Judge Teresa A. Beaudet, Case Number: 24STCV15825, Date: 2024-10-30 Tentative Ruling

STEFAN RICHTER, individually, and on behalf of Aggrieved Employees pursuant to the California Private Attorneys General Act, Plaintiff, vs. DELUXE MEDIA, INC., et al., Defendants.	Case No.:	24STCV15825
	Hearing Date:	October 30, 2024
	Hearing Time:	10:00 a.m.
	[TENTATIVE] ORDER RE: DEFENDANT’S MOTION TO DISMISS OR STAY ALL PROCEEDINGS OR, IN THE ALTERNATIVE, DEMURRER

On June 24, 2024, Plaintiff Stefan Richter, individually, and on behalf of Aggrieved Employees pursuant to the California Private Attorneys General Act (“Plaintiff”) filed the instant action against Defendant Deluxe Media, Inc. (“Defendant”). The Complaint alleges one cause of action for violation of Labor Code section 2699, et seq.

Defendant now moves for an order dismissing or staying all proceedings in this action. In the alternative, Defendant demurs to the sole cause of action of the Complaint. Plaintiff opposes.[1]

The Court grants Defendant’s request for judicial notice as to “Exhibit 1” attached to the request.[2]

First, Defendant asserts that “the Court should apply the doctrine of exclusive concurrent jurisdiction to stay this PAGA action.” (Mot. at p. 4:17-18.)

Defendant cites to Shaw v. Superior Court (2022) 78 Cal.App.5th 245, 255-256, where the Court of Appeal noted that “[l]ong before the Legislature enacted PAGA, California recognized the judge-made doctrine of exclusive concurrent jurisdiction. Under this doctrine, when two or more courts have subject matter jurisdiction over a dispute, the court that first asserts jurisdiction assumes it to the exclusion of the others. The rule is based upon the public policies of avoiding conflicts that might arise between courts if they were free to make contradictory decisions or awards relating to the same controversy and preventing vexatious litigation and multiplicity of suits. The rule is a judicial rule of priority or preference and is not jurisdictional in the traditional sense of the word, in that it does not divest a court, which otherwise has jurisdiction of an action, of jurisdiction. Because it is a policy rule, application of the rule depends upon the balancing of countervailing policies.” (Internal quotations and citations omitted.)

The Shaw Court noted that “[a]lthough the rule of exclusive concurrent jurisdiction is similar in effect to the statutory plea in abatement [Code Civ. Proc., § 430.10, subd. (c)], it has been interpreted and applied more expansively, and therefore may apply where the narrow grounds required for a statutory plea [in] abatement do not exist…Unlike the statutory plea [in] abatement, the rule of exclusive concurrent jurisdiction does not require absolute identity of parties, causes of action or remedies sought in the initial and subsequent actions…If the court exercising original jurisdiction has the power to bring before it all the necessary parties, the fact that the parties in the second action are not identical does not preclude application of the rule. Moreover, the remedies sought in the separate actions need not be precisely the same so long as the court exercising original jurisdiction has the power to litigate all the issues and grant all the relief to which any of the parties might be entitled under the pleadings.” ((Id. at p. 256 [internal quotations omitted].) “It has been said that [a]n order of abatement issues as a matter of right where the conditions for its issuance exist, whether the right to abate exists under statutory abatement or the judicial rule of exclusive concurrent jurisdiction. Where the exclusive concurrent jurisdiction rule applies, the second action should be stayed.” ((Id. at pp. 256-257 [internal quotations and citations omitted].)

Defendant notes that on April 22, 2024, the case Stefan Richter v. Deluxe Media Inc., et al., Case No. 24STCV09998 was filed in the Los Angeles County Superior Court (herein, the “April 2024 Action”). (Defendant’s RJN, Ex. 1.) Defendant’s counsel states that “the class action case entitled Richter v. Deluxe Media Inc., filed by Plaintiff in the Superior Court of the State of California, County of Los Angeles on April 22, 2024” was “removed by Defendant to the United States District Court, Central District of California On June 7, 2024, Case No. 2:24-cv-04835-MRA-MRW…” (Knotz Decl., ¶ 1.)

Plaintiff asserts that the instant action and the April 2024 Action are “nearly identical.” (Mot. at p. 6:7.) The Plaintiff in the instant action is Stefan Richter, “individually, and on behalf of Aggrieved Employees pursuant to the California Private Attorneys General Act.” The Plaintiff in the April 2024 Action is Stefan Richter, individually, and on behalf of other similarly situated employees. (Defendant’s RJN, Ex. 1.) The defendant named in both the instant action and the April 2024 Action is Deluxe Media, Inc. (Defendant’s RJN, Ex. 1.)

(g) Violation of California Labor Code section 204 for failure to timely pay wages to Plaintiff and Aggrieved Employees during employment, as set forth more fully before;

(i) Violation of California Labor Code section 226(a) for failure to provide accurate wage statements to Plaintiff and Aggrieved Employees, as set forth more fully below;

(j) Violation of California Labor Code section 1174(d) for failure to keep complete and accurate payroll records relating to Plaintiff and Aggrieved Employees, as set forth more fully below; and

(k) Violation of California Labor Code sections 2800 and 2802 for failure to reimburse Plaintiff and Aggrieved Employees for necessary business-related expenses, as set forth more fully below.” (Compl., ¶ 34.)[3]

Thus, it appears that most all of the Labor Code violations alleged in the instant action overlap with the Labor Code violations alleged in the April 2024 Action. As noted by Defendant, Plaintiff does not appear to dispute that the alleged Labor Code violations in the two actions are the same.

Defendant asserts that “[g]iven that Plaintiff’s PAGA claim is entirely dependent on the Labor Code claims he brought on behalf of himself and all hourly-paid/non-exempt current and former California employees in the [April 2024 Action], the Court’s rulings with respect to Defendant’s potential liability on any one of the wage and hour issues presented in this PAGA Action could easily contradict the Central District’s rulings in the [April 2024 Action].” (Mot. at p. 6:11-15.) Defendant also asserts that “[t]he Court and the Parties would…waste time and resources concurrently litigating virtually identical claims and issues in parallel forums.” (Mot. at p. 6:19-20.)

In the opposition, Plaintiff asserts that “the Court should not apply the doctrine of exclusive concurrent jurisdiction to stay this PAGA action.” (Opp’n at p. 4:1-2.) Plaintiff asserts that “the federal court overseeing the [April 2024 Action] does not possess subject matter jurisdiction over the claims at issue in this PAGA Action brought on behalf of the State of California…” (Opp’n at p. 5:4-6.) But Plaintiff does not appear to cite any legal authority to support this proposition or provide any further analysis regarding this assertion.

Plaintiff also asserts that “[e]ven assuming arguendo that the doctrine of exclusive concurrent jurisdiction may apply here, contravening policies fundamental to the State of California outweigh Defendant’s negligible and overwrought concerns. As noted above, the California Legislature’s enactment of PAGA was designed to benefit the general public…” (Opp’n at p. 6:4-7.) Plaintiff asserts that “the real party at-issue in this PAGA Action is the State of California, unlike in the [April 2024 Action] where the real parties at-issue are Plaintiff and putative class members. Moreover, the relief sought in this PAGA Action—civil penalties—are meant to primarily benefit the public, whereas the relief sought in the Class Action is meant to benefit Plaintiff and the putative class members in the form of wages and monies owed.” (Opp’n at p. 6:16-20.) Plaintiff cites to Kim v. Reins International California, Inc. (2020) 9 Cal.5th 73, 86, where the California Supreme Court noted that “[t]he Legislature’s sole purpose in enacting PAGA was to augment the limited enforcement capability of the [LWDA] by empowering employees to enforce the Labor Code as representatives of the Agency. Accordingly, a PAGA claim is an enforcement action between the LWDA and the employer, with the PAGA plaintiff acting on behalf of the government…Moreover, civil penalties recovered on the state’s behalf are intended to remediate present violations and deter future ones, not to redress employees’ injuries.” (Internal quotations, citations, and emphasis omitted.)

But as noted by Defendant, “the rule of exclusive concurrent jurisdiction does not require absolute identity of parties, causes of action or remedies sought in the initial and subsequent actions.” ((Shaw v. Superior Court, supra, 78 Cal.App.5th at p. 256.) Moreover, in Shaw, the Court of Appeal noted that “[t]he trial court recognized, as have we, that application of the exclusive concurrent jurisdiction rule here did not vitiate the purposes for which PAGA was enacted. It additionally recognized that resolution of this case would duplicate court efforts, waste resources, and potentially produce divergent results. The trial court could reasonably conclude that the policies giving rise to the exclusive concurrent jurisdiction rule were not outweighed by those that drove PAGA’s enactment.” (Id. at p. 262.)[4] The Shaw Court further noted that “[w]hile the Legislature sought to maximize code enforcement and deter future violations, we do not discern an intent in PAGA to waste judicial resources, encourage a multiplicity of duplicative suits, and prohibit courts from staying suits that might otherwise lead to inconsistent results. PAGA and the exclusive concurrent jurisdiction rule can rationally coexist, and so they must.” (Id. at p. 260.)

In the opposition, Plaintiff also argues that “[t]o illustrate another example showing why the doctrine of exclusive concurrent jurisdiction is inapplicable here: a potential denial of certification of the class in the [April 2024 Action] if it were found to lack commonality and/or even typicality, would not preclude Plaintiff from pursuing – let alone have any effect on – this PAGA Action.” (Opp’n at p. 7:6-9.) The Court does not see how this is relevant to the exclusive concurrent jurisdiction analysis here. As discussed, “[t]he rule is based upon the public policies of avoiding conflicts that might arise between courts if they were free to make contradictory decisions or awards relating to the same controversy and preventing vexatious litigation and multiplicity of suits.” (Shaw v. Superior Court, supra, 78 Cal.App.5th at p. 255.)

Based on the foregoing, the Court agrees with Defendant that a stay is warranted, particularly to avoid inconsistent rulings. Thus, the Court grants Defendant’s motion to stay the instant action “pending resolution of” the April 2024 Action. (Mot. at p. 4:13).[5]

The Court sets a status conference on ___________________ at 10:00 a.m. in Dept. 50. The parties are ordered to file a joint report regarding the status of the April 2024 Action five court days prior to the status conference, with a courtesy copy delivered directly to Department 50.¿¿

[1]As an initial matter, Plaintiff notes that Defendant’s memorandum of points and authorities in support of the motion exceeds the applicable page number limit set forth in California Rules of Court, rule 3.1113, subdivision (d). This provision provides, inter alia, that “[e]xcept in a summary judgment or summary adjudication motion, no opening or responding memorandum may exceed 15 pages.” (Cal. Rules of Court, Rule 3.1113, subd. (d).) Defendant’s memorandum of points and authorities in support of the motion is 16 pages. Accordingly, the Court disregards the sixteenth page of Defendant’s memorandum. The Court declines to reject Defendant’s motion in its entirety, as Plaintiff requests.

[2]The Court notes that Defendant’s RJN states that Exhibit 1 is the “Complaint in Richter v. Deluxe Media Inc., Case No. 2:24-cv-04835-MRA-MRW, currently pending in the United States District Court, Central District of California.” However, Exhibit 1 to Defendant’s RJN shows a Complaint captioned Stefan Richter v. Deluxe Media Inc., et al., Case No. 24STCV09989, filed in the Los Angeles County Superior Court.

[3]Defendant asserts that “[n]otably, the only claim in the PAGA Complaint that is not in the Class Action Complaint is the claim for failure to keep accurate payroll records under Labor Code Section 1174(d), a claim that is entirely derivative of the underlying Labor Code violations (e.g., failure to provide accurate records of hours worked and meal periods) and thus does not raise any new issues of law or fact.” (Mot. at p. 4:2-5, emphasis omitted.) Defendant cites to paragraph 86 of the Complaint in the instant action, which alleges that “Defendants intentionally and willfully failed to keep accurate and complete payroll records showing the hours worked daily and the wages paid to Plaintiff and the Aggrieved Employees.” (Compl., ¶ 86.)

[4]In Shaw, “Petitioners brought a representative suit under the Labor Code Private Attorneys General Act of 2004 (PAGA)…They conceded that their suit arises from the same facts and theories as another PAGA action pending in Los Angeles. While their petition for judicial coordination…with the Los Angeles PAGA suit was pending, the trial court in this case stayed petitioners’ suit. After the petition for coordination was denied, the trial court denied petitioners’ motion to lift the stay, concluding that the stay was warranted under the doctrine of exclusive concurrent jurisdiction.” (Shaw v. Superior Court, supra, 78 Cal.App.5th at p. 251.) The Court of Appeal found that “the trial court did not err in applying the exclusive concurrent jurisdiction rule to this dispute.” (Ibid.)

[5]In light of the foregoing, the Court need not and does not address Defendant’s remaining alternative arguments in the motion.

Superior Court of California

County of Los Angeles

Department 50