Opinion
H044068
09-26-2019
LISA BLEVINS, Plaintiff and Appellant, v. CITY OF SAN JOSE, Defendant and Respondent.
NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115. (Santa Clara County Super. Ct. No. 1-14-CV-270060)
Plaintiff Lisa Blevins filed a putative class action against respondent City of San Jose, alleging that the City intentionally misidentified her and other employees as contract or temporary employees instead of classified civil service employees, which reduced certain employment benefits, including retirement benefits. Plaintiff appeals from the denial of her class certification motion, arguing that the trial court erred by finding that individual factual issues predominate over common ones and by finding that a class action would not be a superior alternative to individual lawsuits. For the reasons stated here, we will affirm the order denying class certification.
I. BACKGROUND
A. CITY LAWS GOVERNING EMPLOYEE CLASSIFICATIONS
The San Jose City Charter (Charter) describes three categories of employees: classified employees, unclassified employees, and contract employees. Classified and unclassified employees make up the City's civil service system.
Classified employees are defined as all persons employed in the City's civil service who are not unclassified workers. The category of unclassified employees includes several subcategories of workers including, as relevant here, "temporary" employees (which, in turn, has two types). One type of temporary worker includes persons "temporarily employed to make or conduct a special inquiry, investigation, examination or installation, or to render professional, scientific or technical services of an occasional or exceptional character." Those workers are limited to a term of six months "for each special inquiry, investigation, examination, installation or particular service unless an extension is approved by the Civil Service Commission." The other type of temporary worker includes persons "temporarily employed to fill positions for a period of time not to exceed two (2) years, where there exists a need to perform duties of a temporary nature or where duties may be required on an intermittent basis."
The third category of City employees—the contract employee—is not part of the civil service system. The Charter states: "the Council may ... authorize or direct the execution of contracts between the City and any ... person, for the conduct or making of any special study, inquiry, investigation or examination, or for the preparing or doing of any special or particular services or work, for or on behalf of the City." The Charter further states: "all persons with whom such contracts are made shall be deemed, for Civil Service purposes, to be independent contractors and not officers or employees within the Civil Service of the City."
The Charter requires the City to "provide, by ordinance or ordinances, for the creation, establishment and maintenance of a retirement plan or plans for all officers and employees of the City." But the "plan or plans need not be the same for all officers and employees." The City has established two retirement plans relevant to this appeal: the federated city employees retirement system for classified civil service employees, and the "PTC deferred compensation plan" for, among others, temporary and contract employees. (A third plan for police and firefighters is not relevant here.) It is undisputed that retirement benefits under the classified civil service employee retirement plan are much more generous than those for temporary and contract employees.
B. PLAINTIFF'S EMPLOYMENT WITH THE CITY
Plaintiff was first hired by the City in 1994 as an Activity Specialist II at the Grace Baptist Community Center (Grace), which provides therapeutic services and activities for adults with severe mental illness or developmental disabilities. Plaintiff's job description involved, among other things, planning outings and events, training volunteers, and writing grants. After a few years, plaintiff was promoted to Activity Specialist III, which entailed managerial and budgeting duties at Grace.
Between 1994 and 2005, plaintiff signed annual employment contracts with the City. The contracts referred to her as a contract employee. They stated she was an employee for purposes of income taxes and workers' compensation laws. But the contracts also provided that plaintiff was "an independent contractor for purposes of the Civil Service System." They specifically excluded her from participation in the classified civil service employee retirement plan and stated that she was "deemed an employee of the City of San Jose for purposes of the City's deferred compensation plan" for temporary and contract employees. (Capitalization omitted.) The contracts incorporated several exhibits by reference. One noted the City's desire to "obtain assistance in providing services to City's director [of Parks, Recreation, and Neighborhood Services] that are not of a permanent nature and are not currently being performed by any person holding a Civil Service position." (Capitalization omitted.) Another listed her job duties. And a third explained the deferred compensation retirement plan.
The City notified plaintiff by letter in 2006 of its intention to "cease contracting for employment with individuals for the programs" at Grace. The City offered plaintiff the position of "Therapeutic Activity Supervisor ... as a temporary unclassified employee." The letter explained that over the "next six months the City [would] review the work of all of the individuals working in the programs housed at Grace" and then would "create a structure that will enable these positions to fit within the City's classification and compensation plans." Plaintiff signed under a sentence that read: "I, Lisa Blevins, accept employment as a temporary unclassified employee performing Therapeutic Activity Supervisor work beginning July 1, 2006."
Plaintiff was converted to a full-time classified civil service employee just over one year after accepting the temporary employee position. She continued in that classification until she retired in 2014.
C. COMPLAINT AND MOTION FOR CLASS CERTIFICATION
The operative first amended complaint alleged the City had engaged in an unlawful scheme to mischaracterize a class of present and past employees as contract or temporary employees to prevent them from receiving all employment benefits they were owed. The complaint lists five causes of action: a request that the misclassification scheme be declared unlawful; a request to enjoin the City from maintaining "distorted records"; a request that the injunctive relief be mandatory and permanent; a request for an accounting to determine benefits owed to the class members; and unjust enrichment.
Plaintiff moved to certify a class of "[a]ll past and current employees of the City of San Jose who signed written employment agreements after January 1, 1988 which identified them as 'contract employees' or 'temporary employees.' " Plaintiff supported the motion with contracts from a few City employees who had also worked at Grace. The trial court found that plaintiff had satisfied several of the necessary requirements for class certification, but ultimately determined that individual factual issues predominate over common ones. The trial court reasoned that even if the City "engaged in an unlawful misclassification scheme, the Court will then need to examine the individual circumstances of each class member's employment to determine if that class member was misclassified as part of the scheme or whether [the City] had a proper basis for classifying the employee as a 'contract employee' or 'temporary employee.' " The court also found that a class action would not be superior to individual lawsuits because of the need to determine individual factual issues for each class member and also because plaintiff was "not seeking such a small recovery that she will not have an incentive to pursue this action on her own if the class is not certified."
II. DISCUSSION
A. STANDARD OF REVIEW
Code of Civil Procedure section 382 permits a class action "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." To obtain class certification, the class representative must show proof "(1) of a sufficiently numerous, ascertainable class, (2) of a well-defined community of interest, and (3) that certification will provide substantial benefits to litigants and the courts, i.e., that proceeding as a class is superior to other methods." (Fireside Bank v. Superior Court (2007) 40 Cal.4th 1069, 1089.) To satisfy the community of interest requirement, common questions of law or fact must predominate; the class representatives' claims or defenses must be typical of the class; and the class representative must be able to adequately represent the class. (Ibid.)
We review the trial court's class certification decision for abuse of discretion. (Sav-On Drug Stores, Inc. v. Superior Court (2004) 34 Cal.4th 319, 326.) We will generally not "disturb a trial court ruling on class certification which is supported by substantial evidence unless (1) improper criteria were used [citation]; or (2) erroneous legal assumptions were made." (Richmond v. Dart Industries, Inc. (1981) 29 Cal.3d 462, 470.) " 'Any valid pertinent reason stated [by the trial court] will be sufficient to uphold the order.' " (Linder v. Thrifty Oil Co. (2000) 23 Cal.4th 429, 436.)
Plaintiff argues that a de novo standard applies because the trial court's decision was based on improper criteria and rested on erroneous legal assumptions. But in its decision the trial court described a legal standard functionally identical to the statute, and then applied it to the facts of the case. Abuse of discretion review is therefore appropriate here.
B. PREDOMINANCE OF INDIVIDUAL ISSUES OF FACT
Plaintiff's chief complaint is that "the City engaged in a pattern and practice of deliberatively misclassifying employees as temporary or contract employees, thus denying them certain benefits." To determine whether that occurred, the trial court will first have to interpret how "contract employee" and "temporary employee" are defined in the Charter. The next step will involve determining whether each class member was accurately classified as a contract or temporary employee—or whether plaintiff's theory is correct that they should have been classified as full-time civil service employees. Plaintiff disagrees with the trial court's conclusion about how to complete that second step.
The Charter defines a temporary employee as one "temporarily employed to make or conduct a special inquiry, investigation, examination or installation" or "temporarily employed ... to perform duties of a temporary nature or where duties may be required on an intermittent basis," and defines a contract employee as an employee hired "for the conduct or making of any special study, inquiry, investigation or examination, or for the preparing or doing of any special or particular services or work, for or on behalf of the City."
The trial court found that determining whether class members were misclassified (and, by extension, whether the alleged practice exists) would require it to "examine the individual circumstances of each class member's employment." Plaintiff acknowledges that a "job-by-job analysis could be relevant" to that analysis, but argues it would not be necessary because the City's actions "can be proven through other direct and circumstantial evidence (e.g., internal documents discussing the scheme, testimony that there was an agreement to engage in the scheme)." (Underlining omitted.) Plaintiff contends the possibility that some as-yet-undiscovered smoking gun might prove the existence of the scheme is enough to certify the class because the "inquiry at the certification stage is 'limited to determining whether the plaintiff's theory of liability is amenable to class treatment and a court should not reach the merits of that theory.' " (Quoting Hall v. Rite Aid Corp. (2014) 226 Cal.App.4th 278, 292; underlining omitted.) But it was plaintiff's burden to demonstrate amenability to class treatment, and her speculation about other evidence did not meet that burden. The only evidence plaintiff submitted that might support existence of the scheme was the employment contracts.
Relying on the City's statement that it uses a form contract with contract employees, plaintiff argues that the trial court erred in finding the employment contracts will not have " 'sufficiently similar language' " such that findings about one contract would apply to all others. Though the general contract terms are form, the job duties of different employment positions are contained in a separate exhibit unique to each position. Those individual job descriptions will be significant in determining whether an employee is appropriately designated "contract" or "temporary."
Plaintiff contends that the existence of the alleged misclassification scheme can be shown by looking solely at the face of the contracts the proposed class members signed with the City. Plaintiff cites the example of a temporary employee who worked for more than two years, noting that the contract would violate the Charter's limitation on the duration of temporary employment. But plaintiff's proposed class is not limited to temporary employees; it also includes all contract employees. The Charter definition of contract employee does not contain a term limit.
Not all members of the proposed class had the same or even substantially similar job duties. The proposed class includes any City employee who was deemed a contract or temporary employee from 1988 onward. Though plaintiff provided contracts for Grace employees to support her motion, it is undisputed that the City's temporary and contract workforce includes individuals performing widely varied work. Potential class members could include electricians, tree trimmers, public art installers, information technology professionals, mental health providers, and any number of fields where a municipality might need assistance. The only method of determining the existence of the alleged scheme would be an employee-by-employee (or at least job-by-job) review. The need for individualized determinations supports the trial court's decision that individual factual issues predominate over common ones.
Even in cases where a proposed class shares a single job title, courts have affirmed class certification denials when variation within the duties cause individual issues to predominate. Dunbar v. Albertson's, Inc. (2006) 141 Cal.App.4th 1422 (Dunbar) is instructive. A grocery store manager brought a putative class action on the theory that the defendant grocery store erroneously classified him and other store managers as exempt employees and unlawfully withheld overtime pay. (Id. at p. 1424.) On appeal from the denial of class certification, plaintiff argued that determining whether the class members were exempt from overtime could be accomplished by a common inquiry of tasks completed by exemplar managers that could then be extrapolated to other class members. The appellate court affirmed the denial of class certification, because substantial evidence supported the conclusion that "findings as to one grocery manager could not reasonably be extrapolated to others given the variation in their work." (Id. at pp. 1431-1432.)
Plaintiff compares this case to others where courts granted class certification. (E.g., Jaimez v. Daiohs USA, Inc. (2010) 181 Cal.App.4th 1286, 1290; Hypolite v. Carleson (1975) 52 Cal.App.3d 566, 572.) But the crucial difference in those cases is that the class members were much more closely situated vis-à-vis job duties or other defining characteristics than plaintiff's proposed class here. For example, in Jaimez all class members were sales representatives for a single company, and the Hypolite class contained similarly situated minors challenging denial of the same type of government assistance.
Plaintiff points to cases where courts found class certification appropriate even though class members held varied positions. (E.g., Brinker Restaurant Corp. v. Superior Court (2012) 53 Cal.4th 1004, 1018 [wage and hour class action seeking compensation for meal and rest breaks for "cooks, stewards, buspersons, wait staff, host staff, and other hourly employees" of restaurant group owner]; Faulkinbury v. Boyd & Associates, Inc. (2013) 216 Cal.App.4th 220, 225-226 [wage and hour class action seeking compensation for meal and rest breaks for security guards, security guard supervisors, post commanders, and rovers who worked for a single security company], disapproved on another ground by Noel v Thrifty Payless, Inc. (2019) 7 Cal.5th 955, 986, fn. 15.) But those cases involved class members who held different positions within the same general field. Here plaintiff's proposed class broadly includes any temporary or contract employee doing any type of work in any type of field for the City.
Determining whether to grant class certification is a case-specific exercise. Many cases have affirmed the denial of class certification due to predominant individual factual issues despite class members' jobs being even more similar than those in the authorities plaintiff cites. (E.g., Dunbar, supra, 141 Cal.App.4th 1422 [grocery store managers]; Mies v. Sephora U.S.A., Inc. (2015) 234 Cal.App.4th 967, 971 [beauty product store managers]; Dailey v. Sears, Roebuck & Co. (2013) 214 Cal.App.4th 974, 979 [auto center store managers].) The trial court here considered the facts of the case before it, and we see no error in its conclusion that individual factual issues predominate over common ones.
C. CLASS ACTION VERSUS INDIVIDUAL ACTIONS
Plaintiff challenges the trial court's conclusion that a class action would not be superior to individual lawsuits. As plaintiff notes, the chief reason the court cited was that individual issues predominate over common ones. Plaintiff contests that finding, but we have already determined it is supported by substantial evidence.
Plaintiff also challenges the court's other stated reason—that plaintiff's potential individual recovery is substantial enough to provide an incentive to pursue the case individually. She argues that because the complaint requests only equitable relief, the trial court should not have considered her financial incentive. Although the relief requested is equitable, plaintiff would gain a considerable amount of additional retirement income if she prevails in her lawsuit. A trial court is not prohibited from considering a plaintiff's financial incentives; the authority plaintiff cites on this point merely observed "that the size of individual claims does not necessarily have a bearing on the consideration of judicial efficiency favoring class actions." (Bell v. Farmers Ins. Exchange (2004) 115 Cal.App.4th 715, 745.)
Plaintiff argues the trial court's decision could lead to inconsistent rulings and competing injunctions, and that the availability of defenses that would apply against all class members should have been weighed in favor of certifying the class action. The lack of common factual issues lessens the risk of inconsistent rulings and competing injunctions, because any future rulings or injunctions would be based on determinations related to specific employees or job types rather than to the proposed class as a whole. And even if certain factors support class certification, we review the trial court's decision for abuse of discretion. We are not permitted to substitute our judgment for that of the trial court. Given the lack of common factual issues, we find no abuse of discretion in the trial court's decision to deny class certification.
D. EFFECT OF DYNAMEX
In her reply brief, plaintiff argues that this case should be remanded for the trial court to consider whether class certification is appropriate in light of the new test for differentiating between employees and independent contractors announced in Dynamex Operations W. v. Superior Court (2018) 4 Cal.5th 903 (Dynamex). But that case concerned differentiating between employees and independent contractors for purposes of state law, whereas plaintiff's lawsuit seeks an interpretation of the San Jose City Charter's use of the terms "contract" and "temporary" employee. Even assuming the Dynamex decision is relevant to interpreting the Charter, it does not compel reversal since resolving this case as a class action would require an individualized review of widely varying jobs. The record supports that determination, which in turn supports the trial court's discretionary decision to deny certification.
III. DISPOSITION
The order denying class certification is affirmed.
/s/_________
Grover, J.
WE CONCUR:
/s/_________
Greenwood, P. J. /s/_________
Bamattre-Manoukian, J.