Wage Law

In Alvarez v. May Department Stores Co. (2006) 143 Cal.App.4th 1223, the Court of Appeal established that collateral estoppel could prevent future class actions once a court denies certification of a particular class. However, in Bufil v. Dollar Financial Group, Inc. (2008) 162 Cal.App.4th 1193, the courts distinguished Alvarez, holding, among other things, that a narrower class can be certified later, even if a larger putative class had earlier been denied certification.

In Johnson v. GlaxoSmithKline, Inc. (2008) 166 Cal.App.4th 1497, Alvarez has been further distinguished and its reach limited. Where a prior attempt to certify a nationwide class action was not identical to the current attempt and the current putative class is not the same as the prior class which was not certified, collateral estoppel does not bar plaintiff’s efforts to certify a class action.

In two published decisions the United States District Court for the Central District of California denied class certification in putative class actions brought by current and former users of the prescription drug Paxil against GlaxoSmithKline, Inc. (GSK), the drug’s manufacturer, which alleged GSK had deceptively advertised Paxil as nonhabit-forming. Relying upon those decisions and Alvarez v. May Dept. Stores Co. (2006) 143 Cal.App.4th 1223 (Alvarez), which applied established principles of collateral estoppel to class certification issues, the trial court granted GSK’s motion for summary adjudication precluding this case from proceeding as a class action, ruling Kevin Johnson’s superior court lawsuit against GSK sought to certify the identical putative class, pursuing the same legal claims, as had been disallowed in the federal actions. Because the class issues actually litigated in the federal court Paxil cases differ from those presented by Johnson’s putative class action, we reverse.

In dictum, the Court of Appeal cited a recent SCOTUS case, Taylor v. Sturgell (2008) ___ U.S. ___ [128 S.Ct. 2161, 2171 & fn. 4, 171 L.Ed.2d 155, 167] and noted that it appears to preclude the use of collateral estoppel to bar absent putative class members from seeking class certification following the denial of a certification motion in any earlier lawsuit.

A motion for rehearing was denied by the Court of Appeal, and an immaterial modification was made to the opinion. A petition for review was filed on October 29, 2008, and a decision to grant or deny review by the California Supreme Court is expected before the end of the year. You can download the full text of Johnson here in pdf or MS Word format.