Bridgeford v. Pacific Health: Denial of Class Certification No Bar to Absent Class Members

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In an important victory for class action plaintiffs, California’s Second Appellate District has held that “unnamed putative members of a class that was never certified cannot be bound by collateral estoppel.”  Bridgeford v. Pacific Health Corp., No. B227486, 2012 Cal. App. LEXIS 26, * 1-2 (Cal. Ct. App. Jan. 18, 2012) (available here).  The unanimous decision, designated for publication, reverses the trial court’s misapplication of the doctrine of collateral estoppel in reliance on the U.S. Supreme Court’s ruling in Smith v. Bayer Corp., 131 S. Ct. 2368 (2011).  In Smith, the Supreme Court resolved a circuit split and held that unnamed putative class members cannot be bound by issue preclusion if a class in a prior proceeding was denied certification.  Id. at *15 (citing Smith, 131 S. Ct. at 2380-2381).

The Bridgeford plaintiffs alleged numerous wage and hour violations against their employer, Los Angeles Memorial Medical Center, a subsidiary of Pacific Health Corporation.  Their lawsuit sought classwide relief including compensatory damages and civil penalties pursuant to PAGA, the California Labor Code Private Attorneys General Act.  Id. at *2-3.  In a prior class action, another named plaintiff had moved for and lost class certification against the same defendant as to the same wage and hour claims.  Id. at *3-6.  In Bridgeford, the defendant demurred on grounds that collateral estoppel barred the plaintiffs from re-litigating class certification.  Id. at *6.  The trial court sustained the demurrer, without leave to amend.  Id

The Court of Appeal reversed, holding that “the denial of class certification cannot establish collateral estoppel against unnamed putative class members on any issue because unnamed putative class members were neither parties to the prior proceeding nor represented by a party to the prior proceeding so as to be considered in privity with such a party for purposes of collateral estoppel.”  Id. at *16.  Accordingly, because the Bridgeford plaintiffs were not parties to the prior action, they could not be precluded from pursuing their own class claims against the defendant.  Id. at *16-17.