Nye v. Burberry Limited

Filing 36

ORDER denying 21 Motion to Stay.; denying as moot 35 Proposed Discovery Plan/Scheduling Order. Discovery Plan/Scheduling Order due 21 days from entry of this Order. Signed by Magistrate Judge Carl W. Hoffman on 10/21/16. (Copies have been distributed pursuant to the NEF - JM)

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1 2 3 4 UNITED STATES DISTRICT COURT 5 DISTRICT OF NEVADA 6 7 8 9 10 11 12 BRETT NYE, ) ) Plaintiff, ) ) vs. ) ) BURBERRY LIMITED, ) ) Defendant. ) __________________________________________) Case No. 2:16-cv-00702-RFB-CWH ORDER Presently before the Court is Defendant Burberry Limited’s Motion to Stay Discovery 13 14 (ECF No. 21), supported by the Declaration of Zachary Scott (ECF No. 22), filed on June 17, 2016. 15 Plaintiff Brett Nye filed a response (ECF No. 27) on June 28, 2016. Defendant filed a reply (ECF 16 No. 29) on July 8, 2016. 17 I. 18 BACKGROUND This action arises from a dispute regarding alleged non-payment of overtime wages. 19 Plaintiff worked as an hourly, non-exempt employee at two of Defendant’s Las Vegas-area stores 20 until 2014. (Compl. (ECF No. 1) at ¶¶ 11, 13.) Plaintiff alleges that, during his period of 21 employment, Defendant failed to pay employees overtime for weeks when they worked more than 22 forty hours. (Id. at ¶¶ 15, 21.) Plaintiff also claims that Defendant failed to pay for all straight 23 time worked. (Id. at ¶ 15.) He further alleges that Defendant substituted “comp” time in the form 24 of future time off for overtime wages. (Id. at ¶ 20.) Finally, Plaintiff claims that Defendant 25 improperly calculated employees’ overtime-wage rate because it excluded bonus or incentive pay 26 from these calculations. (Id. at ¶¶ 23, 25.) Plaintiff brought suit against Defendant, alleging 27 collective-action claims under the Fair Labor Standards Act (FLSA), 29 U.S.C. §§ 206 and 207, for 28 failure to pay minimum and overtime wages (Claim One). (Id. at ¶¶ 46-50.) Plaintiff also alleged 1 Nevada state law class-action claims to recover wages, overtime wages, and unpaid wages due at 2 termination or resignation (Claims Two and Three). (Id. at ¶¶ 51-57.) 3 Defendant moved to dismiss, arguing Plaintiff has failed to allege facts sufficient to state 4 valid state or federal claims. (Mot. to Dismiss (ECF No. 7) at 4.) Specifically, Defendant argues 5 that Plaintiff provides no details demonstrating that he “suffered wage and hour violations.” (Id. at 6 6.) Defendant quotes the Ninth Circuit in Landers, which, at a minimum, requires Plaintiff to 7 allege that he worked more than forty hours “in a given workweek” without receiving pay for the 8 overtime hours he worked. Landers v. Quality Communs., Inc., 771 F.3d 638, 644–45 (9th Cir. 9 2015). Defendant further argues there is no private right of action for Plaintiff’s state law claims. 10 (Id. at 9.) 11 Plaintiff responds that the pleading requirements articulated in Landers are “rigidly harsh 12 and inconsistent with Iqbal and Twombly.” (Opp. to Mot. to Dismiss (ECF No. 12) at 11.) 13 Plaintiff argues that the information regarding the hours he worked is in Defendant’s control. (Id. 14 at 4-5.) Plaintiff argues nonetheless that his allegations satisfy the Landers standard. (Id. at 15.) 15 Plaintiff further responds that there is a private right of action for his Nevada state law claims. (Id. 16 at 10.) 17 Defendant now moves to stay discovery pending the outcome of the motion to dismiss, 18 arguing that the motion is case-dispositive and that discovery is therefore unnecessary. (Mot. to 19 Stay Discovery (ECF No. 21) at 3.) Plaintiff responds that Defendant’s motion is not dispositive of 20 the entire case because it does not raise a threshold issue such as jurisdiction, venue, or immunity. 21 (Opp. to Mot. to Stay Discovery (ECF No. 27) at 7.) He also claims that a stay would impair his 22 ability to contact potential class members. (Id. at 6.) Finally, he argues that under a Rule 12(b)(6) 23 Twombly challenge to the sufficiency of the complaint’s allegations, the court cannot be convinced 24 that Plaintiff will be unable to state a claim. (Id. at 8.) 25 II. ANALYSIS 26 Courts have broad discretionary power to control discovery, including the decision to stay 27 discovery. See e.g., Little v. City of Seattle, 863 F.2d 681, 685 (9th Cir. 1988). When evaluating 28 whether to stay discovery, the court considers the goal of Rule 1 of the Federal Rules of Civil 2 1 Procedure, which directs that the rule must be “construed and administered to secure the just, 2 speedy, and inexpensive determination of every action.” Tradebay, LLC v. eBay, Inc., 278 F.R.D. 3 597, 602 (D. Nev. 2011) (citation omitted). But the Rules do not provide for an automatic stay of 4 discovery when a potentially dispositive motion is pending. Id. at 600–01. Thus, a pending 5 dispositive motion “is not ordinarily a situation that in and of itself would warrant a stay of 6 discovery.” Turner Broad. Sys., Inc. v. Tracinda Corp., 175 F.R.D. 554, 556 (D. Nev. 1997) 7 (quotation omitted). Nor does the fact that “discovery may involve some inconvenience and 8 expense” automatically warrant a stay of discovery. Id. 9 In determining whether to stay discovery, the court considers whether (1) the pending 10 motion is potentially dispositive of the entire case, or at least of the issue on which discovery is 11 sought; and (2) the potentially dispositive motion can be decided without additional discovery. 12 Ministerio Roca Solida v. U.S. Dep’t of Fish & Wildlife, 288 F.R.D. 500, 506 (D. Nev. 2013). This 13 analysis requires the court to take a “preliminary peek” at the potentially dispositive motion. 14 Tradebay, 278 F.R.D. at 603. This assessment is meant not to prejudge a motion’s outcome but, 15 rather, to accomplish the cost- and time-saving objectives of Rule 1 by evaluating the justice of 16 either permitting or delaying discovery. Id. A court may stay discovery when it is convinced that 17 the plaintiff will be unable to state a claim for relief. Turner, 175 F.R.D. at 555. Ultimately, the 18 party seeking the stay “carries the heavy burden of making a ‘strong showing’ why discovery 19 should be denied.” Id. at 556 (quotation omitted). 20 The court now takes a “preliminary peek” at the merits of Defendant’s motion to dismiss to 21 determine whether it is potentially dispositive of the entire case and whether the motion to dismiss 22 can be decided without additional discovery. 23 A. Failure to State a Claim Under FLSA 24 To survive a 12(b)(6) motion to dismiss, a plaintiff must allege enough facts to state a claim 25 that is “plausible on its face.” Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007). “The 26 plausibility standard . . . asks for more than a sheer possibility that a defendant has acted 27 unlawfully.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). When pleading facts that do no more 28 than infer the possibility of misconduct, a complaint has alleged, but not shown, that the plaintiff is 3 1 entitled to relief. Id. at 679. Properly pled allegations contain “more than labels and conclusions.” 2 Twombly, 550 U.S. at 555. While courts must accept as true all factual allegations in a complaint, 3 legal conclusions do not receive the same treatment, even if couched as factual allegations. Iqbal, 4 556 U.S. at 678. 5 In Landers, a case factually similar to this case, the plaintiff alleged his former employer’s 6 compensation scheme deprived him of overtime payments to which he was entitled, resulting in 7 violations of the FLSA. Id. at 645. Landers described a “de facto ‘piecework no overtime’ 8 system” whereby the employers paid employees for each piece of work they performed rather than 9 paying time and one-half of employees’ hourly rate for hours worked in excess of forty per week. 10 Id. He also detailed a system that paid some measure of overtime but failed to pay overtime based 11 on earnings derived from “piecework.” Id. He further alleged that the defendant failed to pay all 12 overtime earned even for employees not impacted by the “piecework” system. Id. His description 13 of the compensation scheme itself was relatively detailed, yet the court found that his allegations 14 failed because he offered no details describing a given workweek when Landers himself “worked 15 in excess of forty hours and was not paid overtime for that given workweek . . . .” Id. at 646. The 16 court held that “Landers failed to state a plausible claim for relief under the FLSA.” Id. 17 Several other District of Nevada cases decided after Landers resulted in similar holdings. 18 Employees were required to work 115 minutes beyond each of their scheduled eight-hour shifts. 19 Levert v. Trump Ruffin Tower I, LLC, No. 2:14-cv-01009-RCJ-CWH, 2015 WL 133792, at *5 (D. 20 Nev. Jan. 9, 2015). However, the court rejected their claims because plaintiffs failed to allege that 21 they were ever required to work five days per week, and thus the court was unable to infer that the 22 employees worked greater than forty hours in any given workweek. Id. Moreover, an employee’s 23 conclusory allegation that she “routinely” worked more than forty hours per week did not meet the 24 pleading standard. Johnson v. Pink Spot Vapors Inc., No. 2:14-cv-01960 JCM-GWF, 2015 WL 25 433503, at *4 (D. Nev. Feb. 3, 2015). Similarly, employees’ allegations fell short of the pleading 26 standard when they claimed merely that their employer “instituted ‘uniform policies and practices’ 27 that . . . ‘fail[ed] to pay overtime hours’ when employees worked ‘more than forty . . . hours per 28 week.’” Small v. Univ. Med. Ctr. of S. Nev., No. 2:13-cv-00298-APG-PAL, 2016 WL 4157309, at 4 1 2 *2 (D. Nev. Aug. 3, 2016). Here, like the plaintiff in Landers, Plaintiff’s complaint describes Defendant’s 3 compensation policy in some detail but fails to allege any facts that demonstrate that he worked 4 more than forty hours in a given week without overtime compensation. He alleges: (1) Defendant 5 subjected its employees to policies and practices that required them to work without compensation 6 for all time worked, both straight time and overtime (Compl. (ECF No. 1) at ¶¶ 14–15); 7 (2) Defendant “often compensated its employees at their regular rate of pay for hours worked in 8 excess of [forty] hours in any workweek,” instead of the state- and federally mandated one and 9 one-half times their regular rate of pay (Id. at ¶¶ 21–22); (3) Defendant provided “comp” time in 10 lieu of overtime, routinely requiring employees to accept future time off in place of overtime 11 wages when they worked more than forty hours per week (Id. at ¶ 20); and (4) Defendant failed to 12 account for “bonus” pay when calculating overtime pay. (Id. at ¶ 25.) 13 Plaintiff asks the court to infer from his description of Defendant’s compensation practices 14 that employees worked over forty hours per week. However, like in Pink Spot Vapors and Small, 15 Plaintiff’s conclusory allegations that Defendant had a routine practice of substituting comp time 16 for overtime fails to bridge that factual gap. Plaintiff argues based on Levert that failure to allege a 17 specific workweek when an employer did not pay overtime for work hours in excess of forty per 18 week is not fatal to a plaintiff’s claim. It is true that Landers does not require that plaintiffs allege 19 a specific workweek during which they worked more than forty hours and did not receive overtime 20 pay. However, Landers does require Plaintiff to allege at least that he worked more than forty 21 hours in a given workweek without receiving overtime pay. Here, Plaintiff fails to make that 22 minimal claim. Allegations that merely raise the possibility of undercompensation fail to rise to 23 the plausibility standard. Iqbal, 556 U.S. at 678; Landers, 771 F.3d at 646. 24 Plaintiff also fails to plead facts sufficient to state a claim for minimum wage violations. 25 Plaintiff pleads his overtime and minimum-wage claims together and offers the same conclusory 26 allegations for both. (Compl. at 10.) If no plausible claim for overtime or minimum wage 27 violations exists, then Plaintiff will have no resulting claim for unpaid wages. Thus, the court finds 28 that Defendant’s motion to dismiss is potentially dispositive as to Plaintiff’s overtime and 5 1 minimum wage claims. The court further finds that Plaintiff can make his allegations as to those 2 claims without resort to further discovery. Landers, 771 F.3d at 643 (“[P]laintiffs [may] draw on 3 their memory and personal experience to develop [sufficiently specific] factual allegations . . . .” 4 (citing Lundy v. Catholic Health Sys. of Long Island Inc., 711 F.3d 106 (2d Cir. 2013))). 5 B. Private Right of Action Under Nevada Law 6 Defendant argues that Plaintiff’s state law claims fail because the underlying statutes do not 7 provide a private right of action. Defendant cites federal district court cases and one Nevada 8 Supreme Court case that hold that N.R.S. § 608.018 does not provide a private right of action. 9 Plaintiff responds that Judge Boulware will likely deny Defendant’s motion as to this issue because 10 he has previously commented there should be a private right of action under these statutes. (Opp. 11 to Mot. to Stay Discovery at 6.) Moreover, at least one other court in this district held that a 12 private right of action exists. Buenaventura v. Champion Drywall, Inc., 803 F.Supp.2d 1215, 1218 13 (D. Nev. 2011). This opinion split introduces at least some uncertainty as to whether Defendant’s 14 motion is dispositive of Plaintiff’s entire case. 15 Furthermore, it is important to note that, even if Defendant’s motion to dismiss is granted, 16 Plaintiff is likely to be given leave to file an amended complaint to cure the defects in his initial 17 pleading. Plaintiff could easily amend his complaint to meet the rather lenient standard articulated 18 in Landers. On the other hand, the standard required to stay discovery is a stringent one. 19 Discovery would be unnecessarily delayed in too many cases if courts applied a lenient standard in 20 staying all discovery while awaiting resolution of pending motions. Grand Canyon Skywalk Dev. 21 LLC v. Steele, No. 2:13-cv-00596-JAD-GWF, 2014 WL 60216 at *3. The court must be convinced 22 that Defendant’s motion to dismiss will succeed, and the court is not convinced in this case. The 23 court therefore will deny Defendant’s motion to stay discovery. 24 III. 25 26 27 28 CONCLUSION IT IS THEREFORE ORDERED that Defendant Burberry Limited’s Motion to Stay Discovery (ECF No. 21) is DENIED. IT IS FURTHER ORDERED that the parties must meet and confer and file a stipulated discovery plan within 21 days from the date of this order. 6 1 2 IT IS FURTHER ORDERED that Plaintiff Brett Nye’s proposed discovery plan and scheduling order (ECF No. 35) is DENIED as moot. 3 4 DATED: October 21, 2016 5 6 7 8 ______________________________________ C.W. Hoffman, Jr. United States Magistrate Judge 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 7

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