Dittmar v. Costco Wholesale Corp.

          ORDER ON COSTCO'S MOTION TO DISMISS OR STRIKE

          HONORABLE LARRY ALAN BURNS UNITED STATES DISTRICT JUDGE

         This putative wage and hour class action arises out of Paula Dittmar and Pauline Tilton's employment with Costco. Costco has moved to dismiss or strike the First Amended Complaint. (Docket no. 52.) It argues: (1) Plaintiffs failed to allege facts sufficient to satisfy Fed.R.Civ.P. 23; (2) Tilton lacks standing to represent the Proposed Pharmacist Class; (3) Plaintiffs failed to plead facts supporting a Cal. Labor Code § 2802 claim; (4) Plaintiffs failed to plead a claim for conversion; (5) Plaintiffs failed to plead a violation of Cal. Labor Code §§ 221 and 223; (6) Plaintiffs' request for Cal. Labor Code § 225.5 penalties fails; (7) Plaintiffs lack standing to seek injunctive relief; (8) attorney's fees and costs cannot be recovered on meal and rest break clams; (9) Plaintiffs' claim under the unlawful prong of California's Unfair Competition Law (UCL), Cal. Bus. & Prof. Code § 17200, et seq., is improper to the extent that it relies on Cal. Labor Code §§ 226.7 and 512(a); and (10) Plaintiffs' claim for Cal. Labor Code § 203 penalties fails.

         Plaintiffs agree to remove references to their § 2802 claim, § 225.5 request, injunctive relief claim, and prayer for penalties under § 203. (Docket no. 54 at 2 n.1.)

         I. Request for Judicial Notice

         Costco's request for judicial notice (Docket no. 52-3) of an order granting a demurrer and motion to strike in Aguilar v. Marriot Int'l is GRANTED. See Reyn's Pasta Bella, LLC v. Visa USA, Inc., 442 F.3d 741, 746 (9th Cir. 2006) ("We may take judicial notice of court filings and other matters of public record.").

         II. Sufficiency of Class Allegations

         Coscto seeks dismissal of the class allegations, arguing that they don't sufficiently allege typicality, adequacy of representation, commonality, predominance, and superiority of class resolution. Plaintiffs argue that Costco's challenge to the sufficiency of the class allegations is premature. The Court agrees with Plaintiffs; each of Coscto's arguments are more appropriately reserved for a motion for class certification. See In re Wal-Mart Stores, Inc. Wage & Hour Litig., 505 F.Supp.2d 609, 615-16 (N.D. Cal. 2007) (finding that a motion to dismiss class allegations was premature where the defendant had not answered the complaint, discovery had not yet commenced, and no motion for class certification had been filed); Cholakyan v. Mercedes-Benz USA, LLC, 796 F.Supp.2d 1220, 1246 (C.D. Cal. 2011) (finding that a motion to strike class allegations was premature where defendant had not filed an answer and discovery had not begun). In the absence of discovery and the presentation of specific arguments from both parties concerning class certification, the Court lacks sufficient information to rule on the propriety of the class allegations. The allegations in the complaint are sufficient to survive Costco's motion to dismiss.

         III. Tilton's Standing to Represent Proposed Pharmacist Class

         Costco argues that Tilton doesn't have standing to represent the Proposed Pharmacist Class because she wasn't a pharmacist during the four years before this case was filed. (Docket no. 52 at 11.) Plaintiffs respond that Tilton was a pharmacist during the period. They explain "[a]lthough Tilton was promoted from pharmacist to manager, she continued working as a pharmacist, as did all of the managers of all of Costco's pharmacy departments." (Docket no. 54 at 20.) They offer to amend the complaint to clarify the issue. (Id.) The Court agrees with Costco that the First Amended Complaint suggests that Tilton wasn't a member of the Propose Pharmacist Class, so its motion to strike Tilton as a representative of that class is GRANTED. But, the Court will give Plaintiffs leave to amend to clarify Tilton's role during the relevant time period.

         IV. Conversion Claim

         The parties dispute whether Plaintiffs can maintain a conversion claim based on California Labor Code violations. Following several federal district court decisions, the Court previously held that they can't because the Labor Code provides an exclusive statutory remedy. (Docket no. 43 at 9.) Now the Plaintiffs have notified the Court of a second line of cases that contradict the Court's previous holding on the issue. (Docket no. 54 at 19 (citing Sims v. AT & T Mobility Servs. LLC, 955 F.Supp.2d 1110 (E.D. Cal. 2013).)

         "As a general rule, where a statute creates a right that did not exist at common law and provides a comprehensive and detailed remedial scheme for its enforcement, the statutory remedy is exclusive." Rojo v. Kliger, 52 Cal.3d 65, 79 (1990). Sims points out that employees were entitled to recover unpaid wages and overtime compensation at common law. 955 F.Supp.2d at 1117. Thus, it held, the Labor Code doesn't provide an exclusive statutory remedy. Id.; see also Alvarenga v. Carlson Wagonlit Travel, Inc., 2016 WL 466132, at *4 (E.D. Cal. Feb. 8, 2016); Rodriguez v. Cleansource, Inc., 2015 WL 5007815, at *9 (S.D. Cal. Aug. 20, 2015). After reviewing the Sims line of cases, the Court agrees that a cause of action for conversion of unpaid wages is viable. See also Dep't of Indus. Relations v. UI Video Stores, Inc., 55 Cal.App.4th 1084, 1096 (1997).

         Costco's motion to dismiss the conversion claim is denied. Mann v. Cty. of San Diego, 2015 WL 7458613, at *3 (S.D. Cal. Nov. 23, 2015) ("District courts retain inherent authority to revise interim or interlocutory orders any time before entry of judgment.").

         V. Plaintiffs' Cal. Labor Code §§ ...