Senne v. Kan. City Royals Baseball Corp.

• Decision Date: 13 July 2015
• Docket Number: Case No. 14–cv–00608–JCS,Related Case No. 14–cv–03289–JCS
• Citation: 114 F.Supp.3d 906
• Parties: Aaron Senne, et al., Plaintiffs, v. Kansas City Royals Baseball Corp., et al., Defendants.
• Court: U.S. District Court — Northern District of California

114 F.Supp.3d 906

Aaron Senne, et al., Plaintiffs,

v.Kansas City Royals Baseball Corp., et al., Defendants.

Case No. 14–cv–00608–JCS

Related Case No. 14–cv–03289–JCS

United States District Court, N.D. California.

Signed July 13, 2015

Daniel L. Warshaw, Bobby Pouya, Pearson, Simon & Warshaw, LLP, Sherman Oaks, CA, Aaron Michael Zigler, Stephen Matthew Tillery, Korein Tillery, LLC, Garrett Ray Broshuis, Giuseppe Stefano Giardina, St. Louis, MO, Anne Brackett Shaver, Lieff, Cabraser, Heimann & Bernstein LLP, Benjamin Ernest Shiftan, Bruce Lee Simon, Richard Clay Stockton, Thomas Kay Boardman, Pearson, Simon and Warshaw, LLP, San Francisco, CA, Brian P. Murray, Lee Albert, Glancy Prongay & Murray LLP, Rachel Geman, Lieff Cabraser Heimann & Bernstein, LLP, New York, NY, George Andrew Zelcs, Korein Tillery LLC, Chicago, IL, Randall K. Pulliam, Carney Bates & Pulliam, PLLC, Little Rock, AR, for Plaintiffs.

Elise M. Bloom, Neil H. Abramson, Adam M. Lupion, Howard L. Ganz, Rachel Santoro, Proskauer Rose LLP, New York, NY, Laura L. Reathaford, Enzo Der Boghossian, Proskauer Rose LLP, Los Angeles, CA, D. Gregory Valenza, Shaw Valenza LLP, San Francisco, CA, for Defendants.

ORDER DENYING AMENDED MOTION TO DISMISS THE SECOND CONSOLIDATED AMENDED COMPLAINT IN PART FOR LACK OF SUBJECT MATTER JURISDICTION AND FOR FAILURE TO STATE A CLAIM

JOSEPH C. SPERO, Chief Magistrate Judge

I. INTRODUCTION

Plaintiffs in this putative class action are former Minor League baseball players who assert claims under the federal Fair Labor Standards Act ("FLSA") and various state wage and hour laws against Bud Selig (the former Commissioner of Baseball), the Office of the Commissioner of Baseball doing business as Major League Baseball ("MLB") and MLB's member franchises. The Court dismissed eight MLB franchises for lack of personal jurisdiction in its May 20, 2015 Order, leaving twenty-two franchises in the case as defendants (the "Franchise Defendants"). Presently before the Court is the Franchise Defendants' Motion to Dismiss the Second Consolidated Amended Complaint in Part for Lack of Subject Matter Jurisdiction and for Failure to State a Claim ("Motion"). The parties have consented to the jurisdiction of the undersigned United States magistrate judge pursuant to 28 U.S.C. § 636(c). A hearing on the Motion was held on Friday, July 10, 2015 at 9:30 a.m. For the reasons stated below, the Motion is DENIED.

II. BACKGROUND

A. Procedural Background

The original complaint in this putative class action was filed on February 7, 2014. Docket No. 1. After Defendants filed motions to dismiss for lack of personal jurisdiction and to transfer the action to Florida, the Court granted Plaintiffs' request for leave to conduct jurisdictional and venue discovery. Docket No. 144. While Plaintiffs were conducting that discovery, the Court consolidated the case with a later-filed action, Case No. C–14–3289. Docket No. 235. A Class Action Consolidated Amended Complaint was filed on October 24, 2104. Docket No. 243. Defendants were permitted to file amended motions challenging personal jurisdiction and venue with reference to the Class Action Amended Complaint and those motions were heard on February 13, 2015.

At the February 13, 2015 hearing, the Court gave Plaintiffs leave to file a proposed amended consolidated complaint to cure (if they could) possible defects relating to personal jurisdiction. Following the February 13, 2015 motion hearing, Plaintiffs filed a proposed Second Consolidated Amended Complaint ("SCAC") and the parties filed additional briefs addressing Defendants' challenges to personal jurisdiction with reference to the proposed SCAC. On May 20, 2015, the Court denied Defendants' request to transfer the action to Florida and granted in part and denied in part the motions to dismiss for lack of personal jurisdiction, dismissing eight of the thirty franchises from the action. Docket No. 379. It also granted Plaintiffs leave to file the SCAC, which was filed on the same day.

In the meantime, in the months of April and May of 2015, the parties met and conferred to resolve discovery disputes as they moved towards the class certification stage of the case.See Declaration of Adam Lupion in Support of Amended Motion to Dismiss the Second Consolidated Amended Complaint in Part for Lack of Subject Matter Jurisdiction and Failure to State a Claim ("Lupion Decl."), ¶¶ 6–28. In the course of those efforts, it became clear that the parties had a fundamental disagreement as to whether Plaintiffs could assert each of their state law claims against each of the franchises (Plaintiffs' position) or rather, whether Plaintiffs could only assert state law claims where a named plaintiff claimed to have performed work for a particular franchise in that particular state (Defendants' position). See id.

On May 18, 2015, just before the Court issued its order addressing personal jurisdiction and venue, the franchises filed a motion to dismiss challenging Plaintiffs' standing to assert claims under the laws of states where no named Plaintiff was alleged to have performed work for that particular defendant and asserting that these claims also failed under Rule 12(b)(6) of the Federal Rules of Civil Procedure. Docket No. 376. That motion addressed the operative complaint at the time, the Class Action Consolidated Amended Complaint, Docket No. 243. When further meet-and-confer efforts failed, the Franchise Defendants (that is, the twenty-two franchises that remained in the case after the Court's May 20, 2015 Order) filed the instant motion, which brings the same challenges as the previous motion but is amended to address the SCAC.

B. SCAC

In the SCAC, as in the previous complaints in this action, Plaintiffs allege that MLB and the Franchise Defendants failed to pay the players minimum wage or required overtime pay and sometimes failed to pay wages at all. SCAC ¶¶ 568–740. Plaintiffs assert two claims under the FLSA. Id. ¶¶ 568–580. In addition, they assert thirty-one claims as Rule 23 class claims under the wage and hour laws of eight states: California, Florida, Arizona, North Carolina, New York, Pennsylvania, Maryland and Oregon. Id. Plaintiffs propose eight classes that correspond to the states whose laws are invoked. Id. ¶¶ 103–121. Plaintiffs allege, on information and belief, that "all Defendants employed and continue to employ minor leaguers in each of the states enumerated in the Proposed Classes during the relevant time periods ... [and] that each of the Defendants violated the laws in each of the states enumerated in the Proposed Classes due to uncompensated winter off-season work and/or work performed during other portions of the year." Id. ¶ 582; see also Complaint for Violations of Federal and State Wage and Hour Laws, Docket No. 1, ¶ 177 (same).

For each of the classes, there are named Plaintiffs who seek to serve as class representatives on the basis of allegations that they were not adequately compensated for work performed in that state. See id. ¶ 105 (listing 26 named Plaintiffs who seek to represent the California Class); ¶ 108 (listing 29 named Plaintiffs who seek to represent the Florida Class); ¶ 110 (listing 25 named Plaintiffs who seek to represent the Arizona Class); ¶ 112 (listing two named Plaintiffs who seek to represent the North Carolina Class); ¶ 114 (listing nine named Plaintiffs who seek to represent the New York class); ¶ 116 (listing four named Plaintiffs who seek to represent the Pennsylvania Class); ¶ 118 (listing two named Plaintiffs who seek to represent the Maryland class); ¶ 120 (listing three named Plaintiffs who seek to represent the Oregon Class); see also Plaintiffs' Opposition to Defendants' Amended Motion to Dismiss the Second Consolidated Amended Complaint in Part for Lack of Subject Matter Jurisdiction and Failure to State a Claim ("Opposition), Appendix, Chart 2 (States and Corresponding Plaintiffs). In addition, at least one named Plaintiff alleges that he worked for each of the Franchise Defendants. SCAC ¶¶ 203–567; see also Opposition, Appendix, Chart 1 (Defendants and Corresponding Plaintiffs).

C. Contentions of the Parties

1. The Motion

The Franchise Defendants ask the Court to dismiss certain state law causes of action under Rules 12(b)(1) and 12(b)(6) of the Federal Rules of Civil Procedure on the basis that Plaintiffs lack standing as to these claims and/or that they fail to state a claim. Motion at 1. Both arguments are based on the same premise, namely, that in order to have standing to assert a claim against a particular defendant under a particular state's law—or to state such a claim under Rule 12(b)(6) —there must be a named Plaintiff who is alleged to have performed work for that defendant in that state. Id. (citing Perez v. Wells Fargo & Co., Case No. C–14–0989 PJH, 2015 WL 1887354, at *5 (N.D.Cal. Apr. 24, 2015) ). According to the Franchise Defendants, many of Plaintiffs' state law claims fail because while Plaintiffs purport to assert all of the state law claims against all of the Franchise Defendants, there is no named Plaintiff who is alleged to have performed work for some of the franchises in some of those states. Id. at 4.

The Franchise Defendants contend standing is a threshold jurisdictional question and that where it is lacking, the court lacks subject matter jurisdiction over the action. Id. (citing Bruce v. United States, 759 F.2d 755, 757 (9th Cir.1985) ; Righthaven LLC v. Hoehn, 716 F.3d 1166, 1172 (9th Cir.2013) ). Further, standing must be resolved prior to class certification, according to the Franchise Defendants. Id. at 5 (citing Lee v. State of Or., 107 F.3d 1382, 1390 (9th Cir.1997) ). Indeed, the fact that a suit is brought as a class action "adds nothing to the question of standing," they argue, because "even named plaintiffs who represent a class must allege and show that they personally have been injured, not that injury has been suffered by other unidentified members of the class to which they belong and...