Gardner et al v. Shell Oil Company et al, No. 4:2009cv05876 - Document 24 (N.D. Cal. 2010)
Court Description: ORDER Granting 6 Defendants' Motion to Dismiss; Denying 7 Defendants' Motion to Strike (cwlc3, COURT STAFF) (Filed on 4/19/2010)
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Gardner et al v. Shell Oil Company et al Doc. 24 1 2 3 4 5 6 IN THE UNITED STATES DISTRICT COURT 7 FOR THE NORTHERN DISTRICT OF CALIFORNIA 8 9 DAVID GARDNER, STEVE MATTERN and BRIAN CERRE, No. 09-05876 CW United States District Court For the Northern District of California 10 Plaintiffs, 11 v. 12 13 SHELL OIL COMPANY, SHELL OIL PRODUCTS COMPANY LLC and EQUILON ENTERPRISES LLC dba SHELL OIL PRODUCTS US, ORDER GRANTING DEFENDANTS’ MOTION TO DISMISS AND DENYING DEFENDANTS’ MOTION TO STRIKE 14 Defendants. 15 / 16 17 Plaintiffs David Gardner, Steve Mattern and Brian Cerre allege 18 unfair business practices and violations of the California Labor 19 Code against Defendants Shell Oil Company, Shell Oil Products 20 Company LLC and Equilon Enterprises LLC dba Shell Oil Products US. 21 Defendants move to dismiss Plaintiffs’ second cause of action, 22 which is for failure to pay wages due at the time of termination 23 under California Labor Code sections 201, 202 and 203. 24 separately move to strike allegations in Plaintiffs’ complaint 25 relating to this cause of action as well as allegations pertaining 26 to Plaintiffs’ effort to bring this case as a class action. 27 Plaintiffs oppose the motions. 28 filed by the parties, the Court grants Defendants’ motion to Defendants Having considered all of the papers Dockets.Justia.com 1 dismiss the second cause of action and denies Defendants’ motion to 2 strike. 3 BACKGROUND 4 Plaintiffs are currently employed by Defendants and allege 5 that they work or have worked twelve-hour shifts at Defendants’ 6 facility in Martinez, California. 7 ¶ 7. 8 employment with Defendants or that they have been terminated by 9 Defendants. United States District Court For the Northern District of California 10 11 12 13 14 15 16 17 18 First Amended Complaint (FAC) Plaintiffs have not alleged that they have resigned their Plaintiffs bring this action individually and on behalf of the following class of individuals: All current and former employees of Defendants Shell Oil Company, Shell Oil Products Company LLC, and/or Equilon Enterprises LLC dba Shell Oil Products US who worked at least one 12-hour shift as an Operator, Gauger/Pumper, and/or Terminal Operator at the oil refinery located in Martinez, California between April 25, 2004 and the time class certification is granted. Plaintiffs seek to represent the following subclass: All former employees of Defendants Shell Oil Products Company LLC, and/or Equilon Enterprises LLC dba Shell Oil Products US who, at any time between April 25, 2004 and the present, were discharged or resigned form employment and were not timely paid all wages due and owing, pursuant to California Labor Code section 203. 19 Plaintiffs have sued Defendants asserting three causes of action: 20 (1) “failure to provide meal periods” in violation of California 21 Labor Code sections 226.7 and 512 and Wage Order 1-2001; 22 (2) “failure to pay all wages due at the time of discharge or 23 resignation” in violation of California Labor Code sections 201, 24 202 and 203; and (3) “unfair business practices and unfair 25 competition” in violation of Business and Professions Code section 26 17200. 27 28 2 1 United States District Court For the Northern District of California 2 I. Motion to Dismiss for Failure to State a Claim A complaint must contain a “short and plain statement of the 3 claim showing that the pleader is entitled to relief.” 4 Civ. P. 8(a). 5 claim is appropriate only when the complaint does not give the 6 defendant fair notice of a legally cognizable claim and the grounds 7 on which it rests. 8 (2007). 9 state a claim, the court will take all material allegations as true Fed. R. Dismissal under Rule 12(b)(6) for failure to state a Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 In considering whether the complaint is sufficient to 10 and construe them in the light most favorable to the plaintiff. 11 Indus., Inc. v. Kaplan, 792 F.2d 896, 898 (9th Cir. 1986). 12 However, this principle is inapplicable to legal conclusions; 13 “threadbare recitals of the elements of a cause of action, 14 supported by mere conclusory statements,” are not taken as true. 15 Ashcroft v. Iqbal, ___ U.S. ___, 129 S. Ct. 1937, 1949-50 (2009) 16 (citing Twombly, 550 U.S. at 555). 17 NL Plaintiffs allege that they are currently employed by 18 Defendants. 19 201, 202 and 203, a plaintiff’s employment by the defendant must 20 have ended, whether involuntarily or by resignation. 21 Labor Code § 201(a) (“If an employer discharges an employee, the 22 wages earned and unpaid at the time of discharge are due and 23 payable immediately.”); id. § 202(a) (“If an employee not having a 24 written contract for a definite period quits his or her employment, 25 his or her wages shall become due and payable not later than 72 26 hours thereafter . . .”); id. ¶ 203(a) (“If an employer willfully 27 fails to pay, without abatement or reduction . . . any wages of an 28 To bring a cause of action under Labor Code sections 3 See Cal. 1 employee who is discharged or who quits, the wages of the employee 2 shall continue as a penalty . . .”). 3 employment has not been terminated, Plaintiffs fail to state a 4 claim under sections 201, 202 or 203 of the Labor Code. 5 that Plaintiffs seek to represent a class of similarly situated 6 individuals does not change the Court’s analysis. 7 Court grants Defendants’ motion to dismiss Plaintiffs’ second cause 8 of action. 9 II. United States District Court For the Northern District of California 10 Because Plaintiffs’ The fact Accordingly, the Motion to Strike Under Federal Rule of Civil Procedure 12(f), a court may 11 strike from a pleading “any redundant, immaterial, impertinent or 12 scandalous matter.” 13 spending time and money litigating spurious issues. 14 v. Fogerty, 984 F.2d 1524, 1527 (9th Cir. 1993), reversed on other 15 grounds, 510 U.S. 517 (1994). 16 essential or important relationship to the claim for relief plead. 17 Id. 18 necessary to the issues in question in the case. 19 The purpose of a Rule 12(f) motion is to avoid Fantasy, Inc. A matter is immaterial if it has no A matter is impertinent if it does not pertain and is not Id. Defendants seek to strike the following: (1) Plaintiffs’ class 20 allegations on the basis that they are barred by issue preclusion; 21 (2) Plaintiffs’ alleged subclass claiming waiting time penalties 22 under the Labor Code, (3) Plaintiffs’ allegations that the relevant 23 statute of limitations for the claims of their proposed class 24 should commence on April 26, 2004, over four years before 25 Plaintiffs filed this action; and (4) Plaintiffs’ allegations 26 basing their UCL claim on alleged violations of Labor Code sections 27 201, 202 and 203. 28 4 United States District Court For the Northern District of California 1 Defendants argue that Plaintiffs’ class allegations are barred 2 by issue preclusion arising from an August 21, 2009 order denying 3 class certification in United Steel, Paper & Forestry, Rubber 4 Manufacturing, Energy, Allied Industrial & Service Workers Int’l 5 Union, et al. v. Shell Oil Company, 08-3693, (C.D. Cal.) 6 (hereinafter “USW”). 7 sued the Defendants who are being sued in this case, as well as a 8 different company, Tesoro. 9 are members of the union that brought the 2008 case. In that case, the plaintiff union and others Plaintiffs in the instant litigation In that case, 10 the plaintiffs alleged meal and rest period violations, wage 11 statement violations, failure to pay all wages due upon termination 12 or resignation under state wage and hour laws, and violations of 13 California’s Unfair Competition Law. 14 certify a class consisting of employees of two different employers 15 at three different oil refineries located throughout California. 16 The putative class members included current, former and future 17 employee who occupied the following positions: (1) console or board 18 operators, (2) outside operators, (3) field operators, (4) head 19 pumpers, (5) zone gaugers, (6) wharf employees and (7) laboratory 20 technicians. 21 The plaintiffs sought to The district court noted that “Defendants likely promised 22 these employees differing wages, based on their respective duties 23 and responsibilities. 24 that managing such a class would be rife with difficulties because 25 each member’s damages would likely vary substantially. 26 Determination of such damages would involve individualized 27 assessments that are not conducive to class treatment.” 28 In light of these facts, the Court finds 5 Request 1 for Judicial Notice (RJN), Exh. B at 24.1 2 the plaintiffs “failed to meet their burden of establishing that 3 class resolution is a superior method of adjudicating this matter, 4 as required under Rule 23(b)(3).” United States District Court For the Northern District of California 5 The court concluded that Id. Following denial of class certification, the district court 6 remanded the case to state court because the plaintiffs’ claims no 7 longer met the jurisdictional requirements under the Class Action 8 Fairness Act. 9 for leave to amend the complaint to narrow the proposed class to a The plaintiffs then filed in state court a motion 10 subset of the plaintiffs and defendants listed in their original 11 complaint. 12 only one refinery, and did not include Plaintiffs or the class 13 proposed in this case. The narrowed class included only shift employees from 14 A few weeks before those plaintiffs filed their motion to 15 amend their complaint, Plaintiffs in the instant litigation filed a 16 putative class action against the Shell Defendants only, for 17 conduct occurring at the Martinez refinery, not those listed in the 18 amended complaint in the 2008 case. 19 meal period violations, but not rest period violations, failure to 20 pay all wages due at the time of termination or resignation and 21 violations of the UCL. 22 Plaintiffs’ complaint alleges In a diversity action, the Court must apply the collateral 23 estoppel rules of the forum state. 24 Corp., 531 U.S. 497, 508 (2001) (“Since state, rather than federal, Semtek Int’l v. Lockheed Martin 25 1 27 The Court grants Defendants’ request to take judicial notice of proceedings in other courts. Duckett v. Godinez, 67 F.3d 734, 741 (9th Cir. 1995) (“We may take judicial notice of proceedings in other courts, whether in the federal or state systems.”). 28 6 26 United States District Court For the Northern District of California 1 substantive law is at issue there is no need for a uniform federal 2 rule. . . . 3 as the federally prescribed rule of decision, the law that would be 4 applied by state courts in the State in which the federal diversity 5 court sits.”). 6 federal court judgment or order is resolved according to federal 7 law. 8 at *5 (C.D. Cal.) (citing Younger v. Jensen, 26 Cal. 3d 397, 411 9 (1980) (“A federal judgment has the same effect in the courts of 10 this state as it would have in a federal court.”); see also AT&T 11 Communications-East Inc. v. Central Puget Sound Regional Transit 12 Authority, 2008 WL 2790228, at *6 (W.D. Wash.); Schoenleber v. 13 Harrah’s Laughlin, Inc., 423 F. Supp. 2d 1109, 1111 (D. Nev. 2006). 14 Plaintiffs argue that the Court should analyze under California law 15 the preclusive effect of the previous judgment, but they rely on 16 cases concerning estoppel by a state court judgment or order. 17 present case is distinguishable because Defendants seek to preclude 18 class certification here as estopped by a previous federal court 19 order. 20 be applied to the present case. 21 22 23 24 25 This is, it seems to us, a classic case for adopting, Under California law, the preclusive effect of a Greenwich Ins. Co. v. Media Breakaway, LLC, 2009 WL 2231678, The Therefore, federal law regarding collateral estoppel will Under federal law, collateral estoppel, or issue preclusion, bars re-litigation of issues when: (1) the issue necessarily decided at the previous proceeding is identical to the one which is sought to be relitigated; (2) the first proceeding ended with a final judgment on the merits; and (3) the party against whom collateral estoppel is asserted was a party or in privity with a party at the first proceeding. 26 Reyn’s Pasta Bella, LLC v. Visa USA, Inc., 442 F.3d 741, 746 (9th 27 28 7 1 Cir. 2006). 2 estoppel when its effect would be unfair.” 3 Ass’n v. Am. Cas. Co. of Reading, Pa., 873 F.2d 229, 234 (9th Cir. 4 1989). United States District Court For the Northern District of California 5 However, “it is inappropriate to apply collateral Eureka Fed. Sav. & Loan Plaintiffs dispute that the class certification issues 6 necessarily decided in the previous proceeding are identical to 7 those presently before the Court. 8 to aid in “[d]etermining whether two issues are identical for 9 purposes of collateral estoppel: (1) is there a substantial overlap The Court looks to four factors 10 between the evidence or argument to be advanced in the second 11 proceeding and that advanced in the first? (2) does the new 12 evidence or argument involve the application of the same rule of 13 law as that involved in the prior proceeding? (3) could pretrial 14 preparation and discovery related to the matter presented in the 15 first action reasonably be expected to have embraced the matter 16 sought to be presented in the second? and (4) how closely related 17 are the claims involved in the two proceedings?” 18 Corp. v. Keating, 186 F. 3d 1110, 1116 (9th Cir. 1999) (citations 19 omitted). Resolution Trust 20 Plaintiffs in the present case were included in the putative 21 class in the original 2008 case and they now argue that the “only 22 thing truly different in this case is the putative class (which . . 23 . is substantially different).” 24 original). 25 certifying a very broad class of employees of two companies at 26 several different locations. 27 propose a class definition that does not include the flaws 28 Opposition at 8 (emphasis in The court in the 2008 case focused on the propriety of In the present case, Plaintiffs 8 United States District Court For the Northern District of California 1 identified in the class proposed in the prior lawsuit, which 2 resulted in denial of certification. 3 seek to certify in the present case is quite different than the one 4 the plaintiffs tried to certify in the earlier proceeding. 5 Therefore, although Plaintiffs bring claims against Defendants 6 based on the same substantive law as that raised in the previous 7 case, Defendants have failed to carry their burden to show that the 8 issues they seek to preclude are identical to the issues decided in 9 the previous case. In fact, the class Plaintiffs Therefore, collateral estoppel does not 10 preclude Plaintiffs from alleging their claims on a class basis. 11 Accordingly, the Court denies Defendants’ motion to strike 12 Plaintiffs’ class allegations. 13 Defendants move to strike Plaintiffs’ proposal to extend the 14 class period back to April 25, 2004. 15 class period should begin no earlier than November 17, 2005, four 16 years before the complaint in this case was filed. 17 Purolator Air Filtration Prods. Co., 23 Cal. 4th 163, 178-79 (2000) 18 (applying a four-year statute of limitations to a UCL claim); Cal. 19 Civ. Proc. § 338 (a) (applying three-year statute of limitations 20 for liabilities created by statute, including actions for wages). 21 Plaintiffs rely on American Pipe and Construction Co. v. Utah, 414 22 U.S. 538 (1974), and Crown, Cork & Seal Co. v. Parker, 462 U.S. 345 23 (1983), to argue that the filing of the class action complaint in 24 United Steel tolled their claims in the instant class action. 25 In American Pipe, the Supreme Court held that “the Defendants argue that the See Cortez v. 26 commencement of the original class suit tolls the running of the 27 statute for all purported members of the class who make timely 28 9 United States District Court For the Northern District of California 1 motions to intervene after the court has found the suit 2 inappropriate for class action status.” 3 553. 4 members of the class, not just intervenors. 5 350. 6 applicable statute of limitations for all asserted members of the 7 class who would have been parties had the suit been permitted to 8 continue as a class action until such time as class certification 9 is denied. American Pipe, 414 U.S. at In Crown, the Court extended this holding to all asserted Crown, 462 U.S. at Thus, the commencement of a class action suspends the See Crown, 462 U.S. at 353-54; American Pipe, 414 U.S. 10 at 554. 11 Pipe and Crown to allow an earlier class action to toll the statute 12 of limitations for a subsequently filed class action when 13 plaintiffs are “attempting to relitigate an earlier denial of class 14 certification, or to correct a procedural deficiency in an earlier 15 would-be class.” 16 1139, 1149 (9th Cir. 2000); see also Robbin v. Flour Corp., 835 17 F.2d 213, 214 (9th Cir. 1987). 18 directly to relitigate the same issues addressed in the denial of 19 class certification in the 2008 case. 20 occasion to address the specific causes of action and parties 21 presently before this Court; thus, the Court tolls under American 22 Pipe and Crown the statute of limitations for Plaintiffs’ claims. 23 However, the Ninth Circuit has refused to extend American Catholic Social Services, Inc. v. Reno, 232 F.3d Here, Plaintiffs are not attempting The USW court had no Plaintiffs argue in the alternative that equitable tolling 24 principles apply to their claims. 25 suspend or extend a statute of limitations in order to ensure that 26 a limitations period is not used to bar a claim unfairly.” 27 Hatfield v. Halifax, 564 F.3d 1177, 1185 (9th Cir. 2009). 28 10 Equitable tolling “operates to “Three 1 factors are taken into consideration when deciding whether to apply 2 equitable tolling under California law: (1) timely notice to the 3 defendant in the filing of the first claim; (2) lack of prejudice 4 to the defendant in gathering evidence to defend against the second 5 claim; and (3) good faith and reasonable conduct by the plaintiff 6 in filing the second claim.” 7 Pasadena, 142 Cal. App. 3d 917 (1983). 8 United States District Court For the Northern District of California 9 Id. (citing Collier v. City of The Court concludes that the equitable tolling principles apply to this case. The earlier case, USW, was filed in April, 10 2008 and provided Defendants with timely notice of Plaintiffs’ 11 claims in the present case because the claims in the cases largely 12 overlap. 13 defend against the present case because the present case is 14 narrower than the USW case. 15 exhibited good faith and reasonable conduct by filing the complaint 16 here less than three months after the district court denied class 17 certification in USW. Defendants suffer no prejudice in gathering evidence to Plaintiffs in the present case 18 Moreover, equitable tolling of the statute of limitations in 19 this case is consistent with California’s strong public policy in 20 favor of class actions. 21 equitable tolling after concluding that American Pipe tolling was 22 not available to Plaintiffs. 23 24 25 26 27 28 In Hatfield, the Ninth Circuit applied The court noted, In light of California’s endorsement of class actions generally, we see no reason why, in an equitable tolling situation, California would require each individual California resident who is a member of the Hatfield class to file individually and burden the courts with numerous suits. Thus, every indication is that California would at least apply equitable tolling to claims made by its own residents. Hatfield, 564 F.3d at 1189 (internal citation omitted). 11 1 California’s strong public policy in favor of class actions would 2 be undermined here if Plaintiffs’ claims were circumscribed by the 3 statute of limitations. 4 continuation of the USW case because Plaintiffs have pursued their 5 claims vigorously since the filing of that case in April 25, 2004. 6 Therefore, the Court allows Plaintiffs to pursue the claims of 7 putative class members back to April 25, 2004 and denies 8 Defendants’ motion to strike these allegations. United States District Court For the Northern District of California 9 In many ways, the present case is merely a Defendants also move to strike Plaintiffs’ proposed subclass 10 seeking penalties due under Labor Code section 203 and their 11 reliance on Labor Code sections 201, 202 and 203 as a basis for 12 their unfair competition claim. 13 motion to strike is directed are being dismissed, Defendants’ 14 request is moot, at least for the time being. 15 // 16 // 17 // 18 // 19 // 20 // 21 // 22 // 23 // 24 // 25 // 26 // 27 // 28 Because the claims to which the 12 1 United States District Court For the Northern District of California 2 CONCLUSION For the foregoing reasons, the Court grants Defendants’ motion 3 to dismiss Plaintiffs’ second cause of action (Docket No. 6) and 4 denies Defendants’ motion to strike portions of Plaintiffs’ 5 complaint (Docket No. 7). 6 violations of Labor Code sections 201-203 is also dismissed. 7 Plaintiffs are given leave to amend the complaint to cure the 8 deficiencies in their claims. 9 filed within two weeks from the date of this order. Plaintiffs’ UCL claim based on Any second amended complaint must be If no second 10 amended complaint is filed, Defendants must file an answer to the 11 remaining claims within four weeks from the date of this order. 12 13 IT IS SO ORDERED. Dated: 4/19/10 CLAUDIA WILKEN United States District Judge 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 13
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