Phone: (415) 677-9058 | Email: prk@kitchinlegal.com

Articles Written by Patrick Kitchin

Class Actions, Private Attorneys General Act Claims and the Federal Arbitration Act

Written by Patrick Kitchin

            On June 23rd the California Supreme Court continued its ongoing reassessment of the relationship between the Federal Arbitration Act (FAA) and California’s laws and public policies.  In Iskanian v. CLS Transportation Los Angeles (S204032), the Court held that California may not rely on its public policies as the basis for invalidating an employee’s agreement to resolve his or her claims on an individual basis through binding arbitration.   Even if class action waivers function as exculpatory clauses by making it unlikely that employees with small-value claims will be able to effectively enforce their employment rights, class actions waivers must be given their full force and effect under the FAA.

            Two years after the United States Supreme Court in AT&T Mobility LLC v. Concepcion (2011) 563 U.S. __ [131 S.Ct. 1740] expressly rejected the public policy grounds relied upon by the California Supreme Court in Discover Bank v. Superior Court (2005) 36 Cal.4th 148, to invalidate a class action waiver in the consumer context, the Court in Iskanian now has expressly overruled Gentry v. Superior Court (2007) 42 Cal.4th 443.  Thus, whether a class action waiver is part of a consumer contract (Discover Bank) or part of an employer’s arbitration agreement (Iskanian), public policy arguments and, with limited exceptions, unconscionability arguments, cannot be used to challenge the waiver’s validity under the FAA.

The California Supreme Court also held that the enforcement of class action waivers under the FAA does not violate sections 7 and 8 of the National Labor Relations Act (which give employees the right to “engage in other concerted activities” for their  “mutual aid or protection”).  Given “the FAA’s liberal policy favoring arbitration,” the sections 7 and 8 of NLRA must yield, the Court explained

With respect to representative claims under the California Private Attorney’s General Act (PAGA”), however, the Iskanian Court came to a different conclusion.  Unlike private employment disputes between one employee and one employer involving statutory damages and specific civil penalties, PAGA claims are pursued by individuals serving as a proxy or agent of the state and are used to collect penalties (primarily) on behalf of California, not damages on behalf of individuals.

Finding that PAGA lawsuits are a type of qui tam action, the California Supreme Court held that the FAA does not preempt the PAGA.  Consequently, California may enforce laws that invalidate agreements that purport to result in a waiver of an employee’s right to prosecute claims as a private attorney general under the PAGA.  The right to bring a PAGA action is unwaivable.  How PAGA can be prosecuted, whether in arbitration, in bifurcated proceedings, or otherwise, remains to be answered.

            The dialogue between the United States Supreme Court and the California Supreme Court over issues relating to the FAA, arbitration and class proceedings is fascinating and ongoing.  Will the California courts now see the dramatic increase in PAGA case filings forewarned in 2004 when the PAGA was dubbed by business groups and the defense bar as a bounty hunter’s law?  Will Iskanian survive, or will the United States Supreme Court be called upon to again evaluate the reach of the FAA in California?  The dialogue continues.

California Supreme Court Set To Address Workers’ Meal And Rest Break

Written by

The California Supreme Court is expected to render a decision in the Brinker v. Superior Court case later this year that will answer critical legal questions about the meal and rest break rights of hourly workers in California.  At issue in the case is when and under what circumstances workers are entitled under California law to rest and meal breaks. Though the case was originally filed as a class action, and the appeal involved the trial court’s order granting class certification to a group of 5,500 restaurant workers, the Supreme Court’s decision will necessarily address questions that will have an impact on individual meal and rest break cases as well.  Commentators from across the political spectrum agree Brinker is one of the most important labor cases pending before the California Supreme Court today. The case is important to workers because the Court of Appeal’s decision severely limited the rights of workers to obtain damages for missed meal and rest breaks.  The Court’s conclusions of law were broad-ranging and quite friendly to employers.  It held: (1) while employers cannot impede, discourage or dissuade employees from taking rest periods, they need only provide, not ensure, rest periods are taken; (2) employers need only authorize and permit rest periods every four hours or major fraction thereof and they need not, where impracticable, be in the middle of each work period; (3) employers are not required to provide a meal period for every five consecutive hours worked; (4) while employers cannot impede, discourage or dissuade employees from taking meal periods, they need only provide them and not ensure they are taken; and (5) while employers cannot coerce, require or compel employees to work off the clock, they can only be held liable for employees working off the clock if they knew or should have known they were doing so. We further conclude that because the rest and meal breaks need only be “made available” and not “ensured,” individual issues predominate and, based upon the evidence presented to the trial court, they are not amenable to class treatment. These conclusions, if adopted as state law by the Supreme Court, would effectively deny workers the right to use class actions to recover wages for missed meal and rest breaks in California.  Further, the adoption of these conclusions by California’s highest court would make it harder than ever before for individual workers to obtain relief for missed meal and rest breaks. The restaurant workers have asked the Supreme Court to decide a number of key issues of law: Does a California employer need to relieve employees of all duties so they can take meal and rest breaks or simply make them “available”? Can the employer simply make meal and rest breaks available to their employees at any time during a shift, or must the rest and meal break be provided within a certain number of hours of beginning a work shift? When and how frequently must an employer provide meal and rest breaks to its employees? In wage and hour class action cases, can workers rely on statistical data to show a class-wide pattern of meal and rest break violations or are the factual issues always too individualized for class treatment? The answers to these questions are of great interest to labor groups and business advocates...

read more

The Slow Pace of Litigation Process

Written by

Even the simplest lawsuit can take up to one year to resolve. The reasons for the slow pace of the litigation process are many. Service of the Complaint: Once the plaintiff’s complaint is filed, it must be served on the defendant. Sometimes, the defendant tries to avoid being served with the complaint, by hiding from the process servers. The Defendant’s Response or Answer: Once the defendant is personally served, he has at least 30 days to file a response to the complaint. Written Discovery: After the defendant responds to the complaint, then the plaintiff and defendant engage in written discovery. Each side has an opportunity to send written questions to one another designed to obtain information about the plaintiff’s claims and the defendant’s defenses to those claims. This process typically lasts upward of four months. Depositions: During this stage of the process, called discovery, the plaintiff and defendant have the right to take depositions of people who are witnesses to the acts about which the plaintiff has complained. In an automobile accident case, for example, the drivers will have their depositions taken, as will anyone who witnessed the accident. The length of this stage of the process depends on the number of witnesses. Expert Discovery: In many cases, each side retains experts to assist in proving or disproving plaintiff’s claims, such as doctors, accident reconstruction engineers and economists. The experts perform their analysis of the case and then their depositions are taken. This expert discovery usually does not even begin until after all of the above tasks are completed. Arbitration or Mediation: In many cases the plaintiff and defendant agree to seek the assistance of trained arbitrators or mediators to help resolve the case before trial. This Alternative Dispute Resolution (“ADR”) process can be very productive. The court often orders the plaintiff and defendant to engage in ADR. Trial: If the plaintiff and defendant do not agree to settle the lawsuit, the case proceeds to trial. The court sets a trial date, usually within one year of the date the lawsuit was filed, but, in complex cases, the trial may not be scheduled until up to two years after the complaint was filed. If the court’s calendar is full, the court will extend the date for trial, sometimes for several months after the original trial...

read more

A Word About the Settlement Process

Written by

Most civil lawsuits settle before trial. Statistics compiled by the judicial system show that only around 3% of all civil cases are tried before a jury or judge. The rest settle though the Alternative Dispute Resolution Process. The judicial system encourages settlement and employs several means of ensuring that the parties to each lawsuit (the plaintiff and the defendants) consider seriously the risks of proceeding to trial. Most courts order the parties to participate in mediation or arbitration. In the mediation process, an experienced attorney or former judge will make an effort to get each side to settle the claims for a reasonable value. If the plaintiff, defendant and insurance company reach a similar perspective toward the value of the case and the risks of going to trial, the case can generally settle at mediation. The mediator makes settlement recommendations but does not have the authority to order the parties to...

read more

A Word About the Legal Process

Written by

We think it is very important for our clients to understand how the civil justice system operates. With that in mind, we have developed a brief description of how the legal process works. The Parties to a Civil Suit The Plaintiff A person who is injured and who seeks recovery through the civil justice system is called a plaintiff. In some cases there is more than one plaintiff. In class action cases, there may be thousands of plaintiffs, or class members. The Defendant The person or the company that has injured a person is called the defendant. In some cases there is more than one defendant. The Insurance Company In a majority of personal injury cases, an insurance company for the defendant assigns the defense of the case to a large insurance defense law firm. Lawyers from that law firm are assigned to the case. At the insurance company, a claims manager is assigned to monitor the progress of the case. Generally, the claims manager will assign a monetary value to the claim, and adjust that value upward or downward as the case progresses. The Civil Complaint Every claim made by an injured person is set out in the civil complaint, a document that summarizes the plaintiff’s claims. Each separate claim in the complaint is called a cause of action and it must be based on the law applicable to the plaintiff’s individual claims. For example, a cause of action for negligence asserts: The defendant owed plaintiff a duty not to do anything unreasonable that might injure the plaintiff. The defendant breached that duty by engaging in conduct that fell below the proper standard of care of a reasonable person in the circumstances that led to the injury. The breach of that legal duty caused the plaintiff to suffer an injury. The injury caused the plaintiff to suffer actual damages. Different causes of action have different proof requirements that the plaintiff must “carry” or prove in order to obtain a judgment against the defendant. It is our job as your attorneys to identify the proper causes of action in your case, to describe them properly in the complaint and to gather evidence supporting each element of each cause of action. Liability and Damages Liability: The plaintiff must prove that the defendant should be found to be responsible or liable for causing his or her injuries. That is, the plaintiff must prove that the defendant’s conduct fell below the applicable standard of care. Damages: If the plaintiff can prove that the defendant was liable for his or her injuries, then the plaintiff must prove the nature and monetary value of his or her injuries. In the context of the personal injury lawsuit, the plaintiff is entitled to the reasonable value of: All of his or her medical expenses (past and future); Lost income (past and future); Miscellaneous expenses caused by the defendant (such as the cost of medical devices purchased for home use by the injured plaintiff); Damages for pain and suffering, loss of enjoyment of life, humiliation, embarrassment and emotional...

read more