Tuesday, April 26, 2011
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C.A. Throws Out Discovery Order in Starbucks Class Action
Effort to Identify Class Representative With Marijuana Conviction Would Violate Privacy, Justices Rule
By KENNETH OFGANG, Staff Writer
An order that would have required Starbucks Corporation to identify employees who were illegally forced to disclose marijuana convictions in order to obtain their jobs was thrown out yesterday by the Fourth District Court of Appeal.
The order by Orange Superior Court Judge Gail Andler was an abuse of discretion because it would have resulted in the very type of invasion of privacy that made the inclusion of the question about past convictions unlawful in the first place, Justice Raymond Ikola wrote for Div. Three.
The ruling came more than two years after the same court ruled that Eric Lords, Hon Yeung, and Donald Brown could not sue under a Labor Code provision that prohibits an employer from asking a prospective employee to disclose convictions for marijuana possession that are more than two years old.
Decades-Old Law
California employers have, for many years, been prohibited from asking job applicants about arrests not resulting in convictions. Sec. 432.8, which extended that prohibition to most marijuana-related convictions after two years, was enacted in the 1970s as part of legislation minimizing penalties for possessing small amounts of the drug.
An applicant who is subjected to an inquiry in violation of the section is entitled to actual damages or $200, whichever is greater, and the plaintiffs sought the minimum recovery on behalf of each member of the class.
Lords answered a question about marijuana possession on his job application by truthfully stating that he had no such convictions. The others refused to answer.
None of the three was hired, and Starbucks argued that its decision not to hire them had nothing to do with whether they did or did not use marijuana.
Those plaintiffs, who sought $26 million in statutory penalties on behalf of a class of more than 130,000 applicants, lacked standing because none of them had been convicted of marijuana possession, Ikola wrote in Starbucks Corp. v. Superior Court (2008) 168 Cal.App.4th 1436.
Amended Complaint
On remand, however, the judge ruled that the complaint could be amended to narrow the class to employees who had marijuana convictions. On a subsequent discovery motion, Andler ordered that Starbucks review applications from the relevant period at random until it identified 25 applicants who had been convicted of marijuana possession more than two years before applying.
Those applicants would then have their identifying information turned over to a third party administrator, who would give them the opportunity to opt out rather than have that information turned over to the plaintiffs’ counsel.
The Court of Appeal stayed the order, however, and yesterday granted Starbucks’ petition for a writ of mandate directing that it be set aside.
Ikola wrote:
“Here, despite some five years of litigation, plaintiffs admittedly have made no showing that any of some 135,000 Starbucks applicants have been ‘aggrieved’ as a result of the job application form. Despite our published appellate opinion, not a single person has stepped forward who fits within the statutory criteria. This is so even though we stressed in Starbucks I that such litigants could avoid any potential opprobrium by using a form of Doe pleading, or other protective device to shield their identities from public disclosure.”
The justice noted that the plaintiffs’ lawyers had opposed any requirement that applicants be publicly identified in order to be included in the class, saying it would render their rights under the Labor Code provision illusory.
“We are at a loss to understand how plaintiffs can square these concerns, which we share, with their proposed discovery,” Ikola wrote. “One can only imagine the potential consternation in a household where a Starbucks applicant with a marijuana-tinged past is ‘outed’ to a spouse, child, or roommate who opens the letter and reads about a lawsuit involving job applicants with prior marijuana convictions.”
Prior Case Distinguished
The jurist distinguished CashCall, Inc. v. Superior Court (2008) 159 Cal.App.4th 273, a suit against a collection agency for secretly monitoring debtors’ phone calls. After it was determined that the plaintiffs who filed the action were not among those whose calls had been monitored, the appellate court approved a procedure by which those whose calls had been monitored would be informed of that fact and permitted to join the litigation.
In that case, Ikola explained, the aggrieved debtors had no alternative means of protecting their rights because they would not otherwise know that their calls had been monitored.
“Here, in contrast, Starbucks’s job applicants who had marijuana convictions know about their own previous convictions and about the fact that they had applied for a job at Starbucks,” the jurist wrote. “They are free to effectuate the legislative purposes underlying Labor Code section 432.8 by bringing individual actions, filing, if necessary, through Doe pleadings, and recovering not only actual damages or a statutory penalty, whichever is greater, but also attorney fees.”
The justice declined, however, to conclude that CashCall was wrongly decided and that “headless class discovery” should be flatly prohibited, as under federal cases cited by Starbucks’ counsel, who argued this was necessary to prevent “encouraging attorney-driven lawsuits and sham lawsuits filed in the names of plaintiffs who are placeholders until discovery can turn up a viable plaintiff.”
The need for such a prohibition, rather than the balancing test adopted in prior California cases, need not be considered in order to overturn the discovery order, which was the only matter before the court, Ikola said.
Rex S. Heinke, Catherine A. Conway, Gregory W. Knopp and Jessica M. Weisel of Akin Gump Strauss Hauer & Feld represented Starbucks on appeal. H. Scott Leviant, Mike Arias and Mikael Stahle of Arias Ozzello & Gignac represented the plaintiffs.
The case is Starbucks Corporation v. Superior Court (Lords), G046350.
Copyright 2011, Metropolitan News Company