FAA section 1 held to exempt some California truck drivers from FAA coverage in Nieto v. Fresno Beverage Co.

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The arbitration battle lines have somewhat diminished in their spectacular scope, but that doesn’t mean the war is entirely over. Case in point: in Nieto v. Fresno Beverage Co. (certified for publication March 22, 2019), the Court of Appeal (Fifth Appellate District) affirmed a trial court ruling that found beverage company deliver drivers to be exempt from Federal Arbitration Act (9 U.S.C. §1 et seq., the “FAA”) by operation of the exemption in Section 1 for what the Supreme Court has denominated “transportation workers.”

The case is not too long of a read, but it nevertheless does a thorough job of reviewing decisions addressing the Section 1 exemption (see pages 6-13 for the state of affairs).

There is also a quick reminder in the discussion about waiver of arguments not raised in the Opening Brief.

Kenneth H. Yoon, Stephanie E. Yasuda, and Brian G. Lee of Yoon Law and Douglas Han, Shunt Tatavos-Gharajeh, and Daniel J. Par of Justice Law Corporation represented the prevailing plaintiff on appeal.

Perfunctory certification order reversed and sent back to the trial court in Myers v. Raley's

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The standard of review governing certification orders is effectively unique to class actions. As the Supreme Court explained in Ayala v. Antelope Valley Newspapers, Inc. 59 Cal.4th 522 (2014): “We review the trial court’s actual reasons for granting or denying certification; if they are erroneous, we must reverse, whether or not other reasons not relied upon might have supported the ruling.” Id., at 530. In other words, only the stated reasons are reviewed under the abuse of discretion standard. And if a stated reason includes a legally erroneous provision, that, by definition, constitutes and abuse of discretion. The record is not searched for an alternative basis to affirm.

In Myers v. Rayey’s (March 12, 2019), the Court of appeal (Third Appellate District) [Yolo!] concluded that one paragraph of substance was insufficient to permit review, since, without a statement of reasoning and analysis, there is no way to meaningfully review what is simply an ultimate conclusion:

To turn to the record to concoct some basis for the trial court’s denial of certification is to abolish the relevant standard of review, ignore the trial court’s reasoning, and apply ordinary appellate review contrary to the legion of cases that prohibit appellate revisionism. This we cannot do.

Slip op., at 15. As part of its discussion of the insufficiency of a “perfunctory” order, the Court explicitly disagreed with Dailey v. Sears, Roebuck & Co., 214 Cal. App. 4th 974 (2013), which had affirmed an exceedingly terse certification denial order.

This hits close to home, as I was unsuccessful on an appeal of a certification order with about as much (or little) in the way of analysis. If I had been in front of this panel…. And if it weren’t for those meddling kids!

I also get the feeling when reading the statement of facts that the Court had a strong opinion about how things should turn out after round two but couldn’t actually say how things should turn out.

No tolling for the wicked, at least when it comes to Fed. R. Civ. P. 23(f) petitions

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In a move that surely caused money to change hands between law nerds gambling on federal rules interpretations through off-shore gambling sites, the United States Supreme Court held, in Nutraceutical Corp. v. Lambert (February 26, 2019), that Fed. R. Civ. P. 23(f) — the portion of Rule 23 that permits parties to request permission for interlocutory review of class certification decisions within 14 days of the issuance of the decision — is a mandatory, but nonjurisdictional, claim-processing rule, and therefore not subject to tolling or other exceptions for reasons of equity or fairness. The decision was unanimous.

In Moorer v. Noble L.A. Events Inc., the Court of Appeal confirms that a PAGA plaintiff can't keep the aggrieved employee share for himself

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In Moorer v. Noble L.A. Events Inc. (February 27, 2019), the Court of Appeal (Second Appellate District, Division Seven) definitively answered the question of whether the twenty-five percent share of a PAGA action that goes to “aggrieved employees” can be retained by the plaintiff bringing the action as a type of relator share. No, you can’t do that:

Moorer contends that because a PAGA action is a type of qui tam action, under which the private citizen enforces a statute on behalf of the government, the 25 percent of the civil penalties not allocated to the government should be distributed to the aggrieved employee who brings the PAGA action. Although Moorer asserts policy arguments for why this approach would serve the goals of PAGA, the Supreme Court in Iskanian v. CLS Transportation Los Angeles, LLC, supra, 59Cal.4th 348 (Iskanian) held otherwise. As the Supreme Court explained, a PAGA representative action “conforms to the traditional criteria” for bringing a qui tam action, “except that a portion of the penalty goes not only to the citizen bringing the suit but to all employees affected by the Labor Code violation.” (Iskanian, at p.382;see Williams v. Superior Court (2017) 3Cal.5th 531, 545 (Williams) [PAGA “deputiz[es]employees harmed by labor violations to sue on behalf of the state and collect penalties, to be shared with the state and other affected employees”].)

Slip op., at 7-8.

A word to the (un)wise...

Work product gets reused by other attorneys all the time in the legal profession. No big deal, right? If someone crafts a good argument on an issue, and someone else is facing that same issue, it makes sense to present that good argument. I take no issue with that.

What I do take issue with, however, is false attribution of the original source of the argument. That treads into dangerous terrain. I note this distinction because it has come to my attention that an “enterprising” young lawyer out there copied a large number of very elaborately formatted and designed Microsoft Word templates and then began passing them off as his own to other employers. Re-using an argument I’ve created is fine. Who could blame you really? But to tell an employer that you bring value because of the hard work that went into creating the templates that you ripped? That’s just shady. I am providing this public service announcement while maintaining the anonymity of the little rapscallion in the hope that this friendly note will encourage more honest disclosures going forward. By the way, I have the very first versions of many of those templates (like the mediation brief format I devised to resemble an appellate brief, rather than a letter or a pleading), creation-date-stamped and all, so I could prove my point if I had no other option…

A word to the…wise.

Timbs v. Indiana to be cited in PAGA cases in 3...2...1...

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On Wednesday, February 20, 2019, the United States Supreme Court held, in Timbs v. Indiana, that the Eighth Amendment’s ban on excessive fines applies to the states. You can find plenty of analysis about this decision out there as it applies to things like state asset forfeiture laws, so I won’t even try to duplicate all of that analysis here, But it occurs to me that we should expect to see this holding tossed into the mix in PAGA cases on the theory that a large PAGA penalty violates the Eighth Amendment. How well that works remains to be seen, since, just spitballing here, a large PAGA penalty is pretty much only going to arise when an employer has lots of employees and violates lots of wage and hour provisions lots of times. Of course, out at the fringe, this argument might have some traction. I’m sure we’ll see in the next few years.

I'm moving to an up-and-coming employment law firm...

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A awesome opportunity came my way quite recently, and I can now announce that I am joining Moon & Yang, effective February 25, 2019, where I will be focusing exclusively on employment class actions. I received quite a vote of confidence from the partners, for which I am very grateful. With a surging employment practice, this is a chance to great things.

In Gilberg v. Cal. Check Cashing, Ninth Circuit extends Syed, holding that FCRA precludes all surplussage in background check disclosures

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In Gilberg v. California Check Cashing Stores, LLC (9th Cir. Jan. 29, 2019), the Ninth Circuit confirmed that Syed v. M-I, LLC, 853 F.3d 492 (9th Cir. 2017) applied to any surplussge in employment background check disclosures required by the Fair Credit Reporting Act.

I did that. Weird flex, but okay.

Slip opinion available to download here.

Petition for Review of PAGA decision denied in Huff v. Securitas Security Services USA

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I previously mentioned the surprising appellate court opinion in Huff v. Securitas Security Services USA (May 23, 2018). When it was issued, I was certain that review would be requested, and I would not have been surprised if review had been granted. However, I missed the fairly quick denial of review and depublication. That denial issued on August 8, 2018. Sorry I missed that; this is a noteworthy opinion.

Check out the September 12, 2018 edition of the Daily Journal for a pithy comment on Troester

As in full of pith. With a young attorney in my firm, Lilit Ter-Astvatsatryan, we wrote an opinion column for the Daily Journal, published on September 12, 2018 and entitled Unaccounted Time: Reading the tea leaves of Troester. Wait, something is wrong with that. If Lilit is a young attorney, then I am old. So let’s start again…

With a colleague at my firm, Lilit Ter-Astvatsatryan, we wrote an opinion column for the Daily Journal, published on September 12, 2018 and entitled Unaccounted Time: Reading the tea leaves of Troester. Much better.

I congratulate Lilit on her first foray into craven and shameless self-promotion.