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Starbucks Corporation v. the Superior Court of Orange County

April 25, 2011

STARBUCKS CORPORATION, PETITIONER,
v.
THE SUPERIOR COURT OF ORANGE COUNTY, RESPONDENT; ERIK LORDS ET AL., REAL PARTIES IN INTEREST.



Original proceedings; petition for a writ of mandate to challenge an order of the Superior Court of Orange County, Gail A. Andler, Judge. (Super. Ct. No. 05CC00130)

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

CERTIFIED FOR PUBLICATION

OPINION

Petition granted.

Can a purported remedy cause the very disease it is supposed to prevent? In this so-called "headless" class action, the answer regrettably is yes.

During the first administration of Governor Edmund G. Brown, Jr., in the mid-1970s, the California Legislature reformed the state's marijuana laws to require the "destruction" by "permanent obliteration" of all records of minor marijuana convictions that were more than two years old. Employers were prohibited from even asking about such convictions on their job applications, with statutory penalties of the greater of actual damages, or $200 per aggrieved applicant.

Real parties are three individuals who brought a class action against petitioner Starbucks Corporation (Starbucks), seeking some $26 million in statutory penalties on behalf of an estimated 135,000 job applicants, because Starbucks's preprinted job application allegedly violated provisions of this marijuana reform legislation. In Starbucks Corp. v. Superior Court (2008) 168 Cal.App.4th 1436 (Starbucks I), we held real parties did not have standing to represent the proposed class because none had any marijuana convictions to reveal. We declined to turn the legislation into a "veritable financial bonanza for litigants like plaintiffs who had no fear of stigmatizing marijuana convictions." (Id. at p. 1449.)

Following our opinion, real parties were dismissed as class representatives on summary judgment. One would have thought this class action suit therefore had reached an end. However, the court permitted plaintiffs to file a first amended complaint to include only job applicants with marijuana convictions. The court also allowed class counsel to conduct further discovery to find a "suitable" class representative. To achieve this, Starbucks has been ordered to randomly review job applications until it identifies job applicants with prior marijuana convictions. Their names are to be disclosed to class counsel unless they affirmatively opt out to a neutral administrator.

By providing for the disclosure of job applicants with minor marijuana convictions, the discovery order ironically violates the very marijuana reform legislation the class action purports to enforce. We fail to understand how destroying applicants' statutory privacy rights can serve to protect them. We reverse the discovery order.

I FACTUAL AND PROCEDURAL BACKGROUND

In 2005, plaintiffs and real parties in interest Erik Lords, Hon Yeung and Donald Brown (collectively plaintiffs) each applied for a job at Starbucks. In June of that year, they filed a class action lawsuit against Starbucks on behalf of some 135,000 job applicants, alleging it failed to adequately advise job applicants not to disclose minor marijuana convictions more than two years old. (See Lab. Code, §§ 432.7, subd. (c), 432.8.)

None of the plaintiffs had been convicted of a marijuana-related crime. But they contended that California law allowed any job applicant to receive a minimum statutory penalty of $200 per applicant if they filled out an improper job application.

The trial court agreed. In November 2007, the court certified a class of all persons who applied to work at Starbucks since mid-2004. The court held that all job applicants, even those who never had sustained a marijuana conviction, were entitled to the $200 statutory penalty. Indeed, job applicants who sustained actual damages because their privacy was invaded were excluded from the class. No notice was given to these putative class members.

In Starbucks I, supra, 168 Cal.App.4th 1436, we held that neither plaintiffs nor the tens of thousands of job applicants they purported to represent were entitled to recover statutory penalties where they did not have any marijuana convictions to disclose. We stated, "Only an individual with a marijuana-related conviction falls within the class of people the Legislature sought to protect." (Id. at p. 1449.) We disapproved of the use of litigation "to precipitate payoffs by private businesses for alleged violations of law having no real relationship to a true public interest." (Id. at p. 1451.)

Following our issuance of the writ, the case was assigned to a new judge. In August 2009, the court issued an order granting Starbucks's motion for summary judgment as to the three named plaintiffs, who "are therefore found not to be adequate representatives of the class," and giving plaintiffs 10 days in which to "'amend the complaint, redefine the class, or to add new individual plaintiffs, or both, in order to establish ...


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