Altier v. Worley Catastrophe Response, LLC et al

Filing 187

ORDER denying 120 Motion to Certify Class. Signed by Magistrate Judge Joseph C. Wilkinson, Jr. (Reference: 11-242)(car, )

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
JOHN J. ALTIER

CIVIL ACTION

VERSUS

NO. 11-241 c/w 11-242
PERTAINS TO NO. 11-242

WORLEY CATASTROPHE
RESPONSE, LLC ET AL.

MAGISTRATE JUDGE
JOSEPH C. WILKINSON, JR.

ORDER AND REASONS ON MOTION
Plaintiff, John J. Altier, brought Civil Action No. 11-242 as a putative class action
pursuant to Louisiana substantive law and Fed. R. Civ. P. 23 against defendant Worley
Catastrophe Response, LLC. Complaint, Civil Action No. 11-242, Record Doc. No. 1.
The Second Amended Complaint added 44 more plaintiffs and Worley Catastrophe
Services, LLC as a defendant (collectively “Worley”).1
This case arises from the massive oil spill that followed the explosion of the
Deepwater Horizon offshore drilling rig operated by BP Exploration & Production Inc.
(“BP”). Worley, which had a contract with BP (or, at different times, with BP’s
subcontractor or designee) (collectively “BP”), hired Altier and the other plaintiffs as
claims adjusters, also known as claims evaluators, to evaluate claims brought against BP

1

Defendants assert in various pleadings that the original defendant, Worley Catastrophe
Response, LLC, was never the employer of any plaintiff and that Worley Catastrophe Services, LLC
was the employer. However, Worley Catastrophe Response, LLC has not been dismissed.

by third parties affected by the oil spill. Altier filed this action individually and on behalf
of similarly situated adjusters, seeking additional wages that defendant allegedly failed
to pay them in breach of the employment agreements that each plaintiff signed with
Worley and on the basis of unjust enrichment. Plaintiffs seek class certification,
compensatory damages, punitive damages, attorney’s fees and costs. Second Amended
Complaint, Record Doc. No. 111.
This matter was recently referred to a United States Magistrate Judge for all
proceedings and entry of judgment in accordance with 28 U.S.C. § 636(c) upon written
consent of all parties. Record Doc. No. 138.
Plaintiffs moved for certification of a class action pursuant to Federal Rule of Civil
Procedure 23. Record Doc. No. 120. If a class is certified, plaintiffs ask that Worley be
compelled to turn over contact information for the potential class members. They also
seek the court’s approval of a proposed notice to be sent to potential class members and
of a 90-day deadline for class members to opt out of this action after being notified.
Plaintiffs seek to certify a class consisting of
all current and former employees of Worley Catastrophe Response, LLC
and/or Worley Catastrophe Services, LLC (collectively “Worley”), who:
Occupied the position(s) of claims adjuster (a/k/a claims evaluator)
in support of Worley’s role in providing services related to business and
property damages arising from the 2010 explosion at the Deepwater

2

Horizon offshore drilling rig operated by BP Corporation North America,
Inc. (“BP”); and
Signed a written employment Agreement with Worley.
Record Doc. No. 120, Motion for Class Certification Pursuant to Federal Rule of Civil
Procedure 23, at pp. 1-2.
Worley filed a timely memorandum in opposition to the motion. Record Doc.
No. 157. Plaintiffs received leave to file a reply memorandum. Record Doc. Nos. 165,
168, 169.
Having considered the record; the complaint, as amended; the submissions and
arguments of the parties; and the applicable law, IT IS ORDERED that plaintiffs’ motion
to certify a class action is DENIED, for the following reasons.
I.

CLASS ACTIONS UNDER FED. R. CIV. P. 23
Federal Rule of Civil Procedure 23 provides that one or more members of a class

may sue as representative parties on behalf of all members only if the proposed class
satisfies the threshold requirements of Rule 23(a) and one of three possible types of
classes under Rule 23(b). Plaintiffs bear the evidentiary burden to show that their
proposed class meets all the requirements of both Rule 23(a) and whichever Rule 23(b)
subpart supplies the framework for the type of class sought to be certified. Madison v.
Chalmette Ref., L.L.C., 637 F.3d 551, 554-55 (5th Cir. 2011). The United States
Supreme Court recently summarized plaintiffs’ burden as follows.
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Rule 23 does not set forth a mere pleading standard. A party seeking
class certification must affirmatively demonstrate his compliance with the
Rule–that is, he must be prepared to prove that there are in fact sufficiently
numerous parties, common questions of law or fact, etc. We recognized in
[Gen. Tel. Co. v. Falcon, 457 U.S. 147 (1982)] that “sometimes it may be
necessary for the court to probe behind the pleadings before coming to rest
on the certification question,” . . . and that certification is proper only if
“the trial court is satisfied, after a rigorous analysis, that the prerequisites
of Rule 23(a) have been satisfied,” . . . ; (“[A]ctual, not presumed,
conformance with Rule 23(a) remains . . . indispensable”). Frequently that
“rigorous analysis” will entail some overlap with the merits of the
plaintiff’s underlying claim. That cannot be helped. “[T]he class
determination generally involves considerations that are enmeshed in the
factual and legal issues comprising the plaintiff’s cause of action.”
Wal-Mart Stores, Inc. v. Dukes, 131 S. Ct. 2541, 2551 (2011) (quoting Falcon, 457 U.S.
at 160, 161) (internal quotations omitted) (emphasis added).
Because of “the important due process concerns of both plaintiffs and defendants
inherent in the certification decision,” the “plain text of Rule 23 requires the court to
‘find,’ not merely assume, the facts favoring class certification.” Madison, 637 F.3d at
554, 555 (quotations omitted). The district court “must understand the claims, defenses,
relevant facts, and applicable substantive law in order to make a meaningful
determination of the certification issues. The court must also consider how a trial on the
merits would be conducted if the class were certified.” Cole v. Gen. Motors Corp., 484
F.3d 717, 724 (5th Cir. 2007) (quotations and citations omitted).

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A.

Standing

In opposition to plaintiffs’ motion for class certification, Worley argues that, as
a threshold jurisdictional matter, some of the named plaintiffs never signed employment
agreements with it and therefore lack standing to bring breach of contract claims for
themselves or on behalf of putative class members. Worley does not argue that all 45
named plaintiffs lack standing, but contends that a class cannot be certified because
several plaintiffs do not fall within the proposed class definition.
Before [the court] reach[es] the questions regarding the class
certification, we must resolve the standing question as a threshold matter
of jurisdiction. . . .
At an “irreducible constitutional minimum,” to have standing,
plaintiffs must establish three elements. First, plaintiffs must show that
they have suffered “an injury in fact–an invasion of a legally protected
interest which is (a) concrete and particularized and (b) ‘actual or
imminent, not conjectural or hypothetical.’” Second, plaintiffs must
establish “a causal connection between the injury and the conduct
complained of.” Finally, it must be likely that the injury “will be redressed
by a favorable decision.”
. . . . [I]t is sufficient for standing purposes that the plaintiffs seek
recovery for an economic harm that they allege they have suffered.
Id. at 721-22 (quoting Lujan v. Defenders of Wildlife, 504 U.S. 555, 560 (1992)) (citing
Parker v. Dist. of Columbia, 478 F.3d 370, 377 (D.C. Cir. 2007)).
Worley identifies two named plaintiffs with whom it had no written employment
contracts and cites six plaintiffs whose written contracts with it predated the BP oil spill.
Defendant asserts that these six contracts were “different” from the contracts signed by
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Altier and the other adjusters on the BP oil spill project. Defendant’s Exh. A, declaration
under penalty of perjury of Allen Carpenter, Manager of Corporate Compliance at
Worley Catastrophe Response, LLC, Record Doc. No. 157-1, ¶¶ 10-11. Thus, Worley
argues, these eight plaintiffs have no standing to sue on the employment agreement on
which the other named plaintiffs rely for their breach of contract allegations.
Defendant’s argument does not defeat class certification. The proposed class
definition limits class membership to those adjusters who worked with Worley in support
of the BP oil spill project, signed a written employment agreement substantially identical
to the ones attached as Plaintiffs’ Exhibit 8 to their motion for certification, and suffered
economic injury as a result of Worley’s alleged breach of that agreement. Worley has
identified at most eight, and as few as two, of 45 named plaintiffs who did not sign such
contracts. Because defendant has not shown how the prior contracts are “different,” the
court cannot find at this time that those contracts are so different from those submitted
to the court by many of the other named plaintiffs that those six persons are not members
of the putative class.
If a class is certified, any named or putative plaintiffs who did not sign such an
employment agreement are, by definition, excluded from the class. Any named plaintiffs
who are not class members can be dismissed. Therefore, the named plaintiffs have
standing to pursue this class action.
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B.

The Prerequisites of Rule 23(a)

Rule 23(a) contains four prerequisites that must be satisfied in all cases:
One or more members of a class may sue or be sued as representative
parties on behalf of all members only 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.
Fed. R. Civ. P. 23(a).
The class action is an exception to the usual rule that litigation is conducted
by and on behalf of the individual named parties only. In order to justify
a departure from that rule, a class representative must be part of the class
and possess the same interest and suffer the same injury as the class
members. Rule 23(a) ensures that the named plaintiffs are appropriate
representatives of the class whose claims they wish to litigate. The Rule’s
four requirements–numerosity, commonality, typicality, and adequate
representation–effectively limit the class claims to those fairly
encompassed by the named plaintiff’s claims.
Dukes, 131 S. Ct. at 2550 (quotations and citations omitted).
“Within the confines of Rule 23, a district court maintains substantial discretion
in determining whether to certify a class.” Braud v. Transp. Servs. of Ill., No. 05-1898,
2009 WL 2208524, at *7 (E.D. La. July 23, 2009) (Knowles, M.J.) (citing Smith v.
Texaco, 263 F.3d 394, 403 (5th Cir. 2001); Berger v. Compaq Computer Corp., 257 F.3d
475, 479-80 (5th Cir. 2001)). If plaintiffs fail to prove any requirement of Rule 23(a) and
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one of the Rule 23(b) categories, “the court must refuse to certify the class.” Myers v.
BP Am., Inc., No. 08-0168, 2009 WL 2341983, at *5 (W.D. La. July 29, 2009) (Doherty,
J.) (citing Castano v. Am. Tobacco Co., 84 F.3d 734, 746 (5th Cir. 1996); Redditt v.
Miss. Extended Care Ctrs., Inc., 718 F.2d 1381, 1387 (5th Cir.1983); Huff v. N.D. Cass
Co., 485 F.2d 710, 712 (5th Cir. 1973)).
C.

The Three Types of Classes Under Rule 23(b)

If plaintiffs can meet the threshold requirements of Rule 23(a), they must also
satisfy one of the three subparts of Rule 23(b). Cole, 484 F.3d at 723.
A class may be certified under Rule 23(b)(1) if
(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;
Fed. R. Civ. P. 23(b)(1).
A Rule 23(b)(2) class may be certified if “the party opposing the class has acted
or refused to act on grounds that apply generally to the class, so that final injunctive relief

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or corresponding declaratory relief is appropriate respecting the class as a whole.” Fed.
R. Civ. P. 23(b)(2).
A class may be certified under Rule 23(b)(3) if
(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.
Fed. R. Civ. P. 23(b)(3).
II.

ANALYSIS
The 45 plaintiffs named in the Second Amended Complaint2 assert that they are

part of a group of approximately 1,300 similarly situated claims adjusters whom Worley
paid between $350 and $550 per day for their work. They allege that they signed written
employment agreements with Worley, which provided that they were to be paid “‘65%
of the total fee amount of the invoice billed to the insurance carrier [i.e., BP or its

2

In their reply memorandum, plaintiffs state that a total of 57 plaintiffs have filed consents
to join in this action as of July 11, 2011. Record Doc. No. 169, at p. 2. Since then, one more
plaintiff has consented to join. Record Doc. No. 181.
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designees, such as the Gulf Coast Claims Facility (“GCCF”)], upon receipt by Worley,
of payment from carrier for work performed.’” Record Doc. No. 120-1, plaintiffs’
memorandum at p. 3 (quoting ¶ 2 of the employment agreements, Record Doc. No. 1204, Plaintiffs’ Exh. 8 at p. 8) (bracketed material inserted by plaintiffs) (emphasis added
by the court). The next sentence of paragraph 2 of the contract states: “This will be
calculated based on each individual file billed and payment received for that file.”
Record Doc. No. 120-4, Plaintiffs’ Exh. 8 at p. 8 (emphasis added).
Based on the underlined language above in paragraph 2 of the contract, Worley
denies that this paragraph applies to the work performed by the plaintiffs on the BP
project. Worley asserts that the adjusters were not working on insurance claims, but on
third-party claims, and therefore they were not paid on a per file or percentage basis.
Plaintiffs allege that, pursuant to the contracts between BP and Worley, BP paid
Worley at a daily rate based on the number of hours that each adjuster worked for
Worley. Plaintiff’s Exhs. 7, 9, 10.3 Worley paid the adjusters between $350 and $550

3

These three exhibits were designated confidential by defendants and filed under seal by
plaintiffs. Plaintiffs redacted from their memorandum the specific dollar amounts that were taken
from the sealed exhibits. Record Doc. Nos. 118, 119, 121, 122, 123, 124. Defendants then moved
to maintain the exhibits under seal. Record Doc. Nos. 130, 149. The parties conferred and reached
an agreement that only very limited portions of the exhibits (including pricing information) should
remain under seal. Pursuant to that agreement, Worley provided the court with new, minimally
redacted versions of the exhibits. The court ordered that the redacted exhibits be filed into the
record and substituted for the formerly sealed Plaintiffs’ Exhibits 7, 9 and 10. Record Doc. No. 179.
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per day (depending on whether they worked on large or small loss claims and when they
worked on the project). Plaintiffs argue that the fixed daily rates Worley paid to each
adjuster were less than 65% of the amount Worley received per adjuster per day from BP,
in alleged breach of the individual employment agreements between Worley and the
adjusters.
Thus, on behalf of themselves and the putative class, plaintiffs seek the difference
between 65% of the amounts that Worley received from BP for each adjuster’s work and
the amounts Worley actually paid each adjuster. Depending on each adjuster’s rate of
pay, the unpaid difference allegedly owed by Worley to each adjuster would not amount
to more than a few hundred dollars per day, and might be as little as a few tens of dollars
per day. According to the adjusters’ affidavits attached to plaintiffs’ motion, several of
them were employed by Worley for only a few months, beginning no earlier than May
2010 and ending in September 2010, when many of the adjusters were laid off. One
plaintiff, Andrew Frarraccio, states that he worked as an adjuster from June 2010 until
November 23, 2010, when “Worley gave [him] a supervisor title and some supervisory
duties, but did not change [his] pay structure.” He resigned in March 2011. Defendant’s
evidence shows that another plaintiff, John Tatum, also worked as both an adjuster and
a supervisor, and that three plaintiffs (Christopher Conly, Denise Miller and Donald

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Pipping) are still employed by Worley. Declaration under penalty of perjury of Allen
Carpenter, Record Doc. No. 157-1, ¶ 9.
In their motion, plaintiffs contend that they meet the four threshold requirements
of Rule 23(a) and that a class can be certified either under Rule 23(b)(1), 23(b)(2) or
23(b)(3). Worley responds that plaintiffs cannot carry their burden to show that all of the
requirements of Rule 23(a) or any subpart of Rule 23(b) are satisfied.
A.

Plaintiffs Fail to Carry Their Burden to Prove the Existence of All Four
Prerequisites of Rule 23(a)
1.

Numerosity

Rule 23(a) requires that “the class is so numerous that joinder of all members is
impracticable.” Fed. R. Civ. P. 23(a)(1). Plaintiffs attached to their reply memorandum
a verified copy of a Stipulation of Facts, signed by counsel for both Worley Catastrophe
Response, LLC and Worley Catastrophe Services, LLC, which was filed in a similar
putative class action that is pending in Louisiana state court against those defendants.
The stipulation states that “‘[a]pproximately 1,200 adjusters, on or after April 20, 2010,
signed employment agreements in substantially the same form and substance as the
Agreement attached hereto as Exhibit A [attaching the same contract at issue in this
action] in connection with their deployment to perform adjusting services for claims
arising from the oil spill following the explosion of the Deepwater Horizon offshore oil
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rig.’” Plaintiffs’ reply memorandum, Record Doc. No. 169, at p. 1 (quoting Plaintiff’s
Exh. 31, Record Doc. No. 169-1, Stipulation of Facts filed June 14, 2011 in Michael
Sullivan et al. v. The Worley Companies, et al., Docket No. C599055, 19th Judicial
District Court for the Parish of East Baton Rouge, Louisiana) (bracketed insertion by
plaintiffs). Exhibit A to the stipulation appears to be the same contract that plaintiffs
have filed in the instant action as Plaintiffs’ Exhibit 8.
Plaintiffs contend that the stipulated group of approximately 1,200 potential class
members satisfies the numerosity requirement of Rule 23(a). Defendants argued in their
opposition memorandum that plaintiffs did not meet their burden to show that there are
a sufficient number of putative class members with standing, i.e., adjusters who “have
written employment agreements similar in form and substance with [Worley Catastrophe
Services].” However, defendants’ stipulation in Sullivan satisfies plaintiffs’ burden to
show numerosity in this case.
“To satisfy the numerosity prong, ‘a plaintiff must ordinarily demonstrate some
evidence or reasonable estimate of the number of purported class members.’ ‘The mere
allegation that the class is too numerous to make joinder practicable, by itself, is not
sufficient to meet this prerequisite.’” Myers, 2009 WL 2341983, at *10 n.7 (quoting
Pederson v. La. State Univ., 213 F.3d 858, 868 (5th Cir. 2000); Fleming v. Travenol
Labs., Inc., 707 F.2d 829, 833 (5th Cir. 1983)).
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However, the numerosity requirement does not require plaintiffs to establish the
exact number of potential class members. Relevant factors to consider include (1) the
geographical dispersion of the class, (2) the ease with which class members may be
identified, (3) the nature of the action and (4) the size of each plaintiff’s claim. Chauvin
v. Chevron Oronite Co., 263 F.R.D. 364, 368, 369 (E.D. La. 2009) (Lemelle, J.) (citing
Zeidman v. J. Ray McDermott & Co., 651 F.2d 1030, 1038 (5th Cir. 1981)); Braud, 2009
WL 2208524, at *7 (citing Mullen v. Treasure Chest Casino, L.L.C., 186 F.3d 620, 624
(5th Cir. 1999)).
In the instant case, a group of 1,200 putative class members easily satisfies the
numeric threshold. The Fifth Circuit has held that 100 to 150 members generally would
be “within the range that satisfies the numerosity requirement.” Mullen, 186 F.3d at 625;
see also In re Superior Offshore Int’l, Inc. Secs. Litig., No. H-08-0687, 2010 WL
2305742, at *2 (S.D. Tex. June 8, 2010) (“hundreds, if not thousands, of” putative
members satisfied numerosity requirement); Braud, 2009 WL 2208524, at *7
(“Numerically speaking, a class of over one hundred members is sufficient . . . .”); Street
v. Diamond Offshore Drilling, No. 00-1317, 2001 WL 568111, at 4 (E.D. La. May 25,
2001) (Duval, J.) (363 potential class members satisfied numerosity requirement).
As for the other numerosity factors to be considered, plaintiffs assert that, by the
time their motion to certify was filed, the 57 claims adjusters who have joined this action
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reside in twelve different states. Because the class members are former and/or current
employees of defendant, they should be easy to identify. For those putative members
who only worked for Worley for a short period of time and who are potentially owed
only an additional few tens of dollars per day, their claims are for small amounts that may
not justify the expense of individual lawsuits. These factors also tend to satisfy the
numerosity test.
Accordingly, I find that the numerosity requirement has been met.
2.

Commonality

To demonstrate commonality, plaintiffs must show that there are questions of law
or fact common to the class.
The test for commonality is not demanding. . . . All that is required for
each class is that there is one common question of law or fact: The
interests and claims of the various plaintiffs need not be identical. Rather,
the commonality test is met when there is at least one issue whose
resolution will affect all or a significant number of the putative class
members. Therefore, the fact that some of the Plaintiffs may have different
claims, or claims that may require some individualized analysis, is not fatal
to commonality.
James v. City of Dallas, 254 F.3d 551, 570 (5th Cir. 2001) (quotations omitted). “[F]or
purposes of Rule 23(a)(2), [e]ven a single [common] question will do . . . .” Dukes, 131
S. Ct. at 2556 (quotation and citation omitted).
Commonality requires the plaintiff to demonstrate that the class
members have suffered the same injury . . . . This does not mean merely
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that they have all suffered a violation of the same provision of law. . . .
Their claims must depend upon a common contention–for example [in a
Title VII case], the assertion of discriminatory bias on the part of the same
supervisor. That common contention, moreover, must be of such a nature
that it is capable of classwide resolution–which means that determination
of its truth or falsity will resolve an issue that is central to the validity of
each one of the claims in one stroke.
What matters to class certification . . . is not the raising of common
“questions”–even in droves–but, rather the capacity of a classwide
proceeding to generate common answers apt to drive the resolution of the
litigation. Dissimilarities within the proposed class are what have the
potential to impede the generation of common answers.
Id. at 2551 (quotations, citations and footnote omitted).
In the instant case, plaintiffs allege that they all signed the same contract, that
Worley paid them all a daily wage between $350 and $550, and that Worley uniformly
failed to pay them according to the contract’s terms. Worley does not dispute that all
members of the proposed class were paid in the same fashion, but it argues that all class
members did not enter into the same written employment agreement, or in some cases
any written agreement, with it. As previously discussed, however, the class definition
precludes from class membership any adjusters who did not sign a substantially identical
agreement. The Stipulation of Facts that defendants signed and filed in the Sullivan class
action in state court supports a finding that all putative class members signed the same
contract and suffered the same alleged injury: they were not paid in accordance with the

16

contract’s payment terms. Determination of the terms of the contract is a question
common to all class members.
Therefore, plaintiffs have satisfied the undemanding commonality requirement.
3.

Typicality

To meet the typicality requirement, the claims of the representative plaintiffs must
be typical of the claims of the class.
Like commonality, the test for typicality is not demanding. It focuses on
the similarity between the named plaintiffs’ legal and remedial theories and
the theories of those whom they purport to represent. Typicality does not
require a complete identity of claims. Rather, the critical inquiry is whether
the class representative’s claims have the same essential characteristics of
those of the putative class. If the claims arise from a similar course of
conduct and share the same legal theory, factual differences will not defeat
typicality.
James, 254 F.3d at 571 (quotations and citations omitted).
Here, the named plaintiffs argue that their claims are typical of the claims of all
class members because they are based factually on the same underlying contract and
legally on the same theory of breach of contract. Worley again relies on its argument that
a few named plaintiffs did not sign the same contract and argues that, with respect to
those adjusters who did sign the same form of contract, individualized issues preclude

17

a finding of typicality. For the same reasons stated above in connection with
commonality, defendant’s arguments do not defeat typicality.
I find that plaintiffs have sufficiently shown that their claims are typical of the
class claims.
4.

Adequacy of Representation

Finally, Rule 23(a) requires that the representative plaintiffs fairly and adequately
protect the interests of the class.
This requirement is essential to due process, because a final judgment in a
class action is binding on all class members. To meet the adequacy
requirement, the class representatives, their counsel, and the relationship
between the two [must be] adequate to protect the interests of absent class
members. The Court must be satisfied that class representatives, and not
their counsel, are directing the litigation. Thus they must show themselves
sufficiently informed about the litigation to manage the litigation effort.
In re OCA, Inc. Secs. & Derivative Litig., No. 05-2165, 2008 WL 4681369, at *8 (E.D.
La. Oct. 17, 2008) (Vance, J.) (citing Hansberry v. Lee, 311 U.S. 32, 42-43 (1940);
Unger v. Amedisys Inc., 401 F.3d 316, 321 (5th Cir. 2005); Stirman v. Exxon Corp., 280
F.3d 554, 562 (5th Cir. 2002); In re Am. Med. Sys., Inc., 75 F.3d 1069, 1083 (6th Cir.
1996)) (quotations omitted).
The long-established standard for the adequacy determination . . . requires
an inquiry into [1] the zeal and competence of the representative[s’]
counsel and . . . [2] the willingness and ability of the representative[s] to
take an active role in and control the litigation and to protect the interests
of absentees[.] In addition to determining the proposed class counsel’s zeal
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and competence and the proposed class representative’s willingness and
ability, the district court’s adequacy inquiry also serves to uncover conflicts
of interest between the named plaintiffs and the class they seek to represent.
Feder v. Elec. Data Sys. Corp., 429 F.3d 125, 130-31 (5th Cir. 2005) (citing Berger v.
Compaq Computer Corp., 257 F.3d 475, 482-83 (5th Cir. 2001); Horton v. Goose Creek
Indep. Sch. Dist., 690 F.2d 470 (5th Cir. 1982)) (quotations omitted) (brackets in
original)
In the instant case, the named plaintiffs argue that their interests are the same as
those of the putative class because the interests of each are based on the same legal
theories. They have submitted affidavits from their counsel, which they contend
demonstrate that their attorneys are experienced in class actions and will diligently
pursue and protect the interests of the class.
Worley argues that the class is “fraught with internal conflicts of interest,” again
noting that some plaintiffs have no written employment agreements. Defendant’s
opposition memorandum, Record Doc. No. 157 at p. 24. Because any persons without
written employment contracts are not class members, they present no conflict.
Worley also asserts that some plaintiffs who claim to have written contracts have
no evidence of such contracts, while other plaintiffs (six of whom are identified) signed
“different” contracts, none of which have been provided to the court. Defendant
contends that the interests of these two groups conflict and that the class attorneys would
19

be forced to choose which group’s arguments to advance, at the expense of the other
group’s interests.
In the absence of any “different” contracts in evidence, the court cannot determine
that the contracts conflict at all, much less whether they conflict in any way that would
impact the adequacy of the named plaintiffs’ representation. Moreover, defendants
admitted in their stipulation filed in the Sullivan state court action that approximately
1,200 adjusters signed contracts substantially identical to the ones submitted to this court
and relied on by the plaintiffs in this action. On this record, I cannot find substantial
conflicts of interest between the named plaintiffs and the putative class members.
However, the representative plaintiffs have presented no evidence to demonstrate
that they are directing the litigation, are sufficiently informed about it to manage the
litigation effort or have the willingness and ability to take an active role and protect the
interests of absentee class members. In the absence of such evidence, plaintiffs have not
carried their burden to demonstrate adequacy of representation. The absence of this type
of evidence, as well as the absence of any trial plan (as discussed below regarding Rule
23(b)(3)), also undercuts plaintiffs’ argument that their counsel are skilled at prosecuting
class actions.

Therefore, I find that plaintiffs have not established adequacy of

representation.

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Plaintiffs’ failure to prove all four prerequisites of Rule 23(a) defeats their motion
for class certification. Even assuming, however, that they could establish adequacy of
representation if given yet another opportunity to submit evidence, their proposed class
fails to satisfy any of the Rule 23(b) categories, as discussed below.
B.

Plaintiffs Fail to Carry Their Burden Under Rule 23(b)

Plaintiffs argued in their original memorandum that a class should be certified
under any one of the three subcategories of Rule 23(b). In their reply memorandum, they
respond only to defendant’s arguments concerning Rule 23(b)(3). It appears that they
have (prudently) abandoned their arguments that a class could be certified under either
Rule 23(b)(1) or 23(b)(2). Nonetheless, I address all three categories to make clear why
this action is inappropriate for class certification under any category.
1.

Rule 23(b)(2)

Plaintiffs do not qualify for class certification under either Rule 23(b)(1) or
23(b)(2), both of which implicate injunctive relief. Rule 23(b)(2) permits certification
if “the party opposing the class has acted or refused to act on grounds that apply
generally to the class, so that final injunctive relief or corresponding declaratory relief
is appropriate respecting the class as a whole.” Fed. R. Civ. P. 23(b)(2) (emphasis
added). Although plaintiffs argue that they seek injunctive relief, their Second Amended
Complaint does not seek any such relief. Their prayer seeks only “an order declaring”
21

that Worley breached the contract and was unjustly enriched, for which plaintiffs seek
compensatory and punitive damages.

Record Doc. No. 111, Second Amended

Complaint, at p. 13. A declaration that Worley breached the contract does not amount
to “declaratory relief” when the only relief sought in connection with such a finding is
damages. Furthermore, the only mention of injunctive relief in the Second Amended
Complaint is a conclusory allegation that Rule 23(b)(2) certification is appropriate
because, “[i]n the absence of appropriate injunctive relief, Defendants will continue to
operate without authorization.” Id. at p. 4. Neither plaintiffs’ complaint nor their motion
to certify specifies any type of “appropriate injunctive relief.”
In Caruso v. Allstate Ins. Co., No. 06-2613, 2007 WL 2265100 (E.D. La. Aug. 3,
2007), Chief Judge Vance of this court reviewed the Fifth Circuit’s precedents and
explained why neither Rule 23(b)(2) nor 23(b)(1) certification is appropriate when the
complaint primarily seeks money damages. Beginning with an analysis of Rule 23(b)(2),
she stated:
In Allison v. Citgo Petroleum Corp., 151 F.3d 402 (5th Cir. 1998),
the Fifth Circuit discussed when certification under Rule 23(b)(2) is
appropriate. The court explained that although Rule 23(b)(2) is silent as to
whether monetary remedies may be sought in conjunction with injunctive
or declaratory relief, the Advisory Committee Notes on Rule 23 state that
class certification under Rule 23(b)(2) “does not extend to cases in which
the appropriate final relief relates exclusively or predominantly to money
damages.” The court found that this commentary implies that the drafters
of Rule 23 intended that at least some form or amount of monetary relief
22

would be permissible in a Rule 23(b)(2) class action. The court determined
that monetary relief may be obtained in a Rule 23(b)(2) class action as long
as the predominant relief sought is injunctive or declaratory.
Monetary relief predominates in Rule 23(b)(2) class actions unless
it is incidental to requested injunctive or declaratory relief. Incidental
damages flow directly from liability to the class as a whole on the claims
forming the basis of the injunctive or declaratory relief. See . . . Fed. R.
Civ. P. 23(b)(2) (referring only to relief appropriate “with respect to the
class as a whole”). “Liability for incidental damages should not require
additional hearings to resolve the disparate merits of each individual’s case;
it should neither introduce new and substantial legal or factual issues, nor
entail complex individualized determinations.”
Caruso, 2007 WL 2265100, at *2-3 (quoting Allison v. Citgo Petroleum Corp., 151 F.3d
at 411, 415) (internal citation omitted).
The United States Supreme Court in Dukes recently clarified that Rule 23(b)(2)
does not authorize a class action when individualized claims for monetary relief
predominate.
One possible reading of [Rule 23(b)(2)] is that it applies only to requests
for such injunctive or declaratory relief and does not authorize the class
certification of monetary claims at all. We need not reach that broader
question in this case, because we think that, at a minimum, claims for
individualized relief (like the backpay at issue here) do not satisfy the Rule.
The key to the (b)(2) class is the indivisible nature of the injunctive or
declaratory remedy warranted–the notion that the conduct is such that it can
be enjoined or declared unlawful only as to all of the class members or as
to none of them. In other words, Rule 23(b)(2) applies only when a single
injunction or declaratory judgment would provide relief to each member of
the class. It does not authorize class certification when each individual
class member would be entitled to a different injunction or declaratory
judgment against the defendant. Similarly, it does not authorize class
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certification when each class member would be entitled to an
individualized award of monetary damages.
Dukes, 131 S. Ct. at 2557 (quotation and citation omitted).
The Court found that the structure of Rule 23(b) makes “it clear that individualized
monetary claims belong in Rule 23(b)(3),” not in Rule 23(b)(2).
The procedural protections attending the (b)(3) class–predominance,
superiority, mandatory notice, and the right to opt out–are missing from
(b)(2) not because the Rule considers them unnecessary, but because it
considers them unnecessary to a (b)(2) class. When a class seeks an
indivisible injunction benefitting all its members at once, there is no reason
to undertake a case-specific inquiry into whether class issues predominate
or whether class action is a superior method of adjudicating the dispute.
Predominance and superiority are self-evident. But with respect to each
class member’s individualized claim for money, that is not so–which is
precisely why (b)(3) requires the judge to make findings about
predominance and superiority before allowing the class. Similarly, (b)(2)
does not require that class members be given notice and opt-out rights,
presumably because it is thought (rightly or wrongly) that notice has no
purpose when the class is mandatory, and that depriving people of their
right to sue in this manner complies with the Due Process Clause. In the
context of a class action predominantly for money damages we have held
that absence of notice and opt-out violates due process. While we have
never held that to be so where the monetary claims do not predominate, the
serious possibility that it may be so provides an additional reason not to
read Rule 23(b)(2) to include the monetary claims here.
Id. at 2558-59 (citation omitted).
Plaintiffs in the instant case primarily seek monetary damages for the alleged
breaches of their employment contracts. Notably, in their motion for class certification,
they also seek approval of a notice to be sent to the putative class members, with a 9024

day period to opt out of the class, which, as the Supreme Court indicated, is indicative
of a class that seeks predominantly monetary relief.
Furthermore, plaintiffs have presented no evidence that injunctive relief is
appropriate. A party who seeks declaratory or injunctive relief must “‘demonstrate either
continuing harm or a real and immediate threat of repeated injury in the future.’” Grant
ex rel. Family Eldercare v. Gilbert, 324 F.3d 383, 388 (5th Cir. 2003) (quoting Soc’y of
Separationists, Inc. v. Herman, 959 F.2d 1283, 1285 (5th Cir. 1992)). Of the 55 named
plaintiffs, only three still work for Worley. There are no existing relationships between
Worley and the other 52 named plaintiffs (or any other putative class members who no
longer work for Worley) that would require any declaration of the rights and obligations
of the parties, 28 U.S.C. § 2201(a), and no ongoing actions by Worley that could be
enjoined. Dukes, 131 S. Ct. at 2560. Plaintiffs have an adequate remedy at law for
Worley’s alleged past conduct: damages for breach of contract. Under no reading of
plaintiffs’ Second Complaint can it be said that they seek primarily declaratory or
injunctive relief for themselves or the putative class. Just as in Caruso, plaintiffs in the
instant case
do not state what declaratory or injunctive relief they seek. It is clear that
to the extent such relief is mentioned, it is incidental to the monetary relief,
which is the focus of plaintiffs’ class petition. Moreover, there is no
allegation that the purported class members seek a uniform monetary
remedy. See Doiron v. Conseco Health Ins. Co., 240 F.R.D. 247, 254
25

(M.D. La. 2007)[, rev’d on other grounds, 279 F. App’x 313 (5th Cir.
2008)] (finding certification of a proposed class inappropriate under Rule
23(b)(2) where plaintiffs primarily sought monetary damages).
Caruso, 2007 WL 2265100, at *3.
Most importantly, plaintiffs’ breach of contract allegations “will require highly
individualized determinations” of the damages each plaintiff sustained. Id. Plaintiffs
allege that the contracts at issue provide that each adjuster will receive “65% of the total
fee amount of the invoice billed to” BP or its designees, “upon receipt by Worley, of
payment from carrier for work performed.” Employment agreements, Record Doc.
No. 120-4, Plaintiffs’ Exh. 8 at p. 8 Even if plaintiffs can prove that this provision
applied to their work and was breached on a class-wide basis, the calculation of damages
will require individual determinations of the particular files on which each adjuster
worked, the dates worked on each file, the amount that Worley billed to BP per adjuster
per file for those dates, the amount that BP paid to Worley per adjuster per file, the
amounts Worley paid to each adjuster (which ranged between $350 and $550 per day,
depending on whether the adjusters worked on large or small loss claims and when they
worked on the project), and a calculation of the difference between what each plaintiff
was paid per day worked and 65% of the amount that defendant received for the
particular files on which the adjuster worked.

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In addition, a claim for punitive damages requires a focus on individualized issues
to comply with constitutional protections. Allison, 151 F.3d at 419; see BMW v. Gore,
517 U.S. 559, 574-75 (1996) (punitive damages awards must comport with “[e]lementary
notions of fairness enshrined in our constitutional jurisprudence” and must be based on
considerations such as the degree of reprehensibility of defendant’s actions; the disparity
between the harm or potential harm suffered by each plaintiff and the punitive damages
awarded; and the difference between this remedy and the civil penalties authorized or
imposed in comparable cases).
Therefore, plaintiffs’ motion to certify a Rule 23(b)(2) class is denied.
2.

Rule 23(b)(1)

A class may be certified under Rule 23(b)(1) if
(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.
Fed. R. Civ. P. 23(b)(1).

27

Plaintiffs make only conclusory arguments, unsupported by any evidence, that
their proposed class falls within Rule 23(b)(1). They assert that prosecution of separate
actions could result in incompatible standards of conduct being applied to Worley “going
forward” because some class members are still employed by Worley. As previously
noted, defendant has identified only three named plaintiffs who still work for it.
Plaintiffs also reiterate that they are seeking unspecified injunctive relief. They admit
that Rule 23(b)(1) “is best suited to lawsuits seeking declaratory or injunctive relief.”
Record Doc. No. 120-1, plaintiffs’ memorandum at p. 10.
Because monetary relief predominates in plaintiffs’ complaint, certification under
Rule 23(b)(1) must be denied. As Chief Judge Vance explained in Caruso and as the
Supreme Court discussed in Dukes, due process concerns inform whether a Rule 23(b)(1)
class can be certified when claims for individual monetary damages predominate.
In the context of a proposed Rule 23(b)(1)(A) class certification, the
Fifth Circuit recently instructed a district court to “consider the extent to
which the due process concerns inherent in Allison apply to a (b)(1)(A)
class and whether a (b)(1)(A) class can be maintained if damages are the
primary remedy sought.” The court added that “resolution of these issues
is still uncertain in the Fifth Circuit.”
In Allison, discussed supra, the Fifth Circuit determined that
monetary relief may be obtained in a Rule 23(b)(2) class action as long as
the predominant relief sought is injunctive or declaratory. The court stated
that “monetary relief ‘predominates’ under Rule 23(b)(2) when its presence
in the litigation suggests that the procedural safeguards of notice and
opt-out are necessary, that is, when the monetary relief being sought is less
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of a group remedy and instead depends more on the varying circumstances
and merits of each class member’s case.” Id. at 414. The court explained:
[T]he drafters of Rule 23 found it unnecessary to provide
(b)(1) and (b)(2) class members with the absolute right to
notice or to opt-out of the class-procedural safeguards made
mandatory under (b)(3) for class members who might wish to
pursue their claims for money damages in individual lawsuits
and to not be bound by membership in a class action.
Providing these rights exclusively to (b)(3) classes
demonstrates concern for the effect of monetary claims on
class cohesiveness. Monetary remedies are often related
directly to the disparate merits of individual claims. As a
result, a class seeking substantial monetary remedies will
more likely consist of members with divergent interests.
. . . . In Allison, the court implicitly stated that class certification is
inappropriate under Rule 23(b)(1)(A) for individualized damage claims
akin to those presented in this case. (“Given the individual-specific nature
of the plaintiffs’ claims for compensatory and punitive damages, we
perceive no risk of inconsistent adjudications or incompatible standards of
conduct in having those claims adjudicated separately.”) (emphasis in
original).
Caruso, 2007 WL 2265100, at *3-4 (quoting Langbecker v. Elec. Data Sys. Corp., 476
F.3d 299, 318 (5th Cir. 2007); Allison, 151 F.3d at 411, 412-13, 421 n.16).
In the instant case, as in Caruso,
[h]aving considered Allison [and Dukes], the Court finds that certification
of a class under Rule 23(b)(1)(A) is inappropriate here. Plaintiffs
predominantly seek monetary relief, in the form of damages for breach of
contract . . . . Moreover, plaintiffs have not alleged an entitlement to any
type of class-wide recovery. Further, plaintiffs make no request for specific
declaratory or injunctive relief. Plaintiffs thus have not demonstrated that
defendants would face incompatible standards of conduct if the Court does
not certify the proposed class. Given the type and predominance of
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monetary damages requested, the Court concludes that it is improper to
certify the class under Rule 23(b)(1)(A).
Likewise, the Court finds certification of the proposed class under
Rule 23(b)(1)(B) inappropriate. The Fifth Circuit has stated: “The rule
necessarily contemplates the allocation of a limited resource . . . for only
where the class members’ interests are to some degree mutually exclusive
will the individuals’ litigation ‘substantially impair’ the others’ rights.”
Where, as here, plaintiffs seek monetary damages, “the paradigm is of a
‘limited fund’ to be distributed for the class members’ benefit.” Because
plaintiffs have not identified, and the Court does not find, any such limited
resource that is affected by plaintiffs’ lawsuit, certification under Rule
23(b)(1)(B) is improper.
Id. at *4 (quoting In re Asbestos Litig., 134 F.3d 668, 672 n. 7 (5th Cir. 1998)).
Accordingly, plaintiffs’ motion to certify a class under Rule 23(b)(1) is denied.
3.

Rule 23(b)(3)

Before certifying a class under Rule 23(b)(3), the court must find (1) that
“questions of law or fact common to the members of the class predominate over any
questions affecting only individual members” and (2) “that a class action is superior to
other available methods for fairly and efficiently adjudicating the controversy.” Fed. R.
Civ. P. 23(b)(3).
To predominate, “common issues must constitute a significant part of the
individual cases.” Mullen, 186 F.3d at 626. The predominance “requirement, although
reminiscent of the commonality requirement of Rule 23(a), is ‘far more demanding’
because it ‘tests whether proposed classes are sufficiently cohesive to warrant
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adjudication by representation.’” Unger, 401 F.3d at 320 (quoting Amchem Prods., 521
U.S. at 623-24).
Determining whether the plaintiffs can clear the predominance hurdle set
by Rule 23(b)(3) requires district courts to consider how a trial on the
merits would be conducted if a class were certified. This, in turn, entails
identifying the substantive issues that will control the outcome, assessing
which issues will predominate, and then determining whether the issues are
common to the class, a process that ultimately prevents the class from
degenerating into a series of individual trials.
Madison, 637 F.3d at 555 (quotations and citations omitted). The district court abuses
its discretion if it certifies a Rule 23(b)(3) class without having “meaningfully
consider[ed] how Plaintiffs’ claims would be tried.” Id. at 556.
Plaintiffs argue that common questions of law and fact predominate because they
all seek the same relief, i.e., the difference between the pay they received and the pay
they were allegedly owed under their written employment contracts, under the same
breach of contract theory. They assert that the evidence will include the adjusters’
employment contracts, the contracts between Worley and BP, and evidence that each
adjuster was paid a day rate between $350 and $550, which was less than the amount
provided for in their contracts. They allege that their damages are “subject to formulaic
treatment” and will present no individualized complications. Record Doc. No. 120-1,
plaintiffs’ memorandum at p. 12.

31

Plaintiffs have failed to carry their burden to prove that common issues of law or
fact predominate over individual issues. Their mere assertion that each class member
brings the same cause of action under the same type of contract is insufficient to establish
predominance. Caruso, 2007 WL 2265100, at *5. They have failed to provide the court
with any trial plan, which severely undermines their contention that common issues
predominate.
As described above, this action will involve significant individualized damages
issues. Just because the contracts provide a formula of “65% of the total fee amount of
the invoice billed” does not mean that determining plaintiffs’ damages will be merely
formulaic. Damages will have to be calculated for each plaintiff on a per file basis,
which will require correlating the dates when each adjuster worked on a particular file
with the dates and the invoices when Worley billed for the work and the amounts Worley
received for each adjuster’s particular work, then determining how much the adjuster
should have been paid for each file and the difference between those amounts and what
Worley actually paid.
Other individualized evidentiary issues include whether there is a record of each
class member’s written contract; whether particular adjusters entered into a contract with
Worley in connection with the BP project or a prior project; whether the prior contracts
are substantially similar to the contracts submitted in connection with plaintiffs’ motion
32

to certify; whether the prior contracts are applicable to the BP project and, if so, what the
applicable terms of those contracts are; what each adjuster was told in advance about his
or her compensation, see Miller v. Miller, 1 So. 3d 815, 817-18, 819 (La. App. 2d Cir.
2009) (parol or extrinsic evidence concerning the terms of a written contract may be
admissible if the written expression of the parties’ common intention is ambiguous);
whether the work that each adjuster performed is subject to the contract provision on
which plaintiffs rely; and whether particular adjusters may have waived any right to
assert a breach of contract claim if they knowingly accepted Worley’s performance
without any objection to the rate of pay. Therefore, plaintiffs have failed show that
common issues predominate over individual issues.
As to the second part of Rule 23(b)(3), “[t]he superiority requirement is simply
that ‘class action is superior to other available methods for the fair and efficient
adjudication of the controversy.’” Doiron, 279 F. App’x at 317 (quoting Fed R. Civ. P.
23(b)(3)). “Determining whether the superiority requirement is met requires a factspecific analysis and will vary depending on the circumstances of any given case.”
Madison, 637 F.3d at 555 (citing 7AA Wright, Miller & Kane, Federal Practice &
Procedure § 1783 (3d ed. 2005)).
Plaintiffs argue that a class action is superior here because it “would not present
any managerial or administrative complexities,” the class is well-defined, and there are
33

no unique jurisdictional, choice of law or liability issues. Record Doc. No. 120-1,
plaintiffs’ memorandum at p. 12. These purely conclusory assertions are wholly
insufficient to carry plaintiffs’ burden to establish superiority.
CONCLUSION
For all of the foregoing reasons, IT IS ORDERED that plaintiff’s motion to certify
a class action is DENIED.
New Orleans, Louisiana, this

26th

day of July, 2011.

JOSEPH C. WILKINSON, JR.
UNITED STATES MAGISTRATE JUDGE

34