rejecting unexplained assumption of five unpaid overtime hours 11 per week”
How later courts described this case
- rejecting unexplained assumption of five unpaid overtime hours 11 per week”
Written by the judges who cited it.
The opinion
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8 United States District Court
9 Central District of California
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11 ANGEL ZAMORA, GABRIEL LOAIZA
Case No. 2:20-cv-02503-ODW (MRWx)
and JORGE GUILLEN, individuals, on
12
behalf of themselves and on behalf of all
ORDER DENYING PLAINTIFFS’
13 persons similarly situated,
MOTION TO REMAND [12],
14 GRANTING IN PART AND
Plaintiffs,
15 DENYING IN PART DEFENDANT’S
v.
MOTION TO DISMISS [11]
16
PENSKE TRUCK LEASING CO., L.P., a
17
Limited Partnership; and DOES 1 through
18 50, inclusive,
19
Defendants.
20
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I. INTRODUCTION
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On January 31, 2020, Plaintiffs Angel Zamora, Gabriel Loaiza, and Jorge Guillen
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(collectively, “Plaintiffs”) filed this class action in Los Angeles Superior Court against
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their employer, Defendant Penske Truck Leasing Co., L.P. (“Penske”). (Notice of
25
Removal (“Notice”), Ex. A (“Compl.”), ECF No. 1-1.) On March 16, 2020, Penske
26
removed this action to federal court pursuant to the Class Action Fairness Act, 28 U.S.C.
27
§§ 1332, 1441, 1446, and 1453 (“CAFA”). (Notice ¶¶ 4–5, ECF No. 1.) Plaintiffs now
28
1 move to remand this action for lack of subject matter jurisdiction. (Mot. to Remand
2 (“MTR”), ECF No. 12.) Additionally, Penske moves to dismiss Plaintiffs’ claims. (See
3 Mot. to Dismiss (“MTD”), ECF No. 11.) For the reasons that follow, this Court
4 DENIES Plaintiffs’ Motion to Remand and GRANTS in part and DENIES in part
5 Penske’s Motion to Dismiss with leave to amend.1
6 II. BACKGROUND
7 Plaintiffs brought this class action against Penske on behalf of themselves and
8 the class they seek to represent. Plaintiffs allege eight claims against Penske: (1) Unfair,
9 Unlawful, and Deceptive Business Practices (“UCL claim”), (2) Failure to Pay
10 Overtime Compensation, (3) Failure to Pay Minimum Wages, (4) Failure to Provide
11 Required Meal Periods, (5) Failure to Provide Required Rest Periods, (6) Failure to
12 Provide Accurate Itemized Statements, (7) Failure to Reimburse Employees for
13 Required Expenses, and (8) Failure to Pay Wages When Due. (See Compl.) Notably,
14 Plaintiffs do not allege a specific number of total violations or a specific amount in total
15 damages. (See Compl., Prayer for Relief.)
16 Penske removed the action to this Court under CAFA and moved to dismiss
17 Plaintiffs’ claims under Federal Rule of Civil Procedure 12(b)(6). (See generally
18 Notice; MTD.) Subsequently, Plaintiffs moved to remand the action on the basis that
19 the aggregate amount in controversy (“AIC”) does not meet the $5 million threshold
20 required by CAFA. (See generally MTR.) Relevantly, along with its Opposition to
21 Plaintiffs’ Motion to Remand, Penske filed a Declaration by Joseph A. Krock, Ph.D. to
22 support its contention that the AIC exceeds $5 million. (Decl. of Joseph A. Krock,
23 Ph.D. (“Krock Decl.”), ECF No. 15-2.) Plaintiffs object to the Krock Declaration and
24 request that it be stricken. (Objs. & Req. to Strike Krock Decl. (“Req. to Strike”), ECF
25 No. 16-1.)
26
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1 After carefully considering the papers filed in connection with the Motion to Remand and Motion to
28 Dismiss, the Court deems the matters appropriate for decision without oral argument. Fed. R. Civ. P.
78; C.D. Cal. L.R. 7-15.
1 III. REQUEST FOR JUDICIAL NOTICE
2 In connection with its Opposition to the Motion to Remand and its Reply in
3 support of its own Motion to Dismiss, Penske requests that the Court take judicial notice
4 of various orders and pleadings from other unrelated cases with similar questions of
5 law. (Req. for Judicial Notice re Opp’n to MTR, ECF No. 15-4; Req. for Judicial Notice
6 re Reply ISO MTD, ECF No. 17-1.) Courts can take judicial notice of “proceedings in
7 other courts, both within and without the federal judicial system, if those proceedings
8 have a direct relation to matters at issue.” United States ex rel. Robinson Rancheria
9 Citizens Counsel v. Borneo, Inc., 971 F.2d 244, 248 (9th Cir. 1992); see Holder v.
10 Holder, 305 F.3d 854, 866 (9th Cir. 2002). However, the Court does not rely on the
11 proffered court documents to resolve the present motions, nor would they affect the
12 outcome. Therefore, the Court DENIES Penske’s requests for judicial notice as moot.
13 IV. PLAINTIFFS’ MOTION TO REMAND
14 First, the Court assesses whether to grant Plaintiffs’ Motion to Remand. The only
15 issue presented here is whether the AIC meets CAFA’s $5 million jurisdictional
16 requirement.2 Penske alleges that the AIC is at least $21,862,122.50. (Opp’n to
17 MTR 23.) Plaintiffs contend that Penske has failed to show by a preponderance of the
18 evidence that the AIC is at least $5 million. (See MTR; Reply ISO MTR.) Notably,
19 however, Plaintiffs do not allege any specific amount for damages.
20 A. Legal Standard
21 Federal courts have subject matter jurisdiction only as authorized by the
22 Constitution and Congress. U.S. Const. art. III, § 2, cl. 1; see also Kokkonen v.
23 Guardian Life Ins. Co., 511 U.S. 375, 377 (1994). Under CAFA, such jurisdiction
24 exists in “mass action” suits if the following requirements are met: (1) 100 or more
25 plaintiffs; (2) common questions of law or fact between plaintiffs’ claims; (3) minimal
26
2 Plaintiffs also argue that Penske’s MTD necessarily relies on an argument that the Court lacks subject
27
matter jurisdiction. (MTR 14–17.) This argument is not persuasive. Penske’s MTD under
28 Rule 12(b)(6) does not appear to challenge Article III standing or any other jurisdictional requirement;
Penske merely argues that allegations regarding the injury were not pled with sufficient detail.
1 diversity, where at least one plaintiff is diverse from one defendant; (4) there is an AIC
2 in excess of $5 million; and (5) at least one plaintiff’s claim exceeding $75,000. 28
3 U.S.C. § 1332(d); Abrego v. Dow Chem. Co., 443 F.3d 676, 689 (9th Cir. 2006).
4 However, “[i]f at any time before final judgment it appears that the district court lacks
5 subject matter jurisdiction [over a case removed from state court], the case shall be
6 remanded.” 28 U.S.C § 1447(c).
7 The first step in determining an AIC is to look to the complaint. Ibarra v.
8 Manheim Invs., Inc., 775 F.3d 1193, 1197 (9th Cir. 2015). “Whether damages are
9 unstated in a complaint, or, in the defendant’s view are understated, the defendant
10 seeking removal bears the burden to show by a preponderance of the evidence that the
11 aggregate amount in controversy exceeds $5 million when federal jurisdiction is
12 challenged.” Id.; but see Dart Cherokee Basin Operating Co., LLC v. Owens, 574
13 U.S. 81, 89 (2014) (“[A] defendant’s notice of removal need include only a plausible
14 allegation that the amount in controversy exceeds the jurisdictional threshold.”). When
15 plaintiffs challenge the AIC asserted by the defendant, “both sides are obligated to
16 submit proof for the court to determine, by a preponderance of the evidence, whether
17 the AIC has been established.” Dart Cherokee, 574 U.S. at 82. Importantly, courts
18 cannot establish jurisdictional determinations on “speculative and self-serving
19 assumptions about key unknown variables” that are not clearly suggested by the
20 pleadings or supported by evidence. Garibay v. Archstone Communities LLC, 539 F.
21 App’x 763, 764 (9th Cir. 2013). The parties may prove the AIC by way of affidavits,
22 declarations, or other summary-judgment type evidence. Ibarra, 775 F.3d at 1197
23 (citing Singer v. State Farm Mut. Auto. Ins. Co., 116 F.3d 373, 377 (9th Cir. 1997));
24 Ray v. Wells Fargo Bank, N.A., No. CV 11-01477 AHM (JCx), 2011 WL 1790123,
25 at *6. (C.D. Cal. May 9, 2011).
26 B. Discussion
27 The Court considers whether Penske has shown by a preponderance of the
28 evidence that the AIC is greater than $5 million.
1 1. Plaintiffs’ Request to Strike the Krock Declaration
2 As a preliminary matter, Plaintiffs ask the Court to strike the Krock Declaration
3 on the grounds that Penske failed to properly designate Dr. Krock as an expert witness
4 and that Plaintiffs did not get the opportunity to cross-examine or otherwise challenge
5 Dr. Krock’s credibility. (Req. to Strike 1.) Plaintiffs also object to the Krock
6 Declaration insofar as the calculations within it rely on assumed violation rates provided
7 to Dr. Krock by Defendant itself. (Req. to Strike 1.)
8 First, Plaintiffs incorrectly conflate the requirements for relying on expert
9 testimony in a trial with the requirements for establishing an AIC for jurisdictional
10 purposes. Plaintiffs rely on Reed v. Sandstone Properties, L.P., No. CV 12-05021
11 MMM (VBKx), 2013 U.S. Dist. LEXIS 51437 (C.D. Cal. Apr. 2, 2013), to argue that
12 Defendant should have adhered to the rules for designating Dr. Krock as an expert
13 witness. (Req. to Strike 1.) But the issue in Reed did not concern the calculation of an
14 AIC; there, the defendants failed to provide a copy of their expert’s report until after the
15 initial expert discovery deadline had passed, and the plaintiff protested. Reed, 2013
16 U.S. Dist. LEXIS 51437, at *9–10. Here, Reed is inapposite because discovery cutoffs
17 are not at issue. Rather, what is significant is that Plaintiffs do not specify an AIC in
18 the Complaint, yet they contest Penske’s estimations. (See generally Compl.; MTR.)
19 Consequently, both Plaintiffs and Penske are “obligated to submit proof for the court to
20 determine, by a preponderance of the evidence, whether the AIC has been established.”
21 Dart Cherokee, 574 U.S. at 82. And for the limited purpose of attempting to prove the
22 AIC, Penske’s reliance on the Krock Declaration is procedurally proper. See Ibarra,
23 775 F.3d at 1197; Ray, 2011 WL 1790123, at *6.
24 Second, Plaintiffs’ foundational objections are unconvincing. Dr. Krock, an
25 economist and consultant, leads the “Economic Consulting Practice” of the consulting
26 firm for which he works. (Krock Decl. ¶¶ 1, 3.) Dr. Krock holds master and doctorate
27 degrees in economics from the University of Chicago and a bachelor’s degree in
28 economics-mathematics from the University of California, Santa Barbara, and he has
1 over nineteen years of experience in calculating liability and damages in wage and hour
2 class action lawsuits. (Krock Decl. ¶¶ 2, 4.) Dr. Krock also declared that to calculate
3 the AIC, he was provided with Penske’s weekly payroll data, daily hours worked data,
4 and termination data for the period from 2016 to 2020. (Krock Decl. ¶ 9.) Based on
5 these declarations, the Court finds that Dr. Krock has established sufficient foundation
6 for his testimony. He is an experienced and credentialed economist who specializes in
7 applying advanced statistical techniques to labor and employment litigation matters,
8 and he was provided the relevant data in relation to this case. Penske may rely on the
9 Krock Declaration to attempt to establish the AIC. See, e.g., Elizarraz v. United
10 Rentals, Inc., Case No. 2:18-CV-09533-ODW (JCx), 2019 WL 1553664, at *3–4 (C.D.
11 Cal. Apr. 9, 2019) (finding defendants’ AIC calculations supported by similar
12 declaration calculations).
13 Notwithstanding the above, Plaintiffs correctly note that the calculations set forth
14 in the Krock Declaration are based on assumed violation rates. (See Req. to Strike;
15 Reply ISO MTR.) And as explained below, assumed violation rates must be reasonable
16 for the calculations to be credible. However, not all assumed violation rates are per se
17 unreasonable, nor is the fact that the Krock Declaration relies on assumed violation rates
18 a basis for striking it from the record. Accordingly, Plaintiffs’ objections are
19 OVERRULED, and their request to strike the Krock Declaration is DENIED.
20 2. Penske’s 10% Violation Rates Are Reasonable
21 Plaintiffs argue that Penske’s claimed AIC relies on the assumption of
22 “completely arbitrary and unsubstantiated violation rates . . . .” (Reply ISO MTR 4.)
23 In wage-and-hour cases such as this one, “violation rates are key to the calculations
24 necessary to reach the [$5 million] amount-in-controversy figure CAFA requires.”
25 Toribio v. ITT Aerospace Controls LLC, No. 19-CV-5430-GW (JPRx), 2019 WL
26 4254935, at *2 (C.D. Cal. Sept. 5, 2019). A defendant attempting to establish an AIC
27
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1 by a preponderance of the evidence may do so by assuming the frequencies of
2 violations, but those assumptions must be reasonable. See Ibarra, 775 F.3d at 1199.
3 In determining the reasonableness of an assumed violation rate, “the Ninth
4 Circuit distinguishes between complaints of ‘uniform’ violations and those alleging a
5 ‘pattern and practice’ of labor law violations.” Dobbs v. Wood Grp. PSN, Inc., 201 F.
6 Supp. 3d 1184, 1188 (E.D. Cal. 2016) (citing La Cross v. Knight Trans. Inc., 775
7 F.3d 1200, 1202 (9th Cir. 2015)). When a complaint alleges “uniform” violations, it
8 might be reasonable to assume a 100% violation rate if “the plaintiff offers no
9 competent evidence in rebuttal.” Dobbs, 201 F. Supp. 3d at 1188. But when a
10 complaint alleges a “pattern and practice” of labor law violations, a 100% violation rate
11 is unreasonable; the assumed violation rate must be lower. See Id.; Ibarra, 775 F.3d at
12 1198–99 (“[A] ‘pattern and practice’ of doing something does not necessarily mean
13 always doing something.” (emphasis in original)). For instance, numerous courts have
14 found violation rates between 25% to 60% to be reasonable based on “pattern and
15 practice” and “policy and practice” allegations. Castillo v. Trinity Servs. Grp., Inc.,
16 No. 1:19-cv-01013 DAD (EPGx), 2020 WL 3819415, at *7 (E.D. Cal. July 8, 2020)
17 (citing cases); see, e.g., Elizarraz, 2019 WL 1553664, at *3–4 (finding a 50% violation
18 rate for missed meal periods and a 25% violation rate for missed rest periods reasonable
19 based on “pattern and practice” allegations); Oda v. Gucci Am., Inc., Nos. 2:14-CV-
20 7468-SVW (JPRx), 2015 WL 93335, at *5 (C.D. Cal. Jan. 7, 2015) (finding a 50%
21 violation rate reasonable based on “pattern and practice” allegations).
22 Here, Plaintiffs repeatedly allege in their Complaint that Penske engaged in a
23 “policy and practice” of various labor law violations. (See Compl. ¶¶ 7, 11, 13, 19, 26,
24 28(a), 28(b), 29(c), 30(b)(1), 40(c), 48, 50, 64, 65, 72, 80, 81, 86, 90.) Based on
25 Plaintiffs’ use of “policy and practice” language, Penske contends that the amounts in
26 controversy for Plaintiffs’ missed meal period claims, missed rest break claims, and
27 unpaid overtime claims equal $2,718,313, $2,751,122, and $2,057,665, respectively.
28 (Opp’n to MTR 6, 11.) These calculations rely on assumed violation rates of 10% each.
1 (See Krock Decl. ¶¶ 23–35.) As explained above, numerous courts have found violation
2 rates as high as 60% to be reasonable to calculate the amount in controversy when
3 allegations represent a “pattern and practice” or “policy and practice” of labor law
4 violations. A 10% violation rate is noticeably more conservative than what is often
5 accepted as reasonable. Since these claims alone put the AIC over the jurisdictional
6 threshold the Court declines to analyze whether the remainder of Plaintiffs’ claims
7 satisfy the AIC.
8 Notwithstanding their “policy and practice” allegations, Plaintiffs point to their
9 use of “from time to time” language in the Complaint to argue that even 10% violation
10 rates are unreasonable. (Reply ISO MTR 3–7.) But Plaintiffs fail to explain why their
11 use of “from time to time” language should trump their use of “policy and practice”
12 language in the Complaint. Moreover, the numerous cases Plaintiffs cite do not support
13 their position. For instance, Rivers, Cummings, and Sanders teach that allegations based
14 on “from time to time” language, without more, do not justify assuming a 100%
15 violation rate. See, Rivers v. Veolia Transp. Servs., No. 14-CV-2594 YGR, 2014 U.S.
16 Dist. LEXIS 111705, at *12 (N.D. Cal. Aug. 11, 2014); Cummings v. G6 Hospitality,
17 LLC, No. 19-CV-00122-GPC-LL, 2019 U.S. Dist. LEXIS 56719, at *10 (S.D. Cal. Apr.
18 2, 2019); Sanders v. Old Dominion Freight Line, Inc., No. 16-CV-2837-CAB-NLS,
19 2017 U.S. Dist. LEXIS 15936, at *13–14 (S.D. Cal. Feb. 2, 2017). This proposition is
20 unhelpful for Plaintiffs here, where Penske has assumed 10%—not 100%—violation
21 rates with respect to Plaintiffs’ meal period, rest break, and overtime claims.
22 Similarly, Rodriguez, Salazar, and Brown did not involve “policy and practice”
23 allegations. See Rodriguez v. Circle K Stores Inc., No. ED CV 19-0469 FMO (SPx),
24 2019 U.S. Dist. LEXIS 115701 (C.D. Cal. July 11, 2019) (analyzing a complaint that
25 only alleged meal and rest break violations “from time to time”); Salazar v. Johnson &
26 Johnson Consumer Inc., No. 2:18-CV-05884-SJO-E, 2018 U.S. Dist. LEXIS 161293,
27 at *13 (C.D. Cal. Sept. 19, 2018) (rejecting the assumption of a 20% violation rate
28 where the only allegations were of “periodic” violations); Brown v. United Airlines,
1 Inc., No. 19cv537-MMA (JLB), 2019 U.S. Dist. LEXIS 113854 (rejecting assumed
2 violation rate of missed meal periods and rest breaks where the only allegation was that
3 violations occurred “from time to time”). Thus, these cases are distinguishable on their
4 facts from the present action.
5 Perez, Gonzalez and Rodriguez teach that assumed violation rates must be
6 “grounded in specific facts regarding [the] Plaintiff’s work schedule and salary.” See
7 Perez v. WinnCompanies, Inc., No. 1:14-cv-01497 LJO (JLTx), 2014 U.S. Dist. LEXIS
8 158748, at *11 (E.D. Cal. Nov. 10, 2014) (alteration in original) (quoting Patel v. Nike
9 Retail Servs., No. 14-cv-00851-JST, 2014 U.S. Dist. LEXIS 98918, at *13–22 (N.D.
10 Cal. July 21, 2014) (rejecting unexplained assumption of five unpaid overtime hours
11 per week”); Gonzalez v. Hub Int’l Midwest Ltd., No. ED CV 19-557 PA (ASx), 2019
12 U.S. Dist. LEXIS 79672, at *8–13 (C.D. Cal. May 10, 2019) (rejecting unexplained
13 violation rates of five overtime hours, three missed meal periods, and three missed rest
14 periods per week); Rodriguez, 2019 U.S. Dist. LEXIS 115701, at *9 (finding a violation
15 rate of one missed meal period and one missed rest break per week unsupported by any
16 facts). However, these cases do not change the outcome here because Penske’s assumed
17 violation rates are grounded in specific facts regarding the Plaintiffs’ work schedules
18 and salaries. Rather than assuming per-week violation rates without discussing any
19 other facts to support the inference that such assumptions are reasonable, Dr. Krock’s
20 Declaration explains how his calculations took into account the frequencies at which
21 employees earned the right to meal periods, rest breaks, and overtime pay, and in all
22 cases “utilized each employee’s lowest hourly wage rate to determine the value” of the
23 claims. (Krock Decl. ¶¶ 23–35.) Although Penske’s assessments of the AIC “may
24 require a chain of reasoning that requires assumptions,” these numbers do not appear to
25 have been “pulled from thin air.” Ibarra, 775 F.3d at 1199.
26 Ultimately, Plaintiffs do not allege any specific AIC, either in the Complaint or
27 otherwise. They simply argue that Penske has failed to prove the AIC by a
28 preponderance of the evidence because Penske’s assumed violation rates are
1 unreasonable. However, Penske’s assumed violation rate of 10% is reasonable in light
2 of Plaintiffs’ allegations that Penske engaged in a “policy and practice” of various labor
3 law violations, and the evidence submitted, calculating the amount in controversy using
4 figures reasonably grounded in specific facts regarding the employees’ work schedules
5 and salaries. Thus, the Court finds that Penske has shown by a preponderance of the
6 evidence that the AIC exceeds $5 million. Since these claims alone put the AIC over
7 the jurisdictional threshold, the Court declines to analyze whether the remainder of
8 Plaintiffs’ claims satisfy the AIC. As all other jurisdictional requirements are satisfied,
9 the Court DENIES Plaintiffs’ Motion to Remand. (ECF No. 12.)
10 V. PENSKE’S MOTION TO DISMISS
11 Having denied Plaintiffs’ Motion to Remand, the Court now turns to Penske’s
12 Motion to Dismiss. Penske moves to dismiss claims one through eight of the Complaint
13 and Plaintiffs’ class allegations on the grounds that Plaintiffs fail to state a claim upon
14 which relief can be granted. (See generally MTD.)
15 A. Legal Standard
16 Dismissal under Rule 12(b)(6) “can be based on the lack of a cognizable legal
17 theory or the absence of sufficient facts alleged under a cognizable legal theory.”
18 Balistreri v. Pacifica Police Dep’t, 901 F.2d 696, 699 (9th Cir. 1990). “To survive a
19 motion to dismiss . . . under Rule 12(b)(6), a complaint generally must satisfy only the
20 minimal notice pleading requirements of Rule 8(a)(2)”—a short and plain statement of
21 the claim. Porter v. Jones, 319 F.3d 483, 494 (9th Cir. 2003); see also Fed. R. Civ.
22 P. 8(a)(2). The “[f]actual allegations must be enough to raise a right to relief above the
23 speculative level.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). The
24 “complaint must contain sufficient factual matter, accepted as true, to state a claim to
25 relief that is plausible on its face.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (internal
26 quotation marks omitted). “A pleading that offers ‘labels and conclusions’ or ‘a
27 formulaic recitation of the elements of a cause of action will not do.’” Id. (citing
28 Twombly, 550 U.S. at 555). Whether a complaint satisfies the plausibility standard is
1 “a context-specific task that requires the reviewing court to draw on its judicial
2 experience and common sense.” Id. at 679. A court is generally limited to the pleadings
3 and must construe “[a]ll factual allegations set forth in the complaint . . . as true
4 and . . . in the light most favorable to [the plaintiff].” Lee v. City of Los Angeles, 250
5 F.3d 668, 688 (9th Cir. 2001) (internal quotation marks omitted). But a court need not
6 blindly accept conclusory allegations, unwarranted deductions of fact, or unreasonable
7 inferences. Sprewell v. Golden State Warriors, 266 F.3d 979, 988 (9th Cir. 2001).
8 As a general rule, a court should freely give leave to amend a complaint that has
9 been dismissed unless it is clear the complaint could not be saved by any amendment.
10 See Fed. R. Civ. P. 15(a); Manzarek v. St. Paul Fire & Marine Ins. Co., 519 F.3d 1025,
11 1031 (9th Cir. 2008). Leave to amend may be denied when “the court determines that
12 the allegation of other facts consistent with the challenged pleading could not possibly
13 cure the deficiency” or, in other words, if amendment would be futile. Schreiber
14 Distrib. Co. v. Serv-Well Furniture Co., 806 F.2d 1393, 1401 (9th Cir. 1986); Carrico
15 v. City of San Francisco, 656 F.3d 1002, 1008 (9th Cir. 2011).
16 B. Discussion – Motion to Dismiss
17 Penske’s primary argument is that Plaintiffs fail to allege any facts in support of
18 their claims. (MTD 2.) The Court addresses each claim below.
19 1. Unpaid Overtime, Minimum Wage, Meal Period, and Rest Break Claims
20 (Claims 2–5)
21 Penske urges that Plaintiffs’ second, third, fourth, and fifth claims, based on
22 failure to pay overtime and minimum wages and failure to provide meal periods and
23 rest breaks, do not meet the pleading standard established in Landers v. Quality
24 Communications, Inc., 771 F.3d 638 (9th Cir. 2014). (MTD 8–13.) Penske is correct.
25 “Under Landers, in order to sufficiently state claims for violations of the
26 California Labor Code, a plaintiff must, at a minimum, ‘be able to allege facts
27 demonstrating that there was at least one workweek’ or one specific instance in which
28 the defendant violated the plaintiff’s rights under the California Labor Code.” Johnson
1 v. Winco Foods, LLC, ED CV 17-2288 DOC (SHKx), 2018 WL 6017012, at *5 (C.D.
2 Cal. Apr. 2, 2018) (quoting Landers, 771 F.3d at 646); see also Boyack v. Regis Corp.,
3 No. 19-55279, 2020 WL 2111464, at *1 (9th Cir. May 4, 2020) (affirming the district
4 court’s dismissal of plaintiffs’ overtime and minimum wage claims when plaintiffs’
5 complaint failed to allege a workweek in which they worked overtime and were not
6 compensated). “[M]ere conclusory allegations that class members ‘regularly’ or
7 ‘regularly and consistently’ worked more than 40 hours per week—without any further
8 detail—fall short of Twombly/Iqbal.” Tan v. GrubHub, Inc., 171 F. Supp. 3d 998, 1007
9 (N.D. Cal. 2016) (citing Landers, 771 F.3d at 646; Perez v. Wells Fargo & Co., 75 F.
10 Supp. 3d 1184, 1191 (N.D. Cal. 2014). Similarly, absent an allegation of “at least one
11 meal or rest break where [a plaintiff] worked through the break and was not paid for
12 that time” or “a given instance where [d]efendant failed to provide him a meal or rest
13 break in compliance with state law,” a claim based on the defendant’s failure to provide
14 such meal or rest breaks does not meet the Twombly/Iqbal standard. Freeman v. Zillow,
15 Inc., No. SACV 14-01843-JLS (RNBx), 2015 WL 5179511, at *5 (C.D. Cal. Mar. 19,
16 2015).
17 Here, Plaintiffs’ second through fifth claims fall well within the scope of what
18 Landers and other cases have shown to be insufficient. (See Compl. ¶¶ 59–73, 76–87,
19 90–91, 94–95.) Plaintiffs include no relevant facts or dates during which these alleged
20 violations occurred, and instead merely recite the statutory language in conclusory
21 manners. (Compare, e.g., Compl. ¶ 65 (stating that Penske implemented a policy and
22 practice “that denied accurate compensation to Plaintiffs . . . for all overtime worked,
23 including the work in excess of eight (8) hours in a workday and/or forty (40) hours in
24 any workweek”), with Cal. Lab. Code § 510 (“[A]ny work in excess of eight hours in
25 one workday and any work in excess of 40 hours in any one workweek . . . shall be
26 compensated at the rate of no less than one and one-half times the regular rate of pay
27 for an employee.”).) All of Plaintiffs’ allegations with respect to these claims read the
28 same way. As illustrated by the cases cited above, such conclusory claims “without
1 factual allegations about Plaintiffs’ specific experiences . . . are merely ‘conceivable,’
2 not ‘plausible.’” Santorio v. Tesoro Refin. & Mktg. Co., LLC, No. CV 17-1554-MWF
3 (RAOx), 2017 WL 1520416, at *6 (C.D. Cal. Apr. 26, 2017).
4 Accordingly, the Court DISMISSES Plaintiffs’ second, third, fourth, and fifth
5 claims with leave to amend.
6 2. Itemized Wage Statements and Failure to Pay Wages at Termination
7 (Claims 6 and 8)
8 Plaintiffs’ sixth and eighth claims for failure to provide accurate itemized wage
9 statements and failure to pay wages upon termination are derivative of Plaintiffs’ second
10 through fifth claims. Specifically, Plaintiffs allege that Penske “fails to provide
11 PLAINTIFFS . . . with complete and accurate wage statements which failed to show,
12 among other things, the correct gross and net wages earned and correct amount of time
13 worked,” (Compl. ¶ 99), and that “[t]he employment of Plaintiff[s] . . . has terminated
14 and DEFENDANT has not tendered payment of wages, to these employees who missed
15 meal and rest breaks,” (Compl. ¶ 110.).
16 Plaintiffs’ sixth and eighth claims are dependent on claims that this Court
17 dismissed above. Thus, the Court DISMISSES Plaintiffs’ sixth and eighth claims with
18 leave to amend. See Ortiz v. Amazon.com LLC, No. 17-CV-03820-JSW, 2017 WL
19 11093812, at *5 (N.D. Cal. Oct. 10, 2017) (dismissing plaintiff’s claims for inaccurate
20 wage statements and failure to pay wages upon termination because they were
21 derivative of dismissed overtime and meal and rest period claims); Johnson, 2018 WL
22 6017012, at *17 (dismissing similar claims because they were derivative of dismissed
23 claims for unpaid overtime, minimum wage, and meal and rest break premiums).
24 3. Failure to Reimburse Business Expenses (Claim 7)
25 Penske argues that Plaintiffs’ seventh claim, failure to reimburse business
26 expenses, does not provide any plausible factual basis upon which relief can be granted
27 because Plaintiffs “do not identify what type of items should be reimbursed . . . or why
28 such items were appropriate for reimbursement.” (MTD 6 (emphasis added).)
1 Plaintiffs respond that Penske’s argument overlooks certain of Plaintiffs’ allegations.
2 (Opp’n to MTD 13.) Plaintiffs are correct.
3 As Penske appears to concede, an allegation for failure to reimburse necessary
4 business expenses is generally sufficient if it at least identifies the type of necessary
5 business expenses that were not reimbursed. (See MTD 6.) See, e.g., Saunders v.
6 Ameriprise Fin. Servs., Inc., No. CV 18-10668-MWF (AFMx), 2019 WL 4344296,
7 at *5 (C.D. Cal. Mar. 19, 2019) (denying motion to dismiss claim that plaintiffs “utilized
8 their own monies for necessary expenditures incurred in the discharge of [their] duties,
9 including . . . the costs of the wages of support staff, the costs associated with internal
10 referrals of business, and ordinary business expenses” (bracketed alteration in
11 original)); Dawson v. Hitco Carbon Composites, Inc., No. CV16-7337 PSG (FFMx),
12 2017 WL 7806358, at *6 (C.D. Cal. May 5, 2017) (denying motion to dismiss claim
13 that the defendant failed to reimburse “the use of personal phones for business-related
14 purposes and costs incurred to comply with [d]efendants’ dress code, including the costs
15 of purchasing protective footwear”).
16 Here, Plaintiffs allege that they “are required by [Penske] to purchase and supply
17 their own tools and equipment that are necessary to perform services as auto technicians
18 for [Penske].” (Compl. ¶ 102.) They further allege that Penske “requires [Plaintiffs] to
19 supply their own tools and equipment to perform services for [Penske] but fails to
20 reimburse for such expenses, or, in the alternative, pay [Plaintiffs] at least two time [sic]
21 the minimum wage.” (Compl. ¶ 102.) Although Plaintiffs do not list every tool or piece
22 of equipment necessary to perform their job, they sufficiently allege a plausible claim
23 for relief. Thus, the Court DENIES Penske’s Motion to Dismiss as to Plaintiffs’
24 seventh claim.
25 4. UCL Claim (Claim 1)
26 Penske moves to dismiss Plaintiffs’ UCL claim on the ground that it is “entirely
27 derivative of their faulty meal period, rest break, unpaid wage, and failure to reimburse
28 business expenses claims.” (MTD 14–15.) It is true that Plaintiffs’ UCL claim is
1 derivative of other claims, and to the extent those other claims are dismissed, the
2 derivative UCL claim also fails. See, e.g., Estrada v. Kaiser Found. Hosps., 678 Fed.
3 App’x 494, 497 (9th Cir. 2017); Ortiz, 2017 WL 11093812, at *5. However, Plaintiffs’
4 UCL claim is also derivative of their failure to reimburse business expenses claim,
5 which is sufficiently pled. Accordingly, the Court DISMISSES Plaintiffs’ first claim
6 with leave to amend insofar as it relies on the allegations dismissed above, but the
7 Court otherwise DENIES Penske’s Motion to Dismiss with respect to this claim. See
8 Johnson, 2018 WL 6017012, at *20.
9 5. Class Allegations
10 Penske urges the Court to dismiss Plaintiffs’ class allegations under
11 Rule 12(b)(6) by pointing out that “courts may address the adequacy of class action
12 allegations under Iqbal and Twombly on a motion to dismiss.” (MTD 15.) However,
13 the Ninth Circuit has yet to adopt this theory of class action pleading, and other courts
14 have expressly disagreed with it. See, e.g., Morelli v. Corizon Health, Inc., No. CV 18-
15 01395-LJO (SABx), 2019 WL 918210, at *13 (E.D. Cal. Feb. 25, 2019) (“Because class
16 actions are procedural devices and not claims for relief under Rule 8, it is incongruent
17 to impose a Rule 8 pleading standard to the elements of class certification such as
18 commonality or typicality.”); Meyer v. Nat’l Tenant Network, Inc., 10 F. Supp. 3d.
19 1096, 1104 (N.D. Cal. 2014) (denying motion to dismiss class claims because “such
20 arguments are more appropriately addressed through Rule 23 for procedural reasons”);
21 Moreno v. Baca, No. CV 00-7149-ABC (CWx), 2000 WL 33356835, at *2. (C.D. Cal.
22 Oct. 13, 2000) (“Generally, the Court reviews the class allegations through a motion for
23 class certification.”). Indeed, an order striking class allegations is functionally
24 equivalent to an order denying class certification. Microsoft v. Baker, 137 S. Ct. 1702,
25 1711 n.7 (2017). The Court chooses not to resolve the question of class certification at
26 this juncture. Accordingly, the Court DENIES Penske’s Motion to Dismiss as to
27 Plaintiffs’ class allegations.
28
1] VI. CONCLUSION
2 In summary, the Court DENIES Plaintiffs’ Motion to Remand (ECF No. 12) and
3 | GRANTS in part and DENIES in part Penske’s Motion to Dismiss (ECF No. 11), as
4 | detailed above.
5
6 IT ISSO ORDERED.
7
8 August 17, 2020
9
10 GA j Wied
ll OTIS D. WRIGHT, II
UNITED STATES DISTRICT JUDGE
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