Rogers v. Tug Hill Operating, LLC
| Decision Date | 12 April 2022 |
| Docket Number | Civil Action No. 5:21-CV-199 |
| Parties | Lastephen ROGERS, Individually and for Others Similarly Situated, Plaintiff, v. TUG HILL OPERATING, LLC, Defendant. |
| Court | U.S. District Court — Northern District of West Virginia |
Andrew W. Dunlap, Pro Hac Vice, Michael A. Josephson, Pro Hac Vice, Richard M. Schreiber, Pro Hac Vice, Josephson Dunlap LLP, Houston, TX, Anthony J. Majestro, James S. Nelson, Powell & Majestro, PLLC, Richard J. Burch, Pro Hac Vice, Babst Calland Attorneys at Law, Charleston, WV, for Plaintiff.
Erin J. McLaughlin, Buchanan Ingersoll & Rooney PC, Pittsburgh, PA, for Defendant.
Pending before this Court is a Motion to Intervene [Doc. 15] filed by RUSCO Operating, LLC on January 27, 2022. Following a deadline extension, Defendant Tug Hill Operating, LLC filed a Response to Motion to Intervene [Doc. 23] on February 24, 2022. That same day, plaintiff filed a Memorandum in Opposition to Motion to Intervene [Doc. 24]. On March 10, 2022, RUSCO Operating, LLC filed a Reply [Doc. 30].
Additionally, pending before this Court is defendant Tug Hill Operating, LLC's Motion to Dismiss Plaintiff's Complaint Pursuant to Federal Rules of Civil Procedure 12(b)(1), (6), and (7) [Doc. 21] and accompanying Memorandum in Support [Doc. 22], filed on February 24, 2022. Following a deadline extension, plaintiff filed a Response in Opposition [Doc. 31] on March 17, 2022. Defendant Tug Hill Operating, LLC filed a Reply [Doc. 32] on March 24, 2022.
Based on the extensive briefing on both Motions, each is ripe for adjudication. For the reasons contained herein, the Motion to Intervene will be granted, and the Motion to Dismiss will be granted.
Plaintiff Lastephen Rogers ("plaintiff") filed his complaint [Doc. 1] on December 3, 2021, seeking to recover alleged unpaid overtime wages and other damages underthe Fair Labor Standards Act ("FLSA") against defendant Tug Hill Operating, LLC ("defendant Tug Hill"). [Id. at ¶ 1]. Plaintiff brings this actionon behalf of himself and all other similarly situated workers paid by defendant Tug Hill's day-rate system. [Id. at ¶ 9].
According to plaintiff, defendant Tug Hill operates an oil and natural gas exploration and production company operating in West Virginia and Texas. [Id. at 17]. Plaintiff contends that while working for defendant Tug Hill as a drilling and completions consultant, he, along with similarly situated workers, was paid a flat amount for each day worked with no overtime for hours worked in excess of 40 hours in a workweek in violation of the FLSA. [Id. at 9–13].
Non-party RUSCO Operating, LLC ("RUSCO") operates an online platform ("the application" or "the app"), which is used by oil and gas operators and independent contractors who provide freelance services for those operators. [Doc. 15-1 at 1–2]. According to RUSCO, its app is used to facilitate and connect independent contractors to particular projects run by oil and gas operators nationwide. [Id.]. Beyond the matchmaking function between operators and independent contractors, RUSCO's app also provides independent contractors with administrative functions like payment, insurance, and record-keeping. [Id. at 4]. After a contractor, like plaintiff, performs work, RUSCO then pays the contractor in accordance with an invoice submitted by the contractor, less a percentage known as the "split" that compensates RUSCO for its service. [Id.]. Operators like defendant then pay RUSCO the balance invoiced. [Id.].
Underlying the foregoing relationship between plaintiff and RUSCO is an independent contractor agreement, which states that the agreement between RUSCO and plaintiff "constitutes a binding agreement between you, an independent professional ... and [RUSCO] ... governing your use of the Service ... to provide freelance services to third party companies." See [Doc. 15-4]. Throughout the independent contractor agreement, plaintiff confers several benefits on defendant and RUSCO, including:
• Rights regarding the work to be performed: "You and [Tug Hill] solely negotiate and determine (x) when and where you perform Projects, (y) what you wear while performing projects, and (z) any additional bonuses or gratuities arising out of such Projects."
• Waiver of workers compensation: "As an independent professional, you are assuming the responsibilities of an employer for the purpose of a Project, and you hereby affirm you are not entitled to, and are hereby waiving, any claim for workers compensation benefits under either [RUSCO]'s or [Tug Hill's] workers' compensation insurance policy."
• Confidentiality: "You must keep [RUSCO]'s confidential information absolutely confidential, except as required or provided by law, including but not limited to information about other [Tug Hill] Projects ..."
[Id.]. Plaintiff also agreed to abide by certain terms of service, which contain a dispute resolution provision; importantly, RUSCO's dispute resolution provision reads as follows:
Generally, in the interest of resolving disputes between you and [RUSCO] in the most expedient and cost effective manner, you and [RUSCO] agree that every dispute arising in connection with these Terms will be resolved by binding arbitration—This agreement to arbitrate disputes includes all claims arising out of or relating to any aspect of these Terms, whether based in contract, tort, statute, fraud, misrepresentation, or any other legal theory, and regardless of whether a claim arises during or after the termination of these Terms. YOU UNDERSTAND AND AGREE THAT, BY ENTERING INTO THESE TERMS, YOU AND [RUSCO] ARE EACH WAIVING THE RIGHT TO A TRIAL BY JURY OR TO PARTICIPATE IN A CLASS ACTION.
[Doc. 15-6]. Further, the terms state that claims will be administered by and in accordance with the Rules of the American Arbitration Association, and that "[t]he arbitrator [shall have] exclusive authority to resolve any dispute relating to the interpretation, applicability, or enforceability of this binding arbitration agreement." [Id.].
"The Fourth Circuit favors ‘liberal intervention’ and preventing the ‘problem of absent interested parties.’ " Deutsche Bank v. Mountain West Hospitality, LLC , 2017 WL 6420280, at *2 (N.D. W. Va. Dec. 15, 2017) (Keeley, J.) Friend v. REMAC Am., Inc. , 2014 WL 2440438, at *1 (Groh, J.) . "Prospective intervenors bear the burden of demonstrating their right to intervene." Deutsche Bank , 2017 WL 6420280, at *2 (citing In re Monitronics Int'l, Inc. , 2015 WL 12748330, at *1 (N.D. W. Va. June 3, 2015) (Keeley, J.) (citing Richman v. First Woman's Bank , 104 F.3d 654, 658 (4th Cir. 1997) )). Under Fed. R. Civ. Pro. 24, this Court has discretion to allow intervention either as a matter of right or on a permissive basis. Stuart v. Huff , 706 F.3d 345, 349 (4th Cir. 2013).
In the Fourth Circuit, "liberal intervention is desirable to dispose of as much of a controversy ‘involving as many apparently concerned persons as is compatible with efficiency and due process.’ " Feller , 802 F.2d at 729 (4th Cir. 1986) (quoting Nuesse v. Camp , 385 F.2d 694, 700 (D.C. Cir. 1967) ).
This Court must grant a timely motion to intervene if the movant "claims an interest relating to the property or transaction that is the subject of the action and is so situated that disposing of the action may as a practical matter impair or impede the movant's ability to protect its interests, unless existing parties adequately represent that interest." Fed. R. Civ. Pro. 24(a). The Fourth Circuit recognizes that, to intervene as a matter of right, the movant must satisfy four requirements:
(1) the application must be timely; (2) the applicant must have an interest in the subject matter sufficient to merit intervention; (3) the denial of intervention would impair or impede the applicant's ability to protect its interest; and (4) the applicant's interest is not adequately represented by the existing parties to the litigation.
Scardelletti v. Debarr , 265 F.3d 195, 202 (4th Cir. 2001).
Under either Rule 24(a) or 24(b), the application for intervention must be timely. See Fed. R. Civ. Pro. 24(a) & 24(b) (requiring "timely application"); Gould v. Alleco, Inc. , 883 F.2d 281, 286 (4th Cir. 1989) (). Although Rule 24 "requires that the motion to intervene be ‘timely,’ it does not attempt to define the term or specify rigid time limits." United States v. South Bend Community Sch. Corp. , 710 F.2d 394, 396 (7th Cir. 1983) ; see Black v. Central Motor Lines Inc. , 500 F.2d 407, 408 (4th Cir. 1974) (). "The purpose of the requirement is to prevent a tardy intervenor from derailing a lawsuit within sight of the terminal." South Bend , 710 F.2d at 396. "To determine whether an application for intervention is timely, we examine the following factors: how far the suit has progressed, the prejudice that delay might cause other parties, and the reason for the tardiness in moving to intervene." Gould , 883 F.2d at 286. Where intervention is of right, "the timeliness requirement of Rule 24 should not be as strictly enforced as in a case where intervention is only permissive." Brink v. DaLesio , 667 F.2d 420, 428 (4th Cir. 1981).
A potential intervenor's interest in the subject matter of the litigation must be "a significantly protectable interest." Teague v. Bakker , 931 F.2d 259, 261 (4th Cir. 1991) (citations omitted). An interest is a "significantly protectable interest in an...
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