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Posts Tagged ‘Supreme Court of the United States’

Basing a UCL Claim Partially on FLSA Violation Does Not Confer Federal Question Jurisdiction

In Federal Question Jurisdiction, FLSA, Remand on August 15, 2010 at 8:00 am

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Judge Percy Anderson of the Central District of California faced the question of whether basing a UCL claim partially on a violation of the FSLA creates federal jurisdiction.  The Court held that it did not.  The case is Williams, et al. v. Wells Fargo Bank, N.A., No. CV 10-4761 PA (PJWx), 2010 WL 3184248 (C.D. Cal. Aug. 9, 2010).

Plaintiffs’ alleged that defendant Wells Fargo Bank, N.A. (“Defendant”) misclassified them as exempt from overtime and failed to pay wages for overtime compensation.

Plaintiffs were employed by Defendant as “Home Mortgage Consultants” sometime between February 10, 2001 and the present. During that time, Plaintiffs were paid on a commission sales basis and were never paid any overtime or premium pay. On May 30, 2010, Plaintiffs brought this action against Defendant in the Superior Court for the County of Los Angeles, alleging (1) violation California Labor Code §§ 510 and 1198 for unpaid overtime; (2) violation of California Labor Code §§ 2800 and 2802 for unpaid business expenses; (3) violation California Labor Code §§ 201 and 202 for wages not timely paid upon termination; (4) violation California Labor Code § 204 for wages not timely paid during employment; (5) violation California Labor Code § 226(a) for non-compliant wage statements; and (6) violation of California Business & Professions Code §§ 17200, et seq.

Defendant filed a Notice of Removal on June 28, 2010, alleging federal question jurisdiction.  Plaintiffs filed a motion to remand, maintaining that they have only alleged state law claims, and thus there is no basis for subject matter jurisdiction.

Defendant contended that Plaintiffs have effectively alleged a separate federal claim by alleging violation of the UCL based on violation of the FLSA.

Defendant is asking that this Court treat UCL claims and the violations upon which they are based as one in the same. However, Defendant has not cited, and the Court has not found, any authority which supports this position. Indeed, Defendant’s view seems to directly contradict the California Supreme Court‘s characterization of the UCL as a statute that “borrows” violations of other laws and makes them “independently actionable.” Accordingly, the Court does not find that Plaintiffs have somehow alleged a federal cause of action by basing their UCL claim in part on Defendant’s alleged violation of FLSA.

Defendant also contended that because most of Plaintiffs’ claims stem from their allegations that Defendant misclassified them as exempt from overtime compensation, and Plaintiffs’ overtime claim is entirely dependent on an interpretation of the FLSA, the resolution of Plaintiffs’ claims depends upon the resolution of whether Defendant violated the FLSA.  The court was not persuaded.

Although Defendant is correct in noting that most of Plaintiffs’ claims stem from allegations that Defendant improperly classified them as exempt, there is no indication in the complaint that this misclassification is based on exemptions set forth in federal law, as opposed to California law. . . . Where a plaintiff has alleged a UCL claim based on both the violation of state and federal law, courts have found that federal question jurisdiction does not exist. See, e.g., Holliman v. Kaiser Foundation Health Plan, 2006 U.S. Dist. LEXIS 14627 at *13 (N.D. Cal. March 14, 2006) (finding no federal question jurisdiction where UCL claim was based on violations of California Labor Code and FLSA); Roskind v. Morgan Stanley Dean Witter & Co. 165 F. Supp. 2d 1059, 1067 (N.D. Cal. April 11, 2001) (finding no federal question jurisdiction where UCL claim was based on “unfair” misrepresentations and violation of the National Association of Securities Dealers rules); Castro v. Providian Nat’l Bank, 2000 U.S. Dist. LEXIS 19062 at *8-9 (N.D. Cal. Dec. 29, 2000) (finding that even if plaintiffs were basing UCL claim on violation of federal Truth in Lending Act (“TILA”) in addition to violations of California law, claim did not depend on question of federal law because jury could find violation of section 17200 without finding violation of TILA).

Here, Plaintiffs have alleged a UCL claim based on a number of “unlawful” acts, which include two FLSA violations in addition to nine violations of the California Labor Code. Because a single unlawful business practice may give rise to liability under the UCL, a jury could very well find that Defendant violated section 17200 without also finding that it violated the FLSA. As such, Plaintiffs’ UCL claim does not depend upon the resolution of a question of federal law.

Id. **3-4.

By CHARLES H. JUNG

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Judge Walker Lifts Stay

In Breaking News, Other Cases of Interest on August 12, 2010 at 1:13 pm
2008 Proposition 8 Protest
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Judge Vaughn R. Walker of the Northern District of California today lifted a stay on his decision where he ruled that Proposition 8 was unconstitutional.  Judge Walker, however, delayed implementation of the order to lift his stay until August 18.

Defendant-intervenors Dennis Hollingsworth, Gail Knight, Martin Gutierrez, Mark Jansson and ProtectMarriage.com brought a motion to stay the court’s judgment last week to ensure that Proposition 8 remains in effect as they pursue their appeal in the Ninth Circuit. In the alternative, proponents sought a brief stay to allow the court of appeals to consider the matter.

San Francisco asked the court to deny the stay and order the injunction against Proposition 8 to take effect immediately. California’s Governor and Attorney General also opposed any stay.

The Court held that “[b]ecause proponents fail to satisfy any of the factors necessary to warrant a stay, the court denies a stay except for a limited time solely in order to permit the court of appeals to consider the issue in an orderly manner.”

Federal courts look to four factors in deciding whether a stay is appropriate:

(1) whether proponents have made a strong showing that they are likely to succeed on the merits;

(2) whether proponents will be irreparably injured absent a stay;

(3) whether the stay will substantially injure other interested parties; and

(4) whether the stay is in the public interest.

See Nken v. Holder, 556 U.S. —-, 129, S. Ct. 1749, 1761 (2009) (noting overlap with Winter v. Natural Resources Defense Council, Inc., 555 U.S. —-, 129 S. Ct. 365, 374 (2008)).  The first two factors “are the most critical.”  Nken, 129 S. Ct. at 1757.

The order reads:

None of the factors the court weighs in considering a motion to stay favors granting a stay. Accordingly, proponents’ motion for a stay is DENIED. Doc #705. The clerk is DIRECTED to enter judgment forthwith. That judgment shall be STAYED until August 18, 2010 at 5 PM PDT at which time defendants and all persons under their control or supervision shall cease to apply or enforce Proposition 8.

By CHARLES H. JUNG

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One Year Statute of Limitations Applies to Waiting Time Penalty Claim Where Wages Not Sought

In Statutes of Limitation, Waiting Time Penalties on August 9, 2010 at 3:12 pm
Wait Time = Batman
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Hon. Howard R. Lloyd today issued an unpublished opinion today confirming that a one year statute of limitations pursuant to Cal. Code Civ. Proc. § 340(a) applies to a plaintiff’s claim for waiting time penalties.  Pinheiro v. ACXIOM Information Security Services, Inc., 2010 WL 3058081 (N.D. Cal. August 03, 2010) (Slip Op.)

Plaintiff argued that a three year statute of limiations applied, citing Cortez v. Purolator Air Filtration Products Co., 23 Cal.4th 163, 999 P.2d 706, 96 Cal.Rptr.2d 518 (2000), in which the plaintiff sought both unpaid wages and waiting time penalties.  The court rejected this argument and granted defendant’s motion to dismiss this claim without leave to amend.

Plaintiff Carla Pinheiro was an employee of defendant Aerotek, Inc. (Aerotek), an employment agency. She alleges that she was assigned to work as a temporary customer service representative for defendant Quest Diagnostics Clinical Laboratories, Inc. (Quest). The gravamen of Pinheiro’s complaint as to Aerotek is that Aerotek wrongfully terminated her employment (Sixth Claim for Relief) and failed to timely pay her final wages in violation of California Labor Code sections 201-203 (Seventh Claim for Relief). Plaintiff also asserts a claim against Aerotek under California Bus. & Prof.Code section 17200 (Eighth Claim for Relief) based upon the alleged failure to timely pay her final wages.

Aerotek moved to dismiss Pinheiro’s seventh and eighth claims for relief concerning the alleged failure to timely pay her final wages.

The Court found that, based upon the law as it currently stands, plaintiff’s seventh and eighth claims for relief as to Aerotek should be dismissed.

Cal. Labor Code §§ 201-203 COA

At issue was whether Pinheiro’s claim for waiting time penalties is subject to a one-year statute of limitations (Aerotek’s view) or to a three-year limitations period (Pinheiro’s position). The court held that the one-year statute of limitations under Cal.Code Civ. Proc. § 340(a) applies, and plaintiff’s seventh claim for relief therefore is time-barred. See McCoy v.Super. Ct., 157 Cal.App.4th 225, 68 Cal.Rptr.3d 483 (2008) (holding that in action seeking only waiting time penalties, and not wages, the one-year statute of limitations under Cal.Code Civ. Proc. § 340(a) applies). Cf. Ross v. U.S. Bank Nat’l Ass’n, Case No. C07-02951 SI, 2008 WL 4447713 *4 (N.D. Cal., Sept. 30, 2008) (concluding that the three-year statute of limitations period under Cal. Labor Code § 203 applied where plaintiff sought unpaid wages, as well as waiting time penalties). Plaintiff’s cited authority, Cortez v. Purolator Air Filtration Products Co., 23 Cal.4th 163, 999 P.2d 706, 96 Cal.Rptr.2d 518 (2000), in which the plaintiff sought both unpaid wages and waiting time penalties, but the Court held that this “does not compel a contrary conclusion.”

Cal. Bus. & Prof.Code § 17200 COA

The court held that remedies under California Labor Code § 203 are penalties, and not restitution, and therefore cannot be recovered under the UCL. In re Wal-Mart Stores, Inc. Wage & Hour Litig., 505 F.Supp.2d 609, 619 (N.D. Cal.2007); Tomlinson v. Indymac Bank, F.S.B., 359 F.Supp.2d 891, 895 (C.D. Cal.2005).  The court dismissed the 17200 claim as to Aerotek without leave to amend.

Alison Marie Miceli, Michael James Grace, and Graham Stephen Paul Hollis for Plaintiff.

Jonathan Morris Brenner, Caroline McIntyre, and Alison P. Danaceau for Defendants

By CHARLES H. JUNG

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Cal. Supreme Court Issues Opinion in Reid v. Google, Rejecting Strict Application of Stray Remarks Doctrine in Cal. Discrimination Cases

In Other Cases of Interest on August 5, 2010 at 12:53 pm
Google
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The California Supreme Court today issued its decision in Reid v. Google.  The Court rejected strict application of the stray remarks doctrine in California discrimination cases.  Under this doctrine, statements that non-decision-makers make or that decision makers make outside of the decisional process are deemed stray, and they are irrelevant and insufficient to avoid summary judgment.

Plaintiff Brian Reid filed an age discrimination lawsuit against his former employer, Google, Inc. The trial judge, Hon. William J. Elfving, granted Google‘s summary judgment motion relating to plaintiff‘s claims. The Court of Appeal reversed.

The Court decided two issues:

  1. Does a trial court‘s failure to rule on a party‘s evidentiary objections relating to a summary judgment motion waive the objections on appeal?
  2. Should California courts follow the federal courts in adopting the stray remarks doctrine in employment discrimination cases?

The Court of Appeal found that the trial court’s failure to issue express rulings on evidentiary objections did not waive those objections on appeal.  And the Court of Appeal further refused to apply the stray remarks doctrine to exclude alleged discriminatory statements that Reid‘s supervisors and coworkers made.

The Supreme Court agreed with the Court of Appeal’s conclusions:

Regarding the waiver issue, the Court of Appeal correctly determined that a finding of waiver does not depend on whether a trial court rules expressly on evidentiary objections and that Google‘s filing of written evidentiary objections before the summary judgment hearing preserved them on appeal. (Code Civ. Proc., § 437c, subds. (b)(5), (d).)  After a party objects to evidence, the trial court must then rule on those objections. If the trial court fails to rule after a party has properly objected, the evidentiary objections are not deemed waived on appeal.

Regarding the stray remarks issue, the Court of Appeal also correctly determined that application of the stray remarks doctrine is unnecessary and its categorical exclusion of evidence might lead to unfair results.

Robin Weideman of the California Labor & Employment Law Blog gives a nice analysis of the stray remarks portion of today’s ruling.

The attorneys for plaintiff and appellant were Barry L. Bunshoft, Ray L. Wong, Paul J. Killion, Lorraine P. Ocheltree, Eden E. Anderson and Allegra A. Jones.  Charlotte E. Fishman for California Employment Lawyers Association filed an Amicus Curiae on behalf of Plaintiff and Appellant.  Thomas W. Osborne, Melvin Radowitz and Barbara A. Jones for AARP also filed an Amicus Curiae on behalf of Plaintiff and Appellant.

The attorneys for defendant and respondent were Fred W. Alvarez, Marina C. Tsatalis, Amy K. Todd, Marvin Dunson III, Koray J. Bulut, Elizabeth C. Tippett, Jeanna Steele, Gary M. Gansle of Wilson Sonsini and Paul W. Cane, Jr. of Paul Hastings.  Greines, Martin, Stein & Richland and Robert A. Olson for Association of Southern California Defense Counsel filed an Amicus Curiae on behalf of Defendant and Respondent.  Orrick, Herrington & Sutcliffe‘s Gary S. Siniscalco, Patricia K. Gillette, Greg J. Richardson and Lynne C. Hermle on behalf of the Employers Group and California Employment Law Council also filed an Amici Curiae on behalf of Defendant and Respondent. Jonathan B. Steiner, Jay-Allen Eisen, Jon B. Eisenberg, Dennis A. Fischer, Steven L. Mayer, Robert A. Olson, Douglas R. Young, and Robin Meadow also filed an Amicus Curiae.

By CHARLES H. JUNG

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