HUTSON et al v. CAH ACQUISITION COMPANY 10, LLC et al
Filing
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MEMORANDUM OPINION AND ORDER signed by CHIEF JUDGE WILLIAM L. OSTEEN, JR on 08/15/2016; that Named Plaintiffs' Motion for Class Certification (Doc. 16 ) is GRANTED. FURTHER ORDERED that Carrie Hutson, Jeanna Simmons, and Jenifer Swanner are appointed as class representatives and that the Taibi Kornbluth Law Group, P.A., and the Zachary Law Offices are appointed as Class Counsel. (Garland, Leah)
IN THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF NORTH CAROLINA
CARRIE HUTSON, JEANNA SIMMONS,
and JENIFER SWANNER,
individually and as Class
Representatives,
Plaintiffs,
v.
CAH ACQUISITION COMPANY 10,
LLC, d/b/a YADKIN VALLEY
COMMUNITY HOSPITAL, HMC/CAH
CONSOLIDATED, INC., and
RURAL COMMUNITY HOSPITALS OF
AMERICA, LLC,
Defendants.
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1:15CV742
MEMORANDUM OPINION AND ORDER
OSTEEN, JR., District Judge
Presently before this court is a Motion to Certify Class
filed by Plaintiffs Carrie Hutson, Jeanna Simmons, Jennifer
Swanner, (collectively “Named Plaintiffs”), both individually
and as class representatives. (Doc. 16.) Defendants CAH
Acquisition Company 10, LLC, d/b/a Yadkin Valley Community
Hospital, HMC/CAH Consolidated Inc., and Rural Community
Hospitals of America, LLC (collectively “Defendants”), have
responded (Doc. 21), and Named Plaintiffs have replied. (Doc.
23.) This issue is now ripe for resolution and for the reasons
stated herein, Named Plaintiffs’ motion will be granted.
I.
BACKGROUND
Named Plaintiffs and the members of the class they now seek
to certify are former employees of Yadkin Valley Community
Hospital (“the Hospital”), which was operated by Defendants.
(Complaint (“Compl.”) (Doc. 1) ¶ 7.) On February 27, 2015,
Defendants issued a notice to the employees of the Hospital that
the Hospital would close, and all employees terminated, on
April 30, 2015. (Id. ¶ 17.) The decision to close the Hospital
was apparently due to Yadkin County’s unwillingness to renew the
Hospital’s lease agreement on terms acceptable to Defendants.
(Defs.’ Response Br. in Opp’n to Pls.’ Motion to Certify Class
(“Defs.’ Resp.”), Ex. 1, Aff. of Shawn Bright (“Bright Aff.”)
(Doc. 21-1) ¶ 3.) However, Defendants did not close the Hospital
or terminate its employees on April 30, instead agreeing to a
lease extension with the County of Yadkin until July 31, 2015,
in order to attempt to negotiate a long-term extension. (Compl.
(Doc. 1) ¶¶ 18-20.) Defendants were apparently unable to come to
a long-term agreement with Yadkin County, and Plaintiffs allege
that on May 21, 2015, Defendants “notified some of its employees
that their final day of employment would be May 23, 2015,”
delivered Human Resources paperwork to those employees, and
closed the Hospital on May 22. (Compl. (Doc. 1) ¶¶ 21-24.)
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Named Plaintiffs filed the instant action, and now seek
certification of class consisting of the terminated employees of
the Hospital.
II.
ANALYSIS
Rule 23 of the Federal Rules of Civil Procedure governs the
standards that must be met for class certification. Fed. R. Civ.
P. 23. Certification of a class pursuant to Rule 23 involves a
two-step analysis. First, Rule 23(a) sets out preliminary
requirements, stating that “[o]ne 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)(1)-(4).
These preliminary requirements are referred to as
numerosity, commonality, typicality, and adequacy.
The second,
third, and fourth requirements are interrelated, with
“commonality and typicality serving as guideposts for
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determining whether . . . maintenance of a class action is
economical and whether the [claims] are so interrelated that the
interests of the class members will be fairly and adequately
protected in their absence.” Brown v. Nucor Corp., 576 F.3d 149,
152 (4th Cir. 2009) (internal quotations and citations omitted).
If the prerequisites are met, the moving party must show
that the action is maintainable under at least one of the three
categories set forth in Rule 23(b). Amchem Prods., Inc. v.
Windsor, 521 U.S. 591, 614 (1997). Plaintiffs seek certification
under Rule 23(b)(3), which sets forth that a class action may be
maintained if “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.” Fed. R. Civ. P. 23(b)(3). The requirements for
commonality under Rule 23(b)(3) are more stringent than that of
Rule 23(a), and supersedes the more lenient rule. See Lienhart
v. Dryvit Sys., Inc., 255 F.3d 138, 146 n.4 (4th Cir. 2001).
It is the plaintiff’s burden to establish that the Rule 23
requirements have been met. In re A.H. Robins Co., 880 F.2d 709,
728 (4th Cir. 1989). However, in the Fourth Circuit, Rule 23 is
given “a liberal rather than a restrictive construction,
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adopting a standard of flexibility in application which will in
the particular case best serve the ends of justice for the
affected parties and . . . promote judicial efficiency.”
Gunnells v. Healthplan Servs., Inc., 348 F.3d 417, 424 (4th Cir.
2003) (internal quotations omitted).
A.
The Proposed Class is Sufficiently Numerous
Rule 23(a) contemplates the certification of a class where
“the class is so numerous that joinder of all members is
impracticable.” Fed. R. Civ. P. 23(a). There is no “mechanical
test” for determining whether the requirement of numerosity has
been satisfied. Adams v. Henderson, 197 F.R.D. 162, 170 (D. Md.
2000). Rather, there are a number of factors to be considered in
determining whether joinder is impracticable, including “the
size of the class, ease of identifying its numbers and
determining their addresses, facility of making service on them
if joined and their geographic dispersion.” Id. (internal
quotation marks and citations omitted).
Here, Named Plaintiffs contend that the proposed class
numbers “at or around 130 members,” a size that they contend
makes joinder impracticable. (Pls.’ Mem. of Law in Supp. of Mot.
to Certify Class (“Pls.’ Br.”) (Doc. 17) at 7.) “A class of 41
or more is usually sufficiently numerous.” 5 Moore's Federal
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Practice ¶ 23.22 (Matthew Bender 3d Ed.); see also Cypress v.
Newport News Gen. and Nonsectarian Hosp. Ass'n, 375 F.2d 648,
653 (4th Cir. 1967) (finding that a class of 18 was sufficiently
numerous); Ganesh, L.L.C. v. Computer Learning Ctrs., Inc., 183
F.R.D. 487, 489 (E.D. Va. 1998) (“As few as forty [class
members] can suffice in an appropriate case”); Newberg on Class
Actions § 3:11 (6th Ed.2014) (“[J]oinder is generally deemed
practicable in classes with fewer than 20 members and
impracticable in classes with more than 40 members.”).
Defendants do not appear to contest that the numerosity
requirement is met, and this court finds that the proposed class
satisfies the numerosity requirement.
B.
There are Questions of Law and Fact Common to the
Class
“Commonality requires the plaintiff to demonstrate that the
class members have suffered the same injury.” Wal-Mart Stores,
Inc. v. Dukes, 564 U.S. 338, 349-50 (2011) (internal quotation
marks and citation omitted). “[O]nly those plaintiffs . . . who
can advance the same factual and legal arguments may be grouped
together as a class.” Broussard v. Meineke Discount Muffler
Shops, Inc., 155 F.3d 331, 340 (4th Cir. 1998) (internal
quotation marks and citation omitted). “What matters to class
certification . . . is not the raising of common questions . . .
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but, rather the capacity of a classwide proceeding to generate
common answers apt to drive the resolution of the litigation.”
Wal-Mart, 564 U.S. at 350 (internal quotation marks and citation
omitted). However, Rule 23(a)(2) “does not require that all, or
even most issues be common.” Cent. Wesleyan Coll. v. W.R. Grace
& Co., 143 F.R.D. 628, 636 (D.S.C. 1992); Bussian v.
DaimlerChrysler Corp., No. 1:04CV00387, 2007 WL 1752059, at *5
(M.D.N.C. June 18, 2007) (explaining that the test for
commonality “is not demanding, and is met when there is at least
one issue whose resolution will affect all or a significant
number of the putative class members”).
In the instant case, the members of the proposed class
share a single, identical cause of action under the Worker
Adjustment and Retraining Notification Act (the “WARN Act”), 29
U.S.C. § 2101 et seq. The Complaint alleges that all members of
the Proposed Class are former employees of Defendants who were
terminated on the same day without cause, were entitled to
proper notice under the WARN Act, and did not receive the
required notice. (Compl. (Doc. 1) ¶ 29.)
Defendants contend here that, although WARN Act claims are
typically amenable to class action resolution, class
certification is not appropriate because there are factual
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issues that must be resolved as to each plaintiff individually.
(Defs.’ Resp.”) (Doc. 21) at 7.) Specifically, Defendants take
issue with an allegation common to the declarations submitted by
Named Plaintiffs that “department heads” and “other similarly
situated former employees” were told to disregard the
February 27, 2015 WARN Notice. (See, e.g., Pls.’ Br., Ex. A,
Decl. of Carrie Hutson (“Hutson Decl.”) (Doc. 17-1) ¶ 7.) 1
Defendants dispute that this instruction to disregard the
notice actually occurred, but argue that the issue of what
exactly was communicated to each employee regarding the February
27 Notice, and what information they were given about the
Hospital’s status cannot be determined on a class-wide basis,
and that the proposed class thus does not satisfy the
commonality requirement because individual questions about
1
Defendants also contend that, at the very least,
certification of the class should be delayed until after
discovery because: (1) Plaintiffs’ admissions that certain
employees were involved in post-WARN notice conversations; (2)
employees were kept apprised of the Hospital’s status in several
ways; and (3) as demonstrated by the email sent by Plaintiff
Simmons, at least some Plaintiffs had knowledge of the impending
closure of the hospital. (See Defs.’ Resp. (Doc. 21) at 10.) As
set out in more detail this Memorandum Opinion and Order,
because such facts are immaterial to the central question of
whether a timely and adequate WARN notice was given, they do not
convince this court that delay is necessary for resolution.
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notice will necessarily dominate. (Defs.’ Resp. (Doc. 21) at
7-8.)
This court notes that resolution of this issue will require
an inquiry that at least partially touches the merits of
Plaintiffs’ claims, i.e., what constitutes proper notice under
the WARN Act and whether it occurred.
The Supreme Court has
recognized that “sometimes it may be necessary for the court to
probe behind the pleadings before coming to rest on the
certification question,” and that “[f]requently that rigorous
analysis will entail some overlap with the merits of the
plaintiff’s underlying claim.” Wal-Mart, 564 U.S. at 350-51
(internal citations and quotation marks omitted).
Under the WARN Act, employers are required to give written
notice of at least 60 days to employees before any plant closing
or mass layoff. 29 U.S.C. § 2102. According to the Complaint,
Defendants gave written notice that the Hospital would close and
employees would be terminated on February 27, 2015, more than 60
days before the stated termination date of April 30, 2015, as
required by the statute. (Compl. (Doc. 1) ¶ 17.)
However, the Complaint alleges, and Defendants admit, that
the Hospital did not close on April 30, 2015, and employees were
not terminated on that date. (Id. ¶¶ 18-19.) Under the
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implementing regulations of the WARN Act, while the scheduled
date of termination announced in a WARN notification can be
postponed, additional notice must be given if a postponement
occurs. See 20 C.F.R. § 639.10. The regulations require that:
(a) If the postponement is for less than 60 days, the
additional notice should be given as soon as possible
to the parties identified in § 639.6 and should
include reference to the earlier notice, the date (or
14–day period) to which the planned action is
postponed, and the reasons for the postponement. The
notice should be given in a manner which will provide
the information to all affected employees.
(b) If the postponement is for 60 days or more, the
additional notice should be treated as new notice
subject to the provisions of §§ 639.5, 639.6 and 639.7
of this part. Rolling notice, in the sense of routine
periodic notice, given whether or not a plant closing
or mass layoff is impending, and with the intent to
evade the purpose of the Act rather than give specific
notice as required by WARN, is not acceptable.
20 C.F.R. § 639.10.
As such, whether or not certain individuals were told to
disregard the notice provided on February 27, 2015, is
irrelevant to this court’s inquiry, because that notice ceased
be valid when the termination date it specified passed with no
termination. As detailed above, a new, full WARN Act
notification must be given if the delay is for more than 60
days, and regardless of the length of postponement, any new
notice is required to contain specific information including,
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most relevantly here, the new termination date. Any oral
communications by Defendants to some or all of their employees,
no matter how well intentioned, are immaterial to whether proper
WARN Act notice was given, because none of those communications
contained the required specification of the new date that the
Hospital would close, apparently because that date had not yet
been determined. It appears to this court that the only notice
given by Defendants that contained this information was issued
on May 21, 2015. (Compl. (Doc. 1) ¶ 21.) As such, whether this
notice was timely and sufficient under the WARN Act, or whether
notice was in effect given at all, are questions of law and fact
common to the class, and the commonality requirement is met.
C.
Named Plaintiffs’ Claims are Typical of the Class
As noted above, the typicality requirement of Rule 23(a)(3)
overlaps with the commonality requirement of Rule 23(a)(2).
However, the typicality requirement focuses on the named
plaintiff’s claim, rather than the class claims as a whole.
Tatum v. R.J. Reynolds Tobacco Co., 254 F.R.D. 59, 64 (M.D.N.C.
2008). This requirement is satisfied when the claims asserted by
the named plaintiffs “arise out of the same course of conduct
and are based on the same legal theories as the claims of the
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unnamed class members.” Id. (quoting Rodger v. Elec. Data Sys.
Corp., 160 F.R.D. 532, 538 (E.D.N.C. 1995)).
Relatedly to their arguments on commonality, Defendants
contend that Named Plaintiffs are not typical of the class
because issues of notice will have to be determined on an
individual basis. (Defs.’ Resp. (Doc. 21) at 8.)
This argument
fails for the same reasons as set out above. 2 Contrary to
Defendants’ position, Named Plaintiffs’ single claim is
identical to that of the class: they claim that Defendants
2
Defendants’ reliance on an email sent by Named Plaintiff
Simmons is illustrative of why written notice containing
specific information is required under the WARN Act. Defendants
argue that “[i]t certainly cannot be said that Simmons is in the
same situation as the purported class when she is emailing
Bright to dissuade him from providing the very notice that she
now claims she never received.” (Defs.’ Resp. (Doc. 21) at 9.)
In the email at issue, Simmons asks Bright whether placing signs
regarding keeping the Hospital open in front of the Hospital
would negatively affect morale, and may serve as a visual
reminder that employees “may” lose their jobs, and is told by
Bright that the Hospital is losing money quickly and does not
have a few weeks to spare. (Bright Aff., Ex. 1 (Doc. 21-1) ¶ 7;
id. at 6.) At this point, Simmons clearly does not think that
the Hospital’s closure is a foregone conclusion, much less is
aware of a specific closing date. As such, she had clearly not
received sufficient notice by virtue of any oral communications
as of May 12, 2015, and a response that the Hospital was losing
money and did not have “a few weeks” to spare did nothing to
cure that status. Named Plaintiff Simmons, like the other
employees of the Hospital, was simply aware that the Hospital
was in trouble, and that closure was possible, and perhaps
likely. That is not enough under the WARN Act.
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violated the WARN Act by failing to provide sufficient written
notice of termination.
Their claims arise out of the exact same conduct, and rest
on the exact same legal theories as those of the proposed class.
As such, this court finds that Named Plaintiffs’ claims are
typical of those in the class as a whole.
D.
Named Plaintiffs will Adequately Represent the Class
Finally, the Named Plaintiffs must “fairly and adequately
protect the interests of the class.” Fed. R. Civ. P. 23(a)(4).
This requirement examines possible conflicts of interest between
the named plaintiffs and the proposed class, as well as the
competency and conflicts of class counsel. Tatum, 254 F.R.D. at
67.
In order to adequately represent the class, the named
plaintiffs must be a part of the class, possess the same
interest as the class, and suffer the same injury as the class
members. Amchem, 521 U.S. at 625-26. Here, there is no
difference in interest between Named Plaintiffs and the proposed
class: the termination date is the same across the class, the
notice at issue for purposes of the WARN Act is identical, and
Named Plaintiffs seek the same redress as the rest of the class,
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as provided by the WARN Act. As such, this court finds that
Named Plaintiffs will adequately represent the class.
This court must also find that class counsel will be
adequate, meaning that counsel is “qualified, experienced, and
generally able to conduct the proposed litigation.” In re
Protected Vehicles, Inc., 397 B.R. 339, 345 (Bankr. D.S.C.
2008).
Adequacy of counsel is generally “presumed in the
absence of specific proof to the contrary.” Melton ex rel.
Dutton v. Carolina Power & Light Co., 283 F.R.D. 280, 287
(D.S.C. 2012).
Here, there is no proof that counsel is not
qualified, experienced, or able to conduct the litigation. As
such, this court will presume counsel is adequate.
E.
The Class Satisfies the Requirements of Rule 23(b)(3)
Finally, the proposed class must also be justified under
one of the three criteria laid out in Rule 23(b). Here, Named
Plaintiffs propose to certify under Rule 23(b)(3), which
requires that the court find first that questions of law or fact
common to the members of the class predominate over any
questions affecting only individual members, and second that a
class action is superior to any other available method for
fairly and efficiently litigating the action. Gariety v. Grant
Thornton, LLP, 368 F.3d 356, 362 (4th Cir. 2004). These two
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requirements are commonly known as predominance and superiority.
Predominance requires that “[common] questions of law or fact
. . . predominate over any questions affecting only individual
members.” Fed. R. Civ. P. 23(b)(3). The predominance inquiry
“tests whether proposed classes are sufficiently cohesive to
warrant adjudication by representation.” Amchem, 521 U.S. at
623. Superiority requires that a class action be “superior to
other available methods for fairly and efficiently adjudicating
the controversy.” Fed. R. Civ. P. 23(b)(3).
The relevant legal and factual issues in this case are
essentially identical across the class. As noted above, because
of the specific information required to be contained in WARN Act
notices, any information about the status of the Hospital
conveyed in an informal manner to individual members of the
class will not affect the class claim under the WARN Act,
because the decision as to the specific termination date and
closing of the Hospital was not communicated until May 21, 2015.
Here, claims common to the class clearly predominate over
individual claims, indeed, the legal issues and facts are
identical across the class.
This court also finds that a class action is superior to
other methods of adjudicating the case. This is not a case that
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involves multiple claims and issues, or conflicting bodies of
law. Establishing liability under the WARN Act in this case will
turn on fairly straightforward issues common to the entire
class, including whether Defendants are “employer[s]” under the
Act, whether a “mass layoff” or “plant closing” took place on
May 23, 2015, and, if so, whether Defendants gave the proper
notice required by the Act. See 29 U.S.C. § 2101(a). Defendants
may also seek to establish defenses common to the entire class.
See, e.g., 29 U.S.C. § 2104(a)(4) (establishing employer's “good
faith” and “reasonable grounds” defenses); 29 U.S.C.
§ 2102(b)(2)(A) (allowing for shortening of the notification
period where employer meets unforeseen business circumstances).
The amounts in controversy are also sufficiently small that
separate proceedings for each class member would be a waste of
both judicial resources as well as both plaintiffs’ and
defendants’ time and money.
Furthermore, if liability is established, the calculation
of total back pay and benefits owed to each member of
the class is a fairly simple matter that will require little
individualized effort.
The class action format is superior to
individual litigation in this instance.
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F.
Named Plaintiffs’ Counsel will be Appointed as Class
Counsel
If a court certifies a class, it must also appoint counsel
to represent the class. Fed. R. Civ. P. 23(g)(1). In considering
an applicant for class counsel, the court must consider the
factors set out in Rule 23, which include (1) the work that
counsel has done in identifying or investigating potential
claims in the action; (2) counsel’s experience in handling class
actions, complex litigation, and the types of claims asserted in
the action; (3) counsel’s knowledge of the applicable law; and
(4) the resources that counsel will commit to representing the
class. Fed. R. Civ. P. 23(g)(1)(A)(i)-(iv). Counsel must also be
capable of fairly and adequately representing the interests of
the class. Fed. R. Civ. P. 23(g)(4).
Here, this court finds that the proposed class counsel has
investigated and pursued the class claims diligently, has
experience litigating class actions, and has knowledge of labor
and employment law. This court finds that proposed class counsel
is capable of fairly and adequately representing the class, and
orders that they be appointed as Class Counsel.
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III. CONCLUSION
For the reasons set forth above, IT IS HEREBY ORDERED that
Named Plaintiffs’ Motion for Class Certification (Doc. 16) is
GRANTED.
IT IS FURTHER ORDERED that Carrie Hutson, Jeanna Simmons,
and Jenifer Swanner are appointed as class representatives and
that the Taibi Kornbluth Law Group, P.A., and the Zachary Law
Offices are appointed as Class Counsel.
This the 15th day of August, 2016.
_______________________________________
United States District Judge
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