Opinion
Case No. CV 08-07919 GAF (PJWx)
08-05-2011
Summer York v. Starbucks Corporation et al
CIVIL MINUTES - GENERAL
Present: The Honorable GARY ALLEN FEESS Chris Silva for Renee Fisher
Deputy Clerk None
Court Reporter / Recorder N/A
Tape No. Attorneys Present for Plaintiffs:
None Attorneys Present for Defendants:
None
Proceedings: (In Chambers)
ORDER RE: MOTION FOR RECONSIDERATION
I. INTRODUCTION AND BACKGROUND
Plaintiff Summer York ("York" or "Plaintiff") filed this putative class action against Defendants Starbucks Corporation and Starbucks Coffee Company (collectively, "Defendants") on December 2, 2008. (Docket No. 1.) York, who worked for Defendants as a barista and supervisor from 2003 to 2008, alleged in her First Amended Complaint ("FAC"), among other labor code violations, a claim under California Labor Code section 226(a) based on defects in wage and hour statements periodically provided to Defendants' employees. (Docket No. 15, FAC ¶¶ 17, 91-98.) On November 9, 2009, Defendants moved for summary judgment on Plaintiff's first, fourth, fifth, and seventh causes of action, which included the section 226(a) claim, and argued that its wage and hour statements substantially complied with all California requirements. (Docket No. 60, Not. at 1.) Plaintiff opposed the motion. (Docket No. 61, Not.)
On December 3, 2009, the Court issued an order addressing, inter alia, whether (a) Plaintiff had adequately established section 226(e)'s injury requirement; and (b) Defendants' failure to include its proper name, total hours worked, and hourly rate for overtime work violated section 226(a). (Docket No. 70, 12/3/09 Order at 10-17.) Relying on various district court cases, the Court first explained in its order that Plaintiff had adequately met the injury requirement under section 226(e) when she established that she was confused, needed to conduct arithmetic calculations, and was unable to verify the amounts she was paid. (Id. at 11-12.) Next, the Court granted Defendants' motion for summary adjudication as to Plaintiff's section 226(a) claim, to the extent it relied on an improper-name theory. (Id. at 12-14.) Finally, the Court denied Defendants' motion with respect to the section 226 (a)(2) and (a)(9) violations because the wage statements did not add together the regular and overtime hours, and failed to list the specific hourly rate for overtime work, respectively. (Id. at 14-17.)
Defendants now move for reconsideration of this Court's order. (Docket No. 142, Not. at 1.) Specifically, Defendants contend that the Court should reconsider its decision with respect to the injury requirement under section 226(e), and the "grand total" claim under section 226(a)(2), based on recent decisions in two California Courts of Appeal cases.
For the reasons discussed in greater detail below, the Court concludes that reconsideration of its ruling on summary judgment is appropriate, and, in view of recent California appellate decisions, that summary judgment should be granted with respect to the Labor Code § 226(e) and 226(a)(2) issues.
II. DISCUSSION
A. LEGAL STANDARD
1. RECONSIDERATION
Rule 54(b) of the Federal Rules of Civil Procedure provides that "any order or other decision, however designated, that adjudicates fewer than all the claims or the rights and liabilities of fewer than all the parties does not end the action as to any of the claims or parties and may be revised at any time before the entry of a judgment adjudicating all the claims and all the parties' rights and liabilities." FED. R. CIV. P. 54(b). "In this district, motions for reconsideration are governed by Local Rule 7-18," Milton H. Green Archives, Inc. v. CMG Worldwide, Inc., 568 F. Supp. 2d 1152, 1162 (C.D. Cal. 2008), which provides as follows:
A motion for reconsideration of the decision on any motion may be made only on the grounds of (a) a material difference in fact or law from that presented to the Court before such decision that in the exercise of reasonable diligence could not have been known to the party moving for reconsideration at the time of such decision, or (b) the emergence of new material facts or a change of law occurring after the time of such decision , or (c) a manifest showing of a failure to consider material facts presented to the Court before such decision. No motion for reconsideration shall in any manner repeat any oral or written argument made in support of or in opposition to the original motion.C.D. Cal. R. 7-18. Whether to grant reconsideration is committed to the sound discretion of the court. Navajo Nation v. Confederated Tribes & Bands of the Yakama Indian Nation, 331 F.3d 1041, 1046 (9th Cir. 2003). Here, Defendants are moving for reconsideration pursuant to the second prong—intervening change of law. (Not. at 1.)
2. RELEVANT SUBSTANTIVE LAW
California Labor Code section 226, subdivision (a)(2) provides, in pertinent part, as follows:
Every employer shall, semimonthly or at the time of each payment of wages, furnish each of his or her employees, either as a detachable part of the check, draft, or voucher paying the employee's wages, or separately when wages are paid by personal check or cash, an accurate itemized statement in writing showing . . . (2) total hours worked by the employee . . . .CAL. LAB. CODE § 226(a) (emphasis added).
Moreover, under section 226(e),
An employee suffering injury as a result of a knowing and intentional failure by an employer to comply with subdivision (a) is entitled to recover the greater of all actual damages or fifty dollars ($50) for the initial pay period in which a violation occurs and one hundred dollars ($100) per employee for each violation in a subsequent pay period, not exceeding an aggregate penalty of four thousand dollars ($4,000), and is entitled to an award of costs and reasonable attorney's fees.Id. at § 226(e) (emphasis added). B. APPLICATION
Defendants' motion for reconsideration is based on two California Courts of Appeal decisions that were rendered after this Court's order regarding the motion for summary adjudication. In her opposition brief, Plaintiff contends, among other things, that Defendants' motion fails at the outset because (1) "the California Supreme Court has not spoken on point, as to either the Section (a)(2) 'total hours' mandate or the Section 226(e) 'injury' standing prerequisite," and (2) the two cases relied upon by Defendants are not binding on these issues. (Opp. at 6.) Plaintiff is correct on the facts but wrong on the law.
Circuit law teaches that this Court " must follow the decision of an intermediate state court unless other persuasive authority [indicates] that the state supreme court would decide otherwise." Spinner Corp. v. Princeville Dev. Corp., 849 F.2d 388, 390 n.2 (9th Cir. 1988) (citing Richardson v. United States, 841 F.2d 993, 996 (9th Cir. 1988)) (emphasis added); see also Asencio v. Miller Brewing Co., 283 Fed. Appx. 559, 561 (9th Cir. 2008) (stating that "[a]n exception to the law of the case doctrine allows the district court sitting in diversity to reexamine the previously decided issue when 'there has been a dispositive intervening decision of an intermediate appellate state court.'") (quoting Richardson, 841 F.2d at 996). The reason for the rule is fairly obvious. "When the California Supreme Court has not spoken, California Courts of Appeal decisions are data for determining how the highest California court would rule." Scandinavian Airlines Sys. v. United Aircraft Corp., 601 F.2d 425, 427 (9th Cir. 1979) (citing West v. A. T.& T. Co., 311 U.S. 223, 237 (1940)).
Accordingly, the Court finds that Defendants' reliance on the two California Courts of Appeal cases is justified for this motion for reconsideration, and proceeds to analyze the merits of Defendants' contentions. See Hughes Aircraft Co. v. Hartford Accident and Indemn. Co., 1994 WL 269161, at * 6 (C.D. Cal. Mar. 28, 1994) (stating that a new California Court of Appeal case was proper subject matter for a motion for reconsideration).
1. WHETHER PLAINTIFF SUFFERED AN INJURY
Defendants first contend that the Court should reconsider whether Plaintiff in fact suffered an "injury" under section 226(e) based on the recent decision in Price v. Starbucks Corp., 122 Cal. Rptr. 3d 174 (Ct. App. 2011). In Price, the court considered whether the plaintiff suffered the type of injury contemplated under section 226(e) when, because of the missing information on her wage statements, she was confused and possibly underpaid, she was required to file a lawsuit on behalf of the putative class, and was forced to attempt to reconsider the putative class members' time and pay records. Id. at 178.
In analyzing this issue, the court first explained that the injury requirement under section 226(e) "cannot be satisfied simply if one of the nine itemized requirements in section 226, subdivision (a) is missing from a wage statement." Id. at 179 (citations omitted). Moreover, the court noted that "[b]y employing the term 'suffered injury,' the statute requires that an employee may not recover for violations of section 226, subdivision (a) unless he or she demonstrates an injury arising from the missing information." Id. (internal quotation marks and citation omitted).
Ultimately, the court held that the plaintiff failed to adequately establish the injury requirement under this statute, and stated as follows:
[The plaintiff] alleged a 'mathematical injury,' that required him to add up his overtime and regular hours and to ensure his overtime rate of pay is correct, but the allegedly missing information from [the plaintiff's] wage statement is not the type of mathematical injury that requires 'computations to analyze whether the wages paid in fact compensated [him] for all hours worked.'Id. (quoting Jaimez v. DAIOHS USA, Inc., 105 Cal. Rptr. 3d 443, 460 (Ct. App. 2010).
The court further explained:
[The plaintiff] only speculates on the 'possible underpayment of wages due,' which is not evident from the wage statements attached to the complaint. [The plaintiff's] complaint, therefore, is distinguishable from the plaintiffs in the cases he relies on that sufficiently alleged (and presented evidence) of an injury arising from inaccurate or incomplete wage statements, which required those plaintiffs to engage in discovery and mathematical computations to reconstruct time records to determine if they were correctly paid. (See, e.g., Wang v. Chinese Daily News, Inc. (C.D. Cal. 2006) 435 F. Supp. 2d 1042, 1050, aff'd. on other grounds (9th Cir.2010) 623 F.3d 743 [wage statements inaccurately listed hours worked and omitted hourly wage]; see also Ortega v. J.B. Hunt Transport, Inc. (C.D. Cal. 2009) 258 F.R.D. 361, 373-374 [wage statements failed to include hours worked and applicable hourly rate]; Perez v. Safety-Kleen Systems, Inc. (N.D. Cal.2008) 253 F.R.D. 508, 517 [inaccurate hours on wage statements]; Jaimez v. DAIOHS USA, Inc., supra, at pp. 1305-1306, 105 Cal. Rptr. 3d 443 [wage statement listed 'total hours paid,' which left employees unable to determine if they were paid for all hours worked]; Cicairos v. Summit Logistics, Inc. (2005) 133 Cal. App. 4th 949, 956, 961, 35 Cal. Rptr. 3d 243 [inaccurate hours on wage statements].) [The plaintiff's] simple math is not based upon any allegation that the information is inaccurate.Id. (emphasis added).
Here, Plaintiff purportedly suffered injuries because she was confused by the wage statements, had to add up her overtime and regular hours, and felt that she could not accurately determine her pay and what she was owed when the statements did not list the overtime rate of pay, even though she was aware that the overtime rate of pay was a time and a half her hourly rate. (See 12/3/11 Order at 12); (see Docket No. 60, Knopp Decl., Ex. A [York Depo. at 167:1-171:14]). Under similar circumstances, the court in Price held that this is "not the type of mathematical injury that requires computations to analyze whether the wages paid in fact compensated [her] for all hours worked. 122 Cal. Rptr. 3d at 179 (internal quotation marks and citation omitted). Specifically, consistent with Price, Plaintiff would not be considered to have suffered an injury, within the meaning of section 226(e), simply because she had to perform basic math by adding the overtime and regular hours together, ensure that her overtime rate of pay was correct, and speculate on the possibility that she may have been underpaid. Id. at 179. Instead, she would have to show that the information on her wage statement was either inaccurate or incomplete, i.e., it did not contain the hours worked or the regular hourly rate. Id.
Because Plaintiff has failed to make such a showing, she can no longer recover damages under section 226(e). Thus, upon reconsideration, the Court GRANTS Defendants' motion for summary judgment on this issue.
After the Court resolved the summary judgment motion, Defendants moved to stay Plaintiff's wage statement claim until the Price action was heard on appeal. (Docket No. 83, Not. at 1.) This Court ultimately denied Defendants' motion to stay, but recognized in its order that Plaintiff's wage statement claim was substantially similar to the wage statement cause of action that was alleged in Price. (Docket No. 93, 8/5/11 Order at 10, 16.) This Court also recognized that "[i]n theory, the Price Court of Appeal[] could affirm the Superior Court's decision as to all of the wage-statement claims, contradict this Court's view of Labor Code section 226, and produce a published opinion describing its conclusion." (Id. at 11.) Price did just that.
2. WHETHER WAGE STATEMENTS NEED TO INCLUDE A GRAND TOTAL
The Court next considers Defendants' argument that, based on the California Court of Appeal decision in Morgan v. United Retail, Inc., 113 Cal. Rptr. 3d 10 (Ct. App. 2010), their wage statements did not need to aggregate the regular and overtime hours and provide a grand total of the hours worked by an employee. (Mem. at 7-10.) The Court agrees. In Morgan, the court considered whether a wage statement that separately listed the total regular and overtime hours worked during a pay period violated Labor Code section 226(a)(2). Id. at 17. Because this issue was a matter of first impression, the court was required to construe "showing" and "total hours worked," as used in section 226(a)(2). Id. The court explained that the word "show" meant "'to cause or permit to be seen,' 'to offer for inspection,' or 'to make evident or apparent: serve as the means to reveal or make visible.'" Id. (citation omitted). Further, the court defined the adjective "total" to mean "'of or relating to something in its entirety,' 'viewed as an entity: complete in all details,' or 'constituting an entire number or amount.'" Id. (citation omitted). "Based on the plain and commonsense meaning of these words," the court concluded that the defendant's "wage statements complied with section 226 by 'showing . . . total hours worked.'" Id.
In reaching this holding, the court found it important that the defendant's "wage statement accurately listed the total number of regular hours and the total number of overtime hours worked by the employee during the pay period, and that the employee could determine the sum or all hours worked without referring to time records or other documents." Id. Because the hours were accurate on the wage statements, the court explained that employees "could simply add together the total regular hours figure and the total overtime hours figure shown on the wage statement to arrive at the sum of hours worked." Id. The court further noted that there was nothing in the plain language of section 226 that required the defendant to include a separate category with the sum of the total regular and overtime hours in the wage statements. Id. at 18-19. In sum, the court held that based on the wage statements provided by the defendant, the employees "could confirm whether they were being compensated for all hours worked at the appropriate rates of pay without having to first calculate the sum of all regular and overtime hours worked," and thus concluded that there was no section 226(a)(2) violation. Id. at 20.
Here, similar to Morgan, Defendants' wage statements also separately "provide[d] hourly totals for 'each category' of regular and overtime work," but failed to include an aggregate total figure of these hours. (12/3/2009 Order at 14.) Because the court in Morgan concluded that such a wage statement format complies with section 226(a)(2)—considering that employees "could simply add together the total regular hours figure and the total overtime hours figure shown on the wage statement to arrive at the sum of hours worked," Morgan, 113 Cal. Rptr. 3d at 17—the Court upon reconsideration GRANTS Defendants' motion for summary judgment as to the section 226 cause of action to the extent it alleges a violation of subdivision (a)(2).
III. CONCLUSION
The Court concludes that the two recent California Courts of Appeal cases, Price and Morgan, squarely address issues that this Court confronted on December 3, 2009, and require reconsideration of Defendants' motion for summary adjudication. For the reasons discussed above, the Court DISMISSES the seventh cause of action to the extent Plaintiff seeks to recover damages under section 226(e) and avers liability based on a section 226(a)(2) wage statement violation. The hearing presently scheduled for Monday, August 15, 2011, at 9:30 a.m. is hereby VACATED.
IT IS SO ORDERED.