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FILED/ENDORSED
1 BLUMENTHAL NORDREHAUG BHOWMIK DE
BLOUW LLP MAY - 6 2020
2 NORMAN B. BLUMENTHAL (SBN 068687)
APARAJIT BHOWMIK (SBN 248066) By:. R. San MlQuei
3 PIYA MUKHERJEE (SBN 274217) Deputy CleiV
VICTORIA B. RIVAPALACIO (SBN 275115)
,4 2255 Calle Clara
La Jolla, CA 92037
.5 Tel: 858.551.1223
Fax: 858.551.1232
6 norm@bamlawca.com
7 Attomeys for Plaintiff
ANDREA SPEARS
8
SETAREH LAW GROUP
9 SHAUN SETAREH (SBN 204514)
shaun@setarehlaw.com
10 9454 Wilshire Blvd., Suite 907
Beverly Hills, CA 90212
11 Telephone: (310) 888-7771
12 Attomeys for Plaintiff
TOMAS R. ARANA
13
SUPERIOR COURT OF THE STATE OF CALIFORNL\
14
COUNTY OF SACRAMENTO
15
ANDREA SPEARS, an individual, on behalf Consolidated Case No. 34-2017-00210560-
16 of herself and on behalf of all persons similarly CU-OE-GDS
situated.
17 Plaintiff, PLAINTIFFS' REPLY EV SUPPORT OF
PLAINTIFFS' TRIAL PRESENTATION
18 AND MANAGEMENT PLAN
19 HEALTH NET OF CALIFORNIA, INC., a Date: May 8, 2020
Califomia Corporation; and Does 1 through 50, Time: 11:30 a.m.
20 inclusive. Dept.: 41
21 Defendants.
22 Original Complaint Filed: April 5, 2017
TOMAS R. ARANA, on behalf of himself, all FAC Filed: June 29, 2017
23 others similarly situated, Consolidated Complaint Filed: Dec. 21, 2017
24 PlaintifF,
25 V.
26 HEALTH NET OF CALIFORNIA, INC., a
Califomia corporation; and DOES 1-50,
27 inclusive,
28 Defendant.
PLAINTIFFS' REPLY ISO TRIAL PRESENTATION AND MANAGEMENT PLAN
1 1. INTRODUCTION
2 Plaintiff Spears and Arana's ("Plaintiffs") claims detailed in Plaintiffs Trial Presentation
3 and Management Plan ("Trial Plan") should be pennitted to proceed to trial, as outlined. Indeed,
4 the Court would abuse its discretion by granting the request by Defendant Health Net of Califomia,
5 Inc. ("Defendant") to dismiss the penalty claims of the State of Califomia brought under the
6 Califomia Private Attomey General Act of2004 ("PAGA") as a denial of the State's Constitutional
7 due process rights to litigate the claims. The tools available for a complex court to manage a PAGA
8 case as defined by the Califomia Court of Appeal in Huff v. Securitas Sec. Servs. USA, Inc., 23 Cal.
9 App. 5th 745, 745 (2018) do not include dismissal of claims of the State without due process.
10 Instead, a trial court may manage the case in a way that "avoids unreasonable consumption of time
11 or resources by utilizing the complex designation and the applicable provisions of Cal. Rules of
12 Court, rule 3.750." M
13 Plaintiffs' Trial Plan, submitted to assist the Court in determining the timing and mechanics
14 of the trial in this matter, proposes a reasonable time frame of four to five days for trial and
15 involving a limited number of witnesses and pieces of evidence. As such. Plaintiffs demonstrate
16 that this case can be tried manageably and should proceed as to the four outlined claims.
17 Defendant's assertion that individualized inquiry will be necessary does not warrant
18 dismissal of PAGA claims. Indeed, such a conclusion would be "inconsistent with PAGA's purpose
19 and statutory scheme" because PAGA cases "often require individualized assessments of liability."
20 Zayers v. KiewU Infrastructure W. Co., 2017 U.S. Dist. LEXIS 216715, at *29 (C.D. Cal. Nov. 9,
21 2017).
22 Defendant's inflated description of the complexities of the claims and the egregiously
23 exaggerated numbers of witnesses cannot transform an otherwise manageable trial to
24 "unmanageable." Defendant's claims that it will require individualized analyses serve only to make
25 the unremarkable showing that a PAGA claim may be fact-intensive, but this is no reason to limit
26 PlaintifTs due process rights to the scope of discovery needed for the claim. The baseless assertion
27 that Defendant's affirmative defense will require the testimony of thousands of aggrieved does not
28 reflect the finite universe of facts and the narrowness of the claims asserted. In short. Defendant's
PLAINTIFFS'REPLY ISO TRL\L PRSENTATION AND MANAGEMENT PLAN
1 inability to stmcture its defense manageably should not be used to penalize the Plaintiffs or the
2 State of Califomia by depriving either of them of their Due Process rights. If that were the law,
3 then all employers would be incentivized to feign an inability to defend a claim as the far easier
4 way put than actually litigating the claim on the merits at trial.
5 Instead, this case should be permitted to proceed to trial. The trial judge who will be hearing
6 the motions in limine in this case will be much better equipped to engage in this management
7 function after the parties exchange exhibit lists (Local Rule 2.98), prepare a joint witness list (Local
8 Rule 2.99), and agree on and file a joint statement of the case (Local Rule 2.99.02).
9 PlaintifFs are certain that the evidence and arguments tp be presented at trial regarding the
10 claims at issue can be effectively presented to the Court in a manageable, as outlined in the Trial
11 Plan. The only reason DeFendant is making a claim to the contrary is to deprive PlaintifF and the
12 State oFCaliFomia oF their respective day in Court in violation oF their respective Constitutional
13 Due Process rights.
14 For all these reasons, as set Forth more fiilly below. Plaintiffs' respectfiilly request that the
15 Court overrule DeFendant's Objections and permit this case to go to trial.
16
17 n. ARGUMENT
18 A. Plaintiffs' Claims are Manageable
19 PlaintiFFs' Trial Plan explains clearly that the claims pursued here can be tried manageably.
20 PlaintifFs detail the limited amount oF evidence and number oF witnesses that will be necessary to
21 try the claims, demonstrating manageability. Huff v. Securitas Services USA, Inc., 233 Cal. Rptr.3d
22 502,513 (2018) ("Where appropriate, cases brought under PAGA can be designated complex under
23 the CaliFomia Rules oFCourt (as in this case), with rules designed to manage the expenditure of
24 resources." (emphasis added)).
25 DeFendant, instead, presents the False argument that any individual analyses oFthe aggrieved
26 employees would render PlaintifPs PAGA action "unmanageable." However, DeFendant's position
27 is contrary to controlling case law:
28 To hold that a PAGA action could not be maintained because the individual
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PLAINTIFFS' REPLY ISO TRIAL PRESENTATION AND MANAGEMENT PLAN
1 assessments regarding whether a violation had occurred would make the claim
unmanageable at trial would obliterate [the purpose oF PAGA], as every PAGA
2 action in some way requires some individualized assessment regarding whether a
Labor Code violation has occurred.
Plaistedv. Dress Barn, Inc., 2012 U.S. Dist. LEXIS 135599, *10 (C.D. Cal. Sept. 20, 2012); see
also. Brown v. Am. Airlines, Inc., 2015 U.S. Dist. LEXIS 150670, *3 (CD. Cal. Oct. 5, 2015)
["every PAGA action in some ways requires some individualized assessment regarding whether a
Labor Code violation has occurred."].)).
Under PAGA, an aggrieved employee steps in the shoes oFthe State oFCaliFomia and,
acting as a private attomey general, may bring a civil action personally and on behalF oF other
current or Former employees to recover civil penalties For Labor Code violations. Brooks v.
Amerihome Mortg Co., LLC, 2020 Cal. App. LEXIS 287, at *4-5 (Ct. App. Mar. 16, 2020).
Because of the posture of the aggrieved employees, a PAGA action is a dispute between an
employer and the state. Id., at *6. "Holding that individualized liability determinations make
representative PAGA actions unmanageable, and therefore untenable, would impose a barrier on
such actions that the state law enforcement agency does not face when it litigates those cases itself"
Zayers, 2017 U.S. Dist. LEXIS 216715 at *30 (citing Iskanian, supra, 59 Cal.4th at 380; Arias,
supra, 46 Cal. 4tii at 973).
A trial plan for a PAGA action need not avoid all individual analysis. See Tseng v.
Nordstrom, Inc., 2016 U.S. Dist. LEXIS 176790, at *18 (C.D. Cal. Dec. 19, 2016). In Tseng, tiie
court denied a defendant's motion for judgment on the pleadings as to a PAGA claim because,
while there is no manageability requirement under PAGA, the plaintiffs trial plan demonstrated
that a trial could, in Fact, proceed manageably. Id. That the plaintifF may still be required to
demonstrate violations on an individual basis did not bar the casefromproceeding:
Id
The Northem District held to this legal precedent in a recent holding in Heredia v. Eddie
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PLAINTIFFS' REPLY ISO TRIAL PRESENTATION AND MANAGEMENT PLAN
1 Bauer LLC, 2020 U.S. Dist. LEXIS 53929 (N.D. Cal. Mar. 27, 2020). There, the deFendant filed a
2 motion to strike the plaintiFf s PAGA claims stricken based on manageability and relying heavily
3 on the court's previous decertification order as to the claims at issue. Id., at *9-10. The court held,
4 however, that the claims, while unmanageable For the purposes oFcertification, were suitable For a
5 PAGA cause oF action because "that PlaintiFf must prove a violation as to each aggrieved employee
6 in order to recover civil penalties For that employee does nbt support the conclusion that permitting
7 PlaintiFFto attempt to prove her case would result in aii unmanageable trial...." Id., at *12-13. The
8 Northem District Court, further, reFerenced the plaintifFs trial plan to demonstrate that, in Fact, the
9 plaintiff proposed a manageable trial. Id.,at*l3 ("[T]he Court notes that Plaintiff has presented a
10 Fairly manageable trial plan because Plaintiff has identified a total oF 10 trial witnesses.")
11 Plaintiffs position, here, is identical to that oF the plaintiff in Heredia, supra. That the
12 claims were not certified does not evidence that the claims cannot proceed pursuant to PAGA.
13 Plaintiffs' Trial Plan identifies a total oF six (6) witnesses and, based on Plaintiffs' proposal that the
14 claims not be biFiircated, because the same witnesses can testify as to all claims, there will be no
15 need to prolong the timeframeFor the testimony oF each.
16 Plaintiffs' Trial Plan further provides For a narrow scope oF evidence and provides For
17 liability determinations that can be made based on DeFendant's policies, witness testimony, and
18 expert analysis. For example, DeFendant's liability as to the miscalculation 6F the regular rate oF
19 pay For the payment oFovertime wages will be evidenced by policy documents and pay records that
20 show DeFendant paid the cash in lieu oF benefits directly to the employees rather than to a third
21 party. Further evidence oF liability and a calculation oF damages will be made through an expert
22 analysis oF the wage records, an analysis that has, in Fact, already been perFormed. It is a gross
23 exaggeration that ten witnesses should be required and, even more so, that the pay-period-by-pay-
24 period analysis oF wages is complex and time-consuming. (DeF's Obj. to PL's Trial Plan, ROA
25 483, p.6:27-7:11.) The issue is straightForward and the analysis has already been perFormed.
26 Similarly, Plaintiffs meal period premium claim is manageable as it will be evidenced by a
27 reasonable number oF witnesses and pieces oFevidence, as well as a limited amount oF testimony.
28 Importantly, whether Plaintiffs will need to present evidence regarding why employees took their
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PLAINTIFFS' REPLY ISO TRL\L PRESENTATION AND MANAGEMENT PLAN
1 late or missed meal periods does not deFeat the PAGA claim. In Carrington, the parties presented
2 competing experts where "[b]oth parties' experts testified they were unable to discern From the data
3 why a break was taken late or not at all." Carrington, supra, 30 CaLApp. at Footnotes 10-12.
4 However, the experts' inability to identify the reason(s) for the late/missed breaks did not
5 prevent the court from determining the plaintifrs representative action was not overly
6 individualized. Id. at 526. Accordingly, DeFendant's claim that this matter cannot proceed on a
7 representative basis because Plaintiff "will have to submit evidence as to the reasons why
8 employees took late or missed meal periods" (Motion at 19:20-21) is simply untme.
9 Plaintiffs' Trial Plan is constructed around the evidence DeFendant has already produced in
10 this matter and the expert analysis already conducted. As Plaintiffs demonstrate through the review
11 oFthe inFormation that has already been perFormed, the claims at issue here can be tried manageably.
B. Defendant's Proposed Implausible Defense Does Not Demonstrate That
Plaintiffs' Claims Are Not Manageably Tried
^3 Defendant's representation of an implausible defense carmot transform an otherwise
^^ manageable trial to "unmanageable." The Ninth Circuit explained that, "even if there were evidence
that representative PAGA actions take longer or cost more to arbitrate than othertypesof claims,
the same could be said oFany complex or Fact-intensive claim." Sakkab v. Luxottica RetaUN. Am.,
Inc., 803 F.3d 425, 438 (9th Cir. 2015). Thus, DeFendant's claims oFindividualized analyses here
^8 only make the uru-emarkable showing that the PAGA claim may be Fact-intensive, but this is no
^9 reason to limit Plaintiffs due process rights to the scope oF discovery needed For the claim. IF that
20 -were the case, there would be statutory permissions allowing courts to limit the substantive rights
21 oF litigants bringing complex claims in antitrust, patent infiingement, or other complex claims
22 based on "manageability." There is, however, no such rule anywhere outside oFthe rules pertaining
23 specifically to class certification.
2"^ IF the distinction between class and representative PAGA claims is to have any meaning,
25 tiien DeFendant's claims oF its ovm inability to present a cogent affirmative deFense cannot be a
26 basis to strike the PAGA claims. Such an inequitable outcome would be the result oF erroneously
27 conflating the usual deFenses to a procedural class certification motion with the requirement to
28 present an affirmative deFense to substantive claims such as PAGA, which PlaintiFF can present in
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PLAINTIFFS' REPLY ISO TRL\L PRESENTATION AND MANAGEMENT PLAN
1 a manageable and efficient way.
2 There is no doubt that a trial requiring DeFendant to present a deFense to the Four claims
3 here is manageable. These same claims are decided beFore the Labor Commissioner where
4 employees may be called For an hour and cross-examined For an hour. The list oF witnesses, here,
5 assuming all are called, could be managed in a trial oF only Four to five days. IF some witnesses
6 choose not to appear, then DeFendant can rely on the presentation oFdocuments or testimony from
7 superiors. However, in no event could the Due Process rights oFthe State oFCaliFomia be preserved
8 by accepting as tme DeFendant's exaggeration oFthe inability to present a deFense to Four narrowly
9 constructed claims primarily involving the evaluation oF electronic data. IF that were the law, then
10 all employers would be incentivized to Feign an inability to deFend a claim as the Far easier way out
11 than actually litigating the claim on the merits at trial.
12 DeFendant's objection to the trial plan also does not credibly explain why the duplicative
13 testimony oF every, single one oF the possible 2,559 employees would be required. Certainly,
14 managers or supervisors oF multiple aggrieved employees could be called to testify regarding their
15 perception oF the meal period payment policies or the time delay between the aggrieved employees
16 beginning work and clocking in as to those employees who were their subordinates.
17 Instead, DeFendant inflates every aspect oFthe proposed trial: the complexity oFthe issues,
18 the number oF witnesses, the time necessary For any analysis, and even the number oF aggrieved
19 employees at issue.' DeFendant has not presented a shred oF evidence that a trial regarding the
20 PAGA claims in this action will be unmanageable. There is no dispute, For example, that DeFendant
21 paid the aggrieved employees the "MedFlxWave" payments, "DenFlxWave" payments, SPOT
22 Awards, ACA Incentive payments and Wellness Incentive payments. This Fact has been
23 established. There is, further, no dispute that DeFendant did not include the "MedFlxWave"
24 payments, "DenFlxWave" payments, SPOT Awards, and Wellness Incentive payments in the
25 regular rate oF pay For the purposes oF overtime compensation. Whether these Forms oF
26 compensation should have been included in the calculation will be evidenced by DeFendant's
27 :
' The greatest number of aggrieved employees at issue in any claim is 2,559. This number was determined by
28 PlaintifTs expert, Mr. Eric Lietzow, whose declaration is filed concurrently with Plaintiff Spears's Opposition to
Defendant's Motion to Strike Plaintiffs' PAGA Claims.
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PLAINTIFFS' REPLY ISO TIUAL PRESENTATION AND MANAGEMENT PLAN
1 policies and the pay records oF the aggrieved employees. Whether the ACA Incentive payments
2 were included in the calculation oFthe regular rate can be determined through an expert analysis oF
3 the pay records, just as the calculation oF damages and penalties For the aggrieved employees can
4 be accomplished through an expert analysis oFthe electronic records.
5 As to the meal period claim, which is narrowly Focused on a brieF time period spanning
6 roughly nine months and DeFendant's uniForm policy to avoid paying meal period premiums during
7 that time, DeFendant relies on the denial oFclass certification as a basis to claim that every, single
8 aggrieved employee must be called to trial For DeFendant to raise an aFfirmative deFense. Such a
9 claimringshollow in the Face oF legal precedent such as Carrington v. Starbucks Corporation, 30
10 Cal. App. 5th 504 (2018), where a PAGA action pertaining to meal break violations For over a
11 hundred thousand aggrieved employees was not made unmanageable by witness testimony. Instead,
12 and especially where, as here, the claim is Focused to a single pay code, a minimal time Frame, and
13 a much smaller group oF affected aggrieved employees than even PlaintiFFs' other claims, such a
14 meal period claim can be manageably tried pursuant to Plaintiffs' Trial Plan.
15 Indeed, this record reflecting the finite universe oF Facts and witnesses pertaining to the
16 claims set Forth in Plaintiffs' Trial Plan is not inherently unmanageable and iF DeFendant's
17 affirmative deFense is unwieldy, the situation would be a crisis oF DeFendant's own making.
18 DeFendant's inability to stmcture its deFense manageably should not be used to penalize the
19 PlaintiFFs or the State oFCaliFomia by depriving either oFthem oFtheir Due Process rights. Rather,
.20 Plaintiff and the State are entitled to their day in Court and DeFendant is entitled to DeFendant's
21 allotted time to present DeFendant's evidence to the jury. DeFendant is most certainly not entitled
22 to have the Court prejudge the outcome oFthe trial based on speculation and conjecture. .
23 C. Plaintiffs' Trial Plan Conforms To Its Purpose
24 The purpose of Plaintiffs' Trial Plan is to set Forth the stmcture that Plaintiffs anticipate
25 Following at trial to prove the common questions and to establish the Plan's manageability. The
26 Plan may be refmed and supplemented after the completion oF all discovery and as issues are
27 determined in the case. See Rubenstein, Newberg on Class Actions (5* ed. 2013) § 4:79, p. 314
28 ("Trial plans are provisional and often evolve during the litigation.")
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PLAINTIFFS' REPLY ISO TRIAL PRESENTATION AND MANAGEMENT PLAN
1 The scope oF trial involving the witnesses may be narrowed after the parties exchange
2 motions in limine, exhibit lists (Local Rule 2.98), prepare a joint witness list (Local Rule 2.99), and
3 agree on and file a joint statement oF the case (Local Rule 2.99.02). DeFendant ignores these
4 appropriate trial management procedures For the trial oF the PAGA claim by Failing to request any
5 oF these available procedures. Instead, DeFendant requests relieF that is unsupported by any
6 CaliFomia court or provision oF CaliFomia law in requesting, instead, that these claims not be
7 permitted to proceed.
8 D. A Dismissal of Plaintiffs' PAGA Claims Is Not Permissible Here
9 The Court would abuse its discretion by granting the request by Defendant Health Net of
10 Califomia, Inc. ("Defendant") to dismiss the penalty claims of the State of Califomia brought under
11 tiie Califomia Private Attomey General Act of 2004 ("PAGA") as a denial of the State's
12 Constitutional due processrightsto litigate this claim. The tools available for a complex court to
13 manage a PAGA case as defined by the Califomia Court of Appeal in Huff v. Securitas Sec. Servs.
14 USA, Inc., 23 Cal. App. 5th 745, 745 (2018) do not include dismissal of claims oftiieState witiiout
15 due process. Instead, a trial court may manage the case in a way that "avoids unreasonable
16 consumption of time or resources by utilizing the complex designation and the applicable
17 provisions of Cal. Rules of Court, rule 3.750." Id.
18 The court in Huff held that "[a] court has discretion to order separate trials of issues and
19 determine the order in which those issues are to be decided." Id. at 763. Notably, none oF these
20 procedures For trial management discussed by the Court oF Appeal in Huff or by the CaliFomia
21 Supreme Court in Arias v. Superior Court, Iskanian v. CLS Transportation Los Angeles, LLC,
22 (2014) 59 Cal.4th 349, 379, or Williams v. Superior Court, 3 Cal. 5th 531, 558 (2017) allow For a
23 trial court to violate the due process rights oFthe State CaliFomia by ordering the outright dismissal
24 oFcivil penalty claims oF the State without a trial.
25 The differences between PAGA and a class action were further emphasized by courts
26 holding that the death knell doctrine does not apply to cases where class certification was denied
27 as long as a PAGA claim was plead. Munoz v. Chipotle Mexican Grill, Inc., 238 Cal. App. 4th 291,
28 311 (2015). The rationale behind these cases is that the recovery oF civil penalties under PAGA
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PLAINTIFFS' REPLY ISO TRIAL PRESENTATION AND MANAGEMENT PLAN
/
1 I provides ample financial incentive to the State oF CaliFomia to continue to pursue remaining
2 representative claims under the PAGA after an order denying class certification because the claims,
3 by definition, involve those asserted For violations suffered by many other aggrieved employees
4 and not just the named plaintiff. As aresult,"[djenial oFclass certification where the PAGA claims
5 remain in the tiial court would not have the 'legal effect' oF afinaljudgment." M at 311. Therefore,
6 Defendant's attempt to obtain a final judgment on the PAGA claim here using the same, exact
7 reasoning of this Court's denial of class certification violates Munoz and ignores that such an abuse
8 oF discretion by this Court would invoke the death knell doctrine.
9
10 IIL CONCLUSION
11 For all the Foregoing reasons, Plaintiffs respectfully request that the Court permit the trial
12 in this matter to proceed, as outiined in Plaintiffs' Trial Plan.
13
14
15
Dated: April 17,2020 BLUMENTHAL NORDREHAUG BHOWMIK
16 DE BLOUW LLP
17
18 By:
APARAJIT BHC
BHOWMIK
19 VICTORIA B. RIVAPALACIO
Attomeys For Plaintiff
20 ANDREA SPEARS
21
Dated: April 17- 2020 SETAREH LAW GROUP
22
23
24
" WILLIAM PAO
25 Attorneys For Plaintiff
TOMAS R. ARANA
26
27
28
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PLAINTIFFS' REPLY ISO TRIAL PRESENTATION AND MANAGEMENT PLAN
Preview
FILED/ENDORSED 1 BLUMENTHAL NORDREHAUG BHOWMIK DE BLOUW LLP MAY - 6 2020 2 NORMAN B. BLUMENTHAL (SBN 068687) APARAJIT BHOWMIK (SBN 248066) By:. R. San MlQuei 3 PIYA MUKHERJEE (SBN 274217) Deputy CleiV VICTORIA B. RIVAPALACIO (SBN 275115) ,4 2255 Calle Clara La Jolla, CA 92037 .5 Tel: 858.551.1223 Fax: 858.551.1232 6 norm@bamlawca.com 7 Attomeys for Plaintiff ANDREA SPEARS 8 SETAREH LAW GROUP 9 SHAUN SETAREH (SBN 204514) shaun@setarehlaw.com 10 9454 Wilshire Blvd., Suite 907 Beverly Hills, CA 90212 11 Telephone: (310) 888-7771 12 Attomeys for Plaintiff TOMAS R. ARANA 13 SUPERIOR COURT OF THE STATE OF CALIFORNL\ 14 COUNTY OF SACRAMENTO 15 ANDREA SPEARS, an individual, on behalf Consolidated Case No. 34-2017-00210560- 16 of herself and on behalf of all persons similarly CU-OE-GDS situated. 17 Plaintiff, PLAINTIFFS' REPLY EV SUPPORT OF PLAINTIFFS' TRIAL PRESENTATION 18 AND MANAGEMENT PLAN 19 HEALTH NET OF CALIFORNIA, INC., a Date: May 8, 2020 Califomia Corporation; and Does 1 through 50, Time: 11:30 a.m. 20 inclusive. Dept.: 41 21 Defendants. 22 Original Complaint Filed: April 5, 2017 TOMAS R. ARANA, on behalf of himself, all FAC Filed: June 29, 2017 23 others similarly situated, Consolidated Complaint Filed: Dec. 21, 2017 24 PlaintifF, 25 V. 26 HEALTH NET OF CALIFORNIA, INC., a Califomia corporation; and DOES 1-50, 27 inclusive, 28 Defendant. PLAINTIFFS' REPLY ISO TRIAL PRESENTATION AND MANAGEMENT PLAN 1 1. INTRODUCTION 2 Plaintiff Spears and Arana's ("Plaintiffs") claims detailed in Plaintiffs Trial Presentation 3 and Management Plan ("Trial Plan") should be pennitted to proceed to trial, as outlined. Indeed, 4 the Court would abuse its discretion by granting the request by Defendant Health Net of Califomia, 5 Inc. ("Defendant") to dismiss the penalty claims of the State of Califomia brought under the 6 Califomia Private Attomey General Act of2004 ("PAGA") as a denial of the State's Constitutional 7 due process rights to litigate the claims. The tools available for a complex court to manage a PAGA 8 case as defined by the Califomia Court of Appeal in Huff v. Securitas Sec. Servs. USA, Inc., 23 Cal. 9 App. 5th 745, 745 (2018) do not include dismissal of claims of the State without due process. 10 Instead, a trial court may manage the case in a way that "avoids unreasonable consumption of time 11 or resources by utilizing the complex designation and the applicable provisions of Cal. Rules of 12 Court, rule 3.750." M 13 Plaintiffs' Trial Plan, submitted to assist the Court in determining the timing and mechanics 14 of the trial in this matter, proposes a reasonable time frame of four to five days for trial and 15 involving a limited number of witnesses and pieces of evidence. As such. Plaintiffs demonstrate 16 that this case can be tried manageably and should proceed as to the four outlined claims. 17 Defendant's assertion that individualized inquiry will be necessary does not warrant 18 dismissal of PAGA claims. Indeed, such a conclusion would be "inconsistent with PAGA's purpose 19 and statutory scheme" because PAGA cases "often require individualized assessments of liability." 20 Zayers v. KiewU Infrastructure W. Co., 2017 U.S. Dist. LEXIS 216715, at *29 (C.D. Cal. Nov. 9, 21 2017). 22 Defendant's inflated description of the complexities of the claims and the egregiously 23 exaggerated numbers of witnesses cannot transform an otherwise manageable trial to 24 "unmanageable." Defendant's claims that it will require individualized analyses serve only to make 25 the unremarkable showing that a PAGA claim may be fact-intensive, but this is no reason to limit 26 PlaintifTs due process rights to the scope of discovery needed for the claim. The baseless assertion 27 that Defendant's affirmative defense will require the testimony of thousands of aggrieved does not 28 reflect the finite universe of facts and the narrowness of the claims asserted. In short. Defendant's PLAINTIFFS'REPLY ISO TRL\L PRSENTATION AND MANAGEMENT PLAN 1 inability to stmcture its defense manageably should not be used to penalize the Plaintiffs or the 2 State of Califomia by depriving either of them of their Due Process rights. If that were the law, 3 then all employers would be incentivized to feign an inability to defend a claim as the far easier 4 way put than actually litigating the claim on the merits at trial. 5 Instead, this case should be permitted to proceed to trial. The trial judge who will be hearing 6 the motions in limine in this case will be much better equipped to engage in this management 7 function after the parties exchange exhibit lists (Local Rule 2.98), prepare a joint witness list (Local 8 Rule 2.99), and agree on and file a joint statement of the case (Local Rule 2.99.02). 9 PlaintifFs are certain that the evidence and arguments tp be presented at trial regarding the 10 claims at issue can be effectively presented to the Court in a manageable, as outlined in the Trial 11 Plan. The only reason DeFendant is making a claim to the contrary is to deprive PlaintifF and the 12 State oFCaliFomia oF their respective day in Court in violation oF their respective Constitutional 13 Due Process rights. 14 For all these reasons, as set Forth more fiilly below. Plaintiffs' respectfiilly request that the 15 Court overrule DeFendant's Objections and permit this case to go to trial. 16 17 n. ARGUMENT 18 A. Plaintiffs' Claims are Manageable 19 PlaintiFFs' Trial Plan explains clearly that the claims pursued here can be tried manageably. 20 PlaintifFs detail the limited amount oF evidence and number oF witnesses that will be necessary to 21 try the claims, demonstrating manageability. Huff v. Securitas Services USA, Inc., 233 Cal. Rptr.3d 22 502,513 (2018) ("Where appropriate, cases brought under PAGA can be designated complex under 23 the CaliFomia Rules oFCourt (as in this case), with rules designed to manage the expenditure of 24 resources." (emphasis added)). 25 DeFendant, instead, presents the False argument that any individual analyses oFthe aggrieved 26 employees would render PlaintifPs PAGA action "unmanageable." However, DeFendant's position 27 is contrary to controlling case law: 28 To hold that a PAGA action could not be maintained because the individual -1- PLAINTIFFS' REPLY ISO TRIAL PRESENTATION AND MANAGEMENT PLAN 1 assessments regarding whether a violation had occurred would make the claim unmanageable at trial would obliterate [the purpose oF PAGA], as every PAGA 2 action in some way requires some individualized assessment regarding whether a Labor Code violation has occurred. Plaistedv. Dress Barn, Inc., 2012 U.S. Dist. LEXIS 135599, *10 (C.D. Cal. Sept. 20, 2012); see also. Brown v. Am. Airlines, Inc., 2015 U.S. Dist. LEXIS 150670, *3 (CD. Cal. Oct. 5, 2015) ["every PAGA action in some ways requires some individualized assessment regarding whether a Labor Code violation has occurred."].)). Under PAGA, an aggrieved employee steps in the shoes oFthe State oFCaliFomia and, acting as a private attomey general, may bring a civil action personally and on behalF oF other current or Former employees to recover civil penalties For Labor Code violations. Brooks v. Amerihome Mortg Co., LLC, 2020 Cal. App. LEXIS 287, at *4-5 (Ct. App. Mar. 16, 2020). Because of the posture of the aggrieved employees, a PAGA action is a dispute between an employer and the state. Id., at *6. "Holding that individualized liability determinations make representative PAGA actions unmanageable, and therefore untenable, would impose a barrier on such actions that the state law enforcement agency does not face when it litigates those cases itself" Zayers, 2017 U.S. Dist. LEXIS 216715 at *30 (citing Iskanian, supra, 59 Cal.4th at 380; Arias, supra, 46 Cal. 4tii at 973). A trial plan for a PAGA action need not avoid all individual analysis. See Tseng v. Nordstrom, Inc., 2016 U.S. Dist. LEXIS 176790, at *18 (C.D. Cal. Dec. 19, 2016). In Tseng, tiie court denied a defendant's motion for judgment on the pleadings as to a PAGA claim because, while there is no manageability requirement under PAGA, the plaintiffs trial plan demonstrated that a trial could, in Fact, proceed manageably. Id. That the plaintifF may still be required to demonstrate violations on an individual basis did not bar the casefromproceeding: Id The Northem District held to this legal precedent in a recent holding in Heredia v. Eddie -2- PLAINTIFFS' REPLY ISO TRIAL PRESENTATION AND MANAGEMENT PLAN 1 Bauer LLC, 2020 U.S. Dist. LEXIS 53929 (N.D. Cal. Mar. 27, 2020). There, the deFendant filed a 2 motion to strike the plaintiFf s PAGA claims stricken based on manageability and relying heavily 3 on the court's previous decertification order as to the claims at issue. Id., at *9-10. The court held, 4 however, that the claims, while unmanageable For the purposes oFcertification, were suitable For a 5 PAGA cause oF action because "that PlaintiFf must prove a violation as to each aggrieved employee 6 in order to recover civil penalties For that employee does nbt support the conclusion that permitting 7 PlaintiFFto attempt to prove her case would result in aii unmanageable trial...." Id., at *12-13. The 8 Northem District Court, further, reFerenced the plaintifFs trial plan to demonstrate that, in Fact, the 9 plaintiff proposed a manageable trial. Id.,at*l3 ("[T]he Court notes that Plaintiff has presented a 10 Fairly manageable trial plan because Plaintiff has identified a total oF 10 trial witnesses.") 11 Plaintiffs position, here, is identical to that oF the plaintiff in Heredia, supra. That the 12 claims were not certified does not evidence that the claims cannot proceed pursuant to PAGA. 13 Plaintiffs' Trial Plan identifies a total oF six (6) witnesses and, based on Plaintiffs' proposal that the 14 claims not be biFiircated, because the same witnesses can testify as to all claims, there will be no 15 need to prolong the timeframeFor the testimony oF each. 16 Plaintiffs' Trial Plan further provides For a narrow scope oF evidence and provides For 17 liability determinations that can be made based on DeFendant's policies, witness testimony, and 18 expert analysis. For example, DeFendant's liability as to the miscalculation 6F the regular rate oF 19 pay For the payment oFovertime wages will be evidenced by policy documents and pay records that 20 show DeFendant paid the cash in lieu oF benefits directly to the employees rather than to a third 21 party. Further evidence oF liability and a calculation oF damages will be made through an expert 22 analysis oF the wage records, an analysis that has, in Fact, already been perFormed. It is a gross 23 exaggeration that ten witnesses should be required and, even more so, that the pay-period-by-pay- 24 period analysis oF wages is complex and time-consuming. (DeF's Obj. to PL's Trial Plan, ROA 25 483, p.6:27-7:11.) The issue is straightForward and the analysis has already been perFormed. 26 Similarly, Plaintiffs meal period premium claim is manageable as it will be evidenced by a 27 reasonable number oF witnesses and pieces oFevidence, as well as a limited amount oF testimony. 28 Importantly, whether Plaintiffs will need to present evidence regarding why employees took their -3- PLAINTIFFS' REPLY ISO TRL\L PRESENTATION AND MANAGEMENT PLAN 1 late or missed meal periods does not deFeat the PAGA claim. In Carrington, the parties presented 2 competing experts where "[b]oth parties' experts testified they were unable to discern From the data 3 why a break was taken late or not at all." Carrington, supra, 30 CaLApp. at Footnotes 10-12. 4 However, the experts' inability to identify the reason(s) for the late/missed breaks did not 5 prevent the court from determining the plaintifrs representative action was not overly 6 individualized. Id. at 526. Accordingly, DeFendant's claim that this matter cannot proceed on a 7 representative basis because Plaintiff "will have to submit evidence as to the reasons why 8 employees took late or missed meal periods" (Motion at 19:20-21) is simply untme. 9 Plaintiffs' Trial Plan is constructed around the evidence DeFendant has already produced in 10 this matter and the expert analysis already conducted. As Plaintiffs demonstrate through the review 11 oFthe inFormation that has already been perFormed, the claims at issue here can be tried manageably. B. Defendant's Proposed Implausible Defense Does Not Demonstrate That Plaintiffs' Claims Are Not Manageably Tried ^3 Defendant's representation of an implausible defense carmot transform an otherwise ^^ manageable trial to "unmanageable." The Ninth Circuit explained that, "even if there were evidence that representative PAGA actions take longer or cost more to arbitrate than othertypesof claims, the same could be said oFany complex or Fact-intensive claim." Sakkab v. Luxottica RetaUN. Am., Inc., 803 F.3d 425, 438 (9th Cir. 2015). Thus, DeFendant's claims oFindividualized analyses here ^8 only make the uru-emarkable showing that the PAGA claim may be Fact-intensive, but this is no ^9 reason to limit Plaintiffs due process rights to the scope oF discovery needed For the claim. IF that 20 -were the case, there would be statutory permissions allowing courts to limit the substantive rights 21 oF litigants bringing complex claims in antitrust, patent infiingement, or other complex claims 22 based on "manageability." There is, however, no such rule anywhere outside oFthe rules pertaining 23 specifically to class certification. 2"^ IF the distinction between class and representative PAGA claims is to have any meaning, 25 tiien DeFendant's claims oF its ovm inability to present a cogent affirmative deFense cannot be a 26 basis to strike the PAGA claims. Such an inequitable outcome would be the result oF erroneously 27 conflating the usual deFenses to a procedural class certification motion with the requirement to 28 present an affirmative deFense to substantive claims such as PAGA, which PlaintiFF can present in -4- PLAINTIFFS' REPLY ISO TRL\L PRESENTATION AND MANAGEMENT PLAN 1 a manageable and efficient way. 2 There is no doubt that a trial requiring DeFendant to present a deFense to the Four claims 3 here is manageable. These same claims are decided beFore the Labor Commissioner where 4 employees may be called For an hour and cross-examined For an hour. The list oF witnesses, here, 5 assuming all are called, could be managed in a trial oF only Four to five days. IF some witnesses 6 choose not to appear, then DeFendant can rely on the presentation oFdocuments or testimony from 7 superiors. However, in no event could the Due Process rights oFthe State oFCaliFomia be preserved 8 by accepting as tme DeFendant's exaggeration oFthe inability to present a deFense to Four narrowly 9 constructed claims primarily involving the evaluation oF electronic data. IF that were the law, then 10 all employers would be incentivized to Feign an inability to deFend a claim as the Far easier way out 11 than actually litigating the claim on the merits at trial. 12 DeFendant's objection to the trial plan also does not credibly explain why the duplicative 13 testimony oF every, single one oF the possible 2,559 employees would be required. Certainly, 14 managers or supervisors oF multiple aggrieved employees could be called to testify regarding their 15 perception oF the meal period payment policies or the time delay between the aggrieved employees 16 beginning work and clocking in as to those employees who were their subordinates. 17 Instead, DeFendant inflates every aspect oFthe proposed trial: the complexity oFthe issues, 18 the number oF witnesses, the time necessary For any analysis, and even the number oF aggrieved 19 employees at issue.' DeFendant has not presented a shred oF evidence that a trial regarding the 20 PAGA claims in this action will be unmanageable. There is no dispute, For example, that DeFendant 21 paid the aggrieved employees the "MedFlxWave" payments, "DenFlxWave" payments, SPOT 22 Awards, ACA Incentive payments and Wellness Incentive payments. This Fact has been 23 established. There is, further, no dispute that DeFendant did not include the "MedFlxWave" 24 payments, "DenFlxWave" payments, SPOT Awards, and Wellness Incentive payments in the 25 regular rate oF pay For the purposes oF overtime compensation. Whether these Forms oF 26 compensation should have been included in the calculation will be evidenced by DeFendant's 27 : ' The greatest number of aggrieved employees at issue in any claim is 2,559. This number was determined by 28 PlaintifTs expert, Mr. Eric Lietzow, whose declaration is filed concurrently with Plaintiff Spears's Opposition to Defendant's Motion to Strike Plaintiffs' PAGA Claims. -5- PLAINTIFFS' REPLY ISO TIUAL PRESENTATION AND MANAGEMENT PLAN 1 policies and the pay records oF the aggrieved employees. Whether the ACA Incentive payments 2 were included in the calculation oFthe regular rate can be determined through an expert analysis oF 3 the pay records, just as the calculation oF damages and penalties For the aggrieved employees can 4 be accomplished through an expert analysis oFthe electronic records. 5 As to the meal period claim, which is narrowly Focused on a brieF time period spanning 6 roughly nine months and DeFendant's uniForm policy to avoid paying meal period premiums during 7 that time, DeFendant relies on the denial oFclass certification as a basis to claim that every, single 8 aggrieved employee must be called to trial For DeFendant to raise an aFfirmative deFense. Such a 9 claimringshollow in the Face oF legal precedent such as Carrington v. Starbucks Corporation, 30 10 Cal. App. 5th 504 (2018), where a PAGA action pertaining to meal break violations For over a 11 hundred thousand aggrieved employees was not made unmanageable by witness testimony. Instead, 12 and especially where, as here, the claim is Focused to a single pay code, a minimal time Frame, and 13 a much smaller group oF affected aggrieved employees than even PlaintiFFs' other claims, such a 14 meal period claim can be manageably tried pursuant to Plaintiffs' Trial Plan. 15 Indeed, this record reflecting the finite universe oF Facts and witnesses pertaining to the 16 claims set Forth in Plaintiffs' Trial Plan is not inherently unmanageable and iF DeFendant's 17 affirmative deFense is unwieldy, the situation would be a crisis oF DeFendant's own making. 18 DeFendant's inability to stmcture its deFense manageably should not be used to penalize the 19 PlaintiFFs or the State oFCaliFomia by depriving either oFthem oFtheir Due Process rights. Rather, .20 Plaintiff and the State are entitled to their day in Court and DeFendant is entitled to DeFendant's 21 allotted time to present DeFendant's evidence to the jury. DeFendant is most certainly not entitled 22 to have the Court prejudge the outcome oFthe trial based on speculation and conjecture. . 23 C. Plaintiffs' Trial Plan Conforms To Its Purpose 24 The purpose of Plaintiffs' Trial Plan is to set Forth the stmcture that Plaintiffs anticipate 25 Following at trial to prove the common questions and to establish the Plan's manageability. The 26 Plan may be refmed and supplemented after the completion oF all discovery and as issues are 27 determined in the case. See Rubenstein, Newberg on Class Actions (5* ed. 2013) § 4:79, p. 314 28 ("Trial plans are provisional and often evolve during the litigation.") -6- PLAINTIFFS' REPLY ISO TRIAL PRESENTATION AND MANAGEMENT PLAN 1 The scope oF trial involving the witnesses may be narrowed after the parties exchange 2 motions in limine, exhibit lists (Local Rule 2.98), prepare a joint witness list (Local Rule 2.99), and 3 agree on and file a joint statement oF the case (Local Rule 2.99.02). DeFendant ignores these 4 appropriate trial management procedures For the trial oF the PAGA claim by Failing to request any 5 oF these available procedures. Instead, DeFendant requests relieF that is unsupported by any 6 CaliFomia court or provision oF CaliFomia law in requesting, instead, that these claims not be 7 permitted to proceed. 8 D. A Dismissal of Plaintiffs' PAGA Claims Is Not Permissible Here 9 The Court would abuse its discretion by granting the request by Defendant Health Net of 10 Califomia, Inc. ("Defendant") to dismiss the penalty claims of the State of Califomia brought under 11 tiie Califomia Private Attomey General Act of 2004 ("PAGA") as a denial of the State's 12 Constitutional due processrightsto litigate this claim. The tools available for a complex court to 13 manage a PAGA case as defined by the Califomia Court of Appeal in Huff v. Securitas Sec. Servs. 14 USA, Inc., 23 Cal. App. 5th 745, 745 (2018) do not include dismissal of claims oftiieState witiiout 15 due process. Instead, a trial court may manage the case in a way that "avoids unreasonable 16 consumption of time or resources by utilizing the complex designation and the applicable 17 provisions of Cal. Rules of Court, rule 3.750." Id. 18 The court in Huff held that "[a] court has discretion to order separate trials of issues and 19 determine the order in which those issues are to be decided." Id. at 763. Notably, none oF these 20 procedures For trial management discussed by the Court oF Appeal in Huff or by the CaliFomia 21 Supreme Court in Arias v. Superior Court, Iskanian v. CLS Transportation Los Angeles, LLC, 22 (2014) 59 Cal.4th 349, 379, or Williams v. Superior Court, 3 Cal. 5th 531, 558 (2017) allow For a 23 trial court to violate the due process rights oFthe State CaliFomia by ordering the outright dismissal 24 oFcivil penalty claims oF the State without a trial. 25 The differences between PAGA and a class action were further emphasized by courts 26 holding that the death knell doctrine does not apply to cases where class certification was denied 27 as long as a PAGA claim was plead. Munoz v. Chipotle Mexican Grill, Inc., 238 Cal. App. 4th 291, 28 311 (2015). The rationale behind these cases is that the recovery oF civil penalties under PAGA -7- PLAINTIFFS' REPLY ISO TRIAL PRESENTATION AND MANAGEMENT PLAN / 1 I provides ample financial incentive to the State oF CaliFomia to continue to pursue remaining 2 representative claims under the PAGA after an order denying class certification because the claims, 3 by definition, involve those asserted For violations suffered by many other aggrieved employees 4 and not just the named plaintiff. As aresult,"[djenial oFclass certification where the PAGA claims 5 remain in the tiial court would not have the 'legal effect' oF afinaljudgment." M at 311. Therefore, 6 Defendant's attempt to obtain a final judgment on the PAGA claim here using the same, exact 7 reasoning of this Court's denial of class certification violates Munoz and ignores that such an abuse 8 oF discretion by this Court would invoke the death knell doctrine. 9 10 IIL CONCLUSION 11 For all the Foregoing reasons, Plaintiffs respectfully request that the Court permit the trial 12 in this matter to proceed, as outiined in Plaintiffs' Trial Plan. 13 14 15 Dated: April 17,2020 BLUMENTHAL NORDREHAUG BHOWMIK 16 DE BLOUW LLP 17 18 By: APARAJIT BHC BHOWMIK 19 VICTORIA B. RIVAPALACIO Attomeys For Plaintiff 20 ANDREA SPEARS 21 Dated: April 17- 2020 SETAREH LAW GROUP 22 23 24 " WILLIAM PAO 25 Attorneys For Plaintiff TOMAS R. ARANA 26 27 28 -8 PLAINTIFFS' REPLY ISO TRIAL PRESENTATION AND MANAGEMENT PLAN