United States District Court, C.D. California
CIVIL MINUTES - GENERAL
CHRISTINA A. SNYDER, District Judge.
Proceedings: (IN CHAMBERS): PLAINTIFF'S EX PARTE APPLICATION FOR A TEMPORARY RESTRAINING ORDER (dkt. 14, filed June 30, 2015)
On June 18, 2015, plaintiff WinWin Logistics, Inc. ("WinWin"), a corporation engaged in the business of port drayage trucking logistics, filed this lawsuit against defendant Julie A. Su, in her official capacity as Labor Commissioner of the State of California, California Department of Industrial Relations, Division of Labor Standards Enforcement (the "Labor Commissioner"). Dkt. 1. In brief, the complaint alleges that ongoing Division of Labor Standards Enforcement ("DLSE") enforcement actions against WinWin violate WinWin's right to procedural due process guaranteed by the Fourteenth Amendment to the United States Constitution and Article I, Section 7(a) of the California Constitution. The complaint seeks declaratory and injunctive relief, as well as damages.
On June 30, 2015, plaintiff filed an ex parte application for a temporary restraining order. Dkt. 14 ("TRO"). Plaintiff seeks to enjoin the Labor Commissioner and DLSE "from performing any activity in adjudicating claims against WinWin, including holding hearings, making decisions, issuing orders and/or conducting enforcement activities, unless and until such time as an impartial forum... is provided at DIR/DLSE expense." TRO at 15. The Labor Commissioner filed an opposition to plaintiff's application on July 2, 2015, dkt. 19., to which WinWin replied on July 2, 2015, dkt 24. Having carefully considered the parties' arguments, the Court finds and concludes as follows.
In California, "[i]f an employer fails to pay wages in the amount, time or manner required by contract or by statute, the employee has two principal options." Sonic-Calabasas A, Inc. v. Moreno, 57 Cal.4th 1109, 1127 (2013) cert. denied, 134 S.Ct. 2724 (2014). First, "the employee may seek judicial relief by filing an ordinary civil action against the employer for breach of contract and/or for the wages prescribed by statute." Id. at 1127-28. Alternately, "the employee may seek administrative relief by filing a wage claim with the [California Labor] commissioner pursuant to a special statutory scheme codified in [Cal. Lab. Code] section 98 to 98.8." Id. at 1128. Section 98 sets forth remedial procedures for adjudicating wage claims, which are enforced by the DLSE under the direction of the Labor Commissioner. Post v. Palo/Haklar & Associates, 23 Cal.4th 942, 946 (2000).
The section 98 wage adjudication process "was added by legislation enacted in 1976  and is commonly known as the Berman' hearing procedure after the name of its sponsor." Sonic-Calabasas, 57 Cal.4th at 1127 (citations omitted). "A Berman hearing is conducted by a deputy [labor] commissioner, who has the authority to issue subpoenas... [and] is designed to provide a speedy, informal, and affordable method of resolving wage claims." Id. (citations omitted). An employer has the right to appeal an adverse ruling by the DLSE in a Berman hearing to the California Superior Court, where the appeal "shall be heard de novo." Cal. Lab. Code § 98.2 (a). In order to file such an appeal, the employer must first "post an undertaking with the reviewing court in the amount of the order, decision, or award." Id. § 98.2 (b).
As noted above, plaintiff WinWin is a corporation engaged in the business of port drayage trucking logistics. On September 25, 2012, Eduardo Ixpancoc, a truck driver employed by WinWin, filed a claim with the DLSE alleging that WinWin had misclassified him as an independent contractor, when he should have been classified as an employee (the "Ixpancoc Matter"). TRO at 3. On December 17, 2013, a Berman hearing was conducted before a DLSE Hearing Officer. Id. at 4. By order dated August 14, 2014, the DLSE Hearing Officer concluded that WinWin had indeed misclassified Ixpancoc, and awarded Ixpancoc $204, 323.48. Id; Madala Dec., Ex. 4 (August 14, 2014 Order).
WinWin timely appealed the DLSE decision in the Ixpancoc Matter and posted the requisite bond in late August 2014. TRO at 2; Kwak Dec. ¶ 4. That appeal remains pending before the Superior Court for the County of Los Angeles. Id.
Twenty-two additional misclassification claims-likewise filed by truck drivers against WinWin-are currently pending before the DLSE. TRO at 2. WinWin is also a codefendant, along with QTS, Inc. and several other trucking companies, in a class action alleging driver misclassification that is currently pending in California Superior Court. Id. at 3. Plaintiffs in the class action are represented by attorneys from the Wage Justice Center, a nonprofit organization. Id. at 4. Pursuant to a two year contract, the Wage Justice Center receives $250, 000.00 in annual funding from the DLSE to assist in the collection of judgments for amounts payable to workers and the state. Montealegre Decl. ¶¶ 4-8.
WinWin argues that the DLSE-which is expressly committed to attacking worker misclassification throughout California-cannot provide an impartial forum for the adjudication of the twenty-two pending misclassification claims. TRO at 1. WinWin further asserts that it "violates fundamental due process to require WinWin to bond adverse decisions from a highly biased tribunal (on pain of judgment), in order to reach what should be guaranteed in the first instance - a neutral forum for determining its liability (or lack thereof)." Id. at 10.
III. LEGAL STANDARD
The standards for issuing a temporary restraining order and a preliminary injunction are "substantially identical." Stuhlbarg Int'l Sales Co. v. John D. Brushy & Co., 240 F.3d 832, 839 n.7 (9th Cir. 2001). "A preliminary injunction is an extraordinary remedy never awarded as of right." Winter v. Natural Res. Def. Council, Inc., 555 U.S. 7, 24 (2008). "A plaintiff seeking a preliminary injunction must establish that he is likely to succeed on the merits, that he is likely to suffer irreparable harm in the absence of preliminary relief, that the balance of equities tips in his favor, and that an injunction is in the public interest." Winter, 555 U.S. at 20; Am. Trucking Ass'n, Inc. v. City of Los Angeles, 559 F.3d 1046, 1052 (9th Cir. 2009). Alternatively, "serious questions going to the merits' and a hardship balance that tips sharply toward the plaintiff can support issuance of an injunction, assuming the other two elements of the Winter test are also met." Alliance for the Wild Rockies v. Cottrell, 632 F.3d 1127, 1132 (9th Cir. 2011) (interpreting Winter ...