Vedachalam v. Tata America International Corporation et al

Filing 277

ORDER GRANTING IN PART PLAINTIFFS 185 MOTION FOR CLASS CERTIFICATION, GRANTING PLAINTIFFS 181 MOTION TO APPOINT CLASS COUNSEL AND GRANTING DEFENDANTS 272 MOTION FOR LEAVE TO FILE A SECOND SUR-REPLY. Case Management Statement due by 4/18/2012. Case Management Conference set for 4/25/2012 02:00 PM. Signed by Judge Claudia Wilken on 4/2/2012. (ndr, COURT STAFF) (Filed on 4/2/2012)

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1 IN THE UNITED STATES DISTRICT COURT 2 FOR THE NORTHERN DISTRICT OF CALIFORNIA 3 4 5 GOPI VEDACHALAM and KANGANA BERI, on behalf of themselves and all others similarly situated, 6 7 8 9 United States District Court For the Northern District of California 10 11 No. C 06-0963 CW ORDER GRANTING IN PART PLAINTIFFS’ MOTION FOR CLASS CERTIFICATION, GRANTING PLAINTIFFS’ MOTION TO APPOINT CLASS COUNSEL AND GRANTING DEFENDANTS’ MOTION FOR LEAVE TO FILE A SECOND SUR-REPLY (Docket Nos. 181, 185 and 272) Plaintiffs, v. TATA CONSULTANCY SERVICES, LTD, an Indian Corporation; and TATA SONS, LTD, an Indian Corporation, Defendants. ________________________________/ 12 Plaintiffs Gopi Vedachalam and Kangana Beri charge Defendants 13 Tata Consultancy Services, Ltd. (TCS) and Tata Sons, Ltd., with 14 breach of contract and violations of California’s Labor Code and 15 Unfair Competition Law (UCL). Plaintiffs now move for class 16 certification and appointment of class counsel. Defendants oppose 17 the motion for class certification, but do not oppose the motion 18 for appointment of class counsel. Having considered the papers 19 filed by the parties and their oral arguments at the hearing, the 20 Court GRANTS in part Plaintiffs’ motion for class certification, 21 GRANTS Plaintiffs’ motion for appointment of class counsel, and 22 GRANTS Defendants’ motion for leave to file a second sur-reply. 23 BACKGROUND 24 Tata Sons and TCS, a division of Tata Sons, are Indian 25 corporations headquartered in Mumbai, India. TCS offers 26 information technology services to clients located worldwide. 27 28 1 To serve its clients, TCS deploys its employees to client 2 sites worldwide on temporary assignments, known as “deputations.” 3 Before an employee departs on a deputation, TCS and the employee 4 undertake several steps. 5 States non-immigrant visa on behalf of the employee; in this visa 6 petition, TCS provides a sworn statement to the United States 7 government stating the amount of compensation to be paid to the 8 employee in the United States. 9 TCS’s policy that TCS and the employee enter into a deputation TCS first files a petition for a United After a visa is obtained, it is United States District Court For the Northern District of California 10 agreement (DA) and deputation terms agreement (DTA). 11 Defendants, TCS has a “standard guideline” DTA, which they 12 describe as a form with blanks that TCS was supposed to complete 13 and have each deputed employee sign. 14 Ex. B, Tr. of Deposition of Ashok Mukherjee, at 143:8-144:12, 15 146:6-24. According to See Hutchinson Decl. ¶ 4, 16 The standard DTA states in part, 17 (B) Salary and Benefits in India. As stated in the Deputation Agreement, you will continue to receive your salary and benefits in India during the period of the Deputation, subject to any tax requirements of the United States and its states. (C) Compensation in the United States. In addition to the compensation and benefits you currently receive and will continue to receive in India while on Deputation, you shall receive additional compensation in the United States in the gross amount of $________, less deductions required by law or otherwise voluntarily authorized by you. This compensation shall be for living and other expenses in the United States. (D) Total Gross Compensation. Amounts of salary paid by TCS in India (under Paragraph 4 (b) above) and the additional compensation in the United States (under Paragraph 4(c) above) shall be aggregated and thus shall be treated as your total gross compensation for purposes of U.S. law with respect to your employment in the United States. 18 19 20 21 22 23 24 25 26 27 28 2 1 According to Defendants, the blank space in section C was 2 completed in one of four different manners: (1) $______; 3 (2) $50,000; (3) $_______ ($50,000); or (4) $45,000 ($50,000). 4 Some deputed employees also signed another form referred to 5 as the Authorization for Payroll Deductions (APDs). 6 contains an overall gross wage, as well as wages to be paid in 7 India and in the United States. 8 deductions that the deputed employees authorized from their United 9 States wages. United States District Court For the Northern District of California 10 The APD The APD also states certain For example, one APD executed within the class period states in part, 16 I confirm that my rate of gross pay will be U.S.$ 41718 per year during my deputation in the United States. The composition of my gross pay is indicated below. I hereby authorize TCS to deduct all applicable U.S. Federal and State income and employment taxes from my gross pay. In addition, I authorize TCS to deduct, in monthly installments, the amounts listed below under Voluntary Deductions from my net pay for matters for my benefit. I understand that the deductions are not conditions of employment and will not exceed 25% of my disposable earnings in any work period. 17 I. 11 12 13 14 15 18 1. 19 2. II. 1. 2. 3. 4. 5. 6. 7. 20 21 22 23 24 25 26 III. 27 28 IV. Gross Wages: $ 41718 Wages paid in India $ 6234 (Indian wages to be paid in Rupees) Wages paid in the United States (I-I.1=I.2) $ 35484 Deductions from US Component of Gross Wages: Federal Income Tax State Income Tax Local Income Tax SUI/SDI Social security Tax Medicare Tax Total deductions from U.S. component of gross wages: $ 8665 Net pay in the United States (I.2 minus II.7=III) : $ 26819 Voluntary deductions from Net pay in the U.S. 3 1. Medical insurance premium : $ 336 2. Car loan payment : $ 3. Other deductions : $ 419 (Specify : Total Deductions $ 755 V. Net Take Home pay in the U.S. (III. minus IV.4 = V) $ 26064 1 2 3 4 5 6 Smith Decl., Ex. BW.1 7 did deputed employees authorize TCS to deduct their Indian wages 8 from their United States wages or to keep over-withheld tax 9 deductions. United States District Court For the Northern District of California 10 11 In none of the APDs provided by Defendants See Smith Decl., Exs. AJ, BH, BI, BT, BU, BV, BW, BX, BY. Various policies and procedures governed deputations, several 12 of which changed in July 2005. Before July 2005, TCS handled 13 employees’ federal and state income tax obligations, including 14 setting the number of tax withholding exemptions claimed by 15 employees and filing tax returns on employees’ behalf. 16 of tax withholding exemptions changed periodically for some 17 employees. 18 employee, TCS placed a stamp on the back of the check that read, 19 “Pay to the order of Tata Consultancy Services, Limited,” and sent 20 the check to the employee with an “urgent memo” directing the 21 employee to endorse it and return it to TCS. 22 changed its handling of employees’ income taxes. 23 its employees to file their own federal and state tax returns. The number When TCS received a tax refund check for a deputed In July 2005, TCS It now requires 24 25 26 27 28 1 Defendants have submitted two APDs for deputed employees that fall within the proposed class period, see Smith Decl., Exs. AJ, BW, and six APDs that are dated prior to the proposed class period, see Smith Decl., Exs. BH, BI, BT, BU, BV, BX, BY. 4 1 Before July 2005, TCS compensated deputed employees in the 2 United States both by depositing funds into their accounts in 3 India and by issuing them paychecks in the United States. 4 issuing paychecks in the United States, TCS deducted the amount of 5 the deputed employees’ Indian wages from their United States 6 wages. 7 employees now earn only a gross salary, paid in the United States. 8 Plaintiffs initiated this lawsuit on February 14, 2006. 9 TCS changed this compensation scheme in July 2005. When TCS On April 25, 2011, Plaintiffs filed this motion for class United States District Court For the Northern District of California 10 certification, in which they sought certification of two classes 11 and one subclass. 12 Plaintiffs sought to certify under Rule 23(b)(3) a national class 13 defined as, “All non-U.S. citizens who were employed by Tata in 14 the United States at any time from February 14, 2002 through June 15 30, 2005.” 16 the national class definition to include only those “who were 17 deputed to the United States after January 1, 2002.” 18 To prosecute their claims under California law alleging improper 19 recoupment of wages, waiting time penalties, and inaccurate wage To prosecute their breach of contract claim, Mot. at 2. In their reply, Plaintiffs further limit 20 21 22 23 24 25 26 27 28 5 Reply, at 3. 1 statements,2 Plaintiffs sought to certify under Rule 23(b)(3) a 2 California class defined as, “All non-U.S. citizens who were 3 employed by Tata in California at any time from February 14, 2002 4 through the date of judgment.” 5 Id.3 On July 13, 2011, this Court granted in part and denied in part Defendants’ motion for partial summary judgment. 7 held, inter alia, that Plaintiffs had not alleged in their 8 complaint that Defendants’ deduction of deputed employees’ Indian 9 salaries from their American salaries violated California Labor 10 United States District Court For the Northern District of California 6 Code section 221 and dismissed that claim to the extent that it 11 was premised on Indian salary deductions. 12 Plaintiffs leave to amend their complaint to seek relief on their 13 section 221 claims on these grounds. The Court The Court granted 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 2 Plaintiffs previously asserted a claim against Defendants for failure to pay terminated employees for vested but unused vacation time at the time of discharge in violation of California Labor Code § 227.3. First Amended Compl. (1AC) ¶¶ 128-37. They initially sought certification of the California class to pursue this claim as well. Mot. at 1, n.1. After Plaintiffs filed their motion for class certification, this Court granted summary judgment in favor of Defendants on Plaintiff Beri’s individual claim for unpaid accrued vacation pay. Order Granting in Part and Denying in Part Defs.’ Mot. for Partial Summ. J., Docket No. 215, 19-22. Plaintiffs subsequently removed this cause of action from their Second Amended Complaint (2AC) and clarified at the hearing that they no longer seek certification to pursue this claim. 3 To prosecute their claims seeking injunctive and declaratory relief for their claim under California law regarding inaccurate wage statements, Plaintiffs also initially sought to certify under Rule 23(b)(2) a California current employee subclass defined as, “All non-U.S. citizens who were employed by Tata in California on or after February 14, 2006 through the date of judgment.” Mot. at 2. At the hearing on November 17, 2011, Plaintiffs clarified that they were no longer seeking certification of a Rule 23(b)(2) class. 6 1 2 On September 16, 2011, Defendants filed their opposition to Plaintiffs’ motion for class certification. 3 On September 20, 2011, Plaintiffs filed a second amended 4 complaint (2AC). 5 as to their section 221 claim based on the deduction of Indian 6 salary. 7 In the 2AC, Plaintiffs remedied the deficiency On November 3, 2011, Plaintiffs filed a revised reply. In their reply, Plaintiffs make clear that they are seeking 9 certification to prosecute on a class-wide basis their claim that 10 United States District Court For the Northern District of California 8 Defendants’ deduction of deputed employees’ Indian salaries from 11 their American salaries violated California Labor Code section 12 221. See Reply, at 20. 13 14 DISCUSSION I. Motion for Leave to File a Second Sur-reply 15 On December 2, 2011, Defendants filed a motion for leave to 16 file a second sur-reply to address certification of the class to 17 prosecute Plaintiffs’ section 221 claim for deducting class 18 members’ Indian salary from their United States compensation. 19 With their motion, Defendants submitted a proposed eight-page sur- 20 reply. 21 The Court GRANTS Defendants’ motion for leave to file a 22 sur-reply. 23 in the proposed sur-reply that address certification of the 24 California class to prosecute Plaintiffs’ section 221 claim based 25 on the deduction of Indian salary and that Defendants could not 26 have previously made in opposition to certification of the 27 national class to prosecute Plaintiffs’ breach of contract claim 28 based on the deduction of Indian salary. However, the Court will consider only those arguments 7 1 II. Defendants’ Evidentiary Objections 2 Defendants seek to strike the declarations Plaintiffs 3 submitted from putative class members, on the grounds that they 4 are “cookie cutter” declarations made without the declarants’ 5 personal knowledge, that they contradict the declarants’ 6 deposition testimony, and that eight declarants were not produced 7 for depositions. 8 9 “On a motion for class certification, the Court makes no findings of fact and announces no ultimate conclusions on United States District Court For the Northern District of California 10 Plaintiffs’ claims” and therefore “the Court may consider evidence 11 that may not be admissible at trial.” 12 Prods., Inc., 268 F.R.D. 330, 337 n.3 (N.D. Cal. 2010). 13 Defendants do not include specific evidentiary objections in their 14 opposition, as required by Local Rule 7-3, and instead make 15 general and conclusory objections to all of Plaintiffs’ 16 declarations. 17 declarations contradict the subsequent deposition testimony, the 18 discrepancies that they point out in their opposition appear 19 primarily because Defendants rely on excerpts of lengthy 20 depositions. 21 diminished when placed in the context of additional deposition 22 testimony. 23 those at issue in Evans v. IAC/Interactive Corp., 244 F.R.D. 568 24 (C.D. Cal. 2007), which contained statements that were “admittedly 25 false,” were clearly “simply made up by the declarant,” or “for 26 which the declarants lacked actual knowledge.” Id. at 578. 27 in that case, the court declined to strike the declarations at 28 issue, but instead considered these factors when determining how Keiholtz v. Lennox Hearth While Defendants argue that some of the The apparent contradictions are resolved or greatly This distinguishes the declarations at issue from 8 Even 1 much weight to give them. 2 specific facts or persuasive arguments that any of the 3 declarations were made without the declarants’ personal knowledge. 4 Defendants also seek to strike eight specific declarations on Id. at 571. Defendants offer no 5 the basis that Plaintiffs did not make the declarants available 6 for depositions. 7 cite Rojas v. Zaninovich, Inc., 2011 WL 2636071 (E.D. Cal.), in 8 which, in response to a motion to compel, the court directed the 9 plaintiffs to make “all good faith efforts” to produce a subset of In support of their argument, Defendants only United States District Court For the Northern District of California 10 class members who had submitted declarations in support of class 11 certification. 12 produce all absent class members who had done so, and warned the 13 plaintiffs that the declarations of class members who willfully 14 failed to appear for depositions would be struck. 15 Defendants failed to subpoena six of these declarants, Shaver 16 Reply Decl. ¶ 48, and did not file a motion to compel the 17 depositions of any of them. 18 19 20 The court did not require the plaintiffs to Here, however, Accordingly, Defendants’ request to strike is DENIED. III. Plaintiffs’ Evidentiary Objections Plaintiffs object to the report and supplemental report of 21 Defendants’ expert witness Bernard Siskin and to Defendants’ 2006 22 internal audit examining DTAs executed between 2000 and 2005. 23 Defendants have addressed Plaintiffs’ objections in their first 24 sur-reply. 25 Plaintiffs object to Dr. Siskin’s initial report on the basis 26 that it required no expert skill and contains errors and legal 27 conclusions unhelpful to the Court and which the expert is not 28 qualified to make. Defendants respond that Dr. Siskin’s report 9 1 contains statistical analysis for which he is qualified and that 2 his statistical summary is helpful to the Court. 3 Dr. Siskin reviews a sample of DTAs that Defendants provided to 4 Plaintiffs and provides an opinion that the typed $50,000 figure 5 was a “sample figure” and there was “no common, consistent or 6 reliable information about what U.S. compensation was promised to 7 a TCS employee.” 8 displays how frequently the blanks in DTAs were completed in 9 various ways and how the compensation amount compares to the United States District Court For the Northern District of California 10 11 In his report, The report also has data tables where Dr. Siskin amount of compensation stated in visa applications. The Court SUSTAINS in part and OVERRULES in part Plaintiffs’ 12 objections to Dr. Siskin’s report. 13 data summaries that Dr. Siskin created, and will take into account 14 the purported mistakes that Plaintiffs point out in determining 15 how much weight to accord them, and in comparing them to the 16 corresponding data summaries prepared by Plaintiffs. 17 Court excludes Dr. Siskin’s opinions. 18 does not explain the basis for his opinions. 19 demonstrate that he is an expert in contract interpretation or 20 determining whether a particular contract term was a sample or 21 intended term. 22 factors: that the figure is “in parentheses,” see Siskin Decl. ¶ 23 16; that $50,000 is typed more frequently than it is handwritten 24 and that other figures are more frequently handwritten, see id. at 25 ¶ 17; that $50,000 rarely appears on visa petitions, see id. at ¶ 26 18; and that only one of the DTAs with the figure $50,000 had a 27 “corresponding” visa petition with a compensation amount close to 28 $50,000, id. The Court will consider the However, the In his report, Dr. Siskin He does not He appears to base his opinions on several Dr. Siskin does not offer evidence of any scientific 10 1 methodology at all, let alone a reliable and valid methodology, 2 that would allow a statistician to determine that a compensation 3 amount entered on a contract did not accurately reflect what was 4 promised in that contract, even though it appeared there. 5 Defendants’ assertions, Dr. Siskin does not refer to correlations 6 or any other types of statistical tests that he used to compare 7 the figures on an objective basis; instead, he only presents the 8 data in descriptive terms and does not explain how he derives his 9 opinions from these descriptions. United States District Court For the Northern District of California 10 Despite Plaintiffs also object to Dr. Siskin’s supplemental report, 11 filed on October 26, 2011, two days before Plaintiffs’ reply 12 deadline. 13 of his data summaries with those created by Plaintiffs, using an 14 Excel document that Plaintiffs provided to him on October 17, 15 2011. 16 supplemental report to the extent Dr. Siskin puts forward the same 17 opinions as in his original report and DENIES Plaintiffs’ 18 objection to the extent it pertains to the data summaries 19 themselves. In this report, Dr. Siskin attempts to reconcile some The Court SUSTAINS Plaintiffs’ objection to the 20 Plaintiffs also object to the 2006 Internal Audit of DTAs and 21 other documents, on which Defendants rely to argue that many class 22 members did not enter into DTAs. 23 cannot locate seventy-five percent of the DTAs that were examined 24 in the audit and, thus, Plaintiffs cannot verify or challenge its 25 findings. 26 concealed and withheld the audit from discovery for years,” by 27 disclosing it for the first time with their opposition and not 28 turning it over in initial or revised disclosures or in response Plaintiffs state that Defendants Plaintiffs also assert that Defendants have “improperly 11 1 to document requests and Court orders. 2 Plaintiffs’ objection to the 2006 Internal Audit but will consider 3 Plaintiffs’ arguments in determining the amount of weight to 4 accord this evidence. 5 IV. The Court DENIES Motion for Class Certification 6 A. Legal Standard 7 Plaintiffs seeking to represent a class must satisfy the 8 threshold requirements of Rule 23(a) as well as the requirements 9 for certification under one of the subsections of Rule 23(b). United States District Court For the Northern District of California 10 Rule 23(a) provides that a case is appropriate for certification 11 as a class action if (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 representative parties will fairly and adequately protect the interests of the class. 12 13 14 15 16 17 18 Fed. R. Civ. P. 23(a). 19 may be certified as a class action only if one of the following is 20 true: 21 22 23 24 25 26 27 28 Rule 23(b) further provides that a case (1) prosecuting separate actions by or against individual class members would create a risk of: (A) inconsistent or varying adjudications with respect to individual class members that would establish incompatible standards of conduct for the party opposing the class; or (B) adjudications with respect to individual class members that, as a practical matter, would be dispositive of the interests of the other members not parties to the individual adjudications or would substantially impair or impede their ability to protect their interests; (2) the party opposing the class has acted or refused to act on grounds that apply generally to the class, so 12 1 2 3 4 5 6 7 8 9 United States District Court For the Northern District of California 10 11 that final injunctive relief or corresponding declaratory relief is appropriate respecting the class as a whole; or (3) the court finds that the questions of law or fact common to class members predominate over any questions affecting only individual members, and that a class action is superior to other available methods for fairly and efficiently adjudicating the controversy. The matters pertinent to these findings include: (A) the class members’ interests in individually controlling the prosecution or defense of separate actions; (B) the extent and nature of any litigation concerning the controversy already begun by or against class members; (C) the desirability or undesirability of concentrating the litigation of the claims in the particular forum; and (D) the likely difficulties in managing a class action. 12 Fed. R. Civ. P. 23(b). 13 California classes qualify for certification under subdivision 14 (b)(3). Plaintiffs assert that the national and 15 Plaintiffs seeking class certification bear the burden of 16 demonstrating that each element of Rule 23 is satisfied, and a 17 district court may certify a class only if it determines that the 18 plaintiffs have borne their burden. 19 Falcon, 457 U.S. 147, 158-61 (1982); Doninger v. Pac. Nw. Bell, 20 Inc., 564 F.2d 1304, 1308 (9th Cir. 1977). 21 a “‘rigorous analysis,’” which may require it “‘to probe behind 22 the pleadings before coming to rest on the certification 23 question.’” 24 (2011) (quoting Falcon, 457 U.S. at 160-61). 25 ‘rigorous analysis’ will entail some overlap with the merits of 26 the plaintiff’s underlying claim. 27 131 S. Ct. at 2551. Gen. Tel. Co. of Sw. v. The court must conduct Wal-Mart Stores, Inc. v. Dukes, 131 S. Ct. 2541, 2551 “Frequently that That cannot be helped.” Dukes, To satisfy itself that class certification is 28 13 1 proper, the court may consider material beyond the pleadings and 2 require supplemental evidentiary submissions by the parties. 3 Blackie v. Barrack, 524 F.2d 891, 901 n.17 (9th Cir. 1975). 4 Ultimately, it is in the district court’s discretion whether a 5 class should be certified. 6 (9th Cir. 2003); Burkhalter Travel Agency v. MacFarms Int’l, Inc., 7 141 F.R.D. 144, 152 (N.D. Cal. 1991). 8 B. Rule 23(a) Requirements 9 1. 10 United States District Court For the Northern District of California Molski v. Gleich, 318 F.3d 937, 946 Numerosity Defendants concede that they deputed 13,121 employees to the 11 United States between February 14, 2002 and June 30, 2005. 12 at 2. 13 6,244 California class members as of March 2010. 14 ¶ 77, Ex. 19, 5. 15 and California classes meet the numerosity requirement. 16 Accordingly, the Court finds that Plaintiffs have satisfied this 17 requirement. 18 Plaintiffs have submitted evidence that there were at least 2. 19 Opp. Hutchinson Decl. Defendants do not dispute that both the national Commonality Rule 23 contains two related commonality provisions. Rule 20 23(a)(2) requires that there be “questions of law or fact common 21 to the class.” 22 requires that such common questions predominate over individual 23 ones. 24 Fed. R. Civ. P. 23(a)(2). Rule 23(b)(3), in turn, The Ninth Circuit has explained that Rule 23(a)(2) does not 25 preclude class certification if fewer than all questions of law or 26 fact are common to the class: 27 28 The commonality preconditions of Rule 23(a)(2) are less rigorous than the companion requirements of Rule 23(b)(3). Indeed, Rule 23(a)(2) has been construed 14 1 2 3 permissively. All questions of fact and law need not be common to satisfy the rule. The existence of shared legal issues with divergent factual predicates is sufficient, as is a common core of salient facts coupled with disparate legal remedies within the class. Hanlon v. Chrysler Corp., 150 F.3d 1011, 1019 (9th Cir. 1998). 4 Plaintiffs contend that there are numerous common questions 5 of fact and law concerning Defendants’ alleged illegal employment 6 practices, including the interpretation of the standard 7 compensation clauses in the form DTA entered into by all class 8 members, whether Defendants had a policy or practice of requiring 9 deputed employees to sign over their tax refund checks to 10 United States District Court For the Northern District of California Defendants, and whether Defendants had a policy or practice of 11 deducting the Indian salary of deputed employees from their 12 American salaries, rather than paying deputed employees both 13 salaries. Plaintiffs cite a number of cases involving form 14 contracts, in which courts have found that the commonality 15 requirement was met. 16 Plaintiffs present evidence that, in all of the earnings 17 statements Defendants produced for the class period, Defendants 18 deducted the Indian salary from the American salary, Shaver Decl. 19 ¶ 8, and Defendants do not argue that they did not have a policy 20 and practice of deducting class members’ Indian salary from their 21 United States salary. Instead, Defendants assert that this case 22 does not meet Rule 23(b)(3)’s commonality provision, because no 23 form contract exists, there is no policy or practice of requiring 24 class members to sign over their tax refund checks, and there is 25 no policy or practice of providing inaccurate wage statements. 26 Defendants also argue that there is no common interpretation of 27 the purportedly ambiguous contract language. 28 15 Because Defendants 1 repeat many of their arguments in disputing that the predominance 2 requirement is met, the Court will address those arguments in its 3 discussion of predominance. 4 Defendants argue that, even though their own policies 5 required that Defendants enter into a DTA with each employee prior 6 to a deputation, many putative members of the national class did 7 not enter into any “form contract” and, thus, they do not share 8 common questions as to whether such a contract was breached. 9 Defendants point to several sources to support their contention United States District Court For the Northern District of California 10 that some class members did not enter into the form DTA contracts. 11 First, Defendants point to a 2006 internal audit, which they 12 say demonstrates that they did not consistently use DTAs, because 13 between 2000 and 2006, only “62% of TCS employees deputed to the 14 United States entered into complete DTAs.” 15 The Court finds that this audit does not provide persuasive 16 evidence that Defendants did not consistently use DTAs during the 17 class period. 18 before and after the class period for the national class, and 19 Defendants provide no evidence which would support that the 20 thirty-eight percent of TCS employees without “complete DTAs” were 21 deputed within the class period. 22 evidence that, of the small fraction of files that Defendants can 23 now locate from the audit, over forty percent were from 2006, 24 after the end of the national class period. 25 time period in the audit before the start of the class period, 26 which was approximately one-third of the time covered by the audit 27 in total, Defendants did not yet use DTAs for deputed employees. 28 Further, the audit summary does not state that the thirty-eight Mukherjee Decl. ¶ 9. The audit encompasses substantial time periods both Instead, Plaintiffs offer 16 Furthermore, for the 1 percent of deputed employees without complete DTAs did not enter 2 into a DTA with Defendants at all; instead, it indicates that 3 thirty-eight percent of the deputed employees entered into a DTA 4 that was not in “total compliance.” 5 This included, for example, a DTA missing the date or the employee 6 number. Mukherjee Decl. ¶ 9, Ex. A. Id. 7 Defendants also assert that documentary evidence proves that 8 many of the putative class members who submitted declarations did 9 not have DTAs. They state that, “out of the 35 declarants made United States District Court For the Northern District of California 10 available by Plaintiffs for deposition, only 12 of them had DTAs” 11 that can now be located, even though Defendants acknowledge that 12 additional declarants testified that they had signed DTAs. 13 at 16. 14 DTAs that they were able to locate in their own records, excluding 15 those of the two named Plaintiffs. 16 (providing copies of the DTAs of twelve deponents). 17 are unpersuasive; Defendants do not provide evidence that they 18 were able to locate all DTAs that ever existed, and there is 19 evidence that they could not: in response to Plaintiffs’ request 20 for the DTAs underlying the 2006 audit, Defendants have thus far 21 only located about 24.9% of the DTAs that were known to have 22 existed and were examined in the audit. 23 also Siskin Decl. ¶ 4 (of 466 randomly selected employees from 24 within the class period, Defendants were only able to produce 200 25 complete files). 26 documents does not mean that they did not exist at some point. Opp. Defendants appear to base their arguments on the number of See Smith Decl. ¶¶ 42-54 These numbers Reply, at 3 and n.5. See Thus, the fact that Defendants do not have these 27 Finally, Defendants assert that the deposition testimony of 28 six declarants establishes that they did not sign DTAs and imply 17 1 that the testimony contradicts information in some of their 2 declarations. 3 testimony establishes that the putative class member declarants 4 did not sign DTAs during the class period.4 5 testimony to which Defendants point only shows either that the 6 declarants did not sign a DTA prior to the start of the class 7 period or that the declarants signed various contracts with 8 Defendants during the class period and could not remember 9 specifically what each agreement was called. United States District Court For the Northern District of California 10 The Court is not persuaded that the deposition The deposition Defendants also argue that the DTA was not a form contract 11 because of variation in how the blank was completed in the section 12 of the DTA entitled, “Compensation in the United States,” quoted 13 above, and because the interpretation of the agreement could 14 require consideration of extrinsic evidence. 15 a form contract drafted by Defendants and the executed DTAs are 16 identical in regards to almost every material term, including the 17 provision stating that the employees would be paid a United States 18 salary “in addition to” the amount they are paid in India and the 19 reference to “gross compensation.” 20 “Check Loan” Contract Litigation, 274 F.R.D. 286, 291-92 (N.D. 21 Cal. 2011) (where terms of agreements were “materially similar,” 22 even though there was variation in the specific text, and “the However, the DTA is See In re Chase Bank USA, N.A. 23 24 25 26 27 28 4 Plaintiffs state that, after submitting the declaration of Sridhar Venkateswaran, they learned that he was in fact not a putative class member, because he was not employed by Defendants and was instead employed only by a separate entity, Tata Infotech, which is not a party to this case. Because Venkateswaran is not a putative class member, whether or not he signed a DTA during the class period is irrelevant here. 18 amount of damages incurred by any particular class member may 2 differ,” the differences do not defeat certification under the 3 commonality prong, “even where individualized evidence may be 4 necessary for purposes of a damages calculation”). 5 Defendants could establish some ambiguity with extrinsic evidence, 6 the ambiguous contract terms would interpreted against them, as 7 the drafters of the form contract. 8 Contracts § 206 (“In choosing among the reasonable meanings of a 9 promise or agreement or a term thereof, that meaning is generally 10 United States District Court For the Northern District of California 1 preferred which operates against the party who supplies the words 11 or from whom a writing otherwise proceeds.”); Cal. Civ. Code 12 § 1654 (“In cases of uncertainty not removed by the preceding 13 rules, the language of a contract should be interpreted most 14 strongly against the party who caused the uncertainty to exist."); 15 Tahoe National Bank v. Phillips, 4 Cal. 3d 11, 20 (1971) (“Since 16 the alleged ambiguities appear in a standardized contract, drafted 17 and selected by the bank, which occupies the superior bargaining 18 position, those ambiguities must be interpreted against the 19 bank.”). 20 issue, as there is here, “the agreement ‘is interpreted wherever 21 reasonable as treating alike all those similarly situated, without 22 regard to their knowledge or understanding of the standard terms 23 of the writing.’” 24 (N.D. Cal.) (quoting Restatement (Second) of Contracts § 211(2)). 25 “‘[C]ourts in construing and applying a standardized contract seek 26 to effectuate the reasonable expectations of the average member of 27 the public who accepts it.’” 28 Contracts § 211(2), at Comment e) (formatting in original). Even if See Restatement (Second) of Further, when there is a form contract of adhesion at Ewert v. eBay, Inc., 2010 WL 4269259, at *7 Id. (quoting Restatement (Second) of 19 1 Accordingly, in construing the form contract between Defendants 2 and class members, the Court need not delve into the actual 3 knowledge of individual class members. 4 dispute that there are at least some identical material contract 5 provisions, their arguments about the amounts in the compensation 6 blank go more properly to whether individual questions 7 predominate. 8 9 Because Defendants do not Defendants rely heavily on Wal-Mart Stores, Inc. v. Dukes, 131 S. Ct. 2541 (2011), to argue that commonality cannot be found United States District Court For the Northern District of California 10 here. 11 certification had not provided evidence sufficient to find that 12 there was a company-wide discriminatory pay and promotion policy. 13 Id. at 2555-57. 14 persuasive evidence that Defendants had a policy of requiring 15 deputed employees to sign form DTAs, which materially varied only 16 in the amount of additional compensation, and Defendants have not 17 produced convincing evidence to disprove this. 18 undisputed policy that Defendants deducted Indian salary from 19 deputed employees’ American paychecks during the class period. 20 There was an undisputed policy that Defendants sent income tax 21 refund checks to deputed employees, stamped to pay to the order of 22 Defendants. 23 generate common answers regarding whether Defendants engaged in 24 practices that violated the parties’ agreements and California 25 law. 26 27 In Dukes, the Supreme Court found that the party seeking However, here, Plaintiffs have provided There was an Accordingly, here, a class-wide proceeding will Thus, the Court finds that Plaintiffs have satisfied their burden to meet the commonality requirement. 28 20 1 2 3. Typicality Rule 23(a)(3)’s typicality requirement provides that a “class representative must be part of the class and possess the same 4 interest and suffer the same injury as the class members.” 5 Falcon, 457 U.S. at 156 (quoting E. Tex. Motor Freight Sys., Inc. 6 v. Rodriguez, 431 U.S. 395, 403 (1977)) (internal quotation marks 7 omitted). 8 interest of the named representative aligns with the interests of 9 the class.” Hanon v. Dataproducts Corp., 976 F.2d 497, 508 (9th 10 United States District Court For the Northern District of California 3 Cir. 1992). Rule 23(a)(3) is satisfied where the named plaintiffs 11 suffered the same or similar injury as the unnamed class members, 12 the action is based on conduct which is not unique to the named 13 plaintiffs, and other class members have been injured by the same 14 course of conduct. 15 however, “where a putative class representative is subject to 16 unique defenses which threaten to become the focus of the 17 litigation.” 18 Lynch, Pierce, Fenner & Smith, Inc., 903 F.2d 176, 180 (2d Cir. 19 1990). The purpose of the requirement is “to assure that the Id. Class certification is inappropriate, Id. (quoting Gary Plastic Packaging Corp. v. Merrill 20 Defendants’ arguments against typicality overlap 21 substantially with their arguments against commonality and 22 predominance. 23 same way toward Plaintiffs and the other putative class members or 24 that Defendants applied common policies to both. 25 argue that named Plaintiffs and the DTAs that they signed are not 26 typical of the class because there are no form contracts shared by 27 all class members. 28 discussing the commonality and predominance requirements. Defendants do not dispute that they acted in the Instead, they The Court addresses this argument in 21 1 Defendants also argue that Plaintiff Beri is not typical of 2 the class, because Defendants may be able to develop a mutual 3 mistake affirmative defense against her regarding the amount of 4 compensation proven. 5 First, the availability of this defense is speculative at this 6 point; Defendants do not assert that they have any evidence in 7 support of this defense, but rather state that they will develop 8 the defense through additional discovery. 9 Beri maintains that she herself was not mistaken about the However, this does not defeat typicality. Opp. at 21. Plaintiff United States District Court For the Northern District of California 10 additional compensation amount. 11 they will be able to prove a unilateral mistake defense. 12 defense would not be unique to Plaintiff Beri; Defendants claim 13 that they will assert the mutual mistake defense against other 14 class members, though again they make this claim in a speculative 15 way. 16 term ambiguous, Defendants drafted the contract, so the ambiguous 17 term would be construed in favor of Plaintiff Beri and the other 18 class members. 19 Defendants have not argued that This Further, even if mutual mistake rendered the compensation Thus, the Court finds that the interests of the named 20 Plaintiffs are reasonably co-extensive with the absent class 21 members and that the typicality requirement has been met. 22 4. Adequacy 23 Rule 23(a)(4) establishes as a prerequisite for class 24 certification that “the representative parties will fairly and 25 adequately protect the interests of the class.” 26 23(a)(4). 27 they satisfy the adequacy requirement, and the Court finds that 28 Plaintiffs have met their burden on this prong. Fed. R. Civ. P. Defendants do not dispute Plaintiffs’ assertion that 22 1 C. Rule 23(b)(3) requirements 2 1. Predominance 3 “The predominance inquiry of Rule 23(b)(3) asks whether 4 proposed classes are sufficiently cohesive to warrant adjudication 5 by representation. 6 common and individual issues.” 7 Overtime Pay Litig., 571 F.3d 953, 957 (9th Cir. 2009) (internal 8 quotation marks and citations omitted). 9 present a significant aspect of the case and they can be resolved The focus is on the relationship between the In re Wells Fargo Home Mortgage “‘When common questions United States District Court For the Northern District of California 10 for all members of the class in a single adjudication, there is 11 clear justification for handling the dispute on a representative 12 rather than on an individual basis.’” 13 (quoting 7A Charles Alan Wright, Arthur R. Miller & Mary Kay Kane, 14 Federal Practice & Procedure § 1777 (2d ed. 1986)). 15 make “some prediction as to how specific issues will play out in 16 order to determine whether common or individual issues predominate 17 . . . .” 18 Litig., 522 F.3d 6, 20 (1st Cir. 2008) (citation and internal 19 quotation marks omitted). Hanlon, 150 F.3d at 1022 A court must In re New Motor Vehicles Canadian Export Antitrust 20 a. Breach of Contract (National Class) 21 To assert a cause of action for breach of contract, a 22 plaintiff must plead: (1) the existence of a contract; (2) the 23 plaintiff’s performance or excuse for non-performance; (3) the 24 defendant’s breach; and (4) damages to the plaintiff as a result 25 of the breach. 26 Co., 116 Cal. App. 4th 1375, 1391 n.6 (2004). 27 28 Armstrong Petrol. Corp. v. Tri-Valley Oil & Gas Plaintiffs argue that common issues will predominate, because the issue central to this claim is the interpretation of specific 23 1 provisions in a form contract applicable to all class members. 2 Plaintiffs’ breach of contract claim is premised on three separate 3 types of violations: (1) that Defendants deducted class members’ 4 Indian salaries from their American salaries, even though the 5 contract stated that the American salary would be “in addition to” 6 the Indian salary; (2) that Defendants required class members to 7 sign over their tax refunds; and (3) that Defendants did not pay 8 class members the specific amount of additional United States 9 compensation that they were contractually obliged to pay. United States District Court For the Northern District of California 10 Defendants argue that individual issues would predominate in 11 determining their liability under the first type of violation, 12 because some class members authorized Defendants to deduct their 13 Indian wage from their gross wage. 14 deductions not otherwise authorized by state or federal law must 15 be “expressly authorized in writing by the employee.” 16 Code § 224. 17 such a deduction. 18 APDs in which they authorized the deduction of their Indian 19 salaries from their United States wages. 20 not demonstrate that individual issues will predominate for 21 several reasons. 22 formatting of the forms differ, the APDs are uniform in their 23 material terms and, thus, the determination of whether class 24 members who signed the APDs authorized the deduction of their 25 Indian salary from their United States salary can be made on a 26 class-wide basis. Under California law, any Cal. Lab. Thus, Defendants must have written authorization of Defendants argue that some class members signed However, these APDs do First, while the specific monetary amounts and 27 Second, contrary to Defendants’ contentions, neither the two 28 APDs produced by Defendants from within the class period, nor the 24 1 APDs from outside the class period that they proffered, 2 demonstrate that class members authorized this deduction. 3 Defendants argue that, because the APDs show that wages paid in 4 the United States are calculated by subtracting the Indian salary 5 from the deputed employee’s “Gross Wages,” the employees 6 authorized the deduction of their Indian salary from their United 7 States compensation amount. 8 However, Defendants’ conclusion conflates the total gross wages 9 and the gross wages paid in the United States and ignores that the See, e.g., Defs.’ Suppl. Brief, at 6. United States District Court For the Northern District of California 10 contracts that they drafted use the word “gross” in multiple 11 contexts. 12 employee’s “Gross Wages” is the total of the “Wages paid in India” 13 and “Wages paid in the United States.” 14 the language in the form DTAs. 15 employees will receive, “in addition to the compensation and 16 benefits you currently receive and will continue to receive in 17 India,” an “additional compensation in the United States in the 18 gross amount of $ [blank], less deductions required by law or 19 otherwise voluntarily authorized by you.” 20 “Total Gross Compensation” is the aggregate of the “amounts of 21 salary paid by TCS in India” and “the additional compensation in 22 the United States.” 23 Indian salary from the total gross compensation in order to 24 calculate the United States compensation--just as the employees 25 authorized in the DTA--but do not authorize subtraction of the 26 Indian salary from the United States compensation, which is what 27 Plaintiffs allege that Defendants did. 28 Defendants may have contracted to pay class members a net salary The APDs put in evidence show that the deputed This is consistent with The DTAs state that deputed They also state that The APDs thus authorize subtraction of the 25 Further, the fact that 1 that was calculated after specific mandatory and voluntary 2 deductions were withheld from the contracted-for gross salary does 3 not mean that Defendants could make additional deductions from the 4 gross salary beyond those which were specifically authorized, as 5 Defendants appear to argue. 6 Defendants also argue that individual issues predominate as 7 to the second type of violation, because “there is no uniform 8 policy or practice regarding tax refunds.” 9 Defendants claim that the Court would have to hold mini-trials to Opp. at 24-25. United States District Court For the Northern District of California 10 determine whether each individual employee signed a tax refund 11 check over to Defendants in a given year. 12 Rule 30(b)(6) witness, Ramakrishnan Venkataraman, testified that, 13 during the class period, Defendants’ policy and practice was that 14 “when the tax refunds are received, they have been sent to the 15 employee with a request that the tax refunds are signed and sent 16 back to the company.” 17 He also agreed that Defendants’ “practice” was to mark “the back 18 of deputed employees’ tax refund checks with a stamp that read, 19 “Pay to the order of [Defendants].” 20 Defendants also do not dispute Plaintiffs’ evidence that one 21 hundred percent of the tax refund checks that Defendants produced 22 from the period relevant to the class, with a copy of the back of 23 the check, were stamped in this way. 24 Summ. J. Order, at 16 (noting that Defendants presented evidence 25 that their “Overseas Deputation Manual stated that employees on 26 deputation were required to sign over their income tax refund 27 checks to Defendants”). 28 “misconstrue” their policy, they do not explain how. However, Defendants’ Hutchinson Decl. ¶ 7, Ex. E, Tr. 223:9-12. Id. at 223:23-224:1. Shaver Decl. ¶ 9. See also Although Defendants state that Plaintiffs 26 Instead, 1 Defendants argue that this policy was not always uniformly 2 applied, because, for example, some class members did not comply 3 with the policy--did not return the signed tax refund--or 4 sometimes Defendants did not receive a refund check for a class 5 member. 6 existence of their own acknowledged policy by asserting that 7 isolated employees failed to comply with it. 8 Buy Co., 2007 U.S. Dist. LEXIS 64224, at 29-30 (N.D. Cal.) (“Where 9 a plaintiff challenges a well-established company policy, a Opp. at 25. However, Defendants cannot disprove the See Kurihara v. Best United States District Court For the Northern District of California 10 defendant cannot cite poor management to defend against class 11 certification.”). 12 the amount of damages, which “is invariably an individual question 13 and does not defeat class action treatment.” 14 524 F.2d 891, 905 (9th Cir. 1975) (citations omitted). 15 Further, these arguments primarily relate to Blackie v. Barrack, Defendants argue that individual issues will predominate as 16 to the third type of violation, because there is no form contract 17 in that there were variations in how the blank in the 18 “Compensation in the United States” section was or was not filled 19 in. 20 mean that individual inquiries will need to be conducted to 21 ascertain how much additional compensation Defendants had promised 22 to each class member in order to determine if Defendants breached 23 this obligation. 24 Defendants argue that these variations create ambiguity and Defendants rely primarily on Sacred Heart Health Sys., Inc. 25 v. Humana Mil. Healthcare Serv., Inc., 601 F.3d 1159 (11th Cir. 26 2010). 27 in multiple contract clauses that were material to the dispute, 28 including at least thirty-three material variations of the payment However, in that case, there were significant variations 27 1 clauses, which could not be adequately addressed through 2 sub-classes. 3 variation only in one material contract term. 4 term--the specific amount of additional compensation promised-- 5 there is much less variation here than in Sacred Heart. 6 above, Defendants identify several variations in how this blank is 7 completed. 8 the DTAs were unambiguous and included a “reliable, intended, and 9 agreed compensation amount.” Id. at 1171-76. In contrast, here there is Even for that As stated Defendants concede that a substantial percentage of Opp. at 18.5 For these DTAs, United States District Court For the Northern District of California 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 5 Defendants state at several points in their opposition that fifty-nine percent of sample DTAs examined had ambiguous terms and that forty-one percent had unambiguous terms, citing the declaration of Dr. Siskin, which contains a summary of a sample of 194 DTAs executed between 2002 and 2005 that they produced to Plaintiffs following a court order. In his summary, Dr. Siskin created eight categories of DTAs, based on how the compensation field was completed, and assigned each DTA to a category. Siskin Decl. ¶ 14, Chart A; Siskin Suppl. Decl. Chart A. To calculate the number of DTAs that Defendants concede have unambiguous compensation terms, Dr. Siskin appears to have added up the number of DTAs in four of his categories in which there was a figure in the blank other than a typed $50,000, including three DTAs in which $50,000 was written in by hand. Id. Dr. Siskin included in this figure DTAs in which the number in the blank was followed by a typed $50,000 in parentheses--($50,000)--which he describes as a sample instruction on how to complete the field. Id. This totaled eighty-two DTAs. Id. In his supplemental declaration, Dr. Siskin corrected the percentage obtained by dividing eighty-two by 194 from fifty-nine percent to fifty-eight percent. Siskin Suppl. Decl. ¶ 3. He also reassigned two DTAs to a different category and assigned eleven DTAs to categories, which he stated he had previously been unable to do. Id. at ¶¶ 5-8. He also stated that, if he limited his analysis to the 143 DTAs he found to be executed within the class period, he would characterize approximately twenty-nine percent of the DTAs as unambiguous. Id. at ¶ 5. 28 1 extrinsic evidence of intent would be inadmissible, and thus gross 2 wages could be determined on a common basis, supporting a finding 3 of predominance. 4 For the remaining DTAs, Defendants argue that there is 5 ambiguity in the amount of compensation promised, which would 6 necessitate individualized inquiries into the intent of the 7 parties to ascertain the intended amount. 8 compensation fields completed in the following three manners: 9 (1) ______;6 (2) $50,000; (3) ______ ($50,000). These DTAs have Defendants also United States District Court For the Northern District of California 10 assert that this term is ambiguous for class members for whom DTAs 11 cannot be located. 12 with ambiguous compensation terms, individual extrinsic evidence 13 will be required to determine the parties’ intent and thus 14 individual issues would predominate. 15 Defendants contend that, for the class members Extrinsic evidence is only admissible if contract terms are 16 ambiguous. 17 involves a two-step process. 18 App. 4th 1343, 1351 (2004). Under California law, the interpretation of a contract Wolf v. Superior Court, 114 Cal. First, the court provisionally 19 20 21 In their analysis of the same sample, Plaintiffs calculated that thirty-three percent of the 172 DTAs executed within the class period had a compensation term other than $50,000 in the relevant blank. Shaver Decl. ¶ 11. 22 23 24 25 26 27 28 Thus, the parties agree that approximately a third or more of the DTAs contain an unambiguous additional compensation amount. 6 Dr. Siskin separates DTAs in which the fields are completed in the following two ways: ______ and ______(______). See Siskin Decl. ¶ 14, Chart A; Siskin Suppl. Decl. Chart A. In their opposition brief, Defendants do not draw an analytical distinction between these categories, and the Court finds none. Accordingly, the Court considers these variations to be the same for the purposes of its analysis. 29 1 receives all credible evidence concerning the parties’ intentions 2 to determine if there is an ambiguity. 3 v. G.W. Drayage & Rigging Co., Inc., 69 Cal. 2d 33, 39-40 (1968). 4 Thus, the court will examine the proffered evidence concerning the 5 parties’ intentions in order to determine whether the disputed 6 terms are ambiguous. 7 court determines the language of the contract is ambiguous, the 8 extrinsic evidence is admitted to aid in the second step: 9 interpreting the contract. Id.; Pac. Gas & Elec. Co. If, in light of the extrinsic evidence, the Id. However, as previously noted, United States District Court For the Northern District of California 10 where a form contract of adhesion is at issue, the court will, 11 wherever reasonable, interpret the agreement “as treating alike 12 all those similarly situated, without regard to their knowledge or 13 understanding of the standard terms of the writing” in order to 14 “effectuate the reasonable expectations of the average member of 15 the public who accepts it.” 16 at *7 (N.D. Cal.) (quoting Restatement (Second) of Contracts 17 § 211(2) & Comment e). Ewert v. eBay, Inc., 2010 WL 4269259, 18 Defendants argue that all contracts that fall into the second 19 and third category (approximately forty-two percent of the sampled 20 DTAs) are ambiguous, because the typed $50,000 is a sample amount, 21 not the amount that the parties intended as compensation. 22 Defendants do not proffer persuasive evidence that $50,000, when 23 typed, is a sample amount. 24 conclusory declaration. 25 Siskin demonstrate that he is an expert in contract interpretation 26 or in determining whether a particular contract term was a sample 27 or intended term. 28 methodology at all, let alone a reliable and valid one, that would Defendants cite only Dr. Siskin’s However, neither Defendants nor Dr. Neither has offered evidence of any scientific 30 1 allow a statistician to determine that a compensation amount 2 entered on a contract did not accurately reflect what was promised 3 in that contract, even though it appeared there. 4 substantially reduced any persuasive force that his declaration 5 may have had by testifying in his deposition that, for a 6 particular DTA with which he was presented, he did not believe 7 $50,000 was a sample amount. 8 Tr. 103:3-9. Dr. Siskin also See Hutchinson Reply Decl., Ex. A, Defendants also argue that some unknown fraction of contracts 10 United States District Court For the Northern District of California 9 in the second and third category may be rendered ambiguous because 11 they may present evidence that class members signed other 12 documents stating a different compensation amount. 13 documents that Defendants allude to are APDs. 14 do not present evidence that the compensation amounts in the APDs 15 ever differed from those in the corresponding DTAs. 16 also argue that they may present evidence that some class members 17 did not believe that $50,000 was the correct amount of their 18 additional compensation, even though this was the only figure 19 shown in the DTA. 20 members’ visa petitions had a different compensation amount than 21 that on their DTAs and that certain class members testified that 22 they thought they would be compensated the amount in their visa 23 petitions. 24 individual issues will predominate for a variety of reasons. 25 First, Defendants do not offer credible evidence that the terms in The only such However, Defendants Defendants In support, Defendants assert that some class However, this argument does not demonstrate that 26 27 28 31 1 the deponents’ visa petitions differed from those in their DTAs.7 2 Further, even if they did, the visa petitions were not contracts 3 between deputed employees and Defendants, but instead were sworn 4 petitions prepared and submitted by Defendants to the United 5 States government without the participation of the deputed 6 employee. 7 was a form adhesion contract, the understanding of the individual 8 class members of its terms is not relevant. 9 will effectuate the reasonable expectations that an employee would United States District Court For the Northern District of California 10 11 Additionally, as previously stated, given that the DTA Instead, the Court have of the meaning of the contract. Further, as previously recognized, the Court will construe 12 ambiguous terms against Defendants, as the drafting parties. 13 Thus, if there were evidence of ambiguity in the DTAs in the 14 second and third categories, the Court must take into account that 15 Defendants drafted all the documents signed by the class members, 16 introduced any ambiguity into the documents, and were in a 17 superior bargaining position to the class members at the time that 18 the documents were signed. 19 Plaintiffs concede that there is ambiguity as to the 20 compensation term for the class members with DTAs that are 21 completely missing a number--less than fifteen percent of the 22 23 24 25 26 27 28 7 The Court accords little or no weight to Dr. Siskin’s testimony comparing salaries on the visa petitions in a sample of employment records to salaries on the DTAs in those records. Dr. Siskin “matches” DTAs and visa petitions to one another based on which of these documents is “closest in date,” as long they are dated less than a year apart. Siskin Decl. ¶ 10. However, he also acknowledges in his declaration that “the dates on the visa petitions and DTAs are rarely the same,” and that many employees have multiple visa petitions and DTAs. Id. 32 1 sample of DTAs produced, according to the data summaries prepared 2 by both parties--and for class members without an DTA that can be 3 currently located. 4 putative class falls into the latter category. 5 only to two specific sources of extrinsic proof, both documents 6 that contain some figure for the amount of gross salary: an APD, 7 which some class members signed, and the visa petitions, which 8 Defendants filed on behalf of each deputed employee. 9 23-24.8 It is not clear what percentage of the Defendants point Opp. at 9, These are standard forms that are susceptible to proof on United States District Court For the Northern District of California 10 a class-wide basis as well. 11 2009 U.S. Dist. LEXIS 108768, at *37 (C.D. Cal.) (where the 12 extrinsic evidence relevant to interpreting an ambiguous contract 13 can be established on a class-wide basis, “it cannot be said that 14 individual issues predominate” as to the breach of contract 15 claim). 16 See Menagerie Prods. v. Citysearch, Accordingly, the Court finds that Plaintiffs have met their 17 burden to demonstrate that issues for the breach of contract claim 18 common to the national class predominate over issues affecting 19 only individual members. b. Wrongful Collection of Wages (Cal. Labor Code § 221) (California Class) 20 21 California Labor Code section 221 provides, “It shall be 22 unlawful for any employer to collect or receive from an employee 23 any part of wages theretofore paid by said employer to said 24 25 26 27 28 8 While Defendants point to deposition testimony as well, they do so only to support that visa petitions may be an extrinsic source of information about the intended amount of compensation. Opp. at 24. 33 1 employee.” 2 labor performed by employees of every description, whether the 3 amount is fixed or ascertained by the standard of time, task, 4 piece, commission basis, or other method of calculation.’” 5 Prachasaisoradej v. Ralphs Grocery Co., Inc., 42 Cal. 4th 217, 226 6 (2007) (quoting Cal. Lab. Code § 200(a)). 7 adopted to prevent the use of secret deductions or ‘kickbacks’ to 8 make it appear the employer is paying a required or promised wage, 9 when in fact it is paying less.” “‘Wages’ for this purpose ‘includes all amounts for Section 221 “was Prachasaisoradej, 42 Cal. 4th at United States District Court For the Northern District of California 10 231 (citing Kerr’s Catering Serv. v. Dep’t of Indus. Relations, 57 11 Cal. 2d 319, 328 (1962)). 12 violated section 221 in two ways: (1) by deducting their Indian 13 salary from their United States compensation and (2) by requiring 14 them to sign over their tax refund checks to Defendants. 15 Defendants’ arguments against predominance for Plaintiffs’ section 16 221 claim are already addressed above regarding breach of 17 contract. 18 Plaintiffs contend that Defendants Many of Defendants argue that Plaintiffs cannot prove the intended 19 compensation amount on a class-wide basis. 20 total compensation is not relevant to this claim, which simply 21 requires proof that Defendants deducted their Indian salary from 22 their United States salary, that Defendants required class members 23 to sign over their tax refund checks and that class members did 24 not give express authorization for these deductions. 25 Lab. Code § 224 (deductions not otherwise authorized by state or 26 federal law must be “expressly authorized in writing by the 27 employee”). 28 34 However, proof of See Cal. 1 Defendants contend that some declarants signed APDs in which 2 they gave Defendants express authorization to take deductions from 3 their wages. 4 declarants did not expressly authorize Defendants to keep the 5 over-withheld tax deductions or to deduct their Indian salary from 6 their United States salary. 7 that individual issues will predominate. 8 9 United States District Court For the Northern District of California 10 11 12 Opp. at 28. While this may be true, these Thus, the APDs do not provide proof Accordingly, Plaintiffs have met the predominance requirement for their section 221 claim predicated on unlawful collection of tax refunds and deduction of Indian salary. c. Failure to Provide Accurate Itemized Wage Statements (Cal. Labor Code § 226(a)) (California Class) 13 California Labor Code section 226(a) mandates, in pertinent 14 part, “Every employer shall furnish each of his or her employees 15 . . . an accurate itemized statement in writing showing (1) gross 16 wages earned, . . . (4) all deductions, provided that all 17 deductions made on written orders of the employee may be 18 aggregated and shown as one item, (5) net wages earned . . . .” 19 Section 226(e) provides, “An employee suffering injury as a result 20 of a knowing and intentional failure by an employer to comply with 21 subdivision (a)” is entitled to certain statutory compensation for 22 each pay period in which the violation occurred and an award of 23 costs and attorneys’ fees. 24 Plaintiffs argue that Defendants violated section 226 by 25 (1) inaccurately reporting the number of tax exemptions for class 26 members; and (2) inaccurately reporting the gross and net incomes 27 of class members by failing to disclose class members’ payments to 28 35 1 the company in tax refund checks and the money that Defendants 2 deducted for class members’ Indian salary.9 3 Defendants contend that section 226 does not require them to 4 list tax exemptions on the wage statements. 5 reply, Plaintiffs do not contend that section 226 requires that 6 exemptions be accurately reported on wage statements, and instead 7 argue that “inaccurately reporting tax exemptions . . . resulted 8 in inaccurate deductions of Class members’ salary for federal and 9 state taxes,” which is a violation of section 226. Opp. at 29. In their Reply, at 23. United States District Court For the Northern District of California 10 However, while Plaintiffs have alleged that Defendants commonly 11 changed class members’ exemptions, Plaintiffs have not submitted 12 proof that these changes were incorrect or resulted in inaccurate 13 withholding that was common to the California class. 14 primarily rely on the declaration of Anne Shaver, in which she 15 summarizes changes in exemptions found in a small number of sets 16 of earnings statements produced by Defendants.10 17 asserts that over half of the sets of earnings statements examined 18 show that there was a change of two or more in the number of 19 exemptions from month-to-month or year-to-year; however, Ms. 20 Shaver acknowledges that there is no evidence as to why these 21 22 23 24 25 26 27 Plaintiffs Ms. Shaver 9 At the hearing, Plaintiffs’ counsel stated that this claim was also premised on the failure to pay the full amount of additional salary promised; however, this was not alleged in the complaint or argued in the motion for class certification. Accordingly, the Court does not reach this argument. 10 While Defendants produced 197 sets of monthly earning statements, only thirty-three listed the number of exemptions and thus Ms. Shaver’s summary is based on only those thirty-three sets of earning statements. Shaver Decl. ¶ 10. 28 36 1 changes were made, that they were inaccurate, or that they were 2 made without authorization. 3 the class member declarations that Plaintiffs submit show that the 4 number of exemptions changed for only some class members, that it 5 changed in different ways, and that the change was sometimes 6 accurate and sometimes inaccurate. 7 plan also recognizes that these changes may have been proper in 8 individual cases. 9 Court finds that Plaintiffs have not established that common Shaver Decl. ¶ 10 & n.2. Further, Plaintiffs’ proposed trial Pls.’ Proposed Trial Plan, at 6. Thus, the United States District Court For the Northern District of California 10 issues would predominate as to their section 226 claim based on 11 inaccurate reporting of the number of tax exemptions for class 12 members. 13 However, to the extent that Plaintiffs’ section 226 claim is 14 predicated on Defendants’ failure accurately to report gross and 15 net wages and deductions, by failing to reflect class members’ 16 payments to the company in tax refund checks and the money that 17 Defendants deducted for Indian salaries, the predominance 18 requirement has been met. 19 through the same common proof as the breach of contract and 20 section 221 claims, addressed above. 21 wage statements accurately show the net pay to the class members; 22 however, the fact that wage statements showed the amount on the 23 pay checks is irrelevant to Plaintiffs’ arguments that Defendants 24 paid deputed employees an incorrect amount. 25 that Plaintiffs cannot show the proper gross compensation through 26 common proof; this is also irrelevant, because if Plaintiffs prove 27 that deputed employees were improperly required to pay Defendants 28 back their wages, the wage shown on the statements would be Plaintiffs argue that this can be shown 37 Defendants respond that the Defendants also argue 1 inaccurate regardless of amount. 2 Starbucks Corp., 192 Cal. App. 4th 1136, 1142-43 (2011), 3 Defendants argue that Plaintiffs “fail to demonstrate any injury 4 suffered by putative class members due to the allegedly inaccurate 5 wage statements.” 6 California Court of Appeal held that the mere omission of one of 7 the required terms, without an allegation that the information was 8 inaccurate, was insufficient to allege injury. 9 distinguished cases where the plaintiffs had “to engage in Finally, relying on Price v. However, Price is inapplicable; there, the The court United States District Court For the Northern District of California 10 discovery and mathematical computations . . . to determine if they 11 were correctly paid.” 12 already rejected this argument. 13 (rejecting Defendants’ argument that “plaintiffs fail to allege 14 injury suffered as a result of defendants’ violation of section 15 226,” because “failure to provide accurate wage statements alone 16 has been held to be an injury to employees”). 17 Id. at 1143. Further, the Court has See Order on Mot. to Dismiss, 12 Accordingly, the Court finds that Plaintiffs have met their 18 burden to establish predominance for their section 226 claim 19 predicated on Defendants’ failure to account for class members’ 20 payments to the company in tax refund checks or the Indian salary 21 deduction, but not for Defendants’ inaccurate reporting of the 22 number of tax exemptions. 23 d. Waiting Period Penalties (Cal. Labor Code §§ 201-203) (California Class) 24 California Labor Code section 201(a) provides, “If an 25 employer discharges an employee, the wages earned and unpaid at 26 the time of discharge are due and payable immediately.” 27 California Labor Code section 203 provides that employees “not 28 38 1 having a written contract for a definite period of time” who quit 2 employment are entitled to payment of wages either at time of 3 quitting if they have given seventy-two hours previous notice or 4 within seventy-two hours thereafter if they have not given such 5 notice. 6 fails to pay . . . in accordance with Sections 201, 201.5, 202, 7 and 205.5, any wages of an employee who is discharged or quits, 8 the wages of the employee shall continue as a penalty from the due 9 date thereof at the same rate until paid or until an action Section 203 further provides, “If an employer willfully United States District Court For the Northern District of California 10 therefor is commenced; but the wages shall not continue for more 11 than 30 days.” 12 Plaintiffs allege that Defendants have violated Labor Code 13 sections 201 through 203 by failing properly to compensate deputed 14 employees at the time of discharge for: (1) the Indian wages that 15 Defendants deducted from their United States wages; (2) the wages 16 that Defendants required deputed employees to sign over to them 17 through the tax refund checks; and (3) the amount of unpaid 18 additional compensation promised in the DTAs. 19 violations are predicated on the breach of contract and section 20 221 claims, Plaintiffs assert that common questions predominate 21 over individual questions for the same reasons. 22 Because these In response, Defendants again argue that Plaintiffs cannot 23 establish the amount of compensation that class members were 24 promised through common proof. 25 not relevant to all of the theories of liability. 26 argue that common questions do not predominate, because Defendants 27 may be able to file counter-claims against some class members who This is addressed above, and is 28 39 Defendants also 1 “absconded from TCS and did not fulfill their post-deputation 2 obligations.” 3 Opp. at 30. However, “the existence of counterclaims . . . will not 4 usually bar a finding of predominance of common issues.” 5 Newberg § 4:26. 6 have not identified any actual putative class members who have 7 absconded and have not provided an estimate of how many class 8 members may have done so. 9 against most class members would be barred by the four year 2 Defendants have not filed any counter-claims, As Plaintiffs point out, counter-claims United States District Court For the Northern District of California 10 statute of limitations. 11 support the proposition that mere speculation about possible 12 counter-claims will bar certification. Defendants have not cited any cases to 13 Thus, Plaintiffs have satisfied their burden as to 14 predominance of common issues in their waiting period penalties 15 claim to the same extent as with the underlying violations. 16 17 e. UCL Claim (California Class) California’s Unfair Competition Law (UCL) prohibits any 18 unlawful, unfair or fraudulent business act or practice.” 19 Bus. & Prof. Code § 17200. 20 treats violations of those laws as unlawful business practices 21 independently actionable under state law. 22 Omaha Life Ins. Co., 225 F.3d 1042, 1048 (9th Cir. 2000). 23 Violation of almost any federal, state or local law may serve as 24 the basis for a UCL claim. 25 App. 4th 832, 838-39 (1994). 26 Defendants’ alleged violations of California Labor Code § 221. 27 Thus, the predominance of common questions for this claim mirrors 28 that of the section 221 claim. Cal. The UCL incorporates other laws and Chabner v. United of Saunders v. Superior Court, 27 Cal. Plaintiffs’ UCL claim is premised on 40 1 2 2. Superiority Defendants’ only argument that class action treatment is not 3 superior is that class members “who were deputed to the U.S. in 4 multiple years” would likely have claims worth “tens of thousands 5 of dollars” and, thus, class members have sufficient monetary 6 incentive to bring individual suits. 7 Defendants do not argue that all putative class members would have 8 what they characterize as “large” claims. 9 the record that some class members were deputed to the United Opp. at 31. Notably, There is evidence in United States District Court For the Northern District of California 10 States for less than a year during the class period. 11 Gunalan Decl. ¶ 3 (deputed for less than a year of the class 12 period); Karmakar Decl. ¶¶ 3-4 (deputed for less than six months 13 of the class period); Malnedi Decl. ¶¶ 3 (deputed, over the course 14 of two deputations to the United States, for less than a year of 15 the class period). 16 Inst., Inc., 253 F.3d 1180 (9th Cir. 2001), found that the 17 superiority factor weighed against class certification when 18 damages suffered by each class member were large, in that case, 19 the court found that the damages for each class member exceeded 20 $50,000. 21 of the named Plaintiffs seeks under $25,000 in damages. 22 Smith v. Cardinal Logistics Mgmt. Corp., 2008 U.S. Dist. LEXIS 23 117047, at *32 (N.D. Cal.) (where “full recovery would result in 24 an average amount of damages of $25,000-$30,000 per year of work 25 for each class member” and “not all of the putative class members 26 worked for the entire class period of approximately five years, 27 the Court cannot conclude that the damages sought are large enough 28 to weigh against a class action”). See, e.g., While the court in Zinser v. Accufix Research Id. at 1190-91. Here, Defendants acknowledge that one 41 See also 1 Further, Plaintiffs have argued that many class members fear 2 retaliation from Defendants if they file individual suits and that 3 many class members currently reside in India, which would pose 4 substantial barriers to bringing individual actions. 5 have not disputed these arguments. 6 Defendants Thus, the Court finds that Plaintiffs have demonstrated that 7 class treatment is superior to litigating individual cases. 8 V. 9 United States District Court For the Northern District of California 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Appointment of Class Counsel Rule 23(g)(1) of the Federal Rules of Civil Procedure provides in part: Unless a statute provides otherwise, a court that certifies a class must appoint class counsel. In appointing class counsel, the court: (A) must consider: (i) the work counsel has done in identifying or investigating potential claims in the action; (ii) counsel’s experience in handling class actions, other complex litigation, and the types of claims asserted in the action; (iii) counsel’s knowledge of the applicable law; and (iv) the resources that counsel will commit to representing the class; (B) may consider any other matter pertinent to counsel’s ability to fairly and adequately represent the interests of the class; (C) may order potential class counsel to provide information on any subject pertinent to the appointment and to propose terms for attorney’s fees and nontaxable costs; (D) may include in the appointing order provisions about the award of attorney’s fees or nontaxable costs under Rule 23(h); and (E) may make further orders in connection with the appointment. Fed. R. Civ. P. 23(g)(1). Plaintiffs represent that their counsel, the law firms of Rukin, Hyland, Doria & Tindall, LLP (RHDT) and Lieff, Cabraser, 42 1 Heimann & Bernstein, LLP (LCHB), have invested significant time 2 and resources to investigating and developing the legal claims in 3 this case thus far, that they are seasoned and experienced in 4 handling class actions of this nature, that they are knowledgeable 5 of the relevant law, and that they will continue to commit ample 6 resources to representing the class. 7 declarations and other evidence in support thereof. 8 Decl. ¶¶ 1-20 (describing his and RHDT’s experience litigating 9 class action employment matters, the efforts of Plaintiffs’ Plaintiffs have submitted See Tindall United States District Court For the Northern District of California 10 counsel on behalf of the class thus far and their commitment to 11 continue to represent the class vigorously in the future); Dermody 12 Decl. ¶¶ 1-5 (describing her experience litigating class action 13 employment matters and providing a firm resume for LCHB). 14 Defendants do not oppose the appointment of their attorneys as 15 class counsel. 16 17 Accordingly, the Court GRANTS Plaintiffs’ motion for appointment of their counsel as class counsel. 18 CONCLUSION 19 For the foregoing reasons, Plaintiffs’ motion for class 20 certification (Docket No. 185) is GRANTED IN PART and DENIED IN 21 PART. 22 “all non-U.S. citizens who were employed by Tata in the United 23 States at any time from February 14, 2002 through June 30, 2005 24 and who were deputed to the United States after January 1, 2002.” 25 This class may prosecute Plaintiffs’ breach of contract claims. 26 The Court certifies a California class, defined as “all non-U.S. 27 citizens who were employed by Tata in California at any time from 28 February 14, 2002 through June 30, 2005 and who were deputed to The Court certifies a national class, defined as 43 1 California after January 1, 2002.”11 2 Plaintiffs’ claims for wrongful collection of wages, failure to 3 provide accurate itemized wage statements, waiting period 4 penalties and violation of the UCL, except to the extent that 5 Plaintiffs’ section 226 claim is based on the inaccurate reporting 6 of the number of tax exemptions. 7 of Lieff, Cabraser, Heimann & Bernstein, LLP and Rukin Hyland 8 Doria & Tindall LLP as class counsel. This class may prosecute The Court APPOINTS the law firms The parties shall appear for a case management conference to 10 United States District Court For the Northern District of California 9 set future deadlines in this case on Wednesday, April 25, 2012 at 11 2:00 p.m. 12 statement by April 18, 2012. 13 IT IS SO ORDERED. The parties shall submit a joint case management 14 15 Dated: 4/2/2012 16 CLAUDIA WILKEN United States District Judge 17 18 19 20 21 22 11 23 24 25 26 27 28 Plaintiffs have requested that the California class include individuals employed by Tata through the date of judgment. Because Defendants changed their policies regarding income tax returns and deduction of the Indian salary from the United States salary in July 2005, the Court limits the California class to include only individuals who were employed by Tata through June 30, 2005. However, the class may pursue claims for waiting time penalties that accrued after June 30, 2005 for failure to pay wages that were earned before that date or that were improperly deducted before that date. 44

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