ae WEINBERG, ROGER & ROSENFELD Pahesromn ‘A PROFESSIONAL CORPORATION ities. 41001 Marina Vilage Parkway, Suite 200 Serene ‘Alameda, CA 94501-1091 am. ‘TELEPHONE 510 397.1001 rere FAX 510 397-1023, March 18, 2010 VIA OVERNIGHT DELIVERY The Honorable Ronald George, Chief Justice, and the Associate Justices California Supreme Court 350 McAllister Street San Francisco, CA 94102 Re: Opposition to Request for Depublication (Cal. Rule of Court 8.1125, subd. (b)); Jaimez v. DAIOHS USA, Inc. (Cal.App. 2d Dist. Jan.12, 2010) 181 Cal. App.4" 1286, --- Cal.Rptr.3d ---, 2010 WL 93848; Supreme Court Case No. $180841 To the Chief Justice and the Associate Justices: This firm is counsel to the plaintiff class in Cicairos v. Summit Logistics, San Joaquin Superior Court Case No. CV014837 (“Cicairos”) and putative class representative in Bluford v. Safeway Inc., San Joaquin County Superior Court, Case No. CV028541 (“Bluford”). These two cases have been pending since 2001 and 2006, respectively, and have raised many issues addressed in the Court’s opinion in Jaimez v. DAIOHS USA, Inc. (Cal.App. 2d Dist. Jan.12, 2010) 181 Cal. App.4” 1286, -- Cal.Rptr.3d -~-, 2010 WL 93848 (“Jaimez”). Pursuant to California Rules of Court, Rule 8.1125, subdivision (b), I write on behalf of these clients to oppose the request filed by the law firm of Atkinson, Andelson, Loya, Ruud & Romo (“Atkinson Andelson”) for depublication of the court of appeal’s decision in Jaimez. According to Atkinson Andelson, the implications of the Jaimez decision “can not be overstated” and the decision is “tantamount to a legal earthquake that will inflict incredible harm on California’s employers.” (See Req. for Depub., p. 1.) The actual effect of Jaimez will be to reassure those trial courts that have proceeded to certify classes in meal and rest break cases with full awareness that the future decisions of this, Court in Brinker v. Superior Court (2008) 165 Cal.App.4" 25 (rev. granted Oct. 22, 2008), $166350, and Brinkley v. Superior Court (2008) 167 Cal.App.4™ 1278 (rev. granted Jan. 14, 2009), $168806, may ultimately provide critical guidance on the proof required at trial for plaintiff’ to prevail on such claims. “uosiiere Boasts ita 62 “2 Set Sut 50. ‘oe ie Soe Sut 02 Senge c8 set uous th anieaset Here 4809March 18, 2010 ‘The Honorable Ronald George, Chief Justice, and the Associate Justices Page 2 Since this Court granted review in Brinker, defendant employers have sought to delay cases on grounds that no trial court proceedings should continue until Brinker or both Brinker and Brinkley are decided. Some of these cases date back many years like the suit brought by Albert Cicairos and others in September 2001. After the judge granted class certification in Cicairos in November 2009, over eight years after the filing of the lawsuit, the defendant filed a motion to stay the case, citing the need to await the forthcoming decisions in Brinker and Brinkley. This motion was denied, On the other hand, in the parallel case of Bluford v. Safeway, filed in 2006 and involving many of the same plaintiff class members and virtually identical legal and factual issues during a different time period, the judge has delayed ruling on a motion for class certification | nearly identical to the one in Cicairos until the Court issues its rulings in Brinker and Brinkley. The inconsistency between these outcomes is indicative of the need for trial courts to have appellate guidance on the principles governing class certification motions during this period in which the Court has not yet set oral argument in Brinker and Brinkley does not even have a briefing schedule. The Jaimez court provided a much needed corrective to arguments that would bring substantial litigation to a halt simply because some questions raised in the cases will arguably be decided in cases pending at the appellate or Supreme Court level. According to Jaimez, applying established California class action principles, the existence of unsettled questions of law does not, and should not, bar certification of class actions provided there is substantial evidence that plaintiff&’ theory of recovery is susceptible to common proof and common issues of law and fact predominate over individual issues. The Jaimez court explained, “Naturally, we cannot and need not try to predict the outcome of the Supreme Court's review, as we are not, at this stage, charged with adjudicating the legal or factual merits of Jaimez’s causes of action.” (Slip. op. at p. 19.) A. The Arguments That Jaimez Should Be Depublished Are Unpersuasive 1, The Court of Appeal’s Opinion Does Not “Effectively Preempt” This Court's Forthcoming Decisions in Brinker and Brinkley Atkinson Andelson provides no explanation of its claim that the Jaimez decision will preempt this Court’s decisions. In fact, the court of appeal took pains to do the opposite. ‘Most notably, the court of appeal expressly declared its agnosticism about the standard this Court will articulate in defining the extent of an employer's affirmative duty to provide meal breaks under the Labor Code and the Industrial Welfare Commission’s wage orders, whether it is merely to “make available” meal periods, as held in Brinker, or to “ensure that workers are relieved of all duty,” as held in Cicairos, or some third formulation, yet to be expressed.March 18, 2010 The Honorable Ronald George, Chief Justice, and the Associate Justices Page 3 Atkinson Andelson asserts that the court of appeal “took it upon itself to jump the gun and resolve the very issues this Court is considering” (see Req. for Depub., p. 2), but provides no concrete example of any such issue. 2, The Court of Appeal’s Opinion Properly States and Applies the Standards This Court Has Set for Determining Whether Class Certification Is Appropriate Atkinson Andelson reads the court of appeal decision as holding that “any time there is an allegation in the complaint of a common policy or practice by the employer ... that allegation is amenable to class treatment and therefore the trial court should certify the matter as a class action, irrespective of what evidence an employer might offer in opposition to the motion for class certification.” (See Req. for Depub., p. 2.) This is a crude misreading of Jaimez. Contrary to Atkinson Andelson, the court of appeal did not hold that a class action may be certified merely on the basis of an allegation in the complaint of a common policy or practice by the employer. First, the plaintiff came forward with evidence to support the existence of common policies and practices applying to the entire putative class. A class certification hearing is an evidentiary proceeding and, even though live testimony is rare, the trial court generally has before it declarations of putative class members, excerpts from deposition testimony, and documentary evidence to show whether there is substantial evidence to support a certification order. So it was in the Jaimez case. The court of appeal decision discussed at length evidence provided by the plaintiff in support of his theory of recovery and did not rely on bare allegations in the complaint. Second, the plaintiff provided an explanation for how he would attempt to prove liability at trial. Plaintiff's counsel “offered a case management plan should the case proceed to trial, addressing the number of class members who would be required to testify at trial, a proposal to use survey evidence and representative sampling in the case in chief, and his view on the availability of evidence regarding damages.” (Slip op. at p. 6.) As the court of appeal recognized, “California courts consider ‘pattem and practice evidence, statistical evidence, sampling evidence, expert testimony, and other indicators of a defendant's centralized practices in order to evaluate whether common behavior toward similarly situated plaintiffs makes class certification appropriate.” (Slip op. at pp. 12-13, quoting Sav-On Drug Stores, Inc. v. Superior Court (2004) 34 Cal.4" 319, 333.) Third, in evaluating defendant's evidence proffered to dispute the effects of its centralized policies and practices, the court of appeal hearkened to the well-established principle that the class certification question is “essentially a procedural one that does notMarch 18, 2010 The Honorable Ronald George, Chief Justice, and the Associate Justices Page 4 ask whether an action is legally or factually meritorious.” (See slip op. at p. 12, quoting Sav-On Drug Stores, supra, 34 Cal.4” at p. 326, quoting Linder v. Thrifty Oil Co. (2000) 23 Cal.4" 429, 435-436.) The court of appeal found that the trial court had lost its way by attempting to adjudicate the merits of plaintiff's theory against the defendant, rather than its amenability to class treatment: The trial court focused on the merits of the declarations, evaluating the contradictions in the parties’ responses to the company’s uniform policies and practices, not the policies and practices themselves. The determination of whether to certify a class does not contemplate an evaluation of the merits. Our concern is whether the trial court applied the corect egal criteria when reviewing the First Choice leclarations: whether the declarations constitute substantial evidence to counter the First Choice’s alleged Labor Code and wage order violations and whether the claims of such violations are more amenable to class rather than individual treatment. In fact, had the trial court focused on the correct criteria, it would have necessarily found the First Choice declarations, while identifying individual effects of policies and practices that may well call for individual damages determinations, nevertheless confirm the predominance of common legal and factual issues that make this case more amenable to class treatment. The court of appeal then proceeded to detail the common legal and factual issues with respect to each of the claims. (See slip op. at pp. 16-23.) Fourth, the court of appeal subjected its entire analysis of commonality to one final, but crucial test, namely, “whether ... the issues which may be jointly tried, when compared with those requiring separate adjudication, are so numerous or substantial that the maintenance of a class action would be advantageous to the judicial process and to the litigants.” (Slip op., quoting Sav-On, supra, 34 Cal.4" at p. 326.) In this regard, the court of appeal highlighted this Court’s observation that “{tJhe relevant comparison lies between the costs and benefits of adjudicating plaintiffs” claims in a class action and the costs and benefits of proceeding by numerous separate actions ....” (Jd., quoting Sav-On at p. 339, fi. 10.) Depublication of this case will, at least temporarily, deprive the trial courts of the benefit of the Jaimez decision’s affirmation that this Court’s footnote in Sav-On should guide courts that are deciding class certification to consider the correct comparison with respect to judicial efficiency and advantages to litigants as between a class action and numerous individual actions and not a class action and no litigation at all. This Court has more than once expressed its concern about the danger of “random and fragmentary enforcement” of employer legal obligations and “failure of justice in our judicial system” if class actions are not available to address alleged systematic violations of our wage and hour laws. (See Gentry v. Superior Court (2007) 42 Cal.4" 443, quoting Bell v. Farmers Ins.March 18, 2010 ‘The Honorable Ronald George, Chief Justice, and the Associate Justices Page 5 Exchange (2004) 115 Cal.App.4" 715, 745, and Lindner v. Thrifty Oil Co. (2000) 23 Cal.4™ 429, 434,) A plaintiff's claims may ultimately fail. A grant of class certification is not summary adjudication in favor of plaintiff on its theory of liability. Neither should class certification be denied merely because a defendant proffers some evidence to counter the plaintiff's class theory of liability. 3. The Court of Appeal’s Opinion Regarding the Injury Requirement Under Labor Code Section 226 Is Not Fatally Flawed Atkinson Andelson’s final argument for depublication makes no reference to any standard for publication or depublication, and simply asserts that the court's opinion is wrong. Labor Code section 226, subdivision (a), requires employers to provide employees with “an accurate itemized statement in writing” showing, among other things, “total hours worked” and “all applicable hourly rates in effect during the pay period and the corresponding number of hours worked at each hourly rate.” (Labor Code § 226, subd. (a).) “An employee suffering injury as a result of a knowing and intentional failure by an employer to comply with [section 226, subdivision (a)] is entitled to recover the greater of all actual damages” or a statutory amount based on the number of pay periods in which violations occurred and subject to a $4,000 cap. (Labor Code § 226, subd. (e).) As have other employers of late, First Choice argued that wage statement claims can never be adjudicated on a class-wide basis because employees must establish “actual injury” arising from the receipt of inaccurate wage statements on an individualized basis, The Jaimez court rejected this blanket argument against class certification of itemized wage statement claims, and expressed agreement with the only published cases on point: two federal district cases that, in the words of the Jaimez decision, “set a fairly minimal standard for the requisite injury” to establish entitlement to recovery under section 226, subdivision (e). (See slip op. at pp. 21-22, discussing Wang v. Chinese Daily News, Inc. (C.D. Cal. 2006) 435 F.Supp.2d 1042 and Elliot v. Spherion Pacific Work, LLC (C.D. Cal. 2008) 572 F.Supp.2d 1169.) Atkinson Andelson caricatures the Jaimez court’s decision as holding that an employee “suffers injury” under Labor Code section 226 “by merely filing a lawsuit to recover alleged unpaid wages.” (Req, for Depub., at p. 3.) This caricature ignores the court of appeal’s discussion of the federal cases which found sufficient injury in the difficulty and expense in determining whether one has been paid correctly. The federal courts’ interpretation is well-supported by the design of the statute itself which is clearly intended to require employers to make the calculation of wages transparent to employees so they can determine without undue effort or reference to other materials whether theyMarch 18, 2010 The Honorable Ronald George, Chief Justice, and the Associate Justices Page 6 have been paid correctly. Further evidence of the Legislature’s intent is its allowance to injured employees of a statutory amount if it is greater than “actual damages.” This clearly reflected the Legislature’s anticipation that “actual damages” may be difficult to quantify, even where injury is widespread. B. Conclusion There is nothing surprising nor radical in the Jaimez decision, but there is useful commentary and application of established class action principles to issues that trial courts must deal with every day as wage and hour cases proceed. Although Atkinson Andelson characterize the ramifications of Jaimez as “staggering” “in both legal and economic terms” (see Req. for Depub., at p. 3), nothing explains this claim except the unjustified assumption that certification operates uniquely to the benefit of plaintiffs and, therefore, should be discouraged. In fact, plaintiffs can both live and die by their theories of recovery. What class certification does assure is that common legal and factual questions involving large groups of employees will be decided in a consistent way and with a rough equality of resources and opportunity for employees and employers to present relevant evidence. The Request for Depublication disregards the fact that as the law evolves, through, among other vehicles, this Court’s future decisions in Brinker and Brinkley, the trial courts and courts of appeal will be in a position to correct any errors that have been made. Trial court decisions to certify classes may be revisited if further proceedings or legal developments undermine the basis for class certification prior to trial. Meanwhile, the notion that no cases involving meal and rest breaks should proceed in the trial courts or be certified as class actions until Brinker and Brinkley are decided is a formula for needless delay. Sincerel: Theodore Franklin TRAX ce: (Additional recipients on service list attached) ar311564927|