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Canela v. Costco Wholesale Corp.

United States District Court, N.D. California, San Jose Division

May 23, 2018

LILIANA CANELA, individually and on behalf of all others similarly situated, Plaintiff,
v.
COSTCO WHOLESALE CORPORATION, and DOES 1 through 10, inclusive, Defendants.

          DENYING DEFENDANT'S MOTION FOR PARTIAL SUMMARY JUDGMENT [Re: ECF 44]

          BETH LABSON FREEMAN UNITED STATES DISTRICT JUDGE.

         Plaintiff Liliana Canela brings this action against Defendant Costco Wholesale Corporation (“Costco”) for allegedly failing to provide suitable seats to employees in violation of Labor Code § 1198 pursuant to California's Private Attorneys General Act (“PAGA”). Compl. ¶¶ 9-10, ECF 1. Before the Court is Costco's motion for partial summary judgment. Mot., ECF 44. Costco essentially requests the Court to issue a ruling that Canela “may proceed only on her own individual claim” as opposed to a “representative action.” Id. at 24-25. Having considered the briefing and oral argument of the parties, as well as the governing law, the Court DENIES Costco's motion for partial summary judgment.

         I. BACKGROUND

         A. Costco and Its Employees

         Costco is a membership-club retailer that sells merchandise and services out of warehouses. Mot. 2. Costco's warehouses have an entrance door and an exit door where one or more employees are stationed. Id. Employees who are classified as a “Member Service Assistant” work at the entrance and exit doors. See Ex. 3 to Schroeder Decl. (“Parks Dep.”) 9:5- 13, ECF 44-2. Member Service Assistants provide service to Costco's members (i.e., customers), including directing members to product and service locations, assisting loading and shipping, and keeping the area clean. Mot. 4. Although Member Service Assistants are the employees whose job description specifies work at the entrance and exit doors, other employees have performed the function of Member Service Assistants from time to time. Ex. 8 to Schroeder Decl. (“Hernandez Decl.”) ¶ 3, ECF 44-2; Ex. 4 to Schroeder Decl. (“Alexander Decl.”) ¶ 2, ECF 44-2; Ex. 12 to Schroeder Decl. (“Richards Decl.”) ¶ 3, ECF 44-2. Costco does not systematically record which employees work at which door on any given day or at any given time. See Parks Dep. 22:8-25; Ex. 5 to Schroeder Decl. (“Castro Decl.”) ¶ 3, ECF 44-2; Richards Decl. ¶ 3; Ex. 10 to Schroeder Decl. (“Marmon Decl.”) ¶ 2, ECF 44-2.

         Canela worked at Costco's Santa Clara warehouse from 2002 to 2017 and then transferred to the Great Oaks warehouse.[1] Ex. 1 to Schroeder Decl. (“Canela Dep.”) 14:1-15:3, ECF 44-2. During her employment, Canela was classified as a Member Service Assistant for a couple of months in 2013. Id. at 13:17-25, 56:3-8, 59:20-60:2, 60:18-21. She held that position as an accommodation for an injury. Id. At that time, Canela worked only at the entrance door. Id. at 59:20-60:2. After the two-month accommodation period in 2013, Canela worked about three to four times a month at the entrance or exit door to cover for other employees. Id. at 60:22-62:10.

         Although Costco maintains job descriptions which detail the duties assigned to Member Service Assistants, it appears that there is a variation in the manner in which the job is actually performed. To demonstrate this variation, Costco submitted several declarations. For example, Bill Walker worked as a Member Service Assistant at the Oxnard warehouse for 28 years. Ex. 15 to Schroeder Decl. (“Walker Decl.”) ¶ 2, ECF 44-2. He has almost exclusively worked at the entrance door. Id. ¶ 3. On the other hand, some employees may choose to work only at the exit door. See Hernandez Decl. ¶ 3. As another example, Francisco Fruto, a Member Service Assistant at the Chino Hills warehouse, performs floor walks for most of his time instead of staying at the doors. See Ex. 6 to Schroeder Decl. (“Fruto Decl.”) ¶¶ 2-7, ECF 44-2. Another Member Service Assistant at the Chino Hills warehouse, Gary Gomez, uses a wheelchair and performs jobs including picking trash, pushing carts to members, and rolling electric carts to plug them in. Ex. 7 to Schroeder (“Gomez Decl.”) ¶¶ 2, 6-7, ECF 44-2. Some employees who are not classified as a Member Service Assistant have filled in at the doors. See Castro Decl. ¶ 3; Marmon Decl. ¶ 2; Richards Decl. ¶ 3.

         B. Procedural Background

         Canela filed this action on July 1, 2013. Her complaint asserts only one cause of action: violation of California Labor Code § 1198.[2] Compl. ¶ 9. According to the complaint, § 1198 does not permit an employer to employ a worker “under conditions of labor that are prohibited by [an] applicable wage order.” Id. The applicable wage order at issue is Wage Order 7-2001 (“Seating Wage Order”). Section 14 of that order provides that:

14. Seats
(A) All working employees shall be provided with suitable seats when the nature of the work reasonably permits the use of seats.
(B) When employees are not engaged in the active duties of their employment and the nature of the work requires standing, an adequate number of suitable seats shall be placed in reasonable proximity to the work area and employees shall be permitted to use such seats when it does not interfere with the performance of their duties.

Cal. Code Regs. tit. 8, § 11070; see Compl. ¶ 9. The complaint alleges the one cause of action as a PAGA claim under a class action. Compl. ¶¶ 8-17. Specifically, Canela initially sought to represent “[a]ll employees of Costco who at any time, within the applicable period of limitations, have been designated as [a] member service [assistant] and have, within California, been assigned to work either as a greeter or as an exit checker, and were not provided with a seat.” Id. ¶ 15. On August 2, 2013, Costco removed the action to this District under the Class Action Fairness Act (“CAFA”). Notice of Removal, ECF 1. Thereafter, the action was stayed for over two years pending the California Supreme Court's issuance of an order answering suitable seating questions certified by the Ninth Circuit in Kilby v. CVS Pharmacy (12-56130) and Henderson v. JPMorgan Chase (13-56095). See ECF 26. The stay was lifted on May 5, 2016. Id.

         On September 20, 2017, the parties filed a joint status report. ECF 34. Canela reported that she would not seek class certification and suggested that this Court lacks subject matter jurisdiction for that reason. Id. The Court ordered the parties to brief whether this Court retained jurisdiction. ECF 35. After reviewing the parties' briefs, the Court concluded that subject matter jurisdiction exists because Canela's representation that she would not seek class certification does not divest this Court's jurisdiction over this action that was properly removed under CAFA. ECF 41. Based on Canela's failure to seek class certification, Costco filed its motion for partial summary judgment.

         C. PAGA Actions

         In 2003, California enacted PAGA to permit “aggrieved employees, acting as private attorneys general, ” to bring lawsuits against employers for Labor Code violations. Arias v. Superior Court, 46 Cal.4th 969, 980 (2009). The goal was to foster compliance with state labor laws. Id. Thus, PAGA provides that an “aggrieved employee” may bring an action “on behalf of himself or herself and other current or former employees” to recover civil penalties for violations of the Labor Code. Cal. Lab. Code § 2699. Where the Labor Code does not set forth its own penalty, PAGA sets forth a civil penalty of 100 dollars for each aggrieved employee per pay period for the initial violation and 200 dollars for each aggrieved employee per pay period for each subsequent violation. Id. § 2699(f)(2). “Of the civil penalties recovered, 75 percent goes to the Labor and Workforce Development Agency [(“LWDA”)], leaving the remaining 25 percent for the ‘aggrieved employees.'” Arias, 46 Cal.4th at 980-81. An employee suing under PAGA “does so as [a] proxy or agent of the state's labor law enforcement agencies.” Id. at 986.

         II. LEGAL STANDARD

         Federal Rule of Civil Procedure 56 governs motions for summary judgment. Summary judgment is appropriate “if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.” Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). “Partial summary judgment that falls short of a final determination, even of a single claim, is authorized by Rule 56 in order to limit the issues to be tried.” State Farm Fire & Cas. Co. v. Geary, 699 F.Supp. 756, 759 (N.D. Cal. 1987).

         The moving party “bears the burden of showing there is no material factual dispute, ” Hill v. R Carriers, Inc., 690 F.Supp.2d 1001, 1004 (N.D. Cal. 2010), by “identifying for the court the portions of the materials on file that it believes demonstrate the absence of any genuine issue of material fact.” T.W. Elec. Serv. Inc. v. Pac. Elec. Contractors Ass'n, 809 F.2d 626, 630 (9th Cir. 1987). In judging evidence at the summary judgment stage, the Court “does not assess credibility or weigh the evidence, but simply determines whether there is a genuine factual issue for trial.” House v. Bell, 547 U.S. 518, 559-60 (2006). A fact is “material” if it “might affect the outcome of the suit under the governing law, ” and a dispute as to a material fact is “genuine” if there is sufficient evidence for a reasonable trier of fact to decide in favor of the nonmoving party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986).

         Where the moving party will have the burden of proof on an issue at trial, it must affirmatively demonstrate that no reasonable trier of fact could find other than for the moving party. Celotex, 477 U.S. at 325; Soremekun v. Thrifty Payless, Inc., 509 F.3d 978, 984 (9th Cir. 2007). Once the moving party meets its initial burden, the nonmoving party must set forth, by affidavit or as otherwise provided in Rule 56, “specific facts showing that there is a genuine issue for trial.” Liberty Lobby, 477 U.S. at 250 (internal quotation marks omitted). If the nonmoving party's “evidence is merely colorable, or is not significantly probative, summary judgment may be granted.” Id. at 249-50 (internal citations omitted). Mere conclusory, speculative testimony in affidavits and moving papers is also insufficient to raise genuine issues of fact and defeat summary judgment. See Thornhill Publ'g Co. v. GTE Corp., 594 F.2d 730, 738 (9th Cir.1979). For a court to find that a genuine dispute of material fact exists, “there must be enough doubt for a reasonable trier of fact to find for the [non-moving party].” Corales v. Bennett, 567 F.3d 554, 562 (9th Cir. 2009).

         The Court may generally consider matters properly subject to judicial notice. See Tellabs, Inc. v. Makor Issues & Rights, Ltd., 551 U.S. 308, 322 (2007). In her opposition, Canela requests that the Court take judicial notice of the tentative order dated February 1, 2018 in Hall v Rite Aid Corporation, San Diego Superior Court No. 37-2009-00087938-CU-OE-CTL, which became the final order (Ex. 7 to Decl. of McInerney, ECF 45-2). Opp'n 17, ECF 45. Canela's request to take judicial notice is GRANTED, as the document is a matter of public record and Costco does not dispute its authenticity. Fed.R.Evid. 201; Reyn's Pasta Bella, LLC v. Visa USA, Inc., 442 F.3d 741, 746 n.6 (9th Cir. 2006). While the document is accepted as what it represents, any specific fact findings and legal conclusions set forth in that document may not bind this Court.

         III. DISCUSSION

         Costco moves for partial summary judgment that: (1) Canela lacks standing in federal court under Article III of the U.S. Constitution to represent unnamed third parties; (2) Canela cannot represent unnamed third parties in federal court without Rule 23 certification; and (3) Canela cannot represent unnamed third parties at trial because her representative claims in this action are unmanageable. Mot. 2-3; Proposed Order, ECF 44-3. The first two issues are legal issues and do not depend on a material dispute of fact. Partial summary adjudication may be granted on a purely legal issue. Fed.R.Civ.P. 56 (“The court shall grant summary judgment if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.”). For the reasons stated below, the Court DENIES Costco's motion.

         A. Article III Standing

         Costco argues that Canela lacks Article III standing to represent unnamed third parties in this action. Mot. 10. As mentioned, Canela asserts a representative PAGA claim and seeks to represent “[a]ll employees of Costco who at any time, within the applicable period of limitations, have been designated as [a] member service [assistant] and have, within California, been assigned to work either as a greeter or as an exit checker, and were not provided with a seat.” Compl. ¶ 15. Costco contends that Canela cannot do so because she failed to obtain Rule 23 class certification. Mot. 11-13. According to Costco, allowing Canela to assert a representative PAGA claim (as opposed to advancing only her individual PAGA claim) would violate Article III standing requirements-unless she had relied on the class action exception-because she was not injured by Costco's ...


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