Miller v. Infinite Percent Partners LLC

Background

Lisa Miller alleged that Infinite Percent Partners LLC, its Chief Operating Officer Michelle Van Otten, its Chief Executive Officer Steve Koskie, and Michel Shane asked her to join a startup cannabis operation as a consultant or employee. Miller alleged that Koskie offered her a $200,000 annual salary for full-time work, which she accepted. She began working sometime in June or July 2019 and reduced her medical practice in anticipation of the job. She alleged that Defendants did not pay her from August through December 2019 and that Koskie ended their relationship in January 2020.

Miller asserted seven causes of action: retaliation under the Fair Labor Standards Act (FLSA), a federal wage-and-hour statute; violation of California Labor Code section 1102.5; breach of contract; promissory estoppel; estoppel by conduct; nonpayment of wages; and failure to provide itemized wage statements. The defendants moved to dismiss. Miller moved for partial summary judgment and requested permission to amend her complaint. The opinion does not state a disposition of the partial-summary-judgment motion.

Motion to Dismiss

The FLSA claim was Miller’s only federal claim and her only alleged basis for federal subject-matter jurisdiction. The defendants argued that she had not alleged protected activity under the FLSA’s anti-retaliation provision. The court agreed that Miller had not alleged an FLSA violation supporting that claim. Although Miller argued that her internal complaints about nonpayment of wages involved FLSA recordkeeping requirements, the court found that her complaint did not allege either a substantive FLSA wage violation or a recordkeeping violation. The court characterized the claim as an attempt to assert FLSA retaliation without an underlying FLSA claim.

The court stated that it had found no authority supporting use of the FLSA anti-retaliation provision by itself to establish federal jurisdiction. It therefore found that the complaint failed to establish federal subject-matter jurisdiction and dismissed on that basis. The court did not address whether Miller’s state-law claims were viable, stating that those claims would not need to be addressed unless Miller properly invoked federal jurisdiction in an amended complaint.

Leave to Amend and Disposition

Miller requested permission to add allegations of complete diversity of citizenship under 28 U.S.C. § 1332 and to add facts supporting her FLSA claim. The court denied the request to amend the diversity allegations because the complaint alleged that Miller, Infinite Percent Partners LLC, Koskie, and Shane were connected to California in the ways stated in the complaint. The court held that Miller could not establish complete diversity by contradicting those allegations, and that a later change in citizenship could not cure a jurisdictional defect that existed when the case was filed.

The court granted leave to amend the FLSA claim because Miller might be able to allege facts supporting it. Its order granted the motion to dismiss the FLSA claim with leave to amend only that claim. Miller could not add new causes of action or defendants, and the amended complaint had to be filed within 21 days of the order. The request for leave to amend was therefore granted in part and denied in part. Judge Haywood S. Gilliam, Jr. signed the order.