In re Wal-Mart Stores, Inc. Wage and Hour Lit.

• Decision Date: 29 May 2007
• Docket Number: No. C 06-2069 SBA,,Docket No. 72.,C 06-2069 SBA,
• Citation: 505 F.Supp.2d 609
• Parties: In re WAL-MART STORES, INC. WAGE AND HOUR LITIGATION. This Document Relates To: Case No. C 06-02069 SBA (Smith) and C 06-05411 SBA (Ballard).
• Court: U.S. District Court — Northern District of California

505 F.Supp.2d 609

In re WAL-MART STORES, INC. WAGE AND HOUR LITIGATION This Document Relates To: Case No. C 06-02069 SBA (Smith) and C 06-05411 SBA (Ballard).

No. C 06-2069 SBA,

Docket No. 72.

United States District Court, N.D. California.

May 29, 2007.

COPYRIGHT MATERIAL OMITTED

Bonnie Rae Mac Farlane, Attorney at Law, Sacramento, CA, Louis Michael Marlin, Marlin & Saltzman, Irvine, CA, A.E. Bud Bailey, J. Dana Pinney, Bailey Pinney

PC, Vancouver, WA, for Barry Smith, Michael Wiggins.

Jessica Perry, Lynne C. Hermle, Amira Biko Day, Michael A. Aparicio, Orrick, Herrington & Sutcliffe LLP, Menlo Park, CA, Rudy A. Englund, Lane Powell PC, Seattle, WA, for Wal-Mart Stores, Inc.

ORDER

SAUNDRA BROWN ARMSTRONG, District Judge.

This matter comes before the Court on defendant Wal-Mart, Inc.'s Motion to Dismiss plaintiffs' third, fifth and sixth claims for relief, and all class allegations, and Wal-Mart's Motion to Strike all class allegations, plaintiffs' claim for punitive damages, and in whole or in part, paragraphs 1, 3, 7, 20, 23, 27, 33, 37(5), 47, 59-69, 78, 86 and 95, and paragraphs 2 and 7 of the Prayer for Relief [Docket No. 72]. Having read and considered the arguments presented by the parties in the papers submitted to the Court, the Court finds this matter appropriate for resolution without a hearing.

The Court hereby DENIES the Motion to Dismiss with respect to the Third Cause of Action for overtime, the Sixth Cause of Action for unfair business practices insofar as it is based on violations of Labor Code § 227.3, and the class allegations. The Motion to Dismiss is GRANTED WITHOUT LEAVE TO AMEND with respect to the Fifth Cause of Action for conversion and the Sixth Cause of Action for unfair business practices insofar as it is based on violations of sections of the Labor Code other than § 227.3. Wal-Mart's Motion to Strike is GRANTED WITH LEAVE TO AMEND with respect to plaintiffs' claim for punitive damages and DENIED in all other respects.

BACKGROUND

This is a consolidated action against defendant, Wal-Mart Stores, Inc., brought in two separate actions. The Smith and Wiggins action (C 06-2069 SBA) was commenced in this District on March 20, 2006 with the filing of the original Complaint. Plaintiffs Ballard and Lyons commenced an action in the Los Angeles County Superior Court on May 17, 2006. That action was subsequently removed, and the Central District transferred the matter to this District (C 06-05411 JSW).

The Ballard and Lyons action was reassigned to this Court as being related to the Smith and Wiggins case. See Docket No. 57. On January 9, 2007, the Court ordered that the two cases be consolidated for all purposes and that a single "Consolidated Class Action Complaint" be filed, pursuant to Stipulation. See Docket No. 67. By stipulation approved by the Court, plaintiffs were granted leave to file the First Amended Consolidated Complaint ("FACC"). See Docket No. 78. The FACC was filed on March 27, 2007. See Docket No. 79.

Plaintiffs assert six claims for relief against Wal-Mart, alleging that Wal-Mart has "administered and employed a corporate policy, practice and/or custom" of engaging in the following:

(1) violations of California Labor Code sections 201-203 by late payment of wages at termination, FACC ¶¶ 42-50;

(2) violations of California Labor Code section 227.3 by nonpayment of accrued vacation at termination, id. ¶¶ 51-58;

(3) violations of California Labor Code sections 500, 510 and 1194 for failure to pay overtime to non-exempt employees, id. ¶¶ 59-69;

(4) violations of California Labor Code section 226 by failure to accurately record and report wages, id. ¶¶ 70-75;

(5) unfair business practices under California Business and Professions Code sections 17200 et seq., based on the same alleged violations set out in the first through fourth and the sixth claims for relief, id. ¶¶ 76-82; and

(6) conversion of wages. Id. ¶¶ 83-95.

Plaintiffs purport to bring their claims on behalf of a class composed of all former employees of Wal-Mart who fit within one of four subclasses. FACC ¶ 32. The four subclasses are defined as follows:

(1) The "Terminated Sub-Class" is defined as terminated employees who "did not receive all of the wages due them at the time of termination, and/or did not receive their final wages in a timely manner as mandated by California law."

(2) The "Vacation Sub-Class" seeks to include all employees who "have not received full and complete compensation for all vested `vacation pay' as the same is defined under California law and IWC regulations, including, but not limited to, vacation pay, personal time, holiday pay, etc."

(3) The "Compensation Sub-Class" includes employees who are "properly classified hourly-pay employees of Defendant ... who have not received all compensation due them for hours worked, including overtime Worked."

(4) The "Itemized Statement Sub-Class" purports to include employees "who have not received an accurate and complete itemization of wages earned, rates of pay, etc." Id.

Plaintiffs allege that "[a]ll of the named Plaintiffs herein are members of each sub-class. Id. ¶ 33. Each named plaintiff is a former employee of Wal-Mart who worked for Wal-Mart between September 2003 and March 2006. See id. ¶¶ 26, 28-30. Plaintiff Smith was a salaried manager, and the other three named plaintiffs were hourly employees. Id. Further, each of the named plaintiffs allegedly was not paid accrued vacation pay, personal time pay and/or holiday pay, and allegedly was given a final wage statement that was incorrect. Id. ¶¶ 27-30. Nothing further is alleged with respect to Plaintiffs Smith, Ballard and Lyons. Id. ¶¶ 26-30. With respect to plaintiff Wiggins, plaintiffs allege that "Wal-Mart would `shave off time from [Wiggins'] time cards whereby Mr. Wiggins was not paid for all of the hours he worked." Id. ¶ 27. Plaintiffs further allege, that "when Mr. Wiggins worked a graveyard shift, Wal-Mart would count the hours worked before midnight as working one day, and all the hours worked after midnight as hours worked on another day, thereby denying Mr. Wiggins overtime pay." Id.

LEGAL STANDARD

I. Motion to Dismiss

Under Federal Rule of Civil Procedure 12(b)(6), a motion to dismiss should be granted if the plaintiff is unable to delineate "enough facts to state a claim to relief that is plausible on its face." Bell Atlantic Corp. v. Twombly, ___ U.S. ___, 127 S.Ct. 1955, 167 L.Ed.2d 929 (abrogating Conley v. Gibson, 355 U.S. 41, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957)). For purposes of such a motion, the complaint is construed in a light most favorable to the plaintiff and all properly pleaded factual allegations are taken as true. Jenkins v. McKeithen, 395 U.S. 411, 421, 89 S.Ct. 1843, 23 L.Ed.2d 404 (1969); Everest & Jennings, Inc. v. American Motorists Ins. Co., 23 F.3d 226, 228 (9th Cir.1994). All reasonable inferences are to be drawn in favor of the plaintiff. Jacobson v. Hughes Aircraft, 105 F.3d 1288, 1296 (9th Cir.1997).

The court does not accept as true unreasonable inferences or conclusory legal allegations cast in the form of factual allegations. Western Mining Council v. Watt, 643 F.2d 618, 624 (9th Cir.1981); see Miranda v. Clark County, Nev., 279 F.3d 1102, 1106 (9th Cir.2002) ("[C]onclusory allegations of law and unwarranted inferences will not defeat a motion to dismiss for failure to state a claim."); Sprewell v. Golden State Warriors, 266 F.3d 979, 987 ("Nor is the court required to accept as true allegations that are merely conclusory, unwarranted deductions of fact, or unreasonable inferences."), as amended by, 275 F.3d 1187 (9th Cir.2001).

II. Motion to Strike

Federal Rule of Civil Procedure 12(f) provides that a court "may order stricken from any pleading ... any redundant, immaterial, impertinent or scandalous matter." Fed.R.Civ.P. 12(f). "`Immaterial' matter is that which has no essential or important relationship to the claim for relief or the defenses being pleaded." Fantasy, Inc. v. Fogerty, 984 F.2d 1524, 1527 (9th Cir.1993) (citing 5C Charles A. Wright & Arthur R. Miller, Federal Practice and Procedure § 1382, at 706-07 (1990)), rev'd on other grounds, 510 U.S. 517, 114 S.Ct. 1023, 127 L.Ed.2d 455 (1994). "`Impertinent' matter consists of statements that do not pertain, and are not necessary, to the issues in question." Id.

Rule 12(f) Motions to strike are generally regarded with disfavor "because of the limited importance of pleading in federal practice, and because they are often used as a delay tactic. See California Dept. of Toxic Substances Control v. Alco Pacific, Inc., 217 F.Supp.2d 1028, 1033 (C.D.Cal.2002). Motions to strike are "generally not granted unless it is clear that the matter sought to be stricken could have no possible bearing on the subject matter of the litigation." Rosales v. Citibank, Federal Say. Bank, 133 F.Supp.2d 1177, 1180 (N.D.Cal.2001). Any doubt concerning the import of the allegations to be stricken weighs in, favor of denying the motion to strike. See In re 2The-Mart.com, Inc. Sec. Litig., 114 F.Supp.2d 955, 965 (C.D.Cal.2000).

ANALYSIS

I. Motion to Dismiss

A. The Class Allegations

Wal-Mart argues that plaintiffs' class allegations should be either dismissed or stricken because the series of subclasses that plaintiffs delineate in the FACC are defined by the merits of their legal claims, and such merits-based class definitions impermissibly force the Court to engage in a fact-intensive inquiry in order to determine the scope of each putative subclass. Plaintiffs counter that the members of each class can be determined by "merely reviewing objective criteria," namely Wal-Mart's employment records. Opp at 9:4-7. However, plaintiffs do not explain how the review of such records will determine the members of the subclasses. Moreover, plaintiffs, perhaps indirectly conceding that the class definitions are potentially inappropriate, state that "[d]epending on the Court's desire," "a...