California Supreme Court (!) Issues Strong Pro-Defense Wage And Hour Class Action Decision

"Depending on the nature of the claimed exemption and the facts of a particular case, a misclassification claim has the potential to raise numerous individual questions that may be difficult, or even impossible, to litigate on a classwide basis."

"[T]rial courts deciding whether to certify a class must consider not just whether common questions exist, but also whether it will be feasible to try the case as a class action."

"In considering whether a class action is a superior device for resolving a controversy, the manageability of individual issues is just as important as the existence of common questions uniting the proposed class."

"[A] class action trial management plan may not foreclose the litigation of relevant affirmative defenses, even when these defenses turn on individual questions."

Quotes from a defendant's brief? No. Remarkably, these are all drawn directly from a surprising and defense-oriented decision the California Supreme Court issued yesterday. While, perhaps, the decision is not quite as defense friendly as the United States Supreme Court's decision in Wal-Mart Stores, Inc. v. Dukes, it is a very strong decision on many important issues for defendants in employment litigation in one of the country's most difficult jurisdictions.

In Duran v. U.S. Bank National Ass'n, Case No. S2000923 (May 29, 2014), the plaintiff loan officers contended that they were misclassified as outside salespersons under California state law. The trial court certified a class of 260 plaintiffs and then tried to manage the case by bifurcating trial between liability and damages, and then limiting the trial testimony to a sample group from the class. More about these decisions in a minute. The trial court ultimately found that the entire class had been misclassified and then, in the liability phase, rendered a verdict of about $15 million, or an average of $57,000 per class member.

The defendant appealed, and the court of appeals unanimously reversed. This was, incidentally, the same court that 10 years ago rendered the strongly pro-plaintiff decision in Bell v. Farmers Ins. Exchange, 115 Cal. App. 4th 715 (2004), so it was not exactly a bastion of defense jurisprudence.

A virtually unanimous California Supreme Court (one judge concurred; no dissent) agreed that the trial verdict could not stand. We won't try to summarize the court's 51-page decision here, but the court made numerous significant rulings. Among them, with some additional pertinent...