Opinion
B310739 B312299
01-17-2023
JEFFREY CESSNA, Plaintiff and Appellant, v. SOUTHERN CALIFORNIA EDISON COMPANY, Defendant and Respondent.
Boyamian Law, Inc., Michael H. Boyamian, Armand R. Kizirian; Law Offices of Thomas W. Falvey, Thomas W. Falvey; Hogie &Campbell Lawyers, Inc., Stephen W. Hogie and Paul A. Campbell for Plaintiff and Appellant. Littler Mendelson, Robert S. Blumberg, Demery Ryan, Janel R. Ablon, and Jennifer A. Goldberg for Defendant and Respondent.
NOT TO BE PUBLISHED
APPEALS from orders of the Superior Court of Los Angeles County No. BC689081, Dennis J. Landin, Judge. Affirmed.
Boyamian Law, Inc., Michael H. Boyamian, Armand R. Kizirian; Law Offices of Thomas W. Falvey, Thomas W. Falvey; Hogie &Campbell Lawyers, Inc., Stephen W. Hogie and Paul A. Campbell for Plaintiff and Appellant.
Littler Mendelson, Robert S. Blumberg, Demery Ryan, Janel R. Ablon, and Jennifer A. Goldberg for Defendant and Respondent.
ASHMANN-GERST J.
Plaintiff and appellant Jeffrey Cessna sued his employer, defendant and respondent Southern California Edison (SCE),claiming numerous wage and hour violations arising from SCE's alleged misclassification of Cessna and similarly situated employees as exempt. Cessna then sought to expand his lawsuit, filing a motion for class certification and a motion to approve a representative action pursuant to the Private Attorneys General Act of 2004 (PAGA) (Lab. Code, § 2698 et seq.). The trial court denied both motions after ruling that Cessna's claims were not appropriate for class resolution. Finding no abuse of discretion, we affirm.
Cessna also sued Edison International, SCE's parent company. Edison International was later dismissed, so it is not a party to this appeal.
FACTS AND PROCEDURAL BACKGROUND
I. Factual Background
SCE is a regional utility company that distributes electrical power throughout southern California. Cessna works in SCE's Distribution Business Line department (DBL), which oversees the design, construction, and maintenance of SCE's electricity distribution system.
DBL is divided into 35 district offices, each of which is responsible for a different geographic area in SCE's service network. Each office has several employees tasked with planning and implementing electrical plans for new developments. Among these are Planner Specialists (planners) and Planner Senior Specialists (senior planners), who both report to a Planning Supervisor.
This position has alternately been called "Planner 1."
This position has alternately been called "Planner 2."
Cessna worked in DBL as a planner for 17 years. After completing a two-year training program, he was promoted to be a senior planner, in which capacity he has worked for the last 12 years.
A senior planner designs and implements electrical plans for new construction projects, ensuring that a new building or development's electrical infrastructure is safe, up to code, and is compatible with SCE's existing power distribution system. Each senior planner is assigned to a city or group of cities within his or her respective district office. The senior planner is then responsible for all large construction sites, particularly new commercial developments, within their assigned area.
II. Procedural Background
A. Complaint
In January 2018, Cessna sued SCE, seeking civil penalties under PAGA for alleged wage and hour violations stemming from SCE's misclassification of senior planners as exempt. Four months later, Cessna filed a first amended complaint, adding specific claims for various wage and hour violations including minimum wage violations, failure to pay overtime, failure to authorize rest periods, and failure to provide accurate wage statements.
In March 2020, Cessna filed the operative second amended complaint, adding a claim for denied meal periods.
B. Class Certification
Along with the operative complaint, Cessna also filed a motion for class certification, requesting class adjudication of all causes of action except his PAGA claim. SCE opposed the motion.
1. Evidence in favor of class certification
Cessna's motion included evidence to support his argument that the senior planners constitute a viable class. He submitted declarations from 12 senior planners who stated that their work required little specialized education or experience; did not involve the use of independent judgment and discretion; and was essentially indistinguishable from the work performed by planners, which SCE classified as nonexempt.
Cessna characterized senior planners as routinely applying one set of design standards, contained in SCE's Design Distribution Standards manual (design manual), to project sites to generate electrical plans. Some of his declarants agreed, opining that if two senior planners were given the same assignment, they would be so constrained by the design manual that they would invariably produce identical electrical plans. In his own declaration, Cessna stated that SCE even created an internal audit group to ensure that all of the senior planners' work product was uniform and compliant with the design manual.
Cessna argued that this body of evidence not only supported his argument that senior planners should be classified as nonexempt, but also demonstrated that the senior planners' work circumstances were similar enough that the question of their classification should be decided through a class action.
2. Evidence against class certification
SCE also proffered evidence to support their opposition to class certification. Their evidence painted a very different picture of the work done by senior planners. SCE submitted declarations from 21 senior planners, including some of Cessna's declarants who recharacterized their initial declarations. SCE's declarants attested that their work required specialized education or training; that it consistently required them to exercise independent judgment and discretion; and that the work of each senior planner varied significantly, particularly between district offices. For example, one declarant testified that working in the Long Beach office was different from any other office because the city used "a totally different grid system" that was only "vaguely" addressed by the design manual.
SCE's declarants also agreed that their work materially differed from the work done by planners, who spent nearly 80 percent of their time doing routine electric meter checks on new residential construction. Some senior planners, including Cessna, testified that they rarely performed meter checks. Others attested that they spent up to 40 percent of their time conducting meter checks.
SCE claimed that a senior planner's work went far beyond rote application of the design manual, as senior planners must synthesize many different sets of guidelines and manuals to come up with electrical plans that will work for specific sites. SCE pointed out that some of Cessna's declarants admitted that senior planners have "a great deal of discretion" in developing an electrical plan as long as the plan met "the minimum[] [standards] of the [design manual]." It also noted that senior planners can seek approval to deviate from the design manual or suggest changes as necessary to meet a specific project's needs.
Additionally, SCE provided the official job description for senior planners, which states that, in addition to developing and implementing electrical plans, they "[p]rovide[] coordination and planning for major projects with other departments and/or outside organizations," "[m]aintain[] records and data," and "[p]rovide[] information and data regarding future growth and budgetary planning."
SCE argued that this evidence, taken together with Cessna's contradictory evidence, showed that the senior planners' work was too varied and individualized for the question of exemption to be suitable for class resolution.
3. Denial of class certification motion
On November 24, 2020, after "review[ing] the parties' conflicting declarations regarding [the senior planners'] job requirements and actual tasks performed," the trial court issued an order denying Cessna's motion for class certification.
The trial court concluded that class certification was not appropriate because "individual issues predominate" the question of the senior planners' exemption. It found that the evidence presented showed that "each [senior planner] handle[s] his or her time very differently, varying the nature and tasks and the actual time spent on these tasks." It noted "the fact that [Cessna] and [SCE] submit[ted] very conflicting evidence as to, [among other things,] each [senior planner's] work assignments . . . supervisory duties, and exercise of discretion and independent judgment."
The trial court acknowledged that "common questions exist as to whether a given task involved sufficient discretion or independent judgment to be exempt," but determined that the central question of "how [senior planners] actually spend their time" would depend on "the putative [class] member['s] individualized proof of each member's tasks and how much independence each actually exercises." The conflicting declarations submitted by both parties showed that this issue was "not suited to class wide treatment," and that, "considering the efficiency and practicability of managing individual issues, handling this case as a class action would not be advantageous to the Court and the litigants."
C. PAGA Claims
Two months later, Cessna filed a motion asking the trial court to approve his plan to proceed with his PAGA claim on behalf of all senior planners, along with a trial plan that was functionally identical to his motion for class certification. SCE opposed the motion, and filed its own motion asking the trial court to strike Cessna's PAGA claim.
The matter proceeded to a hearing on April 12, 2021. After hearing oral arguments, the trial court rejected Cessna's PAGA trial plan and struck his PAGA claim. It reasoned that because Cessna's "PAGA claim hinge[d] entirely on the issue of whether [senior planners] were misclassified as exempt employees," it "thus necessitate[d] a multitude of individualized assessments of varying work nature of the [senior planners]" to determine SCE's liability. Consistent with its order regarding class certification, the trial court found that "proof of th[e] [PAGA] claim would be unmanageable because it could not be done with statistical or survey evidence[,] but only with detailed inquiries about individual employees' circumstances."
Accordingly, the trial court "f[ou]nd[] it appropriate to strike the PAGA claim as unmanageable."
D. Notice of Appeal and Consolidation
Cessna timely appealed, filing separate notices of appeal from the order denying class certification and the order denying his motion to approve a PAGA trial plan and granting SCE's cross-motion to strike his PAGA claim. We granted the parties' joint motion to consolidate the two appeals.
DISCUSSION
Cessna appeals from two rulings: the denial of his motion for class certification and the denial of his motion to approve a representative PAGA trial plan. The crux of both appeals is whether the substantive question framed by Cessna's suit- namely, whether SCE misclassified senior planners as exempt- is suitable for resolution through class or representative adjudication.
I. Class Certification
A. Applicable Law
1. General class certification law
A lawsuit may be brought as a class action if there is (1) "'an ascertainable class,'" and (2) "'a well-defined community of interest among the class members.'" (Duran v. U.S. Bank National Assn. (2014) 59 Cal.4th 1, 28 (Duran), quoting Washington Mutual Bank v. Superior Court (2001) 24 Cal.4th 906, 913; see generally Code Civ. Proc., § 382.) The second element requires a showing that "common questions of law or fact" "predominate" as to the class members. (Brinker Restaurant Corp. v. Superior Court (2012) 53 Cal.4th 1004, 1021, 1025 (Brinker).)
"In deciding whether common questions predominate [amongst potential class members], we ask whether '"the issues framed by the pleadings and the law applicable to the causes of action alleged'" will be 'susceptible of common proof' for all members of the proposed class or, instead, whether the class members will '"be required to litigate numerous and substantial questions determining [their] individual right to recover following [a] 'class judgment' on common issues."' [Citations.]" (Downey v. Public Storage, Inc. (2020) 44 Cal.App.5th 1103, 1113 (Downey).)
"As a general rule[,] if the defendant's liability can be determined by facts common to all members of the class, a class will be certified even if the members must individually prove their damages." (Brinker, supra, 53 Cal.4th at pp. 1021-1022.) "However . . . class treatment is not appropriate 'if every member of the alleged class would be required to litigate numerous and substantial questions determining his individual right to recover following the "class judgment" 'on common issues.' [Citation.]" (Duran, supra, 59 Cal.4th at p. 28.)
2. Employee exemption classification
Labor Code section 1173 authorizes the Industrial Welfare Commission (IWC) to regulate wages and hours for all employees in California. (Industrial Welfare Commission v. Superior Court (1980) 27 Cal.3d 690, 701.) These regulations include provisions for, among other things, overtime pay (Cal. Code Regs., tit. 8, § 11010, subd. (3)(A)), meal breaks and rest periods (Cal. Code Regs., tit. 8, § 11010, subds. (11), (12)), and the provision of accurate wage statements (Cal. Code Regs., tit. 8, § 11010, subd. (7)(B)).
Section 11010 of Title 8 of the California Code of Regulations governs employees in the manufacturing sector. (See Cal. Code Regs., tit. 8, § 11010, subd. (2)(H).)
These regulations do not apply to employees who fall into an enumerated exemption category. As relevant here, administrative employees are considered exempt. An employee qualifies for administrative exemption if (1) his "duties and responsibilities involve . . . the performance of office or nonmanual work directly related to management policies or general business operations of his employer or his employer's customers"; (2) he "customarily and regularly exercises discretion and independent judgment"; (3) he "performs under only general supervision work along specialized or technical lines requiring special training, experience, or knowledge"; (4) he "earn[s] a monthly salary equivalent to no less than two times the state minimum wage for full-time employment"; and (5) he "is primarily engaged in duties that meet the test of the exemption." (Cal. Code Regs., tit. 8, § 11010 et seq.) The last element requires courts to consider "[t]he work actually performed by the employee during the course of the work week . . . and the amount of time the employee spends on such work, together with the employer's realistic expectations and the realistic requirements of the job. (Cal. Code Regs., tit. 8, § 11010, subd. (7)(B)(f).)
Before the trial court, the parties also disputed whether the professional exemption applied to Cessna and other senior planners. On appeal, Cessna only challenges the trial court's ruling concerning the administrative exemption.
3. Misclassification of employees as exempt
"Employers often treat all workers within a job position as either exempt or nonexempt. In actuality, however, Labor Code exemptions frequently depend on how individual employees perform their jobs." (Duran, supra, 59 Cal.4th at p. 25.)
"In the misclassification context, as in other types of cases, trial courts deciding whether to certify a class must consider not just whether common questions exist, but also whether it will be feasible to try the case as a class action. Depending on the nature of the claimed exemption and the facts of a particular case, a misclassification claim has the potential to raise numerous individual questions that may be difficult, or even impossible, to litigate on a classwide basis." (Duran, supra, 59 Cal.4th at p. 27.)
"Unless an employer's uniform policy or consistent practice violates wage and hour laws [citation], California courts have been reluctant to certify class actions alleging misclassification. [Citations.]" (Duran, supra, 59 Cal.4th at pp. 30-31, fn. omitted; see also Sav-On Drug Stores, Inc. v. Superior Court (2004) 34 Cal.4th 319, 328-329 [granting class certification when plaintiffs presented evidence to establish common proof of misclassification] (Sav-On Drug Stores).)
B. Standard of Review
Our review of an order denying class certification differs from ordinary appellate review. (Tellez v. Rich Voss Trucking, Inc. (2015) 240 Cal.App.4th 1052, 1062.) "We review the trial court's actual reasons for granting or denying certification; if they are erroneous, we must reverse, whether or not other reasons not relied upon might have supported the ruling." (Ayala v. Antelope Valley Newspapers, Inc. (2014) 59 Cal.4th 522, 530.) Additionally, our inquiry "is narrowly circumscribed. 'The decision to certify a class rests squarely within the discretion of the trial court, and we afford that decision great deference on appeal, reversing only for a manifest abuse of discretion: "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." [Citation.] A certification order generally will not be disturbed unless (1) it is unsupported by substantial evidence, (2) it rests on improper criteria, or (3) it rests on erroneous legal assumptions." [Citation.]'" (Brinker, supra, 53 Cal.4th at p. 1022; see also Downey, supra, 44 Cal.App.5th at p. 1113.) Only "'"if the trial court failed to follow the correct legal analysis . . ., [is] 'an appellate court . . . required to reverse . . . "even though there may be substantial evidence to support the court's order."'"'" (Marler v. E.M. Johansing, LLC (2011) 199 Cal.App.4th 1450, 1459.)
C. Analysis
Here, the trial court ruled that determining whether a senior planner has been misclassified is not suitable for class adjudication, since an inquiry into whether any one senior planner is properly exempt would be predominated by individual issues. This ruling is amply supported by the record, which contains evidence that senior planners performed a wide variety of work tasks that varied not just between regional offices but between individual senior planners based upon the size and complexity of construction projects in their assigned cities.
The bevy of contradictory declarations and other evidence advanced by both parties establishes that while some senior planners may meet the standards of the administrative exemption, others may not. Some senior planners claimed that the exercise of independent judgment and discretion was central to their jobs; others claimed that their work was entirely constrained by supervisors, auditors, and/or the design manual. Some senior planners characterized their work as a creative exercise requiring them to analyze and synthesize a wide body of standards and guidelines to create a functional work product, akin to exempt postgraduate law clerks performing complex legal analysis (see Zelasko-Barrett v. Brayton-Purcell, LLP (2011) 198 Cal.App.4th 582, 591-592); others maintained that they performed routine, unsophisticated tasks that rarely varied from assignment to assignment. (See Martinez v. Joe's Crab Shack Holdings (2014) 231 Cal.App.4th 362, 380 [managerial employees nonexempt due to performing "'highly standardized'" tasks]). Some senior planners said that their work was very similar to the work done by nonexempt planners; others, including Cessna, admitted that they spent as little as one percent of their time on the kind of routine work done by planners.
Cessna does not argue that SCE "knowingly encouraged a uniform de facto practice inconsistent with" the administrative exemption, thus creating a presumptively strong case for class adjudication. (Duran, supra, 49 Cal.4th at p. 37.) Instead, he raises two basic arguments against the trial court's ruling.
First, he argues that the trial court did not consider whether any senior planner satisfies the first element of the administrative exemption-namely, that no senior planner is involved in "the performance of office or non-manual work directly related to management policies or general business operations of his employer or his employer's customers." (Cal. Code Regs., tit. 8, § 11010, subd. (7)(B).) Because the test for the administrative exemption is conjunctive, Cessna argues that the failure of any senior planner to meet this element establishes sufficient uniformity to warrant class adjudication.
However, the record establishes that the trial court had sufficient evidence to make its finding that "evaluation of whether the elements of the administrative exemption"- including whether the senior planners performed work "directly related to management policies or general business operations"- "have been established requires a fact intensive inquiry." The phrase "directly related to management policies or general business operations of [the] employer or [the] employer's customers" refers to activities related to the administrative operations of a business, as distinguished from "'production'" or "'sales'" work. (29 C.F.R. § 541.205(a) (2000).) Here, SCE adduced evidence that at least some senior planners performed design and project coordination tasks distinct from the production or sale of electrical power, providing substantial input into how SCE's clients' projects should be constructed and operated with respect to their electrical demands. They also provided evidence that senior planners could suggest changes to SCE's general guidelines for project design and management. This evidence establishes sufficient doubt as to whether the first element of the administrative exemption test was subject to class wide determination.
Second, Cessna argues that the trial court's conclusion that the senior planners exercised varying amounts of independence and discretion was evidentiarily unsupported. His argument emphasizes the testimony of his declarants, who characterized their work as essentially routine, while ignoring or downplaying declarants who testified that senior planners have "a great deal of discretion" as long as their plans meet "the minimum[] [standards] of the [design manual]." As such, his argument is unavailing; given our deferential standard of review, we cannot reverse the trial court's ruling merely because a different interpretation of the record could yield a different result. (Cf. Sav-on Drug Stores, supra, 34 Cal.4th at p. 331 [affirming denial of class certification even though "denial of certification might have been affirmed on the very same evidentiary record"].)
Cessna also argues that the trial court's conclusion on the senior planners' independence and discretion is fatally flawed because its order did not spell out which of the senior planners' tasks it considered to involve sufficient discretion to be considered exempt. However, Cessna cites no legal authority requiring trial courts to make such a detailed accounting. (See Cahill v. San Diego Gas &Electric Co. (2011) 194 Cal.App.4th 939, 956 ["'The absence of cogent legal argument or citation to authority allows this court to treat the contention as waived.' [Citations.]"].)
Even if this argument was properly supported, it misses the point of the trial court's ruling. The trial court found that each senior planner appeared to perform the basic functions of their job differently based on a number of variables, including the regional office to which he or she was staffed and the complexity of any given project to which he or she was assigned. Under these circumstances, the court felt that it could not determine whether many basic functions of the job were exempt or nonexempt-which is exactly why it denied Cessna's motion for class certification.
II. PAGA Claims
A. Applicable Law and Standard of Review
"[C]ourts have inherent authority to ensure that a PAGA claim will be manageable at trial-including the power to strike the claim, if necessary." (Wesson v. Staples the Office Superstore, LLC (2021) 68 Cal.App.5th 746, 762-763 (Wesson).)
Unlike class action claims, "PAGA includes no general requirement . . . that the plaintiff establish a well-defined community of interest, encompassing a showing that common questions predominate over individual ones." (Wesson, supra, 68 Cal.App.5th at p. 766.) However, "[t]he same concerns attendant to the fair and efficient trial of representative claims apply in the context of PAGA actions." (Id. at p. 765.)
B. Analysis
As demonstrated above, the record in this case raises substantial manageability issues. SCE proffered evidence that senior planners performed a variety of different tasks in different district offices with diverse situations, requiring variable uses of independence and discretion. (See Wesson, supra, 68 Cal.App.5th at pp. 772-773 [affirming a trial court's decision to strike PAGA claims when the defendant employer "adduced evidence that the . . . position was not standardized," "that there was great variation in how [employees] performed their jobs and the extent to which they performed nonexempt tasks," and that different offices "varied widely in size . . . staffing levels, . . . budgets, and other variables that affected [employee] work experience"].) The trial court was justified in concluding that Cessna's PAGA claims would prove unmanageable to litigate.
Cessna offers two arguments against this conclusion. First, he argues that the standards used to determine manageability in a class action context should not be used to determine manageability of a litigant's PAGA claims, and that a PAGA claim should be permitted to proceed as long as it "comports with the requirements of due process." Cessna's proposition ignores the Wesson court's analysis, which focuses on the trial court's responsibility to ensure that claims can be fairly and practicably litigated in the interest of both parties' due process rights. (See Wesson, supra, 68 Cal.App.5th at pp. 765-766.) Like the Wesson court, "[w]e 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." (Id. at p. 766.) Accordingly, the same problems that render Cessna's suit unmanageable for class action purposes may also be considered in determining the feasibility of his PAGA claim.
Lastly, Cessna argues that his class certification motion, as repeated in his PAGA trial plan, provides a blueprint for how to manage his PAGA claims. However, as we outlined above, the trial court appropriately concluded that Cessna's class action plan was riddled with manageability concerns, as individual issues predominated the central questions of his claims for wage and hour violations. The same conclusion holds true for Cessna's substantially similar PAGA claim.
DISPOSITION
The orders are affirmed. SCE is entitled to its costs on appeal.
We concur: LUI P. J., CHAVEZ J.