Juan Calderon v. Physicians for Healthy Hospitals, Inc.

• Court: District Court, C.D. California
• Decided: March 9, 2021
• Docket: 5:20-cv-01875
• Status: Unknown

Opinion

1 JS-6 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 FOR THE CENTRAL DISTRICT OF CALIFORNIA 10 11 JUAN CALDERON, on behalf of all Case No. 5:20-cv-01875-JWH-SPx others similarly aggrieved, 12 Plaintiff, ORDER GRANTING MOTION OF 13 PLAINTIFF JUAN CALDERON TO v. REMAND [ECF No. 12] 14 PHYSICIANS FOR HEALTHY 15 HOSPITALS, INC., a Delaware corporation; 16 PETER BARONOFF, an individual; and 17 DOES 1 to 50, inclusive,

18 Defendants.

19 20 21 22 23 24 25 26 27 1 I. INTRODUCTION 2 On August 5, 2020, Plaintiff Juan Calderon, on behalf of all others 3 similarly aggrieved, filed his Complaint for Violation of the Private Attorneys 4 General Act, Cal. Lab. Code §§ 2698 et seq., in Riverside County Superior 5 Court.1 On September 11, 2020, Defendant Physicians for Healthy Hospitals, 6 Inc. (“Physicians”) removed the action to this Court.2 On October 13, 2020, 7 Calderon filed a motion to remand, in which he contends that the Court lacks 8 subject matter jurisdiction.3 For the reasons stated below, the Court GRANTS 9 the Motion. 10 II. BACKGROUND 11 In his state court Complaint, Calderon accuses Physicians of violating 12 various California labor laws.4 Calderon alleges that Physicians employed him 13 “as a non-exempt employee with the job title of ‘security guard.’”5 Among 14 other things, Calderon avers that “[u]nder the Labor Code and IWC Wage 15 Orders, Defendant was required to provide Plaintiff and similarly aggrieved 16 employees with one 30-minute meal break free from all duties for all shifts 17 longer than 5 hours, and a second 30-minute meal break free from all duties for 18 all shifts longer than 10 hours.”6 Calderon contends that Physicians “failed to 19 20 21

22 1 Compl. [ECF No. 1-4]. Calderon subsequently filed an amended complaint. See First Am. Compl. [ECF No. 17]. The parties do not contend 23 that the amended complaint affects the jurisdictional analysis, and jurisdiction is generally determined at the time of removal. See, e.g., Allen v. F.D.I.C., 710 F.3d 24 978, 984 (9th Cir. 2013) (“federal jurisdiction is determined at the time of removal”). 25 2 Notice of Removal [ECF No. 1]. 26 3 Mot. to Remand (the “Motion”) [ECF No. 12]. 4 See generally Compl. 27 5 Id. at ¶ 6. 1 provide Plaintiff and similarly aggrieved employees all required and/or fully 2 compliant rest periods, or compensation in lieu thereof.”7 3 Calderon also alleges that Physicians “implemented a time rounding 4 system that systematically deprived Plaintiff and similarly aggrieved employees 5 of compensable hours worked because it resulted in understating hours worked 6 due to the rounding.”8 “As a result, Defendant failed to pay Plaintiff and 7 similarly aggrieved employees for all hours worked at a rate no less than the 8 prevailing minimum wage, thereby violating California minimum wage laws, 9 including but not limited to Labor Code sections 1194-1199, and Wage 10 Order 4-2001, section 7.”9 For the same reason, Calderon alleges that 11 Physicians failed to compensate employees for overtime as required by 12 California law.10 Calderon further alleges that Physicians failed to keep adequate 13 records, provide proper wage statements, or pay in a timely manner “all wages 14 due and payable to Plaintiff and other similarly aggrieved employees.”11 15 On September 11, 2020, Physicians removed the case to this Court. In its 16 Notice of Removal, Physicians states, “Plaintiff’s claims are artfully pled claims 17 for breach of the collective bargaining agreement under Section 301 of the Labor 18 Management Relations Act of 1947 (LMRA), 61 Stat. 156, 29 U.S.C. § 185 19 (‘Section 301’).”12 Physicians therefore argues that this Court has federal 20 question jurisdiction, even though the Complaint facially states claims under 21 California law only.13 See 29 U.S.C. § 185 (“Suits for violation of contracts 22 between an employer and a labor organization representing employees in an 23 7 Id. at ¶ 11. 24 8 Id. at ¶ 12. 25 9 Id. 26 10 Id. 11 Id. at ¶¶ 13, 14, & 16. 27 12 Notice of Removal at ¶ 6. 1 industry affecting commerce as defined in this chapter, or between any such 2 labor organizations, may be brought in any district court of the United States 3 having jurisdiction of the parties, without respect to the amount in controversy 4 or without regard to the citizenship of the parties.”). 5 Physicians maintains that “Plaintiff filed a PAGA action on behalf of all 6 others similarly aggrieved, a vast majority of whom are employees represented 7 by the California Nurses Association (‘CNA’), the Services Employees 8 International Union, United Healthcare Workers-West (‘SEIU’), or the 9 Teamsters Local No. 1932 (‘Teamsters’).”14 According to Physicians, the 10 respective collective bargaining agreements (the “CBAs”) for SEIU, CNA, and 11 the Teamsters “provide the wages, hours of work, and working conditions, as 12 well as the premium rate for all overtime hours for employees covered by 13 them.”15 Physicians also contends that resolution of this action “requires 14 interpretation of these collective bargaining agreements,” preempting state law 15 and providing the Court with federal question jurisdiction under the LMRA.16 16 For Calderon’s claims that are not subject to federal question jurisdiction, 17 Physicians argues that the Court should exercise supplemental jurisdiction 18 under 28 U.S.C. § 1367(a).17 19 On October 13, 2020, Calderon filed the instant Motion, and on 20 October 30, 2020, Physicians filed its Opposition.18 Calderon’s Opposition 21 papers include a declaration from Michelle Bird, Physicians’ Vice President of 22 Human Resources.19 The Bird Declaration attaches CBAs for the Physicians 23

24 14 Id. at ¶ 7. 15 Id. at ¶ 25. 25 16 Id. at ¶ 8. 26 17 Opp. to Motion (the “Opposition”) [ECF No. 18] at 10. 27 18 Id. 19 Decl. of Michele Bird in Supp. of Opposition (the “Bird Declaration”) 1 employees represented by CNA, SEIU, or the Teamsters.20 According to Bird, 2 “[t]he CNA CBA has, throughout the PAGA period, provided all bargaining 3 unit members with wages that are more than 30 percent above the applicable 4 state minimum wage.”21 Bird further testifies that two CBAs between SEIU and 5 Physicians cover the applicable PAGA period and that both of these CBAs 6 “provide wages more than 30 percent above the applicable minimum wage for 7 the vast majority of employees covered by them during the applicable PAGA 8 period.”22 Finally, Bird declares that the CBA between Physicians and the 9 Teamsters “provides wages more than 30 percent above the applicable 10 minimum wage for the vast majority of employees covered by it during the 11 applicable PAGA period.”23 12 The Court conducted a hearing on the Motion on November 20, 2020. 13 At the hearing, the parties acknowledged that the CBAs do not cover all 14 employees that are part of the PAGA class; indeed, Calderon worked as a 15 security guard, a position not covered by any CBA.24 16 III. LEGAL STANDARD 17 “Only state-court actions that originally could have been filed in federal 18 court may be removed to federal court by the defendant.” Caterpillar Inc. v. 19 Williams, 482 U.S. 386, 392 (1987) (footnote omitted). The removal statute is 20 strictly construed “against removal jurisdiction,” and “[f]ederal jurisdiction 21 must be rejected if there is any doubt as to the right of removal in the first 22 instance.” Gaus v. Miles, Inc., 980 F.2d 564, 566 (9th Cir. 1992). “The ‘strong 23 24

25 20 Id. at ¶¶ 3-6. 26 21 Id. at ¶ 4. 22 Id. at ¶ 5. 27 23 Id. at ¶ 6. 1 presumption’ against removal jurisdiction means that the defendant always has 2 the burden of establishing that removal is proper.” Id. 3 The district courts have “original jurisdiction of all civil actions arising 4 under the Constitution, laws, or treaties of the United States.” 28 U.S.C. 5 § 1331. “The presence or absence of federal-question jurisdiction is governed by 6 the ‘well-pleaded complaint rule,’ which provides that federal jurisdiction exists 7 only when a federal question is presented on the face of the plaintiff’s properly 8 pleaded complaint.” Caterpillar, 482 U.S. at 392. “The rule makes the plaintiff 9 the master of the claim; he or she may avoid federal jurisdiction by exclusive 10 reliance on state law.” Id. 11 In certain cases, however, “federal-question jurisdiction will lie over 12 state-law claims that implicate significant federal issues.” Grable & Sons Metal 13 Products, Inc. v. Darue Engineering & Mfg., 545 U.S. 308, 312 (2005). A corollary 14 to the well-pleaded complaint rule is the “complete pre-emption doctrine,” 15 which provides that “once an area of state law has been completely pre-empted, 16 any claim purportedly based on that pre-empted state law is considered, from its 17 inception, a federal claim, and therefore arises under federal law.” Id. at 386– 18 87; see also Curtis v. Irwin Indus., Inc., 913 F.3d 1146, 1151 (9th Cir. 2019) (“a 19 civil complaint raising claims preempted by § 301 raises a federal question that 20 can be removed to a federal court”). 21 “Although § 301 contains no express language of preemption, the 22 Supreme Court has long interpreted the LMRA as authorizing federal courts to 23 create a uniform body of federal common law to adjudicate disputes that arise 24 out of labor contracts.” Curtis, 913 F.3d at 1151. “While § 301 preemption 25 furthers important interests, the Supreme Court has stressed that ‘§ 301 cannot 26 be read broadly to pre-empt nonnegotiable rights conferred on individual 27 employees as a matter of state law.’” Id. at 1152 (quoting Livadas v. Bradshaw, 1 The Ninth Circuit has developed a two-step test to determine whether 2 § 301 preempts a state law claim. Id. Step one is to ask if the cause of action 3 involves a right that “‘exists solely as a result of the CBA.’” Id. (quoting Kobold 4 v. Good Samaritan Reg’l Med. Ctr., 832 F.3d 1024, 1032 (9th Cir. 2016). If so, 5 the claim is preempted. Id. If not, “we proceed to the second step and ask 6 ‘whether a plaintiff’s state law right is substantially dependent on analysis of 7 [the CBA],’ which turns on whether the claim cannot be resolved by simply 8 ‘look[ing] to’ versus ‘interpreting’ the CBA.” Id. at 1153 (quoting Kobold, 832 9 F.3d at 1033). “Interpretation” is narrowly construed, and “‘claims are only 10 preempted to the extent there is an active dispute over “the meaning of contract 11 terms.”’” Id. (quoting Alaska Airlines Inc. v. Schurke, 898 F.3d 904, 921 (9th 12 Cir. 2018)). “Accordingly, a state law claim may avoid preemption if it does not 13 raise questions about the scope, meaning, or application of the CBA.” Id. 14 IV. ANALYSIS 15 A. Whether the Right Exists Solely as a Result of the CBA 16 Under the Ninth Circuit’s two-step test to determine whether § 301 17 preempts a state law claim, step one is to ask if the cause of action involves a 18 right that “‘exists solely as a result of the CBA.’” Curtis, 913 F.3d at 1152 19 (quoting Kobold, 832 F.3d at 1032). 20 In Curtis, the plaintiff alleged that his employer “violated California labor 21 law by failing to recognize” the time he spent off duty on an offshore oil 22 platform as “‘hours worked.’” Id. at 1153. Section 510(a) of the California 23 Labor Code “provides a default rule for overtime.” Id. But § 514 of the 24 California Labor Code provides that 25 Sections 510 and 511 do not apply to an employee covered by a valid 26 collective bargaining agreement if the agreement expressly provides 27 for the wages, hours of work, and working conditions of the 1 overtime hours worked and a regular hourly rate of pay for those 2 employees of not less than 30 percent more than the state minimum 3 wage. 4 “[T]he default definition of overtime and overtime rates in section 510 does not 5 apply to an employee who is subject to a qualifying CBA.” Curtis, 913 F.3d at 6 1153–54. Thus, if a CBA meets the requirements of section 514, the right to 7 overtime “‘exists solely as a result of the CBA,’ and therefore is preempted 8 under § 301.” Id. at 1154 (quoting Kobold, 832 F.3d at 1032). Based upon this 9 reasoning, the Ninth Circuit held in Curtis that the plaintiff’s claim was 10 preempted. Id. 11 Physicians argues that Curtis is controlling,25 stating in its Notice of 12 Removal that “a vast majority” of the employees on whose behalf this action 13 was brought are represented by three different unions and are “subject to 14 multiple collective bargaining agreements.”26 According to the Bird 15 Declaration, for most workers the minimum wage is “more than 30 percent 16 above the applicable state minimum wage.”27 The CBAs attached to the Bird 17 Declaration also provide alternative work arrangements.28 Thus, according to 18 Physicians, “Sections 510 and 511” of the California Labor Code “do not apply” 19 because the majority of employees are “covered by a valid collective bargaining 20 agreement” that “expressly provides for the wages, hours of work, and working 21 conditions of the employees” and that “provides premium wage rates for all 22 overtime hours worked and a regular hourly rate of pay for those employees of 23 not less than 30 percent more than the state minimum wage.” Cal. Lab. Code 24 § 514. Physicians therefore contends that some of the rights at issue in this 25

26 25 Opposition at 5:16-6:25. 26 Notice of Removal ¶ 7. 27 27 Bird Declaration at ¶¶ 4 & 5. 1 lawsuit arise under the applicable CBAs rather than state law, providing this 2 Court with subject matter jurisdiction under the LMRA.29 3 Physicians’ argument, however, fails to address the fact that not all 4 employees are provided with the rights required to exempt them from §§ 510 5 and 511 under § 514 of the California Labor Code. In Huffman v. Pac. Gateway 6 Concessions LLC, No. 19-CV-01791-PJH, 2019 WL 2563133 (N.D. Cal. June 21, 7 2019), the plaintiff brought a putative class action that alleged violations of the 8 California Labor Code. The defendant removed the case based upon the 9 contention that the claims at issue were preempted by the LMRA. Id. at *2. 10 The court analyzed whether the claims were preempted where the CBA at issue 11 met “Section 514’s substantive requirements with respect to [the plaintiff] but 12 not with respect to other employees covered by it.” Id. at *4. 13 The proposed class in Huffman included employees governed by various 14 CBAs. Id. at *1. Although the CBA that applied to the plaintiff met the 15 requirements of § 514 with respect to the plaintiff, it did not meet all of the 16 substantive requirements with respect to other employees governed by the CBA. 17 Id. at *5. The court considered the plain language of the statute and noted that 18 while the term “employees” in § 514 is not defined, it “stands in stark 19 contradistinction to the earlier reference to ‘an employee.’” Id. The court 20 reasoned that “[t]he plural term ‘those employees’ refers back the statute’s 21 earlier use of ‘the employees’ which . . . means all employees covered by the 22 CBA.” Id. at *5. 23 The Huffman court concluded that “a CBA must satisfy Section 514’s 24 substantive requirements with respect to all covered employees in order to render 25 Section 510 inapplicable to any particular employee.” Id. at *6 (emphasis 26 added); see also Sarmiento v. Sealy, Inc., No. 18-CV-01990-JST, 2019 WL 27 1 3059932, at *7 (N.D. Cal. July 12, 2019) (agreeing with Huffman’s reasoning). 2 Similarly, in Rooney v. Save Mart Supermarkets, No. 2:20-cv-00671-JAM-FEB, 3 2020 WL 3819481, at *2 (E.D. Cal. July 8, 2020), the defendant argued that 4 § 514 does not require all putative class members to earn 30% more than the 5 state minimum wage. Id. at *2. The court adopted “the reading of the statute’s 6 plain language in Huffman, to find that the CBA does not meet Section 514’s 7 requirements because it does not meet the requirements with respect to all 8 employees.” Id. at *3 (emphasis added). 9 Here, the parties do not dispute that not all of the CBAs at issue meet the 10 § 514 requirements for all employees on whose behalf this action was brought. 11 The Bird Declaration states that the SEIU CBAs “provide wages more than 30 12 percent above the applicable minimum wage for the vast majority of employees 13 covered by them during the applicable PAGA period.”30 Similarly, Bird testifies 14 that the Teamsters CBA “provides wages more than 30 percent above the 15 applicable minimum wage for the vast majority of employees covered by it 16 during the applicable PAGA period.”31 These statements impliedly concede 17 that not all employees who are part of the PAGA class are provided with the 18 wage required under § 514, even if those employees are covered by a CBA.32 19 Moreover, Physicians concedes that Calderon himself is not covered by any 20 CBA because no such agreement applies to his position of security guard.33 In 21 view of the foregoing, “the Court finds ‘plaintiff’s asserted cause of action 22 involve[s] a right conferred upon an employee by virtue of state law, not by a 23 CBA.’” Id. (quoting Huffman, 2019 WL 2563133, at *6). 24

25 30 Bird Declaration at ¶ 5 (emphasis added). 31 Id. at ¶ 6 (emphasis added). 26 32 In addition, the removing defendant bears the burden of establishing that 27 removal is proper. See, e.g., Abrego Abrego v. The Dow Chem. Co., 443 F.3d 676, 684 (9th Cir. 2006). 1 B. Whether the State Law Right Is Substantially Dependent on the CBA 2 If the “asserted cause of action” does not involve a right that exists solely 3 as a result of the CBA, “we proceed to the second step and ask ‘whether a 4 plaintiff’s state law right is substantially dependent on analysis of [the CBA],’ 5 which turns on whether the claim cannot be resolved by simply ‘look[ing] to’ 6 versus ‘interpreting’ the CBA.” Curtis, 913 F.3d at 1153 (9th Cir. 2019) 7 (quoting Kobold, 832 F.3d at 1033). “‘[I]n the context of § 301 complete 8 preemption, the term “interpret” is defined narrowly—it means something 9 more than “consider,” “refer to,” or “apply.”’” McCray v. Marriott Hotel 10 Servs., Inc., 902 F.3d 1005, 1011 (9th Cir. 2018) (quoting Balcorta v. Twentieth 11 Century-Fox Film Corp., 208 F.3d 1102, 1108 (9th Cir. 2000)) (alteration in 12 original). 13 For example, in Huffman, the defendant argued that the plaintiff’s 14 overtime claim was “substantially dependent upon interpretation and analysis of 15 his CBA’s wage provisions because California’s overtime law requires payment 16 of premium wages calculated from each employee’s ‘regular rate of pay’ 17 (Cal. Lab. Code § 510),” which could “only be determined by reviewing the 18 CBA’s wage structure.” Huffman, 2019 WL 2563133, at *6. The court found 19 that the relevant provisions of the CBA at issue did not require interpretation. 20 Id. at *7. The defendant therefore failed to show that the court had subject 21 matter jurisdiction. Id. at *8. 22 Here, Physicians asserts that Calderon’s representative claims are 23 “substantially dependent on an analysis of the collective bargaining 24 agreements.”34 Physicians states that “Plaintiff’s overtime claim is dependent 25 on this Court’s interpretation of Articles in the CBAs referring to the regular 26 rate of pay and differentials that are included in that regular rate agreed upon 27 1 under the CBAs for such premium overtime rates.”35 “For instance, Article 3 2 of the SEIU CBAs provide that an employee’s overtime compensation is to be 3 calculated in accordance with their regular rate of pay.”36 “Articles 9 and 11 of 4 the current SEIU CBA,” in turn, “discuss the differentials that a covered 5 employee will be paid for their assigned shifts.”37 Similarly, “Article 5 of the 6 CNA CBA provides that: ‘All RNs serving as relief Charge Nurses shall receive 7 a 5% pay differential.’”38 8 Physicians, however, does not explain how or why any provision of the 9 applicable CBAs is ambiguous such that the Court would need to interpret it 10 rather than to merely apply it. “[R]eading and applying relevant, unambiguous 11 provisions of the CBA require[s] the court to only ‘look to,’ rather than 12 ‘interpret,’ the agreement.” McCray, 902 F.3d at 1012 (quoting Kobold, 832 13 F.3d at 1040); see also Alaska Airlines, 898 F.3d at 927 (“reliance on and 14 reference to CBA-established or CBA-defined terms of employment do not 15 make for a CBA dispute if there is no disagreement about the meaning or 16 application of any relevant CBA-covered terms of employment”). Moreover, 17 the “speculative possibility” that a dispute may arise later as to the meaning of a 18 provision in one of the CBAs does not provide the Court with jurisdiction at this 19 stage of the case. McCray, 902 F.3d at 1013. Physicians has therefore “failed to 20 meet its burden to demonstrate that this [C]ourt has jurisdiction of the action.” 21 Huffman, 2019 WL 2563133, at *8. 22 23 24 25

26 35 Id. at ¶ 21. 36 Id. 27 37 Id. 1 V. CONCLUSION 2 For the foregoing reasons, Calderon’s Motion to Remand is GRANTED. 3|| This case is REMANDED to the Riverside County Superior Court. 4 IT IS SO ORDERED. □□ 6 || Dated: March 8, 2021 ° 7 NITED: oR TES DISTRICT JUDGE 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28