Gutierrez v. Cal. Commerce Club, Inc.

• Decision Date: 10 November 2010
• Docket Number: No. B212062.,B212062.
• Citation: 187 Cal.App.4th 969,114 Cal.Rptr.3d 611
• Court: California Court of Appeals Court of Appeals
• Parties: Sergio GUTIERREZ et al., Plaintiffs and Appellants, v. CALIFORNIA COMMERCE CLUB, INC., Defendant and Respondent.

187 Cal.App.4th 969

114 Cal.Rptr.3d 611

Sergio GUTIERREZ et al., Plaintiffs and Appellants,

v.CALIFORNIA COMMERCE CLUB, INC., Defendant and Respondent.

No. B212062.

Court of Appeal, Second District, Division 1, California.

Aug. 2, 2010.

Review Denied Nov. 10, 2010.

Rastegar & Matern, Matthew J. Matern and Thomas S. Campbell, Torrance, for Plaintiffs and Appellants.

Winston & Strawn, Anna Segobia Master and Jennifer Rappoport, Los Angeles, for Defendant and Respondent.

JOHNSON, J.

Sergio Gutierrez and Hector Salazar filed the operative third amended class action complaint against California Commerce Club, Inc.(Club), alleging, among other things, that they and other similarly situated members of the putative class were injured by the Club's unlawful policy and practice of denying meal and rest breaks to certain hourly, non-union employees. The trial court sustained the Club's demurrer without leave to amend, on the ground the plaintiffs had failed to show the existence of a class, and dismissed the action as to all representative claims. We reverse. In this action, as in the vast majority of wage and hour disputes, class suitability should not be determined on demurrer.

BACKGROUND

The challenged ruling arises in the context of an order sustaining a demurrer without leave to amend. Accordingly, we accept as true the factual allegations of the operative pleading. ( Tarkington v. California Unemployment Ins. Appeals Bd. (2009) 172 Cal.App.4th 1494, 1498, fn. 1, 92 Cal.Rptr.3d 131 ( Tarkington ).)

Initial complaint

In October 2006 Gutierrez filed a purported class action complaint, alleging three causes of action stemming from the Club's alleged (1) failure to provide Gutierrez and other non-exempt Club employees with rest breaks and compensation in violation of Labor Code section 226.7 (section 226.7) and Wage and Hour Order No. 10-2001, section 12 (Order 10-2001); (2) violation of Labor Code section 2699, the Private Attorneys General Act (PAGA), for which Gutierrez sought civil penalties; and (3) unlawful business practices in violation of the Unfair Competition Law (UCL) (Bus. & Prof.Code § 17200). ¹ Gutierrez alleged the Club currently employed over 1,000 hourly employees who, together with similarly situated former employees, had been subjected to the same illegal payroll practices and policies. Gutierrez purported to represent all of the Club's similarly situated employees who were not dealers.²

The Club demurred to the complaint on the grounds that it failed to state facts sufficient to state causes of action for violations of sections 226.7, 558 and PAGA, was fatally uncertain as to the scope of the purported class, and that no private cause of action existed under section 226.7. That demurrer was mooted when Gutierrez filed a first amended complaint.

First amended complaint

On March 29, 2007, Gutierrez filed a first amended complaint (FAC) premised again on the theory of missed rest periods and unpaid compensation, and alleging causes of action for (1) failure to provide rest periods in violation of section 226.7 and Order 10-2001; (2) violation of PAGA; (3) violation of Labor Code section 558; and (4) unlawful business practices in violation of the UCL.

The Club demurred to the FAC, arguing it was impermissibly vague, ambiguous and unintelligible with respect to the group of employees whom Gutierrez purported to represent. In addition, the Club argued Gutierrez had failed to state facts to constitute any cause of action, in that he failed to allege whom had been injured by the conduct about which he complained. Contemporaneous with its filing of the demurrer, the Club also filed a motion to strike penalties Gutierrez sought pursuant to Labor Code section 558 from the cause of action for violation of the UCL.

The trial court overruled the Club's demurrer. Although it described the FAC as "bottom feeding," and having "the scooping effect of a swiner or drag net," the court found the allegations of that pleading minimally adequate, noting there would be "ample time later to determine whether there is a single class, several classes and whether this plaintiff can represent some or all of the classes ... [and that,] in this case, the statement that defendant has not provided its employeeswith proper rest periods states both the facts and the theory."

Second amended complaint

In February 2008, having received leave of court to do so, Gutierrez filed a second amended complaint (SAC) adding Salazar as a plaintiff, and adding an additional cause of action for failure to provide meal breaks and compensation in violation of section 226.7, and Order 10-2001, section 11.

The Club demurred. It argued plaintiffs had failed to satisfy the requirements of Code of Civil Procedure section 382, and had not stated facts sufficient to state a cause of action. The Club argued that the allegations purportedly identifying the putative class as " 'all current and former non-exempt employees' " were insufficient to provide reasonable notice of (1) an ascertainable class, (2) how the alleged violations occurred as to each of them, and (3) how the named plaintiffs were " 'similarly situated' " to the purported class members and could adequately represent them. The Club also argued the fifth cause of action for violation of the UCL was redundant of the allegations of the third cause of action for violation of PAGA.

The trial court sustained the demurrer with leave to amend. It found the SAC was: "so general that it fails to provide any notice who is in the class, what they do, how they are related or even what plaintiff [sic] does. It is basically a wide net cast to grab and catch anyone who is still alive and kicking after ... [certain] related cases ... are due for final approval. What the [SAC] fails to do is notify this court and the defendant who is in the class. In short the [SAC] is long on allegations, but short on facts. [Citation.] As the [SAC] now reads, it could cover all of the plaintiffs in the related cases."

Third amended complaint

In mid-April 2008, appellants filed the operative third amended proposed class action complaint (TAC), alleging the same five causes of action as in the SAC. In contrast to past iterations of their complaint, the TAC contained allegations of fact regarding the "Casino department and its various sub departments" in which named plaintiffs Gutierrez (a bus boy and bartender), and Salazar (a cook), worked. The TAC listed the representative job positions of over 1,000 hourly employees Gutierrez and Salazar purported to represent "includ[ing] but not limited to, bus boys, floor persons, chip runners, card washers, card muckers, equipment specialists, porters, food and beverage workers, food service, cooks, cooks helpers, kitchen staff, bartenders, cocktail servers, transportation workers, security officers, administrative staff, service staff, housekeepers, engineers, receiving, PBX, purchasing, surveillance, Information Technology ('I.T.') for a period of time within the four (4) years preceding the filing of this action." Plaintiffs also alleged that they—and similarly situated class members of current and former employees who had worked in the Club's casino department since October 2002—were subjected to the Club's uniform practice or policy of failing to provide rest and meal breaks and full wages, in violation of the Labor Code and Order 10-2001. They also alleged violations of the PAGA and UCL.

The Club filed another demurrer. It reiterated its earlier arguments that the TAC failed to state facts sufficient to state a cause of action, in that its allegations purportedly identifying the putative class failed to provide reasonable notice of an ascertainable class or why such class was covered by this action. The Club also argued the TAC contained insufficient factualallegations to provide reasonable notice to show that Gutierrez and Salazar were " 'similarly situated' " to and could adequately represent the putative class members. Further, the Club argued that the first and second causes of action for failure to provide meal and rest periods failed, because the TAC failed to allege "in what manner the Casino failed to provide rest breaks or how the Casino impeded, discouraged or dissuaded employees from taking rest periods" or "any facts stating how the Casino prevented them from taking their meal and rest breaks."

The trial court sustained the demurrer to the class action allegations of the TAC without leave to amend. The court found that notwithstanding four attempts to do so, Gutierrez and Salazar failed to: "allege facts sufficient to show the existence of a class. What they have done is to cast a wide net to cover anyone who is or was an employee and who is not part of management. What they have failed to do is to notify the court who is in the class, what they do, how they are related and why plaintiffs are the proper persons to represent this all-inclusive class. ( See e.g., Kennedy v. Baxter Healthcare Corp. (1996) 43 Cal.App.4th 799, 50 Cal.Rptr.2d 736 [ ( Kennedy ) ].)"

The court dismissed the action as to all putative class members, as to the class representatives and all class-wide allegations. It permitted the action to proceed as to the two named plaintiffs in their individual capacities. This appeal followed.

DISCUSSION³

1. Standard of review

A demurrer to class allegations may be sustained without leave to amend only if it is clear " 'there is no reasonable possibility that the plaintiffs could establish a community of interest among the potential class members and that individual issues predominate over common questions of law and fact.' " ( Blakemore v. Superior Court (2005) 129 Cal.App.4th 36, 53, 27 Cal.Rptr.3d 877.) If there is a reasonable possibility the plaintiffs can plead a prima facie community of interest among class members, " ' "the preferred course is to defer decision on the propriety of the class action until an evidentiary hearing has been held on the...