# Iliadis v. Wal-Mart Stores, Inc.

> Supreme Court of New Jersey · May 31, 2007 · 191 N.J. 88

URL: https://www.frixlaw.com/law-library/cases/9711358

## Case

- **Full name:** Michelle Iliadis and Angela Nelson-Croxton, Individually on Behalf of Themselves and All Others Similarly Situated, Plaintiffs-Appellants, v. Wal-Mart Stores, Inc., a Delaware Corporation, Sam’s Club, an Operating Segment of Walmart, Inc., Derrick Zimmer and Glen Spencer, Defendants-Respondents, and and Presently Unidentified John Does 1 Through 10, Defendants
- **Court:** Supreme Court of New Jersey
- **Decided:** May 31, 2007
- **Citations:** 191 N.J. 88; 922 A.2d 710; 12 Wage & Hour Cas.2d (BNA) 1117; 2007 N.J. LEXIS 599
- **Precedential status:** Published
- **Opinion:** Dissent by Rivera-Soto
- **Judges:** Zazzali, Lavecchia, Albin, Wallace, Hoens, Rivera-Soto
- **Cited by:** 323 later opinions in the Frix Law Library

## Citator (automated)

- No negative treatment found by the automated citator. That is not the same as a confirmation that the case is good law; read the citing cases.
- Full citator and citing cases: https://www.frixlaw.com/law-library/cases/9711358

## How later opinions describe it (automated extraction)

- explaining that, given “the nominal value of each class member’s [wage] claim,” where each litigant “lack[ed] the financial resources of their corporate adversary,” the class action was an “equalizing mechanism” that “allow[ed] them to adequately seek redress”
- noting that restitution for unjust enrichment is an equitable remedy and only available when there is no express contract providing for remuneration
- recognizing that employees “may submit their claims to the Wage Collection Division of the Department of Labor pursuant to the Wage and Hour Law”
- observing that "[d]enial of class status due to manageability concerns is disfavored and, 'in view of the public interest involved in class actions, should be the exception rather than the rule'" (citations omitted)

## Opinion text

Justice RIVERA-SOTO,
dissenting.
In a thoughtful, detañed and well-reasoned memorandum decision, Judge Ann McCormick denied plaintiffs’ motion for class certification because they “faüed to satisfy either the predominance or the superiority requirements” of Rule 4:32-l(b)(3). In respect of the predominance requirement, the trial judge reasoned that “the factor which presents the impediment to certification of a class in this case is predominance in terms of the manageability of the proposed class.” Citing to In re Cadillac V8-6-4. Class Action, 93 N.J. 412, 431 , 461 A.2d 736 (1983), the trial judge noted that “[predominance may be found when there exists a ‘common nucleus of operative facts.’ ” She explained further that
[s]uch a nucleus can generally be found when the potential class, including absent class members, seeks to remedy a common legal grievance. In a predominance inquiry, the focus is whether the proposed classes are sufficiently cohesive to warrant adjudication by representation. The more cohesive the class, the greater the likelihood that absent members can fairly be bound by the decisions on the class representatives’ claims. Although the commonality requirement may be satisfied by a single shared experience, the predominance inquiry is far more demanding.
[(citations and internal quotation marks omitted).]
The trial judge found that “[tjhere are 40 Wal-Mart stores and nine Sam’s Club stores in New Jersey” and that, “[i]n the WalMart stores, there are 90 different hourly employee classifications whüe, in the Sam’s Club stores, there are 100 different hourly employee classifications.” Taking issue with the obviously erroneous statistical and anecdotal proofs advanced by plaintiffs, she *122 explained that those proofs do “not resolve, however, whether Wal-Mart violated its break policy as to each individual employee or whether the missed break was due to some other reason.” Concluding that plaintiffs had failed to demonstrate that “the questions of law or fact common to the members of the class predominate over any questions affecting only individual class members,” Rule 4:32-l(b)(3), the trial judge highlighted that “[t]he class action mechanism is not meant to eliminate the requirement of injury to the individual class members” and that “[ejven if all of [p]laintiffs’ factual and legal arguments were to be accepted, their own statistical analyses show that a not insubstantial number of class members have not been injured.”
In respect of the superiority requirement, the trial judge explained that Rule 4:32-l(b)(3) also requires that the proponents of a class action must also demonstrate that “a class action is superior to other available methods for the fair and efficient adjudication of the controversy.” She reasoned that
[t]he superiority determination turns on an informed consideration by the court of three factors: (1) the alternative methods of adjudication available for each issue; (2) a comparison of fairness to each member whose interests may be involved with respect to each of the adjudicative methods that may be applied; and (3) a comparison of the efficiencies to be made by application of one adjudicative method over another.
[(citing In re Cadillac V.8-6-4 Class Action, supra, 93 N.J. at 436 , 461 A.2d 736 ).]
She explained that “when the trial of a claim would involve identical proofs regarding defendant’s conduct, and the claim may be prohibitively expensive for an individual to pursue, class action emerges as the superior method of adjudieation[,]” adding that “[ujnder such circumstances, individual actions or test cases become an inferior alternative to the class action because ... the economics of the situation ... make it impossible for aggrieved persons to vindicate their rights by separate actions.” (citation omitted).
In the end, the trial judge concluded that pursuing this case as a class action was not a superior form for resolving the disputes at issue, noting that “[i]n this case, however, there is an alternative mechanism that each class member could have pursued.” She *123 explained that “[e]mployees have the right to submit a claim with the Wage Collection Division of the Department of Labor under the New Jersey Wage and Hour Law” and that “[t]his is a virtually cost free and efficient remedy for any employee who believes that he or she is aggrieved.” (citations omitted).
The Appellate Division affirmed. It too concluded that plaintiffs’ claims failed to satisfy the predominance requirement of Rule 4:32-l(b)(3). Iliadis v. Wal-Mart Stores, Inc., 387 N.J.Super. 405 , 904 A.2d 736 (App.Div.2006). Repeating the concerns expressed by the trial judge, the Appellate Division took issue with the quality of plaintiffs’ proofs, concluding that “the expert reports submitted by plaintiffs fail to resolve the individual issues of liability. They fail to account for variability in employee conduct and incorrectly assume that a missed punch is equivalent to a missed break.” Id. at 419 , 904 A.2d 736 . Properly acknowledging that, “[i]n reviewing a trial court order granting or denying class certification, we are charged with determining whether the trial court abused its discretion[,]” the panel explained it was “unable to conclude that the trial court’s order represents an abuse of discretion^]” Id. at 422 , 904 A.2d 736 .
There simply is nothing in the majority’s analysis that supports its conclusion that the trial judge abused her discretion in denying class action status to these plaintiffs. What the majority does do — and movingly so — is emote why, if it were a court of first instance, a case could be made for class action certification under the facts presented. However, the majority’s disagreement with the trial judge’s determination — as affirmed by the Appellate Division — simply does not and cannot rise to the level of an abuse of discretion.
“Class certification decisions rest in the sound discretion of the trial court.” Muise v. GPU, Inc., 371 N.J.Super. 13, 31 , 851 A.2d 799 (App.Div.2004). For that fundamental reason, it is clear that “[although the ordinary ‘abuse of discretion’ standard defies precise definition, it arises when a decision is ‘made without a rational explanation, inexplicably departed from established policies, or rested on an impermissible basis.’” Flagg v. Essex *124 County Prosecutor, 171 N.J. 561, 571 , 796 A.2d 182 (2002) (quoting Achacoso-Sanchez v. Immigration and Naturalization Service, 779 F.2d 1260, 1265 (7th Cir.1985)).
Nothing in the majority’s analysis can lead to the conclusion that the trial judge’s decision was ‘“made without a rational explanation, inexplicably departed from established policies, or rested on an impermissible basis.’ ” Ibid.; see also In re Senior Appeals Examiners, 60 N.J. 356, 365 , 290 A.2d 129 (1972) (explaining that determination would be “an abuse of discretion if it were made without a rational explanation, inexplicably departed from established policies, or rested on an impermissible basis” (citation and internal quotation marks omitted)). On the contrary, any fair reading of the trial judge’s decision denying class certification can only conclude that it was rationally explained; that the trial judge explored all of the arguments advanced by the parties, applied all relevant precedent, and rationally concluded that class action certification was inappropriate under the circumstances; that the trial judge did not “inexplicably depart[ ] from established policies;” that she explained the reasoning behind her decision; that she noted that “[a]t least seven other courts also have denied class action certification in similar lawsuits against Wal-Mart based on the failure to satisfy the predominance criteria” (footnote omitted) and that her analysis simply did not “rest[] on an impermissible basis.” That necessary analysis is absent from the majority’s opinion.
In the final analysis, I entirely agree with the reasoning and conclusions expressed by the trial judge and affirmed by the Appellate Division. Even if I did not so conclude, I nevertheless cannot find in this record a basis — any basis — to support the majority’s conclusion that the trial judge abused her discretion when she denied plaintiffs’ class certification application. For those reasons, I respectfully dissent.
For reversal and remandment — Chief Justice ZAZZALI and Justices LaVECCHIA, ALBIN, WALLACE and HOENS — 5.
For affirmance — Justice RIVERA-SOTO — 1.

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Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/9711358. Public record. Not legal advice.