James v. Uber Technologies Inc.

Background

The court had previously entered an order concerning class certification that stated, “Proposition 22 does not apply retroactively.” Uber Technologies Inc. moved for clarification, or alternatively sought permission to file a motion for reconsideration. Uber argued that whether Proposition 22 applies retroactively is a merits question that should not have been decided in a class-certification order.

Parties’ Positions

Uber argued that the retroactivity issue could dispose of the plaintiffs’ claims entirely and therefore should be addressed as part of the merits, not during class certification. The plaintiffs argued that the class-certification order did not decide the merits of any claim and was not a final judgment.

Court’s Analysis

The court agreed with Uber that retroactive application of Proposition 22 is ultimately a merits question. The court explained that deciding that issue during class certification could violate the rule against “one-way intervention.” That rule protects defendants from a situation in which members of a not-yet-certified class wait for a merits ruling and then choose whether to participate based on whether the ruling is favorable.

The court rejected the plaintiffs’ argument that the rule applies only to final merits judgments. It stated that a merits ruling can affect putative class members’ decisions about whether to opt in even when the ruling is not a final judgment. The court also stated that the retroactivity issue could properly be decided on a class-wide basis.

Disposition

Judge Edward M. Chen granted Uber’s motion for clarification. The court clarified that it was not deciding at that time whether Proposition 22 applies retroactively. The order states that withholding that merits decision does not negate class certification. The order disposed of Docket No. 144.