Bloomquist v. Covance, Inc. et alMOTION to Dismiss for Failure to State a ClaimS.D. Cal.October 20, 2016KELLEY DRYE & WARREN LLP Michael L. Gallion (State Bar No. 189128 Kathirn A. Visosky (State Bar No. 246438) David Van Pelt (State Bar No. 163690) 10100 Santa Monica Boulevard, 23^^ Floor Los Angeles, CA 90067-4008 Telephone: (310)712-6100 Facsimile: (310)712-6199 mgallion®kdleydrye.com kvisosky@kelleydrye dvanpeft@kelleydrye. 1 2 3 4 5 .com .com6 Attorneys for Defendants COVANCE_, INC., I-SHAN CHIANG, and AMY STASTNY 7 8 9 UNITED STATES DISTRICT COURT 10 SOUTHERN DISTRICT OF CALIFORNIA 11 12 Case No. 3:16-cv-02559-BAS-BLM Complaint Filed: August 3, 2016] Hon. Cynthia Bashant Courtroom 4B DEFENDANTS’ I-SHAN CHIANG AND AMY STASTNY’S NOTICE OF MOTION TO DISMISS UNDER FED. R. CIV. P. 12(b)(6) DANIEL L. BLOOMQUIST, an individual on behalf of himself and others similarly situated, all13 14 15 Plaintiff, 16 V. COVANCE, INC., a Delaware corporation; I-SHAN CHIANG, an individual; AMY STASTNY, an individual; and DOES 1-100, inclusive 17 18 Hearing Date: November 21, 2016 NO ORAL ARGUMENT UNLESS REOUESTED BY THE COURT 19 20 Defendant. 21 22 23 24 25 26 27 28 LA01\V1SOK\729951.1 NOTICE OF MOTION TO DISMISS Case 3:16-cv-02559-BAS-BLM Document 6 Filed 10/20/16 Page 1 of 4 TO THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF CALIFORNIA AND TO ALL PARTIES AND THEIR COUNSEL OF RECORD: 1 2 3 4 PLEASE TAKE NOTICE that on November 21, 2016, or as soon thereafter as possible, in the courtroom of the Honorable Cynthia Bashant located at Courtroom 4B, United States District Court, 221 West Broadway, San Diego, CA, 92101, Defendants I-Shan Chiang (“Chiang”) and Amy Stastny (“Stastny”) (collectively “Individual Defendants”) will and hereby do move for an order dismissing Plaintiffs Complaint and all causes of action as to Individual Defendants Chiang and Stastny pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure. As set forth in Defendants’ Memorandum of Points and Authorities, filed concurrently herewith, because there is no sustainable legal theory offered or factual basis provided to hold the Individual Defendants liable, they should be dismissed from this action with prejudice. This Motion is based on this Notice of Motion, the Memorandum of Points and Authorities, Declaration of Kathryn Visosky, Request for Judicial Notice, all pleadings and papers on file in this action, and any oral argument or documentary matters as may be presented to the Court at or before the hearing on this Motion. This motion is made following the conference of counsel pursuant to the Honorable Cynthia Bashant United States District Judge Standing Order for Civil Cases which took place on October 13, 2016. 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 KELLEY DRYE & WARREN LLPDATED: October 20. 2016 24 25 /s/Kathryn A. Visosky Kathryn A. Visosky Attorneys for Defendants By: 26 27 28 IT.A01\VTSOK\72995.L1 NOTICE OF MOTION TO DISMISS Case 3:16-cv-02559-BAS-BLM Document 6 Filed 10/20/16 Page 2 of 4 1 PROOF OF SERVICE 2 STATE OF CALIFORNIA, CITY AND COUNTY OF LOS ANGELES I am employed in the County of Los Angeles, State of California. I am over the age of 18 and not a party to the within action; my business address is: 3 4 On October 20, 20161 served the documents') described as DEFENDANTS’ I-SHAN CHIANG AND AMY STASTNY’S NOTICE OF MOTION TO DISMISS UNDER FED. R, CIV. P. 12(b)(6) in this action addressed as follows: 5 6 7 SEE ATTACHED LIST8 (BY MAIL) True and correct copies of the aforementioned document(s) were deposited, in a sealed envelope with postage thereon hilly prepaid, with the U.S. Postal Service on that same cfay to be mailed via first class mail at Los_ Angeles, California. I am aware that on motion of the party served^ service is presumed invalid if postal cancellation date or postage meter date is more than one day after date of deposit for mailing in affidavit. 9 10 11 12 □ go BE SERVED BY THE COURT VIA NOTICE OF ELECTRONIC FILING (NEF)) Pursuant to the controlling Rules, the aforementioned document(s) will be served by the court via NEF and proper linkfs) to the document(s). On , I checked the appropriate CM/ECF docket for this case or proceeding and determined that the aforementioned person(s) has/have consented to receive r^F transmission at the aforementioned electronic addresses. 13 14 15 16 □ (BY ELECTRONIC SERVICE) On , I transmitted the aforementioned document(s) as PDF attachments to the aforementioned electronic notification address(es). The transmission originated from my electronic notification address, which is , and was reported as complete and without error. 17 18 19 □ (BY PERSONAL SERVICE) I placed the aforementioned document(s) in sealed envelope and I delivered such envelope by hand to the offices of the a 20 addressee. 21 (BY OVERNIGHT DELIVERY) I placed the aforementioned document(s) in a sealed envelope with postage thereon fhlly prepaid and I caused said envelope to be delivered overnight via an overnight delivery service in lieu of delivery by mail to the addressee(s). Executed on October 20, 2016 at Los Angeles, California. I declare under penalty of perjury under the laws of the United States that the above is true and correct. A □ 22 23 24 25 26 Mmm21 TERI ADAMS 28 LA01\ADAMTE\729862.1 Case 3:16-cv-02559-BAS-BLM Document 6 Filed 10/20/16 Page 3 of 4 SERVICE LIST1 2 Patrick N. Keegan, Esq. James M. Treglio, Esq. KEEGAN & BAKER, LLP 6156 Innovation Way Carlsbad, CA 92009 Attorneys for Plaintiff Daniel L. Bloomquist 3 Tel: (760) 929-9303 Fax: (760) 929-92604 5 t)keegan@keeganbaker.com itreglio@keeganbaker;Com6 7 Walter Haines, Esq. THE UNITED EMPLOYEES LAW GROUP 5500 Boisa Avenue, Suite 201 Huntington Beach, CA 92649 Attorneys for Plaintiff Daniel L. Bloomquist 8 Tel: (310)234-5678 Fax: (562)256-10069 10 walter@ whaines. com 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 LA0I\ADAMTE\729862.1 Case 3:16-cv-02559-BAS-BLM Document 6 Filed 10/20/16 Page 4 of 4 KELLEY DRYE & WARREN LLP Michael L. Gallion (State Bar No. 189128 Kathryn A. Visosky (State Bar No. 24643 David Van Pelt (State Bar No. 163690) 10100 Santa Monica Boulevard, 23’’^ Floor Los Angeles, CA 90067-4008 Telephone: (310)712-6100 Facsimile: (310) 712-6199 mgallion®kelleydrye.com kvisosky@kelleydrye dvanpeft@kelley drye, Attorneys for Defendants COVANCR INC., I-SHAN CHIANG, and AMY STASTNY 1 ')2 3 4 5 .com .com6 7 8 9 UNITED STATES DISTRICT COURT 10 SOUTHERN DISTRICT OF CALIFORNIA 11 12 DANIEL L. BLOOMQUIST, an individual on behalf of himself ^d all others similarly situated, Case No. 3:16-cv-02559-BAS-BLM Complaint Filed: August 3, 2016’ Hon. Cynthia Bashant Courtroom 4B 13 14 15 Plaintiff, 16 DEFENDANTS’ I-SHAN CHIANG AND AMY STASTNY’S MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF MOTION TO DISMISS UNDER FED. R. CIV. P. 12(b)(6) V. COVANCE, INC., a Delaware corporation; I-SHAN CHIANG, an individual; AMY STASTNY, an individual; and DOES 1-100, inclusive 17 18 19 20 Defendant. Hearing Date: November 21, 2016 21 NO ORAL ARGUMENT UNLESS REOUESTED BY THE COURT22 23 . 24 25 26 27 28 LA01\VISOK\730029.I MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF MOTION TO DISMISS Case 3:16-cv-02559-BAS-BLM Document 6-1 Filed 10/20/16 Page 1 of 21 TABLE OF CONTENTS Page I. INTRODUCTION1 1 IL STATEMENT OF FACTS.................. A. PROCEDURAL HISTORY...... B. PLAINTIFF ’ S ALLEGATIONS 2 2 3 ,2 4 2 III. LEGAL ANALYSIS :.45 A LEGAL STANDARD6 ,4 B. NO PRIVATE RIGHT OF ACTION WAS CREATED AGAINST INDIVIDUALS UNDER CALIFORNIA LABOR CODE SECTION 558.1 ........................................................... 7 8 5 California Courts Employ the “Legislative Intent Approach to Statutory Construction................... There Is No Basis on which the Court Could Infer the Existence of a Private Remedy for Violations of Section 558.1.............................................................................. 1.9 ?5 5 10 2. 11 7 12 (a) The plain statutory languag not allow a private right or action e of Section 558.1 does 13 8 (b) The Legislature did not intend to create a private right or action for alleged violations of Section 558.1............................................................ ...... PLAINTIFF FAILS TO STATE A COGNIZABLE LEGAL CLAIM AGAINST DEFENDANTS CHIANG AND STASTNY.... 10 Plaintiff Fails to Allege Facts Sufficient to Support his Conclusory Allegation that Defendants Chiang and Stastny Are “Directors”....................... . Plaintiff Fails to Allege Facts to Support a Claim that Chiang or Stastny Violated any IWC Provisions or Labor Code Section....................................... 14 915 C. 16 1.17 1018 2.19 1220 D. Plaintiffs Sixth Cause of Action for Unfair Business Practices Must Be Dismissed As To The Individual Defendants............. 21 13 22. IV. CONCLUSION 14 23 24 25 26 27 28 LAQ1\VJSQK\73QQ29.1 MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF MOTION TO DISMISS 1 Case 3:16-cv-02559-BAS-BLM Document 6-1 Filed 10/20/16 Page 2 of 21 1 TABLE OF AUTHORITIES 2 Page(s) 3 Cases 4 Ashcroft V. Iqhal^ 129 S.Ct 1937 (2009)................................................................... Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007)...................................................................... Bradstreetv. Wong, 161 CaLApp.4th 1440 (2008)....................................................... Crusader Ins. Co. V. Scottsdale Ins, Co., 54 Cal.App.4th 121 (1997)...................................................... .... Farmers Ins. Exchange v. Superior Ct., 2Cal.4th377(1992)..................................................................... Kasky v. Nike, Inc., 27 Cal.4th 939 (2002)..................................................... ............. Kelly-Zurian v. Wohl Shoe Co., 22 Cal. App. 4th 397 (1994)......................................................... Livid Holdings Ltd. v. Salomon Smith Barney, Inc., 416 F.3d 940 (9th Cir. 2005)........................................................ Lu V. Hawaiian Gardens Casino, Inc., 50 Cal.4th592 (2010)................................................................... Lunger v. Witt, No. 2:15-cv-00486-MCE-DAD, 2015 BL 233054 (E.D. Cal. July 17, 2015)....................................................................................... Martinez v. Combs, 49 Cal. 4th 35 (2010).................................................................... Mendiondo v. Centinela Hosp. Med. Ctr., 521 F.3d 1097 (9th Cir. 2008)....................................................... Moradi-Shalal v. Fireman’s Fund. Ins. Companies, 46 Cal.3d 287 (1988) ................................... ................................. 5 ,4, 12 6 7 4, 10 8 139 10 1, 1011 12 13 13 14 13 15 16 12 17 18 5 19 5,6, 7,920 21 22 13 23 . 24 13 25 26 4 27 6, 7, 1028 LAQ1\V1SQK\73QQ29,1............ MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF MOTION TO DISMISS ii Case 3:16-cv-02559-BAS-BLM Document 6-1 Filed 10/20/16 Page 3 of 21 Moss V. U.S. Secret Serv., 572F.3d962 (9th Cir. 2009)..................................... Navarro v. Block, 250F.3d729 (9th Cir. 2001)..................................... Noe V. Superior Ct., 237 CaLApp.4th316(2015)...................................... Reynolds v. Bement, 36CaL4th 1075 (2005)............................................. Roby V. McKesson Corp., 47 CaL4th 686 (2009)............................................... Royal Globe Ins. Co. v. Superior Ct., 23 Cal.3d 880 (1979)................................................ Schaefer v. Williams, 15 Cal.App.4th 1243 (1993)......... ............................ Scheuer v. Rhodes, 416 U.S. 232 (1974).......... ............................... ......... Taylor v. Trees, Inc., 58 F.Supp.3d 1092 (E.D. Cal. 2014)......................... U.S. V. Ritchie, 342F.3d903 (9th Cir. 2003)..................................... Vikco Ins. Servs., Inc. v. Ohio Indemnity Co., 70 CaLApp.4th55 (1999).......................................... Violante, v. Communities Southwest Dev. & Constr. Co., 138 Cal. App. 4th 972 (2006).............. ..................... White V. Ultramar, Inc,, 21 Cal.4th563 (1999)................................................ Whiteside v. Tenet Healthcare Corp., 101 CaLApp.4th 693 (2002)................................. . Statutes 1 52 3 4 4 5 5,6 6 7 11 8 9 11 10 6, 1011 12 713 14 4 15 16 11 17 18 5 19 20 6,7 21 622 23 1124 25 1326 27 6Cal. Bus. & Prof. Code § 1707028 rAf)i\visoK\7:^nn2Q 1 MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF MOTION TO DISMISS 111 Case 3:16-cv-02559-BAS-BLM Document 6-1 Filed 10/20/16 Page 4 of 21 Cal. Bus. & Prof. Code § 17200, etseq........ Cal. Civ. Code §51.9.................................. Cal. Civ. Code § 3294(b)............................. Cal. Code of Civ. Proc. § 1858................... Cal. Health & Safety Code § 1285, subd. (c) Cal. Lab. Code § 203.................................... Cal. Lab. Code § 218.................................... Cal. Lab. Code § 218.5................................. Cal. Lab. Code § 226.................................... Cal. Lab. Code §§ 226.7 and 512................. Cal. Lab. Code §351..... ............................... Cal. Lab. Code §§ 510 and 1198......... ......... Cal. Lab. Code § 558.1................................. Cal. Lab. Code § 972.................................... Cal. Lab. Code §§ 972, 1404........................ Cal. Lab. Code § 1404.......... ........................ 1 2, 13 2 6 3 8, 11 4 7 5 66 27 8 6 9 7,8 10 2 11 2 12 913 214 15 passim 16 8 17 7 18 9 19 Class Action Fairness Act 220 Other Authorities21 22 California Senate Bill 588 7 23 Federal Rule of Civil Procedure 12(b)(6) 1,4,5 24 Federal Rule of Civil Procedure 56 5 25 Request for Judicial Notice^ Ex. A Request for Judicial Notice, Ex. B 8, 9, 10 26 8, 1027 28 LA01\VISOK\730029.1 MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF MOTION TO DISMISS JiL Case 3:16-cv-02559-BAS-BLM Document 6-1 Filed 10/20/16 Page 5 of 21 MEMORANDUM OF POINTS AND AUTHORITIES1 I. INTRODUCTION2 3 Defendants I-Shan Chiang (“Chiang”) and Amy Stastny (“Stastny”) (collectively, “Individual Defendants”) bring this motion to dismiss the Individual Defendants from this wage and hour case under Federal Rule of Civil Procedure 4 5 6 12(b)(6). The claims against both of the Individual Defendants fail on two independent grounds. First, none of the five (5) causes of action alleged by Plaintiff Daniel Bloomquist (“Plaintiff’) can be brought by Plaintiff against individuals. Plaintiffs attempt to hold Chiang and Stastny personally liable for the alleged wage and hour violations of Covance under California Labor Code section 558.1 (“Section 558.1”) is improper - neither the text of Section 558.1 nor the legislative history suggests that the Legislature intended to create a private right of action for employees against persons acting on behalf of their employers like the Individual Defendants here. To the contrary, by this recently enacted statute, the Legislature plainly intended that power to be reserved for the Labor Commissioner. Second, even if Section 558.1 did provide for a private right of action against individuals. Plaintiff has not and cannot meet his burden of alleging facts sufficient to sustain any cause of action against Chiang or Stastny. Indeed, Plaintiff provides only the title of their Covance positions along with a single vague allegation that each “oversaw” the work of putative class members. The Complaint is devoid of any fact or allegation as to how Chiang or Stastny supposedly “violate[d], or cause[d] to be violated,” the pertinent provisions of the Wage Order or Labor Code, as expressly required under Section 558.1. Because there is no sustainable legal theory offered or factual basis provided to hold the Individual Defendants liable, they should be dismissed from this action with prejudice. 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 1rA0l\VISOK\730n29.1 MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF MOTION TO DISMISS Case 3:16-cv-02559-BAS-BLM Document 6-1 Filed 10/20/16 Page 6 of 21 fNf 11. STATEMENT OF FACTS1 A. PROCEDURAL HISTORY2 3 On or about August 3, 2016, Plaintiff filed a Class Action Complaint (the Complaint”) against Covance, Chiang and Stastny in the Superior Court of the State of California, County of San Diego entitled Daniel L Bloomquist, an individual, on behalf of himself and all others similarly situated, Plaintiff vs. Covance, Inc., a Delaware corporation; I-Shan Chiang, an individual; Amy Stastny, an individual; and Does 1-100, inclusive. The Complaint was assigned Case No. 37-2016-00026455-CU-OE-CTL. Covance filed its Answer in state court on October 11, 2016. On October 13, 2016, Covance timely removed the action to this Court under the Court’s original jurisdiction pursuant to the Class Action Fairness Act C‘CAFA”). B. PLAINTIFF’S ALLEGATIONS This matter is a wage and hour putative class action case filed on behalf of Plaintiff, a former Covance employee, and all current and former Covance employees in California holding the positions of Clinical Research Associate and Senior Clinical Research Associate. Plaintiff asserts the following claims for relief against all Defendants: (1) violation of Labor Code §§ 510 and 1198 - failure to pay overtime compensation; (2) violation of Labor Code §§ 226.7 and 512 - failure to provide meal periods and rest periods; (3) violation of Labor Code § 226 - failure to properly itemize wage statements; (5) violation of Labor Code § 203 - failure to pay all wages owed upon termination; and (6) unlawful and unfair business acts and practices in violation of Business & Professions Code § 17200, etseq. 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 125 26 27 1 Plaintiffs Complaint does not contain a Fourth Cause of Action. This appears to be due to a numbering error.28 2LAQ1W1SQK\73QQ29.1 MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF MOTION TO DISMISS Case 3:16-cv-02559-BAS-BLM Document 6-1 Filed 10/20/16 Page 7 of 21 The crux of the Complaint is that these positions were misclassified as exempt, thus entitling putative class members to: (1) unpaid overtime; (2) payment for meal and rest periods, and (3) relief under several derivative claims based on the alleged misclassification (inaccurate wage statements, inaccurate termination pay, unfair business practices). Plaintiffs only allegations specific to the Individual Defendants are conclusory references in the paragraphs identifying the “Parties”: 1 2 3 4 5 6 7 8 Defendant I-SHAN CHIANG (“Chiang”) is a citizen of the State of California, and currently and continuously since 2015, has been employed by Covance as its Senior Director, Strategy & Planning. In that capacity, Chiang is responsible for the providing strategies for the successful implementation of clinical trial programs for Covance’s clients. In that capacity, she oversaw the work of Clinical Research Associates and Senior Clinical Research Asspciates, and is being sued in her capacity as a director of Covance, and is personally liable under Labor Code § 558.1 as a natural person who is an owner, director, officer, or managing agent of Covance, Plaintiffs and the Class’ employer. 7. 9 10 11 12 13 14 Defendant AMY STASTNY (“Stastny”) is a citizen of the State of California, and currently and continuously since 2014 has been employed by Covance as the Director of Global Clinical Trial Operations. In that capacity, she oversaw the work of Clinical Research Associates and Senior Clinical Research Asspciates, and is being sued in her capacity as a director of Covance, and is personally liable under Labor Code § 558.1 as a natural person who is an owner, director, officer, or managing agent of Covance, Plaintiffs and the Class’ employer. 8. 15 16 17 18 19 6-7. The Complaint is completely devoid of any allegations that the Individual Defendants caused any of the violations of the IWC provisions or California Labor Code sections alleged in the Complaint^ much less how they did so. Likewise, while the Complaint parrots the language of Section 558.1 by stating the Individual Defendants are “directors,” it provides no facts to support that contention. See Complaint Complaint,20 21 22 23 24 1-81.25 26 27 28 _1LAQ1\VISQK\73QQ29.1 MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF MOTION TO DISMISS Case 3:16-cv-02559-BAS-BLM Document 6-1 Filed 10/20/16 Page 8 of 21 III. LEGAL ANALYSIS1 A. LEGAL STANDARD2 A Rule 12(b)(6) motion is proper here because it “tests the legal sufficiency of a claim.” Navarro v. Block, 250 F.3d 729, 732 (9th Cir. 2001). Dismissal under Rule 12(b)(6) is appropriate when “the complaint lacks a cognizable legal theory or sufficient facts to support a cognizable legal theory.” E.g., Mendiondo v. Centinela Hosp. Med Ctr., 521 F.3d 1097, 1104 (9th Cir. 2008). To survive a Rule 12(b)(6) motion to dismiss, a “complaint must contain 3 4 5 6 7 8 sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face. 9 Ashcroft V. Iqbal, 129 S.Ct. 1937, 1949 (2009) {quoting Bell Atl Corp. V. Twomhly, 550 U.S. 544, 570 (2007)). A complaint does not need detailed factual allegations, but the “allegations must be enough to raise a right to relief above the speculative level.” Twombly, 550 U.S. at 555. 10 11 12 13 In deciding a motion to dismiss, the court should assume the veracity of well-pleaded factual allegations,” but is “not bound to accept as true a legal conclusion couched as a factual allegation.” Iqbal, 111 S.Ct. at 1950. “Labels and conclusions” or “a formulaic recitation of the elements of a cause of action will not Naked assert!on[s]’ devoid of further factual 14 ((15 16 17 do.” Twombly, 550 U.S. at 555. enhancement’” are equally insufficient. Iqbal, 127 S.Ct. at 1949 {quoting Twombly, 18 19 550 U.S. at 557). Rather, to withstand 12(b)(6) scrutiny, a complaint must contain enough facts to state a claim to relief that is “plausible on its face.” Twombly, 550 U.S. at 570. 20 21 22 A claim has facial plausibility when the complaint’s factual content allows the court to draw the reasonable inference that the defendant is liable for the alleged The plausibility standard is not akin to a probability requirement,’ but it asks for more than a sheer possibility that a defendant has acted unlawfully.” Twombly, 550 U.S. at 556 {quotingScheuer v. Rhodes, 416 U.S. 232, 236 (1974)). 23 24 misconduct. Iqbal, 127 S.Ct. at 1949.25 26 27 28 Al,Am\VTSOK\7^00291 MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF MOTION TO DISMISS Case 3:16-cv-02559-BAS-BLM Document 6-1 Filed 10/20/16 Page 9 of 21 The Ninth Circuit summarizes the governing standard as follows: “In sum, for a complaint to survive a motion to dismiss, the non-conclusory ‘factual content’ and reasonable inferences from that content, must be plausibly suggestive of a claim entitling the plaintiff to relief.” Moss v. U.S. Secret Serv., 572 F.3d 962, 969 (9th Cir. 2009) (quotations omitted).^ Although denying leave to amend should not be done capriciously, it should not be granted if “the complaint could not be saved by an amendment.” See, e.g., Livid Holdings Ltd. v. Salomon Smith Barney, Inc., 416 F.3d 940, 946 (9th Cir. 2005). 1 2 3 4 5 6 7 8 9 10 B. NO PRIVATE RIGHT OF ACTION WAS CREATED AGAINST INDIVIDUALS UNDER CALIFORNIA LABOR CODE SECTION 558.1 11 12 The claims against the Individual Defendants fail because the newly-enacted statute relied upon by Plaintiff does not create a private cause of action against individuals. Indeed, neither the statutory language nor the legislative history support the existence of a claim against the Individual Defendants. California Courts Employ the “Legislative Intent” Approach to Statutory Construction It is well-settled under California law that “[a] violation of a state statute does Noe V. Superior Ct, 237 13 14 15 16 1.17 18 19 not necessarily give rise to a private cause of action. Cal.App.4th 316, 336 (2015), citingLw v. Hawaiian Gardens Casino, Inc., 50 Cal.4th 592, 596 (2010). Instead, whether a party has a right to sue depends on whether the Legislature has “manifested an intent to create such a private cause of 5? 20 21 22 23 24 25 ^ If a district court considers evidence outside the pleadings, a Rule 12(b)(6) motion to dismiss must be converted to a Rule 56 motion for summaryjud^ent, and the nonmoving party must be given an opportunity to respond. U.S. v. Ritchie,. 903, 907 (9th Cir. 2003). court may, however,consider certain materials - attached to the complaint, documents incorporated by reference in the complaint, or matters of judicial notice - without converting the motion to dismiss into a motion for summary judgment.” Id. at 908. 26 342 F.3d 27 28 5.LA01\VISOK\73QQ29.1 MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF MOTION TO DISMISS Case 3:16-cv-02559-BAS-BLM Document 6-1 Filed 10/20/16 Page 10 of 21 action” under the statute. Id.; Vikco Ins. Servs., Inc. v. Ohio Indemnity Co.^ 70 Cal.App.4th 55, 62 (1999), citingMoradi-Shalal v. Fireman's Fund. Ins. Companies, 46 Cal.3d 287, 294-95 (1988) (a private right of action exists only if the language of the statute or its legislative history clearly indicates the Legislature intended to create such a right). Legislative intent is revealed through the language of the statute and its legislative history. Noe, 237 Cal.App4th at 336; Lu, 50 Cal.4th at 596. 1 2 3 4 5 6 7 If the Legislature intends to create a private right of action, it does so with clear, understandable, unmistakable terms, as it has done in numerous other statutes....” Moradi-Shalal, 46 Cal.3d at 294-95 {citing Royal Globe Ins. Co. v. Sup. Ct, 23 Cal.3d 880, 896-97 (1979)) [dissent]; Lu, 50 Cal,4th at 597; see also Violante V. Communities Southwest Dev. & Constr. Co., 138 Cal. App. 4th 972 (2006) (denying a private right of action by a subcontractor’s employee against a prime contractor, where “[t]he entire statutory framework gives no indication of [such] a private right of action....”). One way in which a private right of action can be created is for a statute to expressly provide for it. See, e.g.. Cal. Civ. Code, § 51.9 (“[a] person is liable in a cause of action for sexual harassment” when a plaintiff proves certain elements); Cal. Health & Saf. Code, § 1285, subd. (c) (“[a]ny person who is detained in a health facility solely for the nonpayment of a bill has a cause of action against the health facility for the detention ... ,”), Alternatively, a statute may refer to a remedy or means of enforcing its substantive provisions, thereby making clear that a private right of action exists. See, e.g, Cal. Lab. Code § 218 (“[n]othing in this article shall limit the right of any wage claimant to sue directly or through an assignee for any wages or penalty due him under this article.”); Cal. Bus. & Prof Code, § 17070 (“[a]ny person ... may bring an action to enjoin and restrain any violation of this chapter and, in addition thereto, for the recovery of damages.”); id., § 6175.4, subd. (a) (“[a] client who 8 9 10 11 12 13 14 15 16 17 18 19 . 20 21 22 23 24 25 26 27 28 Al.A01\VTSOK\7^0n291 MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF MOTION TO DISMISS Case 3:16-cv-02559-BAS-BLM Document 6-1 Filed 10/20/16 Page 11 of 21 suffers any damage as the result of a violation of this article by any lawyer may bring an action against that person to recover or obtain one or more of the following remedies.”). Indeed, in those instances where the Legislature has created a private right of action for California Labor Code violations, it has done so unambiguously.^ If, however, a statute does not contain such obvious language, “resort to its legislative history is next in order. at pp. 300-301. To ascertain the intent of the Legislature and determine whether a private remedy exists under a statute, courts consider: (1) whether the language of the statute provides for a private right of action; and (2) whether any indicia exist that the Legislature intended to create such a remedy. Vikco, 70 Cal.App.4th at 61 (internal citations omitted); see also Schaefer v. Williams^ 15 Cal.App.4th 1243, 1248 (1993) (“if the Legislature had intended to create such a private action, it would have done so by clear and direct language”); Crusader Ins. Co. v. Scottsdale Ins. Co., 54 Cal.App.4th 121, 123 (1997) (legislative intent is the proper test for determining whether a private right of action is created). The general rule for interpreting statutes must be kept in mind. As noted in Vikco, this provision provides as follows: In the construction of a statute..., the office of the Judge is simply to ascertain and declare what is in terms or substance contained therein, not to insert what has been omitted, or to omit what has been inserted; and where there are several provisions or particulars, such a construction is, if possible, to be adopted as will give effect to all. Vikco, 70 Cal.App.4th at 61 {citing Cal. Code of Civ. Proc. § 1858). Using this well-settled analysis, it is clear the Legislature did not intend to provide for a private remedy for Section 558.1. Tlyre Is No Basis on which the Court Could Infer the Existence of a Private Remedy for Violations of Section SSSTT Section 558.1 was enacted in October 2015 by California Senate Bill 588 to 1 2 3 4 5 Lu, 50 Cal.4th at 597; Moradi-Shalal, 46 Cal.3d6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 2.24 25 26 27 28 3 See, e.g., Cal. Lab. Code §§ 218.5, 972, 1404. 1LA0l\VISOK\730Q29.1............................................ MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF MOTION TO DISMISS Case 3:16-cv-02559-BAS-BLM Document 6-1 Filed 10/20/16 Page 12 of 21 enhance the Labor Commissioner’s enforcement authority. Request for Judicial Notice, Exs. A (SB 588) and B (SB 588 Analysis). Neither the statutory language of Section 558.1, nor the legislative history surrounding it, demonstrate any intent to go further and create a private right of action against individuals acting in the scope of their employment. Cal. Lab. Code §558.1; Request for Judicial Notice, Exs. A (SB 588) and B (SB 588 Analysis). (a) The plain statutory language of Section 558.1 does not allow a private right of action. The plain statutory language of Section 558.1 does not create a private right of action on its face. Section 558.1 provides: (a) Any employer or other person acting on behalf of an employer, who violates, or causes to be violated, any provision regulating minimum wages or hours and days of work in any order of the Industrial Welfare Commission, or violates, or causes to be violated. Sections 203, 226, 226,7, 1193.0, 1194, or 2802, may be held liable as the employer for such violation. 1 2 3 4 5 6 7 8 9 10 11 12 13 (y For purposes of this section, the term “other person acting on behalf of an employer” is limitedto a natural person who is an owner, directorj officer, or managing agent of the employer, and the term “managing agent” has the same meaning as in subdivision (b) of Section 3294 of the Civil Code. 14 15 16 (c) Nothing in this section shall be construed to limit the definition of employer under existing law. Cal. Lab. Code § 558.1. Nothing in the statute authorizes a private citizen to sue under Section 558.1. As set forth in the examples below, is apparent that whenever the Legislature has seen fit to provide a private right of action for Labor Code violations, it has done so expressly. 17 18 19 20 21 22 23 In any action; This section shall not apply to an • Cal. Lab. Code § 218.5 [unlawful withholding of wages in the court action; action brought by the Labor Commissioner. • Cal. Lab. Code § 972 [fraudulent solicitation of employees] person.. .is liable to the party aggrieved, in a civil action, ... 24 the court shall;a (( 7} U 25 26 ...any 27 28 1LA01\VISQK\73QQ29.1_____________ _____ MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF MOTION TO DISMISS Case 3:16-cv-02559-BAS-BLM Document 6-1 Filed 10/20/16 Page 13 of 21 1 • Cal. Lab. Code § 1404 [failure to give proper notice re layoffs] - . .may bring a civil action... Such “clear, understandable, unmistakable terms” are absent from Section 558.1. In Lu, the California Supreme Court was called to determine if a private right of action existed under Labor Code 351. See Lu, 50 Cal.4th at 596-601. That statute provides that “[ejvery gratuity is hereby declared to be the sole property of the employee or employees to whom it was paid, given, or left for.” Id at 597. Despite the reference to “property” which could suggest a private right of action as with other property rights, the Lu Court concluded there was no intent to create a private right of action. In doing so, the court articulated a very high standard. The court held that the statute did not “unmistakably reveal legislative intent to provide wronged employees a private right to sue,” and rejected the proposition that a private right of action existed. Id. at 598. In this case, the statutory language is even more unclear. While the statute unmistakably provides for the potential individual liability of “owners, directors, officers, or managing agents,” it is completely silent about the right of employees to sue such individuals directly. Accordingly, in order for a private right of action to exist, it must be plainly evident from the legislative history. 2 ?5 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 (b) The Legislature did not intend to create a private action for alleged violations of Ejection 558.1. right of19 20 A review of Senate Bill 588 demonstrates the absence of any intention on the part of the Legislature to create a private cause of action under Section 558.1. To the contrary. Labor Code section 558.1 was enacted in October 2015 by Senate Bill 588 as part of an effort to enhance the enforcement authority of the Labor Commissioner, not individuals. {Request for Judicial Notice, Ex. A (SB 588)). The bill’s introductory summary explained that the “bill would authorize the Labor Commissioner to provide for a hearing to recover civil penalties against any employer or other person acting on behalf of an employer ... for a [wage and hour’ 21 22 23 24 25 26 27 28 9.T.Ani\visnK\7-^nn70 i MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF MOTION TO DISMISS Case 3:16-cv-02559-BAS-BLM Document 6-1 Filed 10/20/16 Page 14 of 21 violation ” Id. (emphasis added). The Senate Bill Analysis opined that the bill targeted “willflir’ wage theft and would give the ^^Labor Commissioner” additional avenues to enforce its judgments, not plaintiff employees. {Request for Judicial Notice, Ex. B (SB 588 Analysis)). Indeed, there is not one reference to a private right of action in the legislative history. Crusader, 54 Cal.App.4th at 133 (“[W]hen neither the language nor the history of a statute indicates an intent to create a new private right to sue, a party contending for judicial recognition of such a right bears a heavy, perhaps insurmountable, burden of persuasion.”). If the Legislature intended to confer a property right and a private right of action with respect to Section 558.1, history dictates it would have done so expressly. 1 2 3 4 5 6 7 8 9 10 11 I]f the Legislature truly had intended to grant., .claimants a private cause of action against an insurer for failing to settle claims against the insured, ‘then surely much more direct andprecise language would have been selected’ ... to the effect that administrative proceedings from civil 12 13 under the act would not ‘relieve or absolve’ an insurer liability ‘under the laws of this State.’... fOJne would reasonably have expected that the Legislature simply would have directly imposed such liability in clear, understandable, unmistakable as it has done in numerous other statutes, ’ Moradi-Shalal, 46 Cal.3d at 294-295 {citingRoyal Globe Ins. Co., 23 Cal. 3d at 896-897 (dissent)) [emphasis added]. Absent an unmistakable signal from the Legislature, no private right of action can be inferred. Accordingly, Plaintiffs Labor Code claims against the Individual Defendants must be dismissed. 14 15 terms. 16 17 18 19 20 21 22 C. PLAINTIFF FAILS TO STATE A COGNIZABLE LEGAL CLAIM AGAINST DEFENDANTS CHIANG AND STASTNY23 24 Assuming, arguendo, that a private right of action does exist under Section 558.1, Plaintiff s claims would still be incurably defective against the Individual Defendants because Plaintiff failed allege facts sufficient to state a claim or relief against either of them. See Twombly, 550 U.S. at 570., Plaintiff Fails to Allege Facts Sufficient to Support his Conclusory 25 26 27 1.28 ILI.Af)1\VTSOK\7-^On9,Q 1 MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF MOTION TO DISMISS Case 3:16-cv-02559-BAS-BLM Document 6-1 Filed 10/20/16 Page 15 of 21 Allegation that Defendants Chiang and Stastnv Are “Directors Until the enactment of section 558.1 of the Labor Code (effective January 1, 2016), individuals were generally precluded from liability for wage and hour violations under California law. See Reynolds v. Bement, 36 Cal.4th 1075, 1087 (2005) (holding that corporate agents were not liable for an employer’s failure to pay its employees’ wages). The plain language of Labor Code section 558.1 makes clear that it is designed to be no more than a limited exception to this principle. Pursuant to Section 558.1, only an “owner, director, officer, or managing agent of the employer” may be held liable. The statute defines “managing agenf’ the same as it does for punitive damages, which limits the scope of corporate liability for punitive damages to conduct engaged in by “an officer, director, or managing agent or the corporation.” Cal. Lab. Code § 558.1; Cal. Civ. Code § 3294. This group is narrow and limited to those individuals who exercise substantial discretion and authority over decisions that determine corporate policy. Roby v. McKesson Corp., 1 2 3 4 5 6 7 8 9 10 11 12 13 14 47 Cal.4th 686, 714, (2009); see also White v. Ultramar, Inc., 21 Cal.4th 563, 569, [1] lability turns 15 (1999). In Ultramar, the California Supreme Court made clear that not on the employee’s managerial classification or title, but on the extent of his 16 17 White, 21 Cal.4th at 569 (emphasis added); see Taylor V. Trees, Inc., 58 F.Supp.3d 1092,1105 (E.D. Cal. 2014) (noting that corporate agents who can give rise to punitive damages are those whose decisions “ultimately determine corporate policy”). In this case, the Complaint fails to allege any facts that can give rise to individual liability under this standard. In support of the allegation that the Individual Defendants are “directors” of Defendant Covance, Plaintiff offers nothing more than their titles (“Senior Director, Strategy & Planning” in the case of Chiang; and Director of Global Clinical Trial Operations” in the case of Stastny), and the assertion that each of them “oversaw” the work of putative class members. These allegations are plainly insufficient to state a claim as a matter of law. Indeed, courts decisionmaking discretion.18 19 20 21 22 23 24 25 26 27 28 ULAQI\VISQK\73QQ29J MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF MOTION TO DISMISS Case 3:16-cv-02559-BAS-BLM Document 6-1 Filed 10/20/16 Page 16 of 21 have made clear that supervisory authority over a plaintiff is insufficient to provide a basis for a corporate agent to qualify as an “officer, direct, or managing agent.” Kelly- Zurian v. Wohl Shoe Co., 22 Cal. App. 4th 397, 421 (1994) (supervisory employees do not qualify as an “officer, director or managing agent” unless they in fact exercise substantial discretion and decision making authority). Plaintiff has not and cannot allege any facts to support an allegation that Chiang or Stastny exercise substantial authority over decisions that ultimately determine corporate policy, or play a significant role in Covance’s corporate decision making. The Individual Defendants should be dismissed from this case with prejudice. 1 2 3 4 5 6 7 8 9 2. Plaintiff Fails to Allege Facts to Support a Claim that Chiang or Stastny Violated any IWC Provisions or Labor Code Sectioii 10 11 Even if Plaintiff alleged sufficient facts to establish that the Individual Defendants could be individually liable in this case, he still lacks the second essential element to imposing personal liability - that either of the Individual Defendants violated the Wage Order or Labor Code regarding Plaintiffs wages, hours and days of work. See Lab. Code §558.1. Plaintiff fails to even assert that Chiang or Stastny engaged in conduct that violated the Labor Code or Wage Orders, much less any facts regarding how they did so. Plaintiff fails to allege that the Individual Defendants played a role in classifying the putative class members as exempt, for example, or that they dictated the work schedules of putative class members. Instead of alleging facts that could support a claim against them, this case presents the precise type of “defendant- unlawfully-harmed-me” conclusory assertion that Supreme Court in Iqbal found impermissible. Iqbal, 556 129 S.Ct. at 1949. Plaintiffs failure to state facts sufficient to constitute a cause of action against Chiang and Stastny under Labor Code section 558.1 is an incurable defect necessitating dismissal of the Individual Defendants. 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 12i.Afn\vrsn]c\7^nn?Q i MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF MOTION TO DISMISS Case 3:16-cv-02559-BAS-BLM Document 6-1 Filed 10/20/16 Page 17 of 21 Plaintiffs Sixth Cause of Action for Unfair Business Practices Must Be Dismissed As To The Individual Defendants D.1 2 Finally, Plaintiffs attempt to name Chiang and Stastny in his claim under California’s Business and Professions Code section 17200 et: seq. (“Section 17200”) should fail, for several reasons. In the first instance, the claim is merely duplicative of and dependent on the wage and hour claims. It does not represent distinct alleged wrongdoing. Stated differently, the “unlawful” prong of Section 17200 makes a violation of the underlying law a per se violation of Section 17200. See Kasky v. Nike, Inc., 27 Cal.4th 939, 950 (2002). The California Supreme Court has interpreted Section 17200 as borrowing violations of other laws. E.g., Farmers Ins. Exchange v. Superior Ct, 2 Cal.4th 377, 383 (1992). As a result, if there is no liability pursuant to the underlying law, then the derivative 17200 claim must also fail. See, Whiteside V. Tenet Healthcare Corp., 101 Cal.App.4th 693, 706 (2002). In this case, because Plaintiffs claims against the individuals are defective, the same result must follow as to the Section 17200 claim. Moreover, even if Plaintiff could allege a viable claim against the Individual Defendants, the Section 17200 claim still fails against them as a matter of law. Under Section 17200, no individual liability exists for corporate officers or agents for claims premised on a corporation’s failure to pay wages, absent evidence that officers or agents required employees to work for them personally or misappropriated corporate funds for their own use - allegations of wage and hour violations will not suffice. Bradstreetv. Wong, 161 Cal.App.4th 1440, 1460-1461 (2008), abrogated on other grounds by Martinez v. Combs, 49 Cal. 4th 35 (2010) (“[A]n owner or officer of a corporation may be individually liable under the UCL [only] if he or she actively and directly participates in the unfair business practice.”); Lunger v. Witt, No. 2:15-cv-00486-MCE-DAD, 2015 BL 233054 (E.D. Cal. July 17, 2015). 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 11LAQ1\VIS0K\73QQ29.1......... MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF MOTION TO DISMISS Case 3:16-cv-02559-BAS-BLM Document 6-1 Filed 10/20/16 Page 18 of 21 In the instant case, Plaintiffs 17200 claim is necessarily premised Plaintiffs purported misclassification and accompanying wage and hour violations. Plaintiff, however, has not (and cannot) allege that Chiang or Stastny required him to work for them personally, had anything to do with such matters or ever misappropriated funds for their own use. As such, the Section 17200 claims should be dismissed against the Individual Defendants without leave to amend. 1 2 3 4 5 6 7 IV. CONCLUSION8 For the reasons set forth above, the Individual Defendants request that the Court grant their motion, dismiss all Plaintiffs claims against Chiang and Stastny without leave to amend, and grant the Individual Defendants such other and further relief to which they may be entitled. 9 10 11 12 13 14 DATED: October 20. 2016 KELLEY DRYE & WARREN LLP15 16 /s/Kathryn A. Visosky Kathryn A. Visosky Attorneys for Defendants By:17 18 19 20 21 22 23 24 25 26 27 28 lAI.Ani\VTSOK\73n029.1 MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF MOTION TO DISMISS Case 3:16-cv-02559-BAS-BLM Document 6-1 Filed 10/20/16 Page 19 of 21 1 PROOF OF SERVICE 2 STATE OF CALIFORNIA, CITY AND COUNTY OF LOS ANGELES I am employed in the County of Los Angeles, State of California. I am over the age of 18 and not a party to the within action; my business address is: 3 4 On October 20, 20161 served the documents) described as DEFENDANTS’ I SHAN CHIANG AND AMY STASTNY’S MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF MOTION TO DISMISS UNDER FED. R. CIV. P. 12(b)(6) in this action addressed as follows: 5 6 7 8 SEE ATTACHED LIST (BY MAIL) True and correct copies of the aforementioned document(s) were deposited, in a sealed envelope with postage thereon fully prepaid, with the U.S. Postal Service on that same day to be mailed via first class mail at Los Angeles, California. I am aware that on motion of the party served^ service is presumed invalid if postal cancellation date or postage meter date is more than one day after date of deposit for mailing in affidavit. 9 10 11 12 13 □ go BE SERVED BY THE COURT VIA NOTICE OF ELECTRONIC FILING (NEF)) Pursuant to the controlling Rules, the aforementioned document(s) will be served by the court via NEF and proper link(s) to the document(s). On , I checked the appropriate CM/ECF docket for this case or proceeding and determined that the aforementioned person(s) has/have consented to receive NEF transmission at the aforementioned eiectromc addresses. 14 15 16 (BY ELECTRONIC SERVICE) On , I transmitted the aforementioned docxament(s) as PDF attachments to the aforementioned electronic notification address(es). The transmission originated from my electronic notification address, which is , and was reported as complete and without error. □ (BY PERSONAL SERVICE) I placed the aforementioned document(s) i sealed envelope and I delivered such envelope by hand to the offices of the addressee. □17 18 19 n a20 21 (BY OVERNIGHT DELIVERY) I placed the aforementioned document(s) in a sealed envelope with postage thereon fully prepaid and I caused said envelope to be delivered overnight via an overnight delivery service in lieu of delivery by mail to the addressee(s). n22 23 24 Executed on October 20,2016 at Los Angeles, California. I declare under pendty of perjury xmder the laws of the United States that the above is true and correct. r\ 25 26 h27 f/ Lu trERI ADAMS28 LA01\ADAMTE\729862.1 Case 3:16-cv-02559-BAS-BLM Document 6-1 Filed 10/20/16 Page 20 of 21 SERVICE LIST1 2 Attorneys for Plaintiff Daniel L. BloomquistPatrick N. Keegan, Esq. James M. Treglio, Esq. KEEGAN & BAKER, LLP 6156 Innovation Way Carlsbad, CA 92009 3 Tel: (760) 929-9303 Fax: (760)929-92604 5 pkeegan@keeganbaker.com itreglio@keeganbaker.com6 7 Attorneys for Plaintiff Daniel L. BloomquistWalter Haines, Esq. THE UNITED EMPLOYEES LAW GROUP 5500 Bolsa Avenue, Suite 201 Huntington Beach, CA 92649 8 Tel: (310)234-5678 Fax: (562)256-10069 10 walter@whaines.com 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 LA01\ADAMTE\729862.1 Case 3:16-cv-02559-BAS-BLM Document 6-1 Filed 10/20/16 Page 21 of 21 KELLEY DRYE & WARREN LLP Michael L. Gallion (State Bar No. 189128) Kathryn A. Visosky (State Bar No. 246438) David Van Pelt (State Bar No. 163690) 10100 Santa Monica Boulevard, 23^^^ Floor Los Angeles, CA 90067-4008 Telephone: (310)712-6100 Facsimile: (310)712-6199 mgallion@kelleydrye.com kvisosky@kelleydrye dvanpeft@kelley drye, Attorneys for Defendants COVANCE, INC., I-SHAN CHIANG, and AMY STASTNY 1 2 3 4 5 .com .com6 7 8 9 UNITED STATES DISTRICT COURT 10 SOUTHERN DISTRICT OF CALIFORNIA 11 12 DANIEL L. BLOOMQUIST individual on behalf of himself and all Case No. 3:16-cv-02559-BAS-BLM Complaint Filed: August 3, 2016' Hon. Cynthia Bashant Courtroom 4B DECLARATION OF KATHRYN VISOSKY IN SUPPORT OF MOTION TO DISMISS UNDER FED. R. CIV. P. 12(b)(6) , an 13 others similarly situated. 14 15 Plaintiff, 16 V. COVANCE, INC., a Delaware corporation; I-SHAN CHIANG, an individual; AMY STASTIW, an individual; and DOES 1-100, inclusive 17 18 Hearing Date: November 21, 201619 NO ORAL ARGUMENT UNLESS REOUESTED BY THE COURT 20 Defendant. 21 22 23 24 25 26 27 28 LA01\VISOK\730099.1 DECLARATION OF KATHRYN VISOSKY IN SUPPORT OF MOTION TO DISMISS Case 3:16-cv-02559-BAS-BLM Document 6-2 Filed 10/20/16 Page 1 of 8 DECLARATION OF KATHRYN A. VISOSKY1 2 I, Kathryn A. Visosky, declare as follows: I am an attorney duly admitted to practice before this Court. I am a partner at Kelley Drye & Warren LLP, attorneys of record for Defendants Covance, Inc., LShan Chiang, and Amy Stastny. I submit this declaration in support of Defendants I-Shan Chiang and Amy Stastny’s Motion to Dismiss Under Fed. R. Civ. P. 12(b)(6). I have personal knowledge of the facts set forth herein. If called as a witness, I could and would competently testify to the matters stated herein. Pursuant to the Honorable Cynthia Bashant United States District Judge Standing Order for Civil Cases, I met and conferred with Plaintiffs counsel regarding Defendants Chiang’s and Stastny’s contemplated motion to dismiss the individual defendants pursuant to Federal Rule of Civil Procedure 12(b)(6). On October 13, 2016, met and conferred with Plaintiffs counsel, James Treglio, regarding the motion to dismiss. On October 14, 2016,1 sent Mr. Treglio a letter confirming that conversation and inviting Mr. Treglio to contact me to continue or meet and confer efforts. A true and correct copy of the letter to Mr. Treglio dated October 14, 2016 is attached hereto as Exhibit A. On October 18, 2016, Mr. Treglio and I continued our meet and confer efforts via telephone conference. During that conference, Mr. Treglio confirmed that Plaintiff would oppose Defendants motion to dismiss the individual defendants. I declare under penalty of perjury under the laws of the United States of America and the state of California that the foregoing is true and correct. 3 1. 4 5 6 7 8 9 2. 10 11 12 13 3. 14 15 16 17 18 4. 19 20 21 22 23 24 Executed October 20, 2016, at Los Angeles, California. 25 26 /s/ Kate Visoskv 27 Kate Visosky, Esq. 28 T.AfinVISIOKW-^OnQQ 1 ..................................................................................................... ..... DECLARATION OF KATHRYN VISOSKY IN SUPPORT OF MOTION TO DISMISS Case 3:16-cv-02559-BAS-BLM Document 6-2 Filed 10/20/16 Page 2 of 8 EXHIBIT A Case 3:16-cv-02559-BAS-BLM Document 6-2 Filed 10/20/16 Page 3 of 8 KELLEY DRYE & WARREN llp A LIMITED LIABILITY PARTNERSHIP 10100 SANTA MONICA BOULEVARD FACSIMILENEW YORK. NY 23RD FLOOR (310) 712-0190WAS KINGTON, DC LOS ANQELES, CA 90067>4008 www.kelleyOrye.cpmCHICAGO. I L STAMFORD, CT PAR8IPPANY, NJ (310) 712-6100 KATHRYN A. VISOSKY BRUSSELS. BELGIUM DIRECT LINE: (310) 712-6185 EMAIL: kvisoskyigkelleyclfye.com AFFILIATE OFFICE MUMBAI. INDIA October 14, 2016 Via Email and U.S. Mall James M. Tregllo, Esq. KEEGAN & BAKER, LLP 6156 Innovation Way Carlsbad. CA 92009 Re: Daniel BJoomquist v. Covance, Inc., et a/. San Diego Superior Court Case No. 27-2016-00026455-CU-OE-CTL Jim: This will confirm our conversation yesterday, at which time I contacted you to meet and confer regarding the motion to dismiss contemplated by Defendants Covance, Inc., I-Shan Chiang and Amy Stastny in accordance with the Court’s Standing Order for Civil Cases. As discussed, Defendants position, as explained in greater detail below, is as follows: (1) California Labor Code 558.1 does not give rise to a private right of action; and (2) the Complaint fails to state sufficient facts that Defendants Chiang and/or Stastny qualify as an “owner, director, officer, or managing agent”, and that this deficiency cannot be cured given their duties and responsibilities. Indeed, “director” title alone is insufficient to create liability. During our call on October 13, 2016, you informed me that Plaintiff disagrees with our first position, but that you would speak with your team with regard to our second position and get back to me regarding whether Plaintiff would agree to resolve our concerns by dismissing the individual defendants / filing a first amended complaint. Please let us know whether Plaintiff is agreeable to doing so. If not, we intend to file a motion to dismiss on or before October'20, 2016. Should you need additional time to adequately consider our concerns, please let us know so that we can prepare a stipulation for an extension of time within which to file our responsive pleadings. Labor Code Section 558.1 Does Not Provide For a Private Right of Action As for Labor Code section 558.1, it was enacted in October 2015 as part of a larger bill enhancing the Labor Commissioner's enforcement authority under the Labor Code. No part of the statutory language of Labor Code section 558.1 nor the legislative history suggests that the LA01\VISOK\728358.1 EXHIBIT A-Page 1 October 20, 2016 Case 3:16-cv-02559-BAS-BLM Document 6-2 Filed 10/20/16 Page 4 of 8 KELLEY DRYE & WARREN llp Mr. James Treglio October 14, 2016 Page Two Legislature intended to create a private right of action for plaintiff employees alleging a violation of this section of the Labor Code, against individuals acting on behalf of defendant employers. “A violation of a state statute does not necessarily give rise to a private cause of action." Lu V. Hawaiian Gardens Casino, Inc. (2010) 50 Cal. 4th 592, 596. “Instead, whether a party has a right to sue depends on whether the Legislature has ‘manifested an intent to create such a private cause of action’ under the statute.” Id. “Such legislative intent, if any, is revealed through the language of the statute and its legislative history." Id. In Lu, the California Supreme Court considered a scenario similar to the one at hand in the instant case regarding Labor Code section 558.1. See Lu, 50 Cal. 4th at 596-601. That is, it considered whether Labor Code section 351 (which, like Labor Code section 558.1, does, not expressly provide for a private right of action) created a private cause of action. See Id.] see also Lab. Code §§351, 558.1. The Lu Court looked to the legislative history and concluded that there was no indication that the Legislature intended to create a private cause of action under the statute. Lu, 50 Cal. 4th at 600. An examination of Senate Bill No. 588 is likewise devoid of clear, unmistakable language which demonstrates an intent on the part of the Legislature to create a private cause of action. Individual defendants Chiang and Stastny, are therefore improper defendants under Labor Code section 558.1, and there is no “reasonable possibility" that this defect can be cured by amendment. Therefore, Plaintiff should dismiss them with prejudice from this case. Plaintiff Fails to Allege Facts Sufficient to Maintain Any Claims Against Chiang and/or Stastny Even assuming that Labor Code 558.1 did provide for a private right of action against individuals (which is does not). Plaintiff nonetheless fails to state a claim against Chiang and Stastny for which relief can be granted. To survive a Rule 12(b)(6) motion to dismiss, a “complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’" Ashcroft v. Iqbal, 129 S.Ct. 1937, 1949 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). A complaint does not need detailed factual allegations, but the “[fjactuai allegations must be enough to raise a right to relief above the speculative level." Twombly, 550 U.S. at 555. In deciding a motion to dismiss, the court should assume the veracity of “well-pleaded factual allegations,” but is “not bound to accept as true a legal conclusion couched as a factual allegation." Iqbal, 127 S.Ct. at 1950. "Labels and conclusions” or “a formulaic recitation of the elements of a cause of action will not do,” Twombly, 550 U.S. at 555. ‘“Naked assertion[s]’ devoid of further factual enhancement’" are also insufficient. Iqbal, 127 S.Ct. at 1949 (quoting Twombly, 550 U.S. at 557). Instead, the complaint must contain enough facts to state a claim to relief that [*2] is “plausible on Its face.” Twombly, 550 U.S. at 570. LA01\VISOK\728358.1 EXHIBIT A-Page 2 October 20, 2016 Case 3:16-cv-02559-BAS-BLM Document 6-2 Filed 10/20/16 Page 5 of 8 KELLEY DRYE & WARREN LLP Mr. James Treglio October 14, 2016 Page Three In the Complaint, Plaintiff’s alleges that Chiang, “Senior Director, Strategy & Planning", and Stastny, “Director of Global Clinical Trial Operations," in their respective positions “oversaw the work of Clinical Research Associates and Senior Clinical Research Associates", and thus, are each “being sued in her capacity as a director of Covance, and [are] personally liable under Labor Code section 558.1.” Pursuant to Labor Code section 558.1, only an “owner, director, officer, or managing agent of the employer" may be held liable. Further, the statute provides that “the term ‘managing agent' has the same meaning as in subdivision) (b) of Section 3294 of the Civil Code” - the punitive damages statute. California requires an officer, director or managing agent to be someone who exercises substantial discretion authority over decisions that ultimately determine corporate policy. Roby v. McKesson Corp., 47 Cal.4th 686, 714, (2009); see also White v. Ultramar, Inc., 21 Cai.4th 563, 569, (1999) (a corporation’s principal liability for punitive damages not depend on ernployees’ managerial level, but on the extent to which they exercise substantial discretionary authority over decisions that ultimately determine corporate policy). Similarly, "[mjanaging agents’ are ‘those corporate employees who exercise substantial independent authority and judgment in their corporate decision-making so that their decisions ultimately determine corporate policy."* Taylor V. Trees, Inc., 58 F.Supp.Sd 1092, 1105 (E.D. Cal. 2014) {quoting White, 21 Cal.4th at 566-67." “Corporate policies’ are generally viewed as the ‘general principles which guide a corporation, or rules intended to be followed consistently over time in corporate operations.’" Taylor, 58 F.Supp.Sd at 1105 {quoting Cruz v. HomeBase, 83 Cal.App.4th 160, 167 (2000)). Here, Plaintiff provides only Chiang's and Stastny’s position titles and the allegation that each “oversaw" the work of CRAs and Sr. CRAs in support of his allegation that they are directors of Defendant Covance. These facts are insufficient to state a claim. Further, neither Chiang nor Stastny are qualify as an "owner, director, officer, or managing agent of the employer," much less how they supposedly “violate[d], or cau8e[d] to be violated,” the pertinent provision of the Labor Code. Accordingly, they should be dismissed with prejudice. I look forward to speaking with you soon. Best regards. Kate A> Visosky KELLEY DRYE & WARREN LLP KAV:ta Walter Haines, Esq.cc: LA01\VISOK\728358.1 EXHIBIT A-Page 3 October 20, 2016 Case 3:16-cv-02559-BAS-BLM Document 6-2 Filed 10/20/16 Page 6 of 8 PROOF OF SERVICE STATE OF CALIFORNIA, CITY AND COUNTY OF LOS ANGELES I am employed in the County of Los Angeles, State of California. I am over the age of 18 and not a party to the within action; my business address is: 1 2 3 4 On October 20. 2016 I served the documentfs') described as DECLARATION OF KATHRYN VISOSKY IN SUPPORT OF MOTION TO DISMISS UNDER FED. R. CIV. P. 12(b)(6) in this action addressed as follows: SEE ATTACHED LIST 5 6 7 _ (BY MAIL) True and correct copies of the aforementioned document(s) were deposited, in a sealed envelope with postage thereon fully prepaid, with the U.S. Postal Service on that same day to be mailed via first class mail at Los_ Angeles, California. I am aware that on motion of the party served^ service is presumed invalid if postal cancellation date or postage meter date is more than one day after date of deposit for mailing in affidavit. 8 9 10 11 go BE SERVED BY THE COURT VIA NOTICE OF ELECTRONIC FILING (NEF)) Pursuant to the controlling Rules, the aforementioned document(s) will be served by the court via NEF and proper link(sl to the document(s). On , I checked the appropriate CM/ECF docket for this case or proceeding and determined that the aforementioned person(s) has/have consented to receive NEF transmission at the aforementioned electronic addresses. □12 13 14 15 □ (BY ELECTRONIC SERVICE) On , I transmitted the aforementioned document(s) as PDF attachments to the aforementioned electronic notification address(es). The transmission originated from my electronic notification address, which is , and was reported as complete and without error. 16 17 18 (BY PERSONAL SERVICE) I placed the aforementioned document(s) in a sealed envelope and I delivered such envelope by hand to the offices of the addressee. □ 19 20 (BY OVERNIGHT DELIVERY) I placed the aforementioned document(s) in a sealed envelope with postage thereon fully prepaid and I caused said envelope to be delivered overnight via an overnight delivery service in lieu of delivery by mail to the addresseefs). □ 21 22 Executed on October 20, 2016 at Los Angeles, California. I declare under penalty of perjury under the laws of the United States that the above is true and correct. r\ 23 24 25 26 J TERI ADAMS27 28 LA01\ADAMTE\729862.1 Case 3:16-cv-02559-BAS-BLM Document 6-2 Filed 10/20/16 Page 7 of 8 SERVICE LIST1 2 Patrick N. Keegan, Esq. James M. Treglio, Esq. KEEGAN & BAKER, LLP 6156 Innovation Way Carlsbad, CA 92009 Attorneys for Plaintiff Daniel L. Bloomquist 3 Tel: (760) 929-9303 Fax: (760)929-92604 5 pkeegan@keeganbaker.com itreglio@keeganbaker.com6 7 Walter Haines, Esq. THE UNITED EMPLOYEES LAW GROUP 5500 Bolsa Avenue, Suite 201 Huntington Beach, CA 92649 Attorneys for Plaintiff Daniel L. Bloomquist 8 Tel: (310)234-5678 Fax: (562)256-1006 9 10 walter@ whaines .com 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 LAO I\ADAMTE\729862.1 Case 3:16-cv-02559-BAS-BLM Document 6-2 Filed 10/20/16 Page 8 of 8 KELLEY DRYE & WARREN LLP Michael L. Gallion (State Bar No. 189128 Kathryn A. Visosky (State Bar No. 246438) David Van Pelt (State Bar No. 163690) 10100 Santa Monica Boulevard, 23^^ Floor Los Angeles, CA 90067-4008 Telephone: (310)712-6100 Facsimile: (310) 712-6199 mgallion@kelleydrye.com kvisosW@kelleydrye dvanpe]t;@kelley drye, Attorneys for Defendants COVANCK INC., I-SHAN CHIANG, and AMY STASTNY 1 2 3 4 5 .com .com6 7 8 9 UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF CALIFORNIA 10 11 12 DAMEL L. BLOOMQUIST, an individual on behalf of himself and others similarly situated. Case No. 3:16-cv-02559-BAS-BLM [Complaint Filed: August 3, 2016' Hon. Cynthia Bashant Courtroom 4B REQUEST FOR JUDICIAL NOTICE IN SUPPORT OF MOTION TO DISMISS UNDER FED. R. CIV. P. 12(b)(6) 13 all 14 15 Plaintiff, 16 V. 17 COVANCE, INC., a Delaware corporation; I-SHAN CHIANG, an individual; AMY STASTNY, an individual; and DOES 1-100, inclusive 18 19 Hearing Date: November 21, 2016 20 Defendant. NO ORAL ARGUMENT UNLESS REOUESTED BY THE COURT 21 22 23 24 25 26 27 28 LA01\VISOK\73008Q.l REQUEST FOR JUDICIAL NOTICE IN SUPPORT OF MOTION TO DISMISS Case 3:16-cv-02559-BAS-BLM Document 6-3 Filed 10/20/16 Page 1 of 32 1 THE COURT SHOULD TAKE JUDICIAL NOTICE OF THE 2 LEGISLATIVE HISTORY OF LABOR CODE 558.1 Pursuant to Federal Rule of Evidence 201, Defendants I-Shan Chiang and Amy Stastny respectfully request that, in connection with their Motion to Dismiss Under Fed. R. Civ. P. 12(b)(6), filed concurrently herewith, the Court take judicial notice of certain legislative history materials relating to California Labor Code section 558.1, Senate Bill No, 588 (2015-2016 Reg. Sess.). Rule 201(a) provides that a “judicially noticed fact must be one not subject to reasonable dispute in that it is either (1) generally known within the territorial jurisdiction of the trial court or (2) capable of accurate and ready determination by resort to sources whose accuracy cannot reasonably be questioned.” The legislative record enacting California Labor Code Sction 558.1 is “capable of accurate and ready determination” and its “accuracy cannot reasonably be questioned. Federal courts routinely take judicial notice of the legislative history of state statutes. See e.g., Louis v. McCormick & Schmick Restaurant Corp., 460 F. Supp. 2d 1153, 1156 n.4 (C.D. Cal. 2006) (taking judicial notice of Cal. Labor Code § 351 in considering motion to dismiss); Territory of Alaska v. Am. Can Co., 358 U.S. 224, 226-27 (1959) (taking judicial notice of legislative history of statute); Zephyr v. Saxon Mortg. Services, Inc., 873 F. Supp. 2d 1223, 1225 (E.D. Cal. 2012) (statute’s legislative history is proper subject of judicial notice). Further, the California Supreme Court has held that legislative history materials are judicially noticeable pursuant to section 452 of the California Evidence Code, which allows judicial notice of “[ojfficial acts of the legislative, executive, and judicial departments of the United States and of any state of the United States. See Mangini v. R.J. Reynolds Tobacco Co., 1 Cal. 4th 1057, 1064 (1994), overruled on other grounds by In re Tobacco Cases II, 41 Cal. 4th 1257, 1275-76, (2007). Accordingly, Defendants respectfully request that the Court take judicial notice of the following legislative history of Section 558.1: 3 4 5 6 7 8 9 10 11 12 13 9? 14 15 16 17 18 19 20 21 22 23 9924 25 26 27 28 LA01\VISQK\73QQ80.1 REQUEST FOR JUDICIAL NOTICE IN SUPPORT OF MOTION TO DISMISS Case 3:16-cv-02559-BAS-BLM Document 6-3 Filed 10/20/16 Page 2 of 32 1 • Exhibit A: Senate Bill No, 588, Chapter 803, approved and filed with the California Secretary of State October 11, 2015. • Exhibit B: Senate Rules Committee Office of Senate Floor Analysis - SB 588. These documents are part of the legislative history of Labor Code 558.1 and they are a matter of public record; therefore, their existence and authenticity are beyond dispute and they are properly the subject of judicial notice. 2 3 4 5 6 7 8 9 KELLEY DRYE & WARREN LLPDATED: October 20. 2016 10 11 /s/ Kathryn A. Visosky Kathryn A. Visosky Attorneys for Defendants By: 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 2rA01\VTSOK\7300S0.1 REQUEST FOR JUDICIAL NOTICE IN SUPPORT OF MOTION TO DISMISS Case 3:16-cv-02559-BAS-BLM Document 6-3 Filed 10/20/16 Page 3 of 32 * EXHIBIT A Case 3:16-cv-02559-BAS-BLM Document 6-3 Filed 10/20/16 Page 4 of 32 STATE OF CALIFORNIA AUTHENTICATED ' ' tlKTRONIClECAlHATiRJAlBliRtAU Senate Bill No. 588 CHAPTER 803 An act to add Chapter 10 (commencing with Section 690.020) to Division 1 of Title 9 of Part 2 of the Code of Civil Procedure, and to amend Section 98 of, and to add Sections 96.8,238,238.1,238.2,238.3,238.4,238.5, and 558.1 to, the Labor Code, relating to emplojnnent. [Approved by Governor October 11,2015. Filed with Secretary of State October 11,2015.] LEGISLATIVE COUNSEL’S DIGEST SB 588, De Leon. Employment: nonpayment of wages: Labor Commissioner: judgment enforcement. (1) The Enforcement of Judgments Law provides for the enforcement • of money judgments and other civil judgments. Under that law, a judgment creditor may levy upon the property of a judgment debtor to satisfy a judgment, and a levying officer holds the property until the final determination of any exemptions claimed by the judgment debtor. This bill would enact special provisions for the enforcement of judgments against an employer arising from the employer’s nonpayment of wages for work performed in this state. The bill would authorize the Labor Commissioner to use any of the existing remedies available to a judgment creditor and to act as a levying officer when enforcing a judgment pursuant to a writ of execution, as provided. The bill would also auffiorize the Labor Commissioner to issue a notice of levy, as specified, if the levy is for a deposit, credits, money, or property in the possession or under ffie control of a bank or savings and loan association or for an account receivable or other general intangible owed to the judgment debtor by an account debtor. (2) Existing law authorizes the Labor Commissioner to investigate employee complaints and to provide for a hearing in any action to recover wages, penalties, and other demands for compensation. Existing law requires the Labor Commissioner to determine all matters arising under his or her jurisdiction. Existing law makes any employer or other person acting on behalf of an employer who violates or causes to be violated specified provisions regulating hours and days of work in any order of the Industrial Welfare Commission to be subject to a civil penalty, as specified. A violation of the general provisions governing working hours is a crime. This bill would authorize the Labor Commissioner to provide for a hearing to recover civil penalties against any employer or other person acting on behalf of an employer, as defined, for a violation of those provisions regulating hours and days of work in any order of the Industrial Welfare Commission, as specified. This bill would provide that any employer or 92 October 20, 2016EXHIBIT A-Page 1 Case 3:16-cv-02559-BAS-BLM Document 6-3 Filed 10/20/16 Page 5 of 32 Ch. 803 - 2 other person acting on behalf of an employer, as defined, who violates, or causes to be violated, any provision regulating minimum wages or hours and days of work in any order of the Industrial Welfare Commission, or violates, or causes to be violated, other related provisions of law is authorized to be held liable as the employer for such violation. Because the bill expands liability and a violation of those provisions would be a crime, the bill would impose a state-mandated local program. Under existing law, within a specified period of time after service of notice of an order, decision, or award, the parties are authorized to seek review by filing an appeal to the superior court, where the appeal is required to be heard de novo. This bill, beginning 20 days after a judgment is entered by a court of competent jirrisdiction in favor of the Labor Commissioner, or in favor of any employee pursuant to an appeal, would authorize the Labor Commissioner to, with the consent of any employee in whose favor the judgment is entered, collect any outstanding amount of the judgment by mailing a notice of levy upon all persons having in their possession, or who will have in their possession or under their control, any credits, money, or property, belonging to the judgment debtor, or who owe any debt to the judgment debtor at the time they receive the notice of levy. The bill would also require the judgment debtor to be served with a copy of the notice of levy. The bill would require any person who surrenders to the Labor Commissioner any credits, money, or property, or pays the debts owed to the judgment debtor to be discharged from any obligation or liability to the judgment debtor to the extent of the amount paid to the Labor Commissioner as a result of the levy. The bill would make any person noticed with a levy who fails or refuses to surrender any credits, money, or property or pay any debts owed to the judgment debtor liable in his or her own person or estate to the Labor Commissioner in an amount equal to the value of the credits, money, or property or in the amount of the levy, as provided. If a final judgment against an employer arising from the employer’s nonpayment of wages for work performed in this state remains unsatisfied after a specified period of time after the time to appeal has expired and no appeal is pending, the bill would prohibit an employer from continuing to conduct business in this state, as specified, unless the employer has obtained a bond from a surety company and has filed a copy of that bond with the Labor Commissioner, as provided. As an alternative to the bond requirement, the bill would authorize the employer to provide the Labor Commissioner with a notarized copy of an accord reached with an individual holding an unsatisfied final judgment. The bill would make any employer conducting business without satisfying the bond requirement subject to a specified civil penalty, as provided. The bill, where an employer is conducting business in violation of the bond requirement, would authorize the Labor Commissioner to issue and serve on such employer a stop order prohibiting the use of employee labor by the employer until fee employer complies with the bond requirement provided that fee stop order would not compromise or imperil public safety or the life, health, and care of vuberable individuals. 92 EXHIBITA-Page2 October 20, 2016 Case 3:16-cv-02559-BAS-BLM Document 6-3 Filed 10/20/16 Page 6 of 32 Ch. 803- 3 The bill would make the failure of an employer, owner, director, officer, or managing agent of the employer to observe a stop order guilty of a misdemeanor. By creating a new crime, the bill would impose a state-mandated local program. Subject to required prior notice to the employer, the bill would authorize the Labor Commissioner to create a lien on any real or personal property in California of an employer or a successor employer with respect to real property, as described, that is conducting business without satisfying the bond requirement for the full amount of any wages, interest, and penalties claimed to be owed to an employee, as specified. Existing law generally provides for the licensure and regulation of various types of long-term care facilities by the State Department of Public Health and the State Department of Social Services. If a final judgment against an employer arising from the employer’s nonpayment of wages remains unsatisfied after the time to appeal has expired and there is no pending appeal and an employer in the long-term care industry, as specified, is found to be conducting business without obtaining a bond or reaching an accord with an individual holding an unsatisfied judgment, this bill would authorize those departments to deny a new license or the renewal of an existing license. The bill would also authorize the Labor Commissioner to notify those departments of such a violation. The bill would require any individual or business entity that contracts for services in the property services or long-term care industries to be jointly and severally liable for any unpaid wages where the individual or business entity has been provided notice, by any party, of any proceeding or investigation by the Labor Commissioner in which the employer is found liable for those unpaid wages, to the extent the amounts are for services performed under that contract, as provided. The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement. This bill would provide that no reimbursement is required by this act for a specified reason. The people of the State of California do enact as follows: SECTION 1. Chapter 10 (commencing with Section 690.020) is added to Division 1 of Title 9 of Part 2 of the Code of Civil Procedure, to read:- Chapter 10. Enforcement of Judgments by Labor Commissioner 690.020. For the purpose of the remedies provided under this chapter, jurisdiction is conferred upon the superior court. 690.030. (a) Except as otherwise provided by statute, whenever a warrant or notice of levy may properly be issued by the Labor Commissioner pursuant to Section 96.8 of the Labor Code, and the warrant may be levied 92 EXHIBIT A-Page 3 October 20, 2016 Case 3:16-cv-02559-BAS-BLM Document 6-3 Filed 10/20/16 Page 7 of 32 Ch. 803 - 4 - with the same effect as a levy pursuant to a writ of execution, the Labor Commissioner may use any of the remedies available to a judgment creditor, including, but not limited to, those provided in Chapter 6 (commencing with Section 708.010) of Division 2. (b) The proper court for the enforcement of the remedies provided under this chapter is the superior court of any of the following counties: (1) The county where the employee resides. (2) The county where the judgment debtor resides. (3) The county where the person against whom the levy or warrant was issued resides. 690.040. (a) Whenever the Labor Commissioner, pursuant to Section 96.8 of the Labor Code, levies upon property pursuant to a warrant or notice of levy for the collection of an unsatisfied judgment or award: (1) If the debtor is a natural person, the debtor is entitled to the same exemptions to which a judgment debtor is entitled. Except as provided in subdivisions (b) and (c), the claim of exemption shall be made, heard, and determined as provided in Chapter 4 (commencing with Section 703.010) ofDivision2 in the same manner as ifthe property were levied upon under a writ of execution. (2) A third person may claim ownership or the right to possession of the property or a security interest in or lien on the property. Except as provided in subdivisions (b) and (c) or as otherwise provided by statute, the third-party claim shall be made, heard, and determined as provided in Division 4 (commencing with Section 720.010) in the same manner as if the property were levied upon under a writ of execution. (b) In the case of a warrant or notice of levy issued pursuant to Section 96.8, of the Labor Code, the claim of exemption or the third-party claim shall be filed with the Labor Commissioner. (c) A claim of exemption or a third-party claim pursuant to this section shall be heard and determined in a superior court specified in subdivision (b) of Section 690.030. 690.050. (a) Notwithstanding any other law, in the case of a writ of execution issued by a court of competent jurisdiction pursuant to Chapter 3 (commencing with Section 699.010) and Chapter 5 (commencing with Section 706.010) of Division 2, the Labor Commissioner, when collecting an unsatisfied judgment or award pursuant to Section 96.8 of the Labor Code, may perform the duties of the levying officer, except that the Labor Commissioner need not give himself or herself the notices that the levying officer is required to serve on a judgment creditor or the notices that a judgment creditor is required to give to the levying ofiicer. (b) Notwithstanding subdivision (a) of Section 700.140 and Sections 700.150, 700.160, and 700.170, if the levy is for a deposit, credits, money, or property in the possession or under the control of a bank or savings and loan association or for an account receivable or other general intangible owed to the judgment debtor by an account debtor, the Labor Commissioner may deliver or mail a notice of levy to a centralized location designated by the bank or savings and loan association or, in the case of an account 92 EXHIBIT A-Page 4 October 20, 2016 Case 3:16-cv-02559-BAS-BLM Document 6-3 Filed 10/20/16 Page 8 of 32 Ch. 803- 5 - receivable or other general intangible, to the agent for service of process of the account debtor. If the notice of levy is received at the designated central location for the bank or savings and loan association, the notice of levy will apply to all deposits, credits, money, and personal property held by the bank or savings and loan association regardless of the location of that property. The notice of levy may be issued directly by the Labor Commissioner, whether or not a court has issued a writ of execution, and shall contain all of the information required to be included in a writ of execution under Section 699.520 and in a notice of levy under Section 699.540. SEC. 2. Section 96.8 is added to the Labor Code, to read: 96.8. (a) Notwithstanding any other law, beginning 20 days after a judgment is entered by a court of competent jurisdiction in favor of the Labor Commissioner, or in favor of any employee pursuant to subdivision (e) of Section 98.2, the Labor Commissioner may, with the consent of any employee in whose favor the judgment is entered, collect any outstanding amount of the judgment by mailing a notice of levy upon all persons having in their possession, or who will have in their possession or under their control, any credits, money, or property belonging to the judgment debtor, or who owe any debt to the judgment debtor at the time they receive the notice of levy. (b) Notwithstanding any other law, the Labor Commissioner may execute a levy on any property that may be levied under Section 700.140, 700.150, 700.160, or 700.170 of the Code of Civil Procedure by mailing a notice of levy to the person against whom the levy is directed and serving a copy on the judgment debtor. The notice of levy shall contain all of the information required to be included in a writ of execution under Section 699.520 of the Code of Civil Procedure and in a notice of levy under Section 699.540 of the Code of Civil Procedure. (c) Any person, upon whom a levy has been noticed having in his or her possession or under his or her control any credits, money, or property belonging to the judgment debtor or owing any debts to the judgment debtor at the time of receipt of the levy or coming into his or her possession or under his or her control within one year of receipt of the notice of levy, shall surrender the credits, money, or property to the Labor Commissioner or pay to the Labor Commissioner the amount of any debt owed to the judgment debtor within 10 days of service of the levy, and shall surrender the credits or property, or the amount of any debt owing to the judgment debtor coming into his or her own possession or control within one year of receipt of the notice of levy within 10 days of the date of coming into possession or control of the credits or property or the amount of any debt owed to the judgment debtor. (d) Any person who surrenders to the Labor Commissioner pursuant to this section any credits, money, or property, or pays the debts owed to the judgment debtor, shall be discharged from any obligation or liability to the judgment debtor to the extent of the amount paid to the Labor Commissioner . as a result of the levy. 92 EXHIBIT A-Page 5 October 20, 2016 Case 3:16-cv-02559-BAS-BLM Document 6-3 Filed 10/20/16 Page 9 of 32 6 -Ch. 803 (e) If the levy is made on a deposit or credits, money, or property in the possession or under the control of a bank, savings and loan association, or other financial institution as defined by Section 669a(d)(l) of Title 42 of the United States Code, the notice of levy may be delivered or mailed to a centralized location designated by the bank, savings and loan association, or other financial institution pursuant to Section 690.050 of the Code of Civil Procedure. (f) Any person who is noticed with a levy pursuant to this section and who fails or refuses to surrender any credits, money, or property or pay any debts owed to the judgment debtor shall be liable in his or her own person estate to the Labor Commissioner in an amount equal to the value of the credits, money, or other property or in the amount of the levy, up to the amount specified in the levy. (g) The fees, commissions, expenses, and the reasonable costs associated with the sale of property levied upon by warrant or levy pursuant to this section, including, but not limited to, appraisers’ fees, auctioneers’ fees, and advertising fees are an obligation of the judgment debtor and may be collected from the judgment debtor by virtue of the warrant or levy or in any other maimer as though these items were part of the judgment or award outstanding. (h) This section shall not apply to the judgment debtor’s interest m real property. (i) This section shall not apply if enforcement of the judgment has been stayed on appeal pursuant to Chapter 2 (commencing with Section 916) of Title 13 of Part 2 of the Code of Civil Procedure. SEC. 3. Section 98 of the Labor Code is amended to read: 98. (a) The Labor Commissioner is authorized to investigate employee complaints. The Labor Commissioner may provide for a hearing in any action to recover wages, penalties, and other demands for compensation, including liquidated damages if the complaint alleges payment of a wage less than the minimum wage fixed by an order of the Industrial Welfare Commission or by statute, properly before the division or the Labor Commissioner, including orders of the Industrial Welfare Commission, and shall determine all matters arising under his or her jurisdiction. The Labor Commissioner may also provide for a hearing to recover civil penalties due pursuant to Section 558 against any employer or other person acting on behalf of an employer, including, but not limited to, an individual liable pursuant to Section 558.1. It is within the jurisdiction of the Labor Commissioner to accept and determine claims fi'om holders of payroll checks payroll drafts returned unpaid because of insufficient funds, if, after a diligent search, the holder is unable to return the dishonored check or draft to the payee and recover the sums paid out. Within 30 days of the filing of the complaint, the Labor Commissioner shall notify the parties as to whether a hearing will be held, whether action will be taken in accordance with Section 98.3, or whether no further action will be taken on the complaint. If the determination is made by the Labor Commissioner to hold a hearing, the hearing shall be held within 90 days of the date of that determination. or or 92 EXHIBIT A-Page 6 October 20, 2016 Case 3:16-cv-02559-BAS-BLM Document 6-3 Filed 10/20/16 Page 10 of 32 Ch. 8037 - However, the Labor Commissioner may postpone or grant additional time before setting a hearing if the Labor Commissioner finds that it would lead to an equitable and just resolution of the dispute. A party who has received actual notice of a claim before the Labor Commissioner shall, while the matter is before the Labor Commissioner, notify the Labor Commissioner in writing of any change in that party’s business or personal address within 10 days after the change in address occurs. It is the intent of the Legislature that hearings held pursuant to this section be conducted in an informal setting preserving the rights of the parties. (b) When a hearing is set, a copy of the complaint, which shall include the amount of compensation requested, together with a notice of time and place of the hearing, shall be served on all parties, personally or by certified mail, or in the manner specified in Section 415.20 of the Code of Civil Procedure. (c) Within 10 days after service of the notice and the complaint, a defendant may file an answer with the Labor Commissioner in any form as the Labor Commissioner may prescribe, setting forth the particulars in which the complaint is inaccurate or incomplete and the facts upon which the defendant intends to rely. (d) No pleading other than the complaint and answer of the defendant or defendants shall be required. Both shall be in writing and shall conform to the form and the rules of practice and procedure adopted by the Labor Commissioner. (e) Evidence on matters not pleaded in the answer shall be allowed only on terms and conditions the Labor Commissioner shall impose. In all these cases, the claimant shall be entitled to a continuance for purposes of review of the new evidence. (f) If the defendant fails to appear or answer within the time allowed under this chapter, no default shall be taken against him or her, but the Labor Commissioner shall hear the evidence offered and shall issue an order, decision, or award in accordance with the evidence. A defendant failing to appear or answer, or subsequently contending to be aggrieved in any manner by want of notice of the pendency of the proceedings, may apply to the Labor Commissioner for relief in accordance with Section 473 of the Code of Civil Procedure. The Labor Commissioner may afford this relief. No right to relief, including the claim that the findings or award of the Labor Commissioner or judgment entered thereon are void upon their face, shall accrue to the defendant in any court unless prior application is made to the Labor Commissioner in accordance with this chapter. (g) All hearings conducted pursuant to this chapter are governed by the division and by the rules of practice and procedure adopted by the Labor Commissioner. (h) (1) Whenever a claim is filed under this chapter against a person operating or doing business under a fictitious business name, as defined in Section 17900 of the Business and Professions Code, which relates to the person’s business, the division shall inquire at the time of the hearing whether the name of the person is the legal name under which the business or person 92 EXHIBIT A-Page 7 October 20. 2016 Case 3:16-cv-02559-BAS-BLM Document 6-3 Filed 10/20/16 Page 11 of 32 8 -Ch. 803 has been licensed, registered, incorporated, or otherwise authorized to do business. (2) The division may amend an order, decision, or award to conform to the legal name of the business or the person who is the defendant to a wage claim, if it can be shown that proper service was made on the defendant or his or her agent, unless a judgment had been entered on the order, decision, or award pursuant to subdivision (d) of Section 98.2. The Labor Commissioner may apply to the clerk of the superior court to amend a judgment that has been issued pursuant to a final order, decision, or award to conform to the legal name of the defendant, if it can be shown that proper service was made on the defendant or his or her agent. SEC. 4. Section 238 is added to the Labor Code, to read: 238. (a) If a final judgment against an employer arising from the employer’s nonpayment of wages for work performed in this state remains unsatisfied after a period of 30 days after the time to appeal therefrom has expired and no appeal therefrom is pending, the employer shall not continue to conduct business in this state, including conducting business using the labor of another business, contractor, or subcontractor instead of the labor of an employee, unless the employer has obtained a bond from a surety company admitted to do business in this state and has filed a copy of that bond with the Labor Commissioner. The bond shall be effective and maintained until satisfaction of all judgments for nonpayment of wages. The principal sum of the bond shall not be less than the following: (1) Fifty thousand dollars ($50,000) if the unsatisfied portion of the judgment is no more than five thousand dollars ($5,000). (2) One hundred thousand dollars ($100,000) if the unsatisfied portion of the judgment is more than five thousand dollars ($5,000) and no more than ten thousand dollars ($10,000). (3) One hundred fifty thousand dollars ($150,000) if the unsatisfied portion of the judgment is more than ten thousand dollars ($10,000). (b) In lieu of filing and maintaining the bond required by this section, the employer may provide the Labor Commissioner with a notarized copy of an accord reached with an individual holding an unsatisfied final judgment. If the accord provides for the judgment to be paid in installments, and an installment payment is not made, the employer is no longer excused from satisfying the bond requirement of this section. (c) (1) The bond required by this section shall be in favor of, and payable to, the people of the State of California, and shall be for the benefit of any employee damaged by his or her employer’s failure to pay wages, including any interest, penalties, and attorney’s fees. (2) This section shall not require a bond in favor of employees covered by a bona fide collective bargaining agreement, if the agreement expressly provides for wages, hours of work, working conditions, a process to resolve disputes concerning nonpayment of wages, and a waiver of the bond required by this section. (3) Thirty days prior to the cancellation or termination of any bond required by this section, the surety shall send written notice to both the 92 EXHIBIT A-Page 8 October 20. 2016 Case 3:16-cv-02559-BAS-BLM Document 6-3 Filed 10/20/16 Page 12 of 32 Ch. 8039 - employer and the Labor Commissioner, identifying the bond and the date of the cancellation or termination. If the bond is terminated or canceled, the employer shall obtain a new surety bond and file a copy of that bond with the Labor Commissioner to remain in compliance with this section. (d) For purposes of this section, a judgment also includes any final arbitration award where the time to file a petition for a trial de novo or a petition to vacate or correct the arbitration award has expired and no petition is pending. (e) Subject to subdivision (f), an employer similar in operation and ownership to an employer with an unsatisfied final judgment for unpaid wages, upon receiving written notice of the unsatisfied judgment, shall be deemed the same employer for purposes of this section if (1) the employees of the successor employer are engaged in substantially the same work in substantially the same working conditions under substantially the same supervisors or (2) if the new entity has substantially the same production process or operations, produces substantially the same products or offers substantially the same services, and has substantially the same body of customers. (f) Any employer, or other person acting on behalf of an employer, that conducts business in violation of this section shall be subject to a civil penalty of two thousand five hundred dollars ($2,500). Any employer that has previously been assessed and failed to pay a penalty pursuant to this section shall be subject to an additional penalty of one hundred dollars ($ 100) for each calendar day that the employer conducts business in violation of this section; however, this additional amount shall not exceed one hundred thousand dollars ($100,000). These civil penalties may be assessed under a citation issued by the Labor Commissioner and the procedures for issuing, contesting, and enforcing judgments shall be the same as those set forth in Section 1197.1. The Labor Commissioner shall not assess these civil penalties against an entity determined to be a successor employer pursuant to subdivision (e) within the first 30 days after notice of the judgment. SEC. 5. Section 238.1 is added to the Labor Code, to read: 238.1. (a) Where an employer is conducting business in violation of Section 238, the Labor Commissioner may issue and serve on that employer a stop order prohibiting the use of employee labor by that employer until the employer’s compliance with Section 238, provided that the stop order would not compromise or imperil public safety or the life, health, and care of vulnerable individuals. The stop order shall also prohibit the employer fi-om continuing to provide services by conducting business using the labor of another business, contractor, or subcontractor. The stop order shall become effective immediately upon the service of the order. Any employee affected by the work stoppage shall be paid by the employer for such time lost, not exceeding 10 days, pending compliance by the employer. The employer may protest the stop order by making and filing with the Labor Commissioner a written request for a hearing within 20 days after service of the stop order. The hearing shall be held within five days from the date of filing the request. The Labor Commissioner shall notify the employer of 92 EXHIBIT A-Page 9 Case 3:16-cv-02559-BAS-BLM Document 6-3 Filed 10/20/16 Page 13 of 32 10 -Ch. 803 the time and place of the hearing by mail. At the conclusion of the hearing, the stop order shall be immediately affirmed or dismissed, and within 24 hours diereafter, the Labor Commissioner shall issue and serve on all parties to the hearing by registered or certified mail a written notice of findings, accompanied by written findings. A writ of mandate may be taken from the findings to the appropriate superior court. The writ shall be taken within 45 days after, the mailing of the notice of findings accompanied by written findings. The Labor Commissioner may file an action in superior court for injimctive and other appropriate relief to enforce the stop order and shall be entitled to recovery of costs and attorney’s fees if any relief is obtained by the Labor Commissioner. (b) Failure of an employer, owner, director, officer, or managing agent of the employer to observe a stop order issued and served upon him or her pursuant to this section is guilty of a misdemeanor punishable by imprisonment in county jail not exceeding 60 days or by a fine not exceeding ten thousand dollars ($10,000), or both. For the purposes of this section, the term “managing agent” has the same meaning as in subdivision (b) of Section 3294 of the Civil Code. SEC. 6. Section 238.2 is added to the Labor Code, to read: 238.2. (a) The Labor Commissioner may create a lien on any real property in California of an employer, or a successor employer pursuant to subdivision (e) of Section 238, that is conducting business in violation of Section 23 8 for the full amount of any wages, interest, and penalties claimed to be owed to any employee. To the extent attorney’s fees are specifically allowed to be recovered by this code, such as by, but not limited to, subdivision (f) of Section 2673.1 and Section 2802, during a hearing pursuant to Section 98, the Labor Commissioner may include that amount in the lien. (b) The Labor Commissioner may create the lien provided in this section by recording a certificate of lien using the same procedure applicable under subdivision (g) of Section 98.2. (c) The Labor Commissioner shall issue a certificate of release, releasing the lien created under this section, upon final satisfaction of any judgment entered in favor of the employee, upon adjudication of the claim in favor of the employer, upon the filing of a surety bond pursuant to Section 238. The certificate of release may be recorded by the employer at the employer’s expense. (d) Unless the lien is satisfied or released, a lien under this section shall continue until 10 years from the date of its creation. (e) Prior to using the lien procedure in this section, the Labor Commissioner shall provide at least 20 days’ notice to the employer. The notice shall advise the employer of the Labor Commissioner’s authority to create a lien on the property to secure payment of the claim. (f) The Labor Commissioner may serve the notice with and in the same maimer as the order, decision, and award in accordance with Section 98.1. (g) A lien created pursuant to this section is in addition to any other lien rights available to an employee or to the Labor Commissioner and shall not be construed to limit those rights. 92 October 20, 2016EXHIBIT A-Page 10 Case 3:16-cv-02559-BAS-BLM Document 6-3 Filed 10/20/16 Page 14 of 32 Ch. 803- 11 - SEC. 7. Section 238.3 is added to the Labor Code, to read: 238.3. (a) The Labor Commissioner may create a lien on any personal property in California of an employer that conducts business in violation of Section 238 for the full amount of any wages, interest, and penalties claimed to be owed to any employee. To the extent attorney’s fees are specifically allowed to be recovered by this code, such as by, but not limited to, subdivision (f) of Section 2673.1 and Section 2802, during a hearing pursuant to Section 98, the Labor Commissioner may include that amount in the lien. (b) The Labor Commissioner may create the lien provided in this section by filing a notice of lien with the Secretary of State on the standard form of initial financing statement pursuant to Section 9521 of the Commercial Code. The standard form shall be completed in the following manner: (1) The Labor Commissioner shall be identified as the secured party. (2) The employer shall be identified as the debtor. (3) The description of the collateral shall include the following statements: (A) A statement of the Labor Commissioner’s demand for payment of the wages, penalties, interest, and attorney’s fees, if applicable. The statement shall specify the amount owed to the employee, and if the amount is estimated, shall provide an explanation for the basis of the estimate. (B) A general statement of the kind of work furnished by the employee and the dates of employment. (c) For the purpose of the Secretary of State’s index pursuant to Sections 9515, 9516, and 9522 of the Commercial Code and for the purpose of the issuance of a certificate pursuant to Section 9519 or 9528 of the Commercial Code, the Secretary of State shall treat a notice of lien pursuant to this section as a financing statement. (d) The lien attaches to all personal property that is owned by the employer at the time of the filing of the notice of lien, or that is subsequently acquired by the employer, that can be made subject to a security interest under the Commercial Code. (e) The Labor Commissioner shall file a termination statement, releasing the lien created under this section, upon final satisfaction of any judgment entered in favor of the employee, upon adjudication of the claim in favor of the employer, upon the filing of a surety bond in a form acceptable to the Labor Commissioner sufficient to secure the claim. (f) The notice of claim of lien to which the termination statement relates ceases to be effective upon the filing of a termination statement with the office of the Secretary of State. A termination statement for a notice of lien may be filed in the same manner as a termination statement for a financing statement filed pursuant to Section 9513 of the Commercial Code. (g) Lfnless the lien is satisfied or released, a lien under this section shall continue until 10 years from the date of its creation. (h) Prior to using this lien procedure in this section, the Labor Commissioner shall provide at least 20 days’ preliminary notice to the employer. The preliminary notice shall advise the employer of the nature and amount of the employee’s claim and of the Labor Commissioner’s 92 EXHIBIT A-Page 11 October 20, 2016 Case 3:16-cv-02559-BAS-BLM Document 6-3 Filed 10/20/16 Page 15 of 32 - 12Ch. 803 authority to create a lien on the employer’s personal property to secure payment of the claim. (1) The Labor Commissioner shall serve the preliminary notice on the employer by certified mail with return receipt requested, evidenced by a certificate of mailing, postage prepaid, addressed to the employer at the employer’s residence or place of business. The Labor Commissioner shall serve a copy of any notice of lien on the employer in the same manner. (j) Upon entry of a final order, decision, or award issued in an appeal pursuant to Section 98.2 against the employer for unpaid wages, or entry of a final judgment against the employer for unpaid wages in an action filed in the superior court, the Labor Commissioner may bring an action to foreclose on any lien created pursuant to this section. (k) A lien created pursuant to this section in addition to any other lien rights available to an employee or to the Labor Commissioner shall not be construed to limit those rights. SEC. 8. Section 238.4 is added to the Labor Code, to read: 238.4. (a) If an employer in the long-term care industry that is also required to obtain a license from the State Department of Public Health or ■ the State Department of Social Services pursuant to Division 2 (commencing with Section 1200) of the Health and Safety Code, is found to be in violation of Section 238, the State Department of Public Health or the State Department of Social Services may deny a new license or the renewal of an existing license for that employer. (b) If the Labor Commissioner finds that an employer in the long-term care industry is conducting business in violation of Section 238, the Labor Commissioner shall notify the State Department of Public Health or the State Department of Social Services. (c) For purposes of this section “long-term care” means the operation of a skilled nursing facility, intermediate care facility, congregate living health facility, hospice facility, adult residential facility, residential care facility for persons with chronic life-threatening illness, residential care facility for the elderly, continuing care retirement community, home health agency, or home care organization, as those terms are used in Division 2 (commencing with Section 1200) of the Health and Safety Code. SEC. 9. Section 238.5 is added to the Labor Code, to read: 238.5. (a) (1) Any individual or business entity, regardless of its form, that, as part of its business, contracts for services in the property services or long-term care industries shall be jointly and severally liable for any unpaid wages, including interest, where the individual or business entity has been provided notice, by any party, of any proceeding or investigation by the Labor Commissioner in which the employer is found liable for those unpaid wages, to the extent the amounts are for services performed under that contract. (2) The issue of joint and several liability under this section shall be determined (A) in a proceeding under Section 98 if the individual or contracting business is provided notice in the administrative complaint alleging such liability and named a defendant in the course of the Section 92 October 20, 2016EXHIBITA-Page 12 Case 3:16-cv-02559-BAS-BLM Document 6-3 Filed 10/20/16 Page 16 of 32 Ch. 803- 13 - 98 proceeding, (B) in an administrative proceeding brought by the Labor Commissioner to investigate, prosecute, or recover unpaid wages and interest pursuant to a citation, or in a court action brought by the Labor Commissioner, if the contracting individual or business is provided preliminary notice by the Labor Commissioner of joint and several liability under this section at least 30 days prior to issuance of a citation, or filing of a court action, or (C) by a court in an action pursuant to Section 98.2. No action for a violation or enforcement of this section shall be brought under Part 13 (commencing with Section 2698) of Division 2. (b) The joint and several liability provided by this section shall not apply to unpaid wages owed to employees covered by a bona fide collective bargaining agreement, if the agreement expressly provides for wages, hours of work, working conditions, a process to resolve disputes concerning nonpayment of wages, and a waiver of die joint and several liability provided by this section. (c) An employer that contracts to provide services in the property services or long-term care industries shall, prior to entering into such a contract, provide written notice to the other party to the prospective contract of any unsatisfied final judgments against the employer for nonpayment of wages. The notice shall also provide the text of this section. The failure of the employer to provide notice under this subdivision shall not be a defense to the joint and several liability provided by this section. (d) An employer that contracts to provide services in tiie property services or long-term care industries shall provide, within 30 days of the entry of the judgment, written notice of any imsatisfied final judgments against the employer for nonpayment of wages to any parties with which the employer is presently under contract to provide services in the property services or long-term care industries. The failure of the employer to provide notice under this subdivision shall not be a defense to the joint and several liability provided by this section. (e) For the purposes of this section, the following apply: (1) “Property services” means janitorial, security guard, valet parking, landscaping, and gardening services. (2) “Long-term care” has the same definition as in Section 238.4. (f) This section shall not be interpreted to impose joint liability on an individual or the owner of a home-based business, for any property services, to the extent that the property services are provided at the individual or home-based business owner’s primary residence, provided that the primary residence does not have multiple housing units. SEC. 10. Section 558.1 is added to the Labor Code, to read: 558.1. (a) Any employer or other person acting on behalf of an employer, who violates, or causes to be violated, any provision regulating minimum wages or hours and days of work in any order of the Industrial Welfare Commission, or violates, or causes to be violated. Sections 203,226,226.7, 1193.6,1194, or 2802, may be held liable as the employer for such violation. (b) For purposes of this section, the term “other person acting on behalf of an employer” is limited to a natural person who is an owner, director. 92 October 20, 2016EXHIBITA-Page 13 Case 3:16-cv-02559-BAS-BLM Document 6-3 Filed 10/20/16 Page 17 of 32 - 14 -Ch. 803 officer, or managing agent of the employer, and the term “managing agent” has the same meaning as in subdivision (h) of Section 3294 of the Civil Code. (c) Nothing in this section shall be construed to limit the definition of employer under existing law. SEC. 11. No reimbursement is required by this act pursuant to Section 6 of Article XIIIB of the California Constitution because the only costs that may be incurred by a local agency or school district will be incurred because this act creates a new crime or infraction, eliminates a crime or infraction, or changes the penalty for a crime or infraction, within the meaning of Section 17556 of the Government Code, or changes the definition of a crime within the meaning of Section 6 of Article XIIIB of the California Constitution. O 92 October 20, 2016EXHiBITA-Page 14 Case 3:16-cv-02559-BAS-BLM Document 6-3 Filed 10/20/16 Page 18 of 32 EXHIBIT B Case 3:16-cv-02559-BAS-BLM Document 6-3 Filed 10/20/16 Page 19 of 32 SB 588SENATE RULES COMMITTEE Office of Senate Floor Analyses (916) 651-1520 Fax: (916) 327-4478 UNFINISHED BUSINESS BiU No: SB 588 Author: De Leon (D), et al. Amended: 9/4/15 Vote: 21 SENATE JUDICIARY COMMITTEE: 4-1, 4/28/15 AYES: Jackson, Leno, Monning, Wieckowski NOES: Anderson NO VOTE RECORDED: Moorlach, Hertzberg SENATE LABOR & IND. REL. COMMITTEE: 4-1, 4/29/15 AYES: Mendoza, Jackson, Leno, Mitchell NOES: Stone SENATE APPROPRIATIONS COMMITTEE: 5-2, 5/28/15 AYES: Lara, Beall, HUl, Leyva, Mendoza NOES: Bates, Nielsen SENATE FLOOR: 26-13, 6/1/15 AYES: AUen, Beall, Block, Cannella, DeLe6n, Galgiani, Glazer, Hall, Hancock, Hernandez, Hill, Hueso, Jackson, Lara, Leno, Leyva, Liu, McGuire, Mendoza, Mitchell, Monning, Pan, Pavley, Roth, Wieckowski, Wolk NOES: Anderson, Bates, Berryhill, Fuller, Gaines, Huff, Moorlach, Morrell, Nguyen, Nielsen, Runner, Stone, Vidak NO VOTE RECORDED: Hertzberg ASSEMBLY FLOOR: 58-18, 9/08/15 - See last page for vote SUBJECT: Employment: nonpayment of wages: Labor Commissioner: judgment enforcement SOURCE: Koreatown Immigrant Workers Alliance Service Employees International Union California Wage Justice Center October 20, 2016EXHIBIT B - Page 1 Case 3:16-cv-02559-BAS-BLM Document 6-3 Filed 10/20/16 Page 20 of 32 SB 588 Page 2 DIGEST: This bill allows the Labor Commissioner to file a lien or levy on an employer’s property in order to assist the employee in collecting unpaid wages when there is a judgment against the employer. Assembly Amendments CTQQiQ a sliding scale for the surety bond depending on the amount of outstanding wages, require that the Labor Commissioner reports to the State Department of Pub lie Health or the State Department of Social Services if a long-term care facility is operating in violation of the surety bond provisions, clarify technical issues with wage orders, appeals, and attorney’s fees, and also add co-authors. ANALYSIS: 1) Provides mechanics, persons furnishing materials, artisans, and laborers of every class the right to file a lien upon the property upon which they have bestowed labor or furnished material for the value ofsuch labor and material. Existing law also requires the Legislature to provide, by law, for the speedy and efficient enforcement ofsuch liens. (California Constitution Article XIV, Section 3) 2) Provides for mechanics liens relating to services and supplies authorized and provided on a work of improvement. Existing law also regulates the conditions under which a mechanics lien may be enforced. (Civil Code §§ 8400-8494) 3) Recognizes prejudgment wage liens against property as a remedy in certain industries, including mining (Civil Code § 3060), agriculture (Civil Code §§ 3061.5-3061.6), and logging (Civil Code§ 3065). 4) Requires the Labor Commissioner and his or her deputies and representatives authorized by him or her in writing, upon the filing of a claim therefor by an employee, or an employee representative authorized in writing by an employee, with the Labor Commissioner, to take assignments of, among other things, wage claims and incidental expense accounts and advances and mechanics and other liens of employees. (Labor Code § 96) 5) Authorizes the Labor Commissioner, after investigation and upon determination that wages or monetary benefits are due and unpaid to any worker in the State of California, to collect such wages or benefits on behalf of the worker without assignment of such wages or benefits to the Commissioner. (Labor Code § 96.7) October 20, 2016EXHIBIT B-Page 2 Case 3:16-cv-02559-BAS-BLM Document 6-3 Filed 10/20/16 Page 21 of 32 SB 588 Page 3 6) Authorizes the Labor Commissioner to investigate employee complaints and provide for a hearing in any action to recover wages, penalties, and other demands for compensation, including liquidated damages if the complaint alleges payment of a wage less than the minimum wage fixed by an order of the Industrial Welfare Commission or by statute, properly before the division or the Labor Commissioner, including orders of the Industrial Welfare Commission, and is required to determine all matters arising xmder his or her jurisdiction. (Labor Code § 98) Authorizes the Labor Commissioner, at the Commissioner’s discretion and upon a final order, to place a lien on real property for amounts due under the final order and in favor of the employee or employees named in the order, with the county recorder of any county in which the employer’s real property may be located. (Labor Code § 98.2(g)) 8) Provides that, if any employer or other person acting on behalf of an employer who violates, or causes to be violated, any provision regulating hours and days of work in either statute or regulation shall be subject to a civil penalty. (Labor Code § 558) This bill authorizes the Labor Commissioner to file a lien on all property of the employer in California for the full amount of any wages and other compensation, penalties, and interest owed to the employee. Specifically, this bill: 1) Allows the Labor Commissioner, after a judgment is entered by a court of competent jurisdiction in favor of the Labor Commissioner or in favor of any employee, to collect any outstanding amount of the judgment by mailing a notice of levy upon all personshaving in their possession, orwho will have in their possession or under their control, any credits, money, or property belonging to the judgment debtor, or who owe any debt to the judgment debtor at the time they receive the notice of levy. This can only be done with the consent of the aggrieved worker. 2) Provides that, any person, upon whom a levy has been noticed for either possessing or owing credits, money, or property belonging to the judgment shall surrender the credits, money, or property to the commissioner or pay to the commissioner the amount of any debt owing the judgment debtor within 10 7) October 20, 2016EXHIBITS-Page 3 Case 3:16-cv-02559-BAS-BLM Document 6-3 Filed 10/20/16 Page 22 of 32 SB 588 Page 4 days of service of the levy. This includes property, money or credits coming into the person’s possession within one year of receipt of the notice of levy. 3) Provides that any person who complies with the notice of Levy from the Labor Commissioner shall be discharged &om any obligation or liability to the judgment debtor to the extent of the amount paid to the commissioner. 4) Provides that any person who fails or refuses to surrender any credits, money, property or pay any debts owing to the judgment debtor shall be liable in his or her own person or estate to the commissioner in an amount equal to the levy. 5) Provides a process for filing a levy with a bank or other financial institution, as defined under federal law. 6) Limits the above-discussed provisions to property that IS NOT real property. Surety Bond Requirements Requires that, if a final judgment against an employer arising from the ^ employer’s nonpayment of wages for work performed in this state remains unsatisfied after a period of 10 days after the time to appeal thereftom has expired, the employer must cease business operations unless the employer has obtained a surety bond. The bond must be filed with the Labor Commissioner and be payable to the people of the State of California for the benefit of any employee damaged by his or her employer’s failure to pay wages, including any interest, penalties, and attorney’s fees. The surety bond amounts are as follows: or 7) a) Fifty thousand dollars ($50,000) if the unsatisfied portion of the judgment is no more than five thousand dollars ($5,000). b) One hundred thousand dollars ($100,000) if the unsatisfied portion of the judgment is more than five thousmd dollars ($5,000) md no more than ten thousand dollars ($10,000). c) One hundred fifty thousand dollars ($150,000) if the unsatisfied portion of the judgment is more than ten thousand dollars ($10,000). Allows the employer to provide the Labor Commissioner with a notarized copy of an accord reached with an individual holding an unsatisfied final judgment instead of filing a surety bond described above. 8) EXHIBITS-Page 4 October 20, 2016 Case 3:16-cv-02559-BAS-BLM Document 6-3 Filed 10/20/16 Page 23 of 32 SB 588 Page 5 9) Provides that a subsequent employer similar in operation and ownership to an employer with an unsatisfied final judgment for unpaid wages shall be deemed the same employer for purposes of this section if: a) The employees of the subsequent employer are engaged in substantially the same work in substantially the same working conditions under substantially the same supervisors; or b) If the new entity has substantially the same production process oroperations, produces substantially the same products or offers substantially the same services, and has substantially the same body of customers. 10) Requires that any employer, or other person acting on behalf of an employer, that conducts business in violation of this section shall be subject to a civil fine $2,500 and that any employer that has previously paid a fine pursuant to this section shall be subject to an additional fine of one hundred dollars ($100) for each calendar day that the employer conducts business in violation of this section, capped at $100,000. 11) Exempts employers fi*om the requirements of the bond if they employ workers who are covered by a bona fide collective b^gaming agreement that expressly provides for wages, hours of work, working conditions, includes a process to resolve disputes concerning nonpayment of wages, and contains a waiver of the bond. 12) Provides notice requirements to the Labor Commissioner in the event of the surety bond being cancelled or terminated.' 13) Provides the following in the event of an employer failing to comply with the bond provisions listed above: a) A stop order prohibiting the use of employee labor by that employer or use of subcontracted labor until the employer complies with bonding requirements. The stop ordermust become effective immediately, and the employer must pay any worker for their lost time due to the stop order, not exceeding 10 days. b) A lien on the real property and personal property of an employer that for the full amount of any wages, interest, penalties, and attorney’s fees claimed to be owed to any employee. This lien would be filed by the Labor October 20, 2016EXHIBIT B-Page 5 Case 3:16-cv-02559-BAS-BLM Document 6-3 Filed 10/20/16 Page 24 of 32 SB 588 Page 6 Commissioner. Unless the lien is satisfied or released, the lien must continue until 10 years fom the date of its creation. 14) Creates notice and filing requirements for the lien provisions discussed above, as well as give the Labor Commissioner the ability to foreclose on the property. Licensure 15) Prohibits the State Department of Public Health or the State Department of Social Services from allowing a long-term care industry from obtaining or renewing a license if the employer is conducting business in violation of the surety bond requirement. This bill defines a long-term care industry as a skilled nursing facility, intermediate care facility, congregate living facility, hospice facility, adult residential facility, residential care facility for persons with chronic life-threatening illness, residential care facility for the elderly, continuing care retirement community, home health agency, or home care organization. Joint and Several Liability 16) Holds individual, partnership, corporation, limited liability company, joint venture, or association jointly and severally liable for liens against real property if the entity provides janitorial, security guard, valet parking, landscaping, gardening services, and long-term care and has been named a defendant and to the extent that the amounts are for services performed under that contract. 17) Creates a notice requirement for contractors of janitorial, security guard, valet parking, landscaping, gardening services, and long-term care if there are outstanding wage violations for prospective contracts, but also states that the employer to provide such notices shall not be a defense to the joint and several liability as described above. Liability for Acting on Behalfof the Employer -18) Allows provide for the Labor Commissioner to hear complaints against a person acting on behalf of an employer who violates, or causes to be violated, any provision regulating hours and days of work in either statute or regulation, and would also make a person acting on behalf of an employer liable for EXHIBIT B - Page 6 October 20. 2016 Case 3:16-cv-02559-BAS-BLM Document 6-3 Filed 10/20/16 Page 25 of 32 SB 588 Page 7 willfully failing to pay wages, provide a paystub, unpaid minimum wages overtime, and failing to indemnifying an employee. Enforcement Provisions 19) Creates enforcement provisions for liens and levies discussed above within the Code of Civil Procedure. These provisions would bestow jurisdiction on the superior court and detail the service and hearing requirements for levies and liens filed by the Labor Commissioner. or Comments 1) Wage Theft: A Brief Background: In 2008, the Ford Foundation sponsored a survey of 4,387 workers in low-wage industries in the three largest U.S. cities: Chicago, Los Angeles and New York City. The report of that survey, titled Broken Laws, Unprotected Workers: Violations of Employment and Labor Laws in America's Cities, revealed that 26 percent of workers in the sample paid less than the legally required minimum wage the prior work week, and 60 percent of these workers were underpaid by more than $1 per hour. In addition, 76 percent of the respondents who worked overtime in the previous week were not paid the legally required overtime rate by their employers. were The study also notes that minimum wage violation rates vary significant^ by industry, and occupation. For example, some industries, such as apparel and textile manufacturing and personal and repair services have minimum wage violation rates that exceed 40 percent, while others, including restaurants, and retail and grocery stores, have rates of 20 to 25 percent. However, the study found that undocumented immigrant women were at the greatest risk of violations. The study estimated that the workers in low-wageminimum wage industries Chicago, Los Angeles, and New York City lose more than $56.4 million per week due to labor law violations. A follow-up study by the UCLA Institute for Research and Labor and Employment was published earlier this year, and that study utilized the data^ fi-om the 2008 survey, but focused specifically on Los Angeles County. This study, titled Wage Theft and Workplace Violations in Los Angeles: The Failure of Employment and Labor Law for Low-Wage Workers focused on a survey results of 1,815 workers in Los Angeles County. EXHIBIT B - Page 7 October 20, 2016 Case 3:16-cv-02559-BAS-BLM Document 6-3 Filed 10/20/16 Page 26 of 32 SB 588 Page 8 This study found similar results to the national survey: almost 30 percent of the workers sampled were paid less than the minimum wage in the prior work week, and 63.3 percent of these workers were underpaid by more than $1 per hour. Assuming a full-year work schedule, Los Angeles County survey respondents lost an average of $2,070.00 annually out oftotal earnings of $16,536.00. The study estimated that workers in low-wage industries in Los Angeles County lose more than $26.2 million per week as a result of employment and labor law violations. Both of the studies make the same public policy recommendations to address these issues, which included strengthening government enforcement of existing employment and labor laws and stiffening the penalties. 2) Wage Theft in California: Collecting Unpaid Wages: Equally troubling, if not troubling, than the high rate of wage theft in California is the low rate ofmore collections. According to a 2013 report published by the National Employment Law Project (NELP) and the UCLA Labor Center, only 17% of workers who PPEVATT .ED in their wage claims before the DLSE and won a judgment were able to receive any payment between 2008 and 2011. Of those who did receive payment between 2008 and 2011, workers were able to collect 15% of what OWED. In short, the vast majority of wage theft victims received nothing, and those that received anything received little of what they were legally due. was FISCAL EFFECT: Appropriation: No Fiscal Com.: Yes Local: Yes Accordingto the Assembly Appropriations Committee, initial admioistrative costs of approximately $2.6 million [Labor Enforcement and Compliance Fund (LECF) and ongoing costs of approximately $2.2 million (LECF) for the Department of Industrial Relations to implement the provisions of this bill. This bill imposes new duties on the Labor Commissioner, for example the ability to utilize the levy process as a supplemental option beyond placing liens. The bill also expands duties related to surety bonds and ^e stop order process. Additionally, the bill could also result in unknown but potentially significant court costs associated with additional proceedings regarding wage claims. SUPPORT: (Verified 9/8/15) Koreatown Immigrant Workers Alliance (co-source) Service Employees International Union California (co-source) Wage Justice Center (co-source) EXHIBITS-Page 8 October 20, 2016 Case 3:16-cv-02559-BAS-BLM Document 6-3 Filed 10/20/16 Page 27 of 32 SB 588 Page 9 9to5 Alliance of Californians for Community Empowerment Alliance San Diego Asian Americans Advancing Justice- Los Angeles Bet Tzedek Legal Services California Employment Lawyers Association California Immigrant Policy Center California Labor Federation, AFL-CIO California Professional Firefighters California Rural Legal Assistance California School Employees Association Center on Policy Initiatives Central American Resource Center Centro Legal de la Raza Chinese Progressive Association CHIRLA-Coalition for Humane Immigrant Rights of Los Angeles CLEAN Car Wash Campaign Clergy and Laity United for Economic Justice Coalition For A Safe Environment CoaMon to Abolish Slavery & Trafficking Community Action Board of Santa Cruz County Inc. Community Services Day Labor Center Hayward/ Oakland Day Worker Center of Mountain View Dignity Campaign Dolores Street Community Services Employment Rights Center Equal Rights Advocates Filipino Advocates for Justice Filipino Migrant Center Fresno County Democrats Garment Worker Center Gender Justice LA Graton Day Labor Center Holman United Methodist Church Housing Long Beach Human Impact Partners InnerCity Struggle Institute de Educacion Popular del Sur de California Katharine & George Alexander Community Law Center October 20, 2016EXHIBITS-Page 9 Case 3:16-cv-02559-BAS-BLM Document 6-3 Filed 10/20/16 Page 28 of 32 SB 588 Page 10 Khmer Girls in Action LA Black Worker Center La Colectiva De Mujeres Liberty Hill Foundation Los Angeles Alliance for a New Economy Los Angeles Fight for $15 Organizing Committee Maintenance Cooperation Trust Fund Making Change at Walmart Mi Familia Vota National Association of Working Women National Day Laborer Organizing Network National Employment Law Project One LA-IAF Pacoima Beautihil Pilgrim United Church of Christ Pilipino Association of Workers and Immigrants - Silicon Valley Restaurant Opportunities Center of Los Angeles Sacramento Area Congregations Together San Diego and Imperial Counties Labor Council, AFL-CIO San Francisco Day Labor Program & Women’s Collective, a program of Dolores Street San Francisco Progressive Workers Alliance Santa Clara University SoCalCosh, Southern California Coalition for Occupational Safety and Health Social Justice Learning Institute Street Level Health Project T.R.U.S.T.SouthLA The Institute of Popular Education of Southern California The Wage Justice Center UCLA Labor Center Union de Vecinos Workplace Justice Initiative Worksafe, Inc. OPPOSITION: (Verified 9/8/15) None Received ARGUMENTS EM SUPPORT: Proponents, noting the 2010 wage theft study discussed earlier, argue that wage theft is a significant problem in California, with LA County’s wage theft resulting in over $1 billion unlawfully failing to reach the October 20, 2016EXHIBIT B - Page 10 Case 3:16-cv-02559-BAS-BLM Document 6-3 Filed 10/20/16 Page 29 of 32 SB 588 Page 11 workers who desperately need it. Proponents also note that current wage theft collection rates are less than 20%, meaning the vast majority of scofftaw employers are successftilin robbing their workers oftheir lawful wages. Proponents believe that SB 588 will help combat the high rate of wage theft in California by creating a simple lien process forthe Labor Commissioner to use against employers who rob workers oftheir wages. Proponents, noting Wisconsin’s success, argue that wage liens are simple, effective, and a time tested approach to halting wage theft. ASSEMBLY FLOOR: 58-18, 9/08/15 AYES: Achadjian, Alejo, Baker, Bloom, Bonilla, Bonta, Brown, Burke, Calderon, Campos, Chau, Chiu, Chu, Cooley, Cooper, Dababneh, Daly, Dodd,Eggman, Frazier, Cristina Garcia, Eduardo Garcia, Gatto, Gipson, Gomez, Gonzalez, Gordon, Gray, Hadley, Roger Hem^dez, Holden, Irwin, Jones-Sawyer, Lackey, Levine, Linder, Lopez, Low, Maienschein, McCarty, Medina, MuUin, Nazarian, O'Donnell, Perea, Quirk, Rendon, Ridley-Thomas, Rodriguez, Salas, Santiago, Mark Stone, Thurmond, Ting, Weber, Williams, Wood, Atkins NOES: Travis Allen, Bigelow, Brough, Dahle, Beth Gaines, Gallagher, Grove, Harper, Jones, Mathis, Melendez, Obemolte, Olsen, Patterson, Steinorth, Wagner, Waldron, Wilk NO VOTE RECORDED: Chang, Chavez, Kim, Mayes Prepared by: Gideon L. Baum / L. & LR. / (916) 651-1556 9/8/15 19:01:26 **** end EXHIBIT B-Page 11 October 20, 2016 Case 3:16-cv-02559-BAS-BLM Document 6-3 Filed 10/20/16 Page 30 of 32 1 PROOF OF SERVICE STATE OF CALIFORNIA, CITY AND COUNTY OF LOS ANGELES I am employed in the County of Los Angeles, State of California. I am over the age of 18 and not a party to the within action; my business address is: 2 3 4 On October 20, 20161 served the documents') described as REQUEST FOR JUDICIAL NOTICE IN SUPPORT OF MOTION TO DISMISS UNDER FED. R. CIV. P. 12(b)(6) in this action addressed as follows: SEE ATTACHED LIST 5 6 7 (BY MAIL) True and correct copies of the aforementioned document(s) were deposited, in a sealed envelope with postage thereon fully prepaid, with the U.S. Postal Service on that same day to be mailed via first class mail at Los Angeles, California. I am aware that on motion of the party served^ service is presumed invalid if postal cancellation date or postage meter date is more than one day after date of deposit for mailing in affidavit. 8 9 10 11 □ go BE SERVED BY THE COURT VIA NOTICE OF ELECTRONIC G (NEF)) Pursuant to the controlling Rules, the aforementioned document(s) will be served by the court via NEF and proper linktsl to the document(s). On , I checked the appropriate CM/ECF docket for this case or proceeding and determined that the aforementioned person(s) has/have consented to receive i^F transmission at the aforementioned electronic addresses. 12 FILIN 13 ' .................. transmis ion at the aforementioned □ (BY ELECTRONIC SERVICE) On . aforementioned document(s) as PDF attachrnents to the aforementioned electronic notification; notification address,' which is without error. 14 15 , I transmitted the 16 address(es). The transmission originated from my electronic , and was reported as complete and17 18 (BY PERSONAL SERVICE) I placed the aforementioned document(s) in a sealed envelope and I delivered such envelope by hand to the offices of the addressee. □ 19 20 (BY OVERNIGHT DELIVERY) I placed the aforementioned document(s) in a sealed envelope with postage thereon fully prepaid and I caused said envelope to be delivered overnight via an overnight delivery service in lieu of delivery by mail to the addressee(s). Executed on October 20, 2016 at Los Angeles, California. I declare under penalty of perjury under the4aws of the United States that the above is true and correct. / □ 21 22 23 24 25 26 TERI ada:27 28 LA01\ADAMTE\729862.1 Case 3:16-cv-02559-BAS-BLM Document 6-3 Filed 10/20/16 Page 31 of 32 SERVICE LIST1 2 Patrick N. Keegan, Esq. James M. Treglio, Esq. KEEGAN & BAKER, LLP 6156 Innovation Way Carlsbad, CA 92009 Attorneys for Plaintiff Daniel L. Bloomquist 3 Tel: (760)929-9303 Fax: (760)929-92604 5 pkeegan@keeganbaker.com itreglio@keeganbaker.com6 7 Walter Haines, Esq. THE UNITED EMPLOYEES LAW GROUP 5500 Bolsa Avenue, Suite 201 Huntington Beach, CA 92649 Attorneys for Plaintiff Daniel L Bloomquist 8 Tel: (310)234-5678 Fax: (562)256-1006 9 10 walter@vyhaines.com 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 LA01\ADAMTE\729862.1 Case 3:16-cv-02559-BAS-BLM Document 6-3 Filed 10/20/16 Page 32 of 32