CORRECTION: Opening Brief submitted in Brinker Restaurant v. Superior Court

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The Opening Brief in Brinker Restaurant v. Superior Court was submitted to the Supreme Court on January 20, 2009.  Technically, it wasn't filed, since an application for permission to file an overlong brief accompanied the submission.

You can read a copy of the Opening Brief yourself here [Editor's Note: This is the Petition, not the Brief - the corrected link is below], via Acrobat.com.

CORRECTION:  Here is the correct link to the Brief.  The link above is the Petition for Review.

CORRECTION 2:  Due to a problem with the document, I am unable to post the Opening Brief at this time.  I apologize for getting your hopes up.  If I receive a corrected document in the future, I will make that available here.

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Technology Revolution For The Legal Field

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The times, they are a changin'.  Alameda County is set to allow the a real-time web-based video feed of a complex personal injury trial.  This event touches on issues of technology, complex litigation and class actions.  Courtroom View Network will webcast the trial and host archived video on its website.  Next week I should have some sample video to share.  Check back here throughout the week for more information and access to video samples.

Here is some background information from Courtroom View Network's press release about this unusual event:

Courtroom View Network, the company that pioneered showing trials of interest to legal and financial professionals over the Internet, is showing live coverage of the welding fumes liability trial, Thomas v. Lincoln Electric Co. (Case No. RG0722122) in Alameda County (Oakland) Superior Court. The Thomas trial marks the first time allegations that a worker became ill from exposure to welding rod fumes has been heard by a California state court jury. The Thomas case is also the first time Courtroom View Network has been admitted to Webcast a trial from Alameda County.

The plaintiffs allege that welding rod manufacturers knew since 1932 that welding fumes are toxic. They also contend that the industry did not adequately warn welders that the fumes could cause various neurological disorders. Thomas alleges he has suffered “severe physical and emotional injuries” from welding fume exposure. The defendants deny all the allegations.

There is also a pending national class action suit involving thousands of plaintiffs who claim they were injured by welding rod fumes. Four “bellwether” trials have been held; one jury awarded $20.5 million in damages and another $2.4 million. The two other trials resulted in no damages being awarded.

Courtroom View Network is showing the Thomas trial on its Web site, www.courtroomlive.com.  The trial is aired in full, without commercials or commentary. The trial will also be indexed for on-demand viewing.

Courtroom View Network brings three years of experience of Webcasting high-stakes civil litigation to the Thomas trial. Courtroom View Network has covered multiple legal proceedings across the country, including such cases as “Jose Adolfo Tellez et al v. Dole Food Company Inc et al” and “Norman Turner v. Chevron Corporation” in Los Angeles Superior Court. Courtroom View Network’s target audience are members of the legal and financial community who require instant, comprehensive coverage of litigation that affects their business.

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MCLE: Strategies for Pursuing or Opposing Appellate Review in the Absence of Clear Standards

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Here's a worthly teleconference for any class action practitioner spending time in federal court (which should be all of them after CAFA):

Strategies for Pursuing or Opposing Appellate Review in the Absence of Clear Standards

Here is the program outline:

I. Key features of Rule 23(f)

A. No automatic right to appeal

B. No automatic stay of district court proceedings

C. Appeal must be filed within 10 days of class certification order

II. Case law addressing Rule 23(f)

A. “Death knell” cases and “reverse death knell” cases

B. Appeal raises fundamental and unsettled legal issue

C. Clear error in district court ruling

D. “Sliding scale” standard

III. Strategies for pursuing appellate review of class certification decision

IV. Strategies for challenging motion for appellate review of class certification

ClassActionBlawg editor Paul Karlsgodt will be one of the speakers.  More information and materials are available via ClassActionBlawg.

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Court of Appeal reverses denial of certification in Ghazaryan v. Diva Limousine, Ltd.

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Greatsealcal100Continuing a theme, The Complex Litigator has noted on several occasions, including this recent post, that luck of the draw seems to have resulted in a substantial number of class action-related decision issuing from the Second Appellate District, Division Seven. You can add another decision published today to that already substantial list of significant decisions.

In Ghazaryan v. Diva Limousine, Ltd. (January 12, 2009), the Court of Appeal reversed a trial court’s order denying plaintiff’s motion for class certification and directed the trial court to enter an order certifying the proposed subclasses:

“Sarkis Ghazaryan appeals from the trial court’s order denying his motion to certify a class of limousine drivers allegedly undercompensated by Diva Limousine, Ltd. (Diva) in violation of California wage and hour laws. Ghazaryan’s lawsuit contests Diva’s policy of paying its drivers an hourly rate for assigned trips but failing to pay for on-call time between assignments (referred to by Diva employees as “gap time”). Because the trial court incorrectly focused on the potential difficulty of assessing the validity of Diva’s compensation policy in light of variations in how drivers spend their gap time, we reverse the court’s denial of the motion and remand with directions to certify Ghazaryan’s two proposed subclasses.

(Slip op., at p. 2.) The opinion is something of a guidebook on several major areas of contention in certification motions, focusing on the way that a trial court should evaluate evidence and decide certification motions.

First, the opinion reinforces and explains the operation of the rule that precludes evaluation of the merits to determine whether certification is appropriate: “Rather than denying certification because it cannot reach the merits, as the court did here, the trial court must evaluate whether the theory of recovery advanced by the plaintiff is likely to prove amenable to class treatment . . . .” (Slip op., at 6.)

Second, the opinion demonstrates application of the rule that a class definition that describes objective characteristics or experiences is sufficient at the certification stage: “As this court explained in Hicks v. Kaufman & Broad Home Corp. (2001) 89 Cal.App.4th 908, a class is properly defined in terms of ‘objective characteristics and common transactional facts,’ not by identifying the ultimate facts that will establish liability.” (Slip op., at 6.) Misunderstandings frequently arise when trial courts attempt to apply the rule that “merits-based” definitions should not be included in a class definition.

Third, the opinion explains the limitations on the “overbreadth” challenge to proposed class definitions, demonstrating application of the “overbreadth” limitation incorporated in the “ascertainability” requisite by comparing application of that requisite in Akkerman v. Mecta Corp., Inc. (2007) 152 Cal.App.4th 1094 with the application in Aguiar v. Cintas Corp. No. 2 (2006) 144 Cal.App.4th 121 and Bell v. Farmers Ins. Exchange (2004) 115 Cal.App.4th 715. (Slip op., at 8-9.) The fact that the Court identified outcomes at each end of the “ascertainability” spectrum adds at least some measure of clarity to what is observably a challenging issue.

The opinion also restates the fundamental purpose of the “ascertainability” requisite. The opinion notes that the ascertainability requirement is to ensure notice to potential class members who experienced the injury alleged in the action: “Because the purpose of the ascertainability requirement is to ensure notice to potential class members who at some time during their employment by Diva accumulated gap time, the proposed subclass consisting of all Diva drivers would simply and effectively accomplish this purpose.” (Slip op., at 9.)

Fourth, the opinion provides guidance on the community of interest requisite, and, specifically, the difficult standard for determining the predominance of common issues of law or fact. Because this standard is often fact-driven, the opinion is helpful in that it offers an instructive framework explaining by example the difference between the predominance of individualized issues and the mere existence of individual issues: “The distinction is illustrated by Silva v. Block (1996) 49 Cal.App.4th 345 (Silva) and Prince v. CLS Transportation, Inc., supra, 118 Cal.App.4th 1320.” (Slip op., at 9-13.) It is routinely the case that class certification is denied because some individual issues are identified by the trial court, despite the fact that any reasonable assessment of the facts and law supports a finding that common issues of law or fact predominate.

The opinion also touches on a still-evolving area of employment law: the “on-call” wage claim. The published caselaw on the compensability of “on-call” time under California law is almost nonexistent. Although the opinion does not establish a standard, it offers three important observations. First, the opinion recognizes that the Department of Labor Standards Enforcement (“DLSE”) has issued advisory letters on the subject. While the opinion is clear that the DLSE letters are not controlling authority, the opinion correctly notes that they should be given significant weight. Second, the opinion notes that “control” is the common element to all “on-call” factors in the DLSE’s analyses. And third, the opinion notes that the DLSE chose not to defer entirely to the corresponding federal standard under the Fair Labor Standards Act of 1938 or the important Ninth Circuit decision about “on-call” time, Berry v. County of Sonoma (9th Cir. 1994) 30 F.3d 1174.

The decision is a worthwhile read if you are preparing a motion for class certification or just had one denied.

Finally, in the interest of full disclosure (especially important if you consider my views on the opinion to be inaccurate in any way), I authored the Appellant’s briefs in this appeal while employed at another firm.

For an amusing, shorter comment with a slightly different perspective on Ghazaryan v. Diva Limousine, take a look at Storm's California Employment Law.

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Cable set-top box class action against Time Warner are centralized in New York

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I recently reported on proposed class action suits filed against Time Warner in California and Kansas, among other states.  That background information about those class action can be found in this post, but, in a nutshell, the suits challenge as unlawful the inability of consumers to purchase their set-top boxes outright.  On December 8, 2008, the MDL consolidated six class actions in the Southern District of New York.  (In re Set-Top Cable Television Box Antitrust Litig., ___ F.Supp.2d ___ (December 8, 2008).)

Via ClassActionDefenseBlog.

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Don't be crabby about it, but plaintiffs can absolutely, positively discover class member identities and contact information in California, according to Crab Addison, Inc. v. Superior Court

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Greatsealcal100The Second Appellate Division, Division Seven, has had its hands full with class action-related decisions. In this post, I listed some of the significant decisions to issue from that Division, including Puerto v. Superior Court (2008) 158 Cal.App.4th 1242 and Belaire-West Landscape, Inc. v. Superior Court (2007) 149 Cal.App.4th 554. As luck would have it, Division Seven was asked to decide yet another matter involving the right of putative class members to obtain identity and contact information for putative class members, in Crab Addison, Inc. v. Superior Court (Martinez) (December 30, 2008).

This case is of interest because it includes an extra twist on the basic issue of class member identity discovery. The Petitioner, Crab Addison, Inc. (“CAI”), contended that the trial court should have used, if anything, an “opt-in” notice because it had provided forms to each employee regarding the release of their contact information in non-specific situations to non-specific third parties:

“[CAI] argued that its employees had a heightened expectation of privacy as to their contact information based on forms they signed regarding release of their contact information. Based on this heightened expectation of privacy, CAI claimed, if the court were to consider disclosure of the employees’ contact information, it should do so subject to an “opt in” notice requirement. That is, the employees would be contacted and only those who chose to “opt in” to the lawsuit would have their contact information disclosed to Martinez.

(Slip op., at pp. 3-4.) Noted by the Court at one point in its discussion, these “releases” were not signed by employees at the time they were first hired. They were provided by CAI to its employees after the plaintiff had propounded discovery seeking the identity of the putative class members. (Slip op., at pp. 16-17.) In any event, after recapitulating its Puerto decision in great detail, the Court turned to the last question before it:

“ This brings us to the key question in this case: the effect of the release forms. CAI argues that these forms gave their employees a heightened expectation of privacy in their contact information, requiring that the contact information be given greater protection and making an “opt in” notice procedure proper. We are unconvinced by this argument.

(Slip op., at p. 13.) To answer that question, the Court relied heavily upon the policy pronouncements in Gentry v. Superior Court (2007) 42 Cal.4th 443.

“ Gentry highlights the importance placed on the rights of employees to bring class action lawsuits to enforce their statutory rights to overtime pay. So high is the importance of these rights that courts may invalidate contractual provisions that infringe upon them.

Gentry also highlights the dangers of placing in the employer’s hands the responsibility for notifying employees of the pending litigation and requiring employees to opt in to the litigation. Current employees may decline to opt in to the litigation for fear of retaliation by their employer. This in turn could immunize the employer from liability for violation of statutory wage and overtime requirements. This would violate the public policy protecting employee rights.

(Slip op., at pp. 15-16.)  The Court essentially declared release forms like that used by CAI unconscionable.  Finally, the Court compared the circumstances before it to the facts in Alch v. Superior Court (2008) 165 Cal.App.4th 1412, review denied October 28, 2008, noting that, if anything, the privacy intrusion in Alch was noticeably greater. (Slip op., at pp. 18-19.)

Although it probably won’t, this decision, coupled with those before it, should signal to defendants that the issue of discoverability of class member identity and contact information is settled. Instead, it is more likely that we will see experiments with variations of the Release form used in this case to see if there is any way to thread the needle and force an “opt-in” notice procedure.

A thorough discussion of this decision can also be found at the UCL Pracitioner.

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Marin v. Costco Wholesale Corporation explains how to calculate overtime on certain bonuses

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Greatsealcal100One might be tempted to conclude that all of the novel issues surrounding overtime pay would long ago have been exhausted.  But being that this is a law blog, and seeing as how this blog emphasizes developments in California law, you already know that this is a post about a new issue in overtime litigation.  In Marin v. Costco Wholesale Corporation (December 23, 2008), the Court of Appeal (First Appellate District, Division One), in a case of first impression, reviewed the lawfulness of Costco's formula for calculating overtime pay on semi-annual bonuses paid to hourly employees.

First, some clarifying information is in order.  The bonuses at issue in Marin were "nondiscretionary" bonuses that were paid out based upon the number of hours that certain long-term employees worked during the six months period before the semi-annual bonus dates.  (Slip op., at pp. 1-2.)  This type of bonus is distinguished from discretionary bonuses (such as year-end bonuses issued only when the employer declares a bonus) because nondiscretionary bonuses are, essentially, deferred compensation tied in some way to production (which, in this case, is simply the hours worked).  The Court explained generally how Costco's plan functions:

“Costco pays a formulaic bonus, based on paid hours, to long-term hourly employees. To be eligible for the bonus, paid in April and October, these employees must: (1) have been paid a specified number of hours for continuous service—8,000 hours (approximately four years) for those hired before March 15, 2004, and 9,200 hours (approximately 4.6 years) for those hired after that date; (2) generally be at the top of their pay scale; and (3) have been employed by defendant on April 1 for the April bonus and October 1 for the October bonus. The maximum semi-annual base bonus amount is $2,000 for those with less than 10 years of service, $2,500 for those with 10 to 14 years of service, $3,000 for those with 15 to 19 years of service, and $3,500 for those with 20 or more years of service.

To qualify for the maximum base bonus, the employee must have been paid for at least 1,000 hours in the six-month period preceding April 1 and October 1. Bonuses are prorated for those paid for less than 1,000 hours; the formula for the base bonus is thus: hours paid up to 1,000 ÷ 1,000 × maximum bonus amount.

(Slip op., at pp. 1-2, footnote omitted.)  The Court then explained how the parties calculated overtime owed to certain employees:

“Defendant calculated the overtime owed on the bonus by dividing the employee’s maximum base bonus by the minimum number of paid hours required to achieve that maximum bonus (1,000) to determine a regular hourly bonus rate, and then by multiplying the number of overtime hours worked during the bonus period by one-half of that regular bonus rate. Plaintiffs contend that defendant was required to calculate the regular bonus rate by dividing the base bonus the employee earned by the number of straight time hours worked during the bonus period, and then multiply the number of overtime hours by 1.5 times that regular bonus rate.

For example, under defendant’s formula, an employee who achieves a maximum base bonus of $2,500 by virtue of being paid for 840 straight time hours, 100 overtime hours, and 100 vacation hours during the bonus period is entitled to $125 of overtime pay on the bonus, calculated as follows: $2,500 (maximum base bonus) ÷ 1,000 (paid hours required for maximum base bonus) = $2.50 (regular hourly bonus rate) × 100 (overtime hours) × 0.5 = $125. Under plaintiffs’ formula, the same employee would receive $477 overtime on the bonus: $2,500 (base bonus earned) ÷ 840 (straight time hours worked) = $2.98 (regular bonus rate) × 100 (overtime hours) × 1.5 = $447.

(Slip op., at pp. 3-4.)

Turning to the opinion's analysis, the Court examined Skyline Homes, Inc v. Department of Industrial Relations (1985) 165 Cal.App.3d 239, Tidewater Marine Western, Inc. v. Bradshaw (1996) 14 Cal.4th 557 and the "Division of Labor Standards Enforcement’s (DLSE) 2002 Enforcement Policies and Interpretations Manual (Manual) distinguishing 'flat sum' bonuses (Manual § 49.2.4.2) from bonuses 'based on a percentage of production or some formula other than a flat amount' (Manual § 49.2.4)" in its search for a framework in which to evaluate Costco's plan. The Court concluded that no source of controlling law specified a formula for calculating overtime on the nondiscretionary bonuses issued by Costco:

“In sum, no California court decision, statute, or regulation governs bonus overtime, the DLSE Manual sections on the subject do not have the force of law, and the DLSE advice letters on the subject are not on point. Consequently, defendant’s bonus plan cannot be deemed to violate California law. While this conclusion is dispositive of plaintiffs’ state law claims, we proceed to explain why in practical effect defendant’s bonus plan comports with the rationales for the pertinent sections of the Manual.

(Slip op., at p. 13.)  The primary reason that Costco's bonus plan caused any difficulty is that it operates as a hybrid of a "production" bonus and a "flat amount" bonus when employees work more than 1,000 hours in the six-month period used to calculate the bonus: "Defendant’s bonus does not fit neatly into either of the categories the DLSE has posited: bonuses for a “flat sum, such as $300 for continuing to the end of the season, or $5.00 for each day worked” (Manual § 49.2.4.2) and bonuses earned each payday “based on a percentage of production or some formula other than a flat amount” (Manual § 49.2.4)." (Slip op., at p. 13.).

After examining the public policies surrounding overtime premiums, and the various incentives created by overtime premiums, the Court concluded that Costco's plan did not run afoul of those concerns in a way that required a court to declare Costco's plan unlawful:  "To recapitulate, defendant’s bonus is in the nature of a production bonus until the 1,000 paid hour threshold is reached, and while the bonus has some qualities of a flat sum bonus on hours paid thereafter, it does not encourage imposition of overtime during the post-1,000 hour period in a way that would support the use of the DLSE’s flat sum bonus formula even as to overtime worked during that period." (Slip op., at p. 17.)

Of note, the Court of Appeal concluded that section 49.2.4.2 of the DLSE's Manual governing "flat sum" bonuses is a void regulation under Tidewater, because it was not  "'a standard of general application interpreting the law the DLSE enforce[s],' and 'not merely a restatement of prior agency decisions or advice letters.'" (Slip op., at p. 12.)

Of further note, the appellate counsel on both sides of this appeal were highly qualified, so I assume that they provided the Court of Appeal with high-quality policy arguments in a case of first impression where even suggestive authority is sparse.

Other blogs noting the decision include What's New in Employment Law.

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Petition for Review denied in Johnson v. Glaxosmithkline, Inc.

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Greatsealcal100This blog briefly reported on a new opinion in Johnson v. Glaxosmithkline, Inc. (September 19, 2008). You can read that post here. A Petition for Rehearing was filed on October 7, 2008. It was denied the day it was filed. On October 14, 2008, the Court of Appeal modified its opinion, without changing the judgment. In a later post, I guessed (not a stretch) that a Petition for Review was coming. The expected Petition was filed with the Supreme Court.  Today, the Supreme Court denied the Petition as part of its weekly conference.

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Poor Apple, sued yet again over iPhone 3G speeds

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This blog reported in September, and again in November, that Apple and AT&T were facing a flurry of proposed class action lawsuits regarding the performance of the iPhone 3G on AT&T's higher speed network.  On November 26, 2008, plaintiff James Pittman sued Apple for varrious product defects.  (Jim Dalrymple, Apple Faces Another 3G Speed Lawsuit (December 4, 2008) www.pcworld.com.)

My iPhone seems to do as well as any other cell phone at holding calls, which is to say that it is passable at that task.  The 3G speed is substantially better than Edge, and I get 3G in a significant portion of the Los Angeles area.  Just my experience.

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NebuAd and ISPs named in class action suit over "Deep Packet Inspection"

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Combine class actions and cutting-edge technology (two topics of interest to me in different ways) and you have what I consider to be the ideal subject matter for blog pontification.  On November 10, 2008, 15 consumers filed a putative class action lawsuit against NebuAd, Inc. and certain Internet Service Providers (ISPs) over the use of NebuAd's "Deep Packet Inspection" (DPI) technology.  (Sam Diaz, NebuAd, ISPs, named in class action lawsuit (November 11, 2008) blogs.zdnet.com.)  A copy of the suit is hosted here.

Perhaps you don't know much about computers on a technical leval and are wondering why this should interest you.  Perhaps you know that you can connect to the Internet but don't know much about what happens after electrons fly out of your home over a DSL line or a Cable line or (please, no) a dial-up internet connection.  If you take nothing else away from this post, know that Deep Packet Inspection is evil.  Be horrified by it.  If you hear of such a program coming to an ISP near to you, protest like your life depends on it.

In basic terms, computers find each other on the internet with numerical IP addresses.  You type in the name of a website.  Behind the scenes, your computer asks a Domain Name Server to translate "thecomplexlitigator.com", for example, into a numerical IP address.  Your computer then requests something from that address such as a website homepage.  The request is passed from router to router, out of your ISP's network and into other networks until it finds the server with the numerical address your computer requested.  That server then delivers the packets of data that comprise the reponse to your request.  Each packet has your delivery address in it.  Each packet makes its way to your computer on its own.  Your computer receives the response packets and reassembles the response, be it a webpage or a file download or something else, by putting the various packets back together in the correct order (they are sequentially numbered).

Your ISP knows that you have requested something from a particular site, but it doesn't know the details of what is passing back and forth between your computer and some server somewhere else on the Internet.  DPI, however, is a method by which NebuAd (or other companies) can peek inside packets and examine the contents of your communications in detail.  This gives far more information about your online activities than merely knowing the IP addresses that your computer visits.  "Having an IP address might tell the system what sites you visit on a regular basis, but for sites like Amazon.com, this is less than helpful. DPI gear can see exactly what pages on the site are being accessed, though, and it can scan those pages for keywords to use in building its profile."  (Nate Anderson, Charter "enhances" Internet service with targeted ads (May 13, 2008) arstechnica.com.)

Phorm, another company providing DPI services, has been given the green light to proceed in the United Kingdom.  While the technology is beyond the scope of this blog, Phorm's DPI technology is even worse than NebuAd because it essentially impersonates you on the Internet in a manner that is undetectable to you and the site you are visiting.  Where provided access by ISPs, Phorm will read the URLs visited, the search terms used by every user, and the content of every page visited. The resulting profiles are then sold to advertisers who are salivating at the thought of this highly specific targeting.  ISPs will share in the revenue with Phorm.

Imagine someone following you around a mall, noting every product that caught your eye, even for a moment, and then selling that information to every store in every mall you visit.  Then imagine walking into a different mall and realizing that every store already knew this information about you and actively solicited you to purchase competitors' products that are similar to what you viewed.  Don't let it happen to you!

[UPDATE:  Thanks to the reader who occasionally catches my typos.  I often have limited free time for posting, and proofreading is the first thing that gets sacrificed.]

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