Employment Development Dept. v. Superior Court

• Decision Date: 27 November 1981
• Docket Number: S.F. 24216
• Court: California Supreme Court
• Parties: , 636 P.2d 575 CALIFORNIA EMPLOYMENT DEVELOPMENT DEPARTMENT et al., Petitioners, v. The SUPERIOR COURT OF SACRAMENTO COUNTY, Respondent; Betty Ann BOREN, Real Party in Interest.

Page 612

178 Cal.Rptr. 612

30 Cal.3d 256, 636 P.2d 575

CALIFORNIA EMPLOYMENT DEVELOPMENT DEPARTMENT et al., Petitioners, v. The SUPERIOR COURT OF SACRAMENTO COUNTY, Respondent;

Betty Ann BOREN, Real Party in Interest.

S.F. 24216.

Supreme Court of California.

Nov. 27, 1981.

As Modified on Denial of Rehearing Jan. 7, 1982.

George Deukmejian, Atty. Gen., Thomas E. Warriner and Robert F. Tyler, Deputy Attys. Gen., for petitioners.

No appearance for respondent.

Richard M. Pearl, Delano, Charles F. Elsesser and Ralph S. Abascal, Sacramento, for real party in interest.

Mary S. Burdick and Marilyn Katz, Los Angeles, as amici curiae on behalf of real party in interest.

KAUS, Justice.

Petitioners California Employment Development Department and related public agencies and officials, defendants in the underlying action (defendants), seek mandate or prohibition to compel the trial court to vacate its order certifying the suit as a class action. Defendants contend primarily that the trial court lacked authority to approve class certification after the principal legal issue in the case had been decided on the merits. ¹ The trial court found, however, that defendants had waived any right they might have had to insist on a determination of class certification before a decision on the merits. Although defendants challenge that finding, our decision in Civil Service Employees Ins. Co. v. Superior Court (1978) 22 Cal.3d 362, 149 Cal.Rptr. 360, 584 P.2d 497 directly supports it. Accordingly, we conclude that the requested writ must be denied.

I.

On August 23, 1972, real party in interest Betty Ann Boren, plaintiff below (plaintiff), filed the underlying action challenging the validity of former section 1264 of the Unemployment Insurance Code, which denied unemployment insurance compensation benefits to any employee who did not provide "the sole or major support of his or her family" and who left his or her job because of "marital or domestic duties." ² The complaint alleged that the statute, though gender-neutral on its face, unlawfully discriminated against women in violation of Title VII of the federal Civil Rights Act of 1964, as well as the equal protection and due process clauses of the United States and California Constitutions. Plaintiff brought the action on behalf of herself and all other women "subjected" to the provisions of section 1264, and sought (1) declaratory judgment that the statute was invalid, (2) injunctive relief to restrain defendants from enforcing it, and (3) mandate to compel defendants to pay plaintiff "and all other persons similarly situated the unemployment insurance benefits to which they are entitled."

The trial court issued an alternative writ of mandate. On September 22, 1972, defendants filed a demurrer which challenged both the adequacy of the complaint's class action allegations and the availability of the requested relief under Title VII. ³ On November 1, 1972, before argument on the demurrer, defendants filed supplemental points and authorities which asserted that section 1264 was not unconstitutional. They relied on a recently filed superior court decision which had expressly upheld the validity of section 1264 in the face of a similar challenge. ⁴

On February 6, 1973, after oral argument and additional briefing, the trial court-without passing upon the adequacy of the complaint's class action allegations-sustained the demurrer with leave to amend on the basis of defendants' substantive contention. Plaintiff elected to stand on the original pleading. On April 2, 1973, the trial court dismissed the action. The judgment specifically stated that it rested on defendants' claim that the complaint failed to state a cause of action.

Plaintiff appealed. The Court of Appeal concluded that section 1264 was unconstitutional and reversed the judgment sustaining the demurrer. (Boren v. Department of Employment Dev. (1976) 59 Cal.App.3d 250, 130 Cal.Rptr. 683.) ⁵ In the course of its opinion, it stated that "(t)he parties have not debated, nor do we decide, whether the action may be maintained as a representative suit." (Id., at p. 261, 130 Cal.Rptr. 683.) In a later unpublished opinion on recall of remittitur, the Court of Appeal confirmed that the class action issue was open for resolution by the trial court on remand.

Plaintiff then filed a motion seeking an order certifying the action as a class action. Defendants opposed the motion on the grounds that certification could not properly be ordered after a decision on the merits and that, in any event, in this particular case the administrative burdens that would be imposed by a class action outweighed the potential benefits of such an action.

On February 13, 1979, the trial court granted plaintiff's motion, concluding that the action could and should proceed as a class action. It found that defendants had "waived the right to have a pre-merit determination of class and prior class notification by proceeding ... without objection (to litigate) the general demurrer and the merits of the action." It also concluded that all of the prerequisites for class certification were met and that "only by adjudication of the controversy as a class action can relief be granted in such a fashion as to protect the rights of the class as a whole and avoid a multiplicity of lawsuits." The court then reserved decision on the specifics of the remedial order that would be appropriate in this case.

On April 10, 1979, before the trial court took any further action on the remedial aspect of the case, defendants filed the present writ proceeding, contesting the class certification order and seeking a stay of the trial court proceedings. The Court of Appeal issued an alternative writ, stayed the proceedings below and, after briefing and oral argument, issued a peremptory writ as requested by defendants. ⁶ We then granted plaintiff's petition for hearing.

II.

Relying on a series of cases which have held that a defendant generally has a right to have class certification issues resolved and class members notified before the merits of an action are decided (see, e. g., Home Sav. & Loan Assn. v. Superior Court (1974) 42 Cal.App.3d 1006, 117 Cal.Rptr. 485 (Home I ); Home Sav. & Loan Assn. v. Superior Court (1976) 54 Cal.App.3d 208, 126 Cal.Rptr. 511 (Home II )), defendants first contend that the trial court could not properly certify the class action after remand from the Court of Appeal because by that time the merits of the principal legal issue in the case had already been decided. In Civil Service Employees Ins. Co. v. Superior Court, supra, however, this court held that when a defendant fails to object to or acquiesces in a determination of the merits before class certification or notification, it waives whatever right to a pre-merit determination of the class action issues it might have had. The trial court relied on Civil Service in concluding that here defendants had waived any such right. Although defendants maintain that this case is distinguishable from Civil Service and that the trial court erred in finding a waiver, we conclude that the ruling was proper.

In Civil Service a class action defendant, also relying upon Home I and Home II, sought to overturn a partial summary judgment which had been entered in favor of the plaintiff before absent class members had been notified of the action. We rejected the defendant's attack, holding that because "defendant did not object to the trial court's entertainment of the (plaintiff's) motion prior to class certification but instead simply contested the motion on the merits ... defendant waived whatever due process rights it may have had to object to the court's resolution of the partial summary judgment motion prior to class notification." (22 Cal.3d at p. 373, 149 Cal.Rptr. 360, 584 P.2d 497.)

Defendants attempt to distinguish this case from Civil Service, noting that in their demurrer they had expressly objected to the maintenance of the suit as a class action whereas in Civil Service the defendant had only objected to the plaintiff's proposed delineation of the class. (Id., at p. 369, 149 Cal.Rptr. 360, 584 P.2d 497.) Defendants assert that because they registered their opposition to the prosecution of the suit as a class action before any decision on the merits, the trial court could not properly find that they had waived any rights with respect to the class action issue.

In advancing this argument, defendants misapprehend the nature of the waiver relied on by this court in Civil Service and by the trial court in this case. In finding that the defendant in Civil Service had waived the right to complain of the timing of the partial summary judgment ruling, we did not rely on the fact that the defendant had not totally opposed class certification. Rather, we reasoned that the defendant could not complain of the court's consideration of the motion for summary judgment before class notification, when it had not requested the court to postpone its ruling until after such notification, but had proceeded to argue the motion on the merits. (Id., at pp. 373-374, 149 Cal.Rptr. 360, 584 P.2d 497.)

In the present case the trial court did not rule that defendants had waived their basic right to oppose class certification on remand from the Court of Appeal; on the contrary, the court fully considered defendants' contentions as to the propriety of class certification before issuing its order. It simply held that defendants could not complain about the timing of the ruling on class certification, because they had not objected to the court's consideration of the merits before class certification when the court initially sustained their demurrer. This holding directly follows from our holding in Civil Service. ⁷

Defendants also maintain that the trial court erred in finding that they had not objected to the trial court's determination of the merits before class certification. Pointing to a passage in the points...