Search This Blog

Friday, May 13, 2016

Alvarado v. Dart Container Corp.: Cal. Supremes Grant Review to Decide Overtime Rate of Pay Issue

In Alvarado v. Dart Container Corporation of California (Cal.App. 1/14/16) (discussed here), the California Court of Appeal held: (1) California law does not provide a method of calculating overtime rates of pay where the employer pays its employees an hourly rate of pay, plus a flat sum daily attendance bonus; (2) the employer here properly followed the formula set forth in the Code of Federal Regulations for paying overtime.

The Supreme Court granted review on May 11. Alvarado is case no. S232607, and the Court's web page for it is here

Wednesday, May 4, 2016

Chen v. Allstate: Depositing Money into Escrow Account Does Not Moot Putative Class Action; Plaintiff Must Have "Fair Opportunity" to Move for Certification

In Campbell-Ewald Co. v. Gomez (SCOTUS 1/21/16) (discussed here), the Supreme Court of the United States held that an unaccepted offer to satisfy the named plaintiff ’s individual claim does not render a putative class action moot. The Court did not decide the following issue: 
We need not, and do not, now decide whether the result would be different if a defendant deposits the full amount of the plaintiff’s individual claim in an account payable to the plaintiff, and the court then enters judgment for the plaintiff in that amount. That question is appropriately reserved for a case in which it is not hypothetical.
Chen v. Allstate Insurance Company (9th Cir. 4/12/16) is that case. Two plaintiff filed a putative class action against Allstate for violation of the Telephone Consumer Protection Act (TCPA). Before the plaintiffs moved for class certification, Allstate made a Rule 68 offer of judgment to satisfy their individual monetary and non-monetary demands. One plaintiff accepted the offer, but the other, Pacleb, rejected. Allstate moved to dismiss the case, arguing that it was now moot, the district court denied the motion, and the Ninth Circuit gave Allstate permission to appeal. 

While the appeal was pending and shortly after the Supreme Court issued its decision in Campbell-Ewald, Allstate deposited $20,000 into an escrow account pending entry of an order or judgment granting full monetary and injunctive relief to Pacleb. Allstate then added this as a basis to reverse the district court's order. The Ninth Circuit declined to do so, holding as follows: 

The judgment that Allstate offered would afford Pacleb complete relief on his individual claims for damages and injunctive relief. Pacleb did not seek an admission of liability or declaratory relief, and an admission of liability is not required to afford him complete relief. And although Allstate's offer would not necessarily preclude Pacleb from obtaining nation-wide injunctive relief, Pacleb failed to show that injunctive relief limited to him personally would be inadequate. 

Regardless, "Even if, as Allstate proposes, the district court were to enter judgment providing complete relief on Pacleb's individual claims for damages and injunctive relief before class certification, fully satisfying those individual claims, Pacleb still would be entitled to seek certification." 

Pitts v. Terrible Herbst, 653 F.3d 1081 (2011) (discussed here), in which the Ninth Circuit held that an unaccepted offer in full satisfaction of a plaintiff's claims does not moot a putative class action, remains good law after Genesis Healthcare Corp. v. Symczyk, 133 S.Ct. 1523 (2013) (discussed here), in which the Supreme Court held that when a named plaintiff's individual claims are moot in a collective action under the Fair Labor Standards Act (FLSA), the action was no longer justiciable based solely on the collective action allegations made in the complaint. Genesis Healthcare is limited to FLSA collective actions, rather than Rule 23 class actions. 

Allstate did not afford any "actual relief" to Pacleb by placing $20,000 in an escrow account. Pacleb did not actually receive the money, and a court still could award him "effectual relief." Allstate did not deposit the money with the court or relinquish all interest in it. 

Assuming, without deciding, that "a court has authority in an appropriate case to enter judgment for complete relief on a plaintiff’s individual claims over the plaintiff’s objection," a court should not do so until the plaintiff has "a fair opportunity to show that certification is warranted." 

In conclusion:
We hold the judgment Allstate has consented to would afford Pacleb complete relief on his individual claims for damages and injunctive relief. To date, however, Pacleb has not actually received complete relief on those claims. Those claims, therefore, are not now moot. In addition, because “a would-be class representative with a live claim of her own must be accorded a fair opportunity to show that certification is warranted,” id., we will not, as Allstate urges, direct the district court to enter judgment on Pacleb’s individual claims before Pacleb has had a fair opportunity to move for class certification. Finally, even if Pacleb’s individual claims were otherwise fully satisfied, he could continue to seek class certification under Pitts.
The opinion is available here

Tuesday, May 3, 2016

Sheppard, Mullin, Richter & Hampton, LLP v. J-M Manufacturing: Cal. Supreme Court Grants Review in Attorney Fee Arbitration Battle

Sheppard, Mullin, Richter & Hampton, LLP v. J-M Manufacturing Co., Inc. (2016) 244 Cal.App.4th 590 is not an employment law case, but it raises an interesting arbitration issue that may end up having an impact on employment law practice. The California Supreme Court granted review on April 27, and the issues presented are listed as follows:
(1) May a court rely on non-legislative expressions of public policy to overturn an arbitration award on illegality grounds?  
(2) Can a sophisticated consumer of legal services, represented by counsel, give its informed consent to an advance waiver of conflicts of interest?  
(3) Does a conflict of interest that undisputedly caused no damage to the client and did not affect the value or quality of an attorney’s work automatically (i) require the attorney to disgorge all previously paid fees, and (ii) preclude the attorney from recovering the reasonable value of the unpaid work?
The first issue obviously is of greatest interest for our purposes. Sheppard Mullin is case number S232946, and the Court's web page for it is here.

Monday, May 2, 2016

Espejo v. Southern California Permanente Med. Group: Defendants Properly Authenticated Electronically Signed Arbitration Agreement

In Espejo v. Southern California Permanente Medical Group (Cal.App. 4/22/16), Jay Espejo, M.D., sued Southern California Permanente Medical Group (SCPMG) and others for wrongful termination and whistleblower retaliation. The trial court denied defendants' motion to compel arbitration based on an electronically signed arbitration agreement. The Court of Appeal reversed, holding as follows: 

Defendants were not required to authenticate the arbitration agreement until Espejo challenged it. A party petitioning to compel arbitration must make a prima facie showing that an agreement exists, but not that it is enforceable. Only after the party opposing the petition challenges the agreement's authenticity does the petitioner bear the burden of proving it. As a result, the trial court erred in striking a supplemental declaration - not filed with the moving papers - that defendants used to authenticate the arbitration agreement. 

Defendants met their burden of authenticating Espejo's electronic signature on the arbitration agreement. 
[Defendants' declarant] detailed SCPMG’s security precautions regarding transmission and use of an applicant’s unique user name and password, as well as the steps an applicant would have to take to place his or her name on the signature line of the employment agreement and the [arbitration agreement]. Based on this procedure, she concluded that the “name Jay Baniaga Espejo could have only been placed on the signature pages of the employment agreement and the [arbitration agreement] by someone using Dr. Espejo’s unique user name and password. . . . [¶] Given this process for signing documents and protecting the privacy of the information with unique and private user names and passwords, the electronic signature was made by Dr. Espejo” on the employment agreement and the [arbitration agreement] at the date, time, and IP address listed on the documents.
The opinion is available here