The opinion of the court was delivered by: M. James Lorenz United States District Court Judge
ORDER DENYING DEFENDANT'S MOTION TO DISMISS, FOR A MORE DEFINITE STATEMENT AND/OR TO STRIKE AMENDED CLASS ACTION COMPLAINT
In this putative class action, Plaintiff seeks to recover penalties pursuant to the California Labor Code Private Attorney General Act of 2004 ("PAGA"). Defendant filed a motion to dismiss for failure to state a claim pursuant to Federal Rule of Civil Procedure 12(b)(6) and for a more definite statement of the class definition pursuant to Rule 12(e) and/or to strike the class allegations pursuant to Rule 12(f). Plaintiff filed an opposition and Defendant replied. For the reasons which follow, Defendant's motion is DENIED in its entirety.
Plaintiff Nykeya Kilby was employed by Defendant CVS Pharmacy, Inc. as a cashier. She claims that California Industrial Welfare Commission's Order No. 7-2001 Regulating Wages, Hours and Working Conditions in the Mercantile Industry ("IWC" and "Wage Order 7-2001" respectively) required Defendant to provide her and others similarly situated with a suitable seat to use while working, which Defendant failed to do. She filed a putative class action in this court based on diversity jurisdiction pursuant to 28 U.S.C. Section 1332(d). In her first amended complaint she alleged that the pertinent provision of Wage Order 7-2001 is incorporated into California Labor Code Section 1198 and that under PAGA, California Labor Code Section 2699 provides for private enforcement by an aggrieved employee on his or her behalf as well as on behalf of other current and former employees. Furthermore, Plaintiff alleges that section 2699's penalty provision applies.
Defendant filed a motion to dismiss the action pursuant to Federal Rule of Civil Procedure 12(b)(6). A Rule 12(b)(6) motion tests the sufficiency of the complaint. Navarro v. , 250 F.3d 729, 732 (9th Cir. 2001). Dismissal is warranted under Rule 12(b)(6) where the complaint lacks a cognizable legal theory. Robertson v. Dean Witter Reynolds, Inc.,749 F.2d 530, 534 (9th Cir. 1984); see Neitzke v. Williams, 490 U.S. 319, 326 (1989) ("Rule 12(b)(6) authorizes a court to dismiss a claim on the basis of a dispositive issue of law"). Alternatively, a complaint may be dismissed where it presents a cognizable legal theory yet fails to plead essential facts under that theory. Robertson, 749 F.2d at 534. "While a complaint attacked by a Rule 12(b)(6) motion to dismiss does not need detailed factual allegations, a plaintiff's obligation to provide the grounds of his entitlement to relief requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do. Factual allegations must be enough to raise a right to relief above the speculative level." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007) (internal quotation marks, brackets and citations omitted).
In reviewing a motion to dismiss under Rule 12(b)(6), the court must assume the truth of all factual allegations and must construe them in the light most favorable to the nonmoving party. Cahill v. Liberty Mut. Ins. Co., 80 F.3d 336, 337-38 (9th Cir. 1996). Legal conclusions, however, need not be taken as true merely because they are cast in the form of factual allegations. Roberts v. Corrothers, 812 F.2d 1173, 1177 (9th Cir. 1987); W. Mining Council v. , 643 F.2d 618, 624 (9th Cir. 1981). Similarly, "conclusory allegations of law and unwarranted inferences are not sufficient to defeat a motion to dismiss." Pareto v. Fed. Deposit Ins. Corp., 139 F.3d 696, 699 (9th Cir. 1998).
Defendant argues that the action should be dismissed because the pertinent provision of Wage Order 7-2001 is not incorporated into Labor Code Section 1198; and that if it is, the penalty provision of Labor Code Section 2699 does not apply. Furthermore, it maintains that the pertinent provision of Wage Order 7-2001 is invalid.
With respect to the latter argument, Defendant contends that California Labor Code Section 1173 requires the IWC, before adopting any new rules, regulations or policies, to consult with the California Occupational Safety and Health Standards Board to determine areas of potential overlap. Defendant argues that the IWC did not comply with this requirement because it delegated too much to the staff. As Defendant acknowledges (Mot. at 16), this argument was rejected in California Manufacturers Association v. Industrial Welfare Commission, 109 Cal. App. 3d 95, 122-23 (1980), which upheld IWC's wage orders against the same challenge. Defendant's argument that California Manufacturers Association was wrongly decided is rejected.
Defendant also claims that the action should be dismissed because the pertinent provision of Wage Order 7-2001 is not incorporated into Labor Code Section 1198. Section 1198 provides:
The maximum hours of work and the standard conditions of labor fixed by the commission shall be the maximum hours of work and the standard conditions of labor for employees. The employment of any employee for longer hours than those fixed by the order or under conditions of labor prohibited by the order is unlawful.
The provision of Wage Order 7-2001 on which Plaintiff relies for this action states, "All working employees shall be provided with suitable seats when the nature of the work reasonably permits the use of seats." (Pl.'s Ex. 1, Wage Order 7-2001 §14(A).)
The parties disagree on the interpretation of section 1198. Defendant argues that section 1198 renders unlawful only employment for longer hours than fixed by the wage orders and those practices which the orders prohibit. Because, according to Defendant, section 14(A) of the wage order is not couched in prohibitory language, it is not rendered unlawful by section 1198. Plaintiff argues that because the wage order mandates the use of seats when appropriate, not providing them for employees when required is prohibited. Neither party cites any binding authority interpreting this statute in the context of Wage Order 7-2001, Section 14(A) or an analogous wage order, and the court is not aware of any. In interpreting a statute, a court begins its inquiry by examining its language, giving it "a plain and commonsense meaning." Flannery v. Prentice, 26 Cal.4th 572, 577-78 (2001). "In doing so, however, we do not consider the statutory language in isolation. Rather, we look to the entire substance of the statute in order to determine the scope and purpose of the provision. We avoid any construction that would produce absurd consequences." Id. at 578 (internal quotation marks, ellipses and citations omitted). In addition, "in light of the remedial nature of the legislative enactments authorizing the regulation of wages, hours and working conditions for the protection and benefit of employees, the statutory provisions are to be liberally construed with an eye to promoting such protection." Indus. Welfare Comm'n v. Super. Ct. (Cal. Hotel & Motel Ass'n), 27 Cal.3d 690, 702 (1980).
Section 1198 renders unlawful employment "for longer hours then those fixed by the order or under conditions of labor prohibited by the order." The statute does not limit its application to those provisions which are couched in the negative to prohibit a practice. Although Defendant is correct that permissive provisions appear not to be covered by the statute Mot. at 6, citing Wools v. Super. Ct. (Turner), 127 Cal. App. 4th 197, 208-09 (2005) ("may not" is prohibitory, but "may" is permissive)), this is irrelevant because section 14(A) is not permissive. It is a part of an order which states what employers "shall" do. It is implied that failing to do what the provision orders is prohibited. To interpret the Wage Orders as not prohibiting, and therefore allowing, any work condition unless the provision is phrased in the negative, i.e., using the word "not," would be contrary to common sense. Accordingly, section 1198 renders unlawful violation of Wage Order 7-2001, Section 14(A).
The next issue is whether the default penalties of Labor Code Section 2699(f) apply in this case. Section 2699(f) includes a default penalty which applies to Labor Code provisions for which a penalty is not specifically provided: "For all provisions of this code except those for which a civil penalty is specifically provided, there is established a civil penalty for a violation of these provisions, as follows . . .."
The parties disagree on the interpretation of this provision. Defendant argues that because Wage Order 7-2001 contains its own penalty provision, that provision applies and not the default penalties specified in section 2699(f). Plaintiff argues that PAGA default penalties apply because the Labor Code does not specifically include a penalty for section 1198 violations. Again, ...