Candice Ritenour et al v. Carrington Mortgage Services, Llc

NOTICE OF MOTION AND MOTION to Dismiss Plaintiffs' Complaint Pursuant To F.R.C.P. 12

C.D. Cal.November 14, 2016

1 2 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 32809534.2 NOTICE OF MOTION AND MOTION TO DISMISS TERRY E. SANCHEZ (State Bar No. 101318) terry.sanchez@mto.com KATHERINE M. FORSTER (State Bar No. 217609) katherine.forster@mto.com MARGARET G. MARASCHINO (State Bar No. 267034) margaret.maraschino@mto.com MUNGER, TOLLES & OLSON LLP 355 South Grand Avenue Thirty-Fifth Floor Los Angeles, California 90071-1560 Telephone: (213) 683-9100 Facsimile: (213) 687-3702 Attorneys for Defendant CARRINGTON MORTGAGE SERVICES, LLC UNITED STATES DISTRICT COURT FOR THE CENTRAL DISTRICT OF CALIFORNIA SOUTHERN DIVISION CANDICE RITENOUR, individually, and on behalf of other members of the general public similarly situated; CHERYL WEISER, individually, and on behalf of other members of the general public similarly situated, Plaintiffs, vs. CARRINGTON MORTGAGE SERVICES, LLC, an unknown business entity; and DOES 1 through 100, inclusive, Defendant. CASE NO.: 8:16-cv-02011-CJC-DFM NOTICE OF MOTION AND MOTION TO DISMISS PLAINTIFFS’ COMPLAINT PURSUANT TO F.R.C.P. 12(B)(6) AND/OR STRIKE PURSUANT TO 12(F); MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT THEREOF [Filed concurrently with Declaration of Terry E. Sanchez] Judge: Hon. Cormac Carney Date: December 12, 2016 Time: 1:30 p.m. Dept.: 9B Action Filed: 9/30/2016 Case 8:16-cv-02011-CJC-DFM Document 10 Filed 11/14/16 Page 1 of 29 Page ID #:154 1 2 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 32809534.2 NOTICE OF MOTION AND MOTION TO DISMISS TO ALL PARTIES AND TO THEIR COUNSEL OF RECORD: NOTICE IS HEREBY GIVEN that on December 12, 2016, at 1:30 p.m., or as soon thereafter as the matter may be heard in Courtroom 9B of the above-entitled Court, Defendant Carrington Mortgage Services, LLC (“Defendant”) will and hereby does move for an Order, pursuant to Federal Rules of Civil Procedure 8(a)(2) and 12(b)(6), and/or 12(f), dismissing all ten causes of action in the Complaint filed by Plaintiffs Candice Ritenour and Cheryl Weiser (“Plaintiffs”) in this action. In the alternative, Defendant seeks an order striking the class allegations in Plaintiffs’ Complaint. Defendant has met and conferred with Plaintiffs prior to filing this motion as required by Local Rule 7-3. This motion is made on the following grounds: 1. Plaintiffs’ first through tenth causes of action fail to set forth specific, non-conclusory allegations that state a cause of action, as required by Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007) and Ashcroft v. Iqbal, 556 U.S. 662 (2009). 2. In addition to failing for the above reason, Plaintiffs’ fifth through eighth and tenth causes of action depend, at least in part, on the allegations of their first through fourth and ninth causes of action and, hence, independently fail to state a claim upon which relief can be granted to the extent they so depend. 3. In addition to failing for the above reasons, Plaintiffs’ fifth and sixth causes of action fail as a matter of law to the extent they contend that premiums due for failure to provide meal and/or rest periods are “wages” within the meaning of California Labor Code sections 201 through 204. 4. Plaintiffs’ class allegations should be stricken because the Complaint does not set forth factual allegations sufficient to show that Defendant engaged in any classwide policy or practice that violated California law or otherwise to show that Plaintiffs’ claims are typical of other putative class members and/or that common issues would predominate. Case 8:16-cv-02011-CJC-DFM Document 10 Filed 11/14/16 Page 2 of 29 Page ID #:155 1 2 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 32809534.2 NOTICE OF MOTION AND MOTION TO DISMISS This Motion is based on this Notice, the accompanying Memorandum of Points and Authorities in support thereof, the records and pleadings on file herein, and any other evidence and argument as may be presented. DATED: November 14, 2016 By: MUNGER, TOLLES & OLSON LLP TERRY E. SANCHEZ KATHERINE M. FORSTER MARGARET G. MARASCHINO /S/ Katherine M. Forster Attorneys for Defendant CARRINGTON MORTGAGE SERVICES, LLC Case 8:16-cv-02011-CJC-DFM Document 10 Filed 11/14/16 Page 3 of 29 Page ID #:156 1 2 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 TABLE OF CONTENTS Page 32809534.2 -i- NOTICE OF MOTION AND MOTION TO DISMISS I. INTRODUCTION ............................................................................................ 1 II. STATEMENT OF COMPLAINT .................................................................... 4 A. Procedural History ................................................................................. 4 B. Plaintiffs’ Overtime Allegations ............................................................ 5 C. Plaintiffs’ Meal And Rest Period Allegations ....................................... 5 D. Plaintiffs’ Minimum Wage Allegations ................................................. 6 E. Plaintiffs’ Allegations Regarding Failure To Pay Wages Timely Upon Termination And During Employment ........................................ 6 F. Plaintiffs’ Allegations Regarding Failure To Provide Accurate Wage Statements And Failure To Keep Accurate Payroll Records ................................................................................................... 7 G. Plaintiffs’ Business Expense Allegations .............................................. 7 H. Plaintiffs’ Unfair Competition Allegations. ........................................... 7 I. Plaintiffs’ Class Allegations. ................................................................. 7 III. LEGAL STANDARD ...................................................................................... 8 IV. ARGUMENT ................................................................................................... 9 A. None Of Plaintiffs’ Claims Are Supported By Adequate Factual Allegations. ............................................................................................ 9 1. The Complaint Fails to Set Forth Sufficient Factual Allegations to Support Plaintiffs’ First Cause of Action for Failure to Pay Overtime Wages. ............................................ 9 2. The Complaint Fails to Set Forth Sufficient Factual Allegations to Support Plaintiffs’ Second and Third Causes of Action for Failure to Provide Meal And Rest Periods. ...................................................................................... 11 3. The Complaint Fails To Set Forth Sufficient Factual Allegations To Support Plaintiffs’ Fourth Cause Of Action For Failure To Pay Minimum Wages. ........................... 14 4. The Complaint Fails To Set Forth Sufficient Factual Allegations To Support Plaintiffs’ Fifth And Sixth Causes Of Action. .................................................................................. 14 Case 8:16-cv-02011-CJC-DFM Document 10 Filed 11/14/16 Page 4 of 29 Page ID #:157 1 2 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 32809534.2 -ii- NOTICE OF MOTION AND MOTION TO DISMISS 5. The Complaint Fails To Set Forth Sufficient Factual Allegations To Support Plaintiffs’ Seventh and Eighth Causes Of Action. ...................................................................... 15 6. The Complaint Fails To Set Forth Sufficient Factual Allegations To Support Plaintiffs’ Ninth Cause Of Action For Failure To Reimburse Business Expenses. ......................... 16 7. The Complaint Fails To Set Forth Sufficient Factual Allegations To Support Plaintiffs’ Tenth Cause Of Action For Unfair Competition. ............................................................ 17 8. Plaintiffs’ Fifth Through Eighth And Tenth Causes Of Action Also Fail To The Extent They Rely On Plaintiffs’ Insufficient Allegations In The Second Through Fourth And Ninth Causes Of Action. .................................................... 17 9. Plaintiffs’ Fifth and Sixth Causes of Action Are Also Insufficient To The Extent They Contend That Failure To Pay Meal And/Or Rest Period Premiums Can Trigger Penalties For Failure To Pay Wages. ........................................ 18 B. Plaintiffs’ Class Allegations Should be Stricken. ................................ 19 V. CONCLUSION .............................................................................................. 20 Case 8:16-cv-02011-CJC-DFM Document 10 Filed 11/14/16 Page 5 of 29 Page ID #:158 1 2 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 TABLE OF AUTHORITIES Page(s) 32809534.2 -iii- NOTICE OF MOTION AND MOTION TO DISMISS FEDERAL CASES Anderson v. Blockbuster, Inc., 10-cv-00158-MCE-GGH, 2010 WL 1797249 (E.D. Cal. May 4, 2010) .............................................................................................................. 13, 15 Ashcroft v. Iqbal, 556 U.S. 662 (2009) ................................................................................. 1, passim Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007) ................................................................................. 1, passim Brecher v. Citigroup Global Markets, Inc., No. 3:09-cv-1344 AJB (MDD), 2011 WL 3475299 (S.D. Cal. Aug, 8, 2011) ................................................................................................................ 16 Brown v. Federal Express Corp., 249 F.R.D. 580 (C.D. Cal. 2008) ........................................................................ 20 Byrd v. Masonite Corp., No. EDCV 16-35 JGB (KKx), 2016 WL 756523 (C.D. Cal. Feb. 25, 2016) .................................................................................................... 2, 10, 19 Gormley v. Nike Inc., No. C 11-893 SI, 2013 WL 322538 (N.D. Cal. Jan. 28, 2013) ........................... 19 Gutierrez v. Aaron’s Inc., 2:10-cv-02417-MCE-EFB, 2010 WL 4968142 (E.D. Cal. Dec. 1, 2010) .............................................................................................................. 10, 15 Harding v. Time Warner, Inc., 09-cv-1212-WQH-WMc, 2009 WL 2575898 (S.D. Cal. Aug. 18, 2009) ........................................................................................................ 10, 13, 15 Jones v. Spherion Staffing LLC, No. LA CV11-06462 JAK (JCx), 2012 WL 3264081 (C.D. Cal. Aug. 7, 2012) ....................................................................................................... 19 Kenny v. SuperCuts, Inc., 252 F.R.D. 641 (N.D. Cal. 2008) ........................................................................ 20 Case 8:16-cv-02011-CJC-DFM Document 10 Filed 11/14/16 Page 6 of 29 Page ID #:159 1 2 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 32809534.2 -iv- NOTICE OF MOTION AND MOTION TO DISMISS Khalili v. Comerica Bank, No. 11-759 SC, 2011 WL 2445870 (N.D. Cal. June 16, 2011) .......................... 10 Landers v. Quality Commc’ns, 771 F.3d 638 (9th Cir. 2014) ..................................................................... 9, 10, 14 Miranda v. Coach, Inc., No. 14-CV-02031-JD, 2015 WL 636373 (N.D. Cal. Feb 13, 2015) ................... 13 Nelson v. Dollar Tree Stores, Inc., No. 2:11-CV-01334 JAM-CMK, 2011 WL 3568498 (E.D. Cal. Aug. 15, 2011) ..................................................................................................... 16 Ovieda v. Sodexo Operations, LLC, No. CV 12-1750-GHK, 2012 U.S. Dist. LEXIS 173844 (C.D. Cal. May 7, 2012) ........................................................................................................ 13 Perez v. Performance Food Grp., Inc., No. 15-cv-02390-HSG, 2016 WL 1161508 (N.D. Cal. Mar. 23, 2016) .................................................................................................................... 11 Perez v. Wells Fargo & Co., C-14-0989 PJH, 2014 WL 6997618 (N.D. Cal. Dec. 11, 2014) ......................... 10 Raphael v. Tesoro Refining and Marketing Co., LLC, No. 2:15-cv-02862-ODW(Ex), 2015 WL 4127905 (C.D. Cal. July 8, 2015) ................................................................................................................ 13 Reed v. Cty. of Orange, 266 F.R.D. 446 (C.D. Cal. 2010) ........................................................................ 20 Schneider v. Space Systems/Loral, Inc., No. 5:11-cv-02489-JF, 2011 U.S. Dist. LEXIS 104414 (N.D. Cal. Sept. 15, 2011) ..................................................................................................... 13 Washington v. Joe's Crab Shack, 271 F.R.D. 629 (N.D. Cal. 2010) ........................................................................ 20 Weigele v. FedEx Ground Package System, Inc., No. 06-CV-1330 JLS (POR), 2010 WL 4723673 (S.D. Cal. Nov. 15, 2010) ........................................................................................................ 12, 13 Case 8:16-cv-02011-CJC-DFM Document 10 Filed 11/14/16 Page 7 of 29 Page ID #:160 1 2 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 32809534.2 -v- NOTICE OF MOTION AND MOTION TO DISMISS Wert v. U.S. Bancorp, No. 13-CV 3130-BAS BLM, 2014 WL 2860287 (S.D. Cal. June 23, 2014) .............................................................................................................. 13 STATE CASES Brinker Restaurant Corp. v. Superior Court, 53 Cal. 4th 1004 (2012) ................................................................................... 2, 12 Gattuso v. Harte-Hanks Shoppers, Inc., 42 Cal. 4th 554 (2007) ..................................................................................... 3, 16 Kirby v. Immoos Fire Protection, Inc., 53 Cal. 4th 1244 (2012) ................................................................................... 4, 18 Murphy v. Kenneth Cole Productions, Inc., 40 Cal. 4th 1094 (2007) ....................................................................................... 18 FEDERAL STATUTES Class Action Fairness Act, 28 U.S.C. §§ 1332(d), 1453, 1711-1715 ........................ 4 STATE STATUTES Cal. Code Regs. Title 8, § 11040 ¶ 1 .......................................................................... 9 Cal. Code Regs. Title 8, § 11040 ¶ 3 .......................................................................... 9 Cal. Code Regs. Title 8, § 11040 ¶¶ 11-12 ............................................................... 11 Cal. Lab. Code §§ 201-204 ................................................................................. 18, 19 Cal. Lab. Code § 201(a) ............................................................................................ 18 Cal. Lab. Code § 204 ............................................................................................ 7, 17 Cal. Lab. Code § 226(a) ............................................................................................ 15 Cal. Lab. Code § 226.7 ................................................................................. 11, 18, 19 Cal. Lab. Code § 510 ...................................................................................... 9, 10, 13 Cal. Lab. Code § 512(a) ............................................................................................ 11 Cal. Lab. Code § 1194 .............................................................................................. 14 Case 8:16-cv-02011-CJC-DFM Document 10 Filed 11/14/16 Page 8 of 29 Page ID #:161 1 2 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 32809534.2 -vi- NOTICE OF MOTION AND MOTION TO DISMISS Cal. Lab. Code § 1194.2 ........................................................................................... 14 Cal. Lab. Code § 1197 .............................................................................................. 14 Cal. Lab. Code § 1197.1 ........................................................................................... 14 Cal. Lab. Code § 1198 ................................................................................................ 9 Cal. Lab. Code § 2802 .......................................................................................... 3, 16 FEDERAL RULES Rule 8(a)(2) ............................................................................................................. 8, 9 Rule 12(b)(6)............................................................................................................... 8 Rule 23 ...................................................................................................................... 19 Rule 23(d)(1)(D) ....................................................................................................... 19 OTHER AUTHORITIES 2 Alba Conte & Herbert B. Newberg, Newberg on Class Actions § 7.26 (4th ed. 2005) ............................................................................................ 19 Case 8:16-cv-02011-CJC-DFM Document 10 Filed 11/14/16 Page 9 of 29 Page ID #:162 1 2 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 32809534.2 -1- NOTICE OF MOTION AND MOTION TO DISMISS MEMORANDUM OF POINTS AND AUTHORITIES I. INTRODUCTION The allegations in Plaintiffs’ Complaint, which attempts to assert various wage and hour claims against their former employer, Defendant Carrington Mortgage Services, LLC (“Defendant” or “CMS”), do not meet the pleading requirements of the Federal Rules of Civil Procedure as clarified in Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007) and Ashcroft v. Iqbal, 556 U.S. 662 (2009). The allegations are nothing more than a boilerplate list of Labor Code provisions and a series of unsupported legal conclusions that CMS somehow violated those provisions, having the appearance of a strike suit. When Plaintiffs’ legal conclusions and formulaic recitals of the elements of each cause of action are stripped away, the remaining allegations fail to state any facts sufficient to establish a plausible basis for concluding that CMS acted unlawfully. Indeed, when Plaintiffs’ attorney filed a nearly identical complaint earlier this year, attempting to support the same ten causes of action with nearly identical conclusory allegations, this Court did not hesitate to dismiss the complaint, holding that such allegations do not state sufficient facts “to state a claim for unpaid overtime” and that “[t]his reasoning applies with equal force to all of Plaintiff's claims.” This Court concluded: Nowhere in the Complaint does Plaintiff identify a specific instance in which he was denied a minimum wage, a meal period, or rest break. With regard to Plaintiff's unpaid wages claims, Plaintiff does not allege what final wages he was owed upon leaving Defendants' employ, nor does he allege a single instance in which [the employer] failed to pay Plaintiff all wages due to him during his employment. Further, Plaintiff does not identify a single deficient wage statement or inadequate payroll record. Neither does Plaintiff allege what, if any, business- related expenses he incurred during his employment that [his employer] did not fully reimburse. Case 8:16-cv-02011-CJC-DFM Document 10 Filed 11/14/16 Page 10 of 29 Page ID #:163 1 2 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 32809534.2 -2- NOTICE OF MOTION AND MOTION TO DISMISS Byrd v. Masonite Corp., No. EDCV 16-35 JGB (KKx), 2016 WL 756523, at *3 (C.D. Cal. Feb. 25, 2016) (footnotes omitted). The same is true in this case. Plaintiffs’ first cause of action for unpaid overtime fails to allege any facts to support the conclusion that they were deprived of proper overtime wages. Plaintiffs allege in a conclusory and hypothetical fashion that CMS failed to incorporate “commissions/non-discretionary bonuses/non-discretionary performance pay” in the regular rate of pay for overtime purposes, “where Plaintiffs and the other class members earned commissions/non-discretionary bonuses/non-discretionary performance pay.” Compl. ¶ 29. Plaintiffs fail to allege any facts to establish that they were eligible to receive any form of compensation besides ordinary hourly pay, the nature of any such compensation, the terms of the applicable compensation plan, the circumstances under which such compensation could be earned, or whether they had, in fact, earned any such compensation. Similarly, Plaintiffs’ second and third causes of action for failure to provide meal and rest periods fails for lack of sufficient supporting factual allegations. Under the California Supreme Court’s decision in Brinker Restaurant Corp. v. Superior Court, 53 Cal. 4th 1004 (2012), CMS would be liable for failure to provide meal periods and/or rest breaks only if it somehow prevented employees from exercising these rights. The Complaint, however, states only in entirely conclusory terms that CMS “failed to provide” and Plaintiffs “did not receive” meal and rest periods. Compl. ¶¶ 30-32. Nowhere does the Complaint allege that Plaintiffs or any other employees were ever prevented from taking a meal period and/or rest break, how they were prevented, or whether they were ever prevented from doing so. Plaintiffs’ fourth cause of action for failure to pay minimum wages is similarly based on entirely conclusory allegations that they “were not receiving” minimum wages. Compl. ¶ 33. Nowhere do Plaintiffs allege what they were paid Case 8:16-cv-02011-CJC-DFM Document 10 Filed 11/14/16 Page 11 of 29 Page ID #:164 1 2 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 32809534.2 -3- NOTICE OF MOTION AND MOTION TO DISMISS or any facts to establish that the compensation they received fell below the applicable minimum wage in any workweek during their employment with CMS. Plaintiffs’ fifth and sixth causes of action for failure to pay wages timely upon discharge and during employment similarly fail because Plaintiffs have failed to allege what wages were due and when, if at all, they were paid. Plaintiffs’ seventh and eighth causes of action for failure to provide accurate wage statements and to keep accurate payroll records also fail because they are based purely on legal conclusions (i.e., purported failure to show all hours worked and/or all wages paid) and not on factual allegations that establish wrongdoing by CMS. Plaintiffs’ ninth cause of action for failure to reimburse business expenses is similarly devoid of factual allegations. Plaintiffs allege only that they “incurred necessary business-related expenses and costs that were not fully reimbursed by Defendants.” Compl. ¶ 112. They do not allege any facts to establish what those expenses were, how they were reasonable and necessary, or what policy or practice led to them being less than fully reimbursed. See Cal. Lab. Code § 2802; Gattuso v. Harte-Hanks Shoppers, Inc., 42 Cal. 4th 554, 561-62 (2007). Plaintiffs’ tenth cause of action for unfair competition is based on the defective allegations of the underlying claims and therefore fails as well. In addition to all of the claims failing independently under Iqbal and Twombly for the reasons stated above, Plaintiffs’ fifth through eighth and tenth causes of action depend, at least in part, on their first through fourth and/or ninth causes of action and therefore must be dismissed to the extent they so rely. Furthermore, Plaintiffs’ fifth and sixth causes of action (failure to pay all wages timely upon termination and during employment) also depend, at least in part, on the legal theory that the premium pay due for failure to provide a meal period and/or rest break constitutes a “wage” within the meaning of the statutes under which these claims arise. See Compl. ¶¶ 34-35 (asserting that wages not paid Case 8:16-cv-02011-CJC-DFM Document 10 Filed 11/14/16 Page 12 of 29 Page ID #:165 1 2 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 32809534.2 -4- NOTICE OF MOTION AND MOTION TO DISMISS timely upon termination and during employment included “meal and rest period premiums”). That theory, however, is not viable in light of the California Supreme Court’s decision in Kirby v. Immoos Fire Protection, Inc., 53 Cal. 4th 1244 (2012), which held that meal and rest period premiums are remedies for health and safety violations, not wages for labor performed. For this independent reason as well, Plaintiffs’ fifth and sixth causes of action must be dismissed to the extent they rely on their second and third causes of action. Finally, Plaintiffs’ class allegations should be stricken because they have not alleged any classwide policy or practice in their Complaint, nor have they alleged facts to show that their claims are typical of other putative class members or that common issues would predominate the litigation. II. STATEMENT OF COMPLAINT A. Procedural History On September 30, 2016, Plaintiff filed this putative class action against Defendant Carrington Mortgage Services, LLC (“Defendant” or “CMS”) in the Superior Court of the State of California, County of Orange. The Complaint asserts the following claims for relief on behalf of Plaintiffs and others allegedly similarly situated: (1) Failure to Pay Overtime Wages; (2) Failure to Provide Meal Periods; (3) Failure to Provide Rest Periods; (4) Failure to Pay Minimum Wages; (5) Failure to Pay Final Wages Timely; (6) Failure to Pay Wages Timely During Employment; (7) Failure to Provide Accurate Written Wage Statements; (8) Failure to Keep Accurate Payroll Records; (9) Failure to Reimburse Business Expenses; and (10) Unfair Competition. On November 4, 2016, Defendant removed the action to this Court pursuant to the Class Action Fairness Act (“CAFA”), 28 U.S.C. §§ 1332(d), 1453, 1711- 1715. After Plaintiffs’ counsel failed to participate in an initial meet and confer call set for November 4, on November 6, 2016, Defendant’s counsel met and conferred with Plaintiffs’ counsel explaining that the allegations supporting Plaintiffs’ claims Case 8:16-cv-02011-CJC-DFM Document 10 Filed 11/14/16 Page 13 of 29 Page ID #:166 1 2 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 32809534.2 -5- NOTICE OF MOTION AND MOTION TO DISMISS were insufficient and requesting that Plaintiffs’ counsel provide additional supporting allegations. (Declaration of Terry E. Sanchez ¶ 2.) Plaintiffs’ counsel informed Defendant’s counsel that he disagreed and would oppose Defendant’s motion to dismiss, but otherwise refused to explain why the allegations of the Complaint were sufficient. Id. ¶ 3. Plaintiffs’ counsel also declined to amend the Complaint voluntarily. Id. This motion followed. B. Plaintiffs’ Overtime Allegations Plaintiffs’ first cause of action for unpaid overtime sets forth a series of formulaic and conclusory statements that lack the specific factual content required by the United States Supreme Court’s decision in Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007) and Ashcroft v. Iqbal, 556 U.S. 662 (2009). The allegations in the Complaint that pertain to this claim are as follows:  “At all material times set forth herein, Defendants failed to pay overtime wages to Plaintiffs and the other class members for all hours worked. Plaintiffs and the other class members were required to work more than eight (8) hours per day and/or forty (40) hours per week without overtime compensation.” Compl. ¶ 40; see also id. ¶¶ 26 & 56.  “Defendants failed to use the commissions/non-discretionary bonuses/non- discretionary performance pay to calculate the regular rate of pay used to calculate the overtime rate for the payment of overtime wages where Plaintiffs and the other class members earned commissions/non-discretionary bonuses/non-discretionary performance pay and overtime wages in the same workweek.” Compl. ¶¶ 29, 41. C. Plaintiffs’ Meal And Rest Period Allegations Plaintiffs’ second and third causes of action for failure to provide meal and rest periods similarly fail to include specific factual allegations as required by Twombly and Iqbal and instead rely on the following legal conclusions:  “At all material times set forth herein, Defendants failed to provide the requisite uninterrupted meal and rest periods to Plaintiffs and the other class members.” Compl. ¶ 42.  “During the relevant time period, Plaintiffs and the other class members who were scheduled to work for a period of time no longer than six (6) hours, and Case 8:16-cv-02011-CJC-DFM Document 10 Filed 11/14/16 Page 14 of 29 Page ID #:167 1 2 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 32809534.2 -6- NOTICE OF MOTION AND MOTION TO DISMISS who did not waive their legally-mandated meal periods by mutual consent, were required to work for periods longer than five (5) hours without an uninterrupted meal period of not less than thirty (30) minutes and/or rest period.” Compl. ¶ 65.  “During the relevant time period, Plaintiffs and the other class members who were scheduled to work for a period of time in excess of six (6) hours were required to work for periods longer than five (5) hours without an uninterrupted meal period of not less than thirty (30) minutes and/or rest period.” Compl. ¶ 66.  “At all material times set forth herein, Defendants failed to provide the requisite uninterrupted meal and rest periods to Plaintiffs and the other class members.” Compl. ¶ 42.  “During the relevant time period, Defendants required Plaintiffs and other class members to work four (4) or more hours without authorizing or permitting a ten (10) minute rest period per each four (4) hour period worked.” Compl. ¶ 75. D. Plaintiffs’ Minimum Wage Allegations Plaintiffs’ allegations in support of their claim for failure to pay minimum wages also consist solely of a conclusory statement that does not include sufficient facts to state a claim under Twombly and Iqbal: “At all material times set forth herein, Defendants failed to pay Plaintiffs and the other class members at least minimum wages for all hours worked.” Compl. ¶ 43. E. Plaintiffs’ Allegations Regarding Failure To Pay Wages Timely Upon Termination And During Employment Plaintiffs base their claims for failure to pay wages timely upon termination and during employment on the following allegations, which are similarly devoid of facts:  “During the relevant time period, Defendants intentionally and willfully failed to pay Plaintiffs and the other class members who are no longer employed by Defendants their wages, earned and unpaid, within seventy-two (72) hours of their leaving Defendants’ employ.” Compl. ¶ 88.  “During the relevant time period, Defendants intentionally and willfully failed to pay Plaintiffs and the other class members all wages due to them, Case 8:16-cv-02011-CJC-DFM Document 10 Filed 11/14/16 Page 15 of 29 Page ID #:168 1 2 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 32809534.2 -7- NOTICE OF MOTION AND MOTION TO DISMISS within any time period permissible under California Labor Code section 204.” Compl. ¶ 96. F. Plaintiffs’ Allegations Regarding Failure To Provide Accurate Wage Statements And Failure To Keep Accurate Payroll Records Plaintiffs base their claims for failure to provide accurate wage statements and failure to keep accurate payroll records on the following conclusory allegations:  “Defendants have intentionally and willfully failed to provide Plaintiffs and the other class members with complete and accurate wage statements. The deficiencies include, but are not limited to: the failure to include the total number of hours worked by Plaintiffs and the other class members.” Compl. ¶ 100.  “Defendants have intentionally and willfully failed to keep accurate and complete payroll records showing the hours worked daily and the wages paid, to Plaintiffs and the other class members.” Compl. ¶ 107. G. Plaintiffs’ Business Expense Allegations Plaintiffs’ claim for alleged unreimbursed business expenses also relies on mere legal conclusions:  “At all material times set forth herein, Defendants failed to reimburse Plaintiffs and the other class members for necessary business-related expenses and costs.” Compl. ¶ 48.  “Plaintiffs and the other class members incurred necessary business-related expenses and costs that were not fully reimbursed by Defendants.” Compl. ¶ 112. H. Plaintiffs’ Unfair Competition Allegations. Plaintiffs’ claim for unfair competition relies entirely on the defective allegations of their underlying claims. See Compl. ¶ 117. I. Plaintiffs’ Class Allegations. Plaintiffs allege that their claims are typical of the other class members’ claims. Compl. ¶ 16(b). The Complaint, however, does not identify any common policy, practice, rule or course of conduct applicable to putative class members generally that would render Plaintiffs’ claims susceptible to common proof. See Case 8:16-cv-02011-CJC-DFM Document 10 Filed 11/14/16 Page 16 of 29 Page ID #:169 1 2 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 32809534.2 -8- NOTICE OF MOTION AND MOTION TO DISMISS Compl. ¶ 14. Plaintiffs’ allegations as to the purported common questions of law or fact suffer from the same defect. See Compl. ¶ 17. III. LEGAL STANDARD Rule 8(a)(2) of the Federal Rules of Civil Procedure requires that each claim in a pleading be supported by “a short and plain statement of the claim showing that the pleader is entitled to relief.” Id. To satisfy Rule 8(a)(2) and survive dismissal under Rule 12(b)(6) of the Federal Rules of Civil Procedure, a complaint must contain sufficient factual matter “to state a claim to relief that is plausible on its face.” Twombly, 550 U.S. at 570. “Threadbare recitals of elements of a cause of action, supported by mere conclusory statements, do not suffice.” Iqbal, 556 U.S. at 678 (quoting Twombly, 550 U.S. at 555). Plaintiffs’ claims, as contained in their Complaint, fail this straightforward test. A plaintiff cannot survive dismissal by making conclusory allegations that the elements of a claim have been satisfied. “[T]he tenet that a court must accept as true all of the allegations contained in a complaint is inapplicable to legal conclusions,” Iqbal, 556 U.S. at 678, and “a plaintiffs obligations to provide the ‘grounds’ of his ‘entitle[ment] to relief requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do.” Twombly, 550 U.S. at 555. “[T]he Federal Rules do not require courts to credit a complaint’s conclusory statements without reference to its factual context.” Iqbal, 556 U.S. at 686. Facts that are merely consistent with a defendant’s liability “stop[] short of the line between possibility and plausibility of entitlement to relief.” Twombly, 550 U.S. at 557; Iqbal, 556 U.S. at 678 (internal quotation marks omitted). Rather, “factual allegations must be enough to raise a right to relief above the speculative level.” Twombly, 550 U.S. at 555. Only then do they fulfill the requirement of Federal Rule of Civil Procedure 8(a)(2) that the complaint provide the defendant Case 8:16-cv-02011-CJC-DFM Document 10 Filed 11/14/16 Page 17 of 29 Page ID #:170 1 2 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 32809534.2 -9- NOTICE OF MOTION AND MOTION TO DISMISS with “fair notice of what the . . . claim is and the grounds upon which it rests.” Id. (internal quotation marks omitted). IV. ARGUMENT A. None Of Plaintiffs’ Claims Are Supported By Adequate Factual Allegations. 1. The Complaint Fails to Set Forth Sufficient Factual Allegations to Support Plaintiffs’ First Cause of Action for Failure to Pay Overtime Wages. Plaintiffs’ first cause of action for failure to pay overtime wages consists of legal conclusions and is devoid of any factual allegations that put CMS on notice of the policy or practice being challenged. The California Labor Code and Code of Regulations collectively require that employers pay overtime compensation to non-exempt employees at one-and-one-half times the regular hourly rate for hours worked in excess of eight (8) hours in a day or forty (40) hours in a week or for the first eight (8) hours worked on the seventh day of work, and twice the regular hourly rate for hours worked in excess of twelve (12) hours in a day or in excess of eight (8) hours in a day on the seventh day of work. Cal. Lab. Code §§ 510 & 1198; Cal. Code Regs. tit. 8, § 11040 ¶ 3.1 The bulk of Plaintiffs’ allegations concerning unpaid overtime simply repeat this statutory and regulatory language. Compl. ¶¶ 52-55, 58. Beyond that, Plaintiffs state that they and other putative class members “were required to work more than eight (8) hours per day and/or forty (40) hours per week without overtime compensation.” Compl. ¶ 40. Such allegations are speculative and conclusory, however, and do not suffice to allege a single week in which either Plaintiff actually worked and was entitled to overtime pay. See Landers v. Quality Commc’ns, 771 F.3d 638, 646 (9th Cir. 2014) 1 Plaintiffs do not even allege what the operative regulations are, referring only to “the applicable Industrial Welfare Commission (“IWC”) Wage Order.” Compl. ¶ 52. CMS cites Wage Order 4-2001, which applies to employees in “professional, technical, clerical, mechanical, and similar occupations” not covered by any industry-specific wage order. Cal. Code Regs. tit. 8, § 11040 ¶ 1. Case 8:16-cv-02011-CJC-DFM Document 10 Filed 11/14/16 Page 18 of 29 Page ID #:171 1 2 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 32809534.2 -10- NOTICE OF MOTION AND MOTION TO DISMISS (cert. denied Apr. 20, 2015) (affirming dismissal of complaint that included identical allegations, and noting that such allegations fail to provide “sufficient detail about the length and frequency of [plaintiff’s] unpaid work to support a reasonable inference that [plaintiff] worked more than forty hours in a given week.” (internal citations omitted)).2 The only other allegation Plaintiffs make in support of this cause of action is that CMS “failed to use the commissions/non-discretionary bonuses/non- discretionary performance pay to calculate the regular rate of pay used to calculate the overtime rate for the payment of overtime wages where Plaintiffs and the other class members earned commissions/non-discretionary bonuses/non-discretionary performance pay and overtime wages in the same workweek.” Compl. ¶¶ 29, 41. Plaintiffs’ allegations do not come close to giving fair notice to CMS of the policy or practice being challenged. Plaintiffs have simply alleged a laundry list of types of compensation besides ordinary hourly pay without any facts to establish that Plaintiffs were eligible to receive any form of commission, bonus, or other 2 Numerous district court cases are in accord. See Byrd, 2016 WL 756523, at *3 (applying Landers and dismissing overtime claims under California Labor Code where plaintiff failed to identify a single workweek in which he worked in excess of eight hours in a day or forty hours in a week such that he was entitled to overtime pay, his rate of pay, an estimate how much overtime he was entitled to but did not receive, whether this occurred on a consistent basis, or the basis for his knowledge and belief that other employees worked shifts in excess of eight hours and/or forty hours without adequate compensation); Perez v. Wells Fargo & Co., C-14-0989 PJH, 2014 WL 6997618, at *7 (N.D. Cal. Dec. 11, 2014) (discussing Landers and stating: “allegations such as those asserted in the FAC-that certain plaintiffs ‘regularly’ or ‘regularly and consistently’ worked more than 40 hours per week-fall short of the Twombly/Iqbal standard and are thus insufficient to state a claim for denial of overtime compensation.”); Harding v. Time Warner, Inc., 09-cv- 1212-WQH-WMc, 2009 WL 2575898, at *3 (S.D. Cal. Aug. 18, 2009) (dismissing allegations under the FLSA and the California Labor Code that defendant failed to “pay and properly calculate overtime”); Gutierrez v. Aaron’s Inc., 2:10-cv- 02417- MCE-EFB, 2010 WL 4968142, at *2-3 (E.D. Cal. Dec. 1, 2010) (dismissing the plaintiffs wage and hour claims, including overtime claims under California Labor Code Section 510, where plaintiff merely provided “a recitation of the applicable law followed by a legal conclusion referencing Defendant.”); Khalili v. Comerica Bank, No. 11-759 SC, 2011 WL 2445870, at *3 (N.D. Cal. June 16, 2011) (finding “insufficient” under Iqbal “a bald allegation that Defendants failed to pay her overtime,” because “Plaintiff essentially states, ‘Defendants wrongly harmed me,’ without explaining the nature of that alleged harm.”). Case 8:16-cv-02011-CJC-DFM Document 10 Filed 11/14/16 Page 19 of 29 Page ID #:172 1 2 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 32809534.2 -11- NOTICE OF MOTION AND MOTION TO DISMISS incentive compensation. They also fail to explain the nature of any such additional compensation, the terms of the plan(s) or policies governing any such compensation, or whether they even earned any such undefined compensation. The assertion regarding “non-discretionary” pay is itself conclusory, since the question whether a given pay plan is discretionary or non-discretionary in nature often depends on a complex legal analysis. Among other things, Plaintiffs fail to allege the conditions under which such compensation could be earned and whether they met those conditions. Under Twombly and Iqbal, their pleading is legally insufficient absent such facts, and so the first cause of action must be dismissed. See Perez v. Performance Food Grp., Inc., No. 15-cv-02390-HSG, 2016 WL 1161508, at *2 (N.D. Cal. Mar. 23, 2016) (dismissing overtime claim where plaintiff alleged, among other things, that employer had “not correctly calculate[ed plaintiffs’] regular rate of pay to include all applicable remuneration, including, but not limited to, non-discretionary bonuses and/or shift differentials”). 2. The Complaint Fails to Set Forth Sufficient Factual Allegations to Support Plaintiffs’ Second and Third Causes of Action for Failure to Provide Meal And Rest Periods. Plaintiffs’ meal and rest period claims similarly reveal that the Complaint is little more than a “formulaic recitation of the elements of a cause of action,” devoid of any “factual enhancement” which would render those conclusions plausible. The California Labor Code and Code of Regulations collectively require that employers “provide” 30-minute meal periods and “authorize and permit” 10-minute rest breaks to their non-exempt employees who work a specified number of hours. Cal. Lab. Code § 512(a); Cal. Code Regs. tit. 8, § 11040 ¶¶ 11-12. The Labor Code also provides that no employer shall require an employee to work during a mandated meal or rest period. Cal. Lab. Code § 226.7. Again, most of Plaintiffs’ allegations concerning missed meal periods and rest breaks simply repeat this statutory and regulatory language. Compl. ¶¶ 62-64, 73-75. Case 8:16-cv-02011-CJC-DFM Document 10 Filed 11/14/16 Page 20 of 29 Page ID #:173 1 2 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 32809534.2 -12- NOTICE OF MOTION AND MOTION TO DISMISS With regard to meal periods, the Complaint alleges only that Plaintiff and other putative class members “who were scheduled to work for a period of time no longer than six (6) hours, and who did not waive their legally-mandated meal periods by mutual consent, were required to work for periods longer than five (5) hours without an uninterrupted meal period of not less than thirty (30) minutes and/or rest period.” Compl. ¶ 65. The Complaint then makes the same allegation as to all putative class members without reference to the waiver issue. Compl. ¶ 66. With regard to rest breaks, the Complaint alleges only that “Defendants required Plaintiffs and other class members to work four (4) or more hours without authorizing or permitting a ten (10) minute rest period per each four (4) hour period worked.” Compl. ¶ 75. These legal conclusions do not fulfill Plaintiffs’ burden to set forth sufficient factual allegations to establish a plausible basis for concluding that CMS has violated the relevant statutes. Under Brinker, an employer is liable for failure to provide meal and/or rest periods only if it somehow prevented employees from exercising these rights. 53 Cal. 4th at 1051. But the Complaint does not identify any specific rule, policy or practice which prevented Plaintiffs and members of the putative class from taking meal or rest periods in accordance with California law. The Complaint also fails to describe any conditions or circumstances of work which interfered with taking meal periods within the requisite time limits. Pursuant to Iqbal and Twombly, such “naked assertions devoid of further factual enhancement” are not even entitled to the presumption of truth, and are therefore wholly insufficient to state a claim for relief. Twombly, 550 U.S. at 555, 557; Iqbal, 556 U.S. 678-80. District courts routinely hold that such conclusory allegations of meal and/or rest break violations are insufficient to survive a motion to dismiss. For example, in Weigele v. FedEx Ground Package System, Inc., No. 06-CV-1330 JLS (POR), 2010 WL 4723673 (S.D. Cal. Nov. 15, 2010), the court held that the following similar allegations were legally insufficient: Case 8:16-cv-02011-CJC-DFM Document 10 Filed 11/14/16 Page 21 of 29 Page ID #:174 1 2 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 32809534.2 -13- NOTICE OF MOTION AND MOTION TO DISMISS the Defendant required Plaintiffs to work . . . without being given a 30- minute meal period for shifts of at least five hours and second 30- minute meal periods for shifts of at least ten hours during which Plaintiffs [sic] were relieved of all duties and free to leave the premises, nor did Defendant pay any Plaintiffs one hour’s pay at the employee’s regular rate of pay as premium pay compensation for failure to provide . . . meal periods. Id. at *4 (alterations in original). See also Raphael v. Tesoro Refining and Marketing Co., LLC, No. 2:15-cv-02862-ODW(Ex), 2015 WL 4127905, at *3 (C.D. Cal. July 8, 2015) (dismissing complaint where plaintiff included no relevant facts or dates during which alleged violations occurred, just that “at all relevant times” employer failed to comply with a “laundry list” of regulations); Wert v. U.S. Bancorp, No. 13-CV 3130-BAS BLM, 2014 WL 2860287, at *5 (S.D. Cal. June 23, 2014) (holding that allegations stating “Defendants . . . did not provide plaintiff with meal breaks” in accordance with California law “fail[ed] to adequately allege facts” sufficient to survive a motion to dismiss).3 3 Again, many other district court decisions are in accord. See Miranda v. Coach, Inc., No. 14-CV-02031-JD, 2015 WL 636373, *2 (N.D. Cal. Feb 13, 2015) (holding allegations that “merely parrot the statute without stating facts” were insufficient to uphold plaintiffs claim under Labor Code section 510); Ovieda v. Sodexo Operations, LLC, No. CV 12-1750-GHK (SSx), 2012 U.S. Dist. LEXIS 173844, at *7 (C.D. Cal. May 7, 2012) (dismissing complaint alleging wage and hour violations that “simply recite the statutory language setting forth the elements of the claim, and then slavishly repeat the statutory language as to the purported factual allegations”) (internal alterations and quotation marks omitted); Harding v. Time Warner, Inc., No. 09cv2323-WQH-WMc, 2009 WL 2575898, at *4 (S.D. Cal. Aug. 18, 2009) (dismissing claim for uninterrupted meal periods based on finding that complaint “fails to allege sufficient non-conclusory factual content” (internal quotation marks omitted)); Anderson v. Blockbuster, Inc., 10-cv-00158-MCE-GGH, 2010 WL 1797249, at *3 (E.D. Cal. May 4, 2010) (dismissing claim for failure to provide rest breaks where allegations “simply parrot the statutory language” without providing sufficient facts); Schneider v. Space Systems/Loral, Inc., No. 5:11-cv-02489-JF, 2011 U.S. Dist. LEXIS 104414, at *5-6 (N.D. Cal. Sept. 15, 2011) (finding insufficient allegation that plaintiff and putative class members Case 8:16-cv-02011-CJC-DFM Document 10 Filed 11/14/16 Page 22 of 29 Page ID #:175 1 2 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 32809534.2 -14- NOTICE OF MOTION AND MOTION TO DISMISS 3. The Complaint Fails To Set Forth Sufficient Factual Allegations To Support Plaintiffs’ Fourth Cause Of Action For Failure To Pay Minimum Wages. Plaintiffs’ minimum wage claim also suffers from a fatal lack of factual allegations. The California Labor Code requires that employers pay minimum wages, provides that payment of a lesser wage is unlawful, and prescribes certain penalties for violations. Cal. Lab. Code §§ 1194, 1194.2, 1197, 1197.1. As with their meal and rest period claims, the bulk of Plaintiffs’ allegations concerning minimum wages simply repeat this statutory language. Compl. ¶¶ 81-85. The only other allegation in the Complaint is the entirely conclusory statement that “Defendants failed to pay Plaintiffs and the other class members at least minimum wages for all hours worked.” Compl. ¶ 43. This is plainly insufficient to put CMS on notice of what policy or practice is being challenged. Indeed, the Complaint does not include any information as to why Plaintiffs believe they did not earn the minimum wage that is mandated by California law or any specific workweek during which this actually occurred. They allege no facts regarding what number of hours they worked in a week, what they were paid for those hours, or how that amount fell below the statutory minimum. Without such basic facts, Plaintiffs cannot state a claim and the claim must be dismissed. See Landers, 771 F.3d at 646 (“[A]t a minimum the plaintiff must allege at least one workweek when he . . . was not paid minimum wages.”). 4. The Complaint Fails To Set Forth Sufficient Factual Allegations To Support Plaintiffs’ Fifth And Sixth Causes Of Action. The Complaint also does not contain sufficient factual allegations to support a claim for failure to pay wages on termination (fifth cause of action) or during employment (sixth cause of action). The Complaint contains only conclusory allegations that such wages were not paid timely. Compl. ¶¶ 88, 96. “worked without being given paid 10-minute rest periods . . . and . . . a 30-minute meal period and second 30-minute meal periods as required by law”). Case 8:16-cv-02011-CJC-DFM Document 10 Filed 11/14/16 Page 23 of 29 Page ID #:176 1 2 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 32809534.2 -15- NOTICE OF MOTION AND MOTION TO DISMISS The Complaint does not contain any supporting factual allegations such as what wages they believe they are owed, the amount of those wages, or any facts relating to the time period any payments occurred either during employment or upon termination. Such conclusory claims for failure to pay wages upon discharge or during employment are insufficient to state a claim. See Iqbal, 556 U.S. at 678 (“Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice.”) (citations omitted); Anderson, 2010 WL 1797249, at *3 (“These conclusory allegations do not meet minimum pleading requirements. Plaintiff fails to state when or how Defendant failed to pay the required wages. Without more, such legal conclusions do not suffice.”). Accordingly, Plaintiffs’ fifth and sixth causes of action must be dismissed. 5. The Complaint Fails To Set Forth Sufficient Factual Allegations To Support Plaintiffs’ Seventh and Eighth Causes Of Action. Plaintiffs’s claims for failure to provide accurate wage statements (seventh cause of action) and to keep accurate payroll records (eighth cause of action) also fail for lack of sufficient factual support. They only allege in a conclusory manner that the deficiencies in their wage statements and payroll records included the failure to list “the total number of hours worked” and, in the case of the payroll records, “the wages paid” to Plaintiff and other putative class members. Compl. ¶¶ 100, 107. Plaintiffs do not explain how this is the case or why this information is not accurate. Their allegations as to the payroll records are similarly vague and do not explain how they fail to show all wages due. Accordingly, these claims must be dismissed. Harding, 2009 WL 2575898, at *3 (dismissing allegations that defendant failed to “provide accurate Itemized Wage Statements” and failed to “keep accurate records of all hours worked by its employees”); Gutierrez, 2010 WL 4968142, at *3 (dismissing the plaintiffs claim for violation of Labor Code section 226(a) where the plaintiff only alleged a policy of subtracting time from paychecks Case 8:16-cv-02011-CJC-DFM Document 10 Filed 11/14/16 Page 24 of 29 Page ID #:177 1 2 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 32809534.2 -16- NOTICE OF MOTION AND MOTION TO DISMISS on the ground that “conclusory statements are not sufficient to state a cause of action upon which relief may be granted.”). 6. The Complaint Fails To Set Forth Sufficient Factual Allegations To Support Plaintiffs’ Ninth Cause Of Action For Failure To Reimburse Business Expenses. Under California law, employers are required to reimburse employees for all necessary, reasonable expenses they incur in carrying out their job duties or obeying the directions of their employer. Cal. Lab. Code § 2802; Gattuso, 42 Cal. 4th at 561-62. Plaintiffs state this general legal principle in support of their claim for unreimbursed business expenses. See Compl. ¶ 111. Beyond that, however, all they allege is that “Plaintiffs and the other class members incurred necessary business-related expenses and costs that were not fully reimbursed by Defendants.” Compl. ¶ 112. Plaintiffs completely fail to explain what expenses they incurred, when they were incurred, why they were necessary, whether they were reasonable, how those expenses were related to carrying out their job duties and/or obeying the directions of CMS, whether they submitted them for reimbursement, and how CMS failed to reimburse them. Accordingly, this claim too should be dismissed. See Brecher v. Citigroup Global Markets, Inc., No. 3:09-cv-1344 AJB (MDD), 2011 WL 3475299, at *8 (S.D. Cal. Aug, 8, 2011) (“the statement that ‘necessary expenditures’ were made without reimbursement is precisely the type of bare assertion and conclusory statement that the Supreme Court has held insufficient to survive a motion to dismiss”); Nelson v. Dollar Tree Stores, Inc., No. 2:11-CV- 01334 JAM-CMK, 2011 WL 3568498, at *2 (E.D. Cal. Aug. 15, 2011) (dismissing reimbursement claim under section 2802 where complaint failed to explain “how or when Defendant failed to reimburse Plaintiff, or any other potential class members, for business expenses; the specific nature of the business expenses at issue; and whether and how Defendant not only acquired knowledge that such expenses were incurred by Plaintiff, or any other class members, but also willfully refused to reimburse such expenses.”). Case 8:16-cv-02011-CJC-DFM Document 10 Filed 11/14/16 Page 25 of 29 Page ID #:178 1 2 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 32809534.2 -17- NOTICE OF MOTION AND MOTION TO DISMISS 7. The Complaint Fails To Set Forth Sufficient Factual Allegations To Support Plaintiffs’ Tenth Cause Of Action For Unfair Competition. Plaintiffs’ tenth cause of action for unfair competition is based entirely on the defective allegations of the first through ninth causes of action. Compl. ¶ 117. This claim should be dismissed because it fails along with those underlying claims. 8. Plaintiffs’ Fifth Through Eighth And Tenth Causes Of Action Also Fail To The Extent They Rely On Plaintiffs’ Insufficient Allegations In The Second Through Fourth And Ninth Causes Of Action. In addition to failing for the reasons set forth above, Plaintiffs’ fifth through eighth and tenth causes of action all depend, at least in part, on establishing that CMS has not paid all of their wages due during their employment. Plaintiffs’ fifth cause of action for failure to pay all final wages timely is based on Defendant’s alleged failure to pay their “wages, earned and unpaid, within 72 hours of their leaving Defendant’s employ.” Compl. ¶ 88. The Complaint expressly states that this includes “overtime and minimum wages and meal and rest period premiums.” Compl. ¶ 34. Similarly, Plaintiffs’ sixth cause of action for failure to pay wages timely during employment is expressly based on Defendant’s alleged failure to pay “all wages, including overtime and minimum wages and meal and rest period premiums, within any time permissible under California Labor code section 204.” Compl. ¶ 35 (emphasis added). Plaintiffs’ seventh cause of action for failure to provide accurate wage statements is somewhat unclear but states that the “deficiencies” in the wage statements “include, but are not limited to: the failure to include the total number of hours worked by Plaintiffs and the other class members.” Compl. ¶ 100 (emphasis added). The eighth cause of action similarly alleges among the deficiencies in the payroll records failure to include “the hours worked daily and the wages paid” to Plaintiffs. Compl. ¶ 107. And Plaintiffs’ tenth cause of action for unfair competition is also premised entirely on conclusory allegations summarizing the other claims in the Complaint. Compl. ¶ 117. Case 8:16-cv-02011-CJC-DFM Document 10 Filed 11/14/16 Page 26 of 29 Page ID #:179 1 2 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 32809534.2 -18- NOTICE OF MOTION AND MOTION TO DISMISS Since Plaintiffs’ first through fourth and ninth causes of action fail for lack of sufficient factual allegations, Plaintiffs’ fifth through eighth and tenth causes of action are similarly defective insofar as they derive from those causes of action. Thus, to the extent any of these claims are not dismissed independently on the grounds stated above, they should be dismissed for this reason. 9. Plaintiffs’ Fifth and Sixth Causes of Action Are Also Insufficient To The Extent They Contend That Failure To Pay Meal And/Or Rest Period Premiums Can Trigger Penalties For Failure To Pay Wages. As detailed above, Plaintiffs’ causes of action for failure to pay wages timely upon termination (fifth cause of action) and during employment (sixth cause of action) depend partly on the second and third causes of action for failure to provide meal and rest periods, respectively. Plaintiffs’ theory is that CMS’ alleged failure to provide meal and/or rest periods required by law gives rise to liability for premium wages pursuant to Labor Code section 226.7, and the failure to pay those premium wages timely or to include them on the employee’s wage statement or in CMS’ payroll records results in violations of Labor Code sections 201-204. Plaintiffs’ theory is flawed because meal and rest period premiums are not “wages” within the meaning of those sections. These sections are concerned only with compensation due to employees for their labor. The penalties for failure to pay wages timely are triggered by failure to pay wages “in accordance with sections 201, 201.3, 201.5, 202, and 205.5,” which require only payment of “wages earned.” Cal. Labor Code § 201(a). Meal and rest period premiums, however, are not compensation for labor performed, but rather a remedy for failure to ensure the employee’s health and well-being through reasonable working conditions. Kirby, 53 Cal. 4th at 1255-56; Murphy v. Kenneth Cole Productions, Inc., 40 Cal. 4th 1094, 1113 (2007) (payment under section 226.7 “compensates the employee for events other than time spent working”). Moreover, “a finding that section 226.7 violations can form the basis for claims under . . . section 203, would result in an Case 8:16-cv-02011-CJC-DFM Document 10 Filed 11/14/16 Page 27 of 29 Page ID #:180 1 2 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 32809534.2 -19- NOTICE OF MOTION AND MOTION TO DISMISS improper, multiple recovery by the employee.” Jones v. Spherion Staffing LLC, No. LA CV11-06462 JAK (JCx), 2012 WL 3264081, at *9 (C.D. Cal. Aug. 7, 2012). Because the failure to pay premium wages due under section 226.7 cannot support a claim under Labor Code sections 201 through 204, Plaintiffs’ fifth and sixth causes of action fail to the extent they rely on their second and third causes of action, providing an independent reasons to dismiss them to the extent they so rely. B. Plaintiffs’ Class Allegations Should be Stricken. Rule 23 authorizes courts to enter an order “requir[ing] that the pleadings be amended to eliminate therefrom allegations about representation of absent persons and that the action proceed accordingly.” Fed. R. Civ. P. 23(d)(1)(D). As when evaluating other allegations, the court “need not blindly rely on conclusory allegations which parrot Rule 23 requirements,” but should “consider the legal and factual issues presented by plaintiff's complaint.” Gormley v. Nike Inc., No. C 11- 893 SI, 2013 WL 322538, at *3 (N.D. Cal. Jan. 28, 2013) (quoting 2 Alba Conte & Herbert B. Newberg, Newberg on Class Actions § 7.26 (4th ed. 2005)). As explained above, the Complaint fails to allege any classwide policy or practice that resulted in any of the legal violations alleged, much less any basis on which to conclude that Plaintiffs’ experiences were typical of other putative class member or that common questions would predominate the litigation. This is insufficient, as this Court held in a recent case involving a similar laundry list of “conclusory allegations” of Labor Code violations. Byrd, 2016 WL 756523, at *4 (finding plaintiff’s class allegations insufficient under Iqbal where “Plaintiff alleges no facts to demonstrate or even suggest that any member of the putative class had similar work experiences. The Complaint does not allege any facts showing that Defendants had statewide policies or practices giving rise to Plaintiffs’ causes of action such that common questions of fact and/or law could provide class-wide answers and would be susceptible to class-wide proof.”). Case 8:16-cv-02011-CJC-DFM Document 10 Filed 11/14/16 Page 28 of 29 Page ID #:181 1 2 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 32809534.2 -20- NOTICE OF MOTION AND MOTION TO DISMISS This failure is particularly glaring in light of the numerous authorities concluding that individualized inquiries predominate in the absence of such a classwide policy or practice. See Brown v. Federal Express Corp., 249 F.R.D. 580, 585 (C.D. Cal. 2008) (holding that, when an employer’s duty is to provide but not ensure meal periods, individual issues necessarily predominate in claims for missed meal periods, thereby precluding class treatment of such claims); Kenny v. SuperCuts, Inc., 252 F.R.D. 641, 646 (N.D. Cal. 2008) (same); Washington v. Joe's Crab Shack, 271 F.R.D. 629, 642 (N.D. Cal. 2010) (finding claims for unpaid overtime, unpaid minimum wage, missed meal and rest breaks and related claims were not susceptible to class treatment in the absence of a “company-wide or class- wide policy” since the claims required an “individual assessment” of facts and “would not be susceptible to common proof”); Reed v. Cty. of Orange, 266 F.R.D. 446, 453 (C.D. Cal. 2010) (in absence of “a common policy, plan, or scheme of permitting or requiring uncompensated off-the-clock work,” such claims present a number of “inherently individualized inquir[ies]”). Since Plaintiffs have not alleged any facts that could overcome the need for such individualized inquiries, their class allegations are insufficient on their face and should be stricken even if their claims for individual relief somehow pass muster. V. CONCLUSION For all the foregoing reasons, this Court should dismiss all of the causes of action in the Complaint. DATED: November 14, 2016 MUNGER, TOLLES & OLSON LLP TERRY E. SANCHEZ KATHERINE M. FORSTER MARGARET G. MARASCHINO By: /S/ Katherine M. Forster KATHERINE M. FORSTER Attorneys for Defendant CARRINGTON MORTGAGE SERVICES, LLC Case 8:16-cv-02011-CJC-DFM Document 10 Filed 11/14/16 Page 29 of 29 Page ID #:182 1 2 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 DECLARATION OF TERRY E. SANCHEZ IN SUPPORT OF DEFENDANT’S MOTION TO DISMISS TERRY E. SANCHEZ (State Bar No. 101318) terry.sanchez@mto.com KATHERINE M. FORSTER (State Bar No. 217609) katherine.forster@mto.com MARGARET G. MARASCHINO (State Bar No. 267034) margaret.maraschino@mto.com MUNGER, TOLLES & OLSON LLP 355 South Grand Avenue Thirty-Fifth Floor Los Angeles, California 90071-1560 Telephone: (213) 683-9100 Facsimile: (213) 687-3702 Attorneys for Defendant CARRINGTON MORTGAGE SERVICES, LLC UNITED STATES DISTRICT COURT FOR THE CENTRAL DISTRICT OF CALIFORNIA SOUTHERN DIVISION CANDICE RITENOUR, individually, and on behalf of other members of the general public similarly situated; CHERYL WEISER, individually, and on behalf of other members of the general public similarly situated, Plaintiffs, vs. CARRINGTON MORTGAGE SERVICES, LLC, an unknown business entity; and DOES 1 through 100, inclusive, Defendant. Case No. 8:16-cv-02011-CJC-DFM DECLARATION OF TERRY E. SANCHEZ IN SUPPORT OF DEFENDANT’S MOTION TO DISMISS AND/OR MOTION TO STRIKE [Filed concurrently with Notice of Motion and Motion to Dismiss Plaintiffs’ Complaint Pursuant to F.R.C.P. 12(B)(6) and/or Strike Pursuant to 12(F); Memorandum of Points and Authorities In Support Thereof] Judge: Hon. Cormac Carney Date: December 12, 2016 Time: 1:30 p.m. Dept.: 9B Action Filed: 9/30/2016 Case 8:16-cv-02011-CJC-DFM Document 10-1 Filed 11/14/16 Page 1 of 2 Page ID #:183 Case 8:16-cv-02011-CJC-DFM Document 10-1 Filed 11/14/16 Page 2 of 2 Page ID #:184