Justia Class Action Opinion Summaries

Several employees of the City and County of San Francisco who joined the city’s retirement system at age 40 or older and later retired due to disability challenged the method used to calculate their disability retirement benefits. The city’s retirement system uses two formulas: Formula 1, which provides a higher benefit if certain thresholds are met, and Formula 2, which imputes service years until age 60 but caps the benefit at a percentage of final compensation. Plaintiffs argued that Formula 2 discriminates against employees who enter the system at age 40 or above, in violation of the California Fair Employment and Housing Act (FEHA).Initially, the San Francisco City and County Superior Court sustained the city’s demurrer, finding the plaintiffs had not timely filed an administrative charge. The California Court of Appeal reversed that decision, allowing the case to proceed. After class certification and cross-motions for summary judgment, the trial court found triable issues and held a bench trial. At trial, plaintiffs presented expert testimony based on hypothetical calculations, while the city’s expert criticized the lack of actual data analysis and highlighted factors such as breaks in service and purchased credits.The California Court of Appeal, First Appellate District, Division Four, reviewed the trial court’s post-trial decision. The appellate court affirmed the trial court’s judgment, holding that the plaintiffs failed to prove intentional age discrimination or disparate impact under FEHA. The court found substantial evidence that Formula 2 was motivated by pension status and credited years of service, not age. The plaintiffs’ evidence was insufficient because it relied on hypotheticals rather than actual data showing a disproportionate adverse effect on the protected group. The appellate court also affirmed the denial of leave to amend the complaint, finding no reversible error. The judgment in favor of the city was affirmed. View "Carroll v. City & County of S.F." on Justia Law

Cocoa AJ Holdings, LLC is the developer of a mixed-use condominium project in San Francisco known as GS Heritage Place, which includes both timeshare and whole residential units. Stephen Schneider owns a timeshare interest in one of the fractional units and has voting rights in the homeowners association. In 2018, Schneider filed a class action lawsuit against Cocoa and others, alleging improper management practices, including the use of fractional units as hotel rooms and misallocation of expenses. The parties settled that lawsuit in 2020, with Schneider agreeing not to disparage Cocoa or solicit further claims against it, and to cooperate constructively in future dealings.In 2022, Schneider initiated another lawsuit against Cocoa. In response, Cocoa filed a cross-complaint against Schneider, alleging intentional interference with prospective economic advantage, breach of contract (the settlement agreement), unjust enrichment, and defamation. Cocoa claimed Schneider engaged in a campaign to prevent the sale of unsold units as whole units, formed unofficial owner groups, made disparaging statements, and threatened litigation, all of which allegedly violated the prior settlement agreement and harmed Cocoa’s economic interests.Schneider moved to strike the cross-complaint under California’s anti-SLAPP statute (Code of Civil Procedure section 425.16), arguing that Cocoa’s claims arose from his protected activities—namely, petitioning the courts and speaking on matters of public interest related to association management. The Superior Court of the City and County of San Francisco granted Schneider’s motion, finding that all claims in the cross-complaint arose from protected activity and that Cocoa failed to show a probability of prevailing on the merits.The California Court of Appeal, First Appellate District, Division Three, affirmed the trial court’s order. The court held that Cocoa’s claims were based on Schneider’s protected litigation and association management activities, and that Cocoa did not establish a likelihood of success on any of its claims. View "Cocoa AJ Holdings, LLC v. Schneider" on Justia Law

The City of Los Angeles implemented the recycLA program in 2017, establishing exclusive franchise agreements with private waste haulers to provide waste collection services for commercial and multi-unit residential properties. Under these agreements, haulers paid the City a percentage of their gross receipts as a franchise fee. Several property owners and tenants who paid for waste hauling services under this system filed a consolidated class action against the City, alleging that the franchise fees were actually an unlawful tax imposed without voter approval, in violation of Proposition 218 and related constitutional provisions. The plaintiffs sought refunds of the alleged illegal taxes and declaratory relief regarding the validity of the fees.The Superior Court of Los Angeles County considered the plaintiffs’ motion for class certification. While the court found the proposed class sufficiently numerous and ascertainable, and agreed that the question of whether the franchise fees constituted an illegal tax was subject to common proof, it identified a fundamental problem: not all proposed class members suffered an economic loss, as some landlords and property owners may have passed the cost of the fees on to tenants. The court concluded that entitlement to refunds was not susceptible to common proof and that individual issues predominated over common ones. It also found that a class action was not the superior method for resolving the dispute, due to the risk of unjust enrichment and the complexity of determining who actually bore the cost of the fees. The court denied class certification.On appeal, the California Court of Appeal, Second Appellate District, Division Four, reviewed the trial court’s order under the substantial evidence standard. The appellate court affirmed the denial of class certification, holding that the trial court did not err in finding that individual issues predominated and that class treatment was not superior. The order denying class certification was affirmed. View "Leeds v. City of L.A." on Justia Law

Plaintiff was employed by a staffing company and assigned to work at a warehousing and logistics firm, performing duties as a materials handler and forklift operator. He filed a class action and a separate representative action alleging various wage and hour violations, including claims for unpaid minimum wages, waiting time penalties, and civil penalties under the Private Attorneys General Act (PAGA). The two cases were consolidated. The plaintiff and his direct employer had entered into an arbitration agreement, which referenced the American Arbitration Association (AAA) rules but did not explicitly state that the arbitrator would decide issues of arbitrability.The defendants moved in the Superior Court of Los Angeles County to compel arbitration of the plaintiff’s individual claims, dismiss class allegations, and stay judicial proceedings. They argued that the arbitration agreement was governed by the Federal Arbitration Act (FAA) and that the AAA rules incorporated into the agreement delegated arbitrability issues to the arbitrator. The plaintiff opposed, asserting exemption from the FAA as a transportation worker and arguing that certain claims, including those under PAGA and for unpaid wages, were not arbitrable under California law. The trial court found the FAA did not apply, applied California law, and held that the agreement did not clearly and unmistakably delegate arbitrability to the arbitrator. The court compelled arbitration of some claims but allowed others, including minimum wage and PAGA claims, to proceed in court.On appeal, the California Court of Appeal, Second Appellate District, Division Eight, affirmed the trial court’s order. The court held that, in the context of a mandatory employment arbitration agreement, mere incorporation of AAA rules without explicit language in the agreement is not clear and unmistakable evidence of intent to delegate arbitrability to the arbitrator. The court also held that claims for waiting time penalties based on minimum wage violations and all PAGA claims were not arbitrable under California law when the FAA does not apply. View "Villalobos v. Maersk, Inc." on Justia Law

A consumer defaulted on credit payments, and the debt was assigned to a third-party debt collector. The collector sent a collection letter to the consumer that included mandatory language about debtor rights, but the notice used a smaller type size than required by California law. The consumer, on behalf of himself and a proposed class, filed suit alleging that the collection notices violated the type-size requirements of the Consumer Collection Notice law and, by extension, the Rosenthal Fair Debt Collection Practices Act. The suit sought statutory damages, attorney fees, costs, and injunctive relief.The Superior Court of Lake County granted summary judgment in favor of the debt collector. The court reasoned that the consumer and the class lacked standing to pursue statutory damages because they had not alleged or demonstrated any actual injury, harm, or loss resulting from the violation. The court concluded that civil liability under the relevant statutes could not be imposed without proof of actual or reasonably foreseeable harm.The California Court of Appeal, First Appellate District, Division Three, reviewed the case. The appellate court held that, under the Collection Notice law and the Rosenthal Act, a consumer has standing to seek statutory damages based solely on a statutory violation, regardless of whether the consumer suffered actual injury. The court explained that the statutory scheme authorizes recovery of statutory damages as a penalty to deter violations, not merely to compensate for actual harm. The court distinguished the relevant statutes from others that require proof of injury and rejected the argument that federal standing requirements or the use of the term “damages” limited standing to those who suffered actual harm. The judgment of the trial court was reversed. View "Kashanian v. National Enterprise Systems" on Justia Law

A group of nurses directly employed by the City and County of San Francisco, represented by their union, brought a class action alleging that the City failed to comply with Labor Code section 512.1, which requires public sector healthcare employers to provide meal and rest breaks and pay premiums for missed breaks. The nurses claimed that since the law’s effective date, the City had not provided the required breaks or compensation. The City and the union had previously negotiated a memorandum of understanding (MOU) that set out meal and rest break provisions and remedies for missed breaks, but the nurses argued these did not satisfy the new statutory requirements.The Superior Court of California, City and County of San Francisco, sustained the City’s demurrer, agreeing with the City’s argument that section 512.1 did not clearly apply to charter cities like San Francisco. The court did not address the City’s alternative constitutional argument regarding home rule authority. The nurses appealed this decision.The California Court of Appeal, First Appellate District, Division Four, reviewed the case. The court held that the statutory language defining “employer” in section 512.1 was ambiguous as to whether it included charter cities and counties such as San Francisco. The court found that neither the statutory text, legislative history, nor legislative findings demonstrated a clear intent by the Legislature to override charter city home rule authority or to apply section 512.1 to charter cities. The court also noted that when the Legislature intends to regulate charter cities, it does so explicitly, which was not the case here. Accordingly, the Court of Appeal affirmed the trial court’s judgment, holding that section 512.1 does not apply to the City and County of San Francisco. View "Levy v. City and County of San Francisco" on Justia Law

During the COVID-19 pandemic, two individuals who held automobile insurance policies with a major insurer in California alleged that the insurer’s rates became excessive due to a significant reduction in driving and traffic accidents. They claimed that the insurer was required by statute to refund a portion of the premiums collected during this period, even though the rates had previously been approved by the state’s insurance commissioner. The insurer did provide partial refunds in response to directives from the insurance commissioner, but the plaintiffs argued these refunds were insufficient and sought further restitution on behalf of a class of similarly situated policyholders.The Superior Court of Alameda County initially allowed the plaintiffs to amend their complaint after sustaining a demurrer. In their amended complaint, the plaintiffs continued to assert claims under California’s Unfair Competition Law and for unjust enrichment, maintaining that the insurer’s failure to provide full refunds violated Insurance Code section 1861.05(a). The trial court, however, sustained the insurer’s subsequent demurrer without leave to amend, holding that the statutory scheme did not require insurers to retroactively refund premiums collected under previously approved rates, even if those rates later became excessive due to changed circumstances.The California Court of Appeal, First Appellate District, Division One, reviewed the case on appeal. The court held that Insurance Code section 1861.05(a) does not impose an independent obligation on insurers to retroactively refund premiums collected under rates approved by the insurance commissioner, even if those rates later become excessive. The court reasoned that the statutory scheme provides for prospective rate adjustments through the commissioner’s review process, not retroactive modifications. The court also found that the insurer’s conduct was affirmatively permitted under the statutory “prior approval” system, and thus not actionable under the Unfair Competition Law. The judgment in favor of the insurer was affirmed. View "Davis v. CSAA Insurance Exchange" on Justia Law

A group of single-family residential (SFR) water customers challenged the City of San Diego’s tiered water rate structure, which imposed higher rates for increased water usage, arguing that these rates exceeded the proportional cost of service attributable to their parcels as required by California Constitution article XIII D, section 6(b)(3) (enacted by Proposition 218). The City’s water system serves a large population and divides customers into several classes, but only SFR customers were subject to tiered rates; other classes paid uniform rates. The City’s rates were based on cost-of-service studies using industry-standard methodologies, including “base-extra capacity” and “peaking factors,” but the plaintiffs contended these methods did not accurately reflect the actual cost of providing water at higher usage tiers.The Superior Court of San Diego County certified the case as a class action and held a bifurcated trial. In the first phase, the court found that the City failed to demonstrate, with substantial evidence, that its tiered rates for SFR customers complied with section 6(b)(3), concluding the rates were not based on the actual cost of service at each tier but rather on usage budgets and conservation goals. The court also found the City lacked sufficient data to justify its allocation of costs to higher tiers and that the rate structure discriminated against SFR customers compared to other classes. In the second phase, the court awarded the class a refund for overcharges, offset by undercharges, and ordered the City to implement new, compliant rates.On appeal, the California Court of Appeal, Fourth Appellate District, Division Two, affirmed the trial court’s judgment with directions. The appellate court held that the City bore the burden of proving its rates did not exceed the proportional cost of service and that the applicable standard was not mere reasonableness but actual cost proportionality, subject to independent judicial review. The court found substantial evidence supported the trial court’s findings that the City’s tiered rates were not cost-based and thus violated section 6(b)(3). The court also upheld class certification and the method for calculating the refund, and directed the trial court to amend the judgment to comply with newly enacted Government Code section 53758.5, which affects the manner of refunding overcharges. View "Patz v. City of San Diego" on Justia Law

Russell Johnson, a resident of a continuing care retirement community operated by Stoneridge Creek, filed a class action lawsuit alleging that Stoneridge Creek unlawfully increased residents’ monthly care fees to cover its anticipated legal defense costs in ongoing litigation. Johnson claimed these increases violated several statutes, including the Health and Safety Code, the Unfair Competition Law, the Consumer Legal Remedies Act (CLRA), and the Elder Abuse Act, and breached the Residence and Care Agreement (RCA) between residents and Stoneridge Creek. The RCA allowed Stoneridge Creek to adjust monthly fees based on projected costs, prior year per capita costs, and economic indicators. In recent years, Stoneridge Creek’s budgets for legal fees rose sharply, with $500,000 allocated for 2023 and 2024, compared to much lower amounts in prior years.The Alameda County Superior Court previously denied Stoneridge Creek’s motion to compel arbitration, finding the RCA’s arbitration provision unconscionable. Johnson then moved for a preliminary injunction to prevent Stoneridge Creek from including its litigation defense costs in monthly fee increases. The trial court granted the injunction, finding a likelihood of success on Johnson’s claims under the CLRA and UCL, and determined that the fee increases were retaliatory and unlawfully shifted defense costs to residents. The court also ordered Johnson to post a $1,000 bond.The California Court of Appeal, First Appellate District, Division Four, reviewed the case and reversed the trial court’s order. The appellate court held that the fee increases did not violate the CLRA’s fee-recovery provision or other litigation fee-shifting statutes, as these statutes govern judicial awards of fees, not how a defendant funds its own legal expenses. The court further concluded that Health and Safety Code section 1788(a)(22)(B) permits Stoneridge Creek to include reasonable projections of litigation expenses in monthly fees. However, the court remanded the case for the trial court to reconsider whether the fee increases were retaliatory or excessive, and to reassess the balance of harms and the appropriate bond amount. View "Johnson v. Stoneridge Creek Pleasanton CCRC" on Justia Law

In 1996, California voters enacted Proposition 218, adding article XIII D to the California Constitution, which includes section 6(b)(3). This section mandates that governmental fees or charges imposed on property must not exceed the proportional cost of the service attributable to the parcel. Plaintiffs, representing a class of single-family residential (SFR) customers of the City of San Diego, challenged the City's tiered water rates, claiming they violated section 6(b)(3) by exceeding the proportional cost of delivering water.The Superior Court of San Diego County ruled in favor of the plaintiffs, finding that the City's tiered rates did not comply with section 6(b)(3). The court concluded that the City failed to show that its tiered rates were based on the actual cost of providing water at different usage levels. The court found that the City's tiered rates were designed to encourage conservation rather than reflect the cost of service, and that the City's use of peaking factors and other methodologies lacked supporting data.The Court of Appeal of the State of California, Fourth Appellate District, Division Two, reviewed the case. The court affirmed the lower court's decision, holding that the City did not meet its burden of proving that its tiered rates complied with section 6(b)(3). The appellate court found that substantial evidence supported the trial court's findings that the City's tiered rates were not cost-proportional and that the City's methodologies were not adequately supported by data. The court also addressed the issue of class certification, finding that the class was properly certified and that the plaintiffs had a common interest in challenging the City's rate structure.The appellate court directed the trial court to amend the judgment to allow the City to satisfy the refund award pursuant to newly enacted Government Code section 53758.5, which requires agencies to credit refund awards against future increases in or impositions of the property-related charge. The court denied the plaintiffs' request for attorney fees on appeal without prejudice, allowing the trial court to determine the entitlement to such fees. View "Patz v. City of S.D." on Justia Law