Applebee's Class Action Can Proceed; Public Citizen's Scott Michelman Explains

The Second Circuit Court of Appeals has ruled that a wage and hour class action against Applebee’s, discussed in an earlier LBN report, may proceed. The case is important for several reasons, including that it discusses class action certification under Federal Rule 23(b) in light of the Supreme Court’s ruling in Comcast Corp. v. Behrend. Attorney Scott Michelman explains the decision in this report.

Scott Michelman

Scott Michelman

Michelman explains that the ruling of the district court denied certification of the lawsuit as a class action on the theory that the Comcast case would permit class action certification only when damages were “measurable on a classwide basis.” In the Applebee’s case, damages would necessarily be different for all class members because of differences in location, hours worked, and wage rates. This is typically true in any wage and hour case. The Second Circuit said that the individualized nature of the damages is only one factor among many to be considered in deciding whether a class action can proceed.

Michelman notes that opponents of class actions had said, in the wake of Comcast, that it was a “game changer.” But what the Court actually said, explains Michelman, is that the plaintiff’s theory of damages must match the theory of liability. What that Court did not say is that the individualized nature of damages would preclude certification of a class. The district court was in error by reading the Comcast decision in that light.

In this case (Roach v. T.L. Cannon Corp.), Applebee’s had a number of corporate policies and practices aimed at denying wages to their workers, wages to which the workers would be entitled under state law. Michelman says there was adequate evidence in the record that Applebee’s was training managers at franchise restaurants to shave time off time cards for rest breaks that employees didn’t take. Defendant Cannon is a franchisee that operates 53 restaurants in New York.

The most important effect of the Second Circuit’s decision in the long term will be to clarify for all parties that individualized damages like the ones in this case will not defeat class action certification. This case clarifies that, just as before Comcast, the question is “whether common issues predominate over individual ones.” Individualized damages won’t kill a class action.

Scott Michelman is an attorney at the Public Citizen Litigation Group, in Washington, D.C. His career as a public interest litigator has spanned a broad range of social justice and civil rights issues, including access to the courts, consumers’ rights, discrimination and selective enforcement, freedom of speech and press, habeas corpus rights, immigrants' rights, judicial secrecy, police misconduct, political protest, post-September 11 abuse of executive power, religious freedom, the rights of medical marijuana patients, sentencing law, and unreasonable search and seizure. The Legal Broadcast Network is a featured network of the Sequence Media Group.