Certified class of fedex managers is subsequently decertified

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United States District Court Judge Janis Sammartino (Southern District of California) granted FedEx's motion to decertify a class of California-based Dock Service Managers.  Weigele v. Fedex Ground Package System, Inc. (S.D. Cal. Apr. 5, 2010) 2010 WL 1337031.  Taking In re Wells Fargo Home Mortgage Overtime Pay Litig. (Wells Fargo II), 571 F.3d 953 (9th Cir. 2009) really seriously, the Court concluded that predominance was lacking.  Perhaps the Court took Wells Fargo II a bit too seriously: "The Court's second reason [for] its finding that common issues do not predominate is that with the substantially decreased importance of Defendant's common classification scheme, the common issues are a relatively minor portion of this litigation."  I don't think that Wells Fargo II said that a common classification scheme should be viewed with substantially decreased importance.  It said that a common classification scheme could not treated as the sole factor used in a certification analysis.  In any event, the Court's changed view was very clear:

[T]he Court is unclear how a jury will be able to sort out the issues placed before it. It appears that they will need to determine whether each testifying witness was or was not exempt and determine to what extent that witness was not provided with mandated overtime, meal, and rest breaks. They will then need to extrapolate from all of the testifying witnesses to the entire class. But it is unclear which the tools they will have to perform that extrapolation. At worst it appears that they would be left to guess. This is too amorphous to expect a reasonable and rational result from any jury.

Order, at 11.

As I said the other day, another misclassification theory, another class that doesn't make the cut.

Class allegations stricken in suit alleging defective control panels in certain Whirlpool and Kenmore machines

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United States District Court Judge Jeremy Fogel (Northern District of California) granted, with leave to amend, a motion to strike class allegations in a suit alleging a defect in Whirlpool-manufactured top-loading Kenmore Elite Oasis automatic washing machines (“the Machines”) that Sears marketed, advertised, distributed, warranted, and offered to repair.  Tietsworth v. Sears Roebuck and Co., et al., 2010 WL 1268093 (N.D. Cal. Mar. 31, 2010).  The alleged defect in an electronic control board causes machines to stop mid-cycle.

The Court concluded that the class was not ascertainable as defined:

[T]he putative classes alleged in paragraph 98 cannot be ascertained because they include members who have not experienced any problems with their Machines' Electronic Control Boards-or for that matter with any other part of the Machine. “Such members have no injury and no standing to sue.” Hovsepian v. Apple, Inc., No. 08-5788 JF (PVT), 2009 WL 5069144, at *6 (N.D.Cal.2009); see also Bishop, 1996 WL 33150020, at *5 (“courts have refused to certify class actions based on similar ‘tendency to fail’ theories because the purported class includes members who have suffered no injury and therefore lack standing to sue.”).

Order, at 19.

The opinion also includes an extensive discussion of pleading standards applicable to many different claims for relief predicated on failure to disclose or concealment allegations.

Flat panel price fixing claims by indirect purchasers certified

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United States District Court Judge Susan Illston (Northern District of California) certified a class of indirect purchasers harmed by an alleged global price-fixing conspiracy in the market for Thin Film Transistor Liquid Crystal Display (“TFT-LCD”) panels.  In re TFT-LCD (Flat Panel) Antitrust Litigation, 2010 WL 1286478 (N.D. Cal. Mar 28, 2010).

The opinion explains what a TFT-LCD panel is:

TFT-LCD panels are made by sandwiching liquid crystal compound between two pieces of glass called substrates. The resulting screen contains hundreds of thousands of electrically charged dots, called pixels, which form an image. The panel is then combined with a backlight unit, a driver, and other equipment to create a “module” allowing the panel to operate and be integrated into a television, computer monitor, or other product.

Order, at 1.

The Plaintiffs alleged that during the class period, defendants formed a cartel to interfere with the normal cycle of supply and demand for TFT-LCD panels. According to plaintiffs, defendants agreed on prices, agreed to limit production, and agreed to manipulate the supply of TFT-LCD panels and products so that prices remained artificially high.  But the plaintiffs had quite a bit more to go on than mere allegation.  Thus far, in connection with DOJ investigations that are ongoing, seven corporate defendants in the action have also pled guilty to Sherman Act violations relating to suppressing and eliminating competition by fixing the prices of TFT-LCD panels. Those defendants are Sharp Corporation (CR 08-802 SI); LG Display Co. Ltd. and LG Display America, Inc. (CR 08-803 SI), Chunghwa Picture Tubes, Ltd. (CR 08-804 SI); Hitachi Displays Ltd. (CR 09-247 SI); Epson Imaging Devices Corporation (CR 09-854 SI); and Chi Mei Optoelectronics Corporation (CR 09-1166 SI).

The defendants also sought to strike modifications to the class definition.  The court denied the request:

Defendants have moved to strike the proposed modifications to the class definitions on the ground that plaintiffs should be required to seek leave of Court and/or the consent of defendants in order to modify the class definition. Defendants rely on this Court's decision in Jordan v. Paul Financial LLC, No. C 09-4496 SI, 2009 WL 192888 (N.D.Cal. Jan.27, 2009), in which the Court denied the plaintiff's request, made at the class certification hearing, to withdraw the pending class certification motion in order to substantively redefine the class and conduct additional discovery. However, Jordan is distinguishable in that there the proposed redefinition of the class was significant, and would have required additional discovery. Here, the proposed modifications are minor, require no additional discovery, and cause no prejudice to defendants. The Court DENIES defendants' motion to strike the modified class definitions.

Order, at 5.

The opinion has some interesting comments about damage proof models at certification and conspiracy allegations.

Northern District Court certifies class in misclassification suit against Deloitte & Touche LLP

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United States District Court Judge Susan Illston (Northern District of California) certified a class of salaried employees alleging that they were misclassified as exempt by Deloitte & Touche LLP.  Brady v. Deloitte & Touche LLP, 2010 WL 1200045 (N.D. Cal. Mar. 23, 2010).  The class consists of salaried employees in the audit line of service but who were not licensed accountants.  The Court identified common issues of law and fact as follows:

Common questions of law include whether the professional exemption under California law requires a license for accountants, whether accounting is a “learned profession” under California Wage Order 4-2001, and whether the duties of proposed class members would qualify for administrative exception under California law. Common factual questions include whether defendant's standardized policies and procedures prevented the class members from customarily and regularly exercising discretion and independent judgment with respect to matters of significance, whether defendant categorically classified all class members as exempt, whether defendant required class members to work overtime, along with a host of other questions relating to overtime, meal breaks, timekeeping and pay.

Slip op., at 4.  Generally, the Court maintained a sharp delineation between certification questions and merits issues.

In Alberghetti v. Corbis Corp., District Court denies certification, but not for the usual reasons

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In Alberghetti v. Corbis Corp., 263 F.R.D. 571 (C.D. Cal Jan. 13, 2010), Judge Stephen V. Wilson denied plaintiffs' motion for class certification.  A denial of class certification is not an unusual event.  But, in this case, certification was denied even though the Court found that the plaintiffs satisfied the "commonality," "typicality," and "numerosity" requisites of Rule 23.

In Alberghetti, artists and entertainers filed suit against a photo-licensing company, alleging that it misappropriated plaintiffs' statutory and common law rights of publicity by using plaintiffs' names, images, and likenesses without plaintiffs' consent.  Citing Valentino v. Carter-Wallace, Inc., 97 F.3d 1227 (9th Cir.1996), the Court first concluded that a majority of the class members could not be identified and would have no knowledge that their likenesses had been misappropriated or that their rights would be determined by the action.  The Court concluded that the plaintiffs had not adequately addressed that due process concern.

Second, the Court found fatal conflicts between the plaintiffs themselves and between plaintiffs and their counsel.  "Plaintiffs disagree as to whether injunctive relief is appropriate: one named Plaintiff wants to enjoin all of Defendant's uses of her image; the other named Plaintiff seems to recognize that media-related uses may be beneficial."  Alberghetti, at 577.  The Court also noted a very unusual rift between the plalintiffs and their attorneys: "In the present case, the individual Plaintiffs and their lawyer are all in conflict over whether to seek injunctive relief and how to define the scope of injunctive relief."  Id., at 578.  The plaintiffs and their counsel even disagreed as to who should be included in the class.

Not the usual reasons one sees for a denial of class certification.  It is an interesting opinion for that reason alone.

U.S.D.C. Judge finds Affinity Logistics drivers are independent contractors...under Georgia law

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On March 22, 2010, the United States District Court for the Southern District of California issued its Memorandum Decision and Order finding that drivers for Affinity Logistics were properly classified as independent contractors following a bench trial of the claims of a certified class of delivery truck drivers.  Ruiz v. Affinity Logistics Corp., ___ F.Supp.2d ___, 2010 WL 1038226 (S.C. Cal. Mar. 22, 2010).  Unlike California's strong presumption in favor of and employer-employee relationship, Georgia law apparently includes a presumption that a contract specifying an independent contractor relationship is presumed true.  According to Judge Sammartino, the plaintiffs didn't meet their burden in the bench trial for the certified class of delivery/logistics drivers.

The plaintiffs submitted evidence of highly detailed manuals specifying how work was to be performed.  The Court did not believe defendant's testimony that the detailed manuals were mere "wishes" about how work should be performed.  The problem, according to the Court, was that no real evidence demonstrated that the manuals were given to all drivers or that any of them read the manuals.  Coupled with evidence that drivers could have someone else drive the route for them, this absence of substantial proof of control, according to the Court, doomed plaintiffs' claims.

 

Brinker Watch 2010

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If you were in a coma for a while, Brinker Restaurant v. Superior Court (Hohnbaum) was fully briefed back in October 2009.  And...that's it.  Other than a striking new logo for 2010, there is no news.  I post this only because this blog receives traffic from Brinker searches on an almost daily basis.  I should have added some sort of extra bit to the logo, like "Now with EXTRA uncertainty...."  Back in September 2009 I moved my estimate for an Opinion release date out from June 2010 to August 2010.  The notice of argument would need to issue in April to make that August Opinion release date a near certainty.  Thus, I need to adjust the over-under to October 2010 to equalize the wagering.  Place your bets, folks.

California Supreme Court activity for the week of March 8, 2010

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The California Supreme Court held its (usually) weekly conference today.  Notable results include:

  • A Petition for Review was denied in Davis v. Ford Motor Credit Co. (November 19, 2009) (adopting FTC-based formulation for "unfair" under the UCL and declining to import two-way attorney fee provision into UCL via predicate statute).  See, UCL Practitioner here and here for background 
  • A Petition for Review and Request for Depublication were denied in Keller v. Tuesday Morning, Inc., Inc. (November 4, 2009; pub. ord. December 4, 2009) (appeal of order denying class certification)

in brief: Post-Tobacco II remand case, Pfizer v. Superior Court, is now published

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The shockwaves of Tobacco II continue.  Today, the Court of Appeal (Second Appellate District, Division Three) published its Opinion in Pfizer v. Superior Court (March 2, 2010) after the matter was remanded by the California Supreme Court following the Tobacco II decision.  The Court focused heavily on the length of time and extent of the advertising campaign for Listerine that was at issue in the case.  Less than half a year and sporadic distribution wasn't enough to convince the Court to apply Tobacco II.  So now we have Morgan, et al. v. AT&T Wireless Services, Inc. (September 23, 2009), that found an advertising campaign of around a year to be long enough for a reliance inference, but just under half a year is insufficient.  I suppose those 8-month ad campaigns will be judged on a fact-intensive analysis that looks at whether the ads were continuous and pervasive or sporadic and poorly circulated.

McAdams v. Monier, Inc. opinion after remand is published; most of original opinion remains intact

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In a prior published opinion, McAdams v. Monier, Inc. (May 30, 2007, C051841), as mod. June 25, 2007, reversed a trial court order denying certification of the proposed CLRA and UCL classes.  The gravamen of the complaint was an alleged failure to disclose that the color composition of defendant's roof tiles would erode away, leaving bare concrete, well before the end of the tiles‟ represented 50-year lifetime.  Then, the Supreme Court granted review and deferred the matter (grant and hold) in light of In re Tobacco II Cases (2009) 46 Cal.4th 298 (Tobacco II), pending on the Supreme Court's docket at the time.  After Tobacco II was decided, the Supreme Court remanded with directions to vacate the decision and reconsider in light of Tobacco II.

Today, the Court of Appeal (Third Appellate District) issued its amended Opinion on Remand in McAdams v. Monier, Inc. (February 24, 2010).  But indicating that much of its Opinion would remain unchanged, the Court said, "In doing so, we reiterate our position involving the CLRA, as Tobacco II concerned only the UCL."  Slip op., at 2.  Going on, the Court summarized the new Opinion as follows:

We agree with case law that an “inference of common reliance” may be applied to a CLRA class that alleges a material misrepresentation consisting of a failure to disclose a particular fact. (Massachusetts Mutual Life Ins. Co. v. Superior Court (2002) 97 Cal.App.4th 1282, 1293 (Massachusetts Mutual).)

As for the UCL, we remand for the trial court to determine if the representative plaintiff meets the Proposition 64 standing requirements, as interpreted in Tobacco II. Otherwise, we find the UCL action suitable for class certification.

Consequently, we reverse the trial court's order denying certification of the proposed CLRA and UCL classes. We do so, however, with one proviso as to defining these classes, which we will explain in this opinion: The members of these classes, prior to purchasing or obtaining their Monier roof tile product, had to have been exposed to a statement along the lines that the roof tile would last 50 years, or would have a permanent color, or would be maintenance-free. (See Tobacco II, supra, 46 Cal.4th at p. 324.)

Slip op., at 2-3.

The opinion is extensive in its analysis of both the CLRA and the UCL.  The CLRA discussion is interesting for many reasons, including approving citation of the standing analysis in Chamberlan v. Ford Motor Co. (N.D.Cal. 2005) 369 F.Supp.2d 1138 (slip op., at 17) and clarification (and, to a degree, limitation) of the extent of the misrepresentation/omission discussion in Outboard Marine Corp. v. Superior Court (1975) 52 Cal.App.3d 30 (slip op., at 13-16).

The UCL discussion is also interesting on many levels.  For instance, the Court provides a simple reminder about what happened in Tobacco II: "In Tobacco II, the high court reversed an order that had denied class certification in a UCL lawsuit."  Slip op., at 21.  In other words, it reversed every element of the trial court order and Court of Appeal Opinion necessary to support that order.  Ultimately, the Court applied much of its certification analysis discusses in its CLRA discussion to the UCL claim, concluding that certification was appropriate.  The Court then directed the trial court "to determine whether the representative plaintiff can establish UCL standing as defined in Tobacco II and, if not, whether amendment should be permitted to add a new class representative."  Slip op., at 28.