Huerta v. First Solar, Inc., a Delaware corporation

Background

At the court’s request, the parties submitted briefing about the effect of Sonner v. Premier Nutrition Corp. on Huerta’s claim under California’s Unfair Competition Law, California Business and Professions Code section 17200 and following. The claim was based on alleged violations of the California Labor Code, and Huerta also asserted direct Labor Code claims in the lawsuit.

Under Sonner, a federal court applying federal equitable principles cannot award equitable restitution for past harm under the Unfair Competition Law when the plaintiff has an adequate legal remedy. The Ninth Circuit later explained in Guzman that this limitation concerns the court’s “equitable jurisdiction”—its authority to provide equitable remedies—and applies even when the legal remedy is time-barred.

Court’s Analysis

The parties agreed, and the court concluded, that Huerta had an adequate legal remedy through his direct Labor Code claims. The court therefore determined that it lacked equitable jurisdiction over the Unfair Competition Law claim.

Huerta asked the court either to partially remand the claim to state court or to dismiss it without prejudice, stating that he did not prefer one option over the other. The defendant argued that partial remand was improper and that the claim should be dismissed without prejudice, but suggested delaying dismissal until after trial or the end of the case to avoid a duplicative state-court action.

The court found that it clearly had authority to dismiss the claim without prejudice to refiling in state court. It found less clear whether federal law permits a district court to remand only one claim based on a lack of equitable jurisdiction. The court also noted that equitable jurisdiction differs from subject-matter jurisdiction, which concerns the federal courts’ authority over categories of cases granted by Congress. Because the legal authority for partial remand was unclear and Huerta had not argued that dismissal would cause him to forfeit the claim, the court chose dismissal rather than partial remand. The court also found no reason to delay the dismissal.

Disposition

Judge Beth Labson Freeman ordered that Huerta’s Fifth Cause of Action under California’s Unfair Competition Law be DISMISSED WITHOUT PREJUDICE for lack of equitable jurisdiction. The court also DISCHARGED the order to show cause identified as ECF 224. The opinion’s introductory discussion refers to the Unfair Competition Law claim as the Fourth Cause of Action, while the final order calls it the Fifth Cause of Action.