Kincaid v. Educ. Credit Mgmt. Corp.

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SHEILA KINCAID, Plaintiff, v. EDUCATION CREDIT MANAGEMENT CORPORATION, INC., ET AL. Defendants.

No. 2:21-cv-00863-TLN-JDP

United States District Court, E.D. California

March 29, 2024

ORDER

TROY L. NUNLEY UNITED STATES DISTRICT JUDGE

This matter is before the Court on Plaintiff Sheila Kincaid's (“Plaintiff”) Motion for Class Certification. (ECF No. 32.) Defendants Education Credit Management Corporation (“ECMC”) and ECMC Group (collectively, “Defendants”) filed an opposition. (ECF No. 34.) Plaintiff filed a reply. (ECF No. 36.) Also before the Court is Defendants' Request to File a Sur-reply. (ECF No. 41.) Plaintiff filed an opposition. (ECF No. 42.) For the reasons set forth below, the Court GRANTS in part and DENIES in part Plaintiff's motion for class certification and DENIES Defendants' request to file a sur-reply.

I. Factual and Procedural Background

Plaintiff brought this putative class action against Defendants for alleged wage and hour violations. (ECF No. 32.) Defendant ECMC is a student loan guarantor for the Federal Family Education Loan Program, and Defendant ECMC Group is ECMC's parent company. (Id. at 9.) Plaintiff was employed as a Loan Repayment Counselor from June 25, 2012, to August 4, 2018, at ECMC's location in Mather, California. (Id.) Plaintiff answered incoming calls from borrowers who were in danger of defaulting on their student loans and assisted them in finding repayment options. (Id.) Plaintiff was an hourly-paid employee and earned bonuses and commissions throughout her employment. (Id. at 9-10.)

Plaintiff alleges claims for violations of: (1) California Labor Code §§ 510 and 1198 (Unpaid Overtime); (2) California Labor Code §§ 226.7 and 512(a) (Unpaid Meal Period Premiums); (3) California Labor Code § 226.7 (Unpaid Rest Period Premiums); (4) California Labor Code §§ 1194, 1197, and 1197.1 (Unpaid Minimum Wages); (5) California Labor Code §§ 201 and 202 (Final Wages Not Timely Paid); (6) California Labor Code § 204 (Wages Not Timely Paid During Employment); (7) California Labor Code § 226(a) (Non-Compliant Wage Statements); (8) California Labor Code § 1174(d) (Failure to Keep Requisite Payroll Records); (9) California Labor Code §§ 2800 and 2802 (Unreimbursed Business Expenses); and (10) California Business & Professions Code §§ 17200, et seq. (ECF No. 1-1 at 4.)

In the instant motion, Plaintiff seeks to certify the following class and subclasses:

1. Class: All current and former hourly-paid or non-exempt employees who worked for ECMC and/or ECMC Group within the state of California at any time during the period from February 26, 2017, up to the deadline, to be determined by the Court at a later date, by which class members may opt-out after being provided notice of certification (the “Class Period”).

2. Regular Rate Subclass: All members of the Class who received non-discretionary bonuses, commissions, and/or incentives which were not included in the regular rate of pay for purposes of overtime compensation.

3. Rounding Subclass: All members of the Class whose time entries were rounded by ECMC during the Class Period.

4. Off-the-Clock Subclass: All members of the Class who used ECMC's phone dialer system to perform their job duties during the Class Period.

5. Meal Period Subclass: All members of the Class who worked at least one shift of more than five hours at any time during the Class Period.

6. Rest Period Subclass: All members of the Class who worked at least one shift of three and one-half hours or more at any time during the Class Period.

7. 226.7 Premium Subclass: All members of the Class who received non-discretionary bonuses, commissions, and/or incentives which were not included in the regular rate of compensation for purposes of a premium payment made pursuant to California Labor Code § 226.7 at any time during the Class Period.

(ECF No. 32 at 2.)

II. Standard of Law

Federal Rule of Civil Procedure (“Rule”) 23 governs class certification. “Parties seeking class certification bear the burden of demonstrating that they have met each of the four requirements of [Rule] 23(a) and at least one of the requirements of Rule 23(b).” Ellis v. Costco Wholesale Corp., 657 F.3d 970, 979-80 (9th Cir. 2011) (citing Zinser v. Accufix Rsch. Inst., Inc., 253 F.3d 1180, 1186 (9th Cir. 2001), amended by 273 F.3d 1266 (9th Cir. 2001)).

Under Rule 23(a), the party seeking certification must establish: (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 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). “These requirements effectively ‘limit the class claims to those fairly encompassed by the named plaintiff's claims.'” Gen. Tel. Co. of Sw. v. Falcon, 457 U.S. 147, 156 (1982) (quoting Gen. Tel. Co. of the Nw. v. Equal Employ. Opp. Comm'n, 446 U.S. 318, 330 (1980)).

Plaintiff relies on Rule 23(b)(3) of the Rule 23(b) requirements. (ECF No. 32 at 20.) Under Rule 23(b)(3), “a class action may be maintained if Rule 23(a) is satisfied and 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.” Fed.R.Civ.P. 23(b)(3). “The decision to grant or deny class certification is within the trial court's discretion.” Bateman v. Am. Multi-Cinema, Inc., 623 F.3d 708, 712 (9th Cir. 2010) (citation omitted).

III. Analysis

Plaintiff asserts all the Rule 23 requirements are satisfied for the putative class and subclasses. (ECF No. 32 at 20-28.) In opposition, Defendants claim Plaintiff has not met her burden for class certification as to several Rule 23 requirements. (ECF No. 34 at 6-21.) The Court will address the Rule 23(a) and Rule 23(b)(3) requirements in turn.

A. Rule 23(a)

i. Numerosity

The first Rule 23(a) prerequisite is numerosity. Fed.R.Civ.P. 23(a)(1). The class must be “so numerous that joinder of all members is impracticable.” Id. The numerosity requirement does not impose a precise numerical threshold. Gen. Tel. Co. of the Nw., 446 U.S. at 330.

In the instant case, Plaintiff alleges there are approximately 263 putative class members. (ECF No. 32 at 20.) In opposition, Defendants contend the Court should exclude 147 potential class members who signed Severance Agreements and 70 potential class members who worked through placement agencies. (ECF No. 34 at 6-7.) Defendants also argue Plaintiff cannot show numerosity as to those who received stay bonuses because only 13 employees received such a bonus. (Id. at 8.)

The Court finds Plaintiff's proposed class size satisfies the numerosity requirement. See E.E.O.C. v. Kovacevich “5”Farms, No. CV-F-06-165-OWW-TAG, 2007 WL 1174444, at *21 (E.D. Cal. Apr. 19, 2007) (“Courts have routinely found the numerosity requirement satisfied when the class comprises 40 or more members.”); Murillo v. Pac. Gas & Elec. Co., 266 F.R.D. 468, 474 (E.D. Cal. 2010) (citing cases that found classes with fewer than 100 putative class members sufficient to satisfy numerosity). Even if the Court were to agree with Defendants that 147 severance workers and 70 placement agency workers should be excluded from the putative class, 46 individuals would remain, which is sufficient to meet numerosity in this district. See Kovacevich “5”Farms, 2007 WL 1174444, at *21.

Further, Defendants' argument that Plaintiff cannot show numerosity as to the Regular Rate Subclass based on stay bonuses is without merit. Plaintiff's putative Regular Rate Subclass includes employees who received non-discretionary bonuses, commissions, and incentives - not just stay bonuses. (ECF No. 32 at 2.) Additionally, Plaintiff provided the Court with time and pay data which shows there were 94 individuals with pay periods where the hourly rate used to compute overtime pay did not consider non-discretionary earnings. (ECF No. 32-4 at 6.) Ninety-four individuals' pay periods are sufficient to meet numerosity. See Kovacevich “5” Farms, 2007 WL 1174444, at *21.

Accordingly, the Court concludes Plaintiff satisfies the numerosity requirement.

ii. Commonality/Predominance

Because the parties address Rule 23(a)(2) commonality and Rule 23(b)(3) predominance together, the Court will address these requirements together for each proposed subclass.

To establish commonality, there must be “questions of law or fact that are common to the class.” Fed.R.Civ.P. 23(a)(2). Commonality exists when class members' claims depend on a common contention that is “capable of class wide 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.” Wal-mart Stores, Inc. v. Dukes, 564 U.S. 338, 350 (2011). Further, the “rigorous analysis” under Rule 23(a) “sometimes [requires] the court to probe behind the pleadings before coming to rest on the certification issue.” Id. at 350-51 (quotations omitted). “[T]he merits of the class members' substantive claims are often highly relevant when determining whether to certify a class,” and “a district court must consider the merits” if they overlap with Rule 23(a)'s requirements. Ellis, 657 F.3d at 981. As such, a court must resolve any factual disputes “to determine whether there was a common pattern and practice that could affect the class as a whole.” Id. at 983; see Wang v. Chinese Daily News, Inc., 737 F.3d 538, 544 (9th Cir. 2013).

The predominance requirement is set forth in Rule 23(b)(3). To meet predominance,...