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1 BLUMENTHAL NORDREHAUG BHOWMIK DE BLOUW LLP
Norman B. Blumenthal (State Bar #068687)
2 Kyle R. Nordrehaug (State Bar #205975)
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Aparajit Bhowmik (State Bar #248066) FILED/ENDORSED
Piya Mukherjee (State Bar #274217)
2255 Calle Clara
4 La Jolla, CA 92037 DEC - 5 2018
Telephone: (858)551-1223
5 Facsimile: (858) 551-1232 By:. E. Toscano
Daputy CIgfk
6 Attorneys for PlaintifF Andrea Spears
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SUPERIOR COURT OF THE STATE OF CALIFORNIA
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IN AND FOR THE COUNTY OF SACRAMENTO
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11 ANDREA SPEARS, an individual, on behalf CaseNo. 34-2017-00210560-CU-OE-GDS
of herself and on behalf ofall persons
similarly situated, CLASS ACTION
12 Plaintiff,
13 DECLARATION OF PIYA
MUKHERJEE IN SUPPORT OF
14 HEALTH NET OF CALIFORNIA, INC., a PLAINTIFFS' EXPARTE
Califomia Corporation; and Does 1 through APPLICATION FOR ORDER
15 50, inclusive. SHORTENING TIME ON PLAINTIFF'S
Defendants. MOTION TO CONTINUE HEARING
16 DATE AND BRIEFING SCHEDULE
TOMAS R. ARANA, on behalf of himself, RELATING TO CLASS
17 all others similarly situated. CERTIFICATION
Plaintiff,
18 V. Hearing Date: December 7, 2018
19 Hearing Time: 3:00 p.m.
HEALTH NET OF CALIFORNIA, INC., a
20 Califomia corporation; and DOES 1-50, Judge: Hon. Alan G. Perkins
inclusive, Dept.: 35
21 Defendant.
Action Filed: April 5,2017
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DECLARATION OF PIYA MUKHERJEE
CASE No. 34-2017-00210560-CU-OE-GDS
1 DECLARATION OF PIYA MUKHERJEE
2 I, Piya Mukherjee, declare as follows:
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4 1. I am one of attomeys of record for the Plaintiff in the above entitled action, and have
5 personal knowledge of each of the facts set forth herein, and if called upon as a witness could testify
6 competently thereto, except as to the matters stated on information and belief, and as to such matters 1
7 believe them to be true.
8 2. This declaration is being submitted in support of Plaintiffs' Ex Parte Application for
9 Order Shortening Time on Plaintiffs Motion to Continue Hearing Date and Briefing Schedule Relating
10 to Class Certification.
11 3. Attached hereto as Exhibit 1 is a true and correct copy of the memorandum of points and
12 authorities for the Motion to Continue which was filed and served on December 5, 2018. In addition to
13 being served via Federal Express, I emailed the memorandum to counsel for Defendant at approximately
14 11:45 a.m.
15 4. The initial briefing schedule regarding the motions related to class certification were
16 continued by the Parties by stipulation in order to prevent requiring the Parties to file motions for class
17 certification one (1) day after the hearing on Defendant's initial motion for summary adjudication.
18 Plaintiffs initially filed a motion to continue the hearing date and briefing schedule. Plaintiffs' motion
19 was eventually taken off calendar because Defendant agreed to stipulate to Plaintiffs' requested
20 continuance so that Plaintiffs' motion for class certification could adequately address the Court's ruling
21 on the motion for summary adjudication. The current briefing schedule was set as follows: The motion
22 for class certification and motion for decertification filing deadline: December 14, 2018; Any opposition
23 to the opening class certification related motions: February 15, 2019; Any reply in response: March 15,
24 2019; and Hearing as to the motions related to class certification: April 11, 2019 at 10:00 a.m.
25 5. On October 23, 2018, Judge Krueger in Department 54 issued a ruling granting in part
26 and denying in part Defendant's initial motion for summary adjudication. A true and correct copy of
27 Judge Krueger's Order is attached hereto as Exhibit 2.
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DECLARATION OF PIYA MUKHERJEE
CASE No. 34-2017-00210560-CU-OE-GDS
1 6. On October 26, 2018, Defendant filed and served a case management conference
2 statement which included a section regarding "dispositive motions." Therein, while Defendant states that
3 it is considering whether to appeal the mling on the motion for summary adjudication. Defendant fails to
4 state that it is considering filing a renewed motion for summary adjudication. A tme and correct copy of
5 Defendant's case management conference statement is attached hereto as Exhibit 3.
6 7. The Parties appeared before this Court on November 9, 2018 for a case management
7 conference where Defendant, again, did not notify this Court or Plaintiffs that it had any intention of
8 filing a renewed motion for summary adjudication.
9 8. On November 19, 2018, without providing any prior notice. Defendant filed the renewed
10 motion for summary adjudication ("Renewed MSA"). Plaintiffs' counsel received the Renewed MSA
11 on November 20, 2018. Even if the Motion to Continue had been filed on the day counsel for Plaintiffs
12 received Defendant's Renewed MSA, the Motion to Continue could not be heard before December 14,
13 2018, which is the date Plaintiffs must file the motion for class certification and Defendant must file the
14 motion for decertification.
15 9. On November 27, 2018, four (4) business days after Defendant served the renewed
16 motion for summary adjudication, I provided counsel for Defendant a draft stipulation to continue the
17 hearing date and briefing schedule on the motion for class certification such that the scope of the claims
18 and the proposed class are consistent with the order on the Renewed MSA, scheduled to be heard on
19 February 4, 2018. On November 28, 2018, counsel for Defendant responded to my email and stated that
20 Defendant would not agree to continue the briefing schedule on the motion for class certification
21 necessitating the filing of this motion. A tme and correct copy of this email exchange is attached hereto
22 as Exhibit 4.
23 10. On December 5, 2018,1 provided notice to counsel for Defendant by e-mail of the nature
24 of the relief to be requested and the date, time, and place for the presentation of this application.
25 Counsel for Defendant has indicated that the ex parte application will be opposed. A tme and correct
26 copy of this email communication is attached hereto as Exhibit 5. As such, notice of this ex parte
27 application was given in accordance with Califomia Rules of Court, mles 3.1200 - 3.1207. No prior ex
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DECLARATION OF PIYA MUKHERJEE
CASE No. 34-2017-00210560-CU-OE-GDS
1 parte applications have been filed in this matter.
2 11. There is a compelling need for the urgent handling of this matter. Without the hearing
3 date on the Motion to Continue being expedited. Plaintiffs will be forced to file a motion for class
4 certification before a mling on Defendant's pending Renewed MSA. The hearing date on the Renewed
5 MSA is presently Febmary 4, 2019 and Plaintiffs' deadline to file the motion for class certification is
6 December 14, 2018. Given that the result of the Renewed MSA could affect the claims Plaintiffs may
7 seek to certify and the way Plaintiffs may present the theory of liability, a continuance is needed so the
8 motion for class certification and opposition to the decertification motion can rely on the Renewed MSA
9 ruling. The requested order shortening time to hear Plaintiffs' Motion to Continue is, therefore,
10 necessary to have a decision on the Motion to Continue before the deadline to file the class certification
11 and decertification motions. As such, there is a compelling need for Motion to Continue hearing date to
12 be advanced.
13 12. Defendant is represented by the following counsel: Timothy J. Long
14 (tilongfgorrick.com): Nicholas J. Horton rnhortonfgi.orrick.com'): ORRICK, HERRJNGTON &
15 SUTCLIFFE LLP, 400 Capitol Mall, Suite 3000, Sacramento, CA 95814-4497, Telephone: (916)
16 447-9200, Facsimile: (916) 329-4900.
17 13. I will serve counsel for Defendant with the ex parte application and all other supporting
18 documents via e-mail and Federal Express.
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20 I declare under penalty of perjury under the laws of the State of Califomia that the
21 foregoing is tme and correct. Executed this 5th day of December, 2018, at La Jolla, Califomia.
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DECLARATION OF PIYA MUKHERJEE
CASE No. 34-2017-00210560-CU-OE-GDS
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DECLARATION OF PIYA MUKHERJEE
CASE No. 34-2017-0021 b560-CU-OE-GDS
1 BLUMENTHAL NORDREHAUG BHOWMIK DE BLOUW LLP
Norman B. Blumenthal (State Bar #068687)
2 Kyle R. Nordrehaug (State Bar #205975)
Aparajit Bhowmik (State Bar #248066)
3 Piya Mukherjee (State Bar #274217)
2255 Calle Clara
4 La Jolla, CA 92037
Telephone: (858)551-1223
5 Facsimile: (858) 551-1232
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Attomeys for Plaintiff Andrea Spears
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8 SUPERIOR COURT OF THE STATE OF CALIFORNIA
9 IN AND FOR THE COUNTY OF SACRAMENTO
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11 ANDREA SPEARS, an individual, on behalf CASE No. 34-2017-00210560-CU-OE-GDS
12 of herself and on behalf of all persons
similarly situated.
13 Plaintiff,
CLASS ACTION
14 PLAINTIFF ANDREA SPEARS'S NOTICE
15 HEALTH NET OF CALIFORNIA, INC., a OF MOTION AND MOTION TO
Califomia Corporation; and Does 1 through CONTINUE HEARING DATE AND
16 50, inclusive. BRIEFING SCHEDULE RELATING TO
Defendants. CLASS CERTIFICATION;
17 TOMAS R. ARANA, on behalf of himself, all MEMORANDUM OF POINTS AND
18 others similarly situated. AUTHORITIES IN SUPPORT
Plaintiff,
V.
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Hearing Date: TBD
20 HEALTH NET OF CALIFORNIA, INC., a Hearing Time: TBD
Califomia corporation; and DOES 1-50, Judge: Hon. Alan G. Perkins
21 inclusive, DepL: 35
Defendant.
22 Action Filed: April 5,2017
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NOTICE OF MOTION AND MOTION TO CONTINUE CLASS CERTIFICATION
CASE No. 34-2017-00210560
1 TO THE COURT, ALL PARTIES AND THEIR ATTORNEYS OF RECORD:
2 PLEASE TAKE NOTICE THAT on a date and time to be determined by the Court, Plaintiff
3 Andrea Spears will and hereby does move for an order continuing the December 14,2018 deadline for
4 filing Plaintiffs' opening brief for class certification and Defendant's motion for decertification, briefing
5 schedules and the associated April 11, 2019 hearing date. This motion will be heard before the
6 Honorable Alan G. Perkins, Judge of the Superior Court of the County of Sacramento.
7 This motion is brought on the grounds that good cause exists to enter the order as on
8 November 19,2018, Defendantfileda Renewed Motion for Summary Adjudication (" Renewed MSA")
9 without providing prior notice to both Plaintiffs and the Court, and unilaterally set the hearing date for
10 the Renewed MSA on Febmary 4, 2019. Because the outcome of Defendant's Renewed MSA will
11 affect how Plaintiffs will present the common predominance theories of liability in Plaintiffs' upcoming
12 motion for class certification as well as Plaintiffs' opposition to Defendant's forthcoming motion for
13 decertification, the interests of efficiency require that the briefing schedules for the motion for class
14 certification and motion for decertification be continued. Plaintiffs are, therefore, requesting the briefing
15 schedule continued such that the hearing on the class certification and decertification motions is on June
16 28, 2019, or a date thereafter convenient for the Court. This request, if granted, would move the filing
17 date ofthe motions from December 14, 2018 to no earlier than April 12, 2018, providing Plaintiffs a
18 sufficient amount of time to draft the motion based on the outcome of Defendant's Renewed MSA.
19 Counsel has made a reasonable and good faith effort to informally resolve the issues presented
20 by this motion. Defendant has unreasonably refused to cooperate in continuing the class certification
21 motion briefing schedule and hearing date. The motion will be based upon this notice, the memorandum
22 of points and authorities, the declaration of Piya Mukherjee and exhibits thereto, along with the papers
23 in the Court record and the oral argument at the hearing.
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NOTICE OF MOTION AND MOTION TO CONTINUE CLASS CERTIFICATION
CASE No. 34-2017-00210560
1 Pursuant to Local Rule 1.06(A), the court will make a tentative ruling on the merits of
2 this matter by 2:00 p.m., the court day before the hearing. The hearing date on this motion shall
3 be set by the Court. The complete text of the tentative rulings for the department may be
4 downloaded off the court's website. If the party does not have online access, they may call the
5 dedicated phone number for the department as referenced in the local telephone directory between
6 the hours of 2:00 p.m. and 4:00 p.m. on the court day before the hearing and receive the tentative
7 ruling. If you do not call the court and opposing party on the court day before the hearing, no
8 hearing will be held.
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DATED: December 5,2018 BLUMENTHAL NORDREHAUG BHOWMIK DE BLOUW, LLP
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11 By:
Piya Mukherjee A
12 Attomeys for Plaintiff Anorea Spears
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NOTICE OF MOTION AND MOTION TO CONTINUE CLASS CERTIFICATION
CASE No. 34-2017-00210560
1 MEMORANDUM OF POINTS AND AUTHORITIES
2 I. INTRODUCTION
3 Plaintiffs hereby moves for an Order continuing the December 14, 2018 deadline for filing
4 Plaintiffs' opening brief for class certification and Defendant's decertification motion to no earlier than
5 April 12,2019, which would result in approximately a four (4) month continuance of the filing deadline.
6 This requested continuance would also result in only a less than two (2) month continuance to the April
7 I I , 2019 hearing date.
8 The continuance is required because Defendant Health Net of Califomia, Inc. ("Defendant")
9 filed a Renewed Motion for Summary Adjudication ("Renewed MSA") on November 19, 2018 to be
10 heard on Febmary 4, 2019 which would result in Plaintiffs needing to file the motion for class
11 certification well before a mling on the Renewed MSA. Given that the result of the Renewed MSA could
12 affect the claims Plaintiffs may seek to certify and the way Plaintiffs may present the theory of liability,
13 a continuance is needed so the motion for class certification and opposition to the decertification motion
14 can rely on the Renewed MSA mling.
15 Defendant has previously filed a motion for summary adjudication which was set to be heard
16 the day before Plaintiffs' deadline to file a motion for class certification on September 28, 2018. After
17 forcing Plaintiffs to file a motion to continue the class certification motion hearing date and briefing
18 schedule, Defendantfinallystipulated to a continuance of the class certification motion filing deadline,
19 hearing date and briefing schedule until after the hearing on the motion for summary adjudication.
20 After the Court mled to grant in part and deny in part Defendant's motion for summary
21 adjudication, the Parties appeared before Judge Perkins in Department 35 for a case management
22 conference on November 9, 2018 where Defendant did not at any point state at the hearing that
23 Defendant had any intention to file a second motion for summary adjudication. Defendant's case
24 management conference statement, also, failed to express Defendant's intent to file a renewed motion
25 for summary adj udication. Rather, ten (10) days after the case management conference. Defendant blind-
26 sided Plaintiffs and the Court with the filing of the Renewed MSA.
27 Plaintiffs have been diligent in prosecuting this matter against Defendant, serving and
28 responding to discovery, taking the deposition of Defendant's Person Most Knowledgeable ("PMK"),
NOTICE OF MOTION AND MOTION TO CONTINUE CLASS CERTIFICATION
CASE No. 34-2017-00210560
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1 engaging in significant motion practice, including, successfully opposing Defendant's initial motion for
2 summary adjudication. (Declaration of Piya Mukherjee ^ 3 ("Mukherjee Decl.")).
3 In this class action. Plaintiffs assert causes of action based at least in part on Defendant's
4 failure to properly calculate Plaintiffs' and Class Members' regular rate, which results in a systemic
5 underpayment of wages to these employees. Defendant's Renewed MSA seeks to dispose of this issue
6 as to Defendant's miscalculation of Plaintiffs and Class Members' regular rate and corresponding failure
7 to compensate Plaintiffs and Class Members for all their overtime hours worked. Plaintiffs oppose
8 Defendant's Renewed MSA and will continue to seek redress on behalf of a class of employees who
9 were subject to this practice and who worked overtime. Plaintiffs will seek to certify a class based on
10 these allegations. To the extent Defendant's Renewed MSA is granted in any manner, it will have clear
11 implications for Plaintiffs' motion to certify a class based on the claims at issue. Because the Febmary
12 4,2019 hearing regarding Defendant's failure to compensate its employees for all overtime hours worked
13 by failing to include all non-discretionary bonus wages in its calculation of the regular rate and the
14 subsequent order will impact Plaintiffs' motion for class certification, currently due for on December 14,
15 2018, Plaintiffs seek a continuance to the deadline for filing the motion for class certification and the
16 Defendant's deadline for filing the motion for decertification, such that Defendant's Renewed MSA will
17 be resolved prior to the certification motion deadline.
18 Since Defendant refused a reasonable request to stipulate to continue this deadline. Plaintiffs
19 were forced to file this motion in order to prevent the waste of judicial and party resources that would
20 result from having the motion for class certification filed before the hearing on Defendant's Renewed
21 MSA. For all these reasons, as detailed more fully below. Plaintiffs respectfully request the Court issue
22 an order continuing the April 11,2019 hearing date on the motions related to class certification to June
23 28, 2019, or a date thereafter convenient for the Court, and setting opening class certification and
24 decertification motion filing deadlines of no earlier than April 12, 2019, opposition deadlines of no
25 earlier than May 17, 2019 and reply filing deadlines of no earlier than June 14,2019.
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1 H. FACTUAL HISTORY
2 Plaintiff Spears's action was consolidated with Plaintiff Arana's action on October 11,2017.
3 (Mukherjee Decl. at ^ 3). The plaintiffs have served multiple sets of discovery and have taken the
4 deposition of Defendant's Person Most Knowledgeable for a portion of the classifications in Plaintiff
5 Spears's Notice of Deposition of Defendant. (Id.). The Plaintiffs have met and conferred extensively
6 with Defendant regarding discovery and the Parties have engaged in substantial motion practice. (Id.)
7 The briefing schedule regarding Plaintiffs' Motion for Class Certification and Defendant's Motion for
8 Decertification was continued by the Parties by stipulation in order to prevent requiring Plaintiffs to file
9 motions related to class certification one (1) day after the hearing on Defendant's initial motion for
10 summary adjudication. (Id. at ^ 4). Plaintiffs initially filed a motion to continue the hearing date and
11 briefing schedule. (Id.). Plaintiffs' motion was eventually taken off calendar because Defendant agreed
12 to stipulate to Plaintiffs' requested continuance so that Plaintiffs' motion for class certification could
13 adequately address the Court's ruling on the motion for summary adjudication. (Id.). The current
14 briefing schedule was set as follows:
15 The motion for class certification and motion for decertification filing deadline: December
16 14,2018;
17 Any opposition to the opening class certification related motions: Febmary 15, 2019;
18 Any reply in response: March 15, 2019; and
19 Hearing as to the motions related to class certification: April 11, 2019 at 10:00 a.m. (Id.)
20 On October 23, 2018, Judge Kmeger in Department 54 issued a mling granting in part and
21 denying in part Defendant's initial motion for summary adjudication. (Exhibit 1'). The intent behind
22 the continuation of the class certification motion briefing schedule was to ensure that Plaintiffs' motion
23 for class certification would be tailored to address Judge Krueger's ruling on the initial motion for
24 summary adjudication.
25 On October 26, 2018, Defendant filed and served a case management conference statement
26 which included a section regarding "dispositive motions." (Exhibit 2). Therein, while Defendant states
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All exhibits are attached to the Declaration of Piya Mukherjee, filed and served herewith.
NOTICE OF MOTION AND MOTION TO CONTINUE CLASS CERTIFICATION
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1 that it is considering whether to appeal the ruling on the motion for summary adjudication. Defendant
2 fails to state that it is considering filing a renewed motion for summary adjudication. ("Exhibit 2.2:7-14).
3 Thereafter, the Parties appeared before this Court on November 9, 2018 for a case management
4 conference where Defendant, again, did not notify this Court or Plaintiffs that it had any intention of
5 filing a renewed motion for summary adjudication. (Mukherjee Decl., at 17). On November 19,2018,
6 without providing any prior notice, Defendant filed the Renewed MSA. (Id. at If 8).
7 On November 27, 2018, four (4) business days after Defendant served the renewed MSA,
8 Plaintiffs provided Defendant a draft stipulation to continue the hearing date and briefing schedule on
9 the motion for class certification such that the scope of the claims and the proposed class are consistent
10 with the order on the Renewed MSA, scheduled to be heard on Febmary 4,2018. (Mukherjee Decl., at
11 1^ 9-10). On November 28,2018, Defendant responded to Plaintiffs and stated that it would not agree
12 to continue the briefing schedule on the motion for class certification necessitating the filing of this
13 motion. (Exhibit 3).
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15 I I I . ARGUMENT
16 A court's determination as to whether class certification is appropriate does not tum on
17 whether the claims asserted are legally or factually meritorious, but it does require an examination of
18 issues involving the merits of the case. Brinker Rest. Corp. v. Superior Court, 53 Cal. 4th 1004, 1023
19 (2012). "In particular, whether common or individual questions predominate will often depend upon
20 resolution of issues closely tied to the merits. To assess predominance, a court 'must examine the issues
21 framed by the pleadings and the law applicable to the causes of action alleged.'" Id. at 1024 (intemal
22 citations omitted).
23 A motion for summary adjudication seeks to dispose of an entire cause of action, an
24 affirmative defense, a claim for damages, or an issue of duty because such a motion "contends that the
25 cause of action has no merit, that there is no affirmative defense to the cause of action, that there is no
26 merit to an affirmative defense as to any cause of action, that there is no merit to a claim for damages,
27 as specified in Section 3294 of the Civil Code, or that one or more defendants either owed or did not owe
28 a duty to the plaintiff or plaintiffs." Cal. Code Civ. Proc. §437c(f)(l).
NOTICE OF MOTION AND MOTION TO CONTINUE CLASS CERTIFICATION
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1 Thus, a decision on a motion for summary adjudication has implications for a motion
2 for class certification. See Archer v. United Rentals, Inc., 195 Cal. App. 4th 807,812 (201 l)(reversing
3 an order denying class certification because the court also reversed an aspect of the trial court's order
4 granting the defendant's motion for summary adjudication). A decision either way will impact the
5 definitions of the proposed classes and the claims those classes assert. Id. A decision as to the merits of
6 one or more causes of action will alter the analysis required to determine whether common questions
7 predominate because such an analysis requires an investigation as to the resolution of the merits of the
8 case. Brinker Rest. Corp, 53 Cal. 4th 1004, 1024.
9 In this class action. Plaintiffs asserts seven causes of action: (1) Failure to Provide Meal
10 Periods in violation of Cal. Lab. Code §§ 204, 223, 226.7, 512, and 1198; (2) Failure to Provide Rest
11 Periods in violation of Cal. Lab. Code §§ 204, 223, 226.7, and 1198; (3) Failure to Pay Hourly Wages
12 in violation of Cal. Lab. Code §§ 223,510,1194,1194.2,1197,1197.1, and 1198; (4) Failure to Provide
13 Accurate Written Wage Statements in violation of Cal. Lab. Code § 226(a); (5) Failure to Timely Pay
14 All Final Wages in violation of Cal. Lab. Code §§ 201,202, and 203; (6) Unfair Competition in violation
15 of Cal. Bus. & Prof Code §§ 17200, et seq.; and (7) Violation of the Private Attomeys General Act, Cal.
16 Lab. Code §§ 2698, et seq. Several of these causes of action are based, in part, on Defendant's failure
17 to properly calculate Plaintiffs' and Class Members' regular rate of pay, resulting in a systemic
18 underpayment of wages to these employees. Defendant's Renewed MSA seeks to dispose of the issue
19 of Defendant's miscalculation of Plaintiff and Class Members' overtime wages.
20 In ruling on whether Defendant failed to include cash in lieu payments in the regular rate, the
21 Court will base its mling on the facts relevant to this dispute. In so doing, the Court will instmct the
22 parties as to those facts that are tmly the ones that create a triable issue of fact. Therefore, leaming what
23 those relevant triable issues are is critical for Plaintiffs to argue in the motion for class certification how
24 those triable issues of fact can be adjudicated based on common evidence.
25 When the class certification motion briefing schedule was reset to December 14, 2018,
26 Plaintiffs anticipated that any motions for summary adjudication would have already been mled on and
27 that the legal and factual claims would be understood. Plaintiffs did not anticipate, and Defendant did
28 not provide any indicafion, that a second motion for summary adjudication would befiledby Defendant
NOTICE OF MOTION AND MOTION TO CONTINUE CLASS CERTIFICATION
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1 after a ruling on the first one. Simultaneous briefing on the motion for class certification and the
2 Renewed MSA will only lead to unnecessary confusion with respect to the outstanding legal and factual
3 issues. Defendant, by forcing Plaintiffs to file a motion for class certification while the Renewed MSA
4 is pending appears to be seeking a tactical advantage in order to prevent Plaintiffs from setting forth
5 certifiable theories of the case in the motion for class certification based on the Court's forthcoming
6 mling on the Renewed MSA. Because a decision as to Defendant's Renewed MSA has clear implications
7 for Plaintiffs' motion to certify a class based on Defendant's failure to compensate its employees for all
8 overtime hours worked because it failed to include all non-discretionary bonus wages in its calculation
9 of the regular rate, Plaintiffs respectfully request that the briefing schedules associated with the motions
10 related to class certification be continued such that Defendant's Renewed MSA will be resolved prior
11 to the deadline to file the motions related to class certification.
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13 IV. CONCLUSION
14 Plaintiffs respectfully request the Court issue an order continuing the April 11, 2019 hearing
15 date on the motions related to class certification to June 28,2019, or a date thereafter convenient for the
16 Court, and setting the briefing schedule pursuant to Rule of Court 3.764, which would result in motion
17 filing deadlines of no earlier than April 12,2019. Efficiency and judicial economy require that briefing
18 for Plaintiffs' motion for class certification and Defendant's motion for decertification be continued.
19 Plaintiffs' requested extension is reasonable in light of the fact that it will allow the motions related to
20 class certification to be filed after a mling on Defendant's dispositive Renewed MSA to ensure that the
21 scope of the claims and proposed class set forth in the motions is consistent with the mling on the
22 Renewed MSA.
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24 DATED: December 5,2018 BLUMENTHAL NORDREHAUG BHOWMIK DE BLOUW LLP
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26 *iya Mukherjee
27 Counsel for Plaintiff AndreSfSpears
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DECLARATION OF PIYA MUKHERJEE
CASE No. 34-2017-00210560-CU-OE-GDS
SUPERIOR COURT OF CALIFORNIA,
COUNTY OF SACRAMENTO
GORDON D SCHABER COURTHOUSE
MINUTE ORDER
DATE: 10/23/2018 TIME: 11:12:00 AM DEPT: 54
JUDICIAL OFFICER PRESIDING: Christopher Krueger
CLERK: G. Toda
REPORTER/ERM:
BAILIFF/COURT ATTENDANT:
CASE NO: 34-2017-00210560-CU-OE-GDS CASE INIT.DATE: 04/05/2017
CASE TITLE: Spears vs. Health Net of California Inc
CASE CATEGORY: Civil - Unlimited
ASSOCIATED CASES: 34-2017-00216685-CU-OE-GDS
APPEARANCES
Nature of Proceeding: Ruling on Submitted Matter- (Motion for Summary Adjudication)- Taken
Under Submission 9/27/18
TENTATIVE RULING
Defendant Health Net of California, Inc.'s ("HNCA") Motion for Summary Adjudication as against the
Third and Seventh Causes of Action in the Consolidated Complaint of Plaintiffs Andrea Spears and
Tomas R. Arana (collectively, "Plaintiffs") is DENIED IN PART AND GRANTED IN PART as described
below.
Allegations in Pleading
This is a consolidated wage-and-hour putative class action. Andrea Spears ("Spears") and Tomas R.
Arana ("Arana") (collectively "Plaintiffs") are the named plaintiffs.
Defendant Health Net of California, Inc. ("HNCA" or "Defendant") is the moving party seeking summary
adjudication here.
Plaintiffs allegedly served as hourly, non-exempt employees in HNCA call centers. Arana allegedly was
promoted to a salaried, exempt position in or about November 2015. He alleges HNCA misclassified him
as exempt.
In the consolidated Complaint, Plaintiffs allege that Defendants failed to pay them and all other similarly
situated individuals for all hours worked and failed to pay overtime wages at the correct rate, among
other things. (Complaint at 1 (Register of Actions ("ROA") 66).) There is also a PAGA claim for civil
penalties.
Central to the instant motion are Plaintiffs' overtime claims, which are premised on HNCA's alleged
failure to include "cash benefits" or "cash in lieu of benefits" when calculating the "regular rate" for
overtime. It is undisputed that HNCA employees who waived medical benefits received such "cash" in
their paychecks.
Plaintiffs argue that such "cash" payments should have been included when calculating overtime rates.
Defendant argues that such payments were properly excluded when calculating overtime rates because,
as a matter of law and on undisputed facts, such payments are subject to a statutory exclusion codified
at 29 U.S.C. § 207(e)(4), also known as the Benefit-Plan Contributions Exception.
DATE: 10/23/2018 MINUTE ORDER Page 1
DEPT: 54 Calendar No.
CASE TITLE: Spears vs. Health Net of California Inc CASE NO: 34-2017-00210560-CU-OE-GDS
Request to Strike Plaintiffs' Amended Opposition
This motion was originally set to be heard on May 30, 2018, but the Court continued the motion to
today's date to allow Plaintiff additional requested discovery of payroll records, and to allow amended
opposition and reply briefing. In that Order of May 30, 2018, the Court found "that Plaintiff has made a
sufficient showing under section 437c, subdivision (h), to justify the exercise of discretion and grant of
the requested continuance."
Defendant now requests that Plaintiffs' Amended Opposition papers be stricken because they do not
"argue why the payroll records they sought created a triable issue of fact" and also because they
contradict portions ofthe original Opposition papers. (Def.'s Amended Reply at 3.)
Defendant's request is OVERRULED. The Court's prior Order granted the continuance for the additional
discovery and called for the filing of an Amended Opposition, but the Court's Order did not expressly
limit the scope of the Amended Opposition in any way, and Defendant did not request any such
limitation. As a result, the Amended Opposition does not violate the Court's Order of May 30, 2018.
Accordingly, in ruling on this motion, the Court considers the original moving papers, the Amended
Opposition papers, and the Amended Reply papers.
Evidentiary Objections
No separate written objections to evidence were filed.
The Court notes that Defendant filed an Amended Reply Separate Statement of Undisputed Material
Facts, to which Plaintiffs' Opposition papers raised an anticipatory objection. The Court considered the
legal arguments made in Defendants' Amended Reply Separate Statement with respect to the UFs
specifically discussed below herein.
The Court also notes that Defendant filed new evidence with its Reply, i.e., evidence regarding "wellness
payments." However, the Court did not find it necessary to reach the new evidence in ruling on the
instant Motion.
Legal Standard
A defendant moving for summary judgment or summary adjudication may demonstrate that the plaintiffs
cause of action has no merit by showing that (1) one or more elements of the cause of action cannot be
established, or (2) there is a complete defense to that cause of action. (Code Civ. Proc. § 437c(f)(2),
(p)(2); Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 843, 849.) This showing must be
supported by evidence, such as affidavits, declarations, admissions, interrogatory answers, depositions,
and matters of which judicial notice may be taken. (Code Civ. Proc. § 437c(p)(2); Aguilar, 25 Cal.4th at
850, 855.)
A defendant moving for summary judgment or summary adjudication bears the burden of showing that
the causes of action have no merit or that there are one or more complete defenses to them. (Code Civ.
Proc. § 437c(p)(2).) A judge must grant a motion for summary judgment if all the papers submitted show
that there is no triable issue as to any material fact and that the moving party is entitled to judgment as a
matter of law. (Id. § 437c(c); Mann v. Cracchiolo (1985) 38 Cal.3d 18, 35.) Summary judgment is
properly granted only if the moving party's evidence establishes that there is no issue of material fact to
be tried. (Upson v. Superior Court (1982) 31 Cal.3d 362, 374.) Once the moving party meets this
burden of production, the burden shifts to the opposing party to produce admissible evidence
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CASE TITLE: Spears vs. Health Net of Califomia Inc CASE NO: 34-2017-00210560-CU-OE-GDS
demonstrating the existence of a triable issue of material fact. (Aguilar v. Atlantic Richfield Co. (2001) 25
Cal.4th 826, 849.) A judge may not grant summary judgment when any material factual issue is
disputed. (O'Riordan v. Federal Kemper Life Assur. (2005) 36 Cal.4th 281, 289.)
The issues raised by a motion for summary adjudication or summary judgment are framed by the
pleadings. (Dromy v. Lukovsky (2013) 219 Cal.App.4th 278, 282; Lennar Northeast Partners v. Buice
(1996) 49 Cal.App.4th 1576, 1582.)
Discussion
Third Cause of Action for Failure to Pay Hourly Wages and Failure to Pay Overtime Wages
Issue 1: Plaintiffs' failure to pay overtime wages claim premised on HNCA's alleged failure to
Include cash benefits received In lieu of medical payment In Plaintiff Spears' regular rate of pay
fails because cash benefits were properly excluded from her regular rate under the Benefit-Plan
Contributions Exception.
California follows the Fair Labor Standards Act ("FLSA"), which excludes from the regular rate for
purposes of overtime compensation the "cash" employees receive when they waive medical coverage
under what is known as the Benefit-Plan Contributions Exception. (See 29 U.S.C. § 207(e)(4) ("Section
207(e)(4)"); see also 29 C.F.R. § 778.215(a).)
Section 207(e)(4) provides:
(a) "Regular rate" defined. As used in this section the "regular rate" at which an employee is
employed shall be deemed to include all remuneration for employment paid to. or on behalf of. the
employee, but shall noi be deemed to include [ . . . ] (4) contributions irrevocably made by an
employer to a trustee or third person pursuant to a bona fide plan for providing old-age, retirement, life,
accident, or health insurance or similar benefits for employees.
(29 U.S.C. § 207(e)(4) (emphasis added); see also Huntington Memorial Hospital v. Superior Court
(2005) 131 Cal.App.4th 893, 903-905 (summarizing how the "regular rate" must be calculated for
purposes of determining overtime pay).)
Courts have applied Section 207(e)(4) so as to find that an employer that pays "cash in lieu of benefits"
directly to employees will not, as a matter of law, be able to have such payments be excluded from the
"regular rate." To be excluded from the "regular rate," the "cash in lieu of benefits" payments must be
made to a "trustee or third party" as employer "contributions" within the plain text of Section 207(e)(4).
(See Flores v. City of San Gabriel (9th Cir. 2016) 824 F.3d 890, 894, 901-03 (because the city paid cash
in lieu of unused benefits directly to employees, such payments had to be included in regular rate of pay
and thus in calculation of overtime rate; payment was not excluded under 29 U.S.C. §  ;207(e)(4)
because it was paid "directly to employees" and therefore was not a "contribution by the employer"); see
also Local 246 Util. Workers Union v. Southern Cal. Edison Co. (9th Cir. 1995) 83 F.3d 292, 296
(reversing grant of summary judgment to employer because employer failed to show that "supplemental
payments to employees consisted of contributions made by [the employer] irrevocably to a trust.").)
Although neither party identified any decisions from California courts on this issue, both parties cite to
federal district court and Ninth Circuit case law. In Flores, the Ninth Circuit explained:
The City also argues that its cash-in-lieu of benefits payments are properly excluded pursuant to §
207(e)(4). Section 207(e)(4) excludes from the regular rate of pay "contributions irrevocably made by an
employer to a trustee or third person pursuant to a bona fide plan for providing old-age, retirement, life.
DATE: 10/23/2018 MINUTE ORDER Page 3
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CASE TITLE: Spears vs. Health Net of California Inc CASE NO: 34-2017-00210560-CU-OE-GDS
accident, or health insurance or similar benefits for employees."
Because the City pays the unused benefits directly to its employees and not "to a trustee or third
person," its cash-in-lieu of benefits payments cannot be excluded under § 207(e)(4). We rejected
a similar argument in Local 246 when the employer had proffered no evidence that any of the
payments at issue were made to a trust rather than directly to the employees because "[s]ection
207(e)(4) deals with contributions by the employer, not payments to the employee." Local 246, 83
F.3d at 296. That reasoning applies equally here.
The City urges us to find that its cash-in-lieu of benefits payments fall within the ambit of § 207(e)(4)
even though the payments are not made to a trustee or third party because the payments "generally"
meet the requirements of that subsection, arguing that it should not be penalized for administering its
own flexible benefits plan. But" [wjhere '[a] statute's language is plain, the sole function of the courts is
to enforce it according to its terms,' because 'courts must presume that a legislature says in a statute
what it means and means in a statute what it says there.'" [Citations.] The City's cash-in-lieu of
benefits payments are not made to a trustee or third party, and therefore those payments do not
meet the requirements of § 207(e)(4). We are not at liberty to add exceptions to the clear requirements
set forth in the statute for payments that "generally" satisfy the requirements of that provision. This is
particularly true here, where exemptions to the FLSA's requirements are to be narrowly construed in
favor of the employee. [Citations.] We thus have no trouble concluding that the City's cash-in-lieu of
benefits payments are not properly excluded from the regular rate of pay pursuant to § 207(e)(4).
(Flores, 824 F.3d at 901-02 (emphasis added) (citations omitted); see also Local 246, 83 F.3d 292, 296
("On this record, however, there is no indication that any of the supplemental payments to the
employees consisted of contributions made by Edison irrevocably to a trust. Section 207(e)(4)
deals with contributions by the employer, not payments to the employee. If the employer meets the
requirements of section 207(e)(4) in making irrevocable contributions to a trust, then those contributions
will not be added to the regular pay rate on the theory that they are a form of indirect bonus to the
worker.") (emphasis added).)
In ruling on this motion, the Court is bound by Section 207(e)(4)'s plain text stating that only employer
"contributions" to a third party will be excluded from the "regular rate." The Court herein also applies
Flores and Local 246, both of which require an employer to produce evidence that "cash in lieu of
benefits" payments were: (1) in fact "contributions" to a "trustee or third party," (2) made pursuant to a
benefits plan, and (3) not paid directly to the employee.
Defendant's moving papers argue that the payments of "cash in lieu of benefits" to employees can be
permissibly excluded from the "regular rate" given that HNI, not HNCA, made those payments to HNCA's
employees. Defendant argues that taking the instant case beyond the scope of Flores, HNCA did not
"directly" pay its employees the "cash" ~ HNI did. Defendant argues that HNI is HNCA's parent
company and the "third party" charged with administering HNCA's employee health and welfare benefit
Plan ("Plan"), as well as the third party payroll administrator for HNCA.) Defendant essentially argues
that, by virtue of HNI's involvement as a go-between or intermediary between HNCA and HNCA's
employees, HNCA undisputedly did not make those "cash" payments "directly" to employees, such that
Flores is factually distinguishable.
However, Defendant's actual evidence - itemized in its Separate Statement of Undisputed Facts
("SSUF") - fails to address the actual source of the "cash in lieu of benefits." Instead, the SSUF states
generally that HNCA "paid the actual costs of benefits under the plan" to "eligible employees who
elected to participate" in the Plan. (UF 7 (emphasis added).) Similarly, UF 8 asserts that pursuant to the
Plan, "HNCA arranged for the monies used to pay the actual costs of benefits to be deposited into an
account maintained and controlled by HNI as the Plan's sponsor." (UF 8 (emphasis added).) Both UF 7
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CASE TITLE: Spears vs. Health Net of California Inc CASE NO: 34-2017-00210560-CU-OE-GDS
and UF 8 give rise to the inference that HNCA contributed the "actual costs of benefits" to HNI pursuant
to the Plan - but there is no evidence as to what the "actual costs of benefits" actually means. Crucially,
there is no evidence that the "actual costs of benefits" includes the "cash in lieu of benefits" at the heart
of this motion.
In other words, despite the plain text of Section 207(e)(4) requiring an employer to demonstrate that the
amounts it seeks to exclude from the "regular rate" were in fact "contributions" from the employer to a
third party pursuant to a benefits plan, no UF squarely asserts that HNCA "contributed" the "cash in lieu
of benefits" payments to HNI. While there is evidence that HNCA contributed the "actual costs of
benefits" to HNI, no UFs define the phrase "actual costs of benefits." No UFs demonstrate that "cash in
lieu bf benefits" is an "actual cost of benefits."
Defendant has not clearly identified evidence: (1) that it actually "contributed" the "cash in lieu of
benefits" to third party HNI, and (2) that HNI, not HCNA, actually paid out those amounts to employees.
Therefore, the Court must find that Defendant did not meet its initial burden on this motion.
The Court has examined the evidence specifically identified as support for the various pertinent UFs,
including those stating that HNCA "paid the actual costs of benefits," that employees can waive medical
benefits, and that employees waiving such benefits would receive a cash payment in their paycheck.
(UFs 7, 8, 9, 16, 18, 19.) But on the Court's review, none of the cited evidence actually states that
HNCA "contributed" the "cash in lieu of benefits" to HNI, or that all "cash in lieu of benefits" payouts
would have necessarily come from funding that HNCA had "contributed" to HNI for the "actual costs of
benefits" under the Plan.
For instance, declarant Kelly Sarabia, the Payroll Director for HNI during the relevant perio
Preview
1 BLUMENTHAL NORDREHAUG BHOWMIK DE BLOUW LLP Norman B. Blumenthal (State Bar #068687) 2 Kyle R. Nordrehaug (State Bar #205975) 3 Aparajit Bhowmik (State Bar #248066) FILED/ENDORSED Piya Mukherjee (State Bar #274217) 2255 Calle Clara 4 La Jolla, CA 92037 DEC - 5 2018 Telephone: (858)551-1223 5 Facsimile: (858) 551-1232 By:. E. Toscano Daputy CIgfk 6 Attorneys for PlaintifF Andrea Spears 7 SUPERIOR COURT OF THE STATE OF CALIFORNIA 8 IN AND FOR THE COUNTY OF SACRAMENTO 9 10 11 ANDREA SPEARS, an individual, on behalf CaseNo. 34-2017-00210560-CU-OE-GDS of herself and on behalf ofall persons similarly situated, CLASS ACTION 12 Plaintiff, 13 DECLARATION OF PIYA MUKHERJEE IN SUPPORT OF 14 HEALTH NET OF CALIFORNIA, INC., a PLAINTIFFS' EXPARTE Califomia Corporation; and Does 1 through APPLICATION FOR ORDER 15 50, inclusive. SHORTENING TIME ON PLAINTIFF'S Defendants. MOTION TO CONTINUE HEARING 16 DATE AND BRIEFING SCHEDULE TOMAS R. ARANA, on behalf of himself, RELATING TO CLASS 17 all others similarly situated. CERTIFICATION Plaintiff, 18 V. Hearing Date: December 7, 2018 19 Hearing Time: 3:00 p.m. HEALTH NET OF CALIFORNIA, INC., a 20 Califomia corporation; and DOES 1-50, Judge: Hon. Alan G. Perkins inclusive, Dept.: 35 21 Defendant. Action Filed: April 5,2017 22 23 24 25 26 27 28 DECLARATION OF PIYA MUKHERJEE CASE No. 34-2017-00210560-CU-OE-GDS 1 DECLARATION OF PIYA MUKHERJEE 2 I, Piya Mukherjee, declare as follows: 3 4 1. I am one of attomeys of record for the Plaintiff in the above entitled action, and have 5 personal knowledge of each of the facts set forth herein, and if called upon as a witness could testify 6 competently thereto, except as to the matters stated on information and belief, and as to such matters 1 7 believe them to be true. 8 2. This declaration is being submitted in support of Plaintiffs' Ex Parte Application for 9 Order Shortening Time on Plaintiffs Motion to Continue Hearing Date and Briefing Schedule Relating 10 to Class Certification. 11 3. Attached hereto as Exhibit 1 is a true and correct copy of the memorandum of points and 12 authorities for the Motion to Continue which was filed and served on December 5, 2018. In addition to 13 being served via Federal Express, I emailed the memorandum to counsel for Defendant at approximately 14 11:45 a.m. 15 4. The initial briefing schedule regarding the motions related to class certification were 16 continued by the Parties by stipulation in order to prevent requiring the Parties to file motions for class 17 certification one (1) day after the hearing on Defendant's initial motion for summary adjudication. 18 Plaintiffs initially filed a motion to continue the hearing date and briefing schedule. Plaintiffs' motion 19 was eventually taken off calendar because Defendant agreed to stipulate to Plaintiffs' requested 20 continuance so that Plaintiffs' motion for class certification could adequately address the Court's ruling 21 on the motion for summary adjudication. The current briefing schedule was set as follows: The motion 22 for class certification and motion for decertification filing deadline: December 14, 2018; Any opposition 23 to the opening class certification related motions: February 15, 2019; Any reply in response: March 15, 24 2019; and Hearing as to the motions related to class certification: April 11, 2019 at 10:00 a.m. 25 5. On October 23, 2018, Judge Krueger in Department 54 issued a ruling granting in part 26 and denying in part Defendant's initial motion for summary adjudication. A true and correct copy of 27 Judge Krueger's Order is attached hereto as Exhibit 2. 28 DECLARATION OF PIYA MUKHERJEE CASE No. 34-2017-00210560-CU-OE-GDS 1 6. On October 26, 2018, Defendant filed and served a case management conference 2 statement which included a section regarding "dispositive motions." Therein, while Defendant states that 3 it is considering whether to appeal the mling on the motion for summary adjudication. Defendant fails to 4 state that it is considering filing a renewed motion for summary adjudication. A tme and correct copy of 5 Defendant's case management conference statement is attached hereto as Exhibit 3. 6 7. The Parties appeared before this Court on November 9, 2018 for a case management 7 conference where Defendant, again, did not notify this Court or Plaintiffs that it had any intention of 8 filing a renewed motion for summary adjudication. 9 8. On November 19, 2018, without providing any prior notice. Defendant filed the renewed 10 motion for summary adjudication ("Renewed MSA"). Plaintiffs' counsel received the Renewed MSA 11 on November 20, 2018. Even if the Motion to Continue had been filed on the day counsel for Plaintiffs 12 received Defendant's Renewed MSA, the Motion to Continue could not be heard before December 14, 13 2018, which is the date Plaintiffs must file the motion for class certification and Defendant must file the 14 motion for decertification. 15 9. On November 27, 2018, four (4) business days after Defendant served the renewed 16 motion for summary adjudication, I provided counsel for Defendant a draft stipulation to continue the 17 hearing date and briefing schedule on the motion for class certification such that the scope of the claims 18 and the proposed class are consistent with the order on the Renewed MSA, scheduled to be heard on 19 February 4, 2018. On November 28, 2018, counsel for Defendant responded to my email and stated that 20 Defendant would not agree to continue the briefing schedule on the motion for class certification 21 necessitating the filing of this motion. A tme and correct copy of this email exchange is attached hereto 22 as Exhibit 4. 23 10. On December 5, 2018,1 provided notice to counsel for Defendant by e-mail of the nature 24 of the relief to be requested and the date, time, and place for the presentation of this application. 25 Counsel for Defendant has indicated that the ex parte application will be opposed. A tme and correct 26 copy of this email communication is attached hereto as Exhibit 5. As such, notice of this ex parte 27 application was given in accordance with Califomia Rules of Court, mles 3.1200 - 3.1207. No prior ex 28 DECLARATION OF PIYA MUKHERJEE CASE No. 34-2017-00210560-CU-OE-GDS 1 parte applications have been filed in this matter. 2 11. There is a compelling need for the urgent handling of this matter. Without the hearing 3 date on the Motion to Continue being expedited. Plaintiffs will be forced to file a motion for class 4 certification before a mling on Defendant's pending Renewed MSA. The hearing date on the Renewed 5 MSA is presently Febmary 4, 2019 and Plaintiffs' deadline to file the motion for class certification is 6 December 14, 2018. Given that the result of the Renewed MSA could affect the claims Plaintiffs may 7 seek to certify and the way Plaintiffs may present the theory of liability, a continuance is needed so the 8 motion for class certification and opposition to the decertification motion can rely on the Renewed MSA 9 ruling. The requested order shortening time to hear Plaintiffs' Motion to Continue is, therefore, 10 necessary to have a decision on the Motion to Continue before the deadline to file the class certification 11 and decertification motions. As such, there is a compelling need for Motion to Continue hearing date to 12 be advanced. 13 12. Defendant is represented by the following counsel: Timothy J. Long 14 (tilongfgorrick.com): Nicholas J. Horton rnhortonfgi.orrick.com'): ORRICK, HERRJNGTON & 15 SUTCLIFFE LLP, 400 Capitol Mall, Suite 3000, Sacramento, CA 95814-4497, Telephone: (916) 16 447-9200, Facsimile: (916) 329-4900. 17 13. I will serve counsel for Defendant with the ex parte application and all other supporting 18 documents via e-mail and Federal Express. 19 20 I declare under penalty of perjury under the laws of the State of Califomia that the 21 foregoing is tme and correct. Executed this 5th day of December, 2018, at La Jolla, Califomia. 22 23 24 PIVA MUKHERJEE 3 ^ 25 26 27 28 DECLARATION OF PIYA MUKHERJEE CASE No. 34-2017-00210560-CU-OE-GDS 1 2 3 4 5' 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 EXHTBTT #1 24 25 26 27 28 DECLARATION OF PIYA MUKHERJEE CASE No. 34-2017-0021 b560-CU-OE-GDS 1 BLUMENTHAL NORDREHAUG BHOWMIK DE BLOUW LLP Norman B. Blumenthal (State Bar #068687) 2 Kyle R. Nordrehaug (State Bar #205975) Aparajit Bhowmik (State Bar #248066) 3 Piya Mukherjee (State Bar #274217) 2255 Calle Clara 4 La Jolla, CA 92037 Telephone: (858)551-1223 5 Facsimile: (858) 551-1232 6 Attomeys for Plaintiff Andrea Spears 7 8 SUPERIOR COURT OF THE STATE OF CALIFORNIA 9 IN AND FOR THE COUNTY OF SACRAMENTO 10 11 ANDREA SPEARS, an individual, on behalf CASE No. 34-2017-00210560-CU-OE-GDS 12 of herself and on behalf of all persons similarly situated. 13 Plaintiff, CLASS ACTION 14 PLAINTIFF ANDREA SPEARS'S NOTICE 15 HEALTH NET OF CALIFORNIA, INC., a OF MOTION AND MOTION TO Califomia Corporation; and Does 1 through CONTINUE HEARING DATE AND 16 50, inclusive. BRIEFING SCHEDULE RELATING TO Defendants. CLASS CERTIFICATION; 17 TOMAS R. ARANA, on behalf of himself, all MEMORANDUM OF POINTS AND 18 others similarly situated. AUTHORITIES IN SUPPORT Plaintiff, V. 19 Hearing Date: TBD 20 HEALTH NET OF CALIFORNIA, INC., a Hearing Time: TBD Califomia corporation; and DOES 1-50, Judge: Hon. Alan G. Perkins 21 inclusive, DepL: 35 Defendant. 22 Action Filed: April 5,2017 23 24 25 26 27 28 NOTICE OF MOTION AND MOTION TO CONTINUE CLASS CERTIFICATION CASE No. 34-2017-00210560 1 TO THE COURT, ALL PARTIES AND THEIR ATTORNEYS OF RECORD: 2 PLEASE TAKE NOTICE THAT on a date and time to be determined by the Court, Plaintiff 3 Andrea Spears will and hereby does move for an order continuing the December 14,2018 deadline for 4 filing Plaintiffs' opening brief for class certification and Defendant's motion for decertification, briefing 5 schedules and the associated April 11, 2019 hearing date. This motion will be heard before the 6 Honorable Alan G. Perkins, Judge of the Superior Court of the County of Sacramento. 7 This motion is brought on the grounds that good cause exists to enter the order as on 8 November 19,2018, Defendantfileda Renewed Motion for Summary Adjudication (" Renewed MSA") 9 without providing prior notice to both Plaintiffs and the Court, and unilaterally set the hearing date for 10 the Renewed MSA on Febmary 4, 2019. Because the outcome of Defendant's Renewed MSA will 11 affect how Plaintiffs will present the common predominance theories of liability in Plaintiffs' upcoming 12 motion for class certification as well as Plaintiffs' opposition to Defendant's forthcoming motion for 13 decertification, the interests of efficiency require that the briefing schedules for the motion for class 14 certification and motion for decertification be continued. Plaintiffs are, therefore, requesting the briefing 15 schedule continued such that the hearing on the class certification and decertification motions is on June 16 28, 2019, or a date thereafter convenient for the Court. This request, if granted, would move the filing 17 date ofthe motions from December 14, 2018 to no earlier than April 12, 2018, providing Plaintiffs a 18 sufficient amount of time to draft the motion based on the outcome of Defendant's Renewed MSA. 19 Counsel has made a reasonable and good faith effort to informally resolve the issues presented 20 by this motion. Defendant has unreasonably refused to cooperate in continuing the class certification 21 motion briefing schedule and hearing date. The motion will be based upon this notice, the memorandum 22 of points and authorities, the declaration of Piya Mukherjee and exhibits thereto, along with the papers 23 in the Court record and the oral argument at the hearing. 24 /// 25 /// 26 /// 27 /// 28 /// NOTICE OF MOTION AND MOTION TO CONTINUE CLASS CERTIFICATION CASE No. 34-2017-00210560 1 Pursuant to Local Rule 1.06(A), the court will make a tentative ruling on the merits of 2 this matter by 2:00 p.m., the court day before the hearing. The hearing date on this motion shall 3 be set by the Court. The complete text of the tentative rulings for the department may be 4 downloaded off the court's website. If the party does not have online access, they may call the 5 dedicated phone number for the department as referenced in the local telephone directory between 6 the hours of 2:00 p.m. and 4:00 p.m. on the court day before the hearing and receive the tentative 7 ruling. If you do not call the court and opposing party on the court day before the hearing, no 8 hearing will be held. 9 DATED: December 5,2018 BLUMENTHAL NORDREHAUG BHOWMIK DE BLOUW, LLP 10 11 By: Piya Mukherjee A 12 Attomeys for Plaintiff Anorea Spears 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 NOTICE OF MOTION AND MOTION TO CONTINUE CLASS CERTIFICATION CASE No. 34-2017-00210560 1 MEMORANDUM OF POINTS AND AUTHORITIES 2 I. INTRODUCTION 3 Plaintiffs hereby moves for an Order continuing the December 14, 2018 deadline for filing 4 Plaintiffs' opening brief for class certification and Defendant's decertification motion to no earlier than 5 April 12,2019, which would result in approximately a four (4) month continuance of the filing deadline. 6 This requested continuance would also result in only a less than two (2) month continuance to the April 7 I I , 2019 hearing date. 8 The continuance is required because Defendant Health Net of Califomia, Inc. ("Defendant") 9 filed a Renewed Motion for Summary Adjudication ("Renewed MSA") on November 19, 2018 to be 10 heard on Febmary 4, 2019 which would result in Plaintiffs needing to file the motion for class 11 certification well before a mling on the Renewed MSA. Given that the result of the Renewed MSA could 12 affect the claims Plaintiffs may seek to certify and the way Plaintiffs may present the theory of liability, 13 a continuance is needed so the motion for class certification and opposition to the decertification motion 14 can rely on the Renewed MSA mling. 15 Defendant has previously filed a motion for summary adjudication which was set to be heard 16 the day before Plaintiffs' deadline to file a motion for class certification on September 28, 2018. After 17 forcing Plaintiffs to file a motion to continue the class certification motion hearing date and briefing 18 schedule, Defendantfinallystipulated to a continuance of the class certification motion filing deadline, 19 hearing date and briefing schedule until after the hearing on the motion for summary adjudication. 20 After the Court mled to grant in part and deny in part Defendant's motion for summary 21 adjudication, the Parties appeared before Judge Perkins in Department 35 for a case management 22 conference on November 9, 2018 where Defendant did not at any point state at the hearing that 23 Defendant had any intention to file a second motion for summary adjudication. Defendant's case 24 management conference statement, also, failed to express Defendant's intent to file a renewed motion 25 for summary adj udication. Rather, ten (10) days after the case management conference. Defendant blind- 26 sided Plaintiffs and the Court with the filing of the Renewed MSA. 27 Plaintiffs have been diligent in prosecuting this matter against Defendant, serving and 28 responding to discovery, taking the deposition of Defendant's Person Most Knowledgeable ("PMK"), NOTICE OF MOTION AND MOTION TO CONTINUE CLASS CERTIFICATION CASE No. 34-2017-00210560 -1- 1 engaging in significant motion practice, including, successfully opposing Defendant's initial motion for 2 summary adjudication. (Declaration of Piya Mukherjee ^ 3 ("Mukherjee Decl.")). 3 In this class action. Plaintiffs assert causes of action based at least in part on Defendant's 4 failure to properly calculate Plaintiffs' and Class Members' regular rate, which results in a systemic 5 underpayment of wages to these employees. Defendant's Renewed MSA seeks to dispose of this issue 6 as to Defendant's miscalculation of Plaintiffs and Class Members' regular rate and corresponding failure 7 to compensate Plaintiffs and Class Members for all their overtime hours worked. Plaintiffs oppose 8 Defendant's Renewed MSA and will continue to seek redress on behalf of a class of employees who 9 were subject to this practice and who worked overtime. Plaintiffs will seek to certify a class based on 10 these allegations. To the extent Defendant's Renewed MSA is granted in any manner, it will have clear 11 implications for Plaintiffs' motion to certify a class based on the claims at issue. Because the Febmary 12 4,2019 hearing regarding Defendant's failure to compensate its employees for all overtime hours worked 13 by failing to include all non-discretionary bonus wages in its calculation of the regular rate and the 14 subsequent order will impact Plaintiffs' motion for class certification, currently due for on December 14, 15 2018, Plaintiffs seek a continuance to the deadline for filing the motion for class certification and the 16 Defendant's deadline for filing the motion for decertification, such that Defendant's Renewed MSA will 17 be resolved prior to the certification motion deadline. 18 Since Defendant refused a reasonable request to stipulate to continue this deadline. Plaintiffs 19 were forced to file this motion in order to prevent the waste of judicial and party resources that would 20 result from having the motion for class certification filed before the hearing on Defendant's Renewed 21 MSA. For all these reasons, as detailed more fully below. Plaintiffs respectfully request the Court issue 22 an order continuing the April 11,2019 hearing date on the motions related to class certification to June 23 28, 2019, or a date thereafter convenient for the Court, and setting opening class certification and 24 decertification motion filing deadlines of no earlier than April 12, 2019, opposition deadlines of no 25 earlier than May 17, 2019 and reply filing deadlines of no earlier than June 14,2019. 26 27 28 NOTICE OF MOTION AND MOTION TO CONTINUE CLASS CERTIFICATION CASE No. 34-2017-00210560 -2- 1 H. FACTUAL HISTORY 2 Plaintiff Spears's action was consolidated with Plaintiff Arana's action on October 11,2017. 3 (Mukherjee Decl. at ^ 3). The plaintiffs have served multiple sets of discovery and have taken the 4 deposition of Defendant's Person Most Knowledgeable for a portion of the classifications in Plaintiff 5 Spears's Notice of Deposition of Defendant. (Id.). The Plaintiffs have met and conferred extensively 6 with Defendant regarding discovery and the Parties have engaged in substantial motion practice. (Id.) 7 The briefing schedule regarding Plaintiffs' Motion for Class Certification and Defendant's Motion for 8 Decertification was continued by the Parties by stipulation in order to prevent requiring Plaintiffs to file 9 motions related to class certification one (1) day after the hearing on Defendant's initial motion for 10 summary adjudication. (Id. at ^ 4). Plaintiffs initially filed a motion to continue the hearing date and 11 briefing schedule. (Id.). Plaintiffs' motion was eventually taken off calendar because Defendant agreed 12 to stipulate to Plaintiffs' requested continuance so that Plaintiffs' motion for class certification could 13 adequately address the Court's ruling on the motion for summary adjudication. (Id.). The current 14 briefing schedule was set as follows: 15 The motion for class certification and motion for decertification filing deadline: December 16 14,2018; 17 Any opposition to the opening class certification related motions: Febmary 15, 2019; 18 Any reply in response: March 15, 2019; and 19 Hearing as to the motions related to class certification: April 11, 2019 at 10:00 a.m. (Id.) 20 On October 23, 2018, Judge Kmeger in Department 54 issued a mling granting in part and 21 denying in part Defendant's initial motion for summary adjudication. (Exhibit 1'). The intent behind 22 the continuation of the class certification motion briefing schedule was to ensure that Plaintiffs' motion 23 for class certification would be tailored to address Judge Krueger's ruling on the initial motion for 24 summary adjudication. 25 On October 26, 2018, Defendant filed and served a case management conference statement 26 which included a section regarding "dispositive motions." (Exhibit 2). Therein, while Defendant states 27 28 All exhibits are attached to the Declaration of Piya Mukherjee, filed and served herewith. NOTICE OF MOTION AND MOTION TO CONTINUE CLASS CERTIFICATION CASE No. 34-2017-00210560 -3- 1 that it is considering whether to appeal the ruling on the motion for summary adjudication. Defendant 2 fails to state that it is considering filing a renewed motion for summary adjudication. ("Exhibit 2.2:7-14). 3 Thereafter, the Parties appeared before this Court on November 9, 2018 for a case management 4 conference where Defendant, again, did not notify this Court or Plaintiffs that it had any intention of 5 filing a renewed motion for summary adjudication. (Mukherjee Decl., at 17). On November 19,2018, 6 without providing any prior notice, Defendant filed the Renewed MSA. (Id. at If 8). 7 On November 27, 2018, four (4) business days after Defendant served the renewed MSA, 8 Plaintiffs provided Defendant a draft stipulation to continue the hearing date and briefing schedule on 9 the motion for class certification such that the scope of the claims and the proposed class are consistent 10 with the order on the Renewed MSA, scheduled to be heard on Febmary 4,2018. (Mukherjee Decl., at 11 1^ 9-10). On November 28,2018, Defendant responded to Plaintiffs and stated that it would not agree 12 to continue the briefing schedule on the motion for class certification necessitating the filing of this 13 motion. (Exhibit 3). 14 15 I I I . ARGUMENT 16 A court's determination as to whether class certification is appropriate does not tum on 17 whether the claims asserted are legally or factually meritorious, but it does require an examination of 18 issues involving the merits of the case. Brinker Rest. Corp. v. Superior Court, 53 Cal. 4th 1004, 1023 19 (2012). "In particular, whether common or individual questions predominate will often depend upon 20 resolution of issues closely tied to the merits. To assess predominance, a court 'must examine the issues 21 framed by the pleadings and the law applicable to the causes of action alleged.'" Id. at 1024 (intemal 22 citations omitted). 23 A motion for summary adjudication seeks to dispose of an entire cause of action, an 24 affirmative defense, a claim for damages, or an issue of duty because such a motion "contends that the 25 cause of action has no merit, that there is no affirmative defense to the cause of action, that there is no 26 merit to an affirmative defense as to any cause of action, that there is no merit to a claim for damages, 27 as specified in Section 3294 of the Civil Code, or that one or more defendants either owed or did not owe 28 a duty to the plaintiff or plaintiffs." Cal. Code Civ. Proc. §437c(f)(l). NOTICE OF MOTION AND MOTION TO CONTINUE CLASS CERTIFICATION CASE No. 34-2017-00210560 -4- 1 Thus, a decision on a motion for summary adjudication has implications for a motion 2 for class certification. See Archer v. United Rentals, Inc., 195 Cal. App. 4th 807,812 (201 l)(reversing 3 an order denying class certification because the court also reversed an aspect of the trial court's order 4 granting the defendant's motion for summary adjudication). A decision either way will impact the 5 definitions of the proposed classes and the claims those classes assert. Id. A decision as to the merits of 6 one or more causes of action will alter the analysis required to determine whether common questions 7 predominate because such an analysis requires an investigation as to the resolution of the merits of the 8 case. Brinker Rest. Corp, 53 Cal. 4th 1004, 1024. 9 In this class action. Plaintiffs asserts seven causes of action: (1) Failure to Provide Meal 10 Periods in violation of Cal. Lab. Code §§ 204, 223, 226.7, 512, and 1198; (2) Failure to Provide Rest 11 Periods in violation of Cal. Lab. Code §§ 204, 223, 226.7, and 1198; (3) Failure to Pay Hourly Wages 12 in violation of Cal. Lab. Code §§ 223,510,1194,1194.2,1197,1197.1, and 1198; (4) Failure to Provide 13 Accurate Written Wage Statements in violation of Cal. Lab. Code § 226(a); (5) Failure to Timely Pay 14 All Final Wages in violation of Cal. Lab. Code §§ 201,202, and 203; (6) Unfair Competition in violation 15 of Cal. Bus. & Prof Code §§ 17200, et seq.; and (7) Violation of the Private Attomeys General Act, Cal. 16 Lab. Code §§ 2698, et seq. Several of these causes of action are based, in part, on Defendant's failure 17 to properly calculate Plaintiffs' and Class Members' regular rate of pay, resulting in a systemic 18 underpayment of wages to these employees. Defendant's Renewed MSA seeks to dispose of the issue 19 of Defendant's miscalculation of Plaintiff and Class Members' overtime wages. 20 In ruling on whether Defendant failed to include cash in lieu payments in the regular rate, the 21 Court will base its mling on the facts relevant to this dispute. In so doing, the Court will instmct the 22 parties as to those facts that are tmly the ones that create a triable issue of fact. Therefore, leaming what 23 those relevant triable issues are is critical for Plaintiffs to argue in the motion for class certification how 24 those triable issues of fact can be adjudicated based on common evidence. 25 When the class certification motion briefing schedule was reset to December 14, 2018, 26 Plaintiffs anticipated that any motions for summary adjudication would have already been mled on and 27 that the legal and factual claims would be understood. Plaintiffs did not anticipate, and Defendant did 28 not provide any indicafion, that a second motion for summary adjudication would befiledby Defendant NOTICE OF MOTION AND MOTION TO CONTINUE CLASS CERTIFICATION CASE No. 34-2017-00210560 -5- 1 after a ruling on the first one. Simultaneous briefing on the motion for class certification and the 2 Renewed MSA will only lead to unnecessary confusion with respect to the outstanding legal and factual 3 issues. Defendant, by forcing Plaintiffs to file a motion for class certification while the Renewed MSA 4 is pending appears to be seeking a tactical advantage in order to prevent Plaintiffs from setting forth 5 certifiable theories of the case in the motion for class certification based on the Court's forthcoming 6 mling on the Renewed MSA. Because a decision as to Defendant's Renewed MSA has clear implications 7 for Plaintiffs' motion to certify a class based on Defendant's failure to compensate its employees for all 8 overtime hours worked because it failed to include all non-discretionary bonus wages in its calculation 9 of the regular rate, Plaintiffs respectfully request that the briefing schedules associated with the motions 10 related to class certification be continued such that Defendant's Renewed MSA will be resolved prior 11 to the deadline to file the motions related to class certification. 12 13 IV. CONCLUSION 14 Plaintiffs respectfully request the Court issue an order continuing the April 11, 2019 hearing 15 date on the motions related to class certification to June 28,2019, or a date thereafter convenient for the 16 Court, and setting the briefing schedule pursuant to Rule of Court 3.764, which would result in motion 17 filing deadlines of no earlier than April 12,2019. Efficiency and judicial economy require that briefing 18 for Plaintiffs' motion for class certification and Defendant's motion for decertification be continued. 19 Plaintiffs' requested extension is reasonable in light of the fact that it will allow the motions related to 20 class certification to be filed after a mling on Defendant's dispositive Renewed MSA to ensure that the 21 scope of the claims and proposed class set forth in the motions is consistent with the mling on the 22 Renewed MSA. 23 24 DATED: December 5,2018 BLUMENTHAL NORDREHAUG BHOWMIK DE BLOUW LLP 25 26 *iya Mukherjee 27 Counsel for Plaintiff AndreSfSpears 28 NOTICE OF MOTION AND MOTION TO CONTINUE CLASS CERTIFICATION CASE No. 34-2017-00210560 -6- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 EXHTBTT #2 24 25 26 27 28 DECLARATION OF PIYA MUKHERJEE CASE No. 34-2017-00210560-CU-OE-GDS SUPERIOR COURT OF CALIFORNIA, COUNTY OF SACRAMENTO GORDON D SCHABER COURTHOUSE MINUTE ORDER DATE: 10/23/2018 TIME: 11:12:00 AM DEPT: 54 JUDICIAL OFFICER PRESIDING: Christopher Krueger CLERK: G. Toda REPORTER/ERM: BAILIFF/COURT ATTENDANT: CASE NO: 34-2017-00210560-CU-OE-GDS CASE INIT.DATE: 04/05/2017 CASE TITLE: Spears vs. Health Net of California Inc CASE CATEGORY: Civil - Unlimited ASSOCIATED CASES: 34-2017-00216685-CU-OE-GDS APPEARANCES Nature of Proceeding: Ruling on Submitted Matter- (Motion for Summary Adjudication)- Taken Under Submission 9/27/18 TENTATIVE RULING Defendant Health Net of California, Inc.'s ("HNCA") Motion for Summary Adjudication as against the Third and Seventh Causes of Action in the Consolidated Complaint of Plaintiffs Andrea Spears and Tomas R. Arana (collectively, "Plaintiffs") is DENIED IN PART AND GRANTED IN PART as described below. Allegations in Pleading This is a consolidated wage-and-hour putative class action. Andrea Spears ("Spears") and Tomas R. Arana ("Arana") (collectively "Plaintiffs") are the named plaintiffs. Defendant Health Net of California, Inc. ("HNCA" or "Defendant") is the moving party seeking summary adjudication here. Plaintiffs allegedly served as hourly, non-exempt employees in HNCA call centers. Arana allegedly was promoted to a salaried, exempt position in or about November 2015. He alleges HNCA misclassified him as exempt. In the consolidated Complaint, Plaintiffs allege that Defendants failed to pay them and all other similarly situated individuals for all hours worked and failed to pay overtime wages at the correct rate, among other things. (Complaint at 1 (Register of Actions ("ROA") 66).) There is also a PAGA claim for civil penalties. Central to the instant motion are Plaintiffs' overtime claims, which are premised on HNCA's alleged failure to include "cash benefits" or "cash in lieu of benefits" when calculating the "regular rate" for overtime. It is undisputed that HNCA employees who waived medical benefits received such "cash" in their paychecks. Plaintiffs argue that such "cash" payments should have been included when calculating overtime rates. Defendant argues that such payments were properly excluded when calculating overtime rates because, as a matter of law and on undisputed facts, such payments are subject to a statutory exclusion codified at 29 U.S.C. § 207(e)(4), also known as the Benefit-Plan Contributions Exception. DATE: 10/23/2018 MINUTE ORDER Page 1 DEPT: 54 Calendar No. CASE TITLE: Spears vs. Health Net of California Inc CASE NO: 34-2017-00210560-CU-OE-GDS Request to Strike Plaintiffs' Amended Opposition This motion was originally set to be heard on May 30, 2018, but the Court continued the motion to today's date to allow Plaintiff additional requested discovery of payroll records, and to allow amended opposition and reply briefing. In that Order of May 30, 2018, the Court found "that Plaintiff has made a sufficient showing under section 437c, subdivision (h), to justify the exercise of discretion and grant of the requested continuance." Defendant now requests that Plaintiffs' Amended Opposition papers be stricken because they do not "argue why the payroll records they sought created a triable issue of fact" and also because they contradict portions ofthe original Opposition papers. (Def.'s Amended Reply at 3.) Defendant's request is OVERRULED. The Court's prior Order granted the continuance for the additional discovery and called for the filing of an Amended Opposition, but the Court's Order did not expressly limit the scope of the Amended Opposition in any way, and Defendant did not request any such limitation. As a result, the Amended Opposition does not violate the Court's Order of May 30, 2018. Accordingly, in ruling on this motion, the Court considers the original moving papers, the Amended Opposition papers, and the Amended Reply papers. Evidentiary Objections No separate written objections to evidence were filed. The Court notes that Defendant filed an Amended Reply Separate Statement of Undisputed Material Facts, to which Plaintiffs' Opposition papers raised an anticipatory objection. The Court considered the legal arguments made in Defendants' Amended Reply Separate Statement with respect to the UFs specifically discussed below herein. The Court also notes that Defendant filed new evidence with its Reply, i.e., evidence regarding "wellness payments." However, the Court did not find it necessary to reach the new evidence in ruling on the instant Motion. Legal Standard A defendant moving for summary judgment or summary adjudication may demonstrate that the plaintiffs cause of action has no merit by showing that (1) one or more elements of the cause of action cannot be established, or (2) there is a complete defense to that cause of action. (Code Civ. Proc. § 437c(f)(2), (p)(2); Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 843, 849.) This showing must be supported by evidence, such as affidavits, declarations, admissions, interrogatory answers, depositions, and matters of which judicial notice may be taken. (Code Civ. Proc. § 437c(p)(2); Aguilar, 25 Cal.4th at 850, 855.) A defendant moving for summary judgment or summary adjudication bears the burden of showing that the causes of action have no merit or that there are one or more complete defenses to them. (Code Civ. Proc. § 437c(p)(2).) A judge must grant a motion for summary judgment if all the papers submitted show that there is no triable issue as to any material fact and that the moving party is entitled to judgment as a matter of law. (Id. § 437c(c); Mann v. Cracchiolo (1985) 38 Cal.3d 18, 35.) Summary judgment is properly granted only if the moving party's evidence establishes that there is no issue of material fact to be tried. (Upson v. Superior Court (1982) 31 Cal.3d 362, 374.) Once the moving party meets this burden of production, the burden shifts to the opposing party to produce admissible evidence DATE: 10/23/2018 MINUTE ORDER Page 2 DEPT: 54 Calendar No. CASE TITLE: Spears vs. Health Net of Califomia Inc CASE NO: 34-2017-00210560-CU-OE-GDS demonstrating the existence of a triable issue of material fact. (Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 849.) A judge may not grant summary judgment when any material factual issue is disputed. (O'Riordan v. Federal Kemper Life Assur. (2005) 36 Cal.4th 281, 289.) The issues raised by a motion for summary adjudication or summary judgment are framed by the pleadings. (Dromy v. Lukovsky (2013) 219 Cal.App.4th 278, 282; Lennar Northeast Partners v. Buice (1996) 49 Cal.App.4th 1576, 1582.) Discussion Third Cause of Action for Failure to Pay Hourly Wages and Failure to Pay Overtime Wages Issue 1: Plaintiffs' failure to pay overtime wages claim premised on HNCA's alleged failure to Include cash benefits received In lieu of medical payment In Plaintiff Spears' regular rate of pay fails because cash benefits were properly excluded from her regular rate under the Benefit-Plan Contributions Exception. California follows the Fair Labor Standards Act ("FLSA"), which excludes from the regular rate for purposes of overtime compensation the "cash" employees receive when they waive medical coverage under what is known as the Benefit-Plan Contributions Exception. (See 29 U.S.C. § 207(e)(4) ("Section 207(e)(4)"); see also 29 C.F.R. § 778.215(a).) Section 207(e)(4) provides: (a) "Regular rate" defined. As used in this section the "regular rate" at which an employee is employed shall be deemed to include all remuneration for employment paid to. or on behalf of. the employee, but shall noi be deemed to include [ . . . ] (4) contributions irrevocably made by an employer to a trustee or third person pursuant to a bona fide plan for providing old-age, retirement, life, accident, or health insurance or similar benefits for employees. (29 U.S.C. § 207(e)(4) (emphasis added); see also Huntington Memorial Hospital v. Superior Court (2005) 131 Cal.App.4th 893, 903-905 (summarizing how the "regular rate" must be calculated for purposes of determining overtime pay).) Courts have applied Section 207(e)(4) so as to find that an employer that pays "cash in lieu of benefits" directly to employees will not, as a matter of law, be able to have such payments be excluded from the "regular rate." To be excluded from the "regular rate," the "cash in lieu of benefits" payments must be made to a "trustee or third party" as employer "contributions" within the plain text of Section 207(e)(4). (See Flores v. City of San Gabriel (9th Cir. 2016) 824 F.3d 890, 894, 901-03 (because the city paid cash in lieu of unused benefits directly to employees, such payments had to be included in regular rate of pay and thus in calculation of overtime rate; payment was not excluded under 29 U.S.C. §  ;207(e)(4) because it was paid "directly to employees" and therefore was not a "contribution by the employer"); see also Local 246 Util. Workers Union v. Southern Cal. Edison Co. (9th Cir. 1995) 83 F.3d 292, 296 (reversing grant of summary judgment to employer because employer failed to show that "supplemental payments to employees consisted of contributions made by [the employer] irrevocably to a trust.").) Although neither party identified any decisions from California courts on this issue, both parties cite to federal district court and Ninth Circuit case law. In Flores, the Ninth Circuit explained: The City also argues that its cash-in-lieu of benefits payments are properly excluded pursuant to § 207(e)(4). Section 207(e)(4) excludes from the regular rate of pay "contributions irrevocably made by an employer to a trustee or third person pursuant to a bona fide plan for providing old-age, retirement, life. DATE: 10/23/2018 MINUTE ORDER Page 3 DEPT: 54 Calendar No. CASE TITLE: Spears vs. Health Net of California Inc CASE NO: 34-2017-00210560-CU-OE-GDS accident, or health insurance or similar benefits for employees." Because the City pays the unused benefits directly to its employees and not "to a trustee or third person," its cash-in-lieu of benefits payments cannot be excluded under § 207(e)(4). We rejected a similar argument in Local 246 when the employer had proffered no evidence that any of the payments at issue were made to a trust rather than directly to the employees because "[s]ection 207(e)(4) deals with contributions by the employer, not payments to the employee." Local 246, 83 F.3d at 296. That reasoning applies equally here. The City urges us to find that its cash-in-lieu of benefits payments fall within the ambit of § 207(e)(4) even though the payments are not made to a trustee or third party because the payments "generally" meet the requirements of that subsection, arguing that it should not be penalized for administering its own flexible benefits plan. But" [wjhere '[a] statute's language is plain, the sole function of the courts is to enforce it according to its terms,' because 'courts must presume that a legislature says in a statute what it means and means in a statute what it says there.'" [Citations.] The City's cash-in-lieu of benefits payments are not made to a trustee or third party, and therefore those payments do not meet the requirements of § 207(e)(4). We are not at liberty to add exceptions to the clear requirements set forth in the statute for payments that "generally" satisfy the requirements of that provision. This is particularly true here, where exemptions to the FLSA's requirements are to be narrowly construed in favor of the employee. [Citations.] We thus have no trouble concluding that the City's cash-in-lieu of benefits payments are not properly excluded from the regular rate of pay pursuant to § 207(e)(4). (Flores, 824 F.3d at 901-02 (emphasis added) (citations omitted); see also Local 246, 83 F.3d 292, 296 ("On this record, however, there is no indication that any of the supplemental payments to the employees consisted of contributions made by Edison irrevocably to a trust. Section 207(e)(4) deals with contributions by the employer, not payments to the employee. If the employer meets the requirements of section 207(e)(4) in making irrevocable contributions to a trust, then those contributions will not be added to the regular pay rate on the theory that they are a form of indirect bonus to the worker.") (emphasis added).) In ruling on this motion, the Court is bound by Section 207(e)(4)'s plain text stating that only employer "contributions" to a third party will be excluded from the "regular rate." The Court herein also applies Flores and Local 246, both of which require an employer to produce evidence that "cash in lieu of benefits" payments were: (1) in fact "contributions" to a "trustee or third party," (2) made pursuant to a benefits plan, and (3) not paid directly to the employee. Defendant's moving papers argue that the payments of "cash in lieu of benefits" to employees can be permissibly excluded from the "regular rate" given that HNI, not HNCA, made those payments to HNCA's employees. Defendant argues that taking the instant case beyond the scope of Flores, HNCA did not "directly" pay its employees the "cash" ~ HNI did. Defendant argues that HNI is HNCA's parent company and the "third party" charged with administering HNCA's employee health and welfare benefit Plan ("Plan"), as well as the third party payroll administrator for HNCA.) Defendant essentially argues that, by virtue of HNI's involvement as a go-between or intermediary between HNCA and HNCA's employees, HNCA undisputedly did not make those "cash" payments "directly" to employees, such that Flores is factually distinguishable. However, Defendant's actual evidence - itemized in its Separate Statement of Undisputed Facts ("SSUF") - fails to address the actual source of the "cash in lieu of benefits." Instead, the SSUF states generally that HNCA "paid the actual costs of benefits under the plan" to "eligible employees who elected to participate" in the Plan. (UF 7 (emphasis added).) Similarly, UF 8 asserts that pursuant to the Plan, "HNCA arranged for the monies used to pay the actual costs of benefits to be deposited into an account maintained and controlled by HNI as the Plan's sponsor." (UF 8 (emphasis added).) Both UF 7 DATE: 10/23/2018 MINUTE ORDER Page 4 DEPT: 54 Calendar No. CASE TITLE: Spears vs. Health Net of California Inc CASE NO: 34-2017-00210560-CU-OE-GDS and UF 8 give rise to the inference that HNCA contributed the "actual costs of benefits" to HNI pursuant to the Plan - but there is no evidence as to what the "actual costs of benefits" actually means. Crucially, there is no evidence that the "actual costs of benefits" includes the "cash in lieu of benefits" at the heart of this motion. In other words, despite the plain text of Section 207(e)(4) requiring an employer to demonstrate that the amounts it seeks to exclude from the "regular rate" were in fact "contributions" from the employer to a third party pursuant to a benefits plan, no UF squarely asserts that HNCA "contributed" the "cash in lieu of benefits" payments to HNI. While there is evidence that HNCA contributed the "actual costs of benefits" to HNI, no UFs define the phrase "actual costs of benefits." No UFs demonstrate that "cash in lieu bf benefits" is an "actual cost of benefits." Defendant has not clearly identified evidence: (1) that it actually "contributed" the "cash in lieu of benefits" to third party HNI, and (2) that HNI, not HCNA, actually paid out those amounts to employees. Therefore, the Court must find that Defendant did not meet its initial burden on this motion. The Court has examined the evidence specifically identified as support for the various pertinent UFs, including those stating that HNCA "paid the actual costs of benefits," that employees can waive medical benefits, and that employees waiving such benefits would receive a cash payment in their paycheck. (UFs 7, 8, 9, 16, 18, 19.) But on the Court's review, none of the cited evidence actually states that HNCA "contributed" the "cash in lieu of benefits" to HNI, or that all "cash in lieu of benefits" payouts would have necessarily come from funding that HNCA had "contributed" to HNI for the "actual costs of benefits" under the Plan. For instance, declarant Kelly Sarabia, the Payroll Director for HNI during the relevant perio