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Pacific Gas & Electric Co. v. California Labor and Workforce Development Agency

United States District Court, E.D. California

March 24, 2017

PACIFIC GAS & ELECTRIC COMPANY, Plaintiff,
v.
CALIFORNIA LABOR AND WORKFORCE DEVELOPMENT AGENCY; et al., Defendants.

          ORDER

         This case comes before the court on defendants' motion to dismiss the suit brought by Pacific Gas & Electric Company (“PG&E”) for injunctive and declaratory relief regarding a labor dispute. (ECF No. 7.) PG&E opposes. (ECF No. 9.) The court held a hearing on November 18, 2016, at which Joshua Kienitz appeared for PG&E and William Reich appeared for defendants. For reasons explained below, the court GRANTS defendants' motion to dismiss, with leave to amend.

         I. BACKGROUND

         On March 28, 2007, the security officers' union filed a grievance against PG&E, alleging PG&E had failed to compensate the officers for their meal break time as required by their collective bargaining agreement (CBA). (Ex. C-3, PGE0066, Compl., ECF No. 1-1.) On February 3, 2010, while the arbitration of this grievance was pending, several PG&E security officers filed claims with the California Labor Commission, seeking the supplemental premium compensation that is mandated by California Labor Code section 226.7, which is applicable when workers are not provided 30 minute duty-free meal breaks. (Exs. J-1 to J-10, Compl., ECF No. 1-2.) Both the 2007 grievance and the 2010 claims concern meal breaks over the same time period. (Compl. ¶ 14.) The Labor Commission decided to defer processing the supplemental premium compensation claims until after resolution of the arbitration proceedings. (Compl. ¶ 21.)

         On August 10, 2010, the arbitrator found PG&E had failed to compensate the security officers for their meal breaks as provided by their CBA. (Ex. C-3, PGE0086.) The arbitrator retained jurisdiction to determine the proper calculation of the compensation award if PG&E and the union were unable to resolve the matter independently. (Id.)

         On July 26, 2011, after PG&E and the union were unable to reach an agreement, the matter returned to the arbitrator. (Ex. C-2, PGE0051.) The arbitrator awarded the security officers compensation for their meal break time as required by their CBA, but did not decide whether the security officers are entitled to supplemental premium compensation under California Labor Code section 226.7. (Id. at PGE0061-63.) The District Court for the Northern District of California confirmed the arbitrator's award. (Compl. ¶ 12.)

         On January 15, 2013, the California Labor Commission served PG&E with a Notice of Claim Filed for the security officers' supplemental premium compensation under California Labor Code section 226.7. (Compl. ¶ 14; see also Id . Exs. B-1 to B-176, K-1 to K-10.) Between February 2013 and June 2016, PG&E and staff at the Labor Commission engaged in numerous discussions regarding this matter. (See, e.g., Exs. C-F, I, O, Compl. ¶¶ 25-26.)

         On July 19, 2016, PG&E filed its complaint in this court seeking declaratory and injunctive relief, alleging defendants' claims on behalf of the security officers for supplemental premium compensation (1) are pre-empted by section 301 of the Labor Management Relations Act (“LMRA”) (Compl. ¶ 74, 82); (2) violated PG&E's right to procedural due process under the Fourteenth Amendment to the U.S. Constitution and Article I, section 7(a) of the California Constitution (Compl. ¶¶ 71, 79); and (3) violate various substantive rights established by state law (see Compl. ¶¶ 28-35, 72-73, 80-81).

         On September 8, 2016, defendants filed a motion to dismiss, contending the court lacks subject matter jurisdiction and the due process claim is not ripe. (Defs.' Mot. to Dismiss (“MTD”), ECF No. 7.) PG&E opposes defendants' motion (Pl.'s Opp'n, ECF No. 9), and defendants have replied (Defs.' Reply, ECF No. 12).

         For the following reasons, defendants' motion to dismiss is GRANTED.

         II. LEGAL STANDARD

         Federal courts are courts of limited jurisdiction and, until proven otherwise, cases lie outside their jurisdiction. Kokkonen v. Guardian Life Ins. Co. of America, 511 U.S. 375, 377-78 (1994). Lack of subject matter jurisdiction may be challenged by either party or raised sua sponte. Fed. R. Civ. P. 12(b)(1); Fed.R.Civ.P. 12(h)(3); see also Ruhrgas AG v. Marathon Oil Co., 526 U.S. 574, 583-84 (1983). A Rule 12(b)(1) jurisdictional attack may be either facial or factual. White v. Lee, 227 F.3d 1214, 1242 (9th Cir. 2000). In a facial attack such as this one, the complaint is challenged as failing to establish federal jurisdiction, even assuming all the allegations are true and construing the complaint in the light most favorable to plaintiff. See Safe Air for Everyone v. Meyer, 373 F.3d 1035, 1039 (9th Cir. 2004).

         III. DISCUSSION

         PG&E claims this court has jurisdiction based on the existence of a federal question. (Compl. ¶ 8.) Two of PG&E's claims for relief are premised on federal law, and the remaining claims are premised on state law. The federal claims are (1) section 301 of the LMRA pre-empts the security officers' claims, and (2) defendants have violated PG&E's right to procedural due process as guaranteed by the Fourteenth Amendment of the United States Constitution. The court analyzes each of these claims in turn.

         A. LMR ...


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