Hemming v. Decibels of Oregon, Inc.

          OPINION & ORDER

          MICHAEL McSHANE UNITED STATES DISTRICT JUDGE

         This matter comes before the Court on Defendants' Partial Motion to Dismiss, ECF No. 6. The Court has determined that this motion is appropriate for resolution without oral argument. For the reasons discussed below, the motion is GRANTED in part and DENIED in part.

         BACKGROUND

         Plaintiff Ryan Hemming was employed by Defendant Decibels of Oregon, Inc. as a Senior Technician from September or October 2009 through May 22, 2016. Plaintiff alleges he was subjected an unfair and unlawful system of payment while employed by Defendants, which deprived him of wages for time spent working and overtime pay to which he was entitled. Plaintiff alleges that other installation technicians employed by Defendants were subjected to the same unlawful system and seeks to bring a collective action pursuant to the Fair Labor Standards Act (“FLSA”) 29 U.S.C. § 201 et seq.

         Two other installation technicians, Matthew Wilson and Daniel Wilson, have brought substantially similar actions in Matthew Wilson v. Decibels of Oregon, Inc. et al., 1:16-cv-00855-CL (“Matthew Wilson”), filed May 16, 2016, and Daniel Wilson v. Decibels of Oregon, Inc. et al., 1:17-cv-01558-MC (“Daniel Wilson”), filed October 2, 2017. Daniel Wilson, Matthew Wilson, and Plaintiff are all represented by the same counsel and all three cases include a claim for collective action against Defendants under the FLSA.

         A number of installation technicians, including Plaintiff and Daniel Wilson, sought to join the earliest filed case, Matthew Wilson, as part of the collective action certification process. On July 12, 2017, Magistrate Judge Clarke issued a Report and Recommendation, in which he declined to certify the collective action because the record did not support a finding that the installation technicians were “similarly situated” for purposes of the FLSA. Livett Decl. Ex. D, at 6-9.^[1] This Court adopted Judge Clarke's Report and Recommendation on August 31, 2017, and conditional certification was denied. Livett Decl. Ex. D, at 14-16. This action and the Daniel Wilson case were filed shortly after the Court's conditional certification decision and the Matthew Wilson plaintiff's individual claims remain pending before Judge Clarke.

         LEGAL STANDARD

         To survive a motion to dismiss, a complaint must contain sufficient factual material, accepted as true, to “state a claim for relief that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 569 (2007). A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged. Id. at 556. “The plausibility standard is not akin to a ‘probability requirement' but asks for more than a sheer possibility that a defendant has acted unlawfully.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Twombly, 550 U.S. at 556). The Court must accept as true the allegations in the complaint and construe them in favor of the plaintiff, but the court is “not bound to accept as true a legal conclusion couched as a factual allegation.” Id.

         The pleading standard under Federal Rule of Civil Procedure 8 “does not require ‘detailed factual allegations, ' but it demands more than an unadorned, the-defendant-unlawfully-harmed-me accusation.” Iqbal, 556 U.S. at 678 (quoting Twombly, 550 U.S. at 555). “A pleading that offers ‘labels and conclusions' or ‘a formulaic recitation of the elements of a cause of action will not do.'” Id. A complaint also does not suffice if it tenders “naked assertion[s]” devoid of “further factual enhancement.” Id.

         DISCUSSION

         Defendants argue (1) that Plaintiff's claim for collective action is barred by collateral estoppel based on the Court's ruling in Matthew Wilson and (2) that Plaintiff's FLSA and state law claims are at least partially time-barred.

         I. Collateral Estoppel

         Defendants argue Plaintiff is collaterally estopped from asserting a claim for collective action under the FLSA based on the Court's prior decision denying conditional certification in Matthew Wilson. Defendants contend Plaintiff is bound by the Matthew Wilson decision because he affirmatively “opted-in” as a plaintiff to the collective action claim in that case prior to the denial of certification and is therefore barred from bringing a collective action claim in a subsequent action.

         Collateral estoppel, or issue preclusion, “generally refers to the effect of a prior judgment in foreclosing successive litigation of an issue of fact or law actually litigated and resolved in a valid court determination essential to the prior judgment, whether or not the issue arises on the same or a different claim.” New Hampshire v. Maine, 532 U.S. 742, 748-49 (2001). Collateral estoppel applies where it is established that “(1) the issue necessarily decided at the previous proceedings is identical to the one which is sought to be relitigated; (2) the first proceeding ended with a final judgment on the merits; and (3) the party against whom collateral estoppel is asserted was a party or in privity with a party in the first proceeding.” Hydranautics v. FilmTec Corp., 204 F.3d 880, 885 (9th Cir. 2000) (internal quotation marks and citation omitted).

         A. Identity of Parties

         Defendants argue that, by affirmatively opting in to the Matthew Wilson collective action claim, Plaintiff became a party to that action and is therefore bound by the preclusive effect of the Court's unfavorable decision. Plaintiff contends he was not a “party” in Matthew Wilson because the Court ultimately declined to certify collective action in that case.

         To support his position, Plaintiff relies on the Supreme Court's decision in Smith v. Bayer Corp., 564 U.S. 299 (2011). In Smith, the Supreme Court held that, in the context of a class action under Rule 23, an unnamed member of a proposed but uncertified class was not a “party” to earlier class litigation and was not bound under principles of nonparty preclusion. Id. at 312-18. Collective actions under the FLSA are distinguishable from class actions under Rule 23, however. Unlike a Rule 23 action, an employee becomes a party plaintiff in an FLSA case when he consents in writing and the consent is filed in the court in which the suit is brought. See 29 U.S.C. §§ 216(b), 256. A plaintiff who validly consents to “opt-in” to a collective action claim is bound by the court's judgment. Id.; see also McElmurry v. U.S. Bank Nat. Ass'n, 495 F.3d 1136, 1139 (9th Cir. 2007) (“[T]hose plaintiffs who expressly join the collective action are bound by its results.”).

         In Phillips v. Randy's Trucking, Inc., 1:16-cv-00753-LJO-JLT, 2016 WL 6248264 (E.D. Cal. Oct. 26, 2016), the district court rejected a similar attempt to apply Smith to FLSA opt-in parties. As in the present case, the Phillips plaintiff had affirmatively opted in to a prior collective action class before the court denied conditional certification. Id. at *1. The plaintiff argued that, following Smith, he was not a party to the prior action. The court rejected the plaintiff's argument, finding that “Smith is inapplicable here, because that holding applies to putative plaintiffs in the Rule 23 context who do not affirmatively opt in to the suit, and are therefore not considered part of the class until class certification is granted.” Id., at *4 n.2.

         Given the strong factual similarity between Phillips and the present case, the Court finds the reasoning of Phillips to be especially persuasive. Plaintiff affirmatively opted in to the collective action claim in Matthew Wilson before the Court denied conditional certification. In doing so, Plaintiff agreed to be bound by the Court's decision. See Livett Decl. Ex. B, at 19.^[2]The Court therefore ...