Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_06-cv-05778/USCOURTS-cand-3_06-cv-05778-7/pdf.json

Nature of Suit Code: 790
Nature of Suit: Other Labor Litigation
Cause of Action: 28:1331 Fed. Question: Fair Labor Standards

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United States District Court

For the Northern District of California

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 Because the facts of this case were set forth in detail in the Court’s Order of January 30, 2007,

only a brief overview of the facts is provided here.

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

TRISHA WREN, ET AL.,

Plaintiffs,

v.

RGIS INVENTORY SPECIALISTS,

Defendant. _______________________________/

No. C-06-5778 JCS

ORDER GRANTING IN PART AND

DENYING IN PART PLAINTIFFS’ MOTION

TO AMEND FIRST AMENDED COMPLAINT

[Docket No. 33]

I. INTRODUCTION

Plaintiffs filed a Motion for Order Granting Leave to Amend Plaintiffs’ First Amended

Complaint (“the Motion”). The Court finds the Motion suitable for decision without oral argument. 

For the reasons stated below, the Motion is GRANTED in part and DENIED in part.

II. BACKGROUND1

On November 1, 2006, Defendant brought a motion to dismiss in this action. On December

29, 2006 – after the motion to dismiss had been fully briefed but prior to oral argument on that

motion – Plaintiffs filed the instant motion, seeking to amend their complaint by adding a claim

under California’s Private Attorneys General Act (“PAGA”), Cal. Lab. Code §§ 2698 et seq. In

particular, Plaintiffs’ Proposed Second Amended Complaint includes a PAGA claim based on the

violations alleged in Claims One through Eleven of their complaint, that is, all of the California state

law claims.

Under PAGA, employees may sue for civil penalties that previously could be recovered only

by the Labor and Workforce Development Agency (“LWDA”) so long as they meet the statute’s

Case 3:06-cv-05778-JCS Document 65 Filed 02/09/07 Page 1 of 4
United States District Court

For the Northern District of California

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exhaustion requirements. Cal. Lab. Code § 2699(a). Employees who recover such penalties may

retain only 25% of the penalties, with the remaining 75% going to the LWDA. Cal. Lab. Code

§ 2699(i). Aggrieved employees who seek civil penalties under PAGA as “private attorneys

general” may also seek to recover statutory penalties for Labor Code violations that were available

to employees prior to the adoption of PAGA. See Dunlap v. Superior Court, 142 Cal. App. 4th 330,

339 (2006) (explaining distinction between “a request for statutory penalties provided by the Labor

Code for employer wage and hour violations, which were recoverable by employees well before the

[PAG] Act became part of the Labor Code, and a demand for ‘civil penalties,’ previously

enforceable only by the State’s labor law enforcement agencies”). With respect to such penalties, no

exhaustion is required. Id. 

In the Motion, Plaintiffs assert that they have now exhausted their state administrative

remedies under PAGA and therefore, should be permitted to add a claim under that statute. In

particular, on September 27, 2006, Plaintiffs’ counsel sent a letter to the LWDA notifying it of the

following alleged violations of California Law: 1) rest and meal period violations (Cal. Labor Code

§§ 226.7, 510 and 512); 2) late pay violations (Cal. Labor Code § 204); 3) minimum wage violations

(Cal. Labor Code §§ 500, 510, 1194, 1194.2 and 1197); 4) overtime pay violations (Cal. Labor Code

§§ 226, 500, 510 and 1194); 5) itemized wage statement violations (Cal. Labor Code § 226). 

Declaration of Bonnie MacFarlane in Support of Motion for Order Granting Leave to Amend

Plaintiffs’ First Amended Complaint (“MacFarlane Decl.”), Ex. A. Copies of this letter were sent to

RGIS and its agent for service of process, Paracorp Corporation, both of which were listed in the

heading of the letter. Id. On November 1, 2006, the LWDA sent a letter to Plaintiffs’ counsel,

Bonnie MacFarlane, stating that it did not intend to investigate Plaintiffs’ claims. Id., Ex. B. In its

letter, the LWDA expressly referenced Plaintiffs’ letter “postmarked September 27, 2006.” Id. It

also listed the employees as “Trisha Wren et al.” Id. However, in an apparent clerical error, it

referred to the employer as Paracorp Corp. Id. On December 29, 2006, Plaintiffs’ counsel faxed a

letter to the LWDA requesting that it issue a new letter listing the correct employer. Id., Ex. C. In

the letter, Plaintiffs’ counsel referred to a conversation with an Agency employee in which the

employee “stated that [the Agency] knows that [Plaintiffs] wish to pursue claims under the

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For the Northern District of California

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 Although at the time RGIS filed its Opposition the Court had not yet filed its order dismissing

these claims, the Court made clear at the January 12, 2006 hearing that it intended to dismiss some of

Plaintiffs’ claims. 

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California Labor Code § 2699 et. seq. against RGIS Inventory Specialists dba in California as RGIS

Inventory Specialist LLC not its agent for service of process Paracorp Incorporated.” Id. 

In their Opposition, Defendants objected to the Motion on two grounds. First, they pointed

out that Plaintiffs’ proposed Second Amended Complaint includes claims that the Court dismissed in

its January 30, 2007 Order.2

 Second, they asserted that Plaintiffs had not adequately exhausted their

state law remedies because the letter that was sent to Plaintiffs by the LWDA listed Paracorp Inc. as

the employer rather than RGIS. 

Plaintiffs provided a corrected letter from the LWDA, dated January 26, 2007, in support of

their Reply brief. See Declaration of Bonnie MacFarlane in Support of Reply (“MacFarlane Reply

Decl.”), Ex. A. On that basis, they assert that Defendant’s objections are now moot and incorrect. 

Plaintiffs did not address Defendant’s argument that the Motion should be denied because the

proposed Second Amended Complaint contained claims that had been dismissed.

III. ANALYSIS

Under Rule 15(a) of the Federal Rules of Civil Procedure, leave to amend “shall be freely

given when justice so requires.” Here, the Court concludes that leave to amend to assert a claim

under PAGA is in the interest of justice, at least as to the alleged labor code violations that were

raised in Plaintiffs’ September 27, 2006 letter. 

 Under PAGA, prior to commencing a civil action, a plaintiff is required to “give written

notice by certified mail to the Labor and Workforce Development Agency and the employer of the

specific provisions of this code alleged to have been violated.” Cal. Lab. Code § 2699.3(a). The 

plaintiff may initiate a civil action once either of the following conditions are met: 1) the Agency

notifies the plaintiff, within 30 days of receipt of the plaintiff’s letter, that it does not intend to

investigate the allegations; or 2) the Agency fails to send notice to the plaintiff within 33 calendar

days of the postmark on the plaintiff’s letter to the Agency. Here, Plaintiffs received notice within

30 days that the Agency did not intend to investigate. To the extent there was any question

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For the Northern District of California

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 Although the Court has found no case that is directly on point, it notes that in general, state law

exhaustion requirements have been found under the Erie doctrine to apply in cases where federal courts

exercise diversity jurisdiction over state law claims. See White v. Lavigne, 741 F.2d 229, 230 (8th Cir.

1984) (holding that “[t]o waive the [state law] exhaustion requirements . . . for plaintiffs suing in

diversity would contravene the policies underlying the Erie doctrine”). The Court need not decide that

issue here but rather, assumes that the state law exhaustion requirement in PAGA applies in federal

court for the purposes of this motion.

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regarding the sufficiency of that notice, the corrected notice resolved that issue. Therefore, Plaintiffs

have met PAGA’s exhaustion requirements as to the Labor Code violations alleged in Plaintiffs’

September 27, 2006 letter.3

 The Court notes, however, that Plaintiffs’ proposed Second Amended Complaint is deficient

in two respects. First, Plaintiffs’ PAGA claim refers to Claims One through Eleven and thus appears

to encompass not only Labor Code violations but also common law claims, for which no civil

statutory penalties are available. Plaintiffs should revise their complaint to make clear that their

PAGA claim is based only on the alleged Labor Code violations. Second, because Plaintiffs drafted

their proposed Second Amended Complaint prior to this Court’s ruling on Defendants’ motion to

dismiss, it contains claims that have now been dismissed. Accordingly, Plaintiffs will be required to

revise their Second Amended Complaint to reflect the Court’s ruling in its January 30, 2007 Order.

IV. CONCLUSION

Plaintiffs’ Motion is GRANTED to the extent that they seek to assert a claim under PAGA

based on Claims One through Seven of the First Amended Complaint. Plaintiffs’ Motion is

DENIED to the extent their proposed Second Amended Complaint relies on Claims Eight through

Eleven as a basis for their PAGA claim and includes claims that have now been dismissed. 

Plaintiffs shall be permitted to file a revised Second Amended Complaint in which: 1) all

dismissed claims have been removed; and 2) the PAGA claim reflects that it is based only on the

California Labor Code violations alleged in Claims One through Seven. 

IT IS SO ORDERED.

Dated: February 9, 2007 ___________________________ JOSEPH C. SPERO

United States Magistrate Judge

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