states constitution the normal issue is whether there is an irreconcilable conflict between federal and state law here that really isn't even in dispute there was no trial there was no hearing evidentiary hearing the labor defendants never put any evidence on we submitted in support of our motion for plenary injunction and in response to the motion to motions to dismiss a very extensive declaration by a c p a david bell from a large c p a firm thirty two pages eighty eight paragraphs sixty four exhibits where we have submitted every federal authority that we could and in dismissing our lawsuit without conducting any hearing the federal judge comes up with three arguments one is that there is no standing and the case is not right because there is not a threat of prosecution this statute does have a criminal component section three hundred and fifty four of the california labor code specifically imposes criminal sanctions on all of the nobody has threatened them with prosecuting them regarding it right well that's interesting your honor ah because an exhibit early to our complaint which is what i have referred to as the authority of authoritative construction  industry at the time sought consideration of what this statute actually meant in your honor if you go to the last page of the authoritative construction and that's phone records page thirty three after they go through the analysis this is written by miles blocker chief counsel for the california deal or suit it says this having considered this issue the legislature decided how the law should be changed it is our mandate as a labor law enforcement agency to enforce these laws as they are written regardless of any person's view or whether they are fair to business or labor the public should never expect any less from our division now so that would mean then that  greatest says injury at this point would be fear of the violation absolutely not your honor as we have pointed out and we have submitted in our verified complaint we have tempered the operation of the business but they're not going full blown out because they don't know what laws to comply with why don't they just comply with the policy that they happened well your honor what is that policy the policy issues that the money is supposed to go directly to the bar manager which st of all from a just general operational standpoint that really isn't how this industry operates it's not a bar manager that's trying to sell a dance to a customer the customer doesn't want a dance from a bar manager they want the money they want to get a dance from the entertainer let's say we'll issue em for machine guns to every one of our support staff with orders to shoot to kill if they see money being exchanged from a customer to a dancer so that it never occurs there is no way he that my clients ever know what that money is for that money can be that you know a bit far afield here with the machine  question as i understood as you got a policy yes your honor why not use your own policy because we can't control the customers the customers want to give the money to the entertainers and quite frankly we can't control same posture as you are there is a law someone doesn't like the law for good reason a business or whatever but there's no threat to enforce it there's no pre enforcement activity there is really just nothing yet and so all those cases tell us and instruct us that we should dismiss the complaint for lack of standing or rightness why is your case different shirt so let's take a look at st of all and i just wanted to finish on the authoritative construction because mr locke here has carbon copies down here  they go to the industry these are blind carbon copies and so what the last one on here is all d l s attorneys that's a shot over the bow a shot across the bow there intending to enforce this now it doesn't get in force for twenty years because the entertainers are employees until my client comes along and makes the d n c his employees but now what we have to do is we have to consider that in the thompson that as long as there is a criminal component there we do not have to wait until prosecution we can litigate ahead of time we can have preen foresman actions but more importantly we have to take a look at this in the context of what the u s supreme court said in babbitt and in babbitt they say three things number one is our concern imaginary our concern is not imaginary  a says they can't even figure out how to file tax returns because of this is a wholly speculative no it's not i'm going to get that but the problem with that that the end isn't going to always be there because when the when the are playing mandatory chargers and they're paying tips there is no way for my client to know whether a specific payment is a mandatory charge or a tip through you may not know but there's a way for you to know where you but there isn't your honor labor code section three hundred and fifty one specifically prohibits us from collecting the tips you can say just collect all the money but you're seeing impose a rule we have a rule if there would have been an evidentiary hearing we could have gone over everything that the club does in order to ensure this and irrespective of that it still honor again looking at stuff from the rd element is do they specifically disavow it intention of enforcing and they have all three prongs under stuff will we get to bring our challenge but most importantly your honor are the paga cases that we have referred to both in response to the motion to dismiss as well as the motion to take judicial notice that this court granted last week in those actions which are filed on behalf of the state of california there come up here and argue those actions are now behalf of the state of california why because the state made the argument in these keeney in keys that actions are on behalf of the state of california therefore they are not subject to binding arbitration agreements of employees and the state is right in that horse to get around last year's supreme court decision in epic systems that said that you can in fact impose mandatory arbitration agreements on employees so they you know under judicial  and here say oh no these really aren't on behalf of the state so the state and by the way as we pointed out in our briefing the state gets seventy five percent of the penalties the praga penalties the private attorney  get those so those actions have been brought i have to go back to the threat of prosecution because it has to be under thomas and the genuine threat of imminent prosecution so i don't think that you have any prosecutions that have been you know once giving you the letter saying you will be prosecuted unless you stop this practice right and on the other prosecutions as you are distinguishing yourself are are different from what we have here so what is the imminent threat that you're under your honor as mr shinde points out in his declaration if we are not able to appropriately distinguish service charges mandatory service charges from tip income those are criminal penalties even under the internal revenue code those can be get penalties for the tax preparers under circular to thirty you know this has reminds me a lot of waiter tip cases in that in the tax arena and of course the solution there posed by the i r s and and practical that there is a practical solution to segregation that then doesn't expose the employer to penalties and other problems and you're saying well there's no practical solution yet your honor it and i i love that you came up with that example because that's the example i was going to give let's assume that maybe two thousand five hundred and nine so that any money given to a waitress is his or hers to keep and we all know that the waitresses bring the food get the money take that money and the money that are the mandatory charges of the business go to the business there is no practical way again given labor code section three hundred and fifty one dollars that we can that we cannot kalat any portion of an employee's tips there is no way when we're looking at eight transaction a cash transaction between customer and a dancer is that advance fee is that the mandatory charge or is that the temp if it's the mandatory charge we need to jump on it and we need to get that money we need to preclude that if you want to save your remaining just your ira thank your honour's be a please the court i'm jeffery rich from the office of california attorney general appearing on behalf of defendants just to pick up were we left off it seems that as an example and this is not directly germane to the issues the issues before this court because the issues before this court are number one does the complaint allege sufficient  controversy and or does it allege sufficient facts to enjoy x party young because i don't think there's any dispute this complaint would be barred by the th amendment but for the operation of your application of x party one but just to pick up on this practical notion it seems to me that it would be a very simple manner of yes an example having tickets issued to a bar customer that said about what's in the chanel declaration is i believe irrelevant to this court's analysis because we know we're just looking at the allegations of the complaint on their face in regard to that the requests for judicial notice asking for the court to take notice of certain private attorney general actions those actions are completely irrelevant because they're sued the individual defending hands in their individual capacity because of concerns about what if amendment an ex parte young in that regard x party young requires an allegation of an ongoing violation of federal law this is very seldom law we have a number of supreme court decisions in that regard failure to make that allegation and that fits in with the general problem here that there is no there there is nothing here there is no hear hear as the court knows there is no threat of  prime excuse the imminent prosecution well and they could just use their in force their own policy right and then they wouldn't even well yes i am that's right i mean i suppose the ticket idea is one way we don't get into the details of solving that no that's and that's not our job here but i wanted to make that point another point would be of point if we went and sought maybe a business consultant to come up with a business model who are internal controls are in gives an example scuse me from younger v harris of what would be a clear threat of enforcement referring to someone that is in the  action or activity of handing out handbills and that is that titian or his alleged threats of prosecution that cannot be cured to arise as a mansion yury or speculative he has been twice warned to stop hand billing that he claims is constitutionally protected and has been told by the police that if you again and bills at the shopping center in disobeys that warning to stop he will likely be prosecuted that's an example of what constitutes a imminent credible threat of prosecution not even remotely here not the letter that has the c c for of the initials of the attorneys on the bottom of the letter that he mentioned i mean that that is a well number one that's eighteen year old  number two why are there no enforcement actions that generated from the letter number three why did plaintiff not go to the labor commission say let's sit down and talk about how you  this visit the or business apparently plaintiff never attempted to do that but a letter standing by itself how can that be threat of prosecution a letter that says we're going to prosecute you of course it didn't say  to prosecute plaintiff that's the problem now i agree if if if there was a letter coming from one of my clients from defendants directed to this bar well that can't possibly be a threat of prosecution we would have the federal courts would be standing room only there wouldn't be enough time or or resources to handle all the case asking well in fact in fact not just implicitly the complaint expressly states language to the effect that they're asking for an advisory opinion and we mentioned that in our brief i that would be paragraphs us seven d and eighty eight dollars where the allegation is we're concerned about this transaction we would like to get an opinion from the court whether it is a legal well i believe plaintiff should have gone to its counsel got an opinion or gone to the agency counsel rather than doing those two things is coming to the district lest in the world we're asking for is an advisory opinion as we pointed out you know verified complaint there are garnishments that are going on at this club in regard to the dancers so we have to comply with federal law that makes a difference whether something is a service charge or a tip or so then just and force your policy yes your honor but as i explained to you we can't because we do not know what money is a service charge or a tip well then you'll have to figure that how to write there must be some possibility for you doing that it's not it's not an end possibility well your honor you know quite frankly isn't that what an evidentiary hearing is for you know brother coun sits there puts out a bunch of hypotheticals isn't that how we're supposed to vet this not if it's for a preview of coming attractions and not something that's ready for adjudication well your honor this absolutely is ready for adjudication and it's not a coming attraction because as we've pointed out you know he's he says you know they should've asked for a let you know they should have come to the department that's what this is they were one thousand years ago and that's th imminent threat a letter from eighteen years ago or another and under babbitt it says do they disavow any intention of enforcing and they have never done that that's one of the elements of babbitt mr in the state that converted dancers to employees and therefore put at issue a b two thousand five hundred and nine we have to comply with the long the state law is different than the federal law there's simply no doubt about that this is not an advisory opinion we have accountants they don't know what to do we have book keepers dealing with garnishments they don't know what to do we have book keepers who don't know each the d n c supposed to be part or at least give us another injury hearing on the motion for pulling the injunction all right thank you we have your argument and mine both counsels argument the case just argued is submitted take your ontario food and beverage