Sims v. AT & T Mobility Services LLC
955 F. Supp. 2d 1110
E.D. Cal.2013Background
- Plaintiff Phillip Sims, a former Retail Store Manager, alleges unlawful exempt classification and seeks unpaid wages, overtime, meal/rest break compensation, statutory penalties, UCL relief, and punitive damages.
- Defendant removed the action to federal court under CAFA; plaintiff moved to remand. The court stayed the case pending the Supreme Court’s decision in Standard Fire v. Knowles and later lifted the stay.
- The core jurisdictional question was whether a plaintiff can stipulate to damages below CAFA’s $5,000,000 threshold on behalf of absent class members; Standard Fire held such stipulations ineffective.
- Defendant moved to dismiss the Seventh (conversion of unpaid wages) and Eighth (UCL) causes of action and to strike punitive damages.
- The court addressed (1) CAFA jurisdiction (denying remand), (2) whether Labor Code remedies preempt common-law conversion claims, (3) viability and pleading sufficiency of conversion and UCL claims, and (4) punitive damages tied to conversion.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Federal jurisdiction under CAFA | Stipulation limiting recovery should support remand | Stipulation cannot defeat CAFA jurisdiction | Remand denied; Standard Fire controls, stipulations ignored for CAFA threshold |
| Whether Labor Code preempts common-law claims for unpaid wages ("new-right exclusive-remedy") | Labor Code does not preempt; common-law remedies (contract/quantum meruit, conversion) survive | Labor Code creates new exclusive remedy for wage claims; conversion barred | Court predicts California Supreme Court would find Labor Code remedies cumulative where common-law rights existed; preemption rejected |
| Viability of conversion claim for unpaid wages | Conversion is available because earned wages are the employee's property; Cortez and Lu support | Conversion not permitted; prior district cases found conversion barred | Conversion claim is legally viable under California law, but current pleading fails to identify a specifically ascertainable sum; dismissal with leave to amend |
| UCL claim for restitution of unpaid wages (Cal. Bus. & Prof. Code § 17200) | Permissible under Cortez to seek restitution for unpaid wages | Insufficiently pled because no quantifiable sum alleged | UCL claim survives; motion to dismiss denied |
| Punitive damages premised on conversion | (No opposition on this point) | Punitive damages tied solely to conversion should be dismissed | Punitive damages dismissed with leave to amend |
Key Cases Cited
- Standard Fire Ins. Co. v. Knowles, 133 S. Ct. 1345 (2013) (stipulations limiting class recovery cannot be used to defeat CAFA jurisdiction)
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007) (plausibility pleading standard)
- Ashcroft v. Iqbal, 556 U.S. 662 (2009) (legal conclusions not entitled to assumption of truth)
- Rojo v. Kliger, 52 Cal.3d 65 (1990) (statutory remedy exclusive only when right is newly created; if right existed at common law, statutory remedy is cumulative)
- Cortez v. Purolator Air Filtration Prods. Co., 23 Cal.4th 163 (2000) (earned wages become employee property; UCL restitution may recover unpaid wages)
- Lu v. Hawaiian Gardens Casino, Inc., 50 Cal.4th 592 (2010) (employees may pursue conversion to recover gratuities; supports availability of conversion for wage-type interests)
- PCO, Inc. v. Christensen, Miller, Fink, Jacobs, Glaser, Weil & Shapiro, LLP, 150 Cal.App.4th 384 (2007) (money is subject to conversion only if a specific, identifiable sum is involved)
- Korea Supply Co. v. Lockheed Martin Corp., 29 Cal.4th 1134 (2003) (discusses quantifiable monetary relief under § 17200)
- Martinez v. Combs, 49 Cal.4th 35 (2010) (historical and statutory context of California wage laws)