HASELTON, P.J.
In this interlocutory appeal pursuant to ORS 19.225,
The class action at issue in this case is one of a mare's nest of related class actions, all of which allege claims against defendant for penalties and attorney fees arising out of allegedly untimely paid termination wages, see ORS 652.140; ORS 652.150.
In January 2003—five years before this action was filed in January 2008—plaintiffs Belknap and Brulc brought a proposed class action against defendant in Multnomah County Circuit Court to recover penalties for untimely paid termination wages and attorney fees. Belknap, 235 Or.App. at 661, 234 P.3d 1041. In July 2004, the trial court certified the class. Id. at 662, 234 P.3d 1041. As certified, the class (hereinafter "the Belknap class") included defendant's former Oregon employees, whose employment had terminated between January 2, 2000 and January 2, 2003 (the three-year period preceding the filing of the complaint) and who had given 48 or more hours' notice of intent to terminate their employment, but were not paid timely termination wages pursuant to ORS 652.140. See 235 Or.App. at 661, 234 P.3d 1041.
As we explained in Belknap:
235 Or.App. at 662-63, 234 P.3d 1041 (bracketed alteration in Belknap).
The named plaintiffs in the class action at issue in this case—Thomas, Gillaspie, and
After class certification in Belknap was granted in July 2004, "pretrial maneuvering ensued." 235 Or.App. at 663, 234 P.3d 1041. The plaintiffs in Belknap received class-wide discovery from defendant, and, based on that discovery, defendant moved, initially unsuccessfully, to decertify the class. Id. More maneuvering ensued, and "[t]he carbon footprint of the trial court file grew deep." Id. at 664, 234 P.3d 1041.
In July 2007, after four and one-half years of litigation, defendant renewed its motion to decertify the Belknap class. Id. The trial court agreed with defendant, and, in September 2007—roughly four months before this action was filed in Jackson County—the Multnomah County Circuit Court granted the motion to decertify the Belknap class. Id. We recounted the trial court's reasoning at length in our opinion in Belknap affirming that ruling:
235 Or.App. at 664-65, 234 P.3d 1041 (emphasis added).
Following the trial court's order to decertify the Belknap class, the named plaintiffs, Belknap and Brulc, proceeded to trial on their own claims. Id. at 665, 234 P.3d 1041. After judgment was entered, they appealed, assigning error to, among other things, the trial court's ruling to decertify the class. Id. In June 2010, we affirmed that decision. Id. at 667, 234 P.3d 1041.
As Belknap was backing and filling between 2003 and 2008, plaintiffs' counsel brought a number of other proposed class action lawsuits against defendant, all involving claims and putative classes similar, and in some instances nearly identical, to those involved in Belknap. Those actions included, at least, the following:
Finally, in mid-January 2008, several months after the Belknap court decertified the Belknap class, plaintiffs' counsel filed
As noted, on January 18, 2008, plaintiffs Thomas, Gillaspie, and Hale—all former members of the Belknap class—instituted the present class action in Jackson County Circuit Court, raising claims for ORS 652.150 penalty wages and attorney fees. Plaintiffs' initial complaint proposed to represent a class that consisted of
Thus, the proposed class consisted of two categories of plaintiffs. The first consisted of former members of the Belknap class who had submitted claims in the Belknap class action. The second consisted of defendant's former employees who had terminated their employment between January 18, 2005 and January 18, 2008, but otherwise suffered the same alleged injury as those in the Belknap class action. In their first amended complaint, plaintiffs narrowed their proposed class definition to include only those former employees who had "worked or lived" in 24 named Oregon counties, viz.: Josephine, Jackson, Klamath, Lake, Harney, Malheur, Deschutes, Crook, Grant, Baker, Jefferson, Wheeler, Wallowa, Union, Umatilla, Morrow, Gilliam, Sherman, Wasco, Hood River, Multnomah, Clackamas, Marion, and Washington counties.
In April 2008, defendant moved to dismiss or, in the alternative, strike plaintiffs' class-related claims. In advancing that motion, defendant contended as follows: (1) Issue preclusion—specifically, as predicated on the Belknap court's order decertifying the Belknap class—bound the subclass of former Belknap plaintiffs and precluded litigation of the class certification issue as to those plaintiffs. (2) Alternatively, pursuant to ORCP 21 A(3), the class claims should be dismissed because the same claims, on behalf of the same or nearly identical proposed classes, were pending in other jurisdictions. (3) Also,
In response, plaintiffs argued that issue preclusion did not apply because the certification issue was not identical to that litigated in the Belknap case. Specifically, plaintiffs contended that issue preclusion was inapposite because the proposed class in the present action was not congruent with the Belknap class in that (1) the proposed class here included only those members of the Belknap class who "worked or lived" in 24 of Oregon's 36 counties, as opposed to all 36 counties in Belknap; and (2) while the Belknap class encompassed only former employees terminated between January 2, 2000 and January 2, 2003, the proposed class here also included employees terminated between 2005 and 2008.
Plaintiffs further contended that the "other action pending" limitation of ORCP 21 A(3) was inapplicable because none of the other cases pending against defendant involved "the same parties," as required by ORCP 21 A(3), in that each of those cases was brought by different named plaintiffs.
Finally, with respect to whether the three named plaintiffs (none of whose employment ended after 2003) could act as class representatives for persons with claims based on termination of their employment between 2005 and 2008, plaintiffs asserted that the latter were not members of some separate and distinct class but were, instead, (like the named plaintiffs) members of a single class of persons, all of whom had suffered the same injury—viz., not having their termination wages paid timely by defendant. Thus, plaintiffs asserted, notwithstanding that each of the named plaintiff's employment with defendant ended long before 2005, they could adequately represent the interests of members of that "single class" whose employment ended thereafter.
The trial court, after oral argument, denied defendant's motion to dismiss or strike the class claims. In its operative order, the court framed the following issues for our consideration by way of an interlocutory appeal pursuant to ORS 19.225:
We subsequently granted defendant's application for an interlocutory appeal.
On appeal, the parties generally reprise their arguments to the trial court. As we will explain, we conclude that issue preclusion arising from the Belknap trial court's decertification of the Belknap class is conclusive as to the impropriety of the certification of the class that plaintiffs propose here. As amplified below, that is so because (1) the inclusion of former Belknap class members is intrinsic to the single class that plaintiffs posit here and (2) the Belknap decertification order conclusively determines that those persons'/putative class members' claims must be individually litigated and are not properly
Before turning to their particular application here, we briefly summarize the pertinent principles of issue preclusion.
Common-law issue preclusion applies when five conjunctive requirements are satisfied: (1) the issues in the two proceedings must be "identical"; (2) the issue must have been "actually litigated" in the earlier proceeding and "essential to a final decision on the merits in the prior proceeding"; (3) the party sought to be precluded must have had "a full and fair opportunity to be heard on that issue"; (4) the party sought to be precluded must have been a party or in privity with a party to the prior proceeding; and (5) the prior proceeding must have been "the type of proceeding to which this court will give preclusive effect." Nelson v. Emerald People's Utility Dist., 318 Or. 99, 104, 862 P.2d 1293 (1993). The party asserting issue preclusion bears the burden of proof on the first, second, and fourth requirements, whereupon the burden shifts to the party against whom preclusion is asserted to show that the third and fifth requirements are not met. Barackman v. Anderson, 214 Or.App. 660, 667, 167 P.3d 994 (2007), rev. den., 344 Or. 401, 182 P.3d 200 (2008). In this case, the parties' dispute centers on the first four elements.
As noted, the issue before the Belknap court was whether it should allow decertification of a statewide class that included defendant's former employees who had terminated their employment between January 2, 2000 and January 2, 2003, and who had given 48 or more hours' notice of intent to terminate their employment, but were not paid timely termination wages pursuant to ORS 652.140. In reaching its decision to decertify the Belknap class, the trial court considered the issue of whether class treatment was a superior method of adjudicating plaintiffs' case under ORCP 32 B. Belknap, 235 Or.App. at 664, 234 P.3d 1041.
Here, plaintiffs defined the proposed class in their first amended complaint to include defendant's former employees who lived or worked in 24 Oregon counties and who had given 48 or more hours' notice of intent to terminate their employment, but were not paid timely termination wages pursuant to ORS 652.140, and who either (1) had submitted claims in Belknap or (2) had terminated their employment between January 18, 2005 and January 18, 2008. Accordingly, as noted, the proposed class at issue in this case differs from the Belknap class in two respects. First, unlike the Belknap class, which was a statewide class action, the proposed class in this case is limited to those employees who have "worked or lived" in 24 Oregon counties. Second, unlike the Belknap class, which included employees who had terminated their employment between January 2000 and January 2003, the proposed class in this case also includes defendant's former employees who had terminated their employment between January 18, 2005 and January 18, 2008.
Defendant contends that, notwithstanding those differences, the class certification issue in this case is "identical" for issue preclusion purposes to the class de-certification issue that was actually litigated and was essential
We begin with the "identity" of issues. The essential issue determined by the Belknap class decertification order was the propriety of treatment of claims of hundreds of defendant's former employees arising from alleged untimely payment of wages upon termination of their employment between 2000 and 2003. In resolving that issue, the Belknap trial court, as noted, emphasized the diversity of individualized factual issues and the overwhelming predominance of those matters relative to matters common to the proposed class as a whole. 244 Or.App. at 464 n. 7, 260 P.3d at 716 n. 7.
Although the class proposed here is not congruent with that decertified in Belknap, the dispositive issue with respect to certification of the single class proposed here is, ultimately and essentially, the same as that which was dispositive in Belknap. To be sure, as plaintiffs highlight, the proposed class here is, in one respect, less inclusive than the Belknap class in that the former includes Belknap class members from 24, rather than all 36, Oregon counties. But plaintiffs' emphasis of that distinction misses the mark the proposed class here would include Belknap class members not only from 24 counties, but also Oregon's three most populous counties (Multnomah, Washington, and Clackamas), and—excepting Lane County—six of the seven most populous counties (Marion, Jackson, and Deschutes).
Nor does the fact that the class proposed here is more inclusive than the Belknap class in one respect—viz., as also including former employees terminated between 2005 and 2008—detract from the identity of the core, dispositive issue. That is so because plaintiffs, without qualification, seek certification of a single, undifferentiated class consisting of both the former Belknap class members in 24 counties and those employees whose employment terminated between 2005 and 2008. The former are an integral component of the proposed class; plaintiffs do not suggest that, failing their inclusion, a class of only the latter should be certified. Accordingly, if the Belknap decertification order is given preclusive effect as to the former, requiring that their claims be individually litigated, the single class that plaintiffs propose must fail.
For the same reasons, the dispositive issue here was "actually litigated" in Belknap. An issue is "actually litigated" when "the factual and legal issues that the plaintiff raises in the second case were actually adjudicated and essential to the determination of the first case." Ram Technical Services, Inc. v. Koresko, 240 Or.App. 620, 632, 247 P.3d 1251 (2011) (emphasis in original). See also Restatement (Second) of Judgments § 27 comment d (1982) ("When an issue is properly raised, by the pleadings or otherwise, and is submitted for determination, and is determined, the issue is actually litigated * * *."). In Belknap, the parties properly submitted, and the trial court determined, the class certification issue three times: first, when the named plaintiffs in Belknap applied for, and received, class certification in 2004, which defendant opposed, 235 Or.App. at 662-63, 234 P.3d 1041; second, when defendant moved for decertification, and the motion was denied, id. at 663,
With respect to the third requisite of issue preclusion, plaintiffs have pointed to no evidence that they were denied the opportunity to fully and fairly litigate the class certification issue in Belknap. See Barackman, 214 Or.App. at 667, 167 P.3d 994 (describing burden of proof with respect to the third Nelson element). Rather, as noted, the parties fully briefed and argued the issue before certification was initially granted and did so again, later, when the trial court reconsidered the evidence and the parties' arguments in light of defendant's renewed motion for decertification. There is no indication that the named plaintiffs in Belknap were "denied the opportunity to adduce the evidence or make the arguments that [they] needed to prevail" on the propriety of class certification in that case. Id. at 668 n. 3, 167 P.3d 994. We note moreover that the named plaintiffs in Belknap had every incentive to vigorously litigate the issue of class certification. Cf. Stanich v. Precision Body and Paint, Inc., 151 Or.App. 446, 455, 950 P.2d 328 (1997), abrogated on other grounds by Barackman, 214 Or.App. at 667, 167 P.3d 994 (party's incentive to litigate issue encompassed within full and fair opportunity to litigate analysis).
The applicability of issue preclusion here thus reduces to the fourth Nelson element—and, specifically, whether the named plaintiffs here were in privity with the named plaintiffs in Belknap at the time the Belknap court rendered its decertification decision. See Nelson, 318 Or. at 104, 862 P.2d 1293. The Oregon Supreme Court has explained that privity attaches to "persons who are not parties to an action but who are connected with it in their interests are affected by the judgment with reference to interests involved in the action, as if they were parties." Wolff v. Du Puis, 233 Or. 317, 322, 378 P.2d 707 (1963), overruled in part by Bahler v. Fletcher, 257 Or. 1, 474 P.2d 329 (1970). Privity likewise encompasses "those who control an action although not parties to it; those whose interests are represented by a party to the action; and successors in interest to those having derivative claims." Id. (citing Restatement of Judgments § 83 (1942)) (emphasis added). However, privity will not be found for purposes of issue preclusion "unless the result can be defended on principles of fundamental fairness in the due-process sense." Id. See also Bloomfield v. Weakland, 339 Or. 504, 511, 123 P.3d 275 (2005). Consequently, a third party will be precluded from litigating an issue in a subsequent proceeding "only when it is realistic to say that the third party was fully protected in the first trial." Wolff, 233 Or. at 322, 378 P.2d 707.
The named plaintiffs in this case (Thomas, Gillaspie, and Hale), as former members of the Belknap class, were in privity with named representatives in the Belknap class action. The premise underlying a class action is that the representative, as a member of the class, has an interest in the litigation that is shared by the unnamed class members. See Alba Conte and Herbert B. Newberg, 1 Newberg on Class Actions § 1:2, 14 (4th ed 2002) ("The fundamental nature of a class suit is its representative status, i.e., it consists of a class representative and those absent members, who share a common interest but whose joinder is impracticable, who are represented.").
In this instance, Thomas, Gillaspie, and Hale—by virtue of the Belknap court's decision to certify—were members of the Belknap class and, thus, represented by the class representatives there, beginning with the Belknap court's certification order and continuing up to the moment of decertification. That is, they were members of the Belknap class throughout the time that defendant's initial motion to decertify, and its ultimately successful renewal of that motion, were being litigated. Plaintiffs do not claim that the Belknap class representatives or their attorneys did not adequately represent their interests in the Belknap action; indeed, the latter argument would be difficult to maintain
We thus conclude that the requisites of issue preclusion are established here as to the impropriety of class treatment of claims by members of the former Belknap class included in plaintiffs' proposed class. That, in turn, is dispositive of the propriety of class certification of the single, "all-or-nothing" class that plaintiffs propose. Accordingly, the trial court erred in denying defendant's motion to dismiss plaintiffs' class-related allegations.
Finally, notwithstanding our conclusion that the class allegations must be dismissed, a remand is required. That is so because defendant does not contest the ability of the named plaintiffs to seek individual relief. Accordingly, here, as in Belknap, the denial of class certification is not preclusive of the named plaintiffs' ability to pursue their claims individually.
Reversed and remanded.
ORS 652.150, as relevant here, provides:
(Footnote omitted.)
