Summary
In Leber, however, the complaint's "only factual allegations [were] that Defendants all [were] engaged in the sale of timeshare interests and [had] similar compensation practices for their salespersons."
Summary of this case from Lucas v. BMS Enterprises, Inc.Opinion
2:08-CV-01752-PMP-PAL.
July 27, 2009
ORDER
Presently before the Court is Defendants' Motion to Dismiss and/or Strike Claims in First Amended Class Action Complaint (Doc. #15), filed on January 15, 2009. Plaintiffs filed an Opposition (Doc. #51) on March 6, 2009. Defendants filed a Reply (Doc. #57) on April 2, 2009. Defendants also filed Objections (Doc. #58, #59, #60) on April 2, 2009.
Also before the Court is Defendant Williamsburg Plantation Inc.'s Motion to Dismiss First Amended Class Action Complaint (Doc. #23), filed on February 6, 2009. Plaintiffs filed an Opposition (Doc. #52) on March 6, 2009. Defendants filed a Reply (Doc. #57) on April 2, 2009.
Also before the Court is Defendant The Berkley Group Inc.'s Motion to Dismiss Claims in First Amended Class Action Complaint (Doc. #37), filed on February 16, 2009. Plaintiffs filed an Opposition (Doc. #53) on March 6, 2009. Defendants filed a Reply (Doc. #57) on April 2, 2009.
I. BACKGROUND
Defendants are engaged in the business of the sale, creation, development, and management of timeshare properties throughout the United States. (Notice of Removal (Doc. #1), Ex. A ["Compl."] at 3.) Plaintiffs allege that Defendants are part of the "Berkley Timeshare Business Enterprise" ("BTBE"), a group of such businesses which Plaintiffs allege are a common or joint enterprise, or a partnership. (Id. at 3-4.) Plaintiffs were employed as timeshare salespersons in Las Vegas, Nevada. (Id.) Plaintiffs allege that they and other BTBE salespersons throughout the United States were compensated solely or partially based on commissions and Defendants failed to pay their salespersons overtime, minimum wage, and wages upon discharge as required under applicable state and federal law. (Id. at 4, 9-10.)
Plaintiffs brought suit in Nevada state court, asserting violations of the Fair Labor Standards Act ("FLSA") (count one), failure to pay minimum wage and overtime under Nevada wage and hour laws (count two), failure to pay wages upon discharge under Nevada law (count three), and breach of contract (count four). Plaintiffs bring suit on behalf of themselves and all others similarly situated. Defendants removed the action to this Court and now move to dismiss. Defendants Berkley Vacation Resorts, Inc.; Patriot Resorts, Inc.; Williamsburg Plantation Inc.; and The Berkley Group, Inc. argue that this Court lacks personal jurisdiction over them. Defendants Berkley Vacation Resorts, Inc.; Patriot Resorts, Inc.; Eldorado Resorts Corp.; Tricom Management, Inc.; Daily Management, Inc.; and The Berkley Group, Inc. also argue Plaintiffs fail to state a claim under the FLSA or Nevada wage and hour laws because Plaintiffs have not set forth facts identifying which entity was their employer or joint employer and Plaintiffs fail to state a breach of contract claim against any Defendant other than Eldorado Resorts Corp. because that is the only Defendant with which Plaintiffs have entered into a contract.
These Defendants also argued Plaintiffs' attempt to bring an opt-in class action under the FLSA was incompatible with simultaneously asserting a Rule 23 opt-out class action based on Nevada state law. Defendants have abandoned this argument in their reply brief. Additionally, Defendants moved to strike the Complaint's reference to Nevada Revised Statutes § 608.019 from count two because no private cause of action exists for a violation of this section, and Plaintiffs agree. The Court therefore will grant the motion to dismiss any purported cause of action in the Complaint based on § 608.019.
Plaintiffs respond that this Court has personal jurisdiction over all Defendants because their partner or agent, Eldorado Resorts Corp. ("Eldorado"), has operated in Nevada and those contacts are attributable to the other members of the joint enterprise or partnership. Plaintiffs also argue they adequately have alleged that Defendants are part of an integrated enterprise or partnership, and they need not plead Defendants' relationships with greater specificity at this stage of the proceedings. Plaintiffs contend discovery is needed to determine whether Defendants are a joint enterprise or partnership, and therefore dismissal is premature. Alternatively, Plaintiffs request leave to amend.
II. OBJECTIONS TO EVIDENCE
A. Plaintiffs' Objection
Plaintiffs object to the Court considering the contracts between Plaintiffs and Defendant Eldorado which Defendants attach to their motions to dismiss. Plaintiffs argue they did not attach those contracts to the Complaint or refer to those particular contracts in the Complaint. Defendants respond that the Court may consider the contracts at the motion to dismiss stage because Plaintiffs' breach of contract claim depends on the contracts and Plaintiffs do not dispute the contracts' authenticity.
At the motion to dismiss stage, in addition to the complaint's allegations, the Court may consider undisputedly authentic documents to which the complaint refers extensively or which form the basis of the plaintiffs claims. United States v. Ritchie, 342 F.3d 903, 908 (9th Cir. 2003); Van Buskirk v. Cable News Network, Inc., 284 F.3d 977, 980 (9th Cir. 2002). However, the Court will not consider the attached contracts at this stage of the proceedings. The purpose for which Defendants offer these contracts is to show these are the only contracts Plaintiffs have with any Defendants. To consider these exhibits in conjunction with this motion to dismiss would require the Court to make the factual determination that these, and only these, are the contracts to which Plaintiffs' Complaint refers. Such a finding at the motion to dismiss stage would be inappropriate. Additionally, the parties have not requested the Court convert this into a motion for summary judgment. The Court therefore will not consider the contracts in ruling on the motions to dismiss.
B. Defendants' Objections
Defendants raise a host of objections to evidence Plaintiffs attach to their oppositions to the motions to dismiss. Plaintiffs have not filed a response. However, in offering the exhibits, Plaintiffs requested the Court take judicial notice of them.
The Court may take judicial notice of "matters of public record without converting a motion to dismiss into a motion for summary judgment." Lee v. City of Los Angeles, 250 F.3d 668, 689 (9th Cir. 2001) (quotation omitted). However, the Court may not take judicial notice of a fact that is "'subject to reasonable dispute.'" Id. (quoting Fed.R.Evid. 201(b)). A fact not subject to reasonable dispute is one "(1) generally known within the territorial jurisdiction of the trial court or (2) capable of accurate and ready determination by resort to sources whose accuracy cannot reasonably be questioned." Fed.R.Evid. 201(b). When a court takes judicial notice of a public record, "it may do so not for the truth of the facts recited therein, but for the existence of the [record], which is not subject to reasonable dispute over its authenticity." Lee, 250 F.3d at 690 (quotation omitted).
Most of the exhibits Plaintiffs offer are not matters properly subject to judicial notice. Newspaper advertisements, website downloads, affidavits, and the facts recited therein are not matters of which this Court will take judicial notice. With respect to those exhibits which are subject to judicial notice, such as public filings with the Clark County Assessor or the Florida Secretary of State, the Court will not take judicial notice of the facts recited therein. Plaintiffs did not oppose Defendants' objections to the evidence, such as hearsay and relevance. The Court therefore will not consider for purposes of this motion the identified statements in the various affidavits or the exhibits to which Defendants object.
III. PERSONAL JURISDICTION
"When a defendant moves to dismiss for lack of personal jurisdiction, the plaintiff bears the burden of demonstrating that the court has jurisdiction over the defendant." Pebble Beach Co. v. Caddy, 453 F.3d 1151, 1154 (9th Cir. 2006). Where the issue is before the Court on a motion to dismiss based on affidavits and discovery materials without an evidentiary hearing, the plaintiff must make "a prima facie showing of facts supporting jurisdiction through its pleadings and affidavits to avoid dismissal." Glencore Grain Rotterdam B.V. v. Shivnath Rai Harnarain Co., 284 F.3d 1114, 1119 (9th Cir. 2002). The Court accepts as true any uncontroverted allegations in the complaint and resolves any conflicts between the facts contained in the parties' evidence in the plaintiff's favor. Id. However, for personal jurisdiction purposes, a court "may not assume the truth of allegations in a pleading which are contradicted by affidavit." Alexander v. Circus Circus Enters., Inc., 972 F.2d 261, 262 (9th Cir. 1992) (quotation omitted). The Court must analyze whether personal jurisdiction exists over each defendant separately. Harris Rutsky Co. Ins. Servs., Inc. v. Bell Clements Ltd., 328 F.3d 1122, 1130 (9th Cir. 2003).
To meet its burden, a plaintiff must demonstrate that personal jurisdiction over a defendant is (1) permitted under the applicable state's long-arm statute and (2) that the exercise of jurisdiction does not violate federal due process. Pebble Beach Co., 453 F.3d at 1154. Nevada's long-arm statute permits the exercise of jurisdiction to the limits of constitutional due process. Nev. Rev. Stat. § 14.065(1). As a result, the two requirements collapse into one. To satisfy federal due process standards, a nonresident defendant must have "minimum contacts" with the forum state so that the assertion of jurisdiction does not offend traditional notions of fair play and substantial justice. Pebble Beach Co., 453 F.3d at 1155 (citingInt'l Shoe Co. v. Washington, 326 U.S. 310, 315 (1945)).
A federal district court may exercise either general or specific personal jurisdiction. See Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 414-15 (1984). To establish general personal jurisdiction, the plaintiff must demonstrate the defendant has sufficient contacts to "constitute the kind of continuous and systematic general business contacts that 'approximate physical presence.'" Glencore Grain, 284 F.3d at 1124 (quoting Bancroft Masters. Inc. v. Augusta Nat'l Inc., 223 F.3d 1082, 1086 (9th Cir. 2000), modified, Yahoo! Inc. v. La Ligue Contre Le Racisme Et L'Antisemitisme, 433 F.3d 1199, 1207 (9th Cir. 2006)). Courts consider such factors as whether the defendant makes sales, solicits or engages in business in the state, serves the state's markets, designates an agent for service of process, holds a license, or is incorporated there.Bancroft, 223 F.3d at 1086. "[A] defendant whose contacts are substantial, continuous, and systematic is subject to a court's general jurisdiction even if the suit concerns matters not arising out of his contacts with the forum." Glencore Grain, 284 F.3d at 1123 (citing Helicopteros, 466 U.S. at 415 n. 9).
A nonresident defendant's contacts with the forum state may permit the exercise of specific jurisdiction if: (1) the defendant has performed some act or transaction within the forum or purposefully availed himself of the privileges of conducting activities within the forum, (2) the plaintiff's claim arises out of or results from the defendant's forum-related activities, and (3) the exercise of jurisdiction over the defendant is reasonable. Pebble Beach Co., 453 F.3d at 1155-56. "If any of the three requirements is not satisfied, jurisdiction in the forum would deprive the defendant of due process of law." Omeluk v. Langsten Slip Batbyggeri A/S, 52 F.3d 267, 270 (9th Cir. 1995).
Defendants present affidavits averring that Defendants Berkley Vacation Resorts, Inc.; Patriot Resorts, Inc.; Williamsburg Plantation Inc.; and The Berkley Group, Inc. are incorporated in states other than Nevada; are not qualified to do business in Nevada; have no offices, facilities, telephone listings, or property in Nevada; have not directed any advertising toward Nevada; have no officers, directors, employees, or agents in Nevada; and have not sold goods or services to Nevada residents. (Defs.' Mot. to Dismiss (Doc. #15), Exs. 3, 4; Def. Williamsburg Plantation Inc.'s Mot. to Dismiss (Doc. #23), Aff. of Marc Landau; Def. The Berkley Group Inc.'s Mot. to Dismiss (Doc. #37), Aff. of Marc Landau.) In response, Plaintiffs argue Defendants are joint employers or partners, and thus the in-forum conduct of Defendant Eldorado is attributable to Berkley Vacation Resorts, Inc.; Patriot Resorts, Inc.; Williamsburg Plantation Inc.; and The Berkley Group, Inc. Additionally, Plaintiffs argue Eldorado is their agent.
Plaintiffs' Complaint makes no factual allegations to support either theory. Rather, Plaintiffs make the conclusory allegation that Defendants are engaged in a joint enterprise or partnership. Plaintiffs also present no admissible evidence to meet their burden of establishing any of these Defendants have contacts with Nevada, either directly or through a partner or agent. The Court therefore will grant Defendants' motions to dismiss for lack of personal jurisdiction.
IV. FLSA, Nevada Wage and Hour, and Breach of Contract Claims
In considering a motion to dismiss for failure to state a claim, "all well-pleaded allegations of material fact are taken as true and construed in a light most favorable to the non-moving party." Wyler Summit P'ship v. Turner Broad. Sys., Inc., 135 F.3d 658, 661 (9th Cir. 1998) (citation omitted). However, the Court does not necessarily assume the truth of legal conclusions merely because they are cast in the form of factual allegations in the plaintiff's complaint. See Clegg v. Cult Awareness Network, 18 F.3d 752, 754-55 (9th Cir. 1994). There is a strong presumption against dismissing an action for failure to state a claim. See Gilligan v. Jamco Dev. Corp., 108 F.3d 246, 249 (9th Cir. 1997) (citation omitted). The issue is not whether the plaintiff ultimately will prevail, but whether it may offer evidence in support of its claims. See id. (quoting Scheuer v. Rhodes, 416 U.S. 232, 236 (1974)). A plaintiff must make sufficient factual allegations to establish a plausible entitlement to relief. Bell Atl. Corp. v Twombly, 550 U.S. 544, 555-56 (2007). Such allegations must amount to "more than labels and conclusions, and a formulaic recitation of the elements of a cause of action." Id. at 555.
Plaintiffs argue Twombly's application is limited to the antitrust context, but the Supreme Court since has made it clear that Twombly interpreted and applied Federal Rule of Civil Procedure 8 and hence applies to all civil actions under the Federal Rules of Civil Procedure. Ashcroft v. Iqbal, 129 S. Ct. 1937, 1953 (2009).
The FLSA requires employers to pay a minimum wage and overtime to employees who are employed in an enterprise engaged in commerce. 29 U.S.C. §§ 206, 207. An employer who violates these provisions is liable to the affected employees for their unpaid wages and overtime compensation, as well as for an equal amount as liquidated damages. Id. § 216(b). The FLSA defines "employer" as "any person acting directly or indirectly in the interest of an employer in relation to an employee." Id. § 203(d).
Under the FLSA, two or more employers may employ a person jointly. Bonnette v. Cal. Health Welfare Agency, 704 F.2d 1465, 1469 (9th Cir. 1983), abrogated on other grounds by Garcia v. San Antonio Metro. Transit Auth., 469 U.S. 528, 539 (1985); 29 C.F.R. § 791.2(a). Each joint employer is individually responsible for complying with the FLSA with respect to the entire employment.Bonnette, 704 F.2d at 1469 (citing 29 C.F.R. § 791.2(a)). The Department of Labor's regulation sets forth examples of joint employment situations:
(1) Where there is an arrangement between the employers to share the employee's services, as, for example, to interchange employees; or
(2) Where one employer is acting directly or indirectly in the interest of the other employer (or employers) in relation to the employee; or
(3) Where the employers are not completely disassociated with respect to the employment of a particular employee and may be deemed to share control of the employee, directly or indirectly, by reason of the fact that one employer controls, is controlled by, or is under common control with the other employer.29 C.F.R. § 791.2(b) (footnotes omitted).
The Court applies an "economic reality" test to determine whether a joint employment relationship exists. Torres-Lopez v. May, 111 F.3d 633, 639 (9th Cir. 1997). Under this test, the Court considers all factors relevant to the particular situation to evaluate the economic reality of an alleged joint employment relationship. Id. Among the factors the Court considers are "whether the alleged employer (1) had the power to hire and fire employees, (2) supervised and controlled employee work schedules or conditions of payment, (3) determined the rate and method of payment, and (4) maintained employment records." Moreau v. Air France, 356 F.3d 942, 946-47 (9th Cir. 2004) (quotation omitted). However, the test is not mechanical and these are not the only factors the Court should consider. Bonnette, 704 F.2d at 1470. Ultimately, the determination is "based upon the circumstances of the whole activity." Id. (quotation omitted).
"[T]he concept of joint employment should be defined expansively under the FLSA." Torres-Lopez, 111 F.3d at 639. Whether a party is an employer for purposes of the FLSA is a question of law for the Court. Id. at 638.
Plaintiffs have alleged Defendants are "a common or joint enterprise or partnership that is collectively, jointly and severally liable to all of the putative plaintiffs described herein." (Compl. at 4.) This allegation is conclusory and supported by no factual allegations. The Complaint's only factual allegations are that Defendants all are engaged in the sale of timeshare interests and have similar compensation practices for their salespersons. (Id. at 3-4.) Taking such allegations as true, they do not state a plausible entitlement to relief against any Defendant as any Plaintiff's employer or joint employer. Plaintiffs have not alleged which Defendant is their employer or any facts supporting joint employment by any of the other Defendants. The fact that all Defendants conduct business in the same industry and utilize similar compensation schemes is insufficient to establish joint employer status.
Plaintiffs contend that under Federal Rule of Civil Procedure 8, they need not allege facts supporting the bare allegation of joint enterprise or partnership. However, the Rule "demands more than an unadorned, the-defendant-unlawfully-harmed-me accusation." Ashcroft v. Iqbal, 129 S. Ct. 1937, 1949 (2009). "[N]aked assertion[s] devoid of further factual enhancement" will not suffice. Id. (quotation omitted, second alteration in original). Nor will legal conclusions which are unsupported by factual allegations. Id. Accordingly, Plaintiffs must allege facts which show they plausibly are entitled to relief from each Defendant as an employer or joint employer. Compare Allen v. CH2M-WG, Idaho, LLC, No. 4:08CV422-REB, 2009 WL 1658018, at *3-4 (D. Idaho June 10, 2009) (slip copy) (holding the plaintiff pled sufficient facts to survive a motion to dismiss where the plaintiff alleged that purported joint employer assigned her to work with her employer, set her rate of pay, had authority to dictate the location and manner of her performing her duties, held itself out as being able to respond to and address employee complaints, and was involved in the decision to fire her in retaliation for her workplace safety complaints), with Wood v. TriVita, Inc., No. CV-08-0765-PHX-SRB, 2009 WL 2106291, at *3-4 (D. Ariz. June 22, 2009) (unpublished) (holding plaintiff failed to plead sufficient facts to support amendment joining additional defendants as purported joint employers where the plaintiff alleged the proposed defendants were members of the company's executive team and participated in the decision to classify plaintiffs as exempt from overtime compensation or were these defendants' spouses; lack of factual allegations describing the misclassification process and each defendant's participation therein, combined with lack of factual allegations regarding the power to hire and fire, supervise and control conditions of employment, or determine the rate and method of pay was insufficient). The Court therefore will grant Defendants' motion to dismiss count one, without prejudice for Plaintiffs to amend to plead the requisite facts for any and all Defendants for which they can do so.
For these same reasons, the Court will grant without prejudice Defendants' motion to dismiss Plaintiffs' state law claims. For purposes of Nevada's wage and hour laws, an employer is defined as "'every person having control or custody of any employment, place of employment or any employee.'" Boucher v. Shaw, 196 P.3d 959, 961 (Nev. 2008) (quoting Nev. Rev. Stat. § 608.011). Plaintiffs allege no facts that, if true, plausibly would support a finding that each Defendant had control or custody of Plaintiffs' employment, place of employment, or Plaintiffs. Likewise, Plaintiffs do not allege with which Defendants they have a contractual relationship or any facts which could support extending contractual obligations beyond the parties to any such contract to support their breach of contract claim. See Albert H. Wohlers Co. v. Bartgis, 969 P.2d 949, 959 (Nev. 1998) ("In general, no one is liable upon a contract except those who are parties to it." (quotation omitted)). The Court therefore will grant Defendants' motions to dismiss as to Plaintiffs' state law claims in counts two, three, and four, without prejudice for Plaintiffs to amend to plead the requisite facts for any and all Defendants for which they can do so.
Nevada previously has referred to the "economic reality" test in dismissing both FLSA and Nevada wage and hour claims. Prieur v. D.C.I. Plasma Ctr. of Nev., Inc., 726 P.2d 1372, 1373 (Nev. 1986). However, the Nevada Supreme Court recently stated that "despite mentioning this test to resolve federal FLSA claims inPrieur v. D.C.I. Plasma Center, 102 Nev. 472, 726 P.2d 1372 (1986), we did not adopt that test in relation to the state law claims raised in that case and did not incorporate that test into Nevada's wage and hour law." Boucher, 196 P.3d at 963 n. 27.
V. CONCLUSION
IT IS THEREFORE ORDERED that Defendants' Motion to Dismiss and/or Strike Claims in First Amended Class Action Complaint (Doc. #15) is hereby GRANTED.
IT IS FURTHER ORDERED that Defendant Williamsburg Plantation Inc.'s Motion to Dismiss First Amended Class Action Complaint (Doc. #23) is hereby GRANTED.
IT IS FURTHER ORDERED that Defendant The Berkley Group Inc.'s Motion to Dismiss Claims in First Amended Class Action Complaint (Doc. #37) is hereby GRANTED.
IT IS FURTHER ORDERED that Plaintiffs may file an amended complaint on or before September 4, 2009.