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1017-00004 · Entities. Aurelius Global Media Group · Pleadings/Class Action

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CALDERWOOD & HARKNESS LLP Renata Vasquez (SBN 224578) Devon Archer (SBN 301462) 777 South Flower Street, Suite 4200 Los Angeles, California 90017 Telephone: (213) 555-7200 Facsimile: (213) 555-7201

Attorneys for Defendant AURELIUS MEDIA AMERICAS INC.

SUPERIOR COURT OF THE STATE OF CALIFORNIA

COUNTY OF LOS ANGELES — CENTRAL DISTRICT

Filed: December 19, 2022

Filed concurrently with: Demurrer (Document 27); Declaration of Gregory Tanaka (Document 29); [Proposed] Order (Document 30)

TABLE OF AUTHORITIES

Cases

Statutes

Other Authorities

I. INTRODUCTION

Plaintiff Marisol Fuentes ("Plaintiff") has asserted a Seventh Cause of Action under California's Unfair Competition Law ("UCL"), California Business and Professions Code section 17200 et seq., against Defendant Aurelius Media Americas Inc. ("AMA"). This Seventh Cause of Action is entirely derivative of the first six causes of action in the Complaint, all of which allege violations of the California Labor Code — specifically California Labor Code sections 226.7, 510, 512, 1194, 1197, 1197.1, 226, and 201–203. The UCL claim adds no independent theory of liability, no independent factual basis, and no remedy not already available under the comprehensive statutory scheme of the Labor Code. It should be dismissed.

AMA is a Delaware corporation qualified to do business in the State of California, with its principal office located at 8500 Sunset Boulevard, Suite 1400, West Hollywood, California 90069. AMA is a wholly owned subsidiary of Aurelius Global Media Group PLC, a United Kingdom-headquartered public limited company. AMA operates in the media, entertainment, and e-commerce industry, producing unscripted and scripted content for distribution across multiple platforms.

Plaintiff Fuentes was formerly employed by AMA as a Production Coordinator in the Unscripted Programming Division. She was employed from March 14, 2019 through August 5, 2022. The Complaint was filed on November 1, 2022, and asserts seven causes of action on behalf of Plaintiff individually and on behalf of a putative class of approximately 1,850 current and former non-exempt, hourly employees of AMA in California.

The first six causes of action in the Complaint challenge AMA's payroll, timekeeping, and scheduling practices under various provisions of the California Labor Code. These causes of action seek statutory damages, premiums, penalties, and other relief as provided by the specific Labor Code provisions invoked. The Seventh Cause of Action, however, simply repackages these same allegations under the UCL. It does not identify any business practice, apart from the payroll and scheduling practices already challenged in the first six causes of action, that independently constitutes an unfair, unlawful, or fraudulent business practice. It does not allege any injury in fact independent of the unpaid wages and penalties already sought in the predicate claims. And it does not specify which of the three distinct prongs of the UCL — "unlawful," "unfair," or "fraudulent" — supports the claim, instead reciting all three in a single conclusory paragraph without any factual specificity.

For the reasons set forth below, the Seventh Cause of Action should be dismissed as duplicative, lacking in standing, and impermissibly vague. AMA respectfully submits that the demurrer should be sustained without leave to amend, as the deficiency is substantive and cannot be cured through additional pleading.

II. STATEMENT OF FACTS

AMA employs approximately 3,200 employees in the United States, of whom approximately 2,400 are based in California. These California-based employees work across seven production facilities located in the greater Los Angeles metropolitan area and surrounding regions. AMA operates in the media, entertainment, and e-commerce industry, producing content that falls under Industrial Welfare Commission ("IWC") Wage Order 12, which governs the Motion Picture Industry.

AMA maintains comprehensive written policies and procedures regarding meal periods, rest periods, overtime compensation, timekeeping, and wage statement compliance, as set forth in the AMA Employee Handbook. The most recent revision of the Employee Handbook was issued in March 2021, and it was distributed to all employees, including Plaintiff, in both electronic and print format. The Employee Handbook expressly addresses the company's obligations under the California Labor Code with respect to each of the categories of compensation and scheduling practices at issue in the Complaint.

Since January 1, 2019, AMA has utilized the NovaPay Solutions "TimeTrack Pro" electronic timekeeping system. This system is designed to record employee clock-in and clock-out times, meal period start and end times, and rest period acknowledgments. The system generates automated reports that are reviewed by AMA's payroll department on a bi-weekly basis. The TimeTrack Pro system has been in continuous use throughout the entirety of Plaintiff Fuentes's employment with AMA.

The Complaint in this action alleges seven causes of action. The first six causes of action are as follows: (1) failure to provide compliant meal periods in violation of California Labor Code sections 226.7 and 512; (2) failure to provide compliant rest periods in violation of California Labor Code section 226.7; (3) failure to pay overtime compensation in violation of California Labor Code sections 510 and 1194; (4) failure to pay minimum wage in violation of California Labor Code sections 1194, 1197, and 1197.1; (5) failure to provide accurate, itemized wage statements in violation of California Labor Code section 226; and (6) waiting time penalties for failure to timely pay final wages in violation of California Labor Code sections 201–203.

The Seventh Cause of Action — the sole cause of action at issue on this demurrer — alleges, in a single, conclusory paragraph, that AMA's compensation practices constitute "unlawful, unfair, and fraudulent" business practices in violation of Business and Professions Code section 17200 et seq. The entirety of the Seventh Cause of Action's factual allegations consists of a general incorporation by reference of the preceding 112 paragraphs of the Complaint — all of which relate exclusively to the Labor Code claims — and a blanket assertion that AMA's "compensation practices" violate the UCL. The Complaint does not identify any business practice apart from the payroll, timekeeping, and scheduling practices already challenged in causes of action one through six that independently constitutes an unfair or fraudulent business practice. Nor does the Complaint identify any injury in fact that Plaintiff suffered as a result of any such independent practice.

The Declaration of Gregory Tanaka, Vice President, Legal and Compliance of AMA, filed concurrently with this memorandum and the Demurrer, confirms the derivative nature of the UCL claim. Mr. Tanaka's declaration further describes AMA's compliance policies and the operation of the TimeTrack Pro system, and attests that the only factual allegations in the Complaint that pertain to the Seventh Cause of Action are the identical wage-and-hour allegations underlying the first six causes of action. (Tanaka Decl., ¶¶ 3–9.)

III. LEGAL STANDARD

A demurrer tests the legal sufficiency of the factual allegations in the complaint. It is the appropriate procedural mechanism for challenging a pleading that fails to state facts sufficient to constitute a cause of action or that is uncertain, ambiguous, or unintelligible on its face. In ruling on a demurrer, the court assumes the truth of all properly pleaded factual allegations in the complaint, as well as facts that may be inferred from those allegations. However, the court does not accept as true contentions, deductions, or conclusions of fact or law. (Blank v. Kirwan (1985) 39 Cal.3d 311, 318.) A demurrer "treat[s] the demurrer as admitting all material facts properly pleaded, but not contentions, deductions, or conclusions of fact or law." (Id.)

A demurrer lies under Code of Civil Procedure section 430.10, subdivision (e), where the complaint "does not state facts sufficient to constitute a cause of action." This ground is the most commonly invoked basis for demurrer, and it tests whether, even accepting all well-pleaded facts as true, the plaintiff has stated a legally cognizable claim. The moving party bears the burden of demonstrating that the complaint fails to state a cause of action as a matter of law.

In addition, a demurrer lies under Code of Civil Procedure section 430.10, subdivision (f), where the pleading is "uncertain." Under California law, a pleading is "uncertain" when it is "ambiguous and unintelligible." This ground is available where the complaint is so vague or ambiguous that the defendant cannot reasonably determine the issues to be addressed or the theories against which it must defend. While demurrers for uncertainty are disfavored and are rarely sustained on this ground alone, the standard is appropriately invoked where a cause of action fails to identify the specific legal theory or factual basis upon which it rests.

A demurrer will be sustained where the complaint fails to state facts sufficient to constitute a cause of action, even if some facts are alleged, if those facts are insufficient as a matter of law to support the claim. The question is not whether the plaintiff has alleged some facts, but whether the facts alleged, taken as true, are legally sufficient to support the specific cause of action at issue.

Furthermore, the court may sustain a demurrer without leave to amend where amendment would be futile — that is, where the defect in the pleading is substantive and cannot be cured by the addition of further factual allegations. (Blank v. Kirwan, supra, 39 Cal.3d at p. 318.) Where the nature of the plaintiff's claim makes it clear that no additional facts could remedy the deficiency, the court acts within its discretion in denying leave to amend and dismissing the cause of action with prejudice.

IV. ARGUMENT

A. The UCL Claim Is Entirely Derivative of the Labor Code Causes of Action and Adds Nothing to the Complaint

California's Unfair Competition Law, codified at Business and Professions Code section 17200 et seq., prohibits "any unlawful, unfair or fraudulent business act or practice." The UCL is intentionally broad in scope, and its "unlawful" prong permits a plaintiff to "borrow" violations of other laws and treat them as independently actionable under section 17200. (Farmers Insurance Exchange v. Superior Court (1992) 2 Cal.4th 377, 383.) This "borrowing" mechanism allows a plaintiff to allege that the defendant's violation of some other statute — whether federal, state, or local — constitutes an unlawful business practice under the UCL.

However, the breadth of the UCL is not without limits. Where a UCL claim is entirely derivative of predicate statutory claims that themselves provide comprehensive remedies, the UCL claim is redundant and subject to demurrer. The California Supreme Court has recognized this principle in the context of UCL claims predicated on Labor Code violations. In Cortez v. Purolator Air Filtration Products Co. (2000) 23 Cal.4th 163, 178, the Court addressed a UCL claim that was based on the defendant's alleged failure to pay overtime wages in violation of the Labor Code. While the Cortez Court ultimately permitted the UCL claim to proceed in that case — primarily because the UCL's four-year statute of limitations allowed recovery for a longer period than the Labor Code's shorter limitations period — the Court explicitly recognized the derivative nature of UCL claims based on Labor Code violations. The Court observed that the UCL claim rose and fell with the predicate Labor Code claims, and that the UCL did not create any independent substantive obligation beyond what the Labor Code already imposed.

The present case is distinguishable from Cortez in a critical respect. In Cortez, the plaintiff identified a specific, practical advantage that the UCL claim provided: the longer statute of limitations under the UCL (four years) compared to the Labor Code's three-year or one-year limitations periods. Here, by contrast, Plaintiff has not identified any practical advantage or independent basis for the UCL claim. The Complaint does not allege that the UCL claim reaches conduct outside the temporal scope of the Labor Code claims. It does not allege that the UCL provides a remedy — whether restitution, injunction, or otherwise — that is different from or in addition to the remedies already available under the Labor Code. And it does not allege any business practice that is independently unlawful, unfair, or fraudulent apart from the Labor Code violations.

The California Labor Code provides comprehensive statutory remedies for every type of violation alleged in the Complaint. Each of the first six causes of action invokes a specific Labor Code provision that prescribes specific remedies, penalties, or premium payments:

• Meal and rest period premiums: California Labor Code section 226.7 provides that an employer who fails to provide a compliant meal or rest period must pay the employee one additional hour of pay at the employee's regular rate of compensation for each workday that a meal or rest period was not provided.

• Overtime compensation: California Labor Code sections 510 and 1194 provide that an employee is entitled to overtime compensation at 1.5 times or 2 times the regular rate of pay, as applicable, and that an employee may bring a civil action to recover unpaid overtime wages plus interest, reasonable attorney's fees, and costs.

• Minimum wage: California Labor Code sections 1197 and 1197.1 provide that an employer who pays less than the applicable minimum wage is liable for the balance of the unpaid wages, plus liquidated damages in an amount equal to the wages unlawfully unpaid, plus interest thereon.

• Wage statement penalties: California Labor Code section 226 provides that an employee suffering injury as a result of a knowing and intentional failure to comply with the wage statement requirements may recover the greater of all actual damages or an aggregate penalty not to exceed four thousand dollars ($4,000), plus costs and reasonable attorney's fees.

• Waiting time penalties: California Labor Code sections 201–203 provide that when an employer willfully fails to pay final wages upon termination, the employee's wages continue as a penalty for up to thirty (30) calendar days from the date of demand or termination.

Given this comprehensive remedial framework, the UCL adds only one potential remedy not available under the Labor Code: restitution. (Bus. & Prof. Code, § 17203.) The UCL does not provide for damages — its remedies are limited to restitution and injunctive relief. (Id.) Plaintiff has not alleged facts showing that restitution would provide relief different from or in addition to the statutory damages, premiums, and penalties already available under the Labor Code. In the wage-and-hour context, restitution typically consists of the return of wages wrongfully withheld — which is precisely the relief already sought through the Labor Code claims. Plaintiff has not identified any distinct sum of money or property that would be recoverable as restitution under the UCL but not as damages, premiums, or penalties under the Labor Code.

The UCL cannot be used to create a duplicative cause of action that merely repackages the same factual allegations and the same injury under a different statutory label. As the California Supreme Court emphasized in Cel-Tech Communications, Inc. v. Los Angeles Cellular Telephone Co. (1999) 20 Cal.4th 163, 182, a UCL claim must identify an independent unlawful, unfair, or fraudulent act or practice. The Court in Cel-Tech was careful to note that the UCL is not a catch-all for any business conduct a plaintiff finds objectionable — there must be an identifiable unfair, unlawful, or fraudulent practice that gives rise to the claim. Where the only identifiable practice is a violation of another statute that provides its own comprehensive remedies, the UCL claim adds nothing to the litigation and imposes unnecessary burden on the defendant and the Court.

Here, the Complaint identifies no practice that is independently unlawful, unfair, or fraudulent apart from the Labor Code violations alleged in the first six causes of action. The Seventh Cause of Action is, in substance, a carbon copy of the first six causes of action dressed in UCL clothing. It incorporates by reference the same factual allegations, identifies the same payroll and scheduling practices as the basis for liability, seeks the same monetary recovery, and asserts the same injury. The only difference is the statutory label. This is precisely the type of duplicative, derivative UCL claim that is subject to demurrer.

AMA does not contend that the UCL can never be invoked in the employment context. There may be cases in which a UCL claim adds a meaningful dimension to an employment dispute — for example, where the employer engaged in deceptive hiring practices, misleading representations to independent contractors regarding their classification status, or other conduct directed at the marketplace that goes beyond the scope of the Labor Code. But this is not such a case. Here, the UCL claim is nothing more than a seventh recitation of the same wage-and-hour grievances already articulated in six preceding causes of action.

B. Plaintiff Lacks Standing Under the UCL

Prior to 2004, California's UCL was broadly available to any person acting in the public interest, and private plaintiffs were not required to demonstrate individual standing or injury in fact. This changed with the passage of Proposition 64 in November 2004, which amended Business and Professions Code section 17204 to impose a standing requirement on private UCL plaintiffs. As amended, section 17204 provides that a UCL action may be brought "by a person who has suffered injury in fact and has lost money or property as a result of the unfair competition." (Bus. & Prof. Code, § 17204, as amended by Proposition 64.)

The California Supreme Court interpreted the Proposition 64 standing requirement in Kwikset Corp. v. Superior Court (2011) 51 Cal.4th 310, 322. In Kwikset, the Court held that a private UCL plaintiff must demonstrate two elements to establish standing: (1) a loss or deprivation of money or property sufficient to qualify as injury in fact — that is, an economic injury; and (2) a causal connection between the defendant's challenged business practice and the plaintiff's economic injury. (Id. at p. 322.) The Court explained that the injury in fact requirement serves to ensure that UCL claims are brought by parties who have a genuine stake in the outcome of the litigation, and that the causal connection requirement ensures that the challenged business practice, rather than some unrelated event, was the source of the plaintiff's harm.

The Kwikset standing standard, while not onerous, imposes a meaningful pleading obligation on the UCL plaintiff. The plaintiff must allege some injury attributable to the allegedly unfair business practice as such, rather than merely restating the same injury alleged in the predicate statutory claims. The standing requirement is not satisfied by a bare allegation that the plaintiff lost money — the plaintiff must connect that loss to the specific business practice challenged under the UCL.

Plaintiff's Complaint fails to allege with specificity that Plaintiff "lost money or property" as a direct result of an unfair business practice independent of the Labor Code violations. The Complaint's Seventh Cause of Action does not identify any business practice, distinct from the payroll, timekeeping, and scheduling practices challenged in the first six causes of action, that caused Plaintiff to suffer an economic injury. Rather, the Seventh Cause of Action simply incorporates by reference the same factual allegations underlying the Labor Code claims and asserts, in conclusory fashion, that these practices constitute unfair competition. This is insufficient to establish UCL standing.

To the extent Plaintiff's UCL claim is predicated solely on the same wage losses alleged in the first through sixth causes of action — that is, unpaid meal period premiums, unpaid rest period premiums, unpaid overtime compensation, unpaid minimum wages, inaccurate wage statements, and owed final wages — the UCL claim is duplicative and unnecessary. The injury is identical; the theory is identical; only the statutory label differs. The standing analysis confirms what the substantive analysis makes clear: Plaintiff has not alleged a UCL claim that exists independently of the Labor Code claims.

Plaintiff has not alleged that AMA engaged in any business practice — apart from the payroll, timekeeping, and scheduling practices already challenged under the Labor Code — that independently caused Plaintiff to lose money or property. The Complaint contains no allegation of deceptive marketing, misleading business representations, false advertising, or any conduct directed at the consuming public (as opposed to AMA's own employees) that would independently support UCL standing. There is no allegation that AMA made any misrepresentation to Plaintiff or to the putative class members regarding the terms of their employment, their rate of pay, or their entitlement to meal or rest periods that induced Plaintiff to accept or continue employment to her detriment.

The UCL was designed to protect the public from unfair business practices in the marketplace — not to provide an additional vehicle for individual employment claims already comprehensively addressed by the Labor Code. While the UCL's scope is broad, it is not unlimited, and Proposition 64's standing requirement ensures that private UCL claims serve a genuine remedial function rather than operating as a duplicative appendage to otherwise complete statutory causes of action.

Accordingly, Plaintiff lacks standing to pursue the Seventh Cause of Action, and the demurrer should be sustained on this independent ground.

C. The UCL Claim Is Uncertain and Ambiguous

In addition to the substantive deficiencies discussed above, the Seventh Cause of Action is subject to demurrer on the ground of uncertainty. Code of Civil Procedure section 430.10, subdivision (f), provides that a demurrer may be sustained on the ground that the pleading is "uncertain" — meaning "ambiguous and unintelligible." A pleading is uncertain when the defendant cannot reasonably determine the issues that must be addressed or the specific legal theories against which it must defend.

The UCL encompasses three distinct and independent prongs: "unlawful," "unfair," and "fraudulent." Each prong has different elements, requires different factual allegations, and is subject to different legal standards. A business practice may violate one, two, or all three prongs, but the plaintiff must allege facts specific to each prong that the plaintiff invokes. The three prongs are independent of one another, and each provides a separate basis for UCL liability.

Plaintiff's Complaint alleges, in conclusory fashion, that AMA's practices were "unlawful, unfair, and fraudulent" — reciting all three prongs of section 17200 — without specifying which prong or prongs support the claim, or alleging facts specific to each prong. This "kitchen sink" approach renders the pleading uncertain and fails to give AMA fair notice of the theory or theories it must defend against. AMA is left to guess whether Plaintiff is proceeding under the "unlawful" prong (which borrows violations of other laws), the "unfair" prong (which requires a showing of conduct that violates public policy or is immoral, unethical, oppressive, or unscrupulous), the "fraudulent" prong (which requires a showing that the public is likely to be deceived), or some combination thereof.

The Court of Appeal has recognized that this type of conclusory, undifferentiated UCL pleading is insufficient. In Khoury v. Maly's of California, Inc. (1993) 14 Cal.App.4th 612, 616, the court sustained a demurrer to a UCL claim that failed to identify the specific "unfair" practice with sufficient particularity. The Khoury court held that a UCL plaintiff must allege with reasonable particularity the facts supporting the statutory elements of the claim. A bare recitation of the statutory language — "unlawful, unfair, and fraudulent" — without any supporting factual allegations specific to each prong is insufficient to meet this standard.

The deficiency in pleading particularity is not merely a technical flaw. It is a substantive obstacle to AMA's ability to mount a meaningful defense. Each of the three UCL prongs calls for a different analytical framework and a different set of defenses. Without knowing which prong Plaintiff relies upon, AMA cannot frame its response, its discovery plan, or its trial preparation in a targeted and efficient manner. The uncertainty is compounded by the fact that the Complaint provides no factual allegations whatsoever that are specific to the UCL claim — it simply incorporates the Labor Code allegations by reference and appends the conclusory label "unlawful, unfair, and fraudulent."

Each of the three prongs is addressed in turn below.

1. The "Unlawful" Prong. Under the "unlawful" prong of the UCL, a plaintiff must identify a violation of some other law — whether a statute, regulation, or other legal requirement — and assert that the violation constitutes an unlawful business practice. The "unlawful" prong does not create any independent prohibition; it merely provides a mechanism for enforcing other laws through the UCL's remedial framework.

Here, the only "other law" identified in the Complaint as the basis for the UCL claim is the California Labor Code. The Seventh Cause of Action incorporates by reference the factual allegations of the first six causes of action, all of which allege violations of various Labor Code provisions. No other statute, regulation, ordinance, or legal requirement is identified as a predicate for the "unlawful" prong. The UCL claim under the "unlawful" prong is therefore entirely derivative of the first six causes of action, as discussed in Section IV.A above. It adds no independent theory of liability and no independent factual basis. If the first six causes of action fail, the "unlawful" prong of the UCL claim necessarily fails as well. If the first six causes of action succeed, the "unlawful" prong of the UCL claim is superfluous, because the Labor Code already provides comprehensive remedies for the same violations.

In either event, the "unlawful" prong of the UCL claim adds nothing to the Complaint and should be dismissed.

2. The "Unfair" Prong. Under the "unfair" prong of the UCL, the plaintiff must demonstrate that the challenged business practice is "unfair" — a standard that has been articulated in several different formulations by California courts. One widely applied formulation requires the plaintiff to show that the practice either (a) violates an established public policy or (b) is "immoral, unethical, oppressive, unscrupulous or substantially injurious to consumers." (South Bay Chevrolet v. General Motors Acceptance Corp. (1999) 72 Cal.App.4th 861, 886.) Under this standard, the "unfairness" of the business practice must be assessed independently of any statutory violation — that is, the plaintiff must show that the practice is unfair in and of itself, not merely that it violates some other law (which would be addressed under the "unlawful" prong).

Plaintiff has not alleged facts supporting a finding of "unfairness" independent of the Labor Code claims. The Complaint does not identify any business practice that is "immoral, unethical, oppressive, or unscrupulous" apart from the alleged wage-and-hour violations. The alleged use of an auto-deduction feature in the NovaPay Solutions TimeTrack Pro timekeeping system and the alleged failure to provide compliant meal and rest breaks are the subject of the first six causes of action — they do not independently constitute "unfair" business practices under the UCL. These are the same practices, described in the same factual terms, that form the basis of the Labor Code claims. The Complaint does not allege that AMA engaged in any practice that offends public policy in a manner distinct from the Labor Code violations, or that AMA's conduct was oppressive, unscrupulous, or substantially injurious in a way that goes beyond the failure to comply with the specific statutory requirements at issue.

Without any factual allegations specific to the "unfair" prong, Plaintiff's UCL claim cannot proceed on this basis.

3. The "Fraudulent" Prong. Under the "fraudulent" prong of the UCL, the plaintiff must demonstrate that the challenged business practice is "likely to deceive" members of the public. (Committee on Children's Television, Inc. v. General Foods Corp. (1983) 35 Cal.3d 197, 211.) The "fraudulent" prong does not require proof of actual fraud or reliance — it requires only that the practice is likely to mislead a reasonable member of the public. However, the plaintiff must at minimum allege that the defendant engaged in some form of deceptive conduct, misrepresentation, concealment, or misleading practice that is directed at, or likely to affect, the public.

No such allegations appear anywhere in the Complaint. The Complaint does not allege that AMA made any misrepresentation to the public, to consumers, to prospective employees, or even to its own current employees regarding its compensation practices. There is no allegation that AMA published false or misleading information about its pay rates, benefits, meal period policies, or rest period policies. There is no allegation of deception, concealment, omission, or fraud of any kind. The Seventh Cause of Action's invocation of the "fraudulent" prong is entirely unsupported by any factual allegation in the 113-paragraph Complaint.

The absence of any "fraudulent" prong allegations further demonstrates that the UCL claim is nothing more than a repackaging of the Labor Code claims. Plaintiff has invoked the "fraudulent" prong not because there is any factual basis for a fraud theory, but simply because the statutory language of section 17200 uses the word "fraudulent" and Plaintiff has elected to recite the full statutory language without regard to whether each element is actually supported by factual allegations. This is precisely the type of "kitchen sink" pleading that renders a UCL claim uncertain and subject to demurrer.

D. Amendment Would Be Futile

For the foregoing reasons, AMA respectfully submits that the deficiency in the Seventh Cause of Action is not a matter of insufficient factual detail that could be remedied through additional pleading. Rather, the deficiency is one of substantive redundancy. The UCL claim is derivative of the Labor Code claims. It identifies no independent business practice, no independent injury, and no independent remedy. No amount of additional factual pleading can transform a derivative Labor Code claim into an independent UCL claim where, as here, the underlying conduct is the same, the injury is the same, and the remedies available under the Labor Code are comprehensive.

If the Court is inclined to sustain the demurrer, AMA respectfully requests that it do so without leave to amend, as amendment would be futile. The Seventh Cause of Action is, at its core, a restatement of the first six causes of action under a different statutory heading. This structural deficiency cannot be cured through additional factual allegations — it is inherent in the nature of the claim as pleaded and as conceived.

In the alternative, if the Court in its discretion determines that leave to amend is appropriate, AMA respectfully requests that any amendment be limited to twenty (20) days from the date of the Court's order and that Plaintiff be required to specifically identify in any amended complaint:

(a) The specific prong or prongs of the UCL — "unlawful," "unfair," and/or "fraudulent" — upon which the amended Seventh Cause of Action is based;

(b) The specific business practice or practices, independent of the California Labor Code violations alleged in the first six causes of action, that form the basis of the UCL claim; and

(c) The specific injury in fact, independent of unpaid wages, premiums, and penalties, that Plaintiff suffered as a result of the allegedly unfair competition.

These requirements are consistent with the pleading standards applicable to UCL claims, as articulated in Khoury, Kwikset, and Cel-Tech, and are necessary to ensure that any amended UCL claim provides AMA with fair notice of the theory it must defend against.

V. CONCLUSION

For the foregoing reasons, Defendant Aurelius Media Americas Inc. respectfully requests that the Court sustain the Demurrer to the Seventh Cause of Action (Unfair Business Practices — Cal. Bus. & Prof. Code § 17200) without leave to amend. The Seventh Cause of Action adds no independent theory of liability, no independent factual basis, and no remedy not already available under the comprehensive statutory scheme of the California Labor Code. It is duplicative, as it merely repackages the same factual allegations and the same injury under a different statutory label. Plaintiff lacks standing to pursue the UCL claim because she has not alleged any injury in fact independent of the unpaid wages and penalties sought in the predicate Labor Code claims. And the pleading is uncertain and ambiguous because it invokes all three prongs of the UCL — "unlawful," "unfair," and "fraudulent" — without alleging facts specific to any individual prong or identifying the specific business practice that supports the claim.

In the alternative, Defendant requests that the demurrer be sustained with leave to amend limited to twenty (20) calendar days, with the requirements that any amended Seventh Cause of Action specifically identify the UCL prong or prongs relied upon, the independent business practice forming the basis of the claim, and the independent injury in fact suffered by Plaintiff as a result of the allegedly unfair competition.

The Court should dismiss the Seventh Cause of Action.

Dated: December 19, 2022

CALDERWOOD & HARKNESS LLP

By: ________

Devon Archer (SBN 301462) 777 South Flower Street, Suite 4200 Los Angeles, California 90017 Telephone: (213) 555-7200

Attorneys for Defendant Aurelius Media Americas Inc.

MARISOL FUENTES, individually and on behalf of all others similarly situated,	Case No. 22STCV38214
Plaintiff,	MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF DEFENDANT AURELIUS MEDIA AMERICAS INC.'S DEMURRER TO PLAINTIFF'S SEVENTH CAUSE OF ACTION (UNFAIR BUSINESS PRACTICES — CAL. BUS. & PROF. CODE § 17200)

Hearing Date: TBD

AURELIUS MEDIA AMERICAS INC., a Delaware corporation; and DOES 1 through 50, inclusive,

Dept.: 34

Defendants.

Page

TABLE OF AUTHORITIES	ii
I. INTRODUCTION	1
II. STATEMENT OF FACTS	3
III. LEGAL STANDARD	5
IV. ARGUMENT	7
A. The UCL Claim Is Entirely Derivative of the Labor Code Causes of Action and Adds Nothing to the Complaint	7
B. Plaintiff Lacks Standing Under the UCL	11
C. The UCL Claim Is Uncertain and Ambiguous	14
1. The "Unlawful" Prong	16
2. The "Unfair" Prong	17
3. The "Fraudulent" Prong	18
D. Amendment Would Be Futile	19
V. CONCLUSION	21

Page(s)

Blank v. Kirwan (1985) 39 Cal.3d 311	5, 6
Cel-Tech Communications, Inc. v. Los Angeles Cellular Telephone Co. (1999) 20 Cal.4th 163	9, 10
Committee on Children's Television, Inc. v. General Foods Corp. (1983) 35 Cal.3d 197	18, 19
Cortez v. Purolator Air Filtration Products Co. (2000) 23 Cal.4th 163	7, 8
Farmers Insurance Exchange v. Superior Court (1992) 2 Cal.4th 377	7
Khoury v. Maly's of California, Inc. (1993) 14 Cal.App.4th 612	15
Kwikset Corp. v. Superior Court (2011) 51 Cal.4th 310	11, 12, 13
South Bay Chevrolet v. General Motors Acceptance Corp. (1999) 72 Cal.App.4th 861	17

Page(s)

Cal. Bus. & Prof. Code § 17200 et seq.	passim
Cal. Bus. & Prof. Code § 17203	8, 9
Cal. Bus. & Prof. Code § 17204	11, 12
Cal. Code Civ. Proc. § 430.10(e)	5
Cal. Code Civ. Proc. § 430.10(f)	6, 14
Cal. Lab. Code §§ 201–203	3, 8
Cal. Lab. Code § 226	3, 8
Cal. Lab. Code § 226.7	3, 8
Cal. Lab. Code § 510	3, 8
Cal. Lab. Code § 512	3
Cal. Lab. Code § 1194	3, 8
Cal. Lab. Code §§ 1197, 1197.1	3, 8

Page(s)

Proposition 64 (2004) (amending Bus. & Prof. Code § 17204)

CALDERWOOD & HARKNESS LLP Renata Vasquez (SBN 224578) Devon Archer (SBN 301462) 777 South Flower Street, Suite 4200 Los Angeles, California 90017 Telephone: (213) 555-7200 Facsimile: (213) 555-7201
Attorneys for Defendant AURELIUS MEDIA AMERICAS INC.
SUPERIOR COURT OF THE STATE OF CALIFORNIA
COUNTY OF LOS ANGELES — CENTRAL DISTRICT
Filed: December 19, 2022
Filed concurrently with: Demurrer (Document 27); Declaration of Gregory Tanaka (Document 29); [Proposed] Order (Document 30)
TABLE OF CONTENTS
TABLE OF AUTHORITIES
Cases
Statutes
Other Authorities
I. INTRODUCTION
Plaintiff Marisol Fuentes ("Plaintiff") has asserted a Seventh Cause of Action under California's Unfair Competition Law ("UCL"), California Business and Professions Code section 17200 et seq., against Defendant Aurelius Media Americas Inc. ("AMA"). This Seventh Cause of Action is entirely derivative of the first six causes of action in the Complaint, all of which allege violations of the California Labor Code — specifically California Labor Code sections 226.7, 510, 512, 1194, 1197, 1197.1, 226, and 201–203. The UCL claim adds no independent theory of liability, no independent factual basis, and no remedy not already available under the comprehensive statutory scheme of the Labor Code. It should be dismissed.
AMA is a Delaware corporation qualified to do business in the State of California, with its principal office located at 8500 Sunset Boulevard, Suite 1400, West Hollywood, California 90069. AMA is a wholly owned subsidiary of Aurelius Global Media Group PLC, a United Kingdom-headquartered public limited company. AMA operates in the media, entertainment, and e-commerce industry, producing unscripted and scripted content for distribution across multiple platforms.
Plaintiff Fuentes was formerly employed by AMA as a Production Coordinator in the Unscripted Programming Division. She was employed from March 14, 2019 through August 5, 2022. The Complaint was filed on November 1, 2022, and asserts seven causes of action on behalf of Plaintiff individually and on behalf of a putative class of approximately 1,850 current and former non-exempt, hourly employees of AMA in California.
The first six causes of action in the Complaint challenge AMA's payroll, timekeeping, and scheduling practices under various provisions of the California Labor Code. These causes of action seek statutory damages, premiums, penalties, and other relief as provided by the specific Labor Code provisions invoked. The Seventh Cause of Action, however, simply repackages these same allegations under the UCL. It does not identify any business practice, apart from the payroll and scheduling practices already challenged in the first six causes of action, that independently constitutes an unfair, unlawful, or fraudulent business practice. It does not allege any injury in fact independent of the unpaid wages and penalties already sought in the predicate claims. And it does not specify which of the three distinct prongs of the UCL — "unlawful," "unfair," or "fraudulent" — supports the claim, instead reciting all three in a single conclusory paragraph without any factual specificity.
For the reasons set forth below, the Seventh Cause of Action should be dismissed as duplicative, lacking in standing, and impermissibly vague. AMA respectfully submits that the demurrer should be sustained without leave to amend, as the deficiency is substantive and cannot be cured through additional pleading.
II. STATEMENT OF FACTS
AMA employs approximately 3,200 employees in the United States, of whom approximately 2,400 are based in California. These California-based employees work across seven production facilities located in the greater Los Angeles metropolitan area and surrounding regions. AMA operates in the media, entertainment, and e-commerce industry, producing content that falls under Industrial Welfare Commission ("IWC") Wage Order 12, which governs the Motion Picture Industry.
AMA maintains comprehensive written policies and procedures regarding meal periods, rest periods, overtime compensation, timekeeping, and wage statement compliance, as set forth in the AMA Employee Handbook. The most recent revision of the Employee Handbook was issued in March 2021, and it was distributed to all employees, including Plaintiff, in both electronic and print format. The Employee Handbook expressly addresses the company's obligations under the California Labor Code with respect to each of the categories of compensation and scheduling practices at issue in the Complaint.
Since January 1, 2019, AMA has utilized the NovaPay Solutions "TimeTrack Pro" electronic timekeeping system. This system is designed to record employee clock-in and clock-out times, meal period start and end times, and rest period acknowledgments. The system generates automated reports that are reviewed by AMA's payroll department on a bi-weekly basis. The TimeTrack Pro system has been in continuous use throughout the entirety of Plaintiff Fuentes's employment with AMA.
The Complaint in this action alleges seven causes of action. The first six causes of action are as follows: (1) failure to provide compliant meal periods in violation of California Labor Code sections 226.7 and 512; (2) failure to provide compliant rest periods in violation of California Labor Code section 226.7; (3) failure to pay overtime compensation in violation of California Labor Code sections 510 and 1194; (4) failure to pay minimum wage in violation of California Labor Code sections 1194, 1197, and 1197.1; (5) failure to provide accurate, itemized wage statements in violation of California Labor Code section 226; and (6) waiting time penalties for failure to timely pay final wages in violation of California Labor Code sections 201–203.
The Seventh Cause of Action — the sole cause of action at issue on this demurrer — alleges, in a single, conclusory paragraph, that AMA's compensation practices constitute "unlawful, unfair, and fraudulent" business practices in violation of Business and Professions Code section 17200 et seq. The entirety of the Seventh Cause of Action's factual allegations consists of a general incorporation by reference of the preceding 112 paragraphs of the Complaint — all of which relate exclusively to the Labor Code claims — and a blanket assertion that AMA's "compensation practices" violate the UCL. The Complaint does not identify any business practice apart from the payroll, timekeeping, and scheduling practices already challenged in causes of action one through six that independently constitutes an unfair or fraudulent business practice. Nor does the Complaint identify any injury in fact that Plaintiff suffered as a result of any such independent practice.
The Declaration of Gregory Tanaka, Vice President, Legal and Compliance of AMA, filed concurrently with this memorandum and the Demurrer, confirms the derivative nature of the UCL claim. Mr. Tanaka's declaration further describes AMA's compliance policies and the operation of the TimeTrack Pro system, and attests that the only factual allegations in the Complaint that pertain to the Seventh Cause of Action are the identical wage-and-hour allegations underlying the first six causes of action. (Tanaka Decl., ¶¶ 3–9.)
III. LEGAL STANDARD
A demurrer tests the legal sufficiency of the factual allegations in the complaint. It is the appropriate procedural mechanism for challenging a pleading that fails to state facts sufficient to constitute a cause of action or that is uncertain, ambiguous, or unintelligible on its face. In ruling on a demurrer, the court assumes the truth of all properly pleaded factual allegations in the complaint, as well as facts that may be inferred from those allegations. However, the court does not accept as true contentions, deductions, or conclusions of fact or law. (Blank v. Kirwan (1985) 39 Cal.3d 311, 318.) A demurrer "treat[s] the demurrer as admitting all material facts properly pleaded, but not contentions, deductions, or conclusions of fact or law." (Id.)
A demurrer lies under Code of Civil Procedure section 430.10, subdivision (e), where the complaint "does not state facts sufficient to constitute a cause of action." This ground is the most commonly invoked basis for demurrer, and it tests whether, even accepting all well-pleaded facts as true, the plaintiff has stated a legally cognizable claim. The moving party bears the burden of demonstrating that the complaint fails to state a cause of action as a matter of law.
In addition, a demurrer lies under Code of Civil Procedure section 430.10, subdivision (f), where the pleading is "uncertain." Under California law, a pleading is "uncertain" when it is "ambiguous and unintelligible." This ground is available where the complaint is so vague or ambiguous that the defendant cannot reasonably determine the issues to be addressed or the theories against which it must defend. While demurrers for uncertainty are disfavored and are rarely sustained on this ground alone, the standard is appropriately invoked where a cause of action fails to identify the specific legal theory or factual basis upon which it rests.
A demurrer will be sustained where the complaint fails to state facts sufficient to constitute a cause of action, even if some facts are alleged, if those facts are insufficient as a matter of law to support the claim. The question is not whether the plaintiff has alleged some facts, but whether the facts alleged, taken as true, are legally sufficient to support the specific cause of action at issue.
Furthermore, the court may sustain a demurrer without leave to amend where amendment would be futile — that is, where the defect in the pleading is substantive and cannot be cured by the addition of further factual allegations. (Blank v. Kirwan, supra, 39 Cal.3d at p. 318.) Where the nature of the plaintiff's claim makes it clear that no additional facts could remedy the deficiency, the court acts within its discretion in denying leave to amend and dismissing the cause of action with prejudice.
IV. ARGUMENT
A. The UCL Claim Is Entirely Derivative of the Labor Code Causes of Action and Adds Nothing to the Complaint
California's Unfair Competition Law, codified at Business and Professions Code section 17200 et seq., prohibits "any unlawful, unfair or fraudulent business act or practice." The UCL is intentionally broad in scope, and its "unlawful" prong permits a plaintiff to "borrow" violations of other laws and treat them as independently actionable under section 17200. (Farmers Insurance Exchange v. Superior Court (1992) 2 Cal.4th 377, 383.) This "borrowing" mechanism allows a plaintiff to allege that the defendant's violation of some other statute — whether federal, state, or local — constitutes an unlawful business practice under the UCL.
However, the breadth of the UCL is not without limits. Where a UCL claim is entirely derivative of predicate statutory claims that themselves provide comprehensive remedies, the UCL claim is redundant and subject to demurrer. The California Supreme Court has recognized this principle in the context of UCL claims predicated on Labor Code violations. In Cortez v. Purolator Air Filtration Products Co. (2000) 23 Cal.4th 163, 178, the Court addressed a UCL claim that was based on the defendant's alleged failure to pay overtime wages in violation of the Labor Code. While the Cortez Court ultimately permitted the UCL claim to proceed in that case — primarily because the UCL's four-year statute of limitations allowed recovery for a longer period than the Labor Code's shorter limitations period — the Court explicitly recognized the derivative nature of UCL claims based on Labor Code violations. The Court observed that the UCL claim rose and fell with the predicate Labor Code claims, and that the UCL did not create any independent substantive obligation beyond what the Labor Code already imposed.
The present case is distinguishable from Cortez in a critical respect. In Cortez, the plaintiff identified a specific, practical advantage that the UCL claim provided: the longer statute of limitations under the UCL (four years) compared to the Labor Code's three-year or one-year limitations periods. Here, by contrast, Plaintiff has not identified any practical advantage or independent basis for the UCL claim. The Complaint does not allege that the UCL claim reaches conduct outside the temporal scope of the Labor Code claims. It does not allege that the UCL provides a remedy — whether restitution, injunction, or otherwise — that is different from or in addition to the remedies already available under the Labor Code. And it does not allege any business practice that is independently unlawful, unfair, or fraudulent apart from the Labor Code violations.
The California Labor Code provides comprehensive statutory remedies for every type of violation alleged in the Complaint. Each of the first six causes of action invokes a specific Labor Code provision that prescribes specific remedies, penalties, or premium payments:
• Meal and rest period premiums: California Labor Code section 226.7 provides that an employer who fails to provide a compliant meal or rest period must pay the employee one additional hour of pay at the employee's regular rate of compensation for each workday that a meal or rest period was not provided.
• Overtime compensation: California Labor Code sections 510 and 1194 provide that an employee is entitled to overtime compensation at 1.5 times or 2 times the regular rate of pay, as applicable, and that an employee may bring a civil action to recover unpaid overtime wages plus interest, reasonable attorney's fees, and costs.
• Minimum wage: California Labor Code sections 1197 and 1197.1 provide that an employer who pays less than the applicable minimum wage is liable for the balance of the unpaid wages, plus liquidated damages in an amount equal to the wages unlawfully unpaid, plus interest thereon.
• Wage statement penalties: California Labor Code section 226 provides that an employee suffering injury as a result of a knowing and intentional failure to comply with the wage statement requirements may recover the greater of all actual damages or an aggregate penalty not to exceed four thousand dollars ($4,000), plus costs and reasonable attorney's fees.
• Waiting time penalties: California Labor Code sections 201–203 provide that when an employer willfully fails to pay final wages upon termination, the employee's wages continue as a penalty for up to thirty (30) calendar days from the date of demand or termination.
Given this comprehensive remedial framework, the UCL adds only one potential remedy not available under the Labor Code: restitution. (Bus. & Prof. Code, § 17203.) The UCL does not provide for damages — its remedies are limited to restitution and injunctive relief. (Id.) Plaintiff has not alleged facts showing that restitution would provide relief different from or in addition to the statutory damages, premiums, and penalties already available under the Labor Code. In the wage-and-hour context, restitution typically consists of the return of wages wrongfully withheld — which is precisely the relief already sought through the Labor Code claims. Plaintiff has not identified any distinct sum of money or property that would be recoverable as restitution under the UCL but not as damages, premiums, or penalties under the Labor Code.
The UCL cannot be used to create a duplicative cause of action that merely repackages the same factual allegations and the same injury under a different statutory label. As the California Supreme Court emphasized in Cel-Tech Communications, Inc. v. Los Angeles Cellular Telephone Co. (1999) 20 Cal.4th 163, 182, a UCL claim must identify an independent unlawful, unfair, or fraudulent act or practice. The Court in Cel-Tech was careful to note that the UCL is not a catch-all for any business conduct a plaintiff finds objectionable — there must be an identifiable unfair, unlawful, or fraudulent practice that gives rise to the claim. Where the only identifiable practice is a violation of another statute that provides its own comprehensive remedies, the UCL claim adds nothing to the litigation and imposes unnecessary burden on the defendant and the Court.
Here, the Complaint identifies no practice that is independently unlawful, unfair, or fraudulent apart from the Labor Code violations alleged in the first six causes of action. The Seventh Cause of Action is, in substance, a carbon copy of the first six causes of action dressed in UCL clothing. It incorporates by reference the same factual allegations, identifies the same payroll and scheduling practices as the basis for liability, seeks the same monetary recovery, and asserts the same injury. The only difference is the statutory label. This is precisely the type of duplicative, derivative UCL claim that is subject to demurrer.
AMA does not contend that the UCL can never be invoked in the employment context. There may be cases in which a UCL claim adds a meaningful dimension to an employment dispute — for example, where the employer engaged in deceptive hiring practices, misleading representations to independent contractors regarding their classification status, or other conduct directed at the marketplace that goes beyond the scope of the Labor Code. But this is not such a case. Here, the UCL claim is nothing more than a seventh recitation of the same wage-and-hour grievances already articulated in six preceding causes of action.
B. Plaintiff Lacks Standing Under the UCL
Prior to 2004, California's UCL was broadly available to any person acting in the public interest, and private plaintiffs were not required to demonstrate individual standing or injury in fact. This changed with the passage of Proposition 64 in November 2004, which amended Business and Professions Code section 17204 to impose a standing requirement on private UCL plaintiffs. As amended, section 17204 provides that a UCL action may be brought "by a person who has suffered injury in fact and has lost money or property as a result of the unfair competition." (Bus. & Prof. Code, § 17204, as amended by Proposition 64.)
The California Supreme Court interpreted the Proposition 64 standing requirement in Kwikset Corp. v. Superior Court (2011) 51 Cal.4th 310, 322. In Kwikset, the Court held that a private UCL plaintiff must demonstrate two elements to establish standing: (1) a loss or deprivation of money or property sufficient to qualify as injury in fact — that is, an economic injury; and (2) a causal connection between the defendant's challenged business practice and the plaintiff's economic injury. (Id. at p. 322.) The Court explained that the injury in fact requirement serves to ensure that UCL claims are brought by parties who have a genuine stake in the outcome of the litigation, and that the causal connection requirement ensures that the challenged business practice, rather than some unrelated event, was the source of the plaintiff's harm.
The Kwikset standing standard, while not onerous, imposes a meaningful pleading obligation on the UCL plaintiff. The plaintiff must allege some injury attributable to the allegedly unfair business practice as such, rather than merely restating the same injury alleged in the predicate statutory claims. The standing requirement is not satisfied by a bare allegation that the plaintiff lost money — the plaintiff must connect that loss to the specific business practice challenged under the UCL.
Plaintiff's Complaint fails to allege with specificity that Plaintiff "lost money or property" as a direct result of an unfair business practice independent of the Labor Code violations. The Complaint's Seventh Cause of Action does not identify any business practice, distinct from the payroll, timekeeping, and scheduling practices challenged in the first six causes of action, that caused Plaintiff to suffer an economic injury. Rather, the Seventh Cause of Action simply incorporates by reference the same factual allegations underlying the Labor Code claims and asserts, in conclusory fashion, that these practices constitute unfair competition. This is insufficient to establish UCL standing.
To the extent Plaintiff's UCL claim is predicated solely on the same wage losses alleged in the first through sixth causes of action — that is, unpaid meal period premiums, unpaid rest period premiums, unpaid overtime compensation, unpaid minimum wages, inaccurate wage statements, and owed final wages — the UCL claim is duplicative and unnecessary. The injury is identical; the theory is identical; only the statutory label differs. The standing analysis confirms what the substantive analysis makes clear: Plaintiff has not alleged a UCL claim that exists independently of the Labor Code claims.
Plaintiff has not alleged that AMA engaged in any business practice — apart from the payroll, timekeeping, and scheduling practices already challenged under the Labor Code — that independently caused Plaintiff to lose money or property. The Complaint contains no allegation of deceptive marketing, misleading business representations, false advertising, or any conduct directed at the consuming public (as opposed to AMA's own employees) that would independently support UCL standing. There is no allegation that AMA made any misrepresentation to Plaintiff or to the putative class members regarding the terms of their employment, their rate of pay, or their entitlement to meal or rest periods that induced Plaintiff to accept or continue employment to her detriment.
The UCL was designed to protect the public from unfair business practices in the marketplace — not to provide an additional vehicle for individual employment claims already comprehensively addressed by the Labor Code. While the UCL's scope is broad, it is not unlimited, and Proposition 64's standing requirement ensures that private UCL claims serve a genuine remedial function rather than operating as a duplicative appendage to otherwise complete statutory causes of action.
Accordingly, Plaintiff lacks standing to pursue the Seventh Cause of Action, and the demurrer should be sustained on this independent ground.
C. The UCL Claim Is Uncertain and Ambiguous
In addition to the substantive deficiencies discussed above, the Seventh Cause of Action is subject to demurrer on the ground of uncertainty. Code of Civil Procedure section 430.10, subdivision (f), provides that a demurrer may be sustained on the ground that the pleading is "uncertain" — meaning "ambiguous and unintelligible." A pleading is uncertain when the defendant cannot reasonably determine the issues that must be addressed or the specific legal theories against which it must defend.
The UCL encompasses three distinct and independent prongs: "unlawful," "unfair," and "fraudulent." Each prong has different elements, requires different factual allegations, and is subject to different legal standards. A business practice may violate one, two, or all three prongs, but the plaintiff must allege facts specific to each prong that the plaintiff invokes. The three prongs are independent of one another, and each provides a separate basis for UCL liability.
Plaintiff's Complaint alleges, in conclusory fashion, that AMA's practices were "unlawful, unfair, and fraudulent" — reciting all three prongs of section 17200 — without specifying which prong or prongs support the claim, or alleging facts specific to each prong. This "kitchen sink" approach renders the pleading uncertain and fails to give AMA fair notice of the theory or theories it must defend against. AMA is left to guess whether Plaintiff is proceeding under the "unlawful" prong (which borrows violations of other laws), the "unfair" prong (which requires a showing of conduct that violates public policy or is immoral, unethical, oppressive, or unscrupulous), the "fraudulent" prong (which requires a showing that the public is likely to be deceived), or some combination thereof.
The Court of Appeal has recognized that this type of conclusory, undifferentiated UCL pleading is insufficient. In Khoury v. Maly's of California, Inc. (1993) 14 Cal.App.4th 612, 616, the court sustained a demurrer to a UCL claim that failed to identify the specific "unfair" practice with sufficient particularity. The Khoury court held that a UCL plaintiff must allege with reasonable particularity the facts supporting the statutory elements of the claim. A bare recitation of the statutory language — "unlawful, unfair, and fraudulent" — without any supporting factual allegations specific to each prong is insufficient to meet this standard.
The deficiency in pleading particularity is not merely a technical flaw. It is a substantive obstacle to AMA's ability to mount a meaningful defense. Each of the three UCL prongs calls for a different analytical framework and a different set of defenses. Without knowing which prong Plaintiff relies upon, AMA cannot frame its response, its discovery plan, or its trial preparation in a targeted and efficient manner. The uncertainty is compounded by the fact that the Complaint provides no factual allegations whatsoever that are specific to the UCL claim — it simply incorporates the Labor Code allegations by reference and appends the conclusory label "unlawful, unfair, and fraudulent."
Each of the three prongs is addressed in turn below.
1. The "Unlawful" Prong. Under the "unlawful" prong of the UCL, a plaintiff must identify a violation of some other law — whether a statute, regulation, or other legal requirement — and assert that the violation constitutes an unlawful business practice. The "unlawful" prong does not create any independent prohibition; it merely provides a mechanism for enforcing other laws through the UCL's remedial framework.
Here, the only "other law" identified in the Complaint as the basis for the UCL claim is the California Labor Code. The Seventh Cause of Action incorporates by reference the factual allegations of the first six causes of action, all of which allege violations of various Labor Code provisions. No other statute, regulation, ordinance, or legal requirement is identified as a predicate for the "unlawful" prong. The UCL claim under the "unlawful" prong is therefore entirely derivative of the first six causes of action, as discussed in Section IV.A above. It adds no independent theory of liability and no independent factual basis. If the first six causes of action fail, the "unlawful" prong of the UCL claim necessarily fails as well. If the first six causes of action succeed, the "unlawful" prong of the UCL claim is superfluous, because the Labor Code already provides comprehensive remedies for the same violations.
In either event, the "unlawful" prong of the UCL claim adds nothing to the Complaint and should be dismissed.
2. The "Unfair" Prong. Under the "unfair" prong of the UCL, the plaintiff must demonstrate that the challenged business practice is "unfair" — a standard that has been articulated in several different formulations by California courts. One widely applied formulation requires the plaintiff to show that the practice either (a) violates an established public policy or (b) is "immoral, unethical, oppressive, unscrupulous or substantially injurious to consumers." (South Bay Chevrolet v. General Motors Acceptance Corp. (1999) 72 Cal.App.4th 861, 886.) Under this standard, the "unfairness" of the business practice must be assessed independently of any statutory violation — that is, the plaintiff must show that the practice is unfair in and of itself, not merely that it violates some other law (which would be addressed under the "unlawful" prong).
Plaintiff has not alleged facts supporting a finding of "unfairness" independent of the Labor Code claims. The Complaint does not identify any business practice that is "immoral, unethical, oppressive, or unscrupulous" apart from the alleged wage-and-hour violations. The alleged use of an auto-deduction feature in the NovaPay Solutions TimeTrack Pro timekeeping system and the alleged failure to provide compliant meal and rest breaks are the subject of the first six causes of action — they do not independently constitute "unfair" business practices under the UCL. These are the same practices, described in the same factual terms, that form the basis of the Labor Code claims. The Complaint does not allege that AMA engaged in any practice that offends public policy in a manner distinct from the Labor Code violations, or that AMA's conduct was oppressive, unscrupulous, or substantially injurious in a way that goes beyond the failure to comply with the specific statutory requirements at issue.
Without any factual allegations specific to the "unfair" prong, Plaintiff's UCL claim cannot proceed on this basis.
3. The "Fraudulent" Prong. Under the "fraudulent" prong of the UCL, the plaintiff must demonstrate that the challenged business practice is "likely to deceive" members of the public. (Committee on Children's Television, Inc. v. General Foods Corp. (1983) 35 Cal.3d 197, 211.) The "fraudulent" prong does not require proof of actual fraud or reliance — it requires only that the practice is likely to mislead a reasonable member of the public. However, the plaintiff must at minimum allege that the defendant engaged in some form of deceptive conduct, misrepresentation, concealment, or misleading practice that is directed at, or likely to affect, the public.
No such allegations appear anywhere in the Complaint. The Complaint does not allege that AMA made any misrepresentation to the public, to consumers, to prospective employees, or even to its own current employees regarding its compensation practices. There is no allegation that AMA published false or misleading information about its pay rates, benefits, meal period policies, or rest period policies. There is no allegation of deception, concealment, omission, or fraud of any kind. The Seventh Cause of Action's invocation of the "fraudulent" prong is entirely unsupported by any factual allegation in the 113-paragraph Complaint.
The absence of any "fraudulent" prong allegations further demonstrates that the UCL claim is nothing more than a repackaging of the Labor Code claims. Plaintiff has invoked the "fraudulent" prong not because there is any factual basis for a fraud theory, but simply because the statutory language of section 17200 uses the word "fraudulent" and Plaintiff has elected to recite the full statutory language without regard to whether each element is actually supported by factual allegations. This is precisely the type of "kitchen sink" pleading that renders a UCL claim uncertain and subject to demurrer.
D. Amendment Would Be Futile
For the foregoing reasons, AMA respectfully submits that the deficiency in the Seventh Cause of Action is not a matter of insufficient factual detail that could be remedied through additional pleading. Rather, the deficiency is one of substantive redundancy. The UCL claim is derivative of the Labor Code claims. It identifies no independent business practice, no independent injury, and no independent remedy. No amount of additional factual pleading can transform a derivative Labor Code claim into an independent UCL claim where, as here, the underlying conduct is the same, the injury is the same, and the remedies available under the Labor Code are comprehensive.
If the Court is inclined to sustain the demurrer, AMA respectfully requests that it do so without leave to amend, as amendment would be futile. The Seventh Cause of Action is, at its core, a restatement of the first six causes of action under a different statutory heading. This structural deficiency cannot be cured through additional factual allegations — it is inherent in the nature of the claim as pleaded and as conceived.
In the alternative, if the Court in its discretion determines that leave to amend is appropriate, AMA respectfully requests that any amendment be limited to twenty (20) days from the date of the Court's order and that Plaintiff be required to specifically identify in any amended complaint:
(a) The specific prong or prongs of the UCL — "unlawful," "unfair," and/or "fraudulent" — upon which the amended Seventh Cause of Action is based;
(b) The specific business practice or practices, independent of the California Labor Code violations alleged in the first six causes of action, that form the basis of the UCL claim; and
(c) The specific injury in fact, independent of unpaid wages, premiums, and penalties, that Plaintiff suffered as a result of the allegedly unfair competition.
These requirements are consistent with the pleading standards applicable to UCL claims, as articulated in Khoury, Kwikset, and Cel-Tech, and are necessary to ensure that any amended UCL claim provides AMA with fair notice of the theory it must defend against.
V. CONCLUSION
For the foregoing reasons, Defendant Aurelius Media Americas Inc. respectfully requests that the Court sustain the Demurrer to the Seventh Cause of Action (Unfair Business Practices — Cal. Bus. & Prof. Code § 17200) without leave to amend. The Seventh Cause of Action adds no independent theory of liability, no independent factual basis, and no remedy not already available under the comprehensive statutory scheme of the California Labor Code. It is duplicative, as it merely repackages the same factual allegations and the same injury under a different statutory label. Plaintiff lacks standing to pursue the UCL claim because she has not alleged any injury in fact independent of the unpaid wages and penalties sought in the predicate Labor Code claims. And the pleading is uncertain and ambiguous because it invokes all three prongs of the UCL — "unlawful," "unfair," and "fraudulent" — without alleging facts specific to any individual prong or identifying the specific business practice that supports the claim.
In the alternative, Defendant requests that the demurrer be sustained with leave to amend limited to twenty (20) calendar days, with the requirements that any amended Seventh Cause of Action specifically identify the UCL prong or prongs relied upon, the independent business practice forming the basis of the claim, and the independent injury in fact suffered by Plaintiff as a result of the allegedly unfair competition.
The Court should dismiss the Seventh Cause of Action.
Dated: December 19, 2022
CALDERWOOD & HARKNESS LLP
By: ________
Devon Archer (SBN 301462) 777 South Flower Street, Suite 4200 Los Angeles, California 90017 Telephone: (213) 555-7200
Attorneys for Defendant Aurelius Media Americas Inc.
MARISOL FUENTES, individually and on behalf of all others similarly situated, | Case No. 22STCV38214
Plaintiff, | MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF DEFENDANT AURELIUS MEDIA AMERICAS INC.'S DEMURRER TO PLAINTIFF'S SEVENTH CAUSE OF ACTION (UNFAIR BUSINESS PRACTICES — CAL. BUS. & PROF. CODE § 17200)
v.
Hearing Date: TBD
AURELIUS MEDIA AMERICAS INC., a Delaware corporation; and DOES 1 through 50, inclusive, | Time: 8:30 a.m.
Dept.: 34
Defendants. | Judge: Hon. Raymond Escobedo
Page
TABLE OF AUTHORITIES | ii
I. INTRODUCTION | 1
II. STATEMENT OF FACTS | 3
III. LEGAL STANDARD | 5
IV. ARGUMENT | 7
A. The UCL Claim Is Entirely Derivative of the Labor Code Causes of Action and Adds Nothing to the Complaint | 7
B. Plaintiff Lacks Standing Under the UCL | 11
C. The UCL Claim Is Uncertain and Ambiguous | 14
1. The "Unlawful" Prong | 16
2. The "Unfair" Prong | 17
3. The "Fraudulent" Prong | 18
D. Amendment Would Be Futile | 19
V. CONCLUSION | 21
Page(s)
Blank v. Kirwan (1985) 39 Cal.3d 311 | 5, 6
Cel-Tech Communications, Inc. v. Los Angeles Cellular Telephone Co. (1999) 20 Cal.4th 163 | 9, 10
Committee on Children's Television, Inc. v. General Foods Corp. (1983) 35 Cal.3d 197 | 18, 19
Cortez v. Purolator Air Filtration Products Co. (2000) 23 Cal.4th 163 | 7, 8
Farmers Insurance Exchange v. Superior Court (1992) 2 Cal.4th 377 | 7
Khoury v. Maly's of California, Inc. (1993) 14 Cal.App.4th 612 | 15
Kwikset Corp. v. Superior Court (2011) 51 Cal.4th 310 | 11, 12, 13
South Bay Chevrolet v. General Motors Acceptance Corp. (1999) 72 Cal.App.4th 861 | 17
Page(s)
Cal. Bus. & Prof. Code § 17200 et seq. | passim
Cal. Bus. & Prof. Code § 17203 | 8, 9
Cal. Bus. & Prof. Code § 17204 | 11, 12
Cal. Code Civ. Proc. § 430.10(e) | 5
Cal. Code Civ. Proc. § 430.10(f) | 6, 14
Cal. Lab. Code §§ 201–203 | 3, 8
Cal. Lab. Code § 226 | 3, 8
Cal. Lab. Code § 226.7 | 3, 8
Cal. Lab. Code § 510 | 3, 8
Cal. Lab. Code § 512 | 3
Cal. Lab. Code § 1194 | 3, 8
Cal. Lab. Code §§ 1197, 1197.1 | 3, 8
Page(s)
Proposition 64 (2004) (amending Bus. & Prof. Code § 17204) | 11

SUPERIOR COURT OF THE STATE OF CALIFORNIA

TABLE OF CONTENTS

TABLE OF AUTHORITIES

I. INTRODUCTION

II. STATEMENT OF FACTS

III. LEGAL STANDARD

IV. ARGUMENT

V. CONCLUSION

CALDERWOOD & HARKNESS LLP

Record

Parties

Dates

Amounts