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3:19-cv-01353
N.D. Cal.
Aug 5, 2020
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Background

  • Plaintiffs (named California employees) sued Stellar Management Group VII, Stellar Management Group, Inc. and The Vincit Company under the FLSA (collective) and California law (class for CA workers); defendants are Tennessee-based.
  • The FAC alleges uniform, nationwide pay policies that underpaid hourly non-exempt workers and omitted accurate wage statements; plaintiffs seek an FLSA collective covering nationwide hourly, non-exempt employees.
  • Several putative opt-in collective members joined after filing, including at least one who worked in Lufkin, Texas.
  • Defendants Stellar Inc. and Vincit LLC previously moved to dismiss; the court found no general jurisdiction but held specific jurisdiction as to California-based plaintiffs and denied renewed motions to dismiss.
  • Defendants moved to dismiss claims of out-of-state opt-ins for lack of personal jurisdiction, arguing Bristol-Myers Squibb precludes jurisdiction over plaintiffs without connections to California.
  • The court denied the motion: it held Bristol-Myers does not strip federal courts of jurisdiction over FLSA collective claims and exercised pendent personal jurisdiction over out-of-state opt-in claims because they arise from a common nucleus of operative facts with the California plaintiffs.

Issues

Issue Plaintiff's Argument Defendant's Argument Held
Whether Bristol-Myers limits a federal court’s personal jurisdiction over out-of-state opt-in FLSA plaintiffs Bristol-Myers does not apply to federal courts hearing federal-law claims; federalism concerns are absent. Bristol-Myers bars jurisdiction for plaintiffs who lack contacts with the forum state. Court held Bristol-Myers does not divest federal courts of jurisdiction over FLSA collective claims.
Whether the court may decide personal-jurisdiction for opt-ins before collective certification Plaintiffs did not oppose early resolution; at least one opt-in already joined, making the issue ripe. Defendants’ jurisdictional challenge was timely and appropriate despite pending certification. Court allowed the Rule 12(b)(2) challenge and ruled on it prior to certification.
Whether the court can exercise pendent personal jurisdiction over out-of-state opt-ins Opt-in claims arise from the same nationwide, uniform employment policy — common nucleus of operative facts. Defendants argued each opt-in lacks an independent forum connection and Bristol-Myers forbids jurisdiction. Court exercised pendent jurisdiction over out-of-state opt-ins to promote efficiency and avoid piecemeal litigation.

Key Cases Cited

  • Bristol-Myers Squibb Co. v. Superior Court, 137 S. Ct. 1773 (2017) (Supreme Court holding California courts lacked personal jurisdiction over nonresident plaintiffs with no connection to forum)
  • Int’l Shoe Co. v. Washington, 326 U.S. 310 (1945) (establishing minimum contacts due process test for specific jurisdiction)
  • Dole Food Co. v. Watts, 303 F.3d 1104 (9th Cir. 2002) (articulating Ninth Circuit specific-jurisdiction framework aligning state-law and federal due-process analysis)
  • Action Embroidery Corp. v. Atl. Embroidery, Inc., 368 F.3d 1174 (9th Cir. 2004) (permitting pendent personal jurisdiction where claims share a common nucleus of operative facts)
  • Campbell v. City of Los Angeles, 903 F.3d 1090 (9th Cir. 2018) (describing FLSA collective procedure and that opt-in plaintiffs obtain party status)
  • Sloan v. Gen. Motors LLC, 287 F. Supp. 3d 840 (N.D. Cal. 2018) (explaining Bristol-Myers does not apply to federal courts and endorsing pendent jurisdiction over out-of-state plaintiffs in federal-question cases)
  • Goodyear Dunlop Tires Operations, S.A. v. Brown, 564 U.S. 915 (2011) (corporate forum contacts insufficient for specific jurisdiction over unrelated claims)
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Case Details

Case Name: Chavez v. Stellar Management Group VII, LLC
Court Name: District Court, N.D. California
Date Published: Aug 5, 2020
Citation: 3:19-cv-01353
Docket Number: 3:19-cv-01353
Court Abbreviation: N.D. Cal.
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    Chavez v. Stellar Management Group VII, LLC, 3:19-cv-01353