Federal Appeals Court Reverses Class Action Certification And Summary Judgement In Favor Of Plaintiffs In IC Misclassification Case

The U.S. Court of Appeals for the Ninth Circuit has ruled in favor of a pre-foreclosure property preservation company on its appeal of a district court’s certification of a class of workers who provide in foreclosure property preservation services and the district court’s grant of summary judgment in favor of the workers. The complaint had alleged that Field Asset Services, LLC (FAS) willfully misclassified the named plaintiff and over 150 similar workers as independent contractors and not employees, and that by doing so it allegedly resulted in FAS’s failure to pay overtime compensation and to reimburse the proposed class members for their business expenses. The district court had certified the class and granted partial summary judgment in favor of the class members, finding that they had been misclassified as independent contractors and were entitled to damages.

On appeal, the Ninth Circuit reversed, concluding that the class members had failed to meet the class action “predominance” requirement because it could not establish by common evidence that the workers all worked overtime or incurred business expenses but rather could only be proven by highly individualized inquiries as to whether each particular class member ever worked overtime or incurred necessary business expenses. The appeals court found that summary judgment was inappropriate on the expense reimbursement issue because the determination whether FAS controlled the class members’ work should have been decided by a jury and not by the district court judge. The case was remanded to the district court. Bowerman v. Field Asset Servs. Inc., Nos. 18-16303 and 18-17275 (9th Cir. July 5, 2022).