The UCL Practitioner

U.S. Supreme Court's most recent word on class certification: Comcast Corp. v. Behrend

In Comcast Corp. v. Behrend, ___ S.Ct. ___ (Mar. 27, 2013), handed down on Wednesday, the U.S. Supreme Court addresed Rule 23(b)(3) class certification for the first time since Amgen Inc. v. Connecticut Retirement Plans and Trust Funds, ___ U.S. ___ (Feb. 27, 2013) (discussed in this blog post).

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.

For more on the Comcast opinion, Andrew Longstreth of Reuters reports that "Plaintiffs' bar dodges bullet in Comcast antitrust decision."  [via]

BREAKING NEWS: U.S. Supreme Court hands down class certification opinion: Comcast Corp. v. Behrend

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. 

The docket is Comcast Corp. v. Behrend, no. 11-864.  The case was argued on November 5, 2012.

New class certification opinion: Dailey v. Sears, Roebuck and Co.

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. 

Court of Appeal strikes down no-class-action arbitration clause as unconscionable: Compton v. Superior Court

In Compton v. Superior Court (American Management Services, LLC), ___ Cal.App.4th ___ (Mar. 19, 2013), the Court of Appeal (Second Appellate District, Division Eight) reversed an order compelling arbitration, finding the arbitration clause unconscionable under Armendariz.  One justice dissented.

A short excerpt from the majority opinion:

Concepcion did not discuss the modicum of bilaterality standard adopted by Armendariz, which is not a class action case.  And Concepcion did not overrule Armendariz.  We both agree with and are therefore bound to follow our Supreme Court and apply Armendariz to this case.  (Truly Nolen of America v. Superior Court, supra, 208 Cal.App.4th at p. 507.)  Accordingly, we conclude that Concepcion does not apply to invalidate Armendariz’s modicum of bilaterality rule, at least in this context.

Slip op. at 20.

U.S. Supreme Court hears oral argument today in class arbitration case: Oxford Health Plans LLC v. Sutter

Today at 10:00 a.m. Eastern, the U.S. Supreme Court will hear oral argument in a case involving class arbitration, Oxford Health Plans LLC v. Sutter, No. 12-135.

When the transcript is posted online later today, it should be available at this link. 

For more on Oxford Health, see this blog post.  Here is the question presented as stated in the cert. petition:

In Stolt-Nielsen v. AnimalFeeds International Corp., 130 S. Ct. 1758, 1776 (2010), this Court made clear that "class-action arbitration changes the nature of arbitration to such a degree that it cannot be presumed the parties consented to it by simply agreeing to submit their disputes to arbitration." In this case, an arbitrator concluded that the parties affirmatively consented to class arbitration on the basis of a contract provision stating: "No civil action concerning any dispute arising under this Agreement shall be instituted before any court, and all such disputes shall be submitted to final and binding arbitration." The question presented is:

Whether an arbitrator acts within his powers under the Federal Arbitration Act (as the Second and Third Circuits have held) or exceeds those powers (as the Fifth Circuit has held) by determining that parties affirmatively "agreed to authorize class arbitration," Stolt-Nielsen, 130 S. Ct. at 1776, based solely on their use of broad contractual language precluding litigation and requiring arbitration of any dispute arising under their contract.

The Third Circuit's opinion was Sutter v. Oxford Health Plans LLC, 675 F.3d 215 (3d Cir. 2012).

Off topic: Save the San Francisco Law Library: public hearing next Wednesday

There will be a public hearing next Wednesday, March 27, 2013 at 10:00 a.m. at San Francisco City Hall to discuss whether the City will provide adequate space for the San Francisco Law Library. A couple of weeks ago, the library filed suit against the City over this problem. 

I'm quoting the library's press release in full below.  This is very important; if you are in San Francisco please consider participating.  The library director, Marcia Bell, asks that we all RSVP to her if we can attend.  See below for details.

On March 27 at 10 a.m. in room 250, the Board of Supervisors Budget & Finance Committee is scheduled to consider a proposal to lease only 20,000 square-feet of space at 1200 Van Ness Avenue. The City is proposing to move the Library here eventually after the Veterans Building closes in May.
 
The Law Library had proposed leasing 30,000 square-feet as the absolute minimum the Library needs to function, house its collection, and effectively serve the public. The City proposal is grossly inadequate.
 
Please come on March 27 to City Hall to speak for a minute or two in support of the Library and explain why it needs appropriate funding and space to preserve public access to legal resources. The hearing will be held in Room 250, starting at 10 a.m.
 
This is the first ever public hearing about the Law Library’s space.  Given the lack of understanding and interest on the part of the city up until this point, this hearing could make all the difference. The supervisors really need to hear from the people who need and care about the library.
 
If you or anyone else is interested in attending this meeting, please email the Law Library director, Marcia Bell, at marcia.bell @ sfgov.org so we can put you on the list and provide further details.  We will reconfirm the time and location.  We are anxious to get the word out to as many people as possible—please pass the info along to any one you can. 

For additional information about the Law Library's fight for sufficient space and pending litigation against the City, please visit the Library’s homepage at www.sflawlibrary.org.

Questions? Please call us at 415-554-6821.

New UCL "unfair" prong opinion: West v. JPMorgan Chase Bank, N.A.

In West v. JPMorgan Chase Bank, N.A., ___ Cal.App.4th ___ (Mar. 18, 2013), the Court of Appeal (Fourth Appellate District, Division Three) nicely summarized the three-way split in authority on "unfair" conduct in UCL consumer actions:

Several definitions of “unfair” under the UCL have been formulated.  They are:

1.  “An act or practice is unfair if the consumer injury is substantial, is not outweighed by any countervailing benefits to consumers or to competition, and is not an injury the consumers themselves could reasonably have avoided.”  (Daugherty v. American Honda Motor Co., Inc. (2006) 144 Cal.App.4th 824, 839.)

2.  “‘[A]n “unfair” business practice occurs when that practice “offends an established public policy or when the practice is immoral, unethical, oppressive, unscrupulous or substantially injurious to consumers.”  [Citation.]’  [Citation.]”  (Smith v. State Farm Mutual Automobile Ins. Co. (2001) 93 Cal.App.4th 700, 719.)

3.  An unfair business practice means “‘the public policy which is a predicate to the action must be “tethered” to specific constitutional, statutory or regulatory provisions.’”  (Scripps Clinic v. Superior Court (2003) 108 Cal.App.4th 917, 940.)

Slip op. at 28.  The Court held that the plaintiff's complaint adequately alleged that the defendant "engaged in unfair business practices under any of the three definitions," and that the trial court had improperly sustained the defendant's demurrer to the UCL cause of action.  Id. at 29.

U.S. Supreme Court considers CAFA for the first time: The Standard Fire Insurance Co. v. Knowles

On Tuesday, the U.S. Supreme Court handed down an opinion in which it considered CAFA for the first time. The Standard Fire Ins. Co. v. Knowles, ___ S.Ct. ___ (Mar. 19, 2013). 

The Court held that a pre-certification stipulation not to seek damages exceeding $5 million (CAFA's jurisdictional minimum) was not binding on absent class members; therefore, the district court should have disregarded the stipulation when it ruled on the remand motion:

As applied here, the statute tells the District Court to determine whether it has jurisdiction by adding up the value of the claim of each person who falls within the definition of Knowles’ proposed class and determine whether the resulting sum exceeds $5 million. If so, there is jurisdiction and the court may proceed with the case. The District Court in this case found that resulting sum would have exceeded $5 million but for the stipulation.

And we must decide whether the stipulation makes a critical difference. In our view, it does not. Our reason is a simple one: Stipulations must be binding.  [Citations.]  The stipulation Knowles proffered to the District Court, however, does not speak for those he purports to represent.

That is because a plaintiff who files a proposed class action cannot legally bind members of the proposed class before the class is certified. See Smith v. Bayer Corp., 564 U. S. ___, ___ (2011) ....

Because his precertification stipulation does not bind anyone but himself, Knowles has not reduced the value of the putative class members’ claims. For jurisdictional purposes, our inquiry is limited to examining the case “as of the time it was filed in state court,” Wisconsin Dept. of Corrections v. Schacht, 524 U. S. 381, 390 (1998). At that point, Knowles lacked the authority to concede the amount-in-controversy issue for the absent class members. The Federal District Court, therefore, wrongly concluded that Knowles’ precertification stipulation could overcome its finding that the CAFA jurisdictional threshold hadbeen met.

Slip op. at 3-4. 

The opinion suggests that no pre-certification stipulations or concessions can ever bind absent class members.  Such a holding could have ramifications that extend far beyond the context of CAFA jurisdiction.

The opinion also contains this paragraph:

Knowles argues in the alternative that a stipulation is binding to the extent it limits attorney’s fees so that the amount in controversy remains below the CAFA threshold.  We do not consider this issue because Knowles’ stipulation did not provide for that option.

Slip op. at 7.  Although not mentioned in the opinion, apparently the $5 million threshold was reached in this case only by adding a potential attorneys' fees award to the potential class members' potential damages.  The district court will have to consider on remand whether the attorneys' fees should be counted in the calculation (and if so, what amount should be assumed).  In other words, even disregarding the stipulation, the defendant will still have to establish as a factual matter that the amount in controversy exceeds $5 million. 

A blog reader emailed me to suggest that Knowles overruled the Ninth Circuit's opinion in Lowdermilk v. United States Bank, N.A., 479 F.3d 994 (9th Cir. 2007) (discussed in this blog post).  I have not had an opportunity to go back to the Lowdermilk opinion and consider that idea.  

SCOTUSblog had a very interesting post on the opinion by Professor Debra Lyn Bassett of Southwestern Law School.

New UCL competitor and Prop. 64 standing opinion: Law Offices of Mathew Higbee v. Expungement Assistance Services

In Law Offices of Mathew Higbee v. Expungement Assistance Services, ___ Cal.App.4th ___ (Mar. 14, 2013), the Court of Appeal (Fourth Appellate District, Division Three) held that Prop. 64 did not eliminate UCL actions brought against a competitor whose unlawful business practices were stealing away the plaintiff's customers, market share and profits. 

To me, the issues raised in this case should have been no-brainers.  Nothing in Prop. 64 suggested an intention by voters to elimimate UCL competitor actions, and after the Supreme Court's holdings in Clayworth and Kwikset, there should have been no doubt that a competitor who loses customers, market share and profits (that is, suffers monetary "injury in fact") because of the unfair competition of a competing business can bring a UCL action and seek injunctive relief. 

Nevertheless, the defendant in Higbee argued that the plaintiff business competitor lacked Prop. 64 standing because it could allege no "direct" business dealings with the defendant.  Slip op. at 2.  The opinion approaches this argument as though it had some conceivable merit.  It does not, as the opinion correctly concludes.

In Hibgee, the plaintiff was a law firm specializing in providing record expungement services.  The defendant provided the same services, but did so using employees who were neither licensed to practice law nor registered or bonded as "legal document assistants" under the Business and Professions Code:

Higbee argues the allegation that EAS violated section 6125 et seq. (pertaining to the requirement of an active law license), section 6400 et seq. (pertaining to the registration and bonding of, and permissible activities of, legal document assistants), and Penal Code section 4852.2 (pertaining to the requirement of a law license for the handling of certain criminal matters), constituted an allegation of an unlawful business practice within the meaning of the UCL.  He says he is entitled to base a UCL lawsuit on those statutes, citing Stop Youth Addiction, Inc. v. Lucky Stores, Inc. (1998) 17 Cal.4th 553 (superseded in part by Prop. 64, as recognized in Californians for Disability Rights v. Mervyn’s, LLC, supra, 39 Cal.4th at p. 227).

Slip op. at 9-10 (footnotes omitted).

As a preliminary matter, the Court agreed that the UCL "borrows" violations of other laws and makes them independently actionable, and found "no reason why the alleged violations of statutes concerning the unauthorized practice of law cannot serve as a predicate for Higbee's UCL action."  Id. at 9-12.

Next, the Court considered, and rejected, the defendant's argument that the plaintiff lacked post-Prop. 64 standing because it had not suffered the right type of injury.  Id. at 12-20. 

The operative complaint alleged that "as a result of EAS’s unauthorized practice of law, advertisement of illegal services, and representation that it could perform the same legal services as [plaintiff] did, he had been forced, in order to compete, to lower his prices and to expend more money on advertising, he had lost clients and revenue, and the value of his law firm had diminished."  Id. at 13.  The defendant argued that "a loss of market share is not the type of economic injury that qualifies as an injury in fact for the purposes of standing under the UCL.  Id.

The Court of Appeal disagreed, citing, among other cases, Clayworth, Kwikset, Saunders v. Superior Court, 27 Cal.App.4th 832 (1994), Allergan, Inc. v. Athena Cosmetics, Inc., 640 F.3d 1377 (Fed. Cir. 2011) (discussed in this blog post), Pom Wonderful LLC v. Coca-Cola Co., 679 F.3d 1170 (9th Cir. 2012) (discussed here), and VP Racing Fuels, Inc. v. General Petroleum Corp., 673 F.Supp.2d 1073 (E.D. Cal. 2009).  In Saunders, Allergan, and VP Racing, "the alleged injury was based on reduced market share."  Slip op. at 16.

This was sufficient for UCL standing: 

As we have observed, the original purpose of the unfair competition laws was to protect against “wrongful conduct in commercial enterprises which resulted in business loss to another, ordinarily by the use of unfair means in drawing away customers from a competitor.”  (People ex rel. Mosk v. National Research Co. of Cal., supra, 201 Cal.App.2d at p. 770.)  Although the UCL was ultimately expanded to provide equitable relief to consumers in addition to business competitors (ibid.), this does not mean that the UCL no longer protects business competitors (Kwikset Corp. v. Superior Court, supra, 51 Cal.4th at p. 320).

As the Supreme Court stated in Kwikset Corp. v. Superior Court, supra, 51 Cal.4th 310, the purpose of the UCL “‘is to protect both consumers and competitors by promoting fair competition in commercial markets for goods and services.’  [Citations.]”  (Id. at p. 320; accord, Hall v. Time Inc. (2008) 158 Cal.App.4th 847, 852.)  Put another way, the UCL “governs ‘anti-competitive business practices’ as well as injuries to consumers, and has as a major purpose ‘the preservation of fair business competition.’  [Citations.]”  (Cel-Tech Communications, Inc. v. Los Angeles Cellular Telephone Co. (1999) 20 Cal.4th 163, 180.)

“There are innumerable ways in which economic injury from unfair competition may be shown.  A plaintiff may (1) surrender in a transaction more, or acquire in a transaction less, than he or she otherwise would have; (2) have a present or future property interest diminished; (3) be deprived of money or property to which he or she has a cognizable claim; or (4) be required to enter into a transaction, costing money or property, that would otherwise have been unnecessary.  [Citation.]”  (Kwikset Corp. v. Superior Court, supra, 51 Cal.4th at p. 323.)  The foregoing list is not exhaustive and the notion of “lost money” under the UCL is not limited.  (Ibid.)  Moreover, “the quantum of lost money or property necessary to show standing is only so much as would suffice to establish injury in fact” and “it suffices . . . to ‘“allege[] some specific, ‘identifiable trifle’ of injury.”’  [Citations.]”  (Id. at pp. 324-325, fn. omitted.)  “‘“The basic idea . . . is that an identifiable trifle is enough for standing to fight out a question of principle; the trifle is the basis for standing and the principle supplies the motivation.”’  [Citations.]”  (Id. at p. 325, fn. 7.)

In the matter before us, we hold that Higbee, having alleged that he had been forced to pay increased advertising costs and to reduce his prices for services in order to compete, and that he had lost business and the value of his law practice had diminished, succeeded in alleging at least an identifiable trifle of injury as necessary for standing under the UCL.

Slip op. at 19-20 (emphasis added).

Finally, the Court reached the defendant's core argument that the plaintiff "cannot demonstrate standing to bring a UCL claim because he never engaged in any business dealings with EAS."  Id. at 21.  The defendant relied wholly on Clayworth, where the Supreme Court stated:  "While the voters clearly intended to restrict UCL standing, they just as plainly preserved standing for those who had had business dealings with a defendant and had lost money or property as a result of the defendant’s unfair business practices."  Id. (quoting Clayworth v. Pfizer, Inc., 49 Cal.4th 758, 788 (2010)).    

The Court of Appeal carefully considered Clayworth and determined that the Supreme Court did not "intend[] to engraft upon section 17204 a requirement that all plaintiffs must, in every event, have engaged in business dealings with a defendant in order to demonstrate UCL standing."  Id. at 23.  The Court observed that it is possible to "allege facts sufficient to support causation in the absence of direct business dealings" (id.), and concluded:

The language of the UCL does not leave the court hamstrung, unable to even consider an action seeking injunctive relief just because the defendant engages in its purportedly unlawful activity via the Internet and has not had any direct business dealings with the plaintiff.

Id. at 24.

A final interesting aspect of this opinion is that it rejected as irrelevant, in an "unlawful" prong case, decisions involving the UCL's "fraudulent" prong, which interpreted "as a result of" to mean "reliance on":

EAS’s citations to cases pertaining to the requirement to allege reliance in order to show causation in cases based on fraud (see, e.g., In re Tobacco II Cases (2009) 46 Cal.4th 298; Pfizer Inc. v. Superior Court (2010) 182 Cal.App.4th 622) do not convince us otherwise.

Id.; see also Medrazo v. Honda of North Hollywood, 205 Cal.App.4th 1 (2012) (discussing Supreme Court's Tobacco II footnote, which states that "there are doubtless many types of unfair business practices in which the concept of reliance, as discussed here, has no application") (see this blog post for more on Medrazo).

In the last sentence of the opinion, the Court of Appeal directed the clerk to forward a copy of the opinion to the Attorney General, presumably so that her office can take appropriate action against the defendant, perhaps including an action for civil penalties under the UCL. Slip op. at 25.

Congratulations to Mat Higbee, who represented himself in this case. 

U.S. Supreme Court hands down CAFA opinion: The Standard Fire Ins. Co. v. Knowles

This morning, the U.S. Supreme Court handed down its opinion in a CAFA case, The Standard Fire Ins. Co. v. Knowles, ___ S.Ct. ___ (Mar. 19, 2013). 

The case was argued on January 7, 2013.  The argument transcript is available at this link.  The last paragraph of the unanimous opinion reads:

In sum, 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. For this reason, we believe the District Court, when following the statute to aggregate the proposed class members’ claims, should have ignored that stipulation. Because it did not, we vacate the judgment below and remand the case or further proceedings consistent with this opinion.

As I explained in this post, the question was whether the plaintiff could defeat CAFA removal by "stipulating" that the amount in controversy did not exceed $5 million.  Based on the paragraph quoted above, it sounds like the Supreme Court's answer is no. 

I will have more on the opinion in a later post. 

[via]

"Unfair-competition suit reinstated"

Bob Egelko of the San Francisco Chronicle had this article in yesterday's paper on the Court of Appeal's opinion last week in Law Offices of Mathew Higbee v. Expungement Assistance Services, ___ Cal.App.4th ___ (Mar. 14, 2013).

Higbee is a UCL competitor action and the opinion is quite interesting.   From the article:

A state appeals court has reinstated a lawyer's suit against a company offering cut-rate legal services, ruling that - despite a voter-approved law limiting unfair-competition suits - a business that's being undercut by a rival's practices can still seek redress in court.

I will have more on the opinion in a later post. 

Supreme Court sets arbitration case for oral argument: Sonic-Calabasas A, Inc. v. Moreno

The Supreme Court has announced that it will hear oral argument on Wednesday, April 3, 2013 at 9:00 a.m. in Los Angeles in Sonic-Calabasas A, Inc. v. Moreno, S174475.  This case, while not a class action, involves arbitration-related issues and the Court is expected to construe Concepcion. 

This is the statement of the issue on review (from the docket):

This case presents the following 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?

The Supreme Court said "no" to both questions in its February 2011 (pre-Concepcion) opinion, which held that a provision in an employment contract waiving the right to a Berman hearing in favor of arbitration was unconscionable.  Sonic-Calabasas A, Inc. v. Moreno, 51 Cal.4th 659 (2011).  Justice Moreno's majority opinion was joined by Chief Justice George, Justice Kennard, and Justice Werdegar; Justices Chin, Baxter and Corrigan dissented.

In October 2011, the U.S. Supreme Court granted cert. and directed that the case be reconsidered in light of Concepcion.  Last year, supplemental briefs were filed by the parties and several amicus participants.  This briefing was completed in July 2012. 

Since the original opinion was handed down, Chief Justice George and Justice Moreno have both departed the Court and been replaced by Chief Justice Cantil-Sakauye and Justice Liu, respectively.  It is very hard to predict where this might go, but the opinion is almost sure to be relevant to the pending Sanchez and Iskanian cases. 

I am unlikely to be able to make it down to LA for this argument.  If you are planning to attend and would like to write up a report for posting here, please let me know. 

New Ninth Circuit CAFA opinion: Kuxhausen v. BMW Financial Services NA LLC

In Kuxhausen v. BMW Financial Services NA LLC, ___ F.3d ___ (9th Cir. Feb. 25, 2013), the Ninth Circuit held that the defendant's removal petition was timely filed under CAFA.  The Complex Litigator has a detailed post on the opinion.

Ninth Circuit reverses class certification post-Dukes: Wang v. Chinese Daily News, Inc.

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." 

"Welcome to Food Court"

On March 1, 2013, the Recorder had this article on the numerous false advertising cases pending against food manufacturers in the Northern District of California, which the article says has "emerg[ed] as preferred venue for a new wave of class action litigation over food labels alleged to mislead consumers or violate federal regulations."

Many thanks to the blog reader who forwarded the link.