CALIFORNIA CLASS ACTION LAW

In a Wage Class Action, Defendants Waived Right to Arbitrate After Engaging in Extensive Discovery and Filing 2 Motions to Compel

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In an unpublished decision, the First District Court of Appeal affirmed the trial court’s denial of a motion to compel arbitration in a wage and hour class action, where defendants conducted voluminous discovery and filed and fully litigating two motions to compel further responses to discovery, a motion for sanctions and a motion for a protective order.    Partridge, et al. v. Hott Wings, Inc., et al., No. A130266, 2012 WL 470458 (Feb. 14, 2012).

Discussion

The Court found that Defendants’ delay in filing their petition to compel arbitration “connotes an intent not to arbitrate”.  Id. Defendants conducted substantial discovery:

Between March 2010 and the October 2010 hearing on defendants’ motion to compel arbitration, defendants engaged in voluminous written discovery to which plaintiffs responded.   In addition, defendants deposed numerous plaintiffs and third party witnesses.   Although plaintiffs had begun deposing witnesses, they had not yet obtained basic documents from defendants through discovery.   The discovery focused on the liability of individual defendants and the franchise defendants that employ plaintiffs.   As a result of defendants’ discovery requests, plaintiffs provided information regarding plaintiffs’ estimated damages, which defendants were responsible for which violations, and the liability of the individual as well as the franchise defendants.   A reasonable inference is that the information gained from defendants’ discovery goes to significant issues in plaintiffs’ case.

Id.

In addition, the Court found that Defendants “substantially invoked the litigation machinery” by: Read the rest of this entry »

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First District Holds That Stay of PAGA and Class Claims Pending Arbitration of Employee’s Individual Claims Not Appealable

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The Court of Appeal for the First District granted plaintiff’s motion to dismiss an appeal, where the employer appellant sought review of a trial court order that did not compel an employee to arbitrate her PAGA claims.  Reyes v. Macy’s, Inc., No. A133411, 202 Cal.App.4th 1119 (1st Dist. Dec. 21, 2011).  The court held that the portion of the trial court’s order that failed to compel employee to arbitrate her class claims and PAGA claims was not immediately appealable; and plaintiff’s PAGA claim was not an individual claim and thus was not within the scope of arbitration request.  Id. (holding that the order granting Defendant’s own motion to compel arbitration of the individual claims “is not appealable, and the remainder of the order denying the motion to dismiss representative [PAGA] claims is not a final judgment and, therefore, also is not appealable . . . .”).

Background

Plaintiff and respondent Reyes brought action against her employer Macy’s, alleging numerous class action labor code violations and a cause of action under the Labor Code Private Attorneys General Act of 2004 (“PAGA”), as well as individual claims for discrimination, harassment, and retaliation.  Id.

In the trial court, Macy’s filed a “motion to compel arbitration on an individual basis, dismiss class allegations, and stay civil action,” asking the court to enforce the parties’ agreement to arbitrate, compel the plaintiff to arbitrate individual claims, dismiss class/representative claims and, if the motion were granted, stay the proceedings until arbitration is completed.  Id.  San Francisco Superior Court Judge Charlotte Walter Woolard held that:

All of plaintiff’s individual claims are severed and are subject to arbitration.   These individual claims are to proceed to arbitration.   Plaintiff’s class claims and PAGA claims, and discovery related to those claims, are stayed and shall remain in this court until the individual claims are arbitrated.

Macy’s filed a notice of appeal and plaintiff has moved to dismiss the appeal.

Discussion

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No Collateral Estoppel Against Unnamed Putative Class Members, Where Certification Is Denied

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The Court of Appeal for the Second District held that a denial of class certification cannot establish collateral estoppel against unnamed putative class members. Bridgeford v. Pacific Health Corporation, et al., No. B227486, 202 Cal.App.4th 1034 (2d Dist. Jan. 18, 2012).

Background

Plaintiffs Bridgeford and Tarin filed a class action complaint in May 2010 against Pacific Health Corporation and other entities, alleging that defendants committed numerous wage and hour violations, including (1) failure to pay wages due upon discharge or resignation, (2) failure to pay regular and overtime wages due semimonthly, (3) failure to provide meal breaks, (4) failure to provide rest breaks, (5) failure to provide itemized wage statements, (6) failure to pay minimum wages for time worked off-the-clock, (7) failure to pay overtime wages, and (8) unfair competition.  Id.

The trial court sustained a demurrer without leave to amend.  Id.  Plaintiff’s appealed, contending the trial court misapplied the doctrine of collateral estoppel in holding that their class claims are precluded, and there is no basis to dismiss their individual claims or their representative claims under the Labor Code Private Attorneys General Act of 2004 (PAGA) (Lab. Code section 2698, et seq.).

Discussion

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Magistrate Judge Elizabeth LaPorte Grants Final Approval For Settlement With Attorneys Fees of 25% of the Common Fund and $5,000 Incentive Award

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Magistrate Judge Elizabeth D. LaPorte granted final approval for a class of individuals who obtained an Option ARM loan originated by U.S. Financial Funding, Inc. with certain characteristics.  Lymburner v. U.S. Financial Funding, Inc., No. C0800325, 2012 WL 398816 (N.D. Cal., Feb. 7, 2012) (slip op.).  The net settlement amount was approximately $93,750, and the court granted plaintiff’s motion for attorneys’ fees in the amount of $36,250.  Id.

Background

Plaintiff Dian C. Lymburner brought a putative class action against Defendant U.S. Financial Funding alleging claims for fraudulent omissions, breach of contract, and breach of the implied covenant of good faith and fair dealing.  Id.  Plaintiff filed a motion to certify the class, and on January 22, 2010, the Court granted that motion.  Id.  After extensive negotiation, the parties reached a settlement. Id. After notice was mailed, no class members filed an objection or exclusion request. Id.

Discussion

With respect to the total settlement amount, the court noted that “importantly, the Settlement Agreement is premised on Defendant’s limited asset.”  Id.  “Defendant has no other source of funding other than an eroding insurance policy, which was valued at $174,000, and which is now valued at $145,000, which is the total settlement amount.”  Id.  The Court approved the settlement amount, in addition to $36,250 in fees and expenses, which is 25% of the estimated value of the settlement.  Id.  At this amount, Plaintiff’s attorneys received less than their lodestar.  Id.

Judge and Attorneys

United States Magistrate Judge Elizabeth D. LaPorte.

Edward Young Lee, Lee & Fields, A.P.C., Christopher Peter Fields, Los Angeles, CA, Jeffrey K. Berns, Arbogast & Berns LLP, Tarzana, CA, Michael C. Eyerly, Patrick Deblase, Paul R. Kiesel, Kiesel Boucher & Larson LLP, Beverly Hills, CA, for Plaintiff.

Shahram Nassi, Roger Scott Raphael, Lewis Brisbois Bisgaard & Smith, San Francisco, CA, for Defendant.

By CHARLES JUNG

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MDL Panel Centralizes Facebook Internet Tracking Litigation

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Plaintiffs in the Northern District of California moved to centralize litigation consisting of eleven actions pending in ten districts in the Northern District of California.  In Re Facebook Internet Tracking Litigation, — F.Supp.2d —-, 2012 WL 432607 (U.S. Jud. Pan. Mult. Lit. Feb. 8, 2012).  The MDL Panel transferred ten actions to the Northern District of California and, assigned to the Judge Edward J. Davila for coordinated or consolidated pretrial proceedings.  Id.

 

Background

No party opposed centralization.  Id.  The Panel found that six actions shared factual allegations that “Facebook improperly tracked users’ internet activity after users had logged out of their Facebook accounts.” Id. Plaintiffs in all actions brought claims under the federal Wiretap Act, 18 U.S.C. section 2511. Additional claims include violation of the Stored Electronic Communications Act, 18 U.S.C. section 2701, the Computer Fraud and Abuse Act, 18 U.S.C. section 1030, as well as common law claims for intrusion upon seclusion/invasion of privacy, unjust enrichment, and trespass to chattels.  Id.

The Panel concluded that “Centralization will eliminate duplicative discovery; prevent inconsistent pretrial rulings, including with respect to class certification; and conserve the resources of the parties, their counsel, and the judiciary.”  Id.

Judges

Before John G. Heyburn II, Chairman, Kathryn H. Vratil, Barbara S. Jones, Paul J. Barbadoro, Marjorie O. Rendell, and Charles R. Breyer.

By CHARLES JUNG

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MDL Panel Centralizes Horizon Organic Milk Plus DHA Omega 3 Marketing and Sales Practices Litigation in the Southern District of Florida

Horizon organic milk

Horizon organic milk (Photo credit: Nicole Lee)

Defendants Dean Foods Co. and WhiteWave Foods Co. sought centralization of five actions based in Arkansas, California, Illinois and Florida.  Pursuant to 28 U.S.C. s 1407, the U.S. Judicial Panel on Multidistrict Litigation transferred the cases to the Southern District of Florida and assigned them to Hon. Joan A. Lenard for centralized pretrial proceedings.  In re Horizon Organic Milk Plus DHA Omega 3 Marketing And Sales Practices Litigation, — F.Supp.2d —-, 2012 WL 432621, MDL No. 2324 (U.S. Jud. Pan. Mult. Lit. Feb. 9, 2012).

Background

No party opposed centralization.  Plaintiffs in the Western District of Arkansas, Middle District of Florida and Southern District of Florida actions supported centralization in the Southern District of Florida.  Plaintiffs in the Southern District of California and the Northern District of Illinois actions supported centralization in the Northern District of Illinois.

The MDL Panel found that the actions shared factual questions arising out of allegations that defendants’ representations regarding certain milk products fortified with DHA Omega-3 FN1 under the brand name “Horizon Organic Milk” FN2 were misleading insofar as they claimed that the milk supports “brain health” in children and adults.

The Panel decided to order centralization in the Southern District of Florida because several plaintiffs supported centralization there, and that district “is presiding over fewer MDL dockets than other proposed districts.” Id.

Judges

Before John G. Heyburn, II, Chairman, Barbara S. Jones, Paul J. Barbadoro, Marjorie O. Rendell, Charles R. Breyer.

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Central District Holds in a “Pick-Off” Case That an Unaccepted Rule 68 Offer of Judgment Cannot Moot Plaintiff’s Claims or Class Claims

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Judge Dolly M. Gee of the Central District of California held that a Rule 68 offer that was not accepted by a lead plaintiff cannot moot either plaintiff’s claim or the putative class claim.  Gomez v. Campbell-Ewald Company, 2011 WL 3664354, No. CV 10-2007 (C.D. Cal. Apr. 6, 2011).

Background

Plaintiff filed a class action complaint alleging violation of the Telephone Consumer Protection Act alleging that Defendant directed the mass transmission of wireless spam to the cellular telephones of consumers across the nation to advertise on behalf of the U.S. Navy. Id. *1. Plaintiff received several text messages regarding pursuing a career in the Navy and did not consent to receiving such text messages from the Defendant. Id. Plaintiff sought damages, treble damages, injunctive relief, and attorneys’ fees and costs. Id.  Plaintiff also sought to certify a nationwide class of “all persons in the United States and its Territories who received one or more unauthorized text message advertisements from Defendant.” Id.

The Parties’ Stipulation

The parties stipulated that they agreed that the deadline for Plaintiff to file his motion for class certification would be extended until after the Defendant answered or otherwise responded to the complaint and conducted pre-certification discovery. Id. Defendant agreed that not waiting would be inefficient. Id. The Court approved the stipulation and extended the deadline until after all parties answered and a proposed discovery schedule was set forth to the Court. Id. *2. Read the rest of this entry »

In Wage Class Action, Sixth District Reverses Summary Judgment on Question of Whether Leave Policy Was Sabbatical or Regular Vacation

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In a wage and hour class action, California’s Sixth District Court of Appeal held that a genuine issue of material fact existed as to whether eight-week leave was a sabbatical or regular vacation precluded summary judgment in former employee’s class action against the former employer.  Paton v. Advanced Micro Devices, — Cal. Rptr. 3d —-, 2011 WL 3369346, No. H034618 (6th Dist. Aug. 5, 2011).

Background

Plaintiff Eric Paton sued defendant Advanced Micro Divices, Inc. on behalf of himself and a class of others, alleging that Defendant had failed to pay him for an eight-week sabbatical he earned but had not used when he retired. Id. *1 Salaried employees who served for seven years were eligible for an eight-week fully paid sabbatical.  Id. Plaintiff argued that the sabbatical was extra vacation and, pursuant to Labor Code section 227.3, the employer could not require an employee to forfeit vacation pay.  Id.  Plaintiff cited Suastez v. Plastic Dress-Up Co., 31 Cal. 3d 774 (1982), to support his claim that the sabbatical had vested over the seven years he had worked for defendant and he was entitled to the pay when he resigned.  Id.  Class members who had not worked for the full seven years or more were entitled to payment for the unused sabbatical in proportion to the time they had worked. Id. Read the rest of this entry »

First District Affirms Dismissal of Qui Tam Action for Failure to Identify a “Liquidated and Certain Obligation”

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The First District Court of Appeal affirmed the dismissal of a qui tam action without leave to amend, holding that plaintiffs failed to identify a “liquidated and certain obligation” owed by Bank of America.  State of California ex rel. Joseph McCann v. Bank of America, N.A., No. A126494, — Cal.Rptr.3d —-, 2011 WL 72177 (Cal. Ct. App. 1st Dist. Jan. 11, 2011).  Joseph McCann and Douglas Valdetero (Plaintiffs or Appellants) brought a qui tam action against Bank of America (BOA) in the name of the State of California under the California False Claims Act (CFCA; Govt. Code, s 12650 et seq.).  Id. *1.  Plaintiffs alleged that BOA defrauded the State by failing to pay over to the State amounts that they contend should escheat as abandoned or unclaimed property under the California Unclaimed Property Law (UPL; Code of Civ. Proc. s 1500 et seq.).  Id. The trial court sustained BOA’s demurrer to Appellants’ first amended complaint (FAC) without leave to amend on the basis that it failed to plead a CFCA claim with the required specificity and failed to establish a violation of the UPL.  Id.

Background

Plaintiffs alleged that as a check clearing bank, BOA diligently researched errors which could result in debits (i.e., money due) to BOA, but pursued errors which would result in credits (i.e., money payable) to the presenting banks “much less regularly.” Id. *2.  They contended that, as a result of a policy decision by BOA not to research credits due at the end of each processing date to presenting banks, they became “unidentified credits” which could not be traced to their rightful owners. Id. They allege that BOA’s practice was to transfer these monies to a suspense account for a short period of time, and to then appropriate them into income.  Id. Plaintiffs contended that these unidentified credits are subject to escheat to the State as unclaimed property subject to the UPL. Read the rest of this entry »

Judge Whyte of the Northern District Certifies Class Action Against Dell Related to Alleged Misrepresentation of Discount

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The Northern District granted in part a class certification motion in Brazil v. Dell Inc., No. C-07-01700 RMW, 2010 WL 5387831 (N.D. Cal. Dec. 21, 2010) (slip op.).

Background

On June 15, 2006, plaintiff Steven Seick purchased directly from defendant Dell Inc. (“Dell”) through its online purchasing process a Dell Dimension B 110 desktop computer (“Dimension Desktop”) and some associated peripheral Dell products. Id. *1. Dell allegedly misrepresented to Seick that the base price of the Dimension Desktop reflected a $50 savings from Dell’s regular price for that computer, but during the three months prior to Seick’s purchase, Dell’s average offered sales price for the Dimension Desktop model was allegedly even lower than the amount paid by Seick.  Id. Consequently, rather than having received any discount, Seick asserts that he paid $1.49 in excess of the true regular sales price for the Dimension Desktop. Id. In addition, although Dell represented to Seick that the offer for the $50 savings would expire on June 22, 2006, Dell in fact continued to make the offer until October 12, 2006. Id. Plaintiff Chad Brazil made similar, but not entirely the same allegations.  Id.

Brazil and Seick brought a class action claiming that Dell deceives customers by creating the illusion of discounts and savings through false discounts from false former prices. Id. Former prices purportedly mislead purchasers when products have not been sold at non-marked down or “regular” prices with sufficient regularity. Id.

Plaintiffs in their First Amended Complaint alleged various common law claims, claims under California Bus. & Profs. Code sections 17500 and 17200, et seq., and claims under Cal. Civ.Code section 1750, et seqId. After several motions to dismiss, motions to strike, and amendments to the complaint, plaintiff’ moved to certify the class alleging claims under California law. Id. *2.

Class Definition

Plaintiffs offered the following proposed class definition: “All persons or entities who are citizens of the State of California who on or after March 23, 2003, purchased via Dell’s Web site Dell-branded products advertised with a represented former sales price (i.e., a “Slash-Thru” price or a “Starting Price”) as indicated and set forth [in attached schedules, with limited exclusions].” Id. Read the rest of this entry »