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Azpeitia v. Tesoro Refining & Marketing Co. LLC

United States District Court, N.D. California

July 21, 2017

CHRIS AZPEITIA, et al., Plaintiffs,
v.
TESORO REFINING & MARKETING COMPANY LLC, et al., Defendants.

          ORDER GRANTING IN PART AND DENYING IN PART MOTION TO DISMISS RE: ECF NO. 25

          JON S. TIGAR United States District Judge

         Before the Court is Defendants' Motion to Dismiss. ECF No. 25. Plaintiffs oppose the motion. ECF No. 34. The Court will grant the motion in part and deny the motion in part.

         I. BACKGROUND

         A. Facts and Procedural History[1]

         Plaintiffs Chris Azpeitia, Eileen Foster, Antonio Garcia, and Samantha West bring a putative class action asserting several claims under California wage laws and related statutes against Defendants Tesoro Refining & Marketing Company LLC, and Tesoro Logistics GP, LLC (collectively, “Defendants”).

         Named Plaintiffs are or were employed as operators at Defendants' Golden Eagle facility located in Martinez, California, and Defendants' Los Angeles Refinery, located in Carson and Wilmington, California. ECF No. 33 ¶ 9. Because the oil refining and distribution process requires constant monitoring, operators work a continuous 12-hour shift and are required to remain on duty during the entire shift. ECF No. 33 ¶ 18; 19.

         The gravamen of Plaintiffs' complaint is that Defendants do not authorize or permit Plaintiffs to take off-duty rest breaks for every four-hour work period or major fraction thereof, as mandated by law. ECF No. 33 ¶ 21. Because Defendants require operators to monitor the refining process, respond to upsets and critical events, and maintain the safe and stable operation of their units, they are required to remain attentive, carry radios, and be reachable throughout their shifts. ECF No. 33 ¶ 20. As a result, Plaintiffs are responsible for their units at all times and do not receive “designated rest breaks or relief.” ECF No. 33 ¶ 21.

         Plaintiffs assert the following four causes of action under California law: (1) violations of California Labor Code section 226.7 and California's Industrial Welfare Commission (“IWC”) Wage Order 1-2001 for failure to provide rest periods; (2) violation of Labor Code section 226 for failure to provide accurate written wage statements; (3) violation of California's Private Attorney General Act (“PAGA”) (Cal. Lab. Code § 2698 et seq); and (4) violation of California's Unfair Competition Law (“UCL”) (Bus. & Prof. Code § 17200 et seq). ECF No. 33 ¶ 40-66.

         On April 14, 2017, Defendants moved to dismiss Plaintiffs' First Amended Complaint (“FAC”), asserting that Plaintiffs' state law claims are preempted by section 301 of the Labor Management Relations Act (“LMRA”) and that several of Plaintiffs derivative claims are deficiently pled. ECF Nos. 21, 25. On April 26, 2017, the parties filed a stipulation requesting to direct Defendants' Motion to Dismiss to the Plaintiffs' soon-to-be-filed Second Amended Complaint (“SAC”), which the Court granted. ECF Nos. 31, 32. Plaintiffs filed their SAC on May 3, 2017 to add allegations that they had administratively exhausted their PAGA claims. ECF No. 33 ¶ 55.

         II. JURISDICTION

         The Court has jurisdiction pursuant to 28 U.S.C. § 1332(a) because the amount in controversy exceeds $75, 000 and the opposing parties are of diverse citizenship.

         III. REQUESTS FOR JUDICIAL NOTICE

         Before turning to the merits of the motion to dismiss, the Court resolves the Defendants' requests for judicial notice.

         “As a general rule, we may not consider any material beyond the pleadings in ruling on a Rule 12(b)(6) motion.” United States v. Corinthian Colleges, 655 F.3d 984, 998-99 (9th Cir. 2011) (internal quotation marks and citations omitted). Pursuant to Federal Rule of Evidence 201(b), however, “[t]he court may judicially notice a fact that is not subject to reasonable dispute because it: (1) is generally known within the trial court's territorial jurisdiction; or (2) can be accurately and readily determined from sources whose accuracy cannot reasonably be questioned.” The Court may properly take judicial notice of materials attached to the complaint and of matters of public record. Lee v. City of Los Angeles, 250 F.3d 668, 688-89 (9th Cir. 2001). A court “must take judicial notice if a party requests it and the court is supplied with the necessary information.” Fed.R.Evid. 201(c)(2). However, the Court takes judicial notice only of the existence of the document, not of the veracity of allegations or legal conclusions asserted in it. See Lee, 250 F.3d at 689-90.

         Defendants request that the Court take judicial notice of the following documents: (1) the “Joint Stipulation of Class Action Settlement; Settlement Agreement and Release” in Benjamin Burgess v. Tesoro Refining & Marketing Company, United States District Court, Central District of California Case No. 2:10-cv-05870-DMG-PLA, ECF No. 199-1. ECF No. 25-1, Exh. A; (2) “The Order and Final Judgment (a) Confirming Final Certification of Settlement Class; (b) Granting Final Approval of Class Action Settlement; and (c) Granting Plaintiffs' motion for award of Attorneys' Fees” in Burgess, ECF No. 228. ECF No. 25-1, Exh. B; (3) the Collective Bargaining Agreements (“CBAs”) and Memoranda of Agreement attached to the concurrently filed Declaration of Karen Kawano. ECF No. 25-2 through ECF No. 25-14; and (4) Form DF-43, Department of Finance Bill Report Deferred to Department of Industrial Relations, Bill No. AB 2509, ECF No. 35-1, Exh. A, and California Legislative Counsel's digest of Senate Bill 1255, ECF No. 35-1, Exh. B. Defendants' request is not opposed.

         Because a court “may take judicial notice of proceedings in other courts . . . if those proceedings have a direct relation to matters at issue, ” Bias v. Moynihan, 508 F.3d 1212, 1225 (9th Cir. 2007), the Court grants requests (1) and (2) for judicial notice. Because a court may “take judicial notice of a CBA in evaluating a motion to dismiss” the Court grants request (3) for judicial notice of the attached CBAs. Jones v. AT&T, 2008 WL 902292, at *2 (N.D. Cal. Mar. 31, 2008). See also Busey v. P.W. Supermarkets, Inc., 368 F.Supp.2d 1045, 1049 (N.D. Cal. 2005) (granting judicial notice of a CBA). Because courts may take judicial notice of records and reports of administrative bodies and the legislative history of state statutes, the Court grants request (4) for judicial notice. See Anderson v. Holder, 673 F.3d 1089, 1094 n.1 (9th Cir. 2012) (explaining that a court may take judicial notice of legislative history and records and reports of administrative bodies).

         IV. LEGAL STANDARDS

         A. Motion to Dismiss

         A complaint must contain “a short and plain statement of the claim showing that the pleader is entitled to relief.” Fed.R.Civ.P. 8(a)(2). While detailed factual allegations are not required, a complaint must have sufficient factual allegations to “state a claim to relief that is plausible on its face.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (internal quotations and citations omitted). A party may move to dismiss based on the failure to state a claim upon which relief may be granted. See Fed.R.Civ.P. 12(b)(6). “Dismissal under Rule 12(b)(6) is appropriate only where the complaint lacks a cognizable legal theory or sufficient facts to support a cognizable legal theory.” Mendiondo v. Centinela Hosp. Med. Ctr., 521 F.3d 1097, 1104 (9th Cir. 2008). To survive a motion to dismiss, a pleading must allege “enough facts to raise a reasonable expectation that discovery will reveal evidence” to support the allegations. Bell Atl. Corp. v. Twombly, 550 U.S. 544, 556 (2007). For purposes of a motion to dismiss, “all allegations of material fact are taken as true and construed in the light most favorable to the nonmoving party.” Cahill v. Liberty Mut. Ins. Co., 80 F.3d 336, 337-38 (9th Cir. 1996).

         B. Section 301 Preemption

         LMRA section 301 provides federal jurisdiction over “[s]uits for violation of contracts between an employer and a labor organization." 29 U.S.C § 185(a). Section 301 embodies “a congressional mandate to the federal courts to fashion a body of federal common law to be used to address disputes arising out of labor contracts.” Allis-Chalmers Corp. v. Lueck, 471 U.S. 202, 209 (1985) (footnote omitted). “This federal common law, in turn, preempts the use of state contract law in CBA interpretation and enforcement.” Matson v. United Parcel Serv., Inc., 840 F.3d 1126, 1132 (9th Cir. 2016) (citation and quotation omitted). “To give ‘the policies that animate § 301 . . . their proper range, ' the Supreme Court has expanded “the pre-emptive effect of § 301 . . . beyond suits alleging contract violations' to state law claims grounded in the provisions of a CBA or requiring interpretation of a CBA.” Kobold v. Good Samaritan Reg'l Med. Ctr., 832 F.3d 1024, 1032 (9th Cir. 2016) (quoting Lueck, 471 U.S. at 210-11). However, “not every dispute concerning employment, or tangentially involving a provision of a collective-bargaining agreement, is preempted by section 301.” Lueck, 471 U.S. at 211. “[T]he Supreme Court has repeatedly admonished that section 301 preemption is not designed to trump substantive and mandatory state law regulation of the employee-employer relationship; section 301 has not become a 'mighty oak' that might supply cover to employers from all substantive aspects of state law.” Humble v. Boeing Co., 305 F.3d 1004, 1007 (9th Cir. 2002) (citing Lingle v. Norge Div. of Magic Chef Inc., 486 U.S. 399, 408-09 (1988); Livadas v. Bradshaw, 512 U.S. 107, 122 (1994)). “In extending the pre-emptive effect of § 301 beyond suits for breach of contract, it would be inconsistent with congressional intent under that section to preempt state rules that proscribe conduct, or establish rights and obligations, independent of a labor contract.” Allis-Chalmers Corp., 471 U.S. at 212.

         In Burnside v. Kiewit Pacific Corp., the Ninth Circuit articulated a two prong inquiry to analyze whether section 301 preemption applies. 491 F.3d 1053, 1059-60 (9th Cir. 2007). A court must first determine “whether the asserted cause of action involves a right conferred upon an employee by virtue of state law, not by a CBA. If the right exists solely as a result of the CBA, then the claim is preempted and our analysis ends there.” Id. at 1059. However, if the court determines the right underlying the state law claim(s) “exists independently of the CBA” the court proceeds to the second prong, which inquires whether the right is “substantially dependent on analysis of a collective bargaining agreement.” Id.

         In determining whether the first prong is met (whether a right is independent of a CBA) a court must evaluate whether the “legal character of a claim” is “independent of rights under the collective-bargaining agreement.” Livadas, 512 U.S. at 123. Section 301 preempts the claim if the claim is “founded directly on rights created by a collective bargaining agreement.” Caterpillar v. Williams, 482 U.S. 386, 394 (1987).

         In determining whether the second prong is met (whether the claim is “substantially dependent” on a CBA) the Court must evaluate whether the claim can be resolved by “‘look[ing] to' versus interpreting the CBA. If it is the latter, the claim is preempted, if it is the former, it is not.” Burnside, 491 F.3d at 1060 (internal quotation marks and citations omitted). “When the meaning of a contract term is not the subject of dispute, the bare fact that a CBA will be consulted in the course of the state-law litigation plainly does not require the claim to be extinguished.” Livadas, 512 U.S. at 124.

         “[W]hen the resolution of a state-law claim is substantially dependent upon analysis of the terms of an agreement made between the parties in a labor contract, that claim must either be treated as a section 301 claim, or dismissed as preempted by federal labor-contract law.” Lueck, 471 U.S. at 220. It is usually difficult for an employee to succeed in a suit under section 301 “unless the contractual grievance-arbitration procedure is invoked on her behalf or on behalf of a group of employees of which she is part. If the dispute is not ultimately resolved by arbitration, the employee must establish that the union violated its duty of fair representation by failing to pursue the grievance to arbitration or pursuing it arbitrarily.” Kobold v. Good Samaritan Regional Medical Center, 832 F.3d 1024, 1034 (9th Cir. 2016).

         V. ...


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