Case 3:19-cv-06462-EMC Document 74 Filed 06/30/20 Page 1 of 8
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`UNITED STATES DISTRICT COURT
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`NORTHERN DISTRICT OF CALIFORNIA
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`THOMAS COLOPY, et al.,
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`Plaintiffs,
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`v.
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`UBER TECHNOLOGIES INC.,
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`Case No. 19-cv-06462-EMC
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`ORDER GRANTING IN PART AND
`DENYING IN PART DEFENDANT’S
`MOTION TO DISMISS
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`Defendant.
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`Docket No. 61
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`I.
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`INTRODUCTION
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`On April 16, 2020, Plaintiffs Spencer Verhines and Christopher James (collectively
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`“Plaintiffs”) filed a Consolidated Class Action Complaint (“Consolidated Complaint”) alleging
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`various wage-and-hour claims under California law and seeking various forms of relief, including
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`under California’s Unfair Competition Law (“UCL”) and the federal Declaratory Judgment Act
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`(“DJA”). See Docket No. 42. Defendant is Uber Technologies, Inc. (“Uber” or “Defendant”). Id.
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`Uber now seeks dismissal of several parts of the Consolidated Complaint, principally Count I
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`(Declaratory Judgment) and Count VI (UCL). See Docket No. 61.
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`II.
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`BACKGROUND
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`The Court and the parties are well acquainted with the background of this case, so it is not
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`set forth in detail here. In short, Plaintiffs are residents of California who drive for Uber. See
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`Consolidated Complaint ¶¶ 8–9, 17–18. They bring this case as a putative class action on “behalf
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`of . . . all other individuals who have worked as Uber drivers in California who have not released
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`all of their claims against Uber.” Id. ¶ 10, 45. They assert claims related to their alleged
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`misclassification, including failure to reimburse business expenses, failure to pay minimum wage
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`Case 3:19-cv-06462-EMC Document 74 Filed 06/30/20 Page 2 of 8
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`and overtime, failure to provide properly itemized pay statements, failure to provide sick leave,
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`and unlawful business practices. See Consolidated Complaint. They seek damages, as well as
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`declaratory and injunctive relief, which would require Uber to reclassify its drivers as employees.
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`Id. ¶ 7.
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`This case began when Thomas Colopy filed a Class Action Complaint on October 8, 2019.
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`See Docket No. 1. On October 18, 2019, Defendant filed a Motion to Dismiss and a Motion to
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`Strike. See Docket No. 11. On December 16, 2019, the Court denied Mr. Colopy’s Motion for a
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`Preliminary Injunction and granted in part and denied in part Defendant’s Motion to Dismiss. See
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`Docket No. 30. Mr. Verhines filed a separate lawsuit in San Francisco Superior Court on March
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`12, 2020. See Docket No. 1-2 in Case No. 3:20-cv-01886. That case was removed to federal
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`court pursuant to the Class Action Fairness Act (“CAFA”), 28 U.S.C. §1332(d)(2), see Docket No.
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`1 in Case No. 3:20-cv-01886 (“Verhines”), and on March 22, 2020, that case was related to
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`Colopy. See Docket No. 24 in Case No. 3:20-cv-01886; Docket No. 36 in Case No. 3:19-cv-
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`06462. An amended complaint was filed the following day, which added Mr. James as a named
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`Plaintiff. See Docket No. 27 in Case No. 3:20-cv-01886.
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`On April 16, 2020, Plaintiffs filed a Consolidated Class Action Complaint, which unified
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`the claims asserted in Colopy and Verhines. See Docket No. 42 in Colopy. However, as discussed
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`below, that complaint no longer mentions Mr. Colopy. Id. On May 19, 2020, Plaintiffs filed a
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`Motion to Certify Class. See Docket No. 56. And on May 21, 2020, Defendant filed a Motion to
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`Dismiss. See Docket No. 61. Plaintiffs’ Motion for Class Certification will be heard at the end of
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`October. See Docket No. 64. Defendant’s Motion to Dismiss was heard via Zoom on June 25,
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`2020. See Docket No. 73.
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`A.
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`Legal Standard
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`1.
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`Motion to Dismiss
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`III.
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`DISCUSSION
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`To survive a 12(b)(6) motion to dismiss for failure to state a claim after the Supreme
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`Court’s decisions in Ashcroft v. Iqbal, 556 U.S. 662 (2009) and Bell Atlantic Corp. v. Twombly,
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`550 U.S. 544 (2007), a plaintiff’s factual allegations in the complaint “must . . . suggest that the
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`Case 3:19-cv-06462-EMC Document 74 Filed 06/30/20 Page 3 of 8
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`claim has at least a plausible chance of success.” In re Century Aluminum Co. Securities
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`Litigation, 729 F.3d 1104, 1107 (9th Cir. 2013). In other words, the complaint “must allege
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`‘factual content that allows the court to draw the reasonable inference that the defendant is liable
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`for the misconduct alleged.’” Id.
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`The Ninth Circuit has settled on a two-step process for evaluating pleadings. It explains
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`the established approach as follows:
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`First, to be entitled to the presumption of truth, allegations in a
`complaint or counterclaim may not simply recite the elements of a
`cause of action, but must contain sufficient allegations of underlying
`facts to give fair notice and to enable the opposing party to defend
`itself effectively. Second, the factual allegations that are taken as
`true must plausibly suggest an entitlement to relief, such that it is not
`unfair to require the opposing party to be subjected to the expense of
`discovery and continued litigation.
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`Levitt v. Yelp! Inc., 765 F.3d 1123, 1134–35 (9th Cir. 2014). Notably, the plausibility standard is
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`not akin to a “probability requirement,” but it asks for more than a sheer possibility that a
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`defendant has acted unlawfully. Where a complaint pleads facts that are “merely consistent with”
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`a defendant’s liability, it “stops short of the line between possibility and plausibility ‘of
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`entitlement to relief.’” Iqbal, 556 U.S. at 678.
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`2.
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`Motion to Strike
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`Under Rule 12(f), “[a] court may strike from a pleading an insufficient defense or any
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`redundant, immaterial, impertinent, or scandalous matter.” Fed. R. Civ. P. 12(f). “The function of
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`a 12(f) motion to strike is to avoid the expenditure of time and money that must arise from
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`litigating spurious issues by dispensing with those issues prior to trial.” Whittlestone, Inc. v.
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`Handi–Craft Co., 618 F.3d 970, 973 (9th Cir. 2010). Motions to strike are generally disfavored.
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`See Barnes v. AT & T Pension Ben. Plan–Nonbargained Program, 718 F. Supp. 2d 1167, 1170
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`(N.D. Cal. 2010); see also Platte Anchor Bolt, Inc. v. IHI, Inc., 352 F. Supp. 2d 1048, 1057 (N.D.
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`Cal.2 004) (stating that, “[i]f there is any doubt whether the portion to be stricken might bear on an
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`issue in the litigation, the court should deny the motion”).
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`B.
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`Analysis
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`Uber raises several challenges to Plaintiffs’ Consolidated Complaint. The Court addresses
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`Case 3:19-cv-06462-EMC Document 74 Filed 06/30/20 Page 4 of 8
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`each one in turn.
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`1.
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`Duplicative Nature of DJA Claim
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`First, Uber asserts that Count I (which seeks declaratory relief under the DJA) is
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`duplicative of Plaintiffs’ other causes of action and should therefore be dismissed. See Uber’s
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`Motion to Dismiss (“Mot.”) at 17, Docket No. 61. Specifically, Uber argues that the relief sought
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`in Count I will be wholly addressed by any relief awarded on Plaintiffs’ other claims, “namely,
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`whether Uber misclassified drivers as independent contractors and denied them certain employee
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`benefits under state and local law.” Id. at 18. However, as this Court has previously explained, at
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`this early stage, Plaintiffs may plead alternative theories; while Plaintiffs may not recover twice,
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`they need not choose between competing legal theories at this time. See Cromwell v. Kaiser
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`Found. Health Plan, No. 18-CV-06187-EMC, 2019 WL 1493337, at *3 (N.D. Cal. Apr. 4, 2019)
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`(citing Moyle v. Liberty Mut. Retirement Ben. Plan, 823 F.3d 948, 961 (9th Cir. 2016)) (“Although
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`the Court agrees that duplicative recovery is not permitted, at this early stage in the litigation, Ms.
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`Cromwell should be allowed to plead alternative theories of liability.”).
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`2.
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`Labor Code Sections 246 and 2750.3
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`Next, Uber argues that Count I should be dismissed to the extent it is premised upon
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`violations of California Labor Code Section 246 or 2750.3. See Mot. at 7. This is because (1)
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`there is no private right of action under either Section 246 or 2750.3, and (2) even if a private right
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`of action existed, Plaintiffs have failed to plead sufficient facts to state a claim for paid sick leave.
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`See id. Plaintiffs do not contend that either section offers a private right of action, but instead
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`assert that they have pleaded them as predicates to their UCL claim. Plaintiffs’ Opposition to
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`Motion to Dismiss (“Opp.”) at 5–6, Docket No. 68. They contend that the UCL claim can then
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`serve as a predicate for the DJA claim. Id. In response to this contention, Defendant cites Sanders
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`v. Choice Mfg. Co., No. 11-3725 SC, 2011 WL 6002639 (N.D. Cal. Nov. 30, 2011), in which the
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`district court dismissed a claim for declaratory relief on the grounds that three sections of the
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`California Insurance Code did not furnish a private right of action, but found that the plaintiff
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`could state a UCL claim for violations of the same sections. See 2011 WL 6002639, at *7–8.
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`From that result, Uber infers that a claim under the DJA cannot be premised upon a violation of
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`Case 3:19-cv-06462-EMC Document 74 Filed 06/30/20 Page 5 of 8
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`the UCL. However, there is no indication that the plaintiffs in Sanders advanced the argument
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`that their claim for declaratory relief could be premised upon their UCL claim; to the contrary, the
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`court stated: “Plaintiff’s claim for declaratory relief is predicated on violations of sections 116.5,
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`700, and 12800–12865 of the Insurance Code.” Id. at *7. Nor is there any indication that Sanders
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`analyzed or considered the more fundamental question: whether declaratory relief can be premised
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`upon a UCL claim.
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`The Court is unpersuaded that Sanders should preclude declaratory relief here. As
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`explained at the hearing, the Court can see no reason why, if relief is available under the UCL, a
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`plaintiff would not be able to seek declaratory relief under the DJA. In relevant part, the DJA
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`provides:
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`In a case of actual controversy within its jurisdiction, . . . any court
`of the United States, upon the filing of an appropriate pleading, may
`declare the rights and other legal relations of any interested party
`seeking such declaration, whether or not further relief is or could be
`sought. Any such declaration shall have the force and effect of a
`final judgment or decree and shall be reviewable as such.
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`28 U.S.C. § 2201(a). Nothing in the text of the statute precludes the relief that Plaintiffs seek. To
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`the contrary, the parties have presented the Court with an “actual controversy,” and Plaintiffs have
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`asserted a plausible predicate claim under the UCL.
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`3.
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`Entitlement to Relief Under Section 246
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`Uber contends that Plaintiffs have also failed to allege sufficient facts to state a substantive
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`claim for violation of Section 246. See Mot. at 7. To qualify for paid sick leave under California
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`law, an employee must work in California for the relevant employer for 30 or more days in a year
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`(although sick days cannot be used prior to the 90th day of employment), and sick time will accrue
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`at a rate of one hour per every 30 hours worked. Cal. Lab. Code § 246. If an employee needs to
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`use paid sick leave, notice (either in advance or “as soon as practicable”) must be provided to the
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`employer. Id. The requirements and benefits of the San Francisco and Los Angeles paid sick
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`leave ordinances are mostly the same as those in Section 246. See Rules Implementing the San
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`Francisco Paid Sick Leave Ordinance, S.F. OFFICE OF LABOR STANDARDS ENF’T (May 7, 2018)1;
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`L.A., CAL., MUN. CODE ch. XVIII, art. 7, § 187.04. However, Plaintiffs’ Consolidated Complaint
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`is somewhat threadbare in its allegations, and the pleadings do not indicate that Plaintiffs would
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`have qualified for paid sick leave under Section 246 and/or the local ordinances. To the extent
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`that Plaintiffs attempt to cure these deficiencies by way of reference to declarations filed with their
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`Motion for Class Certification, that is not permissible under Rule 12(b)(6) because it exceeds the
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`scope of the complaint. See, e.g., United States v. Ritchie, 342 F.3d 903, 908 (9th Cir. 2003)
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`(“Affidavits and declarations . . . [attached to a motion] are not allowed as pleading exhibits unless
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`they form the basis of the complaint.”). Accordingly, the Court DISMISSES Plaintiffs’ Section
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`246 claim (which currently serves as a predicate to Plaintiffs’ UCL—and DJA—claims) with
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`leave to amend. Should Plaintiffs file an amended complaint, their pleadings must plausibly
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`suggest that they would have qualified for paid sick leave under Section 246 and the local
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`ordinances. As Uber does not dispute that, at the time this case was filed, it did not offer sick pay,
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`Plaintiffs need not plead that they requested it in order to state their claim.
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`4.
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`UCL Claim
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`In addition to challenging the adequacy of the pleading of Plaintiffs’ predicate Section 246
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`claim, Uber challenges Count VI (Plaintiffs’ UCL claim) on additional grounds. See Mot. at 15–
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`17. First, Uber contends that Plaintiffs “do not lack an adequate remedy at law” and therefore that
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`the equitable relief afforded under the UCL is unavailable to them. Id. at 15. Second, Uber also
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`asserts that Plaintiffs lack statutory standing under the UCL because “they have not plausibly
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`alleged they suffered any injury in fact.” Mot. at 15–16. With respect to the first argument,
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`Plaintiffs point out that—without the UCL—they would “have no other means to recover damages
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`for Uber’s violations of state and local paid sick time policies,” nor would they be able to seek
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`“injunctive relief for harm arising from Uber’s [ongoing] violation of Cal. Lab. Codes §§ 246 and
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`2750.3.” Opp. at 13. Accordingly, Plaintiffs do not have an adequate remedy at law. Id.
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`Second, the UCL “limits standing to plaintiffs who have ‘suffered injury in fact and [have]
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`1 Available at https://sfgov.org/olse/sites/default/files/Document/PSLO%20Final%20
`Rules%2005%2007%202018%20to%20post.pdf.
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`lost money or property as a result of the unfair competition.’” Murphy v. Best Buy Stores, L.P.,
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`690 F. App’x 553, 554 (9th Cir. 2017) (quoting Cal. Bus. & Prof. Code § 17204). Here, Plaintiffs’
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`Consolidated Complaint states that they have “suffered injury in fact and lost money and property,
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`including, but not limited to, business expenses that drivers were required to pay and wages that
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`drivers were due.” Consolidated Complaint ¶ 69. However, as discussed above, Plaintiffs have
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`not adequately alleged that they would have qualified for paid sick leave and/or that they would
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`have utilized it (and if so, how much) during the relevant period, had it been available to them.
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`Consistent with the analysis and conclusion reached above, the Court DISMISSES the UCL claim
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`(Count VI) to the extent it is premised on a Section 246 claims; the dismissal is with leave to
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`amend such that, if appropriate, Plaintiffs may add allegations demonstrating that they did lose
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`money or property.2
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`5.
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`Dismissal of Mr. Colopy
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`Finally, the parties disagree as to whether the dismissal of Mr. Colopy has or has not
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`already occurred and whether that dismissal should be with or without prejudice. Pursuant to
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`Federal Rule of Civil Procedure 41, an action may be dismissed by a plaintiff without a court
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`order only when the plaintiff files “a notice of dismissal before the opposing party serves either an
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`answer or a motion for summary judgment” or where there is a “a stipulation of dismissal signed
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`by all parties who have appeared.” Fed. R. Civ. P. 41(a); see also Wilson v. City of San Jose, 111
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`F.3d 688, 692 (9th Cir. 1997) (“Once the defendant serves an answer or a motion for summary
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`judgment, however, the plaintiff may no longer voluntarily dismiss under Rule 41(a)(1), but must
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`file a motion for voluntary dismissal under Rule 41(a)(2).”). Here, there is no stipulation from the
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`parties, and Plaintiffs’ purported dismissal of Mr. Colopy occurred after Uber had filed an answer
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`to Plaintiffs’ First Amended Complaint. Compare Docket No. 34 (Answer to First Amended
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`Class Action Complaint, filed February 3, 2020); with Docket No. 42 (Consolidated Class Action
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`Complaint, filed April 16, 2020). Accordingly, the dismissal of Mr. Colopy will require a court
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`2 As it appears from the declarations that Plaintiffs may have qualified for sick leave benefits had
`Uber offered it, the Court need not address the question whether there would be a loss of money or
`property for purposes of the UCL absent such specific allegations.
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`order. However, the Court finds that Plaintiffs’ decision to omit Mr. Colopy from the
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`Consolidated Complaint was intended as a request to have him dismissed from the case; it is not a
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`waiver of his claims. The Court sees no reason not to dismiss Mr. Colopy. Accordingly, the
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`Court DISMISSES Mr. Colopy from this case, but does so without prejudice to his claims.
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`IV.
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`CONCLUSION
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`For the foregoing reasons, the Court GRANTS Uber’s Motion to Dismiss to the extent that
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`it finds Plaintiffs’ Section 246 claim (which serves as a predicate for Plaintiffs’ UCL and DJA
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`claims) inadequately pled. That claim is DISMISSED with leave to amend, as discussed above.
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`The Court also DISMISSES Mr. Colopy from the case without prejudice. Otherwise, the motion
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`is DENIED. To the extent Defendant asks the Court to strike portions of Plaintiffs’ Consolidated
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`Complaint where is does not dismiss, the Court DENIES that request.
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`This order disposes of Docket No. 61.
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`IT IS SO ORDERED.
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`Dated: June 30, 2020
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`______________________________________
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`EDWARD M. CHEN
`United States District Judge
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