CDF Scores Decertification of Class After Strategic Removal And Successful Attack on Continued Class Treatment in Misclassification Case

Our client, a national bank, successfully obtained decertification of a previously certified class in a class action case involving the alleged misclassification of exempt loan officers who were engaged in selling loans to small businesses.  The primary exemption defense was the California outside salesperson exemption, though the administrative and commission sales exemptions were also at issue.  The state court certified the class in 2012 but denied Plaintiff’s motion for summary adjudication attempting to eliminate two of the three exemption defenses.  After aggressively defending the case in state court for four years, CDF’s strategic removal to federal court in 2013 led to the successful decertification of the class, leaving only the named Plaintiff’s individual claims for trial.  In decertifying the class, the federal district court emphasized the individualized nature of the liability inquiry for cases involving California’s outside salesperson exemption, and concluded that class treatment was not superior in light of the manageability problems presented by the claims and defenses in this case, which would require evaluating the activities of all the loan officers and how they spent their time.  The Ninth Circuit Court of Appeals denied Plaintiff’s petition for intermediate appellate review of the district court’s decertification order.


Alameda County Superior Court; U.S. District Court, Northern District of California


Timothy M. Freudenberger
Alison L. Tsao
Kent J. Sprinkle
Teresa W. Ghali

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