California Court of Appeals, Second District, First Division
from an order of the Superior Court of Los Angeles County No.
BC410865, Teresa Sanchez-Gordon, Judge. Affirmed.
Koes, Allan A. Shenoi, Daniel J. Koes, Nneka Egbujiobi; The
Law Offices of Stephen M. Benardo, Stephen M. Benardo; Appell
Shapiro, Barry Appell and Scott E. Shapiro for Plaintiffs and
Seyfarth Shaw, Andrew M. Paley, James M. Harris, Sheryl L.
Skibbe, Joshua A. Rodine and Kiran Aftab Seldon for Defendant
and Respondent Allstate Insurance Company.
Law Group, Michael J. Bononi and Christy W. Granieri for
Defendant and Respondent Capital Personnel Services, Inc.
Mullins Riley & Scarborough and Cory E. Manning for
Defendant and Respondent Advanced Field Services, Inc.
Epstein Becker & Green, Michael S. Kun and Kevin D.
Sullivan for Defendant and Respondent Farmers Group, Inc.
& Matthai and Kyle Kveton for Defendants and Respondents
CIS Group LLC and North American Compass Insurance Services
CHANEY, ACTING P. J.
putative class action, property inspectors allege they were
engaged by three “service” companies to perform
inspections for two major insurers. The inspectors allege
they were in fact employees of the insurers and service
companies jointly, and were entitled to but deprived of
minimum wages, overtime, meal and rest breaks, reimbursement
of expenses, and accurate wage statements.
inspectors moved for class certification, supported by their
expert's declaration that liability could be determined
and damages calculated classwide by way of statistical
analyses of results obtained from an anonymous, double-blind
survey of a sampling of class members.
trial court summarily rejected the expert's plan and
denied certification on the ground that the inspectors had
failed to show that their status as employees (as opposed to
independent contractors) could be established on
predominately common proof.
reversed the order and remanded the matter with a direction,
as pertinent here, to evaluate plaintiffs' proposed
sampling plan. (McCleery v. Allstate Ins. Co. (Feb.
5, 2016, B256374) [nonpub. opn.].) On remand, plaintiffs
offered a trial plan describing their proposal to establish
liability and damages by way of an anonymous survey of all
class members. The trial court found common issues existed as
to the class members' employment status. It further found
that plaintiffs' survey method, although flawed in some
respects, was carefully crafted for accuracy. However, the
court found plaintiffs' trial plan to be unworkable
because it failed to address individualized issues and
deprived defendants of the ability to assert defenses. The
court therefore again denied certification.
appeal, contending the trial court applied improper criteria
and made incorrect legal assumptions.
conclude that under the analytic framework promulgated by
Brinker Restaurant Corp. v. Superior Court (2012) 53
Cal.4th 1004 (Brinker) and Duran v. U.S. Bank
National Assn. (2014) 59 Cal.4th 1 (Duran), the
trial court acted within its discretion in denying
Procedural Posture Up To the First Appeal
the facts and much of the procedural posture from our prior
inspectors Timothy McCleery, Yvonne Beckner, Terry Quimby and
April Boyles Jackson filed this action on behalf of
themselves and similarly situated persons, alleging
defendants Allstate Insurance Company and Farmers Group,
insurers for whom the plaintiffs provided property inspection
services, and CIS Group LLC/North American Compass Insurance
Services Group (CIS), Advanced Field Services, Inc. (AFS),
and Capital Personnel Services, Inc. (PMG), service companies
contracting to provide inspection services, concocted a
scheme to insulate themselves from labor laws by nominally
employing plaintiffs as independent contractors while
retaining control over all aspects of their work. Plaintiffs
purport to represent a putative class of approximately 1, 550
property inspectors in California.
allege the insurers and service companies were in fact their
joint employers, and all defendants failed to pay minimum
wages and overtime (Lab. Code, § 1194), furnish timely
or accurate wage statements (Lab. Code, § 226, subd.
(e)), establish a policy for meal or rest breaks, or
reimburse them for employment expenses (Lab. Code, §
2802), and in so doing violated the Unfair Competition Law
(Bus. & Prof. Code, § 17200 et seq.; UCL).
2013, plaintiffs filed five class certification motions, one
for each employer, designating one subclass per employer and
a sixth subclass for CIS employees who had suffered
retaliation for cooperating with plaintiffs in this
litigation. Plaintiffs contended defendants' liability or
lack thereof could be determined on common proof regarding
defendants' status as joint employers and their uniform
employment policies, or lack thereof.
opposed the motions, arguing, as pertinent here, that few if
any inspectors provided services for only the defendant
insurers, but in fact freelanced for any insurer that would
hire them; and wide variation existed in their work
practices, as some worked part-time and some full-time, some
long hours on any given day and some short, and some with the
assistance of subcontractors.
trial court tentatively concluded that plaintiffs had
demonstrated the requisite ascertainability and numerosity
for class certification (at least with respect to some
subclasses), as well as the suitability of class counsel and
diligence and typicality of the class representatives. The
court also tentatively concluded that liability issues could
be divided into, as pertinent here, two phases, the first to
determine whether the defendants were plaintiffs' joint
employers and the second to determine whether plaintiffs had
been deprived of legally mandated wage and hour benefits. But
the court requested further briefing on the commonality of
proof of deprivation of wage and hour benefits.
response, plaintiffs submitted the supplemental declaration
of Dr. John Krosnick, their survey expert, setting forth his
plan to use established survey methods and statistical
analyses to accurately determine and measure the extent of
variations in the inspectors' work. Dr. Krosnick
acknowledged that variations in the inspectors' work
practices might not be amenable to classwide proof-for
example, as to overtime, minimum wages, and expenses-but
represented that his methodology for the design and
implementation of a survey of representative samples of the
plaintiffs' class would result in reliable evidence on
issues for which common proof was unavailable, such as
wage-statement violations, amounts owed to compensate
inspectors for earned and unpaid overtime, differences
between earned wages and the minimum wage, compensation for
mileage and other earned and unpaid work expenses, and
compensation for retaliation. Dr. Krosnick declared that his
methodology would account for variations in work practices
and would be manageable, scientifically based, and fair,
using “well-established methodology of random
sampling... designed expressly to gauge the amount of
variation in an attribute within a population, and
well-established statistical procedures for analyzing
randomly sampled data, ” thereby accurately measuring
the degree to which variations in the inspectors' work
affects the plaintiffs' entitlement to the various
employee benefits, “no matter how much variation there
is within the population.”
trial court summarily rejected Dr. Krosnick's plan, and
concluded that defendants' employment practices as to
each class member would necessitate individualized
reversed the order denying certification and directed the
trial court to evaluate the extent to which Dr.
Krosnick's proposed sampling and statistical methods
might render proof of some or all of the liability issues
remand, Dr. Krosnick elaborated on his plan. He explained he
was in the midst of conducting survey research of all people
who performed inspections for Allstate, Farmers, CIS, AFS,
and PMG to gather evidence for both liability and damages
determinations as to unpaid overtime, missed meal and/or rest
breaks, unpaid minimum wage, unreimbursed miles driven, and
other business expenses. After gathering this evidence he
intended to compute penalties and pre-judgment interest.
Krosnick explained his research involved “(1) drawing a
sample of respondents to represent a population, (2)
collecting data from those respondents, and (3) analyzing the
data generated to answer the questions of interest.” He
and his team of researchers had obtained from plaintiffs'
attorneys “the constructs to be measured in the survey,
” which he described as “(1) the amount of
overtime worked, (2) the numbers of meal and rest breaks to
which inspectors were entitled to take under California law
but did not take (assuming that law applied to these
individuals), (3) the amount of time inspectors spent
performing specific tasks of relevance to the claimed minimum
wage violations, (4) the number of miles that inspectors
drove to do their work, [and] (5) the amount of money that
inspectors spent for other business expenses incurred in
connection with their work.”
researchers designed questions to “gauge the target
constructs.” Dr. Krosnick explained that “[t]he
questions were drafted according to the principles of optimal
questionnaire measurement identified in the published peer
reviewed academic literature on survey methodology and
related fields, drawing on [his] expertise and years of
experience in the field.” Each interview would take
approximately 45 minutes, and respondents would be told their
answers and participation were confidential.
ethics approval by IntegReview, an Institutional Review Board
providing ethical review services to scientists conducting
human subjects research, and some pretesting, Dr. Krosnick
retained SSRS, a telephone survey research firm, to conduct
the actual interviews. He sent letters to all potential class
members explaining the survey, inviting them to participate,
and informing them they would be contacted by phone. Each
letter contained a “small financial pre-incentive to
thank each respondent for reading it, ” as well as the
offer of $100 for their participation and an added $10 if
they initiated telephone contact with the research team.
interview was conducted by telephone by an SSRS employee who
read questions from a computer monitor and entered responses
by computer into a flowchart program designed by Dr.
Krosnick. The flowchart updated both itself and the
interviewer's script according to answers received. For
example, if a respondent stated he or she had worked as an
inspector for AFS from 2005 to 2008, the program calculated
the maximum number of months the respondent could have worked
and inserted that number, those years, and the vendor's
name into later questions, obtaining, for example, the
following question: “The maximum number of months you
could have worked with AFS between 2005 and 2008 is 42
months. For how many of those months did you work with
from some initial monitoring, neither Dr. Krosnick nor his
research team participated in the interviews.
were asked preliminary questions to establish whether they
had worked for CIS, AFS, PMG, or Allstate, and when and for
how long. A respondent giving an answer outside known
parameters was coached to give an in-range response. For
example, it was known that AFS performed inspections from
2005 to 2008. If a respondent stated he or she had worked for
AFS after 2008, the interviewer was instructed to say,
“I think I might have misheard you. Let me read the
question again.” If the respondent repeated the
out-of-range year, the interviewer was instructed to say,
“I've been told AFS stopped doing inspections in
2008. Let me read this question again.” If the