Case Information
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TASHIMA, Circuit Judge:
These are actions under the Fair Labor Standards Act (“FLSA”) brought by a group of exotic dancers against the club at which they worked, for asserted violations of the FLSA and Arizona state law. The district court dismissed the suit with prejudice for lack of subject-matter jurisdiction because the Dancers did not prove at the outset of the case that they were employees rather than independent contractors. As we explain below, the district court erred in reaching that decision. We reverse and remand for further proceedings.
BACKGROUND
Plaintiffs-Appellants Josephine Tijerino, Tamicka Toliver, and Jane Roe Dancer (collectively, the “Dancers”) all worked as exotic dancers at Lé Girls Gentlemen’s Club, a strip club in Phoenix, Arizona. The club is owned and operated by Defendants-Appellees Stetson Desert Project, LLC, dba Lé Girls Cabaret, Cory Anderson, and Cary Anderson (collectively, the “Club”). Initially, each dancer filed a separate complaint against the Club alleging violations of employment law. The Dancers all allege that the Club failed to pay them any wages in violation of the FLSA and willfully failed to pay them at the rate of Arizona’s minimum wage in violation of the Arizona Minimum Wage Act. See 29 U.S.C. § 206(a); Ariz. Rev. Stat. § 23-363. Separately, Tijerino and Toliver allege that the Club failed to pay them overtime wages in violation of the FLSA and willfully failed to pay their wages for labor in violation of the Arizona Wage Law. See 29 U.S.C § 207; Ariz. Rev. Stat. § 23-351. Jane Roe Dancer separately alleges that the Club was unjustly enriched in violation of Ariz. Rev. Stat. § 23-202.
Jane Roe Dancer filed her complaint as a collective action on behalf of herself and all other similarly situated individuals who worked at the Club as dancers. See 29 U.S.C. § 216(b). She filed a motion to consolidate the Dancers’ cases, which the district court granted. She also filed a motion for conditional certification and to authorize notice to putative class members, and she included a declaration in which she provided information suggesting that the exotic dancers who worked at the Club were similarly situated for purposes of the FLSA. Shortly after the cases were consolidated, the parties submitted a proposed joint case management order in which they agreed that “[t]he basis for the court’s subject-matter jurisdiction over plaintiff’s claims is the Fair Labor Standards Act, 29 U.S.C. § 201 et seq. . . .”
The district court denied the Dancers’ motion to conditionally certify an opt-in class and dismissed the case with prejudice for lack of subject-matter jurisdiction. First, in denying the motion to conditionally certify a FLSA opt-in class, the district court called such a motion “premature.” It held that Jane Roe “must satisfy her initial burden of alleging specific facts that permit an inference that she is an ‘employee’ (and the Defendants her ‘employer’) within the meaning of the FLSA.” It also noted that the Dancers’ status *4 as employees or independent contractors of the Club was “unsettled,” and ordered the Dancers to file a brief “on whether Plaintiff and her putative class are employees within the meaning of FLSA under the economic realities test.” 5 The district court next denied the Dancers’ renewed motion for conditional class certification and held that the Dancers were independent contractors, not employees. It held that § 216(b)’s requirement that employees bring actions under the statute constituted an “antecedent issue” of jurisdiction and thus that, if the Dancers were not employees under the FLSA, there could be no violation of the FLSA and therefore no federal question jurisdiction. The district court proceeded to evaluate the Dancers’ employment status under the FLSA’s economic realities test and declared them to be independent contractors. It then denied the Dancers’ motion to conditionally certify a FLSA opt-in class based on a lack of subject-matter jurisdiction.
Finally, the district court dismissed all three plaintiffs’ cases with prejudice for lack of subject-matter jurisdiction. [2] The district court “reiterate[d] its position that employee status under the FLSA is an antecedent jurisdictional issue,” and that plaintiffs had not “come forward with any evidence from which the Court could find a reasonable indicia of employment.”
The Dancers appeal from the final judgment, the order dismissing the cases with prejudice for lack of subject-matter jurisdiction, and the order denying their renewed motion for conditional certification of an FLSA opt-in class. [1] The district court later denied the Dancers’ motion to reconsider this order.
[2]
Although we need not examine the issue in detail because we
reverse the district court’s dismissal for other reasons, we note that, in
general, dismissal for lack of subject matter jurisdiction should be without
prejudice.
See Mo. ex rel. Koster v. Harris
,
6 T IJERINO V . S TETSON D ESERT P ROJECT APPELLATE JURISDICTION AND STANDARD OF
REVIEW
We have appellate jurisdiction under 28 U.S.C. § 1291. We review de novo a dismissal for lack of subject-matter jurisdiction. Leeson v. Transamerica Disability Income Plan 671 F.3d 969, 974 (9th Cir. 2012). A district court’s interpretation of federal law, such as the FLSA, is also reviewed de novo. Id .
DISCUSSION
I. The district court erred in concluding that it lacked
subject-matter jurisdiction.
Congress granted federal district courts “original
jurisdiction of all civil actions arising under the Constitution,
laws, or treaties of the United States.” 28 U.S.C. § 1331.
The Supreme Court has held that “Congress has given the
lower federal courts jurisdiction to hear . . . only those cases
in which a well-pleaded complaint establishes either that
federal law creates the cause of action or that the plaintiff’s
right to relief necessarily depends on resolution of a
substantial question of federal law.”
Franchise Tax Bd. v.
Constr. Laborers Vacation Trust for S. Cal.
, 463 U.S. 1,
27–28 (1983). “[A] federally created claim for relief is
generally a ‘sufficient condition for federal-question
jurisdiction.’”
Mims v. Arrow Fin. Servs., LLC
,
In order to determine whether the district court had subject-matter jurisdiction over the Dancers’ claims, we ask two questions. First, we ask whether the employment status provision—the statutory requirement that plaintiffs must be employees as defined in the FLSA, 20 U.S.C. § 203(e), in order to prevail in a § 216(b) action—is a jurisdictional limitation on the statute’s coverage such that it prevents the Dancers from moving forward with their claims. Second, we *6 ask whether the Dancers’ complaints survive the well-pleaded complaint rule to invoke federal question subject-matter jurisdiction.
A. The Dancers’ employment status is a merits-based determination, not an antecedent jurisdictional issue.
If the employment status provision of the statute is jurisdictional, then district courts would be required to analyze whether plaintiffs are employees under the FLSA at the outset of the litigation under Federal Rule of Civil Procedure 12(b)(1), as the district court did in this case. But if the employment status provision is an essential ingredient related to the merits of a claim, then whether plaintiffs are employees should be decided at summary judgment or trial, assuming the complaint sufficiently alleges that plaintiffs are employees.
In determining whether a statutory provision constitutes a jurisdictional limitation or an “essential ingredient” of a claim, the Supreme Court has set forth a bright-line test:
If the Legislature clearly states that a threshold limitation on a statute’s scope shall count as jurisdictional, then courts and litigants will be duly instructed and will not left to wrestle with the issue. But when Congress does not rank a statutory limitation on coverage as jurisdictional, courts should treat the restriction as nonjurisdictional in character.
Arbaugh v. Y & H Corp. , 546 U.S. 500, 515–16 (2006) (internal citation omitted). A limitation on a statute’s scope counts as a jurisdictional limitation only if Congress clearly “intended” it to be jurisdictional such that courts should raise the issue “on their own motion.” Id. at 514. Otherwise courts should treat the statutory threshold as nonjurisdictional. Id .
In Arbaugh , a restaurant challenged its former waitress’ Title VII sexual harassment claim after the close of trial, arguing that the district court lacked subject-matter jurisdiction over the case because Title VII’s statutory definition of “employer” did not include restaurants of its size. Id. at 504 (“Y & H asserted that it had fewer than 15 employees on its payroll and therefore was not amenable *7 to suit under Title VII.”). Noting the tendency of courts to conflate subject-matter jurisdiction with the “plaintiff’s need and ability to prove the defendant bound by the federal law asserted as the predicate for relief —a merits-related determination ,” the Supreme Court set out to clarify this “dichotomy.” Id. at 511 (emphasis added). The Court held that, “if subject-matter jurisdiction turns on contested facts, the trial judge may be authorized to review the evidence and resolve the dispute on her own. If satisfaction of an essential element of a claim for relief is at issue, however, the jury is the proper trier of contested facts.” Id. at 514 (internal citations omitted).
Subsequently, in
Reed Elsevier, Inc. v. Muchnick
,
Congress did not clearly label the FLSA employment
status provision as jurisdictional. “As in all cases involving
statutory construction, our starting point must be the language
employed by Congress.”
Am. Tobacco Co. v. Patterson
29 U.S.C. § 216(b).
[3]
Section 216(b)’s requirement that
employers be liable to
employees
for violations of the FLSA
is not clearly labeled as jurisdictional. In fact, there is not
even a mention of jurisdiction in this section (besides a
general reference to a “court of competent jurisdiction”), and
there is no indication whatsoever that employee status is a
jurisdictional limitation. Compare this to the statute in
Reed
Elsevier
, in which even “the presence of the word
“jurisdiction” in the last sentence of [the statutory provision]”
did not render that requirement jurisdictional.
Reed Elsevier
Section 203(e) and § 216(b) are not located in
jurisdiction-granting provisions of the statute. In
Arbaugh
the Court concluded that Congress did not intend that Title
VII’s definition of the term “employer” be jurisdictional
because Congress placed the term’s definition in a section
titled “Definitions”—“a separate provision that ‘does not
speak in jurisdictional terms or refer in any way to the
jurisdiction of the district courts.’”
Arbaugh
,
Furthermore, courts have not historically treated § 203(e)
and § 216(b)’s employment status provisions as
jurisdictional. Although the Court in
Reed Elsevier
found
previous treatment of the Copyright Act’s registration
requirement as jurisdictional, it still concluded “that
§ 411(a)’s registration requirement [was] nonjurisdictional,
notwithstanding its prior jurisdictional treatment.” 559 U.S.
*10
at 169. Here, courts have not historically treated the
employment status provision as jurisdictional; in similar
cases, both the Fourth and Fifth Circuits have treated this
question as nonjurisdictional.
See McFeeley v. Jackson St.
Entm’t LLC
,
There is no support for the district court’s theory that the
employment status provision constitutes an antecedent
jurisdictional issue, and we can find no reasons that
“necessitate[]
that
the provision be construed as
jurisdictional.”
Leeson
,
In summary, under the
Arbaugh
test, it is clear that the
FLSA’s employment status provision in § 203(e) and
§ 216(b) should be construed as nonjurisdictional. Our
conclusion is also supported by applications of this test to
other employment-related statutory provisions.
See Day
698 F.3d at 1099–1100;
Leeson
, 671 F.3d at 979. Most
importantly, Congress did not state that the statute’s
employment status provision was jurisdictional, and § 203(e)
and § 216(b) are not located in jurisdiction-granting
provisions of the statute. Finally, courts have not historically
treated the employment status provision as jurisdictional.
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The term “employee” in the FLSA “serves to identify those
plaintiffs who may be entitled to relief, not to limit the
[4]
The district court also cited to
Dellinger v. Sci. Applications Int’l
Corp.
, in support of this proposition.
Dellinger
, however, is
distinguishable in that the plaintiff was never hired by nor performed any
work for the defendant: a prospective employer.
See
authority of federal courts to adjudicate claims” under the FLSA. Id. at 978.
B. The allegations were not so patently without merit as to justify dismissal for lack of subject-matter jurisdiction.
Having held that the FLSA’s employment status provision
in § 203(e) and § 216(b) is nonjurisdictional, we now turn to
the Dancers’ complaints to ensure that they allege a
substantial issue of federal law that is sufficient to invoke
subject-matter jurisdiction. A complaint for relief properly
invokes federal jurisdiction where its well-pleaded allegations
establish “either that federal law creates the cause of action or
that the plaintiff’s right to relief necessarily depends on
resolution of a substantial question of federal law.”
Franchise Tax Bd.
,
Here, the Dancers’ complaints facially allege substantial issues of federal law: whether the Dancers could collectively recover damages under § 216(b) for the Club’s failure to pay them at the required minimum wage and at the required overtime rate, for hours worked in excess of 40 per week, in violation of § 206 and § 207 of the FLSA. Moreover, the
T IJERINO V . S TETSON D ESERT P ROJECT 15 Dancers allege numerous facts supporting their claims that the Club owes them wages because they are employees under the FLSA, and relatedly, under Arizona state law. The claims in the Dancers’ complaints are not “wholly insubstantial and frivolous,” and are not so patently without merit as to warrant dismissal for lack of subject-matter jurisdiction. Arbaugh 546 U.S. at 513 n.10. Therefore, there is federal question subject-matter jurisdiction to hear the Dancers’ § 216(b) claims pursuant to 28 U.S.C. § 1331, and there is supplemental jurisdiction over the state law claims. II. The Dancers’ other arguments on appeal
The Dancers make two additional arguments on appeal.
First, they ask us to remand with instructions to grant the
Dancers’ motion for conditional class certification under the
FLSA. The district court did not reach a merits-based
analysis of conditional certification because it erroneously
determined that it lacked subject-matter jurisdiction over the
case. Our holding that employee status under the FLSA is
nonjurisdictional necessarily reverses the reasoning of the
district court’s denial of conditional certification. On
remand, the district court will have the opportunity to
determine whether to conditionally certify an FLSA
collective action in accordance with our precedent.
See
Campbell v. City of Los Angeles
,
Second, the Dancers ask us to remand with instructions
“to adjudicate the merits of the Dancers’ claims in accordance
with well-established case law applying the FLSA’s
economic realities test.” The district court applied the
economic realities test in reaching its conclusion that it lacked
subject-matter jurisdiction. Because we reverse the district
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court’s conclusion that it lacked subject-matter jurisdiction,
on remand, it will have the opportunity to address the
economic realities test when it addresses the merits of the
Dancers’ FLSA claims.
See Real v. Driscoll Strawberry
Assocs., Inc
.,
CONCLUSION
For the reasons set forth above, we reverse the district court’s dismissal of these actions for lack of subject-matter jurisdiction, and remand for further proceedings consistent with this opinion.
REVERSED and REMANDED.