Chebotnikov v. LimoLink, Inc.

Filing 62

Judge F. Dennis Saylor, IV: ORDER entered. Memorandum and Order denying 52 Motion to Dismiss for Failure to State a Claim, or in the alternative, to Transfer Venue. (Cox, Spencer)

UNITED STATES DISTRICT COURT
DISTRICT OF MASSACHUSETTS
__________________________________________
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VLADIMIR CHEBOTNIKOV, EUGENE
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PANTYUKHIN, and YOUSEF SHARMA ,
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on behalf of themselves and others similarly
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situated,
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Plaintiffs,
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v.
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LIMOLINK, INC.,
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Defendant.
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__________________________________________ )

Civil Action No.
14-13475-FDS

MEMORANDUM AND ORDER ON DEFENDANT’S MOTION TO DISMISS OR,
IN THE ALTERNATIVE, TO TRANSFER VENUE
SAYLOR, J.
This is a putative class action under the Fair Labor Standards Act. Plaintiffs Vladimir
Chebotnikov, Eugene Pantyukhin, and Yousef Sharma are limousine drivers employed by
defendant LimoLink, Inc. They have filed suit on behalf of themselves and others similarly
situated, alleging that LimoLink violated federal and state law by failing to classify its drivers as
employees, failing to pay overtime, failing to pay gratuities, and failing to reimburse drivers for
expenses.
LimoLink has moved to dismiss under Fed. R. Civ. P. 12(b)(6) based on a provision in its
service-provider agreement that it contends mandates exclusive jurisdiction for any litigation in
Iowa. In the alternative, LimoLink has moved under 28 U.S.C. § 1404(a) to transfer venue to the
United States District Court for the Northern District of Iowa, again based on a provision in the
agreement.

For the following reasons, the motion to dismiss and the alternative motion to transfer
venue will be denied.
I.

Background
A.

Factual Relationship

LimoLink is an Iowa corporation. It brokers chauffeur services provided by individuals
that LimoLink classifies as independent contractors. (Hupfeld Aff. Ex. A). Plaintiffs allege that
they have all worked under contract as service providers for Limolink in Massachusetts. (Sec.
Amend. Compl. ¶ 10; Hupfeld Aff. Ex. A, B, C).
Each of the service-provider agreements is essentially identical. Each agreement contains
an arbitration clause and a forum-selection clause. The relevant language states:
If a dispute arises under the terms of this Agreement, such disputes shall be submitted to
arbitration in Cedar Rapids, Iowa . . . . In the event that the parties agree, in writing, to
forego arbitration and to litigate any disputes arising under this Agreement, the Parties
hereby agree to the sole and exclusive jurisdiction of the state and federal courts of Iowa
for resolution of any dispute arising from this Agreement . . . .
Hupfeld Aff. Ex. A, ¶ 9. That language is preceded by a choice-of-law provision that states,
“[t]his Agreement shall be governed by Iowa law without regard to the choice of law rules
thereof.” (Id. at ¶ 8).
B.

Procedural Background

On August 26, 2014, plaintiff Vladimir Chebotnikov filed a complaint on behalf of
himself and others similarly situated alleging that LimoLink has failed to classify its service
providers as employees in violation of Mass. Gen. Laws ch. 149 § 148B and 29 U.S.C. §§ 203 et
seq. (Counts 1 and 5), failed to pay overtime in violation of Mass. Gen. Laws ch. 151 § 1A and
29 U.S.C. §§ 203 et seq. (Counts 2 and 6), failed to distribute gratuities in violation of Mass.
Gen. Laws ch. 149 § 152A and 29 U.S.C. §§ 203 et seq. (Counts 3 and 7), and failed to

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compensate its limousine drivers for expenses related to their employment in violation of Mass.
Gen. Laws ch. 149 § 148, Mass. Gen. Laws ch. 151 § 1, and 29 U.S.C. §§ 203 et seq. (Counts 4
and 8). On September 24, 2014, Limolink filed an answer to the complaint and asserted two
counterclaims against Chebotnikov. Those counterclaims have since been dismissed. (Dkt.
No. 51, Joint Stipulation).
On October 22, 2014, Chebotnikov filed his first amended complaint. Limolink
answered the amended complaint on November 5, 2014. Plaintiff then filed a second amended
complaint on March 23, 2015, adding named plaintiffs Eugene Pantyukhin and Yousef Sharma.
On June 5, 2015, Limolink moved to dismiss under Fed. R. Civ. P. 12(b)(6) based on a
provision in its service-provider agreement that it contends mandates exclusive jurisdiction for
any litigation in Iowa. In the alternative, LimoLink moved under 28 U.S.C. § 1404(a) to transfer
venue to the United States District Court for the Northern District of Iowa.
II.

Standard of Review
On a motion to dismiss, the Court “must assume the truth of all well-plead[ed] facts and

give the plaintiff the benefit of all reasonable inferences therefrom.” Ruiz v. Bally Total Fitness
Holding Corp., 496 F.3d 1, 5 (1st Cir. 2007) (citing Rogan v. Menino, 175 F.3d 75, 77 (1st Cir.
1999)). When the parties have submitted and the court considers supplemental materials outside
the pleadings, the court must treat the motion as a motion for summary judgment. Trans–Spec
Truck Serv., Inc. v. Caterpillar, Inc., 524 F.3d 315, 321 (1st Cir. 2008). However, an exception
to this rule exists when the supplemental materials submitted are “documents the authenticity of
which are not disputed by the parties.” Alternative Energy, Inc. v. St. Paul Fire and Marine Ins.
Co., 267 F.3d 30, 33 (1st Cir. 2001); Rivera v. Centro de Turabo, Inc., 575 F.3d 10, 15 (1st Cir.
2009).

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The original complaint did not refer to the service-provider agreement. Instead,
LimoLink provided a copy of the agreement in connection with its motion to dismiss. Because
the service-provider agreement appears to be the relevant contract, and the parties do not dispute
the authenticity of the agreement, this Court will consider the agreement without converting the
motion into a motion for summary judgment.
III.

Analysis
Plaintiffs contend (1) that they were not bound by the forum-selection clause in the

service-provider agreement because they never agreed in writing, pursuant to the agreement, to
forego mandatory arbitration and to litigate disputes arising under the agreement in Iowa, and (2)
that their claims do not “arise from” the agreement. (Pls.’ Opp. 1).
Plaintiffs’ first argument is without merit. At a minimum, the filing of this claim clearly
constitutes a writing sufficient to forego arbitration. See Morales Rivera v. Sea Land of Puerto
Rico, Inc., 418 F.2d 725, 726 (1st Cir. 1969) (“When plaintiffs brought suit instead of seeking to
arbitrate, this was the clearest kind of waiver on their part of an agreement to arbitrate.”). 1
The next question is whether the forum-selection clause governs the claims asserted by
plaintiff. See Huffington v. T.C. Group, LLC, 637 F.3d 18, 21 (1st Cir. 2011). “[I]t is the
language of the forum-selection clause itself that determines which claims fall within its scope.”
Rivera, 575 F.3d at 19. The contractual language here is that the forum-selection clause applies
to “any dispute arising from this Agreement.” As a general matter, disputes “arising under,”
“arising out of,” or “arising from” the terms of an agreement must have their inception in the
agreement itself, instead of merely being related to the agreement or the relationship of the
parties. Indeed, the First Circuit has noted that the phrase “arising out of” is construed by courts

1

Defendants have not sought, at this stage, to enforce the arbitration clause.

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to be narrower than phrases such as “with reference to,” “relating to,” or “in connection with.”
Huffington, 637 F.3d at 22. The Court thus reads the forum-selection clause at issue here
narrowly, and concludes that only disputes that are sourced in the terms of the agreement are
subject to the forum-selection clause.
Furthermore, “suits to recover payments due under the FLSA, such as overtime
payments, are not dependent on the plaintiff’s employment agreement.” Pacheco v. St. Luke’s
Emergency Associates, P.C., 879 F.Supp.2d 136, 141 (D. Mass. 2012). In Pacheco, the language
of the forum-selection clause was “limited to disputes which are ‘derived out of this
[employment] agreement.” Id. at 140-41. The court found that where “derive” meant “take,
receive, or obtain especially from a specified source,” that the plaintiff’s FLSA rights were
distinct from the employment agreement. Id. at 141. According to the court, where “FLSA
claims do not depend on the existence of the employment contract, nor does the resolution of
[plaintiff’s] FLSA claims related to the interpretation of the employment contract[,]’ the forum
selection clause which is limited to claims which are derived from the employment contract does
not apply.” Id. (citing Saunders v. Ace Mortg. Funding, Inc., No. 05-1437, 2005 WL 3054594,
at *3 (D. Minn. Nov. 14, 2005)). The court found that the plaintiff’s FLSA claims were “not
dependent on any provision of the employment agreement, and [thus] not controlled by the
forum selection clause.” Pacheco, 879 F.Supp.2d at 142.
This case is essentially similar to Pacheco. Interpretation of an FLSA claim does not
“depend on the existence of [an] employment contract.” Id. at 141 (quoting Saunders, 2005 WL
3054594, at *3); see also Baker v. Flint Engineering & Const. Co., 137 F.3d 1436, 1440 (10th
Cir. 1998). Instead, the court must look to the economic reality of the relationship between the
parties. Chao v. Hotel Oasis, Inc., 493 F.3d 26, 33-34 (1st Cir. 2007). Thus, the service-

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provider agreement has no bearing on whether the plaintiffs’ claims that LimoLink has
improperly classified them as independent contractors, and plaintiffs’ FLSA claims are therefore
not subject to the forum-selection clause. The Massachusetts wage-law claims are essentially
identical to plaintiffs’ claims pursuant to the FLSA, and are similarly not governed by the forumselection clause in the service-provider agreement. Accordingly, Limolink’s motion to dismiss
will be denied.
Limolink’s motion in the alternative to transfer the case under 28 U.S.C. § 1404(a) is also
predicated on the application of the forum-selection clause in the service provider agreements.
Because the Court concludes that the forum-selection clause in the agreement does not govern
plaintiffs’ claims, defendant’s motion to transfer for improper venue will also be denied.
IV.

Conclusion
For the foregoing reasons, defendant's motion to dismiss or to transfer for improper

venue is DENIED.
So Ordered.

/s/ F. Dennis Saylor
F. Dennis Saylor IV
United States District Judge

Dated: December 11th, 2015

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