Class-related: Court of Appeal affirms wage law policies, power of trial court to direct order of proof

I briefly direct your attention to Pellegrino v. Robert Half International, Inc., in which the Court of Appeal (Fourth Appellate District, Division Three) affirmed a trial court judgment that invalidated a contractual agreement purporting to shorten statutes of limitation for wage & hour claims and decided an equitable defense of "administrative exemption" before the jury phase of the trial.

Court of Appeal reverses trial court order sustaining demurrer to class allegations for lack of commonality

The Seventh Division of the Second Appellate District has been lucky (or unlucky - I don't know what they think about it) to draw a number of major class-related appeals in the past several year.  Today, they add another to their growing list.  In Arce v. Kaiser Foundation Health Plan, Inc. (January 27, 2010) the Court of Appeal (Second Appellate District, Division Seven) reviewed a trial court order sustaining a demurrer without leave to amend to a claim arising under the UCL.  The plaintiff alleged that Kaiser breached its health plan contract and violated the Mental Health Parity Act (Health & Saf. Code,1 § 1374.72) by categorically denying coverage for behavioral therapy and speech therapy to plan members with autism spectrum disorders.  The trial court's ruling sustaining the demurrer was based on the doctrine of judicial abstention and the lack of commonality among class members.

In this instance, rather than clip elements from the opinion, I am going to quote one section, discussing the community of interest standard, in its entirety:

A. Community of Interest among Class Members

Section 382 of the Code of Civil Procedure authorizes class action suits “when the question is one of a common or general interest, of many persons, or when the parties are numerous, and it is impracticable to bring them all before the court . . . .” (Code Civ. Proc., § 382.) The party seeking certification of a class must establish the existence of both an ascertainable class and a well-defined community of interest among the class members. (Sav-On Drug Stores, Inc. v. Superior Court (2004) 34 Cal.4th 319, 326.) “The 'community of interest' requirement embodies three factors: (1) predominant common questions of law or fact; (2) class representatives with claims or defenses typical of the class; and (3) class representatives who can adequately represent the class. [Citation.]” (Ibid.) “'[T]his means “each member must not be required to individually litigate numerous and substantial questions to determine his [or her] right to recover following the class judgment; and the issues which may be jointly tried, when compared with those requiring separate adjudication, must be sufficiently numerous and substantial to make the class action advantageous to the judicial process and to the litigants.” ' [Citation.]” (Lockheed Martin Corp. v. Superior Court (2003) 29 Cal.4th 1096, 1108.) “Other relevant considerations include the probability that each class member will come forward ultimately to prove his or her separate claim to a portion of the total recovery and whether the class approach would actually serve to deter and redress alleged wrongdoing. [Citation.]” (Linder v. Thrifty Oil Co. (2000) 23 Cal.4th 429, 435.)

It is often premature for a trial court to make determinations pertaining to class suitability on demurrer. Rather, “all that is normally required for a complaint to survive demurrers to the propriety of class litigation is that the complaint allege facts that tend to show: (1) an ascertainable class of plaintiffs, and (2) questions of law and fact which are common to the class.” (Beckstead v. Superior Court (1971) 21 Cal.App.3d 780, 784.) As our Supreme Court has recognized, for purposes of determining whether a demurrer should have been overruled, “it is sufficient that there is a reasonable possibility plaintiffs can establish a prima facie community of interest among the class members . . . .” (Vasquez v. Superior Court (1971) 4 Cal.3d 800, 813; see also Beckstead v. Superior Court, supra, at p. 783 [“[T]he California Supreme Court has mandated that a candidate complaint for class action consideration, if at all possible, be allowed to survive the pleading stages of litigation.”].) Accordingly, “[w]here there is a 'reasonable possibility' that the plaintiff in a class action can establish a community of interest among class members, 'the preferred course is to defer decision on the propriety of the class action until an evidentiary hearing has been held on the appropriateness of class litigation. ' [Citation.]” (Canon U.S.A. v. Superior Court (1998) 68 Cal.App.4th 1, 5; see also Prince v. CLS Transportation, Inc. (2004) 118 Cal.App.4th 1320, 1329 [demurrer to class action complaint improper where the plaintiff “alleges institutional practices . . . that affected all of the members of the potential class in the same manner, and it appears from the complaint that all liability issues can be determined on a class-wide basis”].)

“The wisdom of allowing survival is elementary. Class action litigation is proper whenever it may be determined that it is more beneficial to the litigants and to the judicial process to try a suit in one action rather than in several actions . . . . It is clear that the more intimate the judge becomes with the character of the action, the more intelligently he [or she] may make the determination. If the judicial machinery encourages the decision to be made at the pleading stages and the judge decides against class litigation, he [or she] divests the court of the power to later alter that decision . . . . Therefore, because the sustaining of demurrers without leave to amend represents the earliest possible determination of the propriety of class action litigation, it should be looked upon with disfavor.” (Beckstead v. Superior Court, supra, 21 Cal.App.3d at p. 783.)

In sustaining Kaiser's demurrer to the UCL claim, the trial court concluded that Arce could not establish a predominance of common issues because resolution of the claim would require the court to make individualized determinations as to whether the therapies at issue were “medically necessary” for each member of the putative class. However, based on the allegations in the second amended complaint, the UCL claim presents two central legal issues that are common to all putative class members. First, does Kaiser's health plan contract exclude from coverage Applied Behavior Analysis therapy or speech therapy for autism spectrum disorders on the grounds that such therapies are “non-health care services,” “academic or educational interventions,” or “custodial care”? Second, assuming that the therapies are excluded from coverage by the health plan contract, does the Mental Health Parity Act allow Kaiser to categorically apply such exclusions on the basis that the therapies are not health care services, or are provided by persons not licensed or certified by the state? While these issues clearly raise questions of contractual and statutory interpretation, neither would require the court to make individualized determinations of medical necessity for class members.

Slip op., at 13-15.  The Court's discussion of the Doctrine of Judicial Abstention is even more detailed, but I confess that my Diet Coke supply is insufficient to keep me conscious through that discussion.

Impressive work by Scott C. Glovsky.

Bates v. Rubio's Restaurants, Inc. reminds defendants to be sure the class list is complete before the money starts flowing

While most of this opinion has nothing to do with class actions and everything to do with whether a judge can sua sponte reconsider a prior order and then recuse himself in the same minute order, Bates v. Rubio's Restaurant's Inc. (November 30, 2009) includes an important lesson for the administration of class action.  The Court of Appeal (Fourth Appellate District, Division Three) affirmed an interesting order of the trial court that had a significant effect on the constituency of a class in a settlement.  The concise summary of key events sets the stage for the discussion that follows in the opinion:

The parties in this wage and hour class action litigation entered into a $7.5 million settlement agreement, providing for three payments of $2.5 million to approved class members. After the initial $2.5 million payment was distributed among 529 approved class members, defendant and appellant Rubio‟s Restaurants, Inc. (Rubio‟s) realized it had not provided the names of all potential class members to the settlement administrator. One hundred forty potential class members had not received notification of the settlement.

After postjudgment briefing and status conferences, the court ruled that the 140 late-identified class members should receive notice and be folded into the settlement agreement. Later, the judge reconsidered his ruling sua sponte and vacated it. In the same minute order, the judge, citing Code of Civil Procedure section 170.1, subdivision (a)(6)(A)(i), then recused himself from any further proceedings in the matter, in the interests of justice.

Slip op., at 2.  Rubio's argued that the recusal negated the validity of the portion of the order vacating the prior ruling.  The Court of Appeal said that was nonsense, concluding that the trial court could properly rescing its earlier ruling and later, in the same minute order, recuse itself.

The only reason for all the fuss was the fact that 140 class members can file another class action and state with great certainty that they didn't receive notice of the prior settlement.  There's your class action angle.

Battle Royale: Latest round of lower court versus Supreme Court found in Cohen v. DIRECTV, Inc.

The more time I spend reviewing decisions in the complex litigation/class action arena, the more I am convinced that the lower Courts of California are, in many instances, at odds with the California Supreme Court.  The most recent decision to suggest this schism is Cohen v. DIRECTV, Inc. (October 28, 2009) from the Court of Appeal (Second Appellate District, Division Eight).   Cohen is the most recent California appellate court Opinion to comment on the treatment of UCL claims by In re Tobacco II Cases, 46 Cal.4th 298 (2009), the prior two decisions being Kaldenbach v. Mutual of Omaha Life Insurance Company, et al. (October 26, 2009) (discussed on this blog here) and Morgan, et al. v. AT&T Wireless Services, Inc. (September 23, 2009) (discussed on this blog here).  Cohen affirmed a trial court's denial of class certification of CLRA and UCL claims, but its analysis runs head first into Tobacco II and other Supreme Court decisions.  The UCL Practitioner has an extensive post analyzing Cohen against Tobacco II.  I will comment on the Cohen holding, but I also want to offer some thoughts as to why this divergence between California's highest court and the other courts throughout the state might be happening.

Since some of my comments depend upon the subject matter of Cohen, I begin by providing some background about the claims in that matter.  Cohen concerns an allegation that DIRECTV advertised that the channels in its HD Package were broadcast in the 1080i HD standard (an interlaced resolution of 1920x1080 pixels), at  19.4 Mbps, but later compressed each HD channel down to 6.6 Mbps.  The 19.4 and 6.6 figures refer to the volume of data being transmitted each second, expressed as Megabits per second.   So, expressed another way, the Cohen action complained that the quality of the video broadcast on HD channels was degraded by an increase in the amount of data compression.  By way of background, the raw data rate for uncompressed HD video in the 1080i format can be well in excess of 100 Mbps, depending on frame rate and color information.  This "raw" video is then compressed.  In fact, it must be compressed - there is no practical system in place to deliver 100 Mbps to your television right now.  The older mpeg-2 compression codec, or newer codecs, like H.264, compress the "raw" HD video into something smaller, using complex formulas that reduce the data used to transmit the images.  The goal of compression is to obtain the best video-quality-to-size compromise.  In the DIRECTV case, 19.4 Mbps is compressed video that would look very good, but "degradation" artifacts would still be visible on a good HD television (some "smearing" on fast action or a blocky, pixelated appearance in areas of solid color, blacks in particular).  6.6 Mbps is very compressed 1080i HD content; it is compressed to one third the size of the already compressed 19.4 Mbps feed.  You would see more compression artifacts on a good/larger HD television.

There are a number of certification issues in Cohen.  Ascertainability receives some significant discussion.  But the portion that is likely of greatest interest is the discussion of reliance under the UCL; it is the area in which Cohen diverges from Tobacco II.  Regarding reliance in UCL actions, the Trial Court in Cohen said: "Even pre-Prop. 64 cases only allow inferred reliance where the misrepresentations were common to all class members. An inference of classwide reliance cannot be made where there is no showing that representations were made uniformly to all members of the class."  Slip op., at 7.  The Cohen Court started its discussion about the UCL with this observation that presages the outcome:

Although the rules under the UCL may or may not be different following our Supreme Court's recent decision in In re Tobacco II Cases (2009) 46 Cal.4th 298 (Tobacco II), an issue which we address below, we do not understand the UCL to authorize an award for injunctive relief and/or restitution on behalf of a consumer who was never exposed in any way to an allegedly wrongful business practice.

Slip op., at 14.  The Cohen Court then stated its view of the holding from Tobacco II in two separate ways.  First, it offered a brief summary of the decision:

On review, the Supreme Court specifically addressed two questions: “First, who in a UCL class action must comply with Proposition 64's standing requirements, the class representatives or all unnamed class members, in order for the class action to proceed? . . . Second, what is the causation requirement for purposes of establishing standing under the UCL . . . ?” (Tobacco II, supra, 46 Cal.4th at p. 306, italics added.) This past spring, the Supreme Court answered these two questions by ruling (1) only the class representatives must meet Proposition 64's standing requirements of actual injury and causation; (2) only the class representatives must establish reliance in accordance with fraudulent inducement principles in order for the class action to proceed; and (3) the class representatives do not have to show reliance on particular advertisements or marketing materials with “unrealistic” specificity. (Tobacco II, supra, 46 Cal.4th at pp. 321-329.)

Slip op., at 15.  Then, the Cohen Court offered its own summary of what it believes that the California Supreme Court actually meant:

Viewed from the other direction, Tobacco II held that, for purposes of standing in context of the class certification issue in a “false advertising” case involving the UCL, the class members need not be assessed for the element of reliance. Or, in other words, class certification may not be defeated on the ground of lack of standing upon a showing that class members did not rely on false advertising. In short, Tobacco II essentially ruled that, for purposes of standing, as long as a single plaintiff is able to establish that he or she relied on a defendant‟s false advertising, a multitude of class members will also have standing, regardless of whether any of those class members have in any way relied upon the defendant's allegedly improper conduct.

Slip op. at 15.  Notice the interesting language used by the Cohen Court: "Tobacco II essentially ruled...."  One can say that the Supreme Court "did" or "did not" rule a certain way.  But saying that it "essentially" ruled a certain way is problematic for everyone.  This suggests an outcome that is implied by Tobacco II, but not stated.  To sort that out, we have to compare Cohen to Tobacco II and determine what Tobacco II does and does not say.

Returning to Cohen, the Court was more direct when it stated its intention to disregard Tobacco II as offering a controlling decision for the case before it:  "In the contextual setting presented by Cohen's present case, we find Tobacco II to be irrelevant because the issue of 'standing' simply is not the same thing as the issue of 'commonality.'"  Slip op., at 15.  The Court continued:  "In short, the trial court's concerns that the UCL and the CLRA claims alleged by Cohen and the other class members would involve factual questions associated with their reliance on DIRECTV's alleged false representations was a proper criterion for the court's consideration when examining 'commonality' in the context of the subscribers'motion for class certification, even after Tobacco II."  Slip op., at 16.  Thus, the Cohen Court devised an analysis that permits circumvention of Tobacco II, holding that a trial court can't use classwide reliance issues for a "standing" challenge, but can use those same issues to bar certification.  I posit that what we have here is most likely either a reverse engineered holding or a generally negative reaction to Tobacco II.  The limited analysis of reliance issues as they pertain to the UCL was devised to support the desired outcome.  The alternative is that the Cohen Court didn't examine Tobacco II carefully, and I find that less likely than the notion that the panel simply does not agree with the Tobacco II analysis or doesn't like the claims in the case.

I turn now to Tobacco II and argue that it directly addresses the contentions made in Cohen.  In Tobacco II, the Supreme Court summarized the trial court's decision in that matter:

The trial court found that the “simple language” of Proposition 64 required that “for standing purposes, a showing of causation is required as to each class member's injury in fact.... [T]he injury in fact that each class member must show for standing purposes in this case would presumably consist of the cost of their cigarette purchases. But significant questions then arise undermining the purported commonality among the class members, such as whether each class member was exposed to Defendants' alleged false statements and whether each member purchased cigarettes ‘as a result’ of the false statements. Clearly ... individual issues predominate, making class treatment unmanageable and inefficient.”

Tobacco II, 46 Cal. 4th at 310-311.  One can almost excuse the Cohen Court's narrow construction of Tobacco II as a "standing" decision.  After all, the paragraph above does talk quite a bit about standing.  But this overlooks the fact that causation is entangled with standing, and, for the named plaintiff, showing reliance is the method by which that plaintiff shows standing under a UCL claim asserting a "fraudulent" prong (likely to deceive) standard.  What Cohen ignores is the fact that, according to Tobacco II, the causation showing (in this instance, a reliance showing) is not an element of a UCL claim, except that, after Proposition 64, the named plaintiff must make that showing.  In fact, the next page of Tobacco II removes any doubt that pre-Proposition 64 decisions construing the UCL remain viable:  "'[T]o state a claim under either the UCL or the false advertising law, based on false advertising or promotional practices, "it is necessary only to show that 'members of the public are likely to be "deceived." ' " ' (Kasky v. Nike, Inc. (2002) 27 Cal.4th 939, 951, 119 Cal.Rptr.2d 296, 45 P.3d 243.)"  Tobacco II, 46 Cal. 4th at 312.

Continuing, the Supreme Court said:

The fraudulent business practice prong of the UCL has been understood to be distinct from common law fraud. “A [common law] fraudulent deception must be actually false, known to be false by the perpetrator and reasonably relied upon by a victim who incurs damages. None of these elements are required to state a claim for injunctive relief” under the UCL. ( Day v. AT & T Corp.(1998) 63 Cal.App.4th 325, 332, 74 Cal.Rptr.2d 55; see State Farm Fire & Casualty Co. v. Superior Court (1996) 45 Cal.App.4th 1093, 1105, 53 Cal.Rptr.2d 229.) This distinction reflects the UCL's focus on the defendant's conduct, rather than the plaintiff's damages, in service of the statute's larger purpose of protecting the general public against unscrupulous business practices. (Fletcher v. Security Pacific National Bank (1979) 23 Cal.3d 442, 453, 153 Cal.Rptr. 28, 591 P.2d 51.)

Tobacco II, 46 Cal.4th at 312.  This discussion is at odds with Cohen's treatment of Tobacco II.  Tobacco II said that "the UCL class action is a procedural device that enforces substantive law by aggregating many individual claims into a single claim, in compliance with Code of Civil Procedure section 382, to achieve the remedial goals outlined above. It does not change that substantive law, however."   Tobacco II, 46 Cal.4th at 313.  And Tobacco II unambiguously holds (i.e., not "essentially" holds) that:

[T]he language of section 17203 with respect to those entitled to restitution-“to restore to any person in interest any money or property, real or personal, which may have been acquired ” (italics added) by means of the unfair practice-is patently less stringent than the standing requirement for the class representative-“any person who has suffered injury in fact and has lost money or property as a result of the unfair competition.” (§ 17204, italics added.) This language, construed in light of the “concern that wrongdoers not retain the benefits of their misconduct” (Fletcher v. Security Pacific National Bank, supra, 23 Cal.3d 442, 452, 153 Cal.Rptr. 28, 591 P.2d 51) has led courts repeatedly and consistently to hold that relief under the UCL is available without individualized proof of deception, reliance and injury. (E.g., Bank of the West v. Superior Court (1992) 2 Cal.4th 1254, 1267, 10 Cal.Rptr.2d 538, 833 P.2d 545; Committee on Children's Television, Inc. v. General Foods Corp., supra, 35 Cal.3d at p. 211, 197 Cal.Rptr. 783, 673 P.2d 660.)  Accordingly, to hold that the absent class members on whose behalf a private UCL action is prosecuted must show on an individualized basis that they have “lost money or property as a result of the unfair competition” (§ 17204) would conflict with the language in section 17203 authorizing broader relief-the “may have been acquired” language-and implicitly overrule a fundamental holding in our previous decisions, including Fletcher, Bank of the West and Committee on Children's Television.

Tobacco II, 46 Cal.4th at 320.  If "reliance" is not an element of a UCL claim, why is there still the perception that reliance has a role to play in UCL actions (outside of named plaintiff standing)?  The Tobacco II decision may have supplied that answer as well:

Our conclusion with respect to the remedies set forth in section 17203 has nothing to do with the nonrestitutionary disgorgement disallowed in Kraus v. Trinity Management Services, Inc., supra, 23 Cal.4th 116, 96 Cal.Rptr.2d 485, 999 P.2d 718. In Kraus, we concluded that section 17203 does not allow a court to order disgorgement into a fluid recovery fund, e.g., to “compel a defendant to surrender all money obtained through an unfair practice even though not all is to be restored to the persons from whom it was obtained or those claiming under those persons.” (Id. at p. 127, 96 Cal.Rptr.2d 485, 999 P.2d 718.) This prohibition against nonrestitutionary disgorgement did not overrule any part of Fletcher v. Security Pacific National Bank, supra, 23 Cal.3d 442, 153 Cal.Rptr. 28, 591 P.2d 51, under which restitution may be ordered “without individualized proof of deception, reliance, and injury if necessary to prevent the use or employment of an unfair practice.” (Bank of the West, supra, 2 Cal.4th at p. 1267, 10 Cal.Rptr.2d 538, 833 P.2d 545.)

Tobacco II, 46 Cal.4th at 320, n. 14.  This suggests that, in some circumstances, the quantum of a restitution order might ultimately depend upon a showing of injury by class members.  Since reliance on an unfair practice can act as a surrogate of sorts for injury (under the the right facts and right species of UCL claim), this may explain why the belief persists that reliance is an unstated element of a UCL claim.  It's either that, or a petulant refusal to understand that the UCL's fraudulent prong has nothing to do with common law fraud.

Tobacco II has already been circumvented by two of three California Courts of Appeal to apply it.  The important question is why?  Options include, at least, a desire not to reverse a trial court, a dislike of the holding of Tobacco II, a dislike of the theory of the case, or a general resistance to class actions (or some amalgam of those options).

The first option exists as an element of all appeals.  Courts of Appeal begin their analysis with a presumption that the trial court will be affirmed.  I cannot conclude that this is the primary factor in the Cohen Court's dismissive analysis.

The second option is certainly possible.  The Cohen Court sounded almost disdainful of Tobacco II when it said, "In the contextual setting presented by Cohen's present case, we find Tobacco II to be irrelevant...."  Slip op., at 15.  I find this option to be a plausible explanation.

The third option is also possible.  I do not find it a stretch to imagine the initial judicial reaction being something akin to, "Megawho per second?  You're kidding, right?"  When that happens, I think it is human nature to look for reasons not to facilitate the case or claim.  If my comments offend any judicial sensibilities, I apologize for that.  But we must recognize every participant in the judicial system -- clerk, judge, lawyer -- are human beings, with all of our prejudices and predispositions.  I also find this option to be a plausible explanation.

The fourth option is also possible.  When the various Districts and Divisions are examined over time, I have little doubt that some find panels find great utility in the class action device, while others find them abusive.  Again, this has more to do with the predisposition of the observer than anything else, as it is as easy to find a class action of great social utility as it is to find one of questionable or zero worth.  It's also worth noting that the second of my proposed options can be a subset of this fourth option.  In other words, discomfiture about the Tobacco II opinion can be motivated either by that particular opinion or by an overall judicial fatigue regarding class actions generally.

I do not want to suggest that I know which of my theories, if any, explains Cohen.  I suspect that some combination of class action fatigue and specific resistance to the claims in this particular case are at work here, but that is speculative on my part.  However, I am certain that a growing rift exists between the Supreme Court's view of major legal questions and the views held by trial and intermediate appellate courts.  As I am doubtful that anything can be done about this issue other than to raise awareness and hope for the best from our courts, I do not believe it is an issue that will resolve itself any time soon.

It is my intention to write more about the nature of this judicial divide here or elsewhere.

Today's lessons from the Court of Appeal: things not to do

Complex litigation and civil procedure frequently intersect, probably because everyone is scrutinizing every crossed T and dotted I in high stakes litigation.  Today, the Court of Appeal (Second Appellate District, Division Six) offers not one, but two procedural lessons that are at least as likely to arise in complex litigation matters as they are in the simplest of civil actions.

Our first of two lessons comes from Alvis v. County of Ventura (October 20, 2009).  If you have an expert, and he writes a report, and you try to oppose summary judgement with an expert declaration that contradicts his own prior report on a material point, make sure he explains why he changed his tune:

Most significantly, Singh's declaration asserts that the slide started at the bottom of the cliff when the wall failed. This directly contradicts his prior statement in a report to an insurance company that "[f]ailure started as a landslide in the upper reaches and then flowed at a rapid rate down to the developed area below." This is not a minor point. Singh's statement that the slide started in the upper reaches of the cliff directly undercuts the premise on which his entire declaration is based. Yet, Singh offers no explanation.

Slip op., at 15.  If the expert had provided a credible explanation for why he altered his opinion, it might have made it past the summary judgment stage.

The next lesson is as much for arbitrators as it is for parties to litigation.  Burlage v. Superior Court (Spencer) (October 20, 2009) observes that "[i]t is not often that a trial court vacates an arbitration award and an appellate court affirms the order."  Slip op., at 1.  Since Moncharsh v. Heily & Blase, 3 Cal. 4th 1 (1992), lower courts have struggled to define the limited circumstances when a trial court can properly review an arbitration award.  Burlage concludes that one such circumstance arises when the arbitrator excludes material evidence, denying one contracting party the benefit of the arbitration bargain:  "The parties to an arbitration have bargained for a final and binding decision.  (Moncharsh v. Heily & Blase, supra, 3 Cal.4th at p. 10.) But without the opportunity to present material evidence, Spencer did not receive the benefit of that bargain."  Slip op., at 7.  Notably, there is a dissent, which argues, in substance, that the exclusion of evidence followed a ruling of law that the evidence was inadmissible, and the accuracy of that ruling cannot be reviewed by the trial court.

Credit goes to Presiding Justice Gilbert for both opinions.

in brief: More commentary about Nazir v. United Airlines, Inc.

Whether it is the intensity of the Opinion, the facts discussed in the Opinion, or a combination of the two, Nazir v. United Airlines, Inc. (October 9, 2009) is generating a fair bit of commentary.  Workplace Prof Blog encourages everyone to read the entire opinion.  Storm's California Employment Law agrees, saying, "You have to read this opinion."  I agree.  You should read the opinion.

In theory, Brinker Restaurant Corporation, et al. v. Superior Court (Hohnbaum) is fully briefed

The Brinker docket shows that all parties have filed their answers to the many amicus briefs.  In theory, this means that briefing is done.  But don't doubt the ability of attorneys to come up with a (good) reason for some supplemental brief or other.  See you next year for more on Brinker.

Media coverage of Nazir v. United Airlines, Inc.

Mike McKee's Recorder column on the recent decision in Nazir v. United Airlines, Inc. (October 9, 2009), previously available only by subscription, is now available without a subscription from Law.com.  Mike McKee, On Summary Judgment, Judge Gets a Spanking (October 13, 2009) www.law.com.

It is possible to go too far in litigation, and Nazir v. United Airlines, Inc. provides frightening examples of that excess

Sometimes litigation is complex because the lawyers make it that way.   So often those litigation excesses are tolerated by Courts and achieve their goals, which just encourages the bad behavior.  Then it spreads like mold, getting copied.  However, just as my cynicism reaches that tipping point, a Court of Appeal authors a new opinion to right the ship.  For example, in Clement v. Alegre (September 23, 2009), the Court of Appeal (First Appellate District, Division Two) weighed in on discovery conduct.  See September 24, 2009 blog post.  And I am pleased to report that the First Appellate District, Division Two, is back business setting litigators back on the straight and narrow with their latest opinion, Nazir v. United Airlines, Inc. (October 9, 2009).

Since complex litigation is in the eye of the beholder, I say that monstrous motions for summary adjudication are "complex."  By that standard, Nazir is topical, and I proceed.  Nazir is about the summary judgment procedure.  Nazir begins by describing the terrain into which the opinion will descend:

Our Supreme Court has said that the purpose of the 1992 and 1993 amendments to the California summary judgment statute was “to liberalize the granting of motions for summary judgment.” (Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 854.) It is no longer called a “disfavored remedy.” It has been described as having a salutary effect, ridding the system, on an expeditious and efficient basis, of cases lacking any merit. And that it has, as shown by the many cases affirming a summary judgment.

At the same time, the summary judgment procedure has become the target of criticism on a number of fronts. Some particular criticism is directed to the procedure in employment litigation, including that it is being abused, especially by deep pocket defendants to overwhelm less well-funded litigants. More significantly, it has been said that courts are sometimes making determinations properly reserved for the factfinder, sometimes drawing inferences in the employer‟s favor, sometimes requiring the employees to essentially prove their case at the summary judgment stage. Here we confront the poster child for such criticism, in a case involving what may well be the most oppressive motion ever presented to a superior court.

Slip op., at 1.  In a suit for harassment, discrimination and retaliation, Defendants filed motions for summary judgment or summary adjudication, and the court described the ensuing papers as follows:

Defendants filed a motion for summary judgment/summary adjudication, seeking adjudication of 44 issues, most of which were not proper subjects of adjudication. Defendants' separate statement was 196 pages long, setting forth hundreds of facts, many of them not material—as defendants' own papers conceded. And the moving papers concluded with a request for judicial notice of 174 pages. All told, defendants' moving papers were 1056 pages.

Plaintiff's opposition was almost three times as long, including an 1894-page separate statement, papers the trial court would later disparage as "mostly verbiage," a description with which, as will be seen, we disagree. Curiously, no such criticism was leveled at defendants' papers, not even those in reply, papers that defy description.

Defendants' reply included, and properly, their response to plaintiff's additional disputed facts. Defendants' reply also included, not so properly, a 297-page "Reply Separate Statement" and 153 pages of "Exhibits and Evidence in Support of Defendants' Reply." And the reply culminated with 324 pages of evidentiary objections, consisting of 764 specific objections, 325 of which were directed to portions of plaintiff's declaration, many of which objections were frivolous. In all, defendants filed 1150 pages of reply.

Slip op., at 2.  The Court then summarized the task before it:

This, then, is what is before us for de novo review: an order granting summary judgment that purports to sustain without explanation 763 out of 764 objections to evidence, in a record the likes of which we have never seen—not here, not in the combined 11 years of law and motion experience of the members of this panel.

Slip op., at 3.  But wait! This is only the third page of an opinion spanning over 50 pages.  Consider these comments about the record on appeal:

On August 30, 2007, defendants filed a "Motion for Summary Judgment or, in the Alternative, Summary Adjudication," with moving papers totaling 1056 pages. Plaintiff filed his lengthy opposition which, as quoted above, the trial court described as "mostly verbiage, and utterly lacking in the identification and presentation of evidence demonstrating a disputed issue of fact."

Seemingly emboldened by this description, defendants' brief here begins this way: "As in Macbeth's soliloquy, Appellant's Opening Brief (AOB), like his summary judgment opposition below, is full of 'sound and fury, [but ultimately] signifying nothing.' Despite filing an 1894 page(!) opposition separate statement, which the trial court found . . . in a manner deliberately calculated to obfuscate whether any 'purportedly disputed facts were actually controverted by admissible evidence,' the trial court properly granted summary judgment in this case. As with Nazir's opposition statement, his AOB is 'mostly verbiage, and utterly lacking in the identification and presentation of evidence demonstrating a disputed issue of fact.'"

Passing over whether such disparagement is effective advocacy, the "girth" of materials before the trial court began with defendants, whose 1056 pages of moving papers were in great part inappropriate, beginning with the motion itself.

Slip op., at 4.  The Court then spends considerable time summarizing the defects in the Separate Statement:

The deficiencies in the motion pale in comparison to those in the separate statement. "Separate statements are required not to satisfy a sadistic urge to torment lawyers, but rather to afford due process to opposing parties and to permit trial courts to expeditiously review complex motions for [summary adjudication] and summary judgment to determine quickly and efficiently whether material facts are undisputed." (United Community Church v. Garcin (1991) 231 Cal.App.3d 327, 335.) The separate statement "provides a convenient and expeditious vehicle permitting the trial court to hone in on the truly disputed facts." (Collins v. Hertz Corp. (2006) 144 Cal.App.4th 64, 74.) That hardly describes defendants' separate statement here.

The separate statement is, as noted, 196 pages. The exact number of supposedly material facts is impossible to know without actually counting them, as many of the facts are often repeated with the same numbers. But whatever the number, many of the facts are not material, as defendants concede, their separate statement beginning with this quizzical footnote: "The facts are deemed undisputed for purposes of this motion only and do not constitute any admission. For purposes of this motion only, Plaintiff's statements are accepted as true. Not all facts listed herein are necessarily material, as certain facts are asserted for background, foundational, information, or other purposes. Also, by including the facts set forth herein, Defendants are not waiving their right to challenge the admissibility of such facts in connection with this motion or for other purposes in this case."

We offer two observations about this footnote. The first is that it ignores the advice from the leading practice treatise: "PRACTICE POINTER: [¶] . . . [¶] Include only those facts which are truly material to the claims or defenses involved because the separate statement effectively concedes the materiality of whatever facts are included. Thus, if a triable issue is raised as to any of the facts in your separate statement, the motion must be denied!" (Weil & Brown, Cal. Practice Guide: Civil Procedure Before Trial (The Rutter Group 2009) § 10:95.1, p. 10-35.) The second is that there seems to be some disconnect between defendants' concession that "Plaintiff's statements are accepted as true" and defendants' 325 objections to plaintiff's testimony. In short, defendants' separate statement was particularly inappropriate.

The deficiencies carried over to the reply papers, which included a 297-page reply separate statement. There is no provision in the statute for this. The reply also included 153 pages of "Exhibits and Evidence in Support of Reply." No such evidence is generally allowed. (San Diego Watercrafts, Inc. v. Wells Fargo Bank (2002) 102 Cal.App.4th 308, 316.) And, of course, there were the objections, 764 in all, which we discuss below. Suffice to say that there is plenty of blame for the "girth" the trial court criticized, most of which, we conclude, lies at the feet of defendants.

But neither the inappropriateness of defendants' papers nor their excessive volume is the worst aspect of those papers. No, that is the misleading picture those papers presented. An article coauthored by an experienced Superior Court judge has "intended to point out, in ascending order of seriousness, certain fatal errors and other problems [the court has] encountered" in connection with summary judgment motions, at the very top of which are motions "that attempt to 'hide' triable issues of material fact."  (Brenner & March, Use and Abuse of MSJs: A View from the Bench (2007) 49 Orange County Law 34, 37.) The article admonishes that a motion "should never cite evidence out of context in an effort to conceal a clearly triable issue of material fact," going on to cite two recent examples in that judge's court, one in a sexual harassment case, the other in one for wrongful termination. (Id. at p. 37.) Here, in vivid detail, is a third.

Slip op., at 5-7.  The Court was then compelled to spend considerable time discussing the objections to plaintiff's evidence, as the state of admitted evidence governed the Court's de novo review of the Motions themselves.   Without quoting the many pages of discussion about the frivolous nature of the many objections asserted by defendants, the Court, at one point in the opinion writes, "Can this be serious? Can counsel see themselves rising at trial with those objections while plaintiff is testifying before a jury?"  Slip op., at 11.  The Court then offered this advice in a footnote:

We sometimes "hear" that a common practice in cases staffed by multiple levels of lawyers is to assign the most junior lawyer to "do the objections," which was apparently done here. Perhaps a wiser practice would be have the most experienced lawyer, presumably with a better understanding of the law of evidence, deal with the objections.

Slip op. at 11, n. 6.

The balance of the Opinion, once it moves beyond its focus on the form of the filings before the Court, is an excellent example of detailed application of facts to the complex schemes of law governing harassment, continuing violations, discrimination, exhaustion of administrative remedies and the like.  If you don't practice in the area of employment law, the first third of the opinion is still highly relevant, and the balance is a good example of what to consider when bringing or opposing a motion for summary judgment/adjudication.

The Court ends its opinion by reminding trial courts that they possess inherent power to correct abusive summary judgment filings:

The deficiencies in summary judgment papers can appear in a variety of places, and the approaches taken by the courts to address the deficiencies can vary as well, limited only by the inspiration or creativity of the particular law and motion judge—and, of course, due process. There is no universal solution, no panacea, and we do not even attempt to offer suggestions. We write here only to confirm the existence of the inherent power, to remind trial courts of it, and to encourage them to use it when appropriate.

Slip op., at 51.  I think this panel is too modest.  They seem more than up to the challenge of suggesting methods to curtail incidents like the one chronicled in its Opinion.  At any rate, they do yeoman's work and deserve a raise (not that this mismanaged, financially destitute state could provide one).

The UCL Practitioner has already identified some press coverage of this decision in a post from earlier today.

Brinker Restaurant Corporation, et al. v. Superior Court (Hohnbaum) is even closer to being fully briefed

Real Party in Interest, Adam Hohnbaum, has filed his consolidated answer to amicus curiae briefs.  The docket only shows the filing by Real Party in Interest, but, presumably, the Petitioner's consolidated answer has also been filed.  Depending upon where and how the brief is filed, it can take a day or two for the Court to indicate the filing on the docket.  This is very exciting news.  Now Brinker descends into the cone of silence until oral argument is set.  Seeing no basis for adjustment at this time, The Complex Litigator's Brinker projected Opinion Release Date remains at August 2010.