In Abdullah v. U.S. Security Associates, Inc., ___ F.3d ___ (9th Cir. Sept. 27, 2013), the Ninth Circuit affirmed class certification in a case involving security guards who were required to sign "on duty" meal period agreements. The court's analysis relies heavily on Brinker and Faulkinbury.
This afternoon, San Diego County Superior Court Judge William S. Dato certified the meal period subclass in Brinker. He also denied a motion filed by Brinker to decertify the rest break subclass. His tentative ruling, which he confirmed as an order at the hearing today, is available at this link.
As you may remember, in Brinker, the Supreme Court affirmed certification of the rest break subclass, but reversed certification of the meal period subclass with directions to reconsider on remand. Now, both subclasses are certified.
Judge Dato's ruling extensively cites the Supreme Court's opinion, and also favorably cites Faulkinbury and Brinkley (two of the Brinker "grant and hold" cases).
[Disclosure: I was the employees' lead appellate counsel in the Supreme Court in this case.]
First off, on a personal note, I was away on vacation the first two weeks of September. My husband and I went to French Polynesia for our tenth anniversary. We had a wonderful time. (Things were so busy right before we left that I did not have time to put up an "on hiatus" post.)
Upon my return, among two weeks' worth of emails, was news that the Ninth Circuit had withdrawn its opinion in the Wang case (previously published at 709 F.3d 829 (9th Cir. 2013)), and issued a new opinion, Wang v. Chinese Daily News, Inc., ___ F.3d ___ (9th Cir. Sept. 3, 2013).
The new opinion still reverses the district court's class certification order, and still remands for redetermination of whether common questions exist and predominate. Slip op. at 16. Technically speaking, the plaintiffs' rehearing petition was denied. Id. at 4-5. The new opinion, however, is different from the original opinion in several important respects.
Most significantly, the new opinion entirely omits a paragraph that had misconstrued Dukes (as I observed in my post on the original opinion). The now-omitted paragraph read:
In Wal-Mart, the Supreme Court disapproved what it called “Trial by Formula,” wherein damages are determined for a sample set of class members and then applied by extrapolation to the rest of the class “without further individualized proceedings.” Wal-Mart, 131 S. Ct. at 2561. Employers are “entitled to individualized determinations of each employee’s eligibility” for monetary relief. Id. at 2560. Employers are also entitled to litigate any individual affirmative defenses they may have to class members’ claims. Id. at 2561. If the district court again certifies a class under Rule 23(b)(3), it should calculate damages in light of the Supreme Court’s admonitions in Wal-Mart.
Withdrawn opn., slip op. at 15.
The deletion of this paragraph from the new opinion is very significant, because Dukes simply did not hold that defendants are "entitled" to insist on litigating "any" affirmative defenses with individualized proof. The discussion of "Trial by Formula" appeared in a section of Dukes addressing special statutory requirements applicable only in Title VII cases, not in ordinary wage and hour cases like Wang. Nor did Dukes disapprove the use of evidentiary extrapolations in class litigation, as the paragraph suggested. See Kimberly A. Kralowec, "Dukes and Common Proof in California Class Actions," 21 Competition 9, 11-12 (Summer 2012).
The second important change is the deletion of this sentence: "Plaintiffs must show 'significant proof that [CDN] operated under a general policy of [violating California labor laws].' Ellis, 657 F.3d at 983 (quoting Wal-Mart, 131 S. Ct. at 2553 (alteration omitted))." Withdrawn opn., slip op. at 10. This sentence, too, erroneously imported a legal standard unique to Title VII (and discussed in that context in both Dukes and Ellis).
NELA's amicus brief in support of rehearing urged both of these changes, and explains in detail why they are so important.
Finally, the new opinion acknowledges that certification of the injunctive relief claim may be appropriate on remand under Rule 23(b)(2). New opn., slip op. at 12, 16. The earlier opinion held (incorrectly) that the class representatives lacked standing to seek such relief because they were all former employees. Withdrawn opn., slip op. at 11.
This is one of the three cases in which the U.S. Supreme Court issued a "grant, vacate and transfer" (or "GVR") order post-Comcast. As it did in its original opinion, the Seventh Circuit (in an opinion by Judge Posner) reversed the district court's order denying class certification of claims for breach of warranty arising out of alleged defects in the defendant's front-load washers.
A lot of language from the original opinion was retained and appears in the new one. The discussion of Comcast appears at pp. 5-8. Here are a few sound bites:
"Sears is wrong to think that anything a dissenting opinion approves of the majority must disapprove of." Slip op. at 7 (emphasis in original). (This brings to mind Justice Werdegar's concurrence in Brinker; some litigants have argued that the rest of the justices must have disagreed with everything she said, or they would have joined it. It is equally possible that they considered the matters unnecessary to the opinion.)
"As we explained in McReynolds v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 672 F.3d 482, 491-92 (7th Cir.2012), distinguishing Wal-Mart Stores, Inc. v. Dukes, 131 S.Ct. 2541 (2011), a class action limited to determining liability on a class-wide basis, with separate hearings to determine—if liability is established—the damages of individual class members, or homogeneous groups of class members, is permitted by Rule 23(c)(4) and will often be the sensible way to proceed. " Slip op. at 7.
"Sears thinks that predominance is determined simply by counting noses: that is, determining whether there are more common issues or more individual issues, regardless of relative importance. That's incorrect. An issue “central to the validity of each one of the claims” in a class action, if it can be resolved “in one stroke,” can justify class treatment. Wal–Mart Stores, Inc. v. Dukes, supra, 131 S.Ct. at 2551. That was said in the context of Rule 23(a)(2), the rule that provides that class actions are permissible only when there are issues common to the members of the class (as of course there are in this case). But predominance requires a qualitative assessment too; it is not bean counting." Slip op. at 8-9 (citing Amgen).
"It would drive a stake through the heart of the class action device, in cases in which damages were sought rather than an injunction or a declaratory judgment, to require that every member of the class have identical damages. If the issues of liability are genuinely common issues, and the damages of individual class members can be readily determined in individual hearings, in settlement negotiations, or by creation of subclasses, the fact that damages are not identical across all class members should not preclude class certification. Otherwise defendants would be able to escape liability for tortious harms of enormous aggregate magnitude but so widely distributed as not to be remediable in individual suits." Slip op. at 9-10.
"There is a single, central, common issue of liability: whether the Sears washing machine was defective. Two separate defects are alleged, but remember that this class action is really two class actions. In one the defect alleged involves mold, in the other the control unit. Each defect is central to liability. Complications arise from the design changes and from separate state warranty laws, but can be handled by the creation of subclasses." Slip op. at 10-11.
My post on the Sixth Circuit's post-Comcast Whirlpool opinion is here. In other blog coverage on Butler v. Sears, Paul Karlsgodt predicts that moldy washing machines will save the consumer class action from extinction.
We still await the Seventh Circuit's post-Comcast opinion in the third GVR case, RBS Citizens, N.A. v. Ross, no. 12-165. This one is an employment matter.
In Hendelman v. Los Altos Apartments, L.P., ___ Cal.App.4th ___ (Jul. 22, 2013; pub. ord. Aug. 20, 2013), the Court of Appeal (Second Appellate District, Division Three) affirmed the trial court's order denying class certification in an action by tenants against their landlord for breach of the implied warranty of habitability (and related claims).
The only new cases added to the list are five more "grant and holds" involving arbitration issues and stayed pending resolution of Sanchez or Iskanian. Removing all the "grant and hold" cases from the list, here's what's pending. (If I've missed any, please drop me an email.)
There are two class certification cases (Ayala and Duran); three arbitration-related cases (Sonic-Calabasas, Sanchez, and Iskanian); one preemption case (Pac Anchor); and one "unfair" prong case (Cipro):
Issue: This case presents questions concerning the determination of whether
common issues predominate in a proposed class action relating to claims
that turn on whether members of the putative class are independent
contractors or employees.
Issues: (1) Did AT&T Mobility LLC v. Concepcion (2011) 563 U.S. __ [131 S.
Ct. 1740, 179 L.Ed.2d 742] impliedly overrule Gentry v. Superior Court
(2007) 42 Cal.4th 443 with respect to contractual class action waivers
in the context of non-waivable labor law rights? (2) Does the high
court's decision permit arbitration agreements to override the statutory
right to bring representative claims under the Labor Code Private
Attorneys General Act of 2004 (Lab. Code, § 2698 et seq.)? (3) Did
defendant waive its right to compel arbitration?
Issue: This case presents issues concerning the
certification of class actions in wage and hour misclassification
litigation and the use of representative testimony and statistical
evidence at trial of such a class action.
Issue: Does the Federal Arbitration Act (9 U.S.C. § 2), as interpreted in AT&T Mobility LLC v. Concepcion
(2011) 563 U. S. __, 131 S.Ct. 1740, preempt state law rules
invalidating mandatory arbitration provisions in a consumer contract as
procedurally and substantively unconscionable?
Issue: May a suit under the Cartwright Antitrust
Act (Bus. & Prof. Code, § 16720 et seq.) be brought to challenge
"reverse exclusionary payments" made by pharmaceutical manufacturers to
settle patent litigation with generic drug producers and prolong the
life of the patents in question?
Issue: Is an action under the Unfair Competition
Law (Bus. & Prof. Code, § 17200 et seq.) that is based on a trucking
company's alleged violation of state labor and insurance laws "related
to the price, route, or service" of the company and, therefore,
preempted by the Federal Aviation Administration Authorization Act of
1994 (49 U.S.C. § 14501)?
Issues: (1) Can a mandatory
employment arbitration agreement be enforced prior to the conclusion of
an administrative proceeding conducted by the Labor Commissioner
concerning an employee's statutory wage claim? (2) Was the Labor
Commissioner's jurisdiction over employee's statutory wage claim
divested by the Federal Arbitration Act under Preston v. Ferrer (2008) __ U.S. __, 128 S.Ct. 978, 169 L.Ed.2d 917?
U.S. Supreme Court Order (10/31/11): The petition
for 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. ___ (Apr. 27, 2011).
Supreme Court Order (01/11/12): In light of the
United States Supreme Court's order vacating our judgment in the
above-entitled case and remanding the cause to this court "for further
consideration in light of AT&T Mobility LLC. v. Concepcion,
563 U.S. __ (2011) [131 S.Ct. 1740]," the parties are requested to
brief the significance of that case. The parties are requested to file
and serve simultaneous briefs by February 10, 2012, and may file and
serve reply briefs by February 24, 2012.
On August 2, 2013, Judge Breyer denied the renewed motion for class certification filed in Dukes v. Wal-Mart after remand. Dukes v. Wal-Mart Stores, Inc., 2013 WL 3993000 (N.D. Cal. Aug. 2, 2013).
The renewed motion sought certification of a much smaller class, consisting of employees of stores in Wal-Mart's "California regions." The class of 150,000 proposed members was only 10% the size of the nationwide class of 1.5 million originally certified by Judge Jenkins. But Judge Breyer found that the smaller proposed class "suffers from the same problems identified by the Supreme Court, but on a somewhat smaller scale." Id. at *10.
Interestingly, he said that what the plaintiffs should have done was "identify an employment practice and define a class around it." Id. He was "not impressed" with their effort to connect Wal-Mart's disparate treatment of women (which the statistical evidence appears to establish) with assertedly common practices that they had not identified or advanced in their earlier motion.
A complete list of links to all the briefs filed in this case is here. (Disclosure: I am one of the attorneys for CELA in this case and authored CELA's amicus brief.)
Briefing is now complete in this case, unless the Supreme Court grants leave for additional briefs to be filed.
On an unrelated subject, last week I noted that the oral argument calendar for September had been announed, and that no cases of interest were scheduled. However, At the Lecternpointed out that on September 4, 2013, the Court will hear argument in Garcia on Admission, no. 202512, which involves whether an undocumented immigrant who graduated from law school and passed the bar exam can be admitted to practice law.
This is an interesting case for sure, although unrelated to what I normally cover on this blog. The briefs in the case are here.
The Supreme Court recently denied review in two cases involving class certification of wage and hour claims.
On July 24, 2013, the Court denied review and depublication in Faulkinbury v. Boyd & Associates, no. S211515. Faulkinbury was the last remaining Brinker "grant and hold" case. The Court of Appeal's original 2010 opinion affirmed the trial court's order denying class certification of meal period and rest break claims, but on transfer after Brinker, the Court of Appeal reversed, and directed the trial court to certify those classes. See this blog post for more on the new Faulkinbury opinion.
On July 10, 2013, the Court denied review and depublication in Dailey v. Sears Roebuck and Co., no. S210355. This case involved class certification of claims stemming from an employer's alleged misclassification of certain employees. The trial court denied class certification, and the Court of Appeal affirmed. My original, short post on Dailey is here.
The Court also recently denied review in a third wage and hour case, Gonzalez v. Downtown LA Motors, no. S210681 (rev. den. Jul. 17, 2013). (This case does not involve class certification issues, so I did not previously cover it here.)
It appears that the Supreme Court remains uninterested in taking up additional wage and hour cases after Brinker and Duran. That won't last forever, of course.
In Shearin v. Brown, ___ Cal.App.4th ___ (Jul. 11, 2013), the Court of Appeal (Second Appellate District, Division Five) affirmed the trial court's order denying class certification in an action alleging that the plaintiffs and similarly situated inmates had been unlawfully detained in prison beyond their release dates.
UPDATE: Although the slip opinion identified the case title as Shearin v. Brown, this case was published in the official reports as Lopez v. Brown, 217 Cal.App.4th 1114 (2013).
In Bluford v. Safeway Stores, Inc., ___ Cal.App.4th ___ (May 8, 2013; partial pub. ord. May 24, 2013), the Court of Appeal (Third Appellate District) reversed an order denying class certification of rest break, meal period, and wage statement claims. Only the rest break part of the analysis (pp. 7-10) was published, but according to the docket, requests for publication of the balance of the opinion remain pending.
UPDATE: The requests for publication of the balance of the opinion were denied.
On June 3, 2013, the U.S. Supreme Court granted cert., vacated the opinion, and remanded for reconsideration in a third post-Comcast case: Sears, Roebuck & Co. v. Butler, no. 12-1067.
Butler is a consumer case in which the Seventh Circuit reversed the district court's order denying class certification of a breach of warranty claim involving mold growth in front-load washing machines. Butler v. Sears, Roebuck & Co., 702 F.3d 359 (7th Cir. 2012) (Posner, J.). My original post on the opinion is here.
Whether a state's parens patriae action is removable as a "mass action" under the Class Action Fairness Act when the state is the sole plaintiff, the claims arise under state law, and the state attorney general possesses statutory and common-law authority to assert all claims in the complaint.
The case arose out of the LCDs price-fixing litigation. The Fifth Circuit reversed the remand order, finding the public prosecutor action removable under CAFA. Mississippi ex rel. Hood v. AU Optronics Corp., 701 F.3d 796 (5th Cir. 2012).
On May 29, 2013, the Daily Journal had a story on the Ninth Circuit's opinion last week in Leyva v. Medline Industries, Inc., ___ F.3d ___ (9th Cir. May 28, 2013), which reversed the district court's order denying class certification of certain wage and hour claims, and remanded with directions to certify the class.
As I mentioned to Laura Hautala of the Daily Journal, the most important thing about the opinion is its recognition that Comcast did not change the rule that individualized damages issues do not defeat class certification. Slip op. at 7-9. The opinion affirmed the general rule, which is that class certification can and should be granted in Rule 23(b)(3) cases not withstanding the need to calculate damages individually for each class member:
The district court denied certification because for each sub-class “the damages inquiry will be highly individualized.” But damages determinations are individual in nearly all wage-and-hour class actions. Brinker Rest. Corp. v. Superior Court, 273 P.3d 513, 546 (Cal. 2012) (“In almost every class action, factual determinations of damages to individual class members must be made. Still we know of no case where this has prevented a court from aiding the class to obtain its just restitution. Indeed, to decertify a class on sound the death-knell of the class action device.”) (internal citation and quotation marks omitted). Thus, “[t]he amount of damages is invariably an individual question and does not defeat class action treatment.” Blackie v. Barrack, 524 F.2d 891, 905 (9th Cir. 1975); see also Yokoyama, 594 F.3d at 1089 (“The potential existence of individualized damage assessments . . . does not detract from the action’s suitability for class certification.”). In deciding otherwise, the district court abused its discretion by applying the wrong legal standard. See Hinkson, 585 F.3d at 1263.
Indeed, the Supreme Court clarified in Dukes that “individualized monetary claims belong in Rule 23(b)(3).” 131 S. Ct. at 2558. Thus, the presence of individualized damages cannot, by itself, defeat class certification under Rule 23(b)(3). ....
Slip op. at 7-8. The panel's citation of Brinker and Dukes in support of its ruling is notable, as is its reliance on Yokoyama (discussed in this blog post) and Blackie, which reconfirms the continuing vitality of both opinions post-Dukes and post-Comcast.
Last Friday, in Faulkinbury v. Boyd & Associates, Inc., ___ Cal.App.4th ___ (May 10, 2013), the Court of Appeal (Fourth Appellate District, Division Three) reversed the trial court's order denying class certification of overtime, meal period, and rest break claims brought by a class of security guards. The opinion directs the trial court to enter a new order granting certification of all three claims.
Faulkinbury was a Brinker "grant and hold" case. In the original opinion, handed down in 2010, the Court of Appeal affirmed denial of certification as to the the meal period and rest break claims, but reversed as to the overtime claim. The new opinion has been substantially re-worked, and it has an extensive discussion of Brinker.
The merits briefing is complete in Duran v. U.S. Bank National Association, no. S200923 (review granted May 16, 2012). Numerous amicus briefs have been filed, and the due date for the parties' answers to those briefs has not yet passed.
After the answers to the amicus briefs are filed, the next step is oral argument. It's hard to predict when the case may be set for argument. If past history is any guide, it could be as long as a couple of years. (Disclosure: I am representing CELA as amicus curiae in this case.)
UPDATE: The parties' answers to the amici briefs were filed on August 6, and 7, 2013. Links to the briefs have been added to the list above.
This morning the U.S. Supreme Court handed down its opinion in Genesis Healthcare Corp. v. Symczyk, ___ U.S. ___ (Apr. 16, 2013), which involves whether a defendant may "pick off" the representative plaintiff in a collective action brought under the Fair Labor Standards Act.
I will have more on the opinion in a later post. My original post on the grant of cert. is here. SCOTUSblog with its three-hour advantage already has a detailed summary of the decision, which apparently includes a strongly-worded dissent by Justice Kagan.
Today is the one-year anniversary of the Supreme Court's issuance of its opinion in Brinker. It is an opportune day for me to publicly congratulate my co-counsel, Tracee Lorens and Michael Rubin, who were both selected by California Lawyer magazine as recipients of 2013 CLAY Awards in Employment Law for their work on behalf of the employees in Brinker. (I was also an honoree.) The Awards were announced in the March 2013 issue of the magazine.
I am so proud of them, as I am of Michael Singer and Dave Mara, whose contributions were invaluable and who really should have been honored too. With three lawyers from the plaintiffs' team already selected by the editors of California Lawyer for our work, however, it seems not everyone could be named.
As I have saidbefore, we could not be happier with the Supreme Court's ruling that employers may not simply "offer" meal periods, but rather must take affirmative steps to actually relieve workers of all duty, while at the same time refraining from doing anything to interfere with employees' ability to actually take their meal periods. We are pleased that the editors of California Lawyer saw fit to recognize our work.
Congratulations also to the rest of the 2013 CLAY Award recipients. My co-counsel in LCDs, Fran Scarpulla, received a well-deserved award for his work on that antitrust class action, and Michael Rubin's partner Danielle Leonard was the first attorney ever to receive two CLAY Awards in the same year (Education Law and Voting Rights). Contratulations to her and to all.
Yesterday, the U.S. Supreme Court took action in one of the cases I've been following, Whirlpool Corp. v. Glazer, No. 12-322. The Court granted the cert. petition, vacated the Sixth Circuit's opinion and remanded the case back "for further consideration in light of Comcast Corp. v. Behrend, 569 U.S. ___ (2013)."
The docket indicates that both parties filed supplemental briefs last Thursday, March 28. I haven't seen those briefs, but my guess would be that they both addressed Comcast, which was handed down on March 27.
The Supreme Court reversed the Third Circuit's judgment affirming the district court's class certification order. The Court held that the plaintiffs' expert's analysis in support of certification was deficient for various case-specific reasons. Slip op. at 7-11. The matter will now be remanded for further proceedings.
This is the most important passage in the opinion:
The District Court held, and it is uncontested here, that to meet the predominance requirement respondents had to show (1) that the existence of individual injury resulting from the alleged antitrust violation (referred to as “antitrust impact”) was “capable of proof at trial through evidence that [was] common to the class rather than individual to its members”; and (2) that the damages resulting from that injury were measurable “on a class-wide basis” through use of a “common methodology.” 264 F. R. D., at 154.
Slip op. at 4-5 (footnote omitted) (emphasis added).
In some news reports and blogs, the Comcast opinion has been characterized as changing the well-established rule that individualized damages questions do not defeat class certification if common questions predominate on liability.
The news reports that say this have all overlooked the language from the opinion emphasized above.
For unknown reasons, the plaintiffs in Comcast chose to concede (or at least not contest) that to obtain class certification, they would have to show that they could establish and measure the damages through common proof. As a result, the Court did not consider, let alone overturn, the long-established rule for the mine run of cases in which no such concession was made.
Instead, the Court reversed class certification after deciding that the expert report was not adequate to establish classwide damages -- a requirement that was relevant only for one reason: it was conceded -- because the expert's damages model was not consistent with the plaintiffs' liability theory. Slip op. at 7. The majority opinion acknowledged that damages calculations "need not be exact." Id. (citing Story Parchment Co. v. Paterson Parchment Paper Co., 282 U.S. 555, 563 (1931)).
It appears to me that on remand, the district court could deny the certification motion without prejudice, and afford the plaintiffs an opportunity to file a renewed motion supported by a new expert report that cures the deficiencies identified in the Supreme Court's opinion.
But what this opinion does not represent is a sea change in class action law, as some have characterized it. The opinion does not hold that class certification can be granted only if damages can be established by common proof. The earth did not just move. That mischaracterization stems from a careless reading of the opinion.
The only other substantive issue addressed in the opinion is the holding from Dukes regarding merits determinations at the class certification stage, but the discussion doesn't add much to what Dukes already said. Slip op. at 6. The opinion that does meaningfully elaborate on this part of Dukes is Amgen, decided last month.
This morning, the U.S. Supreme Court handed down its opinion on class certification in Comcast Corp. v. Behrend, ___ S.Ct. ___ (Mar. 27, 2013). It is a 5-4 decision and it reverses the class certification order. I will have more on the opinion in a later post.
In Dailey v. Sears, Roebuck and Co., ___ Cal.App.4th ___ (Mar. 20, 2013), the Court of Appeal (Fourth Appellate District, Division One) affirmed an order denying class certification of wage and hour claims stemming from the employer's alleged misclassification of certain employees.
The opinion has an interesting discussion of the level of detail trial judges must include in their class certification rulings. Slip op. at 14-17.
In October 2011, the U.S. Supreme Court granted cert. and directed the Ninth Circuit to reconsider, in light of Dukes, its 2010 opinion affirming class certification in Wang v. Chinese Daily News, Inc., 623 F.3d 743 (9th Cir. 2010). (See this blog post.) Supplemental briefs were filed, and the case was re-argued in July 2012.
Last week, the Ninth Circuit issued its new opinion, Wang v. Chinese Daily News, Inc., ___ F.3d ___ (9th Cir. Mar. 4, 2013), in which it reversed the class certification order and remanded to the district court for reconsideration in light of the "entire record."
On Rule 23(a) commonality, the opinion states:
Wal-Mart is factually distinguishable from our case. Most important, the class here is much smaller. It encompasses only about 200 employees, all of whom work or worked at the same CDN office. Plaintiffs' claims do not depend upon establishing commonalities among 1.5 million employees and millions of discretionary employment decisions. Nonetheless, there are potentially significant differences among the class members.
We vacate the district court's Rule 23(a)(2) commonality finding and remand for reconsideration in light of Wal-Mart. On remand, the district court must determine whether the claims of the proposed class “depend upon a common contention ... of such a nature that it is capable of classwide resolution—which means that determination of its truth or falsity will resolve an issue that is central to the validity of each one of the claims in one stroke.” Wal-Mart, 131 S.Ct. at 2551. Plaintiffs must show “significant proof that [CDN] operated under a general policy of [violating California labor laws].” Ellis, 657 F.3d at 983 (quoting Wal-Mart, 131 S.Ct. at 2553 (alteration omitted)). However, plaintiffs need not show that every question in the case, or even a preponderance of questions, is capable of classwide resolution. So long as there is “even a single common question,” a would-be class can satisfy the commonality requirement of Rule 23(a)(2). Wal-Mart, 131 S.Ct. at 2556 (alteration and internal quotation marks omitted).
Slip op. at 10-11.
The opinion also has this unfortunate paragraph in which the panel badly mis-interprets part of Dukes:
In Wal-Mart, the Supreme Court disapproved what it called “Trial by Formula,” wherein damages are determined for a sample set of class members and then applied by extrapolation to the rest of the class “without further individualized proceedings.” Wal-Mart, 131 S.Ct. at 2561. Employers are “entitled to individualized determinations of each employee's eligibility” for monetary relief. Id. at 2560. Employers are also entitled to litigate any individual affirmative defenses they may have to class members' claims. Id. at 2561. If the district court again certifies a class under Rule 23(b)(3), it should calculate damages in light of the Supreme Court's admonitions in Wal-Mart.
Slip op. at 15. My article from the latest issue of Competition explains why this is a misreading of Dukes. “Dukes and Common Proof in California Class Actions,” Competition (Summer 2012). Wang is not a Title VII case, so the special statutory procedures addressed by the Supreme Court in the cited part of the Dukes opinion are inapplicable. Employers are not "entitled to individualized determinations" of damages in an ordinary wage and hour or FLSA class action, and nothing in Dukes so held. A rehearing petition would certainly be appropriate on this point.
UPDATE: On September 3, 2013, the Ninth Circuit withdrew its opinion in this case and issued a new, modified opinion. The new opinion entirely omitted the paragraph on Dukes quoted above. It also excised the sentence (also quoted above) about "significant proof."
Yesterday, the U.S. Supreme Court handed down its opinion in a securities class action case, Amgen Inc. v. Connecticut Retirement Plans and Trust Funds, ___ U.S. ___ (Feb. 27, 2013). Justice Ginsburg wrote the majority opinion, in which the Court addressed the predominance element of Rule 23(b)(3) and affirmed the Ninth Circuit's judgment upholding the district court's class certification order. Although the case arose in the securities context, the opinion contains language that will be relevant in many other types of cases.
Here is an excerpt from the introduction:
Rule 23(b)(3) requires a showing that questions common to the class predominate, not that those questions will be answered, on the merits, in favor of the class. Because materiality is judged according to an objective standard, the materiality of Amgen’s alleged misrepresentations and omissions is a question common to all members of the class Connecticut Retirement would represent. The alleged misrepresentations and omissions, whether material or immaterial, would be so equally for all investors composing the class.
Slip op. at 2 (emphasis in original). The rest of the opinion elaborates on this basic holding.
The same is true of UCL "fraudulent" prong claims. In such cases, the question is whether the defendant's conduct is likely to mislead a reasonable consumer — an objective standard. For UCL cases pending in federal court under CAFA, Amgen will be a highly relevant binding precedent.
For common-law fraud cases, too, where a presumption of reliance arises based on the materiality of the misrepresentation, Amgen teaches that common questions predominate. In this regard, the opinion can be considered an analog of the California Supreme Court's leading class certification opinion, Vasquez v. Superior Court, 4 Cal.3d 800 (1971). In Vasquez, the Supreme Court observed (among other things) that "[s]ome federal class action cases in which stockholders have alleged fraud on the basis of printed misrepresentations in a corporation prospectus hold that individual proof may not be required to establish reliance by each stockholder." Id. at 815. Later federal cases confirmed this.
The Amgen opinion also has this to say on merits determinations at the certification stage:
Although we have cautioned that a court’s class-certification analysis must be "rigorous" and may "entail some overlap with the merits of the plaintiff ’s underlying claim," Wal-Mart Stores, Inc. v. Dukes, ___ U. S. ___, ___ (2011) (slip op., at 10) (internal quotation marks omitted), Rule 23 grants courts no license to engage in free-ranging merits inquiries at the certification stage. Merits questions may be considered to the extent—but only to the extent—that they are relevant to determining whether the Rule 23 prerequisites for class certification are satisfied. [Citation.]
In September 2012, a cert. petition was filed in the U.S. Supreme Court in a case worth watching, Whirlpool Corp. v. Glazer, No. 12-322. The case has been relisted twice as of January, and is apparently being held pending resolution of another matter, probably Comcast Corp. v. Behrend, No. 11-864 (argued on November 5).
The case involves multi-district litigation concerning alleged design
defects in Whirlpool's Duet®, Duet HT®, Duet Sport®, and Duet Sport HT®
front-load washing machines (“the Duets”). Named plaintiffs Gina Glazer and Trina Allison alleged on behalf of
the class that the Duets do not prevent or eliminate accumulating
residue, which leads to the growth of mold and mildew in the machines,
ruined laundry, and malodorous homes.
Based on the evidentiary record, the district court properly concluded
that whether design defects in the Duets proximately caused mold or
mildew to grow and whether Whirlpool adequately warned consumers about
the propensity for mold growth are liability issues common to the plaintiff class.
These issues are capable of classwide resolution because they are
central to the validity of each plaintiff's legal claims and they will
generate common answers likely to drive the resolution of the lawsuit.
Whirlpool asserts that proof of proximate cause will require individual
determination, but the record shows otherwise. Whirlpool's own
documents confirm that its design engineers knew the mold problem
occurred despite variations in consumer laundry habits and despite
remedial efforts undertaken by consumers and service technicians.
Plaintiffs' expert, Dr. Gary Wilson, opined that consumer habits and the
home environment in which a Duet sits could influence the amount of
biofilm buildup, but those factors were not the underlying cause of
biofilm buildup. Whirlpool contends that Dr. Wilson did not evaluate
later design changes to the Duets to see if they rectified the mold
problem. As we read the pertinent testimony and expert report, Dr.
Wilson acknowledged that Whirlpool made some changes to the “Access”
platform tub design, but there continued to be other areas in the
machine that collected debris. He also examined a new “Horizon”
platform washer and found that it still had cavities on the inside of
the tub exposed to the water side, increasing the likelihood of biofilm
collection. Dr. Wilson testified that even removing those cavities
would not eliminate the biofilm problem.
See Samuel–Bassett v. KIA Motors Am., Inc., 34 A.3d 1, 13 (Pa. 2011)
(rejecting claim that design changes defeated commonality and
predominance where modifications did not significantly alter the basic
Id. at 412, 419 (footnote omitted).
A copy of Whirlpool's cert. petition is available at this link. The respondents' brief is here and the reply brief is here.
Last week, on January 30, 2013, the Supreme Court granted review in Ayala v. Antelope Valley Newspapers, No. S206874, a case involving class certification of a series of claims brought by newspaper carriers against their employer. The claims stem from the employer's decision to treat the carriers as independent contractors rather than employees.
Here is the docket's description of the issues on review:
This case presents questions concerning the determination of whether
common issues predominate in a proposed class action relating to claims
that turn on whether members of the putative class are independent
contractors or employees.
In Ayala v. Antelope Valley Newspapers, Inc., 210 Cal.App.4th 77 (Sept. 19, 2012; pub. ord. Oct. 17, 2012), after the trial court denied class certification, the Court of Appeal (Second Appellate District, Division Four) reversed the order as to five of the eight claims.
The opinion contains this passage, holding that whether, under applicable law, the workers were employees or independent contractors could be established by common proof:
class certification, the trial court agreed with AVP that no commonality exists
regarding AVP’s right to control because individualized questions predominate
as to who performs the services, when and where they perform the services, and
how they perform the services. Many of
the court’s observations (and AVP’s arguments), however, actually point to
conflicts in the evidence regarding AVP’s right to control rather than
individualized questions. ....
Simply put, much of AVP’s evidence,
upon which the trial court relied, merely contradicts plaintiffs’ allegations
that AVP had policies or requirements about how carriers must do their
jobs. The parties do not argue that some
carriers operating under the form agreements are employees while others are
not. Both sides argue that AVP has
policies that apply to all
carriers. The difference between the
parties is the content of those policies.
Plaintiffs argue that the policies are ones that control the way in
which the carriers accomplish their work; AVP argues the policies impose
certain requirements about the result of the work but allow the carriers to
determine manner and means used to accomplish that result. While there may be conflicts in the evidence
regarding whether the policies plaintiffs assert exist, the issue itself is
common to the class. Similarly, whether
the policies that exist are ones that merely control the result, rather than
control the manner and means used to accomplish that result, is an issue that
is common to the class.
Slip op. at 17-18 (italics in original; bold added).
I have not seen the petition for review, answer or reply in this case and would be grateful to anyone who can forward copies.
On Wednesday, the Daily Journal had a front-page article on the Supreme Court's decision to depublish three post-Brinker Court of Appeal opinions on meal periods (discussed here and here). An excerpt:
Kimberly A. Kralowec of the Kralowec Law Group filed a depublication request for each of the three cases in question, though she was not otherwise involved in them. She asserts the decisions misstated the Supreme Court's analysis in Brinker by relying on an older analysis of the word "provide" that refers to the dictionary and interprets the phrasing to mean the employer meets the obligation by simply offering breaks.
"It's a lot more than just offering or authorizing a break," Kralowec said. "The employer has to take affirmative steps to relieve workers of all duty, and refrain from doing anything that would interfere with the employees' ability to take a break."
The reporter, Laura Hautala, also interviewed former Justice Carlos Moreno about the development:
[F]ormer Justice Carlos R. Moreno, who retired from the state Supreme Court in 2011, said that depublished cases typically have something in them that's inconsistent with the high court's own precedent.
"If a case is really off the mark, then the court will elect that remedy," he said.
Mine were not the only depublication requests. Michael Singer filed requests for CELA in Hernandez and Lamps Plus; Joseph Antonelli filed a request for his clients in Tien; and Eve Cervantez filed a request for a group of workers in Lamps Plus.
All of the requests made essentially the same argument -- that the Court of Appeal was badly misinterpreting the Brinker opinion. My requests also pointed out that in so doing, the Court of Appeal failed to adhere to the rule of stare decisis, which requires allegiance not only to the high court's holdings, but also its reasoning. All three opinions were "really off the mark" because they did not adhere to either the ultimate holding or the reasoning of Brinker.
Recently, on January 7, 2013, The Recorder had a front-page article on the first two depublication orders. The article, "High Court Tees Up Number of Post-Brinker Cases," preceded the depublication order in Tien, handed down on January 16. An excerpt:
In a dramatic move, the state Supreme Court depublished two of those rulings — Lamps Plus Overtime Cases, 195 Cal.App.4th 389, and Hernandez v. Chipotle Mexican Grill, 208 Cal.App.4th 1487. In both cases, the Second District had denied class certification.
Kimberly Kralowec of The Kralowec Law Group said in both rulings the Second District had "misinterpreted the Brinker
decision, in particular what employers have to do to comply with their
meal period obligations." Depublishing, she said, "was a very strong
signal that the court disagreed with the analysis" in those two cases.
Needless to say, I'm very pleased to have done my part to achieve depublication in these cases, and I think that depublishing the opinions was the correct outcome, given that the Supreme Court is apparently not ready to revisit any of the issues addressed in Brinker by granting review in these cases.
I am equally pleased by the press attention these developments have garnered. That the Supreme Court would depublish three opinions like this is pretty remarkable, whatever the issue. Many lawyers have sent expressions of thanks and contratulations which I have been so pleased and proud to hear. Congratulations are also due to Michael, Joe and Eve.
In Bradley v. Networkers International LLC, 211 Cal.App.4th 1129 (Dec. 12, 2012, modified Jan. 8, 2013), the Court of Appeal (Fourth Appellate District, Division One) reversed an order denying class certification of wage and hour claims, including meal period and rest break claims, and remanded the case back to the trial court for further proceedings.
The opinion's discussion of predominance is of interest:
Brinker instructs that in
determining whether common or individual issues predominate, a court must focus
on the plaintiff's theory of recovery and assess the nature of the legal and
factual disputes likely to be presented under this theory. Applying this analysis, we again determine
that the trial court erred in concluding that individual issues are likely to
predominate on the independent contractor/employee issue.
.... The undisputed evidence showed Networkers had
consistent companywide policies applicable to all employees regarding work
scheduling, payments, and work requirements.
Whether those policies created an employer-employee relationship, as
opposed to an independent contractor relationship, is not before us. The critical fact is that the evidence likely
to be relied upon by the parties would be largely uniform throughout the class.
Networkers argues, and we agreed in
our initial opinion, that the issue of which employees had missed breaks and
how many breaks were missed and whether those missed breaks were the result of
Networkers' lack of a break policy was highly dependent on the testimony of
each plaintiff, essentially requiring a mini-trial on each class member's case
to determine the eligibility for recovery and the amount of damages to which
each plaintiff would be entitled.
this argument conflicts with Brinker's
clear holdings that for meal breaks, an employer has an obligation to relieve
its employee of all duty, permit the employee to take an uninterrupted
30-minute break, and to not impede or discourage the employee from doing
supra, 53 Cal.4th at p.1040.)
Similarly, an employer has an obligation to provide a rest break, and if
the employer fails to do so, the employer cannot claim the employee waived the
break. (Id. at p. 1033.) Under the
logic of these holdings, when an employer has not authorized and not provided
legally-required meal and/or rest breaks, the employer has violated the law and
the fact that an employee may haveactually taken a break or was able to
eat food during the work day does not show that individual issues will
predominate in the litigation.
Slip op. at 21, 24-25, 30-31 (footnote omitted). Bradley is one of the Brinker "grant and hold" cases, so its discussion of Brinker is of particular interest to those following the post-Brinker opinions.
UPDATE: On March 20, 2013, the Supreme Court denied the employer's petition for review in this case. Therefore, unlike threeother post-Brinker opinions, in which denial of class certification was affirmed rather than reversed, Bradley remains a published, citable precedent.