Johnson v. Trumpet Behavioral Health, LLC

Background

Jasmine Johnson, Jade Khodar-Fisher, and Brittnie Boruff worked for the defendants as physical therapists. They alleged various labor-law violations, including unpaid pre-shift and post-shift work, rounding down hours, failure to provide meal and rest breaks, and failure to reimburse business expenses. Their second amended complaint asserted a claim under California’s Unfair Competition Law (UCL), including a request for equitable restitution.

The court had previously dismissed the UCL claim with permission to amend because the plaintiffs did not allege that they lacked adequate remedies at law. The defendants moved to dismiss the amended UCL claim. The motion challenged only the UCL claim.

Legal standard

The court applied Federal Rule of Civil Procedure 12(b)(6), which requires dismissal when a complaint does not state a legally sufficient claim. At this stage, the court accepts well-pleaded factual allegations as true and draws reasonable inferences for the plaintiffs, but it need not accept conclusory allegations or unreasonable inferences.

Discussion

The court relied on Sonner v. Premier Nutrition Corp., in which the Ninth Circuit held that a federal court must apply traditional equitable principles before awarding restitution under the UCL. One such principle is that equitable relief generally is unavailable when the plaintiff has an adequate remedy at law. The court explained that, at the pleading stage, a plaintiff seeking equitable relief must at least allege that she lacks an adequate legal remedy.

The plaintiffs alleged that they sought restitution only if their legal remedies were inadequate. They also used similar conditional language in allegations concerning the proposed class and their requested relief. The court held that these allegations did not assert that the plaintiffs actually lacked adequate remedies at law. Instead, they merely stated that equitable relief would be sought if legal remedies later proved inadequate.

The court acknowledged that determining the adequacy of legal remedies might be premature early in the case and that a more developed record could show that legal remedies are inadequate. But the court concluded that it was bound by Sonner and that the plaintiffs still had not satisfied the pleading requirement. The court did not decide the defendants’ separate argument that the plaintiffs had to plead specific facts demonstrating why their legal remedies were inadequate.

Disposition

Judge William H. Orrick granted the motion to dismiss the eighth cause of action. The dismissal was without prejudice to the plaintiffs’ ability to seek leave to re-plead the claim later. Because this was the plaintiffs’ third attempt to amend, the court stated that they must seek leave before amending again.