2018-00236721-CU-OE

Robert Britschgi vs. G4 Investments Corp.

Nature of Proceeding: Motion to File 2nd Amended Complaint

Filed By: Ly, Liane K.

Plaintiff’s Motion to File Second Amended Complaint is granted.

This is a wage and hour class action brought on behalf of all current and former hourly employees employed by G4 Investments Corp. and/or Teamwork Human Resources, Inc. Plaintiff states that the effect of permitting this amendment would be to protect the interests of the Class by adding a claim that would benefit the Class as a whole. The amendment is alleged to be necessary to ensure that all of the claims applicable to the Class are raised.

PAGA includes an administrative procedure that the aggrieved employee must exhaust as a prerequisite to filing a civil suit. The administrative prerequisites to filing suit in section 2699.3 are triggered when an aggrieved employee seeks certain civil penalties under the Labor Code. See, e.g. Caliber Bodyworks, Inc. v Superior Court (2005) 134 Cal.App.4th 365, 379-382. The administrative procedure in California Labor Code § 2699.3 requires: 1) notice to the LWDA, 2) notice to the employer, and 3) waiting a prescribed period of time to permit the LWDA to investigate and decide whether to cite the employer for the alleged violations.

Labor Code § 2699.3(a)(2)(A) provides:

The [LWDA] shall notify the employer and the aggrieved employee or representative by certified mail that it does not intend to investigate the alleged violation within 60 calendar days of the postmark date of the notice received pursuant to paragraph (1). Upon receipt of that notice or if no notice is provided within 65 calendar days of the postmark date of the notice given pursuant to paragraph (1), the aggrieved employee may commence a civil action pursuant to Section 2699.

After plaintiff sent the original PAGA letter, plaintiff sent a second PAGA letter to LDWA that added defendant Teamwork Human Resources, Inc. as a defendant and an additional claim for violation of Labor Code section 226(a). Plaintiff filed the FAC on September 17, 2018, prematurely, adding the PAGA claim from an amended PAGA letter before the required 65-day exhaustion period had run for the Amended PAGA Letter. (Ly Deck, 8; Ex. B). Labor Code § 2699.3(a)(2)(A) (“[I]f no notice is provided [by the LWDA] within 65 calendar days of the postmark date of the notice given pursuant to paragraph (1), the aggrieved employee may commence a civil action pursuant to Section 2699.”) The FAC satisfied PAGA’s 65- day exhaustion requirement for the original PAGA Letter, which had run on September 14, 2018. However, the FAC did not satisfy the exhaustion requirement for the Amended PAGA Letter (Ex. B.). (Ly Dec., ¶ 9; Ex. A-B).

Generally, upon receipt of the LWDA’s no-investigation letter, or if the LWDA provides no response at all within 65 calendar days of the employee’s notice, the administrative requirements are complete and the employee may file a private PAGA action. (Lab. Code § 2699.3(a)(2)(A).) Here, pursuant to Labor Code § 2699.3(a)(2)(A), no notice was received by Plaintiff from the LWDA evidencing its intention to investigate within sixty-five (65) calendar days since August 3, 2018, the date of the second PAGA letter. As a result, PAGA’s administrative prerequisites have been exhausted and Plaintiff is entitled to commence a civil action under PAGA for civil penalties against both Defendants.

Plaintiff’s counsel instructed her staff to file the FAC after the second 65 day period had passed, however through a clerical error it was filed before the time period had passed. (Decl. Ly ¶12) The proposed SAC is the same as the FAC; however the SAC cures the fact that the FAC was untimely as to the claims set forth in the second PAGA letter. This motion was not made earlier because Liane K. Ly, the primary attorney for Plaintiff, was out on maternity leave from August 2018 until early January 2019. (Ly Decl, ¶ 10.)

In opposition, defendants contend it was not excusable for plaintiff’s firm to prematurely file the FAC before the 65 day period ran, and that this has caused “prejudice” to defendants. The Court rejects the prematurity argument. There is no California authority on point which holds that a premature filing of a PAGA claim because the plaintiff did not wait the requisite amount of time to receive notice from the LWDA precludes the plaintiff from moving forward on the PAGA claim. There is federal authority that has addressed this contention and held that a plaintiff should not be so precluded from pursuing a PAGA claim even though she filed her PAGA claim one day after providing the requisite notice to the LWDA. (Bradescu v. Hillstone Rest. Group, Inc. (Sept. 18, 2014 C.D.Cal.) 2014 U.S.Dist.LEXIS 150978, *28-32.) The federal court noted that while the plaintiff failed to follow the plain language of section 2699.3, “the Court sees little reason to punish her for acting too quickly once she had taken the requisite step of providing notice under section 2699.3(a)(1).” (Id. *31-32.) As later noted in Donnelly v Sky Chefs, Inc., (Oct. 25, 2016 No. Dist. Cal.) 2016 U.S. Dist. LEXIS 147825, *4 “As plaintiff states, California courts have not held that the failure to exhaust administrative remedies before initiating PAGA actions must led [sic] to dismissal of the PAGA claim.” California Rules of Court do not prohibit citation to unpublished federal cases, which may properly be cited as persuasive, although not binding, authority.” (Landmark Screens, LLC v. Morgan, Lewis & Bockius, LLP (2010) 183 Cal.App.4th 238, 251, fn. 6, citing Cal. Rules of Court, rule 8.1115.) This is to be contrasted with the situation where the plaintiff failed to plead any compliance with the LWDA. (Caliber Bodyworks, Inc. v. Superior Court (2005) 134 Cal.App.4th 365, 370.) Even Caliber recognized that despite the complete failure to plead any compliance with the LWDA prior to commencing suit, the plaintiff could seek leave to amend after having complied with the LWDA. (Id. at 383, fn.18.) As the federal court in Bradescu observed, “at this point in time, well more than 33 days have elapsed since Plaintiff issued her notice pursuant to section 2699.3…, and there is no indication in the record that the LWDA has decided to step forward in any manner in connection with Plaintiff’s claims.” (Bradescu, supra, at * 31-32.) Defendants make no showing that the LWDA indicated any intent to step in and investigate these PAGA claims or that Plaintiff’s premature filing interfered with the LWDA’s administrative functions. And, as in Bradescu, it is beyond question that the requisite 33 days passed has since passed and that any procedural defect has been cured.

Defendants further state that on January 22, 2019, plaintiffs provided defendants a proposed SAC that materially makes significant changes to the class definition contained in the First Amended Complaint (“FAC”), new allegations regarding Plaintiffs filing and service of the PAGA letter, and new exhibits. Defendants contend that the

proposed SAC presented with this motion is different than the one that was provided January 22, 2019, causing a waste of resources to defendant who spent time reviewing it. The proposed SAC presented with this motion contains the same class definition as the FAC, as indicated in the moving papers.

The fact remains that the proposed SAC presented with the motion and served on defendant does not cause prejudice to defendant. Whether or not plaintiff presented a slightly different iteration to defendant before filing this motion is not particularly relevant to whether the Court should grant the motion to file the SAC accompanying this motion. The Court is not persuaded that the type of prejudice contended by defendants (expenses incurred in filing an Answer to the original complaint and unnecessary time spent reviewing first proposed SAC before the motion was filed) are the types of prejudice that would warrant denial of the motion. There is no trial date in this case. Defendant is not prejudiced in raising a defense to the SAC. The proposed SAC (Ex. D to the Declaration of Ly) merely cures the exhaustion of administrative remedy defect that resulted from the inadvertent premature filing of the FAC.

The California Code of Civil Procedure vests the Court with broad discretion to allow amendment of pleadings when the interests of justice so merit. (Code Civ. Proc, § 473, subd. (a)(1) [“The court may, in furtherance of justice, and on any terms as may be proper, allow a party to amend any pleading or proceeding by adding or striking out the name of any party … and may upon like terms allow an answer to made after the time limited by this code.”].)“Trial courts are vested with the discretion to allow amendments in the furtherance of justice… That Trial courts are to liberally permit such amendments, at any stage of the proceeding, has been established policy in this state…resting on the fundamental policy that cases should be decided on the merits.” Hirsa v Superior Court (1981) 118 Cal.App.3d 486, 488-489.

Judicial policy favors resolution of all disputed matters between the parties in the same lawsuit. Thus, the court’s discretion will usually be exercised liberally to permit amendment of the pleadings. See Nestle v. Santa Monica (1972) 6 Cal.3d 920,939; Mabie v Hyatt (1998) 61 Cal. App.4th 581, 596 (citing text). Howard v. County of San Diego (2010)184 Cal.App.4th 1422, 1428.” California Civil Procedure Before Trial (2012, Rutter) § 6:638 – 6:339. Courts apply the policy of great liberality in permitting amendments to the complaint “at any stage of the proceedings, up to and including trial” absent prejudice to the adverse party. Atkinson v Elk Corp. (2003) 109 Cal.App.4 th 739, 761.

The Court finds that the motion substantially complies with CRC 3.1324 particularly given that the proposed SAC is substantially the same as the FAC.

Plaintiff shall file and serve the propose SAC on or before March 18, 2019.

The minute order is effective immediately. No formal order pursuant to CRC Rule 3.1312 or further notice is required.