Wuest v. Cal. Healthcare W.

• Decision Date: 18 September 2012
• Docket Number: 3:11-CV-00855-LRH-VPC
• Parties: MICHELLE WUEST, on behalf of herself and other persons similarly situated, Plaintiff, v. CALIFORNIA HEALTHCARE WEST, a California corporation; ST. MARY'S REGIONAL HEALTH CENTER, an unknown Nevada entity; and DOES 1-50 Inclusive Defendants.
• Court: U.S. District Court — District of Nevada

MICHELLE WUEST, on behalf of herself and other persons similarly situated, Plaintiff,

v.CALIFORNIA HEALTHCARE WEST, a California corporation; ST. MARY'S REGIONAL HEALTH CENTER,an unknown Nevada entity; and DOES 1-50 Inclusive Defendants.

3:11-CV-00855-LRH-VPC

UNITED STATES DISTRICT COURT DISTRICT OF NEVADA

Dated: September 18, 2012

ORDER

Before the court is Defendants' Motion to Dismiss the First Amended Complaint (#33¹ ). Plaintiff filed an opposition (#38), to which Defendants replied (#39).

I. Facts and Procedural History

This is a putative class action brought by an employee of St. Mary's Regional Health Center ("St. Mary's") involving allegations of unlawful activities in the payment and calculation of wages and overtime. Plaintiff is a "Surgical Tech" employed by St. Mary's. The defendants are St. Mary's itself and St. Mary's corporate parent, California Healthcare West ("CHW").

In the First Amended Complaint, Plaintiff alleges four causes of action for violations of the Fair Labor Standards Act ("FLSA") and Nevada minimum-wage, overtime, and waiting-time statutes. First, Plaintiff alleges that she was paid less than minimum wage for stand-by and on-call time (the "minimum-wage claim"). Second, Plaintiff alleges that she was not paid the proper overtime premium for stand-by and on-call hours (the "overtime claim"). Third, Plaintiff alleges that the overtime premium rate was calculated incorrectly to her detriment (the "calculation claim"). And fourth, Plaintiff alleges that Defendants' overtime compensation scheme is insufficient to satisfy Nevada law (the "8/80 claim"). Plaintiff also requests waiting-time penalties (Nevada statutory penalties for making former employees wait too long for their due wages) for employees separated from Defendants' employ within the last three years.

Defendants now move to dismiss in part the First Amended Complaint for failure to state a claim under Rule 12(b)(6).

II. Legal Standard

Defendants seek dismissal of the complaint pursuant to Federal Rule of Civil Procedure 12(b)(6). To survive a motion to dismiss for failure to state a claim, a complaint must satisfy the Federal Rule of Civil Procedure 8(a)(2) notice pleading standard. See Mendiondo v. Centinela Hosp. Med. Ctr., 521 F.3d 1097, 1103 (9th Cir. 2008). A complaint must contain "a short and plain statement of the claim showing that the pleader is entitled to relief." Fed. R. Civ. P. 8(a)(2). The Rule 8(a)(2) pleading standard does not require detailed factual allegations; however, a pleading that offers only "labels and conclusions" or "a formulaic recitation of the elements of a cause of action" will not suffice. Ashcroft v. Iqbal, 129 S. Ct. 1937, 1949 (2009) (quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007)).

Furthermore, Rule 8(a)(2) requires a complaint to "contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face." Id. at 1949 (internal quotation marks omitted). A claim has facial plausibility when the pleaded factual content allows the court to draw the reasonable inference, based on the court's judicial experience and common sense, that the defendant is liable for the misconduct alleged. See id. at 1949-50. "The plausibility standard is not akin to a probabilityrequirement, but it asks for more than a sheer possibility that a defendant has acted unlawfully. Where a complaint pleads facts that are merely consistent with a defendant's liability, it stops short of the line between possibility and plausibility of entitlement to relief." Id. at 1949 (internal quotation marks and citation omitted).

In reviewing a motion to dismiss, the court accepts the facts alleged in the complaint as true. Id. (citation omitted). However, "bare assertions . . . amount[ing] to nothing more than a formulaic recitation of the elements of a . . . claim . . . are not entitled to an assumption of truth." Moss v. U.S. Secret Serv., 572 F.3d 962, 969 (9th Cir. 2009) (quoting Iqbal, 129 S. Ct. at 1951) (alteration in original) (internal quotation marks omitted). The court discounts these allegations because they do "nothing more than state a legal conclusion - even if that conclusion is cast in the form of a factual allegation." Id. (citing Iqbal, 129 S. Ct. at 1951.) "In sum, for a complaint to survive a motion to dismiss, the non-conclusory 'factual content,' and reasonable inferences from that content, must be plausibly suggestive of a claim entitling the plaintiff to relief." Id. (quoting Iqbal, 129 S. Ct. at 1949).

III. Discussion

A. The minimum-wage, overtime, and calculation claims

Defendants object to Plaintiff's minimum-wage, overtime, and calculation claims based on a "fundamental" conflict between two ways of creating a class. (Defendants' Motion to Dismiss (#33) p. 3:16.) One way of creating a class is to use an "opt-out" mechanism: the court excludes potential class members if they request exclusion. This is the method adopted under Rule 23 of the Federal Rules of Civil Procedure.² Another way of creating a class is to use an "opt-in" mechanism: each potential class member must affirmatively request to join the class. This is the method adopted by § 216(b) of the FLSA.³

Here, Plaintiff invokes both the opt-out method and the opt-in method based on the sameoperative facts. Plaintiff's use of the opt-in method stems from her claims under the FLSA, and Plaintiff's use of the opt-out method stems from state law claims reached through the operation of Rule 23.⁴ However, as the governing state law largely mimics the standards set forth in the FLSA, the operative facts giving rise to both the FLSA claims and the state law claims are effectively identical. Compare, for example, 29 U.S.C. § 207 (defining the overtime wage rate at 1.5 times the employee's regular rate) with N.R.S. § 608.018 (same). Defendants contend that Plaintiff's use of both class-creation methods creates potential procedural conflicts and runs contrary to Congress's intent in enacting § 216(b). Therefore, Defendants conclude, Plaintiff's state law claims must be dismissed.

The court disagrees. First, the procedural dangers that Defendants warn of are not present here. Defendants hypothesize a scenario in which there are more individuals in the Rule 23 class than in the FLSA class, in which case "[t]he court might then be in a position in which declining supplemental jurisdiction would be appropriate, given that the state law claims could be said substantatially to predominate over the federal claims." Williams v. Trendwest Resorts, Inc., 2007 WL 2429149 *3 (D. Nev. 2007) (quoting Leuthold v. Destination America, Inc., 224 F.R.D. 462, 469-70 (N.D. Cal. 2004). But Plaintiff's state law claims-and consequently the potential Rule 23 class-are not before this court pursuant to an exercise of supplemental federal jurisdiction. See 28 U.S.C. § 1367. Rather, these claims are before the court under the Class Action Fairness Act ("CAFA"), 28 U.S.C. § 1332(d). The procedural difficulties envisioned by Defendants are not implicated by this sort of jurisdiction. See also Knepper v. Rite Aid Corp., 675 F.3d 249, 261 (3d Cir. 2012) ("[I]ndependent jurisidction exists over plaintiffs' claims under CAFA, which provides no statutory basis for declining jurisidiction in this instance.").

Second, Defendants argue that allowing both opt-in and opt-out claims frustrates Congress's intent. For example, Defendants suggest that:

[i]t is clear that Congress labored to create an opt-in scheme when it created Section 216(b) [of the FLSA] specifically to alleviate the fear that absent individuals would have their rights litigated without their input or knowledge. To allow a Section 216(b) opt-in action to proceed accompanied by a Rule 23 opt-out state law class action claim would essentially nullify Congress's intent in crafting Section 216(b) and eviscerate the purpose of Section 216(b)'s opt-in requirement.

Williams, 2007 WL 2429149 at *4 (quoting Otto v. Pocono Health System, 457 F. Supp. 2d 522, 523-24 (M.D. Penn. 2006)). In Knepper, the Third Circuit thoroughly debunked this worry. Undertaking a detailed review of the FLSA's legislative history, the Knepper court demonstrated that § 216(b) was enacted in 1947 against a background of two exotic (to the modern jurisprudential mind) procedural mechanisms. The first such mechanism was the availability of "representative actions," in which a plaintiff who did not himself have a claim-like a union official-filed a class action on behalf of aggrieved employees.⁵ 675 F.3d at 255-56. The second mechanism was a procedure called "one-way" intervention, in which class members could join a class after judgment had been reached. This permitted plaintiffs to "sit out an action, choosing to opt in and be bound by the judgment only after a favorable outcome." Id. at 255. The opt-in strategy was a way to curtail litigation by union officials as well as to force potential class members to join the class earlier rather than later. Id. at 260. Consequently, the FLSA's opt-in method of class creation is not a counterpoint to Rule 23's opt-out method-nor could it be, since opt-out actions did not exist at the time. Id. Therefore, the presence of opt-out claims along with opt-in claims does not frustrate congressional intent.⁶

Finally, Defendants suggest that the weight of authority falls on the side of dismissal. Though cases in this District have gone both ways,⁷ the cases resulting in dismissal are distinguishable. In Williams v. Trendwest Resorts, for instance, the court considered a California statute that did not create independent substantive rights but rather "borrowed" those of the FLSA. 2007 WL 2429149 at *2. Here, in contrast, the Nevada statutes at issue create independent substantive rights (though those rights happen to be similar to those created by the FLSA). In both Fetrow-Fix v. Harrah's Entertainment and Busk v. Integrity Staffing Solutions, the court treated the...