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

*341 BROWN, J., Concurring.

I agree that the trial court did not abuse its discretion in concluding that the common issues predominate and in certifying this action for recovery of unpaid overtime as a class action. Because I find the majority’s reasoning less than clear, however, I write separately to explain my own reasons for reaching this conclusion.

“Because trial courts are ideally situated to evaluate the efficiencies and practicalities of permitting group action, they are afforded great discretion in granting or denying certification.” (Linder v. Thrifty Oil Co. (2000) 23 Cal.4th 429, 435 [ 97 Cal.Rptr.2d 179 , 2 P.3d 27 ].) As such, we generally will not disturb a trial court’s ruling on class certification unless: (1) the ruling is not supported by substantial evidence; (2) “improper criteria were used”; or (3) “erroneous legal assumptions were made.” (Richmond v. Dart Industries, Inc. (1981) 29 Cal.3d 462, 470 [ 174 Cal.Rptr. 515 , 629 P.2d 23 ] (Richmond).)

To obtain class certification, a party must establish, among other things, a “well-defined community of interest among the class members.” (Richmond, supra, 29 Cal.3d at p. 470 .) A well-defined community of interest exists if common questions of law and fact predominate. (Ibid.) Common issues may predominate even if “each member of the class must prove his separate claim to a portion of any recovery by the class . . . .” (Vasquez v. Superior Court (1971) 4 Cal.3d 800, 809 [ 94 Cal.Rptr. 796 , 484 P.2d 964 ] (Vasquez).) But “each member must not be required to individually litigate numerous and substantial questions to determine his right to recover following the class judgment; and the issues which may be jointly tried, when compared with those requiring separate adjudication, must be sufficiently numerous and substantial to make the class action advantageous to the judicial process and to the litigants.” (City of San Jose v. Superior Court (1974) 12 Cal.3d 447, 460 [ 115 Cal.Rptr. 797 , 525 P.2d 701 ].)

“In order to determine whether common questions of [law and] fact predominate the trial court must examine the issues framed by the pleadings and the law applicable to the causes of action alleged.” (Hicks v. Kaufman & Broad Home Corp. (2001) 89 Cal.App.4th 908, 916 [ 107 Cal.Rptr.2d 761 ].) I therefore begin my analysis by determining the issues and reviewing the law.

In their complaint, plaintiffs Robert Rocher and Connie Dahlin alleged that defendant Sav-on Drug Stores, Inc., misclassified its assistant managers (AM’s) and operating managers (OM’s) as exempt from the overtime wage laws. As a result, defendant improperly compensated plaintiffs and other similarly situated AM’s and OM’s as salaried managers and failed to pay them overtime compensation. Plaintiffs sought to certify as a class “all current and former salaried [OM’s] and current and former salaried [AM’s] employed by defendant ... in California at any time between April 3, 1996 *342 and June 22, 2001, inclusive.” Thus, the primary issue framed by the pleadings is whether defendant’s AM’s and OM’s are exempt from the statutory overtime provisions.

The question of whether defendant’s AM’s and OM’s are exempt employees “is, like other questions involving the application of legal categories, a mixed question of law and fact.” (Ramirez v. Yosemite Water Co. (1999) 20 Cal.4th 785, 794 [ 85 Cal.Rptr.2d 844 , 978 P.2d 2 ] (Ramirez).) In determining whether an employee is exempt, the trial court must inquire “into the realistic requirements of the job. In so doing, the court should consider, first and foremost, how the employee actually spends his or her time. But the trial court should also consider whether the employee’s practice diverges from the employer’s realistic expectations, whether there was any concrete expression of employer displeasure over an employee’s substandard performance, and whether these expressions were themselves realistic given the actual overall requirements of the job.” (Id. at p. 802.) “[Ejxemptions from statutory mandatory overtime provisions are narrowly construed.” (Id. at p. 794.) “Moreover, the assertion of an exemption from the overtime laws is considered to be an affirmative defense, and therefore the employer bears the burden of proving the employee’s exemption.” (Id. at pp. 794-795.)

With this framework in mind, I now turn to the question presented on appeal; whether there is substantial evidence to support the trial court’s finding that the common issues of law and fact predominate. After carefully reviewing the evidence in the record in light of the relevant law, I conclude that there is substantial evidence to support the trial court’s finding.

As an initial matter, the issue of whether defendant intentionally misclassified its managers as exempt employees is an issue common to both the AM and OM classes. This issue is not, by itself, sufficient to support the trial court’s finding that the common issues predominate, because plaintiffs would still have to prove both liability and damages subsequent to the class judgment. (See City of San Jose v. Superior Court, supra, 12 Cal.3d at p. 463 [“Only in an extraordinary situation would a class action be justified where, subsequent to the class judgment, the members would be required to individually prove not only damages but also liability”].) But the existence of this common issue certainly supports the trial court’s finding.

A review of the record then provides the additional evidence needed to substantiate the trial court’s finding. With respect to the AM class, the declarations from individual AM’s and OM’s submitted by plaintiffs constitute substantial evidence that the common issues predominate. According to these declarants, defendant consistently required AM’s to work over 40 hours a week. A former general manager and OM further averred that, based on *343 their years of experience at different stores owned and operated by defendant, “[t]he type of work performed by [AM’s] does not vary by store. Each Sav-on store was and is operated in the same manner, and require[s] the same essential work, as one might expect in a chain of retail stores. Therefore, the actual work performed by [AM’s] on a daily basis was virtually identical in Sav-on stores, and remains so.” These declarations provide substantial evidence that the realistic requirements of the AM job are identical for all AM’s and that AM’s, on average, spend the same amount of time on the same types of tasks. Defendant’s subsequent and independent decision to reclassify all AM’s as nonexempt employees entitled to overtime compensation bolsters this conclusion. Accordingly, the trial court did not abuse its discretion in finding that the common issues predominate with respect to the AM class.

The same reasoning does not, however, apply to the OM class. While plaintiffs submitted multiple declarations attesting to the work and duties of AM’s, they submitted no declarations attesting to the work and duties of OM’s. Indeed, the only evidence in the record demonstrating that all OM’s spend the same amount of time performing the same types of tasks comes from the special interrogatory responses of Rocher. But these statements are not sufficient to support the trial court’s findings as to the OM class. Rocher merely states that he—and no other OM—spent over 50 percent of his time on nonexempt activities. And although Rocher asserts that “[defendant has an expressed policy and practice of requiring [OM’s] to . . . spend a majority of their time performing nonexempt tasks,” he provides no foundation or evidentiary support for this assertion. As such, his interrogatory responses are too qualified and conclusory to support the trial court’s finding that plaintiffs will be able to establish defendant’s liability for overtime compensation to the OM’s by common evidence. (See Lockheed Martin Corp. v. Superior Court (2003) 29 Cal.4th 1096, 1111 [ 131 Cal.Rptr.2d 1 , 63 P.3d 913 ] (plur. opn. of Werdegar, J.) [holding that the evidence is “too qualified, tentative and conclusionary to constitute substantial evidence” in support of class certification]; see also Lockheed Martin, at p. 1114 (conc. opn. of Brown, J.).)

Nonetheless, a careful review of the record reveals substantial evidence to support the trial court’s finding with respect to the OM class. In Ramirez , we suggested that the classification of tasks as exempt or nonexempt may be susceptible to common proof. (See Ramirez, supra, 20 Cal.4th at p. 803, fn. 5 .) This appears to be especially true in this case where, as demonstrated by defendant’s own evidence, the OM’s perform a finite number of tasks on a regular basis. The record further indicates that plaintiffs and defendant disagree over the classification of many of the tasks regularly performed by *344 OM’s. 1 Given the number and significance of the tasks in dispute, the trial court could reasonably conclude that the proper classification of these tasks, when combined with the classifications agreed upon by the parties, will largely resolve the issue of whether all OM’s should be classified as exempt or nonexempt employees. 2 Finally, many of the variables that, according to defendant, render the OM’s inappropriate for class treatment—like store type, store size, and the number of store employees—may form the basis for appropriate subclasses. The trial court could reasonably conclude that the creation of these subclasses would sufficiently reduce the need for individual litigation as to each member of the class. (See Vasquez, supra, 4 Cal.3d at p. 821 [noting that the creation of subclasses may promote the efficiency of a class action].) Accordingly, I find that the trial court did not abuse its discretion in certifying the class of AM’s and OM’s and join the majority in reversing the judgment of the Court of Appeal.

Defining the precise contours of their disagreement is somewhat difficult due to the vagueness of the parties’ descriptions of the tasks regularly performed by OM’s. But, at a minimum, the parties appear to disagree over whether the following tasks should be classified as exempt or nonexempt: merchandising, the unloading/movement of inventory, customer service, cash handling, finance-related activities, and the opening/closing of the store.

The same reasoning applies to the AM class as well.