Posts belonging to Category Motion Practice

California’s Fourth Appellate District recently concluded that the Pineda v. Williams-Sonoma Stores decision applies retroactively.  See Alvarez v. Brookstone Co., No. D057567 (Cal. Ct. App. Dec. 20, 2011) (available here).  In Pineda v. Williams-Sonoma Stores, 51 Cal. 4th 524 (2011), the California Supreme Court held that the collection of ZIP codes as part of a credit card transaction violates California Civil Code section 1747.08.  Civil Code section 1747.08 prohibits businesses from requesting or recording “personal identification information,” but does not expressly forbid the collection of ZIP codes.  See Cal. Civ. Code § 1747.08 (a)(2) and (b).  The Supreme Court concluded in Pineda that “the only reasonable interpretation of section 1747.08 is that personal identification information includes a cardholder’s ZIP code.”  Id. at 534.

In 2008, the Alvarez plaintiff filed suit alleging that Brookstone violated section 1747.08 when its retail store cashiers requested and recorded customers’ ZIP codes.  Alvarez v. Brookstone Co., No. D057567 (Cal. Ct. App. Dec. 20, 2011), slip op. at 2.  In 2009, the trial court granted the defendant’s demurrer without leave to amend, on grounds that ZIP codes are not “personal identification information” pursuant to section 1747.08.  Slip. op. at 3.  The Court of Appeal reversed, holding that the state Supreme Court’s February, 2011 decision in Pineda is properly applied retroactively.  Slip op. at 6-11.  In its reasoning, the appellate court cited “the general rule of retrospective application of court decisions.”  Slip op. at 6. 

This ruling should prove helpful to California consumers who experienced ZIP code violations prior to the February 2011 ruling in Pineda.  The Alvarez plaintiff is now expected to proceed with her putative class action against Brookstone. 

In an important victory for class action plaintiffs, California’s Second Appellate District has held that “unnamed putative members of a class that was never certified cannot be bound by collateral estoppel.”  Bridgeford v. Pacific Health Corp., No. B227486, 2012 Cal. App. LEXIS 26, * 1-2 (Cal. Ct. App. Jan. 18, 2012) (available here).  The unanimous decision, designated for publication, reverses the trial court’s misapplication of the doctrine of collateral estoppel in reliance on the U.S. Supreme Court’s ruling in Smith v. Bayer Corp., 131 S. Ct. 2368 (2011).  In Smith, the Supreme Court resolved a circuit split and held that unnamed putative class members cannot be bound by issue preclusion if a class in a prior proceeding was denied certification.  Id. at *15 (citing Smith, 131 S. Ct. at 2380-2381).

The Bridgeford plaintiffs alleged numerous wage and hour violations against their employer, Los Angeles Memorial Medical Center, a subsidiary of Pacific Health Corporation.  Their lawsuit sought classwide relief including compensatory damages and civil penalties pursuant to PAGA, the California Labor Code Private Attorneys General Act.  Id. at *2-3.  In a prior class action, another named plaintiff had moved for and lost class certification against the same defendant as to the same wage and hour claims.  Id. at *3-6.  In Bridgeford, the defendant demurred on grounds that collateral estoppel barred the plaintiffs from re-litigating class certification.  Id. at *6.  The trial court sustained the demurrer, without leave to amend.  Id. 

The Court of Appeal reversed, holding that “the denial of class certification cannot establish collateral estoppel against unnamed putative class members on any issue because unnamed putative class members were neither parties to the prior proceeding nor represented by a party to the prior proceeding so as to be considered in privity with such a party for purposes of collateral estoppel.”  Id. at *16.  Accordingly, because the Bridgeford plaintiffs were not parties to the prior action, they could not be precluded from pursuing their own class claims against the defendant.  Id. at *16-17. 

In a victory for consumers, California’s Third Appellate District has reversed a trial court’s ruling that granted judgment on the pleadings in favor of the defendants, personal computer manufacturers eMachines and Gateway (collectively, “eMachines”).  See Collins v. eMachines, No. C066092, 5-6 (Cal. Ct. App. Nov. 28, 2011) (available here).  The ruling affirmed that “injury in fact” can be satisfied by alleging as damages the difference between the actual purchase price and the fair market value of a defective product.  Slip op. at 4.  Additionally, the ruling importantly distinguished product defect cases in which warranties are implicated.  See slip op. at 9-12.

The lawsuit arose over allegations that the chip responsible for writing and reading data on eMachines’ floppy disc drives malfunctioned, resulting in lost data and files.  Slip op. at 3.  The plaintiffs allege that the disc drives did not wear out from normal use, but rather were defective at the time of purchase.  Slip op. at 5.  Because the defect existed at the time of purchase, the appellate court rejected eMachines’ claim that the plaintiffs were attempting an “end-run” around warranty laws.  Slip op. at 11.  In contrast to automobile cases in which a defect only manifested after an express warranty period and was therefore not actionable, in this case the plaintiffs experienced problems with their computers both before and after the warranty’s expiration.  Slip op. at 9-12 (distinguishing Daugherty v. Amer. Honda Motor Co., 144 Cal. App. 4th 824 (2006) and Bardin v. DaimlerChrysler Corp., 136 Cal. App. 4th 1255 (2006)).    

The Collins plaintiffs are now expected to proceed with their product defect claims against eMachines principally under California’s Consumer Legal Remedies Act (CLRA) and Unfair Competition Law (UCL).

Los Angeles Superior Court Judge Daniel J. Buckley has ruled that PAGA (the Labor Code Private Attorneys General Act of 2004) is constitutional.  The ruling came in response to a demurrer filed by defendant Whole Foods, in which the company claimed that PAGA is void on separation-of-powers grounds.  See Hamilton v. Whole Foods, No. BC461746 (L.A. Super. Ct. Dec. 22, 2011) (order denying demurrer) at 1 (available here). 

Rejecting Whole Foods’ arguments, the Court ruled that “the PAGA statute does not significantly impair judges’ functions, or contain anything unique to necessitate prosecution only by neutral government lawyers.  The absence of any real interference with the separation of powers knocks out the critical leg of defendant’s arguments.”  Id. at 5-6. 

Judge Buckley also emphasized that courts have consistently approved of private attorneys general enforcing Labor Code provisions under PAGA, most notably in Brown v. Ralphs, 197 Cal. App. 4th 489 (2011).  Id. at 6-7.  Moreover, the role of private attorneys general in enforcement of statutes beyond PAGA has long been recognized.  Id. at 7.  This further underscores the constitutionality finding. 

The Hamilton lawsuit challenges Whole Food’s alleged failure to provide adequate seating to employees pursuant to Labor Code Section 1198.