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Case4:12-cv-02705-DMR Document30 Filed12/21/12 Page1 of 6

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UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

CESAR CRUZ,

Plaintiff(s),

v.

SKY CHEFS, INC. ET.AL.,
Defendant(s).

___________________________________/

No. C 12-02705 DMR
ORDER DENYING DEFENDANT’S
MOTION TO DISMISS

Defendant Sky Chefs, Inc. moves pursuant to Federal Rule of Civil Procedure 12(b)(1) to

dismiss Plaintiff Cesar Cruz’s class action complaint for lack of subject matter jurisdiction, arguing
that all of Plaintiff’s claims are preempted by the Railway Labor Act (“RLA”), 45 U.S.C. § 151 et
seq. For the reasons stated below, and in light of modifications to the class complaint made during
the December 20, 2012 motion hearing, the court denies the motion.

I. Background

Defendant, a business which provides in-flight food and beverage catering services to

numerous airline carriers within the United States, hired Plaintiff in July 1996 as an assembler.
(Murray Decl. ¶ 2, Oct. 1, 2012; see Am. Compl. ¶ 3.) During his employment, Plaintiff was a
member of the Unite Here International Union (SFO/Unit 1692), and his relationship with Defendant
was governed by a collective bargaining agreement (“the CBA”). (Murray Decl. ¶ 4, Ex. A.)

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Case4:12-cv-02705-DMR Document30 Filed12/21/12 Page2 of 6

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Plaintiff filed this putative class action on March 16, 2012 in Alameda County Superior
Court. [See Docket No. 1 at 2.] On May 23, 2012, Plaintiff amended his complaint to state nine
California state law causes of action against Defendant: (1) failure to pay wages for compensable
work at minimum wage pursuant to California Labor Code §§ 1194 and 1197 (“minimum wage
claim”), (2) failure to pay earned wages for compensable time in violation of California Labor Code
§ 204 (“earned wages claim”), (3) failure to pay overtime wages in accordance with California
Labor Code §§ 510, 1194, and 1198 (“overtime wages claim”), (4) failure to pay overtime wages at
the proper rate under California Labor Code §§ 510 and 1194 (“overtime wages rate claim”), (5)
failure to provide required meal periods pursuant to California Labor Code §§ 226.7 and 512 (“meal
period claim”), (6) failure to provide complete and accurate wage statements in violation of
California Labor Code § 226 (“wage statements claim”), (7) failure to pay all wages timely upon
separation of employment in accordance with California Labor Code §§ 201 and 202 (“timely
payment of wages claim”), (8) unfair competition pursuant to California Business and Professions
Code § 17200 (“unfair competition claim”), and (9) a request for civil penalties under the Labor
Code Private Attorneys General Act of 2004 (“PAGA”), California Labor Code § 2698 et seq.
(“PAGA claim”). (Am. Compl. ¶¶ 37-102.) On May 25, 2012, Defendant removed the case to
federal court, basing federal jurisdiction on the Class Action Fairness Act, 28 U.S.C. § 1332(d).
[Docket No. 1.]

On October 5, 2012, Defendant filed a motion to dismiss Plaintiff’s complaint on the grounds
that his claims are preempted by the RLA. [Docket No. 20.] The court held a hearing on December
20, 2012. During the hearing, Plaintiff represented to the court that he would limit all claims to
encompass only class members who had never received a shift differential or lead pay during the
class period. He also stipulated to dismiss the third cause of action for overtime wages. He further
conceded that he does not dispute the rate at which Defendant calculated overtime pay as shown on
the paystubs, except for Defendant’s alleged failure to include earned bonuses (as indicated on the
paystubs) in its calculation of the regular rate of pay. In light of these representations, Defendant
conceded that resolution of Plaintiff’s earned wages claim, overtime wages rate claim, meal period
claim, wage statements claim, timely payment of wages claim, unfair competition claim, and PAGA

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Case4:12-cv-02705-DMR Document30 Filed12/21/12 Page3 of 6

claim would not require the court to interpret the collective bargaining agreement between the
parties and, therefore, would not be preempted by the RLA, see infra. Accordingly, only Plaintiff’s
minimum wage claim remains in dispute between the parties.

The parties have filed consents to this court’s jurisdiction pursuant to 28 U.S.C. § 636(c).

[Docket Nos. 9, 13.] The court therefore may enter judgment in the case. See 28 U.S.C.
§ 636(c)(1); Fed. R. Civ. P. 72(b); N.D. Cal. Civ. L.R. 72-1.
II. Applicable Law

A. Dismissal for Lack of Subject Matter Jurisdiction
A court will dismiss a party’s claim for lack of subject-matter jurisdiction “only when the

claim is so insubstantial, implausible, foreclosed by prior decisions of th[e Supreme] Court, or
otherwise completely devoid of merit as not to involve a federal controversy.” Steel Co. v. Citizens
for a Better Env't, 523 U.S. 83, 89 (1998) (citation and quotation marks omitted); see Fed. R. Civ. P.
12(b)(1). When reviewing a 12(b)(1) motion, the court sculpts its approach according to whether the
motion is “facial or factual.” White v. Lee, 227 F.3d 1214, 1242 (9th Cir. 2000). A facial challenge
asserts that “the allegations contained in a complaint are insufficient on their face to invoke federal
jurisdiction.” Safe Air for Everyone v. Meyer, 373 F.3d 1035, 1039 (9th Cir. 2004). A factual
challenge, such as in the motion at bar, asserts that subject-matter jurisdiction does not exist,
independent of what is stated in the complaint. White, 227 F.3d at 1242. In contrast with a facial
challenge, a factual challenge permits the court to look beyond the complaint, without “presum[ing]
the truthfulness of the plaintiff's allegations.” Id. Even the presence of disputed material facts “will
not preclude the trial court from evaluating for itself the merits of jurisdictional claims.” Roberts v.
Corrothers, 812 F.2d 1173, 1177 (9th Cir. 1987). To successfully rebut a factual challenge in a
motion to dismiss, the non-moving party “‘must furnish affidavits or other evidence necessary to
satisfy its burden of establishing subject matter jurisdiction.’” White v. Astrue, No. 10-2124-CRB,
2011 WL 900289, at *3 (N.D. Cal. Mar. 15, 2011) (quoting Savage v. Glendale Union High Sch.,
343 F.3d 1036, 1040 n.2 (9th Cir. 2003)).

B. Preemption Under the Railway Labor Act

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Congress enacted the Railway Labor Act “‘to promote stability in labor-management

relations by providing a comprehensive framework for resolving labor disputes.’” Espinal v. Nw.
Airlines, 90 F.3d 1452, 1456 (9th Cir. 1996) (quoting Hawaiian Airlines, Inc. v. Norris, 512 U.S.
246, 252 (1994)). It expanded the act to encompass the airline industry in 1936. Hawaiian Airlines,
Inc., 512 U.S. at 248; Espinal, 90 F.3d at 1455-56. This alteration brought not only air carriers, but
companies “which are directly or indirectly controlled” by carriers, into the RLA’s ambit.
Westbrook v. Sky Chefs, Inc., 35 F.3d 316, 317 (7th Cir. 1994) (citing 45 U.S.C. § 151).

The RLA requires mandatory arbitration for two classes of disputes: “Major” disputes,

which concern “‘the formation of collective bargaining agreements or efforts to secure them,’” and
“Minor” disputes, which “‘involve controversies over the meaning of an existing collective
bargaining agreement in a particular fact situation.’” Espinal, 90 F.3d at 1456 (quoting Hawaiian
Airlines, Inc., 512 U.S. at 253). The present motion concerns a minor dispute.

To determine whether a minor dispute falls within the scope of the RLA, the Supreme Court

has instructed courts to employ the preemption test used under the Labor Management Relations
Act, 29 U.S.C. § 185. Hawaiian Airlines, Inc., 512 U.S. at 263; Espinal, 90 F.3d at 1456. First, the
court must determine “‘whether the asserted caused of action involves a right conferred upon an
employee by virtue of state law, not by a CBA.’” Lara v. San Bernardino Steel, Inc., No. 11-1357,
2011 WL 4480167, at *3 (C.D. Cal. Sept. 20, 2011) (quoting Burnside v. Kiewit Pac. Corp., 491
F.3d 1053, 1059 (9th Cir. 2007)). If the right originates from the CBA, preemption applies; if the
right arises from state law, the court proceeds to determine whether the claim is “‘substantially
dependent on analysis of a collective bargaining agreement.’” Id. (quoting Burnside, 491 F.3d at
1059); see Gregory v. SCIE, LLC, 317 F.3d 1050, 1052 (9th Cir. 2003) (citing Allis-Chalmers Corp.
v. Lueck, 471 U.S. 202, 220 (1985)); Espinal, 90 F.3d at 1456. The court will find a claim
substantially dependent on the analysis of a CBA if the claim requires the court to “‘interpret,’ rather
than merely ‘look to,’ the collective bargaining agreement.” Lara, 2011 WL 4480167, at *3
(quoting Burnside, 491 F.3d at 1059); accord Gregory, 317 F.3d at 1052 (“‘[W]hen the meaning of
contract terms is not the subject of a dispute, the bare fact that a collective-bargaining agreement
will be consulted in the course of state-law litigation plainly does not require the claim to be

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Case4:12-cv-02705-DMR Document30 Filed12/21/12 Page5 of 6

extinguished.’”) (quoting Livadas v. Bradshaw, 512 U.S. 107, 122-24 (1994)) (brackets in original).
In cases where the state law claim is “‘inextricably intertwined’” with the meaning of the terms of a
CBA, the RLA also will preempt the state law claim. Firestone v. S. Cal. Gas Co., 281 F.3d 801,
802 (9th Cir. 2002).

III. Discussion

A. The Railway Labor Act’s Applicability to Defendant and Its Employees
Before turning to whether Plaintiff’s claims fall within the scope of the RLA, the court must

establish whether the RLA applies to Defendant and its employees. Defendant is a wholly-owned
subsidiary of Deutsche Lufthansa AG, which owns and operates Lufthansa Airlines. (Murray Decl.
¶ 5.) The firm’s primary function is to provide in-flight food and beverages catering services to
numerous airline carriers within the United States. (Murray Decl. ¶ 6.) Defendant operates
approximately 40 kitchens near or at major airports around the country. (Murray Decl. ¶ 7.) The
respective contracting airlines exercise significant control over Defendant’s daily operations,
including dictating food preparation and often specific menus, conducting unannounced inspections,
implementing rules applicable to employees’ performance of services, training employees, and
recommending employees’ discipline and termination. (Murray Decl. ¶ 8.) Because airline carriers
directly and indirectly exercise significant control over Defendant’s business and operations, the
court finds that the RLA applies to Defendant and its employees. See Westbrook, 35 F.3d at 317
(citing 45 U.S.C. § 151); accord In re Sky Chefs, Inc., 15 N.M.B. 397 (Sept. 29, 1988) (opining that
Sky Chefs, Inc. and its employees are subject to jurisdiction of RLA).

B. Plaintiff’s Minimum Wage Claim
Plaintiff’s right to bring the minimum wage claim -- the sole claim presently in dispute
between the parties -- originates under California state law, specifically California Labor Code
§§ 1194 and 1197. See Blackwell v. Skywest Airlines, Inc., No. 06-307, 2008 WL 5103195, at *4
(S.D. Cal. Dec. 3, 2008). Because Plaintiff’s right to bring this claim derives from state law, the
court must determine whether resolution of the claim is substantially dependent on analysis of the
CBA.

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Case4:12-cv-02705-DMR Document30 Filed12/21/12 Page6 of 6

Plaintiff’s minimum wage claim alleges that, due to Defendant’s allegedly illegal rounding

of the time employees clocked in and out, Defendant failed to pay Plaintiff and putative class
members minimum wages for all hours worked. The resolution of this dispute turns merely on the
number of hours worked by Plaintiff and putative class members, and whether they received the
minimum wage for that time. See Gregory, 317 F.3d at 1053 & nn.3-4; Lara, 2011 WL 4480167, at
*4. The court will not have to interpret the CBA to resolve the claim. The RLA therefore does not
preempt the claim.

IV. Conclusion

For the reasons provided above, and in light of modifications to the complaint made during
the motion hearing, the court denies Defendant’s motion to dismiss. The court finds that Plaintiff’s
minimum wage claim is not preempted by the RLA. Moreover, pursuant to the parties’ stipulations,
the court dismisses Plaintiff’s third cause of action for overtime wages. The court further orders
Plaintiff to file an amended complaint that conforms to the stipulations made during the motion
hearing and memorialized in this order by no later than January 25, 2013.

IT IS SO ORDERED.

Dated: December 21, 2012



DONNA M. RYU


United States Magistrate Judge

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UNITEDSTATESDISTRICTCOURTNORTHERNDISTRICTOFCALIFORNIAIT IS SO ORDEREDJudge Donna M. Ryu