Benson et al v. HG Staffing, LLC et al

Filing 86

ORDER that plaintiffs' motion to voluntarily dismiss the action (ECF No. 73 ) is GRANTED on the condition that it be with prejudice. Plaintiffs have until 4/12/2019 to withdraw their motion or consent to the dismissa l despite the condition. A failure to respond within the 30 day window shall constitute a consent to dismissal with prejudice. Defendants' motion for partial summary judgment (ECF No. 74 ) is conditionally DENIED as moot. Signed by Judge Larry R. Hicks on 3/13/2019. (Copies have been distributed pursuant to the NEF - LH)

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UNITED STATES DISTRICT COURT

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DISTRICT OF NEVADA

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Plaintiffs, ORDER

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v.

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***
Case No. 3:16-cv-00388-LRH-WGC

CATHY BENSON, et al.,

HG STAFFING, LLC; MEI-GSR
HOLDINGS LLC d/b/a GRAND SIERRA
RESORT; and Does 1 through 50, inclusive,

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Defendants.

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Before the court is plaintiffs’ motion to dismiss. ECF No. 73. HG Staffing, LLC and

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MEI-GSR Holdings LLC d/b/a Grand Sierra Resort, (collectively “defendants”) filed a response

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(ECF No. 76), to which plaintiffs replied (ECF No. 78). Because dismissal will not cause

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defendants to suffer plain legal prejudice and for the reasons set forth in this Order, the court

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grants plaintiffs’ motion; however, does so on the condition that it be with prejudice.
Also before the court is defendants’ motion for partial summary judgment. ECF No. 74.

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Plaintiffs filed a response (ECF No. 79), to which defendants replied (ECF No. 80). In light of

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the court’s order on plaintiffs’ motion to dismiss (ECF No. 73), the court conditionally denies

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defendants’ motion as moot.

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I.

BACKGROUND

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This dispute centers on defendants’ alleged failure to pay plaintiffs overtime wages. See

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ECF No. 14. The dispute began in a separate and now independent matter: Sargent et al. v. HG

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Staffing et al., 3:13-cv-00453-LRH-WGC. Sargent was removed to this court in August 2013,
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and its proposed classes were conditionally certified in May 2014. Sargent, 3:13-cv-00453-LRH-

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WGC at ECF Nos. 1, 40. But the court later decertified the proposed classes in March 2016 for

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not being “similarly situated” as required by the FLSA. Id. at ECF No. 174. By this time, the

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parties had conducted extensive discovery and had filed multiple motions. See id. at ECF Nos.

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82–83, 85, 94, 97–108, 112–21.
After the court ordered decertification in Sargent, this matter was filed on June 28, 2016.

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ECF No. 1.1 The complaint was later amended. ECF No. 14. The amended complaint asserted

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one FLSA violation for the narrow-proposed class of employees who were room attendants,

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allegedly required to arrive 20 minutes prior to shift to complete pre-shift activities for which

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they were not compensated. Id. It does not allege any state-law claims. See id. The amended

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complaint was filed by numerous plaintiffs on behalf of themselves and all others similarly

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situated.2 Id. The parties have agreed to use the discovery from Sargent in this matter. ECF No.

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35. The parties have also conducted additional discovery particularly for this matter. See ECF

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No. 63 at 3; see also Ramirez et al. v. HG Staffing, LLC et al., 3:16-cv-00318-LRH-WGC at ECF

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Nos. 72, Ex. 2; 88.
On June 14, 2016, a state-court action was also filed after the decertification order in

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Sargent. ECF No. 60, Ex. A. The state-court action does not assert any FLSA claims; it instead

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asserts state-law claims for lost wages under Chapter 608 of the Nevada Revised Statutes

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(“NRS”) on behalf of four named plaintiffs. Id. In early 2017 and before any motions were

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decided in the state-court action, the state court stayed the state-court action pending an

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anticipated decision from the Nevada Supreme Court. See Ramirez, 3:16-cv-00318-LRH-WGC

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at ECF No. 72, Ex. 1. The stay was not lifted until December 20, 2017. Id. This parallel state-

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court action is currently pending.

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Four other related cases with narrower-proposed classes were filed as well. See Ramirez et al.
v. HG Staffing, LLC et al., 3:16-cv-00318-LRH-WGC; Corral et al. v. HG Staffing, LLC et al.,
3:16-cv-00386-LRH-WGC; S. Reader et al. v. HG Staffing et al., LLC, 3:16-cv-00387-LRHWGC; T. Reader et al. v. HG Staffing et al., LLC, 3:16-cv-00392-LRH-WGC.
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One of the named plaintiffs has since been terminated from this action. ECF No. 20.
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In January 2018, plaintiffs filed a motion to stay or in the alternative, dismiss this matter

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without prejudice based on the similarly natured claims in this action and the state-court action.

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ECF No. 60. After finding that a majority of the Colorado River Doctrine factors weighed

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against a stay, the court denied plaintiffs’ motion to stay with prejudice. ECF No. 72.
Plaintiffs now move to voluntarily dismiss this matter without prejudice, this time based

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on the Nevada Supreme Court’s ruling in Neville v. Eighth Judicial District Court in & for

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County of Clark, 406 P.3d 499 (Nev. 2017). ECF No. 73. Simultaneously, defendants move for

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partial summary judgment, arguing that 41 plaintiffs are barred by a two-year statute of

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limitations. ECF No. 74. The court’s Order as to these pending motions now follows.

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II.

DISCUSSION
The Court dismisses plaintiffs’ action with prejudice pursuant to Federal Civil
Procedure Rule 41.

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Subject to certain exceptions, a plaintiff has the right to dismiss his or her action by filing

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“a notice of dismissal before the opposing party serves either an answer or a motion for summary

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judgment.” Fed. R. Civ. P. 41(a)(1)(A)(i). After the opposing party serves either an answer or a

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motion for summary judgment, the plaintiff loses this right. As defendants filed their answer to

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plaintiffs’ amended complaint on March 17, 2017, (ECF No. 23), dismissal is only permitted by

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court order. See Fed. R. Civ. P. 41(a)(2).

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The decision of whether to grant voluntary dismissal rests in the court’s discretion.

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Hamilton v. Firestone Tire & Rubber Co., Inc., 679 F.2d 143, 145 (9th Cir. 1982). “When ruling

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on a motion to dismiss without prejudice, the district court must determine whether the defendant

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will suffer some legal prejudice as a result of the dismissal.” Westlands Water Dist. v. United

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States, 100 F.3d 94, 96 (9th Cir. 1996). “Although case law does not articulate a precise

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definition of ‘legal prejudice,’ the cases focus on rights and defenses available to a defendant in

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future litigation,” concluding legal prejudice means “prejudice to some legal interest, some legal

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claim, some legal argument.” Id. at 97. Courts have specifically concluded that plain legal

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prejudice is more than “the prospect of a second lawsuit, . . . when plaintiff merely gains some

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tactical advantage,” or “the mere inconvenience of defending another lawsuit.” Hamilton, 679
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F.2d at 145; see also Westlands, 100 F.3d at 96 (“[T]he threat of future litigation which causes

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uncertainty is insufficient to establish plain legal prejudice.”); Veina v. Sutter Hotel Assocs. L.P.,

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No. C 98-0980 SI, 1998 WL 822773, at *3 (N.D. Cal. Nov. 9, 1998) (“[E]ven if plaintiff escapes

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some limits on discovery by refiling this action in state court, the fact that a plaintiff gains a

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tactical advantage by dismissing the action is not enough to show plain legal prejudice.”).

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Further, the Court has held that neither incurring significant expenses defending the suit nor the

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fact that trial preparations have begun amount to plain legal prejudice. See Hamilton, 679 F.2d at

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145-46. Courts have held that when dismissal would strip a defendant of an absolute defense,

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that does amount to plain legal prejudice. See Tibbetts by and through Tibbets v. Syntex Corp.,

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996 F.2d 1227, 1993 WL 241567, at *1-2 (9th Cir. July 2, 1993) (unpublished) (citing Phillips v.

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Illinois Central Gulf Railroad, 874 F.2d 984 (5th Cir. 1989)).

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Plaintiffs have filed this motion to voluntarily dismiss the pending action without

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prejudice following the Nevada Supreme Court’s decision in Neville. Because Neville held that

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employees have a private right of action for NRS Chapter 608 wage claims, see Neville, 406 P.3d

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at 504, plaintiffs seek to forego litigation of their federal wage claims in federal court for their

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more encompassing state law wage claims currently pending in state court. Defendants argue that

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if the court were to grant plaintiffs’ motion, they would suffer plain legal prejudice because they

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would be deprived of the applicable statute of limitations defense. As articulated fully in their

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motion for partial summary judgment, defendants argue that because plaintiffs failed to file

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consent to opt-in to the collective action their claims are barred by the FLSA’s two-year statute

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of limitation.

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The court disagrees with defendants that dismissal would cause them plain legal

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prejudice. Defendants’ cited case law is readily distinguishable from the facts at hand. Courts

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have held that when a plaintiff seeks dismissal in order to refile their case in a more favorable

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jurisdiction, one where the statute of limitations has not expired, defendants are legally

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prejudiced. See Elbaor v. Tripath Imaging, Inc., 279 F.3d 314, 318-19 (5th Cir. 2002) (after

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plaintiffs failed to provide the jurisdiction in which they wished to refile if the voluntary

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dismissal was granted, the Court determined that defendants would be legally prejudiced
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“because such dismissal would potentially strip it of a viable statute of limitations defense.”);

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Phillips, 874 F.2d at 987 (affirming the lower court’s denial of voluntary dismissal reasoning that

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while “the mere prospect of a second lawsuit on the same facts is not sufficiently prejudicial to

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the defendant to justify denial, . . . the facts in the second lawsuit would differ in that the

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defendant would be stripped of an absolute defense to the suit.”). The Ninth Circuit, relying on

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the Fifth Circuit’s reasoning, came to a similar conclusion. See Tibbets, 1993 WL 241567, at *2

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(“Similarly [to Phillips], the district court here concluded that [the defendant] would be

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prejudiced by having to defend the suit in another state where the statute of limitations had not

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run,” and therefore, it “was not an abuse of discretion,” for the district court to deny plaintiff’s

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motion for voluntary dismissal.).
This case law is readily distinguishable from the case at hand. Here, plaintiffs have

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brought a single claim, violations of the Fair Labor Standards Act (“FLSA”), 29 U.S.C. § 207.

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Claims for violations of the FLSA must be brought within 2 years of the violation. 29 U.S.C. §

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255(a). However, a “cause of action arising out of a willful violation may be commenced within

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three years after the cause of action accrued.” Id. This statute of limitations does not change

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regardless of which court, state or federal, hears the claim. Cf. Manshack v. Southwestern

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Electric Power Co., 915 F.2d 172, 174-75 (5th Cir. 1990) (in distinguishing itself from Phillips,

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the Court held that because both the federal court and the Texas state court are governed by the

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same choice of law principals defendants would not be stripped of an absolute defense; and

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therefore, it was not an abuse of discretion to grant the voluntary dismissal). Similarly to

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Manshack, dismissal would not strip defendants of an absolute defense: even if plaintiffs were to

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assert a FLSA claim in the parallel state-court action, the claim is bound by the same statute of

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limitations in both state and federal court.

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Further, unlike in Phillips where the plaintiffs sought voluntary dismissal so that they

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could refile in a jurisdiction where the statute of limitations was not a bar to the action, that is not

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the case here. Rather, plaintiffs wish to abandon their federal claims in favor of the more

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encompassing state law claims. That does not amount to plain legal prejudice. See Smith v.

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Lenches, 263 F.3d 972, 975-76 (9th Cir. 2001) (After the California Supreme Court ruled on an
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issue of state law, the federal district court granted plaintiff’s motion to voluntarily dismiss their

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federal claims in favor of pursuing their parallel state claims based on the same facts. The Ninth

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Circuit affirmed, finding that the district court’s dismissal with prejudice “only strengthens

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[their] conclusion that the dismissal caused no legal prejudice and was not an abuse of

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discretion.”); Davis v. USX Corp., 819 F.2d 1270, 1275 (4th Cir. 1987) (reversing the lower

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court’s denial of plaintiff’s motion for voluntary dismissal, reasoning that “in cases involving the

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scope of state law, courts should readily approve dismissal when a plaintiff wishes to pursue a

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claim in state court.”).

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However, after deciding to grant voluntary dismissal, the court must determine whether

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such dismissal operates with or without prejudice. The Second, Fourth, Fifth, Sixth, Seventh, and

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Eighth Circuits have all held that Rule 41(a)(2) provides the district court with authority to grant

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dismissal on the condition that it be with prejudice. See Gravatt v. Columbia University, 845

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F.2d 54, 55-56 (2d Cir. 1988); Andes v. Versant Corp., 788 F.2d 1033, 1037 (4th Cir. 1986);

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Elbaor, 279 F.3d at 320; U.S. v. One Tract of Real Property, 95 F.3d 422, 425 (6th Cir. 1996);

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Marlow v. Winston & Strawn, 19 F.3d 300, 304 (7th Cir. 1994); Jaramillo v. Burkhart, 59 F.3d

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78, 79 (8th Cir. 1995). Because allowing plaintiffs to refile this case, which has been pending for

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over 5 years, would be inequitable, the court finds that granting plaintiffs’ motion on the

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condition that it be with prejudice is appropriate.

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First, defendants have spent considerable time and money engaging in discovery and

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generally litigating this already 5-year-old case. See ECF No. 77. Additionally, this condition is

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not overly broad for the situation at hand: there is only one pending claim and therefore,

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dismissal with prejudice will only affect the claim under which defendants have also asserted a

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statute of limitations defense. Contra Elbaor, 279 F.3d at 320 (finding that dismissal with

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prejudice was overly broad because the statute of limitations defense did not apply to all of the

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claims). Further, plaintiffs have made the choice to split their claims between federal and state

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court. However, that does not mean that the court should allow them to fully litigate their claims

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in state court, and then, should they be unsuccessful, permit them to return to federal court and

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take another bite at the apple. If plaintiffs truly wish to abandon their federal law claims in favor
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of their state law claims, the court will allow them to do so, but they will not be permitted to

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return to federal court and attempt to relitigate this action at a later date.

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III.

CONCLUSION

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IT IS THEREFORE ORDERED that plaintiffs’ motion to voluntarily dismiss the action

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(ECF No. 73) is GRANTED on the condition that it be with prejudice. Plaintiffs have 30 days

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from the date of this Order to withdraw their motion or consent to the dismissal despite the

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condition. See Lau v. Glendora Unified School Dist., 792 F.2d 929, 931 (9th Cir. 1986) (holding

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that a plaintiff be given a “reasonable period of time within which to refuse the conditional

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voluntary dismissal by withdrawing her motion for dismissal or to accept the dismissal despite

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the imposition of conditions.”). A failure to respond within the 30 day window shall constitute a

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consent to dismissal with prejudice.

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IT IS FURTHER ORDERED that defendants’ motion for partial summary judgment
(ECF No. 74) is conditionally DENIED as moot.

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IT IS SO ORDERED.

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DATED this 13th day of March, 2019.

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LARRY R. HICKS
UNITED STATES DISTRICT JUDGE

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