KAREN R. BAKER, Associate Justice.
Appellant, Arkansas Department of Veterans Affairs d/b/a Arkansas Veterans Home and Fayetteville Veterans Home ("ADVA") appeals the Pulaski County Circuit Court's order granting class certification to appellees in their case alleging violations of the Arkansas Minimum Wage Act ("AMWA"), Arkansas Code Annotated sections 11-4-201 et seq. On appeal, ADVA argues that the circuit court abused its discretion in certifying the class.
Appellees are hourly, nonnursing employees of ADVA ("employees"). The employees sought class certification alleging that ADVA violated the AMWA due to ADVA's failure to pay the employees for overtime hours worked. Specifically, the employees allege that ADVA automatically deducted thirty minutes per day from their hours worked to account for meal breaks, even though they were regularly required to work during their meal breaks. The employees also sought certification to resolve the issues of unpaid time worked during pre- and post-shift hours. The employees sought to represent approximately 150 individuals who held one of twenty different nonnursing positions.
On November 25, 2014, the circuit court entered its order granting class certification regarding meal breaks. The circuit court determined that the common question as to the class members was "Whether Defendant's systematic and automated practice of deducting meal breaks is a violation of the AMWA[.]" The circuit court found that class certification was inappropriate as to pre- and post-shift-work claims. The circuit court stated that "[i]n
We recognize our precedent in the companion case of Arkansas Department of Veterans Affairs v. Okeke, 2015 Ark. 275, 466 S.W.3d 399. This court held that the circuit court acted within its discretion in finding that the commonality, predominance, and superiority requirements had been met. Id. Accordingly, we held that the circuit court did not abuse its discretion in certifying the class and affirmed the circuit court's order. Id. However, as will be explained below, we note a marked distinction between the present case and Okeke.
An interlocutory appeal may be taken from an order certifying a case as a class action in accordance with Arkansas Rule of Civil Procedure 23. Circuit courts are given broad discretion in matters regarding class certification; we will not reverse a circuit court's decision to grant or deny class certification absent an abuse of discretion. ChartOne, Inc. v. Raglon, 373 Ark. 275, 283 S.W.3d 576 (2008). When reviewing a circuit court's class-certification order, this court reviews the evidence contained in the record to determine whether it supports the circuit court's decision. Teris, LLC v. Golliher, 371 Ark. 369, 266 S.W.3d 730 (2007). Our focus is "whether the requirements of Rule 23 are met," and "it is totally immaterial whether the petition will succeed on the merits or even if it states a cause of action." Philip Morris Cos. v. Miner, 2015 Ark. 73, at 3, 462 S.W.3d 313, 316 (quoting Am. Abstract & Title Co. v. Rice, 358 Ark. 1, 9, 186 S.W.3d 705, 710 (2004)).
The AMWA provides that "no employer shall employ any of his or her employees for a work week longer than forty (40) hours unless the employee receives compensation for his or her employment in excess of the hours above specified at a rate not less than one and one-half (1 1/2) times the regular rate of pay at which he or she is employed." Ark.Code Ann. § 11-4-211(a) (Repl. 2012). "In lieu of overtime compensation, the State of Arkansas and any political subdivision of the state may award compensatory time off at a rate of not less than one and one-half (1 1/2) hours for each hour of employment for which overtime compensation is required." Ark.Code Ann. § 11-4-211(f).
On appeal, ADVA argues that the circuit court abused its discretion in finding that the employees have met their burden of proving commonality, predominance, and superiority. ADVA contends that automatically deducting thirty minutes a day for meal breaks is not per se unlawful. Because this policy is not per se unlawful, it must be coupled with two conditions: (1) the employee was required to work through his or her meal break without compensation; and (2) working through the meal break caused the employee to work more than forty hours in a work week. ADVA further argues that collective treatment of the employees' claims is improper because the claims inherently entail highly individualized inquiries.
Rule 23 of the Arkansas Rules of Civil Procedure governs class actions and class certification. The rule provides, in pertinent part:
Therefore, there are six requirements for class-action certification, as stated in Rule 23: (1) numerosity, (2) commonality, (3) typicality, (4) adequacy, (5) predominance, and (6) superiority. Gen. Motors Corp. v. Bryant, 374 Ark. 38, 285 S.W.3d 634 (2008). In addition to the requirements of Rule 23, the court must be able to objectively identify members of the class. Farmers Ins. Co. v. Snowden, 366 Ark. 138, 233 S.W.3d 664 (2006).
We now turn to the requirements of class certification. To certify a class, the circuit court must determine that "there are questions of law or fact common to the class." Ark. R. Civ. P. 23(a)(2). The commonality requirement is always case specific and
Union Pac. R.R. v. Vickers, 2009 Ark. 259 at 8-9, 308 S.W.3d 573, 578 (quoting Herbert B. Newberg, Newberg on Class Actions § 3.10 (3d ed.1993)). The circuit court "must determine what elements in a cause of action are common questions for the purpose of certifying a class," and commonality is satisfied where "the defendant's acts, independent of any action by the class members, establish a common question relating to the entire class." Id. at 9, 308 S.W.3d at 578 (quoting Williamson v. Sanofi Winthrop Pharms., Inc., 347 Ark. 89, 97, 60 S.W.3d 428, 433 (2001)).
Once commonality is determined when deciding whether to certify a class, the next question is whether common questions of law and fact predominate over any questions affecting only individual members. Rosenow v. Alltel Corp., 2010 Ark. 26, 358 S.W.3d 879. With regard to the predominance requirement of Rule 23(b), we must decide if the issues common to all plaintiffs predominate over the individual issues. Baker v. Wyeth-Ayerst Labs., 338 Ark. 242, 992 S.W.2d 797 (1999). The predominance requirement, however, is more stringent than commonality. Vickers, 2009 Ark. 259 at 9, 308 S.W.3d at 578 (citing BPS, Inc. v. Richardson, 341 Ark. 834, 20 S.W.3d 403 (2000)). In Vickers, we explained the standard for testing predominance:
Id. (internal citations omitted).
If a case involves preliminary issues common to all class members, predominance is satisfied even if the court must subsequently decertify a class due to individualized damages. Snowden, 366 Ark. 138, 148, 233 S.W.3d 664, 670. However, if the preliminary issues are sufficiently individualized, then predominance is not satisfied, and class certification is improper. Id., 233 S.W.3d at 671.
In reviewing ADVA's argument regarding predominance, we agree with its position. Even assuming that there are questions common to all class members, these common issues do not predominate over individual issues. In Arthur v. Zearley, 320 Ark. 273, 895 S.W.2d 928 (1995) we held that the circuit court abused its discretion in certifying the class and we reversed the circuit court's class-action certification. In Baker, we explained our ruling in Arthur as follows:
338 Ark. at 248, 992 S.W.2d at 800-01.
Here, the employees seek to represent a diverse group of employees, approximately 150 individuals who have held one of over twenty nonnursing positions. The class certified by the circuit court includes the following positions: Administrative Specialist II, Administrative Specialist III, Cook, Food Preparation Manager, Food Preparation Technician, Food Preparation Specialist, Food Preparation Supervisor,
In Okeke, all the class members held nursing positions, which included Registered Nurses (RNs), Licensed Practical Nurses (LPNs), and Certified Nursing Assistants (CNAs). Unlike Okeke, where the nursing employees held the same or very similar positions, here, the class members do not share the same or similar job duties that would require them to work through their meal breaks. The issues of whether an employee worked during unpaid meal breaks and whether this resulted in the employee working over forty hours in a week will vary greatly with each employee. Like Arthur and Baker, in the present case, a bifurcation approach cannot be utilized because the issues of ADVA's liability and damages owed to each employee will have to be established on a case-by-case basis. Here, the individual issues clearly predominate over the common issues. As ADVA asserts, the mere existence of a policy of making automatic deductions for scheduled meal breaks does not, in and of itself, violate AMWA. A determination of ADVA's liability under AMWA would require a highly individualized inquiry as to each employee's hours worked during a given week because, if the employee did not work through lunch, and if the employee failed to work more than forty hours in a given work week, there could be no liability on the part of ADVA. Stated differently, there is "no one set of operative facts" to establish ADVA's liability to any given class member. Vickers, 2009 Ark. 259 at 19, 308 S.W.3d at 582-583 (citing Baker, 338 Ark. at 247, 992 S.W.2d at 800).
Although, a circuit court has broad discretion in certifying a class action, we have not held that a circuit court's discretion is "so broad that it cannot be the subject of a proper review." Vickers, 2009 Ark. 259 at 20, 308 S.W.3d at 583 (citing Arthur, 320 Ark. at 289, 895 S.W.2d at 936-37). Based on the highly individualized nature of the employees' claims, the circuit court abused its discretion in certifying the class action, and we reverse and remand with instructions to decertify the class. Because we reverse, we do not reach the remaining issues on appeal.
Reversed and remanded with instructions to decertify the class.
Wood, J., concurs.
Danielson, Goodson, and Wynne, JJ., dissent.
Rhonda K. Wood, Justice, concurring.
I join the majority opinion. Although the majority correctly distinguishes this case from Arkansas Department of Veterans Affairs v. Okeke, 2015 Ark. 275, 466 S.W.3d 399, I write separately to point out that I see no reason this court needs to distinguish it. For the reasons I set out in my dissenting opinion in Okeke and the reasons stated by the majority herein, neither of these cases was appropriate for class certification. See id. at 12-13, 466 S.W.3d at 406 (Wood, J. dissenting).
Robin F. Wynne, Justice, dissenting.
Because there is no material difference between this appeal and its companion, Arkansas Department of Veterans Affairs v. Okeke, 2015 Ark. 275, 466 S.W.3d 399, issued June 18, 2015, and because the ADVA has not preserved the only ground upon which the majority distinguishes Okeke and reverses the circuit court's decision,
Earlier this year, this court upheld the certification of a class action against the ADVA. The allegations in that case, as in the instant case, were that the ADVA had unlawfully withheld overtime pay from its employees as a result of its policy to automatically deduct time for a meal break from its employees' time. The plaintiffs in that case, as here, alleged that the ADVA understaffed its facilities, requiring its employees to frequently work through their lunch breaks to complete their tasks, and thus, as a result of the automatic-deduction policy, the employees were working overtime without receiving compensation. We noted, "While it may be true that automatic deductions for meal breaks are not per se unlawful, it does not necessarily follow that they are per se lawful." Arkansas Dep't of Veterans Affairs v. Okeke, 2015 Ark. 275, at 8, 466 S.W.3d 399, 404. Accordingly, we held that the issue of the reasonableness of ADVA's automatic deduction policy and any corresponding policy for reclaiming time was an overarching issue common to all class members and that it predominated over other issues.
In its opinion today, the majority states that "the mere existence of a policy of making automatic deductions for scheduled meal breaks does not, in and of itself, violate AMWA." This statement — a new holding regarding the law in Arkansas — is in contravention of this court's refusal to address in Okeke whether automatic deductions for meal breaks are a violation of the law. Reaching this point of substantive law is both unnecessary and in violation of the long-established rule that we do not reach the merits of a claim in deciding an appeal regarding class certification. This court has stated that neither the circuit court nor this court shall delve into the merits of the underlying claims when deciding whether the Rule 23 requirements have been met. Ark. Media, LLC v. Bobbitt, 2010 Ark. 76, at 6, 360 S.W.3d 129, 134. A circuit court may not consider whether the plaintiffs will ultimately prevail or even whether they have a cause of action. Id. We, thus, view the propriety of a class action as a procedural question. Id. Therefore, the majority errs in reaching (indeed, simply accepting without any analysis) ADVA's argument on this point.
The majority attempts to distinguish Okeke on the ground that the nursing staff in that case had substantially similar job duties while the nonnursing hourly employees in the present case held different job titles with different duties. The majority's holding on this point suffers numerous infirmities. First, this issue was not developed before the circuit court and accordingly it is not preserved for our review. The only reference to this argument before the circuit court is one phrase in one sentence in the introduction of the ADVA's brief in opposition to class certification in which the ADVA argues that the plaintiffs cannot satisfy the applicable legal standard "given the varied job titles, job responsibilities and physical working locations of the individuals whom Plaintiffs seek to represent." The remainder of the brief wholly fails to develop this argument, providing no argument or citation to legal authority on why the varied job titles and responsibilities is relevant or conclusive as to any of the criteria for class certification,
Second, although the ADVA raises this challenge on appeal as one to predominance, a cursory review of their brief illustrates that their actual challenge is to the typicality of the class members, an issue which was also not raised before the circuit court. Under our case law, typicality requires that a sufficient relationship exists between the injury to the named plaintiff and the conduct affecting the class so that the plaintiff's claim arises from the same event or practice or course of conduct that gives rise to the claims of other class members and may be redressed by pursuing the same legal theory. Campbell v. Asbury Auto., Inc., 2011 Ark. 157, 381 S.W.3d 21. We have held that the essence of the typicality requirement is the conduct of the defendants and not the varying fact patterns and degree of injury or damage to individual class members. Diamante, LLC v. Dye, 2013 Ark. 501, 15, 430 S.W.3d 710, 721. In this case, it is clear that ADVA's challenge on appeal is actually one to the typicality of the class representatives. For example, the ADVA argues in its brief that Ms. Mallet's affidavit is insufficient because it does not explain "how her job duties as a Human Resource Specialist make her representative of other class members with different job titles and job duties. The ADVA goes on to argue, "While her experiences may be representative of [one other Human Resource Specialist], there is no evidence that she is representative of the house-keepers,
Finally, the majority's determination that the instant case differs from Okeke because the nursing staff in that case had substantially similar job duties while the nonnursing hourly employees in the present case have different job titles with different duties is a distinction without a difference. All hourly employees — nursing staff, food-preparation staff, security guards, etc. — were subjected to the same automatic-meal-deduction policy. If certification of the class in Okeke was not an abuse of the trial court's discretion, certification of the class in this case was also not an abuse of discretion. The crux of the appellees' complaints in both cases is that ADVA understaffed its facilities, and when employees were required to work through their automatically deducted meal breaks, ADVA failed to compensate them for all overtime hours that they worked. Thus, just as in Okeke, the predominant issue common to all class members in this case is whether the automatic deduction policy of the ADVA is reasonable and whether ADVA has a reasonable reclamation policy for claiming overtime accrued as a result of missed meal breaks. As the majority does not overturn our decision in Okeke, the doctrine of stare decisis mandates that we hold that the circuit court did not abuse its discretion in certifying the class under any of the challenged Rule 23 factors — commonality, predominance, and superiority.
For the above reasons, I respectfully dissent.
Danielson and Goodson, JJ., join.
Importantly, the ADVA advanced similar or identical issues in Okeke as defeating class certification. We disagreed, holding that these issues went to damages rather than liability.