New UCL/class certification decision: Arias v. Superior Court

In Arias v. Superior Court, ___ Cal.App.4th ___ (Jul. 24, 2007), the Court of Appeal (Third Appellate District) addressed whether the trial court properly granted the defendant's motion to strike the representative allegations from the plaintiff's complaint. The opinion has two holdings of note.

First, the court held that "[t]he UCL requires that a representative claim be brought as a class action because the UCL requires compliance with the class action provisions of Code of Civil Procedure section 382." Slip op. at 2; see id. at 3-12. This part of the holding does not seem particularly noteworthy to me, if only because several other courts have already said this, albeit in dicta. Arias is, however, the first decision to analyze the question in any detail. (The decision does not expressly address the injunctive relief question or whether a UCL claim seeking injunctive relief only must be formally certified for class treatment before the court may order the defendant to halt its wrongful conduct.)

The decision also includes an interesting diccussion of Prop. 64's impact on associational standing. According to the Arias court, Prop. 64 did not change the rules of associational standing because it is Code of Civil Procedure section 382, not the UCL, that authorizes such standing:

The Supreme Court has interpreted the second half of section 382 as permitting two types of representative suits: class actions and actions by an association on behalf of its members. (Californians For Disability Rights v. Mervyn's, LLC (2006) 39 Cal.4th 223, 233, fn. 4.) [n.5] ....

[n.5] As enacted, associations and organizations whose members have a joint interest in their affairs, such as joint associations and partnerships, were included within the representative provisions of section 382. (See Code commrs. notes foll. 14 West’s Ann. Code Civ. Proc., § 382 as enacted in 1872 (2004 ed.) p. 269.)

These provisions were retained when the UCL was amended pursuant to Proposition 64, the only change being the deletion of the phrase “person acting for the interests of itself,” and its replacement with “person who has suffered injury . . . .” Accordingly, the amendments affect only natural “persons,” who are subject to the injury in fact and damage requirements of Business and Professions Code section 17204.

Slip op. at 8 & n.5. The court's use of the word "damage" to describe section 17204 is also interesting. Elsewhere, the court says that "Business and Professions Code section 17204 now requires that a plaintiff have suffered damages." Slip op. at 4-5 (emphasis added).

The second noteworthy holding in Arias is the court's conclusion that the Labor Code Private Attorneys General Act ("PAGA") (Lab. Code §§ 2698 et seq.) authorizes a representative action, similar to a pre-Prop. 64 UCL representative action, without formal class certification. Slip op. at12-16. The court predicated its holding on Labor Code section 2699, which states:

Notwithstanding any other provision of law, any provision of this code that provides for a civil penalty to be assessed and collected by the Labor and Workforce Development Agency or any of its departments, divisions, commissions, boards, agencies, or employees, for a violation of this code, may, as an alternative, be recovered through a civil action brought by an aggrieved employee on behalf of himself or herself and other current or former employees pursuant to the procedures specified in Section 2699.3.”

Slip op. at 12-13 (quoting Lab. Code § 2699). The court said that "[t]he PAGA was adopted to empower aggrieved employees to act as private attorneys general and to authorize them to seek civil penalties for Labor Code violations that previously could be assessed only by state agencies." Id. at 14 (citing Dunlap v. Superior Court, 142 Cal.App.4th 330, 336 (2006)). The court explained:

Both the language of the PAGA and the express intent of the Legislature indicate that an aggrieved employee may bring an action on behalf of other employees without complying with the requirements of a class action. Labor Code section 2699 specifically states that an aggrieved employee may bring an action on behalf of other employees, “[n]otwithstanding any other provision of law . . . .” The wording of the PAGA, which authorizes an aggrieved employee to bring an action “on behalf of himself or herself and other current or former employees . . . [,]” is similar to the former wording of Business and Professions Code section 17204, which authorized a person to bring an action “acting for the interests of itself, its members or the general public.” Non-class representative actions were authorized under former Business and Professions Code section 17204. (See Kraus v. Trinity Management Services, Inc., supra, 23 Cal.4th 116.) Unlike the current version of Business and Professions Code section 17203 after the passage of Proposition 64, the PAGA does not require that an action brought by an aggrieved employee comply with section 382 of the Code of Civil Procedure.

Id. at 14-15.

Comments

[Kevin Norte]

I believe the the latest PAGA opinion will result in PAGA becoming the next "Tort Du Jour" and said just as much in a piece I wrote for the Metropolitian News-Enterprise on Thursday, July 26, 2007 at page 9. Expect a wave of PAGA cases to flood the California Courts.
I also reprinted the version I submitted to the Met-News at
http://blogcabinca.org/2007/07/25/california-appeals-court-promotes-the-filing-of-more-lawsuits/