Stephanie Heredia v. Eddie Bauer LLC

[2] 3 UNITED STATES DISTRICT COURT 4 NORTHERN DISTRICT OF CALIFORNIA 5 SAN JOSE DIVISION [6] 7 STEPHANIE HEREDIA, Case No. 16-cv-06236-BLF 8 Plaintiff, ORDER DENYING DEFENDANT 9 v. EDDIE BAUER’S MOTION TO STRIKE PLAINTIFF’S 10 EDDIE BAUER LLC, REPRESENTATIVE PAGA ACTION CLAIMS OR, ALTERNATIVELY, FOR 11 Defendant. JUDGMENT ON THE PLEADINGS 12 [Re: ECF 83] [13] 14 This case started as a wage and hour class action alleging that Eddie Bauer (“Defendant”) 15 failed to compensate its hourly employees for time spent undergoing off-the-clock security “exit 16 inspections” of employees’ personal belongings before leaving the store. Plaintiff, Stephanie 17 Heredia, worked as a sales associate at an Eddie Bauer retail store in Gilroy, California from 18 November 2013 to March 2016. During that time, she alleges that she was required to undergo 19 inspections of her personal belongings—otherwise known as “bag checks” or “security 20 inspections”—whenever she left the store. On January 10, 2018, the Court certified a class of “[a]ll 21 current and former non-exempt retail store employees who were employed by Defendant in the State 22 of California at any time from September 28, 2012, through the present.” ECF 33. Once the record 23 developed, however, the Court, upon a motion from Defendant, decertified the class because it found 24 the class as certified did not satisfy the Rule 23 requirements. Order Granting Defendant’s Motion 25 for Decertification (“Decert. Order”), ECF 79. What remains of Plaintiff’s Complaint is (1) 26 Plaintiff’s individual claims against Defendant and (2) Plaintiff’s representative action claim under 27 California Private Attorney General Act of 2004 (“PAGA”). See Complaint (“Compl.”), ECF 1-1. 1 judgment on the pleadings. See Defendant Eddie Bauer LLC’s Motion to Strike Plaintiff’s 2 Representative PAGA Action Claims or, Alternatively, for Judgment on the Pleadings (“Motion”), 3 ECF 83. The Court heard oral arguments on March 12, 2020 (the “Hearing”). For the reasons stated 4 below and on the record at the Hearing, the Court DENIES Defendant’s Motion. 5 I. BACKGROUND 6 The factual and procedural history of this case are known to the parties and to the Court. See 7 Decert. Order at 2-5. Thus, the Court summarizes only the background pertinent to Defendant’s 8 Motion. 9 Plaintiff’s original theory of the case was that all of Eddie Bauer’s non-exempt employees 10 in California from September 28, 2012, through the present were required to undergo off-the-clock 11 exit inspections pursuant to a uniform corporate policy and in violation of several California labor 12 codes. See Compl. ¶¶ 17-30. Based on a limited record, the Court certified a class of “[a]ll current 13 and former non-exempt retail store employees who were employed by Defendant in the State of 14 California at any time from September 28, 2012, through the present.” ECF 33. 15 Once the record developed, however, it became apparent that the class as certified could not 16 be maintained. While Defendant’s written policy was silent on whether the employees must clock 17 out before or after undergoing the required security inspections, in reality, the employees 18 experienced both on-the-clock and off-the-clock exit inspections. See Decert. Order at 7-8. As a 19 result, Defendant moved to decertify the class, while Plaintiff filed a motion to modify the class 20 definition. See Defendant’s Motion for Decertification, ECF 60; Plaintiff’s Motion to Modify Class 21 Definition (“Mot. to Modify”), ECF 71. Plaintiff’s new theory was that “around the beginning of 22 2017” and in response to the filing of this lawsuit in September 2016, Eddie Bauer changed its 23 practice (but not its written policy) to require bag checks to be conducted on the clock. See Mot. to 24 Modify at 1- 2; 5. Consequently, Plaintiff proposed to redefine the class period to end on December 25 31, 2016 (instead of through the present). See id. at 1. After a careful consideration of the record, 26 the Court decertified the class and rejected Plaintiff’s modified class definition because even before 27 2017, the Eddie Bauer employees did not experience a uniform off-the-clock exit inspection policy. 1 Plaintiff filed a Petition with the United States Court of Appeals for the Ninth Circuit for 2 permission to appeal the Court’s Order Granting Defendant’s Motion for Decertification and 3 Denying Plaintiff’s Motion to Modify Class Definition. ECF 81. On February 7, 2020, the Ninth 4 Circuit, in its discretion, denied Plaintiff’s Petition for interlocutory appeal. ECF 82. Shortly 5 thereafter, Defendant filed this Motion. 6 II. LEGAL STANDARD 7 A. Motion to Strike 8 Federal Rule of Civil Procedure 12(f) permits a court to “strike from a pleading an 9 insufficient defense or any redundant, immaterial, impertinent, or scandalous matter.” The function 10 of a motion made under this rule is “to avoid the expenditure of time and money that must arise 11 from litigating spurious issues by dispensing with those issues prior to trial.” Whittlestone, Inc. v. 12 Handi-Craft Co., 618 F.3d 970, 973 (9th Cir. 2010) (quoting Fantasy, Inc. v. Fogerty, 984 F.2d 13 1524, 1527 (9th Cir. 1993), rev’d on other grounds by Fogerty v. Fantasy, Inc., 510 U.S. 517 (1994)) 14 (internal quotation marks omitted). 15 “While a Rule 12(f) motion provides the means to excise improper materials from pleadings, 16 such motions are generally disfavored because the motions may be used as delaying tactics and 17 because of the strong policy favoring resolution on the merits.” Barnes v. AT & T Pension Ben. 18 Plan-Nonbargained Program, 718 F. Supp. 2d 1167, 1170 (N.D. Cal. 2010). “If there is any doubt 19 whether the portion to be stricken might bear on an issue in the litigation, the court should deny the 20 motion.” Platte Anchor Bolt, Inc. v. IHI, Inc., 352 F. Supp. 2d 1048, 1057 (N.D. Cal. 2004) 21 (citations omitted). “Ultimately, whether to grant a motion to strike lies within the sound discretion 22 of the district court.” Cruz v. Bank of N.Y. Mellon, 2012 WL 2838957 , at *2 (N.D. Cal. July 10, 23 2012) (citing Whittlestone, 618 F.3d at 973 ). 24 B. Motion for Judgment on the Pleadings 25 Federal Rule of Civil Procedure 12(c) provides that “[a]fter the pleadings are closed – but 26 early enough not to delay trial – a party may move for judgment on the pleadings.” A Rule 12(c) 27 motion is “functionally identical” to a Rule 12(b)(6) motion, and the same legal standard applies to 1 Thus, when considering a Rule 12(c) motion, a district court “must accept the facts as pled by the 2 nonmovant.” Id. at 1053 . The district court then must apply the Iqbal standard to determine 3 “whether the complaint’s factual allegations, together with all reasonable inferences, state a 4 plausible claim for relief.” Cafasso, 637 F.3d at 1054 & n.4 (citing Ashcroft v. Iqbal, 556 U.S. 662 5 (2009)). 6 III. TIMING OF DEFENDANT’S MOTION 7 As a procedural matter, the parties dispute whether Defendant’s Motion is timely. Defendant 8 argues that its Motion is timely because it was filed shortly after the Ninth Circuit declined to hear 9 Plaintiff’s interlocutory appeal – which according to Defendant, had put the entire case (including 10 the PAGA claim) on hold. Motion at 7. Plaintiff disagrees and points out that a motion to strike 11 must be filed within 21 days after the service of the pleading at issue – in this case, the Complaint. 12 Plaintiff Stephanie Heredia’s Opposition to the Motion (“Opp’n”) at 6-7, ECF 88. In Plaintiff’s 13 view, there is no justification for Defendant’s delay (by years) because “Defendant simply forgot” 14 about the PAGA claim. Id. at 6. In addition, Plaintiff argues that a Rule 12(c) motion must be 15 brought early enough not to delay trial – which in this case was scheduled to commence 16 approximately a month after Defendant’s Motion was filed.1 Id. at 7-9. Finally, Plaintiff asserts 17 that because Defendant relies on evidence outside of the pleadings (namely, witness depositions), 18 Defendant’s Motion should be converted to a motion for summary judgment – and denied because 19 (1) the Court’s Standing Orders do not allow Defendant to file more than one summary judgment2 20 and (2) Defendant’s Motion is prejudicial to Plaintiff who had six days to oppose it. Id. at 9-11. 21 Rule 12(f) provides that a court may strike material “on its own,” without any time limit for 22 the court to do so. See Fed. R. Civ. P. 12(f)(1). Some district courts have therefore held that a court 23 has discretion to consider an untimely motion to strike under Rule 12(f). See e.g., United States v. 24 Wang, 404 F. Supp. 2d 1155, 1157 (N.D. Cal. 2005) (citing Or. Laborers-Emp’rs Tr. Funds v. Pac. 25 Fense & Wire Co., 726 F. Supp. 786, 788 (D. Or. 1989)); Sprint Solutions Inc. v. Pac. Cellupage [26] 1 The Court notes that since the Hearing, trial dates have been vacated due to health concerns related [27] to COVID-19 and pursuant to General Order 72. 1 Inc., 2014 WL 12610204 , at *2 (C.D. Cal. Dec. 17, 2014). The Ninth Circuit, however, has held 2 that granting such a motion is in error: 3 The district court has authority under Rule 12(f) to strike a pleading, in whole or in part, only if a motion is made before the moving party 4 has filed a responsive pleading, unless the court strikes the pleading on its own initiative or no responsive pleading is permitted. The 5 district court struck the counts in question upon the motion of the trustees after they had already filed their answer to the complaint. 6 Thus, the motion was untimely under Rule 12(f). 7 Culinary & Serv. Employees Union, AFL-CIO Local 555 v. Hawaii Employee Ben. Admin., Inc., [8] 688 F.2d 1228 , 1233 (9th Cir. 1982). In light of Culinary, some district courts have denied untimely 9 motions to strike. See In re Seagate Tech. LLC Litig., No. 16-CV-00523-JCS, 2017 WL 3670779 , 10 at *3 (N.D. Cal. Aug. 25, 2017); Winnemem Wintu Tribe v. U.S. Forest Serv., No. 2:09-CV-1072 11 KJM KJN, 2013 WL 1325423 , at *4 (E.D. Cal. Mar. 29, 2013). 12 Despite district court decisions that have held to the contrary, this Court agrees with the In 13 re Seagate court that Culinary requires denial of a motion to strike filed after the moving party has 14 answered a complaint. In re Seagate, 2017 WL 3670779 , at *3. Because Defendant did not move 15 to strike until years after it answered the Complaint, the motion is untimely and must be DENIED. 16 The Court nevertheless considers Defendant’s Motion under Rule 12(c) of the Federal Rules 17 of Civil Procedure. Rule 12(c) permits a party to move to dismiss a suit “[a]fter the pleadings are 18 closed—but early enough not to delay trial.” See Fed. R. Civ. P. 12(c). Here, Defendant’s Motion 19 had no impact on trial date because the Court – upon Defendant’s ex parte motion – expedited the 20 briefing schedule and hearing date. See ECF 35. Thus, the Court heard and ruled on the Motion in 21 advance of trial – curing any potential for delay. 22 Finally, even if the Court were to accept Plaintiff’s contention that Defendant’s motion is 23 for summary adjudication – because it relies on deposition evidence – the Court has discretion to 24 consider such a motion. “Federal Rule of Civil Procedure 12(b)(6) specifically gives courts the 25 discretion to accept and consider extrinsic materials offered in connection with these motions, and 26 to convert the motion to one for summary judgment when a party has notice that the district court 27 may look beyond the pleadings.” Hamilton Materials, Inc. v. Dow Chem. Corp., 494 F.3d 1203 , 1 – have been the subject of several motions brought by the parties and thus, Plaintiff has had ample 2 notice of them. 3 IV. PLAINTIFF’S PAGA CLAIM 4 Defendant challenges Plaintiff’s PAGA claim on two grounds (1) the PAGA claim is 5 unmanageable because it requires individualized inquires and (2) Plaintiff cannot amend its PAGA 6 notice to include only pre-2017 exit inspections and therefore has not exhausted her administrative 7 remedies. See Motion at 8-18. The Court rejects both challenges. 8 A. Manageability 9 Defendant argues that the Court’s Decertification Order renders Plaintiff’s PAGA claim 10 unmanageable because “myriad individualized issues predominate.” Motion at 8. Defendant relies 11 heavily on the Decertification Order, where the Court found that “it is impossible to know, without 12 individualized inquiries, which employees have undergone exit inspections off the clock and were 13 subjected to uncompensated time.” Motion at 8 (quoting Decert. Order at 8). Plaintiff responds that 14 the PAGA statute does not impose a manageability requirement, and even if manageability was 15 required, the adjudication on Plaintiff’s PAGA claim is manageable. Opp’n at 11-17. 16 In 2003, California enacted PAGA to permit “aggrieved employees, acting as private 17 attorneys general,” to bring lawsuits against employers for Labor Code violations. Arias v. Superior 18 Court, 46 Cal. 4th 969, 980 (2009). The goal was to foster compliance with state labor laws. Id. 19 Thus, PAGA provides that an “aggrieved employee” may bring an action “on behalf of himself or 20 herself and other current or former employees” to recover civil penalties for violations of the Labor 21 Code. Cal. Lab. Code § 2699 . Where the Labor Code does not set forth its own penalty, PAGA 22 sets forth a civil penalty of 100 dollars for each aggrieved employee per pay period for the initial 23 violation and 200 dollars for each aggrieved employee per pay period for each subsequent violation. [24] Id. § 2699(f)(2). “Of the civil penalties recovered, 75 percent goes to the Labor and Workforce 25 Development Agency [“LWDA”], leaving the remaining 25 percent for the ‘aggrieved employees.’” 26 Arias, 46 Cal. 4th at 980–81. An employee suing under PAGA “does so as [a] proxy or agent of the 27 state’s labor law enforcement agencies.” Id. at 986. Thus, PAGA actions “primarily seek to 1 Servs. Corp., 747 F.3d 1117, 1123 (9th Cir. 2014). 2 The Ninth Circuit has recognized that “Rule 23 and PAGA are more dissimilar than alike.” 3 Baumann, 747 F.3d at 1123 (9th Cir. 2014). The California Supreme Court similarly held in Arias 4 that a PAGA plaintiff need not satisfy class action requirements. Arias, 46 Cal. 4th at 975 . 5 Accordingly, the Court’s denial of class certification “because Plaintiff did not satisfy Rule 23’s 6 requirements has little bearing on the viability of Plaintiff’s PAGA claim.” Delgado v. 7 Marketsource, Inc., No. 17-CV-07370-LHK, 2019 WL 1904216 , at *4 (N.D. Cal. Apr. 29, 2019). 8 In a recent decision, another Court in this District found that PAGA does not impose a 9 manageability requirement. Delgado, 2019 WL 1904216 , at *4. In that decision, Judge Koh 10 recognized that several courts have struck representative PAGA claims as unmanageable even 11 though the PAGA statute itself contains no explicit manageability requirement. Id. at *4-5. 12 (collecting cases). However, imposing a manageability requirement based on “individualized 13 inquiries” would be “strikingly similar” to the predominance inquiry under Rule 23. Id. at *4. And, 14 “given the Ninth Circuit’s and California Supreme Court’s conclusions that PAGA plaintiffs need 15 not meet class action requirements,” Judge Koh declined to strike a PAGA claim on the ground that 16 resolving the claim may require individualized inquiries. Id. at *5. The Court finds Judge Koh’s 17 decision well-reasoned and similarly finds that PAGA imposes no manageability requirement 18 To be sure, Defendant correctly points out that to prevail, Plaintiff must prove liability for 19 each allegedly aggrieved employee. Motion at 13; see Hibbs-Rines v. Seagate Techs., LLC., No. C 20 08-05430 SI, 2009 WL 513496 , at *4 (N.D. Cal. Mar. 2, 2009) (“Plaintiff will have to prove Labor 21 Code violations with respect to each and every individual on whose behalf plaintiff seeks to recover 22 civil penalties under PAGA.”). However, that Plaintiff must prove a violation as to each aggrieved 23 employee in order to recover civil penalties for that employee does not support the conclusion that 24 permitting Plaintiff to attempt to prove her case would result in an unmanageable trial – it merely 25 means that Plaintiff may ultimately fail to prove her case. In other words: 26 At trial, plaintiff may prove that defendant violated the California Labor Code with respect to the employees it describes as “aggrieved 27 employees,” some of the employees, or he may not prove any mean that he cannot bring it at all. [1] Zackaria v. Wal-Mart Stores, Inc., 142 F. Supp. 3d 949, 959 (C.D. Cal. 2015). [2] Finally, the Court notes that Plaintiff has presented a fairly manageable trial plan because [3] Plaintiff has identified a total of 10 trial witnesses – 7 of those witnesses are Eddie Bauer employees [4] (including Plaintiff). See Joint Pretrial Statement and Order for Plaintiff’s Representative PAGA [5] Bench Trial (“Pretrial Statement”) at 33-34, ECF 98. [6] In sum, the Court DENIES Defendant’s motion to strike Plaintiff’s PAGA claim on the [7] ground that it is unmanageable [8] B. Plaintiff’s PAGA Notice [9] Anticipating that Plaintiff may limit her PAGA claim to pre-2017 alleged violations of labor [10] code, Defendant argues that “such a modification is not allowed in a PAGA case.” Motion at 16. [11] Defendant notes that under PAGA, a plaintiff must exhaust his or her administrative remedies by [12] first providing notice to the LWDA and “[a]fter notice is given to the LWDA, it cannot be later [13] modified if different facts are discovered.” Id. Plaintiff concedes that PAGA requires an aggrieved [14] employee to provide notice to the LWDA but argues that “the requirement is focused on the specific [15] theories of liability—not anything to do with a temporal limitation of the employees the named [16] plaintiff will represent.” Opp’n at 18. [17] The Court agrees with Plaintiff. California Labor Code Section 2699.3(a)(1)(A) requires the [18] aggrieved employee or representative to give written notice to LWDA and her employer “of the [19] specific provisions of this code alleged to have been violated, including the facts and theories to [20] support the alleged violation.” Cal. Lab. Code § 2699.3 . Here, Plaintiff is not seeking to change [21] her theory of liability (i.e., off-the-clock exit inspections) or the specific provisions of the labor code [22] Defendant allegedly violated. Instead, she is narrowing her claim to a specific timeframe. The [23] Court is not aware of any authority, and Defendant has failed to cite to any, that disallows the [24] narrowing of a PAGA claim in this manner. The cases Defendant cites pertain to scenarios where [25] Plaintiff changed her theory of liability and thus are not analogous to the facts of this case. [26] In sum, the Court DENIES Defendant’s motion to strike Plaintiff’s PAGA claim on the [27] ground that she has not exhausted PAGA administrative remedies as to her narrowed liability 1 timeframe. 2 V. ORDER 3 For the foregoing reasons and those stated on the record at the Hearing, the Court DENIES 4 Defendant’s Motion at ECF 83. [5] 6 IT IS SO ORDERED. [7] 8 || Dated: March 27, 2020 kom Lh ham ty) [9] BETH LABSON FREEMAN 10 United States District Judge [17] Z 18