Shaw v. Hornblower Cruises & Events, LLC

Background

Clyve Shaw and Kenardro Press brought a proposed class action against Hornblower Cruises & Events, LLC. They alleged violations of the federal Worker Adjustment and Retraining Notification Act (WARN Act), the New York WARN Act, and the Illinois WARN Act. According to the complaint, Hornblower failed to provide required advance notice before closing a worksite or carrying out mass layoffs.

For the federal WARN Act claims, the complaint identified four California worksites: Newport Beach, Marina del Rey, San Francisco, and San Diego. It alleged that 97, 69, 139, and 65 employees, respectively, were laid off at those locations, and alleged on information and belief that at least 33 percent of the full-time employees at each location were terminated. The complaint also alleged that the exact number of terminated employees was in Hornblower’s records and that the affected employees did not receive the required written notice.

Hornblower moved to partially dismiss the Third Amended Complaint under Federal Rule of Civil Procedure 12(b)(6), for failure to state a claim, and Rule 12(b)(2), for lack of personal jurisdiction. The court treated the parties’ pre-motion letters as the fully briefed motion because the parties agreed to that procedure.

Failure to State a Claim

The court explained that a federal WARN Act claim requires allegations that the plaintiff worked for a covered employer, the employer failed to provide at least 60 calendar days’ advance notice, a plant closing or mass layoff occurred, and the event caused an employment loss.

The WARN Act defines a qualifying mass layoff at a single worksite as one involving either at least 33 percent of the qualifying employees and at least 50 employees, or at least 500 employees. Hornblower argued that the plaintiffs had not plausibly alleged the 33-percent requirement at the California worksites.

The court rejected that argument at the pleading stage. It held that the plaintiffs could rely on information and belief because the total number of employees at particular worksites during the relevant period was likely within Hornblower’s possession and control. The plaintiffs had also relied on government filings to allege the number of layoffs, which exceeded the separate requirement of at least 50 employees. Accepting the complaint’s factual allegations as true and drawing reasonable inferences for the plaintiffs, the court found that the federal WARN Act claims concerning the California worksites were plausibly pleaded.

The court added that discovery could show that the WARN Act was not triggered at those worksites, in which case the proposed class and its members could be refined during class certification. It therefore denied Hornblower’s motion to dismiss for failure to state a claim.

Personal Jurisdiction

Hornblower also argued that the court lacked personal jurisdiction over claims involving potential class members employed at the California worksites, relying on the Supreme Court’s decision in Bristol-Myers Squibb Co. v. Superior Court of California. Hornblower later acknowledged that this defense was premature but reserved the right to raise it at class certification.

The court held that Hornblower had not waived the defense. Under Rules 12(g)(2) and 12(h)(1), a defendant generally waives a personal-jurisdiction defense by omitting it from an earlier motion when the defense was available. But the court concluded that the defense was not available when Hornblower filed its first motion because the plaintiffs had not yet sought class certification and the California-based potential class members were not yet before the court.

The court further held that raising the defense at this stage remained premature. The only named plaintiffs before the court were Shaw and Press, and Hornblower did not challenge jurisdiction over their claims. The court stated that the proper time to address the defense would be when the potential class members were before the court at the class-certification stage. It therefore denied Hornblower’s motion to dismiss the California-related claims for lack of personal jurisdiction.

Disposition

The court denied Hornblower’s motion to partially dismiss the Third Amended Complaint in its entirety. It directed Hornblower to file an answer within 21 days, adjourned the scheduled case-management conference, and ordered the parties to submit a joint letter about mediation and discovery within seven days. The order did not decide whether the California claims ultimately satisfy the WARN Act or whether the personal-jurisdiction defense will succeed at class certification.