Thursday, February 10, 2005
Judge Must Reconsider Ruling on Class Action in Light Of State High Court Decision, Appellate Court Says
From Staff and Wire Service Reports
A Los Angeles Superior Court judge must reconsider his ruling denying class action status to a lawsuit filed in against Rent-A-Center Inc. over alleged labor and wage violations, this district’s Court of Appeal ruled yesterday.
In an unpublished decision, the court’s Div. Seven said Judge Ralph W. Dau’s ruling that individual issues would predominate in any litigation was undercut by the state Supreme Court’s ruling last year in Sav-On Drug Stores, Inc. v. Superior Court, 34 Cal.4th 319, and by the First District’s opinion a few months earlier in Bell v. Farmers Insurance Exchange (2004) 115 Cal.App.4th 715. Neither ruling was available to Dau when he made his ruling in March of 2003.
Plaintiff Jeremy Burdusis sued RAC in October 2001 claiming the Texas-based rent-to-own operator had a policy of failing to pay overtime, failing to give employees proper meal and rest breaks and mailing final paychecks late.
RAC rents electronics, furniture and other household accessories and appliances to customers, who then have the option of buying the merchandise. The retailer has more than 150 stores in California.
Attorneys for the company argued that RAC’s employee handbook forbids working off the clock and provides employees a hotline to call to report any violations, Justice Laurie Zelon noted in her opinion for the appellate panel.
When an attorney in a separate but similar case against RAC indicated he would request class certification in that suit, brought by Isreal French, Dau ruled that French was bound by his ruling in the Burdusis case.
The appellate panel instructed Dau to review the Sav-On and Bell decisions, both of which dealt with employee claims for unpaid overtime. Zelon noted that Dau had relied on two out-of-state court decisions—one from Ohio and one from Texas—in making his ruling.
She said the general rule that trial judges are “afforded great latitude” in making class certification determinations was trumped in this situation by another general rule—that appellate court decisions should be applied retroactively “where to do so is not unfair and no public policy is implicated.”
Applying the two rulings to the RAC litigation “is not unfair to the litigants in this action, as neither case represents an entirely ‘new’ rule of law,” Zelon explained. “Sav-On and Bell did not change the rules concerning whether a plaintiff group is amenable for class treatment because they applied the same standard to a different factual scenario and used proof through statistical evidence.”
The Texas and Ohio cases Dau considered applied “virtually identical tests for certifying a class action,” Zelon conceded. “However,” she reasoned, “the determination here must be made in light of governing California law.”
In Sav-On, she pointed out, the high court rejected arguments that individual damages calculations would be too cumbersome in a case in which workers claimed they had been misclassified as managers and denied overtime pay, suggesting that statistical sampling could be used. In Bell, also an overtime case, the First District rejected claims that a statistical methodology “would improperly relieve the employees of their burden under California law to establish they actually worked overtime,” Zelon observed.
But she said it was up to the trial court, not the appellate jurists, to decide how the case law should be applied to the RAC litigation.
James A. Krutcik and Angelo Nicholas Georggin of Bailey Pinney Georggin & Krutcik in Mission Viejo and James G. Bohm of Bohm, Francis, Kegel & Aguilera in Costa Mesa represented Burdusis on appeal, while Latham & Watkins attorneys Joel E. Krischer of the Los Angeles office and Laura Emily Hayward of the Costa Mesa office represented RAC.
The case is Burdusis v. Rent-A-Center, Inc., B166923.
Copyright 2005, Metropolitan News Company