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Sanchez v. Gruma Corp.

United States District Court, N.D. California

June 28, 2019

STEVEN SANCHEZ, Plaintiff,
v.
GRUMA CORPORATION, Defendant.

          ORDER GRANTING MOTION TO DISMISS RE: DKT. NO. 12

          William H. Orrick United States District Judge

         After I compelled his state law employment claims to arbitration (Order Granting Motion to Compel Arbitration, Sanchez v. Gruma Corporation, et. al., No. 19-cv-00794 (N.D. Cal. April 9, 2019), ECF No. 11 (“Sanchez I”)), plaintiff Steven Sanchez filed a second lawsuit asserting putative California Private Attorney General Act (“PAGA”) claims against defendant Gruma Corporation (“Gruma”) based on the same facts as the first case. Gruma moves to dismiss Sanchez's PAGA complaint because, among other reasons, his notice to the state Labor and Workforce Development Agency (“LWDA”) was defective in that it did not assert a representative claim. Gruma is correct, and Sanchez's amended notice came after the one-year statute of limitation expired and cannot relate back to a defective notice. Accordingly, I grant Gruma's motion to dismiss with prejudice.

         BACKGROUND

         In both Sanchez I and this case, Sanchez alleges a number of state law employment claims against Gruma, which produces Mexican food products under the brand “Mission Foods, ” and Mission Foods Corporation. Private Attorney General Act Complaint (“Compl.”) attached as Exhibit A to Defendant Gruma Corporation's Notice of Removal of Civil Action to the United States District Court Pursuant to U.S.C. §§ 1332(a), 1441(a) and 1446 (“Sanchez II NOR”) [Dkt. No. 1]; Complaint for Damages, attached as Exhibit A to Defendant Gruma Corporation's Notice of Removal of Civil Action to the United States District Court Pursuant to 28 U.S.C. §§ 1332(a), 1441(a) and 1446 (“Sanchez I NOR”), Sanchez I, ECF No. 1-1. Sanchez I was commenced in Alameda County Superior Court and removed by Gruma to the Northern District of California. Sanchez I NOR. Because of a valid arbitration agreement, I granted Gruma's motion to compel arbitration on April 9, 2019; the claims in Sanchez I are currently before an arbitrator. Order Granting Motion to Compel Arbitration, Sanchez I, ECF No. 11.

         On March 19, 2019, Sanchez filed his PAGA claims in state court. Id. at 14-15. Gruma removed the case, I related it to Sanchez I, and it is now before me as Sanchez II. Sanchez II NOR. The complaint in Sanchez II, styled as a PAGA complaint, repeats the same factual allegations as Sanchez I. It asserts the following claims as PAGA claims, rather than as individual claims as in Sanchez I: (i) failure to pay overtime wages, (ii) failure to pay minimum wages, (iii) rest breaks, (iv) meal periods, (v) waiting time penalties, (vi) inaccurate wage statements, and (vii) retaliation. Compl. at 10-19.

         LEGAL STANDARD

         Under Federal Rule of Civil Procedure 12(b)(6), a district court must dismiss if a claim fails to state a claim upon which relief can be granted. To survive a Rule 12(b)(6) motion to dismiss, the claimant must allege “enough facts to state a claim to relief that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). A claim is facially plausible when the plaintiff pleads facts that “allow the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citation omitted). There must be “more than a sheer possibility that a defendant has acted unlawfully.” Id. While courts do not require “heightened fact pleading of specifics, ” a claim must be supported by facts sufficient to “raise a right to relief above the speculative level.” Twombly, 550 U.S. at 555, 570.

         DISCUSSION

         Gruma argues that Sanchez's PAGA claims must be dismissed because he has failed to bring a representative PAGA claim. MTD at 11-13. According to Gruma, Sanchez has only asserted wholly individualized claims that cannot form the basis of a representative PAGA claim because each factual allegation asserts wrongs against Sanchez that are unique to his employment relationship with Gruma. Id. It points out that the complaint does not identify any group of aggrieved employees and that the factual allegations are copied from individual claims in Sanchez I. Id. Additionally, it states that Sanchez only seeks recovery for himself and not on behalf of aggrieved employees. Id.

         “Under PAGA, an ‘aggrieved employee' may file a representative action ‘on behalf of himself or herself and other current and former employees' to recover civil penalties for violations of the Labor Code that otherwise would be assessed and collected by the Labor and Workforce Development Agency.” Khan v. Dunn-Edwards Corp., 19 Cal.App. 5th 804');">19 Cal.App. 5th 804, 808-09 (Cal.Ct.App. 2018) (internal citations omitted). 75% of any civil penalty recovered is paid to the LWDA and 25% is paid to the aggrieved employees. Id. (internal citation omitted).

         Before bringing a PAGA claim, Cal. Labor Code § 2699.3 requires a plaintiff to provide notice to the LWDA. Id. (internal citations omitted). As a condition of suit, this notice must identify the specific provision of the Labor Code alleged to have been violated and the facts and theories that support the alleged violation. Id. (citing Williams v. Superior Court, 3 Cal.5th 531, 545 (Cal. 2017). The purpose of the notice requirement is to allow the LWDA the opportunity “to decide whether to allocate scarce resources to an investigation, a decision better made with knowledge of the allegations an aggrieved employee is making and any basis for those allegations.” Id. Notice also allows the employer to submit a response to the LWDA, which also promotes an informed agency decision on resource allocation. Id. (citing Williams, 3 Cal.5th at pp. 545-546). PAGA claims are limited to the specific theories mentioned in the LWDA notice letter. Holak v. K Mart Corp., No. 12-cv-00304, 2015 WL 2384895, at *3 (E.D. Cal. May 19, 2015) (internal citation omitted).

         Sanchez's LWDA notice letter does not identify any representative claims. The LWDA letter states in relevant part:

A. The Employer Violated Multiple Labor Code sections Related to their Misclassification of Mr. Sanchez as Exempt from Overtime. As described above, the employer violated multiple wage and hour Labor Code sections:
• Misclassified Mr. Sanchez as exempt from overtime (Labor Code §§ 200, et seq., 204, 226, 510, 515, 1194, & ...

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