TANGGANG “DAN” YUAN v. EIGHTFOLD AI INC.
Case No. 24-cv-04238-AMO
UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF CALIFORNIA
May 30, 2025
ARACELI MARTINEZ-OLGUIN
Re: Dkt. No. 74
I. BACKGROUND
In November 2021, Yuan accepted a contracted job offer from Eightfold, a company with its principal place of business in California, and began work eleven days later.1 Amended Complaint (“Am. Compl.“) (ECF 71) ¶¶ 2, 6. At the time he was hired and at all times he worked for Eightfold, Yuan resided in Massachusetts, and Eightfold deducted Massachusetts state taxes from his paychecks. Am. Compl. ¶¶ 3, 23. In May 2022, Yuan and his partner learned that their surrogate was pregnant with twins. Am. Compl. ¶ 14. On November 7, 2022, the twins were born
Yuan filed the instant action in Massachusetts state court on October 30, 2023. ECF 1-1. On December 1, 2023, Eightfold removed the case to the District of Massachusetts. ECF 1. On January 10, 2024, Eightfold moved to transfer the case to this Court pursuant to
II. DISCUSSION
In addition to claims under California law, Yuan asserts violations of the Massachusetts sick time statute,
A motion to dismiss under
When a case has been transferred from another state‘s federal court under
A. Conflict of Laws
The first step in the choice of law analysis is to determine whether there is an actual conflict between the laws of the two states involved. Cohen v. McDonnell Douglas Corp., 450 N.E.2d 581, 584 n.7 (Mass. 1983). Eightfold argues that because California state law provides causes of action arising from the same factual allegations on which Yuan‘s Massachusetts state law claims are based, no conflict exists. Yuan does not dispute that his claims are actionable under California law, but argues a conflict exists because there would be a difference in the
Here, a conflict exists between California and Massachusetts law because, if successful on his claims, Yuan would be entitled to a different amount of damages depending on whether he asserted claims under California‘s wage laws or their counterparts in Massachusetts law. For example, under California law, Yuan would be entitled to a maximum of one month‘s salary, regardless of the amount of unpaid wages,
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Where there is a conflict of laws, courts must then engage in a choice of law analysis to determine which state‘s law should be applied. Eightfold argues Yuan‘s employment agreement requires application of California law. That provision reads:
The terms of this letter agreement and the resolution of any disputes as to the meaning, effect, performance, or validity of this letter agreement or arising out of, related to, or in any way connected with this letter agreement, your employment with the Company or any other relationship between you and the Company (the “Disputes“) will be governed by California law, excluding laws relating to conflicts or choice of law.
ECF 74-2. However, under Massachusetts law, a contractual choice of law provision is not dispositive where it does not clearly reference statutory claims. Bean v. NICE Sys., Inc., No. CV 23-12394-BEM, 2025 WL 1248899, at *6 (D. Mass. Apr. 30, 2025); see also Melia v. Zenhire, Inc., 967 N.E.2d 580, 590 (Mass. 2012) (holding “the contract‘s choice of New York law would not govern the Wage Act claim” because the contract made “no reference to statutory causes of action“). The provision in the agreement Yuan signed does not reference statutory causes of action. Thus, it does not dictate the law applicable to Yuan‘s claims.
The Court thus proceeds to conduct a choice of law analysis, which, under Massachusetts law, is a “functional” approach that responds to the “interests of the parties, the States involved, and the interstate system as a whole.” Bean, 2025 WL 1248899, at *5 (citing Bushkin Associates, Inc. v. Raytheon Co., 393 Mass. 622, 631 (1985)). Pursuant to this approach, courts should apply the substantive law of the state with the most significant relationship to the transaction in the litigation. Id. (citing Hendricks & Assocs., Inc. v. Daewoo Corp., 923 F.2d 209, 212 n.3 (1st Cir. 1991)). This approach is guided by the Restatement (Second) of Conflict of Laws, Viscito v. Nat‘l Plan. Corp., 34 F.4th 78, 83 (1st Cir. 2022), and instructs courts to identify the state with the most significant relationship by considering the following factors:
- the place of contracting; 2) the place of negotiation of the contract; 3) the place of performance; 4) the location of the subject matter of the contract; and 5) the domicile, residence, nationality and place of incorporation of the parties; 6) the needs of the interstate and international system; 7) the relevant policies of the forum; 8) the interest of
those states in the determination of the particular issue; 9) the protection of justified expectations; 10) the basic policies underlying the particular field of law; 11) certainty, predictability and uniformity of result; and 12) ease in the determination and application of the law to be applied.
Dunfey v. Roger Williams Univ., 824 F. Supp. 18, 20 (D. Mass. 1993) (internal citations omitted).
Massachusetts has a more significant relationship to the instant action than California. Massachusetts is the place of performance of the contract and the location of the subject matter of the contract, since Yuan resided in and worked remotely from Massachusetts. Berrey v. Evolve Cellular, Inc., No. CV 23-11433-LTS, 2023 WL 11199739, at *9 (D. Mass. Oct. 31, 2023). Moreover, “[i]n general, it is fitting that the state whose interests are most deeply affected should have its local law applied.” Restatement, § 6 cmt. f. Here, Massachusetts has a “fundamental policy interest in enforcing the Massachusetts Wage Act,” which weighs strongly in favor of applying Massachusetts law. Bean, 2025 WL 1248899, at *5 (citing Levesque, 368 F. Supp. 3d at 312) (finding Massachusetts had the most significant contacts to the case where the plaintiff lived and worked there, and, “most importantly” because of Massachusetts‘s “fundamental policy interest“); see also Berrey, 2023 WL 11199739, at *9 (noting “the strongest factor” is Massachusetts‘s policy interest). Factors 3, 4, 7, and 8 thus favor application of Massachusetts law. So do factors 9, 11, and 12, as “considerations of expectations, certainty, predictability, uniformity and ease of determination of the proper law to apply are all served by the application of Massachusetts law.” Berrey, 2023 WL 11199739, at *9 (noting these factors weigh in favor of applying Massachusetts law when determining wages owed to Massachusetts residents hired by and working remotely for out-of-state companies).
The remaining factors do not favor application of either state‘s law, as it is unclear in which state each party signed the agreement, and Yuan does not allege that he negotiated any terms of the contract - although the location of a contract‘s negotiation and execution is not dispositive of these factors in any event. See Levesque, 368 F. Supp. 3d at 312 (citing Bushkin Assocs., Inc. v. Raytheon Co., 393 Mass. 622, 631, 473 N.E.2d 662, 668 (1985) (noting the choice of law question does not “turn on where the contract was made“)). Factors 5, 6, and 10 also do not strongly favor application of either California or Massachusetts law. See Berrey, 2023 WL 11199739, at *9.
Weighing the factors, the Court finds Massachusetts has the most significant relationship to the instant action. Yuan began his employment with Eightfold in Massachusetts and resided there for the entirety of his employment at the company, during which time Eightfold deducted Massachusetts state taxes from his paychecks, Am. Compl. ¶¶ 3, 23, and Massachusetts has a policy interest in enforcing its wage laws. See Levesque, 368 F. Supp. 3d at 312 (finding Massachusetts had the most significant relationship with the litigation where, among other things, plaintiff worked from Massachusetts for years and defendant withheld Massachusetts income tax from plaintiff‘s pay).
Eightfold‘s cited authorities does not persuade the Court otherwise. In Crowe v. Harvey Klinger, Inc., for example, the plaintiff had worked at the defendant literary agency‘s office in New York for over a decade before moving to Massachusetts, where she worked and resided for a year until resigning from the agency. No. CV 16-12033-JGD, 2018 WL 6819329, at *7 (D. Mass. Dec. 27, 2018). After her move, she visited New York occasionally and maintained an office there. Id. The plaintiff testified that after many years at the defendant agency, the effect of her move on her job was “[j]ust that [she] was doing it from Massachusetts.” Id. In contrast, Yuan had no such existing employment with Eightfold prior to commencing remote work for the company in November 2021, had no office in California, and never visited California.
Eightfold further argues that the relevant contacts are so “widely dispersed between California and Massachusetts” that “determination of the state of the applicable law without regard to the parties’ choice would present real difficulties,” so the Court should honor the parties’ choice of law - which, Eightfold contends, is California law. See ECF 74-1 at 8-9 (citing Hodas v. Morin, 442 Mass. 544, 552, 814 N.E.2d 320, 326 (2004)). Even if the Court were to determine that the parties had in fact contracted that California law would govern any statutory claims, Eightfold has not shown that the circumstances here present “real difficulties” like those presented by the complicated set of facts facing the Massachusetts Supreme Judicial Court in Hodas. In that case, genetic parents brought an action against their gestational carrier seeking a prebirth judgment of parentage. Hodas, 442 Mass. at 545. The parties resided in different states, and the hospital
III. CONCLUSION
For the foregoing reasons, Eightfold‘s motion to dismiss is DENIED.
IT IS SO ORDERED.
Dated: May 30, 2025
ARACELI MARTINEZ-OLGUIN
United States District Judge