Carlberg v. Guam Indus. Servs. Dba Guam Shipyard
| Decision Date | 30 December 2016 |
| Docket Number | CIVIL CASE NO. 14-00002 |
| Parties | RUSS CARLBERG, ROEL D. DACASIN, REYNALDO S. GALVEZ, DELMARIO R. CORTEZ, and GARY CHANG, Plaintiffs, v. GUAM INDUSTRIAL SERVICES dba GUAM SHIPYARD and MATHEWS POTHEN, Personally, Defendants. |
| Court | U.S. District Court — District of Guam |
Before the court is Guam Industrial Services dba Guam Shipyard ("Guam Shipyard") and Mathew Pothen's ("Pothen") (collectively "Defendants") Motion to Dismiss the Amended Complaint's second and third causes of action for gross negligence and negligence per se, and to strike Plaintiffs' request for punitive damages. Mot. Dismiss, ECF No. 101. After reviewing the parties' submissions, and relevant caselaw and authority, and having heard argument from counsel on the matter, the court hereby GRANTS Defendants' Motion, and STRIKES Plaintiffs' request for punitive damages
On January 31, 2014, Russ Carlberg, Roel D. Dacasin, Reynaldo S. Galvez, Delmario R. Cortez, and Gary Chang ("Plaintiffs") filed a Class Action Complaint ("Complaint") alleging two causes of action: (1) a claim for relief under the Worker Adjustment and Retraining Notification Act ("WARN Act" or "Act"), 29 U.S.C. §§ 2101-2109, and (2) gross negligence. Compl. at ¶¶ 1, 24-45, ECF No. 1. Plaintiffs' prayer for relief sought "lost wages and benefits in an amount exceeding . . . $2,000,000.00[] with interest and costs." Compl. ¶ 46. Plaintiffs also sought "punitive damages in the amount of three . . . times actual damages but in no event less than . . . $6,000,000.00[]." Compl. ¶ 46, ECF No. 1.
On March 20, 2014, Plaintiffs filed a Request for Entry of Default. Req. Entry of Default, ECF No. 5. Defendants opposed the request on March 25, 2014, arguing that Plaintiffs "failed to effectuate proper service upon Defendants." Not. Obj. Req. Entry of Default, App. at 1-2, ECF No. 8. This court denied entry of default on March 26, 2014, because the summonses did not comply with Federal Rule of Civil Procedure (FRCP) 4(a). Order, ECF No. 10.
On April 16, 2014, Defendants filed their first Motion to Dismiss pursuant to FRCP 12(b)(6). Mot Dismiss (Apr. 16, 2014), ECF No. 16. Defendants first contended that the WARN Act claim against Defendant Pothen failed because he was not an employer within the meaning of the WARN Act. Id. at 2. Next, Defendants asserted that the gross negligence claim merely restated the Warn Act Claim, which "amount[ed] to a prohibited claim for punitive damages under WARN." Id. at 2, 8. Finally, Defendants challenged this court's subject matter jurisdiction over the gross negligence claim because it did not arise under federal law. Id. at 14.
Plaintiffs opposed the Motion on May 30, 2014, arguing (1) that Defendants waived their ability to file a FRCP 12(b)(6) Motion, (2) that their claims met FRCP 8's pleading requirements, (3) that gross negligence was properly pled, and (4) that this court had supplemental jurisdiction over Plaintiffs' gross negligence claim. See Opp'n Mot. Dismiss (May30, 2014) at 2-9, ECF No. 27. Plaintiffs conceded that a WARN Act claim could not be substantiated against Pothen personally, and also that the WARN Act does not provide for punitive damages, but stressed that a claim for gross negligence allows the recovery of punitive damages. Id. at 6-7.
Defendants filed a Reply on June 16, 2014. Reply (June 16, 2014), ECF No. 30. Defendants reiterated their initial arguments, but also raised, for the first time, arguments that the gross negligence claim should be dismissed because Plaintiffs (1) failed to articulate a legal duty recognized by the courts of Guam and (2) failed to allege sufficient facts that state a gross negligence claim. Id. at 4-8. The Reply also asked this court to decline supplemental jurisdiction over the gross negligence claim because it was a novel and complex issue of first impression for Guam under 13 U.S.C. § 1367(c)(1). Id. at 8. Defendants also suggested that Plaintiffs amend their WARN Act claim to omit references to Pothen personally, and objected to any assertion that Defendants waived their right to an FRCP 12(b)(6) motion. Id. at 10-12.
On August 11, 2014, this court ordered supplemental briefing on the issues of whether "Plaintiffs (1) failed to articulate a legal duty recognized by the courts of Guam and (2) failed to allege sufficient facts that state a gross negligence claim." Order at 1, ECF No. 31 (citation omitted). Plaintiffs' Supplemental Response to Defendants' Reply was filed on September 10, 2014, and asserted that Defendants' duty was conferred by the WARN Act through the doctrine of negligence per se, and existed by virtue of Defendants' "fiduciary duty" to Plaintiffs. Supp. Response to Reply at 2-5, ECF No. 37 (citations and internal quotation marks omitted). Additionally, Plaintiffs contended that their negligence claim was permitted due to Plaintiffs' right to common law remedies against Defendants for willful or wanted acts. Supp. Response to Reply at 2-5, ECF No. 37 (citations and internal quotation marks omitted). Plaintiffs alsorequested the issue regarding the legal duty owed by Defendants to Plaintiffs to be certified to the Supreme Court of Guam, and urged that they sufficiently pleaded gross negligence. Id. at 5-7.
Defendants filed their Reply to Plaintiffs' Supplemental Response on October 15, 2014, arguing that no caselaw supports the existence of the duties alleged by Plaintiffs, that Plaintiffs' "fiduciary duty" argument was misplaced, and that Plaintiffs' claim could not be saved by virtue of turning to a negligence per se argument because Plaintiffs did not plead the elements of negligence per se. Def's Reply to Pl's Supp. Briefing 3-7, ECF No. 67. Moreover, Defendants reiterated that this court decline supplemental jurisdiction over either a gross negligence or negligence per se claim because those claims are novel and complex issues of state law, and asserted the WARN Act claim against Pothen failed because he is not an "employer" for purposes of the WARN Act. Id. at 7-9.
On September 9, 2014, Defendants filed a Motion to Dismiss pursuant to FRCP 12(b)(1), maintaining that the WARN Act is inapplicable to Guam. Mot. Dismiss (Sept. 9, 2014) at 2, ECF No. 35. Plaintiffs opposed the Motion on October 7, 2014, contending that the statutory language, corresponding regulations, history, and purpose of the WARN Act all mandated its application to Guam. Opp'n to Rule 12(b)(1) Motion at 1 (Oct. 7, 2014), ECF No. 64. Defendants' Reply was filed on November 4, 2014, reiterating that the Act refers only to the 50 states and not to the U.S. territories. Reply at 3 (Nov. 4, 2014), ECF No. 76.
On March 25, 2016, this court issued an Order addressing Defendants' first Motion to Dismiss (pursuant to FRCP 12(b)(6)) and their second Motion to Dismiss (pursuant to FRCP (12(b)(1)). Order, ECF No. 92. This court first determined it had subject matter jurisdictionover Plaintiffs' WARN Act claim because the WARN Act is applicable to Guam. Id. at 7. Second, the court granted Plaintiffs' leave to amend their Complaint to remove the WARN Act claim against Pothen. Id. at 8. Finally, this court did not reach the merits of Defendants' arguments regarding the absence of duty for negligence purposes, but rather ordered "Plaintiffs to clarify their intent in proceeding with either the gross negligence or negligence per se claims" by amending their Complaint. Id. at 9-10.
On April 9, 2016, Plaintiffs filed an Amended Class Action Complaint and Jury Demand. Am. Compl., ECF No. 98. The Complaint sets forth three causes of action: (1) a "Claim for Relief Under WARN Against Defendant Guam Shipyard;" (2) a claim for "Gross Negligence Against Defendants Guam Shipyard and Mathews Pothen," and (3) a claim for "Negligence Per Se Against Defendants Guam Shipyard and Mathews Pothen." Id. at ¶¶ 25-59 (emphasis omitted). Like the initial Complaint, the prayer for relief in the Amended Complaint seeks "lost wages and benefits in an amount exceeding . . . $2,000,000.00[] with interest and costs," and "punitive damages in the amount of three . . . times actual damages but in no event less than . . . $6,000,000.00[]." Am. Compl. at 13, ECF No. 98.
Defendants moved to dismiss the Amended Complaint on April 22, 2016. Mot. Dismiss, ECF No. 101. Plaintiffs opposed the motion on May 27, 2016. Opp'n, at 2-13, ECF No. 107. Defendants filed their Reply on June 17, 2016. Reply, ECF No. 110
Plaintiffs were former full-time employees of Defendant Guam Shipyard, and worked at Guam Shipyard's ship repair facility located at Apra Harbor in Santa Rita, Guam. Am. Compl. at ¶¶ 11-16, ECF No. 98.
Guam Shipyard employed more than 100 full-time employees as of October 15, 2013,and performed "general pier-side ship repair and dry docking [activities] for various customers including the United States Navy and other clients such as Military Sea Lift Command." Id. at ¶ 17. Additionally, Guam Shipyard provided "other industrial and technical operations throughout Guam," including servicing air conditioning compressors and condensers, piping and ventilation systems, and maintaining alarm systems. Id. ¶¶ 16-22. Defendant Mathews Pothen is the President of Guam Shipyard. Id. ¶ 24.
On or about March 20, 2013, the Military Sealift Command ("MSC") provided notice that it intended to issue a ship repair solicitation as part of solicitation number N00033-13-R-7509, to issue a ship...
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