1 2 3
6 7 8 UNITED STATES DISTRICT COURT 9 EASTERN DISTRICT OF CALIFORNIA 10
11 RAFFI H. KAJBEROUNI, ) Case No.: 1:19-cv-1703 JLT BAK (SKO) ) 12 Plaintiff, ) ORDER GRANTING DEFENDANT’S MOTION ) TO DISMISS 13 v. ) ) (Doc. 36) 14 BEAR VALLEY COMMUNITY SERVICES ) DISTRICT, et al., ) 15 ) Defendants. ) 16 )
17 Raffi Kajberouni asserts he was required to perform work without proper compensation as an 18 officer of the Bear Valley Police Department. Kajberouni seeks to hold the Bear Valley Community 19 Services District and the BVPD liable for violations of federal and state employment laws. (See 20 generally Doc. 29.) 21 The District seeks dismissal pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure, 22 arguing several California Labor Code Sections are inapplicable to the District and Kajberouni failed to 23 allege facts sufficient to support his claims. (Doc. 36.) Kajberouni opposes the motion, asserting the 24 First Amended Complaint “states plausible claims upon which relief can be granted.” (Doc. 42 at 2.) 25 The Court finds the matter suitable for decision without oral arguments, and no hearing date will be set 26 pursuant to Local Rule 230(g) and General Order 618. For the reasons set forth below, the motion to 27 dismiss is GRANTED. 28 /// 1 I. Background and Allegations 2 Kajberouni was employed in the position of “Police Officer I” with the BVPD from November 3 24, 2015 to May 15, 2019. (Doc. 29 at 5, ¶ 5.) Kajberouni asserts that while a direct employee of 4 BVPD, he “was simultaneously an indirect employee” of the Bear Valley Community Services District, 5 which “acts as the local government in Bear Valley Springs.” (Id. at 5-6, ¶¶ 5, 7.) 6 According to Kajberouni, the BVPD and the District required him “to work, perform duties and 7 spend time” without compensation. (Doc. 29 at 7, ¶ 9.) Kajberouni alleges the BVPD expected 8 officers “to be ready to start patrolling at the beginning of their scheduled shift,” which required several 9 tasks without compensation. (Id. at 9, ¶ 10.) For example, Kajberouni asserts that prior to clocking in, 10 he was required to don his uniform; “check[] equipment attached to duty belts and tactical ballistic 11 vests to ensure that all safety equipment was functioning properly;” and load the “patrol vehicle with 12 duty equipment, including but not necessarily limited to a Police Department issued laptop, gun(s), 13 ammunition, lidar/radar, breathalyzer, defibrillator, and first aid bag.” (Id. at 7-8, ¶ 9.) 14 Kajberouni alleges that if he was scheduled to start a shift starting at 6:00 am, he arrived 15 “anywhere between 5:15 to 5:30 am” and took 10-15 minutes “to don his police uniform and safety and 16 protective gear” in the locker room. (Doc. 29 at 9-10, ¶¶ 11, 12(a).) He asserts there were also times 17 when he talked with other officers or sergeants about their shifts prior to going to the locker room, in 18 which instance Kajberouni asserts BVPD and the District failed to compensate his for “approximately 19 15 to 30 minutes” of work. (Id. at 10, ¶ 12(b).) Kajberouni contends similar work—including doffing 20 the uniform and protective gear—was required off the clock, after his shift. (Id. at 7, ¶ 9.) He asserts 21 that he was compensated for the scheduled 12-hour shifts only, and “BVPD and [the District] did not 22 compensate BVPD officers for any pre or post shift work.” (Id. at 9, ¶ 10.) 23 Kajberouni contends the defendants failed to provide proper rest breaks and meal periods. 24 (Doc. 29 at 8, ¶ 9.) Kajberouni alleges that during a “typical 12-hour patrol, he would not have a set 25 time as to when is rest breaks and/or meal periods were.” (Id. at 24, ¶ 41.) He asserts that he attempted 26 “to schedule these during slow patrol periods.” (Id.) However, Kajberouni alleges he was “not 27 completely relieved of duty” during the rest and meal periods because he, and other officers, “could not 28 turn their hand radio and remote shoulder speaker microphone off and were required to respond to calls 1 even if such resulted in interrupted meal and rest breaks.” (Id. at 8, ¶ 9(d).) As a result, Kajberouni 2 concludes he was “on call” for his rest and meal periods. (Id.) 3 Finally, Kajberouni asserts he “carried on his duty belt a tourniquet that he purchased for 4 which BVPD neither provided nor reimbursed him.” (Doc. 29 at 26, ¶ 43.) He contends the 5 tourniquet “was necessary in case [he] ever needed to use such for himself, another officer, or a 6 member of the public, for example due to being shot on the job.” (Id. at 26-27, ¶ 43.) Kajberouni 7 alleges the District and BVPD owe him “reimbursement for this necessary safety business expense.” 8 (Id. at 27, ¶ 43.) 9 Kajberouni initiated this action by filing a complaint on December 6, 2019, which he amended 10 on October 14, 2021. (Docs. 1, 29.) Kajberouni seeks to hold the District and BVPD liable for the 11 following causes of action: (1) failure to pay both minimum and regular wages under the Fair Labor 12 Standards Act, 29 U.S.C. § 206; (2) failure to pay overtime wages under the FLSA; (3) meal period 13 violations; (4) rest period violations; (5) failure to pay all wages due upon separation, and waiting time 14 penalties; (6) failure to reimburse necessary business expenses; and (7) unfair business practices. (See 15 Doc. 29 at 1-2, 20-27.) 16 The District filed the pending motion to dismiss on November 12, 2021. (Doc. 36.) Kajberouni 17 filed his opposition to the motion on December 2, 2021 (Doc. 42), to which the District filed a reply on 18 December 8, 2021 (Doc. 45). 19 II. Motions to Dismiss 20 A Rule 12(b)(6) motion “tests the legal sufficiency of a claim.” Navarro v. Block, 250 F.3d 729, 21 732 (9th Cir. 2001). Dismissal of a claim under Rule 12(b)(6) is appropriate when “the complaint lacks 22 a cognizable legal theory or sufficient facts to support a cognizable legal theory.” Mendiondo v. 23 Centinela Hosp. Med. Ctr., 521 F.3d 1097, 1104 (9th Cir. 2008). Thus, under Rule 12(b)(6), “review is 24 limited to the complaint alone.” Cervantes v. City of San Diego, 5 F.3d 1273, 1274 (9th Cir. 1993). 25 The Supreme Court explained: “To survive a motion to dismiss, a complaint must contain 26 sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’” 27 Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 28 (2007)). The Supreme Court explained, 1 A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct 2 alleged. The plausibility standard is not akin to a “probability requirement,” but it asks for more than a sheer possibility that a defendant has acted unlawfully. Where a 3 complaint pleads facts that are “merely consistent with” a defendant’s liability, it “stops short of the line between possibility and plausibility of ‘entitlement to relief.’” 4 5 Iqbal, 556 U.S. at 678 (internal citations omitted). 6 “The issue is not whether a plaintiff will ultimately prevail, but whether the claimant is entitled 7 to offer evidence to support the claims. Indeed it may appear on the face of the pleadings that a recovery 8 is very remote and unlikely but that is not the test.” Scheuer v. Rhodes, 416 U.S. 232, 236 (1974). The 9 Court “will dismiss any claim that, even when construed in the light most favorable to plaintiff, fails to 10 plead sufficiently all required elements of a cause of action.” Student Loan Marketing Assoc. v. Hanes, 11 181 F.R.D. 629, 634 (S.D. Cal. 1998). To the extent pleading deficiencies can be cured by the plaintiff 12 alleging additional facts, leave to amend should be granted. Cook, Perkiss & Liehe, Inc. v. Northern 13 Cal. Collection Serv., 911 F.2d 242, 247 (9th Cir. 1990) (citations omitted). 14 III. Discussion and Analysis 15 The District asserts “the majority of the claims for relief alleged in the FAC are inapplicable to 16 the District,” and asserts the third, fourth, fifth, and seventh claims should be dismissed with prejudice. 17 (Doc. 36 at 6.) In addition, the District contends Kajberouni failed to allege facts sufficient to support 18 his sixth claim, and seeks dismissal of the claim.1 (Id. at 6, 13.) Kajberouni contends the identified 19 Labor Code provisions apply to the District, and any pleading deficiencies may be cured by 20 amendment. (Doc. 42 at 8-11.) 21 A. Liability of the BVPD 22 As an initial matter, the District asserts that the Bear Valley Community Services District was 23 “erroneously sued as an additional named defendant, Bear Valley Police Department.” (Doc. 36 at 1.) 24 The District maintains that the BVPD is “a department within the District,” and as such the District 25 alone is the proper defendant. (Doc. 45 at 3, emphasis omitted.) Indeed, Kajberouni acknowledges the 26 District compensated BVPD officers, and the BVPD manual stated its “policies are not intended to 27
28 1 In the motion, the District requested the sixth claim for relief be dismissed without prejudice. (Doc. 36 at 13.) In the 1 supersede any related Bear Valley Community Service District personnel Rules,” which requires 2 compliance with the personnel policies of the District. (Doc. 29 at 5, ¶ 6; id. at 8, ¶ 10.) Kajberoui 3 notes the District’s website indicates it “acts as the local government in Bear Valley Springs” and 4 “manages and maintains the water utility, wastewater utility, solid waste transfer station, police, gate, 5 and infrastructure including roads and mailboxes.”2 (Id. at 6, ¶ 7; see also Doc. 42 at 4 [noting the 6 District “managed and maintained BVPD”].) 7 Notably, Kajberouni does not address the assertion that the District is the only proper defendant 8 in the action, and dismissal of the BVPD as a separate defendant in the action appears appropriate. 9 Whether Kajberouni agrees the BVPD is not independently liable, the issues before the Court relate to 10 the sufficiency of the pleadings and his ability to impose liability upon the District, as challenged in the 11 motion to dismiss. 12 B. Third and Fourth Claims for Relief: Meal and Rest Period Violations 13 Kajberouni seeks to hold the defendants liable for the failure to provide uninterrupted meal 14 periods and rest periods in violation of Cal. Lab. Code §§ 226.7 and 512. (Doc. 29 at 23-25.) Pursuant 15 to Section 512, an employer must provide non-exempt employees with an uninterrupted meal period of 16 at least thirty minutes for each work period of five hours, and two meal periods for each period of ten 17 hours. See Cal. Lab. Code § 512(a). In addition, “[n]o employer shall require any employee to work 18 during a meal or rest period or recovery period mandated...” Cal. Lab. Code § 226.7(b). If an employer 19 fails to comply with these provisions, “the employer shall pay the employee one additional hour of pay 20 at the employee’s regular rate of compensation for each work day that the meal or rest period is not 21 provided.” Cal. Labor Code § 226.7(c). 22 The District notes that Kajberouni acknowledges its status as a public entity in the First 23 Amended Complaint. (Doc. 36 at 9; see also Doc. 29 at 6, ¶ 7 [alleging “BVCSD is a California public 24 entity employer”].) The District argues due to its status as a public entity, the identified meal and rest 25
26 2 Documents subject to judicial notice, such as matters of public record, may be considered on a motion to dismiss. See Harris v. Cnty of Orange, 682 F.3d 1126, 1132 (9th Cir. 2011) The Court may take judicial notice of information posted on 27 a public entity’s website when its accuracy is undisputed. See Daniels-Hall v. Nat’l Educ. Assoc, 629 F.3d 992, 998-99 (9th Cir. 2010); Gilliam v. Bank of Amer., N.A., 2017 WL 4443263, at *2 (C.D. Cal. Oct. 5, 2017). There is no dispute as to 28 the information identified on the District’s website located at https://www.bvcsd.com, which is quoted in the First 1 break provisions of Sections 512 and 226.7 are inapplicable. (Id. at 8-10, citing Johnson v. Arvin- 2 Edison Water Storage Dist., 174 Cal.App.4th 729, 736 (2009); Pinder v. Employment Devel. Dep’t, 227 3 F.Supp.3d 1123, 1152 (E.D. Cal. 2017).) Kajberouni maintains his claims under Sections 512 and 4 226.7 apply to the District though he does not address cases cited by the District or identify legal 5 authority supporting his position. (Doc. 41 at 8.) 6 California courts have determined public entities are not subject to the meal and rest period 7 requirements of Section 512 and 226.7. In Johnson, the Fifth District Court of Appeal observed that 8 “traditionally, absent express words to the contrary, governmental agencies are not included within the 9 general words of a statute,” and “this rule applies to the Labor Code.” 174 Cal.App.4th at 736 (quoting 10 Wells v. One2One Learning Foundation, 39 Cal.4th 1164, 1190 (2006). The court noted also that the 11 California Legislature “expressly applied certain wage and hour provisions to public entities,” such as 12 Labor Code Sections 550, 551, 552, and 554. Id. at 736. The court explained: 13 If this court were to hold that, because not expressly exempted, public entities are subject to sections 510 and 512, we would be implying a term that has been used in 14 one place, i.e., section 555, but excluded in another, i.e., sections 510 and 512. Such an interpretation would violate the maxim that when the Legislature has employed a 15 term or phrase in one place and excluded it in another, it should not be implied where excluded. The reference to public entities in section 555 indicates that, in the 16 context of wage and hour provisions, the Legislature expressly refers to public entities when it intends them to be included. 17
18 Johnson, 174 Cal.App.4th at 736-37 (internal citation, quotation marks omitted). Johnson observed 19 Sections 510 and 512 infringe upon the “sovereign powers” of a public entity, which “can only perform 20 its purposes and functions through its employees.” Id. at 738. Accordingly, the court concluded a 21 public entity “was exempt from the requirements of sections 510 and 512.” Id. at 739. 22 The First District Court of Appeal adopted the rationale of Johnson in California Correctional 23 Peace Officers Assoc. v. State of California, 188 Cal. App. 4th 646 (2010), and found that the failure 24 to expressly exclude public entities from the provisions of Sections 512 and 226.7, did not extend 25 these sections to municipalities. The court found requiring an express exclusion was “contrary to an 26 established rule that has been recognized by the Legislature, i.e., public entities are not subject to a 27 general statute unless expressly included.” Id. at 653 (citation omitted). 28 The court also observed that, “[i]t is well established that public employees have been 1 historically exempt from IWC wage orders.” Id. at 655 (citing e.g., Monzon v. Shaefer Ambulance 2 Serv., Inc., 224 Cal.App.3d 16, 29 (1990); Kim v. Regents of Univ. of Cal., 80 Cal.App.4th 160, 166- 3 167 (2000). Although the court had “no quarrel with the concept of meal breaks as generally being 4 beneficial to all employees”—including those in public safety and law enforcement—the court noted 5 its role was “to interpret the law, not insert what the Legislature has omitted.” Id. at 656. 6 Accordingly, the First District also concluded the meal period provisions of Sections 512 and 226.7 7 “do not apply to public employees.” Id. at 650; see also id. at 657. 8 Following Johnson and California Correctional Peace Officers’ Assoc., this Court has 9 concluded the employees of a public entity are not covered by Section 226.7 and 512. Pinder, 227 10 F.Supp.3d at 1152. The Court observed it was undisputed the defendant was a public entity, because 11 the plaintiff described the defendant “as a ‘government agency’ and ‘California government entity’ in 12 the First Amended Complaint.” Id. Because Pinder was an employee of a public entity, the Court 13 concluded the defendant was entitled to summary judgment on the meal period claims arising under 14 Sections 512 and 226.7. Id. at 1153. 15 Similarly, Kajberouni acknowledges in his complaint that the District “is a California public 16 entity employer.” (Doc. 29 at 6, ¶ 7.) He notes the District “was formed pursuant to state law, to wit, 17 the California Community Services Law found at Cal. Govt. Code §§61000-61850.” (Id.) Kajberouni 18 also observes the District “managed and maintained [the] BVPD.” (Id.) As in Pinder, there is no 19 dispute that the District was a public entity, and Kajberouni was its employee. Consequently, the 20 District is not subject to the meal period provisions of Sections 512 and 226.7. See Pinder, 227 21 F.Supp.3d at 1152-53; Johnson, 174 Cal.App.4th at 736, 739; California Correctional Peace Officers 22 Assoc., 188 Cal. App. 4th at 650. 657; see also Sanchez v. Regents of the Univ. of Cal., 2021 Cal. 23 Super. LEXIS 5288, at *8 (Cal. Super. Ct. Jan. 8, 2021) (“Plaintiff cannot state a claim for the third 24 cause of action for failure to pay meal and rest period compensation under Labor Code sections 226.7, 25 512, as it is established that public entities are not subject to these provisions”). Because Kajberouni is 26 unable to state claims against the District under Sections 512 and 226.7, his third and fourth claims for 27 meal and rest break violations are dismissed. 28 /// 1 C. Fifth Claim for Relief: Wages Due and Waiting Time Penalties 2 Kajberouni seeks to hold the District liable for “failure to pay all wages due upon separation” 3 pursuant to California Labor Code Sections 201 or 202.3 (Doc. 29 at 25, emphasis omitted.) In 4 addition, he seeks waiting time penalties under Section 203, which provides that when an employer 5 willfully fails to comply with Sections 201 or 202 upon an employee’s separation, “the wages of the 6 employee shall continue as a penalty from the due date thereof at the same rate until paid or until an 7 action therefor is commenced; but the wages shall not continue for more than 30 days.” Cal. Labor 8 Code § 203(a). However, pursuant to Cal. Lab. Code § 220(b), the provisions of sections “200 to 211, 9 inclusive… do not apply to the payment of wages of employees directly employed by any county, 10 incorporated city, or town, or other municipal corporation.” Cal. Lab. Code § 220(b). 11 Based upon the provision of Section 220(b), the District asserts “California Labor Code 12 Sections 201, 202 and 203 are not applicable to the District.” (Doc. 36 at 10.) The District contends in 13 Johnson, the court “held that special districts, such as the District, are municipal corporations under 14 these statutes.” (Id., citing Johnson, 174 Cal.App.4th at 740-41.) According to the District, “based on 15 allegations in Plaintiff’s FAC and California law, the District satisfies the criteria for a municipal 16 corporation and is thus exempt from the requirements of Labor Code sections 201, 202, and 203.” (Id. 17 at 11.) On the other hand, Kajberouni asserts that Sections 201, 202, and 203 apply to the District 18 because it was his “indirect and joint employer.” (Doc. 42 at 8, emphasis omitted). In support of this 19 assertion, Kajberouni notes he alleged that he was “a direct employee of BVPD” and “an indirect 20 employee for BVCSD.” (Id., quoting Doc. 29 at 5, ¶ 5.) 21 Kajberouni’s attempt to distinguish between his employment with BVPD and the District 22 constitutes a difference without distinction. It is undisputed that the District “compensated BVPD 23 officers, including Officer Kajberouni” for their shifts. (Id. at 8, ¶ 10, emphasis omitted.) These 24
25 3 Kajberouni alleges he was owed “wages due upon separation” (Doc. 29 at 25, ¶ 42), but does not clarify if his employment was terminated or if he resigned from the position. Section 201 provides that “[i]f an employer discharges an employee, the 26 wages earned and unpaid at the time of discharge are due and payable immediately.” Cal. Lab. Code § 201. On the other hand, Section 202 relates to employees who quit and states “[i]f an employee ... quits his or her employment, his or her 27 wages shall become due and payable not later than 72 hours thereafter...” Cal. Lab. Code § 202 (emphasis added). Importantly, a “plaintiff could not have both resigned and been terminated at the same time.” Perez v. DNC Parks & 28 Resorts at Sequoia, 2020 WL 4344911 *8 (E.D. Cal. July 29, 2020); see also Pineda v. Bank of Am., N.A., 50 Cal. 4th 1389, 1 allegations clearly support a conclusion that the District paid Kajberouni’s wages and was his “direct” 2 employer. Moreover, the term “municipal corporation” is not “used in its strict or proper sense,” but 3 rather encompasses a district which “exercise[s] a governmental function.” Johnson, 174 Cal.App.4th 4 at 740-41. It is also undisputed that the District “acts as the local government” and maintains the 5 police department. (See Doc. 29 at 6, ¶ 7; see also Doc. 42 at 4 (acknowledging the District “manages 6 and maintained BVPD”).) Thus, it appears the District is a municipal corporation within the meaning 7 of Section 220(b). See Johnson, 174 Cal.App.4th at 740-41. Kajberouni does not dispute this status.4 8 (See Doc. 42 at 8-9.) Because the District is a municipal corporation, Kajberouni is unable to state a 9 claim against the District for violations of Sections 201, 202, or 203. Accordingly, the motion to 10 dismiss the fifth claim for relief is granted. 11 D. Sixth Claim for Relief: Reimbursement of Expenses 12 Kajberouni seeks reimbursement of necessary business expenses under Cal. Lab. Code § 2802, 13 which provides in relevant part: “An employer shall indemnify his or her employee for all necessary 14 expenditures or losses incurred by the employee in direct consequence of the discharge of his or her 15 duties, or of his or her obedience to the directions of the employer….” To state a claim under Section 16 2802, a plaintiff must allege: “(i) the employee made expenditures or incurred losses; (ii) the 17 expenditures or losses were incurred in direct consequence of the employee’s discharge of his or her 18 duties, or obedience to the directions of the employer; and (iii) the expenditures or losses were 19 reasonable and necessary.” Marr v. Bank of Am., 2011 WL 845914, at *1 (N.D. Cal. Mar. 8, 2011) 20 (citing Gattuso v. Harte-Hanks Shoppers, Inc., 42 Cal. 4th 554, 568 (2007)). “In addition, the 21 employer ‘must either know or have reason to know that the employee has incurred [the] expense.’” Id. 22 (quoting Stuart v. RadioShack Corp., 641 F. Supp. 2d 901 (N.D. Cal. 2009)). 23 Kajberouni alleges he “carried on his duty belt a tourniquet that he purchased for which BVPD 24 neither provided nor reimbursed him.” (Doc. 29 at 26, ¶ 43.) He contends the tourniquet “was 25 necessary in case [he] ever needed to use such for himself, another officer, or a member of the public, 26 for example due to being shot on the job.” (Id. at 26-27, ¶ 43.) Thus, Kajberouni asserts the District 27 28 4 1 owes him “reimbursement for this necessary safety business expense.” (Id. at 27, ¶ 43.) 2 The District asserts Kajberouni’s claim under Section 2802 fails because he fails to allege facts 3 sufficient to support his claim. (Doc. 36 at 12-13.) The District contends Kajberouni does not allege 4 he was directed to make the purchase or whether it “resulted from performing his duties.” (Id. at 13.) 5 The District also argues Kajberouni fails to allege facts sufficient to support a conclusion that the 6 expenditures were “reasonable and necessary. (Id.) Further, the District observes Kajberouni “fails to 7 allege whether the District knew or should have known that he incurred an expense.” (Id.) 8 Kajberouni contends for the first time in his opposition that “his supervisor was aware” 9 Kajberouni “carried a tourniquet on his utility belt daily.” (Doc. 42 at 10.) In addition, Kajberouni 10 asserts he “was told by Sergeant Pearce that the department (BVPD) would not purchase auxiliary 11 items.” (Id.) Acknowledging the pleading deficiencies, Kajberouni asserts his “claim can be cured 12 through amendment to prove defendants were aware of [his] 2802 claim.” (Doc. 42 at 10.) 13 It is undisputed that the facts alleged are insufficient to support a claim for reimbursement under 14 Section 2802. For example, Kajberouni did not allege facts sufficient to support a conclusion that he 15 was directed to purchase the tourniquet, only to be told by the sergeant that the department would not 16 reimburse it, or that the tourniquet purchase was “a direct consequence” of discharging his duties. See 17 Marr, 2011 WL 845914, at *1; Gattuso, 42 Cal. 4th at 568. Further, as Kajberouni acknowledges, he 18 failed to allege in the First Amended Complaint any facts supporting a conclusion that the District 19 knew, or had reason to know, that Kajberouni purchased the tourniquet for his belt.5 Accordingly, the 20 claim under Section 2802 is dismissed. 21 E. Seventh Claim for Relief: Cal. Bus. & Prof Code § 17200 22 Kajberouni’s final claim for relief in the FAC is for a violation of California’s Unfair 23 Competition Law, as set forth in Cal. Bus. & Prof. Code § 17200, et seq. (Doc. 29 at 27.) Under 24 Section 17200, unfair competition includes any “unlawful, unfair, or fraudulent business act or 25 practice.” Cal. Bus. & Prof. Code § 17200. Therefore, there are three prongs under which a claim 26 27 5 On the other hand, there is no showing that an employee is entitled to decide whether additional 28 items are necessary tools for the job and, based upon the employee’s opinion, become entitled to reimbursement for the items the employee, in his sole discretion, purchases. 1 may be established under Section 17200. Daro v. Superior Court, 151 Cal.App.4th 1079, 1093 (2007) 2 (“a business act or practice need only meet one of the three criteria—unlawful, unfair, or fraudulent— 3 to be considered unfair competition”); see also Lozano v. AT&T Wireless Servs., 504 F.3d 718, 731 4 (9th Cir. 2007) (“[e]ach prong … is a separate and distinct theory of liability”). Given the disjunctive 5 nature of the prongs, an action may be unfair even if it is not unlawful. Cel-Tech Communications., 6 Inc. v. Los Angeles Cellular Telephone Co., 20 Cal.4th 163, 181 (1999). 7 Kajberouni contends the District engaged in “unlawful business practices.” (Doc. 29 at 27, ¶ 8 44.) Acts proscribed under the “unlawful” prong of Section 17200 include “anything that can properly 9 be called a business practice and that at the same time is forbidden by law.” Farmers Ins. Exch. v. 10 Superior Court, 2 Cal. 4th 377, 383 (1992) (quoting Barquis v. Merchants Collection Assoc., 7 Cal.3d 11 94, 113 (1972)). In essence, the UCL “borrows violations of other laws and treats them as unlawful 12 practices independently actionable under Section 17200.” Saunders v. Superior Court, 27 Cal. App. 13 4th 832, 839 (1994) (internal quotation marks, citation omitted). Kajberouni asserts the District is 14 liable under Section 17200 based upon the alleged violations of the FLSA and California Labor Code 15 sections. (Doc. 29 at 27, ¶ 44.) 16 The District argues Kajberouni is unable to state a claim for unlawful practices under Section 17 17200 because it also “does not apply to public entities such as the District.” (Doc. 36 at 12.) The 18 District observes that under Section 17203, “[a]ny person who engages, has engaged, or proposed to 19 engage in unfair competition may be enjoined in any court of competent jurisdiction.” (Id., quoting 20 Cal. Bus. & Prof. Code § 17203.) The District asserts: “There is a myriad of California Court of 21 Appeals decisions holding that the term ‘person’ in the Unfair Competition Law, Cal. Bus. & Prof. 22 Code § 17200, et. seq, does not include governmental entities. As such, governmental entities are not 23 subject to claims under California Business and Professions Code section 17200 et seq.” (Id., citing 24 People for Ethical Treatment of Animals, Inc. v. Cal. Milk Producers Advisory Bd., 125 Cal.App.4th 25 871, 878-79 (2005).) Further, the District observes: “the Supreme Court of California has stated that 26 ‘Governmental entities ... are not subject to suit under the unfair competition law.’” (Id., quoting 27 Leider v. Lewis, 2 Cal.5th 1121, 1132 n.9 (Cal. 2017).) 28 Kajberouni argues that the cases upon which the District relies are “in applicable to [the 1 District] as an other organization of persons which should be held to have the same meaning under 2 Business and Professions Code section 17021 which defines ‘person’ to include ‘any person, firm, 3 association, organization, partnership, business trust, company, corporation or municipal or other public 4 corporation.’” (Doc. 41 at 9-10.) Kajberouni contends that if he is mistaken, “this issue can be cured 5 through amendment by reference to B & P 17000 to 17101.” (Id. at 10.) 6 The definition relied upon by Kajberouni under Section 17021 relates to the Unfair Practices 7 Act, rather than the Unfair Competition Law, which starts in Section 17200. See Townsend v. 8 California, 2010 WL 1644740, at *10 (E.D. Cal. Apr. 20, 2010) (noting the different definitions under 9 the UCL and the Unfair Practices Act). As the First District Court of Appeal explained, 10 The Unfair Practices Act (commencing with § 17000), which was enacted in 1941, contains its own definition of “person” to include “any person, firm, association, 11 organization, partnership, business trust, company, corporation or municipal or other public corporation.” (§ 17021, italics added.) In contrast, the UCL (commencing 12 with § 17200), which was enacted later, in 1977, omitted “municipal or other public corporation” from its definition of “person.” (§ 17201.) 13
14 People for the Ethical Treatment of Animals, Inc., 125 Cal.App.4th at 879 (footnotes omitted). Further, 15 the Court explained that “had the Legislature wished to include governmental entities… in its definition 16 of ‘person[s]’ subject to UCL liability it would have done so by using language similar to that in 17 section 17021.” Id. (modification in original). Because Kajberouni seeks to hold the District liable for 18 “unlawful business practices under violating Cal. Bus. & Prof. Code § 17200, et. seq.,” he clearly seeks 19 to state a claim under the UCL, rather than the Unfair Practices Act. (See Doc. 29 at 27, emphasis 20 omitted.) Accordingly, the definition identified by Kajberouni under Section 17021 is inapplicable to 21 his claim. See Townsend, 2010 WL 1644740, at *10; People for the Ethical Treatment of Animals, Inc., 22 125 Cal.App.4th at 879. 23 As the District argues, courts repeatedly determined public entities and municipal corporations 24 are not “a person” under the UCL, and are not subject to UCL claims. See Townsend, 2010 WL 25 1644740, at *10; see also People for the Ethical Treatment of Animals, Inc., 125 Cal.App.4th at 879; 26 Janis v. California State Lottery Com., 68 Cal.App.4th 824, 831 (1998) (finding government entities 27 were “not included in this definition of person” under Section 17201). Consequently, Kajberouni is 28 unable to state a claim against the District under the UCL, and his seventh claim is dismissed. 1 IV. Request for Leave to Amend 2 Pursuant to Rule 15 of the Federal Rules of Civil Procedure, leave to amend “shall be freely 3 given when justice so requires,” bearing in mind “the underlying purpose of Rule 15 to facilitate 4 decisions on the merits, rather than on the pleadings or technicalities.” Lopez v. Smith, 203 F.3d 1122, 5 1127 (9th Cir. 2000) (en banc) (alterations, internal quotation marks omitted). When dismissing a 6 complaint for failure to state a claim, “a district court should grant leave to amend even if no request to 7 amend the pleading was made, unless it determines that the pleading could not possibly be cured by 8 the allegation of other facts.” Id. at 1130 (internal quotation marks omitted). Accordingly, leave to 9 amend generally shall be denied only if allowing amendment would unduly prejudice the opposing 10 party, cause undue delay, or be futile, or if the moving party has acted in bad faith. Leadsinger, Inc. v. 11 BMG Music Publishing, 512 F.3d 522, 532 (9th Cir. 2008). 12 Kajberouni requests that if the motion to dismiss is granted, that the Court grant him leave to 13 amend. (Doc. 42 at 10-11.) As discussed above, the third, fourth, fifth, and seventh claims fail as a 14 matter of law, and the deficiencies cannot be cured by amendment. However, the Court has 15 insufficient information to conclude that amendment of the sixth claim for reimbursement under Cal. 16 Lab. Code § 2801 is futile due to the sparsity of the allegations. Indeed, Kajberouni asserts that he has 17 facts he can allege to state a claim under Section 2801. Furthermore, it does not appear amendment 18 would cause undue delay at this juncture, and there is no evidence he acted in bad faith. Thus, the 19 request for leave to amend is granted as to the sixth cause of action. 20 V. Conclusion and Order 21 For the reasons set forth above, the Court ORDERS: 22 1. The motion to dismiss (Doc. 36) is GRANTED. 23 2. The third, fourth, fifth, and seventh causes of action against the District are 24 DISMISSED without leave to amend. 25 3. The sixth cause of action for reimbursement is DISMISSED with leave to amend. 26 4. Plaintiff SHALL file any Second Amended Complaint within thirty days of the date of 27 service of this order. If Plaintiff does not file an amended pleading, the First Amended 28 Complaint (Doc. 29) shall be deemed the operative pleading, with the foregoing claims 1 dismissed. 2 3 IT IS SO ORDERED. 41! Dated: _ April 20, 2022 Charis [Tourn 5 TED STATES DISTRICT JUDGE 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28