Europa Auto Imports, Inc. v. International Association of Machinists and Aerospace Workers Local Lodge No. 1448 ( 2024 )

1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 SOUTHERN DISTRICT OF CALIFORNIA 10 11 EUROPA AUTO IMPORTS, INC. d/b/a Case No.: 22cv1987-GPC(BGS) MERCEDES-BENZ OF SAN DIEGO, 12 ORDER: Plaintiff, 13 (1) DENYING DEFENDANT’S v. MOTION TO DISMISS SECOND 14 AMENDED COMPLAINT FOR INTERNATIONAL ASSOCIATION OF 15 LACK OF SUBJECT MATTER MACHINISTS AND AEROSAPCE JURISDICTION; 16 WORKERS LOCAL LODGE NO. 1484, MACHINISTS AUTOMOTIVE 17 (2) GRANTING IN PART AND TRADES DISTRICT LODGE 190 and DENYING IN PART DEFENDANT’S 18 DOES 1 through 50, inclusive, MOTION TO DISMISS SECOND 19 Defendants. AMENDED COMPLAINT FOR FAILURE TO STATE A CLAIM; 20 AND 21 (3) DENYING DEFENDANT’S ANTI- 22 SLAPP MOTION TO STRIKE 23 STATE LAW CLAIMS 24 [Dkt. Nos. 28, 29.] 25 26 Before the Court is Defendant’s motion to dismiss the second amended complaint 27 pursuant to Federal Rule of Civil Procedure (“Rule”) 12(b)(1) and 12(b)(6) as well as 28 Defendant’s anti-SLAPP motion to strike the state law claims. (Dkt. Nos. 28, 29.) 1 Plaintiff filed responses on December 22, 2023. (Dkt. Nos. 31, 32.) Replies were filed 2 by Defendant on January 5, 2024. (Dkt. Nos. 33, 34.) The Court finds that the matter is 3 appropriate for decision without oral argument pursuant to Local Civ. R. 7.1(d)(1). 4 Based on the reasoning below, the Court DENIES Defendant’s motion to dismiss for lack 5 of subject matter jurisdiction and GRANTS in part and DENIES in part Defendant’s 6 motion to dismiss for failure to state a claim.1 The Court also DENIES Defendant’s anti- 7 SLAPP motion to strike the state law claims. 8 Background 9 On December 15, 2022, Plaintiff Europa Auto Imports, Inc. d/b/a Mercedes-Benz 10 of San Diego (“Plaintiff” or “Europa”) filed a complaint against Defendant International 11 Association of Machinists and Aerospace Workers Local Lodge No. 1484, Machinists 12 Automotive Trades District Lodge 190 (“Defendant” or “Union”) for breach of the 13 collective bargaining agreement and related claims. (Dkt. No. 1, Compl.) On July 20, 14 2023, the Court granted in part and denied in part Defendant’s motion to dismiss the 15 complaint pursuant to Rule 12(b)(1) for lack of subject matter jurisdiction and granted 16 Defendant’s motion to dismiss pursuant to Rule 12(b)(6) for failure to state a claim with 17 leave to amend. (Dkt. No. 12.) On August 3, 2023, Plaintiff filed a first amended 18 complaint. (Dkt. No. 13.) On November 2, 2023, the Court denied Defendant’s motion 19 to dismiss the first amended complaint under Rule 12(b)(1) for lack of subject matter 20 jurisdiction and granted Defendant’s motion to dismiss under Rule 12(b)(6) for failing to 21 state a claim with leave to amend. (Dkt. No. 26.) 22 On November 16, 2023, Plaintiff filed a second amended complaint (“SAC”) 23 alleging 1) breach of the collective bargaining agreement pursuant to Section 301 of the 24 25 26 1 Defendant filed a request for judicial notice of the December 29, 2022 and January 9, 2023 notices from the National Labor Relations Board (“NLRB”) Office of Appeals concerning Europa’s appeal of 27 Regions 21’s dismissal of its unfair labor practice charge, case number 21-CA-298378. (Dkt. No. 28-2; Dkt. No. 28-3, Fujimoto Decl.) Because the Court did not rely on these documents in its ruling, the 28 1 Labor Management Relations Act (“LMRA”), 29 U.S.C. § 185; 2) unfair labor practice 2 causing injury to business or property pursuant to Section 303 of the LMRA, 29 U.S.C. § 3 187; 3) tortious interference with prospective economic advantage and contractual 4 business relations; 4) trespass to chattel; 5) trespass to real property; 6) defamation; and 5 7) unfair competition under California Business & Professions Code section 17200 et 6 seq. (Dkt. No. 27, SAC.) 7 According to the SAC, Europa and the Union entered into a written collective 8 bargaining agreement (“CBA”) effective May 1, 2019 until April 30, 2022. (Id. ¶ 13.) 9 Prior to April 30, 2022 and continuing through July 2022, both parties held bargaining 10 sessions to amend the CBA to agree on terms for a new contract. (Id. ¶ 37.) The no 11 strike provision of section 32 of the CBA prohibits the Union from engaging in any 12 “strike, picketing, sympathy strike, work stoppage, slowdown of work or walk out” 13 during the term of the CBA. (Id. ¶ 36.) Plaintiff alleges that the Union breached the 14 CBA when, beginning in April 2022, “the Union planned, organized, caused and directed 15 an illegal work slowdown and work stoppages and/or false sickouts among the bargaining 16 unit employees . . . .” (Id. ¶ 38.) 17 On May 31, 2022, Plaintiff claims it submitted a timely grievance with the Union 18 and/or made a demand for arbitration but Defendant has failed to comply even though the 19 breach occurred prior to the expiration of the CBA. (Id. ¶ 39.) Europa further alleges 20 that the work slowdown was done for economic purposes and not for any unfair labor 21 practice. (Id. ¶ 41.) Due to the Union’s breach of the CBA, Europa, engaged in retail 22 sales and service of high-end consumer and commercial vehicles, has been prevented 23 from timely sales and service of vehicles and has incurred and will incur substantial costs 24 and expenses due to the illegal work slowdown and stoppage. (Id. ¶ 42.) As a result of 25 the Union’s conduct, Plaintiff has secured permanent, temporary, stopgap and conditional 26 labor to maintain its operations during the strike resulting in additional damages. (Id. ¶ 27 44.) 28 1 Plaintiff also alleges that during picketing, an agent of the Union was holding a 2 picket sign and repeatedly hit a customer’s car striking the hood and windshield driven by 3 an employee that was entering the employer’s property causing significant damage to the 4 customer’s hood and windshield. (Id. ¶¶ 11, 63.) Agents of the Union also blocked 5 egress and ingress of Europa’s property using intimidation, harassment, and violence, 6 including assault and battery, to interrupt Plaintiff’s business operations. (Id. ¶¶ 11, 66.) 7 Further, Pedro Gomez, an agent of defendant, knowingly published false facts that 8 Europa did not have any qualified technicians performing services and repairs during the 9 strike and that an unqualified technician blew up an engine on a customer’s car. (Id. ¶ 10 69.) 11 Discussion 12 A. Legal Standard on Federal Rule of Civil Procedure 12(b)(1) 13 Federal Rule of Civil Procedure (“Rule”) 12(b)(1) provides for dismissal of a 14 complaint for lack of subject-matter jurisdiction. Fed. R. Civ. P. 12(b)(1). Rule 12(b)(1) 15 jurisdictional attacks can be either facial or factual. White v. Lee, 227 F.3d 1214, 1242 16 (9th Cir. 2000). Defendant raises a factual and facial challenge to subject matter 17 jurisdiction. (Dkt. No. 28.) 18 “In a facial attack, the challenger asserts that the allegations contained in a 19 complaint are insufficient on their face to invoke federal jurisdiction.” Safe Air for 20 Everyone v. Meyer, 373 F.3d 1035, 1039 (9th Cir. 2004). In such an attack, the factual 21 allegations in the complaint are accepted as true and all reasonable inferences are viewed 22 in the plaintiff’s favor. Leite v. Crane Co., 749 F.3d 1117, 1121 (9th Cir. 2014). 23 “By contrast, in a factual attack, the challenger disputes the truth of the allegations 24 that, by themselves, would otherwise invoke federal jurisdiction.” Safe Air for Everyone, 25 373 F.3d at 1039. In a factual attack, the challenger provides evidence that an alleged 26 fact in the complaint is false, thereby resulting in a lack of subject matter jurisdiction. Id. 27 Under a factual attack, the allegations in the complaint are not presumed to be true, 28 White, 227 F.3d at 1242, and “the district court is not restricted to the face of the 1 pleadings, but may review any evidence, such as affidavits and testimony, to resolve 2 factual disputes concerning the existence of jurisdiction.” McCarthy v. United States, 3 850 F.2d 558, 560 (9th Cir. 1988). While the district court may resolve factual disputes 4 regarding jurisdiction, “[j]urisdictional finding of genuinely disputed facts is 5 inappropriate when ‘the jurisdictional issue and substantive issues are so intertwined that 6 the question of jurisdiction is dependent on the resolution of factual issues going to the 7 merits' of an action.” Safe Air for Everyone, 373 F.3d at 1039 (quoting Sun Valley 8 Gasoline, Inc. v. Ernst Enters, Inc., 711 F.2d 138, 139 (9th Cir. 1983) (quoting Augustine 9 v. United States, 704 F.2d 1074, 1077 (9th Cir.1983)). “The question of jurisdiction and 10 the merits of an action are intertwined where ‘a statute provides the basis for both the 11 subject matter jurisdiction of the federal court and the plaintiff's substantive claim for 12 relief.’” Id. 13 “Once the moving party has converted the motion to dismiss into a factual motion 14 by presenting affidavits or other evidence properly brought before the court, the party 15 opposing the motion must furnish affidavits or other evidence necessary to satisfy its 16 burden of establishing subject matter jurisdiction.” Savage v. Glendale Union H.S., Dist. 17 No. 205, Maricopa Cnty., 343 F.3d 1036, 1039 n. 2 (9th Cir. 2003). Ultimately, Plaintiff 18 has the burden to demonstrate that subject matter jurisdiction exists. Kokkonen v. 19 Guardian Life Ins. Co. of Am., 511 U.S. 375, 377 (1994). 20 B. Legal Standard on Federal Rule of Civil Procedure 12(b)(6) 21 Federal Rule of Civil Procedure 12(b)(6) permits dismissal for “failure to state a 22 claim upon which relief can be granted.” Fed. R. Civ. P. 12(b)(6). Dismissal under Rule 23 12(b)(6) is appropriate where the complaint lacks a cognizable legal theory or sufficient 24 facts to support a cognizable legal theory. See Balistreri v. Pacifica Police Dep’t., 901 25 F.2d 696, 699 (9th Cir. 1990). Under Federal Rule of Civil Procedure 8(a)(2), the 26 plaintiff is required only to set forth a “short and plain statement of the claim showing 27 that the pleader is entitled to relief,” and “give the defendant fair notice of what the . . . 28 1 claim is and the grounds upon which it rests.” Bell Atlantic Corp. v. Twombly, 550 U.S. 2 544, 555 (2007). 3 A complaint may survive a motion to dismiss only if, taking all well-pleaded 4 factual allegations as true, it contains enough facts to “state a claim to relief that is 5 plausible on its face.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Twombly, 6 550 U.S. at 570). “A claim has facial plausibility when the plaintiff pleads factual 7 content that allows the court to draw the reasonable inference that the defendant is liable 8 for the misconduct alleged.” Id. “Threadbare recitals of the elements of a cause of 9 action, supported by mere conclusory statements, do not suffice.” Id. “In sum, for a 10 complaint to survive a motion to dismiss, the non-conclusory factual content, and 11 reasonable inferences from that content, must be plausibly suggestive of a claim entitling 12 the plaintiff to relief.” Moss v. United States Secret Serv., 572 F.3d 962, 969 (9th Cir. 13 2009) (quotations omitted). In reviewing a Rule 12(b)(6) motion, the Court accepts as 14 true all facts alleged in the complaint, and draws all reasonable inferences in favor of the 15 plaintiff. al-Kidd v. Ashcroft, 580 F.3d 949, 956 (9th Cir. 2009). 16 Where a motion to dismiss is granted, “leave to amend should be granted ‘unless 17 the court determines that the allegation of other facts consistent with the challenged 18 pleading could not possibly cure the deficiency.’” DeSoto v. Yellow Freight Sys., Inc., 19 957 F.2d 655, 658 (9th Cir. 1992) (quoting Schreiber Distrib. Co. v. Serv-Well Furniture 20 Co., 806 F.2d 1393, 1401 (9th Cir. 1986)). In other words, where leave to amend would 21 be futile, the Court may deny leave to amend. See DeSoto, 957 F.2d at 658; Schreiber, 22 806 F.2d at 1401. 23 C. First Cause of Action –Section 301(a) of the LMRA 24 1. Rule 12(b)(1) – Subject Matter Jurisdiction 25 The SAC asserts federal subject matter jurisdiction relying on Section 301 of the 26 LMRA alleging breach of the no-strike provision of the CBA when the Union directed a 27 work slowdown, work stoppage and/or false sickouts in mid-April 2022, prior to the 28 expiration of the CBA. (Dkt. No. 27, SAC ¶¶ 2, 36, 38.) 1 Section 301(a) of the LMRA confers the Court with subject matter jurisdiction 2 over “[s]uits for violation of contracts.” Textron Lycoming Reciprocating Engine Div., 3 Avco Corp. v. United Auto., Aerospace, Agric. Implement Workers of Am., Int’l. Union, 4 523 U.S. 653, 656 (1998). “Section 301(a) is a basis for jurisdiction when the suit is 5 based on a colorable claim of breach of contract between an employer and a labor 6 organization in an industry affecting commerce and the resolution of the lawsuit is 7 focused upon and governed by the terms of the contract.” Painting & Decorating 8 Contractors Ass'n of Sacramento, Inc. v. Painters & Decorators Joint Comm. of E. Bay 9 Cntys., Inc., 707 F.2d 1067, 1071 (9th Cir. 1983). 10 However, “[a]n expired CBA itself is no longer a ‘legally enforceable document.’” 11 Off. & Pro. Employees Ins. Trust Fund v. Laborers Funds Admin. Off. of N. Cal., Inc., 12 783 F.2d 919, 922 (9th Cir. 1986) (quoting Cement Masons Health and Welfare Trust 13 Fund For N, Cal. v. Kirkwood-Bly, Inc., 520 F. Supp. 942, 944-45 (N.D. Cal. 1981), 14 aff'd, 692 F.2d 641, (9th Cir. 1982)); Lumber Prod. Indus. Workers Loc. No. 1054 v. W. 15 Coast Indus. Relations Ass'n, Inc., 775 F.2d 1042, 10476 (9th Cir. 1985) (“It logically 16 follows that an expired [collective bargaining] agreement cannot serve as the basis for a 17 proper exercise of jurisdiction under section 301(a)”); Cement Masons Health and 18 Welfare Trust Fund v. Kirkwood–Bly, Inc., 520 F. Supp. 942, 946 (N.D. Cal. 1981) 19 (“Plaintiffs cite no case, nor can we find any, which ha[s] permitted district courts to 20 enforce properly expired collective bargaining agreements in a section 301 action”), aff'd, 21 692 F.2d 641 (9th Cir. 1982). As a general rule, where the bargaining contract at issue 22 has expired, the parties are “released . . . from their respective contractual obligations” 23 24 25 26 2 “Suits for violation of contracts between an employer and a labor organization representing employees in an industry affecting commerce as defined in this chapter, or between any such labor organizations, 27 may be brought in any district court of the United States having jurisdiction of the parties, without respect to the amount in controversy or without regard to the citizenship of the parties.” 29 U.S.C. § 28 1 and any dispute between them cannot be said to arise under the contract. Litton Fin. 2 Printing Div. v. N.L.R.B., 501 U.S. 190, 206 (1991). 3 Here, the parties entered into a CBA effective May 1, 2019 through April 30, 2022. 4 (Dkt. No. 27, SAC ¶ 13; Dkt. No. 4-2, Kucera Decl., Ex. A, CBA § 33.01.) Section 32 of 5 the CBA provided that “[d]uring the term of this Agreement, the union agrees that it will 6 not authorize, cause, induce, support or condone any strike, picketing, sympathy strike, 7 work stoppage, slowdown of work or walk out by any employee covered by this 8 Agreement . . . .” (Id. § 32.01.) 9 Despite the Court’s prior two orders denying the Union’s subject matter 10 jurisdiction challenge, it raises the argument a third time relying on NLRB documents it 11 had filed in its first motion to dismiss.3 12 The Court previously held that the claim alleging breach of the CBA based on the 13 work slowdown alleged in April 2022, prior to the expiration of the CBA, survived and 14 denied dismissal of the Section 301 on the factual challenge4 to subject matter 15 jurisdiction. (Dkt. No. 12 at 11.) But the Court granted dismissal of any challenged 16 conduct that occurred after April 30, 2022, when the CBA had expired, for lack of subject 17 matter jurisdiction. (Id. at 9.) In a subsequent order, the Court again denied dismissal of 18 the Section 301 claim based on subject matter jurisdiction relying on the Court’s prior 19 ruling and rejecting the Union’s attempt to raise disputed facts as to when the slowdown 20 began by presenting additional evidence. (Dkt. No. 26 at 7-8.) The Court specifically 21 noted that to the extent the Union’s evidence raised a disputed issue of fact on 22 jurisdiction, it could not resolve it at the motion to dismiss stage. (Id. at 8 n. 5.) 23 This time, the Union admittedly5 raises another disputed issue of fact relying on the 24 NLRB’s rulings summarizing Europa’s claims that a slowdown began in May 2022 after 25 26 3 It is not clear why this argument was not raised in its initial motion to dismiss. 27 4 In its order, the Court relied on the allegations in the complaint and the declarations of two Union employees and the General Manager of Europa. (Dkt. No. 12 at 11.) 28 1 the expiration of the CBA, which is in conflict with the allegations in the SAC. (See Dkt. 2 No. 34 at 3-4.) To the extent that the Court is able to consider the NLRB’s rulings as 3 evidence, which Europa challenges, this evidence merely presents further disputed issues 4 of fact as to subject matter jurisdiction. Because Section 301 provides the basis for the 5 Court’s jurisdiction as well as the substantive claim on the merits, it may not resolve the 6 issue at the motion to dismiss stage. See Safe Air for Everyone, 373 F.3d at 1039 7 (“[j]urisdictional finding of genuinely disputed facts is inappropriate when ‘the 8 jurisdictional issue and substantive issues are so intertwined that the question of 9 jurisdiction is dependent on the resolution of factual issues going to the merits’ of an 10 action.”). 11 Accordingly, for the same reasons articulated in its prior two orders, the Court 12 DENIES Defendant’s motion to dismiss the Section 301 claim for lack of subject matter 13 jurisdiction. 14 2. Rule 12(b)(6) - Failure to Exhaust Contractual Grievances 15 The Union also maintains that the first cause of action for breach of the CBA fails 16 for insufficiently alleging exhaustion of contractual grievance procedures in the CBA. 17 (Dkt. No. 28-1 at 15-16.) Plaintiff responds it exhausted the grievance procedures but the 18 Union refused to comply. (Dkt. No. 31 at 5-6.) 19 a. Legal Framework 20 The Ninth Circuit has recognized that failure to exhaust is an affirmative defense 21 that must be properly pled and proven at the summary judgment stage. Albino v. Baca, 22 747 F.3d 1162, 1166 (9th Cir. 2014). However, if a failure to exhaust is “clear on the 23 face of the complaint”, a defendant may move to dismiss under Rule 12(b)(6).6 Id. 24 25 6 As the court noted in its prior order, although Albino addressed a Prison Litigation Reform Act 26 (“PLRA”) case, the court made clear that these procedures are appropriate in all contexts where exhaustion applies and explicitly included LMRA claims. Id. at 1171 (overruling Inlandboatmens 27 Union of the Pac. v. Dutra Grp., 279 F.3d 1075, 1078 n. 2 (9th Cir. 2002) (exhaustion of non judicial remedies under the Labor Management Relations Act (“LMRA”) and Ritza v. Int'l Longshoremen's & 28 1 Further, the burden to prove exhaustion falls on the defendant. Id. (“Failure to exhaust . . 2 . is an affirmative defense the defendant must plead and prove”) (quoting Jones v. Bock, 3 549 U.S. 199, 204 (2007)) (internal citations omitted)). However, the burden of 4 demonstrating that exhaustion would be futile falls on the plaintiff. Id. at 1172 (“the 5 burden shifts to the plaintiff to rebut by showing that the local remedies were ineffective, 6 unobtainable, unduly prolonged, inadequate, or obviously futile”) (quoting Hilao v. 7 Estate of Marcos, 103 F.3d 767, 778 n.5 (9th Cir. 1996)). 8 Because the Union raises a Rule 12(b)(6) challenge to Europa’s failure to exhaust, 9 the Court looks at whether the failure to exhaust is apparent on the face of the FAC. See 10 Albino, 747 F.3d at 1166. 11 b. Extrinsic Evidence on Rule 12(b)(6) 12 To support its failure to exhaust defense, the Union relies on email 13 communications between Kevin Kucera (“Mr. Kucera”), the Business Representative of 14 Defendant, and Roman Zhuk (“Mr. Zhuk”), Senior Vice President of Human Resources 15 and Legal Counsel for Plaintiff, dated May 24, 2022 through June 7, 2022, (Dkt. No. 18- 16 5, Kucera Decl., Ex. A), and emails between Jesse Juarez (“Mr. Juarez”), Area Director 17 of Organizing, and Mr. Zhuk from June 13, 2022 through June 24, 2022, (Dkt. No. 18-4, 18 Juarez Decl., Ex. A, Dkt. No. 18-5, Kucera Decl., Ex. B). 19 The Court previously considered the emails dated May 24, 2022 through June 7, 20 2022 between Mr. Kucera and Mr. Zhuk under the incorporation by reference doctrine 21 articulated in Khoja v. Orexigen Therapeutics, Inc., 899 F.3d 988, 1002 (9th Cir. 2018). 22 (Dkt. No. 26 at 12.) Because the SAC also specifically relies on and quotes from the 23 emails between Mr. Juarez and Mr. Zhuk from June 13, 2022 through June 24, 2022, 24 (Dkt. No. 27, SAC ¶¶ 18-25), and no party disputes the authenticity of the email 25 exchanges, the Court considers the email exchanges between Mr. Kucera and Mr. Zhuk 26 under the incorporation by reference doctrine without converting the motion to dismiss 27 into a motion for summary judgment. 28 / / / 1 c. Exhaustion of Mandatory Contractual Grievance Procedure 2 “As a general rule in cases to which federal law applies, federal labor policy 3 requires . . . use of the contract grievance procedure agreed upon by employer and union 4 as the mode of redress.” Republic Steel Corp. v. Maddox, 379 U.S. 650, 652 (1965). In 5 passing Section 301, Congress’ intent was to encourage mutually agreed upon grievance 6 procedures between the parties in a collective bargaining agreement to “promote a higher 7 degree of responsibility upon the parties to such agreements . . . thereby promot[ing] 8 industrial peace.” Drake Bakeries, Inc. v. Local 50, Am. Bakery & Confectionery 9 Workers Int'l, AFL–CIO, 370 U.S. 254, 263 (1962) (quoting S. Rep. No. 105, 80th Cong., 10 1st Sess. 17). 11 Section 301 of the LMRA requires “the specific performance of promises to 12 arbitrate grievances in collective bargaining agreements.” Columbia Exp. Terminal, LLC 13 v. Int'l Longshore & Warehouse Union, 23 F.4th 836, 842 (9th Cir. 2022) (citing Textile 14 Workers Union v. Lincoln Mills, 353 U.S. 448, 451 (1957)). Permitting the district court 15 to proceed before the grievance process has been exhausted would “eviscerate a central 16 tenet of federal labor-contract law under § 301 that it is the arbitrator, not the court, who 17 has the responsibility to interpret the labor contract in the first instance.” Id. at 845 18 (quoting Allis-Chalmers Corp. v. Lueck, 471 U.S. 202, 220 (1985)). 19 Therefore, mandatory grievance and arbitration procedures contained in a 20 collective bargaining agreement must be exhausted before bringing a lawsuit under 21 Section 301 of the LMRA. See Republic Steel Corp., 379 U.S. at 652; see Carr v. Pac. 22 Mar. Ass'n, 904 F.2d 1313, 1317 (9th Cir. 1990) (“As a general rule, members of a 23 collective bargaining unit must first exhaust contractual grievance procedures before 24 bringing an action for breach of the collective bargaining agreement.”). 25 In the instant case, both parties agree that the allegation of the alleged work 26 slowdown that occurred in April 2022, prior to the expiration of the CBA, must have 27 been exhausted prior to filing the compliant in this Court as Section 7 of the CBA covers 28 1 “any difference[s that] arise concerning the provisions of this Agreement.” (Dkt. No. 4- 2 2, Kucera Decl., Ex. A, CBA § 7 at 10.) 3 Here, the allegations in the SAC and the email communications, incorporated by 4 reference, demonstrate attempts to exhaust administrative remedies, (Dkt. No. 27, SAC 5 ¶¶ 14-27), but only as to conduct after the expiration of the CBA, (id. ¶¶ 19-24).7 None 6 of the allegations as to exhaustion address or reference a work slowdown in April 2022. 7 Instead, they ostensibly show that the parties were disputing whether the Union’s alleged 8 work slowdown was covered by the grievance procedure despite the expiration of the 9 CBA. (See Dkt. No. 27, SAC ¶¶ 20-23; Dkt. No. 18-5, Kucera Decl., Exs. A & B). This 10 is made clear in an email where Plaintiff’s counsel provided legal authority to support his 11 position that the grievance procedure would survive expiration of the CBA. (Dkt. No. 27, 12 SAC ¶ 23.) There is no reference to conduct that preceded the expiration of the CBA. 13 Thus, the Court concludes that the allegations in the SAC and the emails, incorporated by 14 reference, do not allege exhaustion of the grievance procedures concerning alleged work 15 slowdown in April 2022, prior to the expiration of the CBA. Therefore, the Court 16 GRANTS Defendant’s motion to dismiss the Section 301 claim for failure to allege 17 exhaustion of contractual grievance procedures provided in the CBA.8 Because Plaintiff 18 was provided with three opportunities to allege exhaustion, the dismissal is with 19 prejudice. 20 D. Second Cause of Action - Section 303 of the LMRA 21 The Union next argues that Europa fails to allege Section 303 standing because 1) 22 Plaintiff has not shown that the Union’s alleged unlawful conduct, rather than the primary 23 24 25 7 The Court had previously noted that “the complaint fails to allege whether the April 2022 slowdown was subject to the grievance submitted by Plaintiff on May 24 and May 31, 2022 and fails to allege that 26 it complied with the grievance procedure as provided in the CBA.” (Dkt. No. 12 at 13.) Europa has not sufficiently amended its complaint to address the Court’s prior concerns alleging exhaustion of the April 27 2022 slowdown. 8 The Court need not address Defendant’s additional facial challenge to subject matter jurisdiction. 28 1 strike, materially contributed or was a substantial factor in the costs associated with 2 hiring strikebreakers and security guards; and 2) there is no relationship between the 3 injury alleged and the forms of injury that Congress sought to prevent or remedy. (Dkt. 4 No. 28-1 at 13-14.) Plaintiff disagrees arguing costs for security guards hired to protect 5 against violence to person and property due to the secondary boycott, and labor costs are 6 allowable damages in a Section 303 suit. (Dkt. No. 31 at 9.) 7 Section 303 of the LMRA provides: 8 (a) It shall be unlawful . . . for any labor organization to engage in any activity or conduct defined as an unfair labor practice in section 158(b)(4) of 9 this title 10 (b) Whoever shall be injured in his business or property by reason o[f] any violation of subsection (a) may sue therefor in any district court of the 11 United States . . . or in any other court having jurisdiction of the parties. 12 13 29 U.S.C. § 187. Relatedly, section 158(b)(4), or section 8(b)(4) of the National Labor 14 Relations Act (“NLRA”), prohibits a labor organization from engaging in secondary 15 boycotts. 29 U.S.C. § 158(b)(4)(ii)(B).9 Secondary boycott activities are those “which 16 are calculated to involve neutral employers and employees in the union’s dispute with the 17 primary employer.” Iron Workers Dist. Council of the Pac. Nw. v. N.L.R.B., 913 F.2d 18 19 9 Section 158(b)(4) of the NLRA provides, 20 (4)(i) to engage in, or to induce or encourage any individual employed by any person 21 engaged in commerce or in an industry affecting commerce to engage in, a strike or a refusal in the course of his employment to use, manufacture, process, transport, or 22 otherwise handle or work on any goods, articles, materials, or commodities or to perform any services; or (ii) to threaten, coerce, or restrain any person engaged in commerce or in 23 an industry affecting commerce, where in either case an object thereof is— . . . (B) forcing or requiring any person to cease using, selling, handling, transporting, or 24 otherwise dealing in the products of any other producer, processor, or manufacturer, or to 25 cease doing business with any other person, or forcing or requiring any other employer to recognize or bargain with a labor organization as the representative of his employees 26 unless such labor organization has been certified as the representative of such employees under the provisions of section 159 of this title: Provided, That nothing contained in this 27 clause (B) shall be construed to make unlawful, where not otherwise unlawful, any primary strike or primary picketing . . . . 28 1 1470, 1475 (9th Cir. 1990). “Essentially, this secondary boycott prohibition makes it 2 unlawful for a union to bring indirect pressure on a primary employer by involving 3 neutral or secondary employers.” John B. Cruz Constr. Co., Inc. v. United Brotherhood 4 of Carpenters and Joiners of Amer., Local 33, 907 F.2d 1228, 1230 (1st Cir. 1990). 5 Section 303 of the LMRA confers standing to “[w]hoever shall be injured in his 6 business or property by reason o[f]” an unfair labor practice under NLRA § 8(b)(4). See 7 29 U.S.C. § 187(b). “[A] court must determine whether Section 303 standing exists by 8 looking to: (1) the nexus between the injury and the statutory violation; and (2) the 9 relationship between the injury alleged and the forms of injury that Congress sought to 10 prevent or remedy by enacting the statute.” Am. President Lines, Ltd. v. Int'l Longshore 11 & Warehouse Union, 721 F.3d 1147, 1153 (9th Cir. 2013) (citing Fulton v. Plumbers & 12 Steamfitters, 695 F.2d 402, 405 (9th Cir. 1982)). A plaintiff must show not only that the 13 Union violated section 8(b)(4)(A) and it falls within the class of persons afforded a 14 remedy by section 303, but must also show it was “injured in (their) business or property 15 by reason of’ the violation.” Mead v. Retail Clerks Int’l. Ass'n, Local Union No. 839, 16 AFL-CIO, 523 F.2d 1371, 1376 (9th Cir. 1975). This requires a plaintiff to show the 17 defendant’s conduct “materially contributed” to its injury or was a “substantial factor” in 18 bringing it about, “notwithstanding other factors contributed also.” Id. (citations 19 omitted). In Mead, the Ninth Circuit explained that this standard is particularly useful 20 when there may be lawful and unlawful forces bringing about the injury or multiple 21 motivations for a single course of conduct. Id. at 1376. Moreover, an injured party need 22 only establish with “‘reasonable probability the existence of some causal connection 23 between the defendant's wrongful act and some loss of anticipated revenue.” Id. at 1377 24 (citation omitted).10 25 26 27 10 The Court relies on Mead as the legal standard relied upon by courts to standing under Section 303 of the LMRA instead of Fulton’s “necessary and integral” standard raised by the Union. Ultimately, both 28 1 The SAC claims a violation of Section 303 of the LMRA commencing in May 2 2022. (Dkt. No. 27, SAC ¶¶ 46-54.) The Union engaged in this secondary boycott 3 through unlawful means of blocking ingress and egress to Europa’s property, shouting 4 threats, and committing assault and battery. (Id. ¶ 49.) For instance, Interstate Batteries 5 is a neutral employer that delivers automotive batteries to Europa. (Id. ¶ 50.) Agents of 6 the Union physically blocked an Interstate Batteries delivery vehicle from exiting 7 Europa’s property and threatened to climb onto the vehicle and cause damage to it. (Id. ¶ 8 50.) The Union’s object was to force the neutral employers to intercede in the dispute 9 and cease doing business with Europa constituting an unlawful secondary boycott. (Id.) 10 This was accomplished by blocking Interstate Batteries drivers from transporting and 11 handling goods and perform services and inducing them to refuse to work or strike to 12 force Interstate Batteries to intercede in the dispute between Plaintiff and Defendant. 13 (Id.) Plaintiff claims that this conduct occurred repeatedly with many vendors from also 14 entering its facility. (Id. ¶¶ 52, 53.) As a result, Europa alleges it suffered injury and 15 damages in the form of financial loss for the delay in receiving products from outside 16 vendors as the jobs are priced based on the number of “labor hours” assigned to a 17 particular service or repair. (Id. ¶ 51.) According to the SAC, every minute of delay of 18 the Interstate Batteries truck, or each time it was stopped at the entrance, resulted in one 19 minute of lost income. (Id. ¶ 52.) In addition, Plaintiff incurred injury and damage by 20 having to hire guards to patrol the entrance to allow vendors to enter in a timely manner. 21 (Id. ¶ 52.) During June and July 2022, Plaintiff contracted with its usual security vendor 22 to provide an additional 4 to 5 people per day and also engaged an additional security 23 vendor to provide one armed security guard and two unarmed guards to address the 24 security issues caused by the unlawful secondary boycott. (Id. ¶ 53.) The additional 25 security costs were “necessitated by Defendant’s unlawful secondary boycott activity.” 26 (Id.) Further, Plaintiff claims that it incurred fringe benefit expenses associated with each 27 hour of work spent that was caused by the delay. (Id. ¶ 54.) 28 1 In this case, Plaintiff alleges it was necessary to hire additional security guards and 2 incurred labor costs as a result of the Union’s unlawful secondary boycott activity to 3 protect against violence to person and property.11 (Dkt. No. 27, FAC ¶¶ 53.) “Courts 4 generally include private security costs within the scope of allowable damages in a 5 section 303 suit.” Pepsi-Cola Co. v. Rhode Island Carpenters Dist. Council, 962 F. 6 Supp. 266, 282-83 (D.R.I. Apr. 24, 1997) (relying on Mead). Moreover, in Cranshaw 7 Const. of New England, L.P. v. Int’l Ass'n of Bridge, Structural and Ornamental 8 Ironworkers, AFL-CIO, Local No. 7, 891 F. Supp. 666, 672 (D. Mass. May 19, 1995), the 9 district court concluded that the Union’s conduct of blocking entryway and staying on 10 cranes was a secondary boycott and a violation of Section 303 and awarded damages for 11 the hiring of off-duty police officers to patrol the site during the protest and private 12 security to guard the site. Id. at 677, 678. 13 Moreover, the Union’s argument that Europa’s alleged damages are only integral 14 to the primary strike and not the secondary boycott is foreclosed by Mead as the court 15 recognized that damages may result from lawful and unlawful conduct. Drawing all 16 reasonable inferences in favor of Plaintiff, the Court concludes Plaintiff has sufficiently 17 alleged security and labor costs incurred by Europa were due to the Union’s unlawful 18 secondary boycott and the need to protect against violence to person and property based 19 on threats made by Union representatives. The SAC allegations sufficiently support the 20 element that the damages from defendant’s conduct “materially contributed” to its injury 21 or was a “substantial factor” in bringing it about. The Court concludes that Plaintiff has 22 sufficiently alleged it has standing to bring a Section 303 claim against the Union. 23 24 25 11 Defendant argues the Court narrowed the allegations of the Section 303 to Interstate Batteries. (Dkt. No. 28-1 at 13.) The Court disagrees. It merely analyzed the allegations as to Interstate Batteries as an 26 example provided in the first amended complaint to assess whether the Union had stated a Section 303 claim. The SAC alleges facts surrounding the Union’s alleged unlawful conduct of blocking an 27 Interstate Batteries delivery vehicle from leaving Europa’s property as an example. (Dkt. No. 27, SAC ¶ 50.) But the SAC also claims that this allegedly unlawful conduct occurred with many vendors, 28 1 The Union also summarily argues that Europa’s injuries are not of the “form that 2 Congress sought to prevent” which is to protect businesses facing an “existential threat” 3 but without presenting relevant legal authority. Under Mead, Europa is entitled to any 4 damages caused by defendant’s conduct that “materially contributed” to its injury or was 5 a “substantial factor” in bringing it about. At this stage of the proceedings, the Court 6 DENIES Defendant’s motion to dismiss the Section 303 cause of action. 7 Because the Court has subject matter jurisdiction over the SAC based on the 8 Section 303 claim, the Court now addresses Defendant’s challenges to the state law 9 claims.12 10 E. Defendant’s Anti-SLAPP Motion to Strike State Law Claims 11 Defendant has also filed a motion to strike the state law causes of action under 12 California's Strategic Lawsuit Against Public Participation (“anti-SLAPP”) statute. (Dkt. 13 No. 29-1.) Plaintiff filed an opposition. (Dkt. No. 32.) 14 Under California’s anti-SLAPP statute, a defendant can file a special motion to 15 strike a cause of action “arising from any act of that person in furtherance of the person's 16 right of petition or free speech under the United States Constitution or the California 17 Constitution.” Cal. Civ. Proc. Code § 425.16(b)(1). “The purpose of the anti-SLAPP 18 statute is ‘to allow for early dismissal of meritless [F]irst [A]mendment cases aimed at 19 chilling expression through costly, time-consuming litigation.’” Herring Networks, Inc. 20 v. Maddow, 8 F.4th 1148, 1155 (9th Cir. 2021) (quoting Maloney v. T3Media, Inc., 853 21 F.3d 1004, 1009 (9th Cir. 2017)). 22 The Court analyzes an anti-SLAPP motion under a two-step analysis. Sarver v. 23 Chartier, 813 F.3d 891, 901 (9th Cir. 2016). First, the defendant must “make a prima 24 facie showing that the plaintiff's suit arises from an act by the defendant made in 25 26 27 12 In the prior orders, the Court dismissed the state law claims because the Court did not have subject matter jurisdiction and denied Defendant’s anti-SLAPP motion to strike as moot. (See Dkt. No. 12 at 28 1 connection with a public issue in furtherance of the defendant's right to free speech under 2 the United States or California Constitution.” Id. (citation omitted). Second, “if the 3 defendant has made such showing, we evaluate whether the plaintiff has ‘establish[ed] a 4 reasonable probability that the plaintiff will prevail on his or her . . . claim.’” Id. (citation 5 omitted). 6 “The degree to which the anti-SLAPP provisions are consistent with the Federal 7 Rules of Civil Procedure has been hotly disputed.” Planned Parenthood Federation of 8 Am., Inc. v. Ctr. for Med. Progress, 890 F.3d 828, 833 (9th Cir. 2018). To avoid collision 9 between state procedure and federal procedure, see Metabolife Int’l., Inc. v. Wornick, 264 10 F.3d 832, 846 (9th Cir. 2001) (“the discovery-limiting aspects of § 425.16(f) and (g) 11 collide with the discovery-allowing aspects of Rule 56”), courts must “review anti- 12 SLAPP motions to strike under different standards depending on the motion's basis.” 13 Planned Parenthood, 890 F.3d at 833. Motions that challenge the legal sufficiency of the 14 complaint are analyzed under Rules 8 and 12 and motions that challenge the factual 15 sufficiency of the complaint are analyzed under Rule 56. Herring Networks, Inc., 8 F.4th 16 at 1156; see Planned Parenthood, 890 F.3d at 833. In the later scenario, “discovery must 17 be allowed, with opportunities to supplement evidence based on the factual challenges, 18 before any decision is made by the court.” Planned Parenthood, 890 F.3d at 834. 19 The third through seventh causes of action allege state law claims for 1) tortious 20 interference with prospective economic advantage and contractual business relations, 2) 21 trespass to chattel, 3) trespass to real property, 4) defamation, and 5) unfair competition 22 pursuant to California Business & Professions Code section 17200 et seq. (Dkt. No. 27, 23 SAC ¶¶ 55-78.) 24 1. Claims Arising from Protected Activity 25 “The first prong of the anti-SLAPP analysis involves two related inquiries: (1) 26 whether the Complaint alleges activity protected by section 425.16 and (2) whether the 27 cause or causes of action alleged arise from those activities.” Gunn v. Drage, 65 F.4th 28 1109, 1120–21 (9th Cir. 2023) (citations omitted). On this prong, the defendant must 1 make out a prima facie case showing that “activity underlying a plaintiff’s claim is 2 statutorily protected.” Id. at 1121 (quoting Wilson v. Cable News Network, Inc., 7 Cal. 3 5th 871, 888 (2019)). At this stage, the defendant must first “identify what acts each 4 challenged claim rests on,” and then “show how those acts are protected under a 5 statutorily defined category of protected activity.” Id. (quoting Bonni v. St. Joseph 6 Health System, 11 Cal. 5th 995, 1009 (2021)). “When relief is sought based on 7 allegations of both protected and unprotected activity, the unprotected activity is 8 disregarded at this stage. If the court determines that relief is sought based on allegations 9 arising from activity protected by the statute, the second step [of the anti-SLAPP 10 analysis] is reached.” Baral v. Schnitt, 1 Cal. 5th 376, 396 (2016). 11 Here, Defendant challenges all state law claims asserting that the conduct 12 underlying each claim rests on the Union’s “alleged speech and conduct in furtherance of 13 [the] protected activity” of picketing. (Dkt. No. 29-1 at 10-12.) Specifically, it argues 14 that each claim challenges how the Union members were striking and how they conveyed 15 their message. (Id. at 12.) The Union admittedly concedes that the “storming” of the 16 dealership in the non-customer areas and the alleged windshield incident are arguably 17 mixed protected and unprotected conduct as they include allegations of property damage, 18 and trespass onto private property. (Id.) However, because the thrust of the conduct is 19 protected, Defendant claims the first prong has been satisfied. (Id.) In response, Plaintiff 20 does not dispute that picketing is a protected activity and does not address Defendant’s 21 argument that the causes of action arise from those protected activities.13 (See Dkt. No. 22 32.) Therefore, the Court concludes that the Union has met its prima facie burden on the 23 first prong that the SAC alleges picketing activity protected by section 425.16 and that 24 25 13 Europa argues that the Union’s work slowdown, unlawful intimidation and blocking of egress and 26 ingress are not protected under the NLRB as it concerns the Fifth Cause of Action for Trespass to Property. (Dkt. No. 32 at 19-20.) However, the Fifth Cause of Action concerns allegations that 27 Defendant and its agents unlawfully repeatedly entered into non-public areas of Plaintiff’s facility during working time to interrupt business and intimidate workers who were not striking. (Dkt. No. 27, 28 1 the causes of action arise from the protected act of picketing. See Int’l Union of 2 Operating Engineers, Local 39 v. Macy's, Inc., 83 Cal. App. 5th 985, 991 (2022) (“the 3 trial court correctly determined that the complaint arises from protected activity because 4 its allegations concern picketing”). 5 2. Reasonable Probability of Prevailing on the Merit 6 At the second step of the anti-SLAPP inquiry, the burden shifts to the plaintiff to 7 “show a ‘reasonable probability’ of prevailing in its claims for those claims to survive 8 dismissal.” Metabolife Int'l, Inc. v. Wornick, 264 F.3d 832, 840 (9th Cir. 2001). Because 9 the instant motion to strike raises a challenge to the legal sufficiency of the claims in the 10 SAC, (Dkt. No. 33 at 2), the Court will apply the Rule 12(b)(6) standard and consider 11 whether the claims have been properly plead. Planned Parenthood, 890 F.3d at 834; In 12 re Bah, 321 B.R. 41, 45 n.6 (B.A.P. 9th Cir. 2005) (“In other words, the court must read 13 the complaint broadly, take all well-pleaded allegations as true, and dismiss with leave to 14 amend.”); Eliott v. Lions Gate Ent’mt Corp., 639 F. Supp. 3d 1012 1023 (C.D. Nov. 8, 15 2022) (applying Rule 12(b)(6) standard on second prong of anti-SLAPP analysis). 16 a. Union Liability under Norris-LaGuardia Act 17 As an initial matter, the Court considers Defendant’s argument that as to the 18 trespass to chattel, trespass to real property, and defamation claims, Europa has failed to 19 sufficiently allege an agency relationship between the Union and bargaining unit 20 members to support liability against the Union. (Dkt. No. 29-1 at 16-17.) Europa 21 responds that the Union misstates the pleading standard under the Norris-LaGuardia Act 22 which addresses an evidentiary burden, not a pleading burden. (Dkt. No. 32 at 26-27.) 23 The Norris-LaGuardia Act provides, 24 No officer or member of any association or organization, and no association or organization participating or interested in a labor dispute, shall be held 25 responsible or liable in any court of the United States for the unlawful acts 26 of individual officers, members, or agents, except upon clear proof of actual participation in, or actual authorization of, such acts, or of ratification of 27 such acts after actual knowledge thereof. 28 1 29 U.S.C. § 106. Union liability for its members requires “clear proof of actual 2 participation in, or actual authorization . . . of [unlawful acts].” Ramsey v. Mine Workers, 3 401 U.S. 302, 311 (1971) (“In our view, s 6 requires clear and convincing evidence only 4 as to the Union's authorization, participation in, or ratification of the acts allegedly 5 performed on its behalf.”). Section 6 requires that “when illegal acts of any individual are 6 charged against one of the major antagonists in a labor dispute—whether employer or 7 union—the evidence must clearly prove that the individual's acts were authorized or 8 ratified.” Id. at 310. While section 106 requires a higher burden of proof than 9 preponderance of the evidence at trial, United Mine Workers of Am. v. Gibbs, 383 U.S. 10 715, 737 (1966), on a motion to dismiss, the plaintiff need only allege enough facts to 11 “state a claim to relief that is plausible on its face.” See Iqbal, 556 U.S. at 678. 12 On the trespass to chattel cause of action, the SAC claims that Robert Moreno was 13 a duly authorized agent of the Union with actual and apparent authority to act on behalf 14 of the Union and was invited by the Union to participate in unlawful activities against 15 Europa and engaged in such activities with union officials and in their presence. (Dkt. 16 No. 27, SAC ¶ 10.) It further alleges that Moreno, an agent of the Union, repeatedly 17 struck the hood and windshield of a vehicle to intimidate and place fear into a non- 18 bargaining unit employee and other employees. (Id. ¶ 11.) Finally, the SAC complains 19 that Moreno was an agent of the Union in carrying out actions assigned, ratified and 20 condoned by the Union, and includes striking the hood and windshield of a vehicle. (Id.) 21 The Court concludes these allegations that the Union authorized or ratified 22 Moreno’s unlawful conduct are sufficient to plead the trespass to chattel claim against the 23 Union. See BE&K Const. Co. v. Will & Grundy Counties Bldg. Trade Council, AFL- 24 CIO, No., 96 C 1560, 1996 WL 547214, at *5 (N.D. Ill. Sept. 24, 1996) (denying motion 25 to dismiss based on 29 U.S.C. § 106 against union alleging “by and through their 26 agents”). 27 Next, as to the real property claim, the SAC alleges that “Defendant and its agents 28 unlawfully and without permission . . . repeatedly entered into non-public areas of 1 Plaintiff’s facility during working time and in working locations to interrupt business and 2 intimidate workers who were not striking.” (Dkt. No. 27, SAC ¶ 66.) It also asserts that 3 agents of the Union were carrying out actions “assigned, ratified, and condoned by the 4 Union and its Agents” when Defendant instructed bargaining unit members to 5 intentionally trespass upon the employer’s property with the intent to interrupt Plaintiff’s 6 business operations and unlawfully entered into the areas of Plaintiff’s facility to interfere 7 with business operations and use of intimidation. (Id. ¶¶ 11(2), 11(5).) The Court 8 concludes the allegations that the Union ratified or condoned conduct surrounding the 9 trespass to real property claim by agents of the Union are sufficient for a trespass to real 10 property claim against the Union. See BE&K Const. Co., 1996 WL 547214, at *5. 11 Finally, on the defamation claim, the SAC alleges that Pedro Gomez published 12 knowingly false facts that Europa did not have any qualified technicians performing 13 services and repairs during the strike and that he published false statements that the 14 unqualified technicians blew up an engine on a customer’s car. (Dkt. No. 27, SAC ¶ 69.) 15 It claims that Gomez engaged in these acts as an agent of the Union. (Id. ¶ 71.) The 16 SAC additionally complains that Gomez was a duly authorized agent of the Union with 17 actual and apparent authority to act on behalf of the Union pursuant to common law and 18 the NLRA. (Id. ¶ 7.) The allegations that the Union authorized or condoned conduct by 19 agents of the Union supporting the defamation cause of action state a claim against the 20 Union. See BE&K Const. Co., 1996 WL 547214, at *5. 21 The Court now considers whether each state law cause of action plausibly alleges a 22 cause of action to satisfy the second prong of the anti-SLAPP analysis. 23 b. Third Cause of Action - Tortious Interference with Prospective 24 Economic Advantage and Contractual Business Relations 25 The Union summarily argues that the third cause of action for tortious interference 26 with prospective economic advantage and contractual business relations as it concerns the 27 28 1 secondary boycott are preempted by Section 303. (Dkt. No. 29-1 at 13.) Europa 2 disagrees. (Dkt. No. 32 at 17.) 3 In general, state law may not encroach upon the systems of federal laws governing 4 labor relations. See San Diego Bldg. Trades Council v. Garmon, 359 U.S. 236 (1959) 5 (“Garmon”). Over the years, exceptions have developed, including one recognized in 6 Morton concerning Section 303. In that case, the United States Supreme Court held that 7 Section 303 preempts state law based on peaceful union secondary activities. Local 20, 8 Teamsters, Chauffeurs & Helpers Union v. Morton, 377 U.S. 252, 261 (1964) (“state law 9 has been displaced by § 303 in private damage actions based on peaceful union secondary 10 activities.”). However, it held that Section 303 does not preempt state law where there is 11 “violence and imminent threats to the public order.” Id. at 257. The Court explained that 12 states have a compelling interest in maintaining domestic peace which cannot be 13 “overridden in the absence of clearly expressed congressional direction.” Id. (quoting 14 Garmon, 359 U.S. at 247-48); see Retail Prop. Trust v. United Broth. of Carpenters and 15 Joiners of Am., 768 F.3d 938, 956 (9th Cir. 2014) (recognizing “Morton [ ] show[s] that 16 § 303 does not so fully occupy the field such that any claim related to secondary boycotts 17 must be brought under § 303 or not all.”). 18 In San Antonio Comm. Hosp., the case relied on by the Union, the Ninth Circuit 19 summarily concluded that “interference with prospective economic advantage and 20 contractual rights claims are preempted by section 303 of the LMRA.” San Antonio 21 Comm. Hosp. v. S. Cal. Dist. Council of Carpenters, 125 F.3d 1230, 1235 (9th Cir. 1997) 22 (citing Morton, 377 U.S. at 260–61). However, that case did not involve violence but 23 concerned the conduct of hand billing and bannering activity. Id. Further, the case also 24 25 26 14 The third cause of action alleges a number of forms of conduct, including the unlawful secondary 27 boycott, supporting the Section 303 cause of action. (Dkt. No. 27, SAC ¶¶ 55-61.) In its motion to strike, the Union only seeks dismissal of the allegations supporting the Section 303 claim; therefore, the 28 1 involved an injunction under the Norris–LaGuardia Act (“NLA”), which relies on a 2 standard not applicable in this case. 3 Here, the tortious interference with prospective economic advantage and 4 contractual business relations claims are predicated on allegations of violence, threats of 5 violence, intimidation, and assault and battery. (Dkt. No. 27, SAC ¶¶ 57-58.) For 6 example, Europa alleges that the Union unlawfully blocked ingress and egress to its 7 property over multiple days and for hours at a time and instructed its agents to physically 8 assault and commit battery on those trying to enter the premises and physically hitting 9 entering/exiting vehicles to intimidate or coerce those persons. (Id. ¶ 57.) It also alleges 10 that picketers yelled profanities at persons entering the facility and engaged in assault and 11 battery of persons entering and exiting the premises. (Id. ¶ 58(h).) Therefore, at this 12 stage, the SAC has sufficiently alleged the Union engaged in violence, and therefore, the 13 third cause of action concerning the allegations of the secondary boycott is not preempted 14 by Section 303. See Morton, 377 U.S. at 257; Mi–Jack Pros. v. Int’l Union of Operating 15 Engineers, Local 150, No. 94 C 6676, 1995 WL 42066 at *2 (N.D. Ill. Jan. 31, 1995) 16 (denying motion to dismiss concluding tortious interference with contracts claim not 17 preempted based on allegations of violence of union’s picketing activity, which “included 18 obstructing ingress and egress at the railyards, throwing rocks at vehicles, puncturing 19 vehicle tires by spreading nails at the entrance of the railyards and using knives, setting 20 fires, vandalizing tractor trailers, and threatening to cut the throats of certain 21 individuals”); Park Electric Co. v. International Brotherhood of Electrical Workers, 22 Local 701, AFL–CIO, 540 F. Supp. 779, 782 (N.D. Ill. 1982) (tortious interference with 23 contract and other business-related torts are preempted by federal law unless “violent 24 conduct or threat of such conduct is alleged”). Because Plaintiff has stated a claim for 25 tortious interference with prospective economic advantage and contractual business 26 relations, this state law claim survives the anti-SLAPP motion to strike. 27 / / / 28 / / / 1 c. Fourth and Fifth Causes of Action - Trespass to Chattel and 2 Trespass to Real Property 3 Defendant simply argues that the fourth cause of action for trespass to chattel and 4 fifth cause of action for trespass to real property claims are preempted by Garmon 5 because the identical issues have already been presented to the NLRB in an unfair labor 6 practice charge filed by Europa and in a Board issued complaint against Europa. (Dkt. 7 No. 29-1 at 13-15.) In response, Europa argues that the “local interest” exception to 8 Garmon preemption bars relief on Defendant’s motion.15 (Dkt. No. 32 at 14-16.) 9 Garmon preemption provides “[w]hen an activity is arguably subject to § 7 or § 8 10 of the [NLRA], the States as well as the federal courts must defer to the exclusive 11 competence of the National Labor Relations Board.” San Diego Bldg. Trades Council v. 12 Garmon, 359 U.S. 236, 245 (1959). Garmon preemption applies to conduct arguably 13 protected by Section 7 or arguably prohibited by Section 8. See Farmer v. United 14 Brotherhood of Carpenters & Joiners, 430 U.S. 290, 296 (1977); Teamsters, Chauffeurs 15 & Helpers Union v. Morton, 377 U.S. 252, 257–60 (1964). Section 7 of the NLRA 16 protects an employee's “right to self-organization, to form, join, or assist labor 17 organizations, to bargain collectively through representatives of their own choosing, and 18 to engage in other concerted activities for the purpose of collective bargaining or other 19 mutual aid or protection.” 29 U.S.C. § 157. Section 8 of the NLRA provides a list of 20 “unfair labor practice[s]” that employers and unions are prohibited from engaging in. See 21 29 U.S.C. § 158(a). For example, an employer must not “interfere with, restrain, or 22 coerce employees in the exercise of” their section 7 rights, including the right to strike, 23 and a union may not “refuse to bargain collectively with an employer.” Id. 24 25 26 15 In reply, Defendant improperly rely on declarations and evidence to supports its argument that the 27 exception to Garmon does not apply. (Dkt. No. 33 at 5-9.) On a motion to dismiss, the Court may not consider evidence outside the complaint. Therefore, the Union’s arguments relying on evidence outside 28 1 The Court has recognized exceptions to the Garmon preemption doctrine. First, 2 Congress has carved out statutory exceptions to the NLRB’s exclusive jurisdiction 3 Sections 301 and 303 of the LMRA. Vaca v. Sipes, 386 U.S. 171, 179-80 (1967). Next, 4 Supreme Court precedent has held preemption does not apply “where the activity 5 regulated was a merely peripheral concern of the Labor Management Relations Act. * * * 6 (or) touched interests so deeply rooted in local feeling and responsibility that in the 7 absence of compelling congressional direction, we could not infer that Congress has 8 deprived the States of the power to act.” Id. at 180 (citing Garmon 359 U.S. at 243-44; 9 Linn v. United Plant Guard Workers, 383 U.S. 53 (1966) (libel); Int’l Union, United 10 Auto. etc., Workers of Am. v. Russell, 356 U.S. 634 (1958) (violence); Int’l Assn. of 11 Machinists v. Gonzales, 356 U.S. 617 (1958) (wrongful expulsion from union 12 membership); and Allen-Bradley Local No. 1111, United Elec., Radio and Machine 13 Workers of Amer. v. Wisconsin Emp. Relations Bd., 315 U.S. 740 (1942) (mass 14 picketing)); see also Bud Antle, Inc. v. Barbosa, 45 F.3d 1261, 1268 (9th Cir. 1994) 15 (NLRA will not preempt state action which regulates activity of “a merely peripheral 16 concern” to the Act and where the regulated conduct touche[s] interests so deeply rooted 17 in local feeling and responsibility that, in the absence of compelling congressional 18 direction, we could not infer that Congress had deprived the States of the power to act.”). 19 As discussed above, in Garmon, the Court provided an exception to state 20 jurisdiction over conduct “marked by violence and imminent threats to the public order.” 21 Garmon, 359 U.S. at 247. “Policing of actual or threatened violence to persons . . . has 22 been held most clearly a matter for the states.” Lodge 76, Int'l Ass'n of Machinists v. 23 Wisconsin Emp. Relations Comm'n, 427 U.S. 132, 136 (1976); Farmer, 430 U.S. at 299 24 (“Nothing in the federal labor statutes protects or immunizes from state action violence or 25 the threat of violence in a labor dispute . . . and thus, there is no risk that state damages 26 actions will fetter the exercise of rights protected by the NLRA.”); Retail Prop. Trust, 27 768 F.3d at 952. 28 1 Without any meaningful analysis, Defendant argues that the trespass to chattel and 2 trespass to property claims are preempted because Plaintiff presented these same claims 3 before the NLRB. (Dkt. No. 29-1 at 14.) On this issue, the “critical inquiry, therefore, is 4 not whether the State is enforcing a law relating specifically to labor relations or one of 5 general application but whether the controversy presented to the state court is identical to 6 . . . or different from . . . that which could have been, but was not, presented to the Labor 7 Board.” Sears, Roebuck and Co. v. San Diego Cnty Dist. Council of Carpenters, 436 8 U.S. 180, 197 (1978) (Garmon preemption not applicable to trespass to property). “Only 9 if the controversy is identical to a claim that could have been presented to the Board 10 would a state court's exercise of jurisdiction involve ‘a risk of interference with the unfair 11 labor practice jurisdiction of the Board.’” Retail Prop. Trust, 768 F.3d at 953. 12 Here, the Union relies on the NLRB’s decision dismissing Europa’s unfair labor 13 practice charge in Case 21-CB-298401 arguing the charge brought by Europa is identical 14 to the trespass to property claim in the SAC. (Dkt. No. 4-3, Fujimoto Decl., Ex. E at 20- 15 21.16) While the Union argues that Europa cannot deny that the allegations in the 16 NLRB’s decision and the SAC are identical, Europa does not directly respond but instead 17 argues that the nature of the allegations take it outside of conduct under the primary 18 jurisdiction of the NLRB. (See generally Dkt. No. 32 at 14-16; 17-20.) 19 A comparison of the NLRB decision on Europa’s unfair practice charge and the 20 SAC show that the issues are not facially identical. The NLRB decision concerns an 21 22 23 16 Despite relying on the NLRB decisions on unfair labor practice charges filed by Europa as well as an NLRB complaint filed against Plaintiff, the Union did not file a request for judicial notice (“RJN”). In 24 its first motion to dismiss, the Court denied Defendant’s RJN of the unfair labor practice charges filed 25 by Plaintiff, the decision to dismiss the charges by the Regional Director of Region 21 of the NLRB and denial of the appeals with the NLRB General Counsel Office’s Office of Appeals as moot because the 26 Court did not consider those documents. (Dkt. Nos. 4-4, 4-3, Dkt. No. 12 at 2 n.1.) The Court also denied Defendant’s RJN as to a complaint by the Regional Director of Region 21 of the NLRB against 27 Europa as moot. (Dkt. No. 18-2; Dkt. No. 18-3, Fujimoto Decl,; Dkt. No. 26 at 2 n. 1.) To the extent these requests for judicial notice were not opposed, the Court takes judicial notice of these documents. 28 1 incident claiming unit employees entered the Employer’s shop to check on their personal 2 work tools for a period of 5-10 mins. (Dkt. No. 4-3, Fujimoto Decl., Ex. E at 20-21.) 3 The NLRB complaint filed against Europa also concerned allegations of unlawfully 4 disciplining striking employees who went onto the Employer’s property to secure their 5 tools. (Dkt. No. 18-3, Fujimoto Decl. ¶ 4; id., Ex. C at 17.) In contrast, the SAC alleges 6 that agents of the Defendant entered Plaintiff’s facility during working time to interrupt 7 business and intimate workers who were not striking, (Dkt. No. 27, SAC ¶ 66), and used 8 intimidation tactics, both verbal and physical, including actual physical assault and 9 battery, trespassed into the internal areas of Plaintiff’s premises and physically 10 commandeered the shop to interfere with business operations, (id. ¶ 11(5)). The Union’s 11 argument that the trespass to property is preempted by Garmon because the same claims 12 were already raised before the NLRB is without merit. 13 Similarly, the NLRB’s decision in Case 21-CB-298907 does not support the 14 Union’s argument that the trespass to chattel issue was raised before the NLRB. (Dkt. 15 No. 4-3, Fujimoto Decl., Ex. H at 31.) That NLRB decision addressed name calling and 16 other verbal remarks by picketers but did not address an agent of the Union striking the 17 hood and windshield of a vehicle with a picket sign causing significant damage as it was 18 entering Europa’s premises, (Dkt. No. 27, SAC ¶ 63). Therefore, the Union has not 19 demonstrated these claims are preempted by Garmon. 20 Because both the trespass to chattel and trespass to property allege violent conduct, 21 they fall under an exception to the Garmon preemption. See Garmon, 359 U.S. at 247. 22 As such, both state law claims survive the anti-SLAPP motion to strike. 23 d. Sixth Cause of Action - Defamation 24 The Union maintains that the defamation claim is preempted for failing to allege 25 any specific damages and that it fails to allege a statement of fact rather than hyperbole. 26 (Dkt. No. 29-1 at 15.) In response, instead of addressing the preemption argument raised 27 by the Union, Europa maintains that the Union has failed to provide legal authority that a 28 general damages allegation is not sufficient to plead a defamation claim. (Dkt. No. 32 at 1 24.) Moreover, Defendant argues that whether an alleged defamatory statement is a 2 statement of fact is a factual issue not applicable on a Rule 12(b)(6) motion. (Id. at 25.) 3 As a threshold matter, and an issue not raised by either side, a party asserting 4 Garmon preemption must show that the conduct is arguably subject to § 7 or § 8 of the 5 NLRA. See Garmon, 359 U.S. at 245; Linn v. Plant Guard Workers, 383 U.S. 53, 65 6 (1966) (“Thus the first inquiry, in any case in which a claim of federal preemption is 7 raised, must be whether the conduct called into question may reasonably be asserted to be 8 subject to Labor Board cognizance.”); Moreno v. UtiliQuest, LLC, 29 F.4th 567, 577 (9th 9 Cir. 2022) (the defendant, the party asserting preemption, satisfied its burden showing the 10 “activity is arguably subject to § 7 or § 8 of the Act.”); Hernandez v. Creative Concepts, 11 Inc., 862 F. Supp. 2d 1073, 1084 (D. Nev. 2012) (“A conclusory claim of Garmon 12 preemption does not suffice.”). On this first inquiry, the party must “(1) advance an 13 interpretation of the [NLRA] that is not plainly contrary to its language and that has not 14 been authoritatively rejected by the courts or the [NLRB] and (2) offer ‘enough evidence 15 to enable the court to find that the [NLRB] reasonably could uphold a claim based on 16 such an interpretation.” Int'l Longshoremen's Ass'n v. Davis, 476 U.S. 380, 395 (1986) 17 (internal citation and quotation marks omitted). 18 Here, Defendant fails to address whether the defamation claim is arguably subject 19 to § 7 or § 8 of the NLRA. Because Plaintiff has shown a plausible claim for defamation, 20 the Court DENIES the motion to strike the defamation claim based on the anti-SLAPP 21 statute. 22 Further, in the event that the Union had challenged and shown the defamation 23 claim as one subject to § 7 or § 8, the Court finds the allegations survive the motion to 24 strike. In Linn v. Plant Guard Workers, 383 U.S. 53, 65 (1966), the Court fashioned an 25 exception to the Garmon preemption rule for defamatory statements made with actual 26 malice and adopting the standard from New York Times Co. v. Sullivan, 376 U.S. 254, 27 280 (1964) defining malicious libel as a statement published “with knowledge that it was 28 false or with reckless disregard of whether it was false or not”. The Court held that 1 “where either party to a labor dispute circulates false and defamatory statements during a 2 [labor dispute], the court does have jurisdiction to apply state remedies if the complainant 3 pleads and proves that the statements were made with malice and injured him.” Id. at 55 4 (emphasis added). As to damages, the Court explained that “proof of [ ] harm, [ ] may 5 include general injury to reputation, consequent mental suffering, alienation of associates, 6 specific items of pecuniary loss, or whatever form of harm would be recognized by state 7 tort law.” Id. at 65; see also Belknap, Inc. v. Hale, 463 U.S. 491, 509 (1983) (in Linn, 8 “we held that false and malicious statements in the course of a labor dispute were 9 actionable under state law if injurious to reputation, even though such statements were in 10 themselves unfair labor practices adjudicable by the Board.”). Applying Linn, in Fiori v. 11 Truck Drivers Union Local 1770, 130 F. Supp. 2d 150, 156 (D. Mass. 2001), the district 12 court, in addressing Garmon preemption, denied dismissal of a slander claim concluding 13 that the plaintiff had satisfied the Linn standard where the plaintiff had alleged the 14 Union’s conduct was done with malice and he was specifically injured due to lost wages. 15 Id. 16 Here, the SAC alleges that Pedro Gomez, an agent of the Union, knowingly 17 published false facts indicating that during the strike, Plaintiff did not have any qualified 18 technicians performing services and repairs and that unqualified technicians blew up an 19 engine on a customer car. (Dkt. No. 27, SAC ¶ 69.) It claims these statements were 20 false, Gomez knew they were false, and engaged in these acts for the purpose of 21 interfering with Europa’s business to cause customers not to use the services of [Europa]. 22 (Id. ¶¶ 70, 71 (emphasis added).) Plaintiff alleges that it has been damaged in an amount 23 to be proven at trial.” (Id. ¶ 72.) 24 These allegations sufficiently allege that the statements were made with malice. In 25 addition, while the claim of damages could have been clearer, it relies on facts which 26 claim that Gomez made the statements intending to injure the reputation of the Defendant 27 and produced damages. These factual allegations support an exception to preemption 28 1 under Linn, the Court concludes the defamation cause of action concerning conduct 2 during a labor dispute is not preempted by Garmon. 3 e. Seventh Cause of Action - UCL 4 Defendant summarily argues, in one sentence, that the UCL must be dismissed 5 because it is derivative of the other claims. (Dkt. No. 29-1 at 6.) Plaintiff did not address 6 the UCL in the opposition and Defendant did not raise it in the reply. 7 The SAC raises a UCL claim under the “unlawful” prong. (Dkt. No. 27, SAC ¶ 8 78.) Under the UCL, unfair competition includes “any unlawful, unfair, or fraudulent 9 business act or practice.” Cal. Bus. & Prof. Code. § 17200. Under the “unlawful” prong, 10 “[t]he UCL ‘borrows violations of other laws and treats them as unlawful practices that 11 the unfair competition law makes independently actionable.’” Wilson v. Hewlett– 12 Packard Co., 668 F.3d 1136, 1140 (9th Cir. 2012) (quoting Cel-Tech Commc'ns, Inc. v. 13 L.A. Cellular Tel. Co., 20 Cal. 4th 163, 180, (1999)). On the “unlawful” prong, the claim 14 is dependent on the underlying allegations. Vargas v. JP Morgan Chase Bank, N.A., 30 15 F. Supp. 3d 945, 952-53 (C.D. Cal. 2014). Therefore, a UCL claim based on the 16 unlawful prong rises or falls with the underlying claim. See Aleksick v. 7-Eleven, Inc., 17 205 Cal. App. 4th 1176, 1185 (2012) (a UCL cause of action under the “unlawful” prong 18 fails if a statutory predicate is not stated); Wolski v. Fremont Inv. & Loan, 127 Cal. App. 19 4th 347, 357 (2005) (holding that a UCL claim rises or falls with the underlying claim on 20 which it is predicated). 21 Here, because Plaintiff’s Section 303 claim survived a Rule 12(b)(6) challenge as 22 well as survived an anti-SLAPP challenge by stating a claim as to trespass to chattel, 23 trespass to property, and defamation, the Court DENIES dismissal of the UCL claim 24 based on these claims.17 25 / / / 26 27 17 The Court notes that the UCL claim does not allege a violation of tortious interference with 28 1 Conclusion 2 Based on the reasoning above, the Court DENIES Defendant’s motion to dismiss 3 || the LMRA Section 301 claim for lack of subject matter jurisdiction under Rule 12(b)(1), 4 || GRANTS Defendant’s motion to dismiss the LMRA Section 301 under Rule 12(b)(6) 5 |}and DENIES Defendant’s motion to dismiss the LMRA Section 303 claim for failing to 6 a claim under Rule 12(b)(6). In addition, the Court DENIES Defendant’s motion to 7 || strike the state law claims under the anti-SLAPP statute. The hearing set on February 9, 8 2024 shall be vacated. 9 IT IS SO ORDERED. 10 Dated: February 8, 2024 72 I] Hon. athe Ck 12 United States District Judge 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28