CALIFORNIA CLASS ACTION LAW

Tag: United States Supreme Court

California Court of Appeal Reverses Denial of Arbitration Petition, Despite Presence of Class Waiver

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Used Car Lot (Photo credit: Hugo90)

California’s First District yesterday approved of an arbitration agreement, despite the presence  of a class waiver and a requirement to arbitrate public claims.  See Vasquez v. Greene Motors, Inc., et al., Case No. A134829, __ Cal.App.4th __ (1st Dist. Mar. 27, 2013).

The Court described the clause as follows:

The reverse side, also dense with text, contains a number of provisions in separate boxes, many dealing with typical ―boilerplate legal matters, such as warranties, applicable law, and buyer and seller remedies. None of the provisions on the back page requires a buyer‘s signature. Toward the bottom of the page is the arbitration clause. The entire text of the clause is outlined in a black border. In all capital letters and bold type at the top is written, ―ARBITRATION CLAUSE [¶] PLEASE REVIEW— IMPORTANT—AFFECTS YOUR LEGAL RIGHTS. Immediately below, three numbered provisions, also in all capital letters, inform the buyer either party may request arbitration, this would prevent a court or class-wide proceeding, and it might limit discovery. Below these, in smaller type, are the actual terms of the clause. Pursuant to these terms, the arbitration may be conducted under the auspices of the National Arbitration Forum or the American Arbitration Association (AAA), at the election of the buyer, or by any other mutually agreeable organization; the initial arbitration will be conducted by a single arbitrator; it will occur in the federal district of the buyer‘s residence; the seller must advance up to $2,500 of the buyer‘s arbitration costs; the award is binding unless it is $0 or more than $100,000 or includes injunctive relief, in which 4 case either party can request a second arbitration before three arbitrators; and the use of self-help remedies and small claims court is exempted.

The Court validated the presence of a class action waiver and requirement to arbitrate public claims, finding the arguments against each “foreclosed” by Concepcion:

Finally, Vasquez argues the waiver of class action rights and the requirement to arbitrate ―public claims, such as the statutory violations alleged here, are impermissible. (See Discover Bank v. Superior Court (2005) 36 Cal.4th 148 (Discover Bank); Cruz v. PacifiCare Health Systems, Inc. (2003) 30 Cal.4th 303.) Both arguments have been foreclosed by the United States Supreme Court‘s decision in AT&T Mobility, LLC v. Concepcion (2011) 131 S.Ct. 1740 (Concepcion), which found preemption by the Federal Arbitration Act (9 U.S.C. § 1 et seq.). (See Phillips v. Sprint PCS (2012) 209 Cal.App.4th 758, 769; Nelsen v. Legacy Partners Residential, Inc. (2012) 207 26 Cal.App.4th 1115, 1136–1137.) Although Concepcion expressly considered only Discover Bank‘s judicially created ban on class action waivers as unconscionable, the same rationale would require a finding of preemption of the statutory ban on class action waivers in section 1751, which is similarly based on public policy.

You can read more about this opinion here.

Judges & Attorneys

Justice Margulies wrote the opinion for the court, and Justices Dondero and Banke concurred.  The trial court judge was Hon. Robert S. Bowers of Solano County Superior Court

Toschi, Sidran, Collins & Doyle, David R. Sidran and Thomas M. Crowell for Defendants and Appellants.

Rosner, Barry & Babbitt, Hallen D. Rosner, Christopher P. Barry and Angela J. Smith for Plaintiff and Respondent.

By CHARLES H. JUNG

Press Quotes Regarding Analysis of Compton Case

English: Seal of the Supreme Court of California

English: Seal of the Supreme Court of California (Photo credit: Wikipedia)

LexisNexis’s Law360 today published an article quoting the author’s analysis of the Compton v. Superior Court case.  Compton v. Superior Court of Los Angeles County, No. B236669, — Cal.Rptr.3d —-, 2013 WL 1120619 (2d Dist. Mar 19, 2013):

“In both cases, the First and Second districts applied Armendariz and invalidated arbitration agreements for lack of mutuality,” said Charles Jung, a Nassiri & Jung LLP attorney. “At least as far as California courts are concerned, Armendariz is alive and well, and it appears that this is going to continue to be the case until the California Supreme Court overrules it.”

In light of the latest ruling, plaintiffs and their attorneys looking to defeat mandatory arbitration agreements will keep an eagle eye out for any type of one-sidedness, according to Jung.

“The Compton ruling creates an avenue for employees to argue that mandatory agreements are unlawfully one-sided and that under Armendariz, they should be stricken,” he said. “For employers, it suggests the way to make arbitration agreements enforceable is by making them simple and even-handed. Employers can’t have their cake and eat it too.”

“The California Supreme Court really has its work cut out for it,” Jung said. “The challenge for the California Supreme Court is to try to preserve what it can of California’s public policy, yet not fall afoul of and directly contradict or simply ignore the U.S. Supreme Court. It’s a very tricky position for the court to be in.”

Ninth Circuit Holds that FAA Under Concepcion Broadly Preempts State Law Invalidating Class-Action Waivers in Arbitration Agreements

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The Ninth Circuit Court of Appeals in a published opinion today, held that the Federal Arbitration Act broadly preempts state law invalidating class-action waivers in arbitration agreements, even where the waivers would preclude effective vindication of statutory rights.  The opinion can be found here: http://www.ca9.uscourts.gov/datastore/opinions/2012/03/16/09-35563.pdf.

More on this later.

By CHARLES JUNG

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Northern District Denies Certification of Wage & Hour Class Action

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The Northern District of California denied class certification of a meal and rest break class action in Washington v. Joe’s Crab Shack, No. C 08-5551 PJH, 2010 WL 5396041 (N.D. Cal Dec. 23, 2010.) (slip op.).  Plaintiff Drew Garrett Washington asserted that defendant Crab Addison, Inc. (“Crab Addison”), a company that operates a number of Joe’s Crab Shack restaurants, failed to provide employees with meal and rest breaks, allowed its restaurant managers to manipulate employee time records to deprive employees of pay for all hours worked (including overtime and missed meal break pay), required employees to perform work “off the clock”; and required employees to pay for their own employer-mandated uniforms.  Id. *1.

Class Definition

Plaintiff moved pursuant to Federal Rule of Civil Procedure 23, to certify a plaintiff class consisting of “all non-exempt restaurant employees employed by Crab Addison at Joe’s Crab Shack restaurants in California from January 1, 2007, through the present.”

Discussion

The court denied the certification motion.  Id. *11.  “Plaintiff’s position is that common questions predominate because the main issue is whether—notwithstanding Crab Addison’s written policies—Joe’s Crab Shack restaurants in California followed a common unwritten policy of denying meal and rest breaks, failing to pay employees who did not take breaks, failing to pay for overtime, requiring employees to purchase their own uniforms, and so forth.” Id. Plaintiff contended that the existence of a policy or practice that in effect contradicts Crab Addison’s written policies can be ascertained by an analysis of the data in Crab Addison’s computer systems.  Id. “But since plaintiff has failed to adequately explain how that analysis works and exactly what the data shows, he has failed to adequately establish the existence of such a policy or practice.” Id. Read the rest of this entry »

Second District Compels Arbitration of Individual Claims in a Class Action Where Arbitration Agreement Contained an Unenforceable Class Arbitration Waiver

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The Second District compelled a class action plaintiff to arbitrate his individual claims in Maiorano v. Professional Community Management, Inc., No. B220127, 2010 WL 3786721 (Cal. Ct. App. 2d Dist. Sept. 30, 2010).  Defendant, Professional Community Management, Inc., appealed from an order denying its petition to compel arbitration of a putative class action filed by plaintiff, Ray A. Maiorano.  Id. *1.  The Second District held that “based solely on the parties’ agreement, we conclude they cannot be compelled to arbitrate on a class basis”, but it directed the trial court to compel arbitration of plaintiff’s individual claims. Id. The court reasoned that the “presence of a provision limiting arbitration to individual rather than joined or representative claims did not present a basis upon which the trial court could conclude the present arbitration agreement was permeated by an unlawful purpose.”  Id. *4.

Background

Plaintiff brought a class action complaint alleging violations of statutory meal and rest breaks, wage reporting and overtime requirements, and unlawful and unfair business practices.  Id. *2.  Plaintiff also asserted a cause of action for penalties under the Labor Code Private Attorneys General Act of 2004–Labor Code sections 2698 and 2699.  Id. Defendant filed a petition to compel arbitration. The trial court denied defendant’s petition, ruling that: Read the rest of this entry »

Central District Denies Motion to Compel Class Arbitration, But Grants Stay Pending Outcome of Supreme Court’s Decision in AT&T Mobility v. Concepcion

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The United States District Court for the Central District of California denied a class action defendant’s motion to compel arbitration, but granted its motion to stay.  Lopez v. American Express Bank, FSB, No. CV 09-07335 SJO (MANx), 2010 WL 3637755 (C.D. Cal. Sept. 17, 2010).

Plaintiffs sued Defendants American Express Bank, FSB, and American Express Centurion Bank’s (collectively, “Defendants”) alleging causes of action relating to the terms and conditions of credit cards. Id. *1.  Defendants moved to compel arbitration.  Id. The Court denied, finding that the class action waiver contained in the Agreement between the parties was unconscionable under California law, and therefore, the Plaintiffs could not be compelled to arbitrate. Id. Defendants brought the present motion to reconsider.

The Court determined that the Supreme Court’s grant of certiorari in AT & T Mobility LLC v. Concepcion, — U.S. —-, 130 S. Ct. 3322, — L. Ed. 2d —-, 2010 WL 303962 (May 24, 2010) constitutes a material difference in fact and law, potential change in controlling law, and justifiable reason to reconsider its prior. Id. *3.

The specific question that the Supreme Court will resolve is: Read the rest of this entry »

Southern District Grants Class Certification Granted in Labor Code Class Action

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The Southern District of California granted class certification in a vacation, uniform, paycheck, wage and contract class action.  Lopez v. G.A.T. Airline Ground Support, Inc., No. 09cv2268-IEG(BGS), 2010 WL 3633177 (S.D. Cal. Sept. 13, 2010) (slip op.).

Background

Former employees of Defendant G.A.T. Airline Ground Support, Inc. (“GAT”) sued for systematic wage and hour violations in violation of federal and state law. Id. *1.  GAT provides services to airlines, including ground transportation, aircraft maintenance, and cargo operations management.  Id. The four named Plaintiffs are former ramp agents employed by GAT in California.  Id.

Rule 23(a) Commonality

The court found questions of law or fact common to the class with respect to plaintiffs’ vacation, uniform, paycheck, wage, and contract claims:

Here, as explained in detail below, Plaintiffs present both factual evidence of GAT’s company-wide policies and practices as well as anecdotal evidence in the form of class member declarations regarding the application of those challenged policies and practices. Read the rest of this entry »

Southern District Grants Stay Pending Appeal of Denial of Class-Wide Arbitration

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The Southern District of California granted a stay of proceedings pending appeal of the trial court’s refusal to compel class-wide arbitration.  Del Rio v. CreditAnswers, LLC, No. 10cv346-WQH-BLM, 2010 WL 3418430 (S.D. Cal. Aug. 26, 2010) (slip op.). Read the rest of this entry »

Second District Holds That Providing Meal Breaks Means Employers Must Provide Breaks “as a Practical Matter”

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While the California Supreme Court will resolve this issue shortly, in Brookler v. Radioshack Corp., B212893, 2010 WL 3341816 (Cal. Ct. App. 2d Dist. Aug. 26, 2010), an unpublished opinion issued today, the Second District Court of Appeal held that “Unless and until our Supreme Court holds otherwise, we agree with the analysis in Cicairos which held an employer’s obligation under the Labor Code and related wage orders is to do more than simply permit meal breaks in theory; it must also provide them as a practical matter.” 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 »