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Weltman v. Ortho Mattress

December 10, 2009

LEO WELTMAN, PLAINTIFF,
v.
ORTHO MATTRESS, INC., DEFENDANT.



The opinion of the court was delivered by: Hon. Jeffrey T. Miller United States District Judge

ORDER DECLINING TO EXERCISE SUPPLEMENTAL JURISDICTION OVER STATE LAW CLAIMS; DENYING MOTION FOR CLASS CERTIFICATION

In conjunction with Plaintiff Leo Weltman's motion for class certification, Plaintiff filed an ex parte application ("Application") seeking a threshold determination on the issue of supplemental jurisdiction over the state law class claims. On October 30, 2009 the court issued an order requesting additional briefing on the issue of supplemental jurisdiction. The issue of supplemental jurisdiction over the state law claims is now fairly joined. For the reasons set forth below, the court declines to exercise jurisdiction over the state law class claims and denies the motion for class certification as moot.

BACKGROUND

The Second Amended Complaint ("SAC"), filed on October 1, 2008, alleges eight causes of action for (1) Unfair Competition in Violation of Cal.Bus.&Prof. Code §17200; (2) Failure to Pay Overtime Wages in Violation of Cal.Lab.Code §§510 et seq.; (3) Failure to Provide Wages When Due in Violation of Cal.Lab.Code §203; (4) Failure to Provide Accurate Itemized Statements in Violation of Cal.Lab.Code §226; (5) Failure to Provide Meal and Rest Periods in Violation of Cal.Lab.Code §§226.7 and 512; (6) Failure to Indemnify in Violation of Cal.Lab.Code §2802; (7) Failure to Pay Compensation in Violation of 29 U.S.C. §201 et.seq.; and (8) Labor Code Private Attorney General Act, Cal.Lab.Code §2698. Plaintiff asserts federal question jurisdiction based upon the alleged violation of the Fair Labor Standards Act ("FLSA"), 29 U.S.C. §201, et seq., and supplemental jurisdiction pursuant to 28 U.S.C. §1367 over the seven state law causes of action. Plaintiff also alleges jurisdiction under the Class Action Fairness Act ("CAFA"), 28 U.S.C. §1332(d).*fn1

Ortho is a nationwide company that sells bedding products and mattresses with over 50 retail locations throughout California. (SAC ¶1, 2). During the Class Period, defined as the period from May 7, 2004 through the present, Ortho has employed in excess of 400 California salespersons. Ortho sells "big ticket" items, as identified in 29 C.F.R. §779.414, where "commission is the method of payment that has traditionally been used to pay salespersons wages." (Oppo. at p.1:27-28). The stores are generally staffed by a store manager and another salesperson three to four days a week, typically over the weekend; and staffed by a single employee during the middle of the week. (Spencer Decl. ¶3). When two employees are scheduled to work on the same day, they work staggered shifts, allowing the earlier arriving employee to leave work prior to closing. Id.

Plaintiff was hired by Ortho in March 2007 and continues in its employ. (SAC ¶2). Among other things, Plaintiff alleges that Ortho's employees were wrongfully classified as exempted commissioned salespersons and therefore entitled to statutory mandatory overtime provisions. (SAC ¶27-30). Under the allegedly uniform compensation structure adopted by Ortho, each Class member received a flat payment of $100 per day plus additional compensation pursuant to the Gross Profits program which was based on gross profits and not gross sales.

Plaintiff also claims that Ortho maintained a uniform wage statement policy which violated Cal.Lab.Code §226(a) because Ortho failed to provide employees with accurate wage statements showing the hours worked. The wage statements provided to Class Members failed to state the hours worked. (Locker Decl. ¶29). Plaintiff further claims that Ortho failed to reimburse employees for work-related mileage expenses and prohibited employees from taking a meal break when they worked alone at an Ortho store. (Locker Decl. ¶¶31-32).

In his motion for class certification, Plaintiff seeks to pursue the seven law state claims on a class-wide basis and to pursue the single federal claim on an individual basis. Prior to the hearing date on the motion for class certification, Plaintiff filed the Application seeking to clarify the scope of the court's supplemental jurisdiction over the state law claims. On October 20, 2009, the court requested additional briefing on the basis for this court's subject matter jurisdiction. The issues are now fairly joined for decision.

DISCUSSION

Supplemental Jurisdiction Over Class Claims

This court is authorized by 28 U.S.C. §1367(a) to exercise supplemental jurisdiction over state law claims whenever the relationship between the federal and state claims is such that they "form part of the same case or controversy under Article III of the United States Constitution." 28 U.S.C. §1367(a). However, 28 U.S.C. §1367(c) provides:

(C) The district courts may decline to exercise supplemental jurisdiction over a claim under subsection (a) if - -(2) the claim substantially predominates over the claim or claims over which the district court has original jurisdiction, 28 U.S.C. §1367(c). As noted by the Supreme Court, supplemental "jurisdiction is a doctrine of discretion." City of Chicago v. International College of Surgeons, 522 U.S. 156, 172 (1997). The court may decline to exercise jurisdiction over state law claims "depending on a host of factors... including the circumstances of the particular case, the nature of the state law claims, the character of the governing state law, and the relationship between the state and federal claims." Id. at 173; Executive Software v. U.S.Dist. Court, 24 F.3d 1545, 1555-57 (9th Cir. 1994) (holding that factors of economy, convenience, fairness and comity inform the court's decision to exercise supplemental jurisdiction).

The Claims

The only federal claim, brought individually and not as a class claim, alleges that Defendant wrongfully characterized him as exempt from overtime compensation. Plaintiff alleges that Defendant violated (1) Section 207(i) of FLSA by, among other things, paying him less than one and one half times the minimum wage or applying the commissioned salesperson exemption to Plaintiff and (2) Section 213(a)(1) by improperly characterizing the scope of employment as ...


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