[PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT FILED
________________________ U.S. COURT OF APPEALS
ELEVENTH CIRCUIT
APRIL 7, 2009
No. 07-13864
THOMAS K. KAHN
________________________
CLERK
D. C. Docket No. 06-20554-CV-MGC
HENRY VEGA,
individually and as representative
of all others similarly situated,
Plaintiff-Appellee,
versus
T-MOBILE USA, INC.,
a foreign corporation,
Defendant-Appellant.
________________________
Appeal from the United States District Court
for the Southern District of Florida
_________________________
(April 7, 2009)
Before TJOFLAT and MARCUS, Circuit Judges, and VINSON,* District Judge.
*
Honorable C. Roger Vinson, United States District Judge for the Northern District of
Florida, sitting by designation.
TJOFLAT, Circuit Judge:
T-Mobile USA, Inc. (“T-Mobile”) appeals the district court’s certification of
a class action brought against it on behalf of its former sales employees regarding
the company’s policy for paying commissions on the sale of prepaid cellular
telephone accounts. The class seeks damages to recover those commissions. After
a thorough review, we find numerous flaws, both procedural and substantive, in the
district court’s class certification analysis under Rule 23 of the Federal Rules of
Procedure and find, further, that the proposed class, as pled, is not amenable to
Rule 23 certification. We therefore hold that the district court abused its discretion
in certifying the class, vacate the certification order, and remand with the
instruction that the plaintiff’s claims proceed individually.
I.
A.
T-Mobile is a provider of cellular telephone services. Although it offers
various service plans, those plans generally fall under one of two classifications:
(1) term contract plans, in which a customer pays a monthly access fee for a
specified period of time (e.g., one or two years); and (2) prepaid or “pay as you go”
plans, under which a customer purchases a set number of telephone minutes, and,
when that “bucket” of minutes runs out, the customer chooses whether or not to
2
buy more minutes. Under the prepaid plans, the customer makes a non-refundable,
up-front payment for the minutes purchased and may use those minutes at any time
prior to the minutes’ expiration, which is specified in the customer agreement.
Plaintiff Henry Vega was employed by T-Mobile from April 2004 through
July 2005, when he was discharged for poor attendance. He worked as a retail
sales representative at a T-Mobile retail store in Miami, Florida. Throughout his
tenure, Vega’s compensation was subject to the guidelines set forth in the
company’s 2004 Sales Incentive Compensation Program (the “compensation
program”), which took effect on March 1, 2004.1 Upon commencing his
employment, Vega received a copy of the written compensation program,
including an attachment outlining the compensation plan for his specific position,
and returned a signed acknowledgment form indicating that he read and understood
the compensation program, both generally and with respect to his specific position.
As reflected in the compensation program, the compensation structure for T-
Mobile’s sales employees varied by business channel and job position within a
given channel. Generally, T-Mobile paid its retail sales representatives (i.e., its
1
Presumably due to the proprietary nature of T-Mobile’s compensation procedures, the
parties, with the district court’s permission and pursuant to a court-ratified Stipulated Protective
Order Concerning Confidential Information, filed the compensation program document under
seal in the district court. Out of respect for the competitively sensitive nature of the document,
we have endeavored to avoid quoting from the compensation program or describing its terms in
detail to any greater extent than the parties themselves have done in their briefs to this court.
3
employees, like Vega, who sold T-Mobile products and services through T-Mobile
owned and operated retail stores) an hourly wage plus incentive-based
commissions. Part of the monthly commission was derived from the employee’s
“net activations” for the month. The sales representative received credit (and
payment) for a new activation whenever one of his customers commenced a new
service plan. Should that customer later “deactivate” the service within 180 days
of activation, however, T-Mobile would “charge back” the amount of the incentive
compensation previously paid in order to reclaim that amount from the sales
representative. As explained repeatedly in the compensation program, both
generally and specifically with respect to retail sales representative compensation,
“[c]ommissions are paid as an advance against commissions anticipated to be
earned in the future. Commissions are not earned until the expiration of the 180-
day commission charge back window.” Accordingly, “if the customer deactivates
their [sic] account with [sic] the 180-day period, T-Mobile will revoke the
advanced commission it previously paid out.”
Significantly, although it set forth general guidelines describing T-Mobile’s
compensation structure and procedures, the written document outlining the
compensation program carried a number of disclaimers. For instance, the front
cover of the document prominently included the following boxed statement:
4
Notice: This document contains guidelines relating to the
compensation of certain T-Mobile Sales Professionals. This
document and any oral, written or electronic communication related to
the subject matter contained in this document are not intended and
shall not be read to create any express or implied contract or promise
of specific treatment or benefits in specific situations. Your
employment relationship with T-Mobile is at-will and either you or T-
Mobile can terminate your employment at any time without cause or
advance notice. In T-Mobile’s sole discretion, this document and the
guidelines stated herein may be changed or discontinued at any time
without prior notice.
Moreover, with respect to the incentive-based portion of its employees’
compensation, “T-Mobile retains sole discretion to determine what transactions
qualify for commission payout.”
In January 2004, T-Mobile instituted a new “business rule” with respect to
its accounting for prepaid service plans. Specifically, T-Mobile began to consider
a prepaid account to be “deactivated” when the customer did not use his prepaid
service for ninety consecutive days. The impetus for this change was to ensure an
accurate tally of the number of active subscribers in the company’s financial
reports. Even though, under the new annual prepaid plan T-Mobile introduced that
year, the customer could use his prepaid minutes for up to a year following the date
of purchase, the company decided to consider customers with accounts that have
been inactive for ninety days no longer to be active subscribers, and their accounts
were deemed “deactivated.” By July 2004, this new business rule had been
5
implemented throughout T-Mobile’s operations, including its incentive
commission structure. This meant that sales representatives who received
advanced commissions for sales of prepaid accounts, which subsequently were
“deactivated” due to ninety days of inactivity during the 180-day commission
charge back period, would be charged back for those commissions. According to
testimony from William Steele, T-Mobile’s Manager of Sales Compensation
Design, while the company did not formally amend the compensation program
document to include this supplementation to the definition of “deactivation,” T-
Mobile informed its sales force of this new business rule and its potential impact
on sales commissions, as it regularly did when it instituted similar procedural
modifications, through the transmission of “sales commission pieces,” including
conference calls, the company’s website, newsletters, bulletins, and formal and
informal in-person training.
B.
Vega filed this putative class action in Florida state court on December 29,
2005. The gravamen of his complaint is that, by charging back commissions
advanced on sales of “deactivated” prepaid service plans, T-Mobile violated the
terms of the compensation program, failed to pay commissions earned by the sales
representatives, and was unjustly enriched by retaining the benefit of its
6
employees’ services without fully compensating them for such services. Vega’s
complaint, however, does not expressly connect T-Mobile’s alleged payment
obligations to any particular contract, including the written compensation program.
Indeed, the complaint does not even mention the 2004 Sales Incentive
Compensation Program. Instead, with respect to its prepaid-related claims, the
complaint simply alleges: (1) that, because prepaid customers paid up-front for
their service, T-Mobile “bore no risk of non-payment”; (2) that when T-Mobile
charged its employees back for commissions on prepaid plans, “even though T-
MOBILE received the full benefit of its agreement with the prepaid plan
customers, T-MOBILE’s commission based employees lost the benefits of those
sales and the resulting commissions”; and (3) that “T-MOBILE has unfair [sic] and
unjustly profited from its internal systems error by unduly charging back its
employees on the prepaid plans and retaining its employee’s [sic] wages for its
own use and benefit.”
The complaint contains two counts: Count I, “unpaid wages,” and Count II,
unjust enrichment. Both counts seek damages for sales commissions that Vega
claims T-Mobile improperly withheld or charged back from its employees.2
Furthermore, assuming or implying (though never expressly alleging in the
2
The complaint does not expressly seek injunctive or declaratory relief.
7
complaint) that all T-Mobile sales employees were subject to the same
compensation program, Vega brought his action on behalf of, and sought
certification of, a putative nationwide class defined as follows:
All employees of T-Mobile who received, or were entitled to receive,
commissions for the sale of T-Mobile prepaid cellular telephone plans
who did not receive their commissions or were charged back by T-
Mobile for their commissions between the commencement of the
statute of limitations through the date that the Court certifies this suit
as a class action.
Despite the incomplete and ambiguous allegations in the complaint, Vega
essentially argued in the district court (and in this court) that the written
compensation program document exclusively and uniformly controlled the
compensation of T-Mobile sales representatives, that the compensation program
did not provide for commission charge backs on prepaid service plans, and that, by
implementing its business rule, T-Mobile unfairly and unilaterally attempted to re-
write the compensation agreement with respect to prepaid plans.
On March 6, 2006, T-Mobile removed the case on the basis of diversity
jurisdiction pursuant to 28 U.S.C. § 1332, as amended by the Class Action Fairness
Act (CAFA).3 On January 9, 2007, following the close of all discovery (including
3
The CAFA provides original federal jurisdiction over any civil class action in which:
(1) the matter in controversy exceeds the sum or value of $5,000,000, exclusive of interest and
costs; (2) the putative class includes at least 100 members; and (3) any member of the putative
class of plaintiffs is a citizen of a state different from any defendant. 28 U.S.C. §§ 1332(d)(2),
1332(d)(5)(B).
8
merits discovery) and more than a year after filing the complaint, Vega moved for
class certification. On the same day, although the district court had established a
May 15, 2006 deadline for amending the pleadings, Vega moved to amend his
complaint to add a count for breach of contract, specifically referencing the
compensation program. In his class certification motion, in addition to the
nationwide class definition initially pled, Vega alternatively sought certification of
a subclass consisting of T-Mobile employees who worked in Florida.4 Vega also
expressly excluded T-Mobile’s current employees, among others, from the class
definitions proposed in his motion. T-Mobile filed an opposition to Vega’s motion
for class certification, and, while that motion was pending, it also filed a motion for
summary judgment.
On April 24, 2007, the district court denied Vega’s motion for leave to
amend his complaint – which the court described as having been “filed in the
fourth quarter of the game, with the minutes ticking down to conclusion” – because
it found that such untimely amendment “would prejudice the Defendant as
discovery has ended, and would cause undue delay if discovery were re-opened.”
4
Vega included this new putative Florida subclass or alternative class in his proposed
amended complaint. In his class certification motion, he stated that, should the district court
deny leave to amend the complaint, he would revert to the class definition and claims pled in the
initial complaint.
9
On May 8, 2007 – just six days before the case was scheduled to go to trial –
the district court entered its order on class certification and summary judgment.
The district court found two problems with the class definition proposed by Vega:
(1) the putative nationwide class lacked commonality due to variations in the
contract and employment laws of the fifty states; and (2) as the factual allegations
in the complaint focused on charge backs of commissions already paid, but
indicated nothing about any failure to pay commissions in the first instance, the
inclusion in the class of T-Mobile “employees . . . who . . . were entitled to
receive[] commissions . . . who did not receive their commissions” would implicate
claims falling outside the scope of the complaint, as pled, and, thus, failed the
typicality requirement. Nevertheless, pursuant to Rule 23(b)(3) of the Federal
Rules of Civil Procedure, the district court certified the following modified class:
All T-Mobile employees in Florida who received commissions for the
sale of T-Mobile prepaid cellular telephone plans, but were charged
back by T-Mobile for those commissions between the commencement
of the statute of limitations through the date that the Court certified
this suit as a class action. Excluded from the class are . . . the officers,
directors, agents, servants, or employees of Defendants [sic] . . . .
In the same order, the district court also denied T-Mobile’s motion for summary
judgment, finding that Vega adequately pled claims for “breach of an employment
contract and unjust enrichment” and that the evidence revealed disputed issues of
material fact.
10
We granted T-Mobile’s petition, pursuant to Rule 23(f) of the Federal Rules
of Civil Procedure,5 for interlocutory review of the district court’s class
certification order.6
II.
We review a district court’s grant of class certification for abuse of
discretion. Klay v. Humana, Inc., 382 F.3d 1241, 1251 (11th Cir. 2004).
“However, with great power comes great responsibility; the awesome power of a
5
Rule 23(f) provides:
Appeals. A court of appeals may permit an appeal from an order granting or
denying class-action certification under this rule if a petition for permission to
appeal is filed with the circuit clerk within 10 days after the order is entered. An
appeal does not stay proceedings in the district court unless the district judge or
the court of appeals so orders.
Fed. R. Civ. P. 23(f). As this interlocutory appeal is before us pursuant to Rule 23(f), our
jurisdiction is limited to review of the district court’s class certification decision, and, therefore,
we do not address the district court’s denial of T-Mobile’s motion for summary judgment.
Franze v. Equitable Assurance, 296 F.3d 1250, 1252 (11th Cir. 2002). Our silence on this
subject, however, should in no way be construed as approval of the district court’s summary
judgment ruling.
6
The same day it issued its class certification order, the district court granted motions by
both parties to continue the scheduled May 14, 2007 trial date and, two days later, re-set the trial
for the two-week period commencing May 29, 2007. The court denied plaintiff’s motion to
continue the trial pending additional merits discovery. On May 22, 2007 – the day before the re-
scheduled pre-trial calendar call – the district court granted T-Mobile’s motion to stay
proceedings and administratively closed the case pending this appeal, with the trial to be re-set
“with all expediency” following disposition of this appeal. In the interim, per the order of the
district court, the parties have filed joint notices in the district court every thirty days to apprise
the court of the status of this appeal. The stay order specifically provided that the stay did not
affect plaintiff’s obligations regarding notice to the members of the certified class.
11
district court must be ‘exercised within the framework of rule 23.’” Id. (quoting
Castano v. Am. Tobacco Co., 84 F.3d 734, 740 (5th Cir. 1996)). In this regard,
A district court abuses its discretion if it applies an incorrect legal
standard, follows improper procedures in making the determination,
or makes findings of fact that are clearly erroneous. A district court
may also abuse its discretion by applying the law in an unreasonable
or incorrect manner. Finally, an abuse of discretion occurs if the
district court imposes some harm, disadvantage, or restriction upon
someone that is unnecessarily broad or does not result in any
offsetting gain to anyone else or society at large. In making these
assessments, we review the district court’s factual determinations for
clear error, and its purely legal determinations de novo.
Id. (citation omitted). “The burden of proof to establish the propriety of class
certification rests with the advocate of the class.” Valley Drug Co. v. Geneva
Pharms., Inc., 350 F.3d 1181, 1187 (11th Cir. 2003).
III.
“For a district court to certify a class action, the named plaintiffs must have
standing, and the putative class must meet each of the requirements specified in
Federal Rule of Civil Procedure 23(a), as well as at least one of the requirements
set forth in Rule 23(b).”7 Klay v. Humana, Inc., 382 F.3d 1241, 1250 (11th Cir.
7
In its entirety, Federal Rule of Civil Procedure 23(a) and (b) states:
(a) Prerequisites. One or more members of a class may sue or be sued as
representative parties on behalf of all members only if:
(1) the class is so numerous that joinder of all members is
impracticable;
(2) there are questions of law or fact common to the class;
(3) the claims or defenses of the representative parties are typical
12
2004). Under Rule 23(a), every putative class first must satisfy the prerequisites of
“numerosity, commonality, typicality, and adequacy of representation.” See Fed.
R. Civ. P. 23(a); Valley Drug Co. v. Geneva Pharms., Inc., 350 F.3d 1181, 1187-88
of the claims or defenses of the class; and
(4) the representative parties will fairly and adequately protect the
interests of the class.
(b) Types of Class Actions. A class action may be maintained if Rule 23(a) is
satisfied and if:
(1) prosecuting separate actions by or against individual class
members would create a risk of:
(A) inconsistent or varying adjudications with
respect to individual class members that would
establish incompatible standards of conduct for the
party opposing the class; or
(B) adjudications with respect to individual class
members that, as a practical matter, would be
dispositive of the interests of the other members not
parties to the individual adjudications or would
substantially impair or impede their ability to
protect their interests;
(2) the party opposing the class has acted or refused to act on
grounds that apply generally to the class, so that final injunctive
relief or corresponding declaratory relief is appropriate respecting
the class as a whole; or
(3) the court finds that the questions of law or fact common to
class members predominate over any questions 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 individually
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
concentrating the litigation of the claims in the
particular forum; and
(D) the likely difficulties in managing a class
action.
13
(11th Cir. 2003). In this case, the district court certified the class pursuant to Rule
23(b)(3), which additionally requires findings: (1) that common questions of law
or fact predominate over questions affecting only individual class members
(“predominance”); and (2) that a class action is superior to other available methods
for adjudicating the controversy (“superiority”).8 See Fed. R. Civ. P. 23(b)(3);
Klay, 382 F.3d at 1251.
“A district court must conduct a rigorous analysis of the rule 23 prerequisites
before certifying a class.” Castano v. Am. Tobacco Co., 84 F.3d 734, 740 (5th Cir.
1996); see also Martinez-Mendoza v. Champion Int’l Corp., 340 F.3d 1200, 1216
n.37 (11th Cir. 2003) (noting a trial court’s “independent obligation [under Rule
8
Vega’s complaint, in the section entitled “Class Action Allegations,” contains language
that appears to invoke Rule 23(b)(1) as an alternative basis for class certification:
The prosecution of separate actions by individual members of the Class would
create a risk of inconsistent or varying adjudications concerning individual
members of the Class which would establish incompatible standards of conduct
for the party opposing the Class; and adjudication with respect to individual
members of the Class which would, as a practical matter, be dispositive of the
interests of other members not parties to the adjudication, or substantially impair
or impede the ability of other members of the Class who are not parties to the
adjudications to protect their interests.
Vega, however, did not move for class certification under Rule 23(b)(1). Additionally, in his
class certification motion, Vega argued that certification of an injunctive relief class would be
appropriate under Rule 23(b)(2), but the complaint neither alleges the elements of a Rule
23(b)(2) class nor expressly seeks injunctive relief. Moreover, monetary relief – which Vega’s
complaint clearly and predominantly seeks – is only available in a Rule 23(b)(2) class action if it
is incidental to the requested injunctive or declaratory relief. Murray v. Auslander, 244 F.3d
807, 812 (11th Cir. 2001). In view of the foregoing, and because the district court only certified
a class under Rule 23(b)(3), we address only that subsection of the class action rule.
14
23(c)(1)] to decide whether an action was properly brought as a class action”).
“Although the trial court should not determine the merits of the plaintiffs’ claim at
the class certification stage, the trial court can and should consider the merits of the
case to the degree necessary to determine whether the requirements of Rule 23 will
be satisfied.” Valley Drug, 350 F.3d at 1188 n.15 (citing Gen. Tel. Co. of the
Southwest v. Falcon, 457 U.S. 147, 160, 102 S. Ct. 2364, 2372, 72 L. Ed. 2d 740
(1982)); see Coopers & Lybrand v. Livesay, 437 U.S. 463, 469 & n.12, 98 S. Ct.
2454, 2458 & n.12, 57 L. Ed. 2d 351 (1978) (“[t]he class determination generally
involves considerations that are ‘enmeshed in the factual and legal issues
comprising the plaintiff’s cause of action.’ . . . ‘The more complex determinations
required in Rule 23(b)(3) class actions entail even greater entanglement with the
merits.’”) (emphasis and citations omitted); Huff v. N.D. Cass Co. of Ala., 485
F.2d 710, 714 (5th Cir. 1973) (en banc) (“It is inescapable that in some cases there
will be overlap between the demands of [Rule] 23(a) and (b) and the question of
whether plaintiff can succeed on the merits.”);9 Castano, 84 F.3d at 744 (“Going
beyond the pleadings is necessary, as a court must understand the claims, defenses,
9
In Bonner v. City of Prichard, 661 F.2d 1206, 1209 (11th Cir. 1981) (en banc), this
court adopted as binding precedent all decisions of the former Fifth Circuit handed down prior to
October 1, 1981.
15
relevant facts, and applicable substantive law in order to make a meaningful
determination of the certification issues.”).
We review the procedures the district court undertook in conducting the
Rule 23 analysis, whether the conclusions it reached were within its discretion
given the mandates of Rule 23, and whether Vega’s complaint, as pled, can sustain
class action certification under Rule 23. Finding deficiencies on all three scores,
we vacate the class certification and remand with the instruction that Vega’s claims
proceed individually.
A.
Initially, we examine whether the factual record provided the district court
with an adequate basis to find that the class, as certified, meets Rule 23(a)’s
numerosity requirement, i.e., whether “the class is so numerous that joinder of all
members is impracticable.” Fed. R. Civ. P. 23(a)(1). The district court, after first
noting that, “as a general rule, one may say that less than twenty-one is inadequate
[for a finding of numerosity], more than forty is adequate, and numbers falling in
between are open to judgment based on other factors,” concluded “that well over
forty individuals fall within the class definition adopted by this Court.” See Cox v.
Am. Cast Iron Pipe Co., 784 F.2d 1546, 1553 (11th Cir. 1986) (citing 3B Moore’s
Fed. Prac. ¶ 23.05[1] at n. 7 (1978)); see also Kilgo v. Bowman Transp., Inc., 789
16
F.2d 859, 878 (11th Cir. 1986) (affirming certification of a class of “at least
thirty-one individual class members”). But see Crawford v. Western Elec. Co.,
614 F.2d 1300, 1305 (5th Cir. 1980) (“We certainly cannot say that a class of 34
satisfies the numerosity requirements as a matter of law.”).
Vega, in his class certification motion, cited only the deposition testimony of
William Steele, T-Mobile’s Manager of Sales Compensation Design, in support of
his argument for numerosity. In his testimony, Steele agreed that the number of
retail sales associates employed by T-Mobile between the years 2002 and 2006 was
“in the thousands.”10 While this company-wide testimony easily would constitute a
sufficient basis for a finding of numerosity as it relates to a nationwide class, the
district court, significantly, certified a Florida-only class. We have noted that,
“[a]lthough mere allegations of numerosity are insufficient to meet this
prerequisite, a plaintiff need not show the precise number of members in the class.”
Evans v. U.S. Pipe & Foundry Co., 696 F.2d 925, 930 (11th Cir. 1983).
Nevertheless, a plaintiff still bears the burden of making some showing, affording
the district court the means to make a supported factual finding, that the class
actually certified meets the numerosity requirement. Vega has not cited, and we
cannot locate in the record, any evidence whatsoever (or even an allegation) of the
10
Steele also testified that T-Mobile has “over 5000 associates, a thousand stores.” The
time frame during which that company-wide testimony was accurate, however, is unclear.
17
number of retail sales associates T-Mobile employed during the class period in
Florida who would comprise the membership of the class, as certified by the
district court.11
Yes, T-Mobile is a large company, with many retail outlets, and, as such, it
might be tempting to assume that the number of retail sales associates the company
employed in Florida during the relevant period can overcome the generally low
hurdle presented by Rule 23(a)(1). However, a plaintiff still bears the burden of
establishing every element of Rule 23, see Valley Drug, 350 F.3d at 1187, and a
district court’s factual findings must find support in the evidence before it. In this
case, the district court’s inference of numerosity for a Florida-only class without
the aid of a shred of Florida-only evidence was an exercise in sheer speculation.
Accordingly, the district court abused its discretion by finding the numerosity
requirement to be satisfied with respect to a Florida-only class when the record is
utterly devoid of any showing that the certified class of T-Mobile sales
11
Additionally, Vega concedes on appeal that, for commonality and typicality purposes,
the class should have been limited only to T-Mobile sales employees who, like he, were subject
to the 2004 Sales Incentive Compensation Program, as opposed to any other compensation plan.
While such a modification would likely constitute an improvement in the class definition, the
district court did not impose this limitation on the class actually certified, and, for reasons
explained in part III.B.2, infra, such a modification on remand would not salvage the
certifiability of this class. However, if the district court had limited the class in this way, we
note that there is also no showing by Vega or finding by the district court that a class comprised
of T-Mobile’s Florida sales representatives subject to the 2004 compensation program would
satisfy the numerosity requirement.
18
representatives “in Florida” is “so numerous that joinder of all members is
impracticable.” Fed. R. Civ. P. 23(a)(1).12
B.
We next turn to the question of commonality under Rule 23(a)(2). After
observing that the district court improperly conflated the commonality
determination with a review for predominance pursuant to Rule 23(b)(3), and in
the process failed to make a sufficient finding of either, we explain why Vega’s
claims, as pled, cannot satisfy the commonality or predominance requirements.
1.
The district court described the commonality inquiry as assessing “whether
issues that are subject to generalized inquiry, and thus applicable to the class as a
whole, predominate over issues that are amenable only to individualized inquiry.”
Initially, this is a clear misreading of Rule 23.
12
We note that the plaintiff’s failure to make a showing of numerosity with respect to
the Florida-only class, which gives rise to the possibility that there are fewer than 100 members
of the newly-narrowed Florida-only class, does not divest the federal courts of subject matter
jurisdiction under the CAFA. See 28 U.S.C. § 1332(d)(5)(B). Even if it were later found that
the narrowed, Florida-only class numbers fewer than 100, the § 1332(d)(5)(B) limitation applies
only to“proposed” plaintiff classes (as opposed to classes actually certified or that go to trial);
jurisdictional facts are assessed at the time of removal; and post-removal events (including non-
certification, de-certification, or severance) do not deprive federal courts of subject matter
jurisdiction. See Cooper v. R.J. Reynolds Tobacco Co., 586 F. Supp. 2d 1312, 1318-22 (M.D.
Fla. 2008) (construing mass action provision of the CAFA), rev. denied, No. 08-90021 (11th Cir.
Oct. 28, 2008); S. Rep. No. 109-14, at 70-71 (2005), as reprinted in 2005 U.S.C.C.A.N. 3, 66
(“Current law (that [the CAFA] does not alter) is also clear that, once a complaint is properly
removed to federal court, the federal court’s jurisdiction cannot be ‘ousted’ by later events.”);
see also Bullard v. Burlington N. Santa Fe Ry. Co., 535 F.3d 759, 762 (7th Cir. 2008).
19
The commonality requirement demands only that there be “questions of law
or fact common to the class.” Fed. R. Civ. P. 23(a)(2). This part of the rule “does
not require that all the questions of law and fact raised by the dispute be common,”
Cox, 784 F.2d at 1557, or that the common questions of law or fact “predominate”
over individual issues. Here, however, the district court took this relatively light
burden and appears to have merged it with the Rule 23(b)(3) predominance
requirement, albeit without saying so directly.
The district court’s certification order was rather opaque about the way in
which the court conducted its Rule 23 analysis. We assume for three reasons that
the court attempted to collapse its predominance analysis into the commonality
assessment – all under a section heading entitled “Commonality.” First, as
mentioned, the court described its commonality assessment as a determination of
whether “issues that are subject to generalized inquiry . . . predominate over issues
that are amenable only to individualized inquiry” (emphasis added). Second, the
section of the district court’s order entitled “Rule 23(b) and the Class Definition”
– where we would expect to see a discussion of Rule 23(b)(3) predominance –
refers only to superiority and contains no mention of predominance at all.
Therefore, if the court did not attempt to include its predominance assessment in its
discussion of commonality, then it entirely neglected to consider the critical
20
element of predominance – a situation that would constitute an obvious abuse of
discretion and clear reversible error.13 Jackson v. Motel 6 Multipurpose, Inc., 130
F.3d 999, 1006 (11th Cir. 1997) (“Rule 23(b)(3), however, imposes two additional
requirements, and increased efficiency is only one of them. Predominance is the
other . . . .”). Third, the district court’s language purporting to find commonality
among a Florida-only class has the distinct ring of a predominance determination:
This entire dispute centers essentially on the meaning and justifiable
applicability of one compensation scheme – the T-Mobile Sales
Incentive Compensation Program – purportedly applied uniformly by
T-Mobile to its employees. As such, the fact-finder’s adjudication of
the disputes concerning this compensation program will resolve the
liability issues for all members of the class.
Accordingly, the district court’s apparent intermingling of the commonality and
predominance inquiries demonstrates, at best, imprecision in the organization of
the class certification order or, at worst, a fundamental misapplication of Rule 23.
Either way, the district court’s Rule 23 methodology causes us great concern.
13
We do, nonetheless, have some reason to believe that the district court may have
completely omitted an analysis of predominance qua predominance. The court set forth the
general Rule 23 standard as follows:
To sustain this burden [of establishing the propriety of class certification], the
Plaintiff must satisfy all four Rule 23(a) requirements – numerosity,
commonality, typicality, and adequacy of representation – and at least one Rule
23(b) requirement, such as showing that a class action is superior to other
available methods for the fair and efficient adjudication of the controversy.
Predominance, of course, must accompany the reference to superiority under Rule 23(b)(3).
Jackson v. Motel 6 Multipurpose, Inc., 130 F.3d 999, 1006 (11th Cir. 1997). The court,
however, nowhere mentioned predominance as part of the checklist of Rule 23 elements.
21
On the one hand, it arguably could be said that the district court implicitly
found both commonality and predominance. After all, the court effectively
appears to have made a predominance determination, notwithstanding its
appearance in the section of the order on “Commonality” and the absence of an
invocation of Rule 23(b)(3) in that section, and such a finding – that “questions of
law or fact common to the class members predominate over any question affecting
only individual members,” Fed. R. Civ. P. 23(b)(3) – necessarily requires an
antecedent finding that there is at least one common question of law or fact in the
first place.
Nevertheless, the “rigorous analysis” required of a district court under Rule
23 does not allow us to be so generous or forgiving. Castano, 84 F.3d at 740.
Here, the district court misstated the commonality requirement as the
predominance analysis and, in the process, elided (at best) a direct finding of
commonality. Indeed, although it ambiguously alluded to “disputes concerning
this compensation program” and the program’s “meaning and justifiable
applicability,” the court never actually identified a single specific common
question of law or fact. Furthermore, while the court arguably made an effective
predominance determination, it managed to do so – as if by accident – without a
single reference to Rule 23(b)(3) and with an all-too-cursory discussion of the
22
relevant facts. Rule 23 demands significantly greater analytical rigor and
precision; backing into the requisite findings, and relying on a reviewing court to
connect the dots, is not enough. We therefore find that the district court abused its
discretion by following improper procedures in making its determinations, to the
extent it made them at all, with respect to commonality and predominance.
2.
In addition, even if we were to deem adequate the district court’s
commonality and predominance methodologies, the court’s substantive application
of these Rule 23 requirements in this case was unreasonable enough to constitute
an abuse of discretion.
Vega, on behalf of the putative class, asserted two claims in his complaint:
“unpaid wages” and unjust enrichment. For the complaint to support class
certification as to commonality and predominance, there must be common
questions of law or fact among the class relating to one or both of these substantive
claims, and, in addition, those common questions must predominate such that they
“ha[ve] a direct impact on every class member’s effort to establish liability” that is
more substantial than the impact of individualized issues in resolving the claim or
claims of each class member. Klay, 382 F.3d at 1255 (citation omitted; alteration
in original). “Under the Rule 23(a)(2) commonality requirement, a class action
23
must involve issues that are susceptible to class-wide proof.” Murray v.
Auslander, 244 F.3d 807, 811 (11th Cir. 2001). Even if the court can identify
common questions of law or fact, however, “[t]he predominance inquiry . . . is ‘far
more demanding’ than Rule 23(a)’s commonality requirement.” Rutstein v. Avis
Rent-A-Car Sys., Inc., 211 F.3d 1228, 1233 (11th Cir. 2000) (quoting Jackson, 130
F.3d at 1005, which quotes, in turn, Amchem Prods., Inc. v. Windsor, 521 U.S.
591,623-24, 117 S. Ct. 2231, 2250, 138 L. Ed. 2d 689 (1997)).
“Whether an issue predominates can only be determined after considering
what value the resolution of the class-wide issue will have in each class member’s
underlying cause of action.” Klay, 382 F.3d at 1255 (quoting Rutstein, 211 F.3d at
1234). In practical terms, we have described the test for predominance as follows:
Where, after adjudication of the classwide issues, plaintiffs must still
introduce a great deal of individualized proof or argue a number of
individualized legal points to establish most or all of the elements of
their individual claims, such claims are not suitable for class
certification under Rule 23(b)(3) . . . . [I]f common issues truly
predominate over individualized issues in a lawsuit, then the addition
or subtraction of any of the plaintiffs to or from the class [should not]
have a substantial effect on the substance or quantity of evidence
offered. Put simply, if the addition of more plaintiffs to a class
requires the presentation of significant amounts of new evidence, that
strongly suggests that individual issues (made relevant only through
the inclusion of these new class members) are important. If, on the
other hand, the addition of more plaintiffs leaves the quantum of
evidence introduced by the plaintiffs as a whole relatively
undisturbed, then common issues are likely to predominate.
24
Klay, 382 F.3d at 1255 (quotations omitted).
At the threshold, the parties dispute whether Florida law even recognizes an
independent cause of action for “unpaid wages.” T-Mobile argues that Vega
asserted the unpaid wages claim exclusively under Fla. Stat. § 448.08, a section of
Florida’s labor statutes that provides for the payment of attorneys’ fees and costs to
prevailing parties in actions for unpaid wages but that does not, itself, create an
independent cause of action.14 See Edwards v. Niles Sales & Serv., Inc., 439 F.
Supp. 2d 1202, 1208 n.6 (S.D. Fla. 2006) (noting that an action for unpaid or back
wages, for which § 448.08 may permit recovery of fees and costs, must be
“brought pursuant to some other law”). Vega responds that his unpaid wages claim
“is based on a breach of the compensation agreement and on common law”; in
short, that it is basically a breach of contract claim.
The common law concerning breach of contract could certainly constitute
one form of the “some other law” that could undergird an action for unpaid wages;
however, we see no indication in Florida law that an unpaid wages claim, in and of
itself, is necessarily the equivalent of a breach of contract claim. Rather, actions
for unpaid wages are typically pled as breach of contract claims wherein the
14
Section 448.08 provides, in its entirety, “The court may award to the prevailing party
in an action for unpaid wages costs of the action and a reasonable attorney’s fee.” Fla. Stat. §
448.08. The statute resides in part I (“Terms and Conditions of Employment”) of chapter 448
(“General Labor Regulations”) of title XXXI (“Labor”) of the Florida Statutes.
25
agreement in question happens to be an employment or compensation contract.
Indeed, Vega implicitly acknowledged that unpaid wages and breach of contract
claims are distinct, and at least that the latter does not fully encompass the former,
when he attempted to amend his complaint to add a count for breach of contract
and to plead facts – for the first time – concerning the 2004 compensation program,
which attempted amendments the district court rejected.15 Therefore, although
Vega’s nominal “unpaid wages” claim includes language about “breach[ing] the
agreement” and “the breach,” he, in his operative complaint, neither pled a claim
for breach of contract nor identified a contract or agreement that T-Mobile
purportedly breached. As such, Vega’s own pleading precludes him from relying
on a breach of contract theory to support his “unpaid wages” claim.
Nevertheless, Vega essentially argues that we should treat his unpaid wages
claim as a breach of contract claim. The district court, notwithstanding its express
denial of leave to amend the complaint to add a breach of contract claim,
apparently accepted this argument, as the court identified Vega’s state-law-based
claims as “breach of contract and unjust enrichment” and proceeded to conduct its
15
It is noteworthy that, in denying leave to amend the complaint, the district court in no
way suggested that Vega’s initial complaint, and particularly its “unpaid wages” count, was
somehow sufficient to state an effective claim for breach of contract, such that the proposed
amendment would have been unnecessary or redundant. Rather, the only reasons the court gave
for denying leave to amend were the untimeliness of the attempt to amend, the prejudice the
amendment would cause T-Mobile, and the undue delay that would result from reopening
discovery.
26
Rule 23 analysis as if Vega had pled the very breach of contract claim that the
court had disallowed just two weeks earlier. We have no ready explanation for this
display of cognitive dissonance by the district court, and we strongly disapprove of
this exercise in judicial rewriting of the plaintiff’s pleading. In any event, although
the legal adequacy of the “unpaid wages” claim and allegations pled in Vega’s
complaint is certainly suspect, even if we were to consider the “unpaid wages”
count as one for breach of contract – the only common law basis Vega advances
for the claim – the allegations in his complaint cannot satisfy the commonality and
predominance elements required for class certification.
For a breach of contract claim, Florida law requires the plaintiff to plead and
establish: (1) the existence of a contract; (2) a material breach of that contract; and
(3) damages resulting from the breach. See, e.g., Friedman v. N.Y. Life Ins. Co.,
985 So. 2d 56, 58 (Fla. 4th DCA 2008). To prove the existence of a contract, a
plaintiff must plead: (1) offer; (2) acceptance; (3) consideration; and (4) sufficient
specification of the essential terms. St. Joe Corp. v. McIver, 875 So. 2d 375, 381
(Fla. 2004) (citing W.R. Townsend Contracting, Inc. v. Jensen Civil Constr., Inc.,
728 So. 2d 297, 302 (Fla. 1st DCA 1999)). It is to these elements that we must
address the commonality and predominance inquiries, and Vega’s complaint fails
on both points.
27
Most importantly, Vega has not shown commonality under a breach of
contract theory because he has not alleged in his complaint the existence of a
common contract under which T-Mobile employed all class members. As such, he
could not utilize identical evidence on behalf of every member of the class to prove
offer, acceptance, consideration, or the essential terms. Instead, these mandatory
elements of each class member’s claim depend on such individualized facts and
circumstances as when a given employee was hired, what the employee was told
(and agreed to) with respect to compensation rules and procedures at the time of
hiring, the employee’s subjective understanding of how he would be compensated
and the circumstances under which his compensation might be subject to charge
backs, and when and how any pertinent part of the employee’s compensation
agreement or understanding thereof may have changed during the course of that
employee’s tenure at T-Mobile. Without the existence of a common contract, of
course, there can also be no commonality with respect to whether T-Mobile’s
conduct relating to commission charge backs, even if undertaken pursuant to a
uniform policy, constituted a breach of every class member’s particular
employment contract, whether any such breach was material for every class
member, or whether each class member suffered cognizable damages as a result.
28
Lacking commonality, the allegations in Vega’s complaint obviously must fail the
predominance test as well.
Vega argues, and the district court seems to have agreed, that the common
contract at issue is the 2004 compensation program. This agreement, however, as
we have already noted, is not mentioned – expressly or by description or other
implication – in Vega’s complaint. Instead, Vega sought certification of a broad
class of all T-Mobile employees “who received, or were entitled to receive,
commissions for the sale of T-Mobile prepaid cellular telephone plans who did not
receive their commissions or were charged back by T-Mobile for their
commissions” regardless of the specific compensation contract or contracts under
which any given employee worked. While the district court limited the certified
class to Florida employees who received advanced commissions on prepaid plans
in the first instance, it defined the class in terms similarly disconnected from any
specific compensation program, including all employees “who received
commissions for the sale of T-Mobile prepaid cellular telephone plans, but were
charged back by T-Mobile for those commissions” (but specifically excluding
current employees). Therefore, the 2004 compensation program is unavailable as
the source of common issues given the pleading and posture of the case.
29
Regardless, there is no dispute that the class certified by the district court
includes members who either were never subject to the 2004 compensation
program or were also subject to other policies during portions of their tenures, so
issues involving that plan alone are not common to the entire class. In short, the
district court was demonstrably incorrect when it concluded that “the fact-finder’s
adjudication of the disputes concerning this [2004] compensation program will
resolve the liability issues for all members of the class.”
On appeal, Vega has conceded that the class should be modified, on remand,
such that it “not include members who were paid under compensation plans other
than the 2004 Sales Incentive Compensation Program.” The suggestion appears to
be that the class’s commonality and predominance problems would vanish if the
claims were limited to those relating to the 2004 compensation program. We
disagree that such a modification would make a difference.
First, Vega’s suggestion that the 2004 compensation program could serve as
the relevant common contract for a class limited to employees who labored under
that policy is stymied by applicable state law. “It is well established Florida law
that policy statements contained in employment manuals do not give rise to
enforceable contract rights in Florida unless they contain specific language which
expresses the parties’ explicit mutual agreement that the manual constitutes a
30
separate employment contract.” Quaker Oats Co. v. Jewell, 818 So. 2d 574, 576-
77 (Fla. 5th DCA 2002) (finding policy statements in employment manual relating
to overtime pay did not constitute the terms of a contract of employment; citing
Muller v. Stromberg Carlson Corp., 427 So. 2d 266 (Fla. 2d DCA 1983)); see also
OneSource Facility Servs., Inc. v. Mosbach, 508 F. Supp. 2d 1115, 1120-24 (M.D.
Fla. 2007) (holding that employer’s compensation plan did not create enforceable
contract right in employee to bonus compensation, noting that employer retained
authority and discretion to amend, terminate, or modify the plan at any time); Sleit
v. Ricoh Corp., No. 8:07-cv-724-T-23TBM, 2007 WL 2565967, at *1 (M.D. Fla.
Aug. 31, 2007) (“Employee manuals such as handbooks and memoranda – even
those that include compensation policies – are unilateral policy statements and do
not contractually bind employers.”).
T-Mobile could not have been clearer that it did not intend its 2004
compensation program to create enforceable contract rights or to constitute a
separate, mutually-agreed-upon employment contract. The front cover of the
compensation program document expressly stated, “This document and any oral,
written or electronic communication related to the subject matter contained in this
document are not intended and shall not be read to create any express or implied
contract or promise of specific treatment or benefits in specific situations”
31
(emphasis added). Furthermore, it continued, “In T-Mobile’s sole discretion, this
document and the guidelines stated herein may be changed or discontinued at any
time without prior notice.” Additionally, the document cautioned, “T-Mobile
retains sole discretion to determine what transactions qualify for commission
payout.” In the written acknowledgment form that he signed and submitted upon
receiving the compensation program document, Vega expressly confirmed that he
read and understood these caveats. Therefore, under Florida law, the compensation
program cannot serve as a common contract even for a class narrowed to include
only employees subject to it.
Furthermore, even assuming arguendo that the compensation program could
be construed as a binding contract, which arguably could create common issues of
fact and law, the narrowed class would still lack predominance. T-Mobile
presented evidence in the form of affidavits from several sales employees who
attested to their understanding of the incentive compensation and charge back
procedures. These employees stated that, based on their training and other
information provided to them by the company, they were aware that advanced
commissions on prepaid sales were subject to charge back if the plans were
deactivated (including by virtue of ninety days of account inactivity per T-
Mobile’s business rule) within the 180-day post-activation charge back window.
32
Even positing a common contract, this testimony illustrates the existence of
significant individualized issues with respect to breach, materiality, and damages.
Sorting out and proving the claims, if any, of these class members, and others with
similar understandings (or, at least, understandings as substantially different from
the one Vega purports to have had), would require substantial individualized
evidence different from and in addition to that which Vega would proffer to
establish his own claim. See Klay, 382 F.3d at 1255.
Additionally, T-Mobile apparently would proffer individualized and varying
evidence to defend against claims of individual class members by showing what
they knew or should have known about the charge back procedures. See id. at
1254 (“In determining whether class or individual issues predominate in a putative
class action suit, we must take into account ‘the claims, defenses, relevant facts,
and applicable substantive law,’ to assess the degree to which resolution of the
classwide issues will further each individual class member’s claim against the
defendant.” (emphasis added; citation omitted)). Accordingly, even after the
resolution of any common issues generated by the compensation program,
significant questions concerning ultimate liability would remain for many class
members. As such, the common questions would not predominate.
33
Vega’s unjust enrichment claim also lacks commonality and predominance.
In Florida, “[t]he essential elements of a claim for unjust enrichment are: (1) a
benefit conferred upon a defendant by the plaintiff, (2) the defendant’s
appreciation of the benefit, and (3) the defendant’s acceptance and retention of the
benefit under circumstances that make it inequitable for him to retain it without
paying the value thereof.” Rollins, Inc. v. Butland, 951 So. 2d 860, 876 (Fla. 2d
DCA 2006); see Florida Power Corp. v. City of Winter Park, 887 So. 2d 1237,
1241 n.4 (Fla. 2004). Critical for present purposes, before it can grant relief on this
equitable claim, a court must examine the particular circumstances of an individual
case and assure itself that, without a remedy, inequity would result or persist. Due
to the necessity of this inquiry into the individualized equities attendant to each
class member, courts, including ours, have found unjust enrichment claims
inappropriate for class action treatment. See, e.g., Klay, 382 F.3d at 1267; Rollins,
951 So. 2d at 876-77; Ortiz v. Ford Motor Co., 909 So. 2d 479, 481 (Fla. 3d DCA
2005) (noting that “the equities surrounding each class member’s [interaction with
the defendant] is [sic] not the same”). In short, common questions will rarely, if
ever, predominate an unjust enrichment claim, the resolution of which turns on
individualized facts.
34
In the end, Vega’s unjust enrichment claim suffers from many of the same
commonality and predominance problems that beset Vega’s “unpaid wages” claim.
Cf. Klay, 382 F.3d at 1267. There is no evidence that the circumstances under
which T-Mobile accepted a benefit from each of the putative class members –
especially each employee’s awareness of T-Mobile’s applicable compensation
policies – were common; indeed, T-Mobile has presented affidavit evidence
suggesting that the circumstances were not common. Although Vega alleges he
did not know that his commissions for prepaid plans were subject to charge back,
the record indicates that many of his sales colleagues were well-versed in T-
Mobile’s procedures. Accordingly, whether or not a given commission charge
back was “unjust” will depend on what each employee was told and understood
about the commission structure and when and how commissions were “earned.”
Those employees who concede awareness that commissions advanced on the sale
of prepaid cellular plans that are later deemed deactivations (including due to
account inactivity) during the charge back window are not “earned,” but are
instead subject to charge back, cannot claim injustice when the company follows
its compensation policies as expected and understood. The uncommon and
individualized nature of this critical inquiry, and its foundational importance to the
35
liability determination for each class member, renders class certification
inappropriate.
C.
We next review the district court’s analysis of the Rule 23 requirement that
“the claims or defenses of the representative parties [be] typical of the claims or
defenses of the class.” Fed. R. Civ. P. 23(a)(3). “A class representative must
possess the same interest and suffer the same injury as the class members in order
to be typical under Rule 23(a)(3). [T]ypicality measures whether a sufficient nexus
exists between the claims of the named representatives and those of the class at
large.” Busby v. JRHBW Realty, Inc., 513 F.3d 1314, 1322 (11th Cir. 2008)
(quotations and internal citations omitted; alteration in original). Although
typicality and commonality may be related, we have distinguished the two
concepts by noting that, “[t]raditionally, commonality refers to the group
characteristics of the class as a whole, while typicality refers to the individual
characteristics of the named plaintiff in relation to the class.” Piazza v. Ebsco
Indus., Inc., 273 F.3d 1341, 1346 (11th Cir. 2001) (citing Prado-Steiman ex rel.
Prado v. Bush, 221 F.3d 1266, 1279 (11th Cir. 2000)).
36
1.
First, we find that the district court abused its discretion procedurally by
failing to conduct any typicality analysis of the class it ultimately certified. After
getting off to a promising start with respect to typicality by correctly describing the
requirement, noting typicality problems with the class proposed by Vega, and
shaving the acknowledged atypical components from the class definition, the
district court abruptly stopped short and neglected to provide any findings or
reasoning for why Vega’s claims are typical of those of the remaining class
members.
In its discussion of typicality, the district court first observed that “the
Plaintiff’s proposed statewide class definition serves up a mixed bag when
scrutinized in light of the typicality prong.”16 The court went on to find that
Vega’s class definition “overreache[d] a bit” in that it included T-Mobile
employees whose commissions were withheld (i.e., never paid) in the first
instance, when Vega’s complaint only contained allegations regarding
commissions that T-Mobile advanced and subsequently charged back. The
complaint said nothing about commissions that had never been paid at all.
16
By the time it reached its typicality discussion, the district court had already rejected
Vega’s proposed nationwide class in favor of a Florida-only class on account of the
commonality problems posed by a nationwide class’s implication of the varied contract and
employment laws of the 50 states.
37
Accordingly, finding that Vega could not “claim to have suffered the same harm as
individuals on behalf of whom he had averred nothing,”17 the court excluded from
the class definition employees who never received their commissions and limited
the remaining class to those employees, like Vega, alleging that T-Mobile
advanced and then charged back their commissions. We have no quarrel with the
district court’s typicality decision on this point.
But that was the end of the typicality analysis. The court did not even
attempt to describe whether and how Vega’s claims are typical of the remaining
class that it actually certified of T-Mobile employees “who received commissions
for the sale of T-Mobile prepaid cellular telephone plans, but were charged back by
T-Mobile for those commissions.” This utter failure to interrogate Vega’s claimed
typicality with respect to the certified class was an abuse of discretion that cannot
stand.
2.
In any event, had it conducted a proper typicality analysis on the remaining
class, the district court would have discovered that Vega’s claims are not typical of
the class he seeks to represent. As noted, Vega’s complaint contains no allegation
17
The district court based this conclusion both on a lack of Rule 23(a)(3) typicality and
a finding that Vega could not adequately represent such absent class members pursuant to Rule
23(a)(4).
38
of a common contract among all class members. Because of this, Vega’s claims
are not typical of the class’s for many of the same reasons as the class fails for lack
of commonality and predominance. See supra part III.B.2.
Vega concedes on appeal that his claims are not typical of those employees
who worked under compensation plans other than the 2004 compensation program.
Nevertheless, as with commonality and predominance, simply narrowing the class
definition to claims arising in connection with the 2004 compensation program
would not solve the typicality problem. First of all, such a modification would be
inconsistent with and unsupported by Vega’s complaint. The allegations in the
complaint are not limited to the 2004 compensation program – indeed, they do not
even mention it. The district court rejected Vega’s proposed amended complaint,
which sought to add references to the 2004 compensation program. Therefore, the
operative pleading in this case provides no basis for a class limited to claimants
under the 2004 compensation program.
Moreover, the claims Vega has asserted on behalf of the class depend on the
terms, conditions, and mutual understandings regarding compensation that each
class member had with T-Mobile. Without a common contract, it is impossible for
Vega to bring a case typical of all other class members. Rather, the court would
have to look to such individualized factors as each employee’s individual contract,
39
when he was hired, what he was told (and agreed to) at the time of hiring, his
subjective understanding of how he would be compensated and when charge backs
might occur, and when and how any material aspect of his agreement or
understanding of the agreement may have changed during his employment with T-
Mobile. See Moore v. Am. Fed’n of Television & Radio Artists, 216 F.3d 1236,
1241-42 (11th Cir. 2000) (doubting existence of typicality where “the district court
would have to examine each [class member’s] contract”).
Even treating the 2004 compensation program as a common contract does
not render Vega’s claims typical. For one thing, the class includes all classes of T-
Mobile employees who received sales commissions, regardless of job title or
position. The compensation program, however, contains different attachments,
ostensibly with different terms, for various specific positions within the company.
Vega received, and worked under, the compensation program for the retail sales
channel and that was applicable to retail sales representatives like him. His claims,
therefore, could not be typical of class members from other business units or
channels or even class members from the retail sales channel with different job
titles, all of whom were subject to divergent compensation rules and procedures
and may have received different information about the compensation policies.
40
Furthermore, T-Mobile’s affidavit evidence shows that, unlike Vega, many
class members were told about, and fully understood, how the charge back
procedure worked and that it applied to prepaid accounts that were deemed
deactivated (including by way of account inactivity) during the post-sale charge
back window. This evidence, just as with commonality and predominance,
highlights the individual variation in the claims and defenses applicable to each
class member and how those claims and defenses frequently will differ from
Vega’s individual case. This is particularly true on the unjust enrichment claim,
where such individualized facts concerning each employee’s knowledge of the
compensation policies and procedures will delineate the equities in a given case.
In sum, Vega’s claims are not typical of those of the certified class, and the
district court abused its discretion by applying the law in an unreasonable or
incorrect manner in finding otherwise. This shortcoming in the class is another
reason why class certification was inappropriate.
D.
The district court also found – albeit in extremely cursory fashion – that the
class satisfied Rule 23(b)(3). We next address this issue and conclude, once again,
that the district court abused its discretion.
41
Rule 23(b)(3) requires findings both (1) “that the questions of law or fact
common to class members predominate over any questions affecting only
individual members,” and (2) “that a class action is superior to other available
methods for fairly and efficiently adjudicating the controversy.” Fed. R. Civ. P.
23(b)(3). The rule sets forth four specific (though non-exclusive) considerations
pertinent to these findings:
(A) the class members’ interests in individually 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 concentrating the litigation
of the claims in the particular forum; and
(D) the likely difficulties in managing a class action.
Id.
Here, the district court engaged in virtually no Rule 23(b)(3) analysis at all.
In fact, the court’s entire discussion of Rule 23(b) consisted of the following:
Rule 23(b) may be satisfied in a number of ways. In present case
[sic], the foregoing reasons accommodate Rule 23(b) because class
litigation emerges as the superior method “for the fair and efficient
adjudication of [this] controversy.” Rule 23(b)(3).
This conclusory statement, which cannot truly be called analysis, is grossly
insufficient and easily rises to the level of an abuse of discretion.
First, while the district court’s discussion lightly touches on the superiority
requirement, it contains no mention whatsoever of predominance, which is perhaps
42
the central and overriding prerequisite for a Rule 23(b)(3) class. See Jackson, 130
F.3d at 1006 (“Rule 23(b)(3), however, imposes two additional requirements, and
increased efficiency is only one of them. Predominance is the other . . . .”). To the
extent that the district court may have attempted to engage in a predominance
assessment sub silencio in other portions of its order, we have already addressed
why its efforts were insufficient in part III.B, supra. This failure to address
predominance, along with the substantive absence of predominance with respect to
the certified class, is fatal to the class certification order in this case.18
Second, the district court did not engage in any meaningful superiority
analysis either. All it suggested was that a class action would be “the superior
method” on account of “the foregoing reasons.” “The foregoing reasons,” of
course, were nothing more than the district court’s reasons – themselves often
incomplete or outright unreasonable – for why the class met the various
requirements of Rule 23(a). By relying wholly on its Rule 23(a) findings, the
district court engaged in no independent Rule 23(b) analysis at all. The court did
not address any of the four factors bearing on the efficiency of a class action listed
18
This lack of predominance, of course, effectively ensures that, as a substantive matter,
a class action is almost certainly not “superior to other available methods for fairly and
efficiently adjudicating the controversy.” Fed. R. Civ. P. 23(b)(3).
43
in Rule 23(b)(3) or, for that matter, any other considerations.19 See Zinser v.
Accufix Research Inst., Inc., 253 F.3d 1180, 1190 (9th Cir.) (“In determining
superiority, courts must consider the four factors of Rule 23(b)(3).”), amended on
denial of reh’g, 273 F.3d 1266 (9th Cir. 2001). Allowing this class certification to
stand, therefore, would require us to find that satisfaction of Rule 23(a) alone is
enough to justify class certification. Such a holding would remove all independent
meaning and significance from Rule 23(b)’s requirements; indeed, it would
effectively read subsection (b) out of Rule 23. This we cannot do.
In this case, the fourth Rule 23(b)(3) factor – “the likely difficulties in
managing a class action” – raises particular concerns. Fed. R. Civ. P. 23(b)(3)(D).
Due to the central individualized issues discussed above that preclude findings of
commonality, typicality, or predominance, any trial of this case would require the
presentation of a substantial amount of evidence specific to each of an unknown
number of class members. This reality poses serious challenges to the efficiency
and manageability of a class action proceeding.
19
Although the factors listed in Rule 23(b)(3)(A)-(D) are important and generally should
inform courts’ analysis, we do not mean to go so far as to suggest that consideration of every
factor listed in Rule 23(b)(3)(A)-(D) is strictly mandatory in every case. The question of when
and to what extent such consideration is required is not squarely and unavoidably presented by
this appeal. Here, it is enough to observe that a complete failure to address these factors or any
other pertinent consideration when conducting a Rule 23(b)(3) inquiry is an abuse of discretion.
44
Yet Vega has done nothing to acknowledge these issues or propose a trial
plan that would feasibly address them, and the district court does not appear to
have given any meaningful consideration to how this case, with its individualized
claims and defenses, would be tried.20 See Robinson v. Tex. Auto. Dealers Ass’n,
387 F.3d 416, 425 (5th Cir. 2004) (“A court must consider ‘how a trial on the
alleged causes of action would be tried.’”) (quoting Castano, 84 F.3d at 752). By
putting off these issues until trial, or blinking them entirely, both Vega and the
district court ran an unnecessarily high risk of introducing needless and avoidable
complexity into an already complex case. This is why Rule 23 demands an early
consideration of class certification, including its practical implications for case
manageability, see Fed. R. Civ. P. 23(c)(1)(A), and the district court’s failure to
force a reckoning with these issues prior to the very precipice of trial provides
20
We do not mean to say that submission of a trial plan by the plaintiff is necessarily a
prerequisite, as a matter of law, for a finding of superiority in every case. See Feder v. Elec.
Data Sys. Corp., 429 F.3d 125, 139-40 (5th Cir. 2005). Nonetheless, a plaintiff seeking class
certification bears the burden of establishing each element of Rule 23, Valley Drug, 350 F.3d at
1187, which includes superiority in Rule 23(b)(3) cases, and courts must consider how a case
will be tried as part of the superiority assessment, Robinson v. Tex. Auto. Dealers Ass’n, 387
F.3d 416, 425 (5th Cir. 2004). Accordingly, the proposal of a workable trial plan will often go a
long way toward demonstrating that manageability concerns do not excessively undermine the
superiority of the class action vehicle. Moreover, there is a direct correlation between the
importance of a realistic, clear, detailed, and specific trial plan and the magnitude of the
manageability problems a putative class action presents. We therefore recommend that district
courts make it a usual practice to direct plaintiffs to present feasible trial plans, which should
include proposed jury instructions, as early as practicable when seeking class certification.
45
further support to our conclusion that the court abused its discretion in certifying
this class.21
The district court’s omission of an independent and substantial, let alone
rigorous, analysis of Rule 23(b)(3), in addition to the facts that Vega has not
established predominance and likely has not shown superiority, further
demonstrates that certification of this class was an abuse of discretion.22
IV.
For the foregoing reasons, we conclude that the district court abused its
discretion in certifying the class in this case by misapplying proper legal standards,
following improper procedures, and applying the law in an unreasonable and
incorrect manner. The district court’s errors infected both its procedural approach
as well as the conclusions it reached, and we further conclude that the complaint,
21
By delaying the class certification decision until shortly before trial, and also by
combining the class certification order with its disposition of T-Mobile’s motion for summary
judgment, the district court also made it more likely that the discrete issues involved in class
certification would become needlessly intertwined with the merits of the case dispositive motion.
The record suggests that this is indeed what happened in this case, as the parties’ arguments
surrounding the class certification issues tend to bleed into a deeper discussion of the merits than
is necessary to resolve the Rule 23 question. The district court could have prevented, or at least
reduced, this confusion by keeping the class certification determination both conceptually and
temporally distinct from its merits ruling on summary judgment.
22
T-Mobile also argues that the district court erred in finding Vega to be an adequate
class representative, pursuant to Rule 23(a)(4), due to evidence suggesting that Vega’s alleged
failure to disclose various facts in discovery renders him insufficiently credible to represent the
class in an adequate and effective manner. In light of the numerous other reasons for vacating
the class certification in this case, we decline to address, and express no opinion regarding, this
inherently fact-dependent argument.
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as pled, cannot sustain class action certification as a matter of law. Therefore, we
VACATE the district court’s class certification order and REMAND the case with
the instruction that Vega’s claims proceed individually.
VACATED AND REMANDED.
47