NEW YORK (Legal Newsline) - A man who won his lawsuit against Joe’s Shanghai restaurant over wage violations lost a subsequent appeal of a judge’s order dismantling a class action on behalf of his fellow workers.
The Second Circuit Court of Appeals affirmed the right of Jianmin Jin to pursue the appeal of the judge’s decertification order even though he’d won his own case, saying he still had standing as a “private attorney general” because he hadn’t voluntarily settled his lawsuit. But the appeals court agreed Jin’s lawyers had failed to provide adequate representation for the class, justifying the judge’s decision to end that case.
The decision supports the right of plaintiffs to represent the interests of class members even after a class has been decertified and they have won their own case at trial. The court was less clear on whether companies can still end class actions by “picking off” representative plaintiffs by settling with them and making their cases moot.
Jin sued Shanghai Original Inc., which operates independently owned Joe’s Shanghai restaurants in Flushing and two other New York locations. He accused the company of violating state and federal wage-and-hour laws by paying workers a flat rate and denying them overtime. A judge certified a class of all hourly workers and plaintiff lawyers identified more than 70 witnesses who would testify at trial.
The restaurant owners said they had lost all payroll records prior to November 2016 so witness testimony was key to proving the claims. After the class as certified, however, 25 class members opted out, prompting plaintiff lawyers at Troy Law in Flushing to accuse Joe’s Shanghai of improperly persuading employees to drop out of the case.
The plaintiff lawyers asked the judge to permit discovery into their allegations but after granting extra time class counsel revealed they had only questioned a few managers, no employees and stopped conducting depositions a month before the extended deadline without telling the court. The judge set the case for trial and class counsel identified only four witnesses, two of whom were class members. The judge exercised his own authority to decertify the class five days before trial, citing as a “significant intervening event” the plaintiff lawyers’ failure to build a case on witness testimony.
The judge held a bench trial on Jun’s claims alone and awarded him $35,880.30 plus attorneys’ fees and costs.
Despite his victory, Jin appealed the decertification of the class to the Second Circuit. Joe’s Shanghai argued the case was moot because Jin had won on his claims and no longer had a stake in the matter. The appeals court disagreed, saying the “the underlying controversy in this case remains for the putative class members.” Jin himself still had a stake in the case because he wanted to punish what he believed to be labor law violations against his coworkers, the court ruled.
“The private attorney general concept relates to the objectives of the class action device, which include deterring misconduct through private enforcement of vital public policies,” the court ruled.
Had Jin voluntarily settled his case, the outcome might have been different, the court went on. Some jurisdictions allow even plaintiffs who settle their own cases to continue litigating on behalf of the class – typically in search of legal fees for class counsel – but “the concerns are fundamentally different in the voluntary settlement and voluntary action contexts compared to those here,” the court said.
While Jin had the right to challenge the decertification of the class, the appeals court said, the trial judge acted correctly in this case. Class counsel tried to delay the trial multiple times “without any meritorious basis,” the appeals court found, repeatedly failed to submit witness lists and only planned to call two employees despite the judge’s instructions that witness testimony was crucial.
“Counsel’s representation of the class fell woefully short of the skilled and zealous representation expected of class counsel under Rule 23(g), justifying decertification,” the court concluded.