Second District Grants Requests for Publication in Jaimez v. DAIOHS USA, Inc.

On February 8, 2010, the Second District (Division One) granted numerous requests (including one filed by yours truly) to publish its decision in Jaimez v. DAIOHS USA, Inc., __ Cal.App.4th __ (2010). Jaimez is now citeable authority.  Some general discussion of Jaimez may be found at my previous post contained here. I will likely provide some further discussion of the Court’s opinion later.

Second District, Division Four, Disagrees With Division Eight’s Opinion in Cohen v. DIRECTV

On February 8, 2010, the Second District, Division Four, issued a modification of its opinion in Steroid Hormone Product Cases (previously discussed here), to include discussion distinguishing its opinion from prior opinions Cohen v. DIRECTV, Inc., 178 Cal.App.4th 966 (2009) and In re Vioxx Class Cases, 180 Cal.App.4th 116 (2009). Significantly, as reflected by the highlighted discussion below, the Court overtly stated disagreement with the conclusion in Cohen that a trial court may consider absent class member reliance when certifying UCL claim under the fraudulent prong:

In discussing the UCL claim, the appellate court [in Cohen] noted that Tobacco II, supra, 46 Cal.4th 298, was irrelevant to class certification because it addressed only the issue of standing, and did not instruct “our state’s trial courts to dispatch with an examination of commonality when addressing a motion for class certification.” (Cohen, supra, 178 Cal.App.4th at p. 981.) The court then concluded that the trial court’s concern that the plaintiff’s UCL and CLRA claims would involve individual factual issues regarding class members’ reliance on the alleged misrepresentations “was a proper criterion for the court’s consideration when examining ‘commonality’ in the context of the subscribers’ motion for class certification, even after Tobacco II.” (Ibid.)

We agree that Tobacco II did not dispense with the commonality requirement for class certification. But to the extent the appellate court’s opinion might be understood to hold that plaintiffs must show class members’ reliance on the alleged misrepresentations under the UCL, we disagree. As Tobacco II made clear, Proposition 64 did not change the substantive law governing UCL claims, other than the standing requirements for the named plaintiffs, and “before Proposition 64, ‘California courts have repeatedly held that relief under the UCL is available without individualized proof of deception, reliance and injury.’ [Citation.]” (Tobacco II, supra, 46 Cal.4th at p. 326.).

Slip Opinion, at 2.

Ninth Circuit Finds Dell Class Action Waiver Unconscionable in Omstead v. Dell, Inc.

On February 5, 2010, the Ninth Circuit issued an opinion disapproving of the use of class action waivers in Omstead v. Dell, Inc. – a proposed class case alleging that Dell designed, manufactured, and sold defective notebook computers.  The Court’s opinion comes on the heels of a similar opinion in Laster v. AT&T Mobility LLC, discussed here, concluding a class action waiver used by AT&T in connection with a “free phone” sales promotion was unconscionable under California law.

Fourth District Upholds Summary Judgment Against Employer on Administrative Exemption in Pellegrino v. Robert Half International

On January 28, 2010, the Fourth District issued an opinion in Pellegrino V. Robert Half International, Inc., __ Cal.App. 4th __ (2010), upholding a trial court order granting summary judgment in favor of plaintiffs on the administrative exemption. The Court’s opinion contains two noteworthy components.

First, the court held that the trial court did not abuse its discretion in finding that a “limitation on claims” provision contained in plaintiffs’ employment agreements – which shortened the statute of limitations for employment claims to six months – was unenforceable under California law. As reasoned by the Court, “the trial court did not err because plaintiffs’ claims were based on unwaivable and fundamental statutory rights, and the provision drastically shortening to six months the time in which an employee might vindicate such rights violates [Labor Code] section 219 and public policy, and is thus unenforceable.” See Slip Opinion, at 11-27. Such non-waivable rights, in the view of the Court, included the right to overtime compensation [id., at 13-15], Meal and Rest periods [id., at 15-16], itemized wage statements [id., at 16-18], and the right to be paid commissions as wages. Id., at 18-19.

With regard to plaintiffs’ substantive claim, the Court concluded that defendant failed to establish plaintiffs performed work “directly related to the management polices or general business operations” of RHI or its customers – the 3rd element of the administrative exemption:

Here, substantial evidence showed plaintiffs' duties as account executives for RHI were not directly related to management policies because they instead constituted sales work. The evidence presented at trial included the following: (1) at RHI, a direct sale occurred when a candidate was placed with a client; (2) account executives were trained in sales and evaluated on how well they met or exceeded minimum sales production numbers; (3) account executives were primarily responsible for selling the services of RHI's temporary employees to clients; (4) when the account executives were not either soliciting potential clients for sales or placing orders for clients, they were recruiting more candidates for RHI's “inventory,” an activity which consumed about 30 percent of their time; (5) account executives had no role in supervising the temporary employees after they were placed and no responsibility for the administrative support staff in the account executives' offices; (6) account executives did not form policy but followed the “recipe,” including the three-week rotation system in performing their duties as required by headquarters; and (7) corporate headquarters included a human resources department, marketing department, and legal department designed to support the account executives' function—to focus on making sales.

See Slip Opinion, at 42-43

California Supreme Court Denies Petition for Review in Princess Cruise Lines

On February 3, 2010, the California Supreme Court denied plaintiffs’ petition for review in Princess Cruise Lines, Ltd. v. Superior Court, 179 Cal. App. 4th 36 (2d Dist., 2009).  Princess was one of the first CAP opinions to address Prop 64 standing, and specifically the element of named plaintiff reliance, subsequent to Tobacco II, 46 Cal. 4th 298 (2009).

Princess turned on Tobacco II’s findings that (1) “a presumption, or at least an inference, of reliance arises wherever there is a showing that a misrepresentation was material” [See id., at 327], and (2) that the named plaintiff “is not required to necessarily plead and prove individualized reliance on specific misrepresentations or false statements where … those misrepresentations and false statements were part of an extensive and long-term advertising campaign.” See id., at 327-28. The Princess Court found Tobacco II distinguishable, reasoning that the named plaintiffs could not claim that misrepresentations relating to a sur-charge imposed on certain travel were “material” when they admitted at deposition that they would have booked the subject travel “whatever it cost.” See Princess, 179 Cal. App. 4th at 43-44. Moreover, the CAP concluded that plaintiffs were foreclosed from claiming to have been subject to an “extensive and long-term advertising campaign” by Princess when they admitted at deposition that they had no contact of any kind with Princess prior to embarking on the cruise, and that all representations in question were made, not by Princess, but the travel agent through which they booked the travel. See id., at 44.

Los Angeles Superior Court Judge Censured for Order Directing Payment of Class Counsel’s Fees by Way of “Gift Cards”

On February 2, 2010, the California Commission on Judicial Performance issued a decision imposing censure on Judge Brett C. Klein, retired, arising out of Judge Klein’s sua sponte modification of a proposed final order to provide for the payment of $125,000 in attorney's fees in $10 gift cards, and by his action in transmitting the order to the press. A copy of the Commission’s Order is posted here. The Order imposes the strictest of penalties – barring Judge Klein from holding judicial office in the state of California and from receiving an assignment, appointment, or reference of work from any California state court.

Advocate Magazine Dedicates February Edition to Articles on Class Actions and Mass Torts

This month’s edition of Advocate dedicates its entire edition to the subject of class actions and mass torts. There are numerous great articles, including one authored by myself entitled In re Tobacco II Cases almost one year later: A boon for California consumers, or a bust? An electronic edition is available online at the CAALA website here.  My article is contained on pages 52-59.