Another Court of Appeal lines up behind Cohen v. DIRECTV, Inc.

Bad facts make bad law.  Presumably the corollary is that good facts make good settlements, and never become law.  And this is all relevant to the recent decision from the Court of Appeal (Second Appellate District, Division Three).  In Davis-Miller v. Automobile Club of Southern California (pub. Nov. 22, 2011), the Court considered consolidated appeals of the denial of class certification in a case concerning a roadside battery service program that provides jump-starts and sells and installs batteries for stranded motorists.

The trial court concluded that common issues did not predominate.  In particular, the trial court credited evidence showing that most class members needed the batteries they were sold and very few class members were exposed to the alleged false advertising about the roadside assistance program.  Thus, concluded the trial court, commonality could not be satisfied.  Whether you agree with that conclusion depends, in part, upon where you come down on the issue of classwide reliance in UCL cases.  How you apply this case beyond its facts also depends on your point of view.

The Davis-Miller Court embraced the Cohen v. DIRECTV, Inc., 178 Cal. App. 4th 966 (2009) treatment of Tobacco II.  But it did so in the face of sharp criticism.  Steroid Product Hormone Cases concluded that Cohen appeared to have disregarded Tobacco II, saying:

We agree that Tobacco II did not dispense with the commonality requirement for class certification. But to the extent the appellate court's opinion might be understood to hold that plaintiffs must show class members' reliance on the alleged misrepresentations under the UCL, we disagree. As Tobacco II made clear, Proposition 64 did not change the substantive law governing UCL claims, other than the standing requirements for the named plaintiffs, and "before Proposition 64, 'California courts have repeatedly held that relief under the UCL is available without individualized proof of deception, reliance and injury.'[Citation.]" (Tobacco II, supra, 46 Cal.4th at p. 326.)

So how does one resolve this conflict?  Literally applying Tobacco II, its seems inconsistent with the Supreme Court's construction of the UCL to apply any evidence associated with reliance to class claims.  If the named plaintiff has standing, that's the end of the inquiry.  The "likely to deceive" standard of the fraudulent prong of the UCL has not been repealed or changed.  New standing requirements apply only to the named class representative. 

Pragmatically, of course, it's a different story.   Many courts philosophically disagree with the UCL's amalgamation of strict liability and quasi-fraud theories.  Then again, legislation is the perogative of the legislature.  Until the legislature or another ballot initiative changes the UCL's scope substantively, it should be applied consistent with its plain language and the construction supplied by the California Supreme Court.

CM/ECF errors in the Central District?

Some time in the last week my address and e-mail information reverted back to old information in the CM/ECF system for the Central District of California.  It happened to at least one other attorney.  Have you heard about this happening to anyone else?

Oral argument comes and goes in Brinker; many prognosticators see a Court rejecting the "ensure" standard

Oral argument was finally held in Brinker last week.  Wagering on appellate court outcomes after listening to oral arguments is not a smart use of gambling funds in most instances, and it seems dangerous here as well.  But most assessments of the argument seem to agree on two things.  First, the consensus is that the Justices appeared to direct a more critical set of questions to plaintiffs' counsel, Kimberly Kralowec, on the issue of whether employers must "ensure" that meal periods are taken, rather than simply "provide" employees with an opportunity to take a meal period.  Second, on the issue of when a meal must occur, at least Justice Liu appeared to take exception with an interpretation that would allow an employer to schedule meal period after more than five hours of work.

Here are a few examples of coverage of or opinions about the oral argument:

• Howard Mintz, California Supreme Court hears arguments in showdown over worker rest and meal breaks (November 8, 2011) San Jose Mercury News
• Alison S. Hightower, What is the duty to "provide" a meal period? Oral argument before the California Supreme Court in Brinker Restaurant Corp. v. Superior Court (November 8, 2011) Lexology
• Kathy Robertson, Supreme Court wages hearing focuses on enforcing meal breaks (November 8, 2011) Sacramento Business Journal

In something approximating 90 days we will finally know the answer to this great mystery.

Remand of Sonic-Calabasas A, Inc. v. Moreno may provide more guidance on status of arbitration defenses in California

On Monday, October 31, 2011 (hello, Halloween), the United States Supreme Court issued the following Order:

10-1450 SONIC-CALABASAS A, INC. V. MORENO, FRANK The petition for a writ of certiorari is granted. The judgment is vacated, and the case is remanded to the Supreme Court of California for further consideration in light of AT&T Mobility LLC v. Concepcion, 563 U.S. ___ (2011).

In Sonic Calabasas A, Inc. v. Moreno (2011), reported at 51 Cal. 4th 659, a divided California Supreme Court (4-3) concluded that (1) "Berman" hearings are an unwaivable statutory right, (2) arbitration is an acceptable alternative to de novo review by the Superior Court, (3) a waiver of the right to a "Berman" hearing before the Labor Commissioner is against public policy, and (4) the waiver of a "Berman" hearing is unconscionable under standard contractual principles of unconscionability analysis.

What does this mean?  It means that the underpinnigs of Gentry may be explored in the follow-up opinion.  It also means that the new Justices, including the new Chief Justice of the California Supreme Court, may be deciding votes, given that Chief Justice George was in the majority and Justice Moreno authored the original opinion.