Judge David S. Cunningham, Case 20STCV18020 2023-04-06 Tentative Ruling

Judge: David S. Cunningham, Case: 20STCV18020, Date: 2023-04-06 Tentative Ruling

Moving Party: Jonathan Ibarra (“Ibarra”) and Jessica Nestor (“Nestor”) (collectively “Plaintiffs”)

Opposing Party: Amazon.com Services LLC (“Amazon.com”) and Amazon Logistics, Inc. (“Amazon Logistics”) (collectively “Amazon”)

Plaintiffs’ request for leave to file the third amended complaint (“TAC”) is granted.

The operative complaint “alleges that Amazon.com and Amazon Logistics hire delivery drivers from labor contractors such as Green Messengers, Inc. (‘Green Messengers’).” (12/14/22 Ruling Re: Demurrer, p. 1.) “Plaintiffs seek to represent current and former employees who purportedly were subjected to ‘wage and hour’ violations by Green Messengers, Amazon.com, and Amazon Logistics.” (Ibid.)

“On 5/8/20, Plaintiffs filed the initial complaint. It asserted seven ‘wage and hour’ class causes of action against Green Messengers and Does 1 through 100.” (Ibid.)

“On 5/11/20, Plaintiffs submitted a pre-suit PAGA notice to the [Labor and Workforce Development Agency (‘LWDA’)]. The only named Defendant discussed in the letter is [Green Messengers, Inc. (‘Green Messengers’)]. [Citation.]” (Ibid.)

“On 7/17/20, Plaintiffs filed the first amended complaint (‘FAC’). It asserted the same seven ‘wage and hour’ class causes of action and added a PAGA cause of action against Green Messengers and Does 1 through 100.” (Ibid.)

“On 5/19/21, Plaintiffs filed a Doe amendment, substituting Amazon.com for Doe 1.” (Ibid.)

“On 7/20/21, Plaintiffs filed a request to dismiss the class causes of action.” (Id. at p. 2.)

“On 7/26/21, Judge Ann Jones granted the request to dismiss, leaving the PAGA cause of action as the sole remaining cause of action.” (Ibid.)

“On 10/8/21, Plaintiffs submitted a second pre-suit PAGA notice to the LWDA, identifying Amazon.com and Amazon Logistics as named Defendants. [Citation.]” (Ibid.)

“On 4/29/22, Plaintiffs filed the SAC, which asserts a single PAGA cause of action against Green Messengers, Amazon.com, and Amazon Logistics.” (Ibid.)

On 11/2/22, Plaintiffs opposed the demurrer and motion to quash and attempted to file the TAC to reassert the class causes of action. The TAC includes a PAGA cause of action, six Labor Code causes of action (overtime wages, minimum wages, meal breaks, rest breaks, wage statements, and waiting time), and an Unfair Competition Law (“UCL”) cause of action. The clerk rejected the TAC because Plaintiffs filed it without leave.

On 12/14/22, the Court heard the demurrer and motion to quash. The Court sustained the demurrer, and granted the motion to quash, “as to alleged PAGA violations that occurred more than one year before 10/8/21” and continued the hearing “for supplemental briefing as to alleged PAGA violations that occurred no later than one year before 10/8/21.” (Id. at p. 1.) The Court also ordered supplemental briefing on whether Plaintiffs should be granted leave to file the TAC.[1]

The issue now is whether the supplemental briefs support granting or denying leave to amend.

The PAGA cause of action is time-barred. (See 12/14/22 Ruling Re: Demurrer, p. 1; see also 12/14/22 Ruling Re: Motion to Quash, p. 1; 4/6/23 Tentative Ruling Re: Supplemental Briefs Re: Demurrer and Motion to Quash, p. 1.)

Amazon contends the Labor Code causes of action are time-barred as well because the limitations period is either one year (wage statements) or three years (overtime wages, minimum wages, meal breaks, rest breaks, and waiting time), and Plaintiffs stopped working for Green Messengers and Amazon (collectively “Defendants”) more than three years before they tried to file the TAC on 11/2/22. (See Amazon’s Supp. Brief, pp. 4-6.)[2]

The Court agrees that the limitations period is either one year or three years. (See Code Civ. Proc. § 340, subd. (a) [providing a one-year limitations period for actions “for a penalty or forfeiture”]; see also id. at § 338, subd. (a) [providing a three-year limitations period for actions “upon a liability created by statute, other than a penalty or forfeiture”]; Gomez v. J. Jacobo Farm Labor Contractor, Inc. (E.D. Cal. 2019) 334 F.R.D. 234, 265 [instructing that “California law imposes a one-year statute of limitations if the plaintiff pursues wage statement penalties . . . and, alternatively, a three-year statute of limitations if the plaintiff pursues wage statement actual damages”]; Novoa v. Charter Communications, LLC (E.D. Cal. 2015) 100 F.Supp.3d 1013, 1025 [instructing that Labor Code section 226 “provides for both damages and penalties” in which case, “depending on the relief sought, a claim . . . could be subject to a one-year or a three-year limitations period”]; TAC, ¶ 53 [requesting damages and penalties for the alleged violations of section 226]; Banke & Segal, Cal. Prac. Guide: Civ. Proc. Before Tr. Stat. of Limitations (The Rutter Group 2023) ¶¶ 4:1287.10-4:1287.12 [instructing that section 338’s three-year limitations period applies to claims regarding overtime wages, minimum wages, and meal and rest breaks].)

The Court also agrees that Plaintiffs stopped working for Defendants more than three years before they tried to file the TAC on 11/2/22. (See TAC, ¶ 14 [alleging that Ibarra worked for Defendants until 8/14/19, and Nestor worked for Defendants until October 2019].)

However, the Court disagrees that the Labor Code causes of action are time-barred. According to the TAC, “California Judicial Council Emergency Rule 9” “suspended” all “statutes of limitations of more than 180 days . . . for 178 days” from 4/6/20-10/1/20. (Id. at ¶ 21.) Since the suspension took place after Plaintiffs stopped working for Defendants, 178 days must be added to the end dates of the three-year limitations period. Amazon contends Ibarra needed to file the TAC by 8/14/22, and Nestor needed to file by October 2022. (See Amazon’s Supp. Brief, p. 4.) Adding 178 days to 8/14/22 and October 2022 renders the Labor Code causes of action timely.

There is a caveat. Plaintiffs’ request for penalties under Labor Code section 226 in the sixth cause of action (wage statements) is time-barred because it is subject to a one-year limitations period. The Court strikes the request, but the request for damages should remain.

It is undisputed that the UCL cause of action is timely. (See Amazon’s Supp. Brief, pp. 4-6; see also Stern, Bus. & Prof. Code Sec. 17200 Prac. (The Rutter Group 2023) ¶ 5:290 [instructing that the statute of limitations for a UCL action is four years].)[3]

Amazon contends Plaintiffs delayed in requesting leave to amend, and Amazon will suffer prejudice if the Court allows Plaintiffs to file the TAC. (See Amazon’s Supp. Brief, pp. 6-7.)

The Court disagrees. Absent prejudice, delay is not a sufficient reason for denying leave to amend. (See Edmon & Karnow, Cal. Prac. Guide: Civ. Proc. Before Trial (The Rutter Group 2022) ¶ 6:653 supra, at ¶ 6:653 [instructing that, “[i]f delay in seeking the amendment has not misled or prejudiced the other side, the liberal policy of allowing amendments prevails”].) The amount of prejudice here is de minimis given that the Labor Code and UCL causes of action are timely, and there is no trial date set. Amazon will receive ample opportunities to conduct discovery, file motions, and prepare for trial.

Judicial policy favors amendments and should be exercised liberally. (See id. at ¶¶ 6:638.) “The policy . . . is so strong that it is a rare case in which denial of leave to amend can be justified.” (Howard v. County of San Diego (2010) 184 Cal.App.4^th 1422, 1428.) In fact, “[l]eave 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 light of these rules, because the Labor Code and UCL causes of action are timely, and because the prejudice to Amazon is negligible, the Court grants Plaintiffs leave to file the TAC.

[1] The Court incorporates the 12/14/22 rulings.

[2] The TAC alleges that “all Defendants were joint employers . . . of Plaintiffs and all members of the Classes.” (TAC, ¶ 12.)

[3] Amazon contends the class period for the UCL cause of action should be February 2019 to November 2019 because Green Messengers ceased operations on 12/1/19. (See Amazon’s Supp. Brief, p. 5.) The argument is based on a 9/30/19 letter sent by Green Messengers to the California Employment Development Department’s WARN Act Coordinator, which states that Green Messenger’s “projected last day of operation” is 12/1/19. (See Amazon’s RJN, Ex. A, emphasis added.) The letter raises a factual issue that should be deferred to the certification stage.

Moving Party: Amazon.com Services LLC (“Amazon.com”) and Amazon Logistics, Inc. (“Amazon Logistics”) (jointly “Amazon”)

Opposing Party: Jonathan Ibarra (“Ibarra”) and Jessica Nestor (“Nestor”) (jointly “Plaintiffs”)

Amazon’s demurrer is sustained, and the motion to quash is granted, as to alleged Private Attorneys General Act (“PAGA”) violations that occurred on or after 10/8/20.

On 5/8/20, Plaintiffs filed the initial complaint. It asserted seven “wage and hour” class causes of action against Green Messengers and Does 1 through 100.

On 5/11/20, Plaintiffs submitted a pre-suit PAGA notice to the [Labor and Workforce Development Agency (“LWDA”)]. The only named Defendant discussed in the letter is [Green Messengers, Inc. (“Green Messengers”)]. [Citation.]

On 7/17/20, Plaintiffs filed the first amended complaint (“FAC”). It asserted the same seven “wage and hour” class causes of action and added a PAGA cause of action against Green Messengers and Does 1 through 100.

On 5/19/21, Plaintiffs filed a Doe amendment, substituting Amazon.com for Doe 1.

On 7/26/21, Judge Ann Jones granted the request to dismiss, leaving the PAGA cause of action as the sole remaining cause of action.

On 10/8/21, Plaintiffs submitted a second pre-suit PAGA notice to the LWDA, identifying Amazon.com and Amazon Logistics as named Defendants. [Citation.]

On 4/29/22, Plaintiffs filed the SAC, which asserts a single PAGA cause of action against Green Messengers, Amazon.com, and Amazon Logistics.

(Id. at pp. 1-2, footnote omitted; see also 12/14/22 Ruling Re: Motion to Quash, p. 3 [same].)

On 12/14/22, the Court heard Amazon’s demurrer to the SAC and motion to quash. The Court sustained the demurrer, and granted the motion to quash, “as to alleged PAGA violations that occurred more than one year before 10/8/21” and continued the hearing “for supplemental briefing as to alleged PAGA violations that occurred no later than one year before 10/8/21.” (Ibid.; see also 12/14/22 Ruling Re: Motion to Quash, p. 1 [same].)[1]

The issue now is whether the supplemental briefs support sustaining the remainder of the demurer and granting the remainder of the motion to quash.[2]

Last time, the Court highlighted Johnson v. Maxim Healthcare Services, Inc. (2021) 66 Cal.App.5^th 924 sua sponte and asked whether “Plaintiffs [] have standing to bring the representative PAGA claim despite the apparent untimeliness of their individual PAGA claims.” (12/14/22 Ruling Re: Motion to Quash, p. 4; see also 12/14/22 Ruling Re: Demurrer, p. 3 [“Do Plaintiffs have standing to bring the representative PAGA claim as to alleged violations that occurred up to one year before 10/8/21 despite the apparent untimeliness of their individual PAGA claims?”].) The Court continued the hearing to give the parties a chance to brief Johnson’s applicability.

In Johnson, Gina Johnson signed a document containing a noncompetition clause. She signed the document on 9/7/16. Almost three years later on 6/19/19, she sent notice to the LWDA of her intent to file a representative PAGA action, claiming the noncompetition clause violated California law. “After 65 days lapsed without a response from the [LWDA],” she filed a lawsuit in San Diego County on 9/9/19. (Johnson, supra, 66 Cal.App.5^th at 927.)

The defendant argued that “Johnson’s individual claim was time-barred because she signed the [document] three years before she filed suit.” (Ibid.) “Johnson opposed the demurrer, contending she had standing to bring a claim under PAGA because she was an aggrieved employee and had exhausted the necessary administrative remedies.” (Ibid.) “Further, she maintained that the representative claims were not time-barred because, under PAGA, [the defendant] was subject to penalties for any of its employees who signed [the document] during the applicable period.” (Ibid.)

“[T]he superior court sustained the demurrer without leave to amend. The court determined that Johnson’s individual claim was time-barred, and, as such, she could not pursue a PAGA claim in a representative capacity.” (Ibid.)

“[T]he main issue posed by the parties on appeal [was] whether an employee, whose individual claim is time-barred, may still pursue a representative claim under PAGA.” (Id. at 929.) The Court of Appeal answered “yes” because Johnson had been an “aggrieved employee” at some point. (Id. at 929-930 [“Johnson is an ‘aggrieved employee’ with standing to pursue her PAGA claim. Johnson alleged that . . . she personally suffered at least one Labor Code violation on which the PAGA claim is based. [Citations.] The fact that Johnson’s individual claim may be time-barred does not nullify the alleged Labor Code violations nor strip Johnson of her standing to pursue PAGA remedies.”].)

(12/14/22 Ruling Re: Demurrer, pp. 3-4; see also 12/14/22 Ruling Re: Motion to Quash, pp. 4-5 [same].)

Plaintiffs and Amazon agree that Johnson is distinguishable and does not apply since Green Messengers ceased operations and dissolved prior to 10/8/20. They stipulate that Green Messengers did not “employ[] any non-exempt employees in California” on or after 10/8/20 and, thus, that Green Messengers could not have committed any Labor Code violations attributable to Amazon during the relevant time period. (Plaintiffs’ 1/27/23 Supp. Brief, p. 2 [“Plaintiffs do not disagree with Amazon that Johnson . . . is inapplicable to the instant action. Green Messengers filed a Certificate of Dissolution dated [9/8/20] and therefore, Plaintiffs do not believe that Green Messengers employed any non-exempt employees in California after [10/8/20]. . . . [T]he holding does not affect Amazon’s liability in the instant action.”], emphasis in original, underlined case name added; see also Amazon’s 1/13/23 Supp. Brief, p. 2 [“Because Green Messengers was no longer operating in California and indeed did not exist after September 2020, it accordingly did not have any non-exempt California employees who worked on or after [10/8/20], and there were no pay periods after that date for Green Messengers to commit PAGA violations under the Labor Code. As such, Plaintiffs cannot point to any alleged PAGA violations that would not be time-barred as to Amazon, under the Court’s holding that the PAGA notice naming Amazon ‘is untimely as to alleged violations that happened more than one year before 10/[8]/21.’”].)

Accordingly, the demurrer is sustained, and the motion to strike is granted, as to alleged PAGA violations that occurred on or after 10/8/20.

Whether Plaintiffs should be granted leave to file a TAC to reassert the class causes of action is an independent issue that does not bear on the outcome of the PAGA cause of action. The Court reiterates that it will analyze this issue in a separate tentative ruling.

[1] The Court incorporates the 12/14/22 rulings.

[2] The supplemental briefs address an additional issue – whether Plaintiffs should be granted leave to file a third amended complaint (“TAC”) to reassert the class causes of action. The Court will analyze this issue in a separate tentative ruling.