Ayala v. Antelope Valley Newspapers, Inc.

327 P.3d 165, 23 Wage & Hour Cas.2d (BNA) 984, 173 Cal. Rptr. 3d 332, 79 Cal. Comp. Cases 760, 2014 WL 2924954, 2014 Cal. LEXIS 4649, 59 Cal. 4th 522, 164 Lab. Cas. (CCH) 61,495
CourtCalifornia Supreme Court
DecidedJune 30, 2014
DocketS206874
StatusPublished
Cited by129 cases

This text of 327 P.3d 165 (Ayala v. Antelope Valley Newspapers, Inc.) is published on Counsel Stack Legal Research, covering California Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Ayala v. Antelope Valley Newspapers, Inc., 327 P.3d 165, 23 Wage & Hour Cas.2d (BNA) 984, 173 Cal. Rptr. 3d 332, 79 Cal. Comp. Cases 760, 2014 WL 2924954, 2014 Cal. LEXIS 4649, 59 Cal. 4th 522, 164 Lab. Cas. (CCH) 61,495 (Cal. 2014).

Opinions

Opinion

WERDEGAR, J.

Antelope Valley Newspapers, Inc. (Antelope Valley), is the publisher of the Antelope Valley Press, a daily newspaper. To deliver the [528]*528paper to its subscribers, Antelope Valley contracts with individual carriers. Four carriers, Maria Ayala, Josefina Briseño, Rosa Duran, and Osman Núñez, contend Antelope Valley illegally treats them as independent contractors, rather than employees, and thereby deprives them of a host of wage and hour protections to which they are legally entitled.

The merits of the complaint are not before us. The sole question is whether this case can proceed as a class action. The trial court concluded the case could not, holding that on the critical question whether Ayala and others were employees, plaintiffs had not shown common questions predominate; to determine employee status, in the trial court’s view, would necessitate numerous unmanageable individual inquiries into the extent to which each carrier was afforded discretion in his or her work. The Court of Appeal disagreed in part, holding that the trial court had misunderstood the nature of the inquiries called for, and remanded for reconsideration of the class certification motion as to five of the complaint’s claims.

We affirm. Whether a common law employer-employee relationship exists turns foremost on the degree of a hirer’s right to control how the end result is achieved. (S. G. Borello & Sons, Inc. v. Department of Industrial Relations (1989) 48 Cal.3d 341, 350 [256 Cal.Rptr. 543, 769 P.2d 399] (Borello)) In turn, whether the hirer’s right to control can be shown on a classwide basis will depend on the extent to which individual variations in the hirer’s rights vis-a-vis each putative class member exist, and whether such variations, if any, are manageable. Because the trial court principally rejected certification based not on differences in Antelope Valley’s right to exercise control, but on variations in how that right was exercised, its decision cannot stand.

Factual and Procedural Background

Defendant Antelope Valley circulates the Antelope Valley Press daily to subscribers throughout Los Angeles and Kern Counties. To distribute the paper, Antelope Valley operates distribution facilities in both counties and contracts with individual carriers using a preprinted, standard form contract. Named plaintiffs Maria Ayala, Josefina Briseño, Rosa Duran, and Osman Núñez (collectively Ayala) are or were newspaper carriers for Antelope Valley.

In December 2008, Ayala sued on behalf of a putative class of Antelope Valley carriers. The complaint contends that Antelope Valley treats its carriers as independent contractors when, as a matter of law, they are employees. Consequently, Antelope Valley denies its carriers various wage and hour protections to which they are entitled. The complaint alleges unpaid overtime, unlawful deductions, failure to provide breaks, and failure to reimburse for [529]*529business expenses, among other statutory and wage order violations (Lab. Code, §§221, 223, 226, 226.3, 226.7, 512, 1174, 1194, 2802; Industrial Welfare Com. wage order No. 1-2001, subds. 3, 7-9, 11-12 (IWC wage order No. 1-2001) (Cal. Code Regs., tit. 8, § 11010)), as well as unfair competition based on these violations (Bus. & Prof. Code, § 17200).

Ayala sought class certification. She contended the central question in establishing liability was whether carriers are employees, and that this question could be resolved through common proof, including but not limited to the contents of the standard contract entered into between Antelope Valley and its carriers. Antelope Valley opposed certification. Because of alleged individual variations in how carriers performed their work, it disagreed that the question of employee status could be resolved on a common basis. Antelope Valley further argued that even if the carriers were employees, some of the causes of action presented additional unmanageable individual issues that should nevertheless preclude certification.

The trial court denied class certification. It concluded common issues did not predominate because resolving the carriers’ employee status would require “heavily individualized inquiries” into Antelope Valley’s control over the carriers’ work. Moreover, the claims for overtime and for meal and rest breaks would require additional claim-specific individualized inquiries. Because individual issues predominated, class resolution of the claims was not superior to individual lawsuits by each carrier.

A unanimous Court of Appeal affirmed in part and reversed in part. It agreed with the trial court that Ayala had not shown how her overtime, meal break, and rest break claims could be managed on a classwide basis. As for the remaining claims, however, it disagreed that proof of employee status would necessarily entail a host of individual inquiries. In the Court of Appeal’s view, although evidence of variation in how carriers performed their work might support Antelope Valley’s position that it did not control the carriers’ work, such evidence would not convert the critical question — how much right does Antelope Valley have to control what its carriers do? — from a common one capable of answer on a classwide basis to an individual one requiring minitrials.

We granted Antelope Valley’s petition for review.

Discussion

I. Class Action Principles

“The party advocating class treatment must demonstrate the existence of an ascertainable and sufficiently numerous class, a well-defined community [530]*530of interest, and substantial benefits from certification that render proceeding as a class superior to the alternatives. [Citations.] ‘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.” ’ ” (Brinker Restaurant Corp. v. Superior Court (2012) 53 Cal.4th 1004, 1021 [139 Cal.Rptr.3d 315, 273 P.3d 513] (Brinker).) Here, the presence or absence of predominant common questions is the sole issue on appeal.1

We review the trial court’s ruling for abuse of discretion and generally will not disturb it “ ‘unless (1) it is unsupported by substantial evidence, (2) it rests on improper criteria, or (3) it rests on erroneous legal assumptions.’ ” (Brinker, supra, 53 Cal.4th at p. 1022.) We review the trial court’s actual reasons for granting or denying certification; if they are erroneous, we must reverse, whether or not other reasons not relied upon might have supported the ruling. (Linder v. Thrifty Oil Co. (2000) 23 Cal.4th 429, 436 [97 Cal.Rptr.2d 179, 2 P.3d 27].)

II. The Test for Employee Status

We begin by identifying the principal legal issues and examining the substantive law that will govern. In doing so, we do not seek to resolve those issues. Rather, the question at this stage is whether the operative legal principles, as applied to the facts of the case, render the claims susceptible of resolution on a common basis. (Brinker, supra, 53 Cal.4th at pp. 1023-1025;

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327 P.3d 165, 23 Wage & Hour Cas.2d (BNA) 984, 173 Cal. Rptr. 3d 332, 79 Cal. Comp. Cases 760, 2014 WL 2924954, 2014 Cal. LEXIS 4649, 59 Cal. 4th 522, 164 Lab. Cas. (CCH) 61,495, Counsel Stack Legal Research, https://law.counselstack.com/opinion/ayala-v-antelope-valley-newspapers-inc-cal-2014.