[00:00:00] Speaker 00:
Good morning, your honors.

[00:00:03] Speaker 00:
May it please the court, I'm Thomas Segal, counsel for appellants.

[00:00:09] Speaker 00:
I will start with the plausibility argument.

[00:00:13] Speaker 00:
One thing that I think is important to note about the plausibility argument is that the operative complaint, in addition to alleging

[00:00:23] Speaker 00:
that Mr. Gomez did not receive the wage statements.

[00:00:27] Speaker 00:
It also alleges a theory that under California law, mailing of wage statements is not permissible.

[00:00:35] Speaker 00:
And that is clearly an issue which implicates more people than just Mr. Gomez.

[00:00:42] Speaker 00:
And it's clearly an issue that can be adjudicated one way or another on a class-wide basis.

[00:00:48] Speaker 03:
But, Council, the difficulty is that

[00:00:51] Speaker 03:
There were no allegations that other individuals failed to receive the statements There were no allegations in that complaint any specific allegations regarding that am I incorrect in my reading of a complaint?

[00:01:06] Speaker 00:
well so

[00:01:10] Speaker 00:
I don't think the court is incorrect in the sense that did we identify somebody and say, no, they also didn't receive wage statements.

[00:01:19] Speaker 00:
No, but from the factual allegations, I think it can be inferred that this was not something that just happened to Mr. Gomez.

[00:01:29] Speaker 00:
So for example, you have the fact that... How can we infer that?

[00:01:34] Speaker 03:
How can we infer that it happened to other people if that's not alleged?

[00:01:40] Speaker 00:
Well, so it can be inferred for several reasons.

[00:01:50] Speaker 00:
There is the fact that they assert, I mean, there's the banal declaration which states that they mail.

[00:02:00] Speaker 00:
It states what their practices are.

[00:02:01] Speaker 00:
It states that they mail weekly.

[00:02:05] Speaker 00:
And what happened to Mr. Gomez calls into serious question whether that is in fact the practice because they assert that they mail it weekly.

[00:02:18] Speaker 00:
He worked there for 12 weeks.

[00:02:20] Speaker 00:
He should have received at least 12 wait statements and if

[00:02:27] Speaker 00:
They were actually mailing it.

[00:02:29] Speaker 00:
He alleged that he checked his mouth diligently.

[00:02:31] Speaker 00:
There's been no assertion that any of these... Are you basically relying on an inference?

[00:02:38] Speaker 00:
Yes.

[00:02:39] Speaker 02:
And I think it is... But you were given six opportunities to amend the complaint.

[00:02:45] Speaker 02:
Why should at this stage all you have on this claim be just a plausible inference?

[00:02:51] Speaker 00:
Well, once this case got to federal court, there was no discovery.

[00:02:56] Speaker 00:
The district court imposed a stay on discovery while the pleadings were resolved.

[00:03:01] Speaker 02:
But under Rule 11, you should have done an investigation before you filed your complaint, right?

[00:03:05] Speaker 02:
I think it would be of concern if you couldn't file a complaint without discovery because you hadn't done enough of a Rule 11 investigation to have support for the allegations that you are intending to

[00:03:19] Speaker 02:
to assert?

[00:03:20] Speaker 00:
Well, we did do an investigation.

[00:03:22] Speaker 00:
We requested his personnel file under California law.

[00:03:26] Speaker 00:
We only have the right to request our client's personnel file.

[00:03:31] Speaker 00:
We don't have the right to obtain anyone else's personnel file before the case is filed.

[00:03:39] Speaker 00:
And, you know, I think the inferences here should be regarded as compelling.

[00:03:45] Speaker 03:
Counsel, isn't the opposite inference just as plausible that there was a glitch with your client, but not with anyone else?

[00:03:55] Speaker 00:
Not given all of the facts, because first, I mean, it happened 12 times, whatever the glitch was.

[00:04:04] Speaker 03:
But just with him, that's my point, that it could have been something that was unique to him, his address or whatever.

[00:04:11] Speaker 03:
that was unique to him and not necessarily a system failure.

[00:04:15] Speaker 00:
But you also have the fact that they are unable to produce any actual copies of the wage statements.

[00:04:21] Speaker 00:
For him.

[00:04:22] Speaker 03:
For him.

[00:04:24] Speaker 00:
I don't believe that's correct.

[00:04:25] Speaker 00:
I believe that the banal declaration says they can't produce the wage statements for anyone.

[00:04:31] Speaker 01:
And this is despite... Doesn't that just indicate that they don't maintain paper copies?

[00:04:36] Speaker 01:
They have electronic... They store the information electronically and they've said they can replicate your wage statement and print it for you as opposed to who knows how much paper this would be, but it seems to be sort of the way things are stored now is electronically.

[00:04:51] Speaker 00:
Well, I mean,

[00:04:52] Speaker 00:
That's right, but they also say that they email people the wage statements.

[00:04:57] Speaker 00:
And so they say they're unable to produce those either.

[00:05:01] Speaker 00:
And so I don't understand how if they're emailing people the wage statements.

[00:05:05] Speaker 01:
Well, wait a minute.

[00:05:05] Speaker 01:
Did they have Mr. Gomez's email address and try to send it to him by email?

[00:05:09] Speaker 00:
I believe that they did not have his email address.

[00:05:12] Speaker 01:
Okay.

[00:05:12] Speaker 01:
So, and you've said you couldn't do discovery as to other employees.

[00:05:16] Speaker 01:
So do you know if they have maintained emails for other employees?

[00:05:21] Speaker 00:
Well, that's what the banal declaration says.

[00:05:23] Speaker 00:
The banal declaration says that when they have the email address, they email the wage statement.

[00:05:28] Speaker 01:
Right, but then the next question is you've suggested that this isn't true because they don't have the electronic copies of the email, like you have send and maybe there's an outbox and they should have all these emails, but your client didn't give them an email address so they wouldn't have it for him.

[00:05:44] Speaker 01:
They didn't send them to him by email and you've said you didn't get information on other employees, so I'm seeing sort of a disconnect as to how do we then leap to the conclusion that they don't indeed have these emails.

[00:05:55] Speaker 01:
Maybe they don't, but how do we know that?

[00:05:57] Speaker 00:
Well, I mean, that's what I think the Bernal Declaration implies.

[00:06:00] Speaker 00:
It says they don't have copies of the wage statements and that therefore they have to be, as the declaration says, regenerated.

[00:06:07] Speaker 00:
But the thing that we know happens to more than, not just to Mr. Gomez.

[00:06:12] Speaker 02:
Can I ask you, in paragraph 9 of the Bernal Declaration, it says attached here too as exhibit A is a replica of the wage statement elite provided to Mr. Gomez.

[00:06:22] Speaker 02:
for the pay period which began February 18 and ended February 24 of 2019.

[00:06:30] Speaker 02:
So they did at least replicate at least for one pay period a wage statement that they believe they sent to Mr. Gomez.

[00:06:39] Speaker 02:
Is that right?

[00:06:40] Speaker 00:
That's right.

[00:06:41] Speaker 00:
Well, they regenerated it and it even says in the Penal Declaration that there's certain information in there.

[00:06:48] Speaker 00:
I believe it says the yearly totals

[00:06:50] Speaker 00:
are not accurate.

[00:06:52] Speaker 00:
So that is not the actual wage statement that they say was sent to Mr. Gomez.

[00:06:57] Speaker 00:
They admit it actually differs from it.

[00:06:59] Speaker 00:
It doesn't have the correct information.

[00:07:02] Speaker 00:
But what did happen to more people than Mr. Gomez is the mailing of wage statements.

[00:07:09] Speaker 00:
And under California law, it's very clear that you can only mail a wage statement if you're paying

[00:07:18] Speaker 00:
in cash or personal check, and that has been judicially interpreted to include cashier's checks.

[00:07:24] Speaker 00:
But I think it is very unlikely that they were paying everybody that they were mailing the wage statement to with cash or personal check.

[00:07:35] Speaker 01:
I thought they paid them with some sort of card, something like a gift card, a cash card of some sort.

[00:07:40] Speaker 00:
That's right.

[00:07:40] Speaker 00:
Mr. Gomez was paid with a pay card, and there would be a class-wide issue of whether

[00:07:45] Speaker 00:
That is, in fact, equivalent to cash.

[00:07:48] Speaker 00:
And, you know, there are many differences, right?

[00:07:50] Speaker 00:
I mean, one difference between a pay card and cash is there's actually a privacy issue, right?

[00:07:56] Speaker 00:
When you are using a pay card, there exists a record somewhat of every transaction that you make.

[00:08:02] Speaker 00:
There also may be fees associated with using the pay card.

[00:08:06] Speaker 00:
You know, you can't use the pay card necessarily to pay your rent, right?

[00:08:11] Speaker 00:
If you owe somebody money, if you owe a relative money, you know, you can't use that pay card to pay them the way you would with cash.

[00:08:18] Speaker 00:
So there are class-wide issues related to the practice of mailing and whether that was lawful.

[00:08:29] Speaker 00:
So that very clearly is a class-wide issue and also of course not just a class-wide issue but I should say a representative issue because this issue of whether this only happened to Mr. Gomez was not just the basis for striking the class allegations, it was also the basis for

[00:08:51] Speaker 00:
dismissing the Pager claim because of a huffy securitas and other case law which says that, you know, a Pager plaintiff cannot proceed solely on their own claim.

[00:09:02] Speaker 00:
They have to pursue a claim for other employees.

[00:09:05] Speaker 02:
Can I ask you a question?

[00:09:06] Speaker 02:
Your complaint is supposed to give the defendant sufficient notice so they know how to defend themselves.

[00:09:13] Speaker 02:
How would they know

[00:09:15] Speaker 02:
that you're making this wage statement class claim based on an inference.

[00:09:22] Speaker 02:
Because the language explicitly seemed, I see what you're saying is talking about, hey, we think there's a problem overall with the mailing of wage statements, but the specific allegations all seem to be

[00:09:36] Speaker 02:
Particular to mr.. Gomez, so how is that sufficient notice that they're actually defending a class claim on wage statements well because I Suppose I don't really agree that it's all limited to mr.. Gomez because there are allegations about the banal declaration and Well, I have the sixth amended complaint.

[00:10:03] Speaker 02:
Can you point me to any specific?

[00:10:07] Speaker 00:
paragraphs well so i think that these uh... so what i have in my notes are actually citations to the fifth amended complaint the only change that was made to the sixth amended complaint was actually uh...

[00:10:38] Speaker 00:
deleting references to one of the entities.

[00:10:41] Speaker 00:
And certainly, you know, at paragraphs 23 to 31 of the fifth amended complaint, it talks about how Elite admits that it has no copies of the statements it says were mailed to employees, and also no electronic copies of the wage statements it says were emailed to employees.

[00:11:04] Speaker 00:
So that's an allegation that goes beyond Mr. Gomez.

[00:11:08] Speaker 00:
you know, refers to their general practices and, you know, it can be inferred that what they say they were doing was not actually occurring.

[00:11:19] Speaker 00:
And so if, so now I will go to the issue of mootness.

[00:11:27] Speaker 03:
Because before we leave that, usually when we have cases like this where it is asserted that the company had a systematic,

[00:11:37] Speaker 03:
practice of failing to provide the way statements there are other specific individuals who are listed who were not provided way statements.

[00:11:51] Speaker 03:
In doing an investigation you were not able to come up your client wasn't able to give you the names of any other individuals who were

[00:12:00] Speaker 03:
Who were not provided with their way statements?

[00:12:04] Speaker 00:
No, and I mean he you know he worked there for three months You know I don't know that he specifically knew anybody there And I think you know what your honor just identified is really the only way that that information could have been elicited But again

[00:12:31] Speaker 00:
So I will, so to get to the issue of mootness, so the Nehru's case, Nehru's versus Charter Communications, that case says that the plaintiff must maintain a financial interest in the action, not withstanding the settlement of the individual claim.

[00:12:51] Speaker 03:
Did the district court say this case was moot?

[00:12:55] Speaker 00:
No.

[00:12:56] Speaker 03:
Who raised the mootness argument?

[00:12:57] Speaker 00:
Oh, I thought that the court wanted that to be addressed.

[00:13:00] Speaker 00:
Oh, did we ask for that to be addressed?

[00:13:02] Speaker 00:
Yeah, it was a focus order.

[00:13:03] Speaker 00:
Oh, the focus order, yes.

[00:13:04] Speaker 00:
Okay.

[00:13:05] Speaker 00:
Okay.

[00:13:07] Speaker 00:
So, under the Naruse case,

[00:13:12] Speaker 00:
The plaintiff Gomez here does have a financial stake and that's true for at least two reasons.

[00:13:18] Speaker 00:
The first is the Paga claim that I talked about because that claim was dismissed entirely.

[00:13:26] Speaker 00:
That's different than what happened with the labor code wage statement claim because for the labor code wage statement claim, only the class claims were dismissed.

[00:13:36] Speaker 00:
But the district court,

[00:13:38] Speaker 00:
Dismissed the pager claim in its entirety because of this issue of whether what mr.. Gomez alleges Whether it happened to other employees and so if it were to be determined to that There is a plausible class or representative theory whether that's the issue of the legality of mailing or the inference based on the banal declaration the pager claim would be reinstated and

[00:14:08] Speaker 00:
So if the PACA claim is reinstated, Mr. Gomez would be entitled to a share of the PACA penalties that are awarded.

[00:14:18] Speaker 00:
So he clearly has a financial interest in.

[00:14:21] Speaker 03:
So is it, is your argument that the case would not be moved only if the PACA claim is reinstated?

[00:14:32] Speaker 00:
No, because I think the other issue is,

[00:14:35] Speaker 00:
As I read in the Rouz case and the other cases, Brady versus Autozone and Campion versus Old Republic, in Brady versus Autozone and Campion versus Old Republic, the plaintiff released any and all claims for attorney's fees.

[00:14:52] Speaker 00:
And in the Rouz, this court pointed out that in addition to the potential incentive award in that settlement,

[00:15:02] Speaker 00:
there also was a claim for attorney's fees related to the class claim.

[00:15:05] Speaker 03:
Is his individual claim still pending?

[00:15:09] Speaker 00:
His individual wage statement claim is still pending, but not the individual.

[00:15:14] Speaker 00:
Well, it's not pending because it was

[00:15:17] Speaker 02:
I think I would disagree with your reading of the cases.

[00:15:23] Speaker 02:
You're saying because he might have a Paga claim, that gives him a financial interest in his class claim.

[00:15:30] Speaker 02:
I don't think that's right.

[00:15:31] Speaker 02:
Naruse is saying do you have a financial interest in your class claim?

[00:15:36] Speaker 02:
And Mr. Gomez had a full, complete, final disposition, judgment, and settlement of the first cause of action in his sixth amended complaint.

[00:15:52] Speaker 02:
Now it does say as asserted on behalf of Gomez individually, but the first cause of action is the plaintiff and wage statement class.

[00:16:04] Speaker 00:
But yes, and that stipulation also only resolves the attorney fee claim for his individual claim.

[00:16:12] Speaker 00:
It doesn't resolve the attorney fee claim for the class, which I think makes this like naruse.

[00:16:19] Speaker 00:
But I also think, to go back to your honest question, that

[00:16:24] Speaker 00:
You know, these issues are intertwined.

[00:16:28] Speaker 02:
What he has to prove to prevail on the class claim... But what financial interest does he even have on the class claim when his individual claims are completely gone?

[00:16:37] Speaker 02:
Well, he has a... How can he even be a member of the class still?

[00:16:39] Speaker 02:
He's fully settled his claims.

[00:16:42] Speaker 00:
Well, I think this is actually analogous to what would have happened if we had actually done the trial.

[00:16:47] Speaker 00:
I mean, if Mr. Gomez had done the trial and had prevailed,

[00:16:51] Speaker 00:
and had been awarded compensation for not being provided wage statements.

[00:16:56] Speaker 00:
We then could go up on appeal and appeal the denial of class certification.

[00:17:01] Speaker 00:
So I don't really see how this differs.

[00:17:04] Speaker 00:
But also I think the rules indicates, I mean, they do talk about- How can he be a class representative if he has no claim?

[00:17:12] Speaker 00:
Well, again, I don't see how this is different from the situation where he had gone to trial and prevailed.

[00:17:18] Speaker 00:
I'm in that situation

[00:17:21] Speaker 01:
Well, it's different in the sense that, one, the claim was settled, or two, it went to trial, and here it did not go to trial.

[00:17:28] Speaker 01:
And our case law specifically talks about whether there's a jurisdiction for the class member, a putative class member, to appeal if they've settled their claim.

[00:17:38] Speaker 01:
So that's why it's different.

[00:17:40] Speaker 01:
Our case law specifically carves out that distinction.

[00:17:43] Speaker 01:
You can't say, well, it's just as if he went to trial even though he settled.

[00:17:48] Speaker 01:
Because he settled, so he didn't go to trial.

[00:17:50] Speaker 01:
So then the question is, does he have jurisdiction for the appeal?

[00:17:54] Speaker 01:
And he has to have a personal stake.

[00:17:56] Speaker 01:
And he settled his personal claim, and he settled his claim for attorney's fees.

[00:18:02] Speaker 01:
And it doesn't seem from the settlement agreement that there's any personal stake left, that he has a right to recover additional money from attorney's fees or some sort of compensation for being a class rep.

[00:18:14] Speaker 01:
I mean, I didn't see that.

[00:18:15] Speaker 01:
Is there anything where he has a personal stake?

[00:18:17] Speaker 00:
Well, I mean, so first of all, certainly there is a personal stake for the Paga, so... But we're talking about the class cut now.

[00:18:25] Speaker 00:
Right, yes.

[00:18:27] Speaker 00:
And so I think that as I read Nehruz, Mr. Gomez has a personal stake because the release of attorney's fees was limited to attorney's fees for his individual claim.

[00:18:43] Speaker 00:
And so I think that does make us like Nehruz.

[00:18:46] Speaker 01:
So you think he has a stake in a recovery of attorney's fees for other claimants?

[00:18:52] Speaker 00:
Yes.

[00:18:52] Speaker 01:
I mean, he doesn't get any of that money.

[00:18:53] Speaker 01:
It goes to the attorneys, right?

[00:18:58] Speaker 00:
I mean, that would be true for the attorney fees on his individual claim as well.

[00:19:02] Speaker 02:
But he's already been paid in full for his claim for damages and penalties for his wage statement claim, and he's already been paid in full for his attorney's fees for that claim.

[00:19:15] Speaker 02:
You would agree that's 3A, B and C of your settlement agreement.

[00:19:26] Speaker 02:
Judgment or that's the judgment.

[00:19:33] Speaker 00:
But again, I mean, I do think if you read the Nehru's case,

[00:19:37] Speaker 00:
It does indicate, I mean, it distinguishes a case called Tom's 179F3 at 105, where the class representative relinquished any and all claims of any kind and nature in addition to any claims for attorney's fees and costs.

[00:19:57] Speaker 00:
And it then says, when they explain why the plaintiff in that case had a financial interest,

[00:20:07] Speaker 00:
that he retained a continued financial interest because of the enhancement award.

[00:20:12] Speaker 00:
But then it says, further the agreement provides that the claim for attorney's fees and costs has not been released.

[00:20:18] Speaker 00:
So I think under that logic, the claim for class-related attorney fees

[00:20:26] Speaker 00:
provides Mr. Nehru's a financial stake.

[00:20:29] Speaker 00:
I mean, if attorney's fees provide a financial, I understand the argument that, you know, the money doesn't go to the named plaintiff, but the Nehru's case says that the claim for attorney's fees provides a financial interest.

[00:20:42] Speaker 00:
And so, with that, I'd like a couple of minutes for rebuttal if necessary.

[00:20:49] Speaker 03:
Well, you've used your time, but we'll give you a minute or two for rebuttal.

[00:20:52] Speaker 00:
Okay, thank you, Your Honor.

[00:21:17] Speaker 04:
Good morning, your honors.

[00:21:18] Speaker 04:
May it please the court?

[00:21:20] Speaker 04:
My name is Christopher Decker.

[00:21:22] Speaker 04:
I represent the defendant, appellee, and cross-appellant.

[00:21:30] Speaker 04:
Elite Labor Services Weekly is limited.

[00:21:34] Speaker 04:
Because we are a cross-appellant, I would like to reserve two minutes for rebuttal.

[00:21:39] Speaker 04:
But let me begin.

[00:21:40] Speaker 04:
May it please the court?

[00:21:42] Speaker 04:
by addressing the two questions that were identified in the court's focus order.

[00:21:48] Speaker 04:
The first one being the question of mootness and the second one being the question of whether there are plausible allegations that anybody other than the named plaintiff suffered a violation of Labor Code 226A.

[00:22:05] Speaker 04:
First of all, with regard to mootness, we just heard from plaintiff's counsel that

[00:22:12] Speaker 04:
He recognizes that under this court's law, in order for him to continue to prosecute a class claim for violation of Labor Code 226, he would have to retain some sort of financial interest in the outcome.

[00:22:30] Speaker 04:
And the first financial interest he identified is a financial interest not in the outcome of the class claim,

[00:22:37] Speaker 04:
but a financial interest in the outcome of a Paga claim, which obviously is not going to give him a financial interest in the outcome of the class claim.

[00:22:47] Speaker 02:
Let's say we agree with you on that, or at least assume I do.

[00:22:51] Speaker 02:
You agree the Paga claim wasn't part of the individual wage statement settlement, correct?

[00:22:57] Speaker 04:
Correct.

[00:22:58] Speaker 04:
It had been dismissed.

[00:23:00] Speaker 02:
But do you agree that that claim isn't moot?

[00:23:04] Speaker 04:
I would agree that the mootness issue that we're discussing right now would not affect that claim.

[00:23:09] Speaker 04:
I think the dismissal of that claim should be upheld on other grounds.

[00:23:15] Speaker 04:
Now, with respect to the second financial interest that he identified, which is an interest in recovering attorney's fees, the case law that's cited in the focus order says that

[00:23:29] Speaker 04:
whether or not a financial interest is retained is determined by the language of the agreement, which in this case would be the language of the stipulated judgment, and that silence is not good enough.

[00:23:41] Speaker 04:
There has to be an affirmative retention of an interest.

[00:23:45] Speaker 04:
And this stipulated judgment was stipulated.

[00:23:50] Speaker 04:
It was prepared

[00:23:52] Speaker 04:
by both counsel jointly and submitted by both counsel jointly.

[00:23:56] Speaker 04:
And none of this case law is new.

[00:23:58] Speaker 04:
So plaintiff's counsel had every opportunity they needed to insert language into the stipulated judgment to clarify that they were or that plaintiff was retaining an interest in the outcome of the class claims.

[00:24:12] Speaker 04:
And they didn't do it, right?

[00:24:14] Speaker 04:
At best, they stuck in in various places that the individual claim was being resolved.

[00:24:21] Speaker 04:
Right?

[00:24:22] Speaker 04:
And that the class claims were not being resolved.

[00:24:25] Speaker 04:
But the case law from this court is that that's always true, and even if it is true, and I'm thinking of the Campion case in particular where there was a Rule 68 offer of judgment which clearly did not resolve the class claims.

[00:24:38] Speaker 04:
Right?

[00:24:38] Speaker 04:
There's got to be something more.

[00:24:40] Speaker 04:
There has to be some language indicating that if class certification is obtained in some point in the future,

[00:24:47] Speaker 04:
that plaintiff is going to benefit in some concrete financial way.

[00:24:51] Speaker 04:
And that can easily be added.

[00:24:54] Speaker 04:
And it wasn't.

[00:24:55] Speaker 03:
Instead.

[00:24:56] Speaker 03:
Just so I understand your point, are you agreeing that this appeal is not moot because we need to decide whether or not the district court erred in striking the class allegations?

[00:25:08] Speaker 04:
I think that I am arguing that the appeal from the denial of cert

[00:25:16] Speaker 04:
The appeal of the order striking the class allegations is moot.

[00:25:20] Speaker 04:
Why?

[00:25:21] Speaker 04:
Because plaintiff has no financial interest in the class claims.

[00:25:26] Speaker 04:
He has been fully compensated for the harm that he suffered.

[00:25:31] Speaker 04:
His attorney's fees have been paid in full.

[00:25:34] Speaker 04:
And there is nothing further for him to gain individually if that claim is certified

[00:25:45] Speaker 04:
And there is a judgment and a recovery on behalf of the class.

[00:25:48] Speaker 01:
So we inserted this issue into the case with our focus order.

[00:25:53] Speaker 01:
Why didn't you argue it?

[00:25:57] Speaker 04:
I didn't argue it because frankly, Your Honor, I was focused on other issues.

[00:26:03] Speaker 04:
I was focused on the issues that had been briefed below and that had been argued below.

[00:26:07] Speaker 04:
And our goal in stipulating judgment was to avoid the cost of trial.

[00:26:13] Speaker 04:
We were not trying to moot the claim.

[00:26:16] Speaker 04:
We were simply trying to avoid the cost of trial.

[00:26:19] Speaker 04:
And given that our interest was not, our interest was limited to avoiding trial, I didn't investigate the mootness issue because I think that's an issue that falls on the shoulders of plaintiff's counsel to investigate.

[00:26:37] Speaker 04:
And I think it's their responsibility

[00:26:39] Speaker 04:
to insert into the stipulated judgment whatever they need to in order to preserve the right to pursue the class claims, if that's their intention.

[00:26:50] Speaker 04:
So that's why I didn't raise it.

[00:26:52] Speaker 02:
I appreciate your candor.

[00:26:54] Speaker 02:
Can we go to the motion to dismiss?

[00:26:56] Speaker 02:
Because I appreciate that you conceded that you don't think the Paga claim is moot, but you think it was rightly dismissed for other reasons.

[00:27:10] Speaker 02:
I agree that the allegations in the sixth amended complaint, they do assert a class wage statement claim, but the allegations other than this company mails their wage statements and there must be a problem because I didn't get 12 of my wage statements is what is asserted on behalf of Mr. Gomez.

[00:27:34] Speaker 02:
Why on a motion to dismiss shouldn't plausible inferences be made in favor of the non-moving party?

[00:27:43] Speaker 02:
Isn't that what's required on a motion to dismiss?

[00:27:47] Speaker 04:
Reasonable inferences should be made.

[00:27:51] Speaker 04:
There is a threshold set by the Supreme Court in the Iqbal and the Twombly cases to state a plausible claim for relief.

[00:28:01] Speaker 04:
Conclusory allegations are insufficient.

[00:28:04] Speaker 04:
There have to be facts, right?

[00:28:07] Speaker 04:
And the facts plus the reasonable inferences that can be drawn from those facts have to add up to something that is plausible, not just possible.

[00:28:19] Speaker 04:
So I think the questioning during plaintiff's argument made it clear that there are any number of possible explanations for the non-conclusory facts that have been alleged.

[00:28:32] Speaker 02:
And I do think the panel... But why is it plausible that the postal service messed up 12 times consecutively?

[00:28:40] Speaker 02:
Why is that a plausible inference?

[00:28:42] Speaker 02:
Well, that's only... I mean, and why isn't it a reasonable or plausible inference that

[00:28:50] Speaker 02:
Mr. Gomez should have received 12 wage statements and got zero.

[00:28:56] Speaker 02:
So to say, oh, this is just an individual one-off error, why would that happen 12 times or why would that be a reasonable or plausible inference?

[00:29:06] Speaker 02:
that an individualized error would repeat 12 consecutive times.

[00:29:12] Speaker 04:
Because they had the wrong address?

[00:29:13] Speaker 04:
Because he didn't check his mail?

[00:29:16] Speaker 04:
Because somebody else got to the mailbox?

[00:29:18] Speaker 02:
But then you're asking us to disregard the allegations in the complaint.

[00:29:22] Speaker 02:
The allegations in the complaint are, and they reference the Bernal Declaration, the allegations in the complaint are, this is my address.

[00:29:30] Speaker 02:
They claim they sent it to this address and I checked and I didn't get it.

[00:29:33] Speaker 02:
So we have to accept those allegations as true.

[00:29:37] Speaker 02:
This is a motion to dismiss, not motion for summary judgment or trial.

[00:29:42] Speaker 02:
So why you're asking us to read allegations contrary to what's in the complaint.

[00:29:49] Speaker 02:
Why is that appropriate on a motion to dismiss?

[00:29:52] Speaker 04:
I don't think all of those allegations are in the complaint.

[00:29:55] Speaker 04:
I think the allegations that are in the complaint are I worked there for approximately 12 weeks.

[00:30:00] Speaker 04:
According to the company, they mailed my wage statements to me.

[00:30:04] Speaker 04:
I never received a wage statement.

[00:30:07] Speaker 04:
I did check my mail diligently, and I never received a wage statement.

[00:30:12] Speaker 04:
I think those are the allegations.

[00:30:13] Speaker 02:
Well, I'm looking at paragraph 21 on page 4.

[00:30:16] Speaker 02:
Quote, however, although defendant had the correct address for plaintiff, plaintiff never received any wage statements from Elite in the email.

[00:30:27] Speaker 02:
Plaintiff was diligent about checking his mail and would have opened mail from Elite.

[00:30:33] Speaker 02:
I don't think with that allegation, I can then infer that Elite had the incorrect address from Mr. Gomez or that Mr. Gomez never checked his mail.

[00:30:45] Speaker 02:
I think that would be contrary to what I'm required to do on a motion to dismiss.

[00:30:50] Speaker 04:
Two points.

[00:30:52] Speaker 04:
First of all, I think it still very much leaves open the possibility that although they had the correct address in their records, there was some sort of typographical error, there was some sort of glitch.

[00:31:02] Speaker 04:
there is some sort of mistake that caused the wage statements to be sent to an incorrect address.

[00:31:09] Speaker 04:
The second thing is, even if the most plausible, or even if the plausible inference is they never mailed them at all, contrary to the sworn declaration testimony of Angelica Bernal, why is it plausible that they didn't mail them as they said to anybody else?

[00:31:32] Speaker 04:
That, I think, is a second inference that is not supported either by any facts that have been alleged or by any the case law says that the court must apply common sense and judicial experience.

[00:31:49] Speaker 04:
I don't think it's a reasonable inference that even if they just, for some reason, passed right over him and didn't mail wage statements to him, that they didn't mail wage statements to anybody else.

[00:32:01] Speaker 04:
The declaration testimony is that mailing wage statements was the exception, not the norm.

[00:32:06] Speaker 04:
The norm was to email wage statements, right?

[00:32:10] Speaker 04:
And the exception in those cases where they didn't have an email was to send them.

[00:32:15] Speaker 04:
But I don't think there's a plausible inference there that because they didn't send them to Mr. Gomez, as they said they did, they also didn't send them to anybody else to whom they claimed to have sent them.

[00:32:28] Speaker 02:
I don't know if that's the Bernal declaration paragraph four says as a result each week copies of paper wage statements for every elite employee assigned to work at prime source were addressed to the employees home address on file with elite and placed in the US mail it almost seems the the opposite that

[00:32:50] Speaker 02:
It says, in addition to providing paper copies of the wage statements, Elite provides an electronic copy of their wage statement via email to each Elite employee in California who provides an email address to Elite.

[00:33:03] Speaker 02:
So the Bernal Declaration makes it seem like they did both for every employee.

[00:33:08] Speaker 02:
And then if it was an employee who didn't provide an email address like Mr. Gomez, they only did the mail.

[00:33:14] Speaker 04:
Right, so my point is that that would not be the norm, right?

[00:33:20] Speaker 04:
It would be the norm would be that there are multiple mechanisms of delivery, right, including email.

[00:33:28] Speaker 04:
In some cases, if they don't have an email address, then the only option is to mail it.

[00:33:37] Speaker 01:
So, opposing counsel argued that Elite doesn't have the records of the pay statements based on the Bernal Declaration about creating replicas.

[00:33:50] Speaker 01:
Can you explain what that is?

[00:33:52] Speaker 01:
It's confusing to me in the record what it is that Elite maintains.

[00:33:56] Speaker 01:
And I think he was also suggesting that if you had not with Mr. Gomez, because you didn't have his email address, but with other employees, there should be records of sent emails and that Elite doesn't have them.

[00:34:07] Speaker 04:
Well, what Elite has is the data.

[00:34:10] Speaker 04:
Elite does not have either hard copies or soft copies of the piece of paper that was printed and distributed.

[00:34:18] Speaker 04:
Elite has the data, and that's its obligation, is to retain the data.

[00:34:23] Speaker 04:
And it can, from the data, create a replica which is accurate with respect to all of the information that is legally required to be provided at the time of payment.

[00:34:36] Speaker 04:
which is the hours worked that week, the wages that were paid that week, the dates of the pay period, et cetera.

[00:34:42] Speaker 04:
The only thing that's different about that replica is the year to date amount, which is extra information that's not required by the statute.

[00:34:50] Speaker 04:
So, elite has all of the records that it is legally required to maintain.

[00:34:58] Speaker 04:
As for whether or not it has records of the emails, there's no allegation that it does or that it doesn't.

[00:35:03] Speaker 04:
The only information with respect to the emails is that it was a common practice to make the wage statements available by email for those employees who had provided an email address.

[00:35:16] Speaker 04:
The case was dismissed at the pleading stage based on the allegations of the complaint.

[00:35:19] Speaker 04:
There hasn't been any discovery.

[00:35:21] Speaker 04:
And so there are no facts in the record about whether or not those key mails or copies of those emails exist.

[00:35:29] Speaker 03:
Counsel, did you want to address your cross appeal?

[00:35:32] Speaker 04:
Excuse me?

[00:35:33] Speaker 04:
Yes.

[00:35:35] Speaker 04:
So I also wanted to briefly address the question about whether mailing is permissible.

[00:35:42] Speaker 04:
I think the case law cited by both sides is that mailing wait statements is permissible if payment is made in cash.

[00:35:50] Speaker 04:
We cited to an encyclopedia that a debit card, a pay card is a cash transaction.

[00:35:57] Speaker 04:
Opposing counsel has some quibbles with that.

[00:35:59] Speaker 04:
They're not supported by any authority.

[00:36:01] Speaker 04:
But let me talk about the cross-appeal.

[00:36:02] Speaker 04:
We cross-appealed from two rulings.

[00:36:05] Speaker 04:
The first ruling being the denial of the motion to dismiss based on the prior settlement between the parties in a separate action.

[00:36:13] Speaker 04:
And then the second basis for cross-appeal was that if the order dismissing the claims for meal periods, rest break violations,

[00:36:26] Speaker 04:
failure to pay overtime, failure to pay minimum wages.

[00:36:28] Speaker 04:
If any of those are reversed, the court should examine the sufficiency of the class allegations, because they're insufficient, they're conclusory.

[00:36:35] Speaker 04:
But let me focus on the first cross-appeal.

[00:36:39] Speaker 04:
So as the briefs explained, there is a separate settlement between the parties in a separate action.

[00:36:47] Speaker 04:
And the release in that settlement agreement is a broad, all-encompassing release of

[00:36:53] Speaker 04:
all claims.

[00:36:55] Speaker 03:
Could we talk about that?

[00:36:57] Speaker 03:
On page 207, release claims seem to exclude the wage and hour claims.

[00:37:05] Speaker 03:
It says, plaintiff's release claim shall mean all claims known and unknown against the release parties other than the wage and hour claims.

[00:37:15] Speaker 03:
in Mr. Gomez's class action against defendants.

[00:37:18] Speaker 03:
So doesn't that inject some ambiguity into the settlement agreement?

[00:37:24] Speaker 04:
I don't think so because the release itself is clearly broader than the definition of plaintiff's released claims.

[00:37:33] Speaker 04:
Your Honor is correct.

[00:37:34] Speaker 04:
that the release begins by releasing, quote, plaintiff's released claims.

[00:37:40] Speaker 04:
And plaintiff's released claims is defined to exclude the wage and hour claims that are the subject of the case from which this appeal was taken.

[00:37:50] Speaker 04:
But then the very next sentence says, plaintiff also releases

[00:37:55] Speaker 04:
It's clearly the second sentence is adding on to the first sentence.

[00:37:59] Speaker 03:
But those are kind of inconsistent, though, to say there is an exception, but there is an inclusion.

[00:38:06] Speaker 03:
So doesn't that make it sufficiently ambiguous that it can't be resolved on a motion to dismiss?

[00:38:11] Speaker 04:
Well, I don't think so.

[00:38:13] Speaker 04:
I mean, I understand the court below said the same thing.

[00:38:18] Speaker 04:
But I think there is no ambiguity when it's read in context and when it's read as a totality.

[00:38:23] Speaker 04:
The second sentence.

[00:38:26] Speaker 04:
I think by its plain language goes above and beyond what's in the first sentence.

[00:38:31] Speaker 03:
But you're reading out the first sentence.

[00:38:34] Speaker 03:
And we assume that all of the words are put there for a reason and that they have meaning.

[00:38:40] Speaker 03:
And so if we say that the second sentence subsumes the first sentence, then we're reading out the language in the first sentence.

[00:38:48] Speaker 04:
Well, I don't think you're reading it out.

[00:38:51] Speaker 04:
You're giving it effect.

[00:38:52] Speaker 04:
But you're correct that the second

[00:38:54] Speaker 04:
it would be unnecessary and redundant in light of the second sentence.

[00:38:59] Speaker 04:
But the reverse is also true, which is that if you fail to give effect to the second sentence, then you're taking it out of the agreement.

[00:39:10] Speaker 03:
That's why it can't be resolved on a motion to dismiss, because there are two ways to read it, and so it's ambiguous.

[00:39:17] Speaker 04:
And I understand the confusion, and I think I've stated my view.

[00:39:21] Speaker 04:
At this point, I'd like to preserve my remaining time for rebuttal.

[00:39:24] Speaker 02:
Wait.

[00:39:24] Speaker 02:
I'm sorry.

[00:39:25] Speaker 02:
I have one more question.

[00:39:26] Speaker 02:
Yes.

[00:39:27] Speaker 02:
What are we to make of the fact that the Bernal Declaration concedes that the year-to-date totals are inaccurate?

[00:39:38] Speaker 02:
And that is a separate claim that's in the Sixth Amendment complaint, separate from I never received the mailed

[00:39:46] Speaker 02:
wage statement, or any wage statement since I didn't provide an email address, but there's a separate claim that, and these wage statements weren't accurate in their year-to-date totals.

[00:39:58] Speaker 02:
And I know you said you don't think that's required to have accurate year-to-date totals in the statements.

[00:40:05] Speaker 04:
I think it's pretty clearly not required.

[00:40:06] Speaker 04:
The language of Labor Code 226A makes no reference to year-to-date amounts.

[00:40:12] Speaker 04:
It only makes reference to

[00:40:14] Speaker 04:
The hours worked and the wages paid.

[00:40:16] Speaker 02:
But why would it be inaccurate in ELITE's records?

[00:40:20] Speaker 04:
Well, because what's saved in the data, remember we're creating a replica from three years ago, right?

[00:40:27] Speaker 04:
And what's saved in the database is the year-to-date amount at the end of the year because that end of year has now closed.

[00:40:36] Speaker 04:
What they can't do electronically

[00:40:39] Speaker 04:
is go back and recapture the year-to-date amount as it was three and a half years ago during mid-year, right?

[00:40:47] Speaker 04:
So when you generate a replica, the field for the year-to-date populates with the year-to-date amount as of today, right, which is the end-of-year amount for 2023, not the year-to-date amount in June of 2023.

[00:41:03] Speaker 03:
All right.

[00:41:04] Speaker 03:
Thank you, counsel.

[00:41:05] Speaker 03:
You're welcome.

[00:41:11] Speaker 03:
Rebuttal on the direct appeal and also in a response to the cross appeal.

[00:41:18] Speaker 00:
Yeah, so to talk about the cross appeal briefly, I mean, I don't think there's much more that needs to be said than at best this is an ambiguity.

[00:41:26] Speaker 00:
I suppose the only other thing I would add is that I believe that

[00:41:32] Speaker 00:
Opposing counsel is relying on language in the final judgment that was entered in that case.

[00:41:38] Speaker 00:
And the final judgment also says that the parties are ordered to effectuate the settlement agreement according to its terms.

[00:41:45] Speaker 00:
And one of those terms is that this case was specifically carved out.

[00:41:50] Speaker 00:
And in fact, the case that they rely on for that whole argument

[00:41:53] Speaker 00:
is a case called Minor versus Federal Express, and the issue there was that the release did not identify by name and case number, you know, the matters that were carved out.

[00:42:05] Speaker 00:
And, you know, the

[00:42:10] Speaker 00:
This issue of them not being able to provide copies of the wage statements, I mean, the copies obviously existed, right?

[00:42:17] Speaker 00:
They had to be created.

[00:42:18] Speaker 00:
Somebody had to sit on a computer, had to generate these before they were mailed, before they were emailed, and yet they say they have no copies.

[00:42:28] Speaker 00:
So I would submit that that's a further inference that calls into question whether they were actually doing what they say they did.

[00:42:37] Speaker 00:
And if the court has any questions, otherwise I will submit.

[00:42:42] Speaker 03:
Thank you, counsel.

[00:42:43] Speaker 00:
Thank you.

[00:42:44] Speaker 00:
Rebuttal?

[00:42:45] Speaker 03:
Let's put two minutes.

[00:42:54] Speaker 04:
Your Honor, I don't have anything further to say with respect to the cross-motion on the basis that the plaintiff released his claims.

[00:43:05] Speaker 04:
May I address the other basis of our cross-motion?

[00:43:09] Speaker 04:
You have one minute and 45 seconds.

[00:43:10] Speaker 04:
You may address whatever you like.

[00:43:12] Speaker 04:
All right.

[00:43:12] Speaker 04:
Thank you very much.

[00:43:14] Speaker 04:
The other basis of our, I said cross-motion, I should have said cross-appeal, is that if the meal period and rest break or overtime or minimum wage claims are reinstated, then the court should examine the sufficiency of the class allegations with respect to those claims.

[00:43:32] Speaker 04:
There hasn't been a discussion before the court today.

[00:43:35] Speaker 04:
I don't know if the court has any questions regarding the sufficiency of those claims even as to the name plaintiff.

[00:43:41] Speaker 04:
But we think it's actually quite clear that they don't satisfy the lander's pleading standard.

[00:43:47] Speaker 04:
There's no specification of any work week in which a plaintiff was denied the opportunity to take a meal period, denied the opportunity to take a rest break.

[00:43:57] Speaker 04:
was not paid for all hours worked or worked overtime that was unpaid.

[00:44:01] Speaker 04:
But even if one could somehow infer sufficient allegations with respect to plaintiff himself, there are no allegations other than just broad conclusory allegations that any other individual had a similar experience, either an elite employee at PrimeSource or an elite employee anywhere else.

[00:44:24] Speaker 04:
And so we did move for

[00:44:27] Speaker 04:
the trial court to strike the class allegations on that basis.

[00:44:32] Speaker 04:
It didn't reach the issue.

[00:44:34] Speaker 04:
But I think it would be best, should the scenario arise here, for this court to raise the issue and to reach the issue.

[00:44:41] Speaker 04:
Otherwise, we're likely to go back down, and then the trial court may well strike the class allegations from those complaints, and then we'll be back.

[00:44:49] Speaker 03:
All right.

[00:44:49] Speaker 03:
Thank you, counsel.

[00:44:49] Speaker 03:
With that, I'll conclude.

[00:44:50] Speaker 03:
Thank you to both counsels.

[00:44:51] Speaker 03:
The case just argued is submitted for decision by the court.