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Charles Smith, Craig andrade, Darryl Shaw, and Gary v. Dreyer's Grand Ice Cream

IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF CALIFORNIA


February 14, 2012

CHARLES SMITH, CRAIG ANDRADE, DARRYL SHAW, AND GARY ELIZARREY, ON BEHALF OF THEMSELVES AND OTHERS SIMILARLY SITUATED,
PLAINTIFFS,
v.
DREYER'S GRAND ICE CREAM, INC., DBA NESTLE DREYER'S ICE CREAM COMPANY, AND DOES 1 THROUGH 50, INCLUSIVE DEFENDANTS.

ORDER GRANTING PLAINTIFFS' MOTION TO REMAND

I. INTRODUCTION

Plaintiffs Charles Smith, Craig Andrade, Darryl Shaw, And Gary Elizarrey (collectively, "Plaintiffs") brought this putative class 19 action in Alameda County Superior Court alleging that Defendants 20 Dreyer's Grand Ice Cream, Inc., dba Nestle Dreyer's Ice Cream 21 Company ("Defendant"), and Does 1 through 50 failed to pay wages 22 and provide meal periods as required by California law. ECF No. 2 Ex. 1 ("Compl."). Defendant subsequently removed the action to 24 federal court. ECF No. 1 ("Not. of Removal."). Now before the 25 Court is Plaintiffs' Motion to Remand this action back to state 26 court. ECF No. 7 ("Mot."). The Motion is fully briefed. ECF Nos. 27 17 ("Opp'n"), 20 ("Reply"). Pursuant to Civil Local Rule 7-1(b), 28 the Court finds the motion suitable for determination without oral argument. For the following reasons, the Court GRANTS Plaintiffs' Motion and REMANDS this action to the Superior Court of the State 3 of California in and for the County of Alameda. 4 5

II. BACKGROUND

Defendant is a Delaware Corporation which delivers Nestle and Dreyer's ice cream products nationwide, including in the state of California. Compl. ¶ 4. Plaintiffs are current or former delivery 9 or route drivers for Defendant at its Hayward, California location. Id. ¶ 3. Plaintiffs are all California residents. Id. Plaintiffs court 11 allege that Defendant: (1) fails to provide Plaintiffs with meal breaks as required by California law; (2) automatically deducts thirty minutes from Plaintiffs' hours worked every day, denying tates D Plaintiffs wages for all hours worked; and (3) fails to provide Plaintiffs with a second meal period when they work more than 10 hours per day. Id. ¶¶ 8-12.

On September 8, 2011, Plaintiffs filed this putative class

18 action in Alameda County Superior Court on behalf of themselves and 19 all other current and former delivery drivers employed by Defendant 20 in the state of California. Id. ¶ 13. Plaintiffs' Complaint 21 alleges seven statutory causes of action arising under California 22 law: (1) failure to provide meal periods in violation of California 23 Labor Code § 226.7; (2) & (3) failure to pay earned wages in 24 violation of California Labor Code §§ 204, 216; (4) failure to pay 25 minimum wage in violation of California Labor Code § 1194; (5) 26 penalty for failure to provide accurate wage statements in 27 violation of California Labor Code § 226; (6) penalty for failure 28 to pay unpaid wages to severed employees in violation of California Labor Code §§ 201, 202 and 203; and (7) unfair competition and 2 unfair business practices in violation of California Labor Code § 17200. Id. ¶¶ 20-61. Plaintiffs do not assert any federal causes 4 of action. 5

On October 26, 2011, Defendant removed this action to federal 6 court pursuant to 28 U.S.C. §§ 1331 and 1441, claiming that the Court could assert federal question jurisdiction. Specifically, Defendant argued that Plaintiffs' claims are preempted by Section 301 of the Labor Management Relations Act ("LMRA"), 29 U.S.C. § 185, because they require substantial interpretation of siX provisions of a collective bargaining agreement ("CBA") governing the terms and conditions of Plaintiffs' employment. Not. of Removal at 7. Defendants' Notice of Removal does not explain why or how Plaintiffs' claims will require interpretation of the CBA.

Plaintiffs subsequently moved to remand and sought attorney's fees for the cost incurred as a result of the removal.

III. LEGAL STANDARD

A complaint originally filed in state court may be removed to 20 federal court within thirty days of service on the defendant. 28 21 U.S.C. §§ 1441(a), 1446(b). On a motion to remand, a defendant 22 bears the burden of showing that a federal court would have 23 jurisdiction from the outset; in other words, that removal was 24 proper. Gaus v. Miles, Inc., 980 F.2d 564, 566 (9th Cir. 1992). 25 Courts "strictly construe the removal statute against removal 26 jurisdiction," and "[f]ederal jurisdiction must be rejected if 27 there is any doubt as to the right of removal in the first 28 instance." Id., see also Plute v. Roadway Package Sys., Inc., 141 F. Supp. 2d 1005, 1008 (N.D. Cal. 2001)("any doubt is resolved in 2 favor of remand"). A district court's subject matter jurisdiction 3 is determined on the basis of the complaint at time of removal, not 4 as subsequently amended. Sparta Surgical Corp. v. Nat'l Ass'n of Secs. Dealers, Inc., 159 F.3d 1209, 1213 (9th Cir. 1998). 6

IV. DISCUSSION

A. Preemption Under Section 301 of the LMRA Plaintiffs' Motion turns on whether the LMRA preempts Plaintiffs' state law claims. Section 301 of the LMRA vests federal jurisdiction over "[s]uits for violation of contracts between an employer and a labor organization representing employees in an industry affecting commerce[.]" 29 U.S.C. § 185(a). The Supreme Court has expanded the preemptive scope of Section 301 to cases for which resolution "is substantially dependent upon analysis of the terms of [a CBA.]" Allis-Chambers Corp. v. Lueck, 471 U.S. 202, 220 (1985). 18

However, "mere consultation of the CBA's terms, or a 19 speculative reliance on the CBA will not suffice to preempt a state 20 law claim." Humble v. Boeing Co., 305 F.3d 1004, 1008 (9th Cir. 21 2002). "[A]s long as the state-law claim can be resolved without 22 interpreting the agreement itself, the claim is 'independent' of 23 the agreement for § 301 pre-emption purposes." Cramer v. Consol. 24 Freightways, Inc., 255 F.3d 683, 690 (9th Cir. 2001). The Ninth 25 Circuit has "stressed that, in the context of § 301 complete 26 preemption, the term 'interpret' is defined narrowly - it means 27 something more than 'consider,' 'refer to,' or 'apply.'" Balcorta 28 v. Twentieth Century-Fox Film Corp., 208 F.3d 1102, 1108 (9th Cir. 2 2000). enacted by state legislatures. Humble, 305 F.3d at 1007. 5

Accordingly, a claim brought on the basis of a state law right that 6 is independent of the rights provided for under a CBA is not 7 preempted, even if the grievance arises under the same set of facts 8 that could be pursued under the CBA. Livadas v. Bradshaw, 512 U.S. 9 Section 301 is not intended to trump substantive labor laws 107, 123-24 (1994). "When the meaning of the [CBA] terms is not 10 the subject of dispute, the bare fact that a [CBA] will be consulted in the course of state law litigation plainly does not require the claim to be [preempted]." Id. at 124.

The Ninth Circuit has applied these principles in circumstances similar to the one at the bar. In Valles v. Ivy Hill Corporation action, a group of employees challenged their employer's meal period policy under the California Labor Code. The Ninth Circuit 18 rejected the employer's preemption arguments, concluding that 19 "[b]ecause the employees have based their meal period claim on the 20 protection afforded them by California state law, without any 21 reference to expectations or duties created by their [CBA], the 22 claim is not subject to preemption[.]" Valles, 410 F.3d at 1082 23 Defendants' preemption arguments fare no better than those 25 asserted in Valles. The Court addresses each below. 26 In their third cause of action for violation of California Labor Code § 204, Plaintiffs assert that Defendants failed to pay , 410 F.3d 1071 (9th Cir. 2005), as in the instant

(internal quotations and citations omitted). 24

B. Plaintiffs' Overtime Claim them premium pay for overtime work as a result of the fact that Plaintiffs were denied their first and second meal periods. Compl. ¶ 33. Defendant argues that this constitutes an artfully pled 4 claim for breach of a CBA since the CBA, not state law, governs 5 Plaintiffs' overtime claims. Opp'n at 5-7. Defendant specifically 6 points to California Labor Code § 514, which provides that California Labor Code § 510, which establishes a right to overtime 8 pay, does not apply to an employee covered by a valid collective 9 bargaining agreement. 10 raised by Defendant in Gregory v. SCIE, LLC, 317 F.3d 1050 (9th Cir. 2003). In Gregory, the Ninth Circuit found that the plaintiff's overtime claims were not preempted by the LMRA, even though he was covered by a CBA. 317 F.3d at 1053. The Ninth Even assuming the CBA provides premium wage rates for over-time, the question here is the same as that raised by [California Labor Code] Section 510: whether when overtime is paid under the CBA it is paid for all overtime hours worked, as required by California law.

This is a question of interpretation of state law, not of the CBA, that we leave to the state court.

Id. A number of district courts have adopted the Ninth Circuit's 22 reasoning in Gregory in similar contexts. See Avalos v. Foster 23 Andino v. Kaiser Found. Hosps., No. C 11-04152 CW, 2011 U.S. Dist. 25 Accordingly, the Court finds that resolution of Plaintiffs' 27 third cause of action would not require an interpretation of the 28 CBA and, as such, would not trigger LMRA preemption. The Ninth Circuit rejected arguments identical to the ones Circuit explained:

Poultry Farms, 798 F. Supp. 2d 1156, 1162-1163 (E.D. Cal. 2011); 24 LEXIS 135411, 8-9 (N.D. Cal. Nov. 23, 2011). 26 3 claims cannot be adjudicated without interpreting a number of 4 distinct provisions in the CBA. Defendant first argues that 5

C. Plaintiffs' Meal Period Claims

Additionally, Defendant argues that Plaintiffs' meal period

Plaintiffs' meal period claims cannot be adjudicated without 6 interpreting CBA provisions that guarantee drivers 40 hours of work 7 per week and a full day's pay whenever a driver works any part of a 8 day. Oppn'n at 7. Defendant reasons that, under these CBA 9 provisions, a driver may be paid for all hours worked, even if a 10 Defendant argues that, in this situation, Plaintiffs are really alleging a violation of the CBA because there would be no state law violation. Id.

The Court disagrees. First, the Complaint does not seek damages for instances in which an employee received premium pay for time not worked, it only seeks damages for violations of the California Labor Code. Second, Defendant does not explain how the 18 guaranteed pay provisions in the CBA are ambiguous or would require 19 interpretation by the Court. A court may need to refer to these 20 provisions to calculate damages, but such considerations are 21 insufficient to support removal. See Livadas, 512 U.S. at 125 22 ("the mere need to 'look to' the [CBA] for damages computation is 23 no reason to hold the state-law claim defeated by § 301"). 24 25 meal periods will require an interpretation of Section 9 of the 26 CBA. Opp'n at 8. Section 9 provides that the "Employer may 27 establish a work week consisting of four (4) ten (10) hour days" 28 and that the Employer "will not employ an employee for a work 30-minute meal period was not taken but was deducted. Id. at 10.

Defendant also argues that Plaintiffs' claim for missed second period of more than (10) hours per day without providing the 2 employee with a second meal period of no less than thirty (30) 3 minutes, except that if the total hours worked are no more than 4 twelve (12) hours, the second (2nd) meal period may be waived by 5 mutual consent[.]" Id. 6

7 fails to identify any ambiguity in the CBA which would require 8 interpretation by the Court. Further, Plaintiffs do not allege a 9 violation of Section 9 in their Complaint. Plaintiffs allege that which prohibits employers from requiring employees to work for a period of "more than ten (10) hours per day without providing the employee with a second meal period of not less than 30 minutes[.]"

Compl. ¶ 22. The fact that the requirements of Wage Order No. 9-15 512 U.S. at 123 ("[I]t is the legal character of a claim, as 'independent' of rights under the [CBA] (and not whether a 18 grievance arising from 'precisely the same set of facts' could be 19 pursued) that decides whether a state cause of action may [be 20 preempted]." (internal citations omitted)). 21

Defendant retains the right to direct and schedule the workforce, 25 must be interpreted to adjudicate Plaintiffs' allegation that Defendant underestimates the travel and delivery time of each route 27 and fails to schedule time for meal and rest breaks. Opp'n at 9.

Specifically, Defendant argues that the Court will need to Defendant's argument is unavailing. Defendant once again Defendant violated Section 11 of California Wage Order No. 9-2001, 2001 and the CBA overlap does not warrant removal. See Livadas,

D. Plaintiffs' Allegations Regarding Scheduling and Routing

Results

Defendant contends Section 2 of the CBA, which provides that interpret Section 2 to determine whether Defendant's scheduling 2 methodology complies with the terms of the CBA. Id. This argument 3 borders on the frivolous. Section 2 has no bearing on Plaintiffs' 4 claims since a management rights clause cannot possibly exempt an 5 employer from complying with mandatory state laws. Further, Defendant's argument distorts Plaintiffs' claims. Plaintiffs 7 allege that Defendant's scheduling practices resulted in a 8 violation of the California Labor Code, not a violation of the CBA. 9 Finally, Defendant argues that the Court will need to interpret the CBA in order to adjudicate Defendant's affirmative defense to Plaintiffs' fifth and sixth causes of action, which are brought under California Labor Code Sections 226 and 203, respectively. Opp'n at 11. Employees are entitled to recover damages for "knowing and intentional" violations of Section 226, Cal. Labor Code § 226(e), and for "willful[]" violations of Section 203, id. § 203(a). Defendant asserts that any violations of Defendant's reasonable interpretation of the CBA. Opp'n at 11-12. 20 Defendant's response to Plaintiffs' fifth and sixth causes of 22 action will require an analysis of the CBA. Id. 23 24 provisions of the CBA the Court would need to interpret in order to 25 assess Defendant's affirmative defense. Second, Defendant's 26 liability under Section 226 and 203 would turn on an analysis of Third, as the Supreme Court and Ninth Circuit have repeatedly held, E. Defendant's Affirmative Defense Sections 226 and 203 were made in good faith and were based on 19 Accordingly, Defendant reasons that the Court's adjudication of 21 The Court disagrees. First, Defendant fails to identify what Defendant's state of mind, not an interpretation of the CBA. 28 LMRA preemption is not warranted merely because a Defendant refers 2 to a CBA in mounting a defense. See Caterpillar, Inc. v. Williams, 3 482 U.S. 386, 398-399 (1987); Detabali v. St. Luke's Hosp., 482 4 F.3d 1199, 1203 (9th Cir. 2007); Cramer, 255 F.3d at 691. 5 For these reasons, and the reasons set forth in Sections IV.A- D above, the Court finds that Plaintiffs' claims do not require an 7 interpretation of the CBA and, as such, Defendant's removal of this 8 action to federal court was improper. Accordingly, the Court REMANDS this action to Alameda Superior Court. 10

F. Attorney's Fees

Under 28 U.S.C. § 1447(c), when a federal court remands a case, "it may require payment of just costs and any actual expenses, including attorney fees, incurred as a result of removal." "Absent unusual circumstances," courts may award attorney's fees under § 1447(c) where the removing party "lacked an objectively reasonable basis for seeking removal." Martin v. Franklin Capital Corp., 546 U.S. 132, 141 (2005). 18

The Court finds that an award of attorney's fees would be 19 inappropriate in the instant action. While Defendant's arguments 20 in support of removal are flawed in several respects, the Court 21 does not find that they lack an objectively reasonable basis. 22

Further, the arguments advanced in Defendant's opposition papers 23 are consistent with its position in the Notice of Removal, 24 suggesting that Defendant researched the issue before following 25 through with removal. 26

V. CONCLUSION

For the foregoing reasons, Plaintiffs Charles Smith, Craig Andrade, Darryl Shaw, and Gary Elizarrey's motion to remand is GRANTED. The Court REMANDS this action to the Superior Court of 5 the State of California in and for the County of Alameda. 6 7

IT IS SO ORDERED.

UNITED STATES DISTRICT JUDGE

20120214

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