Source: http://www.californiawagelaw.com/wage_law/2007/07/index.html
Timestamp: 2018-07-17 23:11:58
Document Index: 441590211

Matched Legal Cases: ['§ 17200', '§ 17203', '§ 382', '§ 226', '§ 98', '§ 11340']

Wage Law: July 2007
Diverse Facts and Legal Arguments Concerning Equitable Defenses in UCL Claims Do Not Bar Class Certification
Unclean hands and other equitable defenses cannot be used to defeat class certification in an unfair competition lawsuit based upon violations of statute, even if the defenses might be taken into account when fashing a remedy, and even if they involve the determination of facts and legal issues that vary greatly among class members. Ticconi v. Blue Shield of California Life & Health (2007) __ Cal.App.4th __.
In Ticconi, the Court of Appeal began its analysis by noting that
Courts have long held that the equitable defense of unclean hands is not a defense to an unfair trade or business practices claim based on violation of a statute. To allow such a defense would be to judicially sanction the defendant for engaging in an act declared by statute to be void or against public policy. (Kofsky v. Smart & Final Iris Co. (1955) 131 Cal.App.2d 530, 532; Page v. Bakersfield Uniform Etc. Co. (1966) 239 Cal.App.2d 762, 770 [“The equitable doctrine of the refusal of aid to anyone with ‘unclean hands,’ does not, as such, apply to actions under [the unfair practices act].”)
At the trial court, Ticconi's class certification motion had been denied because the trial court found that "legal and factual issues concerning the defenses of fraud and unclean hands outweighed those related to liability rendering class treatment disadvantageous." However,
our Supreme Court explained that “equitable defenses may not be asserted to wholly defeat a UCL claim [under Bus. & Prof. Code, § 17200] since such claims arise out of unlawful conduct. . . .” (Cortez v. Purolator Air Filtration Products Co. (2000) 23 Cal.4th 163, 179.) In Cortez, the plaintiff brought an action under the UCL seeking restitution of overtime wages withheld from her and other employees. The defendant argued that where the UCL sounded in equity, the trial court was obligated to consider equitable defenses. The Supreme Court held that the equities may be considered when the trial court exercises its discretion to fashion a remedy under Business and Professions Code section 17203. (Ibid.) But, equitable defenses may not be used to defeat the cause of action under the UCL. As more fully explained by Justice Werdegar in her concurrence in Cortez, “in general, as between a person who is enriched as the result of his or her violation of the law, and a person intended to be protected by the law who is harmed by its violation, for the violator to retain the benefit would be unjust.”
Therefore, the diverse facts making up Blue Shield Life’s fraud and unclean hands defenses could not be factored in when determining whether the community interest requirement for class certification had been met.
"Legal and factual issues that go to remedies simply cannot outweigh the common issues related to liability."
Because wage and hour cases are generally based upon statutory violations, and UCL claims are a part of any sound wage and hour class action complaint, Ticconi v. Blue Shield of California Life & Health should be required reading for every wage and hour class action attorney. You can read the full text here in pdf or word format.
July 31, 2007 in Class Actions, Published Opinions | Permalink | Comments (0) | TrackBack (0)
All members of the public are invited to address the Labor Commissioner. Additionally, the Office of the Labor Commissioner will be accepting written comments received by the close of business on Friday, August 31, 2007. Written comments may be sent to:
We suggest workers send written comments, pointing out that the Commissioner is unlikely to hear from real working class folks at a midweek, mid-workday hearing. If prior experience serves as a guide, there is a likelihood that the Chamber of Commerce and/or California Restaurant Association will be packing the room with workers paid or otherwise strongly encouraged to accompany them and testify against employee meal and rest periods.
July 30, 2007 in Legislation/Regulations | Permalink | Comments (2) | TrackBack (0)
Regulation Expanding Truckers' Working Hours Is Stricken
On Tuesday, the U.S. Court of Appeals for the D.C. Circuit invalidated a Bush administration regulation that relaxed limitations on the working hours of truck drivers, holding that the regulatory changes lacked adequate justification. Owner-Operatore Independent Drivers Assocation, Inc. v. Federal Motor Carrier Safety Administration (DC Cir. 2007) __ F3d. __. In 2005, the Federal Motor Carrier Safety Administration increased the maximum driving hours of truck drivers from 60 to 77 over 7 consecutive days, and from 70 to 88 hours over any 8 day period. The change had been made in response to a similar appellate ruling issued in 2004.
[Hat tip: Public Citizen]
July 27, 2007 in Published Opinions | Permalink | Comments (0) | TrackBack (0)
Yesterday, the Supreme Court denied review of Belaire-West Landscaping, Inc. v. Superior Court (2007) 149 Cal.App.4th 554, which held that the precertification discovery, notice and disclosure opt-out standards expressed in Pioneer Electronics (USA), Inc. v. Superior Court (2007) 40 Cal.4th 360 also apply to wage and hour cases. We previously discussed Belaire-West Landscaping, Inc. v. Superior Court in a post that can be found at this link.
July 26, 2007 in Published Opinions | Permalink | Comments (0) | TrackBack (0)
Class Actions: Required for UCL Claims, Not Required for PAGA
The Third District Court of Appeal has ruled that, under the Proposition 64 revisions to the Unfair Competition Law [UCL] (Business & Professions Code § 17203), a representative claim must be brought as a class action because the UCL now requires compliance with the class action provisions of Code of Civil Procedure § 382; however, the Private Attorneys General Act [PAGA] expressly allows a person to prosecute a representative claim without requiring that it be brought as a class action. In Arias v. The Superior Court of San Joaquin County (Angelo Dairy) (2007) __ Cal.App.4th __, plaintiff brought an action for overtime wages, and meal and rest period claims on behalf of a group of dairy workers. He did not style the complaint as a class action, but alleged claims under the UCLA and PAGA.
As to the UCL claim, Arias argued that the plain language of Proposition 64 is clear and unambiguous, and that it contains no requirement that a representative suit be brought as a class action. The court disagreed, holding that
although Proposition 64 does not on its face require a representative claim to be pled as a class action, it requires that the claim comply with section 382, which is commonly understood to authorize class actions. The requirement that a representative claim comply with section 382 makes plain that a representative UCL claim must be pursued as a class action. To the extent that Proposition 64 presents any ambiguity, we resolve it by the indicia of the voters’ intent. That intent, as set forth in the official ballot pamphlet, was that representative claims under the UCL be brought as class actions.
Thus, the court upheld the trial court's order granting a motion to strike the UCL claims. However, with respect to the PAGA claim, Arias's writ petition was granted. The court held that, unlike the UCL,
the Labor Code statute authorizing a private enforcement action is an exception to the class action requirement.
So, one must allege class allegations to bring a representative claim under the UCL, but need not do so under the PAGA. Both issues are of potential interest to the Supreme Court, so we'll be watching to see if this one gets review, and if so, as to what issues. The full text of Arias can be found at the court's opinion pages, in pdf or word format.
July 25, 2007 in Class Actions, Published Opinions | Permalink | Comments (5) | TrackBack (0)
1= $8 as of Jan. 1, 2008; 2= $7.15 as of Jan. 1, 2008; 3= $7.75 as of July 1, 2008, $8 as of July 1, 2009, $8.25 as of July 1, 2010; 4= $7 as of Oct. 1; 5= $7.40 as of July 1, 2008; 6= $5.25 for small employer; 7= $7.25 as of July 1, 2008
July 24, 2007 in Legislation/Regulations | Permalink | Comments (0) | TrackBack (0)
Interim Fees on Arbitration Motions and Petitions
A very interesting opinion was recently published by the Second District Court of Appeal in Acosta v. Kerrigan, affirming an order awarding interim attorney fees in connection with his successful petition to compel arbitration of a dispute between the parties arising under a lease agreement and denying a petition to compel arbitration of the actual request for those same attorney fees. Acosta and Kerrigan had a lease agreement that including an arbitration clause and the following fee-shifting provision regarding petitions to compel arbitration:
Should any party to this Agreement hereafter institute any legal action or administrative proceeding against the other by any method other than arbitration, the responding party shall be entitled to recover from the initiating party all damages, costs, expenses and attorneys' fees incurred as a result of such action.
We've been seeing more and more of these. For now, at least, they are enforceable. In all likelihood, under Civil Code section 1717, a losing petitioner would also be on the hook for fees if the trial court found the arbitration agreement to be unenforceable, but that is another case for another day. We recently filed an opposition to an arbitration agreement in which our opposition prayed for interim fees under an identical fee-shifting provision, and the petitioner took the petition off calendar.
You can download the full text of Acosta v. Kerrigan here in pdf or word format.
July 20, 2007 in Published Opinions, Tactics | Permalink | Comments (0) | TrackBack (0)
July 19, 2007 in Miscellaneous | Permalink | Comments (0) | TrackBack (0)
http://www.dol.gov/esa/regs/compliance/posters/flsa.htm
July 17, 2007 in Miscellaneous | Permalink | Comments (1) | TrackBack (0)
Depublication Requests Denied in Ikon Office Solutions
The Supreme Court denied several depublication requests in Walsh v. Ikon Office Solutions (S152244, A113172).
July 13, 2007 in Published Opinions | Permalink | Comments (1) | TrackBack (0)
Proposition 1505?
CJAC and the Chamber of Commerce have turned Nicole Parra's unsuccessful class action bill (AB 1505) into a ballot initiative and have filed papers to get it on the June 2008 ballot. The changes included in this initiative would make it virtually impossible to get class actions certified in California. Here's a link to CAOC's website regarding the proposed initiative.
July 12, 2007 in Political | Permalink | Comments (0) | TrackBack (0)
Review Denied in Wal-Mart
This week, the Supreme Court denied review of Savaglio v. Wal-Mart Stores (S152827, A111606) regarding sealing portions of the record on appeal in that mammoth meal period class action.
July 11, 2007 in Court Decisions | Permalink | Comments (0) | TrackBack (0)
Corrales v. Bradstreet
Though it was already rendered moot by the Supreme Court's decision in Murphy v. Kenneth Cole Productions, Inc. (2007) 40 Cal.4th 1094, the Third District Court of Appeal has invalidated the Labor Commissioner's designation of Hartwig v. Orchard Commercial, Inc. (Cal. Dept. of Industrial Relations, DLSE, May 11, 2005, No. 12-56901RB) as a "precedent decision" regarding the characterization of Labor Code § 226.7 pay as penalties, rather than wages. The Labor Commissioner has no authority to issue and enforce precedent decisions.
In Corrales v. Bradstreet, which was tried and argued on appeal as Corrales v. Dell (Angela Bradstreet having just replaced Donna Dell as Labor Commissioner), two claimants appealed from a judgment denying their petition for a writ of mandate and complaint for declaratory relief against Donna Dell, as Labor Commissioner for the State of California. They claimed that the Commissioner violated statutory duties relating to timely processing of employee claims under Labor Code § 98, and improperly issued a precedent decision purporting to be binding in all section 98 hearings, in circumvention of rulemaking requirements of the Administrative Procedure Act, Government Code § 11340 et seq.
On the abeyance and delay issue, the Court of Appeal found no reversible error, not because the practice of holding meal period and rest period claims in abeyance was lawful, but because the appellants apparently obtained hearings on their claims; the Commissioner’s attorney represented that the Commissioner would not violate the law by resuming the abeyance policy; that there was no evidence that the practice would be resumed. On the precedent decision issue, the Court of Appeal held that the Commissioner’s attempt to issue a binding precedent decision was an invalid circumvention of the APA’s rulemaking requirements. Even though the California Supreme Court has already held that section 226.7 payments are wages, not penalties, effectively invalidating the particular precedent decision at stake. Nonetheless, the Court of Appeal decided the matter because it is a matter of general public interest and is likely to recur.
The full opinion in Corrales v. Bradstreet is 55 pages long and at times, is dreadfully dulll. You can read the whole thing, however, here in pdf or word format.
For anyone who has to deal with the argument that wage and hour claims should not be certified as class actions because the availability of Berman hearings makes DLSE claims superior to classwide litigation, the opinion has some useful language about the Labor Commissioner's lack of resource to handle even its existing caseload, e.g., "the Commissioner 'admits that there are some claims filed in Labor Commissioner offices in California which do not proceed to hearing within 90 days of the date that a determination is made to hold a hearing,' and the Commissioner 'admits that there are some cases where ODAs have not been issued within 15 days after holding a hearing.' Appellants cite evidence of a system-wide problem of untimely processing of employee claims (which the Commissioner attributes to a lack of sufficient resources)."
July 10, 2007 in Published Opinions | Permalink | Comments (1) | TrackBack (0)
From the American Enterprise Institute for Public Policy Research:
If America is a “lawsuit hell,” then contingent-fee lawyers are often considered its devils. Contingent fees have been called unwarranted and the lawyers who accept them have been denounced as unethical and uncivilized. Furthermore, in the midst of increased filings and escalating awards, it is difficult not to notice that some plaintiffs’ lawyers have become very rich. As a result, tort reformers have called for limits on contingent fees and many states have obliged. But limits have been enacted without any evidence that contingent fees were either responsible for the liability crisis or that limiting them would produce benefits.
This study, one of the first empirical examinations of contingent-fee limits, finds that contingent fees benefit plaintiffs and do not cause higher awards. Furthermore, contingent-fee limits are unlikely to reduce lawyers’ income very much, since they will simply switch to hourly fees. Since hourly fee lawyers are willing to take more cases to court than contingent-fee lawyers, contingent-fee limits can increase the number of low-value “junk suits.”
The study, entitled Two Cheers for Contingent Fees, can be downloaded at http://www.aei.org/docLib/20050817_book827text.pdf.
July 09, 2007 in Political | Permalink | Comments (2) | TrackBack (0)
The "Other" Murphy Case: Emotional Distress Damages Are Again Taxable
After rehearing before the D.C. Circuit, the original ruling in Murphy v. IRS has been discarded in favor of a holding that emotional distress damages in employment cases are taxable. You can download Murphy v. IRS here.
July 06, 2007 in Published Opinions | Permalink | Comments (0) | TrackBack (0)
Opinions and Arguments Online
While doing a little research for a WARN Act case we have pending, we found a cool feature on the 7th Circuit's website. Certain cases, including the infamous WARN Act case against Arthur Anderson, have not only the opinion listed on the court's website, but also an mp3 of the argument.
July 05, 2007 in Miscellaneous | Permalink | Comments (0) | TrackBack (0)
T-Mobile Arbitration Agreements Invalidated
This is off topic, especially since its tenuous connection to wage and hour law will disappear after Gentry v. Superior Court, but we aren't doing any work today, and posting about wage and hour developments is work. Anyhow, it looks like you don't have to worry about the arbitration clause on your cell phone agreement anymore if T-Mobile is your carrier. Kudos to Bruce Gatton and Christina Nguyen, the lead plaintiffs in Gatton v. T-Mobile USA, Inc.
July 04, 2007 in Court Decisions | Permalink | Comments (0) | TrackBack (0)
CAFA: Two Years Later
On February 18, 2005, President George W. Bush signed into law the Class Action Fairness Act (CAFA) of 2005, the most significant civil justice reform of his administration. Has it succeeded in curbing abusive class actions? Because litigation tactics are dynamic, the long-term answer will depend in part on the plaintiffs bar's response.
CAFA addressed two sizable problems in the area of class action litigation by expanding federal jurisdiction over class actions and scrutiny over class action settlements. First, the plaintiffs bar would use "magnet jurisdictions," sometimes called "judicial hellholes," to bring cases of nationwide significance in local courts that tended to rubber-stamp illegitimate certifications.[2] Such certifications, by creating aggregate litigation in which individualized issues predominated, prevented defendants from being able to adequately defend themselves, and created settlement pressure on defendants where none would otherwise exist.[3] Second, there were negotiated settlements (often approved by these same courts) that rewarded attorneys at the expense of the unrepresented class members. In one notorious example involving an Alabama state court class action settlement against Bank of Boston approved by an elected judge, class members found that their escrow accounts faced deductions because the attorneys' fees exceeded the minimal recovery for the class.[4] Even more common and less extreme "coupon" settlements involved situations in which class members received rarely redeemed coupons of questionable value while attorneys received fees reflecting the exaggerated face value of the entire coupon issue.
Two years later, how well is CAFA working? What remains to be done?
The entire essay can be downloaded at http://www.aei.org/docLib/20070327_Liability.pdf.
July 03, 2007 in Miscellaneous | Permalink | Comments (0) | TrackBack (0)
The Real Reason Employers Like to Arbitrate
Why do employers like arbitration so much? In a bit of a Jerry Maguire moment, Cory J. King, a lawyer with the defense firm of Fine, Boggs & Perkins, LLP, admits that it is because whether an employer wins a case depends almost as much on the forum as it does on the facts, and they tend to win arbitrations, and lose trials. Two of the slides in his presentation entitled "Top Secret! Owners Eyes Only! Dealing with the Entitlement Generation (go to page six of the ppt) boast that "when the judge sits as an arbitrator, statistics show that employer prevails 76% of the time" but "when the jury has a case, statistics show the employers prevail at best 50% of the time." In other words, half of all winning plaintiffs would have lost their case had they gone to arbitration.
Of course, that is never offered as a reason why arbitration agreements should be enforced. If an employee's attorney were to make such a claim in a pleading, 99.9% of defense attorneys would argue that it is not true, or at least unproven. In open court, it has almost become sacrilege to deny that arbitration is every bit as "separate but equal" as a courtroom with a jury.
While arbitration doesn't present nearly the same problems to wage and hour plaintiffs as it presents to other employee plaintiffs, the arbitration fight is always an important one. Does anyone out there know what statistics Mr. King is citing? We'd love to read those studies.
[If the link gets removed, you can check the page here, via google cache.]
July 02, 2007 in Tactics | Permalink | Comments (3) | TrackBack (0)
July 01, 2007 in Legislation/Regulations | Permalink | Comments (0) | TrackBack (0)