Case Number: BC601448 Hearing Date: June 16, 2016 Dept: 40

Defendant moves to strike the prayer Punitive Damages for insufficient facts and Injunctive Relief for lack of standing.

ANALYSIS

Motion to Strike Standard

The court may, upon a motion, or at any time in its discretion, and upon terms it deems proper, strike any irrelevant, false, or improper matter inserted in any pleading. CCP §436(a). The court may also strike all or any part of any pleading not drawn or filed in conformity with the laws of this state, a court rule, or an order of the court. CCP § 436(b). It may be an abuse of discretion to deny leave to amend after granting a motion to strike a complaint if the defect is curable. CLD Const., Inc. v. City of San Ramon (2004) 120 Cal.App.4th 1141, 1146-1147.

Punitive Damages Standard

To succeed on a motion to strike punitive damages allegations, it must be said as a matter of law that the alleged behavior was not so vile, base, or contemptible that it would not be looked down upon and despised by ordinary decent people. Angie M. v. Superior Court (1995) 37 Cal.App.4th 1217, 1228-1229. Civil Code section 3294 provides punitive damages are available in non-contract actions where defendant is guilty of malice, oppression, or fraud, defined as follows:

(c) As used in this section, the following definitions shall apply:

(1) “Malice” means conduct which is intended by the defendant to cause injury to the plaintiff or despicable conduct which is carried on by the defendant with a willful and conscious disregard of the rights or safety of others.

(2) “Oppression” means despicable conduct that subjects a person to cruel and unjust hardship in conscious disregard of that person’s rights.

(3) “Fraud” means an intentional misrepresentation, deceit, or concealment of a material fact known to the defendant with the intention on the part of the defendant of thereby depriving a person of property or legal rights or otherwise causing injury.

A demand for punitive damages for the commission of any tort requires more than the mere allegation of the “wrongfully and intentionally,” “oppression, fraud, and malice” sort of language found in Civil Code section 3294. Perkins v Superior Court (1981) 117 Cal.App.3d 1, 6-7. The allegations of fact must, in their totality, describe a state of mind and a motive that would sustain an award of punitive damages. Ibid. The mere allegation that an intentional tort is committed is insufficient to warrant an award of punitive damages. Grieves v. Superior Court (1984) 157 Cal.App.3d 159, 166. Not only must there be circumstances of oppression, fraud, or malice, but facts must be alleged in the pleading to support such a claim. Ibid.

Punitive Damages Analysis

Defendant argues the FAC pleads insufficient facts supporting the FEHA claims and that punitive damages are unavailable for wage and hour violations as a matter of law.

Here, plaintiff alleges that she was wrongfully terminated based on age and disability discrimination. To the extent defendant challenges the sufficiently of the allegations supporting these causes of action as a basis for arguing insufficient facts for punitive damages, the appropriate vehicle is a demurrer. Additionally, discrimination is inherently intentional. Accordingly, the factual issue of whether defendant intentionally deprived plaintiff of her right to be free from discrimination, wrongful termination, and related violations remains pending, and a finding in the affirmative would support a claim for punitive damages.

Concerning the prayer for punitive damages for the alleged Labor Code violations, defendant argues the “new right-exclusive remedy” doctrine applies, relying on Brewer v. Premier Golf Properties (2008) 168 Cal.App.4th 1243. “[T]hat doctrine provides that where a statute creates new rights and obligations not previously existing in the common law, the express statutory remedy is deemed to be the exclusive remedy available for statutory violations, unless it is inadequate. [Citations]. However, when the statute merely recognizes a cause of action (because the claim had a preexisting common law analogue), then all forms of relief granted to civil litigants generally, including appropriate punitive damages, are available unless a contrary legislative intent appears.” Id. at 1252 (emphasis in original) (reversing award of punitive damages).

Brewer reasoned “the Labor Code provisions governing meal and rest breaks, minimum wages, and accurate pay stubs constitute statutory obligations imposed only when the parties have entered into an employment contract and are obligations arising from the employment contract. The breach of an obligation arising out of an employment contract, even when the obligation is implied in law, permits contractual damages but does not support tort recoveries.” Id. at 1256 (emphasis in original).

Thus, Brewer has been recognized for the proposition that “[p]unitive damages are not recoverable when liability is premised solely on the employer’s violation of Labor Code statutes that regulate minimum wages, meal and rest breaks and pay stub reporting.” Weil & Brown, Employment Litigation (The Rutter Group, 2015) ¶ 11:1455.

In opposition, plaintiff relies on a non-binding federal district court case that should not be considered. As defendant argues in reply, the stare decisis policy precludes this Court from contravening the Court of Appeal’s ruling. See In re Estate of Duke (2015) 61 Cal.4th 871, 893.

Nonetheless, as mentioned above, Brewer carved out an exception where “the express statutory remedy … is inadequate.” Id. at 1252. To that end, Brewer found “[plaintiff] Brewer does not articulate any basis for concluding those penalties are so inadequate that other remedies should be permitted.” Id. at 1253.

Similarly here, plaintiff fails to identify any allegation that, if true, would establish that the statutory remedies are inadequate to compensate plaintiff for the wage and hour violations.

To the extent plaintiff argues the Labor Code violations are crimes, plaintiff offers no authority establishing that a crime is subject to punitive damages, or any such authority in the context of a Labor Code violation. Plaintiff’s sole authority mentioning punitive damages in this line of argument is, “When a statute recognizes a cause of action for violation of a right, all forms of relief granted to civil litigants generally, including appropriate punitive damages, are available unless a contrary legislative intent appears.” Commodore Home Systems, Inc. v. Superior Court (1982) 32 Cal.3d 211, 215. This language is generic and does not negate Brewer’s holding that is specific to punitive damages for Labor Code violations. Additionally, Commodore is a FEHA case, not a wage and hour action.

Accordingly, (a) the motion is DENIED as to punitive damages for the FEHA claims, and (b) GRANTED WITH LEAVE TO AMEND as to the Labor Code claims, if plaintiff can articulate at the hearing a good faith basis for amending to add allegations that, if true, would establish that the statutory remedies are inadequate.

Injunction Analysis

Defendant argues plaintiff, as a former employee, lacks standing to request an injunction because no injury by defendant could prospectively threaten her and because her harm may be adequately remedied by the monetary damages requested.

Permanent injunctions require establishing two elements: (1) a wrongful act stating a cause of action; and (2) basis for equitable relief. As to the second element, ordinarily, irreparable harm must be threatened, or a remedy at law is inadequate. Brownfield v. Daniel Freeman Marina Hosp. (1989) 208 Cal.App.3d 405, 410; Intel Corp. v. Hamidi (2003) 30 Cal.4th 1342, 1352.

Here, the FAC prays “For an order enjoining Defendants and their agents, servants, and employees, and all persona acting under, in concert with, or for them, from acting in derogation of any rights or duties adumbrated in this complaint.” Prayer ¶ 3.

In opposition plaintiff relies on Herr v. Nestle U.S.A., Inc. (2003) 109 Cal.App.4th 779. Herr held, “Further, Business and Professions Code section 17200 has been applied in the employment context. In Cortez v. Purolator Air Filtration Products Co. (2000) 23 Cal.4th 163 [96 Cal.Rptr.2d 518, 999 P.2d 706], the Supreme Court held unlawfully withheld overtime wages may be recovered as restitution in a UCL action. (Id. at p. 173.) The failure to pay statutorily mandated overtime wages constitutes unfair competition in that an employer which fails to pay overtime wages gains an unfair advantage over its competitors. [¶] By a parity of reasoning, age discrimination likewise implicates unfair competition. It is self-evident that older workers, who have worked their way up the ranks, frequently are more highly compensated than their younger colleagues. Thus, an employer that practices age discrimination may have an unfair competitive edge over employers that comply with the FEHA. Therefore, an employer which engages in age discrimination in violation of the FEHA is subject to a prohibitory injunction under the UCL. [¶] For these reasons, the trial court properly enjoined Nestlé under the UCL from engaging in age discrimination in violation of FEHA.” Id. at 790.

In reply, defendant attempts to distinguish Herr by arguing that this case a not a representative UCL claim. Nothing, however, in Herr indicates that it was anything more than a single plaintiff employment action. Nonetheless, Herr found “the evidence established that it was Nestlé’s practice to promote young people in management positions to the detriment of their more mature colleagues, such as Herr.” Id. at 789.

A recent Second District decision following Herr seems to indicate that there must be evidence of an employer’s “practice”: “Appellant contends there was ‘ample evidence’ that Farmers ‘engaged in a pattern of discrimination against older District Managers,’ but cites nothing in the record to support that contention. Our review of the record reveals that one other district manager, Glenn Smith, was terminated under circumstances suggestive of age discrimination—some five years after appellant was terminated.18 The jury made no finding that age played a part in any other employment decision by Farmers, and its verdict represents, at best, a determination that appellant’s age played a non-pivotal role in his discharge. On this record, there was insufficient evidence to support issuance of an injunction forbidding Farmers from engaging in age discrimination.” Davis v. Farmers Insurance Exchange (2016) 245 Cal.App.4th 1302, 1327 (citing Herr, supra, at 789).

Plaintiff fails to identify any alleged facts indicating that other defendant employees were subject to age or disability discrimination or wage and hour violations. Additionally, no prospective harm threatens plaintiff herself. Accordingly, the prayer for an injunction is improper.

The motion will be GRANTED, however LEAVE TO AMEND will be allowed if at the hearing Plaintiff can articulate a good faith basis for amending to add allegations of similar violations against other employees.