Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caed-2_06-cv-02376/USCOURTS-caed-2_06-cv-02376-18/pdf.json

Nature of Suit Code: 190
Nature of Suit: Other Contract Actions
Cause of Action: 28:1332 Diversity-Breach of Contract

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UNITED STATES DISTRICT COURT

FOR THE EASTERN DISTRICT OF CALIFORNIA

JASON CAMPBELL, et al.,

Plaintiffs,

NO. CIV. S-06-2376 LKK/GGH

v.

PRICEWATERHOUSECOOPERS,

Defendant.

 /

SAMUEL BRANDON KRESS, et al.,

Plaintiffs,

NO. CIV. S-08-965 LKK/GGH

v.

PRICEWATERHOUSECOOPERS,

Defendant.

 /

LAC ANH LE,

Plaintiff,

NO. CIV S-08-997 LKK/EFB

v.

PRICEWATERHOUSECOOPERS,

Defendant.

O R D E R

 /

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Pending before the court is defendant PricewaterhouseCoopers

LLP’s (PwC’s) motion to consolidate in Campbell v.

PricewaterhouseCoopers, 06-2376, Le v. PricewaterhouseCoopers, 08-

997, and Kress v. PricewaterhouseCoopers, 08-965, as well as two

motions to strike and/or dismiss in Le and Kress. Campbell is a

class action against PwC for unpaid overtime, meal and rest break

violations, wage statement claims, and waiting time penalties.

After the court certified a class of individuals who worked as

unlicensed associates in PwC’s Attest division, two other putative

class actions (Le and Kress) alleging similar overtime claims were

transferred to this district. PwC has now filed a motion to

consolidate all three actions as well as two motions to strike

and/or dismiss in Le and Kress, arguing that those class actions

are collaterally estopped by virtue of the Campbell certification

order. The court resolve the matters on the parties’ papers and

after oral argument. For the reasons explained below, the motion

to consolidate and the motions to strike and/or dismiss are granted

in part and denied in part.

I. Background

A. Campbell Certification

On March 25, 2008, the court granted in part the Campbell

plaintiffs’ motion for class certification, certifying a class of

individuals who worked as unlicensed associates in PwC’s Attest

division at any time from October 27, 2002 to the present and were

classified as exempt employees. Campbell v.

PricewaterhouseCoopers, LLP, No. CIV. S-06-2376 LKK/GGH, 2008 WL

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The court added the caveat that while plaintiffs need not 1

possess personal information regarding the duties performed by

these other employees, the plaintiffs’ own declarations and

depositions were the only sources of information they submitted on

this issue. Campbell, 2008 WL 818617, at *17, n.21. 

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818617 (E.D. Cal. Mar. 25, 2008). As the court noted, PwC is

divided into three lines of service: Assurance, Tax, and Advisory.

Plaintiffs had initially sought to certify a class that would

encompass two of these lines of service, Assurance and Tax. In

addition, plaintiffs sought to certify a class that would include

employees with the titles of both associate and senior associate.

The court declined to certify a class outside the Attest

division of the Assurance line of service (which, in short,

conducts audits). Based on the record submitted, the court found

that there were “significant differences in the work performed

between divisions and between lines of service.” Campbell, 2008

WL 818617, at *3. The court noted that plaintiffs had submitted

virtually no evidence of the job duties performed by employees

outside their own division, whereas defendant’s evidence indicated 1

that job duties varied across division and line of service. In

addition, defendant’s evidence also indicated that job duties

varied between associates and senior associates. 

Because of these differences in job duties, the court found

that plaintiffs had failed to show that a common question of law

or fact predominated under Federal Rule of Civil Procedure

23(b)(3). The court also noted that this issue could possibly be

viewed as a problem with respect to typicality (i.e., the

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requirement under Rule 23(a)(3) that “the claims or defenses of the

representative parties are typical of the claims or defenses of the

class”), given that plaintiffs Campbell and Sobek occupied the

position of Attest associates at PwC. Nevertheless, the court

noted that “this issue might be better framed as a problem of

predominance,” rather than typicality. Campbell, 2008 WL 818617,

at *8.

B. Le and Kress

After the court’s certification order, two other putative

class actions filed against PwC, Le and Kress, were transferred to

this district and ultimately assigned to this court. The putative

classes in Le and Kress are similar but not identical to the class

certified in Campbell.

The scope of the proposed Kress class is similar to that here.

Kress Compl. ¶ 20 (defining class as “All persons employed by

Defendants in the State of California as salaried exempt employees

to do accounting work at any time within four years of the filing

[of] this complaint to the present but who were not licensed or

certified by the State of California in the Practice of accounting

and were not paid overtime”). Unlike Campbell, however, Kress does

not include a claim for rest period violations.

The scope of the proposed Le class is broader than the class

in Campbell, because in addition to seeking certification of a

class of unlicensed California associates under California law, Le

also seeks certification of a nationwide class of unlicensed

associates under the Fair Labor Standards Act (FLSA). Le Compl.

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¶ 43. In addition, whereas the plaintiffs in Campbell only sought

to certify a class including employees in the Assurance and Tax

lines of service, the class definitions in Kress and Le contain no

similar limitation (and thus might presumably encompass the

Advisory line of service).

PwC has now filed a motion to consolidate all three actions,

premised, at least in part, on the assumption that Kress and Le

would pursue certification of at least the same class already

certified in Campbell. In their opposition to the motion to

consolidate, however, it is clear that all parties agree that those

portions of Kress and Le that overlap with the certified class in

Campbell should be stayed. In addition, the plaintiffs in Kress

and Le agree that consolidation between their two cases would be

appropriate, and have indicated that they plan to file a single

consolidated amended complaint, although they oppose consolidation

with Campbell.

PwC has also filed separate motions to strike and/or dismiss

in Kress and Le. Among other things, PwC argues that collateral

estoppel bars the relitigation of the class that the Campbell

plaintiffs attempted to certify (i.e., all associate and senior

associates within the Assurance and Tax lines of service). In

addition, PwC argues in Le that plaintiff may not use violations

of the FLSA as a basis for her UCL claims. 

II. Motion to Consolidate

A. Standard

Federal Rule of Civil Procedure 42(a) provides that "if

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actions before the court involve a common question of law or fact,

the court may . . . consolidate the actions." The decision to

grant or deny consolidation is within the discretion of the

district court. Investors Research Co. v. United States Dist.

Court for Central Dist. of California, 877 F.2d 777, 777 (9th Cir.

1989); In Re Adams Apple, Inc., 829 F.2d 1484, 1487 (9th Cir. 1987)

("consolidation is within the broad discretion of the district

court"). One of the purposes of consolidation is to avoid

unnecessary costs or delay that would result from proceeding

separately with actions involving common issues of law or fact.

See, e.g., Equal Employment Opportunity Commission v. HBE Corp.,

135 F.3d 543, 550-51 (8th Cir. 1998) (finding consolidation

appropriate because it would "avoid the inefficiency of separate

trials involving related parties, witnesses and evidence").

To determine whether to consolidate, the court “weighs the

interest of judicial convenience against the potential for delay,

confusion and prejudice.” Sw. Marine, Inc. v. Triple A Machine

Shop, Inc., 720 F. Supp. 805, 807 (N.D. Cal. 1989). Considerations

of convenience and economy must yield to a paramount concern for

a fair and impartial trial. Johnson v. Celotex Corp., 899 F.2d

1281, 1484 (2d Cir. 1990), cert. denied 498 U.S. 920 (1990).

Factors to be weighed include the risk of prejudice and confusion;

risk of inconsistent adjudications of common factual and legal

issues; burden on parties, witnesses, and available judicial

resources; delay; and expense. Id.

///

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B. Analysis

PwC argues that because all three actions involve common

questions of law and fact, (1) consolidation will improve economy

for both the court and the parties, (2) consolidation will minimize

the risk of inconsistent judgments, and (3) consolidation will not

cause any undue delay, confusion, or prejudice. In particular, PwC

argues that discovery should be consolidated among all three

actions, and the trial of the state law claims should be

consolidated. As discussed below, while the court has reservations

as to consolidating Campbell and Le/Kress, this determination

should be made at a later stage, after a motion for class

certification in Le/Kress has been resolved.

1. Economy

With respect to the first reason advanced for consolidation,

PwC argues that a consolidated trial over the state law claims

would be more economical, because there is “substantial overlap”

between the Kress and Le putative classes and the original class

sought to be certified in Campbell, as well as the claims at issue

in all three actions. Indeed, PwC characterizes the putative

classes in Kress and Le as “closely-related” to the class certified

in Campbell. To argue, as PwC now does, that it would effect a

savings of judicial economy to consolidate a trial spanning

multiple lines of service (i.e., Assurance, Tax, and possibly

Advisory), multiple divisions within each line of service (e.g.,

Attest, Systems Process Assurance, and Transactional Service,

within Assurance), and job levels (i.e., associate and senior

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At the status conference held on August 11, 2008, the 2

parties agreed to share discovery across cases so long as a

stipulated protective order, like that in place in Campbell, is

entered in Le/Kress.

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associate) is wholly at odds with what PwC previously represented

to the court in the Campbell certification proceedings. There, PwC

argued that there were significant differences in the work

performed between divisions and between lines of service, class

certification would be inappropriate, as the trial would

essentially degenerate into several mini-trials. PwC cannot have

it both ways.

In addition, all parties appear to be in agreement that

consolidated discovery would be appropriate, which can occur

without a consolidation of the cases themselves. Duplicative

discovery can be avoided by permitting discovery in each related

action to be used in all related actions. With respect to motion 2

practice, the parties may (and should) coordinate hearing dates

when appropriate, so that motions may be heard on the same day.

Accordingly, many of the efficiency gains sought to be achieved by

consolidation can also be achieved without consolidation.

2. Inconsistent Judgments

PwC also argues that there will be a risk of inconsistent

results absent consolidation. Again, however, if it is true, as

PwC previously represented to the court, that there are in fact

different job duties performed by Attest associates (the class

certified in Campbell) and by other non-Attest employees or by

Attest senior associates (the class sought to be certified in Kress

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 PwC also argues that -- in addition to inconsistent results 3

on the merits -- there would be a risk of inconsistent results as

to class certification, because the plaintiffs in Le and Kress seek

to achieve what the Campbell plaintiffs did not: certification of

a class of non-Attest employees and Attest senior associates.

Assuming for the moment that collateral estoppel does not apply,

that risk would be present regardless of whether the court grants

consolidation. (PwC could not, for example, achieve through the

backdoor of the law of the case doctrine what it could not achieve

directly through collateral estoppel.) In addition, if collateral

estoppel did not apply, the plaintiffs would seek certification on

an entirely different record than the one before the court in

Campbell. Accordingly, the judgments would not necessarily be

inconsistent.

 That said, the court also recognizes that in many instances, 4

consolidation is appropriate even where cases are at different

stages of litigation, unless a case is in fact ready for trial.

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and Le), then it is entirely possible that there would be different

results reached on the merits. But there would be nothing

necessarily inconsistent with those judgments, because they would

be decided on the basis of different records.3

3. Delay, Confusion, or Prejudice

Finally, PwC argues that consolidation would not cause any

undue delay, confusion, or prejudice. It is clear that

consolidation of the trial dates in all three cases would

significantly delay the trial date already set in Campbell

(currently scheduled for March 3, 2009), given that Kress and Le

are at an earlier stage of preparedness. In order for those latter

cases to “catch up,” there would likely first be pleadings motions,

pre-certification discovery, class certification proceedings,

possible Rule 23(f) petitions for appeal, notice proceedings, and

actual class notice. This delay would prejudice the plaintiffs in

Campbell. Particularly where the savings to judicial economy are 4

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See, e.g., Internet Law Library, Inc. v. Southridge Capital Mgmt.,

LLC, 208 F.R.D. 59, 62 (S.D.N.Y. Apr. 11, 2002). 

To the extent these arguments are duplicated in Le, the 5

court’s analysis in Kress applies equally to the other motion.

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dubious, this consideration acquires even greater weight.

For all these reasons, the motion to consolidate Campbell and

Le/Kress is DENIED without prejudice to renewal after the class

certification issues have been resolved in those latter cases. As

the plaintiffs in Kress and Le have indicated a willingness to

consolidate between their own cases (and have expressed a desire

to file a consolidated, amended complaint), the motion to

consolidate is GRANTED as to them.

III. Motion to Strike and Dismiss in Kress

PwC has also filed a motion to strike and motion to dismiss

in Kress. The motion (as with the motion filed in Le) principally

argues that collateral estoppel bars plaintiffs’ class allegations

to the extent they are inconsistent with the certified class in

Campbell. In addition, PwC argues that the California Labor Code

violations alleged in the complaint cannot serve as a basis for

plaintiff’s Unfair Competition Law (UCL) claim; that references to

the appointment of a receiver must be stricken; that a four-year

class period is improper; that all references to “Doe” defendants

are improper; and that the request for punitive damages is also

improper and must be stricken.5

///

///

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A. Standard

Rule 12(f) authorizes the court to order stricken from any

pleading "any redundant, immaterial, impertinent, or scandalous

matter." A party may bring on a motion to strike within 20 days

after the filing of the pleading under attack. The court, however,

may make appropriate orders to strike under the rule at any time

on its own initiative. Thus, the court may consider and grant an

untimely motion to strike where it appears proper to do so. See 5A

Wright and Miller, Federal Practice and Procedure: Civil 2d § 1380.

Motions to strike are generally viewed with disfavor, and will

usually be denied unless the allegations in the pleading have no

possible relation to the controversy, and may cause prejudice to

one of the parties. See 5A C. Wright & A. Miller, Federal Practice

and Procedure: Civil 2d § 1380; See also Hanna v. Lane, 610 F.

Supp. 32, 34 (N.D. Ill. 1985). If the court is in doubt as to

whether the challenged matter may raise an issue of fact or law,

the motion to strike should be denied, leaving an assessment of the

sufficiency of the allegations for adjudication on the merits.

See 5A Wright & Miller, at § 1380.

B. Analysis

1. Collateral Estoppel

PwC seeks to estop the Kress (and Le) plaintiffs from pursuing

certification of a class of California PwC employees, i.e., the

class that the Campbell plaintiffs sought to certify. The doctrine

of collateral estoppel prevents the relitigation of issues

previously argued and resolved in a prior proceeding. Hydranautics

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 Two alternate but independently sufficient bases for the 6

decision also satisfy this requirement. In re Westgate-California

Corp., 642 F.2d 1174, 1176-77 (9th Cir. 1981).

 Unlike the approach adopted by California and other 7

jurisdictions, the Ninth Circuit has held that a decision may be

final for purposes of collateral estoppel even if not final for

purposes of appeal under 28 U.S.C. § 1291. Compare Luben Indus.,

Inc. v. United States, 707 F.2d 1037, 1040 (9th Cir. 1983) with

Abelson v. Nat’l Union Fire Ins. Co., 28 Cal. App. 4th 776, 787

(1994) (“A judgment is not final for purposes of collateral

estoppel while open to direct attack, e.g., by appeal.”), J.R.

Clearwater v. Ashland Chem. Co., 93 F.3d 176 (5th Cir. 1996) 

(declining to adopt Restatement’s position that “something less

than section 1291 finality is sufficient for purposes of issue

preclusion”), and GMC Pick-up Truck Fuel Tanks Prods. Liab. Litig.,

134 F.3d 133, 146 (3d Cir. 1998).

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v. FilmTec Corp., 204 F.3d 880, 885 (9th Cir. 2000). Federal law

controls the collateral estoppel analysis where a federal court has

decided the earlier case. See McQuillion v. Scharzenegger, 369

F.3d 1091, 1096 (9th Cir. 2004).

 Under both California and federal law, a prior court decision

will have preclusive effect under the doctrine of collateral

estoppel where (1) the issue to be litigated is identical to that

decided in a prior proceeding, (2) the issue is actually litigated

in a prior proceeding, (3) the issue is necessarily decided at the

prior proceeding, (4) the decision was final on the merits, and 6 7

(5) the party against whom collateral estoppel is asserted was a

party or in privity with a party to the first proceeding.

Hydranautics, 204 F.3d at 885; Castillo v. City of Los Angeles, 92

Cal. App. 4th 477, 481 (2001). The party asserting collateral

estoppel bears the burden of showing what the prior judgment

determined. Hydranautics, 204 F.3d at 885.

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“[I]n deciding whether to apply collateral estoppel, the court

must balance the rights of the party to be estopped against the

need for applying collateral estoppel in the particular case, in

order to promote judicial economy by minimizing repetitive

litigation, to prevent inconsistent judgements which undermine the

integrity of the judicial system, or to protect against vexatious

litigation.” Clemmer v. Hartford insurance Co., 22 Cal. 3d 865,

875 (1978).

Here, the barrier to application of collateral estoppel is the

element of privity. “[A] nonparty may be bound by a judgment

because she was ‘adequately represented by someone with the same

interests who [wa]s a party’ to the suit.” Taylor v. Sturgell, --

U.S. --, 128 S. Ct. 2161, 2172 (2008) (quoting Richards v.

Jefferson County, 517 U.S. 793, 798 (1996)) (modifications in

original). This includes properly conducted class actions. Id.

“[A]dequate representation is a due process prerequisite to

precluding a litigant from his day in court if he was not a party

to the earlier litigation.” Headwaters Inc. v. U.S. Forest Serv.,

399 F.3d 1047, 1054 (9th Cir. 2005). “Due process requires that

the nonparty have had an identity or community of interest with .

. . the party in the first action.” Citizens for Open Access Etc.

Tide v. Seadrift Ass’n, 60 Cal. App. 4th 1053, 1070 (internal

quotation marks omitted).

It is not at all clear that the interests of the Campbell

plaintiffs were fully and completely aligned with the class that

plaintiffs here seek to represent. In the Campbell certification

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order, the court noted that one could view the dissimilarity

between job positions as a problem of typicality under Rule

23(a)(3). If Campbell and Sobek were “atypical” representatives,

it is difficult to conclude that they had identical interests with

those who they were deemed inadequate to represent. Accordingly,

the court declines to apply collateral estoppel.

2. California Labor Code Sections 201, 202, 203, & 226

PwC also argues that the penalty provisions provided for

through California Labor Code sections 201 (immediate payment of

wages upon discharge or layoff), 202 (immediate payment of wages

upon resignation), 203 (waiting time penalties) & 226 (itemized

wage statements) are not cognizable under the UCL. The court

agrees. The only remedies available to a private plaintiff under

the UCL are injunctive relief and restitution. The remedies

afforded by the Labor Code sections identified above are penalties,

not restitution. See Tomlinson v. Indymac Bank, 359 F. Supp. 2d

891, 895 (C.D. Cal. 2005) (“The Court agrees . . . that the remedy

contained in [Labor Code] section 203 is a penalty because section

203 does not merely compel Indymac to restore the status quo ante

by compensating Plaintiffs for the time they worked; rather, it

acts as a penalty by punishing Indymac to pay Plaintiffs an

additional amount. This type of payment is clearly not

restitutionary, and thus cannot be recovered by the UCL.”). While

plaintiffs respond that the UCL’s equitable remedies are cumulative

and in addition to any remedy provided by the underlying statute,

Cal. Bus. & Prof. Code § 17205, UCL remedies are cumulative only if

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This is a somewhat technical distinction, however, because 8

plaintiffs will be able to assert a four-year class period for any

claims that may be brought under the UCL.

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the underlying statute provides for restitution -- which the Labor

Code sections identified above do not. Instead, the provide for

penalties, which are not recoverable under the UCL.

3. Appointment of Receiver

Although plaintiffs seek the appointment of a receiver under

their UCL claim, plaintiffs have no alleged facts sufficient to

show irreparable injury or inadequacy of other remedies, which is

required for this “drastic” remedy. See City & County of San

Francisco v. Daley, 16 Cal. App. 4th 734, 745 (1993). Accordingly,

the motion to strike the reference to appointment of a receiver

under the UCL claim is granted.

4. Four-Year Class Period for All Claims

Plaintiffs have also improperly alleged a four-year class

period for all of their claims, rather than properly confining this

four-year class period to only their UCL claim (which also seeks

restitution for unpaid overtime wages). Accordingly, the motion 8

to strike is granted as to all improper four-year references in the

complaint.

5. “Doe” Defendants

As plaintiffs concede, all references to “Doe” defendants must

be stricken from the complaint. See Gillespie v. Civiletti, 629

F.2d 637, 642 (9th Cir. 1980).

///

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As the court noted in Campbell, plaintiffs may be required 9

to elect a remedy where there is a statutory penalty for conduct

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6. Punitive Damages

PwC also argues that all requests for punitive damages should

be stricken. The court previously addressed a similar argument in

Campbell. As the court noted, when a statute imposes a penalty,

that imposition generally does not foreclose recovery of punitive

damages. Trumbull & Trumbull v. ARA Transportation, Inc., 219 Cal.

App. 3d 811, 826 (1983). If, however, a new right that did not

exist at common law is created by statute and a remedy for the

violation of that right is provided, “such remedy is exclusive of

all others unless the statutory remedy is inadequate.” Id. (citing

Orloff v. Los Angeles Turf Club, 30 Cal. 2d 110, 112-113 (1947);

Strauss v. A.L. Randall Co., 144 Cal. App. 3d 514 (1983)).

Here, it appears that punitive damages are unavailable for

plaintiffs’ second through fifth claims. First, it is well-settled

that punitive damages are not available under the UCL. 

See In re Wal-Mart Stores, Inc., 505 F. Supp. 2d 609, 620 (2007).

Second, it appears that the claims for missed meal breaks, itemized

wage statements, and waiting time penalties were not available at

common law and accordingly the statutory remedy is exclusive

(unless, as no party has argued here, such a statutory remedy is

inadequate). See Czechowski v. Tandy Corp., 731 F. Supp. 406, 410

(N.D. Cal. 1990). That said, PwC has not shown that unpaid wages

for time worked (including time worked at an overtime rate) is a

new statutory right that did not exist at common law.9

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that also violates common law, but the election is not made at the

pleading stage. Trumbull & Trumbull, 219 Cal. App 3d at 826.

 The court also incorporates by reference the motion to 10

strike standard set forth above.

17

Accordingly, PwC’s request to strike the request for punitive

damages is granted in part and denied in part.

IV. Le Motion to Strike and Dismiss

A. Standard10

In order to survive a motion to dismiss for failure to state

a claim, plaintiff must allege "enough facts to state a claim to

relief that is plausible on its face." Bell Atlantic Corp. v.

Twombly, -- U.S. --, 127 S. Ct. 1955, 1974 (2007). While a

complaint need not plead "detailed factual allegations," the

factual allegations it does include "must be enough to raise a

right to relief above the speculative level." Id. at 1964-65. 

The Supreme Court recently held that Federal Rule of Civil

Procedure 8(a)(2) requires a "showing" that the plaintiff is

entitled to relief, “rather than a blanket assertion” of

entitlement to relief. Id. at 1965 n.3. Though such assertions

may provide a defendant with the requisite "fair notice" of the

nature of a plaintiff's claim, the Court opined that only factual

allegations can clarify the "grounds" on which that claim rests. 

Id. "The pleading must contain something more. . . than . . . a

statement of facts that merely creates a suspicion [of] a legally

cognizable right of action." Id. at 1965, quoting 5 C. Wright &

A. Miller, Federal Practice and Procedure, § 1216, pp. 235-36 (3d

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The holding in Twombly explicitly abrogates the well 11

established holding in Conley v. Gibson that, "a complaint should

not be dismissed for failure to state a claim unless it appears

beyond doubt that the plaintiff can prove no set of facts in

support of his claim which would entitle him to relief." 355 U.S.

41, 45-46 (1957); Twombly, 127 S. Ct. at 1968.

18

ed. 2004).11

On a motion to dismiss, the allegations of the complaint

must be accepted as true. See Cruz v. Beto, 405 U.S. 319, 322

(1972). The court is bound to give the plaintiff the benefit of

every reasonable inference to be drawn from the "well-pleaded"

allegations of the complaint. See Retail Clerks Int’l Ass'n v.

Schermerhorn, 373 U.S. 746, 753 n.6 (1963). In general, the

complaint is construed favorably to the pleader. See Scheuer v.

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

Harlow v. Fitzgerald, 457 U.S. 800 (1982). Nevertheless, the

court does not accept as true unreasonable inferences or

conclusory legal allegations cast in the form of factual

allegations. W. Mining Council v. Watt, 643 F.2d 618, 624 (9th

Cir. 1981).

B. Analysis

PwC has also filed a motion to strike and dismiss in Le. As

with the motion filed in Kress, PwC argues that collateral

estoppel bars certification of the state law class previously

sought in Campbell. The motion is denied for the reasons set

forth above. 

///

///

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This period may be extended to three years upon a showing 12

of “willful” statutory violations. 29 U.S.C. § 255(a). 

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1. FLSA & UCL

PwC also argues that Le has attempted to circumvent the

procedures that Congress expressly intended for FLSA actions by

repackaging her FLSA claim as a UCL claim. The UCL is a broad

provision which prohibits any “unlawful, unfair or fraudulent

business act or practice.” Cal. Bus. & Prof. Code § 17200. The

UCL incorporates other laws and treats violations of those laws

as independently actionable under state law. Chabner v. United

Omaha Life Ins. Co., 225 F.3d 1042, 1048 (9th Cir. 2000). Le’s

seventh claim for relief under the UCL incorporates by reference

all previous paragraphs of her complaint; accordingly, Le argues

that her FLSA claim, as it pertains to California employees, is

governed by the UCL’s four-year statute of limitations and the

out-out procedure provided by Rule 23, rather than the FLSA’s

two-year statute of limitations and its opt-in procedure. 12

Although district courts within this circuit are divided on

the issue, the prevailing view is that violations of the FLSA may

serve as the basis for a UCL claim. See Takacs v. A.G. Edwards &

Sons, Inc., 444 F. Supp. 2d 1100, 1116-18 (S.D. Cal. 2006);

Tomlinson, 359 F. Supp. 2d at 900; Bureerong v. Uvawas, 922 F.

Supp. 1450, 1477 (C.D. Cal. 1996); Willis v. Cal-Western

Transport, No. 00-CV-5695 AWI/LJO, slip op. at 4 (E.D. Cal. Dec.

22, 2000); Barnett v. Washington Mutual Bank, No. C 03-00753 CRB,

2004 WL 2011462 (N.D. Cal. Sept. 9, 2004); Kelly v. SBC, Inc.,

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 Specifically, the objectives allegedly frustrated are those 13

contained in the Portal-to-Portal Act, passed in 1947 to amend the

FLSA to include a limitation on retroactive relief and a statute

of limitations. Bahramipour v. Citigroup Global Markets, No. 04-

CV-4440, 2006 WL 449132, at *3 (N.D. Cal., Feb. 22, 2006). That

act, however, was “enacted in response to judicial interpretations

of the FLSA -- not in response to a proliferation of state wage

claims.” Barnett, 2004 WL 2011462 at *6.

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No. 97-CV-2729, 1998 WL 92832 (N.D. Cal. Nov. 13, 1998); Aguayo

v. Oldenkamp, No. 04-CV-6279 ASI/LJO, 2005 WL 2436477 (E.D. Cal.,

Oct. 3, 2005); but see Leuthold v. Destination America, Inc., 224

F.R.D. 462, 470 (N.D. Cal. 2004) and Williams v. Trendwest

Resorts Inc., No. 05-CV-605 RCJ/LRL, 2007 U.S. Dist. LEXIS 62396,

at *11 (D. Nev. Aug. 20, 2007).

At bottom, PwC’s argument is one of preemption: to permit

the UCL to “circumvent” the FLSA would, under conflict preemption

analysis, allegedly frustrate the full purposes and objectives of

Congress. See Barnett, 2004 WL 2011462, at *5. The 13

Congressional intent behind the FLSA opt-in procedure was to

prevent employees from receiving “windfall payments, including

liquidated damages” and to protect employers from facing

“financial ruin.” Nevertheless, “[t]hese concerns simply are not

present in a UCL action, where plaintiffs are limited to

restitution.” Tomlinson, 359 F. Supp. 2d at 900. Moreover, the

Ninth Circuit has held that the FLSA does not preempt state

overtime law. Pacific Merchant Shipping Ass'n v. Aubry, 918 F.2d

1409, 1418 (9th Cir. 1990) (“the FLSA does not preempt California

from applying its own overtime laws”). By making violations of

other laws independently actionable under the UCL, violations of

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The cases relied upon by PwC appear out of step with the 14

majority of courts to have confronted the issue. Lerwill v.

Inflight Motion Pictures, Inc., 343 F. Supp. 1027, 1028 (N.D. Cal.

1972), for example, was referred to as “weak[] precedent” and

“dubious authority” by the Ninth Circuit in Williamson, 208 F.3d

at 1153.

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the FLSA essentially become violations of California’s own

overtime laws as well. 

In addition, the Ninth Circuit has held that “the central

purpose of the FLSA is to enact minimum wage and maximum hour

provisions designed to protect employees.” Williamson v.

Geneeral Dynamics Corp., 208 F.3d 1144 (9th Cir. 2000). Courts

should therefore interpret remedial legislation in favor of

employee protection. See, e.g., Anderson v. Mt. Clemens Pottery

Co., 328 U.S. 680 (1946); Ramirez v. Yosemite Water Co., Inc., 20

Cal. 4th 785, 794 (1999) (“[P]ast decisions . . . teach that in

light of the remedial nature of the legislative enactments

authorizing the regulation of wages, hours and working conditions

for the protection and benefit of employees, the statutory

provisions are to be liberally construed with an eye to promoting

such protection.”).14

Courts have also routinely applied a four-year statute of

limitations to FLSA violations brought under the UCL. See

Takacs, 444 F. Supp. 2d at 1116 (noting that a claim under the

UCL is “not precluded simply because it is procedurally barred by

the underlying statute”). In enacting the federal statute of

limitation, Congress indicated that “this limitation does not

apply to actions for the recovery of wages brought under state

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law . . . [and] envisioned not only that state based claims for

wages could be asserted, but that they could be governed by

separate procedures.” Aragon v. Bravo, No. 89-CV-1282 PHX/RCB,

1993 WL 432402, at *6 (D. Ariz. May 7, 1993) (citing U.S. Code

and Cong. Services, 80th Cong., 1st Session, at 1035 (1947)). 

In addition, Congress enacted the federal statute of

limitation because the absence of an express federal period had

engendered non-uniform statutes of limitation for a federal law. 

“The UCL is a State law and therefore does not present the

problems of uniformity addressed by Congress in administering the

FLSA.” Bahramipour, 2006 WL 4499132 at *6; id. (“The motivation

for the two-year statute of limitations was not simply to protect

employers, but to ensure uniformity [in interpreting the FLSA]”).

Accordingly, the court finds that plaintiff’s UCL claim is

not preempted by the FLSA. Indeed, by “allowing ‘opt-out’ class

actions and longer statute of limitations for UCL claims,

California provides increased protection for its workers,

furthering the central purpose of the FLSA.” Bahramipour v.

Citigroup Global Markets, No. 04-CV-4440, 2006 WL 449132, at *7

(N.D. Cal. Feb. 22, 2006).

2. Punitive Damages

PwC also moves to strike Le’s request for punitive damages. 

The court incorporates the discussion of punitive damages set

forth above with regard to Kress and further finds that punitive

damages are unavailable in FLSA actions seeking unpaid wages. 

See Shea v. Galaxie Lumber & Constr. Co., 152 F.3d 729, 734 (7th

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Cir. 1998) (punitive damages available for FLSA § 215(a)(3)

retaliation claim but not § 207 overtime claim). Accordingly,

the request to strike punitive damages for the FLSA claim is

granted.

3. Constructive Trust

Although the UCL permits broad equitable relief, Fletcher v.

Sec. Pac. Nat’l Bank, 23 Cal. 3d 442, 449 (1979), including a

constructive trust, People v. Orange County Charitable Servs., 73

Cal. App. 4th 1054, 1078 (1999), plaintiff has not alleged (nor

argued that it could allege) facts sufficient to support such a

remedy. See 5 Witkin Cal. Proc. Plead § 796 (4th ed.) (assertion

of constructive trust as a remedy requires allegation of “fraud,

breach of fiduciary duty, breach of promise to buy property for

plaintiff, or repudiation of [an] unenforceable express trust.”). 

Accordingly, the motion to strike is granted as to the request

for a constructive trust. 

V. Conclusion

For the reasons set forth above, the court order as follows:

1. The motion to consolidate Campbell and Kress/Le is

DENIED; however, the clerks’ office is directed to

consolidate Kress and Le. The consolidated case shall

remain related to Campbell. 

2. The motion to strike and/or dismiss in both Kress and

Le are granted in part and denied in part.

3. Pursuant to the conference held before Judge Hollows on

August 11, 2008, the plaintiffs in the consolidated

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Le/Kress action are to file an amended complaint within

21 days and the parties are to submit statements

regarding a proposed discovery schedule 10 days

thereafter. 

IT IS SO ORDERED. 

DATED: August 14, 2008.

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