Peery v. Nixon Engineering,llc

Western District of Texas, txwd-6:2018-cv-00358

OBJECTION to {{13}} Report and Recommendations by Nixon Engineering, LLC.

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IN UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF TEXAS WACO DIVISION JAYME PEERY, § Individually and on behalf of all others § CIVIL ACTION NO. 6:18-cv-00358 similarly situated § § JURY TRIAL DEMANDED Plaintiff, § § COLLECTIVE ACTION v. § PURSUANT TO 29 U.S.C. §216(b) § NIXON ENGINEERING, LLC, § § CLASS ACTION PURSUANT TO Defendant. § FED. R. CIV. P. 23(b) DEFENDANT'S WRITTEN OBJECTIONS TO MAGISTRATE'S REPORT AND RECOMMENDATION TO THE HONORABLE JUDGE OF SAID COURT: NOW COMES Defendant Nixon Engineering, LLC ("Nixon" or "Defendant") and files this its Written Objections to Magistrate's Report and Recommendation, and in support thereof, respectfully state as follows: BACKGROUND On March 13, 2019, Magistrate Judge Jeffrey C. Manske issued the Report and Recommendation (the "Report") in which he ordered that Defendant's Partial Motion to Dismiss [ECF No. 10] be granted in part and denied in part. Defendant specifically objects to the portion of Judge Manske's Report and Recommendation recommending that the Court exercise supplemental jurisdiction over Plaintiff's opt-out Rule 23 quantum meruit claim. LEGAL STANDARD Parties objecting to a report and recommendation by a Magistrate Judge related to a dispositive motion may file specific written objections within fourteen (14) days of such recommendations. FED. R. CIV. P. 72(b)(2); Habets v. Waste Mgmt., 363 F.3d 378, 381 (5th Cir. 4810-7616-5007.3 2004). If timely objections are filed, the district court must conduct a de novo review of the matters to which the objections were filed, and, following such review, the district court may "accept, reject, or modify the recommended disposition, receive further evidence, or return the matter to the magistrate judge with instructions." FED. R. CIV. P. 72(b)(3). See also 28 U.S.C. § 636(b)(1). OBJECTIONS AND ARGUMENTS Defendant's Partial Motion to Dismiss asserted a number of arguments seeking the dismissal of Plaintiff's state law quantum meruit claim, which Plaintiff seeks to pursue as a class action under Federal Rule of Civil Procedure 23; at issue here, Defendant argued that the Court should decline to exercise supplemental jurisdiction over this claim under the factors set out in 28 U.S.C. § 1367(c). Defendant specifically objects to the finding in the Report that these factors weigh in favor of the Court exercising jurisdiction and requests that the District Court consider this issue de novo. Under 28 U.S.C. § 1367(c)(2), it is appropriate for the Court to decline supplemental jurisdiction over state law claims if such claims "substantially predominate" over the federal claims. Ridley v. Regency Vill.¸ Inc., No. H-17-974, 2018 U.S. Dist. LEXIS 42541, at *8-13 (S.D. Tex. Mar. 15, 2018). The Report states, "Plaintiff only brought one FLSA claim (off-the clock hours above forty a week) and one state claim (off-the-clock hours below forty a week) so neither eclipses the other in size or scope."1 R. & R., ECF No. 13, at 6. While true that Plaintiff asserts only a single state law claim in addition to the single federal claim, it is the nature of this 1 It is Defendant's understanding that the Report contemplates allowing Plaintiff additional time for briefing and/or the filing of an Amended Complaint prior to issuing a final ruling on whether or not Plaintiff has stated a claim for relief for unpaid time to the extent such a claim arises from hours worked under forty (40) in a particular workweek. R. & R., ECF No. 13, at 9. Defendant does not object to Magistrate Judge Manske's recommendation on this point, but reserves the right to object to any additional findings he may make following such additional briefing. 4810-7616-5007.3 2 state claim and Plaintiff's intention to pursue it as an opt-out class action under Rule 23 that makes it extremely likely that this claim will predominate over Plaintiff's federal claim. The recent case of Ridley v. Regency Village, Inc., cited in Defendant's Motion to Dismiss, is instructive. 2018 U.S. Dist. LEXIS 42541, at *8-13. In Ridley, the plaintiffs asserted a claim under the Fair Labor Standards Act ("FLSA") for unpaid overtime and state law claims for breach of contract, quantum meruit and unjust enrichment. Id. at *9-10. Regency argued that such state law claims would substantially predominate over the FLSA claim for two reasons – first, because the proposed opt-out class for the state law claims would be larger than the opt-in class for the FLSA claims, both because of the nature of opt-out classes under Rule 23 and opt-in classes used for FLSA claims and because of the longer time period at issue; and second, because the state law claims would require proof of additional elements beyond those required to establish the plaintiffs' FLSA claims. Id. at *8-10. In declining to exercise supplemental jurisdiction, the Southern District stated as follows: Plaintiffs argue that their Rule 23 claims "essentially replicate" their FLSA claim and that the court should not decline supplemental jurisdiction just because the Rule 23 claims may have more parties. The state claims will predominate if they "constitute[] the real body of a case, to which the federal claim is only an appendage." United Mine Workers v. Gibbs, 383 U.S. 715, 727 (1966). The state claims may predominate "in terms of proof, of the scope of the issues raised, or of the comprehensiveness of the remedy sought." Id. at 726. Just based on the elements alone, it is clear that the Rule 23 claims do not replicate the FLSA claim. The Rule 23 claims will require proof beyond that required for the FLSA claim. Further, as Regency notes, the court will have to consider the validity of the alleged contracts. While the state law claims may not be complex, they do require substantially more proof and the discussion of substantially more issues than the FLSA claim. Thus, the Rule 23 claims constitute the real body of the case and predominate the federal claim. See De Asencio v. Tyson Foods, Inc., 342 F.3d 301, 309-10 (3d Cir. 2003). Further, "the simultaneous management of the two 'irreconcilable' procedures for class formation is unwieldy, would detract from the efficient resolution of the substantive dispute, and, most importantly, is frowned upon by the Fifth Circuit." Jackson v. City of San Antonio, 220 F.R.D. 55, 60 (W.D. Tex. 2003) (quoting 4810-7616-5007.3 3 LaChapelle v. Owens-Ill., Inc., 513 F.2d 286, 288-89 (5th Cir. 1975)). While LaChapelle did not hold that Rule 23 classes cannot coexist with FLSA classes, the court stated that the difference between the classes is "irreconcilable." 513 F.2d at 288. Managing two irreconcilable classes, for the sole purpose of hearing state law claims that the court would not otherwise have jurisdiction over, provides the court with sufficient basis to decline jurisdiction under § 1367(c)(4). See Jackson, 220 F.R.D. at 59. Id. at *10-12 (citations to record omitted). Here, while Plaintiff asserts only one state law cause of action for quantum meruit (as opposed to the three state law claims asserted in Ridley), the Ridley analysis holds – the requested opt-out class on the quantum meruit claim will (1) involve a much larger number of participants than the smaller FLSA opt-in class that (2) requires proof of additional elements on an individualized basis; therefore, it will substantially predominate over Plaintiff's smaller and possibly less individualized FLSA claim. Defendant requests that this Court concur with the Ridley court in finding that the common law and statutory factors favor declining to exercise supplemental jurisdiction over Plaintiff's Rule 23 quantum meruit claim. While the Report contemplates a re-evaluation of whether the exercise of supplemental jurisdiction is proper when the issues of certification are decided by the Court, 2 Defendant respectfully requests that the District Court decline to exercise supplemental jurisdiction over Plaintiff's Rule 23 quantum meruit at this stage, in part in the interest of judicial economy, as few judicial resources have been expended on this state law claim at this time. Accordingly, Defendant objects to the Report's Recommendation that the Court exercise supplemental jurisdiction over Plaintiff's Rule 23 quantum meruit claim, and Defendant requests that the District Court grant its Motion to Dismiss as to such claim. 2 "These factors weigh in favor of exercising jurisdiction, although, naturally, reevaluation may be proper once certification is at issue." R. & R., ECF No. 13, at 7. 4810-7616-5007.3 4 PRAYER For the reasons explained herein, Defendant objects to the Report's recommendation that Defendant's Motion to Dismiss be denied in part with regard the Report's recommendation that the Court exercise supplemental jurisdiction over Plaintiff's Rule 23 quantum meruit claim. Defendant respectfully requests that the District Court review the findings, conclusions and recommendations in the Report and grant Defendant's Motion to Dismiss, in particular with regard to dismissal of Plaintiff's Rule 23 quantum meruit claim. Respectfully submitted, /s/ Ramon D. Bissmeyer Ramon D. Bissmeyer State Bar No. 00787088 DYKEMA GOSSETT PLLC 112 East Pecan Street, Suite 1800 San Antonio, Texas 78205 Telephone: (210) 554-5500 Facsimile: (210) 226-8395 Email: rbissmeyer@dykema.com Elizabeth A. Voss State Bar No. 24075160 DYKEMA GOSSETT PLLC 1717 Main Street, Suite 4200 Dallas, Texas 75201 Telephone: (214) 462-6400 Facsimile: (214) 462-6401 Email: evoss@dykema.com ATTORNEYS FOR DEFENDANT NIXON ENGINEERING, LLC 4810-7616-5007.3 5 CERTIFICATE OF SERVICE I hereby certify that on the 27th day of March 2019, I electronically filed the foregoing with the Clerk of the Court using the CM/ECF system which will send notification of such filing in accordance with the FRCP to the following: Clif Alexander (clif@a2xlaw.com) Lauren E. Braddy (lauren@a2xlaw.com) Alan Clifton Gordon (cgordon@a2xlaw.com) Carter T. Hastings (carter@a2xlaw.com) George Schimmel (geordie@a2xlaw.com) ANDERSON ALEXANDER, PLLC 819 N. Upper Broadway Corpus Christi, Texas 78401 /s/ Ramon D. Bissmeyer Counsel for Defendant 4810-7616-5007.3 6