AT&T Mobility v. Concepcion set for oral argument next week

and the Los Angeles times notes that "Consumers' right to file class actions is in danger."  David Lazarus, Consumers' right to file class actions is in danger (November 5, 2010) www.latimes.com.

California ballot proposition results at 10:24 p.m.

As of 10:24 p.m., California's statewide ballot proposition results are as follows: 

Proposition

Yes %

No %

20 Redistricting of Congressional Districts

64.9

35.1

21 State Park Funding. Vehicle License Surcharge

39.5

60.5

22 Prohibit State From Taking Some Local Funds

63.9

36.1

23 Suspend Air Pollution Control Law (AB 32)

41.9

58.1

24 Repeal Allowance of Lower Business Tax Liability

39.4

60.6

25 Simple Majority Vote to Pass Budget

53.7

46.3

26 2/3 Vote for Some State/Local Fees

55.6

44.4

27 Eliminate State Redistricting Commission

39.1

60.9

19 Legalize Marijuana in CA, Regulate and Tax

43.9

56.1

 

Still doomed. 

Current California ballot proposition results

As of 9:29 p.m., the election returns on California's ballot propositions is as follows: 

 

Proposition

Yes %

No %

20 Redistricting of Congressional Districts

65.6

34.4

21 State Park Funding. Vehicle License Surcharge

38.7

61.3

22 Prohibit State From Taking Some Local Funds

64.3

35.7

23 Suspend Air Pollution Control Law (AB 32)

42.6

57.4

24 Repeal Allowance of Lower Business Tax Liability

38.6

61.4

25 Simple Majority Vote to Pass Budget

53.0

47.0

26 2/3 Vote for Some State/Local Fees

56.4

43.6

27 Eliminate State Redistricting Commission

38.7

61.3

19 Legalize Marijuana in CA, Regulate and Tax

43.1

56.9

 

All I can say is that California is doomed to quicker death if Proposition 25 passes.  But bankruptcy will be a great practice area here until everyone leaves the state.

In Sevidal v. Target Corporation, an unascertainable class dooms plaintiff

The purpose of the ascertainability requirement in class actions is to ensure that it is possible to give adequate notice to class members and to determine after the litigation has concluded who is barred from relitigating the resolved issues.  The ascertainability requirement can be satisfied either by defining a class in objective terms such that a review of the defendant's records or if the class definition would "allow a member of that group to identify himself or herself as having a right to recover based on the description." Bartold v. Glendale Federal Bank, 81 Cal. App. 4th 816, 828 (2000); and see Ghazaryan v. Diva Limousine, Ltd., 169 Cal. App. 4th 1524, 1533 (2008).  In Sevidal v. Target Corporation (October 29, 2010), the Court of Appeal (Fourth Appellate District, Division One) affirmed a trial court order denying certification on the ground that the class was hopelessly unascertainable.

Sevidal sued Target after he purchased through Target's website some clothing items misidentified as made in the United States.   Sevidal specifically argued that, under the California Supreme Court's recent opinion, In re Tobacco II Cases, 46 Cal. 4th 298 (2009) (Tobacco II), "the class could be certified on his unfair competition claim even if most of the proposed class members never relied on the 'Made in USA' designation in deciding to make their online purchases."  Slip op., at 2.  The trial court did not take issue with this contention.  Instead, the trial court found the class definition to be significantly overbroad and the class itself to be unascertainable.

Sevidal's difficulties in defining the class arose because a website coding error caused the Target website to misidentify the county of origin on some clothes on some occasions, but not on others.  This computer bug made it impossible to ascertain class membership:

In the proceedings below, Sevidal made clear that only those who purchased an item when the country of origin was misidentified are part of the proposed class. But he also defined the proposed class to include consumers who purchased an item from Target.com without selecting the " 'Additional Info' " icon, and thus who were never exposed to the country-of-origin information. These consumers would, by definition, have no way of knowing whether he or she purchased an item when it was misidentified, and thus would have no way of knowing whether he or she is a member of the class. And these individuals (those who would have no way of knowing he or she was a class member) represent a significant portion of the overall proposed class. Target's statistical evidence shows that approximately 80 percent of the proposed class falls within this category — individuals who purchased an item without viewing the country-of-origin information.

Slip op., at 19-20.  The Court found this degree of overbreadth sufficient to support the trial court's ruling:

Although class certification should not be denied on overbreadth grounds when the class definition is only slightly overinclusive (ibid.; see Aguiar, supra, 144 Cal.App.4th at p. 136), in this case the overbreadth is significant. The unrefuted evidence showed that approximately 80 percent of the online purchasers did not select the " 'Additional Info' " icon and were never exposed to the alleged misrepresentation.

Slip op., at 20.  A useful observation for both plaintiffs and defendants; slight overbreadth will not defeat certification, but overbreadth of this magnitude will support a denial of certification.

The Court went on to reject Sevidal's attempt to extend by analogy the evidentiary presumptions that can be imposed for failure to follow Labor Code record-keeping requirements.   The Court observed that Target had no statutory or contractual obligations to maintain records about who selected which links on its site.

Finally, the Court discussed the overbreadth issue under the UCL, separate from the ascertainability problem created by the class definition and the lack of records to identify class membership.  Treading gingerly into the minefield of Tobacco II, the Court said:

But the Tobacco II court did not state or suggest there are no substantive limits on absent class members seeking restitution when a defendant has engaged in an alleged unlawful or unfair business practice. Instead, the court recognized that under the UCL's statutory language, a person is entitled to restitution for money or property "which may have been acquired" by means of the unfair or unlawful practice. (§ 17203, italics added; see Tobacco II, supra, 46 Cal.4th at p. 320.) Although this standard focuses on the defendant's conduct and is substantially less stringent than a reliance or "but for" causation test, it is not meaningless. To conclude otherwise would violate the statutory interpretation principle that every word in a statute must be given operative effect. Even after the Tobacco II decision, the UCL and FAL still require some connection between the defendant's alleged improper conduct and the unnamed class members who seek restitutionary relief.

Slip op., 25.  Analyzing the post-Tobacco II cases, the Court concluded that undisputed evidence showed that most of the defined class never viewed the country-of-origin information.   Unlike Weinstat v. Dentsply Internat., Inc., 180 Cal. App. 4th 1213 (2010), there were no direct communications to every class member.  Unlike In re Steroid Hormone Product Cases, 181 Cal. App. 4th 145 (2010), there was no illegal conduct (inclusion of undisclosed controlled substances) to supply the means for unlawful acquisition of money from the class.  In essence, the Court concluded that, as to the majority of the defined class, Target didn't do anything wrong (again, the key issue being that, at many times, the Target website may was displaying the correct information - but most people didn't look at it in either case).

While the Court appears to favor the "conservative" line of post-Tobacco II cases (or, as some might say, the reactionary revolt line), the Court doesn't embroil itself too deeply into the post-Tobacco II cases, attempting as much as possible to harmonize the two lines of cases with each other and the record before it.  In this case, the Court's task is much easier as a result of the unique factual record.

Despite pending Brinker case, Hernandez v. Chipotle Mexican Grill, Inc. declares that standard for rest break applies to meal periods

In case you hadn't heard, Brinker Restaurant v. Superior Court (Hohnbaum) is pending before the California Supreme Court.  Jaimez v. DAIOHS USA, Inc., 181 Cal. App. 4th 1286 (2010), rev. denied (2010) held that certification of meal period claims was appropriate because, among other reasons, that unsettled meal period standard was also a classwide issue.  But in an unexpected twist, the Court of Appeal (Second Appellate District, Division Eight), in Hernandez v. Chipotle Mexican Grill, Inc., decided that, rather than recommending to the trial court that it certify the meal period claim and await Brinker, it would just tell us what that standard is right now.  And, according to the Hernandez Court, the meal period standard is the same standard that applies to rest breaks:

Hernandez admits employers must provide, i.e., authorize and permit, employees to take rest breaks, but contends a different standard applies to meal breaks and thus, the trial court‟s legal analysis was faulty. This contention is not persuasive. “The California Supreme Court has described the interest protected by meal break provisions, stating that „[a]n employee forced to forgo his or her meal period . . . has been deprived of the right to be free of the employer‟s control during the meal period.‟ Murphy v. Kenneth Cole Prods., Inc., 40 Cal.4th 1094, 1104 (2007). It is an employer's obligation to ensure that its employees are free from its control for thirty minutes, not to ensure that the employees do any particular thing during that time. Indeed, in characterizing violations of California meal period obligations in Murphy, the California Supreme Court repeatedly described it as an obligation not to force employees to work through breaks. [Citation.]” (Brown v. Federal Express Corp. (C.D.Cal. 2008) 249 F.R.D. 580, 585, fn. omitted.)

Slip op., at 11, emphasis in original.  The Court affirmatively adopts some of the specious arguments from district courts, including the notion that it would be too hard for employees to actually make employees take breaks:

Hernandez's position also is not practical. “Requiring enforcement of meal breaks would place an undue burden on employers whose employees are numerous or who . . . do not appear to remain in contact with the employer during the day. See White v. Starbucks Corp., 497 F.Supp.2d 1080, 1088-89 (N.D.Cal.2007).

Slip op., at 13.  That argument is insulting.  Evidently an employer can control when employees come and go.  That's not too hard.  But they can't decide whether people work during other parts of the day.  Whatever standard is ultimately declared by the California Supreme Court, arguments like this cheapen the discussion.

Elsewhere in the opinion, the Court opines that it is perfectly fine to assess merits during certification.  It's a brave new world here in California.

Amended Order and Class Notice in Adoma v. University of Phoenix

While I don't regularly post Orders from federal cases I mention, I do so here by special request.  In University of Phoenix, Inc., the District Court (Eastern District of California, Judge Karlton presiding) issued an Order on October 15, 2010, approving in part and modifying in part a proposed Class Notice.  On October 20, 2010, the Court issued an amended Order.  The Amended Order and attached Notice are available through the Acrobat.com links below:

District Court evaluates proper class notice in Adoma v. University of Phoenix, Inc.

United States Senior District Court Judge Lawrence K. Karlton (Eastern District of California) examined the contents of a class notice proposed by the plaintiff in Adoma v. University of Phoenix, Inc., 2010 WL 4054109 (E.D. Cal. Oct. 15, 2010).  The lawsuit alleges state law wage & hour claims, including allegations of off-the-clock work and break violations.  The Court certified the class.  The plaintiff moved for approval of a proposed Class Notice.  The Court's Order provides a good discussion of the appropriate contents in a class notice.

District Court denies motion to stay proceedings and compel arbitration while Concepcion is pending

United States District Court Judge Ronald M. Whyte (Northern District of California) denied a motion to compel arbitration, dismiss claims, or stay the matter.  Weisblatt v. Apple, Inc., 2010 WL 4071147 (N.D. Cal. Oct. 18, 2010).  The suit concerns the change away from the unlimited data plan associated with the Apple 3G-enabled iPad.  AT&T Mobility LLC moved to compel arbitration and to dismiss all claims against it.  In the alternative, AT&T Mobility moved for a stay pending a Supreme Court decision in AT&T Mobility LLC v. Concepcion, --- U.S. ----, 130 S.Ct. 3322, 176 L.Ed.2d 1218 (2010) (No. 09-893).  Defendant Apple joined in the motion to stay.

The Court denied the motion, without prejudice, saying:

Given the likelihood that the Supreme Court will speak directly to the class action waiver issue in Concepcion, compelling arbitration at this point would be unwarranted. Even though plaintiffs' arguments regarding the unconscionability of the class action waiver may have less merit under New York law, a Supreme Court decision in Concepcion is still likely to simplify the issue. Accordingly, ATTM's motion to compel arbitration is denied without prejudice.

Slip op., at 3.  The Court went on to hold:

On balance, the court finds that a stay is unwarranted. That said, the claims with respect to ATTM will likely be affected by the Supreme Court's decision in Concepcion.  Accordingly, it makes little sense to begin discovery with respect to the claims focused on ATTM. Also, the court at this time declines to decide whether plaintiff Hanna's iPhone 3GS arbitration agreement now applies to his iPad dispute. In any event, Concepcion is likely to clarify the enforceability of the iPhone 3GS arbitration agreement as well as the iPad arbitration agreement.

Slip op., at 4.  The Court then limited discovery to written discovery against Apple.

California Supreme Court activity for the week of October 18, 2010

The California Supreme Court held its (usually) weekly conference on October 20, 2010. Notable results include: 

  • On a Petition for Review, review was denied in Morgan v. United Retail (July 13, 2010) [obligations under Labor Code section 226], covered previously here.
  • On a Petition for Review, review was granted in Aryeh v. Cannon Business Solutions (June 22, 2010).  In Aryeh, the plaintiff argued that a continuing violation theory applied to his UCL claim, extending the period during which he could bring a claim.  The Court of Appeal rejected that argument. 

Adobe announces Acrobat X and related service enhancements

Earlier today Adobe announced the soon-to-be-released Acrobat X family of products.  Having seen a demonstration of some pre-release features, I can say that Acrobat X looks like it will accomplish several important things from the standpoint of legal practitioners.  For example, the automation tools will increase the ease with which attorneys and support staff process documents.  PDF Portfolios receive several enhancements, including the ability to control the order of documents in the PDF Portfolio (if you haven't used this feature, it is essentially using the PDF as a wrapper around a number of different document types - the documents are packaged much like an electronic binder, complete with a cover page and designer color schemes).

Acrobat.com will add an explicit tool to do what I've been manually using it for since Acrobat.com first went live.  The SendNow tool will allow users to send large files that might not successfully move through e-mail systems.  The SendNow tool will provide delivery receipts, a helpful addition for document delivery.

Personally, I am also interested in the prospect of SharePoint integration.  Combined with improvements to SharePoint functions and improved SharePoint features available through Office 2010, SharePoint might make a very serviceable substitute for the pricey document management services that target the legal industry.

I will be sure to give Acrobat X a test drive when it is available and let you know how quickly you should look to update your stale version of Acrobat.  Here's a hint that doesn't even require a test drive - if you are using Acrobat 7 or below, you must rush to upgrade; if you are using Acrobat 8, you should give some serious thought to upgrading at your earliest convenience.  I'll let you know if you get enough out of the jump from Acrobat 9 to Acrobat X to justify the same recommendation that I give for versions 8 and below.