Heck et al v. Heavenly Couture, Inc.

MOTION to Dismiss for Failure to State a Claim Upon Which Relief May be Granted, MOTION to Dismiss for Lack of Jurisdiction Dismiss for Lack of Subject Matter Jurisdiction

S.D. Cal.March 9, 2017

Case No. 17cv0168 1 DEFENDANT’S NOTICE OF MOTION TO DISMISS PLAINTIFFS’ COMPLAINT 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 Jared L. Bryan (SBN 220925) Michaelene H. Cody (SBN 265149) JACKSON LEWIS P.C. 200 Spectrum Center Drive, Suite 500 Irvine, California 92618 Telephone: (949) 885-1360 Facsimile: (949) 885-1380 Email: jared.bryan@jacksonlewis.com michaelene.cody@jacksonlewis.com Attorneys for Defendant HEAVENLY COUTURE, INC. UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF CALIFORNIA CARLY HECK, an individual; SARA LUND, an individual; and ALLY ORTANEZ, an individual, Plaintiffs, v. HEAVENLY COUTURE, INC., a California Corporation, Defendant. CASE NO. 3:17-cv-0168 CAB [NLS] [Class Action] DEFENDANT’S NOTICE OF MOTION TO DISMISS PLAINTIFFS’ COMPLAINT Hearing Date: April 13, 2017 Time: Not Applicable Location: Not Applicable PER CHAMBER RULES, NO ORAL ARGUMENT UNLESS SEPARATELY ORDERED BY THE COURT TO THE HONORABLE COURT AND TO PLAINTIFFS AND THEIR ATTORNEYS OF RECORD: PLEASE TAKE NOTICE that Defendant HEAVENLY COUTURE, INC. will, and hereby does, move this Court as follows: 1. For an order, pursuant to Federal Rule of Civil Procedure 12(b)(6), dismissing Plaintiffs’ first claim for violation of the Fair Labor Standards Act, for failure to state a claim upon which relief may be granted. / / / Case 3:17-cv-00168-CAB-NLS Document 10 Filed 03/09/17 PageID.39 Page 1 of 3 Case No. 17cv0168 2 DEFENDANT’S NOTICE OF MOTION TO DISMISS PLAINTIFFS’ COMPLAINT 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 2. For an order, pursuant to Federal Rule of Civil Procedure 12(b)(1), dismissing Plaintiffs’ state law claims (claims two through nine) for lack of subject matter jurisdiction. Defendant’s Motion is based on this Notice, the accompanying Memorandum of Points and Authorities, the documents and records in the Court’s file; such further arguments or evidence that may be presented at the hearing on this Motion, if a hearing is ordered; and any other matter the Court deems appropriate. PLEASE TAKE FURTHER NOTICE THAT, pursuant to applicable chamber rules, there shall be no oral argument unless separately ordered by the Court. The “hearing” date of April 13, 2017, referenced above, sets the briefing schedule for opposition and reply papers only. Dated: March 9, 2017 JACKSON LEWIS P.C. By: /s/ Michaelene H. Cody Jared L. Bryan Michaelene H. Cody Attorneys for Defendant HEAVENLY COUTURE, INC. Case 3:17-cv-00168-CAB-NLS Document 10 Filed 03/09/17 PageID.40 Page 2 of 3 CERTIFICATE OF SERVICE 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 CERTIFICATE OF SERVICE CASE NAME: HECK, et al. v. HEAVENLY COUTURE, INC. CASE NUMBER: 3:17-cv-0168 CAB [NLS] I am employed in the County of Orange, State of California. I am over the age of 18 and not a party to the within action; my business address is 200 Spectrum Center Drive, Suite 500, Irvine, California 92618. On March 9, 2017, I served the foregoing document described as DEFENDANT’S NOTICE OF MOTION TO DISMISS PLAINTIFFS’ COMPLAINT in this action as follows: Craig M. Nicholas Alex Tomasevic NICHOLAS & TOMASEVIC, LLP 225 Broadway, 19th Floor San Diego, CA 92101 Attorneys for Plaintiffs [X] BY MAIL: [X] As follows: I am "readily familiar" with the firm's practice of collection and processing correspondence for mailing. I placed the above-named document[s] in an envelope, addressed to the party[ies] listed above. Under that practice it would be deposited with U.S. postal service on that same day with postage thereon fully prepaid at Irvine, California in the ordinary course of business. 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. [X] BY NOTICE OF ELECTRONIC FILING. The above-listed counsel have consented to electronic service and have been automatically served by the Notice of Electronic Filing, which is automatically generated by CM/ECF at the time said document was filed, and which constitutes service pursuant to FRCP 5(b)(2)(E) and L.R. 5.4 (c)-(d) [X] FEDERAL: I declare that I am employed in the office of a member of the bar of this Court at whose direction the service was made. Executed on March 9, 2017, at Irvine, California. /s/ Stacy Boura Stacy Boura 4839-6898-3619, v. 2 Case 3:17-cv-00168-CAB-NLS Document 10 Filed 03/09/17 PageID.41 Page 3 of 3 Case No. 17cv0168 1 MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF MOTION TO DISMISS COMPLAINT 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 Jared L. Bryan (SBN 220925) Michaelene H. Cody (SBN 265149) JACKSON LEWIS P.C. 200 Spectrum Center Drive, Suite 500 Irvine, California 92618 Telephone: (949) 885-1360 Facsimile: (949) 885-1380 Email: jared.bryan@jacksonlewis.com michaelene.cody@jacksonlewis.com Attorneys for Defendant HEAVENLY COUTURE, INC. UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF CALIFORNIA CARLY HECK, an individual; SARA LUND, an individual; and ALLY ORTANEZ, an individual, Plaintiffs, v. HEAVENLY COUTURE, INC., a California Corporation, Defendant. CASE NO. 3:17-cv-0168 CAB [NLS] [Class Action] MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF DEFENDANT’S MOTION TO DISMISS PLAINTIFFS’ COMPLAINT Hearing Date: April 13, 2017 Time: Not Applicable Location: Not Applicable PER CHAMBER RULES, NO ORAL ARGUMENT UNLESS SEPARATELY ORDERED BY THE COURT TO THE HONORABLE COURT AND TO PLAINTIFFS AND THEIR ATTORNEYS OF RECORD: Defendant HEAVENLY COUTURE, INC. respectfully submits the following memorandum of points and authorities in support of its motion to dismiss the Complaint filed by Plaintiffs CARLY HECK, SARA LUND and ALLY ORTANEZ. / / / / / / / / / Case 3:17-cv-00168-CAB-NLS Document 10-1 Filed 03/09/17 PageID.42 Page 1 of 15 Case No. 17cv0168 2 MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF MOTION TO DISMISS COMPLAINT 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 I. SUMMARY OF WHY DEFENDANT’S MOTION SHOULD BE GRANTED ................................................................................................................ 5 II. LEGAL ARGUMENT............................................................................................... 6 A. The Court Should Dismiss Plaintiffs’ FLSA Claim for Failure to State a Claim Upon Which Relief Can Be Granted ................................................. 6 1. The Supreme Court and the Ninth Circuit Have Established the Standard for Plaintiffs’ Allegations in the Face of a 12(b)(6) Motion to Dismiss ................................................................................. 6 2. Plaintiffs Fail to Plead Sufficient Facts to Plausibly Give Rise to Any Claims For Uncompensated Off-The-Clock Work .................. 7 3. Plaintiffs Have Not Alleged Sufficient Facts to Support a Claim that Defendant Failed to Pay Them Overtime for Off-The-Clock Work ...................................................................................................... 8 B. The Court Should Dismiss Plaintiffs’ California Causes Of Action For Lack Of Subject Matter Jurisdiction. .............................................................. 9 1. Legal Standard Governing Subject Matter Jurisdiction ........................ 9 C. This Court Should Decline To Exercise Supplemental Jurisdiction Over Plaintiff’s California State Law Claims Because The Claims Do Not Derive From A Common Nucleus Of Operative Fact. .......................... 10 1. The Operative Facts of Plaintiffs’ State Law Claims Bear No Relation to Plaintiffs’ Single Fair Labor Standards Act Claim .......... 11 D. The Court Should Decline To Exercise Supplemental Jurisdiction Because Plaintiffs’ State Law Claims Substantially Predominate. ............... 12 III. CONCLUSION ........................................................................................................ 14 Case 3:17-cv-00168-CAB-NLS Document 10-1 Filed 03/09/17 PageID.43 Page 2 of 15 Case No. 17cv0168 3 MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF MOTION TO DISMISS COMPLAINT 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) Federal Cases Ashcroft v. Iqbal 556 U.S. 662 (2009) .................................................................................................... 7, 8 Augustine v. United States 704 F.2d 1074 (9th Cir. 1983) ........................................................................................ 9 Bender v. Williamsport Area Sch. Dist. 475 U.S. 534 (1986) ........................................................................................................ 9 Brown v. Dillard’s, Inc. 430 F.3d 1004 (9th Cir. 2005) ........................................................................................ 6 Chen-Cheng Wang ex rel. United States v. FMC Corp. 975 F.2d 1412 (9th Cir. 1992) ........................................................................................ 9 General Atomic Co. v. United Nuclear Corp. 655 F.2d 968 (9th Cir. 1981) .......................................................................................... 9 Highway Equip. Co. v. FECO, Ltd. 469 F.3d 1027 (Fed. Cir. 2006) .................................................................................... 10 Kokkonen v. Guardian Life Ins. Co. 511 U.S. 375 (1994) ........................................................................................................ 9 Landers v. Quality Communs., Inc. No. 12-15890, 2015 U.S. App. LEXIS 1290 (9th Cir. Nev. Jan. 26, 2015) ................... 7 Lyndonville Sav. Bank & Trust Co. v. Lussier 211 F.3d 697 (2d Cir. 2000) ......................................................................................... 10 Lyon v. Whisman 45 F.3d 758 (3d Cir. 1995) ..................................................................................... 10, 12 McCarthy v. United States 850 F.2d 558 (9th Cir. 1988) .......................................................................................... 9 Palmer v. Hosp. Auth. of Randolph Cty. 22 F.3d 1559 (11th Cir. 1994) ...................................................................................... 10 Case 3:17-cv-00168-CAB-NLS Document 10-1 Filed 03/09/17 PageID.44 Page 3 of 15 Case No. 17cv0168 4 MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF MOTION TO DISMISS COMPLAINT 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 Soliday v. Miami County, OH 55 F.3d 1158 (6th Cir. 1995) ........................................................................................ 10 Sovak v. Chugai Pharm. Co. 280 F.3d 1266 (9th Cir. 2002) ........................................................................................ 6 Thornhill Pub’g Co., Inc. v. General Tel. & Elecs. Corp. 594 F.2d 730 (9th Cir. 1979) .......................................................................................... 9 United Mine Workers of Am. v. Gibbs (1966) 383 U.S. 715 ................................................................................................ 10, 12 Weltman v. Ortho Mattress 2009 U.S. Dist. LEXIS 115178 (S.D. Cal. Dec. 10, 2009) .......................................... 13 White v. Lee 227 F.3d 1214 (9th Cir. Cal. 2000) ................................................................................. 9 Wiley v. Trendwest Resorts, Inc. 2005 U.S. Dist. LEXIS 35568 (N.D. Cal. May 3, 2005) .............................................. 11 Wong v. HSBC Mortg. Corp. (USA) 2009 U.S. Dist. LEXIS 10399 (N.D. Cal. Jan. 21, 2009) ................................. 11, 12, 13 Federal Statutes 28 U.S.C. § 1367(a) ........................................................................................................... 10 28 U.S.C. § 1367(c)(2) ....................................................................................................... 12 State Statutes California Business & Professions Code §17200 ................................................................ 6 Case 3:17-cv-00168-CAB-NLS Document 10-1 Filed 03/09/17 PageID.45 Page 4 of 15 Case No. 17cv0168 5 MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF MOTION TO DISMISS COMPLAINT 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 MEMORANDUM OF POINTS AND AUTHORITIES I. SUMMARY OF WHY DEFENDANT’S MOTION SHOULD BE GRANTED Plaintiffs Carly Heck, Sara Lund and Ally Ortanez contend that their employer, Heavenly Couture, Inc., failed to pay them for all hours worked, including overtime, and legally mandated meal and rest breaks. Plaintiffs bring this Action, asserting claims under both the federal Fair Labor Standards Act (“FLSA”) and California state law. Plaintiffs’ Complaint fails to sufficiently plead facts to support their claims for unpaid wages under the FLSA. Plaintiffs merely assert boilerplate and conclusory statements about being “forced” to “work uncompensated regular and overtime hours…” Plaintiffs make these assertions without ever alleging what “work” they allegedly performed without pay. Plaintiffs do not plead any facts showing that they actually performed any duties that can possibly be construed as compensable work activities during these alleged unpaid periods. To the contrary, Plaintiffs have carefully avoided alleging any facts regarding the nature or amount of any uncompensated “work” before or after their shifts or during meal periods. Likewise, Plaintiffs do not sufficiently allege any details on the amount(s) of time spent on this allegedly unpaid “work.” Because Plaintiffs have failed to plead facts sufficient showing that they actually performed compensable work before or after their shifts, or during meal periods, they fail to plausibly show an entitlement to relief for unpaid wages under the Fair Labor Standards Act. The Court also lacks supplemental jurisdiction over Plaintiffs’ state law claims because those claims do not arise from the same common nucleus of operative fact as Plaintiffs’ sole federal claim. Plaintiffs’ state law claims arise from a statutory framework that imposes on employers distinct obligations, separate from the federal Fair Labor Standards Act, which require separate factual inquiries. As a result, the federal and state claims are not so related that they constitute the same case or controversy. Furthermore, even if the Court properly could exercise supplemental jurisdiction over Plaintiffs’ state law claims, it should decline to do so here. The federal claim solely Case 3:17-cv-00168-CAB-NLS Document 10-1 Filed 03/09/17 PageID.46 Page 5 of 15 Case No. 17cv0168 6 MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF MOTION TO DISMISS COMPLAINT 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 involves whether Plaintiff was paid for all hours worked, including overtime pay based on a federal standard. The state law claims, however, implicate a wide range of issues arising exclusively under California law, including meal and rest periods, penalties for alleged wage statement violations, penalties for late payment of final wages, unfair business practices under California Business & Professions Code § 17200 and civil penalties under the California Private Attorneys General Act (“PAGA”). These state law claims are the crux of Plaintiffs’ Complaint and clearly will predominate over the single federal claim in this case. Thus, Defendant respectfully requests that the Court dismiss Plaintiffs’ first cause of action for violation of the Fair Labor Standards Act for failure to state a claim and dismiss Plaintiffs’ California claims (causes of action two through nine) for lack of jurisdiction.1 II. LEGAL ARGUMENT A. The Court Should Dismiss Plaintiffs’ FLSA Claim for Failure to State a Claim Upon Which Relief Can Be Granted 1. The Supreme Court and the Ninth Circuit Have Established the Standard for Plaintiffs’ Allegations in the Face of a 12(b)(6) Motion to Dismiss The Federal Rules of Civil Procedure provide that “a party may assert the following defenses by motion … (6) failure to state a claim upon which relief can be granted. Fed. R. Civ. P. 12(b)(6). A Rule 12(b) “must be made before pleading.” Fed. R. Civ. P. 12(b). A 12(b) motion effectively stays the defendant’s deadline to file a responsive pleading until after the court grants or denies the Motion. See Fed. R. Civ. P. 12(a)(4). 1 Plaintiffs signed arbitration agreements with a collective/class and representative action waiver at the start of their employment with Defendant. By filing this motion to dismiss, Defendant is not, of course, waiving its right to compel arbitration. See Sovak v. Chugai Pharm. Co., 280 F.3d 1266, 1270-71 (9th Cir. 2002) (rejecting argument that defendant waived right to arbitrate because plaintiff failed to show how he was prejudiced by defendant's filing of a motion to dismiss for failure to state a claim); Brown v. Dillard's, Inc., 430 F.3d 1004, 1012 (9th Cir. 2005) (noting that filing motion to dismiss does not waive right to move to compel arbitration). Case 3:17-cv-00168-CAB-NLS Document 10-1 Filed 03/09/17 PageID.47 Page 6 of 15 Case No. 17cv0168 7 MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF MOTION TO DISMISS COMPLAINT 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 In Ashcroft v. Iqbal 556 U.S. 662 (2009), the Supreme Court set forth a three-step process for courts to apply when considering a motion to dismiss for failure to state a claim. First, the court must identify the elements of the cause of action in light of interpreting case authority. Id. at 674. Second, the court should begin “by identifying pleadings that, because they are no more than conclusions, are not entitled to the assumption of truth.” Id. at 678. “While legal conclusions can provide the framework of a complaint, they must be supported by factual allegations.” Id. Third, the court must consider any remaining factual allegations to “determine whether they plausibly give rise to an entitlement of relief.” Id. at 679. Under Iqbal, “a pleading that offers labels and conclusions or a formulaic recitation of the elements of a cause of action will not do. Nor does a complaint, if it tenders naked assertions devoid of further factual enhancement.” Id. at 678 (internal citations omitted). “Where a complaint pleads facts that are merely consistent with a defendant’s liability, it stops short of the line between possibility and plausibility of entitlement to relief.” Id. (internal citations omitted). “[W]here the well- pleaded facts do not permit the court to infer more than the ‘mere possibility of misconduct,’ the complaint has alleged - but it has not ‘shown’ that the pleader is entitled to relief.” Id. at 679 (quoting Fed. R. Civ. P. 8(a)(2)). In Landers v. Quality Communs., Inc., No. 12-15890, 2015 U.S. App. LEXIS 1290 (9th Cir. Nev. Jan. 26, 2015), the Ninth Circuit Court of Appeals interpreted the requirements of Iqbal in a FLSA “off the clock” overtime case. In Landers, the court determined that the plaintiff “merely alleged that [he was] not paid for overtime hours worked more than forty hours in a given week…and although these allegations ‘raise the possibility’ of undercompensation in violation of the FLSA, a possibility is not the same as plausibility.” Id. at *20. 2. Plaintiffs Fail to Plead Sufficient Facts to Plausibly Give Rise to Any Claims For Uncompensated Off-The-Clock Work Plaintiffs’ claims for alleged off-the-clock work fails to satisfy the pleading requirements set forth in Iqbal. “The tenet that the court must accept as true all of the Case 3:17-cv-00168-CAB-NLS Document 10-1 Filed 03/09/17 PageID.48 Page 7 of 15 Case No. 17cv0168 8 MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF MOTION TO DISMISS COMPLAINT 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 allegations contained in a complaint is inapplicable to legal conclusions.” Ashcroft v. Iqbal, 556 U.S. 662, 678-679 (2007). Plaintiffs’ Complaint makes the following conclusory allegations related to their FLSA claim: “Defendant unlawfully forced Plaintiffs to work uncompensated regular and overtime hours, cheating Plaintiffs out of premium pay for regular and overtime pay.” (Complaint, ¶4.) “At times, Defendant required Plaintiffs to work more than eight hours in each day, sometimes requiring that Plaintiffs work more than twelve hours in a day. Additionally, Defendant required Plaintiffs to work more than forty hours per week. Defendants did not adequately compensate Plaintiffs for overtime hours worked, as required under the FLSA or California law.” (Complaint, ¶16.) “Defendant knowingly, willfully, and intentionally failed to compensate Plaintiffs and the COLLECTIVE ACTION GROUP all wages due and owed under the FLSA, including agreed-upon wages and the applicable minimum hourly wage, as mandated by 29 U.S.C. § 206(a), and for overtime hours, as mandated by 29 U.S.C. § 207(a), 29 C.F.R. § 778.223, and 29 C.F.R. § 778.315.” (Complaint, ¶34.) Plaintiffs wholly fail to allege any specific facts regarding which plaintiff supposedly worked off-the-clock, on what occasions and for how long. Plaintiffs’ Complaint is void of any specificity whatsoever regarding their unpaid or underpaid compensation claims. In fact, the entire Complaint consists of allegations concluding that Defendant failed to pay Plaintiffs for all hours worked. However, Iqbal stands for the proposition that merely pleading conclusions is insufficient to state a claim. Accordingly, Plaintiffs’ conclusions that Defendant has failed to pay them for work performed in excess of forty hours per week or for work performed off-the-clock should be ignored for purposes of the Court’s analysis of whether Plaintiffs have stated facts sufficient to state a claim for relief can be granted. 3. Plaintiffs Have Not Alleged Sufficient Facts to Support a Claim that Defendant Failed to Pay Them Overtime for Off-The-Clock Work After eliminating the conclusions required by Iqbal, the third step is for the court to determine whether there are allegations of specific facts that “plausibly give rise to an entitlement of relief” by satisfying the elements of the cause of action identified in the first step. Here, Plaintiffs appear to seek pay for time they allegedly spent working “off Case 3:17-cv-00168-CAB-NLS Document 10-1 Filed 03/09/17 PageID.49 Page 8 of 15 Case No. 17cv0168 9 MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF MOTION TO DISMISS COMPLAINT 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 the clock.” Plaintiffs do not, however, allege any specific facts that plausibly entitle them to relief for unpaid, off the clock work and thus cannot survive a motion to dismiss. B. The Court Should Dismiss Plaintiffs’ California Causes Of Action For Lack Of Subject Matter Jurisdiction. 1. Legal Standard Governing Subject Matter Jurisdiction Federal courts are courts of limited jurisdiction, possessing only that power granted by Article III of the Constitution and by Congress. Bender v. Williamsport Area Sch. Dist., 475 U.S. 534, 541 (1986). Thus, federal courts have no power to decide cases outside their subject matter jurisdiction. Chen-Cheng Wang ex rel. United States v. FMC Corp., 975 F.2d 1412, 1415 (9th Cir. 1992). If the Court determines that it lacks subject matter jurisdiction, it must dismiss the case. Augustine v. United States, 704 F.2d 1074, 1077 (9th Cir. 1983). Under Federal Rule of Civil Procedure 12(b)(1), a party may move to dismiss an action for lack of subject matter jurisdiction. If, when considering the complaint as a whole, the Court does not find evidence of subject matter jurisdiction “facially” or “factually,” it must dismiss the action. Thornhill Pub’g Co., Inc. v. General Tel. & Elecs. Corp., 594 F.2d 730, 733 (9th Cir. 1979). The party asserting jurisdiction bears the burden of proof. See Kokkonen v. Guardian Life Ins. Co., 511 U.S. 375, 377 (1994). When considering a challenge to subject matter jurisdiction, the court need not presume the truth of the plaintiff’s allegations. White v. Lee, 227 F.3d 1214 (9th Cir. Cal. 2000). Rather, the Court presumes it lacks jurisdiction unless that presumption is rebutted by affirmative evidence that jurisdiction exists. General Atomic Co. v. United Nuclear Corp., 655 F.2d 968, 968- 69 (9th Cir. 1981). In deciding the motion, the Court may consider any extrinsic evidence beyond the pleadings bearing on its subject matter jurisdiction. McCarthy v. United States, 850 F.2d 558, 560 (9th Cir. 1988). / / / / / / / / / Case 3:17-cv-00168-CAB-NLS Document 10-1 Filed 03/09/17 PageID.50 Page 9 of 15 Case No. 17cv0168 10 MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF MOTION TO DISMISS COMPLAINT 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 C. This Court Should Decline To Exercise Supplemental Jurisdiction Over Plaintiff’s California State Law Claims Because The Claims Do Not Derive From A Common Nucleus Of Operative Fact. When deciding whether exercise supplemental jurisdiction, three elements must be satisfied: “(1) the federal claim must have substance sufficient confer subject matter jurisdiction on the court; (2) the state and federal claims must derive from a common nucleus of operative facts; and (3) the claims must be such that they would ordinarily be expected to be tried in one judicial proceeding.” United Mine Workers of Am. v. Gibbs 383 U.S. 715, 725 (1966). Supplemental jurisdiction exists only if the plaintiff’s state law claims “are so related to claims in the action within such original jurisdiction that they form part of the same case or controversy under Article III of the United States Constitution.” 28 U.S.C. § 1367(a). “For this relatedness requirement to be satisfied, ‘[t]he state and federal claims must derive from a common nucleus of operative fact’ such that they would ordinarily be expected to be tried in one proceeding.” Highway Equip. Co. v. FECO, Ltd., 469 F.3d 1027, 1038 (Fed. Cir. 2006) (quoting United Mine Workers of Am. v. Gibbs, 383 U.S. 715, 725 (1966)). Accordingly, where a state law claim is “distinct and separable,” supplemental jurisdiction does not exist. Soliday v. Miami County, OH, 55 F.3d 1158, 1165 (6th Cir. 1995). Supplemental jurisdiction does not exist where the only link between the federal and state law claims is the “general employer-employee relationship between the parties.” Lyon v. Whisman, 45 F.3d 758, 761 (3d Cir. 1995). Rather, the claims must arise from a common nucleus of operative fact involving “the same witnesses, presentation of the same evidence, and determination of the same, or very similar, facts.” Palmer v. Hosp. Auth. of Randolph Cty., 22 F.3d 1559, 1563-64 (11th Cir. 1994); see also Lyndonville Sav. Bank & Trust Co. v. Lussier, 211 F.3d 697, 704 (2d Cir. 2000) (a sufficient relationship will be found if “the facts underlying the federal and state claims substantially overlap[] . . . or where presentation of the federal claim necessarily b[rings] the facts underlying the state claim before the court”). / / / Case 3:17-cv-00168-CAB-NLS Document 10-1 Filed 03/09/17 PageID.51 Page 10 of 15 Case No. 17cv0168 11 MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF MOTION TO DISMISS COMPLAINT 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 Plaintiffs’ state law claims and federal claim do not arise from a common nucleus of operative fact. Rather, the state law claims depend on a more distinct and broader set of facts, as set forth below. 1. The Operative Facts of Plaintiffs’ State Law Claims Bear No Relation to Plaintiffs’ Single Fair Labor Standards Act Claim In hybrid wage and hour cases like this one, courts have found supplemental jurisdiction lacking where state law claims concern factual issues that do not relate to the essential facts of the federal overtime claim. For example, in Wong v. HSBC Mortg. Corp. (USA), 2009 U.S. Dist. LEXIS 10399 (N.D. Cal. Jan. 21, 2009), the plaintiff asserted a Fair Labor Standards Act (“FLSA”) overtime claim and state law claims for meal and rest breaks, and unlawful deductions from pay. The Wong court concluded that the claims pled did not relate sufficiently to give rise to supplemental jurisdiction. The court observed that the meal break claim would “require resolution of numerous legal and factual issues not presented by the FLSA claim,” such as the meaning of the term “provide” under the California Labor Code and whether breaks were “provided” under that standard. Id. at *9. Beyond those issues, the meal break claim would also require the court to determine whether the breaks were as long as required under the statute, and whether the employer could assert a good faith defense. Id. The connection between the federal claim and the state claims is similarly lacking here. The only connection between Plaintiffs’ FLSA claim and their state law claims is that both arise from Plaintiffs’ employment with Defendant. It is not enough, however, that Plaintiffs federal claim and state law claims arise from the employment relationship, or even that they are based on wage and hour issues; rather, there must be a relationship between the claims based on a common nucleus of operative fact. See Wiley v. Trendwest Resorts, Inc., 2005 U.S. Dist. LEXIS 35568 at *12 (N.D. Cal. May 3, 2005) (declining to exercise supplemental jurisdiction over state law claims for unpaid wages, unjust enrichment, failure to reimburse expenses and waiting time penalties because, even if all claims relate to plaintiffs’ wages, such a “loose” factual nexus is insufficient). Case 3:17-cv-00168-CAB-NLS Document 10-1 Filed 03/09/17 PageID.52 Page 11 of 15 Case No. 17cv0168 12 MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF MOTION TO DISMISS COMPLAINT 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 The relevant inquiry is not whether the claims involve some similar factual basis, but whether the state and federal claims are alternative theories of recovery for the same acts. Lyons v. Whisman, 45 F.3d 758, 761 (1995). There is no such relation between Plaintiffs’ federal and state law claims here. Although Plaintiffs’ claims are all related to Plaintiffs’ wages, this is insufficient to satisfy the requirements for supplemental jurisdiction. Plaintiffs’ state law claims arise from a statutory framework that imposes on employers distinct obligations separate from the federal Fair Labor Standards Act which requires separate factual inquiries. A majority of Plaintiffs’ claims center on specific statutory requirements under California law, such as meal and rest breaks, meal and rest break premiums, waiting time penalties and wage statement violations, all of which require detailed analysis of facts germane only to California law. As a result, and as supported by recent case law, the federal and state claims are not so related that they constitute the same case or controversy, such that the exercise of supplemental jurisdiction would be improper. D. The Court Should Decline To Exercise Supplemental Jurisdiction Because Plaintiffs’ State Law Claims Substantially Predominate. Even if the Court had supplemental discretion here, it would be inappropriate to exercise it in this case because of the oversized role the state law claims will play in this case. Where state law claims will “substantially predominate . . . in terms of proof, of the scope of the issues raised, or of the comprehensiveness of the remedy sought,” it is appropriate for the Court to decline supplemental jurisdiction. United Mine Workers of Am., 383 U.S. at 726; see also 28 U.S.C. § 1367(c)(2) (court may decline supplemental jurisdiction if it “would substantially expand the scope of [the] case beyond that necessary and relevant to the federal claims”). In similar circumstances, other district courts have declined supplemental jurisdiction where state law claims were predominant. See Wong, 2009 U.S. Dist. LEXIS at * 10 (court held that plaintiff’s state law claims substantially predominate over plaintiffs’ FLSA claim where the employees alleged that the employers violated the Case 3:17-cv-00168-CAB-NLS Document 10-1 Filed 03/09/17 PageID.53 Page 12 of 15 Case No. 17cv0168 13 MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF MOTION TO DISMISS COMPLAINT 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 FLSA and wage and hour laws of three different states: California, New York, and New Jersey); see also Weltman v. Ortho Mattress, 2009 U.S. Dist. LEXIS 115178 (S.D. Cal. Dec. 10, 2009) (court declined to exercise supplemental jurisdiction over plaintiff’s eight California state law class claims because the state law claims substantially predominate over plaintiff’s individual FLSA claim). Here, Plaintiffs’ state law claims substantially predominate over their single FLSA claim. Plaintiffs’ federal claim is limited to whether Plaintiffs were paid for all hours worked, including overtime, under the federal FLSA standard. The state law claims, however, are substantially broader. Resolving the state law claims expands the scope of the case beyond whether Plaintiffs were paid for all hours worked and delves into questions regarding whether Defendant provided meal and rest breaks and proper itemized wage statements, whether employees are owed waiting time penalties and whether Defendant obtained an unfair advantage in the marketplace by violating California-specific laws. Thus, the California claims will substantially predominate over the single FLSA claim, in terms of both the scope of the factual issues and the evidence required to prove them. Moreover, the remedies available under the California claims are far broader than the remedies available under the FLSA. For example, state law claims provide for penalties under the California Labor Code including premiums for meal and rest periods not provided, wage statement penalties, waiting-time penalties and penalties under PAGA, none of which are available under the FLSA. For the same reasons that exist here, the court in Wong concluded that the plaintiffs’ ten state law claims substantially predominated over their FLSA claim. As the Wong court so aptly put it, “if said state law claims remain joined with the federal claim herein, the ‘federal tail’ will wag what is in substance a state dog.’” Wong, supra, 2009 U.S. Dist. LEXIS at *3. As did the court in Wong, this Court should decline to exercise supplemental jurisdiction over Plaintiffs’ eight state law claims, which substantially predominate over Plaintiffs’ single federal claim. / / / Case 3:17-cv-00168-CAB-NLS Document 10-1 Filed 03/09/17 PageID.54 Page 13 of 15 Case No. 17cv0168 14 MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF MOTION TO DISMISS COMPLAINT 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 III. CONCLUSION For the reasons set forth above, the Court should dismiss Plaintiffs’ FLSA claim for failure to state a claim upon which relief can be granted. The Court also should dismiss Plaintiffs’ state-law claims for lack of subject matter jurisdiction. Dated: March 9, 2017 JACKSON LEWIS P.C. By: /s/ Michaelene H. Cody Jared L. Bryan Michaelene H. Cody Attorneys for Defendant HEAVENLY COUTURE, INC. Case 3:17-cv-00168-CAB-NLS Document 10-1 Filed 03/09/17 PageID.55 Page 14 of 15 CERTIFICATE OF SERVICE 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 CERTIFICATE OF SERVICE CASE NAME: HECK, et al. v. HEAVENLY COUTURE, INC. CASE NUMBER: 3:17-cv-0168 CAB [NLS] I am employed in the County of Orange, State of California. I am over the age of 18 and not a party to the within action; my business address is 200 Spectrum Center Drive, Suite 500, Irvine, California 92618. On March 9, 2017, I served the foregoing document described as: MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF DEFENDANT’S MOTION TO DISMISS PLAINTIFFS’ COMPLAINT in this action as follows: Craig M. Nicholas Alex Tomasevic NICHOLAS & TOMASEVIC, LLP 225 Broadway, 19th Floor San Diego, CA 92101 Attorneys for Plaintiffs [X] BY MAIL: [X] As follows: I am "readily familiar" with the firm's practice of collection and processing correspondence for mailing. I placed the above-named document[s] in an envelope, addressed to the party[ies] listed above. Under that practice it would be deposited with U.S. postal service on that same day with postage thereon fully prepaid at Irvine, California in the ordinary course of business. 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. [X] BY NOTICE OF ELECTRONIC FILING. The above-listed counsel have consented to electronic service and have been automatically served by the Notice of Electronic Filing, which is automatically generated by CM/ECF at the time said document was filed, and which constitutes service pursuant to FRCP 5(b)(2)(E) and L.R. 5.4 (c)-(d) [X] FEDERAL: I declare that I am employed in the office of a member of the bar of this Court at whose direction the service was made. Executed on March 9, 2017, at Irvine, California. /s/ Stacy Boura Stacy Boura 4849-3889-1587, v. 6 Case 3:17-cv-00168-CAB-NLS Document 10-1 Filed 03/09/17 PageID.56 Page 15 of 15