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Chavez v. Stellar Management Group VII, LLC

United States District Court, N.D. California

June 28, 2019

DAVID CHAVEZ, on behalf of himself and all others similarly situated, Plaintiff,
v.
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. NO. 18

          JOSEPH C. SPERO CHIEF MAGISTRATE JUDGE

         I. INTRODUCTION

         In this 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.

         The 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.[1]

         II. BACKGROUND

         A. Allegations of the Complaint

         Chavez 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.[2] 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. ¶ 20.

         B. The Parties' Arguments and Evidence

         1. Stellar, Inc. and Vincit's Motion and Declarations of Morrie Casura and Tammy Way

         Stellar, 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.

         Stellar, 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.

         2. Chavez's Opposition, Declarations, and Request for Jurisdictional Discovery

          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.

         Chavez 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 California.

         Chavez 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.

         3. Stellar, Inc. and Vincit's Reply in Support of Dismissal

          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.

         Stellar, 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. at 7.

         With 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 claims.” Id.

         II ...


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