United States District Court, N.D. California
DAVID CHAVEZ, on behalf of himself and all others similarly situated, Plaintiff,
STELLAR MANAGEMENT GROUP VII, LLC; STELLAR MANAGEMENT GROUP, INC. d/b/a QSI QUALITY SERVICE INTEGRITY; THE VINCIT COMPANY, LLC d/b/a THE VINVIT GROUP and VINCIT ENTERPRISES, Defendants.
ORDER DENYING MOTION TO DISMISS FOR LACK OF PERSONAL
JURISDICTION AND GRANTING JURISDICTIONAL DISCOVERY RE: DKT.
C. SPERO CHIEF MAGISTRATE JUDGE
putative class and collective action, Plaintiff David Chavez
alleges that Defendants Stellar Management Group VII, LLC
(“Group VII”); Stellar Management Group, Inc.
d/b/a QSI Quality Service Integrity (“Stellar,
Inc.”); and The Vincit Company, LLC d/b/a The Vincit
Group and Vincit Enterprises (“Vincit”) violated
the Fair Labor Standards Act, 29 U.S.C. §§ 201,
et seq. (“FLSA”) and California wage and
hour laws. Group VII does not contest the jurisdiction of
this Court. See generally Group VII Answer (dkt.
17). The other two Defendants, Stellar, Inc. and Vincit, move
to dismiss for lack of personal jurisdiction pursuant to
Federal Rule of Civil Procedure 12(b)(2), asserting that they
do not have sufficient minimum contacts with California.
Chavez argues that Stellar, Inc. and Vincit are subject to
the jurisdiction of this Court because they solicit potential
employees through online job postings, hire them, and then
oversee their employment in California. In the alternative,
Chavez seeks jurisdictional discovery to further explore the
role of Stellar, Inc. and Vincit in managing Group VII and
their involvement in recruiting and hiring employees in
California. The Court held a hearing on June 28, 2019.
present record falls short of definitively establishing
personal jurisdiction over Stellar, Inc. and Vincit. For the
reasons stated below, however, Stellar, Inc. and Vincit's
Motion is DENIED without prejudice, and Chavez's request
for jurisdictional discovery is GRANTED.
Allegations of the Complaint
is a resident of California who allegedly applied for and
accepted a job as a sanitation worker for Defendants in
August 2018 at the Foster Farms plant in Livingston,
California. See Compl. (dkt. 1) ¶¶
11-12, 26. He seeks to represent a class of individuals who
have worked for the Defendants as “non-exempt, hourly
employees, including but not limited to Sanitation
Workers.” Id. ¶ 1. Chavez claims that
Defendants violated wage and hour laws by: (1) failing to
permit employees to take meal and rest breaks; (2) failing to
provide premium pay for these missed breaks; (3) failing to
compensate for all hours worked; (4) failing to pay overtime;
(5) failing to provide accurate, itemized wage statements;
and (6) failing to timely pay employees upon resignation or
termination. Id. ¶ 2. Chavez believes that
Vincit “serves in a capacity of direct control over the
operation of its agents, ” which include Stellar, Inc.
and Group VII. Id. ¶ 19. According to Chavez,
Defendants “jointly exercised control over [Chavez] and
[the] putative Class and Collective members with respect to
work assignments.” Id. Chavez further alleges
that Defendants recruit employees for sanitation jobs in
California under the employer names of “The Vincit
Group” and “QSI, ” otherwise known as
Stellar, Inc. Id. Chavez believes that Defendants
are “either solely or jointly and severally
liable” for the improper conduct. Id. ¶
The Parties' Arguments and Evidence
Stellar, Inc. and Vincit's Motion and Declarations of
Morrie Casura and Tammy Way
Inc. and Vincit argue they are not subject to personal
jurisdiction by this court, relying primarily on declarations
by the Division Manager of Stellar, Inc., Morrie Casura, and
the Director of Global Sourcing of Vincit, Tammy Way. Mot.
(dkt. 18) at 5; see generally Casura Decl. (dkt.
18-1); Way Decl. (dkt. 18-2). According to the declarations,
both Stellar, Inc. and Vincit are incorporated and have their
principal place of business in Chattanooga, Tennessee. Mot.
at 5; Casura Decl. ¶¶ 3-4; Way Decl. ¶¶
3-4. For the four years preceding this action, each company
reportedly “has not employed non-exempt sanitation
workers or other hourly employees within California”
and “has not conducted operations or business within
California.” Casura Decl. ¶¶ 6-7; Way Decl.
¶¶ 6-7; see also Mot. at 5. Furthermore,
Way declares Vincit “does not control Stellar, Inc. or
Group VII” and it is not “a member or manager of
Group VII.” Way Decl. ¶¶ 5, 7; see
also Mot. at 5. Casura similarly states, “Group
VII and Vincit are not owned by Stellar, Inc., nor is
Stellar, Inc. a member or manager of either LLC.”
Casura Decl. ¶ 5; see also Mot. at 5.
Inc. and Vincit assert that their overall contacts with
California are not sufficient to establish general personal
jurisdiction, as their activities within the forum state are
not so “continuous and systematic” to consider
them “at home” in California. Mot. at 6. Both
companies are incorporated in Tennessee with their principle
places of business in Tennessee, and “neither company
does business, has offices, nor conducts operations within
California's boarders.” Id. at 7. Stellar,
Inc. and Vincit state that they are not subject to specific
personal jurisdiction as they have not purposefully directed
their activities to California or availed themselves of the
privilege of conducting business within California.
Id. at 8. They also contend that Chavez's
“vaguely pled” claims do not arise out of conduct
engaged in by Stellar, Inc. or Vincit. See Id. at 4,
8-9. Stellar, Inc. and Vincit insist Chavez's claims
“originate solely from conduct beginning after
employees are hired and begin working in California, ”
a state where neither conducts business. Id. at 9.
They also argue that Chavez's reference to the job
postings and Vincit listing Stellar, Inc. as one of its
“member companies” is unrelated to the claims as
“this action does not allege unlawful advertising,
placement, or hiring practices.” Id.
Chavez's Opposition, Declarations, and Request for
Contrary to the declarations from Stellar, Inc. and Vincit
stating they do not have minimum contacts in California,
Chavez argues that they “jointly solicit California
residents as non-exempt employees” and then
“direct them to work in California and pay them
wages in California.” Opp'n (dkt. 20) at 1. Chavez
relies on a website branded with Vincit's name and logo,
a job posting attributed to the companies on Indeed.com, and
an itemized wage statement he received after his employment
to illustrate Stellar, Inc.'s and Vincit's contacts
with California. See Id. at 2-4. According to
Chavez, Vincit's website “advertises job positions
for sanitation workers with Vincit and [Stellar, Inc.]
throughout California, and allows prospective employees to
apply directly on its website for these positions in
California.” Id. at 3 (citing Edelstein Decl.
(dkt. 20-2) Ex. 1). Chavez also points to an Indeed.com job
posting where “‘The Vincit Group/ QSI' posted
a job for ‘Sanitation Team Member' in Petaluma,
CA.” Id. (citing Edelstein Decl. Ex. 2).
Additionally, after Chavez completed his employment, he
“received an itemized wage statement provided by
‘Stellar Management Group'” that was
“mailed to his home in California.” Id.
at 4 (citing Chavez Decl. (dkt. 20-1) Ex. A). He claims
Stellar, Inc. was the sender, although he does not address
how he determined that the statement was not sent by the
similarly-named Stellar Management Group VII. See
Id. Chavez believes the above instances demonstrate
purposeful direction of activities towards California by
Stellar, Inc. and Vincit.
also alleges that Stellar, Inc. and Vincit's control over
Group VII and his employment creates minimum contacts.
Id. at 8. Chavez alleges that Defendants are related
and “jointly exercise control . . . with respect to
work assignments” and that “Vincit oversees and
directs” the business of Stellar, Inc. and Group VII
within California. Id. at 2, 8. To establish this
connection Chavez primarily relies on statements from the
Vincit job posting and the addresses of the Defendants'
principal places of business. Id. at 4. Vincit's
website states Stellar, Inc. is part of its “network of
eight member companies” and Chavez believes Group VII
“appears to be an entity directly related to” and
that “provides sanitation services on behalf of”
both Stellar, Inc. and Vincit. Id. at 2 (citing
Edelstein Decl. Ex. 3). Chavez also cites the sending address
on his itemized wage statement, noting that it is the same
address as the principal places of business for all
Defendants. Id. at 4 (citing Chavez Decl. Ex. A);
Casura Decl. ¶ 4; Way Decl. ¶ 4. Chavez argues that
these contacts show purposeful availment by Stellar, Inc. and
Vincit of the privileges of conducting business in
further states that the above actions demonstrating contacts
with California also show that his claims arise out of
Stellar, Inc.'s and Vincit's forum-related
activities. Opp'n at 9. He contends that these contacts
contradict the declarations offered by Stellar, Inc. and
Vincit, which claim the companies have little to no
involvement in California. See Id. at 8. According
to Chavez, such contradictions should be resolved in his
favor at the pleading stage and entitle him to at least
jurisdictional discovery, if not denial of the motion.
Id. at 5, 10-11.
Stellar, Inc. and Vincit's Reply in Support of
Stellar, Inc. and Vincit argue in their reply that Chavez
“offers no competent evidence to show that either
Defendant has purposefully availed itself within or directed
activities towards this California forum.” Reply (dkt.
24) at 1. Stellar, Inc. and Vincit dismiss the exhibits
attached to the opposition as “three unauthenticated
internet print-outs, ” two of which consist of job
postings accessed months after Chavez was employed.
Id. at 3. They state Chavez does not assert that
“he utilized any of these job postings or webpages, nor
that they are even related in any way to his alleged
employment.” Id. at 4. Stellar, Inc. and
Vincit contend that Chavez “fails to set forth any
facts sufficient to support a finding that he has personal
knowledge as to the entity to which he ‘applied to, was
offered, and accepted' employment, ” such as his
application and hiring documents, and that he fails to
explain why he thinks the wage statement came from Stellar,
Inc. and not Group VII. Id. at 4-5. Stellar, Inc.
and Vincit assert Chavez only “thinks” that he
applied for a job advertised by them, that he was hired by
Stellar, Inc., and that he received a wage statement from
Stellar, Inc. See Id. at 4-6. They state this is not
enough to establish purposeful direction or purposeful
availment. Id. Furthermore, even if Stellar, Inc.
and Vincit did receive Chavez's application, hire him, or
send him the wage statement, they argue that he “has
failed to offer any facts or evidence that show [they were]
likely to know [Chavez] would suffer numerous Labor Code
violations because of this.” Id. at 6.
Inc. and Vincit once again state that Chavez's claims do
not arise out of their alleged contacts with the forum state
because “simply maintaining an ‘interactive
website'” is insufficient to create personal
jurisdiction and Chavez has not alleged the postings had
anything to do with his specific employment. Id. at
8. Stellar, Inc. and Vincit argue that Chavez has not shown
that “but for” their conduct, his injury would
not have occurred. Id. As such, they contend Chavez
has failed “to meet his burden in establishing a prima
facie showing of specific jurisdiction.” Id.
respect to jurisdictional discovery, Stellar, Inc. and Vincit
maintain that Chavez's “last-minute request”
is based on a mere “hunch, ” and that the Court
should deny his request. Id. at 10-11. According to
Stellar, Inc. and Vincit, Chavez has failed to explain
“what limited discovery requests he would issue, on
what basis these claims relate to his burden of establishing
personal jurisdiction, [or] on what basis (other than a
hunch) he justifies his request.” Id. Stellar,
Inc. and Vincit argue that Chavez's request for
jurisdictional discovery is “entirely overbroad in that
it is not limited to potential contacts connected to his own