Gardner v. Western Beef Properties, Inc.

Filing 174

MEMORANDUM & ORDER: The Court adopts the 162 Report and Recommendation of Magistrate Judge Azrack as supplemented above and denies plaintiffs' 145 motion for certification of a state-wide class of present or former employees of Western B eef who hold or held the title "Department Manager" or "Assistant Department Manager." Plaintiffs' motion for leave to amend their Amended Complaint solely to delete paragraph 128 is granted. Plaintiffs' alternative r equest for certification of a state-wide class of present or former employees of Western Beef who hold or held the title "Department Manager" of a department "where they worked alone or with only one other employee" is denied without prejudice. Ordered by Judge Raymond J. Dearie on 12/9/2011. (Chee, Alvin)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
----------------------------------------------------------------------X
MORRIS WHITE, LAWRENCE CARRINGTON, and
GEORGE GARDNER,
Individually and on Behalf of All Other
Persons Similarly Situated,
Plaintiffs,
MEMORANDUM & ORDER
- against 07 CV 2345 (RJD) (JMA)
WESTERN BEEF PROPERTIES, INC., et al.,
Defendants.
------------------------------------------------------------------------X
DEARIE, Judge.
In Parts I and II of a Report and Recommendation dated September 26, 2011, Magistrate
Judge Joan M. Azrack recommends that the Court deny plaintiffs’ motion under Rule 23 of the
Federal Rules of Civil Procedure for class certification of their state law overtime claims. ECF
No. 162. Vigorous, copious litigation addressed to Rule 23’s “commonality” and related
“predominance” requirements ensued: before the Court are plaintiffs’ timely objections (ECF
Nos. 163, 164), defendants’ response to those objections (ECF Nos. 166, 167 with Exhibits A-J),
a subsequent set of papers from plaintiffs styled as their “reply objections” (ECF No. 168) and,
lastly, a “sur-reply” with additional exhibits from defendants. ECF No. 172 and Exhibits A-C.
Rule 72 does not contemplate the reply-round of submissions. See Fed. R. Civ. P. 72(b)(2)
(authorizing “objections” and a “respon[se]” thereto). 1 The Court has accepted and reviewed
all post R&R filings as part of its de novo review of the full body of materials submitted to
1

Indeed, plaintiffs filed their “reply” without first seeking leave of Court. Defendants,
by contrast, first sought and obtained permission before filing their sur-reply, ECF No. 170, but
then rewarded the Court with a submission totaling 46 pages.

Magistrate Judge Azrack on the motion, which include: each of the unabridged deposition
transcripts, the deposition excerpts, the declarations, additional exhibits, the many briefs, and all
cited authorities. ECF Nos. 145-160. The Court has also studied the jurisprudence emerging in
the wake of Wal-Mart v. Stores, Inc. v. Dukes, 564 U.S.__, 131 S. Ct. 2541 (2011), a subject the
parties’ did not fully address at the R&R juncture. Finally, the Court embarks on its Rule 23
analysis already quite familiar with the parties’ essential theories on certification, as it has
decided two prior motions that substantially previewed the certification-related issues. See
Memorandum & Order dated June 17, 2008, ECF No. 32 (denying defendants’ motion to dismiss
the class allegations, concluding, at the pleading stage, that the tension between a possible FLSA
opt-in collective action to recover unpaid overtime and a possible Rule 23 opt-out class on the
parallel state law claim did not require dismissal of the state law claims); Memorandum & Order
dated July 23, 2009, ECF No.72 (based, again, only on the pleadings, provisionally certifying
plaintiffs’ federal overtime claim as a collective action under section 16(b) of the FLSA).
As explained more fully below, what enabled plaintiffs to prevail on motions addressed
to the pleadings is not sufficient at the Rule 23 stage, where the party seeking certification must
satisfy each of the Rule’s requirements by a preponderance of the evidence. Based on all of the
materials inventoried above, the Court has independently arrived at the same conclusion as
Magistrate Judge Azrack on class certification largely for the reasons set forth in the R&R, but
also for the additional reasons, mostly a matter of emphasis, addressed below. Accordingly, the
Court adopts Parts I and II of the R&R in their entirety and as supplemented here, and denies
plaintiffs’ motion for class certification.2

2

Part III of the R&R addresses plaintiffs’ separate application for leave to amend their
Amended Complaint. See Part V of this Memorandum & Order.
2

STANDARD OF REVIEW
Federal Rule of Civil Procedure 72(b)(3) provides that, when resolving objections to the
report and recommendation of a magistrate judge, the Court “must determine de novo any part of
the magistrate judge’s disposition that has been properly objected to” and then either “accept,
reject, or modify the recommended disposition; receive further evidence; or return the matter to
the magistrate judge with instructions.” Fed. R. Civ. P. 72(b)(3). Accord 28 U.S.C. § 636 (“[a]
judge of the court shall make a de novo determination of those portions of the report . . . to which
objection is made,” and “may accept, reject, or modify, in whole or in part, the findings or
recommendations made by the magistrate judge” or “may also receive further evidence or
recommit the matter to the magistrate judge with instructions”).
As the Supreme Court instructed some time ago,
It should be clear that . . . the statute calls for a de novo
determination, not a de novo hearing. We find nothing in the
legislative history of the statute to support the contention that the
judge is required to rehear the contested testimony in order to carry
out the statutory command to make the required “determination.”
United States v. Raddatz, 447 U.S. 667, 674 (1980). Indeed, the phrase “de novo determination”
in section 636 “permit[s] whatever reliance a district judge, in the exercise of sound judicial
discretion, ch[ooses] to place on a magistrate’s proposed findings and recommendation,”
provided the district court remains the ultimate decision-maker. Raddatz, 447 U.S. at 676.
“The district judge is not required to review, under a de novo or any other standard, [the]
factual or legal conclusions of the magistrate judge as to those portions of the Report and
Recommendation to which no objections are addressed, so long as such are not clearly
erroneous.” United States v. Burke, 09 CR 135 (SJ), 2011 WL 2609837, *1, (E.D.N.Y. July 1,
2011) (internal citations omitted).

3

DISCUSSION
I.
Wal-Mart unequivocally instructs district courts that “[w]hat 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.”
131 S. Ct. at 2551 (internal quotation and citation omitted) (emphasis in original). Therefore, in
order for there to be a legitimate “cause to believe that all [of a proposed class’s] claims can
productively be litigated at once,” not only must those claims “depend upon a common
contention,” id., at 2551, but “[t]hat common contention . . . 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 it central to the validity of each one of the claims in one stroke.” Id.
(emphasis added).
Magistrate Judge Azrack correctly identified this principle, see R&R at 6, and properly
applied it to the sprawling factual record in this case. See R&R at 7 and 9-12. She
appropriately concluded that the liability question here was not resolvable “in one stroke”
because of the tremendously disparate accounts the putative class members offer of their duties
in general and of the component that is or might be managerial for purposes of the management
exemption. In the face of such varying accounts by department managers (“DMs”) and assistant
depart managers (“ADMs”) of their work responsibilities, the Court agrees that the only valid
way to resolve the liability question in this case will be individualized application of the
management exemption’s duties test. Many DMs or ADMs may well have a valid claim that
defendants’ misclassified them as exempt, but the relevant point for class certification purposes

4

is that plaintiffs cannot show how a factfinder would resolve that crucial liability question other
than on an employee-by-employee basis.
Mindful that the Court’s prior rulings in this matter may be deemed to have forecast a
different result here, the Court emphasizes that those decisions were based solely on the
pleadings, whereas the denial of Rule 23 certification, occurring after the close of discovery, is
based on deficiencies in plaintiffs’ proof. Management exemption misclassification suits, the
Court recognizes, are not categorically incapable of class treatment. See, e.g., Myers v. Hertz
Corp., 624 F.3d 537, 549 (2d Cir. 2010), cert. denied, __U.S.__, 132 S. Ct. 368 (Oct. 3, 2011).
(“We do not understand Hertz to contend that exemption [in the overtime context] is an
inherently individualized inquiry, such that class treatment will never be appropriate in
exemption cases and we note that district courts in this Circuit have certified classes on state law
claims that turn on the question of FLSA exemption for a particular group of employees”)
(emphasis in original) (internal citations omitted). Rather, as Myers explains, class certification
in management exemption suits is appropriate where there is “evidence tending to show that the
plaintiffs’ jobs were similar in ways material to the establishment of the exemption criteria.” Id.
(emphasis added). It is precisely plaintiffs’ failure to show, through evidence, the necessary
material similarity among the work responsibility levels of those whom they wish to treat as a
class that precludes certification.
II.
Rule 23 does not impose upon plaintiffs the impossible task of showing that all class
members have identical job responsibilities. Rather, under Myers and the authorities it cites,
certification is appropriate when the evidence shows that “the job duties of putative class
members were ‘largely consistent’” or when the individual employees’ “deposition testimony

5

relating to their specific job duties is generalizable” to others in the proposed class. 624 F.3d at
549 (emphases added) (internal quotation and citation omitted). Accordingly, the Court
conducted its de novo review of the deposition testimony with an eye toward discerning whether
the descriptions of DM and ADM duties and responsibilities, despite their many facial variations,
might nevertheless be “largely consistent” or “generalizable” within the meaning of Myers. This
is arguably a slightly different inquiry than the question Magistrate Judge Azrack resolved in the
negative (i.e., whether the workers’ duties were “uniformly non-managerial”),3 and also more
closely tailored to the liability standard, which turns not on the aberrant or occasional duty but on
what the workers do for the most part.4 Looking for the “largely consistent” or the
“generalizable” also comports with Rule 23 requirement that plaintiffs establish commonality not
beyond all doubt but by a preponderance of the evidence.5
One suggested “generalizable” feature of the record is the undisputed fact on which the
lawsuit is premised, namely, defendants’ decision to classify all DMs and ADMs as exempt.
Defendants do not assert, and nothing in the record suggests, that defendants made this decision
only after examining each individual DM’s and ADM’s duties, despite the fact that, on this
motion, defendants characterize the deposition accounts of DM and ADM job duties as “wildly
disparate.” ECF No. 160 at 15. The Second Circuit in Myers agreed with the Ninth Circuit’s
3

See R&R at 11 (“find[ing] the quantum of evidence submitted inadequate to establish
that the potential class members’ duties as a whole were uniformly non-managerial”).
4

See e.g., 29 C.F.R. §541.100(a)(2)-(3) (employees qualify for the “executive”
exemption when, inter alia, their “primary duty” is management” and they “customarily and
regularly” direct the work of two more other employees); 29 C.F.R. §541.700 (“‘primary duty’
means the principal, main, major or most important duty that the employee performs”)
(emphases added).
5

Although plaintiffs have the burden on a Rule 23 motion, it is the employer who
ultimately bears the burden of proving the merits of its exemption argument. Myers, 624 F.3d at
550.
6

view that “while such a policy suggests ‘the employer believes some degree of homogeneity
exists among the employees’ and is thus in a general way relevant [ ], the existence of a blanket
exemption policy, standing alone, is not itself determinative’” of the certification inquiry. Id.,
624 F.3d at 549 (quoting In re Wells Fargo Home Mortg. Overtime Pay Litig., 571 F.3d 953,
957, 959 (9th Cir. 2009)). The “fact of common exemption,” the Second Circuit further
explained, “does not establish whether all plaintiffs were actually entitled to overtime pay” and
thus does not make the liability question “provable in common.” Myers, 624 F.3d at 959
(emphasis in original).
To be sure, it may trouble plaintiffs that defendants treat all DMs and ADMs as qualified
for the management exemption while asserting that that same group’s duties are too disparate for
class treatment in this overtime litigation. The very argument has been accepted as part of the
rationale for certifying an overtime litigation class. See, e.g., Wang v. Chinese Daily News, Inc.,
231 F.R.D. 602 (C.D. Cal. 2005). Nevertheless, there can be no doubt that more is required:
although the Ninth Circuit affirmed the district court in Wang, see 623 F.3d 743 (9th Cir. 2010),
the Supreme Court granted certiorari and vacated the Ninth Circuit’s decision for
“reconsideration in light of” Wal-Mart. See Chinese Daily News, Inc. v. Wang, __ U.S.__, 132
S. Ct. 74 (Oct. 3, 2011).
But plaintiffs, as noted, have little else, for they simply cannot argue away the widely
varying deposition testimony. While some depositions perfectly comport with plaintiffs’
misclassification theory, others directly contradict it. Representative of the former is the
testimony of Sandy Espinal. Asked to name the duties he performed as ADM of a Western Beef
meat department, Espinal replied: “Wrap, cut meat, clean, pack out provisions, break down the
trucks, inventory.” ECF No. 159-1 at 7. Espinal also testified as follows:

7

Q.

What were you doing as assistant manager that you had not done when you were
the chicken man?

A.

Everything is the same.

Q.

There was nothing that you were doing in addition to what you had been doing
when you were the chicken man?

A.

No.

Q.

You were working a lot more hours?

A.

Yes.

Q.

Those extra hours, you were doing the same things you had been doing when you
were the chicken man?

A.

Correct.

ECF No. 159-1 at 7-8.
By contrast, George Gardner, one of the named plaintiffs, testified as follows:
Q.

When you moved from being a clerk to a manager in the grocery department, how
did that affect what you did on a day-to-day basis?

A.

It’s a big difference . . .

Q.

You had to do a lot more things?

A.

Sure.

Q.

What kind of things did you have to do in addition as a grocery manager that you
had not done as a clerk?

A.

You have to do orders, you have to talk – when the salespersons come in, you
have to talk to them, taker order from them . . . You [also] have to take care of the
– guide th[e other clerks] on the floor, make sure the stuff is packed out.

ECF 159-8 at 7-8. Oddly, the same George Gardner also submitted a declaration in which he
appears to assert that his duties were primarily non-managerial. ECF No. 148 at 1-2.
Likewise, whereas several employees testified that they “manage” a department
consisting of only themselves or at most one other worker (e.g., Morris White, ECF No. 155-2 at
8

5), others claimed to have been at the helm of departments (such as meat, in the larger Western
Beef stores), containing up to 15 employees (e.g., Espinal, ECF No. 159-1 at 11). For some,
“overseeing” the work of other clerks in their department appears to be their defining
responsibility (e.g., Jose Gomez, ECF No. 153-2 at 4), while for others, the actual supervising of
others seems to be a periodic or incidental component of their job (e.g. Pedro Reynoso, ECF
154-1 at 11 et seq.)
To reiterate, the Court’s task at the Rule 23 stage is not to resolve the liability question
but to decide “whether the constituent issues that bear on [Western Beef’s] ultimate liability are
provable in common.” Myers, 624 F.3d at 549 (emphasis added). Defendants do not exaggerate
in describing the depositions as “wildly disparate” accounts of the day-to-day job duties and
responsibility levels of the DMs and ADMs working at Western Beef. Despite the promising
theories advanced in the pleadings, neither the “largely consistent” nor the “generalizable” has
emerged from the evidence.
That evidence spans nine different departments—Meat, Produce, Frozen, Fish, Grocery,
Bakery, Deli, Dairy and Receiving—each of which has a distinct set of concerns and job duties.
In the face of the qualitative differences inherent in department specialization (and, in some
instances, size), and the differing levels of responsibility the various deponents appear to claim to
exercise, the Court cannot permit class treatment of all DM and ADM overtime claims absent
some evidence that, despite the variation in the employees’ accounts of their duties, the employer
might nevertheless maintain a standardized company-wide description of responsibilities for
DMs and ADMs. See, e.g., Youngblood v. Family Dollar Stores, 09 CV 3176 (RMB) 2011 WL
4597555, *2-4 (S.D.N.Y. Oct. 4, 2011). (in management exemption overtime suit, certifies class
of all Family Dollar store managers, despite the individualized nature of the duties test, because

9

there was evidence of “centralized” employer “policies” setting forth, “often in minute detail,”
the essential duties of store managers company-wide). Deciding whether such a standardized job
description or set of responsibilities qualifies for the “management exemption” would resolve the
principal liability question “in one stroke.” But the record here contains no evidence that job
duties and responsibility levels are the product of centralized or standardized corporate policy.
The Court cannot certify a class on the basis of a hunch that there exists some corporate
document that plaintiffs failed to discover.
III.
One final point requires brief attention. Wal-Mart recognizes that one of the ways
individual plaintiffs can “bridge[]” the “conceptual gap” between their claims and those of the
class that they claim suffered a similar injury is by “[s]ignificant proof” that the employer acted
under a “general policy” to engage in the alleged unlawful conduct. Wal-Mart, 131 S. Ct. at
2553 (quoting General Telephone Co. of Southwest v. Falcon, 457 U.S. 147, 159 n. 15 (1982)).
In the two prior motions in this case, the gravamen of plaintiffs’ case was their assertion of just
such a policy: specifically, plaintiffs have alleged and argued that it was defendants’ “policy” to
assign managerial titles to workers who duties were for the most part not managerial for the
purpose of evading the legal obligation to pay overtime, the implication being that the titles DM
and ADM reflected sham promotions accompanied by token or occasional managerial
responsibilities and longer hours. Assuming arguendo that plaintiffs do not intend to abandon
this argument, it nevertheless would not support certification because the record does not contain
“significant proof” of the alleged policy.
To be sure, it is rare that litigants unearth a “smoking gun” directly proving the illegal
corporate policy that their pleadings allege. But even inferential proof is lacking here: the wide

10

variation in the deposition testimony of DM and ADM work responsibilities militates strongly
against the inference that a centralized policy to misclassify (presumably, in order to evade the
overtime requirements) is the culprit. As noted, alongside deposition excerpts supporting
apparently actionable overtime claims are excerpts describing seemingly bona fide managerial
work.
In further support of their policy assertion, however, plaintiffs also offer four declarations
from employees (the three named plaintiffs and one opt-in plaintiff) asserting, in general and
conclusory terms, that they know of many others who, like themselves, work as DMs or ADMs
but do not have managerial responsibilities. ECF Nos. 146-149. But these four documents do
not amount to “significant proof” of the alleged company-wide policy to misclassify. The
assertions lack specificity, and they are of questionable probative value for the additional reason
that they appear only in the attorney-drafted declarations of three individuals who were also
deposed, and in the declaration of a fourth individual, an opt-in plaintiff, whom the Court
ordered dismissed from the action because she could not be produced for a deposition. See
Order dated July 8, 2011, ECF No. 142.
IV.
Appearing for the first time in their reply objections—in a lawsuit begun nearly four and
a half years ago (ECF No. 1, June 11, 2007)—is plaintiffs’ alternative request that the Court
certify a class of “clerks with the title ‘Manager’” who worked “in departments where they
worked alone or with only one other employee.” ECF 168 at 2-3. Plaintiffs understandably
argue, in reliance on the applicable regulation, that employees who did not direct the work of two
or more employees are ineligible as a matter of law for the management exemption. See 29
C.F.R. § 541.100(a)(2) (to qualify for management exemption, employee must “customarily and

11

regularly direct[] the work of two or more other employees”). Assuming without deciding that
this materially different, last-minute request is properly before the Court at this time, it is denied
without prejudice. Plaintiffs have not addressed how this proposed class would measure up
against each of Rule 23’s requirements, and based on what plaintiffs have offered, they may fail
at the threshold factor, numerosity. While “[t]here is no specific minimum number of putative
class members that will satisfy the numerosity requirement, and the plaintiffs need not establish
the population of the putative class with precision so long as they reasonably estimate that the
number is substantial,” Calabrese v. CSC Holdings, Inc., 2011 WL 425879, *7 (E.D.N.Y. Feb.
29, 2009) (DLI) (internal quotation and citations omitted), plaintiffs identify at most between 1113 employees (depending upon how one reads the depositions) who might fall into such a class.
This is plainly not a substantial number and well below the numerosity presumption of 40.
V.
Plaintiffs also move under Rule 15(a) for leave to amend their Amended Complaint, in
light of the Supreme Court’s decision in Shady Grove Orthopedic Assoc., P.A. v. Allstate Ins.
Co., 559 U.S.__, 130 S. Ct. 1431 (2010), to delete paragraph 128, in which they “waive their
right to punitive damages under New York Labor law.” ECF 39 at 19. Although they are in
federal court, plaintiffs apparently included this waiver to remove any bar to certification that
might be presented by New York’s class certification provision, C.P.L.R. § 901(b), which
provides that “an action to recover a penalty, or minimum measure of recovery created or
imposed by statute may not be maintained as a class action.” Rule 23 contains no such
limitation, and in Shady Grove, the Court held that as the federal rule, Rule 23 governs class
certification in all federal court litigation and overrides New York law to the contrary. 131 S. Ct.
at 1437-1442.

12

Appropriately, defendants do not object to plaintiffs’ request for leave to amend,
Magistrate Judge Azrack recommends that leave be granted, see R&R (Part II) at 14-15, and
neither party has addressed the subject in the post-R&R submissions. Finding no clear error, the
Court would ordinarily adopt the recommendation without qualification. But the Court observes
that inasmuch as the punitive damages waiver was intended to remove a possible bar to
certification, the denial of Rule 23 certification renders moot any apparent reason to remove the
waiver. Nevertheless, the future course of the lawsuit having yet to be charted, and there being
no legal basis for denying the request, plaintiffs’ request for leave to amend is granted.
CONCLUSION
The Court adopts the Report and Recommendation of Magistrate Judge Azrack as
supplemented above and denies plaintiffs’ motion for certification of a state-wide class of
present or former employees of Western Beef who hold or held the title “Department Manager”
or “Assistant Department Manager.” Plaintiffs’ motion for leave to amend their Amended
Complaint solely to delete paragraph 128 is granted. Plaintiffs’ alternative request for
certification of a state-wide class of present or former employees of Western Beef who hold or
held the title “Department Manager” of a department “where they worked alone or with only one
other employee” is denied without prejudice.
SO ORDERED.
Dated: Brooklyn, New York
December 9, 2011
s/ Judge Raymond J. Dearie
_________________________________
RAYMOND J. DEARIE
United States District Judge

13