Wage Law

In September, the Fourth Appellate District reversed an order denying class certification in Lewis v. Robinson Ford Sales, Inc., a case involving negative equity financing under the Automobile Sales Finance Act, Consumer Legal Remedies Act, and Unfair Competition Law. The matter was ordered remanded with directions to enter an order certifying the class. Last month, the court granted a half dozen requests to publish the opinion.

The plaintiff alleged that the dealership inflated prices due by including deficiency balances on previous automobile loans without adequate written disclosure. The plaintiff's position was that mandatory disclosures regarding purchase price should be treated like strict liability claims for certification purposes, and individualized proof of reliance or harm was not required to establish liability.

The trial court applied incorrect standards, focusing on what the defendant characterized as individualized fraud and reliance issues. However, the claims were amenable to certification, with common questions of law and fact, because the statutory violations could be determined by examining the face of the defendant's own records; common law fraud, requiring specific findings of causation and reliance, was not an issue because CRLA claims do not require individualized proof of causation of injury from a deceptive practice. Moreover, individualized issues pertaining to potential punitive damages were not a ground for denial of certification. It was premature for the trial court to consider that issue because the merits had not been determined, but in any event, is has long been the law in California that a plaintiff seeking punitive damages is not barred from pursuing class certification. Legal and factual issues that go to remedies simply cannot outweigh the common issues related to liability when deciding certification.

A petition for rehearing was denied today. You can download the full text of is Lewis v. Robinson Ford Sales, Inc. here in pdf or word format.