Justia Class Action Opinion Summaries

Robert Toothman was initially employed by Apex Life Sciences, LLC, a temporary employment agency, which placed him at Redwood Toxicology Laboratory, Inc. During his employment with Apex, Toothman signed an arbitration agreement that required him to arbitrate employment disputes with Apex and its defined affiliates, subsidiaries, and parent companies. In April 2018, Toothman’s employment with Apex ended, after which he was hired directly by Redwood and worked there until June 2022. Toothman and Redwood did not sign an arbitration agreement. Several months after leaving Redwood, Toothman filed a class action alleging Labor Code violations based solely on his direct employment with Redwood, not his prior period as an Apex employee.The Sonoma County Superior Court reviewed Redwood’s motion to compel arbitration and to dismiss the class claims. Redwood argued that it was either a party to the Apex arbitration agreement as an affiliate, a third-party beneficiary, or entitled to enforce the agreement under equitable estoppel. Redwood also claimed that Toothman’s class claims should be dismissed based on the arbitration agreement. The trial court denied Redwood’s motion, finding that Redwood was not a signatory to the arbitration agreement, was not an affiliate as defined by the agreement, and could not compel arbitration under any alternative theory.The California Court of Appeal, First Appellate District, Division Four, reviewed the trial court’s order de novo. It held that Redwood was not a party to the arbitration agreement and did not qualify as an affiliate or third-party beneficiary. The court further determined that Toothman’s claims were not sufficiently intertwined with the arbitration agreement to justify equitable estoppel. The appellate court affirmed the trial court’s order denying Redwood’s motion to compel arbitration and to dismiss the class claims. View "Toothman v. Redwood Toxicology Laboratory" on Justia Law

An employee worked as a railcar repairman for a company that performs inspections and repairs on freight cars at a train yard. He was hired with an agreement that required all employment-related disputes to be resolved through arbitration and included a waiver of class and representative actions, except for certain claims that cannot be waived by law. After his employment ended, the employee sued for various wage and hour violations under California law, asserting claims on his own behalf and on behalf of a proposed class of other employees.The Superior Court of Los Angeles County reviewed the case after the employer moved to compel arbitration of the individual claims and to dismiss the class claims. The court ordered further proceedings to clarify whether the arbitration agreement was part of a contract of employment and whether the employee fell within a federal exemption for certain transportation workers. After additional evidence was submitted, the court granted the employer’s motion, compelling arbitration of individual claims and dismissing the class claims, finding the employee was not exempt from arbitration under the Federal Arbitration Act (FAA).On appeal, the California Court of Appeal, Second Appellate District, Division One, affirmed the order dismissing and striking the class claims. The court held that the FAA applied to the arbitration agreement because the employee was neither a “railroad employee” nor a transportation worker directly involved in the interstate transportation of goods under the FAA’s section 1 exemption. The court found that repairing out-of-service railcars did not constitute direct engagement in interstate commerce. The court also held that, because the FAA applied, the waiver of class claims was enforceable under federal law, thus preempting contrary state law. The appeal as to the order compelling arbitration was treated as a petition for writ of mandate and was denied. View "Vela v. Harbor Rail Services of California, Inc." on Justia Law

An employee began working at a skilled nursing facility, which was later acquired by a new employer. As part of the onboarding process, the employer required the employee to sign three related agreements to arbitrate most employment disputes, except certain representative actions under the California Private Attorneys General Act (PAGA). After ending his employment, the employee filed a class action lawsuit for various wage-and-hour violations, including a PAGA claim. The agreements also contained class action waivers and a confidentiality agreement.The employer moved to compel arbitration of the employee’s individual claims, including his individual PAGA claim, and to enforce the class action waiver. The Superior Court of Los Angeles County denied the motion, ruling that conflicting and ambiguous terms among the three arbitration agreements and other documents meant there was no enforceable agreement to arbitrate. The court also ruled, in the alternative, that the agreement was unconscionable due to both procedural and substantive defects, including an unenforceable waiver of the right to bring a PAGA action and certain provisions in the confidentiality agreement.The California Court of Appeal, Second Appellate District, Division Seven, reviewed the order denying arbitration. The court held that the agreements, although containing some ambiguities and minor inconsistencies, reflected a clear mutual intent to arbitrate employment-related disputes. The court found the agreements were not so uncertain as to be unenforceable, and any conflicting provisions could be severed. The court further determined that, while the agreements reflected some procedural unconscionability as contracts of adhesion, they did not contain substantively unconscionable terms. The Court of Appeal reversed the trial court’s order and directed that arbitration be compelled. View "Santana v. Studebaker Health Care Center" on Justia Law

A former emergency medical technician employed by a private ambulance company brought a class action alleging that his employer systematically miscalculated the “regular rate of pay” by excluding certain nondiscretionary bonuses from that calculation. This exclusion, he contended, resulted in the underpayment of overtime, double time, and meal and rest period premiums for himself and approximately 135 current and former employees during the alleged class period. The company paid ten types of bonuses, and the plaintiff received one of these—a bonus awarded during National Emergency Medical Services Week—on a single occasion.The plaintiff filed his class action in the Superior Court of Tulare County, seeking class certification for wage and hour violations, including claims for unpaid overtime, inaccurate wage statements, waiting time penalties, and other Labor Code violations. The employer opposed class certification, arguing that the plaintiff’s claim was not typical of the proposed class because he received only one type of bonus and that each type of bonus involved unique circumstances and potential defenses. The trial court denied class certification solely on the ground that the plaintiff did not establish typicality, reasoning he would be subject to unique defenses regarding the inclusion of his bonus in the regular rate of pay.The Court of Appeal of the State of California, Fifth Appellate District, reversed the trial court’s order. The appellate court held that the purported defenses related to the nature of the bonus (as a gift or discretionary payment) were not unique to the plaintiff, since other employees received the same type of bonus under similar circumstances. Therefore, the trial court committed legal error in its analysis of typicality. The case was remanded for further proceedings on the class certification motion, not inconsistent with the appellate opinion. View "Martinez v. Sierra Lifestar" on Justia Law

Two individuals brought a putative class action against the owners of a hotel in San Dimas, California, alleging that the hotel violated Civil Code section 1940.1. The statute is designed to prevent hotels from forcing guests to move out or check out and reregister every 28 days—a practice aimed at denying guests tenant protections that accrue after 30 days of occupancy. The hotel enforced a policy requiring all guests to vacate after 28 consecutive days and to stay away for at least three days before re-registering. Plaintiffs, who stayed at the hotel in multiple 28-day increments, were subject to this policy and sometimes stayed elsewhere or in their vehicle during the three-day interval.The plaintiffs filed a class action in the Superior Court of Los Angeles County, seeking to represent all individuals who had similar experiences at the hotel since November 2018. They argued that the hotel’s uniform policy and its status as a “residential hotel” made the case appropriate for class certification. The defendants countered that determining whether the hotel was a “residential hotel” under the statute would require individualized inquiries into whether each guest used the hotel as their primary residence. The trial court agreed with the defendants’ interpretation and denied class certification, finding that individual questions predominated over common ones.The California Court of Appeal, Second Appellate District, Division Three, reviewed the order denying class certification. The appellate court held that the trial court erred by interpreting section 1940.1 to require individualized proof that each class member used the hotel as their primary residence. The appellate court clarified that the “residential” status of the hotel is determined by the hotel’s overall use or intended use, not by each guest’s individual residency status. The court reversed the order denying class certification and remanded the case for further proceedings. View "Aerni v. RR San Dimas, L.P." on Justia Law

A former employee initiated a class action lawsuit against her prior employer, alleging violations of various California Labor Code provisions and other employment-related statutes. After the lawsuit was filed, the employer entered into individual settlement agreements with approximately 954 current and former employees, offering cash payments in exchange for waivers of wage and hour claims. The total settlement payments exceeded $875,000. The named plaintiff did not sign such an agreement, but many potential class members did.The Superior Court of San Bernardino County partially granted the plaintiff’s motion to invalidate these individual settlement agreements, finding them voidable due to allegations of fraud and duress. The trial court ordered that a curative notice be sent to all affected employees, informing them of their right to revoke the agreements and join the class action. The court, however, declined to require that the notice include language stating that those who revoked their settlements might be required to repay the settlement amounts if the employer prevailed. The court instead indicated that settlement payments could be offset against any recovery and that the issue of repayment could be addressed later.The California Court of Appeal, Fourth Appellate District, Division Two, reviewed the trial court’s order after the employer petitioned for writ relief. The appellate court held that, under California’s rescission statutes (Civil Code sections 1689, 1691, and 1693), putative class members who rescind their individual settlement agreements may be required to repay the consideration received if the employer prevails, but actual repayment can be delayed until judgment. The court instructed the trial court to revise the curative notice to inform employees that repayment may be required at the conclusion of litigation, and clarified that the trial court retains discretion at judgment to adjust the equities between the parties. The order of the trial court was vacated for reconsideration consistent with these principles. View "The Merchant of Tennis, Inc. v. Superior Ct." on Justia Law

Two individuals who stayed at a San Dimas hotel challenged the hotel’s practice of enforcing a maximum 28-day stay policy. Under this policy, guests were required to check out and completely vacate the property for at least three days before being permitted to re-register, a practice the hotel’s management acknowledged was intended to avoid creating landlord-tenant relationships. The plaintiffs, who stayed at the hotel multiple times between June and November 2022, brought a putative class action alleging violations of California Civil Code section 1940.1 and other related claims, arguing that the hotel’s policy was designed to circumvent tenant protections for those using the hotel as a primary residence.The plaintiffs moved to certify a class consisting of all individuals who stayed at the hotel for at least 28 consecutive days but fewer than 31 days, from late 2018 to the present. The Superior Court of Los Angeles County found the class was numerous, ascertainable, and that the plaintiffs’ claims were typical, but denied class certification. The trial court reasoned that individualized questions predominated, because it believed section 1940.1 required proof that each class member used the hotel as their “primary residence” for the hotel to qualify as a “residential hotel” under the statute.The California Court of Appeal, Second Appellate District, Division Three, reviewed the order. The appellate court held that the trial court erred by interpreting section 1940.1 to require individualized proof that each guest used the hotel as their primary residence. The court clarified that whether a hotel is a “residential hotel” under section 1940.1 is a question that focuses on the overall character and intended use of the hotel, not on each individual guest’s circumstances. The order denying class certification was reversed, and the matter was remanded for the trial court to revisit the class certification question under the correct legal standard. View "Aerni v. RR San Dimas" on Justia Law

A former employee brought a class action lawsuit against her former employer, alleging violations of California wage and hour laws and other employment-related statutes. After the complaint was filed, the employer entered into approximately 954 individual settlement agreements with other employees, providing cash payments in exchange for releases of claims. The plaintiff did not sign such an agreement but moved for class certification and later sought to invalidate the individual settlements on the grounds of fraud and coercion, arguing the employer misrepresented the litigation’s status and the scope of the settlements.The Superior Court of San Bernardino County partially granted the motion, ruling that the individual settlement agreements were voidable due to fraud or duress and ordered that a curative notice be sent to affected employees. The court’s notice advised that employees could rescind their agreements and join the class action, but did not require immediate repayment of settlement funds to the employer. The employer objected, arguing the notice should have informed employees that they might be required to return the settlement money if they rescinded and the employer ultimately prevailed in the litigation. The trial court declined to include this language, instead following certain federal cases that allowed offsetting the settlement amount against any recovery but did not require repayment before judgment.The California Court of Appeal, Fourth Appellate District, Division Two, reviewed the case on a writ. The court held that under California Civil Code sections 1689, 1691, and 1693, employees who rescind their settlement agreements may be required to repay the consideration they received, but repayment can be delayed until final judgment unless the employer shows substantial prejudice from delay. The court also found the trial court retains equitable authority to adjust repayment at judgment under section 1692. The appellate court directed the trial court to reconsider the curative notice in accordance with these principles. Each side was ordered to bear their own costs on appeal. View "The Merchant of Tennis, Inc. v. Superior Court" on Justia Law

Several individuals who were employed by the City and County of San Francisco and were at least 40 years old when hired brought a class action lawsuit alleging that the City’s method for calculating disability retirement benefits under its retirement system discriminated against employees based on age. The system employs two formulas; Formula 1 is used if it yields a benefit exceeding a percentage threshold, while Formula 2 is used if the threshold is not met. Plaintiffs argued that Formula 2, which imputes years of service until age 60, resulted in lower benefits for those who entered the retirement system at age 40 or older, in violation of the California Fair Employment and Housing Act (FEHA).After initial proceedings in the San Francisco City and County Superior Court—including a demurrer sustained on statute of limitations grounds and subsequent reversal by the Court of Appeal—the plaintiffs filed an amended complaint asserting FEHA claims for disparate treatment and disparate impact, as well as claims for declaratory relief, breach of contract, and equal protection violations. The trial court certified a class and denied summary judgment due to triable issues of fact. A bench trial followed, where both parties presented expert testimony on whether Formula 2 disparately impacted older employees.The Court of Appeal of the State of California, First Appellate District, Division Four, reviewed the trial court’s findings. It affirmed the judgment, holding that plaintiffs failed to prove intentional age discrimination or disparate impact under FEHA. The court found that Formula 2 was motivated by pension status and credited years of service, not by age, and that plaintiffs’ evidence was insufficient as it was based on hypothetical calculations rather than actual data. The trial court’s denial of plaintiffs’ request to amend their complaint after trial was also upheld, as any alleged error was not reversible on the record. The judgment in favor of the City was affirmed. View "Carroll v. City and County of San Francisco" on Justia Law

Jessica Garcia and other former employees brought a class action against The Merchant of Tennis, Inc., alleging failure to pay wages and other employment violations under California and federal law. In response, Merchant entered into approximately 954 individual settlement agreements (ISAs) with current and former employees, providing cash payments in exchange for waivers of their claims. Garcia, who had not signed an ISA, sought class certification and also moved to invalidate the ISAs, arguing that Merchant had obtained them through fraud and coercion, such as misrepresenting the scope of litigation and the claims being released.The Superior Court of San Bernardino County partially granted Garcia’s motion, finding the ISAs voidable at the election of each settling putative class member. The court ordered that curative notices be sent to those who had signed ISAs, allowing them to revoke their agreements and join the class action. However, the parties could not agree on the notice’s language, specifically whether it should inform class members that they might be required to repay the settlement amount if Merchant prevailed in the action. The trial court ruled that the notice did not need to include such repayment language, reasoning that federal cases suggested repayment was not required before joining the suit and that repayment could be treated as an offset to any judgment.The Court of Appeal of the State of California, Fourth Appellate District, Division Two reviewed the trial court’s order. It held that under California Civil Code sections 1689, 1691, and 1693, class members who rescind their ISAs may be required to repay Merchant the consideration received if Merchant prevails, but such repayment can be delayed until the conclusion of litigation. The trial court retains discretion to adjust equities between the parties at judgment. The writ of mandate was granted, directing the trial court to reconsider the curative notice in accordance with these principles. View "The Merchant of Tennis v. Superior Ct." on Justia Law