CALIFORNIA CLASS ACTION LAW

Month: August, 2010

August 13, 2010

Northern District Approves $4.5 Million Settlement Against RadioShack, With $1.5 Million in Fees, and $5,000 Incentive Payments to Each Lead Plaintiff

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Magistrate Judge Edward M. Chen (whose confirmation to the Northern District of California bench has unfortunately been stalled for far too long) approved the class settlement and attorney fee application in Stuart v. RadioShack Corp., 2010 WL 3155645, No. C-07-4499 EMC (N.D. Cal. Aug. 9, 2010).

This class action was initiated in state court in June 2007, alleging that RadioShack had improperly failed to reimburse its employees for expenses they incurred in using their personal vehicles to perform inter-company transfers (“ICSTs”). Plaintiffs claimed for reimbursement pursuant to California Labor Code § 2802 and for a violation of California Business & Professions Code.  Subsequently Plaintiffs added a claim for recovery of penalties under the California Labor Code Private Attorneys General Act (“PAGA”).  The case was removed in August 2007. And in February 2009, Judge Chen granted the motion for class certification, certifying a class consisting of “all persons employed by RadioShack within the State of California, at any time from June 3, 2003, to the present, who drove their personal vehicles to and from RadioShack stores to carry out ICSTs and who were not reimbursed for mileage.”  On October 1, 2009–nine days before trial was scheduled to begin–the parties reached a settlement.

Under the Settlement Agreement, RadioShack will pay a total of $4.5 million for the release by the class, as an all-inclusive sum (proceeds to be distributed to the class, attorney’s fees and litigation expenses, costs of claim administration, incentive payments to the class representatives, and the PAGA award to the state), without reversion of any of the $4.5 million to RadioShack.

After attorney’s fees, litigation expenses, costs of claim administration, incentive payments, and the PAGA award to the state have been deducted from the $4.5 million, the remainder for distribution to the class members and/or donation to charity is $2,796,563.31.

Each class member’s award “depends on the number of weeks that the class member worked.”

The Court found that, importantly, “the amount available to the class after deductions for, e.g., fees and costs–i.e., $2,796,563.31–is not far off what the class might be awarded if it were to prevail on the merits after a trial.” Id. *4.

Plaintiffs’ counsel asked for an award of $1.5 million  (i.e., one-third of the total settlement amount), plus litigation expenses which total $78,436.69.

The Court has reviewed the expenses and determined that they are reasonable. The Court notes that the sum is not excessive given that this litigation has been ongoing for more than three years.

Attorneys Fees Application

The attorneys presented a fee application claiming $1.5 million as a lodestar for fees–excluding work performed in preparing for final approval and any post-judgment work that may be needed.  The $1.5 million sum represents 2,116.69 hours of work over a period of more than three years, at hourly rates of the billing attorneys ranging from $600 to $1,000.

After reviewing the billing records submitted by counsel as well as the declarations regarding the hourly rates of counsel, the court found that the number of hours was reasonable given the length of the lawsuit and the vigorous disputes over the course of the litigation (e.g., regarding RadioShack’s defense that it had no duty to reimburse until an employee made a request for reimbursement).

The court did express some “concerns about the $1,000 hourly rate” claimed by one of the attorneys.  “Based on the Court’s experience, this is an inordinately large hourly rate, even if the Court were to assume that [the attorney] has fifty years of experience.”  But the Court concluded that “given the 2,116.69 hours incurred, the average hourly rate for a fee award of $1.5 million total is $708, an amount that the Court deems appropriate, particularly when no multiplier is being sought on top of the lodestar.”

Compared to the percentage of the fund, the court noted that “the total settlement amount to be paid by RadioShack (with no possibility of reversion), the fee award represents one-third of the settlement amount.”  The court found that this was “well within the range of percentages which courts have upheld as reasonable in other class action lawsuits.”

The court also approved an incentive award of $5,000 for each of the two class representatives, for a total of $10,000.  The Court concluded that the incentive payments were appropriate and reasonable.  “Although the class representatives did not enter this litigation until late in the proceedings, due consideration must be given to the fact that they were willing and ready to go to trial.”  The court noted that if the “class representatives had asked for a larger sum, the Court might well have reached a different conclusion, but the $5,000 sought for each representative was viewed as “relatively modest.”

By CHARLES H. JUNG

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August 13, 2010

Southern District of California Denies Remand in Wage & Hour Case Asserting CAFA Jurisdiction

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In Johnson v. U.S. Vision, Inc., No. 10-CV-0690 BEN (CAB), 2010 WL 3154847 (S.D. Cal. Aug. 9, 2010) the Southern District of California faced a remand motion in a wage and hour case that had been removed pursuant to the Class Action Fairness Act (“CAFA”), 28 U.S.C. §§ 1332, 1441, 1453.

Judge Roger T. Benitez denied the motion to remand.  Defendant presented a calculation of damages, supporting its calcualtions with declaration from, among other people, the Assistant Controller, Operations, for U.S. Vision, Inc., responsible for enforcing Defendants’ payroll policies and procedures.  The declaration set forth Plaintiff’s most recent hourly rate of pay, as well as the specific number of optical managers and optechs employed during the Class Period, average hourly rates of pay for managers and optechs, number of employees who separated their employment with Defendants, and number of possible wage statements for each employee per year.

Plaintiff argued that Defendants miscalculated the amount in controversy because:

Defendants erroneously assumed “each class member was damaged to the same extent that Plaintiff Johnson was, and that every putative class member, among other things, worked off the clock and incurred a break violation every single day of the entire class period.” Mot. 6. Plaintiff emphasizes that Defendants have access to more specific figures to calculate the amount in controversy and that “each [class] member can be identified using information contained in Defendants’ payroll, scheduling and personnel records.” Compl. ¶ 39.

But the Court held that absent a “persuasive argument that Defendants are required to prove actual damages in order to remove this action, however, the Court must consider the amount put in controversy by the Complaint, not the ultimate or provable amount of damages.”  (citing Rippee v. Boston Market Corp., 408 F. Supp. 2d 982, 986 (S.D. Cal. 2005).)  The Court found that, having based their calculations on allegations provided in the Complaint, Defendants proved with a legal certainty that CAFA’s jurisdictional threshold is satisfied.

Despite Plaintiff’s attempt to provide supplemental information in the motion to remand, Defendants were entitled to, and did, use the factual allegations in the Complaint to calculate the amount in controversy. See Gaus v. Miles, Inc., 980 F.2d 564, 567 (9th Cir. 1992) (holding that defendant must use specific factual allegations or provisions in the complaint to support its argument of proper removal). The Court finds that Defendants provided detailed and competent evidence supporting their calculations and showing, to a legal certainty, that the jurisdictional threshold under CAFA is met. To the extent subsequent events show that jurisdiction would not be proper, the Court can address remand at that time. 28 U.S.C. § 1447(c).

By CHARLES H. JUNG

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August 13, 2010

Deepwater Horizon Litigation Ordered Transferred to Eastern District of Louisiana by MDL Panel

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The Judicial Panel on Multidistrict Litigation issued its transfer order in In re Oil Spill by the Oil Rig “Deepwater Horizon” in the Gulf of Mexico on April 20, 1010, 2010 WL 3166434 (U.S. Jud. Pan. Mult. Lit. Aug. 10, 2010) (slip op.)

The Panel faced four motions that collectively encompass 77 actions: 31 actions in the Eastern District of Louisiana, 23 actions in the Southern District of Alabama, ten actions in the Northern District of Florida, eight actions in the Southern District of Mississippi, two actions in the Western District of Louisiana, two actions in the Southern District of Texas, and one action in the Northern District of Alabama.

The Panel ordered that, pursuant to 28 U.S.C. § 1407, the actions transferred to the U.S. District Court for the Eastern District of Louisiana and assigned to the Honorable Carl J. Barbier for coordinated or consolidated pretrial proceedings with the actions pending in that district.

Upon careful consideration, however, we have settled upon the Eastern District of Louisiana as the most appropriate district for this litigation. Without discounting the spill’s effects on other states, if there is a geographic and psychological “center of gravity” in this docket, then the Eastern District of Louisiana is closest to it. Considering all of the applicable factors, we have asked Judge Carl J. Barbier to serve as transferee judge. He has had a distinguished career as an attorney and now as a jurist. Moreover, during his twelve years on the bench, Judge Barbier has gained considerable MDL experience, and has been already actively managing dozens of cases in this docket. We have every confidence that he is well prepared to handle a litigation of this magnitude.

Some parties have expressed concern that recusals among Eastern District of Louisiana judges unduly limit our choices, and that even Judge Barbier may be subject to recusal. Notwithstanding these concerns, the Panel is quite comfortable with its choice. Judge Barbier is an exceptional jurist, who would be a wise selection for this assignment even had those other judges in the district been available. Moreover, the Fifth Circuit recently denied the petition of certain defendants for a writ of mandamus directing Judge Barbier to recuse himself.

Chairman John G. Heyburn, II wrote for the Panel.

By CHARLES H. JUNG

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August 13, 2010

District Judge William Alsup Issues Order in Gutierrez v. Wells Fargo Bank Class Action After 2 Week Bench Trial

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District Judge William Alsup issued an order in Gutierrez, et al. v. Wells Fargo Bank, N.A., — F.Supp.2d —-, 2010 WL 3155934 (N.D. Cal. Aug. 10, 2010), a certified consumer class action challenging hundreds of millions of dollars in overdraft fees imposed on depositors of Wells Fargo Bank, N.A. through allegedly unfair and fraudulent business practices.

Judge Alsup issued his decision following a two-week bench trial.

The essence of the case is that Wells Fargo has devised a bookkeeping device to turn what would ordinarily be one overdraft into as many as ten overdrafts, thereby dramatically multiplying the number of fees the bank can extract from a single mistake. The draconian impact of this bookkeeping device has then been exacerbated through closely allied practices specifically “engineered”–as the bank put it–to multiply the adverse impact of this bookkeeping device. These neat tricks generated colossal sums per year in additional overdraft fees, just as the internal bank memos had predicted. The bank went to considerable effort to hide these manipulations while constructing a facade of phony disclosure.

Judge Alsup held that these “manipulations were and continue to be unfair and deceptive in violation of Section 17200 of the California Business and Professions Code.”  The Court ordered restitution enjoined the bookkeeping device under Cal. Bus. & Prof. Code section 17203.

By CHARLES H. JUNG

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August 13, 2010

Ninth Circuit Holds That No Private Right of Action Exists to Enforce the Provisions of § 13(a) of the Investment Company Act of 1940

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In a shareholder class action, Northstar Financial Advisors, Inc. v. Schwab Investments, et al., 2010 WL 3169400 (9th Cir. Aug. 12, 2010), the Ninth Circuit Court of Appeals addressed whether there is a private cause of action to enforce the provisions of § 13(a) of the Investment Company Act of 1940 (“ICA” or “1940 Act”), 15 U.S.C. § 80a-13(a).  That section generally requires an investment company to obtain shareholder approval before deviating from the investment policies contained in the company’s registration statement filed with the Securities and Exchange Commission (“SEC”).

The Court held that “nothing in § 13(a) as originally enacted or as subsequently amended either creates a private cause of action or recognizes one exists with the clarity and specificity required under Supreme Court precedent.”

Marc J. Gross argued for plaintiff-appellee Northstar Financial Advisors, Inc.

Darryl P. Rains argued for defendants-appellants Schwab Investments, et al.

The case was argued before Circuit Judges Mary M. Schroeder N. Randy Smith and Hon. James Maxwell Moody, the Senior United States District Judge for the District of Arkansas, who was sitting by designation.  Circuit Judge Schroeder wrote the opinion of the Court.

By CHARLES H. JUNG

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August 12, 2010

Sketchers Sued Over “Shape-Ups” Brand Shoes

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Sketchers faces two class action suits over claims made related to its popular “Shape-ups” brand of shoes.  You can read more here.

By CHARLES H. JUNG

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August 11, 2010

Northern District of Illinois Denies Class Certification to Proposed Class of African American Financial Advisors at Merrill Lynch

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Judge Robert W. Gettleman denied class certification this week in McReynolds et al. v. Merrill Lynch, Pierce,  Fenner & Smith Inc., (N.D. Ill. Aug. 9, 2010), No. 05-06583, a case brought by 17 African American financial advisors who accused Bank of America Corp’s Merrill Lynch & Co. unit of racial discrimination in violation of Title VII of the Civil Rights Act of 1964 as amended, 42 U.S.C. § 2000(e) et seq. (Count I), and 42 U.S.C. § 1981 (Count II). Plaintiffs moved pursuant to Fed. R. Civ. P. 23 to certify a class, defined as:

African-American financial advisors (“FAs”) and FA Trainees (“Trainees”) who are or were employed in the retail brokerage unit, referred to as Global Private Client (“GPC”) of defendant Merrill Lynch, Pierce, Fenner & Smith, Inc., from January 2001 to the present.   cannot have their cases tried together.

The Court found a lack of commonality because the “individuals worked in different offices, had different supervisors, and allegedly experienced vastly different forms of discrimination.”  The Court found also found a lack of typicality becuase the claims of the named plaintiffs and the declarations of putative class members showed variations which would “necessitate individual inquires to determine whether the individual suffered racial discrimination.”  Additionally, the Court found that that defendant would be able to present varying defenses to the plaintiffs’ claims.

Plaintiffs sought certification under a hybrid of Rule 23(b)(2) and 23(b)(3), but the Court concluded that the proposed class failed under both Rules.  With respect to 23(b)(2), the Court found that “the individual putative class members’ financial interests are too high to be considered incidental to the requested equitable relief. Consequently, opt out rights must be extended to the members, and certification under Rule 23(b)(2) is inappropriate.”

With respect to certification under Rule 23(b)(3), the court found predominance lacking “[b]ecause plaintiffs’ statistical evidence alone is insufficient to establish company-wide discrimination in a manner that affects each class member in the same way, each individual putative class members’ claim for liability and damages will have to be tried to a jury. These inquiries would involve different witnesses and proofs for each member to determine, among other things, the motivation of each supervisor who made the individual allegedly discriminatory decision.”

The Court also found inappropriate a “divided certification, with certification of a 23(b)(2) class for the equitable issues and certification of a 23(b)(3) class for the damages issues . . . .”  “There is no predominance of common issues to certify a 23(b)(3) class for any issue, and even if there were, because of the right to a jury trial the damages cases would all have to be tried first, eliminating any advantage to certifying the instant case as a class action.”

Finally, the Court rejected “certification under Rule 23(b)(2) for all issues, combined with notice and an opportunity to opt out as though certified under Rule 23(b)(3) . . . .”  The Court noted that “certification under this approach is advantageous to plaintiffs, because it avoids Rule 23(b)(3)’s requirement that common issues predominate and that a class action be the superior method of resolving the dispute.”  “This court agrees with Judge Kennelly, however, that the Seventh Circuit’s suggestion of this approach in Lemon and Jefferson was not intended to permit plaintiffs in a case involving significant damage claims to avoid consideration of whether a class action would be a manageable way to resolve the case.”  Citing Adams v. R.R. Donnelley & Sons, 2001 WL 336830 at *16 (N.D. Ill. 2001).

The court distinguished this case from one where individual issues were limited to damages.  In such a case, “there likely would be a proper way to structure a trial or trials with a minimum of inefficiency without doing violence to the parties’ Seventh Amendment rights.”

Here, however, the court concluded that there were “several separate layers of individual issues, including the variation in personnel practices among the various branch offices, and how various office managers and complex managers handle individualized personnel decisions. These extra layers of individualized issues lead the court to conclude that common issues do not predominate over individual issues, and that trial of the claims as a class action would be unmanageable.”  Accordingly, the court denied plaintiffs’ motion for class certification is denied.

Defendants were represented by Jared R. Friedman of Weil, Gotshal & Manges LLP,

Jeffrey Scott Piell of Lupel Weininger LLP and Stephen Michael Shapiro and Timothy Simon Bishop of Mayer Brown LLP.

By CHARLES H. JUNG

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August 10, 2010

Central District Approves $4,385,000 and 30% Attorney Fee Award in Class Settlement of Cicero v. DirecTV, Inc.

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Judge Avern Cohn of the Central District of California approved a wage and hour class settlement in Cicero v. DirecTV, Inc., 2010 WL 2991486 (C.D. Cal. July 27, 2010) (not reported).  Judge Cohn approved a payout fund to class members of $4,385,000, a 30% attorney fee award of $1,950,000 to class counsel, and incentive awards of $7,500 and $5,000 the representative plaintiffs.

The class action claimed violations of California’s wage and hour laws.  The named plaintiffs are former satellite television installation and service technicians who brought this case individually and on behalf of all other similarly situated current and former satellite installation and/or service technicians against their former employers Mountain Center, Inc., and Ironwood Communications Inc. (currently DirecTV, Inc. doing business as DirecTV Home Services, collectively “Defendant”) for allegedly violating California’s labor and unfair competition laws. Named Plaintiffs alleged that Defendant violated applicable provisions of the Industrial Welfare Commission’s (“the IWC”) Wage Orders, the Labor Code, and the Business and Professions Code by: (1) failing to provide employees duty-free meal periods; (2) failing to reimburse employees for tools necessary to the performance of the employees’ work; (3) failing to pay wages for all hours worked, including hours worked in excess of eight per day and forty per week; (4) failing to pay all wages owed employees upon termination of the employment relationship; and (5) failing to provide accurate wage statements.

The parties engaged in two mediations of the matter before the Hon. William Cahill (Ret.) in March, 2009, and subsequently before the Hon. Diane Wayne (Ret.).

The Court approved the attorneys’ fees request, which represented 30% of the total gross settlement amount.  The Court noted that:

California recognizes the common fund doctrine for the award of attorneys’ fees. Under California and Ninth Circuit precedent, a court has discretion to calculate and award attorneys’ fees using either the lodestar method or the percentage-of-the-fund method. Wersha v. Apple Computer, Inc., 91 Cal.App. 4th 224, 253 (2001); Vizcaino v. Microsoft Corp., 290 F.3d 1043 (9th Cir.2002). The Court, in its discretion, finds that the percentage method is a fair, reasonable, and appropriate method for awarding attorneys’ fees in this case. . . .

Overall, although this percentage is slightly higher than the 25% benchmark for fees in class action cases, it is consistent with other wage and hour class actions where the recovery is less than $10 million. Moreover, there have been no objections to the amount of attorneys’ fees. The Court therefore finds that the amount of attorneys’ fees is warranted by the complexity of the case and Class Counsel’s dedication of extraordinary time and resources to the prosecution of this claim.

Id. **6-7.

By CHARLES H. JUNG

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August 10, 2010

One Year Statute of Limitations Applies to Waiting Time Penalty Claim Where Wages Not Sought

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Hon. Howard R. Lloyd today issued an unpublished opinion today confirming that a one year statute of limitations pursuant to Cal. Code Civ. Proc. § 340(a) applies to a plaintiff’s claim for waiting time penalties.  Pinheiro v. ACXIOM Information Security Services, Inc., 2010 WL 3058081 (N.D. Cal. August 03, 2010) (Slip Op.)

Plaintiff argued that a three year statute of limiations applied, citing Cortez v. Purolator Air Filtration Products Co., 23 Cal.4th 163, 999 P.2d 706, 96 Cal.Rptr.2d 518 (2000), in which the plaintiff sought both unpaid wages and waiting time penalties.  The court rejected this argument and granted defendant’s motion to dismiss this claim without leave to amend.

Plaintiff Carla Pinheiro was an employee of defendant Aerotek, Inc. (Aerotek), an employment agency. She alleges that she was assigned to work as a temporary customer service representative for defendant Quest Diagnostics Clinical Laboratories, Inc. (Quest). The gravamen of Pinheiro’s complaint as to Aerotek is that Aerotek wrongfully terminated her employment (Sixth Claim for Relief) and failed to timely pay her final wages in violation of California Labor Code sections 201-203 (Seventh Claim for Relief). Plaintiff also asserts a claim against Aerotek under California Bus. & Prof.Code section 17200 (Eighth Claim for Relief) based upon the alleged failure to timely pay her final wages.

Aerotek moved to dismiss Pinheiro’s seventh and eighth claims for relief concerning the alleged failure to timely pay her final wages.

The Court found that, based upon the law as it currently stands, plaintiff’s seventh and eighth claims for relief as to Aerotek should be dismissed.

Cal. Labor Code §§ 201-203 COA

At issue was whether Pinheiro’s claim for waiting time penalties is subject to a one-year statute of limitations (Aerotek’s view) or to a three-year limitations period (Pinheiro’s position). The court held that the one-year statute of limitations under Cal.Code Civ. Proc. § 340(a) applies, and plaintiff’s seventh claim for relief therefore is time-barred. See McCoy v.Super. Ct., 157 Cal.App.4th 225, 68 Cal.Rptr.3d 483 (2008) (holding that in action seeking only waiting time penalties, and not wages, the one-year statute of limitations under Cal.Code Civ. Proc. § 340(a) applies). Cf. Ross v. U.S. Bank Nat’l Ass’n, Case No. C07-02951 SI, 2008 WL 4447713 *4 (N.D. Cal., Sept. 30, 2008) (concluding that the three-year statute of limitations period under Cal. Labor Code § 203 applied where plaintiff sought unpaid wages, as well as waiting time penalties). Plaintiff’s cited authority, Cortez v. Purolator Air Filtration Products Co., 23 Cal.4th 163, 999 P.2d 706, 96 Cal.Rptr.2d 518 (2000), in which the plaintiff sought both unpaid wages and waiting time penalties, but the Court held that this “does not compel a contrary conclusion.”

Cal. Bus. & Prof.Code § 17200 COA

The court held that remedies under California Labor Code § 203 are penalties, and not restitution, and therefore cannot be recovered under the UCL. In re Wal-Mart Stores, Inc. Wage & Hour Litig., 505 F.Supp.2d 609, 619 (N.D. Cal.2007); Tomlinson v. Indymac Bank, F.S.B., 359 F.Supp.2d 891, 895 (C.D. Cal.2005).  The court dismissed the 17200 claim as to Aerotek without leave to amend.

Alison Marie Miceli, Michael James Grace, and Graham Stephen Paul Hollis for Plaintiff.

Jonathan Morris Brenner, Caroline McIntyre, and Alison P. Danaceau for Defendants.

By CHARLES H. JUNG

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August 10, 2010

California Supreme Court Rejects Private Right of Action for Plaintiffs in Tip Pooling Class Action Under Labor Code Section 351

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The California Supreme Court today issued its opinion in Lu v. Hawaiian Gardens Casino, Inc., an eagerly anticpiated decision where the issue was whether Labor Code section 351 provides a private cause of action for employees to recover any misappropriated tips from employers.  The Court concluded that “section 351 does not contain a private right to sue.”

Labor Code section 351 prohibits employers from taking any gratuity patrons leave for their employees, and declares that such gratuity is “the sole property of the employee or employees to whom it was paid, given, or left for.” Several appellate opinions have held that this prohibition, at least in the restaurant context, does not extend to employer-mandated tip pooling, whereby employees must pool and share their tips with other employees. (See Leighton v. Old Heidelberg, Ltd. (1990) 219 Cal. App. 3d 1062, 1067 (Leighton); see also Etheridge v. Reins Internat. California, Inc. (2009) 172 Cal. App. 4th 908, 921-922; Budrow v. Dave & Buster’s of California, Inc. (2009) 171 Cal.App.4th 875, 878-884; Jameson v. Five Feet Restaurant, Inc. (2003) 107 Cal.App.4th 138, 143.)

Plaintiff Louie Hung Kwei Lu (plaintiff) was employed as a card dealer at defendant Hawaiian Gardens Casino, Inc. (the Casino), from 1997 to 2003. The Casino had a written tip pooling policy.  Plaintiff brought a class action against the Casino and its general manager. His complaint alleged that the Casino‟s tip pooling policy amounted to a conversion of his tips, and violated the employee protections under sections 221 (prohibiting wage kickbacks by employer), 351 (prohibiting employer from taking, collecting, or receiving employees‟ gratuities), 450 (prohibiting employer from compelling employees to patronize employer), 1197 (prohibiting payment of less than minimum wage), and 2802 (indemnifying employee for necessary expenditures). The complaint also alleged that the Casino‟s conduct giving rise to each statutory violation constituted an unfair business practice under the unfair competition law (UCL) (Bus. & Prof. Code, § 17200 et seq.).

The trial court granted the Casino‟s motion for judgment on the pleadings on the causes of action based on sections 351 and 450. It agreed with the Casino that neither section contained a private right to sue. The court also granted the Casino‟s successive motions for summary adjudication on the remaining causes of action. Plaintiff appealed.

The Court of Appeal held, “pursuant to the analysis in Leighton, that tip pooling in the casino industry is not prohibited by Labor Code section 351.” However, it reversed the trial court‟s order granting summary adjudication of the UCL cause of action based on section 351. While section 351 itself contains no private right to sue, the Court of Appeal concluded this provision may nonetheless serve as a predicate for a UCL claim because plaintiff presented triable issues of fact as to whether section 351 prohibited certain employees who participated in the tip pool from doing so because they were “agents” of the Casino.

Less than two months later, another Court of Appeal expressly disagreed with the holding on section 351 of the appellate court below. (See Grodensky v. Artichoke Joe’s Casino (2009) 171 Cal.App.4th 1399, review granted June 24, 2009, S172237.) The Supreme Court granted review to resolve the conflict on this narrow issue.

The Court concluded that the statutory language does not “unmistakabl[y]” reveal a legislative intent to provide wronged employees a private right to sue.  Based on a review of section 351‟s legislative history, the Court also concluded that there is no clear indication that the legislative history showed an intent to create a private cause of action under the statute.

Justice Ming W. Chin wrote the opinion for the California Supreme Court, with all other Jusitices concurring.  Judge David L. Minning of the Los Angeles Superior Court was the trial judge.

The attorneys for appellant were Spiro Moss, Dennis F. Moss, and Andrew Kopel.

David Arbogast submitted an amicus curiae brief for the Consumer Attorneys of California.

Respondents were represented by Tracey A. Kennedy and Michael St. Denis

Anna Segobia Masters and Jennifer Rappoport submitted an amicus curiae brief for the California Gaming Association on behalf of Defendants and Respondents.

Dennis F. Moss and Tracey A. Kennedy argued in front of the Court.

By CHARLES H. JUNG

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