TJX Co v. Superior Court of Orange County

• Decision Date: 06 March 2001
• Citation: 104 Cal.Rptr.2d 810,87 Cal.App.4th 747
• Court: California Court of Appeals Court of Appeals
• Parties: (Cal.App. 4 Dist. 2001) THE TJX COMPANIES, INC., Petitioner, v. THE SUPERIOR COURT OF ORANGE COUNTY, Respondent; CINDY BURCHARD et al., Real Parties In Interest. G027891 Filed

104 Cal.Rptr.2d 810 (Cal.App. 4 Dist. 2001)

THE TJX COMPANIES, INC., Petitioner, v. THE SUPERIOR COURT OF ORANGE COUNTY, Respondent; CINDY BURCHARD et al., Real Parties In Interest.

G027891

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA FOURTH APPELLATE DISTRICT DIVISION THREE

Filed 3/6/01

(Super. Ct. No. 00CC02603)

Original proceedings; petition for a writ of mandate to challenge an order of the Superior Court of Orange County, Mason L. Fenton, Judge. (Retired Judge of the Superior Court, assigned by the Chief Justice pursuant to art. VI, 6 of the Cal. Const.) Writ granted.

Jackson, Lewis, Schnitzler & Krupman, Frank M. Liberatore, Kristin L. Cihak and Cary G. Palmer for Petitioner.

No appearance for Respondent.

Robert F. Coleman and James S. Davis for Real Parties in Interest.

CERTIFIED FOR PUBLICATION

CROSBY, J.

O P I N I O N

The trial court subjected petitioner to the rigors of class action discovery without holding an oral hearing on petitioner's demurrer. There was a real and genuine dispute whether the complaint alleged facts sufficient to establish the elements necessary for maintenance of a class action, including a community of interest among the potential class members and a preponderance of common questions of law and fact when compared with those requiring separate adjudication. (See, e.g., Washington Mutual Bank v. Superior Court (2001) 24 Cal.4th 906.) Trial judges may not summarily dispose of such critical pretrial matters. We hold the parties are entitled to an oral hearing before the court rules.

I

Defendant TJX Companies, Inc. (TJX) owns and operates two large retail store chains in California, "T.J. Maxx" and "Marshalls." Plaintiffs Cindy Burchard and Maureen Jordan are TJX assistant managers in Orange County.

In February 2000, plaintiffs brought a statewide class action on behalf of TJX assistant managers in more than 150 retail stores to recover unpaid overtime. They alleged that TJX refused to pay overtime, even when its assistant managers performed such non-exempt tasks as waiting on customers, stocking shelves, and scrubbing toilets. They sought back pay, penalty wages, attorney fees, punitive damages, and a protective order against retaliation.

In July 2000, TJX demurred to the first amended complaint and moved to strike the claim for punitive damages. It argued common questions did not predominate because recovery depended on a quantitative examination how the individual assistant managers actually spent their work time. This would splinter the lawsuit into "mini-trials for each and every class member, thereby defeating any reasonable rationale for class certification."

Plaintiffs opposed the demurrer as premature because "the preferred course is to defer decision on the propriety of the class action until an evidentiary hearing has been held on the appropriateness of class litigation." They committed to promptly filing such a motion after completion of discovery regarding class certification.

A hearing on the demurrer was set for August 18, 2000, before Judge Robert Thomas. But two days before, the court clerk faxed a minute order ruling to the parties. Judge Fenton, sitting temporarily by assignment, overruled the demurrer and denied the motion to strike. The order ended with the notation, "Oral Argument will not be heard. [] Plaintiffs' counsel shall give notice."

TJX sought a writ of mandate. We issued an order to show cause and stayed all trial court proceedings pending our resolution of the issue. During arguments before this court, plaintiffs' counsel agreed that oral argument should have been allowed below.

II

A

Our starting point is the Supreme Court's decision in Lewis v. Superior Court (1999) 19 Cal.4th 1232 (Lewis). Lewis analyzed the words and context of the statutes governing prerogative writs (Code Civ. Proc., 1088, 1094) to determine whether the requirement that the case be "heard" called for oral argument. Lewis held the applicable statutes did not mandate oral argument because peremptory writs only issue in narrow circumstances to correct obvious errors. (Id. at pp. 1237, 1241, 1250.) Since the outcome was clear, oral argument was "unnecessary in this context" and "would amount to an empty gesture." (Id. at pp. 1258-1259.) Lewis minimized its own impact. The court emphasized the "truly exceptional" nature of the accelerated procedure for peremptory writs where "[a]pplication of established law to undisputed facts . . . leave[s] no room for doubt regarding the proper result." (Id. at p. 1261.)

We have applied a Lewis-like analysis to require oral arguments in the following situations: summary judgments (Gwartz v. Superior Court (1999) 71 Cal.App.4th 480; Mediterranean Construction Co. v. State Farm Fire & Casualty Co. (1998) 66 Cal.App.4th 257 (Mediterranean)), pretrial writs of attachments (Hobbs v. Weiss (1999) 73 Cal.App.4th 76 (Hobbs) and, most recently, discovery motions regarding documents subject to the attorney-client privilege (Titmas v. Superior Court (Feb. __, 2001, G027750) ___ Cal.App.4th ___, http://www.courtinfo.ca.gov/opinions (Titmas)).

In Mediterranean an insurance carrier sought summary judgment to establish that it had no duty to defend or indemnify a contractor in a construction defect lawsuit. (Id. at p. 261.) We cited statutory requirements for the "time appointed for a hearing" and references to the making of evidentiary objections "at the hearing" to show the Legislature's intent. (66 Cal.App.4th at pp. 262-263, citing Code Civ. Proc., 437c, subds. (a), (d), italics added.)

Hobbs involved a critical matter in a commercial lease dispute, a creditor's attempt to freeze some of the debtor's assets during the litigation - hardly a "'de minimis'" or "'insubstantial' . . . deprivation." (73 Cal.App.4th at p. 79.) We relied on the statutory prohibition against the issuance of pretrial writs of attachment "except after a hearing." (73 Cal.App.4th at p. 81, citing Code Civ. Proc., 484.040, italics added.) We noted the evidentiary issues at stake and the importance of giving both sides the opportunity to "directly confront the judge who will rule on the right-to-attach order, explain their position, and address the judge's concerns." (Id. at p. 81)

We glean from Lewis, Mediterranean, and Hobbs the following principles: The court should look to the words of the statute and apply their plain meaning, if there is one. (Lewis, supra, 19 Cal.4th at p. 1245.) But where the statutes employ imprecise terms such as "heard" and "hearing," then we further analyze whether "the context or other language indicates a contrary intent." (Lewis, supra, 19 Cal.4th at p. 1247.) In so doing we study the entire statutory scheme, reading the provisions in context and considering their nature and purpose. (Id. at pp. 1245, 1249-1250.) Does the trial judge act as a fact finder or adjudicate any issues at the hearing? Are any procedural remedies (making evidentiary objections, orally moving for a continuance) provided for any of the litigants at the time of the hearing? Do the proceedings involve "critical pretrial matters of considerable significance to the parties. . . ." (Mediterranean, supra, 66 Cal.App.4th at pp. 266-267.)

Last, we consider the bona fides of the pending motion: Is there an authentic dispute, or are the issues so obvious or well-settled that oral argument "would amount to an empty gesture"? (Lewis, supra, 19 Cal.4th at pp. 1258-1259.)

B

The instant demurrer to the class action allegations provides a classic example of the type of critical pretrial proceeding for which oral argument is required. Both the statutory language and the legislative scheme compel the conclusion that an oral hearing is a necessary component to attacks by demurrer on class action allegations and a summary disposition is impermissible.

We look first to the pertinent statutes. A party who demurs to a complaint is entitled to a "hearing" on a specified date. (Cal. Rules of Court, rules 303(c), 325(b).) The court is permitted to change the hearing date to an earlier or later day "on notice prescribed by the court," but nothing in the rules permits it to dispense with the hearing date altogether. (Cal. Rules of Court, rule 325(b).) The rules detail the procedure concerning rulings on demurrers when one or more parties fails to appear at "the hearing." (Cal. Rules of Court, rule 325(d).) With the exception of the tentative ruling procedure (where the court, by local rule, may adopt a tentative ruling procedure requiring parties to give advance notice of their intent to appeal at oral argument"), the rules are silent regarding decisions on the basis of the papers alone when the parties have not submitted. (Cal. Rules of Court, rules 324(a), 325(d).)¹

We next consider the statutory context, particularly the role of demurrers as a screening mechanism for improperly pleaded class action allegations. The Supreme Court has recognized the role of early merit challenges in "weeding out legally meritless [class] suits prior to certification . . . ." (Linder v. Thrifty Oil Co. (2000) 23 Cal.4th 429, 440.) According to Linder, the "interests of fairness and efficiency" are furthered when courts hold hearings on demurrers or dispositive early motions to scrutinize "a proposed class cause of action to determine whether, assuming its merit, it is suitable for resolution on a classwide basis. Indeed, issues affecting the merits of a case may be enmeshed with class action requirements, such as whether substantially similar questions are common to the class and predominate over individual questions or whether the claims or defenses of the representative plaintiffs are typical of class claims or defenses." (Id. at p. 443.) While class actions provide a necessary remedy to "large numbers of people [who have been harmed] in small amounts instead of small numbers of people in large amounts," they have the potential to promote injustice as well. (Id. at p. 446.)

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