FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
MICHAEL MARLO, an individual,
Plaintiff-Appellee, No. 09-56196
v.
D.C. No.
2:03-cv-04336-
UNITED PARCEL SERVICE, INC., a
corporation, DDP-RZ
Defendant-Appellant.
MICHAEL MARLO, an individual,
Plaintiff-Appellant, No. 09-56206
v.
D.C. No.
2:03-cv-04336-
UNITED PARCEL SERVICE, INC., a
corporation, DDP-RZ
Defendant-Appellee.
MICHAEL MARLO, an individual, No. 09-56451
Plaintiff-Appellee,
D.C. No.
v.
2:03-cv-04336-
UNITED PARCEL SERVICE, INC., a DDP-RZ
corporation,
OPINION
Defendant-Appellant.
Appeal from the United States District Court
for the Central District of California
Dean D. Pregerson, District Judge, Presiding
Argued and Submitted
November 4, 2010—Pasadena, California
5541
5542 MARLO v. UNITED PARCEL SERVICE
Filed April 28, 2011
Before: Johnnie B. Rawlinson and Milan D. Smith, Jr.,
Circuit Judges, and Robert C. Jones,* District Judge.
Opinion by Judge Milan D. Smith, Jr.
*The Honorable Robert C. Jones, United States District Judge for the
District of Nevada, sitting by designation.
5544 MARLO v. UNITED PARCEL SERVICE
COUNSEL
M. Kirby C. Wilcox and Paul W. Cane, Paul, Hastings, Janof-
sky and Walker, LLP, San Francisco, California, George W.
Abele, and Jennifer S. Baldocchi, Paul, Hastings, Janofsky
and Walker, LLP, Los Angeles, California, for the defendant-
appellant.
John A. Furutani and Mark C. Peters, Furutani and Peters,
LLP, Pasadena, California, for the plaintiff-appellee.
OPINION
M. SMITH, Circuit Judge:
Plaintiff-Appellee Michael Marlo and Defendant-Appellant
United Parcel Service, Inc. (UPS) appeal or cross-appeal from
a jury verdict awarding Marlo unpaid overtime, meal, and
rest-period wages. UPS classified Marlo as an executive and
administrative employee under California’s Industrial Welfare
Commission (IWC) Wage Order No. 9, Cal. Code Regs. tit.
MARLO v. UNITED PARCEL SERVICE 5545
8, § 11090 (2005), thereby purporting to exempt him from the
California Labor Code’s overtime-pay requirements. See Cal.
Lab. Code § 515(a). The district court initially certified a class
comprised of full-time supervisors employed by UPS from
2000 to 2004, and appointed Marlo class representative. In
2008, however, the court decertified the class on the ground
that Marlo had failed to establish that common issues of law
or fact predominated over individual ones. See Fed. R. Civ. P.
23(b)(3).
We have jurisdiction under 28 U.S.C. § 1291. We hold that
the district court did not abuse its discretion in decertifying
the class. We address the remaining issues in a memorandum
disposition filed contemporaneously with this opinion.
FACTUAL AND PROCEDURAL BACKGROUND
From May 6, 1999, through November 12, 2008, Marlo
worked for UPS as a hub supervisor, preload supervisor, and
on-road supervisor (collectively, full-time supervisor or FTS).
During that time, Marlo worked more than forty hours per
week on a regular basis without taking meal or rest-period
breaks, or receiving overtime compensation. As a hub super-
visor, Marlo supervised hourly employees and part-time
supervisors engaged in unloading, sorting, and loading pack-
ages. His duties included assigning employees tasks within
their defined work areas, providing training to ensure safety
and efficiency, monitoring employees’ performance, and
coordinating delivery times and volume. As a preload super-
visor, Marlo supervised and trained hourly employees and
part-time supervisors loading packages onto cars for delivery.
As an on-road supervisor, Marlo supervised employees deliv-
ering packages.
Marlo filed suit against UPS on May 6, 2003. On June 10,
2004, the district court certified a class under Federal Rule of
Civil Procedure 23 and appointed Marlo class representative.
In its class-certification order, the district court determined
5546 MARLO v. UNITED PARCEL SERVICE
that Marlo “demonstrated that the job duties as set forth by
UPS are similar with regard to the proposed class, and that
UPS applies an overtime exemption policy to the proposed
class based on their job titles.” The district court concluded
that a class action was a superior method for adjudicating the
controversy because “Full Time Supervisors, especially those
still employed at UPS, may fear reprisal, precluding them
from filing individual actions[,] . . . and because of the large
volume of individual actions that might proceed . . . if the
claims were adjudicated individually.” The class consisted of
FTS employed by UPS from 2000 to 2004.
The district court granted summary judgment in UPS’s
favor on August 22, 2005. Marlo appealed, and we reversed
and remanded, concluding that “Marlo has raised material
issues of fact related to whether the FTS ‘customarily and reg-
ularly exercise[ ] discretion and independent judgment.’ ”
Marlo v. United Parcel Serv., Inc., 254 Fed. App’x. 568, 568
(9th Cir. 2007) (citing Cal. Code Regs. tit. 8
§ 11090(1)(A)(1)(d)).
On remand, the district court decertified the class. See
Marlo v. United Parcel Serv., Inc., 251 F.R.D. 476 (C.D. Cal.
2008). The court noted that its concern about the class-wide
applicability of the evidence “has ripened into doubt regard-
ing the continuing efficacy of a class action in this case.” Id.
at 480. Noting that “[a]s a general rule, this Court does not
consider decertification necessary,” id. at 488, it nonetheless
concluded that Marlo had not established predominance, not-
ing that the existence of a uniform policy classifying FTS as
exempt is insufficient absent evidence of misclassification; id.
at 484; that Marlo had relied heavily on a survey that was nei-
ther reliable nor representative of the class, id. at 485-86; and
that his remaining evidence similarly was not representative
of the class and did not address the “primarily engaged” ele-
ment of the exemptions under IWC Wage Order No. 9, id. at
486-87. The court concluded:
MARLO v. UNITED PARCEL SERVICE 5547
Plaintiff’s evidence is essentially individual testi-
mony and an exemption policy. Under the circum-
stances in this case, where Plaintiff alleges that 1200
FTS have been misclassified as exempt employees,
Plaintiff had to provide common evidence to support
extrapolation from individual experiences to a class-
wide judgment that is not merely speculative. Plain-
tiff has not come forward with common proof suffi-
cient to allow a fact-finder to make a class-wide
judgment as to the FTS.
Id. at 486. Moreover, “[a]s the Court has found that individual
issues predominate in this case, a class action is not the supe-
rior method for litigating this matter.” Id. at 487. The court
certified the issue for interlocutory appeal and stayed the
action pending appeal. Id. at 488. We declined to hear the
interlocutory appeal.
Following a nine-day trial and three days of deliberations,
the jury returned a partial verdict for Marlo. The jury found,
in relevant part, that during the period when Marlo was a hub
supervisor, UPS had satisfied neither the executive nor
administrative exemption in IWC Wage Order No. 9. The jury
similarly found that during the period when Marlo was a pre-
load supervisor, UPS had satisfied neither the executive nor
administrative exemption. As to Marlo’s work as an on-road
supervisor, however, it found that UPS had satisfied each ele-
ment of the executive exemption. It therefore awarded Marlo
unpaid overtime, meal, and rest-period wages for the times
when he worked as a hub and preload supervisor.
Following trial, the district court denied UPS’s motions for
judgment as a matter of law and a new trial, and granted
Marlo’s motions for restitution and attorneys’ fees. UPS
timely appeals, and Marlo timely cross-appeals.
DISCUSSION
Marlo contends that the district court erred in determining
that he failed to establish the “predominance” element of Rule
5548 MARLO v. UNITED PARCEL SERVICE
23(b)(3), and, as a result, decertifying the class. We review a
district court’s class-certification decision for an abuse of dis-
cretion. Yokoyama v. Midland Nat’l Life Ins. Co., 594 F.3d
1087, 1091 (9th Cir. 2010). “If the district court’s determina-
tion was premised on a legal error, we will find a per se abuse
of discretion.” Id. We hold that the district court did not err.
To maintain a class action, a plaintiff must demonstrate
numerosity, commonality, typicality, and adequate representa-
tion of the class interest. Fed. R. Civ. P. 23(a). In addition to
those requirements, Rule 23(b) provides that a class may be
maintained, inter alia, if
the court finds that the questions of law or fact com-
mon to class members predominate over any ques-
tions affecting only individual members, and that a
class action is superior to other available methods for
fairly and efficiently adjudicating the controversy.
The matters pertinent to these findings include:
(A) the class members’ interests in individ-
ually controlling the prosecution or defense
of separate actions;
(B) the extent and nature of any litigation
concerning the controversy already begun
by or against class members;
(C) the desirability or undesirability of con-
centrating the litigation of the claims in the
particular forum; and
(D) the likely difficulties in managing a
class action.
Fed. R. Civ. P. 23(b)(3).
[1] The district court determined that Marlo had failed to
provide common proof that FTS class members were engaged
MARLO v. UNITED PARCEL SERVICE 5549
in nonexempt work. IWC Wage Order No. 9, which regulates
wages, hours, and working conditions in California’s trans-
portation industry, exempts from overtime-pay requirements
“persons employed in administrative, executive, or profes-
sional capacities.” Cal. Code Regs. tit. 8, § 11090(1)(A); see
also Cal. Lab. Code § 515(a) (“The Industrial Welfare Com-
mission may establish exemptions from the requirement that
an overtime rate of compensation be paid . . . for executive,
administrative, and professional employees, provided that the
employee is primarily engaged in the duties that meet the test
of the exemption, customarily and regularly exercises discre-
tion and independent judgment in performing those duties,
and earns a monthly salary equivalent to no less than two
times the state minimum wage for full-time employment.”).
As relevant here, the executive exemption applies to any
employee:
(a) Whose duties and responsibilities involve the
management of the enterprise in which he/she is
employed or of a customarily recognized department
or subdivision thereof; and
(b) Who customarily and regularly directs the work
of two or more other employees therein; and
(c) Who has the authority to hire or fire other
employees or whose suggestions and recommenda-
tions as to the hiring or firing and as to the advance-
ment and promotion or any other change of status of
other employees will be given particular weight; and
(d) Who customarily and regularly exercises discre-
tion and independent judgment; and
(e) Who is primarily engaged in duties which meet
the test of the exemption.
Cal. Code Regs. tit. 8, § 11090(1)(A)(1)(a)-(e). The adminis-
trative exemption applies to any employee:
5550 MARLO v. UNITED PARCEL SERVICE
(a) Whose duties and responsibilities involve . . . :
(i) The performance of office or non-
manual work directly related to manage-
ment policies or general business opera-
tions of his employer or his/her employer’s
customers;
. . . and . . .
(b) Who customarily and regularly exercises discre-
tion and independent judgment; and
(c) Who regularly and directly assists a proprietor, or
an employee employed in a bona fide executive or
administrative capacity . . . ; or
(d) Who performs under only general supervision
work along specialized or technical lines requiring
special training, experience, or knowledge; or
(e) Who executes under only general supervision
special assignments and tasks; and
(f) Who is primarily engaged in duties that meet the
test of the exemption.
Cal. Code Regs. tit. 8 § 11090(1)(A)(2)(a)-(f).
[2] As an initial matter, Marlo contends that the district
court improperly shifted the burden to him in finding that he
had failed to prove misclassification on a class-wide basis.
That contention, however, conflates the burden borne by the
employer concerning the merits with the burden borne by the
employee concerning class certification. Under California
law, an employer bears the burden of demonstrating that an
employee is exempt from the Labor Code’s overtime require-
ments. Nordquist v. McGraw-Hill Broad. Co., 38 Cal. Rptr.
MARLO v. UNITED PARCEL SERVICE 5551
2d 221, 225-26 (Cal. Ct. App. 1995). Accordingly, UPS
would bear the burden of proving on the merits that Marlo or
other class members were not misclassified as exempt under
California law. However, Federal Rule of Civil Procedure
Rule 23 governs the class-certification issue even if the under-
lying claim arises under state law. See Shady Grove Orthope-
dic Assocs., P.A., v. Allstate Ins. Co., 130 S.Ct. 1431, 1437
(2010) (stating that if Rule 23 answers the question in dispute,
“it governs—[state] law notwithstanding . . . . The question in
dispute is whether [the plaintiff’s] suit may proceed as a class
action. Rule 23 provides an answer.” (citations omitted)).
Thus, as to the class-decertification issue, Marlo, as “[t]he
party seeking class certification[,] bears the burden of demon-
strating that the requirements of Rules 23(a) and (b) are met.”
United Steel Workers v. ConocoPhillips Co., 593 F.3d 802,
807 (9th Cir. 2010).
The district court’s order decertifying the class recognized
that distinction. It evaluated whether “questions of law or fact
common to class members predominate over any questions
affecting only individual members, and [whether] a class
action is superior to other available methods for fairly and
efficiently adjudicating the controversy.” Fed. R. Civ. P.
23(b)(3). The court concluded, “Because [Marlo] has brought
a class action challenging UPS’s exemption of FTS as a pol-
icy of misclassification, [he] must be ‘able to demonstrate
pursuant to either scenario that misclassification was the rule
rather than the exception. . . .’ ” Marlo, 251 F.R.D. at 482
(citation omitted). The district court therefore properly placed
the burden on Marlo to demonstrate that Rule 23’s class-
certification requirements had been met.
[3] Marlo also argues that the court abused its discretion in
decertifying the class because he failed to establish the “pre-
dominance” element of Federal Rule of Civil Procedure
23(b)(3). In its order, the district court first noted changes that
had occurred since its certification order, and concluded,
“Plaintiff has not provided common proof to support a class-
5552 MARLO v. UNITED PARCEL SERVICE
wide judgment as to liability. . . . As there is no common
proof of misclassification in this case, there is no basis to
adjudicate class-wide misclassification and the result is that
individualized issues predominate over common ones.”
Marlo, 251 F.R.D. at 485. For the reasons explained infra,
that conclusion was not an abuse of discretion.
[4] Marlo contends that he satisfied his burden of estab-
lishing predominance by submitting evidence of UPS’s cen-
tralized control, and uniform policies and procedures. But a
blanket exemption policy “ ‘does not eliminate the need to
make a factual determination as to whether class members are
actually performing similar duties.’ ” In re Wells Fargo Home
Mortg. Overtime Pay Litig., 571 F.3d 953, 959 (9th Cir. 2009)
(citation omitted). Specifically, the existence of a policy clas-
sifying FTS as exempt from overtime-pay requirements does
not necessarily establish that FTS were misclassified, because
the policy may have accurately classified some employees
and misclassified others.
[5] To the extent Marlo argues that UPS’s policies and
procedures establish sufficient evidence of predominance, his
argument still fails. Marlo asserts that the district court had
before it various documents explaining activities that FTS are
expected to perform, and procedures that FTS should follow
in issuing staffing assignments and training hourly employees.
Even assuming that those documents establish that UPS’s pol-
icies and procedures apply to all FTS, however, Marlo has not
explained how they establish predominance as to these partic-
ular exemptions. In particular, the fact that UPS expects FTS
to follow certain procedures or perform certain tasks does not
establish whether they actually are “primarily engaged” in
exempt activities during the course of the workweek, Cal.
Code Regs. tit. 8, § 11090(1)(A)(1)(e) & (2)(f), or whether
they “customarily and regularly exercise[ ] discretion and
independent judgment,” id. § 11090(1)(A)(2)(b). Accord Don-
ovan v. Burger King Corp., 675 F.2d 516, 521-22 (2d Cir.
1982) (noting that the defendant’s detailed policies and proce-
MARLO v. UNITED PARCEL SERVICE 5553
dures did not foreclose the exercise of discretion by employ-
ees).
[6] Nor, contrary to Marlo’s assertion, did the district court
err in requiring a week-by-week determination of exempt sta-
tus. IWC Wage Order No. 9 states that in determining
whether an employee is “primarily engaged” in exempt work,
“[t]he work actually performed by the employee during the
course of the workweek must, first and foremost, be examined
and the amount of time the employee spends on such work . . .
shall be considered.” Cal. Code Regs. tit. 8, § 11090(1)(A)
(1)(e). California courts have construed this requirement to
mean that “[u]nder California law, the Court must determine
whether any given class members (or all the class members)
spend more than 51% of their time on managerial tasks in any
given workweek.” Dunbar v. Albertson’s, Inc., 47 Cal. Rptr.
3d 83, 86 (Cal. Ct. App. 2006) (emphasis added). Therefore,
the district court did not incorrectly apply California law by
requiring a week-by-week showing of work the FTS actually
performed.
[7] Marlo’s remaining evidence similarly does not support
predominance. Marlo relied, in part, on an annual employee
survey conducted by UPS, but did not establish that UPS fol-
lowed a reliable methodology in conducting the survey or that
the survey was limited to FTS. Nor did he clarify whether
respondents who self-identified as “supervisors” were neces-
sarily FTS in the purported class. He also relied on a tele-
phone survey of 160 FTS, and his counsel represented to the
district court that the survey would provide common evi-
dence, but the survey’s designer stated in her deposition that
she did not know whether the sample was representative. As
the district court concluded, “Given its methodological and
design problems, the [telephone] survey cannot qualify as
common proof of misclassification because it is unrepresenta-
tive, unreliable, and has essentially no probative value.”
Marlo, 251 F.R.D. at 486. Moreover, “[t]he declarations and
deposition testimony of FTS submitted by the parties suggest
5554 MARLO v. UNITED PARCEL SERVICE
variations in job duties that appear to be a product of employ-
ees working at different facilities, under different managers,
and with different customer bases.” Id. Based on Marlo’s evi-
dence, the district court did not abuse its discretion in con-
cluding that individual questions would predominate.
Marlo also argues that the district court abused its discre-
tion in weighing the merits of the case. That contention mis-
characterizes the district court’s order. As the court noted,
although it could not “weigh the evidence or otherwise evalu-
ate the merits of a plaintiff’s class claim,” it could “compar[e]
the class claims, the type of evidence necessary to support a
class-wide finding on those claims, and the bearing of those
considerations on Rule 23 certification.” Id. at 481 n.2. That
is a correct statement of law. See Moore v. Hughes Helicop-
ters, Inc., 708 F.2d 475, 480 (9th Cir. 1983) (noting that
although a decision on the merits is improper at the class-
certification stage, some inquiry into the substance of a case
may be necessary to determine whether commonality and typ-
icality requirements are met).
[8] The district court did not weigh the merits of the claim.
It evaluated the surveys on which Marlo relied not to deter-
mine whether supervisors were exempt or non-exempt from
overtime-pay requirements, but to determine whether the sur-
veys could support a class-wide finding regarding certifica-
tion. It evaluated Marlo’s remaining evidence for the same
purpose, noting that testimony by individual FTS similarly
did not support a class-wide determination. In so doing, the
court did not improperly weigh the merits of the claim. We
hold that the district court did not abuse its discretion in
decertifying the class.
Each party shall bear its own costs on appeal.
AFFIRMED.