"What is a headless class action?" CBL hears you ask. The usual scenario is this: Plaintiff, or plaintiffs, file a class action. It then turns out the plaintiffs have no standing to
sue because they aren't class members, either because they never had causes of action against the defendant or, because, as a result of changed circumstances or law, they no longer do. In such headless class action cases, the question presented is whether the plaintiffs can conduct discovery from the defendant to try to find better class representatives. There was quite a bit of appellate activity on this issue several years ago, which CBL blogged about here, here and here, among other places. But in general, the answer to the question often was "yes."
Well, here's a case where the answer isn't just "no." The answer is "hell no!" We're talking Starbucks Corporation v. Superior Court (Lords) (April 25, 2011) ___Cal.App.4th___ (Fourth Dist., G043650).
Facts: back in the day when Jerry Brown was the youngest governor in the history of the Golden State, and long before he became the oldest, California passed a law that required the "destruction" by "permanent obliteration" of all records of minor marijuana convictions that were more than two years old, and made it illegal for employers to ask about such convictions on their job applications. Violation brought either actual damages or statutory penalties of $200 per applicant. The statutes can be found at Health & Safety Code sections 11361.5, subd. (a), 11361.7 and Labor Code section 432.7, subd. (a).
Starbucks allegedly had a "have you ever been convicted" question on its job application that didn't exclude old, minor marijuana convictions. So three applicants -- who had nary a conviction among them -- had the bright idea of suing Starbucks on behalf of 135,000 job applicants, seeking some $26 million in penalties. In a previous published decision, Starbucks Corporation v. Superior Court (2008) 168 Cal.App.4th 1436 (Starbucks I), the Court of Appeal reached the rather sensible conclusion that applicants who had no marijuana convictions had no standing and that as such, the plaintiffs could not serve as class representatives.
So, after Starbucks I, everybody hauled themselves back to the trial court, where the plaintiffs asked to conduct discovery so they could find some better class representatives. The idea was this: Starbucks should search through all their job applications to find applicants with marijuana convictions. They should then send this information to a "neutral administrator" who would write the convicted applicants and ask, "hey, how would you like to disclose your marijuana conviction to the world and be class representatives in our great big fancy case against Starbucks?" And amazingly, the trial court said "Sure, why not?"
To which the Court of Appeal said "We'll tell you why not:"
Nobody can misunderstand this clear legislative purpose. Records of minor marijuana convictions are to be accorded the highest degree of privacy; they must be treated as if they never existed. Despite these strongly worded prohibitions, the subject discovery order requires Starbucks to rummage through old job applications to locate offenders whose existence otherwise would be hidden from public exposure.
Considering the manifest harm and the minimal benefit (all of which are wrapped up in the same legislation), the discovery order cannot possibly pass the Parris balancing test. As Hooper holds, publicly disclosing marijuana-related offenses covered by the marijuana reform legislation violates the individual offender's right of privacy.
But there's additioanal language CBL likes even more.
Plaintiffs' attorneys say the class remedy is necessary because the $200 statutory penalty is de minimis. They frankly desire to achieve a “more powerful litigation posture” because “[i]n numbers there is strength.”
We recognize class counsel's tactical motivations to increase their side‟s bargaining leverage, but the argument militates against a class action, rather than in its favor. The excessive penalties sought by class counsel bear little relationship to any true public interest for what, at most, appears to be a technical violation of Labor Code section 432.8 by Starbucks. The strength that may be gained in numbers also may produce the “absurd result of turning the statute into the veritable adding machine that has been decried by our Supreme Court.”
Wow. Language that will appear forever after in briefs opposing class certification in California.
One side note: years ago, a friend who is also a marketing consultant told CBL that his blog posts would be more compelling if he included images. So CBL often does. But who knew we'd get to include both the Starbucks logo and a marijuana leaf in the same post!
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