison v. Citgo Petroleum Corp., 151 F.3d 402, 419 (5th Cir. 1998) explained that "[t]he predominance of individual-specific issues relating to the plaintiffs' claims for compensatory and punitive damages in turn detracts from the superiority of the class action device in resolving these claims."
84 F.3d at 748. "A 'negative value' suit is one in which class members' claims 'would be uneconomical to litigate individually.'" In re Monumental Life, 365 F.3d 408, 411 n. 1 (5th Cir. 2004) ( citing Phillips Petroleum v. Shutts, 472 U.S. 797, 809, 105 S.Ct. 2965, 86 L.Ed.2d 628 (1985)).
The somewhat more complex procedure which is part and parcel of a Rule 23(b)(3) class militates against a finding that a class action would be superior to a joined action. There are no difficult choice of law problems (this is a federal question claim), the definition of the class and any potential subclass would be fairly simple, and the sixty potential class members could be easily notified. Because of the relatively small number of putative class members, however, the action would be more simply managed if class certification was denied. Trial of the matter could be bifurcated into liability and damage phases, with the common liability issues jointly tried by the factfinder and, in a second phase, damages claims could be tried with groups of similar claims. There is no likelihood of a multiplicity of lawsuits being filed since no evidence was presented that any of the putative class members has filed a claim in any court other than in the instant action.
See F.R.Civ.P. 23(c).
For the same reasons, plaintiffs have failed to show that there is a likelihood of a risk of inconsistent judgments. This is not a negative value lawsuit as ERISA allows for the discretionary recovery of attorney's fees and nineteen of the sixty plaintiffs have already joined together to litigate this lawsuit. Any other plaintiffs desiring to litigate their § 510 ERISA claim were informally advised of their former co-employees' intent to file claims. They were effectively invited to and could have joined the action to share expenses. Finally, the use of the class action procedure would not be more judicially economical than trying these claims individually with common liability issues to be tried in an initial phase in a bifurcated proceeding. Because there are other available methods for the fair and efficient adjudication of this controversy, a class action is not the superior manner in which to proceed.
After weighing all of the 23(b)(3) factors, the Court finds that plaintiffs have not established that this action should proceed as a class.
State law claims
Plaintiffs also seek class certification of their LADEA and other state law claims. As an initial matter, upon reviewing all four of the plaintiffs' complaints for the purpose of determining what state law claims have been plead, the only state law cause of action affirmatively mentioned is an LADEA age discrimination claim. In plaintiffs' prayer for relief set forth in their third amended complaint, plaintiffs seek "all compensatory and statutory/punitive damages reasonable and allowable" "for all pendent state claims under the laws of Louisiana" in addition to those specifically mentioned as arising pursuant to the LADEA, the ADEA, and ERISA.
Rec. Doc. No. 33.
In plaintiffs' response to the defendant's opposition to class certification, plaintiffs suggest that state law fraud and bad faith claims "do not affect class certification." Plaintiffs' also state that "[i]n this particular case, the act of fraudulent concealment does not bar class certification where the actions by the defendant were uniform with respect to the whole class."
Rec. Doc. No. 63, p. 7.
Rec. Doc. No. 63, p. 7.
Both F.R.Civ.P. 9(b) and La.C.Civ.P. article 856 require that fraud be plead with particularity. Assuming that plaintiffs intend to allege a claim pursuant to article 1953, the elements necessary to prove fraud are "(1) an intent to defraud and (2) actual or potential loss or damage." Sun Drilling Products Corp. v. Rayburn, 798 So.2d 1141, 1152 (La.App. 4th Cir. 2001). "[R]eliance is an element of a claim for fraud." Id. at 1153 ( citing Abbott v. Equity Group, Inc., 2 F.3d 613, 624 (5th Cir. 1993)). "[F]or fraud or deceit to have caused plaintiff's damage, he must at least be able to say that had he known the truth, he would not have acted as he did to his detriment. Whether this element is labeled reliance, inducement, or causation, it is an element of a plaintiff's case for fraud."Sun Drilling Products, 798 So.2d at 1153 ( citing In re Ford Motor Company Vehicle Paint Litigation, 1997 WL 539665 (E.D. La. 1997)).
F.R.Civ.P. 9(b) provides that, "In all averments of fraud or mistake, the circumstances constituting fraud or mistake shall be stated with particularity." See, United States ex rel Riley v. St. Luke's Episcopal Hospital, 355 F.3d 370, 381 (5th Cir. 2004).
La.C.Civ.P. art. 856 states that, "[i]n pleading fraud or mistake, the circumstances constituting fraud or mistake shall be alleged with particularity."
La.Civ. Code art. 1953 provides that, "[f]raud is a misrepresentation or a suppression of the truth made with the intention either to obtain an unjust advantage for one party or to cause a loss or inconvenience to the other. Fraud may also result from silence or inaction."
In McManus v. Fleetwood Enterprises, Inc., 320 F.3d 545 (5th Cir. 2003), the Fifth Circuit noted that "[c]laims for money damages in which individual reliance is an element are poor candidates for class treatment, at best. We have made that plain." Id. at 549 ( quoting Patterson v. Mobil Oil Corp., 241 F.3d 417, 419 (5th Cir. 2001)). In Sandwich Chef of Texas v. Reliance National Indemnity Ins. Co., 319 F.3d 205 (5th Cir. 2003), the Fifth Circuit held that "[f]raud actions that require proof of individual reliance cannot be certified as [F.R.Civ.P.] 23(b)(3) class actions because individual, rather than common, issues will predominate." Id. at 211. To the extent that plaintiffs have stated a cause of action for fraud or fraudulent misrepresentations and an element of such claim is reliance, such cause of action is not properly certified as a Rule 23(b)(3) class.
Plaintiffs also bring a claim for age discrimination pursuant to the LADEA, LSA-R.S. 23:312. "The Louisiana act mirrors the federal ADEA and should be construed in light of federal precedent." O'Boyle v. Louisiana Tech University, 741 So.2d 1289, 1290 (La.App. 2d Cir. 1999) ( citing Taylor v. Oakbourne Country Club, 663 So.2d 379 (La.App. 3d Cir. 1995)). Thus, whether or not the plaintiffs' LADEA claims can be tried as a class will be assessed in light of the collective action certification law applicable to ADEA cases.
Collective action certification ADEA
"The goal of the ADEA is the 'elimination of discrimination from the workplace,' Lorillard v. Pons, 434 U.S. 575, 584, 98 S.Ct. 866, 872, 55 L.Ed.2d (1978), by 'promot[ing] employment of older persons based on their ability rather than age . . . [and] prohibit[ing] arbitrary age discrimination in employment. . . .'"Lusardi v. Xerox Corp., 118 F.R.D. 351, 358 (D.N.J. 1987) ( quoting 29 U.S.C. § 621(b)). "Discrimination because of age is the only conduct proscribed by the ADEA." Lusardi, 118 F.R.D. at 358 ( citing Elliot v. Group Medical Surgical Service, 714 F.2d 556, 557 (5th Cir. 1983), cert. denied, 467 U.S. 1215, 104 S.Ct. 2658, 81 L.Ed.2d 364 (1984).
"The ADEA, at 29 U.S.C. § 626(a), explicitly incorporates section 16(b) of the Fair Labor Standards Act [ 29 U.S.C. § 216(b)], which provides that a person may maintain an action on 'behalf of himself . . . and other employees similarly situated. No employee shall be a party plaintiff to any such action unless he gives his consent in writing to become such a party and such consent is filed in the court in which such action is brought." 29 U.S.C. § 216(b) (emphasis supplied). A difference between an ADEA representative action and a Fed.R.Civ.P. 23 class action is that the ADEA action follows an 'opt-in' rather than an 'opt-out' procedure. See LaChapelle v. Owens-Illinois, Inc., 513 F.2d 286, 289 (5th Cir. 1975). However, in discussing the representative action, most courts utilize class action terminology from Rule 23 cases." Mooney v. Aramco Services Co., 54 F.3d 1207, 1212 (5th Cir. 1995).
29 U.S.C. § 216(b) states in pertinent part that "[a]n action to recover the liability prescribed in either of the preceding sentences may be maintained against any employer . . . in any Federal or State court of competent jurisdiction by any one or more employees for and in behalf of himself or themselves and other employees similarly situated. No employee shall be a party plaintiff to any such action unless he gives his consent in writing to become such a party and such consent is filed in the court in which such action is brought."
In Mooney, the Fifth Circuit considered which of two procedures should be employed to determine whether collective action certification should be granted in an ADEA case. The first, referred to as "two-stage class certification," was utilized in Lusardi and its progeny. The Mooney court observed that "the Lusardi . . . line of cases, by its nature, does not give a recognizable form to an ADEA representative class, but lends itself to ad hoc analysis on a case-by-case basis." 54 F.3d at 1213. Mooney explained the typical Lusardi procedure utilized by district courts to determine whether ADEA cases should be certified:
Under Lusardi, the trial court approaches the 'similarly situated' inquiry via a two-step analysis. The first determination is made at the so-called 'notice stage.' At the notice stage, the district court makes a decision-usually based only on the pleadings and any affidavits which have been submitted — whether notice of the action should be given to potential class members.
Because the court has minimal evidence, this determination is made using a fairly lenient standard, and typically results in 'conditional certification' of a representative class. If the district court 'conditionally certifies' the class, putative class members are given notice and the opportunity to 'opt-in.' The action proceeds as a representative action through discovery. 54 F.3d at 1213-1214. The "lenient standard" requires "nothing more than substantial allegations that the putative class members were together the victims of a single decision, policy, or plan infected by discrimination." Mooney, 54 F.3d at 1214 n. 8 ( quoting Sperling v. Hoffman-La Roche, Inc., 118 F.R.D. 392, 407 (D.N.J. 1988), aff'd in part and appeal dismissed in part, 862 F.2d 439 (3rd Cir. 1988), aff'd and remanded Hoffman-La Roche, Inc. v. Sperling, 493 U.S. 164, 110 S.Ct. 482, 107 L.Ed.2d 480 (1989)).
According to Mooney, the second step of the process:
is typically precipitated by a motion for 'decertification' by the defendant usually filed after discovery is largely complete and the matter is ready for trial. At this stage, the court has much more information on which to base its decision, and makes a factual determination on the similarly situated question. If the claimants are similarly situated, the district court allows the representative action to proceed to trial. If the claimants are not similarly situated, the district court decertifies the class, and the opt-in plaintiffs are dismissed without prejudice. The class representatives — i.e., the original plaintiffs — proceed to trial on their individual claims.Mooney, 54 F.3d at 1214.
The Mooney court's review of the caselaw at the time it was rendered [1995] indicated that no representative class had ever survived the second stage of review. 54 F.3d at 1214.
The second type of collective action procedure, typified by Shushan v. University of Colorado, 132 F.R.D. 263 (D. Colo. 1990), is referred to as "spurious" class certification. This procedure uses the factors employed by F.R.Civ.P. 23(a), numerosity, commonality, typicality, and adequacy of representation, to determine if a collective action should be certified pursuant to FLSA § 16(b). Mooney, 54 F.3d at 1214. "Under this methodology, the primary distinction between an ADEA representative action and a [F.R.Civ.P.] 23 class action is that persons who do not elect to opt-in to the ADEA representative action are not bound by its results. In contrast, Rule 23 class members become party to the litigation through no action of their own, and are bound by its results." Id. at 1214.
The Mooney court affirmed the district court's denial of ADEA collective action certification, but expressly declined to adopt either method. Recently, however, in Basco v. Wal-Mart Stores, Inc., 2004 WL 1497709 (E.D. La. 2004), the district court reviewed the jurisprudence and concluded that:
[A] consensus has been reached on how section 216(b) cases should be evaluated. It is clear that the two-step ad hoc approach is the preferred method for making the similarly situated analysis and that the similarly situated standard does not incorporate Rule 23 requirements.Id. at *4. See also Donohue v. Francis Services, Inc., 2004 WL 1161366 (E.D. La. 2004) (District court applied the two-step analysis recognized in Mooney in response to a request to certify a collective action pursuant to FLSA § 216(b)). This Court is persuaded that the two-step procedure is the appropriate methodology.
For purposes of appellate review, however, insofar as the Court has undertaken an analysis of class certification pursuant to Fed.R.Civ.P. 23 with respect to plaintiffs' ERISA action, such analysis would, for all practical purposes, be equally analogous to plaintiffs' ADEA claims.
At the initial stage, plaintiffs allege that defendant's decision to close the Marrero DA operator facility was made in order "to eliminate a significant number of older workers at one time. All of the sixty Marrero [DA operators] were over forty, were paid well and received substantial employee benefits due to the fact that all of them had in excess of twenty-five years of employment with BellSouth." Plaintiffs also contend that "the Marrero [DA operators] were wrongfully regarded by BellSouth management as dinosaurs, past their prime, too old and unwilling to perform and/or incapable of performing their jobs." In addition, plaintiffs suggest that defendant's decision to open a Hammond DA facility a few months later and its failure to inform the former Marrero DA operators of the opening of the facility until months after the Marrero facility closed, constitutes "proof that such actions were a subterfuge to evade the dictates of the ADEA [and] the LADEA. . . ." Such contentions meet the requirement of "substantial allegations that the putative class members were together the victims of a single decision, policy, or plan infected by discrimination." See Mooney, 54 F.3d at 1214 n. 8 ( quoting Sperling, 118 F.R.D. at 407).
Rec. Doc. No. 56, p. 2.
Rec. Doc. No. 56, p. 2.
Rec. Doc. No. 56, p. 3.
At this stage, a generic application of the two-step rule would result in the conditional certification of the collective action along with notice to prospective class members and an opt-in period. In Pfohl v. Farmers Ins. Group, 2004 WL 554834 (C.D. Cal. 2004), the district court concluded that when "discovery has been undertaken relating to the issues of certification . . . as a collective action . . . [,] the Court can proceed to the second determination discussed above and weigh relevant factors to determine whether the plaintiffs are similarly situated." Id. at *3. The district court in Basco also proceeded directly to the second stage of the two-step approach, observing that:
[S]ubstantial discovery has occurred; the Court has heard the video deposition testimony of a substantial number of plaintiffs at the hearing on this matter and has independently reviewed written deposition testimony as well. This case, as demonstrated by its long procedural history, is not in a nascent [stage]. Thus, an application of the second criteria is called for.
Because the aim of collective actions is to promote judicial economy, and substantial discovery has already been undertaken such that the Court can make an educated decision as to whether certifying this matter as a collective action would survive the decertification process, the ends of judicial economy . . . require the Court to make that enquiry at this stage. To create a collective action class, including the cost associated with that when a Court is convinced that there is insufficient support for same prior to its certification would be an exercise in futility and wasted resources for all parties involved.2004 WL 1497709 at *4-*5.
The record in the instant action reflects that although merits discovery has been postponed, class certification discovery has been completed. The parties agree that no additional evidence need be introduced at a class and collective action certification hearing, that oral argument is not necessary, and that the motion for class and collective certification is to be submitted on the basis of the motion, memoranda of counsel, and documentary exhibits. The exhibits, which are voluminous, include affidavits, deposition testimony, and documents. As in Basco, this action has been pending for some time and there is a substantial evidentiary record upon which a reasoned decision with respect to collective action certification may be made. Following the rationale of Pfohl and Basco, and in the interest of judicial economy and conservation of the parties' resources, the Court shall proceed to the second step of the collective certification process.
Rec. Doc. No. 71.
Rec. Doc. No. 65.
Rec. Doc. Nos. 21, 56, 59, and 63.
"Most district courts analyzing the 'similarly situated' requirement at the post-discovery stage focus on three factors in determining whether plaintiffs are similarly situated: (1) the disparate factual and employment settings of the individual plaintiffs; (2) the various defenses available to defendant which appear to be individual to each plaintiff; and (3) fairness and procedural considerations." Thiessen v. General Electric Capital Corp., 996 F. Supp. 1071, 1081 (D. Kan. 1998) ( citing Bayles v. American Med. Response of Colorado, Inc., 950 F. Supp. 1053, 1066-1067 (Colo. 1996); Brooks v. Bellsouth Telecommunications, Inc., 164 F.R.D. 561, 568 (N.D. Ala. 1995);Lusardi, 118 F.R.D. at 359).
With respect to the first factor, each of the putative class members were DA operators who worked at defendant's Marrero facility and all were over forty years old. The exact ages of these sixty persons is not of record. Each lost her job at the Marrero facility when BellSouth decided to close it. Prior to the closing of the Marrero facility, none of these purported class members were allegedly told that BellSouth would be opening a Hammond DA facility. Allegedly, all of them were informed a few months later that the Hammond DA facility would be opening and all were offered re-employment by BellSouth at the new Hammond DA office.
Rec. Doc. No. 56, Exh. 1.
Rec. Doc. No. 56, Exh. 1.
Rec. Doc. No. 56, Exh. 1.
Rec. Doc. No. 56, Exh. 1.
As to applicable defenses, BellSouth is likely to urge some defenses that are common to all claims. The defendant will certainly contend, with respect to all of the potential plaintiffs, that they are unable to establish a prima facie case of age discrimination pursuant to the ADEA and, if they are able to do so, defendant had a legitimate, nondiscriminatory reason for closing the Marrero facility.
"To demonstrate age discrimination a 'plaintiff must show that' (1) he was discharged; (2) he was qualified for the position; (3) he was within the protected class at the time of discharge; and (4) he was either i) replaced by someone outside the protected class, ii) replaced by someone younger, or iii) otherwise discharged because of his age.''" Rachid v. Jack in the Box, Inc., ___ F.3d ___, 2004 WL 1427046 at * 2 (5th Cir. 2004) ( quoting Palasota v. Haggar Clothing Co., 342 F.3d 569, 576 (5th Cir. 2003) (other quotation omitted)).
There will also likely be a number of unique defenses tailored to each plaintiff's particular circumstances. Depending upon her years of service, time required before pension vesting, and acceptance of BellSouth re-employment, each of the sixty putative class members stand in unique positions. For example, with respect to those BellSouth employees who accepted employment as DA operators in Hammond and, accordingly, lost no seniority, BellSouth might argue that such plaintiffs were not replaced by younger persons, lost no benefits, and therefore have no damages. Other former DA operators who accepted other types of positions at BellSouth may actually be earning more than they did as DA operators. Such potential plaintiffs will likely face a strong defense regarding their attempts to establish a prima facie case, causation, and damages.
In addition, defendant intends to assert an untimeliness defense with respect to all of the ADEA claims. While BellSouth argues that the untimeliness of the ADEA claim is an individualized issue as to each plaintiff, under the unique circumstances of this case, that may not be true. In an ADEA case, a claimant in a deferral state, such as Louisiana, must file an administrative charge within 300 days of the last act of discrimination. Anson v. University of Texas Health Science Center at Houston, 962 F.2d 539, 540 (5th Cir. 1992). Baroni, the lead plaintiff, is the only person in the putative class who filed an administrative complaint with the EEOC alleging age discrimination. Pursuant to the "single filing rule," the other fifty-nine plaintiffs can "piggy-back" onto Baroni's administrative complaint and need not each file an administrative complaint. Bettcher v. The Brown Schools, Inc., 262 F.3d 492, 494 (5th Cir. 2001). If Baroni's complaint is not timely, however, there will be no "single filing" that satisfies the procedural requirements and all of the claims may be timebarred. Whether or not her administrative complaint is timely is left for another day; however, such a determination will not depend upon the individual circumstances of each member of the putative class, but on whether Baroni's claim was timely.
A "deferral" state is "a state with a state law prohibiting age discrimination in employment and a state authority to grant or seek relief from such discriminatory practice." Tyler v. Union Oil Co. of Calif., 304 F.3d 379, 384 (5th Cir. 2002) ( citing 29 U.S.C. § 626(d) and 633(b);Conway v. Control Data Corp., 955 F.2d 358, 363 n. 3 (5th Cir. 1992)).
See Rec. Doc. No. 64, Exh. D.
See also Mooney, 54 F.3d at 1223 ("This so-called 'single filing rule' generally allows a plaintiff, who did not file an EEOC charge, to piggyback on the EEOC complaint filed by another person who is similarly situated").
"For those plaintiffs who have never filed an administrative charge and who are allowed to piggyback on the filed claim of another, we deem it reasonable to permit them to join suit as long as the claimant on whose administrative claim they have relied timely files suit after receiving right-to-sue letters from state and federal agencies." Mooney, 54 F.3d at 1224 ( quoting Anderson v. Unisys Corp., 47 F.3d 302, 308-309 (8th Cir. 1995) (emphasis added)).
The fact that Baroni's ADEA claim ultimately might be dismissed as untimely militates against collective action certification. Sending notice to all of the putative class members, not an inexpensive endeavor, and providing an opt-in period, only to dismiss all of the claims as untimely, would be a futile act.
Finally, there are procedural considerations and fairness concerns that weigh against collective action certification of the ADEA claim. As previously noted, all of the putative class members were informally notified by Baroni during the summer of 2001 that she intended to hire an attorney because she believed they were done an injustice. Baroni's administrative complaint was filed on November 2, 2001. There is no evidence to suggest that any other putative plaintiff, other than those who have already joined the lawsuit, are likely to assert claims. See Pfohl, 2004 WL 554834 at * 10. Since the filing of the fourth amended complaint, no putative class member has sought to become a party to the action despite the "single filing" rule which would allow such persons to join a timely filed ADEA claim. As noted, there are no other age discrimination actions pending in other courts. Allowing additional putative class members who have never indicated an intention to sue to opt-in at this late date, over three years after their termination and nearly two and one-half years after Baroni filed her administrative complaint, does not foster the purpose of the collection action procedure, i.e., to consolidate claims so that they can be an efficient resolution of the common issues of fact and law arising out of the same alleged conduct. See Pfhol, 2004 WL 554834 at *10.
Rec. Doc. No. 59, Exh. D, Baroni dep., pp. 32-33.
Rec. Doc. No. 64, Exh. D.
See Pfohl, 2004 WL 554834 at *10 ("Additionally, as Farmers states, notice should be denied because Plaintiff has engaged in solicitation and has failed to come up with significant numbers of allegedly similarly situated employees who are likely to assert similar claims").
After balancing all the above factors, the court finds that the putative class members are not "similarly situated" for purposes of a collective action and that the plaintiffs' motion for certification of § 216(b) collective action to litigate plaintiffs' ADEA and LADEA claims is not warranted.
Conclusion
Accordingly,IT IS ORDERED that the motion of plaintiffs for class certification pursuant to Fed.R.Civ.P. 23 of their ERISA and Louisiana state law fraud claims is DENIED. IT IS FURTHER ORDERED that plaintiffs' motion for collective action certification pursuant to 29 U.S.C. § 216(b) of their ADEA and LADEA claims is DENIED.
Additional merits discovery shall proceed and trial shall be set with respect to the individually named plaintiffs' claims.