Segovia v. Chipotle Mexican Grill

Filed 3/2/17 Segovia v. Chipotle Mexican Grill CA2/3
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
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IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
SECOND APPELLATE DISTRICT
DIVISION THREE
WENDY SEGOVIA et al.,
Plaintiffs and Respondents,
v.
CHIPOTLE MEXICAN GRILL, INC.,
Defendant and Respondent;
ENRIQUE LOPEZ-CARRILLO,
Objector and Appellant.
B266570
(Los Angeles County
Super. Ct. No. BC489851)
APPEAL from a judgment of the Superior Court of Los
Angeles County, Elihu M. Berle, Judge. Dismissed.
Esner, Chang & Boyer and Stuart B. Esner; The
Quisenberry Law Firm and John N. Quisenberry; Bachus &
Schanker, and Andrew C. Quisenberry for Objector and
Appellant.
Law Offices of Kenneth H. Yoon, Kenneth H. Yoon and
Stephanie E. Yasuda; Law Offices of Peter M. Hart and Peter M.
Hart for Plaintiffs and Respondents.

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Sheppard, Mullin, Richter & Hampton, Richard J.
Simmons, Jason W. Kearnaghan, Daniel J. McQueen and Robert
Mussig for Defendant and Respondent.
_________________________
Objector and appellant Enrique Lopez-Carrillo (Lopez-
Carrillo) appeals a judgment entered following an order
approving the settlement of a wage and hour class action lawsuit
brought by plaintiff and respondent Wendy Segovia (Segovia)
against defendant and respondent Chipotle Mexican Grill, Inc.
(Chipotle).
Before we can reach the merits of Lopez-Carrillo’s
challenges to the trial court’s approval of the settlement, we
address as a threshold matter whether Lopez-Carrillo has
standing to prosecute this appeal. Only a “party aggrieved may
appeal” from a judgment. (Code Civ. Proc., § 902.)1 Lopez-
Carrillo is a class member, but he did not intervene in the action.
As a consequence, Lopez-Carrillo lacks party status and is
without standing to appeal. Accordingly, the appeal is
dismissed.2
1 All further statutory references are to the Code of Civil
Procedure unless otherwise specified.
2 The issue of whether an unnamed class member must
intervene in the litigation in order to have standing to appeal is
currently pending before the California Supreme Court.
(
Hernandez v. Restoration Hardware, Inc. (2016) 245 Cal.App.4th
651, review granted June 22, 2016,
Hernandez v. Muller, Case
No. S233983.)

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FACTUAL AND PROCEDURAL BACKGROUND
Segovia was employed by Chipotle in California in various
non-exempt hourly positions, including team member, kitchen
manager, service manager and assistant general manager,
beginning in June 2010 until February 2012. Segovia
commenced this action in August 2012 and filed her fourth
amended complaint in October 2013.
Segovia alleged, inter alia, that she and similarly situated
employees were not paid all vacation wages that were earned,
were not reimbursed for all work-related mileage expenses, were
not paid for off-the-clock work, were not permitted to take legally-
mandated meal and rest breaks, were not paid all overtime hours
at the correct rate, and were not given accurate and itemized
wage statements. Segovia sought to represent a class of “all
current and former employees classified by [Chipotle] as non-
exempt from overtime who worked at [a Chipotle] restaurant in
California during the period from August 8, 2008 to the present,”
including specified subclasses.
The parties engaged in extended settlement negotiations,
and in August 2014, two years into the litigation, they executed a
long-form Stipulation and Settlement of Class Action Claims
(Settlement or Agreement). The Agreement provided for a gross
settlement amount of $2 million, with the net proceeds (after
deduction of a court-approved attorney fee and cost award not to
exceed one-third of the gross settlement fund, a service award to
Segovia of up to $15,000, claims administration costs, and the
State of California’s portion of a payment under the Labor Code
Private Attorneys General Act of 2004 [Lab. Code, § 2698 et seq.])
to be distributed to the participating class members who had not
opted out of the Settlement. The Settlement provided that the

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settlement amount for each class member would be based on each
individual’s pro rata share of the total amount of wages earned
by the settlement class members during the class period.3 The
individual payouts would be distributed by the claims
administrator, without requiring class members to submit claim
forms or other documentation.
In the Settlement, the parties also stipulated to the filing of
a fifth amended complaint, to include claims under the federal
Fair Labor Standards Act of 1938 (FLSA) (29 U.S.C. § 201 et seq.)
that overlap with the claims and issues in the fourth amended
complaint, including FLSA claims for off-the-clock work,
overtime, improper regular rate calculations and minimum
wages.
On August 22, 2014, Segovia filed a motion for preliminary
approval of the Settlement.
On December 29, 2014, the trial court entered an order
granting preliminary approval of the Settlement. The trial court
ruled that “for purposes of the Agreement only, this litigation is
CERTIFIED as a class action pursuant to California Code of
Civil Procedure § 382.” It preliminarily approved the Settlement
“as appearing on its face to be fair, reasonable, and adequate and
to have been the product of serious, informed, and extensive
arm’s length negotiations.” The trial court indicated it had
“considered the nature of the claims, the relative strength of
Plaintiff’s claims, the amounts and kinds of benefits paid in
3 Lopez-Carrillo asserts that with approximately 38,000 class
members, each individual would receive, on the average, a net
payout of about $34.21. Similarly, according to Segovia, the
average payment would be “$28.20 per person (gross of payroll
taxes).”

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Settlement, the allocation of Settlement proceeds among the class
members, and the fact that the Settlement represents a
compromise of the Parties’ respective positions rather than the
result of a finding of liability at trial.” The trial court appointed
class counsel, approved the claims administrator, approved the
Notice of Pendency of Class Action Settlement to be mailed to
class members, and scheduled a final approval and fairness
hearing.
On April 7, 2015, the claims administrator sent the
Settlement notice by first class mail to the 38,344 class members
on the class list. According to Chipotle, 96 percent of the class
members received the notice.
Four class members, including Lopez-Carrillo, filed
objections to the proposed Settlement, and 35 individuals elected
to opt out. Lopez-Carrillo contended, inter alia: Segovia had not
shown the proposed Settlement was fair, reasonable, and
adequate; the notice to class members did not comply with due
process; and Segovia did not meet her burden on class
certification.4 Lopez-Carrillo did not opt out of the Settlement,
nor did he seek to intervene in the action.
On June 25, 2015, the trial court conducted a final approval
and fairness hearing. On July 14, 2015, it entered an order
overruling the objections of Lopez-Carrillo and the three other
objectors, approved the Settlement as “fair, reasonable, adequate,
and in the public interest,” and directed entry of a final
judgment.
4 Lopez-Carrillo is a plaintiff in Turner, et al. v. Chipotle
Mexican Grill, Inc., No. 1:14-cv-02612-JLK (D.Colo.), a
nationwide FLSA collective action that is being prosecuted in
Colorado federal court.

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On September 2, 2015, Lopez-Carrillo filed a timely notice
of appeal from the judgment.
CONTENTIONS
Lopez-Carrillo contends: the Settlement’s FLSA opt-in
process does not comport with state or federal law; the trial court
abused its discretion in concluding the proposed Settlement was
fair, reasonable and adequate; and the trial court erred in
granting certification of the Settlement class.
Chipotle and Segovia, in turn, assert the appeal should be
dismissed because Lopez-Carrillo lacks standing to appeal.
DISCUSSION
Because “standing to appeal is jurisdictional” (Life v.
County of Los Angeles (1990) 218 Cal.App.3d 1287, 1292, fn. 3),
we must determine as a threshold matter whether Lopez-Carrillo
may prosecute this appeal.
1. General principles.
Only a “party aggrieved may appeal” from a judgment.
(§ 902.) As a general rule, only parties of record may appeal
(County of Alameda v. Carleson (1971) 5 Cal.3d 730, 736), and the
courts have interpreted section 902 to require the appellant both
to have been a “party” below and to have been “aggrieved” by the
judgment. (See, e.g., Marsh v. Mountain Zephyr, Inc. (1996)
43 Cal.App.4th 289, 295 [“to have standing to appeal, a person
generally must be both a party of record and sufficiently
‘aggrieved’ by the judgment or order”].)
As this court explained in Earley v. Superior Court (2000)
79 Cal.App.4th 1420 (Earley), a class action is one prosecuted by
named class representative plaintiffs, who assume a fiduciary
responsibility to prosecute the action on behalf of the absent
parties. (Id. at p. 1434.) The class action structure relieves the

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absent class members of the burden of participating in the action,
working with class counsel, and being held liable for a successful
defendant’s attorney fees and costs. (Id. at pp. 1431-1434.)
Indeed, “[t]he structure of the class action does not allow absent
class members to become active parties, since ‘to the extent the
absent class members are compelled to participate in the trial of
the lawsuit, the effectiveness of the class action device is
destroyed.’ ” (Id. at p. 1434, fn. omitted.)
Although unnamed class members may be deemed parties
for the limited purpose of discovery (Southern California Edison
Co. v. Superior Court (1972) 7 Cal.3d 832, 840 (Edison);5 National
Solar Equipment Owners’ Assn. v. Grumman Corp. (1991)
235 Cal.App.3d 1273, 1281-1282 (National); Earley, supra,
79 Cal.App.4th at p. 1434, fn. 11), “unnamed class members do
not ‘stand on the same footing as named parties.’ ” (National,
supra, at p. 1282.)
2. The Eggert decision: unnamed class members lack
appellate standing.
Eggert v. Pac. States S. & L. Co. (1942) 20 Cal.2d 199
addressed whether unnamed class members could appeal from a
postjudgment order entered in a class action. There, the named
plaintiff, Eggert, commenced an action against a savings and loan
company on behalf of himself and some 1,500 persons who were
certificate holders. (Id. at p. 199.) The trial court held the suit a
proper class action and entered judgment for Eggert and the
other certificate holders whom he represented. The judgment
5 In Edison, the issue was whether unnamed plaintiffs could
be compelled to attend depositions on mere written notice to
opposing counsel, or whether the unnamed plaintiffs had to be
served by subpoena. (Edison, supra, 7 Cal.3d at pp. 836-837.)

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awarded the class more than $1.8 million, to be apportioned pro
rata among class members after deduction of expenses and fees.
The judgment further reserved jurisdiction to determine the fees
to be paid plaintiff’s attorneys. (Id. at p. 200.) After appointing a
receiver to facilitate the collection and payment of the judgment,
the court also issued an order, directed to plaintiff and all other
persons interested, to show cause why it should not make an
order fixing reasonable attorney fees. (Ibid.) Two certificate
holders appeared and objected to the award of attorney fees to
plaintiff’s attorneys, and subsequently appealed from the order
fixing the amount of attorney fees. (Ibid.)
The class representative moved to dismiss the appeal, and
our Supreme Court granted the motion, explaining “it is a settled
rule of practice in this state that only a party to the record can
appeal. [Citations.] Appellants were not named as parties to the
action nor did they take any appropriate steps to become parties
to the record. The fact that their names and the extent of their
interest in the action appeared in an exhibit attached to the
complaint and the judgment did not make them parties to the
record. [Citations.] Although their attorney appeared at the
hearing on the petition for the payment of the money to plaintiff’s
attorneys and objected to such payment, he did not ask that
appellants be made parties, nor did the court order them brought
into the action. [Citation.] Appellants had ample opportunity
even after the court had made its orders to become parties of
record by moving to vacate the orders to which they objected.
They could then have appealed from the order denying the

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motion.” (Eggert, supra, 20 Cal.2d at p. 201.) Accordingly, the
Supreme Court ordered that the appeal be dismissed. (Ibid.)6
Eggert is controlling here. Like the present action, it
involved a class action, an unsuccessful objection by class
members who were not parties of record, and thereafter an
appeal by the objectors. Guided by our Supreme Court’s decision
in Eggert, we conclude Lopez-Carrillo’s appeal must be dismissed.
(Auto Equity Sales, Inc. v. Superior Court (1962) 57 Cal.2d 450,
455 [decisions of California Supreme Court are binding upon and
must be followed by all state courts in California] (Auto Equity).)7
3. Appellate decisions in Trotsky and its progeny,
conferring appellate standing upon mere objectors, are at odds
with Eggert.
Notwithstanding the California Supreme Court’s Eggert
decision, Lopez-Carillo contends he has standing to appeal
pursuant to the appellate court’s decision in Trotsky v. Los
Angeles Fed. Sav. & Loan Assn. (1975) 48 Cal.App.3d 134
6 We note the federal rule is different. In Devlin v.
Scardelletti (2002) 536 U.S. 1, 14 [153 L. Ed. 2d 27], the United
States Supreme Court held that “nonnamed class
members . . . who have objected in a timely manner to approval of
the settlement at the fairness hearing have the power to bring an
appeal without first intervening.” (See generally, Newberg on
Class Actions (5th ed.) § 14:13, relating to appeals by objectors.)
7 Lopez-Carrillo attempts to distinguish this case from
Eggert on the grounds that (1) unlike the instant case, which was
settled, the judgment in Eggert resulted from an adversarial
proceeding; and (2) the appeal in Eggert was limited to the issue
of the trial court’s award of attorney fees. Bearing in mind that
the issue before this court is one of appellate standing, both of
these appear to be distinctions without a difference.

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(Trotsky). We conclude Lopez-Carillo’s reliance on Trotsky is
misplaced because the Trotsky decision overlooked Eggert.
In Trotsky, appellant Barwig was an unnamed member of
the affected class who appeared at a hearing on a proposed
settlement of the class action and objected to the settlement.
(Trotsky, supra, 48 Cal.App.3d at p. 139.) Trotsky, in discussing
Barwig’s standing to appeal, stated: “As a member of the affected
class who appeared at the hearing in response to the notice, and
whose objections to the proposed settlement were overruled,
appellant is a party aggrieved, and has standing to appeal. (Code
Civ. Proc., § 902.) This is true even though appellant could
instead have ‘opted out,’ i.e., requested exclusion from the
judgment. (See Civ. Code, § 1781, subd. (e).) As stated by the
court in Ace Heating & Plumbing Company v. Crane Company
(3d Cir. 1971) 453 F.2d 30, 33, deciding a similar question under
rule 23 of the Federal Rules of Civil Procedure, ‘ . . . It is possible
that, within a class, a group of small claimants might be
unfavorably treated by the terms of a proposed settlement. For
them, the option to join is in reality no option at all. Rule 23
recognizes the fact that many small claimants frequently have no
litigable claims unless aggregated. So, without court approval
and a subsequent right to ask for review, such claimants would
be faced with equally unpalatable alternatives—accept either
nothing at all or a possibly unfair settlement. We conclude that
appellants have standing to appeal . . . .’ (See also Research
Corporation v. Asgrow Seed Company (7th Cir. 1970) 425 F.2d
1059, 1060; Cohen v. Young (6th Cir. 1942) 127 F.2d 721, 724,
cert. den., 321 U.S. 778 [88 L.Ed. 1071, 64 S.Ct. 619].) Were the
rule otherwise, a class member who objected in the trial court to
the terms of the settlement would be unable to secure appellate

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review of the court’s order approving the settlement.” (Trotsky,
supra, 48 Cal.App.3d at pp. 139-140, fn. omitted.)
Thus, Trotsky focused primarily on whether an objector to a
settlement was “aggrieved ” within the meaning of section 902,
concluding objectors were aggrieved because “ ‘[i]t is possible
that, within a class, a group of small claimants might be
unfavorably treated by the terms of a proposed settlement.’ ”
(Trotsky, supra, 48 Cal.App.3d at p. 139.) However, Trotsky did
not examine the discrete “party” element of section 902, i.e.,
“[a]ny party aggrieved may appeal.” (Ibid., italics added.)
Moreover, Trotsky did not even mention Eggert, let alone
attempt to reconcile its expansive approach to standing with
Eggert’s holding that class members who are merely objectors,
rather than parties to the class action, lack standing to appeal.
(Eggert, supra, 20 Cal.2d at p. 201.) Instead of following Eggert,
the Trotsky court based its analysis primarily on federal cases to
conclude the appellant had standing to appeal pursuant to
section 902. (Trotsky, supra, 48 Cal.App.3d at pp. 139-140.) For
these reasons, we conclude Trotsky’s analysis of standing is
erroneous.
We reach the same result with regard to decisions that
were guided by Trotsky. For example, Rebney v. Wells Fargo
Bank (1990) 220 Cal.App.3d 1117 (Rebney) states “there will be
review if any aggrieved parties desire it; all they have to do is
appear as objectors at the fairness hearing and then take an
appeal.” (Id. at p. 1131.) Like Trotsky, the Rebney decision does
not mention Eggert and relies on federal cases. (Rebney, supra,
at pp. 1131-1132.)8 To similar effect is Wershba v. Apple
8 In Rebney, the court took a piecemeal approach to
determining appellate standing of non-intervening parties, and

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Computer, Inc. (2001) 91 Cal.App.4th 224 (Wershba), which cites
Trotsky for the proposition that “[c]lass members who appear at a
final fairness hearing and object to the proposed settlement have
standing to appeal.” (Wershba, supra, at p. 235.) Wershba relies
solely on Trotsky on the issue of standing. (Wershba, supra, at
pp. 235-236.) Thereafter, Consumer Cause, Inc. v. Mrs. Gooch’s
Natural Food Markets, Inc. (2005) 127 Cal.App.4th 387, at pages
395-396, relies on Rebney, Trotsky and Wershba on the issue of
standing, without addressing the limitation imposed by Eggert.
In sum, Trotsky and its progeny are inconsistent with
Eggert and therefore are unavailing to Lopez-Carrillo. We
conclude that his mere appearance as an objector at the trial
court level is insufficient to confer appellate standing.
4. Additional considerations in favor of the Eggert rule.
Under Auto Equity, supra, 57 Cal.2d at page 455, Eggert is
binding on this court and must be followed. However, we make
the additional observation that the Eggert rule is sound and in
harmony with class action principles generally.
First, unnamed class members who disagree with a
proposed settlement are not deprived of appellate recourse. They
may move to formally intervene in the action and, if permitted to
intervene, then appeal the judgment entered on the settlement;
alternatively, if denied the right to intervene, they may appeal
the order denying intervention. (County of Alameda v. Carleson,
found they had standing to appeal some issues, but not others,
depending upon whether or not they were aggrieved. (Rebney,
supra, 220 Cal.App.3d at pp. 1132-1134, 1142 [objectors were not
aggrieved by expansion of class certification and fairness of
settlement issues, but were aggrieved by attorney fee agreement
between class counsel].)

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supra, 5 Cal.3d at p. 736.) Dissatisfied class members also may
elect to opt out of the settlement and pursue their claims in a
separate action.
We are also mindful that California “ ‘has a public policy
which encourages the use of the class action device’ ” (Sav-On
Drug Stores, Inc. v. Superior Court (2004) 34 Cal.4th 319, 340),
because class actions enable “the claims of many individuals [to]
be resolved at the same time.” (Ibid.) Classes may be quite
large: here, for example, the class consists of approximately
38,000 individuals, and much larger classes have also been
certified.9 If every unnamed class member who objects to a
proposed settlement could appeal individually, the litigation
would become unwieldy and unmanageable and the benefits of
the class action device would be undermined.
Further, conferring appellate standing on mere objectors
would erode the distinction between parties and absent class
members. For example, absent plaintiff class members cannot be
held liable for a successful defendant’s attorney fees and costs.
(Earley, supra, 79 Cal.App.4th at p. 1431.) As we stated in
Earley, the United States Supreme Court has “emphasized how
differently the absent class plaintiffs are treated from the absent
class defendant. ‘Besides [a] continuing solicitude for their
rights, absent plaintiff class members are not subject to other
9 For example, in Wal-Mart Stores, Inc. v. Dukes (2011)
564 U.S. 338 [180 L.Ed.2d 374], the district court certified a class
of about one and a half million current and former female
employees of Wal-Mart, although the certification order
subsequently was reversed because the plaintiffs did not provide
“convincing proof of a companywide discriminatory pay and
promotion policy.” (Id. at p. 359.)

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burdens imposed upon defendants. They need not hire counsel or
appear. They are almost never subject to counterclaims or cross-
claims, or liability for fees or costs. Absent plaintiff class
members are not subject to coercive or punitive remedies. Nor
will an adverse judgment typically bind an absent plaintiff for
any damages, although a valid adverse judgment may extinguish
any of the plaintiff’s claims which were litigated.’ ” (Earley,
supra, 79 Cal.App.4th at p. 1431, quoting Phillips Petroleum Co.
v. Shutts (1985) 472 U.S. 797, 810 [86 L.Ed.2d 628], italics added
by Earley.) Thus, it would be anomalous to confer appellate
standing upon a mere objector, while at the same time allowing
that individual to retain the protections afforded absent plaintiff
class members.
5. Remaining issues not reached.
Having determined that Lopez-Carrillo lacks standing to
appeal, we do not reach his contentions with respect to the merits
of the appeal.

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DISPOSITION
The appeal is dismissed. The parties shall bear their own
costs on appeal.
NOT TO BE PUBLISHED IN THE OFFICIAL
REPORTS
EDMON, P. J.
We concur:
ALDRICH, J.
LAVIN, J.

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