United States District Court, N.D. Illinois, Eastern Division
June 25, 2004.
SEAN LADEGAARD individually and on behalf of a class of employees, similarly situated, Plaintiff,
HARD ROCK CONCRETE CUTTERS, INC., et al. Defendants.
The opinion of the court was delivered by: JOAN H. LEFKOW, District Judge
MEMORANDUM OPINION AND ORDER
Plaintiff, Sean Ladegaard ("Ladegaard"), filed this action
against defendants Hard Rock Concrete Cutters, Inc. ("Hard
Rock"), and its principals, James M. Dvoratchek and Peter M.
Held, in the Circuit Court of Cook County, Illinois, alleging
violations of the Illinois Minimum Wage Law ("IMWL"), 820 ILCS
105/1 et seq., the Illinois Wage Payment and Collection Act
("IWPCA"), 820 ILCS 115/1 et seq., and the Fair Labor Standards
Act ("FLSA"), 29 U.S.C. § 201 et seq. After defendants removed
the case to federal court, this court certified a class of
plaintiffs for the IMWL and IWPCA claims. Hard Rock now moves to
decertify the class. For the following reasons, Hard Rock's
motion is denied.
The FLSA, on one hand, and the IMWL and IWPCA, on the other,
differ in their treatment of "class" issues. Section 216(b) of
the FLSA provides, "No employee shall be a party plaintiff to any
action unless he gives his consent in writing to become a party
and such consent is filed in the court in which such action is
brought." 29 U.S.C. § 216(b). Thus, the FLSA only permits collective actions to be maintained on an "opt-in" basis.
Rule 23 of the Federal Rules of Civil Procedure, however, permits
class actions to be maintained on an "opt-out" basis. Because the
IMWL and IWPCA contain no language resembling Section 216(b) of
the FLSA, a court may certify a class of plaintiffs under these
laws using the "opt-out" procedures of Rule 23.
Ladegaard brings claims under both the FLSA and the IMWL and
IWPCA, implicating both opt-in and opt-out procedures. On
December 15, 2000, Ladegaard sent a court-approved notice to all
individuals who had been employed as hourly-paid concrete cutters
for Hard Rock in the three years before the date of the notice
a total of 65 individuals informing them of their right to opt
in to the FLSA collective action as a party plaintiff by
completing and returning an opt-in form. In response, five
current or former employees of Hard Rock opted in to the FLSA
claim before the February 15, 2001 deadline. An additional
plaintiff was allowed to join the case on August 18, 2001.
Meanwhile, on November 30, 2000, the court certified a class of
state law claimants pursuant to Rule 23(b)(3). On April 26, 2001,
Ladegaard distributed a court-approved notice to the same 65
current and former Hard Rock employees advising them of their
right to "opt out" of the class of state law claimants. Seventeen
class members opted out of the class by the June 25, 2001
deadline. This left 47 class members in the case, 41 of whom did
not opt in to the FLSA claim.
In opposing Ladegaard's original motion for class
certification, Hard Rock argued that potential class members
likely would be confused by the successive opt-in/opt-out
notices. The court rejected that argument on the record before it
at the time, reasoning that "[a]lthough defendants have suggested
confusion will result from notice to class members of their right
to `opt-in' to the FLSA action and `opt-out' of the Rule 23 state
claims, plaintiff has indicated that this will not be a major
obstacle because his attorneys have drafted such joint notices
(supervised by other courts in this district) in the past."
Ladegaard v. Hard Rock Concrete Cutters, Inc., No. 00 C 5755,
2000 WL 1774091, at *7 (N.D. Ill. December 1, 2000). The notice
You may have already received a notice dated December
15, 2000 to join (or "optin") to the Fair Labor
Standards Act (FLSA) law suit against the Defendants.
Please be advised that this notice is to inform you
of an entirely different and separate claim. Whether
you have or not opted into the FLSA law suit does not
affect your rights to be a party to the Illinois
Minimum Wage Act and Wage Payment and Collection Act
Of the 47 class members who did not file an opt-out notice
before the June 25, 2001 deadline, 20 have since expressed a
desire to opt out of the case. Two employees completed optout
notices, but neither notice was postmarked before the deadline.
Eighteen additional class members have since expressed a desire
to opt out. In letters attached as exhibits to Hard Rock's
motion, these class members state either that they never received
the opt-out notice, that they believed it to be the same thing as
the opt-in FLSA notice, and/or that they were confused by the two
notices. For example, one employee wrote,
"I . . . recently discovered that my name is on a
list showing that I want to sue Jim Dvoratchek and
Pete Held and Hard Rock Concrete Cutters. I only
received one notice which needed to be sent in to
join. I threw it out. I want nothing to do with this
suit. I never received a second notice last spring. I
would have sent it back or done whatever was required
to stay out of this suit."
Another employee stated,
"I never intended to be involved in this lawsuit.
When letters came to my house from [plaintiffs'
counsel] Jack [sic] Cotiguala I thought they were
asking me to be part of the suit. I threw all of the
letters out not understanding them." Another wrote,
"The initiators of this lawsuit sent misleading
letters to the homes of other workers in an attempt
to gather a greater number of people to join the
lawsuit. The first letter, explaining the reasoning
of the lawsuit, asked the other employees to send in a response if they wished to join. The
second letter asked the employees to send in a
response if they wished not to join. I did not read
this carefully enough, and mistakenly threw the
second letter away."
Just as it is possible that other class members who failed to
return the opt-out notice chose to stay in the law suit, it is
possible that a number of other class members failed to return
the notice because they did not read or failed to understand the
notice. See Mueke v. A-Reliable Auto Parts & Wreckers, Inc.,
No. 01 C 2361, 2002 WL 1359411, at *2 n. 3 (N.D. Ill. June 21,
2002) ("In the Court's experience, few if any persons who receive
notice of a class action opt out; though one could argue that
this is because the vast majority of notice recipients make an
affirmative decision to stay in the case, it is just as likely
that the tiny number of opt-outs occurs because recipients ignore
the notice (believing it to be `junk mail') or once seeing it, do
not bother to read it."). In general, the court will assume that
the class members are literate and able to understand a notice
such as the opt-out notice.
Rule 23 allows suits to go forward as class actions only if "a
class action is superior to other available methods for the fair
and efficient adjudication of the controversy." Fed.R.Civ.Pro.
23(b)(3). Hard Rock argues that the correspondence from class
members expressing a desire to be removed from the case
demonstrates that a class action in this case is not superior to
other available methods specifically, the Section 216(b) opt-in
procedure of the FLSA for the fair and efficient adjudication
of the controversy. Further, Hard Rock argues that the
correspondence demonstrates that Ladegaard no longer will fairly
and adequately protect the interests of the class.
Plaintiffs respond to this argument by suggesting that the
class members who expressed a desire to remove themselves from
the case were paid off, threatened with economic pressure from
Hard Rock, or improperly contacted by defendants or their
attorneys. Plaintiffs argue, for instance,
A reading of the correspondence . . . from the
potential class members who allegedly wish to
"voluntarily" opt out of the class reveals that
shortly before sending that correspondence, they
learned (because it was "brought to their attention")
that they were part of the state law class because
their name was "on a list." A great many of the
letters state that the state class notice had been
thrown out months before but these workers somehow
collectively "learned" of their participation in the
class. One such letter tells us how these workers
might have "learned" of their name being on the
"list." Mr. Leo Worth stated in his August 29, 2001
letter: "Pete and Jim . . . as per my conversation
with Jimmy last week" that he felt the need to "set
the record straight that . . . this lawsuit is
frivolous and unfounded."
(Pl. Memo in Opp'n, at 2.) Plaintiffs then point out that the
individual defendants names are "Pete" Held and "Jim" Dvoratchek
and that neither the court nor plaintiffs' counsel distributed
any "list" of class members.
Plaintiffs also suggest that the correspondence reveals "that
some type of settlement of the amounts owed might have taken
place between some of the unnamed class members and the
Defendants. . . ." Plaintiffs continue,
Some other examples of the employees "learning" of a
"list" and receipt of settlement money are: "I have
recently been informed that I was on some sort of
list that is in the process of suing Hard Rock
Concrete Cutters, Inc. . . . I have received all
money earned within my time for working for my
employers (Jim Dvoratchek and Pete Held) so please
remove my name that is any list having to do with any
lawsuit . . . Paxton Willis" (Undated); "It has come
to my attention that I, an employee of Hard Rock, am
still listed on the lawsuit. . . . I have been
properly compensated for all hours that I have worked
at Hard Rock. . . . Again, I am asking to have my
name removed from your list. . . . William Seehafer."
(Dated March 6, 2002); "I have been satisfactorily
compensated for all work that I have completed. . . .
Brian Ruhl" (dated February 25, 2002).
(Pl. Memo. in Opp'n, at 2-3; emphasis in Memo, but not in
original correspondence.) Plaintiffs contend that even more
"disturbing facts" arose from telephone conversations that
plaintiffs' counsel had with some of the letter writers.
Plaintiffs' counsel spoke to one individual who said that he
wanted to participate in the state portion of the lawsuit but did
not want to be included in the federal portion. Another correspondent informed plaintiffs'
counsel that "Defendants" told him to send back the second notice
of class action to opt out of the lawsuit. "When questioned
further the caller appeared agitated and wouldn't go into details
about who told him to send back the notice." (Galovich Aff. ¶ 3.)
That Jim Dvoratchek engaged in any conversation with class
members about the lawsuit is problematic because he has power
over their livelihood. No matter how evenhanded he may have tried
to be, the situation inheres with the possibility that the
employees felt coerced.*fn1 Even if it is true that a number
of the employees actually initiated the conversation about the
law suit without any provocation, plainly Dvoratchek talked about
the law suit knowing that the court had previously directed Hard
Rock's representatives not to communicate with potential class
members about the law suit.*fn2 Dvoratchek states that he
told individuals who did not want to be in the law suit they
"should write a letter to the judge" or "write a letter to
[Dvoratchek], and [he] would see to it that it got into the right
hands." Dvoratchek Declaration ¶¶ 4, 6. Dvoratchek identifies five employees with whom he spoke in "casual
conversation" about the lawsuit who appeared concerned that the
cost of the litigation might cost them their jobs. ¶ 4. Another
conversation occurred in connection with someone seeking
reemployment. Dvoratchek admits that he initiated contact with
"some current and former employees whom [he] believed were
friendly with [him] and thus unlikely to want to sue [him]." ¶ 7.
"Having them stay in the case if they do not want to be in it
does not help them or me." Even if Dvoratchek believed his
contacts were innocent, any class member in the situations
described would have known that a letter expressing a desire to
opt out would please Dvoratchek.
This leads to two issues: first, whether the fact that only six
people opted in after receiving the first notice shows that a
class action is not a superior method of adjudicating the class
members' claims, and second, what consequences should flow from
the above-described events.
A court has broad discretion in determining whether class
certification is proper. Keele v. Wexler, 149 F.3d 589, 592
(7th Cir. 1998). 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 is
appropriate." Ellis v. Elgin Riverboat Resort,
217 F.R.D. 415, 419 (N.D. Ill. 2003) (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. Ill. 1995) (the court "remains free to modify or vacate a
certification order if it should prove necessary").
The court acknowledges the three cases decided since this
court's class certification ruling in 2000 that have held that a
class action is not a superior method of adjudicating state law
wage and overtime claims when such cases also include a FLSA
claim covering the same conduct. Mueke v. A-Reliable Auto Parts & Wreckers, Inc., No.
01 C 2361, 2002 WL 1359411, at *2 (N.D. Ill. June 21, 2002)
(Judge Kennelly) (refusing to certify a state law overtime class
action under Rule 23(b)(3)); Thiebes v. Wal-Mart Stores,
Inc., No. CIV. 98-802-KI, 2002 WL 479840, at *3 (D.Or. Jan. 9,
2002) (same); De la Fuente v. FPM Ipsen Heat Treating, Inc.,
No. 02 C 50188, 2002 WL 31819226, at *2 (N.D. Ill. Dec. 16, 2002)
(Judge Reinhard) (same). One reason for these courts' refusal to
certify a class was their concern that potential class members
would be confused by the successive opt-in/opt-out notices. See
De la Fuente, 2002 WL 31819226, at *2 (criticizing Ladegaard,
2000 WL 1774091, and stating, "a notice that calls both for a
decision to opt-in to a collective action and also whether to
opt-out of the class action . . . seems an inherently difficult
task . . . [to do] in a non-confusing manner."); Thiebes, 2002
WL 479840, at *2 ("I believe it would be difficult to fashion an
effective notice to prospective class members that explains their
opportunity to opt in to the FLSA collective action as well as
their choice to opt out of the class action."). Although the
court concedes that the two notices may have been more confusing
than it originally anticipated, it does not agree that it is
appropriate to deny class certification as a result. Both the
FLSA and the counterpart Illinois laws are remedial legislation.
Remedial legislation is to be liberally construed in favor of its
beneficiaries. See Hodgson v. University Club Tower, Inc.,
466 F.2d 745, 746 (10th Cir. 1972) (citing Mitchell v.
Lublin McGaughy & Assoc., 358 U.S. 207, 211)). The confusion
caused by the two notices is a result of the vicissitudes of
federal jurisdiction, which defendants invoked by way of removal,
but it does not prejudice any of the employees involved. Those
who chose to opt out of the Illinois claims were given the
opportunity to do so, and seventeen did (which is evidence that
the notice was understandable). That fewer employees opted in
than out might show, rather than confusion, a greater willingness to assert a claim if it can be
done without making an affirmative challenge, i.e., passively
and anonymously. Furthermore, if at the end of the case,
liability is determined, notice will be sent to the class as to
the opportunity to receive an award. Any class member who
believes that receiving the award is not in his best interest
remains free to reject the award. In sum, the court will not
decertify the class merely because there is not a perfect fit
between the two classes.
Underlying the defendants' argument for decertification based
on the belated opt-out letters is the question of whether the
class is still so numerous that joinder of all members is
impracticable. As previously stated in the decision certifying
the class, the court used a benchmark of 40 as the threshold for
numerosity. Decision of Nov. 19, 2000, at 7. The court will
disregard any opt outs that were generated after the closing date
because all are late and most are tainted. That leaves 47 in the
class, which is sufficient to satisfy numerosity.
Hard Rock also contends that decertification should be ordered
because the class representative can no longer fairly and
adequately represent the class where a substantial number of
class members are opposed to the litigation. The court will not
entertain this argument in light of Hard Rock's participation in
stirring up the opposition. The court's greater concern is that
Hard Rock neither initiate nor entertain further contacts with
members of the class concerning the lawsuit other than by
defendants' counsel through plaintiffs' counsel. Indeed, the
court will so order and will consider any further contacts as
grounds for a rule to show cause why defendants should not be
found in contempt of court.
Finally, it appears that members of the class could be well
served by a communication from the court explaining to class
members that their questions about the law suit should be directed to plaintiffs' counsel rather than representatives of
their employer; that the court has seen letters expressing a
desire to opt out of the law suit but has decided that anyone who
sent a letter after the June 25, 2001, deadline remains a member
of the class; nevertheless, at some time in the future, should
the court enter a judgment in plaintiffs' favor, they will be
given notice of what their potential award would be and an
opportunity to reject such an award if they voluntarily choose to
Defendants' motion to decertify the class on Counts I and II is
denied [#100]. Pending disposition of this law suit, defendants
and their agents are directed not to initiate or entertain,
directly or indirectly, conversations with any class members with
respect to any matter relating to this law suit. Plaintiffs
counsel shall draft a proposed notice to class members and serve
it on defendants' counsel. The parties shall endeavor to reach
agreement on a notice that can be sent to all class members by
July 15, 2004. This case will be called for status on July 8,
2004, at 9:30.