JOSE A. ARIAS, Petitioner, v. THE SUPERIOR COURT OF SAN JOAQUIN COUNTY, Respondent; ANGELO DAIRY et al., Real Parties in Interest.
No. S155965
Supreme Court of California
June 29, 2009.
46 Cal.4th 969
California Rural Legal Assistance, Inc., Blanca A. Bañuelos and Michael L. Meuter for Petitioner.
Worksafe Law Center, M. Suzanne Murphy; The Impact Fund, Brad Seligman, Jocelyn Larkin; Asian Pacific American Legal Center, Julie A. Su, Yungsuhn Park; Legal Aid Foundation of Los Angeles, Anel Flores; Legal Aid Society-Employment Law Center, Matthew Goldberg; Neighborhood Legal Services of Los Angeles County, David Pallack, José Tello; The Watsonville Law Center, Dori Rose Inda; National Employment Law Project, Laura Moskowitz; California Rural Legal Assistance Foundation and Julia L. Montgomery for Garment Worker Center, Inquilinos Unidos and Maintenance Cooperation Trust Fund as Amici Curiae on behalf of Petitioner.
No appearance for Respondent.
Barsamian, Saqui & Moody, Saqui & Raimondo, Michael C. Saqui; McCormick, Barstow, Sheppard, Wayte & Carruth and Anthony P. Raimondo for Real Parties in Interest.
Law Offices of Steven Drapkin, Steven Drapkin; O‘Melveny & Myers, Scott H. Dunham, Ryan W. Rutledge; National Chamber Litigation Center, Inс., and Robin S. Conrad for Employers Group, California Employment Law Council, Chamber of Commerce of the United States of America and California Restaurant Association as Amici Curiae on behalf of Real Parties in Interest.
OPINION
KENNARD, J.—We hold that an employee who, on behalf of himself and other employees, sues an employer under the unfair competition law (
I
Jose A. Arias sued his former employer, Angelo Dairy, and others. In the first through sixth causes of action of the first amended complaint, plaintiff on behalf of himself alleged violations of the Labor Code, labor regulations, and an Industrial Welfare Commission wage order.
The seventh and eighth causes of action alleged breach of contract and breach of the warranty of habitability on the ground that defendants provided residential units in a defective and dangerous condition.
The ninth cause of action alleged violations of the unfair competition law (
The tenth cause of action sought enforcement under the unfair competitiоn law (
The eleventh cause of action alleged, under the Labor Code Private Attorneys General Act of 2004 (
The trial court granted defendants’ motion to strike the seventh through eleventh causes of action (brought on behalf of plaintiff and other employees) on the ground that plaintiff failed to comply with the pleading requirements for class actions. Plaintiff petitioned the Court of Appeal for a writ of mandate. That court held that the causes of action brought in a representative capacity alleging violations of the unfair competition law, but not the representative claims under the Labor Code Private Attorneys General Act of 2004, were subject to class action requirements. It issued a peremptory writ of mandate directing the trial court to issue a new order striking the representative claims alleged in the seventh through tenth causes of action, but not striking the eleventh cause of action. We granted plaintiff‘s petition for review.
Plaintiff contends the Court of Appeal erred in holding that to bring representative claims (that is, claims on behalf of others as well as himself) under the unfair competition law, he must comply with class action requirements.2 We disagree.
The unfair competition law prohibits “any unlawful, unfair or fraudulent business act or practice . . . .” (
In 2004, however, the electorate passed Proposition 64, an initiative measure. Proposition 64 amended the unfair competition law to provide that a private plaintiff may bring a representative action under this law only if the plaintiff has “suffered injury in fact and has lost money or property as a result of such unfair competition” and “complies with Section 382 of the Code of Civil Procedure . . . .”3 This statute provides that “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, one or more may sue or defend for the benefit of all.” (
Plaintiff contends that beсause Proposition 64‘s amendment of the unfair competition law requires compliance only with “[s]ection 382 of the Code of Civil Procedure” (
At issue is whether, as amended by the voters’ passage of Proposition 64,
The general principles that govern interpretation of a statute enacted by the Legislature apply also to an initiative measure enacted by the voters. (Robert L. v. Superior Court (2003) 30 Cal.4th 894, 900.) Thus, our primary task here is to ascertain the intent of the
We look first to the words of the initiative measure, as they generally provide the most reliable indicator of the voters’ intent. (Bernard v. Foley (2006) 39 Cal.4th 794, 804; Hsu v. Abbara (1995) 9 Cal.4th 863, 871.) Usually, there is no need to construe a provision‘s words when they are clear and unambiguous and thus not reasonably susceptible of more than one meaning. (People v. Leal (2004) 33 Cal.4th 999, 1007; People v. Gardeley (1996) 14 Cal.4th 605, 621.) That, according to plaintiff, is true here.
A literal construction of an enactment, however, will not control when such a construction would frustrate the manifest purpose of the enactment as a whole. (People v. Gonzalez (2008) 43 Cal.4th 1118, 1126; Horwich v. Superior Court (1999) 21 Cal.4th 272, 276; Faria v. San Jacinto Unified School Dist. (1996) 50 Cal.App.4th 1939, 1945.) “The intent prevails over the letter, and the letter will, if possible, be so read as to conform to the spirit of the act.” (Lungren v. Deukmejian (1988) 45 Cal.3d 727, 735.) In determining the purpose of an initiative measure, we consider the analysis and arguments contained in the official election materials submitted to the voters. (E.g., Professional Engineers in California Government v. Kempton, supra, 40 Cal.4th at p. 1050; Robert L. v. Superior Court, supra, 30 Cal.4th at p. 901.)
A thorough review of the Voter Information Guide prepared by the Secretary of State for the November 2, 2004, election at which the voters enacted Proposition 64 leaves no doubt that, as discussed below, one purpose of Proposition 64 was to impose class action requirements on private plaintiffs’ representative actions brought under the unfair competition law.
The official title and summary of Proposition 64, prepared by the state Attorney General, told the voters that the initiative measure “[r]equires private representative claims to comply with procedural requirements applicable to class action lawsuits.” (Voter Information Guide, Gen. Elec. (Nov. 2, 2004) official title and summary of Prop. 64, p. 38.) And the ballot measure summary, prepared by the Secretary of State, informed the voters that a “yes” vote meant that a “person pursuing [unfair competition law] claims on behalf of others would have to meet the additional requirements of class action lawsuits,” while a “no” vote meant that a “person could bring such a lawsuit
In light of this strong evidence of voter intent, we construe the statement in
We turn now to the next issue—whether class action requirements must also be satisfied when an aggrieved employee seeks civil penalties for himself and other employees under the Labor Code Private Attorneys General Act of 2004 for an employer‘s alleged Labor Code violations.
III
In September 2003, the Legislature enacted the Labor Code Private Attorneys General Act of 2004 (
Under this legislation, an “aggrieved employee” may bring a civil action personally and on behalf of other current or former employees to recover civil penalties for Labor Code violations. (
Before bringing a civil action for statutory penalties, an employee must comply with
Here, plaintiff‘s eleventh cause of action seeks civil penalties under the Labor Code Privаte Attorneys General Act of 2004 for himself and other employees of defendants for alleged violations of various Labor Code provisions, several labor regulations, and an Industrial Welfare Commission wage order. Defendants challenge the Court of Appeal‘s holding here that, to bring this cause of action, plaintiff need not satisfy class action requirements.5 The court relied on these four reasons: (1)
Defendants and their amicus curiae, the National Chamber Litigation Center, Inc., contend that the Court of Appeal‘s statutory construction leads to “absurd” results, is not supported by the statute‘s legislative history, and
A. “Absurd Results” Claim
Defendants criticize the Court of Appeal‘s holding that a representative action seeking civil penalties under
Defendants read the Court of Appeal‘s decision as holding that class action requirements do not apply to actions under
Defendants’ argument assumes that class action requirements apply generally to any form of representative action unless the Legislature affirmatively precludes their application by inserting “notwithstanding any other provision of law,” or words to that effect, in the statute authorizing the representative action. This assumption is incorrect. For example, this court construed the unfair competition law, before its amendment in 2004, as authorizing representative actions that were not class actions (see, e.g., Kraus v. Trinity Management Services, Inc., supra, 23 Cal.4th at p. 126, fn. 10; Stop Youth Addiction, Inc. v. Lucky Stores, Inc., supra, 17 Cal.4th at p. 561) even though
Moreover, there is a more reasonable and persuasive explanation for the Legislature‘s failure to include the words “notwithstanding any other provision of law,” or similar language, in
Defendants also argue that if the “[n]otwithstanding any other provision of law” language in
B. Legislative History Claim
Defendants argue that the legislative history of the Labor Code Private Attorneys General Act of 2004 reveals a legislative intent that any lawsuit under the act be brought as a class action. Defendants point to statements in certain committee reports that an employer need not be concerned about future lawsuits that assert the same issues because “[a]n action on behalf of other aggrieved employees would be final as to those рlaintiffs . . . .” (Sen. Com. on Judiciary, Analysis of Sen. Bill No. 796 (2003-2004 Reg. Sess.) as
The above quoted comments from the committee reports were simply responses to a concern expressed by those opposing the proposed legislation that the proposed legislation would allow employees to sue as a class without satisfying class action requirements. Because the committee report comments do not refer to class actions, they are insufficient to support the conclusion that the Legislature intended to impose class action requirements on representative actions brought under the Labor Code Private Attorneys General Act of 2004.
C. Due Process Claim
Citing the principle of statutory construction that when possible a statute must be construed to avoid constitutional infirmity (Berglund v. Arthroscopic & Laser Surgery Center of San Diego, L.P. (2008) 44 Cal.4th 528, 538; Myers v. Philip Morris Companies, Inc. (2002) 28 Cal.4th 828, 846-847), defendants urge us to construe the Labor Code Private Attorneys General Act of 2004 as requiring that all actions under that act be brought as class actions. Not to do so, defendants argue, would render the act unconstitutional as violating the due process rights not only of defendant employers but also of nonparty aggrieved employees who are not given notice of, and an opportunity to be heard in, a representative action that is not brought as a class action.
Unfairness may result from application оf collateral estoppel when, for example, various plaintiffs in separate lawsuits against the same defendant assert claims presenting common issues. Because collateral estoppel may be invoked only against a party to the prior lawsuit in which the issue was determined, and because in our example the defendant would be a party to every lawsuit while each of the various plaintiffs would be a party in only one lawsuit, the defendant would in later lawsuits be bound by any adverse determination of the common issues, while none of the plaintiffs would be similarly bound by prior determinations in the defendant‘s favor. Thus, ” ‘[o]ne plaintiff could sue and lose; another could sue and lose; and another and another until one finally prevailed; then everyone else would ride on that single success.’ ” (Fireside Bank v. Superior Court, supra, 40 Cal.4th at p. 1078, quoting Premier Elec. Constr. Co. v. N.E.C.A., Inc. (7th Cir. 1987) 814 F.2d 358, 362.) This process, which is now commonly referred to as “one-way intervention,” is potentiаlly unfair to the defendant, who could face the ” ‘terrors of an open-ended lawsuit that cannot be defeated, cannot be settled, and cannot be adjudicated.’ ” (Fireside Bank v. Superior Court, supra, at p. 1080.) Because of this potential for injustice, “in dicta we have gone so far as to attribute to defendants a due process right to avoid one-way intervention.” (Id. at p. 1083.)
Defendants here assert that unless the Labor Code Private Attorneys General Act of 2004 is construed as requiring representative actions under the act to be brought as class actions, defendants in those actions will be subjected to the unfairness flowing from one-way intervention, thereby violating their constitutional right to due process of law. We disagree.
As we will explain, a representative action brought by an aggrieved employee under the Labor Code Private Attorneys General Act of 2004 does not give rise to the due process concerns that dеfendants have expressed, because the judgment in such an action is binding not only on the named employee plaintiff but also on government agencies and any aggrieved employee not a party to the proceeding.
Because an aggrieved employee‘s action under the Labor Code Private Attorneys Genеral Act of 2004 functions as a substitute for an action brought by the government itself, a judgment in that action binds all those, including nonparty aggrieved employees, who would be bound by a judgment in an action brought by the government. The act authorizes a representative action only for the purpose of seeking statutory penalties for Labor Code violations (
As defendants point out, there remain situations in which nonparty aggrieved employees may profit from a judgment in an action brought under the Labor Code Private Attorneys General Act of 2004. This is why:
The potential for nonparty aggrieved employees to benefit from a favorable judgment under the act without being bound by an adverse judgment, however, is not unique to the Labor Code Private Attorneys General Act of 2004. It also exists when an action seeking civil penalties for Labor Code violations is brought by a government agency rather than by an aggrieved employee suing under the Labor Code Private Attorneys General Act of 2004. Because an action undеr the act is designed to protect the public, and the potential impact on remedies other than civil penalties is ancillary to the action‘s primary objective, the one-way operation of collateral estoppel in this limited situation does not violate the employer‘s right to due process of law. (See People v. Pacific Land Research Co., supra, 20 Cal.3d at pp. 18-20.)7
The judgment of the Court of Appeal is affirmed.
George, C. J., Baxter, J., Chin, J., Moreno, J., and Corrigan, J., concurred.
WERDEGAR, J., Concurring.—I concur in the judgment. I write separately because I disagree with the majority‘s nonliteral interpretation of Proposition 64 (Gen. Elec. (Nov. 2, 2004)), which forecloses a variety of representative actions the measure clearly permits. Unlike the majority, I do not believe we would frustrate the voters’ intent by enforcing the measure according to its plain language.
The unfair competition law (
Section 382 actually codifies not class action procedure but the common law doctrine of virtual representation. (Weaver v. Pasadena Tournament of Roses (1948) 32 Cal.2d 833, 837.) Under the doctrine, a person who was not a party to an action was deemed to have been virtually represented, and thus bound by the judgment, if his or her interests had received adequate representation by a party.1 (See, e.g., Bernhard v. Wall
(1921) 184 Cal. 612, 629.) The modern law of class actions evolved out of virtual representation. In 1948, we held that the doctrine, as codified in section 382, provided courts with sufficient authority to use the class action procedural mechanism. (Weaver v. Pasadena Tournament of Roses, supra, at pp. 836-837.) Over time, encouraged by the adoption in 1966 of rule 23 of the Federal Rules of Civil Procedure, class actions multiplied and began to displace other types of multiparty representative actions. California courts, lacking any other stаtutory basis for class actions,2 simply continued to cite section 382 as authority and, when specific guidance was required, looked to federal decisions applying rule 23. (E.g., Green v. Obledo (1981) 29 Cal.3d 126, 146; Vasquez v. Superior Court (1971) 4 Cal.3d 800, 821; Daar v. Yellow Cab Co. (1967) 67 Cal.2d 695, 708-709.) Today, its history largely forgotten, section 382 is commonly but inaccurately described as setting out the requirements for class certification.3 The majority adopts this shorthand description, as did the Attorney General and the Legislative Analyst in the ballot pamphlet. (See maj. opn., ante, at pp. 979-980, citing Voter Information Guide, Gen. Elec. (Nov. 2, 2004) official title and summary of Prop. 64, p. 38; id., ballot measure summary, Prop. 64, p. 6; id., analysis by the Legislative Analyst of Prop. 64, pp. 38-39.) In a non-UCL case I, too, have described the statute in the same way. (Fireside Bank v. Superior Court, supra, 40 Cal.4th at p. 1092, fn. 9.) The common shorthand, however, is not accurate. Even today, more remains of section 382 than just a makeshift citation for the proposition that California law authorizes class actions.
What remains of section 382 is best understood by referеnce to Taylor v. Sturgell (2008) 553 U.S. 880 [171 L.Ed.2d 155, 128 S.Ct. 2161] (Taylor), in which the United States Supreme Court comprehensively examined the federal courts’ use of virtual representation, the common law doctrine section
The propriety of any given representative action obviously depends on whether the nonparties assumed to be represented will in fact be bound by the judgment. Of the six categories of exceptions to the rule against nonparty preclusion identified in Taylor, supra, 553 U.S. 880, 893–895 [128 S.Ct. 2161, 2172-2173], three might well, but for today‘s decision, support non-class representative actions under the UCL: (1) preclusion because a person has agreed to be bound by the determination of issues in an action between others; (2) preclusion based on a variety of preexisting substantive legal relationships arising from the needs of property law, such as the relationships between preceding and succeeding owners of property, bailee and bailor, and assignee and assignor; and (3) preclusion because a nonparty was adequately represented by someone with the same interests who was a party, as in properly conducted class actions and in suits brought by trustees, guardians, and other fiduciaries. (Taylor, at pp. 893–895 [128 S.Ct. at pp. 2172-2173].)
Taylor‘s third exception to the rule of nonparty preclusion—cases in which a nonparty was adequately represented, as in ”properly conducted class actions” (Taylor, supra, 553 U.S. 880, 894 [171 L.Ed.2d 155, 128 S.Ct. 2161, 2172], italics added)—will undoubtedly comprise the vast majority of multi-party actions brought under the UCL. The consumers on whose behalf UCL actions are brought typically have no relationship with the representative plaintiff other than the fact that they purchased the same product or service from the defendant. Still, actions brought under the first (consent) and second (relationships based on proрerty law) exceptions to the general rule of nonparty preclusion, and actions brought under the third exception by “trustees, guardians, and other fiduciaries” (Taylor, supra, at p. 894 [128 S.Ct. at p. 2173]), fall squarely within the language and intent of section 382, remain valid under federal law (see Taylor, at pp. 893–895 [128 S.Ct. at
The majority, by simplistically construing Proposition 64‘s reference to “Section 382” (
Nevertheless, strict fidelity to the language of voter initiatives is important. The specific language of an initiative measure typically represents ” ‘a delicate tightrope walk designed to induce voter approval . . . .’ ” (Ross v. RagingWire Telecommunications, Inc. (2008) 42 Cal.4th 920, 930, quoting People v. Galambos (2002) 104 Cal.App.4th 1147, 1152)—a balance that judges too easily upset by reading their own policy preferences into a measure‘s language. Thus, “the initiative power is strongest when courts give effect to the voters’ formally expressed intent . . . .” (Ross, supra, at p. 930.) The majority‘s only justification for giving Proposition 64 a nonliteral interpretation is that the voters were told—albeit not in the text of the statute on which they were asked to vote—that the measure would compel representative plaintiffs to meet the requirements of class actions. (See maj. opn., ante, at pp. 979-980, citing Voter Information Guide, supra, official title and summary of Prop. 64, p. 38; id., ballot measure summary, Prop. 64, p. 6; id., analysis by the Legislative Analyst of Prop. 64, pp. 38-39.) The majority reasons that “[a] literal construction of an enactment . . . will not control when such a construction would frustrate the manifest purpose of the enactment as a whole.” (Maj. opn., ante, at p. 979.) I agree with the principle but not its application. In this case, to interpret Proposition 64 literally would not frustrate the voters’ intent, given the expected rarity in UCL cases of constitutionally permissible representative actions other than class actions. To prefer language in ballot pamphlets to the formal, operative text of an initiative renders the initiative process susceptible to bait-and-switch tactics. To do so even once without the plainest compulsion sets a potentially dangerous precedent.