Case Name: Lourdes Santos, et al. v. El Guapos Tacos, LLC, et al.
Case No.: 2015-1-CV-285065

I. Background

This is a wage and hour action brought by plaintiffs Carolina Chavez-Cortez and Lourdes Santos (collectively “Plaintiffs”) against defendants El Guapos Tacos, LLC (“EGT”), Anthony Richard Beers, James Robert Beers, John Henry Conway, David Richard Powell, Sam Ramirez dba Chacho’s Tacos (“Ramirez”), and Jorge Sanchez.

According to the operative Third Amended Complaint (“TAC”), Plaintiffs were employed by EGT and Ramirez as cooks for several years. During their employment, Plaintiffs did not receive meal or rest breaks. Moreover, they were not timely provided with accurate wage statements showing all hours worked and wages earned. After Plaintiffs’ employment ended, they were not timely provided final wages.

Plaintiffs assert the following causes of action: (1) violation of the Private Attorneys General Act (against all Defendants); (2) failure to provide meal breaks (against EGT and Ramirez); (3) failure to permit or authorize rest breaks (against EGT and Ramirez); (4) failure to maintain and provide wage statements (against EGT and Ramirez); (5) failure to timely pay all wages due; and (6) violation of the Business and Professions Code section 17200, et seq. (against EGT and Ramirez).

Defendants EGT, Anthony Beers, James Beers, John Conway, David Powell, and Ramirez (i.e. all defendants other than Jorge Sanchez) (collectively “Defendants”) presently move for judgment on the pleadings as to the first cause of action brought by plaintiff Carolina Chavez-Cortez (“Chavez-Cortez”). The motion is accompanied by a request for judicial notice.

II. Preliminary Matters

A. Authority for Motion

Defendants assert their motion is both a statutory motion for judgment on the pleadings pursuant to Code of Civil Procedure section 438 as well as a non-statutory motion as recognized in Stoops v. Abbassi (2002) 100 Cal.App.4th 644.

Code of Civil Procedure section 438 governs statutory motions for judgment on the pleadings, and prescribes various procedural requirements for bringing a motion. For example, subdivision (e) of the statute provides that “[n]o motion may be made pursuant to this section if a pretrial conference order has been entered pursuant to Section 575, or within 30 days of the date the action is initially set for trial, whichever is later, unless the court otherwise permits.” The law otherwise recognizes a non-statutory motion for judgment on the pleadings, which may be made at any time prior to trial or even at the trial itself. (Stoops v. Abbassi (2002) 100 Cal.App.4th 644, 650; see also Smiley v. Citibank (1995) 11 Cal.4th 138, 145-146.)

Here, the trial setting conference occurred on July 31, 2018, at which time trial was set for January 14, 2019. The instant motion was filed on August 13, 2018; thus, it was timely filed as a statutory motion under section 438. As such, it is unclear why Defendants framed their motion as both a statutory and non-statutory motion. To the extent they did so to circumvent the statutory meet and confer requirement, such approach is not acceptable.

For context, Code of Civil Procedure section 439 mandates that a party moving for judgment on the pleadings, prior to filing the motion, must meet and confer with the party who filed the challenged pleading. (Code Civ. Proc., § 439, subd. (a)(1)-(2).) If a motion is ultimately filed, the moving party must file a declaration showing compliance with the meet and confer requirement. (Code Civ. Proc., § 439, subd. (a)(3).) The purpose of the requirement is “to promote judicial efficiency, expedite case management, reduce costs, and improve legal practice.” (See Assembly Committee on Judiciary Report (2017-2018 Reg. Sess.), Assembly Bill 644, p. 3.)

Defendants did not file the requisite declaration and there is otherwise no indication in the record that they met and conferred with Chavez-Cortez prior to bringing the instant motion. Although a statutory motion may not be denied on this basis (Code Civ. Proc., 439, subd. (a)(4)), that is not a legitimate reason for a party to ignore the meet and confer requirement. Nor is it acceptable to disregard the requirement by couching a motion for judgment on the pleadings as a non-statutory motion, particularly when the moving party had sufficient time to do so. To that point, a colorable argument could be made that Code of Civil Procedure section 438 displaced the common law non-statutory motion. Otherwise, a litigant could simply choose to frame a motion as non-statutory to avoid legislatively-prescribed restrictions applicable to statutory motions. Although there are some cases postdating the enactment of section 438 that recognized the non-statutory motion, no court has squarely addressed the viability of such a motion in light of section 438.

In consideration of the foregoing and because there is no apparent legitimate reason to treat Defendants’ motion as a non-statutory motion, the Court treats it solely as a statutory motion here. Defendants are admonished to comply with the meet and confer requirement in the future.

B. Request for Judicial Notice

Defendants filed a request for judicial notice in support of their motion. A court may consider judicially noticed matters in ruling on a motion for judgment on the pleadings. (Code Civ. Proc., § 438, subd. (d).)

In their original request, they requested judicial notice of the initial complaint filed in this action as well as the TAC. In their “corrected” request filed with their reply papers, Defendants request judicial notice of those pleadings as well as the Court’s order on a prior motion for summary judgment/adjudication.

Court records are generally proper subjects for judicial notice under Evidence Code section 452, subdivision (d). Even so, it is not proper to take judicial notice of a matter that is not relevant to an issue under review. (People ex rel. Lockyer v. Shamrock Foods Co. (2000) 24 Cal.4th 415, 422, fn. 2 [relevance is a precondition to judicially noticing a matter].) A court may otherwise decline to take judicial notice of a matter that is not necessary or helpful to the resolution of an issue. (Jordache Enterprises, Inc. v. Brobeck, Phleger & Harrison (1998) 18 Cal.4th 739, 748, fn. 6 [declining to take judicial notice of materials that are not “necessary, helpful or relevant”].)

Here, the order on the prior summary judgment/adjudication motion is not relevant or helpful to resolving Defendants’ motion for judgment on the pleadings. Nor is the original complaint, which was superseded by the TAC. Defendants do not rely on the original complaint for any material purpose. Lastly, although the TAC is certainly relevant to evaluating Defendants’ motion, it is unnecessary to judicially notice it since it is the pleading under review. (See Paul v. Patton (2015) 235 Cal.App.4th 1088, 1091, fn.1 [denying as unnecessary a request for judicial notice of pleading under review on demurrer].)

The Court also observes there are technical problems with Defendants’ presentation. For context, the discrete issue raised by Defendants’ motion is whether Chavez-Cortez’s claim is barred for failure to exhaust administrative remedies. Chavez-Cortez alleged compliance in the original complaint filed on August 31, 2015; in support, she attached two pre-litigation letters sent to the Labor and Workforce Development Agency (the “LWDA”) dated July 27, 2015 and August 7, 2015. In the First Amended Complaint subsequently filed on October 16, 2015, the pleading indicated those letters were again attached but they were not actually attached to the pleading filed with the Court. Then, in the Second Amended Complaint filed on March 10, 2016, the July 27 and August 7 letters were attached as well as third and fourth letters dated September 21 and October 6, 2015. Although all four letters are identified as attached exhibits in the later-filed TAC, they were not actually attached to the pleading filed with the Court.

In Defendants’ original request for judicial notice, they attached a copy of the complaint and TAC, representing they were both true and correct copies. But the attached complaint was missing all exhibits. Furthermore, Defendants erroneously stated in their supporting memorandum that all four letters to the LWDA were attached as exhibits to the TAC they submitted. In addition to the fact the TAC submitted by Defendants themselves did not include any exhibits, as indicated above, the TAC on file with the Court has no exhibits attached.

Defendants subsequently filed a corrected request for judicial notice, apparently intending in primary part to supply the missing exhibits. Its effort as such, however, is problematic. First, with respect to the original complaint, Defendants describe the pleading as including the September 21, 2015 letter as an exhibit and attached it to the complaint they submitted with their request. But the September 21 letter is not an actual exhibit to the complaint, which was filed in August 2015 before the letter existed. As for the TAC, Defendants represent the attached pleading is a true and correct copy, and included the four letters to the LWDA as exhibits thereto. Once again, however, no such exhibits were actually attached to the TAC filed with the Court in February 2017.

In light of the foregoing, Defendants’ request for judicial notice is DENIED in its entirety. And the Court expects Defendants to exercise greater care and precision in presenting requests for judicial notice in the future.

With that said, the Court is left with an operative pleading—the TAC—that is missing exhibits critical to Defendants’ motion. To be clear, Defendants rely on the contents of the LWDA letters to substantiate their position that the first cause of action is barred. The omission of the letters as exhibits to the TAC on file with the Court was clearly a clerical error given they are expressly identified in the pleading as attached thereto. Since the letters were all attached to the preceding Second Amended Complaint, the Court will treat the exhibits to that pleading as being the exhibits to the TAC.

III. Merits of Motion

Once again, Defendants’ motion is directed solely to Chavez-Cortez’s first cause of action. This claim is brought pursuant to the Private Attorneys General Act (the “PAGA”), and seeks civil penalties for Defendants’ alleged violations of the Labor Code.

Defendants assert that Chavez-Cortez’s PAGA claim should be dismissed because she did not exhaust her administrative remedies before bringing the claim in a representative capacity as required under Labor Code section 2699.3.

As a preliminary matter, Defendants fail to precisely state the ground for their motion. The available grounds for a motion for judgment on the pleadings are lack of subject matter jurisdiction and failure to state sufficient facts to constitute a cause of action. (Code Civ. Proc., § 438, subd. (c)(1)(B)(i)-(ii).) Defendants’ argument aligns with the ground of failure to state sufficient facts to constitute a cause of action. (See Edgren v. Regents of University of California (1984) 158 Cal.App.3d 515, 523.)

The PAGA (Labor Code section 2698, et seq.) was adopted by the Legislature in 2003 in response to a shortage of state funds and staffing at labor law enforcement agencies resulting in lax prosecution of Labor Code violations. (Arias v. Superior Court (2009) 46 Cal.4th 969, 980.) “The Legislature declared…it was therefore in the public interest to allow aggrieved employees, acting as private attorneys general, to recover civil penalties for Labor Code violations, with the understanding that labor law enforcement agencies were to retain primacy over private enforcement efforts. [Citation.]” (Ibid.) Therefore, under the PAGA, “an ‘aggrieved employee’ may bring a civil action personally and on behalf of other current or former employees to recover civil penalties for Labor Code violations. [Citation.]” (Ibid.)

Before bringing such an action, an employee must comply with the administrative pre-filing requirements in Labor Code section 2699.3. Section 2699.3 states an employee must “give written notice by certified mail to the [LWDA] and the employer of the specific provisions of this code alleged to have been violated, including the facts and theories to support the alleged violation.” (Lab. Code, § 2699.3, subd. (a)(1).) If the LWDA either notifies the employee that it does not intend to investigate or does not respond within 30 calendar days of the written notice, the employee may file a civil action. (Lab. Code, § 2699.3, subd. (a)(2)(A).)

“The evident purpose of the notice requirement is to afford the relevant state agency, the [LWDA], the opportunity to decide whether to allocate scarce resources to an investigation, a decision better made with knowledge of the allegations an aggrieved employee is making and any basis for those allegations. Notice to the employer serves the purpose of allowing the employer to submit a response to the agency (see Lab. Code, § 2699.3, subd. (a)(1)(B)), again thereby promoting an informed agency decision as to whether to allocate resources toward an investigation.” (Williams v. Superior Court (2013) 3 Cal.5th 531, 545-546.)

Defendants argue Chavez-Cortez failed to satisfy the administrative remedy because her written notice to the LWDA did not identify any claims against Defendants on behalf of similarly situated employees; rather, it only identified her individual claims.

To support their argument, Defendants rely on Khan v. Dunn-Edwards Corp. (2018) 19 Cal.App.5th 804 (“Khan”). There, the court affirmed an order granting summary judgment based on the plaintiff’s failure to exhaust administrative remedies under Labor Code section 2699.3. (Id., at 809-810). The written notice to the LWDA was insufficient because it only asserted individual claims and did not inform the employer and the LWDA of other aggrieved employees. The court concluded the plaintiff could not pursue a claim on behalf of others. As for the plaintiff’s individual claim, the court held he could not seek recovery pursuant to the PAGA on a purely individual basis because such claim may only be made on behalf of an aggrieved employee and other similarly situated employees. (Id., at 810.)

Defendants argue that Khan is directly on point since Chavez-Cortez’s written notice only refers to herself and she failed to exhaust her administrative remedies. They conclude she cannot pursue a PAGA claim on behalf of others because fair notice of the same was not provided, and she otherwise cannot pursue a claim on an individual basis.
In opposition, Chavez-Cortez first argues she complied with the pre-litigation administrative requirement. She contends the statute only requires that the employee give written notice of the Labor Code violations, including facts and theories supporting those violations, which she did. (See Lab. Code, § 2699.3, subd. (a).) Chavez-Cortez also maintains that section 2699.3 also does not require that she include language in her written notice stating she seeks to pursue her claim on behalf of others. She concludes her notice was proper and she complied with the administrative requirement sufficient to pursue her PAGA claim.
Chavez-Cortez then attempts to analogize her situa
tion to Gonzalez v. Millard Mall Services, Inc. (S.D. Cal., Aug. 21, 2012) WL 3629056 (“Gonzalez”), a case the Khan court distinguished from the facts before it. In addressing Gonzalez, the Khan court observed the plaintiff there complied with the PAGA’s written notice requirement because it identified two employees and stated there was a potential class action lawsuit. (Khan, supra, 19 Cal.App.5th at 809-810.) Chavez-Cortez contends her written notice also identified two employees, herself and plaintiff Lourdes Santos, and was therefore sufficient.

Plaintiff’s argument is unpersuasive. As the court in Khan noted, the notice in Gonzalez specifically identified two employees and advised the LDWA that counsel represented them in a potential class action case. (Khan, supra, 19 Cal.App.5th at 810.) Here, in contrast, Chavez-Cortez’s notice did not identify a class or group of similarly situated aggrieved employees. Further, Chavez-Cortez and Lourdes Santos filed their notice jointly on behalf of themselves; they did not indicate they were seeking a remedy on behalf of one another. Thus, they did not give adequate notice that they intended to represent other similarly situated employees.

Next, Chavez-Cortez argues the Court should decline to follow Khan and instead follow Huff v. Securitas Services USA, Inc. (2018) 23 Cal.App.5th 745 (“Huff”). According to Chavez-Cortez, Huff stands for the proposition that all PAGA actions are automatically representative actions such that it was unnecessary for her to affirmatively state as much in her notice to the LWDA.
Chavez-Cortez’s reliance on Huff is entirely misplaced. There, the court addressed whether the plaintiff could bring a PAGA claim on behalf of others when some of the alleged Labor Code violations did not apply to him. (Huff, supra, 23 Cal.App.5th at 757-758.) Huff does not address any issue regarding exhaustion of administrative remedies or the required contents of a written notice to the LWDA. On the other hand, the court in Khan did. Once again, Khan specifically held that written notice to the LWDA must include language indicating that the claim is on behalf of others. (Khan, supra, 19 Cal.App.5th at 809.) The court further stated a written notice only referring to individual claims is insufficient since a PAGA claim must be a representative action. (Ibid.) These principles apply to Chavez-Cortez’s claim.

Lastly, Chavez-Cortez argues in footnote 2 of her opposition that the Court should decline to follow Khan because the Second District authored the decision and this Court is within the Sixth District, which authored Huff. (Opp., p. 6:16, fn. 2.) While not clearly articulated, it appears Chavez-Cortez’s argument is predicated on the purported proposition that those cases are conflicting such that this Court should follow the Sixth District’s decision in Huff. But Khan and Huff do not conflict as they address different issues. Moreover, while Chavez-Cortez may believe the Khan decision is “bad facts making bad law” (Opp., p. 6:16), the Court is bound to follow appellate court decisions and cannot disregard a decision simply because it believes the appellate court may be wrong. (See Cuccia v. Superior Court (2007) 153 Cal.App.4th 347, 353-354.)

In sum, under Khan, Chavez-Cortez did not provide adequate notice because her notice only identified her individual claims. Therefore, she did not exhaust her administrative remedies under Labor Code section 2699.3.

In a final effort to avoid Khan, Chavez-Cortez argues that case should not be given retroactive effect since it creates a new rule and was only recently issued on January 2, 2018, after this action was filed.

Appellate decisions are almost always given retroactive effect in pending civil cases. (Grafton Partners L.P. v. Superior Court (2005) 36 Cal.4th 944, 967.) The only exception to this general rule is narrow; when a judicial decision changes a settled rule that parties have relied upon, it may be applied prospectively only based on considerations of fairness and public policy. (Claxton v. Waters (2004) 34 Cal.4th 367, 378; see also Woods v. Young (1991) 53 Cal.3d 315, 330.)

As indicated by Defendants in their reply brief, Khan did not create a new rule or a change any existing law. Rather, it merely interpreted existing law about written notice requirements under Labor Code section 2699.3. For this reason alone, the decision applies retroactively. Further, even if Khan did create a change in the law, Chavez-Cortez’s argument that it should not be applied here is unpersuasive.

To determine if a decision should be applied retroactively, the courts consider the reasonableness of the parties’ reliance on the former rule, whether the change was substantive or procedural, the effect of the change on the administration of justice, and the change’s purpose. (Claxton v. Waters, supra, 34 Cal.4th at 378-379.)

Chavez-Cortez cites Newman v. Emerson Radio Corp. (1989) 48 Cal.3d 973 (“Newman”) for the proposition that applying Khan retroactively would raise concerns about the general administration of justice and undermine reasonable reliance on previous law. (Newman v. Emerson Radio Corp. (1989) 48 Cal.3d 973, 983.) She asserts this case is more than four years old, language in her complaints provided Defendants notice this was a representative action, and Defendants did not previously demur to her complaint for failure to exhaust administrative remedies. Chavez-Cortez insists that if they had demurred, she could have amended her LWDA notice to reflect she intended to represent other similarly situated employees. Chavez-Cortez concludes it would be a hardship if Khan were retroactively applied.

The Court observes preliminarily that the issue is not whether the language in Chavez-Cortez’s complaints identified that she is seeking to represent other aggrieved employees, but whether her notice to the LWDA did. Thus, her assertion that her complaints in this action gave notice that the PAGA claim is representative is off point.

In any event, Chavez-Cortez does not otherwise demonstrate she reasonably relied on a former rule. The court in Newman clearly stated it would decline retroactive application “only when the circumstances of a case draw it apart from the usual run of cases.” (Newman, supra, 48 Cal.3d at 983.) In other words, a case is only prospectively applied when it represents a clear break from past cases. Here, Chavez-Cortez does not demonstrate that Khan is an exception to the “usual run of cases”; she does not provide any legal authority holding or suggesting she was not required to state she intended to represent other similarly situated employees.

Next, assuming the Khan decision changed the law, it would be deemed a procedural change at most. “Retroactive application of an unforeseeable procedural change is disfavored when such application would deprive a litigant of ‘any remedy whatsoever.’ [Citation.]” (Woods v. Young, supra, 53 Cal.3d at 330.) Here, the purported procedural change would not deprive Chavez-Cortez of any other remedy. On the contrary, her other wage and hour causes of action remain, even if she cannot bring her PAGA claim. In comparison, the court in Woods v. Young, supra, 53 Cal.3d 315 declined to retroactively apply a procedural change because the plaintiff would be wholly deprived of any remedy under the law. (Woods v. Young, supra, 53 Cal.3d at 330.) There, the court stated that “[r]etroactive application of the [procedural change regarding the statute of limitations], on the other hand, would bar plaintiffs’ actions [for medical malpractice] regardless of their merits.” (Ibid.) Here, Chavez-Cortez can still pursue the merits of her wage and hour claims but not in a representative capacity.

Lastly, the purpose of the written notice is to ensure the LWDA and employers are provided fair notice of a plaintiff’s claims. (Khan, supra, 19 Cal.App.5th at 809-810.) More specifically, when a written notice only identifies individual claims, it harms the LWDA and the employer’s ability to adequately respond and investigate the issues:

[The notice] failed to give the [LWDA] an adequate opportunity to decide whether to allocate resources to investigate [the plaintiff’s] representative action…[T]he agency may have determined that no investigation was warranted. Additionally, the notice failed to provide [the employer] with an adequate opportunity to respond to the agency since the notice suggested only an individual violation.
(Id., at 809.)

Here, Chavez-Cortez’s notice failed to provide fair notice to both her employers and the LWDA of the scope of her claims as including other similarly situated employees. Defendants were initially only provided notice of an individual claim and the LWDA may have chosen not to investigate because it concluded her claims were solely individual.

For the foregoing reasons, Chavez-Cortez PAGA claim is barred for failure to exhaust administrative remedies. Accordingly, Defendants’ motion for judgment on the pleadings as to Chavez-Cortez’s first cause of action is GRANTED WITHOUT LEAVE TO AMEND.

The Court will prepare the Order.