Wesson v. Staples the Office Superstore, LLC

• Decision Date: 09 September 2021
• Docket Number: B302988
• Citation: 283 Cal.Rptr.3d 846,68 Cal.App.5th 746
• Parties: Fred WESSON, Plaintiff and Appellant, v. STAPLES THE OFFICE SUPERSTORE, LLC, Defendant and Respondent.
• Court: California Court of Appeals Court of Appeals

68 Cal.App.5th 746

283 Cal.Rptr.3d 846

Fred WESSON, Plaintiff and Appellant,

v.STAPLES THE OFFICE SUPERSTORE, LLC, Defendant and Respondent.

B302988

Court of Appeal, Second District, Division 4, California.

Filed September 9, 2021

Certified for Partial Publication.^*

Schneider Wallace Cottrell Konecky, Todd M. Schneider, Carolyn H. Cottrell, Emeryville, and David C. Leimbach, San Diego; Boucher, Raymond P. Boucher, Woodland Hills, and Maria L. Weitz, for Plaintiff and Appellant.

Morrison & Foerster, Tritia M. Murata, David P. Zins and Maya Harel, Los Angeles, Karen J. Kubin and James R. Sigel, San Francisco, for Defendant and Respondent.

MANELLA, P. J.

INTRODUCTION

This appeal raises a question of first impression: whether trial courts have inherent authority to ensure that PAGA claims will be manageable at trial, and to strike such claims if they cannot be managed. We hold that courts possess this authority.

Appellant Fred Wesson worked for respondent Staples the Office Superstore, LLC (Staples) as a store general manager (GM). He brought this action against Staples, asserting, among other things, a representative claim under the Private Attorneys General Act of 2004 (PAGA) ( Lab. Code, § 2698 et seq. ) on behalf of himself and 345 other current and former Staples GMs in California. In his PAGA claim, Wesson sought almost $36 million in civil penalties for alleged Labor Code violations, all premised on the theory that Staples had misclassified its GMs as exempt executives.

Staples moved to strike Wesson's PAGA claim, arguing that given the number of employees it covered and the nature of his allegations, the action would be "unmanageable" and would violate Staples's due process rights. It contended that its intended affirmative defense -- that it properly classified its GMs as exempt and thus committed no Labor Code violations -- would require individualized proof as to each GM, and thus that the claim could not be fairly and efficiently litigated. In his opposition, Wesson contended that the trial court lacked authority to ensure that PAGA actions are manageable, and argued that even if the court had such authority, it was sufficient that his prima facie case was manageable; whether Staples's affirmative defense could be managed at trial, Wesson contended, was irrelevant. While Staples's motion was pending, Wesson moved for summary adjudication of his PAGA claim.

The trial court invited Wesson to submit a trial plan showing that his PAGA action would be manageable at trial. In response, Wesson continued to insist that the court lacked authority to require that his claim be manageable, and laid out his plan to prove his prima facie case using common proof, but declined to address how the parties could litigate Staples's affirmative defense. Following this response, the court concluded that the PAGA claim could not be managed at trial and granted Staples's motion to strike it. Given this ruling, the court found no need to consider Wesson's motion for summary adjudication as to his PAGA claim and denied the motion.

Wesson challenges both rulings on appeal. He claims the court erred in failing to consider his motion for summary adjudication, as it had the potential to narrow the issues and make the action more manageable. He contends the court should have granted his motion because Staples had failed to provide individualized evidence in support of its exemption defense, at least as to some GMs. As to Staples's motion to strike, Wesson repeats his arguments that the court had no authority to strike his PAGA claim as unmanageable, and that any manageability assessment need not have considered Staples's affirmative defense. He adds that Staples had no due process right to present individualized evidence in support of its defense.

In the unpublished portion of this opinion, we conclude that Wesson was not entitled to summary adjudication, as Staples presented sufficient evidence to support its exemption defense as to all GMs. In the published portion, we draw on established principles of the courts’ inherent authority to manage litigation, including ensuring the manageability of representative claims, and conclude that: (1) courts have inherent authority to ensure that PAGA claims can be fairly and efficiently tried and, if necessary, may strike claims that cannot be rendered manageable; (2) as a matter of due process, defendants are entitled to a fair opportunity to litigate available affirmative defenses, and a court's manageability assessment should account for them; and (3) given the state of the record and Wesson's lack of cooperation with the trial court's manageability inquiry, the court did not abuse its discretion in striking his PAGA claim as unmanageable. We therefore affirm.

BACKGROUND

A. Wesson's Action and the Denial of Class Certification

Staples is a global provider of office products and services to individuals and businesses. As of 2019, it operated about 150 big-box stores in California. Each Staples store is managed by a GM. Wesson was the GM of various Staples stores in Los Angeles County between 2006 and 2016.

In 2015, Wesson brought this action against Staples, alleging causes of action for, inter alia, unpaid overtime and failure to provide rest and meal periods. He later amended his complaint to add a cause of action seeking civil penalties under PAGA. Wesson's PAGA claim covered 346 Staples GMs, including Wesson, and sought almost $36 million in civil penalties under the Labor Code. Each of Wesson's claims was premised on the theory that Staples had misclassified its California GMs as exempt executives (who are not entitled to overtime pay and off-duty meal and rest periods), when in fact they should have been classified as non-exempt, hourly employees.

Wesson moved to certify a class of Staples California GMs, but the trial court denied the motion, concluding he had not demonstrated that his claims were susceptible to common proof. The court found that important factual questions relating to whether GMs spent most of their worktime doing exempt, managerial tasks could not be resolved on a classwide basis.¹ It reasoned that there was too much variation in how Staples GMs performed their jobs and the extent to which they performed non-managerial tasks. Wesson does not challenge this ruling on appeal.

B. Staples's Motion to Strike the PAGA Claim as Unmanageable

Following the court's denial of class certification, Staples moved to strike Wesson's PAGA claim, invoking the court's inherent authority to manage complex litigation. It argued the claim would be unmanageable at trial and would violate Staples's due process rights. In support, Staples pointed to evidence that the GM position was not standardized, and that there was great variation in how Staples GMs performed their jobs and the extent to which they performed non-exempt tasks. According to Staples's evidence, Staples stores varied widely in size, sales volume, staffing levels, labor budgets, store hours, customer-traffic levels, products and services offered for sale, and many other variables, all of which affected GMs’ work experience. Staples's evidence also tended to show that how GMs spent their time depended on their experience, aptitude, and managerial approaches, as well as the size and composition of their management teams. Relying on this evidence and on the trial court's findings in denying class certification, Staples argued that Wesson's claims would require individualized assessments of each GM's classification, and would lead to "an unmanageable mess" that "would waste the time and resources of the Court and the parties."

In his opposition, Wesson contended that the trial court lacked authority to ensure that PAGA actions are manageable. He argued that imposing a manageability requirement would immunize employers from liability and defeat PAGA's purpose. Alternatively, Wesson claimed that even if the court could require that a PAGA claim be manageable, it should consider only the ability to try plaintiff's prima facie case, not the manageability of any affirmative defense.

Before ruling on the merits of Staples's motion, the trial court concluded it had inherent power to strike an unmanageable PAGA claim. It then invited Wesson to submit a trial plan showing that his claim would be manageable, and permitted him to file a supplemental brief in opposition to Staples's motion.

C. Wesson's Motion for Summary Adjudication

Shortly before Wesson was to submit his trial plan, he moved for summary judgment or, in the alternative, summary adjudication on his PAGA claim. We discuss the parties’ respective evidence relating to Wesson's motion in the unpublished portion of this opinion addressing his challenge to the court's ruling on his motion.

D. Wesson's Trial Plan and Supplemental Opposition to Staples's Motion to Strike

In his supplemental opposition to Staples's motion to strike his PAGA claim, Wesson reiterated his position that the court lacked authority to ensure the manageability of his claim. He also repeated his argument that any manageability assessment should not consider Staples's affirmative defense. Wesson agreed that to litigate its exemption defense, "Staples [would] need to proffer ‘a GM-by-GM, week-by-week analysis’ throughout the entire relevant time period that all of the GMs were properly classified as exempt executives." But he asserted that "a manager misclassification PAGA claim is ‘manageable’ so long as [the] plaintiff's prima facie case, concerning each aggrieved employee at issue, is provable by resort to common evidence."

In his trial plan, Wesson explained he intended to prove up his prima facie case using common proof, establishing that GMs did not receive off-duty meal and rest breaks and worked overtime without receiving overtime pay. However, he did not attempt to address how the parties could litigate Staples's exemption defense. He stated that it would be improper for him to "dictate how Staples should go...