2016-00198615-CU-OE

Whitney Conner vs. Frisky Rhythm, LLC

Nature of Proceeding: Motion for Summary Adjudication

Filed By: Gaines, Daniel F.

Plaintiff Whitney Conner’s (“Plaintiff”) motion for summary adjudication is GRANTED.

Moving party has indicated the incorrect address of the court in its notice of motion. The correct address for Department 53 of the Sacramento County Superior Court is 813 6th Street, Sacramento, California 95814. Moving party shall notify responding party(ies) immediately.

Factual and Procedural Background

In this putative class action, Plaintiff alleges defendants Frisky Rhythm LLC (“Frisky”) and Dive Bar LLC (“Dive Bar”) (collectively, “Defendants”) failed to provide meal and rest periods, pay all gratuities, pay all wages due at separation, and provide accurate itemized wage statements. Plaintiff also alleges violations of Business and Professions Code section 17200 and seeks civil penalties pursuant to Labor Code section 2698 et seq. (the Private Attorney General Act, or “PAGA”).

Frisky is a nightclub and Dive Bar is a bar, both of which are located in Sacramento. (UMFs 6, 7.) Plaintiff was employed as a non-exempt employee for both Defendants between October 17, 2015, and July 1, 2016. (UMF 8.)

Defendants paid Plaintiff and their California employees on a semi-monthly basis, using pay periods that were from the 7th to the 22nd day of the month and the 23rd to the 6th day of the month. (UMF 9.) Plaintiff alleges Defendants failed to issue wages to their employees seven calendar days after the end of each semi-monthly payroll

period as required by Labor Code section 204, subsection (d). (UMFs 10-13.)

On August 2, 2016, and July 12, 2017, Plaintiff provided written notice to Defendants and the LWDA of her allegations and the supporting facts. (UMF 1.) She received no notice from the LWDA within 65 days of either date. (UMF 2.)

Plaintiff filed her putative class action complaint on April 4, 2016, alleging various violations of the Labor Code. (UMF 3.) She filed her First Amended Complaint on October 6, 2016, adding her PAGA claim. (UMF 4.) Plaintiff has not yet sought class certification.

Plaintiff now moves for summary adjudication as to her seventh cause of action for PAGA penalties on the grounds that: (1) she has properly exhausted PAGA’s administrative requirements; (2) she need not obtain class certification prior to pursuing adjudication of her PAGA claims; and (3) Defendants violated Labor Code section 204(d).

Discussion

In evaluating a motion for summary adjudication the Court engages in a three step process.

First, the Court identifies the issues framed by the pleadings. The pleadings define the scope of the issues on a motion for summary adjudication. (FPI Dev. Inc. v. Nakashima (1991) 231 Cal.App.3d 367, 381-382.) Because a motion for summary adjudication is limited to the issues raised by the pleadings (Lewis v. Chevron (2004) 119 Cal.App.4th 690, 694), all evidence submitted in support of or in opposition to the motion must be addressed to the claims and defenses raised in the pleadings. The Court cannot consider an unpleaded issue in ruling on a motion for summary adjudication. (Roth v. Rhodes (1994) 25 Cal.App.4th 530, 541.) The papers filed in response to a defendant’s motion for summary adjudication may not create issues outside the pleadings and are not a substitute for an amendment to the pleadings. ( Tsemetzin v. Coast Federal Savings & Loan Assn. (1997) 57 Cal.App.4th 1334, 1342.)

Next, the Court must determine whether the moving party has met its burden. A plaintiff moving for summary judgment must present prima facie evidence of each element of a cause of action entitling it to summary judgment. Thus, in meeting this initial burden, a moving plaintiff need only prove each element of the cause of action, and is no longer required also to disprove any defense asserted by the defendant. (See, e.g. Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 843.)

If plaintiff succeeds, the burden shifts to defendant, who must set forth specific facts showing a triable issue of material fact exists as to that cause of action. (Code Civ. Proc. § 437c(p)(1).) In ruling on the motion, the Court must consider the evidence and inferences reasonably drawn from the evidence in the light most favorable to the party opposing the motion. (Aguilar, supra, 25 Cal.4th at 843.)

Plaintiff’s Seventh Cause of Action for PAGA Penalties Based on Violation of Labor Code section 204

Preliminarily, the Court notes that Plaintiff’s seventh cause of action for PAGA penalties is predicated on multiple alleged violations of the Labor Code; namely,

sections 201-203 for failure to pay all unpaid wages upon termination, 204 and 210 for failure to timely pay wages, 226(a) for failure to provide accurate wage statements, 226.7 and 512 for failure to provide meal and rest periods, and 351and 354 for failure to pay all gratuities. In this motion, however, Plaintiff has only addressed a violation of Labor Code section 204.

Summary adjudication must dispose of an entire cause of action. (Code Civ. Proc. § 437c, subd. (f)(1).) But where a plaintiff has pleaded multiple theories for relief in a single count or has combined multiple separate and distinct wrongful acts in a single cause of action, summary adjudication may be granted as to each allegation “which would have formed a single cause of action if properly pleaded.” (Exxon Corp. v. Super. Court (1997) 51 Cal.App.4th 1672, 1688, fn. 11; see also Lilienthal & Fowler v. Superior Court (1993) 12 Cal.App.4th 1848, 1854-1855; Hindin v. Rust (2004) 118 Cal.App.4th 1247, 1255-1260.)

The Court finds that each alleged Labor Code violation and related PAGA penalty involves a separate primary right. California courts follow the primary right theory. ( Mycogen Corp. v. Monsanto Co. (2002) 28 Cal.4th 888, 904.) “ ‘The primary right theory . . . provides that a “cause of action” is comprised of a “primary right” of the plaintiff, a corresponding “primary duty” of the defendant, and a wrongful act by the defendant constituting a breach of that duty. [Citation.] The most salient characteristic of a primary right is that it is indivisible: the violation of a single primary right gives rise to but a single cause of action. [Citation.] . . . ‘As far as its content is concerned, the primary right is simply the plaintiff’s right to be free from the particular injury suffered. [Citation.] It must therefore be distinguished from the legal theory on which liability for that injury is premised: “Even where there are multiple legal theories upon which recovery might be predicated, one injury gives rise to only one claim for

relief.” [Citation.] The primary right must also be distinguished from the remedy sought: “The violation of one primary right constitutes a single cause of action, though it may entitle the injured party to many forms of relief, and the relief is not to be confounded with the cause of action, one not being determinative of the other.” [Citation.] ‘ ” The primary right is simply the plaintiff’s right to be free from the particular injury suffered. ( Slater v. Blackwood(1975) 15 Cal.3d 791, 795.)

Accordingly, Plaintiff may seek summary adjudication of each Labor Code violation on which the PAGA cause of action is premised. Specifically, here, Plaintiff seeks summary adjudication of the seventh cause of action based on Defendants’ purported violation of Labor Code section 204 for failure to timely pay wages.

Plaintiff has exhausted PAGA’s Administrative Requirements.

Under Labor Code section 2699.3, an aggrieved employee must first provide written notice via certified mail to the LWDA and the employer describing the Labor Code violations. (Lab. Code § 2699.3(a)(1).) If the LWDA chooses to investigate the allegations itself, it must notify the employee and employer of its decision within 33 calendar days from the postmark date of the employee’s notice letter. (Lab. Code § 2699.3(a)(2)(B).) If the LWDA chooses not to investigate, it must notify the employee and employer within 60 calendar days of the employee’s notice letter. (Lab. Code § 2699.3(a)(2)(A).) 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).)

Plaintiff has presented undisputed facts demonstrating she has exhausted the administrative requirements under PAGA by providing written notice to the LWDA and Defendants and receiving no response from the LWDA within 65 calendar days. (UMFs 1, 2.) Defendants do not dispute, for purposes of this motion, the existence of PAGA exhaustion. (Opposition at 5:12-14.)

Plaintiff need not seek class certification of her PAGA claim.

There is no dispute that Plaintiff need not seek class certification of her PAGA claim. A party bringing a PAGA action does so not on behalf of other individual employees, but on behalf of the LWDA as its representative. (Iskanian v. CLS Transportation Los Angeles, LLC (2012) 59 Cal.4th 348, 383.) Indeed, a claim for PAGA penalties is representative, not individual. (See Brown v. Ralph’s Grocery Co. (2011) 197 Cal.App.4th 489, 503, fn. 8 [citing federal case holding that “a PAGA claim cannot be brought on an individual basis, but rather only as a representative action”]; Thomas v. Aetna Health of Cal, Inc. (E.D. Cal. June 2, 2011) 2011 U.S. Dist. LEXIS 59377, *30 [“[T]here are no individual claims for PAGA penalties.”].) Thus, the real parties in interest in a PAGA action are the State’s labor law enforcement agencies – a point the California Supreme Court has made unequivocally clear. (Arias v. Superior Court (2009) 46 Cal.4th 969, 986; Iskanian, supra, at 381-382.) PAGA contains no specific class certification requirements. PAGA is a representative action on behalf of the State of California only.

It is undisputed Defendants violated Labor Code section 204, subsection (d).

The court then must address whether Plaintiff has established a violation of Labor Code section 204, subsection (d). Section 204, provides, in relevant part:

“(a) All wages, other than those mentioned in Section 201, 201.3, 202, 204.1, or 204.2, earned by any person in any employment are due and payable twice during each calendar month, on days designated in advance by the employer as the regular paydays. Labor performed between the 1st and 15th days, inclusive, of any calendar month shall be paid for between the 16th and the 26th day of the month during which the labor was performed, and labor performed between the 16th and the last day, inclusive, of any calendar month, shall be paid for between the 1st and 10th day of the following month.

…

(d) The requirements of this section shall be deemed satisfied by the payment of wages for weekly, biweekly, or semimonthly payroll if the wages are paid not more than seven calendar days following the close of the payroll period.”

Plaintiff offers the following UMFs in support of her allegation that Defendants violated section 204, subsection (d). Defendants failed to issue wages to their employees seven calendar days after the end of each semi-monthly payroll period. (UMF 10.) Defendants’ payroll records illustrate Defendants consistently paid their employees’ wages eight or more calendar days after the end of the prior payroll period. (UMF 11.) Plaintiff’s wage statements illustrate she was paid wages more than seven calendar days after the end of the pay period. (UMF 12.) During the applicable period,

Defendants untimely issued wages to dozens of employees. (UMF 13.)

Defendants concede that at times during the applicable period they failed to timely pay wages in violation of Labor Code section 204. However, Defendants contend a material dispute still exists because some employees were paid their wages timely for 8 of the 28 relevant pay periods (16 employees for 5 pay periods and all employees for 3 pay periods). Defendants contend that because not all paychecks were late, the amount of damages/penalties is in dispute, which precludes summary adjudication pursuant to Paramount Petroleum Corp. v. Sup. Ct. (Building Materials Corp. of America) 2014) 227 Cal.App.4th 226, 243.

Plaintiff contends this dispute is not material or relevant because it only involves the amount of penalties recovered, which is an issue Plaintiff has not raised by this motion. Plaintiff contends the amount of penalties can proceed to trial. Plaintiff argues Paramount Petroleum did not involve a claim for civil penalties and instead cites to People ex rel. Feuer v. Super. Ct. (2015) 234 Cal.App.4th 1360 in support.

Whether summary adjudication can properly be granted on a PAGA claim without a determination of the actual amount of penalties is not settled. In examining the propriety of summary adjudication of a breach of contract claim, Paramount Petroleum, found that, since a moving party must prove each element to obtain summary adjudication of a cause of action, and since damages are an element of a breach of contract cause of action, summary adjudication on only the issue of liability for breach of contract-with the amount of damages to be determined later-is improper. In contrast, the plaintiff in People ex rel. Feuer brought a UCL claim that sought civil penalties. The appellate court determined that the penalties were merely a remedy available to the plaintiff and were not an element of the cause of action. Thus, the plaintiff could properly bring a motion for summary adjudication of the UCL cause of action, with penalties appropriately later determined in further proceedings. (Id. at pp. 1364, 1372-1376.)

Plaintiff’s PAGA claim predicated upon Labor Code § 204(d) [” (d) The requirements of this section shall be deemed satisfied by the payment of wages for weekly, biweekly, or semimonthly payroll if the wages are paid not more than seven calendar days following the close of the payroll period.”] appears more analogous to the UCL claim examined in People ex rel. Feuer than the breach of contract claim at issue in Paramount Petroleum. Section 204, subdivision (d) lays out the requirements for when wages must be paid. The remedy for a violation – civil penalties – is separately set forth in section 210 [titled “Penalty for failure to pay; Recovery; Disposition of money recovered”], which may be enforced through a representative PAGA action. Indeed, section 210(b) prescribes: “The penalty shall be recovered by the Labor Commissioner as part of a hearing held to recover unpaid wages and penalties pursuant to this chapter or in an independent civil action. The action shall be brought in the name of the people of the State of California and the Labor Commissioner and the attorneys thereof may proceed and act for and on behalf of the people in bringing these actions. Twelve and one-half percent of the penalty recovered shall be paid into a fund within the Labor and Workforce Development Agency dedicated to educating employers about state labor laws, and the remainder shall be paid into the State Treasury to the credit of the General Fund.” PAGA does not include establishing the penalty amount as an element of the cause of action.

Accordingly, as it is undisputed Defendants have violated Labor Code section 204,

subsection (d), and the only issue in dispute is the actual number of violations from which penalties may be calculated, the Court finds Plaintiff has met her burden on summary adjudication.

Conclusion

Plaintiff’s motion for summary adjudication is therefore GRANTED.