Law-less Friday (a day early): paragraphs you never thought you'd read in court opinions

Every now and then I look at a new appellate decision and experience the shock of reading something that I would have guessed was certain to never come up before seeing it in print.  So I was helping my daughter study for a history test the other day.  Her fifth grade class was in a chapter about American industrialization and the expansion of the United States to the Pacific (manifest destiny and all that). The war with Mexico received a mention in her study guide, along with a treaty entered into with Mexico at the end of the war, the Treaty of Guadalupe Hidalgo.  Trick question: what are the chances that an appellate decision today would rest, in part, on the need to examine the Treaty of Guadalupe Hidalgo? You should say "zero," but, since I asked, you know that's not the answer.  The correct answer is, ding ding ding, 100%.

In Friends of Martin's Beach v. Martin's Beach 1 LLC (April 27, 2016) the Court of Appeal (First Appellate District, Division Two) considered issues arising in a dispute between private land owners and the public over an area of inland dry sand at a popular beach.  Here is the paragraph that resulted in my double-take:

The case presents a number of intriguing issues, among them the meaning of Article X, section 4 of the California Constitution and its application, if any, to lands for which title is derived from a provisional Mexican land grant confirmed by a federal patent issued in the 19th century. These issues require consideration of a federal statute known as the Act of 1851 and the Treaty of Guadalupe Hidalgo, which that Act implemented. The case also concerns the common law theory of dedication of land to public use and what facts suffice to establish the elements of such a claim. Creating yet additional interest, the State of California and its agencies contend in an amicus brief that they were indispensable parties to this action because it involves California tidelands and that the judgment rendered without them is void.

Slip op., at 1-2. As an aside, if these issues also sound "intriguing" to you, you are officially a law nerd.

Today's lesson: Never say never.

Allstate tests new method for mooting class claims; falls short in Chen v. Allstate Ins. Co.

Normal people see laws as barriers. Lawyers see laws as an agility course.  After Pitts v. Terrible Herbst, Inc., 653 F.3d 1081 (9th Cir. 2011) and Gomez v. Campbell-Ewald Co., 768 F.3d 871 (9th Cir. 2014), aff’d, 136 S. Ct. 663 (2016), you'd have to forgive ordinary citizens for thinking that the question of whether you can moot a class action by offering up full individual relief to the putative class representative was pretty well settled. But where some see finality, Allstate insurance saw...opportunity.  Specifically, Allstate looked to Campbell-Ewald Co. v. Gomez, 136 S. Ct. 663 (2016) for the secret to mooting class representative claims.  In Chen v. Allstate Inc. Co. (9th Cir. Apr. 12, 2016), the Ninth Circuit sent the wily insurance coyote back to the drawing board.

The plaintiffs filed a class action complaint against Allstate, alleging he received unsolicited automated telephone calls to his cellphone, in violation of the Telephone Consumer Protection Act (TCPA). Before a motion for class certification had been made, Allstate made an offer of judgment to the plaintiffs under Rule 68 of the F.R.C.P., depositing $20,000 in full settlement of individual monetary claims in an escrow account “pending entry of a final District Court order or judgment directing the escrow agent to pay the tendered funds to Pacleb, requiring Allstate to stop sending non-emergency telephone calls and short message service messages to Pacleb in the future and dismissing this action as moot.”  Slip op. at 4, 7.  Allstate extended the Rule 68 offer beyond 14 days and then moved for entry of judgment and dismissal.  One plaintiff accepted the offer while the motion was pending.

The district court denied the motion, holding that, under Pitts v. Terrible Herbst, Inc., 653 F.3d 1081 (9th Cir. 2011), the plaintiff's class allegations presented a justiciable controversy and rejected the notion that Pitts was no longer good law.  The district court later certified the issue for interlocutory appeal.

On appeal, Allstate asked the Court to take up the hypothetical issue raised in Campbell-Ewald, which was whether the deposit of the full amount of a plaintiff's individual claim in an account payable to the plaintiff, followed by entry of judgment for the plaintiff in that amount, is sufficient to moot the case.  Allstate argued that the judgment it consented to would offer complete relief, the district should be compelled to enter judgment on those terms, mooting the plaintiff's individual claims, and the remaining class allegations would then be insufficient to preserve a live controversy.  While the Court agreed with the first contention, it rejected the second and third contentions.

The Court began by reviewing the relief that Allstate had consented to in the district court.  Considering both the monetary and injunctive aspects of that relief, the Court found that complete individual relief was offered.  Slip op., at 12-14.

Next, the Court considered whether the decision in Genesis Healthcare Corp. v. Symczyk, 133 S. Ct. 1523 (2013) vitiated Pitts.  The Court concluded that it did not:

In Gomez, 768 F.3d at 875–76, however, we squarely rejected that very argument. Because Genesis Healthcare concerned collective actions brought under the Fair Labor Standards Act (FLSA) rather than class actions under Federal Rule of Civil Procedure 23, Gomez held Pitts was not clearly irreconcilable with Genesis Healthcare. See id. Although Genesis Healthcare “undermined some of the reasoning employed in Pitts . . . , courts have universally concluded that the Genesis discussion does not apply to class actions.” Id. at 875. “In fact, Genesis itself emphasizes that ‘Rule 23 [class] actions are fundamentally different from collective actions under the FLSA.’” Id. at 875–76 (alteration in original) (quoting Genesis Healthcare, 133 S. Ct. at 1529).

Slip op., at 16.  The Court then held that it was bound by Gomez, which was decided en banc.

Next, the Court went further, holding that even if Pitts were not controlling, the Court would reject an attempt to moot the action prior to a fair opportunity to move for class certification.  The Court noted that placing funds in an escrow account was not the same as the actual receipt of all relief by a plaintiff.  This will likely just bait the next enterprising defendant into actually tendering the funds into an account in the name of the plaintiff to see if the outcome is any different (remember, there are no obstacles, only new paths).

Finally, the Court considered whether to order the district court to enter judgment.  The Court concluded that doing so would be inconsistent with Campbell-Ewald, which affords a putative class representative with a live claim a fair opportunity to show certification is warranted:

Even if that is true, however, Campbell-Ewald clearly suggests it would be inappropriate to enter judgment under these circumstances. As Campbell-Ewald explained, “[w]hile a class lacks independent status until certified, a would-be class representative with a live claim of her own must be accorded a fair opportunity to show that certification is warranted.” Campbell-Ewald, 136 S. Ct. at 672 (emphasis added) (citation omitted) (citing Sosna, 419 U.S. at 399). Accordingly, when a defendant consents to judgment affording complete relief on a named plaintiff’s individual claims before certification, but fails to offer complete relief on the plaintiff’s class claims, a court should not enter judgment on the individual claims, over the plaintiff’s objection, before the plaintiff has had a fair opportunity to move for class certification.

Slip op., at 22-23.  The Court noted the long-recognized principle that class relief is the only feasible relief in many circumstances and concluded that "a district court should decline to enter a judgment affording complete relief on a named plaintiff’s individual claims, over the plaintiff’s objection, before the plaintiff has had a fair opportunity to move for class certification." Slip op., at 26.

The Court affirmed the district court.

If you anticipate that the Supreme Court will take up the first case to test its Genesis Healthcare hypothetical, don't hold your breath. If anything, the Supreme Court would want to see more than one Circuit tackle the issue and see if a significant split develops before wading back into these waters. That doesn't mean that enterprising defendants won't look for another way to moot class claims before certification.

Pull up a chair...and listen to the nightmarish tale of....suitable seating (in Kilby v. CVS Pharmacy, Inc.)

I can still remember when the first suitable seating cases were filed.  I reckon' it happened right about the time that the wage & hour landscape became unsettled in the meal period and rest break areas, class certification decisions were all over the place prior to Brinker, and PAGA claims were getting a long look as an alternative and supplemental approach to class claims.  The suitable seating cases went through an initial wave of appellate court analysis, but, without California Supreme Court guidance on the issue, federal courts were left to speculate about what the California Supreme Court would say on the matter.  The Ninth Circuit addressed that lack of clarity by certifying questions to the California Supreme Court.  In Kilby v. CVS Pharmacy, Inc. (April 4, 2016), the California Supreme Court answered those questions.

The questions, as posed by the Ninth Circuit were:

(1) Does the phrase “nature of the work” refer to individual tasks performed throughout the workday, or to the entire range of an employee’s duties performed during a given day or shift? 

(2) When determining whether the nature of the work “reasonably permits” use of a seat, what factors should courts consider?  Specifically, are an employer’s business judgment, the physical layout of the workplace, and the characteristics of a specific employee relevant factors? 

(3) If an employer has not provided any seat, must a plaintiff prove a suitable seat is available in order to show the employer has violated the seating provision? 

Slip op., at 2.  The short answers (which were followed by an extensive discussion) are:

(1) The “nature of the work” refers to an employee’s tasks performed at a given location for which a right to a suitable seat is claimed, rather than a “holistic” consideration of the entire range of an employee’s duties anywhere on the jobsite during a complete shift.  If the tasks being performed at a given location reasonably permit sitting, and provision of a seat would not interfere with performance of any other tasks that may require standing, a seat is called for. 

(2) Whether the nature of the work reasonably permits sitting is a question to be determined objectively based on the totality of the circumstances.  An employer’s business judgment and the physical layout of the workplace are relevant but not dispositive factors.  The inquiry focuses on the nature of the work, not an individual employee’s characteristics. 

(3) The nature of the work aside, if an employer argues there is no suitable seat available, the burden is on the employer to prove unavailability. 

Slip op., at 2.  Before looking at any of the more interesting parts of the Court's discussion, we now know with certainty that suitable seating is a task-based, not a position-based, requirement.  And I immediately concluded after reading this opinion that I wanted to start a business that specializes in making narrow and light barstool-style swivel chairs for cashiers in the retail and grocery sectors.  That's where the real money is going to be found.

Anyhow, chair empire plans aside, the Court began by explaining the history of the IWC and the suitable seating provision in the various wage orders.  Next, the Court looked at pronouncements on the most recent standard by the IWC and DLSE. For instance, the Court took note of a DLSE amicus curiae brief filed in a federal action:

[T]he DLSE filed an amicus curiae brief in Garvey v. Kmart Corp. (N.D.Cal. Dec. 18, 2012, No. CV 11-02575 WHA) 2012 WL 6599534 (Garvey), a federal class action suit claiming Kmart cashiers were entitled, under section 14(A), to seats while working.  The DLSE emphasized reasonableness as the guiding standard:  “If called upon to enforce Section 14, DLSE would apply a reasonableness standard that would fully consider all existing conditions regarding the nature of the work performed by employees.  Upon an examination of the nature of the work, DLSE would determine whether the work reasonably permits the use of seats for working employees under subsection (A) of Section 14, and whether proximate seating has been provided for employees not engaged in active duties when such employees are otherwise required to stand under subsection (B).”

Slip op., at 11.  After reviewing the DLSE and IWC commentary on the suitable seating requirement, the Court then set about the task of examining the IWC wage order language. After reviewing the language, the Court rejected the defendants' position that jobs should be classified as "sitting" jobs or "standing" jobs:

Defendants’ argument sweeps too broadly and is inconsistent with the purpose of the seating requirement.  As discussed, the IWC’s wage orders were promulgated to provide a minimum level of protection for workers.  The requirement’s history reflects a determination by the IWC that “humane consideration for the welfare of employees requires that they be allowed to sit at their work or between operations when it is feasible for them to do so.”  (IWC, Statement of Findings by the Industrial Welfare Commission of the State of Cal. in Connection with the Revision in 1976 of its Orders Regulating Wages, Hours, and Working Conditions (Aug. 13, 1976) p. 15.)  Defendants’ proposed consideration of all tasks included in an employee’s job description ignores the duration of those tasks, as well as where, and how often, they are performed.  This all-or-nothing approach could deprive an employee of a seat because most of his job duties are classified as “standing” tasks, even though the duration, frequency, and location of the employee’s most common tasks would make seated work feasible while performing them.  There is no principled reason for denying an employee a seat when he spends a substantial part of his workday at a single location performing tasks that could reasonably be done while seated, merely because his job duties include other tasks that must be done standing.

Slip op., at 14.  The Court expressed concern that the all-or-nothing approach could result in a situation where two employees performing the same task could have different seating rights, based on the overall classification of their job. Yet, the Court also found the plaintiffs' position too narrow, focusing on a single task to determine if that one task could be performed seated.  The Court found that focusing on the work done and the tasks performed in a location alleviated the problems created by both the defendants' approach and the plaintiffs' approach.

The Court then examined the "reasonably permits" portion of the seating requirements. The Court found that the employer's assessment of overall job performance (its business judgment) was a factor that could be considered, as was the physical layout of the workplace .  These factors, however, must be considered "in light of the overall aims of the regulatory scheme, which has always been employee protection."  The Court disagreed that differences between employees was a factor, since the regulation focused on the "work," and not the "worker."

Finally, the Court swiftly rejected the idea that a plaintiff must prove that a suitable seat is available, after showing that the nature of the work would reasonably permit the use of a seat.

The Court concluded by saying, "Sit on that."  No, not really.  But the Court was unanimous.