California Appellate Court Reverses Finding of Misjoinder

Plaintiffs alleging harm from a common policy or practice can be joined in a single action under California’s permissive joinder statute, an appellate court in the state has ruled, reversing the trial court’s conclusion that the plaintiffs were improperly joined.

In November 2017, a putative class action was filed against Tesla in California state court, styled as Vaughn, et al. v. Tesla, Inc. The class included hundreds of Black employees who allegedly suffered racial discrimination and harassment while working in Tesla’s production facility in violation of the Fair Employment and Housing Act (FEHA).

The complaint alleged that the employees were regularly subjected to offensive racial conduct, including being called the N-word by other employees and supervisors.

In June 2023, the Vaughn plaintiffs moved for class certification. The trial court granted the motion in part, certifying the class on three issues: whether there was a pattern or practice of pervasive race harassment at the Tesla factory; whether Tesla knew or should have known of this pattern or practice; and if so, whether Tesla failed to take immediate and appropriate corrective action.

However, the court declined to certify a class of Tesla workers to pursue a class claim for individual liability or damages and ordered that each worker who wanted to recover damages had to file a separate lawsuit, holding that “an individual Tesla worker must still prove that they personally experienced harassment.”

Tesla later moved to decertify the class in Vaughn and the trial court granted the motion.

A total of 440 former Vaughn class members then filed five complaints, ranging from 54 to 98 plaintiffs per action. The lawsuits included causes of action under FEHA for racial discrimination, racial harassment and failure to prevent discrimination and harassment.

The trial court issued an order to show cause why it should not order that there was improper joinder of plaintiffs in each of the five cases.

In response, the plaintiffs argued that joinder was proper under section 378 and that any anticipated differences in their experiences did not justify finding misjoinder at this stage of the proceedings.

The court disagreed, found misjoinder and ordered all plaintiffs except for the first named plaintiff on each complaint dismissed so that each could file an individual complaint. The plaintiffs appealed.

Emphasizing California’s permissive joinder statute, the appellate panel reversed. 

Section 378, the permissive joinder statute, provides that “[a]ll persons may join in one action as plaintiffs” if their right to relief arises “out of the same transaction, occurrence, or series of transactions or occurrences” and if there is “any question of law or fact common to all.”

Importantly, unlike other procedural statutes that commit discretion to the trial judge, section 378 commits discretion to the plaintiffs to decide whether to join together in a common action. No commonality in the damages sought by each plaintiff is necessary, as what matters is that liability is amenable to mass action treatment, the court explained.

Tesla argued that the trial court properly found misjoinder under section 378 because the plaintiffs failed to allege that their claims arose from the same transaction or occurrence, but the court disagreed.

“‘[S]tatutes relating to joinder’ like section 378 ‘should be liberally construed, unless expressly forbidden, to the end that a multiplicity of suits may be prevented,’” the court wrote. “Consistent with this presumption in favor of joinder, a right to relief arises from the same transaction or occurrence under section 378 so long as ‘there is any factual relationship between the claims joined.’”

The plaintiffs alleged in their five complaints that Tesla engaged in a “common” policy or practice that harmed all of them, specifically that the employer was aware of ongoing racial harassment at its factory and that Tesla nonetheless engaged in a pattern and practice of systematically and consistently ignoring the racist conduct, which caused each plaintiff to be exposed to such conduct at the factory.

“Because we must liberally construe these allegations in favor of joinder, they are sufficient to justify joinder based on a commonality of liability,” the court said. “That plaintiffs alleged racial discrimination and harassment occurring at different times and in different locations within the Tesla factory does not mean that their claims did not arise out of the same transaction or occurrence.”

Determining that the trial court erred in finding misjoinder, the court rejected “the argument that the court may consider case manageability or administration in determining whether joinder is proper under section 378.” The court went on, “[a]lthough the court may address these practical concerns under section 379.5, they ‘do not furnish grounds for finding a misjoinder of plaintiffs’ under section 378. Indeed, under the language of section 378, ‘it is the plaintiffs,’ and not the court, ‘who make the initial decision to file jointly.’”

While section 379.5 gives the trial court broad authority to sever the trials of properly joined parties and to make other orders as the interests of justice may require, “they do not allow the court to usurp plaintiffs’ right to join their claims under section 378,” the court wrote.

“By requiring each individual plaintiff to file a separate complaint even though their claims meet the requirements of section 378, the trial court has adopted a procedure that conflicts with section 378,” the court said. “This it cannot do.”

The trial court’s proposed interpretation of section 379.5 also violated the canons of statutory interpretation, the court added. A court must harmonize statutes where reasonably possible, while the trial court asked for the power under section 379.5 to disregard or nullify section 378, which the court declined to do.

Nor did the broad authority to manage complex cases under California Standards of Judicial Administration, specifically standard 3.10(a), change the answer, the court found; it also rejected the trial court’s reliance on federal district court orders that considered manageability in dismissing mass joinder actions and the potential loss of filing fees.

Although the court vacated the trial court’s order, it was sympathetic to its plight, recognizing that each of the 440 individual plaintiffs alleged different incidents of racial harassment and different damages.

To help manage the cases, the trial court could order separate trials (by party or claim); it could also require that plaintiffs create and maintain tracking spreadsheets to help alleviate the court’s administrative concerns, the court suggested.

“We are confident that there are other measures that the court may take to manage plaintiffs’ claims short of a blanket prohibition on their joinder in one action,” the court concluded. “To the extent that those measures prove inadequate, however, the solution would appear to lie with the Legislature. … In the meantime, courts must follow existing law and utilize the tools that the Legislature has seen fit to provide thus far. A court may not, as the court did here, deny joinder of any claims under section 378 and dismiss the claims of all plaintiffs except for the first named plaintiffs in the five actions—435 plaintiffs in total.”

To read the opinion in Smith v. Superior Court, click .

Why it matters: Although the appellate panel acknowledged the potential challenge facing the trial court with a total of 440 plaintiffs across five lawsuits with different facts and different damages claims, it was adamant that under section 378, the trial court could not deny joinder to 435 plaintiffs given the permissive nature of the statute.