Lawrence J. O'Neill, UNITED STATES CHIEF DISTRICT JUDGE.
Currently pending before the Court are Plaintiffs' Donnie Cummings, Christopher
Plaintiffs performed work for the Chevron corporation as well site/drill site managers, and allege they were intentionally misclassified as independent contractors by Chevron and impermissibly denied overtime wages pursuant to the Fair Labor Standards Act ("FLSA"), 29 U.S.C. § 216(b). Plaintiffs are pursuing claims in collective actions under the FLSA against Chevron in separate proceedings: McQueen, et al. v. Chevron, No. 4:16-cv-02089-JSW (N.D. Cal.), filed on April 20, 2016, and Cummings v. Chevron, JAMS Arbitration Reference No. 1100086694.
According to Plaintiffs, although Chevron controlled Plaintiffs' work and directly supervised Plaintiffs, Chevron attempted to insulate itself from FLSA liability by creating an artificially complex structure to employ Plaintiffs. (Doc. 1, ¶ 3.) Specifically, Chevron contracted with Cenergy to be an intermediary between Chevron and Plaintiffs. As a condition of working for Chevron through Cenergy, Plaintiffs and others were required to form corporate entities through which they received wages. Plaintiff Donnie Cummings created Cummings Consulting LLC, through which he was paid for part of his employment with Chevron; Plaintiff Christopher Jones created Chris Jones DMS, LLC through which he received payments for his work from Chevron; and Plaintiff Charles Beaty created Drilling Consultants, Inc. through which he received payments for his work for Chevron. (Doc. 1, ¶¶ 9-11.)
Through these newly formed corporate entities, Plaintiffs entered into Master Service Agreements ("MSAs") with Cenergy under which they agreed (1) to be classified as independent contractors and not employees; (2) that these corporate entities would be solely responsible for payment of all wages to Plaintiffs; and (3) to indemnify Cenergy and Chevron against any loss arising out of the agreement. These MSAs were presented to Plaintiffs as-is with no negotiation, and signing the MSAs was a condition of working for Chevron through Cenergy. An indemnity provision contained in the MSAs required the following:
(Doc. 1-1, p. 10; Doc. 1-2, p. 9; Doc. 1-3, p. 10.) The MSAs also contained an arbitration provision that requires all disputes be resolved through arbitration in Texas under the American Arbitration Association's "Construction Industry Rules":
(Doc. 1-1, p. 11-12; Doc. 1-2, p. 8; Doc. 1-3, p. 11.)
On March 21, 2017, Cenergy sent a demand letter to Cummings Consulting, LLC ("CCLLC"), indicating it had become aware that "an employee of Cummings Consulting, LLC" (i.e., Plaintiff Donnie Cummings) had opted to be a member of the purported FLSA class action against Chevron pending before the U.S. District Court for the Northern District of California in case number 4:16-cv-02089-JSW. (Doc. 1-4, Exh. D, p. 2.) Cenergy advised CCLLC that, "pursuant to a separate agreement," Cenergy "may be obligated to defend and indemnify Chevron Corporation for any costs, expenses, or other damages
On April 5, 2017, Plaintiffs filed suit in this Court, on behalf of themselves and all others similarly situated, seeking a declaration under 28 U.S.C. § 2201, the Declaratory Judgment Act ("DJA"), that Cenergy has no legal right to attempt to collect or obtain, through court or arbitration, the wages that Plaintiffs seek from Chevron or associated penalties, damages, and interest, or Chevron's or Cenergy's defenses costs, including attorneys' fees. Plaintiffs contend Chevron and Cenergy have improperly attempted to "contract around the FLSA" by insisting Plaintiffs pay, through their corporate entities, the wages Chevron is legally obligated to pay Plaintiffs under the FLSA and the costs of Chevron's defense in the separate FLSA collective action.
On May 1, 2017, Plaintiffs filed a motion for preliminary injunction asserting that Cenergy has commenced arbitration against Plaintiffs' corporate entities proceedings pursuant to the MSAs. Plaintiffs seek to enjoin those arbitration proceedings and to halt Cenergy from attempting to collect indemnification. On May 2, 2017, Cenergy filed a motion to dismiss for lack of subject matter jurisdiction pursuant to Federal Rule of Civil Procedure 12(b)(1) and for failure to state a claim under Federal Rule of Civil Procedure 12(b)(6).
A defendant may move for dismissal of an action for lack of subject matter jurisdiction under Federal Rule of Civil Procedure 12(b)(1). A motion to dismiss for lack of subject matter jurisdiction will be granted if the complaint, on its face, fails to allege facts sufficient to establish subject matter jurisdiction. See Savage v. Glendale Union High Sch., 343 F.3d 1036, 1039 n.2 (9th Cir. 2003). If a plaintiff lacks standing under Article III of the U.S. Constitution, then the court lacks subject matter jurisdiction and the case must be dismissed. See Steel Co. v. Citizens for a Better Env't, 523 U.S. 83, 101-02, 118 S.Ct. 1003, 140 L.Ed.2d 210 (1998).
A jurisdictional challenge may be facial or factual in nature. Safe Air for Everyone v. Meyer, 373 F.3d 1035, 1039 (9th Cir. 2004). In a facial attack, the court determines whether the allegations in the complaint are facially sufficient to invoke federal jurisdiction, accepting all material allegations in the complaint as true and construing them in favor of the party asserting jurisdiction. See Warth v. Seldin, 422 U.S. 490, 501, 95 S.Ct. 2197, 45 L.Ed.2d 343 (1975). Where the attack is factual, however, "[n]o presumptive truthfulness attaches to plaintiff's allegations, and the existence of disputed material facts will not preclude the trial court from
In resolving a factual dispute as to the existence of subject matter jurisdiction, a court may review extrinsic evidence beyond the complaint without converting a motion to dismiss into one for summary judgment. See Safe Air for Everyone, 373 F.3d at 1039; McCarthy v. United States, 850 F.2d 558, 560 (9th Cir. 1988) (holding that a court "may review any evidence, such as affidavits and testimony, to resolve factual disputes concerning the existence of jurisdiction."). Once a party has moved to dismiss for lack of subject matter jurisdiction under Rule 12(b)(1), the opposing party bears the burden of establishing the Court's jurisdiction. See Kokkonen v. Guardian Life Ins. Co., 511 U.S. 375, 377, 114 S.Ct. 1673, 128 L.Ed.2d 391 (1994); Chandler v. State Farm Mut. Auto. Ins. Co., 598 F.3d 1115, 1122 (9th Cir. 2010); St. Clair v. City of Chico, 880 F.2d 199, 201 (9th Cir. 1989).
A motion to dismiss pursuant to Rule 12(b)(6) is a challenge to the sufficiency of the allegations set forth in the complaint. Dismissal under Rule 12(b)(6) is proper where there is either a "lack of a cognizable legal theory" or "the absence of sufficient facts alleged under a cognizable legal theory." Balistreri v. Pacifica Police Dep't., 901 F.2d 696, 699 (9th Cir. 1990). In considering a motion to dismiss for failure to state a claim, the court generally accepts as true the allegations in the complaint, construes the pleading in the light most favorable to the party opposing the motion, and resolves all doubts in the pleader's favor. Lazy Y. Ranch LTD v. Behrens, 546 F.3d 580, 588 (9th Cir. 2008).
To survive a 12(b)(6) motion to dismiss, the plaintiff must allege "enough facts to state a claim to relief that is plausible on its face." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (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." Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009). "The plausibility standard is not akin to a `probability requirement,' but it asks for more than a sheer possibility that a defendant has acted unlawfully." Id. (quoting Twombly, 550 U.S. at 556, 127 S.Ct. 1955). "While a complaint attacked by a Rule 12(b)(6) motion to dismiss does not need detailed factual allegations, a plaintiff's obligation to provide the `grounds' of his `entitlement to relief' requires more than labels and conclusions." Twombly, 550 U.S. at 555, 127 S.Ct. 1955 (internal citations omitted). Thus, "bare assertions ... amount[ing] to nothing more than a `formulaic recitation of the elements' ... are not entitled to be assumed true." Iqbal, 556 U.S. at 681, 129 S.Ct. 1937. "[T]o be entitled to the presumption of truth, allegations in a complaint ... must contain sufficient allegations of underlying facts to give fair notice and to enable the opposing party to defend itself effectively." Starr v. Baca, 652 F.3d 1202, 1216 (9th Cir. 2011). In practice, "a complaint ... must contain either direct or inferential allegations respecting all the material elements necessary to sustain recovery under some viable legal theory." Twombly, 550 U.S. at 562, 127 S.Ct. 1955. To the extent that the pleadings can be cured by the allegation of additional facts, a plaintiff should be afforded leave to amend. Cook, Perkiss and
The parties disagree whether the Court has subject matter jurisdiction over Plaintiffs' complaint seeking declaratory relief under the DJA. Plaintiffs maintain the declaration they seek arises from their rights under the FLSA, which confers federal-question jurisdiction under 28 U.S.C. § 1331. Cenergy argues that in the posture of this declaratory relief action, the FLSA arises only as a defense to Cenergy's indemnity action, and it does not confer subject matter jurisdiction under the well-pleaded complaint rule.
Federal-question jurisdiction pursuant to 28 U.S.C. § 1331 arises in two situations. First, a court may exercise federal-question jurisdiction where a federal right or immunity is "an element, and an essential one, of the plaintiff's cause of action," Franchise Tax Bd. v. Constr. Laborers Vacation Trust for S. Cal., 463 U.S. 1, 11, 103 S.Ct. 2841, 77 L.Ed.2d 420 (1983) (internal citation and quotation marks omitted). Second, federal-question jurisdiction arises where a state-law claim "necessarily raise[s] a stated federal issue, actually disputed and substantial, which a federal forum may entertain without disturbing any congressionally approved balance of federal and state judicial responsibilities." Grable & Sons Metal Prod., Inc. v. Darue Eng'g & Mfg., 545 U.S. 308, 314, 125 S.Ct. 2363, 162 L.Ed.2d 257 (2005).
To assess federal-question jurisdiction, courts apply the "well-pleaded complaint" rule under which "federal jurisdiction exists only when a federal question is presented on the face of the plaintiff's properly pleaded complaint." Caterpillar Inc. v. Williams, 482 U.S. 386, 391-92, 107 S.Ct. 2425, 96 L.Ed.2d 318 (1987). "A defense is not a part of a plaintiff's properly pleaded statement of his or her claim." Rivet v. Regions Bank, 522 U.S. 470, 475, 118 S.Ct. 921, 139 L.Ed.2d 912 (1998).
Assessing federal-question jurisdiction in declaratory relief actions is sometimes difficult. First, the DJA itself is not an independent source of federal law that provides jurisdiction. Janakes v. U.S. Postal Serv., 768 F.2d 1091, 1093 (9th Cir. 1985) ("The use of the declaratory judgment statute does not confer jurisdiction by itself if jurisdiction would not exist on the face of a well-pleaded complaint brought without the use of 28 U.S.C. § 2201."). Second, if the declaratory relief action raises a federal issue only as a defense to a threatened coercive action, this will not supply federal-question jurisdiction. In other words, if the declaratory relief plaintiff would be unable to state a coercive claim under the federal law or substantial issue of federal law raised in the declaratory relief complaint, the federal law is a defense only and does not supply jurisdiction under the well-pleaded complaint rule. In such cases, the analysis shifts: "[w]here the complaint in an action for declaratory judgment seeks in essence to assert a defense to an impending or threatened state court action, it is the character of the threatened action ... which will determine whether there is a federal-question jurisdiction in the District Court." Public Serv. Comm'n v. Wycoff Co. Inc., 344 U.S. 237, 248, 73 S.Ct. 236, 97 S.Ct. 291 (1952). To perform this analysis, courts essentially "reposition the parties in a declaratory relief action by asking whether [the court] would have jurisdiction had the declaratory relief defendant been a plaintiff seeking a federal remedy." Standard Ins. Co. v. Saklad, 127 F.3d 1179,
Here, Plaintiffs seek a declaration of their rights under the FLSA, which they claim supplies a federal question for purposes of jurisdiction. The FLSA, however, is raised only as a defense to Cenergy's claim for indemnity under the MSAs. Plaintiffs have no coercive action under the FLSA that can be stated against Cenergy: there is no declaratory relief available under the FLSA itself, and Cenergy is not alleged to be Plaintiffs' employer, either solely or jointly. Under the factual circumstances presented in the complaint, the FLSA is raised only as a defense to Cenergy's demand for indemnity under the terms of the MSAs executed between Cenergy and Plaintiffs' corporate entities. The assertion of a federal defense does not confer subject matter jurisdiction. Janakes, 768 F.2d at 1093 ("Á declaratory judgment plaintiff may not assert a federal question in his complaint if, but for the declaratory judgment procedure, that question would arise only as a federal defense to a state law claim brought by the declaratory judgment defendant in state court."). There is also no indication that any of the essential elements of Cenergy's contractual indemnity claim necessarily incorporate a substantial question of federal law. See Grable, 545 U.S. at 314, 125 S.Ct. 2363. Thus, repositioning the parties and considering the nature of Cenergy's indemnity action does not establish federal-question jurisdiction in this case.
Plaintiffs assert the FLSA "completely" preempts any state-law indemnity cause of action by Cenergy. Although federal preemption is ordinarily only a defense that does not confer jurisdiction, the "complete preemption" doctrine is an exception to the well-pleaded complaint rule. Caterpillar, Inc. v. Williams, 482 U.S. 386, 393, 107 S.Ct. 2425, 96 L.Ed.2d 318 (1987). Complete preemption operates when the preemptive force of a statute is so extraordinary that it "converts an ordinary state common-law complaint into one stating a federal claim for purposes of the well-pleaded complaint rule." Metropolitan Life Ins. Co. v. Taylor, 481 U.S. 58, 65, 107 S.Ct. 1542, 95 L.Ed.2d 55 (1987). "Once an area of state law has been completely pre-empted, any claim purportedly based on that pre-empted state law is considered from its inception, a federal claim, and therefore arises under federal law." Caterpillar, 482 U.S. at 393, 107 S.Ct. 2425.
The Supreme Court has not extended complete preemption to the FLSA, and this Court is unaware of any lower court recognizing such preemption. Rather, courts have concluded the FLSA has no complete preemptive force, reasoning that the statute itself contains no indication of express preemption, and neither the Act itself nor its legislative history reveals a manifest congressional intent to preempt state law claims. See, e.g., Hurt v. Del Papa Dist. Co., L.P., 425 F.Supp.2d 853, 857 (S.D. Tex. 2004) (FLSA does not implicate complete preemption doctrine).
In sum, Plaintiffs' declaratory relief action seeks a determination under the FLSA as a defense to Cenergy's coercive claim for contractual indemnity, which does not supply federal-question jurisdiction. Moreover, the FLSA does not implicate the complete preemption doctrine and does not transform Cenergy's coercive indemnity claim into one under federal law. As pled, there is no federal-question jurisdiction under the well-pleaded complaint rule, and the Court lacks subject matter jurisdiction over this action. Nonetheless, Plaintiffs argue diversity jurisdiction exists, and they seek leave to amend their complaint to allege subject matter jurisdiction under 28 U.S.C. § 1332.
Plaintiffs seek a declaratory judgment regarding the enforceability of an indemnity provision of contracts between Cenergy and Plaintiffs' corporate entities, and a judgment that Cenergy may not force Plaintiffs and those similarly situated to arbitrate in Texas under the Construction Industry Rules. (Doc. 1, p. 9.) Cenergy moves to dismiss the suit arguing Plaintiffs lack standing to challenge the enforceability of the MSAs because they are neither parties nor third-party beneficiaries under these agreements.
To bring suit in a federal court, a plaintiff must establish standing under the "case or controversy" requirement of Article III to the U.S. Constitution. SEC v. Medical Committee for Human Rights, 404 U.S. 403, 407, 92 S.Ct. 577, 30 L.Ed.2d 560 (1972). Standing is an essential element of federal-court subject matter jurisdiction and involves both constitutional requirements derived from Article III and judicially created prudential limitations. South Lake Tahoe v. California Tahoe, 625 F.2d 231, 233 (9th Cir. 1980); United States v. Mindel, 80 F.3d 394, 396 (9th Cir. 1996). The "irreducible constitutional minimum of standing" contains three requirements: (1) an "injury in fact" — a harm suffered by the plaintiff that is concrete and particularized, actual and imminent, not hypothetical; (2) a causal connection between the injury and the conduct complained of such that the injury is traceable to the challenged action of the defendant; and (3) it must be likely that the injury will be redressed by a favorable decision. Lujan v. Defenders of Wildlife, 504 U.S. 555, 560-61, 112 S.Ct. 2130, 119 L.Ed.2d 351 (1992). Generally, a plaintiff who is neither a party nor a beneficiary to a contract lacks standing to enforce or challenge the enforceability of its terms. EEOC v. Goodyear Aerospace Corp., 813 F.2d 1539, 1543 n.2 (9th Cir. 1987).
Plaintiffs first argue their action for declaratory relief arises "under the FLSA, not under contract." As the Court understands Plaintiffs' argument, Plaintiffs contend Cenergy's indemnity claim abridges
Even if the FLSA applied to Plaintiffs' employment relationship with Chevron, however, Plaintiffs still have not established how they would be injured in their individual capacities. Cenergy seeks indemnity from Plaintiffs' corporate entities, not from Plaintiffs in their individual capacities. Cenergy's indemnity claim might be precluded if the FLSA attaches to Chevron's relationship with Plaintiffs, but it is the corporate entities who have standing to challenge Cenergy's indemnity claim, not Plaintiffs in their individual capacities. Although the complaint alleges Cenergy has threatened to pursue claims against "Plaintiffs" (see Doc. 1, ¶ 35), the complaint also states that Cenergy made a demand to "Plaintiffs" for reimbursement of Chevron's defense costs. Cenergy's demand letter, however, is attached to the complaint and unequivocally makes a demand on Plaintiffs' corporate entities, not Plaintiffs as individuals. The complaint does not clearly articulate a threat of litigation against Plaintiffs in their individual capacities, which would have given rise to standing.
Plaintiffs also contend they are third-party beneficiaries of the MSAs, establishing standing to challenge the enforceability of the MSAs. Plaintiffs note Cenergy required Plaintiffs to sign the MSAs in order to perform work for Chevron, the MSAs were not negotiable, Plaintiffs each personally signed the MSAs and were the workers who were ultimately paid under the contracts, and each MSA expressly stated it was "binding upon any... representatives of the parties hereto." Cenergy argues Plaintiffs cannot be deemed third-party beneficiaries to the MSAs because there is no language or expressed intent in the MSAs showing Plaintiffs were meant to benefit from the agreements.
A third party may qualify as a beneficiary under the contract where the contracting parties have intended to benefit that third party and such intent appears on the terms of the contract. Ascherman v. Gen. Reinsurance Corp., 183 Cal.App.3d 307, 311, 228 Cal.Rptr. 1 (1986). It is well settled, however, enforcement of a contract by persons who are only incidentally or
While Plaintiffs note they each signed an MSA, Plaintiffs' signatures on the MSAs were not made in their individual capacities — they each signed as the representative of their respective corporate entity. (See Doc. 1-1, p. 13; Doc. 1-2, p. 11.)
Plaintiffs also cite several California cases for the broad proposition that employee classes are third-party beneficiaries of contracts between their employers and other entities. See Amaral v. Cintas Crop. No. 2, 163 Cal.App.4th 1157, 1193, 78 Cal.Rptr.3d 572 (2008); Tippett v. Terich, 37 Cal.App.4th 1517, 1533, 44 Cal.Rptr.2d 862 (1995); Dep't of Industrial Relations, Div. of Labor Standards Enf't v. Fid. Roof Co., 60 Cal.App.4th 411, 426, 70 Cal.Rptr.2d 465 (1997). If Plaintiffs are considered employees of their respective corporate entities, Plaintiffs assert these cases indicate they are third-party beneficiaries of the MSAs between Cenergy and the corporate entities. Amaral, Tippet, and Fidelity Roof Co., however, are distinguishable and do not stand for the broad proposition Plaintiffs urge. As Cenergy notes, these cases involved public works contracts where a statutory prevailing wage provision, which required payment of higher wages, was inserted for the express benefit of the employees of the contractor. See Amaral, Tippet, Fidelity Roof Co., supra. The prevailing wage law was enacted to benefit employees, and the employees working on the public works projects were thus intended beneficiaries of the wage provision. Including the prevailing wage provision in the contract was express evidence of the parties' intent to benefit the contractor's employees, rendering them third-party beneficiaries of those contracts. Here,
Because the jurisdictional defects identified above appear curable and in the interest of efficiency, the Court addresses the Fed. R. Civ. P. 12(b)(6) attack upon Plaintiff's declaratory relief claim. Cenergy argues the FLSA does not apply to its contracts with Plaintiffs' corporate entities because Plaintiffs do not allege that Cenergy was their employer or that they were employees of Cenergy. According to Cenergy, the FLSA only applies to employers and employees, and any prohibition on seeking indemnity for FLSA liability does not pertain to Cenergy. Bonnette v. California Health & Welfare Agency, 704 F.2d 1465, 1468 (9th Cir. 1983) (finding that in order for the FLSA to apply, the defendant must be an "employer" within the meaning of the FLSA). As such, Cenergy argues Plaintiffs cannot obtain a declaration against Cenergy under the FLSA.
Cenergy's argument is unpersuasive as it interprets Plaintiffs' claim for declaratory relief too narrowly. First, although Plaintiffs lack a viable coercive claim against Cenergy under the FLSA (due to a lack of an alleged employer-employee relationship between Plaintiffs and Cenergy), this alone does not preclude Plaintiffs from seeking a declaration regarding the enforceability of Cenergy's indemnity claim in relation to Plaintiffs' rights under the FLSA. Often, a declaratory relief plaintiff brings an issue before the court that might otherwise need to await a coercive action brought by the declaratory relief defendant. Societe de Conditionnement en Aluminium v. Hunter Eng'g Co., 655 F.2d 938, 943 (9th Cir. 1981) ("[The Declaratory Judgment Act] brings to the present a litigable controversy, which otherwise might only by [sic] tried in the future.").
Second, Plaintiffs' theory of the invalidity of Cenergy's indemnity claim under the FLSA is, at this stage, theoretically viable.
Pursuant to this case law, Plaintiffs contend that if Chevron is deemed Plaintiffs' employer under the FLSA — as Plaintiffs allege — then Chevron's claim for indemnity
The courts in Jones and Spellman were evaluating the viability of a purported employer's indemnity claim at the pleading stage. The courts reasoned the indemnity claim was only invalid if the FLSA applied to the employment relationship, and the complaints for indemnity had adequately alleged the FLSA did not apply because the workers were independent contractors. Because it was not yet determined whether the FLSA applied, the indemnity claims were allowed to proceed. These cases do not, however, stand for the proposition that an employer is prohibited from seeking indemnity only from an employee. The Second Circuit concluded in Herman there is no right to indemnity under the FLSA, regardless of the status of the one from whom indemnity is sought. 172 F.3d at 143. In Jones and Spellman it was the applicability of the FLSA on which the viability of the indemnity claims was predicated, not the status of the person from whom the purported employer sought indemnity. Considering Jones, Spellman, and Herman together, if the FLSA applies there is a colorable argument here that Chevron may not shift any liability or costs arising from Plaintiffs' FLSA lawsuit to any other entity or person, either by virtue of the FLSA itself or by separate contractual agreement. Gustafson, 171 F.Supp.2d at 328 ("Allowing indemnification [against a purported joint-employer] would permit employers to contract away their obligations under the FLSA, a result that flouts the purpose of the statute.").
If Chevron is deemed to be Plaintiffs' employer, Plaintiffs contend Chevron's claim for indemnity is invalid under the FLSA, and Cenergy's claim for indemnity, stemming from Chevron's allegedly impermissible indemnity demand, is extinguished and/or is itself invalid as flouting the purpose of the FLSA. See Barrentine v. Arkansas-Best Freight Sys., Inc., 450 U.S. 728, 740, 101 S.Ct. 1437, 67 L.Ed.2d 641 (1981) ("FLSA rights cannot be abridged by contract or otherwise waived because this would `nullify the purposes' of the statute and thwart the legislative policies it was designed to effectuate").
Although Plaintiffs appear to state a theoretically viable theory for declaratory relief, the Court has concerns about several procedural aspects of this case that must be addressed in connection with any amended complaint. First, the Court makes no determination as to the propriety of Plaintiffs seeking declaratory relief under the DJA as a collective action under 29 U.S.C. § 216(b) — i.e., whether the FLSA is the appropriate procedural vehicle to pursue a representative action. As Plaintiffs' alleged employer (Chevron) is not a party to this case and Cenergy is not alleged to be Plaintiffs' employer, whether an FLSA collective action can proceed against Cenergy alone is questionable. Second, it is not clear to the Court whether Chevron must be joined to this litigation as a necessary party pursuant to Federal Rule of Civil Procedure 19. The practical effect of the declaration Plaintiffs seek is to invalidate any indemnity Chevron seeks against Cenergy stemming from the FLSA collective action pending in the Northern District of California. Finally, the Court is forced to consider whether this case should be related to the collective action pending in the Northern District, such that similar issues may be decided by the same judge.
For the reasons discussed above, there is no federal-question jurisdiction over Plaintiffs' complaint and Plaintiffs lack standing to challenge the enforceability of the MSAs between Cenergy and Plaintiffs' corporate entities. Therefore, Cenergy's motion to dismiss under Rule 12(b)(1) is GRANTED. Because these deficiencies appear curable, however, Plaintiffs may file an amended complaint within 14 days from the date of this order. Any amended complaint must address the procedural issues outlined above. Plaintiffs' motion for a preliminary injunction is held in abeyance pending amendment of the complaint. See, e.g., Shell Offshore Inc. v. Greenpeace, Inc., 864 F.Supp.2d 839, 842 (D. Alaska 2012) (district court may not grant preliminary injunction if it lacks subject matter jurisdiction over the claim before it).
For the reasons set forth above, IT IS HEREBY ORDERED that:
IT IS SO ORDERED.
