Judge David S. Cunningham, Case Number: 19STCV36328, Date: 2024-12-20 Tentative Ruling

Judge: David S. Cunningham, Case: 19STCV36328, Date: 2024-12-20 Tentative Ruling

“This is a wage-and-hour case.” (10/14/24 Ruling Re: Motion for Leave to Amend, p. 1.) “Plaintiff alleges class and representative claims under the Labor Code, Unfair Competition Law, and [PAGA].” (Ibid.)[1]

On October 14, 2024, Plaintiff’s Counsel’s motion for leave to amend came on for hearing. “The purpose of the motion is twofold – to add a new representative named Sara Sobenes in Plaintiff’s place and to dismiss Plaintiff without prejudice.” (Id. at p. 2.) The Court continued the matter “to give Plaintiff’s Counsel a chance to decide whether Sobenes is the right person to serve as the new representative.” (Id. at p. 5.)

If they want to continue with Sobenes, they should redraft the proposed [third amended complaint (“TAC”)] to allege facts demonstrating relation back and PAGA standing, and they should prepare themselves to oppose an arbitration motion in case Defendant decides to file one. If they want to conduct discovery to find a different new representative, they should set up a discovery conference.

The issue now is whether the supplemental papers support granting or denying Plaintiff’s Counsel’s motion.

“The court may grant leave to amend the pleadings at any stage of the action. A party may discover the need to amend after all pleadings are completed and new information requires a change in the nature of the claims or defenses previously pleaded.” (Edmon & Karnow, Cal. Practice Guide: Civ. Procedure Before Trial (The Rutter Group June 2024 Update) ¶ 6:636, emphasis in original.) “Such changes usually cannot be made on ex parte procedure [citation]. Rather, a formal motion to amend must be served and filed.” (Ibid.)

“Motions for leave to amend are directed to the sound discretion of the judge.” (Id. at ¶ 6:637.) “The court may, in furtherance of justice, and on any terms as may be proper, allow a party to amend any pleading.” (Cal. Code Civ. Proc. § 473, subd. (a)(1).) “However, the court’s discretion will usually be exercised liberally to permit amendment of pleadings.” (Howard v. County of San Diego (2010) 184 Cal.App.4^th 1422, 1428.)

“The policy favoring amendment is so strong that it is a rare case in which denial of leave to amend can be justified.” (Ibid.) “Leave to amend should be denied only where the facts are not in dispute, and the nature of the plaintiff’s claim is clear, but under substantive law, no liability exists and no amendment would change the result.” (Edwards v. Superior Court (2001) 93 Cal.App.4^th 172, 180.) In fact, “[i]f the motion to amend is timely made and the granting of the motion will not prejudice the opposing party, it is error to refuse permission to amend and where the refusal also results in a party being deprived of the right to assert a meritorious cause of action or a meritorious defense, it is not only error but an abuse of discretion.” (Morgan v. Superior Court (1959) 172 Cal.App.2d 527, 530.)

Defendant contends leave to amend should be denied because Plaintiff’s Counsel failed to submit a declaration from Sobenes that proves her claims relate back to Plaintiff’s complaint. (See Defendant’s Rebuttal Brief, p. 2.)

The Court’s October 14^th ruling states that the revised TAC must allege allegations that show relation back, not that Sobenes must file a declaration. (See 10/14/24 Ruling Re: Motion for Leave to Amend, p. 5.)

“Under the relation-back doctrine, an amendment relates back to the original complaint if the amendment: (1) rests on the same general set of facts; (2) involves the same injury; and (3) refers to the same [offending] instrumentality.” (Pointe San Diego Residential Community, L.P. v. Procopio, Cory, Hargreaves & Savitch, LLP (2011) 195 Cal.App.4^th 265, 276; see also Edmon & Karnow, supra, at ¶ 6:735.)

The revised TAC’s new, material allegations appear in paragraphs 14, 31, and 32. They state:

14. Plaintiff Sara Sobenes was a non-exempt hourly employee living in the state of California with various duties that included, but were not limited to, wrapping pallets, loading and unloading deliveries, moving packages to and from the warehouse, printing labels, printing invoices, and scheduling times for shipping and receiving from November 2018 through July 2021.

31. Plaintiff has complied with the procedures for bringing suit specified in Labor Code section 2699.3. On or around October 10, 2019, Silvestre Martinez, the previous named Plaintiff in the action, gave written notice to the Labor and Workforce Development Agency (“LWDA”) and to the Staffing Defendants of the specified provisions of the Labor Code alleged to have been violated by it (“Initial PAGA Notice”). The LWDA did not provide notice of its intention to investigate the Staffing Defendants’ alleged violations within sixty-five (65) calendar days of the October 10, 2019 postmarked date of the herein-described notice sent by Plaintiff to the LWDA and Defendants.

32. On October 7, 2024, Plaintiff filed an amended written notice to the LWDA (“Amended PAGA Notice”) and to the Defendants of the specified provisions of the Labor Code alleged to have been violated. In this amended written notice, Plaintiff was included as a named Aggrieved Employee. The Amended PAGA Notice alleges the exact same underlying Labor Code violations as the October 10, 2019 Initial PAGA Notice. Additionally, under Esparza v. Safeway, Inc., (2nd. Dist. Ct. Appl., 2019) 36 Cal. App. 5th 42, an untimely PAGA complaint relates back to an earlier complaint if the earlier complaint was preceded by timely notice to the LWDA. The policy behind statutes of limitations is to put defendants on notice of the need to defend against a claim in time to prepare a fair defense on the merits. This policy is satisfied when recovery under an amended complaint is sought on the same basic set of facts as the original pleading. (Hutcheson v. Superior Court, (1st Dist. Ct. App. 2022) 74 Cal. App. 5th 932, 940.)

(Yedoyan Supp. Decl., Ex. L, ¶¶ 14, 31-32 [attaching revised TAC], bold in original, underlining of case names added.)

The Court believes the new allegations suffice to demonstrate relation back for the class claims. Paragraph 14 alleges that Sobenes did the same jobs that Plaintiff did. (See id. at Ex. K, ¶ 14 [attaching red-lined version of revised TAC].) Additionally, the revised TAC continues to plead the same wage-and-hour violations by the same Defendants as a result of the same policies and practices. (See id. at Ex. K, ¶¶ 15-24, 34-44, 45, 55-138.) All three relation-back elements are alleged.

Defendant’s director of operations, Mirna Sevilla, claims Plaintiff and Sobenes did not do the same jobs. Sevilla declares that Plaintiff was a general laborer who loaded and unloaded boxes in the warehouse, and Sobenes was customer-service representative who worked exclusively in the office. (Sevilla Decl., ¶¶ 5-7.)

Plaintiff Counsel’s motion is not an evidentiary motion. The question is whether the revised TAC alleges relation back. The answer is yes for the class claims.[2]

Sevilla also declares that Sobenes signed an arbitration agreement. (See id. at ¶ 8.)

If true, this could be a basis for compelling arbitration, but it is not a basis for denying leave to amend.

Defendant argues that Sobenes lacks standing, and the relation-back doctrine does not apply, because her claim is time-barred. (See Defendant’s Rebuttal Brief, p. 5 [citing Hargrove v. Legacy Healthcare, Inc. (2022) 80 Cal.App.5^th 782].)

“Relation back [can] apply to amendments that substitute a plaintiff.” (Hutcheson, supra, 74 Cal.App.5^th at 940.) “[I]f a plaintiff is determined to have lacked standing, or if a plaintiff loses standing after the complaint is filed, the plaintiff may amend the complaint to substitute a new plaintiff with standing.” (Ibid.)

On one hand, paragraphs 31 and 32 purport to allege compliance with the pre-suit notice requirement, and the revised TAC states facts establishing the relation-back elements. (See Yedoyan Supp. Decl., Ex. L, ¶¶ 14, 15-24, 31-32, 34-44, 45, 55-138; see also id. at Ex. K ¶¶ 14, 15-24, 31-32, 34-44, 45, 55-138.) Hutcheson arguably holds that the relation-back doctrine applies to the circumstances alleged here. (See Hutcheson, supra, 74 Cal.App.5^th at 940-945.)

Amendment substituting as new PAGA plaintiff a former employee who had not yet given PAGA notice when the original complaint was filed. The substitution would be proper if the amended PAGA claims “rest on the same general set of facts, involve the same injury, and refer to the same instrumentality as the claims in the original complaint.”

(Banke & Segal, Cal. Practice Guide: Civ. Procedure Before Trial Statutes of Limitations (The Rutter Group February 2024 Update) ¶ 8:221; see also id. at ¶ 4:1287.20 [stating that “relation back applied where new named plaintiff was substituted in to replace prior named plaintiff who gave notice to [LWDA]”].)

On the other hand, Defendant contends Hutcheson is distinguishable. There, the second employee filed his own pre-suit notice and his own PAGA lawsuit prior to the first employee’s substitution request. It was undisputed that the second employee’s pre-suit notice and lawsuit were timely. (See Hutcheson, supra, 74 Cal.App.5^th at 941 n.5.) Moreover, the second employee filed a motion to intervene in the first employee’s case. (See id. at 937.) Defendant claims Sobenes, by contrast, did not file her own action, she submitted the amended notice in October 2024, more than a year after her employment ended in July 2021 (see Yedoyan Supp. Decl., Exs. L, ¶¶ 14, 31-32, Ex. K, ¶¶ 14, 31-32), and she did not move to intervene.

Defendant’s authority for claiming Hutcheson is distinguishable is Hargrove. (See Defendant’s Rebuttal Brief, p. 5.)

The Court disagrees in part. Hargrove, itself, has distinguishable factors. The first employee passed away (a deceased plaintiff’s PAGA claim cannot be assigned); the second employee did not have “standing to appeal the order dismissing the case[;]” and the proposed substitution concerned different years, different facts, different injuries, and different job positions. (Hargrove, supra, 80 Cal.App.5^th at 789-793; see also Banke & Segal, supra, at ¶ 8:221 [noting that “[a]n amendment to substitute a new PAGA plaintiff to replace a deceased plaintiff was properly denied where the amended complaint did not rest on the same general set of facts or involve the same injury because the former and putative new plaintiff were never employed during the same year, held different positions and suffered different alleged injuries”], emphasis in original.) Also, filing a separate case and seeking intervention are not elements of the relation-back doctrine.

The factor that helps Defendant, though, is that, unlike Sobenes, the second employee in Hargrove filed her notice with the LWDA within the one-year limitations period. (See Hargrove, supra, 80 Cal.App.5^th at 787 [noting that the second employee worked from May 2019 to August 2019 and filed her LWDA notice on May 13, 2020].) Hargrove suggests that, to substitute into a PAGA action, and benefit from relation back, the new plaintiff must “meet[] PAGA’s prerequisites (standing, notice, & statute of limitations)[.]” (Id. at 791.) Sobenes did not file her notice within one year.

Hargrove is a Fourth District decision, yet it fails to mention Johnson v. Maxim Healthcare Services, Inc. (2021) 66 Cal.App.5^th 924, another Fourth District case. Johnson holds that, even if an aggrieved employee’s individual PAGA claim is time-barred, he or she still has standing to bring a representative PAGA claim. (See Johnson, supra, 66 Cal.App.5^th at 929-930; see also Adolph v. Uber Technologies, Inc. (2023) 14 Cal.5^th 1104, 1121 [discussing Johnson with approval].) Sobenes qualified as an aggrieved employee when Plaintiff filed the complaint. (See Yedoyan Supp. Decl., Exs. L, ¶ 14 [alleging that Sobenes worked from November 2018 through July 2021], K, ¶ 14 [same].) But she and the Johnson plaintiff both filed LWDA notices more than a year after they suffered the alleged wrongs. (See id. at Exs. L, ¶¶ 31-32, K, ¶¶ 31-32; see also Johnson, supra, 66 Cal.App.5^th at 927 [stating that the plaintiff signed the contested agreement in September 2016 and sent the pre-suit notice in June 2019].)[3]

On balance, the Court finds that the PAGA claim relates back and that Plaintiff’s Counsel’s motion should be granted because:

* Sobenes has standing because she was an aggrieved employee at the time that Plaintiff filed the complaint;

* the LWDA and Defendant received adequate notice from Plaintiff’s pre-suit notice (see Hutcheson, supra, 74 Cal.App.5^th at 941, 944);

* assuming arguendo that Sobenes’s individual PAGA claim is time-barred, Johnson allows her to bring the representative PAGA claim;

* Sobenes’s amended notice and the revised TAC allege the same facts, injuries, and instrumentality as Plaintiff’s pre-suit notice and complaint; and

* Hutcheson’s view regarding the applicability of the relation-back doctrine is broader than Hargrove’s view. (See id. at pp. 942-945 [citing Amaro v. Anaheim Arena Management, LLC (2021) 69 Cal.App.5^th 521, where “the Court of Appeal held that a PAGA plaintiff may release PAGA claims outside the limitations period of her own PAGA claim[,]” and Kim v. Reins International California, Inc. (2019) 32 Cal.App.5^th 736 for the proposition that, if the first plaintiff’s pre-suit notice puts the LWDA on notice of the claims, “bar[ring] the application of relation back would” harm “PAGA’s goal of strengthening Labor Code enforcement”].)

[1] “Plaintiff is Silvestre Martinez.” (Id. at p. 1 n.1.)

[2] Of course, Defendant remains free to challenge timeliness and relation back via an evidence-based motion – e.g., summary adjudication.

[3] Defendant asserts that “Sobenes’s employment ended on December 19, 2019[.]” (Defendant’s Rebuttal Brief, p. 5.) The assertion is a factual assertion, and it is contrary to paragraph 14. Again, Defendant should bring an evidence-based motion to challenge factual matters.