Slick v. CableCom, LLC ( 2022 )

1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 7 KASEY SLICK, Case No. 22-cv-03415-JSC 8 Plaintiff, ORDER GRANTING MOTION TO 9 v. DISMISS AND DENYING MOTION FOR SANCTIONS 10 CABLECOM, LLC, Re: Dkt. No. 13 Defendant. 11 12 13 Kasey Slick (“Plaintiff”) brings this putative class action alleging that CableCom LLC 14 (“Defendant”) violated California’s Unfair Competition Law (“UCL”). Cal. Bus. Code § 17200, et 15 seq. (Dkt. No. 2.) Defendant moves to dismiss under Federal Rule of Civil Procedure 12(b)(6) 16 and requests sanctions. (Dkt. No. 13.) After carefully considering the parties’ briefing, and 17 having had the benefit of oral argument on August 4, 2022, the Court concludes that it has subject 18 matter jurisdiction and GRANTS Defendant’s motion to dismiss without leave to amend and 19 DENIES Defendant’s motion for sanctions. The UCL claim fails because Plaintiff has an 20 adequate remedy at law and Defendant has not established that sanctions are warranted under the 21 Court’s inherent authority. 22 COMPLAINT ALLEGATIONS 23 Plaintiff worked for Defendant in California from August 2015 to November 2018. (Dkt. 24 No. 2 ¶ 19).1 During that time, Defendant failed to adequately compensate him and similarly 25 situated employees for their work, including missed meal periods and rest breaks. (Id. ¶ 20.) 26 Defendant also failed to provide accurate wage statements and payroll records. (Id. ¶¶ 43–44.) 27 1 PROCEDURAL HISTORY 2 Plaintiff filed his complaint in the Superior Court of California on April 13, 2022, alleging 3 a violation of the UCL. (Dkt. No. 2 ¶ 50.) The UCL violation is predicated on a number of 4 alleged California Labor Code violations, including the failure to pay overtime (§§ 510, 1198), 5 provide meal periods (§§ 226.7 and 512(a)), provide rest periods (§ 226.7), pay minimum wage 6 (§§ 1194, 1197, 1197.1), pay wages upon termination (§§ 201, 202), pay wages during 7 employment (§ 204), provide compliant wage statements (§ 226(a)), keep accurate payroll records 8 (§ 1174(d)), and reimburse necessary business expenses (§§ 2800, 2802). (Dkt. No. 2 ¶¶ 52–60.) 9 Plaintiff seeks injunctive relief, restitution of unpaid wages for himself and other members of the 10 class, and reasonable attorney’s fees. (Dkt. No. 2-1 at 15.) Plaintiff also seeks class certification 11 and asks the Court to appoint him as the class representative. (Id.) Defendant removed the case to 12 federal court and then moved to dismiss and for sanctions. After oral argument, the parties 13 provided briefing regarding this Court’s subject matter jurisdiction. (Dkt. Nos. 35, 37.)2 14 DISCUSSION 15 In his opposition to Defendant’s motion to dismiss, Plaintiff alluded to the Court lacking 16 subject matter jurisdiction. As the Court cannot decide the motion to dismiss if it lacks subject 17 matter jurisdiction, at oral argument it ordered the parties to submit briefing regarding the 18 jurisdiction question. The Court thus first addresses its subject matter jurisdiction over this 19 dispute. Because federal jurisdiction exists here under the Class Action Fairness Act (“CAFA”), 20 the Court then turns to the merits of Defendant’s motion to dismiss. 21 I. Subject Matter Jurisdiction 22 Defendant removed this case to federal court under CAFA. (Dkt. No. 1.) Under CAFA, a 23 federal court has subject matter jurisdiction of a putative class action if the number of potential 24 class members exceeds 100, the parties are citizens of different states, and the amount in 25 controversy exceeds the aggregate value of $5,000,000. See 28 U.S.C. §§ 1332(d); Ibarra v. 26 Manheim Investments, Inc., 775 F.3d 1193, 1195 (9th Cir. 2015). Defendant’s notice of removal 27 1 establishes that those jurisdictional requirements are met. The size of the putative class is over 2 800. (Dkt. No. 1 ¶ 8.) Plaintiff is a citizen of California and CableCom, LLC is wholly owned by a 3 corporation that is headquartered in Delaware and has its principal place of business in Florida. 4 (Id. ¶ 13.) Lastly, potential damages are estimated to be upwards of $9.6 million. (Id. ¶ 43.) 5 Thus, the Court has jurisdiction under CAFA. 6 A. The Amount-in-Controversy Requirement is Satisfied 7 Plaintiff’s insistence that Defendant has not adequately met CAFA’s amount-in- 8 controversy requirement is unpersuasive. When a plaintiff contests the defendant’s allegation 9 regarding amount in controversy under CAFA, both sides submit proof and the court decides, by a 10 preponderance of the evidence, whether the amount-in-controversy requirement has been satisfied. 11 Dart Cherokee Basin Operating Co., LLC v. Owens, 574 U.S. 81, 88 (2014). The parties may 12 submit evidence outside the complaint, including affidavits or declarations, or other “summary- 13 judgment-type evidence relevant to the amount in controversy at the time of removal.” Singer v. 14 State Farm Mut. Auto. Ins. Co., 116 F.3d 373, 377 (9th Cir. 1997) (cleaned up). Here, Plaintiff 15 does not provide any argument regarding Defendant’s calculated amount. Rather, Plaintiff argues 16 that Defendant’s calculation is based on inadmissible evidence. Plaintiff is incorrect. 17 Defendant provides an expert witness calculation as to the amount in controversy. (Dkt. 18 No. 3.) See also Fed. R. Evid. 702. An expert “may base an opinion on facts or data in the case 19 that the expert has been made aware of.” Fed. R. Evid. 703. If experts in that field would 20 reasonably rely on those kinds of facts or data in forming an opinion, that opinion can be admitted 21 even if the underlying data is not admissible. Id. Defendant provides a series of affidavits to 22 explain the data and assumptions underlying the expert witness calculation. (Dkt. Nos. 3, 4, 38, 23 39.) Here, Defendant’s human resources manager provided the company’s payroll, timekeeping, 24 and termination data to Defendant’s counsel. (Dkt. No. 4 ¶ 4.) Defendant’s counsel hired an 25 economist to analyze that data. (Dkt. No. 3 ¶ 4.) Based on a set of assumptions, Defendant’s 26 economist estimated an amount in controversy of at least $7.7 million. (Id. ¶ 10.) That opinion 27 testimony is admissible. 1 spreadsheets underlying the expert opinion is incorrect. The burden to establish the amount in 2 controversy by a preponderance of the evidence does not require the defendant to “research, state, 3 and prove the plaintiff’s claims for damages.” De Vega v. Baxter Healthcare Corp., 507 F. Supp. 4 3d 1214, 1217 (N.D. Cal. 2019). Rather, the Court can rely on “affidavits” or “declarations” to 5 establish the amount in controversy. See Ibarra, 775 F.3d at 1197. 6 As discussed above, Defendant submitted affidavits that show this dispute meets amount- 7 in-controversy requirement under CAFA. Those affidavits are persuasive and break down the 8 various amounts in controversy with detail. (See Dkt. No. 3.) Plaintiff provides no persuasive 9 argument to the contrary. See Dart Cherokee, 574 U.S. at 88 (holding that “both sides submit 10 proof, and the court decides, by a preponderance of the evidence, whether the amount-in- 11 controversy requirement has been satisfied”). Thus, Defendant has shown, by a preponderance of 12 the evidence, that the amount-in-controversy requirement is met. 13 B. The Local Controversy Exception Does not Apply 14 Plaintiff’s reliance on CAFA’s local controversy exception is likewise misplaced. Under 15 that exception: 16 [A] district court is required to decline jurisdiction over a class action when: (1) more than two-thirds of the proposed plaintiff class(es) are 17 citizens of the state in which the action was originally filed, (2) there is at least one in-state defendant against whom “significant relief” is 18 sought and “whose alleged conduct forms a significant basis for the claims asserted” by the proposed class, (3) the “principal injuries” 19 resulting from the alleged conduct of each defendant were incurred in the state of filing, and (4) no other class action “asserting the same or 20 similar factual allegations against any of the defendants” has been filed within three years prior to the present action. 21 22 Kendrick v. Conduent State and Loc. Sols., Inc., 910 F.3d 1255, 1260 (9th Cir. 2018) (citing 28 23 U.S.C. § 1332(d)(4)). The second factor does not apply here. Defendant is an LLC. An LLC is a 24 citizen of every state of which its owner/members are citizens. Johnson v. Columbia Properties 25 Anchorage, LP, 437 F.3d 894, 899 (9th Cir. 2006). Defendant’s lone member is a citizen of 26 Delaware and Florida. (Dkt. No. 1 ¶ 13.) Thus, because there is no “in-state defendant” here, the 27 local controversy exception does not apply. 1 *** 2 The Court has subject matter jurisdiction over this dispute under CAFA. Plaintiff’s request 3 for remand is denied. 4 II. Motion to Dismiss 5 Defendant moves to dismiss on three grounds: (1) Plaintiff fails to state a claim under the 6 UCL because he cannot show he lacks an adequate remedy at law, (2) Plaintiff’s complaint is 7 insufficiently pled, and (3) a prior settlement precludes Plaintiff from bringing these claims. The 8 first argument disposes of Plaintiff’s complaint. 9 “[T]he UCL provides only for equitable remedies.” Sonner v. Premier Nutrition Corp., 10 971 F.3d 834, 839 n.2 (9th Cir. 2020) (cleaned up). To recover equitable remedies under the UCL 11 in federal court, Plaintiff must demonstrate that he lacks an adequate remedy at law. Id. at 844. 12 Plaintiff’s UCL claim is predicated on California Labor Code claims. These Labor Code claims 13 provide Plaintiff with a remedy at law. See Kim v. Reins Int’l California, Inc., 9 Cal. 5th 73, 80 14 (2020) (“California’s Labor Code contains a number of provisions designed to protect the health, 15 safety, and compensation of workers. Employers who violate these statutes may be sued by 16 employees for damages[.]”) Accordingly, the UCL claim fails. See Sonner, 971 F.3d at 844 17 (affirming dismissal of UCL claim because plaintiff failed to establish absence of legal remedy.) 18 Plaintiff nonetheless argues that because any claims he made directly under the Labor 19 Code would be barred by the statute of limitations he lacks an adequate remedy at law. Plaintiff is 20 incorrect. “Failure to comply with a remedy at law does not make it inadequate so as to require 21 the district court to exercise its equitable jurisdiction.” United States v. Elias, 921 F.2d 870, 874 22 (9th Cir. 1990) (denying equitable relief where the plaintiff failed to timely follow the procedures 23 to obtain a legal remedy in connection with his claim for a return of seized property); see 24 also Franckowiak v. Scenario Cockram United States, Inc., 2020 WL 9071697, at *3 (C.D. Cal. 25 Nov. 30, 2020) (finding the “failure to file a proper claim within the statute of limitations does not 26 make the remedy at law inadequate; it simply means Plaintiffs missed their opportunity to seek 27 legal redress under those statutes”). In Sonner, for example, the plaintiff was barred from bringing 1 Ninth Circuit nonetheless held that the plaintiff could not bring a UCL claim as he had an 2 adequate remedy at law. See Sonner, 971 F.3d at 844. The same result is required here. 3 In sum, Plaintiff has not pled the absence of an adequate remedy at law; instead, he pleads 4 only a failure to comply with that adequate remedy at law. As a result, Plaintiff’s UCL claim must 5 be dismissed. Id. 6 III. Leave to Amend 7 Where a motion to dismiss is granted, a trial court must decide whether to grant leave to 8 amend. Generally, the Ninth Circuit has a liberal policy favoring amendments and, thus, leave to 9 amend should be freely granted. See, e.g., DeSoto v. Yellow Freight System, Inc., 957 F.2d 655, 10 658 (9th Cir. 1992). However, a court does not need to grant leave to amend in cases where 11 permitting a plaintiff to amend would be an exercise in futility. Rutman Wine Co. v. E. & J. Gallo 12 Winery, 829 F.2d 729, 738 (9th Cir. 1987). Because Plaintiff’s UCL claim fails as a matter of law, 13 and Plaintiff concedes that his legal Labor Code claims are barred by the statute of limitations, 14 granting leave to amend the complaint would be futile. Thus, the Court dismisses the UCL claim 15 without leave to amend. 16 III. Other Grounds for the Motion to Dismiss 17 Because Plaintiff’s UCL claim fails under Sonner, and leave to amend would be futile, the 18 Court need not and does not address Defendant’s other grounds for its motion to dismiss. 19 IV. Defendant’s Request for Sanctions 20 Defendant requests sanctions pursuant to the Court’s “inherent power” based on Plaintiff’s 21 continued prosecution of this case notwithstanding his participation in the Carr settlement. The 22 Court did not conclude that the Carr settlement bars Plaintiff’s claim and, indeed, in light of the 23 record before the Court, such affirmative defense cannot be resolved on a 12(b)(6) motion. The 24 request for sanctions is thus denied. 25 CONCLUSION 26 Plaintiff’s request to file the reply is GRANTED. (Dkt. No. 43.) That reply is deemed 27 filed. Plaintiff’s request to remand this matter is DENIED. (Dkt. No. 34.) Defendant’s motion to 1 sanctions is DENIED. (Dkt. No. 13.) The case management conference scheduled for September 2 16, 2022 is VACATED. 3 IT IS SO ORDERED. 4 This Order disposes of Dkt. No. 13, 43. 5 Dated: September 12, 2022 6 ne ACQUELINE SCOTT CORLE 7 United States District Judge 8 9 10 11 12 13 © 15 16 it 4 18 19 20 21 22 23 24 25 26 27 28