Mendez v. Tween Brands Inc, No. 2:2010cv00072 - Document 22 (E.D. Cal. 2010)
Court Description: MEMORANDUM and ORDER denying 14 Motion to Strike signed by Judge Morrison C. England, Jr on 6/30/10. (Kaminski, H)
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Mendez v. Tween Brands Inc Doc. 22 1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 EASTERN DISTRICT OF CALIFORNIA 10 11 14 HOLLI MENDEZ, an individual, and KATHRYN HAWKES, on behalf of themselves and others similarly situated and on behalf of the State of California Labor and Workforce Development Agency as a Private Attorney General, 15 Plaintiffs, 12 13 16 17 v. MEMORANDUM AND ORDER 18 TWEEN BRANDS, INC., a Delaware Corporation; and DOES 1 through 10, inclusive, 19 Defendant. 20 21 No. 2:10-cv-00072-MCE-DAD ----oo0oo---Through the present action, Plaintiffs seek monetary damages 22 and civil penalties against Defendant Tween Brands, Inc. for 23 violations of both state and federal labor laws. 24 assert individual, class action, and collective action claims, as 25 well as claims brought under the Private Attorney General Act of 26 2004 (“PAGA”) (Cal. Labor Code § 2698 et seq.). 27 contend in their First Amended Complaint (“FAC”) that PAGA causes 28 of action do not require class certification. Plaintiffs Plaintiffs 1 Dockets.Justia.com 1 Defendant now moves to strike that portion of the FAC pursuant to 2 Federal Rule of Civil Procedure 12(f).1 3 Defendant requests an order pursuant to Rule 23(d)(1) that PAGA 4 claims must comply with Rule 23 class certification requirements. 5 For the following reasons, both the motion to strike and the motion 6 for an order that PAGA claims are governed by Rule 23 are denied.2 In the alternative, 7 BACKGROUND 8 9 10 Plaintiffs Mendez and Hawkes filed their FAC against 11 Defendant on March 29, 2010. While the FAC asserts multiple 12 causes of action, those at issue here seek to recover civil 13 penalties pursuant to the Labor Code Private Attorneys General 14 Act of 2004 (“PAGA”).3 15 /// Cal. Lab. Code §§ 2698, et seq. 16 1 17 18 19 20 21 22 23 24 25 26 27 28 Unless otherwise noted, all further references to Rule or Rules are to the Federal Rules of Civil Procedure. 2 Because oral argument will not be of material assistance, the Court ordered this matter submitted on the briefs. E.D. Cal. Local Rule 230(g). 3 The FAC sets out eleven causes of action regarding Defendant’s alleged violations of the California Labor Code and the Fair Labor Standards Act: first, a class action claim for failure to pay overtime compensation under California law; second, a class action claim for failure to itemize wage statements under Cal. Lab. Code § 226; third, a class action claim for unpaid wages under Cal. Lab. Code § 203; fourth, a collective action under the Fair Labor Standards Act, 29 U.S.C. §§ 207 and 216 for overtime pay and liquidated damages; fifth, a class action claim for failure to provide rest breaks under Cal. Bus. & Prof. Code § 17200; sixth, a private cause of action for failure to provide Plaintiff Mendez with pay records under Cal. Lab. Code § 226; seventh, PAGA penalties for overtime violations; eighth, PAGA penalties for break violations; ninth, PAGA penalties for pay stub violations; tenth, PAGA penalties for failure to keep accurate timecard records; and eleventh, PAGA penalties for falsification of documents. 2 1 This Court has both federal question and diversity jurisdiction 2 over this matter as well as jurisdiction pursuant to the Class 3 Action Fairness Act, 28 U.S.C. 1332(d). 4 PAGA allows “aggrieved employees” to act as private 5 attorneys general by bringing claims for civil penalties against 6 employers for violations of the Labor Code. 7 § 2699(a). 8 Labor and Workforce Development Agency (“LWDA”) and the remaining 9 twenty-five percent go to the aggrieved employees. Cal. Lab. Code Seventy-five percent of any funds recovered go to the Id. 10 § 2699(i). 11 to pursue or recover other remedies available under state or 12 federal law, either separately or concurrently with an action 13 taken under this part.” 14 A PAGA claim does not preclude “an employee’s right Id. § 2699(g)(1). PAGA sets out procedural requirements that must be met 15 before a claim can be brought. 16 notify the LWDA of the alleged violations by certified mail, and 17 can only pursue a claim if the LWDA either declines to 18 investigate or neglects to respond within 33 days. 19 § 2699.3(1). 20 within 120 days. 21 issue a citation, the proposed plaintiff may then bring a cause 22 of action. 23 The proposed plaintiff must Id. If the LWDA decides to investigate, it must do so Should it fail to investigate or decide not to Id. § 2699.3(a)(2)(B). Defendant does not argue that Plaintiffs have failed to meet 24 these procedural requirements. Rather, Defendant asserts that 25 unless Plaintiffs comply with Rule 23 class certification 26 requirements, in addition to the PAGA requirements, their claim 27 cannot be heard in federal court. 28 /// 3 STANDARD 1 2 3 The Court may strike “from any pleading any insufficient 4 defense or any redundant, immaterial, impertinent, or scandalous 5 matter.” 6 motion to strike is to avoid the expenditure of time and money 7 that must arise from litigating spurious issues by dispensing 8 with those issues prior to trial....” 9 Robins Co., 697 F.2d 880, 885 (9th Cir. 1983). Fed. R. Civ. P. 12(f). “[T]he function of a 12(f) Sidney-Vinstein v. A.H. Immaterial matter 10 is that which has no essential or important relationship to the 11 claim for relief or the defenses being pleaded. 12 Fogerty, 984 F.2d 1524, 1527 (9th Cir. 1993) (rev’d on other 13 grounds Fogerty v. Fantasy, Inc., 510 U.S. 517 (1994)) (internal 14 citations and quotations omitted). 15 of statements that do not pertain, and are not necessary, to the 16 issues in question. Fantasy, Inc. v. Impertinent matter consists Id. 17 ANALYSIS 18 19 20 The California Supreme Court held in Arias v. Superior Court 21 that PAGA claims need not satisfy class action requirements. 22 46 Cal. 4th 969 (2009). 23 an employee plaintiff brings a claim “as the proxy or agent of 24 the state’s labor law enforcement agencies.” Id. at 986. 25 /// 26 /// 27 /// 28 /// The Arias court found, inter alia, that 4 1 Rather than representing a class of employees, such plaintiff 2 “represents the same legal right and interest as state labor law 3 enforcement agencies-namely, recovery of civil penalties that 4 otherwise would have been assessed and collected by the Labor 5 Workforce Development Agency.” 6 § 2699(a), (f)). 7 representative action only for the purpose of seeking statutory 8 penalties for Labor Code violations, and an action to recover 9 civil penalties is fundamentally a law enforcement action 10 designed to protect the public and not to benefit private 11 parties.” Id. at 986 (internal quotation marks and citations 12 omitted). A PAGA claim, therefore, is fundamentally different 13 from a class action in terms of both the interests represented 14 and the relief sought. 15 between the two types of claims, the California Supreme Court 16 held that while actions under PAGA “may be brought as class 17 actions,” class certification is not mandatory. Id. at 986 (citing Cal. Lab. Code Furthermore, “the act authorizes a In light of this essential disparity Id. at 981 n.5. 18 19 Defendant contends that while Arias has settled this issue 20 in California state court, PAGA claims must nevertheless be 21 brought as class actions in federal court. 22 argument, Defendant first points out that under the Erie 23 doctrine, federal law governs all procedural matters arising in 24 federal court. 25 (1938). 26 in Amalgamated Transit, held that PAGA claims are procedural in 27 nature. 28 46 Cal. 4th 993 (2009). To support this See Erie Railroad Co. V. Tompkins, 304 U.S. 64 Defendant then claims that the California Supreme Court, Amalgamated Transit Union Local 1756 v. Super. Ct., 5 1 According to the Amalgamated Transit decision, PAGA “does not 2 create property rights or any other substantive rights. 3 it impose any legal obligations. 4 statute allowing an aggrieved employee to recover civil 5 penalties-for Labor Code violations-that otherwise would be 6 sought by state labor law enforcement agencies.” 7 (internal citations omitted). 8 9 Nor does It is simply a procedural Id. at 1003 The present case, however, is distinguishable from Amalgmated Transit, which involved the question of whether 10 standing to sue under PAGA was a transferrable right. 11 Plaintiff labor unions sought standing to bring suit under PAGA 12 by asserting that “aggrieved employees” had assigned to the 13 unions their right to sue. 14 that PAGA does not create a transferrable right akin to a 15 property right, and therefore the labor unions lacked standing. 16 Id. at 1003. 17 Defendants that the statute is purely procedural. 18 Id. at 999. Id. Amalgamated Transit held This holding is narrower than the one implied by To find that PAGA creates a wholly procedural right, and 19 that Rule 23 therefore applies, would be to ignore the intent of 20 the legislature in passing the statute. 21 Legislature found that often “the only meaningful deterrent to 22 unlawful conduct is the vigorous assessment and collection of 23 civil penalties as provided in the Labor Code.” 24 § 2698(b). 25 enforcement agencies “are likely to fail to keep up with the 26 growth of the labor market in the future,” the creation of a 27 private right of action was “therefore in the public interest.” 28 Id. § 2698(c),(d). The California Cal. Lab. Code Because staffing levels in state labor law 6 1 The bringing of a private claim under PAGA is a procedure, but 2 one that serves the important function of protecting the “public 3 interest.” 4 from a purely procedural rule, such as the method for service of 5 process or formatting a complaint. 6 Such a statute is distinct in purpose and function Other District Courts have adopted a similar approach to 7 PAGA claims. Two courts in the Northern District of California 8 have held that PAGA claims are fundamentally different from class 9 actions. Before the Arias decision, the Hibbs-Rines court 10 nonetheless found that because PAGA claims are distinct from 11 class actions, they do not circumvent Rule 23. 12 Seagate Technologies, LLC, No. C 08-05430 SI, 4 (N.D. Cal. 13 March 2, 2009). 14 Supreme Court’s ruling in Arias would be dispositive, indicating 15 that its holding would apply in federal court even in light of 16 Rule 23. 17 whether PAGA claims must be brought pursuant to Rule 23 class 18 certification requirements, the Ochoa-Hernandez court imported 19 the Arias court’s reading of PAGA into its decision wholesale, 20 holding that an “analogy between class actions and PAGA claims 21 is... misplaced.” 22 C 08-2073 MHP, 4 (N.D. Cal. Aug. 22, 1983). 23 court in this district found that Arias controls in federal court 24 and PAGA claims need not be brought as class actions. 25 M.A.T. & Sons Landscape, Inc., No. 2:09-cv-00459 JAM JFM, 3 (E.D. 26 Cal. July 23, 2009). 27 /// 28 /// Hibbs-Rines v. The court further held that the California Id. at 4. Without directly addressing the issue of Ochoa-Hernandez v. CJADERS Foods, Inc., No. 7 Finally, the Machado Machado v. 1 Defendants cite to the Ninth Circuit’s decision in Fiedler 2 v. Clark to support their argument that federal law applies to 3 all procedural matters brought in federal court. 4 Clark, 714 F.2d 77 (9th Cir. 1983). 5 “[h]owever extensive their power to create and define substantive 6 rights, the states have no power to enlarge or contract federal 7 jurisdiction.” 8 415, 419 (9th Cir. 1981). 9 establish jurisdiction in federal court for his claim against Fiedler v. The Fiedler court held that Id. at 80 (quoting Duchek v. Jacobi, 646 F.2d In Fiedler, the plaintiff sought to 10 defendants for chemical contamination of dairy products. Id. at 11 78. 12 removing barriers to standing to sue, did not and could not 13 expand the jurisdiction of federal courts. 14 present case, however, jurisdiction is not at issue. 15 claims are brought in this court in accord with federal question 16 and diversity jurisdiction. 17 Additionally, this court has jurisdiction over Plaintiffs’ class 18 action claims pursuant to the Class Action Fairness Act. 19 28 U.S.C. § 1332(d) (2008). 20 have been challenged by Defendant. 21 therefore be brought in this court under pendent jurisdiction 22 without enlarging federal jurisdiction. The Ninth Circuit held that the Hawaii Constitution, in Id. at 80. In the Plaintiffs’ 28 U.S.C. § § 1331, 1332 (2008). None of these bases for jurisdiction Plaintiffs’ PAGA claim may 23 Furthermore, by setting a different procedural standard in 24 federal court, we would encourage forum shopping on the part of 25 defendants, who would seek to remove cases to federal court in 26 order to force plaintiffs to comply with class certification 27 requirements. 28 /// 8 1 Moreover, Defendants fundamentally misstate the nature of 2 PAGA claims. PAGA claims are law enforcement actions, not class 3 actions. 4 proxy or agent of the state’s labor law enforcement agencies.” 5 Arias, 209 P.3d at 933.4 6 consists of civil penalties, not individual or class damages. 7 Cal. Lab. Code § 2699(a). 8 law enforcement action designed to protect the public and 9 penalize the employer for past illegal conduct. A plaintiff brings claims pursuant to PAGA as “the The remedy sought in a PAGA suit “[A PAGA] action is fundamentally a Restitution is 10 not the primary object of a PAGA action, as it is in most class 11 actions.” 12 1277, 1300 (2009). 13 ruling in Shady Grove that Rule 23 governs all class actions 14 brought in federal court, Shady Grove Orthopedic Assocs. v. 15 Allstate Ins. Co., 130 S. Ct. 1431 (2010), but PAGA claims, by 16 definition, are not class actions. 17 argument moot. 18 /// 19 /// 20 /// Franco v. Athens Disposal Co., Inc., 171 Cal. App. 4th Defendant relies on the Supreme Court’s This renders Defendant’s 21 22 23 24 25 26 27 28 4 Because we hold that PAGA actions are not class actions, but law enforcement actions, we need not address Defendant’s argument that Plaintiffs lack Article III standing to pursue their PAGA claims without certifying as a class. For the same reason, we find unpersuasive the holding of the Central District in Adams v. Luxottica, No. 8:07 Civ. 01465 (C.D. Cal. July 24, 2009). The Adams court found that PAGA claims are representative actions brought on behalf of other aggrieved employees and that, as such, they must meet with Rule 23 certification requirements to be brought in federal court. Id. at 14. This argument is not applicable to our line of reasoning. Plaintiffs do not assert the rights of third parties, but rather represent the interests of state labor law enforcement agencies. 9 CONCLUSION 1 2 3 4 5 6 For the reasons just stated, Defendant’s Motion to Strike (Docket No. 14) is DENIED. IT IS SO ORDERED. Dated: June 30, 2010 7 8 9 _____________________________ MORRISON C. ENGLAND, JR. UNITED STATES DISTRICT JUDGE 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 10
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