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Iowa Supreme Court Decertifies a Class of Workers Alleging a Violation of Iowa's Workers' Compensation Statute

On March 20, 2020, the Iowa Supreme Court issued its decision in the matter of Roland v. Annett Holdings, Inc., decertifying the class of workers that had been certified by the District Court, alleging violations of Iowa’s Code Chapter 85, which is Iowa Workers’ Compensation Chapter. In this matter, the District Court had certified a class that alleged the class members’ employer had violated rights of the employees provided by Iowa Code Chapter 85, by virtue of the employer requiring that employees sign a Memorandum of Understanding providing that the employee agreed to relocate to Des Moines for up to two weeks at a time to perform modified work duty in the event the employee was injured.

The class action certification was upheld by the Iowa Court of Appeals. However, the Iowa Supreme Court granted further review, and vacated the Court of Appeals decision and remanded the case to the District Court for reversal of the District Court’s class action certification. The majority opinion of the Iowa Supreme Court found that the Memorandum of Understanding did not provide the required common question of law or fact requisite to a class action, because there were driver-by-driver fact issues including those related to where the driver lived in relation to Des Moines, Iowa.

The Iowa Supreme Court also examined other factors related to finding whether their common questions of law or fact predominate and found that the effect of the MOU on each driver was fact intensive and unique to each driver thereby precluding class action certification. As an alternative basis for overturning the class certification, the majority opinion also found that the drivers had not exhausted their administrative remedies provided under the Iowa Workers’ Compensation structure and the Court found that such exhaustion was an individual prerequisite that precluded class certification.

Justice Appel filed a dissent disagreeing with the majority on both general bases on which the majority based its decision. First, Justice Appel noted that Iowa’s class action rules importantly differ from federal class action roles, in a manner that demonstrates that class actions are to be more freely granted in state court actions in Iowa. Justice Appel then noted the broad deference that is to be given to district court judges in applying Iowa’s liberal rules for class actions, and that an appellate court should not overturn a district court decision in all but cases of clear abuse by the district court of its discretion.

Justice Appel found the District Court had not violated the discretion it should be afforded. Finally, Justice Appel found that the issue of administrative exhaustion had not been raised by the Defendant in the appeal and that the Iowa Supreme Court should not have weighed into that issue on its own because the issue was effectively waived by its failure to have been raised. A copy of the decision can be found here:https://www.iowacourts.gov/courtcases/6942/embed/SupremeCourtOpinion.

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