The UCL Practitioner

Supreme Court takes up attorneys' fees case: Laffitte v. Robert Half International Inc.

On Wednesday, February 25, 2014, the Supreme Court granted review in Laffitte v. Robert Half International, No. S222996.  The docket does not yet provide a summary of the issues to be considered.

In Laffitte, the Court of Appeal (Second Appellate District, Division Seven), affirmed the trial court's order granting final approval of a class action settlement and attorneys' fees award in a wage and hour case.  Laffitte v. Robert Half Int'l Inc., 231 Cal.App.4th 860 (2014), review granted.  My original blog post on the opinion is here. 

It is not clear which issue or issues the Court will be focusing on. If and when I obtain copies of the petition for review and other briefing, I will post them here. 

Newly-launched law blog covers the California Supreme Court: SCOCAblog

I highly recommend that all readers of this blog check out SCOCAblog, a new blog covering the California Supreme Court.  The new blog, which is patterned after SCOTUSblog, was launched about three months ago by U.C. Berkeley's California Constitution Center and the Hastings Law Journal. 

From the home page:

We provide analysis of doctrinal and procedural issues in cases before the court, and news about developments pertaining to the court itself. Our contributors include former justices of the court, academics and practitioners with subject matter expertise, and advocates experienced in appellate practice before the state high court.

From the introductory post by former Associate Justice Joseph Grodin:

Followers of the U.S. Supreme Court have long had a blog – the SCOTUSblog – to assist them in their understanding. Now, with the advent of SCOCAblog, students of the California Supreme Court will have an equivalent resource for keeping a much-needed eye on what is probably the second most significant court in the land.

(Hyperlinks added.) 

Welcome to the blogosphere, SCOCAblog! 

New UCL Prop. 64 standing opinion: Two Jinn, Inc. v. Government Payment Service, Inc.

In Two Jinn, Inc. v. Government Payment Service, Inc., ___ Cal.App.4th ___ (Feb. 2, 2015), the Court of Appeal (First Appellate District, Division Four) addressed Prop. 64 standing in the context of a UCL competitor action, and affirmed the trial court's grant of summary judgment in the defendant's favor.

The plaintiff (Aladdin Bail Bonds) advanced a couple of standing arguments, each of which the Court rejected.

Aladdin contends that GPS's allegedly unfair business practices caused it economic injury when customers who would otherwise have used Aladdin's services used GPS's services instead. We disagree because the summary judgment evidence shows that any diversion of customers from Aladdin to GPS did not result from the fact that GPS does not have a bail bond license, or that it does not comply with other regulations governing the activities of licensed bail bond agents.

Slip op. at 9.

Alternatively, Aladdin contends it has standing because it suffered an economic injury by incurring “significant costs and expenses” to investigate the “nature, scope and extent of Defendant's conduct.” .... Aladdin paid money to hire outside counsel, obtain copies of GPS's contracts, and to determine which California counties were involved with GPS's allegedly unlawful activities ... [and] incurred expenses by diverting staff to investigate GPS's activities. ....

 

These “pre-litigation” costs do not establish standing to bring a UCL claim because they are not an economic injury caused by the business practices that Aladdin characterizes as unlawful. Rather, as Pinney's declaration confirms, the reason Aladdin incurred pre-litigation expenses was to generate evidence. Aladdin then used that evidence to support this lawsuit. “Plaintiffs cannot establish standing to pursue a UCL claim based on expenses incurred in order to bring their UCL claim. If they could, the requirement that individuals show they lost money or property ‘as a result’ of the challenged practice in order to have standing to sue under the UCL would be meaningless. [Citation.]” (Robinson v. HSBC Bank USA (N.D.Cal.2010) 732 F.Supp.2d 976, 989.)

Slip op. at 12-13.

This part of the opinion stands in contrast to Glen Oaks Estates Homeowners Assn. v. Re/Max Premier Properties, Inc., 203 Cal.App.4th 913 (2012) (discussed in this blog post), which held that investigative costs are sufficient "injury in fact" to confer standing under Kwikset.

The opinion then goes on to hold that, even if the plaintiff did have standing, the defendant's conduct was neither "unlawful" nor "unfair" within the meaning of the UCL.  Slip op. at 15-24.

Supreme Court depublishes another post-Brinker opinion: In re Walgreen Co. Overtime Cases

Last week, on February 18, 2015, the Supreme Court depublished the Court of Appeal's opinion in In re Walgreen Co. Overtime Cases, 231 Cal.App.4th 437 (2014).  The opinion is no longer citable as a precedent.

In Walgreen, the Court of Appeal (Second Appellate District, Division One) affirmed the trial court's order denying class certification of meal period claims.  In so doing, the Court discussed the substantive meal period standards adopted in Brinker, but did so in a manner that the Supreme Court apparently considered inconsistent with its Brinker opinion.  Depublication requests were filed by both CELA and CAOC.

This development is just as important as the Supreme Court's orders, in late 2012 and early 2013, depublishing three other post-Brinker opinions.  Those orders are discussed in these blog posts.

"Class(ic) Settlement Problems" by Judge Curtis Karnow

The January/February 2015 issue of CAOC Forum has an article by San Francisco Superior Court Judge Curtis E.A. Karnow entitled "Class(ic) Settlement Problems."  

The article provides "a list of issues which often seem to pose problems when counsel file motions for preliminary approval of [class action] settlements." 

Four resources are listed at the end of the article, including Judge Brick's Guidelines for Counsel re Class Settlement Applications, as uploaded to my blog in 2009 at this link. 

Judge Karnow's author's note says that the article "has been submitted for publication in both defense and plaintiffs' publications for the benefit of both bars seeking to resolve class action cases through settlement." The link provided above is a CAOC members-only link.  The article is also available here and here.

Recent opinion on arbitrability of UCL claims: McGill v. Citibank, N.A.

My post on this case is long overdue.  In McGill v. Citibank, N.A., 232 Cal.App.4th 753 (Dec. 18, 2014), the Court of Appeal (Fourth Appellate District, Division Three) held that the Federal Arbitration Act, as construed in Concepcion, preempts the California Supreme Court's Broughton-Cruz rule. Under this rule, "arbitration provisions are unenforceable as against public policy if they require arbitration of UCL, FAL, or CLRA injunctive relief claims brought for the public's benefit."  Slip op. at 2. 

A number of federal courts, including the Ninth Circuit, had so held before, but this was the first time a California appellate court had addressed the issue in a published opinion. 

A petition for review is now pending in the California Supreme Court.  McGill v. Citibank, No. S224086.

New post-Brinker class certification opinion: Gerard v. Orange Coast Mem. Med. Ctr.

In Gerard v. Orange Coast Memorial Medical Center, ___ Cal. App.4th ___ (Feb. 10, 2015), the Court of Appeal (Fourth Appellate District, Division Three) reversed the trial court's order granting the defendant's preemptive motion to deny class certification.

Such motions are discussed here, as well as in my article, “A Tool for Mischief: Preemptive Defense Motions Under BCBG Overtime Cases to Reject Class Certification,” CAOC Forum, January/February 2009 (with Kevin K. Green) (CAOC members-only link).

The trial court granted the defense motion after concluding that the named plaintiffs "failed to show that they have any claim against the Defendant."  Slip op. at 4.  In its opinion, the Court of Appeal focused primarily on a substantive legal question involving second meal periods, which, it held, the trial court had incorrectly resolved in the defendant's favor.  Id. at 5-17.  On class certification, the Court of Appeal said this:

[Plaintiffs] argue the court improperly denied class certification for several reasons.  Among other things they cite as an abuse of discretion the court’s community interest analysis based on its erroneous “legal assumption that ‘liability is not established by an illegal policy.’” Plaintiffs contend that assumption is contrary to the holding of Brinker, supra, 53 Cal.4th at page 1033, and Faulkinbury v. Boyd & Associates, Inc. (2013) 216 Cal.App.4th 220, 232.  We conclude this argument has merit.

Brinker summarized the applicable standard of review as follows:  “On review of a class certification order, an appellate court’s inquiry is narrowly circumscribed.  ‘The decision to certify a class rests squarely within the discretion of the trial court, and we afford that decision great deference on appeal, reversing only for a manifest abuse of discretion: “Because trial courts are ideally situated to evaluate the efficiencies and practicalities of permitting group action, they are afforded great discretion in granting or denying certification.”  [Citation.]  A certification order generally will not be disturbed unless (1) it is unsupported by substantial evidence, (2) it rests on improper criteria, or (3) it rests on erroneous legal assumptions.  [Citations.]’  [Citations.]”  (Brinker, supra, 53 Cal.4th at p. 1022.)

The central truth of the court’s nearly two-page order denying class certification is set forth near the beginning where the court explained:  “One of the most basic requirements for class certification is that the proposed Representative Plaintiffs show that they have a prima facie claim.  For, if Plaintiffs do not have a claim there can be no typicality or commonality.  Here, the proposed Representative Plaintiffs have failed to show that they have any claim against the Defendant.”

As we have explained above, plaintiffs have shown their invalid second meal period policy and waiver theory is potentially viable, and plaintiffs have proffered substantial evidence hospital violated the governing law by failing to provide second meal periods or premium pay in lieu thereof on shifts longer than 12 hours as required.  The court’s contrary conclusions rest on improper criteria and assumptions that are erroneous as a matter of law.  Consequently, we conclude the court abused its discretion by denying [plaintiffs] class certification on the grounds plaintiffs failed to show they have any claim.  We express no opinion on the other stated grounds for denial of class certification but instead direct the court to consider them further on remand.

Id. at 20-21.  Another reason for reversing the order would be that the trial court improperly reached and resolved a substantive merits question at the class certification stage, which Brinker held should be avoided unless such issues are "enmeshed" with the elements of certification, or unless resolution of such issues is "essential" or "necessary" to the certification decision.  See Brinker, 53 Cal.4th at 1023, 1025.  As a general matter, plaintiffs are not required to prove that a challenged policy is in fact unlawful in order to obtain class certification. 

Case with possible UCL issue set for oral argument: In re Cipro Cases I & II

Earlier this month, the Supreme Court posted its March 2015 oral argument calendar.  On March 3, 2015 at 9:00 a.m. in San Francisco, the Court will hear argument in In re Cipro Cases I & II, No. S198616. 

This case mainly raises some very interesting questions of antitrust law.  The litigation also involves a UCL claim, however, so it is possible the Supreme Court may address the UCL in its forthcoming opinion.  I filed an amicus brief for CAOC discussing one aspect of the UCL claim that the parties' briefing did not focus on.

My original post on the Court of Appeal's 2011 opinion is here.  In that opinion, the Court of Appeal reasoned that conduct not prohibited by the Cartwright Act could not be "unfair" within the meaning of the UCL.  I believe this reasoning is inconsistent with Cel-Tech, for reasons explained in detail in my amicus brief for CAOC. 

More discussion of Cipro appears in this blog post.  I first noted this issue more than nine years ago. (!)

I hope to be able to attend the argument on March 3 and see if the Court asks any questions about the UCL claim.  I have not yet attended any arguments with the two new justices presiding, so I'm looking forward to it. 

Supreme Court grants review in case of interest: Dynamex Operations West v. Superior Court (Lee)

Last week, the Supreme Court granted the defendant's petition for review in Dynamex Operations West v. Superior Court, No. S222732.  In that case, the Court of Appeal (Second Appellate District, Division Seven) vacated, in part, the trial court's order denying the defendant's motion to decertify certain wage and hour claims.  Dynamex Operations West, Inc. v. Superior Court, 230 Cal.App.4th 718 (2014), review granted. 

The petition for review focused on substantive wage and hour issues, and this is the question for review, according to the docket:

In a wage and hour class action involving claims that the plaintiffs were misclassified as independent contractors, may a class be certified based on the Industrial Welfare Commission definition of employee as construed in Martinez v. Combs (2010) 49 Cal.4th 35, or should the common law test for distinguishing between employees and independent contractors discussed in S.G. Borello & Sons, Inc. v. Department of Industrial Relations (1989) 48 Cal.3d 341 control?

In answering this question, the Supreme Court may well have an opportunity to expand on its three most recent class certification opinions, namely, Brinker, Duran, and Ayala.  It's hard to predict how far the Court might delve into class certification issues when it ultimately decides this case, which could be two or three years from now.  

This litigation has already resulted in one published opinion on class certification issues.  In Lee v. Dynamex, Inc., 166 Cal.App.4th 1325 (2008), the Court of Appeal reversed the trial court's order denying class certification.  My post on that opinion is here. 

Many thanks to the blog reader who wrote to advise me of the grant of review.

New class certification opinion: Augustus v. ABM Security Services, Inc. (Updated)

Last Thursday, the Court of Appeal (Second Appellate District, Division One) published an opinion primarily addressing California's rest break laws, but also touching on class certification.  Augustus v. ABM Security Services, Inc., ___ Cal.App.4th ___ (Dec. 31, 2014; pub. ord. Jan. 29, 2015).

In Augustus, the Court of Appeal reversed summary judgment in the plaintiffs' favor on the rest break claim, but affirmed the order granting class certification of the claim.  Slip op. at 17-19.  The latter part of the opinion follows Brinker's holding that cases challenging the legality of a uniform policy are properly certified for class treatment, even if the policy may have been applied in a non-uniform manner:   

From [defendant]’s concession and [the manager]’s testimony the trial court could reasonably conclude ABM possessed a uniform policy of requiring its security guards to remain on call during their rest breaks.  Indeed, ABM never denied this policy below.  Whether such a policy is permissible is an issue “eminently suited for class treatment.”  (Brinker, supra, 53 Cal.4th at p. 1033.)

ABM cites to substantial evidence indicating the policy was not uniformly applied, but such evidence would go only to the issue of damages.  The trial court could reasonably conclude the necessity of individual proof of damages would not destroy the community of interest.  (Faulkinbury v. Boyd & Associates, Inc., supra, 216 Cal.App.4th at p. 237.)

Slip op. at 18-19.  The part of the opinion is consistent with other post-Brinker opinions, such as Jones and Williams. 

UPDATE:  For a detailed discussion of the rest break issue considered in the Augustus opinion, see this post by Glenn Danas from the blog Impact Litigation Journal.