Wage and Hour Double Dip

Grande v. Eisenhower Med. Ctr., No. E068730 (D4d2 Feb. 6, 2020)

Plaintiff is a nurse who works for a Temp Service who assigned her to work at Hospital. She brought a wage and hour class action against Temp Service in Santa Barbara Superior. A year later, Nurse sued Hospital, in Riverside Superior, for basically the same violations, albeit with a slightly different class period. Hospital sent Temp Service a letter demanding indemnification under the terms of their staffing agreement.

Four years later, the Sana Barbara case settled. Nurse got paid and Temp Service got a release. The record seems to reflect that the settlement amount was low because Temp Service had solvency issues. The court entered the settlement as a judgment, as is required for class actions in California.
Temp Service—still facing Hospital’s indemnification demand—then intervened in the Riverside case and sought dismissal based on the release or res judicata. The trial court held a bench trial on these issues and ultimately denied both defendants. Hospital wasn’t a release, even under the typically expansive “agents, officers, affiliates, etc.” in the release. And Hospital and Temp Service weren’t in privity, which precludes res judicata. Temp Service appealed and Hospital took a writ. 

The Court of Appeal affirms. On res judicata, the Court—relying on the Supreme Court’s 2015 decision in DKN Holdings—explains how joint and several liability and privity are not the same thing. The distinction is particular evident here, given that each defendant was responsible only for its own wage and hour violations. Given that, for instance, Temp Service could have defended its case by claiming that the violations were as a result of on-site conditions put in place by Hospital, it’s hard to say that the two defendants’ interests were sufficiently enough aligned that they could be in privity. 

Nor did the existence of the indemnity create privity. Indeed, that created a dis-alignment of interests that actually pushes in the other direction. Interestingly, the Court’s result here puts this case in some tension with the 2D’s 2018’s decision in Castillo which the Court here (likely correctly) explains applied a test for privity that is inconsistent with DKN Holdings.

So far as the release goes, despite the expansive listing of categories of releasees, none of them really encompass the provider-client relationship between the Temp Service and the Hospital. The defendants make a play at arguing that they are “affiliates” or “agents” of each other. But affiliates generally connotes some level of common control or interlinking equity interests. And agency requires a fiduciary relationship coupled with a measure of control. A vanilla contractual relationship is not enough to meet those ordinary definitions. And broader, more unusual definitions aren’t called for under edjusdem generis and noscitur a sociis-type rules of contractual interpretation.

Justice Ramirez dissents. He does not believe that Castillo is so wrongly decided that it is not worth following on stare decisis grounds. 

Affirmed. 

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. 

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.

This Release Does Not Compute

Ignacio v. Caracciolo, No. B266930 (D2d8 Aug. 3, 2016)
 
This is another case where an insurance company gets over its skis by making a Code of Civil Procedure § 998 offer of judgment that tries to do more than just enter judgment in the case along the terms of the offer. This time, the offer includes an agreement to a broad general release, including a waiver of unknown claims under Civil Code § 1542. Plaintiff didn’t take the deal. At trial, Insurer won a verdict below the offer’s cash consideration, so it sought cost shifting. On appeal, the Court of Appeal finds the offer invalid. Problem is, when a release is broader than the claims in the case, the value of the offer vs. what was won at trail can’t really be rationally compared. Suppose, for instance, that plaintiff had some multi-million dollar claim against the insurer on some other issue that wasn’t in the case. Since the release offered was far broader than the case with respect to the releasing parties, the released parties, and the claims being released, it couldn’t be fairly valued under the § 998 calculus.

Affirmed.