Sav-On Drug Stores, Inc. v. Superior Court

96 P.3d 194, 17 Cal. Rptr. 3d 906, 34 Cal. 4th 319, 2004 Daily Journal DAR 10627, 2004 Cal. Daily Op. Serv. 7902, 9 Wage & Hour Cas.2d (BNA) 1692, 2004 Cal. LEXIS 7806
CourtCalifornia Supreme Court
DecidedAugust 26, 2004
DocketS106718
StatusPublished
Cited by323 cases

This text of 96 P.3d 194 (Sav-On Drug Stores, Inc. v. Superior Court) 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
Sav-On Drug Stores, Inc. v. Superior Court, 96 P.3d 194, 17 Cal. Rptr. 3d 906, 34 Cal. 4th 319, 2004 Daily Journal DAR 10627, 2004 Cal. Daily Op. Serv. 7902, 9 Wage & Hour Cas.2d (BNA) 1692, 2004 Cal. LEXIS 7806 (Cal. 2004).

Opinions

Opinion

WERDEGAR, J.

The question presented is whether the trial court abused its discretion in certifying as a class action this suit for recovery of unpaid overtime compensation. We conclude it did not and accordingly reverse the judgment of the Court of Appeal.

Background

Plaintiffs Robert Rocher and Connie Dahlin, on behalf of themselves and others similarly situated, brought this action against defendant Sav-on Drug Stores, Inc., a drugstore chain. The operative second amended complaint alleges violation of the overtime statutes (Lab. Code, § 1194 et seq.) and the unfair competition law (Bus. & Prof. Code, § 17200 et seq.), as well as conversion, for which plaintiffs seek damages and injunctive and declaratory relief. Underlying each cause of action are factual allegations that defendant misclassified as exempt from the overtime laws and failed to pay overtime compensation owed to plaintiffs and similarly situated employees who worked during the relevant period at defendant’s retail stores in California.

The Legislature has commanded that “[a]ny work in excess of eight hours in one workday and any work in excess of 40 hours in any one workweek . . . shall be compensated at the rate of no less than one and one-half times the regular rate of pay for an employee.” (Lab. Code, § 510, subd. (a).) The Industrial Welfare Commission (IWC), however, is statutorily authorized to “establish exemptions from the requirement that an overtime rate of compensation be paid ... for executive, administrative, and professional employees, provided [inter alia] that the employee is primarily engaged in duties that meet the test of the exemption, [and] customarily and regularly exercises discretion and independent judgment in performing those duties . . . .” (Id., § 515, subd. (a).)

During the period covered by the complaint, defendant compensated plaintiffs as salaried managers, exempt from the overtime wage laws. Wage orders relating to the mercantile industry promulgated by the IWC and codified at California Code of Regulations, title 8, section 11070 provided during that same period an exemption from the overtime requirements for “persons employed in administrative, executive, or professional capacities.” [325]*325The original IWC Wage Order No. 7-98 defined this as one “engaged in work which is primarily intellectual, managerial, or creative, and which requires exercise of discretion and independent judgment.”1 The underlying merits of this litigation concern whether or not plaintiffs and those similarly situated properly were classified and paid under this exemption.

Our present inquiry concerns the trial court’s granting of plaintiffs’ motion for class certification. In support of their motion, plaintiffs argued that class members (i.e., defendant’s operating managers, hereafter sometimes OM’s, and assistant managers, hereafter sometimes AM’s) had, on the basis of their title and job descriptions and without reference to their actual work, uniformly been misclassified by defendant as exempt employees. In fact, defendant’s OM’s and AM’s were norananagerial, nonexempt employees under relevant law. Moreover, defendant’s store operations were “standardized.” Accordingly, the duties and responsibilities of defendant’s OM’s and AM’s were similar in critical respects from region to region, area to area, and store to store. Class members generally performed nonexempt work in excess of 50 percent of the time in their workday, and their workday routinely included work in excess of eight hours per day and/or 40 hours per week. Notwithstanding these facts, plaintiffs contended, class members were not paid statutorily mandated overtime compensation.

In opposing certification, defendant argued that whether any individual member of the class is exempt or nonexempt from the overtime requirements depends on which tasks that person actually performed and the amount of time he or she actually spent on which tasks. The actual activities performed by its OM’s and AM’s, and the amount of time spent by each OM and AM on exempt activities, defendant contended, varied significantly from store to store and individual to individual, based on multiple factors, including store location and size, physical layout, sales volume, hours of operation, management structure and style, experience level of managers, and number of hourly employees requiring supervision. For this reason, defendant argued, no meaningful generalizations about the employment circumstances of its managers could be made.

The trial court granted the certification motion, appointing plaintiffs to represent a class defined as “all current and former salaried [OM’s] and current and former salaried [AM’s] employed by defendant... in California [326]*326at any time between April 3, 1996 and June 22, 2001, inclusive.” The parties have estimated that the class has between 600 and 1,400 members.

Defendant petitioned for writ relief. The Court of Appeal issued a writ of mandate commanding the trial court to vacate its order granting class certification and to enter a new and different order denying class certification. We granted plaintiffs’ petition for review.

Discussion

We quite recently reviewed the established standards for class certification generally. (Lockheed Martin Corp. v. Superior Court (2003) 29 Cal.4th 1096, 1106 [131 Cal.Rptr.2d 1, 63 P.3d 913] (Lockheed).) Code of Civil Procedure section 382 authorizes class actions “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. . ..” The party seeking certification has the burden to establish the existence of both an ascertainable class and a well-defined community of interest among class members. (Lockheed, supra, at p. 1104, citing Washington Mutual Bank v. Superior Court (2001) 24 Cal.4th 906, 913 [103 Cal.Rptr.2d 320, 15 P.3d 1071] (Washington Mutual).) 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. (Lockheed, supra, at p. 1104.)

The certification question is “essentially a procedural one that does not ask whether an action is legally or factually meritorious.” (Linder v. Thrifty Oil Co. (2000) 23 Cal.4th 429, 439-440 [97 Cal.Rptr.2d 179, 2 P.3d 27] (Linder).) A trial court ruling on a certification motion determines “whether ... the issues which may be jointly tried, when compared with those requiring separate adjudication, are so numerous or substantial that the maintenance of a class action would be advantageous to the judicial process and to the litigants.” (Collins v. Rocha (1972) 7 Cal.3d 232, 238 [102 Cal.Rptr. 1, 497 P.2d 225]; accord, Lockheed, supra, 29 Cal.4th at pp. 1104-1105.) The trial court in this case determined that plaintiffs had established by a preponderance of the evidence that common issues predominate and ruled that a class action is “superior to alternate means for a fair and efficient adjudication of the litigation.”

We review the trial court’s ruling for abuse of discretion.

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96 P.3d 194, 17 Cal. Rptr. 3d 906, 34 Cal. 4th 319, 2004 Daily Journal DAR 10627, 2004 Cal. Daily Op. Serv. 7902, 9 Wage & Hour Cas.2d (BNA) 1692, 2004 Cal. LEXIS 7806, Counsel Stack Legal Research, https://law.counselstack.com/opinion/sav-on-drug-stores-inc-v-superior-court-cal-2004.