By Bill Allen
On May 8, 2013, in Wang v. Hearst Corp., the U.S. District Court for the Southern District of New York denied certification under Rule 23 of a class of unpaid interns at Hearst Magazines.
First, the court found that Rule 23(a)(2)’s commonality requirement was not satisfied under the Supreme Court’s standard in Dukes v. Wal-Mart Stores, Inc. because the plaintiffs could not “show anything more than a uniform policy of unpaid internship.” The plaintiffs’ evidence of a corporate-wide policy of classifying the proposed class members as unpaid interns was insufficient to establish commonality because the duties of the interns varied greatly from each other and from magazine to magazine. The court acknowledged that even after Dukes, “courts of this district have routinely found commonality in analogous misclassification cases,” but distinguished this case because the plaintiffs were not able to show a company-wide policy regarding their duties in addition to a company-wide policy regarding their classification. The court rejected the interns’ argument that the court should look to "the nature of the work that interns performed" to find commonality, stating that the “glaring problem” is that there is no common proof from which the court could determine the "nature" of the interns' work.
Next, the court found the interns failed to satisfy the predominance requirement, which the court noted is even more demanding than the commonality requirement, because there was no uniform policy among the magazines regarding the interns’ training, duties, and supervision. Thus, individualized analysis would be required to determine four of the six DOL factors used to determine whether the interns were required to be paid. “Because the content of the internships, which is the core of the dispute, cannot be evaluated based on common proof,” the court concluded, “individual issues clearly overwhelm the common ones here.”
The court noted that its conclusion regarding lack of predominance did not even take into account any problems related to damages calculation, citing the U.S. Supreme Court’s holding in Comcast Corp. v. Behrend that common questions cannot predominate when individual damage calculations will inevitably overwhelm questions common to the class. The court rejected the plaintiffs’ argument that Comcast was limited to antitrust cases, finding that the Supreme Court had explicitly rejected that proposition when it stated: “This case  turns on the straightforward application of class-certification principles.” In addition, referring to the Supreme Court’s decision in RBS Citizens, N.A. v. Ross, the court stated that “one must pause at least for a moment” when the Supreme Court has vacated and remanded a Seventh Circuit decision in an employee misclassification case “in light of Comcast.”
While the district court’s class certification decision did not ultimately turn on individualized damages issues, the court’s commentary on the applicability of Comcast in wage and hour class actions is another favorable development for employers, particularly in the Southern District of New York, which, as the court itself noted, has been fertile ground for certification of wage and hour class actions. As discussed in a prior post, two other New York federal courts also recently denied class certification or granted decertification based on Comcast – Roach v. T.L. Cannon Corp. and Tracey v. NVR, Inc.