Class Action Defense Cases–Lee v. Dynamex: California Court Reverses Denial Of Class Action Certification Holding Erroneous Discovery Ruling Precluded Plaintiff From Meeting Burden Of Showing Commonality And Typicality Of Claims

Sep 30, 2008 | By: Michael J. Hassen

Trial Court Erroneous Order in Labor Law Class Action Denying Motion to Compel Discovery of Contact Information of Putative Class Members Deprived Plaintiff of Opportunity to Develop Evidence Required to Support Motion for Class Action Certification thus Requiring Remand California Court Holds

Plaintiff filed a putative class action against parcel delivery company, Dynamex, alleging labor law violations; specifically, the class action complaint alleged that Dynamex, a nationwide courier and delivery service, “had improperly reclassified the drivers from employees to independent contractors in violation of California law.” Lee v. Dynamex, Inc., ___ Cal.App.4th ___ (Cal.App. August 26, 2008) [Slip Opn., at 2]. Prior to seeking class action certification, plaintiff sought to compel Dynamex to identify and provide contact information for putative class members; the trial court denied the motion, and subsequently denied class action treatment of the lawsuit. Id. The California Court of Appeal reversed, holding that “the trial court’s discovery ruling directly conflicts with the Supreme Court’s subsequent decision in Pioneer Electronics (USA), Inc. v. Superior Court (2007) 40 Cal.4th 360 (Pioneer), as well as our decisions in Belaire-West Landscape, Inc. v. Superior Court (2007) 149 Cal.App.4th 554 and Puerto v. Superior Court (2008) 158 Cal.App.4th 1242 (Puerto), and that ruling improperly interfered with [plaintiff’s] ability to establish the necessary elements for class certification….”Id., at 2.

Since 2001, Dynamex has employed approximately 800 drivers and has operated out of four locations in California; and in December 2004, the company reclassified its drivers as independent contractors “after management concluded such a conversion would generate economic savings for the company.” Lee, at 2. We do not go into greater detail as to the facts underlying the class action allegations, as they are not material to the issue resolved by the appellate court. In brief, plaintiff worked for Dynamex for 15 days, and filed his class action complaint three months after he stopped working for the company. Id., at 3. In essence, the class action alleged that as independent contractors, Dynamex drivers “performed the same tasks in the same manner as they did when they were classified as employees,” id. Soon after filing his class action, plaintiff sought from Dynamex discovery of the names and addresses of all drivers who had worked as independent contractors for the company; Dynamex objected on the ground that its employees should be given the right to “opt-in” to the request, relying on the then-recent appellate opinion in Pioneer Electronics (USA) Inc. v. Superior Court (Mar. 30, 2005, B174826), which held that “opt-in” letters protected consumer privacy rights by giving them the right to choose whether they wished to have their personal contact information shared with class action plaintiff lawyers. Id., at 3-4. The trial court denied plaintiff’s motion to compel as “premature,” and stated personal contact information would not be ordered disclosed unless and until the litigation had been certified as a class action. Id., at 4.

Plaintiff moved for class action certification; defense attorneys opposed the motion arguing in part that the definition of the class was overly broad. Lee, at 4. Ultimately, the trial court refused to grant class action treatment because it found that the class was not ascertainable, lacked commonality (due to factual differences among the various drivers), lacked typicality, and because it did not believe that class action treatment was the superior means for resolving the claims raised by plaintiff’s complaint. Id., at 5. Plaintiff appealed denial of class action certification arguing that the erroneous denial of his motion to compel discovery “prevented him from gathering adequate information to support his motion for class certification.” Id. The California Court of Appeal agreed. We focus here only on that part of the appellate court’s opinion that concerns the discovery dispute; the Court’s conclusion that the trial court erred in finding that the class lacked ascertainability may be found at pages 7 through 10.

In considering the impact of the trial court’s discovery ruling on its ultimate decision to deny class certification, the appellate court noted that “[t]he trial court was plainly disturbed by [plaintiff’s] failure to produce additional evidence to support a finding of community of interest among potential class members in terms of the predominance of common questions of law or fact, the typicality of [plaintiff’s] claims or the adequacy of his representation as the sole named plaintiff.” Lee, at 10. Relying on Pioneer, Belaire-West and Puerto, the appellate court held that the trial court erred in permitting plaintiff discovery of contact information for putative class members, see id., at 11-13, and that this erroneous ruling meant that plaintiff “lacked the means to develop evidence capable of supporting his motion for class certification,” id., at 13. The Court of Appeal therefore reversed the trial court order denying class certification, and remanded the matter with directions to permit plaintiff to obtain the discovery he sought and to then hold a new hearing on class certification. Id., at 13.

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