Travelers Casualty v. Brenneke: How to serve a recalcitrant defendant

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Ninth Circuit SealJust because your case is complex doesn’t mean that you don’t have to worry about ordinary tasks . . . like serving parties. While The Complex Litigator doesn’t spend much time covering civil procedure issues outside of the class action device, there are exceptions to almost every rule, as with a recent Ninth Circuit decision regarding service of process. In Travelers Casualty and Surety Company of America v. Brenneke (January 9, 2009), the Ninth Circuit examined the nature of “person service” when a defendant studiously avoids service of process.

Describing the disputed service of process, the Court said:

“ In connection with its motion to enter default, Travelers submitted the affidavit of Phil Sheldon (“Sheldon”), a process server for Barrister Support Service, which Travelers had hired to effectuate service upon Brenneke. Sheldon stated that he had experienced “significant difficulty” in serving Brenneke in the past, and that he was aware of other process servers’ having experienced similar difficulty. He also indicated that he had successfully served legal documents personally on Brenneke on prior occasions. As to the current matter, he stated that he had made four separate visits to Brenneke’s home between March 17, 2006 and April 2, 2006, attempting to accomplish service. No one answered the door or intercom even though, on more than one occasion, there were two or three vehicles in the driveway. On both his first and third visits to that residence, Sheldon left a note for Brenneke to contact Barrister Support Service, but he did not do so. During what was apparently the fifth attempt, on the evening of April 2, 2006, an adult male answering to the name of Paul Brenneke responded to Sheldon’s ringing on the intercom at Brenneke’s residence. When Sheldon identified himself as a process server, that person responded “Oh great,” but never opened the door. However, Sheldon observed Brenneke standing behind the window next to the front door watching him. Sheldon then held the summons and complaint out towards the window, and announced in a loud voice “You are served.” Sheldon further indicated that Brenneke watched him place the documents on the doorstep. Sheldon thereafter completed a proof of service form.

(Slip op., at p. 166.) I find this sort of behavior very entertaining. Many years ago, I was counsel in a matter where one defendant jumped in a car and locked the door to avoid service. The papers were left on the windshield. I was successful in arguing that “personal service” had been effectuated.

District Court Judge George H. Wu, sitting by designation, delivered the opinion of the Court.  As an aside, the Ninth Circuit has made viewing new opinions very easy through their website with an embedded PDF viewer.

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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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Sprint settles early termination fee (ETF) claims and topclassactions.com helps consumers get their share

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The Complex Litigator previously reported on Sprint's win before a jury and loss in a related Court trial on claims arising from Sprint's practice of charging Early Termination Fees (ETFs) to consumers.  Now, Sprint has apparently reached a settlement of those claims, and TopClassActions.com is provinding consumers with a helping hand.  Visit their page explaining the Sprint settlement, and you will be walked through the claim-form process with loving care.

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Acrobat 9: The 10,000 mile review - Part 1

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Box_acrobat_9_pro_112x112It has been a long time coming, but The Complex Litigator has completed its review of Adobe’s latest version of Acrobat, which is version 9. Because of the length of this review, it will be posted in separate parts, over several days.

The Family of Acrobat 9 Products

According to Adobe, the Adobe Acrobat 9 product line includes 4 distinct products: Adobe Reader, Adobe Acrobat 9 Standard, Adobe Acrobat 9 Pro, and, at the top of the line, Adobe Acrobat 9 Pro Extended. Adobe Reader remains the free program used to view, as opposed to create, digital documents in the pdf format. Adobe Reader is not discussed in this review. As for the rest of the product line, I will focus this review on features that are more likely to be of interest to legal practitioners.

Executive Summary

Everyone is busy. I know that I often jump to the end of product reviews to get to the heart of the reviewer’s conclusions and findings. To make things simple for everyone, I am putting my concluding thoughts at the top of the review. Readers who want more detail about certain features can read through the series of posts that will discuss my impressions of this software.

I whole-heartedly recommend that attorneys using Acrobat upgrade to Acrobat 9. I also strongly recommend that you invest, at minimum, in the Pro edition if you haven’t yet jumped in as an Acrobat user. All variations of the 9.0 Acrobat series add tools that are valuable additions to law office workflow. For example, the ability to split large pdf files by file size, pages, or bookmarks cannot be properly valued until you or your support team have attempted to upload a 50MB pdf file to a court electronic filing system with a 10MB (or smaller) size limit on file sizes. Other features, such as shared document reviews with remote parties via acrobat.com, are likely to be adopted first by the tech-savvy but deserve your attention.

At the higher end of the product line, Acrobat 9 Pro offers additional tools of interest to legal professionals, such as advanced support for the new PDF Portfolio feature. This tool allows the creation of what amounts to an electronic document collection, with cover pages and layout templates. The collection is encapsulated in a PDF wrapper, like a zip file, but with interactive properties for the recipient. In addition, the PDF Portfolio tool can be used to organize and review case documents as a cost-effective alternative to major case management software, such as Concordance or Summation.

Acrobat 9 Pro Extended offers, as a major feature, the ability to covert PowerPoint presentations into a flash-embedded PDF document, complete with narration if desired. The value of this approach is that presentations can be made available online to clients, potential clients, or other professionals as a downloadable PDF that will play the presentation in the newest version of Reader. The incremental cost of choosing to upgrade to Pro Extended is minimal, and I would just spend the extra $40 or so for the Extended version upgrade. If you do not presently have Acrobat, consider whether the PowerPoint conversion feature matters in your professional activities as you choose between the $399 Pro version or the $629 Pro Extended edition.

I also recommend Acrobat 9 for the massive load time improvement. While I will discuss this issue in detail below, it is sufficient for this summary to note that the load time in my experience is probably three times faster. Slow-loading software is irritating. Acrobat 9 significantly corrected a source of irritation that had existed with several of the prior version of Acrobat.

My one word of caution is a consequence of the many features in all versions of Acrobat 9. If you’ve never used Acrobat, jumping into version 9 would probably seem like using MS Word 2007 as your first word processor or Excel 2007 as your first spreadsheet program. Acrobat 9 is a mature software product. I could not begin to relate the number of option settings for various features through Acrobat 9. I suspect that this program would seem somewhat overwhelming to a new user interested in moving beyond default settings. For example, a new user would not easily discover how to activate the ClearScan text smoothing feature when running OCR on a document (Go to Document>OCR Text Recognition>Recognize Text Using OCR, then select Edit and choose ClearScan option). There is nothing that can be done to eliminate this issue. Acrobat 9 is organized well, and has good support features built into the product. Beyond that, you may wish to explore Adobe’s Acrobat for Legal Professionals blog for legal industry-specific tips.

Highly Recommended by The Complex Litigator.

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Comcast (ab)using oligopoly power to interfere with movie downloading

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Comcast came under fire in April 2008 for throttling BitTorrent traffic on their network, even when network congestion was not an issue.  (Daniel A. Begun, The FCC v. Comcast, Round 2 (April 25, 2008) hothardware.com.)  BitTorrent peer-to-peer traffic describes distributed download services where a computer requesting a file (often a large file, like a movie) both downloads tiny pieces of the file from multiple users on the internet and provides other downloaders with access to those same pieces.  The argument from Comcast was that torrent traffic was all illegal content, such as pirated software and movies, but that is no longer true.

Comcast backed off of its packet content-based throttling plan, but phase 2 is here.  "The new system, which is now in place, monitors the amount of downstream traffic a user consumes and not what that traffic is actually composed of."  (Daniel A. Begun, Comcast's New Network Throttling Now In Place (January 6, 2009) hothardware.com, via digg.com.)

Comcast would like consumer to believe that this throttling is about protecting its network from bandwidth hogs, like large file downloaders.  What is more likely the motivation for this second effort at throttling is the desire to keep its the lucrative video-on-Demand service free from competition created by other download services, like Netflix.  This is just more anti-competitive behavior from your friendly neighborhood cable company.  Don't forget that comcast also imposes a 250GB monthly cap on users.  A high definition movie could consume 5-10GB of capacity in one download.  These moves are intended to discourage customers from looking beyond Comcast for video-on-demand.  Somebody ought to do something about this behavior.

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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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The Trial Practice Tips Weblog: another blog worth bookmarking

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It has been a while since this site's Blogs of Note section saw an update.  That is a reflection of the demands of work and life, and not a comment on the state of the legal blogosphere, which is exploding with new content.  However, one long-established blog (heading into its sixth year) couldn't escape the recognition that it was due forever:  The Trial Practice Tips Weblog.

Class action litigation is, ultimately, about bringing a case to trial  (though it happens rarely).  To get to that mythical trial, a great deal of preparation is required.  The Trial Practice Tips Weblog offers advice that applies to all phases of civil litigation and encourages lawyers to prepare smarter and better.  Congratulations to The Trial Practice Tips Weblog for its longevity and quality.

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Judges in Los Angeles county will likely lose over $40,000 in county benefits after taxpayer challenge

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Greatsealcal100Salaries for judges in California are "prescribed" by the legislature via constitutional mandate. In Sturgeon v. County of Los Angeles (October 10, 2008) the Court of Appeal (Fourth Appellate District, Division One) all but declared unlawful a substantial benefits package provided by Los Angeles county to its superior court judges. The Court of Appeal reversed a summary judgment granted to Los Angeles county in a taxpayer suit challenging the payments by Los Angeles county. The Court summarized the conclusion:

“Section 19, article VI of the California Constitution requires that the Legislature "prescribe compensation for judges of courts of record." The duty to prescribe judicial compensation is not delegable. Thus the practice of the County of Los Angeles (the county) of providing Los Angeles County superior court judges with employment benefits, in addition to the compensation prescribed by the Legislature, is not permissible. Accordingly, we must reverse an order granting summary judgment in favor of the county in an action brought by a taxpayer who challenged the validity of the benefits the county provides to its superior court judges.

(Slip op., at pp. 1-2.) The benefits in question are not insubstantial:

“In sum, in addition to the salary, benefits and retirement prescribed by the Legislature, in fiscal year 2007 each superior court judge in Los Angeles was eligible to receive $46,436 in benefits from the county. This amount represented approximately 27 percent of their prescribed salary and cost the county approximately $21 million in fiscal 2007.

(Slip op., at p. 3.)  On December 23, 2008, the California Supreme Court declined to review the decision.  Based on the analysis in the opinion, it seems unlikely that the result will be anything but a ruling that Los Angeles must terminate the benefits package.

While the outcome may be constitutionally correct, the result is not ideal.  It is already difficult enough to entice qualified candidates to leave behind lucrative private practice for the often thankless work of the judiciary.  A loss of over $45,000 in benefits won't help.  As maxims go, "you get what you pay for" is one of the habitually accurate ones.  How many judges on the fence will now hit the eject button for the greener pastures of private mediation and arbitration?

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Private actions under the California’s Consumer Credit Reporting Agencies Act are preempted by the Fair Credit Reporting Act

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Greatsealcal100There has been a fair bit of speculation that the weak economy would generate a substantial amount of consumer class action activity in areas of finance, including lending, consumer credit and debt collection.  In California, the door to one such area was slammed shut, absent action by the California Supreme Court or the United States Supreme Court.  In Liceaga v. Debt Recovery Solutions LLC (December 29, 2008) the Court of Apppeal (First Appellate District, Division One) held that the federal Fair Credit Reporting Act completely preemted private rights of action under California's Consumer Credit Reporting Agencies Act. 

“Plaintiff and appellant Rebecca Liceaga, apparently the victim of identity theft, filed a complaint against Debt Recovery Solutions, LLC, a collection agency, for damages that she claims were caused when it furnished to a consumer credit reporting agency information about her which it knew or should have known was inaccurate. The complaint alleged a violation of California’s Consumer Credit Reporting Agencies Act, Civil Code section 1785.1 et seq. (CCRAA). The trial court granted defendant’s motion for judgment upon the pleadings upon the ground that any private right of action provided by the CCRAA is preempted by the corresponding federal Fair Credit Reporting Act (15 U.S.C. § 1681 et seq.) (FCRA)).

In this appeal we are called upon to determine whether the FCRA preempts private rights of action as to “furnishers” of wrongful information and whether, if so, Congress has specifically excepted California actions from preemption. We conclude that private actions under the CCRAA are preempted, without exception, by FCRA.

(Slip op., at p. 1.)  The opinion that follows is a fairly standard analysis under the Supremacy Clause.  It is a loss for consumers, since economic downturns and debt collection misconduct have been known to loiter in each other's company.  Actions by California are not preempted, but it is a metaphysical certainty that cash-strapped California won't be keeping up with the prosecution of CCRAA actions at a level consistent with the likely rate of abuse.

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