879 F. Supp. 2d 1138
E.D. Cal.2012Background
- Plaintiffs Reinhardt and Armstrong were employed by Gemini Motor Transport as drivers delivering fuel to Love’s Gas Stations in California.
- Plaintiffs’ First Amended Complaint asserts ten California state-law claims under the Labor Code, Business & Professions Code, Government Code, and common law.
- Gemini moved under Rule 12(b)(6) to dismiss fifth (Labor Code § 226), sixth (breach of express contract), seventh (breach of implied covenant), and part of the tenth (Business & Professions Code § 17200) causes of action, and to strike the prayer for the “maximum rates promised.”
- The court denied Gemini’s motions, concluding the fifth, sixth, seventh, and portion of the tenth claim were adequately pled and the strike motion was improper; the instruction on the maximum-rate prayer was clarified.
- Key factual allegations include failures to provide accurate wage statements (§ 226), failure to pay a daily minimum (express contract), alleged interference with plaintiffs’ ability to obtain minimum pay (implied covenant), and UCL claims premised on § 226 violations.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether § 226 claim is adequately pled | FAC alleges knowing and intentional violation and cognizable injury | FAC merely restates statute and lacks injury or scienter | Not dismissed; injuries and scienter adequately pled |
| Whether breach of express contract claim is pleaded | Existence of contract, performance, breach, and damages alleged for both Plaintiffs | Fails to allege breach as to each plaintiff and performance by Reinhardt | Not dismissed; pleadings support breach of express contract |
| Whether breach of implied covenant claim is viable | Allegations show conduct that interferes with contractual benefits include a hostile environment and bureaucratic obstruction | No factual detail to show hostility or interference | Not dismissed; allegations plausibly show interference with Minimum Pay |
| Whether UCL claim premised on Labor Code § 226 is viable | Adequate § 226 violations support UCL claim | Failure to allege injury or scienter defeats UCL | Not dismissed; § 226 allegations support the UCL claim |
| Whether the prayer for ‘maximum rates promised’ may be struck or limited | The term refers to the rate in effect at each failure date | Prayer should be struck as unavailable as a matter of law | Rule 12(f) not proper to strike; clarified meaning to reflect official rate in effect at each failure date |
Key Cases Cited
- Johnson v. Riverside Healthcare Sys., 534 F.3d 1116 (9th Cir. 2008) (standard for Rule 12(b)(6) plausibility)
- Navarro v. Block, 250 F.3d 729 (9th Cir. 2001) (pleading rules and plausibility analysis)
- Marceau v. Blackfeet Hons. Auth., 540 F.3d 916 (9th Cir. 2008) (context for Rule 12(b)(6) pleading standard)
- Vignolo v. Miller, 120 F.3d 1075 (9th Cir. 1997) (pleading requirements and notice)
- In re Gilead Scis. Sec. Litig., 536 F.3d 1049 (9th Cir. 2008) (pleading standards; plausibility)
- Sprewell v. Golden State Warriors, 266 F.3d 979 (9th Cir. 2001) (pleading requirements for plausibility)
- Lopez v. Smith, 203 F.3d 1122 (9th Cir. 2000) (Rule 8 pleading standards and real party in interest)
- Gompper v. VISX, Inc., 298 F.3d 893 (9th Cir. 2002) (fraud and pleading standards)
- Starr v. Baca, 652 F.3d 1202 (9th Cir. 2011) (pleading standard after Iqbal and Twombly)
- Kransco v. American Empire Surplus Lines Ins. Co., 23 Cal.4th 390 (Cal. 1999) (implied covenant standards in CA)
- Marsu, B.V. v. Walt Disney Co., 185 F.3d 932 (9th Cir. 1999) (implied covenant scope; hostility not required)
- Carma Developers (Cal.), Inc. v. Marathon Development Cal, Inc., 2 Cal.4th 342 (Cal. 1992) (implied covenant limits; contract-based duties)
- Guz v. Bechtel Nat’l, Inc., 24 Cal.4th 317 (Cal. 2000) (limits on implied covenant duties)
- Cel-Tech Communications, Inc. v. Los Angeles Cellular Telephone Co., 20 Cal.4th 163 (Cal. 1999) (UCL framework; unlawful/unfair/fraudulent acts)
- Kwikset Corp. v. Superior Court, 51 Cal.4th 310 (Cal. 2011) (UCL three-prong framework)
- Durell v. Sharp Healthcare, 183 Cal. App.4th 1350 (Cal. App. 2010) (unlawful/unfair/fraudulent predicates for UCL)