Landry's Inc. et al v. Brian Sandoval, et al

Filing 46

ORDER Denying 16 Motion to Intervene without prejudice. The request to appear as amicus curie is DENIED. Signed by Magistrate Judge Peggy A. Leen on 3/28/16. (Copies have been distributed pursuant to the NEF - TR)

1
2
3
4

UNITED STATES DISTRICT COURT

5

DISTRICT OF NEVADA

6

***

7

LANDRY’S, INC., et al.,

8
9
10
11

Case No. 2:15-cv-01160-GMN-PAL
Plaintiffs,

ORDER

v.

(Mot. to Intervene – Dkt. #16)

BRIAN SANDOVAL, et al.,
Defendants.

12

This matter is before the Court on Proposed Intervenor-Defendant AFL-CIO’s Motion to

13

Intervene or to Participate as Amicus Curie (Dkt. #16). This Motion is referred to the undersigned

14

pursuant to 28 U.S.C. § 636(b)(1)(A) and LR IB 1-3 and 1-9 of the Local Rules of Practice. After

15

the Motion was filed, Plaintiffs filed an Amended Complaint (Dkt. #17), which prompted the AFL-

16

CIO to file a Supplemental Memorandum (Dkt. #20) in support of the Motion. The Court has

17

considered the Motion, Supplemental Memorandum (Dkt. #20), Plaintiffs’ Response (Dkt. #28),

18

Reply (Dkt. #33), and the Supplemental Declarations of Danny Thompson (Dkt. ##34, 35).

19

BACKGROUND

20

On June 19, 2015, Plaintiffs Landry’s Inc.; Bubba Gump Shrimp Co. Restaurants, Inc.; and

21

Nevada Restaurant Services, Inc., doing business as Dotty’s Gaming and Spirits, Laughlin River

22

Lodge, and Hoover Dam Lodge (jointly, “Plaintiffs”) commenced this case by filing a Complaint

23

(Dkt. #1). Plaintiffs are challenging Nevada’s Minimum Wage Amendment, as set forth in Article

24

15, Section 16 of the Nevada Constitution (the “Amendment”), along with the implementing

25

regulations found in Chapter 608 of the Nevada Administrative Code, NAC 608.100 – 608.108

26

(the “Regulations”). See Am. Compl. (Dkt. #17).

27

In 2004, Nevada voters approved a ballot initiative that sought to amend the state

28

constitution to include a two-tiered minimum wage that deviates from the federal minimum wage
1

1

based on cost of living increases. Id. ¶ 17. Subject to certain conditions, employers would pay the

2

lower tier minimum wage if they offered “health benefits” to their employees or pay the higher

3

tier minimum wage if they did not offer health benefits. However, the term “health benefits” was

4

not defined in the initiative. Id. ¶ 21. In accordance with Nevada law requiring voters to approve

5

a proposed constitutional amendment in two consecutive general elections, the initiative was

6

placed on the 2006 ballot and voters once again approved and ratified the proposal. Id. ¶ 19. The

7

ballot initiative was eventually codified as the Amendment and became effective on November

8

28, 2006. Id. ¶ 20. See also Nev. Const. art. 15, § 16.

9

In the current action, Plaintiffs allege the Amendment and Regulations are unconstitutional,

10

violate their due process rights, and are preempted by the Employee Retirement Income Security

11

Act of 1974 (“ERISA”). See Am. Compl. (Dkt. #17). Plaintiffs further allege that Defendants

12

lack authority under the Amendment to promulgate or enforce the Regulations. The Amended

13

Complaint seeks a declaratory judgment that: (I) ERISA preempts the Amendment and

14

Regulations; (II) the Amendment and Regulations violate the Commerce Clause of the United

15

States Constitution; (III) the Governor’s delegation of authority to promulgate and enforce the

16

Regulations and Amendment violates the United States and Nevada Constitutions; (IV) the

17

Regulations are unconstitutional because they exceed the Labor Commissioner and the Insurance

18

Commissioner’s authority; (V) the Amendment and Regulations violate due process protected by

19

the Fifth and Fourteenth Amendments to the United States and Nevada Constitution.

20

In the Motion, the AFL-CIO claims an interest in this action and requests permission to

21

intervene to protect its interest. See Mot. to Intervene (Dkt. #16), filed July 8, 2015. The Motion

22

attaches a proposed motion to dismiss Plaintiffs’ Complaint. See Mot. Exs. 1 & 2 (Dkt. #16-1).

23

Plaintiffs subsequently filed an Amended Complaint (Dkt. #17), which prompted the AFL-CIO to

24

file a Supplemental Memorandum (Dkt. #20) attaching a revised version of its proposed motion to

25

dismiss. See Supplemental Memo. Ex. A (Dkt. #20-1). The Motion asserts that the AFL-CIO has

26

a significant protectable interest at stake for two reasons: (1) the union actively supported the

27

minimum wage Amendment’s enactment; and (2) the Amendment has helped increase the

28

///
2

1

compensation of the AFL-CIO’s members and “level the playing field” between non-union

2

employers and unionized employers.

3

Plaintiffs oppose the AFL-CIO’s intervention, arguing that the union does not have an

4

interest here because most—if not all—unionized employers provide health benefits meeting the

5

standard set forth by the Amendment. See Pls.’ Response (Dkt. #28) at 9. However, Plaintiffs do

6

not dispute the AFL-CIO’s involvement with the ballot initiative approving the Amendment.

7

Ninth Circuit case law demonstrates that, at a minimum, the AFL-CIO has a protectable interest

8

based on its support of the Amendment.

9

Defendants Nevada Governor, Brian Sandoval, the Nevada Labor Commissioner, Shannon

10

Chambers, and the acting Nevada Insurance Commissioner, Amy L. Parks, did not oppose the

11

AFL-CIO’s Motion and the time for filing an opposition has now passed. Defendants have moved

12

to dismiss the Amended Complaint under Rule 12(b)(6) of the of the Federal Rules of Civil

13

Procedure. See Mots. to Dismiss (Dkt. #25, #27). Governor Sandoval and Labor Commissioner

14

Chambers argue the amended complaint raises an abstract question of law, is barred by the

15

Eleventh Amendment, and Plaintiffs cannot show an injury in fact traceable to the Defendants.

16

They also argue the complaint is barred by the Eleventh Amendment, that Governor Sandoval and

17

Commissioner Parks are not proper parties, the principle of legislative immunity bars this action,

18

the statute of limitations bars this action, and Plaintiffs have failed to state a cognizable civil rights

19

claim under 42 U.S.C. § 1983.
DISCUSSION

20
21

Rule 24 of the Federal Rules of Civil Procedure permits anyone to intervene who “claims

22

an interest relating to the property or transaction that is the subject of the action, and is so situated

23

that disposing of the action may as a practical matter impair or impede the movant’s ability to

24

protect its interest, unless existing parties adequately represent that interest.” Fed. R. Civ. Pro.

25

24(a)(2). A party seeking to intervene as of right under Rule 24 must demonstrate that four

26

requirements are met:

27
28

(1) the intervention application is timely; (2) the applicant has a significant
protectable interest relating to the property or transaction that is the subject of the
action; (3) the disposition of the action may, as a practical matter, impair or impede
3

1

the applicant’s ability to protect its interest; and (4) the existing parties may not
adequately represent the applicant’s interest.

2

Citizens for Balanced Use v. Montana Wilderness Ass’n, 647 F.3d 893, 897 (9th Cir. 2011)

3

(quoting Prete v. Bradbury, 438 F.3d 949, 954 (9th Cir. 2006)). An applicant for intervention

4

bears the burden of showing that all four requirements are met. PEST Comm. v. Miller, 648 F.

5

Supp. 2d 1202, 1211 (D. Nev. 2009), aff’d, 626 F.3d 1097 (9th Cir. 2010).

6

Additionally, Rule 24(c) requires that a proposed intervenor file and serve a motion to

7

intervene along with “a pleading that sets out the claim or defense for which intervention is

8

sought.” A pleading accompanying a motion to intervene under Rule 24(c) should be one of those

9

described in Rule 7(a) (i.e. a complaint, an answer, a reply to a counterclaim, an answer to a cross-

10

claim, a third-party complaint, or a third-party answer) so that all parties understand the position,

11

claims, and nature of relief sought by the applicant. John Bourdeau & Francis M. Dougherty et

12

al., 25 Federal Procedure, Lawyers Edition § 59:404 (2016).

13

Rule 24(c)’s requirement of submitting a pleading is mandatory. Shevlin v. Schewe, 809

14

F.2d 447, 450 (7th Cir. 1987) (“Lawsuits cannot be tried merely on memoranda.”); see also Brown

15

v. Colegio de Abogados de Puerto Rico, 277 F.R.D. 73, 76 (D.P.R. 2011); F.T.C. v. Med Resorts

16

Int'l, Inc., 199 F.R.D. 601, 606 (N.D. Ill. 2001). “The purpose of requiring an intervenor to file a

17

pleading is to place the other parties on notice of the claimant’s position, the nature and basis of

18

the claim asserted, and the relief sought by the intervenor.” Dillard v. City of Foley, 166 F.R.D.

19

503, 506 (M.D. Ala. 1996). Courts have occasionally relaxed the requirement to submit a proposed

20

pleading where the purpose of intervention and the claims and defenses the intervenor intends to

21

pursue are made clear in the motion to intervene. See, e.g., Beckman Indus., Inc. v. Int’l Ins. Co.,

22

966 F.2d 470, 474 (9th Cir. 1992) (noting that intervention motions have been approved without a

23

pleading where the motion sufficiently apprised the court of the grounds for intervention). “This

24

is not to say that the requirements of Rule 24(c) should be disregarded, but only that a deserving

25

applicant for intervention is not likely to be turned away because of a procedural blunder of no

26

real significance.” Charles Alan Wright & Arthur R. Miller et al., 7C Federal Practice &

27

Procedure § 1914 (3d ed. 2015). In some cases, the proposed intervenor has been permitted to

28

///
4

1

simply adopt the pleading of an existing party, without submitting its own pleading. See, e.g.,

2

Alexander v. Hall, 64 F.R.D. 152, 156 (D.S.C. 1974).

3

Here, the AFL-CIO submitted a proposed motion to dismiss with the Motion to Intervene,

4

but not a pleading within the definition of Rule 7(a). Thus, the AFL-CIO has failed to satisfy the

5

mandatory pleading requirement of Rule 24(c). Although this requirement is sometimes relaxed,

6

the Court finds that the lack of a pleading is significant because it is not clear which positions of

7

the parties are consistent with and which positions are inconsistent with the AFL-CIO’s interests.

8

For example, the AFL-CIO argues that Defendants will not adequately represent its

9

interests even though both Defendants and the union would defend the propriety of the

10

Amendment. However, the AFL-CIO agrees with the Plaintiffs that the Labor Commissioner has

11

exceeded her authority by promulgating the Regulations at issue. See Pls.’ Resp. (Dkt. #28), Ex.

12

4, Aug. 22, 2014 Letter from AFL-CIO counsel. Thus, the AFL-CIO’s intervention would not

13

support Defendants’ position on the Regulations, only the Amendment.

14

Plaintiffs initiated this action to have both the Amendment and the Regulations struck

15

down. Plaintiffs’ opposition to the Motion asserts that they will “vigorously represent” the AFL-

16

CIO’s interests by seeking a declaration that the Regulations are “unconstitutional and void ab

17

initio.” Id. at 21:6–9. The Ninth Circuit has held that the “ ‘most important factor’ in assessing

18

the adequacy of representation is ‘how the interest compares with the interests of existing parties’.”

19

Citizens for Balanced Use, 647 F.3d at 898 (quoting Arakaki, 324 F.3d at 1086). The briefing

20

indicates that the AFL-CIO’s interests would align with Plaintiffs for some issues and with

21

Defendants on other issues. A complaint in intervention is needed to state the purposes for which

22

the AFL-CIO is intervening, and with whom its interests are aligned on the issues raised in the

23

Amended Complaint.

24

Additionally, if the Defendants’ pending motions to dismiss the Amended Complaint are

25

granted, Plaintiffs are likely to receive leave to amend any deficiencies found by the district judge

26

since Defendants do not assert amendment would be futile. The district judge’s decision should

27

clarify which Defendants are properly named and whether certain of the Defendants should be

28

dismissed or substituted. Finally, the court will deny the request to participate as amicus curie.
5

1

The district judge should not be burdened with a multitude of supplemental papers filed by the

2

AFL-CIO as a result of the changing procedural posture of this case.

3

Accordingly,

4

IT IS ORDERED:

5

1.

6

AFL-CIO’s Motion to Intervene (Dkt. #16) is DENIED without prejudice. A proposed
complaint in intervention shall be attached to any future motion to intervene.

7

2. The request to appear as amicus curie is DENIED.

8

Dated this 28th day of March, 2016.

9
10
PEGGY A. LEEN
UNITED STATES MAGISTRATE JUDGE

11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
6