Source: http://www.impactlitigation.com/2011/12/
Timestamp: 2019-04-19 16:30:12+00:00

Document:
Los Angeles Superior Court Judge Daniel J. Buckley has ruled that PAGA (the Labor Code Private Attorneys General Act of 2004) is constitutional. The ruling came in response to a demurrer filed by defendant Whole Foods, in which the company claimed that PAGA is void on separation-of-powers grounds. See Hamilton v. Whole Foods, No. BC461746 (L.A. Super. Ct. Dec. 22, 2011) (order denying demurrer) at 1 (available here).
Rejecting Whole Foods’ arguments, the Court ruled that “the PAGA statute does not significantly impair judges’ functions, or contain anything unique to necessitate prosecution only by neutral government lawyers. The absence of any real interference with the separation of powers knocks out the critical leg of defendant’s arguments.” Id. at 5-6.
Judge Buckley also emphasized that courts have consistently approved of private attorneys general enforcing Labor Code provisions under PAGA, most notably in Brown v. Ralphs, 197 Cal. App. 4th 489 (2011). Id. at 6-7. Moreover, the role of private attorneys general in enforcement of statutes beyond PAGA has long been recognized. Id. at 7. This further underscores the constitutionality finding.
The Hamilton lawsuit challenges Whole Food’s alleged failure to provide adequate seating to employees pursuant to Labor Code Section 1198.
This ruling suggests a moderate approach to the predominance analysis required by Dukes v. Wal-Mart, 131 S. Ct. 2541, 2555-56 (2011). Sullivan interpreted Dukes to stand for the proposition that “the focus is on whether the defendant’s conduct was common as to all of the class members, not on whether each plaintiff has a ‘colorable’ claim.” See Sullivan v. DB Investments, Inc., No. 08-2784 (3rd Cir. Dec. 20, 2011) (order affirming class certification) at 42. The majority found that the plaintiffs satisfied the predominance requirement by establishing that the putative class members shared common legal and factual questions arising from De Beers’ alleged anticompetitive conduct. Id. at 44.
The Sullivan panel also identified three “guideposts” that direct a trial court’s predominance inquiry. Id. at 37. First, the decision holds that “commonality is informed by the defendant’s conduct as to all class members and any resulting injuries common to all class members.” Id. at 37-38. Second, “variations in state law do not necessarily defeat predominance.” Id. And, third, “concerns regarding variations in state law largely dissipate when a court is considering the certification of a settlement class.” Id.
Owing to its closely reasoned analysis, Sullivan v. De Beers is likely to figure prominently in class certification briefing in state and federal courts throughout the country.
After the Supreme Court’s AT&T v. Concepcion decision, it is hardly surprising to see courts enforcing arbitration clauses between plaintiffs and banks, employers, or retailers. However, novel methods to avoid arbitration clauses and class action waivers are also emerging. As part of a recent settlement between the San Francisco City Attorney and a Bank of America subsidiary, the financial institution agreed not to insert mandatory class action waivers into consumer contracts for credit cards. See Settlement Agreement, People v. Nat’l Arbitration Forum, No. 473-569 (S.F. Super. Ct. Aug. 18, 2011). Further, FIA Card Services agreed to not arbitrate collections disputes with California consumers for two years, and to stop using the notoriously anti-consumer National Arbitration Forum for five years. The settlement also secures $5 million for San Francisco city taxpayers.

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