United States District Court, N.D. California
ORDER DENYING PLAINTIFF'S MOTION FOR PRELIMINARY
INJUNCTION, GRANTING IN PART AND DENYING IN PART
DEFENDANT'S MOTION TO DISMISS, AND DENYING
DEFENDANT'S MOTION TO STRIKE Docket Nos. 2, 11
Edward
M. Chen United States District Judge.
I.
INTRODUCTION
Thomas
Colopy (“Plaintiff”) works as a driver for Uber
Technologies, Inc. (“Defendant” or
“Uber”). Plaintiff brings this putative class
action alleging that Uber misclassifies its drivers as
independent contractors, while California law requires that
they be classified as employees. Plaintiffs have filed a
Motion for Preliminary Injunction, and Defendants have filed
a Motion to Dismiss and a Motion to Strike.
II.
BACKGROUND
A.
Factual Background
Plaintiff
is Thomas Colopy, a resident of San Francisco, California,
who has worked as an Uber driver since 2012. See
Class Action Complaint (“Complaint”) ¶ 5.
Defendant is Uber Technologies, Inc., a corporation
headquartered in San Francisco, California. Id.
¶ 7, 10. Mr. Colopy brings the case as a putative class
action. Id. ¶ 6, 33. He seeks damages, as well
as declaratory and injunctive relief. Id. ¶ 4.
Plaintiff
alleges the following. Uber has “misclassified its
drivers, including Plaintiff Thomas Colopy, as independent
contractors when they should be classified under California
law as employees.” Id. ¶ 2. This alleged
misclassification has permitted the company to require
drivers to pay their own business expenses, to avoid paying
minimum wage and overtime premiums, and to avoid providing
itemized wage statements in violation of the California Labor
Code. See Id. ¶ 2, 28-30.
Plaintiff
further asserts that Uber's actions constitute
“willful misclassification” pursuant to
California Labor Code Section 226.8. Id. In support
of that contention, Plaintiff highlights the passage of
Assembly Bill 5 (“AB5”), codifying the California
Supreme Court decision Dynamex Operations W., Inc. v.
Superior Court, 4 Cal. 5th 903');">4 Cal. 5th 903 (2018), reh'g
denied (June 20, 2018), “under which an alleged
employer cannot justify classifying workers as independent
contractors who perform services within its usual course of
business.” Id. ¶ 3, 31. Plaintiff
contends that the author of the bill specifically intended
that it would cover Uber, and when Uber failed to obtain a
“carve-out” from AB5, it “publicly stated
that it intends to defy th[e] statute and continue to
classify its drivers as independent contractors.”
Id.; see also Id. ¶ 32. B.
Procedural Background Plaintiff filed a Class Action
Complaint on October 8, 2019. See Docket No. 1. That
same day, Plaintiff also filed a Motion for Preliminary
Injunction. See Docket No. 2. On October 10, 2019,
the case was related to O'Connor v. Uber
Technologies, Inc. (Case No. 3:13-cv-03826) and
reassigned to this Court. See Docket No. 8. On
October 18, 2019, Defendant filed a Motion to Dismiss and a
Motion to Strike. See Docket No. 11. A motion for
class certification has not yet been filed. These are the
only three motions pending before the Court.
III.
DISCUSSION
A.
Preliminary Injunction
Within
the Ninth Circuit, the issuance of class-wide relief prior to
the certification of the class is strongly disfavored.
See M.R. v. Dreyfus, 697 F.3d 706, 738 (9th Cir.
2012) (citing Zepeda v. INS, 753 F.2d 719 (9th Cir.
1985). In Zepeda, the court held: “Without a
properly certified class, a court cannot grant relief on a
class-wide basis. . . . This is particularly true when, as
here, a preliminary injunction is involved.”
Id. at 728 n.1. See also Id. (“A
district court's power to issue a preliminary injunction
should not be broader in scope with respect to nonparties
than its powers following a full trial on the
merits.”).
Although
exceptions to this general rule have been permitted
(particularly in the civil rights context), those exceptions
are bound by “narrow confines.” Zepeda,
753 F.2d at 728 n.1. For example, class certification may not
be necessary prior to the issuance of injunctive relief where
“the relief necessary . . . for individual plaintiffs
would be identical to that necessary for a class.”
Id. (discussing Bailey v. Patterson, 323
F.2d 201 (5th Cir. 1963), cert. denied, 376 U.S. 910
(1964)). In Bailey, the Fifth Circuit explained:
Appellants do not seek the right to use those parts of
segregated facilities that have been set aside for use by
“whites only.” They seek the right to use
facilities which have been desegregated, that is, which are
open to all persons, appellants and others, without regard to
race. The very nature of the rights appellants seek to
vindicate requires that the decree run to the
benefit not only of appellants but also for all persons
similarly situated.
Bailey, 323 F.2d at 206 (emphasis added). Thus,
“the relief required for the individual plaintiffs [in
Bailey] was necessarily identical to the relief that
would have been granted had a class action been filed.”
Zepeda, 753 F.2d at 728 n.1. That is not true of the
case at bar. Relief can be granted to Mr. Colopy without
necessarily granting relief to other drivers.[1]
Plaintiff
argues that pre-certification injunctive relief is
appropriate because “Plaintiff is seeking
public-not class-wide-injunctive relief.”
Reply in Support of Preliminary Injunction (“PI
Reply”) at 10, Docket No. 21. This argument is not
convincing. Even if “public” injunctive relief
could be sought on a preliminary basis, [2] Mr. Colopy does
not seek a public injunction under McGill.
“Merely declaring that a claim seeks a public
injunction . . . is not sufficient to bring that claim within
the bounds of the rule set forth in McGill.”
Sponheim v. Citibank, N.A., No. SACV19264JVSADSX,
2019 WL 2498938, at *4 (C.D. Cal. June 10, 2019) (quoting
Blair v. Rent-A-Center, Inc., No. C 17-02335 WHA,
2017 WL 4805577, at *2 (N.D. Cal. Oct. 25, 2017)); see
also Johnson v. JP Morgan Chase Bank, N.A., No. EDCV
172477 JGB (SPx), 2018 WL 4726042, at *6 (C.D. Cal. Sept. 18,
2018) (“Merely requesting relief which would generally
enjoin a defendant from wrongdoing does not elevate requests
for injunctive relief to requests for public injunctive
relief.”); Wright v. Sirius XM Radio Inc., No.
SACV 16-01688, 2017 WL 4676580, at *9 (C.D. Cal. June 1,
2017) (finding a request for injunctive relief to be a
request for private injunctive relief because the
“generalized allegations” about harm to the
public did not change the fact that “any benefit to the
public [would be] merely ‘incidental'”).
Public injunctive relief must actually “ha[ve] the
primary purpose and effect of prohibiting unlawful acts that
threaten future injury to the general public.”
McGill v. Citibank, N.A., 2 Cal. 5th 945');">2 Cal. 5th 945, 955 (2017)
(quoting Broughton v. Cigna Healthplans of
California, 21 Cal.4th 1066, 1077 (1999)). “Relief
that has the primary purpose or effect of redressing or
preventing injury to an individual plaintiff-or to a group of
individuals similarly situated to the plaintiff-does not
constitute public injunctive relief.” Magana v.
DoorDash, Inc., 343 F.Supp.3d 891 (N.D. Cal. 2018)
(Hamilton, J.) (quoting McGill, 2 Cal. 5th at 955).
In
Magana, the court examined McGill in a case
very analogous to the one at bar:
Here, plaintiff's operative complaint and proposed
amended complaint both seek injunctive relief only for his
California Labor Code claims. Those claims have the primary
purpose and effect of redressing and preventing harm to
DoorDash's employees. Indeed, plaintiff's argument
makes clear that the injunctive relief he seeks would be
entirely opposite of what McGill requires-any
benefit to the public would be derivate of and ancillary to
the benefit to DoorDash's employees (in the form of, for
example, the company's increased tax payments and
employees' possible decreased dependence on assistance
from the state government). Therefore, Magana does not assert
a claim for public injunctive relief under state law.
Magana, 343 F.Supp.3d at 901. Similarly, in
Clifford v. Quest Software Inc., 38 Cal.App. 5th
745, 755 (Ct. App. 2019), review denied (Nov. 13,
2019), the California Court of Appeal found that the
“public interest and any incidental benefit to the
public from ensuring Quest's compliance with wage and
hour laws [stemming from misclassification as an exempt
employee] d[id] not transform Clifford's private UCL
injunctive relief claim into a public one under the
definitions of public and private injunctive relief
articulated by our Supreme Court in Broughton, Cruz,
and McGill” and explained that “[u]nder
those definitions, an employee's request for an
injunction requiring his employer to comply with the Labor
Code is indisputably private in nature.”
Clifford, 38 Cal.App. 5th at 755. Other courts have
declined to find the injunctive relief public in analogous
circumstances. See, e.g., McGovern v. U.S. Bank
N.A., 362 F.Supp.3d 850, 858 (S.D. Cal. 2019)
(“any injunction . . . would primarily benefit only USB
account-holders who would otherwise incur the duplicate OON
Fees or OD Fees in the future”); Croucier v. Credit
One Bank, N.A., No. 18CV20-MMA (JMA), 2018 WL 2836889,
at *5 (S.D. Cal. June 11, 2018) (declining to find that the
injunctive relief was public injunctive relief where
“the putative class affected by the alleged conduct
[robo-calls to customers who failed to make timely payments
and who also revoked consent to receive such calls] would be
limited to a small group of individuals similarly situated to
the plaintiff”).
McGill
does not apply here. As in Clifford and
Magana, Mr. Colopy is seeking a private, not public,
injunction.
Finally,
Uber's arbitration agreement-to which many members of the
putative class are bound-underscores the fact that
preliminary injunctive relief is inappropriate at this stage.
This arbitration agreement has been upheld as enforceable by
the Ninth Circuit. See O'Connor v. Uber Techs.,
Inc., 904 F.3d 1087, 1094 (9th Cir. 2018); see also
Mohamed v. Uber Techs., Inc., 848 F.3d 1201, 1208 (9th
Cir. 2016). As a result, the number of drivers entitled to
injunctive relief is likely to be a small subset of all
drivers. The scope of an enforceable injunction is
ill-defined at this juncture. This underscores the
prematurity of Mr. Colopy's motion for broad preliminary
injunctive relief.
The
Court thus DENIES Plaintiff's Motion for
Preliminary Injunction.
B.
Motion to Dismiss
Under
Ashcroft v. Iqbal, 556 U.S. 662 (2009) and Bell
Atlantic Corp. v. Twombly, 550 U.S. 544 (2007), a
plaintiff's factual allegations in the complaint
“must . . . suggest that the claim has at least a
plausible chance of success.” In re Century
Aluminum Co. Securities Litigation, 729 F.3d 1104, 1107
(9th Cir. 2013). In other words, the complaint “must
allege ‘factual content that allows the court to draw
the reasonable inference that the defendant is liable for the
misconduct alleged.'”
The
Ninth Circuit has settled on a two-step process for
evaluating pleadings. It explains the established approach as
follows:
First, to be entitled to the presumption of truth,
allegations in a complaint or counterclaim may not simply
recite the elements of a cause of action, but must contain
sufficient allegations of underlying facts to give fair
notice and to enable the opposing party to defend itself
effectively. Second, the factual allegations that are taken
as true must plausibly suggest an entitlement to relief, such
that it is not unfair to require the opposing party to be
subjected to the expense of discovery and continued
litigation.
Levitt v. Yelp! Inc., 765 F.3d 1123, 1134-35 (9th
Cir. 2014). The plausibility standard is not akin to a
“probability requirement, ” but it asks for more
than a sheer possibility that a defendant has acted
unlawfully. Where a complaint pleads facts that are
“merely consistent with” a defendant's
liability, it “stops short of the line between
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