Tag Archives: Plaintiff

Supreme Court Issues Ruling With Implications for Federal Employment Class Actions

English: Supreme Court Associate Justice Anton...

English: Supreme Court Associate Justice Antonin Scalia testifies before the House Judiciary Committee’s Commercial and Administrative Law Subcommittee on Capitol Hill May 20, 2010 in Washington, DC. Scalia and fellow Associate Justice Stephen Breyer testified to the subcommittee about the Administrative Conference of the United States. (Photo credit: Wikipedia)

Today, the U.S. Supreme Court issued its ruling in Comcast Corp., et al. v. Behrend, et al., No. 11-864, 569 U.S. ___ (Mar. 27, 2013), which may impact how employers attack discrimination and other employment class actions.  In a 5 to 4 opinion, the Court reversed certification of a proposed antitrust class action.  Justice Scalia, writing for the Court, concluded that the class was improperly certified under Rule 23(b)(3) because plaintiff’s damages model fell short of establishing that damages can be measured classwide.  The District Court and Third Circuit approved certification of a class of more than 2 million current and former Comcast subscribers who sought damages for alleged violations of the federal antitrust laws.

At the trial court level, plaintiffs proposed four theories of antitrust impact, only one of which–the “overbuilder” theory–the trial court accepted.  To establish damages, plaintiffs relied solely on the testimony of Dr. James McClave, who designed a regression model comparing actual cable prices in one area with hypothetical prices that would have prevailed but for defendant’s allegedly anticompetitive practices.  Dr. McClave acknowledged that the model did not isolate damages resulting from any one theory of antitrust impact.  Id. at 4.

The Supreme Court held that the class was improperly certified.

By refusing to entertain arguments against respondents’ damages model that bore on the propriety of class certification, simply because those arguments would also be pertinent to the merits determination, the Court of Appeals ran afoul of our precedents requiring precisely that inquiry. And it is clear that, under the proper standard for evaluating certification, respondents’ model falls far short of establishing that damages are capable of measurement on a classwide basis. Without presenting another methodology, respondents cannot show Rule 23(b)(3) predominance: Questions of individual damage  calculations will inevitably overwhelm questions common to the class.

The Court reasoned that the “model failed to measure damages resulting from the particular antitrust injury on which petitioners’ liability in this action is premised.”  Id. at 8.  Justice Scalia emphasized that “it may be necessary for the court to probe behind the pleadings before coming to rest on the certification question, . . . Such an analysis will frequently entail overlap with the merits of the plaintiff ’s underlying claim.” Id. at 6 (internal quotations omitted).

By CHARLES H. JUNG

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Engaging in Voluminous Discovery and Litigating Two Motions to Compel Sufficient to Waive Right to Arbitrate

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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: Continue reading

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Stay of PAGA Claims Pending Arbitration of 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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In an Employment Case, Denial of Class Certification Cannot Establish Collateral Estoppel Against Unnamed Putative Class Members

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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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Eastern District Denies “First to File” Transfer of FLSA Collective and Labor Code Class Action

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The United States District Court for the Eastern District of California denied defendant employer’s motion to transfer pursuant to the “first-to file” rule.  Wilkie v. Gentiva Health Services, Inc., Civ. No. 10-1451 FCD/GGH, 2010 WL 3703060 (E.D. Cal. Sept. 16, 2010) (slip op.).  Plaintiff filed a putative nation-and California-wide class action/collective action against plaintiff’s former employer Gentiva for alleged violations of the Federal Labor and Standards Act (“FLSA”) and the California Labor Code § 201 et seq. for: (1) misclassification as exempt from overtime pay and failure to pay overtime; (2) willful failure to pay wages due within the time specified by the Code; (3) violation of California Wage Order No. 4 for knowingly and intentionally failing to provide timely, accurate, itemized wage statements including request for an injunction and damages; (4) failure to give proper rest and meal breaks; and (5) violation of California’s Business & Professions Code § 17200 et seq.  Id. *1

A prior FLSA collective action and New York and North Carolina state law class action against Gentiva was filed in the United States District Court for the Eastern District of New York, entitled Rindfleisch, et al. v. Gentiva Health Services, Inc., No. CV10-2111 (E.D.N.Y.) (“Rindfleisch”). Defendant moved to transfer plaintiff’s complaint under the “first-to-file rule,” on the ground plaintiff’s claims are the subject of the Rindfleisch action. Plaintiff opposed the motion, arguing the parties and claims are not substantially similar in the two actions and other equitable factors militate against transfer under the first-to-file rule.  Id. The court denied Gentiva’s motion.  Id. Continue reading

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Second District Reverses Class Action Judgment Relating to Bonuses Allegedly Due After Merger

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The Second District reversed a trial court’s judgment in favor of employees in a class action trial.  Pearline Zalewa v. Tempo Research Corporation, B210429, 2010 WL 3735240 (Cal. Ct. App. 2d Dist. Sept. 27, 2010).  Defendant  fiber-optic equipment manufacturer was sued in a class action by its former employees who claimed that the manufacturer breached an obligation to pay them annual bonuses, an obligation that allegedly continued for years after they were laid off from work during a business downturn.  Id. The court concluded that the employees were not entitled to any recovery: “All but two of the employees relinquished their right to sue when they were laid off, in return for compensation that exceeded their earned severance pay. In any event, there was no promise made to pay bonuses to the employees after they were laid off.”  Id.

The Trial Court’s Judgment

The trial court conducted a bench trial in January 2008, finding that plaintiffs were entitled to recover a direct bonus under theories of breach of contract, promissory estoppel, accounting, and unfair business practices. Id. The court deemed the bonus payments to be “wages” under the Labor Code. Id. And because the bonus payments are wages, plaintiffs were awarded prejudgment interest and attorney fees under the Labor Code. Id. The court enumerated the amount of the award for each employee, less offsets for monies already paid by defendants, plus interest. Id. The total amount of the award, including interest, was approximately $99,000, and plaintiffs’ counsel was awarded attorney fees of $881,715.  Id. Continue reading

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Second District Reverses Summary Judgment on All Wage and Hour Claims

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The Court of Appeal for the Second District reversed summary judgment on wage and hour claims in Porter v. Ralphs Grocery Company, No. B218220, 2010 WL 3704055 (Cal. Ct. App. 2d Dist. Sept. 23, 2010).  Plaintiff alleged that defendant required him to work overtime off the clock, and by doing this defendant both denied plaintiff proper wages and made it difficult for plaintiff to calculate the overtime pay due him.  Id. *8.  Plaintiff also alleged that defendant failed to afford meal periods of at least one-half hour in which he was relieved of all duties, and that he regularly worked without taking the 10 minute rest breaks due him.  Id. Plaintiff alleged violation of Labor Code sections 1174, 226.7, and 512. Id. He also alleged violation of Labor Code sections 201 and 203 for failure to pay all sums due plaintiff immediately upon termination of his employment.  Id. Additionally, he alleged defendant retaliated against him for his having requested that he not have to work off the books. Id.

The Court of Appeal held that “when an employee continues to work at the end of his shift even when not requested or required to do so, and the employer knows or has reason to know about such continuing work, then the time is considered working time and it is the duty of management to see that the post-shift work is not performed if it does not want the employee to work past his shift.” Id. *9 (citing Morillion v. Royal Packing Co., 22 Cal. 4th 575 (2000)). Continue reading

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Eastern District Finds Class-Wide Arbitration Agreement Unenforceable

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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. Continue reading

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Southern District Requires Plaintiffs in CUTSA Case to Post $800,000 Bond for Fees and Costs Pursuant to California Code of Civil Procedure § 1030

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The United States District Court for the Southern District of California required plaintiffs in a UTSA case to post an $800,000 bond for fees and costs, pursuant to California Code of Civil Procedure section 1030.  Gabriel Technologies Corporation v. Qualcomm Incorporated, No. 08 CV 1992 MMA (POR), Slip Copy, 2010 WL 3718848 (S.D. Cal. Sept. 20, 2010).

The action arose out of events related to technology licenses and related joint ventures between Plaintiffs and their predecessor in interest, and Defendants.  Id *1.  In the Fourth Amended Complaint, Plaintiffs assert claims for: (1) Breach of the Amended and Restated License Agreement; (2) Correction of Inventorship (pursuant to 35 U.S.C. § 256); (3) Declaratory Judgment of Ownership Interest in the Patents (pursuant to 28 U.S.C. § 2201); and (4) Misappropriation (pursuant to Cal. Uniform Trade Secrets Act). Id. *2. Defendants filed a motion for a cost bond under California Code of Civil Procedure section 1030. Id. The Court also has authority under Civil Local Rule 65.1.2(a) to require Plaintiffs to post a bond “where authorized by law and for good cause shown.” Continue reading

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Northern District Denies Preliminary Injunction Where Plaintiff’s Declaration Failed to Show Customer List Was the Result of Substantial Time, Expense and Effort on Part of Plaintiff

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The Northern District of California denied defendants’ motion to dismiss based on UTSA preemption and denied plaintiff’s motion for preliminary injunction.  Kovesdy v. Kovesdy, C 10-02012 SBA, 2010 WL 3619826 (N.D. Cal. Sept. 13, 2010) (slip op.). Plaintiff Eric Kovesdy (“Eric” or “Plaintiff”) sued his stepmother, Defendant Hedy Kovesdy (“Hedy”) for, inter alia, for misappropriation of trade secrets under California’s Uniform Trade Secrets Act (“UTSA”), Cal. Civ. Code §§ 3426-3426.11, and trademark infringement under the Lanham Act, 15 U.S.C. § 1125(a). Id. (1) Defendants moved to dismiss; and (2) Plaintiff moved for preliminary injunction.

Background

Peter Kovesdy (“Peter”) opened a professional tax practice known as Humex Income Tax (“Humex”).   Continue reading

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