Photo courtesy of California Courts | The California Supreme Court hears oral arguments during a visit to Fresno in October 2024. Fresno-based McCormick Barstow LLP recently helped secure a Fifth District Court of Appeal decision reversing a $43 million judgment in a long-running wage-and-hour case.
Fresno-based law firm McCormick Barstow LLP helped secure a significant appellate victory in a long-running California wage-and-hour class action, resulting in the reversal of a $43 million judgment against North American Title Co., now known as Lennar Title Co.
The Fifth District Court of Appeal on May 29 reversed the judgment and decertified a class of escrow workers who alleged they had been improperly classified as exempt from overtime requirements, according to a press release from McCormick Barstow.
The appellate team included McCormick Barstow Appellate Litigation Group Chair Scott M. Reddie and attorneys from O’Melveny. Justice Rosendo Peña Jr. authored the court’s 138-page partially published opinion.
What’s happening
The case, Cortina v. North American Title Co., has been in litigation since 2007.
Following a 41-day bench trial in 2016, a Fresno Superior Court judge determined that more than 260 escrow employees working in offices throughout California had been improperly classified as exempt from overtime pay, according to the release.
The trial court later appointed a referee to oversee proceedings related to damages. The referee spent nearly three years hearing testimony from more than 200 witnesses and ultimately determined that plaintiffs were owed more than $21 million in restitution. According to McCormick Barstow, that amount eventually grew to nearly $75 million after attorney fees and pre- and post-judgment interest were added.
The appellate court reversed the trial court’s class-wide liability determination and criticized the use of a referee to handle key aspects of the case over the defendant’s objection. According to the opinion cited in the release, the court described that process as “unprecedented in our state jurisprudence” and “entirely unauthorized.”
Why it matters
McCormick Barstow characterized the decision as a complete victory for North American Title, now Lennar Title, a subsidiary of homebuilder Lennar Corp.
According to the firm, appellate decisions decertifying a class after a full trial are uncommon in California wage-and-hour litigation. The firm also said the court’s extensive review of the case record and detailed analysis of class certification issues could make the opinion a significant reference point in future employment class actions.
The opinion itself noted the unusual nature of the litigation, describing the nearly two-decade dispute as “even rarer and more beastly” than a California Supreme Court case discussed in the ruling.
What happens next
If the opinion stands, the case will return to the trial court for further proceedings.
Despite the litigation’s 19-year history, the appellate court suggested additional proceedings are likely, noting in the opinion that “the end is nowhere in sight.”