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Posts Tagged ‘United States’

Ninth Circuit Avoids Broad Ruling in Kilgore v. KeyBank

In Arbitration, Class Waiver, Concepcion, Public Claims, Unfair Competition Law on April 11, 2013 at 5:49 pm
Wright brothers flying over the Kohn plantatio...

Wright brothers flying over the Kohn plantation in Montgomery, Alabama, where they set up a flying school. Maxwell Air Force Base was later built on the site. (Photo credit: Wikipedia)

The Ninth Circuit took a narrow approach in a ruling which had been expected to  have implications for wage & hour class actions.  The en banc court today compelled arbitration in Kilgore v. Keybank, National Association, but declined to issue a broad holding vitiating the Broughton-Cruz rule.  Kilgore v. Keybank, National Association, No. 09-16703, __ F.3d __ (9th Cir. Apr. 11, 2013) (en banc).  The appeal involved a putative class action by former students of a failed flight-training school who seek broad injunctive relief against the bank that originated their student loans among others.  The en banc court held that the arbitration agreement was not unconscionable under California law and reversed and remanded with instructions to compel arbitration.

The court concluded that the injunctive relief claim at issue fell outside Broughton-Cruz’s “narrow exception to the rule that the FAA requires state courts to honor arbitration agreements.”

The central premise of Broughton-Cruz is that “the judicial forum has significant institutional advantages over arbitration in administering a public injunctive remedy, which as a consequence will likely lead to the diminution or frustration of the public benefit if the remedy is entrusted to arbitrators.” Broughton, 988 P.2d at 78. That concern is absent here, where Defendants’ alleged statutory violations have, by Plaintiffs’ own admission, already ceased, where the class affected by the alleged practices is small, and where there is no real prospective benefit to the public at large from the relief sought.

You can read more about today’s ruling here.

Attorneys Read the rest of this entry »

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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 »

First District Approves of Arbitration Agreement, Despite Presence of Class Waiver and Arbitration of Public Claims

In Arbitration, Class Waiver, Concepcion, Public Claims on March 28, 2013 at 3:30 pm
Car Sales USA

Car Sales USA (Photo credit: emilio labrador)

Yesterday, the California Court of Appeal for the First Appellate District reversed a trial court’s denial of a motion to compel arbitration.  See Vasquez v. Greene Motors, Inc., et al., Case No. A134829, __ Cal.App.4th __ (1st Dist. Mar. 27, 2013).  The arbitration agreement related to the purchase of a used car on credit from defendants, but the opinion has implications for wage & hour class actions because the agreement contained a class waiver and the requirement to arbitration “public” claims.  Id. at 25-26.

The court found only minimal procedural unconscionability, but an absence of significant substantive unconsionability.  The arbitration clause was printed on the reverse side of a form contract, but the buyer was alerted to the presence of the clause.  The Court described the clause as follows:

The reverse side, also dense with text, contains a number of provisions in separate boxes, many dealing with typical ―boilerplate legal matters, such as warranties, applicable law, and buyer and seller remedies. None of the provisions on the back page requires a buyer‘s signature. Toward the bottom of the page is the arbitration clause. The entire text of the clause is outlined in a black border. In all capital letters and bold type at the top is written, ―ARBITRATION CLAUSE [¶] PLEASE REVIEW— IMPORTANT—AFFECTS YOUR LEGAL RIGHTS. Immediately below, three numbered provisions, also in all capital letters, inform the buyer either party may request arbitration, this would prevent a court or class-wide proceeding, and it might limit discovery. Read the rest of this entry »

First District Invalidates Arbitration Agreement Citing Lack of Mutuality

In Arbitration on March 19, 2013 at 3:46 pm
"Mrs. F.S. Bliven in auto". Photo sh...

“Mrs. F.S. Bliven in auto”. Photo shows wife and daughter of Frank S. Bliven in a 1907 Franklin Model D roadster. Frank Bliven was a Washington, D.C. Franklin auto dealer. Discussion of this photo on Shorpy.com (Photo credit: Wikipedia)

The California Court of Appeal struck down an arbitration agreement by a defendant in a putative class action, rejecting an argument that an unconscionability analysis that focuses on the lack of mutuality in an arbitration contract violates Concepcion. Natalini v. Import Motor, Inc., 213 Cal. App. 4th 587 (1st Dist., mod. February 5, 2013).

Relying on the U.S. Supreme Court’s holding in AT & T Mobility LLC v. Concepcion,  563 U.S. –––– , 131 S.Ct. 1740, 179 L.Ed.2d 742 (2011), appellant car dealer argued that an “unconscionability analysis that focuses on the lack of mutuality or bilaterality in an arbitration provision is ‘an example of applying a generally applicable contract defense in a manner which disfavors arbitration.'”  The First District declined to read Concepcion so broadly, and noted that:

Recent California and federal district court decisions addressing arbitration provisions very similar to that in the present case and in the identical car purchase context have not read  Concepcion so broadly.  (See  Trompeter v. Ally Financial, Inc. (N.D.Cal., June 1, 2012, No. C–12–00392 CW) 2012 WL 1980894 [p. *8] [nonpub. opn.]  ( Trompeter );   Smith v. Americredit Financial Services, Inc. (S.D.Cal., Mar. 12, 2012, No. 09cv1076 DMS (BLM)) 2012 WL 834784 [pp. *2–*4] ( Smith );   Lau v. Mercedes–Benz USA, LLC (N.D.Cal., Jan. 31, 2012, No. CV 11–1940 MEJ) 2012 WL 370557 [pp. *6–*7] ( Lau );  see also  Ajamian v. CantorCO2e, L.P. (2012) 203 Cal.App.4th 771, 804, fn. 18, 137 Cal.Rptr.3d 773.)   Read the rest of this entry »

Applying Concepcion, U.S. Supreme Court Strikes Down West Virginia High Court Rulings That Held Unenforceable All Predispute Arbitration Agreements That Apply to Personal Injury or Wrongful Death Claims Against Nursing Homes

In Arbitration, Preemption on February 21, 2012 at 5:13 pm
TAMPA, FL - MARCH 17:  Dalton Pepper #32 of th...

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In a per curiam opinion today applying the rule in Concepcion, the U.S. Supreme Court  reversed and remanded orders of the Supreme Court of Appeals of West Virginia, which held unenforceable all predispute arbitration agreements that apply to claims alleging personal injury or wrongful death against  nursing homes.  Marmet Health Care Center, Inc., et al. v.  Clayton Brown, et al., Case Nos. 11–391 and 11–394, 565 U. S. ____ (Feb. 21, 2012).

The U.S. Supreme Court held that the “Supreme Court of Appeals of West Virginia, by misreading and disregarding the precedents of this Court interpreting the FAA, did not follow controlling federal law implementing that basic principle.”  Id.  “When this Court has fulfilled its duty to interpret federal law, a state court may not contradict or fail to implement the rule so established.”

Background

In each of three negligence suits, a family member of a patient requiring extensive nursing care had signed an agreement with a nursing home on behalf of the patient.  Id. The agreements included arbitration clauses requiring the parties to arbitrate all disputes, other than claims to collect late payments owed by the patient.  Id. In each of the three cases, a family member of a patient who had died sued the nursing home in state court, alleging that negligence caused injuries or harm resulting in death. Id.

In a decision concerning all three cases, the Supreme Court of Appeals of West Virginia held that “as a matter of public policy under West Virginia law, an arbitration clause in a nursing home admission agreement adopted prior to an occurrence of negligence that results in a personal injury or wrongful death, shall not be enforced to compel arbitration of a dispute concerning the negligence.”  Id.

The state court considered whether the state public policy was pre-empted by the FAA:

The state court found unpersuasive this Court’s interpretation of the FAA, calling it “tendentious,” id., at 51a, and “created from whole cloth,” id., at 53a. It later concluded that “Congress did not intend for the FAA to be, in any way, applicable to personal injury or wrongful death suits that only collaterally derive from a written agreement that evidences a transaction affecting interstate commerce, particularly where the agreement involves a service that is a practical necessity for members of the public,”  id., at 84a.  The court thus concluded that the FAA does not pre-empt the state public policy against predispute arbitration agreements that apply to claims of personal injury or wrongful death against nursing homes.

Id.

Discussion

The Supreme Court held that the “West Virginia court’s interpretation of the FAA was both incorrect and inconsistent with clear instruction in the precedents of this Court.”  Id.  The Court held that the FAA includes “no exception for personal-injury or wrongful-death claims.”  Id.

Citing AT&T Mobility LLC v. Concepcion, 563 U. S. ___, ___ (2011), the Court wrote:

When state law prohibits outright the arbitration of a particular type of claim, the analysis is straightforward: The conflicting rule is displaced by the FAA.”  AT&T Mobility LLC v. Concepcion, 563 U. S. ___, ___ (2011) (slip op., at 6–7).  That rule resolves these cases. West Virginia’s prohibition against predispute agreements to arbitrate personal-injury or wrongful-death claims against nursing homes is a categorical rule prohibiting arbitration of a particular type of claim, and that rule is contrary to the terms and coverage of the FAA. See ibidSee also, e.g., Preston v. Ferrer, 552  U. S. 346, 356 (2008) (FAA pre-empts state law granting  state commissioner exclusive jurisdiction to decide issue the parties agreed to arbitrate); Mastrobuono v. Shearson  Lehman Hutton, Inc., 514 U. S. 52, 56 (1995) (FAA preempts state law requiring judicial resolution of claims  involving punitive damages);  Perry v.  Thomas, 482 U. S.  483, 491 (1987) (FAA pre-empts state-law requirement that litigants be provided a judicial forum for wage disputes); Southland Corp. v.  Keating, 465 U. S. 1, 10 (1984) (FAA pre-empts state financial investment statute’s  prohibition of arbitration of claims brought under that  statute).

Granting the petition for certiorari, the Court vacated the judgment of the Supreme Court of Appeals of West Virginia is and remanded the cases for proceedings not inconsistent with this opinion.

By CHARLES JUNG

In an Involuntary Servitude Case, Northern District Dismisses FLSA and California Labor Code Claims

In Involuntary Servitude, Minimum Wage, Trafficking Victims Protection Reauthorization Act (TVPRA) on January 1, 2011 at 4:11 pm
13th Amendment to the U.S. Constitution: Aboli...
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The Northern District dismissed plaintiffs’ FLSA and California Labor Code claims in an involuntary servitude case.  Shuvalova v. Cunningham, No. C 10-02159 RS, 2010 WL 5387770 (N.D. Cal. Dec. 22, 2010).  The case involved the “unusual scenario of one spouse bringing claims against the other for alleged violations of the Trafficking Victims Protection Reauthorization Act (TVPRA).” Id. *1.  Natalya Shuvalova and her daughter Elizabeth Shuvalova claimed that defendant and his adult son fraudulently lured them from Russia to the United States, induced Natalya to marry one defendant, and then forced plaintiffs into involuntary servitude at defendant’s rural property in Clearlake, California.  Id. Plaintiffs claimed that for seven months, they were forced by defendants’ alleged verbal and physical threats to perform heavy, outdoor labor on the property. Id. Plaintiffs raised eighteen claims for violations of the TVPRA, federal and state labor law, and state contract and tort law.  Id. Defendants moved to dismiss the entire complaint under Rule 12(b)(6).  Id.

Background

The court presented the allegations of the complaint as follows:

Natalya and Joe met through a computer dating service in October 2005. At the time, Natalya lived in Russia and Joe lived then and now in Clearlake, California. They began a two-year relationship involving frequent emails and phone calls, as well as two vacations together each lasting two weeks. In October 2005, [FN1] Joe proposed to Natalya and promised to provide a loving home to her and her daughter Liza. Natalya and Liza arrived in the United States in February 2008 and began living with Joe at the Clearlake property. Joe’s thirty-five-year-old son, Dan, also lived at the house on the weekends. Natalya and Joe married on May 3, 2008. . . . 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 »

Blog Status: In Trial, So Fewer Updates to California Wage & Hour Law This Week

In Blog Status on December 4, 2010 at 9:14 am
"Trial of Giles Corey" engraving by ...
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I am in trial, so there will be fewer updates until December 11.

Best,

Charles

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Relatively Formulaic Factual Allegations Held Sufficient to Satisfy Rule 8 Pleading Under Twombly; FLSA Held a Proper Predicate to UCL Claim; Fees Prayer Under C.C.P. § 1021.5 Stricken

In Attorney's Fees, C.C.P. § 1021.5, FLSA, Rule 8, Unfair Competition Law on November 16, 2010 at 8:23 am
CALABASAS, CA - JULY 18:  The Countrywide Fina...
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The United States District Court for the Central District of California held that (1) relatively formulaic pleadings in a wage and hour case were sufficient to meet the pleading requirements of Rule 8, even under Twombly and Iqbal; (2) the FLSA is a proper predicate for a UCL claim; and (3) plaintiffs’ prayer for attorneys fees under Cal. Code Civ. Proc. section 1021.5 should be stricken. Whitaker v. Countrywide Financial Corp., No. CV CAS 09-5898 (PJWx), 2010 WL 4537098 (C.D. Cal. Nov. 1, 2010).

Background

A putative class action was brought on behalf of current and former employees of Countrywide Financial Corporation and Countrywide Home Loans, Inc. (the “Countrywide Defendants”) against the Countrywide Defendants and Bank of America, the alleged successor employer and/or successor in liability to the Countrywide Defendants. Id. *1. The FAC alleges claims for: (1) failure to pay overtime in violation of Cal. Labor Code s 510 and s 1194 and IWC Wage Order 4-2001; (2) Cal. Labor Code s 203 waiting penalties; (3) failure to provide an accurate itemized wage statement pursuant to Cal. Labor Code s 226; (4) failure to pay minimum wage in violation of Cal. Labor Code s 1194 and IWC Wage Order No. 4-2001; (5) failure to pay minimum and overtime wages in violation of the Fair Labor Standards Act, 29 U.S.C. s 206(a); and (7) unfair competition pursuant to Cal. Business & Professions Code, s 17200 et seq. Id. Defendants moved to dismiss or strike plaintiffs’ first amended complaint.  Id.

Discussion

Defendants argued that plaintiffs’ claims should be dismissed because they are factually devoid and simply “parrot the statutory language and proffer purely conclusory allegations”, thereby running afoul of the standards set out in Bell Atlantic Corp. v. Twombly, 127 S.Ct. 1955, 1964-65 (2007) and Ashcroft v. Iqbal, 556 U.S. ___, 129 S.Ct. 1937 (2009). Read the rest of this entry »

After Substantial Litigation and Full Arbitration, Second District Reverses Order Compelling Arbitration Finding That Defendants Waived Right to Arbitrate

In Uncategorized on November 15, 2010 at 9:23 am
Day 222 (Or is this Day 1 now?) - Oops!
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The Second District Court of Appeal reversed an order compelling arbitration after the conclusion of an arbitration and judicial confirmation of the arbitration award because defendants waived their right to arbitrate.  Knight v. Toe Brights, Inc., et al., No. B220648, 2010 WL 4542324 (Cal. App. 2d Dist. Nov. 12, 2010).

Background

Plaintiff Knight filed an action against her former employer, Toe Brights, Inc. (TBI), and two of its officers/directors/stockholders, alleging that they failed to pay her more than $9,000 in salary and reimbursement for expenses that was due at the time of her termination, and also failed to repay a loan from her to TBI in the amount of $41,783. Id. TBI filed its answer to Knight’s complaint, and alleged as an affirmative defense that “Plaintiff’s action is barred by any arbitration agreement requiring that this action be arbitrated.”  Id.

Defendants moved to compel arbitration about eight months after plaintiff Knight filed her suit.  Id. *1.  By that time, defendants had propounded multiple sets of discovery to which Knight had responded, and numerous discovery motions were pending.  Id. Defendants had claimed “priority” in discovery, and then refused to respond to Knight’s discovery.  Id. The court ordered the matter to arbitration less than three months before the date set for trial. Id.

The case proceeded through arbitration, and the arbitrator awarded Knight $40,000 for the repayment of her loan plus “interest at the statutory rate from the date she filed her lawsuit”.  Id. *4. Knight did not prevail on her other claims for unauthorized use of her jewelry designs, name and likeness, and the arbitrator awarded defendants $60,000 in attorney fees and $1,160 in filing fees as the prevailing parties on some of Knight’s claims. Id. The arbitrator denied Knight’s motion for attorney fees  and costs. Id. Read the rest of this entry »