Weeks et al v. Matrix Absence Management Incorporated, No. 2:2020cv00884 - Document 91 (D. Ariz. 2022)
Court Description: ORDER denying 81 Motion for Judgment on the Pleadings. See the attached order for complete details. Signed by Judge Steven P. Logan on 2/22/2022. (RMW)
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1 WO 2 3 4 5 6 IN THE UNITED STATES DISTRICT COURT 7 FOR THE DISTRICT OF ARIZONA 8 Tina Weeks, et al., 9 10 Plaintiffs, vs. 11 12 Matrix Absence Management Incorporated, 13 Defendant. 14 ) ) ) ) ) ) ) ) ) ) ) ) No. CV-20-00884-PHX-SPL ORDER 15 Before the Court is Defendant Matrix Absence Management Inc.’s Motion for 16 Judgment on the Pleadings. (Doc. 81), in which Defendant moves for judgment in its 17 favor on Plaintiff Samantha Stocklein’s Oregon state-law wage claim and the associated 18 putative Rule 23 class action claim alleging failure to pay overtime. Defendant argues 19 that the state-law claim is preempted by the Fair Labor Standards Act (FLSA). For the 20 reasons that follow, the motion will be denied. 21 I. BACKGROUND 22 On May 6, 2020, Plaintiffs Tina Weeks, Michael McDonald, and Cassandra 23 Magdaleno filed a Complaint alleging they and other similarly situated employees of 24 Defendant were improperly classified as exempt under the FLSA and had therefore been 25 denied overtime wages. (Doc. 1). On October 15, 2020, the Court conditionally certified 26 a collective class of employees and granted Plaintiff’s Motion for Step-One Notice under 27 the FLSA. (Doc. 36). Plaintiff was ordered to notify all members of the class within 21 28 days, and the members then had 63 days to opt in to the action. (Doc. 36 at 10). 1 On February 16, 2021, Plaintiffs moved to amend the Complaint to add an 2 additional named plaintiff, Plaintiff Samantha Stocklein (hereinafter “Plaintiff”), seeking 3 to bring a claim for failure to pay overtime under Oregon law for herself and other 4 putative class members employed by Defendant in Oregon, in addition to the FLSA 5 claim. (Doc. 53). On April 22, 2021, the Court granted the Motion to Amend (Doc. 59), 6 and Plaintiff subsequently filed the First Amended Complaint, alleging both the FLSA 7 claim and the Oregon state-law claim. (Doc. 60). On January 18, 2022, Defendant filed 8 the instant Motion for Judgment on the Pleadings, which is now ripe for review. (Docs. 9 81, 84, 90). 10 II. LEGAL STANDARDS 11 The Court may grant a motion for judgment on the pleadings under Rule 12(c) 12 “when there is no issue of material fact in dispute, and the moving party is entitled to 13 judgment as a matter of law.” Fleming v. Pickard, 581 F.3d 922, 925 (9th Cir. 2009). A 14 district court reviews a Rule 12(c) motion under the same legal standard as Rule 12(b)(6). 15 Dworkin v. Hustler Magazine, Inc., 867 F.2d 1188, 1192 (9th Cir. 1989). Therefore, all 16 the factual allegations in the complaint are taken as true. Fleming, 581 F.3d at 925. 17 However, a court is not required to accept as true any legal conclusions that are not 18 supported by factual allegations. Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). 19 Here, Defendant argues that it is entitled to judgment as a matter of law on 20 Plaintiff’s Oregon state-law wage claim because it is preempted by the FLSA. There are 21 three types of preemption: express preemption, field preemption, and conflict 22 preemption. McClellan v. I-Flow Corp., 776 F.3d 1035, 1039 (9th Cir. 2015). Defendant 23 argues only that conflict preemption applies. (Doc. 81 at 4). “Conflict preemption is 24 implicit preemption of state law that occurs where there is an actual conflict between 25 state and federal law.” Id. (internal quotation marks omitted). Conflict preemption applies 26 “when (1) compliance with both federal and state regulations is a physical impossibility, 27 or (2) when state law stands as an obstacle to the accomplishment and execution of the 28 full purposes and objectives of Congress.” Id. (internal quotation marks and alterations 2 1 omitted). 2 III. DISCUSSION 3 The issue before the Court is straightforward: Is Plaintiff’s Oregon state-law claim 4 for failure to pay overtime preempted by the FLSA? The case law that answers this 5 question, however, is nonbinding and at times contradictory. The Court’s first task, 6 therefore, is to identify the most persuasive authority. 7 Defendant’s argument in favor of preemption relies primarily on Colson v. Avnet, 8 Inc., 687 F. Supp. 2d 914 (D. Ariz. 2010). Colson was a class action lawsuit alleging, 9 among other claims, that an employer violated O.R.S. § 653.055 by denying misclassified 10 employees overtime wages—a claim identical in all relevant respects to the claim at issue 11 here. Id. at 919. The court in Colson held that the Oregon state-law claim was preempted 12 by the FLSA because it “essentially [sought] to piggy-back thirty days’ wages worth of 13 waiting-time penalties onto any alleged FLSA violation. Id. at 924. 14 Colson relied entirely on the reasoning of Wood v. TriVita, Inc., No. CV-08-0765- 15 PHX-SRB, 2008 WL 6566637 (D. Ariz. Sept. 18, 2008). In TriVita, the plaintiff alleged 16 failure to pay overtime wages under FLSA as well as an Arizona state-law claim for 17 treble damages for failure to timely pay those wages. Id. at *1. The court determined that 18 the plaintiff’s state-law claim amounted “to nothing more than a claim for overtime due 19 under the FLSA” and thus, “[t]o allow Plaintiff to bring suit for a violation of the FLSA 20 and seek a remedy other than that provided by the FLSA would stand as an obstacle to 21 the accomplishment and execution of the full purposes and objectives of Congress in 22 enacting the FLSA.” Id. at *4. The court concluded that “overtime claims that are directly 23 covered by the FLSA must be brought under the FLSA.” Id. For that statement, TriVita 24 cited to Williamson v. General Dynamics Corp., 208 F.3d 1144 (9th Cir. 2000). In 25 Williamson, the Ninth Circuit concluded that the plaintiffs’ common-law fraud claims 26 were not preempted by FLSA, using overtime disputes as a counterexample in the 27 preemption analysis. Id. at 1154 (“Claims that are directly covered by the FLSA (such as 28 overtime and retaliation disputes) must be brought under the FLSA.”). 3 1 However, the Ninth Circuit labeled that statement from Williamson as dicta and 2 backed away from it in Wang v. Chinese Daily News, Inc., 623 F.3d 743 (9th Cir. 2010), 3 vacated on other grounds, 565 U.S. 801 (2011). Specifically, the Ninth Circuit wrote: 4 5 6 7 8 9 10 11 12 Our decision in Williamson contained somewhat contradictory statements. On the one hand, we suggested in dicta that “claims that are directly covered by the FLSA (such as overtime and retaliation disputes) must be brought under the FLSA.” On the other hand, we rejected as “incorrect” the district court’s assumption that “FLSA is the exclusive remedy for claims duplicated by or equivalent of rights covered by the FLSA.” Id. at 759 (quoting Williamson, 208 F.3d at 1154, 1152) (internal citations and alteration omitted). Wang was a class action lawsuit alleging violations of the FLSA and California’s Unfair Competition Law. Id. at 749; see Cal. Bus. & Prof. Code § 17200. The plaintiffs alleged a variety of labor violations, including wrongful denial of overtime 13 pay. Wang, 623 F.3d at 749. Notably, the plaintiffs’ state-law unfair competition claim 14 was derivative of the FLSA claim. Id. at 759 (“Plaintiffs’ § 17200 claim ‘borrowed’ 15 FLSA as the substantive violation.”). Still, the Ninth Circuit held that the state-law claim 16 17 was not preempted because it was obviously possible to comply with both the federal and state laws simultaneously given that the FLSA requirements applied to both, and because 18 allowing the state-law claim to proceed “furthers [FLSA’s central] purpose of protecting 19 employees.” Id. at 760. 20 21 22 23 24 The Court finds Wang highly persuasive in this case. To be sure, Wang was vacated by the United States Supreme Court, so it has no mandatory precedential effect on this Court. See United States v. Joelson, 7 F.3d 174, 178 n.1 (9th Cir. 1993). But it was vacated on entirely different grounds than the preemption issue. See Chinese Daily News, Inc. v. Wang, 565 U.S. 801 (2011). This Court therefore agrees with others in this 25 Circuit that Wang’s preemption analysis has significant “informational and persuasive 26 value,” and “stands for the proposition that a state law claim is not preempted by the 27 FLSA as long as that claim furthers the FLSA’s purpose of protecting employees.” 28 4 1 McCoy v. N. Slope Borough, No. 3:13-CV-00064-SLG, 2013 WL 4510780, at *21 (D. 2 Alaska Aug. 26, 2013); see also Roberts v. Trimac Transp. Servs. (W.), Inc., No. C12- 3 05302 HRL, 2013 WL 1441999, at *2 n.3 (N.D. Cal. Apr. 9, 2013). This is also in line 4 with the Ninth Circuit’s own treatment of Wang, as the court has continued to cite to the 5 case for holdings unrelated to the grounds on which it was vacated. See, e.g., Busk v. 6 Integrity Staffing Sols., Inc., 713 F.3d 525, 529 n.3 (9th Cir. 2013); Newton v. Parker 7 Drilling Mgmt. Servs., Ltd., 881 F.3d 1078, 1097 (9th Cir. 2018); Kater v. Churchill 8 Downs, Inc., No. 19-36091, No. 20-35042, 2020 WL 1441416, at *1 (9th Cir. Feb. 26, 9 2020). Thus, to the extent the earlier cases of Colson, TriVita, and Williamson would lead 10 the Court to a different outcome in this case than Wang would, the Court finds that Wang 11 prevails.1 12 Returning then to Colson—which found that FLSA preempted an Oregon state- 13 law claim essentially identical to the one in this case—the question is whether Wang’s 14 preemption holding changes the outcome. Colson relied solely on TriVita’s reasoning to 15 determine that the Oregon claim was preempted. See Colson, 687 F. Supp. 2d at 924 16 (“[T]he Court sees no reason why . . . Judge Bolton’s reasoning in TriVita should not also 17 control the fate of Plaintiff’s Oregon claim . . . .”). The Court will therefore consider 18 whether TriVita’s reasoning survives Wang. The Court identifies four reasons 19 underpinning TriVita and will discuss them in turn. 20 First, TriVita referred to Williamson’s statement that claims directly covered by 21 the FLSA must be brought under the FLSA. TriVita, 2008 WL 6566637, at *3. As noted, 22 however, Wang explicitly referred to that statement as dicta and highlighted its 23 inconsistency with Williamson’s rejection of the notion that the FLSA is the exclusive 24 remedy for claims based on rights covered by the FLSA. Wang, 623 F.3d at 759. While it 25 1 26 27 28 The Court also finds that to the extent they are contradictory, Wang prevails over the more recent cases cited by Defendant—including Finton v. Cleveland Indians Baseball Co. LLC, No. CV-19-02319-PHX-MTL, 2021 WL 661975 (D. Ariz. Feb. 19, 2021), vacated in part, 2021 WL 1610199 (D. Ariz. Apr. 26, 2021), and Roberts v. State, 483 P.3d 212 (Ariz. Ct. App. 2021)—as the Court finds Ninth Circuit authority on federal preemption issues more persuasive than authority from this District or from state courts. 5 1 may be true that Wang did not “disavow” Williamson, as Defendant argues (Doc. 90 at 2 2), it at least negated any persuasive value held by the particular statement quoted in 3 TriVita. 4 Second, TriVita looked to First and Fourth Circuits cases, as well as several 5 district court cases, that held that the FLSA preempted duplicative state-law claims. 6 TriVita, 2008 WL 6566637, at *4. But with persuasive Ninth Circuit authority now 7 available, of course, this Court gives more weight to Ninth Circuit authority than to 8 authority from other circuits. Moreover, in Wang, the Ninth Circuit expressly rejected as 9 unpersuasive the same Fourth Circuit case cited in TriVita. See Wang, 623 F.3d at 760. 10 Third, TriVita reasoned that allowing the plaintiff to pursue a non-FLSA, state-law 11 remedy for a FLSA violation would hinder Congress’s purposes and objectives in 12 enacting the FLSA. TriVita, 2008 WL 6566637, at *4. To the contrary, Wang held that 13 allowing the plaintiffs to go forward with their California state-law claim that “borrowed 14 FLSA as the substantive violation” furthered the FLSA’s purpose of protecting 15 employees. Wang, 623 F.3d at 759–60. 16 Finally, TriVita noted the apparent conflict between the opt-out system of a Rule 17 23 class action, which would apply to the state-law claim, and the opt-in system of a 18 FLSA collective action. TriVita, 2008 WL 6566637, at *5. The court summarized the two 19 systems as follows: 20 21 22 23 24 25 26 27 The FLSA requires class members who are not named in the complaint to affirmatively opt in to the class by filing a written consent with the Court. This differs from a class action under Rule 23, where class members are bound by the judgment unless they opt out of the suit. Id. Defendant emphasizes that only 29 of the 136 potential class members who worked in Oregon opted in to this case under FLSA. (Doc. 81 at 2 n.3). While the Court is sympathetic to Defendant’s argument that the opposite opt-in and opt-out schemes of the FLSA and Rule 23 is unwieldy, the same was true in Wang; the district court had given putative class members a three-month period both to opt in to the FLSA claim and to opt 28 6 1 out of the state-law claims. Wang, 623 F.3d at 749. Despite that unwieldiness, the Ninth 2 Circuit still determined that the FLSA did not preempt the state-law claim. Ultimately, 3 then, none of the reasons that supported TriVita’s analysis—and therefore Colson’s 4 holding that FLSA preempts an Oregon unpaid wages state-law claim—continue to hold 5 weight after Wang. 6 Rather, Wang’s holding that the California state-law claim was not preempted by 7 the FLSA applies squarely to the Oregon state-law claim in this case. In Wang, the Ninth 8 Circuit reasoned that preemption did not apply where the state-law claim borrowed the 9 FLSA standard making it obviously possible to comply with both laws, and where the 10 state-law claim furthered the FLSA’s purpose of protecting employees. Id. at 760. 11 Likewise, here, the parties agree that the same standard applies to both the FLSA and 12 Oregon claims. See (Doc. 57 at 4–5; Doc. 81 at 2); Nolan v. Transcend Servs., Inc., No. 13 3:10-cv-01571-HU, 2012 WL 14021, at *8, 11 (D. Or. Jan. 4, 2012). In addition, the 14 Oregon law furthers the goal of protecting employees by penalizing employers who 15 improperly withhold wages. O.R.S. §§ 652.150, 653.055. Following Wang, then, 16 Plaintiff’s Oregon state-law claim is not preempted. 17 18 19 IT IS THEREFORE ORDERED that Defendant’s Motion for Judgment on the Pleadings (Doc. 81) is denied. Dated this 22nd day of February, 2022. 20 21 Honorable Steven P. Logan United States District Judge 22 23 24 25 26 27 28 7
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