Friday, September 5, 2014

Class Cert Comes Home to Roost

Hendershot v. Ready to Roll Transp., Inc., No. B247730 (D2d3 Aug. 14, 2014)

The defendants in this employment class action appear to have been jerks—stiffing plaintiffs on discovery, failing to show at depos, and otherwise engaging in obstructive gamesmanship. And all the while, they were busy extracting releases and arbitration agreements from the bulk of an already small—fifty-three member—plaintiff class. Defendants did not produce these agreements in discovery even though they were responsive. But when plaintiff moved to certify the class, defendants opposed on numerosity grounds, arguing that the nine class members from whom releases or arb agreements were not obtained were insufficiently numerous to warrant class treatment. The trial court agreed and denied cert.

What goes around comes around. In an opinion that goes out of its way to include pretty much every favorable quote about small classes being certifiable so long as joinder would be impracticable, see Cal. Code Civ. Proc. § 382, the court holds that there was sufficient numerosity to certify. In particular, the court notes that excluding the released class members from the count prejudged the defendant’s affirmative defenses, which the court is not supposed to do on a certification motion. So  the relevant number was fifty-three, not nine. (The court notes—practically flipping the bird to the defendant—that although the distinction between the majority who signed releases and the named plaintiffs, who didn’t, would defeat typicality under well-established law, defendant didn’t argue the point, so that isn’t an impediment to reversal.)

The court also holds that the procedure employed by the trial court denied the plaintiffs due process. The arbitrability defenses that applied to some of the release-signing plaintiffs weren’t pleaded as affirmative defenses. And as noted, defendants hid the ball and didn’t produced the documents until their opposition to class cert. Plaintiffs thus had no notice that the defense was at issue. Once it was revealed that the arbitration agreements and settlements formed the basis of defendant’s opposition, plaintiffs should have been given an opportunity to take discovery on the issue and to brief it in connection with the certification motion.


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