Opinion
No. 2:16-cv-00635-KJM-EFB
09-13-2016
JUSTIN TITUS, Plaintiff, v. MCLANE FOODSERVICE, INC., a corporation; and DOES 1-100, inclusive, Defendants.
ORDER
Defendant McLane Foodservice, Inc. ("McLane") moves to dismiss or, alternatively, to strike plaintiff Justin Titus's requests for damages, civil penalties, and injunctive relief in connection with his fifth claim, for failure to provide notice of paid sick leave in violation of California Labor Code section 246(h). Plaintiff opposes the motion in part. The court held a hearing and initial scheduling conference on May 18, 2016, at which Jenny Baysinger appeared for plaintiff and Matthew Kane appeared for defendant. For the following reasons, the court GRANTS defendant's motion. ///// /////
All statutory citations are to California authorities unless otherwise specified.
I. BACKGROUND
A. Statutory Background
The court first provides an overview of the relevant statutes, the Private Attorneys General Act of 2004, Cal. Lab. Code § 2698 et seq. ("PAGA"), and the Healthy Workplaces, Healthy Families Act of 2014, Cal. Lab. Code §§ 245-249 ("the Healthy Workplaces, Healthy Families Act" or "the Act").
1. PAGA
In 2003, the California Legislature adopted PAGA to improve enforcement of existing Labor Code obligations. See Iskanian v. CLS Transp. L.A., LLC, 59 Cal. 4th 348, 379 (2014), cert. denied, 135 S. Ct. 1155 (2015); Caliber Bodyworks, Inc. v. Superior Court, 134 Cal. App. 4th 365, 370, 374 (2005). PAGA "prescribe[s] a civil penalty for existing Labor Code sections for which no civil penalty has otherwise been established and . . . allow[s] aggrieved employees . . . to bring a civil action to collect civil penalties for Labor Code violations previously only available in enforcement actions initiated by the State's labor law enforcement agencies." Caliber Bodyworks, 134 Cal. App. 4th at 374.
Specifically, it provides, in relevant part,
Notwithstanding any other provision of law, any provision of this code that provides for a civil penalty to be assessed and collected by the Labor and Workforce Development Agency [(LWDA)]. . . for a violation of this code, may, as an alternative, be recovered through a civil action brought by an aggrieved employee on behalf of himself or herself and other current or former employees pursuant to the procedures specified in Section 2699.3.Cal. Lab. Code § 2699(a). However, section 2699(g)(2) creates an exception to that general rule: It provides that "[n]o action shall be brought under this part for any violation of a posting, notice, agency, reporting, or filing requirement of [the Labor Code], except where the filing or reporting requirement involves mandatory payroll or workplace injury reporting." Cal. Lab. Code § 2699(g)(2).
The California Supreme Court has explained that in bringing a PAGA action, "the aggrieved employee acts as the proxy or agent of state labor law enforcement agencies, representing the same legal right and interest as those agencies, in a proceeding that is designed to protect the public, not to benefit private parties." Amalgamated Transit Union, Local 1756, AFL-CIO v. Superior Court, 46 Cal. 4th 993, 1003 (2009) (citations omitted). The penalties recovered in this kind of civil action generally are distributed seventy-five percent to the State and twenty-five percent to the aggrieved employee. Caliber Bodyworks, 134 Cal. App. 4th at 370.
Section 2699.3 establishes procedural prerequisites to a civil action for PAGA remedies, which vary with the type of violation alleged. Cal. Lab. Code § 2699.3. An action alleging a violation of any provision listed in section 2699.5 must comply with the requirements of section 2699.3(a); an action alleging a violation of any provision of Division 5 (commencing with section 6300) other than those listed in section 2699.5 must comply with the requirements of section 2699.3(b); and an action alleging a violation of any provision not listed in section 2699.5 or Division 5 must comply with the requirements of section 2699.3(c). Id. Here, as noted, plaintiff alleges a violation of section 246(h), which is not listed in section 2699.5 or in Division 5, so the requirements of section 2699.3(c) apply if plaintiff's action is not otherwise barred. Section 2699.3(c) requires an aggrieved employee to give the LWDA and the employer written notice of the alleged violation and then wait thirty-three days to allow the employer to cure the alleged violation. Id. § 2699.3(c)(1)-(2) ("notice and cure provisions"). If the alleged violation is not cured within the thirty-three day period, the employee may commence a civil suit. Id. § 2699.3(c)(2)(A).
2. The Healthy Workplaces, Healthy Families Act
In 2014, the California Legislature enacted the Healthy Workplaces, Healthy Families Act. Section 246(h) reads as follows, in relevant part:
The California Legislature recently amended section 246. 2015 California Senate Bill No. 3, California 2015-2016 Regular Session (filed Apr. 4, 2016). The amendment did not alter the relevant language, but it relabeled subsection "(h)" as subsection "(i)." Id. Because the complaint and the parties address the prior version of the Act, and to avoid confusion, the court refers to this provision as subsection "(h)" throughout this order, both with respect to the alleged past violations and with respect to the requested injunctive relief prohibiting future violations.
An employer shall provide an employee with written notice that sets forth the amount of paid sick leave available, or paid time off leave an employer provides in lieu of sick leave, for use on either
the employee's itemized wage statement described in Section 226 or in a separate writing provided on the designated pay date with the employee's payment of wages . . . .Cal. Lab. Code § 246(h) (2014).
Section 226 requires employers to furnish their employees with accurate itemized wage statements that show specific information, including (1) gross wages earned, (2) total hours worked, (3) number of piece-rate units earned and applicable piece rate, (4) all deductions, (5) net wages earned, (6) inclusive dates of the pay period, (7) name of the employee and last four digits of the employee's social security number, (8) name and address of the legal entity that is the employer, and (9) all applicable hourly rates in effect and the corresponding number of hours worked at each hourly rate. Cal. Lab. Code § 226(a).
Section 248.5 allows the Labor Commissioner to bring a civil action against an employer violating the Act and to seek legal or equitable relief on behalf of the aggrieved employees, including reinstatement or injunctive relief, backpay, restitution, liquidated damages, attorney's fees and costs, and additional penalties. Id. § 248.5(e). Section 248.5 also provides "that any person or entity enforcing [the Act] on behalf of the public as provided for under applicable state law shall, upon prevailing, be entitled only to equitable, injunctive, or restitutionary relief, and reasonable attorney's fees and costs." Id.
B. Relevant Facts and Procedural Background
The only claim subject to defendant's motion is plaintiff's fifth claim for failure to provide notice of paid sick leave in violation of California Labor Code section 246(h). The complaint alleges the following facts to support that claim. Plaintiff Titus was employed as a transportation driver for defendant McLane from July 15, 2015 until he was terminated on October 19, 2015. See Compl. ¶¶ 19, 29, Def.'s Appendix of Docs. Ex. A, ECF No. 4. As of August 15, 2015, plaintiff had worked for defendant for at least thirty days, so he was entitled to paid sick leave under California Labor Code section 246. Id. ¶ 58. However, during plaintiff's employment, defendant did not provide him with written notice of the paid sick time he had available, as required by section 246(h). Id. ¶¶ 59-60. In connection with his fifth claim, plaintiff seeks recovery of "compensatory, special, and general damages, including lost wages and related benefits"; "civil and statutory penalties, including those available under Labor Code sections 226, 248.5, and 2699(f)"; an injunction ensuring defendant's compliance with the Labor Code; pre-judgment and post-judgment interest; and attorneys' fees and costs. Id. at 11.
On December 30, 2015, plaintiff filed a civil action in the San Joaquin Superior Court. See generally Compl. Defendant removed the action on March 25, 2016. ECF No. 1. On April 15, 2016, defendant filed the instant motion to dismiss. Mot., ECF No. 9. Plaintiff opposed the motion in part, Opp'n, ECF No. 11, and defendant replied, Reply, ECF No. 12.
At hearing, the court granted the parties leave to submit supplemental briefing "(1) addressing whether plaintiff's PAGA claim is barred by Cal. Lab. Code sections 2699.3 and 2699.5, and (2) responding to plaintiff's citation of Willis v. California, 22 Cal. App. 4th 287 (1994), for the first time at hearing." Minutes, May 18, 2016, ECF No. 14. Each party subsequently filed a supplemental brief. Pl.'s Suppl. Brief, ECF No. 15; Def.'s Suppl. Brief, ECF No. 16. Both parties' briefs went beyond the scope of the briefing allowed by the court, so the court allowed each party to file further supplemental briefing responding to the other's respective unauthorized, new arguments. Order, Aug. 9, 2016, ECF No. 19. The court also ordered the parties to identify any state laws other than PAGA that allow a private person to enforce the Act on behalf of the public. Id. Each party submitted a second supplemental brief and a list of authorities. ECF Nos. 21-24. Both parties identified the California Unfair Competition Law, Cal. Bus. & Prof. Code §§ 17200, 17204, as the only state law other than PAGA that allows a private person to enforce the Act on behalf of the public. Pl.'s Statement, ECF No. 22; Def.'s Statement, ECF No. 24.
II. LEGAL STANDARDS
A motion to dismiss under Federal Rule of Civil Procedure 12(b)(1) tests the court's subject matter jurisdiction. See, e.g., Savage v. Glendale Union High Sch., 343 F.3d 1036, 1039-40 (9th Cir. 2003). When a party moves to dismiss for lack of subject matter jurisdiction, "the plaintiff bears the burden of demonstrating that the court has jurisdiction." Boardman v. Shulman, No. 12-00639, 2012 WL 6088309, at *2 (E.D. Cal. Dec. 6, 2012), aff'd sub nom. Boardman v. C.I.R., 597 F. App'x 413 (9th Cir. 2015). If a plaintiff lacks standing, the court lacks subject matter jurisdiction under Article III of the U.S. Constitution. Cetacean Cmty. v. Bush, 386 F.3d 1169, 1174 (9th Cir. 2004).
Under Rule 12(b)(6) of the Federal Rules of Civil Procedure, a party may move to dismiss a complaint for "failure to state a claim upon which relief can be granted." The motion may be granted only if the complaint "lacks a cognizable legal theory or sufficient facts to support a cognizable legal theory." Hartmann v. Cal. Dep't of Corr. & Rehab., 707 F.3d 1114, 1122 (9th Cir. 2013). Although a complaint need contain only "a short and plain statement of the claim showing that the pleader is entitled to relief," Fed. R. Civ. P. 8(a)(2), in order to survive a motion to dismiss this short and plain statement "must contain sufficient factual matter . . . to 'state a claim to relief that is plausible on its face.'" Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). A complaint must include something more than "an unadorned, the-defendant-unlawfully-harmed-me accusation" or "'labels and conclusions' or 'a formulaic recitation of the elements of a cause of action.'" Id. (quoting Twombly, 550 U.S. at 555). Determining whether a complaint will survive a motion to dismiss for failure to state a claim is a "context-specific task that requires the reviewing court to draw on its judicial experience and common sense." Id. at 679. Ultimately, the inquiry focuses on the interplay between the factual allegations of the complaint and the dispositive issues of law in the action. See Hishon v. King & Spalding, 467 U.S. 69, 73 (1984).
In making this context-specific evaluation, this court must construe the complaint in the light most favorable to the plaintiff and accept its factual allegations as true. Erickson v. Pardus, 551 U.S. 89, 93-94 (2007). This rule does not apply to "a legal conclusion couched as a factual allegation," Twombly, 550 U.S. at 555 (quoting Papasan v. Allain, 478 U.S. 265, 286 (1986)), "allegations that contradict matters properly subject to judicial notice," Sprewell v. Golden State Warriors, 266 F.3d 979, 988-89 (9th Cir. 2001), or material attached to or incorporated by reference into the complaint, see id. A court's consideration of documents attached to a complaint, documents incorporated by reference in the complaint, or matters of judicial notice will not convert a motion to dismiss into a motion for summary judgment. United States v. Ritchie, 342 F.3d 903, 907-08 (9th Cir. 2003); Parks Sch. of Bus. v. Symington, 51 F.3d 1480, 1484 (9th Cir. 1995); cf. Van Buskirk v. Cable News Network, Inc., 284 F.3d 977, 980 (9th Cir. 2002) (noting that even though court may look beyond pleadings on motion to dismiss, generally court is limited to face of the complaint on 12(b)(6) motion).
III. DISCUSSION
Defendant moves to dismiss each claim for relief sought for the alleged violation of section 246(h): (1) "compensatory, special, and general damages, including lost wages and related benefits"; (2) civil penalties under section 226; (3) civil penalties under section 248.5 through PAGA; and (4) an injunction ensuring defendant's compliance with the Labor Code. See Mot. at 1-2. The court examines each request for relief in turn.
A. Individual Damages Under Section 246(h)
Plaintiff agrees, and the court independently concludes, plaintiff cannot bring an individual claim for the alleged violation of section 246(h), because there is no private right of action to enforce that provision. Opp'n at 2 n.1; see Cal. Lab. Code § 246(h) (no express private right of action). Compare Assembly Bill No. 1522 at 13, 2013-2014 Regular Session, Mot. Ex. B, ECF No. 9 (original draft of section 248.5(e) allowing "a person" to bring a civil action), with Cal. Lab. Code § 248.5(e) (enacted provision omitting reference to "a person"). Accordingly, the court DISMISSES plaintiff's individual claim and request for individual damages for a violation of section 246(h). Because amendment would be futile, the claim is dismissed without leave to amend. See Fed. R. Civ. P. 15(a); Cafasso, U.S. ex rel. v. Gen. Dynamics C4 Sys., Inc., 637 F.3d 1047, 1058 (9th Cir. 2011) (a court need not grant leave to amend under Federal Rule of Civil Procedure 15(a) when amendment would be futile).
The court takes judicial notice of Assembly Bill No. 1522, as introduced on January 16, 2014, because it "can be accurately and readily determined from sources whose accuracy cannot reasonably be questioned," Fed. R. Evid. 201(b)(2).
B. Penalties Under Section 226
In addition, plaintiff concedes, and the court independently concludes, it is proper to dismiss plaintiff's claim for penalties under section 226, because section 246(h) expressly precludes the recovery of penalties under section 226 for a violation of that subdivision. Opp'n at 2 n.1; see Cal. Lab. Code § 246(h) ("The penalties described in this article for a violation of this subdivision shall be in lieu of the penalties for a violation of Section 226."). Accordingly, the court also DISMISSES plaintiff's request for penalties under section 226 without leave to amend. See Cafasso, 637 F.3d at 1058.
C. Penalties Under PAGA
Defendant advances three arguments for dismissing plaintiff's claim for civil penalties for the alleged violation of section 246(h): (1) PAGA does not allow for recovery of civil penalties here, because section 246(h) is not listed in section 2699.5; (2) PAGA does not allow for recovery of civil penalties here, because section 246(h) is a notice requirement within the meaning of section 2699(g)(2); and (3) section 248.5(e) independently precludes the recovery of PAGA penalties, because it expressly limits the relief available to a private person who is enforcing section 246(h) on behalf of the public to only equitable, injunctive, or restitutionary relief. See Reply at 1-5; Def.'s Suppl. Brief at 1-5.
Defendant's first argument incorrectly interprets PAGA. Contrary to defendant's assertion, a provision of the Labor Code need not be listed in section 2699.5 for a plaintiff to recover penalties for a violation of that provision under PAGA. As explained above, and as this court previously has concluded, whether a provision is listed in section 2699.5 merely determines whether a plaintiff must comply with the procedural requirements of section 2699.3(a), or the different requirements of 2699.3(b) or (c). See Stoddart v. Express Servs., Inc., No. 12-01054, 2015 WL 5522142, at *3 (E.D. Cal. Sept. 16, 2015) ("An employee may also bring a PAGA action for violations of sections other than those listed in section 2699.5, but an employee must allow the employer an opportunity to cure the alleged violation in addition to providing notice to the LWDA." (citing Cal. Lab. Code § 2699.3(c))).
However, defendant's second argument has merit. As stated above, the text of PAGA provides that "[n]o action shall be brought under this part for any violation of a posting, notice, agency, reporting, or filing requirement of [the Labor Code], except where the filing or reporting requirement involves mandatory payroll or workplace injury reporting." Cal. Lab. Code § 2699(g)(2). The complaint, in turn, brings a claim for PAGA penalties for a violation of section 246(h)'s requirement that an employer "provide an employee with written notice that sets forth the amount of paid sick leave available." Compl. ¶¶ 56-61 (emphasis added); id. at 11. There is scant case law interpreting section 2699(g)(2), but the plain statutory language indicates section 246(h) is a notice requirement within the meaning of that provision. Section 2699(g)(2) broadly excludes "any" violation of a "posting, notice, agency, reporting, or filing requirement," except for a narrow category of mandatory payroll and workplace injury reporting requirements. Plaintiff does not argue section 246(h) falls within the narrow exception-to-the-exception in the last clause, and the plain language of sections 2699(g)(2) and 246(h) suggests it does not. Section 246(h) requires an employer to provide written notice to an employee; it does not require an employer to file or report payroll or workplace injury information with or to the government agency. See Lawrence v. Indus. Apple Inc., No. 14-00417, 2015 WL 5088675, at *2-3 (Cal. Sup. Ct. July 27, 2015) (Trial Order) (distinguishing "filing or reporting requirements" from "posting or notice requirements").
The court is not persuaded by plaintiff's argument that in light of PAGA's remedial purpose, the exception created in section 2699(g)(2) should be construed narrowly to cover only notices and postings advising of "static employee rights (i.e. notice of workers' compensation carrier and coverage under Labor Code 3550; notification of established paydays required by Labor Code 207)," and not those advising of changing substantive information, such as paid sick leave available under section 246. Pl.'s Further Suppl. Brief at 2. Nothing in the language of section 2699(g)(2) supports plaintiff's reading. The Legislature could have limited section 2699(g)(2)'s exception to specific notice provisions of the Labor Code. Or it could have carved out an exception-to-the-exception for notices advising employees of "changing substantive information," as it did with mandatory payroll and workplace injury reporting requirements. But instead, the Legislature chose to exclude broad categories of requirements, including all notice requirements of the Labor Code, from PAGA's enforcement scheme.
Because the text of PAGA itself precludes a private person from bringing a PAGA action to enforce section 246(h), the court need not reach defendant's third argument, that section 248.5(e) independently bars plaintiff from recovering PAGA penalties. The court notes that its interpretation of section 2699(g)(2) is consistent with the language of section 248.5(e). Under the court's interpretation, each statute provides that only the LWDA may recover civil penalties for a violation of section 246(h). See Cal. Lab. Code § 248.5(e) (providing that the Labor Commissioner may bring a civil action for specified civil penalties, but then stating that "any person or entity enforcing this article on behalf of the public as provided for under applicable state law shall, upon prevailing, be entitled only to equitable, injunctive, or restitutionary relief, and reasonable attorney's fees and costs").
In summary, section 2699(g)(2) bars plaintiff as a matter of law from bringing a PAGA action for the alleged violation of section 246(h)'s notice requirement. Accordingly, the court DISMISSES plaintiff's request for penalties under sections 248.5 and 2699(f) without leave to amend. See Cafasso, 637 F.3d at 1058.
D. Injunctive Relief
Plaintiff's request for injunctive relief lacks a cognizable legal theory. As explained above, there is no private right of action to directly enforce section 246(h). In addition, plaintiff cannot seek injunctive relief on behalf of the LWDA through a PAGA action because, as discussed above, section 2699(g)(2) entirely bars plaintiff from bringing a PAGA action for a violation of section 246(h)'s notice requirement.
The court here does not decide whether plaintiff's qui tam theory of standing would otherwise have merit. See Opp'n at 5-6 (arguing plaintiff can seek injunctive relief on behalf of the LWDA, which is the real party in interest in a PAGA action); Pl.'s Suppl. Brief at 4-5.
The complaint invokes no other statutory framework for seeking injunctive relief. Even if plaintiff could amend the complaint to identify a different statutory pathway, plaintiff, a former employee, would lack standing to seek injunctive relief. See Hangarter v. Provident Life & Accident Ins. Co., 373 F.3d 998, 1021 (9th Cir. 2004) ("In the context of injunctive relief, the plaintiff must demonstrate a real or immediate threat of an irreparable injury [to have Article III standing]." (citation and emphasis omitted)); see also Ellis v. Costco Wholesale Corp., 657 F.3d 970, 986 (9th Cir. 2011) (certain plaintiffs, as former employees, did not have standing to pursue injunctive relief in an employment action).
Because amendment would be futile, the court DISMISSES plaintiff's request for injunctive relief without leave to amend. See Cafasso, 637 F.3d at 1058.
IV. CONCLUSION
For the foregoing reasons, the court GRANTS defendant's motion to dismiss. Accordingly, the court DISMISSES plaintiff's fifth claim for failure to provide notice of paid sick leave in violation of section 246(h) without leave to amend. This leaves the complaint's first through fourth claims for various violations of the California Fair Employment and Housing Act, Cal. Gov't Code § 12940 et seq., on which the case proceeds.
In addition, plaintiff has not responded to the court's August 9, 2016 order to show cause why the "Doe" defendants should not be dismissed. ECF No. 19. Accordingly, the court DISMISSES the "Doe" defendants.
IT IS SO ORDERED. DATED: September 13, 2016.
/s/_________
UNITED STATES DISTRICT JUDGE