Source: http://thecomplexlitigator.com/post-data/category/Class+Actions%3A++Damages
Timestamp: 2019-04-20 09:14:57+00:00

Document:
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.
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.
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!
Wang v. Chinese Daily News, Inc. (9th Cir. Sept. 27, 2010) is something of a kitchen sink of class action issues. Among other things, the Ninth Circuit affirmed (1) the concurrent prosecution of a FLSA opt-in collective action and a Rule 23 opt-out class action, (2) the invalidation of Rule 23 opt-outs due to coercion, (3) the decision to conduct a corrective opt-out process after the trial, and (4) certification under Rule 23(b)(2). The Court also held that the UCL was not preempted by the FLSA.
Bateman v. American Multi-Cinema, Inc. (9th Cir. Sept. 27, 2010) concerned the singular issue of a class certification denial on superiority grounds. The Ninth Circuit concluded that none of the three grounds relied upon by the district court — the disproportionality between the potential statutory liability and the actual harm suffered, the enormity of the potential damages, or AMC’s good faith compliance — justified the denial of class certification on superiority grounds.
Both opinions are substantial, and I will try to give both an extended treatment this evening. Full disclosure: Greg Karasik of Spiro Moss represents Plaintiff Bateman.
We conclude that because Civil Code section 3345 authorizes the trebling of a remedy only when it is in the nature of a penalty, and because restitution under the unfair competition law is not a penalty, an award of restitution under the unfair competition law — which plaintiffs seek here — is not subject to section 3345's trebling provision.
Slip op., at 2. You can find more analysis of the reversed decision from the Court of Appeal at The UCL Practitioner.
While it deserves a more substantial discussion, Evans v. Lasco Bathware, Inc. (November 6, 2009) requires at least a brief mention. In Evans, the Court of Appeal (Fourth Appellate District, Division One) reviewed an Order denying class certification. The Court of Appeal affirmed. The interesting elements of the opinion include (1) a discussion of when, in the Evans Court's view, damages become an issue of sufficient complexity to justify a denial of certification and (2) a discussion of "liability only" certification. In this case, the complications arising when a defective shower pan caused varying degrees of damages in different homes convinced the Court to reject the "liability only" certification option in this case. Nevertheless, that aspect of class actions is so infrequently discussed in California that it is of note that it was even considered here.
Civil Code section 3345 (section 3345) authorizes the award of an enhanced remedy—up to three times greater than the amount of a fine, civil penalty "or any other remedy the purpose or effect of which is to punish or deter" that would otherwise be awarded—in actions by or on behalf of senior citizens or disabled persons seeking to "redress unfair or deceptive acts or practices or unfair methods of competition." Is this enhanced remedy available in a private action by senior citizens seeking restitution under California’s unfair competition law (Bus. & Prof. Code, § 17200 et seq.)?
(Slip op., at p. 2.) Can the protected classification of senior citizens receive triple UCL restitution? That's quite a question. What might be more suprising at first blush is that the Court of Appeal said, "Yes."
(Slip op., at pp. 5-6.) Many years later, the legislature determined that senior citizens were regular targets of unfair competition schemes and required additional protection. A variety of potential statutes and amendments to existing laws were considered, including revisions to the UCL and the CLRA. (Slip op., at pp. 6-10.) Sweeping legislation was finally passed.
Third, it added section 3345 to the Civil Code, authorizing an enhanced remedy in actions brought by or on behalf of senior citizens seeking redress for "unfair or deceptive acts or practices or unfair methods of competition." (§ 3345, subd. (a).) Section 3345, subdivision (a), limits the new provision to actions "brought by, or on behalf of, or for the benefit of senior citizens or disabled persons, as those terms are defined in subdivisions (f) and (g) of [Civil Code] Section 1761 to redress unfair or deceptive acts or practices or unfair methods of competition." Section 3345, subdivision (b), provides the enhanced remedy: "Whenever a trier of fact is authorized by a statute to impose either a fine, or a civil penalty or other penalty, or any other remedy the purpose or effect of which is to punish or deter, and the amount of the fine, penalty, or other remedy is subject to the trier of fact’s discretion, the trier of fact shall consider all of the following factors, in addition to other appropriate factors, in determining the amount of fine, civil penalty or other penalty, or other remedy to impose. Whenever the trier of fact makes an affirmative finding in regard to one or more of the following factors, it may impose a fine, civil penalty or other penalty, or other remedy in an amount up to three times greater than authorized by the statute, or, where the statute does not authorize a specific amount, up to three times greater than the amount the trier of fact would impose in the absence of that affirmative finding."
Under the plain language of section 3345 two prerequisites must be satisfied before its enhanced remedy may apply: (1) The action must be brought by or on behalf of senior citizens or disabled persons seeking redress for "unfair or deceptive acts or practices or unfair methods of competition"—plainly satisfied here; and (2) the action must be one in which the trier of fact is authorized by a statute to impose a fine, civil penalty or any other penalty the purpose or effect of which is to punish or deter.
(Slip op., at p. 16-17.) I can't imagine that this ruling won't at least generate a Petition for Review.
UPDATE: The Court of Appeal issued a modification to the opinion, adding a footnote with no change in the judgment.
Are meal period premiums part of the "regular rate" in FLSA cases? One District Court says, "No."
In a LinexLegal.com news article entitled Must Employers Include Meal-Period Premium Payments in the "Regular Rate" Used to Compute the Overtime Owed to Their Employees?, it is reported that, on February 25, 2009, Judge Saundra B. Armstrong of the U.S. District Court for the Northern District of California held that meal-period premiums mandated by California Labor Code Section 226.7 need not be included in the "regular rate" for purposes of calculating an employee's overtime compensation under the federal Fair Labor Standards Act (FLSA), 29 U.S.C. para 201 et seq. The ruling was issued in the context of a putative state-wide class-action in Rubin v. Wal-Mart Stores, Inc., No. CV 08-4214.
If you happen to read the UCL Practitioner with any regularity, you know that Kimberly Kralowec is as cool a customer as they come. That's why I pay careful attention when she let's loose in prose on any appellate decision touching on the UCL and related False Advertising Law. Her post earlier today on the recent Court of Appeal decision in Kwikset Corp. v. Superior Court (Benson) (Feb. 25, 2009) (Fourth Appellate District, Division Three) is the most critical commentary that I can recall reading (but that criticism is well-justified, I think). I've commented previously about my own concern that Division Three of the Fourth Appellate District has moved out of step with California's policies that favor consumer protection and resolution of issues with the class action device. But the most recent Kwikset decision is little more than judicial legislation. Be sure to check out what the UCL Practitioner has to say about Kwikset.
Whether punitive damages are available for violations of various labor code provisions has been something of an open question in California. You may recall, for instance, that a jury found against Wal-Mart in the matter of Savaglio v. Wal-Mart, awarding $172 million to the class members, including $115 million in punitive damages. In that particular case, after Wal-Mart argued that punitive damages amounted to a penalty on a penalty, Judge Ronald Sabraw rejected the argument that meal and rest break premiums were penalties. That particular finding was later confirmed as the correct interpretation in Murphy v. Kenneth Cole (2007) 40 Cal.4th 1094. In any case, without clear guidance on the question, it has seemed prudent to at least request punitive damages for such violations and let a Court say that they weren't recoverable.
“We are convinced, both by application of the "new right-exclusive remedy" doctrine and under more general principles that bar punitive damages awards absent breach of an obligation not arising from contract, punitive damages are not recoverable when liability is premised solely on the employer's violation of the Labor Code statutes that regulate meal and rest breaks, pay stubs, and minimum wage laws.
(Slip op., at pp. 10-11.) The Brewer case was an individual action, but it is covered here because of the significant impact on many wage & hour class actions. If you are curious about the "new right-exclusive remedy" doctrine, take a look at Rojo v. Kliger (1990) 52 Cal.3d 65.
It is worth noting that Savaglio remains on appeal and may ultimately affect this area of law. However, Savaglio has been stayed pending the outcome in Brinker, so it will be several years before that case moves forward.

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