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Archive for the ‘Class Actions’ Category

Meal and Rest Break Class Can Be Determined on Class-wide Basis

In Certification, Class Actions, Meal and Rest Breaks on May 13, 2013 at 9:15 pm
Coco-park-security-guard

Coco-park-security-guard (Photo credit: Wikipedia)

On Friday, the Fourth District reversed the denial of a certification of a meal and rest break class of security guards.  Faulkinbury v. Boyd & Associates, Inc., No. G041702, __ Cal. App. 4th. __ (4th Dist. May 10, 2013).  The court reconsidered in light of the California Supreme Court decision in Brinker Restaurant Corp. v. Superior Court, 53 Cal.4th 1004 (2012), and concluded that the primary issue was the legality of certain company policies, which could be determined on a class-wide basis, even if the application of the policies varied by individual. More later.

Judges & Attorneys

Justice Richard D. Fybel delivered the opinion for the court.  Acting Presiding Justice William F. Rylaarsdam and Associate Justice Eileen C. Moore concurred.

Appeal from an order of the Superior Court of Orange County, Gail Andrea Andler, Judge.

Saltzman, Stanley D. Saltzman, Christina A. Humphrey, Craig Pynes; Class Action Litigation Group, Renee L. Barge; Law Office of Lawrence A. Witsoe, Lawrence A. Witsoe; White & Roseman and Leslie Roseman for Plaintiffs and Appellants.

LightGabler, Jonathan Fraser Light and Angela V. Lopez for Defendant and Respondent.

By CHARLES H. JUNG

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Class Action Settlement Approval Reversed Where Class Representative Incentive Awards Conditioned on Settlement Support

In Class Actions, Incentive Award on April 22, 2013 at 9:32 pm
Sometimes money is a powerful incentive.

Sometimes money is a powerful incentive. (Photo credit: wayneandwax)

The Ninth Circuit today reversed a trial court’s approval of a class action settlement against credit reporting agencies under the Fair Credit Report Act, citing a failure by the class representatives and class counsel to adequately represent the class.  Radcliffe, et al v. Experian Information Solutions, Inc., et al., Case No. 11-56376, __ F.3d __ (Apr. 22, 2013).  The court took issue with the incentive awards to the class representatives that were conditioned on the class representatives’ support for the settlement.  The court reasoned that these conditional awards caused a divergence of interests between the representatives and the class:

These conditional incentive awards caused the interests of the class representatives to diverge from the interests of the class because the settlement agreement told class representatives that they would not receive incentive awards unless they supported the settlement.

You can read more here.

By CHARLES H. JUNG

Second District Holds That Piece Rate Employees Must Be Paid Separate Hourly Minimum Wage

In Averaging, Cal. State Court, Class Actions, Experts, Minimum Wage, Piece Rate, Use of Experts to Show Class Damages on April 2, 2013 at 4:02 pm
mercedes-driver at it’s best

mercedes-driver at it’s best (Photo credit: *MarS)

Today the Second District ordered published Gonzalez v. Downtown LA Motors, LP, et al., Case No. B235292, __ Cal. App. 4th __ (2d Dist. Mar. 6, 2013).  Gonzalez is a wage and hour class action where the question presented was whether California’s minimum wage law requires an employer that compensates its automotive service technicians on a “piece-rate” basis for repair work must also pay those technicians a separate hourly minimum wage for time spent during their work shifts waiting for vehicles to repair or performing other non-repair tasks directed by the employer.  Defendant automobile dealership contended it was not required to pay the technicians a separate hourly minimum wage for such time because it ensured that a technician’s total compensation for a pay period never fell below what the employer refers to as the “minimum wage floor” — the total number of hours the technician was at work during the pay period (including hours spent waiting for repair work or performing non-repair tasks), multiplied by the applicable minimum wage rate.  The employer supplemented pay, if necessary, to cover any shortfall.

The Court of Appeal concluded that class members were entitled to separate hourly compensation for time spent waiting for repair work or performing other non-repair tasks directed by the employer during their work shifts, as well as penalties under Labor Code section 203, subdivision (a).

The Court also affirmed the award of waiting time penalties in the amount of $237,840.

There is substantial evidence in the record to support an implied finding of willfulness. Read the rest of this entry »

U.S. Supreme Court Reverses Class Certification, Rejecting Damages Model

In 23(b)(3) Class, Certification, Class Actions, Class vs. Merits Discovery, Damages, Damages Experts, Experts, Use of Experts to Show Class Damages on March 27, 2013 at 4:07 pm
Comcast Cables

Comcast Cables (Photo credit: dmuth)

In a class action ruling that may impact employers’ attacks on wage & hour class certification motions, the U.S. Supreme Court issued a 5 to 4 ruling today reversing certification of a proposed antitrust class action.  See Comcast Corp., et al. v. Behrend, et al., No. 11-864, 569 U.S. ___ (Mar. 27, 2013).  Justice Scalia, writing for the Court, concluded that the class was improperly certified under Rule 23(b)(3) because plaintiff’s damages model fell short of establishing that damages can be measured classwide.  The District Court and Third Circuit approved certification of a class of more than 2 million current and former Comcast subscribers who sought damages for alleged violations of the federal antitrust laws.

At the trial court level, plaintiffs proposed four theories of antitrust impact, only one of which–the “overbuilder” theory–the trial court accepted.  To establish damages, plaintiffs relied solely on the testimony of Dr. James McClave, who designed a regression model comparing actual cable prices in one area with hypothetical prices that would have prevailed but for defendant’s allegedly anticompetitive practices.  Dr. McClave acknowledged that the model did not isolate damages resulting from any one theory of antitrust impact.  Id. at 4.

The Supreme Court held that the class was improperly certified.

By refusing to entertain arguments against respondents’ damages model that bore on the propriety of class certification, simply because those arguments would also be pertinent to the merits determination, the Court of Appeals ran afoul of our precedents requiring precisely that inquiry. And it is clear that, under the proper standard for evaluating certification, respondents’ model falls far short of establishing that damages are capable of measurement on a classwide basis. Without presenting another methodology, respondents cannot show Rule 23(b)(3) predominance: Questions of individual damage  calculations will inevitably overwhelm questions common to the class.

The Court reasoned that the “model failed to measure damages resulting from the particular antitrust injury on which petitioners’ liability in this action is premised.”  Id. at 8.  Justice Scalia emphasized that “it may be necessary for the court to probe behind the pleadings before coming to rest on the certification question, . . . Such an analysis will frequently entail overlap with the merits of the plaintiff ’s underlying claim.” Id. at 6 (internal quotations omitted).

By CHARLES H. JUNG

U.S. Supreme Court Rules a Putative Class Action Plaintiff May Not Stipulate Around CAFA Amount in Controversy

In Breaking News, CAFA, Class Actions on March 19, 2013 at 6:38 pm
U.S. Supreme Court building.

U.S. Supreme Court building. (Photo credit: Wikipedia)

In a ruling today with substantial implications for wage & hour class actions, a unanimous U.S. Supreme Court held that a putative class representative’s stipulation that he and the class would seek less than $5 million in damages does not defeat federal jurisdiction under the Class Action Fairness Act of 2005 (“CAFA”).  Standard Fire Insurance Co. v. Knowles, No. 11-1450, 586 U.S. __ (Mar. 19, 2013).

The question presented concerned a class-action plaintiff who stipulates, prior to certification of the class, that he, and the class he seeks to represent, will not seek damages that exceed $5 million in total. Does that stipulation remove the case from CAFA’s scope?

Justice Breyer writing for the Court concluded no, reasoning that stipulations must be binding, and a “plaintiff who files a proposed class action cannot legally bind members of the proposed class before the class is certified.”

 We do not agree that CAFA forbids the federal court to consider, for purposes of determining the amount in controversy, the very real possibility that a nonbinding, amount-limiting, stipulation may not survive the class certification process. This potential outcome does not result in the creation of a new case not now before the federal court. To hold otherwise would, for CAFA jurisdictional purposes, treat a nonbinding stipulation as if it were binding, exalt form over substance, and run directly counter to CAFA’s primary objective: ensuring “Federal court consideration of interstate cases of national importance.” §2(b)(2), 119 Stat. 5. It would also have the effect of allowing the subdivision of a $100 million action into 21 just-below-$5-million state-court actions simply by including nonbinding stipulations; such an outcome would squarely conflict with the statute’s objective.

The Court concluded that “the stipulation at issue here can tie Knowles’ hands, but it does not resolve the amount-in-controversy question in light of his inability to bind the rest of the class.”

By CHARLES H. JUNG

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First District Dismisses Appeal of Trial Court Order That Did Not Compel Arbitration of PAGA Claims

In Arbitration, Class Actions, Class-wide Arbitration, Concepcion, PAGA on February 16, 2012 at 6:57 am
Macy's at Westfield Horton Plaza in San Diego,...

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The Court of Appeal for the First District granted plaintiff’s motion to dismiss an appeal, where the employer appellant sought review of a trial court order that did not compel an employee to arbitrate her PAGA claims.  Reyes v. Macy’s, Inc., No. A133411, 202 Cal.App.4th 1119 (1st Dist. Dec. 21, 2011).  The court held that the portion of the trial court’s order that failed to compel employee to arbitrate her class claims and PAGA claims was not immediately appealable; and plaintiff’s PAGA claim was not an individual claim and thus was not within the scope of arbitration request.  Id. (holding that the order granting Defendant’s own motion to compel arbitration of the individual claims “is not appealable, and the remainder of the order denying the motion to dismiss representative [PAGA] claims is not a final judgment and, therefore, also is not appealable . . . .”).

Background

Plaintiff and respondent Reyes brought action against her employer Macy’s, alleging numerous class action labor code violations and a cause of action under the Labor Code Private Attorneys General Act of 2004 (“PAGA”), as well as individual claims for discrimination, harassment, and retaliation.  Id.

In the trial court, Macy’s filed a “motion to compel arbitration on an individual basis, dismiss class allegations, and stay civil action,” asking the court to enforce the parties’ agreement to arbitrate, compel the plaintiff to arbitrate individual claims, dismiss class/representative claims and, if the motion were granted, stay the proceedings until arbitration is completed.  Id.  San Francisco Superior Court Judge Charlotte Walter Woolard held that:

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Second District Holds Denial of Class Certification Cannot Establish Collateral Estoppel Against Unnamed Putative Class Members

In Class Actions, Collateral Estoppel on February 15, 2012 at 7:46 pm
U.S. Supreme Court building.

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The Court of Appeal for the Second District held that a denial of class certification cannot establish collateral estoppel against unnamed putative class members. Bridgeford v. Pacific Health Corporation, et al., No. B227486, 202 Cal.App.4th 1034 (2d Dist. Jan. 18, 2012).

Background

Plaintiffs Bridgeford and Tarin filed a class action complaint in May 2010 against Pacific Health Corporation and other entities, alleging that defendants committed numerous wage and hour violations, including (1) failure to pay wages due upon discharge or resignation, (2) failure to pay regular and overtime wages due semimonthly, (3) failure to provide meal breaks, (4) failure to provide rest breaks, (5) failure to provide itemized wage statements, (6) failure to pay minimum wages for time worked off-the-clock, (7) failure to pay overtime wages, and (8) unfair competition.  Id.

The trial court sustained a demurrer without leave to amend.  Id.  Plaintiff’s appealed, contending the trial court misapplied the doctrine of collateral estoppel in holding that their class claims are precluded, and there is no basis to dismiss their individual claims or their representative claims under the Labor Code Private Attorneys General Act of 2004 (PAGA) (Lab. Code section 2698, et seq.).

Discussion

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Sixth District Holds Reverses Summary Judgment on Question of Whether Leave Policy Was Sabbatical or Regular Vacation

In Class Actions, Vacation on August 15, 2011 at 6:50 am
Lazzy Feet on a Blue Ocean Beach vacation

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California’s Sixth District Court of Appeal held that a genuine issue of material fact existed as to whether eight-week leave was a sabbatical or regular vacation precluded summary judgment in former employee’s class action against the former employer.  Paton v. Advanced Micro Devices, — Cal. Rptr. 3d —-, 2011 WL 3369346, No. H034618 (6th Dist. Aug. 5, 2011).

Background

Plaintiff Eric Paton sued defendant Advanced Micro Divices, Inc. on behalf of himself and a class of others, alleging that Defendant had failed to pay him for an eight-week sabbatical he earned but had not used when he retired. Id. *1 Salaried employees who served for seven years were eligible for an eight-week fully paid sabbatical.  Id. Plaintiff argued that the sabbatical was extra vacation and, pursuant to Labor Code section 227.3, the employer could not require an employee to forfeit vacation pay.  Id.  Plaintiff cited Suastez v. Plastic Dress-Up Co., 31 Cal. 3d 774 (1982), to support his claim that the sabbatical had vested over the seven years he had worked for defendant and he was entitled to the pay when he resigned.  Id.   Read the rest of this entry »

Northern District Denies Certification of Joe’s Crab Shack Meal and Rest Break Class Action

In 23(b)(2) Class, Certification, Class Actions, Meal and Rest Breaks, Overtime, Uniform on January 1, 2011 at 3:21 pm
Joe's Crab Shack
Image by Frank Kehren via Flickr

The Northern District of California denied class certification of a meal and rest break class action in Washington v. Joe’s Crab Shack, No. C 08-5551 PJH, 2010 WL 5396041 (N.D. Cal Dec. 23, 2010.) (slip op.).  Plaintiff Drew Garrett Washington asserted that defendant Crab Addison, Inc. (“Crab Addison”), a company that operates a number of Joe’s Crab Shack restaurants, failed to provide employees with meal and rest breaks, allowed its restaurant managers to manipulate employee time records to deprive employees of pay for all hours worked (including overtime and missed meal break pay), required employees to perform work “off the clock”; and required employees to pay for their own employer-mandated uniforms.  Id. *1.

Class Definition

Plaintiff moved pursuant to Federal Rule of Civil Procedure 23, to certify a plaintiff class consisting of “all non-exempt restaurant employees employed by Crab Addison at Joe’s Crab Shack restaurants in California from January 1, 2007, through the present.”

Discussion

The court denied the certification motion.  Id. *11.  “Plaintiff’s position is that common questions predominate because the main issue is whether—notwithstanding Crab Addison’s written policies—Joe’s Crab Shack restaurants in California followed a common unwritten policy of denying meal and rest breaks, failing to pay employees who did not take breaks, failing to pay for overtime, requiring employees to purchase their own uniforms, and so forth.” Id. Plaintiff contended that the existence of a policy or practice that in effect contradicts Crab Addison’s written policies can be ascertained by an analysis of the data in Crab Addison’s computer systems.  Id. “But since plaintiff has failed to adequately explain how that analysis works and exactly what the data shows, he has failed to adequately establish the existence of such a policy or practice.” Id. Read the rest of this entry »

Northern District Denies Production of Names of Non Opt-In Members of FLSA Collective and Labor Code Class Action

In Class Actions, Class Discovery, Class Notice, Collective Action, Discovery, FLSA, Opt-in on October 28, 2010 at 9:37 am
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The United States District Court for the Northern District of California denied the production of names, addresses and telephone numbers of non-opt-in members of a FLSA collective and putative Labor Code class action.  Hill v. R+L Carriers Shared Services, LLC, No. C 09-1907 CW (MEJ), 2010 WL 4175958 (N.D. Cal. Oct. 20, 2010).  Plaintiff Glenn Hill is a former employee of Defendant R+L Carriers Shared Services, LLC, which provides administrative employees to transportation companies all across the United States.  Id. *1. Plaintiff worked as a “dispatcher” at Defendant’s San Lorenzo terminal in California, and brought a collective and class action pursuant to the Fair Labor Standards Act (“FLSA”), California’s wage-and-hour laws and California Business & Professions Code section 17200. Id.

Background

Plaintiff sought two sub-classes: those employees in California and those that he refers to as a Nationwide Collective.  Id. The California Class is defined as “all persons who worked for any period of time in California who were classified as Dispatchers (including “City Dispatchers” and any other position(s) who are either called, or work(ed) as, dispatchers) in the four years prior to the filing of this Complaint, up through the final disposition of this action.” Id. In Defendant contended that a collective action under the FLSA is improper because the job duties, work schedules, and salary of its employees varies across the United States, as well as in the State of California. Id. Read the rest of this entry »