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Heck v. Heavenly Couture, Inc.

United States District Court, S.D. California

June 16, 2017

CARLY HECK, an individual; SARA LUND, an individual; and ALLY ORTANEZ, an individual, Plaintiffs,
v.
HEAVENLY COUTURE, INC., a California Corporation, Defendant.

          ORDER RE MOTION TO DISMISS AND MOTION TO COMPEL ARBITRATION [DOC. NOS. 10 AND 11]

          Hon. Cathy Ann Bencivengo United States District Judge.

         This matter is before the Court on Heavenly Couture's motion to dismiss [Doc. No. 10] and motion for an order compelling arbitration and/or immediately staying civil action [Doc. No. 11]. The motions have been fully briefed and the Court deems them suitable for submission without oral argument. For the reasons set forth below, the motion to dismiss is GRANTED with leave to amend as to the FLSA claim, and the motion to compel arbitration and/or stay civil action is deemed moot and DENIED without prejudice. The Court declines to exercise supplemental jurisdiction over, and dismisses without prejudice to filing in state court, Plaintiffs' state law claims.

         FACTUAL BACKGROUND

         Plaintiffs Carly Heck, Sara Lund, and Ally Ortanez (collectively “Plaintiffs”) bring this hybrid collective action under the Fair Labor Standards Act, 29 U.S.C. § 201, et seq. (“FLSA”), and a class action, under Federal Rule of Civil Procedure (“FRCP”) Rule 23 for violations of California state law. Plaintiffs also bring a representative action for enforcement of California's Private Attorneys General Act (“PAGA”). Plaintiffs were non-exempt, hourly, in-store employees of Defendant Heavenly Couture, Inc., a California corporation which operates a chain of retail clothing stores. Plaintiffs allege Defendant forced Plaintiffs to work uncompensated regular and overtime hours. Plaintiffs also allege Defendant failed to provide state-law-mandated meal and rest breaks, and that Defendant attempted to conceal such conduct by failing to provide accurate wage statements. Plaintiffs allege Defendant maintains a policy requiring employees to work off the clock during breaks and meal periods, and that Defendant failed to compensate Plaintiffs for overtime hours worked as required by FLSA and California law. Plaintiffs allege Defendant's employment practices are in violation of the FLSA, the Code of Federal Regulations, the California Labor Code, the California Code of Regulations, California Industrial Wage Commission Wage Orders, and California's Unfair Competition Law, Cal. Bus. & Prof. Code § 17200, et seq.

         Plaintiffs originally filed this action in the San Diego Superior Court on October 11, 2016. Defendant filed a motion to compel arbitration in that action on January 13, 2017. [Doc. No. 11-2, ¶2.] Prior to the hearing scheduled for February 10, 2017 on that motion, the Plaintiffs dismissed their state court action without prejudice on January 31, 2017. [Doc. No. 11-2, ¶¶3-5.] Plaintiffs subsequently filed the current action in this Court on the same day with the additional cause of action under the FLSA.

         Defendant argues that the Plaintiffs' cause of action under the FLSA should be dismissed because Plaintiffs “fail to allege any specific facts regarding which plaintiff supposedly worked off-the-clock, on what occasions and for how long.” [Doc. No. 10-1 at 8.] Defendant also argues that the Court should decline to exercise supplemental jurisdiction over the Plaintiffs' California state law claims. [Doc. No. 10-1 at 10.] Defendant argues that the Plaintiffs' “state law claims and federal claim do not arise from a common nucleus of operative fact.” [Doc. No. 10-1 at 11.] Defendant alleges that the only connection between the Plaintiffs' state law claims and federal claim is that both derive from the Plaintiffs' employment relationship with the Defendant. Defendant also asserts that Plaintiffs' state law claims substantially predominate over their federal claim. [Doc. No. 10-1 at 13.]

         LEGAL STANDARDS

         A. MOTION TO DISMISS

         To survive a motion to dismiss under Rule 12(b)(6), “a complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.'” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007)). Thus, the Court “accept[s] factual allegations in the complaint as true and construe[s] the pleadings in the light most favorable to the nonmoving party.” Manzarek v. St. Paul Fire & Marine Ins. Co., 519 F.3d 1025, 1031 (9th Cir. 2008). On the other hand, the Court is “not bound to accept as true a legal conclusion couched as a factual allegation.” Iqbal, 556 U.S. at 678; see also Lee v. City of Los Angeles, 250 F.3d 668, 679 (9th Cir. 2001) (“Conclusory allegations of law are insufficient to defeat a motion to dismiss”). Nor is the Court “required to accept as true allegations that contradict exhibits attached to the Complaint or . . . allegations that are merely conclusory, unwarranted deductions of fact, or unreasonable inferences.” Daniels-Hall v. Nat'l Educ. Ass'n, 629 F.3d 992, 998 (9th Cir. 2010). “In sum, for a complaint to survive a [12(b)(6)] motion to dismiss, the non-conclusory factual content, and reasonable inferences from that content, must be plausibly suggestive of a claim entitling the plaintiff to relief.” Moss v. U.S. Secret Serv., 572 F.3d 962, 969 (9th Cir. 2009) (quotations omitted).

         B. SUPPLEMENTAL JURISDICTION

         28 U.S.C. Section 1367 provides in pertinent part that: “district courts shall have supplemental jurisdiction over all other claims that are so related to claims in the action within such original jurisdiction that they form part of the same case or controversy under Article III of the United States Constitution.” 28 U.S.C. § 1367(a). Even when claims are so related to claims within the original jurisdiction that they form part of the same case or controversy, federal district courts are not always required to entertain them. Thus, the statute expressly provides that district courts may decline to exercise supplemental jurisdiction under any of the following circumstances:

(1) The claim raises a novel or complex issue of state law;
(2) The claim substantially predominates over the claim or claims over which the court has ...

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