Carl Williams v. Irwin Industries, Inc.

• Court: District Court, C.D. California
• Decided: February 11, 2020
• Docket: 2:15-cv-02480
• Status: Unknown

Opinion

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8 United States District Court 9 Central District of California

11 CARL CURTIS; ARTHUR WILLIAMS, Case № 2:15-cv-02480-ODW (Ex)

12 Plaintiffs, ORDER GRANTING IN PART AND 13 v. DENYING IN PART PLAINTIFFS’ 14 IRWIN INDUSTRIES, INC.; MOTION FOR LEAVE TO AMEND 15 DOES 1–100, [44]

Defendants. 16

17 18 I. INTRODUCTION 19 Plaintiffs Carl Curtis and Arthur Williams (“Plaintiffs”) move for leave to file a 20 second amended complaint (“SAC”) in this wage and hour class action). (Mot. for 21 Leave to File SAC (“Mot.”), ECF No. 44.) Plaintiffs’ motion for leave to file a SAC 22 (“Motion”) follows remand in part from the Ninth Circuit and an intervening 23 clarification in law as articulated by the Supreme Court in Parker Drilling Mgmt. 24 Servs., Ltd. v. Newton, 139 S. Ct. 1881 (2019). For the reasons that follow, the Court 25 GRANTS IN PART and DENIES IN PART Plaintiffs’ Motion.1 26 27

28 1 Having carefully considered the papers filed in connection with the Motion, the Court deemed the matter appropriate for decision without oral argument. Fed. R. Civ. P. 78; C.D. Cal. L.R. 7-15. 1 II. BACKGROUND 2 Plaintiffs are former employees of Irwin Industries, Inc. (“Defendant”). (First 3 Am. Compl. (“FAC”) ¶ 12, ECF No. 11-1.) Defendant employed both Plaintiffs prior 4 to approximately April 7, 2014. (FAC ¶ 12.) Both Plaintiffs worked on an oil 5 platform off the California coast, working shifts typically lasting seven days. (FAC 6 ¶ 13.) Plaintiffs allege that they received pay for twelve hours each day but could not 7 reasonably leave the platform during their seven-day shifts. (FAC ¶ 13.) Thus, in 8 February 2015, Plaintiffs initiated this wage and hour putative class action. (Notice of 9 Removal ¶ 1, ECF No. 1.) Plaintiffs filed a First Amended Complaint (“FAC”) on 10 April 1, 2015. (Notice re: Filing of FAC ¶ 2, ECF No. 11.) 11 In their FAC, Plaintiffs assert claims under California law, individually and on 12 behalf of a putative class, for (1) Minimum Wage Violations; (2) Pay Stub Violations; 13 (3) Unfair Competition; (4) Failure to Timely Pay Wages at Termination; (5) Failure 14 to Provide Lawful Meal and Rest Periods; (6) Failure to Pay Overtime and 15 Doubletime Premium Wages; and (7) Civil Penalties under the Private Attorneys 16 General Act (“PAGA”). (FAC ¶¶ 14–77.) Plaintiffs defined the class to include 17 Defendant’s hourly employees who, at any time within four years from the date of 18 filing this action, worked on oil platforms off of the California coast for periods of 19 twenty-four consecutive hours or more. (FAC ¶ 8.) 20 On November 12, 2015, the Court granted Defendant’s motion to dismiss the 21 FAC. (Order Granting Mot. to Dismiss 5, ECF No. 29.) The Court found Plaintiffs’ 22 claims preempted by § 301 of the Labor Management Relations Act (“LMRA”) 23 because they required interpretation of collective bargaining agreements (“CBA”) 24 entered into between the parties, granted Defendant’s motion to dismiss, and ordered 25 the parties to arbitration pursuant to the terms of the CBAs. (Order Granting Mot. to 26 Dismiss 5.) The Court subsequently granted in part Plaintiffs’ motion for 27 reconsideration, affirming dismissal of all claims but withdrawing the portion of the 28 1 order compelling the parties to arbitration. (Order Granting In Part Mot. for 2 Recons. 10, ECF No. 34.) Plaintiffs appealed. (Notice of Appeal, ECF No. 35.) 3 A. Ninth Circuit Appeal 4 On January 25, 2019, the Ninth Circuit affirmed in part and remanded the case 5 in part. (Op. 17, ECF No. 37.) The Ninth Circuit affirmed the Court’s finding that 6 Plaintiffs’ overtime claim was preempted under § 301 of the LMRA, because the CBA 7 terms triggered the exemption under California Labor Code section 514. (Op. 15.) 8 The Ninth Circuit remanded Plaintiffs’ remaining meal and rest period and minimum 9 wage claims, along with the four derivative claims (pay stubs, unfair business 10 practices, final wages, and PAGA) because issues of preemption under both § 301 of 11 the LMRA and the Outer Continental Shelf Lands Act (“OCSLA”), 43 U.S.C. § 1331 12 et seq., remained. (Op. 15–17.) The Ninth Circuit denied Plaintiffs’ petition for panel 13 rehearing and issued the Mandate on March 15, 2019. (Mandate, ECF No. 38; see 14 also Mot. 4.) 15 Following the Ninth Circuit’s Mandate, the Court stayed the matter pending the 16 Supreme Court’s decision in Parker Drilling, which addressed whether federal law 17 (pursuant to the OCSLA) or California law applies to Plaintiffs’ claims, an issue the 18 parties recognized as potentially dispositive on remand. (Order Staying Case, ECF 19 No. 41; see Status Report 4, ECF No. 40.) 20 B. Parker Drilling 21 On June 10, 2019, the Supreme Court issued its decision in Parker Drilling. 22 139 S. Ct. 1881. The Court addressed whether federal law or California law applies to 23 wage and hour claims made by employees who work on drilling platforms off the 24 coast of California, on the Outer Continental Shelf (“OCS”). Id. at 1886. The Court 25 noted “[u]nder the OCSLA, all law on the OCS is federal law, administered by federal 26 officials.” Id. “The OCSLA denies States any interest in or jurisdiction over the 27 OCS, and it deems the adjacent State’s laws to be federal law ‘[t]o the extent that they 28 are applicable and not inconsistent with’ other federal law.” Id. (citing 43 U.S.C. 1 § 1333(a)(2)(A)). Interpreting that statutory language, the Court concluded that “[a]ll 2 law on the OCS is federal, and state law serves a supporting role, to be adopted only 3 where there is a gap in federal law’s coverage.” Id. at 1892. Thus, “if federal law 4 addresses the issue at hand, then state law is not adopted as federal law on the OCS.” 5 Id. 6 Applying this standard, the Court found the plaintiff’s wage and hour claims 7 “premised on the adoption of California law requiring payment for all time that [the 8 plaintiff] spent on standby” were “already addresse[d]” by federal law under the Fair 9 Labor Standards Act (“FLSA”). Id. at 1893. “Likewise, to the extent [the plaintiff’s] 10 OCS-based claims rely on the adoption of the California minimum wage . . . the 11 FLSA already provides for a minimum wage . . . so the California minimum wage 12 does not apply.” Id. (citations omitted). Thus, those California laws were unavailable 13 on the OCS and the plaintiff’s California overtime and minimum wage claims failed. 14 As the plaintiff’s other California wage and hour claims had not been analyzed by 15 lower courts or in the parties’ briefing, the Court did not specifically address them and 16 remanded the matter to the lower court. Id. 17 C. Plaintiffs’ Motion to Amend 18 Following the decision in Parker Drilling, the Court permitted Plaintiffs to 19 move for leave to file an amended complaint. (Min. Order, ECF No. 43.) 20 Accordingly, on August 19, 2019, Plaintiffs filed this Motion. (See Mot.) 21 Plaintiffs contend that “Parker Drilling only negatively impacts Plaintiffs’ 22 claims for California overtime/double-time and minimum wage violations” and that 23 “Plaintiffs’ other claims (meal breaks, rest breaks, paystub, waiting-time penalties, 24 unfair competition and PAGA)” should survive. (Mot. 5.) Further, Plaintiffs argue 25 that “while Plaintiffs’ overtime claims under California law are no longer viable, 26 [Plaintiffs] should be granted leave to assert overtime claims under the FLSA.” 27 (Mot. 5.) 28 1 Defendant opposes Plaintiffs’ Motion. (Opp’n to Mot. (“Opp’n”), ECF 2 No. 45.) Defendant argues that Plaintiffs are merely attempting to assert claims that 3 they strategically elected not to raise back in 2015 and this constitutes a bad faith 4 tactical measure that will prejudice Defendant and cause undue delay. (Opp’n 1–2.) 5 Defendant contends Plaintiffs’ proposed amendment is futile because (1) the FLSA 6 claim is time-barred and does not relate back to the original Complaint and (2) Parker 7 Drilling requires dismissal of Plaintiffs’ remaining state law claims. (Opp’n 2.) 8 III. LEGAL STANDARD 9 Federal Rule of Civil Procedure (“Rule”) 15(a)(2) provides that “[t]he court 10 should freely give leave [to amend] when justice so requires.” Fed. R. Civ. P. 11 15(a)(2); Moss v. U.S. Secret Serv., 572 F.3d 962, 972 (9th Cir. 2009). The decision 12 whether to grant leave to amend rests in the sound discretion of the district court. 13 California ex rel. Cal. Dep’t of Toxic Substances Control v. Neville Chem. Co., 358 14 F.3d 661, 673 (9th Cir. 2004). Courts should freely grant leave to amend absent 15 special circumstances, such as: “undue delay, bad faith or dilatory motive on the part 16 of the movant, repeated failure to cure deficiencies by amendments previously 17 allowed, undue prejudice to the opposing party by virtue of allowance of the 18 amendment, [and] futility of amendment.” Foman v. Davis, 371 U.S. 178, 182 19 (1962). The party opposing the amendment carries the burden of showing why leave 20 to amend should be denied. DCD Programs, Ltd. v. Leighton, 833 F.2d 183, 186–87 21 (9th Cir. 1987). 22 IV. DISCUSSION 23 Plaintiffs seek to add an FLSA overtime claim, remove their California 24 minimum wage and overtime claims, and “clarify[] the basis” of the remaining state 25 law claims. (Notice of Mot. 2, ECF No. 44.) 26 A. FLSA Claim 27 Defendant argues Plaintiffs’ proposed FLSA claim is futile as it is time-barred 28 and does not relate back to the date of the original complaint. (Opp’n 6–8.) 1 An FLSA action must be “commenced within two years after the cause of 2 action accrued, except that a cause of action arising out of a willful violation may be 3 commenced within three years” of accrual. 29 U.S.C. § 255(a). An FLSA action 4 commences “on the date when the complaint is filed, if [the individual claimant] is 5 specifically named as a party plaintiff in the complaint and his written consent to 6 become a party plaintiff is filed on such date in the court in which the action is 7 brought.” Id. § 256(a) (emphasis added). “[I]f such written consent was not so 8 filed . . . [the action commences] on the subsequent date on which such written 9 consent is filed in the court in which the action was commenced.” Id. § 256(b); see 10 also Ketchum v. City of Vallejo, 523 F. Supp. 2d 1150, 1155 (E.D. Cal. 2007) (“When 11 a ‘collective action’ is filed under § 216(b) all plaintiffs, including named plaintiffs 12 are required to file a consent to suit form with the court in which the action is 13 brought.”). 14 Plaintiffs here allege their employment with Defendant ended approximately 15 April 7, 2014. (FAC ¶ 12.) Accordingly, assuming willful violations, the latest 16 Plaintiffs could have commenced an FLSA action was April 7, 2017. Plaintiffs sought 17 leave to amend and file the SAC on August 19, 2019, more than two years beyond the 18 statute of limitations. More importantly, Plaintiffs have not filed, and do not point the 19 Court to, a written consent from either Plaintiff Curtis or Plaintiff Williams. (See 20 generally Mot.) As such, Plaintiffs’ FLSA claim is time barred. 21 Plaintiffs argue the relation back doctrine saves their FLSA claim, relating it 22 back to the date of filing of the original complaint.2 (Mot. 13–14.) However, the 23 relation-back doctrine does not apply to FLSA collective actions. As noted above, the 24 FLSA by its express terms, provides that an action is commenced only when both the 25 complaint and the party’s written consent are filed. 29 U.S.C. § 256. A complaint 26 filed without a written consent is not “commenced” until the date “such written 27 2 The relation-back doctrine provides that an “otherwise time-barred claim in an amended pleading is 28 deemed timely if it relates back to the date of a timely original pleading.” ARASCO, LLC v. Union Pac. R. Co., 765 F.3d 999, 1004 (9th Cir. 2004). 1 consent is filed,” and “every such action shall be forever barred unless commenced 2 within” the applicable statute of limitations period. Id. §§ 255(a), 256(b). 3 Plaintiffs have not filed written consent, and even if they had done so in July 4 2019 when they first indicated a desire to add an FLSA claim (see Status Report 5, 5 ECF No. 42), the consent would be two years too late and would not, itself, relate 6 back to the original complaint. See 29 U.S.C. § 256(b). Indeed, courts routinely 7 reject application of the relation-back doctrine to FLSA actions. See, e.g., Lemus v. 8 Denny’s Inc., No. 10-cv-2061-CAB (WVG), 2014 WL 12772284, at *4 (S.D. Cal. 9 July 14, 2014) (“Here, it is undisputed that [p]laintiff has not filed a written consent. 10 Moreover, even if he were to file a written consent now, almost four years after the 11 filing of the original complaint, it would not ‘relate back’ to the filing of the original 12 pleading.”); Cancilla v. Ecolab, Inc., No. C 12-03001 CRB, 2013 WL 1365939, at *3 13 n.5 (N.D. Cal. Apr. 3, 2013) (“collective action claims ‘cannot be rescued by the 14 “relation back” doctrine’”). 15 What is more, District Courts in California have recently prohibited time-barred 16 FLSA collective action plaintiffs, who, like Plaintiffs, worked on oil platforms off the 17 coast of California, from employing the relation-back doctrine for the same reasons 18 discussed here. See Newton v. Parker Drilling Mgmt. Servs., Inc., No. 71 CV 19 15-02517-RGK (AGRx) (C.D. Cal. Jan. 29, 2020) (“Newton”); Mauia v. Petrochem 20 Insulation, Inc., No. 18-cv-01815-TSH, 2020 WL 264669, at *7–8 (N.D. Cal. Jan. 16, 21 2020); Hockinson v. Baker Hughes Oilfield Operations, Inc., No. 19-cv-07949 PA 22 (FFMx), 2019 U.S. Dist. LEXIS 187704, at *16 (C.D. Cal. Oct. 25, 2019) (“[T]he 23 relation-back doctrine does not apply to FLSA collective actions.”). This Court 24 reaches the same conclusion here. 25 An FLSA plaintiff is procedurally unable to claim the relation back doctrine to 26 overcome the time-bar set by the statute of limitations. As such, Plaintiffs may not 27 claim relation-back to save their FLSA claim. As Plaintiffs have not filed a written 28 consent and the time for commencing an FLSA action elapsed in April 2017, 1 Plaintiffs’ FLSA claim is time barred and amendment would be futile. Accordingly, 2 the Court DENIES Plaintiffs’ Motion to add an FLSA claim. 3 B. State Law Claims 4 Plaintiffs also seek leave to amend to remove their California minimum wage 5 and overtime claims and to “clarify[]” the remaining claims. (Notice of Mot. 2; see 6 Mot. 5.) “Absent prejudice, or a strong showing of any of the remaining . . . factors, 7 there exists a presumption under Rule 15(a) in favor of granting leave to amend.” 8 Eminence Capital, LLC v. Aspeon, Inc., 316 F.3d 1048, 1052 (9th Cir. 2003). 9 First, the Ninth Circuit previously affirmed dismissal of Plaintiffs’ California 10 overtime claim. (Op. 15.) Accordingly, that claim is dead. Second, Parker Drilling 11 expressly held that the FLSA addresses overtime and minimum wages and leaves no 12 gap for California law, thereby barring Plaintiffs’ California overtime and minimum 13 wage claims as a matter of law. Parker Drilling, 139 S. Ct. at 1893. Defendant 14 argues that Plaintiffs’ minimum wage claim must be dismissed in light of Parker 15 Drilling. (Opp’n 3 n.2.) Plaintiffs concede as much. (See Mot. 5 (“Parker 16 Drilling . . . negatively impacts Plaintiffs’ claims for California overtime/doubletime 17 and minimum wage violations.”).) Accordingly, the Court DISMISSES Plaintiffs’ 18 minimum wage claim. 19 Next, Plaintiffs seek leave to “clarify[]” the remaining state law claims in light 20 of Parker Drilling. (Mot. 14; Decl. Aris E. Karakalos Ex. B (“Proposed SAC 21 Redline”) ¶¶ 21, 31–84, ECF No. 44-3.) With respect those claims, the parties focus 22 on futility and do not directly address the other factors of undue delay, bad faith, 23 failure to cure, or undue prejudice. (See Mot. 14; Opp’n 9; Reply 9–10, ECF No. 46.) 24 Nevertheless, the Court finds no undue delay or dilatory tactics in Plaintiffs’ seeking 25 leave to clarify the allegations underlying their remaining state law claims. Although 26 Plaintiffs admit they allege no new facts (Reply 1), they seek to amend in light of an 27 intervening clarification of federal law, and did so as soon as procedurally practicable 28 following remand from the Ninth Circuit. 1 Turning to prejudice, it is “prejudice to the opposing party that carries the 2 greatest weight” when evaluating leave to amend. Eminence, 316 F.3d at 1052. Here, 3 discovery is stayed and no trial date has been set, so the action is still in the early 4 procedural stages. Defendant concedes that “[t]he allegations [supporting the 5 remaining state law claims] in Plaintiffs’ proposed SAC remain largely unchanged 6 from their FAC.” (Opp’n 9.) Thus, Defendant will not suffer prejudice from the grant 7 of this minimal amendment. On the other hand, Plaintiffs acknowledge that, “whether 8 the Court permits the requested amendments, the state law claims in the FAC will 9 remain intact.” (Reply 9.) Thus, although prejudice to the opposing party is the 10 focus, Plaintiffs also will not suffer prejudice from denial of amendment on this issue. 11 Therefore, the prejudice factor is neutral. 12 Finally, as to futility, Plaintiffs argue that amendment of their remaining state 13 law claims is not futile because those claims should survive Parker Drilling. (See 14 Mot. 5, 14.) Defendant disagrees and contends that, under Parker Drilling, 15 amendment of Plaintiffs’ remaining state law claims is futile because the FLSA 16 addresses the relevant issues, so California law is not adopted on the OCS and 17 Plaintiffs’ state law claims fail. (Opp’n 9.) 18 Following Parker Drilling, courts in the Central District have found that state 19 law claims like Plaintiffs’ fail as a matter of law because the FLSA sufficiently 20 addresses the relevant issues. See Newton, No. 57 CV 15-02517-RGK (AGRx) (C.D. 21 Cal. Nov. 7, 2019) (claims under California law failed for violations of meal and rest 22 breaks, pay stubs, unfair competition, final wages, and PAGA because the FLSA 23 sufficiently addresses the relevant issues); Hockinson, 2019 U.S. Dist. LEXIS 187704, 24 at *9–15 (same); Jensen v. Safety Equip. Corp., No. 18-cv-02890-RGK (GJSx), 2019 25 WL 4942052, at *2–4 (C.D. Cal. Sept. 4, 2019) (same); but see Mauia, 2020 WL 26 264669, at *3–6 (Northern District of California finding that California final wages 27 claim failed but California meal and rest break claims survive). The Court finds the 28 reasoning in Newton, Hockinson, and Jensen persuasive and is inclined to find that 1 || Plaintiffs’ remaining state law claims fail as a matter of law. However, Plaintiffs compellingly argue that whether their remaining state law claims survive Parker 3 || Drilling is more appropriately resolved on a motion to dismiss or motion for judgment 4|| on the pleadings. (Reply 9-10.) As the parties have not had the opportunity to brief the effect of Parker Drilling on Plaintiffs’ remaining state law claims, the Court 6 || declines to address the claims’ viability at this time. 7 On balance, the Court finds that Defendant has not satisfied its burden to show 8 | that amendment of Plaintiffs’ remaining state law claims should not be granted. 9 || Accordingly, Plaintiffs may file a SAC amending only their remaining state law 10 | claims. Any amendment strictly beyond the scope herein permitted is subject to 11 | strike. 12 V. CONCLUSION 13 For the reasons discussed above, the Court GRANTS IN PART AND DENIES IN PART Plaintiffs’ Motion for Leave to File a SAC. (ECF No. 44.) 15 || Within five (5) court days of the date of this Order, Plaintiffs shall file a SAC, 16 || amended as permitted herein. Defendant may file a motion to dismiss or similar 17 || motion within twenty-one (21) calendar days of the date of Plaintiffs’ filing the SAC. 18 | Should Defendant not file such a motion, the parties shall file a renewed joint status 19 | report within thirty (30) calendar days of the date of Plaintiffs’ SAC. 20 21 IT IS SO ORDERED. 22 23 February 11, 2020 tai 04 Gelli 5 OTIS D. WRIGHT, II UNITED STATES DISTRICT JUDGE

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