The UCL Practitioner

Supreme Court takes up discovery issue: Williams v. Superior Court (Marshalls)

On August 19, 2015, the Supreme Court granted review in Williams v. Superior Court (Marshalls of CA, LLC), No. S227228.

In this case, the plaintiff moved to compel production of employee names and contact information in a representative action under PAGA.  See Williams v. Superior Court (Marshalls of CA, LLC), 236 Cal.App.4th 1151 (May 15, 2015), review granted (slip op. at 2).  The trial court largely denied the motion, ordering production only as to employees who worked in the same store as the plaintiff, and holding that broader production would be allowed, if at all, only after the plaintiff had been deposed, and only if the plaintiff could prove that the case has factual merit.  Id.  

In its original opinion (which is now uncitable), the Court of Appeal (Second Appellate District, Division One) affirmed, finding no abuse of discretion, and holding that production would be inappropriate even if the Belaire-West notice process were used: 

At this nascent stage of plaintiff’s PAGA action there has as yet been no discovery—plaintiff has not even sat for his own deposition.  The litigation therefore consists solely of the allegations in his complaint.  But plaintiff alleges therein only that at the Costa Mesa store, he and perhaps other employees at that store were subjected to violations of the Labor Code.  Nowhere does he evince any knowledge of the practices of Marshalls at other stores, nor any fact that would lead a reasonable person to believe he knows whether Marshalls has a uniform statewide policy.  That being the case, it was eminently reasonable for the trial judge to proceed with discovery in an incremental fashion, first requiring that plaintiff provide some support for his own, local claims and then perhaps later broadening the inquiry to discover whether some reason exists to suspect Marshalls’ local practices extend statewide.

Further, a trial court must consider the costs of any discovery and take reasonable steps to promote efficiency and economy.  Statewide discovery that includes the mailing of Belaire-West notices and tabulation of responses is costly.  By staging discovery incrementally, the trial court delayed the incursion of potentially unnecessary costs until it becomes clear they are warranted.

Slip op. at 4-5.  The Court also held that the "employees’ privacy interests outweigh plaintiff’s need to discover their identity at this time."  Id. at 7.  First, the Court held, the plaintiff would have to be deposed, and then he would have to "establish [that the defendant's] employment practices are uniform throughout the company ...."  Id. 

Suffice it to say that this reasoning is problematic at best, and inconsistent with the Code of Civil Procedure at worst.  The opinion is no longer citable in light of the order granting review.  Although Williams is a representative PAGA action, not a class action, the Supreme Court's analysis is likely to have ramifications for discovery in class litigation. 

"Will Uber drivers get class-action status for employment case?"

The motion for class certification in the Uber misclassification case made the San Francisco Chronicle. The motion was argued last Thursday before U.S. District Judge Edward Chen. 

The article relates a few interesting exchanges that took place during the hearing:

Chen appeared skeptical of Uber’s arguments at the hearing’s outset. “Isn’t it contradictory that Uber says every single driver is an independent contractor and yet also says they are dramatically different from one another and thus can’t be certified as a class?” he asked.

....

Chen also questioned whether the plaintiff drivers had much backing among other drivers. “There’s nothing in the record to show mass support for the position of your three named plaintiffs,” he said to the drivers’ attorney, Shannon Liss-Riordan.

The law is what matters, not drivers’ desires, she said. “This isn’t a popularity contest,” she said. “It’s not a question of what people want.”

(Hyperlink added.)  Whenever I hear that argument, in state court at least, I always cite Richmond v. Dart Industries, Inc., 29 Cal.3d 462 (1981), which explains that if someone doesn't want to participate in the case, they can choose to opt out.  Widespread affirmative support is not an element of class certification that the plaintiffs must prove. 

New Ninth Circuit CAFA "amount in controversy" opinion: Yocupicio v. PAE Group, LLC

In Yocupicio v. PAE Group, Inc., ___ F.3d ___ (9th Cir. Jul. 30, 2015), the Ninth Circuit held that the amounts sought in plaintiff's non-class PAGA claim could not be added to the amounts sought in plaintiff's class claims in order to meet the $5 million threshold for CAFA jurisdiction.  Slip op. at 6-9, 11.  The Court determined that "in enacting CAFA, Congress was focused on class actions rather than on all representative actions or on cases where a class claim was only a part, perhaps a small part, of a civil action."  Id. at 7.

The opinion also has this interesting footnote distinguishing between representative and class claims:

No doubt all class claims are representative in nature. However, not all representative claims are class claims; to say that they are would be a logical fallacy. See Washington v. Chimei Innolux Corp., 659 F.3d 842, 848 (9th Cir. 2011).

Id. at 6 n.6. 

The concluding paragraph of the opinion makes clear that the analysis and holdings are not limited to representative PAGA claims: 

Where a plaintiff files an action containing class claims as well as non-class claims, and the class claims do not meet the CAFA amount-in-controversy requirement while the nonclass claims, standing alone, do not meet diversity of citizenship jurisdiction requirements, the amount involved in the non-class claims cannot be used to satisfy the CAFA jurisdictional amount, and the CAFA diversity provisions cannot be invoked to give the district court jurisdiction over the non-class claims.

Id. at 11.

Many thanks to the blog reader who forwarded this opinion. 

Supreme Court hands down long-awaited arbitration opinion: Sanchez v. Valencia Holding Co.

Almost three and a half years ago, the Supreme Court granted review in Sanchez v. Valencia Holding Co., no. S199119, in order to address whether the Federal Arbitration Act, as construed in Concepcion, preempts generally applicable state-law rules of contractual unconscionability. 

The Court of Appeal said no (Sanchez v. Valencia Holding Co., LLC, 201 Cal.App.4th 74 (2011)), and the question was since authoritatively answered in the negative in several opinions, including Sonic-Calabasas A, Inc. v. Moreno, 57 Cal.4th 1109 (2013) (discussed in this blog post).  As a result, Sanchez became a vehicle for the Supreme Court instead to revisit what it means for a contract to be "unconscionable" under California law. The Court ordered supplemental briefing on that issue in February 2014. 

In an opinion handed down yesterday, the Supreme Court held, in a fact-specific analysis, that the contract of adhesion between the plaintiff car buyer and his used car dealer was not "unconscionable," contrary to the Court of Appeal's conclusion in 2011.  Sanchez v. Valencia Holding Co., __ Cal.4th ___ (Aug. 3, 2015).  The Court held that the various formulations of substantive "unconscionability," "used throughout our case law, all mean the same thing."  Slip op. at 9.

Probably the most significant part of the opinion, from a consumer class action perspective, is its holding that the FAA, as construed in Concepcion, preempts the CLRA's "no-waiver" provision (Civil Code section 1751) "insofar as [that provision] bars class waivers in arbitration agreements covered by the FAA."  Slip op. at 26.  This issue had previously been the subject of a split in authority among the Courts of Appeal.