Hendrickson v. Wal-Mart Associates, Inc.

• Court: District Court, S.D. California
• Decided: November 26, 2024
• Docket: 3:23-cv-00110
• Status: Unknown

Opinion

1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 SOUTHERN DISTRICT OF CALIFORNIA 10 11 MARK HENDRICKSON, individually Case No.: 23-cv-00110-AJB-MSB and on behalf of others similarly situated 12 and/or aggrieved employees of ORDER RE: DEFENDANT’S MOTION 13 Defendants in the State of California, TO DISMISS PLAINTIFF’S FOURTH AMENDED COMPLAINT 14

Plaintiff, 15 (Doc. No. 40) v. 16 WAL-MART ASSOCIATES, INC.; and 17 DOES 1 through 50, inclusive, 18 Defendant. 19

20 Presently pending before the Court is Defendant Wal-Mart Associates, Inc.’s motion 21 to dismiss Count 3 of Plaintiff Mark Hendrickson’s Fourth Amended Complaint (“4AC”) 22 for alleged violations of California’s Unfair Competition Law. (Doc. No. 40.) The motion 23 is fully briefed, (Doc. Nos. 42 & 43), and the matter is suitable for determination on the 24 papers. See S.D. Cal. Civ. L. R. 7.1.d.1. For the reasons stated herein, Walmart’s motion 25 to dismiss is DENIED AS MOOT and Plaintiff’s claim under the UCL is remanded to the 26 San Diego County Superior Court. 27 /// 28 1 I. BACKGROUND 2 Plaintiff is a current employee at Walmart’s El Centro location, where he works both 3 indoors and outdoors. (4AC, Doc. No. 39, ¶¶ 9, 27, 29.) Plaintiff originally filed his 4 complaint in the Superior Court of California, County of San Diego on December 14, 2022. 5 (Doc. No. 1-2.) Walmart thereafter removed the case to federal court. (Doc. No. 1.) Plaintiff 6 asserts four causes of action against Walmart: (1) failure to provide recovery periods (Cal. 7 Lab. Code §§ 226.7 & 6720, and Cal. Code Regs. Tit. 8 § 3395); (2) failure to provide 8 accurate itemized wage statements (Cal. Lab. Code §§ 226, 226.3, and 1198); (3) violation 9 of California’s unfair competition law (“UCL”) (Cal. Bus. & Prof. Code § 17200 et seq.); 10 and (4) violation of the Private Attorneys General Act (Cal. Lab. Code § 2698 et seq.). (See 11 generally 4AC.) 12 II. LEGAL STANDARD 13 A motion to dismiss under Rule 12(b)(6) tests the legal sufficiency of the pleadings 14 and allows a court to dismiss a complaint upon a finding that the plaintiff has failed to state 15 a claim upon which relief may be granted. Navarro v. Block, 250 F.3d 729, 732 (9th Cir. 16 2001). The court may dismiss a complaint as a matter of law for: “(1) lack of a cognizable 17 legal theory or (2) insufficient facts under a cognizable legal claim.” SmileCare Dental 18 Grp. v. Delta Dental Plan of Cal., 88 F.3d 780, 783 (9th Cir. 1996) (citation omitted). 19 However, a complaint survives a motion to dismiss if it contains “enough facts to state a 20 claim to relief that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 21 (2007). 22 Notwithstanding this deference, the reviewing court need not accept legal 23 conclusions as true. Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). It is also improper for the 24 court to assume “the [plaintiff] can prove facts that [he or she] has not alleged[.]” 25 Associated Gen. Contractors of Cal., Inc. v. Cal. State Council of Carpenters, 459 U.S. 26 519, 526 (1983). On the other hand, “[w]hen there are well-pleaded factual allegations, a 27 court should assume their veracity and then determine whether they plausibly give rise to 28 an entitlement to relief.” Iqbal, 556 U.S. at 679. The court only reviews the contents of the 1 complaint, accepting all factual allegations as true, and drawing all reasonable inferences 2 in favor of the nonmoving party. Thompson v. Davis, 295 F.3d 890, 895 (9th Cir. 2002), 3 superseded by statute on other grounds, ADA Amendments Act of 2008, Pub. L. No. 110- 4 325, §§ 4(a), 8, 122 Stat. 3555). 5 III. DISCUSSION 6 Here, Plaintiff’s third claim alleges Walmart violated the UCL. (4AC ¶¶ 147–72.) 7 Plaintiff’s UCL allegations are derivative of his California Labor Code claims. 8 Specifically, Plaintiff asserts Walmart’s “(i) failure to provide proper recovery periods and 9 pay Plaintiff and the UCL Subclass premium wages for failure to provide compliant 10 recovery periods; (ii) failure to provide to adequate air conditioning, shade, and/or water; 11 (iii) failure to maintain accurate records; and (iv) failure to provide Plaintiff and the UCL 12 Subclass with accurate itemized wage statements” all amount to unfair and/or unlawful 13 business practices in violation of the UCL and the Labor Code. (Id. ¶ 150.) Plaintiff seeks 14 equitable remedies in the form of “restitution of all wages and all monies owed[.]” (Id. 15 ¶ 172.) 16 1. Rule 12(g)(2) Waiver 17 As an initial matter, Plaintiff argues Walmart waived its right under Federal Rule of 18 Civil Procedure 12(g)(2) to bring a motion to dismiss for Plaintiff’s alleged failure that he 19 lacks an adequate remedy at law. (Doc. No. 42 at 10.) Specifically, Plaintiff asserts 20 Walmart did not raise this defense to Plaintiff’s UCL claim until Walmart’s previous 21 12(b)(6) motion to dismiss regarding Plaintiff’s Third Amended Complaint. (Id. at 11; see 22 Doc. No. 33.) The Court notes Plaintiff did not raise this argument in response to Walmart’s 23 previous motion to dismiss. (See Doc. No. 35.) 24 Rule 12(g) provides, “Except as provided in Rule 12(h)(2) or (3), a party that makes 25 a motion under this rule must not make another motion under this rule raising a defense or 26 objection that was available to the party but omitted from its earlier motion.” Fed. R. Civ. 27 P 12(g). However, “[t]he consequence of omitting a defense from an earlier motion under 28 Rule 12 depends on [the] type of defense omitted.” In re Apple iPhone Antitrust Litig. 1 (“Apple”), 846 F.3d 313, 317–18 (9th Cir. 2017); Fed. R. Civ. P. 12(g)–(h). “Simply put, 2 a defendant who omits a defense under Rules 12(b)(2)–(5) entirely waives that defense, 3 whereas a defendant who omits a defense under 12(b)(6) does not.” Wagnon v. Rocklin 4 Unified Sch. Dist., No. 2:17-cv-01666-TLN-KJN, 2021 WL 1214571, at *5 (E.D. Cal. Mar. 5 31, 2021); see Apple, 846 F.3d at 317–18; Fed. R. Civ. P. 12(h)(1)–(2). Indeed, the Ninth 6 Circuit has adopted a “very forgiving” approach to Rule 12(g), which allows district courts 7 to consider new arguments in successive motions to dismiss under Rule 12(b)(6) in the 8 interest of judicial economy. Apple, 846 F.3d at 318–19; Cuviello v. City of Vallejo, No. 9 16-cv-02584-KJM-KJN, 2020 WL 6728796, at *4–5 (E.D. Cal. Nov. 16, 2020) (drawing 10 on the “practical wisdom” of other districts and the Circuit’s “forgiving” stance and 11 considering defendants’ late-filed 12(b)(6) motion on the merits despite the language of 12 Rules 12(g)(2) and 12(h)(2)); but see In re Packaged Seafood Prods. Antitrust Litig., 277 13 F. Supp. 3d 1167, 1174 (S.D. Cal. 2017) (declining to exercise its discretion to disregard 14 Rule 12(g)(2) where the defendant raised a new argument in the 12(b)(6) motion before 15 the court not raised in a previous 12(b)(6) motion to dismiss). 16 Thus, the Court declines to find Walmart waived its inadequate legal remedy defense 17 to Plaintiff’s UCL claim by failing to file it in their first two Rule 12(b)(6) motions. 18 2. UCL Claim 19 Walmart argues Plaintiff’s UCL claim must be dismissed because Plaintiff does not 20 allege his legal remedies are inadequate. (Doc. No. 40 at 12–13.) Specifically, Walmart 21 argues Plaintiff seeks restitution solely for the fourth year preceding the three-year statute 22 of limitations governing his Labor Code claims, but the Ninth Circuit has held that a legal 23 claim under the Labor Code is not inadequate simply because of a shorter statute of 24 limitations. (Id. at 12 (citing Guzman v. Polaris Indus. Inc., 49 F.4th 1308, 1313 n.2 (9th 25 Cir. 2022)).) The Court agrees. 26 “[T]he UCL provides only for equitable remedies. Prevailing plaintiffs are generally 27 limited to injunctive relief and restitution.” Hodge v. Superior Ct., 145 Cal. App. 4th 278, 28 284, (2006); accord Korea Supply Co. v. Lockheed Martin Corp., 29 Cal. 4th 1134, 1144 1 (2013) (“Through the UCL a plaintiff may obtain restitution and/or injunctive relief against 2 unfair or unlawful practices.”). Although “[e]quitable jurisdiction is distinct from subject 3 matter jurisdiction, . . . both are required for a federal court to hear the merits of an equitable 4 claim.” Guzman, 49 F.4th at 1314; Schlesinger v. Councilman, 420 U.S. 738, 754 (1975). 5 Unlike state courts, federal courts have equitable jurisdiction to award equitable relief only 6 where a plaintiff has no adequate legal remedy based on the same harm. See Sonner v. 7 Premier Nutrition Corp., 971 F.3d 834, 842 (9th Cir. 2020). Thus, where monetary 8 damages provide an adequate remedy, a federal court may not consider the merits of 9 equitable claims for restitution, disgorgement, or injunctive relief. See Franklin v. Gwinnett 10 Cnty. Pub. Sch., 503 U.S. 60, 75–76 (1992); see, e.g., Feitelberg v. Credit Suisse First Bos., 11 LLC, 134 Cal. App. 4th 997, 1009 (2005) (noting restitution and injunctive relief are 12 equitable in nature). Plaintiffs bear the burden to establish they lack an adequate damages 13 remedy before they can obtain equitable relief. See Sonner, 971 F.3d at 844. 14 Here, Plaintiff asserts he lacks an adequate remedy at law for violations suffered 15 beyond the three-year statute of limitations governing his Labor Code claims. (4AC ¶ 170.) 16 Thus, Plaintiff seeks restitution under the UCL “solely for the fourth year preceding the 17 three-year statute of limitations governing the claims under Labor Code § 226.7.” (Id.) To 18 this point, Plaintiff asserts he does not merely seek the same amount in restitution that he 19 seeks in damages for the same harm, and that any remedy that does not provide for the 20 payment of all owed and unpaid wages fails to provide a complete remedy. (Doc. No. 42 21 at 9 (citing Cook v. Matrix Absence Mgmt., Inc., --- F. Supp. 3d ----, No. 23-cv-05690- 22 PCP, 2024 WL 3077160, at *5 n.1 (N.D. Cal. June 20, 2024)).) 23 The Court finds Plaintiff’s argument has been considered—and rejected—by the 24 Ninth Circuit in Guzman. See 49 F.4th at 1313 n.2. Specifically, the court acknowledged 25 the UCL had a longer statute of limitations than the comparator statute at issue in that case 26 and declined to find the difference makes the legal remedy inadequate so as to require the 27 district court to exercise its equitable jurisdiction. Id. at 1311, 1313 n.2, 3. Applying 28 Guzman, as it must, the Court similarly rejects Plaintiff’s argument that a shorter statute of 1 limitations period makes the legal remedy under the Labor Code inadequate such that 2 Plaintiff could bring his equitable UCL claim in federal court. Consequently, the Court 3 finds it futile to amend the Complaint to this effect. 4 Finally, Walmart asserts Plaintiff’s UCL claim should be dismissed with prejudice 5 because Plaintiff’s defective UCL claim cannot be cured. (Doc. No. 40 at 13.) Plaintiff 6 responds that if the Court finds Plaintiff has not sufficiently pled a lack of adequate legal 7 remedies, his UCL claim should be remanded to state court, or, alternatively, dismissed 8 without prejudice to re-file in state court. (Doc. No. 42 at 17.) In Guzman, the Ninth Circuit 9 noted that because the district court lacked equitable jurisdiction, it should have dismissed 10 the UCL claim before it without prejudice. 49 F.4th at 1315. Thus, the Court turns to 11 whether Plaintiff’s UCL claim should be remanded or dismissed without prejudice to re- 12 file in state court. 13 As explained in Morgan v. Rohr, Inc., No.: 20-cv-574-GPC-AHG, 2023 WL 14 7713582 (S.D. Cal. Nov. 15, 2023), appeal dismissed sub nom. Morgan v. Hamilton 15 Sundstrand Corp., No. 23-4236, 2024 WL 1152284 (9th Cir. Feb. 28, 2024), “the claims 16 in Guzman were filed in federal court, [and thus] remand was not an option. As such, 17 Guzman did not foreclose remand.” 2023 WL 7713582, at *3. The court thus concluded 18 “that Guzman does not require a dismissal of the UCL claim and permits the Court to 19 review the facts of the case to determine whether a remand is warranted.” Id. Walmart 20 asserts Morgan does not apply because there, the court had already certified classes and 21 the parties had engaged in pre- and post-certification discovery. (Doc. No. 43 at 5 (citing 22 Morgan, 2023 WL 7713582, at *1, *4).) However, the Morgan court also noted that “[t]o 23 the extent that tolling of the statute of limitations is not available, forcing Plaintiffs to refile 24 their claims may extinguish the UCL claims of certain plaintiffs.” 2023 WL 7713582, at 25 *5. “This procedure to extinguish claims timely filed in the proper forum would encourage 26 the sort of gamesmanship disfavored by courts of equity.” Id. Indeed, dismissing a 27 plaintiff’s UCL claim without prejudice and requiring them to re-file the case in state court 28 “could place the case in the ‘perpetual loop’ of ‘(1) [P]laintiff’s re-filing in state court, 1 || followed by (2) removal by [D]efendant[] and then (3) dismissal by this Court.’” Ruiz v. 2 || The Bradford Exchange, Ltd., No.: 3:23-cv-01800-WQH-KSC, 2024 WL 2844625, at *5 3 ||(S.D. Cal. May 16, 2024). 4 As noted by Morgan, “[a] number of district court decisions have found that remand 5 |}of a UCL claim was warranted where courts lacked equitable jurisdiction.” /d.; see, e.g., 6 || Guthrie v. Transamerica Life Ins. Co., 561 F. Supp. 3d 869, 872 (N.D. Cal. 2021); Haver 7 ||v. Gen. Mills, Inc., No.: 3:24-cv-01269-CAB-MMP, 2024 WL 4492052, at *4 (S.D. Cal. 8 || Oct. 11, 2024); Cook, 2024 WL 3077160, at *5; Ruiz, 2024 WL 2844625, at *5—6; Granato 9 Apple Inc., No. 5:22-CV-02316-EJD, 2023 WL 4646038, at *5 (N.D. Cal. July 19, 10 2023); Clevenger v. Welch Foods Inc., No. SACV 23-00127-CJC-JDEx, 2023 WL 11 2390630, at *4 (C.D. Cal. Mar. 7, 2023). Thus, the Court concludes a court declining to 12 exercise jurisdiction in accordance with equitable principles may partially remand an 13 |} action. 14 The Court concludes that precedent and interests in fairness and economy all favor 15 |}remand. Remand will return the UCL claim to the state court “more efficiently.” Guthrie, 16 F. Supp. 3d at 880. 17 || IV. CONCLUSION 18 For the foregoing reasons, the Court DENIES AS MOOT Walmart’s motion to 19 || dismiss. Plaintiff's UCL claim is to be severed and remanded to the Superior Court of San 20 || Diego County (originally filed as Case No. 37-2022-00049939-CU-OE-CTL). 21 22 IT IS SO ORDERED. 23 || Dated: November 26, 2024

25 United States District Judge 26 27 28