Costellow v. Becht Engineering Co. Inc.
| Citation | 597 F.Supp.3d 1089 |
| Decision Date | 21 March 2022 |
| Docket Number | CIVIL ACTION NO. 1:20-CV-00179 |
| Parties | Jon M. COSTELLOW, Individually and on Behalf of All Those Similarly Situated, Plaintiffs, v. BECHT ENGINEERING CO. INC., Becht Field Services LLC, Defendants. |
| Court | U.S. District Court — Eastern District of Texas |
Mark William Frasher, Reaud Morgan & Quinn LLP, Beaumont, TX, for Plaintiff Jon M. Costellow.
Mark William Frasher, John Gerard Werner, Reaud Morgan & Quinn LLP, Beaumont, TX, for Plaintiff All Plaintiffs.
Roytrael Browne, Pro Se.
Richard Creel, Pro Se.
Joseph Gregory Galagaza, Phillip Baggett, Jackson Lewis P.C., Houston, TX, for Defendants.
ORDER DENYING DEFENDANTS’ MOTION TO DISMISS
Before the Court is Defendants’ Becht Engineering Co. ("Becht") and Becht Field Services ("BFS") Motion to Dismiss for Lack of Personal Jurisdiction. [Dkt. 75]. Defendants assert that this Court does not have personal jurisdiction over out-of-state opt-in Plaintiffs who have claims under the Alaska Wage and Hour Law, AK Stat. § 23.10.50, et seq. (2020) and the Fair Labor Standards Act, 29 U.S.C. § 201, et seq. ("FLSA") based on pay practices conducted outside of Texas. For the following reasons, Defendants’ Motion to Dismiss is DENIED .
This case is an FLSA collective action regarding Defendants’ failure to pay overtime wages. On May 7, 2020, Plaintiffs filed their Third Amended Complaint, [Dkt. 4], which lists claims for a nationwide collective action based on Becht's unlawful pay practices.1 Becht did not file any motions to dismiss. Furthermore, Becht did not raise a personal jurisdiction defense in its Answer to the Third Amended Complaint.2 On June 26, 2020, Plaintiffs moved for conditional class certification under the FLSA, seeking a nationwide collective action. Nowhere in its briefing on class certification did Becht raise the defense of personal jurisdiction for claims outside of Texas. On December 9, 2020, the Court issued an order defining the class as those employees who worked in a single facility in Port Arthur, Texas ("Original Class"). [Dkt. 41]. On February 17, 2021, Plaintiffs filed their Motion to Expand Class and Issue Notice. [Dkt. 52]. In it, Becht expressly agreed to an expanded class definition as follows:
Current and former hourly employees of Becht Engineering Co., Inc. or Becht Field Services (referred to as "Becht"): (1) who worked for either company at any location(s) within any state of the United States or the District of Columbia between July 1, 2017 and the present; (2) who were paid the same hourly rate for all hours worked in any workweek including any hours worked over 40 in a workweek; and (3) who were not paid 1.5 times their hourly rate for all hours worked over 40 hours in a work week.
[Dkt. 52]. In line with the agreed motion, the Court entered an order expanding the class on April 6, 2021 ("Second Class"). [Dkt. 60]. Based on the order, Plaintiffs issued notice to Defendants’ out-of-state employees, resulting in an additional fifty-one opt-ins ("Alaska Plaintiffs").3 Additionally, on July 15, 2021, the parties entered into a stipulation ("Stipulation"), which added Becht Field Services ("BFS") as a named party defendant; classified Becht and BFS as joint employers; and waived service on BFS. Pursuant to the Stipulation, on July 19, 2021, Plaintiffs filed their Fourth Amended Complaint, which added the following: (1) added BFS as a party defendant; (2) added Christine Morse as a class representative for the Alaska Plaintiffs; and (3) added additional state law claims under the Alaska Wage and Hour Law, AK Stat. § 23.10.50, et seq. (2020).
On August 23, 2021, Defendants filed the instant Motion to Dismiss, asserting that this Court lacks personal jurisdiction over the claims regarding the Alaska Hour and Wage Law or the claims of the Alaska Plaintiffs against either Defendant because those claims do not have sufficient connection to Texas. Plaintiffs responded on September 20, 2021, [Dkt. 83], and Defendants replied on October 4, 2021 [Dkt. 94]. The motion is now ripe for ruling.
Defendants’ Motion to Dismiss asserts that this Court may not exercise personal jurisdiction over the Alaska Plaintiffs’ claims against either Defendant because their claims lack a connection to Texas. The Court finds that although it may not exercise general personal jurisdiction over Defendants, it may exercise specific personal jurisdiction over Defendants because they waived that defense. Finally, the Court evaluates the doctrine of judicial estoppel, holding that Defendants’ inconsistent representations to the Court bars them from obtaining dismissal.
(a) Personal Jurisdiction
Personal jurisdiction concerns which forum may exercise power over a defendant and acts as a limitation on the forum's authority to adjudicate disputes before it. This limitation is born from the Due Process Clause and is meant to protect a party's liberty interest. Ins. Corp. of Ireland v. Compagnie des Bauxites de Guinee , 456 U.S. 694, 702, 102 S.Ct. 2099, 72 L.Ed.2d 492 (1982). To "exercise personal jurisdiction over a defendant, the procedural requirement of service of summons must be satisfied." Omni Cap. Intern., Ltd. v. Rudolf Wolff & Co., Ltd. , 484 U.S. 97, 104, 108 S.Ct. 404, 98 L.Ed.2d 415 (1987). In federal actions, Federal Rule of Civil Procedure 4 governs service of summons. Id. Rule 4 provides that service is appropriate over a defendant "when authorized by statute" or where the defendant "is subject to the jurisdiction of a court of general jurisdiction in the state where the district court is located." Fed. R. Civ. P. 4(k). The FLSA, which forms the statutory basis for this litigation, does not permit nationwide service of process. Therefore, "service can only be effective to the extent a Texas state court of general jurisdiction could exercise jurisdiction over Defendants." Greinstein v. Fieldcore Servs. Sols., LLC , No. 2:18-CV-208-Z, 2020 WL 6821005, at *3 (N.D. Tex. Nov. 20, 2020). This jurisdiction is determined by Texas’ long arm statute, which permits courts to exercise jurisdiction to the extent permitted by the Due Process Clause of the Fourteenth Amendment. Sayers Constr., LLC v. Timberline Constr. Inc. , 976 F.3d 570, 573 (5th Cir. 2020). The Fourteenth Amendment requires that the defendant have "certain minimum contacts with [the State] such that the maintenance of the suit does not offend ‘traditional notions of fair play and substantial justice.’ " Goodyear Dunlop Tires Operations, S.A. v. Brown , 564 U.S. 915, 923, 131 S.Ct. 2846, 180 L.Ed.2d 796 (2011) (quoting Int'l Shoe Co. v. Washington , 326 U.S. 310, 316, 66 S.Ct. 154, 90 L.Ed. 95 (1945) ). These minimum contacts can be classified into two different types of personal jurisdiction: (1) general; and (2) specific.4 Next, the Court will evaluate both of these types of personal jurisdiction, finding that although the Court may not exercise general jurisdiction over Defendants, the Court may exercise specific jurisdiction over Defendants.
This Court does not maintain general personal jurisdiction over either Defendant. General jurisdiction (all-purpose jurisdiction) permits courts to exercise jurisdiction over corporations whose "continuous corporate operations within a state [are] so substantial and of such a nature as to justify suit against it on causes of action arising from dealings entirely distinct from those activities." Int'l Shoe , 326 U.S. at 318, 66 S.Ct. 154. General jurisdiction exists in the corporate defendant's state of incorporation or principal place of business. Daimler AG v. Bauman , 571 U.S. 117, 134 S. Ct. 746, 760, 187 L.Ed.2d 624 (2014). The principal place of business is the defendant's "nerve center," which is typically its corporate headquarters—"the actual center of direction, control, and coordination." Hertz Corp. v. Friend , 559 U.S. 77, 92–93, 130 S.Ct. 1181, 175 L.Ed.2d 1029 (2010). Courts may also maintain general jurisdiction where the defendant's contacts with the forum are so "continuous and systematic" as to "render them essentially at home in the forum state." BNSF Ry. v. Tyrrell , ––– U.S. ––––, 137 S. Ct. 1549, 1558, 198 L.Ed.2d 36 (2017). This latter set of criteria for finding general jurisdiction is limited to "exceptional case[s]." Id. An example of an "exceptional case" is Perkins v. Benguet Consolidated Mining Company , 342 U.S. 437, 72 S.Ct. 413, 96 L.Ed. 485 (1952). The Court found general jurisdiction over a company that relocated its central headquarters from the Philippines to Ohio during World War II. Id. "Because Ohio then became the center of the corporation's wartime activities, suit was proper there." BNSF Ry. , 137 S. Ct. at 1558. Given the high bar set by the Supreme Court, the Fifth Circuit has found that "[i]t is ... incredibly difficult to establish general jurisdiction in a forum other than the place of incorporation or principal place of business." Monkton Ins. Servs., Ltd. v. Ritter , 768 F.3d 429, 432 (5th Cir. 2014). Merely doing business in the state is not enough. See Daimler , 571 U.S. at 138 n.18, 134 S.Ct. 746. Instead, Courts must assess "the company's local activity not in isolation, but in the context of the company's overall activity." Nunes v. NBCUniversal Media, LLC , 582 F.Supp.3d 387, 396 (E.D. Tex. 2021).
Given the high bar required for general jurisdiction, this Court cannot exercise general jurisdiction over either Defendant. Both Defendants’ principal places of business, their headquarters, are in New Jersey. [Dkt. 72 ¶ 20]. Furthermore, Becht was incorporated in New Jersey and BFS was incorporated in Delaware. [Dkt. 75-2].
Therefore, the Court must determine whether Defendants’ contacts with Texas are so "continuous and systematic" as to "render them essentially at home" in Texas. See BNSF Ry. , 137 S. Ct. at 1558. They are not. Plaintiffs contend that this Court should find general...
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