Christopher Mendoza v. Nordstrom , 865 F.3d 1261 ( 2017 )

FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
CHRISTOPHER MENDOZA, an No. 12-57130
individual, on behalf of himself and
all other persons similarly situated, D.C. No.
Plaintiff-Appellant, 8:10-cv-00109-
CJC-MLG
and
MEAGAN GORDON,
Plaintiff-Intervenor,
v.
NORDSTROM, INC., a Washington
Corporation authorized to do
business in the State of California,
Defendant-Appellee.
2 MENDOZA V. NORDSTROM
CHRISTOPHER MENDOZA, an No. 12-57144
individual, on behalf of himself and
all other persons similarly situated, D.C. No.
Plaintiff, 8:10-cv-00109-
CJC-MLG
and
MEAGAN GORDON, OPINION
Plaintiff-Intervenor-Appellant,
v.
NORDSTROM, INC., a Washington
Corporation authorized to do
business in the State of California,
Defendant-Appellee.
Appeals from the United States District Court
for the Central District of California
Cormac J. Carney, District Judge, Presiding
Argued December 12, 2014
Resubmitted June 30, 2017
Pasadena, California
Filed August 3, 2017
Before: Susan P. Graber, Ronald M. Gould,
and Consuelo M. Callahan, Circuit Judges.
Opinion by Judge Graber
MENDOZA V. NORDSTROM 3
SUMMARY*
California Labor Law
The panel affirmed the district court’s dismissal of
plaintiffs’ California Labor Code Private Attorneys General
Act of 2004 (“PAGA”) claims against Nordstrom, Inc.
alleging violations of California’s “day of rest” law.
Cal. Lab. Code § 551 grants employees a right to one
“day’s rest” in seven. Cal. Lab. Code § 552 provides that no
employer “shall cause his employees to work more than six
days in seven.”
In an earlier order, the panel certified three questions of
state law to the California Supreme Court, and the Supreme
Court accepted certification and answered the questions,
Mendoza v. Nordstrom, Inc., 393 P.3d 375 (Cal. 2017).
The panel held that the stipulated facts demonstrated that
neither plaintiff worked more than six consecutive days in
any one Nordstrom work week, and each of their individual
claims under California Labor Code sections 551 and 552
failed. The panel rejected plaintiffs’ claim that the case must
be remanded to permit a new PAGA representative who did
suffer violations of sections 551 and 552 to “step forward”
and continue litigating the dispute.
*
This summary constitutes no part of the opinion of the court. It has
been prepared by court staff for the convenience of the reader.
4 MENDOZA V. NORDSTROM
COUNSEL
André E. Jardini (argued) and K.L. Myles, Knapp Petersen &
Clarke, Glendale, California, for Plaintiff-Appellant.
R. Craig Clark (argued) and James M. Treglio, Clark Law
Firm, San Diego, California; David R. Markham, The
Markham Law Firm, San Diego, California; for Plaintiff-
Intervenor-Appellant.
Julie A. Dunne (argued), Dawn Fonseca, and Joshua D.
Levine, Littler Mendelson P.C, San Diego, California, for
Defendant-Appellee.
OPINION
GRABER, Circuit Judge:
Plaintiff Christopher Mendoza and Plaintiff-Intervenor
Meagan Gordon (collectively, “Plaintiffs”) appeal the
dismissal of their California Labor Code Private Attorneys
General Act of 2004 (“PAGA”) claims against Defendant
Nordstrom, Inc., alleging violations of California’s “day of
rest” law. In an earlier order, we certified three questions of
state law to the California Supreme Court. Mendoza v.
Nordstrom, Inc., 778 F.3d 834 (9th Cir. 2015) (order). The
California Supreme Court accepted certification and
answered our questions. Mendoza v. Nordstrom, Inc.,
393 P.3d 375 (Cal. 2017). We now affirm the district court’s
dismissal.
MENDOZA V. NORDSTROM 5
BACKGROUND
The parties’ dispute in this case arises under a California
Labor Code provision granting employees a right to one
“day’s rest” in seven. Cal. Lab. Code § 551. Under section
551, “[e]very person employed in any occupation of labor is
entitled to one day’s rest therefrom in seven.” Section 552
safeguards that statutory entitlement by providing that “[n]o
employer of labor shall cause his employees to work more
than six days in seven.” Id. § 552.
Relevant here, sections 551 and 552 do not apply “when
the nature of the employment reasonably requires that the
employee work seven or more consecutive days, if in each
calendar month the employee receives days of rest equivalent
to one day’s rest in seven.” Id. § 554. Those sections also do
not apply “to any employer or employee when the total hours
of employment do not exceed 30 hours in any week or six
hours in any one day thereof.” Id. § 556. Violation of section
551 or 552 is a misdemeanor. Id. § 553.
We recounted the factual background of this case in our
prior order and, for convenience, repeat it below:
Christopher Mendoza and Meagan Gordon
are former employees of Nordstrom, Inc., in
California. Nordstrom is a retail department
store that operates in many locations
throughout the state of California, employing
more than 11,000 people statewide. Mendoza
worked for Nordstrom from March 2007 to
August 2009, first as a barista and later as a
sales representative in one of Nordstrom’s San
Diego locations. Gordon worked in the fitting
6 MENDOZA V. NORDSTROM
room at one of Nordstrom’s “Rack” locations
from July 2010 to February 2011.
While employed at Nordstrom, Mendoza
worked more than six consecutive days on
three occasions: (1) between January 26 and
February 5, 2009, he worked 11 consecutive
days, on two of which he worked less than six
hours; (2) between March 23 and 29, 2009, he
worked seven consecutive days, on three of
which he worked less than six hours; and
(3) between March 31 and April 7, 2009,
Mendoza worked eight consecutive days, on
five of which he worked less than six hours.
On each of those occasions, Mendoza was not
originally scheduled to work more than six
consecutive days, but he did so after being
asked by either his supervisor or a co-worker
to fill in for another employee.
Gordon worked more than six consecutive
days on one occasion, from January 14 to 21,
2011. On two of those days, Gordon worked
less than six hours.
Mendoza sued Nordstrom, alleging that it
had violated California Labor Code sections
551 and 552 by failing to provide him with
one day’s rest in seven on three occasions. He
brought the action in California state court;
Nordstrom removed to federal court.
Mendoza also pleaded other claims that are
not at issue in the present appeal. He filed his
complaint on behalf of a class of similarly
MENDOZA V. NORDSTROM 7
situated hourly, non-exempt Nordstrom
employees in California, and he brought the
relevant claim pursuant to the California’s
Labor Code Private Attorneys General Act of
2004. See Cal. Lab. Code §§ 2698–2699.5.
Gordon’s complaint in intervention alleged
the same causes of action as those in
Mendoza’s complaint.
With respect to the day-of-rest claims, the
district court held a bench trial. The district
court then ruled: (1) the day-of-rest statute,
California Labor Code section 551, applies on
a rolling basis to any consecutive seven-day
period, rather than by the workweek; (2) but
California Labor Code section 556 exempts
Nordstrom from that requirement, because
each plaintiff worked less than six hours on at
least one day in the consecutive seven days of
work; and (3) even if the exemption did not
apply, Nordstrom did not “cause” Mendoza or
Gordon to work more than seven consecutive
days, within the meaning of California Labor
Code section 552, because there was no
coercion; Plaintiffs waived their rights under
California Labor Code section 551 by
accepting additional shifts when they were
offered. The court dismissed the action; a
timely appeal to this court followed . . . .
Mendoza, 778 F.3d at 837–38.
8 MENDOZA V. NORDSTROM
CERTIFIED QUESTIONS AND RESPONSES
Noting that “no clear controlling California precedent
exist[ed]” with respect to the district court’s holdings, we
certified three questions to the California Supreme Court. Id.
at 836–37. The California Supreme Court accepted
certification and modified the questions slightly.
The first question asked: “Is the day of rest required by
sections 551 and 552 calculated by the workweek, or does it
apply on a rolling basis to any seven-consecutive-day
period?” Mendoza, 393 P.3d at 377. The California Supreme
Court responded: “A day of rest is guaranteed for each
workweek. Periods of more than six consecutive days of
work that stretch across more than one workweek are not per
se prohibited.” Id.
The second question asked: “Does the section 556
exemption for workers employed six hours or less per day
apply so long as an employee works six hours or less on at
least one day of the applicable week, or does it apply only
when an employee works no more than six hours on each and
every day of the week?” Id. The California Supreme Court
responded: “The exemption for employees working shifts of
six hours or less applies only to those who never exceed six
hours of work on any day of the workweek. If on any one
day an employee works more than six hours, a day of rest
must be provided during that workweek, subject to whatever
other exceptions might apply.” Id.
The third question asked: “What does it mean for an
employer to ‘cause’ an employee to go without a day of rest
(§ 552): force, coerce, pressure, schedule, encourage, reward,
permit, or something else?” Id. The California Supreme
MENDOZA V. NORDSTROM 9
Court responded: “An employer causes its employee to go
without a day of rest when it induces the employee to forgo
rest to which he or she is entitled. An employer is not,
however, forbidden from permitting or allowing an employee,
fully apprised of the entitlement to rest, independently to
choose not to take a day of rest.” Id.
DISCUSSION
As the California Supreme Court’s opinion makes clear,
the district court answered the first two questions incorrectly.
But because the stipulated facts nevertheless demonstrate that
neither Plaintiff worked more than six consecutive days in
any one Nordstrom workweek, each of their individual
claims1 under Labor Code sections 551 and 552 fails, and the
district court reached the correct conclusion, albeit for the
wrong reasons. See Spencer v. Peters, 857 F.3d 789, 797 n.3
(9th Cir. 2017) (“We can affirm on any ground supported by
the record.” (internal quotation marks omitted)).
Notwithstanding this setback, Plaintiffs argue that we must
remand the case to permit a new PAGA representative who
did suffer violations of sections 551 and 552 to “step
forward” and continue litigating this dispute. After the
district court held that Plaintiffs were not aggrieved under its
interpretation of these statutes, Plaintiffs made precisely this
request. After considering the parties’ responses to its Order
to Show Cause why the case should still proceed, the district
court dismissed the action, concluding that “it no longer
contains a viable claim or controversy.” As explained below,
1
Plaintiffs alleged other claims on behalf of a putative class of
similarly situated workers, but the district court granted summary
judgment to Defendant on those claims, and Plaintiffs did not appeal that
order.
10 MENDOZA V. NORDSTROM
we are not persuaded that the district court erred in declining
to permit Plaintiffs to substitute a new representative.2
The PAGA “permits a civil action ‘by an aggrieved
employee on behalf of himself or herself and other current or
former employees’ to recover civil penalties for violations of
other provisions of the Labor Code.” Amalgamated Transit
Union, Local 1756 v. Superior Court, 209 P.3d 937, 942 (Cal.
2009) (quoting Cal. Lab. Code § 2699(a)). An “aggrieved
employee” is “any person who was employed by the alleged
violator and against whom one or more of the alleged
violations was committed.” Id. (quoting Cal. Lab. Code
§ 2699(c)). But an “aggrieved” status is not the only
requirement to bringing a PAGA claim. There are procedural
requirements as well:
Before bringing a civil action for statutory
penalties, an employee must comply with
Labor Code section [2699.3(a)]. That statute
requires the employee to give written notice
of the alleged Labor Code violation to both
the employer and the Labor and Workforce
Development Agency, and the notice must
describe facts and theories supporting the
violation. [Id.] If the agency notifies the
2
The district court and Defendant both framed this dismissal at least
in part as resulting from the lack of an Article III “case or controversy.”
But the district court dismissed this case because Plaintiffs did not prevail
on the merits of their state claims. A loss on the merits is not the same as
a lack of federal subject matter jurisdiction. See Lexmark Int’l, Inc. v.
Static Control Components, Inc., 134 S. Ct. 1377, 1388 n.4 (2014) (“[T]he
absence of a valid . . . cause of action does not implicate subject-matter
jurisdiction . . . .” (quoting Verizon Md. Inc. v. Pub. Serv. Comm’n,
535 U.S. 635, 642–43 (2002)).
MENDOZA V. NORDSTROM 11
employee and the employer that it does not
intend to investigate . . ., or if the agency fails
to respond within 33 days, the employee may
then bring a civil action against the employer.
[Id. § 2699.3(a)(2)(A).] If the agency decides
to investigate, it then has 120 days to do so. If
the agency decides not to issue a citation, or
does not issue a citation within 158 days after
the postmark date of the employee’s notice,
the employee may commence a civil action.
[Id. § 2699.3(a)(2)(B).]
Arias v. Superior Court, 209 P.3d 923, 930 (Cal. 2009); see
also USS-POSCO Indus. v. Case, 197 Cal. Rptr. 3d 791, 812
(Ct. App. 2016) (holding that a plaintiff did not state a PAGA
claim when, among other problems, he “[did] not allege
compliance with or even reference PAGA’s exhaustion
requirements”).3
Under the California Supreme Court’s now-binding
interpretation of these provisions, Plaintiffs were not
“aggrieved employees.” Even if such employees do exist,
under the requirements of Labor Code section 2699.3, they
would have to exhaust their claims administratively before
bringing a PAGA action of their own. Well before trial, the
district court asked Plaintiffs if they wished to include
additional plaintiffs; Plaintiffs declined. Only as the trial was
beginning did Plaintiffs request to present new witnesses who
3
Federal courts enforce PAGA’s exhaustion requirements as well.
See, e.g., Alcantar v. Hobart Serv., 800 F.3d 1047, 1056 (9th Cir. 2015)
(affirming a grant of summary judgment for PAGA defendants when a
plaintiff’s written notice to his employer “did not contain sufficient facts
to comply with the statute’s notice requirements”).
12 MENDOZA V. NORDSTROM
might have been aggrieved. But Plaintiffs apparently did not
propose to add these people as PAGA plaintiffs and, in any
event, Plaintiffs ultimately agreed not to demand the
witnesses.
Even if an additional party could have satisfied PAGA’s
aggrievement and procedural requirements, Plaintiffs have
cited no authority—and we have located none—explaining
why the district court was obligated to permit the addition or
substitution of PAGA representatives. Plaintiffs invoke
authorities holding that district courts may permit substitution
of class representatives in ordinary class action cases, but that
comparison is unavailing for at least two reasons. First, as we
have explained, “a PAGA suit is fundamentally different than
a class action.” Baumann v. Chase Inv. Servs. Corp.,
747 F.3d 1117, 1123 (9th Cir. 2014); see id. at 1122–23
(explaining that principles of finality, preclusion, notice, and
reservation of rights differ between these procedural devices).
Second, a district court’s discretion to permit substitutions or
additions of parties is not a requirement that it do so. The
court was under no such obligation. Cf. Fed. R. Civ. P. 21
(noting that “the court may at any time, on just terms, add or
drop a party”); Rush v. Sport Chalet, Inc., 779 F.3d 973, 974
(9th Cir. 2015) (“We review the district court’s decision to
sever and dismiss the co-defendants under Rule 21 for abuse
of discretion.”).
Over years of litigation, the parties had ample opportunity
to shape their theories of this case. Nothing in the district
court’s order or this court’s opinion prevents a proper
plaintiff from bringing a new action to vindicate his or her
rights in the future. In the circumstances, the district court
did not err by dismissing the case.
MENDOZA V. NORDSTROM 13
AFFIRMED.