Judge: David B. Gelfound, Case: 23CHCV01640, Date: 2024-03-15 Tentative Ruling

Case Number: 23CHCV01640    Hearing Date: March 15, 2024    Dept: F49

LOS ANGELES SUPERIOR COURT

NORTH VALLEY DISTRICT

DEPARTMENT F49

MOTION TO COMPEL JOINDER OF INDISPENSABLE PARTIES

Motion filed: 11/21/23

MOVING PARTY: Defendant Vision Media Management & Fulfillment, LLC (“Vision Media” or “Defendant”) 

RESPONDING PARTY: Plaintiff  Karen De Herrera (“Plaintiff”) 

NOTICE: ok 

RELIEF REQUESTED: An order compelling Horizon Personnel Services and Employers Outsourcing, LLC to be joined to this lawsuit as indispensable parties.

TENTATIVE RULING: The motion is DENIED.

BACKGROUND

On June 6, 2023, Plaintiff filed her Complaint, alleging against Defendant Vision Media and Does 1 through 10, alleging wage and hour violations under the Private Attorneys General Act of 2004 action (“PAGA”), as codified in California Labor Code sections 2698, et seq. (Compl., at 2.) This representative action was brought on behalf of both Plaintiff herself and all current and former employees of Defendant Vision Media employed in California during the designated PAGA Period (collectively, “Aggrieved Employees”).

 On November 21, 2023, Defendant filed the instant Motion to Compel Joinder of Indispensable Parties, specifically Horizon Personnel Services (“Horizon”) and Employers Outsourcing, LLC (“Employer Outsourcing”), as co-defendants (the “Motion”).

 On March 4, 2024, Plaintiff filed her Opposition to the Motion. Subsequently, Vision Media filed its Reply on March 7, 2024.

ANALYSIS

Code of Civil Procedure section 389 subdivision (a) provides, “A person who is subject to service of process and whose joinder will not deprive the court of jurisdiction over the subject matter of the action shall be joined as a party in the action if (1) in his absence complete relief cannot be accorded among those already parties or (2) he claims an interest relating to the subject of the action and is so situated that the disposition of the action in his absence may (i) as a practical matter impair or impede his ability to protect that interest or (ii) leave any of the persons already parties subject to a substantial risk of incurring double, multiple, or otherwise inconsistent obligations by reason of his claimed interest. If he has not been so joined, the court shall order that he be made a party.

Code of Civil Procedure section 389 subdivision (b) states, “If a person as described in paragraph (1) or (2) of subdivision (a) cannot be made a party, the court shall determine whether in equity and good conscience the action should proceed among the parties before it, or should be dismissed without prejudice, the absent person being thus regarded as indispensable. The factors to be considered by the court include: (1) to what extent a judgment rendered in the person’s absence might be prejudicial to him or those already parties; (2) the extent to which, by protective provisions in the judgment, by the shaping of relief, or other measures, the prejudice can be lessened or avoided; (3) whether a judgment rendered in the person’s absence will be adequate; (4) whether the plaintiff or cross-complainant will have an adequate remedy if the action is dismissed for nonjoinder.” (See City of San Diego v. San Diego City Employees’ Ret. Sys. (2010) 186 Cal.App.4th 69, 83 (San Diego City Employees’ Ret. Sys.).)

A.    Vision Media Fails to Demonstrate that Horizon and Employers Outsourcing Qualify as Necessary Parties under C.C.P. Section 389(a)

The criteria set forth in Code of Civil Procedure section 389 subdivision (a) (“section 389(a)”) are generally referenced to determine the presence of “necessary” parties.  If a party is deemed “necessary” under one of the standards specified in section 389(a), the Court is then required to assess whether the party is also “indispensable” by evaluating factors listed in Code of Civil Procedure section 389 subdivision (b) (“section 389(b)”). (San Diego City Employees’ Ret. Sys., supra, 186 Cal.App.4th at 83.)

In this case, Vision Media fails to successfully demonstrate that Horizon and Employers Outsourcing are necessary parties, in accordance with section 389(a) subparagraph (1).

Firstly, Vision Media asserts that Horizon is a necessary and indispensable party, arguing only Horizon is Plaintiff’s direct employer and is solely responsible for hiring, paying wages, and issuing wage statements. (Mot. at 6, 7.) Further, in its Reply, Vision Media advances an additional argument, positing that even assuming Vision Media and Horizon would be considered as joint employers, Plaintiff’s claims would fail without demonstrating “willful” conduct on the part of Vision Media, necessitated by Labor Code to held it liable for wage and hour violations as a co-employer. (Reply, at 5.) Following this, Vision Media further contends that complete relief could not be accorded unless Plaintiff can establish Vision Media’s liability for all claims presented in this litigation. (Ibid.) However, the Court finds this argument to be without merits on several grounds.

One, as Plaintiff, in her response, correctly cites Labor Code section 2810.3 subdivision (b), emphasizing that Vision Media retains potential liability for wage violations even if not a direct employer. This section explicitly states, “A client employer shall share with a labor contractor all civil legal responsibility and civil liability for all workers supplied by that labor contractor for ... (1) the payment of wages.” Here, Vision Media has not contested that it is not a client employer for the purpose of Labor Code violation claims. The Labor Code sets forth that “‘Client employer’ means a business entity, regardless of its form, that obtains or is provided workers to perform labor within its usual course of business from a labor contractor.” (Lab. Code, § 2810.3, subd. (a).)

Furthermore, the indirect method of wage payment through a temporary employment agency, namely Horizon in this case, does not absolve the direct compensatory nature of the paycheck. (Bradley v. Department of Corrections & Rehabilitation (2008) 158 Cal.App.4th 1612, fn. 2.) The Complaint alleges that Vision Media “rounded Plaintiff and/or other Aggrieved Employers’ hours worked, thereby depriving them of wages for all hours worked at the legally mandated rates.” (Compl., ¶ 22.) Given that Vision Media’s uncontested involvement in the approval and payment process of the hours billed by Horizon, it is reasonable to infer that it was for the number of hours worked by Plaintiff, approved by Vision Media, billed by Horizon, and paid by Vision Media.

Consequently, Vision Media’s assertion that Horizon alone is responsible for paying wages is misplaced. Without being the direct employer, Vision Media could still face liability for wage violations.

Two, the Labor and Service Agreement between Horizon and Vision Media explicitly assigns Vision Media the sole responsibility “for supervision, direction, control and manor in which work of Employees is performed and the details of such work while operating at Customer’s workplace or assigned workplace[.]” (Thorup Decl., ¶ 2, Ex. (A,) at 2.) The Complaint outlines several allegations against Vision Media, including its failure “to authorize and permit and/or make available Plaintiff and/or other Aggrieved Employees [compliant] meal periods” (Compl., ¶ 23), failure to permit compliant rest periods (Compl., ¶ 24), and failure to “keep accurate records of the hours worked by Plaintiff and/or other Aggrieved Employees.” (Compl., ¶ 28.) Here, the key is that Vision Media’s liabilities are predicated on these allegations of labor law hour violations involving the terms of the Labor and Service Agreement under control of Vision Media.

Vision Media has not contested that these liabilities might rest on terms under the control of Horizon. On the contrary, all the allegations of hour violations pertain to aspects of employment practices under Vision Media’s control. Therefore, Horizon cannot be deemed a necessary party as to these claims since complete relief may be accorded between Plaintiff and Vision Media.

Third, the Court finds Vision Media’s interpretation of the “complete relief” under section 389(a) to be misconstrued. The first clause of section 389(a), the “complete relief” clause, focuses not on whether complete relief can be afforded all possible parties to the action, but rather on whether complete relief can be afforded the parties already joined in the action. (Countrywide Home Loan, Inc. v. Superior Court (1999) 69 Cal.App.4th 785, 793-794.) Here, Vision Media is entitled to present any defenses against the alleged liabilities, regardless of the joinder of Horizon or Employer Outsourcing. Additionally, the assessment of a claim’s merit, including its likelihood of success based on the establishment of elements required by the Labor Code sections, is not relevant to the determination of a necessary party.

If Vision Media successfully defends itself, it does not imply that Plaintiff has been deprived of complete relief. The criteria for “complete relief” is met as long as the Court’s resolution addresses the disputes between parties already involved in the action. Therefore, the necessity for joining Horizon or Employer Outsourcing to achieve complete relief is not supported by the standards set forth in section 389(a).

Therefore, the determination of whether Horizon or Employer Outsourcing is necessary party does not hinge on whether either of them is the direct employer of Plaintiff. As the Complaint makes specific allegations against Vision Media, coupled with the uncontested fact that Vision Media exercised control over the employment practices at issue, the Court concludes that complete relief can be accorded among the parties already joined in the action.

 Secondly, Vision Media’s argument, based on section 389(a)(2), concerning the risk of prejudice from potentially inconsistent or conflicting judgments – especially regarding its rights to seek indemnification from Horizon or Employers Outsourcing – is not fully convincing. (Mot., at 8.) Specifically, Vision Media asserts that it might have to defend against litigation regarding Horizon’s and/or Employers Outstanding’s practices without having them included as parties to the litigation. (Ibid.) Moreover, Vision Media is concerned that seeking indemnification against Horizon or Employer Outsourcing in future proceedings could result in judgments that are inconsistent with findings on wage and hour violations in the present case. (Ibid.) However, these concerns are misplaced.

The Court clarifies that in the current action, Vision Media is solely defending against allegations of its own wage and hour violations as a client employer, not the employment practices of Horizon or Employer Outsourcing. Consequently, the interests of Horizon or Employer Outsourcing are not directly at stake in this case.

Moreover, section 389(a)(2) necessitates that an absent party must “claims an interest relating to the subject of the action.” It is clear that neither Horizon nor Employers Outsourcing has claimed an interest in this litigation, as both parties stipulate that Horizon has been out of business. (Etemadi Decl., ¶ 7.) This absence of claimed interest by Horizon or Employer Outsourcing undermines Vision Media’s argument, failing to satisfy the criteria under section 389(a)(2).

Thirdly, practical considerations do not influence the determination of necessary parties according to legal criteria in section 389(a). Additionally, addressing practical issues is distinct from the question of whether indispensable parties are present. For instance, Vision Media, if aiming to avoid subsequent litigation for indemnification, has the option to seek permission to file cross-complaint against Horizon and Employer Outsourcing within the current proceedings. Similarly, access to specific information like payroll and employee lists, if held by non-parties, can be facilitated through conventional discovery methods.

Accordingly, Vision Media does not satisfy the two-prong criteria under Code of Civil Procedure section 389 subdivision (a) to establish that Horizon and Employer Outsourcing are necessary parties.

B.     Consideration of Factors under C.C.P. Section 389(b) is Unnecessary As Vision Media Does Not Fulfill the Criteria under C.C.P. Section 389(a)

“A determination that the persons are necessary parties in the predicate for the determination whether they are indispensable parties.” (Deltakeeper v. Oakdale Irrigation Dist. (2001) 94 Cal. App.4th 1092, 1100 (Deltakeeper).)

“A party is indispensable only in the “conclusory sense that in [its] absence, the court has decided the action should be dismissed. Where the decision is to proceed the court has the power to make a legally binding adjudication between the parties properly before it.” (Deltakeeper, supra, 94 Cal.App.4th at 1105.)

Given the Court’s conclusion that Vision Media has not sufficiently demonstrated that Horizon and Employer Outsourcing are necessary parties under section 389(a), it negates the need to assess their indispensability under section 389(b).

Consequently, the Court determines that Vision Media, as a client-employer for the purpose of labor law codes, is responsible for complying with Labor Code sections §§ 2698 et seq. It is inconsequential that Plaintiff chooses not to name her direct employer Horizon and its contractor Employers Outsourcing as defendants. As Vision Media constitutes a propriate defendant without proving any parties to be indispensable, the argument that the Court should dismiss the action is unfounded.

            For the reasons stated above, the Court DENIES the Motion to Compel Joinder of Indispensable Parties.

CONCLUSION

Defendant’s Motion to Compel Joinder of Indispensable Parties is DENIED

Moving party to provide notice of this order.