Miller v. Infinite Percent Partners LLC

[3] 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA [6] 7 LISA MILLER, Case No. 20-cv-02253-HSG 8 Plaintiff, ORDER GRANTING MOTION TO DISMISS 9 v. Re: Dkt. No. 34 10 INFINITE PERCENT PARTNERS LLC, et al., [11] Defendants. [12] 13 Pending before the Court are Defendants’ Motion to Dismiss, Dkt. No. 34, and Plaintiff’s 14 Motion for Partial Summary Judgment, Dkt. No. 32. Plaintiff also requests leave to amend her 15 complaint. Dkt. No. 46. For the following reasons, the motion to dismiss is GRANTED, and the 16 request for leave to amend is GRANTED IN PART and DENIED IN PART. 17 I. BACKGROUND 18 Plaintiff, Dr. Lisa Miller, is a naturopathic medical doctor with a medical practice in the 19 Bay Area. Dkt. No. 1 (“Compl.”) ¶ 13. In March 2019, Defendant Infinite Percent Partners’ 20 (“IPP”) Chief Operating Officer, Michelle Van Otten, approached Plaintiff about employing her as 21 IPP’s Chief Medical Officer with a focus on scientific cannabis research. Id. ¶ 15. Plaintiff 22 alleges that Defendants asked her to join their start up cannabis operation either as a consultant or 23 employee. Id. ¶ 16. Plaintiff further alleges that Defendant Steve Koskie, CEO of IPP, offered 24 her an annual salary of $200,000 as a full-time employee, which she accepted. Id. ¶ 17. 25 Plaintiff began working for Defendants sometime in June or July 2019. Compl. ¶¶ 17-18. 26 Plaintiff also began to reduce her medical practice in anticipation of full-time employment with 27 Defendants. Id. ¶ 19. On July 23, 2019, Plaintiff informed Van Otten that she was signing escrow 1 Beginning in August 2019 and continuing until December 2019, Plaintiff complained 2 about Defendants’ failure to pay her. Id. ¶¶ 21-26. On January 6, 2020, Koskie terminated 3 Defendants’ relationship with Plaintiff by informing her that they were “moving in a different 4 direction.” Id. ¶ 27. 5 Plaintiff contends that she relied to her detriment on Defendants’ promises of an annual 6 salary, medical benefits, and equity. Plaintiff alleges causes of action for (a) Violation of the Fair 7 Labor Standards Act’s (“FLSA”) anti-retaliation provision; (b) Violation of California Labor Code 8 section 1102.5; (c) Breach of Contract; (d) Promissory Estoppel; (e) Estoppel by Conduct; (f) 9 Non-Payment of Wages; and (g) Failure to Provide Itemized Wage Statements. Id. ¶¶ 28-56. 10 II. LEGAL STANDARD 11 Federal Rule of Civil Procedure 8(a) requires that a complaint contain “a short and plain 12 statement of the claim showing that the pleader is entitled to relief[.]” A defendant may move to 13 dismiss a complaint for failing to state a claim upon which relief can be granted under Federal 14 Rule of Civil Procedure 12(b)(6). “Dismissal under Rule 12(b)(6) is appropriate only where the 15 complaint lacks a cognizable legal theory or sufficient facts to support a cognizable legal theory.” 16 Mendiondo v. Centinela Hosp. Med. Ctr., 521 F.3d 1097, 1104 (9th Cir. 2008). To survive a Rule 17 12(b)(6) motion, a plaintiff must plead “enough facts to state a claim to relief that is plausible on 18 its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). A claim is facially plausible 19 when a plaintiff pleads “factual content that allows the court to draw the reasonable inference that 20 the defendant is liable for the misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). 21 In reviewing the plausibility of a complaint, courts “accept factual allegations in the 22 complaint as true and construe the pleadings in the light most favorable to the nonmoving party.” 23 Manzarek v. St. Paul Fire & Marine Ins. Co., 519 F.3d 1025, 1031 (9th Cir. 2008). Nonetheless, 24 Courts do not “accept as true allegations that are merely conclusory, unwarranted deductions of 25 fact, or unreasonable inferences.” In re Gilead Scis. Sec. Litig., 536 F.3d 1049, 1055 (9th Cir. 26 2008). And even where facts are accepted as true, “a plaintiff may plead [him]self out of court” if 27 he “plead[s] facts which establish that he cannot prevail on his . . . claim.” Weisbuch v. Cnty. of 1 If dismissal is appropriate under Rule 12(b)(6), a court “should grant leave to amend even 2 if no request to amend the pleading was made, unless it determines that the pleading could not 3 possibly be cured by the allegation of other facts.” Lopez v. Smith, 203 F.3d 1122, 1130 (9th Cir. 4 2000) (quotation marks and citation omitted). 5 A defendant may move for dismissal on grounds that the court lacks subject matter 6 jurisdiction over the action. Fed. R. Civ. P. 12(b)(1). It is the plaintiff’s burden to establish 7 subject matter jurisdiction. See Ass’n of Am. Med. Colls. v. U.S., 217 F.3d 770 , 778-79 (9th Cir. 8 2000); Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 376-78 (1994). “A Rule 9 12(b)(1) jurisdictional attack may be facial or factual.” Safe Air for Everyone v. Meyer, 373 F.3d 10 1035, 1039 (9th Cir. 2004) (citing White v. Lee, 227 F.3d 1214, 1242 (9th Cir. 2000)). A facial 11 attack “asserts that the allegations contained in a complaint are insufficient on their face to invoke 12 federal jurisdiction.” Id. A factual attack “disputes the truth of the allegations that, by themselves, 13 would otherwise invoke federal jurisdiction.” Id. 14 III. DISCUSSION 15 A. Motion To Dismiss 16 Defendants argue that Plaintiff fails to allege protected activity under the FLSA, and that 17 her claim under the FLSA’s anti-retaliation provision should thus be dismissed. Dkt. No. 34 18 (“Motion”) at 6-7. The Court agrees that Plaintiff fails to allege an FLSA violation and finds that 19 her complaint otherwise fails to establish federal subject matter jurisdiction. The Court therefore 20 dismisses the complaint on this basis and need not address the viability of Plaintiff’s state law 21 claims unless and until Plaintiff properly invokes federal jurisdiction in an amended complaint. 22 Plaintiff only federal law claim—and her only basis for federal subject matter 23 jurisdiction—is for violation of the anti-retaliation provision of the FLSA. Compl. ¶¶ 28-32. This 24 provision provides that “it shall be unlawful for any person… to discharge or in any other manner 25 discriminate against any employee because such employee has filed any complaint or instituted or 26 caused to be instituted any proceeding under or related to this chapter, or has testified or is about 27 to testify in any such proceeding, or has served or is about to serve on an industry committee.” 29 1 Defendants argue that a plaintiff must allege violations of the FLSA’s minimum wage or 2 overtime requirements to be protected by the FLSA’s anti-retaliation provision. Mot. at 7. In her 3 Opposition, Plaintiff argues that she made internal complaints of non-payment of wages and that 4 non-payment of wages constitutes a violation of the recordkeeping requirements of the FLSA. 5 Dkt. No. 36 at 7-8. But the face of Plaintiff’s complaint does not allege a violation of the FLSA 6 based on non-payment of wages, nor does it allege a violation of the FLSA’s recordkeeping 7 requirements. Rather, Plaintiff appears to be asserting a freestanding retaliation claim under 8 FLSA without an underlying substantive claim. 9 The Court has not found any authority that supports Plaintiff’s attempt to use FLSA’s anti10 retaliation provision in isolation—without any other alleged violation of FLSA—to establish 11 federal subject matter jurisdiction. All the cases relied upon by Plaintiff involved alleged 12 violations of the FLSA’s substantive provisions in addition to alleged violations of the anti13 retaliation provision. See Lambert v. Ackerley, 180 F.3d 997, 1004 (9th Cir. 1999) (violations of 14 overtime wage provisions); Henderson v. City of Grantville, Ga., 37 F. Supp. 3d 1278, 1281 (N.D. 15 Ga. 2014 ) (unpaid wages for hours worked during unauthorized shift with police department); 16 E.E.O.C. v. White & Son Enterprises, 881 F.2d 1006, 1008 (11th Cir. 1989) (violation of FLSA’s 17 prohibition of sex discrimination); Rosenfield v. GlobalTranz Enterprises, Inc., 811 F.3d 282 , 288 18 (9th Cir. 2015) (misclassification of employees in violation of FLSA); Darveau v. Detecon, Inc., [19] 515 F.3d 334, 336 (4th Cir. 2008) (violation of FLSA overtime provisions); Pineda v. JTCH 20 Apartments, L.L.C., 843 F.3d 1062, 1063 (5th Cir. 2016) (unpaid overtime in violation of FLSA). 21 Contrary to Plaintiff’s attempts to create a freestanding cause of action, the caselaw 22 supports the proposition that the purpose of the FLSA’s anti-retaliation clause is to ensure 23 vindication of the wage-and-hour rights established by the statute. See, e.g., Lambert, 180 F.3d at 24 1004 (“The FLSA’s anti-retaliation clause is designed to ensure that employees are not compelled 25 to risk their jobs in order to assert their wage and hour rights under the Act.”); Onken v. W.L. May 26 Co., 300 F. Supp. 2d 1066, 1068 (D. Or. 2004) (“The statute’s anti-retaliation provision, therefore, 27 is designed to encourage employees to report alleged violations of FLSA’s substantive provisions 1 Apart from Plaintiff’s FLSA retaliation claim, this appears to be an employment contract 2 dispute governed by state law and properly brought in state court.1 If Plaintiff cannot adequately 3 plead an FLSA claim in an amended complaint, then a 12(b)(1) dismissal may be appropriate. See 4 Ass’n of Am. Med. Colls., 217 F.3d at 778-79. 5 B. Request For Leave To Amend 6 Plaintiff requests leave to amend her complaint to include allegations that complete 7 diversity exists to establish diversity jurisdiction under to 28 U.S.C. § 1332 . Dkt. No. 46. She 8 also requests leave to plead additional factual allegations in support of her FLSA claim. Id. 9 Plaintiff’s complaint is quite clear as to the alleged citizenship of the parties: 10 1. Plaintiff LISA MILLER (“Plaintiff”) at all relevant times hereto, has been a resident of the State of California. [11] 2. Plaintiff is informed and believes and thereby alleges that 12 Defendant INFINITE PERCENT PARTNERS LLC (“Defendant” or “IPP”) is a limited liability company in the State of California…. [13] 3. Defendant IPP was an employer in this judicial district, withing 14 [sic] the territory of the Northern District of California, San Francisco Division. [15] 4. Plaintiff is informed and believes and thereby alleges that 16 Defendant STEVEN KOSKIE, is an individual who resides in the state of California…. [17] 5. Plaintiff is informed and believes and thereby alleges that 18 Defendant MICHEL SHANE, is an individual who resides in the state of California…. [19] 20 Compl. ¶¶ 1-5 (emphasis added). 21 Given these allegations, Plaintiff has pleaded herself out of diversity jurisdiction, as she 22 cannot now allege complete diversity without flatly contradicting her complaint. See Sprewell v. 23 Golden State Warriors, 266 F.3d 979, 988 (9th Cir. 2001) (explaining that “a plaintiff can…plead [25] 1 Because Plaintiff’s case appears to lack a substantive connection to the FLSA, Plaintiff’s complaints about her compensation may have failed to provide Defendants with the required 26 notice that she was asserting statutory rights under the FLSA. Kasten v. Saint-Gobain Performance Plastics Corp., 563 U.S. 1, 14 (2011) (“To fall within the scope of the antiretaliation 27 provision, a complaint must be sufficiently clear and detailed for a reasonable employer to 1 himself out of a claim by including unnecessary details contrary to his claims.”). “Although there 2 || is a general rule that parties are allowed to amend their pleadings, it does not extend to cases in 3 || which any amendment would be an exercise in futility.” Steckman v. Hart Brewing, Inc., 143 F.3d 4 1293, 1298 (9th Cir. 1998). Allowing Plaintiff to amend her complaint to include allegations of 5 complete diversity would be futile as the Court would not be required to accept as true conclusory 6 allegations that contradict her complaint. See id. (“[W]e are not required to accept as true 7 conclusory allegations which are contradicted by documents referred to in the complaint.”). 8 Similarly, any attempt by Plaintiff to use her relocation to Washington state, or a change in 9 || residence by one of the Defendants, to establish diversity jurisdiction would also be futile. The 10 || United States Supreme Court has squarely rejected the argument that “a party’s post-filing change 11 in citizenship can cure a lack of subject-matter jurisdiction that existed at the time of filing in an 12 action premised upon diversity of citizenship.” Grupo Dataflux v. Atlas Glob. Grp., L.P., 541 [5] 13 U.S. 567 , 568 (2004). Therefore, Plaintiffs request to amend her complaint to include allegations 14 || related to diversity jurisdiction is DENIED. 15 Because Plaintiff could possibly allege facts that would support her FLSA claim, the Court 16 GRANTS leave to amend the FLSA claim. See Lopez, 203 F.3d at 1130 . 2 17 || IV. CONCLUSION Z 18 The Court GRANTS the motion to dismiss Plaintiff's FLSA claim with leave to amend 19 only that claim. Plaintiff may not add any new causes of action or defendants to an amended 20 || complaint, and any amended complaint must be filed within 21 days from the date of this Order. [21] 22 IT IS SO ORDERED. 23 || Dated: 2/3/2021 24 _Abppured 8 Nhl). HAYWOOD S. GILLIAM, JR. 25 United States District Judge