Carl Williams et al v. Irwin Industries, Inc.

Filing 34

ORDER GRANTING IN PART AND DENYING IN PART PLAINTIFFS MOTION FOR RECONSIDERATION 30 by Judge Otis D. Wright, II: Plaintiffs Motion for Reconsideration is DENIED as to the dismissal of all claims and GRANTED as to the order for arbitration. Because federal courts lack subject matter jurisdiction over disputes that are grounded in the CBA, the Court finds that all of Plaintiffs claims were properly dismissed. And, because the Court dismissed the complaint as pre-empted by § 301, and not for failure to make use of the grievance procedure established in the CBAs, the Court improperly ordered the parties to arbitration. The case is hereby dismissed, and the parties not ordered to arbitration. (lc). Modified on 9/16/2016 .(lc).

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O 1 Previously JS-6 2 3 4 5 6 7 United States District Court Central District of California 8 9 10 11 CARL CURTIS; ARTHUR WILLIAMS, Case 2:15-cv-02480-ODW(Ex) Plaintiffs, 12 ORDER GRANTING IN PART AND v. 13 14 IRWIN INDUSTRIES, INC.; DOES 1 – DENYING IN PART PLAINTIFFS’ 15 100, MOTION FOR 16 17 RECONSIDERATION [30] Defendants. I. INTRODUCTION 18 Plaintiffs Carl Curtis and Arthur Williams, former employees of Defendant 19 Irwin Industries, Inc. (“Irwin”) filed a First Amended Complaint (“FAC”), alleging 20 wage-and-hour violations. (First Am. Compl., ECF No. 11.) On May 29, 2015, Irwin 21 filed a Motion to Dismiss, which the Court granted on November 12, 2015. (Mot. to 22 Dismiss, ECF No. 14; Order Granting Irwin’s Mot. to Dismiss (“Order”), ECF No. 23 24 25 26 27 28 29.) The Court found that Plaintiffs’ claims were entirely preempted by § 301 of the Labor Management Relations Act (“LMRA”) and must therefore be arbitrated pursuant to the terms of the parties’ collective bargaining agreements. (Order 5.) Plaintiffs now move the Court under Rule 59(e) and Rule 52(b) to either alter or amend its judgment entered on November 12, 2015, based on what Plaintiffs claim is 1 a clear error of law in this Court’s Order. (Motion for Reconsideration (“Mot.”) 3, 2 ECF No. 30.) For the reasons discussed below, the Court GRANTS IN PART and 3 DENIES IN PART Plaintiffs’ Motion for Reconsideration.1 4 II. FACTUAL BACKGROUND 5 Plaintiffs bring this action on their own behalf and on behalf of all persons 6 similarly situated. (First Am. Compl. ¶ 8.) The class consists of Irwin’s hourly 7 8 9 employees who, at any time within four years from the date of filing this action, worked for periods of 24 consecutive hours or more (“Putative Class”). (Id.) The Putative Class represents over 25 persons. (Id.) 10 Plaintiffs worked on an oil platform off the California coast in shifts that 11 12 13 14 typically lasted seven days. (Id. ¶ 13.) Plaintiffs allege that they received pay for 12 hours each day, but should have received pay for 24 hours, because they could not reasonably leave the platform during their seven-day shifts. (Id.) 15 At all relevant times of their employment, Plaintiffs were members of the 16 United Steel, Paper, and Forestry, Rubber, Manufacturing, Energy, Allied Industrial 17 and Service Workers International Union, Local 1945 (the “Union”). 18 Master Agreements, ECF No. 14, Exs. 1, 2.) On behalf of its members, the Union and 19 Irwin entered into two Collective Bargaining Agreements (“CBAs”), which provide 20 that “the grievance [process outlined in the Agreement] and arbitration process will be 21 used to settle issues that cannot be resolved through discussion and mutual 22 agreement.” (Id. at 8.) The CBAs cover wage disputes and state that “[a]ny alleged 23 violation of any applicable wage order shall be resolved exclusively under and in 24 accordance with the procedure for settlement of grievances and disputes set forth in 25 (National this Agreement.” (Id. at 11.) 26 27 28 1 After carefully considering the papers filed in support of and in opposition to the Motion, the Court deems the matter appropriate for decision without oral argument. Fed. R. Civ. P. 78; L.R. 7-15. 2 1 On February 17, 2015, Plaintiffs filed their original Complaint in the Santa 2 Barbara County Superior Court. (Compl., ECF No. 1, Ex. A.) On April 1, 2015, 3 Plaintiffs filed their FAC, alleging: (1) minimum wage violations; (2) pay stub 4 violations; (3) unfair competition; (4) failure to timely pay final wages; (5) failure to 5 provide lawful meal and rest periods; (6) failure to pay overtime and double-time 6 premium wages; and (7) civil penalties under the Private Attorneys General Act of 7 2004 (“PAGA”).2 8 removed the action to this Court. (Not. of Removal, ECF No. 1.) 9 10 11 12 13 (First Am. Compl. ¶¶ 14–77.) On April 3, 2015, Irwin timely On May 29, 2015, Irwin filed a Motion to Dismiss arguing that: (1) Plaintiffs’ claims are preempted under Section 301 of the LMRA; (2) Plaintiffs failed to exhaust their contractual remedies; (3) Plaintiffs are exempt from all California overtime requirements under Labor Code section 514 and California Wage Order No. 16; and (4) Plaintiffs’ reliance on state law is misplaced, as it fails to provide a remedy 14 15 under the Outer Continental Shelf Lands Act (“OCSLA”). (Mot. to Dismiss 4–19.) On November 12, 2015, the Court issued an Order Granting Irwin’s Motion to 16 17 Dismiss on the grounds that Plaintiffs’ claims are entirely preempted under Section 18 301 of the LMRA. (Order 5.) Because the Court dismissed the case on preemption 19 grounds, it did not reach Irwin’s other arguments, and instead ordered the parties 20 straight to arbitration. (Id.) Plaintiffs now move the Court under Rule 59(e) and Rule 21 52(b) to either alter or amend its judgment, or make additional findings based on what 22 Plaintiffs claim is a clear error of law. (Mot. 3.) That Motion is now before the court. 23 / / / 24 / / / 25 26 27 28 2 In the FAC, Plaintiffs added failure to provide lawful rest breaks to the fifth cause of action, and a seventh cause of action seeking civil penalties under PAGA. The original Complaint and FAC are otherwise identical. (ECF Nos. 1, 11.) 3 III. LEGAL STANDARD Under Rule 59(e), a party may move to alter or amend a judgment. Rule 52(b) 1 2 3 allows a court to amend its findings and alter judgment accordingly on a party’s 4 motion. The Central District of California Local Rules further elucidate the proper bases 5 6 for which a party may seek reconsideration: 7 12 (a) a material difference in fact or law from that presented to the Court before such decision that in the exercise of reasonable diligence could not have been known to the party moving for reconsideration at the time of such decision, or (b) the emergence of new material facts or a change of law occurring after the time of such decision, or (c) a manifest showing of a failure to consider material facts presented to the Court before such decision. 13 L.R. 7-18. Additionally, “[n]o motion for reconsideration shall in any manner repeat 14 any oral or written argument made in support of or in opposition to the 15 original motion.” Id. 8 9 10 11 16 17 18 19 20 21 22 23 IV. A. DISCUSSION Motion for Reconsideration Plaintiffs argue in their Rule 59(e) Motion that this Court failed to consider material facts in its Order Granting Irwin’s Motion to Dismiss. (Mot. 3.) In its Opposition, Irwin argues: (1) that the Court properly determined that Plaintiffs’ claims are entirely preempted by § 301 of the LMRA because they require interpretation of the applicable CBAs; and (2) that Plaintiffs improperly bring this Motion, in violation 24 of L.R. 7-18. (Opp’n to Mot. 3–8, ECF No. 31.) The Court agrees and finds that 25 Plaintiffs have not presented a valid basis for relief under Federal Rule of Civil 26 Procedure 59(e). 27 / / / 28 / / / 4 1 1. LMRA Preemption 2 In its Order Granting Irwin’s Motion to Dismiss, the Court dismissed each of 3 Plaintiffs’ claims because they all rely on the terms of the CBAs, thus compelling 4 mandatory federal preemption under the LMRA. (Order 5.) Plaintiffs argue here, as 5 they did in their Opposition to Irwin’s Motion to Dismiss, that § 301 does not extend 6 to the nonnegotiable rights conferred on individual employees as a matter of state law. 7 (Mot. 3.) Specifically, Plaintiffs state that the court failed to consider the material fact 8 that their state-law causes of action involve state-law rights, independent of the CBA. 9 (Id.) 10 11 The Court, having considered all relevant arguments in support of and in opposition to the Motion for Reconsideration and the Motion to Dismiss, disagrees with Plaintiffs’ characterization. 12 13 Section 301 of the LMRA gives federal courts exclusive jurisdiction to hear 14 “[s]uits for violation of contracts between an employer and a labor organization.” 29 15 U.S.C. § 185(a). See Franchise Tax Bd. of State of Cal. v. Const. Laborers Vacation 16 Trust for S. Cal., 463 U.S. 1, 23 (1983) (“The preemptive force of § 301 is so 17 powerful as to displace entirely any state cause of action ‘for violation of contracts 18 between an employer and a labor organization.’”). Section 301 “mandate[s] resort to 19 federal rules of law in order to ensure uniform interpretation of collective-bargaining 20 agreements, and thus to promote the peaceable, consistent resolution of labor- 21 22 management disputes.” Lingle v. Norge Div. of Magic Chef, Inc., 486 U.S. 399, 404 n.3 (1988). 23 24 The Court recognizes that “[d]espite the breadth of § 301 complete preemption, 25 ‘not every claim which requires a court to refer to the language of a labor- 26 management agreement is necessarily preempted.’” Balcorta v. Twentieth Century- 27 Fox Film Corp., 208 F.3d 1102, 1108 (9th Cir. 2000). However, “the Supreme Court 28 5 1 has distinguished claims that require interpretation or construction of a labor 2 agreement and those that require a court simply to ‘look at’ the agreement.” Id. 3 (citing Livadas v. Bradshaw, 512 U.S. 107, 123–26 (1994)). 4 interpret or construct a labor agreement, the rationale underlying § 301—promoting 5 the arbitration of labor contract disputes—mandates a finding of preemption. See 6 Balcorta, 208 F.3d at 1109; Livadas, 512 U.S. at 122; Allis-Chalmers Corp. v. Lueck, 7 471 U.S. 202, 210–11. When courts must 8 9 10 Neither “looking to” the CBA “merely to discern that none of its terms is reasonably in dispute,” nor “alleging a hypothetical connection between the claim and 11 the terms of the CBA” is enough to warrant preemption. Cramer v. Consolidated 12 Freightways, Inc., 255 F.3d 683, 691–92 (9th Cir. 2001) (en banc), cert. denied 534 13 U.S. 1078 (2002). Additionally, “[i]f the claim is plainly based on state law, [Section] 14 301 preemption is not mandated simply because the defendant refers to the CBA in 15 mounting a defense.” Id. at 681; see also Burnside v. Kiewit Pac. Corp., 491 F.3d 16 1053, 1060 (9th Cir. 2007) (“[R]eliance on the CBA as an aspect of a defense is not 17 enough to ‘inject[] a federal question into an action that asserts what is plainly a state- 18 law claim.’”). 19 20 Courts have not been entirely uniform in their understanding and application of 21 § 301 preemption. See Livadas, 512 U.S. at 124 n. 18. 22 has articulated interpretive principles that lend some guidance. If the plaintiff’s claim 23 cannot be resolved without interpreting the applicable CBA—as, for example, in 24 Allis–Chalmers, where the suit involved an employer’s alleged failure to comport with 25 its contractually established duties—it is preempted. See also Electrical Workers v. 26 Hechler, 481 U.S. 851, 861–62 (1987). Alternatively, if the claim may be litigated 27 without reference to the rights and duties established in a CBA—as, for example, in 28 6 However, the Supreme Court 1 Lingle, where the plaintiff was able to litigate her retaliation suit under state law 2 without reference to the CBA—it is not preempted. See also Livadas, 512 U.S. at 3 124–25. As such, the plaintiff’s claim is the touchstone for this analysis; the need to 4 interpret the CBA must inhere in the nature of the claim. 5 Here, Plaintiffs allege: 1) Minimum Wage Violations; 2) Pay Stub Violations; 6 3) Unfair Competition; 4) Failure to Timely Pay Final Wages; 5) Failure to Provide 7 Lawful Meal and Rest Periods; 6) Failure to Pay Overtime and Double-time Wages; 8 and 7) Civil Penalties Under PAGA. (First Am. Compl. ¶¶ 14–77.) Irwin argues that 9 these claims cannot be adjudicated without interpretation of numerous CBA 10 provisions that govern Plaintiffs’ employment, many of which specifically 11 12 13 contemplate and provide for pay beyond the typical 12-hour shifts. Specifically, the CBAs set forth the parties’ mutual agreement regarding all issues pertaining to employee wages and rest periods, including pay for overtime, 14 15 16 17 show-up time, excess hours, call-outs, and special shifts. (National Master Agreements, Ex. 1, pp. 7–12; Ex. 2, pp. 8–14.) The focus of Plaintiffs’ claims is that they are paid for only 12 hours per day while on a platform, but are entitled to be 18 compensated the state-mandated minimum for all hours spent on a platform (an 19 additional 12 hours), based on the allegation that they are under employer control 20 during those times. (First Am. Compl. ¶¶ 13, 33.) 21 As discussed above, we may look to a CBA to determine whether a plaintiff’s 22 claim necessarily implicates its terms without “interpreting” the agreement, as that 23 word is used in the context of § 301 preemption. See Milne Emps. Ass’n v. Sun 24 Carriers, Inc., 960 F.2d 1401, 1409–10 (9th Cir. 1992); see also Balcorta, 208 F.3d at 25 1108. In doing so, this Court found that the CBAs require more than merely a cursory 26 reading to determine whether they actually apply to Plaintiffs’ claims. Specifically, 27 the Court stated, “Since Plaintiffs dispute the applicability of the CBAs, the Court 28 7 1 cannot simply ‘look at’ CBA but must interpret and possibly construct the CBAs.” 2 (Order 5.) 3 In Coria v. Recology, Inc., 63 F. Supp. 3d 1093 (N.D. Cal. 2014), the Court 4 held that § 301 preempted the plaintiff’s claims under CLC § 510 and § 512(a) 5 because determining whether the CBA applied required interpreting the CBA itself. 6 Id. at 1096–1100. Here, Plaintiffs similarly contest the applicability of the CBAs, 7 contending that CBA1 only applies to “work locations located throughout California” 8 and CBA2 fails to “clarify whether the oil platforms worked on by Plaintiffs are 9 covered by this agreement.” There is a clear dispute between the parties as to whether 10 the CBAs apply to Plaintiffs’ claim. Additional interpretation is necessary; merely 11 12 13 looking to the CBAs will be insufficient to determine whether the provisions apply. As such, the Court’s reasoning stands. Plaintiffs do not present a material difference in fact or law from that which 14 15 16 17 was initially presented to the Court, do not present new material facts or a change of law after the Court’s decision, and do not present a manifest failure of the Court to consider material facts. Instead, in clear violation of Local Rule 7-18, Plaintiffs repeat 18 the same arguments they made in Opposition to Irwin’s Motion to Dismiss. As such, 19 Plaintiffs failed to present a valid basis for relief under Rule 59(e), as mere 20 disagreement with the outcome of the motion is not a basis for relief. 21 A motion under Rule 59(e) is an “extraordinary remedy, to be used sparingly in 22 the interests of finality and conservation of judicial resources.” Carroll v. Nakatani, 23 342 F.3d 934, 945 (9th Cir. 2003) (internal quotation marks omitted). “A motion for 24 reconsideration should not be granted, absent highly unusual circumstances.” Id. 25 Courts avoid considering Rule 59(e) motions where the grounds are restricted to 26 repetitive matters that were before the court on its prior consideration. Costello v. 27 28 8 1 U.S. Gov’t, 765 F. Supp. 1003, 1009 (C.D. Cal. 1991). To the extent Plaintiffs’ 2 Motion also requests relief under Rule 52(b), that request is similarly improper. 3 2. PAGA Claims 4 As the Court clearly stated in its Order, all of Plaintiff’s claims are dismissed, 5 but at Plaintiffs’ request, it will further elucidate as to why. PAGA allows private 6 litigants to recover penalties for wage and hour violations. See CLC § 2699(b). In 7 order to recover penalties under PAGA, however, a plaintiff must first establish a 8 violation of California labor laws. See CLC § 2699.5. Because the Court dismissed 9 Plaintiffs’ California Labor Code claims, Plaintiffs’ PAGA claim is also dismissed. 10 3. Arbitration 11 Where the Court did err, however, is in ordering the parties to arbitration. 12 Irwin’s Motion to Dismiss asked the Court: (1) to dismiss the FAC for failure to make 13 use of the grievance procedure established in the CBAs, or (2) to dismiss the FAC as 14 pre-empted by § 301. (Mot. to Dismiss 4–19.) The Court did the latter, dismissed all 15 claims, and ordered the parties to arbitration. (Order 5.) Because the Court dismissed 16 the complaint as pre-empted by § 301, and not for failure to make use of the grievance 17 procedure established in the CBAs, the Court never analyzed the CBAs’ arbitration 18 provision, and improperly ordered the parties to arbitration. 19 20 21 22 23 24 25 / / / 26 / / / 27 / / / 28 9 V. 1 CONCLUSION 2 Plaintiffs’ Motion for Reconsideration is DENIED as to the dismissal of all 3 claims and GRANTED as to the order for arbitration. Because federal courts lack 4 subject matter jurisdiction over disputes that are grounded in the CBA, the Court finds 5 that all of Plaintiffs’ claims were properly dismissed. 6 dismissed the complaint as pre-empted by § 301, and not for failure to make use of the 7 grievance procedure established in the CBAs, the Court improperly ordered the parties 8 to arbitration. The case is hereby dismissed, and the parties not ordered to arbitration. And, because the Court 9 10 IT IS SO ORDERED. 11 12 September 16, 2016 13 14 15 ____________________________________ OTIS D. WRIGHT, II UNITED STATES DISTRICT JUDGE 16 17 18 19 20 21 22 23 24 25 26 27 28 10

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