Gentry v. Superior Court (Circuit City Stores, Inc.) (2007) 42 Cal.4th 443 is officially the law of this land (California).

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On March 31, 2008, the United States Supreme Court denied a Petition for a Writ of Certiorari in the Petition encaptioned Circuit City Stores, Inc. v. Gentry, Supreme Court Case No. 07-998.  The actual question posed in Gentry was whether lower courts had incorrectly enforced an arbitration clause barring class actions.  While the California Supreme Court didn’t determine the enforceability of the provision, it did remand the matter for further unconscionability analysis.  In doing so, the Gentry decision offered one of the strongest statements (certainly in recent years) in favor of California’s class action device, especially in wage & hour cases:

“ ‘Frequently numerous consumers are exposed to the same dubious practice by the same seller so that proof of the prevalence of the practice as to one consumer would provide proof for all. Individual actions by each of the defrauded consumers is often impracticable because the amount of individual recovery would be insufficient to justify bringing a separate action; thus an unscrupulous seller retains the benefits of its wrongful conduct. A class action by consumers produces several salutary by-products, including a therapeutic effect upon those sellers who indulge in fraudulent practices, aid to legitimate business enterprises by curtailing illegitimate competition, and avoidance to the judicial process of the burden of multiple litigation involving identical claims. The benefit to the parties and the courts would, in many circumstances, be substantial.’ ” ( Discover Bank, supra, 36 Cal.4th at p. 156, 30 Cal.Rptr.3d 76, 113 P.3d 1100.)

(Gentry, at pp. 453.)

First, individual awards in wage and hour cases tend to be modest. In addition to the fact that litigation over minimum wage by definition involves the lowest-wage workers, overtime litigation also usually involves workers at the lower end of the pay scale, since professional, executive, and administrative employees are generally exempt from overtime statutes and regulations.

(Gentry, at pp. 457-458.)

A second factor in favor of class actions for these cases, as noted in Bell, is that a current employee who individually sues his or her employer is at greater risk of retaliation. We have recognized that retaining one’s employment while bringing formal legal action against one's employer is not “a viable option for many employees.”

(Gentry, at p. 459.)

Third, some individual employees may not sue because they are unaware that their legal rights have been violated. The New Jersey Supreme Court recently emphasized the notification function of class actions in striking down a class arbitration waiver in a consumer contract: “[W]ithout the availability of a class-action mechanism, many consumer-fraud victims may never realize that they may have been wronged. As commentators have noted, ‘often consumers do not know that a potential defendant’s conduct is illegal. When they are being charged an excessive interest rate or a penalty for check bouncing, for example, few know or even sense that their rights are being violated.’ ” ( Muhammad v. County Bank of Rehoboth Beach, Delaware (2006) 189 N.J. 1, 912 A.2d 88, 100.)

(Gentry, at p. 461.)

We also agree with the Bell court that “class actions may be needed to assure the effective enforcement of statutory policies even though some claims are large enough to provide an incentive for individual action. While employees may succeed under favorable circumstances in recovering unpaid overtime through a lawsuit or a wage claim filed with the Labor Commissioner, a class action may still be justified if these alternatives offer no more than the prospect of ‘random and fragmentary enforcement’ of the employer’s legal obligation to pay overtime.”

(Gentry, at p. 462.)

Circuit City makes a number of arguments that we have already concluded lack merit. As in Discover Bank, we again reject the “unsupported assertions [of some courts] that, in the case of small individual recovery, attorney fees are an adequate substitute for the class action or arbitration mechanism. Nor do we agree ... that small claims litigation, government prosecution, or informal resolution are adequate substitutes.”

(Gentry, at p. 464.)  Gentry’s strong policy statements concerning at least wage & hour class actions all but declared the use of the class action device superior to any other means of enforcing California’s wage & hour laws.  The Gentry decision is available for free through FindLaw, so long as you create a free account first.  Thanks to The UCL Practitioner for noting the denial of the Petition.

UPDATE:  The significance of Gentry is confirmed by the press coverage a simple certiorari denial is receiving.  (See, e.g., Wage Law discussing Gentry.)

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Is there an unintended gap in California’s case coordination statutes?

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Most civil litigation practitioners are at least vaguely aware that multiple actions “involving a common question of fact or law” can be coordinated before a single court for unified proceedings (for purposes of this discussion, “coordination” has a very specific meaning and refers to the process set forth in the Civil Code).  However, the coordination procedure varies, depending upon the nature of the actions to be coordinated, and the statutory scheme arguably contains an ambiguity that may cause uncertainty as to which procedure should be invoked.


Coordination is governed by California Code of Civil Procedure sections 403, 404 and 404.1 (all further statutory references are to the California Code of Civil Procedure).  Section 403, discussing the procedure for non-complex cases, provides, in part:

A judge may, on motion, transfer an action or actions from another court to that judge's court for coordination with an action involving a common question of fact or law within the meaning of Section 404. The motion shall be supported by a declaration stating facts showing that the actions meet the standards specified in Section 404.1, are not complex as defined by the Judicial Council and that the moving party has made a good faith effort to obtain agreement to the transfer from all parties to each action.

(Section 403, emphasis added.)  Section 404, setting forth the coordination procedure for complex actions, provides:

When civil actions sharing a common question of fact or law are pending in different courts, a petition for coordination may be submitted to the Chairperson of the Judicial Council, by the presiding judge of any such court, or by any party to one of the actions after obtaining permission from the presiding judge, or by all of the parties plaintiff or defendant in any such action. A petition for coordination, or a motion for permission to submit a petition, shall be supported by a declaration stating facts showing that the actions are complex, as defined by the Judicial Council and that the actions meet the standards specified in Section 404.1. On receipt of a petition for coordination, the Chairperson of the Judicial Council may assign a judge to determine whether the actions are complex, and if so, whether coordination of the actions is appropriate, or the Chairperson of the Judicial Council may authorize the presiding judge of a court to assign the matter to judicial officers of the court to make the determination in the same manner as assignments are made in other civil cases.

(Section 404, emphasis added.)  In short, coordination of complex actions is determined by the Judicial Council, not any trial court to which one of the complex actions is assigned.  As background information only, Section 404.1 describes the factors that are considered in any instance where coordination of actions is sought:

Coordination of civil actions sharing a common question of fact or law is appropriate if one judge hearing all of the actions for all purposes in a selected site or sites will promote the ends of justice taking into account whether the common question of fact or law is predominating and significant to the litigation; the convenience of parties, witnesses, and counsel; the relative development of the actions and the work product of counsel; the efficient utilization of judicial facilities and manpower; the calendar of the courts; the disadvantages of duplicative and inconsistent rulings, orders, or judgments; and, the likelihood of settlement of the actions without further litigation should coordination be denied.

The included emphasis in the sections quoted above highlights the ambiguity in this statutory scheme.  Section 403 specifies the authority of a trial court to coordinate two or more non-complex actions, as “complex” is defined by the Judicial Council in California Rules of Court, rule 3.400.  Section 404 specifies the process for coordinating two or more complex actions.  Omitted from this scheme is the situation where one complex matter and one or more non-complex matters are pending in different courts.  Such a scenario might arise if a class action and multiple individual actions, all asserting the same misconduct, are simultaneously pending in different courts.  Under the literal language of Sections 403 and 404, one cannot assert either that the actions are not complex (Section 403) or that the actions are complex (Section 404).


I am unaware of an answer to this potential ambiguity. It is my belief that a non-complex action can be coordinated into a complex action without petitioning the Judicial Council, so long as the Judicial Council has not already acted on a petition affecting the complex matter.  This interpretation seems consistent with the intent that the coordination of non-complex matters is appropriately supervised by trial court judges but the coordination (and subsequent transfer) of a complex action requires the oversight provided by the Judicial Council Process.  I had hoped in one case to test this proposition, but the matters were transferred before I could do so.  Any takers?


Further resources:  visit Justia.com or California’s Official California Legislative Information site for free access to California’s complete Code of Civil Procedure.

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Help for navigating the Central District's civil e-filing requirements

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The United States District Court for the Central District of California has Ordered that, as of January 1, 2008, all civil cases must utilize the Central District's e-filing system.  Also, that truck receding into the distance was hauling turnips.

Having attempted to navigate the treacherous waters of e-filing in the Central District, I can say with much earnestness that a few more e-filing usability focus groups couldn't have hurt.  But I can suggest a solution to anyone strugling through the less-than-friendly e-filing approach adopted by the Central District.  At www.efilecdc.com, Martin W. Anderson has made available, for free, his guidebook entitled Anderson on Civil E-Filing in the Central District of California.  I've used his guidebook, and it is, if nothing else, a tremendous timesaver.  Mr. Anderson's site also provides visitors with the opportunity to provide an e-mail address for notification when the manual is updated.  Anderson on Civil E-Filing: don't upload without it.  My thanks to Kimberly Kralowec's exceptional blawg, The UCL Practioner, for publicizing this resource in several recent posts, including her recent post entitled Updates to Civil E-Filing Manual now available online.

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"Class" missing in Daily Journal column on class actions

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Yesterday, while perusing the Daily Journal's March 20, 2008 issue, I stumbled across a Forum column that addressed a topic near and dear to me: class action law in California.  As an aside, that column did a fine job at evoking sufficient scorn to push me out onto the dance floor with the rest of the blawgers.  Entitled "No Class," John H. Sullivan purports to explain why California has one of the five worst class action laws in the United States (evidently, the characteristic necessary to achieve that honor is the relative effectiveness of California's class action law).  Some of that article's assertions are noteworthy for their disconnect with the facts:

Lest you think we are looking at only a few icons gone bad, note that when it comes to plaintiff-hiring, San Diego's Lerach claimed that "Everybody was paying plaintiffs ... it was an industry practice."

Mr. Sullivan would have one believe, on the strength of an assertion by the discredited Bill Lerach, that it is common practice for class action lawyers to pay to find plaintiffs.  Setting aside the fact that the "industry" referred to by Mr. Lerach was probably the narrow field of shareholder derivative class actions, Mr. Sullivan's assertion about plaintiff-hiring is just that, an assertion, with little to back it up.  Instead, this manipulation of the truth sets the tone for what is a political agenda posing as a reasoned editorial, and I'm offended by it.  I've litigated class actions as an attorney since 1999, and for years before that as a clerk.  I've never "hired" a plaintiff.  I've never known another class action attorney that did so.  I've personally enjoyed several white-knuckle rides as I've hoped that a plaintiff would step forward to spearhead a class when the initial lead plaintiff had second thoughts.  Ad hominem commentary about all plaintiff-side class action practitioners has no place in a debate about how California implements its class action procedural mechanism.

[I]t's not surprising that the plaintiffs' class action lawyers, once they lock onto their defendant targets, aim to win every possible procedural advantage over their adversaries and fight on every front to preserve that edge.

And other lawyers don't?  Recall the defense bar's victory when it successfully engineered the passage of Proposition 64, which extracted a few teeth from California's Unfair Competition Law (Bus. & Prof. Code § 17200, et seq.).  If you take Mr. Sullivan literally, it is (1) bad to zealously represent your client, and (2) only plaintiff-side class action attorneys actually accomplish that goal.

In California, only the plaintiff has a right to appeal [a decision regarding] class certification.  For plaintiffs' lawyers, this is a wonderful double standard.

Let's review how class actions work.  When class certification is denied, the bulk of the claim is essentially extinguished.  Absent class members must decide whether to file a tidal wave of individual suits.  Allowing an appeal of the denial of certification is comparable to the right of appeal following the termination of a claim.  A defendant, on the other hand, retains the right to challenge a claim on the merits after certification is granted.  If the defendant prevails, that victory is enforceable against the entire class.  If the defendant loses on the merits after certification, the defendant can then challenge both the certification order and the order on the merits on appeal.  And if the defendant can't beat certification and doesn't prevail on the merits and can't convince a court of appeal that any error of significance was responsible for the result below, then the system operated correctly.

The alternative is what the Civil Justice Association of California wants: the immediate cessation of litigation in the trial court upon the issuance of an order granting or denying certification.  And the class that may have been victimized by a defendant gets to sit and wait several more years for recompense.

California has the fifth-worst class action law in the country.

According to whom?  The U.S. Chamber's Institute for Legal Reform.  In other words, if it in any way facilitates the assertions of rights against defendant businesses, it must, by definition, be bad and need fixin'.

Senate Bill 1202, authored by Sen. Tom Harman, will help ensure that settlement funds are not misused.  The bill allows judges to withhold part of the plaintiff's attorney's fees until class members have been contacted and have received their share of the settlement.

Why is it reasonable for attorneys in every other area of practice to expect payment for their services upon completion of the professional service?  Certainly the attorneys representing the defendant in a class action will expect to be paid, even though they were unsuccessful in opposing certification or defending against the merits.  SB 1202 is unnecessary and creates more problems than it solves.  First, judges have wide latitude.  Some already hold back a portion of fees as an incentive to wrap up a class action.  Second, what happens when the class counsel can't locate every class member?  Answer:  class counsel will get to spend additional, uncompensated time, pleading with the trial court for their earned fees on the ground that they have made reasonable efforts to locate class members.

The 2005 federal Class Action Fairness Act has begun to shift national class actions into federal courts, but plaintiffs' lawyers have strong incentives to avoid the act if there is any way they can file and keep their case before California judges and juries.

Once again, more half-truths to create the impression of unfairness.  What is true in California is true in most states:  plaintiffs prefer to be in state court and defendants want to be in federal court.  It is true for individual actions just like it is for class actions.  That CAFA was not the panacea hoped for by the defense (business) bar does not call into question California's class action procedural device.  And anyone that has some experience with CAFA removal knows that federal judges are doing everything in their power to find ways to justify remand to state courts.

Statistics also make great fodder for pressing an agenda.  Consider the following passage in Mr. Sullivan's column:

The study of six major California counties, commissioned by the Civil Justice Association of California, detected 3,400 class actions filed in superior courts from July 2004 through June 2007.  That's nearly five new class action suits every day the courthouses are open.

Viewed in isolation, those numbers sound shocking.  What will our system of justice do under the weight of so many class actions?  It likely won't notice them, as suggested by these additional statistics from the 2007 Court Statistics Report Introduction:

Civil filings totaled 1,418,490, and civil dispositions totaled 1,268,153 in FY 2005–2006.

One and one-half million civil filings in a one year period in California.  Would our justice system be better off in California if any significant number of absent class members had to file individual suits to assert their rights?

Our unbalanced rules are sending a message every day that California is a dangerous place to hire employees and do business.

If a business abides by the law, it won't have anything of consequence to fear, at least from class actions.  Our high state taxes send the message that businesses (and residents) aren't welcome.  Our inflated real estate prices don't help.  If the Civil Justice Association of California wants to do something good for business, it can start lobbying for budgetary responsibility in Sacramento, followed by tax rate reductions for all Californians.

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The Zero post

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You might assume that someone who goes to the trouble to devise a domain name, secure that domain, decide on a blogging engine and then create a blog would have their first blog post already in mind.  You'd be wrong.  It's not easy deciding how one's nascent legal blog should begin its life.  Thus, I let my internal irritation meter drive my decision.  Surprisingly, it didn't take all that long (thank you Daily Journal), and tomorrow I will publish my first post of topical significance.

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