Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-5_15-cv-02928/USCOURTS-cand-5_15-cv-02928-1/pdf.json

Nature of Suit Code: 710
Nature of Suit: Fair Labor Standards Act
Cause of Action: 29:206 Collect Unpaid Wages

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UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

RAFAEL GOMEZ, et al.,

Plaintiffs,

v.

TRUE LEAF FARMS, LLC, et al.,

Defendants.

Case No. 5:15-cv-02928-RMW 

ORDER REGARDING MOTION TO 

DISMISS OR STAY ACTION AND 

MOTION FOR SANCTIONS

Re: Dkt. Nos. 25, 38

Plaintiffs Rafael Gomez, Cesar Ruelas, and Brenda Acevedo filed a wage and hour class 

action complaint on June 23, 2015. Dkt. No. 1. On August 4, 2015, Defendants True Leaf Farms, 

LLC; True Leaf Holdings, LLC; Church Brothers, LLC; Steve Church; Tom Church; and David 

Gill filed a motion to dismiss or, in the alternative, to stay this action under the Colorado River

doctrine pending the outcome of a separate class action that a different plaintiff filed in state court 

against True Leaf Farms. Dkt. No. 25. Individual Defendants Tom Church, Steve Church, and 

David Gill also move to dismiss the Fair Labor Standards Act claims against them under Rule 

12(b)(6). Id. Separately, Defendants move for sanctions against Plaintiffs pursuant to Rule

11(b)(1) and the court’s inherent authority. Dkt. No. 38. For the reasons set forth below, the court 

DENIES the motions to dismiss, GRANTS the motion for a stay only as to Plaintiffs’ state law 

claims, and DENIES the motion for sanctions.

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I. BACKGROUND

The named Plaintiffs are former employees at Defendants’ food processing facilities in San 

Juan Bautista, California. Dkt. No. 1 ¶¶ 12-16. The complaint alleges that Defendant Steve Church 

is “Chief Executive Officer or other officer” of Church Brothers, LLC; that Tom Church is 

“President or other officer” of Church Brothers; and that David Gill is “Partner or other 

shareholder or officer” of True Leaf Farms, LLC. Id. ¶¶ 18-20.

Plaintiffs commenced suit on June 23, 2015 alleging that Defendants failed to pay them 

minimum wage, Dkt. No. 1 ¶¶ 41-48, 99-104; compensate them for all hours worked (including 

overtime payments), id. ¶¶ 49-55, 56-64; provide them with legally compliant meal and rest 

periods, ¶¶ 65-70; and comply with various record keeping requirements, id. ¶¶ 80-84, 111-117, 

among other alleged violations.

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Plaintiffs allege eight claims under California state law and two 

claims based on federal statutes, the Fair Labor Standards Act (“FLSA”) 29 U.S.C. § 201, et seq., 

and the Migrant and Seasonal Agricultural Worker Protection Act (“MWPA”) 29 U.S.C. § 1801 et 

seq. Dkt. No. 1 ¶¶ 41-117.

Plaintiffs propose to represent three, potentially overlapping classes of workers. All three 

named Plaintiffs seek to represent a class alleging state law violations defined as follows: 

All individuals who are currently employed, or have formerly been 

employed, as nonexempt hourly employees at Defendants’ food 

processing facilities in California, at any time within four years prior 

to the filing of the original complaint until resolution of this action.

Id. ¶ 32. All named Plaintiffs also seek to represent a class alleging FLSA violations defined as:

All individuals who are currently employed, or have formerly been 

employed, as nonexempt hourly employees at Defendants’ food 

processing facilities in California, at any time within three years 

prior to the filing of the original complaint until resolution of this 

action.

Id. ¶ 33. Finally, Plaintiff Ruelas seeks to represent a class alleging violations of the MWPA, 

defined as:

All migrant agricultural workers who are currently employed, or 

have formerly been employed, as nonexempt hourly employees at 

 

1

See generally Dkt. No. 1 ¶¶ 71-79, 85-98, 105-110.

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Defendants’ food processing facilities in California, at any time 

from the applicable statute of limitations to until resolution of this 

action.

Id. ¶ 34. The complaint seeks monetary and injunctive relief. Id. ¶¶ 10-11.

This is the third wage and hour class action filed against True Leaf Farms since December 

2014.2The first, entitled Norzagaray v. True Leaf Farms, LLC, et al., Case No. CU-14-00160, was 

filed in San Benito County Superior Court on December 5, 2014. Dkt. No. 25-1 Ex. A at 1. The 

sole named plaintiff Norzagaray alleges five claims under state law and seeks to represent a class 

of current and former True Leaf employees. Id. at 1, 8. Defendants’ motion asserted that the 

Norzagaray action had progressed to “imminent mediation.” Dkt. No. 25 at 8. Defendants 

represented at the hearing on the current motions that the mediation was unsuccessful.

The second case, entitled Rodriguez v. True Leaf Farms, LLC et al., Case No. 

CU-15-00032, was filed in San Benito County Superior Court on March 5, 2015. Dkt. No. 25-2 

Ex. B at 1. The sole named plaintiff Rodriguez alleged eight claims under state law and also 

sought to represent a class of current and former True Leaf employees.3Id. at 5. Significant to 

Defendants’ request for sanctions, the Rodriguez complaint was signed by Cory G. Lee of The 

Downey Law Firm, LLC, one of the firms representing Plaintiffs in the instant action.4

On June 4, 2015, the Superior Court issued an order granting True Leaf’s motion to abate 

the Rodriguez case. Dkt. No. 25-3 Ex. D (order of abatement). The substance of the order reads, in 

its entirety: 

This matter came on regularly before the Honorable Judge Harry J. 

Tobias in Department 1 of the above entitled Court on May 14, 

2015, at 2:00 p.m. pursuant to a duly noticed Motion for Plea in 

Abatement and Motion to Stay Proceedings. After full consideration 

of the pleadings, authorities and exhibits submitted by counsel, and 

having heard and considered oral argument, and Good Cause 

appearing, the Court hereby GRANTS Defendant’s Motion and 

 

2 Defendants have requested that the court take judicial notice of various filings in state court 

related to other class actions against True Leaf. The court GRANTS the unopposed requests for 

judicial notice. Wheeler v. City of Oakland, No. 05–0647–SBA, 2006 WL 1140992, at *5 (N.D.

Cal. Apr. 28, 2006).

3

The class defined in the Rodriguez complaint is identical to the state law class that Plaintiffs 

Gomez, Ruelas, and Acevedo seek to represent. Dkt. No. 25-2 Ex. B at 5; Dkt. No. 1 at 7.

4 Different counsel represent plaintiff Norzagaray in his case. Dkt. No. 25-1 Ex. A at 1. 

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ORDERS: 

The instant action, filed as Rodriguez v. True Leaf Farms, LLC, et 

al. (San Benito County Superior Court, Case No. CU-15-00032, 

filed March 5, 2015) is hereby ABATED AS TO THE ENTIRE 

ACTION.

Id. at 2. Defendants argue that the Rodriguez case was stayed pending the outcome of the 

Norzagaray action, Dkt. No. 25 at 1, though the order itself does not specify the length of the stay.

Plaintiffs Gomez, Ruelas, and Acevedo filed the instant case in U.S. District Court alleging 

violations of state and federal law on June 23, 2015. Dkt. No. 1. On August 4, 2015, Defendants 

moved to dismiss or stay this action, arguing that this court should abstain from exercising 

jurisdiction pending the outcome of the state court proceedings. Dkt. No. 25. The Individual 

Defendants Messrs. Church and Gill also moved to dismiss for failure to state a claim. Id. at 14. In 

addition to their motion for dismissal, on August 31, 2015, Defendants moved for $73,752 in 

sanctions. Dkt. No. 38 at 3. Defendants assert that the Downey Law Firm’s class action complaint 

filed in federal court, after the state court’s abatement of the Rodriguez action, was made “for the 

purpose of misleading, causing unnecessary delays and increasing the cost of litigation.”5Id. at 2.

II. ANALYSIS

A. Motion to Dismiss or Stay Under the Colorado River Doctrine

Defendants move to dismiss or stay this action pursuant to the Colorado River doctrine, 

Colorado River Conservation Dist. v. United States, 424 U.S. 800 (1976), contending that the 

claims in this case overlap substantially with the claims in the Norzagaray action. When there are 

concurrent state court proceedings concerning the same matters, a district court may abstain from 

exercising jurisdiction to promote “wise judicial administration, giving regard to conservation of 

judicial resources and comprehensive disposition of litigation.” Id. at 817. Abstention is “an

extraordinary and narrow exception to the duty of a District Court to adjudicate a controversy 

properly before it.” Id. at 813. Even when abstention is appropriate, the Ninth Circuit “generally 

require[s] a stay rather than a dismissal.” R.R. Street & Co. Inc. v. Transport Ins. Co., 656 F.3d 

 

5 Defendants separately filed a motion (which the court denied) to compel personal appearances by 

Plaintiffs and their attorneys at the hearing on the instant motions. Dkt. Nos. 31, 46.

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966, 978 n.8 (9th Cir. 2011).

Drawing on Colorado River and its progeny, our court of appeals has recognized eight 

factors for assessing the appropriateness of a Colorado River stay or dismissal: 

(1) which court first assumed jurisdiction over any property at stake; 

(2) the inconvenience of the federal forum; (3) the desire to avoid 

piecemeal litigation; (4) the order in which the forums obtained 

jurisdiction; (5) whether federal law or state law provides the rule of 

decision on the merits; (6) whether the state court proceedings can 

adequately protect the rights of the federal litigants; (7) the desire to 

avoid forum shopping; and (8) whether the state court proceedings 

will resolve all issues before the federal court.

Id. at 978-79.

1. Which Court First Assumed Jurisdiction of Property

Because real property is not at stake in this action, the parties do not argue that the first 

factor applies. Accordingly, the court does not consider it.

2. Inconvenience of the Federal Forum

Defendants argue that the U.S. District courthouse in San Jose, California, is 

approximately 45 minutes further away than the San Benito County courthouse from Defendants’ 

facilities in San Juan Bautista, California. Dkt. No. 25 at 7. The court agrees with Plaintiffs that 

this difference is insignificant and does not weigh heavily in favor of abstention.

3. Desire to Avoid Piecemeal Litigation

“Piecemeal litigation occurs when different tribunals consider the same issue, thereby 

duplicating efforts and possibly reaching different results.” Am. Int’l Underwriters, (Philippines), 

Inc. v. Cont’l Ins. Co., 843 F.2d 1253, 1258 (9th Cir.1988). Defendants argue that this factor 

weighs heavily in favor of abstention because the present action will require the court to decide the 

exact same issues as the Norzagaray action, duplicating efforts and possibly arriving at 

inconsistent results. Dkt. No. 25 at 8. Plaintiffs respond that the Norzagaray action does not 

encompass all of the state law claims or any of the federal claims in this action. Dkt. No. 30 at 7.

The court finds that this factor favors abstention. Out of the 8 state law causes of action 

that Plaintiffs assert here, 7 are similar to the causes of action asserted in Norzagaray. Compare

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Dkt. No. 1 with Dkt. No. 25-1. Moreover, the proposed classes of workers in two actions are 

almost identical. While Defendants argue that the Norzagaray action does not include all 

Defendants in the present action, Dkt. No. 30 at 7, abstention does not require exact parallelism 

between cases. “It is enough if the two proceedings are substantially similar.” Nakash v. 

Marciano, 882 F.2d 1411, 1416 (9th Cir. 1989). The additional Defendants named in this case, 

moreover, are simply officers of True Leaf and related companies, and Plaintiffs do not explain 

why these additional Defendants could not be joined in the state court action.

The court notes, however, that this factor only favors a stay of plaintiffs’ state law claims, 

not the federal claims that are not asserted in Norzagaray.

4. Order of Jurisdiction

Defendants argue that the Norzagaray action, filed in December 2014, has progressed 

substantially, and counsel represented that mediation has occurred without success. Plaintiffs 

concede that this factor slightly favors Defendants’ position. Dkt. No. 30 at 8. The extent to which 

discovery has progressed is unclear, however, and no motion for class certification has apparently 

been made.

5. Whether Federal Law Provides the Rule of Decision

Plaintiffs argue against a dismissal or stay because California state law does not provide 

the rule in resolving their FLSA or MWPA claims. The court agrees but notes that this argument 

does not apply to the state law causes of action that form the basis for 8 of 10 claims in Plaintiffs’ 

complaint. Accordingly, this factor favors abstention with respect to the state law claims but 

favors exercising jurisdiction over the federal claims.

6. Adequacy of State Court

There is no question that the state court has the authority to address Plaintiffs’ state law 

claims. Plaintiffs argue that their conversion claim for punitive damages is not presently before the 

Norzagaray court, but plaintiffs have not explained why they could not bring such a claim in state 

court. See Ross v. U.S. Bank Nat. Ass'n, 542 F. Supp. 2d 1014, 1022 (N.D. Cal. 2008) (“Plaintiffs’ 

failure to bring all available claims for the [state law] class creates the kind of piecemeal litigation 

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that the Colorado River doctrine intends to prevent.”). Plaintiffs also do not dispute that they could

bring their FLSA claims in state court. See Dkt. No. 30 at 5.

Plaintiffs argue, however, that under 29 U.S.C. § 1854, federal courts have exclusive 

jurisdiction over claims under the MWPA. That statute states that litigants wishing to sue under 

the MWPA “may file suit in any district court of the United States having jurisdiction of the 

parties.” In general, a state court has concurrent jurisdiction to enforce a right created by federal 

law unless the statute excludes concurrent jurisdiction or is incompatible with such jurisdiction. 

Charles Dowd Box Co. v. Courtney, 368 U.S. 502, 507-08 (1962). Defendants argue that the 

MWPA uses permissive language and that in such circumstances, state and federal courts have 

concurrent jurisdiction. Dkt. No. 36 at 4. Neither party has provided case law addressing whether 

claims under the MWPA can be brought in state court. Nevertheless, the court finds that the 

language in the MWPA does not seem to divest state courts of jurisdiction.

In any event, this factor is neutral with respect to Plaintiffs’ federal claims because they are 

not presently before the state court.

7. Forum Shopping

Defendants argue that this action is an attempt by Plaintiffs’ counsel to circumvent the 

state court’s order staying the Rodriguez action, in which the same law firm represented the 

proposed class. Plaintiffs respond that the named Plaintiffs in this case are different from those in 

prior cases and assert causes of action that are not before the state court. The court finds that this 

factor is neutral. While Plaintiffs’ counsel have not tried to argue that they were unaware of the 

stay of the Rodriguez action, this is not a case in which a party suffers an adverse ruling in state 

court and then seeks a new forum in federal court. Rather, here, different named plaintiffs filed a 

separate lawsuit.

8. Whether the State Court Proceedings Will Resolve All Issues

Defendants argue that the Norzagaray class action will conclusively resolve the 

substantive issues before this court. While this may be true of Plaintiffs’ state law claims, it is not 

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true of the federal claims, which are not before the state court.6 Accordingly, the court finds that 

this factor favors a stay of the state law claims but not the federal claims.

In sum, the court finds that the present action is substantially similar to the Norzagaray

action with respect to Plaintiffs’ state law claims. Taken together, the factors above present the 

“exceptional circumstances” required to support a stay under the Colorado River doctrine. See

Krieger v. Atheros Communications, Inc., 776 F. Supp. 2d 1053 (N.D. Cal. 2011) (staying state 

law claims but allowing federal claims to proceed). This stay does not apply, however, to 

Plaintiffs’ federal law claims.

B. Motion to Dismiss FLSA Claims Against Individual Defendants

Defendants argue that under Federal Rule of Civil Procedure 12(b)(6), Plaintiffs’ claims 

against Tom Church, Steve Church, and David Gill fail to state a claim upon which relief may be 

granted. Dkt. No. 25 at 14. Specifically, Defendants argue that the complaint fails to adequately 

allege that the two Church brothers and Gill, as company officers, are “employers” such that they 

could be liable individually under the FLSA. Id. Defendants assert that Plaintiffs’ allegations that 

Defendants “exercised control over wages, hours and/or working conditions” are “wholly 

insufficient to put Defendants on notice as to the allegations presented against them.” Id. (citing 

Dkt. No. 1 at 5).

A motion under Rule 12(b)(6) tests the legal sufficiency of a complaint. Navarro v. Block, 

250 F.3d 729, 732 (9th Cir. 2001). In considering whether the complaint is sufficient, the court 

must accept as true all of the factual allegations contained in the complaint. Ashcroft v. Iqbal, 556 

U.S. 662, 678 (2009). However, the court need not accept as true “allegations that contradict 

matters properly subject to judicial notice or by exhibit” or “allegations that are merely 

conclusory, unwarranted deductions of fact, or unreasonable inferences.” In re Gilead Scis. Secs. 

Litig., 536 F.3d 1049, 1055 (9th Cir. 2008) (citation omitted). While a complaint need not allege 

 

6 While Plaintiffs’ conversion claim—assuming it even states a viable claim for relief—is also not 

before the state court, this court finds that resolution of the conversion claim necessarily turns on 

resolution of Plaintiffs’ other state law claims. See Dkt. No.1 ¶ 106 (incorporating allegations from 

state wage and hour claims into Plaintiffs’ conversion claim).

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detailed factual allegations, it “must contain sufficient factual matter, accepted as true, to ‘state a 

claim to relief that is plausible on its face.’” Iqbal, 556 U.S. at 678 (quoting Bell Atl. Corp. v. 

Twombly, 550 U.S. 544, 570 (2007)). “A claim has facial plausibility when the plaintiff pleads 

factual content that allows the court to draw the reasonable inference that the defendant is liable 

for the misconduct alleged. The plausibility standard is not akin to a ‘probability requirement,’ but 

it asks for more than a sheer possibility that a defendant has acted unlawfully.” Iqbal, 556 U.S. at 

678 (internal citation omitted).

Under the FLSA, the term “‘[e]mployer’ includes any person acting directly or indirectly 

in the interest of an employer in relation to an employee.” 29 U.S.C. § 203(d). The Ninth Circuit 

has explained that “[w]here an individual exercises ‘control over the nature and structure of the 

employment relationship,’ or ‘economic control’ over the relationship, that individual is an 

employer within the meaning of the Act, and is subject to liability.” Boucher v. Shaw, 572 F.3d 

1087, 1091 (9th Cir. 2009) (quoting Lambert v. Ackerley, 180 F.3d 997, 1012 (9th Cir. 1999) (en 

banc)). Factors relevant to whether an individual is an “employer” under the FLSA include 

whether they have “significant ownership interest with operational control of significant aspects of 

the corporation’s day-to-day functions; the power to hire and fire employees; [the power to] 

determin[e][ ]salaries; [the responsibility to] maintain [ ] employment records.” Lambert, 180 F.3d 

at 1012.

The sufficiency of Plaintiffs’ allegations against the Individual Defendants is questionable 

in part because Plaintiffs frequently use the plural term “Defendants” without specifying which 

Defendants are responsible for particular actions. Nevertheless, viewed in the light most favorable 

to Plaintiffs, the complaint at least makes it plausible that the two Church brothers and Gill are 

“employers” under the FLSA. The complaint alleges that each of the Church brothers and Gill are 

officers at one of the corporate Defendants, see Dkt. No. 1 ¶¶ 18-20, and Defendants’ motion does 

not argue that the corporate Defendants are not “employers” under the FLSA. Moreover, the 

complaint alleges that Defendants “have employed Class Members in this judicial district.” Id. ¶ 

22. Plaintiffs further allege: “Defendants have exercised control over the wages, hours and/or 

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working conditions of Plaintiffs and Class Members, suffered or permitted Plaintiffs and Class 

Members to work, and/or engaged Plaintiffs and Class Members.” Id. Plaintiffs’ allegations 

against the Individual Defendants are thin, but in light of the Individual Defendants’ positions 

within the companies and Plaintiffs’ allegations regarding the actions of all Defendants, this order 

finds that Plaintiffs have stated at least a plausible claim.7

Accordingly, Defendants’ motion to dismiss under Rule 12(b)(6) is DENIED. 

C. Motion for Sanctions

Finally, Defendants move for $73,752 in sanctions under Federal Rule of Civil Procedure 

11(b) and the court’s inherent power. Dkt. No. 38 at ECF 2-3. The thrust of Defendants’ argument 

is that Plaintiffs’ complaint, which they assert is very similar to the one filed in Rodriguez, is an 

improper attempt to harass Defendants and circumvent the state court’s order abating that case. 

Defendants also argue that the Downey law firm’s solicitation of potential class members 

following the state court’s abatement order warrants sanctions. Plaintiffs assert that Defendants’ 

motion is itself a “bad faith” attempt “to harass and bully Plaintiffs from exercising” their legal 

rights. Dkt. No. 42 at 1.

Rule 11(b)(1) requires, among other things, that when a party submits a paper to the court, 

the attorney certifies that the paper “is not being presented for any improper purpose, such as to 

harass, cause unnecessary delay, or needlessly increase the cost of litigation.” Rule 11(c) provides 

for the possibility of sanctions for violating Rule 11(b).

Defendants cite no authority for the proposition that a federal court should order Rule 11 

sanctions for allegedly disobeying a state court order. In any event, it does not appear that 

Plaintiffs have disobeyed the state court’s abatement order. The order simply states: “The instant 

action, filed as Rodriguez v. True Leaf Farms, LLC, et al. (San Benito County Superior Court, 

Case No. CU-15-00032, filed March 5, 2015) is hereby ABATED AS TO THE ENTIRE 

 

7 Defendants also argue that under California law, corporate agents acting within the scope of their 

agency are not personally liable for a corporate employer’s failure to pay employees’ wages, Dkt. No. 

25 at 14. Defendants’ motion, however, is directed at Plaintiffs’ federal claims, and Defendants cite no 

authority for the proposition that a corporate officer cannot be an employer under the FLSA.

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ACTION.” Dkt. No. 25-3 Ex. D at 2. The order does not say anything about future actions filed (a) 

by other plaintiffs or (b) in federal court alleging federal claims. If Defendants believed that 

Plaintiffs’ complaint violated the state court’s order, they should have brought it to the attention of 

the state court.

Defendants’ position appears to be that sanctions are warranted if a law firm represents a 

class action plaintiff in federal court after a state court stays a proceeding filed by a different, 

named class action client against the same defendant. Defendants’ argument is meritless. The 

authorities Defendants cite in support of their motion for sanctions do not support the relief 

Defendants have requested, and the court is unaware of any authority that supports Defendants’ 

position.

Accordingly, Defendants’ motion for sanctions is DENIED.8

III. ORDER

For the reasons explained above, Defendants’ motions to dismiss and motion for sanctions 

are DENIED. Defendants’ motion to stay Plaintiffs’ state law claims is GRANTED. Plaintiffs’ 

federal claims will proceed. The court expects and anticipates that the parties will coordinate 

discovery in this action and the Norzagaray case.

IT IS SO ORDERED.

Dated: October 16, 2015

______________________________________

Ronald M. Whyte

United States District Judge

 

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Plaintiffs’ opposition brief requests sanctions for having to respond to Defendants’ motion. Dkt. 

No. 42 at 4. At least because any motion for sanctions requires a separate, noticed motion, Civ. 

L.R. 7-8, Plaintiffs’ request for sanctions is also DENIED.

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