Thursday, June 4, 2015
C.A. Partially Revives Wage-and-Hour Class-Action Claims
Panel Says Hospital Employee’s Causes of Action Were Tolled During Prior Litigation
By KENNETH OFGANG, Staff Writer
The Court of Appeal for this district yesterday revived part of a putative class action by an employee of Children’s Hospital of Los Angeles, holding that some of the plaintiff’s claims were tolled by the filing of earlier lawsuits by members of the same putative class.
Justice Richard Aldrich, in an unpublished opinion for Div. Three, cited American Pipe & Construction Co. v. Utah (1974) 414 U.S. 538, which holds that such claims are tolled under some circumstances.
The court ruled, in part, in favor of Michelle Falk, a licensed vocational nurse who sued the hospital in December 2012, claiming various violations of the wage-and-hour provisions of the Labor Code.
Falk’s complaint, Aldrich noted, was substantially similar to that filed by registered nurse Denise Mays 11 months earlier. Mays claimed, among other things, that the hospital routinely failed to pay overtime when required to do so, failed to promptly pay employees upon separation from employment and to pay late penalties in such cases, had a policy of discouraging employees from taking rest periods to which they were statutorily entitled, and was in non-compliance with the code’s meal-break requirements because employees were required to answer pages during those periods and to clock out even if they did not take the break.
Two similar complaints were filed against the hospital, in 2007 and 2013. The 2007 case of Palazzollo v. Children’s Hospital of Los Angeles resulted in a summary judgment for the hospital on the merits, which was affirmed by the Court of Appeal in an unpublished opinion in December 2010. Neither the trial court nor the appellate panel addressed class action issues in its ruling.
In granting CHLA’s summary judgment motion in the Falk case on limitations grounds, Los Angeles Superior Court Judge Jane L. Johnson rejected the plaintiff’s claim that the action was timely under American Pipe & Construction Co. v. Utah (1974) 414 U.S. 538. The court held in that case that a class claim is generally tolled during the pendency of a prior class action raising a related claim on behalf of the same class.
Johnson reasoned that the Palozzolo complaint did not have tolling effect because none of the claims were found substantively viable, that American Pipe does not permit “piggybacking” of successive class actions, and that the earlier suit did not put the defendant on notice of Falk’s “esoteric” claim that the hospital evaded paying the proper amount of overtime to class members by using a “dual wage” system in which employees who worked overtime were paid a lower base wage.
Aldrich, writing for the Court of Appeal, noted that the California Supreme Court has adopted the American Pipe rule, holding in Jolly v. Eli Lilly & Co. (1988) 44 Cal.3d 1103 that tolling applies “from the time of commencement of the suit to the time of denial of certification for all purported members of the class who either make timely motions to intervene in the surviving individual action…or who timely file their individual actions.”
The justice cited a case in which the Seventh U.S. Circuit Court of Appeals applied American Pipe to an action in which the class action plaintiff dismissed the action before class certification was ruled on, leaving the other class members “in the lurch,” as the federal panel put it. In ruling that a subsequent action by another class member was tolled during the pendency of the first action, the court rejected the argument that the first action was “never a class action” and noted that the class-certification question was never ruled on in American Pipe either.
The class members in Palazzolo’s case were in a similar position, Aldrich said, because they were left without remedy when the trial court, based on the hospital’s election to seek summary judgment on the merits rather than wait for a ruling on class certification. The justice emphasized that the hospital prevailed “because Palazzolo, not the class, failed to state viable causes of action.”
Limited Tolling Period
The justice went on to conclude, however, that Falk’s claims were only tolled for three years, nine months, and three days—the length of time from the filing of Palazzolo’s complaint to the issuance of the remittitur following his defeat in the Court of Appeal.
Because some of Falk’s claims, such as for violation of the requirement that employees be given accurate wage statements, are subject to a one-year statute of limitations, the dismissal of those claims was proper, Aldrich said. But other claims, he explained, were subject to a three- or four-year statute and were timely.
Attorneys on appeal were Steven Bruce Gold of The Gold Firm and Joseph Antonelli, Janelle Carney and Jason Hatcher of the Law Office of Joseph Antonelli for the plaintiff, and Derek R. Havel, Daniel J. McQueen, Marlene M. Nicolas and Matthew A. Tobias of Sheppard, Mullin, Richter & Hampton and Linda Miller Savitt of Ballard Rosenberg Golper & Savitt for the defendant.
The case is Falk v. Children’s Hospital of Los Angeles, B251182.
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