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1 Timothy J. Long (SBN 137591) FILED
Samuel S. Hyde (SBN 327065)
2 GREENBERG TRAURIG, LLP
1201 K Street, Suite 1100
3 Sacramento, CA 95814 MAR - 5 2020
Telephone: 916.442.1111
4 Facsimile: 916.448.1709
longt@gtlaw.com By:
5 hydes@gtlaw.com
6 Rowena Santos (SBN 210185)
GREENBEiRG TRAURIG, LLP \p\Wf\
7 18565 Jamboree Road, Suite 500
Irvine, CA 92612
8 Telephone: 949.732.6500
Facsimile: 949.732.6501
9 santosr@gtlaw.com
10 Attomeys for Defendant
HEALTH NET OF CALIFORNIA, INC.
11
12 SUPERIOR COURT OF THE STATE OF CALIFORNIA
13 COUNTY OF SACRAMENTO
14 ANDREA SPEARS, an individual, on behalf Consolidated Case No. 34-2017-00210560-
15
of herself and on behalf of all persons CU-OE-GDS (ConsoUdated with Case No. X
similarly situated. 34-2017-00216685-CU-OE-GDS) <
Plaintiff,
16
MEMORANDUM OF POINTS AND
17 AUTHORITIES IN SUPPORT OF
HEALTH NET OF CALIFORNIA, INC.
HEALTH NET OF CALIFORNIA, INC., a MOTION TO STRIKE PLAINTIFF
18 Califomia Corporation; and Does 1 through TOMAS R. ARANA'S
>
50, inclusive. REPRESENTATIVE PAGA CLAIMS
19
Defendants. Date: April 3,2020
20 Time: 1:30 p.m.
Dept: 41
21 Judge: Hon. David De Alba
22 Complaint Filed: April 5,2017
FAC Filed: June 29, 2017
23
TOMAS R. ARANA, on behalf of himself, all
24 others similarly situated,
25 Plaintiff,
26
HEALTH NET OF CALIFORNIA, INC., a
27 Califomia corporation; and DOES 1-50,
inclusive, Complaint Filed: August 1,2017
28 Defendant. Consolidated Complaint Filed: Dec. 21,2017
MEMORANDUIVI OF POINTS AND AUTHORITIES ISO
MOTION TO STRIKE ARANA'S REPRESENTATIVE PAGA CLAIMS
'SC
1 TABLE OF CONTENTS
2 Page
3
4 I. Introduction ^ 5
II. Factual and Procedural Background 5
A. Arana Sends His Written Notice To The LWDA 5
B. Plamtiffs File A Consolidated Complaint 6
7 C. The Court Denied Plaintiffs' Motion To Certify Their Meal Break, Rest
Break, And Off-the-Clock Claims 6
8 D. The Court Deferred Ruling On HNCA's Motion Attacking Arana's PAGA
Claims ; 8
9
E. Plaintiffs Submit Their Trial Plan And Attempt To Re-Craft Their PAGA
10 Claims ,.8
III. Argument 9
A. There Is No Procedural Impediment To The Court's Resolving HNCA's
12 Motion, And The Court Has The Power To Grant It 9
13 B. The Court Should Strike Arana's Rest Break Claim 9
C. The Court Should Strike Arana's New Meal Period PAGA Claim Based
14 On Judicial Estoppel , , , 9
D. The Court Should Strike Arana's New Meal Period PAGA Claim, As Well
15 As His New EMPCenter PAGA Claim, Because He Failed to Exhaust
^g Those Claims 11
1. Plaintiffs' Meal Period Claim Premised On The "DTO" Code Was
17 Not Mentioned In Arana's LWDA Notice 12
18 2. Arana Did Not Exhaust His EMPCenter PAGA Claim 12
E. Arana's Off The Clock Claim, Both His Old And New Meal Period
19 Claims, And The EMPCenter PAGA Claim Are Tune-Barred 13
20 F. Because Arana Has No Viable PAGA Claims, He Lacks Standing To
Continue Litigating On Behalf Of Others 14
21 G. Because None OfArana's Stand-alone PAGA Claims Can Proceed,
Neither Can Any Derivative Claims , 15
22 H. In The Altemative, The Court Should Strike Arana's PAGA Claims
Because They Present Insurmountable Manageability Problems 15
23
1. Neither PAGA Claim Related to Whether Employees Ever
24 Performed Work Off the Clock Can Be Manageably Tried 17
25 2. Arana's Meal Period PAGA Claim Is Similarly Unmanageable 18
3. Arana's Miscalculation PAGA Claim Is Unmanageable 18
26 IV. Conclusion .-. 20
27
28
MEMORANDUM OF POINTS AND AUTHORITIES ISO
MOTION TO STRIKE ARANA'S REPRESENTATIVE PAGA CLAIMS
1 TABLE OF AUTHORITIES
2 Page(s)
•I
Cases
^ Aguilar v. Lerner,
5 32 Cal. 4th 974 (2004) , 11
6 Amaral v. Cintas Corp. No. 2,
163 Cal. App. 4th 1157 (2008) 18
7 Arias v. Superior Court,
8 46 Cal. 4th 969 (2009) 11
Q
Bronco Wine Co. v. Frank A. Logoluso Farms,
10 214 Cal. App. 3d 699 (1989) 16
11 Brown v. Ralphs Grocery Co.,
28 Cal. App. 5th 824 (2018) 11,12,13
12 Caliber Bodyworks, Inc. v. Superior Court,
134 Cal. App. 4th 365 (2005) 11
13
Esparza v. Safeway, Inc.
15 36 Cal. App. 5th 42 (2019)., , ...14
16 Gordon v. Aerotek, Inc.,
2017 WL 8217410 (CD. Cal. Oct. 12,2017) .......14
17
Hanna v. L.A. Cty. Sheriff's Dep't,
18 102 Cal. App. 4th 887 (2002) ,.9
^^ Jackson V. County of Los Angeles,
60 Cal. App. 4th 171 (1997)..; ; ..9
20
21 Jones v. Gen. Elec. Co.,
2019 WL 1599183 (N.D. Cal. Apr. 15,2019) .,,.14
22
Levin v. Ligon,
23 140 Cal. App. 4th 1456 (2006) , .11
24 Ling V. P.F. Chang's China Bistro, Inc.,
2^ 245 Cal. App. 4th 1242 (2016) , ; 15
Naranjo v. Spectrum Sec. Servs., Inc.,
40 Cal. App. 5th 444 (2019) 15
27 "
28
MEMORANDUM OF POINTS AND AUTHORITIES ISO
MOTION TO STRIKE ARANA'S REPRESENTATIVE PAGA CLAIMS
1 South Bay Chevrolet v. General Motors Acceptance Corp.,
2 12 Cal. App. 4th 861 (1999) 16,17
Spears v. Health Net of California, Inc.,
Case 6,7
4
Thomas v. Home Depot USA Inc.,
5 527 F. Supp. 2d 1003 (N.D. Cal. 2007) 14
6 Williams v. Superior Court,
^ 3 Cal. 5th 531 (2017) , ..14,15
Statutes
^ 29 U.S.C. § 207(e)(3) , 20
10 Cal. Lab. Code § 2699(a) 14
11 Califomia Labor Code: (1) , , ...5
12 Patient Protection and Affordable Care Act 19
13 Other Authorities
14 29 C.F.R. § 778.211 19
1^ Merriam-Webster Online Dictionary, http://www.merriam-webster.com (Mar. 5,
16 2020) ; ....10
17
18
19
20
21
22
23
24
25
26
27
28
MEMORANDUM OF POINTS AND AUTHORITIES ISO
MOTION TO STRIKE ARANA'S REPRESENTATIVE PAGA CLAIMS
1 I. INTRODUCTION
2 On December 21,2018, and pursuant to a stipulated court order, Defendant Heath Net of
3 Califomia ("HNCA") filed a motion attacking Plaintiff Tomas Arana's ("Arana") PAGA claims
4 (the "December 21 Motion"). Arana did not oppose tlie December 21 Motion. The Court,
5 however, deferred mling on that motion to allow Arana and co-Plaintiff Andrea Spears ("Spears,"
6 and collectively "Plaintiffs") to submit a trial plan as to all claims at issue, and specifically held
7 that HNCA could renew its motion at a later date. Plaintiffs havefiledtheir proposed trial plan
8 ("Trial Plan") pursuant to this Court's order. HNCA therefore renews its motion, incorporates by
9 reference its priorfilingsand all the supporting papers (as permitted by Court order), and includes
10 additional arguments prompted by Plaintiffs' Trial Plan.
11 Arana's PAGA claims should be stricken in their entirety for several reasons. He lacks
12 standing as he was an exempt employee during the relevant PAGA period, and is therefore not an
13 "aggrieved employee" for purposes of PAGA; any claims arisingfiromhis time as a non-exempt
14 employee are barred by the statute of limitations; he failed to exhaust the administrative process
15 (as to his regular rate, meal period, and off-the-clock PAGA claims); he has abandoned his PAGA
16 rest break claim; he is judicially estoppedfi-omtrying to re-craft his meal period PAGA claim;
17 and whether old or re-crafted, Arana's PAGA claims are urmianageable.
18 n. FACTUAL AND PROCEDURAL BACKGROUND
19 A. Arana Sends Hiii Written Notice To The LWDA
20 On May 9,2017, Aranafiledhis Written Notice with the Labor and Workforce
21 Development Agency ("LWDA"). Arana alleged six stand-alone violations of the Califomia
22 Labor Code: (1) an alleged rounding policy that resulted in employees' time being inaccurately
23 recorded and, as a result, inaccurately paid;' (2) HNCA improperly classified certain employees
24 as being exemptfi-omovertime;^ (3) HNCA incorrectly calculated employees' regular rate of pay
25 by failing to include non-discretionary bonuses and "other remuneration" in that rate;^ (4) HNCA
26
' The Court granted summary adjudication on the rounding claim. Declaration of Timothy J. Long ("Long Decl.")
27 ^ 9, Ex. H.
^ Arana later withdrew this claim. Id. ^6, Ex. E.
28 3 Arana has also withdrawn this claim. Id.
5
MEMORANDUM OF POINTS AND AUTHORITIES ISO
MOTION TO STRIKE ARANA'S REPRESENTATIVE PAGA CLAIMS
1 knew or should have known that employees were working off the clock and were not being
2 compensated for that time; (5) HNCA failed to provide meal breaks; and (6) HNCA failed to
3 provide rest breaks. Long Decl. ^ 4, Ex. C. In addition, Arana alleged a number of derivative
4 claims, including (1) a failiu*e to pay premium wages at the regular rate; (2) a failure to provide
5 accurate written wage statements; and (3) a failure to timely providefinalwages to discharged
6 employees. Id. Arana's LWDA Notice did not allege that "MedFlxWave" payments,
7 "DenFlxWave" payments, SPOT Awards, ACA Incentive Payments, or Wellness Incentive
8 Payments should have been included in the regular rate of pay calculation.'' See generally id.
9 B. Plaintiffs FUe A Consolidated Complaint
10 On October 11,2017, Arana's lawsuit was ordered consolidated for all purposes with
11 Spears v. Health Net of California, Inc., Case no. 34-2017-00210560, with co-PIaintiflf Andrea
12 Spears' ("Spears") lawsuit designated as lead case. RA 17.^ A detailed description of the claims
13 alleged in the Consolidated Complaint is set forth in the Motion to Strike Spears' Representative
14 PAGA Claimsfiledconcurrently herewith, and is incorporated herein by reference.
15 C. The Court Denied Plaintiffs* Motion To Certify Their Meal Break. Rest
Break. And Off-thc-Clock Claims
16
17 On December 21,2018, Plaintiffs sought to certify three core claims: denial of meal
18 periods, djenial of rest breaks, and failure to compensate employees for off-the clock work. RA
19 307. The Court (Judge Perkins) denied class certification as to these claims, with a limited
20 exception for an issue class,findingin essence that the claims could not be established by
21 common proof and thus did not lend themselves to class treatment. RA439. The Court mled in
22 relevant part as follows:
23 ... [T]he Court doe? notfinda well-defined comrniinity of interest
on each claim, because it cannot be fouhd on this record that the
24 issues which may be jointly tried pn each claitn, when compaired
with those appearing by the evidence to require separate
25 individualized adjtidQcation, are so numerous or substantial that the
niaihteinance of a class action would be advantageous to the judicial
26 process and to putative class.
27 " -.-
* A summary of the claims that comprise what Plaintiffs now refer to as their Miscalculation Claim can be found in
28 HNCA's Objections to Plaintiffs' Trial Plan,filedconcurrently with this motion.
' Throughout this brief, citations are to the Register of Actions ("RA") in this case.
6
MEMORANDUM OF POINTS AND AUTHORITIES ISO
MOTION TO STRIKE ARANA'S REPRESENTATIVE PAGA CLAIMS
1 Id at 4.
2 With respect to the meal period claim, the Court determined that common issues did not
3 predominate. The evidence established that
4 HNCA provided employees with a 30-minute meal period before
theirfifthhour of work, and employees who missed meal periods
5 received appropriate penalties. Plaintiff testified that he
"understood that the company's policy was that [he] [was] to be
6 provided with 30-minute- at least 30 minute lunches during which
[he] [was] not supposed to be doing any work," as well as second
7 meal periods for shifts that went longer than 11 hours (unless
waived)... Thus... Plaintiffs theory of common meal period
8 violation is not that HNCA's relevant policy was unlawfid. Instead,
Plaintiffs theory is that the meal period violations at issue in this
9 action were cause by HNCA's "lack of enforced policies designed
to advise the Class of their recourse when the demands of their
10 employer interfered with the ability to take breaks..." Plaintiffs
theory is also premised upon break violations caused by pressures
11 ofthe employees' work. Read liberally, the Plaintiffs claim could
be characterized as a claim that HNCA had a policy to violate its
12 policies.
13 Id. at 4-5 (citations omitted). The Court further stated,
14 ... [E]ven if one takes as tme all the declarations not withdrawn by
stipulation, there is not sufficient evidence to show a company-wide
15 undfficiai policy .. .Given the paucity of evidence, and HNCA's
undisputed break policy. Plaintiffs clauns would depend upon
16 individualized investigations of each class member's personal
experiences and practices ih takirig rrieal break periods or
17 understandings as to their available options or remedies m the event
of a missed or intermpted break period. In sum, individual issues
18 would predominate on this claim.
19
Id. Using similar logic, the Court also refused to certify Plaintiffs' rest break claims. See id. at 5.
20
As for the off-thc-clock claims, the Court again concluded that individual issues
21
predominated, with a limited exception for an issue class applying to "a small percentage of work
22
shifts." Id at 6. The Court held,
23
24 ... Plaintiff s two theories of off-the-clock work are that his
evidence indicateis that: (1) in some HNCA call center employees
25 begin the process of logging on to their computers, and particularly
the customer ciall application, for a period of minutes, before the
26 employiee iriputs his br her cominencenieht of work, i.e. pimching
in; (2) that in a percentage 6f shifts HNCA erhployees punch-out of
27 work before they are logged off the call system...
28 ... [F]or the difference between actual start and recorded
start.. .there is an issue about the off the clock work that can be
MEMORANDUM OF POINTS AND AUTHORITIES ISO
MOTION TO STRIKE ARANA'S REPRESENTATIVE PAGA CLAIMS
1 resolved on a class wide basis: Did the time recording systems in
effect during the relevant periods prevent an accurate capture ofthe
2 start time of the class members? That factual dispute is capable of
being resolved.. .on a class wide basis. Therefore, to that extent the
3 court will grant certification for the clock in claim. ...Except [as to
the resolution of this factual issue], individual issues would again
4 predoiriinate on these theories of off-the-clock time. Therefore,
except as stated above..., the request to certify the off-the-clock
5 claims is denied.
6 Id at 5-6.
7 D. The Court Deferred Ruling On HNGA*S Motion Attacking Arana's PAGA
Claims
8
9 HNCA filed its December 21 Motion seeking to strike all of Arana's PAGA claims.* RA
10 316, 322. As mentioned above, the Court denied the December 21 Motion without prejudice, and
11 expressly stated that HNCA could renew it at a later date and incorporate its previousfilingsby
12 reference. See RA 439; Long Decl. f 2, Ex. A. The Court further ordered Plaintiffs to submit a
13 trial plan as to all remaining claims at issue, and instmcted the parties to address Questions 1-9 of
14 the Supplemental Case Management Questiormaire for PAGA Cases and Questions 1-8 of the
15 Minute Order foimd at Register of Actions # 440. See Long Decl. Tf 3, Ex. B. In other words, the
16 Court deferred mling on the merits of HNCA's December 21 Motion to allow Plaintiffs to submit
17 a trial plan,
18 E. Plaintiffs Submit Their trial Plan And Attempt To Re-Craft Their PAGA
Claims
19
20 Plaintiffs have now submitted a Trial Plan setting forth their intent to present four discrete
21 claims at trial, one of which was not certified by this Coiul because the disputes were too
22 individualized, and two of which are brand new. RA 481, A sununary of the claims contained in
23 the Trial Plan can be found in the Spears' Motion to Strike, as well as m HNCA's objections to
24 Plaintiffs' Trial Plan, both of which are filed herewith.
25
26
27
28
* Simultaneously, HNCA also moved to strike all the PAGA claims alleged by Spears. HNCA has renewed that
motion as well (the "Spears Motion to Strike").
8
MEMORANDUM OF POINTS AND AUTHORITIES ISO
MOTION TO STRIKE ARANA'S REPRESENTATIVE PAGA CLAIMS
1 III. ARGUMENT
^ A. There Is No Procedural Impediment To The Court's Resolving HNCA's
3 Motion. And The Court Has The Power To Grant It
4 Motions to strike are routinely employed by defendants to challenge all manner of
5 representative actions, and this Court is fully empowered to strike deficient PAGA claims prior to
6 trial. This topic discussed at greater length in the Spears Motion to Strike,filedconcurrently
7 herewith, as well as in the December 21 Motion.
8 B. The Court Should Strike Arana's Rest Break Claim
9 As mentioned above, the Court declined to certify Plaintiffs' rest break claim. It is
10 therefore unsurprising that Plaintiffs do not mention a PAGA rest break claim in their Trial Plan.
11 Arana has evidently abandoned this claim and the Court should strike it.
12 C. The Court Should Strike Arana's New Meal Period PAGA Claim Based On
Judicial Estoppel
13
14 Arana has not previously alleged the Meal Period PAGA Claim described in the Trial Plan
15 in this case. Now, more than two years into this litigation, Arana has invented a new claim based
16 on how time records were supposed to be coded, RA 481. Id. at 9-11. The only conceivable
17 reason for doing so at this late date is a perceived strategic advantage. Judicial estoppel exists to
18 prevent such tactics.
19 "The gravamen ofjudicial estoppel is the intentional assertion of an inconsistent position
20 that perverts the judicial machinery." Jackson v. County ofLos Angeles, 60 Cal. App, 4th 171,
21 181 (1997). The doctrine most appropriately applies when: "(1) the same party has taken two
22 positions; (2) the positions were taken injudicial or quasi-judicial administrative proceedings; (3)
23 the party was successful in asserting thefirstposition (i.e., the tribunal adopted the position or
24 accepted it as tme); (4) the two positions are totally inconsistent; and (5) thefirstposition was not
25 taken as a result of ignorance, fraud, or mistake." Id. at 183, Judicial estoppel is commonly
26 invoked to prevent partiesfirom"play[ing] fast and loose with the courts." Hanna v. L.A. Cty.
27 Sheriff's Dep't, 102 Cal. App. 4th 887, 897 (2002),
2g The first element is plainly satisfied. Arana's original theory as set forth in his LWDA
^ _9
MEMORANDUM OF POINTS AND AUTHORITIES ISO
MOTION TO STRIKE ARANA'S REPRESENTATIVE PAGA CLAIMS
1 Notice, contended that "[d]ue to the workload and pressure to get their work done, Arana and the
2 aggrieved employees were frequently required to work through their meal periods." Long Decl.
3 ^4, Ex. C at 8. In other words, Arana believed that because of the demanding nature of his work,
4 his supervisors expected him to work through his meal period, which he did. Arana has advanced
5 this theory consistently throughout this litigation. Yet now, and for thefirsttime,Arana argues
6 that HNCA violated the Labor Code by "failing to advise the Aggrieved Employees to use the
7 pay code 'DTO' for payment of meal period premiums," RA 481 at 9. This new theory relating
8 to alleged coding errors is wholly distinct from, and inconsistent with, whether employees were
9 required to skip meal periods due to their workload. How time is coded has nothing to do with
10 whether an employee was provided with a meal break.
11 Second, Arana asserted both his old and new positions in this case. Arana alleged his old
12 theory in his LWDA notice and the Consolidated Complaint, which states that putative class
13 members were not provided with meal periods due to (among other things ) "chronically
14 understaffing each work shift with not enough workers [and] imposing so much work on each
15 employee such that it made it unlikely that an employee would be able to take their breaks if they
16 wanted tofinishtheir work ontime."RA 66 at 8. His re-crafted theory related to the "DTO"
17 code has now been alleged in the Trial Plan. RA 481 at 9-11.
18 The third prong is also satisfied because the Court previously accepted the first theory as
19 tme in resolving Plaintiffs' motion for class certification. As the Court noted m its order,
20 "Plaintiffs theory is . , , premised upon break violations caused by pressures of the employees'
21 work." RA 439 at 5. The Court plainly relied on this theory in concluding that Plaintiffs' meal
22 period claun could not be certified.
23 Fourth, the two theories are inconsistent. The notion that meal period violations occurred
24 because of an alleged coding error is entirely differentfi:omwhat has previously been alleged in
25 this case, and is inconsistent with a theory that aggrieved employees were forced to miss meal
26 breaks due to the press of other busmess. These two theories carmot be reconciled,^
27
^ Inconsistent theories are those that are "incoherent or illogical in thought or actions." Merriam-Webster Online
28 Dictionary, http://www.merriam-webster.com (Mar. 5,2020). Here, there is no logical connection between Spears'
two meal period claims.
10
MEMORANDUM OF POINTS AND AUTHORITIES ISO
MOTION TO STRIKE ARANA'S REPRESENTATIVE PAGA CLAIMS
1 Finally, the fifth prong is satisfied because there is no hint that Arana took his original
2 position by ignorance,fi-aud,or mistake. As best as HNCA can tell, Arana's new Meal Period
3 PAGA Claim derivesfromthe deposition of Diane Rodes, In that deposition, Ms, Rodes testified
4 that imtil January 1,2017, HNCA supervisors used the "DTO" code to record payment of meal
5 period premiums. Long Decl. ^ 5, Ex. D 70:8-25. That deposition occurred on May 2,2018,
6 nearly two years ago. See id. The notion that Spears had been ignorant of these facts tmtil
7 recently would be false. The only plausible explanation is that Spears has concocted a new theory
8 in an attempt to avoid the consequences of the Court's class certification order. This is precisely
9 the type of maneuver that judicial estoppel is designed to protect against.
10 The end result of this chicanery is that both the Court and HNCA must aim at a moving
11 target. See Aguilar v. Lerner, 32 Cal. 4tii 974, 986 (2004) (judicial estoppel is applied "to
12 maintain the integrity of the judicial system and to protect parties from opponents' unfair
13 strategies."). HNCA has constmcted its defense, conducted discovery, and prepared for trial in
14 reasonable reliance on Arana's assertions in his LWDA Notice and in the Consolidated
15 Complaint. With Arana's meal period theory having morphed into something else entirely, much
16 of that time will have been wasted, greatiy prejudicing HNCA. See Levin v. Ligon, 140 Cal. App,
17 4th 1456, 1483 (2006) (trial court may consider prejudice in deciding whether to apply judicial
18 estoppel). The Court should not countenance such gamesmanship, and should strike this new
19 meal period claim,
20 D. The Court Should Strike Arana's New Meal Period PAGA Claim. As WeU As
His New EMPCenter PAGA Claim. Because He Failed to Exhaust Those
21 Claims
22 PAGA claims are limited under Califomia law by the contents of the Written Notice filed
23 witii the LWDA. Brown v. Ralphs Grocery Co., 28 Cal. App. 5th 824. 837-38 (2018). The
24 PAGA requires that an allegedly aggrieved employee "give written notice of the alleged Labor
25 Code violation to both the employer and the [LWDA], and the notice must describe the facts and
26 theories supporting the violation." Arias v. Superior Court, 46 Cal. 4th 969, 981 (2009) (quoting
27 Cal. Lab. Code § 2699.3(a)(1)). "Proper notice under section 2699.3 is a 'condition' of a PAGA
28 lawsuit," Brown, 28 Cal, App, 5th at 835 (citations omitted); Caliber Bodyworks, Inc. v. Superior
11
~' MEMORANDUM OF POINTS AND AUTHORITIES ISO ^
MOTION TO STRIKE ARANA'S REPRESENTATIVE PAGA CLAIMS
1 Court, 134 Cal. App. 4tii 365, 371 (2005).
2 The Court in Brown held that that a plaintiff must do more than "parrot[] the allegedly
3 violated Labor Code provisions," Brown, 28 Cal. App. 5th at 837. Thus, allegations that
4 employees "did not take all meal and rest periods and were not properly comperwated for missed
5 meal and rest periods" were deemed insufficient. Id. Such conclusory statements "did not give
6 sufficient information for the LWDA to assess the seriousness ofthe alleged violations and
7 decide whether to allocate scarce resources to an investigation, or for defendants to determine
8 what policies or practices were being complained of, have an opportimity to cure the violations,
9 and prepare a meaningful response," Id. at 837-38. Indeed, the sole allegation that was found to
10 be sufficient was plaintiffs' contention that the employers' wage statements "fail[ed] to include
11 the name and address of the legal entity that is the employer." Id. at 838, Such an allegation
12 would enable an employer to consult its wage statements, determine whether the name and
13 address were correct, and take corrective action as needed,
14 Here, because Arana did not notify the LWDA of the "facts and theories supporting the
15 violation" with the requisite specificity, the following claims should be stricken for failure to
16 exhaust administrative remedies. See id. at 835.
17 L Plaintiffst Meal Period Claim Premised On The "DTP" Code Was Not
Mentioned In Arana's LWDA Ndtice
18
19 For substantially the reasons set forth in the Spears Motion to Strike, the Court should
20 stiike Arana's new Meal Period PAGA Claim for failure to exhaust. Arana's LWDA Notice
21 made no mention of a "DTO" code. Instead, Arana's original meal period claim blamed the
22 workload and pressure to get their work done." Long Decl. 14, Ex. C at 8. Because the LWDA
23 Notice made no mention of any coding errors, such a theory was not exhausted, and the Court
24 should not permit Arana to litigate it.
25 2. Arana Did Not Exhaust His EMPCenter PAGA Claim
26 Although Arana (unlike Spears) made some mention of employees working off the clock
27 in his LWDA Notice, he failed to provide notice of the EMPCenter PAGA Claim that Plaintiffs
28 have put forward in the Trial Plan. That claim was not exhausted and must be stricken.
12
MEMORANDUM OF POINTS AND AUTHORITIES ISO
MOTION TO STRIKE ARANA'S REPRESENTATIVE PAGA CLAIMS
1 Arana's LWDA Notice alleged that off-the-clock work occurred for two distinct reasons.
2 First, it alleged that "Arana and the aggrieved employees were required to boot up their
3 computers at the begirming of each shift," a process that "could take anywhere fromfifteen(15)
4 minutes to thirty (30) minutes daily—^time which was not paid by Health Net," M , Ex. C at 15.
5 Second, the Notice alleged that "Arana and the aggrieved employees were directed by
6 management to inaccurately record all hours worked" because "Health Net directed its employees
7 to utilize a rotmding practice that rounds time to the next hour," Id. These allegations correspond
8 with Plaintiffs' putative class Boot-up Off the Clock Claim and Arana's rounding claim,
9 respectively. The former was certified by the Court as an issue class, and the latter has been
10 disposed of by way of summary adjudication. RA 439 at 5-6; Long Decl, ^ 9, Ex, H, However,
11 nowhere in the LWDA Notice is there any suggestion that off-the-clock work occurred due to
12 HNCA's failure to advise its employees that they could manually record their hours worked, as
13 Plaintiffs now allege in their Trial Plan, See generally RA 4S\. While Arana may have
14 exhausted other theories regarding off-the-clock work, he did not exhaust any theories related to
15 whether employees could manually enter their time. As a result, Arana never exhausted the
16 EMPCenter PAGA Claim and it should be sf icken."
17 E. Arana's Off The Clock Claum. Both His Old And New Meal Period Claims^
Aad The EMPCenter PAGA Claim Are Time-Barred
18 ' ~^
19 The Court should strike Arana's off-the-clock, meal period (new and old), and
20 EMPCenter claims for a second reason: they are time-barred. "The statute of limitations for
21 PAGA claims is one year." Brown, 28 Cal. App. 5th at 839. Arana testified that he has been an
22 exempt employee since November of 2015. Therefore, and as described in greater length in the
23 December 21 Motion, he had until November of 2016 to file his LWDA Notice. Arana failed to
24 do so. histead, he filed his LWDA Notice in May of 2017, well outside the statute of limitations,
25 As a result, these PAGA claims are time-barred,
26 The Califomia Court of Appeal recently confronted a scenario nearly identical to that
27 8 Arana also failed to exhaust the Miscalculation Claim, which alleges that "MedFlexWave" payments,
"DenFlxWave" payments, SPOT Awards, ACA Incentive Payments, and Wellness Incentive Payments should have
28 been included when calculating the regular rate of pay. Regardless, Arana stipulated that he has withdrawn this
claim. Long Decl. H 6, Ex. E at 126:14-127:3.
13
MEMORANDUM OF POINTS AND AUTHORITIES ISO
MOTION TO STRIKE ARANA'S REPRESENTATIVE PAGA CLAIMS
1 presented here. In Esparza v. Safeway, Inc., 36 Cal. App. 5th 42,47 (2019), the Court affumed a
2 lower court's granting of a motion to strike PAGA claims based on defendant's contention that
3 the plaintiffs' claims were time-barred. Id. at 47. There, as here, the Court permitted plaintiffs to
4 file a trial plan, in response to which defendant moved to strike. Id. at 50. The defendant's
5 motion in Esparza argued that the plaintiffs' claims were time-barred because they waited too
6 long beforefilinga written notice with the LWDA. Id. The trial court agreed, stmck plaintiffs'
7 PAGA claims, and the Court of Appeal affirmed. Id. at 64-65. Although HNCA did not have the
8 benefit of that decision prior to filing the December 21 Motion, Esparza caimot be meaningfiiUy
9 distinguished from this case. That case confirms that time-barred PAGA claims may be stricken,
10 and the Court should do so here.
11 F. Because Arana Has No Viable PAGA Claims. He Lacks Standing To
Continue Litigating On Behalf Of Others
13 Because Arana's PAGA claims fail as a matter of law, Arana caimot continue to litigate
14 PAGA claims on behalf of others. He lacks standing to pursue those claims, because of which the
15 Court should strike any PAGA claims Arana seeks to assert on behalf of other claimants,
16 The provisions of the PAGA may be enforced m two ways: the LWDA may bring an
17 action, and if it does not, an "aggrieved employee" may do so "on behalf of himself or herself and
18 other current or former employees." Cal, Lab. Code § 2699(a). This language "imposes a
19 standing requirement; to bring an action, one must have suffered harm." Williams v. Superior
20 Court, 3 Cal. 5tii 531, 558 (2017); see also Jones v. Gen. Elec. Co., 2019 WL 1599183, at *6
21 (N.D. Cal. Apr. 15, 2019) ("Based on this allegation, Mr. Jones does not have standing to bring a
22 PAGA claim because it is premised on labor violations suffered by his employees, not himself").
23 Importantly for present piuposes, that standing requirement is not measured solely at the outset of
24 the case. Rather, a plaintiff must maintain his or her status as an "aggrieved employee" for the
25 duration of the action. For this reason, multiple courts have rejected attempts by plaintiffs to
26 bring PAGA claims on behalf of others when their own claims were found to be time-barred. See
27 Gordon v. Aerotek, Inc., 2017 WL 8217410, at *4 (CD. Cal, Oct, 12,2017); Thomas v. Home
28 Depot USA Inc., 527 F. Supp, 2d 1003, 1008-09 (N.D, Cal. 2007). Astiiepresent case
14
MEMORANDUM OF POINTS AND AUTHORITIES ISO
MOTION TO STRIKE ARANA'S REPRESENTATIVE PAGA CLAIMS
1 demonstirates, a contrary rule would eviscerate PAGA's statute of limitations requirement. If
2 Arana were permitted to continue litigating his PAGA clauns, HNCA would be required to
3 continue litigating thousands of individual PAGA claims despite the fact that not a single
4 allegedly aggrieved employee had provided timely notice to the LWDA. The Court should not
5 transform PAGA's notice requirement into a dead letter. Because all of Arana's PAGA claims
6 fail as a matter of law, he may not represent other allegedly aggrieved employees,
7 G. Because None Of Arana's Stand-alone PAGA Claims Can Proceed. Neither
Can Any Derivative Claims
8
9 Because Arana is barredfromproceeding on any of his stand-alone PAGA claims, he is
10 also precludedfromlitigating any PAGA claims that are purely derivative. The Court should
11 strike those claims as well.'
12 H. In The Alternative. The Court Should Strike Arana's PAGA Claims Because
They Present Inisurmbuntable Manageability Pjroblems'"
13
14 That Arana's PAGA claims are barred by judicial estoppel, failure to exhaust, and the
15 statute of limitations provides sufficient basis for the Court to grant HNCA's motion. Even setting
16 those aside for the moment, immanageability provides an additional basis for the Court to strike
17 those claims.
18 A PAGA plaintiff has the burden to demonstrate that claims brought in a representative
19 capacity do not pose manageability problems for the Court. See Williams, 3 Cal. 5th at 559
20 (stating that a plaintiff bringing a PAGA representative action must "render trial of the action
21 manageable"). In addition to the authorities cited to in the Spears Motion to Strike and in the
22 December 21 Motion, cases addressing representative actions brought imder the UCL prior to the
23 passage of Proposition 64 offer important guidance.
24 Indeed, before Proposition 64 imposed class certification requirements on representative
25 UCL claims, Califomia courtsfrequentlyexercised their discretion and found that actions could
26
27 ' Arana's derivative claim for waiting time penalties fails for the additional reason that such penalties are precluded
under the Califomia Labor Code. That is, an employee seeking to recover damages for meal period violations may
28 not recover derivative waiting time penalties for those same violations. See Naranjo v. Spectrum Sec. Servs., Inc., 40
Cai. App. 5th 444,474 (2019); Ling v. P.F. Chang's China Bistro, Inc., 245 Cal, App. 4th 1242, 1261 (2016).
'° The Court should also consider the manageability arguments raised in HNCA's Objections to Plaintiffs' Trial Plan.
15
MEMORANDUM OF POINTS AND AUTHORITIES ISO
MOTION TO STRIKE ARANA'S REPRESENTATIVE PAGA CLAIMS
1 not proceed where determining the defendant's liability to nonparties would present significant
2 manageability issues. For example, in Bronco Wine Co. v. Frank A. Logoluso Farms, 214 Cal.
3 App. 3d 699 (1989), the Court of Appeal foimd the trial court abused its discretion by denying a
4 motion to strike the representative action allegationsfroma UCL complaint because representative
5 actions are only appropriate when the alleged unfair business practice is uniform, does not involve
6 the resolution of complex factual issues, and does not pose management problems for the court.
7 Id. at 718-21, There, a grape grower brought a representative UCL action against a winemaker.
8 Each non-party grape grower had a separate contract with the defendant and determining the
9 amount of restitution each non-party grower was entitled to was not an "automatic calculation,"
10 Id. at 7 \ 6,720. Given these complexities, the Court of Appeal found that the trial court's denial of
11 the defendant's pretrial motion to strike caused "insurmountable control and management
12 problems," and reversed the judgment in favor of the nonparty growers. Id at 720-21.
13 Similarly, in South Bay Chevrolet v. General Motors Acceptance Corp., 12 Cal. App. 4th
14 861 (1999), the representative plaintiff brought a UCL action on behalf of nonparty dealerships
15 against General Motors based on interest calculations for loan agreements. The court found it
16 was the plaintiffs' burden to establish that the evidence as to the nonparty dealers "was
17 sufficientiy uniform to allow representative treatment...." Id. at 897, Because the presentation of
18 evidence would be highly individualized, requiring the plaintiff to put on "evidence about each
19 dealership's individual understanding based upon the imique disclosures received by such
20 dealership and the written, oral and implied terms ofthe dealership's loan agreements," the
21 plaintiff failed to carry his burden. 7i/.
22 These precedents make clear that a trial court should not allow a PAGA action to proceed
23 on a representative basis when a defendant's liability to other alleged aggrieved employees non-
24 parties represented by the named plaintiff would be unmanageable. When the particular facts and
25 circumstances of a case make clear that a plaintiffs PAGA representative claims present
26 significant management and control problems, as they do here, the court can—and should—
27 dismiss those claims.
28
16
MEMORANDUM OF POINTS AND AUTHORITIES ISO
MOTION TO STRIKE ARANA'S REPRESENTATIVE PAGA CLAIMS
1 1, Neither PAGA Claim Related to Whether Employees Ever Performed
Work Off the Clock Can Be Manageably Tried
2
3 As pointed out in HNCA's objections to Plaintiffs Trial Plan, Arana (and Spears) are
4 attempting to resurrect an off-the-clock claim the court did not certify. Neither lhal claim nor
5 Arana's off-the-clock PAGA claim is manageable. This Court correctly found in its order
6 denying class certification that HNCA's policies "require that its employees record their actual in
7 and outtimes."RA 439 at 5. That same order found that if HNCA'stimekeepingsystems
8 malfunctioned or was otherwise imavailable for use, those timekeeping systems "have . . . always
9 permitted employees to manually enter their start and stop times." Id. However, Plaintiffs have
10 proposed no method to systematically determine whether employees accurately recorded all their
11 hours worked.
12 TestimonyfromSpears demonstrates how such a trial would proceed. At her deposition,
13 Spears testified that she never performed work off the clock:
14 \ Q. Okay. So there wasn't any pre-shift work that you weren't paid
for; correct?
15 A. Correct.
16 Q, And there wasn't any post-shift work that you weren't paid for?
17 A. Correct.
18
19 Long Decl. ^ 7, Ex. F. To the extent an employee such as Spears adhered to HNCA policies and
20 accurately recorded her time, no off the clock work was performed, and there is no basis for
21 PAGA penalties. Plaintiffs' Trial Plan makes no attempt to explain how thefinderof fact could
22 possibly distinguish between such an employee versus another employee who did not record off
23 the clock work. The only way to do so is to ask the employees—each and every one of Ihem.^'
24 Whether any off-the-clock work occurred necessarily requires consideration of evidence specific
25 to each employee in order to establish liability. Stated differently, the Court would have to
26 engage in thousands of mini-trials. Given the number of allegedly aggrieved employees, this is a
27 '' This example underscores that analyzing records alone would not reveal off-the-clock violations. Even Plaintiff's
28 expert, James Toney, who reviewed Computer log-in and timekeeping data conceded that he could determine
whether any employee had worked off the clock. Long Decl. 18, Ex. G.
17
MEMORANDUM OF POINTS AND AUTHORITIES ISO
MOTION TO STRIKE ARANA'S REPRESENTATIVE PAGA CLAIMS
1 monumental undertaking. Such a trial would be patently unmanageable.
2 2. Arana's Meal Period PAGA Claim Is Similarly Unmanageable.
3 For the reasons set forth in the Spears Motion to Strike, Arana's meal period claim will be
4 entirely unmanageable. It should be stricken as to Arana for the same reasons,
5 3. Arana's Miscalculation PAGA Claim Is Unmanageable
6 Arana's Miscalculation Claim is actually comprised offiveseparate claims. When
7 considered individually, together, and/or along with the other PAGA claims Arana is pursuing,
8 this claim is manageable,
9 a. MedFlxWave And DenFlxWave Payments Mtist Be Proven
Individually. Both As To Liability And Damages
11 HNCA employees (but not Arana) received "MedFlxWave" and "DenFlxWave" payments
12 pursuant to a cafeteria benefits plan. If an employee waived medical or dental benefits, the
13 employee would instead receive a small payment from the plan. Whether HNCA was requured to
14 include these payments in the regular rate when calculating overtime depends on the application
15 of what is known as the Cash Benefit Plan Exemption, the legal contours of which are described
16 in the concurrentiy filed Objections to Plaintiffs' Trial Plan.
17 To resolve whether these payments should have been included in the regular rate, and as
18 explained further in HCA's objections to Plaintiffs' Trial Plan, the Court will first have to
19 consider testimony from a number of witnesses regarding the stmcture and administration ofthe
20 cafeteria plan, how payments were made, and how the payroll system was stmctured. This
21 evidentiary chowmg will be comprised of lay and expert witnesses, as well as substantial
22 documentary evidence. The analysis will be complex and fact-mtensive,
23 Any consideration of alleged wage loss and penalties would be even more complex and
24 time-consuming. This will involve a week-by-week analysis of the pay received by each
25 recipient of the MedFlxWave and/or DenFlxWave payments to delermine whether any of them
26 worked overtime and therefore suffered a wage loss. In addition, HNCA will introduce testunony
27 targeting the right to recover some or all of the PAGA penalties Plaintiffs seek to recover. See,
28 e.g, Amaral v. Cintas Corp. No. 2,163 Cal. App. 4th 1157,1213 (2008) ("[T]he court may award
18
Preview
1 Timothy J. Long (SBN 137591) FILED Samuel S. Hyde (SBN 327065) 2 GREENBERG TRAURIG, LLP 1201 K Street, Suite 1100 3 Sacramento, CA 95814 MAR - 5 2020 Telephone: 916.442.1111 4 Facsimile: 916.448.1709 longt@gtlaw.com By: 5 hydes@gtlaw.com 6 Rowena Santos (SBN 210185) GREENBEiRG TRAURIG, LLP \p\Wf\ 7 18565 Jamboree Road, Suite 500 Irvine, CA 92612 8 Telephone: 949.732.6500 Facsimile: 949.732.6501 9 santosr@gtlaw.com 10 Attomeys for Defendant HEALTH NET OF CALIFORNIA, INC. 11 12 SUPERIOR COURT OF THE STATE OF CALIFORNIA 13 COUNTY OF SACRAMENTO 14 ANDREA SPEARS, an individual, on behalf Consolidated Case No. 34-2017-00210560- 15 of herself and on behalf of all persons CU-OE-GDS (ConsoUdated with Case No. X similarly situated. 34-2017-00216685-CU-OE-GDS) < Plaintiff, 16 MEMORANDUM OF POINTS AND 17 AUTHORITIES IN SUPPORT OF HEALTH NET OF CALIFORNIA, INC. HEALTH NET OF CALIFORNIA, INC., a MOTION TO STRIKE PLAINTIFF 18 Califomia Corporation; and Does 1 through TOMAS R. ARANA'S > 50, inclusive. REPRESENTATIVE PAGA CLAIMS 19 Defendants. Date: April 3,2020 20 Time: 1:30 p.m. Dept: 41 21 Judge: Hon. David De Alba 22 Complaint Filed: April 5,2017 FAC Filed: June 29, 2017 23 TOMAS R. ARANA, on behalf of himself, all 24 others similarly situated, 25 Plaintiff, 26 HEALTH NET OF CALIFORNIA, INC., a 27 Califomia corporation; and DOES 1-50, inclusive, Complaint Filed: August 1,2017 28 Defendant. Consolidated Complaint Filed: Dec. 21,2017 MEMORANDUIVI OF POINTS AND AUTHORITIES ISO MOTION TO STRIKE ARANA'S REPRESENTATIVE PAGA CLAIMS 'SC 1 TABLE OF CONTENTS 2 Page 3 4 I. Introduction ^ 5 II. Factual and Procedural Background 5 A. Arana Sends His Written Notice To The LWDA 5 B. Plamtiffs File A Consolidated Complaint 6 7 C. The Court Denied Plaintiffs' Motion To Certify Their Meal Break, Rest Break, And Off-the-Clock Claims 6 8 D. The Court Deferred Ruling On HNCA's Motion Attacking Arana's PAGA Claims ; 8 9 E. Plaintiffs Submit Their Trial Plan And Attempt To Re-Craft Their PAGA 10 Claims ,.8 III. Argument 9 A. There Is No Procedural Impediment To The Court's Resolving HNCA's 12 Motion, And The Court Has The Power To Grant It 9 13 B. The Court Should Strike Arana's Rest Break Claim 9 C. The Court Should Strike Arana's New Meal Period PAGA Claim Based 14 On Judicial Estoppel , , , 9 D. The Court Should Strike Arana's New Meal Period PAGA Claim, As Well 15 As His New EMPCenter PAGA Claim, Because He Failed to Exhaust ^g Those Claims 11 1. Plaintiffs' Meal Period Claim Premised On The "DTO" Code Was 17 Not Mentioned In Arana's LWDA Notice 12 18 2. Arana Did Not Exhaust His EMPCenter PAGA Claim 12 E. Arana's Off The Clock Claim, Both His Old And New Meal Period 19 Claims, And The EMPCenter PAGA Claim Are Tune-Barred 13 20 F. Because Arana Has No Viable PAGA Claims, He Lacks Standing To Continue Litigating On Behalf Of Others 14 21 G. Because None OfArana's Stand-alone PAGA Claims Can Proceed, Neither Can Any Derivative Claims , 15 22 H. In The Altemative, The Court Should Strike Arana's PAGA Claims Because They Present Insurmountable Manageability Problems 15 23 1. Neither PAGA Claim Related to Whether Employees Ever 24 Performed Work Off the Clock Can Be Manageably Tried 17 25 2. Arana's Meal Period PAGA Claim Is Similarly Unmanageable 18 3. Arana's Miscalculation PAGA Claim Is Unmanageable 18 26 IV. Conclusion .-. 20 27 28 MEMORANDUM OF POINTS AND AUTHORITIES ISO MOTION TO STRIKE ARANA'S REPRESENTATIVE PAGA CLAIMS 1 TABLE OF AUTHORITIES 2 Page(s) •I Cases ^ Aguilar v. Lerner, 5 32 Cal. 4th 974 (2004) , 11 6 Amaral v. Cintas Corp. No. 2, 163 Cal. App. 4th 1157 (2008) 18 7 Arias v. Superior Court, 8 46 Cal. 4th 969 (2009) 11 Q Bronco Wine Co. v. Frank A. Logoluso Farms, 10 214 Cal. App. 3d 699 (1989) 16 11 Brown v. Ralphs Grocery Co., 28 Cal. App. 5th 824 (2018) 11,12,13 12 Caliber Bodyworks, Inc. v. Superior Court, 134 Cal. App. 4th 365 (2005) 11 13 Esparza v. Safeway, Inc. 15 36 Cal. App. 5th 42 (2019)., , ...14 16 Gordon v. Aerotek, Inc., 2017 WL 8217410 (CD. Cal. Oct. 12,2017) .......14 17 Hanna v. L.A. Cty. Sheriff's Dep't, 18 102 Cal. App. 4th 887 (2002) ,.9 ^^ Jackson V. County of Los Angeles, 60 Cal. App. 4th 171 (1997)..; ; ..9 20 21 Jones v. Gen. Elec. Co., 2019 WL 1599183 (N.D. Cal. Apr. 15,2019) .,,.14 22 Levin v. Ligon, 23 140 Cal. App. 4th 1456 (2006) , .11 24 Ling V. P.F. Chang's China Bistro, Inc., 2^ 245 Cal. App. 4th 1242 (2016) , ; 15 Naranjo v. Spectrum Sec. Servs., Inc., 40 Cal. App. 5th 444 (2019) 15 27 " 28 MEMORANDUM OF POINTS AND AUTHORITIES ISO MOTION TO STRIKE ARANA'S REPRESENTATIVE PAGA CLAIMS 1 South Bay Chevrolet v. General Motors Acceptance Corp., 2 12 Cal. App. 4th 861 (1999) 16,17 Spears v. Health Net of California, Inc., Case 6,7 4 Thomas v. Home Depot USA Inc., 5 527 F. Supp. 2d 1003 (N.D. Cal. 2007) 14 6 Williams v. Superior Court, ^ 3 Cal. 5th 531 (2017) , ..14,15 Statutes ^ 29 U.S.C. § 207(e)(3) , 20 10 Cal. Lab. Code § 2699(a) 14 11 Califomia Labor Code: (1) , , ...5 12 Patient Protection and Affordable Care Act 19 13 Other Authorities 14 29 C.F.R. § 778.211 19 1^ Merriam-Webster Online Dictionary, http://www.merriam-webster.com (Mar. 5, 16 2020) ; ....10 17 18 19 20 21 22 23 24 25 26 27 28 MEMORANDUM OF POINTS AND AUTHORITIES ISO MOTION TO STRIKE ARANA'S REPRESENTATIVE PAGA CLAIMS 1 I. INTRODUCTION 2 On December 21,2018, and pursuant to a stipulated court order, Defendant Heath Net of 3 Califomia ("HNCA") filed a motion attacking Plaintiff Tomas Arana's ("Arana") PAGA claims 4 (the "December 21 Motion"). Arana did not oppose tlie December 21 Motion. The Court, 5 however, deferred mling on that motion to allow Arana and co-Plaintiff Andrea Spears ("Spears," 6 and collectively "Plaintiffs") to submit a trial plan as to all claims at issue, and specifically held 7 that HNCA could renew its motion at a later date. Plaintiffs havefiledtheir proposed trial plan 8 ("Trial Plan") pursuant to this Court's order. HNCA therefore renews its motion, incorporates by 9 reference its priorfilingsand all the supporting papers (as permitted by Court order), and includes 10 additional arguments prompted by Plaintiffs' Trial Plan. 11 Arana's PAGA claims should be stricken in their entirety for several reasons. He lacks 12 standing as he was an exempt employee during the relevant PAGA period, and is therefore not an 13 "aggrieved employee" for purposes of PAGA; any claims arisingfiromhis time as a non-exempt 14 employee are barred by the statute of limitations; he failed to exhaust the administrative process 15 (as to his regular rate, meal period, and off-the-clock PAGA claims); he has abandoned his PAGA 16 rest break claim; he is judicially estoppedfi-omtrying to re-craft his meal period PAGA claim; 17 and whether old or re-crafted, Arana's PAGA claims are urmianageable. 18 n. FACTUAL AND PROCEDURAL BACKGROUND 19 A. Arana Sends Hiii Written Notice To The LWDA 20 On May 9,2017, Aranafiledhis Written Notice with the Labor and Workforce 21 Development Agency ("LWDA"). Arana alleged six stand-alone violations of the Califomia 22 Labor Code: (1) an alleged rounding policy that resulted in employees' time being inaccurately 23 recorded and, as a result, inaccurately paid;' (2) HNCA improperly classified certain employees 24 as being exemptfi-omovertime;^ (3) HNCA incorrectly calculated employees' regular rate of pay 25 by failing to include non-discretionary bonuses and "other remuneration" in that rate;^ (4) HNCA 26 ' The Court granted summary adjudication on the rounding claim. Declaration of Timothy J. Long ("Long Decl.") 27 ^ 9, Ex. H. ^ Arana later withdrew this claim. Id. ^6, Ex. E. 28 3 Arana has also withdrawn this claim. Id. 5 MEMORANDUM OF POINTS AND AUTHORITIES ISO MOTION TO STRIKE ARANA'S REPRESENTATIVE PAGA CLAIMS 1 knew or should have known that employees were working off the clock and were not being 2 compensated for that time; (5) HNCA failed to provide meal breaks; and (6) HNCA failed to 3 provide rest breaks. Long Decl. ^ 4, Ex. C. In addition, Arana alleged a number of derivative 4 claims, including (1) a failiu*e to pay premium wages at the regular rate; (2) a failure to provide 5 accurate written wage statements; and (3) a failure to timely providefinalwages to discharged 6 employees. Id. Arana's LWDA Notice did not allege that "MedFlxWave" payments, 7 "DenFlxWave" payments, SPOT Awards, ACA Incentive Payments, or Wellness Incentive 8 Payments should have been included in the regular rate of pay calculation.'' See generally id. 9 B. Plaintiffs FUe A Consolidated Complaint 10 On October 11,2017, Arana's lawsuit was ordered consolidated for all purposes with 11 Spears v. Health Net of California, Inc., Case no. 34-2017-00210560, with co-PIaintiflf Andrea 12 Spears' ("Spears") lawsuit designated as lead case. RA 17.^ A detailed description of the claims 13 alleged in the Consolidated Complaint is set forth in the Motion to Strike Spears' Representative 14 PAGA Claimsfiledconcurrently herewith, and is incorporated herein by reference. 15 C. The Court Denied Plaintiffs* Motion To Certify Their Meal Break. Rest Break. And Off-thc-Clock Claims 16 17 On December 21,2018, Plaintiffs sought to certify three core claims: denial of meal 18 periods, djenial of rest breaks, and failure to compensate employees for off-the clock work. RA 19 307. The Court (Judge Perkins) denied class certification as to these claims, with a limited 20 exception for an issue class,findingin essence that the claims could not be established by 21 common proof and thus did not lend themselves to class treatment. RA439. The Court mled in 22 relevant part as follows: 23 ... [T]he Court doe? notfinda well-defined comrniinity of interest on each claim, because it cannot be fouhd on this record that the 24 issues which may be jointly tried pn each claitn, when compaired with those appearing by the evidence to require separate 25 individualized adjtidQcation, are so numerous or substantial that the niaihteinance of a class action would be advantageous to the judicial 26 process and to putative class. 27 " -.- * A summary of the claims that comprise what Plaintiffs now refer to as their Miscalculation Claim can be found in 28 HNCA's Objections to Plaintiffs' Trial Plan,filedconcurrently with this motion. ' Throughout this brief, citations are to the Register of Actions ("RA") in this case. 6 MEMORANDUM OF POINTS AND AUTHORITIES ISO MOTION TO STRIKE ARANA'S REPRESENTATIVE PAGA CLAIMS 1 Id at 4. 2 With respect to the meal period claim, the Court determined that common issues did not 3 predominate. The evidence established that 4 HNCA provided employees with a 30-minute meal period before theirfifthhour of work, and employees who missed meal periods 5 received appropriate penalties. Plaintiff testified that he "understood that the company's policy was that [he] [was] to be 6 provided with 30-minute- at least 30 minute lunches during which [he] [was] not supposed to be doing any work," as well as second 7 meal periods for shifts that went longer than 11 hours (unless waived)... Thus... Plaintiffs theory of common meal period 8 violation is not that HNCA's relevant policy was unlawfid. Instead, Plaintiffs theory is that the meal period violations at issue in this 9 action were cause by HNCA's "lack of enforced policies designed to advise the Class of their recourse when the demands of their 10 employer interfered with the ability to take breaks..." Plaintiffs theory is also premised upon break violations caused by pressures 11 ofthe employees' work. Read liberally, the Plaintiffs claim could be characterized as a claim that HNCA had a policy to violate its 12 policies. 13 Id. at 4-5 (citations omitted). The Court further stated, 14 ... [E]ven if one takes as tme all the declarations not withdrawn by stipulation, there is not sufficient evidence to show a company-wide 15 undfficiai policy .. .Given the paucity of evidence, and HNCA's undisputed break policy. Plaintiffs clauns would depend upon 16 individualized investigations of each class member's personal experiences and practices ih takirig rrieal break periods or 17 understandings as to their available options or remedies m the event of a missed or intermpted break period. In sum, individual issues 18 would predominate on this claim. 19 Id. Using similar logic, the Court also refused to certify Plaintiffs' rest break claims. See id. at 5. 20 As for the off-thc-clock claims, the Court again concluded that individual issues 21 predominated, with a limited exception for an issue class applying to "a small percentage of work 22 shifts." Id at 6. The Court held, 23 24 ... Plaintiff s two theories of off-the-clock work are that his evidence indicateis that: (1) in some HNCA call center employees 25 begin the process of logging on to their computers, and particularly the customer ciall application, for a period of minutes, before the 26 employiee iriputs his br her cominencenieht of work, i.e. pimching in; (2) that in a percentage 6f shifts HNCA erhployees punch-out of 27 work before they are logged off the call system... 28 ... [F]or the difference between actual start and recorded start.. .there is an issue about the off the clock work that can be MEMORANDUM OF POINTS AND AUTHORITIES ISO MOTION TO STRIKE ARANA'S REPRESENTATIVE PAGA CLAIMS 1 resolved on a class wide basis: Did the time recording systems in effect during the relevant periods prevent an accurate capture ofthe 2 start time of the class members? That factual dispute is capable of being resolved.. .on a class wide basis. Therefore, to that extent the 3 court will grant certification for the clock in claim. ...Except [as to the resolution of this factual issue], individual issues would again 4 predoiriinate on these theories of off-the-clock time. Therefore, except as stated above..., the request to certify the off-the-clock 5 claims is denied. 6 Id at 5-6. 7 D. The Court Deferred Ruling On HNGA*S Motion Attacking Arana's PAGA Claims 8 9 HNCA filed its December 21 Motion seeking to strike all of Arana's PAGA claims.* RA 10 316, 322. As mentioned above, the Court denied the December 21 Motion without prejudice, and 11 expressly stated that HNCA could renew it at a later date and incorporate its previousfilingsby 12 reference. See RA 439; Long Decl. f 2, Ex. A. The Court further ordered Plaintiffs to submit a 13 trial plan as to all remaining claims at issue, and instmcted the parties to address Questions 1-9 of 14 the Supplemental Case Management Questiormaire for PAGA Cases and Questions 1-8 of the 15 Minute Order foimd at Register of Actions # 440. See Long Decl. Tf 3, Ex. B. In other words, the 16 Court deferred mling on the merits of HNCA's December 21 Motion to allow Plaintiffs to submit 17 a trial plan, 18 E. Plaintiffs Submit Their trial Plan And Attempt To Re-Craft Their PAGA Claims 19 20 Plaintiffs have now submitted a Trial Plan setting forth their intent to present four discrete 21 claims at trial, one of which was not certified by this Coiul because the disputes were too 22 individualized, and two of which are brand new. RA 481, A sununary of the claims contained in 23 the Trial Plan can be found in the Spears' Motion to Strike, as well as m HNCA's objections to 24 Plaintiffs' Trial Plan, both of which are filed herewith. 25 26 27 28 * Simultaneously, HNCA also moved to strike all the PAGA claims alleged by Spears. HNCA has renewed that motion as well (the "Spears Motion to Strike"). 8 MEMORANDUM OF POINTS AND AUTHORITIES ISO MOTION TO STRIKE ARANA'S REPRESENTATIVE PAGA CLAIMS 1 III. ARGUMENT ^ A. There Is No Procedural Impediment To The Court's Resolving HNCA's 3 Motion. And The Court Has The Power To Grant It 4 Motions to strike are routinely employed by defendants to challenge all manner of 5 representative actions, and this Court is fully empowered to strike deficient PAGA claims prior to 6 trial. This topic discussed at greater length in the Spears Motion to Strike,filedconcurrently 7 herewith, as well as in the December 21 Motion. 8 B. The Court Should Strike Arana's Rest Break Claim 9 As mentioned above, the Court declined to certify Plaintiffs' rest break claim. It is 10 therefore unsurprising that Plaintiffs do not mention a PAGA rest break claim in their Trial Plan. 11 Arana has evidently abandoned this claim and the Court should strike it. 12 C. The Court Should Strike Arana's New Meal Period PAGA Claim Based On Judicial Estoppel 13 14 Arana has not previously alleged the Meal Period PAGA Claim described in the Trial Plan 15 in this case. Now, more than two years into this litigation, Arana has invented a new claim based 16 on how time records were supposed to be coded, RA 481. Id. at 9-11. The only conceivable 17 reason for doing so at this late date is a perceived strategic advantage. Judicial estoppel exists to 18 prevent such tactics. 19 "The gravamen ofjudicial estoppel is the intentional assertion of an inconsistent position 20 that perverts the judicial machinery." Jackson v. County ofLos Angeles, 60 Cal. App, 4th 171, 21 181 (1997). The doctrine most appropriately applies when: "(1) the same party has taken two 22 positions; (2) the positions were taken injudicial or quasi-judicial administrative proceedings; (3) 23 the party was successful in asserting thefirstposition (i.e., the tribunal adopted the position or 24 accepted it as tme); (4) the two positions are totally inconsistent; and (5) thefirstposition was not 25 taken as a result of ignorance, fraud, or mistake." Id. at 183, Judicial estoppel is commonly 26 invoked to prevent partiesfirom"play[ing] fast and loose with the courts." Hanna v. L.A. Cty. 27 Sheriff's Dep't, 102 Cal. App. 4th 887, 897 (2002), 2g The first element is plainly satisfied. Arana's original theory as set forth in his LWDA ^ _9 MEMORANDUM OF POINTS AND AUTHORITIES ISO MOTION TO STRIKE ARANA'S REPRESENTATIVE PAGA CLAIMS 1 Notice, contended that "[d]ue to the workload and pressure to get their work done, Arana and the 2 aggrieved employees were frequently required to work through their meal periods." Long Decl. 3 ^4, Ex. C at 8. In other words, Arana believed that because of the demanding nature of his work, 4 his supervisors expected him to work through his meal period, which he did. Arana has advanced 5 this theory consistently throughout this litigation. Yet now, and for thefirsttime,Arana argues 6 that HNCA violated the Labor Code by "failing to advise the Aggrieved Employees to use the 7 pay code 'DTO' for payment of meal period premiums," RA 481 at 9. This new theory relating 8 to alleged coding errors is wholly distinct from, and inconsistent with, whether employees were 9 required to skip meal periods due to their workload. How time is coded has nothing to do with 10 whether an employee was provided with a meal break. 11 Second, Arana asserted both his old and new positions in this case. Arana alleged his old 12 theory in his LWDA notice and the Consolidated Complaint, which states that putative class 13 members were not provided with meal periods due to (among other things ) "chronically 14 understaffing each work shift with not enough workers [and] imposing so much work on each 15 employee such that it made it unlikely that an employee would be able to take their breaks if they 16 wanted tofinishtheir work ontime."RA 66 at 8. His re-crafted theory related to the "DTO" 17 code has now been alleged in the Trial Plan. RA 481 at 9-11. 18 The third prong is also satisfied because the Court previously accepted the first theory as 19 tme in resolving Plaintiffs' motion for class certification. As the Court noted m its order, 20 "Plaintiffs theory is . , , premised upon break violations caused by pressures of the employees' 21 work." RA 439 at 5. The Court plainly relied on this theory in concluding that Plaintiffs' meal 22 period claun could not be certified. 23 Fourth, the two theories are inconsistent. The notion that meal period violations occurred 24 because of an alleged coding error is entirely differentfi:omwhat has previously been alleged in 25 this case, and is inconsistent with a theory that aggrieved employees were forced to miss meal 26 breaks due to the press of other busmess. These two theories carmot be reconciled,^ 27 ^ Inconsistent theories are those that are "incoherent or illogical in thought or actions." Merriam-Webster Online 28 Dictionary, http://www.merriam-webster.com (Mar. 5,2020). Here, there is no logical connection between Spears' two meal period claims. 10 MEMORANDUM OF POINTS AND AUTHORITIES ISO MOTION TO STRIKE ARANA'S REPRESENTATIVE PAGA CLAIMS 1 Finally, the fifth prong is satisfied because there is no hint that Arana took his original 2 position by ignorance,fi-aud,or mistake. As best as HNCA can tell, Arana's new Meal Period 3 PAGA Claim derivesfromthe deposition of Diane Rodes, In that deposition, Ms, Rodes testified 4 that imtil January 1,2017, HNCA supervisors used the "DTO" code to record payment of meal 5 period premiums. Long Decl. ^ 5, Ex. D 70:8-25. That deposition occurred on May 2,2018, 6 nearly two years ago. See id. The notion that Spears had been ignorant of these facts tmtil 7 recently would be false. The only plausible explanation is that Spears has concocted a new theory 8 in an attempt to avoid the consequences of the Court's class certification order. This is precisely 9 the type of maneuver that judicial estoppel is designed to protect against. 10 The end result of this chicanery is that both the Court and HNCA must aim at a moving 11 target. See Aguilar v. Lerner, 32 Cal. 4tii 974, 986 (2004) (judicial estoppel is applied "to 12 maintain the integrity of the judicial system and to protect parties from opponents' unfair 13 strategies."). HNCA has constmcted its defense, conducted discovery, and prepared for trial in 14 reasonable reliance on Arana's assertions in his LWDA Notice and in the Consolidated 15 Complaint. With Arana's meal period theory having morphed into something else entirely, much 16 of that time will have been wasted, greatiy prejudicing HNCA. See Levin v. Ligon, 140 Cal. App, 17 4th 1456, 1483 (2006) (trial court may consider prejudice in deciding whether to apply judicial 18 estoppel). The Court should not countenance such gamesmanship, and should strike this new 19 meal period claim, 20 D. The Court Should Strike Arana's New Meal Period PAGA Claim. As WeU As His New EMPCenter PAGA Claim. Because He Failed to Exhaust Those 21 Claims 22 PAGA claims are limited under Califomia law by the contents of the Written Notice filed 23 witii the LWDA. Brown v. Ralphs Grocery Co., 28 Cal. App. 5th 824. 837-38 (2018). The 24 PAGA requires that an allegedly aggrieved employee "give written notice of the alleged Labor 25 Code violation to both the employer and the [LWDA], and the notice must describe the facts and 26 theories supporting the violation." Arias v. Superior Court, 46 Cal. 4th 969, 981 (2009) (quoting 27 Cal. Lab. Code § 2699.3(a)(1)). "Proper notice under section 2699.3 is a 'condition' of a PAGA 28 lawsuit," Brown, 28 Cal, App, 5th at 835 (citations omitted); Caliber Bodyworks, Inc. v. Superior 11 ~' MEMORANDUM OF POINTS AND AUTHORITIES ISO ^ MOTION TO STRIKE ARANA'S REPRESENTATIVE PAGA CLAIMS 1 Court, 134 Cal. App. 4tii 365, 371 (2005). 2 The Court in Brown held that that a plaintiff must do more than "parrot[] the allegedly 3 violated Labor Code provisions," Brown, 28 Cal. App. 5th at 837. Thus, allegations that 4 employees "did not take all meal and rest periods and were not properly comperwated for missed 5 meal and rest periods" were deemed insufficient. Id. Such conclusory statements "did not give 6 sufficient information for the LWDA to assess the seriousness ofthe alleged violations and 7 decide whether to allocate scarce resources to an investigation, or for defendants to determine 8 what policies or practices were being complained of, have an opportimity to cure the violations, 9 and prepare a meaningful response," Id. at 837-38. Indeed, the sole allegation that was found to 10 be sufficient was plaintiffs' contention that the employers' wage statements "fail[ed] to include 11 the name and address of the legal entity that is the employer." Id. at 838, Such an allegation 12 would enable an employer to consult its wage statements, determine whether the name and 13 address were correct, and take corrective action as needed, 14 Here, because Arana did not notify the LWDA of the "facts and theories supporting the 15 violation" with the requisite specificity, the following claims should be stricken for failure to 16 exhaust administrative remedies. See id. at 835. 17 L Plaintiffst Meal Period Claim Premised On The "DTP" Code Was Not Mentioned In Arana's LWDA Ndtice 18 19 For substantially the reasons set forth in the Spears Motion to Strike, the Court should 20 stiike Arana's new Meal Period PAGA Claim for failure to exhaust. Arana's LWDA Notice 21 made no mention of a "DTO" code. Instead, Arana's original meal period claim blamed the 22 workload and pressure to get their work done." Long Decl. 14, Ex. C at 8. Because the LWDA 23 Notice made no mention of any coding errors, such a theory was not exhausted, and the Court 24 should not permit Arana to litigate it. 25 2. Arana Did Not Exhaust His EMPCenter PAGA Claim 26 Although Arana (unlike Spears) made some mention of employees working off the clock 27 in his LWDA Notice, he failed to provide notice of the EMPCenter PAGA Claim that Plaintiffs 28 have put forward in the Trial Plan. That claim was not exhausted and must be stricken. 12 MEMORANDUM OF POINTS AND AUTHORITIES ISO MOTION TO STRIKE ARANA'S REPRESENTATIVE PAGA CLAIMS 1 Arana's LWDA Notice alleged that off-the-clock work occurred for two distinct reasons. 2 First, it alleged that "Arana and the aggrieved employees were required to boot up their 3 computers at the begirming of each shift," a process that "could take anywhere fromfifteen(15) 4 minutes to thirty (30) minutes daily—^time which was not paid by Health Net," M , Ex. C at 15. 5 Second, the Notice alleged that "Arana and the aggrieved employees were directed by 6 management to inaccurately record all hours worked" because "Health Net directed its employees 7 to utilize a rotmding practice that rounds time to the next hour," Id. These allegations correspond 8 with Plaintiffs' putative class Boot-up Off the Clock Claim and Arana's rounding claim, 9 respectively. The former was certified by the Court as an issue class, and the latter has been 10 disposed of by way of summary adjudication. RA 439 at 5-6; Long Decl, ^ 9, Ex, H, However, 11 nowhere in the LWDA Notice is there any suggestion that off-the-clock work occurred due to 12 HNCA's failure to advise its employees that they could manually record their hours worked, as 13 Plaintiffs now allege in their Trial Plan, See generally RA 4S\. While Arana may have 14 exhausted other theories regarding off-the-clock work, he did not exhaust any theories related to 15 whether employees could manually enter their time. As a result, Arana never exhausted the 16 EMPCenter PAGA Claim and it should be sf icken." 17 E. Arana's Off The Clock Claum. Both His Old And New Meal Period Claims^ Aad The EMPCenter PAGA Claim Are Time-Barred 18 ' ~^ 19 The Court should strike Arana's off-the-clock, meal period (new and old), and 20 EMPCenter claims for a second reason: they are time-barred. "The statute of limitations for 21 PAGA claims is one year." Brown, 28 Cal. App. 5th at 839. Arana testified that he has been an 22 exempt employee since November of 2015. Therefore, and as described in greater length in the 23 December 21 Motion, he had until November of 2016 to file his LWDA Notice. Arana failed to 24 do so. histead, he filed his LWDA Notice in May of 2017, well outside the statute of limitations, 25 As a result, these PAGA claims are time-barred, 26 The Califomia Court of Appeal recently confronted a scenario nearly identical to that 27 8 Arana also failed to exhaust the Miscalculation Claim, which alleges that "MedFlexWave" payments, "DenFlxWave" payments, SPOT Awards, ACA Incentive Payments, and Wellness Incentive Payments should have 28 been included when calculating the regular rate of pay. Regardless, Arana stipulated that he has withdrawn this claim. Long Decl. H 6, Ex. E at 126:14-127:3. 13 MEMORANDUM OF POINTS AND AUTHORITIES ISO MOTION TO STRIKE ARANA'S REPRESENTATIVE PAGA CLAIMS 1 presented here. In Esparza v. Safeway, Inc., 36 Cal. App. 5th 42,47 (2019), the Court affumed a 2 lower court's granting of a motion to strike PAGA claims based on defendant's contention that 3 the plaintiffs' claims were time-barred. Id. at 47. There, as here, the Court permitted plaintiffs to 4 file a trial plan, in response to which defendant moved to strike. Id. at 50. The defendant's 5 motion in Esparza argued that the plaintiffs' claims were time-barred because they waited too 6 long beforefilinga written notice with the LWDA. Id. The trial court agreed, stmck plaintiffs' 7 PAGA claims, and the Court of Appeal affirmed. Id. at 64-65. Although HNCA did not have the 8 benefit of that decision prior to filing the December 21 Motion, Esparza caimot be meaningfiiUy 9 distinguished from this case. That case confirms that time-barred PAGA claims may be stricken, 10 and the Court should do so here. 11 F. Because Arana Has No Viable PAGA Claims. He Lacks Standing To Continue Litigating On Behalf Of Others 13 Because Arana's PAGA claims fail as a matter of law, Arana caimot continue to litigate 14 PAGA claims on behalf of others. He lacks standing to pursue those claims, because of which the 15 Court should strike any PAGA claims Arana seeks to assert on behalf of other claimants, 16 The provisions of the PAGA may be enforced m two ways: the LWDA may bring an 17 action, and if it does not, an "aggrieved employee" may do so "on behalf of himself or herself and 18 other current or former employees." Cal, Lab. Code § 2699(a). This language "imposes a 19 standing requirement; to bring an action, one must have suffered harm." Williams v. Superior 20 Court, 3 Cal. 5tii 531, 558 (2017); see also Jones v. Gen. Elec. Co., 2019 WL 1599183, at *6 21 (N.D. Cal. Apr. 15, 2019) ("Based on this allegation, Mr. Jones does not have standing to bring a 22 PAGA claim because it is premised on labor violations suffered by his employees, not himself"). 23 Importantly for present piuposes, that standing requirement is not measured solely at the outset of 24 the case. Rather, a plaintiff must maintain his or her status as an "aggrieved employee" for the 25 duration of the action. For this reason, multiple courts have rejected attempts by plaintiffs to 26 bring PAGA claims on behalf of others when their own claims were found to be time-barred. See 27 Gordon v. Aerotek, Inc., 2017 WL 8217410, at *4 (CD. Cal, Oct, 12,2017); Thomas v. Home 28 Depot USA Inc., 527 F. Supp, 2d 1003, 1008-09 (N.D, Cal. 2007). Astiiepresent case 14 MEMORANDUM OF POINTS AND AUTHORITIES ISO MOTION TO STRIKE ARANA'S REPRESENTATIVE PAGA CLAIMS 1 demonstirates, a contrary rule would eviscerate PAGA's statute of limitations requirement. If 2 Arana were permitted to continue litigating his PAGA clauns, HNCA would be required to 3 continue litigating thousands of individual PAGA claims despite the fact that not a single 4 allegedly aggrieved employee had provided timely notice to the LWDA. The Court should not 5 transform PAGA's notice requirement into a dead letter. Because all of Arana's PAGA claims 6 fail as a matter of law, he may not represent other allegedly aggrieved employees, 7 G. Because None Of Arana's Stand-alone PAGA Claims Can Proceed. Neither Can Any Derivative Claims 8 9 Because Arana is barredfromproceeding on any of his stand-alone PAGA claims, he is 10 also precludedfromlitigating any PAGA claims that are purely derivative. The Court should 11 strike those claims as well.' 12 H. In The Alternative. The Court Should Strike Arana's PAGA Claims Because They Present Inisurmbuntable Manageability Pjroblems'" 13 14 That Arana's PAGA claims are barred by judicial estoppel, failure to exhaust, and the 15 statute of limitations provides sufficient basis for the Court to grant HNCA's motion. Even setting 16 those aside for the moment, immanageability provides an additional basis for the Court to strike 17 those claims. 18 A PAGA plaintiff has the burden to demonstrate that claims brought in a representative 19 capacity do not pose manageability problems for the Court. See Williams, 3 Cal. 5th at 559 20 (stating that a plaintiff bringing a PAGA representative action must "render trial of the action 21 manageable"). In addition to the authorities cited to in the Spears Motion to Strike and in the 22 December 21 Motion, cases addressing representative actions brought imder the UCL prior to the 23 passage of Proposition 64 offer important guidance. 24 Indeed, before Proposition 64 imposed class certification requirements on representative 25 UCL claims, Califomia courtsfrequentlyexercised their discretion and found that actions could 26 27 ' Arana's derivative claim for waiting time penalties fails for the additional reason that such penalties are precluded under the Califomia Labor Code. That is, an employee seeking to recover damages for meal period violations may 28 not recover derivative waiting time penalties for those same violations. See Naranjo v. Spectrum Sec. Servs., Inc., 40 Cai. App. 5th 444,474 (2019); Ling v. P.F. Chang's China Bistro, Inc., 245 Cal, App. 4th 1242, 1261 (2016). '° The Court should also consider the manageability arguments raised in HNCA's Objections to Plaintiffs' Trial Plan. 15 MEMORANDUM OF POINTS AND AUTHORITIES ISO MOTION TO STRIKE ARANA'S REPRESENTATIVE PAGA CLAIMS 1 not proceed where determining the defendant's liability to nonparties would present significant 2 manageability issues. For example, in Bronco Wine Co. v. Frank A. Logoluso Farms, 214 Cal. 3 App. 3d 699 (1989), the Court of Appeal foimd the trial court abused its discretion by denying a 4 motion to strike the representative action allegationsfroma UCL complaint because representative 5 actions are only appropriate when the alleged unfair business practice is uniform, does not involve 6 the resolution of complex factual issues, and does not pose management problems for the court. 7 Id. at 718-21, There, a grape grower brought a representative UCL action against a winemaker. 8 Each non-party grape grower had a separate contract with the defendant and determining the 9 amount of restitution each non-party grower was entitled to was not an "automatic calculation," 10 Id. at 7 \ 6,720. Given these complexities, the Court of Appeal found that the trial court's denial of 11 the defendant's pretrial motion to strike caused "insurmountable control and management 12 problems," and reversed the judgment in favor of the nonparty growers. Id at 720-21. 13 Similarly, in South Bay Chevrolet v. General Motors Acceptance Corp., 12 Cal. App. 4th 14 861 (1999), the representative plaintiff brought a UCL action on behalf of nonparty dealerships 15 against General Motors based on interest calculations for loan agreements. The court found it 16 was the plaintiffs' burden to establish that the evidence as to the nonparty dealers "was 17 sufficientiy uniform to allow representative treatment...." Id. at 897, Because the presentation of 18 evidence would be highly individualized, requiring the plaintiff to put on "evidence about each 19 dealership's individual understanding based upon the imique disclosures received by such 20 dealership and the written, oral and implied terms ofthe dealership's loan agreements," the 21 plaintiff failed to carry his burden. 7i/. 22 These precedents make clear that a trial court should not allow a PAGA action to proceed 23 on a representative basis when a defendant's liability to other alleged aggrieved employees non- 24 parties represented by the named plaintiff would be unmanageable. When the particular facts and 25 circumstances of a case make clear that a plaintiffs PAGA representative claims present 26 significant management and control problems, as they do here, the court can—and should— 27 dismiss those claims. 28 16 MEMORANDUM OF POINTS AND AUTHORITIES ISO MOTION TO STRIKE ARANA'S REPRESENTATIVE PAGA CLAIMS 1 1, Neither PAGA Claim Related to Whether Employees Ever Performed Work Off the Clock Can Be Manageably Tried 2 3 As pointed out in HNCA's objections to Plaintiffs Trial Plan, Arana (and Spears) are 4 attempting to resurrect an off-the-clock claim the court did not certify. Neither lhal claim nor 5 Arana's off-the-clock PAGA claim is manageable. This Court correctly found in its order 6 denying class certification that HNCA's policies "require that its employees record their actual in 7 and outtimes."RA 439 at 5. That same order found that if HNCA'stimekeepingsystems 8 malfunctioned or was otherwise imavailable for use, those timekeeping systems "have . . . always 9 permitted employees to manually enter their start and stop times." Id. However, Plaintiffs have 10 proposed no method to systematically determine whether employees accurately recorded all their 11 hours worked. 12 TestimonyfromSpears demonstrates how such a trial would proceed. At her deposition, 13 Spears testified that she never performed work off the clock: 14 \ Q. Okay. So there wasn't any pre-shift work that you weren't paid for; correct? 15 A. Correct. 16 Q, And there wasn't any post-shift work that you weren't paid for? 17 A. Correct. 18 19 Long Decl. ^ 7, Ex. F. To the extent an employee such as Spears adhered to HNCA policies and 20 accurately recorded her time, no off the clock work was performed, and there is no basis for 21 PAGA penalties. Plaintiffs' Trial Plan makes no attempt to explain how thefinderof fact could 22 possibly distinguish between such an employee versus another employee who did not record off 23 the clock work. The only way to do so is to ask the employees—each and every one of Ihem.^' 24 Whether any off-the-clock work occurred necessarily requires consideration of evidence specific 25 to each employee in order to establish liability. Stated differently, the Court would have to 26 engage in thousands of mini-trials. Given the number of allegedly aggrieved employees, this is a 27 '' This example underscores that analyzing records alone would not reveal off-the-clock violations. Even Plaintiff's 28 expert, James Toney, who reviewed Computer log-in and timekeeping data conceded that he could determine whether any employee had worked off the clock. Long Decl. 18, Ex. G. 17 MEMORANDUM OF POINTS AND AUTHORITIES ISO MOTION TO STRIKE ARANA'S REPRESENTATIVE PAGA CLAIMS 1 monumental undertaking. Such a trial would be patently unmanageable. 2 2. Arana's Meal Period PAGA Claim Is Similarly Unmanageable. 3 For the reasons set forth in the Spears Motion to Strike, Arana's meal period claim will be 4 entirely unmanageable. It should be stricken as to Arana for the same reasons, 5 3. Arana's Miscalculation PAGA Claim Is Unmanageable 6 Arana's Miscalculation Claim is actually comprised offiveseparate claims. When 7 considered individually, together, and/or along with the other PAGA claims Arana is pursuing, 8 this claim is manageable, 9 a. MedFlxWave And DenFlxWave Payments Mtist Be Proven Individually. Both As To Liability And Damages 11 HNCA employees (but not Arana) received "MedFlxWave" and "DenFlxWave" payments 12 pursuant to a cafeteria benefits plan. If an employee waived medical or dental benefits, the 13 employee would instead receive a small payment from the plan. Whether HNCA was requured to 14 include these payments in the regular rate when calculating overtime depends on the application 15 of what is known as the Cash Benefit Plan Exemption, the legal contours of which are described 16 in the concurrentiy filed Objections to Plaintiffs' Trial Plan. 17 To resolve whether these payments should have been included in the regular rate, and as 18 explained further in HCA's objections to Plaintiffs' Trial Plan, the Court will first have to 19 consider testimony from a number of witnesses regarding the stmcture and administration ofthe 20 cafeteria plan, how payments were made, and how the payroll system was stmctured. This 21 evidentiary chowmg will be comprised of lay and expert witnesses, as well as substantial 22 documentary evidence. The analysis will be complex and fact-mtensive, 23 Any consideration of alleged wage loss and penalties would be even more complex and 24 time-consuming. This will involve a week-by-week analysis of the pay received by each 25 recipient of the MedFlxWave and/or DenFlxWave payments to delermine whether any of them 26 worked overtime and therefore suffered a wage loss. In addition, HNCA will introduce testunony 27 targeting the right to recover some or all of the PAGA penalties Plaintiffs seek to recover. See, 28 e.g, Amaral v. Cintas Corp. No. 2,163 Cal. App. 4th 1157,1213 (2008) ("[T]he court may award 18