Landers v. Quality Communications ( 2014 )

 Landers' failure to exhaust his administrative remedies rendered his
claim nonjusticiable, meaning the court lacked subject matter jurisdiction
over his claims. Landers appeals.
Landers' complaint is barred by claim preclusion because he could have
raised his state law claims in the federal complaint, and the federal court's
dismissal was a valid final judgment
The parties primarily argue whether the district court
properly granted summary judgment based on Landers' failure to exhaust
his administrative remedies under NRS Chapter 608. However, we do not
need to reach this issue because Landers' underlying complaint is barred
by claim preclusion.'
Quality argues that Landers' claims are barred by claim
preclusion based on the federal district court judgment that dismissed his
federal complaint for failure to state a claim. We agree . 2
Claim preclusion applies when (1) the parties or their privies
are the same, (2) there is a valid final judgment, and (3) the subsequent
action involves the same claims that were or could have been brought in
'If we were to agree with the district court that Landers was
required to exhaust his administrative remedies with the Labor
Commission—at best a close question—we are concerned that the
appropriate judicial response would be dismissal without prejudice while
the parties pursue their administrative remedies, not summary judgment,
assuming Landers still had time to take advantage of any available
administrative remedies. In light of our conclusion on the claim
preclusion issue, we need not resolve this issue.
We have authority to consider the claim preclusion argument
2
Quality made to the district court and may affirm a district court order
when the district court "reached the correct result, albeit for different
reasons." Ford v. Showboat Operating Co., 110 Nev. . 752, 756, 877 P.2d
546, 549 (1994) (internal quotations omitted)).
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the prior action. Herb Reed Enters., LLC v. Florida Entm't Mgmt., Inc.,
736 F.3d 1239, 1245 (9th Cir. 2013); accord Five Star Capital Corp. v.
Ruby 124 Nev. 1048, 1054, 194 P.3d 709, 713 (2008). Landers argues that
the second and third elements are not met. 3
The federal district court dismissal was a valid final judgment
Landers argues that the federal district court judgment cannot
be given preclusive effect under Nevada law because the federal court's
ruling was based on the federal Twombly-Iqbal "plausibility" pleading
standard. See Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007);
Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). Landers notes that Nevada
has not adopted Twombly but instead uses the pleading standard set forth
in Washoe Medical Center, Inc. v. Reliance Insurance Company, 112 Nev.
494, 496, 915 P.2d 288, 289 (1996) ("The complaint cannot be dismissed
for failure to state a claim unless it appears beyond a doubt that the
plaintiff could prove no set of facts which, if accepted by the trier of fact,
would entitle him to relief.") (quoting Edgar v. Wagner, 101 Nev. 226, 228,
699 P.2d 110, 112 (1985)). Thus, Landers argues that his state law
complaint would not need to meet the Twombly standard used to dismiss
his federal complaint, and therefore, the federal dismissal cannot be given
preclusive effect. We disagree. 4
is clear that the parties are the same under both complaints.
3 1t
Thus, the first element of claim preclusion is met. See Herb Reed Enters.,
736 F.3d at 1245.
4 We acknowledge that Landers has appealed the federal district
court's dismissal, but the order of dismissal maintains its preclusive effect.
See Edwards v. Ghandour, 123 Nev. 105, 117, 159 P.3d 1086, 1094 (2007),
continued on next page . . .
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Under federal claim preclusion law, "unless the court in its
order for dismissal otherwise specifies, a dismissal . . . other than a
dismissal for lack of jurisdiction, for improper venue, or for failure to join a
party under [FRCP] 19, operates as an adjudication upon the merits." 5
Stew. v. U.S. Bancorp, 297 F.3d 953, 956 (9th Cir. 2002) (quoting FRCP
41(b)). Based on that rule, the Stewart court concluded that "a dismissal
for failure to state a claim under [FRCP] 12(b)(6) is a 'judgment on the
merits' to which [claim preclusion] applies." Id. at 957 (quoting Federated
Dep't Stores, Inc. v. Moitie, 452 U.S. 394, 399 n.3 (1981) ("The dismissal for
failure to state a claim under [FRCP] 12(b)(6) is a judgment on the
merits.") (internal quotations omitted). Thus, we conclude that the federal
district court's order dismissing Landers' original complaint for failure to
state a claim under FRCP 12(b)(6) was a valid final judgment on the
merits.
This underlying complaint was based on the same claims that could
have been brought in the prior federal district court action
The final factor for claim preclusion is whether the later action
is based on the same claims that were or could have been brought in the
previous action. Herb Reed Enters., 736 F.3d at 1245. Landers argues
that this action involves class action claims under state law that could not
. . . continued
disagreed with on other grounds in Five Star, 124 Nev. at 1053-54, 194
P.3d at 712-13.
5 5imilarly,under Nevada law, a dismissal can be an adjudication on
the merits that carries preclusive effect. Five Star, 124 Nev. at 1054 n.27,
194 P.3d at 713 n.27.
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have been asserted in its federal complaint, and therefore claim preclusion
does not apply. Landers contends that federal courts have declined to
exercise supplemental jurisdiction over pendent NRS Chapter 608 class
action claims and, as a result, the federal courts have severed and
remanded such NRS Chapter 608 class action claims to state court.
Landers argues that federal courts have done so based on the belief that
the opt-out process under FRCP 23 and the opt-in process under the FLSA
were incompatible. See 29 U.S.C. § 216(b) (2012). Thus, Landers asserts
that due to "this prior determination of the federal district court, Landers
was required to pursue separate stateS and federal actions if he wished to
secure all of the relief available to him under the FLSA and Nevada law."
Until recently, the issue of whether a plaintiff can
simultaneously maintain an opt-out class action claim based on state law
with an opt-in FLSA action had been largely unsettled within federal
courts. See Williams v. Trend west Resorts, Inc., 2007 WL 2429149, at *34
(D. Nev. Aug. 20, 2007) (acknowledging that courts have been split, but
ultimately finding the class action mechanisms of the FLSA and FRCP 23
are "incompatible"). But see Murillo v. Pac. Gas & Elec. Co., 266 F.R.D.
468, 471-73 (E.D. Cal. 2010) (summarizing cases on both sides of the issue,
and ruling that federal courts can consider both claims in the same case).
However, the United States Court of Appeals for the Ninth Circuit
recently ruled that FLSA collective actions and state law class actions "can
peacefully coexist." Busk v. Integrity Staffing Solutions, Inc., 713 F.3d
525, 528 (9th Cir. 2013) (noting that all federal circuit courts to consider
the issue have held that the different mechanisms for opting in or out "do
not require dismissal of the state claims"), cert. granted, 134 S. Ct. 1490
(2014).
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In light of Busk, we conclude that Landers could have asserted
his NRS Chapter 608 claims in the original federal complaint.
Accordingly, this element of claim preclusion is satisfied. See also 18
Charles Alan Wright, Arthur R. Miller & Edward H. Cooper, Federal
Practice and Procedure, § 4412, at 289 n.19 (2d ed. 2002) (summarizing
cases concluding that if a plaintiff who files a federal complaint is unsure
whether the federal court will exercise supplemental jurisdiction over
state law claims, the plaintiff should nonetheless invoke the federal court's
supplemental jurisdiction and assert the state law-based causes of action
to escape claim preclusion if the federal claims fail).
Therefore, all elements of claim preclusion are satisfied, and
the doctrine bars Landers' complaint. Accordingly, we
ORDER the judgment of the district court AFFIRMED.
J.
Pickering
Parpguirre
J.
Saitta
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cc: Hon. Rob Bare, District Judge
Janet Trost, Settlement Judge
Gabroy Law Offices
Leon Greenberg Professional Corporation
Lionel Sawyer & Collins/Las Vegas
Eighth District Court Clerk
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