Wage Law

Can a defendant bring a motion to decertify a class action before the court has certified the class in the first place? The answer, it appears, is sometimes. In re BCBG Overtime Cases (2008) 163 Cal.App.4th 1293.

Christina Denkinger appeals from the order granting the motion made by the defendant, AZ3, Inc., to strike class allegations from her complaint. She contends the trial court erred in granting the motion to strike based on evidence outside the pleadings; at the least, she contends, the trial court should have given her leave to amend the 2 complaint. Alternatively, Denkinger contends if the trial court properly relied on evidence outside the pleadings, it erred in striking the class allegations without affording her an opportunity to test the evidence through discovery. We find the trial court correctly handled the motion under class certification guidelines, properly receiving evidence on the class certification issue and exercising its discretion in denying certification. Accordingly, we affirm.

More than four years after the action was filed, the defendant filed a motion to strike the class allegations. The Plaintiffs opposed the motion, contending it was an improper attempt to circumvent the class certification process. At oral argument, the plaintiffs requested leave to amend, time to conduct further depositions, and a Pioneer notice. The trial court refused, and granted the motion to strike the class allegations, finding the motion was properly before it because “class certification issues may be determined at any time during the litigation.” 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.”

On appeal, plaintiffs contended the motion to strike was improper because (i) evidence outside the pleadings cannot be considered on a motion to strike; and (2) the motion was a premature challenge to class certification. THe Court of Appeal rejected both arguments. First, a

motion filed under rule 3.767 was not an attack on the pleadings ... a traditional motion to strike; rather, it was a request to initiate the class certification process. The motion was timely, and the trial court properly took evidence outside the pleadings and denied the belated discovery request. Trial courts are given broad flexibility when dealing with the certification of class actions. (Fireside Bank v. Superior Court (2007) 40 Cal.4th 1069, 1087.) In fact, our Supreme Court has urged trial courts “to be procedurally innovative, encouraging them to incorporate procedures from outside sources in determining whether to allow the maintenance of a particular class suit.” (City of San Jose v. Superior Court (1974) 12 Cal.3d 447, 453.) motion and when discovery on the issue is still on-going.” (Ibid.)

Second,

The record in the case before us presents a different procedural posture. BCBG’s motion was filed 22 months after the filing of Plaintiffs’ coordinated complaint, 33 months after Denkinger’s complaint, and four years after Williams and Thornhill’s complaint. During the time between the filing of the coordinated complaint and the motion, Plaintiffs had, as Deckinger puts it, been engaged in “an extensive law and motion battle regarding the identity of members of the putative class and the declarations filed in support of Respondent’s Motion ....

Had this motion been brought at the beginning of the case, it almost certainly would have been denied. See, e.g., Sharp v. Next Entertainment, Inc. (2008) 163 Cal.App.4th 410 (motion to determine class representatives’ adequacy was an "end-run around the certification procedures and an attempt to deny plaintiffs the ability to present their case.") But because the plaintiffs had the benefit of several years of prosecuting their case, the court was willing to entertain an evidentiary motion on certification filed by either side.

The record on appeal wasn't clear, but there appear to have been some discovery motions rendered moot by the order granting the motion to strike. However, the Court of Appeal was not swayed by this detail, for a variety of procedural reasons:

BCBG’s motion to strike the class allegations was not made before the Plaintiffs had a chance to conduct discovery on class certification issues. Such discovery had been going on for some time, although some of the plaintiffs’ efforts had apparently been thwarted by adverse rulings from the court. The propriety of these rulings is not before us. The Plaintiffs received proper notice of BCBG’s motion and had the opportunity to respond with evidence of their own. They presented nothing to counter BCBG’s evidence that the action did not meet the requirements of a class action. Deckinger complains Plaintiffs have not had the opportunity to test the veracity of the declarations submitted by BCBG in support of its motion; she argues they should have been granted leave to depose the declarants. But she could have asked for leave to conduct discovery and a continuance after she received notice of the motion. The only discovery request Plaintiffs made was at oral argument, and that request was for an opportunity to explore their suspicion that BCBG had engaged in misrepresentations to the declarants.

One bit of dictum in this opinion is noteworthy for anyone seeking a class representative enhancement award, particularly in Orange County. During oral argument, Judge Sundvold remarked

“[T]his is frankly when a class rep ought to be out there dialing for dollars, talk[ing] to their friends and former employees, . . . and saying what’s going on out there, what have you heard. And that’s the kind of investigative work that would really, to me, make a class rep worth their weight in gold.”

A class rep's weight in gold is a lot less than most receive in some courts.

The Supreme Court denied a petition for review and a request for depublication. Justice Kennard voted in favor of review. You can download In re BCBG Overtime Cases here in pdf or MS Word format.