Posted On: May 5, 2011 by Michael J. Hassen Email This Post

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Discovery Class Action Defense Cases–Starbucks v. Superior Court: California Appellate Court Reverses Discovery Order Compelling Starbucks To Identify And Disclose Names Of Possible Class Representatives

Trial Court Order Requiring Starbucks to Identify and Disclose Job Applicants with Marijuana Convictions Violates the Privacy Rights Sought to be Redressed by Putative Class Action California Appellate Court Holds

Plaintiffs filed a putative class action against Starbucks for allegedly violating California marijuana laws by asking prospective employees to disclose, on a preprinted form, whether they had suffered any marijuana convictions. Starbucks Corp. v. Superior Court, ___ Cal.App.4th ___ (Cal.App. April 25, 2011) [Slip Opn., at 2]. The class action complaint was premised on the fact that “[I]n the mid-1970s, the California Legislature reformed the state’s marijuana laws to require the ‘destruction’ by ‘permanent obliteration’ of all records of minor marijuana convictions that were more than two years old. Employers were prohibited from even asking about such convictions on their job applications, with statutory penalties of the greater of actual damages, or $200 per aggrieved applicant.” Id. The class action sought $26 million on behalf of 135,000 job applicants, alleging that Starbucks “failed to adequately advise job applicants not to disclose minor marijuana convictions more than two years old.” Id., at 2-3. During the litigation, the Court of Appeal held that the plaintiffs lacked standing to prosecute the class action “because none had any marijuana convictions to reveal.” Id., at 2 (citing Starbucks Corp. v. Superior Court (2008) 168 Cal.App.4th 1436). Accordingly, the trial court subsequently granted Starbuck’s motion for summary judgment and dismissed the named plaintiffs as class representatives. Id. However, rather than dismissing the lawsuit, the trial court ruled that plaintiffs could “file a first amended complaint to include only job applicants with marijuana convictions” as class members, and could “conduct further discovery to find a ‘suitable’ class representative.” Id. Toward that end, Starbucks was ordered “to randomly review job applications until it identifies job applicants with prior marijuana convictions” and to then disclose those names to plaintiffs’ counsel “unless they affirmatively opt out to a neutral administrator.” Id. Starbucks again sought writ review and the Court of Appeal reversed.

This case is surprisingly simple. As the Court of Appeal summarized its opinion, “By providing for the disclosure of job applicants with minor marijuana convictions, the discovery order ironically violates the very marijuana reform legislation the class action purports to enforce. We fail to understand how destroying applicants’ statutory privacy rights can serve to protect them.” Starbucks, at 2-3.

By way of background, the trial court believed plaintiffs had standing to prosecute this putative class action: “None of the plaintiffs had been convicted of a marijuana-related crime. But they contended that California law allowed any job applicant to receive a minimum statutory penalty of $200 per applicant if they filled out an improper job application.” Starbucks, at 3. The trial court agreed with plaintiffs, and found that every job applicant was entitled to receive the $200 statutory penalty “even those who never had sustained a marijuana conviction,” id. The appellate court disagreed, holding that “neither plaintiffs nor the tens of thousands of job applicants they purported to represent were entitled to recover statutory penalties where they did not have any marijuana convictions to disclose.” Id. Rather, “Only an individual with a marijuana-related conviction falls within the class of people the Legislature sought to protect.” (168 Cal.App.4th at 1449.)

After the trial court allowed plaintiffs to file an amended class action complaint, plaintiffs’ counsel “filed a motion to compel Starbucks to respond to special interrogatories to identify, by name, last known home address, and last known home telephone number, each person who filled out a job application after June 23, 2004, but more than two years after a conviction for a minor marijuana offense.” Starbucks, at 4. Plaintiffs argued that all other efforts had failed to “establish a suitable representative for a redefined class of job applicants possessing the requisite marijuana conviction.” Id. Plaintiffs argued that the discovery was necessary to “protect the class,” but as the appellate court observed, “Neither side addressed how exposing prior marijuana convictions possibly could ‘protect’ the interests of unnamed class members.” Id. Nonetheless, the trial court ordered Starbucks to review the 135,000 job applications “in random batches of 25 applicants until it found 25 applicants who submitted a Starbucks job application more than two years after receiving a marijuana conviction.” Id. The court order provided for a third party administrator to send these 25 applicants an opt-out letter that told them their personal information would be disclosed unless they affirmatively opted out. Id., at 4-5. Starbucks sought a petition for writ of mandate to compel the trial court to vacate the discovery order and to dismiss the putative class action. Id., at 5. The appellate court granted the petition.

The appellate court held that the trial court abused its discretion in granting plaintiffs’ motion to compel discovery. See Starbucks, at 5. The appellate court noted that “despite some five years of litigation” the plaintiffs were unable to find any Starbucks job applicant that had been injured by the alleged misconduct. Id., at 7. “Instead, plaintiffs want Starbucks to do this work for them, to actually search through its job applications precisely for the purpose of identifying applicants with marijuana convictions.” Id. And under the trial court’s discovery order, the individuals identified by Starbucks would have to “affirmatively assert their privacy rights to prevent their names from being forwarded to plaintiffs’ counsel.” Id. The very privacy concerns sought to be redressed by the putative class action are violated by the discovery order: “One can only imagine the potential consternation in a household where a Starbucks applicant with a marijuana-tinged past is ‘outed’ to a spouse, child, or roommate who opens the letter and reads about a lawsuit involving job applicants with prior marijuana convictions.” Id. Despite the clear legislative prohibition against the disclosure of old marijuana convictions, “the subject discovery order requires Starbucks to rummage through old job applications to locate offenders whose existence otherwise would be hidden from public exposure.” Id., at 9. Put simply, “Far from protecting the public’s interest, precertification class discovery will harm the putative class members’ protected privacy rights, in contravention of the prohibition against employer inquiries in the marijuana reform legislation.” Id. The discovery order thus constituted an abuse of discretion. Id., at 9-10. Accordingly, the Court of Appeal ordered the trial court to vacate its discovery order, and awarded Starbucks its costs on appeal. Id., at 13.

Download PDF file of Starbucks Corp. v. Superior Court