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Lake v. Irish Construction

January 21, 2009

MARVIN LAKE AND JUAN GUTIERREZ, INDIVIDUALLY AND ON BEHALF OF ALL OTHERS SIMILARLY SITUATED, PLAINTIFFS,
v.
IRISH CONSTRUCTION, IRISH COMMUNICATION COMPANY (ICC), AT&T AND DOES 1-750, DEFENDANTS.



ORDER DISMISSING PLAINTIFFS' COMPLAINT AGAINST AT&T CORP. WITH PREJUDICE

Marvin Lake and Juan Gutierrez and all others similarly situated ("Plaintiffs") brought this class action against Irish Contstruction, Irish Communication Company, and AT&T Corp. ("AT&T") for various state law claims. Plaintiffs brought claims against AT&T for violations of California Business and Professions Code § 17200 and California Labor Code § 2810. AT&T brought a Motion to Dismiss Plaintiffs' claims with prejudice under Rule 12(b)(6). Plaintiffs opposed the motion and brought a Motion to Remand. For the reasons stated below, Plaintiffs Motion is DENIED and AT&T's Motion is GRANTED.*fn1

OPINION

As a threshold matter, the Court must determine whether it has jurisdiction over this action. This action was removed to federal court by AT&T under the Class Action Fairness Act ("CAFA"), 28 U.S.C. § 1332(d)(2), which states:

The district courts shall have original jurisdiction of any civil action in which the matter in controversy exceeds the sum or value of $5,000,000, exclusive of interest and costs and is a class action in which-(A) any member of a class of plaintiffs is a citizen of a State different from any defendant;

Both parties concede that AT&T has met the minimal diversity threshold. However, Plaintiffs argue that this matter should be remanded to state court based on either the home state exception or the local controversy exception to CAFA. Both of these exceptions require that at least two-thirds of the members of all proposed plaintiff classes in the aggregate are citizens of the state in which the action was originally filed. See 28 U.S.C. §§ 1332(d)(4)(A)-(B).

Plaintiffs bear the burden of proving that two-thirds of the members of all proposed plaintiff classes are citizens of California.*fn2 See Serrano v. 180 Connect, Inc., 478 F.3d 1018, 1024 (9th Cir. 2007) ("[T]he objecting party bears the burden of proof as to the applicability of any express statutory exception under §§ 1332(d)(4)(A) and (B).") Plaintiffs have failed to meet this 2 burden. The only evidence Plaintiffs have submitted with regard to 3 the number of employees who are citizens of California was several 4 declarations by the named plaintiffs discussing their beliefs about 5 the citizenship of roughly 125 of their co-workers. Plaintiffs 6 neither lay an adequate foundation for this knowledge nor do they 7 establish that this sample of workers is representative of the 8 potential class of 1,308 workers. Because Plaintiffs have not met 9 their burden of proof, their Motion to Remand is denied.

Plaintiffs have also failed to state a claim under California Labor Code § 2180. Rule 12(b)(6) permits a court to dismiss a case for "failure to state a claim upon which relief can be granted." "Dismissal is proper under Rule 12(b)(6) if it appears beyond doubt that the plaintiff can prove no set of facts to support his claims." Manshardt v. Fed. Judicial Qualifications Comm., 408 F.3d 1154, 1156 (9th Cir. 2005).

Rule 8 of the Federal Rules of Civil Procedure requires plaintiffs to present "a short and plain statement of a claim showing that the pleader is entitled to relief." Under Bell Atlantic Corp. v. Twombly, -- U.S. --, 127 S.Ct. 1955, 1964-66 (2007), plaintiffs are required to allege sufficient facts "to raise a right to relief above the speculative level."

In Twombly, the Supreme Court clarified that in order to survive a motion to dismiss for failure to state a claim, a plaintiff must allege "enough facts to state a claim to relief that is plausible on its face." It is not enough, the Supreme Court held, that a claim to relief may be "conceivable;" rather, the plaintiffs must "nudge[] their claims across the line from conceivable to plausible. . . ." 2

Plaintiffs, employees or former employees of defendant Irish Construction and/or Irish Communication Company, allege that AT&T violated California Labor Code Section 2810, which makes it unlawful for a person or entity to enter into an agreement with a "construction, farm labor, garment, janitorial, or security guard contractor," where the person or entity "knows or should now" that the agreement "does not include funds sufficient to allow the contractor to comply with all applicable" wage and hour laws. See Cal. Lab. Code § 2810(a).

Plaintiffs' allegations against AT&T for alleged violations of Section 2810 are set forth in paragraphs 23-24 and 80-88 of the Complaint. Only three of these paragraphs purport to set forth "facts" to support the claim:

* Paragraph 23. During the respective periods that PLAINTIFFS and members of the proposed class were "aggrieved employees" of Defendant IRISH, AT&T and Doe Defendants 1-750 (collectively "2810 Defendants") entered into construction contracts with IRISH where they knew or should have known that the contracts did not contain sufficient funds to meet labor standards. The 2810 Defendants, including AT&T, violated Labor Code § 2810(a) and failed to meet their rebuttable presumption under that Labor Code section that their contracts contain sufficient funds because they failed to complete the contract requirements of Labor Code § 2810(d), specifically items 3-9. Further, Defendant AT&T was made aware of the wage violations by Plaintiff Marvin Lake and was interviewed by AT&T representatives about the wage violations, but failed to act to protect the workers under the contract.

* Paragraph 24. The 2810 Defendants' failure to include the items in the contract required by Labor Code § 2810, and failure to inquire as to the pay rates and schedules of IRISH employees resulted in economic harm to the aggrieved employees of IRISH. The allegations of paragraphs 13 to 23 serve as predicate unlawful acts for the purpose of recovery under Labor Code § 2810. PLAINTIFFS allege that they and proposed class members were third party beneficiaries of such contracts and suffered economic harm and injury in fact pursuant to the 2810 Defendants' failure to comply with Labor Code § 2810.

* Paragraph 81. AT&T and DOE Defendants entered into contracts for construction labor services with IRISH where they knew or should have known the contract or agreement did not include funds sufficient to allow the contractor to comply with all applicable local, state, and federal laws or regulations governing the labor or services to be provided. AT&T was specifically aware of the failure to pay all wages because they contacted ...


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