WHIPPLE, J.
In this appeal, defendants challenge the trial court's judgment certifying this matter as a class action. For the following reasons, we affirm.
On April 20, 2010, the Deepwater Horizon offshore drilling rig exploded, resulting in a massive oil spill in the Gulf of Mexico. Thereafter, Worley Catastrophe Services, L.L.C., and Worley Catastrophe Response, L.L.C., provided claims adjusting services on behalf of ESIS, Inc., BP Exploration & Production, Inc. ("BP"), and the Gulf Coast Claims Facility ("the GCCF") for third-party claims arising from the event. Worley, in turn, contracted with approximately 1,200 adjusters to perform adjusting services on its behalf for those claims. In connection with their performance of these adjusting services for claims from the oil spill, these 1,200 adjusters signed employment agreements with Worley, all in substantially the same form and substance.
On February 8, 2011, plaintiffs, Michael Sullivan, Charles Baldwin, Johnny Knighten, Jimmy Phillips, and Ron Dickerson, claims adjusters hired by Worley to perform adjusting services, filed a petition styled "Class Action Petition," asserting claims on their own behalf and as representatives of other similarly situated individuals and naming as defendants The Worley Companies, Worley Catastrophe Services, L.L.C., Worley Catastrophe Response, L.L.C., (hereinafter referred to collectively as "Worley"), and Claims Liquidating, L.L.C., formerly known as Worley Claims Services of Louisiana, Inc.
On June 6, 2011, plaintiffs filed a "Motion to Certify Action as Class Action" pursuant to LSA-C.C.P. art. 592, contending that all of the elements necessary for class certification were present. Although plaintiffs did not set forth in their motion how the class should be defined, in a supplemental memorandum in support of their motion to certify the action as a class action, plaintiffs averred that the proposed class would be easily definable by objective criteria as "[a]ny individual who was employed by Worley on or after April 20, 2010 to perform claims adjusting and/or management services in connection with the Oil Spill pursuant to a signed employment contract and who was paid not more than $550.00 per day for his/her services."
Worley opposed the motion, contending that plaintiffs had not met the burden of proving that class certification was appropriate. Worley also noted that in an identical breach-of-contract claim pending in the United States District Court for the Eastern District of Louisiana, the federal magistrate had denied the plaintiffs' motion to certify the claim as a class action. Thus, Worley contended that the court below "should deny certification of the same class for the same reasons certification was denied by the federal court under the similar Federal Rule of Civil Procedure 23." Worley further asserted that class certification was inappropriate because there was "no evidence of any adjusters, other than the five [p]laintiffs, who have ratified the forum selection clause" in the employment agreements, which it averred was a "prerequisite to participating in this lawsuit." Finally, Worley argued that "the breach of contract claim will require an adjuster-by-adjuster, claim-by-claim, file-by-file, invoice-by-invoice, day-by-day, receipt-by-receipt analysis that precludes class treatment."
A hearing on the motion was conducted on September 9, 2011, and by judgment dated September 21, 2011, the trial court granted the motion to certify the action as a class action. Worley then filed the instant devolutive appeal, contending that the trial court committed legal error in:
(1) finding that the predominance and superiority requirements were met when highly individualized factual questions exist concerning liability, affirmative defenses, damages, claims, and forum-selection and choice-of-law clauses, all of which will require an adjuster-by-adjuster analysis;
(2) certifying a class that requires claims and defenses dependent for their resolution upon proof individual to a member of the class;
(3) certifying a class when only five class members ratified the necessary forum-selection and choice-of-law clauses in the employment agreement at issue;
(4) finding the commonality requirement satisfied when the law is clear that a single common issue is insufficient to warrant class treatment, particularly when individualized issues predominate; and
(5) finding adequate representation when class representatives and members will be seeking a percentage of the same files on which they jointly worked, thereby creating a conflict of interest.
A class action is a non-traditional litigation procedure that permits a representative with typical claims to sue or defend on behalf of, and stand in judgment for, a class of similarly situated persons when the question is one of common interest to persons so numerous as to make it impracticable to bring them all before the court.
The class action is an exception to the rule that litigation be conducted by and on behalf of the individual named parties only. Thus, the determination of whether a class action meets the requirements imposed by law requires a "rigorous analysis."
The requirements for class certification are set forth in LSA-C.C.P. art. 591. Subsection (A) of article 591 sets forth five threshold prerequisites that must be met, as follows:
These five threshold prerequisites are often referred to as numerosity, commonality, typicality, the adequacy of representation, and an objectively definable class.
In addition to these five prerequisites, article 591(B) lists additional criteria, which apply and must be satisfied depending on the type of class action sought by the parties. In the instant case, the additional requirement that must be satisfied is found in LSA-C.C.P. art. 591(B)(3),
In reviewing a trial court's judgment regarding class certification, the trial court's factual findings are subject to the manifest error standard, while the court's ultimate decision regarding whether to certify the class is reviewed under the abuse of discretion standard.
On appeal, Worley challenges the trial court's finding that the threshold requirements of numerosity, commonality, and adequacy of representation are met and its conclusion that the requirements of LSA-C.C.P. art. 591(B)(3) and (C) are satisfied. We address each of these challenges below.
Generally, a class action is appropriate whenever the interested parties appear to be so numerous that separate suits would unduly burden the courts, and a class action would be more useful and judicially expedient than the other available procedures. LSA-C.C.P. art. 591(A)(1);
The record reflects that in the instant case, the parties stipulated that approximately 1,200 adjusters signed employment agreements with Worley in substantially the same form and substance (hereinafter collectively referred to as "the Agreement"), and that the Agreement is the basis for this breach-of-contract and wage-payment action. As noted by the trial court, even if omitting consideration of the "50 or 70" adjusters who had participated in the federal court action, there were still "over 1100 possible plaintiffs."
Nonetheless, Worley contends in its third assignment of error that because of a forum-selection clause it included in the Agreement signed by the adjusters,
Just as there is the ever-present potential that some putative class members may elect to "opt out" of a class action, there is also the possibility that some putative class members may choose not to ratify the forum-selection clause at issue. However, we cannot conclude that the possibility of such an "opt out" or failure to ratify negates the stipulated evidence establishing numerosity herein.
Instead, the failure of any potential class members to ratify the forum-selection clause appears to have no effect on numerosity in that the failure or refusal of any putative class member to ratify the forum-selection clause in his or her employment contract would simply mean that the clause in that particular contract was null and void.
In its fourth assignment of error, Worley contends that the trial court erred in finding that the commonality requirement was satisfied where it found there was only one issue or question in common,
As set forth in the Class Action Petition, plaintiffs base their claims for additional compensation on the Agreement, which the parties have stipulated was signed by each of the approximately 1,200 putative class members "in connection with their deployment to perform adjusting services for claims arising from the oil spill following the explosion of the Deepwater Horizon offshore oil rig in the Gulf of Mexico."
In the proceedings below (and on appeal) Worley contends, in defense to plaintiffs' assertions, that the Agreement does not apply to the parties' employment relationship for claims adjusting services related to the oil spill, but, rather, only applies to "insurance-type adjusting"
On review, we find the record before us clearly discloses a "common nucleus of operative facts" regarding the circumstances surrounding the employment of the putative class members herein as well as common contentions capable of class-wide resolution. Specifically, the common contention of the plaintiffs is that the written Agreement governed the employment relationship at issue and, further, that the reasonable interpretation of the compensation portions of the Agreement entitles them to compensation in the amount of 65% of the fee Worley billed its clients for their services. Worley's common contentions, on the other hand, are that the Agreement does not apply herein and that oral agreements with each putative class member govern instead. Thus, the record supports a finding of common questions capable of class-wide resolution as to whether the parties intended the written Agreement to govern their employment relationship for claims adjusting services relating to the oil spill or whether an oral contract governed the parties' relationship instead and the proper interpretation of the compensation portion of the Agreement, if it is found to apply to the employment relationship at issue. Accordingly, we find no manifest error in the trial court's determination that plaintiffs satisfied the commonality prerequisite.
This assignment of error also lacks merit.
The final threshold prerequisite of LSA-C.C.P. art. 591(A) challenged by Worley is the requirement in subsection (A)(4) that the representative parties will fairly and adequately protect the interests of the class. In its fifth assignment of error, Worley contends that the trial court erred in finding adequate representation by the class members because "the class members necessarily have antagonistic or conflicting claims with other members of the class." The parties seeking to maintain a class action must demonstrate that the representative parties will fairly and adequately protect the interests of the class, which requires a determination that the chosen class members do not have antagonistic or conflicting claims with other members of the class.
Worley contends on appeal that because plaintiffs allege that under the Agreement, they are entitled to "65% of every BP claim or file they worked on" and each of the named plaintiffs worked on the same files as other adjusters (who are potential class members), "they will necessarily be trying to recover the same 65% as those they claim to represent." However, these assertions clearly misstate the relief requested by plaintiffs herein and are premised on acceptance of Worley's assertions as to the proper interpretation of the compensation provisions of the Agreement. Plaintiffs contend that the compensation provisions of the Agreement entitle them to 65% of the rate that Worley charged its clients on a daily basis for each adjuster's work,
Notably, in considering this issue, the court, from the evidence presented, rejected Worley's argument that there would be a conflict between the class representatives and the remaining class members. Moreover, the court specifically and astutely noted that if it were later determined that Worley's suggested interpretation of the compensation portions of the Agreement should prevail and, thus, that compensation was to be determined on a file-by-file basis, rather than a percentage of the day rate Worley charged for each adjuster's services, then there may be a necessity at that time to decertify the class. This is a remedy specifically sanctioned by the Code of Civil Procedure. LSA-C.C.P. art. 592(A)(3)(c).
Errors to be made in deciding class action issues should be in favor of and not against the maintenance of the class action.
Considering these precepts and the record before us, we likewise find no merit to this assignment of error.
In assignment of error number one, Worley challenges the trial court's determination that the requirements of predominance and class superiority set forth in LSA-C.C.P. art. 591(B)(3) were met where the claims and defenses presented depend for their resolution on proof individual to each class member. Thus, in assignment of error number two, Worley contends that class certification was inappropriate pursuant to LSA-C.C.P. art. 591(C).
LSA-C.C.P. art. 591(B)(3)(a)-(f);
Worley contends on appeal that plaintiffs cannot establish that common issues of fact or law predominate over individual issues and that, because of these individualized issues, the superiority requirement was likewise not satisfied, thus rendering class certification inappropriate. In particular, Worley contends that individualized issues of liability will require inquiries to establish each element of the plaintiffs' causes of action as well as individualized considerations of affirmative defenses asserted by Worley, that the calculation of damages will require "an adjuster-by-adjuster, claim-by-claim, invoice-by-invoice, day-by-day, receipt-by-receipt analysis," and that choice-of-forum and choice-of-law issues will require individual determinations for each class member.
However, as set forth above, the basis for plaintiffs' claim of liability is the same as to each proposed class member, namely that the Agreement each signed obligated Worley to provide compensation to each adjuster at a rate of 65% of the day rate Worley charged its clients for the work of each individual adjuster. As noted above, Worley's corporate representative specifically testified that Worley's defense to each claim would be the same. Worley has set forth common defenses to all these claims,
Finally, with regard to the policy concerns underlying the factors listed in LSA-C.C.P. art. 591(B)(3), given the large number of putative plaintiffs and the relatively small nature of each individual claim asserted, the class action mechanism would afford each plaintiff a meaningful opportunity to pursue a remedy while simultaneously preventing a multitude of individual lawsuits. Moreover, Worley will be able to defend all such claims in one forum.
For the above and foregoing reasons, the September 21, 2011 judgment certifying the action as a class action is hereby affirmed. Costs of this appeal are assessed against Worley Catastrophe Services, L.L.C., and Worley Catastrophe Response, L.L.C.
I do not find that class commonalities predominate over questions affecting only individual members of the class such that the class action is superior to other available methods for fair and efficient adjudication of the controversy. The plaintiffs' breach of contract allegations, if proven, will require individualized determinations of the damages each plaintiff sustained. Regardless of whether plaintiffs are seeking 65 percent of the total amount paid by BP to Worley or the total amount billed by Worley to BP, specific individual determinations will have to be made regarding the particular file each adjuster worked, the amount that Worley billed BP or the amount BP paid per adjuster per file, the amounts Worley had paid to each individual adjuster, and a calculation of the difference between what each plaintiff was paid per day and 65% of the amount Worley received or invoiced for the particular files on which the adjuster worked. Accordingly, given these highly individualized determinations, I conclude that the class was improperly certified.
