Case Name: Juan Barocio v. Lanz Cabinet Shop, Inc., et al.
Case No.: 16-CV-301636

This is a putative wage and hour class action by an employee of defendant Lanz Cabinet Shop, Inc. Before the Court is defendant’s motion to stay the case pending resolution of an earlier-filed action, Victor Ballesteros v. Lanz Cabinet Shop, Inc. (Super. Ct. Sacramento County, No. 34-2015-00174854) (hereinafter, “Ballesteros”). Plaintiff opposes Lanz’s motion.

The parties’ requests for judicial notice of filings in this and the Ballesteros action are GRANTED. (Evid Code, § 452, subd. (d).)

I. Factual and Procedural Background

According to the operative first amended complaint (“FAC”), plaintiff worked for defendant as a non-exempt cabinet installer. (FAC, ¶¶ 1-2.) He alleges that Lanz had a consistent policy of failing to provide second meal periods to employees who worked over ten hours in a day. (Id. at ¶ 3.) The FAC asserts the following claims arising from this policy: (1) failure to provide meal periods, (2) waiting time penalties, (3) violation of Business & Professions Code section 17200, and (4) penalties under the Private Attorneys General Act (“PAGA”).

Plaintiff filed the original complaint in this action on October 25, 2016. Meanwhile, his counsel had been prosecuting another employment action against defendant, Ballesteros, since 2015. Ballesteros alleged claims arising from wage statement violations and failure to pay overtime. The original and first amended complaints in that action did not include class allegations, but did allege a representative PAGA claim based on technical wage statement violations, along with individual claims by the plaintiff. After Lanz successfully moved to strike the PAGA claim, the plaintiff filed a second amended complaint (“the Ballesteros SAC”) that included class allegations. The parties engaged in discovery and an unsuccessful private mediation.

In August of 2016, Lanz moved to deny class certification and/or to strike the class allegations in the SAC. Defendant argued that the Ballesteros plaintiff was an inadequate class representative and the commonality and typicality requirements of class certification were not satisfied in that case. Before his opposition to Lanz’s motion was due, the Ballesteros plaintiff moved for leave to file a third amended complaint (“the Ballesteros TAC”). The TAC would abandon the plaintiff’s class claim for double time wages and add a class claim for failure to provide second meal periods like the one before this Court. As described in her declaration supporting the motion for leave to amend, plaintiff’s counsel determined that there was likely a defense to the Ballesteros classwide overtime claim based on a review of confidential records produced during mediation; however, she also learned that there was a likely classwide meal period violation and indicated at the mediation that she would seek leave to bring such a claim. (See Defendant’s Request for Judicial Notice, Ex. E.)

On October 17, 2016, the Ballesteros court issued an order granting Lanz’s motion to deny class certification and denying the plaintiff’s motion for leave to file the TAC. The court found that the Ballesteros plaintiff was an inadequate class representative because his deposition revealed he was “totally unfamiliar with his duties” as such. (See Request for Judicial Notice, Ex. F, p. 2.) It struck the class allegations from the SAC. (Id. at p. 3.) The court denied the motion for leave to file a TAC adding a new classwide claim because there was no adequate class representative. (Id. at p. 2) However, it rejected Lanz’s argument that the plaintiff was barred from alleging a meal period claim in light of the mediation privilege. (Id. at pp. 2-3.) The court denied without prejudice the plaintiff’s request for leave to conduct discovery to identify a suitable class representative, on the ground that the parties failed to address the standard governing such a request in their briefing. (Id. at p. 3.)

On November 10, 2016, the Ballesteros plaintiff filed a notice of appeal regarding the court’s “Orders Dismissing Class & PAGA Claims (Death Knell Doctrine).” (Request for Judicial Notice, Ex. G, p. 1.) Plaintiff filed the FAC in this action on November 18, and Lanz answered on March 3, 2017. Defendant asserts affirmative defenses for abatement based on an earlier-filed action (the twenty-seventh affirmative defense), preclusion by the rule of concurrent jurisdiction (the twenty-eighth affirmative defense), and preclusion by the rule against claim splitting (the twenty-ninth affirmative defense).

On March 17, 2017, the Ballesteros plaintiff filed his opening brief in the appeal in that action. The brief raises the single issue of whether the Ballesteros court properly struck the plaintiff’s PAGA claim.

On March 30, 2017, Lanz filed the instant motion to stay.

II. Legal Standard

“The pendency of another earlier action growing out of the same transaction and between the same parties is a ground for abatement of the second action.” (Leadford v. Leadford (1992) 6 Cal.App.4th 571, 574.) A defendant may assert the pending action as a bar either by demurrer, or where fact issues must be resolved, by answer and subsequent motion pursuant to Code of Civil Procedure section 597. (Ibid.) In either case, if the court determines a pending action raises substantially the same issues between the same parties, it must enter the interlocutory judgment specified in Code of Civil Procedure section 597. (Ibid.) “In determining whether the causes of action are the same for purposes of pleas in abatement, the rule is that such a plea may be maintained only where a judgment in the first action would be a complete bar to the second action.” (Plant Insulation Co. v. Fibreboard Corp. (1990) 224 Cal.App.3d 781, 787-788.)

Related to the statutory plea in abatement is the rule of exclusive concurrent jurisdiction, which “has been interpreted and applied more expansively, and therefore may apply where the narrow grounds required for a statutory plea of abatement do not exist.” (Plant Insulation Co. v. Fibreboard Corp., supra, 224 Cal.App.3d at p. 788.) “Unlike the statutory plea of abatement, the rule of exclusive concurrent jurisdiction does not require absolute identity of parties, causes of action or remedies.” (Ibid.) “If the court exercising original jurisdiction has the power to bring before it all the necessary parties … [and] to litigate all the issues and grant all the relief to which any of the parties might be entitled under the pleadings,” the court should stay the second action pending resolution of the first. (Ibid.) Nevertheless, while complete identity between the parties and remedies sought is not required, “the issues in the two proceedings must be substantially the same and the individual suits must have the potential to result in conflicting judgments” for the rule to apply. (County of Siskiyou v. Superior Court (Environmental Law Foundation) (2013) 217 Cal.App.4th 83, 91.)
Under either doctrine, “[a]n order of abatement issues as a matter of right[,] not as a matter of discretion[,] where the conditions for its issuance exist.” (Lawyers Title Ins. Corp. v. Superior Court (Harrigfeld) (1984) 151 Cal.App.3d 455, 460.)

III. Analysis

The circumstances here do not support a statutory plea in abatement given that the Ballesteros court has addressed only whether different claims were properly asserted by a different potential class representative. As plaintiff’s meal period claims were never actually at issue in Ballesteros, a judgment in that action would not bar the present action. (See Bridgeford v. Pacific Health Corp. (2012) 202 Cal.App.4th 1034, 1043 (hereinafter, “Bridgeford”) [order denying class certification does not have collateral estoppel effect; “if no class was certified by the court in the prior proceeding, the interests of absent putative class members were not represented”]; Bufil v. Dollar Financial Group, Inc. (2008) 162 Cal.App.4th 1193, 1204 [new class representative’s proposal of “a class that on its face attempts to correct flaws identified in [a prior putative class action] resulting in denial of certification” was not subject to issue preclusion].)

In its reply papers, defendant cites for the first time the opinion in Alvarez v. May Dept. Stores Co. (2006) 143 Cal.App.4th 1223 (hereinafter, “Alvarez”). In that case, the Court of Appeal for the Second District held—contrary to that court’s more recent opinion in Bridgeford—that an order denying class certification does have collateral estoppel effect. The Court finds Bridgeford to be the better-reasoned case, particularly since Bridgeford adopted the reasoning of the United States Supreme Court in Smith v. Bayer Corp. (2011) 564 U.S. 299 (an opinion issued after Alvarez was decided). Smith abrogated In re Bridgestone/Firestone, Inc., Tires Products Liability Litigation (7th Cir. 2003) 333 F.3d 763, a federal appellate decision upon which Alvarez relied.

A closer question than the statutory plea in abatement is whether exclusive concurrent jurisdiction applies. “Unlike the statutory plea of abatement, the rule of exclusive concurrent jurisdiction does not require absolute identity of parties, causes of action or remedies.” (Plant Insulation Co. v. Fibreboard Corp., supra, 224 Cal.App.3d at p. 788.) Still, “the issues in the two proceedings must be substantially the same and the individual suits must have the potential to result in conflicting judgments” for the rule to apply. (County of Siskiyou v. Superior Court, supra, 217 Cal.App.4th at p. 91.)

Given how the Ballesteros case has developed, these requirements are not satisfied here. Even assuming that the appellate court agrees with the Ballesteros plaintiff and revives his PAGA wage statement claim, the class claims have been struck from the operative complaint in that action, and class claims asserting meal period violations were never part of any operative pleading therein. The issues raised by the Ballesteros PAGA claim, which involve asserted technical defects in defendant’s wage statements, are distinct from those raised in this action, and the potential for conflicting judgments is minimal.

The Court is unaware of any published authorities addressing the application of the rule of exclusive concurrent jurisdiction to putative class actions. While it is sensitive to defendant’s concerns about forum-shopping and harassment, these concerns do not, standing alone, warrant barring the plaintiff and putative class members in this action from proceeding with their claims. (See Smith v. Bayer Corp., supra, 564 U.S. at pp. 316-317 [recognizing “policy concerns relating to use of the class action device” to relitigate issues “by the simple expedient of changing the named plaintiff in the caption of the complaint,” but concluding that “our legal system generally relies on principles of stare decisis and comity among courts to mitigate the sometimes substantial costs of similar litigation brought by different plaintiffs” rather than binding nonparties to a decision in the first case].) The Court agrees with Bridgeford that, where no class has been certified, the interests of the plaintiff in this action and of the other putative class members were never represented by the Ballesteros plaintiff and cannot be held hostage to the resolution of an unrelated appeal in that case. This result would be expected if the plaintiffs were represented by different counsel; the Court finds no basis to reach a different result simply because they have the same counsel here.

IV. Conclusion and Order

In light of the above, the motion to stay is DENIED.

The Court will prepare the order.