United States District Court, W.D. Oklahoma
ROGER SHULTZ, Individually and on behalf of all others similarly situated, Plaintiff,
NOMAC DRILLING, L.L.C., and SEVENTY SEVEN ENERGY, INC., Defendants and Third-Party Plaintiffs.
ARMS WELDING, INC., Third-Party Defendant.
L. RUSSELL UNITED STATES DISTRICT JUDGE.
the Court is Plaintiff's Motion to Dismiss
Defendants' third-party claims. Doc. 29. Finding that the
Court has supplemental jurisdiction over the claim, the Court
DENIES Plaintiff's Motion.
a collective action under the Fair Labor Standards Act (FLSA)
to recover overtime wages. Plaintiff Roger Shultz and
putative class members, rig welders for
Defendants during the last three years, were
allegedly not paid overtime wages for hours worked each week
in excess of forty, in violation of the FLSA. Under the FLSA,
employers must compensate their employees “for a
workweek longer than forty hours . . . at a rate not less
than one and one-half times the regular rate at which [the
employee] is employed.” 29 U.S.C. § 207(a)(1).
allege that they have a contractual agreement with A.R.M.S.
Welding, Inc. (“ARMS”), in which ARMS agrees to
indemnify Defendants against the FLSA-wage claims
here. That contract, the Master Services
Agreement (“MSA”), calls for ARMS to provide
welding services, including the requisite labor, to Nomac.
The MSA also deems ARMS an independent contractor and
provides that ARMS will indemnify Nomac for any “claims
. . . arising out of or in connection with any asserted or
established violation of any such laws, orders, rules, or
regulations by [ARMS] or its subcontractors and their
respective employees.” Doc. 22, Ex. 1, at 4. These laws
would ostensibly include the FLSA. Defendants' theory is
that ARMS has contractually indemnified them against any FLSA
liability. To that end, Defendants' Complaint asserts
claims against ARMS for breach of contract and
claims are now subject to a motion to dismiss on the basis
that the Court either lacks jurisdiction over these state-law
claims or that they are not appropriate for policy reasons.
Yet it is not ARMS who has moved to dismiss these claims
against it. Rather, it is Plaintiff who has moved to dismiss
Defendants' third-party complaint.
Federal Rule of Civil Procedure 8(a)(2), a pleading must
contain a ‘short and plain statement of the claim
showing that the pleader is entitled to relief.'”
Ashcroft v. Iqbal, 556 U.S. 662, 677-78 (2009).
“The pleading standard Rule 8 announces does not
require ‘detailed factual allegations, ' but it
demands more than an unadorned,
Id. at 678 (quoting Bell Atlantic Corp. v.
Twombly, 550 U.S. 544, 555 (2007)). To survive a motion
to dismiss, a pleading must offer more than “labels and
conclusions” and “a formulaic recitation of the
elements of a cause of action.” Twombly, 550
U.S. at 555. There must be “sufficient factual matter,
[which if] accepted as true . . . state[s] a claim to relief
that is plausible on its face.” Iqbal, 556
U.S. at 678 (quoting Twombly, 550 U.S. at 570). A
plausible claim is one that “pleads factual content
that allows the court to draw the reasonable inference that
the defendant is liable for the misconduct alleged.”
Id. A plaintiff must “nudge his claims
across the line from conceivable to plausible . . . .”
Twombly, 550 U.S. at 570. Further, the Court
“must accept all the well-pleaded allegations of the
complaint . . . and must construe them in the light most
favorable to the [non-moving party].” Thomas v.
Kaven, 765 F.3d 1183, 1190 (10th Cir. 2014).
the Court would first ask whether it has jurisdiction or
whether Defendants' claims are plausible. But here, the
first inquiry is whether Plaintiff can move to
dismiss these claims at all. After all, Defendants'
claims are against ARMS-not Plaintiff. Put simply, can
parties move to dismiss claims under Rule 12(b)(6) that are
not asserted against them personally? In a word, no.
“It is generally accepted that parties lack standing to
seek dismissal of parties other than themselves.”
E.E.O.C. v. Brooks Run Min. Co., LLC, No. CIV.A.
5:08-CV-00071, 2008 WL 2543545, at *2 (S.D. W.Va. June 23,
2008). And based on the Court's survey, other courts have
been unanimous on the matter.
said, even if Plaintiff lacks standing to dismiss
Defendants' third-party claims for breach of contract and
indemnification, the Court must still have subject matter
jurisdiction over those claims to proceed. Plaintiff insists
it does not and, in support, cites a line of
cases that he believes suggests either that the
Court lacks jurisdiction or that Defendants' claims
thwart the very policy rationale behind the FLSA.
exactly. These cases do not hold that the purpose of the FLSA
is undermined by allowing a defendant to argue that a third
party has indemnified it against FLSA claims. Rather, as one
district court summed up these cases, “[s]everal
courts, including the Tenth Circuit, have indicated that
counterclaims, particularly when they are akin to
setoffs, are not allowed in a FLSA action.”
McFeeters v. Brand Plumbing, Inc., No.
16-1122-EFM-KGS, 2016 WL 6581515, at *2 (D. Kan. Nov. 7,
2016) (emphasis added). This hardly seems controversial.
Allowing claims for setoff or other non-FLSA-related claims
distracts from the central mission of an FLSA suit, which is
to bring “the defendant employer into compliance with
the FLSA by enforcing a public right.” Id.
(alterations omitted) (citing Donovan, 717 F.2d at
1323). Consequently, permitting “private claims, real
or imagined, against  employees would delay and even
subvert the whole process.” Id.
Defendants' claims do little to subvert the FLSA process
and, in fact, bear directly on the merits of Plaintiff's
overtime-wage claim. If Plaintiff is to recover overtime
wages under the FLSA, that hinges on his ability to first
identify his employer. That, though, is a matter of dispute.
Defendants insist that by the terms of the MSA it entered
into with ARMS, ARMS is Plaintiff's employer and has a
duty to indemnify Defendants for FLSA violations. Naturally
this dispute must be resolved before Plaintiff can recover
that Defendants' claims for breach of contract and
indemnification intertwine with the merits of Plaintiff's
FLSA claim, exercising supplemental jurisdiction over them is
appropriate. The Court may exercise supplemental
jurisdiction over any claims that are “so
related” to the jurisdiction-invoking claim “that
they form part of the same case or controversy under Article
III.” 28 U.S.C. § 1367(a). “A claim is part
of the same case or controversy if it derives from a common
nucleus of operative fact.” Price v. Wolford,
608 F.3d 698, 702-03 (10th Cir. 2010) (alterations omitted).
Here, Defendants' claims for breach of contract and
indemnification stem from a common set of facts: Plaintiff
believes he is owed overtime wages under the FLSA, and the
MSA purports to transfer any FLSA liability from Nomac to
the Court could of course decline to exercise supplemental
jurisdiction under 28 U.S.C. § 1367(c), but it sees
little sense in that. Claims for breach of contract and
indemnification hardly raise novel or complex issues of
Oklahoma law, which would allow the court to decline
jurisdiction under § 1367(c)(1). Nor do these claims
predominate over the FLSA claim, which would permit it to
forego exercising jurisdiction under § 1367(c)(2).
Further, there is no reason to decline jurisdiction under
§ 1367(c)(3) because the Court still has original
jurisdiction over the FLSA claim. Finally, the Court can
identify no other compelling reason that would justify the
Court declining jurisdiction under § 1367(c)(4).
Motion to Dismiss, Doc. ...