Class And Tort Actions

Federal Class Action Appeals – What’s the Deadline to Petition to Appeal When a Motion for Reconsideration Is Filed?

Josephine Mason
December 28, 2018

If you’re litigating a putative class action in federal court and get a class certification order that is adverse to your client (whether plaintiff or defense), you may petition to take an immediate appeal of that order.  Fed. R. Civ. P. 23(f). The petition to appeal must be filed quickly—within 14 days.  Id.  The short turnaround time “is designed to reduce the risk that attempted appeals will disrupt continuing proceedings.” Fed. R. Civ. P. 23(f), Adv. Comm. Note (1998).

But what happens if you also file a motion for reconsideration of the certification order? See Fed. R. Civ. P. 54(b). Rule 54(b) does not impose a deadline to file a motion for reconsideration; unless otherwise provided by local rule, a motion for reconsideration may be filed “at any time before the entry of a judgment.” Id.see, e.g., N.D. Cal. Civ. L.R. 7–9; Monterey Bay Military Hous., LLC v. Pinnacle Monterey LLC, No. 14-CV-03953-BLF, 2015 WL 1548833, at *5 n.9 (N.D. Cal. Apr. 7, 2015) (Civil Local Rule 7–9 “imposes no time limits on filing”).

That presents a question: Does the motion for reconsideration toll the time to file your petition to appeal under Rule 23(f)?

The dreaded answer:  It depends.

All of the circuits have answered this question in the affirmative—but only if the motion for reconsideration is filed within the 14-day period imposed by Rule 23(f). Lambert v. Nutraceutical Corp., 870 F.3d 1170, 1177 & n.3 (9th Cir. 2017), cert. granted, 138 S. Ct. 2675 (2018) (collecting cases). This limitation is consistent with the general rule that “a motion for reconsideration tolls the time for appeal, provided that the motion is made within the time for appeal.” Id. at 177-78 (citation omitted). Thus, the time to file a Rule 23(f) petition will be extended to 14 days from when the district court issues its order on your timely motion for reconsideration.

Watch out, though. The Supreme Court granted review in Lambert and just heard argument on November 27, 2018. The Question Presented is conceptually distinct: Whether equitable tolling applies to Rule 23(f)’s 14-day deadline. However, the opinion below addressed both equitable tolling and, as noted, whether a motion for reconsideration tolls the time to file a Rule 23(f) petition. Lambert, 870 F.3d at 1177 & n.3. And some of the Justices’ questions during argument appeared directed at the latter issue. See Transcript of Oral Argument at 4:2-6 (“JUSTICE GINSBURG: Counsel, I thought that both sides agreed that if the motion for reconsideration is filed within 14 days, within that period, then there is tolling until the motion is decided. Is that so?”). However the Court rules on the equitable tolling issue, it very well may also comment on whether a motion for reconsideration tolls the time to file a Rule 23(f) petition.

For now, it is still probably a safe bet that a timely motion for reconsideration—i.e., one filed within Rule 23(f)’s 14-day limit—will still toll the time to file a Rule 23(f) petition. A definitive answer may be forthcoming from the Supreme Court in Lambert. But whatever you do, don’t wait more than 14 days!

Revisiting Alvarado: “Work Week v. Pay Period” Question Remains

Diane Marie O'Malley and Dorothy Liu
June 6, 2018

“The California Supreme Court Modifies Its Opinion in Alvarado v. Dart  Container Corporation, 4 Cal.5th 542 (2018) only to leave open the ‘workweek v. pay period’ regular rate calculation question.”

Things couldn’t get much worse for employers in the area of calculating the regular rate of pay – a complicated operation even on a good day. The California Supreme Court just made the calculation murkier when it modified its March 5, 2018 Alvarado v. Dart  Container Corporation opinion.

We recently reported that, on March 5, 2018, the California Supreme Court issued its long awaited overtime calculation decision in Alvarado v. Dart  Container Corporation.  The specific question before the Court was “how an employee’s overtime pay rate should be calculated when the employee has earned a flat sum bonus during a single pay period.”

To recap briefly, in Alvarado, a group of employees who received a flat sum bonus for working on a weekend filed a class action arguing that the employer must allocate the bonus only to non-overtime, regular hours worked during the pay period when determining the regular rate of pay for any overtime calculations. Plaintiff Alvarado relied upon a Division of Labor Standards Enforcement (DLSE) Manual policy, which directly addressed the issue. Following federal law, Dart Container had allocated the bonus to all hours worked, thus including overtime hours.

The California Supreme Court agreed with Plaintiff Alvarado finding that, when allocating a flat sum bonus, an employer must allocate that bonus only to non-overtime, regular hours worked in a pay period.

Questions cropped up immediately as the Court specifically discussed calculating the per-hour value within a  pay period.  As employers know, overtime is calculated on a workweek basis, not a pay period basis.  However, a bonus earned over a time period longer than a workweek is apportioned over that time period. DLSE Manual Section On March 22, 2018, the California Employment Law Council filed an Amicus Letter Requesting Clarification and/or Modification of the Court’s Order. In its Amicus Letter, the Council sought clarification regarding what seemed to be the Court’s suggestion that “employers should calculate the regular rate of pay for overtime compensation for each pay period, rather than each individual work week within the pay period.” (Amicus Letter, p. 1) The Council sought modification of the Court’s decision by changing the term “pay period” to “workweek or other period over which the bonus is earned.” (Amicus Letter, p. 3)

On April 25, 2018, the Court issued a modified opinion, which denied the Council’s Request and stated:

On page 551 of the published opinion, a footnote is inserted at the end of the sentence that reads: “Plaintiff’s formula turns out to be marginally more favorable to employees; the key distinction between the two formulas is whether the bonus is allocated to all hours worked, or only to the nonovertime hours worked.” The new footnote, which is numbered as footnote 2, reads: “Defendant’s formula and plaintiff’s formula have one thing in common: both use  the pay period as the basis for calculating an employee’s regular rate of pay. In  other words, neither party suggests that regular rate of pay should be calculated on  a workweek basis, which might result in an employee having two or more regular  rates of pay in a single pay period. This opinion follows the lead of the parties in  using the pay period as the basis for calculating regular rate of pay, but we did no grant review to decide whether, under California law, regular rate of pay is properly calculated on a pay-period basis or a workweek basis, and nothing in this opinion should be interpreted as deciding that question.” (emphasis added) Alvarado v. Dart  Container Corporation, Case No. S232607 (Cal. Sup. Ct, April 25, 2018)

Unfortunately, the Court  leaves the “workweek v. pay period” question  for another day.  Thus, employers are well advised to seek their labor counsel’s advice regarding that question when employers are re-working their payroll systems to comply with Alvarado’s mandate that they use only non-overtime hours as the divisor for purposes of calculating the per-hour value of the bonus.

Recent Decisions on Statutory Immunities Under the California Tort Claims Act

Kaylen Kadotani
May 14, 2018

The California Tort Claims Act (“Act”), California Government Code §§ 810, et seq., sets forth the basic principles of public entity tort liability.  Common tort claims against public entities relate to alleged injuries that occur on public property, such as a trip-and-fall on a public sidewalk alleged to be in a dangerous condition. Under the Act, statutory immunities are available to immunize public entities from so-called “dangerous condition liability.”

The California Court of Appeal recently issued two decisions upholding the application of two such immunities – trail and design immunity – in the context of a dangerous condition action:  Arvizu v. City of Pasadena (2018) 21 Cal.App.5th 760 and Rodriguez v. Dept. of Transportation (2018) 21 Cal.App.5th 947.

Continue reading Recent Decisions on Statutory Immunities Under the California Tort Claims Act

Ninth Circuit Underscores The Importance Of Carefully Crafting Class Action Settlements

Matthew Peck
March 6, 2018

In Brown v. Cinemark USA, Inc., 876 F.3d 1199 (9th Cir. 2017), the Ninth Circuit considered an issue of first impression: whether it had jurisdiction to consider an appeal of an order denying class certification where the individual plaintiffs seeking to represent the class settled their individual claims.

In Brown, Plaintiffs Silken Brown and Mario De La Rosa filed a class action complaint against Defendants Cinemark USA, Inc. and Century Theater, Inc. alleging various wage and hour claims.  The Defendants removed the case to federal court, where it was then consolidated with similar pending actions.

The district court dismissed the Plaintiffs’ direct wage statement claim and denied certification of Plaintiffs’ meal and rest break, reporting pay, off the clock work, derivative wage statement, and direct wage statement claims. Defendants then moved for summary judgment on the remaining individual claims, and the district court issued a tentative ruling granting in part and denying in part the motion.  Thereafter, the parties stipulated to the tentative ruling and settled the Plaintiffs’ remaining individual claims.  Importantly, the settlement agreement reserved the Plaintiffs’ rights to challenge the district court’s ruling denying certification of the Plaintiffs’ direct wage claim and dismissing Brown’s direct wage statement claim.

Plaintiffs appealed the issues reserved by the parties’ settlement agreement to the Ninth Circuit. On appeal, Defendants argued that the Ninth Circuit lacked jurisdiction under 28 U.S.C. § 1291 to consider an appeal of the district court’s interlocutory judgment in light of the Supreme Court’s decision in Microsoft Corp. v. Baker, 582 U.S. ____, 137 S.Ct. 1702, 198 L.Ed.2d 132 (2017).¹ The Ninth Circuit distinguished Baker, first noting that appeal pursuant to terms of the parties’ settlement agreement did not raise the same concerns as the voluntary dismissal in Baker because, unlike the Baker plaintiffs, the Brown Plaintiffs continued litigating their remaining individual claims following denial of certification.  Moreover, in stark contrast to Baker, no facts before the Circuit suggested that the Brown Plaintiffs engaged in “sham tactics” to achieve an appealable final judgment because the appeal resulted—not from a unilateral dismissal of claims—but pursuant to the terms of a bargained-for settlement  between the parties, which expressly preserved certain claims for appeal.  That is, Plaintiffs did not “openly intend[] to sidestep Rule 23(f) when they voluntarily dismissed their  claims.”

As a result, the Ninth Circuit concluded that it had jurisdiction under 28 U.S.C. § 1291 to consider the class certification ruling in Brown on the merits.  By contrast, in Bobbit v. Milberg, ____ Fed.Appx. ____, 2018 WL 654157, at *1 (9th Cir., Feb. 1, 2018), the Circuit ruled, on remand from the Supreme Court, that Baker compelled it to dismiss for want of jurisdiction an appeal of a ruling denying class certification where the individual plaintiffs had stipulated to voluntary dismissal of their personal claims and allowed another party to intervene for the purpose of pursuing the appeal. In contrast to Brown, the plaintiffs did not agree to preserve any claims for appeal.

The clear lesson is that settlements of individual claims in the class action context must be carefully drafted to avoid the creation of avenues to appellate relief that might otherwise be unavailable.


¹ In Baker, the district court denied class certification, and the appellate court declined discretionary interlocutory review of that denial.  The plaintiffs then voluntarily dismissed their own claims to create an appealable final judgment.  The Supreme Court ruled that the voluntary dismissal did not qualify as a “final decision” and noted that approval of such tactics would undermine 28 U.S.C. § 1291’s firm finality principal which is “designed to guard against piecemeal appeals, and subvert the balanced solution Rule 23(f) put in place for immediate review of class-action orders.”

Court Grants Reprieve from Warning Obligations Related to Glyphosate for California Proposition 65 on Basis of Inadequate Scientific Evidence

Merton Howard and Shannon Nessier
March 2, 2018

In a significant decision out of the Eastern District of California, Judge William Shubb issued a preliminary injunction staying warning obligations related to the addition of glyphosate to a list of chemicals in California under its so-called “right to know” statute, Proposition 65, the Safe Drinking Water and Toxic Enforcement Act of 1986, Cal. Health & Safety Code §§ 25249.5-25249.14 (“Proposition 65”). In issuing the injunction, the Court found that there is not sufficient evidence to support the determination that glyphosate is known to the State of California to cause cancer, and therefore the warning requirements set to take effect this July as a result of its listing are constitutionally invalid compelled speech.

The stay of the warning obligations is an important victory for a number of key food and agribusiness companies, but likely not the end of this battle.


California’s Proposition 65 prohibits any person in the course of doing business from knowingly and intentionally exposing anyone to certain listed chemicals without providing a “clear and reasonable” warning. Failure to comply can result in penalties up to $2,500 per day for each failure, and subject the manufacturer/seller to costly enforcement actions by designated government/agency attorneys, as well as private citizens who may recover attorney’s fees. Cal. Health & Safety Code § 25249.7(b).

A chemical may be added to the Proposition 65 list after any one of certain entities, including the Environmental Protection Agency (“EPA”), the Food and Drug Administration (“FDA”), and the International Agency for Research on Cancer (“IARC”), provide confirmation of its status as a carcinogen or reproductive toxicant. In 2015, IARC classified glyphosate as “probably carcinogenic” to humans based on evidence that it caused cancer in experimental animals and limited evidence that it could cause cancer in humans, despite the fact that several other organizations, including the EPA and agencies within the World Health Organization, concluded that there is no evidence that glyphosate causes cancer.

As a result of IARC’s classification of glyphosate as probably carcinogenic, OEHHA listed glyphosate as a chemical known to the state of California to cause cancer on July 7, 2017, and thus the attendant warning requirement would take effect on July 7, 2018.

Current Action

In response to the listing and impending warning obligations, a collaboration of agribusiness companies and retailers, spearheaded by Monsanto, as well as chambers of commerce from a number of states, filed this motion for an injunction staying the listing of glyphosate and/or the enforcement of the attendant warning obligations. They claimed the listing and the warning obligation, when based on insufficient evidence, were violations of their First Amendment right against compelled speech. On Monday, the District Court issued its order agreeing that the compelled warning is a violation of the First Amendment given the lack of evidence of glyphosate’s link to cancer in humans.

In issuing the injunction staying enforcement of the warning obligations, the Court found the matter ripe, that the moving parties were likely to prevail on the merits (at least as to the warning obligation), and that if not stayed, the warning obligation would cause them irreparable harm.

The Court rejected defendants’ claims that the challenge was unripe because plaintiffs may not have to provide any warning if their products’ glyphosate levels are below the anticipated “safe harbor” level. Instead, it found that regardless of the State’s possible enactment of a safe harbor level, there is undeniable evidence from prior listings that plaintiffs face the significant risk of injury from still being subject to enforcement actions notwithstanding a defense of compliance with the safe harbor level. The court further noted that even forcing plaintiffs to pay to test their products, given the insufficient evidence on glyphosate’s carcinogenic impacts, is a cognizable harm.

The Court rejected the argument by plaintiffs that the mere listing of glyphosate is a violation of the First Amendment, instead focusing on the warning obligations set to take effect in July.

The Court explained that in cases of compelled speech, the State has the burden of demonstrating that a disclosure requirement is purely factual and uncontroversial, not unduly burdensome, and reasonably related to a substantial government interest. Here, the Court found that the required warning would be misleading to the ordinary consumer.

Despite hollow attempts by defendants to suggest that plaintiffs could use a less misleading warning to reflect the uncertain nature of the link between glyphosate and cancer, the Court got to the heart of the matter in speaking to the incredible burden of the Proposition 65 warning provisions: “Under the applicable regulations, in order for a warning to be per se clear and reasonable, the warning must state that the chemical is known to cause cancer. California regulations also discourage, if not outright prohibit, language that calls into doubt California’s knowledge that a chemical causes cancer.” Given these guidelines, the Court rightly understood no lesser warning would avoid the risk to plaintiffs of unmerited lawsuits and thus irreparable harm.

In speaking to these issues with the evidence related to the status of glyphosate as a carcinogen, the Court went on to say that “the required warning for glyphosate does not appear to be factually accurate and uncontroversial because it conveys the message that glyphosate’s carcinogenicity is an undisputed fact, when almost all other regulators have concluded that there is insufficient evidence that glyphosate causes cancer.”

Finally, the Court also addressed the public interest in enforcing the warning requirement, again finding for the plaintiffs. Judge Shubb found that misleading or false labels undermine California’s interest in accurately informing its citizens of health risks at the expense of plaintiffs’ First Amendment rights.

Because only the warning enforcement was stayed and not the listing itself, this fight is far from over. We can expect significant efforts from both sides as this issue moves forward, and the fate of glyphosate under California’s Proposition 65 remains unclear.

Class Certification Bid ‘Deflated’ by Court of Appeal for Lack of Ascertainability

Kaylen Kadotani
March 1, 2018

In a recent decision, the California Court of Appeal reinforced the ascertainability requirement for class certification under state law. In Noel v. Thrifty Payless, Inc. (2017) 17 Cal.App.5th 1315, the First District of the California Court of Appeal affirmed an order by the Marin County Superior Court which denied Plaintiff’s Motion for Class Certification on grounds that Plaintiff failed to demonstrate that the proposed class was ascertainable.  Just this week, the California Supreme Court granted review of this decision.

In this consumer class action, Plaintiff alleged that Defendant Thrifty Payless, Inc. dba “Rite Aid” (“Rite Aid”) violated the Unfair Competition Law (“UCL”), the False Advertising Law (“FAL”) and the Consumer Legal Remedies Act (“CLRA”)1 by selling an inflatable swimming pool that turned out to be smaller than the pool pictured on the product’s box. Plaintiff’s proposed class included: “All persons who purchased the Ready Set Pool at a Rite Aid store located in California within the four years preceding the date of the filing of this action [i.e., November 18, 2013].” (Id. at 1326.) Before filing his Motion for Class Certification, Plaintiff learned, through written discovery, that Rite Aid had sold more than 20,000 inflatable swimming pools, for a potential class of 20,000 individuals. Notably, however, Plaintiff did not seek any discovery as to the location and nature of any records maintained by Rite Aid relating to the identity of the purchasers, or how their identities might otherwise be ascertained. This critical omission proved fatal to Plaintiff’s attempt to certify a class.

As is well-established under California Code of Civil Procedure section 382, a motion for class certification may be granted where there is “an ascertainable class and a well-defined community of interest among class members.” (Id. at 1324) (citing Sav-On Drug Stores, Inc. v. Superior Court (2004) 34 Cal.4th 319, 326.)   The ascertainability requirement depends on: (1) class definition, (2) class size, and (3) means of identifying class members. (Id.) (citing Sotelo v. Medianews Group, Inc. (2012) 207 Cal.App.4th 639, 648.) The party seeking class certification carries the burden to establish the existence of ascertainability. (Id. at 1325) (citing Sav-On, 34 Cal.4th at 326.) The trial court found that Plaintiff failed to carry this burden since he “presented ‘no evidence’ to establish ‘what method or methods will be utilized to identify the class members, what records are available (either from Defendant, the manufacturer, or other entities such as banks or credit institutions), how those records would be obtained, what those records will show, and how burdensome their production would be. . . .'” (Id. at 1323.)

On appeal, Plaintiff argued that the trial court used the wrong legal standard for ascertainability, and that it should have followed the rule announced in Estrada v. FedEx Ground Package Systems, Inc. (2007) 154 Cal.App.4th 1, 14, which provides that a class is ascertainable “if it identifies a group of unnamed plaintiffs by describing a set of common characteristics sufficient to allow a member of that group to identify himself as having a right to recover based on the description.” (Id. at 1326) (Italics removed.) Thus, Plaintiff argued, based on his proposed class definition, he had identified an ascertainable class. The Court of Appeal disagreed, noting that “[t]he theoretical ability to self-identify as a member of the class is useless if one never receives notice of the action.” (Id. at 1327) (citing Sotelo, 207 Cal.App.4th at 649.) “The ascertainability requirement is a due process safeguard, ensuring that notice can be provided ‘to putative class members as to whom the judgment in the action will be res judicata.’ . . . ‘Class members are ‘ascertainable’ where they may be readily identified without unreasonable expense or time by reference to official records.'” (Id.) (citing Sotelo, 207 Cal.App.4th at 647-648.)

The Court of Appeal agreed with the trial judge, and reasoned that other than pointing to the number of inflatable pools sold, the number of returns, and the gross revenue earned by Rite Aid, Plaintiff failed to submit any evidence which offered “insight into who purchased the pool or how one might find that out. . . . Unless [Plaintiff] could propose some realistic way of associating names and contact information with the 20,000-plus transactions identified by interrogatory response, there remained a serious due process question in certifying a class action.” (Id. at 1328.)

In its decision, the Court acknowledged an apparent conflict with another recent case, Aguirre v. Amscan Holdings, Inc. (2015) 234 Cal.App.4th 1290, in which the appellate court held that the means of identification requirement under Sotelo did not require a plaintiff to prove there is a way to give absent class members personal notice, and that the court need only consider the available means to identify class members “at the remedial stage.” (Id. at 1330) (citing Aguirre, 234 Cal.App.4th at 1300.) Disagreeing with the Aguirre approach, the Noel court pointed out that longstanding principles of due process and public policy support the requirement that a plaintiff make some showing of a means of identifying the class and a description of how notice may be given. (Id. at 1332.) The Court further noted that class action litigants should be able to address this inquiry quite easily in the early stages of the action, i.e., through the discovery that Plaintiff here neglected to pursue. (Id. at 1333.)

In summary, the Noel case, at least for now, reinforces the requirement that class action plaintiffs present an ascertainable class at the class certification stage by establishing a means of identifying the class members and providing notice.  As noted above, the California Supreme Court has just recently granted review of this decision, though we are not yet aware of the issues to be addressed on appeal. We will be following this decision closely, so make sure to check back for updates.


1 The Court’s discussion and ruling as to Plaintiff’s CLRA claim is not included in this blog entry. For reference, the Court also denied class certification as to CLRA, but for different reasons than the claims under the UCL and FAL.

Los Angeles Judge Elects Generalized “Common Issue” to Justify Class Certification

Shannon Nessier
July 18, 2017

Walt Disney (“Disney”) suffered a loss last week in an adverse employment action based on its use of information in consumer reports as part of its employment screening process.  The plaintiffs have alleged that they were injured when inaccurate credit reporting information, which they had no opportunity to challenge or correct, became a factor in Disney’s denial of employment.  On July 13, 2017, the Court entered an order granting class certification over objections by Disney to, among other issues, the existence of predominant common questions of fact.  In reaching its decision, the Court elected to define the commons issues as framed by the more generalized issues advanced by plaintiffs than the specific factual issues Disney identified would be necessary to assess the class members and their alleged damages.

Continue reading Los Angeles Judge Elects Generalized “Common Issue” to Justify Class Certification

Court: Arbitration Agreements That Waive Injunctive Relief Under CA Consumer Statutes Are Unenforceable

Neil Bardack
April 25, 2017

In McGill v. Citibank, N.A., No., S224086  (Cal. Apr. 6, 1017), the California Supreme Court recently held that pre-dispute arbitration agreements that purport to waive the remedy of injunctive relief under California consumer statutes that have the primary purpose and effect of prohibiting unlawful acts that threaten future injury to the public in any forum, are contrary to California public policy and are thus unenforceable under California law.  The court further held that the Federal Arbitration Act (FAA) does not preempt California law nor require enforcement of such contractual waiver provision.

The dispute in McGill arose out of an account agreement for a “credit protector” plan to a Citibank credit card that contained a broadly worded agreement to arbitrate that sought to require arbitration of all claims related to the account no matter the theory or relief sought.  Specifically, claims brought as a class action, private attorney general, or other representative action, could only be brought on an individual basis and relief awarded only to the individual and not to anyone not a party to the agreement.  The provision also stated that such claims would be governed by the FAA.

McGill brought claims under the California consumer remedy statues (Unfair Competition Law, California Legal Remedies Act and False Advertising Law) seeking damages and injunctive relief prohibiting Citibank from continuing to engage in allegedly illegal and deceptive practices.  The trial court severed and kept the injunctive relief cause of action but ordered arbitration of all other claims; the Court of Appeal reversed and remanded concluding that AT &T Mobility v. Concepcion preempted application of the Broughton-Cruz rule, which established that agreements to arbitrate claims for public injunctive relief under these or any other statutes, was unenforceable.

McGill petitioned the California Supreme Court claiming that there was no preemption of the Broughton-Cruz rule and that any arbitration agreement requiring submission of claims for public injunctive relief was unenforceable. McGill also raised an argument that had been ignored by the Court of Appeal but which had traction in the Supreme Court, which is that the clause was unenforceable as it sought to waive McGill’s right to seek public injunctive relief in any forum based upon language in the clause that claims under the consumer statutes could not be pursued “in any litigation in any court.” At the hearing, Citibank agreed with McGill that this clause would prevent McGill from seeking public injunctive relief in any forum 

 In a nutshell, the Court held that it need not decide whether FAA preemption applied because Citibank agreed that public injunctive relief was excluded from the obligation to arbitrate, and the Broughton-Cruz rule “which applies only when the parties have agreed to arbitrate requests for such relief” was not at issue; thus, the continued validity of that rule after Concepcion need not be decided.  The only question before the court was “whether the arbitration provision is valid and enforceable insofar as it purports to waive McGill’s right to seek public injunctive relief in any forum.

By focusing only on the specific language of an arbitration clause that prevented the plaintiff from seeking public injunctive relief in either arbitration or court, the California Supreme Court attempted to thread the needle to avoid taking on the obvious question of FAA preemption under Concepcion and later decisions that have upheld precluding class procedures in consumer arbitrations.  The narrowness of this decision leaves open the question in California courts of the continued validity of the Broughton-Cruz rule and its prohibition against  waiving claims for public injunctive relief by agreeing to individual arbitration

Ninth Circuit Deepens Circuit Split and Rejects Ascertainability Requirement for Class Certification

Geoff Pittman
January 17, 2017

In a detailed opinion published last week in Briseno v. Conagra Foods, Inc., No. 15-cv-55727 (9th Cir. Jan. 3, 2017), the Ninth Circuit held that Federal Rule of Civil Procedure 23 neither provides nor implies that demonstrating an “administratively feasible” way to identify class members is a prerequisite to class certification.

The Court employed traditional canons of statutory construction to reason that the plain language of Rule 23(a) and Rule 23(b)(3), as well as the U.S. Supreme Court precedent of Amchem Products, Inc. v. Windsor, 521 U.S. 591 (1997) dictate that no separate “administrative feasibility” or “ascertainability” requirement need be satisfied in order to obtain class certification. As summarized by the Court, “the language of Rule 23 does not impose a freestanding administrative feasibility prerequisite to class certification. Mindful of the Supreme Court’s guidance, we decline to interpose an additional hurdle into the certification process delineated in the enacted rule.”

In its opinion, the Court also expressly rejected the justifications provided by the Third Circuit – (1) mitigating administrative burdens; (2) safeguarding the interests of justice; and (3) protecting the due process rights of defendants – for an independent ascertainability requirement for class certification. In doing so, the Court concluded that “Rule 23’s enumerated criteria already address the interests that motivated the Third Circuit . . .”

Briseno involved a challenge to the “natural” labeling statements on Conagra’s Wesson Oil products based on the claim that the products allegedly contained unnatural genetically modified (GMO) ingredients. Like many defendants in other food labeling class actions, Conagra argued that none of the 11 proposed classes should have been certified, in part because plaintiffs could not demonstrate an administratively feasible method for identifying class members, and the only evidence of class membership would be unreliable affidavits claiming product purchases unsupported by any receipts or other reliable evidence that the products were actually purchased.

Several Circuit Courts of Appeal (the Second, Third, Fourth, and Eleventh Circuits) have held that ascertainability is a prerequisite to class certification, and have denied certification where plaintiffs have failed to demonstrate an administratively feasible and reliable way of identifying class members, most notably in consumer class action cases where absent class members lacked receipts for the products they purchased and where the challenged labeling statements differed on the product packaging.  The leading decision supporting defendants’ ascertainability arguments is the Third Circuit’s decision in Carrera v. Bayer Corp., 727 F.3d 300 (3d Cir. 2013).  With the Briseno decision, the Ninth Circuit rejected Carrera and its progeny, and joined the Sixth, Seventh, and Eighth Circuit Courts of Appeal in holding that there is no separate ascertainability or “administrative feasibility” requirement for class certification.

The Briseno decision thus further deepens the divide between the Circuit Courts of Appeal on this important class certification issue.  We anticipate that the issue will be heard by the Supreme Court in the appropriate case.

Current Issues In Class Actions

Eric Junginger
September 29, 2016

On September 16, 2016, I attended a conference in San Francisco regarding current class action issues.  Below is a summary of some key takeaways from that event.

  • The United States Supreme Court issued three significant class action rulings during its 2015-2016 term: (1) Tyson Foods, Inc. v. Bouaphakeo, 135 S.Ct. 2806 (plaintiffs can rely on representative or statistical evidence for issues common to the class); (2) Spokeo, Inc. v. Robins, 135 S.Ct. 1892 (Article III standing requires a concrete and particularized injury or risk of harm); and (3) Campbell-Ewald Co. v. Gomez, 135 S.Ct. 2311 (unaccepted settlement offer for full amount of lead plaintiff’s claim does not moot a class action).  Collectively, these decisions keep the door wide open to class action litigation nationally.
  • One of the proposed changes to Federal Rules of Civil Procedure (“FRCP”) Rule 23 is that no financial payment can be made to counsel for class members objecting to a proposed settlement unless such payment is disclosed and approved by the court after a noticed hearing. Further, no payment can be made to an objector’s counsel in connection with either withdrawing an objection or dismissing an appeal from a judgment approving the settlement.  Collectively, these changes should reduce the likelihood that attorneys will object to a settlement or appeal a final judgment for the purpose of getting additional compensation from the settling parties in exchange for dropping their objection or appeal.
  • Other proposed changes to FRCP Rule 23 include: (1) the court will give notice of a proposed settlement to all class members only after considering whether there has been adequate representation, arm’s length negotiations, adequate relief offered to all class members (side agreements have to be disclosed to the court), and all class members are equitably treated relative to each other; and (2) notice to class members can be given by email or posting notice on the company’s website instead of just U.S. Mail.
  • Courts are more closely scrutinizing class action settlement agreements because: (1) parties want to expand the class and claims being released beyond the scope of the initial complaint following settlement discussions; (2) defendant’s agreement not to object to plaintiff counsel’s fees can be evidence of collusion; (3) if interests are divergent between FRCP Rule 23(b)(2) and FRCP Rule 23(b)(3) classes, both classes would need to have separate counsel or else there would be inadequate representation; (4) courts are rejecting “kicker” provisions, where any money reverts to defendant if the court does not approve plaintiff counsel’s entire fees or if class members do not cash checks; and (5) courts reject settlements when cy pres provision is not pertinent to the issue raised by the class.  As such, counsel should no longer expect the court to rubber-stamp the parties preliminary settlement agreement.
  • Even though the U.S. Supreme Court’s opinion in Clapper v. Amnesty, 133 S.Ct. 1138 (2013) stands for the proposition that no recovery is allowed for injuries that have not in fact occurred, even if they appear likely or probable, more circuit courts are allowing data breach class actions to proceed if there is an increased risk of fraudulent charges or identity theft. However, there has not yet been a single case where plaintiffs certified a class action in a data breach case, except for settlement purposes.
  • Class members must be definite and ascertainable at class certification stage. There are three ways to achieve ascertainability:  (1) easily identifiable class members; (2) objective criteria to define the class; or (3) class does not include people who did not suffer a common injury.  Cases are currently pending in the 9th Circuit to further clarify this ascertainability analysis.
  • Even though class actions are rarely tried to verdict, at trial, defense counsel should focus on any differences between named plaintiff’s claims and other class members to show lack of commonality and that individual interests predominate. Conversely, plaintiff’s counsel will want to have both named class representatives and absent class members testify to generate more sympathy with the jury.

Follow HB Briefly for further developments in class action law.