No. 2: 14-cv-00931 JAM DAD
ORDER DENYING PLAINTIFF'S MOTION TO REMAND AND DENYING DEFENDANT'S MOTION TO DISMISS
This matter is before the Court on Plaintiff Mitch Davenport's ("Plaintiff") Motion to Remand (Doc. #10) and Defendant Wendy's International, Inc.'s ("Defendant") Motion to Dismiss ("Doc. #8) Plaintiff's First Amended Complaint ("FAC") (Doc. #1, Ex. B). Defendant opposed Plaintiff's motion (Doc. #13) and Plaintiff opposed Defendant's motion (Doc. #12). Plaintiff replied (Doc. #14), as did Defendant (Doc. #15). For the following reasons, Plaintiff's Motion to Remand is DENIED and Defendant's Motion to Dismiss is DENIED.
This motion was determined to be suitable for decision without oral argument. E.D. Cal. L.R. 230(g). The hearing was scheduled for June 4, 2014.
I. FACTUAL ALLEGATIONS AND PROCEDURAL BACKGROUND
Plaintiff Davenport is former employee of Defendant Wendy's International, Inc. FAC ¶ 13. Defendant is engaged in the business of operating fast food restaurants throughout North America. FAC ¶ 8. Plaintiff worked for Defendant as a "salaried General Manager" until July 26, 2013, when he resigned from the company. FAC ¶ 13.
Plaintiff alleges that he and all other salaried General Managers employed by Defendant in California were "routinely required to work in excess of eight (8) hours a day and/or forty (40) hours per week without receiving overtime compensation." FAC ¶ 14. Plaintiff alleges that all General Managers were "expected and required to work five (5) ten (10) hour shifts per week and generally averaged fifty (50) or more hours per week." FAC ¶ 17. Plaintiff further alleges that salaried General Managers working for Defendant "consistently spend more than fifty percent (50%) of their working hours performing non-managerial tasks." FAC ¶ 25. Accordingly, Plaintiff alleges that he and all other salaried General Managers were "improperly misclassified . . . as exempt from California's overtime laws." FAC ¶ 49. Plaintiff alleges that Defendant "knew or should have known that the salaried General Managers did not qualify as exempt employees and purposely elected not to pay them for their overtime labor." FAC¶ 52.
According to Plaintiff, "[d]ue to chronic understaffing, tight restrictions on labor by [Defendant], and meeting [Defendant's] speed of service standards, Plaintiff rarely had time to take an uninterrupted, thirty (30) minute meal period, when working shifts in excess of five (5) hours in duration." FAC ¶ 42. Plaintiff further alleges that Defendant "failed to keep the records of hours worked by its salaried General Managers as required by California's Wage Orders." FAC ¶ 51.
Plaintiff purports to bring this action on behalf of two classes: (1) "All persons who, at any time during the four years preceding the filing of this Complaint up until the date of entry of judgment after trial, are or were employed at any of [Defendant's] corporately owned fast food restaurants in California as salaried General Managers;" and (2) "All persons who, at any time during the four years preceding the filing of this Complaint up until the date of entry of judgment after trial, are or were employed at any of [Defendant's] corporately owned fast food restaurants in California as salaried General Managers who did not receive an uninterrupted, off-duty thirty (30) minute meal period, for each day in which they worked in excess of five (5) hours." FAC ¶ 1.
On August 5, 2013, Plaintiff filed the original Complaint (Doc. #1, Ex. A) in Sacramento County Superior Court. On September 12, 2013, Plaintiff filed the First Amended Complaint ("FAC") (Doc. #1, Ex. B). On October 17, 2013, Defendant filed its first Notice of Removal. District Judge Burrell found that this removal was improper because the amount in controversy necessary for diversity jurisdiction under 28 U.S.C. § 1332(a) was lacking. On April 15, 2014, Defendant filed its second Notice of Removal (Doc. #1), removing the action to this Court pursuant to 28 U.S.C. § 1332(d), the Class Action Fairness Act of 2005 ("CAFA").
The FAC includes the following causes of action: (1) "Failure to Pay Overtime Wages" in violation of California Labor Code ("CLC") § 203, § 510, § 1194, and § 1198; (2) "Failure to Provide Meal Breaks" in violation of CLC § 226.7; (3) "Violation of California Labor § 226;" (4) "Violation of Business and Professions Code §§ 17200 and 17203;" and (5) "Violation of Labor Code § 2699(F) for Violations of Labor Code §§ 201-203, 226(A) 226.7, 510, 1194 and 1198 and Penalties pursuant to Labor Code § 2699(A) for violations of Labor Code § 226.3."
A. Motion to Remand
1. Legal Standard
CAFA gives the district courts original jurisdiction in any civil action where: (1) "the matter in controversy exceeds the sum or value of $5,000,000, exclusive of interest and costs," (2) the number of putative class members is not less than 100 persons, and (3) "any member of a class of plaintiffs is a citizen of a State different from any defendant." 28 U.S.C. § 1332(d). Under CAFA, a removing defendant must prove that these elements are satisfied by the preponderance of the evidence.
In his Motion to Remand, Plaintiff argues that Defendant has "concede[d] that there were not 100 or more class members at the time the complaint and/or FAC were filed." Motion to Remand ("MTR") at 7. Plaintiff further argues that the removal was "premised on the incorrect assumption that CAFA diversity jurisdiction can be satisfied if, although lacking at the time of the filing of the Complaint or Amended Complaint, by virtue of the passage of time the number of class members grows to over 100." MTR at 7-8. Plaintiff maintains that, on a motion to remand, the Court's inquiry is limited to "whether the 100 person requirement necessary for CAFA jurisdiction existed at the time of the filing of Plaintiff's Complaint." MTR at 9.
Defendant responds with two arguments. First, it disputes Plaintiff's construction of the law, arguing that federal jurisdiction is determined at the time of removal, not the time of filing. Opp. at 5. In the alternative, Defendant maintains that "the putative class size has always exceeded 100 - even as of the date of initiation of the action." Opp. at 2.
Defendant has presented uncontested evidence that the CAFA class-size requirement was satisfied at the time the original complaint was filed. Martha Shannon, a "Legal Manager" for Defendant Wendy's, submitted a declaration stating that "the number of putative class members at the time this action was commenced . . . exceeded 100 persons." Shannon Declaration ¶ 5 (emphasis added). In making this conclusion, Ms. Shannon reviewed Defendant's HR databases, Oracle and People Soft. Shannon Declaration ¶ 5. Plaintiff presents no evidence to rebut this testimony, other than Defendant's own statements in the Notice of Removal. Reply at 1. The Shannon Declaration is sufficient to satisfy Defendant's burden. See, e.g., Ray v. Wells Fargo Bank, N.A., 2011 WL 1790123 at *6 (C.D. Cal. May 9, 2011) (holding that a sworn declaration is sufficient to meet a removing defendant's burden, and that "there is no need . . . to provide the business records themselves"); Lewis v. Verizon Commc'ns, Inc., 627 F.3d 395, 397 (9th Cir. 2010) (holding that remand was improper where the removing defendant had "supplied an affidavit to show that the potential damages could exceed the jurisdictional amount").
Plaintiff's contention that Defendant "conceded" this point in its Notice of Removal is without merit. MTR at 7. First, Plaintiff cites no authority for its position that Defendant is bound by representations made in its Notice of Removal. Moreover, neither of Defendant's statements is a clear and definitive admission that the class size was insufficient at the time of filing. Defendant's statement that the "class size expands over time . . . as Defendant hires persons in this role" and that "[o]ne hundred or more persons now fit with Plaintiff's putative class description" is consistent with Defendant's current position. Notice of Removal ¶ 13. More problematic is Defendant's statement that "[s]ubsequent to the prior removal and the prior remand, this action became removable . . . because the class size now meets or exceeds 100 persons[.]" Notice of Removal ¶ 8. The clear implication of this statement is that, at the time of the prior removal and remand, the class size did not exceed 100 members. Nevertheless, this statement stops short of directly making that admission. Regardless, Plaintiff has not established that such an admission, even if made, would be binding on Defendant for purposes of a motion to remand. Moreover, prior to Plaintiff's motion to remand (filed on May 1, 2014), Defendant clearly communicated its current position to Plaintiff. In an April 30, 2014 letter to Plaintiff's counsel, Defendant's counsel unambiguously stated that "the number of class members at the time you commenced the action exceeded 100 persons[.]" Kemple Declaration, Ex. D (emphasis added). Accordingly, the Court finds that Defendant has not "conceded" that the number of class members at the time the action was commenced was less than 100 persons.
The Court does not consider Plaintiff's argument - made for the first time in its reply - that Defendant's removal was untimely. It is well-established that a party may not raise a new argument in its reply brief. See, e.g., Harrold v. Experian Info. Solutions, Inc., 2012 WL 4097708, at *4 n.2 (N.D. Cal. Sept. 17, 2012) (noting that "[s]andbagging with a new legal theory in a reply brief will not be tolerated"); Tovar v. U.S. Postal Serv., 3 F.3d 1271, 1273 n.3 (9th Cir. 1993) (striking new information from a reply brief, while noting this practice "deprived the [opposing party] of an opportunity to respond"). Prior to filing its motion to remand, Plaintiff had advance notice of Defendant's position that the class size requirement was satisfied "at the time [Plaintiff] commenced the action[.]" Kemple Declaration, Ex. D. Therefore, Plaintiff cannot contend that Defendant has argued this "for the first time in its Opposition to remand." Reply at 1 (emphasis in original). Accordingly, any argument in Plaintiff's reply brief that the removal was untimely is stricken as improper. Tovar, 3 F.3d at 1273 n.3. As the Court does not consider Plaintiff's new argument, Defendant's request to file a response to address this new argument (Doc. #17) is unnecessary. Accordingly, because the Court finds that the number of class members exceeded 100 persons at the time the action was commenced, Plaintiff's Motion to Remand is DENIED.
B. Motion to Dismiss
1. Failure to Allege Wrongdoing against Individual Plaintiff
Defendant argues that each of Plaintiff's five causes of action must be dismissed because Plaintiff "offers no allegations of wrongful conduct concerning himself." Motion to Dismiss ("MTD") at 5 (emphasis removed). Defendant maintains that the "only allegations specific to Plaintiff Davenport are found in paragraphs 39 through 42 of the FAC[.]" MTD at 5. Plaintiff responds by listing the numerous allegations made with regard to "General Managers" employed by Defendant, and noting that that group included Plaintiff.
Plaintiff specifically alleges that he "was employed by Defendants as salaried General Manager in California[.]" FAC ¶ 39. Elsewhere in the FAC, Plaintiff alleges that "all of [Defendant's] California based salaried General Managers are and were classified as 'exempt' from California's overtime laws[.]" FAC ¶ 17 (emphasis added). Plaintiff continues to refer to "General Managers" under the subheading "Factual Allegations" in the FAC, rarely referring to Plaintiff individually. FAC ¶¶ 1631. However, given Plaintiff's characterization of himself as a salaried General Manager in California, and given the initial allegation that "all" General Managers were classified as exempt, each factual allegation made with regard to "General Managers" must be read to include Plaintiff. FAC ¶¶ 17, 39. Accordingly, Plaintiff has made sufficient factual allegations concerning himself, individually.
2. Failure to Pay Overtime Wages
Defendant argues that Plaintiff's first cause of action for failure to pay overtime wages must be dismissed because "not a single instance of overtime is factually alleged as to anyone." MTD at 5. Defendant also argues that Plaintiff has failed to state a claim because he did not allege that Defendant "suffered or permitted" unpaid overtime. MTD at 6. Plaintiff responds that "the law does not require specific instances. In other words the law does not require a Plaintiff to allege that on July 26, 2012 he worked 2.5 hours of overtime." Opp. at 7. Plaintiff further argues that he is not required to allege that Defendant suffered and permitted the violations, because "California law, unlike the FLSA, does not contain any language regarding 'suffer and permit.'" Opp. at 7.
Plaintiff does not merely allege that Defendant improperly failed to pay General Managers for overtime work. Rather, Plaintiff makes the additional allegation that "all of [Defendant's] California based salaried General Managers are/were expected and required to work five (5) ten (10) hour shifts per week and generally averaged fifty (50) or more hours per week." FAC ¶ 17. This factual allegation distinguishes the present case from those cases relied upon by Defendant, in which plaintiffs made conclusory allegations that merely mimicked the statutory language. See, e.g., Villegas v. J.P. Morgan Chase & Co., 2009 WL 605833 at *1 (N.D. Cal. Mar. 9, 2009) (granting motion to dismiss where plaintiffs alleged that "the defendants have a policy of not paying members of the class all overtime wages earned"); Acosta v. Yale Club of New York City, 1995 WL 600873 at *4 (S.D.N.Y. Oct. 12, 1995) ("[s]imply stating that Plaintiffs were not paid for overtime work does not sufficiently allege a violation"); Harding v. Time Warner, Inc., 2010 WL 457690 at *4 (S.D. Cal. Jan. 26, 2010) (granting motion to dismiss where the plaintiff alleged that "Defendant ... regularly and repeatedly fail[ed] to compensate Plaintiffs and similarly situated individuals for all hours actually worked"). As Plaintiff has alleged a specific number of hours worked by General Managers each week (50 hours), the present case is analogous to Yuckming Chiu v. Citrix Sys., Inc., in which the plaintiff "alleged that he worked a specific number of hours - between 50 and 60 a week[.]" Yuckming Chiu v. Citrix Sys., Inc., 2011 WL 6018278 at *4 (C.D. Cal. Nov. 23, 2011). Accordingly, the Court finds that Plaintiff's allegations are sufficient to state a claim for failure to pay overtime wages.
Moreover, as a number of courts have previously held, the Court finds that "it cannot be the case that a plaintiff must plead specific instances of unpaid overtime before being allowed to proceed to discovery to access the employer's records." Acho v. Cort, 2009 WL 3562472 at *3 (N.D. Cal. Oct. 27, 2009); see also, Muan v. Vitug, 2013 WL 2403596 at *2 (N.D. Cal. May 31, 2013) (noting that "[i]t would be unfair to require [the plaintiff] to provide in his complaint a detailed employment record when the law clearly requires the employer, not the employee, to maintain such a log").
Furthermore, Plaintiff is not required to allege that Defendant "suffered and permitted" the unpaid overtime violations. As noted in Washington v. Crab Addison, Inc., unlike the FLSA, California Labor Code ("CLC") section 510 does not include "suffer and permit" language. Washington v. Crab Addison, Inc., 2010 WL 2528963 at *3 (N.D. Cal. June 18, 2010). Therefore the FLSA and section 510 "cannot be subjected to the same analysis." Id. at *3. For this reason, Defendant's reliance on Jong v. Kaiser Found. Health Plan, Inc., 171 Cal.Rptr.3d 874 (Cal.Ct.App. 2014) is misplaced. Although the court in Jong concluded that a plaintiff must establish that an employer has "suffered or permitted" the CLC section 510 violation, the court relied entirely on FLSA cases in coming to this conclusion. Jong, 171 Cal.Rptr.3d at 877-78. The Jong court expressly noted that "the parties and the trial court assumed the applicability" of FLSA principles in section 510 cases, and it therefore declined to "question this basic premise on which all parties . . . proceeded." Jong, 171 Cal.Rptr.3d at 877-78. In the instant case, however, the parties have not assumed the applicability of FLSA standards to a section 510 claim, and this Court finds that the absence of "suffer and permit" language in section 510 indicates that Plaintiff need not allege that Defendant "suffered and permitted" the unpaid overtime violations.
3. Failure to Provide Meal Breaks
Defendant argues that Plaintiff's second cause of action for failure to provide meal breaks must be dismissed because "Plaintiff's pleading is a classic instance of a formulaic recitation of the elements of a claim that does not state a claim." MTD at 8 (internal citations and emphasis omitted). Defendant also contends that Plaintiff is required to allege that Defendant expressly ordered him to skip meal breaks. MTD at 7. Plaintiff responds that his allegations regarding "chronic understaffing, tight restrictions placed on labor [and,] speed of service standards" lay sufficient factual background for his "failure to provide meal breaks" claim. Opp. at 11. Plaintiff also argues that, in light of a recent ruling by the California Supreme Court, he is only required to allege that Defendant had a policy of creating incentives to forgo legally protected meal breaks. Opp. at 11, n.6.
Plaintiff alleges that he "rarely had time to take an uninterrupted, thirty (30) minute meal period, when working shifts in excess of five (5) hours," primarily due to "chronic understaffing, tight restrictions placed on labor by Defendants, and meeting Defendants' speed of service standards." FAC ¶ 42. He further alleges that "extreme pressure" was placed on General Managers to meet the "corporately mandated speed of service standards" and that failure to meet these standards "frequently resulted in salaried General Managers receiving poor performance reviews, being unable to make bonuses, being demoted, reprimanded, and even terminated. FAC ¶ 24. As a result of this pressure and "chronic understaffing," Plaintiff alleges that he "rarely had time" to take mandatory meal breaks." FAC ¶ 42. These allegations provide sufficient factual details and distinguish the present case from those cases relied upon by Defendant. See, e.g., Brown v. Wal-Mart Stores, Inc., 2013 WL 1701581 at *5 (N.D. Cal. Apr. 18, 2013) (granting motion to dismiss where the plaintiffs alleged that the defendant "pressured, incentivized, and discouraged" employees from taking meal breaks, but did "not provide any facts surrounding these alleged tactics") (emphasis in original); Bellinghausen v. Tractor Supply Co., 2013 WL 5090869 at *1 (N.D. Cal. Sept. 13, 2013) (granting motion to dismiss where the plaintiff alleged that the defendant "failed to provide . . . an uninterrupted meal period of at least thirty (30) minutes on each day that [plaintiff] worked five (5) hours or more").
Defendant's citation to Lopez v. Wendy's Int'l, Inc., 2011 WL 6967932 (C.D. Cal. Sept. 19, 2011) is unpersuasive. MTD at 7-8. Lopez purports to make a distinction between "being ordered to [skip] breaks and being ordered to complete one's assigned tasks, which results in one skipping breaks." Id. at *3. However, subsequent to the Lopez decision, the California Supreme Court decided Brinker Rest. Corp. v. Superior Court, 53 Cal.4th 1004 (2012). In Brinker, the court held that "an employer may not undermine a formal policy of providing meal breaks by pressuring employees to perform their duties in ways that omit breaks." Brinker, 53 Cal.4th at 1040. Accordingly, Plaintiff's allegations that Defendant's staffing and speed of service standards caused him to skip required meal breaks are sufficient to state a claim for "failure to provide meal breaks." See Fields v. W. Marine Products Inc., 2014 WL 547502 at (N.D. Cal. Feb. 7, 2014) (denying motion to dismiss where "employees were also impeded by the fact that they often worked alone and had no one to run the store had they stopped for a break").
4. Failure to Provide Accurate Wage Statements
Defendant seeks dismissal of Plaintiff's third cause of action for failure to provide accurate wage statements on the grounds that Plaintiff has not sufficiently pled an injury resulting from Defendant's failure to provide accurate wage statements. Defendant contends that this claim includes only the "bare conclusion that [Plaintiff] was 'injured' in some unstated way." MTD at 10. Plaintiff responds that, in light of a recent statutory amendment to the CLC, the threshold for establishing an injury under section 226(e) is very low. Opp. at 14.
To state a claim under section 226(e) of the CLC, an employee must suffer injury as a result of the intentional failure by his employer to provide an accurate wage statement. However, "the injury requirement is minimal," as indicated by the 2013 statutory amendment to section 226(e), which clarifies that "[a]n employee is deemed to suffer injury . . . if the employee cannot promptly and easily determine from the wage statement alone . . . the amount of gross wages or net wages" due to the employee. Cal. Lab. Code § 22 6(e)(2); Fields v. W. Marine Products Inc., 2014 WL 547502 at *8 (N.D. Cal. Feb. 7, 2014). Accordingly, an "injury" under section 226(e) includes "the possibility of not being paid overtime, employee confusion over whether they received all wages owed them, [and] difficulty and expense involved in reconstructing pay records." Elliot v. Spherion Pacific Work, LLC, 572 F.Supp.2d 1169, 1181 (C.D.Cal.2008). Plaintiff alleges that Defendant "failed to accurately record the start and end times for work performed by the Plaintiff and class members, and failed to provide them with timely and accurate wage and hour statements[.]" FAC ¶ 60. As another district court has held, "a reasonable inference can be drawn that [Plaintiff], in order to determine how much he should have been paid, will be required to engage in discovery and mathematical computations in an effort to reconstruct the missing information." Schneider v. Space Sys./Loral, Inc., 2012 WL 1980819 at *3 (N.D. Cal. June 1, 2012). Defendant's reliance on Lopez is therefore unavailing, as it preceded the 2013 statutory amendment to section 226(e). MTD at 9-10 (citing Lopez v. Wendy's Int'l, Inc., 2011 WL 6967932 (C.D. Cal. Sept. 19, 2011)). Accordingly, Plaintiff has sufficiently alleged an "injury" under section 226(e).
As further discussed below, Plaintiff alleges that the Defendant "purposely" misclassified salaried General Manager employees as exempt, and therefore Plaintiff has sufficiently alleged that the failure to provide accurate wage statements was "knowing and intentional" under section 226(e). FAC ¶ 52; see Hennighan v. Insphere Ins. Solutions, Inc., 2013 WL 1758934 at *5 (N.D. Cal. Apr. 24, 2013) (holding that "an allegation of purposeful misclassification is required" to satisfy the "knowing and intentional" element in section 226).
5. Waiting Time Penalties
Plaintiff's claim for "waiting time" penalties under CLC section 203 ( FAC ¶52 ) must be dismissed, according to Defendant, as "Plaintiff offers no allegations concerning a waiting time penalty claim" and has failed to allege that the failure to pay wages was "willful." MTD at 10. Plaintiff responds that his allegation of "purposeful misclassification" is sufficient to support an award under section 203. Opp. at 16.
CLC section 203 provides that, "[i]f an employer willfully fails to pay . . . any wages of an employee who is discharged or who quits, the wages of the employee shall continue as a penalty from the due date thereof at the same rate until paid" for a maximum of 30 days. Cal. Lab. Code § 203. An allegation of "deliberately implement[ing] a . . . policy of not paying overtime" is sufficient to satisfy the "willful" requirement of section 203. Yuckming Chiu v. Citrix Sys., Inc., 2011 WL 6018278 at *5 (C.D. Cal. Nov. 23, 2011). Section 203 also requires an allegation that "some of the Putative Class members were discharged or quit . . . and have failed to receive the overtime wages due to them." Yuckming, 2011 WL 6018278 at *5.
Plaintiff has alleged that Defendant "knew or should have known that the salaried General Managers did not qualify as exempt employees and purposely elected not to pay them for their overtime labor." FAC ¶ 52. Moreover, Plaintiff has alleged that his "employment with Wendy's as a salaried General Manager ended when he resigned from the company effective July 26, 2013." FAC ¶ 13. Accordingly, Plaintiff has sufficiently alleged both elements of a claim for waiting time penalties under CLC section 203.
6. UCL and PAGA Claims
Plaintiff's fourth and fifth causes of action are brought under the Unfair Competition Law ("UCL") and Private Attorney General Act ("PAGA"). These claims are derivative of his first three causes of action under the CLC. As Plaintiff has sufficiently stated a claim for at least one of these causes of action, he has also stated a claim under the UCL and PAGA. See Cortez v. Purolator Air Filtration Products Co., 23 Cal. 4th 163, 178 (2000) (recognizing that "any business act or practice that violates the Labor Code through failure to pay wages is, by definition . . . an unfair business practice" in violation of the UCL); Arias v. Superior Court, 46 Cal. 4th 969, 980 (2009) (noting that an "aggrieved employee" under PAGA may bring suit for violations of the CLC).
7. PAGA Claim as Class Action
Defendant argues that Plaintiff's PAGA claim is pled as a "representative" action, rather than a class action, and therefore runs afoul of Article III of the U.S. Constitution. MTD at 11. Plaintiff responds that his PAGA claim is indeed pled as a class action. Opp. at 19. In the alternative, Plaintiff argues that a "representative" PAGA action is not prohibited by Article III. Opp. at 20.
Paragraphs 1 and 32 of the FAC leave no doubt that the entire action is brought as a class action. FAC ¶¶ 1, 32. Each of these allegations refers to the action as a "class action" and makes no distinction between the first four causes of action and Plaintiff's fifth cause of action - the PAGA claim. FAC ¶¶ 1, 32. Plaintiff's reference to "aggrieved employees" rather than "class members" in the fifth cause of action does not change this. Under PAGA, an "aggrieved employee" is "any person who was employed by the alleged violator and against whom one or more of the alleged violations was committed." Cal. Lab. Code §2699. Under this definition, and the class definition included in the FAC, "aggrieved employees" and "class members" are one and the same. FAC ¶ 1. Every aggrieved employee is a class member and vice versa. This is consistent with Plaintiff's characterization of "aggrieved employees" as "he and other similarly situated members of the classes, [who] suffered the Labor code violations alleged herein[.]" FAC ¶ 28.
Given that the Court finds that Plaintiff's PAGA claim is being pursued as a class action, it need not reach Defendant's Article III argument.
8. Plaintiff's Class Allegations
Defendant urges the Court to strike Plaintiff's class allegations. MTD at 15. Defendant maintains that the Court may strike Plaintiff's class allegations, despite the fact that Plaintiff has not yet filed a motion to certify the proposed class, pursuant to Rule 23. MTD at 16. Plaintiff responds that Defendant's motion to strike is premature, as "Defendant has not yet filed an answer to the complaint, discovery has not yet commenced, and no motion for class certification has been filed." Opp. at 21.
As noted by Plaintiff, courts "routinely deny motions to strike class allegations as premature" when no answer has been filed, discovery has not commenced, and no motion for class certification has been filed. Opp. at 21; see, e.g., In re Wal-Mart Stores, Inc. Wage & Hour Litig., 505 F. Supp. 2d 609, 616 (N.D. Cal. 2007) (holding that the defendant's motions to dismiss or strike the class allegations are premature" where the defendant had not answered the complaint, discovery had not yet commenced, and no motion for class certification had been filed); Fields v. W. Marine Products Inc., 2014 WL 547502 (N.D. Cal. Feb. 7, 2014) (denying the defendant's motion to strike class allegations, noting that "such motions are disfavored because a motion for class certification is a more appropriate vehicle" for evaluating compliance with Rule 23); Gillibeau v. City of Richmond, 417 F.2d 426, 432 (9th Cir. 1969) (noting that "compliance with Rule 23 is not to be tested by a motion to dismiss for failure to state a claim"). The above-cited cases are only a sampling of the many instances in which district courts within the Ninth Circuit have determined that motions to strike class allegations are premature under similar circumstances. See Opp. at 21-22 (string-citing similar cases).
Defendant cites a number of cases for the proposition that, "[w]here a plaintiff fails to properly plead the requirements of Rule 23, the class allegations should be stricken, and class discovery may not be commenced." MTD at 16. These cases are not persuasive. Kamm v. California City Dev. Co., 509 F.2d 205, 210 (9th Cir. 1975) does not stand for the proposition for which it is cited. The Kamm court merely approved a district court's dismissal of a class action, upon a finding that that a state court action was a "superior method of resolving the controversy." Kamm, 509 F.2d at 212. At no point did the Kamm court address the plaintiff's failure to properly plead the requirements of Rule 23. Similarly, John v. Nat'l Sec. Fire & Cas. Co., 501 F.3d 443, 445 (5th Cir. 2007) does not stand for the proposition for which it is cited. John merely holds that class allegations may be dismissed if "it is facially apparent from the pleadings that there is no ascertainable class." John, 501 F.3d at 445. Defendant has not argued that is administratively impossible for the Court to "determine whether a particular individual is a member" of the proposed class, so the class is sufficiently "ascertainable." Mauro v. Gen. Motors Corp., 2008 WL 2775004 at *4 (E.D. Cal. July 15, 2008) (holding that a proposed class is sufficiently defined and "ascertainable" if it is "administratively feasible for the court to determine whether a particular individual is a member"). Likewise, Defendant's citation of Mauro v. Gen. Motors Corp., 2008 WL 2775004 (E.D. Cal. July 15, 2008) is inapposite. Indeed, the Mauro court specifically noted that arguments that the proposed class does not meet the requirements of Rule 23 are "more appropriately raised at the class certification stage." Mauro, 2008 WL 2775004 at *5. Finally, Defendant's citation of two out-of-circuit cases is unpersuasive, given the abundance of in-circuit cases cited by Plaintiff. MTD at 16-17 (citing Stubbs v. McDonald's Corp., 224 F.R.D. 668 (D. Kan. 2004) and Glewwe v. Eastman Kodak Co., 2006 WL 1455476 (W.D.N.Y. May 25, 2006)).
Declining to address the class allegations is particularly appropriate here, given the strict limitations on the length of briefs filed in this Court. The issue of Rule 23 class certification is "better addressed through a fully-briefed class certification hearing," rather than tacked on to the end of an extensive motion to dismiss (as is done here). Yuckming Chiu v. Citrix Sys., Inc., 2011 WL 6018278 at *3 (C.D. Cal. Nov. 23, 2011). Forcing Plaintiff to respond to both motions in an abbreviated manner would be unduly prejudicial. Defendant's arguments regarding commonality, individualized calculation of damages, and the "highly fact-specific stop watch test" can be made if and when Plaintiff moves to certify the proposed class. MTD at 17-20.
For the reasons set forth above, the Court DENIES Plaintiff's Motion to Remand and DENIES Defendant's Motion to Dismiss:
IT IS SO ORDERED. Dated: July 25, 2014
JOHN A. MENDEZ,
UNITED STATES DISTRICT JUDGE