ZATOR v. SPRINT/UNITED Mgmt. Co.
| Decision Date | 29 March 2011 |
| Docket Number | CASE NO. 09cv0935-LAB (MDD) |
| Court | U.S. District Court — Southern District of California |
| Parties | ROBERT ZATOR, individually, and on behalf of all others similarly situated, and as an aggrieved employee pursuant to the Private Attorneys General Act (PAGA), Plaintiffs, v. SPRINT/UNITED MANAGEMENT COMPANY, a Kansas corporation, and DOES 1 to 10, inclusive, Defendants. |
ORDER DISMISSING CLAIMS; AND ORDER OF REMAND
Docket number 34.
Zator brought this action as an aggrieved employee under California's Private Attorneys General Act (PAGA). Sprint removed this action from the Superior Court of California for the County of San Diego on the basis of diversity jurisdiction, then moved to dismiss for lack of standing. Specifically, Sprint argues that because Zator has received everything due him, his claims must be dismissed, and he cannot represent the interests of other aggrieved employees in a PAGA action. Sprint also raises a statute of limitations defense. The Court set a briefing schedule for the motion to dismiss, but also ordered the parties to file supplemental briefing on the issue of whether, if the Court found Zator lacked standing, this action should be remanded rather than dismissed.
Because standing is jurisdictional, the Court is obligated to make this determination before allowing the case to continue. Plains Commerce Bank v. Long Family Land & Cattle Co., 128 S.Ct. 2709, 2716-17 (2008) (). Under 28 U.S.C. § 1447(c), "[i]f at any time before final judgment it appears that the district court lacks subject matter jurisdiction, the case shall be remanded."
On a motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(1), the applicable standard turns on the nature of the jurisdictional challenge. Doe v. Schachter, 804 F. Supp. 53, 56-57 (N.D. Cal. 1992). A court deciding a motion to dismiss for lack of subject matter jurisdiction, therefore, must distinguish between a facial attack, under which the nonmoving party is entitled to the same protections it would receive in defending against a motion to dismiss for failure to state a claim, and a factual attack, under which the court considers matters outside the pleadings to resolve disputed jurisdictional facts. Id. at 57 (citing Osborn v. United States, 918 F.2d 724, 728-730 (8th Cir. 1990)).
Defendants have identified this as a "speaking motion," challenging the veracity of the jurisdictional facts underlying the complaint. When adjudicating this type of motion,
the trial court may proceed as it never could under Rule 12(b)(6). . . . No presumptive truthfulness attaches to plaintiff's allegations, and the existence of disputed material facts will not preclude the trial court from evaluating for itself the merits of jurisdictional claims. Moreover, the plaintiff will have the burden of proof that jurisdiction does in fact exist.
Schachter, 804 F. Supp. at 57 (quoting Thornhill Pub. v. General Tel. & Elec. Corp., 594 F.2d 730, 733 (9th Cir. 1979)). At the same time, when — as here — a jurisdictional motion also goes to the merits, the Court employs the standard applicable for a summary judgment motion. Trentacosta v. Frontier Pac. Aircraft Indus., 813 F.2d 1553, 1558 (9th Cir. 1987); Sun Microsystems, Inc. v. Hynix Semiconductor, Inc., 608 F. Supp. 2d 1166, 1184 (citing Thornhill, 594 at 733).
The summary judgment standard requires the moving party to establish there are no material facts in dispute and judgment as a matter of law is appropriate. See Roberts v. Corrothers, 812 F.2d 1173, 1177 (9th Cir. 1987) (citations omitted). The moving party is not required to negate or disprove matters on which the non-moving party will have the burden of proof at trial. Celotex v. Catrett, 477 U.S. 317, 322 (1986). The moving party can meet its initial burden by "'showing'—that is, pointing out to the district court—that there is an absence of evidence to support the nonmoving party's case." Id. at 325.
Here, Zator must demonstrate by a preponderance of the evidence that he has standing to pursue an action. See Brewer v. Lewis, 989 F.2d 1021, 1031 (9th Cir. 1993) () Accordingly, Zator must "go beyond the pleading and . . . designate 'specific facts showing a genuine issue for trial.'" Id. at 324 (quoting Fed. R. Civ. P. 56(e)). Inadmissible evidence, such as incompetent or speculative testimony, will not suffice to meet this burden. In re Oracle Corp. Securities Litigation, 627 F.3d 376, 385 (9th Cir. 2010).
To avoid dismissal of his claims, Zator must provide significant, probative evidence, Sanchez v. Vild, 891 F.2d 240, 242 (9th Cir. 1989), and may not rest on conclusory allegations or mere assertions. Taylor v. List, 880 F.2d 1040, 1045 (9th Cir. 1989); Leer v. Murphy, 844 F.2d 628, 631 (9th Cir. 1988).
Zator worked as a retail sales associate in Sprint's stores from July, 2006 to October, 2008. He claims Sprint failed to pay him overtime in violation of Cal. Labor Code §§ 510 and 1198; that Sprint untimely paid him upon termination in violation of Cal. Labor Code §§ 201 and 202; and that Sprint untimely paid him during his employment in violation of Cal. Labor Code § 204. His three causes of action all hinge on his allegations that he received commissions, incentives, and awards during employment for which Sprint failed to credit him, for the purpose of calculating his overtime pay rate. If he was properly paid commissions, and if no incentives or other awards were improperly excluded from his compensation, his claims fail under all three theories.
The complaint's prayer for relief seeks civil penalties and attorney's fees under California Labor Code § 2699(f) and (g) for these violations, plus "such other and further relief as the Court may deem equitable and appropriate." It seeks PAGA statutory penalties on behalf of Zator and other aggrieved employees, but does not seek payment of any other money that might be owed to Zator. (See also Complaint, ¶¶ 41, 46, and 52 ().)
Defendants point out that Zator is bringing claims only under PAGA, and that because claims for PAGA penalties are subject to a one-year limitations period, Zator can only claim penalties for the period after March 25, 2008, one year before he filed his complaint. See Harris v. Vector Marketing Corp., 2010 WL 56179 at *3 (N.D.Cal., Jan. 5, 2010) ().
Zator acknowledges this argument but simply rejects the cited authority, supplying none of his own. (Opp'n, 9:3-6.) With no further explanation, Zator argues "Defendant's cited authority does not support the proposition that Plaintiff needed to have suffered a violation within that period." (Id.) This bare assertion does not suffice as an argument, and is contrary to both cited precedent and other authority the Court has found. See, e.g., Jayme v. Checksmart Financial, LLC, 2010 WL 290033, slip op. at *2 (E.D.Cal., July 22, 2010) ( that because the defendant had not provided evidence that employees quit or were discharged within PAGA's one-year limitations period, the defendant could not include PAGA civil penalties in calculating the total amount in controversy). Zator does, however, argue that he can show Defendant committed one violation within the statutory period, namely, its failure to include the value of a Hawaii trip as compensation.
Zator alleges he earned many "incentive awards" and the value of them wasn't properly reflected on his pay statements or used in calculating his overtime. He says he won a trip, store credit cards, merchandise, and dinners with higher-level managers (Opp'n, 2:13-14) and that these should have been included as "wages" for purposes of calculating his regular rate of pay, which is used in calculating overtime pay. (Id., 8:10-10:4.) The Court will first address the smaller items, i.e., merchandise, store cards, and dinners.
Under § 200(a), "wages" includes any payment in exchange for labor performed, regardless of how it is calculated. But not everything an employee receives necessarily meets the statutory definition of wages; it must be in some sense compensation for the employee's labor or performance, see Woods v. Fox Broadcasting Sub., Inc., 129 Cal. App. 4th 344, 357 (Cal. App. 2 Dist., 2005) (), or something his labor or performance entitles him to. Dept' of Indus. Relations v. UI Video Stores, Inc., 55 Cal. App. 4th 1084, 1091 (Cal. App. 1 Dist. 1997). California looks to the Fair Labor Standards Act to determine what is excludable from compensation and what constitutes the regular rate of pay for overtime purposes. See Adoma v. University of Phoenix, 2011 WL 892634, slip op. at *4 (E.D.Cal., March 11, 2011) (citing Huntington Mem. Hosp. v. Superior Court, 131 Cal. App. 4th 893, 902-03 (Cal. App. 2 Dist. 2005)). Zator agrees this is the correct approach. (Opp'n, 7:17-8:9.) This is illustrated by Wang v. Chinese Daily News, Inc., 435 F. Supp. 2d 1042, 1057 (C.D.Cal., 2006), where the court looked to 29 C.F.R. § 778.217(d) to determine whether lunches provided to employees should have been included in employees' regular rate of pay. The court also considered other relevant provisions of federal law, noting that value of lunches was included in taxable income on employees' paychecks and income tax withheld accordingly. Id.
The evidence primarily consists of deposition testimony by both Zator and his former manager, Ryan Cooper. But no evidence has been proffered that Zator was entitled to these...
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