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