The tort of "Trespass to Chattel," by itself, does not support a UCL violation

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I just wanted to write “trespass to chattel,” so this case gets a post just for that. In Pneuma International, Inc. v. Cho (June 24, 2019), the Court of Appeal (First Appellate District, Division One) was asked to review an assortment of complaints about the outcome of a trial. One issue was whether the failure to transfer ownership of a domain, the “trespass to chattel” that was at issue, constituted a fraudulent or unfair practice under the UCL. While Pneuma argued that the UCL’s “unlawful” prong is construed broadly, so there should be no resistance to borrowing the tort to serve as the predicate violation, the Court was not persuaded. After noting the dearth of authority on that particular tort, the Court said:

Although not directly relevant to whether Pneuma may “borrow” a tort as a basis for a UCL cause of action, respondents correctly observe that Pneuma may not recover damages under a UCL cause of action because remedies under the act are purely equitable in nature. (E.g., Korea Supply Co. v. Lockheed Martin Corp. (2003) 29 Cal.4th 1134, 1150-1151 [remedies provided under UCL “are limited” and “it is well established that individuals may not recover damages”].) Pneuma does not identify what additional relief it would be entitled to if it prevailed on its UCL cause of action. The trial court already ordered the equitable relief of transferring the egpak.com website to Pneuma after it prevailed on a cause of action for trespass to chattel.

Slip op., at 15. So, does this mean that, where the UCL could supply some additional relief, a common law tort could serve as a predicate violation of the UCL? More realistically, can you even concoct a scenario where it would make sense to say that a common law tort constituted the predicate violation?

Open Friday Post

It’s Friday again, so here is another chance to put up your very first ever comment.

Here’s a topic (that troubles me as a blogger): Do you think allowing the very large social media companies to ban swaths of commentary based on viewpoint will be beneficial in the long run? I’m not talking about the common error non-attorney commentators make of confusing this with First Amendment issues. I mean just what I asked — can you see any way that this doesn’t slide into severe, and constantly changing, viewpoint suppression by actual or quasi-monopolies?

Here’s an example: Pinterest Blacklists PJ Media, Other Conservative Sites and This Is Just the Tip of the Censorship Iceberg. PJ Media, if you don’t know it, is clearly a conservative political commentary site. But it’s certainly not radical by any reasonable measure. Among other things, it hosts Tennessee College of Law Professor Glenn Reynolds’ blog, Instapundit, which is widely read and not a hotbed of crazy, whether you agree with the politics there or not. Glenn is cool enough to have a regular column in U.S.A. Today, so I think it is safe to say that blacklisting a site like PJ Media is well down the slippery slope to the place where that greased pig is picking up steam. It’s all fun and games until your speech is the suppressed and blacklisted speech.

Can’t wait until I’m blacklisted. Bright side: maybe I already have been!

Enjoy your weekend.

Source: https://pjmedia.com/news-and-politics/pint...

Noel v. Thrifty Payless, Inc. should be decided soon, addressing whether class members must be identifiable

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In what might be a significant decision, Noel v. Thrifty Payless, Inc. was argued to the California Supreme Court on May 8, 2019. The issue presented for review is as follows: “Must a plaintiff seeking class certification under Code of Civil Procedure section 382 or the Consumer Legal Remedies Act demonstrate that records exist permitting the identification of class members?” While California appeared to have settled this question decisively many decades ago, the question arose when the First Appellate District (Division Four) opined that such identification was required. A decision may issue any time in the next couple of weeks. This is not likely to be an issue for wage and hour cases — where employer records are basically always available as a source of identification information — but is may be an issue in consumer class actions, where specific class members identification may not be possible.

Another Court of Appeal observes that the legal profession has lost its way

This is just for any salutary benefit that drawing attention to this appellate decision might bring. It isn’t a wage & hour matter. It isn’t a class action. It’s just a opinion about some unreasonable behavior surrounding the entry of a default and the refusal to set it aside. In Lasalle v. Vogel (June 11, 2019), the Fourth Appellate District, Division Three introduced its opinion with the following remarks:

Here is what Code of Civil Procedure section 583.130 says: “It is the policy of the state that a plaintiff shall proceed with reasonable diligence in the prosecution of an action but that all parties shall cooperate in bringing the action to trial or other disposition.” That is not complicated language. No jury instruction defining any of its terms would be necessary if we were submitting it to a panel of non-lawyers. The policy of the state is that the parties to a lawsuit “shall cooperate.” Period. Full stop.

Yet the principle the section dictates has somehow become the Marie Celeste of California law –a ghost ship reported by a few hardy souls but doubted by most people familiar with the area in which it’s been reported. The section’s adjuration to civility and cooperation “is a custom, More honor'd in the breach than the observance.” In this case, we deal here with more evidence that our profession has come unmoored from its honorable commitment to the ideal expressed in section 583.130, and –in keeping with what has become an unfortunate tradition in California appellate law –we urge a return to the professionalism it represents.

Slip op., at 2 (footnote omitted, including the one citing to Hamlet). Read it when you have a chance and overlook the personal misfortune recounted therein for the broader message that our profession could use a lot more courtesies.

Ninth Circuit concludes that the Dynamex "ABC test" applies retroactively

I missed this little nugget when it came out last month, but it’s worth noting regardless because it may move the needle in existing cases. In Vazquez, et al. v. Jan-Pro Franchising International, Inc. (9th Cir. May 2, 2009), the Ninth Circuit considered whether Dynamex Ops. W. Inc. v. Superior Court, 416 P.3d 1 (Cal. 2018) applied to a District Court decision that pre-dated Dynamex.

On that point, the Court agreed that the default rule of retroactive application of judicial decisions should apply after a thorough analysis of the limited bases for an exception to that default rule:

Given the strong presumption of retroactivity, the emphasis in Dynamex on its holding as a clarification rather than as a departure from established law, and the lack of any indication that California courts are likely to hold that Dynamex applies only prospectively, we see no basis to do so either.

Slip op., at 26. The Court then considered whether due process considerations could preclude retroactive application and held that such considerations did not:

Applying Dynamex retroactively is neither arbitrary nor irrational. The Dynamex court explained that “wage orders are the type of remedial legislation that must be liberally construed in a manner that services its remedial purpose.” 416 P.3d at 32. Moreover, Dynamex made clear that California wage orders serve multiple purposes. One is to compensate workers and ensure they can provide for themselves and their families. Id. But second, wage orders accord benefits to entire industries by “ensuring that . . . responsible companies are not hurt by unfair competition from competitor businesses that utilize substandard employment practices.” Id. And finally, wage orders benefit society at large. Without them, “the public will often be left to assume responsibility for the ill effects to workers and their families resulting from substandard wages or unhealthy and unsafe working conditions.” Id. It is with these purposes in mind that the California Supreme Court embraced the ABC test and found it to be “faithful” to the history of California’s employment classification law “and to the fundamental purpose of the wage orders.” Id. at 40.

Slip op., at 27-28.

The balance of the Opinion examined the merits of the case, providing significant guidance to the District Court on remand.

Separate from the content of the Opinion, I am impressed by the formatting of the Opinion. The Opinion contains a hyper-linked table of contents that improves navigation through the long decision. Because I was curious about the formatting, I did a quick spot check of recent opinions and could not find a similarly formatted document. This makes me wonder why this is not standard. I note that Judge Block, of the Eastern District of New York (sitting by designation) authored the opinion. If you happen to know why the formatting of this Opinion is so good, leave a comment.

The prevailing plaintiffs were represented by Shannon Liss-Riordan of Lichten & Liss-Riordan P.C., Boston, Massachusetts.

Labor Code section 218.5 controls contractual attorney fee provisions when wage and contract claims are intertwined

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This is a little nugget for the wage & hour set. In a matter of first impression, the Court of Appeal (Fourth Appellate District, Division Three), in Dane-Elec Corp. v. Bodokh (May 24, 2019) considered the effect of Labor Code section 218.5 on a prevailing party employer’s right to recover contract-based attorney fees from an employee where the employer successfully defended against a wage claim, found not to have been brought in bad faith, when the wage claim was inextricably intertwined with a contract claim for which the employer would otherwise be contractually entitled to recover attorney fees.

The Court described Labor Code section 218.5 as follows:

Labor Code section 218.5 is a fee-shifting statute in actions for nonpayment of wages. The first sentence of section 218.5(a) states: “In any action brought for the nonpayment of wages, fringe benefits, or health and welfare or pension fund contributions, the court shall award reasonable attorney’s fees and costs to the prevailing party if any party to the action requests attorney’s fees and costs upon the initiation of the action.”There is a significant limitation if the prevailing party is not an employee. The second sentence of section 218.5 (a) states: “However, if the prevailing party in the court action is not an employee, attorney’s fees and costs shall be awarded pursuant to this section only if the court finds that the employee brought the court action in bad faith.”

Slip op., at 15. The issue in the case arose because the wage claim and a contract claim were inexplicably intertwined. The Court resolved the question after looking at apportionment rules and the purpose of similar fee-shifting statutes, such as the Cartwright Act. The Court observed that while section 218.5 isn’t exactly a one-way fee shifting statute, the bad faith requirement effectively renders it a one-way fee-shifting statute that favors employees.

It's still possible to waive enforcement of arbitration agreements according to Nunez v. Nevell Group, Inc.

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Other than the minor surprise I now experience when any motion to compel arbitration is denied, such agreements having achieved a status as super-contracts with super powers, the decision in Nunez v. Nevell Group, Inc. (pub. ord. May 28, 2019) isn’t too surprising. In Nunez, the Court of Appeal (Fourth Appellate District, Division Three) affirmed the trial court’s denial of a motion to compel arbitration on the basis of waiver, delay, and prejudice.

The Court covers two topics in its discussion of waiver that might be of use to others. First, the Court examines the idea of waiver generally. Second, the Court examines the “clear and unmistakable” standard that asks whether a CBA clearly and unmistakably waives the right to a judicial forum for the particular type of claim in question. Keep in mind that, as the Court here observed, federal and California state courts may reach slightly different conclusions regarding application of the “clear and unmistakable” waiver standard, since California Courts are not bound by federal court decisions on the subject.

Ninth Circuit considers claim preclusion where WARN Act settlement deficiency was sought from non-settling defendant

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Taylor v. Sturgell, 553 U.S. 880 (2008) was written specifically to torment me. But, since it was issued, I haven’t seen its analysis of res judicata in class cases arise too often. Here, claim preclusion meets a bankruptcy court’s approval of a class settlement against other parties in Wojciechowski v. Kohlberg Ventures (9th Cir. May 9, 2019). The quick summary of the two cases sums it up well.

Wojciechowski filed an adversary class action against the ClearEdge entities in the bankruptcy court. He alleged that the two ClearEdge entities were a “single employer” under the Worker Adjustment and Retraining Notification (“WARN”) Act, 29 U.S.C. §§ 2101–2109, and that the entities violated that act when they fired him and other employees without 60 days’ advance notice. Wojciechowski settled that action. Per the settlement agreement, the class released all claims it had against “(i) Defendants ClearEdge, Power, Inc. and ClearEdge Power, LLC and their respective estates,” and “(ii) each of the Defendants’ current and former shareholders, officers, directors, employees, accountants, attorneys, representatives and other agents, and all of their respective predecessors, successors and assigns, excluding any third parties which may or may not be affiliated with Defendants ClearEdge Power, Inc. and ClearEdge Power LLC, including, but not limited to Kohlberg Ventures LLC.” Kohlberg was not involved in the bankruptcy proceedings or in settlement negotiations. The bankruptcy court approved the settlement agreement and closed the case soon after. The ClearEdge estates paid a portion of the class members’ WARN Act wages and benefits.

Wojciechowski then filed this putative class action. He alleges that Kohlberg, as a “single employer” with the ClearEdge entities, violated the WARN Act when it fired him without advance notice. Wojciechowski seeks “an award for the balance of the Class’[s] WARN Act wages and benefits.” That is, he seeks what the class is owed under the Act less the amount received from the ClearEdge estates.

Slip op., at 4-5. In this instance, the Court had little difficulty concluding that the scope of preclusion was clearly specified in the settlement approved in the first suit before the bankruptcy court. Kohberg argued that it was not a party to the initial settlement and could not be limited by it. The Ninth Circuit quickly rejected that argument, observing that two parties can contract to settle a claim on just about any terms they want, particularly when it is then approved by a court.

The Class Re-Action Podcast is looking for guests!

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For reasons unknown to me, we have been hitting the wall of late when trying to find willing victims…errr….guests for our podcast (we, as in my co-host, Linh Hua, and me - Linh makes a heroic effort to find guests, so you are spitting in her face when you ignore her invitation). If you are interested in participating in what is usually (IMO) an entertaining conversation, let one of us know. Unless the high-quality guests step up, I’m going to have to run my mouth for an entire show, all by myself. Nobody wants that. Linh especially.