BCBG Class Action Defense Cases–In re BCBG: California State Court Upholds Court Order Granting Defense Motion To Strike Class Action Allegations In Labor Law Class Action

Jun 25, 2008 | By: Michael J. Hassen

In Connection with Labor Law Class Action Alleging Failure to Pay Managers and Assistant Managers Overtime, Trial Court did not Abuse its Discretion to Manage Class Action Certification when it Granted Defense Motion to Strike Class Action Allegations from Complaint California State Court Holds

Plaintiffs filed a putative class action against AZ3, Inc., doing business as BCBG Maxazria (BCBG), alleging that it had failed to pay its managers and assistant managers for overtime. In re BCBG Overtime Cases, ___ Cal.App.4th ___, 78 Cal.Rptr.3d 257 (Cal.App. June 13, 2008) [Slip Opn., at 2]. A separate class action was filed by a single plaintiff, and then the three plaintiffs filed a coordinated class action complaint against BCBG, id. Defense attorneys moved to strike the class action allegations pursuant to Rule 1857(a)(3) of the California Rules of Court. Id., at 3. The motion was supported by declarations from 25 current or former managers and assistant managers explaining that “managers are not assigned uniform duties and spend more than 50 percent of their time on non-managerial work,” and that each store is different, targeting different customers, and requiring that managers exercise independent judgment in designing and laying out the store. Id. Plaintiffs’ lawyer opposed the motion on the ground that it was improperly sought to circumvent the class action certification process. Id., at 4. At oral argument, after the trial court issued a tentative ruling to grant the motion, plaintiffs asked for leave to depose some of the declarants, and for leave to file an amended class action complaint. The trial court denied plaintiffs’ requests and granted the motion finding that it was “properly before it because ‘class certification issues may be determined at any time during the litigation.’” Id. As the appellate court explained at page 4, “It found that BCBG had met its burden to show that the action is not suitable for class certification by producing ‘substantial evidence which establishes that Plaintiffs cannot prove the elements of typicality or commonality necessary for class certification.’” The Court of Appeal affirmed.

On appeal, plaintiff argued that the trial court should not have considered evidence outside the pleadings in ruling on the defense motion to strike the class action allegations, and that she should have been granted leave to amend. BCBG, at 1-2. In the alternative, plaintiff argued that she should have been allowed to conduct discovery before the court ruled on the motion, id., at 2. With respect to the first issue, the appellate court held that trial courts have considerable “flexibility” in addressing the certification of class actions and, indeed, have been encouraged by the California Supreme Court to be “procedurally innovative” in connection with “determining whether to allow the maintenance of a particular class suit.” Id., at 5 (quoting City of San Jose v. Superior Court, 12 Cal.3d 447, 453 (Cal. 1974)). California law permits either party to file a motion to certify a class action, and provides that “the pleadings be amended to eliminate allegations as to representation of absent persons, and that the action proceed accordingly.” Cal. Rule of Court, Rule 3.767(a)(3).

The Court of Appeal recognized that class action certification “is generally not decided at the pleading stage of a lawsuit.” BCBG, at 6. The defense motion was not a motion to strike or a demurrer; rather, “It was a motion seeking to have the class allegations stricken from the complaint by asking the trial court to hold an evidentiary hearing and determine whether Plaintiffs’ proposed class should be certified.” Id. The defense motion was consistent with the mandates of state and federal law that class action certification be decided at the earliest practicable opportunity. Id., at 6-7. In essence, the defense motion was a “preemptive motion to strike,” id., at 7; while plaintiff cited a case disapproving of a defendant “‘slip[ping] through the backdoor what is essentially an opposition to a motion for class certification before Plaintiffs have made such a motion and when discovery on the issue is still on-going,’” id., at 8 (citation omitted), the procedural posture of this case was different. Here, defense attorneys did not file the motion until 33 months after plaintiff filed her class action complaint, and almost 2 years after the filing of the coordinated class action complaint. Id. Plaintiffs had

Plaintiff argued that she should have been given “the opportunity to test the veracity of the declarations submitted by BCBG in support of its motion” by deposition. BCBG, at 9. The appellate court disagreed. Not only had plaintiff “had a chance to conduct discovery on class certification issues,” she could have asked for leave to conduct such discovery after receiving the motion. Id. Instead, plaintiff waited until oral argument on the hearing, after the trial court issued its tentative ruling, id.

In conclusion, the trial court explained at page 10, “By the time the court made its ruling on BCBG’s motion, it had a long history with this case, something this court does not have.” The trial court acted within its broad discretion in granting the motion; accordingly, the appellate court affirmed the court order granting the motion to strike the class allegations. Id.

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