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Munoz Decision Grants California Employers Greater Clarity When Class Action Certification is Denied in Employee Lawsuits

Published by on September 15, 2015

It is well established under California law that an order denying class certification, leaving only the named plaintiff’s individual claims, is an appealable order under the “death knell” doctrine. The rationale for effectively making the trial court’s denial of class certification a final judgment for purposes of an appeal is because the named plaintiff may […]

It is well established under California law that an order denying class certification, leaving only the named plaintiff’s individual claims, is an appealable order under the “death knell” doctrine.

The rationale for effectively making the trial court’s denial of class certification a final judgment for purposes of an appeal is because the named plaintiff may not have the financial incentive to continue pursuing his or her individual claims to a final judgment, thereby denying potential class members of any review of the denial of class certification.

It was undecided, however, whether the “death knell” doctrine applied where class certification was denied, but representative claims pursuant to California’s Private Attorneys General Act of 2004 (“PAGA”) remained.

On June 30, 2015, the California Court of Appeal decided this issue of first impression in the case Munoz v. Chipotle Mexican Grill, Inc., 238 Cal. App. 4th 291 (2015).

In Munoz, plaintiffs brought a putative class action against Chipotle for, among other things, failing to reimburse them and the putative class members for non-slip shoes they were required to purchase and improperly deducting the cost of these non-slip shoes from employee wages without written authorization.

Plaintiff Munoz sought civil penalties on behalf of herself and “all current and former employees” under PAGA. Class certification was denied, and plaintiffs appealed, arguing that the “death knell” doctrine applied. The Court of Appeal dismissed the appeal, holding that the trial court’s denial of class certification was a nonappealable order because the “death knell” doctrine does not apply where PAGA claims remain.

The Court of Appeal reasoned that denial of class certification did not sound the death knell for plaintiffs’ case, which would typically provide a right to appeal, because the plaintiffs still had incentive to proceed with the litigation of the PAGA claims on behalf of other current and former employees – all of whom were members of the putative class for which certification was denied.

Laconic Lookout:

After the Munoz decision, plaintiffs cannot appeal a denial of class certification if viable PAGA claims are asserted. The decision is beneficial for employers because it will likely deter the assertion of PAGA claims in class actions.

Moreover, employers who defeat class certification in these cases can stay focused on litigating the PAGA claims and will not be forced to spend significant time and expense on appeals.

Source: Death knell doctrine, class certification, Private Attorneys General Act of 2004, PAGA, representative action

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