On February 4, 2013, the United States Court of Appeals for the Eighth Circuit decertified a class of approximately 1,600 Minnesota delivery drivers employed by Domino’s Pizza, LLC (“Domino’s”) holding that the certified class did not meet the requirement of commonality. Luiken v. Domino’s Pizza, LLC, 2013 WL 399248 (8th Cir. Feb. 4, 2013).
In Minnesota, Domino’s charged its customers a $1 per-delivery charge (which rose to $1.50 in 2008). The delivery charge was reflected on the customer statement and in 2009 some Domino’s pizza boxes indicated that delivery charges were not paid as tips to Domino’s drivers. Matt Luiken, the class representative, argued that pursuant to state law the delivery charge was a tip that was wrongfully withheld from Domino’s drivers.
Under Minnesota law, gratuities received by an employee for personal services rendered by the employee are the employee’s property. Gratuities include obligatory charges which “might reasonably be construed by the guest” as being a payment for personal services rendered by the employee without notice from the employer that the charge is not the employee’s property. Minnesota regulations provide that obligatory charges can be “service charges, tips, gratuities, and/or surcharges,” included on the customer’s statement.
In Luiken, plaintiffs contended that Domino’s customers could reasonably construe the delivery charge as a payment for personal services and because Domino’s failed to provide proper notice that the drivers would not receive the money Domino’s was required to pay the delivery charge to its drivers. Plaintiffs admitted that when asked by customers whether the delivery charge was a tip, some drivers voluntarily explained that the charge was not a tip, while other drivers remained silent. Plaintiffs, however, argued that the context of the transactions between the drivers and the customers was irrelevant because the “key” consideration was whether Domino’s provided the proper notice when it was required to do so.
The court rejected plaintiffs interpretation of the law, stating that “context matters” and notice is only relevant if the charge is the type that a customer might reasonably construe as a payment for personal services. Federal Rule of Civil Procedure 23 provides that a party seeking class certification must affirmatively establish that the class meets the requirements of numerosity, commonality, typicality, and fair and adequate representation. “Commonality requires the plaintiff to demonstrate that the class members have suffered the same injury.” Wal-Mart Stores, Inc. v. Dukes, 133 S. Ct. 2541, 2551 (2011). According to the court, the statute and the rule’s use of “the”—which might reasonably be construed by the guest—is a word of limitation that refers to someone specific (the customer). The court reasoned that in some transactions, the customer could not have reasonably believed that the charge was a tip because the customer had been told by the driver that it was not; thus, no notice was required. In other transactions, however, the opposite was true and notice would be required. Ultimately, the court held that as a result of the varied transactions between drivers and customers the class members lacked commonality, and the court would be unable to make a “one-stroke determination” applicable to the class as a whole. Based on this finding, the court reversed class certification and remanded the case to the district court.
A copy of the Eighth Circuit’s opinion can be found here.