Judge Teresa A. Beaudet, Case BC695541 2023-04-03 Tentative Ruling

YULIANA VALDOVINOS,

Plaintiff,

vs.

ADIR INTERNATIONAL, LLC dba LA

CURACAO, et al.

Defendants.

Case No.:

BC695541

Hearing Date:

April 3, 2023

Hearing Time: 10:00 a.m.

[TENTATIVE] ORDER RE:

DEFENDANTS ADIR INTERNATIONAL, LLC dba CURACAO AND ERIC VITAL RUBIO’S AMENDED MOTION TO STRIKE PLAINTIFF’S COMPLAINT

On February 27, 2018, Plaintiff Yuliana Valdovinos, an individual, on behalf of herself and all others similarly situated (“Plaintiff”) filed this action against Defendants Adir International, LLC dba Curacao (“Adir”), Alex Hernandez, and Eric Vital Rubio (“Rubio”). The Complaint asserts a number of causes of action. The fifteenth cause of action is for recovery of civil penalties pursuant to the California Private Attorneys General Act (“PAGA”).

Adir and Rubio (jointly, “Defendants”) now move for an order striking Plaintiff’s fifteenth cause of action and the associated prayer for penalties. Plaintiff opposes.

A court may strike any “irrelevant, false, or improper matter inserted in any pleading” or any part of a pleading “not drawn or filed in conformity with the laws of this state, a court rule, or an order of the court.” ((Code Civ. Proc., § 436.)

Defendants move for an order striking Plaintiffs’ “Fifteenth Cause of Action for Recovery of Civil Penalties under the Private Attorneys General Act (‘PAGA’), and associated prayer for penalties.” (Notice of Mot. at p. 1:24-26.) Defendants argue that the fifteenth cause of action should be stricken because it is unmanageable.

Defendants cite to Wesson v. Staples the Off. Superstore, LLC (2021) 68 Cal.App.5th 746, 765, where the Second District Court of Appeal concluded that “courts have inherent authority to ensure that PAGA claims can be fairly and efficiently tried and, if necessary, may strike a claim that cannot be rendered manageable.” The Wesson Court noted that
“[u]nder PAGA, an aggrieved employee may recover civil penalties for Labor Code violations on behalf of himself or herself and other current or former employees…A PAGA action may thus cover a vast number of employees, each of whom may have markedly different experiences relevant to the alleged violations. Under those circumstances, determining whether the employer committed Labor Code violations with respect to each employee may raise practical difficulties and may prove to be unmanageable.” ((Id. at pp. 765-766 [internal quotations and citations omitted].)

Here, Defendants assert that “[o]ver the course of the PAGA limitations period, Adir has employed 3,475 employees. These employees work across ten retail stores in Southern California, as well as three other locations in Tucson, Phoenix, and Las Vegas.” (Mot. at p. 2:21-24; Chung Decl., ¶¶ 3-4, 10, Ex. A (Pedroza Depo.) at pp. 29:15-25, 30:1-9.) Defendants state that Adir currently employs approximately 1,200 individuals. (Chung Decl., ¶ 10, Ex. A (Pedroza Depo.) at p. 33:10-12.)

Defendants assert that “Adir’s non-exempt employees span dozens of distinct and varied job titles and positions. General non-exempt job categories encompassed in this matter include laborers and sales associates in a wide variety of departments…Each position and department is unavoidably distinct and individualized, and overseen by different supervisors.” (Mot. at p. 3:1-6; Chung Decl., ¶ 5.) Defendants contend that “[e]ven narrowing the witness list to 50% of the universe of potentially aggrieved employees, the parties will have to call and subpoena at least 1,737 witnesses to testify at trial…” (Mot. at p. 4:4-6; Chung Decl., ¶ 7) Defendants assert that “[c]onservatively estimating that each witness examination will take 2 hours total for direct, cross-examination, and re-direct, including the review of exhibits, the Court will have to reserve at least 3,475 hours for trial. At 5 hours of actual trial time per day, the trial for the instant action will require a minimum of 695 days.” (Mot. at p. 4:10-13; Chung Decl., ¶ 9.)

As an initial matter, Plaintiff asserts that Defendants cannot show that there are manageability concerns on a motion to strike, because “[t]he grounds for a motion to strike shall appear on the face of the challenged pleading or from any matter of which the court is required to take judicial notice.” ((Code Civ. Proc., § 437.) As set forth above, Defendants rely on their counsel’s declaration and other evidence in support of the motion. Defendants do not appear to address this point in the reply. However, the Court notes that in Wesson, the Court of Appeal “conclude[d] that courts have inherent authority to ensure that a PAGA claim will be manageable at trial—including the power to strike the claim, if necessary—and that this authority is not inconsistent with PAGA’s procedures and objectives, or with applicable precedent.” (Wesson v. Staples the Office Superstore, LLC, supra, 68 Cal.App.5th at pp. 762-763.)

Plaintiff also asserts that Wesson is “inapplicable to the situation here, where there are no misclassification claims, there is no class certification requirement…no evidentiary record, no agreement on factual issues, and no agreement on trial issues.” (Opp’n at p. 4:4-6.) In Wesson, “[e]ach of Wesson’s claims was premised on the theory that Staples had misclassified its California GMs as exempt executives (who are not entitled to overtime pay and off-duty meal and rest periods), when in fact they should have been classified as nonexempt, hourly employees. Wesson moved to certify a class of Staples California GMs, but the trial court denied the motion, concluding he had not demonstrated that his claims were susceptible to common proof.” (Wesson v. Staples the Office Superstore, LLC, supra, 68 Cal.App.5th at p. 757.)

“[T]he parties estimated they would need a total of six trial days per GM to litigate GMs’ classification as exempt executives on an individual basis. Based on that estimate, the trial would have lasted eight years.” (Wesson v. Staples the Office Superstore, LLC, supra, 68 Cal.App.5th at p. 758.) In addition, “[t]he trial court invited Wesson to submit a trial plan showing that his PAGA action would be manageable at trial. In response, Wesson continued to insist that the court lacked authority to require that his claim be manageable, and laid out his plan to prove his prima facie case using common proof, but declined to address how the parties could litigate Staples’s affirmative defense. Following this response, the court concluded that the PAGA claim could not be managed at trial and granted Staples’s motion to strike it.” (Id. at pp. 755-756.) The Court of Appeal found that the trial court “did not abuse its discretion in striking his PAGA claim as unmanageable.” (Id. at p. 756.)

Plaintiff asserts that this case is also distinguishable from Wesson because the Court here has not ordered Plaintiff to file a PAGA trial plan demonstrating manageability.

In addition, Plaintiff contends that her PAGA claim is manageable. She asserts that “a number of Plaintiff’s claims including Plaintiffs’ meal period, overtime, wage statement, and derivative claims can be determined based simply upon Plaintiff’s expert analysis of Defendants’ timekeeping, payroll records and witness testimony from a company representative. Plaintiff’s remaining claims can be adjudicated based on representative evidence.” (Opp’n at p. 6:11-14.) Specifically, Plaintiff asserts that “Plaintiffs’ rest break and reimbursement claims can be fairly and efficiently tried based on representative survey evidence, coupled with evidence of Defendants’ policies and examination of Defendants’ payroll records.” (Opp’n at p. 6:17-19.)

Plaintiff cites to Donohue v. AMN Services, LLC (2021) 11 Cal.5th 58, 77, where the California Supreme Court noted that “[i]f time records show missed, short, or delayed meal periods with no indication of proper compensation, then a rebuttable presumption arises. Employers can rebut the presumption by presenting evidence that employees were compensated for noncompliant meal periods or that they had in fact been provided compliant meal periods during which they chose to work. Representative testimony, surveys, and statistical analysis, along with other types of evidence, are available as tools to render manageable determinations of the extent of liability.” (Internal quotations omitted.) Plaintiff argues that “Defendants do not have to prove on an individualized basis that they provided compliant meal periods to every aggrieved employee.” (Opp’n at p. 5:11-12.)

Defendants counter that Donahue does not place any limitations as to how Defendants can rebut the presumption set forth by noncompliant records, such that Defendants cannot be required to rely solely on representative testimony, surveys, and statistical analysis to rebut the presumption of liability. Indeed, Plaintiff does not appear to assert that this is a requirement.

Plaintiff also asserts that Defendants are not entitled to litigate their affirmative defenses as to each individual aggrieved employee. In support of this assertion, Plaintiff cites to Duran v. U.S. Bank National Assn. (2014) 59 Cal.4th 1, 38, where the California Supreme Court noted that “[n]o case, to our knowledge, holds that a defendant has a due process right to litigate an affirmative defense as to each individual class member. However, if liability is to be established on a classwide basis, defendants must have an opportunity to present proof of their affirmative defenses within whatever method the court and the parties fashion to try these issues. If trial proceeds with a statistical model of proof, a defendant accused of misclassification must be given a chance to impeach that model or otherwise show that its liability is reduced because some plaintiffs were properly classified as exempt.”

Lastly, Plaintiff cites to Estrada v. Royalty Carpet Mills, Inc. (2022) 76 Cal.App.5th 685, 711, where the Fourth District Court of Appeal noted that “we respectfully disagree with Wesson and agree with the reasoning of the district courts that have refused to dismiss PAGA claims based on manageability.” The Estrada Court concluded that “a court cannot dismiss a PAGA claim based on manageability.” ((Id. at p. 710.)

In light of the fact that the California Supreme Court has granted the petition for review in Estrada, the Court is inclined to continue the hearing on the instant motion. Moreover, the Court agrees with Defendants that the opposition does not address with sufficient detail how Plaintiff proposes to manage her PAGA claim at trial. In Wesson, the trial court “invited Wesson to submit a trial plan showing that his claim would be manageable, and permitted him to file a supplemental brief in opposition to Staples’s motion.” (Wesson v. Staples the Office Superstore, LLC, supra, 68 Cal.App.5th at p. 758.)

Based on the foregoing, the Court continues the hearing on Defendants’ motion to strike to ___________________, 2023 at 10:00 a.m.

Plaintiff may file a supplemental brief in opposition to Defendants’ motion to strike setting forth a trial plan to show that her PAGA cause of action would be manageable. Defendants may file a supplemental reply. Any supplemental opposition and reply papers must be filed and served per Code of Civil Procedure section 1005, subdivision (b) based on the new hearing date.

Superior Court of California

County of Los Angeles

Department 50