Opinion
Case No.: 20-cv-00675-AJB-JLB
2021-03-30
Brian COMPTON, an individual, Plaintiff, v. OASIS SYSTEMS, LLC, an unknown business entity; and Does 1 through 25, Defendants.
Daphne A. M. Delvaux, Joshua D. Gruenberg, Law Office of Joshua D. Gruenberg, San Diego, CA, for Plaintiff. U.S. Attorney CV, U.S. Attorneys Office, Civil Division, San Diego, CA, for Defendants Department of the Navy, Thomas W. Harker.
Daphne A. M. Delvaux, Joshua D. Gruenberg, Law Office of Joshua D. Gruenberg, San Diego, CA, for Plaintiff.
U.S. Attorney CV, U.S. Attorneys Office, Civil Division, San Diego, CA, for Defendants Department of the Navy, Thomas W. Harker.
ORDER:
(1) DENYING PLAINTIFF'S MOTION TO COMPEL ARBITRATION and
(2) GRANTING DEFENDANT'S MOTION TO DISMISS
Anthony J. Battaglia, United States District Judge
Before the Court are two motions—a motion to compel arbitration filed by Brian Compton ("Plaintiff"), and a motion to dismiss filed by Oasis Systems, LLC ("Defendant" or "Oasis"). For the reasons set forth, the Court DENIES Plaintiff's motion to compel arbitration (Doc. No. 7) and GRANTS Defendant's motion to dismiss (Doc. No. 3).
I. BACKGROUND
The following facts are taken from Plaintiff's Complaint and are construed as true for the limited purpose of resolving the instant motion. See Brown v. Elec. Arts, Inc. , 724 F.3d. 1235, 1247 (9th Cir. 2013).
Plaintiff brings this civil action against Oasis, alleging retaliation, discrimination, wrongful termination, failure to provide accurate itemized wage statements, failure to provide rest and meal periods, failure to pay overtime, negligent supervision, and intentional infliction of emotional distress under California law. According to the Complaint, Oasis is a Navy contractor. Plaintiff worked for Oasis as a deckhand aboard a vessel called the Acoustic Explorer ("Acoustic"). Plaintiff's claims stem from his employment with Oasis.
Plaintiff alleges that on November 12, 2019, his supervisor, Dominic Oriol ("Oriol") created a serious safety risk when he lost control of the Acoustic. Oriol had a duty to report the incident but failed to do so. Then, on November 19, 2019, Oriol again unsafely supervised the vessel and created a hole in the vessel's bottom. Plaintiff sustained injuries while repairing the hole. Oriol reported this incident but omitted details of his own careless operations, as well as the injuries Plaintiff incurred. On November 20, 2019, Plaintiff called his Navy representative, who then instructed him to submit a report to John Schwanz ("Mr. Schwanz"), Oasis’ Vice President. On November 25, 2019, Plaintiff reported Oriol's unsafe vessel operations to Mr. Schwanz. On December 5, 2019, Oasis terminated Plaintiff.
According to Plaintiff, Oasis wrongfully terminated him for reporting an unsafe work environment, as well as reporting the physical injuries he sustained while on duty. As a result of the termination, Plaintiff claims that he has suffered extreme emotional distress. In addition to the wrongful termination claims, Plaintiff asserts that throughout his entire employment, Oasis did not properly compensate him or provide him meal and rest breaks. Plaintiff also alleges that, at all relevant times, Plaintiff stayed on the premises of the Acoustic or its immediate surroundings.
II. MOTION TO COMPEL ARBITRATION
To begin, the Court first considers Plaintiff's motion to compel arbitration. (Doc. No. 7.) For context, Plaintiff filed this action in state court, and Oasis thereafter removed the case to federal court. While preparing his opposition to Defendant's motion to dismiss, Plaintiff alleges that he discovered a binding arbitration agreement between him and Oasis. Plaintiff now seeks to compel arbitration pursuant to this recently discovered document.
A. Legal Standard
On a motion to compel arbitration of a dispute, the "threshold inquiry is whether the parties agreed to arbitrate." Van Ness Townhouses v. Mar Indus. Corp. , 862 F.2d 754, 756 (9th Cir. 1988). The party seeking to compel arbitration "has the burden of proving the existence of an agreement to arbitrate by a preponderance of the evidence." Knutson v. Sirius XM Radio Inc. , 771 F.3d 559, 565 (9th Cir. 2014). To determine whether a valid agreement to arbitrate exists, we "apply ordinary state-law principles that govern the formation of contracts." Norcia v. Samsung Telecomms. Am., LLC , 845 F.3d 1279, 1283 (9th Cir. 2017) (citation and internal quotation marks omitted). B. Discussion
In support of his claim that a valid arbitration agreement exists, Plaintiff points to an unsigned, seven-page document that he received in 2013 from his former employer MarRange, Oasis’ predecessor. (Doc. No. 12 at 2–8.) Plaintiff claims that "the MarRange terms, including the arbitration agreement, became part of the bargain when Oasis acquired the Acoustic Explorer and its crew." (Doc. No. 7-1 at 16.) However, although the document states that the agreement can be assigned, there is no evidence that it was, in fact, assigned to Oasis.
Both parties submitted separate objections to the certain evidence submitted by the other. The undersigned's Civil Case Procedure Section II.A provides: " Objections relating to the motion should be set forth in the parties’ opposition or reply. No separate statement of objections will be allowed. " (emphasis in original). Consequently, the Court will not consider the parties’ improperly filed objections.
The pinpoint page citations refer to the ECF-generated page numbers at the top of each filing.
To the extent that Plaintiff argues that an assignment is implied by Oasis’ conduct, the Court disagrees. Oasis’ Vice President of Human Resources, Laura A. Evans, submitted a declaration attesting that in March 2019, Oasis revised its Employee Handbook ("Handbook") and thereafter sent an electronic copy of it to all Oasis employees for their review and acknowledgement. (Doc. No. 13-2 at 2.) Ms. Evans explained that "the policies and procedures contained in the Handbook superseded any and all prior practices, oral or written representations, or statement regarding the terms and conditions of employment with Oasis." (Id. ) In addition, Ms. Evans detailed that on August 8, 2019, Plaintiff certified receipt of the Handbook and acknowledged that he was responsible for complying with the policies and procedures therein. (Id. at 2–3.) Lastly, Ms. Evans attested that the Handbook does not contain an arbitration agreement, and Oasis did not enter into an agreement with Plaintiff to arbitrate claims related to his employment. (Id. at 3–4.)
Plaintiff concedes receipt of the Handbook, but argues that because the Handbook is silent as to dispute resolution, the MarRange document governs. However, the fact that the Handbook is silent on arbitration does not mean that any prior agreement to arbitrate endures—especially where the Handbook supplanted all prior practice or written representations relating to Plaintiff's employment. These circumstances do not support a finding that Oasis assumed an obligation to arbitrate employment disputes. Consequently, because the Handbook does not provide for arbitration of employment disputes, and because the Handbook supersedes any prior representation regarding the terms of his employment, the Court finds that Plaintiff has not met his burden that a valid arbitration agreement between him and Oasis exists. See Knutson , 771 F.3d at 565 (9th Cir. 2014) ("A party cannot be required to submit to arbitration any dispute which he has not agreed so to submit."). Accordingly, the Court DENIES Plaintiff's motion to compel arbitration. (Doc. No. 7.) III. MOTION TO DISMISS
Because the Court finds that Plaintiff has not carried his burden of proving a valid arbitration agreement, the Court need not consider Defendant's additional arguments that the instant employment dispute is outside the scope of the agreement, and that the Federal Arbitration Act exempts coverage of contract of employment of seamen.
The Court also declines to consider Plaintiff's equitable estoppel arguments as they were raised for the first time in his reply brief for this motion. See Zamani v. Carnes , 491 F.3d 990, 997 (9th Cir. 2007) ("The district court need not consider arguments raised for the first time in a reply brief."); Graves v. Arpaio , 623 F.3d 1043, 1048 (9th Cir. 2010) ("[A]rguments raised for the first time in a reply brief are waived.").
The Court next considers Defendant's motion to dismiss pursuant to Federal Rule of Procedure 12(b)(6). (Doc. No. 3.) Defendant raises two main arguments to challenge Plaintiff's claims: (1) that they are barred under the Suits in Admiralty Act ("SIAA") and the Public Vessels Act ("PVA"), and (2) that they are barred under the federal enclave doctrine. Each is discussed in turn.
A. Legal Standard
A Rule 12(b)(6) motion to dismiss tests the legal sufficiency of a complaint, i.e. whether the complaint lacks either a cognizable legal theory or facts sufficient to support such a theory. Navarro v. Block , 250 F.3d 729, 732 (9th Cir. 2001) (citations omitted). For a complaint to survive a Rule 12(b)(6) motion to dismiss, it must contain "sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’ " Ashcroft v. Iqbal , 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (quoting Bell Atlantic Corp. v. Twombly , 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) ). In reviewing the motion, the court "must accept as true all of the allegations contained in a complaint," but it need not accept legal conclusions. Id. "Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice." Id. (citing Twombly , 550 U.S. at 555, 127 S.Ct. 1955 ).
B. Request for Judicial Notice
In support of its motion to dismiss, Defendant filed a request for judicial notice. (Doc. No. 3-2.) Under Federal Rule of Evidence 201, a court may take judicial notice of a fact that is "not subject to reasonable dispute because it: (1) is generally known within the trial court's territorial jurisdiction; or (2) can be accurately and readily determined from sources whose accuracy cannot reasonably be questioned." Fed. R. Evid. 201(b). Defendant requests the Court to take judicial notice of twelve exhibits containing information derived entirely from official government agency websites and matters of public record. (Doc. No. 3-2 at 6.) Plaintiff does not oppose Defendant's request. As information on government websites and matters of public record are judicially noticeable, the Court GRANTS Defendant's request for judicial notice. See, e.g., Daniels-Hall v. Nat'l Educ. Ass'n , 629 F.3d 992, 998-999 (9th Cir. 2010) ("It is appropriate to take judicial notice of this information, as it was made publicly available by government entities."); Lee v. City of Los Angeles , 250 F.3d 668, 689 (9th Cir. 2001) ("[A] court may take judicial notice of ‘matters of public record.’ ") (citation omitted).
C. Discussion
1. The SIAA and the PVA
Defendant asserts that because Plaintiff's claims fall under the Suits in Admiralty Act ("SIAA"), 46 U.S.C. § 30901, et seq. , and the Public Vessels Act ("PVA"), 46 U.S.C. § 31101, et seq. , they must be brought exclusively against the United States. In response, Plaintiff argues that the text of the aforementioned statutes evince that he is not required to plead his case against the United States in federal court, and instead, permitted to pursue his claims against Oasis in state court. Defendant replies that Plaintiff ignores the plain language of the SIAA's exclusive remedy provision, which is incorporated into the PVA, as well as binding case law. The Court agrees. Under the SIAA, the United States has waived its sovereign immunity "[i]n a case in which, if a vessel were privately owned or operated, or if cargo were privately owned or possessed, or if a private person or property were involved, a civil action in admiralty could be maintained[.]" 46 U.S.C. § 30903(a). Put more plainly:
[I]f a vessel is owned by the United States, and someone is harmed by the vessel or one if its employees, and the harm is one for which, if the vessel were privately owned, the harmed individual could have sued its owner in admiralty, then the person can bring—indeed, must bring—that admiralty claim against the United States.
Ali v. Rogers , 780 F.3d 1229, 1233 (9th Cir. 2015). For the SIAA to apply, a vessel must be "owned by the United States or operated on its behalf," and there must be a "remedy cognizable in admiralty for the injury." Id. at 1233. The SIAA "does not itself provide a cause of action. It merely operates to waive the sovereign immunity of the United States in admiralty suits." Dearborn v. Mar Ship Operations, Inc. , 113 F.3d 995, 996 n.1 (9th Cir. 1997). Important here, if the SIAA applies, then its "exclusive remedy" provision operates to preclude "any other remedy ‘arising out of the same subject matter’ that the plaintiff might bring against the individual who actually caused the harm at issue." Ali , 780 F.3d at 1233 (quoting 46 U.S.C. § 30904.2). Otherwise stated, "where a remedy lies against the United States, a suit against an agent of the United States ‘by reason of the same subject matter’ is precluded." Dearborn , 113 F.3d at 997. The SIAA's "exclusivity provision is, in turn, incorporated by reference in the Public Vessels Act." Id.
The full text of the exclusive remedy provision provides, "If a remedy is provided by this chapter, it shall be exclusive of any other action arising out of the same subject matter against the officer, employee, or agent of the United States or the federally owned corporation whose act or omission gave rise to the claim." 46 U.S.C.A. § 30904.
Pursuant to the PVA, the United States has also waived its sovereign immunity in "civil actions in personam in admiralty against the United States for damages caused by a public vessel of the United States." Ali , 780 F.3d at 1234 (alterations omitted) (citing 46 U.S.C. § 31102(a)(1) ). The Ninth Circuit has interpreted the phrase "damages caused by a public vessel" broadly "to encompass all tort and contract claims ‘arising out of the possession or operation of the ship.’ " Tobar v. United States , 639 F.3d 1191, 1198 (9th Cir. 2011) (emphasis in original) (quoting Thomason v. United States , 184 F.2d 105, 107 (9th Cir. 1950) ). A civil action under the PVA is subject to the provisions of the SIAA, which as stated earlier, contains an exclusivity provision that "mandates that an action in admiralty be brought solely against the United States. The remedy for an aggrieved party is exclusive of any action against the agent or employee of the United States whose act or omission gave rise to the claims.’ " Dearborn , 113 F.3d at 997 (internal quotation marks and citation omitted). See 46 U.S.C. § 31103.
Here, Plaintiff's Complaint makes clear that at all times relevant to his claims, he was employed as a deckhand for the Acoustic by Oasis, which is a Navy contractor. In addition, the judicially noticed documents establish that the Acoustic is a government research vessel owned by the United States Navy, and that Oasis operates the Acoustic pursuant to a government contract. The parties do not dispute these points. Thus, the Court finds that the Acoustic is a "public vessel of the United States" within the meaning of the PVA, 46 U.S.C. § 31102(a)(1), and that Oasis is an "agent of the United States" within the meaning of the SIAA, 46 U.S.C.A. § 30904.
Having made the above findings, the Court turns to whether Plaintiff's claims "have the requisite maritime flavor to constitute a ‘civil action in personam in admiralty.’ " Ali , 780 F.3d at 1236. If so, they are subject to the PVA and SIAA, and the exclusivity provision applies to mandate a suit against the United States and preclude "any other remedy ‘arising out of the same subject matter’ that the plaintiff might bring against the individual who actually caused the harm at issue." Id. at 1233. See, e.g., Dearborn , 113 F.3d at 1000 ("Because we conclude that Bay Ship was operating the KANE as the agent for the government, Dearborn's action against Bay Ship is barred under [the SIAA].").
For a tort or harm to have the requisite maritime flavor, "it must have (1) taken place on navigable water (or a vessel on navigable water having caused an injury on land), (2) a potentially disruptive impact on maritime commerce, and (3) a substantial relationship to traditional maritime activity." Ali , 780 F.3d at 1235 (quotation omitted). Applying this test to Plaintiff's negligent supervision claim, the Court finds that Oriol's alleged hazardous operation of the Acoustic: (1) occurred while Plaintiff was aboard the Acoustic and on navigable waters; (2) could have potentially disrupted the vessel's activities because he lost control of the vessel during one incident and broke a part of the vessel on another; and (3) substantially relates to the traditional maritime activity of steering and operating a vessel. (Doc. No. 1-2 at 13.) Thus, the Court finds that Plaintiff's negligent supervision claim has the requisite maritime flavor.
As to Plaintiff's termination claim, the Court finds that it is sufficiently analogous to that found to have the requisite maritime flavor in Ali. See 780 F.3d at 1236 ("Ali's termination from the ship's crew could potentially have disrupted the ship's activities because it was then missing a crew member; furthermore, the activity in which he was engaged, crewing a ship, is one of the most basic ‘traditional maritime activities’ that exists."); see generally Guidry v. Durkin , 834 F.2d 1465, 1471 (9th Cir. 1987) ("We can envision no function more crucial to the safe operation of a vessel than decisions involving the manning of her engines."). Consequently, the Court finds that Plaintiff's claims for negligent supervision and wrongful termination each constitute a "civil action in personam in admiralty" are therefore subject to the PVA and SIAA. See Ali , 780 F.3d at 1236.
Accordingly, because the Acoustic is a public a vessel, and the aforementioned claims are based on conduct resulting from its operation, the PVA's waiver of sovereign immunity applies, and Plaintiff is thus able to sue the United States. See id. ; Tobar , 639 F.3d at 1198 (The phrase, "damages caused by a public vessel," under the PVA is construed broadly "to encompass all tort and contract claims ‘arising out of the possession or operation of the ship.’ ") (emphasis in original). And because the SIAA's exclusivity provision is incorporated into the PVA, it operates here to preclude "any claims arising from the same facts from being brought against any parties but the United States." Ali , 780 F.3d at 1236. "Consequently, [Plaintiff] not only could sue the United States, if he wanted any relief, he was required to do so." Id. (emphasis in original). As such, Plaintiff's causes of action for negligent supervision and wrongful termination against Oasis, as well as those "arising out of the same subject matter" (namely, his retaliation, discrimination, and intentional infliction of emotional distress claims), are barred under the SIAA. See id. Plaintiff was required to bring his admiralty claims against the United States, not against Oasis. Id. at 1237. Accordingly, the Court GRANTS Defendant's motion and DISMISSES these claims WITH LEAVE TO AMEND to include the proper defendant.
The Court does not and need not make findings on whether the retaliation, discrimination, and intentional infliction of emotional distress claims have the requisite maritime flavor because they are nonetheless precluded under 46 U.S.C. § 30904 for "arising out of the same subject matter" as the admiralty claims. See Ali , 780 F.3d at 1237.
In his opposition brief, Plaintiff included a request to remand his case to state court, but claims under the PVA and SAA fall within the original and exclusive admiralty jurisdiction of the federal district courts. Guidry v. Durkin , 834 F.2d 1465, 1474 (9th Cir. 1987) (holding that a suit under the PVA and SIAA "fall within the original and exclusive admiralty jurisdiction of the federal district courts"). Moreover, to the extent that Plaintiff challenges whether Defendant's removal to federal court was proper, the Court notes that it also has subject matter jurisdiction over this action based on diversity jurisdiction.
As to Plaintiff's claims for failure to provide accurate itemized wage statements, failure to provide rest and meal periods, and failure to pay overtime, the Court does not find, based on the face of the Complaint, that they have a maritime flavor. Moreover, because these claims do not arise from Oriol's negligent supervision of the Acoustic or Plaintiff's wrongful termination, they do not arise "out of the same subject matter" as the claims under the PVA and SIAA, and thus, are not precluded by the exclusivity provision.
2. Federal Enclave Doctrine
Although the California wage and rest break claims are not precluded by the PVA and SIAA, Defendant further asserts that case law establishes that they are barred under the federal enclave doctrine. Pursuant to the federal enclave doctrine, "the activities of federal installations are shielded by the Supremacy Clause from direct state regulation unless Congress provides ‘clear and unambiguous’ authorization for such regulation." Goodyear Atomic Corp. v. Miller , 486 U.S. 174, 180, 108 S.Ct. 1704, 100 L.Ed.2d 158 (1988). This shield extends to "a federally owned facility performing a federal function ... even though the federal function is carried out by a private contractor." Id. at 181, 108 S.Ct. 1704.
Defendant contends that as a public vessel owned by the United States Navy, the Acoustic is a federal installation shielded by the Supremacy Clause of the U.S. Constitution. The Court agrees. Plaintiff alleges in his Complaint that all of his activities occurred on or immediately around the Acoustic. And as the judicially noticed facts establish, the Acoustic is a federal facility (a Navy vessel), performing a federal function (research and Naval support). As such, the activities on the Acoustic are shielded from direct state regulation, unless Congress provides "clear and unambiguous" authorization for such regulation. See id.
There is no dispute over whether the state laws Plaintiff asserts were in effect at the time the land on which the federal property is located was ceded to the federal government. See Stiefel v. Bechtel Corp. , 497 F. Supp. 2d 1138, 1147 (S.D. Cal. 2007) ("Only state laws in effect at the time of cession or transfer of jurisdiction, however, can continue in operation.... Laws subsequently enacted by the state are inapplicable in the federal enclave unless they come within a reservation of jurisdiction or are adopted by Congress.") (citations omitted).
Plaintiff argues only that the Service Contract Act ("SCA") provides express congressional authorization of the application of local wage and hour laws within federal enclaves. The Court disagrees and finds the reasoning in Manning v. Gold Belt Falcon, LLC , 681 F. Supp. 2d 574, 577 (D.N.J. 2010) persuasive. Addressing the same argument Plaintiff raises here, the Manning court found that:
To be sure, Plaintiff also argues that equitable estoppel should apply to prevent Defendant from enforcing federal law upon him. However, the allegations in Plaintiff's Complaint that Oasis "is a Navy contractor," and that "Plaintiff called his Navy representative" to report Oriol's careless operations contradicts his arguments that he was not aware that Oasis was a federal government contractor and did not believe that he was subject to federal law. (Compare Doc. No. 1-2 at 3, 14, with Doc. No. 6-1 at 21.) Thus, assuming the truth of the factual allegations in the Complaint and the reasonable inferences drawn therefrom, the Court finds that Plaintiff's equitable estoppel arguments are without merit.
Nothing in the Service Contract Act evinces congressional intent to apply state minimum wage laws to federal enclaves, nor is the application of state law to federal property even mentioned. Furthermore, Congress clearly enacted the Service Contract Act for a specific purpose: to ensure workers employed by federal employers were paid no less than workers employed by private or state employers in the same area. There is no explicit intent to abrogate the Federal Enclave Doctrine, but rather a desire to ensure protection for service contracts.
Id. For the same reasons, the Court rejects Plaintiff's position. See also Mersnick v. USProtect Corp. , No. C-06-03993 RMW, 2006 WL 3734396, at *6 (N.D. Cal. Dec. 18, 2006) ("Plaintiff's argument that a contract between a private party and the federal government is sufficient to bar the application of the Federal Enclave Doctrine is unpersuasive.").
Consequently, because the federal enclave doctrine applies, and there being no indication that Congress provided clear and ambiguous authorization for California to regulate activities on the Acoustic, the Court finds that Plaintiff's state law claims for failure to provide accurate itemized wage statements, failure to provide rest and meal periods, and failure to pay overtime are barred. See, e.g., Jimenez v. Haxton Masonry, Inc. , No. 18-CV-07109-SVK, 2020 WL 3035797, at *6 (N.D. Cal. June 5, 2020) ("Because Plaintiff's [California labor] claims stem from work performed on federal enclaves, they are barred by the federal enclave doctrine."). Thus, the Court GRANTS Defendant's motion and these claims are DISMISSED WITHOUT LEAVE TO AMEND .
IV. CONCLUSION
Based on the foregoing, the Court DENIES Plaintiff's motion to compel arbitration, (Doc. No. 7), GRANTS Defendant's motion to dismiss, (Doc. No. 3), and accordingly, DISMISSES Oasis from this action. As amending the Complaint with respect to certain claims would not be futile, the Court GRANTS Plaintiff LEAVE TO AMEND his Complaint in accordance with this Order. Plaintiff must file an amended complaint no later than April 16, 2021. Failure to so file may result in dismissal of the case with prejudice.