1 2 UNITED STATES DISTRICT COURT 3 NORTHERN DISTRICT OF CALIFORNIA 4 5 LISA MILLER, Case No. 20-cv-02253-HSG 6 Plaintiff, ORDER GRANTING MOTION TO DISMISS FIRST AMENDED 7 v. COMPLAINT 8 INFINITE PERCENT PARTNERS LLC, et Re: Dkt. Nos. 32, 50 al., 9 Defendants. 10 11 Pending before the Court is Defendants’ Motion to Dismiss. Dkt. No. 50 (“Mot.”). For 12 the following reasons, the motion to dismiss is GRANTED. 13 I. BACKGROUND 14 The Court previously summarized the factual background of this employment dispute 15 between Plaintiff, Dr. Lisa Miller, and Defendants Infinite Percent Partners LLC (“IPP”), et al. 16 See Dkt. No. 48 (“Order”). 17 In brief, Plaintiff contends that she relied to her detriment on Defendants’ promise of full- 18 time employment as IPP’s Chief Medical Officer with an annual salary of $200,000; medical 19 benefits; and equity. Id. In her First Amended Complaint (“FAC”), Plaintiff repeats the 20 previously alleged causes of action for (a) Violation of the Fair Labor Standards Act’s (“FLSA”) 21 anti-retaliation provision; (b) Violation of California Labor Code section 1102.5; (c) Breach of 22 Contract; (d) Promissory Estoppel; (e) Estoppel by Conduct; (f) Non-Payment of Wages; and (g) 23 Failure to Provide Itemized Wage Statements. FAC ¶¶ 28-67. 24 Plaintiff adds in her FAC the allegation that Defendants failed to pay her the federal 25 minimum wage in violation of FLSA § 206. FAC ¶¶ 35-38. Plaintiff also alleges that Defendants 26 violated FLSA § 215(a)(3) in terminating her employment after her complaints about timely and 27 complete compensation. FAC ¶¶ 39-40. Defendants move to dismiss Plaintiff’s FAC on the 1 grounds that Plaintiff has not alleged facts sufficient to establish a minimum wage or retaliation 2 claim under the FLSA. Mot. at 1. 3 II. LEGAL STANDARD 4 Federal Rule of Civil Procedure 8(a) requires that a complaint contain “a short and plain 5 statement of the claim showing that the pleader is entitled to relief[.]” A defendant may move to 6 dismiss a complaint for failing to state a claim upon which relief can be granted under Federal 7 Rule of Civil Procedure 12(b)(6). “Dismissal under Rule 12(b)(6) is appropriate only where the 8 complaint lacks a cognizable legal theory or sufficient facts to support a cognizable legal theory.” 9 Mendiondo v. Centinela Hosp. Med. Ctr., 521 F.3d 1097, 1104 (9th Cir. 2008). To survive a Rule 10 12(b)(6) motion, a plaintiff must plead “enough facts to state a claim to relief that is plausible on 11 its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). A claim is facially plausible 12 when a plaintiff pleads “factual content that allows the court to draw the reasonable inference that 13 the defendant is liable for the misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). 14 In reviewing the plausibility of a complaint, courts “accept factual allegations in the 15 complaint as true and construe the pleadings in the light most favorable to the nonmoving party.” 16 Manzarek v. St. Paul Fire & Marine Ins. Co., 519 F.3d 1025, 1031 (9th Cir. 2008). Nonetheless, 17 Courts do not “accept as true allegations that are merely conclusory, unwarranted deductions of 18 fact, or unreasonable inferences.” In re Gilead Scis. Sec. Litig., 536 F.3d 1049, 1055 (9th Cir. 19 2008). And even where facts are accepted as true, “a plaintiff may plead [him]self out of court” if 20 he “plead[s] facts which establish that he cannot prevail on his . . . claim.” Weisbuch v. Cnty. of 21 Los Angeles, 119 F.3d 778, 783 n.1 (9th Cir. 1997) (quotation marks and citation omitted). 22 If dismissal is appropriate under Rule 12(b)(6), a court “should grant leave to amend even 23 if no request to amend the pleading was made, unless it determines that the pleading could not 24 possibly be cured by the allegation of other facts.” Lopez v. Smith, 203 F.3d 1122, 1130 (9th Cir. 25 2000) (quotation marks and citation omitted). 26 III. DISCUSSION 27 In Plaintiff’s initial complaint, she brought a freestanding retaliation claim. The Court 1 underlying FLSA violation. Order at 3-5. As the Court explained, “the purpose of the FLSA’s 2 anti-retaliation clause is to ensure vindication of the wage-and-hour rights established by the 3 statute.” Id. at 4 (citing Lambert v. Ackerley, 180 F.3d 997, 1004 (9th Cir. 1999) (“The FLSA’s 4 anti-retaliation clause is designed to ensure that employees are not compelled to risk their jobs in 5 order to assert their wage and hour rights under the Act.”)). Plaintiff now alleges an underlying 6 minimum wage violation in addition to her retaliation claim. FAC ¶¶ 35-38. But Plaintiff’s 7 allegations of an FLSA minimum wage violation do not meet the 12(b)(6) plausibility threshold 8 and appear to be an attempt to manufacture federal court jurisdiction rather than to assert a bona 9 fide FLSA violation. 10 The FLSA requires employers to pay minimum wages and overtime compensation to 11 nonexempt, i.e. hourly, employees. See 29 U.S.C. §§ 206–207. These requirements do not apply 12 to “any employee employed in a bona fide executive, administrative, or professional capacity.” 29 13 U.S.C. § 213(a)(1). While it is the employer who bears the burden of demonstrating that an FLSA 14 exemption applies to an employee, Klem v. Cnty. of Santa Clara, 208 F.3d 1085, 1089 (9th Cir. 15 2000), the Court may rely on “‘judicial experience and common sense’ to determine whether the 16 factual allegations, which are assumed to be true, ‘plausibly give rise to an entitlement to relief.’” 17 Landers v. Quality Commc’ns, Inc., 771 F.3d 638, 641 (9th Cir. 2014) (quoting Iqbal, 556 U.S. at 18 679, and applying the 12(b)(6) plausibility standard in the FLSA context). 19 Here, Plaintiff alleges that she accepted a job offer from Defendants to be IPP’s Chief 20 Medical Officer and that she accepted an annual salary of $200,000. FAC ¶¶ 15, 17. According 21 to Plaintiff, Defendants offered to pay her “$10,000 per month for the first three months” and to 22 pay the accrued balance in stock and cash. Id. ¶ 17. After the first three months, Plaintiff was to 23 be paid $16,667 per month. Id. ¶ 31. Plaintiff’s duties, according to the FAC, included 24 (a) reviewing current research from Cythera; (b) reviewing IPP’s operations and procedures; (c) reviewing consumer product 25 categories; (d) working closely with manufacturing specialists on consumer product formulation parameters; (e) identifying and 26 researching scientific data related to specific nutrients and botanicals; (f) attending Cythera lab weekly meetings for research updates; (g) 27 attending bi-weekly team and company meetings; (h) providing physician education. 1 2 FAC ¶ 18. 3 According to Plaintiff’s own allegations, she was hired to perform professional functions,1 4 and she was to be paid a monthly salary, not an hourly wage. Plaintiff does not even attempt to 5 allege that she was a nonexempt employee. See generally FAC.
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1 2 UNITED STATES DISTRICT COURT 3 NORTHERN DISTRICT OF CALIFORNIA 4 5 LISA MILLER, Case No. 20-cv-02253-HSG 6 Plaintiff, ORDER GRANTING MOTION TO DISMISS FIRST AMENDED 7 v. COMPLAINT 8 INFINITE PERCENT PARTNERS LLC, et Re: Dkt. Nos. 32, 50 al., 9 Defendants. 10 11 Pending before the Court is Defendants’ Motion to Dismiss. Dkt. No. 50 (“Mot.”). For 12 the following reasons, the motion to dismiss is GRANTED. 13 I. BACKGROUND 14 The Court previously summarized the factual background of this employment dispute 15 between Plaintiff, Dr. Lisa Miller, and Defendants Infinite Percent Partners LLC (“IPP”), et al. 16 See Dkt. No. 48 (“Order”). 17 In brief, Plaintiff contends that she relied to her detriment on Defendants’ promise of full- 18 time employment as IPP’s Chief Medical Officer with an annual salary of $200,000; medical 19 benefits; and equity. Id. In her First Amended Complaint (“FAC”), Plaintiff repeats the 20 previously alleged causes of action for (a) Violation of the Fair Labor Standards Act’s (“FLSA”) 21 anti-retaliation provision; (b) Violation of California Labor Code section 1102.5; (c) Breach of 22 Contract; (d) Promissory Estoppel; (e) Estoppel by Conduct; (f) Non-Payment of Wages; and (g) 23 Failure to Provide Itemized Wage Statements. FAC ¶¶ 28-67. 24 Plaintiff adds in her FAC the allegation that Defendants failed to pay her the federal 25 minimum wage in violation of FLSA § 206. FAC ¶¶ 35-38. Plaintiff also alleges that Defendants 26 violated FLSA § 215(a)(3) in terminating her employment after her complaints about timely and 27 complete compensation. FAC ¶¶ 39-40. Defendants move to dismiss Plaintiff’s FAC on the 1 grounds that Plaintiff has not alleged facts sufficient to establish a minimum wage or retaliation 2 claim under the FLSA. Mot. at 1. 3 II. LEGAL STANDARD 4 Federal Rule of Civil Procedure 8(a) requires that a complaint contain “a short and plain 5 statement of the claim showing that the pleader is entitled to relief[.]” A defendant may move to 6 dismiss a complaint for failing to state a claim upon which relief can be granted under Federal 7 Rule of Civil Procedure 12(b)(6). “Dismissal under Rule 12(b)(6) is appropriate only where the 8 complaint lacks a cognizable legal theory or sufficient facts to support a cognizable legal theory.” 9 Mendiondo v. Centinela Hosp. Med. Ctr., 521 F.3d 1097, 1104 (9th Cir. 2008). To survive a Rule 10 12(b)(6) motion, a plaintiff must plead “enough facts to state a claim to relief that is plausible on 11 its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). A claim is facially plausible 12 when a plaintiff pleads “factual content that allows the court to draw the reasonable inference that 13 the defendant is liable for the misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). 14 In reviewing the plausibility of a complaint, courts “accept factual allegations in the 15 complaint as true and construe the pleadings in the light most favorable to the nonmoving party.” 16 Manzarek v. St. Paul Fire & Marine Ins. Co., 519 F.3d 1025, 1031 (9th Cir. 2008). Nonetheless, 17 Courts do not “accept as true allegations that are merely conclusory, unwarranted deductions of 18 fact, or unreasonable inferences.” In re Gilead Scis. Sec. Litig., 536 F.3d 1049, 1055 (9th Cir. 19 2008). And even where facts are accepted as true, “a plaintiff may plead [him]self out of court” if 20 he “plead[s] facts which establish that he cannot prevail on his . . . claim.” Weisbuch v. Cnty. of 21 Los Angeles, 119 F.3d 778, 783 n.1 (9th Cir. 1997) (quotation marks and citation omitted). 22 If dismissal is appropriate under Rule 12(b)(6), a court “should grant leave to amend even 23 if no request to amend the pleading was made, unless it determines that the pleading could not 24 possibly be cured by the allegation of other facts.” Lopez v. Smith, 203 F.3d 1122, 1130 (9th Cir. 25 2000) (quotation marks and citation omitted). 26 III. DISCUSSION 27 In Plaintiff’s initial complaint, she brought a freestanding retaliation claim. The Court 1 underlying FLSA violation. Order at 3-5. As the Court explained, “the purpose of the FLSA’s 2 anti-retaliation clause is to ensure vindication of the wage-and-hour rights established by the 3 statute.” Id. at 4 (citing Lambert v. Ackerley, 180 F.3d 997, 1004 (9th Cir. 1999) (“The FLSA’s 4 anti-retaliation clause is designed to ensure that employees are not compelled to risk their jobs in 5 order to assert their wage and hour rights under the Act.”)). Plaintiff now alleges an underlying 6 minimum wage violation in addition to her retaliation claim. FAC ¶¶ 35-38. But Plaintiff’s 7 allegations of an FLSA minimum wage violation do not meet the 12(b)(6) plausibility threshold 8 and appear to be an attempt to manufacture federal court jurisdiction rather than to assert a bona 9 fide FLSA violation. 10 The FLSA requires employers to pay minimum wages and overtime compensation to 11 nonexempt, i.e. hourly, employees. See 29 U.S.C. §§ 206–207. These requirements do not apply 12 to “any employee employed in a bona fide executive, administrative, or professional capacity.” 29 13 U.S.C. § 213(a)(1). While it is the employer who bears the burden of demonstrating that an FLSA 14 exemption applies to an employee, Klem v. Cnty. of Santa Clara, 208 F.3d 1085, 1089 (9th Cir. 15 2000), the Court may rely on “‘judicial experience and common sense’ to determine whether the 16 factual allegations, which are assumed to be true, ‘plausibly give rise to an entitlement to relief.’” 17 Landers v. Quality Commc’ns, Inc., 771 F.3d 638, 641 (9th Cir. 2014) (quoting Iqbal, 556 U.S. at 18 679, and applying the 12(b)(6) plausibility standard in the FLSA context). 19 Here, Plaintiff alleges that she accepted a job offer from Defendants to be IPP’s Chief 20 Medical Officer and that she accepted an annual salary of $200,000. FAC ¶¶ 15, 17. According 21 to Plaintiff, Defendants offered to pay her “$10,000 per month for the first three months” and to 22 pay the accrued balance in stock and cash. Id. ¶ 17. After the first three months, Plaintiff was to 23 be paid $16,667 per month. Id. ¶ 31. Plaintiff’s duties, according to the FAC, included 24 (a) reviewing current research from Cythera; (b) reviewing IPP’s operations and procedures; (c) reviewing consumer product 25 categories; (d) working closely with manufacturing specialists on consumer product formulation parameters; (e) identifying and 26 researching scientific data related to specific nutrients and botanicals; (f) attending Cythera lab weekly meetings for research updates; (g) 27 attending bi-weekly team and company meetings; (h) providing physician education. 1 2 FAC ¶ 18. 3 According to Plaintiff’s own allegations, she was hired to perform professional functions,1 4 and she was to be paid a monthly salary, not an hourly wage. Plaintiff does not even attempt to 5 allege that she was a nonexempt employee. See generally FAC. Instead, she argues in her 6 opposition that “[e]xempt employees are still entitled to the benefits of the FLSA if they are paid 7 no minimum wage for 3 months.” 2 Dkt. No. 51 at 9. Plaintiff cites no authority, id., and the 8 Court has found none, in support of this proposition. On the contrary, the plain language of 29 9 U.S.C. § 213 clearly exempts “any employee employed in a bona fide executive, administrative, or 10 professional capacity” from the minimum wage provisions of 29 U.S.C. § 206. Accordingly, the 11 Court finds that Plaintiff has not plausibly alleged a violation of the FLSA’s minimum wage 12 provisions. 13 As the Court explained in its previous order, the viability of Plaintiff’s retaliation claim 14 depends on a plausible allegation of an underlying FLSA violation, which the FAC fails to 15 provide. Further, “[t]o fall within the scope of the antiretaliation provision, a complaint must be 16 1 The terms and duties of Plaintiff’s alleged employment with IPP fit squarely within Department 17 of Labor regulations defining an “employee employed in a bona fide professional capacity”:
18 The term “employee employed in a bona fide professional capacity” in section 13(a)(1) of the Act shall mean any employee: 19 (1) Compensated on a salary or fee basis pursuant to § 541.600 at a rate of not less than $684 per week . . . exclusive of board, lodging or 20 other facilities; and (2) Whose primary duty is the performance of work: 21 (i) Requiring knowledge of an advanced type in a field of science or learning customarily acquired by a prolonged course of specialized 22 intellectual instruction; or (ii) Requiring invention, imagination, originality or talent in a 23 recognized field of artistic or creative endeavor.
24 29 C.F.R. § 541.300. 2 The Court notes that Plaintiff’s attempt to transform her state law contract dispute into an FLSA 25 minimum wage claim is undermined by her allegation that she was paid $5,000 on September 8, 2019 for work performed in August. FAC ¶ 33. Setting aside Plaintiff’s contradictory allegation 26 that she was paid nothing for work performed in August 2019, see FAC ¶ 38, this $5,000 payment exceeds the federal minimum wage for an employee working full time for three months. The 27 FLSA establishes the federal minimum wage at $7.25 an hour. See 29 U.S.C. § 206. Assuming a 1 sufficiently clear and detailed for a reasonable employer to understand it, in light of both content 2 and context, as an assertion of rights protected by the statute and a call for their protection.” 3 Rosenfield v. GlobalTranz Enterprises, Inc., 811 F.3d 282, 286 (9th Cir. 2015) (quoting Kasten v. 4 Saint-Gobain Performance Plastics Corp., 131 S.Ct. 1325, 1335 (2011)). “The employee’s job 5 title and responsibilities . . . form an important part of that ‘context.’” Id. 6 Here, Plaintiff alleges that she “complained several times to [Defendants’ COO] that she 7 was not being paid” and that she “complained to Defendants that she received no payment for her 8 work hours in June, July, and August and asked them to provide her compensation.” FAC ¶¶ 21, 9 34. She also submitted invoices to Defendants and “offered to provide a consulting contract to 10 Defendants and request a retainer for her work.” FAC ¶ 25. 11 The Court finds that Plaintiff’s vague allegations of complaints about not receiving a 12 promised salary for a professional job as “Chief Medical Officer,” as well as her attempt to 13 invoice Defendants and enter into a consulting contract complete with retainer (actions not 14 normally correlated with minimum wage disputes), did not provide “fair notice” to Defendants 15 that she intended to assert her rights under the FLSA’s minimum wage provisions. See Kasten, 16 131 S.Ct. at 1334 (“[T]he employer must have fair notice that an employee is making a complaint 17 that could subject the employer to a later claim of retaliation.”); Lambert v. Ackerley, 180 F.3d 18 997, 1007 (9th Cir. 1999) (“We agree that not all amorphous expressions of discontent related to 19 wages and hours constitute complaints filed within the meaning of [FLSA] § 215(a)(3)”). 20 Accordingly, the Court finds that Plaintiff again has not plausibly alleged an FLSA retaliation 21 claim. 22 In her opposition, Plaintiff requests leave to further amend her complaint if the Court 23 grants the motion to dismiss. Dkt. No. 51 at 17. It is within the court’s discretion to determine 24 whether to grant leave to amend, and “[a] district court does not err in denying leave to amend 25 where the amendment would be futile.” Gardner v. Martino, 563 F.3d 981, 990 (9th Cir. 2009). 26 Plaintiff’s failure to plausibly allege an underlying FLSA violation for her retaliation claim was 27 the exact defect identified by the Court in its prior dismissal order and at the hearing on the motion 1 to lack a substantive connection to the FLSA, Plaintiff’s complaints about her compensation may 2 have failed to provide Defendants with the required notice that she was asserting statutory rights 3 under the FLSA.” Id. at 5 n.1 (citing Kasten, 563 U.S. at 14). Plaintiff was thus informed of the 4 defects in her FLSA claim and given an opportunity to amend. In light of Plaintiff’s failure to 5 plausibly allege an FLSA claim in her amended complaint even with this direct guidance, the 6 Court finds that further amendment would be futile. See Zucco Partners, LLC v. Digimarc Corp., 7 552 F.3d 981, 1007 (9th Cir. 2009) (“[W]here the plaintiff has previously been granted leave to 8 amend and has subsequently failed to add the requisite particularity to its claims, [t]he district 9 court’s discretion to deny leave to amend is particularly broad.”). Accordingly, Plaintiff’s FLSA 10 claims are DISMISSED WITHOUT LEAVE TO AMEND. 11 A district court may decline to exercise supplemental jurisdiction if it has dismissed all 12 claims over which it has original jurisdiction. Sanford v. MemberWorks, Inc., 625 F.3d 550, 561 13 (9th Cir. 2010) (citing 28 U.S.C. § 1367(c)(3)). “[I]n the usual case in which all federal-law 14 claims are eliminated before trial, the balance of factors to be considered under the pendent 15 jurisdiction doctrine—judicial economy, convenience, fairness, and comity—will point toward 16 declining to exercise jurisdiction over the remaining state-law claims.” Id. (citation and internal 17 quotations omitted). Having dismissed Plaintiff’s federal claims, the Court, in its discretion, 18 declines to assert supplemental jurisdiction over the remaining state law claims. Accordingly, 19 Plaintiff’s state law claims are DISMISSED WITHOUT PREJUDICE. 20 // 21 // 22 // 23 // 24 25 // 26 // 27 // IV. CONCLUSION The Court GRANTS Defendant’s motion to dismiss. Plaintiff's FLSA claims are 2 DISMISSED WITHOUT LEAVE TO AMEND. The Court declines to exercise supplemental 3 jurisdiction over Plaintiff's remaining state law claims, and those claims are DISMISSED 4 WITHOUT PREJUDICE. The Clerk is directed to close the case. 5 IT IS SO ORDERED. 6 Dated: 6/17/2021 . 8 nae wote S. GILLIAM, JR. □ 9 United States District Judge 10 11 12
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Z 18 19 20 21 22 23 24 25 26 27 IP 3 Tn light of this dismissal, Plaintiffs motion for partial summary judgment as to her employment 28 8 status under California law is DENIED AS MOOT. Dkt. No. 32.