Huff v. Securitas Security Services USA, Inc. finds broad standing for plaintiffs bringing PAGA claims; [UPDATED]

I haven't posted anything yet about Epiq Systems Corp. v. Lewis (what's there to say that hasn't been kicking around for years in various ways), but certainly that decision motivates a renewed focus on PAGA claims in California.  And would you look at that?!  Here's a new decision about PAGA.  In Huff v. Securitas Security Services USA, Inc., the Court of Appeal (Sixth Appellate District) examined the following question:

This case presents the question of whether a plaintiff who brings a representative action under the Private Attorneys General Act of 2004 (PAGA; Lab. Code, § 2698, et seq.) may seek penalties not only for the Labor Code violation that affected him or her, but also for different violations that affected other employees.

Slip op., at 1.  So at this point, I must admit that my assumption for about 5 seconds was that the answer would be a big "No, they may not."  To my surprise, the Court held to the contrary:

As we will explain, we conclude that PAGA allows an “aggrieved employee” –– a person affected by at least one Labor Code violation committed by an employer –– to pursue penalties for all the Labor Code violations committed by that employer.

Slip op., at 1.  That was unexpected.

The Court's primary analysis is well summarized by this passage:

When we interpret a statute our primary task is to ascertain the Legislature’s intent and effectuate the purpose of the law. We look first to the words of the statute itself as the most direct indicator of what the Legislature intended. (Hsu v. Abbara (1995) 9 Cal.4th 863, 871.) PAGA provides in section 2699, subdivision (a) that “any provision of this code that provides for a civil penalty to be assessed and collected by the Labor and Workforce Development Agency or any of its departments, divisions, commissions, boards, agencies, or employees, for a violation of this code, may, as an alternative, be recovered through a civil action brought by an aggrieved employee on behalf of himself or herself and other current or former employees pursuant to the procedures specified in Section 2699.3.” The statute then specifically defines “aggrieved employee” in section 2699, subdivision (c): “ ‘aggrieved employee’ means any person who was employed by the alleged violator and against whom one or more of the alleged violations was committed.”

As the trial court did, we interpret those provisions to mean that any Labor Code penalties recoverable by state authorities may be recovered in a PAGA action by a person who was employed by the alleged violator and affected by at least one of the violations alleged in the complaint. Indeed, we cannot readily derive any meaning other than that from the plain statutory language, and Securitas does not offer a reasonable alternative for what those provisions mean when read together.

Slip op., at 5-6.  After this, the Court spent a lot of time rejecting arguments that it should look to the legislative history (the Court held that when a statute is clear, it is not to consider legislative history) and other arguments about absurd results.  It rejected all of those arguments.

Of course, in good Apple presentation fashion, this case has a couple of items that qualify as a "one more thing" moment.  One of those moments included the following:

Section 2699, subdivision (f) creates a civil penalty for any Labor Code violation for which a penalty is not provided elsewhere in the law. The penalties under section 2699, subdivision (f) are “one hundred dollars ($100) for each aggrieved employee per pay period for the initial violation and two hundred dollars ($200) for each aggrieved employee per pay period for each subsequent violation.” Securitas posits that using the definition of aggrieved employees in section 2699, subdivision (c) to calculate those penalties would allow over-counting in some cases to include weeks worked by employees affected by just one of the Labor Code violations alleged in the complaint, even if it is not the one giving rise to the penalties imposed by section 2699, subdivision (f). To the contrary, it is entirely possible to harmonize the two provisions. The method of calculation under section 2699, subdivision (f) imposes penalties based on the total number of employees that have been affected by an employer’s Labor Code violations. Though Securitas calls that “over-counting,” it is not impermissible for the Legislature to impose penalties measured in that way. Even if the method of calculation provided for by section 2699, subdivision (f) is something of a blunt instrument, it is not our role to rewrite the statute. (People v. Garcia (1999) 21 Cal.4th 1, 14.) Separation of powers principles require us to interpret the law as written, “and leave for the People and the Legislature the task of revising it as they deem wise.” (Id. at p. 15.) We also note that PAGA gives a court broad discretion to “award a lesser amount than the maximum civil penalty amount … if, based on the facts and circumstances of the particular case, to do otherwise would result in an award that is unjust, arbitrary and oppressive, or confiscatory.” (§ 2699, subd. (e)(2).) So the statute incorporates a remedy if the penalty calculation is unfair or arbitrary as applied to a particular employer.

Slip op., at 12-13.  Let that sink in for a moment.  If I am not imaging things, I believe that this means that for subdivision (f) penalties, the Court held that the correct method of counting up the penalties would be to count the total number of employees that qualify as "aggrieved" by any violation an multiply that number by the $100 or $200 penalty.  Oh my.  So, if this stands the test of time, more employers will avoid class actions with class waivers in their arbitration agreements, but if there are violations of any of the sections included in PAGA, the penalty calculation for that one year will be absolutely brutal.  Big winner?  The LWDA.  For California employers in the long run it will likely be a slight loss.  While Epiq will cut into class actions, that will be countered with larger penalty recoveries.  And since the statutory period is just one year, an employer that doesn't fully correct issues will see plaintiffs returning to that well with regularity.

Respondent and Plaintiff was successfully represented by Michael Millen.

UPDATE: In response to a question about my post, I want to clarify something that is potentially unclear. When I wrote, “…if there are violations of any of the sections included in PAGA, the penalty calculation for that one year will be absolutely brutal,” I was referring to the penalty look-back period of one year prior to filing. In other words, I was not saying that a specific one year period was implicated by this decision. I was only observing that the penalties for a one-year statute of limitation could be high, compared to a four-year statute in a wage and hour class action (plus whatever time passes while a case is pending).

Bates v. Rubio's Restaurants, Inc. reminds defendants to be sure the class list is complete before the money starts flowing

While most of this opinion has nothing to do with class actions and everything to do with whether a judge can sua sponte reconsider a prior order and then recuse himself in the same minute order, Bates v. Rubio's Restaurant's Inc. (November 30, 2009) includes an important lesson for the administration of class action.  The Court of Appeal (Fourth Appellate District, Division Three) affirmed an interesting order of the trial court that had a significant effect on the constituency of a class in a settlement.  The concise summary of key events sets the stage for the discussion that follows in the opinion:

The parties in this wage and hour class action litigation entered into a $7.5 million settlement agreement, providing for three payments of $2.5 million to approved class members. After the initial $2.5 million payment was distributed among 529 approved class members, defendant and appellant Rubio‟s Restaurants, Inc. (Rubio‟s) realized it had not provided the names of all potential class members to the settlement administrator. One hundred forty potential class members had not received notification of the settlement.

After postjudgment briefing and status conferences, the court ruled that the 140 late-identified class members should receive notice and be folded into the settlement agreement. Later, the judge reconsidered his ruling sua sponte and vacated it. In the same minute order, the judge, citing Code of Civil Procedure section 170.1, subdivision (a)(6)(A)(i), then recused himself from any further proceedings in the matter, in the interests of justice.

Slip op., at 2.  Rubio's argued that the recusal negated the validity of the portion of the order vacating the prior ruling.  The Court of Appeal said that was nonsense, concluding that the trial court could properly rescing its earlier ruling and later, in the same minute order, recuse itself.

The only reason for all the fuss was the fact that 140 class members can file another class action and state with great certainty that they didn't receive notice of the prior settlement.  There's your class action angle.

It is possible to go too far in litigation, and Nazir v. United Airlines, Inc. provides frightening examples of that excess

Sometimes litigation is complex because the lawyers make it that way.   So often those litigation excesses are tolerated by Courts and achieve their goals, which just encourages the bad behavior.  Then it spreads like mold, getting copied.  However, just as my cynicism reaches that tipping point, a Court of Appeal authors a new opinion to right the ship.  For example, in Clement v. Alegre (September 23, 2009), the Court of Appeal (First Appellate District, Division Two) weighed in on discovery conduct.  See September 24, 2009 blog post.  And I am pleased to report that the First Appellate District, Division Two, is back business setting litigators back on the straight and narrow with their latest opinion, Nazir v. United Airlines, Inc. (October 9, 2009).

Since complex litigation is in the eye of the beholder, I say that monstrous motions for summary adjudication are "complex."  By that standard, Nazir is topical, and I proceed.  Nazir is about the summary judgment procedure.  Nazir begins by describing the terrain into which the opinion will descend:

Our Supreme Court has said that the purpose of the 1992 and 1993 amendments to the California summary judgment statute was “to liberalize the granting of motions for summary judgment.” (Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 854.) It is no longer called a “disfavored remedy.” It has been described as having a salutary effect, ridding the system, on an expeditious and efficient basis, of cases lacking any merit. And that it has, as shown by the many cases affirming a summary judgment.

At the same time, the summary judgment procedure has become the target of criticism on a number of fronts. Some particular criticism is directed to the procedure in employment litigation, including that it is being abused, especially by deep pocket defendants to overwhelm less well-funded litigants. More significantly, it has been said that courts are sometimes making determinations properly reserved for the factfinder, sometimes drawing inferences in the employer‟s favor, sometimes requiring the employees to essentially prove their case at the summary judgment stage. Here we confront the poster child for such criticism, in a case involving what may well be the most oppressive motion ever presented to a superior court.

Slip op., at 1.  In a suit for harassment, discrimination and retaliation, Defendants filed motions for summary judgment or summary adjudication, and the court described the ensuing papers as follows:

Defendants filed a motion for summary judgment/summary adjudication, seeking adjudication of 44 issues, most of which were not proper subjects of adjudication. Defendants' separate statement was 196 pages long, setting forth hundreds of facts, many of them not material—as defendants' own papers conceded. And the moving papers concluded with a request for judicial notice of 174 pages. All told, defendants' moving papers were 1056 pages.

Plaintiff's opposition was almost three times as long, including an 1894-page separate statement, papers the trial court would later disparage as "mostly verbiage," a description with which, as will be seen, we disagree. Curiously, no such criticism was leveled at defendants' papers, not even those in reply, papers that defy description.

Defendants' reply included, and properly, their response to plaintiff's additional disputed facts. Defendants' reply also included, not so properly, a 297-page "Reply Separate Statement" and 153 pages of "Exhibits and Evidence in Support of Defendants' Reply." And the reply culminated with 324 pages of evidentiary objections, consisting of 764 specific objections, 325 of which were directed to portions of plaintiff's declaration, many of which objections were frivolous. In all, defendants filed 1150 pages of reply.

Slip op., at 2.  The Court then summarized the task before it:

This, then, is what is before us for de novo review: an order granting summary judgment that purports to sustain without explanation 763 out of 764 objections to evidence, in a record the likes of which we have never seen—not here, not in the combined 11 years of law and motion experience of the members of this panel.

Slip op., at 3.  But wait! This is only the third page of an opinion spanning over 50 pages.  Consider these comments about the record on appeal:

On August 30, 2007, defendants filed a "Motion for Summary Judgment or, in the Alternative, Summary Adjudication," with moving papers totaling 1056 pages. Plaintiff filed his lengthy opposition which, as quoted above, the trial court described as "mostly verbiage, and utterly lacking in the identification and presentation of evidence demonstrating a disputed issue of fact."

Seemingly emboldened by this description, defendants' brief here begins this way: "As in Macbeth's soliloquy, Appellant's Opening Brief (AOB), like his summary judgment opposition below, is full of 'sound and fury, [but ultimately] signifying nothing.' Despite filing an 1894 page(!) opposition separate statement, which the trial court found . . . in a manner deliberately calculated to obfuscate whether any 'purportedly disputed facts were actually controverted by admissible evidence,' the trial court properly granted summary judgment in this case. As with Nazir's opposition statement, his AOB is 'mostly verbiage, and utterly lacking in the identification and presentation of evidence demonstrating a disputed issue of fact.'"

Passing over whether such disparagement is effective advocacy, the "girth" of materials before the trial court began with defendants, whose 1056 pages of moving papers were in great part inappropriate, beginning with the motion itself.

Slip op., at 4.  The Court then spends considerable time summarizing the defects in the Separate Statement:

The deficiencies in the motion pale in comparison to those in the separate statement. "Separate statements are required not to satisfy a sadistic urge to torment lawyers, but rather to afford due process to opposing parties and to permit trial courts to expeditiously review complex motions for [summary adjudication] and summary judgment to determine quickly and efficiently whether material facts are undisputed." (United Community Church v. Garcin (1991) 231 Cal.App.3d 327, 335.) The separate statement "provides a convenient and expeditious vehicle permitting the trial court to hone in on the truly disputed facts." (Collins v. Hertz Corp. (2006) 144 Cal.App.4th 64, 74.) That hardly describes defendants' separate statement here.

The separate statement is, as noted, 196 pages. The exact number of supposedly material facts is impossible to know without actually counting them, as many of the facts are often repeated with the same numbers. But whatever the number, many of the facts are not material, as defendants concede, their separate statement beginning with this quizzical footnote: "The facts are deemed undisputed for purposes of this motion only and do not constitute any admission. For purposes of this motion only, Plaintiff's statements are accepted as true. Not all facts listed herein are necessarily material, as certain facts are asserted for background, foundational, information, or other purposes. Also, by including the facts set forth herein, Defendants are not waiving their right to challenge the admissibility of such facts in connection with this motion or for other purposes in this case."

We offer two observations about this footnote. The first is that it ignores the advice from the leading practice treatise: "PRACTICE POINTER: [¶] . . . [¶] Include only those facts which are truly material to the claims or defenses involved because the separate statement effectively concedes the materiality of whatever facts are included. Thus, if a triable issue is raised as to any of the facts in your separate statement, the motion must be denied!" (Weil & Brown, Cal. Practice Guide: Civil Procedure Before Trial (The Rutter Group 2009) § 10:95.1, p. 10-35.) The second is that there seems to be some disconnect between defendants' concession that "Plaintiff's statements are accepted as true" and defendants' 325 objections to plaintiff's testimony. In short, defendants' separate statement was particularly inappropriate.

The deficiencies carried over to the reply papers, which included a 297-page reply separate statement. There is no provision in the statute for this. The reply also included 153 pages of "Exhibits and Evidence in Support of Reply." No such evidence is generally allowed. (San Diego Watercrafts, Inc. v. Wells Fargo Bank (2002) 102 Cal.App.4th 308, 316.) And, of course, there were the objections, 764 in all, which we discuss below. Suffice to say that there is plenty of blame for the "girth" the trial court criticized, most of which, we conclude, lies at the feet of defendants.

But neither the inappropriateness of defendants' papers nor their excessive volume is the worst aspect of those papers. No, that is the misleading picture those papers presented. An article coauthored by an experienced Superior Court judge has "intended to point out, in ascending order of seriousness, certain fatal errors and other problems [the court has] encountered" in connection with summary judgment motions, at the very top of which are motions "that attempt to 'hide' triable issues of material fact."  (Brenner & March, Use and Abuse of MSJs: A View from the Bench (2007) 49 Orange County Law 34, 37.) The article admonishes that a motion "should never cite evidence out of context in an effort to conceal a clearly triable issue of material fact," going on to cite two recent examples in that judge's court, one in a sexual harassment case, the other in one for wrongful termination. (Id. at p. 37.) Here, in vivid detail, is a third.

Slip op., at 5-7.  The Court was then compelled to spend considerable time discussing the objections to plaintiff's evidence, as the state of admitted evidence governed the Court's de novo review of the Motions themselves.   Without quoting the many pages of discussion about the frivolous nature of the many objections asserted by defendants, the Court, at one point in the opinion writes, "Can this be serious? Can counsel see themselves rising at trial with those objections while plaintiff is testifying before a jury?"  Slip op., at 11.  The Court then offered this advice in a footnote:

We sometimes "hear" that a common practice in cases staffed by multiple levels of lawyers is to assign the most junior lawyer to "do the objections," which was apparently done here. Perhaps a wiser practice would be have the most experienced lawyer, presumably with a better understanding of the law of evidence, deal with the objections.

Slip op. at 11, n. 6.

The balance of the Opinion, once it moves beyond its focus on the form of the filings before the Court, is an excellent example of detailed application of facts to the complex schemes of law governing harassment, continuing violations, discrimination, exhaustion of administrative remedies and the like.  If you don't practice in the area of employment law, the first third of the opinion is still highly relevant, and the balance is a good example of what to consider when bringing or opposing a motion for summary judgment/adjudication.

The Court ends its opinion by reminding trial courts that they possess inherent power to correct abusive summary judgment filings:

The deficiencies in summary judgment papers can appear in a variety of places, and the approaches taken by the courts to address the deficiencies can vary as well, limited only by the inspiration or creativity of the particular law and motion judge—and, of course, due process. There is no universal solution, no panacea, and we do not even attempt to offer suggestions. We write here only to confirm the existence of the inherent power, to remind trial courts of it, and to encourage them to use it when appropriate.

Slip op., at 51.  I think this panel is too modest.  They seem more than up to the challenge of suggesting methods to curtail incidents like the one chronicled in its Opinion.  At any rate, they do yeoman's work and deserve a raise (not that this mismanaged, financially destitute state could provide one).

The UCL Practitioner has already identified some press coverage of this decision in a post from earlier today.

Hernandez v. Vitamin Shoppe (Spencer, Appellant) examines limits on advocacy by class action settlement objector

Unlike single party cases, class actions routinely have more than one plaintiff that purports to represent the same (or similar) class. In Hernandez v. Vitamin Shoppe (Spencer, Appellant) (June 17, 2009), the Court of Appeal (First Appellate District, Division Two) examined the ability of trial courts to set limits on the methods and extent of that advocacy:

After the trial court conditionally certified the class for settlement purposes, appellant Jeffrey Spencer, attorney for appellant Lisa Hernandez, a plaintiff in Perry, sent a letter to various class members urging them to opt out of the settlement, and to retain him as counsel against Vitamin Shoppe in another class action involving the same matters. The court subsequently issued orders and rulings regarding these communications, barring Spencer from certain future communications, and granting monetary sanctions against him, which appellants Hernandez and Spencer challenge on appeal. In the published portion of this opinion, we affirm these rulings and orders, except that we reverse the trial court‘s imposition of monetary sanctions against Spencer.

Slip op., at 1-2. Later, the Court described aspects of the letter to class members:

Spencer, identifying himself as counsel in Thompson, represented in his letters to various members of the conditionally certified class that if the Perry settlement were approved, "substantial compensation will be forfeited," that "you will not be able to recover compensation for all the rest and meal periods you were denied or for all of the overtime compensation or penalties you are owed," and that "[u]nder California law you are entitled to an extra hour of pay for each rest and meal period that you missed during your employment." He advised them to "protect" themselves from the Perry settlement by opting out of the class and joining the Thompson action, which he stated was "in progress," encouraged them to request exclusion from the settlement, and warned that those who did not exclude themselves would be "stuck" with the settlement‘s terms. He solicited them to retain him as counsel, or to contact him for advice or assistance with respect to excluding themselves from the class, and enclosed his retainer agreement.

Slip op., at 4-5. So, to recap, there are acceptable means of objecting to a proposed class action settlement, and there are unacceptable means. This opinion concerns one of those unacceptable means. But I will note that it is a tough position to be in as an attorney for the same putative class if you believe that you can obtain a better result for that class. In the end, class action settlements are approved not on the basis of whether they are the best possible settlement; instead, the proposed settlement need only be good enough.