Source: http://www.baileydaily.com/2010/01/
Timestamp: 2019-04-22 04:26:50+00:00

Document:
Request for Publication filed in Jaimez v. DAIOHS USA, Inc.
On January 28, 2010, a request was filed with the Second District (Division One), to publish its decision in Jaimez v. DAIOHS USA, Inc., Case No. B209486. In Jaimez, the CAP reversed the trial court’s order denying certification of a multitude of wage and hour claims.
The fundamental component of the Court’s decision turned on the trial court’s reliance upon testimony submitted in 25 employee declarations as a basis for finding the class element of “predominance” to be lacking. See Slip Opinion, at 13-16. As reasoned by the Court, the trial court erred by focusing on the “individual effects of policies and practices” contained in such declaration testimony [Id., at 15], rather than evaluating whether “[p]laintiff’s 'theory of recovery' involves uniform policies … amenable to class treatment.” See id., at 14. As the Court explained, “[t]he fact that individualized proof of damages may ultimately be necessary does not mean, … that Jaimez’s theory of recovery is not amenable to class treatment.” See id., at 22-23. According to the Court, “had the trial court focused on the correct criteria, it would have necessarily found the First Choice declarations, while identifying individual effects of policies and practices that may well call for individual damages determinations, nevertheless confirm the predominance of common legal and factual issues that make this case more amenable to class treatment.” See Id., at 15.
The Jaimez opinion extends the court’s analysis in Ghazaryan v. Diva Limousine, Ltd., 169 Cal.App.4th 1524 (2008) to various types of claims, including claims for misclassification, unpaid overtime compensation, missed meal and rest periods, and the failure to provide compliant pay stubs.
On January 19, 2010, Northern District Judge Claudia Wilken granted plaintiffs’ motion to certify a California UCL class arising out of alleged deceptive promotion of a subprime credit card that was marketed to consumers with low or weak credit scores. See Greenwood v. Compucredit Corp., 2010 U.S. Dist. LEXIS 3839 (N.D. Cal. Jan. 19, 2010). The challenged marketing, which occurred through a massive direct-mail solicitations and the internet, represented to consumers that the card could be used to “rebuild your credit”, that there was “no deposit required,” and that consumers would immediately receive $300 in available credit when they received their credit card. See id., at 2-3. However, upon receipt the consumer was actually required to make a $20 purchase payment to activate the card, which then triggered $185.50 in fees and finance charges that were immediately assessed against the $300 credit limit. See id., at 3. While these facts were disclosed in the challenged advertisements, they were buried in fine print and not in proximity to the representations that no deposit was required. See id.
[I]n In re Tobacco II Cases, the California Supreme Court held that only the named plaintiff in a UCL class action need demonstrate injury and causation.
Here, Plaintiffs may prove with generalized evidence that Defendants' conduct was "likely to deceive" members of the public. The individual circumstances of each class member's credit card application need not be examined because the unnamed class members are not required to prove reliance and damage. Common issues will thus predominate on the UCL claim.
See Greenwood, 2010 U.S. Dist. LEXIS 3839, at 20-21.
Northern District Denies Renewed Motion For Certification of Misclassification Class in In re Wells Fargo Home Mortg. Overtime Pay Litig.
On January 12, 2010, Judge Marilyn Patel issued an opinion denying plaintiff’s renewed motion for class certification in In re Wells Fargo Home Mortg. Overtime Pay Litig., 2010 U.S. Dist. LEXIS 3132 (N.D. Cal. Jan. 12, 2010). The proposed class consisted of all California Home Mortgage Consultants (“HMC”), and sought certification of overtime claims arising out of Wells Fargo’s alleged misclassification of HMC employees as exempt. The Court’s decision comes on the heels of the Ninth Circuit’s opinion in In re Wells Fargo Home Mortgage Overtime Pay Litig., 571 F.3d 953, 959 (9th Cir. 2009), wherein the Court’s prior order granting certification was reversed. As held by the Ninth Circuit, the Court erred by presuming the element of predominance to be satisfied based solely on Wells Fargo’s categorical exemption policy without evaluating other factors which bear directly on whether individualized issues will present problems with class wide adjudication.
In light of these principles, the court cannot see and plaintiff has not presented any viable method for certifying this action as a class action. To be certain, there are a number of common issues in this case. Wells Fargo does not dispute that all HMCs were uniformly classified as exempt. All class members had common job descriptions, uniform training, the same primary goal (to sell mortgages), uniform job expectations, similar compensation plans, and standardized employee evaluation standards. The record before the court indicates that all HMCs operated without supervision. However, this court has already held that analysis of five of the seven exemptions asserted by Wells Fargo would require fact-intensive inquiries into how individual HMCs performed their job. Under In re Wells Fargo and Vinole, the complexity of those inquiries must factor into this court's predominance analysis. In re Wells Fargo and Vinole also make clear that a plaintiff could satisfy the predominance requirement by coming forward with some form of common proof that would absolve this court from inquiring into how each HMC spent their working day. Plaintiff has not, however, done so. She has not produced (or even alleged the existence of) any policy that requires HMCs to spend a specified amount of time in or out of the office. At the very least, to determine if each HMC qualified for the outside sales exemption the court would need to conduct "inquiries into how much time each individual [HMC] spent in or out of the office and how the [HMC] performed his or her job; all of this where the [HMC] was granted almost unfettered autonomy to do his or her job." Vinole, 571 F.3d at 947. Those inquiries would inevitably consume the majority of a trial, and overwhelm the adjudication of common issues.
See In re Wells Fargo, 2010 U.S. Dist. LEXIS 3132, 20-21.
While the Court was well within its discretion to conclude that it believed such individualized inquiry would predominate on such grounds in this case, it is important to note that the fact that issues relating to actual working time must be resolved on an individualized basis does not require denial of certification. See Sav-On Drug Stores, Inc. v. Superior Court, 34 Cal. 4th 319, 336-37 (Cal. 2004) (concluding that “[p]resence in a particular overtime class action of the considerations reviewed in Ramirez does not necessarily preclude class certification” as “[a]ny dispute over ‘how the employee actually spends his or her time’ , of course, has the potential to generate individual issues.”).
If Skilstaf's notice of the terms of the settlement agreement had come solely from these two documents, the Court would likely share Skilstaf's and the New England Carpenters court's due process concerns. Skilstaf's argument regarding the deficiencies in the class notice procedures described above, however, fails to mention its unique position in the settlement process. Skilstaf's counsel, apparently through its own diligence, discovered the broad scope of the release provision and specifically applied to the district court for clarification. At the final approval hearing, the court, defense counsel, class counsel, and Skilstaf's counsel had an extensive discussion regarding the provision, after which Skilstaf was given another opportunity to opt out of the settlement. Skilstaf acknowledges in its brief that it chose not to opt out or appeal the district court's decision because it "did not want to prevent the New England Carpenters class from immediately receiving the monetary benefits of the McKesson settlement." Pltf. Oppo. at 8. n5 Skilstaf's own actions undermine its contention that it lacked sufficient notice of the scope of the release. Having made an informed and strategic decision to remain in the New England Carpenters class in order to reap the benefits of the settlement with McKesson, Skilstaf cannot now attempt to circumvent the limitations that attended those benefits.
See Skilstaf, 2010 U.S. Dist. LEXIS 2662, at 17-18.
the Court is not persuaded that it would be appropriate to permit the substitution of another class representative at this stage. Ordinarily, substitution of class representatives is permitted only after a class has already been certified. This is because, when the named plaintiff's claim is dismissed at the pleading stage, there is no longer an Article III "case or controversy" between the parties, and the action must be dismissed. See, e.g., Kremens v. Bartley, 431 U.S. 119, 132-33 (1977); Bd. of Sch. Comm'rs of City of Indianapolis v. Jacobs, 420 U.S. 128, 129 (1975) (per curiam); Lierboe v. State Farm Mut. Auto Ins. Co., 350 F.3d 1018, 1022 (9th Cir. 2003). Skilstaf cites two cases in which substitution of the named class representative was permitted prior to certification. Both of these cases are factually distinguishable and do not present grounds for departing from the usual rule in this action. See December 22, 2008 Order, Strickrath v. Globalstar, Inc., No. 07-1941 (Docket No. 146), at 11 (where the named plaintiff's claim was found to be time-barred just prior to the class certification hearing, court allowed 28 days for substitution in the interest of judicial economy); Wiener v. The Dannon Co., 255 F.R.D. 658 (C.D. Cal. 2009) (after class certification hearing and issuance of order finding that all certification requirements had been met other than typicality, court allowed approximately two weeks for substitution of class representative).
Skilstaf, 2010 U.S. Dist. LEXIS 2662, at 19-21.
On January 6, 2010, the Ninth Circuit issued an opinion in United Steel v. ConocoPhillips concluding that the district court abused its discretion in denying certification of a meal period class brought against defendant ConocoPhillips. The plaintiff’s theory of liability alleged that defendant had impermissibly availed itself the “on-duty” meal break exemption [8 CCR 11010(11)(C)] – a theory which, due to the inherent uniformity of the requisite elements, readily lends itself to class adjudication. However, the district court did not deny certification based on issues relating to plaintiff’s theory, but rather, on concerns that common issues would not predominate if plaintiff’s on-duty theory subsequently failed. See Slip Opinion, at 384-85.
Critically, the district court did not hold that plaintiffs' actual legal theory (what the district court referred to as "Plaintiffs' 'on duty' theory of liability") was one in which common issues of law or fact did not predominate over individual questions. Instead, the district court treated plaintiffs' actual legal theory as all but beside the point, holding that because "there can be no assurances that [plaintiffs] w[ould] prevail on this theory," (emphasis added), the district court's predominance inquiry would instead focus on the question whether plaintiffs "actually missed meal breaks," an admittedly individualized inquiry. By refusing to analyze plaintiffs' "on duty" argument as the basis for its predominance inquiry because "there c[ould] be no assurances that they w[ould] prevail on this theory," the district court ignored Ninth Circuit precedent and ultimately abused its discretion.
the district court not only "judge[d] the validity" of plaintiffs' "on duty" claims, it did so using a nearly insurmountable standard, concluding that merely because it was not assured that plaintiffs would prevail on their primary legal theory, that theory was not the appropriate basis for the predominance inquiry. But a court can never be assured that a plaintiff will prevail on a given legal theory prior to a dispositive ruling on the merits, and a full inquiry into the merits of a putative class's legal claims is precisely what both the Supreme Court and we have cautioned is not appropriate for a Rule 23 certification inquiry. See Eisen, 417 U.S. at 177-78; Cummings v. Connell, 316 F.3d 886, 896 (9th Cir. 2003) (noting that "this circuit does not favor denial of class certification on the basis of speculative conflicts"); Staton, 327 F.3d at 954; Moore v. Hughes Helicopters, Inc., 708 F.2d 475, 480 (9th Cir. 1983) (holding that "it is improper to advance a decision on the merits to the class certification stage").
As explained by the Court, the proper course of action would be to certify the class and revisit the issue of certification if and when the plaintiff’s on-duty theory failed to pan out. See id. at 393.

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