Gray v. AT&T CA2/5 ( 2015 )

Filed 2/11/15 Gray v. AT&T CA2/5
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for
publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication
or ordered published for purposes of rule 8.1115.
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
SECOND APPELLATE DISTRICT
DIVISION FIVE
AUSTIN GRAY, B249701
Plaintiff and Appellant, (Los Angeles County
Super. Ct. No. BC384948)
v.
AT&T et al.,
Defendants and Respondents.
APPEAL from orders of the Superior Court of the County of Los Angeles,
William F. Highberger, Judge. Affirmed.
Knapp, Petersen & Clarke, André E. Jardini, K.L. Myles; Law Office of Thomas
W. Falvey, Thomas W. Falvey and Jon D. Henderson for Plaintiff and Appellant.
Orrick, Herrington & Sutcliffe, Julia A. Totten, Sara E. Dionne, Leah L. Spero;
Paul, Plevin, Sullivan & Connaughton, Michael C. Sullivan and Aaron A. Buckley for
Defendants and Respondents.
INTRODUCTION
Plaintiff and appellant Austin Gray (plaintiff) filed a class action against
defendants and respondents Yellowpages.com, LLC; Southwestern Bell Yellow Pages,
Inc.; AT&T, Inc.; and AT&T Services, Inc. (collectively Yellow Pages) that defined a
class of employees in 21 different job titles and sought damages for, inter alia, unpaid
overtime. After initially certifying the class, the trial court granted Yellow Pages’s
motion to decertify and denied plaintiff’s motion to amend the class definition to
eliminate certain job titles from the class definition.
On appeal from the orders granting decertification and denying leave to amend the
class definition, plaintiff contends that the trial court applied the wrong legal standard in
ruling on the motion to decertify and abused its discretion in denying her leave to amend
the class definition. We hold that because the trial court applied the correct legal
standard, it did not abuse its discretion by decertifying the class and that plaintiff has
failed to demonstrate that she was prejudiced by the order denying leave to amend the
class definition. We therefore affirm the two orders from which plaintiff appeals.
FACTUAL BACKGROUND
A. Yellow Pages’s Evidence
Yellow Pages provides interactive advertising services. It connects advertisers to
consumers through websites and cell phone applications. Yellow Pages’s generates
revenue by selling ads to advertisers, which ads Yellow Pages produces and publishes
electronically. Because consumers access the advertising for free, all of Yellow Pages’s
revenue comes from advertisers. The ads are produced and published electronically by
Yellow Pages’s order fulfillment group within the operations department.
Plaintiff was employed by Yellow Pages and its predecessor from April 2004 to
January 2007. During her employment, plaintiff held the title of senior product manager
and her responsibilities included the toolbar on the Yellowpages.com website, managing
an animated website demo, and developing the Yellowpages.com channel on AT&T’s U-
2
verse television product. Plaintiff worked independently with little direct supervision,
and was regularly required to exercise discretion and independent judgment.
The work plaintiff performed required her to “build, maintain, and improve the
product, namely the websites smartpages.com and yellowpages.com.” Specifically, she
was involved in the planning, building, testing of and reporting on the success of the live
product, which tasks included building product road maps, documenting requirements,
creating presentations for senior management about products, providing training for and
information to the sales teams about the products and relaying information to third-party
vendors who contributed to the products. After she received her assignment from senior
management, she would develop a plan for building the product, including determining
how it was going to be built, who was going to be involved in building it, who would
provide input for the product, whether the product was working or was successful, and
how to coordinate all the different aspects of building the products. Once plaintiff had
developed an idea for a product, she would present a product-requirements document to
senior staff at their weekly meeting, which the staff would review and either approve or
disapprove moving forward with the project. From that point, she was responsible for
presenting weekly updates to the staff so it could make decisions as issues arose. The
majority of her workload involved working on these tasks.
Depending on a class member’s job title, job group, and assignment, class
members performed many different duties, including the following: Marketing: Some
class members spent time marketing Yellow Pages’s advertisement products, such as
developing contests and incentives for sales personnel; other class members spent time
marketing the business of Yellow Pages’s customers. Creating And Improving Tools
Used By Other Company Employees To Produce Advertisements: Some class members
spent time creating, designing, and developing technological tools for the company; these
tools were used by other company employees, including employees who produced the
electronic advertisements. Creating Tools Used By The Company To Manage Its
Business: Class members created, developed, and improved the tools used internally by
the company to manage its business, including tools used for data management and to
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educate sales representatives. Creating Yellowpages.com’s Advertiser Portal: Some
employees worked on the company’s advertiser portal, which provides various
administrative functions for Yellowpages.com’s advertiser customers, including the
abilities to pay bills, manage listings, and view performance reports. Pricing: Some
class members worked with Yellowpages.com’s pricing group to advise the company on
the pricing of advertising units. Promoting Yellow Pages With Consumers In The
Marketplace: Some class members worked on consumer-facing tools to promote the
Company in the marketplace, such as through the Yellowpages.com website and mobile
applications. Conducting Sales and Performance Analysis: Some class members
supported Yellow Pages by analyzing data on company sales or the performance of
company products; depending on the class member, this analysis took a variety of forms,
ranging from conducting focus groups of sales and marketing personnel to analyzing
company sales and performance figures. Conducting Market Research: Some class
members analyzed market data to evaluate trends, as well as understand customer needs
and user behavior. Developing And Recommending Company Strategy: Some class
members were responsible for developing and defining the company’s strategy on
different company products, including recommending and improving company products
and initiatives. Representing the Company Vis-á-vis Outside Vendors: Some class
members interacted with outside vendors on behalf of the company, including
determining when to use outside vendors, evaluating vendor proposals, and negotiating
deals. Leading, Training, And Supervising Company Employees: Some class members
had leadership responsibilities and spent time leading, training, and directing the work of
other company employees. Developing Company Policies: Some class members
engaged in setting company policy (e.g., sales policies and practices, style guides) in an
effort to help Yellow Pages achieve their goals. Functioning In an Executive Role: Some
class members were responsible for the overall management of a company product line
and were akin to a chief executive officer of that line. Managing Complex Company
Projects: Some class members spent time managing company projects through the
lifecycle of the project, including initiation, design, development, testing, and launch.
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Yellow Pages submissions included evidence that at least some, if not most, of the
class members performed office, non manual work, performed work related to
management policies or business operations, regularly exercised independent discretion,
and worked on specialized tools under only general supervision.
B. Plaintiff’s Evidence
In response to Yellow Pages’s motion to decertify, plaintiff submitted evidence
that was intended to show that all of the employees holding the job titles embraced within
the class definition were “production” workers. Her submission included two charts with
quotations from Yellow Pages’s job descriptions, quotations from certain of Yellow
Pages’s declarations in support of the motion to decertify, and quotations from the
depositions of Yellow Pages’s designated persons most qualified. The job description
excerpts contained multiple references to “products” such as “websites and online
products,” including “icons and ad banners,” as did the excerpts from Yellow Pages’s
declarations. In addition, one of Yellow Pages’s persons most qualified deponents
referred to Yellowpages.com, LLC as a “factory” that built electronic “products.”
Specifically, Yellow Pages’s person designated most qualified to testify, Deric Wong,
testified that Yellowpages.com, LLC was considered a “factory” which had “a sales arm
that actually [sold] the advertising, the Advertising Solutions” and that Yellowpages.com,
LLC was “not making things in [its] factory that you [could] drop on your foot, these
[were] products that go on a computer website. . . .” The two charts of quotations were
supported by copies of the Yellow Pages’s job descriptions, the declarations of its
witnesses, and the portions of the deposition transcripts of the person designated most
qualified to testify.
PROCEDURAL BACKGROUND
Plaintiff filed a class action complaint in February 2008, alleging that she and
other similarly situated Yellow Pages’s employees were misclassified as exempt
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employees and, as a result, denied, inter alia, overtime compensation and meal and rest
periods. The parties engaged in discovery from December 2008 to February 2010. In
March 2010, plaintiff filed a motion for class certification. The trial court denied the
motion without prejudice, but allowed plaintiff to conduct further discovery.
Plaintiff renewed her motion for class certification in February 2012. She defined
the class as follows: “PRODUCTION EMPLOYEES are defined as: all employees who
produced, created, generated, crafted, refined, tested, contributed to or built the electronic
products in California for defendants . . . who are not: 1. Paid on a commission basis; or,
2. computer programmers; or, 3. In one of the ‘recognized professions’ of Wage Order
4-2001, section 1(A)(3); or 4. Those who supervise two or more other employees and
have a monthly salary twice California’s minimum wage for full-time employment.”
In May 2012, the trial court certified the class as defined by plaintiff, without
prejudice to a subsequent motion to decertify. Following certification, the parties began
the process of developing a class member mailing list. The parties initially generated a
class list identifying 108 job titles and 306 employees. After further work to refine the
list, a final list with 21 job titles, including approximately 172 employees, was generated.
Based on the final class list, the trial court entered an amended class certification
order that defined the class as follows:
“The Class to be certified is defined as: All California PRODUCTION
EMPLOYEES who performed work for [Yellowpages.com, LLC’s predecessor] from
February 2004 to July 2005 and/or performed work for Yellowpages.com, Inc. from
January 2005 to the present who were designated as exempt at any time within four years
of the date of the filing of this complaint. [¶] PRODUCTION EMPLOYEES are defined
as: all employees who produced, created, generated, crafted, refined, tested, contributed
to, or built the electronic products in California for defendants . . . who are not: [¶] “1.
paid on a commission basis; or [¶] 2. computer programmers; or [¶] 3. in one of the
‘recognized professions’ of Wage Order 4-2—1, section 1(A)(3); or [¶] 4. Those who
supervise two or more other employees and have a monthly salary twice California’s
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minimum wage for full-time employment; and who have or formerly had one or more of
the following job titles:
Senior Product Manager, Product Manager, Director Product Management,
Associate Director Product Management, Associate Director Operations Delivery,
Program Manager, Senior Human Factors Engineer, Channel Manager, Art Director,
Director Product Strategy, Senior Writer, Editor, Lead Program Manager, Senior
Information Architect, Director Earn Per Call Products, Director YP Clicks, Lead Project
Manager, Manager Display Products, Product Campaign Manager, Senior Copy Writer,
and Senior Editor.”
In March 2013, Yellow Pages filed a motion to decertify the class. Plaintiff
thereafter filed a motion for summary adjudication of Yellow Pages’s affirmative defense
that the class members were all properly classified as exempt. Plaintiff also filed a
motion to amend the class definition to exclude four of the 21 job titles on which the
class definition was based.
In May 2013, the trial court issued a tentative ruling granting Yellow Pages’s
motion to decertify, denying plaintiff’s motion to amend the class definition, and taking
plaintiff’s motion for summary adjudication off calendar. Following a hearing on the
motions, the trial court adopted its tentative ruling as the ruling of the court and directed
Yellow Pages to prepare formal orders in accordance with its ruling. Plaintiff filed a
timely notice of appeal from the orders decertifying the class and denying the motion to
amend the class definition.
DISCUSSION
A. Standard of Review
Our Supreme Court has outlined the class action procedure as follows: “Code of
Civil Procedure section 382 authorizes class actions ‘when the question is one of a
common or general interest, of many persons, or when the parties are numerous, and it is
impracticable to bring them all before the court . . . .’ (Code Civ. Proc., § 382.) A trial
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court is generally afforded great latitude in granting or denying class certification, and we
normally review a ruling on certification for an abuse of discretion. (Sav-On Drug
Stores, Inc. v. Superior Court (2004) 34 Cal. 4th 319, 326-327 [17 Cal. Rptr. 3d 906, 96
P.3d 194] (Sav-On Drug Stores).) We do not apply this deferential standard of review if
the trial court has evaluated class certification using improper criteria or an incorrect
legal analysis: ‘[A] trial court ruling supported by substantial evidence generally will not
be disturbed “unless (1) improper criteria were used [citation]; or (2) erroneous legal
assumptions were made . . . .”’ (Linder v. Thrifty Oil Co. (2000) 23 Cal. 4th 429, 435-436
[97 Cal. Rptr. 2d 179, 2 P.3d 27] (Linder); accord, Gattuso v. Harte-Hanks Shoppers, Inc.
(2007) 42 Cal. 4th 554, 575-576 [67 Cal. Rptr. 3d 468, 169 P.3d 889]; Sav-On Drug Stores,
supra, 34 Cal.4th at pp. 326-327; see Bartold v. Glendale Federal Bank (2000) 81
Cal. App. 4th 816, 828-829 [97 Cal. Rptr. 2d 226] [‘[i]f the trial court failed to follow the
correct legal analysis when deciding whether to certify a class action, “an appellate court
is required to reverse . . . ‘even though there may be substantial evidence to support the
court’s order’”’].) The reviewing court ‘must examine the trial court’s reasons for
denying class certification.’ (Linder, supra, 23 Cal.4th at p. 436.) When reviewing an
order denying class certification, appellate courts ‘consider only the reasons cited by the
trial court for the denial, and ignore other reasons that might support denial.’ (Bufil v.
Dollar Financial Group, Inc. (2008) 162 Cal. App. 4th 1193, 1205 [76 Cal. Rptr. 3d 804].)”
(Jaimez v. Daiohs USA, Inc. (2010) 181 Cal. App. 4th 1286, 1297-1298.)
B. Legal Principles
1. Class Action Procedure
Our Supreme Court has said, “Drawing on the language of Code of Civil
Procedure section 382 and federal precedent, we have articulated clear requirements for
the certification of a class. The party advocating class treatment must demonstrate the
existence of an ascertainable and sufficiently numerous class, a well-defined community
of interest, and substantial benefits from certification that render proceeding as a class
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superior to the alternatives. (Code Civ. Proc., § 382; Fireside Bank [v. Superior Court
(2007) 40 Cal. 4th 1069,] 1089 (Fireside Bank); Linder[, supra,] 23 Cal.4th [at p.] 435 [97
Cal. Rptr. 2d 179, 2 P.3d 27]; City of San Jose [v. Superior Court (1974) 12 Cal. 3d 442],
459.) ‘In turn, the “community of interest requirement embodies three factors: (1)
predominant common questions of law or fact; (2) class representatives with claims or
defenses typical of the class; and (3) class representatives who can adequately represent
the class.”’ (Fireside Bank, at p. 1089, quoting Richmond v. Dart Industries, Inc. (1981)
29 Cal. 3d 462, 470 [174 Cal. Rptr. 515, 629 P.2d 23].)” (Brinker Restaurant Corp. v.
Superior Court (2012) 53 Cal. 4th 1004, 1021 (Brinker).)
The Supreme Court has observed that the class action procedure is based on
equitable principles. “‘The class action is a product of the court of equity—codified in
section 382 of the Code of Civil Procedure. It rests on considerations of necessity and
convenience, adopted to prevent a failure of justice.’” (Fireside Bank, supra, 40 Cal.4th
at p. 1078) “‘The certification question is “essentially a procedural one that does not ask
whether an action is legally or factually meritorious.” [Citation.] A trial court ruling on a
certification motion determines “whether . . . the issues which may be jointly tried, when
compared with those requiring separate adjudication, are so numerous or substantial that
the maintenance of a class action would be advantageous to the judicial process and to
the litigants.” [Citations.]’ (Sav-On Drug Stores, supra, 34 Cal.4th at p. 326.)” (Lopez
v. Brown (2013) 217 Cal. App. 4th 1114, 1126.)
2. Wage and Hour Rules
While this matter was being litigated in the trial court, the California Supreme
Court issued an opinion in Harris v. Superior Court (2011) 53 Cal. 4th 170 (Harris),
which opinion explained in detail the “administrative exemption” that was at issue in the
trial court on Yellow Pages’s motion to decertify. The issue in Harris was whether,
9
under newly promulgated Wage Order 4-2001,1 the Court of Appeal had properly applied
the administrative exemption by using the so-called “administrative /production worker
dichotomy2” test. The court began its analysis by reviewing the historical background of
1
Wage Order 4-2001, which is codified in Title 8 of the California Code of
Regulations section 11040, provides in pertinent part: “1. Applicability of Order[.] This
order shall apply to all persons employed in professional, technical, clerical, mechanical,
and similar occupations whether paid on a time, piece rate, commission, or other basis,
except that: [¶] (A) Provisions of sections 3 through 12 [(governing, e.g., hours and
days of work, minimum wages and rest periods)] shall not apply to persons employed in
administrative, executive, or professional capacities. The following requirements shall
apply in determining whether an employee's duties meet the test to qualify for an
exemption from those sections: (1) Executive Exemption . . . [¶] . . . [¶] (2)
Administrative Exemption[.] A person employed in an administrative capacity means
any employee: (a) Whose duties and responsibilities involve either: (I) The
performance of office or non-manual work directly related to management policies or
general business operations of his/her employer or his employer's customers; or (II) the
performance of functions in the administration of a school system . . . ; and (b) Who
customarily and regularly exercises discretion and independent judgment; and (c) Who
regularly and directly assists a proprietor, or an employee employed in a bona fide
executive or administrative capacity (as such terms are defined for purposes of this
section); or (d) Who performs under only general supervision work along specialized or
technical lines requiring special training, experience, or knowledge; or (e) Who executes
under only general supervision special assignments and tasks; and (f) Who is primarily
engaged in duties that meet the test of the exemption. The activities constituting exempt
work and non-exempt work shall be construed in the same manner as such terms are
construed in the following regulations under the Fair Labor Standards Act effective as of
the date of this order: 29 C.F.R. Sections 541.201-205, 541.207-208, 541.210, and
541.215. Exempt work shall include, for example, all work that is directly and closely
related to exempt work and work which is properly viewed as a means for carrying out
exempt functions. The work actually performed by the employee during the course of the
workweek must, first and foremost, be examined and the amount of time the employee
spends on such work, together with the employer's realistic expectations and the realistic
requirements of the job, shall be considered in determining whether the employee
satisfies this requirement. (g) Such employee must also earn a monthly salary equivalent
to no less than two . . . times the state minimum wage for full-time employment. . . .”
2
“In basic terms, the administrative/production worker dichotomy distinguishes
between administrative employees who are primarily engaged in ‘“administering the
business affairs of the enterprise”’ and production-level employees whose ‘“primary duty
is producing the commodity or commodities, whether goods or services, that the
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Wage Order 4-2001. It said, “[In 1999,] the Legislature passed the ‘Eight-Hour-Day
Restoration and Workplace Flexibility Act of 1999.’ (Stats. 1999, ch. 134, § 1, p. 1820,
adding and amending provisions of Lab. Code, § 500 et seq.) The act amended Labor
Code section 510, which provides that a California employee is entitled to overtime pay
for work in excess of eight hours in one workday or 40 hours in one week. (Lab. Code, §
510, subd. (a).) However, Labor Code section 515, subdivision (a), added by the act,
exempts from overtime compensation ‘executive, administrative, and professional
employees’ whose primary duties (footnote omitted) ‘meet the test of the exemption,’
who ‘regularly exercise[] discretion and independent judgment in performing those
duties’ and who earn a monthly salary at least twice the state minimum wage for full-time
employees. (Lab. Code, § 515, subd. (a).) [¶] Under the statute then, to qualify as
‘administrative,’ employees must (1) be paid at a certain level, (2) their work must be
administrative, (3) their primary duties must involve that administrative work, and (4)
they must discharge those primary duties by regularly exercising independent judgment
and discretion.” (Harris, supra, 53 Cal.4th at pp. 177-178.)
The court in Harris, supra, 53 Cal. 4th 170, next described the interplay between
state and federal law in interpreting and applying the administrative exemption. “Like its
predecessor, Wage Order 4-2001 exempts ‘persons employed in administrative,
executive, or professional capacities.’ (Wage Order 4-2001, subd. 1(A).) Unlike its
predecessor, subdivision 1(A)(2) of the new wage order describes the administrative
exemption in some detail. It provides, in part, that persons are employed in an
administrative capacity if their duties and responsibilities involve office or nonmanual
work ‘directly related to management policies or general business operations of [their]
employer or [the] employer’s customers.’ (Wage Order 4-2001, subd. 1(A)(2)(a)(i),
italics added.) [¶] Federal Regulations former part 541.205 (2000) is one of the
regulations incorporated in Wage Order 4-2001, subdivision 1(A)(2)(f). (Footnote
omitted.) That regulation defined the italicized phrase above. It is this ‘directly related’
enterprise exists to produce and market.” [Citation.]’” (Harris, supra, 53 Cal.4th at p.
183.)
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phrase that distinguishes between ‘administrative operations’ and ‘production’ or ‘sales’
work. (Fed. Regs. § 541.205(a) (2000).) [¶] Parsing the language of the regulation
reveals that work qualifies as ‘administrative when it is ‘directly related’ to management
policies or general business operations. Work qualifies as ‘directly related’ if it satisfies
two components. First, it must be qualitatively administrative. Second, quantitatively, it
must be of substantial importance to the management or operations of the business. Both
components must be satisfied before work can be considered ‘directly related’ to
management policies or general business operations in order to meet the test of the
exemption. (Fed. Regs. § 541.205(a) (2000).) [¶] The regulation goes on to further
explicate both components. Federal Regulations former part 541.205(b) (2000) discusses
the qualitative requirement that the work must be administrative in nature. It explains
that administrative operations include work done by ‘white collar’ employees engaged in
servicing a business. Such servicing may include, . . . advising management, planning,
negotiating, and representing the company. Federal Regulations former part 541.205(c)
(2000) relates to the quantitative component that tests whether work is of ‘substantial
importance’ to management policy or general business operations. [¶] Read together, the
applicable Labor Code statutes, wage orders, and incorporated federal regulations now
provide an explicit and extensive framework for analyzing the administrative
exemption.” (Harris, supra, 53 Cal.4th at pp. 180-182.)
The court in Harris, supra, 53 Cal. 4th 170 then examined whether the appropriate
wage and hour principles had been applied correctly by the Court of Appeal in that case,
including whether that court’s use of the “administrative/production worker dichotomy”
test was appropriate in light of newly promulgated Wage Order 4-2001. The court
concluded that “the Court of Appeal improperly applied the administrative/production
worker dichotomy as a dispositive test. [¶] The essence of our holding is that, in
resolving whether work qualifies as administrative, courts must consider the particular
facts before them and apply the language of the statutes and wage orders at issue.” (Id.
at p. 190, italics added.) The court in Harris, however, qualified its holding by stating
12
that “[w]e do not hold that the administrative/production worker dichotomy . . . can never
be used as an analytical tool.” (Ibid.)
C. Commonality Analysis
In ruling on Yellow Pages’s motion to decertify, the trial court concluded that
common issues did not predominate over those which could be determined on a
classwide basis. According to the trial court, “the class of 21 job titles (or even plaintiff’s
revised list of only 17 job titles) raises individualized job-specific and person-specific
factual issues necessary to determining whether or not there is liability on the various
elements of the administrative exemption. The class includes a wide variety of skills
necessary for the creation and formulation of new commercially useful intellectual
property, including effective visual presentation of potential customer content, data
analysis for search optimization for customer (advertiser) efficient use of scarce
advertising dollars, product design to avoid user (customer) frustration, analysis of
product performance, market research, strategic planning for defendants’ own business
advantage and a whole host of dissimilar duties. While defendants appear to have
persuasive arguments factually that many of these specific jobs involve matters of
substantial importance to defendants’ own business, to the business of its customers or to
both, the analysis is necessarily job-specific and often person-specific.” As explained
below, based on the evidence in the record on the motion to decertify, we conclude that
the trial court, applying the correct legal standard, did not abuse its discretion in
determining that common factual issues did not predominate.
“‘A class may be certified when common questions of law and fact predominate
over individualized questions. As a general rule if the defendant’s liability can be
determined by facts common to all members of the class, a class will be certified even if
the members must individually prove their damages. . . . [T]o determine whether
common questions of fact predominate the trial court must examine the issues framed by
the pleadings and the law applicable to the causes of action alleged.’ (Hicks v. Kaufman
& Broad Home Corp. (2001) 89 Cal. App. 4th 908, 916 [107 Cal. Rptr. 2d 761], fns.
13
omitted.) A class action ‘“will not be permitted . . . where there are diverse factual issues
to be resolved, even though there may be many common questions of law.”’ (Block v.
Major League Baseball (1998) 65 Cal. App. 4th 538, 542 [76 Cal. Rptr. 2d 567].) ‘“The
burden is on the party seeking certification to establish the existence of both an
ascertainable class and a well-defined community of interest among the class members.”’
(Lockheed Martin Corp. v. Superior Court (2003) 29 Cal. 4th 1096, 1104 [131
Cal. Rptr. 2d 1, 63 P.3d 913][(Lockheed)].)” (Ali v. U.S.A. Cab Ltd. (2009) 176
Cal. App. 4th 1333, 1347.) In examining whether common issues of law or fact
predominate, we must consider the plaintiff’s legal theory of liability (Sav-On Drug
Stores, supra, 34 Cal.4th at pp. 326-327), any affirmative defenses that may defeat class
certification by raising issues specific to each potential class member, and whether the
issues presented by that defense predominate over common issues. (Walsh v. IKON
Office Solutions, Inc. (2007) 148 Cal. App. 4th 1440, 1450.)
In reviewing a trial court’s determination on the commonality element, “‘we must
consider whether the record contains substantial evidence to support the trial court’s
predominance finding, as a certification ruling not supported by substantial evidence
cannot stand.’ (Lockheed, supra, 29 Cal.4th at p. 1106.) But, ‘[w]here a certification
order turns on inferences to be drawn from the facts, “‘the reviewing court has no
authority to substitute its decision for that of the trial court.’”’ (Massachusetts Mutual
Life Ins. Co. v. Superior Court (2002) 97 Cal. App. 4th 1282, 1287 [119 Cal. Rptr. 2d 190];
accord, Walker v. Superior Court (1991) 53 Cal. 3d 257, 272 [279 Cal. Rptr. 576, 807 P.2d
418].)” (Sav-On, supra 34 Cal.4th at p. 328.)
Plaintiff argues that the trial court erred when it decertified the class. According
to plaintiff, because the trial court ignored her factual submissions and made
impermissible merits-based determinations at the class certification stage, it applied an
incorrect legal standard to the certification question before it. Plaintiff also contends that
there was an overriding common issue of law that warranted class treatment of her
claims—i.e., whether production workers can ever be exempt under state wage and hour
laws.
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Contrary to plaintiff’s assertion, the trial court did not make merits-based
determinations or ignore plaintiff’s evidence in making its decertification decision.
Rather, it was plaintiff who made merits-based submissions and arguments in opposing
the decertification motion. According to plaintiff, her evidence established, as a factual
matter, that all of the workers in the various job titles embraced within the class definition
were production workers, notwithstanding Yellow Pages’s substantial evidence to the
contrary.
Plaintiff’s merits-based assertion ignores the essential question framed by
plaintiff’s class definition and Yellow Pages’s affirmative defense based on the
administrative exemption—whether the class members’ status as alleged production
workers could be determined on a classwide basis using common proof. In ruling on the
decertification motion, the trial court concluded, based on the parties’ respective
evidentiary submissions, that the Yellow Pages’s liability to the class could not be
adjudicated on a classwide basis using proof common to each class member because,
under the fact-based analysis required under Harris, supra, 53 Cal. 4th 170, the
determination of a given class member’s exempt status would require individualized
proof.
Although plaintiff presented conclusory evidence that the class members were
primarily engaged in “production” work, Yellow Pages presented specific and substantial
evidence to the contrary, evidence from which the trial court could have reasonably
concluded that individual factual issues predominated over those that could be resolved
on a classwide basis. As the declarations submitted by Yellow Pages demonstrated, the
products on which the class members worked were not the actual advertisements sold to
businesses—i.e., the commodity that the enterprise existed to produce and market—but
rather were the technological tools used by the sales employees who sold the advertising
and who had been classified as nonexempt. In addition, that evidence showed that many
of the class members did not directly work on those technological tools, but instead spent
time on other unrelated tasks, such as developing contests and incentives for sales staff,
developing pricing for the advertising units, and analyzing sales and performance. That
15
evidence was sufficient to support the trial court’s conclusion that individualized proof on
a job-by-job or employee-by-employee basis would be necessary to determine whether a
given class member was a production worker or an administrative worker. Because the
trial court’s findings on the commonality element were supported by substantial
evidence, we have no authority to substitute our decision for that of the trial court.
Instead, we must affirm the order decertifying the class because plaintiff has failed to
demonstrate that the trial court abused its discretion in making that order.
In reaching this conclusion, we reject plaintiff’s assertion that there was an
overriding common legal issue concerning whether production workers can ever be
exempt from state wage and hour requirements. As noted above, that issue assumes a
fact that was not and could not have been decided at the class certification stage—
whether some or all of the class members were misclassified as exempt when, in fact,
they were nonexempt production workers. Thus, the issue as framed by plaintiff could
only be common to all class members if and when a finder of fact made a preliminary
determination that some or all of the class members were production workers under
Wage Order 4-2001. Given that no such liability-determinative finding was or could
have been made, the issue framed by plaintiff merely begged the central factual question
concerning Yellow Pages’s liability to the class and therefore did not justify class
certification under Brinker, supra, 53 Cal. 4th 1004 or the Court of Appeal decisions
decided after Brinker upon which plaintiff relies
For the first time in either the trial court or on appeal, plaintiff argues in her reply
brief that the trial court impermissibly shifted the burden of proof on the decertification
motion and ignored Yellow Pages’s failure to submit evidence on the criteria set forth in
Eicher v. Advanced Business Integrators, Inc. (2007) 151 Cal. App. 4th 1363, 1371—
whether the employee performs management functions or is involved in general business
operations, customarily exercises discretion and independent judgment, does specialized
work under general supervision, meets the exemption at least 50 percent of the time, and
earns more than twice the minimum wage. Because plaintiff failed to raise this
contention in either the trial court or in her opening brief, she has either forfeited it on
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appeal or otherwise improperly raised it in her reply. (Keener v. Jeld-Wen, Inc. (2009) 46
Cal. 4th 247, 264-265 [forfeiture]; Rose v. Bank of America, N.A. (2013) 57 Cal. 4th 390,
399, fn. 9 [matters improperly raised in reply brief need not be addressed].) Moreover, as
set forth above, Yellow Pages submitted declaration testimony on most, if not all, of the
elements of the administrative exemption, evidence from which the trial court reasonably
concluded that the issues to be tried separately predominated over the issues that could be
resolved using proof common to each class member. On the commonality issue, Yellow
Pages was not required at the certification stage to meet its burden of proof on all of the
elements of the administrative exemption as plaintiff now belatedly contends. Instead, it
was required to show only that the factual issues subject to common proof did not
predominate over those to be tried separately. The trial court found that Yellow Pages
had made the required showing, and substantial evidence supported that finding.
D. Motion to Amend Class Definition
Plaintiff contends that the trial court abused its discretion when it denied her
motion for leave to amend the class definition by eliminating four of the 21 job titles
embraced within the class definition. Yellow Pages counters that the order denying leave
to amend is a nonappealable order and that, in any event, plaintiff has failed to show
either an abuse of discretion or prejudice from the order denying leave to amend.
Assuming, without deciding, that the order denying leave to amend is appealable
because it affects the appealable decertification order, we conclude that plaintiff has
failed to demonstrate that she was prejudiced by the order. (Kim v. Konad USA
Distribution, Inc. (2014) 226 Cal. App. 4th 1336, 1352 [“‘[i]t is the appellant’s burden to
affirmatively demonstrate reversible error.’ (California Pines Property Owners Assn. v.
Pedotti (2012) 206 Cal. App. 4th 384, 392 [141 Cal. Rptr. 3d 793].) ‘“No form of civil trial
error justifies reversal and retrial, with its attendant expense and possible loss of
witnesses, where in light of the entire record, there was no actual prejudice to the
appealing party.” [Citation.] Accordingly, errors in civil trials require that we examine
‘each individual case to determine whether prejudice actually occurred in light of the
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entire record.”’ (Cassim v. Allstate Ins. Co. (2004) 33 Cal. 4th 780, 801-802 [16
Cal. Rptr. 3d 374, 94 P.3d 513].)”].) In its ruling on the decertification order, the trial
court ruled that the class list of 21 job titles “or even plaintiff’s revised list of only 17 job
titles,” raised individualized factual issues concerning whether class members were
administratively exempt. Based on that finding, it is clear that the outcome on the
decertification motion would have been the same even if the trial court had allowed
plaintiff to reduce the number of job titles in the class definition to 17. Because
plaintiff’s appeal from the order denying leave to amend does not
explain how she would have obtained a different outcome in light of the trial court’s
finding concerning the proposed class with 17 job titles, she has failed to demonstrate the
prejudice required to reverse the order denying leave to amend the class definition.
DISPOSITION
The orders decertifying the class and denying plaintiff leave to amend the class
definition are affirmed. Yellow Pages is awarded costs on appeal.
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
MOSK, J.
We concur:
TURNER, P. J.
KRIEGLER, J.
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