Opinion
Civ. No. C98-0045 (MJM)
May 16, 2000.
ORDER
This case grew out of a staff reorganization at the Duane Arnold Energy Center's (DAEC), Training Center. DAEC, the Defendant in this case, offered employees in the effected positions the option of applying for posted positions within the company, or terminating their employment and taking advantage of the company's severance package. Those employees who were unsuccessful in securing a new position within the company were also eligible for the severance package. In order to qualify for the severance package, however, the employee was required to sign a release of claims.
At all times relevant to this case, DAEC was operated by IES Utilities Inc., a subsidiary of IES Industries Inc. As such, IES Utilities, Inc. and IES Industries, Inc. are also named defendants in this case.
Plaintiff Blaine Watts (Watts), was an affected employee who opted to apply for posted positions within the company. After his unsuccessful attempt at employment with DAEC, Watts refused to sign the release of claims and accept the severance package, and instead filed the present lawsuit. In Count V of Watts' amended complaint, Watts asserts a class action comprised of people who were affected by DAEC's allegedly discriminatory practices. Additionally, Watts seeks to represent the class. However, it is uncontested that Watts is the only member of the class, which he purports to represent, who refused to sign the release of claims prior to accepting a severance package. (See Doc. # 113, and Doc. #115) Indeed, Watts is the only employee over 40 effected by the reorganization that did not either retain employment with DAEC or obtain the severance package. Given this posture, the first hurdle for the members of the class is to successfully argue the releases are invalid, thereby allowing them to bring the present claims. Therefore, the preliminary issue the Court must resolve is whether Watts, having refused to sign the release, can adequately represent the class. For the reasons that follow, this Court find Watts' claims are not typical of those of the prospective class and that he lacks standing to challenge the validity of the releases.
DISCUSSION
A. Federal Rule of Civil Procedure 23(a)
Under Rule 23, a plaintiff seeking class certification must first satisfy the following prerequisites:
(1) the class is so numerous that joinder of all members is impracticable, (2) there are questions of law or fact common to the class, (3) the claims or defenses of the representative parties are typical of the claims or defenses of the class, and (4) the representatives parties will fairly and adequately protect the interests of the class.
Fed.R.Civ.P. 23(a). These prerequisites are commonly referred to by the courts as numerosity, commonality, typicality, and adequacy. If a plaintiff fails to meet any one of the four prerequisites, the court must deny certification.
In the present action Watts fails to establish the typicality prong of Rule 23(a). The typicality "requirement is generally considered to be satisfied `if the claims or defenses of the representatives and the members of the class stem from a single event or are based on the same legal or remedial theory.'" Paxton v. Union Nat'l Bank, 688 F.2d 552, 561-62 (8th Cir. 1982) cert. denied, 460 U.S. 1083 (1983) ( quoting, C. Wright A. Miller, Federal Practice and Procedure § 1764 at n. 21.1 (Supp. 1982)). While many courts have merged the idea of typicality with that of commonality, the Eighth Circuit has given typicality "an independent meaning" by "requiring that there are other members of the class that have the same or similar grievances as the plaintiff." Paxton, 688 F.2d at 562 ( quoting Donaldson v. Pilsbury Co., 554 F.2d 825, 830 (8th Cir.), cert. denied, 434 U.S. 856 (1977)).
Watts is the only member of the class who has not signed a release. As such, he does not have a similar interest in challenging the validity of the release. The Court finds support for this conclusion from many courts denying class certification under parallel circumstances. See Bernard v. Gulf Oil Corp., 841 F.2d 547 (5th Cir. 1988) cert. denied, 497 U.S. 1003 (1990) (finding employees who had not signed release could not maintain a class action for discrimination where they were seeking to represent class members who had signed releases); Melong v. Micronesian Claims Commission, 643 F.2d 10, 13 (D.C. Cir. 1980) (cases cited therein) (finding claimants who had not executed releases could not represent claimants who had); Thonen v. McNeile-Akron, Inc., 661 F. Supp. 1271, 1274 (N.D.Ohio. 1986) (addressing typicality, refusing to allow plaintiffs who did not sign accord and satisfaction agreements to represent class consisting of only persons who had signed agreements); Muller v. Curtis Publ'g Co., 57 F.R.D. 532, 534 (E.D. Penn. 1973) (refusing to certify class where only plaintiff had not signed release, while all other members had signed release); See also Stewart v. Avon Products, 1999 WL 1038338 at *4 (E.D.Pa. Nov. 15, 1999) (finding plaintiff is inadequate class representative where named plaintiff did not sign release and many members of class have); Ciarlante v. Brown Williamson Tobacco Corp., 1995 WL 764579 at *2 (E.D.Pa. Dec. 18, 1995) (refusing to allow former employee who signed release to intervene in class action where named plaintiffs had not signed release).
The Melong court explained that "[t]he existence of such releases adds new and significant issues to actions brought on the underlying claims. When the purported class representative has not executed a release and need not establish that the release is defective in his individual case, serious questions are raised concerning the typicality of the class representative's claims and the adequacy of his representation of other class members." Melong, 643 F.2d at 13.
Those cases which have allowed class certification where portions of the class signed a release, while others had not, are easily distinguishable. In a case cited by Watts, Korn v. Franchard Corp., 456 F.2d 1206 (2d Cir. 1972), the court found the determination of the validity of the releases was not dispositive of whether the class should be certified. Moreover, the class in Korn was composed of only a small number of people who had signed the release. Id. at 1210. Given the small number of members who signed the release, the court reasoned the release was not a bar to class certification but could require the creation of a subclass later in the litigation. Id. No such tact could be taken in the present action because all the members of the prospective class have signed the release. It is only the plaintiff who has not.
In a similar case where only two-thirds of the class signed a release, the court found that such a distinction did not justify rejection of class certification. See Bittinger v. Tecumesh Products Co., 123 F.3d 877, 884 (6th Cir. 1997). Yet in Bittinger, the named plaintiff was included in those who signed releases, so the concern that he would not adequately represent those who had signed releases was obviated.
Determining whether the purported class satisfies the typicality prong, courts often focus on the similarity among claims, placing less emphasis on the similarity of possible defenses. See, e.g., Gasper v. Linvatec Corp., 167 F.R.D. 51, 58 (N.D. Il 1996). However, "when a unique defense will consume the merits of a case that class should not be certified." Id. (internal quotations omitted) It is precisely this situation with which this Court is faced in the present litigation. If the release was found to be valid, the entire class, save the named plaintiff, is barred from pursuing their claims. The Court therefore concludes Watts has failed to meet the typicality prong of Rule 23(a) and cannot maintain a class action where the entire class has signed a release of claims which he has failed to sign.
B. Standing
Alternatively, the Court finds that Watts does not have standing to challenge the validity of the pertinent releases. There are three elements a plaintiff must satisfy in order to establish standing: (1) the plaintiff must have suffered an injury in fact; (2) there must be a causal connection between the injury and the conduct complained of — that is, the conduct must be fairly traceable to the challenged action of the defendant; and (3) it must be likely as opposed to merely speculative that the injury will be redressed by a favorable decision. See Lujan v. Defenders of Wildlife, 504 U.S. 555, 560-61 (1992).
Watts is unable to establish both injury in fact or a causal connection between such injury and the complained of conduct. Because Watts did not sign the release of claims, and defendants have not asserted a release as a defense to his claims, Watts cannot claim he is injured by the pertinent release. Consequently, no injury suffered by Watts can be traced to the release because Watts did not sign the release, and the signing of such releases by others does not preclude Watts from recovering on his own claims.
Other courts have declined to allow plaintiffs to challenge the validity of employment agreements which have no applicability to them. See O'Regan v. Arbitration Forums, Inc., 121 F.3d 1060, 1065 (7th Cir. 1997) (finding "employee discharged for refusing to participate in an alleged antitrust violation has no standing to sue on the basis of that violation"); Bernard, 841 F.2d at 550-51 (finding named plaintiffs who had not signed releases lacked standing to assert class claims on behalf of those members who had signed releases); Thonen, 661 F. Supp. at 1274; Greeley v. KLM Royal Dutch Airlines, 85 F.R.D. 697, 700 (S.D.N.Y. 1980) (finding named plaintiff could not represent class of airline passengers who had settled their claims with defendant where plaintiff refused to settle). The Court finds Watts' decision not to sign the release precludes him from now challenging its validity.
C. Motion to Designate Alternative Class Representative
As a second line of defense, Watts requests that the Court allow him to mail notice and consent forms to the putative class and designate an alternative class representative for the purpose of standing. Authorization for class actions under the ADEA is governed by the enforcement provision of the Fair Labor Standards Act (FLSA) which provides in pertinent part:
An action to recover the liability . . . . against any employer (including a public agency) in a 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.29 U.S.C. § 216(b).
The pivotal issue in class certification is the determination of whether its proposed members are similarly situated. Watts is the only member of the putative class who did not sign a release. See Affidavit of Wendy Riovinius-Portz, attached as Exhibit A to Doc. #116. As such, Watts is not "similarly situated" with the members of the putative class. See, c.f., Ulvin v. Northwestern National Life Ins. Co., 943 F.2d 862 (8th Cir. 1991) cert. denied, 502 U.S. 1073 (1992) (affirming lower court's holding that individual who had signed a valid release could not opt-in to class of individuals who had not that release). The Court declines to approve a class notice and permit designation of a class representative where the proposed members are not similarly situated to Watts.
ORDER
For the reasons stated herein, Duane Watts' motion for class certification is DENIED, and Defendant's motion for Summary Judgment on Count V of Duane Watts' complaint is GRANTED.
Done and so ordered this 16th day of May, 2000.
Judge Michael J. Melloy United States District Court for the Northern District of Iowa