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April 12, 2013

Court Erred in Denying Class-Action Status for New York Applebee’s Workers, Public Citizen Tells Second Circuit

Outcome of Case Has National Implications for Workers and Consumers

WASHINGTON, D.C. – A federal district court in New York was wrong to tell a group of Applebee’s workers that their lawsuit for unpaid wages could not be heard as a class action, Public Citizen said today in a petition to the U.S. Court of Appeals for the Second Circuit filed on behalf of the workers. The petition seeks to appeal the district court’s decision.

The U.S. District Court for the Northern District of New York denied class certification after incorrectly interpreting the March 27 U.S. Supreme Court ruling in Comcast v. Behrend, the petition explains. The outcome of the New York case has national implications for a wide array of pending class-action cases across the country that are being challenged in the wake of the Comcast decision.

“If this decision stands, and these workers are not permitted to band together to seek back wages that were illegally withheld by their employer, then wage-and-hour laws and other protections for workers and consumers could become prohibitively difficult to enforce,” said Scott Michelman, an attorney with Public Citizen. “Individuals wrongly underpaid in relatively small amounts generally don’t have the resources to sue their employers individually. They need to be able to join together to go to court.”

In the case, filed in May 2010, five Applebee’s workers allege, among other things, that the company violated a New York state “spread of hours” law requiring employers to pay an extra hour’s pay whenever an employee’s work time spans more than 10 hours in a day, and that Applebee’s managers changed time records to reflect breaks that its employees didn’t take. The workers sought certification of a class encompassing current and former Applebee’s workers throughout the state, a group estimated to include as many as 10,000 individuals.

In a March 5, 2013 report, a magistrate judge recommended certification of the class action for the spread-of-hours claim.

But on March 29, two days after the Comcast ruling, the district court rejected the recommendation and denied class-action status. The district court said that, under Comcast, it could not certify a class for which damages would need to be calculated on an individual basis.

Public Citizen’s petition charges that the district court misread Comcast. In Comcast, an antitrust case, both sides agreed that damages needed to be proved on a classwide basis, so the Supreme Court did not even consider whether an individualized measure of damages forecloses class certification in other types of cases or under other circumstances.

“The district court’s interpretation of Comcast contradicts the well-established principle of law that the need to ascertain damages on an individual basis is not by itself sufficient to prevent certification of a class action,” explained Michelman. “If it were, many types of cases would not go forward.”

For instance, in many employment cases, the employer is alleged to have withheld overtime but the amount of overtime that each employee worked (and therefore the amount owed to each) differs. Damages could also vary among consumers injured to different degrees by the same product defect, or employees who suffered different types of harm as a result of a single discriminatory employment practice.

Thomas & Solomon LLP of Rochester, N.Y., and O’Hara, O’Connell & Ciotoli of Fayetteville, N.Y., are co-counsel in the case. The petition is available at http://www.citizen.org/litigation/forms/cases/getlinkforcase.cfm?cID=819.

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