Class-Action Suit Against Starbucks Grinds to a Halt

Don’t even get me started about class-action lawsuits.

In most (but not all) cases they are nothing but legalized extortion. They do not seek to address or correct a wrong, but rather are directed at hyper-technical violations that are used to create a putative class. In the end, the lawyers make millions in attorney fees and the "solution" to the problem is often comical. There is no shortage of examples, but one of my favorites involved the Jenny Craig diet centers. A class action was brought because Jenny Craig was committing the heinous act of failing to disclose that all the thin people displayed in the print ads did not represent the "typical" results. (Would anyone on the Jenny Craig diet have believed that all who entered would achieve the same results as those highlighted in the ads?) The class-action lawyers were paid huge legal fees, and for settlement the represented members received – are you ready? – a set of Jenny’s diet motivation tapes.

If a business is committing a genuine wrong that is causing real injury, and refuses to correct the situation, then have at them. But my frustration comes from the fact that many of these suits involve no real wrong, and in any event could be corrected with a stern letter from an attorney.

The California Court of Appeal agreed with my opinion of class-action lawsuits in the recent decision, Starbucks v. Superior Court (2008 DJDAR 18131). In the 1970s, California passed an obscure Labor Law that prohibits employers from asking prospective employees about minor marijuana-related convictions that are more than two years old. The two-page employment application form used by Starbucks, designed for nationwide use, asks the applicant to disclose marijuana convictions, which is theoretically a violation since the applicant could choose to disclose a conviction more than two years old if unaware of the law. However, the second page of the form specifically instructs California applicants not to disclose marijuana convictions more than two years old.

Plaintiffs’ counsel claimed that was not good enough, arguing that the question and the disclaimer should be together. (A letter from my office could have corrected that, but perhaps plaintiffs’ counsel is not as persuasive.) Unfortunately for Plaintiffs’ counsel, of the three representative plaintiffs, two testified at their depositions that they understood the disclaimer, and all three testified that they had no marijuana convictions to disclose. Nonetheless, attorneys for the class were seeking the statutorily mandated $200 per offense, which would have resulted in an eight-figure award if successful. Incredibly, Judge David C. Velasquez of the Orange County Superior Court denied Starbuck’s motion for summary judgment and certified the class, allowing the case to go forward.

In reversing Judge Velasquez and ordering the case dismissed, the Court of Appeal stated that "there are better ways to filter out impermissible questions on job applications than allowing ‘lawyer bounty hunter’ lawsuits brought on behalf of tens of thousands of unaffected job applicants." Justice Raymond Ikola added, "the civil justice system is not well served by turning Starbucks into a Daddy Warbucks."

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