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Monday, February 6, 2012

Duran v. U.S. Bank: Court of Appeal Reverses Judgment after Class Action Trial, Orders Decertification

In Duran v. U.S. Bank (blogged here), 260 current and former business banking officers employed by U.S. Bank filed suit, alleging that USB misclassified them as outside sales personnel. After a bench trial (Alameda County Superior, Judge Robert B. Freedman) the Court awarded $15 million to the class members and an additional $18 million in attorney fees.

The Court of Appeal has reversed the judgment and ordered the class decertified. I have not had a chance to read this decision (it's 75 pages long), but here's the introduction from the opinion:
Following a bifurcated bench trial, defendant U.S. Bank National Association (USB) has appealed the resulting $15 million judgment in this wage and hour class action brought under Business and Professions Code section 17200 (section 17200). The plaintiffs in the class action are 260 current and former business banking officers (BBO‘s) who claimed they were misclassified by USB as outside sales personnel exempt from California‘s overtime laws, and were thus unlawfully denied overtime pay. In addition to arguing the case should not have been certified as a class action, USB contends the trial court‘s trial management plan deprived it of its constitutional due process rights in that the plan prevented it from defending against the individual claims for over 90 percent of the class. We agree the trial management plan was fatally flawed and reverse the judgment. We also conclude the case must be decertified, and reverse an order awarding certain expert witness fees to plaintiffs. We remand the two named plaintiffs‘ meal and rest break period violation claims for reconsideration in light of the California Supreme Court‘s ruling in Brinker Restaurant Corp. v. Superior Court (2008) 165 Cal.App.4th 25, review granted October 22, 2008 (S166350). 
 I will write more once I have a chance to digest this. The opinion is available here.

An update on Duran.  The employees filed their petition for review in the Supreme Court on March 19.  The employer filed its response on April 25.  The Supreme Court's docket is here.


  1. Steve,

    Do you know if 17200 is now applicable (after Prop 64 in California) to scenarios where an employee was wrongfully terminated (basically a whisteblower situation)? Can 17200 apply, now that it requires "injuries in fact" and lost money/property? (Possibly linking the wrongful termination as something "lost"?)

  2. I can't give legal advice (especially in response to an anonymous post, but I can say that the UCL (Cal. Bus. & Prof. Code 17200 et seq.) applies to "any unlawful, unfair or fraudulent business act or practice..." That language has been interpreted very broadly, but I don't know if any court has interpreted it to include a termination allegedly in violation of public policy. You may want to have a look at for more info.


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