Slick v. CableCom, LLC

Background

Kasey Slick brought a proposed class action alleging that CableCom, LLC violated California’s Unfair Competition Law (UCL). Slick alleged that, while working for CableCom from August 2015 through November 2018, he and similarly situated employees were not adequately compensated, including for missed meal periods and rest breaks. He also alleged that CableCom failed to provide accurate wage statements and payroll records.

The UCL claim was based on alleged violations of several California Labor Code provisions involving overtime, meal and rest periods, minimum wages, wages owed during and at the end of employment, wage statements, payroll records, and reimbursement of business expenses. Slick sought an injunction, restitution of unpaid wages for himself and the proposed class, attorney’s fees, class certification, and appointment as class representative.

CableCom removed the case from California state court to federal court under the Class Action Fairness Act (CAFA) and moved to dismiss under Federal Rule of Civil Procedure 12(b)(6), which permits dismissal for failure to state a legally sufficient claim. CableCom also requested sanctions based on Slick’s continued prosecution of the case despite his participation in the Carr settlement.

Jurisdiction

The court concluded that CAFA provided subject-matter jurisdiction over the proposed class action. CAFA requires, among other things, more than 100 potential class members, citizenship in different states, and more than $5 million in controversy. The court found that the proposed class contained more than 800 members, that Slick was a California citizen, and that CableCom’s ownership structure established citizenship in Delaware and Florida. The court also found that the amount in controversy exceeded the required threshold.

The court rejected Slick’s challenge to CableCom’s amount calculation. CableCom submitted affidavits and an economist’s analysis based on payroll, timekeeping, and termination data. The economist estimated that at least $7.7 million was in controversy, and the court found that evidence persuasive under the required more-likely-than-not standard.

The court also rejected Slick’s reliance on CAFA’s local-controversy exception. That exception can require a federal court to decline jurisdiction in certain primarily local class actions. The court found that the exception’s requirement of an in-state defendant was not met because CableCom’s lone member was a citizen of Delaware and Florida. The court therefore denied Slick’s request to remand the case to state court.

Motion to Dismiss

The court granted CableCom’s motion to dismiss. The court relied on the rule that the UCL provides only equitable remedies, such as an injunction or restitution, and that a plaintiff seeking those remedies in federal court must show that no adequate legal remedy is available.

The court found that the California Labor Code claims underlying Slick’s UCL claim provided a legal remedy for damages. Slick argued that those direct Labor Code claims were barred by the statute of limitations and therefore did not provide an adequate remedy. The court rejected that argument, explaining that failing to timely pursue a legal remedy does not make the remedy legally inadequate. Because Slick had not alleged the absence of an adequate legal remedy, the court dismissed the UCL claim.

The court dismissed the claim without leave to amend. It explained that amendment would be futile because the UCL claim failed as a matter of law and Slick conceded that his direct Labor Code claims were barred by the statute of limitations. Because the adequate-remedy issue disposed of the complaint, the court did not address CableCom’s other arguments that the complaint was insufficiently pleaded or that a prior settlement barred the claims.

Sanctions and Other Rulings

The court denied CableCom’s request for sanctions under its inherent authority. The court did not conclude that the Carr settlement barred Slick’s claim and stated that, based on the record, that defense could not be resolved through a Rule 12(b)(6) motion.

The court granted Slick’s request to file a reply and deemed the reply filed. It denied Slick’s request to remand, denied CableCom’s motion for sanctions, and vacated the scheduled case-management conference.