Tag Archives: United States Court of Appeals for the Ninth Circuit

Ninth Circuit Finds Both Class Counsel and Class Representative Inadequate Where Incentive Awards Conditioned on Reps’ Support for Settlement

English: Mimi & Eunice, “Incentive to Create”....

English: Mimi & Eunice, “Incentive to Create”. Categories at the source website: Arguments, IP. Transcript: Mimi: No one would create without monetary incentives. Eunice: Nonsense. People create for all kinds of reasons. Mimi: Who paid you to say that?! (Photo credit: Wikipedia)

Today, the Ninth Circuit reversed a district court’s approval of a class action settlement against credit reporting agencies under the Fair Credit Report Act.  Radcliffe, et al v. Experian Information Solutions, Inc., et al., Case No. 11-56376, __ F.3d __ (Apr. 22, 2013).  The Court cited a failure by the class representatives and class counsel to adequately represent the class, taking issue with the incentive awards to the class representatives that were conditioned on the class representatives’ support for the settlement.  The court reasoned that these conditional awards caused a divergence of interests between the representatives and the class:

These conditional incentive awards caused the interests of the class representatives to diverge from the interests of the class because the settlement agreement told class representatives that they would not receive incentive awards unless they supported the settlement.

You can read more here.

By CHARLES H. JUNG

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FLSA Collective Actions Held Not to Be Inherently Inconsistent with State Law Class Actions

Stanford University Memorial Church.

Stanford University Memorial Church. (Photo credit: Wikipedia)

Today the Ninth Circuit held that FLSA collective actions and state law class actions are not inherently incompatible.  Bush v. Integrity Staffing Solutions, Inc., No. 11-16892, __ F.3d __ (9th Cir. Apr. 12, 2013).  The district court dismissed warehouse workers’ claims for unpaid wages under the Fair Labor Standards Act and Nevada state law.  The Ninth Circuit reversed the dismissal of state law claims on the basis that they would be certified using different class certification procedures than the federal wage-and-hour claims.  In agreeing with other circuits, the panel held that a FLSA collective action and a state law class action are not inherently incompatible as a matter of law even though plaintiffs must opt into a collective action under the FLSA but must opt out of a class action under Federal Rule of Civil Procedure 23.

You can read more about the ruling here.

Judges

Before: Jerome Farris, Sidney R. Thomas, and N. Randy Smith, Circuit Judges. Opinion by Judge Thomas.

The case was argued and submitted at Stanford Law School.

By CHARLES H. JUNG

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Ninth Circuit Holds That Newspaper Reporters Not Exempt

New York, New York. Newsroom of the New York T...
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On Monday, the U.S. Court of Appeals for the Ninth Circuit affirmed in “all respects” the trial court’s grant of partial summary judgment to plaintiffs, a judgment after jury and bench trials, and an award of attorney’s fees to plaintiffs.  Wang v. Chinese Daily News, Inc., Nos. 08-55483, 08-56740, — F.3d —-, 2010 WL 3733568 (9th Cir. Sept. 27, 2010).  Among other things, the Ninth Circuit held that plaintiff newspaper reporters were non-exempt.  (Thank you to Randy Renick for bringing this case to my attention.)

Background

Employees of Chinese Daily News, Inc. (“CDN”), a Chinese-language newspaper, filed suit against CDN on behalf of current, former, and future CDN employees based in CDN’s San Francisco and Monterey Park (Los Angeles), California locations.  Id. *1.  Plaintiffs claimed violations of the FLSA, California’s Labor Code, and California’s Unfair Competition Law, Cal. Bus. & Prof. Code § 17200, alleging that employees were made to work in excess of eight hours per day and forty hours per week. Id. Continue reading

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Class Certification Granted in Vacation, Uniform, Paycheck, Wage and Contract 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. Continue reading

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In Software Distribution Case, Northern District Holds That Improper Disclosure Element of UTSA Claim Properly Pled Where Acknowledgment of EULA Alleged

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In BMMSoft, Inc. v. White Oaks Technology, Inc., No. C-09-4562 MMC, 2010 WL 3340555 (N.D. Cal. Aug. 25, 2010), the court denied a motion to dismiss a misappropriation of trade secrets claim in an unauthorized software distribution case.  The court held that the improper disclosure element was properly pled where the complaint included an allegation that defendant clicked “I agree” to an end user license agreement restricting unauthorized disclosure. Continue reading

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Second District Holds That, Pending Brinker, Employer Has a Duty to Provide Meal 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.”

Morry Brookler filed a class action complaint against Radioshack for its alleged failure to provide employees with a meal period of not less than 30 minutes during a work period of more than five hours.  Id. *1.  The trial court certified the class. Radioshack filed a second motion for decertification after issuance of the opinion in Brinker, 165 Cal. App. 4th 25 which the trial court granted. The California Supreme Court granted review in Brinker and the matter is currently pending. Continue reading

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In a Split Opinion, Ninth Circuit Affirms Christian Humanitarian Organization’s Exemption From Title VII’s Prohibition Against Religious Discrimination

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In Spencer v. World Vision, Inc., No. 08-35532, — F.3d —-, 2010 WL 3293706 (9th Cir. Aug. 23, 2010), the Ninth Circuit Court of Appeals considered whether a faith-based humanitarian organization is exempt from Title VII’s prohibition against religious discrimination.  Defendant World Vision describes itself as “a Christian humanitarian organization dedicated to working with children, families and their communities worldwide to reach their full potential by tackling the causes of poverty and injustice.” Id. *1.   Continue reading

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Obama Administration Weighs in on Pharmaceutical Representatives Case, Arguing that Reps Are Not Exempt

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Following its stated policy of aggressively prosecuting wage and hour violations, the  Obama administration‘s Department of Labor has filed an amicus brief in the Ninth Circuit case of Buchanan v. SmithKline Beecham Corp., 10-1525, arguing that pharmaceutical representatives are not exempt under the outside sales exemption or the administrative exemption of the FLSA.  You can read more here.

The Second Circuit considered the same issue and found that reps were not exempt under either the outside sales exemption nor the administrative exemption.

By CHARLES H. JUNG

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Judge Walker Lifts Stay

2008 Proposition 8 Protest
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Judge Vaughn R. Walker of the Northern District of California today lifted a stay on his decision where he ruled that Proposition 8 was unconstitutional.  Judge Walker, however, delayed implementation of the order to lift his stay until August 18.

Defendant-intervenors Dennis Hollingsworth, Gail Knight, Martin Gutierrez, Mark Jansson and ProtectMarriage.com brought a motion to stay the court’s judgment last week to ensure that Proposition 8 remains in effect as they pursue their appeal in the Ninth Circuit. In the alternative, proponents sought a brief stay to allow the court of appeals to consider the matter.

San Francisco asked the court to deny the stay and order the injunction against Proposition 8 to take effect immediately. California’s Governor and Attorney General also opposed any stay.

The Court held that “[b]ecause proponents fail to satisfy any of the factors necessary to warrant a stay, the court denies a stay except for a limited time solely in order to permit the court of appeals to consider the issue in an orderly manner.”

Federal courts look to four factors in deciding whether a stay is appropriate:

(1) whether proponents have made a strong showing that they are likely to succeed on the merits;

(2) whether proponents will be irreparably injured absent a stay;

(3) whether the stay will substantially injure other interested parties; and

(4) whether the stay is in the public interest.

See Nken v. Holder, 556 U.S. —-, 129, S. Ct. 1749, 1761 (2009) (noting overlap with Winter v. Natural Resources Defense Council, Inc., 555 U.S. —-, 129 S. Ct. 365, 374 (2008)).  The first two factors “are the most critical.”  Nken, 129 S. Ct. at 1757.

The order reads:

None of the factors the court weighs in considering a motion to stay favors granting a stay. Accordingly, proponents’ motion for a stay is DENIED. Doc #705. The clerk is DIRECTED to enter judgment forthwith. That judgment shall be STAYED until August 18, 2010 at 5 PM PDT at which time defendants and all persons under their control or supervision shall cease to apply or enforce Proposition 8.

By CHARLES H. JUNG

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

Hawaiian Gardens from the 605
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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 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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