Genaro Juarez v. Calmet Services, Inc.

UNITED STATES DISTRICT COURT

CENTRAL DISTRICT OF CALIFORNIA

CIVIL MINUTES - GENERAL

Case No. CV 21-8922 PA (RAOx) Date December 7, 2021

Title Genaro Juarez v. Calmet Services, Inc., et al.

Present: The Honorable PERCY ANDERSON, UNITED STATES DISTRICT JUDGE

Kamilla Sali-Suleyman Not Reported N/A

Deputy Clerk Court Reporter Tape No.

Attorneys Present for Plaintiffs: Attorneys Present for Defendants:

None None

Proceedings: IN CHAMBERS - COURT ORDER

Before the Court is a Motion to Remand filed by plaintiff Genaro Juarez (“Plaintiff”)

(Docket No. 11). Plaintiff challenges the propriety of the Notice of Removal filed by defendants

Calmet Services, Inc. and Calmet Properties, LLC (“Defendants”). Pursuant to Rule 78 of the

Federal Rules of Civil Procedure and Local Rule 7-15, the Court finds that this matter is

appropriate for decision without oral argument. The hearing calendared for December 20, 2021,

is vacated, and the matter taken off calendar.

I. Factual and Procedural Background

Plaintiff filed his Complaint in Los Angeles Superior Court on September 12, 2021. The

Complaint alleges wage and hour claims on behalf of Plaintiff and a putative class of

Defendants’ employees for: (1) failure to pay overtime wages pursuant to California Labor

Code sections 510, 1194, and 1199; (2) failure to pay minimum wages pursuant to California

Labor Code sections 1197 and 1199; (3) failure to provide meal periods pursuant to California

Labor Code section 512; (4) failure to provide rest periods pursuant to California Labor Code

section 226.7; (5) failure to pay wages upon termination in violation of California Labor Code

sections 201, 202, and 203; (6) failure to provide accurate wage statements pursuant to

California Labor Code section 226; (7) failure to timely pay wages pursuant to California Labor

Code section 204; (8) failure to pay vacation time pursuant to California Labor Code section

227.3; and (9) unfair business practices pursuant to California Business and Professions Code

section 17200.

Defendants filed their Notice of Removal on November 12, 2021. In their Notice of

Removal, Defendants asserted that the Court possesses federal question jurisdiction pursuant to

28 U.S.C. § 1331 over the action because at least some of the claims in Plaintiff's Complaint are

completely preempted by section 301 of the Labor Management Relations Act (the “LMRA”),

29 U.S.C. § 185, because Plaintiff and the class he seeks to represent were covered by a

collective bargaining agreement (“CBA”), which meets the requirements for exemptions under

UNITED STATES DISTRICT COURT

CENTRAL DISTRICT OF CALIFORNIA

CIVIL MINUTES - GENERAL

Case No. CV 21-8922 PA (RAOx) Date December 7, 2021

Title Genaro Juarez v. Calmet Services, Inc., et al.

state law such that certain of Plaintiff's claims arise under the CBA rather than state law.

Plaintiff's Motion to Remand contends that all of Plaintiff's claims arise under state law and that

it is not necessary to interpret the terms of the CBA. Therefore, according to Plaintiff, none of

the claims alleged in the Complaint are preempted by section 301 of the LMRA and the Court

lacks subject matter jurisdiction over this action.

II. Analysis

Federal courts are courts of limited jurisdiction, having subject matter jurisdiction only

over matters authorized by the Constitution and Congress. See Kokkonen v. Guardian Life Ins.

Co., 511 U.S. 375, 377, 114 S. Ct. 1673, 128 L. Ed. 2d 391 (1994). A suit filed in state court

may be removed to federal court if the federal court would have had original jurisdiction over

the suit. 28 U.S.C. § 1441(a). A removed action must be remanded to state court if the federal

court lacks subject matter jurisdiction. Id. § 1447(c). “The burden of establishing federal

jurisdiction is on the party seeking removal, and the removal statute is strictly construed against

removal jurisdiction.” Prize Frize, Inc. v. Matrix (U.S.) Inc., 167 F.3d 1261, 1265 (9th Cir.

1999). “Federal jurisdiction must be rejected if there is any doubt as to the right of removal in

the first instance.” Gaus v. Miles, Inc., 980 F.2d 564, 566 (9th Cir. 1992).

Under 28 U.S.C. § 1331, this Court has original jurisdiction over civil actions “arising

under” federal law. Removal based on § 1331 1s governed by the “well-pleaded complaint” rule.

Caterpillar, Inc. v. Williams, 482 U.S. 386, 392, 107 S. Ct. 2425, 96 L. Ed. 2d 318 (1987).

Under the rule, “federal jurisdiction exists only when a federal question is presented on the face

of a plaintiff's properly pleaded complaint.” Id. at 392. If the complaint does not specify

whether a claim is based on federal or state law, it is a claim “arising under” federal law only if

it is “clear” that it raises a federal question. Duncan v. Stuetzle, 76 F.3d 1480, 1485 (9th Cir.

1996). Thus, the plaintiff is generally the “master of the claim.” Caterpillar, 482 U.S. at 392.

There is no federal question jurisdiction simply because there is a federal defense to the claim.

Id. The only exception to this rule is where a plaintiffs federal claim has been disguised by

“artful pleading,” such as where the only claim is a federal one or is a state claim preempted by

federal law. Sullivan v. First Affiliated Sec., Inc., 813 F.2d 1368, 1372 (9th Cir. 1987).

Here, Defendants contend that the Court has federal question jurisdiction because, at a

minimum, the Complaint’s first, third, and eighth claims arise under section 301 of the LMRA,

and that the remaining claims are either derivative of those claims or the Court possesses

supplemental jurisdiction over them pursuant to 28 U.S.C. § 1367. Section 301 of LMRA states

that “[s]uits for violation of contracts between an employer and a labor organization representing

employees .. . may be brought in any district court of the United States having jurisdiction of the

UNITED STATES DISTRICT COURT

CENTRAL DISTRICT OF CALIFORNIA

CIVIL MINUTES - GENERAL

Case No. CV 21-8922 PA (RAOx) Date December 7, 2021

Title Genaro Juarez v. Calmet Services, Inc., et al.

parties... 29 U.S.C. § 185(a). The Supreme Court has interpreted section 301 to require

claims “alleging a violation of a provision of a labor contract [to] be brought under § 301 and be

resolved by reference to federal law.” Allis-Chalmers Corp. v. Lueck, 471 U.S. 202, 210, 105 S.

Ct. 1904, 85 L. Ed. 2d 206 (1985). This preemption of state claims “extend[s] beyond suits

alleging contract violations” to those requiring interpretation of the provisions of labor

agreements:

[Q]uestions relating to what the parties to a labor agreement agreed,

and what legal consequences were intended to flow from breaches of

that agreement, must be resolved by references to uniform federal

law, whether such questions arise in the context of a suit for breach

of contract or in a suit alleging liability in tort. Any other result

would elevate form over substance and allow parties to evade the

requirements of § 301 by relabeling their contract claims as claims

for tortious breach of contract.

Id. at 210-11. However, the scope of section 301 preemption is not absolute:

[N]ot every dispute concerning employment, or tangentially

involving a provision of a collective-bargaining agreement, is

pre-empted by § 301 other provisions of the federal labor

law.... Clearly, § 301 does not grant the parties to a

collective-bargaining agreement the ability to contract for what is

illegal under state law. In extending the pre-emptive effect of § 301

beyond suits for breach of contract, it would be inconsistent with

congressional intent under that section to preempt state rules that

proscribe conduct, or establish rights and obligations, independent of

a labor contract.

Id. at 211-12. “In order to help preserve state authority in areas involving minimum labor

standards, the Supreme Court has distinguished between claims that require interpretation or

construction of a labor agreement and those that require a court simply to ‘look at’ the

agreement.” Balcorta v. Twentieth Century-Fox Film Corp., 208 F.3d 1102, 1108 (9th Cir.

2000) (citing Livadas v. Bradshaw, 512 U.S. 107, 123-26, 114 S. Ct. 2068, 129 L. Ed. 2d 93

(1994)). In particular, “when the meaning of contract terms is not subject to dispute, the bare

fact that a collective-bargaining agreement will be consulted in the course of state-law litigation

plainly does not require the claim to be extinguished.” Livadas, 512 U.S. at 124 (citing Lingle v.

UNITED STATES DISTRICT COURT

CENTRAL DISTRICT OF CALIFORNIA

CIVIL MINUTES - GENERAL

Case No. CV 21-8922 PA (RAOx) Date December 7, 2021

Title Genaro Juarez v. Calmet Services, Inc., et al.

Norge Div. of Magic Chef, Inc., 486 U.S. 399, 413 n.12, 108 S. Ct. 1877, 100 L. Ed. 2d 410

(1988)).

“TE]|ven if dispute resolution pursuant to a collective-bargaining agreement, on one hand,

and state law, on the other, would require addressing precisely the same set of facts, as long as

the state-law claim can be resolved without interpreting the agreement itself, the claim is

‘independent’ of the agreement for § 301 preemption purposes.” Lingle, 486 U.S. at 409-10.

Accordingly, preemption under section 301 requires a two-step analysis. Alaska Airlines Inc. v.

Schurke, 898 F.3d 904, 920-22 (9th Cir. 2018) (en banc); Burnside v. Kiewit Pac. Corp., 491

F.3d 1053, 1059-60 (9th Cir. 2007).

Assessing whether a claim is preempted by section 301 is a two-step process. First, the

Court must determine “whether the asserted cause of action involves a right conferred upon an

employee by virtue of state law, not by a CBA.” Burnside, 491 F.3d at 1059. “Ifa claim arises

entirely from a right or duty of the CBA—for example, a claim for violation of the labor

agreement, whether sounding in contract or in tort—t 1s, in effect, a CBA dispute in state law

garb, and is preempted. In such cases, the CBA 1s the ‘only source’ of the right the plaintiff

seeks to vindicate.” Alaska Airlines, 898 F.3d at 921 (footnote, citations, and internal quotation

marks omitted). “[C]laims are not simply CBA disputes by another name, and so are not

preempted under this first step, if they just refer to a CBA-defined right; rely in part on a CBA’s

terms of employment; run parallel to a CBA violation; or invite use of the CBA as a defense.”

Id. (citations omitted).

If the right asserted by the plaintiff is conferred by state law, the Court proceeds to the

second step, in which it must determine whether the plaintiffs claim is nevertheless

“substantially dependent on analysis of a collective bargaining agreement.” Burnside, 491 F.3d

at 1059 (quoting Caterpillar, 482 U.S. at 394). If the claim requires the court to “interpret,”

rather than merely “look to,” the collective bargaining agreement, then the claim is substantially

dependent thereon and is preempted by section 301. Id. at 1060. “The plaintiff’s claim is the

touchstone for this analysis; the need to interpret the collective bargaining agreement must

inhere in the nature of the plaintiff's claim.” Detabali v. St. Luke’s Hosp., 482 F.3d 1199, 1203

(9th Cir. 2007) (alteration omitted) (quoting Cramer v. Consol. Freightways, Inc., 255 F.3d 683,

691 (9th Cir. 2001) (en banc))). “[It is not] enough that resolving the state law claim requires a

court to refer to the CBA and apply its plain or undisputed language—for example, to discern

that none of its terms is reasonably in dispute; to identify bargained-for wage rates in computing

a penalty; or to determine whether the CBA contains a clear and unmistakable waiver of state

law rights.” Alaska Airlines, 898 F.3d at 921-22 (alterations, citations, and internal quotation

marks omitted).

UNITED STATES DISTRICT COURT

CENTRAL DISTRICT OF CALIFORNIA

CIVIL MINUTES - GENERAL

Case No. CV 21-8922 PA (RAOx) Date December 7, 2021

Title Genaro Juarez v. Calmet Services, Inc., et al.

As explained in Defendants’ Notice of Removal, and ignored in Plaintiff's Motion to

Remand, the provisions of the California Labor Code on which several of Plaintiff's wage and

hour claims rely contain exceptions that apply to employees covered by CBAs in certain

circumstances. For instance, California Labor Code section 514 provides:

Sections 510 and 511 do not apply to an employee covered by a valid

collective bargaining agreement if the agreement expressly provides

for the wages, hours of work, and working conditions of the

employees, and if the agreement provides premium wage rates for all

overtime hours worked and a regular hourly rate of pay for those

employees of not less than 30 percent more than the state minimum

wage.

Cal. Lab. Code § 514. According to the Notice of Removal, and not disputed by Plaintiff, the

CBA that covers Plaintiff and the class he seeks to represent satisfies the requirements of section

514. Asa result, Plaintiff's first claim, which alleges a violation of section 510, does not apply

to Plaintiff, and state law therefore does not confer the right asserted by plaintiff to overtime

wages. Instead, the source of that right can only be the CBA.

Because the first step of the LMRA preemption analysis establishes that the right asserted

by Plaintiff is not conferred by state law, the second step of that analysis, determining if the

CBA must be interpreted, or merely “looked to,” is not triggered. See Curtis v. Irwin Industries,

Inc., 913 F.3d 1146, 1155 (9th Cir. 2019 (“Curtis’s CBAs in this case meet the requirements of

section 514, and therefore Curtis’s claim for overtime pay is controlled by his CBAs. Because

Curtis’s right to overtime “exists solely as a result of the CBA,” his claim that Irwin violated

overtime requirements by not paying him for the 12 off-duty hours is preempted under § 301.

Thus, his claim fails at step one of the preemption analysis.”) (quoting Kobold v. Good

Samaritan Reg’] Med. Ctr., 832 F.3d 1024, 1032 (9th Cir. 2016)); see also id. at 1153-54 (“By its

terms, therefore, the default definition of overtime and overtimes rates in section 510 does not

apply to an employee who is subject to a qualifying CBA. If Curtis’s CBAs in this case meet the

requirements of section 514, Curtis’s right to overtime ‘exists solely as a result of the CBA,’ and

therefore is preempted under § 301.”) (quoting Kobold, 832 F.3d at 1032).

u Plaintiff contends, relying on Labor Code section 510(a)(2), which excludes from its

application an “alternative workweek schedule adopted pursuant to a collective bargaining

agreement pursuant to Section 514,” that only CBAs that have alternative workweek schedules

are exempted by section 514, but that narrow reading of the interplay between sections 510 and

UNITED STATES DISTRICT COURT

CENTRAL DISTRICT OF CALIFORNIA

CIVIL MINUTES - GENERAL

Case No. CV 21-8922 PA (RAOx) Date December 7, 2021

Title Genaro Juarez v. Calmet Services, Inc., et al.

Plaintiff's third and eighth claims, at a minimum, trigger similar exclusions for workers

covered by CBAs and therefore appear to be similarly preempted by section 301 of the LMRA.

See Cal. Lab. Code § 512(e) (providing that the meal period requirements of section 512(a) and

(b) do not apply to employees covered by a valid collective bargaining agreement that, among

other requirements, provides premium wage rates for all overtime hours worked and a regular

hourly rate of pay of not less than 30 percent more than the state minimum wage rate); Cal. Lab.

Code § 227.3 (requiring payment of vested vacation time “[u]nless otherwise provided by a

collective-bargaining agreement”). Even if the meal period and vacation pay claims were not

preempted, and although Defendants assert that the a remaining “derivative” claims alleged in

the Complaint are similarly preempted, because the Court, at a minimum, possesses

supplemental jurisdiction pursuant to 28 U.S.C. § 1367 over those claims, the Court need not, at

this stage, definitively determine if the remaining claims are preempted by section 301 of the

LMRA.

Conclusion

For the foregoing reasons, the Court concludes that, at a minimum, the Complaint’s first,

claim is preempted by section 301 of the LMRA, and that the Court therefore possesses federal

question jurisdiction over that claim and supplemental over the remaining claims. The Court

therefore denies Plaintiff's Motion to Remand.

IT IS SO ORDERED.

514 is inconsistent with Curtis and Vranish v. Exxon Mobil Corp., 223 Cal. App. 4th 103, 166

Cal. Rptr. 3d 845 (2014). As the Court reads the two sections, section 510(a)(3) provides that

there is no overtime claim based on an alternative workweek schedule contained in a qualifying

CBA as defined by section 514, but section 514 additionally applies more broadly to exempt

overtime claims based on circumstances that do not involve alternative workweek schedules, as

long as the CBA satisfies section 514’s requirements.