Petition for Writ of Certiorari — Virgin America, Inc., et al., Petitioners v. Julia Bernstein, et al., Individually and on Behalf of All Others Similarly Situated

APPENDIX

TABLE OF CONTENTS

Appendix A

Court of Appeals Opinion,

July 20, 2021 ....................... 1a

Appendix B

District Court Order

Regarding Motion for

Summary Judgment,

January 5, 2017 ................ 29a

Appendix C

District Court Order Denying

Motion for Leave to File a

Motion for Reconsideration

March 27, 2017 ................. 79a

Appendix D

District Court Judgment,

February 4, 2019............... 97a

Appendix E

Statutory Provisions

Involved ............................102a

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APPENDIX A

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

____________

Nos. 19-15382, 20-15186

Argued and Submitted January 14, 2021

San Francisco, California

Filed February 23, 2021

Amended March 8, 2021

Amended July 20, 2021

____________

JULIA BERNSTEIN; Esther Garcia; Lisa Marie

Smith, on behalf of themselves and all others similarly situated,

Plaintiffs-Appellees

v.

VIRGIN AMERICA, INC.; Alaska Airlines, Inc.,

Defendants-Appellants

____________

Before: J. CLIFFORD WALLACE and MILAN D.

SMITH, JR., Circuit Judges, and ROBERT S. LASNIK,* District Judge.

* The Honorable Robert S. Lasnik, United States District

Judge for the Western District of Washington, sitting by designation.

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ORDER AND AMENDED OPINION

ORDER

The opinion filed on February 23, 2021, and previously amended on March 8, 2021, is amended with the

amended opinion filed concurrently with this order.

The panel unanimously voted to deny the petitions for panel rehearing. Judge M. Smith voted to

deny the petitions for rehearing en banc, and Judges

Wallace and Lasnik so recommended. The full court

was notified of the petitions for rehearing en banc, and

no judge requested a vote. Fed. R. App. P. 35. The petitions for rehearing en banc (No. 19-15382 Dkts. 115,

116; No. 20-15186 Dkts. 47, 48) are DENIED. No further petitions for panel rehearing or rehearing en

banc will be entertained.

OPINION

M. SMITH, Circuit Judge:

This case requires us to determine whether certain provisions of the California Labor Code apply to

an interstate transportation company’s relationship

with its employees. Plaintiffs Julia Bernstein, Esther

Garcia, and Lisa Smith sued their employer, Virgin

America, Inc., alleging that Virgin violated a host of

California labor laws. The district court certified a

class of similarly-situated plaintiffs and granted summary judgment to Plaintiffs on virtually all of their

claims, and Virgin appealed. We affirm in part, reverse in part, and remand for further proceedings.

FACTUAL AND PROCEDURAL

BACKGROUND

Plaintiffs are California-based flight attendants

who were employees of Virgin. During the Class Peri-

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od, approximately 25% of Virgin’s flights were between California airports. Approximately 75% of Virgin’s flights took off or landed at a non-California airport, but the vast majority of those flights retained

some connection to California: “From 2011 through

2016, the daily percentage of Virgin’s flights that arrived in or departed from California airports was

never less than 88%, and during some years reached

99%.” Class members spent approximately 31.5% of

their time working within California’s borders. There

is no evidence in the record to suggest that class members spent more than 50% of their time working in any

one state, or that they worked in any other state more

than they worked in California. Virgin’s fleet of aircraft were registered with the Federal Aviation

Administration at Virgin’s headquarters in Burlingame, California, and the record does not reflect any

other business headquarters.

In their complaint, Plaintiffs alleged that Virgin

failed to pay minimum wage (Cal. Lab. Code

§ § 1182.12, 1194, 1194.2), overtime (Cal. Lab. Code

§ § 510, 1194), and for every hour worked (Cal. Lab.

Code § 204); failed to provide required meal periods

(Cal. Lab. Code § § 226.7, 512), rest breaks (Cal. Lab.

Code § 226.7), and accurate wage statements (Cal.

Lab. Code § 226); failed to pay waiting time penalties1

(Cal. Lab. Code § § 201, 202, 203); and violated the

Unfair Competition Law (Cal. Bus. & Prof. Code

§ 17200). Plaintiffs also sought compensation under

1 Waiting time penalties refer to the California requirement

that employers expeditiously pay all wages due to employees who

separate from employment. If an employer fails to comply, it is

liable for “waiting time penalties” pursuant to the Labor Code.

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the California Labor Code’s Private Attorneys General Act (Cal. Lab. Code § 2698) (PAGA).

Virgin disputes that it is subject to California law,

but does not contend that any other state’s labor laws

ought to apply to it.

In November 2016, the district court held that

Plaintiffs satisfied the requirements for a class action

pursuant to Federal Rule of Civil Procedure 23(b)(3),

and certified the following classes:

Class: All individuals who have worked as California-based flight attendants of Virgin America,

Inc. at any time during the period from March 18,

2011 (four years from the filing of the original

Complaint) through the date established by the

Court for notice of certification of the Class (the

“Class Period”).

California Resident Subclass: All individuals

who have worked as California-based flight attendants of Virgin America, Inc. while residing in

California at any time during the Class Period.

Waiting Time Penalties Subclass: All individuals who have worked as California-based flight

attendants of Virgin America, Inc. and have separated from their employment at any time since

March 18, 2012.

On July 9, 2018, the district court granted Plaintiffs’ Motion for Summary Judgment in large part.

The district court held that the California Labor Code

applied to all work performed in California, and that

“the presumption against extraterritorial application

does not apply for the failure to pay for all hours

worked, to pay overtime, to pay waiting time penalties, and to provide accurate wage statements” be-

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cause the conduct underlying those claims took place

in California. The district court also rejected the “job

situs” test Virgin proposed, holding that, under California law, an employee need not work “exclusively or

principally” in California to benefit from California

law.

With respect to the dormant Commerce Clause arguments, the district court held that application of the

California Labor Code does not violate the dormant

Commerce Clause because the California Labor Code

does not impose a substantial burden on interstate

commerce that is “clearly excessive in relation to the

putative local benefits.” Pike v. Bruce Church, Inc.,

397 U.S. 137, 142 (1970). The district court further

held that the California meal and rest break requirements were not preempted by field, conflict, or express

preemption pursuant to the Federal Aviation Act

(FAA) or the Airline Deregulation Act (ADA). The district court awarded PAGA penalties for initial and

subsequent violations of the Labor Code.

The district court then awarded attorney’s fees

and costs to Plaintiffs’ counsel, excluding 148.1 hours

that were not properly documented, reducing the

award for “complaint and client communications”

time by 10%, and imposing a 5% reduction to the remaining hours. The district court then applied a 2.0

multiplier based on the factors set forth in Ketchum v.

Moses, 17 P.3d 735, 741–42 (Cal. 2001). The district

court awarded the full amount of costs that Plaintiffs’

counsel claimed based on its conclusion that the

amounts claimed were reasonable. Virgin appealed

from the district court’s summary judgment and grant

of attorney’s fees, and the cases were consolidated for

oral argument.

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STANDARD OF REVIEW

We have jurisdiction pursuant to 28 U.S.C.

§ 1291. We review the district court’s grant of summary judgment de novo. United States v. Phattey, 943

F.3d 1277, 1280 (9th Cir. 2019). Our task is to “view

the evidence in the light most favorable” to Virgin

“and determine whether there are any genuine issues

of material fact and whether the district court correctly applied the relevant substantive law.” Id.

(cleaned up).

We review a district court’s decision on a motion

for attorney’s fees for abuse of discretion. Cline v. Indus. Maint. Eng’g & Contracting Co., 200 F.3d 1223,

1235 (9th Cir. 2000).

ANALYSIS

A.

As a threshold matter, we must consider whether

the dormant Commerce Clause permits application of

California labor law in the context of this case. We

hold that the dormant Commerce Clause does not bar

applying California law.

“Modern dormant Commerce Clause jurisprudence primarily ‘is driven by concern about economic

protectionism—that is, regulatory measures designed

to benefit in-state economic interests by burdening

out-of-state competitors.’” Nat’l Ass’n of Optometrists

& Opticians v. Harris, 682 F.3d 1144, 1148 (9th Cir.

2012) (quoting Dep’t of Revenue of Ky. v. Davis, 553

U.S. 328, 337–38 (2008)). “[A] state regulation does

not become vulnerable to invalidation under the

dormant Commerce Clause merely because it affects

interstate commerce. A critical requirement for proving a violation of the dormant Commerce Clause is

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that there must be a substantial burden on interstate

commerce.” Id. (citation omitted). “These other significant burdens on interstate commerce generally result

from inconsistent regulation of activities that are inherently national or require a uniform system of

regulation.” Id.

Indeed, only a “small number” of Supreme Court

cases “have invalidated state laws under the dormant

Commerce Clause that appear to have been genuinely

nondiscriminatory . . . where such laws undermined a

compelling need for national uniformity in regulation.” Gen. Motors Corp. v. Tracy, 519 U.S. 278, 298

n.12 (1997). Among these are Bibb v. Navajo Freight

Lines, Inc., 359 U.S. 520 (1959), and Southern Pacific

Company v. Arizona, 325 U.S. 761 (1945). Virgin relies

on these cases, but they do not help its legal position.

In Bibb, the Arkansas Commerce Commission required straight mudflaps on trailers operating on

state highways; an Illinois statute required curved

mudflaps. 359 U.S. at 527. “Thus[,] if a trailer [were]

to be operated in both States, mud-guards would have

to be interchanged, causing a significant delay in an

operation where prompt movement may be of the essence.” Id. Moreover, the inter-change was laborious

and could be “exceedingly dangerous.” Id. The Supreme Court struck down the Illinois statute under

the dormant Commerce Clause based on “the rather

massive showing of burden on interstate commerce

which [the motor carriers] made at the hearing.” Id.

at 528, 530.

In Southern Pacific, Arizona limited freight trains

to seventy cars and passenger trains to fourteen cars,

differing substantially from nearby states’ length limitations. 325 U.S. at 771, 774. Railroad operations

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passing through Arizona were substantially burdened

by the obligation to break up and remake trains at the

Arizona state border. Id. at 772. The Supreme Court

held that the facts in the record showed “[t]he serious

impediment to the free flow of commerce by the local

regulation of train lengths and the practical necessity

that such regulation, if any, must be prescribed by a

single body having a nation-wide authority.” Id. at

775. These cases stand for the principle that state regulations can violate the dormant Commerce Clause in

the rare case where an interstate carrier must comply

with different and incompatible state requirements,

and where that compliance is substantially burdensome.

We are not persuaded that California’s labor laws

are similar in character and effect to Illinois’s mudflaps decree and Arizona’s train-length limitation.

Virgin has not identified any other state labor laws

with which it might be required to comply. Indeed, because California labor law’s application is based upon

the parties’ various contacts with the state—as explained further below—a claim that a proliferation of

similar state laws would substantially burden Virgin

is dubious. Virgin does not have anything like the

number of contacts with any other state that it has

with California, and it fails to proffer evidence of any

burden it allegedly suffers from doing business in

other states with different regulations. Cf. Valley

Bank of Nev. v. Plus Sys., Inc., 914 F.2d 1186, 1192

(9th Cir. 1990) (distinguishing between the facts presented in Bibb and a case where the defendant merely

“speculate[d] that other states will pass similar but inconsistent legislation,” because “inconsistent state

laws . . . can coexist without conflict as long as each

state regulates only its own [entities]”). We hold that

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the dormant Commerce Clause is not implicated in

this case.

B.

Virgin challenges application of California law to

both the Class and the California Resident Subclass.

But Virgin’s proposed “job situs” test is a misinterpretation of California law. According to the California

Supreme Court:

The better question is what kinds of California

connections will suffice to trigger the relevant

provisions of California law. And second, the

connections that suffice for purposes of one

statute may not necessarily suffice for another. There is no single, all-purpose answer

to the question of when state law will apply to

an interstate employment relationship or set

of transactions. As is true of statutory interpretation generally, each law must be

considered on its own terms.

Ward v. United Airlines, Inc., 466 P.3d 309, 319

(2020). In accordance with Ward, each of Plaintiffs’

claims requires separate analysis to determine

whether the California Supreme Court would apply

California law to the Class and Subclass under the circumstances of this case. Cf. Pacheco v. United States,

220 F.3d 1126, 1131 (9th Cir. 2000) (“[W]e must predict as best we can what the California Supreme Court

would do in these circumstances.”). Where there is no

genuine issue of material fact whether Virgin complied with California law, we decline to determine

whether and how the California Supreme Court would

apply that particular law to Virgin.

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a. Minimum wage and compensation for all

hours worked

California Labor Code § 1182.12(a) prescribes “the

minimum wage for all industries.” Section 204(a) requires that “[a]ll wages . . . earned by any person in

any employment are due and payable twice during

each calendar month.” Cal. Lab. Code § 204(a). After

the district court’s ruling in this case, the California

Supreme Court considered whether a virtually identical compensation scheme violated California law for

payment of minimum wage and payment for all hours

worked. The court held that a payment scheme based

on block time does not violate California law where

the scheme, taken as a whole, does not promise any particular compensation for any

particular hour of work; instead, . . . it offers a

guaranteed level of compensation for each

duty period and each rotation. Because there

are no on-duty hours for which Delta contractually guarantees certain pay—but from

which compensation must be borrowed to

cover other un- or undercompensated on-duty

hours—the concerns presented by the compensation scheme in [Armenta v. Osmose, Inc.,

37 Cal. Rptr. 3d 460 (Ct. App. 2005)] and like

cases are absent here.

Oman v. Delta Air Lines, Inc., 466 P.3d 325, 339 (Cal.

2020) (emphases omitted).

Plaintiffs attempt to distinguish their case by noting that, while Delta promised the Oman plaintiffs

payment “by the rotation rather than by particular

hours worked,” Virgin promised them an hourly wage.

However, Plaintiffs’ prior briefing contradicts this assertion. Instead, Plaintiffs’ answering brief stated

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that Virgin paid flight attendants based on “(1) block

time worked each day of the pairing; (2) block time

spent deadheading (traveling between airports to

reach an assigned flight . . .); and (3) up to 3.5 hours

of minimum duty if a flight attendant’s block time and

deadheading time in one day did not exceed 3.5 hours

in total.” This does not reflect a promise to pay a particular hourly wage.

Second, Plaintiffs contend that, unlike Delta’s

scheme in Oman, Virgin’s did not guarantee “that

flight attendants are always paid above the minimum

wage for the hours worked during each rotation.” See

Oman, 466 P.3d at 338. Plaintiffs posit that a Virgin

flight attendant could be ordered to report for duty

five hours prior to their scheduled flight, but not be

paid for any of that time. However, Plaintiffs have not

alleged that this ever happened, nor that it would

plausibly happen. Thus, the rule from Oman controls.

The fact that pay is not specifically attached to each

hour of work does not mean that Virgin violated California law. We therefore reverse the district court’s

summary judgment to Plaintiffs on their claims for

minimum wage and payment for all hours worked.

b. Overtime

Under California law,

Any work in excess of eight hours in one workday and any work in excess of 40 hours in any

one work-week and the first eight hours

worked on the seventh day of work in any one

workweek shall be compensated at the rate of

no less than one and one-half times the regular rate of pay for an employee. Any work in

excess of 12 hours in one day shall be compensated at the rate of no less than twice the

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regular rate of pay for an employee. In addition, any work in excess of eight hours on any

seventh day of a work-week shall be compensated at the rate of no less than twice the

regular rate of pay of an employee.

Cal. Lab. Code § 510(a).

In Sullivan v. Oracle Corp., 254 P.3d 237 (Cal.

2011), the California Supreme Court held that the

overtime provision applied to non-residents performing work in California for a California-based

employer. Id. at 240–41. This holding compels the conclusion that California’s overtime provision applies to

the Plaintiff Class. Sullivan did not answer whether

the overtime provision would apply to residents performing work outside California for a California-based

employer, i.e., the Plaintiff California Resident Subclass. However, the principles set forth in Sullivan

require us to apply California overtime law to California residents’ out-of-state work. In Sullivan, the court

wrote, “To permit nonresidents to work in California

without the protection of our over-time law would

completely sacrifice, as to those employees, the state’s

important public policy goals of protecting health and

safety and preventing the evils associated with overwork.” Id. at 247. The same public policy goals would

be thwarted by permitting residents to work outside

of California for a California employer without the

protection of its overtime law. Thus, we hold that under the circumstances of this case, Virgin was subject

to the strictures of California Labor Code § 510 as to

both the Class and Subclass.

Virgin’s opening brief did not dispute that it failed

to comply with § 510. Accordingly, we affirm the

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district court’s grant of summary judgment to Plaintiffs on this claim.

c. Rest and meal breaks

i. Preemption

California Labor Code § 512(a) states:

An employer shall not employ an employee for

a work period of more than five hours per day

without providing the employee with a meal

period of not less than 30 minutes . . . . An employer shall not employ an employee for a

work period of more than 10 hours per day

without providing the employee with a second

meal period of not less than 30 minutes[.]

IWC Wage Order 9-2001 § 12(A) requires an “authorized rest period time” that is “based on the total

hours worked daily at the rate of ten (10) minutes net

rest time per four (4) hours or major fraction thereof.”

“[I]nsofar as practicable,” the rest period “shall be in

the middle of each work period.” Id. Virgin contends

that federal law preempts California’s meal and rest

break requirements in the aviation context because

federal law occupies the field. We disagree.

Under the field preemption doctrine,

States are precluded from regulating conduct

in a field that Congress, acting within its

proper authority, has determined must be regulated by its exclusive governance. The intent

to displace state law altogether can be inferred from a framework of regulation so

pervasive that Congress left no room for the

States to supplement it or where there is a federal interest so dominant that the federal

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system will be assumed to preclude enforcement of state laws on the same subject.

Arizona v. United States, 567 U.S. 387, 399 (2012)

(cleaned up). Pursuant to the FAA, federal regulations

entitled “Flight attendant duty period limitations and

rest requirements” were promulgated that prohibit

duty periods of more than 14 hours, subject to certain

exceptions, and require a 9-hour rest period after release from a duty period of 14 hours or less. 14 C.F.R.

§ 121.467(b)(1)–(2).

Although our circuit has not yet addressed the

precise question of FAA preemption of state meal and

rest break requirements, our case law makes clear

that field preemption generally applies to state regulations specifically in the field of aviation safety. In

Montalvo v. Spirit Airlines, 508 F.3d 464, 468 (9th Cir.

2007), we held that Congress intended to occupy the

field of “aviation safety.” This was based on the dominance of federal interests in regulation of the

country’s airspace, the passage of the FAA “in response to a series of fatal air crashes between civil and

military aircraft operating under separate flight

rules,” and delegation of “full responsibility and authority for the . . . promulgation and enforcement of

safety regulations” to the agency. Id. at 471–72 (alteration in original). We noted that the FAA also directed

the Administrator “to regulate any ‘other practices,

methods, and procedure the Administrator finds necessary for safety in air commerce and national

security.’” Id. at 472 (quoting 49 U.S.C. § 44701(a)(5)).

In Ventress v. Japan Airlines, 747 F.3d 716 (9th

Cir. 2014), we held that standards for pilots were also

pervasively regulated because the FAA authorized the

agency “to issue airman certificates to individuals who

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are qualified and physically able to perform the duties

related to the certified position.” Id. at 721. The plaintiff’s retaliation and constructive discharge claims

arising out of California’s whistleblowing statute (after the plaintiff raised concerns about a colleague’s

fitness to fly) were therefore preempted. Id. at 722.

Ventress made clear that a congressional interest in

national aviation safety standards served as a basis

for our holding that federal law preempted the state

law claim at issue. Ventress relied on “two reasons: the

pervasiveness of federal safety regulations for pilots

and the congressional goal of a uniform system of aviation safety.” Id. We again emphasized the

congressional interest in national aviation safety

standards when we wrote, “In reaching this conclusion, we need not, and do not, suggest that the FAA

preempts all retaliation and constructive termination

claims brought under California law . . . . Instead, we

hold that federal law preempts state law claims that

encroach upon, supplement, or alter the federally occupied field of aviation safety[.]” Id. at 722–23

(emphasis added).

Virgin contends that meal and rest breaks touch

on aviation safety in that the California requirements

prohibit employers from assigning duties to an employee who is on a meal or rest break. But this

connection is far too tenuous to support field preemption for California’s requirements. Unlike the state

laws at issue in Montalvo and Ventress, California’s

meal and rest break requirements have no direct bearing on the field of aviation safety.

We recognize that field preemption under the FAA

is not necessarily limited to state laws that regulate

aviation safety. In general, where a federal regulatory

scheme is so pervasive that it evinces an intent to

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occupy the field, state regulations in the same field are

preempted. Martin v. Midwest Express Holdings, Inc.,

555 F.3d 806, 811 (9th Cir. 2009). However, 14 C.F.R.

§ 121.467, the federal regulation governing maximum

duty periods for flight attendants, does not resemble

the type of comprehensive regulation or contain the

pervasive language that we consider necessary to discern congressional intent to occupy the field. See

Ventress, 747 F.3d at 721–22 (discussing at least five

different sections under two titles of regulations relating to the requirement for an airman certificate, the

requirement of a medical certificate, the delegation of

the authority to issue a certificate to the Federal Air

Surgeon, and the promulgation of standards for mental, neurological, and general medical conditions for

the medical certificate). When a single regulation has

triggered field preemption, our court has highlighted

the regulation’s “exhaustive” level of detail. See Nat’l

Fed’n of the Blind v. United Airlines Inc., 813 F.3d

718, 734–35 (9th Cir. 2016) (holding that 14 C.F.R.

§ 382.57 occupies the field of airport kiosk accessibility for the blind in part because it is “unmistakably

pervasive in the pertinent sense, in that it exhaustively regulates the relevant attributes of accessible

kiosks,” including numerous “technical and design requirements”). While § 121.467 is lengthy, it only

discusses allowed duty period lengths. The regulation

does not compel us to conclude that Congress left no

room for states to prescribe meal periods and ten-minute rest breaks within the maximum total duty

period allowed under federal law.

Conflict preemption also does not bar application

of California’s meal and rest break requirements. “A

conflict giving rise to preemption exists ‘where it is impossible for a private party to comply with both state

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and federal law, … and where under the circumstances of a particular case, the challenged state law

stands as an obstacle to the accomplishment and execution of the full purposes and objectives of

Congress.’” Atay v. County of Maui, 842 F.3d 688, 699

(9th Cir. 2016), quoting Crosby v. Nat’l Foreign Trade

Council, 530 U.S. 363, 372–73 (2000). We sometimes

refer to these two forms of conflict preemption as impossibility preemption and obstacle preemption. Valle

del Sol Inc. v. Whiting, 732 F.3d 1006, 1023 (9th Cir.

2013). Virgin argues that both impossibility preemption and obstacle preemption bar application of

California’s meal and rest break requirements. With

respect to Virgin’s impossibility preemption argument, it is physically possible to comply with federal

regulations prohibiting a duty period of longer than

fourteen hours and California’s statutes requiring

ten-minute rest breaks and thirty-minute meal periods at specific intervals.

Virgin’s obstacle preemption argument mischaracterizes the relevant federal regulation and

improperly dismisses the possibility of increasing

flight attendant staffing on longer flights. Virgin argues that “applying California’s break rules to flight

attendants would frustrate the operation and natural

effect of the federal safety scheme” and asserts that

“FAA rules require flight attendants to be constantly

on call and uniformly distributed throughout the

cabin to help passengers in an emergency.” Quoting

14 C.F.R. §§ 121.391(d) and 121.394(c), Virgin asserts

that “‘during takeoff and landing,’ flight attendants

must remain ‘uniformly distributed throughout the

airplane,’ to help passengers with ‘effective egress in

the event of an emergency evacuation,” and that the

same is true “during passenger boarding or

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deplaning.” Virgin’s phrasing to describe the duties

misleadingly suggests that all attendants on a flight

must be ready to perform the identified tasks. However, § 121.391 expressly imposes the duties only on

“the flight attendants required by this section,” which

is defined in § 121.391(a). Section 121.391(a) sets the

minimum number of attendants according to an airplane’s payload and passenger capacity:

[E]ach certificate holder must provide at least

the following flight attendants on board each

passenger-carrying airplane when passengers

are on board:

(1) For airplanes having a maximum payload

capacity of more than 7,500 pounds and having a seating capacity of more than 9 but less

than 51 passengers - one flight attendant.

Section 121.391(a)(1) (emphasis added); see also id.

(a)(2–4). Section 121.394 also defines the base number

of required flight attendants in reference to § 121.391

and allows for reductions depending on certain conditions. Therefore, contrary to Virgin’s characterization,

the relevant federal regulations define safety duties

for a minimum number of flight attendants.

We agree with the district court, which held that

airlines could comply with both the FAA safety rules

and California’s meal and break requirement by

“staff[ing] longer flights with additional flight attendants in order to allow for duty-free breaks.” Virgin

dismisses this option and argues that space constraints make it impracticable and that it would

“override” FAA rules in § 121.391. With respect to the

former argument, the record does not bear Virgin out

and indicates that Virgin operates flights with empty

jump seats. With respect to the latter, § 121.391 sets

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a minimum requirement for attendants per flight, so

Virgin’s argument that the application of California

meal and rest break requirements would override

FAA safety regulations does not make sense. California meal and rest break requirements do not stand as

an obstacle to the accomplishment and execution of

FAA safety regulations pertaining to flight attendants. Thus, barred by neither impossibility

preemption nor obstacle preemption, California’s

meal and rest break requirements also survive under

a conflict preemption analysis.

Finally, California’s meal and rest break requirements are also not preempted under the ADA. The

ADA provides: “a State . . . may not enact or enforce a

law, regulation, or other provision having the force

and effect of law related to a price, route or service of

an air carrier[.]” 49 U.S.C. § 41713(b)(1). In discussing

an identical provision in the trucking context, the Supreme Court “identified four principles” of the law’s

preemption:

(1) state enforcement actions having a connection with, or reference to, carrier rates, routes,

or services are pre-empted; (2) such pre-emption may occur even if a state law’s effect on

rates, routes or services is only indirect; (3) it

makes no difference whether a state law is

consistent or inconsistent with federal regulation; and (4) pre-emption occurs at least where

state laws have a significant impact related to

Congress’ deregulatory and pre-emption-related objectives.

Dilts v. Penske Logistics, LLC, 769 F.3d 637, 645 (9th

Cir. 2014) (quoting Rowe v. N.H. Motor Transp. Ass’n,

552 U.S. 364, 370–71 (2008)) (cleaned up). But

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“background regulations that are several steps removed from prices, routes, or services, such as

prevailing wage laws or safety regulations, are not

preempted, even if employers must factor those provisions into their decisions about the prices that they

set, the routes that they use, or the services that they

provide.” Id. at 646. Where a law bears a reference to

rates, routes, or services, the Supreme Court has held

that the law “relates to” those items and is therefore

preempted. Morales v. Trans World Airlines, Inc., 504

U.S. 374, 388–89 (1992) (prohibition on deceptive advertising of airfare was preempted). Where a law

bears no such reference, “the proper inquiry is

whether the provision, directly or indirectly, binds the

carrier to a particular price, route, or service and

thereby interferes with the competitive market forces

within the industry.” Dilts, 769 F.3d at 646 (quoting

Am. Trucking Ass’ns, Inc. v. City of L.A., 660 F.3d 384,

397 (9th Cir. 2011)).

In Dilts, we interpreted the preemption clause in

the Federal Aviation Administration Authorization

Act of 1994 (FAAA), which provided, “States may not

enact or enforce a law related to a price, route, or service of any motor carrier with respect to the

transportation of property.” 769 F.3d at 643 (quoting

49 U.S.C. § 14501(c)(1) (internal quotation marks and

alterations omitted)). We held that the FAAA did not

preempt California’s meal and rest break requirements as applied to the interstate trucking industry.

In our opinion, we wrote that “Congress did not intend

to preempt generally applicable state transportation,

safety, welfare, or business rules that do not otherwise

regulate prices, routes, or services.” Id. at 644. Moreover, an increase in cost associated with compliance

21a

was not sufficient to show a relation to prices, routes,

or services. Id. at 646.

The language of the ADA’s preemption clause is

virtually identical to the language of the FAAA’s. The

reasoning of Dilts thus applies with equal force here.

Just as the FAAA did not preempt California’s meal

and rest break requirements as applied to the trucking industry, the ADA does not preempt those

requirements as applied to the airline industry.

ii. Application

After establishing that California’s meal and rest

break requirements are not preempted, we next address whether these requirements apply to the work

performed by the Class and Subclass under California

law. Extrapolating the principles of Sullivan, we hold

that they do.

In Sullivan, the California Supreme Court emphasized the California Legislature’s public policy

goals in the context of California’s overtime statute.

Among these goals was “protecting employees in a relatively weak bargaining position from the evils

associated with overwork[.]” 254 P.3d at 241. Based

on this state policy, and others, the California Supreme Court held that “[t]o exclude non-residents

from the overtime laws’ protection would tend to defeat their purpose by encouraging employers to import

unprotected workers from other states,” and that

“[n]othing in the language or history of the relevant

statutes suggests the Legislature ever contemplated

such a result.” Id. at 242. The California Supreme

Court concluded that application of the overtime statute to non-residents, as well as residents, was the only

feasible way “to reconcile with the Legislature’s express declaration that ‘all protections, rights, and

22a

remedies available under state law are available to all

individuals who are or who have been employed, in

this state.’” Id. (quoting Cal. Lab. Code § 1171.5(a) (alterations omitted)).

We hold that policy similarly dictates application

of California’s meal and rest break requirements to

both the Class and Subclass. Like overtime pay, meal

and rest break requirements are designed to prevent

“the evils associated with overwork,” mandating that

employers treat employees humanely even when employees have been unable to bargain for that

contractual right. Thus, like overtime pay, meal and

rest break requirements applied to Virgin’s relationship with both the Class and Subclass. Virgin’s

opening brief does not contend that it complied with

California’s meal and rest break requirements. We

thus affirm the district court’s summary judgment to

Plaintiffs on these claims.

d. Wage statements

California Labor Code § 226(a) states:

An employer, semimonthly or at the time of

each payment of wages, shall furnish to his or

her employee . . . an accurate itemized statement in writing showing (1) gross wages

earned, (2) total hours worked by the employee . . . , (3) the number of piece-rate units

earned and any applicable piece rate if the employee is paid on a piece-rate basis, (4) all

deductions, . . . (5) net wages earned, (6) the

inclusive dates of the period for which the employee is paid, (7) the name of the employee

and only the last four digits of his or her social

security number or an employee identification

number . . . , (8) the name and address of the

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legal entity that is the employer . . . , and (9)

all applicable hourly rates in effect during the

pay period and the corresponding number of

hours worked at each hourly rate by the employee[.]

The California Supreme Court has determined

that § 226 applies to workers who “perform the majority of their work in California; but if they do not

perform the majority of their work in any one state,

they will be covered if they are based for work purposes in California.” Ward, 466 P.3d at 321.

Ward controls here. According to Virgin’s expert,

“class members collectively worked only 31.5% of their

time in California.” There is, however, no evidence

that the class members performed “the majority of

their work in any one state,” and, indeed, the record

compels the inference that if Plaintiffs did not work in

California for a majority of their time, they did not do

so in any state.

Furthermore, Virgin itself classified all Plaintiffs

in this action as being California-based. Virgin somewhat speciously contends that when it classified

Plaintiffs as California-based, it meant that term in a

different sense than the Ward court used it. This argument is unavailing. The court in Ward wrote, “the

Legislature intended for section 226 to apply to workers whose work is not performed predominantly in any

one state, provided that California is the state that

has the most significant relationship to the work.” Id.

Thus, the California Supreme Court “conclude[d] this

principle will be satisfied if the worker performs some

work here and is based in California, meaning that

California serves as the physical location where the

worker presents himself or herself to begin work.” Id.

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Virgin’s argument hinges on the final sentence—it asserts that many plaintiffs did not “present”

themselves to “begin work” in California because

Plaintiffs’ pairings began and ended outside the state.

Virgin’s argument fails for two reasons. First,

Ward makes clear that presentation in California to

begin work is one way in which a plaintiff might be

based in California; it is not the only way. Id. (holding

that the principle behind § 226 “will be satisfied if” it

applies to the class of workers who present themselves

to begin work in California, not that it cannot apply

under other circumstances). Second, Virgin’s argument misses the point of the Ward test, which serves

to approximate whether California’s “relationship to

the work is more significant than any other state’s.”

Ward, 466 P.3d at 323. The fact that Virgin’s only employee base was in California and all of its flight crew

were “based” there means that, so long as plaintiffs

performed at least some work there, California had

the strongest ties to the employment relationship of

any state. Thus, under Ward, § 226 applies to Virgin.

Virgin’s opening brief does not contend that it complied with § 226. We therefore affirm the district

court’s summary judgment to Plaintiffs on their wage

statement claim.

e. Waiting time penalties

California Labor Code § 201(a) states, “If an employer discharges an employee, the wages earned and

unpaid at the time of discharge are due and payable

immediately.” Section 202(a) further provides, “If an

employee not having a written contract for a definite

period quits his or her employment, his or her wages

shall become due and payable not later than 72 hours

thereafter, unless the employee has given 72 hours

25a

previous notice of his or her intention to quit, in which

case the employee is entitled to his or her wages at the

time of quitting.” Section 203 sets forth penalties for

failure to comply with §§ 201 and 202.

Although there is no California Supreme Court

case specifically interpreting the reach of the waiting

time penalties statute for interstate employers, we

find an analogy to § 226 compelling. Both the waiting

time penalties and the wage statement requirements

pertain to a tangible object that the employer must

give to the employee. Both requirements are technical

in nature: section 226 specifies the information a wage

statement must contain, and the waiting time penalties specify the time in which an employer must remit

an employee’s wages after separation from employment. Thus, using Ward’s language, the “kinds of

California connections” that “will suffice to trigger

the” two provisions are the same. See Ward, 466 P.3d

at 319. Because the California Supreme Court held

§ 226 to apply under these circumstances, we hold

that §§ 201 and 202 apply as well. Virgin’s opening

brief does not dispute that it failed to comply with

§§ 201 and 202. Consequently, we affirm the district

court’s summary judgment to Plaintiffs on their waiting time penalties claim.

C.

Pursuant to Federal Rule of Civil Procedure 23, a

class may be certified if “the class is so numerous that

joinder of all members is impracticable”; “there are

questions of law or fact common to the class”; “the

claims or defenses” of the named plaintiffs are typical

of those of the class; and the named plaintiffs “will

fairly and adequately protect the interests of the

class.” Fed. R. Civ. P. 23(a)(1)–(4). Additionally,

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Plaintiffs must show that “questions of law or fact

common to class members predominate” over individual questions, “and that a class action is superior to

other available methods for fairly and efficiently adjudicating the controversy.” Fed. R. Civ. P. 23(b)(3). Of

these requirements, Virgin challenges only the last:

that class adjudication is the superior method. Virgin

claims that class adjudication is inappropriate because choice-of-law analyses will be required for each

plaintiff. Pursuant to our analysis, the applicability of

California law has been adjudicated on a class-wide or

subclass-wide basis, and thus no individual choice-oflaw analysis is necessary. We affirm the district

court’s decision on class certification.

D.

Finally, we consider whether the district court

correctly held that Virgin was subject to heightened

penalties for subsequent violations under PAGA.

PAGA permits individuals to sue their employers to

recover penalties to which they are entitled under the

Labor Code. Cal. Lab. Code § 2699(a). Where the section violated does not indicate the amount of the

penalty for its violation, PAGA fixes the penalty at

$100 “for each aggrieved employee per pay period for

the initial violation,” and $200 “for each aggrieved employee per pay period for each subsequent violation.”

Id. § 2699(f)(2).

Under California law, “[a] good faith dispute” that

an employer is required to comply with a particular

law “will preclude imposition” of heightened penalties.

Amaral v. Cintas Corp. No. 2, 78 Cal. Rptr. 3d 572,

607 (Ct. App. 2008). “A ‘good faith dispute’ . . . occurs

when an employer presents a defense, based in law or

fact which, if successful, would preclude any

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recover[y] on the part of the employee.” Id. “Until the

employer has been notified that it is violating a Labor

Code provision (whether or not the [Labor] Commissioner or court chooses to impose penalties), the

employer cannot be presumed to be aware that its continuing underpayment of employees is a ‘violation’

subject to penalties.” Id. at 614.

Virgin was not notified by the Labor Commissioner or any court that it was subject to the California

Labor Code until the district court partially granted

Plaintiffs’ motion for summary judgment. On this basis, we reverse the district court’s holding that Virgin

is subject to heightened penalties for any labor code

violation that occurred prior to that point.

E.

Since we reverse in part the district court’s judgment on the merits, California law requires that we

vacate the attorney’s fees and costs award “because we

cannot say with certainty that the [district] court

would exercise its discretion the same way” had Plaintiffs not prevailed on virtually all of their claims.

Ventas Finance I, LLC v. Franchise Tax Bd., 81 Cal.

Rptr. 3d 823, 844 (Ct. App. 2008). We therefore vacate

the district court’s order awarding fees and costs to

Plaintiffs’ counsel, and we remand the issue of attorney’s fees and costs to the district court.

CONCLUSION

In sum, we affirm the district court’s summary

judgment to Plaintiffs on their claims for overtime

(§ 510); for violation of meal and rest break requirements (§§ 226.7, 512); for wage statement deficiencies

(§ 226); and for waiting time penalties (§§ 201 and

202). We also affirm the district court’s decision on

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class certification. We reverse the district court’s summary judgment to Plaintiffs on their claims for

minimum wage (§ 1182.12); for payment for each hour

worked (§ 204); and for heightened penalties for subsequent violations under PAGA. We vacate the

district court’s order granting attorney’s fees and costs

to Plaintiffs, and we remand for further proceedings

consistent with this opinion.

AFFIRMED IN PART, REVERSED IN PART,

VACATED IN PART.

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APPENDIX B

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

____________

No. 15-cv-02277-JST

____________

JULIA BERNSTEIN, et al.,

Plaintiffs

v.

VIRGIN AMERICA, INC.,

Defendant

____________

ORDER REGARDING MOTION FOR SUMMARY JUDGMENT

Before the Court is Defendant Virgin America’s

motion for summary judgment. ECF No. 97. The

Court will deny the motion in part and grant the motion in part.

I.

BACKGROUND

The Plaintiffs are flight attendants who currently

work or have previously worked for Defendant Virgin

America, Inc. (“Virgin”). In this class action against

Virgin, the Plaintiffs allege that Virgin did not pay

them for hours worked before, after, and between

flights; time spent in training; time on reserve; time

spent taking mandatory drug tests; and time spent

completing incident reports. See First Amended Class

Action Complaint, ECF No. 32 ¶¶ 28˗41. The Plaintiffs

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further allege that Virgin did not allow flight attendants to take meal or rest breaks, failed to pay overtime

and minimum wages, and failed to provide accurate

wage statements. Id.

A. Factual Summary

1. The Parties

Virgin is an airline company that is headquartered in Burlingame, California. Depo. of Valerie

Jenkins, ECF No. 44-1 at 71:4.1 Virgin trains its flight

attendants in California, and it has received millions

of dollars from the State of California to do so. ECF

No. 101, Exs. 1-11. Many of Virgin’s flights either arrive to or depart from a California airport. ECF No.

101-13. In fact, Virgin estimates that, since 2011, the

average daily number of its flights that depart from a

California airport has never been less than 88.6 percent. ECF No. 101-26 at 9.

Plaintiffs Julia Bernstein, Esther Garcia, and

Lisa Marie all previously worked for or currently work

for Virgin as flight attendants. ECF No. 50-17, Exs.

23-25. Each of the Plaintiffs provided Virgin with a

California address and each of the Plaintiffs were

based out of either San Francisco International Airport or Los Angeles International Airport during the

course of their employment with Virgin. Id. The Plaintiffs’ flight schedules show that they sometimes

worked entire days on consecutive flights between

California airports. See ECF No. 101-17.

1 Throughout this Order, the Court refers to the pagination

created by the Court’s electronic filing system, not the document’s internal pagination.

31a

2. Flight

Attendant

Scheduling

Terminology and Responsibilities

Virgin schedules its flight attendants to fly “pairings,” a series of flights over a series of continuous

days that depart and return to the airport out of which

flight attendants are based. ECF No. 44-1, Ex. 1 at

4:10-16; ECF No. 44-1, Ex. 2 at 59:6-13. Each pairing

consists of one or more “duty periods.” ECF No. 44-1,

Ex. 1 at 5:18-25. Virgin’s Work Rules require that each

flight attendant report for duty one hour before the

departure of her first scheduled flight of the day. ECF

No. 45-2, Ex. 8 at 31. After they check in for duty,

flight attendants must travel to the departure gate of

their first flight and be onboard the flight no less than

forty-five minutes before the scheduled departure.

ECF No. 46-2 at 18. They must also attend two preflight briefings, greet and assist passengers in boarding, and generally prepare the cabin for departure.

ECF No. 47-2 at 131-134; ECF No. 47-2 at 143-146.

“Block time” is the amount of time within a duty period from when an aircraft pushes back from the gate

(“block out”) at its departure city to when the aircraft

arrives at the gate (“block in”) at its destination. ECF

No. 50-2 at 6:11-21, 8:13-21. Once the flight arrives at

its destination, flight attendants help passengers deplane and check the cabin for items left onboard. ECF

No. 47-2 at 177. Flight attendants are not released

from duty until fifteen minutes after their last scheduled flight of the day. ECF No. 45-3 at 2. Sometimes a

flight attendant will need to travel as a passenger on

a flight to arrive at an airport for an assigned flight.

This time spent traveling is referred to as “deadheading.”

When a flight attendant works a subsequent flight

in a duty period, the time between the block in of the

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first flight and block out of the second flight is referred

to as “turn time.” As with the first flight of the day,

flight attendants must report for duty at the second

flight’s departure gate and be onboard that flight

forty-five minutes before the scheduled departure.

ECF 47-2 at 129. Flight attendants remain on duty

during turn time. ECF No. 44-1 at 93:13-20.

3. Virgin’s

Policies

Regarding

Compensation and Breaks

Virgin’s InFlight Work Rules outline its detailed

compensation policies for flight attendants. ECF Nos.

45-46, Exs. 8, 9, 10. And Virgin’s Crew Pay Manual is

used by Virgin’s payroll department to process flight

attendant compensation. ECF No. 47-3, Ex. 12.

Pursuant to those policies, Virgin uses a creditbased system to compensate its flight attendants.

ECF No. 45-4 at 12-13. That system does not directly

compensate flight attendants for all hours on duty.

ECF No. 47-3 at 8 (“Even for flying activity, crewmembers are not paid for time ‘on the clock’ (duty time);

instead, they are typically paid only when the aircraft

is moving (block time).”). Flight attendants receive an

hour of credit for each hour of block time, fifty percent

of block time for time spent deadheading, and a minimum of 3.5 hours of “minimum duty period credit” for

duty periods in which the flight attendant does not

earn at least 3.5 hours of credit from block time and/or

deadheading. ECF No. 45-4 at 12-13. Virgin’s system

does not directly compensate duty hours that do not

fall into one of these three categories (e.g. pre- and

post-block duty time and turn time between flights).

See id.

Virgin does, however, pay flat rates for some nonflight activities. For example, it pays flight attendants

33a

thirty minutes of pay for drug testing, regardless of

the duration of the drug test. ECF No. 47-5 at 7. Virgin also pays a flat monthly rate for initial flight

attendant training, irrespective of the actual hours

worked by flight attendants during this training. ECF

No. 45-4 at 24. Virgin pays flight attendants 3.5 hours

of pay for annual training even though those trainings

last at least eight hours. ECF No. 45-4 at 16; ECF No.

101-20 at 2; see also, e.g., ECF No. 50-17 ¶ 22. Virgin

pays flight attendants four hours of pay for airport reserve shifts in which they are not assigned to a flight,

even though those shifts can last up to six hours. ECF

No. 47-5 at 9. If a flight attendant is assigned a flight

during their reserve shift, they are paid for half of the

total time spent on reserve plus that flight’s block

time. Id. Virgin’s compensation policy does not provide

credit for time spent completing incident reports,

which Plaintiffs testify they were unable to complete

during time for which they are compensated due to

their job duties (e.g. block time). ECF No. 50-17 ¶ 16.

Per Virgin’s policies, crew leaders provide rest and

meal periods for flight attendants. ECF No. 50-13 at

22. However, Virgin admits that, although its flight

attendants have the opportunity to take breaks, they

are still on duty throughout the entirety of a flight.

ECF No. 71 at 15; ECF No. 44-1 at 96:1-6. Many flight

attendants claim that they are unable to take breaks

on flights. See, e.g., ECF No. 50-17, Ex. 23, ¶ 18. Approximately one-third of Virgin’s daily flights since

2011 have been longer than five hours in duration.

ECF No. 101-26 at 6-8.

Virgin’s wage statements do not indicate the duty

period hours worked or the block hours worked. ECF

No. 50-2, Ex. 1 at 34:19-21, 36:17-24; ECF No. 101-23,

101-24, 101-25.

34a

B. Procedural History

The Plaintiffs commenced this action in state

court, and Virgin removed it to federal court pursuant

to the diversity jurisdiction provision of the Class Action Fairness Act (“CAFA”). ECF No. 1.

Plaintiffs bring claims under the California Labor

Code and California Industrial Welfare Commission

Wage Order 9-2001 (“Wage Order”) for failure to pay

minimum wage, failure to pay overtime wages, failure

to pay wages for all hours worked, failure to provide

required meal periods, failure to provide required rest

periods, failure to provide accurate wage statements,

failure to pay waiting time penalties to discharged employees, failure to indemnify all necessary business

expenditures, and derivative claims under California’s Unfair Competition Law (“UCL”) and the Private

Attorney General Act (“PAGA”). ECF No. 32.

On November 7, 2016, this Court certified the following Class and Subclasses under Rule 23(b)(3):

Class: All individuals who have worked as

California-based flight attendants of Virgin

America, Inc. at any time during the period

from March 18, 2011 (four years from the filing of the original Complaint) through the

date established by the Court for notice of certification of the Class (the “Class Period”).

California Resident Subclass: All individuals who have worked as California-based

flight attendants of Virgin America, Inc. while

residing in California at any time during the

Class Period.

Waiting Time Penalties Subclass: All individuals who have worked as California-based

35a

flight attendants of Virgin America, Inc. and

have separated from their employment at any

time since March 18, 2012.

See ECF No. 104. The Class claims are limited to time

worked within California. ECF No. 70 at 10. However,

both the California Resident Subclass and the Waiting

Time Penalties Subclass seek to recover wages for

time spent working within and outside California. Id.

Virgin now moves for summary judgment. ECF

No. 97.

II. JURISDICTION

Pursuant to the Class Action Fairness Act

(“CAFA”), the Court has jurisdiction over this case, as

a class action in which a member of the class of plaintiffs is a citizen of a state different from any

defendant, there are more than 100 class members nationwide, and the matter in controversy exceeds the

sum of $5 million, exclusive of interests and costs. 28

U.S.C. § 1332(d).

III. LEGAL STANDARD

Summary judgment is proper when a “movant

shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a

matter of law.” Fed. R. Civ. P. 56(a). “A party asserting

that a fact cannot be or is genuinely disputed must

support the assertion by” citing to depositions, documents, affidavits, or other materials. Fed. R. Civ. P.

56(c)(1)(a). A party also may show that such materials

“do not establish the absence or presence of a genuine

dispute, or that an adverse party cannot produce admissible evidence to support the fact.” Fed. R. Civ. P.

56(c)(1)(B). An issue is “genuine” only if there is sufficient evidence for a reasonable fact-finder to find for

36a

the non-moving party. Anderson v. Liberty Lobby,

Inc., 477 U.S. 242, 248¬49 (1986). A fact is “material”

if the fact may affect the outcome of the case. Id. at

248. “In considering a motion for summary judgment,

the court may not weigh the evidence or make credibility determinations, and is required to draw all

inferences in a light most favorable to the non-moving

party. Freeman v. Arpaio, 125 F.3d 732, 735 (9th Cir.

1997).

Where the party moving for summary judgment

would bear the burden of proof at trial, that party

bears the initial burden of producing evidence that

would entitle it to a directed verdict if uncontroverted

at trial. See C.A.R. Transp. Brokerage Co. v. Darden

Rests, Inc., 213 F.3d 474, 480 (9th Cir. 2000). Where

the party moving for summary judgment would not

bear the burden of proof at trial, that party bears the

initial burden of either producing evidence that negates an essential element of the non-moving party’s

claim, or showing that the non-moving party does not

have enough evidence of an essential element to carry

its ultimate burden of persuasion at trial. If the moving party satisfies its initial burden of production,

then the non-moving party must produce admissible

evidence to show that a genuine issue of material fact

exists. See Nissan Fire & Marine Ins. Co. v. Fritz Cos.,

210 F.3d 1099, 1102-03 (9th Cir. 2000). The non-moving party must “identify with reasonable particularity

the evidence that precludes summary judgment.” Keenan v. Allan, 91 F.3d 1275, 1279 (9th Cir. 1996).

Indeed, it is not the duty of the district court “to scour

the record in search of a genuine issue of triable fact.”

Id. “A mere scintilla of evidence will not be sufficient

to defeat a properly supported motion for summary

judgment; rather, the non-moving party must

37a

introduce some significant probative evidence tending

to support the complaint.” Summers v. Teichert &

Son, Inc., 127 F.3d 1150, 1152 (9th Cir. 1997) (citation

and internal quotations omitted). If the non-moving

party fails to make this showing, the moving party is

entitled to summary judgment. Celotex Corp. v.

Catrett, 477 U.S. 317, 323 (1986).

IV. ANALYSIS

Virgin argues that applying California labor law

to the Plaintiffs’ employment would violate both the

presumption against extraterritorial application and

the Dormant Commerce Clause. Virgin further argues

that the Plaintiffs’ meal and rest break claims are

preempted by the Federal Aviation Act and the Airline

Deregulation Act. Finally, Virgin argues that, even if

California law applies, Virgin’s policies and practices

comply with California law and the Plaintiffs have

failed to present sufficient evidence to prevail on their

claims.

A. Application of California’s Labor Laws

1. Job Situs is Not Dispositive

As it did when opposing class certification, Virgin

again argues that California labor law does not protect the Plaintiffs because they do not work

“exclusively or principally” in California, but rather

across “multiple jurisdictions” and “in the federally

regulated airspace.” ECF No. 97 at 19-22. Virgin

claims that this “job situs” test is “determinative.” Id.

The Court again rejects Virgin’s singular emphasis on job situs as the dispositive factor to determine

whether California’s wage and hour laws apply to

Plaintiffs. See ECF No. 104 at 14–17. As explained at

38a

length in the class certification order, Virgin’s position

lacks relevant support in the case law. See id.

Virgin relies primarily on Tidewater Marine W.,

Inc. v. Bradshaw, 14 Cal. 4th 557, 577 (1996) for the

proposition that an employee must work “exclusively

or principally” in California to benefit from California

law. See id. But that is not what Tidewater says. The

Tidewater court simply explained that an employee

who “resides in California, receives pay in California,

and works exclusively, or principally, in California,”

presumptively enjoys the protections of California’s

wage orders. Tidewater, 14 Cal. 4th at 578. That court

did not hold that an employee must necessarily satisfy

all three of those conditions to be protected by California law. See id. In fact, because the Tidewater court

ultimately found that the plaintiffs worked within

California’s territorial boundaries, it “express[ed] no

opinion as to whether the trial court can enjoin the

application of IWC wage orders to crew members who

work primarily outside California’s state law boundaries.” Tidewater, 14 Cal. 4th at 578-79. The Court also

left room for the possibility that California’s labor

laws may apply extraterritorially “in limited circumstances, such as when California residents working

for a California employer travel temporarily outside

the state during the course of the normal workday but

return to California at the end of the day.” Id. at 57778. Despite the Tidewater court’s explicit refusal to

decide the precise issue presented here, Virgin relies

on that case to argue that Plaintiffs’ can only enjoy the

protections of the California Labor Code if they

worked exclusively or principally in California. Tidewater simply cannot bear the weight Virgin asks of it.

Lacking sufficient support from the California Supreme Court, Virgin again turns to three federal

39a

district court cases to find support for its dispositive

“job situs” test. Because the Court has already explained at length why those cases are factually

distinguishable and legally erroneous, it does not address them again here. See ECF No. 104 at 14–17.

Instead of considering principal “job situs” in a

vacuum, the California Supreme Court has endorsed

a multi-faceted approach. The California Supreme

Court’s later decision in Sullivan confirms that the

three factors listed in Tidewater ‒ i.e. California residency, receipt of pay in California, and exclusive or

principal “job situs” in California ‒ are sufficient, but

not necessary, conditions for an individual to benefit

from the protections of California law. After all, the

Sullivan court’s central holding was that non-residents (who do not presumptively enjoy the protections

of California’s labor laws) are nonetheless protected

by those laws in certain circumstances. Sullivan, 51

Cal. 4th at 1194. The court also suggested that other

factors were relevant to this inquiry, such as the employer’s residency and whether the employee’s

absence from the state was temporary in nature. See

id. at 1199–1200 (“California law . . . might follow California resident employees of California employers

who leave the state ‘temporarily . . . during the course

of the normal workday’ . . . [n]othing in Tidewater suggests a nonresident employee, especially a nonresident

employee of a California employer such as Oracle, can

enter the state for entire days or weeks without the

protection of California law.”) (emphasis added). Sullivan therefore flatly rejects the simplistic test

proposed by Virgin.

This multi-faceted approach is consistent with

California’s strong public policy of protecting its workers. The Sullivan court stressed that the wage and

40a

hour laws “serve important public policy goals” and

therefore they should be applied in a way that would

not encourage employers to evade the law. Sullivan,

51 Cal. 4th at 1198. On another occasion, the California Supreme Court explained that “in light of the

remedial nature of the legislative enactments authorizing the regulation of wages, hours and working

conditions for the protection and benefit of employees,

the statutory provisions are to be liberally construed

with an eye to promoting such protection.” Indus. Welfare Com. v. Superior Court, 27 Cal. 3d 690, 702

(1980).

As applied to this case, the Court finds that Plaintiffs’ and Virgin’s significant connections to California

are also relevant considerations when determining

whether to apply California’s wage and hour laws. The

Plaintiffs were California residents2 who received

their pay in California and, therefore, they satisfy two

of the three elements to presumptively enjoy the protections of California law under Tidewater. In

addition, Virgin is a California-based airline with its

headquarters in California. See Sullivan, 51 Cal. 4th

at 1200 (suggesting that the employer’s residency is

relevant to the application of California law). The

Plaintiffs have presented evidence that Virgin has received millions of dollars in state subsidies to train all

of its flight attendants in California. See ECF No. 101,

Exs. 3–7. And the Plaintiffs’ expert calculates that,

since 2011, between 88 and 99 percent of Virgin’s

2 Although Virgin disputes whether Bernstein was actually

living in California, see ECF No. 97 at 21, n. 23, the fact that she

provided a California address for payroll and tax purposes in

2011 is sufficient to create a triable factual issue regarding her

residency

41a

flights each day either departed from or arrived in a

California airport. ECF No. 101–38, ¶¶ 3–4. The parties’ deep ties to California can hardly be described as

“minor considerations” for a court determining

whether to apply California law. ECF No. 97 at 19-22.

And, although the Plaintiffs spent just around a quarter of their total work time in California, that

consideration is relatively less important where, as

here, temporary out-of-state travel is an inherent part

of their job. Tidewater, 14 Cal. 4th at 577–78 (distinguishing temporary out-of-state travel).

Given Virgin’s thin precedential support for its position that “job situs” is determinative, the other

compelling considerations present in this case, and

California’s strong public policy of protecting its workers, the Court concludes that the Plaintiffs are not

barred from asserting claims under California’s wage

and hour laws simply because they did not work exclusively or principally in California.

2. The California Labor Code Applies to

Work Performed in California and

Wrongful Conduct that Occurred in

California

Virgin also argues that the Plaintiffs cannot seek

protection of the California Labor Code for work that

they performed outside of the state due to the presumption against the extraterritorial application of

California law. See ECF No. 97 at 19.

At the outset, it is important to stress that many

of the Plaintiffs’ claims relate to work performed

within California’s borders to which California law

clearly applies. For example, one of the Plaintiffs’ primary allegations is that they were not paid for time

spent working before takeoff and after landing in

42a

California airports.3 ECF No. 32 ¶¶ 31, 46. The Plaintiffs further allege that they were not paid for time

spent in training and on reserve shifts that occurred

in California. Id. ¶¶ 23-26, 35, 46. Virgin does not seriously dispute that such “non-flight activities

exclusively preformed [sic] in California might be subject to California law.” ECF No. 107 at 9, n. 8.4 Nor

could it.

Both the plain terms of the California Labor Code

and California Supreme Court precedent confirm that

the California Labor Code applies to work performed

in California. The preamble to California’s Labor Code

provides that its protections “are available to all individuals . . . who have applied for employment, or who

are or who have been employed, in this state.” Cal.

Lab. Code § 1171.5(a).5 The specific Labor Code provisions at issue in this case similarly apply to all work

performed in California. See, e.g., Cal. Lab. Code

3 The Plaintiffs’ expert report shows that at least 88 percent

of Virgin’s flights each day either arrived at or departed from

California airports. ECF No. 101–38, ¶¶ 3–4. In some years, this

percentage reached 99 percent. Id.

4 Although Virgin appears to concede this point as a matter

of legal “theory,” it nonetheless argues that the Plaintiffs have

not provided sufficient evidence to prevail on such a theory in

this particular case (i.e. because they have not shown that they

worked enough hours in California to trigger overtime protections). See id. The Court addresses these alleged factual

shortcomings later in its order.

5 Although the original impetus for § 1171.5 was to extend

protections to non-resident, undocumented workers in California, the provision has a broader reach because it was “codified as

a general preamble to the wage law” and it “broadly refers to ‘all

individuals’ employed in the state.” Sullivan, 51 Cal. 4th at 119798, n. 3.

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§ 1174 (“Every person employing labor in this state

shall . . . “) (emphasis added).

Based on this clear statutory text, the California

Supreme Court has concluded that California’s overtime laws “speak broadly” to “regulate all nonexempt

overtime work within its borders.” Sullivan v. Oracle

Corp., 51 Cal. 4th 1191, 1197-98 (2011) (emphasis

added) (“California’s overtime laws apply by their

terms to all employment in the state.”); Sullivan v. Oracle Corp. (“Sullivan II”), 662 F.3d 1265, 1271 (9th

Cir. 2011) (“California applies its Labor Code equally

to work performed in California, whether that work is

performed by California residents or by out-of-state

residents.”) (emphasis added). This is true even if the

individual seeking the protection of California law

“worked mainly” in other states. See Sullivan, 51 Cal.

4th at 1197, 1194-95 (holding that California overtime

laws applied to plaintiff’s work performed in California even though he spent just twenty days working in

California during a three-year period); Wright v. Adventures Rolling Cross Country, Inc., No. C-12-0982EMC at *5-6 (N.D. Cal., May 3, 2012) (holding at the

motion to dismiss stage that “Plaintiffs do have viable

state law claims based on their work done in California,” such as training, even though they did most of

their work abroad as international trip leaders). The

Court therefore concludes that California’s labor laws

apply to the work performed by the Plaintiffs in California.

Still, the Plaintiffs must overcome the presumption against extraterritorial application to the extent

they seek to recover based on work performed outside

of California. California law presumptively does not

apply to conduct that occurs outside of California. See

N. Alaska Salmon Co. v. Pillsbury, 174 Cal. 1, 4 (1916)

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(internal quotation marks omitted) (“Ordinarily, the

statutes of a state have no force beyond its boundaries.”). To overcome that presumption, the Plaintiffs

must show that a contrary intent “is clearly expressed

or reasonably to be inferred from the language of the

act or from its purpose, subject-matter, or history.” Id.

Instead of trying to overcome the presumption by

pointing to the relevant statutory language or legislative history, Plaintiffs seek to avoid the presumption

against extraterritorial application altogether by arguing that the alleged wrongful conduct giving rise to

liability occurred within California. See ECF No. 102

at 18. The Plaintiffs argue that, “even if a presumption against extraterritorial application applies

generally to the Labor Code,” the Court must still

“consider whether plaintiffs’ proposed application of

the [law] would cause it to operate, impermissibly,

with respect to occurrences outside the state.” Id.

(quoting Sullivan, 51 Cal. 4th at 1207). The Plaintiffs

claim that the wrongful conduct alleged here occurred

in California because Virgin is headquartered in California, Virgin oversees its flight attendants and

issues payroll from California, the Plaintiffs are California residents who were based out of California

airports, and the Plaintiffs performed at least some of

their work in California on most workdays. ECF No.

102 at 19.

Even if the presumption against extraterritorial

application applies to a particular statute, the court

must still consider “whether plaintiffs’ proposed application of the [law] would cause it to operate,

impermissibly, with respect to occurrences outside the

state.” Sullivan, 51 Cal. 4th at 1207; see also, e.g.,

Leibman v. Prupes, No. 2:14-CV-09003-CAS (VBKx),

2015 U.S. Dist. LEXIS 80101, at *15-18 (C.D. Cal.

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June 18, 2015) (“assuming arguendo that the presumption [against extraterritorial application]

applies to common law claims,” but holding that the

plaintiff’s “claims do not constitute improper extraterritorial application of California law” because “the

actions which gave rise to liability” occurred in California). This inquiry is necessary because the

presumption against extraterritorial application does

not bar the application of California law to wrongful

conduct that occurs within California. Diamond Multimedia Sys., Inc. v. Superior Court, 19 Cal. 4th 1036,

1059 (1999) (“The presumption [against extraterritorial application] has never been applied to an injured

person’s right to recover damages suffered as a result

of an unlawful act or omission committed in California.”); Aguilar v. Zep Inc., No. 13-CV-00563-WHO,

2014 WL 4245988, at *11 (N.D. Cal. Aug. 27, 2014)

(“[E]xtraterritorial application of California law is not

barred where the alleged wrongful conduct occurred

in California.”).

To determine whether a state law is being applied

extraterritorially, courts consider “whether ‘the conduct which gives rise to liability . . . occurs in

California.’” Leibman v. Prupes, No. 2:14-CV-09003CAS, 2015 U.S. Dist. LEXIS 80101, at *15–17 (C.D.

Cal. June 18, 2015) (emphasis in original) (quoting Diamond Multimedia, 19 Cal. 4th at 1059). For example,

the presumption against extraterritoriality did not

bar the plaintiff’s breach of contract claim where “the

actions which gave rise to liability - that is, the alleged

breach - occurred in California” when the business

manager made the “‘core decision’ to wrongfully terminate [the plaintiff]” and terminated the plaintiff via

email from his business in California. No. 2:14-CV09003-CAS, 2015 U.S. Dist. LEXIS 80101, at *17–18

46a

(C.D. Cal. June 18, 2015). Similarly, the presumption

against extraterritorial application did not bar the

out-of-state plaintiffs’ consumer protection and false

advertising claims under California law where the

plaintiffs “alleged that [defendant’s] purportedly misleading marketing, promotional activities and

literature were coordinated at, emanate from and are

developed at its California headquarters, and that all

‘critical decisions’ regarding marketing and advertising were made within the state.” In re iPhone 4S

Consumer Litig., No. C 12-1127 CW, 2013 U.S. Dist.

LEXIS 103058, at *23-24 (N.D. Cal. July 23, 2013).

Likewise, there was no extraterritorial application of

California’s consumer protection statutes where the

plaintiffs alleged “that the misrepresentations were

developed in California, contained on websites and an

application that are maintained in California, and

that billing and payment of services went through

servers located in California.” Ehret v. Uber Techs.,

Inc., 68 F. Supp. 3d 1121, 1132 (N.D. Cal. 2014).

Therefore, the key question is whether the alleged

wrongful conduct that gave rise to liability occurred

within California. If so, the presumption against extraterritorial application does not apply.

The Court concludes that the wrongful conduct

giving rise to liability occurred in California such that

the Plaintiffs’ claims do not constitute an attempt to

apply the law to occurrences outside of the state.

Plaintiffs challenge Virgin’s centrally devised compensation policies, such as its policies of not

compensating flight attendants for non-block duty

time and paying flat rates for drug testing and training activities. See generally ECF No. 32; ECF Nos. 45,

46, 47–3 (outlining Virgin’s detailed compensation

policies for flight attendants). As in the above cases,

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Virgin made these critical decisions regarding how it

would pay its flight attendants, and proceeded to pay

its flight attendants in accordance with those decisions, from its headquarters in Burlingame,

California. Therefore, the very actions giving rise to

potential liability ‒ that is, the failure to pay for all

hours worked, the failure to pay overtime, the failure

to provide accurate wage statements, and the failure

to pay waiting time penalties to discharged employees

‒ occurred in California. Because the Plaintiffs’ proposed application of the law would not impermissibly

operate to reach conduct occurring outside of the

state, the presumption against extraterritorial application does not apply and the Plaintiffs do not have to

overcome it.

The only wrongful conduct that could have potentially occurred outside of California, at least in some

instances, is Virgin’s alleged failure to provide meal

periods and rest breaks. Virgin does not have a centralized policy regarding the provision of such breaks;

instead, Virgin’s policies simply provide that team

leaders are responsible for scheduling breaks for flight

attendants. ECF No. 50–13 at 22. Therefore, any failure to provide meal and rest breaks did not originate

at Virgin’s headquarters in California, but rather occurred wherever the flight attendant was deprived of

that break. In some instances, the Plaintiffs might

have been deprived of such breaks outside of California, for example while they were working on flights

between California and the East coast. See id. ¶ 23. To

the extent the Plaintiffs seek to recover for such break

violations that occurred outside of California, they

must overcome the presumption against extraterritorial application. Because the Plaintiffs have not

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attempted to do so, they cannot recover for that extraterritorial conduct under California law.

However, the Court nonetheless declines to grant

summary judgment to Virgin on the meal and rest

break claims because there is sufficient evidence that

the Plaintiffs were deprived of at least some of those

breaks while working in California. See ECF No. 101–

17 at 2 (showing days on which Plaintiffs Esther Garcia and Lisa Smith flew back and forth between Los

Angeles, San Francisco, and San Diego); ECF No. 98–

2 at 6–7 (concluding that the Plaintiffs were sometimes eligible for meal periods or rest breaks based on

the length of their pairings); ECF No. 50–17, ¶¶ 18–

19 (Plaintiff Bernstein declaring that she “cannot remember ever being encouraged or directed to take a

break or meal period” and that she does not remember

taking a meal period during turn time between

flights). Therefore, the Court cannot conclude as a

matter of law that the break claims solely involve extraterritorial conduct such that California law may

not apply to those claims. Aguilar, 2014 WL 4245988,

at *12 (“Summary judgment is not proper to the extent

[plaintiff] can prove that [defendant] violated California laws relating to work that he performed within

California.”).

B. Dormant Commerce Clause

Second, Virgin argues that requiring it to comply

with California’s labor laws would violate the

Dormant Commerce Clause. ECF No. 97 at 22–25.

The United States Constitution’s Commerce

Clause grants Congress the authority “[t]o regulate

Commerce with foreign Nations, and among the several States, and with the Indian Tribes[.]” U.S.

CONST. art. I, § 8, cl. 3. Because the framers gave the

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federal government the exclusive power to regulate interstate commerce, and because federal law preempts

state law, the United States Supreme Court has inferred the existence of a “dormant” Commerce Clause

that limits states’ abilities to restrict interstate commerce. See New Energy Co. v. Limbach, 486 U.S. 269,

273 (1988) (explaining that the Commerce Clause “not

only grants Congress the authority to regulate commerce among the States, but also directly limits the

power of the States to discriminate against interstate

commerce[]”).

At the same time, the Dormant Commerce Clause

“respects federalism by protecting local autonomy.”

Nat’l Ass’n of Optometrists & Opticians v. Harris, 682

F.3d 1144, 1148–49 (9th Cir. 2012). “Thus, the Supreme Court has recognized that ‘under our

constitutional scheme the States retain broad power

to legislate protection for their citizens in matters of

local concern such as public health’ and has held that

‘not every exercise of local power is invalid merely because it affects in some way the flow of commerce

between the States.’” Id. (quoting Great Atl. & Pac.

Tea Co. v. Cottrell, 424 U.S. 366, 371 (1976) (internal

quotations and citations omitted).

There are two ways in which a state regulation

may violate the Dormant Commerce Clause. First, a

state regulation is virtually per se invalid under the

Dormant Commerce Clause if it discriminates against

out-of-state entities. Dep’t of Revenue v. Davis, 553

U.S. 328, 337 (2008); Int’l Franchise Ass’n, Inc. v. City

of Seattle, 803 F.3d 389, 399 (9th Cir. 2015), cert. denied sub nom. Int’l Franchise Ass’n, Inc. v. City of

Seattle, Wash., 136 S. Ct. 1838 (2016). Indeed,

“[m]odern dormant Commerce Clause jurisprudence

primarily ‘is driven by concern about economic

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protectionism ‒ that is, regulatory measures designed

to benefit in-state economic interests by burdening

out-of-state competitors.’” Harris, 682 F.3d at 1148

(quoting Davis, 553 U.S. at 337). Accordingly, “[m]ost

regulations that run afoul of the dormant Commerce

Clause do so because of discrimination. . . . ” Harris,

682 F.3d at 1148. Virgin does not argue that the California wage and hour laws at issue here discriminate

against out-of-state entities in this way. See ECF No.

97 at 22–25.

Second, a state regulation that “regulates evenhandedly to effectuate a legitimate local public interest” and whose “effects on interstate commerce are

only incidental” may nonetheless violate the Dormant

Commerce Clause if “the burden imposed on such

commerce is clearly excessive in relation to the putative local benefits.” Sullivan v. Oracle Corp., 662 F.3d

1265, 1271 (9th Cir. 2011) (internal quotation marks

omitted) (quoting Pike v. Bruce Church, Inc., 397 U.S.

137, 142 (1970)). Importantly, “a state regulation does

not become vulnerable to invalidation under the

dormant Commerce Clause merely because it affects

interstate commerce.” Harris, 682 F.3d at 1148. “A

critical requirement for proving a violation of the

dormant Commerce Clause is that there must be a

substantial burden on interstate commerce.” Id. (emphasis in original).

Courts have only struck down non-discriminatory

state regulations “in a small number of dormant Commerce Clause cases,” Harris, 682 F.3d at 1148, and

“[s]tate laws frequently survive this Pike scrutiny,”

Davis, 553 U.S. at 339 (citing cases). Virgin bears the

burden of showing that the application of California’s

Labor Code would violate the Dormant Commerce

Clause. Int’l Franchise Ass’n, Inc. v. City of Seattle,

51a

803 F.3d 389, 400 (9th Cir. 2015), cert. denied sub

nom. Int’l Franchise Ass’n, Inc. v. City of Seattle,

Wash., 136 S. Ct. 1838 (2016) (internal quotation

marks and citations omitted).

Virgin argues that, if it is forced to comply with

the California Labor Code, it will necessarily have to

comply with other states’ wage and hour laws, too.

ECF No. 97 at 22. As a result, it argues, “[a]pplication

of the state regulations at issue would subject Virgin

to an ever changing national patchwork of wage and

hour law, and therefore places an undue burden on interstate commerce” that outweighs California’s

interest in protecting its employees. ECF No. 107 at

14. Virgin further argues that the need for uniform

regulation is especially important in the airline industry, which is inherently national. ECF No. 97 at 23.

Finally, Virgin argues that it will incur substantial

costs if required to comply with the California Labor

Code. ECF No. 120 at 4.

As a preliminary matter, the Court rejects Virgin’s premise that it will necessarily be required to

comply with each state’s wage and hour laws. As explained above, Virgin is subject to California law

because both Virgin and the Plaintiffs have deep ties

to California and the wrongful conduct at issue in this

case occurred in California. Regardless of where their

employees’ pairings take them, the challenged compensation policies at issue in this case emanated from

Virgin’s headquarters in California and Virgin paid its

flight attendants pursuant to those policies in California. Nothing in the record suggests that Virgin has

similar ties to other states, and Virgin has presented

no evidence to support its contention that it will be required to comply with other states’ laws. See S.D.

Myers, Inc. v. City & Cty. of San Francisco, 253 F.3d

52a

461, 471 (9th Cir. 2001) (rejecting a Dormant Commerce Clause challenge where the party challenging

the state regulation “relied solely on conclusory statements about the burden the [state regulation] has on

interstate commerce,” and explaining that the court

“require[s] specific details as to how the costs of the

[state regulation] burdened interstate commerce”).

Absent such evidence, this Court cannot conclude that

Virgin will automatically be forced to comply with the

state laws in whatever jurisdiction their flight attendants happen to pass through on a given day. Rather,

Virgin is simply being required comply with the law of

the state where it chose to headquarter its business,

where its California-resident employees performed

work based out of California airports, and where it

made critical decisions regarding how it would compensate its employees that are now being challenged

in this lawsuit. Virgin’s suggestion that the Court’s

ruling will “have far-reaching implications,” like subjecting an employer to California law because their

employee “simply work[ed] for three hours in the SFO

terminal while waiting for a connecting flight between

New York and Japan,” completely ignores all of the

compelling considerations that weigh in favor of applying California law in this case. ECF No. 97 at 25,

n. 28.

Absent this flawed premise, Virgin’s argument regarding its administrative burden falls apart. Virgin

relies heavily on Ward, but that court’s conclusion

that the application of California’s Labor Code would

impose an undue administrative burden on the airline

was entirely dependent on its erroneous conclusion

that California law only applies to individuals who

work principally or exclusively in California. Based on

that incorrect interpretation of California law, the

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Ward court concluded that the airline would have to

“monitor the pilot’s precise hours spent working in

each state and determine which state’s laws applied

in that bid period.” Ward, 2016 WL 3906077 at *5.

Then, the airline would have to “give an individual pilot a different form of wage statement in each bid

period, depending on whether that pilot worked principally in California or some other state.” Id.6 In

contrast, this Court has already determined that principal job situs is not dispositive of whether California

law applies to the Plaintiffs, therefore eliminating any

need to monitor each flight attendant’s work schedule

each month to determine where they principally

worked. As explained above, both the Plaintiffs and

Virgin have significant connections to California, the

California Labor Code clearly applies to the Plaintiffs’

work performed in California, and the wrongful conduct at issue in this case occurred in California.

Because Plaintiffs do not seek to apply the California

Labor Code extraterritorially, the administrative burden that was present in Ward is not present in this

case.

Perhaps most importantly, the Ninth Circuit has

already rejected a similar Dormant Commerce Clause

6 The Ward court also failed to analyze whether state laws

regarding wage statements actually conflicted such that the airline would need to provide different wage statements for

different states. In doing so, the court neglected to hold the airline to its burden of showing that compliance would impose a

substantial burden. See Int’l Franchise Ass’n, Inc., 803 F.3d 389.

Plaintiffs here have presented a thorough analysis of state-bystate wage statement requirements which suggests that a wage

statement that complies with California law would comply with

almost all state laws, thus mitigating any burden. ECF No. 101–

15.

54a

to California’s Labor Code. See Sullivan v. Oracle

Corp., 662 F.3d 1265, 1271 (9th Cir. 2011). Oracle, the

California employer in Sullivan, argued that “[i]f California decides to impose its Labor Code on business

travelers, other states may follow suit” and “[t]he resulting patchwork of conflicting state laws would have

severe adverse impact on interstate commerce, resulting in an administrative burden as employers

attempted to comply with varying state laws.” Brief

for Appellee Oracle Corporation, Sullivan v. Oracle

Corp., 2007 WL 2317029 (C.A.9). The Ninth Circuit

squarely rejected this argument, explaining that “California applies its Labor Code equally to work

performed in California, whether that work is performed by California residents or by out-of-state

residents.” Sullivan, 662 F.3d at 1271. As result, the

Court explained, “[t]here is no plausible Dormant

Commerce Clause argument when California has chosen to treat out-of-state residents equally with its

own.” Id. Sullivan therefore confirms that California’s

Labor Code “regulates even-handedly to effectuate a

legitimate local public interest” such that it will be upheld unless Virgin shows that the burden it imposes

on interstate commerce “is clearly excessive in relation to the putative local benefits.’” Id.

The only potential difference between this case

and Sullivan is that this case involves the airline industry. It is true that a state regulation “that imposes

significant burdens on interstate transportation” represents the kind of “inconsistent regulation of

activities that are inherently national or require a

uniform system of regulation.” Harris, 682 F.3d at

1148. The question then becomes what uniform system of regulation Virgin is currently subject to and

55a

whether the application of the California Labor Code

is inconsistent with that system.

Virgin suggests that the Fair Labor Standards Act

(FLSA) already provides a uniform, albeit “baseline,”

system of regulation for employment in the airline industry. See ECF No. 107 at 15–16. But Virgin

completely fails to explain how the application of California’s Labor Code would conflict with FLSA and

thereby disrupt the uniform system of regulation.7

The only potential conflict that Virgin identifies between the FLSA and California law is that the FLSA

allows averaging to satisfy minimum wage requirements, whereas California law does not. ECF No. 97

at 24–25. However, the FLSA specifically contemplates continued state regulation of employees’

working conditions. See 29 U.S.C.A. § 218(a) (“No provision of this chapter or of any order thereunder shall

excuse noncompliance with any … State law or municipal ordinance establishing a minimum wage higher

than the minimum wage established under this chapter or a maximum work week lower than the

maximum workweek established under this chapter …”). Through FLSA’s savings clause, Congress

“made clear its intent not to disturb the traditional exercise of the states’ police powers with respect to

wages and hours more generous than the federal

standards.” Pac. Merch. Shipping Ass’n v. Aubry, 918

F.2d 1409, 1421 (9th Cir. 1990) (explaining that California’s overtime provisions supplemented FLSA’s

7 Again, the primary disruption to national uniformity that

Virgin identifies is the supposed conflict between California law

and the laws of other states, such as New York and Florida. See

ECF No. 97 at 24. For the reasons provided above, the Court rejects Virgin’s assumption that it will be subject to every state’s

wage and hour laws simply because it is subject to California law.

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protections and holding that California’s overtime

laws applied to maritime workers working on the high

seas). In other words, “the purpose behind the FLSA

is to establish a national floor under which wage protections cannot drop, not to establish absolute

uniformity in minimum wage and overtime standards

nationwide at levels established in the FLSA.” Id. at

1425 (emphasis in original). Because the FLSA and

the California Labor Code were intended to coexist,

the application of California law is not inconsistent

with the national system of regulation under FLSA.8

The lack of a conflict between the FLSA and the

California Labor Code distinguish this case from the

small number of cases in which the Supreme Court

has held that a state regulation is unconstitutional because it imposes an undue burden on interstate

transportation. Virgin argues that California’s prohibition against averaging to satisfy minimum wage

requirements is akin to the state regulation at issue

in Bibb v. Navajo Freight Lines, Inc., 359 U.S. 520

(1959). ECF No. 107 at 14–15. In Bibb, the Supreme

Court held that an Illinois statute that required

trucks to use curved mudguards placed an unconstitutional burden on interstate commerce because it

Contrary to Plaintiffs’ assertion, FLSA’s savings clause

does not constitute a delegation of Congressional authority to the

states to regulate an area of interstate commerce. See ECF No.

102 at 26. As the Ninth Circuit explained in Pacific Merchant,

“Congress did not ‘delegate’ authority to the states through section 218, but simply made clear its intent not to disturb the

traditional exercise of the states’ police powers with respect to

wages and hours more generous than the federal standards.” Pacific Merchant, 918 F.2d at 1421. Therefore, California’s wage

and hour laws are not completely “invulnerable” to a Dormant

Commerce Clause challenge. Cf. W. & S. Life Ins. Co. v. State Bd.

of Equalization of California, 451 U.S. 648, 652–55 (1981).

8

57a

directly conflicted with an Arkansas statute that required truck drivers to use straight mudguards. Bibb,

359 U.S. at 527. The conflict between the two statutes

required truck drivers to change their mudguards

when crossing state lines, a process that caused significant delay and posed safety risks because the

mudguards were welded on. See id. The Supreme

Court similarly struck down an Arizona law that restricted the number of cars on trains that traveled

interstate because it required railroads to break up

and remake long trains upon entering and leaving the

Arizona. S. Pac. Co. v. State of Ariz. ex rel. Sullivan,

325 U.S. 761 (1945). Unlike the state regulations at

issue in Bibb and Southern Pacific, California’s Labor

Code does not conflict with the FLSA. Rather, as explained by the Ninth Circuit in Pacific Merchant

Shipping, California law supplements the FLSA’s

baseline wage and hour requirements. And requiring

Virgin to pay its California employees in accordance

with California law simply does not impede the flow

of interstate transportation like the regulations at issue in Bibb and Pacific Merchant. As the Plaintiffs

persuasively argue, “Virgin’s aircrafts take off and

land on schedule regardless of its pay policies.” ECF

No. 102 at 28.

Virgin also relies on United Air Lines, Inc. v. Indus. Welfare Com., a 1963 California Court of Appeals

decision that was later overruled on other grounds.

United Air Lines, Inc. v. Indus. Welfare Comm’n, 211

Cal. App. 2d 729, 747 (Ct. App. 1963) disapproved of

by Indus. Welfare Com. v. Superior Court, 27 Cal. 3d

690, 728, n.15 (1980). In that case, the court held that

a California wage regulation that required the defendant airline to pay for their flight attendant’s uniforms

would pose an undue burden on interstate commerce.

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See id. at 747–49. The only burden that the court

could identify was the “personnel troubles” that would

result if some flight attendants had to pay for their

uniforms and others did not. Id. Tellingly, the court

admitted that “that burden may not be very great.” Id.

Nonetheless, the court held that the regulation violated the Dormant Commerce Clause because “the

subject is one which necessarily requires uniformity of

treatment.” Id. The Court does not find this case persuasive because (1) controlling United States

Supreme Court and Ninth Circuit precedent require a

“substantial burden,” and (2) the application of the

California Labor Code would not disrupt national uniformity in this case because Congress intended for

state law to supplement the FLSA. See Harris, 682

F.3d at 1148 (citing S.-Cent. Timber Dev., Inc. v. Wunnicke, 467 U.S. 82, 87 (1984)).9

Finally, Virgin argues that it will incur additional

staffing costs if required to comply with California’s

meal break requirements. ECF No. 120 at 4˗5. But the

“administrative costs of compliance, alone, are generally insufficient to be deemed an unconstitutional

burden.” Barclays Bank Internat. Ltd. v. Franchise

Tax Bd., 10 Cal.App.4th 1742, 1755 (1992) (citing

Bibb, 359 U.S. at 526), aff’d sub nom. Barclays Bank

PLC v. Franchise Tax Bd. of California, 512 U.S. 298,

310 (1994); see also, e.g., Burlington Northern R. Co.

v. Department of Public Service Regulation, 763 F.2d

1106, 1114 (9th Cir. 1985) (rejecting a Dormant Commerce Clause challenge to a Montana statute that

9 Virgin also relies on an unpublished, uncitable decision.

See ECF No. 97 at 23 (relying on Guy v. IASCO, 2004 WL

1354300 (Cal. App. 2d June 17, 2004). This Court does not address that decision.

59a

required a railroad to maintain and staff freight offices in towns with at least 1,000 persons, noting that

“a loss to the company does not, without more, suggest

that the Montana statute ‘impede[s] substantially the

free flow of commerce from state to state’”) (quoting

Southern Pacific, 325 U.S. at 767). Virgin argues that

its compliance costs—an estimated $1,950,925 annually10—are significantly greater than those at issue in

Barclays and Burlington. ECF No. 120 at 5. But the

Ninth Circuit also rejected a Dormant Commerce

Clause challenge to California’s vessel fuel rules, even

though compliance with those rules would cost the industry an additional $360 million annually. Pacific

Merchant Shipping Ass’n v. Goldstene, 639 F.3d 1154,

1159, 1177˗82 (9th Cir. 2011). In doing so, the Court

noted that the cost of compliance “would appear to be

relatively small in comparison with the overall cost of

a trans-Pacific voyage.” Id. Virgin’s compliance

costs—$100 per flight according to Virgin’s estimate—

are also relatively small compared to the overall cost

of a flight.

In sum, Virgin has failed to show that the burden

on interstate commerce imposed by the California Labor Code is “clearly excessive in relation to the

putative local benefits.” Pike, 397 U.S. at 142. Virgin

relies heavily on the professed conflict between California law and other states’ laws to argue that there

is an administrative burden, but this argument hinges

on its faulty assumption that it will be subject to the

wage and hour laws of other states’ simply because it

is subject to California law. Virgin also relies on the

This estimate reflects the cost of paying an additional

flight attendant the lowest base rate ($20/hour) for every flight

that lasts five hours. ECF No. 120 at 4˗5.

10

60a

fact that it operates within the national airline industry, but there is no conflict between the existing

system of federal regulation (the FLSA) and the California Labor Code because Congress intended state

regulations to supplement the FLSA’s minimum requirements. Contrasted against the speculative

burden of having to comply with various states’ employment laws are the significant local benefits

conferred by the wage and hour provisions at issue in

this lawsuit, which ensure that workers are paid for

all hours worked. Because these local benefits outweigh any potential burden on interstate commerce,

there is no Dormant Commerce Clause violation.

C. Federal Preemption of Plaintiffs’ Meal

and Rest Break Claims

Third, Virgin argues that Plaintiffs’ meal and rest

break claims are preempted by the Federal Aviation

Act (“FAA”) and/or the Airline Deregulation Act

(“ADA”). ECF No. 97 at 26– 29.

“Preemption analysis begins with the ‘presumption that Congress does not intend to supplant state

law.’” Tillison v. Gregoire, 424 F.3d 1093, 1098 (9th

Cir. 2005) (quoting N.Y. State Conference of Blue

Cross & Blue Shield Plans v. Travelers Ins. Co., 514

U.S. 645, 654 (1995)). In particular, the Supreme

Court has warned that “[p]re-emption of employment

standards ‘within the traditional police power of the

State’ ‘should not be lightly inferred.’” Hawaiian Airlines, Inc. v. Norris, 512 U.S. 246, 252 (1994) (quoting

Fort Halifax Packing Co. v. Coyne, 482 U.S. 1, 21

(1987)).

However, this presumption is overcome where

Congress expresses a “clear and manifest” intent to

preempt state law. Californians For Safe &

61a

Competitive Dump Truck Transp. v. Mendonca, 152

F.3d 1184, 1186 (9th Cir. 1998). “Congress’ intent may

be ‘explicitly stated in the statute’s language or implicitly contained in its structure and purpose.’”

Montalvo v. Spirit Airlines, 508 F.3d 464, 470 (9th Cir.

2007) (internal quotation marks omitted). “There are

two types of implied preemption: conflict preemption

and field preemption.” Id. “Courts may find conflict

preemption when a state law actually conflicts with

federal law or when a state law stands as an obstacle

to the accomplishment and execution of the full purposes and objectives of Congress in enacting the

federal law.” Id. “Implied preemption exists when federal law so thoroughly occupies a legislative field ‘as

to make reasonable the inference that Congress left no

room for the States to supplement it.’” Id. (quoting

Cipollone v. Liggett Group, Inc., 505 U.S. 504, 516

(1992)). “Thus, field preemption occurs when Congress

indicates in some manner an intent to occupy a given

field to the exclusion of state law.” Id.

3. FAA Preemption

With respect to the FAA, Virgin argues that both

types of implied preemption are present. ECF No. 97

at 26–28. First, Virgin argues that “[t]he FAA occupies

the field with respect to setting rest and duty periods

for [flight attendants], and California’s meal period

and rest break laws are therefore preempted.” Id. Second, Virgin argues that California law conflicts with

the FAA’s requirements regarding meal and rest

breaks. ECF No. 97 at 28.

a. Field Preemption

“The first step” in the field preemption inquiry “is

to delineate the pertinent regulatory field.” Nat’l

Fed’n of the Blind v. United Airlines Inc., 813 F.3d

62a

718, 734 (9th Cir. 2016). Virgin argues that flight attendant break requirements occupy the field of

“aviation safety,” whereas Plaintiffs define the pertinent field as “the field of airline employment.” ECF

No. 97 at 26–28; ECF No. 102 at 30. The Ninth Circuit

has emphasized the need to define the relevant field

“with specificity.” Nat’l Fed’n of the Blind, 813 F.3d at

734. For example, where plaintiffs challenged the airline’s policy of using automatic kiosks that were

inaccessible to blind travelers, “the pertinent field for

purposes of field preemption analysis [was] not ‘air

carrier accessibility’ in general,” but rather “airport

kiosk accessibility for the blind.” Id. at 737. And, in a

personal injury suit challenging the safety of airstairs,

the relevant field was not “plane design” generally,

but rather the regulation of airstairs in particular.

Martin ex rel. Heckman v. Midwest Exp. Holdings,

Inc., 555 F.3d 806, 811–12 (9th Cir. 2009). Although

the Ninth Circuit has previously held that Congress

intended to occupy “the field of aviation safety,” Montalvo, 508 F.3d at 470, it has subsequently cautioned

that “Montalvo should not be read . . . expansively

with regard to the relevant field for preemption purposes.” Nat’l Fed’n of the Blind, 813 F.3d at 734, n. 13

(internal quotation marks omitted) (quoting Gilstrap

v. United Air Lines, Inc., 709 F.3d 995, 1004 (9th Cir.

2013)). The Court therefore defines the relevant field

for preemption purposes as the regulation of meal and

rest breaks for flight attendants.

With this definition in mind, the Court now turns

to the second step of the field preemption analysis: “to

survey the scope of the federal regulation within that

field” and determine “whether the density and detail

of federal regulation merits the inference that any

state regulation within the same field will necessarily

63a

interfere with the federal regulatory scheme.” Nat’l

Fed’n of the Blind, 813 F.3d at 734. Virgin points to

four FAA regulations that it argues affect the provision of meal and rest breaks to flight attendants in

some way.11 ECF No. 107 at 7. Of these, the Court can

identify only one that actually regulates the provision

of breaks to flight attendants.12 See 14 C.F.R.

§ 121.467(b) (prohibiting flight attendants from working duty periods of longer than fourteen hours and

requiring a nine-hour rest period between duty periods). This lone regulation can hardly be described as

comprehensive, detailed, or pervasive enough to justify federal preemption of the field. See Martin ex rel.

Heckman v. Midwest Exp. Holdings, Inc., 555 F.3d

806, 812 (9th Cir. 2009) (finding that a single FAA regulation regarding airstairs was not enough to preempt

state law claims that the stairs are defective). Therefore, the FAA does not preempt the provision of meal

and rest breaks to flight attendants.

Virgin also relies heavily on the FAA’s statements about

its flight attendant break regulation to argue that break requirements affect airline “safety,” at least to some degree, and are

therefore preempted. ECF No. 97 at 27 (citing 59 FR 42974-01).

In doing so, Virgin adopts the overly broad reading of Montalvo

that the Ninth Circuit has repeatedly counseled against. Nat’l

Fed’n of the Blind, 813 F.3d at 734, n. 13 (internal quotation

marks omitted) (quoting Gilstrap, 709 F.3d at 1004). The Court

therefore rejects this argument.

11

12 The other FAA regulations outline the requisite number

of flight attendants and the requirements regarding where flight

attendants should be located during takeoff, landing, taxi, and

stops where passengers remain on board. See 14 CFR §§ 121.391,

121.393, 121.394.

64a

b. Conflict Preemption

“Conflict preemption applies ‘where compliance

with both federal and state regulations is a physical

impossibility,’ and in ‘those instances where the challenged state law stands as an obstacle to the

accomplishment and execution of the full purposes

and objectives of Congress.” Ventress v. Japan Airlines, 747 F.3d 716, 720–21 (9th Cir.), cert. denied, 135

S. Ct. 164 (2014) (internal citations and quotation

marks omitted).

Virgin argues that there are two potential conflicts between FAA regulations and California’s meal

and rest break requirements. First, it argues that California law, which requires that employees are

relieved of all duty during a thirty-minute meal break

every five hours, conflicts with FAA regulations that

“do not permit Plaintiffs to forego their responsibilities while in flight.” ECF No. 97 at 27–28. Second,

Virgin argues that “the FAA permits [flight attendants] to remain on duty for up to 14 hours straight

before receiving a rest period,” whereas California law

requires a ten-minute rest-period every four hours

and an additional thirty-minute meal period every

five hours. ECF No. 107 at 7.

It is not “a physical impossibility” for Virgin to

simultaneously comply with California law and FAA

regulations. For example, Virgin could staff longer

flights with additional flight attendants in order to allow for duty-free breaks. In addition, the FAA

regulation that Virgin relies on is wholly consistent

with California’s break requirements because it

merely establishes the maximum duty period time

and minimum rest requirements. See 14 C.F.R.

§ 121.467. Therefore, there is no conflict preemption.

65a

4. ADA Preemption

Next, Virgin argues that the application of California’s Labor Code is preempted by the Airline

Deregulation Act (“ADA”). ECF No. 97 at 28–29.

To support its argument, Virgin relies on the following express preemption provision in the ADA: “[A]

State . . . may not enact or enforce a law, regulation,

or other provision having the force and effect of law

related to a price, route, or service of an air carrier

that may provide air transportation under this subpart.” 49 U.S.C. § 41713(b)(1). Based on this provision,

Virgin argues that providing its flight attendants with

breaks as required under California law could “prevent the aircraft from being prepared for takeoff or

passengers being boarded on time,” thereby having

the effect of “regulating Virgin’s services and routes.”

ECF No. 97 at 28–29. Virgin cites to several district

court cases that support its argument that meal and

rest break claims impact an airline’s services and

routes and are therefore preempted by the ADA. See

id.

However, all of the cases that Virgin relies on predate the Ninth Circuit’s decision in Dilts v. Penske

Logistics, LLC, in which it squarely rejected the

preemption argument that Virgin makes here. 769

F.3d 637 (9th Cir. 2014), cert. denied, 135 S. Ct. 2049

(2015). In that case, the Ninth Circuit decided to

“draw a line between laws that are significantly ‘related to’ rates, routes, or services, even indirectly, and

thus are preempted, and those that have ‘only a tenuous, remote, or peripheral’ connection to rates, routes,

or services, and thus are not preempted.” Id. at 643

(emphasis added) (quoting Rowe v. N.H. Motor

Transp. Ass’n, 552 U.S. 364, 371 (2008)). The Court

66a

explained that this limiting principle was necessary

because the phrase “related to” was so broad that it

could conceivably be interpreted to encompass every

state law, even those that Congress did not intend to

preempt. Id. (“[E]verything is related to everything

else.”) (quoting Dillingham Constr., 519 U.S. at 335

(Scalia, J., concurring)). With this guiding principle in

mind, the court held that “California’s meal and rest

break laws plainly are not the sorts of laws ‘related to’

prices, routes, or services that Congress intended to

preempt,” adding that it was not even a “close case[].”

Id. at 647. The court went on to specifically reject the

argument that Virgin makes here—i.e., that providing

duty-free breaks to its employees would affect service

and routes—explaining that the defendants “simply

must hire a sufficient number of drivers and stagger

their breaks for any long period in which continuous

service is necessary.” Id. at 648.

Virgin tries to distinguish Dilts by arguing that it

“dealt with neither ADA preemption nor the airline

industry,” but neither of those considerations changes

this Court’s analysis. ECF No. 97 at 29, n. 30; ECF No.

107 at 8, n. 7. Although Dilts involved preemption under

the

Federal

Aviation

Administration

Authorization Act (“FAAAA”), and not the ADA, “the

FAAAA was modeled on the Airline Deregulation Act

of 1978” and “us[es] text nearly identical to the Airline

Deregulation Act’s,” including the exact preemption

language at issue in this case. Dilts, 769 F.3d at 643–

44; see also 49 U.S.C. § 14501(c) (“[A] State . . . may

not enact or enforce a law, regulation, or other provision having the force and effect of law related to a

price, route, or service of any motor carrier . . . “).

Therefore, the Dilts court relied extensively on cases

that involved ADA preemption, noting that those

67a

cases were “instructive for [the court’s] FAAAA analysis as well.” Dilts, 769 F.3d at 644. Virgin offers no

persuasive argument as to why identical language in

a statute with an identical purpose should be interpreted differently merely because it applies to a

different industry.

Plaintiffs’ meal and rest break claims are not

preempted by the ADA.

D. Compliance With California Law

Next, Virgin argues that its compensation policy

and wage statements comply with California law.

ECF No. 97 at 31-34.

1. Compensation Policy

The relevant Wage Order requires that employers

in the transportation industry pay minimum wages

“for all hours worked.” Cal. Code Regs. tit. 8, § 11090,

Wage Order 9-2001 ¶ 4(A). “Hours worked” means

“the time during which an employee is subject to the

control of an employer, and includes all the time the

employee is suffered or permitted to work, whether or

not required to do so.” Id., § 2(G). California courts

have held that “[t]his language expresses the intent to

ensure that employees be compensated at the minimum wage for each hour worked” and, therefore,

employers may not average the total amount earned

by an employee over all hours worked in order to comply with minimum wage laws. Armenta v. Osmose,

Inc., 135 Cal. App. 4th 314, 323 (2005); Vaquero v.

Ashley Furniture Indus., Inc., 824 F.3d 1150, 1154

(9th Cir. 2016).13

13 Despite this clear prohibition against averaging to meet

minimum wage requirements, Virgin argues that “there is no

(cont’d)

68a

The wage order does not require, however, that

employers necessarily compensate their employees

through an hourly wage. Instead, it gives employers

some flexibility in this regard, allowing them to calculate compensation “by time, piece, commission, or

otherwise.” Cal. Code Regs. tit. 8, § 11090, Wage Order 9-2001 ¶ 4(B); see also id, § 2(O) (“‘Wages’ includes

all amounts for labor performed by employees of every

description, whether the amount is fixed or ascertained by the standard of time, task, piece,

commission basis, or other method of calculation.”).

Therefore, the fact that Virgin does not pay its flight

attendants on a straight hourly basis for all activities,

but rather through a “credit-based system” that pays

a fixed rate for certain activities, does not violate California law in and of itself.

However, Virgin must still compensate its employees for all time worked in some way, irrespective

of how it calculates that compensation (e.g. based on

hours worked, the particular task performed, or some

other factor). See, e.g., Cardenas v. McLane FoodServices, Inc., 796 F. Supp. 2d 1246, 1249-53 (C.D. Cal.

2011) (holding that the employer’s piece-rate pay formula for its truck drivers—which was based on miles

driven, stops made, and products delivered—violated

California’s minimum wage law because the compensation formula “did not separately compensate

employees for pre- and post-shift time not calculated

for in the piece-rate plan”). If an employer’s

evidence that when applying the number of credits received for

each Duty Period against their hours worked for the Duty Period

that Plaintiffs received below the minimum wage.” ECF No. 97

at 33. As explained above, that is not the relevant question under

California law; the relevant question is whether the Plaintiffs

were paid the minimum wage for each hour worked.

69a

compensation system fails to account for all work duties in this way, it violates California’s minimum wage

law and the employer cannot make up the difference

by relying on impermissible averaging. See id.

a. Compensation

Duty Time

for

Non-Block

The Plaintiffs claim that Virgin has no identifiable means of paying for duty hours outside of block

time—i.e., time spent before takeoff and after arrival.

ECF No. 102 at 21-22. Plaintiffs argue that they are

subject to Virgin’s control and perform work during

this non-block duty time, including participating in

pre-flight briefings and boarding passengers, so they

must be paid for that time.

Virgin responds that it compensates flight attendants for non-block duty time, relying largely on the

following provision in its Work Rules: “[t]he credit

value for each duty period within a pairing will consist

of block hours, deadhead or ground transportation

credit, and minimum duty credit . . .” ECF No. 97 at

31 (emphasis in original); see also ECF No. 45-4 at 12.

Virgin appears to be arguing that, because its Work

Rules say that flight attendants will be compensated

“for each duty period,” Virgin actually did compensate

flight attendants for the entire duty period, including

non-block time. But, as the court explained in Cardenas, “it is irrelevant whether the pay formula was

intended to compensate pre- and post-trip duties, or

even if employees believed it covered those duties, if

its formula did not actually directly compensate those

pre- and post-trip duties.” Cardenas, 796 F. Supp. 2d

at 1253 (emphasis in original). The Court must therefore look to Virgin’s compensation formula to

70a

determine whether it “separately compensate[s]” for

non-block duty hours. Id.

It does not. The formula, as articulated in Virgin’s

work rules, always compensates flight attendants for

block time and time spent deadheading. See ECF No.

45-4 at 12-13. However, it does not separately compensate non-block, non-deadheading duty time, which

includes time when flight attendants are performing

work (e.g. boarding and deplaning passengers) and

subject to Virgin’s control. One could argue that the

“minimum duty period credit” presumably compensates for all time spent on duty, including non-block

duty hours, but even that compensation is not guaranteed. See id. Rather, a flight attendant is only

entitled to the “minimum duty period credit” for a

given day if he or she has not already earned 3.5 hours

of block time or deadheading credit for the day. Id. In

addition, the Crew Pay Manual explicitly states that

“crewmembers are not paid for time ‘on the clock’

(duty time); instead, they are typically paid only when

the aircraft is moving (block time).” ECF No. 100-9 at

8. This further suggests that non-block duty time goes

uncompensated. Ridgeway v. Wal-Mart Stores, Inc.,

107 F. Supp. 3d 1044, 1052 (N.D. Cal. 2015), motion

to certify appeal denied, No. 08-CV-05221-SI, 2015

WL 4463923 (N.D. Cal. July 21, 2015) (granting summary judgment on plaintiff’s minimum wage claim

because “certain required tasks are specifically designated as unpaid activities” under the employer’s

piece-rate compensation system). Because Virgin’s

formula does not separately compensate flight attendants for duty time that is not block time or

deadheading time, the Court denies Virgin’s motion

for summary judgment that its compensation system

for flight activities complies with California law.

71a

The cases from this district that Virgin relies on

are distinguishable. ECF No. 97 at 31-32. For example, the compensation formula at issue in Oman

included a guaranteed “duty period credit” of one hour

of pay for every two hours of duty, in addition to a

“minimum duty credit” of approximately five hours.

See Oman v. Delta Air Lines, Inc., 153 F. Supp. 3d

1094, 1098-99 (N.D. Cal. 2015). This duty period

credit appeared to factor prominently in the Oman

court’s conclusion that “Delta’s Work Rules ensure

that Flight Attendants are paid for all hours worked.”

Id. at 1105-06. For instance, the court began its analysis by citing to another case in which a court relied

on Delta’s duty period credit to conclude that “Flight

Attendants will be paid, at a minimum, at the rate of

one half of their flight pay for each hour that they

spend working on duty for defendant.” Id. at 1102-03

(quoting DeSaint v. Delta Air lines, Inc., No. CIV.A.

13–11856– GAO, 2015 WL 1888242 (D.Mass. Apr. 15,

2015)). The Booher court similarly dealt with compensation formulas that included a guaranteed duty

period credit and concluded that “Plaintiffs are paid

for all hours worked, based on the minimum guarantee in the Bid Packet and considering all hours

actually worked.” Booher v. JetBlue Airways Corp.,

No. C 15-01203 JSW, 2016 WL 1642929, at *3 (N.D.

Cal. Apr. 26, 2016).

Unlike the compensation formulas at issue in the

cases above, which ensured that flight attendants

were, “at a minimum,” compensated for all hours on

duty, Virgin’s formula does not provide such a guarantee. As explained above, Virgin’s flight attendants

only receive credit for duty hours if they have not already earned 3.5 credits of block time or deadheading

72a

time for the day. Virgin therefore fails to compensate

its flight attendants for all hours worked.

b.

Compensation for Non-Flight

Activities

The Plaintiffs also claim that Virgin fails to pay

for all hours worked doing certain non-flight activities, such as time spent undergoing mandatory drug

testing, attending mandatory training, deadheading,

completing incident reports, and being on reserve

duty. ECF No. 32 ¶ 46.

With the single exception of time spent completing

incident reports, Virgin’s compensation formula accounts for all of the above non-flight work duties when

calculating compensation. ECF No. 45-4 at 12-13. Specifically, it assigns thirty minutes of credit for drug

testing, a flat monthly rate for initial flight attendant

training, 3.5 hours of credit for annual training, and

four hours of credit for airport reserve shifts in which

flight attendants are not assigned to a flight. ECF No.

47-5 at 7, 9; ECF No. 45-4 at 16, 24. Because Virgin’s

formula directly compensates Plaintiffs for these nonflight work duties, albeit via a credit-based system instead of an hourly rate, Plaintiffs cannot succeed on

their claims related to non-payment for these tasks.

Oman, 153 F. Supp. 1098-99 (upholding a credit-based

system that allotted one hour of pay for every two

hours of duty). The Court therefore grants Virgin’s

motion for summary judgment as to claims based on

those activities.

However, Virgin’s compensation formula completely fails to account for time spent completing

incident reports, and the Plaintiffs have presented evidence that they were unable to complete these

mandatory incident reports during block time. ECF

73a

No. 101-29 at 10. The Court therefore denies Virgin’s

motion for summary judgment as to claims based on

the completion of incident reports.

2. Wage Statements

Under § 226 of the California Labor Code, an employer is required to provide “an accurate itemized

wage statement” showing gross wages, total hours

worked, net wages earned, and all applicable hourly

rates in effect during the pay period and the corresponding number of hours worked at each hourly rate,

among other things. Cal. Lab. Code § 226(a). “The employer’s violation of section 226 must be ‘knowing and

intentional.’” Garnett v. ADT LLC, 139 F. Supp. 3d

1121, 1133 (E.D. Cal. 2015), reconsideration denied,

No. 2:14-02851 WBS AC, 2016 WL 146232 (E.D. Cal.

Jan. 13, 2016) (quoting Cal. Labor Code § 226(e)(1)).

Virgin concedes that its wage statements do not

show the effective hourly rate of pay for each hour on

duty, but it claims that its compensation system prevents full compliance and that it nonetheless is

“complying with Section 226 in good faith.” ECF No.

97 at 34. Virgin also admits that, pursuant to its payment policies, its month end wage statement does not

show the actual number of hours worked during that

pay period, but rather just shows 37.5 hours at the

flight attendant’s base rate by default. ECF No. 10130 at 10.

Good faith is not a defense to a wage statement

violation under § 226. Garnett, 139 F. Supp. 3d at

1133-34. Moreover, the fact that Virgin’s wage statement deficiencies are part of a centralized policy that

fails to comply with § 226 suggests that the violation

is knowing and intentional. Id.

74a

The Court therefore denies Virgin’s motion for

summary judgment on the Plaintiffs’ wage statement

claims.

E. Plaintiffs’

Eligibility

Overtime

and

Break

Next, Virgin argues that, because the California

Labor Code does not apply extraterritorially, the

Plaintiffs must show that they worked the requisite

number of hours within California to trigger overtime

and break requirements. ECF No. 97 at 29. Virgin argues that the Plaintiffs cannot do so because time

spent flying in the airspace above California is not

time spent within California. Id.

The Court rejects Virgin’s argument that California wage and hour law cannot apply to flight

attendants while they are in the air. To support its argument, Virgin cites to a provision of the FAA

(§ 40103), but the Court has already rejected Virgin’s

argument for FAA preemption. Although the federal

government has exclusive sovereignty over the United

States airspace and aviation safety, “Congress has not

occupied the field of employment law in the aviation

context and . . . the FAA does not confer upon the

agency the exclusive power to regulate all employment matters involving airmen.” Ventress v. Japan

Airlines, 747 F.3d 716, 722 (9th Cir.), cert. denied, 135

S. Ct. 164 (2014). And the federal employment law

proposed by Virgin, the FLSA, explicitly contemplates

that state wage and hour laws like California’s will

apply concurrently with federal law. 29 U.S.C. § 218.

The only conflicting authority that Virgin presents is

a single footnote in a single, non-controlling district

court case from the Northern District of Illinois. See

Hirst v. Skywest, Inc., No. 15 C 02036, 2016 WL

75a

2986978, at *10, n. 14 (N.D. Ill. May 24, 2016). The

Court does not find the case persuasive.

There is evidence that the Plaintiffs worked more

than eight hours some days such that they qualify for

overtime pay. As explained above, the Plaintiffs’ overtime claims do not seek to apply California law

extraterritorially. Because the alleged wrongful conduct—i.e. Virgin’s decisions about how to compensate

its flight attendants and its payment of flight attendants in accordance with those decisions—occurred in

California, Virgin may be held accountable for that

wrongful conduct under California law regardless of

where the Plaintiffs worked their shifts. In any event,

there is also evidence that Plaintiffs worked shifts

longer than eight hours within California such that

they qualify for overtime pay. For example, Virgin’s

own expert testified that each of the Plaintiffs had at

least one day where they worked in excess of eight

hours within California. ECF No. 101-31 at 3:9-24.

This evidence is sufficient to create a triable issue of

fact regarding whether the Plaintiffs were eligible for

overtime pay.

Although Plaintiffs’ break claims are geographically limited, there is sufficient evidence that the

Plaintiffs worked duty periods solely within California

- for example, on flights between California airports that were long enough to trigger meal period and rest

break eligibility. ECF No. 101-17 (showing Plaintiffs’

scheduled flights between California airports). Virgin’s expert found that, when time spent on California

tarmacs was considered, “the data reflects few instances when Plaintiffs potentially worked enough

hours in California to be eligible for meal periods

(days longer than 5 hours) or rest breaks (days longer

than or equal to 3.5 hours).” ECF No. 98-2 at 6.

76a

Specifically, Virgin’s expert found fifty instances in

which Plaintiff Smith was potentially eligible for a

rest break, four instances in which Plaintiff Bernstein

was potentially eligible for a rest break, and fiftythree instances in which Plaintiff Garcia was potentially eligible for a rest break. Id. He also found thirtyone instances in which Plaintiff Smith was potentially

eligible for a meal period, four instances in which

Plaintiff Bernstein was potentially eligible for a meal

period, and twenty-six instances in which Plaintiff

Garcia was eligible for a meal period. Id. This evidence

is sufficient to create a triable issue of fact regarding

whether Plaintiffs were eligible for breaks when working in California.

The Court accordingly denies Virgin’s motion for

summary judgment on the overtime and break claims.

F. Covered Employees Under the San

Francisco Minimum Wage Ordinance

Next, Virgin argues that the Plaintiffs are not covered employees under the San Francisco Minimum

Wage Ordinance (“SFMWO”). ECF No. 97 at 33. The

SFMWO states that “Employers shall pay Employees

no less than the Minimum Wage for each hour worked

within the geographic boundaries of the City.” S.F.

Admin. Code § 12R.4. “City” is defined to include “the

City and County of San Francisco,” and an “Employee”

is any person who “[i]n a particular week performs at

least two (2) hours of work for an Employer within the

geographic boundaries of the City.” Id., § 12R.3. Although San Francisco International Airport (SFO) is

owned by the City and County of San Francisco, it is

located outside the city limits of San Francisco and in

San Mateo County. Virgin’s training facility is also located outside the City and County of San Francisco.

77a

Plaintiffs fail to address this argument in their opposition. Because the Plaintiffs have failed to show that

they are covered under the SFMWO, the Court grants

summary to Virgin on those claims.

G. Business Expenses

The Plaintiffs claim that Virgin required Plaintiffs Garcia and Smith to maintain a valid passport,

but that Virgin did not indemnify Plaintiffs for the

costs incurred in purchasing and/or renewing passports. ECF No. 32 ¶ 101. However, Virgin argues that

the Plaintiffs have not produced any evidence that

they incurred business expenses related to their passports and, as a result, they cannot prevail on their

claim for failure to indemnify for necessary expenditures. ECF No. 97 at 34-35.

Plaintiff Garcia testified that she obtained her

passport before she began working for Virgin and did

not renew her passport while she was working for Virgin. ECF No. 61-2 at 7:10¬15. Plaintiff Smith

similarly testified that she had a passport before she

started working for Virgin and her passport does not

expire until 2020. ECF No. 61-3 at 23. Plaintiffs fail to

point to any countervailing evidence in their opposition.

The Court therefore grants Virgin’s motion for

summary judgment as to the Plaintiffs’ claim for business expenses under California Labor Code § 2802.

H. Remaining Claims

Because the Court has not dismissed all of the

Plaintiffs’ underlying claims for unpaid wages, it denies Virgin’s motion for summary judgment on the

derivative waiting time penalty, unfair competition,

and Private Attorney General Act (“PAGA”) claims.

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CONCLUSION

For the reasons above, the Court denies in part

and grants in part Virgin’s motion for summary judgment.

IT IS SO ORDERED.

Dated: January 5, 2017

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APPENDIX C

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

____________

No.15-cv-02277-JST

____________

JULIA BERNSTEIN, et al.,

Plaintiffs

v.

VIRGIN AMERICA, INC.,

Defendant

____________

ORDER DENYING MOTION FOR LEAVE TO

FILE A MOTION FOR RECONSIDERATION

Before the Court is Defendant Virgin America,

Inc.’s motion for leave to file a motion for reconsideration or, in the alternative, an order certifying the

summary judgment order for interlocutory appeal.

ECF No. 127. The Court will deny the motion.

I.

MOTION FOR LEAVE TO FILE A MOTION

FOR RECONSIDERATION

Under Civil Local Rule 7–9(a), “any party may

make a motion before a Judge requesting that the

Judge grant the party leave to file a motion for reconsideration of any interlocutory order on any ground

set forth in Civil LR. 7–9 (b).” The party seeking reconsideration must show that at least one of the

following grounds for reconsideration is present:

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(1) That at the time of the motion for leave, a material difference in fact or law exists from that

which was presented to the Court before entry of

the interlocutory order for which reconsideration

is sought . . . ; or

(2) The emergence of new material facts or a

change of law occurring after the time of such order; or

(3) A manifest failure by the Court to consider material facts or dispositive legal arguments which

were presented to the Court before such interlocutory order.

Civ. L.R. 7˗9(b).

Virgin seeks reconsideration of the Court’s summary judgment order on all three grounds. ECF No.

127 at 21. First, Virgin argues that the Court manifestly failed to consider facts and dispositive legal

arguments related to federal preemption of the Plaintiffs’ meal and rest break claims and the application

of California law to Plaintiff Bernstein. ECF No. 127

at 21-26, 30-32. Second, Virgin argues that the California Supreme Court’s recent decision in Augustus v.

ABM Sec. Servs., Inc. “is new, material authority that

impacts the preemption analysis.” Id. at 21. Finally,

Virgin argues that “the Summary Judgment Order

creates a change in the law of the case impacting the

Class Certification Order.” Id. After careful consideration of the motion for leave, the Court concludes that

none of the grounds for reconsideration is satisfied

here.

A. Field Preemption

With respect to field preemption, Virgin argues

that “the Court did not address why in-flight safety is

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not a proper field for consideration.” ECF No. 127 at

9. The Court already considered, and rejected, this argument. ECF No. 121 at 23-24, n. 11-12; Civ. L.R. 79(c) (prohibiting repetition of argument in a motion for

leave to file a motion for reconsideration).

Virgin also argues that the Court “manifestly

failed to consider that a single regulation can occupy

a relevant field to warrant preemption of a state law,

the purpose and history of C.F.R. § 121.467, or the nature of the ITMs’ work.” ECF No. 127 at 9. The Court

did not reject Virgin’s field preemption argument

based solely on the fact that there was just a single

regulation that addressed the defined field. The Court

explained that 14 C.F.R. § 121.467(b), in addition to

being the “only [Federal Aviation Regulation] that actually regulates the provision of breaks to flight

attendants,” “can hardly be described as comprehensive, detailed or pervasive enough to justify federal

preemption of the field.” ECF No. 121 at 24. That regulation simply establishes a maximum duty period of

fourteen hours (with some exceptions) and a minimum

rest period of nine hours between duty periods; it says

absolutely nothing about the provision of meal or rest

breaks during those duty periods. This contrasts

starkly with the “exhaustive” regulation at issue in

Federation of the Blind, which “pervasively regulate[d] the accessibility of airport kiosks” and

“inform[ed] airlines with striking precision about the

attributes their accessible kiosks must have.” Federation of the Blind, 813 F.3d at 734-35.

B. Conflict Preemption

With respect to conflict preemption, Virgin argues

that the Court manifestly failed to consider the conflict between the “unpredictable” and “irregular”

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factual context of airline employment, on the one

hand, and the “rigid and mandatory requirements of

California law,” on the other hand. ECF No. 127 at

9˗10. Again, the Court already considered and rejected

this argument. ECF No. 121 at 25.

Virgin argues that the California Supreme Court’s

recent decision in Augustus v. ABM Sec. Servs., Inc.,

2 Cal. 5th 257 (2016) “is new, material authority that

impacts the preemption analysis.” ECF No. 127 at 21,

24, n. 9. That case does not represent a material

change in the law; it simply repeats the well-established principle that, “[d]uring required rest periods,

employers must relieve their employees of all duties

and relinquish any control over how employees spend

their break time.” Augustus, 2 Cal. 5th at 260. Indeed,

the Augustus court cited a 2012 case for that proposition. See id. (citing Brinker Restaurant Corp. v.

Superior Court, 53 Cal. 4th 1004, 1038˗39 (2012)). In

fact, in several respects Augustus supports, rather

than undermines, this Court’s prior order. The Augustus court explained that “[s]everal options nonetheless

remain available to employers who find it especially

burdensome to relieve their employees of all duties

during rest periods—including the duty to remain on

call.” 2 Cal. 5th at 272. Those options include

“provid[ing] employees with another rest period to replace one that was interrupted,” or “pay[ing] the

premium pay set forth in [the relevant wage order and

Cal. Labor Code Section 226.7].” Id.1 The Augustus

1 The wage order for the transportation industry similarly

allows employers to pay a premium of one hour of pay at the employee’s regular rate for each workday that a meal period or rest

period is not provided. Cal. Code Regs. tit. 8, § 11090, Wage Order 9-2001 ¶¶ 11(D), 12(B).

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court clarified that “[n]othing in our holding circumscribes an employer’s ability to reasonably reschedule

a rest period when the need arises.” Id. at 271. The

Augustus court also acknowledged the relevant wage

order’s exception for on-duty meal breaks when “the

nature of the work prevents an employee from being

relieved of all duty and when by written agreement.”

Augustus, 2 Cal. 5th at 264, n. 9.2 The court noted yet

another “option for employers” who consistently fail to

provide duty-free breaks: “If an employer seeks to be

excused generally from compliance with the obligation

to provide rest periods free of all duty and employer

control, the employer should avail itself of the opportunity to request from the DLSE an exemption.” Id. at

281.3 Id. at 272, n. 14.

In sum, California’s meal and rest break requirements give employers like Virgin some flexibility if the

nature of the employee’s work prevents off-duty

breaks, and therefore Virgin can comply with both the

Federal Aviation Regulations and California’s meal

and rest break requirements. Virgin, who bears the

burden of proof with respect to the affirmative defense

of federal preemption, does not claim to have availed

itself of any of these options and has failed to demonstrate a conflict between the federal regulations and

California’s meal and rest break requirements.

2 The wage order for the transportation industry includes a

similar provision. Cal. Code Regs. tit. 8, § 11090, Wage Order 92001 ¶ 11(C).

3 The wage order for the transportation industry also allows

an employer to seek an exemption from the rest period requirement if, in the discretion of the DLSE, the rest period

requirement “would not materially affect the welfare or comfort

of employees and would work an undue hardship on the employer.” Cal. Code Regs. Tit. 8, § 11090, Wage Order 9-2001 ¶ 17.

84a

Bruesewitz v. Wyeth LLC, 562 U.S. 223, 251, n. 2

(2011).

C. ADA Preemption

Next, Virgin argues that the Court improperly relied on the Ninth Circuit’s decision in Dilts v. Penske

Logistics, LLC, 769 F.3d 637 (9th Cir. 2014) because

that decision was “limited in its reach” and should not

apply to interstate airline employees. ECF No. 127 at

10, 25-26. Virgin further argues that the Court “disregarded” pre-Dilts case law and failed to consider

“material evidence” regarding the impact that California’s meal and rest break laws would have on Virgin’s

routes and services. Id.

As the Court explained in the summary judgment

order, “the Ninth Circuit’s decision in Dilts v. Penske

Logistics, LLC . . . squarely rejected the preemption

argument that Virgin makes here.” ECF No. 121 at

26. The Court also explained that Dilts is not distinguishable on the ground that it dealt with preemption

under the Federal Aviation Administration Authorization Act (“FAAAAA”), rather than the ADA, because

“‘the FAAAA was modeled on the [ADA]’ and ‘us[es]

text nearly identical to the [ADA’s], including the exact preemption language at issue in this case.” Id.

(quoting Dilts, 769 F.3d at 643-44).4 As the Dilts court

Virgin argues that there is a difference between the

preemption language in the ADA and the FAAAA. ECF No. 127

at 26. The only difference between the ADA and the FAAAAA “is

that the latter contains the additional phrase ‘with respect to the

transportation of property,’ which is absent from the [ADA] and

which ‘massively limits the scope of preemption ordered by the

FAAAA.’” Dilts, 769 F.3d at 644 (internal citations omitted). That

difference is completely immaterial here, and therefore this argument is meritless.

4

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explained, “Congress meant to create parity between

freight services provided by air carriers and those provided by motor carriers.” Dilts, 769 F.3d at 644. In

sum, the Court rejected Virgin’s ADA preemption argument because Dilts is directly on point, “all of the

cases that Virgin relie[d] on predate [Dilts],” and “Virgin offer[ed] no persuasive argument as to why

identical language in a statute with an identical purpose should be interpreted differently merely because

it applies to a different industry.” ECF No. 121 at

26˗27.

Virgin now relies on the amicus brief that the Department of Transportation filed in Dilts to argue that

the holding should not apply to airline employees.

ECF No. 127 at 26. As an initial matter, this is a new

argument that was not previously “presented to the

Court” as required by Local Rule 7˗9(b)(3). “Generally,

motions for reconsideration . . . are not the place for

parties to make new arguments not raised in their

original briefs.” Gray v. Golden Gate Nat. Recreational Area, 866 F. Supp. 2d 1129, 1132 (N.D. Cal.

2011) (citing Northwest Acceptance Corp. v.

Lynnwood Equip., Inc., 841 F.2d 918, 925–26 (9th Cir.

1988)). In any event, and contrary to Virgin’s assertion, the Ninth Circuit did not “heavily rel[y]” on that

amicus brief. ECF No. 127 at 25. Although the court

found the Department of Transportation’s amicus

brief to be “persuasive,” it noted that it “would reach

the same result in the absence of the agency’s brief,”

and explained at the outset of its ADA preemption

analysis that this was not even a “close case[].” Dilts,

769 F.3d at 650, 647. Given the limited role that the

amicus brief played in the Ninth Circuit’s decision, the

Court finds it inappropriate to consider portions of

that brief that the Ninth Circuit did not even mention

86a

in its opinion. This approach is particularly sound in

light of Virgin’s failure to previously present this argument to the Court. 5

Virgin also tries to distinguish Dilts on the ground

that “the Ninth Circuit acknowledged that it was dealing exclusively with intrastate drivers who worked

entirely within California and, thus, were not subject

to the laws of any other state.” ECF No. 127 at 26 (emphasis in original). This argument fails for two

reasons.

First, although this factual distinction could be

relevant to other issues in this case—namely, the extraterritorial application of California law and the

dormant commerce clause analysis6—it is unclear how

the interstate nature of the job impacts the ADA

preemption analysis. Indeed, the Dilts court explained

that “[t]he fact that laws may differ from state to state

is not, on its own, cause for FAAAA preemption” because “Congress was concerned only with those state

laws that are significantly ‘related to’ prices, routes,

5 The Court also notes that at least two district courts have

applied Dilts to the airline industry. See Valencia v. SCIS Air

Sec. Corp., 241 Cal. App. 4th 377, 385 (2015), review denied (Jan.

27, 2016) (holding that plaintiff’s meal and rest break claims

against employer who performed security checks on catering

equipment for airplanes was not preempted by the ADA) (citing

Dilts, 769 F.3d at 637); Air Transp. Ass’n of Am., Inc. v. Port of

Seattle, No. C14-1733-JCC, 2014 WL 12539373, at *3 (W.D.

Wash. Dec. 19, 2014) (finding that the plaintiffs, an airline trade

organization and an airline contractor, were not likely to succeed

on the merits of their claim that the Port of Seattle’s rules regarding employment standards, compensation, and time off for

covered employees were preempted by the ADA) (citing Dilts, 769

F.3d at 647).

6 Virgin does not seek reconsideration regarding, and Dilts

does not address, either of those issues.

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or services.” Dilts, 769 F.3d at 647˗48. The Dilts court

ultimately concluded that California’s meal and rest

break laws—the exact same laws at issue in this

case—are not related to prices, routes, or services, and

are therefore “permissible” even though they may differ from similar laws adopted in neighboring states.

Id.

Second, the only mention of the “intrastate” nature of the Dilts employees’ work appears as dicta in

a footnote. Id. at 648, n. 2. There, the Dilts court explained that it did not need to resolve the “open issue”

as to whether a federal law can preempt a state law

on an as-applied basis because it found that “California’s meal and rest break laws, as generally applied to

motor carriers, are not preempted.” Id. It went on to

explain that, if it were to construe the preemption argument as an “as-applied” challenge with respect to

the particular defendant motor carriers in that case,

“the argument against preemption [is] even stronger”

because “Plaintiff drivers work on short-haul routes

and work exclusively within the state of California”

and “are not confronted with a ‘patchwork’ of hour and

break laws.” Id. This footnote makes clear that the intrastate nature of the employees’ work provided

further support for, but was not essential to, the

court’s holding. To the extent the interstate nature of

the flight attendants work is somehow relevant to

ADA preemption, Virgin is not being asked to comply

with a “patchwork” of each state’s wage and hour

laws. ECF No. 121 at 16˗17. In fact, “Virgin has presented no evidence to support its contention that it

will be required to comply with other states’ laws.” Id.

Rather, Virgin is simply being required [to] comply

with the law of the state where it chose to headquarter

its business, where its California-resident employees

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performed work based out of California airports, and

where it made critical decisions regarding how it

would compensate its employees that are not being

challenged in this lawsuit.” Id. Therefore, as in Dilts,

applying California’s meal and rest break laws to Virgin “would not contribute to an impermissible

‘patchwork’ of state-specific laws.” Dilts, 769 F.3d at

647.

D. Application

Bernstein

of

California

Law

to

Next, Virgin argues that the Court’s holding regarding the application of California law to Plaintiff

Bernstein fails to consider undisputed, material evidence. ECF No. 127 at 30. Specifically, Virgin argues

that the Court failed to consider that “Bernstein admits that she lived in New York in 2011 and in Florida

in 2012” and that “she did not file a California income

tax return in 2012—a year in which her paystubs were

addressed to a Florida address.” ECF No. 127 at 30˗31.

Virgin contends that, because “Bernstein was not a

California resident in 2012, she cannot be a member

of the California Resident Subclass for that year, and

at a minimum, cannot assert a claim under California

Labor Code § 226 (Wage Statements) for that time period.” Id. at 31, n. 12. Virgin also argues that

Bernstein was not based out of San Francisco International Airport (“SFO”) during the course of her

employment with Virgin. Id. at 31.

Bernstein’s residency in 2012 is a non-issue:

Plaintiffs already conceded in their motion for class

certification briefing that, “[a]lthough Bernstein filed

taxes in California in 2011 (a year in which she transitioned from California to New York) and will be

included in the subclass for 2011, she did not file taxes

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in California in 2012, and will therefore be excluded

from the subclass in 2012.” ECF No. 84 at 14, n. 26.

The Court now reaffirms that the fact that Bernstein

filed her taxes in California in 2011 is sufficient to

both identify her as a member of the California Resident Subclass for that year and to create a triable

factual issue regarding her residency.7 ECF No. 121

at 8, n. 2; see also Sarviss v. Gen. Dynamics Info.

Tech., Inc., 663 F. Supp. 2d 883, 899 (C.D. Cal. 2009)

(finding that the plaintiff was “a California resident

who presumably received his pay in California” because “he paid California taxes”). Moreover, given the

wealth of other factors that support the application of

California law, including Virgin’s deep ties to California and the fact that the wrongful conduct occurred in

California, the fact that Bernstein did not file her

taxes in California in 2012 does not alter this Court’s

conclusion that California law applies to her claims.8

See ECF No. 121 at 7-8.

Virgin’s arguments regarding Bernstein’s base

airport and the nature of her flight schedules also fail.

Bernstein declared that “[she] was based at SFO for

7 In addition, Bernstein’s wage statements consistently re-

flect a California address between June 2010 and January 2012.

ECF No. 101˗23 at 34˗71.

8 The Court also notes that the Class is defined to include

“[a]ll individuals who have worked as California-based flight attendants of Virgin America, Inc. at any time during the period

from March 18, 2011 . . . through the date established by the Court

for notice of certification of the Class.” ECF No. 104 at 28-29 (emphasis added). The California Resident Subclass uses the same

time frame and includes “[a]ll individuals who have worked as

California-based flight attendants of Virgin America, Inc. while

residing in California at any time during the Class Period.” Id.

(emphasis added).

90a

[her] entire employment at Virgin” because Virgin

only had one based airport (SFO) during her employment with them. ECF No. 101-33 ¶ 3-4. Virgin’s

Director of Inflight confirmed that “[a]ll InFlight

Team Members were based out of SFO until LAX became a base in April 2013.” ECF No. 71-3 ¶ 8. Even

though her pairings started and ended in New York,

Plaintiffs’ expert calculated that “[o]ver 95 percent of

flights that Julia Bernstein worked within the sample

either arrived to or departed from a California airport,

and she performed work in California for 100 percent

of her workdays.” ECF No. 101-38 ¶ 6. Even Virgin’s

expert concluded that Bernstein spent entire days in

California during which she was potentially eligible

for a meal period and rest break. ECF No. 98-2 at 6.

Therefore, the Court did not manifestly fail to consider

evidence regarding Bernstein’s base airport and the

nature of her flight schedules. ECF No. 121 at 2.

E. Reconsideration of the Court’s Class

Certification Order

Finally, Virgin argues that the Court’s summary

judgment order warrants reconsideration of the prior

class certification order. ECF No. 127 at 32-33. Virgin

argues that, because Bernstein’s 2011 California income tax return “create[d] a triable factual issue”

regarding her residency, and did not “confirm Bernstein’s residency,” the Court must reconsider its prior

holding that it could identify California Resident Subclass members by looking to Virgin’s business records

or tax records. Id. Virgin also argues that individual

class member investigations into residency and the

right to recover for meal and rest break claims will

now predominate over common questions. ECF No.

127 at 33.

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Virgin misunderstands both the ascertainability

requirement and the Court’s class certification order.

The purpose of the ascertainability requirement is to

ensure that the class definition allows a court to feasibly identify class members. Vietnam Veterans of

Am. v. C.I.A., 288 F.R.D. 192, 211 (N.D. Cal. 2012);

Newberg on Class Actions § 3:3 (5th ed.). Again, the

Court can feasibly do so here by looking to Virgin’s

business records and the state where each flight attendant paid income taxes. ECF No. 104. This

information will allow the Court to easily identify both

California-based and California resident flight attendants during the relevant time period.9 Id. As the Court

explained in the class certification order, ascertainability does not require that every member of the class

ultimately win on the merits, and Virgin cannot “defeat class certification by pointing to the possibility

that certain members of the class will not be able to

recover on their claims.” ECF No. 104 at 20. Therefore,

the fact that the Court did not definitively “confirm

Bernstein’s residency” as a matter of law does not defeat class certification.

Nor will individual questions regarding residency

and breaks predominate over issues common to the

class. Although residency turns on several factors,

California’s Franchise Tax Board instructs potential

filers to carefully consider those factors to determine

whether they are a California resident who is subject

to California income tax. See Whittell v. Franchise

9 Moreover, as the Court noted in its class certification order,

“every member of the proposed California Resident Subclass is

also a member of the proposed Class.” ECF No. 104 at 11. Virgin

does not dispute that its records allow the Court to easily identify

Class members.

92a

Tax Bd., 231 Cal. App. 2d 278, 286–88 (Ct. App. 1964);

State of California Franchise Tax Board, Publication

1031,

available

online

at

https://www.ftb.ca.gov/forms/2015/15_1031.pdf. Because California Resident Subclass members have

already made a determination regarding their residency, filed a California tax return, and/or provided

Virgin with a California address during the class period, residency will likely be undisputed for the vast

majority of subclass members, thus reducing the potential for mini-trials regarding this issue. And, just

as the parties’ respective experts calculated the Plaintiffs’ missed breaks by looking at the length of their

duty periods (which are available on in the AIMS and

CrewTrac records), the same calculation can be done

for class members. ECF No. 101-38 at 14-15; ECF No.

98-2 at 6-7. As Virgin admitted in its motion to strike

the Plaintiffs’ expert report, the number of breaks that

each class member missed is a damages issue, not a

liability issue. ECF No. 74 at 6. And “damage calculations alone cannot defeat certification.” Leyva v.

Medline Indus. Inc., 716 F.3d 510, 513 (9th Cir. 2013)

(quoting Yokoyama v. Midland Nat’l Life Ins. Co., 594

F.3d 1087, 1094 (9th Cir. 2010)). Indeed, because

“damages determinations are individual in nearly all

wage-and-hour class actions,” decertifying a class on

that basis “may well be effectively to sound the deathknell of the class action device.” Id. (quoting Brinker

Rest. Corp. v. Superior Court, 53 Cal. 4th 1004

(2012)). The overwhelming common issues in this

case—namely, whether “Virgin’s company-wide policies regarding its flight attendants’ working

conditions and pay” violate California law—remain

the same. ECF No. 104 at 20-25.

93a

***

The Court denies the motion for leave to file a motion for reconsideration.

II. MOTION

FOR

CERTIFICATION

INTERLOCUTORY APPEAL

FOR

As an alternative to reconsideration, Virgin moves

to certify the following two questions for interlocutory

appeal pursuant to 28 U.S.C. § 1292(b): (1) whether

California’s meal and rest break laws are preempted

under any of the three preemption theories advanced

by Virgin; and (2) whether any class or subclass based

on residence can be maintained when individual triable issues of fact would exist as to each putative class

member’s residence. ECF No. 127 at 11, 26-30.

The final judgment rule ordinarily provides that

courts of appeal shall have jurisdiction only over “final

decisions of the district courts of the United States. 28

U.S.C. § 1291. However, “[w]hen a district judge, in

making in a civil action an order not otherwise appealable under this section, shall be of the opinion that

such order involves a controlling question of law as to

which there is substantial ground for difference of

opinion and that an immediate appeal from the order

may materially advance the ultimate termination of

the litigation, he shall so state in writing in such order.” 28 U.S.C. § 1292(b). “Certification under

§ 1292(b) requires the district court to expressly find

in writing that all three § 1292(b) requirements are

met.” Couch v. Telescope Inc., 611 F.3d 629, 633 (9th

Cir. 2010). “These certification requirements are (1)

that there be a controlling question of law, (2) that

there be substantial grounds for difference of opinion,

and (3) that an immediate appeal may materially advance the ultimate termination of the litigation.” In re

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Cement Antitrust Litig. (MDL No. 296), 673 F.2d

1020, 1026 (9th Cir. 1981), aff’d sub nom. Arizona v.

Ash Grove Cement Co., 459 U.S. 1190 (1983). Section

1292(b) is a departure from the normal rule that only

final judgments are appealable, and therefore must be

construed narrowly.” James v. Price Stern Sloan, Inc.,

283 F.3d 1064, 1067 n.6 (9th Cir. 2002). To that end,

“section 1292(b) is to be applied sparingly and only in

exceptional cases.” In re Cement Antitrust Litigation,

673 F.2d at 1027.

Virgin has failed to show that there is a substantial ground for difference of opinion regarding federal

preemption of Plaintiffs’ meal and rest break claims.

Courts determine whether there is a “substantial

ground for difference of opinion” by examining “to

what extent the controlling law is unclear.” Couch,

611 F.3d at 633. Traditionally, courts will find that a

substantial ground for difference of opinion exists

where “the circuits are in dispute on the question and

the court of appeals of the circuit has not spoken on

the point, if complicated questions arise under foreign

law, or if novel and difficult questions of first impression are presented.” Id. (quoting 3 Federal Procedure,

Lawyers Edition § 3:212 (2010) (footnotes omitted)).

The Ninth Circuit’s decision in Dilts dealt with the exact same laws at issue here—California’s meal and

rest break requirements—and held that those laws

were not preempted under the FAAAA, which was

modeled on the ADA includes the exact preemption

language at issue here. Dilts, 769 F.3d at 647˗48 (holding that “California’s meal and rest break

requirements plainly are not the sorts of laws ‘related

to’ prices, routes, or services that Congress intended

to preempt,” but rather “normal background rules for

almost all employers doing business in the state of

95a

California”). In doing so, the Ninth Circuit rejected

the same arguments that Virgin makes here, explaining that these arguments “equate[] to nothing more

than a modestly increased cost of doing business,

which is not cause for preemption.” Id. at 647˗50. The

Dilts court proposed the same solution as this Court:

“Defendants are at liberty to schedule service whenever they choose. They simply must hire a sufficient

number of drivers and stagger their breaks for any

long period in which continuous service is necessary.”

Id. Virgin fails to cite to a single post-Dilts case that

would suggest “substantial grounds for difference of

opinion” regarding its application to airline employees. If anything, post-Dilts cases suggest the opposite.

See Valencia v. SCIS Air Sec. Corp., 241 Cal. App. 4th

377, 385 (2015), review denied (Jan. 27, 2016) (applying Dilts to the airline industry); Air Transp. Ass’n of

Am., Inc. v. Port of Seattle, No. C14-1733-JCC, 2014

WL 12539373, at *3 (W.D. Wash. Dec. 19, 2014)

(same). Nor has Virgin shown that there is a substantial ground for difference of opinion with respect to its

other federal preemption theories.

Virgin fails to present any arguments as to why

the second question should be certified for interlocutory appeal. Because the Court will not need to

conduct factual inquiries into each putative class

member’s residence, the answer to this question will

not materially affect the outcome of this litigation. In

re Cement Antitrust Litig., 673 F.2d at 1026 (“[A]ll

that must be shown in order for a question to be ‘controlling’ is that resolution of the issue on appeal could

materially affect the outcome of litigation in the district court.”). While it is possible to imagine a case in

which a court would need to inquire into each individual class member’s residence, this is not such a case.

96a

Virgin does not dispute that two out of the three

named Plaintiffs are California residents. And, as explained above, residence will likely be undisputed

with respect to most class members because they already made a residence determination by filing their

taxes in California and providing Virgin with a California mailing address. To the extent Virgin disputes

whether certain individual class members were actually California residents, those individualized

inquiries pale in comparison to the overwhelming

common issues in this case, and thus do not affect the

class certification analysis. For the same reasons, the

Court finds that an immediate appeal would not “materially advance the ultimate termination of the

litigation.” In re Cement Antitrust Litig. (MDL No.

296), 673 F.2d at 1026. In the unlikely event that individualized

inquiries

regarding

residence

predominate or otherwise render class treatment unmanageable, the Rules allow a district court to alter

or amend a prior class certification order at any time

before final judgment. Fed. R. Civ. P. 23(c)(1)(C). As a

result, this is not an “exceptional case[]” in which certification under Section 1292(b) is necessary to avoid

expense and delay. In re Cement Antitrust Litigation,

673 F.2d at 1027.

CONCLUSION

The Court denies the motion in its entirety.

IT IS SO ORDERED.

Dated: March 27, 2017

97a

APPENDIX D

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

____________

No. 15-cv-02277-JST

____________

JULIA BERNST

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