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C.A. Affirms Denial of Disqualification of Century City Firm
Opinion Says No Conflict in Representing Both Supervisory, Non-Supervisory Employees in Wage Class Action Despite Tension With Supervisors Over Challenged Policies, Reporting of Attorney to State Bar
By Kimber Cooley, associate editor
Div. Three of the First District Court of Appeal has held yesterday that there is no conflict of interest for a law firm to concurrently represent both supervisory and non-supervisory class members in a wage-and-hour class action despite tension between some attorneys and supervisors.
That tension was spawned by intense deposition questioning of supervisors over the challenged practices and the reporting by a supervisor of one of the firm’s lawyers to the State Bar.
For disqualification, the court said, the “salient question” is whether the concurrently represented clients have directly adverse interests and not whether some have differing opinions about counsel’s legal strategies, theories, and competence. Surviving the disqualification motion was the Century City firm of Capstone Law APC.
The dispute arose after plaintiff Luis Mendoza filed a complaint in November 2018 under the Private Attorneys General Act of 2004, codified at Labor Code §2698 et seq., alleging that his former employer West Coast Quartz (“WCQ”) failed to comply with labor laws governing meal periods and breaks, among other claims.
In November 2022, Alameda Superior Court Judge Michael M. Markman granted Mendoza’s motion to certify a class of all nonexempt, hourly employees of the silicon parts manufacturer for the four years leading up to the filing of the complaint. Markman also certified six subclasses, including one relating to meal periods.
At issue for the meal-period subclass was a written policy requiring that employees take their first break within six hours of their start time, which was inconsistent with well-established law mandating meal breaks within the first five hours.
Markman rejected WCQ’s contention during the class certification hearings that there was a conflict in having the same lawyers represent the nonexempt supervisors as they “created and enforced break schedules,” finding that there was no evidence that they played any role in setting policy.
Motion to Disqualify
In April 2024, WCQ moved to disqualify Capstone, providing evidence that certain supervisory class members were opposed to the lawsuit and that Capstone attorney Daniel Jonathan had “viciously” cross-examined them. The supporting evidence included a handwritten letter by supervisory employee Virgilio Presa opining that “[t]he case is a lie” and expressing concerns about how the deposition had been handled.
WCQ further asserted that Jonathan had “exposed class member John Yasa’s questionable meal practices” during his deposition, causing Yasa to suffer “emotional trauma” and to file an ethics complaint with the state bar.
Markman denied the motion, saying that even if certain class members contradicted Mendoza’s allegations, “this conflict in evidence does not give rise to a disqualifying conflict between class members and class counsel,” as certification was based upon written policies and statistical evidence. The judge also ruled that WCG lacked standing and expressed concern that the motion was being “used to gain tactical advantage.”
Acting Presiding Justice Carin T. Fujisaki wrote the unpublished opinion, filed Tuesday, affirming the denial. Justice Victor Rodríguez and Justice Gordon B. Burns of Div. Five, sitting by assignment, joined in the opinion.
Duty of Loyalty
Fujisaki noted that “[t]he challenge here is to representation by counsel that is concurrent, as opposed to successive” and said that the primary duty implicated is one of loyalty. She further pointed out that courts must be skeptical of disqualification motions brought by opposing parties.
In the present case, she reasoned:
“That the class consists of nonexempt employees at different levels of authority does not, by itself, signal that Capstone’s loyalty is divided. In this regard, we observe federal courts have held that class counsel is not impermissibly conflicted due to the mere fact that ‘the class cuts across levels of authority in a company, with some class members supervising other class members.’….Like the federal courts, we decline to recognize a per se rule against including employees at different levels of an employment hierarchy in the same class.”
The jurist added:
“Even assuming WCQ elects to call individual supervisory class members to the stand at trial, an unseemly cross-examination of their job performance is not a foregone conclusion. Class counsel may instead establish, through the other evidence discussed above, that the wage and hour violations were primarily the result of the uniform policies created and handed down by WCQ management.”
Degree of Tension
Acknowledging that “the record reflects a degree of tension between class counsel and some supervisory class members, including instances in which the class members accused Capstone of fabricating the allegations of the lawsuit or expressed confusion about whether Capstone was representing them,” Fujisaki said these concerns do not go to a conflict at the heart of a disqualification motion.
She wrote:
“After all, if Mendoza prevails, the class members who have doubts about the litigation still stand to obtain the same relief as those who support it; conversely, the supervisory class members will obtain no direct benefit from the lawsuit’s defeat. But even if certain supervisory class members felt attacked or confused by Capstone’s questioning during their depositions, WCQ did not establish that the interests of the supervisory class members as a whole are directly adverse to those of the nonsupervisory class members such that Capstone cannot maintain undivided loyalty in seeking to recover against WCQ based on its company-wide policies and practices.”
Addressing the Yasa deposition, Fujisaki remarked that “the Yasa deposition transcript reflects that Jonathan asked Yasa if he knew why his time records showed untimely meal breaks, and Yasa responded by acknowledging certain irregularities in his meal and rest break practices on the occasions he ‘forgot to clock out’ for his first break.” Under these circumstances, she said “[w]e cannot agree that counsel’s attempt to seek clarification regarding a class member’s timesheets” violated any ethical rules.
Fujisaki said that “[h]ere, the record does not reflect Capstone’s commission of any misconduct or dereliction for which the court must consider the likelihood of substantial continuing effects on future judicial proceedings.”
The case is Mendoza v. West Coast Quartz Corporation, A170409.
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