Articles Posted in California Courts of Appeal

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The appeal presented to the Court of Appeal here was one in a certified wage and hour class action following a judgment after a bench trial in favor of defendants Certified Tire and Services Centers, Inc. (Certified Tire) and Barrett Business Services. Inc. (collectively, defendants). Plaintiffs contended Certified Tire violated the applicable minimum wage and rest period requirements by implementing a compensation program, which guaranteed its automotive technicians a specific hourly wage above the minimum wage for all hours worked during each pay period but also gave them the possibility of earning a higher hourly wage for all hours worked during each pay period based on certain productivity measures. The Court of Appeal concluded plaintiffs' arguments lacked merit, and accordingly affirmed the judgment. View "Certified Tire and Service Centers Wage and Hour Cases" on Justia Law

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Plaintiffs, home mortgage consultants, alleged they were misclassified as exempt employees by Wells Fargo. ILG, a law firm, represented approximately 600 Wells Fargo consultants alleging the same claim as the Lofton class in multiple lawsuits; the ILG suits were dismissed because the underlying claims were resolved in Lofton. In 2014, the court of appeal affirmed an order, requiring ILG to deposit into a court-supervised escrow account over $5 million of settlement proceeds ILG claimed as attorneys’ fees. ILG had concealed that settlement from the Lofton court and its class member clients. The TRO was predicated on an allegation that ILG’s clients were actually members of the class compensated by the $19 million “Lofton” settlement and that ILG was compensating itself out of the separate settlement without court approval. On remand, the trial court concluded ILG was not entitled to attorney’s fees. The monies on deposit with the court were directed to be paid to the class members who participated in the settlement. The court of appeal affirmed. Until the trial court did something about it, ILG had constructive possession of the entire $6 million settlement and control over its disbursement. ILG received due process. Nothing in this record demonstrates that ILG’s services in securing $750 for each of its 600 clients and facilitating their participation in Lofton were worth the $5.5 million it claimed in attorneys’ fees. View "Lofton v. Wells Fargo Home Mortgage" on Justia Law

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The Court of Appeal affirmed the trial court's order denying class certification in this putative class action alleging wage and hour violations against defendants. The court held that substantial evidence supported the trial court's conclusion that individual questions would predominate in determining which class members actually have a claim for missed rest breaks. The court also held that the trial court acted within its discretion in finding plaintiff was not an adequate class representative, and in denying leave to substitute another representative in light of the age of the case and the futility of doing so. View "Payton v. CSI Electrical Contractors" on Justia Law

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Retired employees of the University of California Lawrence Livermore National Laboratory claim that during their employment the University promised to provide them with University-sponsored group health insurance in their retirement, and this promise constituted an implied contract term that the University subsequently impaired. Those who retired before 2007 initially received University-sponsored group health insurance after their retirement, funded by the federal government as part of the University’s contract. In 2007, the federal government transferred the management and operation of Livermore to a private entity, LLNS, which transferred the retirees’ coverage to the LLNS plan. The retirees claimed the LLNS health plan “has significant disadvantages and no comparable new advantages, when compared with the University-provided retiree medical benefit plan,” After initially certifying a class of retirees, the trial court decertified the class. The court of appeal reversed. The trial court erroneously assumed that each class member must prove their personal awareness of the offered retiree health benefits and that economic damages are a necessary element to an impairment claim. Retirees’ theory is that their loss of an entitlement to health insurance—since LLNS insurance can be terminated at any time—constitutes substantial impairment and this issue presents a common issue. View "Moen v. The Regents of the University of California" on Justia Law

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Certain limited liability companies (LLCs) paid a levy under Revenue and Taxation Code section 17942, which was later determined by the court of appeal to be unconstitutional. After two separate actions seeking class treatment for the payment of refund claims were coordinated, the trial court rejected a jurisdictional argument from the Franchise Tax Board (FTB) that the LLCs had failed to adequately exhaust their administrative remedies as a class and could not proceed on a classwide basis. The court, however, went on to deny the motion for class certification on multiple other grounds, including lack of ascertainability, numerosity, predominance, and superiority. The court of appeal reversed. The court agreed with the trial court’s exhaustion determination but concluded that its class certification analysis was fundamentally flawed. The court deemed the matter “eminently suitable for treatment on a classwide basis.” There is no bar to certification of a class action for refund of unconstitutional taxes so long as all class members have filed their own individual claims and thereby exhausted their administrative remedies; no purpose would be served by erecting a jurisdictional barrier to class treatment of those claims on the formalistic ground that no class claim for refund was filed. View "Franchise Tax Board Limited Liability Corp. Tax Refund Cases" on Justia Law

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Plaintiff Stephen Bushansky filed a shareholder derivative action on behalf of nominal defendant NantKwest, Inc. Based on a forum selection provision contained in NantKwest's certificate of incorporation, Delaware was designated as the forum for shareholder derivative actions, the trial court dismissed Bushansky's suit. Bushansky argued on appeal that the forum selection provision was never triggered since a condition precedent to its operation was never met: Delaware courts had personal jurisdiction over all indispensable parties named as defendants, and since Delaware courts lacked jurisdiction over one of the defendants at the time the action was filed in California, the condition was not met and, thus, the forum selection provision was not triggered. The California Court of Appeal found the provision, however, did not specify that personal jurisdiction had to be determined as of the date an action is filed and no later. "In fact, it is silent as to when personal jurisdiction in Delaware must exist. Faced with that silence, we - in accord with a well-established principle of contract law - presume that the parties intended a reasonable timeframe for the condition to be fulfilled." The Court found dismissal based on the forum selection clause was proper. View "Bushansky v. Soon-Shiong" on Justia Law

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Plaintiffs Yvonne Reid and Serena Wong sued defendants the City of San Diego (City) and the San Diego Tourism Marketing District (TMD) in a putative class action complaint, challenging what they allege is "an illegal hotel tax." The trial court sustained Defendants' demurrer without leave to amend on statute of limitations and other grounds. The Court of Appeal affirmed, concluding some of the causes of action were time-barred and the remainder failed to state facts constituting a cause of action. View "Reid v. City of San Diego" on Justia Law

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Huff worked for Securitas, which hires employees to work as security guards, and contracts with clients to provide guards for a particular location. Securitas typically provides long-term placements. After Huff resigned, he sued Securitas, alleging a representative cause of action under the Private Attorneys General Act (PAGA, Lab. Code, 2698) and citing Labor Code sections 201 [requiring immediate payment of wages upon termination of employment]; 201.3(b) [requiring temporary services employers to pay wages weekly]; 202 [requiring payment of wages within 72 hours of resignation]; and 204 [failure to pay all wages due for work performed in a pay period]. The trial court held that Huff was not a temporary services employee under section 201.3(b)(1), and, therefore, could not show he was affected by a violation and had no standing to pursue penalties under PAGA on behalf of others. The court of appeal affirmed the subsequent grant of a new trial. Under PAGA an “aggrieved employee” can pursue penalties for Labor Code violations on behalf of others; the statute defines an aggrieved employee as having suffered “one or more of the alleged violations” of the Labor Code for which penalties are sought. Since Huff’s complaint alleged that another violation of the Labor Code (separate from the weekly pay requirement) affected him personally, the failure to establish a violation of the weekly pay requirement did not preclude his entire PAGA claim. View "Huff v. Securitas Security Services USA, Inc." on Justia Law

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Plaintiff Jorge Fierro filed a class action suit against defendant Landry's Restaurant Inc., seeking remedies for what Fierro alleged to be Landry's' violations of specified California labor laws and wage orders. Landry's demurred to the complaint on the basis that each of the causes of action was barred by the applicable statute of limitations. As to Fierro's individual claims, the trial court overruled the demurrer, concluding that the statute of limitations defense did not appear affirmatively on the face of the complaint. As to the class claims, the trial court sustained the demurrer without leave to amend on the basis that a prior class action with identical class claims against Landry's had been dismissed for failure to bring the case to trial in five years as required by Code of Civil Procedure sections 583.310 and 583.360. Under the "death knell" doctrine, Fierro appealed that portion of the order sustaining without leave to amend the demurrer to the class claims. The Court of Appeals determined the trial court erred. From the record presented, the Court could not determine the basis of the dismissal of the prior action; and, in any event, because the dismissal of the prior action was not final for purposes of res judicata or collateral estoppel, it could not form the basis of a defense to the class claims in this action. Furthermore, because the Court agreed with the trial court that the statute of limitations defense did not appear affirmatively on the face of the complaint, there was no alternative basis on which to affirm the dismissal of the class claims. Accordingly, the Court reversed and remanded this matter with instructions to enter an order overruling Landry's' demurrer in its entirety. View "Fierro v. Landry's Restaurant Inc." on Justia Law

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The Castillos were employed and paid by GCA, a temporary staffing company, to perform work on-site at Glenair. Glenair was authorized to and did record, review, and report the Castillos’ time records to GCA so that the Castillos could be paid. In a wage and hours putative class action, the Castillos characterized GCA and Glenair as joint employers. While their case was pending, a separate class action brought against, among others, GCA resulted in a final, court-approved settlement agreement, “Gomez,” which contains a broad release barring settlement class members from asserting wage and hour claims such as those alleged by the Castillos against GCA and its agents. The Castillos are members of the Gomez settlement class and did not opt out of that settlement. The Castillos claims against Glenair involve the same wage and hour claims, for the same work done, covering the same time period as the claims asserted in Gomez. The court of appeal affirmed summary judgment rejecting the Castillo suit. Because Glenair is in privity with GCA (a defendant in Gomez) and is an agent of GCA, the Gomez settlement bars the Castillos’ claims against Glenair as a matter of law. View "Castillo v. Glenair, Inc." on Justia Law