Greene et al v. Dayton et al

Filing 66

MEMORANDUM OF LAW & ORDER. IT IS HEREBY ORDERED: 1. Defendant SEIU Healthcare Minnesota's Motion to Dismiss the Amended Complaint 43 is GRANTED. 2. The State Defendants' Motion to Dismiss the Amended Complaint 47 is GRANTED. 3. Defendant SEIU Healthcare Minnesota's Motion for Rule 11 Sanctions 57 is DENIED. 4. The Amended Complaint is DISMISSED WITH PREJUDICE.LET JUDGMENT BE ENTERED ACCORDINGLY. (Written Opinion). Signed by Chief Judge Michael J. Davis on 1/26/15. (GRR)

UNITED STATES DISTRICT COURT
DISTRICT OF MINNESOTA

KRISTINA GREENE, et al.,
Plaintiffs,

v.

MEMORANDUM OF LAW & ORDER
Civil File No. 14-3195 (MJD/LIB)

MINNESOTA GOVERNOR
MARK DAYTON, et al.,
Defendants.

Tara Craft Adams, Thomas R. Revnew, and Douglas P. Seaton, Seaton, Peters &
Revnew, PA, Counsel for Plaintiffs.
Alan I. Gilbert and Jacob D. Campion, Minnesota Attorney General’s Office,
Counsel for Defendants Mark Dayton, Josh Tilsen, and Lucinda Jesson.
Peder J.V. Thoreen and Scott A. Kronland, Altshuler Berzon LLP, and Brendan
D. Cummins and Justin D. Cummins, Cummins & Cummins, PLLP, Counsel for
Defendant SEIU Healthcare of Minnesota.

I.

INTRODUCTION
This matter is before the Court on Defendant SEIU Healthcare Minnesota’s

Motion to Dismiss the Amended Complaint [Docket No. 43] and Defendants
Mark Dayton, Josh Tilsen, and Lucinda Jesson’s Motion to Dismiss the Amended
1

Complaint [Docket No. 47]. Also before the Court is Defendant SEIU Healthcare
of Minnesota’s Motion for Rule 11 Sanctions [Docket No. 57]. The Court heard
oral argument on the Motion for Rule 11 Sanctions on December 12, 2014, and
considered the motions to dismiss on the parties’ submissions.
For the reasons set forth below, the Court grants the Motions to Dismiss
the Amended Complaint and denies Defendant SEIU Healthcare of Minnesota’s
Motion for Rule 11 Sanctions.
II.

BACKGROUND
A.

Factual Background
1.

The Parties

Plaintiffs are six individuals who allege they provide homecare services to
disabled individuals and family members as part of Minnesota’s Medicaid
programs. (Am. Compl. ¶¶ 1-6 [Docket No. 42].) Under these programs, the
State of Minnesota pays homecare providers, like Plaintiffs, to deliver vital
“direct support services” to individuals with disabilities or the elderly. See
Minn. Stat. § 256B.0711, subd. 1(b).
Defendant SEIU Healthcare Minnesota (“SEIU”) is a labor organization,
elected in 2014 to represent personal healthcare attendants in Minnesota. (Am.
Compl. ¶¶ 10, 27 and Ex. D.) Defendant Mark Dayton is sued in his official
2

capacity as the governor of Minnesota. (Id. ¶ 7.) Defendant Josh Tilsen is sued
in his official capacity as the Commissioner of the Bureau of Mediation Services
(“BMS”), which administers labor relations programs in Minnesota. (Id. ¶ 8.)
Defendant Lucinda Jesson is sued in her official capacity as the Commissioner of
the Minnesota Department of Human Services (“DHS”), which provides
essential services to Minnesota seniors, people with disabilities, and children.
(Id. ¶ 9.)
2.

The Individual Providers of Direct Support Services
Representation Act

In the Amended Complaint, Plaintiffs challenge the Individual Providers
of Direct Support Services Representation Act (“Act”), 2013 Minn. Law Ch. 128,
Art. 2, codified at Minn. Stat. § 179A.54, § 256B.0711. (Am. Compl. p. 1.) The
Act, signed by Governor Dayton on May 24, 2013, provides that, “[f]or the
purposes of the Public Employment Labor Relations Act . . . individual
[homecare] providers shall be considered . . . executive branch state employees. .
. . This section does not require the treatment of individual providers as public
employees for any other purpose.” Minn. Stat. § 179A.54, subd. 2; see also Minn.
Stat. § 179A.54, subd. 1(b); Minn. Stat. § 256B.0711, subd. 1(d).

3

3.

The Election of SEIU as Exclusive Representative for
Individual Homecare Providers

Under Minnesota’s Public Employment Labor Relations Act (“PELRA”),
public employees have “the right by secret ballot to designate an exclusive
representative to negotiate . . . the terms and conditions of employment with
their employer.” Minn. Stat. § 179A.06, subd. 2. Once a union is certified under
PELRA, the public employer “has an obligation to meet and negotiate in good
faith with the exclusive representative . . . regarding . . . the terms and conditions
of employment.” Minn. Stat. § 179A.07, subd. 2. For state employees, any
agreement reached must be presented to the Minnesota legislature for approval
or rejection. Minn. Stat. § 179A.22, subd. 4. If a union is certified under PELRA,
the employees in the bargaining unit are not required to become members of the
union: PELRA gives employees the “right not to . . . join such organizations” and
makes it an “unfair labor practice” for public employers or employee
organizations to “restrain[] or coerce[]” employees in the exercise of that right.
Minn. Stat. § 179A.06, subd. 2; § 179A.13, subds. 1, 2(1), 3(1).
On August 26, 2014, SEIU was certified as the exclusive representative for
individual homecare providers. (Am. Compl. ¶ 27 and Ex. D.)

4

B.

Procedural History
1.

Motion for Preliminary Injunctive Relief

On August 18, 2014, Plaintiffs filed a Complaint against Defendants
Minnesota Governor Mark Dayton; BMS; Josh Tilsen, in his official capacity as
BMS Commissioner; DHS; Lucinda Jesson, in her official capacity as DHS
Commissioner; and SEIU. [Docket No. 1] The Complaint alleged one count of
Preemption by Federal Labor Law. Also on August 18, Plaintiffs filed a Motion
for Preliminary Injunction, or in the Alternative, a Temporary Restraining Order
requesting that the Court enjoin Defendants from implementing or enforcing the
Act by impounding the ballots. [Docket No. 5]
In a Memorandum of Law & Order dated August 25, 2014, this Court
denied Plaintiffs’ motion for preliminary injunctive relief, finding that the
Plaintiffs had failed to demonstrate a likelihood of success on the merits. See
Greene, et al. v. Dayton, et al., Civil File No. 14-3195 (MJD/LIB) (D. Minn. Aug.
25, 2014) [Docket No. 36]. The Court also dismissed all claims relating to
Defendant BMS and Defendant DHS based on Eleventh Amendment immunity.
2.

The Amended Complaint and Motions to Dismiss

On September 9, 2014, the Plaintiffs filed an Amended Complaint asserting
three counts: (1) Preemption under the National Labor Relations Act (“NLRA”);
5

(2) Tortious Interference with Employment; (3) and Violation of the Contracts
Clauses of the United States and Minnesota Constitutions. [Docket No. 42]
On September 18, 2014, SEIU filed a Motion to Dismiss the Amended
Complaint in its entirety for failure to state a claim under Rule 12 of the Federal
Rules of Civil Procedure and, in the alternative, dismissal of Counts II and III for
lack of ripeness. [Docket No. 43] On September 23, 2014, Governor Dayton,
Commissioner Tilsen, and Commissioner Jesson (the “State Defendants”) moved
to dismiss the Amended Complaint for lack of jurisdiction and failure to state a
claim pursuant to Rules 12(b)(1) and 12(b)(6) of the Federal Rules of Civil
Procedure. [Docket No. 47]
3.

The Motion for Sanctions

On October 31, 2014, SEUI filed a motion for sanctions pursuant to Rule 11
of the Federal Rules of Civil Procedure. [Docket No. 57]
III.

MOTIONS TO DISMISS
A.

Standard of Review

Under Rule 12(b)(6) of the Federal Rules of Civil Procedure, a party may
move the Court to dismiss a claim if, on the pleadings, a party has failed to state
a claim upon which relief may be granted. In reviewing a motion to dismiss, the

6

Court takes all facts alleged in the complaint to be true. Zutz v. Nelson, 601 F.3d
842, 848 (8th Cir. 2010).
To survive a motion to dismiss, a complaint must contain sufficient
factual matter, accepted as true, to state a claim to relief that is
plausible on its face. Thus, although a complaint need not include
detailed factual allegations, a plaintiff’s obligation to provide the
grounds of his entitlement to relief requires more than labels and
conclusions, and a formulaic recitation of the elements of a cause of
action will not do.
Id. (citations omitted).
“Jurisdictional issues, whether they involve questions of law or of fact, are
for the court to decide.” Osborn v. United States, 918 F.2d 724, 729 (8th Cir.
1990). “In order to properly dismiss for lack of subject matter jurisdiction under
Rule 12(b)(1), the complaint must be successfully challenged on its face or on the
factual truthfulness of its averments.” Titus v. Sullivan, 4 F.3d 590, 593 (8th Cir.
1993) (citation omitted).
B.

Count I

The State Defendants and SEIU move to dismiss Count I of the Amended
Complaint for failure to state a claim. In Count I, Plaintiffs aver that the Act is
preempted by the National Labor Relations Act (“NLRA”) because personal care
attendants are domestic employees who are excluded from coverage under the
NLRA, based on the Supreme Court’s decision in Harris v. Quinn, 134 S.Ct. 2618
7

(2014) and 29 U.S.C. § 152(3). (Am. Compl. ¶¶ 29-33.) Defendants argue that
dismissal as a matter of law is appropriate for the same reasons as the Court
previously held in denying Plaintiffs’ motion for preliminary injunctive relief.
The Court agrees.
The Supreme Court has adopted two NLRA preemption principles.
Metro. Life Ins. Co. v. Mass., 471 U.S. 724, 748 (1985). First, “[t]he so-called
Garmon rule protects the primary jurisdiction of the NLRB to determine in the
first instance what kind of conduct is either prohibited or protected by the
NLRA.” Id. (citing San Diego Bldg. Trades Council v. Garmon, 359 U.S. 236
(1959)). Second, Machinists preemption “protects against state interference with
policies implicated by the structure of the Act itself, by pre-empting state law
and state causes of action concerning conduct that Congress intended to be
unregulated.” Id. at 749; see also Machinists v. Wis. Emp’t Relations Comm’n,
427 U.S. 132 (1976).
In denying Plaintiffs’ motion for preliminary injunctive relief, this Court
analyzed whether the NLRA preempts the Act under both the Garmon and
Machinist standard. As discussed in that opinion, Sections 7 and 8 of the NLRA
only give rights to those classified as “employees” by the statute. See 29 U.S.C.

8

§§ 157, 158(a)(1), (b)(1). Individuals employed “in the domestic service of any
family or person at his home,” like Plaintiffs, are excluded from the definition of
“employee” under 29 U.S.C. § 152(3). The Supreme Court in Harris v. Quinn
recently referred to Illinois’ homecare providers as “personal assistants,” and
reaffirmed that they are not covered by the NLRA:
Federal labor law reflects the fact that the organization of household
workers like the personal assistants does not further the interests of
labor peace. “[A]ny individual employed . . . in the domestic service
of any family or person at his home” is excluded from coverage
under the National Labor Relations Act. See 29 U.S.C. § 152(3).
134 S. Ct. at 2624, 2640. Because homecare providers are excluded from NLRA
coverage through the domestic services exclusion, this Court concluded that
Garmon preemption does not apply. Greene, et al. v. Dayton, et al., Civil File
No. 14-3195 (MJD/LIB), slip op. at 16-17 (D. Minn. Aug. 25, 2014).
Under the Machinist standard, this Court held that “there is no indication
that Congress intended the area of domestic services to be free from all
regulation.” (Id. 17-18.) As noted, courts have held that the exclusion of
agricultural workers under 29 U.S.C. § 152(3) did not preempt state regulation of
labor relations of those workers. See Willmar Poultry Co., Inc. v. Jones, 430 F.
Supp. 573, 578 (D. Minn. 1977) (Alsop, J.) (concluding that state regulation of

9

agricultural laborers was likely not preempted because of the lack of legislative
history or indication of intent to leave them unregulated); United Farm Workers
of Am., AFL-CIO v. Ariz. Agric. Emp’t Relations Bd., 669 F.2d 1249, 1257 (9th Cir.
1982) (“We find nothing in the [NLRA] to suggest that Congress intended to
preempt such state action by legislating for the entire field. Indeed, we draw
precisely the opposite inference from Congress’s exclusion of agricultural
workers from the Act.”). Accordingly, this Court held that Plaintiffs were
unlikely to succeed under the Machinist preemption standard. Greene, et al. v.
Dayton, et al., Civil File No. 14-3195 (MJD/LIB), slip op. at 17-18 (D. Minn. Aug.
25, 2014).
In the Amended Complaint, Plaintiffs focus solely on the Machinist
standard, alleging that 29 U.S.C. § 152(3) was intended to be a total and complete
exclusion of the category of domestic service workers from collective bargaining.
The only new factual allegations in the Amended Complaint relate to the
outcome of the election.
As discussed above, this Court has already squarely addressed Plaintiffs’
preemption claim under a Machinist standard and held that Plaintiffs had a low
likelihood of success. Contrary to Plaintiffs’ arguments, the exclusion of

10

domestic service workers from the NLRA’s definition of “employee,” alone, is
not sufficient to support a finding of Machinist preemption. As Willmar Poultry
noted:
because there is no legislative history to indicate that the NLRA’s
exclusion of agricultural laborers from its coverage was intended to
leave the area totally free from regulation and because the exclusion
standing alone is to be understood to mean that federal policy is
indifferent . . . [Machinist preemption] would not preempt the State
of Minnesota’s regulation of labor relations activity involving
employees whom the NLRB has determined to be “agricultural
laborers.”
430 F. Supp. at 578 (emphasis added). Plaintiffs have not identified any new
legislative history or precedent to suggest that Congress intended to leave
homecare workers totally free from regulation.
Plaintiffs’ other arguments are unavailing. Plaintiffs argue that Congress
declined to regulate home care workers because those categories of workers have
less of a need for collective bargaining. Even assuming that were true, it merely
suggests that Congress did not intend to regulate home care workers, not that the
states are precluded from doing so. Plaintiffs’ reliance on the Ninth Circuit’s
decision in North Whittier Heights Citrus Association is similarly misplaced,
because that case does not deal with preemption, but whether the workers at
issue were agricultural laborers. 109 F.2d 76, 80 (9th Cir. 1940). At most, North
11

Whittier stands for the proposition that agricultural laborers are exempt from the
NLRA, and share a “common denominator” with the other exempt groups (like
domestic service workers). Id. This only reinforces the applicability of the cases
dealing with agricultural workers to the present situation. Finally, Plaintiffs’
position that the Minnesota Labor Relations Act precludes collective bargaining
for homecare workers misses the mark. That statute lists an exclusion for
domestic service employees that parallels NLRA’s exclusion. Minn. Stat. §
179.01, subd. 4. Therefore, it does not conflict with federal law. To the extent it
conflicts with the Act—a state law—the later-enacted statute prevails. See Minn.
Stat. § 645.26(4).
Therefore, for the reasons stated above, the Court concludes that Plaintiffs
have failed to state a claim for preemption of the Act by the NLRA.
C.

Counts II and III

At the December 12, 2014 hearing, Plaintiffs conceded that if the Court
found that the Act was not preempted by the NLRA and dismissed Count I of
the Amended Complaint, Counts II and III must also be dismissed because the
Defendants’ actions in implementing and enforcing the Act were justified.
Because the Court concludes that Count I cannot be sustained as a matter of law,
it will dismiss Counts II and III of the Amended Complaint.
12

Notwithstanding this concession, the Court concludes that Counts II and
III must be dismissed. Plaintiffs cannot proceed against the State Defendants on
Counts II and III, because Plaintiffs’ state-law claims against the State Defendants
are barred by the Eleventh Amendment. See Pennhurst State Sch. & Hosp. v.
Halderman, 465 U.S. 89, 106, 121 (1984) (barring suits against state officials on the
basis of state law). Their claim under the United States Constitution’s Contracts
Clause also fails, because the Plaintiffs have failed to allege that the State
Defendants have threatened or are about to commence proceedings against
Plaintiffs or anyone else under the state statute. See Ex Parte Young, 209 U.S.
123, 156 (1908) (permitting claims for injunctive relief against state officials to
proceed against “officers of the state . . . who threaten and are about to
commence proceedings . . . to enforce against parties affected an unconstitutional
act, violating the Federal Constitution . . . .”); North Dakota v. Swanson, Civil
No. 11-3232 (SRN/SER), 2012 WL 4479246, at * 18-19 (D. Minn. Sept. 30, 2012)
(dismissing claims against Minnesota Attorney General based, in part, on the
lack of allegations that the Attorney General has threatened a suit or is about to
commence proceedings against plaintiff or anyone else under state statute);
Advanced Auto Transp., Inc. v. Pawlenty, Civil No. 10-159 (DWF/AJB), 2010 WL

13

2265159, at * 3 (June 2, 2010) (dismissing claims against Minnesota Governor and
Attorney General where plaintiff failed to allege they threatened suit or were
about to commence proceedings against the plaintiff).
The Court also dismisses Plaintiffs’ remaining claims against SEIU. With
respect to the alleged violation of the Contracts Clause of the Minnesota and
Federal Constitutions, Plaintiffs have alleged only that they can no longer
negotiate the terms and conditions of future employment contracts—they have
not identified a current contractual right that has been impaired by the Act.
Because the right to enter a future agreement does not appear to implicate either
of the Contracts Clauses, they have failed to state a claim for relief. See, e.g.,
Texaco, Inc. v. Short, 454 U.S. 516, 531 (1982) ( “[A] statute cannot be said to
impair a contract that did not exist at the time of its enactment”; the “right to
enter such an agreement” may be impaired, but that is “not a contract right”);
Hawkeye Commodity Promotions, Inc. v. Vilsack, 486 F.3d 430, 436 (8th Cir.
2007) (holding that a Contract Clause claim requires a showing that state law
substantially impairs “pre-existing” contractual obligations).
Plaintiffs’ claim for tortious interference must also be dismissed, because
SEIU has failed to include any factual allegations in the Amended Complaint

14

relating to SEIU’s knowledge of the contract or intentional procurement of the
breach, two essential elements of the claim. See Bouten v. Richard Miller Homes,
Inc., 321 N.W.2d 895, 900 (Minn. 1982) (listing elements of tortious interference
with contract as: (1) existence of a contract; (2) the alleged wrongdoer’s
knowledge of the contract; (3) the intentional procurement of its breach; (4)
without justification; and (5) damages caused by the breach).
Accordingly, the Court also dismisses Counts II and III against both the
State Defendants and SEIU.
IV.

MOTION FOR SANCTIONS
SEIU also moves for sanctions under Rule 11 of the Federal Rules of Civil

Procedure, arguing that Plaintiffs have commenced this action to interfere with a
democratic election, on legal theories that are not supported by existing law or a
non-frivolous argument for extending the law. It asks the Court to dismiss the
Amended Complaint and require Plaintiffs to reimburse SEIU and the State
Defendants for their attorneys’ fees.
Rule 11 of the Federal Rules of Civil Procedure requires an attorney to
certify that, for any pleading or motion:

15

(1) it is not being presented for any improper purpose, such as to
harass, cause unnecessary delay, or needlessly increase the cost of
litigation;
(2) the claims, defenses, and other legal contentions are warranted
by existing law or by a nonfrivolous argument for extending,
modifying, or reversing existing law or for establishing new law;
(3) the factual contentions have evidentiary support or, if specifically
so identified, will likely have evidentiary support after a reasonable
opportunity for further investigation or discovery; and
(4) the denials of factual contentions are warranted on the evidence
or, if specifically so identified, are reasonably based on belief or a
lack of information.
Fed. R. Civ. P. 11(b). Rule 11 requires attorneys to “conduct a reasonable inquiry
of the factual and legal basis for a claim before filing.” Coonts v. Potts, 316 F.3d
745, 753 (8th Cir. 2003). A claim is subject to sanctions if a “reasonable and
competent” attorney would not “believe in the merit of an argument.” Id.
(citation omitted).
Although the Court finds that the Amended Complaint cannot survive a
motion to dismiss, the Court does not find that sanctions are warranted in this
case. While the Court denied Plaintiffs’ motion for preliminary injunctive relief
under a Machinist preemption theory, it did so on the limited grounds that
Plaintiffs, at that time, had not demonstrated a likelihood of success on the

16

merits—not that Plaintiffs could never succeed on the merits. Even though the
case law regarding the agricultural worker exemption of the NLRA seems wellsettled, there is no controlling authority on point relating to homecare workers,
and Plaintiffs advanced arguments that were not addressed by the Court’s prior
ruling. Similarly, despite the legal deficiencies in Counts II and III, they are not
so unreasonable as to merit sanctions. Therefore, the Court denies SEIU’s
request for sanctions.
Accordingly, based upon all the files, records, and proceedings herein, IT
IS HEREBY ORDERED:
1.

Defendant SEIU Healthcare Minnesota’s Motion to Dismiss the
Amended Complaint [Docket No. 43] is GRANTED.

2.

The State Defendants’ Motion to Dismiss the Amended Complaint
[Docket No. 47] is GRANTED.

3.

Defendant SEIU Healthcare Minnesota’s Motion for Rule 11
Sanctions [Docket No. 57] is DENIED.

4.

The Amended Complaint is DISMISSED WITH PREJUDICE.

LET JUDGMENT BE ENTERED ACCORDINGLY.

Dated: January 26, 2015

s/ Michael J. Davis
Michael J. Davis
Chief Judge
United States District Court
17