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Shaw v. Veterans Health Administration

United States District Court, Ninth Circuit

December 18, 2013

WALTER M. SHAW, Plaintiff,


ROGER T. BENITEZ, District Judge.

Before this Court is the Motion to Dismiss filed by the United States on behalf of all Defendants. (Docket No. 24). Upon careful review of the briefing and record in this matter, the Court GRANTS the Motion to Dismiss.

I. Plaintiff's Claims

Plaintiff Walter M. Shaw filed a First Amended Complaint (FAC) on October 24, 2012. (Docket No. 4). Plaintiff sought recovery of unpaid wages and benefits, as well as penalties, for Defendants' alleged systemic misclassification of Plaintiff as an independent contractor instead of an employee. (FAC ¶ 1). Plaintiff, a medical doctor, alleges he was hired by the Department of Veterans Affairs (VA) to work in an outpatient facility in Mission Valley, CA. ( Id. ¶¶ 2-4). He claims that he was improperly denied retirement and other employment benefits because he and others were misclassified as "fee basis physicians, " "independent contractors, " and "contract physicians, " instead of "employees." ( Id. ¶¶ 10, 17, 20). Plaintiff alleges that he was informed in writing that he did not qualify for benefits because his appointment was an independent contracting position and not eligible for benefits. (FAC ¶ 10; Pl's Exh. F, p. 135). Plaintiff devotes much of his complaint to a detailed description of his working conditions and the degree of control and oversight that the Defendants exercised over his actions. Plaintiff states that he and others tried to "encourage some benefit consideration" and were told that he and others were fee-service contractors. ( Id. at ¶ 48). They were also told they did not qualify for the Federal Employee Retirement System (FERS). ( Id. )

Plaintiff states that he received written notice that his last day was September 30, 2010. Plaintiff appears to claim that the records may not be correct, that his last day was September 24, and that he has not received payment for "September 30-31." ( Id. at ¶ 49). Plaintiff also claims that he later received a letter in either November or December 2010 that stated that he and others had "voluntarily resigned" and that there was a verbal announcement at the end of October that the VA would no longer fire a physician. ( Id. ¶¶ 49, 82) Plaintiff states that he "requested due process" for the loss of his job. ( Id. ¶¶ 49, 82). Plaintiff stated that he sought relief through "HR (Central Office) and Benefits (Central Office)" and claims that San Diego VA Human Resources would not return their phone calls. ( Id. ¶ 50). Plaintiff appears to claim that this was consistent with his "employee" status. ( Id. ¶¶ 52, 71, 74). He claims that his discharge "was without reason 31 October 2010 after 17 years and some days of work remain unpaid." ( Id. ¶ 81).

Plaintiff asserts four "causes of action." They are listed as (1) a declaratory judgment, (2) misclassification, (3) abuse of 38 U.S.C. §§ 7403, 74055 by failing to classify him as an employee resulting in "unlawful deprivation of benefits and rights to which plaintiff was rightfully entitled as an employee, '" and (4) violation of California Labor Code section 226.8, outlawing willful misclassification as an independent contractor. Plaintiff seeks the following specific forms of relief: 1) a declaration that Defendants misclassified plaintiff and others as "independent contractors, " 2) injunctive relief enjoining Defendants from classifying fee basis physicians as independent contractors, 3) compensatory damages based upon the benefits and entitlement owed to Plaintiff as an employee, 4) statutory and restitutionary damages, and 5) a declaration that Defendants willfully misclassified plaintiff under California Labor Code § 2753. ( Id. at p. 24).

On July 22, 2013, the United States moved to dismiss for lack of jurisdiction on behalf of the Defendants. (Docket No. 24).

II. Legal Standard

Under Federal Rule of Civil Procedure 12(b)(6), dismissal is appropriate if, taking all factual allegations as true, the complaint fails to state a plausible claim for relief on its face. FED. R. CIV. P. 12(b)(6); Bell Atl. Corp. v. Twombly, 550 U.S. 544, 556-57 (2007); see also Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)(requiring plaintiff to plead factual content that provides "more than a sheer possibility that a defendant has acted unlawfully"). Under this standard, dismissal is appropriate if the complaint fails to state enough facts to raise a reasonable expectation that discovery will reveal evidence of the matter complained of, or if the complaint lacks a cognizable legal theory under which relief may be granted. Twombly, 550 U.S. at 556.

III. Discussion

A. Retirement Benefits

The United States asks this Court to dismiss the action for lack of jurisdiction because Plaintiff failed to allege that he exhausted his administrative remedies, and jurisdiction over any exhausted claims lies exclusively with the Federal Circuit. (Mot. at 2).

The Court notes that Plaintiff points out that the federal court has jurisdiction because the United States is a party, there is a federal question, and/or the subject matter jurisdiction is intertwined with the merits. (Resp. at 1, 7-13). However, even if this Court would normally have proper subject matter jurisdiction over the case for any of the reasons offered by Plaintiff, the Court will nonetheless lack jurisdiction if Plaintiff either failed to exhaust administrative remedies, or sought judicial review in the wrong court. See, e.g., Grossman v. C.I.R., 687 F.Supp. 1401, 1402 (N.D. Cal. 1987).

Congress has authorized the Office of Personnel Management (OPM) to administer FERS, and to enact regulations to do so. 5 U.S.C. § 8347. OPM regulations state that OPM will adjudicate "all claims for basic benefits arising under FERS and of all matters directly or indirectly concerned with these adjudications." 5 C.F.R. § 841.105(a). To receive benefits under FERS, a claimant must apply for the benefit as prescribed by OPM. 5 C.F.R. § 841.202(a). Individuals must file an application with OPM. 5 C.F.R. § 841.304. The OPM decision on that application may be subject to reconsideration. 5 C.F.R. §§ 841.305, 841.306. The matter can then be appealed to the Merit Systems Protection Board (MSPB). 5 C.F.R. §§ 841.305, 841.308; 5 U.S.C. § ...

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