Failure to give the requisite 60-days’ notice to a group of employees under the WARN Act seems like it implicates a quintessential common question for adjudication under Rule 23. But in Hutson v. CAH Acquisition Company 10, LLC, 1:15CV742 (M.D.N.C. Aug. 15, 2016), Defendant gamely tried to suggest that there were factual issues that must be resolved as to each plaintiff. Admittedly, the case was a bit more complicated than the typical WARN Act case – the closing of the employer’s facility was postponed, and there apparently was confusion about just what the employer explained to employees about the postponement. But Judge Osteen did not pause long in certifying the class, observing that “whether the [new] 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.” Judge Osteen similarly rejected defendant’s typicality argument, holding that the claims at issue all “arise out of the exact same conduct, and rest on the exact same legal theories as those of the proposed class.” The prospect of adjudicating 130 individual claims under the WARN Act – for the same closure event – seems daunting, and Judge Osteen’s decision on class certification was right down the middle of the fairway on this one.
Cone v. American Airlines Group, Inc., a case filed this Thursday in the Middle District of North Carolina, is one of dozens of antitrust suits filed against the major U.S. airlines in courts across the country in recent weeks. With the addition of North Carolina, suits are now pending in at least seven states and the District of Columbia. Terry Maxon, who blogs about the airline business for the Dallas Morning News, has identified at least 75 such cases.
The Plaintiffs in the MDNC case, as in the other actions, allege that the major domestic airlines conspired to raise the price of airline tickets by limiting the routes and seats available to passengers. The basic theory is that the airlines unlawfully cooperated to maintain high ticket prices by artificially constraining capacity. According to the Plaintiffs, the combination of capacity constraints and declining fuel prices enabled the airlines to generate “record-breaking supracompetitive profits.”
The cases all arise from Civil Investigation Demands that the Department of Justice sent to the major domestic airlines (American, Delta, Southwest, and United) asking the airlines to produce communications with each other, Wall Street, and major shareholders about their future plans for passenger capacity. The flood of lawsuits began in July, when news of the investigation broke in stories like “US probing possible airline collusion that kept fares high”.
The Judicial Panel on Multidistrict Litigation is likely to transfer these cases to a single judge for pretrial proceedings. The panel will hear argument on motions to transfer for MDL proceedings on October 1, 2015.
In Wal-Mart Stores, Inc. v. Dukes, the Supreme Court tightened the requirements for establishing “commonality” for class certification under Rule 23. After all, it’s easy enough to articulate an abstract “common question” in a putative class action: “For example: Do all of us plaintiffs indeed work for Wal-Mart? Do our managers have discretion over pay? Is that an unlawful employment practice?” Wal-Mart, 131 S. Ct. 2541, 2551 (2011). But, according to Justice Scalia, such abstract questions no longer suffice: the “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 is central to the validity of each one of the claims in one stroke.” Id. Unsurprisingly, this standard presents special challenges to certification of nationwide class actions involving state law claims. See Cochran v. Volvo Group North America, LLC, No. 1:11-cv-927, 2013 WL 1729103, at *2-*3 (M.D.N.C. Apr. 22, 2013) (discussing problems, including constitutional and manageability concerns, associated with choice-of-law issues for nationwide breach of warranty claims).
The Cochran plaintiffs sought certification of a nationwide class of truck owners and lessees with warranty claims related to certain Volvo trucks. The Cochran plaintiffs asserted that the potential class members had substantially the same warranty and that two common “fact” questions existed: (1) did the trucks have common defects and (2) did Volvo fail to fix the defects? Seems fairly straightforward, right? Unfortunately for the Cochran plaintiffs, warranty claims are state law claims, and they failed to show either that the same law (or at least a common element) applied to breach of warranty claims throughout America or that one state’s law applied to all putative class members’ claims. Cf. Gariety v. Grant Thornton, LLP, 368 F.3d 356, 370 (4th Cir. 2004) (recognizing that plaintiffs must identify and compare applicable states’ laws where choice-of-law issues impact certification decision). Without this information, the court could not determine whether “resolution of the defect and repair questions would resolve an issue that is central to the validity of the warranty claim,” precluding class certification. Cochran, 2013 WL 1729103, at *4. As the Cochran plaintiffs discovered, under the heightened Wal-Mart commonality standard, “evidence of defect and failure to repair is not, in the end, enough for class certification.” Id.