Guerrero v. Halliburton Energy Services, Inc. et al

Filing 20

MEMORANDUM DECISION and ORDER RE Defendant's #13 Motion to Dismiss and/or Strike signed by Chief Judge Lawrence J. O'Neill on 2/3/2017. (Sant Agata, S)

1
2
3
4
5
6
7
8

UNITED STATES DISTRICT COURT

9
EASTERN DISTRICT OF CALIFORNIA

10
11
12
13

LUIS GUERRERO,
on behalf of himself, all others similarly
situated, and on behalf of the general public

14
15
16
17
18

Plaintiffs,
v.

Case No. 1:16-CV-1300-LJO-JLT

MEMORANDUM DECISION AND ORDER
RE DEFENDANT’S MOTION TO DISMISS
AND/OR STRIKE

HALLIBURTON ENERGY SERVICES,
INC.; and DOES 1-100,
Defendants.

(ECF No. 13)

19
20
21

This is a putative class action lawsuit brought by Plaintiff Luis Guerrero, who was formerly

22

employed by Defendant Halliburton Energy Services, Inc. as a “a non-exempt truck worker,

23

industrial worker, industrial truck driver, industrial vehicle driver, industrial worker and/or any

24

similar job designation,” on behalf of himself and similarly situated individuals, against Defendant

25

and Does 1-100, inclusive (collectively, “Defendants”). ECF No. 1-1 (“Complaint”). Plaintiff alleges

26

that Defendants violated provisions of the California Labor Code (“CLC”), Business and Professions

27

Code (“CBPC”), and several of the Industrial Welfare Commission’s Wage Orders for at least four

28

years prior to the 2016 filing of this action and continuing to the present. Id.

Defendant first moved to dismiss and/or strike the Complaint on September 9, 2016. ECF

1
2

No. 4. The Court granted in part and denied in part Defendant’s motion, and granted Plaintiff leave

3

to amend. ECF No. 10.

4

Plaintiff filed his First Amended Complaint (“FAC”) on November 22, 2016, setting forth

5

the following causes of action: (1) failure to pay wages owed for all hours worked in violation of

6

CLC § 1197.1, items 1 and 4(b) of Industrial Wage Commission Wage Order (“Wage Order”) 9-

7

2001 (codified at 8 C.C.R. § 11090) and the California Supreme Court’s decision in Morillion v.

8

Royal Packing Co. (2000), 22 Cal. 4th 575; (2) failure to pay overtime wages when employees

9

worked over eight hours per day or forty hours per week, in violation of item 3(A) of Wage Order

10

9-2001; (3) failure to provide meal periods or compensation in lieu thereof, in violation of CLC §§

11

226.7 & 512; (4) failure to authorize and permit rest periods, in violation of CLC § 226.7, Wage

12

Order Nos. 9-1998, 9-2000, 9-2001(12); (5) failure to pay all wages due at the time of termination

13

from employment, in violation of CLC §§ 201-203; and (6) “violation of unfair competition law,”

14

in violation of CBPC § 17200, et seq., commonly known as California’s Unfair Competition Law

15

(“UCL”). ECF No. 12 ¶¶ 85-172.

16

Defendant now moves to dismiss Plaintiff’s second, third, fourth, and sixth causes of action

17

for failure to state a claim pursuant to Federal Rule of Civil Procedure 12(b)(6)1, and to strike some

18

of the prayers for relief in the FAC pursuant to Rule 12(f).2 ECF No. 13. Plaintiff filed his

19

opposition (ECF No. 15) and Defendant replied (ECF No. 17). This matter is appropriate for

20

resolution without oral argument. See E.D. Cal. L.R. 230(g).
Having reviewed the record and the parties’ briefing in light of the relevant law, the Court

21
22

GRANTS IN PART and DENIES IN PART Defendant’s motion.

23

//

24

//

25
26

1

All further references to any “Rule” are to the Federal Rules of Civil Procedure.

2

27
28

Defendant has additionally moved to strike Plaintiff’s allegations regarding Defendant’s failure to provide accurate
itemized wages statements in violation of CLC § 226 and the Wage Order. ECF No. 13 at 25-26. In response, Plaintiff
notes that the inclusion of these allegations was a drafting mistake and requests leave to amend. ECF No. 15 at 19-20.
Because the Court will grant Plaintiff one last opportunity to amend, Plaintiff’s request is granted and Defendant’s motion
to strike is denied without prejudice.

2

LEGAL STANDARD

1
2

I.

Rule 12(b)(6)

3

A motion to dismiss pursuant to Rule 12(b)(6) is a challenge to the sufficiency of the

4

allegations set forth in the complaint. Dismissal under Rule 12(b)(6) is proper where there is either

5

a “lack of a cognizable legal theory” or “the absence of sufficient facts alleged under a cognizable

6

legal theory.” Balisteri v. Pacifica Police Dept., 901 F.2d 696, 699 (9th Cir. 1990). In considering a

7

motion to dismiss for failure to state a claim, the court generally accepts as true the allegations in

8

the complaint, construes the pleading in the light most favorable to the party opposing the motion,

9

and resolves all doubts in the pleader’s favor. Lazy Y. Ranch LTD v. Behrens, 546 F.3d 580, 588

10
11

(9th Cir. 2008).
To survive a 12(b)(6) motion to dismiss, the plaintiff must allege “enough facts to state a

12

claim to relief that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007).

13

“A claim has facial plausibility when the Plaintiff pleads factual content that allows the court to

14

draw the reasonable inference that the defendant is liable for the misconduct alleged.” Ashcroft v.

15

Iqbal, 556 U.S. 662, 678 (2009). “The plausibility standard is not akin to a ‘probability

16

requirement,’ but it asks for more than a sheer possibility that a defendant has acted unlawfully.”

17

Id. (quoting Twombly, 550 U.S. at 556). “While a complaint attacked by a Rule 12(b)(6) motion to

18

dismiss does not need detailed factual allegations, a plaintiff’s obligation to provide the ‘grounds’

19

of his ‘entitlement to relief’ requires more than labels and conclusions.” Twombly, 550 U.S. at 555

20

(internal citations omitted). Thus, “bare assertions . . . amount[ing] to nothing more than a

21

‘formulaic recitation of the elements’ . . . are not entitled to be assumed true.” Iqbal, 556 U.S. at

22

681. “[T]o be entitled to the presumption of truth, allegations in a complaint . . . must contain

23

sufficient allegations of underlying facts to give fair notice and to enable the opposing party to

24

defend itself effectively.” Starr v. Baca, 652 F.3d 1202, 1216 (9th Cir. 2011). In practice, “a

25

complaint . . . must contain either direct or inferential allegations respecting all the material

26

elements necessary to sustain recovery under some viable legal theory.” Twombly, 550 U.S. at 562.

27

To the extent that the pleadings can be cured by the allegation of additional facts, a plaintiff should

28
3

1

be afforded leave to amend. Cook, Perkiss and Liehe, Inc. v. Northern Cal. Collection Serv., Inc.,

2

911 F.2d 242, 247 (9th Cir. 1990) (citations omitted).
Finally, in ruling on a Rule 12(b)(6) motion, “[a] court may take judicial notice of

3
4

[undisputed] matters of public record’ without converting a motion to dismiss into a motion for

5

summary judgment.” Lee v. City of Los Angeles, 250 F.3d 668, 689 (9th Cir. 2001); see also

6

Tellabs, Inc. v. Makor Issues & Rights, Ltd., 551 U.S. 308, 322 (2007) (“courts must consider the

7

complaint in its entirety, as well as other sources courts ordinarily examine when ruling on Rule

8

12(b)(6) motions to dismiss, in particular, documents incorporated into the complaint by reference,

9

and matters of which a court may take judicial notice.”). Moreover, the court is permitted to

10

consider matters that are proper subjects of judicial notice under Rule 201 of the Federal Rules of

11

Evidence: facts that are not subject to reasonable dispute because they are “generally known within

12

the trial court’s territorial jurisdiction” or “can be accurately and readily determined from sources

13

whose accuracy cannot reasonably be questioned.” See Lee, 250 F.3d at 668.

14

II.

Rule 12(f)

15

Federal Rule of Civil Procedure 12(f) permits the Court to “strike from a pleading an

16

insufficient defense or any redundant, immaterial, impertinent, or scandalous matter.” Fed. R. Civ.

17

P. 12(f). “Redundant allegations are those that are needlessly repetitive or wholly foreign to the

18

issues involved in the action.” Cal. Dep’t of Toxic Substances Control v. Alco Pacific, Inc., 217 F.

19

Supp. 2d 1028, 1033 (C.D. Cal. 2002) (internal quotation marks and citations omitted). Immaterial

20

matter is “that which has no essential or important relationship to the claim for relief or the

21

defenses being pleaded.” Fantasy, Inc. v. Fogerty, 984 F.2d 1524, 1527 (9th Cir. 1993) (internal

22

quotation marks and citations omitted), rev'd on other grounds, 510 U.S. 517 (1994). Impertinent

23

matter “consists of statements that do not pertain, and are not necessary, to the issues in question.”

24

Id. Scandalous matter is that which “improperly casts a derogatory light on someone, most typically

25

on a party to the action.” Germaine Music v. Universal Songs of Polygram, 275 F. Supp. 2d 1288,

26

1300 (D. Nev. 2003) (internal quotation marks and citations omitted).

27
28

The function of a Rule 12(f) motion is “to avoid the expenditure of time and money that
must arise from litigating spurious issues by dispensing with those issues prior to trial.”
4

1

Whittlestone, Inc. v. Handi-Craft Co., 618 F.3d 970, 973 (9th Cir. 2010). “Motions to strike are

2

generally regarded with disfavor because of the limited importance of pleading in federal practice,

3

and because they are often used as a delaying tactic.” Alco Pacific, 217 F. Supp. 2d at 1033. “Given

4

their disfavored status, courts often require a showing of prejudice by the moving party before

5

granting the requested relief.” Id. (internal quotation marks and citations omitted). “The possibility

6

that issues will be unnecessarily complicated or that superfluous pleadings will cause the trier of

7

fact to draw ‘unwarranted’ inferences at trial is the type of prejudice that is sufficient to support the

8

granting of a motion to strike.” Id. (citing Fogerty, 984 F.2d at 1528).
DISCUSSION

9
10

I.

Request for Judicial Notice
Both parties have requested that the Court take judicial notice of several documents, almost

11
12

all of which are federal court pleadings and orders, and one of which is a copy of an employment

13

offer letter sent by Defendant to Plaintiff. See ECF No. 13 at 113; ECF No.16; ECF No. 18 at 7.

14

Because the federal court pleadings and orders are undisputed matters of public record and/or

15

proper subjects of judicial notice under Federal Rule of Evidence 201, and neither party contests the

16

other’s submissions, the Court GRANTS the parties’ requests as the court pleadings and orders.

17

However, because the employment letter is not a proper subject of judicial notice, the Court

18

DENIES the request as to Defendant’s Supplemental Request for Judicial Notice, Exhibit B.

19

II.

Sufficiency of Complaint

20

A.

Failure to Pay Overtime Wages

21

Plaintiff alleges that Defendants failed to pay overtime when he and putative class members

22

(“PCMs”) worked over eight hours per day or forty hours per week. Specifically, he alleges that he

23

worked over forty hours and was not paid overtime during the following weeks: June 3, 2013; June

24

10, 2013; June 17, 2013; June 24, 2013; and January 27, 2014, and that he worked over eight hours

25

on November 18, 2013. FAC ¶ 99-101. Plaintiff and PCMs worked overtime because Defendants

26

“assigned too much work which could not be completed within an 8 hour shift” and because it was

27
28

3

Pincites refer to CM/ECF pagination located at the top of each page.

5

1

“part of the job.” Id. ¶ 102. Furthermore, Plaintiff alleges that Defendants employed a computer

2

program to edit the actual hours reported by Plaintiff and PCMs that deducted hours that Plaintiff

3

and PCMs actually worked. Id. ¶ 104.

4

Defendant seeks dismissal of this claim on the grounds that the Wage Order exempts

5

Plaintiff and PCMs from California’s overtime laws because Plaintiff’s and PCMs’ hours are

6

regulated by the federal Department of Transportation (“DOT”). ECF No. 13 at 17. Defendant

7

argues that because the FAC alleges that Defendant owns and operates trucks, employs truck

8

drivers, and that Plaintiff was employed by Defendant as an hourly truck worker or driver, that

9

Plaintiff’s hours of service are therefore governed by the DOT’s regulations and are exempt from

10

California’s overtime laws. Id.
Plaintiff contends that his overtime claim is proper because the assertion of an exemption

11
12

from California overtime laws is an affirmative defense that Defendant bears the burden of

13

demonstrating. ECF No. 15 at 10-11. Specifically, he notes that Defendant has failed to make the

14

requisite showing that the DOT exemption applies to Plaintiff. Id.
The Court agrees with Plaintiff on this issue. While it is true that there are exemptions from

15
16

California’s overtime laws, see CLC § 515(a), the “[a]pplication of the exemption is ‘limited to

17

those employees plainly and unmistakably within their terms.’” Korte v. Dollar Tree Stores, Inc.,

18

No. CIV. S-12-541 LKK/EFB, 2013 WL 2604472, at *5 (E.D. Cal. June 11, 2013) (citing

19

Nordquist v. McGraw-Hill Broad. Co., 32 Cal. App. 4th 555 (1995)). Whether an exemption

20

applies or not can be a fact-intensive inquiry. See, e.g., Villalpando v. Exel Direct Inc., Case No.

21

12-cv-04137-JCS, 2015 WL 5179486, at *29-33 (N.D. Cal. Sept. 3, 2015). Contrary to Defendant’s

22

assertion that Plaintiff did not dispute that the DOT exemption applies to him, the FAC specifically

23

alleges that Plaintiff was employed by Defendant as a “non-exempt [4] truck worker, industrial

24

truck worker, industrial truck driver, industrial vehicle driver, industrial worker and/or any other

25

similar job designation.” FAC ¶ 27. At this stage of proceedings, Plaintiff’s allegation that he is not

26

4

27
28

For this reason, Plaintiff’s case is distinguishable from the cases cited by Defendant. In Brown v. Wal-Mart Stores, No.
C. 08-5221 SI, 2013 WL 1701581 at *7 (N.D. Cal. Apr. 18, 2013), the court granted the defendant’s motion to dismiss
because the plaintiffs acknowledged that they were exempted from overtime laws either by the DOT or a California
regulation, yet still alleged violations on behalf of some plaintiffs and class members “who are not exempt” by these laws.
Similarly, in Collins v. Overnite Transp. Co., 105 Cal. App. 4th. 171, 180 (2003), the employees did not contest that they
were subject to the DOT exemption.

6

1

covered by the DOT exemption is sufficient to survive Defendant’s motion to dismiss, which the

2

Court DENIES as to this claim.

3

B. Failure to Provide Meal and Rest Periods

4

Plaintiff’s third and fourth causes of action pertain to Defendants’ alleged failure to provide

5

the meal and rest periods required by CLC §§ 226.7, 512(a) and IWC Wage Order 9-2001 § 3.

6

Plaintiff alleges that Defendants failed to provide the requisite 30-minute uninterrupted meal

7

periods to non-exempt employees who worked for work periods of more than 5 consecutive hours,

8

and 10-minute rest periods for 4-hour work periods, and that Plaintiff and the other class members

9

were required to work continuously without being provided either the meal or rest periods. FAC ¶¶

10

114, 130. In the alternative, Plaintiff alleges that Defendants’ “business model was such that Non-

11

Exempt Employees were assigned too much work that could not reasonably completed in their

12

assigned shift work, and/or role” and resulted in Plaintiff and PCMs were routinely forced to work

13

through their rest periods for fear of losing their jobs. Id. ¶¶ 116, 117, 132, 135, 138. Defendants

14

“valued productivity over providing meal periods, and because of this, meal periods were not

15

priorities to [Defendants],” and Defendants “had no policy that advised Plaintiff and those similarly

16

situated of their right to take a second meal period.” Id. ¶¶ 111, 114, 123-125. Furthermore,

17

Plaintiff alleges that Defendant did not provide a schedule or designate times when meal or rest

18

periods were to be taken. Id. ¶ ¶ 112, 134. As a result, Plaintiff and the class members were

19

“routinely and regularly being forced to eat their meals while driving and/or working their routes,”

20

and “felt that breaking to exercise their rights to take meal periods would sacrifice their jobs.” Id. ¶¶

21

105, 111. Plaintiff alleges that he did not receive the requisite meal and rest periods on or about

22

July 28, 2013, November 2, 2013, November 11, 2013, and November 13, 2013.5 Id. ¶¶ 111, 137.

23

In Brinker Restaurant Corp. v. Superior Court, the California Supreme Court provided the

24

following guidance as to an employer’s obligations under CLC § 512 and the Wage Order to

25

provide meal breaks:

26

5

27
28

In its Reply, Defendant points to an employment offer letter from Defendant to Plaintiff, dated March 19, 2014,
indicating that Plaintiff’s anticipated start date as an Operator Assistant was May 5, 2014, and argues that the dates on
which Plaintiff has alleged he was denied meal and rest breaks pre-date his employment start date. ECF No. 18 at 2; ECF
No. 18, Ex. 2. The Court declined to take judicial notice of this document and therefore will not consider it in deciding
this motion.

7

1

Proof an employer had knowledge of employees working through meal periods will not
alone subject the employer to liability for premium pay; employees cannot manipulate the
flexibility granted them by employers to use their breaks as they see fit to generate such
liability. On the other hand, an employer may not undermine a formal policy of providing
meal breaks by pressuring employees to perform their duties in ways that omit breaks …
The wage orders and governing statute do not countenance an employer’s exerting coercion
against the taking of, creating incentives to forgo, or otherwise encouraging the skipping of
legally protected breaks.

2
3
4
5
6

To summarize: An employer’s duty with respect to meal breaks under both section 512,
subdivision (a) and Wage Order No. 56 is an obligation to provide a meal period to its
employees. The employer satisfies this obligation if it relieves its employees of all duty,
relinquishes control over their activities and permits them a reasonable opportunity to
take an uninterrupted 30-minute break, and does not impede or discourage them from
doing so. What will suffice may vary from industry to industry, and we cannot in the
context of this class certification proceeding delineate the full range of approaches that in
each instance might be sufficient to satisfy the law.

7
8
9
10
11

On the other hand, the employer is not obligated to police meal breaks and ensure no work
thereafter is performed. Bona fide relief from duty and the relinquishing of control satisfies
the employer’s obligations, and work by a relieved employee during a meal break does not
thereby place the employer in violation of its obligations and create liability for premium
pay under Wage Order No. 5, subdivision 11(B) and Labor Code section 226.7, subdivision
(b).

12
13
14
15
16

53 Cal. 4th 1004, 1040-41 (2012) (emphasis added).
Defendant seeks dismissal of Plaintiff’s meal and rest period claims on account of these

17
18

claims lacking the necessary factual support, specifically noting that Plaintiff’s subjective

19

perceptions of being “pressured” are insufficient to make plausible the allegations that Defendant

20

prevented Plaintiff and PCMs from taking meal and rest breaks, as contemplated by Brinker. ECF

21

No. 13 at 18, 23 (citing Brown v. Wal-Mart Stores, Inc., No. C 08-5221 SI, 2013 WL 1701581, at

22

*5 (N.D. Cal. Apr. 18, 2013); Gonzalez v. Fallanghina, No. 16-cv-01832-MEJ, 2016 WL 3951655,

23

at *6 (N.D. Cal. July 22, 2016); Driscoll v. Granite Rock Company, 6 Cal. App. 5th 215 (2016));

24

ECF No. 18 at 10. Defendant notes that Plaintiff has not alleged that anyone employed by

25

Defendant told Plaintiff or PCMs that their “failure to complete a route within the assigned time

26

frame could result in them risking the loss of their jobs, nor does he allege that he and PCMs were

27

prevented from working longer hours to complete their routes or that any adverse consequences

28

6

The Wage Order in Brinker is substantially similar to the Wage Order at issue in this case.

8

1

would actually flow from them working longer hours or otherwise failing to complete their routes

2

within certain time frames.” Id. at 21-22. Defendant additionally argues that the allegation that

3

Defendant did not have a policy advising Plaintiff and PCMs of their right to a second meal period

4

is insufficient as a matter of law and that the FAC does not identify even one specific day that he

5

was denied a second meal break. Id. at 22.

6

Plaintiff counters that the FAC provides adequate factual support that he personally

7

experienced missed meal periods and that the FAC’s allegations that “Defendant’s policies and

8

practices do not provide legally complaint meal periods (whether it be the first or second period)

9

are sufficient by themselves to state a cause of action.” ECF No. 15 at 14. (citing Ambriz v. Coca-

10

Cola Company, No. 13-cv-03539, 2013 WL 5947101, at *3 (N.D. Cal. Nov. 5, 2013) and

11

Davenport v. Wendy’s Co., No. 2: 14-cv-00931, 2014 WL 3735611, at *6 (E.D. Cal. July 28,

12

2014)). Additionally, he argues that he is not obligated to allege more specific facts regarding

13

Defendant’s policy or his work schedule. Id.

14

Both parties have cited cases decided after Brinker that support their positions. On

15

Plaintiff’s side are the decisions in Ambriz and Davenport, and on Defendant’s side are the

16

decisions in Brown and Gonzalez. Upon close examination of these cases, the Court agrees with

17

Defendant that the FAC fails to provide sufficient factual support that permits the inference that

18

Defendants are liable for failure to provide meal and rest breaks to Plaintiff and PCMs. First, the

19

Court notes that Davenport is factually distinguishable from this case, in that the plaintiff provided

20

much more factual support than Plaintiff in this case for his pressure-based allegations. See

21

Davenport, 2014 WL 3735611, at *6 (finding allegations that “extreme pressure” was placed on

22

employees to meet employer’s “corporately mandated speed of service standards” and that “failure

23

to meet these standards ‘frequently resulted in salaried General Managers receiving poor

24

performance reviews, being unable to make bonuses, being demoted, reprimanded, or even

25

terminated’” were sufficient to survive a 12(b)(6) motion.). Second, in Brown and Gonzalez, which

26

are the most factually analogous to this case, the courts granted the Rule 12(b)(6) motions. Brown,

27

2013 WL 1701581, at *5 (finding insufficient the plaintiff’s allegations that the defendant

28

“pressured, incentivized, and discouraged” the plaintiffs from taking lunch because they did not
9

1

provide any facts surrounding these alleged tactics); Gonzalez, 2016 WL 3951655, at *6

2

(allegations that the plaintiff was denied meal and rest breaks were insufficient because he failed to

3

allege “facts and circumstances that support the elements of his claims, rather than simply reciting

4

legal conclusions” and therefore failed to permit the court to make a reasonable inference that the

5

defendants were liable). For this reason, the Court declines to follow the reasoning in Ambriz. See

6

Ambriz, 2013 WL 5947010 at *3-4 (“Plaintiff here is not required to allege anything more than

7

what he has already alleged: that he was entitled to meal breaks, and that meal breaks were not

8

provided…The Court finds that Plaintiff is not required to allege the non-existence of something,

9

such as meal breaks, with any greater specificity than he has done here, because ‘there is no more

10

factual content Plaintiff could have alleged”) (emphasis in original). While Plaintiff has alleged at

11

least four instances where he was allegedly denied meal and rest periods, his mere allegations that

12

he felt “pressured” by Defendants assigning “too much work,” are “‘merely consistent with’

13

[Defendant]’s liability … [and] stop[] short of the line between possibility and plausibility of

14

‘entitlement to relief.’” Iqbal, 556 U.S. at 679 (quoting Twombly, 550 U.S. at 557). Accordingly,

15

the Court finds that Plaintiff’s allegations are too vague and conclusory for the Court to infer that

16

Defendants may be held liable for failing to meet their obligations under California law as set forth

17

in Brinker, 53 Cal. 4th at 1040-41. Plaintiff’s third and fourth claims are DISMISSED with leave to

18

amend.

19

C. Violation of Unfair Competition Law

20

Plaintiff alleges that Defendants’ failure to pay all straight time and overtime wages earned,

21

failure to provide complaint meal and/or rest breaks and/or compensation in lieu thereof, failure to

22

itemize and keep accurate records, and failure to pay all wages due at the time of termination

23

constitute unlawful activity proscribed the UCL, and that he “is entitled to an injunction and other

24

equitable relief against such unlawful practices.” FAC ¶¶ 161-162. “As a result of their unlawful

25

acts, [Defendants] have reaped and continue to reap unfair benefits at the expense of Plaintiff and

26

the proposed Class he seeks to represent.” Id. ¶ 167. Plaintiff therefore seeks “equitable and

27

injunctive relief, including full restitution and/or disgorgement of all wages and premium pay

28

which have been unlawfully withheld from Plaintiff and [PCMs]as a result of the business acts and
10

1

practices described herein and enjoining [Defendants] from engaging in the practices described

2

herein” and have requested that the Court “issue a preliminary and permanent injunction

3

prohibiting [Defendants] from continuing to not pay Plaintiff and [PCMs] as discussed herein.” Id.

4

¶ 169.
“The unfair competition law prohibits ‘any unlawful, unfair or fraudulent act or practice.’

5
6

(Bus. Prof. Code § 17200) … In a private unfair competition law action, the remedies are ‘generally

7

limited to injunctive relief and restitution … Not recoverable are damages, including punitive

8

damages and increased or enhanced damages.’” Clark v. Superior Ct., 50 Cal. 3th 605, 610 (2010).

9

Restitution under the UCL would “compel[] a UCL defendant to return money obtained through an

10

unfair business practice to those persons in interest for whom the property was taken, that is, to

11

persons who had an ownership interest in the property or those claiming through that person.”

12

Korea Supply Co. v. Lockheed Martin Corp., 29 Cal 4th 1134, 1144 (2003). The key issue then is

13

whether the payments Plaintiff seeks through his UCL claim constitute damages—which are not

14

recoverable, or restitution—which is recoverable.
Defendant seeks dismissal of Plaintiff’s unfair competition law claim, arguing that it fails as

15
16

a matter of law because CLC § 226.7 payments for meal and rest break violations and CLC §§ 203

17

and 226 penalties are not subject to restitution under the UCL.7 ECF No. 13 at 23. Plaintiff opposes,

18

arguing that “the overwhelming majority of federal courts” have found that premium pay for

19

missed meal periods and wages can both be recovered as restitution under the UCL. ECF No. 15 at

20

18-19. The parties’ dispute ultimately concerns differing interpretations of the California Supreme

21

Court’s decisions in Murphy v. Kenneth Cole Productions, Inc., 40 Cal 4th 1074, 1102 (2002), and

22

Kirby v. Immoos Fire Protection, Inc., 53 Cal. 4th 1244, 1257 (2012), and the different ways that

23

these cases have been interpreted by district courts. As with the meal and rest period claims, both

24

parties have cited district court cases that support their respective positions.
Plaintiff correctly notes that several California district courts have found that payments due

25
26

under CLC § 226.7 are recoverable as restitution under the UCL. ECF No. 15 at 19 (citing

27
28

7

Defendant does not seek dismissal of this claim insofar as Plaintiff seeks payment pursuant to CLC § 203 for wages that
were due upon termination, otherwise known as “waiting time penalties.”

11

1

Tomlinson v. Indymac Bank, F.S.B., 359 F. Supp. 2d 891, 896 (C.D. Cal. 2005); Brandon v. Nat’l

2

R.R. Passenger Corp. Amtrak, No. CV 12-5796 PSG (VBKx), 2013 WL 800265, at *4 (C.D. Cal.

3

Mar. 1, 2013); Doe v. D.M. Camp & Sons, No. CIV-F-05-1417 AWI SMS, 2009 WL 921442, at

4

*13 (E.D. Cal. Mar. 31, 2009); Delgado v. Deanda, No. C-10-02799 HRL, 2011 WL 7946405, at

5

*3 (N.D. Cal. Nov. 23, 2011); Ordonez v. Radio Shack, No. CV 10-7060 CAS (MANx), 2011 WL

6

499279, at *6 (C.D. Cal. Feb. 7, 2011); Corm v. United Parcel Service, Inc., No. C03-2001 TEH,

7

2005 WL 588431, at *5 (N.D. Cal. Mar. 14, 2005)). However, all but one of these cases were

8

decided before the California Supreme Court issued its decision in Kirby, which explicitly held that

9

the legal violation underlying a CLC § 226.7 claim is the non-provision of meal and rest periods

10

and the corresponding failure to ensure the health and welfare of employees, not the nonpayment of

11

wages. See 53 Cal. 4th at 1256-57. Kirby therefore strongly undermines Plaintiff’s position and

12

supports that of Defendant, who has cited a 2016 decision from a court in the Northern District of

13

California, relying on Kirby, that found “wages do not constitute restitution for the purposes of the

14

UCL.” See Parson v. Golden State FC, LLC No. 16-cv-00405, 2016 WL 1734010, at *6 (N.D. Cal.

15

May 2, 2016). This Court likewise finds that CLC § 226.7 wages do not constitute restitution

16

recoverable under UCL and therefore GRANTS Defendant’s motion to dismiss Plaintiff’s UCL

17

claim insofar as the claim pertains to CLC § 226.7 wages for meal and rest period violations.

18

Furthermore, because Plaintiffs do not oppose Defendant’s motion to dismiss their claim

19

insofar as it seeks CLC §§ 203 and 226 penalties for inaccurate wage statements, the Court likewise

20

GRANTS the motion to dismiss in this regard. See Pineda v. Bank of America, N.A., 50 Cal. 4th

21

1389, 1402 (2010) (“We thus hold section 203 penalties cannot be recovered as restitution under

22

the UCL.”); Campbell v. PricewaterhouseCoopers, Nos. CIV. S-06-2376 LKK/GGH, S-08-965

23

LKK/GGH, S-08-997 LKK/EFB, 2008 WL 3836972, at *6 (E.D. Cal. Aug 14, 2008) (penalties

24

under CLC §§ 203 and 226 “are not recoverable under the UCL”).

25

Therefore, the Court DISMISSES Plaintiff’s UCL claim insofar as it pertains to wages and

26

penalties under CLC §§ 203, 226, and 226.7 for failure to state a claim upon which relief can be

27

granted. Because this relief is not available as a matter of law, dismissal shall be WITHOUT

28

LEAVE TO AMEND.
12

1

//

2

III.

3

Requested Relief
Plaintiff’s prayer for relief includes, inter alia, claims for injunctive relief under the UCL

4

and attorney’s fees. FAC ¶ 172. Defendant moves to strike or dismiss these claims for relief. ECF

5

No. 13 at 26-27.

6

A. Injunctive Relief

7

Defendant moves to dismiss or strike Plaintiff’s request for injunctive relief because

8

Plaintiff, as a former employee of Defendant, lacks standing to seek this form of relief. Id. at 26.

9

Plaintiff opposes on the ground that he filed this action “so that he could represent the interests of

10

similarly situated individuals who have been harmed by Defendant’s unfair business practices.”

11

ECF No. 15 at 20.

12

The parties have again presented conflicting authorities in support of their respective

13

positions. Defendant first cites to Ellis v. Costco Wholesale Corp., 657 F.3d 970 (9th Cir. 2011), in

14

which the Ninth Circuit considered whether certain named plaintiffs could fairly and adequately

15

protect the interests of a class. In Ellis, the Ninth Circuit found that “Plaintiffs not employed by

16

Costco throughout this case do not have standing to seek injunctive relief,” and therefore held that

17

two plaintiffs who were former employees, “would not share an interest with class members whose

18

primary goal is to obtain injunctive relief,” and that these two plaintiffs therefore “will not

19

adequately protect the interests of the class as a whole.” Id. at 986. Defendant also directs the Court

20

to Delodder v. Aerotek, Inc., in which a court in the Central District found that plaintiffs lacked

21

standing to seek prospective relief under the UCL because as former employees, “they [could] not

22

demonstrate a ‘real or immediate threat of irreparable injury’ by defendant’s employment

23

practices,” and found it appropriate to strike from the complaint all language requesting injunctive

24

relief. No CV 08-6044, 2009 WL 3770670, at *3 (C.D. Cal. Nov. 9, 2009).

25

Plaintiff cites to Rosenberg v. Renal Advantage, Inc., No. 11-cv-2152-GPC-KSC, 2013 WL

26

3205426, at *9-10 (S.D. Cal. June 24, 2013). In Rosenberg, a court in the Southern District of

27

California found that a plaintiff formerly employed by the defendant was permitted to bring a claim

28

for equitable relief under the UCL on account of the defendant’s alleged wrongful denial of
13

1

overtime wages. Id. The Rosenberg court relied on Cortez v. Purolator Air Filtration Products Co.,

2

999 P.2d 706 (2000), in which the California Supreme Court held that the plaintiff was permitted to

3

seek injunctive relief against her former employer on the basis that withheld overtime wages are

4

recoverable as restitution in a UCL action and CPBC § 17203’s “broad grant of equitable power” to

5

the trial court in fashioning a remedy. Id.

6

Under Rule 12(f), the Court “may strike from a pleading an insufficient defense or any

7

redundant, immaterial, impertinent, or scandalous matter.” Plaintiff’s prayer for injunctive relief is

8

none of these. Moreover, the Ninth Circuit has held that “Rule 12(f) of the Federal Rules of Civil

9

Procedure does not authorize a district court to dismiss a claim for damages on the basis that it is

10

precluded as a matter of law.” Whittlestone, Inc., 618 F.3d at 976. The Court therefore declines to

11

strike Plaintiff’s request for injunctive relief.

12

Nevertheless, the Court agrees with Defendant that Plaintiff lacks standing to pursue

13

injunctive relief under the UCL. See Wal-Mart Stores, Inc. v. Dukes, 564 U.S. 335, 364 (2011)

14

(acknowledging that those plaintiffs no longer employed by the defendant “lack standing to seek

15

injunctive or declaratory relief against its employment practices.”). The Court finds that Rosenberg

16

is distinguishable because the ultimate issue the court resolved was not whether to strike or dismiss

17

the request for injunctive relief, but whether the plaintiff had satisfied the requirements of Rule 23

18

for class certification. See 2013 WL 3205426 at *9-10. Therefore, because Defendant has, in the

19

alternative, challenged the sufficiency of this request under Rule 12(b)(6), the Court finds it

20

appropriate to DISMISS Plaintiff’s request for injunctive relief. In an abundance of caution,

21

dismissal shall be with leave to amend.

22

B. Attorney’s Fees

23

Defendant moves to strike Plaintiff’s request for attorney’s fees on the grounds that there is

24

no statute or agreement between the parties that authorizes an award of attorney’s fees to a party

25

that prevails on a CLC § 226.7 claim. ECF No. 13 at 27. Defendant cites to Kirby, which held that

26

“a prevailing party may recover attorney’s fees only when a statute or an agreement of the parties

27

provides for fee shifting,” and “neither [CLC § 1194] nor [CLC § 218.5] authorizes an award of

28

attorney’s fees to a party that prevails on a [CLC § 226.7] claim.” 53 Cal 4th at 1248.
14

Plaintiff opposes on the grounds that he is seeking restitution not only for himself, but also

1
2

on behalf of all drivers in California, and therefore, the California Code of Civil Procedure (“CCP”)

3

§ 1021.5 permits him to seek attorney’s fees. ECF No. 15 at 21-22. In support, Plaintiff cites Pena

4

v. Taylor Farms Pacific, Inc., in which a court in this district denied a defendant’s motion to

5

dismiss on the basis that the plaintiff had satisfied the three basic criteria required to support an

6

award of attorney’s fees under CCP § 1021.5. Id. (citing 2014 WL 1665231, at *10-11 (E.D. Cal.

7

Apr. 23, 2014)). “Three basic criteria are required to support an award of attorneys’ fees under

8

[CCP § 1021.5]: (1) the action resulted in the enforcement of an important right affecting the public

9

interest; (2) a significant benefit was conferred on the general public or a large class of persons; and

10

(3) the necessity and financial burden of private enforcement were such as to make the award

11

appropriate.” Abouab v. City and Cty. Of San Francisco, 141 Cal. App. 4th 643, 663 (2006).

12

Plaintiff asserts that he can satisfy these three criteria, arguing that the risks he has taken in bringing

13

this action “potentially far outweigh the benefits he could obtain for himself if successful,” and “the

14

cost award alone if Plaintiff is unsuccessful could far exceed what he is seeking.” ECF No. 15 at

15

21.

16

Here, the Court agrees with Plaintiff’s argument that attorney’s fees may be appropriate,

17

and declines to strike Plaintiff’s request at this time. Courts considering this very issue in similar

18

cases generally find the attorney’s fees may be appropriate under CCP § 1021.5. See, e.g., Dittmar

19

v. Costco Wholesale Corp., No. 14cv1156-LAB (JLB), 2016 WL 3387464, at *2 (S.D. Cal. June

20

20, 2016); Rodriguez v. Cleansource, Inc., No. 14-cv-0789-L (DHB), 2015 WL 5007815, at *11

21

(S.D. Cal. Aug. 20, 2015); Parks v. Eastwood Ins. Servs., Inc., No. SA CV-02-507-GLT (MLGx),

22

2005 WL 6007833, at *2-3 (C.D. Cal. June 28, 2005) rev’d on other grounds by 240 Fed. Appx.

23

172 (9th Cir. 2007). Nevertheless, as Defendant notes, the FAC contains no mention of CCP §

24

1021.5 as a basis for attorney’s fees. ECF No. 18 at 16. Therefore, the Court will dismiss Plaintiff’s

25

request for attorney’s fees with leave to amend.

26

//

27

//

28

//
15

CONCLUSION AND ORDERS

1
2
3

For these reasons, Defendant’s motion to dismiss and/or strike (ECF No. 13) is GRANTED
IN PART AND DENIED IN PART as follows:

4

1. The motion to dismiss is DENIED as to Plaintiff’s overtime claim;

5

2. The motion to dismiss is GRANTED with leave to amend as to Plaintiff’s meal period
and rest period claims;

6
7

3. The motion to dismiss is GRANTED without leave to amend insofar it pertains to
Plaintiff’s claim for CLC §§ 203, 226, 226.7 wages through the UCL;

8
9

4. The motion to dismiss is GRANTED with leave to amend as to Plaintiff’s request for
injunctive relief;

10
11

5. The motion to dismiss is GRANTED with leave to amend as to Plaintiff’s request for
attorney’s fees

12
13

6. The motion to strike Plaintiff’s allegations pertaining to CLC § 226 and failure to
maintain accurate time records is DENIED without prejudice.

14
15
16

Plaintiff shall have twenty days from electronic service of this order to file an amended complaint

17

or give notice that he will stand on the current FAC. Plaintiff is cautioned that this will be the last

18

opportunity to amend and that he should only amend if amendment would not be futile based on the

19

law and findings in this Order.

20
21
22
23

IT IS SO ORDERED.
Dated:

/s/ Lawrence J. O’Neill _____

February 3, 2017

UNITED STATES CHIEF DISTRICT JUDGE

24
25
26
27
28
16