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Amalgamated Transit Union, Local 1756, AFL-CIO v. Superior Court of Los Angeles County

June 29, 2009

AMALGAMATED TRANSIT UNION, LOCAL 1756, AFL-CIO ET AL., PETITIONERS,
v.
THE SUPERIOR COURT OF LOS ANGELES COUNTY, LOS ANGELES COUNTY RESPONDENT;
FIRST TRANSIT, INC., ET AL., REAL PARTIES IN INTEREST.



Ct.App. 2/8 B191879 Super. Ct. No. KC043962. Court: Superior County: Los Angeles Judge: Carl J. West.

The opinion of the court was delivered by: Kennard, J.

(this opinion should follow the companion case, S155965, also filed 6/29/09)

At issue here are two state laws. One is the unfair competition law, which allows a private party to bring an unfair competition action on behalf of others (Bus. & Prof. Code, § 17203), but only if the person ―has suffered injury in fact and has lost money or property as a result of the unfair competition.‖ (Id. § 17204.) The other law is the Labor Code Private Attorneys General Act of 2004, which provides that an ―aggrieved employee‖ may bring an action to recover civil penalties for violations of the Labor Code ―on behalf of himself or herself and other current or former employees . . . .‖ (Lab. Code, § 2699, subd. (a).)

This case presents two issues. First, may a plaintiff labor union that has not suffered actual injury under the unfair competition law, and that is not an ―aggrieved employee‖ under the Labor Code Private Attorney General Act of 2004, nevertheless bring a representative action under those laws (1) as the assignee of employees who have suffered an actual injury and who are aggrieved employees, or (2) as an association whose members have suffered actual injury and are aggrieved employees? The answer is ―no.‖ Second, must a representative action under the unfair competition law be brought as a class action? The answer is ―yes,‖ for the reasons stated in the companion case of Arias v. Superior Court (June 29, 2009, S155965) ___ Cal.4th ___.

I.

Seventeen individual plaintiffs and two labor unions - Amalgamated Transit Union, Local 1756, AFL-CIO and Teamsters Joint Council 42, AFL-CIO (plaintiff unions) - brought this action against defendants First Transit, Inc., Progressive Transportation Services, Inc., and Laidlaw Transit Services, Inc.

In the fourth amended complaint plaintiff unions alleged: (1) they are the representatives of defendants' employees; (2) this action is brought on behalf of themselves and ―all aggrieved transportation industry employees and former employees employed by‖ defendants; and (3) over 150 employees and former employees of defendants have assigned to plaintiff unions their rights under the unfair competition law and the Labor Code Private Attorney General Act of 2004, ―including the right to sue in a representative capacity.‖ With respect to the individual plaintiffs, they allege they are bringing this action on behalf of themselves as well as on behalf of current and former employees of defendants.

The fourth amended complaint further alleged that defendants have violated the unfair competition law, and that defendants are subject to civil penalties under the Labor Code Private Attorneys General Act of 2004 for failing to provide meal or rest periods as required by the Labor Code and by an Industrial Welfare Commission wage order. The complaint sought injunctive relief; restitution of $10,608,000 in unpaid wages; in lieu of unprovided meal and rest periods, 30 days' wages for each employee who was terminated without being paid; $2,626,500 in civil penalties; prejudgment interest; and attorney fees.

The case was assigned to a judge in the complex litigation program of the Los Angeles County Superior Court. The judge held an initial status conference, determined that this case was one of five related actions, and designated this action as the lead case. The parties stipulated to a briefing schedule and to a hearing date on which the trial judge would decide threshold legal issues, such as whether plaintiff unions had standing to sue and whether this representative action must be brought as a class action.

After briefing and oral argument, the trial court ruled: (1) plaintiff unions lack standing under the unfair competition law because they have not suffered actual injury, and they lack standing under the Labor Code Private Attorneys General Act of 2004 because they are not ―aggrieved employees‖; (2) employee assignments of rights to plaintiff unions did not confer standing on the unions to prosecute the claims in question, as doing so would circumvent the requirements of both the unfair competition law and the act and would render meaningless recent voter-enacted amendments to the unfair competition law; and (3) the unfair competition law claims brought on behalf of others must be brought as a class action.

Plaintiff unions petitioned the Court of Appeal for a writ of mandate and a stay of the trial court's ruling. After issuing a stay and an order to show cause, a divided Court of Appeal panel denied the petition. We granted plaintiff unions' petition for review.

II.

We begin with a summary of the relevant aspects of both the unfair competition law and the Labor Code Private Attorney General Act of 2004, the two state laws at issue here.

A. Unfair Competition Law

The unfair competition law prohibits ―any unlawful, unfair or fraudulent business act or practice . . . .‖ (Bus. & Prof. Code, § 17200.) Before 2004, the unfair competition law allowed ―any person acting for the interests of itself, its members or the general public‖ to seek restitution or injunctive relief against unfair acts or practices. (Bus. & Prof. Code, former § 17204, added by Stats. 1977, ch. 299, § 1, p. 1202.) Thus, under the former law a plaintiff did not have to show any actual injury, and a representative action brought under the unfair competition law did not have to be brought as a class action. (Former §§ 17203, 17204; Kraus v. Trinity Management Services, ...


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