Bright v. 99¢ Only Stores holds that PAGA penalties are available for certain wage order violations

Employer:  Give it to me straight, Doc, is it serious?

Defense Counsel:  You'll need to sit down for this one.

Employer:  Okay.  Wait, there aren't any chairs here.

Defense Counsel:  I know!  Get it?  No chairs?  Now don't be like that....

I'm delaying the reporting just to build the suspense.  You have been wondering whether violations of Wage Order No. 7, subdivision 14 are violations of Labor Code § 1198, and here I am writing my first play.  But your wait is over.  In Bright v. 99¢ ONLY STORES, the Court of Appeal (Second Appellate District, Division Five) held that (1) violations of Wage Order No. 7, subdivision 14 are violations of section 1198; and (2) civil penalties under section 2699, subdivision (f) are available despite the fact that Commission wage order No. 7-2001 has its own penalty provision.

This action arises from a claim for civil penalties under the Private Attorneys General Act of 2004 ("PAGA") for violation of the suitable seating order of the Commission.  Commission Wage Order No. 7, subdivision 14, provides, in part: Wage Order No. 7, subdivision 14 provides: “(A) All working employees shall be provided with suitable seats when the nature of the work reasonably permits the use of seats. [¶] (B) When employees are not engaged in the active duties of their employment and the nature of the work requires standing, an adequate number of suitable seats shall be placed in reasonable proximity to the work area and employees shall be permitted to use such seats when it does not interfere with the performance of their duties.”  Slip op., at 2, n. 2.  This requirement is sometimes known as the suitable seating requirement.  The trial court sustained the defendant's demurrer on the grounds that (1) failure to provide sufficient seating is not a condition “prohibited” by Wage Order No. 7, subdivision 14, and (2) even if it were, civil penalties are not recoverable under section 2699, subdivision (f), because Commission Wage Order No. 7-2001 contains its own civil penalty provision.

The Court of Appeal concluded that the issues raised in the appeal were matters of first impression.  On an issue of first impression, the Court began with the statute at issue:

We begin by examining the statutory and administrative scheme, starting with section 1198, which provides: “The maximum hours of work and the standard conditions of labor fixed by the commission shall be the maximum hours of work and the standard conditions of labor for employees. The employment of any employee for longer hours than those fixed by the order or under conditions of labor prohibited by the order is unlawful.”

Slip op., at 5.  The Court then held that, under the plain meaning of section 1198, suitable seating is a "standard condition of labor fixed by the commission."  Slip op., at 6.  The Court rejected defendant's argument that because the seating language was not expressed in prohibitory language, it was merely a suggestion.

Employer:  What about chairs that give off electric shocks at random intervals so nobody wants to sit in them?

Defense Counsel:  No.  Wait.  Yes, if that's what you want to do, but only after you augment your retainer.  Significantly.

Turning to the second question, the Court of Appeal quickly concluded that, because the suitable seating requirement did not have its own penalty provision, it is governed by section 2699, subdivision (f) of PAGA.  The Court noted that the penalty set forth in subdivision 20 is expressly described as a cumulative remedy, rendering it nonexclusive.

Employer:  I had a nightmare.  It was horrible.

Defense Counsel:  Tell  me about it.

Employer:  It was dark.  There was a sound.  It was like nothing I have ever heard before.  I think it was the sound of drool from a million plaintiff's attorneys splattering on the floor.

Defense Counsel:  It was no dream!

Employer:  Aaaaahhh!!!!..........

California Supreme Court activity for the week of November 8, 2010

The California Supreme Court held its (usually) weekly conference on November 10, 2010. Notable results include:

• On a Petition for Review, review was denied in Walnut Producers v. Diamond Foods (August 16, 2010), discussed briefly on this blog here.  [Arbitration agreement with class arbitration ban not unconscionable]
• On a Petition for Review, with an associated request to depublish, review and depublication were both denied in Gutierrez v. Commerce Club (August 23, 2010), discussed on this blog here.  [Reversal of Order sustaining demurrer to class allegations]

Windows Phone 7 powered phones now available to U.S. consumers

I have next to me one of the first crop of Windows Phone 7 handsets available to United States consumers (clarification: Windows Phone 7 launched internationally before it launched in the U.S.  2nd clarification: you could have purchased a European Windows Phone 7 handset from a supplier of unlocked handsets and had a phone prior to November 8th.)  The handset is the Samsung Focus.

First, a few comments about the Windows Phone 7 OS.  It is premium operating system; that much is beyond dispute.  Microsoft deserves credit for that.  It makes iOS look a bit stale by comparison.  There are elegant choices around every corner as you move through the phone's menus.  In fact, there are too many for me to even attempt to describe them, so I won't do what others have done.  Here is a detailed review by Paul Thurrott, who was provided early access to the development phones while writing a book about the new smartphone OS.

Almost everything I have encountered is very polished.  The glaring failure in my view is that the browser on Widows Phone 7 doesn't render this blog quite right.  Some buggy rounding error or css margin/padding handling screws up the alignment of the banner.  Shameful.

Will this phone prove useful to legal professionals?  I think so.  There are a few features not yet in the phone, like cut & paste, but that should be remedied with a pair of updates expected in the next few months.  The application store is sparse compared to the iTunes App store, but the top tier developers are, almost without exception, preparing their applications for Windows Phone 7.  And the secret sauce that most phone users would never know is that the development tools for Windows Phone 7 are reported to be far better than what Apple currently offers.  When you add in the fact that WP7's development platform tools are similar to those available for desktop Windows programming, it is much more efficient to port existing applications onto WP7.  If Microsoft continues to support its developers, the applications should follow.

As for the Samsung Focus itself, I will say this for it.  It has an amazing screen in all its bright, 4" AMOLED goodness.  Compared to my prior, personal-use phone, the iPhone 3GS, it blows it away.  The current iPhone 4 screen, with its slightly higher pixel density, look extremely sharp, but it is small.  The screen was the deciding factor in my decision.

On the other hand, the other materials used in the Samsung handset are just shy of pathetic.  The phone is almost entirely plastic.  It is beautiful and thin lying on a desk, but when you inspect the details, it doesn't look like it was made with materials that are appropriate for a full-powered, modern smartphone.  I wanted to test drive this operating system on AT&T.  I had two choices for phones at launch, the Samsung Focus and the HTC Surround.  The HTC surround has a ridiculous sliding speaker mechanism that makes the phone pointlessly thick.  If HTC had made that phone without the speaker, I probably would have chosen it over the Focus.  At least HTC used brushed metal detailing around the screen.  How can these handset manufacturers watch Apple drive itself into the smartphone world, now in the 4th position after just 4 years, and not respond to Apple's design dominance with better handsets?  I know that there are enough good designers in the world to allow at least one to work at each handset manufacturer.  And Apple can't have a monopoly on things like aluminum - the Earth's crust is chock full of it.  Unless I used it all drinking Diet Coke.

I will almost certainly replace the Focus next year with a handset befitting the OS on it - something more like the LG Optimus or HTC Mozart that were released in Europe.   I'm sucking up that extra cost so that I can report on my experiences with the newest OS on the block.  Until then, I will concentrate on the great screen.

Adobe rolls out new cloud services of interest to legal professionals

Two new Acrobat.com cloud services of interest to legal professionals, Adobe SendNow and Adobe CreatePDF, are now live.

E-mail systems still suffer from the lowest common denominator syndrome.  Your ability to send files is restricted by the lowest cap on attachment sizes in the e-mail transmission chain.  Systems for drop delivery of large files have been the solution for several years.  Adobe is offering a large file transmission service, but Adobe is differentiating itself from the crowd with additional transmission and monitoring features.  SendNow allows users to: 

• Send large files from one computer to one or many recipients.
• View files that they've sent in the past, and see when and to whom they were sent.
• Keep an eye out for files that have been sent to you.

As with SendNow, CreatePDF isn't the first of its kind online (in fact, it isn't the first such service from Adobe), but Adobe hopes to interest users in this latest cloud-based service with some fairly powerful features.  Adobe CreatePDF will (in addition to the standard conversion of Office documents, images and other supported files into an Adobe PDF from a web browser) enable users to: 

• Combine documents into a single PDF file.
• For users of Microsoft Windows, users will be able to install a special printer driver that will allow creation of a PDF file online from any application that can print.
• Within Adobe Reader X, a new Share pane provides a connection to the online Adobe CreatePDF service, making it easy to create a document that others will be able to view consistently.

CreatePDF looks like good stuff for the small firm or solo practitioner, and SendNow looks useful for any size firm.  I will give SendNow a test drive so that I don't have to create private websites for large file exchanges or find some other kludge to get the job done (like abuse Acrobat.com's file sharing feature as though it were a file drop service).

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:

• Amended Order
• Notice