Opinion
NOT TO BE PUBLISHED
APPEAL from a judgment of the Superior Court of Los Angeles County No. BS100719. Wendell Mortimer, Jr., Judge.
Leonard Carder, Robert S. Remar and Jacob F. Rukeyser for Plaintiffs and Appellants.
Morrison & Foerster, Timothy F. Ryan, Tritia M. Murata and Miriam A. Vogel for Real Party in Interest Ralphs Grocery Company.
Judge of the Orange Superior Court, assigned by the Chief Justice pursuant to article VI, section 6 of the California Constitution.
BACKGROUND
The inability of the three major grocery chains in Southern California and the unions representing their workers to reach a new labor agreement led to a strike by members of the United Food and Commercial Workers (UFCW) against Vons markets, beginning October 11, 2003. Shortly thereafter, Ralphs and Albertsons locked out their Southern California grocery employees. The strike was eventually settled in February 2004, but the events of this dispute spawned multiple civil suits and criminal prosecutions. In most instances, the details of that litigation need not reviewed here.
TRIAL COURT LITIGATION
Numerous Ralphs and Albertsons employees who were locked out of their employment filed claims for unemployment insurance compensation with the Employment Development Department (EDD). The EDD concluded that these employees were ineligible for such benefits under the terms of Unemployment Insurance Code section 1262, which bars recovery by employees who have “left... work because of a trade dispute.” The EDD reasoned that all UFCW members, including the Ralphs and Albertsons employees, were responsible for their own unemployment because they ratified the strike action which ultimately led to the lockout.
All further undesignated statutory references are to the Unemployment Insurance Code.
Thousands of Ralphs employees then appealed the EDD’s denial of their applications for benefits. Those appeals were consolidated for hearing in a single proceeding before an Administrative Law Judge (ALJ). Following hearings held on July 20 and 21, 2004, the ALJ issued two separate, but identical, decisions in the cases of John Duran and Debra Bowen. No distinction was made between the cases of those two employees, nor between their situation and that of any of the other 4,000 claimants who were given notice of those hearings. The ALJ concluded in each of these decisions that “The claimants are ineligible for benefits under Section 1262 of the Code” for the period of the lockout, because “an individual is not eligible for unemployment compensation benefits, and no such benefit shall be payable, if the individual left work because of a trade dispute.” The ALJ concluded that, under the facts of this labor stoppage, the employees had struck the “first blow,” as that term has come to be used by the courts, by striking against Vons and were therefore ineligible for benefits.
In separate hearings held by the same ALJ on May 5 and 6, 2004, Albertsons employees had presented their appeal of the denial of their applications for benefits. The same analysis of the law and the same application of the “first blow” rule that were later used in the appeals brought by Ralphs employees also led here to a finding of ineligibility of the Albertsons employees for unemployment benefits.
The next step in the review process entailed a consolidated appeal by Duran and Brown to the California Unemployment Insurance Appeals Board (CUIAB). Although formal representation on behalf of a class consisting of all Ralphs employees had not been permitted by the CUIAB, the appellants nevertheless presented their appeal on behalf of all such persons. The decision of the ALJ was affirmed in a CUIAB opinion that traced the same legal and factual analysis as had the ALJ. Again, no distinction was made between the situations of Duran and Brown and any other employee who had been subject to the Ralphs lockout. The CUIAB decision noted: “Because multiple claimants employed by the employer are appealing their ineligibility from unemployment benefits, the Appeals Board has addressed all of their arguments in the plural sense in one decision.”
Once again, the CUIAB decision regarding the Ralphs employees followed by nine days a nearly identical decision affirming the ALJ’s denial of benefits for the Albertsons employees.
On December 12, 2005, Duran and Brown, together with two Albertsons employees (Gayle Tarkington and Joel Straub) filed a single petition for a writ of administrative mandamus in the Los Angeles Superior Court. The suit was styled as a class action on behalf of all employees similarly situated and named the CUIAB as respondent and Ralphs and Albertsons as real parties in interest.
Multiple objections to that petition were interposed in a series of demurrers filed separately on behalf of Ralphs and Albertsons. The first of those contentions to affect the litigation was the argument that the single petition improperly joined claims against the two grocery chains. After a series of hearings and extensive discussions among counsel and the court about the validity of this demurrer and about how the purported problem might be resolved, the trial court ruled: “There is a misjoinder of parties defendant. The defendant real parties in interest have been misjoined since there is no joint, several or alternative liability under Code of Civil Procedure section 379(a).”
At a subsequent hearing on a motion for reconsideration, the trial court responded to petitioners’ counsel’s inquiry about a resolution for this procedural problem: “I’m not here to give advice on how to practice law or how to plead, but I think you can keep alive one case under this number.... [a]nd go with another case which will probably get related to this.” This was done. Albertons was dropped as a party to the original petition and named as a real party in interest in a new petition seeking the same relief. The earlier case, which is the present lawsuit, continued against Ralphs.
As predicted by the trial judge, these two separate cases were treated as “related,” with simultaneous hearings held on subsequent attacks on the pleadings. The last of these demurrers resulted in the following written ruling: “Demurrer is sustained with 20 days leave to amend. The defined class is too broad. It should not include putative class members who are time-barred by the statute of limitations, those who did not pursue their administrative remedies, and those who dismissed their appeals to the appeals board. Only those who exhausted their administrative remedies and are not time-barred should be part of the class.” This order further noted that the newly-filed suit against Albertsons faced an additional hurdle regarding the statute of limitations. Other arguments by Ralphs about “ascertainability” and the “community of interest” of the putative class were not addressed in the foregoing ruling. Petitioners elected not to amend their pleading and submitted for the court’s signature an Order of Judgment of Dismissal, which was signed and entered on October 2, 2007.
APPELLATE LITIGATION
Appellate review of the dismissal of the claims of the Albertsons employees has now resulted in an opinion by Division One of this court in the case of Tarkington v. California Unemployment Ins. Appeals Bd. (2009) 172 Cal.App.4th 1494. Issuance of that opinion was shortly followed by several requests for the publication thereof, including one by counsel for the petitioners herein. The court then concluded that the Tarkington opinion should be certified for publication under the requirements of California Rules of Court rule 8.110(c). As such, the opinion is generally considered to constitute persuasive, but not binding, authority for this division of the court. (See People v. Yates (1977) 66 Cal.App.3d 874; La Com v. Pacific Gas & Elec. Co. (1955) 132 Cal.App.2d 114, 118.) In any event, we are in agreement with the analysis set forth in Tarkington and reach the same result here.
All counsel agree that only two of the three principal issues discussed in Tarkington are present here. Because this suit is the original pre-mitosis Superior Court action that was initiated with both Ralphs and Albertsons as real parties in interest, it did not face a challenge to the timeliness of its filing, as happened with the Albertsons suit, where the equitable tolling of the statute of limitations was extensively discussed and litigated. We are left here with two principal issues: (1) sufficiency of class action allegations, and (2) exhaustion of remedies. Analysis of those issues will be aided by a brief summary of the points of contention that have been advanced by these litigants as their dispute coursed through the unemployment compensation system. While the “first blow” rule has been consistently applied thus far, the employees have advanced many reasons why that should not be the case; to wit, the lockout was not instigated through any effort or decision of Ralphs’ unionized employees; the selective nature of the lockout, which exempted pharmacists, was unfair; and Ralphs permitted and encouraged employees to return to work using false identification. There has been no suggestion at any time that the “first blow” rule would be applied to less than all of Ralphs’ union members. If the arguments that have been advanced against that finding ultimately prevail, the “first blow” rule would presumably become entirely inapplicable; no one has ever suggested to the contrary.
Class Sufficiency
Our appellate courts have regularly discouraged trial courts from determining class sufficiency at the pleading stage and have directed that this issue be deferred until a timely motion for class certification. We can do no better than to repeat this summary of that law from Tarkington (References to Albertsons will, of course, apply to Ralphs in the context of the present case.):
“California’s judicial policy [is to allow] potential class action plaintiffs to have their action measured on its merits to determine whether trying their suits as a class action would bestow the requisite benefits upon the litigants and the judicial process to justify class action litigation.” (Beckstead v. Superior Court (1971) 21 Cal.App.3d 780, 783 (Beckstead).) “In order to effect this judicial policy, the California Supreme Court has mandated that a candidate complaint for class action consideration, if at all possible, be allowed to survive the pleading stages of litigation.” (Id. citing La Sala v. American Sav. & Loan Assn. (1971) 5 Cal.3d 864, 868-869 [reversing trial court’s sustaining of demurrer against class action suit]; Vasquez v. Superior Court (1971) 4 Cal.3d 800, 816 [same]; Daar v. Yellow Cab Co. (1967) 67 Cal.2d 695, 716-717 [same]; Jones v. H. F. Ahmanson & Co. (1969) 1 Cal.3d 93, 121 [affirming trial court’s overruling of demurrer attacking class allegations].)
“The wisdom of allowing survival is elementary. Class action litigation is proper whenever it may be determined that it is more beneficial to the litigants and to the judicial process to try a suit in one action rather than in several actions.... It is clear that the more intimate the judge becomes with the character of the action, the more intelligently he may make the determination. If the judicial machinery encourages the decision to be made at the pleading stages and the judge decides against class litigation, he divests the court of the power to later alter that decision.... Therefore, because the sustaining of demurrers without leave to amend represents the earliest possible determination of the propriety of class action litigation, it should be looked upon with disfavor.” (Beckstead, supra, 21 Cal.App.3d at p. 783.)
Despite the policy disfavoring the determination of class suitability issues at the pleading stage, several cases, including those cited by Albertsons, have done exactly that. (See, e.g, Silva v. Block (1996) 49 Cal.App.4th 345, 348 [trial court properly determined class issues on demurrer, since it was apparent from the face of the pleading that issues requiring separate adjudication—both of liability and damages—predominated over common questions]; Clausing v. San Francisco Unified School Dist. (1990) 221 Cal.App.3d 1224, 1234 [in this mass-tort action, “it would be a waste of time and judicial resources to require a full evidentiary hearing [on class suitability] when the matter can properly be disposed of by demurrer”; Brown v. Regents of University of California (1984) 151 Cal.App.3d 982, 990-991 [determination of class status by demurrer proper in mass-tort action].)
In Prince v. CLS Transportation, Inc. (2004) 118 Cal.App.4th 1320 (Prince), after an exhaustive review of the relevant case law, this division determined that the apparent conflict was in fact not a conflict at all: “[I]t is only in mass tort actions (or other actions equally unsuited to class action treatment) that class suitability can and should be determined at the pleading stage. In other cases, particularly those involving wage and hour claims, class suitability should not be determined by demurrer.” (Id. at p. 1325.) We reasoned that in mass tort actions individual questions of liability and damages frequently predominate over common questions and resolving class suitability at the pleading stage is therefore proper. (Id. at pp. 1327-1328.) In contrast, we explained, “wage and hour disputes (and others in the same class) routinely proceed as class actions” because they usually involve “‘a single set of facts applicable to all members,’” and “‘one question of law common to all class members.’” (Ibid.) As long as a plaintiff “alleges institutional practices... that affected all of the members of the potential class in the same manner, and it appears from the complaint that all liability issues can be determined on a class-wide basis,” we held that “no more is required” at the pleading stage. (Id. at p. 1329.)
In our view, the petition in this case is more like a wage and hour case than a mass-tort action. It involves a single set of facts (i.e., those allegations pertaining to Albertsons selective lockout and illegal hiring of locked out employees), one question of law common to all class members (i.e., whether employees who could not work because of Albertsons lockout fall under the ambit of section 1262), and one institutional practice (i.e., the denial of benefits to locked out employees by the EDD and CUIAB Board). While there may be individual questions of the amount of benefits, if any, to which each claimant is entitled, we do not see these questions as predominant over the common factual allegations and legal questions cited above. (Accord Vasquez v. Superior Court (1971) 4 Cal.3d 800, 809 [“the fact that each member of the class must prove his separate claim to a portion of any recovery by the class is only one factor to be considered in determining whether a class action is proper”]; Reyes v. Board of Supervisors (1987) 196 Cal.App.3d 1263, 1272, 1279 [rejecting county’s argument that denial of governmental benefits was not suitable for class treatment because “each recipient’s right to recover depends on the facts peculiar to his/her case” and noting that “it is especially appropriate to proceed with a class action to provide effective relief when, as here, a large number of [class members] have been allegedly, improperly denied governmental benefits on the basis of an invalid administrative practice”].)
In line with our decision in Prince, we conclude that it was premature for the trial court to make determinations pertaining to class suitability on demurrer. We reverse the court’s order granting Albertsons motion to strike and the court’s accompanying legal ruling that the class definition was “too broad.” The putative class definition alleged in the petition, is sufficient to move forward past the pleading stage.
Exhaustion of Remedies
The trial court concluded that it would not approve any pleading that proposed a putative class that included any employee that did not exhaust his/her administrative remedies. A brief review of this litigation may be helpful here. Petitioners Duran and Brown appealed the EDD’s denial of their application for unemployment benefits. The ALJ agreed with the EDD, again rejecting these applications. The CUIAB followed suit. At every stage of these proceedings, the principal legal question to be decided was the applicability of section 1262 to the employees who were locked out of Ralphs. That decision, in turn, depended upon an analysis of the “first blow” rule. At no point in this process have the positions of Duran and Brown been factually or legally distinguishable from the positions of their fellow members of the putative class.
The Supreme Court addressed the issue of the exhaustion of administrative remedies in Friends of Mammoth v. Board of Supervisors (1972) 8 Cal.3d 247, 267-68. Two plaintiffs there pleaded a class action challenging a planning commission’s decision to grant a developer a conditional use permit. The individual and group that were named as plaintiffs in the suit that followed Board of Supervisors ratification of the permit grant had not participated in that administrative review. However, there were members of the putative class who had done so. The Supreme Court wrote that the unnamed plaintiffs “will have expressed the position of the representative plaintiff in the class suit, and the Board will have had its opportunity to act and to render litigation unnecessary, if it had chosen to do so.” Its conclusion was that “Nothing more could effectuate the policy of the exhaustion doctrine.” Further individual participation before the Board — presenting the same arguments and arguing the same law — “would serve no additional useful purpose.” Such is the case here. There is no suggestion that Duran and Brown failed in any measure to present the case for all putative plaintiffs before the EDD and the ALJ and the CUIAB. The analysis of section 1262 and the application of the “first blow” rule which Duran and Brown urged was rejected at every turn, with no hint that any decision ever depended upon a unique aspect of Duran’s position or Brown’s position.
DISPOSITION
The judgment is reversed. Plaintiffs shall recover their costs on appeal.
We concur: RUBIN, Acting P. J., BIGELOW, J.