Search This Blog

Friday, January 27, 2012

Bridgeford v. Pacific Health: Class Cert Denial Does Not Establish Collateral Estoppel Against Absent Class Members

In Smith v. Bayer Corp., 564 U.S. ---, 131 S.Ct. 2368, 2011 WL 768649 (6/16/11) (blogged here) the Supreme Court of the United States held that a District Court's denial of a Rule 23 class certification motion does not prevent separate plaintiffs from seeking certification in a separate state court action.  

In Bridgeford v. Pacific Health Corporation (1/18/12) --- Cal.App.4th ----, 2012 WL 130615, the California Court of Appeal held that denial of class certification in one action does not prevent absent class members from filing a second class action making the same allegations.

The plaintiffs filed a putative class action alleging minimum wage, overtime, and other wage and hour violations. The defendants demurred, arguing that the plaintiffs were collaterally estopped from seeking class certification because the issue of class certification was decided in an earlier putative class action. The trial court (Los Angeles Superior, Judge Zaven V. Sinanian) sustained the demurrer without leave to amend, holding that the trial court in the earlier action had rendered a final decision on the merits of “the issue of class certification,” and  the plaintiffs could not bring a class action on either the same causes of action or additional causes of action against the same defendant or additional defendants because such causes of action could not have been asserted in the prior litigation. Slip op. at 6-7.  

The Court of Appeal reversed. It rejected those cases in which "California courts have held or suggested that the denial of class certification can establish collateral estoppel against absent putative class members on issues that were actually decided in connection with the denial." Alvarez v. May Dept. Stores Co. (2006) 143 Cal.App.4th 1223, 1236; Bufil v. Dollar Financial Group, Inc. (2008) 62 Cal.App.4th 1193, 1202-1203; Johnson v. GlaxoSmithKline, Inc. (2008) 166 Cal.App.4th 1497, 1510-1513 & fn. 8.  The Court concluded, "to the contrary that if no class was certified by the court in the prior proceeding, the interests of absent putative class members were not represented in the prior proceeding and the requirements for collateral estoppel cannot be established...." Slip op. at 11.

Relying on the Supreme Court's decision in Smith v. Bayer, the Court held that "the denial of class certification cannot establish collateral estoppel against unnamed putative class members on any issue because unnamed putative class members were neither parties to the prior proceeding nor represented by a party to the prior proceeding so as to be considered in privity with such a party for purposes of collateral estoppel." Slip op. at 12-13. 

The opinion is available here.

No comments:

Post a Comment

Note: Only a member of this blog may post a comment.