American Pipe Tolling Does Not Require Precognition

Hildebrandt v. Staples the Office Store LLC, No. B294642 (D2d3 Dec. 4, 2020)

The trial court granted summary judgment on the statute of limitations in this wage and hour case. Plaintiff argued that two prior class actions in which class cert was ultimately denied tolled the statute under the American Pipe doctrine. The trial court disagreed, finding that because class cert was denied on commonality grounds, Plaintiff had no reasonable basis to wait to file sue in reliance on the prior cases.

That’s not really the test, though. So long as Plaintiff can ascertain that she falls within the prior class definition, and so long as she’s bringing more or less the same claims, American Pipe applies. The Court of Appeal addresses Jolly v. Eli Lilly & Co., 44 Cal. 3d 1103 (1988), in which the California Supreme Court generally adopted the American Pipe analysis, while deciding that it didn’t apply to the facts of that case, which was a mass tort. In particular, Jolly held that tolling didn’t apply in because: (a) the class definition was somewhat fail-safe, such that a Plaintiff could not know she was a class member without first having key liability issues decided in her favor; and (b) the class plaintiff did not bring damages claims, which were the crux of Plaintiff’s case. In those circumstances, a plaintiff can’t reasonably rely on the prior class action in deferring her decision to sue. 

But those weren’t the case here. Plaintiff fell within the general class definition and had basically the same claims. Defendant says the exceptions in Jolly nonetheless apply because Plaintiff could not have predicted that her claims were sufficiently common with the named class plaintiffs to know she was in a certifiable class in the prior case. But requiring a predictive exercise like that is contrary to the whole point of American Pipe and Jolly, which is to preserve the utility of the class action device by not requiring any and all potential class members to rush to the courthouse to avoid the limitations period. 

In reaching its result, the court disagreed with Batze v. Safeway, Inc., 10 Cal. App. 5th 440 (2017), which suggested a presumption against tolling when class cert in the prior case is denied on lack commonality. 

Reversed.

PAGA Judicata

Robinson v. So. Counties Oil. Co., No. A158791 (D1d4 Aug. 13, 2020)

The fact that a plaintiff bringing a PAGA claim stands in the shoes of a state agency is generally useful to plaintiffs, since, for instance, it lets them get around arbitration agreements and class action waivers. But in this case it isn’t. Here, a different employee brought and settled a prior PAGA claim, basically for the same violations. And since both claims are effectively brought by the DFEH, this new plaintiff’s claim is barred by res judicata. 

Affirmed.

Welcome to Class Arbitration

Garner v. Inter-State Oil Co., No. C088374 (D3 Jul. 23, 2020)

Employee’s contact has an arb clause in it that requires him to take any and all disputes, including class actions, to arbitration. Then the contract acknowledges by doing so, he was waiving any right to a jury trial or to participate in a civil class action. Trial court compelled the individual claims, but dismissed the class claims, finding that plaintiff agreed not to litigate a class action. But the Court of Appeal reverses. Plaintiff didn’t waive the right to bring a class action. He waived the right to bring a class action in court. The arb provision itself said he needed to litigate class actions in arbitration. So that’s what he can do.
 

Reversed in part.

California Agrees: Only One Hit on the American Pipe

Montoya v. Ford Motor Co., No. G045752 (D4d3 Mar. 12, 2020)

In 2018’s China Agritech v. Resh, the U.S. Supreme Court held that so-called American Pipe tolling tolls a class member’s statute of limitations only for the time a first filed class action remains pending. An absent plaintiff can’t stack together tolling periods from a bunch of different class actions to achieve an even longer tolling period. So once the first class action is dismissed, class cert denied, or the plaintiff opts out of a certified or settlement class, the plaintiff’s clock restarts without further tolling.

Here, the Court of Appeal adopts the rationale China Agritech as a matter of California state procedural law.

Reversed.

Pick-Off Move Does Not Work

Timlick v. Nat’l Enter. Sys., Inc., No. A15423 (D1d3 Jun. 21 2019)

This is a class action over debt collection practices. The relevant statue provides for an opportunity to cure. Which defendant did as to the lead plaintiff. The principal question is whether once that happened, the trial court could appropriately dismiss the whole class action. 

The Court of Appeal holds it could not, under what is known as the “pick off” exception. The whole point of a class action—giving a large number of people relatively small amounts of relief—would be frustrated if a defendant could unilaterally resolve claims by a class rep by tendering the available relief while withholding the same relief from the rest of the class. At minimum, the class must be afforded an opportunity to amend and find a new rep. And even if that can’t happen, the named plaintiff can continue on as the rep if he or she can “continue to fairly represent the class in light of the individual relief offered by defendant.” And in any event, that’s an issue that needs to be decided in the class cert context. A defendant can’t just tender relief to the rep and then move to dismiss the whole case.

Reversed.

Trial Court Must Show Work on Class Cert

Myers v. Raley’s, No. C086236 (D3 Mar. 12, 2019)

For reasons that are a little obscure, an appeal of an order denying class cert is  not reviewed for its results, but for the validity of the trial court’s reasoning. Unlike in most other appellate contexts, a reviewing court will not affirm for some other unstated reason that is nonetheless supported by the record. Which means in addressing a motion for class cert, a trial court is required set out its reasoning 

The court’s ruling here didn’t do that. It just recited the statutory standard under Code of Civil Procedure § 382. So the Court of Appeal, after implying that denial was wrong on the merits based on more recent authority, reverses the trial court for failing to state its reasons.

Reversed.

No Class for You...

Kohler Co. v. Superior Court, No. B288935 (D2d Nov. 11, 2018)

This one makes my head hurt. 

Shady, Shady, the Sequel

Lofton v. Wells Fargo Home Mortgage, No. A146282 (D1d3 Sept. 28, 2018)

Four years ago, the First District upheld a preliminary injunction against a Law Firm, preventing it from using a shady settlement tactic to obtain fees from a class action settlement outside the judicially supervised case by bringing, and allegedly settling a parallel individual case in a different jurisdiction. On remand, and after further development of the record on just how deceptive the Firm’s tactics were, the trial court found that the $6 million obtained from the individual settlement should have rightly been part of the common fund settlement to benefit the class. And on top of that, Law Firm wasn’t entitled to receive any fees and it had to pay the class back for incentive awards paid to three individual clients. The Court of Appeal affirms. And then it orders its opinion to be sent to the state bar.

Affirmed.

Intervene, Object, Opt-Out

Edwards v. Heartland Payment Sys., Inc., No. B284000 (D2d8 Nov. 30, 2018)

There are three overlapping wage and hour class actions against the same employer: Case #1, Case #2, and Case #3. Cases ## 1 and 2 were filed on the same day. Case #3 was filed two months later. The complaints get amended a bunch of times. Case #1 settles at a mediation where counsel for all three cases are present. Cases ##2 and 3 don’t settle. At the time of the settlement, Case #1 lacked a few of the claims that were alleged in Cases ##2 and 3. Post settlement, the Case #1 complaint was amended to add in these claims. 

Plaintiffs in Case #3 moved to intervene in Case #1. A few days later, Case #1 Plaintiffs moved for preliminary approval. The court denied intervention, finding that any of the Case #3 plaintiffs who didn’t like the settlement could adequately protect their rights by objecting or opting out. Case #3 Plaintiffs took an appeal. While the appeal was pending, Case #3 plaintiffs briefed a number of issues related to the adequacy of the settlement in Case #1. Eventually, the overall settlement fund went up by $115k. Then the Court of Appeal entered a stay.

So the question is whether the trial court erred in finding that a right to object or opt out is a good as a full blown intervention to protect the rights of absent class members. The Court holds it is. Plaintiff’s main point is that, under the Supreme Court’s recent decision in Hernandez v. Restoration Hardware, Inc., 4 Cal. 5th 260 (2018) a class member needs to intervene to preserve a right to appeal the approval of a settlement. But Hernandez gave a second option—an objecting class member’s right to appeal can be preserved by filing a motion to vacate the final judgment under Code of Civil Procedure § 663, which permits a motion by any “party aggrieved.” With that post-judgment option available, the class members could protect their interests, including their right to appeal, by opting out or objecting.

Affirmed.

FYI: A Pot-Dealing Child Sex Offender Is Not an Ideal Class Rep.

Payton v. CSI Elec. Contractors, Inc., No. B284065 (D2d2 Sept. 28, 2018)

The trial court in this wage-and-hour case denied class cert because: (1) individual questions predominated regarding whether class members actually received the rest breaks at issues; and (2) Plaintiff’s trial plan was insufficient; (2) Plaintiff, who had a non-class wrongful discharge claim and whose criminal record includes a sex offense against a minor, wasn’t an adequate class rep. The court further declined to let Plaintiff find a new rep because the case had already been pending for a long time and class cert was likely not going to happen in any event.

Lost in Translation

Juarez v. Wash Depot Holdings, Inc., No. B282667 (D2d6 Jul. 3, 2018)

As we hopefully all know by now, claims under the Labor Code Private Attorney General Act aren’t arbitrable. Recognizing that fact, a Car Wash’s arb agreement waived the right to bring a PAGA claim, but provided that the PAGA waiver, if unenforceable, would be severable from the rest of the agreement to arbitrate. Or at least that’s what the the English version said. 

Res Estoppel? Collateral Judicata?

Shine v. Williams-Sonoma, Inc., No B277513 (D2d4 May 29, 2018)

Named Plaintiff in this class action was a class member in Class Action #1, a prior wage and hour case against his Employer. Class Action #1 settled and, as a member of the settlement class, Plaintiff got some money. But now he’s a Named Plaintiff in Class Action #2, another wage and hour class action, against the same employer, with roughly the same class period, but on a new legal theory that wasn’t really litigated in Class Action #1. So the question is, do claim or issue preclusion, or the release entered in Class Action #1, bar Class Action #2?

The answer is yes. And the opinion gets that right. But it’s rather hard to follow and it does some weird stuff to getting to a result. 

Too Many Hits on the American Pipe

Fierro v. Landry’s Restaurant Inc., No. D071904 (D4d1 May 14, 2018)

Plaintiff brings a wage an hour class action against his employer. But a prior class action with identical claims had apparently been previously dismissed for failure to bring the case timely to trial under the five-year rule in Code of Civil Procedure §§ 583.310 and 583.360. The trial court granted a demurrer to the class claims on that basis. It did, however, permit plaintiff’s individual claims to proceed because statute of limitations issues raised by Defendant weren’t evident from the face of the complaint. Plaintiff took an appeal under the death knell doctrine.

Wage-and-Hour Double Dip Rejected

Castillo v. Glenair, Inc., No. B278239 (D2d2 Apr. 16, 2018) 

Plaintiffs here are temps. They brought a wage-and-hour class action against their Temp Service and got a settlement. Now, they want to bring another class action against the Company they were tempted out. They allege the same claims, for the same work done, during the same time frame, based on a theory is that the Company was a joint employer with or alter ego or agent of the Service. But the court put the kybosh on that. 

Under Plaintiffs own theory, the Service and the Company were in a privy relationship. The privity means a judgment* against the Service is a judgment against the Company, which means claim preclusion bars this case. Or alternatively, Plaintiffs also claimed the Company acted as the Service’s agent. Since the release in the settlement released Service’s “agents,” it also released the claims against the Company.

Affirmed.

*Under Rule of Court 3.769(h), a class action settlement must be entered as a judgment.

Big Class Certified Under Brinker

In re ABM Indus. Overtime Cases, No. A132387 (D1d4 Jan. 10, 2018)

This is a big wage and hour class action—it covers 35,000 janitors—and it has been pending for a long time—the complaint was filed in 2007 and the first notice of appeal in 2011. Indeed, the appeal has been pending so long that the trial court’s order denying class cert predates Brinker Restaurant Corp. v. Superior Court, 53 Cal. 4th 1004, 1049 (2012), the California Supreme Court’s seminal decision on class cert in wage-and-hour cases.

Stare Decisis Carries the Day

Hernandez v. Restoration Hardware, No. S233983 (Cal. Jan. 29, 2018)

I wrote about this case when it was decided by the Court of Appeal in early 2016. Basically, the court held that because Code of Civil Procedure § 902 permits only a “party aggrieved” to appeal, a member of a certified class who objects to a settlement cannot appeal the overruling of her objection unless she formally intervenes and becomes a party. The court realized that result was inconsistent with a number of prior Court of Appeal decisions as well as federal class action practice. See Devlin v. Scardelletti, 536 U.S. 1, 14 (2002). But it felt bound by Eggert v. Pac. States S. & L. Co., 20 Cal. 2d 199 (1942), in which the California Supreme Court held, before the advent of modern class actions, that to have standing to appeal, a settlement objector needs to either formally intervene or file a motion to vacate the judgment under § 663. 

As I noted, the split was the kind of thing the Supreme Court needed to step in to sort out. And it did. And—somewhat surprisingly to me, at least—the Court affirms in an essentially unanimous opinion by Justice Chin. Basically, the general annoyingness of needing to move to intervene or vacate isn’t enough to overcome the stare decisis effect of Eggert, which rested on a reasonable interpretation of § 902. While federal courts and courts of other states might disagree, they don’t have § 902 to contend with. 

Justice Liu concurs to note that Eggert is out of wack with current class action practice federally and in other jurisdictions, and to explain that the policy rationale for it doesn’t make a lot of sense. But since it’s based on the interpretation of a statute that the Legislature could fix were it so inclined, Justice Liu agrees that stare decisis carries the day.

Affirmed.

Lazy Plaintiff Gets the Blues

Noel v. Thrifty Payless, Inc., No. A143026 (D1d4 Dec. 4, 2017)

Plaintiff brought a consumer class action because the picture on the box of an inflatable pool he bought at Rite Aid showed a pool that was bigger than the actual pool in the box, even though the dimensions were correctly listed. Having taken almost no discovery, plaintiff nonetheless moved to certify a class. 

To do that, Code of Civil Procedure § 632 specifically requires that the class members must be ascertainable. But in a consumer case, it can be difficult to figure out who purchased a particular retail good. Rite Aid doesn’t take the names and addresses of its customers and keep a list of what they buy. Although with some legwork there’s often ways to figure that kind of thing out. But a plaintiff needs to do that work so it can present the court with a plan with how the class members are going to be identified and notified when he moves to certify a class. Plaintiff didn’t do that here—he barely took any discovery at all—so the court denied his motion. Correctly.

Plaintiff also says the court should have given him a continuance to let him beef up his evidence on ascertainability. But nothing forced Plaintiff to file his certification motion when he did. And he was also free to withdraw and fix his motion at any time prior to the hearing—even after the opposition pointed out the ascertainability issues. So when Plaintiff decided to proceed to the merits of the motion, he took the risk that it would be denied, which it correctly was.

Reversed.

Abbott and Costello Do Wage and Hour

Turman v. Superior Court, No. G0511871 (D4d3 Nov. 19, 2017)

In a case where corporate structure is at issue, it’s mighty confusing when there’s a real live person named “Parent.” Arthur J. Parent, that is. Mr. Parent is the sole stockholder of A.J Parent, Inc. (Which for fun we’ll call the Parent Company.) He also owns a company called Koji’s, which was in the restaurant business, but is now bankrupt.

It's Just Too Big a Mess

Kendall v. Scripps Health, No. D070390A (D4d1 Oct. 23, 2017)

A Patient got a $17,500 bill for services that the Hospital admitted would have been reimbursed at about $2k to Medicare or Medi-Cal. So he brought a class action to challenge the Hospital’s opaque billing practices. But the trial court denied class cert because common questions weren’t predominant and the class was not ascertainable. The Court of Appeal affirms on both grounds.

Common Injuries in Class Cert.

Kizer v. Tristar Risk Mgmt., No. G052558 (D4d3 Jul. 27, 2017)

The trial court denied class cert in a putative wage-and-hour class action brought by insurance claims examiners. The central issue is whether the members of the class were misclassified as exempt administrative employees under the pertinent wage order. Plaintiffs convinced the court that that issue could be tried class-wide. But what they failed to do was to convince the court that, if the class should have been non-exempt, they were subject to an official or de facto policy that required the class members to work overtime. Indeed, Plaintiffs didn’t present very much in the way of evidence that any of the class members worked overtime. Absent that proof, the court found that a common fact issue didn’t exist, much less predominate. It denied cert on that ground and because plaintiff’s claims weren’t typical.

On appeal, plaintiff tries to frame the issue of if and how much overtime each class member worked as addressed only to damages. Individualized damages issues, after all, don’t preclude certification, so long as liability is subject to class-wide resolution. But as the court explains here, that framing isn’t right because there’s a difference between the existence of a common injury and the amount of damages. Whether there was a company-wide overtime requirement goes to liability because misclassification alone doesn’t make the employer liable. (Technically speaking, the exemptions are an affirmative defense.) An employer violates the Labor Code only when an employee who has been misclassified as exempt is required to do stuff that Labor Code says non-exempt employees can’t be made to do. Stuff like working overtime hours without getting time-and-half. And without a company-wide policy (formal or not) imposing such a requirement, liability can’t really be addressed on a class-wide basis.

Affirmed.