Horton v. Neostrata Company Inc. et al

MOTION to Dismiss for Failure to State a Claim or, Alternatively, To Strike Portions of Plaintiffs' Third Amended Complaint

S.D. Cal.April 13, 2017

Firm:43196412v1 Defendant NeoStrata Company, Inc.’s Notice of Motion to Dismiss or Strike Portions of Plaintiffs’ TAC - Case No. 3:16-cv-02189-AJB-JLB 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 Michael S. Kun (State Bar No. 208684) Kevin D. Sullivan (State Bar No. 270343) EPSTEIN BECKER & GREEN, P.C. 1925 Century Park East, Suite 500 Los Angeles, CA 90067 Telephone: 310.556.8861 Facsimile: 310.553.2165 mkun@ebglaw.com ksullivan@ebglaw.com Attorneys for Defendant NEOSTRATA COMPANY, INC. UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF CALIFORNIA CANDLE HORTON, individually, and on behalf of herself and others similarly situated, Plaintiff, vs. NEOSTRATA COMPANY INC., a Delaware corporation; 24 SEVEN INC., a New York corporation; 24 SEVEN EMPLOYMENT INC., a New York corporation; 24 SEVEN STAFFING INC., a California corporation; 24 SEVEN TALENT CALIFORNIA, INC., a California corporation; 24 SEVEN RECRUITING, INC. a California corporation; 24 SEVEN CREATIVE SOLUTIONS, an unknown entity; CELESTE GUDAS, an individual; and DOES 1 through 50 inclusive, Defendants. Case No.: 3:16-cv-02189-AJB-JLB DEFENDANT NEOSTRATA COMPANY, INC.’S NOTICE OF MOTION AND MOTION TO DISMISS PLAINTIFFS’ THIRD AMENDED COMPLAINT OR, ALTERNATIVELY, TO STRIKE PORTIONS THEREOF [Fed. Civ. P. 12(b)(6), 12(f)] DATE: June 22, 2017 TIME: 2:00 p.m. CTRM: 4A JUDGE: Hon. Anthony J. Battaglia Case 3:16-cv-02189-AJB-JLB Document 54 Filed 04/13/17 PageID.1565 Page 1 of 8 - 2 - Firm:43196412v1 Defendant NeoStrata Company, Inc.’s Notice of Motion to Dismiss or Strike Portions of Plaintiffs’ TAC - Case No. 3:16-cv-02189-AJB-JLB 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 TO THE COURT, PLAINTIFF, AND HIS COUNSEL OF RECORD: PLEASE TAKE NOTICE that at 2:00 p.m. on June 22, 2017, or as soon thereafter as the matter may be heard before the Honorable Anthony J. Battaglia in Courtroom 4A of the United States District Court, Southern District of California, located at 221 West Broadway, San Diego, California 92101, Defendant NeoStrata Company, Inc. (“NeoStrata”) will and hereby does move to dismiss Plaintiffs Candle Horton, Kimberlee Winston, and Jeanette Zdanek’s (collectively, “Plaintiffs”) Third Amended Complaint (“TAC”) pursuant to Fed. R. Civ. P. 12(b)(6). Alternatively, NeoStrata moves to strike portions of Plaintiffs’ TAC pursuant to Fed. R. Civ. P. 12(f). NeoStrata moves to dismiss Plaintiffs’ TAC on the grounds that Plaintiffs have failed to allege sufficient facts to support her claims or to otherwise satisfy the basic pleading requirements set forth in Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007) (“a plaintiffs obligation to provide the ‘grounds’ of [his] ‘entitlement to relief’ requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do”), and Ashcroft v. Iqbal, 556 U.S. 662, 664 (2009) (non-conclusory allegations must “plausibly give rise to an entitlement too relief”). Alternatively, NeoStrata moves to strike portions of Plaintiffs’ TAC as they are immaterial and/or irrelevant to Plaintiffs’ claims. The following incorporating paragraph in Plaintiff’s waiting time penalty cause of action should be stricken because it incorporates alleged meal and rest period violations, which are improper bases for alleged wage statement violations: Page 47, line 11 (“Plaintiffs re-allege and incorporate by reference the foregoing allegations as though set forth herein.”). The following references to Labor Code sections 223 and 225.5 should be stricken because Plaintiffs have failed to state facts that NeoStrata “secretly” failed to pay them wages: Page 44, line 7 (“223, 225.5”); page 44, lines 17 - 20 Case 3:16-cv-02189-AJB-JLB Document 54 Filed 04/13/17 PageID.1566 Page 2 of 8 - 3 - Firm:43196412v1 Defendant NeoStrata Company, Inc.’s Notice of Motion to Dismiss or Strike Portions of Plaintiffs’ TAC - Case No. 3:16-cv-02189-AJB-JLB 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 (“Pursuant to Labor Code § 223, “Where any statute or contract requires an employer to maintain the designated wage scale, it shall be unlawful to secretly pay a lower wage scale while purporting to pay the wage designated by statute or by contract.”); page 57, line 4 (“223, 225.5”); page 59, line 9 (“223, 225.5”); and page 62, line 23 (“223, 225.5”). The following incorporating paragraph in Plaintiff’s cause of action under the Unfair Competition Law (“UCL”) should be stricken because it incorporates alleged meal and rest period violations, the remedies for which are not restitutionary and thus not recoverable under the UCL: Page 59, lines 27-28 (“Plaintiffs re-allege and incorporate by reference the foregoing allegations as though set forth herein.”). The following references to putative classes and subclasses should be stricken because Plaintiffs have impermissibly defined the putative classes and subclasses she seeks to represent: Page 2, line 3 (“all others similarly situated individuals”); page 2, line 4 (“‘putative Class Members’”); page 2, line 23 (“i.e., putative Class Members”); page 2, lines 26-27 (“literally hundreds of single mothers, students, and similarly situated people”); page 3, lines 17-18 (“all putative Class Members”); page 6, line 23 (“and Class Members”); page 6, line 24 (“and Class Members’”); page 7, line 1 (“and Class Members”); page 7, lines 6-7 (“and Class Members”); page 7, line 27 (“and other Class Members”); page 10, line 6 (“the putative Class”); page 10, line 7 (“the putative Class period”); page 10, line 28 (“and other Class Members’ labor”); page 11, line 19 (“and Class Members”); page 11, line 23 (“and Class Members”); page 12, line 4 (“and putative Class Members”); page 12, line 7 (“and putative Class Members”); page 12, line 12 (“and Class Members”); page 12, line 16 (“and Class Members”); page 12, line 20 (“and Class Members”); page 13, line 11 (“and Class Members”); page 13, lines 11-12 (“and Class Members”); page 13, line 16 (“and Class Members”); page 13, line 18 (“and Class Members”); page 13, line 22 (“and Class Members”); Case 3:16-cv-02189-AJB-JLB Document 54 Filed 04/13/17 PageID.1567 Page 3 of 8 - 4 - Firm:43196412v1 Defendant NeoStrata Company, Inc.’s Notice of Motion to Dismiss or Strike Portions of Plaintiffs’ TAC - Case No. 3:16-cv-02189-AJB-JLB 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 page 13, lines 27-28 (“and Class Members”); page 14, lines 5-6 (“and Class Members”); page 14, line 10 (“and Class Members”); page 14, lines 12-13 (“and Class Members”); page 14, lines 13-14 (“and Class Members”); page 14, line 15 (“and Class Members”); page 14, line 20 (“and Class Members”); page 14, line 22 (“and Class Members”); page 14, line 25 (“and Class Members”); page 15, line 1 (“and Class Members”); page 15, line 5 (“and Class Members”); page 15, line 9 (“and Class Members”); page 15, lines 12-13 (“and Class Members”); page 15, lines 16-17 (“and Class Members”); page 15, line 18 (“and Class Members”); page 15, lines 21-22 (“and Class Members”); page 15, line 24 (“and Class Members”); page 15, line 25 (“and Class Members”); page 15, line 27 (“and Class Members”); page 16, line 3 (“and Class Members”); page 16, line 5 (“and Class Members”); page 16, lines 6-7 (“and Class Members”); page 16, lines 8-9 (“and Class Members”); page 16, line 13 (“and Class Members”); page 16, lines 14-15 (“and putative Class Members”); page 16, line 17 (“and putative Class Members”); page 16, line 19 (“and putative Class Members”); page 16, line 21 (“Throughout the proposed Class Period”); page 16, line 26 (“and putative Class Members”); page 17, line 1 (“and putative Class Members”); page 17, line 7 (“and putative Class Members”); page 17, line 9 (“and putative Class Members”); page 17, line 12 (“and putative Class Members”); page 17, line 13 (“and putative Class Members”); page 17, line 18 (“and putative Class Members”); page 17, lines 19- 20 (“and putative Class Members”); page 17, line 21 (“and Class Members’”); page 17, line 24 (“and putative Class Members”); page 17, line 25 (“and Class Members”); page 18, line 2 (“and Class Members”); page 18, line 4 (“and Class Members”); page 18, line 6 (“and Class Members”); page 18, lines 10-11 (“and Class Members”); page 20, line 3 (“the putative Class”); page 20, line 24 (“and the Class”); page 20, line 27 (“and the putative Class”); page 21, line 16 (“the putative Class”); page 22, line 11 (“and putative Class Members”); page 22, lines 13-14 (“and putative Class Members”); page 22, line 19 (“Putative Class Members”); Case 3:16-cv-02189-AJB-JLB Document 54 Filed 04/13/17 PageID.1568 Page 4 of 8 - 5 - Firm:43196412v1 Defendant NeoStrata Company, Inc.’s Notice of Motion to Dismiss or Strike Portions of Plaintiffs’ TAC - Case No. 3:16-cv-02189-AJB-JLB 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 page 22, line 23 (“and putative Class Members”); page 22, line 26 (“and Class Members”); page 22, line 27 (“and Class Members’”); page 23, line 2 (“and Class Members”); page 23, line 5 (“and Class Members”); page 23, line 8 (“/Class Members”); page 23, line 13 (“/Class Members”); page 23, line 22 (“/Class Members”); page 24, line 1 (“and the putative Class”); page 24, line 2 (“and the putative Class”); page 26, line 20 (“and the putative Class”); page 27, lines 24-25 (“and putative Class Members”); page 27, line 27 (“and putative Class Members”); page 28, line 1 (“and putative Class Members”); page 28, line 8 (“and putative Class Members”); page 28, line 14 (“the Class”); page 29, lines 1-2 (“and Class Members’”); page 29, line 4 (“and proposed Class Members”); page 29, line 8 (“and Class Members”); page 29, lines 15-16 (“and proposed Class Members”); page 29, line 17 (“and Class Members”); page 29, line 24 (“and putative Class Members”); page 29, line 27 (“and putative Class Members’”); page 29, line 28 to page 30, line 1 (“and putative Class Members”); page 30, line 3 (“and putative Class Members’”); page 30, line 23 (“and putative Class Members”); page 30, line 26 (“and putative Class Members”); page 31, line 1 (“and putative Class Members”); page 31, line 5 (“and putative Class Members”); page 33, line 1 (“/Class Members”); page 36, line 20 (“CLASS ACTION ALLEGATIONS”); ¶¶ 209-228; page 42, line 16 (“and the putative Class”); page 42, line 17 (“and the putative Class”); page 43, lines 4-5 (“and the putative Class”); page 43, line 11 (“and the putative Class”); page 43, lines 22-23 (“and all other members of the Class”); page 43, lines 25-26 (“and similarly situated members of the Class”); page 43, line 28 (“and the Class”); page 44, line 25 (“and the Class members’”); page 45, line 11 (“and the Putative Class”); ¶ 250; page 46, lines 19-20 (“and Class Members”); page 46, line 22 (“Class Members including”); page 46, line 27 (“Class Members including”); page 47, line 2 (“and the Class”); page 47, line 28 (“and the Class”); page 48, lines 8-9 (“and the Class”); page 49, line 11 (“and the Class”); page 49, line 15 (“and Class Members”); page 50, line 6 (“and the Case 3:16-cv-02189-AJB-JLB Document 54 Filed 04/13/17 PageID.1569 Page 5 of 8 - 6 - Firm:43196412v1 Defendant NeoStrata Company, Inc.’s Notice of Motion to Dismiss or Strike Portions of Plaintiffs’ TAC - Case No. 3:16-cv-02189-AJB-JLB 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 Class”); page 50, line 16 (“and the putative Class”); page 50, line 22 (“and the Class”); page 51, line 11 (“and Class Members”); page 51, lines 13-14 (“and Class Members”); page 51, lines 15-16 (“and Class Members”); page 51, line 18 (“and Class Members”); page 51, line 51 (“and the putative Class”); page 52, lines 3-4 (“and to the putative Class”); ¶ 294; page 53, lines 7-8 (“and the Class”); page 54, line 7 (“and the Class”); page 54, line 11 (“and the Class”); page 54, line 27 (“and the Class”); page 55, line 16 (“and the Class Members”); page 55, line 20 (“and Class Members”); page 55, line 23 (“and Class Members”); page 55, line 25 (“and Class Members”); page 56, line 3 (“and Class Members”); page 56, lines 7- 8 (“and Class Members”); page 58, line 16 (“and the putative Class”); page 60, line 11 (“the Class and”); page 60, line 16 (“the Class and”); page 60, line 23 (“and the Putative Class”); page 61, line 11 (“and the Class”); page 61, line 13 (“and the Class”); page 61, line 20 (“An order that this action may proceed and be maintained as a class action”); page 61, line 21 (“For appointment of the Plaintiffs as the representative of the Class”); page 61, line 22 (“For appointment of counsel for Plaintiffs as Class Counsel”); page 61, line 25 (“and/or the Class”); page 62, line 1 (“and/or the Class”); page 62, line 5 (“and/or the Class”); page 62, line 8 (“and/or the Class”); page 62, lines 13-14 (“and/or the Class”); and page 63, line 9 (“and/or the Class”). The following references to groups of purportedly aggrieved employees should be stricken because Plaintiffs have impermissibly defined the purported aggrieved employees she seeks to represent: Page 2, lines 2-3 (“and acting for the interest of other current and former employees (‘Represented Employees’)”); page 2, line 7 (“and representative action”); page 3, line 17 (“Represented Employees”); page 10, line 6 (“and Represented Employees”); page 20, lines 3-4 (“and Represented Employees”); page 21, line 17 (“and Represented Employees”); page 22, lines 19-20 (“and Represented Employees”); page 22, line 21 (“and similarly aggrieved employees”); page 24, line 7 (“and other aggrieved Case 3:16-cv-02189-AJB-JLB Document 54 Filed 04/13/17 PageID.1570 Page 6 of 8 - 7 - Firm:43196412v1 Defendant NeoStrata Company, Inc.’s Notice of Motion to Dismiss or Strike Portions of Plaintiffs’ TAC - Case No. 3:16-cv-02189-AJB-JLB 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 employees”); page 28, lines 14-15 (“and Represented Employees”); page 31, line 18 (“or Represented Employees”); page 32, line 9 (“and similarly aggrieved employees”); page 33, line 4 (“REPRESENTATIVE ACTION (PAGA) CLAIMS”); ¶¶ 195-203; ¶ 208; page 42, line 3 (“and Representative Claim”); ¶¶ 232-233; page 43, line 4 (“the Represented Employees”); page 43, lines 10-11 (“the Represented Employees”); ¶ 236; page 44, line 5 (“and Representative Claim”); page 45, lines 10-11 (“the Represented Employees”); ¶¶ 252-255; page 47, line 6 (“and Representative Claim”); ¶¶ 269-272; page 51, line 2 (“and Representative Claim”); ¶ 289; page 51, lines 27-28 (“the Represented Employees”); page 52, line 6 (“and Representative Claim”); ¶¶ 296-299; page 57, line 2 (“and Representative Claim”); ¶¶ 321-322; page 58, lines 7-8 (“and therefore is properly suited to represent the interests of other current and former Represented Employees”); page 58, lines 15-16 (“the Represented Employees”); page 59, line 22 (“and Representative Claim”); page 59, lines 18-19 (“and other current and former Represented Employees”); page 60, lines 22-23 (“the Represented Employees”); page 61, lines 25-26 (“and/or Represented Employees”); page 62, line 2 (“and/or Represented Employees”); page 62, line 5 (“and/or Represented Employees”); page 62, lines 8-9 (“and/or Represented Employees”); page 62, line 14 (“and/or Represented Employees”); page 63, line 9 (“and/or Represented Employees”); and page 63, lines 4 - 5 (“representative PAGA claims including the payment of wages as set forth in Labor Code § 558”). / / / Case 3:16-cv-02189-AJB-JLB Document 54 Filed 04/13/17 PageID.1571 Page 7 of 8 - 8 - Firm:43196412v1 Defendant NeoStrata Company, Inc.’s Notice of Motion to Dismiss or Strike Portions of Plaintiffs’ TAC - Case No. 3:16-cv-02189-AJB-JLB 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 This motion is based upon this notice of motion, the accompanying memorandum of points and authorities, all pleadings on file in this action, and on such further written or oral argument as may be permitted by this Court. DATED: April 13, 2017 By: EPSTEIN BECKER & GREEN, P.C. /s/ Michael S. Kun Michael S. Kun Kevin D. Sullivan Attorneys for Defendant NEOSTRATA COMPANY, INC. Case 3:16-cv-02189-AJB-JLB Document 54 Filed 04/13/17 PageID.1572 Page 8 of 8 -1- Firm:43284217v1 Memorandum in Support of Defendant NeoStrata Company, Inc.’s Motion to Dismiss or Strike Plaintiffs’ TAC - Case No. 3:16-cv-02189-AJB-JLB 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 Michael S. Kun (State Bar No. 208684) Kevin D. Sullivan (State Bar No. 270343) EPSTEIN BECKER & GREEN, P.C. 1925 Century Park East, Suite 500 Los Angeles, CA 90067 Telephone: 310.556.8861 Facsimile: 310.553.2165 mkun@ebglaw.com ksullivan@ebglaw.com Attorneys for Defendant NEOSTRATA COMPANY, INC. UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF CALIFORNIA CANDLE HORTON, individually, and on behalf of herself and others similarly situated; Plaintiff, vs. NEOSTRATA COMPANY INC., a Delaware corporation; 24 SEVEN INC., a New York corporation; 24 SEVEN EMPLOYMENT INC., a New York corporation; 24 SEVEN STAFFING INC., a California corporation; 24 SEVEN TALENT CALIFORNIA, INC., a California corporation; 24 SEVEN RECRUITING, INC. a California corporation; 24 SEVEN CREATIVE SOLUTIONS, an unknown entity; CELESTE GUDAS, an individual; and DOES 1 through 50 inclusive, Defendants. Case No.: 3:16-cv-02189-AJB-JLB MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF DEFENDANT NEOSTRATA COMPANY, INC.’S MOTION TO DISMISS PLAINTIFFS’ THIRD AMENDED COMPLAINT OR STRIKE PORTIONS THEREOF [Fed. Civ. P. 12(b)(6) and 12(f)] DATE: June 22, 2017 TIME: 2:00 p.m. CTRM: 4A JUDGE: Hon. Anthony J. Battaglia Case 3:16-cv-02189-AJB-JLB Document 54-1 Filed 04/13/17 PageID.1573 Page 1 of 30 -2- Firm:43284217v1 Memorandum in Support of Defendant NeoStrata Company, Inc.’s Motion to Dismiss or Strike Plaintiffs’ TAC - Case No. 3:16-cv-02189-AJB-JLB 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(s) I. INTRODUCTION ........................................................................................... 8 II. STATEMENT OF FACTS ............................................................................ 10 A. Rather Than Have Her Original Complaint Dismissed, Horton Filed Her First Amended Complaint. ................................................. 10 B. The Court Granted NeoStrata’s Motion To Dismiss The First Amended Complaint. .......................................................................... 10 C. The Court Granted NeoStrata’s Motion To Dismiss The Second Amended Complaint. .......................................................................... 10 1. The Court Dismissed With Prejudice Plaintiffs’ Theories Of Agency, Joint-Venture, Alter-Ego, And Integrated- Enterprise Liability. .................................................................. 10 2. The Court Dismissed Plaintiffs’ SAC Because They Again Improperly Lumped Together NeoStrata And The 24 Seven Defendants Without Distinguishing The Allegedly Unlawful Conduct Of Each. .................................... 10 3. The Court Did Not Consider NeoStrata’s Motion To Strike The Improper Class, Subclass, And Representative Action Definitions Because The Court Dismissed Plaintiffs’ SAC.......................................................................... 11 D. Without Leave To Do So, Plaintiffs Have Now Added Meal And Rest Period Claims In Their Third Amended Complaint. .......... 11 E. Even Though Meal And Rest Period Claims Do Not Concern The Payment Of Wages, Plaintiffs Have Sought To Bring Such Claims Under A Labor Code Section 2810.3 Theory Of Liability. .............................................................................................. 12 F. Winston And Horton Have Failed To Allege Facts Showing That NeoStrata Denied Them A Meal Period. .................................... 12 G. Plaintiffs Have Failed To Identify A Single Instance Where NeoStrata Denied Them A Rest Period. ............................................. 13 H. Even Though Alleged Meal And Rest Period Violations Do Not Concern The Payment Of Wages, Plaintiffs Have Sought To Use Them As A Basis For Their Claim For Failure To Pay All Wages Due Upon Termination. .......................................................... 13 I. Even Though The Remedy For Alleged Meal And Rest Period Violations Is Not Restitutionary, Plaintiffs Have Sought To Use Such Alleged Violations As A Basis For Their UCL Claim. ............. 13 Case 3:16-cv-02189-AJB-JLB Document 54-1 Filed 04/13/17 PageID.1574 Page 2 of 30 - 3 - Firm:43284217v1 Memorandum in Support of Defendant NeoStrata Company, Inc.’s Motion to Dismiss or Strike Plaintiff’s FAC - Case No. 3:16-cv-02189-AJB-JLB 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 J. Plaintiffs Have Brought Claims Under Labor Code Sections 223 And 225.5 For “Secretly” Failing To Pay Wages But Have Alleged No Facts To Support Such Claims. ....................................... 14 K. Plaintiffs Still Have Defined Their Proposed Class And Representative Actions Using Unascertainable, Fail-Safe Definitions. .......................................................................................... 14 III. ARGUMENT ................................................................................................ 16 A. The Legal Standard Under Fed. R. Civ. P. 12(b)(6). .......................... 16 B. Plaintiffs Did Not Have Leave To Add Meal Or Rest Period Claims. ................................................................................................ 16 C. Even If The Court Were To Permit Plaintiffs To Add Meal And Rest Period Claims Without Leave Of Court, These Claims Still May Not Proceed. ............................................................................... 18 1. Plaintiffs Cannot Use Labor Code Section 2810.3 To Support Meal And Rest Period Claims Against NeoStrata Because Such Claims Are Not Brought For The Nonpayment Of Wages ............................................................ 18 2. Plaintiffs Have Failed To Allege Facts Supporting A Meal Period Claim Against NeoStrata. .................................... 19 3. Plaintiffs Have Failed To Identify A Single Day When NeoStrata Allegedly Prevented Them From Taking A Rest Period. ............................................................................... 21 D. Plaintiffs Cannot Bring A Claim For Waiting Time Penalties Based Upon Alleged Meal And Rest Violations. ............................... 22 E. References To Labor Code Sections 223 And 225.5 Should Be Stricken Because Plaintiffs Have Failed To Allege Facts That NeoStrata “Secretly” Paid Lower Wages While Purporting To Pay The Wages Designated. ............................................................... 23 F. References To Alleged Meal And Rest Period Violations Should Be Stricken From Plaintiffs’ UCL Claim Because Meal And Rest Period Premiums Do Not Constitute Restitution Recoverable Under The UCL. ............................................................ 24 G. The Court Should Dismiss Or Strike Plaintiffs’ Class And PAGA Claims Because Their Proposed Class, Subclass, And Representative Action Definitions Still Are Not Readily Ascertainable Or Constitute Impermissible “Fail-Safe” Definitions. .......................................................................................... 27 1. Plaintiffs Have Once Again Defined Their Proposed Class And Subclasses Using An Unascertainable Definition. ................................................................................. 27 2. Plaintiffs Have Defined Their PAGA Representative Action Using Unascertainable, Fail-Safe Definitions. ............. 29 Case 3:16-cv-02189-AJB-JLB Document 54-1 Filed 04/13/17 PageID.1575 Page 3 of 30 - 4 - Firm:43284217v1 Memorandum in Support of Defendant NeoStrata Company, Inc.’s Motion to Dismiss or Strike Plaintiff’s FAC - Case No. 3:16-cv-02189-AJB-JLB 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 IV. CONCLUSION ............................................................................................. 30 Case 3:16-cv-02189-AJB-JLB Document 54-1 Filed 04/13/17 PageID.1576 Page 4 of 30 -5- Firm:43284217v1 Memorandum in Support of Defendant NeoStrata Company, Inc.’s Motion to Dismiss or Strike Plaintiffs’ TAC - Case No. 3:16-cv-02189-AJB-JLB 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) ........................................................................................... 16 Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007) ........................................................................................... 16 Davis v. Macey, 2013 U.S. Dist. LEXIS 27421 (N.D. Ind. Feb. 28, 2013) .................................. 17 Earnest v. General Motors Corp., 923 F. Supp. 1469 (N.D. Ala. 1996) .................................................................. 27 Ferdik v. Bonzelet, 963 F.2d 1258 (9th Cir. 1992) ...................................................................... 29, 30 Freeney v. Bank of Am. Corp., 2015 U.S. Dist. LEXIS 92848 (C.D. Cal. July 16, 2015) .................................. 19 Guerrero v. Halliburton Energy Servs., 2017 U.S. Dist. LEXIS 15738 (E.D. Cal. Feb. 2, 2017) .................................... 26 Hovsepian v. Apple, Inc., 2009 WL 5069144 (N.D. Cal. Dec. 17, 2009) ................................................... 28 Johnson v. Hewlett-Packard Co., 809 F. Supp. 2d 1114 (N.D. Cal. 2011) ............................................................. 23 Jones v. Spherion Staffing LLC, 2012 U.S. Dist. LEXIS 112396 (C.D. Cal. Aug 7, 2012) ............................ 24, 25 Kamar v. RadioShack Corp., 375 Fed. App’x 734 (9th Cir. 2010) ................................................................... 29 Landers v. Quality Commc’ns, Inc., 771 F.3d 638 (9th Cir. 2014) .............................................................................. 21 Case 3:16-cv-02189-AJB-JLB Document 54-1 Filed 04/13/17 PageID.1577 Page 5 of 30 - 6 - Firm:43284217v1 Memorandum in Support of Defendant NeoStrata Company, Inc.’s Motion to Dismiss or Strike Plaintiff’s FAC - Case No. 3:16-cv-02189-AJB-JLB 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 Mantolete v. Bolger, 767 F.2d 1416 (9th Cir. 1985) ............................................................................ 28 Parson v. Golden State FC, LLC, 2016 U.S. Dist. LEXIS 58299 (N.D. Cal. May 2, 2016) ............................. 25, 26 Ritenour v. Carrington Mortg. Servs. LLC, 2017 U.S. Dist. LEXIS 1747 (C.D. Cal. Jan. 5, 2017) ....................................... 21 Shann v. Durham School Services, L.P., 182 F. Supp. 3d 1044, 1048 (C.D. Cal. 2016) .................................................... 21 Singletary v. Teavana Corp., 2014 U.S. Dist. LEXIS 62073 (N.D. Cal. Apr. 2, 2014) ............................. 19, 25 Starr v. Baca, 652 F.3d 1202 (9th Cir. 2011) ............................................................................ 16 Vietnam Veterans of Am. v. C.I.A., 288 F.R.D. 192 (N.D. Cal. 2012) ....................................................................... 27 Whiteway v. FedEx Kinko’s Office and Print Services, Inc., 2006 WL 2642528 (N.D. Cal. Sept. 14, 2006) ................................................... 27 California Cases Kirby v. Immoos Fire Protection, Inc., 53 Cal. 4th 1244 (2012) ............................................................................... passim Korea Supply Co. v. Lockheed Martin Corp., 29 Cal. 4th 1134 (2003) ...................................................................................... 24 Krantz v. BT Visual Images, LLC, 89 Cal. App. 4th 164 (2001) ............................................................................... 24 Ling v. P.F. Chang’s China Bistro, Inc., 245 Cal. App. 4th 1242 (2016) ............................................................... 19, 22, 25 Noe v. Superior Court, 237 Cal. App. 4th 316 (2015) ....................................................................... 19, 20 Pineda v. Bank of America, N.A., 50 Cal. 4th 1389 ................................................................................................. 26 Case 3:16-cv-02189-AJB-JLB Document 54-1 Filed 04/13/17 PageID.1578 Page 6 of 30 - 7 - Firm:43284217v1 Memorandum in Support of Defendant NeoStrata Company, Inc.’s Motion to Dismiss or Strike Plaintiff’s FAC - Case No. 3:16-cv-02189-AJB-JLB 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 Federal Statutes Federal Rules of Civil Procedure ............................................................................ 20 Rule 8 .................................................................................. 12, 13, 20, 2112(b)(6) 16 Rule 15 ................................................................................................................ 10 Rule 15(a)(2)................................................................................................. 16, 17 Rule 20 ................................................................................................................ 17 FLSA ........................................................................................................................ 21 California Statutes California Labor Code § 203 ..................................................................................................... 8, 9, 22, 25 § 203(a) ............................................................................................................... 26 § 223 ......................................................................................................... 9, 14, 23 § 225.5 ...................................................................................................... 9, 14, 23 § 226.7 ......................................................................................................... passim § 2810.3 ....................................................................................................... passim § 2810.3(b)(1) ......................................................................................... 12, 18, 19 Other State Statutes Private Attorneys General Act .......................................................................... passim Unfair Competition Law ................................................................................... passim Other Authorities Alba Conte & Herbert B. Newberg, Newberg on Class Actions (4th ed. 2002) § 3:3 .................................................................................................... 27 Case 3:16-cv-02189-AJB-JLB Document 54-1 Filed 04/13/17 PageID.1579 Page 7 of 30 -8- Firm:43284217v1 Memorandum in Support of Defendant NeoStrata Company, Inc.’s Motion to Dismiss or Strike Plaintiffs’ TAC - Case No. 3:16-cv-02189-AJB-JLB 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 I. INTRODUCTION Plaintiffs Candle Horton (“Horton”), Kimberlee Winston (“Winston”), and Jeanette Zdanek’s (“Zdanek”) (collectively, “Plaintiffs”) have filed a Third Amended Complaint (“TAC”). For the reasons discussed below, it must be dismissed or, alternatively, portions of it should be stricken. First, without leave of Court permitting them to do so, Plaintiffs have added meal and rest period claims to this case. Because they failed to obtain leave to add these new causes of action, Plaintiffs’ meal and rest period claims should be dismissed and references to them should be stricken from Plaintiffs’ derivative claims. Second, even if the Court were to allow Plaintiffs to add meal and rest period claims, they still fail to comply with basic pleading requirements. Horton and Winston have failed to allege that NeoStrata Company, Inc. (“NeoStrata”) - as opposed to 24Seven defendants - was the cause of their alleged meal period violations, again failing to comply with Fed. R. Civ. P. 8’s requirement that a pleading give party fair notice of its alleged wrongdoing. Similarly, Plaintiffs again have failed to comply with the Ninth Circuit’s pleading requirements for wage-hour actions by failing to identify a single day when they suffered a rest period violation. Third, Plaintiffs have brought these new meal and rest period claims under a Labor Code section 2810.3 theory of liability. But meal and rest period claims do not concern the payment of wages. Accordingly, this theory of liability should be stricken. Fourth, by improperly adding meal and rest period claims, Plaintiffs have also improperly added such claims as bases to support their causes of action for waiting time penalties under Labor Code section 203 and restitution under the Unfair Competition Law (“UCL”). Because alleged meal and rest period Case 3:16-cv-02189-AJB-JLB Document 54-1 Filed 04/13/17 PageID.1580 Page 8 of 30 - 9 - Firm:43284217v1 Memorandum in Support of Defendant NeoStrata Company, Inc.’s Motion to Dismiss or Strike Plaintiff’s FAC - Case No. 3:16-cv-02189-AJB-JLB 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 violations cannot support a section 203 claim or a UCL claim, references to such meal and rest period claims should be stricken therefrom. Fifth, Plaintiffs have also brought wage claims under the theory that NeoStrata “secretly” underpaid wages to them in violation of Labor Code sections 223 and 225.5. However, they have failed to allege any facts that would plausibly suggest NeoStrata “secretly” failed to them pay wages. Accordingly, references to sections 223 and 225.5 should be stricken. Sixth, as they did in the Complaint, First Amended Complaint (“FAC”), and Second Amended Complaint (“SAC”), Plaintiffs have again failed to set forth an ascertainable putative class definition in their TAC. By defining the putative class and subclasses such that they would represent non-exempt employees who worked for NeoStrata but were issues paystubs by 24Seven, Plaintiffs have proposed class and subclass definitions by which individualized analyses must be conducted in order to ascertain who would be in the class (and who would not) because an individual would qualify for membership only if he or she were jointly employed by NeoStrata and the 24 Seven Defendants. Finally, the Private Attorneys General Act (“PAGA”) representative action definitions that Plaintiffs have once again proffered suffer from the same defect as in the prior pleadings - they are impermissible fail-safe definitions in that Plaintiffs seek to represent only individuals who suffered a wage-hour violation, excluding those who did not. Plaintiffs’ PAGA definitions also suffer from the same ascertainability defect as their putative class and subclass definitions explained above. Because Plaintiffs remain unable to allege permissible class and representative action definitions, their class and PAGA claims should be dismissed. Alternatively, their class and PAGA representative allegations should be stricken. Case 3:16-cv-02189-AJB-JLB Document 54-1 Filed 04/13/17 PageID.1581 Page 9 of 30 - 10 - Firm:43284217v1 Memorandum in Support of Defendant NeoStrata Company, Inc.’s Motion to Dismiss or Strike Plaintiff’s FAC - Case No. 3:16-cv-02189-AJB-JLB 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 II. STATEMENT OF FACTS A. Rather Than Have Her Original Complaint Dismissed, Horton Filed Her First Amended Complaint. After this action was removed to this Court, NeoStrata moved to dismiss Horton’s original Complaint. (Doc. No. 8.) Rather than oppose that motion, Horton filed a FAC as a matter of right under Fed. R. Civ. P. 15. (Doc. No. 15.) Because the FAC was deficient, NeoStrata again moved to dismiss. (Doc. No. 19.) B. The Court Granted NeoStrata’s Motion To Dismiss The First Amended Complaint. On November 22, 2016, the Court granted NeoStrata’s motion to dismiss Horton’s FAC. (Doc. No. 30.) Thereafter, on December 12, 2016, Horton filed her SAC, adding Winston and Zdanek without leave to do so. (Doc. No. 36.) C. The Court Granted NeoStrata’s Motion To Dismiss The Second Amended Complaint. On March 8, 2017, the Court granted NeoStrata’s motion to dismiss Plaintiffs’ SAC. (Doc. No. 46.) As described below, the Court’s detailed order specifically addressed the multiple grounds on which Plaintiffs had failed to state a cause of action. 1. The Court Dismissed With Prejudice Plaintiffs’ Theories Of Agency, Joint-Venture, Alter-Ego, And Integrated- Enterprise Liability. In granting NeoStrata’s motion to dismiss the SAC, the Court ordered that “Plaintiffs’ claims for liability under alter ego, agency, joint venture, and integrated enterprise are DISMISSED WITH PREJUDICE.” (Doc. No. 46 at 11:24-25.) 2. The Court Dismissed Plaintiffs’ SAC Because They Again Improperly Lumped Together NeoStrata And The 24 Seven Defendants Without Distinguishing The Allegedly Unlawful Conduct Of Each. In dismissing Plaintiffs’ SAC, the Court once again “agree[d] with Defendant NeoStrata that Plaintiffs may not group it with the other 24 Seven Case 3:16-cv-02189-AJB-JLB Document 54-1 Filed 04/13/17 PageID.1582 Page 10 of 30 - 11 - Firm:43284217v1 Memorandum in Support of Defendant NeoStrata Company, Inc.’s Motion to Dismiss or Strike Plaintiff’s FAC - Case No. 3:16-cv-02189-AJB-JLB 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 Defendants given that . . . Plaintiffs have failed to establish a joint theory of liability.” (Doc. No. 46 at 11:8-10.) As a result, the Court held as follows: Again, the Court reiterates that the purpose of Federal Rule of Civil Procedure 8, and its requirements that allegations be pled with sufficient specificity, is to put the opposing party on notice of the wrong they allegedly committed so that they can adequately defend themselves. Fed. R. Civ. P. 8; see Gauvin v. Trombatore, 682 F. Supp. 1067, 1071 (N.D. Cal. 1988) (lumping together of multiple defendants in one broad allegation fails to satisfy notice requirement of Rule 8(a)(2)). Accordingly, Plaintiffs’ group pleading is still impermissible. (Id. at 11:10-16.) 3. The Court Did Not Consider NeoStrata’s Motion To Strike The Improper Class, Subclass, And Representative Action Definitions Because The Court Dismissed Plaintiffs’ SAC. NeoStrata had also moved to strike Plaintiffs’ Horton’s deficient class, subclass, and representative action definitions from her SAC because they were not readily ascertainable and were improper, fail-safe definitions. (Doc. No. 38-1 at 21:4-25:3.) However, “[b]ecause the Court [found] that Plaintiff’s [Second Amended] Complaint should be dismissed in its entirety, the Court [did] not [need to] entertain Defendant NeoStrata’s motion to strike.” (Doc. No. 46 at 12:1-2.) D. Without Leave To Do So, Plaintiffs Have Now Added Meal And Rest Period Claims In Their Third Amended Complaint. In the original Complaint, the FAC, and the SAC, there was not a single allegation of a meal period or rest period violation. (Doc. Nos. 1-1, 15, 36.) In their TAC, however, Plaintiffs have now added these two claims. (Doc. No. 46 at ¶¶ 172-178, 285-291.) They never sought leave of Court to add these two new claims. (See Doc. Nos. 1-46.) Nor did the Court grant Plaintiffs leave to do so. (See Doc. No. 30.) Case 3:16-cv-02189-AJB-JLB Document 54-1 Filed 04/13/17 PageID.1583 Page 11 of 30 - 12 - Firm:43284217v1 Memorandum in Support of Defendant NeoStrata Company, Inc.’s Motion to Dismiss or Strike Plaintiff’s FAC - Case No. 3:16-cv-02189-AJB-JLB 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 E. Even Though Meal And Rest Period Claims Do Not Concern The Payment Of Wages, Plaintiffs Have Sought To Bring Such Claims Under A Labor Code Section 2810.3 Theory Of Liability. As explained below, meal and rest period claims do not concern the payment of wages for purposes of Labor Code section 2810.3 liability. Nevertheless, to support their meal and rest period claims in their fifth cause of action, Plaintiffs have alleged that “NEOSTRATA is specifically liable to the Plaintiff, the Represented Employees, and the Putative Class for the “[non- ]payment of wages” pursuant to Labor Code § 2810.3(b)(1) . . . . (Doc. No. 49 at ¶ 290 (brackets in original).) As explained below, this theory of liability should be stricken. F. Winston And Horton Have Failed To Allege Facts Showing That NeoStrata Denied Them A Meal Period. To support her new meal period claim, Winston has alleged that “on March 17, 2016 and March 26, 2016[ she] had just enough travel time allocated to her to allow her to report to the next assignments, which precluded her from taking an uninterrupted 30-minute meal break. (Doc. No. 49 at ¶ 175.) However, she has failed to allege which defendant - NeoStrata or one of the 24Seven defendants - imposed such a purportedly strict assignment schedule that she could not take a meal period. (See id.) Similarly, Horton has alleged that “on November 19, 2015 and December 18, 2015, her records show she worked six continuous hours, but Defendants NEOSTRATA and/or 24 SEVEN never provided her a meal break or paid her premium pay for missing the meal.” (Doc. No. 49 at ¶ 176.) As explained below, Horton has again failed to put NeoStrata on notice of the wrong it allegedly committed because merely asserting that it was “NEOSTRATA and/or 24 SEVEN [that] never provided her a meal break” does not comply with Fed. R. Civ. P. 8. Case 3:16-cv-02189-AJB-JLB Document 54-1 Filed 04/13/17 PageID.1584 Page 12 of 30 - 13 - Firm:43284217v1 Memorandum in Support of Defendant NeoStrata Company, Inc.’s Motion to Dismiss or Strike Plaintiff’s FAC - Case No. 3:16-cv-02189-AJB-JLB 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 G. Plaintiffs Have Failed To Identify A Single Instance Where NeoStrata Denied Them A Rest Period. To support their new rest period claim, Plaintiffs have alleged that “Defendants required Plaintiffs and putative Class Members to be available by phone for calls or texts or have email access and to keep such devices on - even during rest periods - and to remain vigilant and responsive to calls or emails when needs arose during working hours.” (Doc. No. 49 at ¶ 177 (emphasis added).) Not only have Plaintiffs have failed to allege which defendant purportedly required Plaintiffs to remain on call during rest periods, but they have not identified a single day where this occurred such that they were not duty-free during their rest periods. (See id.) H. Even Though Alleged Meal And Rest Period Violations Do Not Concern The Payment Of Wages, Plaintiffs Have Sought To Use Them As A Basis For Their Claim For Failure To Pay All Wages Due Upon Termination. In paragraph 260 of their third cause of action for waiting time penalties, Plaintiffs “re-allege and incorporate by reference the foregoing allegations as though set forth herein.” The “foregoing allegations” include multiple allegations regarding alleged meal and rest period violations. (Doc. No. 49 at ¶¶ 172-180.) However, as explained below, meal and rest period violations cannot support a claim for waiting time penalties. Thus, such references should be stricken. I. Even Though The Remedy For Alleged Meal And Rest Period Violations Is Not Restitutionary, Plaintiffs Have Sought To Use Such Alleged Violations As A Basis For Their UCL Claim. In paragraph 332 of their third cause of action for waiting time penalties, Plaintiffs “re-allege and incorporate by reference the foregoing allegations as though set forth herein.” The “foregoing allegations” include multiple allegations regarding alleged meal and rest period violations. (Doc. No. 49 at ¶¶ 172-180, 285-291.) Plaintiffs have further alleged that NeoStrata committed UCL violations by “failing to pay the Class and Plaintiffs all wages due and owing Case 3:16-cv-02189-AJB-JLB Document 54-1 Filed 04/13/17 PageID.1585 Page 13 of 30 - 14 - Firm:43284217v1 Memorandum in Support of Defendant NeoStrata Company, Inc.’s Motion to Dismiss or Strike Plaintiff’s FAC - Case No. 3:16-cv-02189-AJB-JLB 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 including . . . meal break premiums in violation of state law.” (Id. at ¶ 334(b).) However, as explained below, the remedy for alleged meal and rest period violations is not restitutionary, and because recovery under the UCL is limited to restitution, alleged meal and rest period violations cannot support a UCL claim. Thus, such references should be stricken. J. Plaintiffs Have Brought Claims Under Labor Code Sections 223 And 225.5 For “Secretly” Failing To Pay Wages But Have Alleged No Facts To Support Such Claims. To support their second cause of action for unpaid wages, Plaintiffs have cited Labor Code section 223, which provides the following: “Where any statute or contract requires an employer to maintain the designated wage scale, it shall be unlawful to secretly pay a lower wage scale while purporting to pay the wage designated by statute or by contract.” (Doc. No. 49 at ¶ 243 (emphasis added).) But Plaintiffs have failed to allege any facts to plausibly show that NeoStrata secretly paid lower wages than designated by statute or contract. As explained below, the references to section 223 should be stricken as a result. Based on the alleged violation of Labor Code section 223, Plaintiffs seek penalties under section 225.5. (Doc. No. 49 at 44:7, 57:4, 59:9.) However, because they have failed to plead a claim under section 223, they cannot seek penalties under section 225.5. K. Plaintiffs Still Have Defined Their Proposed Class And Representative Actions Using Unascertainable, Fail-Safe Definitions. In its motions to dismiss the original Complaint, the FAC, and the SAC, NeoStrata addressed the deficiencies in the proposed class definitions. (Doc. No. 8-1 at 22:17-25:17; Doc. No. 19-1 at 19:4-21:11; Doc. No. 38-1 at 21:4-23:12.) In their TAC, Plaintiffs have defined their proposed “Class No. 2” as follows: All current or former nonexempt employees who worked in the state of California from July 20, 2012 to the Case 3:16-cv-02189-AJB-JLB Document 54-1 Filed 04/13/17 PageID.1586 Page 14 of 30 - 15 - Firm:43284217v1 Memorandum in Support of Defendant NeoStrata Company, Inc.’s Motion to Dismiss or Strike Plaintiff’s FAC - Case No. 3:16-cv-02189-AJB-JLB 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 present for Defendant NEOSTRATA as Freelance Beauty Advisors, Field Sales Representatives, or jobs with similar titles and who were issued paystubs from 24 Seven Inc. or 24 SEVEN LLC. (Dkt. No. 49 at ¶ 210 (emphasis added).) By defining the class such that they would only represent employees who worked for NeoStrata but were issued paystubs by 24Seven, Plaintiffs have proposed a class definition by which individualized analyses must be conducted in order to ascertain who would be in the class (and who would not), as discussed below. Plaintiffs have also continued to define their proposed UCL subclass as employees who “worked for Defendant NEOSTRATA . . . and who seek restitution . . . .” (Dkt. No. 49 at 39:4-7 (emphasis added).) Not only does that proposed subclass suffer from the same ascertainability defects, but, by seeking to represent only those individuals who seek restitution, they do not seek to represent those who do not seek such restitution. Plaintiffs have defined one of their putative representative action groups under PAGA - referred to as “Group IV” in the TAC - as follows: All employees working as nonexempt Freelance Beauty Advisors, Field Sales Representatives, or jobs with similar titles employed by or have been employed by Defendant NEOSTRATA in the State of California from July 20, 2015 to the present who should have received all their wages as required by California law. (Doc. No. 49 at 34:1-7 (emphasis added).) Plaintiffs have similarly defined their Group V representative action as follows: All nonexempt persons employed by or have been employed by Defendant NEOSTRATA in the State of California as nonexempt Freelance Beauty Advisors, Field Sales Representatives, or jobs with similar titles from July 20, 2015 to the present who are entitled to PAGA penalties and related remedies for Defendant NEOSTRATA’s violations of the California Labor Code. Case 3:16-cv-02189-AJB-JLB Document 54-1 Filed 04/13/17 PageID.1587 Page 15 of 30 - 16 - Firm:43284217v1 Memorandum in Support of Defendant NeoStrata Company, Inc.’s Motion to Dismiss or Strike Plaintiff’s FAC - Case No. 3:16-cv-02189-AJB-JLB 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 (Id. at 34:8-15 (emphasis added).) As explained below, not only are these fail-safe definitions, but they are also not readily ascertainable. III. ARGUMENT A. The Legal Standard Under Fed. R. Civ. P. 12(b)(6). As the Supreme Court explained in Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007), a complaint must allege “more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do.” Id. at 555. The Court subsequently explained in Ashcroft v. Iqbal, 556 U.S. 662 (2009), that a complaint is not sufficient if it merely “tenders naked assertions devoid of further factual enhancement;” it requires more than “unadorned, the-defendant- unlawfully-harmed-me accusation[s].” Id. at 678 (citations omitted). Rather, “a complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’” Id. (citing Twombly, 550 U.S. at 570). Facts that are “‘merely consistent with’ a defendant’s liability” fall far short of a plausible entitlement to relief. Id. (citing Twombly, 550 U.S. at 557). The Ninth Circuit has clarified that the allegations in a complaint must contain factual allegations that, when taken as true, “plausibly suggest an entitlement to relief, such that it is not unfair to require the opposing party to be subjected to the expense of discovery and continued litigation.” Starr v. Baca, 652 F.3d 1202, 1216 (9th Cir. 2011) (emphasis added). B. Plaintiffs Did Not Have Leave To Add Meal Or Rest Period Claims. Because Plaintiffs already amended their complaint once as a matter of right, Fed. R. Civ. P. 15(a)(2) mandates that Plaintiffs “may amend [their] pleading only with the opposing party’s written consent or the court’s leave.” Moreover, the Court’s March 8, 2017 Order permitting leave to file a TAC was narrow, providing that “Plaintiffs may file a third amended complaint curing the deficiencies [in this order].” (Doc. No. 46 at 12:2-3, emphasis added.) Of course, Case 3:16-cv-02189-AJB-JLB Document 54-1 Filed 04/13/17 PageID.1588 Page 16 of 30 - 17 - Firm:43284217v1 Memorandum in Support of Defendant NeoStrata Company, Inc.’s Motion to Dismiss or Strike Plaintiff’s FAC - Case No. 3:16-cv-02189-AJB-JLB 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 Court’s Order did not discuss any alleged deficiency with meal or rest period claims because Plaintiffs had never alleged a meal or rest period claim until their TAC. (See Doc. Nos. 1-1, 15, 36, 46.) Perhaps Plaintiffs thought that because the Court permitted them leave to add two new Plaintiffs and a theory of liability under Labor Code section 2810.3 without the Court expressly granting them leave to do so, they would have license to add any new claims they wanted. The Court’s Order, however, provides no basis for them to add meal or rest period claims. In its Order permitting leave to amend, the Court held that “Plaintiffs may file a third amended complaint curing the deficiencies herein.” (Doc. No. 46 at 12:2-3.) Nowhere in the Court’s Order did it address meal or rest periods. (Doc. No. 46.) Nonetheless, Plaintiffs added these meal and rest period claims without stipulation or leave of Court, violating Rule 15(a)(2). In its Order, the Court specifically “note[d] that the addition of the two new Plaintiffs is also consistent with Federal Rules of Civil Procedure 20. Additionally, the Court also considers Plaintiffs’ additional labor code theory to be an attempt to cure a deficiency in the FAC.” (Doc. No. 46 at 6:27-28.) But adding meal and rest period claims in Plaintiffs’ TAC cannot be consistent with Fed. R. Civ. P. 20 because Rule 20 involves parties, not claims. And the new meal and rest period claims cannot be construed as an attempt to cure a deficiency identified in the Order regarding Plaintiffs’ SAC because neither the Order nor the SAC mentions meal or rest period claims. Plaintiffs disregarded the Court’s order and added meal and rest period claims without leave of Court. For this reason, Plaintiffs’ meal and rest period claims should be dismissed. See, e.g., Davis v. Macey, 2013 U.S. Dist. LEXIS 27421, at *5 (N.D. Ind. Feb. 28, 2013) (granting motion to dismiss where “the time for Plaintiff to amend her pleading as a matter of course ha[d] expired and Defendants ha[d] not given consent to an amendment containing claims or Case 3:16-cv-02189-AJB-JLB Document 54-1 Filed 04/13/17 PageID.1589 Page 17 of 30 - 18 - Firm:43284217v1 Memorandum in Support of Defendant NeoStrata Company, Inc.’s Motion to Dismiss or Strike Plaintiff’s FAC - Case No. 3:16-cv-02189-AJB-JLB 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 other than those allowed by the Court in its Order [dismissing portions of Plaintiff’s first amended complaint]. Accordingly, Plaintiff must [have sought] leave of Court to amend her Complaint to add any new claims or allegations other than the claim . . . for which the Court granted leave to add.”). C. Even If The Court Were To Permit Plaintiffs To Add Meal And Rest Period Claims Without Leave Of Court, These Claims Still May Not Proceed. 1. Plaintiffs Cannot Use Labor Code Section 2810.3 To Support Meal And Rest Period Claims Against NeoStrata Because Such Claims Are Not Brought For The Nonpayment Of Wages To support their fifth cause of action against NeoStrata for meal and rest period violations, Plaintiffs have alleged that NeoStrata “is specifically liable to the Plaintiff, the Represented Employees, and the Putative Class for the ‘[non- ]payment of wages’ pursuant to Labor Code § 2810.3(b)(1). . . .” (Doc. No. 49 at ¶ 290 (brackets in original).) But, as relevant here, the labor contractor statute limits a client employer to sharing “civil legal responsibility and civil liability” for claims based on the “payment of wages” only. Lab. Code § 2810.3(b)(1) (emphasis added). “Wages” are specifically defined in section 2810.3(a)(4) as having “the same meaning provided by Section 200 and all sums payable to an employee or the state based upon any failure to pay wages, as provided by law.” Here, Plaintiff cannot use section 2810.3 liability because meal and period claims are not actions brought for nonpayment of “wages.” Plaintiffs bring their new meal period claim under Labor Code section 226.7. (Doc. No. 49 at 51:4.) In Kirby v. Immoos Fire Protection, Inc., 53 Cal. 4th 1244 (2012), however, the California Supreme Court concluded that “Section 226.7 is not aimed at protecting or providing employees’ wages. Instead, the statute is primarily concerned with ensuring the health and welfare of employees by requiring that employers provide meal and rest periods as mandated by the IWC.” Id. at 1255. The Kirby Court held that “a section 226.7 claim is not an Case 3:16-cv-02189-AJB-JLB Document 54-1 Filed 04/13/17 PageID.1590 Page 18 of 30 - 19 - Firm:43284217v1 Memorandum in Support of Defendant NeoStrata Company, Inc.’s Motion to Dismiss or Strike Plaintiff’s FAC - Case No. 3:16-cv-02189-AJB-JLB 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 action brought for nonpayment of wages; it is an action brought for nonprovision of meal or rest breaks.” Id. at 1257 (emphasis added); accord Ling v. P.F. Chang’s China Bistro, Inc., 245 Cal. App. 4th 1242, 1261 (2016) (although “the remedy for a section 226.7 violation is an extra hour of pay, . . . the fact that the [Section 226.7] remedy is measured by an employee’s hourly wage does not transmute the remedy into a wage . . . .”) (emphasis added); Singletary v. Teavana Corp., 2014 U.S. Dist. LEXIS 62073, *4 (N.D. Cal. Apr. 2, 2014) (“Kirby clarified that the wrong at issue in Section 226.7 is the non-provision of rest breaks, not a denial of wages.”). Because Plaintiffs’ meal and rest period claims under Labor Code section 226.7 are not claims “brought for the nonpayment of wages” as the Kirby Court held, and because section 2810.3(b)(1) liability can be imposed only in actions concerning the “payment of wages,” the references to section 2810.3 should be stricken from Plaintiffs’ fifth cause of action for meal and rest period violations. 2. Plaintiffs Have Failed To Allege Facts Supporting A Meal Period Claim Against NeoStrata. Plaintiffs also seek to impose liability against NeoStrata for alleged meal and rest period violations based on the theory that it was “a joint employer under the common law.” (Doc. No. 49 at ¶ 290.) Even if the Court were to find that Plaintiffs’ allegations supported a joint employer theory of liability, “a plaintiff seeking to hold multiple entities liable as joint employers must plead specific facts that explain how the defendants are related and how the conduct underlying the claims is attributable to each.” Freeney v. Bank of Am. Corp., 2015 U.S. Dist. LEXIS 92848, at *57 (C.D. Cal. July 16, 2015) (emphasis added). As NeoStrata explained in its motions to dismiss the original Complaint, the FAC, and the SAC, the California Court of Appeal’s decision in Noe v. Superior Court, 237 Cal. App. 4th 316 (2015), highlights the need for Plaintiffs to set forth separately the factual allegations as to each defendant rather than refer to their Case 3:16-cv-02189-AJB-JLB Document 54-1 Filed 04/13/17 PageID.1591 Page 19 of 30 - 20 - Firm:43284217v1 Memorandum in Support of Defendant NeoStrata Company, Inc.’s Motion to Dismiss or Strike Plaintiff’s FAC - Case No. 3:16-cv-02189-AJB-JLB 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 alleged unlawful conduct as only a group action - i.e., “NEOSTRATA and 24 SEVEN.” (Doc. No. 8-1 at 14:10-26; Doc. No. 19-1 at 13:26-14:15; Doc. No. 38- 1 at 18:21-19:24.) The Noe Court made clear that unless provided by the language in a particular Labor Code provision, purported “joint employers” are not vicariously liable for alleged Labor Code violations. Specifically, the Noe Court explained: “We are aware of no authority suggesting that, under California law, joint employers are generally treated ‘as if they were each other’s agents’ or that joint employers are normally held jointly liable for Labor Code violation[s] committed by a coemployer.” Noe at 332. As such, Plaintiffs must plead separately allegations showing that each defendant engaged in unlawful conduct as to them and others. They have again failed to do so. To support her meal period claim, Winston has alleged that “on March 17, 2016 and March 26, 2016 [she] had just enough travel time allocated to her to allow her to report to the next assignments, which precluded her from taking an uninterrupted 30-minute meal break. (Doc. No. 49 at ¶ 175.) But she has failed to allege which defendant - NeoStrata or one of the 24Seven defendants - imposed such a purportedly strict assignment schedule that she could not take a meal period. Similarly, Horton has alleged that “on November 19, 2015 and December 18, 2015, her records show she worked six continuous hours, but Defendants NEOSTRATA and/or 24 SEVEN never provided her a meal break or paid her premium pay for missing the meal.” (Doc. No. 49 at ¶ 176.) This Court has twice instructed Plaintiffs “that the purpose of Federal Rule of Civil Procedure 8, and its requirements that allegations be pled with sufficient specificity, is to put the opposing party on notice of the wrong they allegedly committed so that they can adequately defend themselves.” (Doc. No. No. 30 at 7:5-8; Doc. No. 46 at 11:10-13.) Yet Horton has again failed to put NeoStrata on notice of the wrong it allegedly committed. Merely asserting that it was Case 3:16-cv-02189-AJB-JLB Document 54-1 Filed 04/13/17 PageID.1592 Page 20 of 30 - 21 - Firm:43284217v1 Memorandum in Support of Defendant NeoStrata Company, Inc.’s Motion to Dismiss or Strike Plaintiff’s FAC - Case No. 3:16-cv-02189-AJB-JLB 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 “NEOSTRATA and/or 24 SEVEN [that] never provided her a meal break” fails to comply with Rule 8. Because there generally is no vicarious liability, and because Winston and Horton are unable to plead sufficient allegations of meal period violations against one defendant or the other, then their meal period claims may not proceed against that defendant. And because they have demonstrated they are unable to plead sufficient allegations as to any defendant, their meal period claims may not proceed at all. 3. Plaintiffs Have Failed To Identify A Single Day When NeoStrata Allegedly Prevented Them From Taking A Rest Period. In order to plead a wage-hour violation, the Ninth Circuit has held that “at a minimum the plaintiff must allege at least one workweek when he worked in excess of forty hours and was not paid for the excess hours in that workweek, or was not paid minimum wages.” Landers v. Quality Commc’ns, Inc., 771 F.3d 638, 646 (9th Cir. 2014). Although discussed in the context of FLSA claims, the “pleading standards set forth in Landers apply equally to Plaintiffs’ state overtime, minimum wage, meal period, and rest break allegations.” Shann v. Durham School Services, L.P., 182 F. Supp. 3d 1044, 1048 (C.D. Cal. 2016). Here, Plaintiffs have failed to identify a single day when NeoStrata did not authorize or permit any of them to take a rest period. (See Doc. No. 49 at ¶¶ 177- 178.) Consequently, they have failed to satisfy basic pleading requirements in order to state a rest period claim against NeoStrata. Thus, Plaintiffs’ rest period claim should be dismissed. See, e.g., Ritenour v. Carrington Mortg. Servs. LLC, 2017 U.S. Dist. LEXIS 1747, at *16-17 (C.D. Cal. Jan. 5, 2017) (following Landers and finding that “nowhere in the Complaint does Plaintiff identify . . . a single instance where Defendant failed to provide such meal and rest periods. . . . Simply put, the Complaint does not provide fair notice of the claims. The Court GRANTS Defendant’s motion to dismiss.”). Case 3:16-cv-02189-AJB-JLB Document 54-1 Filed 04/13/17 PageID.1593 Page 21 of 30 - 22 - Firm:43284217v1 Memorandum in Support of Defendant NeoStrata Company, Inc.’s Motion to Dismiss or Strike Plaintiff’s FAC - Case No. 3:16-cv-02189-AJB-JLB 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 D. Plaintiffs Cannot Bring A Claim For Waiting Time Penalties Based Upon Alleged Meal And Rest Violations. As discussed above, the California Supreme Court held in Kirby that “a section 226.7 action is brought for the nonprovision of meal and rest periods, not for the ‘nonpayment of wages.’” 53 Cal. 4th at 1255 (italics in original). Relying on Kirby, the California Court of Appeal in Ling, explained: We reject plaintiff’s argument that a section 203 waiting time claim based on section 226.7 premium pay is an “action brought for the nonpayment of wages” under section 218.5. We understand that the remedy for a section 226.7 violation is an extra hour of pay, but the fact that the remedy is measured by an employee’s hourly wage does not transmute the remedy into a wage as that term is used in section 203, which authorizes penalties to an employee who has separated from employment without being paid. 245 Cal. App. 4th at 1261 (emphasis added). The Ling Court further held: Kirby concluded that “a section 226.7 action is brought for the nonprovision of meal and rest periods, not for the ‘nonpayment of wages.’” [Citation.] Following Kirby, section 226.7 cannot support a section 203 penalty because section 203, subdivision (b) tethers the waiting time penalty to a separate action for wages. Id. (emphasis added). Here, Plaintiffs’ claim for waiting time penalties under Labor Code section 203 is based in part on their claim for meal and rest period violations under section 226.7. (Doc. No. 49 at ¶ 260 (re-alleging and incorporating by references preceding paragraphs to support the waiting time claim).) However, the Ling Court confirmed that “section 226.7 cannot support a section 203 penalty . . . .” 245 Cal. App. 4th at 1261. Accordingly, paragraph 260 of the TAC should be stricken as it incorporates alleged meal and rest period violations to support Plaintiffs’ waiting time claim. Case 3:16-cv-02189-AJB-JLB Document 54-1 Filed 04/13/17 PageID.1594 Page 22 of 30 - 23 - Firm:43284217v1 Memorandum in Support of Defendant NeoStrata Company, Inc.’s Motion to Dismiss or Strike Plaintiff’s FAC - Case No. 3:16-cv-02189-AJB-JLB 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 E. References To Labor Code Sections 223 And 225.5 Should Be Stricken Because Plaintiffs Have Failed To Allege Facts That NeoStrata “Secretly” Paid Lower Wages While Purporting To Pay The Wages Designated. To support their second cause of action for unpaid wages, Plaintiffs have cited Labor Code section 223, which provides as follows: “Where any statute or contract requires an employer to maintain the designated wage scale, it shall be unlawful to secretly pay a lower wage scale while purporting to pay the wage designated by statute or by contract.” Id. (emphasis added). Here, although Plaintiffs have alleged that NeoStrata “did not pay Plaintiffs minimum/regular wages for all hours suffered or permitted to work in violation of state law” (Doc. No. 49 at ¶ 248), they have failed to allege any facts to support a claim that NeoStrata secretly paid lower wages than designated by statute or contract (see id.) - an element for a claim under Labor Code section 223. Johnson v. Hewlett-Packard Co., 809 F. Supp. 2d 1114, 1136 (N.D. Cal. 2011) (finding that the plaintiff “has no evidence that HP ‘secretly’ paid a lower wage ‘while purporting to pay the wage designated by . . . [his] contract.’”). Consequently, Plaintiffs have failed to state a claim for violation of section 223 and references to this statute should be stricken. Because Plaintiffs have failed to state a section 223 claim, references to Labor Code section 225.5 should also be stricken. Section 225.5 makes available penalties for persons who violate “Section 212, 216, 221, 222, or 223” of the Labor Code. Because Plaintiffs have failed to state a claim under Labor Code section 223, and they have not alleged any violation of sections 212, 216, 221, or 222, they cannot bring a claim under section 225.5. Case 3:16-cv-02189-AJB-JLB Document 54-1 Filed 04/13/17 PageID.1595 Page 23 of 30 - 24 - Firm:43284217v1 Memorandum in Support of Defendant NeoStrata Company, Inc.’s Motion to Dismiss or Strike Plaintiff’s FAC - Case No. 3:16-cv-02189-AJB-JLB 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 F. References To Alleged Meal And Rest Period Violations Should Be Stricken From Plaintiffs’ UCL Claim Because Meal And Rest Period Premiums Do Not Constitute Restitution Recoverable Under The UCL. The UCL “borrows” alleged violations from other laws, making them independently actionable as unfair practices. Korea Supply Co. v. Lockheed Martin Corp., 29 Cal. 4th 1134, 1143 (2003); Krantz v. BT Visual Images, LLC, 89 Cal. App. 4th 164, 178 (2001) (violation under “unlawful” prong of the UCL requires underlying violation of law). It is well established that the UCL provides for only injunctive relief and restitution; “damages are not recoverable.” Korea Supply, 29 Cal. 4th at 1144. Here, Plaintiff’s UCL claim is based in part on alleged meal and rest period violations. (Doc. No. 49 at ¶ 334(b) (“failing to pay the Class and Plaintiffs all wages due and owing including . . . meal break premiums in violation of state law”), ¶ 332 (re-alleging and incorporating by references preceding paragraphs - which include meal and rest period allegations - to support the UCL claim).) As explained below, because meal and rest period premiums are not restitution, they are not recoverable under the UCL. Thus, these bases for recovery should be stricken from the UCL claim. Plaintiffs’ UCL claim “borrows” meal and rest period violations of Labor Code section 226.7. In Kirby, the California Supreme Court held that “Section 226.7 is not aimed at protecting or providing employees’ wages. Instead, the statute is primarily concerned with ensuring the health and welfare of employees by requiring that employers provide meal and rest periods as mandated by the IWC.” 53 Cal. 4th at 1255. The Kirby Court further held that “a section 226.7 claim is not an action brought for nonpayment of wages; it is an action brought for nonprovision of meal or rest breaks.” Id. at 1257. Following Kirby, the Court in Jones v. Spherion Staffing LLC, 2012 U.S. Dist. LEXIS 112396 (C.D. Cal. Aug 7, 2012), held that the plaintiff could not Case 3:16-cv-02189-AJB-JLB Document 54-1 Filed 04/13/17 PageID.1596 Page 24 of 30 - 25 - Firm:43284217v1 Memorandum in Support of Defendant NeoStrata Company, Inc.’s Motion to Dismiss or Strike Plaintiff’s FAC - Case No. 3:16-cv-02189-AJB-JLB 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 advance a claim for under Labor Code section 203 based on the alleged failure to pay wages due upon termination based solely on alleged violations of section 226.7, because “under Kirby, the legal violation underlying a section 226.7 claim is the nonprovision of meal and rest periods and the corresponding failure to ‘ensur[e] the health and welfare of employees,’ not the nonpayment of wages.” Id. at *21 (citing Kirby, 53 Cal. 4th at 1255); accord Singletary v. Teavana Corp., 2014 U.S. Dist. LEXIS 62073, *4 (N.D. Cal. Apr. 2, 2014) (“Kirby clarified that the wrong at issue in Section 226.7 is the non-provision of rest breaks, not a denial of wages.”). Also following Kirby, the California Court of Appeal in Ling held that although “the remedy for a section 226.7 violation is an extra hour of pay, . . . the fact that the [Section 226.7] remedy is measured by an employee’s hourly wage does not transmute the remedy into a wage . . . .” 245 Cal. App. 4th at 1261. The Ling, Jones, and Singletary Courts confirmed the Kirby Court’s holding that section 226.7 claims are not claims brought for the nonpayment of wages that were not paid - i.e., the meal and rest period premiums that may be recovered under section 226.7 are not restitutionary in nature. In Parson v. Golden State FC, LLC, 2016 U.S. Dist. LEXIS 58299 (N.D. Cal. May 2, 2016), the Court addressed the very issue of whether rest period premiums qualify as restitution under the UCL. Answering that question in the negative, the Parson Court dismissed the plaintiff’s UCL claim to the extent it was based on the failure to pay meal and rest period premiums, holding that: The Court concludes that these wages [under section 226.7 - i.e., rest period premiums] do not constitute restitution for the purposes of the UCL. Though the California Supreme Court does not appear to have addresse[d] this question in relation to section 226.7, it held in Pineda v. Bank of America, N.A., 50 Cal. 4th 1389, 1401, [] (2010) that similar wages awarded pursuant to section 203 were not restitution under the UCL. Section 203(a) provides that if an employer does not timely pay all wages due to an employee who is discharged or quits, “the wages of the employee shall Case 3:16-cv-02189-AJB-JLB Document 54-1 Filed 04/13/17 PageID.1597 Page 25 of 30 - 26 - Firm:43284217v1 Memorandum in Support of Defendant NeoStrata Company, Inc.’s Motion to Dismiss or Strike Plaintiff’s FAC - Case No. 3:16-cv-02189-AJB-JLB 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 continue as a penalty” for up to 30 days. Id. (quoting Cal. Lab. Code § 203(a)). Contrasting the award of these wages with the unpaid overtime wages discussed in Cortez [v. Purolator Air Filtration Products Co., 23 Cal. 4th 163, 173 (2000)], the court explained that wages awarded under section 203 “would not ‘restore the status quo by returning to the plaintiff funds in which he or she has an ownership interest.’” Id. (quoting Korea Supply, 29 Cal. 4th at 1149)). While “it is the employers’ action (or inaction) that gives rise to section 203 penalties,” the unpaid wages identified in Cortez “arise[] out of the employees’ action, i.e., their labor.” Id. Id. at *19-20 (italics in original). The Pineda Court’s reasoning applies equally to Labor Code section 226.7 because both sections 203(a) and 226.7 impose awards of additional wages if an employer violates the provision. “Much like under section 203(a), wages awarded for failure to provide rest breaks under section 226.7 would not be earned by the ‘employee who has given his or her labor to the employer in exchange for that property.’” Id. at *20 (citing Cortez, 23 Cal. 4th at 173). For this reason, the Parson Court granted the defendants’ motion to dismiss the plaintiffs’ UCL claim to the extent it was based on wages or penalties owed under section 226.7. In Guerrero v. Halliburton Energy Servs., 2017 U.S. Dist. LEXIS 15738 (E.D. Cal. Feb. 2, 2017), the Court followed Parson. It concluded that Labor Code “§ 226.7 wages do not constitute restitution recoverable under UCL and therefore GRANTS Defendant’s motion to dismiss Plaintiff’s UCL claim insofar as the claim pertains to [Labor Code] § 226.7 wages for meal and rest period violations.” Id. at *20. Here, Plaintiffs’ UCL claim is based in part on alleged meal and rest period violations of Labor Code section 226.7. (Doc. No. 49 at ¶ 332.) As a UCL claim cannot be based on alleged meal and rest period violations because the remedy under section 226.7 does not constitute restitution, references to alleged meal and rest period violations should be stricken from Plaintiffs’ UCL claim. Case 3:16-cv-02189-AJB-JLB Document 54-1 Filed 04/13/17 PageID.1598 Page 26 of 30 - 27 - Firm:43284217v1 Memorandum in Support of Defendant NeoStrata Company, Inc.’s Motion to Dismiss or Strike Plaintiff’s FAC - Case No. 3:16-cv-02189-AJB-JLB 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 G. The Court Should Dismiss Or Strike Plaintiffs’ Class And PAGA Claims Because Their Proposed Class, Subclass, And Representative Action Definitions Still Are Not Readily Ascertainable Or Constitute Impermissible “Fail-Safe” Definitions. 1. Plaintiffs Have Once Again Defined Their Proposed Class And Subclasses Using An Unascertainable Definition. As the courts have explained, “‘in order to maintain a class action, the class sought to be represented must be adequately defined and clearly ascertainable.’” Vietnam Veterans of Am. v. C.I.A., 288 F.R.D. 192, 211 (N.D. Cal. 2012) (quoting DeBremaecker v. Short, 433 F.2d 733, 734 (5th Cir. 1970)). A plaintiff “must establish that there exists a legally definable ‘class’ that can be ascertained through reasonable effort” and according to a “minimum standard of definiteness which will allow the trial court to determine membership in the proposed class.” Earnest v. General Motors Corp., 923 F. Supp. 1469, 1473 (N.D. Ala. 1996) (citations omitted). “An identifiable class exists if its members can be ascertained by reference to objective criteria.” Whiteway v. FedEx Kinko’s Office and Print Services, Inc., 2006 WL 2642528, at *3 (N.D. Cal. Sept. 14, 2006) (emphasis added) (citing DeBremaecker, 433 F.2d at 734-735). “A class definition is sufficient if the description of the class is ‘definite enough so that it is administratively feasible for the court to ascertain whether an individual is a member.’” Viet. Veterans, 288 F.R.D. at 211 (quoting O’Connor v. Boeing N. Am., Inc., 184 F.R.D. 311, 319 (C.D. Cal. 1998)). “Administrative feasibility means that identifying class members is a manageable process that does not require much, if any, individual factual inquiry.” Alba Conte & Herbert B. Newberg, Newberg on Class Actions (4th ed. 2002) § 3:3. Here, by defining the putative class and subclasses such that they would represent non-exempt employees who worked for NeoStrata but were issued paystubs by 24Seven, Plaintiffs have proposed class and subclass definitions by which individualized analyses must be conducted in order to ascertain who would Case 3:16-cv-02189-AJB-JLB Document 54-1 Filed 04/13/17 PageID.1599 Page 27 of 30 - 28 - Firm:43284217v1 Memorandum in Support of Defendant NeoStrata Company, Inc.’s Motion to Dismiss or Strike Plaintiff’s FAC - Case No. 3:16-cv-02189-AJB-JLB 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 be in the class (and who would not) because an individual would qualify for membership only if he or she were jointly employed by NeoStrata and the 24 SEVEN Defendants. This fundamental defect in Plaintiffs’ proposed class definition is fatal to their class allegations in their TAC. See, e.g., Mantolete v. Bolger, 767 F.2d 1416 (9th Cir. 1985) (affirming dismissal of class action allegations where individualized inquiries would be required to determine whether each putative class member was a “qualified handicapped individual”); Hovsepian v. Apple, Inc., 2009 WL 5069144, at *6 (N.D. Cal. Dec. 17, 2009) (striking class allegations where “the class is not ascertainable because it includes members who have not experienced any problems with their iMac display screens”). Plaintiffs’ putative “Minimum/Regular Wage Subclass No. 2,” “Overtime Subclass No. 2,” “Meal and Rest Break Subclass No. 2,” “Waiting Time Penalty Subclass No. 2,” and “UCL Subclass No. 2” suffer from the same defect because each putative subclass member in these proposes subclasses would be a member of the putative “Class No. 2.” (Doc. No. 49 at 37:19-39:7.) Plaintiffs have also continued to define their UCL subclass as individuals who “worked for Defendant NEOSTRATA . . . and who seek restitution . . . .” (Dkt. No. 49 at 39:4-7 (emphasis added).) By seeking to represent only those individuals who seek restitution, Plaintiffs do not seek to represent those who do not seek such restitution. And determining who seeks restitution and who does not would be an individualized inquiry as to each individual who ever worked for NeoStrata or the 24Seven Defendants. NeoStrata addressed the defects in Plaintiffs’ proposed class and subclass definitions in its motions to dismiss the original Complaint, the FAC, and the SAC. (Doc. No. 8-1 at 22:17-25:17; Doc. No. 19-1 at 19:4-21:11; Doc. 25 at 10:1-8; Doc. No. 38-1 at 38-1 at 21:4-23:12.) Plaintiffs have failed to cure these defects in their TAC. Given their ongoing inability to satisfy basic pleading requirements despite multiple opportunities to do so, Plaintiffs’ class allegations Case 3:16-cv-02189-AJB-JLB Document 54-1 Filed 04/13/17 PageID.1600 Page 28 of 30 - 29 - Firm:43284217v1 Memorandum in Support of Defendant NeoStrata Company, Inc.’s Motion to Dismiss or Strike Plaintiff’s FAC - Case No. 3:16-cv-02189-AJB-JLB 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 should be stricken without leave to amend. See Ferdik v. Bonzelet, 963 F.2d 1258, 1261 (9th Cir. 1992) (noting a district court’s discretion to deny leave to amend is particularly broad where it has afforded plaintiff one or more opportunities to amend). 2. Plaintiffs Have Defined Their PAGA Representative Action Using Unascertainable, Fail-Safe Definitions. “The fail-safe appellation is simply a way of labeling the obvious problems that exist when the class itself is defined in a way that precludes membership unless the liability of the defendant is established.” Kamar v. RadioShack Corp., 375 Fed. App’x 734, 736 (9th Cir. 2010). “A fail-safe class ‘include[s] only those who are entitled to relief.’” Van Lith v. iHeartmedia + Entm’t, Inc., 2016 U.S. Dist. LEXIS 96853, at *13 (E.D. Cal. July 25, 2016) (quoting Young v. Nationwide Mut. Ins. Co., 693 F.3d 532, 538 (6th Cir. 2012)). “This is so because under a fail-safe class definition ‘[e]ither the class members win or, by virtue of losing, they are not in the class and, therefore, not bound by the judgment.’” Id. at *13 (quoting Randleman v. Fidelity Nat’l Title Ins. Co., 646 F.3d 347, 352 (6th Cir. 2011)). Here, Plaintiffs have defined Group IV and Group V of their representative PAGA action using fail-safe definitions. Specifically, they seek to represent NeoStrata employees “who should have received all their wages as required by California law” in Group IV (Doc. No. 49 at 34:1-7) - excluding those who did receive all their wages due. And they seek to represent NeoStrata employees “who are entitled to PAGA penalties and related remedies for Defendant NEOSTRATA’s violations of the California Labor Code” in Group V (id. at 34:8- 15) - excluding those who are not entitled to PAGA penalties and related remedies. As a result, the Court should strike Plaintiffs’ proposed Group IV and Group V representative action definitions. See, e.g., Van Lith, 2016 U.S. Dist. LEXIS 96853, at *12-16 (striking impermissible “fail-safe” class definition that Case 3:16-cv-02189-AJB-JLB Document 54-1 Filed 04/13/17 PageID.1601 Page 29 of 30 - 30 - Firm:43284217v1 Memorandum in Support of Defendant NeoStrata Company, Inc.’s Motion to Dismiss or Strike Plaintiff’s FAC - Case No. 3:16-cv-02189-AJB-JLB 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 “would include only individuals whose wage statements violated § 226(a)”). Moreover, these definitions suffer from equally fatal ascertainability defects as the proposed class and subclasses in that Plaintiffs have defined the purportedly “aggrieved employees” such that they would represent persons who were employed by NeoStrata, and it would take individualized analyses to determine whether Plaintiffs or any putatively aggrieved employees were employees of NeoStrata. NeoStrata addressed the defects regarding Plaintiffs’ proposed representative action definitions in its motions to dismiss the FAC and the SAC. (Doc. 19-1 at 21:20-28; Doc. 38-1 at 23:13-25:3.) Plaintiffs have failed to cure these defects in their TAC. Given their ongoing inability to satisfy basic pleading requirements despite being given multiple opportunities to do so, Plaintiffs’ representative action allegations should be stricken without leave to amend. See Ferdik, 963 F.2d at 1261. As Plaintiffs’ proposed definitions remain impermissible despite multiple opportunities to amend their Complaint, their class and PAGA claims should be dismissed. Alternatively, their class and PAGA allegations should be stricken. Either way, these claims may not proceed. IV. CONCLUSION For the foregoing reasons, NeoStrata prays that this motion to dismiss and strike be granted without leave to amend. DATED: April 13, 2017 By: EPSTEIN BECKER & GREEN, P.C. /s/ Michael S. Kun Michael S. Kun Kevin D. Sullivan Attorneys for Defendant NEOSTRATA COMPANY, INC. Case 3:16-cv-02189-AJB-JLB Document 54-1 Filed 04/13/17 PageID.1602 Page 30 of 30