Since the Supreme Court decision in Wal Mart Stores, Inc v Dukes, there has been considerable litigation about whether its holding applies to other kinds of class actions, most notably FLSA class actions, with courts coming down on both sides of the issue.  Now, in a case involving a proposed class of loan officers, a federal judge has taken the view that Dukes is not dispositive on the class certification issue.  The case is entitled Myles v. Prosperity Mortgage Co., filed in federal court in the District of Maryland.

The judge rejected Prosperity Mortgage Company’s contention that Dukes applied to all class actions. Instead, the judge held that the Supreme Court holding in Dukes applied only to Rule 23 actions and not to the collective, opt-in action that makes a FLSA case unique (and somewhat different from the Rule 23 action).  The Dukes principles were certainly not germane to the question of whether so-called conditional certification should be granted..

The Dukes rationale focused on the premise that a class cannot be certified where each class member might be entitled to a different remedy from the defendant than other members of the class.  The judge found that “no local management discretion is at issue and no individualized inquiry is necessary to determine why individual loan officers were disfavored. ” Thus, the class was homogeneous and not in need of scrutiny for each class member.  Conversely, in FLSA cases in which Dukes has been held to apply (as I have written about) the defense won based on an “individualized assessment” defense.

The plaintiffs claimed that they were misclassified and therefore denied payment of proper overtime.  Then, in April 2011, the Company changed their status to non-exempt and began paying overtime after forty hours.  This raises the interesting side note of whether this re-classification (whether voluntary or prompted by the lawsuit) could be used as “evidence” of a prior errant classification.  That remains to be seen.

My two cents as a management side practitioner.  Keep advocating the application of Dukes and the “scared” dogma that the need for individualized scrutiny undermines the viability of the proposed class.