Wage and hour class action brought on behalf of Dollar Store Employees. In opposition to class cert, Store puts in 52 declarations from putative class members. Employees deposed some of the declarants. Some of them described signing the declarations under various coercive circumstances, which included being taken by HR to a room during work hours, presented with a fully drafted declaration, instructed to sign it, not being provided with an adequate Spanish translation, being enforced to sign without reading, etc. Others described signing under more mundane circumstances.
Employees moved to strike the declarations. The trial court declined. Relying, in part, on the declarations, it declined to certify a class. Employees appealed.
There’s a threshold issue on appealability. Employees’ notice of appeal didn’t identify the denied motion to strike. But it did flag the denied class cert motion. The Court decides that, given that the appeal of the class cert denial is appropriate under the death knell doctrine, it is fair to consider the motion to strike denial as subsumed into that appeal. After all, Rule of Court 8.100(a)(2) requires liberal construction of notices of appeal.
On the merits, under Gulf Oil Co.v. Bernard, 452 U.S. 89 (1981), and state decisions interpreting it, courts have a duty to police precertification communications between the parties and the class members. Generally, orders limiting communication need to be based on a specific record of particular abuses. One significant risk is the risk of coercive communications between a defendant and its current employees who are class members. Courts can view such communications with caution, and if declarations were given under coercive circumstances, courts have the authority to strike them or severely discount their weight.
The Court of Appeal holds that the trial court failed to appreciate and properly exercise its discretion in evaluating the motion to strike. Both the trial court’s tentative and final ruling indicated its belief that it lacked the statutory authority to strike the declarations. Nor did the record reflect that the trial court appreciated the potential coerciveness when a defendant collects declarations from its own class member employees. As such, the manner in which the trial court addressed the declaration was an abuse of discretion.
The Court goes on to explain that class cert orders are subject to a special standard of review. Unlike most appellate matters, the court will not affirm if the trial court’s reasoning was erroneous, but the record nonetheless contains a basis to affirm. A class cert ruling is reviewed entirely on its own basis. Which means that if the trial court applies an erroneous legal standard, a reversal would follow, even if, the trial court’s result could be justified were the the correct standard applied. The upshot of which is that the error in the manner in which the declarations were treated requires reversal, without an analysis of whether the declarations made any difference to the ultimate class cert decision.
Justice Slough dissents, pretty stridently for state court, where dissents are uncommon. See Slip Op. at 4 (“I cannot overstate how deeply I disagree with their treatment of this case.”) Her principal point is on the prejudice issue. As she sees it, the Court isn’t actually reviewing a class cert order, it’s reviewing an evidentiary ruling. And like any evidentiary ruling, a reversal isn’t merited unless the error was prejudicial. See Cal. Cost. Art. VI, § 13, Code Civ. Proc. § 475. That analysis would require looking to the merits of the class cert ruling, which the majority didn’t reach. (And which Justice Slough believes was correct.) And since Justice Slough would find that the declarations didn’t have a meaningful effect on the ultimate result, an affirmance was merited, even if the trial court could have done a better job of scrutinizing the declarations.
Reversed and remanded.
I must say, I’ve always found the California standard of review for class cert—which scrutinizes the logic of the trial court and refuses to consider alternative bases to affirm—to be kind of weird. What if, for instance, the trial court denied cert based on a slightly erroneous view of some complicated issue of superiority when (in the record but unmentioned in the trial court decision) the putative class contained three people? Why does that require a remand?
I traced the rule back to its origins. It doesn’t seem to have a particularly thoughtful genesis. Back in 1981, the Supreme Court said:
“in the absence of other error, this court will not disturb a trial court ruling on class certification which is supported by substantial evidence unless (1) improper criteria were used; or (2) erroneous legal assumptions were made.” Richmond v. Dart Indus., Inc., 29 Cal. 3d 462, 470 (1981) (cites and quotes omitted). That itself seems reasonable and would not necessarily preclude an affirmance for some other ground supported by the record.
But by 2000, the Supreme Court was adding an additional sentence to the standard of review, explaining, that “[u]nder this standard, an order based upon improper criteria or incorrect assumptions calls for reversal even though there may be substantial evidence to support the court’s order.” Linder v. Thrifty Oil Co., 23 Cal. 4th 429, 436 (2000) (quotes omitted). For that point, the Court cited a Court of Appeal case that says “we must determine whether the trial court engaged in correct legal analysis.” See Caro v. Procter & Gamble Co., 18 Cal. App. 4th 644, 655 (1993). And Caro cites Nat'l Solar Equip. Owners' Assn. v. Grumman Corp., 235 Cal. App. 3d 1273, 1281 (1991) which in turn cites Clothesrigger, Inc. v. GTE Corp., 191 Cal. App. 3d 605, 612 (1987), which appears to be the first iteration of the rule, explaining that “[o]ur focus on correct process requires us to reverse even though there may be substantial evidence to support the court’s order.”
As Justice Lewis’s dissent in Clothesrigger cogently explains, however, the Clothesrigger majority just made up that standard out of whole cloth by taking out of context a snippet of text from Witkin California Procedure. There, the treatise said: “There are several situations in which the reasons for the trial court's decision are either required by statute or, though not required, may have a significant effect on the determination of the appeal.” It then listed seven specific categories of rulings, none of which were a ruling on a class cert motion.
So there you have it.
ot
Richmond v. Dart Indus., Inc., 29 Cal. 3d 462, 470 (1981)
No comments:
Post a Comment