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Cal. Supreme Court Issues Opinion in Reid v. Google, Rejecting Strict Application of Stray Remarks Doctrine in Cal. Discrimination Cases

In Other Cases of Interest on August 5, 2010 at 12:53 pm
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The California Supreme Court today issued its decision in Reid v. Google.  The Court rejected strict application of the stray remarks doctrine in California discrimination cases.  Under this doctrine, statements that non-decision-makers make or that decision makers make outside of the decisional process are deemed stray, and they are irrelevant and insufficient to avoid summary judgment.

Plaintiff Brian Reid filed an age discrimination lawsuit against his former employer, Google, Inc. The trial judge, Hon. William J. Elfving, granted Google‘s summary judgment motion relating to plaintiff‘s claims. The Court of Appeal reversed.

The Court decided two issues:

  1. Does a trial court‘s failure to rule on a party‘s evidentiary objections relating to a summary judgment motion waive the objections on appeal?
  2. Should California courts follow the federal courts in adopting the stray remarks doctrine in employment discrimination cases?

The Court of Appeal found that the trial court’s failure to issue express rulings on evidentiary objections did not waive those objections on appeal.  And the Court of Appeal further refused to apply the stray remarks doctrine to exclude alleged discriminatory statements that Reid‘s supervisors and coworkers made.

The Supreme Court agreed with the Court of Appeal’s conclusions:

Regarding the waiver issue, the Court of Appeal correctly determined that a finding of waiver does not depend on whether a trial court rules expressly on evidentiary objections and that Google‘s filing of written evidentiary objections before the summary judgment hearing preserved them on appeal. (Code Civ. Proc., § 437c, subds. (b)(5), (d).)  After a party objects to evidence, the trial court must then rule on those objections. If the trial court fails to rule after a party has properly objected, the evidentiary objections are not deemed waived on appeal.

Regarding the stray remarks issue, the Court of Appeal also correctly determined that application of the stray remarks doctrine is unnecessary and its categorical exclusion of evidence might lead to unfair results.

Robin Weideman of the California Labor & Employment Law Blog gives a nice analysis of the stray remarks portion of today’s ruling.

The attorneys for plaintiff and appellant were Barry L. Bunshoft, Ray L. Wong, Paul J. Killion, Lorraine P. Ocheltree, Eden E. Anderson and Allegra A. Jones.  Charlotte E. Fishman for California Employment Lawyers Association filed an Amicus Curiae on behalf of Plaintiff and Appellant.  Thomas W. Osborne, Melvin Radowitz and Barbara A. Jones for AARP also filed an Amicus Curiae on behalf of Plaintiff and Appellant.

The attorneys for defendant and respondent were Fred W. Alvarez, Marina C. Tsatalis, Amy K. Todd, Marvin Dunson III, Koray J. Bulut, Elizabeth C. Tippett, Jeanna Steele, Gary M. Gansle of Wilson Sonsini and Paul W. Cane, Jr. of Paul Hastings.  Greines, Martin, Stein & Richland and Robert A. Olson for Association of Southern California Defense Counsel filed an Amicus Curiae on behalf of Defendant and Respondent.  Orrick, Herrington & Sutcliffe‘s Gary S. Siniscalco, Patricia K. Gillette, Greg J. Richardson and Lynne C. Hermle on behalf of the Employers Group and California Employment Law Council also filed an Amici Curiae on behalf of Defendant and Respondent. Jonathan B. Steiner, Jay-Allen Eisen, Jon B. Eisenberg, Dennis A. Fischer, Steven L. Mayer, Robert A. Olson, Douglas R. Young, and Robin Meadow also filed an Amicus Curiae.

By CHARLES H. JUNG

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Central District Approves $4,385,000 and 30% Attorney Fee Award in Class Settlement of Cicero v. DirecTV, Inc.

In Attorney's Fees, Class Actions, Settlement on August 5, 2010 at 10:47 am
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Judge Avern Cohn of the Central District of California approved a wage and hour class settlement in Cicero v. DirecTV, Inc., 2010 WL 2991486 (C.D. Cal. July 27, 2010) (not reported).  Judge Cohn approved a payout fund to class members of $4,385,000, a 30% attorney fee award of $1,950,000 to class counsel, and incentive awards of $7,500 and $5,000 the representative plaintiffs.

The class action claimed violations of California’s wage and hour laws.  The named plaintiffs are former satellite television installation and service technicians who brought this case individually and on behalf of all other similarly situated current and former satellite installation and/or service technicians against their former employers Mountain Center, Inc., and Ironwood Communications Inc. (currently DirecTV, Inc. doing business as DirecTV Home Services, collectively “Defendant”) for allegedly violating California’s labor and unfair competition laws. Named Plaintiffs alleged that Defendant violated applicable provisions of the Industrial Welfare Commission’s (“the IWC”) Wage Orders, the Labor Code, and the Business and Professions Code by: (1) failing to provide employees duty-free meal periods; (2) failing to reimburse employees for tools necessary to the performance of the employees’ work; (3) failing to pay wages for all hours worked, including hours worked in excess of eight per day and forty per week; (4) failing to pay all wages owed employees upon termination of the employment relationship; and (5) failing to provide accurate wage statements.

The parties engaged in two mediations of the matter before the Hon. William Cahill (Ret.) in March, 2009, and subsequently before the Hon. Diane Wayne (Ret.).

The Court approved the attorneys’ fees request, which represented 30% of the total gross settlement amount.  The Court noted that:

California recognizes the common fund doctrine for the award of attorneys’ fees. Under California and Ninth Circuit precedent, a court has discretion to calculate and award attorneys’ fees using either the lodestar method or the percentage-of-the-fund method. Wersha v. Apple Computer, Inc., 91 Cal.App. 4th 224, 253 (2001); Vizcaino v. Microsoft Corp., 290 F.3d 1043 (9th Cir.2002). The Court, in its discretion, finds that the percentage method is a fair, reasonable, and appropriate method for awarding attorneys’ fees in this case. . . .

Overall, although this percentage is slightly higher than the 25% benchmark for fees in class action cases, it is consistent with other wage and hour class actions where the recovery is less than $10 million. Moreover, there have been no objections to the amount of attorneys’ fees. The Court therefore finds that the amount of attorneys’ fees is warranted by the complexity of the case and Class Counsel’s dedication of extraordinary time and resources to the prosecution of this claim.

Id. **6-7.

By CHARLES H. JUNG

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Second District Court of Appeal Holds That “in the vast majority of wage and hour disputes, class suitability should not be determined on demurrer.”

In Cal. State Court, Class Actions, Demurrer on August 5, 2010 at 10:11 am
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This next case highlights the difficulty of successfully eliminating a wage and hour class action in California at the demurrer stage.  After 3 bites at the apple, the trial judge in Gutierrez v. California Commerce Club, Inc., 2010 WL 2991875 (Cal. Ct. App. 2d Dist. August 02, 2010) (not reported) sustained without leave to amend the defendant California Commerce Club, Inc.’s (“Club”)  demurrer to plaintiff’s third amended complaint on the ground the plaintiffs had failed to show the existence of a class, and dismissed the action as to all representative claims.  In a 3-0 opinion, Justice Jeffrey J. Johnson, writing for the Second District Court of Appeal, reversed the trial court’s order.

Putative class representatives Sergio Gutierrez and Hector Salazar filed the operative third amended class action complaint against the Club, alleging, among other things, that they and other similarly situated members of the putative class were injured by the Club’s unlawful policy and practice of denying meal and rest breaks to certain hourly, non-union employees.

The Court of Appeal held that “In this action, as in the vast majority of wage and hour disputes, class suitability should not be determined on demurrer.”

Plaintiffs alleged that, pursuant to a Club policy or practice, they and similarly situated hourly, non-union employees have been denied meal and rest breaks to which they are legally entitled, or compensation therefor.  The Court reasoned that “[o]n these allegations, it is clear that the Club liability, if any, to the class as a whole, can be determined by reviewing a single or set of facts common to all.” Id. *6.  The Court wrote:

We return again to and rely upon the well-established principle, that “only in mass tort actions (or other actions equally unsuited to class action treatment) [should] class suitability … be determined at the pleading stage. In other cases, particularly those involving wage and hour claims, [such as the instant action,] class suitability should not be determined by demurrer.” ( Prince, supra, 118 Cal.App.4th at p. 1325, italics added; see also Tarkington, supra, 172 Cal.App.4th at p. 1512.).  Id.

We will reverse the order dismissing the action following the sustaining without leave to amend of the demurrer to the TAC based on the trial court’s finding that the pleading failed “to allege facts sufficient to show the existence of a class.” It was premature for the trial court to make determinations pertaining to class suitability on demurrer. The allegations of the operative complaint are sufficient to move the action beyond the pleading stage.

Id. *6.

The appeal was taken from an order of Judge Aurelio Munoz of the Superior Court of Los Angeles County. (Judge Munoz is a retired judge of the L.A. Sup. Ct. assigned by the Chief Justice pursuant to art. VI, § 6 of the Cal. Const.).  Matthew J. Matern and Thomas S. Campbell appeared for Plaintiffs and Appellants.  Anna Segobia Master and Jennifer Rappoport appeared for Defendant and Respondent.

By CHARLES H. JUNG

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