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noting that non-separated employees do not have standing to assert claims under California's waiting-time statute
Summary of this case from Wuest v. Cal. Healthcare W.Opinion
Case No. EDCV 06-406-VAP (OPx).
May 25, 2006 [Motions filed on April 20, 2006.]
Defendant BCI Coca-Cola Bottling Company of Los Angeles' Motion to Dismiss and Motion to Strike came before the Court for hearing on May 22, 2006. After reviewing and considering all papers filed in support of, and in opposition to, the Motions, as well as the arguments advanced by counsel at the hearing, the Court GRANTS the Motions.
I. BACKGROUND
Plaintiffs Noe Pulido, Pedro Galindo, and Marcos Flores filed a class action Complaint ("Complaint") in the California Superior Court for San Bernardino County on March 10, 2006. The Complaint names as Defendants Coca-Cola Enterprise, Inc. ("Coca-Cola") and BCI Coca-Cola Bottling Company of Los Angeles ("BCI"). The Complaint alleges it is filed on behalf of all persons employed by Defendants as non-unionized, hourly employees who "worked through state mandated lunch and break periods without compensation." [Complaint ("Compl.") ¶ 12.]
The named Plaintiffs allege that Defendants have violated California's wage and hour laws since February 2002 by maintaining a policy of "permitting, encouraging, and/or requiring" their "bulk merchandiser employees" to work without pay through break and lunch periods required by the state of California. [Id. ¶ 2.]
The Complaint lists the following six Claims against both Defendants:
(1) Failure to Provide Meals or Rest Periods;
(2) Failure to Timely Pay Wages Upon Termination, Discharge and/or Severance from Employment;
(3) Violation of California Labor Code § 226 — Itemized Wage Statements;
(4) Failure to Timely Pay Wages Upon Termination, Discharge and/or Severance from Employment;
(5) Violation of California Business and Professions Code § 17200, et seq.; and
(6) Conversion.
BCI removed the case to this Court on April 14, 2006, under the Class Action Fairness Act of 2005, and six days later filed a Motion to Dismiss pursuant to Federal Rule of Civil Procedure 12(b) (6) ("Rule 12(b) (6)"), as well as a Motion to Strike Portions of Plaintiffs' Complaint Pursuant to Federal Rule of Civil Procedure 12(f) ("Rule 12(f)"). Plaintiffs filed Opposition to BCI's Rule 12(b) (6) Motion on May 8, 2006, and to the Rule 12(f) Motion on May 10, 2006. BCI filed Replies for both Motions on May 12, 2006.
Plaintiffs' Opposition to the BCI's Rule 12(f) Motion to Strike was filed two days late. See L.R. 7-9 (requiring opposition papers to be filed at least 14 days before a hearing). BCI's Motions were set for hearing on May 22, 2006, making Opposition due by May 8, 2006. Although the Court has exercised its discretion to consider the Opposition to this Motion, future late submissions may not be accepted.
II. Motion to Dismiss Under Federal Rule of Civil Procedure 12(b) (6)
A. Legal StandardUnder Rule 12(b) (6), a party may bring a motion to dismiss for failure to state a claim upon which relief can be granted. Dismissal is appropriate when it is clear that no relief could be granted under any set of facts that could be proven consistent with the allegations set forth in the complaint. See Williamson v. Gen. Dynamics Corp., 208 F.3d 1144, 1149 (9th Cir. 2000); Big Bear Lodging Ass'n v. Snow Summit, Inc., 182 F.3d 1096, 1101 (9th Cir. 1999).
The Court must view all allegations in the complaint in the light most favorable to the non-moving party and must accept all material allegations — as well as any reasonable inferences to be drawn from them — as true. See Big Bear Lodging Ass'n, 182 F.3d at 1101; Am. Family Ass'n, Inc. v. City and County of San Francisco, 277 F.3d 1114, 1120 (9th Cir. 2002).
The scope of review under Rule 12(b) (6) is generally limited to the contents of the complaint. Clegg v. Cult Awareness Network, 18 F.3d 752, 754 (9th Cir. 1994). Nevertheless, "a document is not `outside' the complaint if the complaint specifically refers to the document and if its authenticity is not questioned." Branch v. Tunnell, 14 F.3d 449, 453 (9th Cir. 1993), overruled on other grounds by Galbraith v. Santa Clara, 307 F.3d 1119, 1125-27 (9th Cir. 2002). The Court may also consider exhibits submitted with the complaint, Hal Roach Studios v. Richard Feiner Co., 896 F.2d 1542, 1555 n. 19 (9th Cir. 1990), and "take judicial notice of matters of public record outside the pleadings," Mir v. Little Co. of Mary Hosp., 844 F.2d 646, 649 (9th Cir. 1988) (quotation marks omitted).
B. Discussion
1. Claim Two: Failure to Pay Timely Wages Upon Termination, Discharge or Severance from Employment
Plaintiffs allege that they were not "paid appropriate wages for having been deprived of meal and rest periods. . . ." [Compl. ¶ 21.]
Plaintiffs bring this Claim under California Labor Code §§ 201, 202, and 203 ("sections 201-03"). Those statutes, in relevant part, state:
If an employer discharges an employee, the wages earned and unpaid at the time of discharge are due and payable immediately.
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 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.
If an employer willfully fails to pay, without abatement or reduction, in accordance with Sections 201, 201.5, 202, and 205.5, any wages of an employee who is discharged or who quits, the wages of the employee shall continue as a penalty from the due date thereof at the same rate until paid or until an action therefor is commenced; but the wages shall not continue for more than 30 days.
Cal. Lab. Code § 203.
BCI correctly points out that the three named Plaintiffs "do not and cannot allege that they quit or have been discharged." [BCI's Motion to Dismiss ("MTD") at 13.] In fact, according to BCI, "they are currently employed by BCI." [Id.] BCI argues that as "current employees," the named Plaintiffs do not have a valid claim for damages under section 203. [Id.]
Section 201(a) refers to an employer's discharge of an employee, section 202(a) refers to an employee's resignation, and section 203 refers to "an employee who is discharged or who quits." Plaintiffs' Complaint, however, states: "Plaintiffs Noe Pulido, Pedro Galindo and Marcos Flores are employees of Coke. . . ." [Compl. ¶ 13 (emphasis added).] Hence, because the named Plaintiffs all allege they remain employed by Defendants, they do not have valid claims under section 203.
That this case has been filed as a class action is of no import. See Pence v. Andrus, 586 F.2d 733, 737 (9th Cir. 1978) ("in class actions, the named representatives must allege and show that they personally have been injured, not that injury has been suffered by other, unidentified members of the class to which they belong and which they purport to represent.") Accordingly, the named Plaintiffs, on the face of their Complaint, have not properly alleged violations of sections 201 and 202, and they are not entitled to damages under section 203.
a. Section 226.7: Wages or Penalty?
Even if the named Plaintiffs had left Defendants' employ, they still would fail to state a claim under sections 201 through 203. Plaintiffs' claim under these sections is premised, at least in part, on Defendants' alleged violation of California Labor Code § 226.7 ("section 226.7"). [Plaintiffs' Opposition to BCI's Motion to Dismiss ("Opp'n to MTD at 7.").] Section 226.7 states:
(a) No employer shall require any employee to work during any meal or rest period mandated by an applicable order of the Industrial Welfare Commission.
(b) If an employer fails to provide an employee a meal period or rest period in accordance with an applicable order of the Industrial Welfare Commission, the employer shall pay the employee one additional hour of pay at the employee's regular rate of compensation for each work day that the meal or rest period is not provided.
In other words, Plaintiffs' second claim alleges that Defendants failed to pay them money owed to them under section 226.7(b) when they left Defendants' employ. [Compl. ¶¶ 15, 21.]
BCI argues that Defendants were not required to pay any amounts to Plaintiffs under section 226.7(b), because sections 201(a) and 202(a) require payment of wages earned and unpaid at the time of discharge or termination or within seventy-two hours of the employee's resignation, and section 203 mandates a penalty for unpaid wages. [MTD at 5-6.] Because any amounts owing for unpaid meal or rest breaks were penalties, not wages, BCI contends, section 226.7(b) does not apply to the alleged failure to pay. [Id.]
Thus, the key question as to whether former employees can bring a section 203 claim based on the failure to make section 226.7 payments is "whether the payment for violation of Labor Code § 226.7 is a wage or a penalty." [Id. at 6.] If the section 226.7(b) payment is a wage, it must be paid according to the procedures set forth in sections 201(a) and 201(b), or else the employer is subject to the penalty under section 203. If the section 226.7(b) payment is a penalty, on the other hand, "there can be no violation of Labor Code §§ 201, 202, and 203." [Id.] BCI argues that the section 226.7(b) payment is a penalty, [id.], while Plaintiffs assert that it is wages. [Opp'n to MTD at 4.]
There is a split among the various courts that have considered whether statutory damages are a penalty or a wage; two California appellate courts have held the statutory damages are penalties, while one has held that the damages are wages. The California Supreme Court has granted review of, but has not yet decided, those three cases. Additionally, at least two decisions in the Central District of California have diverged on the issue.
In Murphy v. Kenneth Cole Productions, 36 Cal. Rptr. 3d 418, 440 (Cal.App. 1 Dist. 2005), review granted 40 Cal Rptr. 3d 750 (Feb. 22, 2006), the California Court of Appeal found that section 226.7 damages were penalties rather than wages, reasoning that the "intent and effect" of the statute "is to impose a penalty." Id. at 436. The Murphy court pointed out that California case law considers damages consisting of sums larger than the actual losses to be penalties, Id. at 437, and section 226.7's legislative history revealed that it was enacted as a deterrent to employers and was coercive in nature. Id. at 437-38. Finally, the Court noted that the California Department of Industrial Relations Division of Labor Standards Enforcement ("DLSE") had recently changed its position, and now classifies these statutory damages as a penalty. Id. at 439.
Likewise, in Mills v. Superior Court, 38 Cal. Reptr. 3d 497, 504 (Cal.App. 2 Dist., 2006), review granted ___ Cal. Reptr. 3d ___, 2006 WL 1229143 (April 12, 2006), another California appellate court held that these statutory damages should be considered a penalty. The Mills court found the language of section 226.7 ambiguous as to whether the payments required under the statute were a penalty or wages. Id. at 500-01. After examining the legislative history, however, the court determined them a penalty, reasoning that to define such payments as wages would conflict directly with the definition of the term "wages" throughout the Labor Code, which generally regards wages as having a directly correlation between the amount paid by the employer and the labor provided. Id. at 501-02. As "the payment due under section 226.7 has nothing to do with the amount of additional time actually worked," the statutory damages must be considered a penalty. Id. at 504.
On the other hand, the California Court of Appeal decidingNational Steel and Shipbuilding Co. v. Superior Court, 38 Cal. Rptr. 3d 253, 263 (Cal.App. 4 Dist., 2006), review granted, ___ Cal. Rptr. 3d ___, 2006 WL 1229140, reached the opposite conclusion. There, the court, based on section 226.7's legislative history, held that the statutory damages were wages, thus triggering the statute of limitations applicable to a wage claim versus that for a penalty. Id. at 257.
Noting that the payment to which the statute makes reference was susceptible to interpretation as either wages or a penalty,id. at 258, ("payment appears to be a penalty against the employer in the form of a wage to the employee"), the National Steel court relied on a change from the original version of the statute, containing a two-part damage clause, to the form eventually enacted, with self-executing penalties. Id. at 259-60 ("The Senate amendments also eliminated the need for an employee to file an enforcement action and instead created an affirmative obligation on the employer to pay the employee the one hour's pay. . . ."). Accordingly, damages under section 226.7 are owed when they are incurred, just as wages are. Id.
Finally, the court found that consideration of the statute in the context of the Labor Code's entire statutory scheme dictated a finding that damages paid under it were wages, particularly since in the labor law context, "statutes must be construed in favor of the employee." Id. at 260-63. Thus, section 226.7, a statute ambiguous on its face, should be interpreted as requiring the payment of wages, as such a claim is subject to a longer statute of limitations. Id.
In addition to the decisions discussed above, two courts within this district have considered this question. In Tomlinson v. Indymac Bank, F.S.B., 359 F. Supp. 2d 891, 895 (C.D. Cal. 2005), the district court held that payments under section 226.7 are "restitutionary" because they are "earned wages," akin to overtime wages. Id. at 895-97.
The district court in Corder v. Houston's Restaurants, Inc., ___ F. Supp. 2d ___, 2006 WL 855779 (C.D. Cal. 2006), however, reached the opposite conclusion. Relying on the statute's legislative history, it held section 226.7 to be a penalty because it "was designed by the Legislature to punish and deter those employers who subjected their employees to long periods of work without a break." Id. at *3. TheCorder court also noted that employers have no discretion in granting meal or rest periods. Id. Accordingly, because section 226(a) "flatly prohibits" the requirement that employees work during meal or rest periods, the court reasoned, any violation of that prohibition must be considered a penalty. Id. (quotations, citation omitted).
The state agency charged with enforcing California's labor standards has also weighed in on the issue. In Hartwig v. Orchard Commercial, Inc., Case No. 12-56901RB, the DLSE held that "payment for missed meal periods is a penalty." Id. at 7. The agency noted that the record of the California Industrial Welfare Commission ("IWC") hearing at which such payments were discussed clearly reflected the commissioners' concern regarding the lack of any mechanism to enforce compliance with meal and rest period requirements, other than an injunction, "which was not a meaningful remedy." Id. The purpose of section 226.7's provision mandating an award equal to one hour of pay for a violation of those requirements, according to the DLSE, was to "deter non-compliance clearly indicating intent to create a penalty." Id.
The Court hereby grants BCI's Request for Judicial Notice of the DLSE's decision. See Fed.R.Evid. 201(b); Mir, 844 F.2d at 649.
We conclude that payments ordered under section 226.7 are properly considered a penalty. It is scarcely logical to classify the statutory damages as a wage when a court need not examine the actual amount of time worked by the employee.
Additionally, as discussed in the decisions noted above, the legislative history of the statute reflects a motive to curb employers' abuse of the employees' meal and rest periods: in other words, to penalize such employers. The assembly floor analysis of the bill stated that the bill would "[d]elete the provisions related to penalties for an employer who fails to provide a meal or rest period, and instead codify the lower penalty amounts adopted by the Industrial Welfare Commission (IWC)." (A.B. 2509 1999-2000 Reg. Sess. (Cal. Aug. 7, 2000), § 4), (http://www.leginfo.ca.gov/pub/99-00/bill/asm/ab_2501-25 50/ab_2509_cfa_20000907_101801_asm_floor.html (emphasis added)). Additionally, the analysis of the bill that eventually became section 226.7 noted that IWC orders require meal and rest periods, and referred to the proposed payment under the new bill as a "civil penalty" for employers that violate those orders. (A.B. 2509 1999-2000 Sen., Reg. Sess. (Cal. Aug. 7, 2000), § 12).
In the version of the bill analyzed by the state Senate on August 7, 2000, the proposed bill would have imposed a "civil penalty" on employers for violating meal and rest period laws of $50 per violation, and would have also made the employer liable to the employee for twice the employee's average hourly pay. (A.B. 2509 1999-2000 Sen., Reg. Sess. (Cal. Aug. 7, 2000), § 12). The $50 payment was later changed to a payment of "one hour of wages for each work day when rest periods were not offered." A.B. 2509 1999-2000 Sen., Reg. Sess. (Cal. Aug. 25, 2000), § 6). The Senate or the Assembly never referred to the new payment for violating section 226.7 as either a penalty or a wage. The Court does not see a substantive difference between the proposed $50 payment and the enacted payment, as both are not correlated to the actual time an employee worked.
Furthermore, the Court agrees with the Corder court that because section 226(a) clearly prohibits employers from requiring that employees work during meal or rest periods, a violation of that prohibition must be considered a penalty. Id. (quotations, citation omitted).
Finally, when an employee is required to work during meal periods or rest time, he or she must be compensated for that work in addition to the section 226.7 payment, reinforcing the conclusion that the latter payment is an additional penalty imposed on employers.
Plaintiffs urge the Court to refrain from dismissing any claims until the California Supreme Court rules on this issue. [Opp'n to MTD at 5.] To do otherwise, according to Plaintiffs, "would require that this Court accept the distinct possibility that it may be reading the tea leaves incorrectly." [Id.]
The Court declines Plaintiffs' request to rule in their favor on this Motion simply because the California Supreme Court is considering the same issues. Rather, the parties should not litigate claims that are subject to dismissal now based on a possible ruling at some future time.
Plaintiffs' Opposition hints that they are basing this claim not just on an allegation that Defendants failed to pay the section 226.7 penalty for missed meal and rest breaks, but also on an assertion that Defendants failed to pay them at all for time worked during those breaks. [Opp'n to MTD at 7.] To the extent that employees who have left Defendants' employment were never paid any wages for time that actually worked, they may have a legitimate claim under sections 201 through 203. They have also requested leave to amend should any of their claims be dismissed. [Opp'n to MTD at 14.] Accordingly, while the Court dismisses Plaintiffs' second claim, it grants leave to amend to state a claim that is not based in any part on section 226.7 payments.
Furthermore, as noted above, the named Plaintiffs do not have standing to represent other, unnamed members of the purported class for such a claim as all of them allege they are presently working for Defendant BCI.
2. Claim Three: Failure to Provide Itemized Wage Statements
Plaintiffs allege that Defendants failed to provide "Representative Plaintiffs and Class Members with semimonthly itemized statements of the meal and rest periods taken by each and all Class Members . . . in violation of California Labor Code § 226." [Compl. ¶ 31.]
Section 226, states, in relevant part:
Every employer shall, semimonthly or at the time of each payment of wages, furnish each of his or her employees, either as a detachable part of the check, draft, or voucher paying the employee's wages, or separately when wages are paid by personal check or cash, an accurate itemized statement in writing showing (1) gross wages earned, (2) total hours worked by the employee, . . . [and] (5) net wages earned . . .
Plaintiffs' Claim Three also is premised on an alleged violation by Defendants of California Labor Code § 1174. That statute, in relevant part, states:
Every person employing labor in this state shall:
. . .
Keep, at a central location in the state or at the plants or establishments at which employees are employed, payroll records showing the hours worked daily by and the wages paid to . . . employees employed at the respective plants or establishments . . .
BCI asserts that Plaintiffs' claim for failure to provide and post accurate wage records fails because "missed meal and rest break payments are not wages." [MTD at 15.] Thus, BCI argues, it could not have violated sections 226(a) and 1174(d) insofar as those claims are predicated on BCI's failure to provide and post section 226.7 payments.
In light of the Court's ruling that payments to employees under section 226.7 are a penalty and not wages, Defendants were under no obligation to provide and post such earnings.
Plaintiffs point out that their Claim Three alleges not only that itemized statements failed to reflect wages earned accurately, but also "that [Defendants] did not accurately report the total number of hours worked, the applicable hourly rates, and other required information." [Opp'n to MTD at 9.] Accordingly, Plaintiffs have stated a claim for violation of sections 226(a) and 1174(d). To the extent that their third claim includes a reference to an obligation to report and distribute information regarding earnings under section 226.7, that language shall be treated as surplusage and cannot form the basis for any recovery in this case.
3. Claim Five: Violation of California Business and Professions Code § 17200
Plaintiffs seek damages under California's Unfair Competition Law ("UCL") (Bus. Prof. Code § 17200), based on Defendants' failure to make payments under section 226.7. [Compl. ¶¶ 48-52;See, e.g., Compl. ¶ 49 (asserting that Plaintiffs are asking the Court to "compel disgorgement of all profits obtained by Defendants through the unfair, unlawful and fraudulent business practices described herein for the period of time four (4) years prior to the filing of this action through and including the present.").]
BCI argues that the only remedies available under the UCL to aggrieved private parties are injunctive relief and restitution. [MTD at 16.] Furthermore, Plaintiffs cannot base their UCL claim on an alleged violation of section 226.7 because payments under that statute are a penalty and not "restitution." [Id. at 17.]
"A UCL action is equitable in nature; damages cannot be recovered." Korea Supply Co. v. Lockheed Martin Corp., 29 Cal. 4th 1134, 1144 (2003). Section 17200 does allow compensation "as may be necessary to restore to persons in interest any money or property acquired by unfair competition." Cortez v. Purolator Air Filtration Prods. Co., 23 Cal. 4th 163, 176 (2000). Thus, courts have noted that the UCL "provides for the restoration of money or property acquired by means of unfair competition." Day v. ATT Corp., 63 Cal. App. 4th 325, 338 (1998) (quotations omitted). The Day court pointed out, however, that the UCL "operates only to return to a person those measurable amounts which are wrongfully taken by means of an unfair business practice." Id. at 338-39 (emphasis in original).
The Cortez court, concluding that employees could collect unpaid wages from employers under the UCL, emphasized that "[t]he employer has acquired the money to be paid by means of an unlawful practice that constitutes unfair competition . . ." 23 Cal. 4th at 177. It reasoned that "[t]he commonly understood meaning of `restore' includes a return of property to a person from whom it was acquired." Id. at 178. "Earned wages," according to the court, are the property of the employee "who has given his or her labor to the employer in exchange for that property. . . ." Id. Thus, the court held, "[a]n order that earned wages be paid is therefore a restitutionary remedy authorized by the UCL." Id.
In Tomlinson, in which the court held that section 226.7 payments are wages, 359 F. Supp. 2d at 896, the court also held that the payment mandated under section 203 was a penalty, meaning that "[t]his type of payment clearly is not restitutionary, and thus cannot be recovered under the UCL."Id. at 895.
Plaintiffs argue that, regardless of whether section 226.7 payments are deemed wages or a penalty, Plaintiffs nonetheless have an "ownership interest" in such payments, which therefore are subject to recovery under the UCL. [Opp'n to MTD at 11.]
The California authorities, however, emphasize that payments under the UCL are restitutionary in nature, i.e., they return property to one who formerly owned it. Cortez, 23 Cal 4th at 178. Section 226.7 payments, however, are a penalty with no correlation to the employee's actual labor: An employee who missed a ten minute rest period would be owed the same amount as an employee denied a one-hour meal break. Thus, section 226.7 payments do not restore the employee to the position which he or she would have had absent the employer's violation, but are punitive. Accordingly, to the extent that Plaintiff's UCL claim is based on a violation of section 226.7, it must be dismissed.
If Plaintiffs are seeking to assert Defendants failed to pay them for hours worked, they may be able to allege a UCL claim based on restitution. Leave to amend is granted to allege such a claim, if the factual basis for one exists. Accordingly, Plaintiffs' Claim Five is dismissed with leave to amend.
4. Claim Six: Conversion
Plaintiffs base their claim for conversion on Defendants' alleged failure to compensate Plaintiffs properly. [Compl. ¶¶ 53-58.]
California Civil Code § 3336 states:
The detriment caused by the wrongful conversion of personal property is presumed to be:
First — The value of the property at the time of the conversion, with the interest from that time, or, an amount sufficient to indemnify the party injured for the loss which is the natural, reasonable and proximate result of the wrongful act complained of and which a proper degree of prudence on his part would not have averted; and
Second — A fair compensation for the time and money properly expended in pursuit of the property.
BCI argues that, in California, where a right did not exist at common law, a party injured by a violation of statute can sue only if a statutory remedy is provided. [MTD at 18.] BCI asserts that the right to extra payments for missed meal breaks and rest periods did not exist until it was created in a wage order in October 2000 by the IWC. [Id. at 17.] According to BCI, a plaintiff wishing to recover alleged payments due to him or her under section 226.7, therefore, has two options: to sue under California Labor Code § 218, which allows a "wage claimant to sue directly . . . for any wages or penalty due him under this article" or to seek administrative relief by filing a claim with the Labor Commissioner, pursuant to Labor Code §§ 98 to 98.8. [MTD at 17-18.] Labor Code § 98 states that "[t]he Labor Commissioner may provide for a hearing in any action to recover wages, penalties, and other demands for compensation. . . ."
"As a general rule, where a statute creates a right that did not exist at common law and provides a comprehensive and detailed remedial scheme for its enforcement, the statutory remedy is exclusive." Rojo v. Kliger, 52 Cal. 3d 65, 79 (1990).
In Green v. Party City Corp., 2002 WL 553219, *1 (C.D. Cal. 2002), the named plaintiff and alleged class members sued their employer for conversion based on failure to pay overtime wages in violation of the California Labor Code. The district court dismissed the claim, noting that Plaintiff had failed to cite any authority for the notion that a statutorily-based claim for unpaid overtime wages could also be the subject of a conversion claim, particularly given the existence of the state Labor Code's "detailed remedial scheme for violation of its provisions." Id. at *3.
Plaintiff's conversion claim here is based on an alleged statutory violation, i.e., Defendants' failure to pay penalties for forcing Plaintiffs to work through meal and rest periods. Like the unsuccessful Green Plaintiffs, Plaintiffs in the present case have been unable to cite any case in which a statutorily-based claim for nonpayment of wages has been the subject of a conversion claim; the Court finds unpersuasive their argument that Green is distinguishable because Plaintiffs there sought payment for overtime pay, unlike Plaintiffs here who seek payment for the penalty attaching when mean and rest breaks are not properly compensated. [Opp'n to MTD at 14.]
In light of Plaintiffs' failure to demonstrate the availability of a right to recover section 226.7 penalties at common law, they are confined to existing statutory remedies, i.e., California Labor Code § 98, which allows for aggrieved workers to recover penalties under section 226.7.
Lastly, Plaintiffs assert that section 218 allows them to bring a conversion claim for a violation of section 226.7, because, they argue, section 218's last sentence ("Nothing in this article shall limit the right of any wage claimant to sue directly or through an assignee for any wages or penalty due him under this article") allows plaintiffs to bring any type of lawsuit involving section 226.7, outside of the Labor Code's statutory scheme.
Plaintiffs misread section 218, however. It does not create a tort action for any violation of the Labor Code; rather, it does not limit any pre-existing rights to bring tort actions under the Labor Code. Thus, section 218 does not create a private tort action outside of the remedy provided in Labor Code section 98 et seq.
Accordingly, Plaintiffs' conversion claim is dismissed insofar as it is based on Defendants' alleged violation of section 226.7. Because Plaintiffs have requested leave to amend all claims, [Opp'n to MTD at 14], the Court grants them leave to amend to state a conversion claim based on a right that existed at common law, if such a right exists.
III. Motion to Strike Under Federal Rule of Civil Procedure 12(f)
A. Legal Standard
Under Federal Rule of Civil Procedure 12(f), Upon motion made by a party before responding to a pleading or, if no responsive pleading is permitted by these rules, upon motion made by a party within 20 days after the service of the pleading upon the party or upon the court's own initiative at any time, the court may order stricken from any pleading any insufficient defense or any redundant, immaterial, impertinent, or scandalous matter.
The Ninth Circuit has held that "[t]he function of a 12(f) motion to strike is to avoid the expenditure of time and money that must arise from litigating spurious issues by dispensing with those issues prior to trial." Fantasy, Inc. v. Fogerty, 984 F.2d 1524, 1527 (9th Cir. 1993) (quotations, citation omitted). Additionally, Rule 12(f) motions "are generally disfavored." City of Kalamazoo v. Mich. Disposal Serv. Corp., 125 F. Supp. 2d 219, 221 (W.D. Mich. 2000). The purpose of Rule 12(f) is to "minimize delay, prejudice, and confusion by narrowing the issues for discovery and trial." Geer v. Cox, 242 F. Supp. 2d 1009, 1025 (D. Kan. 2003) (citations, quotations omitted). "When allegations in a complaint are entirely collateral and immaterial to the underlying claims, they should be stricken." Id. (citations, quotations omitted).
D. Discussion
1. References to California Labor Code § 226(a) in Claim One
BCI argues that all references to California Labor Code § 226(a) (alleging a failure to comply with recordkeeping requirements) in Plaintiffs' first claim should be stricken because Plaintiffs have pleaded a separate claim "for failure to comply with the recordkeeping requirements set forth in § 226(a)" in their third claim. [BCI's Motion to Strike ("MTS") at 3.] Plaintiffs do not oppose BCI's Motion to Strike this portion of Claim One. [Plaintiffs' Opposition to BCI's Motion to Strike ("Opp'n to MTS") at 2.] Accordingly, the Court grants BCI's Motion to Strike references to section 226(a) from Claim One of Plaintiffs' Complaint.
2. References to Monetary Remedies for Violation of California Labor Code § 226.6 in Claim One
As part of their first claim, Plaintiffs seek remedies under California Labor Code § 226.6 ("section 226.6"). [Compl. ¶ 19(a).]
That statute, in relevant part, states:
Any employer who knowingly and intentionally violates the provisions of Section 226 or 226.2 . . . is guilty of a misdemeanor and, upon conviction thereof, shall be fined not more than one thousand dollars ($1,000) or be imprisoned not to exceed one year, or both, at the discretion of the court. . . .
Plaintiffs' Claim One is brought pursuant to the Labor Code Private Attorneys General Act of 2004, which allows private citizens to bring actions under the Labor Code. The Act, in relevant part, states:
Notwithstanding any other provision of law, any provision of this code that provides for a civil penalty to be assessed and collected by the Labor and Workforce Development Agency or any of its departments, divisions, commissions, boards, agencies, or employees, for a violation of this code, may, as an alternative, be recovered through a civil action brought by an aggrieved employee on behalf of himself or herself and other current or former employees. . . .
Cal. Lab. Code § 2699(a) ("section 2699(a)").
California Labor Code § 2699.3 ("section 2699.3") states that a civil action by "an aggrieved employee" pursuant to section 2699(a) "alleging a violation of any provision listed in Section 2699.5 shall commence only after" several procedural requirements have been met, including written notice by the aggrieved employee to the Labor and Workforce Development Agency and the employer of the specific provisions of the labor code that the employer allegedly violated. Cal. Lab. Code §§ 2699.3(a), (a) (1).
California Labor Code section 2699.5 ("section 2699.5") states: "The provisions of subdivision (a) of Section 2699.3 shall apply to any alleged violation of the following provisions. . . ." Cal. Lab. Code § 2699.5. Section 226.6 is not listed as one of these provisions.
BCI thus argues that because section 226.6 is not listed as a violation covered by section 2699.5, then section 2699.3, and in turn, section 2699(a) do not apply to section 226.6, meaning that an employee could not bring a private claim under section 226.6. [MTS at 3-4.]
Plaintiffs argue that section 226.6's absence from the statutes listed in section 2699.5 means merely that section 2699.3's procedural requirements do not apply to section 226.6, and that a private person could sue under section 226.6, and need not follow section 2699.3's procedural requirements. [Opp'n to MTS at 2.]
In their Reply, BCI points out that the Labor Code accounts for private allegations brought under the Private Attorneys General Act for violation of provisions not listed in section 2699.5. [Reply for Motion to Strike ("Reply for MTS").] Section 2699.3(c) states, in relevant part:
A civil action by an aggrieved employee pursuant to subdivision (a) or (f) of Section 2699 alleging a violation of any provision other than those listed in Section 2699.5 . . . shall commence only after [the performance of certain requirements, including the aggrieved employee giving notice by certified mail to the Labor and Workforce Development Agency and the employer of the specific provisions of the code the employer allegedly violated, and giving the employer an opportunity to cure the alleged violation.]
Cal. Lab. Code § 2699.3(c) (1)
BCI points out that "Plaintiffs have not taken this required step," and thus "have not exhausted a required administrative prerequisite to their right to sue. . . ." [Reply for MTS at 4.] Indeed Plaintiff's Complaint fails to allege that they complied with the provisions of section 2699(c) (1), which is a clear prerequisite to filing a private action under section 226.6. This Claim, accordingly is dismissed. Plaintiffs are given leave to amend the Claim if they can allege facts sufficient to state a Claim.
3. Redundancy of Claim Four
BCI argues that Plaintiffs' fourth Claim is identical to Claim Two and must be stricken. [MTS at 4.] Plaintiffs do not oppose BCI's Motion to Strike Claim Four. [Opp'n to MTS at 2.] Accordingly, the Court grants BCI's Motion to Strike Claim Four.
IV. CONCLUSION
For the foregoing reasons, Defendant BCI Coca-Cola Bottling Company of Los Angeles' Motion to Dismiss is GRANTED for Plaintiffs' Claims Two, Three, Five, and Six. Plaintiffs are granted leave to amend all four claims. BCI's Motion to Strike is GRANTED for all references to California Labor Code § 226(a) in Claim One, GRANTED for all references to violations of California Labor Code § 226.6 in Claim One, and GRANTED without leave to amend for Claim Four in its entirety. A First Amended Complaint must be filed by June 12, 2006.