Wesson v. Staples the Office Superstore, LLC

Filed 9/9/21
CERTIFIED FOR PARTIAL PUBLICATION*
IN THE COURT OF APPEAL OF THE STATE OF
CALIFORNIA
SECOND APPELLATE DISTRICT
DIVISION FOUR
FRED WESSON, B302988
Plaintiff and Appellant, (Los Angeles County
Super. Ct. No. BC593889)
v.
STAPLES THE OFFICE
SUPERSTORE, LLC,
Defendant and Respondent.
APPEAL from orders of the Superior Court of Los
Angeles County, Carolyn B. Kuhl, Judge. Affirmed.
* Pursuant to California Rules of Court, rules 8.1100 and
8.1110, this opinion is certified for publication with the exception
of part B of the Discussion.
Schneider Wallace Cottrell Konecky, Todd M.
Schneider, Carolyn H. Cottrell and David C. Leimbach;
Boucher, Raymond P. Boucher and Maria L. Weitz, for
Plaintiff and Appellant.
Morrison & Foerster, Tritia M. Murata, David P. Zins
and Maya Harel, Karen J. Kubin and James R. Sigel, for
Defendant and Respondent.
_________________________________________
INTRODUCTION
This appeal raises a question of first impression:
whether trial courts have inherent authority to ensure that
PAGA claims will be manageable at trial, and to strike such
claims if they cannot be managed. We hold that courts
possess this authority.
Appellant Fred Wesson worked for respondent Staples
the Office Superstore, LLC (Staples) as a store general
manager (GM). He brought this action against Staples,
asserting, among other things, a representative claim under
the Private Attorneys General Act of 2004 (PAGA) (Lab.
Code, § 2698 et seq.) on behalf of himself and 345 other
current and former Staples GMs in California. In his PAGA
claim, Wesson sought almost $36 million in civil penalties
for alleged Labor Code violations, all premised on the theory
that Staples had misclassified its GMs as exempt executives.
Staples moved to strike Wesson’s PAGA claim, arguing
that given the number of employees it covered and the
2
nature of his allegations, the action would be
“unmanageable” and would violate Staples’s due process
rights. It contended that its intended affirmative defense --
that it properly classified its GMs as exempt and thus
committed no Labor Code violations -- would require
individualized proof as to each GM, and thus that the claim
could not be fairly and efficiently litigated. In his opposition,
Wesson contended that the trial court lacked authority to
ensure that PAGA actions are manageable, and argued that
even if the court had such authority, it was sufficient that
his prima facie case was manageable; whether Staples’s
affirmative defense could be managed at trial, Wesson
contended, was irrelevant. While Staples’s motion was
pending, Wesson moved for summary adjudication of his
PAGA claim.
The trial court invited Wesson to submit a trial plan
showing that his PAGA action would be manageable at trial.
In response, Wesson continued to insist that the court lacked
authority to require that his claim be manageable, and laid
out his plan to prove his prima facie case using common
proof, but declined to address how the parties could litigate
Staples’s affirmative defense. Following this response, the
court concluded that the PAGA claim could not be managed
at trial and granted Staples’s motion to strike it. Given this
ruling, the court found no need to consider Wesson’s motion
for summary adjudication as to his PAGA claim and denied
the motion.
3
Wesson challenges both rulings on appeal. He claims
the court erred in failing to consider his motion for summary
adjudication, as it had the potential to narrow the issues and
make the action more manageable. He contends the court
should have granted his motion because Staples had failed to
provide individualized evidence in support of its exemption
defense, at least as to some GMs. As to Staples’s motion to
strike, Wesson repeats his arguments that the court had no
authority to strike his PAGA claim as unmanageable, and
that any manageability assessment need not have
considered Staples’s affirmative defense. He adds that
Staples had no due process right to present individualized
evidence in support of its defense.
In the unpublished portion of this opinion, we conclude
that Wesson was not entitled to summary adjudication, as
Staples presented sufficient evidence to support its
exemption defense as to all GMs. In the published portion,
we draw on established principles of the courts’ inherent
authority to manage litigation, including ensuring the
manageability of representative claims, and conclude that:
(1) courts have inherent authority to ensure that PAGA
claims can be fairly and efficiently tried and, if necessary,
may strike claims that cannot be rendered manageable; (2)
as a matter of due process, defendants are entitled to a fair
opportunity to litigate available affirmative defenses, and a
court’s manageability assessment should account for them;
and (3) given the state of the record and Wesson’s lack of
cooperation with the trial court’s manageability inquiry, the
4
court did not abuse its discretion in striking his PAGA claim
as unmanageable. We therefore affirm.
BACKGROUND
A. Wesson’s Action and the Denial of Class Certification
Staples is a global provider of office products and
services to individuals and businesses. As of 2019, it
operated about 150 big-box stores in California. Each
Staples store is managed by a GM. Wesson was the GM of
various Staples stores in Los Angeles County between 2006
and 2016.
In 2015, Wesson brought this action against Staples,
alleging causes of action for, inter alia, unpaid overtime and
failure to provide rest and meal periods. He later amended
his complaint to add a cause of action seeking civil penalties
under PAGA. Wesson’s PAGA claim covered 346 Staples
GMs, including Wesson, and sought almost $36 million in
civil penalties under the Labor Code. Each of Wesson’s
claims was premised on the theory that Staples had
misclassified its California GMs as exempt executives (who
are not entitled to overtime pay and off-duty meal and rest
periods), when in fact they should have been classified as
non-exempt, hourly employees.
Wesson moved to certify a class of Staples California
GMs, but the trial court denied the motion, concluding he
had not demonstrated that his claims were susceptible to
common proof. The court found that important factual
questions relating to whether GMs spent most of their
5
worktime doing exempt, managerial tasks could not be
resolved on a classwide basis.1 It reasoned that there was
too much variation in how Staples GMs performed their jobs
and the extent to which they performed non-managerial
tasks. Wesson does not challenge this ruling on appeal.
B. Staples’s Motion to Strike the PAGA Claim as
Unmanageable
Following the court’s denial of class certification,
Staples moved to strike Wesson’s PAGA claim, invoking the
court’s inherent authority to manage complex litigation. It
argued the claim would be unmanageable at trial and would
violate Staples’s due process rights. In support, Staples
pointed to evidence that the GM position was not
standardized, and that there was great variation in how
Staples GMs performed their jobs and the extent to which
they performed non-exempt tasks. According to Staples’s
evidence, Staples stores varied widely in size, sales volume,
staffing levels, labor budgets, store hours, customer-traffic
levels, products and services offered for sale, and many other
variables, all of which affected GMs’ work experience.
Staples’s evidence also tended to show that how GMs spent
their time depended on their experience, aptitude, and
1 As explained below, the executive exemption generally
requires that the employee spend the majority of his or her time
doing exempt work, meaning managerial tasks and other closely
related functions. (See Safeway Wage & Hour Cases (2019) 43
Cal.App.5th 665, 676-678 (Safeway).)
6
managerial approaches, as well as the size and composition
of their management teams. Relying on this evidence and on
the trial court’s findings in denying class certification,
Staples argued that Wesson’s claims would require
individualized assessments of each GM’s classification, and
would lead to “an unmanageable mess” that “would waste
the time and resources of the Court and the parties.”
In his opposition, Wesson contended that the trial
court lacked authority to ensure that PAGA actions are
manageable. He argued that imposing a manageability
requirement would immunize employers from liability and
defeat PAGA’s purpose. Alternatively, Wesson claimed that
even if the court could require that a PAGA claim be
manageable, it should consider only the ability to try
plaintiff’s prima facie case, not the manageability of any
affirmative defense.
Before ruling on the merits of Staples’s motion, the
trial court concluded it had inherent power to strike an
unmanageable PAGA claim. It then invited Wesson to
submit a trial plan showing that his claim would be
manageable, and permitted him to file a supplemental brief
in opposition to Staples’s motion.
C. Wesson’s Motion for Summary Adjudication
Shortly before Wesson was to submit his trial plan, he
moved for summary judgment or, in the alternative,
summary adjudication on his PAGA claim. We discuss the
parties’ respective evidence relating to Wesson’s motion in
7
the unpublished portion of this opinion addressing his
challenge to the court’s ruling on his motion.
D. Wesson’s Trial Plan and Supplemental Opposition to
Staples’s Motion to Strike
In his supplemental opposition to Staples’s motion to
strike his PAGA claim, Wesson reiterated his position that
the court lacked authority to ensure the manageability of his
claim. He also repeated his argument that any
manageability assessment should not consider Staples’s
affirmative defense. Wesson agreed that to litigate its
exemption defense, “Staples [would] need to proffer ‘a GM-
by-GM, week-by-week analysis’ throughout the entire
relevant time period that all of the GMs were properly
classified as exempt executives.” But he asserted that “a
manager misclassification PAGA claim is ‘manageable’ so
long as [the] plaintiff’s prima facie case, concerning each
aggrieved employee at issue, is provable by resort to common
evidence.”
In his trial plan, Wesson explained he intended to
prove up his prima facie case using common proof,
establishing that GMs did not receive off-duty meal and rest
breaks and worked overtime without receiving overtime pay.
However, he did not attempt to address how the parties
could litigate Staples’s exemption defense. He stated that it
would be improper for him to “dictate how Staples should go
about proving its exemption defense,” and that he would not
attempt to prevent Staples from proving its affirmative
8
defense as it saw fit. According to Wesson’s trial plan,
Staples would “be permitted to present whatever evidence it
want[ed], be it testimony of GMs, supervisors, corporate
representatives, documentary evidence of Staples’ policies,
procedures, and expectations, or any other evidence Staples
deem[ed] necessary.” At a subsequent hearing on Staples’s
motion, the parties estimated they would need a total of six
trial days per GM to litigate GMs’ classification as exempt
executives on an individual basis. Based on that estimate,
the trial would have lasted eight years.
E. The Trial Court’s Rulings
The trial court ultimately granted Staples’s motion to
strike Wesson’s PAGA claim. The court reiterated its
conclusion that it had authority to ensure the manageability
of a PAGA claim, reasoning that courts have inherent
powers to control litigation before them and that PAGA was
a procedural vehicle, rather than a substantive claim. It
found additional support for its conclusion in the courts’
imposition of judicially created manageability requirements
in the context of class actions and representative Unfair
Competition Law (UCL) claims.
The court then proceeded to find Wesson’s PAGA claim
unmanageable. It emphasized that Wesson’s trial plan did
not address how the parties might litigate Staples’s
affirmative defense, and noted its prior findings, in denying
class certification, regarding the great variation in how
Staples GMs performed their jobs and the extent to which
9
they perform non-managerial tasks. The trial court found no
evidence that Staples’s defense could be litigated through
common proof. Noting the parties’ estimates of the time they
would need to litigate the exemption defense, the court
stated that even cutting those estimates in half would result
in a trial lasting more than four years. The court thus
concluded, “A four-year trial involving witnesses and
documents individually pertaining to each of 346 General
Managers does not meet any definition of manageability.”
In a separate order, the trial court denied Wesson’s
motion for summary judgment or summary adjudication. As
to Wesson’s PAGA claim, the court concluded that because it
decided to strike the claim, there was no need to address it.
Wesson timely appealed, challenging the court’s striking of
his PAGA claim and its denial of his motion for summary
adjudication.
DISCUSSION
A. Legal Background
1. PAGA
“‘The State’s labor law enforcement agencies -- the
Labor and Workforce Development Agency (LWDA) and its
constituent departments and divisions -- are authorized to
assess and collect civil penalties for specified violations of
the Labor Code committed by an employer.’” (Raines v.
Coastal Pacific Food Distributors, Inc. (2018) 23 Cal.App.5th
667, 673.) In 2003, citing inadequate funding for
10
enforcement of labor laws, the Legislature enacted PAGA to
“authorize[] an employee to bring an action for civil penalties
on behalf of the state against his or her employer for Labor
Code violations committed against the employee and fellow
employees, with most of the proceeds of that litigation going
to the state.” (Iskanian v. CLS Transportation Los Angeles,
LLC (2014) 59 Cal.4th 348, 360.) The statute was intended
“‘to punish and deter employer practices that violate the
rights of numerous employees under the Labor Code.’” (Id.
at 384.) Thus, a PAGA action “‘“is fundamentally a law
enforcement action”’ that ‘substitute[s] for an action brought
by the government itself.’” (Iskanian v. CLS Transportation
Los Angeles, LLC, supra, at 394, quoting Arias v. Superior
Court (2009) 46 Cal.4th 969, 986 (Arias).) A PAGA plaintiff
acts “as the proxy or agent of the state’s labor law
enforcement agencies.” (Arias, supra, at 986.) In other
words, PAGA is “simply a procedural statute allowing an
aggrieved employee to recover civil penalties . . . that
otherwise would be sought by state labor law enforcement
agencies.” (Amalgamated Transit Union, Local 1756,
AFL-CIO v. Superior Court (2009) 46 Cal.4th 993, 1003
(Amalgamated Transit Union).)
2. The Executive Exemption
Among the Labor Code provisions a PAGA plaintiff
may seek to enforce are those imposing overtime and rest
and meal period requirements. (See Lab. Code, §§ 226.7,
510-512, 1194, 2699.) As relevant here, California Industrial
11
Welfare Commission (IWC) Wage Order No. 7-2001, which
governs employees of the mercantile industry and is codified
in the California Code of Regulations, largely exempts
“executive” employees from these requirements.2 (IWC,
Wage Order No. 7-2001 (Jan. 1, 2001), Cal. Code Regs., tit. 8,
§ 11070, subd. 1(A).) This exemption is an affirmative
defense that the employer has the burden to prove.
(Safeway, supra, 43 Cal.App.5th at 671.)
To be an exempt executive, an employee must: (1) earn
a salary of at least twice the minimum wage for full-time
employment; (2) be involved in managing the enterprise or a
relevant department; (3) customarily and regularly direct
the work of two or more employees; (4) have the authority to
hire or fire, or have recommendations regarding such
matters receive particular weight; (5) customarily and
regularly exercise discretion and independent judgment; and
(6) be “primarily engaged in duties which meet the test of
the exemption.”3 (Cal. Code Regs., tit. 8, § 11070, subd.
2 It is undisputed that Staples is in the mercantile industry.
The IWC was defunded in 2004, but its wage orders remain in
effect. (Batze v. Safeway, Inc., (2017) 10 Cal.App.5th 440, 471, fn.
34.) The California Supreme Court has instructed that “[t]he
IWC’s wage orders are to be accorded the same dignity as
statutes.” (Brinker Restaurant Corp. v. Superior Court (2012) 53
Cal.4th 1004, 1027.)
3 For purposes of the wage order, “‘[p]rimarily’” means “more
than one-half the employee’s work time.” (Cal. Code Regs., tit. 8,
§ 11070, subd. 2(K).) Other exemptions include a similar
requirement that employees spend most of their time on
(Fn. is continued on the next page.)
12
1(A)(1).) The wage order defines the “duties which meet the
test of the exemption” by reference to corresponding federal
regulations. (Id., § 11070, subd. (1)(A)(1)(e) [referring to 29
C.F.R. §§ 541.102, 541.104-111 & 541.115-116 (2001)].)
Under the relevant federal regulations, managerial
and supervisory tasks within the scope of the exemption are
generally “‘easily recognized’” and include such tasks as:
“‘[i]nterviewing, selecting, and training of employees; setting
and adjusting their rates of pay and hours of work; directing
their work; maintaining their production or sales records for
use in supervision or control; appraising their productivity
and efficiency for the purpose of recommending promotions
or other changes in their status; handling their complaints
and grievances and disciplining them when necessary;
planning the work; determining the techniques to be used;
[and] apportioning the work among the workers . . . .’”
(Safeway, supra, 43 Cal.App.5th at 676-677, quoting 29
C.F.R. §§ 541.102(a) & (b) (2001).) The federal regulations
also recognize a category of exempt tasks that may not be so
easily identifiable as exempt: tasks that are not inherently
managerial or supervisory but are “‘directly and closely
appropriate duties under the relevant exemption. (See, e.g., id.,
§ 11070, subds. 1(A)(2)(f) [administrative exemption], 1(A)(3)(b)
[professional exemption], (2)(J) [outside salesperson exemption].)
13
related’” to those functions.4 (Safeway at 677, quoting
§ 541.108 (2001).)
By contrast, non-exempt work includes all work that is
neither management or supervision nor directly and closely
related to those functions. (Safeway, supra, 43 Cal.App.5th
at 678.) “‘[I]n the usual case, it consists of work of the same
nature as that performed by the nonexempt subordinates of
the “executive.”’” (Ibid., quoting 29 C.F.R. § 541.111(b)
(2001).)
4 The regulations provide examples of tasks that may be
“directly and closely related” to managerial or supervisory
functions:
“(b) Keeping basic records of working time . . . is frequently
performed by a timekeeper employed for that purpose. In such
cases the work is clearly not exempt in nature. In other
establishments which are not large enough to employ a
timekeeper, or in which the timekeeping function has been
decentralized, the supervisor of each department keeps the basic
time records of his own subordinates. In these instances, . . . the
timekeeping is directly related to the function of managing the
particular department and supervising its employees. . . .
“(c) Another example of work which may be directly and closely
related to the performance of management duties is the
distribution of materials or merchandise and supplies. . . . In
[some] establishments it is not uncommon to leave the actual
distribution of materials and supplies in the hands of the
supervisor. In such cases it is exempt work since it is directly
and closely related to the managerial responsibility of
maintaining the flow of materials. . . .” (29 C.F.R. § 541.108
(2001).)
14
In determining whether an employee is “primarily
engaged” in exempt duties under the IWC wage order, the
“first and foremost” consideration is the “work actually
performed by the employee during the course of the
workweek . . . .” (Cal. Code Regs., tit. 8, § 11070, subd.
1(A)(1)(e).) However, a factfinder must also consider “the
employer’s realistic expectations and the realistic
requirements of the job . . . .” (Ibid.) As our Supreme Court
has explained in discussing the analogous “outside
salesperson” exemption, “an employee who is supposed to be
engaged in [exempt tasks] during most of his [or her]
working hours and falls below the 50 percent mark due to
his [or her] own substandard performance should not
thereby be able to evade a valid exemption.” (Ramirez v.
Yosemite Water Co. (1999) 20 Cal.4th 785, 802 (Ramirez).) A
factfinder should therefore “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.” (Ibid.)
B. Wesson’s Motion for Summary Adjudication
Wesson argues the trial court erred in denying his
summary adjudication motion without considering it. He
contends that because ruling on his motion could have
obviated or altered the court’s manageability assessment,
the court was required to consider it before reaching
15
Staples’s motion to strike his PAGA claim. Assuming
arguendo that the trial court erred in failing to consider
Wesson’s summary adjudication motion as to the PAGA
claim, we conclude the motion failed on the merits.
1. Factual Background
In support of summary adjudication on his PAGA
claim, Wesson provided GMs’ work schedules, Staples policy
documents, and deposition testimony by Staples’s corporate
designee to prove that all 346 GMs worked overtime but
received no overtime pay and no off-duty meal and rest
periods. He also offered the declarations of 31 current and
former Staples GMs, in addition to his own declaration.5
Wesson and the other declarants all stated, inter alia, that
they spent most of their worktime as GMs doing the same
non-managerial work their non-exempt subordinates did and
could not realistically do their job any other way due to
Staples’s rigid limitations on hiring hourly employees and
tight labor budgets.
In opposition, Staples submitted declarations from two
of its regional vice presidents, Laurence Newell, Jr. and
Timothy Bernicke, whose combined regions included almost
250 Staples stores. The two regional vice presidents
described Staples stores as large-scale and complex
5 It is undisputed that of the 31 GMs who provided
declarations in support of Wesson’s action, 19 had left Staples
before the period relevant to his PAGA claim.
16
operations with multiple departments who all reported to
the GM. Newell noted that stores had anywhere between
“around 10 to 12 Associates on the low end” and “around 40
Associates on the high end . . . .” According to both
declarants, the GM was the only exempt employee in any
given store. As to GMs’ salaries, Newell testified they were
paid $50,000-$100,000, plus bonuses.
Newell and Bernicke provided extensive descriptions of
GMs’ job responsibilities, which included numerous
inherently managerial functions. Both testified that GMs
were ultimately responsible for all aspects of their stores’
operations: they were required to assess the stores’ financial
performance and develop strategies to maximize
profitability. GMs developed their own strategies regarding
such issues as product placement, marketing and
networking, and response to competition. GMs were also
responsible for hiring, training, and coaching staff,
scheduling and assigning work, promoting employees, and
disciplining (including recommending termination), as
necessary.
According to Newell and Bernicke, there was great
variation in the way GMs performed their jobs and managed
their stores, as every store was different, every GM had his
or her own management style and strategic vision, and GMs
had complete discretion in deciding how to spend their time.
However, both asserted that Staples expected GMs to spend
most of their time managing their stores, and that those who
spent too much of their time doing non-managerial work
17
were counseled accordingly. They explained that each
Staples store had a customized labor budget, which GMs’
managerial decisions could impact. The labor budget was
designed to provide sufficient labor, so that hourly
employees would perform hourly work and GMs would
remain free to manage the stores.
Staples also provided declarations from 31 GMs,
including the GM who took over Wesson’s former store.
Consistent with the declarations of Newell and Bernicke,
these GMs testified that they spent the vast majority of their
time doing managerial work, that their labor budgets were
sufficient and did not require them to do a significant
amount of hourly work, and that Staples did not expect them
to do hourly work. Some of these declarants opined that if a
GM did too much hourly work, it was because he or she was
mismanaging the store and accepting low-quality work from
subordinates. As noted, after deciding to strike his PAGA
claim, the trial court denied Wesson’s motion as it pertained
to that claim without considering it.
2. Governing Principles
“‘A summary adjudication motion is subject to the same
rules and procedures as a summary judgment motion.’”
(Case v. State Farm Mutual Automobile Ins. Co., Inc. (2018)
30 Cal.App.5th 397, 401.) “Summary judgment is
appropriate only ‘where no triable issue of material fact
exists and the moving party is entitled to judgment as a
matter of law.’” (Regents of University of California v.
18
Superior Court (2018) 4 Cal.5th 607, 618.) The moving party
bears the burden of persuasion that there is no triable issue
of material fact. (Aguilar v. Atlantic Richfield Co. (2001) 25
Cal.4th 826, 850.) We liberally construe the evidence in
support of the non-moving party and resolve evidentiary
doubts in its favor. (Hampton v. County of San Diego (2015)
62 Cal.4th 340, 347.)
We review the denial of summary adjudication de novo.
(Advanced-Tech Security Services, Inc. v. Superior Court
(2008) 163 Cal.App.4th 700, 705.) We will affirm the ruling
if it is correct based on any applicable theory. (See Capra v.
Capra (2020) 58 Cal.App.5th 1072, 1094 [“‘[A] ruling or
decision, itself correct in law, will not be disturbed on appeal
merely because given for a wrong reason’”].)
3. Analysis
Wesson was not entitled to summary adjudication
because Staples’s evidence created a triable issue as to each
GM’s proper classification as an exempt executive.6 The
declarations of Staples’s regional vice presidents, Newell and
Bernicke, evidenced that GMs (1) earned more than the
6 Given our conclusion, we need not address Staples’s
additional arguments that Wesson failed to establish his
standing to bring his PAGA claim as matter of law and that he
could not obtain summary adjudication as to only some GMs.
19
required salary ($50,000-$100,000, by Newell’s account),7
(2) managed their respective stores, (3) regularly directed
the work of two or more employees (between 10 and 40,
according to Newell), (4) had the authority to hire and
recommend termination,8 and (5) regularly exercised
discretion and independent judgment in managing their
stores (e.g., when hiring, training, and coaching staff,
scheduling and assigning work, and developing strategies
regarding product placement and marketing). (See Cal.
Code Regs., tit. 8, § 11070, subd. 1(A)(1).) This evidence
created triable issues on five of the exemption’s six elements.
Wesson’s sole contention to the contrary is that to
defeat summary adjudication, Staples was required to
provide evidence specific to each of the 346 relevant GMs.
However, he offers neither argument nor authority in
support of this proposition, and has therefore forfeited the
contention. (See Mansell v. Board of Administration (1994)
30 Cal.App.4th 539, 545 [“‘an appellate brief “should contain
a legal argument with citation of authorities on the points
made. If none is furnished on a particular point, the court
may treat it as waived, and pass it without consideration”’”].)
In any case, we see no reason why knowledgeable members
of a company’s senior management cannot testify about the
7 Wesson does not dispute that these amounts were more
than twice the minimum wage for full-time employment during
the relevant period.
8 Wesson also does not dispute that GMs’ recommendations
on termination decisions were entitled to particular weight.
20
characteristics of a certain class of employees, including
their salary, authority, responsibilities, and typical duties.
As to the remaining element of the exemption, Staples
provided sufficient evidence to show that under its realistic
expectations and the realistic requirements of the job, GMs
were to spend most their time on managerial tasks. In their
declarations, Newell and Bernicke extensively discussed
GMs’ managerial job duties and explained that GMs were
responsible for all aspects of their stores’ operations. They
testified that Staples expected GMs to spend most of their
time managing their stores, that the stores’ labor budgets
were designed to provide sufficient labor and allow GMs to
spend their time doing managerial work, and that those who
spent too much of their time doing non-managerial work
were counseled accordingly.
The declarations Staples provided from 31 GMs further
evidenced that Staples expected GMs to spend their time on
managerial tasks and that its expectation was realistic.
These GMs all testified that they spent the vast majority of
their time on managerial work, that this was consistent with
Staples’s expectations, and that their labor budgets were
sufficient and did not require them to spend much time on
hourly work. Some of these Staples GMs opined that
excessive hourly work by a GM signified that the GM was
mismanaging the store and its employees.
The evidence therefore tended to show that Staples
expected its GMs to spend most of their time managing their
stores, that this expectation was realistic, that any GM who
21
failed to meet this expectation did so due to his or her own
substandard performance, and that Staples would express
its displeasure over such performance. On this showing, a
reasonable factfinder could conclude that Staples properly
treated all its GMs as exempt executives based on its
“realistic expectations and the realistic requirements of the
job . . . .” (Cal. Code Regs., tit. 8, § 11070, subd. 1(A)(1)(e);
accord, Ramirez, supra, 20 Cal.4th at 802.)
Wesson argues that Staples was required to provide
individualized evidence as to how each of the 346 GMs
actually spent their time, the “first and foremost”
consideration under the IWC’s wage order. (Cal. Code Regs.,
tit. 8, § 11070, subd. 1(A)(1)(e).) Yet our Supreme Court has
made clear that this consideration is not dispositive,
explaining that employees who are supposed to spend most
of their time on exempt tasks, but do not do so due to their
own “substandard performance,” should not be able to evade
a valid exemption.9 (Ramirez, supra, 20 Cal.4th at 802.) As
9 We reject Wesson’s suggestion that Duran v. U.S. Bank
National Assn. (2014) 59 Cal.4th 1, 26 (Duran) supports his
position, as that case did not address the parties’ respective
burdens of production on summary adjudication, let alone hold
that to avoid summary adjudication, an employer must provide
proof of how each of hundreds of individual employees actually
spent his or her time. As explained, Ramirez establishes that an
employee’s work habits are not dispositive. Indeed, Justice Liu’s
special concurrence in Duran, which joined the court’s opinion in
full, stated that “‘the employer’s realistic expectations’ or ‘the
(Fn. is continued on the next page.)
22
discussed, Staples provided evidence that it realistically
expected all its GMs to spend most of their time on
managerial tasks, and that to the extent any GMs failed to
do so, it was due to their own substandard performance. In
short, Wesson was not entitled to summary adjudication on
his PAGA claim.
C. Staples’s Motion to Strike Wesson’s PAGA Claim
Wesson claims the trial court erred in striking his
claim as unmanageable. He asserts that the court lacked
authority to ensure the manageability of a PAGA action
because, inter alia, a manageability assessment would
violate PAGA’s procedures, conflict with California Supreme
Court precedent, and undermine PAGA’s objectives.
Alternatively, Wesson contends that the court erred in
determining that his claim was unmanageable.
No published California decision has considered trial
courts’ power to ensure the manageability of PAGA claims.10
realistic requirements of the job’” were “the ultimate issue” in
assessing the exemption’s applicability. (Duran, supra, at 53.)
10 Federal district courts applying California law have split on
whether courts possess inherent authority to strike PAGA claims
as unmanageable. (Compare, e.g., Salazar v. McDonald’s Corp.
(N.D.Cal., Jan. 5, 2017, No. 14-cv-02096-RS) 2017
U.S.Dist.LEXIS 9641, at *26 [relying on California cases
involving representative UCL claims in concluding that
California courts would exercise inherent power to strike
unmanageable PAGA claims]; Ortiz v. CVS Caremark Corp.
(Fn. is continued on the next page.)
23
We conclude that courts have inherent authority to ensure
that a PAGA claim will be manageable at trial -- including
the power to strike the claim, if necessary -- and that this
authority is not inconsistent with PAGA’s procedures and
objectives, or with applicable precedent. Moreover, on the
record before us, we conclude the trial court did not abuse its
discretion in striking Wesson’s claim as unmanageable.
(N.D.Cal., May 30, 2014, No. C -12-05859 EDL) 2014
U.S.Dist.LEXIS 198344, at *7 [striking PAGA claim based on
court’s “inherent authority to control its cases”]; and Raphael v.
Tesoro Refining & Marketing Co. LLC (C.D.Cal., Sept. 25, 2015,
Case No. 2:15-cv-02862-ODW) 2015 U.S.Dist. Lexis 130532, at
*6-*7 [striking PAGA claim as unmanageable where court “would
have to engage in a multitude of individualized inquiries” to
assess alleged violations as to thousands of employees]; with, e.g.,
Plaisted v. Dress Barn, Inc. (C.D.Cal., Sep. 20, 2012, Case No.
2:12-cv-01679-ODW (SHx)) 2012 U.S.Dist. LEXIS 135599, at
*9-*10 [manageability requirement would obliterate PAGA’s
purpose]; Zackaria v. Wal-Mart Stores, Inc. (C.D.Cal. 2015) 142
F. Supp. 3d 949, 959 manageability requirement is “inconsistent
with PAGA’s purpose and statutory scheme”]; and Zayers v.
Kiewit Infrastructure W. Co. (C.D.Cal., Nov. 9, 2017, No.
16-CV-06405 PSG (PJW)) 2017 U.S.Dist. LEXIS 216715, at *29
[same].) Cases finding courts lack inherent authority have
generally concluded that a manageability requirement would be
inconsistent with PAGA’s purposes. (See, e.g., Zackaria v.
Wal-Mart Stores, Inc., supra, at 959.) We discuss below why we
find this reasoning unpersuasive.
24
1. Legal Background
a. Courts Have Inherent Authority to
Manage Proceedings Before Them
“From their creation by article VI, section 1 of the
California Constitution, California courts received broad
inherent power . . . .” (Stephen Slesinger, Inc. v. Walt Disney
Co. (2007) 155 Cal.App.4th 736, 758 (Slesinger).) “This
inherent power includes ‘fundamental inherent equity,
supervisory, and administrative powers, as well as inherent
power to control litigation.’” (Ibid., quoting Rutherford v.
Owens-Illinois, Inc. (1997) 16 Cal.4th 953, 967.)
The courts’ inherent authority “‘“arises from necessity
where, in the absence of any previously established
procedural rule, rights would be lost or the court would be
unable to function.”’” (Weiss v. People ex rel. Dept. of
Transportation (2020) 9 Cal.5th 840, 863 (Weiss).) Thus,
California courts have recognized that “‘“‘judges must be
permitted to bring management power to bear upon massive
and complex litigation to prevent it from monopolizing the
services of the court to the exclusion of other litigants.’”’”
(Cohn v. Corinthian Colleges, Inc. (2008) 169 Cal.App.4th
523, 531 (Cohn); accord, First State Insurance Co. v. Superior
Court (2000) 79 Cal.App.4th 324, 334.) Similarly, courts
may exercise their inherent authority to fashion procedures
and remedies as necessary to protect litigants’ rights and the
fairness of trial, including by terminating the litigation. (See
Slesinger, supra, 155 Cal.App.4th at 740, 762 [absent
alternative that would ensure fair trial, courts have inherent
25
power to impose terminating sanction for egregious
misconduct].) The courts’ inherent authority is not
boundless, of course, and may be exercised only to the extent
it is not inconsistent with the federal or state constitutions,
or California statutory law. (Ibid.)
b. Courts Have Exercised Their Authority
to Ensure the Manageability of
Representative Actions
California courts have exercised their inherent powers
to preclude representative claims where a trial of those
claims would be unmanageable. In the class action context,
the courts have required class action proponents to
demonstrate that “litigation of individual issues, including
those arising from affirmative defenses, can be managed
fairly and efficiently.” (Duran, supra, 59 Cal.4th at 28-29;
accord, Washington Mutual Bank v. Superior Court (2001)
24 Cal.4th 906, 922 (Washington Mutual) [class action
proponent must demonstrate manageability], citing, e.g.,
Canon U.S.A., Inc. v. Superior Court (1998) 68 Cal.App.4th
1, 5 (Canon) and Rose v. Medtronics, Inc. (1980) 107
Cal.App.3d 150, 157 (Rose).) The statutory provision that
authorizes class actions, Code of Civil Procedure section 382,
contains no such requirement.11
11 Code of Civil Procedure section 382 provides: “[W]hen the
question is one of a common or general interest, of many persons,
or when the parties are numerous, and it is impracticable to
(Fn. is continued on the next page.)
26
Similarly, at least one Court of Appeal approved a trial
court’s use of its inherent authority to bar a representative
pre-2004 UCL claim as unmanageable.12 In South Bay
Chevrolet v. General Motors Acceptance Corp. (1999) 72
Cal.App.4th 861 (South Bay Chevrolet), the plaintiff sought
to advance a representative UCL claim on behalf of a certain
class of California automotive dealers. (South Bay
Chevrolet, supra, at 869.) After the plaintiff presented its
bring them all before the court, one or more may sue or defend for
the benefit of all.” The courts have developed other class action
requirements that find no mention in this provision, including
“the typicality of claims, the ability of the named plaintiff to
provide fair and adequate representation, the superiority of a
class action over other methods of adjudication, . . . and the
requirement of notice.” (Arias, supra, 46 Cal.4th at 989, fn. 3
(conc. opn. of Werdegar, J.).)
Wesson argues that the courts’ power to require
manageability in class actions derives from California Rule of
Court 3.767 -- which empowers them to strike allegations as to
representation of absent persons in class action pleadings --
rather than from their inherent authority. However, this rule
was adopted only in 2002, long after California courts began
requiring putative class action plaintiffs to demonstrate their
actions would be manageable at trial. (See, e.g., Canon, supra, 68
Cal.App.4th at 5; Rose, supra, 107 Cal.App.3d at 157.)
Demonstrably, the courts’ authority did not stem from this rule.
12 Before 2004, any person could assert representative UCL
claims, including for restitution, without satisfying class action
requirements. (See former Bus. & Prof. Code, §§ 17203, 17204;
Arias, supra, 46 Cal.4th at 977.) In 2004, Proposition 64
amended the UCL to require that representative actions comply
with class action requirements. (Arias, supra, at 977.)
27
case at trial, the trial court granted the defendant’s motion
for judgment under Code of Civil Procedure section 631.8,
finding that the plaintiff offered no evidence that the
dealerships were similarly situated, and thus that due to
uniquely individual questions of fact, minitrials would be
necessary with respect to each dealership. (South Bay
Chevrolet, supra, at 869, 891.) Although the statutory
provision that authorized representative UCL suits included
no manageability requirement (see former Bus. & Prof.
Code, § 17204), the court concluded that the plaintiff’s
representative action “‘could not be efficiently tried’” and
was therefore “‘not appropriate’” (South Bay Chevrolet, at
891). The Court of Appeal affirmed, holding that the trial
court had “acted within its discretion” because the evidence
was “not sufficiently uniform to allow representative
treatment . . . .”13 (Id. at 897.)
13 Wesson contends that UCL precedents involving
manageability requirements are not instructive in determining
courts’ authority in PAGA actions. He argues pre-2004
representative UCL claims were equitable in nature, and thus
that courts weighed equitable considerations in deciding if they
should proceed, and did so only in addressing the scope of
restitutionary relief. He also claims that unlike PAGA claims,
those UCL actions implicated the due process rights of
non-parties, whose interests were to be adjudicated.
In so arguing, Wesson fails to address South Bay Chevrolet,
despite the trial court’s reliance on it below and Staples’s reliance
on it on appeal. There, the trial court and the Court of Appeal
relied on neither uniquely equitable considerations, nor special
(Fn. is continued on the next page.)
28
Notably, in both the class action and the representative
UCL claim context, barring a claim as unmanageable does
not affect the parties’ substantive rights. Instead, this
remedy precludes the plaintiffs’ particular use of an
aggregation procedure, leaving in place any substantive
claim by an absent class member or UCL claimant. (See
Duran, supra, 59 Cal.4th at 29 [court considers “whether a
class action is a superior device for resolving a controversy”];
South Bay Chevrolet, supra, 72 Cal.App.4th at 897 [evidence
did not allow “representative treatment” of UCL claim].)
2. Trial Courts Have Inherent Authority to
Ensure that PAGA Claims Will Be Manageable
at Trial
Drawing on these principles of the courts’ inherent
authority to manage litigation, including ensuring the
manageability of representative claims, we conclude that
courts have inherent authority to ensure that PAGA claims
can be fairly and efficiently tried and, if necessary, may
strike a claim that cannot be rendered manageable. The
same concerns attendant to the fair and efficient trial of
representative claims apply in the context of PAGA actions.
characteristics of restitutionary relief, nor the due process rights
of non-parties. Rather, the courts cited the need for efficient trial
of the claims (South Bay Chevrolet, supra, 72 Cal.App.4th at 891,
897), a matter firmly within the courts’ generally applicable
inherent authority (see Weiss, supra, 9 Cal.5th at 863; Cohn,
supra, 169 Cal.App.4th at 531).
29
Under PAGA, an aggrieved employee may recover civil
penalties for Labor Code violations “on behalf of himself or
herself and other current or former employees . . . .” (Lab.
Code, § 2699, subd. (a).) A PAGA action may thus cover a
vast number of employees, each of whom may have markedly
different experiences relevant to the alleged violations.
Under those circumstances, determining whether the
employer committed Labor Code violations with respect to
each employee may raise practical difficulties and may prove
to be unmanageable.
Indeed, PAGA claims may well present more
significant manageability concerns than those involved in
class actions. By its terms, PAGA includes no general
requirement similar to the requirement in the class action
context, that the plaintiff establish a well-defined
community of interest, encompassing a showing that
common questions predominate over individual ones. (See
Washington Mutual, supra, 24 Cal.4th at 913 [discussing
class action requirements]; Williams v. Superior Court
(2017) 3 Cal.5th 531, 559 (Williams) [PAGA actions do not
require showing of uniform policy because “recovery on
behalf of the state and aggrieved employees may be had for
each violation, whether pursuant to a uniform policy or
not”].) Thus, a PAGA claim can cover disparate groups of
employees and involve different kinds of violations raising
distinct questions.
Although not addressing the question before us, the
California Supreme Court has acknowledged the potential
30
for manageability difficulties in PAGA actions. In Williams,
while rejecting a lower court’s suggestion that discovery in a
PAGA action could be made contingent on the plaintiff’s
ability to establish a uniform companywide policy, our
Supreme Court noted that uniform policies may play a role
in PAGA cases, explaining that “proof of a uniform policy is
one way a plaintiff might seek to render trial of the action
manageable.” (Williams, supra, 3 Cal.5th at 559.)
We do not believe a court is powerless to address the
challenges presented by large and complex PAGA actions
and is bound to hold dozens, hundreds, or thousands of
minitrials involving diverse questions, depending on the
breadth of the plaintiff’s claims. As explained above, courts
have inherent authority to manage litigation with the aim of
protecting the parties’ rights and the courts’ ability to
function. (See Weiss, supra, 9 Cal.5th at 863; Cohn, supra,
169 Cal.App.4th at 531.) Equipped with this tool, courts
dealing with representative claims pay close attention to
manageability issues and intervene to ensure that the claims
can be managed fairly and efficiently at trial. (See Duran,
supra, 59 Cal.4th at 28-29; South Bay Chevrolet, supra, 72
Cal.App.4th at 869.) If they cannot, the courts preclude
these aggregation procedures. (See Duran, at 28-29; South
Bay Chevrolet, at 869.) Given that PAGA actions involve
comparable or greater manageability concerns than other
representative claims, we hold that trial courts may
similarly exercise their inherent authority to ensure the
31
manageability of PAGA claims and, if necessary, may
preclude the use of this procedural device.14
3. Wesson’s Arguments to the Contrary Are
Unpersuasive
In support of his position that courts may not require
that PAGA claims be manageable at trial and may not strike
an unmanageable claim, Wesson contends: (1) Arias
precludes any manageability requirement in PAGA cases; (2)
existing PAGA procedures preclude judicial creation of
additional procedures, including a manageability
requirement; (3) a manageability assessment is inconsistent
with PAGA’s purposes; and (4) the state would not be subject
to a manageability requirement and thus PAGA plaintiffs,
acting as the state’s agents, should likewise be free from this
requirement. As discussed below, we find none of these
contentions convincing.
14 Wesson argues that a PAGA action is “a substantive claim
for civil penalties, owned by the State of California” and thus that
a PAGA claim “extinguishe[s] the State of California’s property
interests . . . .” (Italics omitted.) He is mistaken. As our
Supreme Court explained, PAGA is “simply a procedural statute
allowing an aggrieved employee to recover civil penalties . . . that
otherwise would be sought by state labor law enforcement
agencies.” (Amalgamated Transit Union, supra, 46 Cal.4th at
1003.) Preventing a plaintiff from using this procedure has no
effect on the state’s property rights; the state remains entitled to
recover civil penalties for any Labor Code violations by the
employer, subject to the applicable statute of limitations.
32
First, Wesson argues that requiring manageability in
PAGA cases would run afoul of the California Supreme
Court’s holding in Arias, supra, 46 Cal.4th at 975 that class
action requirements do not apply to PAGA actions. Not so.
In Arias, the trial court granted the defendants’ motion to
strike the plaintiff’s PAGA claim on the ground that he had
failed to comply with class action pleading requirements.
(Arias, supra, at 976.) After the Court of Appeal reversed
this ruling, the defendant urged our Supreme Court to
construe PAGA “as requiring that all actions under that act
be brought as class actions.” (Arias, at 984.) The high court
declined, holding that PAGA claims need not satisfy class
action requirements. (Arias, at 975.) In so doing, the court
noted that PAGA actions may be brought as class actions but
explained that at issue was “whether such actions must be
brought as class actions.” (Arias, at 992, fn. 5.) Thus, Arias
stands for the proposition that PAGA claims need not qualify
as class actions. Arias did not hold that any consideration
relevant to class action certification is necessarily irrelevant
in the context of PAGA. And nowhere did the court suggest
that trial courts could not limit or preclude an
unmanageable PAGA action, if necessary.
Second, Wesson contends that existing PAGA statutory
procedures preclude the judicial imposition of a
manageability requirement. Relying on In re Marriage of
Woolsey (2013) 220 Cal.App.4th 881 (Woolsey), he argues
that where a statute provides certain procedures, courts may
not add to them. Wesson notes that the sole provision
33
supplying procedural requirements for PAGA actions,
section 2699.3, requires only that a prospective PAGA
plaintiff inform the LWDA and the employer of the alleged
violations, pay the agency a filing fee, if applicable, and
await its decision on whether it will investigate the matter.
(See § 2699.3.) Yet it is the narrow scope of section 2699.3’s
requirements that defeats Wesson’s contention.
In Woolsey, the Court of Appeal held that courts could
not impose additional procedural requirements on marriage
settlements because the Legislature had already “imposed
specific requirements for settlement agreements and
provided an expedient method of enforcing them.” (Woolsey,
supra, 220 Cal.App.4th at 899.) According to the court, a
trial court’s refusal to enforce an agreement that complied
with these requirements would thwart the Legislature’s
intent. (Id. at 900.) By contrast, section 2699.3 imposes only
procedural preconditions to filing a PAGA suit, intended to
afford the LWDA an “opportunity to decide whether to
allocate scarce resources to an investigation . . . .” (Williams,
supra, 3 Cal.5th at 546.) This provision includes no
instruction relevant to the management of ongoing PAGA
litigation and reveals no legislative intent that would
preclude a court’s exercise of its authority in this area.
Third, Wesson asserts that assessing PAGA actions for
manageability would “‘obliterate’” their purpose. He argues
that PAGA’s punitive and deterrent objectives “cannot be
accomplished if the State’s claims are cast aside whenever
an employer complains that its uniform employment
34
decisions cannot be justified absent a burdensome
evidentiary showing.” We are unpersuaded.
Contrary to Wesson’s suggestion, ensuring the
manageability of claims is not tantamount to discarding
them on an employer’s mere objection. His argument
wrongly assumes that trial courts will be quick to deem
every PAGA claim hopelessly unmanageable. (See Mays v.
Wal-Mart Stores, Inc. (C.D.Cal., Nov. 1, 2018, Case No. CV
18-02318-AB (KKx)) 2018 U.S.Dist. LEXIS 223886, at *4,
*13-*23 [concluding court had authority to strike
unmanageable PAGA claims, but finding plaintiff’s claim
was manageable]; Brown v. Am. Airlines, Inc. (C.D.Cal., Oct.
5, 2015, CV 10-8431-AG (PJWx)) 2015 U.S.Dist. LEXIS
150672, at *10-11 [striking PAGA action only in part, after
finding that although some claims were not manageable,
claims relating to improper wage statements were
manageable].) As discussed below, trial courts have
discretion in assessing claims’ manageability at trial but
should not lightly strike even procedurally challenging
claims. And many PAGA actions will raise no substantial
manageability concerns, because of the number of employees
involved, the nature of contested issues, or other factors.
(Cf., e.g., Gonzalez v. Millard Mall Servs. (S.D.Cal., Aug. 21,
2012, Civil No. 09cv2076-AJB (WVG)) 2012 U.S.Dist. LEXIS
118133, at *2 [PAGA claim alleged defendants improperly
issued employees out-of-state paychecks]; Decker v. Allstates
Consulting Servs. (E.D.Cal., Dec. 30, 2020, No. 2:18-cv-
03216-KJM-DB) 2020 U.S.Dist. LEXIS 244823, at *2, *8
35
[PAGA claim alleged failure to pay wages in timely manner,
and failure to provide accurate itemized wage statements, as
to about 16 employees]; Mireles v. Paragon Sys. (S.D.Cal.,
Feb. 9, 2016, Case No. 13-cv-00122-L-BGS) 2016 U.S.Dist.
LEXIS 181284, at *11-*12 [PAGA notice alleged violations of
overtime and rest- and meal-period requirements as to 13
hourly employees].) That some claims may not be able to
proceed without limitation will not nullify PAGA’s objectives.
Finally, Wesson asserts that state agencies’ right to
maintain Labor Code enforcement proceedings cannot be
conditioned on manageability. Based on this premise, he
argues that because PAGA plaintiffs act as agents of the
state, they too should be free to maintain claims regardless
of manageability considerations. However, Wesson cites no
authority, and we are aware of none, privileging the state
above other civil litigants and exempting it from the courts’
inherent authority to manage the proceedings and ensure
fair and efficient administration of justice.15 While we think
it unlikely that the state, in exercising its prosecutorial
discretion, would choose to bring an unmanageable action
requiring individualized determinations as to hundreds or
thousands of differently situated employees, requiring years
15 Wesson discusses state agencies’ plenary power to
investigate Labor Code violations and asserts that they are not
subject to manageability criteria when “assesses[ing] whether an
employer violated the Labor Code . . . .” These matters are
irrelevant to the courts’ authority to ensure the manageability of
a trial.
36
of trial court time, we see no reason the court would not be
authorized to intervene should that occur.
As we conclude that courts possess the power to ensure
the manageability of PAGA claims at trial, including the
power to strike claims, if necessary, we turn to consider the
trial court’s decision to strike Wesson’s claim.
4. The Trial Court Did Not Abuse its Discretion
in Striking Wesson’s Claims as Unmanageable
a. Governing Principles
A court’s exercise of its inherent power to control the
proceedings before it, its assessment of manageability issues,
and its ruling on a motion to strike are all reviewed for
abuse of discretion. (San Francisco Unified School Dist. ex
rel. Contreras v. First Student, Inc. (2013) 213 Cal.App.4th
1212, 1227 [exercise of inherent power]; Duran, supra, 59
Cal.4th at 25 [manageability issues]; Brandwein v. Butler
(2013) 218 Cal.App.4th 1485, 1497 [motion to strike].) A
ruling constitutes an abuse of discretion when it is “‘so
irrational or arbitrary that no reasonable person could agree
with it.’” (Sargon Enterprises, Inc. v. University of Southern
California (2012) 55 Cal.4th 747, 773.)
As in other contexts, manageability in the context of
PAGA requires that individual issues can be tried fairly and
efficiently. (Cf. Duran, supra, 59 Cal.4th at 28-29; South
Bay Chevrolet, supra, 72 Cal.App.4th at 891, 897.) This
assessment will depend on the circumstances of the case,
and we do not believe any rigid rule can govern the court’s
37
assessment. In general, however, a need for individualized
proof pertaining to a very large number of employees will
raise manageability concerns. (See, e.g., Lopez v. Liberty
Mut. Ins. Co. (C.D.Cal., Feb. 11, 2020, Case No. 2:14-cv-
05576-AB-JCx) 2020 U.S.Dist. LEXIS 45634, at *15 [striking
PAGA claim as unmanageable because it “would require a
multitude of individualized assessments”]; Amiri v. Cox
Communs. Cal., LLC (C.D.Cal. 2017) 272 F.Supp.3d 1187,
1193 [PAGA claim may be unmanageable if it would require
“numerous individualized determinations”].)
In considering manageability issues, courts should
account for a defendant’s affirmative defenses. (Cf. Duran,
supra, 59 Cal.4th at 28-29 [“In certifying a class action, the
court must also conclude that litigation of individual issues,
including those arising from affirmative defenses, can be
managed fairly and efficiently”].) While trial courts “enjoy
great latitude in structuring trials,” a trial management
plan must allow the defendant a fair opportunity to present
a defense. (Id. at 33; accord, Philip Morris USA v. Williams
(2007) 549 U.S. 346, 353 [“the Due Process Clause prohibits
a State from punishing an individual without first providing
that individual with ‘an opportunity to present every
available defense’”].) In Duran, a putative class action
alleged that the defendant had improperly classified
employees as exempt outside salespersons, denying them
overtime pay in violation of the Labor Code. (Duran, supra,
at 12.) The trial court certified a class of 260 plaintiffs and
adopted a plan to determine the extent of the defendant’s
38
liability by extrapolating from a sample of 20 employees,
without a valid statistical model. (Id. at 16, 33.) The court
then prevented the defendant from presenting evidence
about any other class member, and found, based on
testimony from the sample group, that the entire class had
been misclassified as exempt. (Id. at 16, 35.) The California
Supreme Court found this procedure impermissible: by
improperly extrapolating liability findings from a small,
unrepresentative sample group and refusing to admit
evidence relating to employees outside that group, the trial
court “significantly impaired” the defendant’s ability to
present a defense. (Id. at 33.) The Duran court concluded,
“the trial court could not abridge [the defendant]’s
presentation of an exemption defense simply because that
defense was cumbersome to litigate in a class action.” (Id. at
35.)
That is not to say that a defendant’s trial plan for how
to try an affirmative defense is inviolable. Where methods of
common proof afford the defendant a fair opportunity to
litigate every available defense, courts may limit the
presentation of individualized evidence that would be
cumulative or have little probative value. (See Duran,
supra, 59 Cal.4th at 33; Evid. Code, § 352 [court may exclude
evidence “if its probative value is substantially outweighed
by the probability that its admission will . . . necessitate
undue consumption of time”].) What must be preserved is
the defendant’s ability to present the defense in a fair
manner. (See Duran, supra, at 33.)
39
A trial court’s finding that a claim is unmanageable as
presented will not always result in striking the claim. In the
class certification context, our Supreme Court approvingly
quoted a federal court’s explanation: “‘[i]f faced with what
appear to be unusually difficult manageability problems at
the certification stage, district courts have discretion to
insist on details of the plaintiff’s plan for . . . managing the
action.’ [Citation.] . . . [J]udges who encounter such
challenges should attempt to leverage their ‘experience with
and flexibility in engineering solutions to difficult problems
of case management,’ and ‘refusing to certify on
manageability grounds alone should be the last resort.’”
(Noel v. Thrifty Payless, Inc. (2019) 7 Cal.5th 955, 978.)
Thus, if possible, the court should work with the parties to
render a PAGA claim manageable by adopting a feasible
trial plan or limiting the claim’s scope. (Cf. Canon, supra, 68
Cal.App.4th at 5 [in class action context, “the trial court has
an obligation to consider the use of subclasses and other
innovative procedural tools proposed by a party to certify a
manageable class”]; Petersen v. Bank of America Corp. (2014)
232 Cal.App.4th 238, 254 [to render mass action manageable
on remand, “the trial court will have the power to require
plaintiffs’ counsel to whip the third amended complaint’s
desultory and scattered allegations against [defendant] into
a tightly structured set of manageable subclaims and
subclasses”].) As explained below, the trial court’s
conclusion that the claim was unmanageable resulted not
from the court’s reluctance to work with the parties, but
40
from Wesson’s insistence that manageability of the action
was irrelevant.
b. Analysis
The trial court did not abuse its discretion in striking
Wesson’s PAGA claim. Without offering developed
arguments on the subject, each party implies that the other
had the burden to prove that Wesson’s PAGA claim was or
was not manageable. We need not decide the issue, as the
evidence before the trial court supported its ruling, even if
Staples had the burden of proving unmanageability.
Wesson’s claim asserted Labor Code violations as to
346 Staples GMs, premised on Staples’s alleged
misclassification of those employees as exempt executives.
By their nature, claims involving employee misclassification
are highly fact-dependent, as the inquiry focuses on the work
actually performed by the employee, as well as the
employer’s realistic expectations and the realistic
requirements of the job. (See, e.g., Cal. Code Regs., tit. 8,
§ 11070, subds. 1(A)(1)(e), 1(A)(2)(f).) Thus, trials involving
misclassification claims often involve significant amounts of
factual minutiae and therefore tend to be lengthy even when
they involve only a few employees. (See, e.g., Heyen v.
Safeway Inc. (2013) 216 Cal.App.4th 795, 799 [ten-day trial
on single plaintiff’s misclassification claim]; Batze v.
Safeway, Inc., supra, 10 Cal.App.5th at 475 [in bench trial on
three employees’ misclassification claims, “the court waded
41
through weeks of testimony from dozens of witnesses and a
massive quantity of documentary evidence”].)
In the class action context, our Supreme Court
acknowledged that misclassification cases “can pose difficult
manageability challenges.” (Duran, supra, 59 Cal.4th at 30.)
It explained: “Although common proof may be possible if
there are uniform job requirements or policies, an employer’s
liability for misclassification under most Labor Code
exemptions will depend on employees’ individual
circumstances. Liability to one employee is in no way
excused or established by the employer’s classification of
other employees.”16 (Duron, supra, at 36-37.)
The record in this case raised significant manageability
concerns. Staples adduced evidence that the GM position
was not standardized, and that there was great variation in
how Staples GMs performed their jobs and the extent to
which they performed non-exempt tasks. The evidence
showed that Staples stores varied widely in size, sales
volume, staffing levels, labor budgets, and other variables
16 The court recognized, however, that in some cases,
misclassification could be decided on a classwide basis: “A class
action trial may determine that an employer is liable to an entire
class for misclassification if it is shown that the employer had a
consistently applied policy or uniform job requirements and
expectations contrary to a Labor Code exemption, or if it
knowingly encouraged a uniform de facto practice inconsistent
with the exemption. [Citation.] In such a case, the evidence for
uniformity among class members would be strong, and common
proof would be sufficient to call for the employer to defend its
claimed exemption.” (Duran, supra, 59 Cal.4th at 37-38.)
42
that affected GMs’ work experience. Staples’s evidence also
showed that how GMs spent their time depended on their
experience, aptitude, and managerial approaches, among
other factors. The trial court credited this evidence, and
Wesson does not contest it on appeal. Based on this
evidence, Staples argued that Wesson’s claims would require
individualized assessments of each GM’s classification and
would lead to “an unmanageable mess” that “would waste
the time and resources of the Court and the parties . . . .”
Wesson agreed that Staples’s affirmative defense
would require individualized assessments of the 346 GMs,
stating in his briefing to the court that “Staples [would] need
to proffer ‘a GM-by-GM, week-by-week analysis’ throughout
the entire relevant time period that all of the GMs were
properly classified as exempt executives.” And he did not
suggest there was a manageable way to litigate Staples’s
exemption defense. Instead, Wesson argued that the
manageability inquiry need not consider a defendant’s
affirmative defenses, asserting that “a manager
misclassification PAGA claim is ‘manageable’ so long as [the]
[p]laintiff’s prima facie case, concerning each aggrieved
employee at issue, is provable by resort to common
evidence.” Thus, in addressing the litigation of Staples’s
exemption defense in the trial plan he proposed to the court,
Wesson insisted that it would be improper for him to “dictate
how Staples should go about proving its exemption defense,”
and simply pledged that he would not attempt to prevent
Staples from proving its affirmative defense as it saw fit. At
43
the hearing on the issue, the parties estimated they would
need six trial days per GM to litigate GMs’ classification
individually, or roughly eight years.
The evidence and argument before the trial court
revealed no apparent way to litigate Staples’s affirmative
defense in a fair and expeditious manner, as the defense
turned in large part on GMs’ actual work experience, yet
there was extensive variability in the group of Staples’s
GMs. (Cf. Duran, supra, 59 Cal.4th at 33 [“If the variability
[in a class] is too great, individual issues are more likely to
swamp common ones and render the class action
unmanageable”].) The parties agreed that individualized
litigation of the issue as to each of 346 GM would require a
trial spanning several years with many hundreds of
witnesses. The trial court reasonably concluded that such a
trial would “not meet any definition of manageability.”
To be sure, Staples would have been able to offer
common proof relating to its realistic expectations as to how
GMs should spend their time and the realistic requirements
of the job. In the unpublished portion of this opinion, we
concluded its common evidence on those issues precluded
summary adjudication. But the fact that certain evidence is
minimally sufficient for purposes of summary adjudication
does not mean that a factfinder would find it credible and
persuasive at trial. Thus, Staples could not be expected to
limit its defense to common evidence on its realistic
expectations and the realistic requirements of the job, while
ignoring the issue of how individual GMs actually spent
44
their time -- the “first and foremost” consideration under the
IWC wage order. (Cal. Code Regs., tit. 8, § 11070, subd.
1(A)(1)(e).) (See Duran, supra, 59 Cal.4th at 33.)
Wesson’s argument below that a court should ignore
affirmative defenses in assessing manageability makes little
sense. That a plaintiff may prove his or her prima facie case
relatively quickly and efficiently is of little comfort if any fair
presentation of a cognizable defense would seize the court’s
resources for years to come. (Cf. Weiss, supra, 9 Cal.5th at
863; Cohn, supra, 169 Cal.App.4th 523, 531.)
For the first time on appeal, Wesson contends that
Staples had no due process right to call every GM as a
witness at trial, and thus that the trial court could have
rendered a trial on his claim manageable simply by limiting
Staples’s ability to litigate its defense individually as to each
GM. In support, Wesson points to certain language by our
Supreme Court in Duran. The language he references does
not support his contention.
In holding that the trial court impermissibly
constrained the defendant’s ability to present a defense, the
Duran court explained, “While class action defendants may
not have an unfettered right to present individualized
evidence in support of a defense, . . . a class action trial
management plan may not foreclose the litigation of relevant
affirmative defenses, even when these defenses turn on
individual questions.” (Duran, supra, 59 Cal.4th at 34.) The
court further stated: “No case, to our knowledge, holds that
a defendant has a due process right to litigate an affirmative
45
defense as to each individual class member. However, if
liability is to be established on a classwide basis, defendants
must have an opportunity to present proof of their
affirmative defenses within whatever method the court and
the parties fashion to try these issues.” (Id. at 38.)
This language, cited by Wesson, indicates that a
defendant is not categorically entitled, in every case, to
litigate an affirmative defense individually as to each class
member. (See Duran, supra, 59 Cal.4th at 34, 38.) Yet in
the same breath, the court stressed that defendants must
have a fair opportunity to litigate their affirmative defenses
in some way, even if that entails individualized evidence.
(Ibid.) A trial court thus may not “significantly impair[]” the
defendant’s ability to present a defense. (Id. at 33.) As
discussed, the evidence before the trial court supported its
determination that Staples’s affirmative defense could not be
fairly litigated through common proof, and no evidence
before the court suggested it could.
In his reply brief, Wesson summarily asserts for the
first time that Staples could have sought to manage
individual issues through “‘pattern and practice evidence,
statistical evidence, sampling evidence, expert testimony,
and other indicators of . . . centralized practices . . . .’” He
made no such claim below, relying instead on the assertion
that the manageability of Staples’s defense was irrelevant.
Moreover, nothing in the record suggested that these were
feasible means of proving how individual GMs spent their
time, and Wesson’s argument on appeal is woefully
46
insufficient to establish that the trial court abused its
discretion in concluding to the contrary.
We do not hold that a PAGA misclassification case can
never be managed through common-proof methods.
However, Wesson’s lack of cooperation with the trial court’s
inquiry in this regard stymied the court’s efforts to devise a
plan that would allow the action to proceed, in whole or in
part. On the record before us, the trial court’s determination
that Wesson’s PAGA claim was unmanageable was
eminently reasonable.17 Accordingly, we find no abuse of
discretion in the court’s decision to strike Wesson’s PAGA
claim.18
17 As Wesson does not argue that the trial court should have
rendered his claim manageable by limiting its scope, we do not
consider the issue.
18 We reject Wesson’s contention that the trial court
erroneously believed he would have had the burden of disproving
Staples’s affirmative defense of exemption at trial. The court’s
thorough and thoughtful decision reflects a clear understanding
of the parties’ respective burdens.
47
DISPOSITION
The trial court’s orders are affirmed. Staples is
awarded its costs on appeal.
CERTIFIED FOR PARTIAL PUBLICATION
MANELLA, P. J.
We concur:
COLLINS, J.
CURREY, J.
48