California Courts Issue Multiple Decisions for Employers in Class Cases

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Just two years ago, a California case declining certification of an action would have been cause for comment. But since then, in 2011 the United States Supreme Court decided Wal-Mart Stores, Inc. v. Dukes, 131 S. Ct. 2541 (2011); in 2012 the California Supreme Court decided Brinker Rest. Corp. v. Superior Court, 53 Cal. 4th 1004 (2012); and only weeks ago the United States Supreme Court decided Comcast Corp. v. Behrend, 133 S. Ct. 1426 (2013). We’ll save for another blog the effect of the Supreme Court’s decisions on arbitration in California. Since the beginning of this year, several California courts have refused to certify cases or have even decertified cases that had previously been certified.  Just some of these cases include:

Forrand v. Federal Express Corp., Case No. 2:08-cv-01360-DSF-PJW (C.D. Cal., Apr. 25, 2013). Citing Comcast, the Central District of California declined to certify a class of hourly workers in an off-the-clock case claiming violations of California law. The case had previously been remanded by the Ninth Circuit on the certification issue to consider the question of employer control. The district court concluded that the plaintiffs could not meet Comcast’s requirement that they both develop a method to measure damages AND tie each class member’s recovery to that theory in a reliable manner that could be managed on a class-wide basis.

Zulewski v. The Hershey Company, Case No. 4:11-cv-05117-KAW (N.D. Cal., Apr. 23, 2013). In Zulewski, the plaintiffs brought suit on behalf of a proposed class of retail service representatives who claimed that they were misclassified as exempt under state and federal law. The court granted the defendant’s motion to deny certification brought under the rubric of Vinole v. Countrywide Home Loans, Inc., 571 F.3d 935 (9th Cir. 2009).  Interestingly (in light of the issue of commonality addressed in Dukes), although the court found that their claims met the commonality and typicality requirements, they could not maintain their claims as a class because they could not meet the predominance standard of Rule 23(b)(3).

Alberts v. Aurora Behavioral Health Care, Case No. BC419340 (Los Angeles Sup. Ct., Apr. 10, 2013). The Los Angeles Superior Court denied certification of a class of health care workers at two area psychiatric hospitals claiming violation of California’s rest and meal period requirements due to factual variations among their claims.

Dailey v. Sears, Roebuck & Co., Case No. D061055 (Cal. Ct. App., 4th Dist., Mar. 21, 2013). The California 4th District Court of Appeals upheld the denial of certification in a class action challenging the exempt status of Sears Auto Center managers and assistant managers, finding that individual issues predominated.

Heffelfinger v. Electronic Data Services, Case No. 2-07-cv-00101-MMM-E (C.D. Cal Feb. 26, 2013). In a case with important ramifications in the technology industry, the Central District of California decertified a case it had previously certified following the remand of the action from the Ninth Circuit on its grant of summary judgment. The district court concluded that the reverse of summary judgment necessitated individual inquiries, negating the element of predominance.

Pedroza v. PetSmart Inc., Case No. 5:11-CV-00298 (C.D. Cal. Jan. 28, 2013). Pedroza was a garden-variety California wage and hour case in which the plaintiffs claimed that the PetSmart retail chain misclassified its store managers as exempt under California law. Such claims were once routinely brought and almost as routinely certified. The district court, relying on Dukes, found that commonality did not exist due to differences among the different managers’ situations and also found Rule 23(b)(3) predominance to be lacking.

Can California employers break out the champagne? Hardly. First, while the latest spate of cases has largely favored employers, courts are still ruling for employees under the right circumstances. Just a few days ago, in Faulkinbury v. Boyd & Associates, Inc., Case No. G041712 (Cal. 4th App., May 10, 2013), a California court of appeals largely reconsidered its own order affirming the trial court’s decision not to certify a meal period class and held that, under the circumstances, certification should have been granted. Second, some plaintiffs’ attorneys are exploring the use of conditional certification under the FLSA to take advantage of the easier “conditional certification standard.” Most ominously, as reflected in the PetSmart case, there exists a conflict among California district courts as to whether a plaintiff must satisfy Rule 23 for claims under the Private Attorneys General Act (PAGA). Certification is no longer a largely foregone conclusion, but cannot be dismissed out of hand either. Due to the large sums of money involved, we can expect to continue to see developments in this arena in the years to come.

The bottom line: The tide may have turned on the easy certification of employment class action cases under California law, but don’t count them out yet.

 

Topics:  Class Action, Class Certification, Rule 23

Published In: Civil Procedure Updates, Labor & Employment Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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