Source: http://www.impactlitigation.com/2015/05/
Timestamp: 2019-04-19 16:15:03+00:00

Document:
Employees and plaintiffs seeking rest breaks free from employer control received some good news from the California Supreme Court recently. On April 29, 2015, the California Supreme Court granted the plaintiffs’ petition for review in Augustus v. ABM Security Services, Inc. (“Augustus”). See 2015 Cal. LEXIS 2460 (April 29, 2015) (briefing available here and here).
As previously covered by the ILJ here, the California Court of Appeal, Second Appellate District, had affirmed the trial court’s certification of a class of security guards, but reversed the summary judgment and summary adjudication granted for rest break violations under the California Labor Code. Augustus v. ABM Security Services, Inc., 233 Cal. App. 4th 1065 (Cal. Ct. App. Dec. 31, 2014) (available here). In doing so, the Court of Appeal rejected the trial court’s view that an “on-call” rest break where an employee must respond to emergencies and calls is not a legally-compliant rest break under Industrial Welfare Commission (“IWC”) Wage Order No. 4. The Court of Appeal found that remaining available to work during a rest break “is not the same as performing work,” since the guards were freed from most of their work responsibilities during their rest breaks. Id. at 1082. This is a stark departure from previous Division of Labor Standards Enforcement (“DLSE”) opinion letters, the California Supreme Court’s previous definition of “work” under Morillion v. Royal Packing Co., 22 Cal. 4th 575 (2000), the California Supreme Court’s analysis of “providing” meal breaks in Brinker Rest. Corp. v. Superior Court, 53 Cal. 4th 1004, 1021 (2012), and the California Supreme Court’s analysis of “on-call time” in Mendiola v. CPS Security Solutions, 60 Cal. 4th 833 (2015).
The granting of the petition for review is significant for two reasons. First, pursuant to California Rules of Court 8.1105(e) and 8.1115, the Augustus decision is now depublished, so employers can no longer cite the Court of Appeal ruling as a basis for dismissing rest break claims in which the employee was “on-call” or otherwise subject to the employer’s control. Second, given the recent California Supreme Court decisions in this area, there is a significant likelihood that it will finally put to rest the argument that employers can continue to maintain control over employees during rest breaks merely because they remain on the clock during this time.
This is expected to be a closely-watched case by both the plaintiffs’ bar and defense counsel, as it implicates substantive wage-and-hour law.
In a victory for truck drivers throughout California, the U.S. Supreme Court recently declined to review a Ninth Circuit ruling finding that California’s meal and rest break laws are not preempted by the Federal Aviation Administration Authorization Act (“FAAAA”). Dilts v. Penske Logistics, LLC, 769 F.3d 637 (9th Cir. Cal. 2014) (cert. denied by Penske Logistics LLC v. Dilts, 2015 U.S. LEXIS 2990 (U.S. May 5, 2015)).
This news should come as no surprise to transportation companies operating in California. While Penske insists in its petition for certiorari that the Dilts ruling is “rogue” and not in keeping with precedent, it is fully consistent with recent Ninth Circuit and California Supreme Court opinions on this issue—including Campbell v. Vitran Express Inc., No. 12-56250 (9th Cir. July 9, 2014), which was related to Dilts, and People ex rel. Harris v. Pac Anchor Transportation, Inc., 59 Cal. 4th 772 (Cal. 2014) (previously covered by the ILJ here and here).
Earlier this year, the U.S. Supreme Court also declined to review Harris v. Pac Anchor (see 2015 U.S. LEXIS 1326 (U.S., Feb. 23, 2015)), which held that California’s Unfair Competition Law (“UCL”) is not preempted by the FAAAA, and that motors carriers are therefore subject to injunctive relief under the UCL. Harris and Dilts share a similar fact pattern and reasoning, and, in both cases, the respective courts held that California labor and employment laws are not significantly related to and/or do not significantly affect motor carrier price rates, routes, or services, and therefore are not the types of state laws Congress set out to preempt when enacting the FAAAA. See Harris at 785, Dilts at 650.
Now that the U.S. Supreme Court, Ninth Circuit Court of Appeals, and California Supreme Court have all definitively ruled on this issue, perhaps employers will cease their fruitless attempts to circumvent state labor law in this manner.
A recent opinion issued by the Third Circuit Court of Appeals is a must-read for any class action practitioner who has been flummoxed by the Court’s approach to ascertainability under Rule 23. Byrd, et al. v. Aaron’s Inc., et al., No. 14-3050 (3d Cir. April 16, 2015) (slip op. available here). The Third Circuit sought to “dispel any confusion” regarding the ascertainability requirement. Slip op. at 20. This confusion was self-inflicted by a quartet of Third Circuit opinions that courts interpreted to mean that retail records and class member affidavits are not sufficient to establish that a class is ascertainable. As one court noted, in commenting on a key Third Circuit case, “[i]t appears that pursuant to [Carrera v. Bayer Corp., 727 F.3d 300, 306 (3d Cir. 2013)] in any case where the consumer does not have a verifiable record of its purchase, such as a receipt, and the manufacturer or seller does not keep a record of buyers, Carerra [sic] prohibits certification of the class.” McCrary v. Elations Co., LLC, No. 13-cv-242, 2014 U.S. Dist. LEXIS 8443, at * 24 (C.D. Cal. Jan. 13, 2014).
In Byrd, the Third Circuit attempted to clarify the ascertainability standard, which the court acknowledged had been invoked by defendants in class actions “with increasing frequency in order to defeat class certification.” Slip op. at 20. The court stated that ascertainability “only requires the plaintiff to show that class members can be identified. Accordingly, there is no records requirement.” Id. at 25. However, a plaintiff still has to propose a method of ascertaining a class that has some evidentiary support that the method will be successful. Id. The court cautioned against conflating ascertainability with other class action requirements, such as numerosity and predominance, stressing that certain inquiries regarding certification are more properly analyzed under those specific Rule 23 requirements and not under the ascertainability inquiry.
The refreshingly candid concurring opinion by Judge Rendell calls out the Third Circuit for further muddling the issue and is much more interesting from a plaintiff/consumer perspective. Judge Rendell begins by noting that “[the Third Circuit’s] heightened ascertainability requirement defies clarification,” and “the lengths to which the majority goes in its attempt to clarify what our requirement of ascertainability means, and to explain how this implicit requirement fits in the class certification calculus, indicate that the time has come to do away with this newly created aspect of Rule 23 in the Third Circuit.” Slip op., Rendell concurring op. at 1.
In most low-value consumer class actions, prospective class members are unlikely to have documentary proof of purchase, because very few people keep receipts from drug stores or grocery stores. This should not be the reason to deny certification of a class. . . . We have effectively thwarted small-value consumer class actions by defining ascertainability in such a way that consumers will necessarily fail to satisfy for lack of adequate substantiation. Consumers now need to keep a receipt or can, bottle, tube, or wrapper of the offending consumer items in order to succeed in bringing a class action.
Id. at 5-7. He notes that in other Circuits, such as the Seventh and Ninth Circuits, some courts have certified small-value consumer cases and have not imposed the Third Circuit’s heightened proof requirement for ascertainability. Id.
The concurrence also rejects the notion that defendants’ due process rights will be abrogated by a standard that seeks to compensate at least some of the injured class members, stating that the odds that someone would sign a false affidavit, under penalty of perjury, that he or she purchased aspirin for the sake of receiving a “windfall” of $1.59 are “far-fetched at best.” Id. at 10. Further, Judge Rendell opines that the Third Circuit emphasized the wrong policy goal with this “clarified” standard, noting that “by focusing on making absolutely certain that compensation is distributed only to those individuals who were actually harmed, [the ascertainability doctrine] has ignored an equally important policy objective of class actions: deterring and punishing corporate wrongdoing. . . . In small-claims class actions like Carrera, the real choice for courts is between compensating a few of the injured, on the one hand, versus compensating none while allowing corporate malfeasance to go unchecked, on the other.” Id. at 10-12. Judge Rendell is adamant that rigorously applying the ascertainability requirement “translates into impunity for corporate defendants who have harmed large numbers of consumers in relatively modest increments. Without the class action mechanism, corporations selling small-value items for which it is unlikely that consumers would keep receipts are free to engage in false advertising, overcharging, and a variety of other wrongs without consequence.” Id. at 10-11.
He concludes that the Third Circuit’s approach to ascertainability “disserves the public,” writing,“[w]hile a rigorous insistence on a proof-of-purchase requirement . . . keeps damages from the uninjured, it does an equally effective job of keeping damages from the truly injured as well, and ‘it does so with brutal efficiency.’. . . [I]t is time to retreat from our heightened ascertainability requirement . . . .” Id. at 12-13. Judge Rendell’s conclusion is worth contemplating and should inform every court that is inclined to invoke ascertainability in order to deny class certification.
On April 27, 2015, the U.S. Supreme Court agreed to grant review of a Ninth Circuit decision addressing what constitutes “actual injury” for purposes of Article III standing. See Robins v. Spokeo, Inc., 742 F.3d 409 (9th Cir. 2014), cert. granted, 2015 U.S. LEXIS 2947 (U.S. Apr. 27, 2015) (No. 13-1339) (available here).
While both the plaintiff and defense bars anxiously await the resolution of this case, the Court still might choose to punt on this issue, as it has twice in the recent past. In First American Financial Corp. v. Edwards, 132 S. Ct. 2536 (2012), and First Nat’l Bank of Wahoo v. Charvat, 134 S. Ct. 1515 (2014), the Court avoided deciding similar issues that would limit the right of consumers to seek redress for statutory violations by corporations. Cert. was denied in Charvat, but in Edwards, the Court initially granted cert. then dismissed it as improvidently granted. It remains to be seen whether Robins will meet a similar fate.

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