Whiteside v. SPSG Partners, LLC

Decision Date16 March 2022
Docket Number2:20-cv-01643-TLN-DMC
CourtU.S. District Court — Eastern District of California
PartiesSTEPHON WHITESIDE, Plaintiff, v. SPSG PARTNERS, LLC, et al., Defendants.
ORDER

Troy L. Nunley, United States District Judge

This matter is before the Court on Plaintiff Stephon Whiteside's (Plaintiff) Motion to Remand and Request for Attorney's Fees and Costs. (ECF No. 5.) Defendants SPSG Partners, LLC (SPSG), Sukut Construction, Inc., Sukut Construction, LLC, Goodfellow Bros California, LLC, and Pacific States Environmental Contractors, Inc. (collectively, Defendants) filed an opposition. (ECF No. 9.) Plaintiff filed a reply. (ECF No. 10.) For the reasons set forth below Plaintiff's motion is GRANTED.

I. Factual and Procedural Background

This action arises out of Defendants' alleged wage and hour violations. (See ECF No. 1-1 at 367-75.) From April 2019 to July 2019, Plaintiff worked as a laborer for Defendants, who performed clean-up work in and around the town of Paradise, California, stemming from the Camp Fire in 2018. (Id. at 371-72.) Plaintiff alleges he typically worked more than 8 hours per day and 40 hours per week. (Id. at 372.) Plaintiff further alleges: (1) Defendants failed to pay Plaintiff and other Aggrieved Employees for all hours worked (e.g., Plaintiff was not paid for two days of mandatory orientation and Defendants had no policy, devices, or locks for accurately recording hours); (2) Defendants instituted a policy that paid per shift rather than per hour (and Defendants rounded any work time to the nearest half an hour, which negatively impacted Plaintiff and other Aggrieved Employees); (3) Plaintiff was required to work through meal breaks; (4) Defendants failed to provide rest breaks of at least ten minutes; (5) Defendants did not have a policy to reimburse Plaintiff and other Aggrieved Employees for using their personal phones for work purposes; (6) Defendants failed to provide all final wages owed to Plaintiff and other Aggrieved Employees within 24 hours of their termination or 72 hours of their resignation; and (7) Defendants failed to provide Plaintiff and other Aggrieved Employees with accurate wage statements. (Id. at 372-73.)

Plaintiff filed suit against Defendants in Butte County Superior Court on January 13, 2020 (id. at 4-25), and filed the operative First Amended Complaint (“FAC”) on July 29, 2020 (id. at 367-75). The FAC asserts one claim for a violation of the Private Attorneys General Act (“PAGA”), which alleges that Defendants have violated numerous provisions of the California Labor Code and Industrial Welfare Commission (“IWC”) Wage Orders and seeks civil penalties from Defendants pursuant to Labor Code §§ 2699(a) and 2699.3. (Id. at 373-74.) Defendants filed a Notice of Removal on August 14, 2020, removing the action to this Court based on federal question jurisdiction - specifically, preemption under § 301 of the Labor Management Relations Act (§ 301 or LMRA). (See ECF No. 1.) Plaintiff filed the instant motion to remand on September 11, 2020. (ECF No. 5.)

II. Standard of Law

28 U.S.C. § 1441 permits the removal to federal court of any civil action over which “the district courts of the United States have original jurisdiction.” 28 U.S.C. § 1441(a). “Removal is proper only if the court could have exercised jurisdiction over the action had it originally been filed in federal court.” Caterpillar Inc. v. Williams, 482 U.S. 386, 392 (1987).

Courts “strictly construe the removal statute against removal jurisdiction, ” and “the defendant always has the burden of establishing that removal is proper.” Gaus v. Miles, Inc., 980 F.2d 564, 566 (9th Cir. 1992) (per curiam). Furthermore, [i]f the district court at any time determines that it lacks subject matter jurisdiction over the removed action, it must remedy the improvident grant of removal by remanding the action to state court.” California ex rel. Lockyer v. Dynegy, Inc., 375 F.3d 831, 838, as amended, 387 F.3d 966 (9th Cir. 2004), cert. denied, 544 U.S. 974 (2005).

The “presence or absence of federal question jurisdiction is governed by the ‘well-pleaded complaint rule,' which provides that federal jurisdiction exists only when a federal question is presented on the face of the plaintiff's properly pleaded complaint.” Caterpillar Inc., 482 U.S. at 386. Removal cannot be based on a defense, counterclaim, cross-claim, or third party claim raising a federal question, whether filed in state court or federal court. See Vaden v. Discover Bank, 556 U.S. 49 (2009); Hunter v. Philip Morris USA, 582 F.3d 1039, 1042-43 (9th Cir. 2009).

A corollary to the “well-pleaded complaint rule” is the “complete preemption” doctrine. Metropolitan Life Ins. Co. v. Taylor, 481 U.S. 58, 63-64 (1987). Under this doctrine, the preemptive force of a federal statute may be strong enough to convert state law claims into federal claims. Id. Complete preemption recognizes the importance of creating a single body of federal law for areas that would likely “be affected by separate systems of substantive law.” See Teamsters v. Lucas Flour Co., 369 U.S. 95, 104 (1962).

The Supreme Court has held that the complete preemption doctrine applies to § 301 of the LMRA. Id. If a claim derived from a collective bargaining agreement (“CBA”) is preempted, it is said to be one arising under “the laws of the United States” within the meaning of the removal statute and within the “original jurisdiction” of the district courts. Avco Corp. v. Aero Lodge No. 735, Intern. Ass'n of Machinists and Aerospace Workers, 390 U.S. 557, 560 (1968). State law does not provide for an independent source of private rights to enforce CBAs. Id. at 560-561.

The Supreme Court has insisted that § 301 does not preempt “every dispute concerning employment, or tangentially involving a provision of a [CBA].” Allis-Chalmers Corp. v. Lueck, 471 U.S. 202, 211 (1985). The Ninth Circuit has provided that a state law claim is not preempted “unless it necessarily requires the court to interpret an existing provision of a CBA.” Cramer v. Consol Freightways, 225 F.3d 683, 691 (9th Cir. 2001) (en banc) (as amended) (emphasis added). Merely [looking] to” the CBA does not mean that a state law claim will be defeated by § 301. Livadas v. Bradshaw, 512 U.S. 107, 124-125 (1994). The Ninth Circuit has also stated that “interpret” is defined narrowly, and “means something more than ‘consider,' ‘refer to,' or ‘apply.' Balcorta v. Twentieth Century-Fox Film Corp., 208 F.3d 1102, 1108 (9th Cir. 2000).

Federal law preempts state law claims based directly on rights created by CBAs and claims that are substantially dependent on analysis of the agreement. Lingle v. Norge Div. of Magic Chef, Inc., 486 U.S. 399, 405-406 (1988). To determine whether a claim meets the “substantially dependent” standard, courts will look at whether evaluation of the claim is “inextricably intertwined” with consideration of labor contract terms. See Allis-Chalmers Corp., 471 U.S. at 213. Courts will also look at whether the state law claim derives or is implied from the contract rights established under the CBA. Id. at 220.

III. Analysis

Plaintiff moves to remand, arguing that Defendants' Notice of Removal is (1) untimely under 28 U.S.C. §§ 1446(b)(1) and (b)(3); and (2) fails to meet its burden to establish the PAGA action is preempted under § 301 of the LRMA. (See ECF No. 5-1.) Because the Court finds that the PAGA action is not preempted and removal was improper, it declines to address whether removal was timely. The Court will first address the preemption argument and then address Plaintiff's request for attorney's fees and costs.

A. Whether Plaintiff's PAGA Claim is Preempted by the LMRA

Plaintiff argues his PAGA claim is not subject to the CBA nor has he conceded his PAGA claim is subject to the CBA and/or any grievance and arbitration provision contained therein, so as to implicate preemption issues under the LMRA. (ECF No. 5-1 at 17-18.) Plaintiff cites to Ross v. Stater Bros. Markets and states that it “followed the Caterpillar holding with respect to a state overtime claim under Labor Code [§] 510” and held that “it is ‘irrelevant' whether the CBA, pursuant to the [§] 510 exemption, would extinguish and supersede the [§] 510 overtime requirements.” (Id. at 18 (citing Ross v. Stater Bros. Markets, No. 5:19-CV-00755-SJO (KKx), 2019 WL 6332241, at *2-4 (C.D. Cal. Aug. 8, 2019); Caterpillar Inc., 482 U.S. at 390-91 n.12).) Plaintiff further argues his PAGA claim is not preempted by § 301 because no interpretation of the CBA is required to resolve the claim, as his claim is “based upon independent state law requiring employees to be paid for all hours worked, to be provided meal and rest breaks, to be issued proper reimbursement, to be issued accurate wage statements, and to be paid all wages upon termination.” (Id. at 19-20.) Plaintiff specifically notes the following: (1) the failure to pay minimum wages and derivative claims is based on a bare minimum labor standard under California law that cannot be abridged or waived in any way, including through a CBA, and any look to the CBA for applicable pay rates in computing penalties is insufficient to warrant preemption; (2) the CBA does not independently provide for meal and rest periods, unlike Labor Code § 512 and IWC Wage Order 16; and (3) the CBA is silent on failure to pay reimbursements and failure to pay wages earned and unpaid at time of discharge. (Id. at 22-24.)

In opposition, [1] Defendants maintain the FAC omits that Plaintiff was a member of the Laborers Union and employed by SPSG through a CBA and that resolution of Plaintiff's claims will require substantial interpretation of various provisions of the CBA. (ECF No. 9 at 17-18.) Defendants contend the cases upon which...

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