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October 26, 2018 Practice Points

Ninth Circuit Provides Evidentiary Freedom at Class Certification Stage

The case involves a wage and hour class action challenging an employer’s practice of rounding clock-in times to the nearest quarter hour.

By the Class Actions & Derivative Suits Committee

In Sali v. Corona Reg'l Med. Ctr., 889 F.3d 623, 632 (9th Cir. 2018), the Ninth Circuit held that “[i]nadmissibility alone is not a proper basis to reject evidence submitted in support of class certification” and directed the district court to consider a declaration prepared by a paralegal employed by plaintiffs’ attorneys.

Sali was a wage and hour class action challenging the employer’s practice of rounding clock-in times to the nearest quarter hour. In support of their motion for class certification, the plaintiffs submitted a declaration from a paralegal at the law firm they retained. The paralegal had reviewed time records and determined the average impact of the rounding practice on the named plaintiffs. The defendant objected to the paralegal declaration, arguing that the declaration was inadmissible lay opinion, was unreliable and was not based on personal knowledge of the underlying records. The district court excluded the declaration and denied class certification.

On appeal, the Ninth Circuit held that the district court’s refusal to consider the paralegal declaration was an abuse of discretion. The court explained that, because class certification is tentative and subject to change, “[a]pplying the formal strictures of trial to such an early stage of litigation makes little common sense.” Sali, 889 F.3d at 631. “Although we have not squarely addressed the nature of the ‘evidentiary proof’ a plaintiff must submit in support of class certification, we now hold that such proof need not be admissible evidence.” Id. at 632. “Instead, an inquiry into the evidence’s ultimate admissibility should go to the weight that evidence is given at the class certification stage.” Id. at 634.

The Sali opinion notes that there is a circuit split on this issue. “[T]he Fifth Circuit has directly held that admissible evidence is required to support class certification.” Id. at 632 (citing Unger v. Amedisys Inc., 401 F.3d 316, 319 (5th Cir. 2005) (holding that the court's “findings must be made based on adequate admissible evidence to justify class certification”).) The Seventh Circuit has “suggested that expert evidence submitted in support of class certification must be admissible.” Id. (citing Messner v. Northshore Univ. Health Sys., 669 F.3d 802, 812 (7th Cir. 2012).) “The Third Circuit has similarly held that a plaintiff may rely on challenged expert testimony to satisfy the requirements of Rule 23 only if that expert testimony satisfies the evidentiary standard set out in Daubert.” Id. (citing In re Blood Reagents Antitrust Litig., 783 F.3d 183, 187 (3d Cir. 2015).)

The Ninth Circuit nevertheless followed the Eighth Circuit’s lead, explaining: “[w]e agree with the Eighth Circuit, however, which has held that a district court is not limited to considering only admissible evidence in evaluating whether Rule 23's requirements are met.” Id. (citing In re Zurn Pex Plumbing Prod. Liab. Litig., 644 F.3d 604, 612 (8th Cir. 2011).)