PHIL POSTON, INDIVIDUALLY, AND ON BEHALF OF OTHER AGGRIEVED EMPLOYEES PURSUANT TO THE CALIFORNIA PRIVATE ATTORNEYS GENERAL AC VS PENSKE LOGISTICS, LLC, AN UNKNOWN BUSINESS ENTITY, ET AL.

Tentative Rulings

Case Number: *******0142 Hearing Date: September 30, 2021 Dept: A

SUPERIOR COURT OF THE STATE OF CALIFORNIA

FOR THE COUNTY OF LOS ANGELES – SOUTH CENTRAL DISTRICT

1. Background

The complaint filed on 6/7/21, seeks enforcement under the Private Attorneys General Act, (“PAGA”) for violations under California Labor Code ; 2698, et seq. Plaintiff, Phil Poston, on behalf of himself and other aggrieved hourly employees alleges he was employed by Defendants, Penske Logistics, LLC; and Penske Truck Leasing, Co., L.P. (“Defendants”). Defendants allegedly failed to pay for all hours worked and for missed meal periods, missed rest breaks, and failure to pay overtime among other alleged violations of the Labor Code.

2. Demurrer to the Complaint or in the Alternative, to Stay the Action

a. Demurrer filed 8/18/21.

Defendants demur to the Plaintiff’s complaint as there is another action pending in the United States District Court for the Central District (“Federal Court”) bearing Case No. 2:21-CV-03939 and captioned Poston v. Penske Logistics, LLC, et al. That action alleges the same wage and hour claims asserted in this action against the same Defendants. Defendants removed the case to the Federal Court where it is now pending. Plaintiff did not move to remand the Federal Action. Plaintiff then filed this action asserting state law remedies (“State Action”)

Defendants argue that Plaintiff has engaged in improper claim splitting which warrants sustaining demurrer to the entire complaint and staying the case. The cases involve overlapping factual allegations and parties. Litigating both cases simultaneously will pose a high risk of unseemly conflicts, duplicative litigation efforts, and inconsistent findings of fact and law.

Alternatively, Defendants argue that the court should stay the action in deference to the Federal Action. Plaintiff has only one primary right but is asserting two different remedies in two different courts. That Plaintiff is asserting different remedies does not permit splitting the claims into two separate complaints.

Defendants argue that in a PAGA action, the true party is the State of California, who filed three earlier PAGA actions against the same Defendants in three separate cases: 20STCV46359 Zamora v. Penske Truck Leasing, which is pending in the Superior Court for the County of Los Angeles; CIVSB2029173 Taylor v. Penske Logistics, LLC. action pending in the Superior Court for the County of San Bernardino; and 34-2021-00292756 Luna V. Penske Logistics, LLC now pending in the Superior Court for the County of Sacramento. The court grants Defendant’s Request for Judicial Notice (“RJN”) of Exhibits 1, 2, 3, 4, pursuant to Evid. Code, ; 452(d) [Judicial notice of court records is permitted.] Defendant contends that the Luna action is now stayed pending the outcome of an earlier filed Federal Court action. RJN, Ex. 5.

Alternatively, the court should stay this case in deference to the Federal Action. Defendant contends that abatement of the second action is a matter of right. If the first case involves substantially the same controversy between the parties, the court has no discretion to allow the second action to proceed. Concurrent exclusive jurisdiction also supports a stay. The first to assume jurisdiction has exclusive and continuing jurisdiction over the subject matter and all parties involved.

b. Plaintiff’s opposition filed by 9/17/21.

Plaintiff argues that Defendants’ reliance on Code Civ. Proc., ; 597 is misplaced. That section permits interlocutory judgments. Defendant did not specifically request an interlocutory judgment. Further, Plaintiff did not state the requirements of Code Civ. Proc., ; 430.10(c) which permits demurrer on grounds there is another action between the same parties on the same cause of action. The plea in abatement requires absolute identity of the parties. Plaintiff’s claims are different from those alleged in the Zamora, Luna, and Taylor PAGA actions. Plaintiff here is alleging that Defendants failed to indemnify aggrieved employees for losses caused by Defendant’s Labor Code violations.

Sustaining demurrer and abating or staying this action will result in prejudice to Plaintiff because of the potential loss of evidence.

c. Reply filed 9/23/21.

Defendant reiterates that when a federal action has been filed covering the same subject matter, the court has discretion to stay the state court action. There is a strong policy of comity to support a stay of the state-court proceedings, where a similar action is pending in federal court. The court is required to enter an interlocutory judgment in favor of Defendant where the court determines that there is another action pending on the same issues between the same parties.

3. Demurrer Standards

A demurrer tests the sufficiency of a complaint as a matter of law and raises only questions of law. Schmidt v. Foundation Health (1995) 35 Cal.App.4th 1702, 1706. In testing the sufficiency of the complaint, the court must assume the truth of (1) the properly pleaded factual allegations; (2) facts that can be reasonably inferred from those expressly pleaded; and (3) judicially noticed matters. Blank v. Kirwan (1985) 39 Cal.3d 311, 318. The court may not consider contentions, deductions, or conclusions of fact or law. Moore v. Conliffe (1994) 7 Cal.App.4th 634, 638.

Because a demurrer tests the legal sufficiency of a pleading, the plaintiff must show that the pleading alleges facts sufficient to establish every element of each cause of action. Rakestraw v. California Physicians Service (2000) 81 Cal.App.4th 39, 43. Where the pleading fails to state facts sufficient to constitute a cause of action, courts should sustain the demurrer. Code Civ. Procedure ; 430.10(e); Zelig v. County of Los

Among other limited bases, a demurrer may be sustained on grounds there is another action pending between the same parties on the same cause of action. Code Civ. Proc., ; 430.10(c). To determine the scope of causes of action, California courts employ the ‘primary rights’ theory. Under this theory, ‘the underlying right sought to be enforced determines the cause of action.’ In determining the primary right, the significant factor is the ‘harm suffered.\'” Craig v. County of L.A. (1990) 221 Cal.App.3d 1294, 1301.

Once determined that primary right cannot be split “either as to relief demanded or grounds on which recovery is sought.” Panakosta, Partners, LP v. Hammer Lane Management, LLC (2011) 199 Cal.App.4th 612, 634. A plea in abatement is available against all actions other than the first commenced. Id. [“This principle is fundamental and has been consistently applied by our courts.”].

4. Discussion

The complaint in this action seeks enforcement of the Labor Code and seeks civil penalties for Defendant’s alleged violations for failure to pay overtime, meal periods, rest periods, pay minimum wage, timely pay wages during employment and upon termination, to provide complete and accurate wage statements, to keep complete and accurate payroll records, and to reimburse necessary business-related expenses and costs. Complaint ¶¶ 53-61.

Plaintiff previously filed a class action complaint on 2/25/21 bearing Case No. 21STCV07387. RJN, Ex., 6. The court’s file reflects that on 5/19/21, the court stayed this action pending removal to federal court. The federal court action is brought on behalf of current and former, hourly-paid or non-exempt employees of Defendants. The Federal Action asserts the same nine violations of the Labor Code as the State Action. The only differences are that the Federal Action adds a claim for violation of Bus. and Prof. Code ; 17200, and the State Action seeks remedies under PAGA exclusively.

As the same violations of the Labor Code are alleged, Plaintiff is asserting the same primary right in the State Action. As stated above, once the court determines the primary right at issue, “that primary right cannot be split ‘either as to relief demanded or grounds on which recovery is sought.’” Panakosta, supra, at 634.

Thus, that Plaintiff asserts relief under PAGA in the State Action, is of no significance: “It is not significant to our analysis that the two operative complaints seek different forms of relief. “‘[T]he key issue is whether the same cause of action is involved in both suits. California law approaches the issue by focusing on the “primary right” at stake: if two actions involve the same injury to the plaintiff and the same wrong by the defendant then the same primary right is at stake even if in the second suit the plaintiff pleads different theories of recovery, seeks different forms of relief and/or adds new facts supporting recovery.” Deleon v. Verizon Wireless (2008) 170 Cal.App.4th 519, 528.

Plaintiff relies on Bautista v. Fantasy Activewear, Inc. (2020) 52 Cal.App.5th 650, for the proposition that Plaintiff has not split his cause of action since a PAGA claim is “legally and conceptually different from an employee’s own suit for damages and statutory penalties.” Id. at 656. Bautista is factually distinguishable. At issue before the court was whether Plaintiff should be compelled to arbitrate the PAGA complaint because an employee’s settlement agreement containing an arbitration provision did not encompass Plaintiff’s PAGA action. The court did not consider splitting claims and primary rights.

While Plaintiff correctly observes that in a PAGA action, the real-party-in-interest is the State of California, staying the State Action does not defer the PAGA action. Opp. 8:12-14. Plaintiff is free to amend his Federal Action to include PAGA enforcement based on the same violations of the Labor Code.

Plaintiff relies on Thomson v. Continental Ins. Co. (1967) 66 Cal.2d 738, 740 although it supports Defendant’s request for a stay. While Thomson was decided in the context of a motion for inconvenient forum (which the court granted), in considering whether a stay or dismissal of one action was required where the issues in two actions were identical, the court articulated the factors for the court to consider in exercising its discretion:

“In exercising its discretion the court should consider the importance of discouraging multiple litigation designed solely to harass an adverse party, and of avoiding unseemly conflicts with the courts of other jurisdictions. It should also consider whether the rights of the parties can best be determined by the court of the other jurisdiction because of the nature of the subject matter, the availability of witnesses, or the stage to which the proceedings in the other court have already advanced." Thomson at 746-747.

Given that both actions assert the same primary rights, the risk of conflict in determining the issues of fact and law are high. While there is no evidence that Plaintiff intends to harass Defendant, multiple litigation of the same issues will have the same effect. Denying a stay would require Defendants to engage in duplicative litigation in different courts resulting in a waste of judicial resources, all issues to be considered in deciding whether a stay is warranted. Caiafa Prof. Law Corp. v. State Farm Fire & Cas. Co. (1993) 15 Cal. App. 4th 800, 803-804 [“It is black letter law that, when a federal action has been filed covering the same subject matter as is involved in a California action, the California court has the discretion but not the obligation to stay the state court action.”]. Another “critical” factor favoring a stay recognized by the Caiafa court was that “the federal action is pending in California not some other state.” Caiafa at 804.

Accordingly, Defendant has established grounds for a stay based on another action pending. Defendant’s alternative to request an interlocutory judgment pursuant to Code Civ. Proc., ; 597, is not considered. Section 597 concerns the trial of special defenses where the court determines that a defense not involving the merits of the claim but constituting a ground for abatement, the court can try the special defense first.

5. Conclusion

Based on the foregoing, the court SUSTAINS demurrer to the complaint and orders this matter stayed until the Federal Action is resolved.

Defendants are ordered to give notice.

DATED: September 30, 2021

_______________________________

Hon. Thomas D. Long

Judge of the Superior Court