Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_09-cv-04168/USCOURTS-cand-3_09-cv-04168-3/pdf.json

Nature of Suit Code: 791
Nature of Suit: Employee Retirement Income Security Act (ERISA)
Cause of Action: 29:1001 E.R.I.S.A.: Employee Retirement

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By order filed January 6, 2010, the Court took the matter under submission.

United States District Court

For the Northern District of California

IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF CALIFORNIA

RICHARD BAKER,

Plaintiff,

 v.

CHIN & HENSOLT, INC., et seq.

Defendants /

No. CV-09 4168 MMC

ORDER GRANTING IN PART AND

DENYING IN PART DEFENDANTS’

MOTION TO DISMISS, FOR A MORE

DEFINITE STATEMENT, AND TO

STRIKE

Before the Court is defendants Chin & Hensolt, Inc. (“Chin & Hensolt”) and PQ

Chin’s (“Chin”) motion, filed December 1, 2009, to dismiss plaintiff Richard Baker’s

(“Baker”) First Amended Complaint (“FAC”), pursuant to Rule 12(b)(6) of the Federal Rules

of Civil Procedure, for a more definite statement, pursuant to Rule 12(e), and to strike

certain allegations, pursuant to Rule 12(f). Plaintiff has filed opposition, to which

defendants have replied. Having considered the papers filed in support of and in

opposition to the motion, the Court rules as follows.1

BACKGROUND

In his FAC, Baker alleges that Chin & Hensolt is a corporation, that Chin has been

Chin & Hensolt’s “CEO and majority shareholder” from 2005 to the present, and that Baker

is a “minority shareholder.” (See FAC ¶¶ 3, 4, 17.) Baker also alleges that he was

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employed by “defendants” for “more than 20 years” (see FAC ¶ 2), and that he was

terminated in 2008 (see FAC ¶ 22), at which time he was not paid his “vacation wages”

(see FAC ¶ 62).

Baker further alleges that Chin & Hensolt has a “profit sharing plan” (“Plan”) that

Baker was a “participant” therein, and that Baker was “100% vested in the Plan.” (See FAC

¶¶ 13, 14.) According to Baker, he “has been improperly denied the benefits of the Plan.” 

(See FAC ¶ 30.)

Additionally, Baker alleges, defendants “held one [or] more life insurance policies in

trust for Baker,” which policies had a “cash surrender value.” (See FAC ¶¶ 25, 27.) Baker

alleges that defendants have “ignored” his requests that they produce those policies (see

FAC ¶¶ 26, 41), and, further, that “[d]efendants or some of them failed to maintain those life

insurance policies in trust for Baker” (see FAC ¶¶ 26, 28).

Baker also alleges that on July 31, 2009, he asked defendants for a number of

documents, none of which has been provided to him. Specifically, Baker alleges he

requested, and has not been provided with, the following documents: “an accounting of the

Plan,” “the Summary Plan Description for the Plan,” “the annual report for the Plan each

year since 1992,” “a statement about when distribution would be made from the Plan,” “the

annual shareholder’s meeting minutes for Chin & Hensolt [ ] from 1992 to the present,” “a

list of the officers, board members and shareholders of Chin & Hensolt,” and “a statement

of assets and liabilities of Chin & Hensolt.” (See FAC ¶¶ 16, 19, 21.)

Baker further alleges that “thereafter,” i.e., a date after July 31, 2009, he requested

that defendants provide him “the record of shareholders pursuant to California Corporations

Code § 1600(c)” and that defendants have failed to provide him said document. (See FAC

¶¶ 20, 21.)

Finally, Baker alleges that on August 17, 2009, Baker requested defendants “provide

the personnel file for Baker as an employee of defendants, provide the payroll history for

Baker and provide copies of all of the documentation signed by Baker while he was

employed by defendants.” (See FAC ¶¶ 23.) According to Baker, “most of that

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documentation” has not been provided to him. (See FAC ¶ 24.) Further, Baker alleges,

“wage statements” he did receive “did not list his employers’ name and did not accurately

show wages due to Baker.” (See FAC ¶ 79.)

In his FAC, Baker asserts two causes of action under the Employee Retirement

Income Security Act (“ERISA”), as well as a cause of action for declaratory relief by which

Baker seeks a declaration of his rights under the Plan. Additionally, Baker asserts four

causes of action under various sections of the California Labor Code. Further, Baker

asserts a cause of action for breach of fiduciary duty, premised on breaches of duties

allegedly owed him in his capacity as a minority shareholder of Chin & Hensolt. Lastly,

Baker alleges a cause of action under under § 17200 of the California Business &

Professions Code premised on the alleged violations of state law. 

LEGAL STANDARD

Dismissal under Rule 12(b)(6) of the Federal Rules of Civil Procedure can be based

on the lack of a cognizable legal theory or the absence of sufficient facts alleged under a

cognizable legal theory. See Balistreri v. Pacifica Police Dep’t, 901 F.2d 696, 699 (9th Cir.

1990). Rule 8(a)(2), however, “requires only ‘a short and plain statement of the claim

showing that the pleader is entitled to relief.’” See Bell Atlantic Corp. v. Twombly, 550 U.S.

544, 555 (2007) (quoting Fed. R. Civ. P. 8(a)(2)). Consequently, “a complaint attacked by

a Rule 12(b)(6) motion to dismiss does not need detailed factual allegations.” See id.

Nonetheless, “a plaintiff’s obligation to provide the grounds of his entitlement to relief

requires more than labels and conclusions, and a formulaic recitation of the elements of a

cause of action will not do.” See id. (internal quotation, citation, and alteration omitted).

In analyzing a motion to dismiss, a district court must accept as true all material

allegations in the complaint, and construe them in the light most favorable to the

nonmoving party. See NL Industries, Inc. v. Kaplan, 792 F.2d 896, 898 (9th Cir. 1986). 

“To survive a motion to dismiss, a complaint must contain sufficient factual material,

accepted as true, to ‘state a claim to relief that is plausible on its face.’” Ashcroft v. Iqbal,

129 S. Ct. 1937, 1949 (2009) (quoting Twombly, 550 U.S. at 570). “Factual allegations

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As discussed below with respect to the Second Cause of Action, a participant who

is personally harmed by a plan fiduciary’s acts may seek “appropriate equitable relief”

against the fiduciary. See Varity Corp. v. Howe, 516 U.S. 489, 507-15 (1996). In the First

Cause of Action, however, Baker seeks only monetary relief. (See FAC ¶ 47.)

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must be enough to raise a right to relief above the speculative level[.]” Twombly, 550 U.S.

at 555. Courts “are not bound to accept as true a legal conclusion couched as a factual

allegation.” See Iqbal, 129 S. Ct. at 1950 (internal quotation and citation omitted).

DISCUSSION

A. Failure to State A Claim

Defendants argue that each of the nine causes of action in the FAC is subject to

dismissal for failure to state a claim. The Court will address the nine causes of action in the

order set forth in the FAC.

1. First Cause of Action

In his First Cause of Action, Baker alleges defendants are fiduciaries of the Plan,

and that they “breached their fiduciary duty by acting counter to the interests of a

beneficiary.” (See FAC. ¶¶ 38, 46.) Baker asserts that in light of the alleged breaches, he

is entitled to monetary relief. (See FAC ¶ 48.) 

Defendants argue the First Cause of Action is subject to dismissal, because ERISA

does not provide for monetary relief in favor of a plan participant as against a plan fiduciary. 

The Court agrees.

Under ERISA, a participant may, pursuant to 29 U.S.C. § 1132(a)(2), seek

“appropriate relief” pursuant to 29 U.S.C. § 1109, which, in turn, provides that a fiduciary

may be held “personally liable” for losses resulting from a breach of fiduciary duty. See 29

U.S.C. § 1109(a).2

 The monetary relief available under § 1132(a)(2), however, is limited;

specifically, a participant alleging a breach of fiduciary claim under § 1132(a)(2) may only

seek recovery of losses incurred by a plan, and may not seek to recover for losses incurred

by the participant. See Massachusetts Mutual Life Ins. Co. v. Russell, 473 U.S. 134, 139-

44 (1985) (“Congress did not intend [§ 1132(a)(2)] to authorize any relief except for the

plan itself”); Ford v. MCI Communications Corp. Health and Welfare Plan, 399 F.3d 1076,

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1082 (9th Cir. 2005) (holding participant may not seek “individual remedy” against plan

fiduciary under § 1132(a)(2)). Here, although Baker has alleged that defendants are plan

fiduciaries and that they have breached fiduciary duties, he seeks no relief on behalf of the

Plan, and only monetary relief on behalf of himself.

As Baker points out, ERISA provides that a participant may file suit to recover

individual benefits available under an ERISA plan, and may, in such a manner, obtain

monetary relief in the form of benefits due. Specifically, 29 U.S.C. § 1132(a)(1)(B) provides

that a plan participant may “recover benefits due to him under the terms of the plan.” See

29 U.S.C. § 1132(a)(1)(B). Baker has failed, however, to state a claim under

§ 1132(a)(1)(B), because Baker has neither sued the Plan nor alleged that either of the

named defendants is the plan administrator, i.e., “the person specifically so designated by

the terms of the instrument under which the plan is operated.” See Ford, 399 F.3d at 1081

(internal quotation and citation omitted) (holding, for claim under § 1132(a)(1)(B), proper

defendant is “the Plan as an entity” or “the Plan’s administrator”). Moreover, even if Baker

had sued a proper defendant under § 1132(a)(1)(B), the claim nonetheless would be

subject to dismissal for the reason that Baker, while alleging in conclusory fashion his

entitlement to “benefits” (see FAC ¶¶ 30, 48), fails to identify, in any manner, the nature of

the benefits to which he claims he is entitled. Consequently, Baker has failed to provide

notice of the factual basis for his claim that he is entitled to benefits under the Plan. See

Iqbal, 129 S. Ct. at 1950 (holding courts “are not bound to accept as true a legal conclusion

couched as a factual allegation”).

Accordingly, the First Cause of Action is subject to dismissal.

2. Second Cause of Action

In the Second Cause of Action, Baker alleges he is entitled to equitable relief under

ERISA; specifically, he requests that defendants be “restrained from continuing their

inappropriate and unjust conduct,” which he identifies as “[t]he denial of the Plan benefits

due to Baker” and “[d]efendants’ failure to provide him with records of the Plan.” (See FAC

¶ 53.) Defendants argue the Second Cause of Action is subject to dismissal because,

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In their reply, defendants, assert they provided Baker with “documents” after the

instant action was filed. (See Defs.’ Reply, filed December 24, 2009, at 6:5-08.) Although

defendants request such “fact” be “considered” by the Court in deciding the instant motion,

apparently for the proposition that any claim regarding a failure to produce documents is

moot, defendants fail to offer any evidence to support such “fact.” Cf. McCarthy v. United

States, 850 F.2d 558, 560 (9th Cir.1988) (holding district court, when considering motion to

dismiss for lack of subject matter jurisdiction, “may review any evidence, such as affidavits

and testimony, to resolve factual disputes concerning the existence of jurisdiction”).

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according to defendants, Baker has failed to allege facts that would entitle him to equitable

relief.

As noted, a plan participant who is personally harmed by a plan fiduciary’s acts may

seek “appropriate equitable relief” against the fiduciary. See Varity Corp. v. Howe, 516

U.S. at 510 (citing 29 U.S.C. § 1132(a)(3)). Such equitable relief, however, is limited to

circumstances in which Congress has not “elsewhere provided adequate relief for a

beneficiary’s injury.” See Varity Corp., 516 U.S. at 515.

Here, to the extent Baker seeks an order restraining defendants from denying him

benefits, Baker has failed to state a claim under § 1132(a)(3) because Congress has

provided adequate relief to participants whose claims for benefits are denied, specifically,

the remedy available under § 1132(a)(1)(B).

To the extent Baker seeks an order directing defendants to provide him with Plan

documents, however, defendants have not shown Baker has failed to state a claim. 

Specifically, defendants fail to identify what “adequate relief” is available, other than

equitable relief, where, as is alleged here, a fiduciary withholds documents from a plan

participant.3

Accordingly, the Second Cause of Action is subject to dismissal to the extent Baker

seeks equitable relief to remedy any alleged denial of benefits, but is not otherwise subject

to dismissal.

3. Third Cause of Action

In the Third Cause of Action, Baker alleges he is entitled to certain declarations

regarding his rights with respect to the Plan. Defendants argue the Third Cause of Action

is subject to dismissal “because ERISA provides an adequate legal remedy.” (See Defs.’

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Alternatively, to the extent the declaratory relief sought regarding Plan assets may

bear on the issue of Baker’s alleged entitlement to benefits, any controversy can be

addressed “elsewhere,” i.e., in a claim for benefits pursuant to § 1332(a)(1)(B).

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Mot., filed December 1, 2009, at 5:11-12.)

As discussed above, a plan participant is entitled to equitable relief where Congress

has not “elsewhere provided adequate relief for a beneficiary’s injury.” See Varity Corp.,

516 U.S. at 515.

Here, to the extent Baker seeks a declaration that he “was a participant in the Plan”

and that he has “suffered economic damages” (see FAC ¶ 58.a), the Third Cause of Action

is subject to dismissal because any dispute regarding whether Baker was a participant

and/or is entitled to benefits can be addressed “elsewhere,” i.e., in a properly alleged claim

for benefits brought pursuant to § 1332(a)(1)(B) against the Plan or Plan Administrator(s). 

Additionally, to the extent Baker seeks a declaration that defendants “failed to safeguard”

and/or “failed to protect” assets held by the Plan (see FAC ¶¶ 58.d, 58.e, 58.f, 58.g), the

Third Cause of Action is subject to dismissal because any dispute regarding whether

defendants have harmed the Plan itself can be addressed “elsewhere,” i.e., in a claim for

breach of fiduciary duty brought pursuant to § 1332(a)(2).4

To the extent Baker seeks a declaration that defendants have a “duty to produce

Plan documentation to Baker” and that defendants “failed to produce Plan documentation

to Baker,” however, the Court finds the claim is not subject to dismissal for the reasons

stated by defendants. Specifically, as is discussed above with respect to the Second

Cause of Action, defendants have failed to identify what “adequate relief” is available, other

than equitable relief, where, as is alleged here, a fiduciary withholds documents from a plan

participant. Nonetheless, because Baker, by the Second Cause of Action, is seeking an

order directing defendants to provide him the subject documents, any issue regarding

whether defendants have a duty to produce the documents and whether defendants have

failed to produce documents thereunder will necessarily be addressed in the context of the

Second Cause of Action. Consequently, no purpose, equitable or otherwise, would be

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Baker alleges he “worked for defendants” in California. (See FAC ¶ 1.)

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served by allowing Baker to proceed simultaneously with a claim for declaratory relief

regarding issues presented by the Second Cause of Action. 

Accordingly, the Third Cause of Action is subject to dismissal.

4. Fourth Cause of Action

Under California law, “[i]f an employer discharges an employee, the wages earned

and unpaid at the time of discharge are due and payable immediately.” See Cal. Lab.

Code § 201(a).5 In the Fourth Cause of Action, Baker alleges that when he was

discharged, defendants, in violation of § 201, failed to pay Baker “all of his wages” and, in

particular, failed to pay him “all of his vacation wages.” (See FAC ¶¶ 61, 62.)

a. Chin

Baker alleges he was employed by “defendants,” i.e., by Chin & Hensolt and by

Chin, the alleged Chief Executive Officer of Chin & Hensolt. (See FAC ¶¶ 2-4.) In support

of his allegation that Chin was his employer, Baker relies on the following allegation: “Chin

operates Chin & Hensolt [ ] as his alter-ego and fails to strictly maintain corporate

formalities and fails to maintain corporate and employment records.” (See FAC ¶ 5.)

Defendants argue that Baker’s allegations regarding an alter ego theory are

insufficient to state a claim against Chin based on breaches of duties arising solely from an 

employee-employer relationship. The Court agrees.

Under California law, there are “two general requirements” for establishing an alter

ego theory: “(1) there is such unity of interest and ownership that the separate

personalities of the corporation and the individual no longer exist; and (2) that, if the acts

are treated as those of the corporation alone, an inequitable result will follow.” See Mesler

v. Bragg Mgmt. Co., 39 Cal.3d 290, 300 (1985) (internal quotation and citation omitted). 

Baker’s conclusory allegations are insufficient to identify any facts to support a finding that

the “separate personalities of the corporation and the individual no longer exist” or that if

the subject acts, e.g., a failure to pay wages due, are treated as those of Chin & Hensolt,

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Oppenheimer v. Robinson, 150 Cal. App. 2d 420 (1957), on which defendants rely,

is distinguishable. There, the California Court of Appeal held that an employee who filed a

wage claim in superior court was required to allege the specific amount due, in order to

demonstrate the amount in controversy equaled or exceeded the amount necessary to

meet the jurisdictional requirements for an action filed therein. See id. at 423. Here, by

contrast, no issue is presented by the amount in controversy; rather, Baker alleges federal

claims and relies on supplemental jurisdiction for his state law claims.

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an “inequitable result will follow.” See id.; see also Twombly, 550 U.S. at 555 (requiring

more than “labels and conclusions” to survive motion to dismiss).

Accordingly, the Fourth Cause of Action is subject to dismissal to the extent it is

alleged against Chin.

b. Chin & Hensolt

Defendants argue the Fourth Cause of Action is subject to dismissal because Baker

has not identified the specific type of wages to which he is allegedly due, for example,

“unpaid overtime” or “accrued paid time off.” (See Defs.’ Mot. at 15:21-23.) As noted,

however, Baker alleges Chin & Hensolt failed to pay him all of his vacation pay due him

upon termination (see FAC ¶¶ 61-62); consequently, Baker has identified the type of wages

sought.6

Accordingly, defendants have failed to show the Fourth Cause of Action is subject to

dismissal to the extent it is alleged against Chin & Hensolt.

As discussed below, the Court will afford Baker leave to file a Second Amended

Complaint. If Baker intends to base the Fourth Cause of Action on wages other than

vacation pay, Baker must identify any such additional type(s) of wages in any Second

Amended Complaint.

5. Fifth Cause of Action

Under California law, “[a]ll wages, other than those mentioned in Section 201 . . .

earned by any person in any employment are due and payable twice during each calendar

month, on days designated in advance by the employer as the regular paydays.” See Cal.

Lab. Code § 204(a). In the Fifth Cause of Action, Baker alleges “[d]efendants did not pay

Baker all wages within the applicable time periods set forth in Labor Code § 204.” (See

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FAC ¶¶ 72-74.) Defendants argue Baker has failed to plead sufficient facts to support a

violation of § 204. As set forth below, the Court agrees.

First, to the extent the claim is brought against Chin, such claim is subject to

dismissal for the reasons set forth above with respect to the Fourth Cause of Action.

Further, as against either defendant, the claim is subject to dismissal because it is

not supported by any facts. Although the FAC alleges a failure to pay wages due upon

termination (see FAC ¶¶ 61, 70), § 204 exempts from its scope wages “mentioned in

Section 201,” see Cal. Lab. Code § 204(a), i.e., wages due upon termination, see Cal. Lab.

Code § 201. To the extent Baker may be attempting to allege that, at some other

unidentified time, he was not paid wages in compliance with the time set forth in § 204,

Baker fails to allege any facts to give defendants notice of the theory on which Baker is

proceeding. Baker’s paraphrasing of the requirements of § 204 (see FAC ¶ 71), followed

by a conclusory statement that defendants have not complied with § 204 (see FAC § 72), is

insufficient to state a claim. See Iqbal, 129 S. Ct. at 1949 (“Threadbare recitals of the

elements of a cause of action, supported by mere conclusory statements, do not suffice.”)

Accordingly, the Fifth Cause of Action is subject to dismissal.

6. Sixth Cause of Action

In the Sixth Cause of Action, Baker alleges defendants violated §§ 226, 432, and

1198.5 of the California Labor Code.

Under § 226(a), an “employer shall, semimonthly or at the time of each payment of

wages, furnish each of his or her employees . . . an accurate itemized statement in writing

showing,” inter alia, “gross wages earned,” “total hours worked by the employee,” “all

deductions,” “net wages earned,” and “the name and address of the legal entity that is the

employer.” See Cal. Lab. Code § 226(a). Further, the employer “shall afford current and

former employees the right to inspect or copy” records containing the information required

by § 226(a), “no later than 21 calendar days from the date of the request.” See Cal. Lab.

Code §§ 226(b), 226(c).

//

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The Court observes, however, that, unlike § 226, neither § 432 nor §1198.5

expressly provides therein for a private cause of action for damages or for recovery of

penalties. Because neither party has addressed whether another statute or a regulation

allows an employee to bring a cause of action for a violation of § 432 or § 1198.5, the Court

does not consider at this time whether an employee may seek monetary relief for a

violation of § 432 or §1198.5.

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Under § 432, “[i]f an employee . . . signs any instrument relating to the obtaining or

holding of employment, he shall be given a copy of the instrument upon request.” See Cal.

Lab. Code § 432.

Under § 1198.5(a), “[e]very employee has the right to inspect the personnel records

that the employer maintains relating to the employee’s performance or to any grievance

concerning the employee.” See Cal. Lab. Code § 1198.5(a).

Defendants argue that the Sixth Cause of Action fails to state a claim because Baker

fails to sufficiently allege facts to support a finding that defendants violated § 226, and fails

to allege any claim against Chin.

To the extent the Sixth Cause of Action is alleged against Chin, the Court finds, for

the reasons stated with respect to the Fourth Cause of Action, Baker has failed to state a

claim against Chin.

To the extent the Sixth Cause of Action is alleged against Chin & Hensolt and is

based on violations of §§ 432 and 1198.5(a), however, defendants fail to identify any

deficiency in the pleading. Indeed, defendants’ motion to dismiss makes no reference to

§ 432 or § 1198.5(a). Further, in light of Baker’s allegation that defendants refused to

provide him with a copy of the documents he signed regarding his employment, despite his

“repeated requests” for such materials (see FAC ¶ 83), and allegation that defendants did

not provide him with all of the “employment documentation” he requested on August 17,

2009 (see FAC ¶ 77), the Court declines to dismiss sua sponte the Sixth Cause of Action to

the extent it is brought against Chin & Hensolt and is based on violations of §§ 432 and

1198.5(a). Cf. Wong v. Bell, 642 F.2d 359, 361-62 (9th Cir. 1981) (observing “trial court

may act on its own initiative to note the inadequacy of a complaint and dismiss it for failure

to state a claim”).7

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Moreover, although the FAC refers to a violation of § 226(a) (see FAC ¶ 75), Baker

appears to be alleging a violation of § 226(c), in light of his allegation that he sought wage

statements only after he became a “former employee.” See Cal. Lab. Code § 226(b)

(providing employer must retain certain information pertaining to “former employees”); Cal.

Lab. Code § 226(c) (providing former employees with right to copy information retained by

employer). Thus, the remedies in § 226(e) appear to be inapplicable for this additional

reason.

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Finally, to the extent the Sixth Cause of Action is based on a claim that Chin &

Hensolt violated § 226, the Court finds unpersuasive defendants’ argument that the claim,

as against Chin & Hensolt, must be dismissed in its entirety. In particular, defendants seek

such dismissal on the ground Baker has not alleged that any failure to provide him accurate

wage statements was done knowingly and intentionally. Although the remedies set forth in

§ 226(e) are only available upon a showing of a “knowing and intentional” violation of §

226(a), see Cal. Lab. Code § 226(e) (setting forth remedies available to “employee

suffering injury as a result of a knowing and intentional failure by an employer to comply

with subdivision (a)”), other subsections of § 226 provide remedies to former employees

who are not allowed to inspect or copy requested records, and those subsections make no

reference to a knowing or intentional failure on the part of the employer, see Cal. Lab. Code

§ 226(f), Cal. Lab. Code § 226(g). Consequently, Baker’s failure to allege a knowing or

intentional violation of § 226 is not fatal to the entirety of his claim, and the Court finds it

appropriate to dismiss the Sixth Cause of Action solely to the extent Baker seeks the

remedies set forth in § 226(e).8

Accordingly, the Sixth Cause of Action is subject to dismissal to the extent it is

brought against Chin and to the extent Baker seeks the remedies set forth in § 226(e).

7. Seventh Cause of Action

In the Seventh Cause of Action, Baker alleges defendants violated § 17200 of the

California Business & Professions Code.

a. Alleged Labor Code Violations

The Seventh Cause of Action is, in part, derivative of Baker’s claims that defendants

violated §§ 201(a), 204, 226, 432, and 1198.5 of the California Labor Code.

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To the extent the Seventh Cause of Action is based on violations of the Labor Code

and is alleged against Chin, and to the extent the Seventh Cause of Action is based on a

violation of § 204, the claim is subject to dismissal for the reasons stated above. To the

extent the Seventh Cause of Action is based on violations of the Labor Code and is alleged

against Chin & Hensolt, and is based on violations of the Labor Code other than

§ 204, however, the claim is not subject to dismissal.

b. Breach of Fiduciary Duty

The Seventh Cause of Action is also based on an allegation that defendants

engaged in a “breach of fiduciary duty” by failing to comply with duties owed to “minority

shareholders” under California law. (See FAC ¶ 94.e.) As noted above, Baker alleges he

is a minority shareholder in Chin & Hensolt, and that defendants have refused to provide

him with various documents concerning the governance of Chin & Hensolt, specifically, the

minutes of annual shareholder’s meetings, the list of the officers, board members and

shareholders of Chin & Hensolt, and the statement of assets and liabilities of Chin &

Hensolt.

Defendants contend Baker’s claim, to the extent Baker alleges they breached

fiduciary duties owed to Baker in his capacity as a minority shareholder, is preempted by

ERISA. Under ERISA, state laws that “relate to” an ERISA plan are preempted. See 29

U.S.C. § 1144(a). A state law “relates to” ERISA where “it has a connection with or

reference to [an ERISA] plan.” See Pilot Life Ins. Co. v. Dedeaux, 481 U.S. 41, 47-48

(1987) (finding state law claims preempted where based on insurer’s alleged improper

processing of claim for benefits available under ERISA plan). Here, however, defendants

fail to argue, let alone show, that any state law requiring defendants to provide Baker with

documents concerning the governance of Chin & Hensolt has any connection with or

reference to the Plan. Nor is it apparent from the face of the FAC that a state law claim

based on the failure to provide Baker with the minutes of annual shareholder’s meetings,

the list of the officers, board members and shareholders, and the statement of assets and

liabilities would have any relationship to the Plan. See Funkhouser v. Wells Fargo Bank,

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N.A., 289 F.3d 1137, 1141 (9th Cir. 2002) (noting argument that state law claim is subject

to dismissal under theory of “conflict preemption” under ERISA is “affirmative defense”);

Jablon v. Dean Witter & Co., 614 F.2d 677, 682 (9th Cir. 1980) (holding complaint may be

dismissed for failure to state a claim based on affirmative defense only where affirmative

defense is “apparent on the face of the complaint”).

Accordingly, to the extent the Seventh Cause of Action is based on a theory that

defendants breached fiduciary duties owed to Baker in his capacity as a minority

shareholder of Chin & Hensolt, defendants have failed to show the Seventh Cause of

Action is subject to dismissal.

c. Conclusion as to Seventh Cause of Action

The Seventh Cause of Action is subject to dismissal to the extent it is based on

(1) a violation of § 204 of the California Labor Code, and (2) any violation of the California

Labor Code and is alleged against Chin. In all other respects, defendants have failed to

show the Seventh Cause of Action is subject to dismissal.

8. Eighth Cause of Action

Under California law, “[i]n addition to, and entirely independent and apart from, any

other penalty provided in [the Labor Code], every person who fails to pay the wages of

each employee as provided in Sections 201.3, 204, 204b, 204.1, 204.2, 205, 205.5, and

1197.5 shall be subject to [specified additional penalties],” see Cal. Lab. Code § 210(a),

which penalties may be recovered “in an independent civil action,” see Cal. Lab. Code

§ 210(b). In the Eighth Cause of Action, Baker alleges he is entitled to the penalties set

forth in § 210(a).

Baker has not alleged a violation of §§ 201.3, 204b, 204.1, 204.2, 205, 205.5, or

1197.5. Further, for the reasons discussed above with respect to the Fifth Cause of Action,

Baker has failed to state a claim under § 204.

Accordingly, the Eighth Cause of Action is subject to dismissal.

//

//

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9. Ninth Cause of Action

In the Ninth Cause of Action, Baker alleges that defendants have breached fiduciary

duties owed to Baker in his capacity as a minority shareholder of Chin & Hensolt. As is

discussed above with respect to the Seventh Cause of Action, the claim is based on the

allegation that defendants have refused to give Baker various documents concerning the

governance of Chin & Hensolt.

Defendants argue the Ninth Cause of Action is preempted by ERISA. For the

reasons stated above with respect to the Seventh Cause of Action, however, the Court

finds defendants have failed to show such affirmative defense is applicable.

Accordingly, defendants have failed to show the Ninth Cause of Action is subject to

dismissal.

B. More Definite Statement 

Defendants argue they are entitled to a more definite statement as to any claim

under the California Labor Code that is not dismissed.

To the extent defendants have failed to show that certain of Baker’s claims brought

under the Labor Code are not subject to dismissal, defendants have failed to show they

cannot reasonably prepare a response to those remaining claims. See Fed. R. Civ. P.

12(e) (providing “more definite statement of a pleading” is properly required where pleading

is “so vague or ambiguous that [a] party cannot reasonably prepare a response”).

Accordingly, defendants have failed to show their entitlement to a more definite

statement.

C. Motion to Strike

Defendants argue that Baker’s jury demand, as well as certain language in the

prayer, should be stricken.

1. Jury Demand

Defendants argue that if the only claims that remain viable at the pleading stage are

claims under ERISA and under § 17200, the Court should strike the jury demand.

As discussed above, defendants have failed to show that each of Baker’s claims

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Defendants do not contest Baker’s jury demand with respect to such state law

claims.

10The Court notes that Baker offers no disagreement with the general legal principle

on which defendants rely, but, rather, observes that what he seeks is an award of

“benefits.” Consistent therewith and read in context, the prayer’s reference to

“compensatory damages . . . including Plan benefits” is a prayer for an award measured by

the Plan benefits to which Baker is entitled, not a claim to some form of extracontractual

damages.

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arising under the California Labor Code is subject to dismissal, and that the Ninth Cause of

Action is subject to dismissal.9

Accordingly, the jury demand will not be stricken.

2. Prayer For Relief

In the prayer, Baker seeks, inter alia, “compensatory damages pursuant to ERISA

including Plan benefits” (see FAC at 14:1), and “a declaratory judgment that defendants

have violated ERISA.”

With respect to the first of the two above-quoted claims for relief, defendants argue

the phrase “Plan benefits” should be stricken because, according to defendants, a plan

participant may not seek “damages” based on a failure to receive benefits under an ERISA

plan. As discussed above with respect to the First Cause of Action, Baker has failed to

properly allege a claim for benefits.10 Accordingly, defendants’ motion to strike Baker’s

reference thereto is moot.

With respect to the second, defendants argue the phrase “violated ERISA” should

be stricken because, according to defendants, a plan participant may never seek

declaratory relief. Although defendants fail to offer any support for such proposition, the

Court finds it unnecessary to address the issue because, as is discussed above with

respect to the Third Cause of Action, Baker has not alleged a viable claim for declaratory

relief.

Accordingly, the motion to strike is, in its entirety, moot and, as such, will be denied.

//

//

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CONCLUSION

For the reasons stated above, defendants’ motion to dismiss, for a more definite

statement, and to strike is hereby GRANTED in part and DENIED in part as set forth below:

1. To the extent defendants seek an order dismissing the First Amended Complaint,

the motion is GRANTED as follows:

a. The First, Third, Fifth and Eighth Causes of Action are DISMISSED;

b. The Second Cause of Action is DISMISSED to the extent Baker seeks

equitable relief to remedy any alleged denial of benefits;

c. The Fourth and Sixth Causes of Action are DISMISSED to the extent they

are alleged against Chin;

d. The Sixth Cause of Action is DISMISSED to the extent Baker seeks the

remedies set forth in § 226(e) of the California Labor Code; and

e. The Seventh Cause of Action is DISMISSED to the extent it is based on

(i) a violation of § 204 of the California Labor Code, and (ii) any violation of the California

Labor Code and is alleged against Chin.

2. In all other respects, the motion is DENIED.

3. In the event Baker seeks to amend any or all of the dismissed claims to cure the

deficiencies identified above, Baker is hereby ordered to file a Second Amended Complaint

no later than January 29, 2010. If Baker elects not to file a Second Amended Complaint,

the instant action will proceed on the remaining claims in the First Amended Complaint.

IT IS SO ORDERED.

Dated: January 12, 2010 

MAXINE M. CHESNEY

United States District Judge

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