Duane Morris Takeaway: This week’s episode of the Class Action Weekly Wire features Duane Morris partner Jennifer Riley and special counsel Brandon Spurlock with their analysis of key trends and notable rulings throughout class action litigation at the state court level.
Episode Transcript
Jennifer Riley: Thank you for being here again, for the next episode of our Friday weekly podcast, the Class Action Weekly Wire. I’m Jennifer Riley, partner at Duane Morris, and joining me today is special counsel Brandon Spurlock. Thank you, Brandon, for being on the podcast.
Brandon Spurlock: Great to be here, Jen.
Jen: So today we wanted to discuss trends and important developments in state court class action litigation, since the decision on where to file a class action will always be an important strategic decision for plaintiffs’ lawyers – especially those seeking to maximize their odds for class certification, as well as seeking larger verdicts, settlements, and things of that nature. Whether it is between state or federal court, or deciding in which particular to state to file, many factors impact this decision. Brandon, can you tell our listeners what some of those factors are?
Brandon: Sure. Although almost all state law procedural requirements for class certifications mirror Rule 23 of the Federal Rules, the plaintiffs’ bar often perceives state courts as having a more positive predisposition toward their clients’ interests, particularly where putative class members have connections to the state or when the events at issue occurred in the state where the action is filed. But beyond forum shopping between state and federal court, the plaintiff’s bar also seeks out individual states that are believed to be “plaintiff friendly” such as California, Georgia, Florida, Illinois, Louisiana, Massachusetts, Missouri, to name some others – these are all among the leading states where plaintiffs’ lawyers file a volume of class actions. These courts are thought to have more relaxed procedural rules related to discovery, consolidation, and class certification, a lower bar for evidentiary standards, higher than average jury awards, among other considerations. All of this incentivizes forum-shopping related to state class actions.
Jen: In reviewing key state court class action decisions and analyzing class certification rulings, it seems that many state courts tend to apply a fairly typical Rule 23-like analysis, similar to the analysis we would see in federal court, although many state decisions also focus on the underlying claims at issue to address whether a class certification is appropriate and whether the matter should proceed on a class basis. Nevertheless, that said, understanding how state courts apply those respective Rule 23 analyses under the applicable state procedural law is really crucial I think toward effectively navigating those complexities and developing effective defense strategies in these types of lawsuits.
Brandon: Jen, I think that’s absolutely right. Another important topic for companies is state private attorney general laws. In particular, California’s controversial Private Attorneys General Act that we all know as PAGA. PAGA authorizes workers to file lawsuits to recover civil penalties on behalf of themselves, and other employees in the State of California for state labor code violations. Although California is the only state to have enacted this type of law so far, several other states are considering their own similar private attorney general laws, including New York, Washington, Oregon, New Jersey, and Connecticut. So it will be crucial to monitor state legislation on this topic given the impact such laws will have on class litigation strategy.
Jen: Absolutely – and we will continue to monitor all those developments and getting them out to listeners of the podcast as well as readers of the blog as they occur. Brandon, were there any key rulings from your perspective in specific state courts in 2022, going into 2023?
Brandon: Well, California being the epicenter of class actions filed in state courts – it’s a state that has more class action litigation than any other state. So needless to say we got some important rulings out of California. While all varieties of class-wide cases are filed in California, a high majority are consumer fraud and employment-related. Even when an employer’s written, formal policies appear facially neutral and compliant, employees may successfully seek class certification for demonstrating common issues where an employer’s practices and protocols allegedly violate law. So you asked about some key cases – one, in Cruz, et al. v. Health, the plaintiff filed a class action against his former employer for wage and hour violations stemming from defendant allegedly utilizing a time rounding policy that systemically resulted in uncompensated hours worked, as well as for failing to provide the plaintiff and other hourly employees with full, uninterrupted meal periods in compliance with the California Labor Code. So in this case, the plaintiff also brought derivative claims for inaccurate wage statements, failing to pay all wages due, and violations of California Business & Professions Code, as well as penalties under the PAGA. The court granted the plaintiff’s motion to certify his rounding-time, meal period, and derivative claims. In certifying the class for the “rounding policy” claim, the court reasoned that the plaintiff’s theory of liability – that the defendant’s policy of rounding employees’ time punches to the nearest quarter-hour increment resulted in employees’ systematic under compensation – presented common questions of law and fact that predominated over the individualized issues that might arise, including the calculation of damages to which each putative class member might be entitled. So, with respect to the meal period claims, the court agreed that while the defendant’s formal, written meal break policy may comport with California law, this fact alone did not preclude class certification. The plaintiff presented evidence of numerous meal break violations, including missed, short, and late employee breaks, which the court found sufficient to establish a rebuttable presumption that defendant had a “de facto policy” that failed to provide putative class members with compliant meal periods, and constituted a predominant question appropriately resolved on a class-wide basis. Having determined the rounding time and meal period claims appropriate for class certification, the court also certified the plaintiff’s derivative claims, concluding that they too involved common questions of law or fact also suitable for certification.
Jen: Thanks Brandon. Another key example of a PAGA ruling from last year occurred in a case called Estrada, et al. v. Royalty Carpet Mills, Inc. In that case were a group of hourly workers at the defendants’ carpet manufacturing facilities, brought claims primarily based on purported meal and rest break violations. Following a bench trial and an appeal, the California court of appeal addressed several issues, including: (i) the defendants’ policy of requiring workers to stay on premises during paid meal breaks; and (ii) the trial court striking of the PAGA claims based on manageability concerns. Regarding the meal break question, the defendant in that case had a policy of paying workers their regular wages during meal periods, but did not give them premium pay for having to remain on the premises. The defendants argued the on-premises meal policy was lawful because the employees were relieved of duty and paid wages during the meal period. The court of appeal ultimately disagreed with that argument – it opined that employers must afford employees uninterrupted half-hour periods in which they are relieved of any duty or employer control and are free to come and go as they please, and if an employer does not provide an employee with a compliant meal period, then the employer had to provide the employee with premium pay for the violation. Turning to the trial court’s dismissal of the representative PAGA meal period claim due to unmanageability, which is probably an even more crucial part of the decision, the court of appeal addressed the question of whether the PAGA has a manageability requirement similar to class actions. The court of appeal stated that a representative action under the PAGA is not a class action, but rather an administrative law enforcement action where the legislative purpose is to augment the limited enforcement capacity or capability of the Labor Workforce Development Agency (“LWDA”) by empowering employees to enforce the Labor Code as representatives of the Agency. The court reasoned that allowing courts to dismiss PAGA claims based on manageability concerns would actually interfere with the PAGA’s express design as a law enforcement mechanism, and create this extra hurdle that does not apply, and should not apply, to LWDA enforcement actions.
Brandon: Jen that was fantastic and insightful analysis. Florida was a state where the courts were disinclined to allow plaintiffs to proceed on a class-wide basis on claims related to the COVID-19 pandemic. There have a been a lot of class actions on the court docket that are related the pandemic. In University Of Florida Board Of Trustees v. Rojas the plaintiff, a graduate student, filed a class action asserting claims for breach of contract and unjust enrichment related to paid fees not refunded following the campus shut-down due to COVID-19. To support the breach of contract claim, the plaintiff filed a copy of the University’s financial liability agreement; an estimate of tuition and fees for the 2019-2020 academic year; and the plaintiff’s tuition statement showing he paid his tuition and fees for the Spring 2020 semester. The complaint also cited to various university webpages that contained general statements or descriptions of various campus amenities. The plaintiff, on behalf of a class of other students, asserted that these documents, in the aggregate, made up an express written contract between him and the university for specific on-campus resources and services during the relevant time period. However, the trial court dismissed the unjust enrichment claim, but allowed the contract claim to move forward. The Florida court of appeal then disagreed. It ruled that the “hodge-podge” of documents did not constitute an express written contract sufficient to overcome sovereign immunity enjoyed by the university. The court of appeal further found that the liability agreement merely conditioned a student’s right to enroll upon the agreement to pay tuition and fees, and although the agreement mentioned the provision of “educational services,” that general phrase fell far short of conveying an express promise by the university to provide in-person or on-campus services to a student at any specific time. For these reasons, the court of appeal reversed and remanded to the trial court for entry of judgment in favor of the university on the basis that sovereign immunity barred the action.
Jen: The last one I wanted to mention, because it really was a novel situation, was a ruling from Massachusetts that addressed the issue when the named plaintiff dies before class certification. The case is Kingara, et al. v. Secure Home Health Care Inc. In that case the plaintiff, a licensed practical nurse, filed suit against the defendant, an in-home care provider for the elderly, alleging causes of action arising under the state wage act, minimum fair wage law, and overtime law. The plaintiff died before the plaintiff’s counsel had filed a motion for class certification. Thereafter, the plaintiff’s counsel filed a motion to send notice to the putative class informing them of the plaintiff’s death and inviting them to join the action. The plaintiff’s counsel also sought an order requiring the defendant to identify the putative class members’ names and addresses and extend the tracking order deadlines to allow substitution of another putative class representative. The trial court granted the motions, and the defendant appealed. The Massachusetts Supreme Judicial Court explained that, upon a client’s death, the lawyer’s authority to act for the client terminates. So because the plaintiff had not filed a motion for class certification before he died, the plaintiff’s counsel could not take further action absent a motion by the deceased plaintiff’s legal representative. In addition, although counsel for a certified class has a continuing obligation to each class member – again here, there was not a certified class – the appeals court concluded that counsel does not have any authority to act for a putative class when no motion for class certification was pending, counsel had not located the deceased client’s representative, and counsel had not identified any other putative class member to serve as a putative class representative.
Brandon: Very interesting ruling Jen. It’s not often your plaintiff in the class action is going to pass away during the litigation, but definitely a good one for corporate counsel to note in the event that situation happens to them in the future.
Jen: Thanks so much, Brandon. Great insights and analysis Brandon. I know that these are only some of the cases that had generated some really interesting rulings in the myriad types of class action litigation pending across the country. 2023 is sure to give us some exciting rulings as well that we will look forward to blogging about and presenting on in future installations of the Class Action Weekly Wire. Thanks everyone for joining us today – great to have you here.