The UCL Practitioner

Supreme Court briefs in Brinker Restaurant Corp. v. Superior Court (Hohnbaum)

Speaking of Supreme Court briefs, everything in Brinker Restaurant Corp. v. Superior Court (Hohnbaum), no. S166350, is collected and available online at this link.  The review petition, answer and reply; the fifteen letters in support of review; the merits briefs; the twenty-three amicus briefs; and the parties' answers to the amicus briefs are all there. 

Brinker has not yet been scheduled for oral argument.  See the main docket page for a description of the issues on review.

Oral argument set in attorney advertising case: Simpson Strong-Tie v. Gore

Last week, the Supreme Court scheduled oral argument in Simpson Strong-Tie Co. v. Gore, no. S164174. The argument will take place on Tuesday, April 6, 2010 at 9:00 a.m. in Los Angeles.  These are the issues on review:

(1) Which party bears the burden of persuasion with respect to the applicability of the anti-SLAPP exemptions set forth in Code of Civil Procedure section 425.17, subdivision (c)? (2) Does Code of Civil Procedure section 425.17, subdivision (c), exempt from anti-SLAPP protection an advertisement by a lawyer soliciting clients for a contemplated lawsuit?

The case is of interest to attorneys practicing in our area because the contemplated lawsuit was a class action and the attorney was seeking class representatives. The Court of Appeal's opinion is Simpson v. Strong-Tie Co. v. Gore, 162 Cal.App.4th 737 (2008), and here is my earlier blog post on the case.

Supreme Court takes up class certification appellate issue: Baycol Cases I and II

Last Thursday, February 18, 2010, the Supreme Court granted review in Baycol Cases I and II, no. S178320.  This is the summary of the issue on review:

Did the "death knell doctrine" require plaintiff to immediately appeal the sustaining of a demurer as to class claims when the ruling resolved both individual and class claims, or did the one final judgment rule apply and require a single appeal from the subsequent entry of final judgment on all claims?

In an unpublished opinion filed on October 20, 2009, the Court of Appeal (Second Appellate District, Division Seven) held that the notice of appeal was untimely:

An order denying class certification is appealable. (Linder v. Thrifty Oil Co. (2000) 23 Cal.4th 429, 435.) However, an order sustaining a demurrer without leave to amend “is ordinarily not appealable, since the order is not a final judgment.” (Alch v. Superior Court (2004) 122 Cal.App.4th 339, 359.)

An exception to the latter rule arises “in a class action if the legal effect of the order is ‘tantamount to a dismissal of the action as to all members of the class other than plaintiff,’ and if the order ‘has virtually demolished the action as a class action.’ [Citation.] California allows direct appeal of such a ‘death-knell’ order as a matter of state law policy.” (Alch v. Superior Court, supra, 122 Cal.App.4th at pp. 359-360.) “Since, in theory, the individual plaintiff’s action can go forward, the death knell doctrine fits comfortably into the exception to the ‘one final judgment’ rule that arises when parties have separate and distinct interests; when this is true, there can be a final and appealable judgment for each such party. [Citation.]” (Farwell v. Sunset Mesa Property Owners Assn., Inc. (2008) 163 Cal.App.4th 1545, 1547.)

An exception to the rule regarding the appealability of an order sustaining a demurrer without leave to amend has been applied where, as here, the trial court sustains a demurrer without leave to amend as to both the class action allegations and the individual causes of action. (See, e.g., Los Altos Golf & Country Club v. County of Santa Clara (2008) 165 Cal.App.4th 198, 202.) We are reluctant to carve out exceptions to the rule and thus introduce an element of uncertainty into what has otherwise been the established rule. Would the exception apply only where, as here, a single order sustains the demurrer without leave to amend as to both the class and individual claims? Would it apply where separate orders address the class and individual claims? A bright-line rule would eliminate any uncertainty. Accordingly, we adhere to the rule that “in a class action if the legal effect of the order is ‘tantamount to a dismissal of the action as to all members of the class other than plaintiff,’ and if the order ‘has virtually demolished the action as a class action,’” the order is immediately appealable. (Alch v. Superior Court, supra, 122 Cal.App.4th at pp. 359-360.)

Since the April 27, 2007 order sustaining Bayer’s demurrer to Shaw’s class claims was immediately appealable, Shaw’s December 20, 2007 notice of appeal was untimely as to these claims. We therefore affirm the judgment dismissing the class claims.

Slip op. at 8-9.  I haven't seen the briefs, but it appears that review was granted to address the split in authority with the Los Altos case. 

Baycol has been added to my list of pending Supreme Court cases of interest to attorneys practicing in this area.   

Petition for Review and other documents from Cohen v. DirecTV

Here are copies of some of the filings in Cohen v. DirecTV, no. S177734: 

• Petition for Review (11/06/09; deemed filed 12/01/09)
• Depublication Request of Initiative Legal Group (11/23/09)
• Depublication Request of Khorrami Pollard & Abir LLP (12/02/09)
• Opposition to Depublication Request (U.S. Chamber of Commerce) (12/11/09)
• Opposition to Depublication Request (Assn. of SoCal Defense Counsel) (12/14/09)
• Depublication Request of Consumer Attorneys of California (12/23/09)

I do not have a copy of the answer to the petition for review, filed on 12/01/09, and would be grateful to anyone who can forward a copy.  By my calculations, we can expect an order either granting or denying the petition for review (and the depublication requests), or extending the time to do so, by Wednesday, January 27, 2010. 

Close readers of the petition for review may observe its striking similarity to my original blog post on the Cohen decision.  They say that imitiation is the sincerest form of flattery, and one of the reasons I write this blog is to share ideas, but please, if you want to copy my language, extend me the courtesy of citing my blog as your source.  Thanks! 

Petition for review and depublication request filed in Cohen v. DirecTV

On November 6, 2009, a petition for review was filed in Cohen v. DirecTV, no. S177734, followed by a depublication request on November 23, 2009.   (My original blog post on Cohen is available at this link.)

Here's an appellate practice question for you:  When are depublication requests due in this case?

The Court of Appeal opinion was originally filed on September 28, 2009.  However, it was not published until thirty days later, on October 28 (the last possible day). Under Rule of Court 8.264(b)(3): “If a Court of Appeal certifies its opinion for publication or partial publication after filing its decision and before its decision becomes final in that court, the finality period runs from the filing date of the order for publication.” Under that Rule, the decision would be final 30 days after October 28, which would be last Friday, November 27 (a Court holiday).  (I leave it to you to determine whether the date of finality is extended to the following Monday, November 30.) 

Under Rule of Court 8.1125(a)(4), depublication requests “must be delivered to the Supreme Court within 30 days after the decision is final in the Court of Appeal.”   In this case, thirty days after finality (calculated as November 27) is December 27, 2009 (a Sunday).  (Again, I leave it to you to determine whether the final deadline might be a couple of days earlier or later, given the way the dates fall.)   

Now, consider the Supreme Court's deadline to rule on the petition for review.  Rule of Court 8.512(b) reads:

(b) Determination of petition

(1) The court may order review within 60 days after the last petition for review is filed. Before the 60-day period or any extension expires, the court may order one or more extensions to a date not later than 90 days after the last petition is filed.

(2) If the court does not rule on the petition within the time allowed by (1), the petition is deemed denied.

Unless it gives itself an extension of time, the Supreme Court's deadline to grant or deny review will be Tuesday, January 5, 2010. 

But now look at the Supreme Court's conference calendar for December and January (calendar for 2009 and calendar for 2010).  The Court's last conference before January 5 will take place on December 23--which is several days before the probable deadline to file depublication requests in this case.  If the Supreme Court has any interest in this case, I expect it will grant itself an extension of time on or before the conference on December 23.  It would be prudent for anyone planning to file a depublication request (or, for that matter, a letter in support of review) to do so before that December 23 conference date. 

UPDATE:  Today, after I posted the above, a new line was added to the docket deeming December 1, 2009 as the filing date of the petition for review.  That would mean that the Supreme Court's deadline to grant or deny review would not be until January 30, 2010 (a Saturday).  The last conference before January 30 will take place on the preceding Wednesday, January 27, 2010.   

List of pending Supreme Court cases updated

My list of pending California Supreme Court cases that raise issues of interest relating to the UCL, the CLRA, and/or class actions has been updated.

A quick post on the Arias and Amalgamated holdings

The opinions are both up. Here are quick excerpts from the introductions:

We hold that an employee who, on behalf of himself and other employees, sues an employer under the unfair competition law (Bus. & Prof. Code, § 17200 et seq.) for Labor Code violations must satisfy class action requirements, but that those requirements need not be met when an employee‘s representative action against an employer is seeking civil penalties under the Labor Code Private Attorneys General Act of 2004 (Lab. Code, § 2698 et seq.).

Arias, slip op. at 1.

This case presents two issues. First, may a plaintiff labor union that has not suffered actual injury under the unfair competition law, and that is not an "aggrieved employee" under the Labor Code Private Attorney General Act of 2004, nevertheless bring a representative action under those laws (1) as the assignee of employees who have suffered an actual injury and who are aggrieved employees, or (2) as an association whose members have suffered actual injury and are aggrieved employees? The answer is "no." Second, must a representative action under the unfair competition law be brought as a class action? The answer is "yes," for the reasons stated in the companion case of Arias v. Superior Court (June 29, 2009, S155965) ___ Cal.4th ___.

Amalgamated, slip op. at 2 (emphasis in original).

BREAKING NEWS: Supreme Court to hand down Arias and Amalgamated decisions Monday

This morning the Supreme Court announced that on Monday at 10:00 a.m., it will be handing down its decisions in the Arias and Amalgamated cases, which were argued in early April.  These cases address, among other issues, whether formal class certification is required in PAGA and UCL actions (post-Prop. 64) in which relief is sought on behalf of others.  Amalgamated may also address whether associational standing survived Prop. 64. 

See this blog post for the statements of the issues and links to the Court of Appeal opinions.  Reports on the oral arguments are available here and here.  When the decisions are posted, they will be avialable at these links:

• Arias v. Superior Court, ___ Cal.4th ___ (Jun. 29, 2009)
  

• Amalgamated Transit Union v. Superior Court (First Transit, Inc.), ___ Cal.4th ___ (Jun. 29, 2009)

Petition for review filed in Johnson collateral estoppel case

As expected, a petition for review was filed last week in the latest class certification/collateral estoppel case, Johnson v. GlaxoSmithKline, Inc., no. S167892. 

Here is my original post on the Court of Appeal's opinion, Johnson v. GlaxoSmithKline, Inc., 166 Cal.App.4th 1497 (2008) (modified Oct. 14, 2008) (Second Appellate District, Division Seven). 

Brinker order granting review

Here is the Supreme Court's order, filed October 22, 2008, granting the petition for review in Brinker Restaurant Corp. v. Superior Court (Hohnbaum), no. 166350.  For more on Brinker, see this blog post.

Supreme Court grants review in class certification case: Brinker Restaurant Corp. v. Superior Court (Hohnbaum)

Yesterday, the Supreme Court granted review in Brinker Restaurant Corp. v. Superior Court (Hohnbaum), no. S166350. In that case, the Court of Appeal reversed an order granting class certification of meal period, rest break, and off-the-clock claims. Brinker Restaurant Corp. v. Superior Court (Hohnbaum), 165 Cal.App.4th 25 (2008) (review granted). Under Rule of Court 8.1105(e)(1), the Court of Appeal's opinion is no longer citable as precedent.  [Disclosure: I am co-counsel of record for the employees who sought Supreme Court review in this case.]

Most of the attention this case has received has focused on the substantive wage and hour issues, particularly the meal period compliance questions, that the case raises.  Those issues are extraordinarily important.  But the case also raises significant class certification questions that may prompt the Supreme Court to expand on its holding in Sav-on Drug Stores, Inc. v. Superior Court, 34 Cal.4th 319 (2004), which the Brinker opinion all but ignored.  The petition for review states the class-certification-related issues as follows: 

5. Survey and Statistical Evidence Issue: May trial courts accept expert survey and statistical evidence as a method of proving meal period, rest break, and/or "off-the-clock" claims on a classwide basis?

6. Standard of Appellate Review Issue: When an appellate court reviews an order granting class certification, does the appellate court prejudicially err by: (a) deciding issues not enmeshed with the class certification requirements; (b) applying newly-announced legal standards to the facts, then reversing the class certification order with prejudice, instead of remanding for the certification proponent to attempt to meet the new standards, and for the trial court to apply the new standards to the facts in the first instance; or (c) reweighing the evidence instead of reviewing the trial court’s predominance finding under the substantial evidence standard of review?

It will be quite interesting to see what the Supreme Court does with these issues. 

Today's Recorder reports that "Supremes Take 'Brinker' Break Case," and the Daily Journal that "California Supreme Court to Take Up Meal and Rest Break Case" (subscription).

Supreme Court grants review in attorney advertising case: Simpson Strong-Tie Co. v. Gore

On July 30, 2008, the Supreme Court granted review in Simpson Strong-Tie Co. v. Gore, no. S164174. These are the issues on review:

(1) Which party bears the burden of persuasion with respect to the applicability of the anti-SLAPP exemptions set forth in Code of Civil Procedure section 425.17, subdivision (c)? (2) Does Code of Civil Procedure section 425.17, subdivision (c), exempt from anti-SLAPP protection an advertisement by a lawyer soliciting clients for a contemplated lawsuit?

This case may be particularly interesting to class action attorneys because the contemplated lawsuit was a class action (although it was never filed). An attorney placed an ad in the San Jose Mercury News and the Los Gatos Weekly Times seeking potential clients who had purchased the prospective defendant's galvanized screws. The ad said that "you may have certain legal rights and be entitled to monetary compensation ...." The prospective defendant sued for defamation, UCL violations, and other claims, arguing that the ad "communicates that [the] galvanized screws are defective." The trial court dismissed the action under the anti-SLAPP law, and the Court of Appeal (Sixth Appellate District) affirmed. Sampson v. Strong-Tie Co. v. Gore, 162 Cal.App.4th 737 (Apr. 30, 2008).

It can often happen that an attorney becomes aware of a violation of law -- such as a material nondisclosure, a latent defect, a price-fixing conspiracy -- that the product purchasers would have had no reason to suspect because it was concealed from them. Nor would the product purchasers necessarily know that they might have a valid legal claim. What is an attorney to do? Placing an ad in a newspaper might be an extreme measure, but this case illustrates a situation that arises more often than you might think.

I've added Simpson Strong-Tie Co. v. Gore to my list of pending Supreme Court cases of interest to class action and UCL practitioners.

Supreme Court depublishes class certification opinion: Bell v. Superior Court (H.F. Cox, Inc.)

As mentioned in my post immediately below, on Wednesday the Supreme Court issued an order denying review and depublication in Bell v. Superior Court (H.F. Cox, Inc.), no. S160423. However, today, the Supreme Court issued the following order:

The order filed on April 23, 2008 is hereby amended to read in its entirety: The petition for review is denied. The requests for an order directing depublication of the opinion are granted. The Reporter of Decisions is directed not to publish in the Official Appellate Reports the opinion in the above-entitled appeal filed November 21, 2007, which appears at 158 Cal.App.4th 147. (Cal. Const., art. VI, section 14; rule 8.1125(c)(1), Cal. Rules of Court.) George, C.J., was absent and did not participate. Kennard J., is of the opinion the petition should be granted.

Accordingly, the Court of Appeal's opinion, Bell v. Superior Court (H.F. Cox, Inc.), 158 Cal.App.4th 147 (2007), may no longer be cited as precedent. I must say I'm very pleased with this development, because I filed one of the two depublication requests and this is my first successful depublication request. Many thanks to the blog reader who emailed me to advise of this development.

UPDATE: Here is a copy of my depublication request in Bell.

Supreme Court denies review and depublication in class certification case: Bell v. Superior Court (H.F. Cox, Inc.)

On Wednesday, the Supreme Court denied review and depublication in Bell v. Superior Court (H.F. Cox, Inc.), no. S160423. The case apparently made the Court's reputed "A" list. Justices Kennard and Moreno were of the opinion that review should be granted, and Chief Justice George was absent and did not participate. My post on the Court of Appeal's opinion, Bell v. Superior Court (H.F. Cox, Inc.), 158 Cal.App.4th 147 (2007), is available at this link.

UPDATE: On Friday, April 25, 2008, the Supreme Court issued an amended order granting the depublication request. Therefore, the Court of Appeal's opinion may no longer be cited as precedent.

BREAKING NEWS: U.S. Supreme Court denies review in class action arbitration case: Circuit City Stores v. Gentry

Yesterday, the U.S. Supreme Court denied the petition for a writ of certiorari in Circuit City Stores, Inc. v. Gentry, no. 07-998 (order list dated 03/31/08). Circuit City was attempting to challenge the California Supreme Court's decision in Gentry v. Superior Court (Circuit City Stores, Inc.), 42 Cal.4th 443 (2007). According to the docket, the Chamber of Commerce, the Pacific Legal Foundation, and other conservative interests filed amici curiae briefs in support of the cert. petition.

In Gentry, the California Supreme Court held that the lower courts had improperly enforced a "no class action" arbitration clause in an employment contract, remanding for further proceedings on whether the clause was unconscionable and therefore unenforceable. Presumably, the cert. petition was based on the argument that the Federal Arbitration Act preempts California law regarding unconscionability of contract provisions -- an argument that the California Supreme Court rejected not only in Gentry but also in in Discover Bank v. Superior Court (Boehr), 36 Cal.4th 148 (2005).

[Hat tip: The Daily Journal]

Supreme Court expresses potential interest in class certification case: Bell v. Superior Court (H.F. Cox, Inc.)

Last Friday, March 21, 2008, the Supreme Court gave itself an extension of time, through April 28, 2008, to grant or deny review in Bell v. Superior Court (H.F. Cox, Inc.), no. S160423.

In Bell, the Court of Appeal (Second Appellate District, Division Three) affirmed in part and reversed in part the trial court's order denying certification of meal period and rest break, off-the-clock, and other wage and hour claims. Bell v. Superior Court (H.F. Cox, Inc.), 158 Cal.App.4th 147 (2007). My original post on the decision is here. The Supreme Court is also considering two depublication requests, one of which was filed by yours truly.

Review denied in class certification case: Lewis v. Robinson Ford Sales

During its conference last week, the Supreme Court declined to review the Court of Appeal's decision in Lewis v. Robinson Ford Sales, Inc., 156 Cal.App.4th 359 (2007). In that case, the Court of Appeal (Fourth Appellate District, Division One) reversed an order denying class certification. My original post on the opinion is here.

Statement of issue on review: Harris v. Superior Court

The Supreme Court has now posted its statement of the issue on review in Harris v. Superior Court (Liberty Mutual Insurance), no. S156555 (review granted 11/28/07):

Do claims adjusters employed by insurance companies fall within the administrative exemption (Cal. Code Regs, tit. 8, section 11040) to the requirement that employees are entitled to overtime compensation?

For more on this case, see this blog post.

Supreme Court activity yesterday

Yesterday, the Supreme Court took several actions of note:

1. It disposed of the Gentry v. Superior Court "grant and hold" cases (less than a month after the Court denied rehearing in Gentry and issued its remittitur):

   DUNN v. S.C. (KROGER COMPANY) S148581 B194600 Grant - dismissal/lead case 2/2 Transferred after hold

   FIRCHOW v. CITIBANK S150386 B187081 Grant - dismissal/lead case Dismissed - to CA 2/7

   JONES v. CITIGROUP S141753 G033663 Grant - dismissal/lead case 4/2 Transferred after hold

   KONIG v. U-HAUL COMPANY S149883 B190547 Grant - dismissal/lead case 2/5 Transferred after hold

   MASSIE v. RALPHS GROCERY S153059 B187844 Grant - dismissal/lead case 2/7 Transferred after hold

2. It denied review and depublication in Estrada v. FedEx Ground Package System, no. S156595. The Court of Appeal opinion is Estrada v. FedEx Ground Package System, Inc., 154 Cal.App.4th 1 (2007). My prior post on Estrada, in which I noted the class certification aspects of the opinion, is here.

3. It granted review in Harris v. Superior Court (Liberty Mutual Insurance), no. S156555. In that case, the Court of Appeal reversed the trial court's order decertifying the plaintiff insurance adjusters' misclassification/overtime claims. See Harris v. Superior Court, 154 Cal.App.4th 164 (2007) (review granted). The opinion focused more on the exempt/non-exempt question than on the class certification question, as explained in this post from Wage Law. The Supreme Court's statement of issues on review has not yet been posted.

List of pending Supreme Court cases updated

I've updated my list of pending Supreme Court cases involving UCL, CLRA, and class action issues. If you are aware of a pending case that is not on the list, please let me know ([email protected]).

New Supreme Court class certification decision: Gattuso v. Harte-Hanks Shoppers, Inc.

Last week, in Gattuso v. Harte-Hanks Shoppers, Inc., ___ Cal.4th ___ (Nov. 5, 2007), the Supreme Court held that the Court of Appeal had improperly affirmed the trial court's order denying class certification of certain Labor Code claims:

The remaining issue is whether the trial court abused its discretion in denying plaintiffs’ motion to certify a plaintiff class defined as all current and former Harte-Hanks outside sales representatives who were not reimbursed for the expenses they incurred in using their own automobiles after January 1, 1998, to discharge their employment duties.

Under Code of Civil Procedure section 382, a class action is permitted “when the question is one of a common or general interest, of many persons, or when the parties are numerous, and it is impracticable to bring them all before the court . . . .” Class certification requires both an ascertainable class and a well-defined community of interest among class members. (Sav-On Drug Stores, Inc. v. Superior Court (2004) 34 Cal.4th 319, 326; accord, Fireside Bank v. Superior Court (2007) 40 Cal.4th 1069, 1089.) Here, the trial court concluded that plaintiffs had established an ascertainable class but also that they had failed to satisfy the “community of interest” requirement.

“The ‘community of interest’ requirement embodies three factors: (1) predominant common questions of law or fact; (2) class representatives with claims or defenses typical of the class; and (3) class representatives who can adequately represent the class.” (Sav-On Drug Stores, Inc. v. Superior Court, supra, 34 Cal.4th at p. 326.) The trial court here concluded that plaintiffs had failed to show the existence of predominant questions of law or fact.

The trial court’s ruling on the class certification motion is reviewed for abuse of discretion. (Sav-On Drug Stores, Inc. v. Superior Court, supra, 34 Cal.4th at p. 326.) If supported by substantial evidence, a class certification ruling “generally will not be disturbed ‘unless (1) improper criteria were used [citation]; or (2) erroneous legal assumptions were made [citation].’ ” (Linder v. Thrifty Oil Co. (2000) 23 Cal.4th 429, 435-436; accord, Sav-On Drug Stores, Inc. v. Superior Court, supra, at pp. 326-327.)

In concluding that common issues did not predominate here, the trial court reasoned that plaintiffs’ claims under section 2802 would “turn[] on the determination of two issues (1) whether each individual Harte-Hanks outside sales representative has an agreement about the manner in which he is compensated for expenses, or (2) whether the compensation paid to each individual sales representative is reasonable to compensate for business expenses incurred” and that both determinations would require “an individualized inquiry as to each outside sales representative.”

The class that plaintiffs sought to certify consisted of all Harte-Hanks outside sales representatives “who were not reimbursed for the expenses they incurred in using their own automobiles after January 1, 1998.” We construe this to refer to the Harte-Hanks outside sales representatives who were not separately reimbursed, apart from their base salary and commissions. Not included in the proposed class, therefore, are the relatively few Harte-Hanks outside sales representatives who received automobile expense reimbursement through a separate payment, whether as the result of an individually negotiated compensation package or otherwise. (See fn. 2, ante, at p. 2.)

Harte-Hanks has taken the position that as to the members of this proposed class, it fulfilled its reimbursement obligation under section 2802 by paying them higher commission rates and higher base salaries than it paid to inside sales representatives. As we explained in the previous section, the validity of this claim will turn on the resolution of these questions: (1) Did Harte-Hanks adopt a practice or policy of reimbursing outside sales representatives for automobile expenses by paying them higher commission rates and base salaries than it paid to inside sales representatives? (2) If so, did it establish a method to apportion the enhanced compensation payments between compensation for labor performed and expense reimbursement? (3) If so, was the amount paid for expense reimbursement sufficient to fully reimburse the employees for the automobile expenses they reasonably and necessarily incurred? Neither the trial court nor the Court of Appeal framed the class certification issue in that way, and so neither court considered whether these inquiries are capable of resolution on a class-wide basis. Accordingly, the class certification issue is to be reconsidered upon remand.

Slip op. at 24-26.

Rehearing denied in Gentry

I reported a couple of weeks ago that a rehearing petition had been filed in Gentry and that the Supreme Court had given itself an extension of time through November 28 to rule on it. They didn't need that much extra time after all. On Wednesday, October 31, they denied the rehearing petition and the clerk issued the remittitur. The three dissenting justices (Baxter, Chin and Corrigan) voted to grant rehearing. [Via Storm's California Employment Law]

List of pending Supreme Court cases

My list of pending Supreme Court cases involving UCL and/or class action issues has been updated.

Rehearing petition filed in Gentry

Wage Law points out that a rehearing petition was filed with the Supreme Court in Gentry on September 17, 2007, and that the Supreme Court has given itself until November 28, 2007 to rule on the petition. Gentry v. Superior Court (Circuit City Stores), no. S141502. My original post on Gentry is here.

Review granted in UCL/PAGA case: Arias v. Superior Court

Yesterday, the Supreme Court issued a "grant and hold" order in Arias v. Superior Court (Angelo Dairy), no. S155965.

As I explained in my original post on this case, the Court of Appeal's opinion contained two holdings of note: (1) Prop. 64 did not change the rules governing associational standing in UCL cases; and (2) 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. See Arias v. Superior Court, 153 Cal.App.4th 777 (2007). I haven't seen the briefing, and the statement of issues presented has not yet been posted on the Supreme Court's site, but it's reasonable to guess that Amalgamated Transit Union v. Superior Court (First Transit), no. S151615, which also addressed "associational standing" and PAGA, is the lead case here. Pursuant to Rule of Court 8.1105(e)(1), the Court of Appeal's opinion in Arias may no longer be cited.

Blogosphere comment on "procedural unconscionability" aspects of Gentry

Bruce Nye of the blog Cal Biz Lit has an interesting post on the "procedural unconscionability" aspects of the Supreme Court's decision in Gentry. My own post on Gentry is here.

Another pro-class-action decision from the Supreme Court: Gentry v. Superior Court

Like Pioneer Electronics (USA), Inc. v. Superior Court, 40 Cal.4th 360 (2007), the Supreme Court's opinion in Gentry v. Superior Court, ___ Cal.4th ___, 2007 WL 2445122 (Aug. 30, 2007) is very favorable to class actions generally, and to wage and hour class actions in particular.

First of all, the Court reaffirmed the importance of class actions in our judicial system in general, and in wage and hour cases in particular. “By preventing ‘a failure of justice in our judicial system,’ the class action not only benefits the individual litigant but serves the public interest in the enforcement of legal rights and statutory sanctions.” Gentry, slip op. at 20 (quoting Bell v. Farmers Insurance Exchange, 115 Cal.App.4th 715, 741 (2004)). For this reason, among others, the Gentry court determined that individual wage and hour hearings before the Labor Commissioner (Berman hearings) “are neither effective nor practical substitutes for class action [proceedings].” Id. at 24.

Additionally, throughout its opinion, the Gentry court favorably cited Bell, a leading Court of Appeal decision affirming class certification in a wage and hour (misclassification) case involving far more complex evidence than many wage and hour class actions. The Gentry court repeatedly expressed its agreement with the Bell decision, its reasoning, and its holdings. See, e.g., Gentry, slip op. at 10, 13, 14, 16, 20, 24 (citing Bell, 115 Cal.App.4th 715). These favorable citations strengthen Bell's value as precedent.

The Gentry court went on to observe that class actions are particularly appropriate in wage and hour cases, where, “absent effective enforcement, the employer’s cost of paying occasional judgments and fines may be significantly outweighed by the cost savings of not [complying with the Labor Code].” Gentry, slip op. at 20. As the Supreme Court has previously observed, when employers and other defendants find compliance with the law more costly than violation, a class action will be “the only effective way to halt and redress such exploitation.” Linder, 23 Cal.4th at 446.

What's also interesting about Gentry is that Chief Justice George turned out to be the swing vote. You may have noticed that in another wage and hour case, Prachasaisoradej v. Ralph's Grocery Co., ___ Cal.4th ___ (Aug. 23, 2007), decided one week before Gentry, Chief Justice George and Justices Baxter, Chin and Corrigan formed the four-justice majority in favor of the employer. In Gentry, Chief Justice George swung the other way, leaving Justices Baxter, Chin and Corrigan as the three-justice minority in favor of the employer. In another recent wage and hour case, Murphy v. Kenneth Cole Productions, Inc., 40 Cal.4th 1094 (2007), the Court unanimously adopted the employees' position. More time would be needed to analyze these decisions and try to discern what may have influenced certain justices' votes.

Thoughts on Gentry from Wage Law

Michael Walsh of Wage Law has a detailed post on Gentry. Also, tomorrow's Recorder reports that "Bosses Lose on Class Waivers."

Supreme Court reverses Court of Appeal opinion upholding "no class action" arbitration clause: Gentry v. Superior Court

The decision is up. The Supreme Court held 4-3 that the Court of Appeal erred by upholding the "no class action" arbitration clause, notwithstanding the fact that the clause appeared in an employment contract, rather than a consumer contract:

Yet the above quoted passage in Discover Bank was not intended to suggest that consumer actions involving minuscule amounts of damages were the only actions in which class action waivers would not be enforced. Rather, Discover Bank was an application of a more general principle: that although “[c]lass action and arbitration waivers are not, in the abstract, exculpatory clauses” (Discover Bank, supra, 36 Cal.4th at p. 161), such a waiver can be exculpatory in practical terms because it can make it very difficult for those injured by unlawful conduct to pursue a legal remedy. Gentry argues persuasively that class action waivers in wage and hour cases and overtime cases would have, at least frequently if not invariably, a similar exculpatory effect for several reasons, and would therefore undermine the enforcement of the statutory right to overtime pay.

Gentry v. Superior Court, ___ Cal.4th ___ (Aug. 30, 2007) (slip op. at 12.) The case has been remanded for the trial court to redetermine in the first instance whether the arbitration clause should be upheld. I will endeavor to post more on the decision later today and/or tomorrow.

BREAKING NEWS: Gentry to be decided tomorrow

The Supreme Court announced today that it will be handing down its opinion in the Gentry case tomorrow at 10:00 a.m.:

GENTRY (ROBERT) v. SUPERIOR COURT
S141502 (B169805 – Los Angeles County Superior Court – BC280631)
Argued in Los Angeles 6-05-07

This case presents issues regarding the enforceability of an arbitration provision that prohibits employee class actions in litigation concerning alleged violations of California’s wage and hour laws.

When the opinion is posted online, it will be available at this link.