Source: http://www.baileydaily.com/2010/08/
Timestamp: 2019-04-22 04:04:40+00:00

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As reflected on the Supreme Court website – still no date set for oral argument (here).
On August 25, 2010, the Sixth District altered its opinion in Fireside Bank Cases from unpublished to published. There, the Court concluded that a court’s equitable power under the UCL does not include the ability to sidestep principles of res judicata to set aside existing judgments, en masse.
On August 23, 2010, the Second District (Division One) issued an order changing the publication status of Gutierrez v. Cal. Commerce Club, __ Cal. App. 4th __ (2010) from unpublished to published. The opinion deals with the impropriety of forcing a named plaintiff to establish an entitlement to certification of a class through allegations in the operative complaint.
At issue was a trial court order sustaining a demurrer to the plaintiff’s third amended complaint (alleging meal/rest period claims) without leave “on the ground the plaintiffs had failed to show the existence of a class….” Slip Opinion, at 2. Significantly, the trial court had previously overruled demurrer to the plaintiff’s first amended complaint, finding the allegations of that pleading minimally adequate. See id., at 3-4. The third amended complaint came about after the plaintiff had sought, and obtained, leave from the court to file a second amended complaint. Id.
The trial court found far the less specific allegations minimally adequate when it overruled the Club‘s demurrer to the FAC. At that time it noted, correctly, that there would be “ample time later to determine whether there is a single class, several classes and whether this plaintiff can represent some or all of the classes . . . [and that,] in this case, the statement that defendant has not provided its employees with proper rest periods states both the facts and the theory.” The record reveals no explanation for the court‘s abrupt reversal of course in sustaining demurrers to the SAC and TAC, which contain virtually identical (or more specific) allegations.
Slip Opinion, at 10 n.5.
This line of analysis, which also was at issue in the Fourth District’s opinion in Weinstat v. Dentsply Internat., Inc, 180 Cal.App.4th 1213 (2010), demonstrates that a trial court use of its discretion to change its mind must be rooted in a legitimate change in circumstances capable of justifying the reversal in position.
Third District Upholds Class Action Waiver: Walnut Producers of California v. Diamond Foods, Inc.
On August 16, 2010, the Third District issued an opinion in Walnut Producers of California v. Diamond Foods, Inc., __ Cal.App.4th __ (2010), upholding the trial’s court order striking class allegations based on a class action waiver. The case was not a typical consumer case, as it involved a walnut marketing association challenge to “marketing agreement” with a walnut processor brought on the behalf of a class of walnut growers.
Plaintiffs have not successfully pleaded the Agreement is a contract of adhesion under the unusual circumstances of this case. It is true that plaintiffs pleaded the Agreement is a standardized contract drafted by Diamond Foods that was presented to plaintiffs without any opportunity to negotiate its terms. However, it is not true according to plaintiffs' allegations that Diamond Foods had superior bargaining strength or that plaintiffs had no real alternatives available to them at the time they entered into the Agreement.
The obvious alternative for plaintiffs was not to approve the Co-op's merger into Diamond Foods. Plaintiffs' choice was not limited to entering into the Agreement. Rather, their choice was between continuing in the Co-op, or merging the Co-op with Diamond Foods and entering into the Agreement. Since plaintiffs controlled the Co-op as members, we cannot say the Agreement was imposed on the members by a party of superior bargaining strength or that they had no other alternative but to merge the Co-op and enter into the agreement.
On August 9, 2010, the California Supreme Court issued its opinion in Clark v. Superior Court, __ Cal.4th __ (2010), concluding that “an award of restitution under the unfair competition law ... is not subject to section 3345’s trebling provision.” In reaching its decision, the Court concluded that Civil Code Section 3345(b)’s trebling provision was not limited to claims brought under the CLRA [Slip Opinion, at 5-7], but rather, was applicable any statute which “permits a remedy that is in the nature of a penalty.” See id., at 7-9. From that point, the Court reasoned that “[b]ecause restitution in a private action brought under the unfair competition law is measured by what was taken from the plaintiff, that remedy is not a penalty and hence does not fall within the trebled recovery provision of Civil Code section 3345, subdivision (b).” See id., at 9-10.
On August 9, 2010, the California Supreme Court issued its opinion in Lu v. Hawaiian Gardens Casino, Inc, __ Cal.4th __ (2010), concluding “section 351 does not contain a private right to sue.” As reasoned by the Court, Section 351 does not contain an enabling provision, or language susceptible of legislative intent to afford employees a private right to sue. That was not the end of the story, however, as the Court held that Section 351’s acknowledgement that employees have a property right to tip income provided other avenues on which to adjudicate a violation of that right, such as a claim for conversion. The opinion was silent as to whether Section 351 could serve as a predicate violation under the unlawful prong of the UCL.
Drug Manufacturer's Precertification Settlement Effort Invalidated As Improper Class Communication: County of Santa Clara v. Astra USA, Inc.
The duty and authority to protect the putative plaintiff class and uphold the policies of Rule 23 extends to the limited ruling in this case. BMS has omitted material information and misled the putative plaintiff class: the letter did not contain the complaint or Ninth Circuit opinion, did not describe the claims, did not contain the current status of the case, did not provide contact information for the plaintiffs' attorneys, did not explain how the aggregate net basis methodology can actually decrease the payment amount, and tried to establish a veneer of CMS authorization that was clearly not accurate. Indeed, misleading the putative plaintiffs, offering a potentially much decreased settlement, and not cooperating with the plaintiffs all show a lack of good faith. Thus, the plaintiffs' motion for corrective action is Granted. The accord and satisfaction release is invalid in California. Any checks cashed will be deducted from any recovery obtained herein (or presumably elsewhere) by the recipients. It is not necessary for BMS to make any corrective communications.
See County of Santa Clara, 2010 U.S. Dist. LEXIS 78312, 22-23.
On July 27, 2010, the First District (Division five) issued an order changing the publication status of the Cellphone Fee Termination Cases, __ Cal.App.4th __ (2010) from unpublished to published. The opinion, which deals with an objector appeal to a class settlement, discusses several issues relating to settlement notice standards, and the propriety of incentive payments to the named plaintiff.
A similar procedure for notice of a class settlement, utilizing a summary notice directing class members to a Web site containing more detailed notice, was approved in Chavez as a “perfectly acceptable” manner of giving notice. (Chavez, supra, 162 Cal.App.4th at p. 58.) We agree with the observation in Chavez that “[u]sing the capability of the Internet in [this] fashion was a sensible and efficient way of providing notice, especially compared to the alternative [objector] apparently preferred—mailing out a lengthy legalistic document that few class members would have been able to plow through.” (Id. at p. 58, fn. omitted.) We do not look for perfection. “[A] large body of case law reflect[s] the view that ‘the whole concept of a large class-action might easily be stultified by insistence upon perfection in actual notice to class-members … .’ [Citation.]” (Hypertouch, supra, 128 Cal.App.4th at p. 1540.
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Matt C. Bailey is a principal at Pollard | Bailey, a Los Angeles based law firm specializing in class action litigation. He has successfully represented clients throughout the country on a wide range of legal issues, including wage and hour and employment matters, product liability, and general consumer and business litigation.
In Re Tobacco II Cases Almost One Year Later: A Boon for California Consumers or a Bust?, Advocate Magazine (February, 2010).
Objection Detection, Los Angeles Daily Journal, (Sept. 04, 2009).
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