Opinion
No. 2:20-cv-00671-JAM-FEB
07-07-2020
SHAUN ROONEY, an individual, on behalf of himself and all other similarly situated, Plaintiff, v. SAVE MART SUPERMARKETS; DOES 1-20, inclusive, Defendant.
ORDER GRANTING MOTION TO REMAND
On February 6, 2020, Shaun Rooney's ("Plaintiff") filed a proposed wage and hour class action complaint in Sacramento Superior Court against his former employer, Save Mart Supermarkets ("Defendant"). Not. of Removal, ECF No. 1, Exh. A. Defendant then filed a notice of removal, invoking the Court's federal jurisdiction under 28 U.S.C. §§ 1331,1441 and 1446. Id. at 2.
Before the Court is Plaintiff's motion to remand. Plaintiff contends that this Court lacks jurisdiction because his claims arise only under state law. Mot., ECF No. 8. Defendant opposes this motion. For the reasons described below, the Court GRANTS Plaintiff's motion to remand.
This motion was determined to be suitable for decision without oral argument. E.D. Cal. L.R. 230(g). The hearing was scheduled for June 2, 2020. --------
I. FACTUAL ALLEGATIONS AND PROCEDURAL BACKGROUND
Plaintiff worked at Save Mart Supermarkets as an Order Selector for about seven and a half years. Not. of Removal, Exh. A, Compl. Plaintiff asserts six causes of action under state law against Defendant for: (1) failure to provide wage statements, (2) failure to pay overtime wages, (3) failure to keep requisite payroll records, (4) waiting time penalties, (5) violating California Unfair Competition Law, and (6) derivative California Private Attorneys General Act ("PAGA") claims based on the first four causes of action. Mot. at 7.
On March 30, 2020, Defendant removed Plaintiff's suit to this Court. See Not. of Removal. Although all of Plaintiff's claims arise under state law, Defendant removed on the grounds that Plaintiff's overtime claim is preempted by Section 301 of the Labor Management Relations Act ("LMRA").
II. OPINION
A. Legal Standard
Courts must strictly construe the removal statute against removal jurisdiction. Gaus v. Miles, Inc., 980 F.2d 564, 566 (9th Cir. 1992). Generally, "any civil action brought in a State court of which the district courts of the United States have original jurisdiction, may be removed by the defendant." 28 U.S.C. § 1441.
Courts have original jurisdiction—or federal question jurisdiction—of all civil actions arising under the Constitution, laws, or treaties of the United States. 28 U.S.C. § 1331. A plaintiff's well-pleaded complaint must establish "either that federal law creates the cause of action or that the plaintiff's right to relief necessarily depends on a resolution of a substantial question of federal law." Easton v. Crossland Mortg. Corp., 114 F.3d 979, 982 (9th Cir. 1997)(internal citations omitted). In other words, "it must be clear from the face of the plaintiff's well-pleaded complaint that there is a federal question." Id. (internal citations omitted). "[A] civil complaint raising claims preempted by Section 301 [of the LMRA] raises a federal question that can be removed to a federal court." Curtis v. Irwin Industries, Inc., 913 F.3d 1146, 1152 (9th Cir. 2019).
In determining whether removal is proper, "it is to be presumed that a cause of action lies outside [the] limited jurisdiction [of federal courts] and the burden of establishing the contrary rests upon the party asserting jurisdiction." Hunter v. Philip Morris USA, 582 F.3d 1039, 1042 (9th Cir. 2009)(internal citations omitted).
B. Analysis
Defendant argues the Court has federal jurisdiction over Plaintiff's suit because his claim for overtime pay is preempted by section 301 of the LMRA since he worked pursuant to a collective bargaining agreement ("CBA"). Not. of Removal ¶ 4. Plaintiff, on the other hand, argues removal is not proper because the CBA at issue does not meet the requirements for preemption. Mot. at 6.
Section 301 provides federal jurisdiction over "suits for violation of contracts between an employer and a labor organization." Burnside v. Kiewit Pacific Corp., 491 F.3d 1053, 1058-59 (9th Cir. 2007) . Congress enacted this statute to mandate federal courts "to fashion a body of federal common law to be used to address disputes arising out of labor contracts." Id. The preemptive force of this section entirely displaces any state cause of action for violation of a labor contract and transforms it into a claim that shall be considered as arising under federal law. Id. But not every dispute concerning a labor contract or "tangentially involving a provision of a [CBA]," is preempted by Section 301. Sarmiento v. Sealy, Inc., No. 18-cv-01990-JST, 2019 WL 3059932 (N.D. Cal. July 12, 2019).
Courts use a two-part test to determine whether Section 301 preemption is proper. Burnside, 491 F.3d at 1059-60. First, courts must determine whether the cause of action is grounded in state law or in a CBA. Id. at 1060. If the claim seeks to "purely vindicate a right or duty created by the CBA itself," then the claim is preempted, and the inquiry ends there. Curtis, 913 F.3d at 1152-53. Otherwise, the Court proceeds to the second step and asks whether the state law claim is "substantially dependent on [the] analysis of the CBA." Id. at 1153. If the claim requires "interpreting" the CBA, rather than simply "looking to" it, the state law claim is preempted. Id. ///
1. Step 1: Whether the Right Exists Solely as a Result of the CBA
To determine if a right is independent of a CBA, the Court must consider whether the "legal character of a claim" is "independent of rights under the [CBA]." Burnside, 491 F.3d at 1060. Moreover, "reliance on the CBA as an aspect of a defense is not enough to inject a federal question into an action that asserts what is plainly a state-law claim." Id. (internal quotations omitted).
At issue is Plaintiff's second cause of action for failure to pay overtime wages under California Labor Code Section 510. Not. of Removal ¶ 5. Plaintiff asserts that Defendant did not pay him, and similarly situated employees, overtime wages owed under Section 510 for "regularly work[ing] in excess of (8) hours a day/and or forty (40) hours per week." Not. of Removal, Exh. A, ECF No. 1-1, Compl. ¶ 33.
But the overtime requirements in Section 510 do not apply to an employee working "[a]n alternative workweek schedule adopted pursuant a [CBA]." Cal. Lab. Code § 510(a)(2). To be exempted from Section 510, the CBA must expressly provide for "the wages, hours of work, and working conditions of the employees," and must provide "premium wage rates for all overtime hours worked and a regular hourly rate of pay for those employees of not less than 30 percent more than the state minimum wage." Id. at § 514. Thus, if the CBA at issue meets the requirements of Section 514, Plaintiff's claim will be preempted. Curtis, 913 F.3d at 1154.
Plaintiff argues the CBA does not meet the requirements of Section 514 because it fails to "provide a rate of pay of not less than 30 percent more than the state minimum wage for all employees covered under the CBA." Mot. at 10 (emphasis added). Defendant does not dispute this but argues instead that Section 514 "does not require [that] all putative class members" earn more than 30% of the state minimum wage. Opp'n at 7. In other words, Defendant maintains it is enough that Plaintiff's rate of pay complies with this requirement. Id. at 8.
To resolve this dispute, the Court must interpret Section 514. Plaintiff cites two cases that have analyzed this same question. See Mot. at 12-13. The Court finds both to be persuasive.
In Huffman v. Pac. Gateway Concessions LLC, the CBA in question also did not meet the rate of pay requirement with respect to all employees but did meet the requirement with respect to the plaintiff. No.19-cv-01791-PJH, 2019 WL 2563133, at *5 (N.D. Cal. June 21, 2019). In interpreting the statute, the court first noted the use of the singular term "an employee," when Section 514 states a covered employee is exempt from Section 510. Id. Next, the statute states the CBA must "expressly provide[] for the wages, hours of work, and working conditions of the employees[.]" Id. Contrasting "an employee" with "the employees," the court found this part of the statute requires the CBA to provide the expressed requirements as to "all employees covered by the CBA." Id. Third, the court noted the statute's requirement that the CBA provide premium overtime rates and minimum wages exceeding no less than 30% of the state minimum wage "for those employees." Id. The court found the "plural term 'those employees' refers back to the statute's earlier use of 'the employees' which, as discussed above, means all employees covered by the CBA." Id. Accordingly, the court held "it was apparent from the statute's plain language that the CBA must satisfy Section 514's requirements with respect to all covered employees in order to render Section 510 inapplicable to any particular employee." Id. at 6. Because the CBA at issue failed to provide an hourly rate of 130% the state minimum wage for at least some employees, "plaintiff's asserted cause of action involved a right conferred upon an employee by virtue of state law." Id.
In Sarmiento, the court grappled with the same issue. 2019 WL 3059932, at *7. Relying on the reading of the statute's plain language in Huffman, the Court also found Section 514 must apply to all employees covered under the CBA for the claim to be preempted. Id. at *9. Here too, the Court adopts the reading of the statute's plain language in Huffman, to find that the CBA does not meet Section 514's requirements because it does not meet the requirements with respect to all employees.
The Court does not find the authority Defendant relies on to be persuasive, because those cases did not involve the same issue and did not interpret the statute as to this specific inquiry. Reply at 6; see e.g., Curtis, 913 F.3d at 1153-54 ("[Plaintiff] does not dispute that both CBA's expressly provide [] the [expressed requirements] of Section 514."). Accordingly, the Court finds "[P]laintiff's asserted cause of action involves a right conferred upon an employee by virtue of state law, not by a CBA." Huffman, 2019 WL 2563133, at *6.
2. Step 2: Whether The State Law Right is Substantially Dependent on the CBA
The Court must next consider whether Plaintiff's cause of action is nevertheless "substantially dependent on analysis of [the CBA]." Burnside, 491 F.3d at 1059-60. If the claim can be resolved by only "looking to" the CBA, then the claim is not preempted. Id.
Defendant argues Plaintiff's overtime claim is preempted because it is "substantially dependent" on the CBA. Opp'n at 10. Yet Defendant only argues that the claim requires the Court to look to the CBA to determine if it meets Section 514 requirements and to determine "what is the proper rate of pay for [] hours worked." Opp'n at 13. But the Ninth Circuit made clear in Burnside that looking to the CBA "merely to discern that none of its terms is reasonably in dispute," or to "comput[e] [a] penalty," "is [not] enough to warrant preemption." 491 F.3d at 1060. Moreover, Defendant already admitted that the wage structure in this CBA does not meet the state minimum wage pay rate requirement. Opp'n at 7-10. Thus, the resolution of Plaintiff's claim does not require more than just a mere reference to the CBA. Plaintiffs claims are therefore not preempted, because the overtime claim is not substantially dependent on analysis of the CBA.
3. Supplemental Jurisdiction
Because Plaintiff's second cause of action is not preempted by Section 301, the court lacks subject matter jurisdiction over this claim. See Burnside, 491 F.3d at 1060. The Court therefore does not have supplemental jurisdiction over Plaintiff's other causes of action.
III. ORDER
For the reasons set forth above, the Court GRANTS Plaintiff's Motion to Remand this case to the Sacramento County Superior Court.
IT IS SO ORDERED. Dated: July 7, 2020
/s/_________
JOHN A. MENDEZ,
UNITED STATES DISTRICT JUDGE