Source: https://www.uclpractitioner.com/class_actions_discovery/
Timestamp: 2019-04-23 06:12:47+00:00

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Posts categorized "Class actions - discovery"
Ninth Circuit on admissibility of evidence at the class certification stage: Sali v. Corona Regional Med. Ctr.
Because a class certification decision “is far from a conclusive judgment on the merits of the case, it is ‘of necessity . . . not accompanied by the traditional rules and procedure applicable to civil trials.’” [In re] Zurn Pex [Plumbing Prod. Liab. Litig.], 644 F.3d [604,] 613 [(8th Cir. 2011)] (quoting Eisen v. Carlisle & Jacquelin, 417 U.S. 156, 178 (1974)). Notably, the evidence needed to prove a class’s case often lies in a defendant’s possession and may be obtained only through discovery. Limiting class-certification-stage proof to admissible evidence risks terminating actions before a putative class may gather crucial admissible evidence. And transforming a preliminary stage into an evidentiary shooting match inhibits an early determination of the best manner to conduct the action.
It follows that we have found an abuse of discretion where a “district court limited its analysis of whether” class plaintiffs satisfied a Rule 23 requirement “to a determination of whether Plaintiffs’ evidence on that point was admissible.” Ellis v. Costco Wholesale Corp., 657 F.3d 970, 982 (9th Cir. 2011). Although we have not squarely addressed the nature of the “evidentiary proof” a plaintiff must submit in support of class certification, we now hold that such proof need not be admissible evidence.
Inadmissibility alone is not a proper basis to reject evidence submitted in support of class certification. “Neither the possibility that a plaintiff will be unable to prove his allegations, nor the possibility that the later course of the suit might unforeseeably prove the original decision to certify the class wrong, is a basis for declining to certify a class which apparently satisfies” Rule 23. Blackie v. Barrack, 524 F.2d 891, 901 (9th Cir. 1975). Therefore, in evaluating a motion for class certification, a district court need only consider “material sufficient to form a reasonable judgment on each [Rule 23(a)] requirement.” Id. The court’s consideration should not be limited to only admissible evidence.
Slip op. at 13-15 (footnote omitted).
In CVS Pharmacy, Inc. v. Superior Court (DeLuca), ___ Cal.App.4th ___ (Sept. 15, 2015; pub. ord. Oct. 15, 2015), the Court of Appeal (Third Appellate District) reversed the trial court's order allowing a proposed class representative who lacked standing to obtain discovery of class member contact information prior to class certification in order to identify a substitute representative.
Distinguishing one of the leading opinions, CashCall, Inc. v. Superior Court, 159 Cal.App.4th 273 (2008) (discussed here), the panel emphasized that the named plaintiff had never had standing to begin with, and that the putative class members were likely aware of the specific violations, so could assert them individually.
On August 19, 2015, the Supreme Court granted review in Williams v. Superior Court (Marshalls of CA, LLC), No. S227228.
In this case, the plaintiff moved to compel production of employee names and contact information in a representative action under PAGA. See Williams v. Superior Court (Marshalls of CA, LLC), 236 Cal.App.4th 1151 (May 15, 2015), review granted (slip op. at 2). The trial court largely denied the motion, ordering production only as to employees who worked in the same store as the plaintiff, and holding that broader production would be allowed, if at all, only after the plaintiff had been deposed, and only if the plaintiff could prove that the case has factual merit. Id.
At this nascent stage of plaintiff’s PAGA action there has as yet been no discovery—plaintiff has not even sat for his own deposition. The litigation therefore consists solely of the allegations in his complaint. But plaintiff alleges therein only that at the Costa Mesa store, he and perhaps other employees at that store were subjected to violations of the Labor Code. Nowhere does he evince any knowledge of the practices of Marshalls at other stores, nor any fact that would lead a reasonable person to believe he knows whether Marshalls has a uniform statewide policy. That being the case, it was eminently reasonable for the trial judge to proceed with discovery in an incremental fashion, first requiring that plaintiff provide some support for his own, local claims and then perhaps later broadening the inquiry to discover whether some reason exists to suspect Marshalls’ local practices extend statewide.
Further, a trial court must consider the costs of any discovery and take reasonable steps to promote efficiency and economy. Statewide discovery that includes the mailing of Belaire-West notices and tabulation of responses is costly. By staging discovery incrementally, the trial court delayed the incursion of potentially unnecessary costs until it becomes clear they are warranted.
Slip op. at 4-5. The Court also held that the "employees’ privacy interests outweigh plaintiff’s need to discover their identity at this time." Id. at 7. First, the Court held, the plaintiff would have to be deposed, and then he would have to "establish [that the defendant's] employment practices are uniform throughout the company ...." Id.
Suffice it to say that this reasoning is problematic at best, and inconsistent with the Code of Civil Procedure at worst. The opinion is no longer citable in light of the order granting review. Although Williams is a representative PAGA action, not a class action, the Supreme Court's analysis is likely to have ramifications for discovery in class litigation.
At last year's CAOC convention, I pointed out during my presentation, "Discovery Techniques in Class Action Cases," that the California Judicial Council had painstakingly drafted a set of electronic discovery rules for California, but that Governor Schwarzenegger vetoed the implementing legislation for non-substantive reasons in September 2008.
The legislation was reintroduced last December, and on Monday, Governor Schwarzenegger signed A.B. 5, the Electronic Discovery Act. The full text of the Act is here. It takes effect immediately.
In Safeco Ins. Co. v. Superior Court, ___ Cal.App.4th ___ (Apr. 30, 2009), the Court of Appeal (Second Appellate District, Division Three) held that the trial court did not abuse its discretion by allowing precertification discovery of class member contact information.
The Court of Appeal (Second Appellate District, Division Seven) has handed down another interesting opinion on the right to pre-certification discovery of class member contact information. Crab Addison, Inc. v. Superior Court, ___ Cal.App.4th ___ (Dec. 30, 2008). The case is a putative class action for alleged overtime violations, and the opinion is noteworthy in several respects.
We attach no great significance to the fact that [the defendant] did not voluntarily disclose the identities of the witnesses whose contact information it sought to protect. As noted in Pioneer Electronics (USA), Inc. v. Superior Court, supra, 40 Cal.4th at page 373, “[c]ontact information regarding the identity of potential class members is generally discoverable, so that the lead plaintiff may learn the names of other persons who might assist in prosecuting the case. [Citations.] Such disclosure involves no revelation of personal or business secrets, intimate activities, or similar private information....” Disclosure of witnesses’ identities involves no greater invasion of privacy or revelation of personal information than the disclosure of their addresses and telephone numbers. Therefore, we can find no rationale for refusing to apply our holding in Puerto to the instant case.
From time to time, Joe’s Crab Shack (the “Company”) may be asked to provide your contact information, including your home address and telephone number, to third parties. The Company may be asked to provide such information in the context of legal proceedings, including class action lawsuits.
We understand that many employees may consider this information to be private and may not want it released. Accordingly, please indicate whether you consent to the disclosure of your contact information by marking the appropriate box.
‪___ No, I do not consent to the Company’s disclosure of my contact information to third parties.
___ Yes, I consent to the Company’s disclosure of my contact information to third parties.
___ I would like to be asked on a case-by-case basis whether I consent to the disclosure of my contact information to a particular third party, and my contact information should only be provided if I affirmatively consent in writing.
Gentry also highlights the dangers of placing in the employer’s hands the responsibility for notifying employees of the pending litigation and requiring employees to opt in to the litigation. Current employees may decline to opt in to the litigation for fear of retaliation by their employer. This in turn could immunize the employer from liability for violation of statutory wage and overtime requirements. This would violate the public policy protecting employee rights.
The public policy concerns expressed in Gentry weigh against enforcing a release form that may have the effect of waiving an employee’s right to notice of a pending class action lawsuit concerning the employer’s alleged violations of overtime and wage statutes. Gentry did not stop its analysis with public policy concerns, however.
The dates on the release forms here indicate that they were entered into after the litigation was filed. However, there is nothing in the record to suggest that the employees who indicated they did not want their contact information disclosed to third parties, or they wanted to consider disclosure on a case-by-case basis, did so knowingly, that is, with knowledge of the pending litigation and the fact the release form would affect their ability to be included in the class.
The language of the release forms was not sufficient to apprise employees that by checking the “no” box they were declining to have their contact information released to “plaintiffs seeking relief for violations of employment laws in the workplace that they shared.” (Puerto v. Superior Court, supra, 158 Cal.App.4th at p. 1253.) The release forms stated that CAI “may be asked to provide such information in the context of legal proceedings, including class action lawsuits.” We do not believe that a lay employee reading this language would realize that the reference to “class action lawsuits” meant lawsuits intended to vindicate their rights, rather than lawsuits by third parties against CAI that would be of no benefit to the employees.
Slip op. at 15-17. The opinion then discusses the language at the bottom of the document saying that, regardless of which box the employees checked, the employer might still be compelled by law to produce their contact information. The trial court's order compelling production of class member contact information was such an event, so the document created no "heightened expectation of privacy." Id. at 17-18. The entire opinion is definitely worth a read.
MCLE presentation: "Discovery Techniques in Class Action Cases"
Thanks to everyone who attended the CAOC convention this month, and especially to those who attended the class action track on November 7. I really enjoyed hearing the speakers, who included Elizabeth Cabraser, Tim Blood, and Arthur Bryant. Also many thanks to David Arbogast for his work organizing the class action track.
Here is a copy of the powerpoint presentation from my segment, "Discovery Techniques in Class Action Cases." Most of the slides focus on case law on pre-certification discovery of class member contact information.
New class certification decision: Lee v. Dynamex, Inc.
The trial court was plainly disturbed by Lee’s failure to produce additional evidence to support a finding of community of interest among potential class members in terms of the predominance of common questions of law or fact, the typicality of Lee’s claims or the adequacy of his representation as the sole named plaintiff. Ordinarily, we would defer to a trial court’s exercise of discretion on these issues; but, in light of the trial court’s discovery order precluding identification of potential class members before certification, we conclude Lee was not provided with an adequate opportunity to meet his burden and, therefore, reverse the denial of the class certification motion with directions to permit discovery to proceed and then to conduct a new class certification hearing.
Slip op. at 11. The opinion also contains an interesting discussion of the "ascertainability" prong of certification. Id. at 7-10.
UPDATE: The Complex Litigator has a more detailed post on Lee.
Recent federal decision applies Pioneer Electronics to resolve dispute over discovery of class member contact information: Salazar v. Avis Budget Group, Inc.
In Salazar v. Avis Budget Group, Inc., 2007 WL 2990281 (S.D. Cal. Oct. 10, 2007), a federal district court applied the rules outlined in Pioneer Electronics and ordered the defendant to disclose the class members' contact information after an “opt-out” notice was given. Foreshadowing the Court of Appeal's ruling in CashCall, Inc. v. Superior Court, 159 Cal.App.4th 273 (2008), Magistrate Judge McCurine observed that “the minimal information Plaintiff requests is indeed contemplated under the Federal Rules of Civil Procedure … as basic to the discovery process.” Id. at *2. (See this prior blog post for more on CashCall.) He also expressed skepticism about the employer-defendant's professed solicitude for the class members' privacy rights, observing that its conduct suggested that its "concern about the privacy rights of the potential class members is actually driven more by [its own] self-interest." Id. Finally, he noted the importance of class actions generally (as did the Supreme Court in Pioneer Electronics): "[C]lass action lawsuits can serve a valuable social function in addressing the rights of the public. The voice of a class rings more loudly and garners more attention than a single voice."
In CashCall, Inc. v. Superior Court, ___ Cal.App.4th ___ (Jan. 24, 2008), the Court of Appeal (Fourth Appellate District, Division One) handed down another significant discovery-related opinion, holding that the trial court appropriately permitted "precertification discovery in a class action for the purpose of identifying class members who may become substitute plaintiffs in place of named plaintiffs who were not members of the class they purported to represent." Slip op at 2.
Unlike in First American, we conclude the potential for abuse of the class action procedure is not significant in this case. In First American, the plaintiff essentially "appointed himself enforcement officer for the California Department of Insurance settlement agreement" and "piggybacked" his class action onto that settlement agreement (possibly to obtain attorney fees). (First American, supra, 146 Cal.App.4th at p. 1577.) That scenario appears to exemplify the classic type of abusive class action of which CashCall warns. However, those circumstances do not exist in this case. There is no state or other investigation, much less a settlement, involving CashCall's secret call monitoring program. Absent continuation of the instant class action, there likely will be no other investigation of CashCall's conduct or potential relief obtained by class members for its alleged violations of their privacy rights. Furthermore, because only CashCall has knowledge of which customers' calls were monitored, the plaintiffs cannot be faulted for filing a class action based on the suspicion their privacy rights may have been violated and only later learning from CashCall that their calls had not been monitored (and therefore they do not have standing). Accordingly, unlike in First American, the potential for abuse of the class action procedure in this case is minimal. Neither the reasoning nor the result in First American persuades us that the trial court in this case abused its discretion by granting the plaintiffs' motion for precertification discovery of the identities of class members. Rather, we conclude the trial court, in applying the Parris balancing test, did not abuse its discretion.
CashCall, slip op. at 34-35 (citing Parris v. Superior Court, 109 Cal.App.4th 285 (2003)).
In deciding whether to order precertification discovery of the identities of potential class members, a "trial court must . . . expressly identify any potential abuses of the class action procedure that may be created if the discovery is permitted, and weigh the danger of such abuses against the rights of the parties under the circumstances."
Although we agree with the general principle that a plaintiff must have standing to assert a cause of action, we are not persuaded by CashCall's assertion in the context of class actions that standing of the original named plaintiff(s) at the beginning of the action is necessarily a requirement for continuation of the action. Rather, we conclude that a trial court, exercising its reasonable discretion in applying the Parris balancing test in the circumstances of a particular case, may order precertification discovery of the identities of class members (i.e., those with standing) who, when contacted, ultimately may elect to be substituted as named plaintiffs to continue prosecution of the class action on behalf of the class.
My prior posts on First American are here and here. Another recent discovery-related decision, handed down nine days before CashCall, is also of interest. My post on Puerto v. Superior Court (Wild Oats Markets, Inc.), ___ Cal.App.4th ___ (Jan. 15, 2008) (Second Appellate District, Division Seven) is available at this link.
Central to the discovery process is the identification of potential witnesses. .... One glance at the form interrogatories approved by the Judicial Council, particularly the interrogatories in the 12.0 series, demonstrates how fundamentally routine the discovery of witness contact information is.
This is basic civil discovery. .... Nothing could be more ordinary in discovery than finding out the location of identified witnesses so that they may be contacted and additional investigation performed. .... Indeed, it is only under unusual circumstances that the courts restrict discovery of nonparty witnesses’ residential contact information.
To the extent that the privacy invasion appears significant here, we believe that this is an artifact of the number of individuals involved. Consider a hypothetical in which a plaintiff propounds the same form interrogatory used here to a corner grocery store with 10 employees. Counsel for that grocery store takes the same course that [the defendant] did, choosing to list all 10 employees that worked with plaintiff in response to the interrogatory. Plaintiff then seeks the addresses and telephone numbers of the 10 employees as requested in the interrogatory, and the grocery store refuses to disclose their contact information, citing privacy. We cannot imagine that any trial court would have entered a protective order requiring the plaintiff to use a third party administrator to send letters to those 10 employees informing them that they would have to consent in writing before counsel for the plaintiff could contact them. We cannot imagine a trial court entering a protective order at all under those circumstances, absent a finding of discovery abuse. Nothing is analytically different here—only the number of witnesses is changed. It appears that the large number of witnesses identified by [the defendant], rather than the actual significance of the privacy invasion with respect to each witness, may have impacted the court’s analysis. We, however, see no manner in which the mere numerosity of witnesses alters the underlying analysis of the seriousness of the intrusion on the witnesses’ privacy rights.
[T]he discovery in Pioneer was precertification discovery designed to identify members of the class rather than to locate percipient witnesses, although the Supreme Court did note that some number of the potential class members would also be witnesses. This procedural distinction explains why the opt-out letter outcome of Pioneer is not necessarily appropriate here: in Pioneer, the plaintiffs were looking for people who would want to participate in the lawsuit. As pursuing litigation is a voluntary activity, an opt-out letter that offered recipients the option of participating or declining to participate was appropriate. In contrast, a percipient witness’s willingness to participate in civil discovery has never been considered relevant—witnesses may be compelled to appear and testify whether they want to or not.
Id. at 12-13 (emphasis added). The Court concluded its analysis by approving the entry of an appropriate protective order in the trial court's discretion, but by also observing that "the procedure selected here, an opt-in letter, effectively gave more protection to nonparty witnesses’ contact information than the Discovery Act gives to much more sensitive consumer or employment records. We are aware of no logic or authority that would justify such disproportionate protection of this private but under these circumstances relatively nonsensitive information." Id. at 20. For more discussion of the opinion, see this post by Michael Walsh of Wage Law.

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