A federal appeals court has overturned a class certification in a case brought by Domino's Pizza delivery drivers over tips.
On February 4, the U.S. Court of Appeals for the Eighth Circuit's reversed a ruling by Judge Donovan Frank of the District of Minnesota and remanded the case. At issue in Luiken v. Domino's Pizza LLC was Domino's delivery charge, which began at $1 per-delivery in Minnesota in 2005 and increased to $1.50 in 2008.
The Eighth Circuit held that Frank wrongfully certified the class because "the varied context of the transactions made it unreasonable for some customers to construe the delivery charge as a payment for personal service."
Some drivers learned that the $1.50 charge was a delivery-only charge from drivers and order takers, but others were not informed. Online purchasers were notified of the charge. At the end of 2009, Domino's began to use boxes indicating that a delivery charge was a tip for the driver for some orders.
Former Domino's driver Matt Luiken sued Domino's in March 2009, claiming that the company's delivery charge was a gratuity under Minnesota. The statute considers a charge that a customer is obliged to pay a gratuity if it "might reasonably be construed by the guest, customer, or patron as being a payment for personal services rendered by an employee."
In November 2011, Frank certified a class of about 1,600 Minnesota Domino's delivery who worked for the company between March 2006 and February 2010. He ruled that the claims "turn on the question of whether the charge might reasonably be construed by the customer as payment to the delivery driver for the personal service of delivering pizza."
Domino's appealed the ruling.
Judge Duane Benton wrote the Eighth Circuit opinion, joined by judges James Loken and Lavenski Smith.
In his opinion, Benton relied on the 2011 U.S. Supreme Court ruling in Wal-Mart Stores v. Dukes. The 5-4 majority denied class certification to a group of more than 1 million women who claimed sex discrimination. The high court held that the women's claims did not have common questions of law or fact.
"Domino's offers a similar summary of differences in delivery transactions. Those differences affect the reasonableness of construing the delivery charge as a gratuity. Under Dukes, the district court here erred in finding commonality, because the varied circumstances of deliveries prevent 'one stroke' determination," Benton wrote.