13-3873-cv
Jacob v. Duane Reade, Inc.


                              UNITED STATES COURT OF APPEALS
                                  FOR THE SECOND CIRCUIT
                                        SUMMARY ORDER
RULINGS BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT. CITATION TO A
SUMMARY ORDER FILED ON OR AFTER JANUARY 1, 2007, IS PERMITTED AND IS GOVERNED BY
FEDERAL RULE OF APPELLATE PROCEDURE 32.1 AND THIS COURT’S LOCAL RULE 32.1.1.
WHEN CITING A SUMMARY ORDER IN A DOCUMENT FILED WITH THIS COURT, A PARTY MUST
CITE EITHER THE FEDERAL APPENDIX OR AN ELECTRONIC DATABASE (WITH THE NOTATION
“SUMMARY ORDER”). A PARTY CITING A SUMMARY ORDER MUST SERVE A COPY OF IT ON
ANY PARTY NOT REPRESENTED BY COUNSEL.

      At a stated term of the United States Court of Appeals for the Second Circuit, held at
the Thurgood Marshall United States Courthouse, 40 Foley Square, in the City of New
York, on the 10th day of February, two thousand fifteen.
PRESENT: DENNIS JACOBS,
                 CHRISTOPHER F. DRONEY,
                                 Circuit Judges,
                 LEWIS A. KAPLAN,*
                                 District Judge. 1
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MANI JACOB and LESLEENA MARS, individually and on
behalf of all others similarly situated,
                                 Plaintiffs-Appellees,
OUSMANE DIOP, et al.,
                                  Plaintiffs,

                             v.                                                No. 13-3873-cv

DUANE READE, INC. and DUANE READE HOLDINGS, INC.,
                       Defendants-Appellants,
WALGREEN CO.,
                                 Defendant.
----------------------------------------------------------------------



*
        The Honorable Lewis A. Kaplan, United States District Judge for the Southern District of New
York, sitting by designation.


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FOR PLAINTIFFS-APPELLEES:                                 ADAM T. KLEIN, Outten & Golden LLP,
                                                          New York, NY (Molly A. Books and
                                                          Michael J. Scimone, Outten & Golden
                                                          LLP, New York, NY, Paul W. Mollica,
                                                          Outten & Golden LLP, Chicago, IL, and
                                                          Seth R. Lesser and Fran L. Rudich, Klafter
                                                          Olsen & Lesser LLP, Rye Brook, NY, on
                                                          the brief).

    FOR DEFENDANTS-APPELLANTS:                            CRAIG R. BENSON (Stephen A. Fuchs and
                                                          Christine L. Hogan, on the brief), Littler
                                                          Mendelson, P.C., New York, NY.

    FOR THE BUSINESS COUNCIL OF                           James N. Boudreau, Greenberg Traurig,
    NEW YORK STATE, INC. AS AMICUS                        LLP, Philadelphia, PA.
    CURIAE IN SUPPORT OF
    DEFENDANTS-APPELLANTS:

    FOR THE IMPACT FUND ET AL. AS                         Jocelyn D. Larkin and Robert L. Schug,
    AMICI CURIAE IN SUPPORT OF                            Impact Fund, Berkeley, CA and Joseph M.
    PLAINTIFFS-APPELLEES:                                 Sellers, Abigail E. Shafroth, and Shaylyn
                                                          Cochran, Cohen Milstein Sellers & Toll
                                                          PLLC, Washington, DC.


      Appeal from an August 8, 2013 order of the United States District Court for the
Southern District of New York (Oetken, Judge).

     UPON DUE CONSIDERATION, IT IS HEREBY ORDERED, ADJUDGED,
AND DECREED that the order of the district court is AFFIRMED.

       Plaintiffs-Appellees (“Plaintiffs”), two former employees at stores in New York
owned and operated by Duane Reade, Inc. (“Duane Reade”), filed a class action complaint
against Duane Reade alleging, as is relevant on appeal, that Duane Reade failed to pay
assistant store managers (“ASMs”) overtime in violation of the New York Labor Law.2

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        Plaintiffs also asserted claims under the Fair Labor Standards Act (“FLSA”), which the district
court conditionally certified as a collective action in a prior order. See Jacob v. Duane Reade, Inc., No.
11-cv-0160 (JPO), 2012 WL 260230 (S.D.N.Y. Jan. 27, 2012). Plaintiffs‟ FLSA claims conferred
federal-question jurisdiction, see 28 U.S.C. § 1331, and the district court had supplemental jurisdiction over
the New York Labor Law claims at issue on appeal, see 28 U.S.C. § 1367(a).


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Following discovery, Plaintiffs moved for class certification pursuant to Rule 23(b)(3) of
the Federal Rules of Civil Procedure.

        In March 2013, the district court granted Plaintiffs‟ motion and certified the class.
See Jacob v. Duane Reade, Inc., 289 F.R.D. 408 (S.D.N.Y. 2013) (“Jacob I”). The
district court concluded that Plaintiffs had satisfied the Rule 23(a) prerequisites to class
certification, id. at 413-18, that common questions pertaining to whether ASMs were
misclassified as employees exempt from New York‟s overtime requirements predominated
over any individualized questions, id. at 418-22, and that a class action would be superior
to other methods for adjudicating this controversy, id. at 422-23.

       Following the Supreme Court‟s decision in Comcast Corp. v. Behrend, 133 S. Ct.
1426 (2013), Duane Reade moved for reconsideration. In August 2013, the district court
issued an opinion and order granting in part Duane Reade‟s motion, decertifying the class
with respect to damages only. See Jacob v. Duane Reade, Inc., 293 F.R.D. 578 (S.D.N.Y.
2013) (“Jacob II”). This appeal followed.

       We assume the parties‟ familiarity with the underlying facts, the procedural history
of the case, and the issues on appeal.

        We review a district court‟s determination on class certification for abuse of
discretion. Myers v. Hertz Corp., 624 F.3d 537, 547 (2d Cir. 2010). While we review the
district court‟s construction of legal standards de novo, we review the district court‟s
application of those standards for whether the district court‟s decision falls within the range
of permissible decisions. Id.

       1. Rule 23 Standards

       Duane Reade first argues that the district court failed to “„rigorously‟ examine” all
the evidence relevant to class certification as required by Wal-Mart Stores, Inc. v. Dukes,
131 S. Ct. 2541 (2011), and Comcast Corp. v. Behrend, 133 S. Ct. 1426 (2013), instead
applying a mere pleading standard. We disagree.

        In its description of the legal standards governing class certification under Rule 23,
the district court did state that “[a] plaintiff‟s pleadings are taken as true for the purposes of
examining a class certification motion.” See Jacob I, 289 F.R.D. at 413. That standard
was expressly rejected in Dukes. See 131 S. Ct. at 2551 (“Rule 23 does not set forth a
mere pleading standard.”). In determining whether to certify a class, the district court
must conduct a “rigorous analysis” that may “overlap with the merits of the plaintiff‟s
underlying claim.” Id. (quoting Gen. Tel. Co. of Sw. v. Falcon, 457 U.S. 147, 161 (1982))
(applying that standard to Rule 23(a)‟s prerequisites to class certification); see Comcast,

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133 S. Ct. at 1432 (quoting this language from Dukes and applying the same standard to
Rule 23(b)(3)‟s affirmative basis for class certification).

        Upon review of the district court‟s actual analysis, however, it is clear that the
district court applied the appropriate standard. The district court did not rely on the
pleadings alone to decide Plaintiffs‟ motion, and instead went beyond the pleadings to
consider the parties‟ evidentiary submissions and make factual findings where those
submissions conflicted. See, e.g., Jacob I, 289 F.R.D. at 415-17 (addressing commonality
and typicality); id. at 419-20 (addressing predominance).

       2. Rule 23(a) Commonality

       Duane Reade next argues that the district court‟s commonality analysis failed to
identify evidence sufficient to generate common answers as required by Dukes. We
disagree.

       A party seeking class certification must satisfy Rule 23(a)(2)‟s requirement that
there be “questions of law or fact common to the class.” Fed. R. Civ. P. 23(a)(2). Rule
23(a)(2)‟s commonality prerequisite requires a showing that the plaintiffs‟ claims “depend
upon a common contention . . . 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.” Dukes, 131 S. Ct. at
2551. In other words, the relevant inquiry is whether a classwide proceeding is capable of
“generat[ing] common answers apt to drive the resolution of the litigation.” Id. (emphasis
in original) (quoting Richard A. Nagareda, Class Certification in the Age of Aggregate
Proof, 84 N.Y.U. L. Rev. 97, 132 (2009)).

        As already noted, a district court must undertake a “rigorous analysis” in
determining whether Rule 23(a)(2)‟s commonality requirement is met. Id. Such
determinations “can be made only if the judge resolves factual disputes relevant to each
Rule 23 requirement.” Miles v. Merrill Lynch & Co. (In re Initial Pub. Offerings Sec.
Litig.), 471 F.3d 24, 41 (2d Cir. 2006).

        Here, as acknowledged by the district court, the common contention to be proved is
whether Duane Reade misclassified its employees as exempt from New York‟s overtime
requirements. In concluding that this contention was subject to classwide resolution, the
district court relied on evidence showing that (i) Duane Reade uniformly classifies all
ASMs as exempt without an individualized determination of each ASM‟s job
responsibilities, and (ii) Duane Reade ASMs carry out their duties pursuant to a uniform
policy, uniform training, and uniform procedures across all stores. See Jacob I, 289
F.R.D. at 415. In addition, the district court concluded that the deposition testimony of

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Duane Reade‟s former director of training and development established that Duane Reade
ASMs have “similar baseline responsibilities from store to store.” Id. Finally, in its
analysis of whether Plaintiffs had met the predominance requirement of Rule 23(b)(3), the
district court concluded that the extensive deposition testimony of ASMs established that
all ASMs share similar primary job responsibilities. Id. at 419-20. Although the district
court indicated that this testimony was not as relevant to the commonality determination, it
too is evidence that supports the district court‟s conclusion that the question of whether
Duane Reade ASMs were misclassified was subject to classwide resolution.

      We cannot conclude that the district court abused its discretion in concluding that a
classwide proceeding could generate a common answer to the question of whether Duane
Reade misclassified its ASMs.

       3. Rule 23(b) Predominance

       Duane Reade finally argues that the district court erred with respect to its Rule
23(b)(3) predominance analysis. Again, we disagree.

       A district court may certify a class under Rule 23(b)(3) if it finds that “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). As with Rule
23(a), the district court must conduct a “rigorous analysis” in determining whether Rule
23(b)‟s requirements have been met. Comcast, 133 S. Ct. at 1432. In making this
determination, the “district judge is to assess all of the relevant evidence admitted at the
class certification stage” and resolve material factual disputes. In re Initial Pub.
Offerings, 471 F.3d at 42.

        Duane Reade first argues that Comcast requires that the district court analyze
whether common questions predominate over individual questions in the case as a whole
before certifying the class with respect to any particular issue. This is a misreading of
Comcast. As we explain in our opinion issued today in Roach v. T.L. Cannon Corp., No.
13-3070, Comcast held simply that a model for measuring classwide damages relied upon
to certify a class under Rule 23(b)(3) must actually measure damages that result from the
class‟s asserted theory of injury. That holding of Comcast has little, if any, application in
this case. Here, in decertifying the class with respect to damages, the district court
concluded that although the individualized nature of the damages inquiry would defeat
Rule 23(b)(3) predominance in the case as a whole, Rule 23(b)(3) predominance was
satisfied with respect to issue of liability alone. See Jacob II, 293 F.R.D. at 592-93. That
conclusion was within the district court‟s discretion. See Augustin v. Jablonsky (In re
Nassau Cnty. Strip Search Cases), 461 F.3d 219, 227 (2d Cir. 2006) (“[W]e hold that a

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court may employ [Rule 23(c)(4)] to certify a class as to liability regardless of whether the
claim as a whole satisfies Rule 23(b)(3)‟s predominance requirement.”).

        In Myers v. Hertz Corp., 624 F.3d 537 (2d Cir. 2010), we addressed the availability
of class certification in a misclassification lawsuit that, like the present case, “involv[ed] a
number of subsidiary questions, each of which may or may not be able to be proven in
common.” Id. at 548. We explained that, in such cases, the plaintiffs‟ burden to
demonstrate predominance requires them to make two showings: “that „some‟ of the
[subsidiary] questions can be answered with respect to the members of the class as a whole
„through generalized proof‟ and that those common issues are „more substantial‟ than
individual ones.” Id. at 549 (quoting Moore v. PaineWebber, Inc., 306 F.3d 1247, 1252
(2d Cir. 2002)). Because we defer to the district court‟s findings, including the finding
that Plaintiffs have shown sufficient facts pursuant to Myers, we cannot conclude that the
district court abused its discretion in determining that common questions predominate with
respect to liability.

       We have considered Duane Reade‟s remaining arguments and find them to be
without merit. Accordingly, we AFFIRM the district court‟s order certifying the class
with respect to the issue of liability.

                                    FOR THE COURT:
                                    Catherine O‟Hagan Wolfe, Clerk of Court




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