Sliger et al v. Prospect Mortgage, LLC et al

Filing 55

ORDER signed by Senior Judge Lawrence K. Karlton on 5/26/2011 DENYING, in its entirety, defendant's 40 Motion to Dismiss or, in the alternative, to Strike Class Allegations. (Marciel, M)

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UNITED STATES DISTRICT COURT
8
FOR THE EASTERN DISTRICT OF CALIFORNIA
9
10 ELIZABETH SLIGER, CAROL
DION and SCOTT AVILA,
11 individually, on behalf
of others similarly situated,
12 and on behalf of the general
public,
13
NO. CIV. S-11-465 LKK/EFB
14
15

Plaintiffs,
v.

16 PROSPECT MORTGAGE, LLC, and
DOES 1 through 50, inclusive,
17
Defendants.
18
/
19

O R D E R

This is a wage and hour class and collective action filed by

20 loan

officers

formerly

working

for

Prospect

Mortgage,

LLC.

21 Plaintiffs make eight claims for relief: 1) failure to pay overtime
22 in violation of the Fair Labor Standards Act (“FLSA”); 2) failure
23 to pay minimum wage in violation of the FLSA; 3) failure to pay
24 overtime in violation of California law; 4) failure to pay minimum
25 wage in violation of California law; 5) waiting time penalties
26 under

California

law;

6)

failure
1

to

provide

itemized

wage

1 statements in violation of California law; 7) failure to provide
2 and/or authorize meal and rest periods under California law; and 8)
3 violation of California unfair competition law. Defendant Prospect
4 Mortgage has filed a motion to dismiss the first amended complaint,
5 or in the alternative to strike class allegations. Plaintiffs
6 oppose the motion. For the reasons stated below, defendant’s motion
7 is DENIED.
I. Background1

8
9

Plaintiffs Elizabeth Sliger, Carol Dion, and Scott Avila

10 ("Sliger,"

"Dion,"

and

"Avila,"

respectively)

worked

as

loan

11 officers between 2008 and 2010. As loan officers, plaintiffs were
12 engaged in selling mortgages. Plaintiffs “regularly” performed this
13 work over the phone, via the internet, or at defendant’s offices.
14 Plaintiffs did not make sales at customers homes or places of
15 business. FAC ¶ 29.
16

Defendant had a uniform policy of paying plaintiffs and other

17 loan officers on a commission-only basis. FAC ¶ 38. During pay
18 periods in which a loan officer did not complete any mortgage
19 sales, that loan officer received no pay. For example, plaintiff
20 Sliger began working for defendant in May 2008, and did not receive
21 any pay from defendant until approximately June or July 2008. FAC
22 ¶ 18. Plaintiff Dion did not receive any pay for the first six or
23 eight weeks of her employment, starting in May 2008. FAC ¶ 19.
24
25
26

1

The "background" is taken from the allegations in the First
Amended Complaint (“FAC”), ECF No. 25, unless otherwise specified.
The allegations are taken as true for purposes of this motion only.
2

1 Plaintiff Avila worked from March 2009 until June 2009 without
2 receiving any pay. FAC ¶ 20. The commission-only pay structure was
3 uniformly applied to all loan officers. FAC ¶ 21. Plaintiffs allege
4 that other loan officers from time to time did not receive any pay
5 during pay periods in which they did not complete any mortgage
6 sales.
7

In

addition

to

working

some

pay

periods

without

pay,

8 plaintiffs sometimes worked more than eight hours per day or forty
9 hours per week without receiving overtime pay. Sliger, Dion, and
10 Avila typically began their work day in the “early morning,” five
11 days per week, and continued to work into the evening and also on
12 weekends. Plaintiff Sliger, for example, “often worked from 8:00
13 until 5:00 two days a week and 8:00 to 6:00 three days a week, plus
14 additional time at home in the evenings” and additional hours on
15 weekends. FAC ¶ 23. Dion “often” worked eleven hours per day, six
16 days per week. FAC ¶ 24. Avila “often” worked in the evenings and
17 on weekends, in addition to eight hours per day worked in the
18 office. FAC ¶ 25.
19

Defendant expected plaintiffs and other loan officers to

20 respond to phone calls and emails in the evenings and weekends.
21 Defendant had a policy of requiring loan officers to respond to
22 leads within two hours of receiving them, even when the leads came
23 in outside of the regular working hours. Plaintiffs observed other
24 loan officers working in excess of eight hours per day and forty
25 hours per week. Defendant had production requirements that applied
26 to plaintiffs and other loan officers, which required loan officers
3

1 to work through lunch and rest periods. FAC ¶ 30.
2

Defendant uniformly represented to plaintiffs and other loan

3 officers that they were exempt employees, and were not entitled to
4 overtime pay. FAC ¶ 27.
5

Defendant did not keep records of hours worked by plaintiffs.

6 Nor did they require plaintiffs to keep records of their own hours
7 worked. FAC ¶ 32.
II. Standards

8

9 A. Standard for a Motion to Dismiss
10

A Fed. R. Civ. P. 12(b)(6) motion challenges a complaint’s

11 compliance with the pleading requirements provided by the Federal
12 Rules.

Under Federal Rule of Civil Procedure 8(a)(2), a pleading

13 must contain a “short and plain statement of the claim showing that
14 the pleader is entitled to relief.”

The complaint must give

15 defendant “fair notice of what the claim is and the grounds upon
16 which it rests.”

Bell Atlantic v. Twombly, 550 U.S. 544, 555

17 (2007) (internal quotation and modification omitted).
18

To meet this requirement, the complaint must be supported by

19 factual allegations.

Ashcroft v. Iqbal, ___ U.S. ___, ___, 129 S.

20 Ct. 1937, 1950 (2009).

“While legal conclusions can provide the

21 framework of a complaint,” neither legal conclusions nor conclusory
22 statements are themselves sufficient, and such statements are not
23 entitled to a presumption of truth.

Id. at 1949-50.

Iqbal and

24 Twombly therefore prescribe a two step process for evaluation of
25 motions to dismiss.

The court first identifies the non-conclusory

26 factual allegations, and the court then determines whether these
4

1 allegations,

taken

as

true

and

construed

in

the

light

most

2 favorable to the plaintiff, “plausibly give rise to an entitlement
3 to relief.”
4

Id.; Erickson v. Pardus, 551 U.S. 89 (2007).

“Plausibility,” as it is used in Twombly and Iqbal, does not

5 refer to the likelihood that a pleader will succeed in proving the
6 allegations.

Instead, it refers to whether the non-conclusory

7 factual allegations, when assumed to be true, “allow[] the court to
8 draw the reasonable inference that the defendant is liable for the
9 misconduct alleged.”

Iqbal, 129 S.Ct. at 1949. “The plausibility

10 standard is not akin to a ‘probability requirement,’ but it asks
11 for more than a sheer possibility that a defendant has acted
12 unlawfully.”

Id. (quoting Twombly, 550 U.S. at 557).

A complaint

13 may fail to show a right to relief either by lacking a cognizable
14 legal

theory

or

by

lacking

sufficient

facts

alleged

under

a

15 cognizable legal theory. Balistreri v. Pacifica Police Dep’t, 901
16 F.2d 696, 699 (9th Cir. 1990).
17 B. Standard for a Motion to Strike
18

Rule 12(f) authorizes the court to order stricken from any

19 pleading "any redundant, immaterial, impertinent, or scandalous
20 matter." A party may bring on a motion to strike within 21 days
21 after the filing of the pleading under attack. The court, however,
22 may make appropriate orders to strike under the rule at any time on
23 its own initiative. Thus, the court may consider and grant an
24 untimely motion to strike where it seems proper to do so. See 5A
25 Wright and Miller, Federal Practice and Procedure: Civil 2d 1380.
26

A matter is immaterial if it "has no essential or important
5

1 relationship

to

the

claim

for

relief

or

the

defenses

being

2 pleaded." Fantasy, Inc. v. Fogerty, 984 F.2d 1524, 1527 (9th Cir.
3 1993), rev'd on other grounds by 510 U.S. 517 (1994). A matter is
4 impertinent if it consists of statements that do not pertain to and
5 are not necessary to the issues in question. Id. Redundant matter
6 is defined as allegations that "constitute a needless repetition of
7 other

averments

or

are

foreign

to

the

issue."

Thornton

v.

8 Solutionone Cleaning Concepts, Inc., No. 06-1455, 2007 WL 210586
9 (E.D. Cal. Jan. 26, 2007), citing Wilkerson v. Butler, 229 F.R.D.
10 166, 170 (E.D. Cal. 2005).
11

Motions to strike are generally viewed with disfavor, and will

12 usually be denied unless the allegations in the pleading have no
13 possible relation to the controversy, and may cause prejudice to
14 one of the parties. See 5A C. Wright & A. Miller, Federal Practice
15 and Procedure: Civil 2d 1380; see also Hanna v. Lane, 610 F. Supp.
16 32, 34 (N.D. Ill. 1985). However, granting a motion to strike may
17 be proper if it will make trial less complicated or eliminate
18 serious risks of prejudice to the moving party, delay, or confusion
19 of the issues. Fantasy, 984 F.2d at 1527-28.
20

If the court is in doubt as to whether the challenged matter

21 may raise an issue of fact or law, the motion to strike should be
22 denied, leaving an assessment of the sufficiency of the allegations
23 for

adjudication

on

the

merits.

See

Whittlestone,

Inc.

v.

24 Handi-Craft Co., 618 F.3d 970 (9th Cir. 2010); see also 5A Wright
25 & Miller, supra, at 1380. Whittlestone emphasized the distinction
26 between Rule 12(f) and Rule 12(b)(6) and held that Rule 12(f) does
6

1 not authorize district courts to strike claims for damages on the
2 ground that such claims are precluded as a matter of law. Id. at
3 976.
4
5
6
7

"Were we to read Rule 12(f) in a manner that allowed litigants
to use it as a means to dismiss some or all of a pleading . .
. we would be creating redundancies within the Federal Rules
of Civil Procedure." Whittlestone, Inc. v. Handi-Craft Co.,
See also Yamamoto v. Omiya, 564 F.2d 1319, 1327 (9th Cir.
1977) ("Rule 12(f) is neither an authorized nor a proper way
to procure the dismissal of all or a part of a complaint."
(Citation omitted)). Id. at 974.

8
9

Whittlestone reasoned that Rule 12(f) motions are reviewed for

10 abuse of discretion, whereas 12(b)(6) motions are reviewed de novo.
11 Id. Thus, if a party seeks dismissal of a pleading under Rule
12 12(f), the district court's action would be subject to a different
13 standard of review than if the district court had adjudicated the
14 same substantive action under Rule 12(b)(6). Id.
15
16

III. Analysis
In its motion to dismiss, defendant argues: (1) that dismissal

17 of the first amended complaint is appropriate because the class
18 allegations fail to meet the minimum pleading standards under Fed.
19 R. Civ. P. 8(a); (2) that the class definition should be dismissed
20 or stricken as overbroad; (3) that the derivative class claims
21 should be dismissed; (4) that plaintiff’s allegations proposing a
22 three-year statute of limitations must be dismissed; (5) and that
23 plaintiff’s prayer for attorneys’ fees must be dismissed.
24 A. Plaintiff’s class allegations are sufficiently pled.
25

Defendant argues that plaintiffs’ class allegations fail to

26 meet the pleading requirements of Fed. R. Civ. P. 8(a) because
7

1 plaintiffs rely exclusively on a theory that defendant uniformly
2 treated loan officers as exempt from state and federal overtime pay
3 requirements. According to the defendant, a “uniform exemption
4 theory” is insufficient to state a class action claim.
5
6 an

In individual wage and hour cases, exemption from the FLSA is
affirmative

defense

that

must

be

pled

and

proven

by

the

7 defendant. “[T]he application of an exemption under the Fair Labor
8 Standards Act is a matter of affirmative defense on which the
9 employer has the burden of proof.” Corning Glass Works v. Brennan,
10 417 U.S. 188, 197 (1974); Alex v. California, 1992 U.S. Dist. LEXIS
11 6795 (E.D. Cal. 1992)(“Defendant [in FLSA suit] bears the burden to
12 show

that

its

employees

are

exempt

from

the

FLSA’s

overtime

13 provisions, and exemptions are narrowly construed against the
14 employer. . .” (citing Corning, supra)). Affirmative defenses must
15 be stated in a responsive pleading, Fed. R. Civ. P. 8(c)1, but need
16 not be anticipated and pled in the complaint. Pa. State Police v.
17 Suders, 542 U.S. 129, 152 (2004). The defendant in this case does
18 not argue that plaintiffs’ individual allegations fail to state a
19 claim. See, e.g. Def.’s Reply Brief (“Reply”) 4:9-10, ECF No. 49.
20

Instead, defendant argues that “Plaintiffs must specifically

21 allege uniform policies or practices that applied to putative class
22 members on a class-wide basis,” in order to survive a 12(b)(6)
23 motion to dismiss under the Twombly standard. Defendant argues that
24 “Plaintiffs have not alleged any such policy or practice supporting
25 their misclassification theory,” Reply 1, and that plaintiff must
26 plead facts beyond a bare allegation that defendant had a uniform
8

1 policy of treating employees as exempt. Defendant cites Vinole v.
2 Countrywide Home Loans, Inc., 571 F.3d 935, 942 (9th Cir. 2009) for
3 the proposition that district courts may use discretion to control
4 the class certification process, including deciding “whether or not
5 discovery will be permitted.”
6

In Vinole the Ninth Circuit affirmed the district court’s

7 decision to grant a motion to deny class certification before
8 plaintiffs had themselves moved for certification. The court,
9 however, distinguished instances where district courts declined to
10 dismiss class allegations “when the defendant had not yet answered
11 the complaint, discovery had not yet commenced, and no motion to
12 certify a class had been filed.” Id. at 941 (discussing In re
13 Wal-Mart Stores, Inc. Wage and Hour Litigation, 505 F. Supp. 2d 609
14 (N.D. Cal. 2007); and Baas v. Dollar Tree Stores, Inc., 2007 U.S.
15 Dist. LEXIS 65979, (N.D. Cal. 2007) (unpublished)).
16

Defendant’s suggestion that this court dismiss the class

17 certification claims is premised on Vinole. But defendant simply
18 fails to recognize that Vinole stands for the proposition that
19 dismissal

of

the

claims

is

committed

to

this

court’s

sound

20 discretion. Vinole, 571 F.3d at 935, (citing inter alia Kamm v.
21 Cal.City Dev. Co. 509 F.2d 205, 209 (9th Cir. 1975)). Moreover,
22 this case is wholly distinguishable from Vinole. Fist, here the
23 motion is premised on Fed. R. Civ. P. 12(b)(6), while in Vinole the
24 court emphasized that the motion was brought pursuant to Rule 23.
25 Moreover, the Vinole court indicated that there had been enough
26 time for the plaintiff to discover information sufficient to meet
9

1 defendant’s motion. Here, of course, we are at the pleading stage.
2

In order to win class certification, plaintiff will have to

3 show that “questions of law or fact common to class members
4 predominate over any questions affecting only individual members,
5 and that a class action is superior to other available methods for
6 fairly and efficiently adjudicating the controversy.” Fed. R. Civ.
7 P. 23(b)(3). Defendant argues that plaintiff has failed to allege
8 facts that would support such predominance because plaintiff is
9 relying solely on allegations of a uniform policy of exempting loan
10 officers from overtime pay. Vinole held that a district court
11 determining whether to certify a class in a wage and hour case
12 “abuses its discretion in relying on an internal uniform exemption
13 policy to the near exclusion of other factors relevant to the
14 predominance inquiry.” Vinole, 571 F.3d at 946. In order to comply
15 with

Rule

23,

a

district

court

would

need

to

assess

the

16 relationship between the common and the individual claims. Id. In
17 addition to a uniform exemption policy, factors that weigh in favor
18 of certification include “whether the employer exercised some level
19 of centralized control in the form of standardized hierarchy,
20 standardized corporate policies and procedures governing employees,
21 uniform training programs, and other factors susceptible to common
22 proof.” Id.
23

It is important to note that Vinole dealt with employees

24 described by the court as “focused on outside sales.” Id. at 937.
25 This group is distinguished from employees known as “Internal Loan
26 Consultants who perform inside loan origination work...” Id. at 938
10

1 n.1. Clearly those facts are different from the allegations in the
2 instant case, which asserts that the plaintiff class worked mostly
3 inside, although they also were required to respond when they were
4 at home.
5

At this stage of litigation, plaintiff must only allege facts

6 from which the court can plausibly infer a right to relief.
7 Based on the

allegations

in the FAC, the court can plausibly make

8 the following inferences: Defendant had a policy of paying loan
9 officers on a commission-only basis. FAC ¶ 17, 21. This pay
10 structure resulted in loan officers receiving no pay during periods
11 where they did not complete any mortgage sales. Some loan officers
12 employed by defendant went without pay for eight weeks while doing
13 work

for

defendant.

FAC

¶

18-21.

Defendant

had

a

policy

of

14 requiring loan officers to respond to leads within two hours, even
15 when those leads came outside of the loan officers’ normal working
16 hours. Loan officers sometimes worked more than eight hours per day
17 or forty hours per week. Defendant treated loan officers as exempt
18 employees. FAC ¶ 27. Loan officers working for defendant did not
19 customarily and regularly make sales at their customers’ home or
20 place of business, but instead conducted their work over the phone,
21 via the internet, and at defendant’s office. Loan officers were not
22 paid overtime for hours worked in excess of eight per day or forty
23 per week. FAC ¶ 33. Defendants had production requirements and
24 monthly production goals, which applied to loan officers. These
25 requirements caused loan officers to miss meal and rest periods. In
26 sum, the FAC goes beyond just alleging a uniform exemption policy
11

1 by the defendant.
2

To put it directly, in exercising its discretion, it is this

3 court’s view that the procedure urged by the defendant threatens a
4 determination on the merits. When the time comes for opposing class
5 certification, the defendant may argue that issues specific to
6 individual claims cut against plaintiff’s predominance argument,
7 but that time is not now. Defendant’s motion to dismiss the class
8 allegations is DENIED.
9 B. The class definition is not too broad to survive a motion to
10 dismiss or strike.
11

Defendant asserts that a class consisting of “all persons who

12 are,

have

been,

or

will

be

employed

by

Defendants

as

‘loan

13 officers,’ ‘loan originators,’ and individuals with similar job
14 titles within the United States,” is overly broad. Defendant argues
15 that the “FAC is completely devoid of a theory that is common to
16 plaintiffs

and

the

broad

class

of

‘loan

officers,’

‘loan

17 originators,’ and ‘similar job titles.’” Mot. Summ. J. 13:21-14:1.
18 In this section of the motion, defendant again raises issues about
19 whether

plaintiff’s

allegations

plausibly

state

a

claim.

The

20 plaintiff has pled that “loan officers,” “loan originators,” and
21 “individuals with similar job titles,” are similarly situated, FAC
22 ¶ 37.
23

The court finds this to be plausible.

Defendant

also

seeks

to

have

all

references

to

“loan

24 originators,” and “similar job titles” stricken from the complaint.
25 Plaintiffs state that they included alternative job titles in order
26 to capture all employees in the same position as loan officers,
12

1 whatever their job title. Inclusion of those alternate job titles,
2 is not “redundant, immaterial, impertinent, or scandalous,” in
3 light of plaintiff’s explanation that the job titles are meant to
4 refer to defendant’s employees who are engaged in mortgage loan
5 sales and are employed in a manner similar to plaintiffs.
6

Accordingly, the court DENIES defendant’s motion to dismiss or

7 to strike the class definition, or to strike all references to
8 “loan originators” or “other similar job titles” from the FAC.
9 C. Plaintiffs’ derivative class claims are not dismissed
10

Defendant argues that plaintiffs’ claims for unpaid minimum

11 wages, meal, and rest period violations, waiting time penalties,
12 itemized statement penalties, and unfair business practices should
13 all be dismissed because they are derivative of the class and
14 collective claims based on misclassification. Indeed, if the court
15 ultimately

finds

that

plaintiffs

are

exempt

employees,

the

16 derivative claims will fail. Having found, however, that plaintiffs
17 have sufficiently pled their class and collective action claims,
18 the court DENIES defendant’s motion to dismiss the derivative
19 claims.
20 D. Plaintiffs have sufficiently pled willfulness.
21

Plaintiffs have alleged that defendant’s conduct was willful,

22 and

they

seek

a

class

that

includes

all

similarly

situated

23 employees at any time three years prior to the filing of the
24 complaint. Under the FLSA, the statute of limitations is two years,
25 unless an employer’s conduct is willful, in which case it is
26 extended

to

three

years.

29

U.S.C.
13

§

255(a).

An

employer’s

1 violation is “willful” when the employer “either knew or showed
2 reckless disregard for the matter of whether its conduct was
3 prohibited by the statute.” McLaughlin v. Richland Shoe Co., 486
4 U.S. 128, 133 (1988). In general, “conditions of the mind” may be
5 alleged generally. Fed. R. Civ. P. 9(b).
6

Here, plaintiffs have alleged that defendant’s violations were

7 willful, and that defendant “was aware of wage and hour laws, as
8 evidenced by the fact that they provide overtime compensation to
9 other employees who are not loan officers.” FAC ¶ 35. Further,
10 plaintiffs alleged that defendant knew that the work performed by
11 plaintiffs required minimum wage and overtime pay, that defendant
12 instructed

them

to

work

long

hours

without

proper

pay,

that

13 employees complained to defendants about these practices. FAC ¶ 41.
14

These factual allegations allow the court to plausibly infer

15 that plaintiffs are entitled to an extension of the FLSA statute of
16 limitations to three years. Accordingly, defendant’s motion to
17 dismiss the allegations proposing a three year collective action is
18 DENIED.
19 E. Plaintiffs claim for attorneys’ fees is not dismissed
20

Plaintiffs have made a claim for attorneys’ fees and costs

21 pursuant to Cal. Code Civ. P. § 1021.5. Under that provision,
22
23
24
25
26

a court may award attorneys' fees to a successful
party . . . in any action which has resulted in the
enforcement of an important right affecting the public
interest if: (a) a significant benefit, whether
pecuniary or nonpecuniary, has been conferred on the
general public or a large class of persons, (b) the
necessity and financial burden of private enforcement.
. . are such as to make the award appropriate, and (c)
such fees should not in the interest of justice be
14

1

paid out of the recovery, if any.

2 Cal. Code Civ. P. § 1021.5.2
3

The purpose of this fee-shifting provision is “to encourage

4 suits

enforcing

5 substantial
6 cases.”

important

attorney

fees

public
to

policies

successful

by

providing

litigants

in

such

Flannery v. California Highway Patrol, 61 Cal. App. 4th

7 629, 634 (1998)(citing Maria P. v. Riles, 43 Cal. 3d 1281 (Cal.
8 1987)). However, fees are not necessarily appropriate “in every
9 lawsuit enforcing a constitutional or statutory right.” Id. In
10 Kistler v. Redwoods Community College Dist., 15 Cal. App. 4th
11 1326 (1993), a California Appellate court reversed an award of
12 attorneys’ fees under § 1021.5, because plaintiffs “were not
13 disinterested

citizens

seeking

to

establish

new

law

on

a

14 question of public importance, they were simply seeking the
15 wages due to them.” Id. at 1337.
16

Plaintiffs argue that they are entitled to such fees and

17 costs

because

defendant’s

conduct

threatens

or

harms

18 competition, and because plaintiffs seek an injunction requiring
19 defendants to pay required wages to all California loan officers
20 employed by defendant. Plaintiffs distinguish the individual
21 wage and hour suits in which California courts have declined to
22 award fees under § 1021.5 from the instant class action, in
23 which plaintiffs are seeking restitution and injunctive relief
24
2

25
26

Although plaintiffs also state a claim for attorneys’ fees
under Cal. Lab. Code § 1194, defendants state that plaintiff’s
attorneys’ fees claim is based “solely” on § 1021.5, and only
address that provision.
15

1 for employees other than themselves. State courts have held that
2 wage

and

hour

class

actions

result

in

“significant

public

3 benefit,” entitling successful plaintiffs to attorneys’ fees
4 under § 1021.5.3 For example, in Grodensky v. Artichoke Joe's
5 Casino, 171 Cal. App. 4th 1399, 1438 (2009), the court held that
6 because the employer’s pay practices (tip sharing with managers)
7 “is commonplace in the gaming industry, . . .the ramifications
8 of the plaintiffs' adjudication in their favor may have a domino
9 effect upon other dealers at other card rooms.” Additionally,
10 the permanent injunction issued by the court would benefit
11 future employees. The potential domino effect, and the benefit
12 to future employees were factors supporting “a finding that the
13 action

resulted

in

the

enforcement

of

an

important

right

14 affecting the public interest.” Id.4
15

The court finds this reasoning to be both compelling and

16 applicable here. Plaintiffs seek a permanent injunction that
17 will benefit all future loan officers employed by defendant. If
18 successful, plaintiffs’ suit will have resulted in a significant
19 benefit on a large class of people. Accordingly, the court
20
21
22
23
24
25
26

3

District courts are not bound by decisions of state
intermediate courts, Dimidowich v. Bell & Howell, 803 F.2d 1473
(9th Cir. 1986), but they are not free to disregard them in the
absence of other authority. West v. American Tel. & Tel. Co., 311
U.S. 223 (1940).
4

The California Supreme Court later held that the California
Labor Code provision that the Grodensky court found to have been
violated, § 351, does not contain a private right to sue, but the
Court did not address the court’s analysis of § 1021.5. Lu v.
Hawaiian Gardens Casino, Inc., 50 Cal. 4th 592, 596 (Cal. 2010).
16

1 DENIES defendant’s motion to dismiss plaintiff’s prayer for
2 attorneys’ fees.
IV. Conclusion

3
4

For

the

5 defendant’s

foregoing

Motion

to

reasons,
Dismiss

the

the

court

Complaint,

ORDERS
or

in

that
the

6 Alternative, to Strike Class Allegations, ECF No. 40, is DENIED
7 in its entirety.
8

IT IS SO ORDERED.

9

DATED:

May 26, 2011.

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