Bonanini v. Kids Behavioral Health of Mont., Inc.

• Decision Date: 05 June 2020
• Docket Number: c/w CV 19-35-BU-BMM,CV 19-33-BU-BMM-KLD (lead case)
• Parties: VALERIE BONANINI, et al., Plaintiffs, v. KIDS BEHAVIORAL HEALTH OF MONTANA, INC., dba ACADIA MONTANA, dba ALTACARE OF MONTANA, Defendants. MONTANA FEDERATION OF PUBLIC EMPLOYEES, Plaintiff, v. KIDS BEHAVIORAL HEALTH OF MONTANA, INC., dba ACADIA MONTANA, dba ALTACARE OF MONTANA, Defendant.
• Court: U.S. District Court — District of Montana

VALERIE BONANINI, et al., Plaintiffs, v. KIDS BEHAVIORAL HEALTH OF MONTANA, INC.,dba ACADIA MONTANA, dba ALTACARE OF MONTANA, Defendants.

MONTANA FEDERATION OF PUBLIC EMPLOYEES, Plaintiff, v. KIDS BEHAVIORAL HEALTH OF MONTANA, INC.,dba ACADIA MONTANA, dba ALTACARE OF MONTANA, Defendant.

CV 19-33-BU-BMM-KLD (lead case)

c/w CV 19-35-BU-BMM

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MONTANA BUTTE DIVISION

June 5, 2020

FINDINGS & RECOMMENDATION

Plaintiffs Montana Federation of Public Employees (the "Union") and several former employees of Defendant Kids Behavioral Health of Montana, Inc. bring this consolidated action seeking to recover unpaid wages and benefits under the Worker Adjustment Retraining and Notification Act, 29 U.S.C. §§ 2101-2109 (the "WARN Act"). This matter comes before the Court now on Defendant's motion to dismiss the Union as a party under Federal Rule of Civil Procedure 12(b)(6) based on lack of standing and, alternatively, the rule against claim splitting. For the reasons discussed below, the Court recommends that Defendant's motion be denied without prejudice as premature, subject to renewal if and when Plaintiffs' proposed class of former employees is certified.

I. Background

On or about July 14, 2019, Acadia Montana Treatment Center, a business enterprise of Defendant located in Butte, Montana, ceased operations. On July 19, 2019, the 30 individually named Plaintiffs filed a putative class action lawsuit against Defendant, asserting WARN Act violations on behalf of themselves and all other similarly situated individuals employed by Defendant at the Acadia Montana facility. (Doc. 1 in 2:19-cv-00033-BMM-KLD). Approximately one week later, on July 25, 2019, the Union filed its own lawsuit asserting similar WARN Act violations "on behalf of itself and its members employed at Acadia Montana." (Doc. 1 in 2:19-cv-00035-SEH).

Plaintiffs in the putative class action subsequently filed an unopposed motion to consolidate both cases pursuant to Fed. R. Civ. P. 42(a). (Doc. 5). The Court granted the motion (Doc. 10), and on October 15, 2019 the individual Plaintiffs, as putative class representatives, and the Union jointly filed an Amended Complaint. (Doc. 13).

As alleged in the Amended Complaint, the Union "is a labor organization that serves as the exclusive bargaining representative of almost all of the employees at Acadia's Butte, Montana facility." (Doc. 13 at ¶ 5). The individual Plaintiffs seek to represent "a class of over 130 employees of Acadia" (Doc. 13 at ¶ 8), which the parties agree includes both union and non-union members.

The Union and putative class representatives are asserting identical WARN Act claims, and the Union's members are all included in the proposed class. Because a union's standing under the WARN Act is representational, Defendant argues the fact that the Union's members "are already being represented in the putative class deprives the Union of standing in this case." (Doc. 25 at 9). Even if the Union does have standing, Defendant asks the Court to exercise its discretion to dismiss the Union under the doctrine against claim splitting.

II. Legal Standard

Lack of statutory standing is appropriately raised in a Rule 12(b)(6) motionto dismiss, while lack of constitutional standing requires dismissal for lack of subject matter jurisdiction under Rule 12(b)(1). Freedom From Religion Found., Inc. v. Weber, 2012 WL 5931899 *2 (D. Mont. Nov. 27, 2012) (citing Maya v. Centex Corp., 658 F.3d 1060, 1067 (9^th Cir. 2011). Under the WARN Act, a union has standing to sue for money damages on behalf of its members. See 29 U.S.C. § 2104(a)(5); United Food & Commercial Workers Union Local 751 v. Brown Group, Inc., 517 U.S. 544 (1996) (holding that the statutory standing conferred on a union by the WARN Act also amounts to standing under Article III of the Constitution). Because this standing is statutorily conferred, Defendant properly moves to dismiss the Union for lack of standing under Rule 12(b)(6). See United Food, 517 U.S. at 547 (noting that motion to dismiss the union for lack of standing was brought in district court under Rule 12(b)(6)).¹

A Rule 12(b)(6) motion to dismiss tests the sufficiency of a complaint. Navarro v. Block, 250 F.3d 729, 732 (9^th Cir. 2001). Dismissal under Rule 12(b)(6)is informed by Rule 8(a)(2), which requires a pleading to contain "a short and plain statement of the claim showing that the pleader is entitled to relief." Ashcroft v. Iqbal, 556 U.S. 662, 677-78 (2009). Dismissal is proper under Fed. R. Civ. P. 12(b)(6) only when the complaint lacks a cognizable legal theory or fails to allege sufficient facts to support a cognizable legal theory. Zixiang Li v. Kerry, 710 F.3d 995, 999 (9^th Cir. 2013) (quoting Mendiondo v. Centinela Hosp. Med. Ctr., 521 F.3d 1097, 1104 (9^th Cir. 2008)).

To survive a 12(b)(6) motion to dismiss, a plaintiff's complaint must contain sufficient facts "to state a facially plausible claim to relief." Shroyer v. New Cingular Wireless Services, Inc., 622 F.3d 1035, 1041 (9^th Cir. 2010). Plausibility is context-specific, requiring courts to draw on judicial experience and common sense when evaluating a complaint. Levitt v. Yelp! Inc., 765 F.3d 1123, 1135 (9^th Cir. 2014). The court accepts as true the allegations of the complaint and construes them in the light most favorable to the nonmoving party. Kneivel v. ESPN, 393 F.3d 1068, 1072 (9^th Cir. 2005). However, "factual allegations must be enough to raise a right to relief above the speculative level." Bell Atlantic Corp. v. Twombly, 550 U.S 544, 555 (2007). Conclusory allegations and unwarranted inferences are insufficient to defeat a motion to dismiss. Johnson v. Lucent Techs. Inc., 653 F.3d 1000, 1010 (9^th Cir. 2011).

III. Discussion

A. Standing

The WARN Act expressly provides that "[a] person seeking to enforce [WARN Act] liability, including a representative of employees . . ., may sue either for such person or other persons similarly situated or both, in any district court of the United States for any district in which the violation is alleged to have occurred, or in which the employer transacts business." 29 U.S.C. § 2104(a)(5). The Supreme Court has interpreted § 2104 to mean that a union has associational standing to bring WARN Act claims on behalf of its members for damages to which the members are entitled. United Food, 517 U.S. 549.

Under the doctrine of associational standing, "an association has standing to bring suit on behalf of its members when: (a) its members would otherwise have standing to sue in their own right; (b) the interests it seeks to protect are germane to the organization's purpose; and (c) neither the claim asserted nor the relief requested requires the participation of the individual members in the lawsuit." Hunt v. Washington State Appl. Adver. Comm'n, 432 U.S. 333, 343 (1977). In reaching its holding in United Food, the Supreme Court concluded that Congress permissibly abrogated the third requirement for associational standing, thereby allowing a union to sue for damages running solely to its members withoutrequiring those individual members to participate in the lawsuit. United Food, 517 U.S. at 558.

Defendant does not take issue with the premise that a union has associational standing to bring suit on behalf of its members under the WARN Act. But where, as here, those individual members have also sued in their own right, Defendant argues a union does not have associational standing to pursue the very same claims on their behalf. Defendant points out that the WARN Act "makes no provision for liability to the union itself," which means that any liability sought by the union is "liability to its union-members, so long as they can be understood to be 'persons similarly situated' for purposes of the Act." United Food, 517 U.S. at 549. See also Preston v. Trucking Co. v. Liquidity Sols., Inc., 392 B.R. 623, 629 (recognizing it was "[a] fundamental premise of the Union Food opinion" that WARN Act claims are owned by and belong to a union's members, rather than the union itself, and holding that union members could therefore assign their WARN Act claims to third parties). Defendant further notes that when a union brings WARN Act claims in its representational capacity under § 2104, it has the authority to litigate and settle those claims on behalf of its members. See e.g. McMillan v. LTV Steel, Inc., 555 F.3d 218, 229 (6^th Cir. 2009) (explaining that several "courts have recognized that a union's settlement of WARN Act claims with the employer precludesemployees covered by the settlement from later bringing a claim against the employer for WARN Act violations"). Because the WARN Act does not provide for liability to the Union itself, Defendant argues the Union's claims are entirely duplicative the claims asserted by the individual Plaintiffs and the putative class members they seek to represent. While a union may have associational standing to assert, litigate, and settle WARN Act claims on behalf of its members, Defendant argues there is no statutory basis for allowing it to do so where, as here, its members have asserted the exact same claims in their own right.

In response, Plaintiffs challenge the notion that the Union's WARN Act claim is entirely derivative of the WARN Act claims held by its employee members. Plaintiffs argue the Union has standing to maintain a WARN Act claim and join suit with its employee members, who likewise have standing to pursue their own WARN Act claims. For support, Plaintiffs rely on the plain language of the WARN Act's standing provision, which states that "[a] person seeking to enforce [WARN Act] liability, including a representative of employees . . ., may sue either for such person or other persons similarly situated or both...." 29 U.S. § 2104(a)(5). As Plaintiffs read it, this section authorizes the Union, or its employee members, "or both," to bring claims under the WARN Act.

To the extent Plaintiffs take the...