Litigating California Wage & Hour and Labor Code Class Actions
Litigating California Wage & Hour and Labor Code Class Actions Litigating California Wage & Hour and Labor Code Class Actions
method which considers the amount of time the class counsel reasonably expended working on the action. 343 In any event, in connection with any proposed coupon settlement, the court may approve the settlement only after a hearing and “a written finding” that the settlement is “fair, reasonable, and adequate for class members.” 344 In True v. American Honda Motor Company, the district court reiterated that heightened scrutiny is necessary in reviewing coupon settlements, which are generally disfavored. 345 The court gave three reasons why such settlements are generally disfavored: “they often do not provide meaningful compensation to class members; they often fail to disgorge illgotten gains from defendant; and they often require class members to do future business with the defendant in order to receive compensation.” 346 Nonetheless, coupon settlements can be approved if the value of the specific coupon settlement is “reasonable in relation to the value of the claim surrendered.” 347 Settlements may also not be approved if any class member is forced to pay an amount to class counsel that would result in a net loss to the class member, unless the court makes a written finding that the benefits substantially outweigh the loss. 348 Finally, the court will not approve a settlement that provides for a payment to some class member that is more than the payment to others solely due to their geographic proximity to the court. 349 The CAFA also contains specific requirements regarding the issuance of class settlement notifications. 350 The CAFA requires defendants to serve a notice on (1) the “appropriate federal official” and (2) the “appropriate state official.” 351 The notice must include several things, including copies of the complaint, notices of scheduled judicial hearings, proposed or final notification to class members of rights to request for exclusion, any proposed or final class action settlement, among other papers. 352 343 344 345 346 347 348 349 350 351 352 See id. § 1712(b)(1). See id. § 1712(e). True v. Amer. Honda Motor Co., 749 F. Supp. 2d 1052, 1069 (C.D. Cal. 2010). Id. (citing Figueroa v. Sharper Image Corp., 517 F. Supp. 2d 1292, 1302 (S.D. Fla. 2007)). Id. See 28 U.S.C. § 1713. See 28 U.S.C. § 1714. See 28 U.S.C. § 1715. See id. § 1715(a). See id. § 1715(b). Seyfarth Shaw LLP | www.seyfarth.com Litigating California Wage & Hour Class Actions (12th Edition) 74
XIV. Class Certification A. General Requirements In order to certify a class action, plaintiffs must show “the existence of an ascertainable class and a well-defined community of interest among the class members.” The community of interest requirement embodies three factors: (1) predominant common questions of law or fact, (2) class representatives with claims or defenses typical of the class, and (3) class representatives who can adequately represent the class.” 353 There must also be enough class members to make the effort worthwhile. These elements are referred to as ascertainability, commonality or predominance, typicality, adequacy, and numerosity. Class certification is most often defeated on commonality or predominance grounds, and less often on the grounds of typicality, adequacy, ascertainability, and numerosity. In the past, some defendants resisted class certification by arguing that plaintiffs would not be able to establish liability on the merits. In 2000, the California Supreme Court formally rejected such a practice, holding that a trial court could not consider the factual or legal merits in deciding class certification, except to the (limited) extent that the merits affected the ascertainability of the class. 354 In other words, while it is appropriate for the trial court to examine the evidence closely to determine if the relevant class action factors have been met (e.g., predominance of common issues), the court may not deny class certification on the ground that the class claims ultimately lack substantive merit. 355 However, as discussed in more detail below, courts must make necessary factual and legal inquiries regardless of whether they overlap with the merits, in order to ascertain whether the claims alleged are amenable to resolution on a class-wide basis. 356 Recent 353 354 355 356 Richmond v. Dart Indus., Inc., 29 Cal. 3d 462, 470 (1981). Linder v. Thrifty Oil, 23 Cal. 4th 429 (2000). The procedure disallowed in Linder should be distinguished from a precertification motion for summary judgment as to the individual’s claims. Such a motion, if granted as to all named plaintiffs, effectively would defeat class certification because it would remove all adequate representatives. Allen v. Pacific Bell, 348 F.3d 1113, 1115 (9th Cir. 2003). Such a pre-certification summary judgment would not bind the class, however. See Brinker Restaurant Corp. v. Superior Court, 2012 WL 1216356 at * 7 (Cal. 2012) (“Presented with a class certification motion, a trial court must examine the plaintiff’s theory of recovery assess the nature of the legal and factual disputes likely to be presented, and decide whether individual or common issues predominate. To the extent the propriety of certification depends upon disputed threshold legal or factual questions, a court may, and indeed must, resolve them”); Bartold v. Glendale Fed. Bank, 81 Cal. App. 4th 816, 829 (2000) (“when the merits of the claim are enmeshed with class action requirements, the trial court must consider evidence bearing on the factual elements necessary to determine whether to certify the class”). Wal-mart Stores, Inc. v. Dukes , 131 S. Ct. 2541, 2551-52 (2011) (citing Gen. Telephone Co. of S.W. v. Falcon, 457 U.S. 147, 102 S. Ct. 2364, 72 L. Ed. 2d 740 (1982)); see also Ellis v. Costco Wholesale Corp., 657 F.3d 970, 984 (9th Cir. 2011) (holding the district court erred by failing to conduct a “rigorous analysis” of the merits to determine whether the plaintiffs had established commonality under Rule 23); In re Hydrogen Peroxide Antitrust Litig., 552 F.3d 305, 318 (3d Cir. 2008) (class certification requires “thorough examination” of factual and legal allegations; “rigorous analysis may include a preliminary inquiry into the merits” and consideration of “the substantive elements of the plaintiffs’ case in Seyfarth Shaw LLP | www.seyfarth.com Litigating California Wage & Hour Class Actions (12th Edition) 75
- Page 25 and 26: declare such a system illegal witho
- Page 27 and 28: employers should be able to defend
- Page 29 and 30: waive the right to reimbursement, s
- Page 31 and 32: Due to the ambiguity in the meaning
- Page 33 and 34: For each workday the employer fails
- Page 35 and 36: Arguably, no additional $100-per-pa
- Page 37 and 38: permitted” the employee to work t
- Page 39 and 40: federal decisions also held that an
- Page 41 and 42: for all overtime hours worked. The
- Page 43 and 44: much broader, such as the court’s
- Page 45 and 46: In the appeal of Chau, the appellat
- Page 47 and 48: years before the lawsuit, or for an
- Page 49 and 50: imposition of penalties, 194 routin
- Page 51 and 52: In one such class action, Elliot v.
- Page 53 and 54: First, there has been a substantial
- Page 55 and 56: Recent court decisions have begun t
- Page 57 and 58: of her hours was paid at a rate of
- Page 59 and 60: the limitations period for a penalt
- Page 61 and 62: passage, then the employee could st
- Page 63 and 64: all, but rather simply to proceed w
- Page 65 and 66: Shortly thereafter, another Divisio
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- Page 69 and 70: XIII. Class Action Fairness Act of
- Page 71 and 72: the plaintiff is “master of her c
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- Page 83 and 84: Similarly, employers may argue that
- Page 85 and 86: A 5 to 4 ruling reversed the Ninth
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- Page 89 and 90: employer’s defense arsenal, and t
- Page 91 and 92: In reaching this conclusion, the Co
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- Page 95 and 96: is to be so maintained.” This det
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- Page 99 and 100: Puerto, or Crab Addison cases would
- Page 101 and 102: epresentative. That question was an
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- Page 107 and 108: Initially, there appeared to be a v
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method which considers the amount of time the class counsel reasonably expended<br />
working on the action. 343<br />
In any event, in connection with any proposed coupon settlement, the court may approve<br />
the settlement only after a hearing <strong>and</strong> “a written finding” that the settlement is “fair,<br />
reasonable, <strong>and</strong> adequate for class members.” 344<br />
In True v. American Honda Motor Company, the district court reiterated that heightened<br />
scrutiny is necessary in reviewing coupon settlements, which are generally disfavored. 345<br />
The court gave three reasons why such settlements are generally disfavored: “they often<br />
do not provide meaningful compensation to class members; they often fail to disgorge illgotten<br />
gains from defendant; <strong>and</strong> they often require class members to do future business<br />
with the defendant in order to receive compensation.” 346 Nonetheless, coupon settlements<br />
can be approved if the value of the specific coupon settlement is “reasonable in relation to<br />
the value of the claim surrendered.” 347<br />
Settlements may also not be approved if any class member is forced to pay an amount to<br />
class counsel that would result in a net loss to the class member, unless the court makes a<br />
written finding that the benefits substantially outweigh the loss. 348 Finally, the court will not<br />
approve a settlement that provides for a payment to some class member that is more than<br />
the payment to others solely due to their geographic proximity to the court. 349<br />
The CAFA also contains specific requirements regarding the issuance of class settlement<br />
notifications. 350 The CAFA requires defendants to serve a notice on (1) the “appropriate<br />
federal official” <strong>and</strong> (2) the “appropriate state official.” 351 The notice must include several<br />
things, including copies of the complaint, notices of scheduled judicial hearings, proposed<br />
or final notification to class members of rights to request for exclusion, any proposed or<br />
final class action settlement, among other papers. 352<br />
343<br />
344<br />
345<br />
346<br />
347<br />
348<br />
349<br />
350<br />
351<br />
352<br />
See id. § 1712(b)(1).<br />
See id. § 1712(e).<br />
True v. Amer. Honda Motor Co., 749 F. Supp. 2d 1052, 1069 (C.D. Cal. 2010).<br />
Id. (citing Figueroa v. Sharper Image Corp., 517 F. Supp. 2d 1292, 1302 (S.D. Fla. 2007)).<br />
Id.<br />
See 28 U.S.C. § 1713.<br />
See 28 U.S.C. § 1714.<br />
See 28 U.S.C. § 1715.<br />
See id. § 1715(a).<br />
See id. § 1715(b).<br />
Seyfarth Shaw LLP | www.seyfarth.com <strong>Litigating</strong> <strong>California</strong> <strong>Wage</strong> & <strong>Hour</strong> <strong>Class</strong> <strong>Actions</strong> (12th Edition) 74
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