Even more on Brinker Restaurant Corporation, et al. v. Hohnbaum, et al.

/

Greatsealcal100One measure of a decision's significance is the amount of commentary it generates. By that standard, Brinker Restaurant Corporation, et al. v. Hohnbaum, et al (July 22, 2008) is moving rapidly towards the rarefied air set aside for events like the passage of Proposition 64.  The Complex Litigator has already run several posts on this decision, noting its issuance and summarizing coverage here and here.  To help readers stay on top of the coverage and the dialog, I'm adding to the coverage collection:

I will continue to follow the commentary about Brinker, collecting new articles in further posts as appropriate.  Stay tuned.

Read More

And now for a change of pace...

/

KpandalogoI've worked at Arias Ozzello & Gignac LLP for over three and a half years.  But I have decided to explore new opportunities, and so my time there is over.  I will be working at a rapidly expanding plaintiffs' firm in Los Angeles, Khorrami Pollard & Abir, LLP.  I am looking forward to this new opportunity; I will be one of the attorneys charged with day-to-day management of the class action practice group.  I will continue to handle wage & hour and consumer class actions.  In addition, I will endeavor to develop a supportive appellate practice that can compliment the work of other practice groups.

I will continue to develop The Complex Litigator.  As an aside, while considering the opportunity at KP&A, I was pleased to hear how supportive they were of my blogging efforts.  As of July 28, 2008, I can be reached at:

H. Scott Leviant
Khorrami Pollard & Abir, LLP
444 S. Flower Street, 33rd Floor
Los Angeles, California 90071
Tel:  (213) 596-6000
Fax:  (213) 596-6010

My e-mail address is listed on the contact information page, where it is mildly obfuscated with a small script.

Read More

Brinker Restaurant Corporation, et al. v. Hohnbaum, et al. covered in Daily Journal

/

Greatsealcal100Brinker Restaurant Corporation, et al. v. Hohnbaum, et al. (July 22, 2008) keeps on making news.  Yesterday, I attempted to collect as much coverage as I could in one post.  However, Brinker isn't remotely done making news.  In today's edition of the Daily Journal (July 25, 2008), D. Gregory Valenza asks, "Meal and Break Class Actions: On the 'Brink' of Extinction?"  (Subscription required.)  Mr. Valenza's article follows closely on the heels of a July 23, 2008 article by Daily Journal Staff Writer Pat Broderick, which briefly summarized the core of the Brinker decision.

Mr. Valenza's analysis is substantially more thorough than the July 23, 2008 article, but it is, essentially, a further summary of the Court's primary holdings.  While the article discusses several sources of law at issue in the Brinker decision, Mr. Valenza doesn't delve into the competing policies that are suggested but left unresolved by that opinion.  In fact, no commentator has yet addressed the full set of economic incentives at play within and without the Brinker world view of wage & hour class actions.  The Brinker opinion opens the door to this analysis but fails to step through.  Instead, the Court picks one of many economic incentives at work to justify its conclusion:  "It would also create perverse incentives, encouraging employees to violate company meal break policy in order to receive extra compensation under California wage and hour laws."  (Slip op., at p. 44, quoting Brown v. Federal Express Corp. (C.D.Cal. 2008) ___ F.R.D. ___ [2008 WL 906517 at *6].)  In selectively discussing such incentives, the Court overlooks employer economic incentives to cheat the system and employee economic incentives to adhere to a meal break policy where job loss is the consequence for failure to do so.  These incentives are likely far stronger, due to the amounts at issue, than one employee's desire to obtain an extra hour of pay.

If policy considerations are going to drive the judicial determination of the meal and rest break obligations, the Brinker decision must be viewed with some measure of skepticism until the full picture of incentives is faily presented and fully analyzed.

Read More

More on Brinker Restaurant Corporation, et al. v. Hohnbaum, et al.

/

Greatsealcal100Brinker Restaurant Corporation, et al. v. Hohnbaum, et al. (July 22, 2008) dropped a bit of a bombshell in the busy field of wage & hour class actions, at least judging by the early and numerous reactions.  The Complex Litigator noted the issuance of the opinion shortly after it was posted to the California Courts website.  Other blogs and media outlets followed with commentary and analysis, some of it extensive.  Defense-oriented firms proclaimed it a much-needed victory, while plaintiff-side commentators lamented the irrationality of the decision and the need for speedy review by the California Supreme Court.  To keep up with the dialog, a round-up of coverage, in no particular order, is in order:

  • Wage Law has two posts on the decision.  The first post hits the highlights of the decision.  The second post comments on the Governor's statement in support of the decision, noting that the fact of the Governor's comment, in and of itself, demonstrates that Supreme Court review is needed to "settle an important question of law."
  • Storm's California Employment Law blog offers its own collection of comments from the blawgosphere and internet.
  • California Workforce Resource Blog also has two posts on the Brinker.  The first post is an extensive discussion of the decision, offered from the vantage point of a firm that represents employers.  The second post provides a collection of comments about the decision.
  • What's New In Employment Law offers a decidedly partisan cheer for the Brinker decision, but notes that it is premature to celebrate.
  • The UCL Practitioner, one of the many counsel in Brinker, judiciously limits her comments to a refutation of quotes attributed to her about the decision in the Recorder.  Importantly, Ms. Kralowec takes exception with the attributed statement that the decision "creates an appellate split that likely will ensure Supreme Court review."  Ms. Kralowec notes that she would never be so presumptuous as to declare what the Supreme Court will, in the exercise of its discretion, decide to do about Brinker.
  • California Labor And Employment Law Blog also offers two posts on Brinker.  The first post describes the "favorable" outcome in Brinker.  The second mentions the Governor's pro-Brinker statement.
  • In its customarily business-like fashion, Class Action Defense Blog just explains Brinker in a detailed post.
  • The Recorder article to which UCL Practitioner reacted can be found at Law.com.
  • Market Watch declares that the Brinker decision "reverberates" through workplaces.
  • The Sacramento Bee describes the decision as one backing "flexible" rules on meal breaks.
  • And, finally, Brinker thinks that the case will just proceed back to the trial court with no further interruptions.  Uh huh.

You can now mark your calendars.  The Petition for Review should be on file anywhere between August 22nd and the end of August.

Read More

The little-used defendant class is recognized in Farwell v. Sunset Mesa Property Owners Association, Inc.

/

Greatsealcal100 The Court of Appeal (Second District, Division Eight) penned a brief gem of a comment that will be of interest to class action practitioners (and nobody else on the planet).  In Farwell v. Sunset Mesa Property Owners Association, Inc. (June 18, 2008) ___ Cal.App.4th ___, the Court, probably unnecessarily, went to the trouble of summarizing the long history of defendant class actions (actions in which a class of defendants comprise the class, as opposed to plaintiff class actions, where a class of plaintiffs comprise the class):

“We note here that the adequacy of the representation of a defendant class is not a novel problem and has engaged the attention of the courts and text writers. (See cases and materials collected in 2 Conte & Newberg, Newberg on Class Actions (4th ed. 2002) § 4:60, pp. 375-384.) It is by no means an insurmountable task to identify persons who can serve as representatives of a defendant class, although the dynamics of such a class are different from that of a plaintiff class. (Id., § 4.46, pp. 336-339.)  Indeed, defendant classes have a long history, dating back to 1853.  (Id., § 4.46, p. 338, citing Smith v. Swormstedt (1853) 57 U.S. 288.) California has also long recognized defendant classes. (E.g., Wheelock v. First Presb. Church (1897) 119 Cal. 477, 481-482; Rosicrucian Fellow. v. Rosicrucian Etc. Ch. (1952) 39 Cal.2d 121, 139-140.)

(Slip op., at p. 6.)  As it turns out, the Court of Appeal decided that the Order in question was not appealable.  Thus, the wind-up about defendant class actions is purely of academic interest.

The only problem with this opinion is its title.  Whenever I see that a home owners' association is involved in litigation, I immediately write off the opinion as resulting from a mundane but intractable dispute between a nutball resident (likely with too many cats) and group of self-anointed potentates that enjoy too much their tiny universe of almost boundless power.  And so I learn my lesson.  Occasionally, even home owners' association litigation results in something interesting.  And if it wasn't for the more tolerant eyes of the UCL Practitioner, I would have remained blissfully ignorant of this opinion.

[Via UCL Practitioner]

Read More

Enforcing Mediated Settlement Agreements Post-Simmons v. Ghaderi

/

Greatsealcal100What happens when Evidence Code section 1115, et seq. (the "mediation privilege"), collides with an allegation that an enforceable, oral settlement agreement was reached during a mediation?  The mediation privilege steamrolls the allegation.  This is true even where a party stipulates to events at the mediation, submits evidence of events at the mediation, and then, at trial invokes the mediation privilege for the first time.

In Simmons v. Ghaderi (July 21, 2008), the Supreme Court held "that the Court of Appeal improperly relied on the doctrine of estoppel to create a judicial exception to the comprehensive statutory scheme of mediation confidentiality and that the evidence relating to the mediation proceedings should not have been admitted at trial."  After reciting the policy behind the mediation privilege, and the basic rule of inadmissibility, the Supreme Court set forth the very particular requirements for admissibility of mediation statements:

“Sections 1122 and 1124 specifically lay out exceptions for the admission of evidence produced during mediation. As relevant here, section 1122, subdivision (a)(1) provides that “[a] communication or a writing . . . that is made or prepared for the purpose of, or in the course of, or pursuant to, a mediation or a mediation consultation, is not made inadmissible, or protected from disclosure, by provisions of this chapter if . . . the following condition[] is satisfied: [¶] (1) All persons who conduct or otherwise participate in the mediation expressly agree in writing, or orally in accordance with Section 1118, to disclosure of the communication, document, or writing.”

(Slip op., at p. 8.)  When entering into a mediation of a complex matter or class action, take note of sections 1122 and 1124.  If a settlement is reached, generate a memorandum of understaning on the spot and include a provision allowing disclosure of the document, signed by all parties.

The Supreme Court then spent another 8 or so pages of opinion discussing all the reasons why the mediation privilege is nearly impenetrable, what the Legislature intended, and so on.  A certain momentum (coupled with repetition) was building at this point in the discussion.  Then the Supreme Court discussed the highly limited scenarios where a policy consideration would overcome the privilege (such as where a child's due process right to confront a witness would be impeded).  After all of that, the Supreme Court then said:

“Despite the clear legislative intent, the Court of Appeal majority nonetheless estopped the defendant from invoking mediation confidentiality because she herself used and did not object to plaintiffs’ use of evidence describing the events of mediation.

(Slip op., at p. 16.)  At this point, it doesn't look too good for you if you are the Court of Appeal majority.  Thereafter, the Supreme Court concludes that implied waiver of the mediation privilege does not exist.  (Slip op., at pp. 22-23.)

Again, don't leave a mediation where a settlement was reached without at least memorializing the major terms in writing, with a waiver of the privilge to the full extent necessary to effectuate and enforce the settlement.

Read More

BREAKING NEWS: Meal break class actions dealt major blow in Brinker Restaurant Corporation, et al. v. Hohnbaum, et al.

/

Greatsealcal100The world of wage & hour class actions has, at least for the moment, radically changed.  In Brinker Restaurant Corporation, et al. v. Hohnbaum, et al. (July 22, 2008), the Court of Appeal (Fourth Appellate District, Division One) the Court of Appeal issued the first construction by a Court of Appeal in California on the elements of a number of wage & hour claims, including meal break claims.  But despite recognizing that "mandatory rest and meal breaks have 'have long been viewed as part of the remedial worker protection framework' designed to protect workers' health and safety (Murphy v. Kenneth Cole Productions, Inc. (2007) 40 Cal.4th 1094, 1105, 1113 (Murphy)), the Court of Appeal concluded that employers are not obligated to ensure that meal breaks are taken.  Rather, the employer must merely provide the opportunity for the break.

Cutting to the chase, the Court of Appeal held:

“With these principles in mind, we conclude the class certification order is erroneous and must be vacated because the court failed to properly consider the elements of plaintiffs' claims in determining if they were susceptible to class treatment. Specifically, we conclude that (1) while employers cannot impede, discourage or dissuade employees from taking rest periods, they need only provide, not ensure, rest periods are taken; (2) employers need only authorize and permit rest periods every four hours or major fraction thereof and they need not, where impracticable, be in the middle of each work period; (3) employers are not required to provide a meal period for every five consecutive hours worked; (4) while employers cannot impede, discourage or dissuade employees from taking meal periods, they need only provide them and not ensure they are taken; and (5) while employers cannot coerce, require or compel employees to work off the clock, they can only be held liable for employees working off the clock if they knew or should have known they were doing so. We further conclude that because the rest and meal breaks need only be "made available" and not "ensured," individual issues predominate and, based upon the evidence presented to the trial court, they are not amenable to class treatment. Finally, we conclude the off-the-clock claims are also not amenable to class treatment as individual issues predominate on the issue of whether Brinker forced employees to work off the clock, whether Brinker changed time records, and whether Brinker knew or should have known employees were working off the clock. Accordingly, we grant the petition and order the superior court to vacate its order granting class certification and enter a new order denying certification of plaintiffs' proposed class.

(Slip op., at pp. 4-5.)

I will post more later on this opinion, after I have chance to evaluate it further.  For now, courts with pending meal break, rest break and off-the-clock claims should expect for the inevitable onslaught of paper that this will generate.

Read More

"Google Sued for Selling Ads on Parked Domains"

/

According to InformationWeek, and verified by Kimberly Kralowec, a class-action lawsuit was filed against Google in a U.S. District Court (N.D.Cal., San Jose, California), for the alleged sale of "low quality" ads on parked domains and error pages.  (Thomas Claburn, Google Sued For Selling Ads On Parked Pages (July 15, 2008) www.informationweek.com.)  The plaintiff is represented by attorneys from the San Francisco-based law firm of Schubert Jonckheer Kolbe & Kralowec.  One of the plaintiff's attorneys, Kimberly Kralowec, is the author of the established and widely-read blog, The UCL Practitioner.  Ms. Kralowec was quoted throughout the InformationWeek article:

“In seeking class certification for the lawsuit, Levitte's attorneys hope to represent other aggrieved Google advertisers. "We believe it's a problem that affects all [Google's] advertisers equally," said Kimberly Kralowec, partner at the law firm representing Levitte.

The matter is assigned to Judge Ware, who has some experience with the seedy underbelly of Internet-related litigation.  Specifically, I refer to the sprawling sex.com domain ownership litigation that Judge Ware still has the pleasure of handling to this day.  I actually had some limited part in that case, successfully dismissing an ancillary complaint associated with that litigation, as the case stretched out like an octopus in an effort to find sources for damages; the central defendant absented himself from the jurisdiction of the court to a safe, foreign residence.

Electonista, a blog predominantly about gadgets, has incorrectly identified the firm of Kabateck Brown Kellner as the filing firm in the Levitte v. Google case.  In fact, Kabateck Brown Kellner filed a similar class action suit six days later, also in the Northern District of California, on behalf of plaintiff RK West, Inc.  I would assume that the later-filed matter will be related to the case before Judge Ware.

Google, of course, has no comment.  In light of the recent Viacom v. YouTube discovery ruling, one wonders what electronic databases related to the AdSense program will be fair game in this class action suit.

You can view the Levitte Complaint (filed by Ms. Kralowec, et al.) here.

You can view the RK West, Inc. Complaint (filed by Kabateck Brown Kellner) here.

Read More

Indispensable new decision about indispensable parties: Tracy Press, Inc. v. Superior Court

/

Greatsealcal100There is a fair body of jurisprudence in the federal courts about what constitutes an "indispensable party" to an action.  It's not all that surprising, given how finicky those federal courts are about having jurisdiction.  In California, on the other hand, where jurisdiction is, in kind terms, flexible, you have a tougher time finding authority about indispensable parties (a person or entity whose presence is necessary to adjudicate the action).

The Court of Appeal (Third Appellate District) recently had an opportunity to at least discuss the concept of indispensable parties.  In Tracy Press, Inc. v. The Superior Court of San Joaquin County (July 16, 2008), the Court considered whether the failure to name a city councilmember as a party to the Petition for Writ of Mandate before the Court of Appeal was a fatal defect to that Petition, given that the councilmember had been a party to a petition filed in the Superior Court.

First, the Court considered whether the omitted party could be overlooked as a defect in the pleading.  The Court concluded that such an omission could not be disregarded as a defect, due to the possibility that the outcome would affect the absent party's rights:

“Failing to name an individual as a real party in interest in the pleading that initiates the action is not a defect.  It does not render the pleading defective; it merely defines the parties, leaving out the individual not named. . . .

Issuing an order requiring Tucker to act in a mandamus proceeding in which she was not named and has not appeared would affect Tucker’s substantial rights.  This court obtains jurisdiction to enter an order against a person only if the person is named as a party and duly served with notice of the action.  “[T]he rights of a person cannot be affected by a suit to which he is a stranger.”  (Whitney v. Higgins (1858) 10 Cal. 547, 551.)

(Slip op., at pp. 7-8.)

Having determined that Tucker wasn't a party to the action and couldn't be deemed a party to the action, the Court then considered whether Tucker was an indispensable party, defining the concept and the consequences:

“A person must be made a party of a proceeding if “(1) in his absence complete relief cannot be accorded among those already parties or (2) he claims an interest relating to the subject of the action and is so situated that the disposition of the action in his absence may (i) as a practical matter impair or impede his ability to protect that interest or (ii) leave any of the persons already parties subject to a substantial risk of incurring double, multiple, or otherwise inconsistent obligations by reason of his claimed interest.”  (Code Civ. Proc., § 389, subd. (a).)  If such a person cannot be joined, “the court shall determine whether in equity and good conscience the action should proceed among the parties before it, or should be dismissed without prejudice, the absent person being thus regarded as indispensable.  The factors to be considered by the court include:  (1) to what extent a judgment rendered in the person’s absence might be prejudicial to him or those already parties; (2) the extent to which, by protective provisions in the judgment, by the shaping of relief, or other measures, the prejudice can be lessened or avoided; (3) whether a judgment rendered in the person’s absence will be adequate; (4) whether the plaintiff or cross-complainant will have an adequate remedy if the action is dismissed for nonjoinder.”  (Code Civ. Proc., § 389, subd. (b).)

(Slip op., at p. 8-9.)  Importantly, the Court explained that the absence of an indispensable party does not deprive a Court of jurisdiction over the matter:

““‘Failure to join an “indispensable” party is not “a jurisdictional defect” in the fundamental sense; even in the absence of an “indispensable” party, the court still has the power to render a decision as to the parties before it which will stand.  It is for reasons of equity and convenience, and not because it is without power to proceed, that the court should not proceed with a case where it determines that an “indispensable” party is absent and cannot be joined. [Citation.]’  [Citation.]”  (Save Our Bay, supra, 42 Cal.App.4th at p. 692, quoting Sierra Club, Inc. v. California Coastal Com. (1979) 95 Cal.App.3d 495, 500.)

(Slip op., at p. 10.)  Further, the Court retains discretion as to whether to dismiss the action for failure to name the indispensable party.  (Slip op., at p. 10-11, citing Kaczorowski v. Mendocino County Bd. of Supervisors (2001) 88 Cal.App.4th 564, 568.) 

Ultimately, the Court decided that it could not issue an Order that would potentially conflict with an Order of the Superior Court granting protection to a party not present before the Court of Appeal. Unfortunately, Tracy Press, Inc. never had its Petition heard on the merits.  It probably lost the Petition on the procedural issue due to a mistake in the formatting of its Petition.  It appears from the Opinion that Tracy Press, Inc. failed to designate "Real Parties in Interest" in its Petition:

“Tracy Press claims that it failed to name any real party in interest and that the clerk of this court added the City as a real party in interest.  The City makes no argument that it was not properly named in the petition, only that Tucker, an indispensable party, was not named.

(Slip op., at p. 5, fn. 6.)

Read More

COMPLEX TECH: Adobe Acrobat 9 Pre-Review

/

Box_acrobat_9_pro_112x112I'm up to at least my chin in a major "project" that I will include in an announcement here in a week or so.  That "project" has slowed down my evaluation of Acrobat 9.  I'm just getting started with my testing (in fact, I'm examining two versions of Acrobat 9, the mid-tier Acrobat 9 Pro, and the full-featured Acrobat 9 Pro Extended).

I'm impressed with the new feature set that I've had a chance to quickly inspect thus far, so I wanted to mention a few of the enhancements that I will review in detail in a further post:

  • Flash runtime in now included in Acrobat 9.  In the Pro Extended package, this addition will permit users to import Microsoft Powerpoint presentations, convert them into a flash "movie" and embed them in a pdf.  Viewers will be able to watch the flash version of the presentation. 
  • Acrobat 9 adds a concept called Portfolios, which are, essentially, multi-document binders that can include non-pdf documents within the binder.  A portfolio can include and preview word and excel documents, for example.  But the encapsulating portfolio is a "pdf," making it easy to share online or via e-mail (which often blocks zip files). 
  • Transparent Document co-navigation: using conferencing tools, users can jointly examine and navigate through a document.  In other words, each user can remotely flip through pages to focus on different parts of a document. 
  • The Forms Tool scans documents for what appear to be fields.  If the automatic scanning misses a field, the tool allows the user to create and name other fields.  Where appropriate, you can collect completed form responses through acrobat.com. 
  • The Split Document tool allows for the division of documents by page numbers, by bookmarks, or by file size limitation.

This in not even an exhaustive list of new features that would likely interest attorneys (but they are features that interested me immediately, so they received first looks).  There are improvements to bates numbering, and quasi-EDD tools.  For example, individual e-mails can be collected into a portfolio.  As I complete my testing of various new features, I will post articles with detailed comments about the effectiveness and usability of Acrobat 9's new features with a legal twist.

Read More