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Mauia v. Petrochem Insulation, Inc.

United States District Court, N.D. California

January 16, 2020

IAFETA MAUIA, Plaintiff,
v.
PETROCHEM INSULATION, INC., Defendant.

          ORDER RE: MOTION TO DISMISS RE: DKT. NO. 77

          THOMAS S. HIXSON, UNITED STATES MAGISTRATE JUDGE

         I. INTRODUCTION

         This putative class action involves alleged violations of the California Labor Code and Fair Labor Standards Act (“FLSA”) by Defendant Petrochem Insulation, Inc. while employing Plaintiff Iafeta Mauia and others on oil platforms on the Outer Continental Shelf (“OCS”). Before the Court is Petrochem's Amended Motion to Dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6). ECF No. 84. Mauia filed an Opposition (ECF No. 86) and Petrochem filed a Reply (ECF No. 87). Having considered the parties' positions, relevant legal authority, and the record in this case, the Court GRANTS IN PART and DENIES IN PART Petrochem's motion for the following reasons.

         II. BACKGROUND

         Mauia worked for Petrochem as an hourly Onsite Project Manager and Superintendent of scaffolding projects on oil platforms off the coast of California. Third Am. Compl. (“TAC”) ¶ 9. He worked for Petrochem until around March 2016. Id. ¶¶ 9-10. On February 20, 2018, he filed an action against Petrochem in state court which Petrochem removed to this Court.

         In his Third Amended Complaint, Mauia alleges five causes of action against Petrochem related to his work on the platforms: (1) Petrochem failed to provide meal periods as required by California law and therefore is liable for meal period premiums under California Labor Code section 226.7, TAC ¶ 32; (2) it failed to provide rest periods as required by California law and therefore is liable for rest period premiums under California Labor Code section 226.7, TAC ¶ 39; (3) it willfully failed to pay overtime, double-time, and meal and rest period premium wages under California law, which failure constitutes unfair business practices under the California Business and Professions Code section 17200, TAC ¶ 47; (4) it did not pay immediately all meal or rest period premium wages earned and unpaid upon discharge, and that such failure was willful, TAC ¶ 55; and (5) it willfully and in bad faith did not pay proper overtime rates for overtime work, in violation of section 207 of the FLSA, by not including the reasonable cost of meals and lodging when calculating overtime earnings, TAC ¶¶ 61-62.

         Petrochem moves to dismiss all claims.

         III. LEGAL STANDARD

         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). To survive a Rule 12(b)(6) motion to dismiss, a complaint must plead “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). Plausibility does not mean probability, but it requires “more than a sheer possibility that a defendant has acted unlawfully.” Ashcroft v. Iqbal, 556 U.S. 662, 687 (2009). A complaint must provide a defendant with “fair notice” of the claims against it and the grounds for relief. Twombly, 550 U.S. at 555 (quotations and citation omitted); Fed.R.Civ.P. 8(a)(2) (A complaint must contain a “short and plain statement of the claim showing that the pleader is entitled to relief.”). In considering a motion to dismiss, a court accepts factual allegations in the complaint as true and construes the pleadings in the light most favorable to the nonmoving party. Manzarek v. St. Paul Fire & Marine Ins. Co., 519 F.3d 1025, 1031 (9th Cir. 2008).; Erickson v. Pardus, 551 U.S. 89, 93-94 (2007). However, “the tenet that a court must accept a complaint's allegations as true is inapplicable to threadbare recitals of a cause of action's elements, supported by mere conclusory statements.” Iqbal, 556 U.S. at 678.

         If a Rule 12(b)(6) motion is granted, a “court should grant leave to amend even if no request to amend the pleading was made, unless it determines that the pleading could not possibly be cured by the allegation of other facts.” Lopez v. Smith, 203 F.3d 1122, 1127 (9th Cir. 2000) (en banc) (citations and quotations omitted). However, a court “may exercise its discretion to deny leave to amend due to ‘undue delay, bad faith or dilatory motive on part of the movant, repeated failure to cure deficiencies by amendments previously allowed, undue prejudice to the opposing party . . ., [and] futility of amendment.'” Carvalho v. Equifax Info. Servs., LLC, 629 F.3d 876, 892-93 (9th Cir. 2010) (alterations in original) (quoting Foman v. Davis, 371 U.S. 178, 182 (1962)).

         IV. DISCUSSION

         A. Parker Drilling Mgmt. Servs. v. Newton

         While this case has been pending, the U.S. Supreme Court issued an opinion addressing whether federal law or California law applies to wage and hour claims made by employees who work on drilling platforms on the OCS. Parker Drilling Mgmt. Servs. v. Newton, 139 S.Ct. 1881 (2019). That case is especially pertinent here, as it clarified the standard for determining when state law applies on the OCS (and overturned the Ninth Circuit's decision on that issue). The case involved a former employee, Newton, who had worked on drilling platforms off the California coast. Newton filed a class action which included claims premised on California's minimum-wage and overtime laws. The issue before the Supreme Court was whether California law could be adopted since the claims arose out of work on the OCS.

         The Supreme Court noted first that the Outer Continental Shelf Lands Act (“OCSLA”), 42 U.S.C. §§ 1333-56b, “extends federal law to the subsoil and seabed of the [OCS].” 139 S.Ct. at 1886. “Under the OCSLA, all law on the OCS is federal law, administered by federal officials.” Id. The OCSLA, the Court wrote, “denies States any interest in or jurisdiction over the OCS, and it deems the adjacent State's laws to be federal law ‘[t]o the extent that they are applicable and not inconsistent with' other federal law.” Id. (quoting 43 U.S.C. § 1333). The Court proceeded to address the question of how to determine which state laws meet that requirement and therefore should be adopted as federal law.

         The Supreme Court noted that the District Court in the earlier proceedings had applied Fifth Circuit precedent which provides that under the OCSLA, “state law only applies to the extent it is necessary to ‘fill a significant void or gap' in federal law.” Newton v. Parker Drilling Mgmt. Servs., 2015 U.S. Dist. LEXIS 191899, *6 (quoting Cont'l Oil Co. v. London Steam-Ship Owners' Mut. Ins. Ass'n, 417 F.2d 1030, 1036 (1969)). On appeal, the Ninth Circuit vacated and remanded, finding that state law is “‘applicable'” under the OCSLA whenever it “pertains to the subject matter at hand, ” and that state laws are “inconsistent” with federal law under the OCSLA only if “they are mutually incompatible, incongruous, or inharmonious.” Newton v. Parker Drilling Mgmt. Servs., 881 F.3d 1078, 1078-93 (2018) (citations omitted). The Supreme Court disagreed. Reaffirming that federal law is the “exclusive law” on the OCS, the Court rejected a pre-emption type analysis to determine if state law is applicable on the OCS. Instead, the Court opined, “the question is whether federal law has already addressed the relevant issue; if so, state law addressing the same issue would necessarily be inconsistent with existing federal law and cannot be adopted as surrogate federal law. Put another way, to the extent federal law applies to a particular issue, state law in inapplicable.” 139 S.Ct. at 1889. State law, the Court wrote, “serves a supporting role, to be adopted only where is a gap in federal law's coverage.” Id. at 1892. “[I]f a federal law addresses the issue at hand, then state law is not adopted as federal law on the OCS.” Id.

         Applying that standard, the Supreme Court found that Newton's claims premised on the adoption of California law requiring payment for time spent on standby failed because federal law already addressed that issue. Id. at 1893 (quoting 29 C.F.R. § 785.23 (2018) (“An employee who resides on his employer's premises on a permanent basis or for extended periods of time is not considered as working all the time he is on the premises.”)). The Court also found that Newton's claims relying on the adoption of the California minimum wage failed because the FLSA already provides for a minimum wage, even though the FLSA sets a minimum wage of “‘not less than . . . $7.25 an hour,' and does not ‘excuse noncompliance with any Federal or State law . . . establishing a [higher] minimum wage.'” 139 S.Ct. at 1893 (quoting 29 U.S.C. §§ 206(a)(1), 218). “[W]hatever the import of these provisions in an ordinary pre-emption case, ” the Court explained, “they do not help Newton here, for the question under the OCSLA is whether federal law addresses the minimum wage on the OCS. It does.” 139 S.Ct. at 1893.

         After the Supreme Court's opinion in Parker Drilling, Mauia amended his complaint, dropping his claims premised on California minimum wage and stand-by laws, see Second Am. Compl., ECF No. 22, and adding his FLSA claim.

         B. Mauia's Claim for Meal Break Violations under California Law

         Petrochem asserts that under Parker Drilling, Mauia has no viable claim for meal break violations under California law because federal law already addresses the issue of meal periods.

         California law requires that a first meal period be given no later than the start of an employee's sixth hour of work. Brinker Rest. Corp. v. Superior Court, 53 Cal.4th 1004, 1041-42 (2012); 8 Cal. Code Regs. § 11160(10)(A); Cal. Lab. Code § 512(A). A second meal period must be given no later than the start of the eleventh hour of work. Brinker, 53 Cal.4th at 1042; 8 Cal. Code Regs. § 11160(10)(B); Cal. Lab. Code § 512(A). When an employer fails to comply with these meal period requirements, it must pay an employee one hour of additional pay for each workday a meal period violation occurs. Cal. Lab. Code ...


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