United States District Court, N.D. California
ORDER RE: DEFENDANT'S MOTION TO DISMISS RE: DKT.
JACQUELINE SCOTT CORLEY UNITED STATES MAGISTRATE JUDGE
Dimercurio, Charles Gaeth, John Langlitz, and Malcolm Synigal
(collectively, “Plaintiffs”) sue Equilon
Enterprises LLC dba Shell Oil Products U.S.
(“Defendant” or “Shell”) alleging
various wage and hour violations under California law. (Dkt.
No. 18.) Now before the Court is Defendant's
motion to dismiss Plaintiffs' first amended complaint
pursuant to Federal Rule of Civil Procedure
12(b)(6). (Dkt. No. 19.) After careful consideration
of the parties' briefing and having had the benefit of
oral argument on January 15, 2020, the Court DENIES
are current or former employees of Shell, which operates an
oil refinery in Martinez, California. (Dkt. No. 18 at ¶
1, 10-14.) Plaintiffs work or worked at the Martinez facility
as refinery operators. (Id. at ¶ 1.) Shell
requires its refinery operators “to work regular 12hour
shifts.” (Id. at ¶ 2.) “In addition
to their regular 12-hour shifts, operators at Shell's
Martinez refinery must regularly be available for designated
12-hour standby shifts twice a day.” (Id.)
assigned to cover standby shifts, operators must “be at
the ready to receive calls during two 1.5-hour time
periods” (“standby periods”) that
“commence 30 minutes prior to the start of the
scheduled shift and end an hour after the standby shift has
started.” (Id. at ¶ 3.) If an operator is
called during these standby periods but cannot be reached,
“the operator is considered absent without leave and is
subject to disciplinary action.” (Id.) If an
operator is reached and asked to work the scheduled standby
shift during one of these standby periods, the operator must
report for duty at the refinery within 2 hours.
(Id.) Operators are not compensated during these
standby periods and are instead paid only “when
actually required to work the standby shift.”
(Id. at ¶¶ 3, 9.) Further, Shell's
standby shift requirements “significantly limit
employees' ability to earn other income, take classes,
care for dependent family members, and enjoy time for
recreation.” (Id. at ¶ 7.)
gravamen of Plaintiffs' complaint is that Shell's
failure to compensate Plaintiffs for the standby periods
violates reporting-time pay requirements under California
law. Plaintiffs bring this action on behalf of themselves and
“[a]ll operators working at the [Martinez] refinery . .
. at any time from four years prior to the filing of [the]
complaint” and final judgment. (Id. at ¶
2019, Plaintiffs filed their original class action complaint
in California state court bringing a claim for “Failure
to Pay Reporting Time Pay” in violation of Industrial
Welfare Commission (“IWC”) Wage Order 1-2001
(“IWC Wage Order”), and derivative claims for
“Failure to Pay All Wages Earned at Termination”
in violation of California Labor Code §§ 200-203;
“Failure to Provide Accurate Wage Statements” in
violation of Labor Code §§ 226, 226.3; and
“Unfair Business Practices” in violation of
California's Unfair Competition Law (“UCL),
California Business and Professions Code § 17200. (Dkt.
No. 1, Ex. A at 19.) Defendant timely removed the complaint
pursuant to the diversity jurisdiction provisions of the
Class Action Fairness Act, 28 U.S.C. §§ 1332(d),
and purported federal question jurisdiction under 28 U.S.C.
§ 1331. (Dkt. No. 1 at ¶¶ 2, 3.)
filed the operative first amended complaint
(“complaint”) in October 2019, asserting their
previous claims and adding a claim under California's
Private Attorneys General Act (“PAGA”), Labor
Code § 2698. (Dkt. No. 18.) Defendant filed the instant
motion to dismiss thereafter. (Dkt. No. 19.) The motion is
fully briefed, (see Dkt. Nos. 20 & 21), and the
Court heard oral argument on January 15, 2020.
FOR JUDICIAL NOTICE
“district courts may not consider material outside the
pleadings when assessing the sufficiency of a complaint under
Rule 12(b)(6).” Khoja v. Orexigen Therapeutics,
Inc., 899 F.3d 988, 998 (9th Cir. 2018). When such
materials “‘are presented to and not excluded by
the court,' the 12(b)(6) motion converts into a motion
for summary judgment under Rule 56.” Id.
(quoting Fed.R.Civ.P. 12(d)). There are, however, “two
exceptions to this rule: the incorporation-by-reference
doctrine, and judicial notice under Federal Rule of Evidence
201.” Id. As relevant here, courts may take
judicial notice of an “adjudicative fact”
pursuant to the Federal Rules of Evidence if that fact is one
“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.” Fed.R.Evid. 201(b)(1), (2).
conjunction with its motion to dismiss, Defendant requests
judicial notice of: (1) collective bargaining agreements and
related agreements (collectively, “CBA”) between
Plaintiffs' union and Defendant, which were previously
filed with the Court in support of Defendant's notice of
removal, (see Dkt. No. 4, Exs. A-C); and (2) court
documents filed in connection with the settlement in
Berlanga, et al. v. Equilon Enterprises LLC dba Shell Oil
Products US, et al., N.D. Cal. Case No.
(see Dkt. Nos. 19-2 - 19-6, Exs. A-E). Plaintiff
opposes Defendant's request for judicial notice because
the documents are not “relevant” to adjudicating
the instant motion. The Court disagrees in part.
is relevant in this wage-and-hour case because its terms
govern the employment relationship between Plaintiffs and
Defendant. It is also relevant to resolving the instant
motion as Defendant asserts that dismissal is warranted
because section 301(a) of the Labor Management Relations Act
(“LMRA”), 29 U.S.C. § 185(a), preempts
Plaintiffs' claims. See Johnson v. Sky Chefs,
Inc., No. 11-CV-05619-LHK, 2012 WL 4483225, at *1 n.1
(N.D. Cal. Sept. 27, 2012) (“Courts routinely take
judicial notice of the governing collective bargaining
agreement where necessary to resolve issues of [LMRA]
preemption.”). Courts also routinely take judicial
notice of CBAs at the motion to dismiss stage. See, e.g.,
Sarmiento v. Sealy, Inc., 367 F.Supp.3d 1131, 1142-43
(N.D. Cal. 2019) (“Courts regularly take judicial
notice of a CBA in evaluating a motion to dismiss.”)
(internal quotation marks and citation omitted); Densmore
v. Mission Linen Supply, 164 F.Supp.3d 1180, 1187 (E.D.
Cal. 2016); Hernandez v. Sysco Corp., No.
16-cv-06723-JSC, 2017 WL 1540652, at *2 (N.D. Cal. Apr. 28,
2017); Jones v. AT&T, No. C 07-3888 JF (PR),
2008 WL 902292, at *2 (N.D. Cal. Mar. 31, 2008). Accordingly,
the Court grants Defendant's request for judicial notice
of the CBA because it is a proper subject of judicial notice
under Federal Rule of Evidence 201(b).
court documents filed in Berlanga would also
ordinarily constitute proper subjects of judicial notice.
See Harris v. Cty. of Orange, 682 F.3d 1126, 1132
(9th Cir. 2012) (noting that judicial notice is appropriate
for “undisputed matters of public record, including
documents on file in federal or state courts”)
(internal citation omitted); see also Bennet v.
Medtronic, Inc., 285 F.3d 801, 803 n.2 (9th Cir. 2002)
(recognizing that courts “may take notice of
proceedings in other courts, both within and without the
federal judicial system, if those proceedings have a direct
relation to matters at issue.”). Two of the named
plaintiffs in Berlanga-Charles Gaeth and John
Langlitz-are Plaintiffs in this action. Thus, their release
in Berlanga of all wage-related claims against Shell
for a specified time period is directly related to this case
and is indeed relevant. However, the Court agrees with
Plaintiffs that the Berlanga documents are not
relevant to resolving the instant motion.
motion cites the Berlanga documents in a footnote in
the “Statement of Facts” and asserts that
“[t]he Berlanga settlement bars Gaeth and
Langlitz from pursuing claims for the period through
September 2, 2018.” (Dkt. No. 19 at 11 n.2.) The motion
does not otherwise cite the Berlanga documents in
support of Defendant's arguments regarding dismissal, nor
does Defendant's reply cite the documents. Because the
Berlanga documents are not necessary to resolve
Defendant's motion to dismiss, the Court concludes that
judicial notice of those documents is inappropriate. See
CYBERSitter, LLC v. People's Republic of China, 805
F.Supp.2d 958, 964 (C.D. Cal. 2011) (declining to take
judicial notice of facts irrelevant to defendants'
motions to dismiss); see also Synopsys, Inc. v. InnoGrit,
Corp., No. 19-CV-02082-LHK, 2019 WL 4848387, at *6 (N.D.
Cal. Oct. 1, 2019) (same); Hitachi Kokusai Elec. Inc. v.
ASM Int'l, N.V., No. 17-cv-06880-BLF, 2018 WL
6099953, at *3 (N.D. Cal. Nov. 21, 2018) (same).
the Court grants Defendant's request for judicial notice
of the CBAs and related agreements because they are proper
subjects of judicial notice under Federal Rule of Evidence
201(b). The Court declines to take judicial notice of the
Berlanga documents at this time because they are not
relevant to the instant motion.
Wage Order at issue provides, in pertinent part:
Reporting Time Pay
(A) Each workday an employee is required to report for work
and does report, but is not put to work or is furnished less
than half said employee's usual or scheduled day's
work, the employee shall be paid for half the usual or
scheduled day's work, but in no event for less than two
(2) hours nor more than four (4) hours, at the employee's
regular rate of pay, which shall not be less than the minimum
Cal. Code Regs., tit. 8, § 11010 subd. 5 (2001). There
is no dispute that Plaintiffs' claim for reporting-time
pay consists of three elements: (1) the employee is required
to report for work; (2) the employee does report; and (3) the
employee is not put to work. Plaintiffs argue that they
“report[ed] for work” under the meaning of the
Wage Order by being available telephonically during the
standby periods as required by Shell and that Shell violated
the Wage Order by failing to compensate them for that time.
(Dkt. No. 20 at 6.) Plaintiffs acknowledge that their other
claims are derivative of the reporting-time pay claim.
moves to dismiss the complaint pursuant to Rule 12(b)(6) on
the grounds that: (1) section 301(a) of the LMRA preempts
Plaintiffs' claims; and (2) the complaint otherwise fails
to state a claim for the wage and hour violations alleged.
(Dkt. No. 19 at 7-8.) The Court addresses each argument in
Preemption under the LMRA
301 of the LMRA, codified at 29 U.S.C. § 185(a), states
in relevant part that “[s]uits for violation of
contracts between an employer and a labor organization
representing employees in an industry affecting commerce . .
. may be brought in any district court of the United States
having jurisdiction of the parties.” Preemption of
state law claims under section 301 applies to “claims
founded directly on rights created by collective-bargaining
agreements, ” and “claims substantially dependent
on analysis of a collective-bargaining agreement.”
Caterpillar, Inc. v. Williams, 482 U.S. 386, 394
(1987); see also McCray v. Marriot Hotel Servs.,
Inc., 902 F.3d 1005, 1010 (9th Cir. 2018)
(“[Section] 301 generally preempts state law claims
that implicate a collective-bargaining agreement, except for
claims that (1) arise independently of a CBA, and (2)
don't substantially depend on analysis of a CBA.”).
apply a two-part test for determining whether a claim is
preempted by section 301. Burnside v. Kiewit Pacific
Corp., 491 F.3d 1053, 1060 (9th Cir. 2007). First, the
court determines “whether the asserted cause of action
involves a right conferred upon an employee by virtue of
state law, not by a CBA. Id. at 1059. “If the
right exists solely as a result of the CBA, then the claim is
preempted, and [the] analysis ends there.” Id.
If the right exists independent of the CBA, the court turns
to the second prong: whether the claim is
“substantially dependent on analysis of a
collective-bargaining agreement.” Id.
(internal quotation marks and citation omitted). If the claim
does not depend on analysis of a collective bargaining
agreement, the claim is not preempted and may proceed under
state law. The court's decision in this regard is based
on “whether the claim can be resolved by
‘look[ing] to' versus interpreting the CBA.”
Id. (quoting Livadas v. Bradshaw, 512 U.S.
107, 121 (1994)). “[T]he bare fact that a
collective-bargaining agreement will be consulted in the
course of state-law litigation plainly does not require the
claim to be extinguished.” Livadas, 512 U.S.
at 124; see also Cramer v. Consol. Freightways,
Inc., 255 F.3d 683, 691 (9th Cir. 2001) (“If the
claim is plainly based on state law, § 301 preemption is
not mandated simply because the defendant refers to the CBA
in mounting a defense.”).
Defendant does not dispute that Plaintiffs' claim for
reporting-time pay concerns a right conferred by state law.
(See Dkt. No. 21 at 6 (recognizing “the
existence of a state law mandate to pay reporting time
wages” when the Wage Order's provisions are met), 9
(“The LMRA preemption issue is whether it is necessary
to interpret the CBA to determine whether the employee
possesses that right in the first instance”).) Because
Plaintiffs' claim for reporting-time pay arises under
state law and would exist with or without the CBA, the first
prong of the Burnside test is not met. Thus, the
Court turns to the second prong to determine whether
Plaintiffs' reporting-time pay claim is
“substantially dependent on analysis” of the CBA.
See Burnside, 491 F.3d at 1059. It is not.
argues that whether Plaintiffs are owed reporting-time pay
“depends on whether the mutually agreed standby system
amounts to an employer-imposed requirement that operators on
standby ‘report for work.'” (Dkt. No. 19 at
16.) Thus, Defendant asserts that Plaintiffs'
reporting-time pay claim is preempted by the LMRA because
resolution of the claim requires interpretation of the
CBA's terms. The Court agrees that whether Plaintiffs are
entitled to reporting-time pay pursuant to the Wage Order
hinges on whether Shell's standby shift policy required
Plaintiffs to “report for work” by being
available telephonically during the standby periods. However,
Defendant has not demonstrated that determining the answer to
that question requires interpretation of the CBA; instead, it
requires interpretation of the Wage Order and California case
law. In other words, the dispositive issue-whether merely
being on standby and available telephonically constitutes
“report[ing] for work” under the meaning of the
Wage Order-is a question of law. The CBA offers no guidance
on that score. Indeed, Defendant recognizes as much and fails
to cite any specific provisions of the CBA that are in
dispute and require interpretation. (See
Dkt. No. 19 at 9-10 (“[T]he CBA does not expressly
define ‘report.' Rather, to glean a definition
would require careful review and construction ...