18th Annual Workplace Class Action Report - 2022 Edition

Annual Workplace Class Action Litigation Report: 2022 Edition 373 In Re Morrow-Meadows Wage & Hour Cases, 2021 Cal. App. Unpub. LEXIS 97 (Cal. App. 2d Dist. Jan. 6, 2021). Plaintiffs filed two separate class actions alleging wage & hour violations against Defendant, which were later consolidated. The first was a class action brought by Marie Pacheco and Rafael Robinson (“Appellants”) that alleged violations of various California Labor Code and Business and Professions Code provisions. The second class action was brought by Araceli Noriega, and the action did not seek class-wide relief, but did seek Private Attorney General Act (“PAGA”) relief. Following consolidation, Noriega amended her complaint to add the claims set forth in the Pacheco complaint. Noriega thereafter entered into settlement agreement with Defendant that released all claims against the company. The trial court certified the class action, approved the settlement, and entered judgment. Appellants contended the trial court erred when it deemed Noriega an adequate class representative. The trial court preliminarily approved the settlement, and preliminarily certified the matter as a class action with two subclasses, including a PAGA subclass and a non-PAGA subclass. At the final approval hearing, Appellants complained that the settlement grossly undervalued the class claims and was reached without adequate discovery, without pursuing claims on behalf of 95% of the class members, and without providing the trial court with accurate information about the nature and magnitude of the claims. Id . at *6. The trial court had granted final approval of the settlement, finding the settlement fair and reasonable, the product of good faith negotiations after adequate discovery. Appellants argued that the trial court erred when it certified the class action and approved the settlement because it did so without setting forth its reasons for concluding that Noriega was an adequate class representative. The California Court of Appeal agreed with Appellants. The Court of Appeal opined that neither Defendant nor Noriega had pointed to anything in the record expounding on how or why Noriega met the adequacy requirement. The Court of Appeal concluded that the trial court abused its discretion in certifying the coordinates cases as a class action and in granting final settlement approval. For these reasons, the Court of Appeal vacated and reversed the trial court’s ruling. In Re Neuron Holdings Wage &Hour Cases, Case No. CJC-19-5044 (Cal. Super. Ct. Feb. 18, 2021). Plaintiffs, groups of drivers in four consolidated state court class actions, alleged that Defendant misclassified drivers as independent contractors. Plaintiffs brought representative claims under the California Private Attorney General Act (“PAGA”). The parties ultimately settled the matter, and the Court rejected preliminary settlement approval. The Court found that the settlement should be denied because: (i) it had concerns regarding the circumstances around the settlement negotiations; (ii) there was inadequate discovery and investigation prior to the settlement; (iii) there were inaccurate and incomplete maximum damages calculations; (iv) there was unjustified zero valuation of the claims; and (v) there was an unsupported 98.7% to 99.34% reduction in the total maximum theoretical recovery. Id . at 2. The Court also determined that Plaintiffs failed to address the strengths of their PAGA claim and the likelihood that Plaintiffs would succeed on the merits and the assignment of negligible value of the damages. The Court thereby denied the motion for preliminary settlement approval. In Re Southern California Pizza Wage & Hour Cases, 2021 Cal. Super. LEXIS 5209 (Cal. Super. Ct. June 28, 2021). Plaintiffs, a group of pizza delivery drivers in several consolidated actions, alleged that Defendant violated various provisions of the California Labor Law. Defendant filed a motion for judgment on the pleadings and for judicial notice of the California Supreme Court’s docket in Noranjo v. Spectrum Security Services , Case No. S258966. Defendant contended that due to the four-year statute of limitations, the relevant filing date for any underlying action was May 7, 2014 and therefore the rest break class can only go back to May 7, 2010, not September 30, 2007, the date through which the class was certified based on the filing of the underlying Ramirez action ( Ramirez v. Southern California Pizza Company, LLC , LASC No. BC470642). Plaintiffs argued that the claims of the class either related back to the original pleading in Ramirez or were tolled. The Superior Court found that Ramirez could not move for certification because his rest break claim was summarily adjudicated against him on an individual basis. The Superior Court noted that based on Plaintiff’s position, class claims could be brought indefinitely and without regard to statutes of limitations, so long as the certification of a class remained undetermined. The Superior Court rejected this position. It held that this was not the result that tolling was meant to create, and therefore the class-wide rest break claims were dismissed insofar as they were based on rest break violations prior to May 7, 2010. Since the waiting time claim was entirely derivative of the rest break claim, the Superior Court ruled that the rest break violations did not give rise to a derivative waiting time based on unpaid rest break violation premiums. Finally, the Superior Court determined that the judgement was not premature in light of the pending Naranjo action because there was no indication that it would be argued anytime soon. The Superior Court therefore granted Defendant’s motion.