Raines v. Coastal Pac. Food Distribs., Inc.
234 Cal. Rptr. 3d 1
| Cal. Ct. App. 5th | 2018Background
- Raines was a billing clerk terminated by Coastal Pacific and sued for various claims, including failure to provide accurate itemized wage statements under Lab. Code §226(a).
- Parties stipulated wage statements (Nov 28, 2013–Feb 28, 2015) omitted the overtime hourly rate but showed overtime hours and total overtime pay.
- Raines sought (1) individual statutory penalties under §226(e) (requires "injury" and a "knowing and intentional" violation) and (2) representative civil penalties under PAGA (Lab. Code §2698 et seq.).
- Trial court initially denied Coastal Pacific’s motion for summary adjudication on the §226 claims, but shortly before trial reversed and granted summary adjudication, finding no injury because the overtime rate was "readily ascertainable" by simple math, and also held injury was required for the PAGA claim.
- Raines appealed arguing triable issues existed as to injury and intent for §226(e), that injury is not required for a PAGA claim, and that the court procedurally erred by reversing its earlier order without proper notice.
- The Court of Appeal affirmed summary adjudication on the individual §226(e) claim (no triable issue of injury) but reversed as to the PAGA claim, holding injury is not required to recover PAGA civil penalties for a §226(a) violation.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Raines suffered "injury" under §226(e) (individual statutory penalties) | Raines: triable issue exists whether omission caused inability to "promptly and easily determine" overtime rate and whether omission was knowing and intentional | Coastal Pacific: overtime rate was readily ascertainable by simple division; no injury as a matter of law | Held: No triable issue; reasonable person can ascertain rate by simple math; summary adjudication for defendant affirmed on §226(e) claim |
| Whether "injury" (and knowing/intent) required to recover PAGA civil penalties for §226(a) violations | Raines: injury not required for PAGA; PAGA penalties derive from §226.3/§2699 and are distinct from §226(e) statutory damages | Coastal Pacific: PAGA claim is derivative of §226(e); if §226(e) fails (no injury), PAGA fails | Held: Injury and §226(e) requirements are not required for PAGA; PAGA enforces civil penalties under §226.3/§2699 independent of §226(e); summary adjudication on PAGA reversed |
| Whether trial court procedurally erred by reversing its prior summary-adjudication order without soliciting new briefing/hearing | Raines: court improperly granted an untimely reconsideration without notice or hearing (Le Francois) | Coastal Pacific: court has inherent authority to reconsider; parties had already briefed and stipulated court should decide legal issue | Held: Any procedural notice/hearing error did not result in prejudice; independent review cured error; no reversal on that ground |
Key Cases Cited
- Iskanian v. CLS Transp. Los Angeles, LLC, 59 Cal.4th 348 (2014) (PAGA enables aggrieved employees to recover civil penalties on behalf of state)
- Arias v. Superior Court, 46 Cal.4th 969 (2009) (PAGA plaintiff acts as proxy for LWDA; PAGA enforces civil penalties)
- Lopez v. Friant & Associates, LLC, 15 Cal.App.5th 773 (2017) (PAGA civil penalties for §226(a) do not require §226(e) injury/knowing-intent elements)
- Le Francois v. Goel, 35 Cal.4th 1094 (2005) (trial court may reconsider its own interim rulings but should solicit briefing/hearing to be fair to parties)
- Bruns v. E-Commerce Exch., Inc., 51 Cal.4th 717 (2011) (statutory interpretation questions reviewed de novo)
- Price v. Starbucks Corp., 192 Cal.App.4th 1136 (2011) (simple arithmetic corrections to wage statements do not establish injury under §226(e))