On February 8, 2010, the Second District granted numerous requests (including one filed by Khorrami Pollard & Abir) to publish its decision in Jaimez v. Daiohs USA, Inc., 2010 Cal. App. LEXIS 156 (2010). The Court’s opinion is an important one, as it impacts what a trial court may properly consider when certifying a class.

The fundamental component of the Jaimez decision turned on the trial court’s reliance upon testimony submitted in 25 employee declarations as a basis for finding the class element of “predominance” to be lacking. Jaimez, 2010 Cal. App. LEXIS 156, at 20-27. As reasoned by the Court of Appeal, the trial court erred by focusing on the “individual effects of policies and practices” contained in such declaration testimony [Id., at 26], rather than evaluating whether “[p]laintiff’s ‘theory of recovery’ involves uniform policies … amenable to class treatment.” See id., at 23. As the Court explained, “[t]he fact that individualized proof of damages may ultimately be necessary does not mean, … that Jaimez’s theory of recovery is not amenable to class treatment.” See id., at 39-40. According to the Court, “had the trial court focused on the correct criteria, it would have necessarily found the First Choice declarations, while identifying individual effects of policies and practices that may well call for individual damages determinations, nevertheless confirm the predominance of common legal and factual issues that make this case more amenable to class treatment.” See Id., at 27.

The Jaimez Court’s analysis addresses a growing trend in wage and hour class litigation wherein an employer seeks to overcome class certification by submitting evidence purporting to establish that a company’s policy is not a reliable basis on which to predicate common treatment. See e.g. Bibo v. Fed. Express, Inc., 2009 U.S. Dist. LEXIS 37597, 29-30 (N.D. Cal. Apr. 21, 2009) (rejecting employer’s claim that “the presence of a corporate policy is insufficient to establish commonality[,]” as evidence purporting to establish differences among couriers did not alter the fact that “[a]ll employees worked as couriers under standardized employment policies that were the basis of their wage calculations.”). In many instances, an employer seeks to achieve this objective by flooding the court with declarations from current employees, many of whom ironically have systematically failed and refused to adhere the company policy underlying the plaintiff’s theory of liability. See e.g. Kurihara v. Best Buy Co., 2007 U.S. Dist. LEXIS 64224, at *30 (N.D. Cal. 2007) (“defendant’s assertions regarding the failure of its employees to properly implement the company’s standard policies do not convince the court that substantial variations exist” as “a defendant cannot cite poor management to defend against class certification”). A trial court’s reliance on such evidence to deny certification can have dire consequences to the enforcement of California employee rights, as our Supreme Court has acknowledged that the small amount of damages at issue in many wage and hour cases renders such claims substantively dependant on adjudication by way of the class mechanism. See Gentry v. Superior Court, 42 Cal. 4th 443, 457-59, 462 (2007).

The Jaimez opinion comes on the heels of Ali v. U.S.A. Cab Ltd., 176 Cal. App. 4th 1333 (2009) – a defense favorite which arrived at the exact opposite result. In Ali, rather than confining the trial court’s focus to whether the “theory of recovery” was amenable to class treatment, the court of appeal held that the applicable standard for evaluating predominance affirmatively required the trial court to consider whether the class had in fact sustained similar damage under the plaintiff’s theory of recovery. See Ali, 176 Cal. App. 4th at 1350 (holding that “‘[t]here can be no class certification unless it is determined by the trial court that similarly situated persons have sustained damage’” and that “[t]here can be no cognizable class unless it is first determined that members who make up the class have sustained the same or similar damage.’”). Based on this standard, the Ali court concluded that the trial court did not err by focusing on the individual effects of policies and practices contained in employee declaration testimony to conclude that predominance had not been met. See id., 176 Cal. App. 4th at 1349 (holding that individual cab driver “declarations support a finding that common questions pertaining to the fact of damage do not predominate.”).

Importantly, the Jaimez opinion is not the first California appellate decisions to directly hold that a trial court errs by focusing on the “individual effects of policies and practices” contained in employee declaration testimony as a basis for finding the element of predominance to be lacking. The first opinion on this point was Ghazaryan v. Diva Limousine, Ltd., 169 Cal.App.4th 1524 (2008), which dealt with this issue under the factual circumstances arising out a claim involving “on-call time.” See Ghazaryan, 169 Cal. App. 4th at 1536-37. Jaimez extends Ghazaryan’s analysis to various types of claims, including claims for misclassification, unpaid overtime compensation, missed meal and rest periods, and the failure to provide compliant pay stubs.

In sum, the issue of the proper standard for evaluating element of predominance addressed by Jaimez is an important one – it arises in almost every wage and hour class certification motion. Thus, Jaimez and Ghazaryan are both very powerful weapons in plaintiff counsel’s arsenal when confronted by a strategic use of individual employee declarations to overcome class certification.

In 1966, pursuant to its power to regulate interstate commerce, Congress created the Federal Laboratory Animal Welfare Act (“FLAWA”). FLAWA was the first legislative attempt to regulate the growing animal research industry but has since been renamed the Animal Welfare Act (“AWA”), and the scope of its coverage has been expanded to include any warm-blooded animal “being used, or is intended for use, for research, testing, experimentation, or exhibition purposes, or as a pet.” Despite this expansion, there are numerous problems with this statute that have rendered it ineffective for plaintiffs bringing claims on behalf of abused and mistreated animals.

First, its language and standards are impractically vague. Second, it does not contain a private right of action provision, creating a barrier for plaintiffs attempting to access the federal courts. Third, the United States Department of Agriculture (“USDA”) has been unable to enforce the AWA effectively.

Finally, and particularly significant, the strict requirements of the standing doctrine under Article III of the U.S. Constitution have prevented organizations and individuals from bringing animal welfare claims before a court of law. In general, courts narrowly construe standing requirements in cases where plaintiffs allege either injury based upon the treatment of animals or the animal’s environment. Because of the rigid standing requirements, courts seldom review the merits of animal welfare cases and instead dismiss would-be plaintiffs on the basis of either insufficient injury or lack of a redressable injury. A common thread running through all animal cases is the notion that animals do not have rights independent of humans. Indeed, throughout history, animals have been viewed in terms of property. The logical result of this property-rights theory is that an animal cannot achieve standing for the injuries it sustains. Rather, the only recourse an animal has is if a human claims an injury as a result of the animal’s inhumane treatment. As case law demonstrates, however, “injury-in-fact” is the most difficult component of the standing doctrine for animal rights advocates to establish.

The ultimate result under Article III is that unless a person or organization (1) “immediately” and “actually” sees an animal in a condition that violates either a state anti-cruelty law or the AWA and alleges a particularized injury; (2) establishes a clear nexus between the alleged illegal action and the individual’s injury; and (3) proves that the injury is one that is likely redressable by the court’s adjudication, standing will be denied and the case will be dismissed. In addition to meeting the constitutional minimums necessary to confer standing, a plaintiff often must satisfy the “prudential” elements established for standing. That is, in cases challenging the actions of federal agencies, plaintiffs must demonstrate they are within the “zone of interest” Congress sought to protect by enacting the statutes under which the action is brought.

Because of these formulaic requirements, animal rights organizations and individual plaintiffs have had inconsistent results in litigating actions under the AWA. In Animal Legal Defense Fund, Inc. v. Espy, 23 F.3d 496 (D.C. Cir. 1994), for example, two animal rights organizations and two individuals sued the USDA under the Administrative Procedure Act (“APA”) for implementing a regulatory definition of “animal” that excluded birds, aquatic animals, rats, and mice in violation of the AWA amendments of 1970, which had greatly expanded the definition of “animal.” The Court held that none of the plaintiffs had constitutional standing to sue or a statutory right to judicial review under the APA. The Court found that it was necessary to determine whether there was jurisdiction and to apply the “zone of interests” test for standing. The first individual, a psychobiologist, failed to show an aesthetic injury (an injury to an individual, such as emotional distress, incurred by viewing an animal kept in inhumane conditions) because she would only suffer injury if she chose to perform research in the future. The second individual, an attorney and member of a committee charged with inspecting a facility to ensure compliance with the Act, did not have standing based on his assertion of “general community interests.” The Court further found that the organizations’ claims of informational injury (an injury to an organization’s activities, caused by the government’s failure to implement regulations) did not fall within the zone of interests protected by the Act.

In Animal Legal Defense Fund v. Glickman, 154 F.3d 326, 326 (D.C. Cir. 1998) (en banc), cert. denied, 119 S. Ct. 1454 (1999), organizational and individual plaintiffs sued the USDA under the APA for, inter alia, its regulatory failure to require animal exhibitors to submit plans for primate psychological well-being and the agency’s unreasonable delay in disseminating regulations requiring federal submission and approval of such plans. In an extraordinary ruling, the Court granted both the organizational and individual plaintiffs standing under the AWA. The Court found that the organization’s informational injuries fell within the AWA’s “zone of interest” protection and that the organization was a proper challenger to the defendant’s administrative neglect. In addressing the individual plaintiffs, the Court found that the specificity with which the plaintiffs alleged their injuries gave rise to standing to sue under the AWA. By alleging their individual and continuous injuries in witnessing particular inhumane primate exhibits, the plaintiffs were able to establish personal and direct injuries that were distinguishable from injuries suffered by the public at large.

Unlike Glickman, earlier cases were unsuccessful because plaintiffs did not prove that the AWA authorized their right to seek relief. In particular, these cases were dismissed for lack of standing because the third parties sought to enforce specific provisions or terms of the AWA. Glickman specifically avoids the enforcement pitfall by alleging solely that USDA failed to implement the minimum standards the AWA requires. Under the APA, persons who are injured by the willful neglect of statutory duty may challenge that conduct. Using the APA, Glickman avoids the fact that the AWA contains no private right of action against regulated entities and demonstrates the importance of finding the proper formula to overcome the hurdles that AWA precedent has established.

Glickman suggests that plaintiffs alleging an interest in protecting the well-being of specific animals may meet the requisite injuries and fall within the “zone of interest” necessary to confer standing by demonstrating a careful and well-thought-out interest in protecting certain animals. One potential plaintiff is the individual who is a pet owner and/or a “consumer” buying pets. In theory, a pet consumer could be able to challenge USDA implementation of the AWA as it relates to regulation of pet dealers. Such a plaintiff could express an interest in the animals he or she has examined when considering an imminent purchase or express an economic injury caused by the purchase of an unhealthy pet. While such injuries might appear as indirect injuries caused by the USDA, they would not preclude a plaintiff consumer’s standing.

Judicial rulings are not always so promising. On December 30, 2009, in American Society for the Prevention of Cruelty to Animals et. al. v. Feld Entertainment, Inc., 2009 U.S. Dist. LEXIS 121394 (D.D.C. Dec. 30, 2009), a lawsuit that had dragged on for nine years, a federal district court ruled in favor of Ringling Bros. and Barnum & Bailey Circus, finding that plaintiffs in the lawsuit did not have standing. Plaintiffs included former Ringling Bros. employee Tom Rider and the organizational plaintiff, Animal Protection Institute (“API”), each claiming that Ringling Bros.’ use of bullhooks and chains constituted abuse and a “take” of the elephants, in violation of the Endangered Species Act (“ESA”). The Court did not rule on the plaintiffs’ substantive claims about elephant abuse or violations of the ESA. Instead, the Court concluded that Rider had no Article III injury and that the alleged aesthetic injury could not be redressed by the Court. Rider’s injury was based on his stated strong, emotional attachment to several specific Asian elephants who had been abused while under Ringling Bros.’ care, but the Court did not believe that Rider had this strong attachment or suffered this injury. Likewise, the Court concluded that API had failed to properly assert an informational injury that could be redressed by the Court.

In essence, these federal standing requirements have proven a difficult barrier for advocates of the animal rights and welfare movement who have often tried to enforce federal protections for animals through civil suits. However, these court decisions have not fully thwarted third-party use of AWA. While the courts may never allow animals standing under the Act, third parties representing the interests of animals, through careful selection of plaintiffs, still may be able to satisfy the constitutional and prudential elements of standing. Moreover, the lower court decision in Glickman suggests that the judicial climate may be becoming more amenable to suits brought under the AWA. Whether achieved through the courts or through further amendment of the AWA, allowing third-party legal standing under the AWA undoubtedly would strengthen use of the AWA as a means of protecting animals from widespread abuse.

California and Federal overtime laws exist to protect workers’ rights to overtime pay, but in the face of difficult economic conditions, there will be those who try to take advantage of the system. In an economy where almost no business is immune to layoffs and cutbacks, some employees are willing to work longer and harder to make sure they keep the jobs they have.

Though some employees are willing to do more for less, there has been a recent surge in the number of labor and employment cases filed, and this is arguably a result of employers adopting business strategies that involve widespread noncompliance with state and federal labor and employment laws. As corporate budgets become more constrained, employers may be looking for ways to avoid paying overtime to workers who are entitled to it by law, accounting for any lawsuits that occur as a cost of doing business.

FLSA Protections
In particular, lawsuits filed under the Fair Labor Standards Act have become more common during the economic recession of recent years. See C. Paul Peralte, AT&T's Overtime Suit Only Latest, The Atlanta-Journal Constitution, January 20, 2010, At 11A. The FLSA was enacted in 1938, and was designed to protect workers’ rights and level the playing field between employers and employees. The public policy behind enacting the FLSA was to create a strong federal labor law to back state laws, preventing employers from manipulating the system in states that attempt to maintain high labor standards.

With regard to overtime, the FLSA contains exemptions that are meant to distinguish which jobs are exempt from overtime compensation and which jobs are not. Under the applicable regulations, those who fall under the administrative, professional, and executive exemptions are not entitled to overtime compensation. See 5 C.F.R. §§ 551.205-207. However, as the standards are not clearly defined, and as such, many employers use this to their advantage by improperly classifying their employees as exempt to avoid paying overtime.

Who are overtime laws meant to protect?
While the majority of recent FLSA claims involve blue collar workers, overtime cases claiming misclassification are not limited to the types of jobs one might expect: they have expanded to include jobs many consider highly skilled. Recent class actions have been brought by groups of stock brokers who believe they have been misclassified as exempt under the FLSA. In 2005, Merrill Lynch settled a class action overtime suit brought by stock brokers for $37 million, each class member earning $10,000 to $15,000.

Employers often take for granted that traditionally salaried workers are exempt, and do not account for the fact that even high level work must involve the exercise of independent discretion and judgment to be truly exempt. More recently, in 2009, a federal judge in Los Angeles approved a $39 million settlement to resolve multidistrict litigation between Wachovia Corp. and a class comprised of thousands of stock brokers alleging that they were denied overtime pay. A settlement of $11 million was also approved in which Prudential Financial Inc., whose retail brokerage division was sold to Wachovia in 2003, agreed to compensate former stock brokers. See In re: Wachovia Securities Wage & Hour Litigation, MDL No. 1807 (C.D. Calif.). These massive settlements will likely encourage other similarly situated individuals to seek comparable compensation, especially with the instability inherent in the job market today.

All in all, it is yet to be determined whether these types of abuses are a direct result of difficult economic times or represent a new trend that may persist post-recovery. That is something only time will tell.