Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caed-2_09-cv-02849/USCOURTS-caed-2_09-cv-02849-0/pdf.json

Nature of Suit Code: 710
Nature of Suit: Fair Labor Standards Act
Cause of Action: 15:1938 Fair Labor Standards Act

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IN THE UNITED STATES DISTRICT COURT 

FOR THE EASTERN DISTRICT OF CALIFORNIA 

DANIEL VASQUEZ and WAYNE 

CUTHILL, on their own behalf 

and on behalf of a class of 

similarly situated persons 

pursuant to F.R.C.P. 23 and 23 

U.S.C. §216, and on behalf of 

the General Public, 

 Plaintiffs, 

 v. 

Panella Trucking, L.L.C., a 

California limited liability 

corporation, 

 Defendant. 

______________________________/

 

Case No. 09-cv-02849-JAM-KJM 

ORDER DENYING DEFENDANT’S 

MOTION TO DISMISS AND STRIKE

This matter comes before the Court on a Motion to Dismiss 

and/or Strike by Defendant Panella Trucking, L.L.C. 

(“Defendant”). Defendant seeks to dismiss six out of seven 

claims in Plaintiffs Daniel Vasquez’ and Wayne Cuthill’s 

(“Plaintiff’s”) class action Complaint, pursuant to Federal Rule 

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of Civil Procedure 12(b)(6), and to dismiss or strike all Rule 

23 class action allegations pursuant to Federal Rule of Civil 

Procedure 12(f). Plaintiffs oppose the motion.1

FACTUAL AND PROCEDURAL BACKGROUND 

Plaintiffs were truck drivers in San Joaquin, California, 

employed by Defendant for intra-state transport of goods. 

Plaintiffs allege that they and a class of similarly situated 

individuals were denied overtime pay, denied twice-monthly pay, 

denied meal and rest breaks, and denied unpaid wages at layoff 

or resignation. Plaintiffs allege that all truck drivers engaged 

in the intra-state transport of goods, except those engaged in 

the transport of produce from the field where such produce was 

harvested in its natural state, were subject to these policies. 

Plaintiffs bring one federal law collective action claim for 

violation of the Fair Labor Standards Act (“FLSA”), 29 U.S.C. 

§207, and six state law class claims for violation of California 

Labor Code Sections 204, 201, 202, 226, 226.7, and the 

California Business and Professions Code §§ 17200 et seq. 

1

 The motion was determined suitable for decision without oral 

argument pursuant to E.D. Cal. L.R. 230(g). Additionally, 

Defendant filed a 12 page Reply brief in violation of this 

Court’s Order Regarding Page Limits (See Doc. 6, Ex. 3). 

Attorneys for Defendant are sanctioned in the amount of $100, 

payable to the Clerk of the Court within ten days. 

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Defendant seeks to dismiss all six state law claims, and dismiss 

or strike all allegations pertaining to a Rule 23 class action. 

I. OPINION 

A. Legal Standard

 In considering a motion to dismiss, the court must 

accept the allegations in the complaint as true and draw all 

reasonable inferences in favor of the plaintiff. Scheur v. 

Rhodes, 416 U.S. 232, 236 (1974), overruled on other grounds by

Davis v. Schere, 468 U.S. 183 (1984). Assertions that are mere 

“legal conclusions,” however, are not entitled to the assumption 

of truth.” Ashcroft v. Iqbal, 129 S.Ct. 1937, 1949-50 (2009), 

citing Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). To 

survive a motion to dismiss, a plaintiff needs to plead “enough 

facts to state a claim to relief that is plausible on its face.” 

Twombly, 550 U.S. at 570. 

Upon granting a motion to dismiss, a court has discretion 

to allow leave to amend the complaint pursuant to Federal Rule 

of Civil Procedure 15(a). “Absent prejudice, or a strong showing 

of any [other relevant] factor[], there exists a presumption

under Rule 15(a) in favor of granting leave to amend.” Eminence 

Capital, L.L.C. v. Aspeon, Inc., 316 F.3d 1048, 1052 (9th Cir. 

2003). 

 Regarding a motion to strike, “Rule 12(f) provides in 

pertinent part that the Court may order stricken from any 

pleading any insufficient defense or any redundant, immaterial, 

impertinent, or scandalous matter. . . Motions to strike are 

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disfavored and infrequently granted. A motion to strike should 

not be granted unless it is clear that the matter to be stricken 

could have no possible bearing on the subject matter of the 

litigation.” Bassett v. Ruggles et al., 2009 WL 2982895, at 

*24(E.D. Cal. Sept. 14, 2009) (internal citations omitted). When 

considering a motion to strike, the court must view the pleading 

in the light most favorable to the pleading party. Ellison v. 

Autozone, 2007 WL 2701923, at *1 (N.D. Cal. Sept. 13, 2007). 

B. Supplemental Jurisdiction of State Law Claims

Defendant brings its motion to dismiss the state law claims 

in Plaintiffs’ Complaint on three grounds: that the state law 

claims predominate, that the state law claims present novel and 

complex issues, and that an FLSA opt-in collective action is 

fundamentally incompatible with a Rule 23 opt-out class action. 

Thus, Defendant argues that the Court should decline to exercise 

supplemental jurisdiction over the state law claims. 

 Pursuant to 28 U.S.C. §1367, in any civil action in which 

the district court has original jurisdiction, the district court 

also has supplemental jurisdiction over all other claims in the 

action which form part of the same Article III case or 

controversy. Wheeler v. Payless Towing, 2010 WL 148714, at *3 

(E.D. Cal. Jan. 11, 2010). “State and federal law claims form 

part of the same case or controversy when they ‘derive from a 

common nucleus of operative fact.’” Silverman v. Smithkline 

Beecham Corp., 2007 WL 3072274, at *2 (C.D. Cal. Oct. 16, 

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2007)(quoting United Mine Workers of Am. v. Gibbs, 383 U.S. 

715,725 (1966)). 

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When deciding whether to take jurisdiction of state law 

claims, the Court must consider a number of factors. The Court 

may decline to exercise supplemental jurisdiction under certain 

joinder conditions, 28 U.S.C. §1367(b), or when (1) the state 

law claim raises novel or complex issues of state law, (2) the 

state claim substantially predominates over claims which the 

district court has original jurisdiction, (3) the district court 

has dismissed all claims over which it has original 

jurisdiction, or (4) where compelling reasons exist to justify 

declining jurisdiction. 28 U.S.C. §1367(c). See Smithkline, 2007 

WL 3072274, at *2-3. Additionally, the Court must balance the 

principles of judicial economy, fairness, convenience, and 

comity. Meza v. Matrix Servicing, 2010 WL 366623, at *3 (E.D. 

Cal. Jan. 26, 2010)(citing Acri v. Varian Associates, Inc., 114 

F.3d 999, 1001(9th Cir. 1997)). 

Defendant argues that the state law claims predominate over 

the federal claim, because there are six state law claims and 

only one federal claim. The state claims also have a longer 

statute of limitations, and Defendant argues they would require 

more extensive discovery. The Court finds these arguments to be 

premature. At this stage of the proceedings, the Court is unable 

to determine as a matter of law that the state law claims 

predominate over the federal claim. No FLSA or Rule 23 class has 

been certified yet, and the case is only at the initial pleading 

stage. See Smithkline, 2007 WL 3072274, at *3 (declining to find 

state claims predominant over an FLSA claim at the initial 

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pleading stage); Hoffman v. Construction Protective Services, 

Inc., 2004 WL 562136, at *7 (C.D. Cal. July 13, 2004) (declining 

to find state claims predominant over an FLSA claim before the 

size of FLSA class had been determined). Defendant also argues 

that the state law claims present novel and complex issues that 

have not been widely litigated. However, considering the 

allegations of the Complaint in the light most favorable to 

Plaintiffs, none of the allegations or claims appear 

particularly novel or complex. The state law violations are for 

wage and hour issues that are regularly addressed by state and 

federal courts. California Labor Code §226.7, which Defendant 

cites as an example of a code section where the law is 

uncertain, has been widely litigated and is currently before the 

California Supreme Court for interpretation. See Richards v. 

Ernst & Young LLP, 2010 WL 682314, at *4 (N.D. Cal. Feb. 24, 

2010). 

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Defendant argues that the state and federal claims do not 

arise from a common nucleus of operative fact, and that the 

state law claims would require substantial additional inquiry 

that is not related to the single FLSA claim for failure to pay 

overtime. However, as Plaintiffs explain, the state law claims 

arise from the same activity as the FLSA claim, because 

Defendant’s alleged failure to pay FLSA-mandated overtime pay 

triggered numerous state law violations. 

Lastly, Defendant argues the Court should decline 

supplemental jurisdiction in the interest of judicial economy. 

Defendant argues for declining jurisdiction over state law 

claims because of the broad scope of the state law claims, an 

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argument that the Court does not find persuasive at this early 

stage of the pleadings. Additionally, in Defendant’s Reply it 

also raises the argument for the first time that a similar class 

action was filed in state court, and requests judicial notice of 

the case. The Court notes that the state court action was filed 

by different named plaintiffs, involves some similar and some 

different claims, and may not encompass the same class of 

workers. 

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 In short, the Court does not find Defendant’s arguments 

sufficiently persuasive to decline supplemental jurisdiction at 

this initial pleading stage. Accordingly, the Court denies 

Defendant’s motion to dismiss on this ground. 

C. FLSA and Rule 23 Actions

Plaintiffs seek to bring a collective action under the FLSA 

and a state law class action under Rule 23. Defendant argues 

that Plaintiffs cannot bring both opt-in and opt-out class 

claims in the same action, because they are fundamentally 

incompatible. “FLSA and Rule 23 provide different means for 

participating in a class action: FLSA provides for participation 

on an opt-in basis (see §216(b)), while Rule 23 requires that 

nonparticipating class members affirmatively opt out of the suit 

(see FRCP 23(c)(1)(B)).” Baas v. Dollar Tree Stores, Inc., 2007 

WL 2462150, at *3 (N.D. Cal. Aug. 29, 2007). However, “had 

Congress believed that allowing a state opt-out action to go 

forward simultaneously with an opt-in FLSA action would 

undermine the statute, it would not have expressly indicated 

that the FLSA does not preempt state labor laws.” Murillo v.

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Pacific Gas & Electric Company, 2010 WL 797009, at *4 (E.D. Cal. 

March 5, 2010). Additionally, “Congress certainly intended for 

FLSA collective actions to proceed on an opt-in basis; but there 

is no indication that Congress intended to limit the scope of 

supplemental jurisdiction over other claims arising out of the 

same case or controversy.” Smithkline, 2007 WL 3072274, at *2. 

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Defendant cites primarily to out-of-circuit cases in which 

courts held the FLSA and Rule 23 to be incompatible. This is a 

view taken in some circuits, however within the Ninth Circuit 

courts generally do not find the FLSA and Rule 23 to be 

fundamentally incompatible. See e.g. Dollar Tree Stores, 2007 WL 

2462150, at *4; Murillo, 2010 WL 797009, at *3-4; Smithkline, 

2007 WL 3072274, at *2. Accordingly, this Court declines to 

dismiss Plaintiffs’ Rule 23 claims on the basis of 

incompatibility with the FLSA. 

C. Rule 23 Class Action Allegations

Defendant argues that Plaintiffs should be allowed to 

proceed on the FLSA claim only, and the Court should strike all 

Rule 23 allegations from the Complaint. It is premature to 

strike the Rule 23 class action allegations before a motion for 

class certification has come before the Court. Smithkline, 2007 

WL 3072274, at *2. Because courts within the Ninth Circuit 

routinely allow hybrid Rule 23 and FLSA class actions to 

proceed, (see e.g. Smithkline, 2007 WL 3072274; Hoffman, 2004 WL 

562136; Murillo, 2010 WL 797009; Dollar Tree Stores, 2007 WL 

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2462150), the Court will not strike the Rule 23 allegations from 

the Complaint. 

III. ORDER 

 For the reasons set forth above, Defendant’s Motion to 

Dismiss and/or Strike is DENIED. 

IT IS SO ORDERED. 

Dated: March 24, 2010 

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