CALIFORNIA CLASS ACTION LAW

Tag: Supreme Court of the United States

Northern District Grants Final Approval of $3.5 Million Class Action Settlement, Reducing Requested Attorneys Fees to 25% From Requested 30%, and Granting $20,000 Enhancement Awards to Each Representative Plaintiff

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The Northern District of California granted final approval of a settlement in a meal and rest break class action in Ross v. US Bank National Association, No. C 07-02951 SI, 2010 WL 3833922 (N.D. Cal. Sept. 29, 2010).  The complaint was filed on behalf of all hourly employees who worked at a California U.S. Bank in-store branch.  See Memorandum of Points and Authorities in Support of Plaintiff’s Motion for Preliminary Approval of Class Action Settlement (“MPA”) at 1.  Plaintiffs alleged that they and other hourly paid employees have not been provided a legally compliant meal and rest period on Sundays and worked off the clock pre and post shift and during their meal breaks. Id. The parties settled the case, and the settlement agreement provides for the payment of compensation to each Participating Class Member based on his or her total workweeks in a Class position during a certain period.  Ross, 2010 WL 3833922, *1.   The court approved a non-reversionary settlement of $3,500,000 for approximately 3,300 settlement class members.  MPA at 2.

Attorneys’ Fees and Costs

Plaintiffs’ counsel sought an award of 30% of the settlement fund,  $1,050,000.00, as attorneys’ fees.  Ross, 2010 WL 3833922, *1.   Plaintiffs estimate that the total time spent litigating this case, including time overseeing claims administration, will be approximately 2647.7 hours.  Id. Plaintiffs’ counsel listed hourly rates ranging from $185 an hour to $650 an hour.  MPA at 14.  The court reduced the award to 25%: Read the rest of this entry »

Justice Scalia Stays Execution of Judgment in Louisiana Tobacco Case, Setting Up Potentially Important Review of Scope of Due Process Protection in Class Action Litigation

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Setting up a potentially important review by the U.S. Supreme Court of the scope of federal Due Process Clause protection in class actions, Justice Antonin Scalia granted an application for stay on Friday by Philip Morris USA, Inc. in Philip Morris USA Inc. v. Scott, No. 10A273, — S.Ct. —-, 2010 WL 3724564 (U.S.  Sept. 24, 2010) (mem.).  Plaintiffs brought a class action against several tobacco companies on behalf of all Louisiana smokers, alleging that the companies defrauded the plaintiff class by “distort[ing] the entire body of public knowledge” about the addictive effects of nicotine.  Id. *1 (quoting Scott v. American Tobacco Co., 2004-2095, p. 14. (La. App. 2/7/07) 949 So. 2d 1266, 1277).  The Fourth Circuit Court of Appeal of Louisiana granted relief on that theory, and entered a judgment requiring applicants to pay $241,540,488 (plus accumulated interest of about $29 million) to fund a 10-year smoking cessation program for the benefit of the members of the plaintiff class.  Id. The Supreme Court of Louisiana declined review.  Id. Defendants asked Justice Antonin Scalia “in [his] capacity as Circuit Justice for the Fifth Circuit, to stay the judgment until this Court can act on their intended petition for a writ of certiorari.” Id.

Justice Scalia recited the standard for a single Justice to enter such a stay, pursuant to 28 U. S. C. § 2101(f): Read the rest of this entry »

Central District Orders Pre-Certification Disclosure of Name and Contact Information for Putative Class Members, Finding that Such Disclosure Was “Common Practice” in Class Actions

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The Central District granted plaintiff’s motion to compel disclosure of the name and contact information (full name, last known addresses and telephone numbers) for class members of a putative class action for unpaid commission wages.  Celia Alvarez, et al. v. The Hyatt Regency Long Beach, et al., CV 09-04791-GAF (VBKx).  According to the court, the class was defined as all non-exempt employees for the period commencing May 7, 2005.  (Thank you to Radhika Sainath for alerting me to the decision.)

Defendants contended that the information was not relevant for class certification and invaded the privacy rights of the putative class.  Plaintiffs offered to enter into a protective order and offer that the information be given to a third party who would send the class members an opt-out letter.  Defendant rejected these proposal. Read the rest of this entry »

Eastern District Holds That Stolt-Nielsen Does Not Preempt Gentry

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United States District Court for the Eastern District of California rejected defendant’s argument that Stolt-Nielson preempted Gentry, and the court held that a class-wide arbitration agreement was unenforceable as against an unpaid wage and overtime plaintiff.  Mathias v. Rent-A-Center, Inc., Civ. No. S-10-1476 LKK/KJM, 2010 WL 3715059 (E.D. Cal. Sept. 15, 2010) (slip op.).

Background

Ryan Mathias (“Mathias” or “plaintiff”) was employed by Rent-A-Center, Inc. (“RAC” or “defendant”) as an Assistant Manager, a position that was classified as a non-exempt or hourly position. Id. *1. As a condition of employment, plaintiff executed an arbitration agreement (“Agreement”), which Agreement contained a class action waiver and excluded arbitration private attorney general actions.  Id. Plaintiff filed a class action alleging eight claims arising from his employment with defendant, including claims for unpaid wages and overtime, unpaid rest and meal period premiums, and penalties arising from non-compliant wage statements under the California Labor Code and California Business and Professions Code. Id. Read the rest of this entry »

Essay Arguing for Reversal of Dukes v. Wal-Mart Stores, Inc.

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Professor Benjamin Spencer’s Federal Civil Practice Bulletin links to an essay by Professor Richard Nagareda entitled Common Answers for Class Certification.  The essay focuses on Dukes v. Wal-Mart Stores, Inc. Prof. Nagareda argues that the Supreme Court should review and reverse the Dukes opinion because of a “crucial conceptual error in Dukes: the majority’s confusion between motions for class certification and the motion that really does regulate the relationship between the court and the fact finder (summary judgment).” Read the rest of this entry »

Southern District Remands California Securities Law Class Action, Declining to Combine 2 Similar Cases for Purposes of CAFA Jurisdiction

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In Royalty Alliance, Inc. v. Tarsadia Hotel, et al., Nos. 09CV2739 DMS (CAB), 10CV1231 DMS (CAB), 2010 WL 3339202 (S.D. Cal. Aug. 23, 2010) (slip op.), the court remanded a securities class action to state court and also rejected defendant’s request that the court consider two similar class actions for the purpose of evaluating CAFA jurisdiction. Read the rest of this entry »

Treble Recovery Under Civil Code § 3345 Not Limited to CLRA; But It Does Not Apply to an Award of Restitution Under the UCL

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In Clark v. Superior Court, 235 P.3d 171, 112 Cal. Rptr. 3d 876 (Cal. Aug. 9, 2010), senior citizens brought an action against an annuity seller for unfair competition pursuant to BPC 17200, seeking treble recovery.  The Los Angeles Superior Court granted judgment on the pleadings for the annuity seller’s on the treble recovery claim, without leave to amend. Read the rest of this entry »

Third District Finds Class Action Waiver Enforceable

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In an important case regarding the enforceability of class action waivers, the Court of Appeal upheld the enforceability of such a waiver.  In Walnut Producers of California et al. v. Diamond Foods, Inc., No. C060346, — Cal. Rptr.3d —-, 2010 WL 3213613 (Cal. Ct. App. 3d Dist. Aug. 16, 2010), plaintiff Walnut Producers of California (“Producers”) appealed the trial court’s order striking all class action allegations from their complaint. Plaintiffs claimed that a class action waiver in their arbitration agreements with Defendant Diamond Foods, Inc. (“Diamond Foods”), was unconscionable. The trial court disagreed.  The Court of Appeal, affirmed. Read the rest of this entry »

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