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HARPER AND JONES v. YALE INTERNATIONAL INSURANCE AGENCY

May 12, 2004.

LEVAY HARPER and SHENITA JONES, individually and on behalf of a class of persons similarly situated, Plaintiff's
v.
YALE INTERNATIONAL INSURANCE AGENCY, INC., INSURANCE PLUS AGENCY ll, INC. and CONSTANTINE DANOS, Defendants



The opinion of the court was delivered by: REBECCA PALLMEYER, District Judge

MEMORANDUM OPINION AND ORDER

Plaintiff's Levay Harper and Shenita Jones have filed suit against Yale International Insurance Agency, Inc, ("Yale"), Insurance Plus Agency ll, lnc. ("Insurance Plus"), and Constantine Danos, alleging violations of the Fair Labor Standards Act ("FLSA"), 29 U.S.C. § 201 et seq., the Illinois Minimum Wage Law ("IMWL"), 820 ILCS 105/1 et seq., and the Illinois Wage Payment and Collection Act ("IWPCA"), 820 ILCS 115/1 et seq. The court certified a class of plaintiff's for the IMWL claim and Plaintiff's now seek an order approving their proposed notice. In response to concerns raised by the court regarding the propriety of exercising supplemental jurisdiction over an entire class of state law claimants, Defendants have moved to decertify the class. For the reasons set forth here, Defendants' motion to decertify is granted and Plaintiff's' motion regarding class notice is denied as moot.

BACKGROUND

  Harper was hired by Yale as a customer service representative on April 16, 2002. She worked "on salary," which was supposed to be based on an income of $25,000 per year for a 40-hour work week, (Cmplt. ¶ 3.)*fn1 Instead of receiving $12.02 per hour, however, Harper claims that she was paid only $10.01 per hour. (Id.) Harper also alleges that she was not paid overtime wages for hours she worked in excess of 40 per week. (Id. ¶ 4.) On March 15, 2003, Harper was discharged from her position. (Id. ¶ 10.) Several months later on June 3, 2003, Harper filed a complaint against Yale alleging violations of the minimum wage and overtime provisions of the FLSA, the IMWL and the IWPCA. The following day, Harper filed an Amended Complaint reasserting her statutory wage and hour claims, and adding a claim for discriminatory discharge in violation of the FLSA, 29 U.S.C. § 215(a)(3). Harper also sought to certify a class under the IMWL, comprised of "non-exempt hourly waged employees employed by [Yale] within three years of June 3, 2003 and the present and who were not paid overtime wages for hours worked in excess of 40 in each work week." (Amend. Cmplt. Count lll ¶ 1.)

  On September 17, 2003, Harper filed a Second Amended Complaint, adding Shenita Jones as a plaintiff, and naming Insurance Plus, Danos, George R. Rogiokos, and Haralambos "Harry" N. Konstantopolous as defendants.*fn2 Shortly thereafter on September 30, 2003, Plaintiff's moved to certify a class for the IMWL claim, defined as follows:

  All hourly waged employees employed by [Yale] who were employed more than forty hours in any work week, including those employees who were required to attend meetings on weekends or after regular business hours without pay or overtime between June 3, 2000 and the present; and all hourly waged employees employed by [Insurance Plus] who were employed more than 40 hours in any work week between September 17, 2000 and the present, including those employees who were required to attend meetings on weekends or after regular business hours without pay or overtime who are due back overtime pay under the [IMWL]. (Motion for Class Certification, at 2.) On November 3, 2003, the court overruled Defendants' objections to class certification and directed the parties to confer regarding the appropriate class definition and notice to putative class members. Plaintiff's moved for approval of their notice on November 26, 2003, but the court found the proposed class definition ambiguous and denied the motion without prejudice. On January 28, 2004, the court rejected Plaintiff's' amended notice, again due to ambiguity in the class definition. Plaintiff's have now submitted a third version of the proposed notice, which is currently before the court. Defendants object to Plaintiff's' proposal and seek to have the class decertified.

  DISCUSSION

 A. Motion to Decertify

  In ruling on a motion to decertify a class, the court considers whether "economy favors adjudicating multiple disputes in a single action, without sacrificing fairness." Ellis v. Elgin Riverboat Resort, 217 F.R.D. 415, 418 (N.D. Ill. 2003). Federal Rule of Civil Procedure 23(a) sets forth four requirements for class certification: (1) the class is so numerous that joinder of all members is impracticable (numerosity); (2) there are questions of law or fact common to the class (commonality); (3) the claims or defenses of the representative parties are typical of the claims or defenses of the class (typicality); and (4) the representative parties will fairly and adequately protect the interests of the class (adequate representation). See Rosario v. Livaditis, 963 F.2d 1013, 1017 (7th Cir. 1992). If a plaintiff meets all of these prerequisites, she must further satisfy one of the requirements set forth in Rule 23(b), Retired Chicago Police Ass'n v. City of Chicago, 7 F.3d 584, 596 (7th Cir. 1993). In this case, where Defendants objected only on commonality and numerosity grounds, the court concluded that Plaintiff had made the showing necessary for certification of a class under Rule 23(b)(3). Under that Rule, a class may be certified if "questions of law or fact common to the members of the class predominate over any questions affecting only individual members, and . . . a class action is superior to other available methods for the fair and efficient adjudication of the controversy." Fed. R. Civ. P. 23(b)(3).

  A court has broad discretion to resolve whether certifying a class is proper. Keele v. Wexler, 149 F.3d 589, 592 (7th Cir. 1998). In making this determination, the substantive allegations in the complaint are taken as true and, generally, the ultimate merits of the case are not examined, Eggleston v. Chicago Journeymen Plumbers' Local Union No. 130, 657 F.2d 890, 895 (7th Cir. 1981); Hill v. Shell Oil Co., No. 98 C 5766, 2002 WL 663583, at *2 (N.D. Ill. Mar. 28, 2002). The court should, however, "make whatever factual and legal inquiries are necessary under Rule 23" before deciding whether a case should proceed as a class action. Szabo v. Bridgeport Machines, Inc., 249 F.3d 672, 675 (7th Cir. 2001); Woodard v. Tower Automotive Products Co., No. 00 C 50459, 2002 WL 832572, at *2 (N.D. III. May 1, 2002). The court's initial determination to certify a class is "inherently tentative" and the court "remains under a continuing obligation to review whether proceeding as a class action is appropriate." Ellis, 217 F.R.D. at 419 (quoting Coopers & Lybrand v. Livesay, 437 U.S. 463, 469 n.11 (1978)). See also Binion v. Metropolitan Pier and Exposition Authority, 163 F.R.D. 517, 520 (N.D. III. 1995) (court "remains free to modify or vacate a certification order if it should prove necessary"). Plaintiff's bear the burden of "producing a record demonstrating the continued propriety of maintaining the class action." Ellis, 217 F.R.D. at 419.

  In challenging Plaintiff's1 original motion for class certification, Defendants focused primarily on the fact that Plaintiff's were seeking to represent employees of two separate employers: "Plaintiff's fail to cite a single case where this Court has certified a class action lawsuit against two distinct legal entities for the entities' alleged distinct practices." (Memorandum of Law in Opposition to Plaintiff's Motion for Class Certification, at 5.) (See also id. at 7) ("Plaintiff's are attempting to certify a class of two distinct employers who employed two distinct groups of former and current employees"). In response to concerns recently raised by this court regarding federal certification of a class of state law claimants, Defendants now argue that class certification is not a superior method of adjudicating Plaintiff's' IMWL claims as required under Rule 23(b)(3) because Congress has stated a "clear preference for opt-in collective actions" under the FLSA. (Def. Mem., at 4-5.)*fn3 The court agrees.

  Plaintiff's have alleged claims under the FLSA but do not seek to proceed with an FLSA collective action; instead, Plaintiff's are only pursuing an IMWL class action. No court has yet addressed whether a plaintiff seeking class treatment of wage and hour claims in federal court is required to pursue an FLSA collective action. Courts in this district are split as to whether plaintiff's may simultaneously pursue FLSA collective actions and state law class actions, but no court has allowed a plaintiff to proceed solely under the latter theory.

  In De La Fuente v. FPM Ipsen Heat Treating, Inc., No. 02 C 50188, 2002 WL 31819226 (N.D. III. Dec. 16, 2002) (Reinhard, J.), for example, the plaintiff's moved to begin opt-in notice on their FLSA collective action and simultaneously sought class certification of their IMWL and IWPCA claims. Id. at *1. The defendants did not object to the FLSA collective action and the court granted the plaintiff's' motion to proceed with notice of the class members' opt-in rights. Id. The court, however, declined to certify a Rule 23 class until after the opt-in period on the FLSA action closed. "The court shares Thiebes [v. Wal-Mart Stores, Inc., No. 98-802-KI, 1999 WL 1081357 (D. Or. Dec. 1, 1999)] concern about a notice that both calls for a decision whether to opt-in to the collective action and also whether to opt-out of the class action." 2002 WL 31819226, at *2. The court stated that it would have a better idea whether joinder was impractical after the opt-in period closed. Id.

  The plaintiff's in Muecke v. A-Reliable Auto Parts and Wreckers, Inc., No. 01 C 2361, 2002 WL 1359411 (N.D. III. June 21, 2002) (Kennelly, J.) also filed suit under the FLSA, the IMWL, and the IWPCA, and sought to send collective action opt-in notices under the FLSA claim and to certify a class under Rule 23 for the state law claims. Id. at *1. The court agreed to let the plaintiff's proceed with an FLSA collective action but declined to certify a Rule 23 class until after the opt-in period closed, at which time "we will have before the Court as plaintiff's all of the present and former employees who wish to pursue a claim for unpaid wages." Id. at "2. The court noted the possibility that only a few employees would opt-into the FLSA action, and explained that it would be incongruous to have "an FLSA `class' including only a tiny number of employees who are interested in seeking back wages, with a state-law class that nonetheless includes all or nearly all of the ...


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