Central District certifies false advertising class of consumers that purchased YoPlus yogurt

United States District Court Judge Cormac J. Carney (Central District of California) certified a class of California consumers that purchased YoPlus yogurt.   Johnson v. General Mills, Inc., --- F.R.D. ----, 2011 WL 1514702 (C.D.Cal. Apr 20, 2011).  The Court followed Tobacco II when analyzing whether reliance affected commonality:

Mr. Johnson may bring these UCL and CLRA claims on behalf of a class. Although Proposition 64 requires that Mr. Johnson actually relied on General Mills' alleged misrepresentations to bring his UCL claim, that requirement does not apply to absent class members. See In re Tobacco II Cases, 46 Cal.4th 298, 321, 326 (2009) (finding that Proposition 64 “was not intended to have any effect at all on unnamed members of UCL class actions”). Indeed, “relief under the UCL is available without individualized proof of deception, reliance and injury.” Id. at 320; see also In re Steroid Hormone Prod. Cases, 181 Cal.App. 4th 145, 154 (2010) (explaining that once the named plaintiff meets standing requirements “no further individualized proof of injury or causation is required to impose restitution liability [under the UCL] against the defendant in favor of absent class members”).

As the Supreme Court of California has explained in the UCL context, " ‘a presumption, or at least an inference, of reliance arises whenever there is a showing that a misrepresentation was material.’ " In re Tobacco II Cases, 46 Cal.4th at 327 (quoting Engalla v. Permanente Med. Grp., Inc., 15 Cal.4th 951, 977 (1997)). Similarly, a CLRA claim can be litigated on a classwide basis when the “record permits an ‘inference of common reliance’ to the class.” McAdams v. Monier, Inc., 182 Cal.App. 4th 174, 183 (2010) (quoting Mass. Mut. Life Ins. Co. v. Superior Court, 97 Cal.App. 4th 1282, 1293 (2002)). A representation is material “if a reasonable man would attach importance to its existence or nonexistence in determining his choice of action in the transaction in question.” In re Tobacco II Cases, 46 Cal.4th at 327 (internal quotation marks omitted); see also Clemens v. DaimlerChrysler Corp., 534 F.3d 1017, 1025 (9th Cir.2008) (explaining that a concealed fact is “material” under the UCL if reasonable consumers are likely to be deceived). This “objective standard ... is susceptible to common proof.” Wolph v. Acer Am. Corp., ––– F.R.D. ––––, No. C 09–01314 JSW, 2011 WL 1110754, at *9 (N.D.Cal. Mar. 25, 2011). And materiality is generally a question of fact for the jury. In re Tobacco II Cases, 46 Cal.4th at 327.

Accordingly, Mr. Johnson's UCL and CLRA claims present core issues of law and fact that are common and suitable for adjudication on a classwide basis. These issues include: (1) whether General Mills communicated a representation—through YoPlus packaging and other marketing, including television and print advertisements—that YoPlus promoted digestive health; (2) if so, whether that representation was material to individuals purchasing YoPlus; (3) if the representation was material, whether it was truthful; in other words, whether YoPlus does confer a digestive health benefit that ordinary yogurt does not; and (4) if reasonable California consumers who purchased YoPlus were deceived by a material misrepresentation as to YoPlus' digestive health benefit, what is the proper method for calculating their damages. The commonality requirement is also met here.

Slip op., at 2-3.  Seems like products claiming digestive health benefits inevitably cause indigestion for the companies making those claims.

Northern District Court certifies under 23(b)(2) a class of shift workers alleging meal period violations at a Shell refinery

United States District Court Judge Claudia Wilken (Northern District of California) granted a motion for class certification in a suit alleging failure to comply with California's meal period requirements and pay an additional hour of pay for each instance of a violation.  Gardner v. Shell Oil Co., 2011 WL 1522377 (N.D.Cal. Apr 21, 2011).  The particularly interesting aspect of this case is the Court's decision to permit certification under Fed. R. Civ. P. 23(b)(2):

"Claims for money relief may be certified as part of a Rule 23(b)(2) class, but the rule ‘does not extend to cases in which the appropriate final relief relates exclusively or predominantly to money damages.’ "  Wang v. Chinese Daily News, Inc., 623 F.3d 743, 753 (9th Cir.2010) (internal quotation marks omitted) (citing Dukes, 603 F.3d at 615 n. 38).

Citing Allison v. Citgo Petroleum Corp., 151 F.3d 402, 412–16 (5th Cir.1998), Defendants contend that monetary relief in this case predominates because Plaintiffs seek damages for alleged unpaid wages and waiting-time penalties. However, the Ninth Circuit has expressly rejected the Allison approach to determining whether monetary relief in a given case disqualifies the class from certification under Rule 23(b)(2). In Wang, the Ninth Circuit explained, “In Dukes, we rejected as ‘deficient’ ... the Allison ‘incidental damages standard’ that permits certification of claims for monetary relief under Rule 23(b)(2) only when they are ‘incidental to requested injunctive or declaratory relief,’ because it is unduly restrictive.” 623 F.3d at 753–54. In this circuit, Rule 23(b)(2) is interpreted to require “only that claims for monetary relief not predominate over claims for injunctive relief” and certification is acceptable when the claims are on “equal footing.” Id. at 754.

Plaintiffs in the present case, like those in Wang, have a substantial claim for injunctive relief because they seek to end long-standing employment policies. Id. The claims for injunctive and monetary relief are closely related because back wages are sought for those who were deprived of lawful meal periods due to the policies Plaintiffs seek to enjoin. As a result of this close relationship, the request for monetary relief does not introduce “new and significant legal and factual issues,” nor raise particular due process or case management concerns. Id. Furthermore, courts have held that back wages are a form of relief that may be permitted in a Rule 23(b)(2) action. Dukes, 603 F.3d at 618–19 (holding that back pay in a Title VII case is fully consistent with certification of a Rule 23(b)(2) class action and noting that “every circuit to have addressed the issue has acknowledged that Rule 23(b)(2) does allow for some claims for monetary relief.”). In Dukes, the Ninth Circuit reasoned that back pay in the Title VII context generally involves relatively uncomplicated factual determinations and few individualized issues, and is an integral component of Title VII's “make whole” remedial scheme. Id. at 619. Nor are waiting-time penalties so significant or complex that they render Plaintiffs' monetary claim predominant over their request for injunctive relief. Accordingly, class certification under Rule 23(b)(2) is warranted.

Slip op., at 6.  The balance of the opinion discusses predominance, and the Court concluded that common issues predominate and certified a Rule 23(b)(3) class as well.

The slip opinion on Westlaw does not identify the counsel involved in this uncommon attempt at 23(b)(2) certification in the wage & hour context, and I don't have time to track that down.  Thus, I don't know who to applaud.  If you do, given them a pat on the back.

You (or your support staff) should know this Acrobat feature

I'm working on Part II of my Acrobat X review.  Until that is finished, here's a bit of instructional advice that will help you survive that dreaded court requirement to consecutively number exhibits.  Compliments of PDF for Lawyers, the "Header & Footer" option in the Document menu allows for the addition of all sorts of numbering and labeling schemes.  I must confess that the ease with which pdfs can be created and assembled and the increasing ease with which documents can be e-filed with some courts has had an unexpected side-effect on some of my filings - I forget the exhibit labeling requirements imposed under some rules of court.  It was almost easier to remember when you had to go to the trouble of hand stamping each page or running the exhibit through a laser printer a second time.

AT&T finally allows (err, finishes testing) updates for two of its Windows Phone 7 handsets

The Windows Phone 7 update debacle is crawling to its final resting place (at least for the current set of updates...for some U.S. customers...on AT&T).  As of April 19, 2011, Microsoft was allowed by AT&T to deliver updates to Samsung Focus and LG Quantum owners (but not the HTC Surround).  Microsoft engaged in some speculation about whether the carrier-specific updates could be received by phones that had been updated though "hacker" means, such as the ChevronWP7.Updater technique delivered by Chris Walsh (who was, allegedly, told by Microsoft that his update method would prevent phones from receiving future updates), when it suggested to the public (contrary to what it told Walsh) that such updating techniques might block future updates.  As an aside, Chris became a verb when phone treated to his update tool were characterized as "Walshed."

Well, I can now confirm that the fears of brickdom were greatly overstated.  My Samsung Focus, which was somehow updated (Walshed) with the ChevronWP7.Updater tool (I am shocked, shocked to learn of "hacker" updates on my phone), recevied and applied the carrier-specific and OEM firmware updates through the normal channel yesterday.  The AT&T address book tool was installed.  The Focus-specific firmware was also updated.

As far as the potential of Windows Phone 7 for the legal set, this OS will need the "Fall" update, called "Mango," before it will have all the tools in place that most attorneys/IT departments/corporations would want for a wide deployment.  New development tools are about to be released, with access to a huge number of new APIs.  Major software developers should be able to deliver much improved productivity tools with the Mango release this fall.  What I can't wait to...read about...is whether the ChevronWP7.Updater tool that evidently worked very well for the current round of updates will be able to pull the Mango update as soon as it is ready.  This would allow phone owners to bypass the many months of "testing" that AT&T will perform.  That's right - I can't wait to read about that.

Supreme Court activity for the week of April 18, 2011

The California Supreme Court held its (usually) weekly conference on April 20, 2011.  Notable results include:

• On a petition for review, review was denied in MKJA, Inc. v. 123 Fit Franchising, LLC (January 4, 2011) (arbitration issues), covered previously on this blog here.
• On a petition for review, review was denied in Telscape Communications v. Superior Court (Gallardo) (March 7, 2011)

McDonald's sued to stop it from offering toys in Happy Meals; Opponents of personal responsibility celebrate

According to Reuters, the Center for Science in the Public Interest is representing a mother of two in a suit agasint McDonald's.  The suit alleges violation of California consumer protection laws.  McDonald's removed the suit to the United States District Court for the Northern District of California.

I have a kid.  I sometimes let her eat McDonald's.  I could say no to a request to eat there.  That's my choice.  But if McDonald's axes Happy Meal toys to deal with these claims, then I will have less choice, thanks to people that think they can do a better job than I can of raising my child.  Have we completely lost our minds?  Plenty of companies do actual, real, bad things.  We just dilute attention from real misconduct when we shove responsibility for our sloth and inattention onto businesses.  Underpaying employees: bad.  Undisclosed toxins in food or medication: bad.  Defrauding investors: bad.  Kids eating too much junk food: lack of parental discipline (unless the children are out buying their own food, in which case it is a lack of parental oversight).

In Mora, et al., v. Big Lots Stores, Court affirms denial of certification in manager misclassification case

I've comment previously that misclassification cases (especially in the retail and restaurant sectors) appear to be an increasingly difficult sell.  See post regarding Arenas v. El Torito Restaurants, Inc., 183 Cal. App. 4th 723 (2010).  Since then, I haven't seen anything to change my opinion that the tide has shifted from the Sav-on high water mark.  Yesterday, in Mora, et al. v. Big Lots Stores (April 18, 2011), the Court of Appeal (Second Appellate District, Division Seven) affirmed a trial court order denying certification of a class of Big Lots store managers alleged to have been misclassified as exempt from overtime pay and other labor code obligations.

The Court summarized the two ends of the legal spectrum defining the legal criteria applied to certification:

As the Supreme Court held in Sav-On, supra, 34 Cal.4th at page 326, the central issue in a class certification motion is whether the questions that will arise in the action are common or individual, not the plaintiffs' likelihood of success on the merits of their claims. (Accord, Ghazaryan v. Diva Limousine, Ltd. (2008) 169 Cal.App.4th 1524, 1531 ["trial court must evaluate whether the theory of recovery advanced by the plaintiff is likely to prove amenable to class treatment"].) The putative class representatives contend the trial court disregarded this standard, improperly focusing on the potential conflicting issues of fact that may arise on an individual basis rather than the common questions presented by their theory of recovery. To the contrary, the court employed the correct analysis and concluded the theory of recovery advanced—operational standardization imposed by Big Lots—was not supported by substantial evidence and thus not amenable to class treatment. No legal error was committed: "[A] class action will not be permitted if each member is required to 'litigate substantial and numerous factually unique questions' before a recovery may be allowed. . . . '[I]f a class action "will splinter into individual trials," common questions do not predominate and litigation of the action in the class format is inappropriate.'" (Arenas v. El Torito Restaurants, Inc. (2010) 183 Cal.App.4th 723, 732 [affirming order denying certification on misclassification allegations where trial court found tasks performed by restaurant managers and time devoted to each task varied widely from restaurant to restaurant].)

Slip op., at 12.  The Court noted that the outcome was much like Arenas and Dunbar v. Albertson’s, Inc., 141 Cal. App. 4th 1422 (2006).

The outcome was driven by the standard of review.  The Court emphasized on several occasions that it couldn't second guess the trial court's decision to credit Big Lots' evidence over the plaintiffs' evidence:

In essentially rejecting the putative class representatives' evidentiary submission, the court observed that for more than half of the declarants the percentage of time estimated to have been spent on non-managerial, non-exempt duties was different from the estimates given in deposition testimony or statements to third party prospective employers.

Slip op., at 14, n. 10.  The trial court also credited the very individualized manager declarations submitted by Big Lots over the declarations from the plaintiffs.  The Court of Appeal found that that trial court did not abuse its discretion because substantial evidence supported the trial court's conclusion.  This is the anti-Sav-on.

Seymore v. Metson Marine opinion amended after rehearing

The Court of Appeal (First Appellate District, Division Three), issued its initial opinon in Seymore v. Metson Marine, Inc. on February 28, 2011).  Today, the Court issued an ameded opinion.  Seymore v. Metson Marine, Inc. (April 15, 2011).  I haven't had a chance to compare the opinions, so I'm not sure whether the opinion changed in any substantive way, or whether the Court simply addressed additional points raised during rehearing.  The opinion is four pages longer; however, the Court's reversal of the trial court remains in place.

Despite daunting facts, Court of Appeal confirms that California class actions are "opt-out" classes

Use of an opt-in approach for class actions has been rejected as contrary to California law.  Hypertouch Inc. v. Superior Court, 128 Cal. App. 4th 1527 (2005).  In Los Angeles Gay & Lesbian Center v. Superior Court, the rule in Hypertouch was tested with a more challenging set of facts, namely, the need to protect medical privacy rights.  The Court of Appeal (Second Appellate District, Division One) held, in Los Angeles Gay & Lesbian Center v. Superior Court (April 13, 2011), that the opt-out rule stated in Hypertouch is indeed the rule for class notice.  However, the Court fashioned other relief intended to protect the substantial privacy interest in medical information.

This matter was before the Court of Appeal for the second time.  In Bomersheim v. Los Angeles Gay & Lesbian Center, 184 Cal. App. 4th 1471, 1478 (2010) (Bomersheim I), the Court reversed the denial of class certification.  The matter alleged that, from January 1999 to March 2004, the Center administered an incorrect form of penicillin to person with confirmed or suspected cases of syphilis.

Once the matter was certified, the issue of notice became a focus of the litigation.  The Center argued that, due the sensitive nature of medical nature of the claims at issue, the court should utilize an opt-in mechanism.  The trial court held that an opt-out notice was appropriate and the Center filed a petition for a writ of mandate.  The Court heard the matter, saying, "This case presents the novel issue of whether an opt-out class is appropriate under California law where privacy rights and the physician-patient privilege will be severely compromised by the traditional opt-out procedure."  Slip op., at 11.

In concluding that opt-out notices were the only appropriate approach to class action notice proceedings, the Court said:

We recognize the benefits of a class action do not as readily accrue where members must affirmatively join the class. Here, the putative class members are those seeking free medical advice, and only approximately two-thirds of them responded to the Center's explanation of the error in medication and sought free retreatment. It is less likely that such members would affirmatively seek to join a class. Without the mandatory joinder effect of an opt-out class action, the Center will not obtain res judicata effect of a judgment; small individual class plaintiffs will not obtain the benefit of a settlement; and the cost of administering many small actions will not be avoided. Nonetheless, the Center points out that it has been more than six years since the error in medication, and if small class plaintiffs had wanted to come forward and file individual suits, they would have. This fact only underscores the point that the class plaintiffs in this action are likely of limited means and have limited access with which to pursue their claims judicially. A class action in which they automatically become participants benefits them.

Slip op., at 16-17.  However, the Court issued very specific instruction to protect the privacy of class members from disclosure without consent:

To the extent putative class members opt-out of the class, their names, other identifying information, and Medical Information shall not be subject to disclosure and shall remain sealed. With respect to those class members who do not opt-out of the class action, no class members' name, identifying information, or medical information is to be disclosed without that class members' prior authorization. Further, the trial court is to take steps to ensure that the names, identifying information, and medical information of the class members are not subject to disclosure under any circumstances in any public proceeding or public filing.

Slip op., at 24.  The Court limited disclosure of the class list to the third party administrator that would handle mailing of the notice.

Microsoft finally admits that carriers can block updates to Windows Phone 7 without using word "block"

Not that anyone believed otherwise, but Microsoft admitted this morning at MIX'11 that the update process for Windows Phone 7 can be stifled by mobile carriers.  The Live Blog at Day 2 of MIX'11 in Las Vegas includes comments from a number of reporters that specialize in Microsoft coverage.  My Windows Phone 7 (running the NoDo update on an AT&T phone thanks to the intervening magic of technology pixies) is fantastic, but it's hard to recommend this train wreck to law firms as the mobilie solution for attorneys.  I'll take a wait-and-see-and-don't-hold-my-breath approach as we run through this firedrill again in the fall with the much more substantial "Mango" update.