John Utne v. Home Depot U.S.A., Inc.

Background

John Utne brought a class action alleging violations of California wage-and-hour laws. The operative complaint asserted claims for unpaid hourly wages, inaccurate wage statements, untimely payment of wages at the end of employment, violation of California’s Unfair Competition Law, and civil penalties under California labor law.

The court had previously certified two classes. The Hourly Employee Class covered hourly-paid or non-exempt Home Depot employees in California who, among other things, worked at least one shift ending after the store’s scheduled closing time. The Lock-In Class covered hourly-paid or non-exempt employees in California who worked at least one shift ending after the store was scheduled to close. The opinion also refers to the first class as the Hourly Wage Class in its conclusion. Earlier rulings granted Home Depot partial summary judgment on certain waiting-time and wage-statement penalty claims and on claims based on time-rounding practices.

After discovery closed, the court addressed three motions: Utne’s motion to exclude Home Depot expert Robert Crandall’s report under Evidence Rule 702; Home Depot’s motion to exclude reports from Utne’s experts Jon A. Krosnick and James Toney under Civil Rules 26 and 37; and Home Depot’s motion to decertify the classes.

Utne’s Motion to Exclude Robert Crandall’s Report

Evidence Rule 702 allows expert testimony when the witness is qualified and the testimony is relevant, based on sufficient facts or data, produced by reliable methods, and reliably applied. The court explained that many of Utne’s objections concerned the weight of Crandall’s opinions rather than whether they were admissible. The court therefore denied the motion as to Crandall’s methods, comparison with other time-and-motion studies, store sampling, lack of margins of error, and possible effects of camera installation. The court stated that those issues could affect how much weight the opinions received and could be raised again if Utne later sought to exclude the testimony at trial.

The court excluded Crandall’s opinions about the percentage of employees who engaged in personal activities while walking to the back of the store or spending time in the break room before clocking in. The video study grouped activities such as talking with coworkers and using personal phones as personal activities, but the observations could not establish whether those activities involved work. The court found that the opinion was not based on sufficient facts or data.

The court also excluded Crandall’s opinions about “potential trial plan issues,” including opinions that individualized facts would be needed to decide liability or damages. Those opinions addressed legal conclusions and whether the case could properly be resolved on a class-wide basis, rather than proper expert subjects. Accordingly, Utne’s motion to exclude the Crandall Report was granted in part and denied in part: it was granted as to the opinions about pre-shift personal activities and improper legal opinions, and denied in all other respects.

Home Depot’s Motion to Exclude the Krosnick and Toney Reports

Home Depot argued that Utne had failed to produce documents supporting the opinions of Dr. Jon A. Krosnick and James Toney. Civil Rule 26 generally requires disclosure of facts or data considered by a testifying expert, while Rule 37 can bar use of undisclosed information unless the failure was substantially justified or harmless.

As to Dr. Krosnick, Home Depot challenged the failure to preserve notes from 59 cognitive-pretesting interviews and draft versions of the survey. The court held that the draft surveys were not facts or data Krosnick considered in forming his opinions. Home Depot had access to the implemented survey and could question Krosnick about the survey’s wording, methodology, and the failure to preserve drafts. The court therefore denied the motion as to Krosnick’s first and third reports.

As to Toney, Home Depot challenged the late production of spreadsheets used to calculate unpaid hours and wages. The court found the failure substantially justified and harmless because there had been confusion about the requested materials, Utne produced them promptly after the confusion was resolved, and Home Depot already had the underlying data and the computer program used to process it. The court therefore denied the motion as to Toney’s supplemental report. Overall, Home Depot’s motion to exclude the two expert reports was denied.

Home Depot’s Motion to Decertify the Classes

A court may decertify a class if later-developed facts or law justify reversing the original certification decision. Home Depot argued that new evidence defeated the requirements of commonality and predominance under Civil Rule 23. Commonality asks whether class members share legal or factual questions, while predominance asks whether common questions outweigh individual ones.

Hourly Employee Class

The Hourly Employee Class’s claims concerned pre-shift walking from the front of the store to the back to clock in and a claimed policy requiring employees to put on aprons before clocking in. The court held that whether employees were under Home Depot’s control during the walk remained a common mixed question of law and fact. The court also held that whether Home Depot had a policy requiring employees to put on aprons before clocking in remained a common factual question. Conflicting evidence about employees’ experiences could be considered at trial but did not require decertification. The court therefore denied decertification as to the Hourly Employee Class.

Lock-In Class

The Lock-In Class’s claims concerned waiting after a shift for a manager or other key-holding employee to unlock an exit. Home Depot argued that individual issues would predominate over whether employees waited, whether Home Depot knew or should have known about uncompensated waiting, and whether employees were paid for that time.

The court found common questions about whether class members experienced off-the-clock waiting. It considered evidence from Crandall’s study that many observed exits involved no wait, but also noted that the study documented more than 1,600 waits among 4,300 observed exits and that 18 percent of exits involved waits of at least one minute. The court also considered Krosnick’s survey, which reported that 97 percent of Lock-In Class members experienced an off-the-clock wait during the class period.

The court held that the knowledge issue could also be addressed with common proof. The claim relied on imputing to Home Depot the knowledge of managers or other key-holding employees who arrived to release waiting workers. The possibility that some employees submitted time-adjustment forms did not require decertification; questions about payment could be addressed during the damages phase. The court therefore denied decertification as to the Lock-In Class.

Standing and TransUnion

The court rejected Home Depot’s argument that the Supreme Court’s decision in TransUnion v. Ramirez required decertification for lack of standing. The court held that individualized standing inquiries did not predominate because class members who were not entitled to damages could be removed during the claims process. The possibility that a small percentage of class members never experienced the alleged unpaid time also did not make the classes impermissibly overbroad.

Disposition

Judge Richard Seeborg ordered that Home Depot’s motion to decertify the class was denied. Utne’s motion to exclude the Crandall Report was granted in part and denied in part. Home Depot’s motion to exclude the reports of Krosnick and Toney was denied. The opinion’s footnote also states that Home Depot’s administrative motions to file materials under seal were granted.