Shaw v. Kaiser Found. Plan

Decision Date24 February 2022
Docket NumberEDCV 21-1923 JGB (KKx)
PartiesChasmine Shaw v. Kaiser Health Foundation Plan
CourtU.S. District Court — Central District of California

MAYNOR GALVEZ

CIVIL MINUTES-GENERAL

PRESENT: THE HONORABLE JESUS G. BERNAL, UNITED STATES DISTRICT JUDGE

Proceedings Order (1) GRANTING Plaintiff's Motion for Remand (Dkt No. 11); and (2) VACATING the February 28, 2022 Hearing (IN CHAMBERS)

Before the Court is Motion for Remand filed by Plaintiff Chasmine Shaw (Plaintiff or “Ms. Shaw”). (“Motion, ” Dkt. No. 11.) The Court finds the Motion appropriate for resolution without a hearing. See Fed.R.Civ.P. 78; L.R. 7-15. After considering the papers filed in support of and in opposition to the Motion, the Court GRANTS the Motion and VACATES the February 28, 2022 hearing.

I. BACKGROUND

On May 12, 2021, Ms. Shaw filed a class action complaint in the Superior Court of the State of California for the County of Riverside against Defendant Kaiser Foundation Health Plan (Defendant or “Kaiser”). (Dkt. No. 1-1, ¶ 2.) She did not serve the first complaint on Kaiser. (Id.) On August 8, 2021, Ms. Shaw filed an amended complaint. (“FAC, ” Dkt. 1-1, Ex. 1.) The FAC alleges ten causes of action: (1) failure to pay overtime in violation of Cal. Labor Code §§ 510, 1194, and 1198; (2) failure to pay wages for all hours worked in violation of Cal. Labor Code §§ 1194, 1197, 1197.1, and 558; (3) failure to provide meal periods or proper premiums in violation of Cal. Labor Code §§ 226.7 and 512; (4) failure to provide rest periods in violation of Cal. Labor Code §§ 226.7 and 512; (5) failure to provide accurate itemized wage statements; (6) failure to pay wages due; (7) failure to reimburse business expenses; (8) failure to pay wages upon termination of employment; (9) unlawful competition and unlawful business practices under California's Unfair Competition Law Bus. & Prof. Code § 17200 et seq.; and (10) violation of Private Attorneys General Act (“PAGA”). (FAC.) On October 12, 2021, Ms. Shaw served the FAC on Kaiser. (“Removal, ” Dkt. No. 1.)

On November 11, 2021, Kaiser removed the action to federal court alleging federal question jurisdiction pursuant to 28 U.S.C. § 1331 and § 301 of the Labor Management Relations Act (LMRA). (Removal.) Ms. Shaw moved to remand on December 13, 2021. (“Motion, ” Dkt. No. 11.) Kaiser opposed on January 10, 2022. (“Opp., ” Dkt. No. 14.) Ms. Shaw replied on January 18, 2022. (“Reply, ” Dkt. No. 22.)

Kaiser moved to strike the class allegations and/or dismiss the complaint on December 17, 2021.[1] (Dkt. No. 12.) Ms. Shaw opposed on January 10, 2022. (Dkt. No. 15.) Kaiser replied on January 14, 2022. (Dkt. No. 18.)2

II. LEGAL STANDARD

Unless otherwise expressly provided by Congress, “any civil action brought in a State court of which the district courts of the United States have original jurisdiction, may be removed by the defendant…to the district court[.] 28 U.S.C. § 1441(a). “The right of removal is entirely a creature of statute and a suit commenced in a state court must remain there until cause is shown for its transfer under some act of Congress.” Syngenta Crop Protection, Inc. v. Henson, 537 U.S. 28, 32 (2002) (quotations omitted). Where Congress acted to create a right of removal, those statutes, unless otherwise stated, are strictly construed against removal jurisdiction. See id. “The strong presumption against removal jurisdiction means that the defendant always has the burden of establishing that removal is proper.” Gaus v. Miles, Inc., 980 F.2d 564, 566 (9th Cir. 1992) (quotations omitted); Abrego Abreao v. The Dow Chem. Co., 443 F.3d 676, 684 (9th Cir. 2006) (per curiam) (noting the “longstanding, near-canonical rule that the burden on removal rests with the removing defendant). Moreover, if there is any doubt regarding the existence of subject matter jurisdiction, the court must resolve those doubts in favor of remand to state court. See Gaus, 980 F.2d at 566 (“Federal jurisdiction must be rejected if there is any doubt as to the right of removal in the first instance”).

III. DISCUSSION

Kaiser asserts that this Court has jurisdiction over the action because Ms. Shaw's union has a Collective Bargaining Agreement (“CBA”) with Kaiser. (Removal). Kaiser argues that as a result of the CBA, Ms. Shaw's overtime claim is preempted by the LMRA.

Section 301 of the LMRA vests federal courts with jurisdiction to hear actions “for violation of contracts between an employer and a labor organization representing employees in an industry affecting commerce…without respect to the amount in controversy or without regard to the citizenship of parties.” 29 U.S.C. § 185(a). The Supreme Court held that [section] 301 cannot be read broadly to preempt nonnegotiable rights conferred on individual employees as a matter of state law[.] Livadas v. Bradshaw, 512 U.S. 107, 123 (1994). Expansion of section 301 preemption beyond its defined role “would be inconsistent with congressional intent[.] Allis-Chalmers Corp. v. Lueck, 471 U.S. 202, 212 (1985). For this reason, [s]etting minimum wages, regulating work hours and pay periods, requiring paid and unpaid leave, protecting worker safety, prohibiting discrimination in employment, and establishing other worker rights remains well within the traditional power of the states, and will naturally result in labor standards that affect workers differently from one jurisdiction to the next, even when those workers fall under a single labor agreement.” Alaska Airlines Inc. v. Schurke, 898 F.3d 904, 919-920 (9th Cir. 2018) (en banc); see Kobold v. Good Samaritan Regional Medical Center, 832 F.3d 1024, 1032 (9th Cir. 2016) (“Critically, not every dispute concerning employment, or tangentially involving a provision of a collective-bargaining agreement, is preempted by [section] 301.”) (internal quotations omitted).

In the Ninth Circuit, courts engage in a two-step inquiry to analyze preemption of state law claims. Kobold, 832 F.3d at 1032. “First, a court must determine whether the asserted cause of action involves a right conferred upon an employee by virtue of state law, not by a CBA. If the right exists solely as a result of the CBA, then the claim is preempted, and [the] analysis ends there.” Id. at 1032 (quotations omitted).

“By contract, claims are not simply CBA disputes by another name, and so are not preempted under the first step, if they just refer to a CBA-defined right, rely in part on a CBA's terms of employment, run parallel to a CBA violation, or invite use of the CBA as a defense[.] Alaska Airlines, 898 F.3d at 921 (citations omitted).

If the right underlying the claim exists independently of the CBA, the court proceeds to the second step of the analysis. Dent v. Nat'l Football League, 902 F.3d 1109, 1116 (9th Cir. 2018). At this stage, the court must “decide whether the claim can be resolved by looking to versus interpreting the CBA.” Burnside, 491 F.3d at 1060 (internal quotation marks omitted). When a state law claim can be resolved without interpreting the CBA itself, there is no section 301 preemption. Lingle v. Norge Div. of Magic Chef, Inc., 486 U.S. 399, 409-10.

On the other hand, if a state law claim is “substantially dependent” on an interpretation of the CBA, section 301 preemption applies. Caterpillar, 482 U.S. at 394. Interpretation in this context is “defined narrowly-it [requires] something more than [to] ‘consider,' ‘refer to,' or ‘apply.' McCray v. Marriott Hotel Servs., 902 F.3d 1005, 1011 (9th Cir. 2018). Section 301 preemption is not triggered when there is no “active dispute over the meaning of contract terms.” Dent, 902 F.3d at 1116; see Livadas v. Bradshaw, 512 U.S. 107, 124 (1994). The consultation of the CBA for a “purely factual inquiry” or to “calculate damages or ascertain that an issue is not addressed by the CBA” does not satisfy the interpretation requirement for preemption purposes. Dent, 902 F.3d at 1117; see Lingle, 486 U.S. at 412 n.12 (no preemption where “a collective-bargaining agreement may…contain information…that might be helpful in determining the damages to which a worker prevailing in a state-law suit is entitled.”).

A. Overtime Claim
1. Burnside Step One

Kaiser contends that Ms. Shaw's overtime claim is preempted “under both prongs of the Burnside test in that it (1) is based upon the governing CBA, and (2) requires interpretation of the CBA.” (Removal ¶ 9.) Kaiser argues that because the CBA meets the threshold requirements of California Labor Code section 514, Ms. Shaw's overtime claim arises solely out of the CBA and is therefore preempted under the first step of the LMRA preemption analysis. The Court is unconvinced.

Kaiser primarily relies on Curtis v. Irwin Indus., Inc., 913 F.3d 1146 (9th Cir. 2019) to support its argument. In Curtis, a plaintiff brought overtime claims under section 510. Id. at 1153. The Ninth Circuit concluded that California “deemed it appropriate to allow unionized employees to contract around section 510(a)'s requirements by bargain[ing] over not only the rate of overtime pay, but also when overtime pay will begin.” Id. at 1153 (internal quotations omitted) (emphasis in original). [W]hen such a bargain has been struck, courts look to the CBA to determine the definition of overtime.” Id. at 1155. Thus, “if [the plaintiff's] CBAs in this case meet the requirements of section 514, [the plaintiff's] right to overtime ‘exist solely as a result of the CBA,' and there is preempted under [section] 301.” Id. at 1154. Since the Ninth Circuit determined the CBA in Curtis satisfied section 514's requirements, the LMRA preempted the claim. Id. at 1155.

The first question is whether Ms. Shaw's CBA complies with section 514. If it does, her right to overtime “exists solely as a result of...

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