Brinker redux in Brinkley v. Public Storage, Inc.

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Greatsealcal100On October 22, 2008, the Supreme Court has GRANTED the Petition for Review in Brinker Restaurant Corporation, et al. v. Superior Court (Hohnbaum).  See this blog's coverage here and here for more information. The calm didn't last long though, as another Division of the Court of Appeal has re-asserted portions of the Brinker holding that were rendered uncitable with the grant of review.

In Brinkley v. Public Storage, Inc. (October 28, 2008), the Court of Appeal (Second Appellate District, Division Three), relying on the same federal court decision used by the Court of Appeal in Brinker, determined that employers need only "provide" meal breaks, not "ensure" that they are taken:

“In fact, the obligation to affirmatively ensure that workers are relieved of all duty is consistent with the rule requiring employers to provide a meal break. (White v. Starbucks Corp. (N.D.Cal. 2007) 497 F.Supp.2d 1080, 1089 (White) [interpreting Cicairos].) In White, the court rejected the plaintiff’s argument under sections 226.7 and 512 that employers “must affirmatively enforce the meal break requirements.” (White, at p. 1088.) The court noted that it would be impossible for employers with large work forces to enforce such meal breaks. (Ibid.) It further stated that “employees would be able to manipulate the process and manufacture claims by skipping breaks or taking breaks of fewer than 30 minutes, entitling them to compensation of one hour of pay for each violation. This cannot have been the intent of the California Legislature, and the court declines to find a rule that would create such perverse and incoherent incentives.” (Id. at p. 1089.) We agree with this analysis.

(Slip op., at pp. 10-11.)  The California Courts website has been difficult to access today, so have patience if you are looking for the full opinion there.

I authored a column, published in the Daily Journal, where I discussed the weakness in the Brinker/White economic analysis of employer and employee incentives.  (A Bad Meal Deal: 'Brinker' Gets the Incentive Question Wrong, Daily Journal (Los Angeles), August 6, 2008.)  The same criticisms apply with equal force.  Here is a brief excerpt of that column:

“The fundamental flaw in Brinker's analysis is that it is premised on false assumptions. The idea that it is "impossible" to control breaks is inconsistent with the observable fact that employers of all sizes control employees in a variety of ways every day. In fact, since S. G. Borello & Sons, Inc. v. Department of Industrial Relations, 48 Cal.3d 341 (1989), "[t]he principal test of an employment relationship is whether the person to whom service is rendered has the right to control the manner and means of accomplishing the result desired." As one example of such control, employers habitually set hours of work for their employees. Under the analysis supplied by White and adopted by Brinker, a large employer should find it impossible to control when its employees arrive and depart each day. And yet somehow, they do. The primary manner in which they do so is through a combination of positive and negative incentives. An employee who is punctual and performs well will receive favorable reviews, earn raises or qualify for promotions. A habitually tardy employee may ultimately face termination. For most employees, these combined incentives control their behavior. An employer's failure to modify a recalcitrant employee's behavior is the fault of the employer, not evidence of the impossibility of employee control.

As a result of accepting the White conclusions, Brinker misses many obvious incentives that could overwhelm the financial incentive on an employee to work during a meal break. The potential loss of employment is a larger financial incentive on an employee than an additional hour of pay. Rational employees, working for an employer that enforces its meal break policy, will respond to the larger financial incentive of job retention. Similarly, an employer faces an economic incentive to affirmatively relieve all employees of work duties for 30 minutes during shifts of sufficient length. The employer must then determine whether enforcement of policy is the preferred course to paying meal break premiums. In addition, the employer faces the additional, strong incentive to avoid meal break litigation by employees seeking to recover meal break premium payments. These incentives on employers and employees seem sufficient to overwhelm the singular incentive mentioned in Brown and accepted by Brinker.

(A Bad Meal Deal: 'Brinker' Gets the Incentive Question Wrong, Daily Journal (Los Angeles), August 6, 2008.)  If Courts are considering a discussion of economics as a supporting basis for an opinion's analysis, such Courts would be well advised to either offer a complete discussion of the economic forces at work or avoid the topic entirely.  An incomplete economic analysis in Brinker, and now Brinkley, results in conclusions that don't stand up to scrutiny.

It's very disappointing to see the law premised upon a suspect rationale that individuals without an economics background might not notice.  It creates the appearance, whether accurate or not, of outcome-driven decisions.  The integrity of our legal systems requires our citizens to believe that the law is dispassionately interpreted without a pre-determined outcome in mind.  I don't perceive that to be the case here.

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Court of Appeal reverses order decertifying a class in Harper v. 24 Hour Fitness, Inc.

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Greatsealcal100This is proving to be a busy day in the world of class actions.  And once again, Division Seven in the Second Appellate District is in the mix.  Division Seven seems to be one of those lucky divisions that attracts interesting class action issue appeals (I don't know if they consider themselves "lucky" to be the beneficiaries of these questions).  Just the last year was a busy one for them.  Division Seven recently took some of the sting out of Alvarez v. May Dept. Stores Co., 143 Cal.App.4th 1223 (2006) with their decision in Johnson v. Glaxosmithkline, Inc., 166 Cal.App.4th 1497 (September 19, 2008), as modified (October 14, 2008).  In Lee v. Dynamex (2008) 166 Cal.App.4th 1325 (discussed here), Division Seven reversed an Order denying class certification after the trial court refused to allow discovery of class member identity and contact information.  And in Puerto v. Superior Court (2008) 158 Cal.App.4th 1242, Division Seven added to the body of post-Pioneer decisions confirming the right to discovery putative class member (witness) identity.  And that's just the published decisions.

Division Seven also decided Belaire-West Landscape, Inc. v. Superior Court (2007) 149 Cal.App.4th 554, the first post-Pioneer decision confirming the right to discovery putative class member identity.  Other notable, fairly recent opinions include: Aron v. U-Haul Co. of California (2006) 143 Cal.App.4th 796; Aguiar v. Cintas Corp. No. 2 (2006) 144 Cal.App.4th 121; Singh v. Superior Court (2006) 140 Cal.App.4th 387; Caliber Bodyworks, Inc. v. Superior Court (2005) 134 Cal.App.4th 365; Consumer Cause, Inc. v. Mrs. Gooch's Natural Food Markets, Inc. (2005) 127 Cal.App.4th 387; and, Newell v. State Farm General Ins. Co. (2004) 118 Cal. App. 4th 1094.  There are many substantial class action issues implicated in that list, including fee awards, insurance claims arising out of the Northridge earthquake, PAGA interpretation, and wage & hour law issues.  And the list includes decisions both favorable and unfavorable to positions advocated by the respective class action proponents.  But, uniformly, this Division endeavors to correctly state and apply highly nuanced issues arising in class actions.

Division Seven's latest opinion in the class action arena, Harper v. 24 Hour Fitness, Inc. (October 22, 2008), in a 2-1 opinion, reverses a trial court order decertifying a class action.  The bulk of the opinion examines the trial court's reliance on the pre-Proposition 64 formulation of the UCL.  I will leave discussion of that aspect of the opinion to the UCL Practitioner.  However, the opinion also offers some confirming language as to how the "ascertainability" requisite is measured.  The Court explains that "ascertainability" exists when the class members can tell if they are included, irrespective of whether anyone else knows the constituency of the class:

“With respect to the difficulty in confirming the identity of all class members prior to a determination on the merits, Division One of this court recently affirmed certification of a class consisting of FedEx drivers over FedEx’s objection “the members of this class shifted ‘in and out, sometimes on a day-to-day basis.’” (Estrada v. FedEx Ground Package System, Inc. (2007) 154 Cal.App.4th 1, 14.) The court explained, “The class is ascertainable if it identifies a group of unnamed plaintiffs by describing a set of common characteristics sufficient to allow a member of that group to identify himself as having a right to recover based on the description. [Citation.] [¶] . . . If FedEx’s claim is that every member of the class had to be identified from the outset, FedEx is simply wrong.” (Ibid.; accord, Lee v. Dynamex, Inc., supra, 166 Cal.App.4th at p. 1335; see also Sav-On Drug Stores, supra, 34 Cal.4th at p. 333 [“‘a class action is not inappropriate simply because each member of the class may at some point be required to make an individual showing as to his or her eligibility for recovery’”]; Bufil v. Dollar Financial Group, Inc. (2008) 162 Cal.App.4th 1193, 1207 [class of employees ascertainable in spite of absence of specific rest period records; “speculation that goes to the merits of ultimate recovery [is] an inappropriate focus for the ascertainability inquiry”]; Bell v. Farmers Ins. Exchange (2004) 115 Cal.App.4th 715, 744 [fact that class may ultimately turn out to be overinclusive not determinative; most class actions contemplate eventual individual proof of damages, including possibility some class members will have none].)

(Slip op., at pp. 11-12.)  This is an important distinction.  Too many trial courts succumb to arguments that the class identity can't be explicitly stated at the time of certification.

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BREAKING NEWS: Petition for Review granted in Brinker Restaurant v. Superior Court (Hohmbaum)

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Greatsealcal100The Supreme Court has just GRANTED the Petition for Review in Brinker Restaurant Corporation, et al. v. Superior Court (Hohnbaum).  View the Supreme Court docket here.  Aside from Justice Werdegar, who was absent and did not participate, all other justices voted in favor of the Petition.  As I obliquely suggested in this post, so much for Brinker Restaurant Corporation's prediction that this matter would quietly return to the Superior Court after turning wage & hour class action precedent on its head.

UPDATE:  This post has been marked as "featured" so as to appear first on the home page of this blog while interest in this news remains high.

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Hewlett-Packard Co. v. Superior Court discusses important distinction between certification issues and merits issues

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Greatsealcal100Hewlett-Packard makes very nice laser printers.  And really important class action appellate decisions.  In fact, I wanted to direct attention to this decision when it was released on Friday because it confronts a point of class certification jurisprudence that I have long thought was overlooked: what should the trial court do in the event that a possible defense to a claim exists that could defeat some or all of the class claims?  The Court of Appeal answered this question (in my opinion, correctly) with a resounding "Nothing."

In Hewlett-Packard Co. v. Superior Court (September 26, 2008), the Court of Appeal (Sixth Appellate District) reviewed a petition for a peremptory writ of mandate after a Trial Court refused to decertify a class on the ground that the decision in Daugherty v. American Honda Co., Inc. (2006) 144 Cal.App.4th 824 provided a partial or complete defense to claims, destroying predominance.  Summarizing the core allegation of the complaint, the Court said:

“The complaint alleged that HP had marketed and distributed Pavilion Series Notebook computers, knowing that the computers had defective inverters that could potentially cause dim displays, but without disclosing such defects to consumers; the complaint asserted causes of action for violation of the Unfair Competition Law (Bus. & Prof. Code, § 17200 et seq.), violation of the Consumer Legal Remedies Act (Civ.Code, § 1750 et seq.), breach of express warranty and “Unjust Enrichment.”

(Slip op., at p. 2.)

The decision includes some discussion of warranty claims.  That's not the good part.  The important aspect of Hewlett-Packard Co. is its concise explanation about the demarcation between merits issues and certification issues:

“The crux of plaintiffs’ claim is that certain HP notebook computers contained types of inverters that HP knew would likely fail and cause the screens to dim and darken at some time before the end of the notebook’s “useful life.” HP asserts that under Daugherty, this claim would not establish its liability. Daugherty holds there can be no claim for breach of express warranty or UCL violations arising from proof that the manufacturer knew at the time of the sale that the component part might fail at some point in the future. (Daugherty, supra, 144 Cal.App.4th at pp 838-839.)

While Daugherty may have implications for the merits of underlying action, and indeed may serve to bar claims by plaintiffs that occurred outside the warranty period, it does not affect a determination of class certification. Daugherty is distinguished from the present action because it related to a substantive question on demurrer rather than a procedural question as here on a motion for class certification. And the question in a determination of class certification is “essentially . . . procedural . . . [and] does not ask whether an action is legally or factually meritorious.” (Linder, supra, 23 Cal.4th 429, 439-440, emphasis added.)

If we were to accept HP’s argument regarding the application of Daugherty to the present action, we would be considering the merits of the underlying action. And the question of class certification “does not ask whether an action is legally or factually meritorious.” (Linder, supra 23 Cal.4th at pp. 439-440.) Rather, a ruling on a certification motion determines whether “the issues which may be jointly tried, when compared with those requiring separate adjudication, are so numerous or substantial that the maintenance of a class action would be advantageous to the judicial process and to the litigants.” (Rocha, supra, 7 Cal.3d at p. 238.)

(Slip op., at pp. 8-9.)  Continuing, the Court said:

“In this writ, HP requests that we order the trial court to vacate its order certifying the class because some of the plaintiffs’ claims may be substantively invalid under Daugherty. This is not a proper consideration on the question of class certification. The merits of the case can and will be decided at a later point in this case. Indeed, the trial court noted that stating with regard to Daugherty that it was “neither ruling on the merits of the causes of action not what limits to recovery for any class member might be.”

(Slip op., at p. 10.)  In other words, even if there is a substantial likelihood that the class members' claims will fail due to some defense, consideration of that fact is a merits analysis and ultimately improper.  That, in my experience, is not how trial courts customarily view this situation.

I recall suggesting to one trial court that if the defendant were truly sincere that it was factually innocent, it should stipulate to certification and obtain a defense verdict against the entire class, rather than just one plaintiff.  The court scoffed at my suggestion.  But that, and other certification experiences, has led me to the conclusion that when a trial court perceives a likely defense to claims, certification approaches the impossible.  I've been waiting for a decision that, in plain language, said success or failure of claims is irrelevant to the question of certification.  So there you have it.

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Johnson v. Glaxosmithkline, Inc. analyzes parts of Alvarez-type class action preclusion

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Greatsealcal100It's a bit dicey commenting on an appellate decision that isn't truly final.  By "comment," I mean something more than the soundbites one hears in the media when a high-profile decision is redered ("We're very pleased with this outcome and feel that justice was served...").  And while I'm not going to offer any detailed analysis of this new opinion, Johnson v. Glaxosmithkline, Inc. (September 19, 2008) is news that merits coverage, despite the fact that I contributed in a small way to that appeal.

Readers may know that I was counsel in Alvarez v. May Dept. Stores Co. (2006) 143 Cal.App.4th 1223.  I expressed some of my disappointment with the Alvarez decision in this post.  Since Alvarez, I have watched for signs that would indicate whether the opinion would receive further reinforcement or be limited into irrelevance.  Early signs suggested the later.  Last Friday, the Court of Appeal (Second Appellate District, Division Seven) had an opportunity to take a second look at Alvarez.  In doing so, the Court of Appeal noted the shadow cast over Alvarez by a recent U.S. Supreme Court decision:

“. . . Taylor v. Sturgell, supra, __ U.S. __ [128 S.Ct. 2161] would appear to preclude the use of collateral estoppel to bar absent putative class members from seeking class certification following the denial of a certification motion in an earlier lawsuit at least to the extent Taylor is understood as resting on due process considerations, and not simply federal common law. Because we reverse the trial court’s application of collateral estoppel on different grounds, however, we leave resolution of these important issues to another day.

(Slip op., at p. 15, n. 8.)  The Court noted the possibility that Taylor overruled Alvarez, but didn't go through that door because it found an alternative basis for reversing the trial court.  What the Court did conclude was something akin to, but more detailed in its analysis, than Bufil v. Dollar Financial Group, Inc. (2008) 162 Cal.App.4th 1193.  Specifically, the Court held that, because a prior attempt to certify a nationwide class action was not identical to the class at issue, collateral estoppel did not apply and the Alvarez approach of using a primary rights analysis for assessing the preclusive effect of the denial of class certification was not supportable:

“Moreover, the procedural right to prosecute a claim as a class action, “a means to enforce substantive law” by collectively litigating substantive claims (Washington Mutual Bank v. Superior Court (2001) 24 Cal.4th 906, 918; see Alch v. Superior Court (2004) 122 Cal.App.4th 339, 388), shares none of the characteristics of a “cause of action” as defined by the primary rights theory. (See Crowley v. Katleman, supra, 8 Cal.4th at p. 681 [primary rights theory “provides that a ‘cause of action’ is comprised of a ‘primary right’ of the plaintiff, a corresponding ‘primary duty’ of the defendant, and a wrongful act by the defendant constituting a breach of that duty”].) A primary right in its simplest form is the plaintiff’s right to be free from the particular injury suffered. (Slater v. Blackwood, supra, 15 Cal.3d at p. 795.) The procedural means for protecting that right cannot be confused with the right itself.

(Slip op., at p. 22; see also, p. 16.)  Aside from noting these two points in the opinion, I will leave further analysis and commentary to others . . . at least for now.

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The Pioneer ripples continue to expand in Lee, et al. v. Dynamex, Inc., et al.

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Greatsealcal100Back on August 14th, I commented on yet another decision giving a further boost to the Supreme Court's decision in Pioneer Electronics (USA), Inc. v. Superior Court (Olmstead), 40 Cal.4th 360 (2007), in which the California Supreme Court confirmed the right of plaintiffs to discover the identity and contact information of putative class members.  Discussing Alch v. Superior Court (August 14, 2008) in this post, I commented that it furthered the trend of Belaire-West Landscape, Inc. v. Superior Court, 149 Cal.App.4th 554 (2007) and Puerto v. Superior Court, 158 Cal.App.4th 1242 (2008).  It turns out that appellate courts aren't done reminding parties about the fundamental right to engage in discovery in class actions.

On August September 17, 2008, the Second Appellate District (Division Seven) added to the discussion regarding the substantial right to basic discovery of information about putative class members.  In Lee, et al. v. Dynamex, Inc., et al., the Court of Appeal tied all of the threads emanating from Pioneer together and concluded that the failure to permit discovery about class member identity was grounds for reversing the trial court's order denying class certification:

“After first denying Lee’s motion to compel Dynamex to identify and provide contact information for potential putative class members, the trial court denied Lee’s motion for class certification. Because the trial court’s discovery ruling directly conflicts with the Supreme Court’s subsequent decision in Pioneer Electronics (USA), Inc. v. Superior Court (2007) 40 Cal.4th 360 (Pioneer), as well as our decisions in Belaire-West Landscape, Inc. v. Superior Court (2007) 149 Cal.App.4th 554 and Puerto v. Superior Court (2008) 158 Cal.App.4th 1242 (Puerto), and that ruling improperly interfered with Lee’s ability to establish the necessary elements for class certification, we reverse both orders and remand for further proceedings regarding class certification.

(Slip op., at p. 2.)  In light of Dynamex, defendants must carefully weigh whether to offer any opposition to plaintiffs seeking discovery of the identity and contact information for class members.  A successful opposition to such discovery may lead to a second chance at certification if the trial court denies certification.  In order to control costs and avoid such a result, we may see defendants electing to stipulate to an order to produce such discovery (as the expedient means of satisfying the defendant's obligation to maintain some degree of control over class member contact information).  As an aside, Dynamex had the misfortune of drawing the last panel they would have wanted to review this appeal.  I'd guess that Appellate Justices don't take kindly to trial court decisions that essentially ignore that panel's prior, controlling decisions on the issues confronting the trial court.

The opinion also includes an educational discussion about the "ascertainability" requisite for certification.  In short, the Court of Appeal again reminds us that all class members need not be identified or identifiable at the certification stage.

I'm still trying to catch up after two weeks of depositions out of state.  This has been a busy week for class-related decisions (and the week's not over yet); I'm working through the decisions and other news as fast as I can get to them.

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Petition for Review filed in Brinker

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Although it shouldn't come as a surprise, a Petition for Review in Brinker Restaurant Corporation, et al. v. Hohnbaum, et al (July 22, 2008) was filed with the Supreme Court on August 29, 2008.  The Supreme Court docket is available for viewing here.

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Certification decision Medrazo v. Honda of North Hollywood discusses commonality, ascertainability requisites and the prohibition on merits-based denials

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Greatsealcal100With all the class certification decisions over the years, one might think that there isn't much left to say on the topic that hasn't been said before.  While there is a kernel of truth to that sentiment, many of the governing principles of class action law aren't put into practice by trial courts in a consistent manner.  Reviewing courts occasionally take such opportunities to emphasize what should be well-settled principles.  In Medrazo v. Honda of North Hollywood, the Court of Appeal (Second Appellate District, Division Four) used just such an opportunity to reinforce the appropriate analyses that apply to the "commonality" and "ascertainability" requisites of class certification.  In addition, the Court of Appeal emphasized the prohibtion on merits-based denials by trial courts.

In Medrazo, the Plaintiff alleged that Honda of North Hollywood violated Vehicle Code sections 11712.5 and 24014 by failing to attach a suggested retail price and costs label to motorcycles.  The trial court denied a motion for class certification and an appeal followed.  Starting with the standard for evaluating motions for certification, the Court said:

““As the focus in a certification dispute is on what type of questions -- common or individual -- are likely to arise in the action, rather than on the merits of the case [citations], in determining whether there is substantial evidence to support a trial court’s certification order, we consider whether the theory of recovery advanced by the proponents of certification is, as an analytical matter, likely to prove amenable to class treatment.” (Sav-On Drug, supra, 34 Cal.4th at p. 327.)

(Slip op., at pp. 7-8.)  After articulating the standard, the Court held that the trial court erred when it considered the merits of an affirmative defense as a basis for denying certification.

Next, Medrazo addressed the trial court's determination that common issues of fact or law did not predominate.  Explaining predominance, Medrazo reminded courts and litigants that predominance is not requirement that demands an absence of individualized issues:

““Predominance is a comparative concept, and ‘the necessity for class members to individually establish eligibility and damages does not mean individual fact questions predominate.’ [Citations.] Individual issues do not render class certification inappropriate so long as such issues may effectively be managed. [Citations.] [] Nor is it a bar to certification that individual class members may ultimately need to itemize their damages.” (Sav-On Drug, supra, 34 Cal.4th at p. 334.)

It is true that in this case, each Honda purchaser will be required to establish that there was no hanger tag attached to the motorcycle he or she purchased and/or that the dealer-added costs were not disclosed on the hanger tag [footnote omitted], and all purchasers will be required to establish the suggested retail price of their motorcycles and the amount of dealer-added costs included in their purchases (if it is determined that the class is entitled to a monetary recovery measured by those items). But those individual issues must be compared to the issues that are subject to classwide (or sub-classwide) treatment. Those issues include: (1) whether HNH violated section 11712.5 and section 24014 by selling motorcycles without hanger tags; (2) whether a purchaser who buys a motorcycle sold in violation of section 11712.5 and section 24014 is entitled to restitution, disgorgement, and/or damages, and if so, what is the proper measure of restitution, disgorgement, and/or damages; (3) whether the alleged injury to the purchaser is mitigated by the disclosure of dealer-added costs in a sales agreement; and (4) whether HNH is excused from the requirements of section 11712.5 and section 24014 if the manufacturer does not supply a hanger tag that complies with section 24014.

There is nothing in the record to suggest that the individual issues cannot be effectively managed. Indeed, the record suggests that the resolution of the individual issues will involve mostly undisputed evidence -- presumably, the class members will attest that there were no hanger tags on the motorcycles they purchased, and HNH has admitted it did not attach hanger tags on any Suzuki or Yamaha motorcycles, did not attach them to some of the Honda motorcycles, and has no evidence to show there were hanger tags on any specific motorcycles. That HNH may be hampered in its ability to challenge the class members’ evidence due to its failure to keep records of its casual approach to affixing hanger tags is not a valid reason to deny class certification on the ground that individual issues predominate. In short, the substance and scope of the individual issues pale in comparison to the substance and scope of the common issues.

(Slip op., at pp. 12-13.)  Significantly for plaintiffs, this analysis provides a very concrete roadmap for presenting certification motion for claims based on statutory violations.

Finally, Medrazo explains yet again the fact that ascertainability does not require the Plaintiff to identify the class members at the time certification is determined:

““A class is ascertainable if it identifies a group of unnamed plaintiffs by describing a set of common characteristics sufficient to allow a member of that group to identify himself or herself as having a right to recover based on the description.” (Bartold v. Glendale Federal Bank (2000) 81 Cal.App.4th 816, 828.) While often it is said that “[c]lass members are ‘ascertainable’ where they may be readily identified without unreasonable expense or time by reference to official records” (Rose v. City of Hayward (1981) 126 Cal.App.3d 926, 932; accord, Aguiar v. Cintas Corp. No. 2, supra, 144 Cal.App.4th at p. 135), that statement must be considered in light of the purpose of the ascertainability requirement.

“Ascertainability is required in order to give notice to putative class members as to whom the judgment in the action will be res judicata.” (Hicks v. Kaufman & Broad Home Corp. (2001) 89 Cal.App.4th 908, 914; accord, Aguiar v. Cintas Corp. No. 2, supra, 144 Cal.App.4th at p. 135.) The representative plaintiff need not identify the individual members of the class at the class certification stage in order for the class members to be bound by the judgment. (Daar v. Yellow Cab Co. (1967) 67 Cal.2d 695, 706.) As long as the potential class members may be identified without unreasonable expense or time and given notice of the litigation, and the proposed class definition offers an objective means of identifying those persons who will be bound by the results of the litigation, the ascertainability requirement is met.

(Slip op., at pp. 13-14.)  This, too, is an important point.  It has been my observation that the ascertainability requirement is often twisted beyond recognition, until a trial court concludes that no class definition is workable.  As Bartold notes, what is important at the outset is that the definition be sufficiently specific that a class member viewing the definition knows whether he or she falls within the class definition.  Nobody else needs to know the answer to that question at the point of certification.  Thanks to Medrazo, the context added to the Rose decision may help resolve disingenuos challenges to ascertainability.

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Class discovery rights receive yet another post-Pioneer boost

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Greatsealcal100In Pioneer Electronics (USA), Inc. v. Superior Court (Olmstead), 40 Cal.4th 360 (2007), the California Supreme Court confirmed the right of plaintiffs to discover the identity and contact information of putative class members.  Soon thereafter, Pioneer's anlaysis was extended into the wage & hour setting in Belaire-West Landscape, Inc. v. Superior Court, 149 Cal.App.4th 554 (2007). The Court of Appeal (Second Appellate District, Division Seven), further supported the right of proposed class representatives to engage in discovery in Puerto v. Superior Court, 158 Cal.App.4th 1242 (2008), which confirmed the right of plaintiffs to discover contact information of putative class members and witnesses (who are often putative class members as well).

Today, the Second Appellate District (in a split decision) had even more to say on the issue of basic discovery of information about putative class members.  In Alch v. Superior Court (August 14, 2008), the Court of Appeal granted a Petition for a Writ in a collection of class action lawsuits filed by television writersa gainst studios, networks, production companies and talent agencies, asserting an industry-wide pattern and practice of age discrimination.

The issue of discovery of information about class members arose when:

“The writers served subpoenas on third parties, including the Writers Guild of America, seeking data on Writers Guild members from which they could prepare a statistical analysis to support their claims of age discrimination. A privacy notice was sent to 47,000 Writers Guild members, advising them of their right to object to disclosure of personal information on privacy grounds. Some 7,700 individuals filed objections. The writers moved to overrule the objections. The trial court sustained the objections in their entirety. The writers sought a writ directing the trial court to vacate its order and allow access to certain of the requested information, arguing the information was critical to proving their claims and privacy concerns were minimal.

(Slip op., at p. 3.)  Initially, the writers sought a broad swath of information.  When the trial court denied the motion to overrule objections, the writes sought reconsideration as to certain types of information:

“The writers moved for “clarification and/or reconsideration” of Judge Mortimer’s order, to the extent the order protected “four discrete categories of information” from disclosure. Those categories included (1) date of birth and other basic demographic data, and (2) employment data such as a writer’s employer, job title, credits and dates of employment; in addition, the writers sought (3) “a link for the multiple databases” containing the demographic and employment history information, as well as (4) two types of anecdotal evidence of discrimination against class members: documents containing words or phrases indicating age was a consideration in hiring and documents containing lists of or references to preferred writers. This information, the writers contended, was the bare minimum necessary to litigate their claims of systemic practices of age discrimination. They argued these discrete categories of information were either publicly available, albeit at great cost in time, or not especially sensitive private information. Judge Mortimer denied the motion.

(Slip op., at p. 8.)  The Court of Appeal, in analyzing the Petition, applied the balancing test set forth in Pioneer and Hill v. National Collegiate Athletic Assn., 7 Cal.4th 1 (1994) (Hill).  (Slip op., at p. 11.)  The majority had some sharp comments of rebuke for the Real Parties' arguments:

“Real parties’ argument is, in effect, a claim that, because privacy interests are involved, the writers must prove that the data they seek will prove their case before they may have access to the data. But there is no support in law, or in logic, for this claim. First, we are aware of no precedent, and the employers and agencies cite none, for the proposition that a statistical study must be proved valid in advance of its performance simply because the underlying data is subject to privacy claims. Indeed, we know of no principle requiring subpoenaed information to be proved “admissible” in advance of its production. Second, such a rule would be wholly impractical and unreasonable in the context of class action litigation requiring complex statistical analysis. At this stage of the discovery process, uncertainty is inevitable about the “kind and character” of data contained in the multiple databases that have been subpoenaed from multiple third parties. Some information in the databases doubtless will be, in the end, irrelevant or unusable for any number of reasons, including the subject’s lack of interest or availability for television writing. But that does not mean that the overall body of information subpoenaed – demographic and work history information of Writers Guild members – is not directly relevant and essential to the writers’ case.

(Slip op., at p. 20.)  Perhaps I will no longer hear defendants' counsel demand that I explain the "admissibility" of information sought in discovery.  Perhaps I hope for too much.

In any event, the Court ordered the trial court to permit discovery of (1) work history information, and (2) demographic data.  (Slip op., at pp. 23-28.)  The opinion includes an extensive discussion of privacy interests and coutervailing public policies.  The dissent concludes, essentially, that sufficient information is available from the tens of thousands of non-objecting putative class members to eliminate the compelling need for data from the objecting pool of individuals.  In all, a significant decision.  And I thought nothing significant was going to happen this week.

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The Ninth Circuit makes history of a sort by reversing an employment case class certification denial

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Ninth Circuit SealThese days, it seems as if the Ninth Circuit and its District Courts aren't operating from the same play book.  As has been discussed repeatedly in connection with Brinker Restaurant Corporation, et al. v. Hohnbaum, et al (July 22, 2008), District Courts have repeatedly made news with their decisions undermining wage & hour class actions.  In Brown v. Federal Express Corp., (C.D.Cal. 2008) ___ F.R.D. ___ [2008 WL 906517], a district court concluded that a claim of meal period violations was not amenable to class treatment because the court would be "mired in over 5000 mini-trials" to determine if such breaks were provided.  Another District Court opinion (White v. Starbucks Corp., 497 F.Supp.2d 1080 (N.D. Cal. 2007)) refused to hold that employers must ensure that their employees take meal breaks. The White v. Starbucks Corp. court guessed that the California Supreme Court, if deciding the issue, would require only that an employer offer meal breaks, without forcing workers to take those breaks.

Instead of joining with the district court, the Ninth Circuit has pushed in the opposite direction.  For example, in an unpublished opinion, the Ninth Circuit reversed a substantial portion of a District Court order denying class certification in a wage and hour class action entitled Sepulveda v. Wal-Mart Stores, Inc. Recently, the Ninth Circuit went a step further.  In Parra v. Bashas', Inc. (9th Cir. July 29, 2008) ___ F.3d ___, the Ninth Circuit made history (in the Circuit), when it reversed a denial of class certification in a wage & hour class action where the denial of certification was predicated on lack of commonality:

“Although this circuit has, up to now, never reversed a district court finding that commonality was lacking in an employment suit, other circuits have. See, e.g., Forbush v. J.C. Penny Co., 994 F.2d 1101, 1106 (5th Cir. 1993); Cox v. Am. Cast Iron Pipe Co., 784 F.2d 1546, 1557 (11th Cir. 1986); Paxton v. Union Nat’l Bank, 688 F.2d 552, 561 (8th Cir. 1982).

(Slip op., at p. 9641.)  It's only a matter of time before all of this wage & hour employment law matter and anti-matter collide and destroy the planet.

[Via UCL Practitioner and Alaska Employement Law]

UPDATE:  The problem with the title of this post has been corrected.

UPDATE 2:  An astute reader points out that I was a bit sloppy with my labels in this post.  The case involves employment law claims (discrimination issues), which do not fall into the subset of employment law claims referred to as "wage & hour" cases.  As a very general proposition, many of the policies that govern "wage & hour" cases govern all employement law cases.  However, there are special policy considerations that govern matters like discrimination cases such that the distinction between "employment law" and "wage & hour" is not necessarily irrelevant.  I actually appreciate the correction because I strive for accuracy.

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