Miranda v. O'Reilly Automotive Stores, Inc. et al

Filing 21

ORDER denying without prejudice 7 Motion to Dismiss. IT IS FURTHER ORDERED that the case is STAYED. Signed by Judge Robert C. Jones on 8/26/2014. (Copies have been distributed pursuant to the NEF - DKJ)

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UNITED STATES DISTRICT COURT

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DISTRICT OF NEVADA

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ANGELICA MIRANDA,
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Plaintiff,
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vs.
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O’REILLY AUTOMOTIVE STORES, INC. et
al.,

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Defendants.

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2:14-cv-00878-RCJ-PAL
ORDER

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This case arises out of an employer’s alleged failure to pay its employees overtime.

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Pending before the Court is Defendants’ Motion to Dismiss (ECF No. 7) the third through fifth

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claims. For the reasons given herein, the Court denies the motion without prejudice and stays the

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case.

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I.

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FACTS AND PROCEDURAL HISTORY
Plaintiff Angelica Miranda worked for Defendant O’Reilly Automotive Stores, Inc.

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(“O’Reilly”) in Las Vegas, Nevada as a store manager from January 2013 until April 15, 2014.

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(Compl. ¶¶ 4, 12–14, ECF No. 1). Miranda and others similarly situated were required to work

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at least five ten-hour shifts per week and were not paid hourly wages or overtime, despite earning

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less than $455 per week. (Id.). Plaintiff has brought the present Rule 23 class action, accusing

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O’Reilly, O’Reilly Auto Enterprises, LLC, and CSK Auto, Inc. of violations of the following

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federal and state statutes: (1) 29 U.S.C. § 201; (2) 29 U.S.C. § 207; (3) NRS section 608.016; (4)

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NRS section 608.018; and (5) NRS section 608.020–.050. Defendants have moved to dismiss

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the third, fourth, and fifth claims for failure to state a claim.

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II.

LEGAL STANDARDS

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Federal Rule of Civil Procedure 8(a)(2) requires only “a short and plain statement of the

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claim showing that the pleader is entitled to relief” in order to “give the defendant fair notice of

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what the . . . claim is and the grounds upon which it rests.” Conley v. Gibson, 355 U.S. 41, 47

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(1957). Federal Rule of Civil Procedure 12(b)(6) mandates that a court dismiss a cause of action

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that fails to state a claim upon which relief can be granted. A motion to dismiss under Rule

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12(b)(6) tests the complaint's sufficiency. See N. Star Int’l v. Ariz. Corp. Comm’n, 720

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F.2d 578, 581 (9th Cir. 1983). When considering a motion to dismiss under Rule 12(b)(6) for

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failure to state a claim, dismissal is appropriate only when the complaint does not give the

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defendant fair notice of a legally cognizable claim and the grounds on which it rests. See Bell

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Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). In considering whether the complaint is

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sufficient to state a claim, the court will take all material allegations as true and construe them in

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the light most favorable to the plaintiff. See NL Indus., Inc. v. Kaplan, 792 F.2d 896, 898 (9th

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Cir. 1986). The court, however, is not required to accept as true allegations that are merely

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conclusory, unwarranted deductions of fact, or unreasonable inferences. See Sprewell v. Golden

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State Warriors, 266 F.3d 979, 988 (9th Cir. 2001). A formulaic recitation of a cause of action

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with conclusory allegations is not sufficient; a plaintiff must plead facts pertaining to his own

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case making a violation plausible, not just possible. Ashcroft v. Iqbal, 556 U.S. 662, 677-79

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(2009) (citing Twombly, 550 U.S. at 556) (“A claim has facial plausibility when the plaintiff

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pleads factual content that allows the court to draw the reasonable inference that the defendant is

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liable for the misconduct alleged.”). In other words, under the modern interpretation of Rule

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8(a), a plaintiff must not only specify or imply a cognizable legal theory (Conley review), but
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also must plead the facts of his own case so that the court can determine whether the plaintiff has

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any plausible basis for relief under the legal theory he has specified or implied, assuming the

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facts are as he alleges (Twombly-Iqbal review).

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“Generally, a district court may not consider any material beyond the pleadings in ruling

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on a Rule 12(b)(6) motion. However, material which is properly submitted as part of the

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complaint may be considered on a motion to dismiss.” Hal Roach Studios, Inc. v. Richard Feiner

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& Co., 896 F.2d 1542, 1555 n.19 (9th Cir. 1990) (citation omitted). Similarly, “documents

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whose contents are alleged in a complaint and whose authenticity no party questions, but which

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are not physically attached to the pleading, may be considered in ruling on a Rule 12(b)(6)

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motion to dismiss” without converting the motion to dismiss into a motion for summary

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judgment. Branch v. Tunnell, 14 F.3d 449, 454 (9th Cir. 1994). Moreover, under Federal Rule

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of Evidence 201, a court may take judicial notice of “matters of public record.” Mack v. S. Bay

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Beer Distribs., Inc., 798 F.2d 1279, 1282 (9th Cir. 1986). Otherwise, if the district court

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considers materials outside of the pleadings, the motion to dismiss is converted into a motion for

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summary judgment. See Arpin v. Santa Clara Valley Transp. Agency, 261 F.3d 912, 925 (9th Cir.

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2001).

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III.

ANALYSIS

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The Court has previously ruled that there is no private right of action under NRS sections

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608.100 or 608.018. The Court will reiterate its reasoning here. The Nevada Supreme Court has

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explicitly ruled there is no private right of action to enforce section 608.100. See Baldanado v.

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Wynn Las Vegas, LLC, 194 P.3d 96, 100–05 (Nev. 2008) (finding no private right of action under

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section 608.100 and two other sections of Chapter 608); see also Lucas v. Bell Trans, No. 2:08-

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cv-01792, 2009 WL 2424557 at *2–5 (D. Nev. June 24, 2009) (Jones, J.) (citing id.). Another

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court of this District has ruled that there is a private right of action for violations of section

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608.018 pursuant to section 608.140. See Buenaventura v. Champion Drywall, Inc., 803 F. Supp
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.2d 1215, 1218–19 (D. Nev. 2011). Although the Nevada Supreme Court has not directly

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addressed the question, the Buenaventura court reasoned that because section 608.018 governs

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payment of overtime wages, and because there is a private right of action to recover unpaid

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wages under section 608.140, an employee may sue to recover wages owed under the standards

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of section 608.018 via a section 608.140 action. See id. at 1218.

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The Court disagrees, however, and rules that section 608.140 does not imply a private

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right of action to sue under the labor code, but only to sue in contract. Section 608.140 clearly

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presumes the availability of some kind of private right of action to recover wages, because it

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governs attorney’s fees and costs in such actions. See Nev. Rev. Stat. § 608.140 (“Whenever a

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mechanic, artisan, miner, laborer, servant or employee shall have cause to bring suit for wages

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earned and due according to the terms of his or her employment . . . .”). However, section

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608.140 only implies a private right of action to recover wages “earned and due according to the

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terms of his or her employment,” and therefore appears to govern fees and costs only in common

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law contractual suits. Id. (emphasis added). The statute does not imply a private remedy to

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enforce the labor statutes, which impose external standards for wages and hours. The Baldanado

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Court was emphatic that “the absence of an express provision providing for a private cause of

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action to enforce a statutory right strongly suggests that the Legislature did not intend to create a

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privately enforceable judicial remedy.” Baldanado, 194 P.3d at 101. In ruling that there was no

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private right of action under sections 608.100, 608.160, and 613.120, the Baldanado Court

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indicated that the Labor Commissioner’s authority covered sections 608.005 to 608.195 and that

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“when an administrative official is expressly charged with enforcing a section of laws, a private

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cause of action generally cannot be implied.” Id. at 102. In light of Baldanado’s broad language

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and warning against lightly implying private causes of action, the Court believes that sections

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608.016, 608.018, and 608.020–.050 are within the Labor Commissioner’s exclusive jurisdiction,

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just as section 608.100 is. The statutes provide a comprehensive remedial scheme whereby

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review of the Commissioner’s decisions is available in the courts. See Nev. Rev. Stat. § 607.215.

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That remedial scheme is not, as Plaintiff argues, “nonsensical” because it prevents class

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actions. It may be frustrating to labor law attorneys that there is no private right of action directly

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in the courts permitting them to take advantage of the lucrative Rule 23 procedure in cases where

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the remedy must go through the Commissioner on a case-by-case basis, but that does not render

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the remedial system adopted by the Nevada State Legislature “nonsensical.” Nevada’s general

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policy favoring class actions does not trump a comprehensive remedial scheme particularly

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chosen by the Legislature. Nor is the result “absurd” because Plaintiff also wishes to bring

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claims under the Fair Labor Standards Act (“FLSA”), which claims may of course be brought in

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court. Plaintiff may press her state law claims with the Commissioner while pressing her FLSA

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claims here.

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Footnote 33 of Baldanado notes, “a private cause of action to recover unpaid wages is

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entirely consistent with the express authority under NRS 608.140 to bring private actions for

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wages unpaid and due.” See 194 P.3d at 104 n.33. But the Baldanado Court did not directly

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address the question of whether section 608.140 authorized a private suit or, more importantly,

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what kinds of suits it implied. Rather, it made the comment in footnote 33 to contrast those

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sections of the labor code under which there was no language possibly implying any kind of

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private right of action at all.

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Section 608.140 implies only a cause of action to recover wages unpaid and due

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“according to the terms of his or her employment,” which strongly implies a contractual remedy,

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not a remedy to enforce the labor laws. The phrase “according to the terms of . . . employment”

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means “according to the contractual terms of . . . employment,” as opposed to something like

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“according to the laws concerning . . . employment.” This result depends on whether “terms”

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under section 608.140 more reasonably means “contractual terms,” “regulatory standards,” or
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both. The Court finds that it means something more like “contractual terms.” A contemporary

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dictionary defines the word “term” (along with irrelevant definitions) as “[c]ondition;

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arrangement.” Webster’s New Standard Dictionary of the English Language 379 (Laird & Lee,

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1920). Another, more comprehensive, contemporary dictionary defines “term” (along with

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irrelevant definitions) as “[o]bligations imposed by authority or assumed by contract; conditions

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offered, or offered and accepted; as, the terms of sale; I cannot accept your terms.” Funk &

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Wagnalls New Standard Dictionary of the English Language 2486 (1913). In the broadest sense,

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“condition” could refer to statutory restrictions, as in “it is a condition of your freedom that you

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not burglarize another’s home,” but this would be an awkward usage. Such an improbable

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interpretation should not be made where surrounding text in the definition does not require it.

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Next, “imposed by authority” indicates that “terms” can apply to not only purely private

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relationships but also to relationships with the government. But the phrase does not refer to any

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and all relationships of authority. These parts of the definitions invoke situations such as

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criminal probation, civil licenses, and other authoritative contexts concerning particularized

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relationships between an authority and an individual, as opposed to general regulatory

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commands. One speaks of “terms of probation” or “terms of a license,” but one does not speak

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of statutory prohibitions or commands inversely as “terms of lawful behavior,” which usage,

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again, although grammatically possible, would be odd. So although “terms” may refer to

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arrangements between a government and a citizen, it fairly does so only in contexts where those

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two parties have a particularized relationship, not in the general sense that a citizen is subject to

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the terms of a statute. Furthermore, the statute speaks of “terms of . . . employment,” not “terms

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of the law,” indicating that the statute means terms “assumed by contract,” not those “imposed by

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authority.” See id. The word “arrangement” used in Webster’s and the contractual examples

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given in Funk & Wagnalls clarify the meaning of “terms” when the respective definitions are

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considered as a whole. Employers and employees do not arrange the labor statutes; they arrange
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their contractual relationships. In summary, the word “terms” indicates negotiated terms, as per a

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contract, not externally imposed standards, as per a statute.

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The respective dates of passage of sections 608.140 and 608.018 also support this

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conclusion. Section 608.140 (implying a right of action to recover unpaid wages) predates

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section 608.018 (overtime standards) by half a century. Section 608.140 was adopted in 1925.

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See 1925 Nev. Stat. 226–27. That pre-New Deal statute not only predates Nevada’s overtime

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laws by fifty years, see 1975 Nev. Stat. 1583, it also predates federal wage and overtime laws by

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over a decade, see Fair Labor Standards Act of 1938, Pub. L. No. 75-718, 52 Stat. 1060 (1938).

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Section 608.140 cannot have meant to the People of Nevada in1925 that there was a private right

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of action under state wage and overtime laws not to be enacted until 1975. Taking into

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consideration the “according to the terms of . . . employment” language of section 608.140, and

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what that language meant objectively when it was written, the statute implies only a traditional

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contractual claim under the common law.

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Plaintiff argues that the Plaintiff in Descutner failed to point out the existence of three

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state labor laws predating section 608.140 and one labor law passed twelve years thereafter. The

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Court has examined that statutes, which Plaintiff has adduced, and they do not change the

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Court’s analysis.

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One of the cited statutes is a 1925 statute that provides a cause of action to recover not

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only unpaid wages after termination, but also up to thirty days’ additional wages for each day of

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nonpayment after termination (based upon the contract of employment) and providing for a lien

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in the relevant amount. See 1925 Nev. Stat. 226. The statute simply provides a substantive rule

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of damages, noting that an employee may in a traditional action recover the “default wages” just

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as if he had earned them. The private right of action created to collect the default wages in

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addition to the actual wages, however, was explicitly limited to the statute itself. The very next

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chapter of the 1925 statutes, chapter 140, is the predecessor statute to section 608.140. Section 1
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of chapter 140 cannot be read to create a private right of action to enforce the substantive rule of

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damages set forth in section 1 of chapter 139, because section 2 of chapter 139 does that directly.

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If section 1 of chapter 140 were read to imply a private right of action to enforce section 1 of

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chapter 139, the latter portion of section2 of chapter 139 would be superfluous, as the statutes

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were simultaneously adopted. Read together, section 2 of chapter 139 and section 1 of chapter

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140 mean that in any action for breach of contract concerning wages, an employee may collect

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not only the unpaid wages, but also up to thirty days’ worth of “default wages” as if he had

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continued to work according to his contract between the date of termination and the date of

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payment, plus attorney’s fees.

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Next is a 1919 statute concerning the timeliness of wage payments. The statute imposes

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criminal penalties for its violation, does not state anything about private enforcement, and

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explicitly gives the Commissioner the duty of enforcement in section 7. See 1919 Nev. Stat. 123.

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Next is a 1913 statute restricting child labor. The statute imposes criminal penalties for
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Next is a 1937 statute, passed twelve years after the section implying a private right of

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action, fixing minimum wages and maximum hours for female employees. Although the statute

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would likely be held unconstitutional today because of the sex-based distinction it draws, it is

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potentially valuable in the present context if it tends to show that a private right of action to

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enforce the labor statutes can be implied therein directly or when read in conjunction with section

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608.140. But it does not tend to show that. First, the statute post-dates section 608.140, so it

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does not tend to show that the 1925 Legislature had in mind statutes like this one when it used

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the phrase “terms of employment.” Second, like the 1919 statute, the 1937 statute imposes

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criminal penalties for its violation, does not state anything about private enforcement, and

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explicitly gives the Commissioner the duty of enforcement in section 8. See 1937 Nev. Stat. 470.

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The Nevada Legislature could easily have amended section 608.140 after the adoption of

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the wage and overtime laws in such a way as to permit a court to imply a private right of action

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under those laws, or it could have amended the statutes explicitly to provide for a private right of

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action, but it has done neither. Also, under appropriate circumstances, a law implying a private

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right of action could extend to laws not yet written. For example, a law could provide for fee

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shifting broadly in “all actions for wages.” Such a statute would fairly apply to future statutory

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wage claims despite the fact that the authors did not envision such laws. But in this case, where

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the statute is not so broad, it is not reasonable to imply from section 608.140 a private right of

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action under yet-to-be-written wage and overtime statutes at a time when no such statutes existed

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in the State or even nationally, particularly not where the Commissioner was given explicit

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administrative authority to enforce the laws when they were later adopted. Even if the authors of

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section 608.140 had subjectively intended, i.e., if a majority of them had so intended, along with

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the Governor, to provide for a private right of action under yet-to-be-written wage and overtime

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laws, they simply failed to accomplish that result when they adopted a statute that cannot

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reasonably be read to provide for this. It does not matter that one might think the Legislature in

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1925 would have wanted to include statutory wage claims within the implication had it

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anticipated such regulations. That is not the law the State enacted. A ball is not a strike simply

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because the pitcher meant to throw one (or would have attempted to throw one had he had more

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information). Batters have to deal with pitches as they are arrive at the plate, and umpires must

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therefore in fairness call pitches as they arrive at the plate. The law the Legislature enacted in

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this case contains the qualifying phrase “according to the terms of his or her employment,” and

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the Court must give these words effect if at all possible; it cannot read the language out of the

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statute based upon its guess as to what the Legislature and Governor would have agreed to had

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they in fact considered it.

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The Nevada Supreme Court has not yet performed this analysis in a reported case where

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the result mattered, though it has noted in dicta and in unpublished cases that there is a private

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right of action (of some scope) under section 608.140. See, e.g., Baldanado, 194 P.3d at 104

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n.33; Csomos v. Venetian Casino Resort, LLC, No. 55203, 2011 WL 4378744, at *2–3 (Nev.

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Sept. 9, 2011) (noting in an unpublished opinion that section 608.140 implies a private right of

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action to recover wages but not addressing the scope of the implied right of action). Although

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the Buenaventura court previously ruled contrary to this Court, another court of this District has

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since adopted this Court’s analysis in a reported decision. See Dannenbring v. Wynn Las Vegas,

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LLC, 907 F. Supp. 2d 1214, 1218–19 (D. Nev. 2013) (Mahan, J.). None of the unpublished

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federal or state cases ruling otherwise to which Plaintiff cites have given significant attention to

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the critical issue, i.e., the intent of the Legislature. The cases to the contrary typically note that

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section 608.140 permits a private right of action, and then conclude, without the kind of analysis

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this Court performed in Descutner, that the statute necessarily implies a private right of action to

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enforce any kind of labor law. That non sequitur is inconsistent with the rule of Baldanado as

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applied to the legislative history. In conclusion, because the private right of action that can be

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implied under 608.140 only reasonably includes pre-wage-and-overtime-law contractual claims,

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the Court is inclined to dismiss the third through fifth claims under sections 608.016, 608.018,

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and 608.020–.050.

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Finally, Plaintiff notes that the Nevada Supreme Court has taken a case under submission

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that may authoritatively determine the matter. See Landers v. Quality Commc’ns, Inc., No.

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62181. The Court will therefore deny the motion without prejudice and stay the case until the

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Nevada Supreme Court issues its ruling.

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CONCLUSION
IT IS HEREBY ORDERED that the Motion to Dismiss (ECF No. 7) is DENIED, without
prejudice.

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IT IS FURTHER ORDERED that the case is STAYED.

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IT IS SO ORDERED.

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Dated this 26th day of August, 2014.
Dated this 29th day of July, 2014.

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_____________________________________
ROBERT C. JONES
United States District Judge

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