WILLIAMS v. S.C. (MARSHALLS OF CA)Amicus Curiae Brief of California Apartment AssociationCal.May 17, 2016SUPR CASE NO. 8227228 r e tME COURT COPY IN THE SUPREME COURT OF THE STATE OF CALIFORNIA MICHAEL WILLIAMS,anindividual., SUPREME COURT Petitioner, - i L. = D ‘ MAY 17 2016 SUPERIOR COURT OF CALIFORINA FOR THE COUNTY OF LOS ANGELES, Frank A. McGuire Clerk Respondent. 5 eputy Court of Appeal of the State of California 2” Civil No. B259967 Superior Court of the State of California County of Los Angeles The Honorable William F. Highberger, Judge Presiding Civil Case No. BC503806 REQUEST TO FILE BRIEF OF AMICUS CURIAE IN SUPPORT OF RESPONDENTS’POSITION AND BRIEF OF AMICUS CURIAE BY CALIFORNIA APARTMENTASSOCIATION IN SUPPORT OF REAL PARTYIN INTEREST MARSHALLSOF CA, LLC PAHL & McCAY Stephen D. Pahl (State Bar No. 95900) Karen Kubala McCay (State Bar No. 187664) Julie Bonnel-Rogers (State Bar No. 176200) 225 West Santa Clara Street, Suite 1500 San Jose, California 95113 Telephone: (408) 286-5100/Fax: (408) 286-5722 Email: kmmcay@pahl-mccay.com Counselfor Amicus Curiae CALIFORNIA APARTMENT ASSOCIATION CASE NO. 8227228 IN THE SUPREME COURT OF THE STATE OF CALIFORNIA MICHAEL WILLIAMS,an individual., Petitioner, Vv. SUPERIOR COURT OF CALIFORINA FOR THE COUNTY OF LOS ANGELES, Respondent. Court of Appeal of the State of California 2" Civil No. B259967 Superior Court of the State of California County of Los Angeles The Honorable William F. Highberger, Judge Presiding Civil Case No. BC503806 REQUESTTO FILE BRIEF OF AMICUS CURIAE IN SUPPORT OF RESPONDENTS’ POSITION AND BRIEF OF AMICUS CURIAE BY CALIFORNIA APARTMENTASSOCIATION IN SUPPORT OF REAL PARTYIN INTEREST MARSHALLSOF CA,LLC PAHL & McCAY Stephen D. Pahl (State Bar No. 95900) Karen Kubala McCay(State Bar No. 187664) Julie Bonnel-Rogers (State Bar No. 176200) 225 West Santa Clara Street, Suite 1500 San Jose, California 95113 Telephone: (408) 286-5100/Fax: (408) 286-5722 Email: kmmcay@pahl-mccay.com Counselfor Amicus Curiae CALIFORNIA APARTMENT ASSOCIATION CASE NO.8227228 IN THE SUPREME COURT OF THE STATE OF CALIFORNIA MICHAEL WILLIAMS,anindividual., Petitioner, Vv. SUPERIOR COURT OF CALIFORINA FOR THE COUNTY OF LOS ANGELES, Respondent. Court of Appeal of the State of California 2™ Civil No. B259967 Superior Court ofthe State of California County of Los Angeles The Honorable William F. Highberger, Judge Presiding Civil Case No. BC503806 REQUEST TO FILE BRIEF OF AMICUS CURIAE IN SUPPORT OF RESPONDENTS’ POSITION PAHL & McCAY Stephen D. Pahl (State Bar No. 95900) Karen Kubala McCay(State Bar No. 187664) Julie Bonnel-Rogers (State Bar No. 176200) 225 West Santa Clara Street, Suite 1500 San Jose, California 95113 Telephone: (408) 286-5100/Fax: (408) 286-5722 Email: kmccay@pahl-mccay.com Counselfor Amicus Curiae CALIFORNIA APARTMENT ASSOCIATION Pursuant to Rule 8.520(f) of the California Rules of Court, amicus curiae California Apartment Association (“CAA”), hereby respectfully requests leaveto file the attached brief ofAmicus Curiae in support of Real Party in Interest Marshalls of Ca., LLC (‘‘Marshalls”) as to the issues presented on appeal madeby Petitioner Michael Williams (“Mr. Williams’’) to this Supreme Court. CAA is the largest rental housing trade association in the country, representing more thanfifty thousand (50,000) property owners and housing operators whoare responsible for nearly two million (2,000,000) rental housing units throughout California. CAA provides its membership with support, information and educational resources relevantto all aspects of California’s rental housing industry. CAA members are business people, employers and landlords whoare subject to strict business, employment and housing legal standards in California. CAA members have been exposedto class action lawsuits and victimized by PAGlitigants as both a widescale employer of workers in the housing industry andas a landlord. CAA members have experienced firsthand the abuse of the California’s class action, PAG and discovery statutes as discussed herein. Counsel for CAA hasstudied the briefs filed on behalf of the parties andis familiar with the issues involved in this action. There are three reasons why CAA hasaninterest in this matter sufficient to justify its submission of an amicusbrief as follows: First, the issues presented in this case directly affect CAA andits members. Specifically, there is a case currently pending beforethis Supreme Court which involves one of CAA’s membersand boastsstriking similarities to the case at bar: Prometheus Real Estate Group, Inc. v. Superior Court ofthe State ofCalifornia, County ofSan Mateo (“the Prometheus Case”).’ It is foreseeable that this case may lay to rest the same issues pending in the Prometheus Case without affording membersofthe rental housing industry the opportunity to be heard. For this reason, CAA seeks to be heard. Second, as business operators, employers and landlords in California, members of CAA are subjectto strict legal duties. One of the most important legal duties CAA members mustexecuteis the duty to protect the privacy of its employees and tenants. CAA seeksto offer its representative perspective to assist this Supreme Court in understanding the numerousprivacy statutes drafted and codified by the California Legislature which apply to employers and landlords as well as many other business industries. CAA seeksto be heard onthis issue to provide this Supreme Court with a compelling basis on which the Court may balance ‘First District Court of Appeal, Division Four, Case No. A147293; San Mateo County Superior Court Case No. CIV 531264, The Honorable Judge Susan Irene Etezadi presiding. yesteryear’s liberally construed discovery statutes with competing and compelling modern-dayprivacy statutes. Third, CAA membersare victims of the California plaintiffs’ bar and advocacy groups, a savvy and opportunistic collection of representatives, whouse pawnlitigants cloaked in the label of the “private attorney general” to abuse California’s PAG andclass action statutes to the disadvantage of CAA members. CAA is seeking to be heard onthis issue as a pleato this Supreme Court’s for assistance in limiting abuses that accompany PAG and class action litigation so that plaintiff advocates who abuse California’s discovery statutes to improperly add monetary value to unsubstantiated claims (in employmentand housing casesalike) are not permitted to proceed throughlitigation unrestricted. Pursuant to Rule 8.520(f(4)(A)(i) of theCalifornia Rules of Court, the undersigned applicants representthat this brief was authored by those listed on this document on behalf of CAA. Noparty or counsel for a party to the pending appeal authored the applicant amicusbrief or financially contributed to its preparation or submission. For the foregoing reasons, CAA respectfully requests that the Court acceptthe attachedbrief for filing in this case. | DATED: May6, 2016 PAHL & MCCAY A Professional Corporation By: Hocus f floCaun/ Karen Kubala McCay Counsel for Amicus Curiae CALIFORNIA APARTMENT ASSOCIATION PROOF OF SERVICE I am a citizen of the United States and an employee of the County aforesaid. I am overthe age of eighteen years and not a party to the within action. My business address is 225 West Santa Clara Street, Suite 1500, San Jose, California 95113-1752. On the date mentioned below, I caused a true copy(ies) of the following document(s) to be served ontheparties below using the method(s) checked: REQUEST TO FILE BRIEF OF AMICUS CURIAE IN SUPPORT OF RESPONDENTS’ POSITION On the Addressee(s) below namedin said action by: O First Class Mail. I am familiar with the regular mail collection and processing practices of the business. The mail will be deposited with the United States Postal Service on the same day following ordinary business practices. I enclosed the above-mentioned document(s) in a sealed envelope with postage thereon fully prepaid in the United States Post Office mail box at San Jose, California. O Facsimile at the fax numbers shownafter each namebelow. CO By Personal Delivery. [x] By Federal Express. O ByElectronic Mail. Addressee(s): Glen A. Danas Attorneys for Plaintiff and Ryan Wu Appellant Michael Williams Robert Drexler Liana Carter Capston Law APC 1840 Century Park East, Suite 450 Los Angeles, CA 90067 Robert Gorden Hulteng Attorneys for Real Party In Joshua Joseph Cliffe Interest Marshalls of CA, LLC Emily Erin O’Connor Scott D. Helsinger Littler Mendelson, PC 650 California Street, 20° Floor San Francisco, CA 94108 Clerk Court of Appeal Second Appellate District Division Seven Ronald Reagan State Building 300 S. Spring Street 2"! Floor, Ninth Tower Los Angeles, CA 90013 Clerk Los Angeles Superior Court 111 North Hill Street Los Angeles, CA 90012 Hon. William F. Highberger Los Angeles Superior Court Central Civil West Courthouse 600 South Commonwealth Ave. Los Angeles, CA 90005 Court of Appeal Case No. B259967 Superior Court of Los Angeles County Respondent Civil Case No.: BC503806 Superior Court of Los Angeles County Respondent Civil Case No.: BC503806 I declare under penalty of perjury, under the lawsofthe State of California, that the foregoing is true and correct. Executed on May6, 2016, at San Jose, California. ~ Michelle Garcia/ CASE NO. 8227228 IN THE SUPREME COURT OF THE STATE OF CALIFORNIA MICHAEL WILLIAMS,anindividual., Petitioner, V. SUPERIOR COURT OF CALIFORINA FOR THE COUNTY OF LOS ANGELES, Respondent. Court of Appeal of the State of California 2"° Civil No. B259967 Superior Court of the State of California County of Los Angeles The Honorable William F. Highberger, Judge Presiding Civil Case No. BC503806 BRIEF OFAMICUS CURIAE BY CALIFORNIA APARTMENT ASSOCIATION . IN SUPPORT OF REAL PARTY IN INTEREST MARSHALLS OF CA, LLC PAHL & McCAY. Stephen D. Pahl (State Bar No. 95900) Karen Kubala McCay(State Bar No. 187664) Julie Bonnel-Rogers (State Bar No. 176200) 225 West Santa Clara Street, Suite 1500 San Jose, California 95113 Telephone: (408) 286-5100/Fax: (408) 286-5722 Email: kmmcay@pahl-mccay.com Counselfor Amicus Curiae CALIFORNIA APARTMENT ASSOCIATION Table of Contents I. INTRODUCTION TO THE AMICUS10... ce cccccccssceeceereeseneaesensenesenseeeaseteneseeereneseeneneneenes 1 II. BRIEF STATEMENT OF RELEVANTFACTS.00.. ec cccccceseesseeteneneeeeeenenensenseeaeteneneneeaes 4 A. UNVERIFIED ALLEGATIONS BY A PRIVATE ATTORNEY GENERAL....... 4 B. INDISCRIMINATE INTERROGATORY DEMAND FOR PRIVATE NFORMATION...eccccscccccssscccssseeseceseeeeesseneceseeseesneesseassasesausesseessseeesssnesnaaenseesseesaneeey 4 C. THE TRIAL COURT’S “PHASED DISCOVERY” RULING........ccccecseeteseeeetees 5 D. THE APPELLATE COURT’S AFFIRMATION OF THE TRIAL COURT’S “PHASED DISCOVERY” RULING.........cccessssssscsssseseeneesenesseeeseeseesenseetenseseeaes 6 Ill. ISSUE ADDRESSED IN THIS AMICUS CURIAE BRIEF ..csccssssssssssssssssssssnssnnenssseee 7 TV. ARGUMENT. uuun.eeeesccscsscesssssscscssessscsesesssesesecscecescsesesssesssesssesessnenesasaescneessnaseeseesasseaeaeenseeeneges 7 A. THE PROMETHEUSCASE.......cccccsccesscessscssseeseanecsneneensenseresssasseeeseetaeeneeeseeennneneees 7 B. THE PUSH TO SACRIFICE CALIFORNIA’S RIGHT TO PRIVACY............00 9° 1. California’s Statutorily Protected Right To Privacy v. Discovery Abuse........... 12 2. Anyone Can Call Himself a “Private Attorney General” 0.0... .seseesesereseees 127 V. CONCLUSION ooeecesccccscsssssescssessscesescseseeneceserseseesenssseesecsesesesssesesesccsesesnasaeseseneeasseaenereenanenes 21 Table of Authorities Cases Blue Chip Stamps v. Manor Drug Stores, 421 U.S. 723, TAL(197S),ceeecceeeseeeeserteeeteneeees 22 California Rule of Court 8.520(f),..........:cccccsccceeeseseeeeeseeessrseeseseeeesevessaeseseeerssscesesseeeeseneeeeens \ Prometheus Real Estate Group, Inc. v. Superior Court ofthe State ofCalifornia, County OfSAN MeO.ececscsssescessevecsseeseesnesessensssessussussenseceeeeceseessseneessesseesesneasaneaseesaeneeseeeeseasneesaseaseas 3 | William v. Sup. Ct. (Marshalls ofCA, LLC), 236 Cal.App.4" 1151, L157.eee 6 Statutes Cal. Bus. & Prof. Code §17538.41 oo... .ccccceseessseesssnesesesessecsseneneaeseesseeeneresseeessenseeseeneeeeees 15 Cal. Bus. & Prof. Code § 17538.41(a)(1) occ eeseeesssssssssesseseesserseseeseaseneeseeeseseeessnessaesegs 16° Cal. Bus. & Prof. Code § 17590(a) 0...eeeessseeeeesees tsaseeeseeecsacecesseeeesensaeesees 15 Cal. Bus. & Prof. Code § 17590-17594 oceeecesessesseessesssseeseeeeeeesseseestreseeesseeessnsessnes 14 California Civil Code § 56.20(a).......cccesseeseesessseessesssssssescenecessseeeesessesseesteceresssseessnseestes 17 California Civil Code § 1798.82 ......ccccsesccscecseceeeeeesrsesesesssseuseeseseeesseesseesaseaeseeeceneensesssnenes 17 | California Civil Code §56.20-56.37 oo... ceecseessseesreceeeees sessssssaneseseseetestetiunneessttseneneseeeeeeee 17 California Code of Civil Procedure § 128.7 .........eescssccsseesesseeeeseeeeeseessessessaesceseeseeeseanes 19 California Code of Civil Procedure § 128.7(b)(1) and (3).......cceecccceeseeseeeeseeeeeteeeeneeeees 11 California Health & Safety Code sections 103527(a) and (D) ........cccescesesseeeeteesseeeeteenes 16 California Health and Safety Code sections 103525, 103525.5, 103526, 103526.5, 103527, and 103528........ccceesccssscssessesceeeseeesceeseeesneeseesssessasesesseaeessenesesseessesseepseeeseesseengs 16 California Public Utilities Code §2891.1 oo.eesececsseesessceseeseseeeecseeesseessseaeeessesersnees 15 Cal. Bus. & Prof. Code § 17200, ef S€q ...ccseescessseessessessscetsessseseeesseeneensenneseceennesseeseeesensens 9: Rules California Rule of Court 8.200(C), ......ccccssccccsesssenececescesseesssesessnecesssssrecsseceesseeeceseeesenseeeeeas 1° California Rule of Court 8.520(8)...... cc ceeeeeeeeeeeeeeeeeeeees Leseneeeeessesssnaeeceeceeaeeeeeesaeeeeeseeeaeeaaaas 1 Pursuant to California Rule of Court 8.520(f), and the leave sought in the Requestto File Brief of Amicus Curiae submitted concurrently herewith, the California Apartment Association ("CAA") respectfully submits this brief as Amicus Curiae in support of the positions of RespondentReal Party in Interest Marshalls of Ca., LLC (“Marshalls”) as to the issues presented on the appeal made on behalf of Petitioner Michael Williams (“Mr. Williams”) to this Supreme Court. I. INTRODUCTION TO THE AMICUS This case does not involve the plight of mistreated employees of Marshalls whoare unableto unite in a putative class action at the hands of an oppressive employer. This case involves discovery abuse,litigation tactics and an attack on California’s heralded right to privacy by those who havecraftily exploited California’s private attorney general (“PAG”) and class action statutes under the guise of ideology. The issues presented by this case are not limited to California’s labor and employmentbarorits retail industry. This case has broad implications for California’s rental housing industry and the landlord/tenantbar as well. CAA is the largest rental housing trade association in the country, representing morethanfifty thousand (50,000) property owners and housing operators whoare responsible for nearly two million (2,000,000) rental housing units throughout California. CAA provides its membership 1 with support, information and educational resources relevantto all aspects of California’s rental housing industry. CAA membersare business people, employers and landlords whoare subjectto strict business, employment and housing legal standards in California. CAA members have been exposedto class action lawsuits and victimized by PAGlitigants as both a wide scale employer of workers in the housing industry andasa landlord. CAA members haveexperiencedfirsthand the abuse of the California’s class action, PAGanddiscovery statutes as discussed herein. There are three major reasons why CAAopposes Mr. Williams’ arguments to this Supreme Court in favor of a decision granting him access to the private contact information of thousands of California workers employed by Marshalls sufficient to justify CAA’s submission of an amicus brief. First, the issues presented in this case directly affect CAA andits members. Specifically, there is a case currently pending beforethis Supreme Court which involves one of CAA’s membersandboastsstriking similarities to the case at bar: Prometheus Real Estate Group,Inc.v. Superior Courtofthe State ofCalifornia, County ofSan Mateo (“the Prometheus Case”). It is foreseeable that this case may lay to rest the same issues pending in the Prometheus Case without affording members of the ‘First District Court ofAppeal, Division Four, Case No. A147293; San Mateo County Superior Court Case No. CIV 531264, The Honorable Judge Susan Irene Etezadi presiding. rental housing industry the opportunity to be heard. For this reason, CAA seeks to be heard. Second, as business operators, employers and landlords in California, members of CAA are subjectto strict legal duties. One of the most important legal duties CAA members must execute is the duty to protect the privacyof its employees and tenants. CAA seeks to offer its representative perspective to assist this Supreme Court in understanding the numerousprivacystatutes drafted and codified by the California Legislature which apply to employersand landlords as well as many other business industries. CAA seeks to be heard on this issue to provide this Supreme Court with a compelling basis on which the Court may balance yesteryear’s liberally construed discovery statutes with competing and compelling modern-day privacystatutes. Third, CAA membersare victims of the California plaintiffs’ bar and advocacy groups, a savvy and opportunistic collection of representatives, whouse pawnlitigants cloaked in the label of the “private attorney general” to abuse California’s PAG andclass action statutes to the disadvantage of CAA members. CAA is seeking to be heard onthis issue as a pleato this Supreme Court’s for assistance in limiting abuses that accompany PAG and class actionlitigation so that plaintiff advocates who abuse California’s discovery statutes to improperly add monetary value to unsubstantiated claims (in employment and housingcases alike) are not permitted to proceed throughlitigation unrestricted. I. BRIEF STATEMENT OF RELEVANT FACTS CAA includesthe following summaryofrelevant facts in order to highlight facts relevant to the purposes of this AmicusBrief. A. UNVERIFIED ALLEGATIONSBY A PRIVATE ATTORNEY GENERAL From 2012 to 2013, Mr. Williams was a non-exempt hourly-paid employee at Marshalls. In 2013, counsel for Mr. Williamsfiled an unverified complaint in the subject action under the California Labor Code Private Attorney General Act against Marshalls alleging Labor Code violations. In doing so, counsel for Mr. Williams claims that Marshalls (a) failed to properly provide mealandrest periods to Mr. Williams “and other aggrieved employees,” (b) failed to provide accurate wage statements “and other aggrieved employees,”(c) failed to reimburse Mr. Williams “and other aggrieved employees,” and (d) failed to pay all earned wagesto Mr. Williams “and other aggrieved employees.” B. INDISCRIMINATE INTERROGATORY DEMAND FOR PRIVATE INFORMATION In an attemptto grow the representative action, counsel for Mr. Williams sought protected private contact information of approximately 16,000 non-party employees who worked for Marshalls in California since 2012 by way ofthe following special interrogatory: Set forth the first, middle and last name,employee identification number, each position held, the dates each position washeld, the dates of employment, the last known address, and all known telephone numbers of each and every person whois or was employed by Defendant Marshalls of CA, LLC in California as a non-exempt employee at any time since March22, 2012.7 Marshalls dutifully objected to the special interrogatory contending the interrogatory was overbroad and wasa violation of legitimate privacy interests of non-party employees. Marshalls also maintained that the information sought required a showing that the Marshalls’ employees were, in fact, “other aggrievedparties” within the meaning ofPAGA. The parties met and conferred to no avail. Counsel for Mr. Williams filed a Motion to Compel. C. THE TRIAL COURT?’S “PHASED DISCOVERY” RULING TheTrial Court held that Marshalls was not required to produce the requested contact information for all employeesat its 129 California stores. Instead, the Trial Court order a “phased discovery” solutionto the parties’ dispute whereby Mr. Williams could initially obtain someofthe requested contact information (Marshalls was ordered to produce the requested The Court of Appeals later described this special interrogatoryas aneffort by counsel for Mr. Williams to “wagelitigation rather than facilitate it.” [App. Op.Brf. at p. 12 citing William v. Sup. Ct. (Marshalls ofCA, LLC), 236 Cal.App.4" 1151, 1157.] contact information for employees at Marshalls’ Costa Mesastore only) while Mr. Williams substantiated the allegations in his complaint in order to justify a court order to compel further private contact information for additional Marshalls’ employees beyond the Costa Mesastore. The idea behind the Trial Court’s reasonable “phased discovery”ruling was to release the private information incrementally as Mr. Williams wasable to proveits direct correlation with the allegations set forth in the unverified complaint throughout discovery. Mr. Williams appealed the Trial Court’s ruling. D. THE APPELLATE COURT’S AFFIRMATION OF THE TRIAL COURT’S “PHASED DISCOVERY” RULING Thereafter, the Court ofAppeal affirmed the Trial Court’s “Phased discovery”ruling. The Court of Appeal reiterated its concerns about compelling Marshalls to provide private information for 16,000 ofits non- party employees upon nothing morethanthefiling of a unverified PAG complaint. The Court of Appeal indicated that Mr. Williams needed to substantiate his allegations that there were “other aggrievedparties” by way of a deposition prior to the issuance of an order to compel Marshalls to submit the private information demandedforall 16,000 non-party employeesthroughout California. Thereafter, Mr. Williams failed to proceed with his deposition. III. ISSUE ADDRESSED IN THIS AMICUS CURIAE BRIEF Should this Supreme Court issue a decision instructing all California Trial Courts faced with PAG/class action discovery demandsforthe release of private information about non-parties to fashion prudently incremental “phased discovery” plans which only compelthe production of private information protected under California’s Constitution and privacystatutes upon the substantiation of material allegations supporting the same? IV. ARGUMENT A. THE PROMETHEUS CASE Prometheus Real Estate Group, Inc. v. Superior Court ofthe State of California, County ofSan Mateo is a class action involving a discovery dispute between Prometheus Real Estate Group, Inc. and its former employee Marie Commick who was terminated for embezzlement and fraud. In November 2014, a California class action lawsuit wasfiled against Prometheusalleging Labor Code violations with Ms. Commick acting as class representative.” 3Plaintiff Marie Commick’s class action claims include (1) unpaid overtime, (2) unpaid meal period premiums, (3) unpaid rest break premiums, (4) unpaid minimum wages,(5) untimely final wage payments, (6) untimely payment of wages, (7) non-compliant wage statements, (8) failure to keep payrolls records, (9) unreimbursed business expenses, and 7 During discovery, Prometheus was served with a special interrogatory seeking the names, home addresses, business addresses, personal email addresses, business email addresses and fax numbers of undiscovered prospective class members employed by Prometheussince November2010. Prometheus objected to the interrogatory contending the information sought was protected private information. Prometheus also stated the request was unduly burdensomeand overbroad,especially in light of the fact that the class had not beencertified. Prometheus was served with a Motion to Compel. Prometheus deposed Ms. Commick and confirmed many ofthe claims alleged in the complaint on which the class action was premised were unsubstantiated. The Trial Court granted the Motion to Compel and issued an order instructing Prometheusto provideall the private contact information requested subject to an opt out notice despite concrete indicationsthat the allegationsset forth in the complaint were unsubstantiated. Disappointed by the outcomeofthe Trial Court’s decision and alarmedby the associated costs and the potential far-reaching effects of the Trial Court’s ruling, Prometheus petitioned the Fourth Division Court of Appeal for a Writ of Mandate. The Court of Appeal ultimately denied the Writ of Mandate. Prometheus then filed a Petition for Review to this Supreme Court which wasgranted and stayed pending the outcomeofthe subjectcase. (10)violation of California’s Business & Professions Code sections 17200, et seq. Given the similarity of facts and issues presented in the Prometheus Case and the subject case, CAA demonstratesthat the issues before this Supreme Court are directly relevant to CAA members. Further, CAA maintains that the issues before this Supreme Court will foreseeably expand and extend to the broader rental housing industry where landlords are exposed to California Department of Fair Employment and Housing (DFEH) complaints, United States Department of Housing and Urban Development (HUD) complaints, private party actions, tenant association/organizationactions, class actions and representative PAG actions on a regular basis and at a great expense. For these reasons, and othersset forth infra, CAA requests that this Supreme Court instruct the PrometheusTrial Court, and a// California Trial Courts, faced with PAG/class action discovery demandsfor the release of private information about non-parties to fashion prudently incremental “phased discovery” plans which only compelthe production ofprivate information protected under California’s Constitution and privacy statutes upon the substantiation of material allegations supporting the same. B. THE PUSH TO SACRIFICE CALIFORNIA’S RIGHT TO PRIVACY Mr. Williams contends he is unconditionally entitled to the private contact information (names, employeeidentification, work history, home addresses and telephone numbers) of approximately 16,000 Marshalls employees statewide simply by virtue ofthe fact that he filed an unverified complaint with self-authenticating good faith allegations* contending that Marshalls instituted statewide practices amounting to Labor Code violations. Mr. Williams contends that as a PAG andthe representative litigant in the putative class action, he should be afforded greater discovery accommodation than otherlitigants because he is acting in “proxy” for the State in enforcing its Labor Codein the interest of the public. These contentions are dangerous to Californians and grant the California plaintiffs’ bar an unwarranted powerripe for abuse and exploitation. “The allegations set forth in a complaint are subject to the pleading good faith requirements ofCalifornia Code of Civil Procedure section 128.7(b)(1) and (3) as follows: (b) By presenting to the court, whether by signing, filing, submitting, or later advocating, a pleading, petition, written notice of motion, or other similar paper, an attorney or unrepresented party is certifying that to the best oftheperson's knowledge, information, andbelief,formed after an inquiry reasonable underthe circumstances, all of the following conditions are met: (1) It is not being presented primarily for an improper purpose, such as to harass or to cause unnecessary delay or needless increasein the costoflitigation.***** (3) The allegations and otherfactual contentions have evidentiary support or, ifspecifically so identified, are likely to have evidentiary support after a reasonable opportunityfor further investigation or discovery. 10 In reality, there is no indication that Mr. Williams knows anything about Marshalls’ statewide Labor Code practices and policies.* In reality, counsel for Mr. Williams (Capstone Law APC)’filed an unverified complaint making unsubstantiated allegations regarding their hope/conjecture/speculation that Marshalls engaged in statewide Labor Codeviolations in an effort to frugally obtain contact information for 16,000 Marshalls employees in order to grow class action for counsel’s ownfinancial benefit. In reality, there is no real “public interest” being exchanged for the requested forfeiture of the right to privacyat issue; there is only greed. In reality, discovery costs have rankedas the toplitigation concern for major corporate defendants for over ten years and frequently results in nuisance-value settlement of cases lacking genuine merit: That the uncheckedrise in discovery costs has attracted the attention of corporations, which nowlist discovery as their most pressing concern whenlitigation is imminent. [Fulbright and Jaworski LLP, Litigation Trends Survey >To date, Mr. Williamshas failed to verify or substantiate any of the allegations set forth in his complaint. Mr. Williams failed to appearfor his deposition as suggested by the Trial Court and has not even provided a declaration. [Marshall’s Ans. Brief, pp. 7-8] °Capstone Law isa profitable plaintiffs’ class action labor and employment law firm that touts on its website that it has “negotiated millions of dollars in settlements.” The Capstone Law website also submits thatit files class action lawsuits extending to a variety of industries: “Capstonelitigates cases on behalfofemployees across a broad range ofindustries, including retail, food services, medical, insurance, banking and securities, among others.” This is further indication of the far-reaching effects of the subject case. 11 Findings 2 (2006).] This concern is well founded. Discovery costs in U.S. commerciallitigation are growing at an exponential rate; estimates indicate they reached $700 million in 2004, $1.8 billion in 2006 and $2.9 billion in 2007. [Faced with Data Explosion, Firms Tap Temp Attorneys, Fulton Co. Daily Report, October 17, 2005.] Ofcourse, these figures do not accountfor the billions ofdollars that corporations pay each yearto settle frivolous lawsuits owing to discovery abuse. ' It is with theserealities in mind, that CAA urges this Supreme Court to reject Mr. Williams’ contentions because reliance on the same will likely have a far reaching effect on many California industries including, but not limited to, the housing industry. 1. California’s Statutorily8 Protected Right To Privacyv. Discovery Abuse There can be no doubt that California championsthe right to privacy. The California State Constitution, Article 1, Section 1, grants Californians an "inalienable right" to pursue and obtain privacy. This Constitutional right has never been more important than in the current age 7John H. Beisner, on behalf of the U.S. ChamberInstitute for Legal Reform, The Center Cannot Hold—The Needfor Effective Reform ofthe U.S. Civil Discovery Process, May 13, 2010, pp. 21-22 [available at www.uscourts.gov/file/document/centre-cannot-hold-need-effective- reform-us-civil-discovery-process| ®CAA acknowledgesand defers to the thorough California case law briefing pertaining to Hill v. National Collegiate Athletic Assoc., 7 Cal. 4th 1 (1994) and Pioneer Electronics (USA), Inc. v. Superior Ct., 40 Cal. 4th 360 (2007) and their progeny submitted by the parties to the pending action. CAA seeks to supplementthe case law analysis with reference to statutory law as it demonstrates the California Legislature’s manifestation of the need for protection to the right to privacy--even in the face ofliberally construed discovery statutes. 12 of the computerization of every facet of society. The California Legislature, through its statutes, has clearly manifested its ongoing intent to protect Californians’ right to privacy. Pursuant to California Business and Professions Code sections 17590-17594, Californians can put their residential and cellular telephone numbers on a national do-not-call list to avoid unwanted intrusion into their homesand personallives. California Business and Professions Code sections 17590(a)states: There is a compelling state interest to protect the privacy of residential or wireless telephone subscribers who wish to avoid unsolicited and unwanted telephonesolicitations. California Public Utilities Code section 2891.1 requires a subscriber's express permission before a cell phone service provider canlist the subscriber's numberin a directory to prevent unwanted telephone intrusion into their homes andpersonallives. California Public Utilities Code section 2891.1(a) states in relevantpart: Notwithstanding Section 2891, a telephone corporation selling or licensing lists of residential subscribers shall not include the telephone number ofany subscriber assigned an unlisted or unpublished access number. California Business and Professions Code section 17538.41 prohibits the sending of unsolicited text messages to cell phonesor pagers to prevent 13 unwanted solicitation for goods, services and political causes. California Business and Professions Code sections 17538.41(a)(1) states: (a)(1) Except as provided in subdivision (b), (c), (d) , or (€), no person,entity conducting business, candidate,or political committee in this state shall transmit, or cause to be transmitted, a text message advertisement to a mobile telephone services handset, pager, or two-way messaging device that is equipped with short message capability or any similar capability allowing the transmission of text messages. A text message advertisementis a message, the principal purpose of which is to promote the sale of goodsor services, or to promote a political purpose or objective, to the recipient, and consisting of advertising material for the lease, sale, rental, gift offer, or other disposition ofanyrealty, goods, services, or extension of credit, or advertising material for political purposes. In addition, California Health and Safety Code sections 103525, 103525.5, 103526, 103526.5, 103527, and 103528 charge tariff to generate funds for the protection of private information and impose a duty to protect Californians’ private information listed on birth and death certificates to prevent fraudulent misuse of private information. Further, California Health and Safety Code sections 103527(a) and (b) provide for the appointmentof a State Committee assigned with the task to protect individual privacy: (a) The State Registrar shall appoint a Vital Records Protection Advisory Committee to study.and make recommendationsto protect individual privacy, inhibit identity theft, and prevent fraud involving birth, death, and marriage certificates while providing needed accessto birth, 14 death, and marriage record information to those seekingit for legitimate purposes. The committee shall have the following duties: (1) Review and make recommendationsas to the adequacy of procedures to safeguard individual privacy and prevent fraud, while ensuring appropriate access to birth, death, and marriage records. California Civil Code sections 56.20-56.37 impose a duty to ensure confidentiality and to protect Californians’ private informationin the medical industry. California Civil Code section 56.20(a) states: Each employer whoreceives medical information shall establish appropriate procedures to ensure the confidentiality and protection from unauthorized use and disclosure ofthat information. These procedures may include, but are not limited to, instruction regarding confidentiality of employees and agents handling files containing medical information, and security systemsrestricting accessto files containing medical information. California Civil Code sections 1798.82 imposes a duty on California businesses to protect Californians’ computerized personal information and to promptly report any security breach: Anypersonor business that conducts business in California, and that ownsor licenses computerized data that includes personal information, shall disclose any breach of the security of the system following discovery or notification of the breach in the security ofthe data to any resident of California whose unencrypted personal information was,or is reasonably believed to have been, acquired by an unauthorized person. The disclosure shall be madein the most expedient time possible and without unreasonable delay, consistent with the legitimate needs of law enforcement, as provided in subdivision (c), or any measures necessary to determine the scopeofthe breach andrestore the reasonable integrity of the data system. 15 Each ofthese statutes confirm the California Legislature’s ongoing and concerted intent to safeguard the right to privacy. There can be no doubtthat the California Legislature seeks to protect information and records which contain private contact information including an individual’s name, address, telephone number and email by the enactment of the above referencedstatutes. Counsel for Mr. Williams cannot legitimately argue that the California Legislature intendedto sacrifice California’s statutory privacy rights and obligations in favor of liberally construed discovery statutes to entitle PAG litigants to expand their putative class actions for financial gain. A PAG’s desire to obtain the private contact information in order to expand an unsubstantiated putative class action is not a compelling State interest warranting a forfeiture of California’s touted privacy rights. Given California’s numerousandproliferating privacy statutes, this Supreme Court has ample reason to temper sweepinglitigation demandsfor private information based on unsubstantiated allegations pled underthe toothless requirement of California Code of Civil Procedure section 128.7. The solution to balancing California’s right to privacy with the ever- present potential for discovery abuse is the very “phased discovery”plan proposed bythe Trial Court and affirmed by the Court of Appeals in the subject case. For these reasons, CAA requests that this Supreme Court 16 instruct all California Trial Courts faced with PAG/class action discovery demandsfor the release of private information about non-parties to fashion incremental “phased discovery” plans, which only compel the production of private information protected under California’s Constitution and privacy statutes upon the substantiation of material allegations supporting the same. 2. Anyone Can Call Himself a “Private Attorney General” PAG Mr. Williams would have this Supreme Court believe he is a champion of oppressed Marshalls employees throughout California. Mr. Williamsis the self-proclaimed “state’s proxy”in the enforcement of California’s Labor Code against Marshalls and, as such, Mr. Williams contendsheis entitled to special consideration in the acquisition of voluminous and private information during the discovery processat the great time and expense of Marshalls. Mr. Williams’ PAG arguments are transparent, disingenuousandbelied by the context in which PAGstatutes emergedin the law. The legal concept of a PAG wasfirst recognized in 1943 when Judge Jerome Frank concluded that Congress could authorize a private citizen to file a suit even if the sole purpose wereto vindicate a public ° William B. Rubenstein, On What A “Private Attorney General” Is—And Why It Matters, Vanderbilt Law Review, 2004, Vol. 57:6:2129 at p. 2130; referencing Geoffrey C. Hazard, Jr., Modeling Class Counsel, 81 NEB. L. REV 1397, 1399. 17 interest.'” The historical evolution of the concept of private lawyers supplementing the enforcement ofpublic laws thereafter is probative to Mr. Williams’ arguments. The theory of the “private attorney general” was barely addressed during the 1940s and 1950s, but it began to take root in the 1960s.'! By the 1970s, the concept ofPAG exploded becauseit became a sanctioned method for attorneys to collect fees: The phrase [Private Attorney General] explodes in the 1970s not because of the public law litigation but becauseit takes root in new attorney’s fees statutes and doctrines. Once loosed as a matter ofmoney, the private attorney general concept’s diffusion waslimited only by the imagination of the lawyers seeking attorneys’ fees. @ Frequently, the real motive behind PAG litigation is money and the real parties behind PAGrepresentativelitigants are plaintiffs lawyers seeking to grow their action to increase their prospects of financial recovery in the nameof“protecting the public interest.”!? Scholars have long acknowledgedthis brutalreality: Assoc. Indus. OfNew Yorkv. Ickes, 134 F.2d 694, 704 (2d Cir. 1943). “William B. Rubenstein, On What A “Private Attorney General” Is—And Why It Matters, Vanderbilt Law Review, 2004, Vol. 57:6:2129 at p. 2135. “Id. at p. 2050-2151. *In Blue Chip Stamps v. Manor Drug Stores, 421 U.S. 723, 741(1975), the majority opinion written by Justice Rehnquist indicts federal representative litigants in class actions for abuses to the discovery process as follows: The potential for possible abuse ofthe liberal discovery provisions of the Federal Rules of Civil Procedure may likewiseexist in 18 [Pllaintiffs’ attorneysare risk-averse entrepreneurs, . attempting to maintain diversified portfolios ofcase investments. For such business people, cases that government attorneys have already deemedrelatively meritorious are attractive investments. It is likely the government has undertaken significant investigation before pursuingits action. The private attorney can free — ride on these efforts, reaping the benefits of the government’s factual investigation and reducing her own investment in expensive fact discovery. Betterstill, non-mutual offensive issue preclusion provides a cheap and simple wayto take advantage of any issues litigated and determined against the defendant. Such coattail class actions present a vision ofthe supplemental attorney general that is a strong public/weak private vision. The only supplemental function performed bythis private attorney generalis that ofmultiplying wrongdoers penalties: she provides no independent search skills, no special litigation savvy, and no nonpoliticized incentives. She simply piles on and runs up the tab." [securities fraud] type of case to a greater extent than they do in otherlitigation. ***** To the extent that this process eventually produces relevant evidence whichis useful in determining the merits of the claims asserted by the parties, it bears the imprimatur of those Rules and of the many cases liberally interpreting them. But to the extent that it permits a plaintiffwith a largely groundless claim to simply take up the time ofa number ofother people, with the right to do so representing an in terrorem increment ofthe settlement value, rather than a reasonably founded hope that the process will reveal relevant evidence,it is a social cost rather than _a benefit. Yet to broadly expandthe class ofplaintiffs who may sue under Rule 10b-5 [securities fraud] would appear to encouragethe least appealing aspect ofthe use ofthe discovery rules. “William B. Rubenstein, On What A “Private Attorney General” Is—And Why It Matters, Vanderbilt Law Review, 2004, Vol. 57:6:2129 at p. 2050- 51; referencing John C. Coffee, Jr., Rescuing The Private Attorney General: Why Model ofthe Lawyer as Bounty Hunter is Not Working, 42 MD.L. REV 215, 223-24 (1983); see also John C. Coffee, Jr., . Understanding the Plaintiff's Attorney. The Implications ofEconomic Theoryfor Private Enforcement ofLaw Through Class and Derivative Actions, 86 Columbia Law Rev. 669, 704-12. 19 Indeed, some economists opine that the financial incentive that accompanies PAGlitigation is so enticing, the net result amounts to “overenforcement and excess deterrence.” There are no special requirements to qualify as a PAG. Mr. Williams openly admits the ease with whicha litigant can qualify as a PAGasfollows: There are only three requirements for bringing representative PAGAclaims:(1) the PAGAplaintiffwas ‘employed by the alleged violator;’ (2) the PAGAplaintiff complained with section 2699.3(a)’s notice and administrative exhaustion requirements and pled his or her compliance therewith; and (3) ‘one or moreofthe alleged violations was committed’ against the PAGAplaintiff. [Footnote omitted] Aside from the administrative exhaustion requirement, pleading sufficient facts alone will suffice to establish PAGAstanding.'° While the undertakings of genuine PAGlitigation has an admitted societal value, genuine PAGlitigants are few and far between.’ Further, the genuineness and merits of each PAG claim vary from case to case.'® ‘John C. Coffee, Jr., Rescuing The Private Attorney General: Why Model ofthe Lawyer as Bounty Hunter is Not Working, 42 MD. L. REV 215, 220 citing Landes & Posner, The Private Enforcement ofLaw, 4 J. Legal Stud. 1 (1975). “App. Op.Br. at p. 32-33. “John C.Coffee, Jr., Rescuing The Private Attorney General: Why Model ofthe Lawyer as Bounty Hunter is Not Working, 42 MD. L. REV 215, 223. *® William B. Rubenstein, On What A “Private Attorney General” Is—And Why It Matters, Vanderbilt Law Review,2004, Vol. 57:6:2129 at 2156 wherein Professor of Law William B. Rubenstein presents a rubric in order to classify the several types of PAG that appear.in litigation. 20 Because of the acknowledged manipulation of the PAG concept, there should be no special consideration afforded to self-proclaimed PAGs during the discovery processoflitigation. WhatPetitioner is seeking from this Supreme Court will permit pawnlitigants who are cloaked by savvyattorneys with the label of the “private attorney general” to abuse California’s PAGstatutes. History tells this Supreme Court that the vast majority ofPAG andclassaction litigants are not ideological legal martyrs fighting for societal just causes, but rather, businesspeople seekingto capitalize on legal investments. CAA seeksto protect a trial court’s discretion to limit abuses that accompany PAG litigation so that plaintiffs’ attorneys and advocacy groups who abuse California’s discovery statutes to improperly add monetary value to claims (in housing and employment cases alike) are not permitted to proceed into litigation without reasonable limitations. V. CONCLUSION Forthe reasonsset forth herein, CAA requests that this Supreme Court instruct all California Trial Courts, faced with PAG/class action discovery demandsfor the release of private information about non-parties to fashion prudently incremental “phased discovery” plans which only compel the production ofprivate information protected under California’s Constitution a 21 and privacy statutes upon the substantiation of material allegations supporting the same. Respectfully submitted, DATED:May6, 2016 PAHL & MCCAY A Professional Corporation py:Yendllkay 22 Karen Kubala McCay / Counsel for Amicus Curiae CALIFORNIA APARTMENT ASSOCIATION CERTIFICATE OF WORD COUNT Asrequired by Supreme Court Rule 33.1(h), I certify that the BriefofThe California Apartment Association as Amicus Curiae in Support ofReal Party in Interest Marshalls ofCA, lic, in its entirety, contains 5,205 words, below the limit provided by Supreme Court Rule 33.1(g). I declare under penalty of perjury that the foregoing is true and correct. Respectfully submitted, DATED:May6, 2016 PAHL & MCCAY A Professional Corporation By: tovCMea Karen Kubala McCay Counsel for Amicus Curiae CALIFORNIA APARTMENT ASSOCIATION 23 PROOF OF SERVICE Iam a citizen of the United States and an employee of the County aforesaid. I am over the age of eighteen years and not a party to the within action. My business address is 225 West Santa Clara Street, Suite 1500, San Jose, California 95113-1752. On the date mentioned below, I caused a true copy(ies) of the following document(s) to be served on the parties below using the method(s) checked: BRIEF OF AMICUS CURIAE BY CALIFORNIA APARTMENT ASSOCIATION IN SUPPORT OF REAL PARTYIN INTEREST MARSHALLSOF CA, LLC On the Addressee(s) below namedin said action by: C] First Class Mail. I am familiar with the regular mail collection and processing practices of the business. The mail will be deposited with the United States Postal Service on the same day following ordinary businesspractices. I enclosed the above-mentioned document(s) in a sealed envelope with postage thereon fully prepaid in the United States Post Office mail box at San Jose, California. 1 Facsimile at the fax numbers shownafter each namebelow. C1 By Personal Delivery. [x] By Federal Express. O ByElectronic Mail. Addressee(s): Glen A. Danas Attorneys for Plaintiff and Ryan Wu Appellant Michael Williams Robert Drexler Liana Carter Capston Law APC 1840 Century Park East, Suite 450 Los Angeles, CA 90067 Robert Gorden Hulteng Attorneys for Real Party In Joshua Joseph Cliffe Interest Marshalls of CA, LLC Emily Erin O’Connor Scott D. Helsinger Littler Mendelson, PC 650 California Street, 20" Floor San Francisco, CA 94108 24 Clerk Court of Appeal Case No. Court ofAppeal B259967 Second Appellate District Division Seven Ronald Reagan State Building 300 S. Spring Street 2"! Floor, Ninth Tower Los Angeles, CA 90013 Clerk Superior Court of Los Angeles Los Angeles Superior Court County 111 North Hill Street Respondent Los Angeles, CA 90012 Civil Case No.: BC503806 Hon. William F. Highberger Superior Court of Los Angeles Los Angeles Superior Court County Central Civil West Courthouse Respondent 600 South Commonwealth Ave. Civil Case No.: BC503806 Los Angeles, CA 90005 I declare under penalty of perjury, under the laws of the State of California, that the foregoing is true and correct. Executed on May6, 2016, at San Jose, California. 25
