On Monday, the California Supreme Court issued yet another decision on class certification; this time in an action challenging the independent contractor (“IC”) classification of a proposed class of Antelope Valley News newspaper deliverers, Ayala v. Antelope Valley Newspapers, Inc. Although much of the case addresses the proper standards for evaluation of whether a person is an IC or employee, the California Supreme Court further clarified the proper procedures for a trial court considering class certification and did so in a way that should lead either to depublication or reversal of the awful Hall v. Rite-Aid decision I blogged about last month.
Continue Reading Cal. Supreme Court Clarifies Standards for Class Certification of Independent Contract Class Actions
Hall v. Rite Aid and the Return of the Underpants Gnomes
The Fourth District Court of Appeal’s decision earlier this month in Hall v. Rite Aid Corp. represents an unfortunate step backwards in the development of a coherent jurisprudence on class certification. In a misunderstanding of a general class action principle discussed in Brinker Restaurant Corp. v. Superior Court, 53 Cal. 4th 1004 (2012), the appellate court in Hall seemingly held that, where the plaintiff alleges that the employer has an unlawful policy, the trial cannot resolve the “merits” dispute over the actual elements of the underlying legal claim in determining whether the policy violates the law on a classwide basis. As explained below the case is infected by what I have formerly referred to as “Underpants Gnomes” thinking.
Continue Reading Hall v. Rite Aid and the Return of the Underpants Gnomes
New Decision Clarifies Summary Judgment Standards for Off-the-Clock Claims
On May 20, 2014, the First District Court of Appeal in Jong v. Kaiser Foundation Hospitals, issued a decision affirming the summary judgment granted as to one of the individual class representatives in a putative class action for overtime pay resulting from off-the-clock work. As explained below, the decision is helpful to employers in providing an example where an employer was not on constructive notice of off-the-clock work and, therefore, was entitled to summary judgment. The case also cites favorably to several federal FLSA decisions in which the employer won summary judgment on an off-the-clock claim.
Continue Reading New Decision Clarifies Summary Judgment Standards for Off-the-Clock Claims
New Decision Examines the Scope of Constructive Discharge
On December 31, 2013, in Vasquez v. Franklin Management Real Estate Fund, Inc., the California Court of Appeal held that a maintenance technician, who alleged that he was constructively discharged in violation of public policy when his employer refused to reimburse gas mileage, pleaded facts sufficient to support a cause of action. Accordingly, the appellate court held that the trial court abused its discretion by sustaining the employer’s demurrer without leave to amend. While at first glance, employers may shudder at the expansion of constructive discharge claims, the case actually has a narrow, fact-specific holding.
Continue Reading New Decision Examines the Scope of Constructive Discharge
Sonic Calabasas Is A Tactical Retreat From Supreme Court FAA Precedent
On October 17, 2013, in Sonic-Calabasas A, Inc. v. Moreno, the California Supreme Court issued a 73-page decision (excluding concurrence and dissent) that attempted to construe the U.S. Supreme Court’s recent Federal Arbitration Act (“FAA”) decisions (Concepcion and American Express) as narrowly as possible so as to preserve the right of state courts to strike down arbitration agreements as unconscionable for any reason that does not “interfere with the fundamental attributes of arbitration.”
Continue Reading Sonic Calabasas Is A Tactical Retreat From Supreme Court FAA Precedent
Ninth Circuit Falls In Line With Supreme Court Ruling on Class Action Removals
In Rodriguez v. AT&T Mobility, LLC, the Ninth Circuit continues a string of recent decisions cracking down on district courts’ tendency to remand class actions on the purported basis that the defendant failed to meet the burden of proof that subject matter jurisdiction exists. District courts have incentives to do this because remand orders are normally not reviewable on appeal (except in limited circumstances for class action removals) and doing so has the effect of lightening their case load. As explained below, the Ninth Circuit’s decision will make it harder for intellectually honest district courts to remand typical class action cases.
Continue Reading Ninth Circuit Falls In Line With Supreme Court Ruling on Class Action Removals
Court of Appeal Affirms Summary Judgment in Favor of Farmers Insurance on Independent Contract Issue
By Thomas Kaufman and Anna Stancu
On July 11, 2013, the Second Appellate District in Beaumont-Jacques v. Farmers Group Inc.concluded as a matter of law that a worker’s ability to exercise meaningful discretion in her job-related efforts rendered her an independent contractor, regardless of Farmers’ input regarding the “quality and direction of her efforts.” The court held that Farmers did not exercise the “control of the details” of the appellant worker’s efforts necessary to create an employer/ employee relationship. As discussed below, the court held that the key consideration was the right to control the manner and means of how the worker performed her duties. The court further held that summary judgment was proper notwithstanding that some of the minor elements of the independent contractor test arguably supported an employer/employee relationship.Continue Reading Court of Appeal Affirms Summary Judgment in Favor of Farmers Insurance on Independent Contract Issue
Supreme Court Continues To Expand FAA Preemption
Do you hear that? . . . . It is the wailing and moaning of plaintiff’s attorneys across the country.
This morning, in a 5-3 decision (Sotomayor recused herself), the United States Supreme Court issued a pro-arbitration decision in American Express Co. v. Italian Colors. The forceful opinion from Justice Scalia continues to build on the edifice of Stolt-Neilsen (2010), Concepcion (2011), and Greenwood (2012) in holding that a class action waiver in an arbitration agreement is enforceable, even as to federal anti-trust claims.
In Stolt-Neilsen, the Court held that where an agreement was silent on the availability of class arbitration, only individual arbitration was allowed. In Concepcion, the court held state law invalidating class action waivers in the consumer arbitration agreements to be preempted by the Federal Arbitration Act and unenforceable. In Greenwood, the Court held that the presumption in favor of arbitration was so strong that a conclusion that a federal statute barred arbitration of a federal claim would only be found if it was clearly reflected in the statute (which is rarely the case).
And now, in American Express the Court holds that a party cannot bypass a class action waiver in an arbitration agreement by showing that the cost of proving up a particular type of federal claim is likely (or even certain) to exceed any possible economic recovery in the absence of the class action mechanism. As explained below, this decision should push the remaining holdouts to accept the enforceability of class action waivers.Continue Reading Supreme Court Continues To Expand FAA Preemption
Ninth Circuit Rules that Comcast Does Not Kill Wage and Hour Class Actions
On Tuesday, the Ninth Circuit decided Leyva v. Medline Industries, Inc., reversing an order denying class certification in a wage and hour case. The decision represents the first interpretation from the Ninth Circuit of the scope of the Supreme Court’s decision in Comcast Corp. v. Behrend that addressed the requirements for class certification under Rule 23(b)(3) of the Federal Rules of Civil Procedure. As discussed below, the Ninth Circuit squarely rejected the interpretation of Comcast that some commentators had advanced that the requirement to individually calculate damages for each class member generally should preclude class certification. Beyond that, the decision does not break substantial new ground.Continue Reading Ninth Circuit Rules that Comcast Does Not Kill Wage and Hour Class Actions
New Appellate Decision Applies Brinker to Require Certification of Certain Meal and Rest Claims
On Friday afternoon, the Fourth Appellate District, Division 3 (Orange County) decided Faulkinbury v. Boyd & Associates (Faulkinbury II). This was a meal period, rest period, and overtime class certification decision in which the trial court had previously denied certification and the Court of Appeal had previously affirmed the denial (in Faulkinbury I). However, the California Supreme Court issued a grant/hold review on the decision in light of its grant of review in Brinker Restaurant Corp. v. Superior Court (Brinker), and the case was remanded to the court of appeal to consider in light of the Brinker decision.
The new decision reverses the previous denial of class certification and mandates class certification of the meal period, rest period, and overtime claims. Although that is unfortunate for the security guard employer, the decision is actually written fairly narrowly and should not open the door to easy certification in the typical meal and rest period cases. As explained below, while the court of appeal got the analysis half-right, it still appeared to gloss over the existence of individualized issues that should raise doubts about the ability to try the meal or rest period claims in the case as a class action.Continue Reading New Appellate Decision Applies Brinker to Require Certification of Certain Meal and Rest Claims