In Franco v. Athens Disposal Company, Inc., another "no class action" arbitartion clause bites the dust, and with a kicker

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Greatsealcal100Today, in a putative class action asserting various Labor Code violations, the Court of Appeal (Second Appellate District, Division One) invalidated as unconscionable an arbitration agreement containing a “no class action or private attorney general action (PAGA) clause” in Franco v. Athens Disposal Company, Inc. (March 10, 2009).

The Court held:

“We conclude that the class arbitration waiver is unconscionable with respect to the alleged violations of the meal and rest period laws given “the modest size of the potential individual recovery, the potential for retaliation against members of the class, [and] the fact that absent members of the class may be ill informed about their rights.” (Gentry v. Superior Court (2007) 42 Cal.4th 443, 463 (Gentry).) In addition, because the arbitration agreement prevents plaintiff from acting as a private attorney general, it conflicts with the Labor Code Private Attorneys General Act of 2004 (PAGA) (§§ 2698–2699.5) — an act that furthers Gentry’s goal of comprehensively enforcing state labor laws through statutory sanctions (see Gentry, supra, 42 Cal.4th at pp. 462–463).

(Slip op., at p. 2.) But you have to admire the employer for the sheer chutzpah of it. A “no private attorney general” clause?  Bold, and daring.

The opinion is longer than you might expect.  Several preliminary issues required discussion before the Court moved to the meat of the issues.  And the Court provided an extensive discussion of both Gentry and the nature of PAGA actions.  If this happens to be your bailiwick, the opinion is a must read.  If you never confront arbitration agreements or wage & hour matters, move along - there is nothing to see here.

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HealthMarkets, Inc. v. Superior Court tries to add clarity to parent-subsidiary jurisdictional questions

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Greatsealcal100I must apologize. I know that you have been wondering whether a parent company purposefully avails itself of a forum solely because a subsidiary does so. And it took me hours to bring the answer to you. For that, I am ashamed. But the opportunity for redemption is at hand, as the Court of Appeal (Second Appellate District, Division Three) answered that question in HealthMarkets, Inc. v. Superior Court (Berman) (March 9, 2009).

After providing a basic primer on general personal jurisdiction, specific personal jurisdiction and the current condition of California law on the jurisdictional impact of subsidiaries, the Court held: “A parent company purposefully avails itself of forum benefits through the activities of its subsidiary, as required to justify the exercise of specific personal jurisdiction, if and only if the parent deliberately directs the subsidiary’s activities in, or having a substantial connection with, the forum state.” (Slip op., at pp. 10-11.) You’d think that a holding this absolute would take care of jurisdictional questions about subsidiaries, but I expect that what we will get, instead, are complaints with generic allegations about how the parent corporation “deliberately directed” the activities of its subsidiary in the forum state. And the never-ending chess game continues.

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Courtroom View Network is live webcasting Diet Drug Cases trial in Los Angeles

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Filed a decade ago, the Diet Drug Cases have developed such a life of their own that a dedicated, official website exists on the Superior Court's own website.  Now, Judge Anthony Mohr will have the pleasure of presiding over this beast, and Courtroom View Network will bring live and on-demand video coverage.

Courtroom View Network brings three years of experience of Webcasting high-stakes civil litigation to the Diet Drug Cases 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. Its Web site is at www.courtroomlive.com.

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Class action news of note: Tobacco II arguments leaves everyone guessing, and more

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This past week, the California Supreme Court heard oral argument in the Tobacco II cases.  Extensive coverage of the oral argument is available from the UCL Practitioner in this post.  The obligatory reading of tea leaves has, in this instance, revealed little.  For examle, Mike McKee, writing for The Records, said, "Just a few weeks ago, the California Supreme Court ruled that lawsuits under the Consumer Legal Remedies Act can only be filed by individuals who suffer real damage from unlawful business practices. But during oral arguments on Tuesday it wasn't clear where the court stood on applying that same rule to every participant of class actions filed under the state's Unfair Competition Law."  (Mike McKee, Calif. Justices Air Standing for UCL Class Actions Against Tobacco Industry (March 4, 2009) www.law.com.)  Having watched the argument myself, I agree that it was hard to discern much from the Justices.  The cynic in me always assumes that the creep of Proposition 64 will keep on spreading its tendrils, but the argument itself gives me little actual evidence to support that guess.

Meanwhile, the significance of the Ninth Circuit's decision in Davis v. HSBC Bank Nevada, N.A., et al. (February 26, 2009) reached the legal media:  "In a blow to plaintiffs class action lawyers, the 9th U.S. Circuit Court of Appeals has made it tougher to hold that a national company is a 'citizen' of California merely based on the disproportionate size of the state's population."  (Pamela A. MacLean, 9th Circuit Deals a Blow to Plaintiffs Lawyers in 'Principal Place of Business' Test (March 9, 2009) www.law.com.)  Not that Tosco actually held that a state's population size governed corporate citizenship, but the remainder of the article is accurate.  This blog noted the decision in this short post.

Finally, while a bit late to the party, another ISP and the defunct Adzilla were sued for deep packet inspection for the purposes of obtaining the advertising holy grail: complete knowledge of each consumer's behaviors and preferences.  (Ryan Singel, Another ISP Ad Snooper Hit With Lawsuit (March 3, 2009) www.wired.com.)  I've already expressed my contempt for this behavior by ISPs.  Luckily, these projects appear dead in the United States.  But don't count on them staying down forever.

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Are meal period premiums part of the "regular rate" in FLSA cases? One District Court says, "No."

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In a LinexLegal.com news article entitled Must Employers Include Meal-Period Premium Payments in the "Regular Rate" Used to Compute the Overtime Owed to Their Employees?, it is reported that, on February 25, 2009, Judge Saundra B. Armstrong of the U.S. District Court for the Northern District of California held that meal-period premiums mandated by California Labor Code Section 226.7 need not be included in the "regular rate" for purposes of calculating an employee's overtime compensation under the federal Fair Labor Standards Act (FLSA), 29 U.S.C. para 201 et seq.   The ruling was issued in the context of a putative state-wide class-action in Rubin v. Wal-Mart Stores, Inc., No. CV 08-4214.

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BREAKING NEWS: Supreme Court finds no pre-emption in Wyeth v. Levine

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More commentary on thus opinion will follow (it will, in fact, be discussed everywhere), but it suffices to say that this was one of the foundational set pieces in the attack on consumer class actions.

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in brief: UCL Practitioner's post on Kwikset v. Superior Court (Benson) is a must-read

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If you happen to read the UCL Practitioner with any regularity, you know that Kimberly Kralowec is as cool a customer as they come.  That's why I pay careful attention when she let's loose in prose on any appellate decision touching on the UCL and related False Advertising Law.  Her post earlier today on the recent Court of Appeal decision in Kwikset Corp. v. Superior Court (Benson) (Feb. 25, 2009) (Fourth Appellate District, Division Three) is the most critical commentary that I can recall reading (but that criticism is well-justified, I think).  I've commented previously about my own concern that Division Three of the Fourth Appellate District has moved out of step with California's policies that favor consumer protection and resolution of issues with the class action device.  But the most recent Kwikset decision is little more than judicial legislation.  Be sure to check out what the UCL Practitioner has to say about Kwikset.

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Advice on getting the most from Acrobat 9 from the Delaware Employment Law Blog

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Compliments of @acrolaw on Twitter, I was directed to an excellent blog post entitled Making the Switch to Digital: Legal Research.  The article, posted by Delaware Employment Law Blog, includes some good advice about getting the most out of your online research and information management with Adobe Acrobat 9.  While I wouldn't necessarily implement all of the tips for myself, there is certainly some value in creating a pdf repository of authority used in research, particularly if you've ever considered creating a fully indexed e-brief.  I've seen one such brief, with each citation linked to accompanying authority, and its a thing of beauty.

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in brief: Ninth Circuit clarifies the Tosco "substantial predominance" test for corporate operations in Davis v. HSBC Bank Nevada, N.A., et al.

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Ninth Circuit SealIf you spend any time litigating class actions, CAFA almost guarantees that some of that time will be spent in federal court. Thus, the citizenship of the defendant(s) is a significant issue. In Davis v. HSBC Bank Nevada, N.A., et al. (February 26, 2009), the Ninth Circuit interpreted and limited the “substantial predominance” analysis for the “principal place of business” test, as it was described in Tosco Corp. v. Communities for a Better Env't, 236 F.3d 495 (9th Cir. 2001). In brief, the Court held that the “substantial predominance” of activities is tested against national activities, not the next largest state, but a per-capita analysis is not required.

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BREAKING NEWS: First appellate construction of Labor Code section 206.5 concludes that it doesn't mean what it seems to say

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Greatsealcal100As predicted in this post, the Fourth Appellate District, Division Three, has issued a published opinion in Chindarah et al. v. Pick Up Stix, Inc. et al (February 26, 2009).  The opinion construes Labor Code section 206.5, concluding that employer-obtained releases of wage claims in dispute were not void by operation of section 206.5.  There is some qualifying language in the opinion worth mentioning, but, that must wait for another day.

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