A California Court of Appeal has largely reversed a $43 million judgment in a wage misclassification case involving escrow officers, ending a legal battle spanning 19 years.
The case, Cortina v. North Am. Title Co., produced a 137-page opinion that the Court of Appeal itself described as involving an even more “rare and beastly case” than the landmark 2014 Supreme Court decision in Duran v. U.S. Bank Nat’l Ass’n.
The appellate court identified multiple prejudicial errors committed by the trial court throughout the lengthy proceedings, which ultimately produced the substantial nine-figure award.
Among the errors cited, the court found the trial court had permitted a trial plan and format that directly contravened the holdings established in the Duran decision, a significant procedural failing.
The trial court also came under criticism for rejecting the employer’s affirmative defenses on a class-wide basis, which the appellate court characterised as dismissing them “out of hand.”
Further problems arose from the trial court’s decision to elicit representative testimony from just 15 percent of the cohort of allegedly misclassified employees, a sample the appellate court found insufficient.
The appellate court also took issue with the trial court’s failure to decertify the class of employees classified as exempt, noting the trial plan was fundamentally unworkable.
A particularly contentious element of the case involved the trial court appointing a referee to conduct a second phase of the trial without the parties’ consent and over what the opinion described as “defendant’s strenuous objections.”
That referee process ultimately contributed to the $43 million judgment that the appellate court has now largely reversed, a dramatic outcome following nearly two decades of litigation.
In a separate but related development, the case of Taduran v. James R. Glidewell, Dental Ceramics, Inc. saw a California appeals court uphold a trial court’s decision to reduce PAGA penalties on a per-employee rather than a per-pay period basis.
In that case, the court also upheld a reduction to prevailing-party attorney’s fees, which were calculated by applying a negative multiplier of 0.7 to the lodestar amount.
Together, the two rulings signal continued scrutiny from California appellate courts over how wage and hour class actions are structured, tried, and ultimately resolved at the trial level.