October 20, 2011

Summary of October 19, 2011 conference report for civil cases

The following is our summary of the Supreme Court’s actions on petitions for review in civil cases from the Court’s conference on Wednesday, October 19, 2011. The summary includes those civil cases in which (1) review has been granted (not including grant-and-transfers), (2) review has been denied but one or more justices has voted for review, or (3) the Court has ordered depublished an opinion of the Court of Appeal.

Review Granted

Concerned Citizens For Responsible Government v. West Point Fire Protection District, S195152—Review Granted—October 19, 2011

In this reverse validation action, the question presented is whether a rural fire protection district’s assessment to raise money for additional fire suppression services violates Proposition 218, which restricts a public agency’s ability to impose special assessments.

In a published decision, Concerned Citizens For Responsible Government v. West Point Fire Protection District (2011) 196 Cal.App.4th 1427, the Court of Appeal, Third District, invalidated the assessment. The court held that: (1) the assessment did not confer special benefits on specific parcels sufficient to qualify as a special assessment; and (2) the assessment violated the proportionality requirements of Proposition 218. Justice M. Kathleen Butz wrote a concurring opinion, calling the invalidation of the assessment “a regrettable and unfortunate consequence of the passage of Proposition 218.” Justice Butz observed: “A small fire district, starving for the funds to furnish full-time fire protection, proposed a modest levy to achieve that goal, which was approved by a 62 percent majority vote. However, because of the complex requirements of Proposition 218, the assessment must be struck down.”

Review Denied (with dissenting justices)

Brown v. Ralphs Grocery Company, S195850—Review Denied [Baxter, J., voting for review]—October 19, 2011

This was a putative class action and representative action under the Private Attorney General Act of 2004 (PAGA) brought by an employee against her employers for alleged violations of the Labor Code. The questions presented were: (1) whether the employee presented substantial evidence to invalidate a class action waiver provision in her employment application; and (2) whether the Federal Arbitration Act (FAA) preempts California law invalidating class action waivers in consumer arbitration agreements.

The trial court denied the employers’ petition to compel arbitration and they appealed. The Court of Appeal, Second District, Division Five, held in a published decision, Brown v. Ralphs Grocery Company (2011) 197 Cal.App.4th 489, that “the trial court erred in ruling that under Gentry v. Superior Court (2007) 42 Cal.4th 443 . . . the class action waiver provision in plaintiff’s employment agreement was unenforceable because that ruling was not supported by substantial evidence.” The court also held “that the recent decision of the United States Supreme Court in AT&T Mobility LLC v. Concepcion et ux. (2011) ––– U.S. ––––, 131 S.Ct. 1740, 179 L.Ed.2d 742 (AT&T), holding that California decisional law invalidating class action waivers in consumer arbitration agreements is preempted by the Federal Arbitration Act ( 9 U.S.C. § 1 et seq. (FAA)), does not apply to representative actions under the PAGA, and thus the trial court correctly ruled that the waiver of plaintiff’s right to pursue a representative action under the PAGA was not enforceable under California law.” The court remanded “for the trial court to determine whether to sever the unenforceable provision in the arbitration agreement waiving plaintiff’s right to pursue a PAGA representative action or whether to refuse to enforce the entire arbitration agreement or parts thereof.”

Justice Sandy Kriegler concurred in the majority’s rejection of the plaintiff’s argument that the class action waiver in her employment contract was unconscionable, noting that Gentry’s “continuing vitality is in doubt after the decision in AT & T, which disapproved the holding in Discover Bank v. Superior Court (2005) 36 Cal.4th 148 . . .” But Justice Kriegler dissented “from the majority’s further conclusion that [the plaintiff’s] waiver of the right to file a representative action under [PAGA] was unenforceable. The preemptive effect of the Federal Arbitration Act (FAA) requires enforcement of the PAGA waiver in the employment arbitration agreement in this case under the holding of AT & T . . .”

Depublished

None.

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