Monday, September 27, 2010

Central and Southern District Courts Conclude “Pioneer Notice” Unnecessary for Federal Wage & Hour Class Actions:

On September 21, 2010, magistrate judges in two separate actions issued rulings concluding that the “opt-out” notice procedure approved in Pioneer Electronics, Inc. v. Superior Court, 40 Cal. 4th 360 (2007) was unnecessary for wage and hour class actions brought in Federal court.  Both orders collectively provide a solid basis for dispensing with an employer’s resistance to producing the contact information of the putative class, precertification.

In Alvarez v. Hyatt Regency Long Beach, 2010 U.S. Dist. LEXIS 99281 (C.D. Cal. 2010), Central District Magistrate Judge, Hon. Victor B. Kenton, noted that “[i]n the class action context, disclosure of names, addresses and telephone numbers is common practice” and that “federal courts faced with these types of discovery issues routinely overcome objections as to privacy interests when balanced against reasonable discovery needs.” See id., at 5. As reasoned by the Court, these considerations, in conjunction with the limited period for conducting precertification discovery, led the Court to conclude that a Pioneer opt-out style notice unnecessary:
Moreover, the Court is not persuaded that an opt-out system is necessary, both for pragmatic and legal reasons. As to the first, such a procedure would be extremely time-consuming, given the short pre-certification discovery period. Further, in Pioneer Electronics, supra, the California Supreme Court supported the proposition that an opt-in style of notice would not be required, but did not impose an opt-out style of notice. See also Tierno v. Rite Aid Corp., 2008 U.S. Dist. LEXIS 58748, 2008 WL 3287035 (N.D. Cal. 2008). Although Plaintiffs initially offered, as a compromise, to utilize a third party and an opt-out system, that is no longer feasible, given the looming deadline for the class certification motion.
See Alvarez, 2010 U.S. Dist. LEXIS 99281, at 5-6.

In Stone v. Advance America, Cash Advance Centers Inc., 2010 U.S. Dist. LEXIS 99754 (S.D. Cal. 2010), Southern District Magistrate Judge, Hon. William McCurine, Jr., followed the court's analysis in Puerto v. Superior Court, 158 Cal. App. 4th 1242 (2008), which had concluded that a “Pioneer” opt-out notice was inapplicable because (1) disclosure of contact information of employees making up the class was “witness” information required by statute, and (2) “‘… a percipient witness’s willingness to participate in civil discovery has never been considered relevant -- witnesses may be compelled to appear and testify whether they want to or not.’” See Stone, 2010 U.S. Dist. LEXIS 99754, at 5-6. Based on this reasoning, the Court concluded that such information was of the variety that should be disclosed in an employer’s pretrial disclosures without a formal discovery demand:
Further, under Federal Rule of Civil Procedure 26(a)(1)(A) "[a] party must, without awaiting a discovery request, provide to the other parties... [t]he name and, if known, the address and telephone number of each individual likely to have discoverable in the information...." Moreover, subsection (b) of that Rule states a party "may obtain discovery regarding any non-privileged matter that is relevant to any parties claim or defense-including... The identity and location of persons who know any discoverable matter." Under the Federal Rules, the information plaintiff seeks is clearly discoverable. Moreover, there is no requirement for any notice provision that would limit this very basic discovery to which plaintiff is clearly entitled under our rules.
See Stone, 2010 U.S. Dist. LEXIS 99754, at 6-7.

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