(CN) - The 9th Circuit reversed class certification for a group of former Chinese Daily News employees in their decade-old challenge to denied overtime and lunch breaks.
A three-judge panel in San Francisco sent the case back Monday to a Los Angeles federal judge in light the U.S. Supreme Court's 2011 landmark ruling Wal-Mart Stores Inc. v. Dukes, which, among other things, requires courts to use a more rigorous standard when determining class commonality.
The appellate panel also noted a recent California Supreme Court finding that employers do not have to make sure employees actually take the 30-minute lunch breaks that they are required to give.
Former Chinese Daily News (CDN) employees Lynne Wang, Yu Fang Ines Kai and Hui Jung Pa had filed the proposed class action against the company back in 2004, alleging violations of federal and state labor laws. They sought damages, restitution and an injunction, claiming they were forced to work more than eight hours per day without overtime pay or meal breaks.
U.S. District Judge Consuelo Marshal certified the plaintiffs' claims under the federal Fair Labor Standards Act (FLSA) as a collective action, and certified the state-law claims as a class action under Rule 23(b)(2) of the Federal Rules of Civil Procedure.
The District Court again ruled in the plaintiffs' favor in deciding that the CDN's reporters were eligible for overtime, and a jury subsequently awarded them $2.5 million in damages. Judge Marshal later denied the group's request for an injunction.
After the 9th Circuit affirmed in 2010, the 9th Circuit vacated that decision for reconsideration in light of Wal-Mart.
The latest round of oral argument led the unanimous panel to reverse certification and remand for further District Court proceedings.
Contrary to its previous ruling, the panel found that the lower court improperly certified the class under Rule 23(b)(2).
In reversing the 9th Circuit, the high court "made clear that 'individualized monetary claims belong in Rule 23(b)(3)' rather than Rule 23(b)(2)," Judge William Fletcher wrote for the panel.
"The court left open the possibility that 'incidental' monetary claims could be brought in a Rule 23(b)(2) class action, but it declined to decide that question," Fletcher added. "Plaintiffs concede that class certification for their monetary claims under Rule 23(b)(2) cannot stand in light of Wal-Mart. Further, it appears that none of the named plaintiffs has standing to pursue injunctive relief on behalf of the class, as none of them is a current CDN employee."
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