Garmaliel Aguirre et al v. Genesis Logistics et al

Filing 197

MINUTES (IN CHAMBERS): ORDER by Judge James V. Selna: granting 185 Motion for Permanent Injunction. For the foregoing reasons, the Court GRANTS Genesis Motion for a Permanent Injunction for claims that were accrued up to the Final Judgment date of January 14, 2014. (twdb)

UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL
Date

Case No.

SACV 12-00687-JVS (ANx)

Title

June 16, 2015

Garmaliel Aguirre, et al. v. Genesis Logistics, et al.

Present: The
Honorable

James V. Selna
Karla J. Tunis

Not Present

Deputy Clerk

Court Reporter

Attorneys Present for Plaintiffs:

Attorneys Present for Defendants:

Not Present

Not Present

Proceedings:

(IN CHAMBERS)
Order Granting Defendant’s Motion for Permanent Injunction

Defendant Genesis Logistics, Inc. (“Genesis”) moves to enjoin Plaintiffs Garmaliel
Aguirre, Luis Bernal, Kareem Craig, Greg Guerrero, Martha Hildebrand, Bret
Lambourne, Matthew Lambourne, Dan Le Boeuf, Carlos Martinez, Brian Mata, John M.
Ortega, Anthony Ortiz, Henry Rendon, Kenny Swails, and all other aggrieved employees
(collectively, “Plaintiffs”) and their counsel from continuing further proceedings against
Genesis in a California state court action captioned Kevan Elefsrud, et al. v. Genesis
Logistics, Inc., Case No. 30-2014-00712149-CU-OE-CXC (Super. Ct. Cal. Mar. 21,
2014) (hereinafter Elefsrud). (Mot. Permanent Inj., Docket No. 185.) Plaintiffs opposes
(Opp’n Mot. Permanent Inj., Docket No. 190), and Defendant has replied. (Reply Supp.
Mot. Permanent Inj., Docket No. 191.)
As set forth below, Genesis’ Motion for a Permanent Injunction is GRANTED.
I.

Background

This action arises out of a labor dispute between truck drivers and their employer
regarding the issue of alleged unpaid meal breaks, unpaid wages, inaccurate wage
statements, waiting time issues, and record-keeping issues. Plaintiffs filed a Complaint
against Genesis alleging violations of the Private Attorney General Act (“PAGA”) Cal.
Lab. Code § 2699, California’s Unfair Competition Law § 17200, et seq. (“UCL”), and
waiting time penalties under Cal. Lab. Code §§ 201-203. (Compl., Docket No. 1.) On
January 14, 2014, The Court issued a Final Judgment. (Final J., Docket No. 124.) The
Court found, inter alia, in favor of Genesis on Plaintiffs’ wage statement claims under the
UCL for lack of statutory standing but found in favor of Plaintiffs on their wage
CV-90 (06/04)

CIVIL MINUTES - GENERAL

Page 1 of 8

UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL
Case No.

SACV 12-00687-JVS (ANx)

Title

Date

June 16, 2015

Garmaliel Aguirre, et al. v. Genesis Logistics, et al.

statement claims under PAGA. (Final J., Docket No. 124.) The Court issued a PAGA
penalty of $500,000.00. (Id.)
On February 12, 2014, Plaintiffs appealed the Final Judgment to the United States
Court of Appeals for the Ninth Circuit. (Notice Appeal, Docket No. 137.) On March 21,
2014, additional Genesis employees represented by Plaintiffs’ counsel initiated the
Elefsrud action against Genesis for inaccurate wage statement claims under Cal. Lab.
Code § 226 (“§ 226”) and the UCL in California state court. On May 14, 2015, Genesis
moved for a permanent injunction enjoining further proceedings in Elefsrud.
On May 15, 2015, as a result of the filed appeal, the Court of Appeals remanded
the case for the limited purpose of enabling the Court to consider Plaintiffs’ Federal Rule
of Civil Procedure (“FRCP”) 60(b) motion. (Order re Appeal, Docket No. 188.)
II.

Legal Standards
1.

Jurisdiction Pending Appeal to Enjoin State Court Proceedings

Under 28 U.S.C. § 2283 (“§ 2283”), “a court of the United States may not grant an
injunction to stay proceedings in a state court except as expressly authorized by Act of
Congress, or where necessary in aid of its jurisdiction, or to protect or effectuate its
judgments.” 28 U.S.C. § 2283. The exception to the rule recognizes that “the court has
inherent power to preserve the status quo where, in its sound discretion, the court deems
the circumstances so justify.” McClatchy Newspapers v. Cent. Valley Typographical
Union No. 46, Int’l Typographical Union, 686 F.2d 731, 734 (9th Cir. 1982). This
exception “has been codified in Rule 62(c) of the FRCP, which allows a district court to
‘suspend, modify, restore, or grant an injunction during the pendency of the appeal upon
such terms as to bond or otherwise as it considers proper for the security of the rights of
the adverse party.’” Natural Res. Def. Council, Inc. v. Sw. Marine Inc., 242 F.3d 1163,
1166 (9th Cir. 2001) (quoting Fed. R. Civ. P. 62(c)). The Ninth Circuit has warned that
the rule “does not restore jurisdiction to the district court to adjudicate anew the merits of
the case” and that any action taken pursuant to it “may not materially alter the status of
the case on appeal.” Id. (citations and quotation marks omitted). See also McClatchy, 686
F.2d at 735.
2.
CV-90 (06/04)

Enjoining State Proceedings Pursuant to the Re-litigation Exception
CIVIL MINUTES - GENERAL

Page 2 of 8

UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL
Case No.

SACV 12-00687-JVS (ANx)

Title

Date

June 16, 2015

Garmaliel Aguirre, et al. v. Genesis Logistics, et al.
Under § 2283

The re-litigation exception allows a federal court to enjoin state court proceedings
in order to “to protect or effectuate its judgments.” 28 U.S.C. § 2283. This exception’s
purpose is to “permit a federal court to prevent state
litigation of an issue that previously was presented to and decided by the federal
court.” Chick Kam Choo v. Exxon Corp., 486 U.S. 140, 147 (1988). The re-litigation
exception “is founded in the well-recognized concepts of res judicata
and collateral estoppel” and “rests on the idea that federal courts should not be
forced to rely on state court application of res judicata or estoppel principles to
protect federal court judgments and decrees.” Id.; Thomas v. Powell, 247 F.3d 260, 262
(D.C. Cir. 2001). The Ninth Circuit adopts the interpretation that § 2283 is not limited to
instances where the claim was “actually litigated” in a prior court proceeding; “to read
Choo as the other Circuits have, however, would in essence be to read res judicata
entirely out of section 2283.” Western Sys. Inc. V. Ulloa, 958 F.2d 864, 870 (1992).
Instead, the “test for whether a subsequent action can be barred is whether it arises from
the same ‘transaction, or series of transactions’ as the original action.” Id. at 871.
In determining whether the injunction in the instant case falls within the scope of
the re-litigation exception, one must “examine whether there could be an actual conflict
between the subsequent state court judgment and the prior federal judgment. If such a
conflict is possible, then the district court may properly enjoin the state court
proceedings.” Blalock Eddy Ranch v. MCI Telecomms. Corp., 982 F.2d 371, 375 (9th
Cir. 1992).
III.

Discussion
A.

Jurisdiction Pending Appeal to Enjoin State Court Proceedings

Genesis contends that the Court has jurisdiction to grant the Motion because the
Court retains jurisdiction during the pendency of an appeal to preserve the status quo.
(Reply Supp. Mot. Permanent Inj., p. 2.) Plaintiffs argue that the Ninth Circuit issued a
limited remand that only allowed the Court to consider Plaintiffs’ FRCP 60(b) motion.
(Opp’n Mot. Permanent Inj., p. 3-4.)
The Court agrees with Genesis that the Court has the power to entertain this
CV-90 (06/04)

CIVIL MINUTES - GENERAL

Page 3 of 8

UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL
Case No.

SACV 12-00687-JVS (ANx)

Title

Date

June 16, 2015

Garmaliel Aguirre, et al. v. Genesis Logistics, et al.

motion. The Court’s power to act is not predicated on the Ninth Circuit’s limited remand.
Enjoining a state action pursuant to the re-litigation exception is allowed if “the
principles underlying Rule 62 can be used as the jurisdictional vessel for a § 2283 motion
when the judgment of the court and the positions in which the court has placed the parties
are in danger of being negated during the pendency and in spite of an appeal of the
same.” Hayward v. Clay, 456 F. Supp. 1156, 1160 (D.S.C. 1977).
Here, the principles of preserving the status quo under Rule 62 allows the Court to
enjoin the state court proceedings because it has the “practical effect of preserving the
respective positions in which the court has placed the parties vis-a-vis each other” and
“effectuates the policy of ending litigation.” Hayward 456 F. Supp. at 1160. More
broadly, however, the Court has the inherent power to preserve and uphold the integrity
of its judgment because it preserves the status quo of its earlier decision in Aguirre. Also,
the decision to hear and decide the Motion for a Permanent Injunction does not materially
alter the status of the case on appeal. Therefore, the Court has the jurisdiction to enjoin
the state court proceedings even after the Court of Appeals issued a limited remand
because the circumstances justify its use of its inherent power to preserve its previous
judgments.
B.

Enjoining State Proceedings Pursuant to the Re-litigation Exception
Under § 2283

Genesis argues that the Court already remedied Elefsrud’s § 226 inaccurate wage
statement claims under PAGA and found the UCL claims lacked standing to assert. (Mot.
Permanent Inj., p.10.) Plaintiffs contend that Elefsrud should not be enjoined because
Elefsrud’s § 226 inaccurate wage statement claims were not pleaded in Aguirre and the
UCL claims were not adjudicated on the merits. (Opp’n Mot. Permanent Inj., p.4-5.) In
order to determine whether there is actual conflict between the subsequent state court
judgment and the Court’s judgment, the Court looks to see whether the (1) claims in the
Elefsrud proceeding and (2) the identity of the parties are the same in Aguirre. See Chick
Kam Choo, 486 U.S. at 148 (1988).
1.

Same Claims

Plaintiffs argue that Elefstrud’s claims are not the same as Aguirre’s claims
because (a) Elefsrud’s § 226 inaccurate wage statement claims were not pleaded in
CV-90 (06/04)

CIVIL MINUTES - GENERAL

Page 4 of 8

UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL
Case No.

SACV 12-00687-JVS (ANx)

Title

Date

June 16, 2015

Garmaliel Aguirre, et al. v. Genesis Logistics, et al.

Aguirre and (b) the UCL claims were not adjudicated on the merits. (Opp’n Mot.
Permanent Inj., p.4-5.)
a.

Elefsrud’s § 226 Claims

Plaintiffs contend that the § 226 claims in Elefsrud are not the same as the PAGA
claims in Aguirre, because the § 226 claims were not pleaded in Aguirre. Plaintiffs’
position may be accurate, but it is not controlling. “‘One injury gives rise to only one
claim for relief.’ . . . ‘The violation of one primary right constitutes a single cause of
action. . . .’” Villacres v. ABM Indus., Inc., 189 Cal. App. 4th 562, 577 (2010) (quoting
Crowley v. Katleman, 8 Cal. 4th 666, 681-82 (1994)). There is no authority that “would
permit double recovery of essentially the same penalties.” Li v. A Perfect Day Franchise,
Inc., No. 5:10-CV-01189-LHK, 2012 WL 2236752, at *17 (N.D. Cal. June 15, 2012)
(explaining that plaintiffs could not receive PAGA penalties after they were awarded §
226 penalties).
Here, the Court declined to award penalties under § 226 and PAGA because it
recognized that penalties under § 226 and PAGA were duplicative. (Order re Remaining
Claims, Docket No. 119.) In Li, the court did not award PAGA penalties along with §
226 penalties because the recovery would have permitted double recovery. Here, the
Court enjoins the § 226 claims in Elefsrud because it leads to double recovery of the
PAGA penalty issued in Aguirre. There is only a single cause of action because the only
primary right violated was the accurate wage statements which was already remedied by
the PAGA penalty.
Furthermore, “if the matter raised in the subsequent suit was within the scope of
the prior action, related to the subject matter and relevant to the issues, so that it could
have been raised, the judgment is conclusive on it despite the fact that it was not in fact
expressly pleaded or otherwise urged.” Villacres, 189 Cal. App. 4th at 583-84. Claims
that could have been raised in the prior action are barred in subsequent actions for
purposes of res judicata. Id. at 584; Western Sys. Inc., 958 F.2d at 870-71. Here, the §
226 claims could have been brought in Aguirre because Plaintiffs’ own expert report
identified and calculated damages under § 226 and PAGA. (Supp. Disclosure, Docket
No. 68.) Aguirre’s PAGA claims were also predicated on § 226. (Order re Summ. J., p.
15-16, Docket No. 93.) Contrary to Plaintiffs’ vigorous argument at the hearing, Villacres
not only does not support their position, it directly contradicts it. That Villacres was a
CV-90 (06/04)

CIVIL MINUTES - GENERAL

Page 5 of 8

UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL
Case No.

SACV 12-00687-JVS (ANx)

Title

Date

June 16, 2015

Garmaliel Aguirre, et al. v. Genesis Logistics, et al.

class action is of no moment.
Plaintiffs rely upon Iskanian v. CLS Transp. Los Angeles LLC for the proposition
that they can bring different lawsuits to separately pursue their claims under § 226 and
PAGA because adjudication of PAGA claims is not the same as the adjudication of Labor
Code claims. 59 Cal. 4th 348, 361 (2014). However, Iskanian did not turn on res judicata
or the re-litigation exception injunction. Also the claims in Iskanian were not adjudicated
in a prior federal court judgment. The Iskanian case was related to determining the
appropriate forum for claims, none of which had been asserted in prior actions.
Therefore, although the § 226 claims were not pleaded in Aguirre, the duplicative
recovery of Elefsrud’s § 226 claims allows the Court to enjoin the state court proceeding
because the inaccurate wage statement claims gives rise to only one cause of action.
Additionally, the § 226 claims in Elefsrud are barred because they are related to the
PAGA claims and could have been raised in Aguirre.
b.

Elefsrud’s UCL Claims

Plaintiffs contend that the UCL claims were not adjudicated on the merits. (Opp’n
Mot. Permanent Inj., p.4-5.) The Court disagrees. Although Nichols v. Canoga Industries
correctly states that a dismissal for a lack of jurisdiction is not an adjudication on the
merits, here, the UCL claims were dismissed for lack of statutory standing, not for lack of
jurisdiction. 83 Cal. App. 3d 956 (1978); (Order re Summ. J., p. 16.) Dismissal based on
lack of statutory standing is adjudication on the merits. Therefore the UCL claims can be
enjoined because they have been adjudicated on the merits in Aguirre.
In oral argument, Plaintiffs cited to Media Technologies Licensing, LLC. v. Upper
Deck Co. for the proposition that “standing is jurisdictional issue [and] a lack of standing
precludes a ruling on the merits.” 334 F.3d 1366, 1370 (Fed. Cir. 2003). However, Upper
Deck is not an UCL, and dealt only with Article III standing. Lack of UCL standing is
“properly viewed as a dismissal for failure to state a claim . . .[and] therefore viewed
properly under Federal Rule of Civil Procedure 12(b)(6) rather than 12(b)(1).” Thomas v.
Sprint Solutions, Inc., No. C08-5119 TEH, 2010 WL 1263189, at *4 (N.D. Cal. Mar. 30,
2010) (citing In re Tobacco II Cases, 46 Cal. 4th 298, 326 (2009)). The Supreme Court
precedent confirms that a dismissal for failure to state a claim under Rule 12(b)(6) is a
“judgment on the merits” to which res judicata applies. Federated Dep't Stores, Inc. v.
CV-90 (06/04)

CIVIL MINUTES - GENERAL

Page 6 of 8

UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL
Case No.

SACV 12-00687-JVS (ANx)

Title

Date

June 16, 2015

Garmaliel Aguirre, et al. v. Genesis Logistics, et al.

Moitie, 452 U.S. 394, 399 n.3 (1981); Stewart v. U.S. Bancorp, 297 F.3d 953, 957 (9th
Cir. 2002).
Therefore, the claims brought in Elefsrud fall under the re-litigation exception
because (1) Elefsrud’s inaccurate wage statement claims under § 226 were remedied by
PAGA and could have been brought in Aguirre, (2) the UCL claims are the same because
UCL claims were adjudicated on the merits of the claim, and (3) the parties are the same
in both cases.

2.

Identity of Parties

Genesis maintains that the parties in Elefsrud are the same parties that were
compensated in this action. (Mot. Permanent Inj., p.5-7.) Plaintiffs contend that there was
no prior class action with overlapping plaintiffs because the Court did not certify the
PAGA action class. (Opp’n Mot. Permanent Inj, p.8-9.) The Court agrees with Genesis.
The availability of a § 2283 injunction against those who were not parties in the original
federal action has been long standing law; injunctions may be granted for “matter already
partly litigated in the same court, or which is an addition to a former litigation in the same
court, by . . . . representatives standing in the same interest, or to obtain and secure the
fruits, benefits, and advantages of the proceedings and judgment in a former suit in the
same court. . . .” Julian v. Cent. Trust Co., 193 U.S. 93, 113 (U.S. 1904); see Hayward,
456 F. Supp. at 1162; Swann v. Charlotte-Mecklenburg Bd. of Ed., 501 F.2d 383, 383
(4th Cir. 1974); In re Itel Sec. Litig., 596 F. Supp. 226, 232 (N.D. Cal. 1984).
Here, even though the PAGA claims were not class certified, the Court may enjoin
Plaintiffs’ inaccurate wage statement claims and the UCL claims brought in Elefsrud
because the plaintiffs’ in Elefsrud are representatives standing in the same interest in
Aguirre who are attempting to secure the benefits of a judgment in a former suit.
Moreover, the plaintiffs in Elefsrud are the same as the Plaintiffs in Aguirre. (Reply
Supp. Mot. Permanent Inj., p. 4-5.)
Plaintiffs counter with the contention that under Arias v. Superior Court, they can
recover § 226 penalties in Elefsrud because the Arias court found the collateral estoppel
effect still allowed the new plaintiffs to “obtain remedies other than civil penalties for the
same labor code violation.” 46 Cal. 4th 969, 987 (2009); (Opp’n Mot. Permanent Inj., p.
CV-90 (06/04)

CIVIL MINUTES - GENERAL

Page 7 of 8

UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL
Date

Case No.

SACV 12-00687-JVS (ANx)

Title

June 16, 2015

Garmaliel Aguirre, et al. v. Genesis Logistics, et al.

10-13.) However, the Arias court stated that the subsequent case must involve different
plaintiffs than the prior case in order to avoid collateral estoppel. Arias, 46 Cal. 4th at
987. Here, Arias does not apply because the plaintiffs in Elefsrud are the same as the
Plaintiffs in Aguirre. (Reply Supp. Mot. Permanent Inj., p. 4-5.)
Both conditions for issuing an injunction under § 2283 have been met. At oral
argument, Plaintiffs’ counsel noted that Plaintiffs were pursuing claims that occurred
after the Final Judgment date of January 14, 2014. Accordingly, the Court limits the
scope of the injunction to claims that were accrued up to January 14, 2014.

C.

Violations of 28 U.S.C. § 1927

In their Opposition, Plaintiffs contend that Genesis violated 28 U.S.C. § 1927 (“§
1927”). (Opp’n Mot. Permanent Inj., p. 12.) Under 28 U.S.C. § 1927, “[a]ny attorney . . .
who so multiplies the proceedings in any case unreasonably and vexatiously may be
required by the court to satisfy personally the excess costs, expenses, and attorneys’ fees
reasonably incurred because of such conduct.”
An opposition is not a proper vehicle for requesting such relief. In any event, there
is no evidence that Genesis acted with recklessness or bad faith. Genesis withheld action
only to make sure the plaintiffs in both cases were the same before filing the Motion.
(Reply Supp. Mot. Permanent Inj., p.13.)
IV.

Conclusion

For the foregoing reasons, the Court GRANTS Genesis’ Motion for a Permanent
Injunction for claims that were accrued up to the Final Judgment date of January 14,
2014.
IT IS SO ORDERED.
:
Initials of Preparer

CV-90 (06/04)

CIVIL MINUTES - GENERAL

00

kjt

Page 8 of 8