Preview
FILED^
1 Timotiiy J. Long (SBN 137591)
Samuel S. Hyde (SBN 327065)
2 GREENBERG TRAURIG, LLP
1201 K Street, Suite 1100 MAR - 6 2020
3 Sacramento, CA 95814
Telephone: 916.442.1111
4 Facsimile: 916.448.1709
lonat(S).gtlaw.com
5 hvdes(a).gtlaw.com
6 Rowena Santos (SBN 210185)
GREENBERG TRAURIG, LLP
. 7 18565 Jamboree Road, Suite 500
Irvine, CA 92612
8 Telephone: 949.732.6500
Facsimile: 949.732.6501
9 santosr(S).gtlaw.com
10 Attomeys for Defendant
11
HEALTH NET OF CALIFORNIA, INC.
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-
of herself and on behalf of all persons CU-OE-GDS (Consolidated witii Case No.
15 similarly situated. 34-2017-00216685-CU-OE-GDS)
Plaintiff,
16 MEMORANDUM OF POINTS AND .
17 AUTHORITIES IN SUPPORT OF ^H
HEALTH NET OF CALIFORNIA, INC., a HEALTH NET OF CALIFORMA, INC.'S n
18 Califomia Corporation; and Does 1 through MOTION TO STRIKE SPEARS'
50, inclusive, REPRESENTATIVE PAGA CLAIMS
19 Date: April 3,2020
Defendants. Time: 1:30 p.m.
20 Dept: 41
Judge: Hon. David De Alba
21 TOMAS R. ARANA, on behalf of himself, all
others similarly situated, . Complaint Filed: April 5,2017
22 FAC Filed: June 29,2017
Plaintiff,
23
Complaint Filed: August 1,2017
24 Consolidated Complaint Filed: Dee. 21,2017
HEALTH NET OF CALIFORNIA, INC., a
25 California corporation; and DOES 1-50,
inclusive,
26
Defendant.
27
28 1
MEMORANDUM OF POINTS AND AUTHORITIES ISO
MOTION TO STRIKE SPEARS' REPRESENTATIVE PAGA CLAIMS
1 TABLE OF CONTENTS
Page
2
3
I. Introduction 6
4 II. Factual and Procedural Background 6
5 A. Spears' LWDA Notice 6
B. The Consolidated Complaint 7
6
C. The Court Denied Plaintiffs' Motion to Certify Their Meal Break, Rest
7 Break, and Off-tiie-Cloek Claims , 8
D. The Court Deferred Ruling on HNCA's Original Motion Attacking Spears'
8 PAGA Claims 8
9 E. Plaintiffs Submit Their Proposed Trial Plan And Attempt To Re-Craft
Their PAGA Claims ....9
10
UI. Argument , ; 10
11 A. The Court HastiieAutiiority to Strike Spears' PAGA Claims 10
12 B. The Court Should Strike Spears' PAGA Rest Break Claim Because It Has
Been Abandoned , .,12
13 C. The Court Should Stiike Spears' New Meal Period PAGA Claim Based on
Judicial Estoppel , 12
14 D. The Court Should Strike Spears' PAGA Claims for Failure to Exhaust Her
Administrative Remedies 14
15
1. Spears Did Not Exhaust The Meal Period PAGA Claim She Now
16 Seeks To Pursue 15
2. Spears' Off The Clock And EMPCenter PAGA Claims Were Never
17 Mentioned In Her LWDA Notice, And Must be Stricken 16
18 3. Plaintiffs' Regular Rate Claim is Unchanged But Was Never
Exhausted for the Reasons Set Forth in HNCA's Prior Motion 16
19 E. Because None Of Spears' Stand-alone PAGA Claims Can Proceed, Neitiier
Can Any Derivative Claims 17
20
F. The Court Should Stiike Spears' Meal Period PAGA and "Miscalculation"
21 PAGA Claim Because They Ai-e Umiianageable 17
1. To Prevail Under the PAGA. Spears Must Prove Each Alleged
22 Underlying Violation for Each Allegedly Aggrieved Employee 17
23 2. Whetiier "Old" or "Re-Crafted" Spears' Meal Period PAGA Claim
Involves Resolving Myriad Individual Facttial Determinations 18
24 3. Spears' Miscalculation PAGA Claim Is Unmanageable 20
25 IV. Conclusion 20
26
27
28
MEMORANDUM OF POINTS AND AUTHORITIES ISO
MOTION TO STRIKE SPEARS' REPRESENTATIVE PAGA CLAIMS
1
TABLE OF AUTHORITIES
2
Page(s)
3
Cases
4
5 Aguilar v. Lerner,
32 Cal. 4tii 974 (2004) 14
6
Amiri v. Cox Commc 'ns Cal, LLC,
7 272 F. Supp. 3d 1187 (CD. Cal. 2017) ,.11
8 Arana v. Health Net of California, Inc.,
^ Case , 7
. Arias v. Superior Court,
46 Cal. 4tii 969 (2009) 8,11, 15,17
11
Augustus V. ABM Security Servs., Inc.,
12 2Cal.5tii257(2016) 19
13 In re BCBG Overtime Cases,
163 Cal. App. 4tii 1293 (2008) ....10, 11
Bowers v. First Student, Inc.,
15 2015 WL 1862914 (CD. Cal. April 23,2015) 11
16
Brinker Rest. Corp. v. Superior Court,
17 53 Cal. 4tii 1004 (2012) 18
18 Bronco Wine Co. v. Frank A. Logoluso Farms,
214 Cal. App. 3d 699 (1989) : 11
19 Brown v. Am. Airlines, Inc.,
2015 WL 6735217 (CD. Cal. Oct. 5,2015) 1,15
20
21
Brown v. Ralphs Grocery Co.,
22 28 Cal. App. 5tii 824 (2018) ...14,15
23 Caliber Bodyworks, Inc. v. Superior Court,
134 Cal. App. 4tii 365 (2005) 15
24 Cottle V. Superior Court,
3 Cal. App. 4th 1367 (1992), , ...............10,11
25
Duran v. U.S. Bank Nat 7 Ass 'n,
27 59 Cal. 4tii 1 (2014) 18
28 3
MEMORANDUM OF POINTS AND AUTHORITIES ISO
MOTION TO STRIKE SPEARS' REPRESENTATIVE PAGA CLAIMS
1 Esparza V. Safeway, Inc.,
36 Cal. App. 5tii 42 (2019) 10
2
Hanna v. LA. Cty. Sheriff's Dep't,
3
102 Cal. App. 4tii 887 (2002) 12
4
Jackson V. County ofLos Angeles,
5 60 Cal. App. 4tii 171 (1997) 12
6 James H. v. Superior Court,
77 Cal. App. 3d 169 (1978) 11
7
Kraus V. Trinity Management Service, Inc.,
8 23 Cal.4tii 116(2000) .11
9
Levin v. Ligon,
10 140 Cal. App. 4tii 1456 (2006) 14
11 Lingv. P.F. Chang's China Bistro, Inc.,
245 Cal. App. 4th 1242 (2016) 17
12
Litty V. Merrill Lynch & Co., Inc.,
13 2014 WL 5904904 (CD. Cal. Nov. 10, 2014) 11
14
Naranjo v. Spectrum Sec. Servs., Inc.,
15 40 Cal. App. 5tii 444 (2019) 17
16 Ortiz V. CVS Caremark Corp.,
2014 WL 1117614 (N.D. Cal. Mar. 19, 2014) 10,11
17
Price V. Starbucks Corp.,
18 192 Cal. App. 4tii 1136 (2011) , ., ............17
19 Raphael v. Tesoro Ref. & Mktg. Co. LLC,
20 2015 WL 5680310 (CD. Cal. Sept. 25,2015) 11
21 Ruse V. Medlronics, Inc.,
107 Cal. App. 3d 150 (1980) 10
22
Salazar v. McDonald's Corp.,
23 2017 WL 88999 (N.D. Cal. Jan. 5,2017) .............11
24 Wal-Mart Stores, Inc. v. Dukes,
25 564 U.S. 338(2011) 18
26 Williams v. Superior Court,
3 Cal. 5tii 531 (2017) ; 17,18,19
27
28
MEMORANDUM OF POINTS AND AUTHORITIES ISO
MOTION TO STRIKE SPEARS' REPRESENTATIVE PAGA CLAIMS
1 Statutes
2 Cal. Civ. Proc. Code §§ 128(a)(8), 187 ; 10
^ Cal. Civ. Proc. Code §583.150 10
^ Cai. Gov't Code § 68070 , 10
5
Cal. Lab. Code § 2699(c) 17
6
Other Authorities
7
Cal. Rules of Court, rule 3.400(a) ; 11
8
"EMPCenter Timekeeping System OfftiieClock PAGA Claim" (tiie "EMPCenter
9 PAGA Claim") : 9
10 Merriam-Webster Online Dictionary, http://www.merriam-webster.com (Mar. 5,
11 2020). 14
12 Spears' "Miscalculation Claim" , 16
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
MEMORANDUM OF POINTS AND AUTHORITIES ISO
MOTION TO STRIKE SPEARS' REPRESENTATIVE PAGA CLAIMS
1 I. INTRODUCTION
2 HNCA requests that the Court strike Spears' PAGA claims because she has failed to
3 exhaust the administrative process (as to her regular rate, meal period, and off-the-clock PAGA
4 claims); she has abandoned her PAGA rest break claim; she is judicially estopped from trying to
5 re-erafl her meal period PAGA claim; and whether old or re-crafted. Spears' PAGA claims are
6 unmanageable.
7 When Spearsfirstpresented her PAGA claims to the Labor and Workforce Development
g Agency ("LWDA"), which she was required to do before asserting them in court, Spears sought
9 PAGA penalties for three separate claims, as well as two additional derivative claims. In Court,
10 however. Spears is trying to pursue PAGA claims that are inconsistent with her LWDA claims
11 (such as her new meal period claim), claims she never presented to the LWDA (such as her new
12 meal period claim, her off-the-clock claims, and her miscalculation claim), and claims that are
13 umnanageable (all of them).
14 On December 21,2018, and pursuant to a stipulated court order. Defendant Health Net of
15 Califomia, Inc. ("HNCA") filed a motion attacking Spears' PAGA claims (the "December 21
16 Motion").' See RA 315,321.^ The Court deferred ruling on that motion, and specifically held
17 that HNCA could renew it at a later date. That time has come. Spears has stated that she does not
18 need to engage in finther discovery concerning her PAGA claims and she and Arana (collectively
19 "Plaintiffs") havefileda proposed trial plan (the "Trial Plan"). HNCA therefore renews its
20 December 21 Motion, incorporates by reference its priorfilingsand all the supporting papers (as
21 permitted by Court order), and includes additional arguments prompted by Plaintiffs' proposed
22 Trial Plan. The Court should grant this motion to strike.
23 n. FACTUAL AND PROCEDURAL BACKGROUND
24 A. Spears* LWDA Notite
25 On April 5,2017, Spears gave written notice to the LWDA of the specific Labor Code
26 violations that served as the foundation ofher PAGA claims. Those claims were: (1) failure to
27
' HNCA simultaneously moved to strike Plaintiff Tomas Arana's ("Arana") PAGA claims (the "Arana Motion to
2g Strike"). See RA 316, 322.
^ Throughout this brief, citations are to the Register of Actions ("RA") in this case.
6
MEMORANDUM OF POINTS AND AUTHORITIES ISO
MOTION TO STRIKE SPEARS' REPRESENTATIVE PAGA CLAIMS
1 accurately pay overtime due to HNCA's failure to include "non-discretionary incentive"
2 payments m her regular rate of pay; (2) failiue to provide employees with on-time meal periods,
3 as well as a purported failure to provide employees with second meal periods when required; and
4 (3) failm-e to timely provide employees with ten-minute rest periods. Declaration of Timothy J.
5 Long ("Long Decl.") ^ 2, Ex. A. Based on these claims. Spears also asserted derivative claims
6 for (1) failure to provide employees with accurate wage statements; and (2) failure to timely pay
7 employees for all wages due following termuiation. Id. Spears' LWDA notice did not mention
8 any other claims (including off-the-clock claims), ^ nor did it allege that "MedFlxWave"
9 payments, "DenFlxWave" payments, SPOT Awards, ACA Incentive Payments, or Wellness
10 Incentive Payments should have been included in the regular rate of pay calculation. See
11 generally id.
12 B. The Consolidated Complaint
13 On October 11,2017, Spears' lawsuit was ordered consolidated for all purposes with
14 Arana v. Health Net of California, Inc., Case no. 34-2017-00216685, witii Spears' lawsuit
15 designated as lead case. RA 18. On December 21,2017, Plaintiffs filed a Consolidated
16 Complaint. RA66. The Consolidated Complaint includes claims based on HNCA's alleged meal
17 and rest period violations, and its alleged failxu'e to correctly calculate employees' regular rate of
18 pay. Id. at 8-10. It fiirther alleges that certain HNCA employees were misclassified as exempt,
19 that HNCA employees worked off the clock and were not compensated for such work, that
20 HNCA improperly failed to include "shift differential pay" in employees' regular rate, and that
21 HNCA used improper rounding practices.'' Id. at 6-8. These claims, as well as the derivative
22 claims for alleged inaccurate wage statements and failure to timely pay employees for all wages
23 due on termination, form the bases of the PAGA claims alleged in the Consolidated Complaint.
24
25
26
^ It is unsurprising that Spears never alleged an off-the-clock claim since, according to her testimony, she never
27 worked off the clock. Long Decl. 16, Ex. E at 39:7-40:1.
^ The claims for improper rounding, misclassification, and off-Ae-clock work do not appear in Spears' LWDA
2g Notice. Those claims were brought by Arana, and are discussed in greater detail in HNCA's Motion to Strike
Arana's Representative PAGA Claims, filed concurrently herewith.
7
MEMORANDUM OF POINTS AND AUTHORITIES ISO ^
MOTION TO STRIKE SPEARS' REPRESENTATIVE PAGA CLAIMS
1 C. The Court Denied Plaintiffs' Motion to Certify Their Meal Break. Rest Break,
and Off-the-Clock Clauns
2
3 On December 21,2018, Plaintiffs filed a motion for class certification, seeking
4 certification of three core claims: denial of meal periods, denial of rest breaks, and failure to
5 compensate employees for off-the clock work. RA 307. As explained in greater detail in
6 HNCA's Motion to Strike Arana's Representative PAGA Claims filed concurrentiy herewith, the
7 Court (Judge Perkins) denied class certification as to these claims, with a limited exception for an
8 issue class.^ See RA 439 at 5-6.
9 D. The Court Deferred Ruling on HNCA's Original Motion Attacking Spears'
PAGA Claims
10
11 In its December 21 Motion, HNCA sought to strike Spears' PAGA claims. RA 315,321.
12 HNCA argued that Spears had failed to exhaust her administrative remedies as to her PAGA
13 regular rate claim because the payments referenced in her LWDA Notice are distinct fiwm the
14 payments Spears is now attempting to litigate in comt. RA. 315 at 8-11. In short, she has failed
15 to describe the particular "facts and theories" supporting her claim in her LWDA Notice. See
16 Arias v. Superior Court, 46 Cal. 4tii 969,981 (2009). In addition, HNCA contended tiiat Spears
17 could not proceed with her PAGA claims based upon an alleged denial of meal and rest breaks
18 because resolution of those claims would require a multitude of highly individualized factual
19 determinations, and any trial on those claims would therefore be unmanageable. Id. at 11-19.
20 As mentioned above, the Court denied the December 21 Motion without prejudice. In
21 doing so, the Court expressly stated that HNCA could renew its motions at a later date and
22 incorporate its previous filings by reference. See RA 439; Long Decl. f 3, Ex. B.^
23
24 ^ -•
^ The Court declined to certify the proposed ofT-the clock subclasses, except to resolve a single issue relating to "a
25 small percentage of work shifts" involving employees at the beginning of their shifts: "[d]id the time recording
systems in effect diuing the relevant periods prevent an accurate capture of the start time ofthe class members?" RA
26 439 at 6.
^ The Court further ordered Plaintifis to submit a trial plan as to all remaining claims at issue, and instructed the
27 parties to address Questions 1-9 ofthe Supplemental Case Management Questionnaire for PAGA Cases and
Questions 1-8 ofthe Minute Order found at Register of Actions # 440. See Long Decl. 14, Ex. C at 30:14-26. In
23 other words, the Court deferred ruling on the merits of HNCA's December 21 Motion to allow Plaintiff to submit a
trial plan.
8
MEMORANDUM OF POINTS AND AUTHORITIES ISO
MOTION TO STRIKE SPEARS' REPRESENTATIVE PAGA CLAIMS
1 E. Plaintiffs Submit Their Proposed Trial Plan And Attempt To Re-Craft Their
PAGA Claims
2
3 Plaintiffs have now submitted their Trial Plan setting forth their intent to present four
4 discrete claims at trial, one of which was not certified by this Court because the disputes were too
5 individualized, and two of which are brand new. First, Plaintiffs seek to pursue a "Miscalculation
6 Claim," which contends that HNCA miscalculated the regular rate of pay by failing to include
7 "MedFlxWave" payments, "DenFlxWave" payments, SPOT Awards, ACA Incentive Payments,
8 and Wellness Incentive Payments when calculating overtime.^ Second, Plaintiffs seek to pursue
9 an "Off the Clock Claim." As mentioned above and discussed in greater detail in the
10 concurrently filed Arana Motion to Strike, the Court rejected Plaintiffs' attempt to certify an "off-
11 the-clock class" afterfindingthat individual issues would predominate in determining whether
12 any off-the-clock violations occurred. Instead, the Court certified a single issue conceming
13 HNCA's timekeeping system: whether "the time recording systems in effect during the relevant
14 periods prevent an accurate capture of the start time of the class members." Plaintiffs' new Off
15 the Clock Claim is an attempt to maneuver around the Court's order. Third, Plaintiffs allege a
16 "Meal Period PAGA Claim," contending that HNCA's failure to advise its employees to use the
17 "DTO" payroll code "resulted in niunerous unpaid meal period claims." Finally, Plaintiffs allege
18 an "EMPCenter Timekeeping System OfftiieClock PAGA Claim" (the "EMPCenter PAGA
19 Claim"), which alleges thatfi*omJanuary 1,2017 to the present, HNCA's policies "uniformly
20 failed to advise [employees] that they could manually enter their start and stoptimes,"resulting in
21 those employees performing work off the clock. Plaintiffs have not previously allegedtiieselatter
22 two claims. With respect to the Miscalculation Claim and Off the Clock Claim, Plaintiffs propose
23 to try their derivative PAGA claims for failm-e to provide employees with accurate wage
24 statements and failure totimelypay employees following termination simultaneously with the
25 class claims. RA 481 at 0-1. Importantly, Spears has reported to the Court that she does not
26 need to do any additional discovery to prosecute her claims and proceed to trial. See Long Decl.
27
28 ' HNCA refers to the Court to its concurrently filed Objections to Plaintifis' Trial Plan for a summary of the claims
that comprise the Miscalculation Claim.
9
MEMORANDUM OF POINTS AND AUTHORITIES ISO
MOTION TO STRIKE SPEARS' REPRESENTATIVE PAGA CLAIMS
1 If 4, Ex. C at 25:20-27. Thus,tiieCourt has all it needs to grant this Motion to Stiike, and tiie
2 Court should do so.
3 HI. ARGUMENT
4 A. The Court Has the Authority to Strike Spears' PAGA Claims.
5 There is no doubt that this Court has the authority to decide if a PAGA claim, rendered
6 unmanageable by individual issues (or inappropriate for another reason), can proceed to trial. As
7 an initial matter, both Spears and Arana agreed to the exact motion that is now before the Court,
8 including the nature of the motion, the timing ofthe motion, and the relief sought pursuant to a
9 stipulated order dated August 8,2018. 5eeRA 257^3.
10 As HNCA pointed out (and the Court agreed) when it filed the December 21 Motion,
11 Califomia courts endorse post-pleading "motions to strike" representative allegations, because
12 such motions are "not a motion to strike as used during the pleading stage," but rather ask the
13 courts to weigh evidence and determine whether the particular claims are susceptible to litigation
14 on a representative basis. In re BCBG Overtime Cases, 163 Cal. App. 4tii 1293, 1297-1301
15 (2008); see also, e.g, Ortiz v. CVS Caremark Corp., 2014 WL 1117614, at *4 (N.D. Cal. Mar.
16 19,2014). Manageability is generally not decided at the pleading stage of a lawsuit. Rose v.
17 Medtronics, Inc., 107 Cal. App. 3d 150,154 (1980). Witiiin the last year,tiiecourt in Esparza v.
18 Safeway, Inc., 36 Cal. App. 5th 42 (2019), became the latest court to follow the majority trend in
19 granting a post-pleading motion to strike a plaintiff's PAGA claim.
20 Moreover, Courts have the statutory authority to adopt procedures and processes
21 necessary to carry out justice, even if not expressly prescribed by law. Cal. Civ. Proc. Code §§
22 128(a)(8), 187; Cal. Gov't Code § 68070. Courts even havetiiepower to dismiss under tiieir
23 "inherent authority." Cal. Civ. Proc. Code § 583.150. Furthermore, "courts have inherent equity,
24 supervisory and administrative powers as well as inherent power to control litigation before
25 them," thereby allowing them to fashion "new forms of procedures when required to deal with the
26 rights of the parties and to manage the caseload of the court." Cottle v. Superior Court, 3 Cal.
27 App. 4th 1367,1377 (1992). This "power arisesfi-omnecessity where, in the absence of any
28 previously established procedural rule,rightswould be lost or the court would be unable to
10
MEMORANDUM OF POINTS AND AUTHORITIES ISO
MOTION TO STRIKE SPEARS' REPRESENTATIVE PAGA CLAIMS
1 fimction." Id.
2 Califomia courts have fashioned new forms of procedures when required to deal with the
3 rights of the parties and to rnanage the caseload of the court. Indeed, by definition, complex cases
4 "require[] exceptional judicial management to avoid placing unnecessary burdens on the court or
5 the litigants...." Cal. Rules of Court., rule 3.400(a). Thus, for example, motions to strike class
6 action allegations have been permitted to address the propriety of class certification, even though
7 the statutes governing motions to strike dictate that they are for use at the pleadings stage. See,
8 e.g.. In re BCBG, 163 Cal. App. 4tii at 1299; see also James H. v. Superior Court, 77 Cal. App.
9 3d 169,175 (1978).*
10 Manageability of a case is not only part of the Court's inherent power and authority to
11 manage its docket and calendar, but also mirrors the method utilized by state courts with respect
12 to representative UCL claims prior to the passage of Proposition 64—^which required UCL
13 actions to meet class action requirements. In fact, the Supreme Court m Arias v. Superior Court,
14 46 Cal. 4th 969,981 (2009), cited its earlier decision in Kraus v. Trinity Management Service,
15 Inc., 23 Cal. 4th 116 (2000), and held that PAGA plaintiffs could pursue representative actions in
16 the same maimer that UCL plaintiffs did prior to Proposition 64's passage. Arias, 46 Cal. 4th at
17 982-83. Prior to Proposition 64, Courts allowed "pretrial motions to stiike" pre-2004 UCL
18 representative allegations that would cause "insurmountable control and management problems."
19 Bronco Wine Co. v. Frank A. Logoluso Farms, 214 Cal. App. 3d 699, 717-21 (1989).' This topic
20 is addressed at greater length in the December 21 Motion and is incorporated herein by reference.
21 There should be no question that this Court can and should grant this Motion.
22
23 ^ It also bears mentionmg that a different judge of this Court has ah-eady recognized that representative PAGA claims
can be stricken or dismissed when they present insurmountable manageability problems. Long Decl. | S, Ex. D. As
24 the Court noted in that case, cases such as Cottle "illustrate that courts have discretion to create workable solutions
when faced with cases threatening the manageability of their docket." Id, Ex. D at 6. As in this case, the Court
25 ordered plaintiffs to file a trial plan and "present a proposed means by which the PAGA claims, and Plaintiffs as
PAGA representative! could be efficiently managed going forward." Id, Ex. D at 7-8.
26 ' Federal cases fiirther support the conclusion diat plaintiff bringing PAGA representative actions must demonstrate
manageability. See Amiri v. Cox Commc'ns Cal., LLC,212 F. Supp. 3d 1187,1195 (CD. Cal. 2017); Sa/azar v.
27 McDonald's Corp., 2017 WL 88999, at •7-9 (N.D. Cal. Jan. 5,2017); Brown v. Am. Airlines, Inc., 2015 WL
6735217 (CD. CaL Oct. 5, 2015); Rcqjfiael v. Tesoro Ref. & Mktg. Co. LLC, 2015 WL 5680310, at ^2-3 (CD. Cal.
28 Sept. 25,2015); Bowers v. First Student, Inc., 2015 WL 1862914, at *4 (CD. Cal. AprU 23,2015); Litty v
Lynch & Co., Inc., 2014 WL 5904904, at *3 (CD. Cal. Nov. 10,2014); Ortiz, 2014 WL 1117614, at *3-A
11
MEMORANDUM OF POINTS AND AUTHORITIES ISO
MOTION TO STRIKE SPEARS' REPRESENTATIVE PAGA CLAIMS
1 B. The Court Should Strike Spears' PAGA Rest Break Claim Because It Has
Been Abandoned
2
3 As the Court knows, it declined to certify Plaintiffs' putative class claims for denial of rest
4 periods. It should therefore come as no surprise that Plaintiffs do not mention a PAGA rest break
5 claim in their proposed trial plan. See generally RA 481. Spears has evidently abandoned this
6 PAGA claim and the Court should strike it.
7 C. The Court Should Strike Spears' New Meal Period PAGA Claim Based on
Judicial Estoppel
8
9 Spears' has not previously alleged her Meal Period PAGA Claim in this case. Now, more
10 than two years into this litigation. Spears has invented a new claim based on how time records
11 were coded using a code known as "DTO." Id. at 9-11. The only conceivable reason for doing
12 so at this late date is a perceived strategic advantage. Judicial estoppel exists to prevent such
13 tactics.
14 "The gravamen of judicial estoppel is the intentional assertion of an inconsistent position
15 that perverts the judicial machinery." Jackson v. County ofLos Angeles, 60 Cal. App. 4th 171,
16 181 (1997). The doctrine most appropriately applies when: "(1) the same party has taken two
17 positions; (2) the positions were taken injudicial or quasi-judicial administrative proceedings; (3)
18 the party was suecessfiil in asserting the first position (i.e., the tribunal adopted the position or
19 accepted it as tme); (4) the two positions are totally inconsistent; and (5) thefirstposition was not
20 taken as a result of ignorance,fi-aud,or mistake." Id at 183. Judicial estoppel is commonly
21 invoked to prevent partiesfi"om"play[ing] fast and loose witii the courts." Hanrux v. L.A. Cty.
22 Sheriff's Dep't, 102 Cal. App. 4tii 887, 897 (2002).
23 Thefirstelement is plainly satisfied. After almost two years of litigating one meal period
24 theory. Spears (in conjimction with Arana) submitted a trial plan with a completely new theory.
25 The original theory, set forth in Spears' LWDA Notice, contends that "[a]s a result of tiieir
26 rigorous work schedules, PLAINTIFF and other CALIFORNIA CLASS members were also firom
27
28 The "Meal Period PAGA Claim" set forth in the Trial Plan alleges HNCA "violated Califomia law by failing to
advise the Aggrieved Employees to use the pay code "DTO" for payment of meal period premiums." RA 481 at 9.
12
MEMORANDUM OF POINTS AND AUTHORITIES ISO
MOTION TO STRIKE SPEARS' REPRESENTATIVE PAGA CLAIMS
1 time to time unable to take off duty meal breaks and were notfiillyrelieved of duty for meal
2 periods." Long Decl. T[ 2, Ex. A at 5,112. Spears tells a similar story in her deposition, stating
3 that she did not take her meal periods on time due to "work that was provided to [her]." Id. ^ 6,
4 Ex. E at 39:7-40:1. In other words. Spears believed that because of the demanding nature ofher
5 work, her supervisors expected her to work through her meal period notwithstanding the legal
6 requirement that she be afforded a meal period on time. Spears has advanced this theory
7 consistently throughout this litigation. Yet now, for thefirsttime. Spears argues that HNCA
8 violated the Labor Code by "failing to advise the Aggrieved Employees to use the pay code
9 'DTO' for payment of meal period premiums." RA 481 at 9. This new theory relating to alleged
10 coding errors is wholly distinctfi-om,and inconsistent with, whether employees were required to
11 skip meal periods due to their workload. How time is coded has nothing to do with whether an
12 employee was provided with a meal break.
13 Second, Spears has asserted both her old and new positions in this case. Spears alleged
14 her old theory in the Consolidated Complaint, which stated that putative class members were not
15 provided with meal periods due to (among other things) "chronically understaffing each work
16 shift with not enough workers [and] imposing so much work on each employee such that it made
17 it unlikely that an employee would be able to take their breaks if they wanted tofinishtheir work
18 on time." RA 66 at 8. Her re-crafted theory related to the "DTO" code has now been alleged in
19 tiie Trial Plan. RA 481 at 9-11.
20 Thetiiirdprong is also satisfied because the Court previously accepted thefirsttheory as
21 tme in resolving Plaintiffs' motionforclass certification. As the Court noted in its order,
22 "Plaintiff's theory is . . . premised upon break violations caused by pressures ofthe employees'
23 work." RA 439 at 5. The Court plainly relied on this theory in concluding that Plaintiffs' meal
24 period claim could not be certified.
25 Fourth, the two theories are plainly inconsistent. The notion that meal period violations
26 occurred because of an alleged coding error is entirely differentfi-omwhat has previously been
27 alleged in this case, and is inconsistent with a theory that aggrieved employees were forced to
28
13
MEMORANDUM OF POINTS AND AUTHORITIES ISO
MOTION TO STRIKE SPEARS' REPRESENTATIVE PAGA CLAIMS
1 miss meal breaks due to the press of other business. These two theories cannot be reconciled.''
2 Finally, the fifth prong is satisfied because there is no hint that Spears took her original
3 position by ignorance,fi-aud,or mistake. As best as HNCA can tell. Spears' new Meal Period
4 PAGA Claim derivesfiromthe deposition of Diane Rodes. In that deposition, Ms. Rodes testified
5 that until January 1,2017, HNCA supervisors used the "DTO" code to record payment of meal
6 period premiums. Long Decl. T[ 7, Ex. F at 70:8-25. That deposition occurred on May 2,2018,
7 nearly two years ago. See id. The notion that Spears had been ignorant of these facts until
8 recently would be false. The only plausible explanation is that Spears has concocted a new theory
9 in an attempt to avoid the consequences of the Court's class certification order. This is precisely
10 the type of maneuver that judicial estoppel is designed to protect against.
11 The end result of chicanery is that both the Court and HNCA must aim at a moving target.
12 See Aguilar v. Lerner, 32 Cal. 4th 974,986 (2004) (judicial estoppel is applied "to maintain the
13 integrity of the judicial system and to protect partiesfi-omopponents' unfair strategies."). HNCA
14 has constmcted its defense, conducted discovery, and prepared for trial in reasonable reliance on
15 Spears' assertions in her LWDA Notice and in the Consolidated Complaint. If Spears is allpwed
16 to morph her meal period theory into something else entirely, much of that time will have been
17 wasted, greatiy prejudicing HNCA. See Levin v. Ligon, 140 Cal. App. 4tii 1456,1483 (2006)
18 (trial court may consider prejudice in deciding whether to apply judicial estoppel). The Court
19 should not coimtenance such gamesmanship, and should strike this new meal period PAGA claim
20 based on the doctrine of judicial estoppel.
21 D. The Court Should Strike Spears* PAGA Claims For Failure To Exhaust Her
Administrative Remedies
22
PAGA claims are limited under Califomia law by the contents of the written notice filed
23
witii tiie LWDA. Brown v. Ralphs Grocery Co., 28 Cal. App. 5tii 824, 837-38 (2018). The
24
PAGA requires that an allegedly aggrieved employee "give written notice ofthe alleged Labor
25
26
" Inconsistent theories are those that are "incoherent or illogical in thought or actions." Merriam-Webster Online
27 Dictionary, http://www.merriam-webster.com (Mar. 5,2020). Here, there is no logical connection between Spears'
two meal period claims.
28 Moreover, this new Meal Period PAGA Claim fails to state a legal claim, to wit, there is no law requiring
employers to advise Aggrieved Employees to input the pay code "DTO" for payment of meal period premiums.
14
MEMORANDUM OF POINTS AND AUTHORITIES ISO
MOTION TO STRIKE SPEARS' REPRESENTATIVE PAGA CLAIMS
1 Code violation to both the employer and the [LWDA], and the notice must describe the facts and
2 theories supporting the violation." Arias, 46 Cal. 4th at 981 (quoting Cal. Lab. Code §
3 2699.3(a)(1)). "Proper notice under section 2699.3 is a 'condition' of a PAGA lawsuit." Brown,
4 28 Cal. App. 5th at 835 (citations omitted); Caliber Bodyworks, Inc. v. Superior Court, 134 Cal.
5 App. 4tii 365, 371 (2005).
6 The Court in Brown held that that a plaintiff must do more than "parrot[] the allegedly
7 violated Labor Code provisions." Brown, 28 Cal. App. 5th at 837. Thus, allegations that
8 employees "did not take all meal and rest periods arid were not properly compensated for missed
9 meal and rest periods" were deemed insufficient. Id Such conclusory statements "did not give
10 sufficient information for the LWDA to assess the seriousness of the alleged violations and
11 decide whether to allocate scarce resources to an investigation, or for defendants to determine
12 what policies or practices were being complained of, have an opportunity to cure the violations,
13 and prepare a meaningfiil response." Id. at 837-38. Indeed, the sole allegation that was found to
14 be sufficient was plaintiffs' contention that the employers' wage statements "fail[ed] to include
15 the name and address of the legal entity that is the employer." Id. at 838. Such an allegation
16 would enable an employer to consult its wage statements, determine whether the name and
17 address were correct, and take corrective action as needed.
18 Here, because Spears did not notify the LWDA of the "facts and theories supporting the
19 violation" with the requisite specificity, the following claims should be stricken for failure to
20 exhaust administrative remedies. See id. at 835.
21 1. Spears Did Not Exhaust HER Meal Period PAGA Claim She Now
Seeks To Pursue
22
23 As set forth above in the discussion of judicial estoppel. Spears' LWDA Notice contains
24 no discussion of the "DTO" code, or any other code for that matter^ Because Spears never
25 alleged this theory in her LWDA Notice, neither the LWDA nor HNCA were ever given the
26 opportunity to investigate this allegation, in clear contravention of the purpose of the exhaustion
27 requirement. See Brown, 28 Cal. App. 5th at 837 (notice should "allow the LWDA to
28 intelligently assess the seriousness of the alleged violations or give the employer enough
15
MEMORANDUM OF POINTS AND AUTHORITIES ISO
MOTION TO STRIKE SPEARS' REPRESENTATFVE PAGA CLAIMS
1 information to determine what policies or practices are being complained of so as to know
2 whether to fold orfight"(intemal quotation marks omitted)). This new theory was not presented
3 in the LWDA Notice, and the Court should therefore strike it.
4 2. Spears' Off The Clock And EMPCenter PAGA Clauns Were Never
Mentioned In Her LWDA Notice. And Must be Stricken
5
6 An examination of Spears' LWDA Notice reveals a complete lack of any allegations
7 related to working off the clock. Based upon the LWDA Notice, it would be impossible for either
8 the LWDA or HNCA to know that Spears intended to assert a PAGA claim premised on work
9 performed off the clock. Nor did the LWDA Notice reveal that Spears intended to assert any
10 claims based on the EMPCentertimekeepingsystem. The EMPCenter is not even mentioned in
11 the LWDA Notice. Absent such notice, neither the Off the Clock PAGA Claim nor the
12 EMPCenter PAGA Claim can stand.
13 3. Plaintiffs' Miscalculation Claim Was Never Exhausted
14 As explained in HNCA's December 21 Motion, Spears never exhausted the regular rate
15 claim she now seeks to assert under PAGA as her "Miscalculation Claim." See RA 315 at 8-11.
16 HNCA incorporates those arguments herein.
17 Spears' "Miscalculation Claim" contends that HNCA miscalculated the regular rate of pay
18 by failing to include "MedFlxWave" payments, "DenFlxWave" payments, SPOT Awards, ACA
19 Incentive Payments, and Wellness Incentive Payments when calculating overtime. None of these
20 payments was ever mentioned in her LWDA Notice. That Notice alleged that HNCA improperly
21 failed to include "non-discretionary incentive" payments made to employeesformeeting "various
22 performance goals," including "health benefits cash out options." Long Decl. 12, Ex. A at 4
23 ^10. None ofthefivepayments now alleged in the Miscalculation Claim can be fairly described
24 in this manner. The only payment that even comes close is the "MedFlxWave" payment. But, as
25 explained in the December 21 Motion, that payment had nothing to do with an employees' job
26 performance. See RA 315 at 10-11. Spears received this benefit because she waived medical
27 coverage, not because of how she performed her job.
28 The payments now at issue in Spears' Miscalculation Claim. This claim should therefore
16
' MEMORANDUM OF POINTS AND AUTHORITIES ISO
MOTION TO STRIKE SPEARS' REPRESENTATIVE PAGA CLAIMS
1 be stricken.
2 E. Because None Of Spears' Stand-alone PAGA Claims Can Proceed. Neither
Can Any Derivative Claims
^
4 Because Spears is barredfi-omproceeding on any of the stand-alone PAGA claims set
5 forth in the proposed Trial Plan, she is also precludedfi-omlitigating any PAGA claims that are
6 purely derivative of those claims. The Court should strike those claims as well.^^
7 F. The Court Should Strike Spears' Meal Period PAGA and "Miscalculation"
^ PAGA Claim Because They Are Unmanageable?'*
1. To Prevail Under the PAGA. Spears Must Prove Each Alleged
9 Underlying Violation for Each Allegediv Aggrieved Employee
10 Recovery under the PAGA is predicated on a plaintifffirstestablishing that the defendant
11 violated the Labor Code. See Arias, 46 Cal. 4th at 987. By the same token, where an underlying
12 cause of action fails, the plaintiffs PAGA cause of action also fails. Price v. Starbucks Corp.,
13 192 Cal. App. 4tii 1136, 1147 (2011). Critically, "in a PAGA action,tiieburden is ontiieplaintiff
14 to establish any violations of the Labor Code...." Williams v. Superior Court, 3 Cal. 5th 531,
15 547(2017).
16 The parties agree, and in fact Plaintiffs themselves have argued, that in order to prevail on
17 their PAGA claims, they must prove each and every violation with regard to each and every
18 allegedly aggrieved employee on whose behalf they seek to recover PAGA penalties. Oppo. To
19 Mtii. at 8:12-9:2 (citing Zayers v. Kiewit Infrastructure W. Co., 2017 WL 7058141, at *8 (CD.
20 Cal. Nov. 9,2017), and Hibbs-kines v. Seagate Techs., LLC, 2009 WL 513496, at *4 (N.D. Cal.
21 Mar. 2, 2009)). Thus, Plaintiffs must prove each alleged Labor Code violation not only for
22 themselves but for each allegedly aggrieved employee that they purportedly represent. See
23 Williams, 3 Cal. 5tii at 547-48 (citing Sakkab v. Luxottica Retail NAm., Inc., 802 F.3d 425,438
24 (9tii Cir. 2015)); Cal. Lab. Code § 2699(c) (defming "aggrieved employee"), (f)(2) (penalties may
25
26 Spears' derivative claim for waiting time penalties fails for fhe additional reason that such penalties are precluded
under the Labor Code. That is, an employee seeking to recover damages for meal period violations may not recover
27 derivative waiting time penalties for those same violations. See Naranjo v. Spectrum Sec. Servs., Inc., 40 Cal. App.
5th 444,474 (2019); Ling v. P.F. Chang's China Bistro, Inc., 245 Cal. App. 4th 1242,126I (2016).
28 ^* The Court should also consider HNCA's concurrently filed objections to Plaintiffs' Trial Plan when evaluating
these manageability arguments.
17
MEMORANDUM OF POINTS AND AUTHORITIES ISO
MOTION TO STRIKE SPEARS' REPRESENTATIVE PAGA CLAIMS
1 be awarded for each "aggrieved employee" per pay period). Moreover, HNCA is entitied to
2 challenge each and every one of the more than 5,600 allegedly aggrieved employees' right to
3 recovery. Both the United States and Califomia Supreme Courts recognize HNCA's due process
4 right to do so. See Wal-Mart Stores, Inc. v. Dukes, 564 U.S. 338,366 (2011); Duran v. U.S. Bank
5 Nat'l Ass'n, 59 Cal. 4tii 1,29 (2014).
6 In proving each PAGA claim. Plaintiffs must also explain to the Court how they will do
7 so efficiently and in a manner that is manageable—i.e., without a trial devolving into thousands
8 of mini-trials and individualized disputes. Plaintiffs bear the burden of demonstrating
9 manageability. See Williams, 3 Cal. 5th at 559 (plaintiff in a PAGA case must "render trial of the
10 action manageable"). And because HNCA has a right to challenge the recovery of each of the
11 thousands of allegedly aggrieved employees—a process that could consume months of trial and
12 raise uncountable individualized factual issues—^there should be littie doubt that Spears' PAGA
13 claims pose serious management problems for the Court.
14 2. Whether "Old" or "Re-Crafted" Spears* Meal Period PAGA Claim
Involves Resolving Myriad Individual Factual Determinations
15
16 In an attempt to circumvent the Court's ruling that individual issues predominate in
17 Plaintiffs' meal period putative class claim. Spears now asserts an entirely new claim, a "Meal
18 Period PAGA Claim" alleging HNCA "violated Califomia law by failing to advise the Aggrieved
19 Employees to use the pay code "DTO" for payment of meal period premiums." See RA 481 at 9.
20 As mentioned above in footnote 13, this new claim does not state a legally cognizable
21 claim under Califomia law. An employer is not obligated to advise an employee to use a certain
22 pay code for meal period premiums. Instead, HNCA "satisfies [its] obligation [to provide a meal
23 period] if it relieves its employees of all duty, relinquishes control over their activities and
24 permits them a reasonable opportunity to take an unintermpted 30-minute break, and does not
25 impede or discourage themfi-omdoing so." Brinker Rest. Corp. v. Superior Court, 53 Cal. 4th
26 1004,1040 (2012). If the employer does so, buttiieemployee chooses not to take a meal period,
27 then there is no violation. Id. at 1040-41. Thus, to prevail on her meal period PAGA claim,
28 Spears must prove, for each alleged meal period violation, that HNCA did not make available "a
18
MEMORANDUM OF POINTS AND AUTHORITIES ISO
MOTION TO STRIKE SPEARS' REPRESENTATIVE PAGA CLAIMS
1 meal period of not less than 30 minutes once an employee has worked for five hours." Augustus
2 V. ABM Security Servs., Inc., 2 Cal. 5tii 257,266 (2016) (citations omitted). And it is Spears'
3 burden to prove each alleged meal period violation not only for herself but for each of the other
4 allegedly aggrieved employees. See Williams, 3 Cal. 5th at 547-48.
5 The Court has already ruled that doing so will require the Court to
Preview
FILED^ 1 Timotiiy J. Long (SBN 137591) Samuel S. Hyde (SBN 327065) 2 GREENBERG TRAURIG, LLP 1201 K Street, Suite 1100 MAR - 6 2020 3 Sacramento, CA 95814 Telephone: 916.442.1111 4 Facsimile: 916.448.1709 lonat(S).gtlaw.com 5 hvdes(a).gtlaw.com 6 Rowena Santos (SBN 210185) GREENBERG TRAURIG, LLP . 7 18565 Jamboree Road, Suite 500 Irvine, CA 92612 8 Telephone: 949.732.6500 Facsimile: 949.732.6501 9 santosr(S).gtlaw.com 10 Attomeys for Defendant 11 HEALTH NET OF CALIFORNIA, INC. 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- of herself and on behalf of all persons CU-OE-GDS (Consolidated witii Case No. 15 similarly situated. 34-2017-00216685-CU-OE-GDS) Plaintiff, 16 MEMORANDUM OF POINTS AND . 17 AUTHORITIES IN SUPPORT OF ^H HEALTH NET OF CALIFORNIA, INC., a HEALTH NET OF CALIFORMA, INC.'S n 18 Califomia Corporation; and Does 1 through MOTION TO STRIKE SPEARS' 50, inclusive, REPRESENTATIVE PAGA CLAIMS 19 Date: April 3,2020 Defendants. Time: 1:30 p.m. 20 Dept: 41 Judge: Hon. David De Alba 21 TOMAS R. ARANA, on behalf of himself, all others similarly situated, . Complaint Filed: April 5,2017 22 FAC Filed: June 29,2017 Plaintiff, 23 Complaint Filed: August 1,2017 24 Consolidated Complaint Filed: Dee. 21,2017 HEALTH NET OF CALIFORNIA, INC., a 25 California corporation; and DOES 1-50, inclusive, 26 Defendant. 27 28 1 MEMORANDUM OF POINTS AND AUTHORITIES ISO MOTION TO STRIKE SPEARS' REPRESENTATIVE PAGA CLAIMS 1 TABLE OF CONTENTS Page 2 3 I. Introduction 6 4 II. Factual and Procedural Background 6 5 A. Spears' LWDA Notice 6 B. The Consolidated Complaint 7 6 C. The Court Denied Plaintiffs' Motion to Certify Their Meal Break, Rest 7 Break, and Off-tiie-Cloek Claims , 8 D. The Court Deferred Ruling on HNCA's Original Motion Attacking Spears' 8 PAGA Claims 8 9 E. Plaintiffs Submit Their Proposed Trial Plan And Attempt To Re-Craft Their PAGA Claims ....9 10 UI. Argument , ; 10 11 A. The Court HastiieAutiiority to Strike Spears' PAGA Claims 10 12 B. The Court Should Strike Spears' PAGA Rest Break Claim Because It Has Been Abandoned , .,12 13 C. The Court Should Stiike Spears' New Meal Period PAGA Claim Based on Judicial Estoppel , 12 14 D. The Court Should Strike Spears' PAGA Claims for Failure to Exhaust Her Administrative Remedies 14 15 1. Spears Did Not Exhaust The Meal Period PAGA Claim She Now 16 Seeks To Pursue 15 2. Spears' Off The Clock And EMPCenter PAGA Claims Were Never 17 Mentioned In Her LWDA Notice, And Must be Stricken 16 18 3. Plaintiffs' Regular Rate Claim is Unchanged But Was Never Exhausted for the Reasons Set Forth in HNCA's Prior Motion 16 19 E. Because None Of Spears' Stand-alone PAGA Claims Can Proceed, Neitiier Can Any Derivative Claims 17 20 F. The Court Should Stiike Spears' Meal Period PAGA and "Miscalculation" 21 PAGA Claim Because They Ai-e Umiianageable 17 1. To Prevail Under the PAGA. Spears Must Prove Each Alleged 22 Underlying Violation for Each Allegedly Aggrieved Employee 17 23 2. Whetiier "Old" or "Re-Crafted" Spears' Meal Period PAGA Claim Involves Resolving Myriad Individual Facttial Determinations 18 24 3. Spears' Miscalculation PAGA Claim Is Unmanageable 20 25 IV. Conclusion 20 26 27 28 MEMORANDUM OF POINTS AND AUTHORITIES ISO MOTION TO STRIKE SPEARS' REPRESENTATIVE PAGA CLAIMS 1 TABLE OF AUTHORITIES 2 Page(s) 3 Cases 4 5 Aguilar v. Lerner, 32 Cal. 4tii 974 (2004) 14 6 Amiri v. Cox Commc 'ns Cal, LLC, 7 272 F. Supp. 3d 1187 (CD. Cal. 2017) ,.11 8 Arana v. Health Net of California, Inc., ^ Case , 7 . Arias v. Superior Court, 46 Cal. 4tii 969 (2009) 8,11, 15,17 11 Augustus V. ABM Security Servs., Inc., 12 2Cal.5tii257(2016) 19 13 In re BCBG Overtime Cases, 163 Cal. App. 4tii 1293 (2008) ....10, 11 Bowers v. First Student, Inc., 15 2015 WL 1862914 (CD. Cal. April 23,2015) 11 16 Brinker Rest. Corp. v. Superior Court, 17 53 Cal. 4tii 1004 (2012) 18 18 Bronco Wine Co. v. Frank A. Logoluso Farms, 214 Cal. App. 3d 699 (1989) : 11 19 Brown v. Am. Airlines, Inc., 2015 WL 6735217 (CD. Cal. Oct. 5,2015) 1,15 20 21 Brown v. Ralphs Grocery Co., 22 28 Cal. App. 5tii 824 (2018) ...14,15 23 Caliber Bodyworks, Inc. v. Superior Court, 134 Cal. App. 4tii 365 (2005) 15 24 Cottle V. Superior Court, 3 Cal. App. 4th 1367 (1992), , ...............10,11 25 Duran v. U.S. Bank Nat 7 Ass 'n, 27 59 Cal. 4tii 1 (2014) 18 28 3 MEMORANDUM OF POINTS AND AUTHORITIES ISO MOTION TO STRIKE SPEARS' REPRESENTATIVE PAGA CLAIMS 1 Esparza V. Safeway, Inc., 36 Cal. App. 5tii 42 (2019) 10 2 Hanna v. LA. Cty. Sheriff's Dep't, 3 102 Cal. App. 4tii 887 (2002) 12 4 Jackson V. County ofLos Angeles, 5 60 Cal. App. 4tii 171 (1997) 12 6 James H. v. Superior Court, 77 Cal. App. 3d 169 (1978) 11 7 Kraus V. Trinity Management Service, Inc., 8 23 Cal.4tii 116(2000) .11 9 Levin v. Ligon, 10 140 Cal. App. 4tii 1456 (2006) 14 11 Lingv. P.F. Chang's China Bistro, Inc., 245 Cal. App. 4th 1242 (2016) 17 12 Litty V. Merrill Lynch & Co., Inc., 13 2014 WL 5904904 (CD. Cal. Nov. 10, 2014) 11 14 Naranjo v. Spectrum Sec. Servs., Inc., 15 40 Cal. App. 5tii 444 (2019) 17 16 Ortiz V. CVS Caremark Corp., 2014 WL 1117614 (N.D. Cal. Mar. 19, 2014) 10,11 17 Price V. Starbucks Corp., 18 192 Cal. App. 4tii 1136 (2011) , ., ............17 19 Raphael v. Tesoro Ref. & Mktg. Co. LLC, 20 2015 WL 5680310 (CD. Cal. Sept. 25,2015) 11 21 Ruse V. Medlronics, Inc., 107 Cal. App. 3d 150 (1980) 10 22 Salazar v. McDonald's Corp., 23 2017 WL 88999 (N.D. Cal. Jan. 5,2017) .............11 24 Wal-Mart Stores, Inc. v. Dukes, 25 564 U.S. 338(2011) 18 26 Williams v. Superior Court, 3 Cal. 5tii 531 (2017) ; 17,18,19 27 28 MEMORANDUM OF POINTS AND AUTHORITIES ISO MOTION TO STRIKE SPEARS' REPRESENTATIVE PAGA CLAIMS 1 Statutes 2 Cal. Civ. Proc. Code §§ 128(a)(8), 187 ; 10 ^ Cal. Civ. Proc. Code §583.150 10 ^ Cai. Gov't Code § 68070 , 10 5 Cal. Lab. Code § 2699(c) 17 6 Other Authorities 7 Cal. Rules of Court, rule 3.400(a) ; 11 8 "EMPCenter Timekeeping System OfftiieClock PAGA Claim" (tiie "EMPCenter 9 PAGA Claim") : 9 10 Merriam-Webster Online Dictionary, http://www.merriam-webster.com (Mar. 5, 11 2020). 14 12 Spears' "Miscalculation Claim" , 16 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 MEMORANDUM OF POINTS AND AUTHORITIES ISO MOTION TO STRIKE SPEARS' REPRESENTATIVE PAGA CLAIMS 1 I. INTRODUCTION 2 HNCA requests that the Court strike Spears' PAGA claims because she has failed to 3 exhaust the administrative process (as to her regular rate, meal period, and off-the-clock PAGA 4 claims); she has abandoned her PAGA rest break claim; she is judicially estopped from trying to 5 re-erafl her meal period PAGA claim; and whether old or re-crafted. Spears' PAGA claims are 6 unmanageable. 7 When Spearsfirstpresented her PAGA claims to the Labor and Workforce Development g Agency ("LWDA"), which she was required to do before asserting them in court, Spears sought 9 PAGA penalties for three separate claims, as well as two additional derivative claims. In Court, 10 however. Spears is trying to pursue PAGA claims that are inconsistent with her LWDA claims 11 (such as her new meal period claim), claims she never presented to the LWDA (such as her new 12 meal period claim, her off-the-clock claims, and her miscalculation claim), and claims that are 13 umnanageable (all of them). 14 On December 21,2018, and pursuant to a stipulated court order. Defendant Health Net of 15 Califomia, Inc. ("HNCA") filed a motion attacking Spears' PAGA claims (the "December 21 16 Motion").' See RA 315,321.^ The Court deferred ruling on that motion, and specifically held 17 that HNCA could renew it at a later date. That time has come. Spears has stated that she does not 18 need to engage in finther discovery concerning her PAGA claims and she and Arana (collectively 19 "Plaintiffs") havefileda proposed trial plan (the "Trial Plan"). HNCA therefore renews its 20 December 21 Motion, incorporates by reference its priorfilingsand all the supporting papers (as 21 permitted by Court order), and includes additional arguments prompted by Plaintiffs' proposed 22 Trial Plan. The Court should grant this motion to strike. 23 n. FACTUAL AND PROCEDURAL BACKGROUND 24 A. Spears* LWDA Notite 25 On April 5,2017, Spears gave written notice to the LWDA of the specific Labor Code 26 violations that served as the foundation ofher PAGA claims. Those claims were: (1) failure to 27 ' HNCA simultaneously moved to strike Plaintiff Tomas Arana's ("Arana") PAGA claims (the "Arana Motion to 2g Strike"). See RA 316, 322. ^ Throughout this brief, citations are to the Register of Actions ("RA") in this case. 6 MEMORANDUM OF POINTS AND AUTHORITIES ISO MOTION TO STRIKE SPEARS' REPRESENTATIVE PAGA CLAIMS 1 accurately pay overtime due to HNCA's failure to include "non-discretionary incentive" 2 payments m her regular rate of pay; (2) failiue to provide employees with on-time meal periods, 3 as well as a purported failure to provide employees with second meal periods when required; and 4 (3) failm-e to timely provide employees with ten-minute rest periods. Declaration of Timothy J. 5 Long ("Long Decl.") ^ 2, Ex. A. Based on these claims. Spears also asserted derivative claims 6 for (1) failure to provide employees with accurate wage statements; and (2) failure to timely pay 7 employees for all wages due following termuiation. Id. Spears' LWDA notice did not mention 8 any other claims (including off-the-clock claims), ^ nor did it allege that "MedFlxWave" 9 payments, "DenFlxWave" payments, SPOT Awards, ACA Incentive Payments, or Wellness 10 Incentive Payments should have been included in the regular rate of pay calculation. See 11 generally id. 12 B. The Consolidated Complaint 13 On October 11,2017, Spears' lawsuit was ordered consolidated for all purposes with 14 Arana v. Health Net of California, Inc., Case no. 34-2017-00216685, witii Spears' lawsuit 15 designated as lead case. RA 18. On December 21,2017, Plaintiffs filed a Consolidated 16 Complaint. RA66. The Consolidated Complaint includes claims based on HNCA's alleged meal 17 and rest period violations, and its alleged failxu'e to correctly calculate employees' regular rate of 18 pay. Id. at 8-10. It fiirther alleges that certain HNCA employees were misclassified as exempt, 19 that HNCA employees worked off the clock and were not compensated for such work, that 20 HNCA improperly failed to include "shift differential pay" in employees' regular rate, and that 21 HNCA used improper rounding practices.'' Id. at 6-8. These claims, as well as the derivative 22 claims for alleged inaccurate wage statements and failure to timely pay employees for all wages 23 due on termination, form the bases of the PAGA claims alleged in the Consolidated Complaint. 24 25 26 ^ It is unsurprising that Spears never alleged an off-the-clock claim since, according to her testimony, she never 27 worked off the clock. Long Decl. 16, Ex. E at 39:7-40:1. ^ The claims for improper rounding, misclassification, and off-Ae-clock work do not appear in Spears' LWDA 2g Notice. Those claims were brought by Arana, and are discussed in greater detail in HNCA's Motion to Strike Arana's Representative PAGA Claims, filed concurrently herewith. 7 MEMORANDUM OF POINTS AND AUTHORITIES ISO ^ MOTION TO STRIKE SPEARS' REPRESENTATIVE PAGA CLAIMS 1 C. The Court Denied Plaintiffs' Motion to Certify Their Meal Break. Rest Break, and Off-the-Clock Clauns 2 3 On December 21,2018, Plaintiffs filed a motion for class certification, seeking 4 certification of three core claims: denial of meal periods, denial of rest breaks, and failure to 5 compensate employees for off-the clock work. RA 307. As explained in greater detail in 6 HNCA's Motion to Strike Arana's Representative PAGA Claims filed concurrentiy herewith, the 7 Court (Judge Perkins) denied class certification as to these claims, with a limited exception for an 8 issue class.^ See RA 439 at 5-6. 9 D. The Court Deferred Ruling on HNCA's Original Motion Attacking Spears' PAGA Claims 10 11 In its December 21 Motion, HNCA sought to strike Spears' PAGA claims. RA 315,321. 12 HNCA argued that Spears had failed to exhaust her administrative remedies as to her PAGA 13 regular rate claim because the payments referenced in her LWDA Notice are distinct fiwm the 14 payments Spears is now attempting to litigate in comt. RA. 315 at 8-11. In short, she has failed 15 to describe the particular "facts and theories" supporting her claim in her LWDA Notice. See 16 Arias v. Superior Court, 46 Cal. 4tii 969,981 (2009). In addition, HNCA contended tiiat Spears 17 could not proceed with her PAGA claims based upon an alleged denial of meal and rest breaks 18 because resolution of those claims would require a multitude of highly individualized factual 19 determinations, and any trial on those claims would therefore be unmanageable. Id. at 11-19. 20 As mentioned above, the Court denied the December 21 Motion without prejudice. In 21 doing so, the Court expressly stated that HNCA could renew its motions at a later date and 22 incorporate its previous filings by reference. See RA 439; Long Decl. f 3, Ex. B.^ 23 24 ^ -• ^ The Court declined to certify the proposed ofT-the clock subclasses, except to resolve a single issue relating to "a 25 small percentage of work shifts" involving employees at the beginning of their shifts: "[d]id the time recording systems in effect diuing the relevant periods prevent an accurate capture of the start time ofthe class members?" RA 26 439 at 6. ^ The Court further ordered Plaintifis to submit a trial plan as to all remaining claims at issue, and instructed the 27 parties to address Questions 1-9 ofthe Supplemental Case Management Questionnaire for PAGA Cases and Questions 1-8 ofthe Minute Order found at Register of Actions # 440. See Long Decl. 14, Ex. C at 30:14-26. In 23 other words, the Court deferred ruling on the merits of HNCA's December 21 Motion to allow Plaintiff to submit a trial plan. 8 MEMORANDUM OF POINTS AND AUTHORITIES ISO MOTION TO STRIKE SPEARS' REPRESENTATIVE PAGA CLAIMS 1 E. Plaintiffs Submit Their Proposed Trial Plan And Attempt To Re-Craft Their PAGA Claims 2 3 Plaintiffs have now submitted their Trial Plan setting forth their intent to present four 4 discrete claims at trial, one of which was not certified by this Court because the disputes were too 5 individualized, and two of which are brand new. First, Plaintiffs seek to pursue a "Miscalculation 6 Claim," which contends that HNCA miscalculated the regular rate of pay by failing to include 7 "MedFlxWave" payments, "DenFlxWave" payments, SPOT Awards, ACA Incentive Payments, 8 and Wellness Incentive Payments when calculating overtime.^ Second, Plaintiffs seek to pursue 9 an "Off the Clock Claim." As mentioned above and discussed in greater detail in the 10 concurrently filed Arana Motion to Strike, the Court rejected Plaintiffs' attempt to certify an "off- 11 the-clock class" afterfindingthat individual issues would predominate in determining whether 12 any off-the-clock violations occurred. Instead, the Court certified a single issue conceming 13 HNCA's timekeeping system: whether "the time recording systems in effect during the relevant 14 periods prevent an accurate capture of the start time of the class members." Plaintiffs' new Off 15 the Clock Claim is an attempt to maneuver around the Court's order. Third, Plaintiffs allege a 16 "Meal Period PAGA Claim," contending that HNCA's failure to advise its employees to use the 17 "DTO" payroll code "resulted in niunerous unpaid meal period claims." Finally, Plaintiffs allege 18 an "EMPCenter Timekeeping System OfftiieClock PAGA Claim" (the "EMPCenter PAGA 19 Claim"), which alleges thatfi*omJanuary 1,2017 to the present, HNCA's policies "uniformly 20 failed to advise [employees] that they could manually enter their start and stoptimes,"resulting in 21 those employees performing work off the clock. Plaintiffs have not previously allegedtiieselatter 22 two claims. With respect to the Miscalculation Claim and Off the Clock Claim, Plaintiffs propose 23 to try their derivative PAGA claims for failm-e to provide employees with accurate wage 24 statements and failure totimelypay employees following termination simultaneously with the 25 class claims. RA 481 at 0-1. Importantly, Spears has reported to the Court that she does not 26 need to do any additional discovery to prosecute her claims and proceed to trial. See Long Decl. 27 28 ' HNCA refers to the Court to its concurrently filed Objections to Plaintifis' Trial Plan for a summary of the claims that comprise the Miscalculation Claim. 9 MEMORANDUM OF POINTS AND AUTHORITIES ISO MOTION TO STRIKE SPEARS' REPRESENTATIVE PAGA CLAIMS 1 If 4, Ex. C at 25:20-27. Thus,tiieCourt has all it needs to grant this Motion to Stiike, and tiie 2 Court should do so. 3 HI. ARGUMENT 4 A. The Court Has the Authority to Strike Spears' PAGA Claims. 5 There is no doubt that this Court has the authority to decide if a PAGA claim, rendered 6 unmanageable by individual issues (or inappropriate for another reason), can proceed to trial. As 7 an initial matter, both Spears and Arana agreed to the exact motion that is now before the Court, 8 including the nature of the motion, the timing ofthe motion, and the relief sought pursuant to a 9 stipulated order dated August 8,2018. 5eeRA 257^3. 10 As HNCA pointed out (and the Court agreed) when it filed the December 21 Motion, 11 Califomia courts endorse post-pleading "motions to strike" representative allegations, because 12 such motions are "not a motion to strike as used during the pleading stage," but rather ask the 13 courts to weigh evidence and determine whether the particular claims are susceptible to litigation 14 on a representative basis. In re BCBG Overtime Cases, 163 Cal. App. 4tii 1293, 1297-1301 15 (2008); see also, e.g, Ortiz v. CVS Caremark Corp., 2014 WL 1117614, at *4 (N.D. Cal. Mar. 16 19,2014). Manageability is generally not decided at the pleading stage of a lawsuit. Rose v. 17 Medtronics, Inc., 107 Cal. App. 3d 150,154 (1980). Witiiin the last year,tiiecourt in Esparza v. 18 Safeway, Inc., 36 Cal. App. 5th 42 (2019), became the latest court to follow the majority trend in 19 granting a post-pleading motion to strike a plaintiff's PAGA claim. 20 Moreover, Courts have the statutory authority to adopt procedures and processes 21 necessary to carry out justice, even if not expressly prescribed by law. Cal. Civ. Proc. Code §§ 22 128(a)(8), 187; Cal. Gov't Code § 68070. Courts even havetiiepower to dismiss under tiieir 23 "inherent authority." Cal. Civ. Proc. Code § 583.150. Furthermore, "courts have inherent equity, 24 supervisory and administrative powers as well as inherent power to control litigation before 25 them," thereby allowing them to fashion "new forms of procedures when required to deal with the 26 rights of the parties and to manage the caseload of the court." Cottle v. Superior Court, 3 Cal. 27 App. 4th 1367,1377 (1992). This "power arisesfi-omnecessity where, in the absence of any 28 previously established procedural rule,rightswould be lost or the court would be unable to 10 MEMORANDUM OF POINTS AND AUTHORITIES ISO MOTION TO STRIKE SPEARS' REPRESENTATIVE PAGA CLAIMS 1 fimction." Id. 2 Califomia courts have fashioned new forms of procedures when required to deal with the 3 rights of the parties and to rnanage the caseload of the court. Indeed, by definition, complex cases 4 "require[] exceptional judicial management to avoid placing unnecessary burdens on the court or 5 the litigants...." Cal. Rules of Court., rule 3.400(a). Thus, for example, motions to strike class 6 action allegations have been permitted to address the propriety of class certification, even though 7 the statutes governing motions to strike dictate that they are for use at the pleadings stage. See, 8 e.g.. In re BCBG, 163 Cal. App. 4tii at 1299; see also James H. v. Superior Court, 77 Cal. App. 9 3d 169,175 (1978).* 10 Manageability of a case is not only part of the Court's inherent power and authority to 11 manage its docket and calendar, but also mirrors the method utilized by state courts with respect 12 to representative UCL claims prior to the passage of Proposition 64—^which required UCL 13 actions to meet class action requirements. In fact, the Supreme Court m Arias v. Superior Court, 14 46 Cal. 4th 969,981 (2009), cited its earlier decision in Kraus v. Trinity Management Service, 15 Inc., 23 Cal. 4th 116 (2000), and held that PAGA plaintiffs could pursue representative actions in 16 the same maimer that UCL plaintiffs did prior to Proposition 64's passage. Arias, 46 Cal. 4th at 17 982-83. Prior to Proposition 64, Courts allowed "pretrial motions to stiike" pre-2004 UCL 18 representative allegations that would cause "insurmountable control and management problems." 19 Bronco Wine Co. v. Frank A. Logoluso Farms, 214 Cal. App. 3d 699, 717-21 (1989).' This topic 20 is addressed at greater length in the December 21 Motion and is incorporated herein by reference. 21 There should be no question that this Court can and should grant this Motion. 22 23 ^ It also bears mentionmg that a different judge of this Court has ah-eady recognized that representative PAGA claims can be stricken or dismissed when they present insurmountable manageability problems. Long Decl. | S, Ex. D. As 24 the Court noted in that case, cases such as Cottle "illustrate that courts have discretion to create workable solutions when faced with cases threatening the manageability of their docket." Id, Ex. D at 6. As in this case, the Court 25 ordered plaintiffs to file a trial plan and "present a proposed means by which the PAGA claims, and Plaintiffs as PAGA representative! could be efficiently managed going forward." Id, Ex. D at 7-8. 26 ' Federal cases fiirther support the conclusion diat plaintiff bringing PAGA representative actions must demonstrate manageability. See Amiri v. Cox Commc'ns Cal., LLC,212 F. Supp. 3d 1187,1195 (CD. Cal. 2017); Sa/azar v. 27 McDonald's Corp., 2017 WL 88999, at •7-9 (N.D. Cal. Jan. 5,2017); Brown v. Am. Airlines, Inc., 2015 WL 6735217 (CD. CaL Oct. 5, 2015); Rcqjfiael v. Tesoro Ref. & Mktg. Co. LLC, 2015 WL 5680310, at ^2-3 (CD. Cal. 28 Sept. 25,2015); Bowers v. First Student, Inc., 2015 WL 1862914, at *4 (CD. Cal. AprU 23,2015); Litty v Lynch & Co., Inc., 2014 WL 5904904, at *3 (CD. Cal. Nov. 10,2014); Ortiz, 2014 WL 1117614, at *3-A 11 MEMORANDUM OF POINTS AND AUTHORITIES ISO MOTION TO STRIKE SPEARS' REPRESENTATIVE PAGA CLAIMS 1 B. The Court Should Strike Spears' PAGA Rest Break Claim Because It Has Been Abandoned 2 3 As the Court knows, it declined to certify Plaintiffs' putative class claims for denial of rest 4 periods. It should therefore come as no surprise that Plaintiffs do not mention a PAGA rest break 5 claim in their proposed trial plan. See generally RA 481. Spears has evidently abandoned this 6 PAGA claim and the Court should strike it. 7 C. The Court Should Strike Spears' New Meal Period PAGA Claim Based on Judicial Estoppel 8 9 Spears' has not previously alleged her Meal Period PAGA Claim in this case. Now, more 10 than two years into this litigation. Spears has invented a new claim based on how time records 11 were coded using a code known as "DTO." Id. at 9-11. The only conceivable reason for doing 12 so at this late date is a perceived strategic advantage. Judicial estoppel exists to prevent such 13 tactics. 14 "The gravamen of judicial estoppel is the intentional assertion of an inconsistent position 15 that perverts the judicial machinery." Jackson v. County ofLos Angeles, 60 Cal. App. 4th 171, 16 181 (1997). The doctrine most appropriately applies when: "(1) the same party has taken two 17 positions; (2) the positions were taken injudicial or quasi-judicial administrative proceedings; (3) 18 the party was suecessfiil in asserting the first position (i.e., the tribunal adopted the position or 19 accepted it as tme); (4) the two positions are totally inconsistent; and (5) thefirstposition was not 20 taken as a result of ignorance,fi-aud,or mistake." Id at 183. Judicial estoppel is commonly 21 invoked to prevent partiesfi"om"play[ing] fast and loose witii the courts." Hanrux v. L.A. Cty. 22 Sheriff's Dep't, 102 Cal. App. 4tii 887, 897 (2002). 23 Thefirstelement is plainly satisfied. After almost two years of litigating one meal period 24 theory. Spears (in conjimction with Arana) submitted a trial plan with a completely new theory. 25 The original theory, set forth in Spears' LWDA Notice, contends that "[a]s a result of tiieir 26 rigorous work schedules, PLAINTIFF and other CALIFORNIA CLASS members were also firom 27 28 The "Meal Period PAGA Claim" set forth in the Trial Plan alleges HNCA "violated Califomia law by failing to advise the Aggrieved Employees to use the pay code "DTO" for payment of meal period premiums." RA 481 at 9. 12 MEMORANDUM OF POINTS AND AUTHORITIES ISO MOTION TO STRIKE SPEARS' REPRESENTATIVE PAGA CLAIMS 1 time to time unable to take off duty meal breaks and were notfiillyrelieved of duty for meal 2 periods." Long Decl. T[ 2, Ex. A at 5,112. Spears tells a similar story in her deposition, stating 3 that she did not take her meal periods on time due to "work that was provided to [her]." Id. ^ 6, 4 Ex. E at 39:7-40:1. In other words. Spears believed that because of the demanding nature ofher 5 work, her supervisors expected her to work through her meal period notwithstanding the legal 6 requirement that she be afforded a meal period on time. Spears has advanced this theory 7 consistently throughout this litigation. Yet now, for thefirsttime. Spears argues that HNCA 8 violated the Labor Code by "failing to advise the Aggrieved Employees to use the pay code 9 'DTO' for payment of meal period premiums." RA 481 at 9. This new theory relating to alleged 10 coding errors is wholly distinctfi-om,and inconsistent with, whether employees were required to 11 skip meal periods due to their workload. How time is coded has nothing to do with whether an 12 employee was provided with a meal break. 13 Second, Spears has asserted both her old and new positions in this case. Spears alleged 14 her old theory in the Consolidated Complaint, which stated that putative class members were not 15 provided with meal periods due to (among other things) "chronically understaffing each work 16 shift with not enough workers [and] imposing so much work on each employee such that it made 17 it unlikely that an employee would be able to take their breaks if they wanted tofinishtheir work 18 on time." RA 66 at 8. Her re-crafted theory related to the "DTO" code has now been alleged in 19 tiie Trial Plan. RA 481 at 9-11. 20 Thetiiirdprong is also satisfied because the Court previously accepted thefirsttheory as 21 tme in resolving Plaintiffs' motionforclass certification. As the Court noted in its order, 22 "Plaintiff's theory is . . . premised upon break violations caused by pressures ofthe employees' 23 work." RA 439 at 5. The Court plainly relied on this theory in concluding that Plaintiffs' meal 24 period claim could not be certified. 25 Fourth, the two theories are plainly inconsistent. The notion that meal period violations 26 occurred because of an alleged coding error is entirely differentfi-omwhat has previously been 27 alleged in this case, and is inconsistent with a theory that aggrieved employees were forced to 28 13 MEMORANDUM OF POINTS AND AUTHORITIES ISO MOTION TO STRIKE SPEARS' REPRESENTATIVE PAGA CLAIMS 1 miss meal breaks due to the press of other business. These two theories cannot be reconciled.'' 2 Finally, the fifth prong is satisfied because there is no hint that Spears took her original 3 position by ignorance,fi-aud,or mistake. As best as HNCA can tell. Spears' new Meal Period 4 PAGA Claim derivesfiromthe deposition of Diane Rodes. In that deposition, Ms. Rodes testified 5 that until January 1,2017, HNCA supervisors used the "DTO" code to record payment of meal 6 period premiums. Long Decl. T[ 7, Ex. F at 70:8-25. That deposition occurred on May 2,2018, 7 nearly two years ago. See id. The notion that Spears had been ignorant of these facts until 8 recently would be false. The only plausible explanation is that Spears has concocted a new theory 9 in an attempt to avoid the consequences of the Court's class certification order. This is precisely 10 the type of maneuver that judicial estoppel is designed to protect against. 11 The end result of chicanery is that both the Court and HNCA must aim at a moving target. 12 See Aguilar v. Lerner, 32 Cal. 4th 974,986 (2004) (judicial estoppel is applied "to maintain the 13 integrity of the judicial system and to protect partiesfi-omopponents' unfair strategies."). HNCA 14 has constmcted its defense, conducted discovery, and prepared for trial in reasonable reliance on 15 Spears' assertions in her LWDA Notice and in the Consolidated Complaint. If Spears is allpwed 16 to morph her meal period theory into something else entirely, much of that time will have been 17 wasted, greatiy prejudicing HNCA. See Levin v. Ligon, 140 Cal. App. 4tii 1456,1483 (2006) 18 (trial court may consider prejudice in deciding whether to apply judicial estoppel). The Court 19 should not coimtenance such gamesmanship, and should strike this new meal period PAGA claim 20 based on the doctrine of judicial estoppel. 21 D. The Court Should Strike Spears* PAGA Claims For Failure To Exhaust Her Administrative Remedies 22 PAGA claims are limited under Califomia law by the contents of the written notice filed 23 witii tiie LWDA. Brown v. Ralphs Grocery Co., 28 Cal. App. 5tii 824, 837-38 (2018). The 24 PAGA requires that an allegedly aggrieved employee "give written notice ofthe alleged Labor 25 26 " Inconsistent theories are those that are "incoherent or illogical in thought or actions." Merriam-Webster Online 27 Dictionary, http://www.merriam-webster.com (Mar. 5,2020). Here, there is no logical connection between Spears' two meal period claims. 28 Moreover, this new Meal Period PAGA Claim fails to state a legal claim, to wit, there is no law requiring employers to advise Aggrieved Employees to input the pay code "DTO" for payment of meal period premiums. 14 MEMORANDUM OF POINTS AND AUTHORITIES ISO MOTION TO STRIKE SPEARS' REPRESENTATIVE PAGA CLAIMS 1 Code violation to both the employer and the [LWDA], and the notice must describe the facts and 2 theories supporting the violation." Arias, 46 Cal. 4th at 981 (quoting Cal. Lab. Code § 3 2699.3(a)(1)). "Proper notice under section 2699.3 is a 'condition' of a PAGA lawsuit." Brown, 4 28 Cal. App. 5th at 835 (citations omitted); Caliber Bodyworks, Inc. v. Superior Court, 134 Cal. 5 App. 4tii 365, 371 (2005). 6 The Court in Brown held that that a plaintiff must do more than "parrot[] the allegedly 7 violated Labor Code provisions." Brown, 28 Cal. App. 5th at 837. Thus, allegations that 8 employees "did not take all meal and rest periods arid were not properly compensated for missed 9 meal and rest periods" were deemed insufficient. Id Such conclusory statements "did not give 10 sufficient information for the LWDA to assess the seriousness of the alleged violations and 11 decide whether to allocate scarce resources to an investigation, or for defendants to determine 12 what policies or practices were being complained of, have an opportunity to cure the violations, 13 and prepare a meaningfiil response." Id. at 837-38. Indeed, the sole allegation that was found to 14 be sufficient was plaintiffs' contention that the employers' wage statements "fail[ed] to include 15 the name and address of the legal entity that is the employer." Id. at 838. Such an allegation 16 would enable an employer to consult its wage statements, determine whether the name and 17 address were correct, and take corrective action as needed. 18 Here, because Spears did not notify the LWDA of the "facts and theories supporting the 19 violation" with the requisite specificity, the following claims should be stricken for failure to 20 exhaust administrative remedies. See id. at 835. 21 1. Spears Did Not Exhaust HER Meal Period PAGA Claim She Now Seeks To Pursue 22 23 As set forth above in the discussion of judicial estoppel. Spears' LWDA Notice contains 24 no discussion of the "DTO" code, or any other code for that matter^ Because Spears never 25 alleged this theory in her LWDA Notice, neither the LWDA nor HNCA were ever given the 26 opportunity to investigate this allegation, in clear contravention of the purpose of the exhaustion 27 requirement. See Brown, 28 Cal. App. 5th at 837 (notice should "allow the LWDA to 28 intelligently assess the seriousness of the alleged violations or give the employer enough 15 MEMORANDUM OF POINTS AND AUTHORITIES ISO MOTION TO STRIKE SPEARS' REPRESENTATFVE PAGA CLAIMS 1 information to determine what policies or practices are being complained of so as to know 2 whether to fold orfight"(intemal quotation marks omitted)). This new theory was not presented 3 in the LWDA Notice, and the Court should therefore strike it. 4 2. Spears' Off The Clock And EMPCenter PAGA Clauns Were Never Mentioned In Her LWDA Notice. And Must be Stricken 5 6 An examination of Spears' LWDA Notice reveals a complete lack of any allegations 7 related to working off the clock. Based upon the LWDA Notice, it would be impossible for either 8 the LWDA or HNCA to know that Spears intended to assert a PAGA claim premised on work 9 performed off the clock. Nor did the LWDA Notice reveal that Spears intended to assert any 10 claims based on the EMPCentertimekeepingsystem. The EMPCenter is not even mentioned in 11 the LWDA Notice. Absent such notice, neither the Off the Clock PAGA Claim nor the 12 EMPCenter PAGA Claim can stand. 13 3. Plaintiffs' Miscalculation Claim Was Never Exhausted 14 As explained in HNCA's December 21 Motion, Spears never exhausted the regular rate 15 claim she now seeks to assert under PAGA as her "Miscalculation Claim." See RA 315 at 8-11. 16 HNCA incorporates those arguments herein. 17 Spears' "Miscalculation Claim" contends that HNCA miscalculated the regular rate of pay 18 by failing to include "MedFlxWave" payments, "DenFlxWave" payments, SPOT Awards, ACA 19 Incentive Payments, and Wellness Incentive Payments when calculating overtime. None of these 20 payments was ever mentioned in her LWDA Notice. That Notice alleged that HNCA improperly 21 failed to include "non-discretionary incentive" payments made to employeesformeeting "various 22 performance goals," including "health benefits cash out options." Long Decl. 12, Ex. A at 4 23 ^10. None ofthefivepayments now alleged in the Miscalculation Claim can be fairly described 24 in this manner. The only payment that even comes close is the "MedFlxWave" payment. But, as 25 explained in the December 21 Motion, that payment had nothing to do with an employees' job 26 performance. See RA 315 at 10-11. Spears received this benefit because she waived medical 27 coverage, not because of how she performed her job. 28 The payments now at issue in Spears' Miscalculation Claim. This claim should therefore 16 ' MEMORANDUM OF POINTS AND AUTHORITIES ISO MOTION TO STRIKE SPEARS' REPRESENTATIVE PAGA CLAIMS 1 be stricken. 2 E. Because None Of Spears' Stand-alone PAGA Claims Can Proceed. Neither Can Any Derivative Claims ^ 4 Because Spears is barredfi-omproceeding on any of the stand-alone PAGA claims set 5 forth in the proposed Trial Plan, she is also precludedfi-omlitigating any PAGA claims that are 6 purely derivative of those claims. The Court should strike those claims as well.^^ 7 F. The Court Should Strike Spears' Meal Period PAGA and "Miscalculation" ^ PAGA Claim Because They Are Unmanageable?'* 1. To Prevail Under the PAGA. Spears Must Prove Each Alleged 9 Underlying Violation for Each Allegediv Aggrieved Employee 10 Recovery under the PAGA is predicated on a plaintifffirstestablishing that the defendant 11 violated the Labor Code. See Arias, 46 Cal. 4th at 987. By the same token, where an underlying 12 cause of action fails, the plaintiffs PAGA cause of action also fails. Price v. Starbucks Corp., 13 192 Cal. App. 4tii 1136, 1147 (2011). Critically, "in a PAGA action,tiieburden is ontiieplaintiff 14 to establish any violations of the Labor Code...." Williams v. Superior Court, 3 Cal. 5th 531, 15 547(2017). 16 The parties agree, and in fact Plaintiffs themselves have argued, that in order to prevail on 17 their PAGA claims, they must prove each and every violation with regard to each and every 18 allegedly aggrieved employee on whose behalf they seek to recover PAGA penalties. Oppo. To 19 Mtii. at 8:12-9:2 (citing Zayers v. Kiewit Infrastructure W. Co., 2017 WL 7058141, at *8 (CD. 20 Cal. Nov. 9,2017), and Hibbs-kines v. Seagate Techs., LLC, 2009 WL 513496, at *4 (N.D. Cal. 21 Mar. 2, 2009)). Thus, Plaintiffs must prove each alleged Labor Code violation not only for 22 themselves but for each allegedly aggrieved employee that they purportedly represent. See 23 Williams, 3 Cal. 5tii at 547-48 (citing Sakkab v. Luxottica Retail NAm., Inc., 802 F.3d 425,438 24 (9tii Cir. 2015)); Cal. Lab. Code § 2699(c) (defming "aggrieved employee"), (f)(2) (penalties may 25 26 Spears' derivative claim for waiting time penalties fails for fhe additional reason that such penalties are precluded under the Labor Code. That is, an employee seeking to recover damages for meal period violations may not recover 27 derivative waiting time penalties for those same violations. See Naranjo v. Spectrum Sec. Servs., Inc., 40 Cal. App. 5th 444,474 (2019); Ling v. P.F. Chang's China Bistro, Inc., 245 Cal. App. 4th 1242,126I (2016). 28 ^* The Court should also consider HNCA's concurrently filed objections to Plaintiffs' Trial Plan when evaluating these manageability arguments. 17 MEMORANDUM OF POINTS AND AUTHORITIES ISO MOTION TO STRIKE SPEARS' REPRESENTATIVE PAGA CLAIMS 1 be awarded for each "aggrieved employee" per pay period). Moreover, HNCA is entitied to 2 challenge each and every one of the more than 5,600 allegedly aggrieved employees' right to 3 recovery. Both the United States and Califomia Supreme Courts recognize HNCA's due process 4 right to do so. See Wal-Mart Stores, Inc. v. Dukes, 564 U.S. 338,366 (2011); Duran v. U.S. Bank 5 Nat'l Ass'n, 59 Cal. 4tii 1,29 (2014). 6 In proving each PAGA claim. Plaintiffs must also explain to the Court how they will do 7 so efficiently and in a manner that is manageable—i.e., without a trial devolving into thousands 8 of mini-trials and individualized disputes. Plaintiffs bear the burden of demonstrating 9 manageability. See Williams, 3 Cal. 5th at 559 (plaintiff in a PAGA case must "render trial of the 10 action manageable"). And because HNCA has a right to challenge the recovery of each of the 11 thousands of allegedly aggrieved employees—a process that could consume months of trial and 12 raise uncountable individualized factual issues—^there should be littie doubt that Spears' PAGA 13 claims pose serious management problems for the Court. 14 2. Whether "Old" or "Re-Crafted" Spears* Meal Period PAGA Claim Involves Resolving Myriad Individual Factual Determinations 15 16 In an attempt to circumvent the Court's ruling that individual issues predominate in 17 Plaintiffs' meal period putative class claim. Spears now asserts an entirely new claim, a "Meal 18 Period PAGA Claim" alleging HNCA "violated Califomia law by failing to advise the Aggrieved 19 Employees to use the pay code "DTO" for payment of meal period premiums." See RA 481 at 9. 20 As mentioned above in footnote 13, this new claim does not state a legally cognizable 21 claim under Califomia law. An employer is not obligated to advise an employee to use a certain 22 pay code for meal period premiums. Instead, HNCA "satisfies [its] obligation [to provide a meal 23 period] if it relieves its employees of all duty, relinquishes control over their activities and 24 permits them a reasonable opportunity to take an unintermpted 30-minute break, and does not 25 impede or discourage themfi-omdoing so." Brinker Rest. Corp. v. Superior Court, 53 Cal. 4th 26 1004,1040 (2012). If the employer does so, buttiieemployee chooses not to take a meal period, 27 then there is no violation. Id. at 1040-41. Thus, to prevail on her meal period PAGA claim, 28 Spears must prove, for each alleged meal period violation, that HNCA did not make available "a 18 MEMORANDUM OF POINTS AND AUTHORITIES ISO MOTION TO STRIKE SPEARS' REPRESENTATIVE PAGA CLAIMS 1 meal period of not less than 30 minutes once an employee has worked for five hours." Augustus 2 V. ABM Security Servs., Inc., 2 Cal. 5tii 257,266 (2016) (citations omitted). And it is Spears' 3 burden to prove each alleged meal period violation not only for herself but for each of the other 4 allegedly aggrieved employees. See Williams, 3 Cal. 5th at 547-48. 5 The Court has already ruled that doing so will require the Court to