Bryan J. Schwartz

Schwartz, an employee-side labor lawyer, said he's found a potent weapon to use against defense firms that hope to wield arbitration agreements to fend off class actions.

"Arbitration is their big defense power play," he said. "Mass arbitration is our tool."

So when appraisal management company CoreLogic Inc. sought to compel arbitration for a group of residential real estate appraisers who complained of failure to pay overtime in violation of the Federal Labor Standards Act, and state law, Schwartz took an offbeat approach.

He persuaded U.S. District Judge David O. Carter of Santa Ana to grant conditional certification of a class which nearly 300 appraisers joined. Then, he won a temporary restraining order against CoreLogic for contacting several class members, violating the anti-retaliation provision of the federal law.

That forced CoreLogic to stipulate it would cease communications with class members and transmit to all of its appraisers a statement of their rights under the act.

When Carter granted the defense motion to compel arbitration, Schwartz and his co-counsel filed more than 120 individual arbitration actions, with more to come, he said. Mitchell v. CoreLogic Valuation Solutions Inc., 17-CV02274 (C.D. Cal., filed Dec. 29, 2017).

"The company freaked out," Schwartz said happily. "They did not want to arbitrate; they just wanted to kill our class."

Indeed, CoreLogic asked Carter to enjoin the arbitration proceedings and to forbid Schwartz and co-counsel from representing any former class member at arbitration, citing a variety of arguments -- that the claims are time-barred and that some claimants live in jurisdictions where Schwartz is not authorized to practice, among others that Carter did not buy or said must be left to the arbitrator.

Carter noted Schwartz's response: CoreLogic sought arbitration, but now that it "is facing its contractual obligations in arbitration, it has reversed course." The judge denied the company's motion to bar Schwartz from representing his clients.

"These are wage claims, and they are going to lose most of these arbitrations," Schwartz said. "It's a nightmare for them, because they have to pay for these arbitrations. And it should be a nightmare, because they are the ones playing this stupid game. Defendants who demand individual arbitrations wind up with more expensive and less efficient litigation than a single suit before a very capable federal judge."

He warned defense firms to be careful of how they proceed. "Defendants: don't over-litigate. This is a perfect example of how less is more, and more can be less. They unnecessarily bulked up a case that could have been efficiently resolved in the courtroom through the regular civil justice system."

-- John Roemer