Hager v. Omnicare, Inc.

UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF WEST VIRGINIA

AT BECKLEY

CATHY L. HAGER,

Plaintiff,

v. CIVIL ACTION NO. 5:19-cv-00484

OMNICARE, INC.,

Defendant.

MEMORANDUM OPINION AND ORDER

Pending are the Motion to Dismiss Plaintiff’s Complaint [Doc. 9] (“motion to

dismiss”), filed August 23, 2019, and Motion for a Protective Order and Stay Concerning October

31, 2019 Deadline and for an Expedited Briefing Schedule [Doc. 21] (“motion for stay”), filed by

Defendant Omnicare, Inc. (“Omnicare”) on October 28, 2019.

I.

Plaintiff Cathy L. Hager, on behalf of herself and others similarly situated,

instituted a collective action on June 28, 2019, against Omnicare alleging violations of the Fair

Labor Standards Act (the “FLSA”) [Doc. 1]. Omnicare is a for-profit entity that sells and

distributes medicine and medical devices. It “conducts business throughout the United States in

medical and nursing facilities, senior living facilities, and distribution centers in at least forty-

seven (47) states in the United States, including West Virginia.” [Doc. 1 at 2]. In order to deliver

the products, Omnicare subcontracts with regional delivery companies.

Ms. Hager alleges that she was a driver for one of those delivery companies and

that, “[f]rom approximately October 2018 to May 17, 2019, [she] delivered pharmaceutical

products on behalf of and at the direction of Defendant in West Virginia.” [Doc. 1 at 2]. According

to Ms. Hager, Omnicare directs and supervises the drivers through the intermediary delivery

companies. She alleges, for example, that Omnicare requires drug tests for the drivers, creates

mandatory schedules and routes for the drivers, and closely monitors the drivers. Ms. Hager

contends that this direction and supervision is done both directly by Omnicare but also indirectly

through the third-party delivery companies.

The complaint alleges that Omnicare has engaged in a practice of unlawfully

classifying delivery drivers as independent contractors instead of as employees. As a result, the

drivers pay the costs associated with deliveries – such as tolls, gas, maintenance, and insurance –

rather than Omnicare. Ms. Hager alleges that this practice effectively reduces driver pay below the

applicable federal minimum wage. This alleged practice is the basis of Ms. Hager’s FLSA claim.

On August 23, 2019, Omnicare moved to dismiss the complaint for lack of personal

jurisdiction and improper venue. As to personal jurisdiction, Omnicare asserts that the Court lacks

either general or specific jurisdiction over it. As to venue, Omnicare asserts that none of the

grounds for proper venue are present in this case. In support of its motion, Omnicare offers the

affidavit of Thomas S. Moffatt, the Vice President and Secretary of Omnicare [Doc. 9-1]. On

September 6, 2019, Ms. Hager responded in opposition. Ms. Hager attached substantial evidence

of Omnicare’s general presence in West Virginia over a considerable timeframe. On September

13, 2019, Omnicare replied [Doc. 18].

Subsequently, on October 28, 2019, Omnicare moved to stay [Doc. 21]. It sought a

protective order excusing it from compliance with the October 31, 2019, initial disclosures

deadline. Additionally, Omnicare requested that the Court stay the deadline until after adjudication

of the motion to dismiss. Ms. Hager has responded and Omnicare has replied. The matters are now

ready for adjudication.

II.

A. Personal Jurisdiction

Federal Rule of Civil Procedure 12 provides that “a party may assert the lack of

personal jurisdiction” by motion. Fed. R. Civ. P. 12(b)(2). During the early stages of a case,

“[w]hen a district court considers a question of personal jurisdiction based on the contents of a

complaint and supporting affidavits, the plaintiff has the burden of making a prima facie showing

in support of its assertion of jurisdiction.” Universal Leather, LLC v. Koro AR, S.A., 773 F.3d 553,

558 (4th Cir. 2014) (citations omitted). This analysis “resembles the plausibility inquiry governing

motions to dismiss for failure to state a claim under Rule 12(b)(6).” Hawkins v. i-TV Digitalis

Tavkozlesi zrt., 935 F.3d 211, 226 (4th Cir. 2019).

Like under Rule 12(b)(6), the Court “give[s] the plaintiffs’ allegations a favorable

presumption, taking the allegations in the light most favorable to the plaintiff.” Sneha Media &

Entm’t, LLC v. Associated Broad. Co., 911 F.3d 192, 196 (4th Cir. 2018). But, “[u]nlike under

Rule 12(b)(6), the court may also consider affidavits submitted by both parties, although it must

resolve all factual disputes and draw all reasonable inferences in favor of the party asserting

jurisdiction.” Hawkins, 935 F.3d at 226; see also Universal Leather, 773 F.3d at 560 (requiring

courts to “assume the credibility of [the plaintiff’s] version of the facts, and to construe any

conflicting facts in the parties’ affidavits and declarations in the light most favorable to [the

plaintiff].”). Ultimately, “if the court denies a Rule 12(b)(2) motion under the prima facie standard,

it can later revisit the jurisdictional issue when a fuller record is presented because the plaintiff

‘bears the burden of demonstrating personal jurisdiction at every stage following [the defendant’s

jurisdictional] challenge.’” Sneha Media, 911 F.3d at 196–97 (quoting Grayson v. Anderson, 816

F.3d 262, 267 (4th Cir. 2016)).

The Court may properly exercise jurisdiction over a foreign corporation only if: (1)

jurisdiction is authorized by West Virginia’s long-arm statute; and (2) application of the West

Virginia long-arm statute is consistent with the Due Process clause. See ESAB Grp., Inc. v. Zurich,

Ins. PLC, 685 F.3d 376, 391 (4th Cir. 2012). But, “[b]ecause the West Virginia long-arm statute

is coextensive with the full reach of due process, it is unnecessary in this case to go through the

normal two-step formula for determining the existence of personal jurisdiction.” In re Celotex

Corp., 124 F.3d 619, 627–628 (4th Cir. 1997).

“Under the Fourteenth Amendment’s Due Process clause, there are two paths

permitting a court to assert personal jurisdiction over a nonresident defendant.” Universal Leather,

773 F.3d at 559 (citations omitted). The first, general jurisdiction, allows a court to “hear any and

all claims against [foreign corporations] when their affiliations with the State are so ‘continuous

and systematic’ as to render them essentially at home in the forum State.” Daimler AG v. Bauman,

571 U.S. 117, 127 (2014) (quoting Goodyear Dunlop Tires Operations, S.A. v. Brown, 564 U.S.

915, 919 (2011)). “The paradigm forums in which a corporate defendant is at home . . . are the

corporation’s place of incorporation and its principal place of business.” BNSF Ry. Co. v. Tyrrell,

137 S. Ct. 1549, 1558 (2017) (internal quotation marks omitted).

The second, specific jurisdiction, “may be established if the defendant’s qualifying

contacts with the forum state also constitute the basis for the suit.” Universal Leather, 773 F.3d at

559. The specific jurisdiction analysis “focuses on the relationship among the defendant, the

forum, and the litigation.” Walden v. Fiore, 571 U.S. 277, 284 (2014) (internal quotation marks

omitted). To determine whether the exercise of specific jurisdiction is appropriate, our Court of

Appeals requires analysis of “(1) the extent to which the defendant purposefully availed itself of

the privilege of conducting activities in the State; (2) whether the plaintiffs’ claims arise out of

those activities directed at the State; and (3) whether the exercise of personal jurisdiction would

be constitutionally reasonable.” Perdue Foods LLC v. BRF S.A., 814 F.3d 185, 189 (4th Cir. 2016)

(internal quotation marks omitted). A nonresident corporation has purposefully availed itself of

the privilege of conducting activities in the forum state when its “conduct and connection with the

forum [s]tate are such that . . . [it] should reasonably anticipate being haled into court there.” Fed.

Ins. Co. v. Lake Shore Inc., 886 F.2d 654, 658 (4th Cir. 1989) (internal quotation marks omitted).

Our Court of Appeals has additionally provided the following non-exhaustive list

of factors for courts to consider when evaluating purposeful availment:

(1) whether the defendant maintained offices or agents in the State; (2) whether the

defendant maintained property in the State; (3) whether the defendant reached into

the State to solicit or initiate business; (4) whether the defendant deliberately

engaged in significant or long-term business activities in the State; (5) whether a

choice of law clause selects the law of the State; (6) whether the defendant made

in-person contact with a resident of the State regarding the business relationship;

(7) whether the relevant contracts required performance of duties in the State; and

(8) the nature, quality, and extent of the parties’ communications about the business

being transacted.

Sneha Media, 911 F.3d at 198–99. For example, the Fourth Circuit has found “that a foreign

defendant has purposefully availed itself of the privilege of conducting business in the forum state

when the defendant substantially collaborated with a forum resident and that joint enterprise

constituted an integral element of the dispute.” Universal Leather, 773 F.3d at 560 (internal

quotation marks omitted).

B. Venue

A plaintiff may bring an action in: (1) a judicial district in which any defendant

resides, if all defendants are residents of the same state; (2) a judicial district in which a substantial

part of the events or omissions giving rise to the claim occurred, or a substantial part of the property

that is the subject of the action is located; or (3) a judicial district in which any defendant is subject

to personal jurisdiction, if no other district is proper under this section. See 28 U.S.C. § 1391(b).

For venue purposes, an entity “shall be deemed to reside, if a defendant, in any judicial district in

which such defendant is subject to the court’s personal jurisdiction with respect to the civil action

in question.” Id. § 1391(c)(2).

III.

Ms. Hager offers a number of material allegations in her Complaint, including the

following:

From approximately October 2018 to May 17, 2019, Plaintiff Hager delivered

pharmaceutical products on behalf of and at the direction of Defendant in West

Virginia.

On information and belief, Defendant Omnicare conducts business throughout the

United States in medical and nursing facilities, senior living facilities, and

distribution centers in at least forty-seven (47) states in the United States, including

West Virginia.

[Doc. 1, ¶¶2, 4]. As noted, Omnicare challenges the existence of personal jurisdiction, asserting

the predicates for both general and specific jurisdiction are absent. In his affidavit, Mr. Moffatt

recites, in part, the following:

Omnicare had no employees in West Virginia during Ms. Hager’s employment,

from October 2018 and May 17, 2019.

Omnicare has no employees in West Virginia currently.

During Ms. Hager’s employment, Omnicare “did not control, supervise, monitor,

direct, set requirements for, or provide instructions” to Ms. Hager

During Ms. Hager’s employment, Omnicare “did not dictate the schedules of

routes, if any, driven by” Ms. Hager.

During Ms. Hager’s employment, Omnicare had no interaction with Ms. Hager.

During Ms. Hager’s employment, Omnicare did not enter into any contracts with

West Virginia courier companies.

During Ms. Hager’s employment, Omnicare “did not classify (or misclassify),

compensate, require background or drug tests for, or set the hiring or firing

standards for” Ms. Hager.

[Doc. 9-1]. Omnicare specifically argues that the lack of any contract between itself and a third-

party delivery company is fatal to Ms. Hager’s assertion of personal jurisdiction [Doc. 10]. Indeed,

Omnicare repeatedly asserts that “it did not enter into any contracts for the delivery of

pharmaceuticals with a courier company in West Virginia during the time frame in which Plaintiff

worked, and did not interact with Plaintiff at all.” [Doc. 10 at 8 (emphasis added)].

At this stage in the litigation, the Court need not resolve the factual skirmish

apparent from the operative pleading and the affidavit. As noted, the Court is required to treat the

allegations in the complaint as true and draw any conflicting facts – even where an affidavit has

been submitted – in the light most favorable to Ms. Hager. Scrutinizing the allegations through

this lens, the three requirements for the exercise of personal jurisdiction are met at this early stage

of litigation. Consequently, Ms. Hager has made out a prima facie case supporting the exercise of

personal jurisdiction.

First, Ms. Hager alleges that Omnicare conducted business in West Virginia, by

contract with third-party courier companies for the supply and delivery of pharmaceuticals to

facilities across the state. Through such conduct, Omnicare could “reasonably anticipate being

haled into court” in West Virginia. Lake Shore, 886 F.2d at 658. And where those third-party

companies employ residents of the Southern District of West Virginia to conduct business here,

Omnicare could “reasonably anticipate being haled into court” in this District. Id. At this stage in

the litigation, it is hardly a novel proposition to conclude that a company entering a contract with

continuing obligations within in a state could be haled into court in that state. See Burger King v.

Rudzewicz, 471 U.S. 462, 474 (1984) (finding personal jurisdiction in a state where party had no

other presence as the result of a franchising contract with continuing obligations); see also Sneha

Media, 911 F.3d at 198–99. Nor is it a novel proposition to conclude that a company might

purposefully avail itself of a forum without having a physical presence therein. See Walden, 571

U.S. at 285 (“[A]lthough physical presence in the forum is not a prerequisite to jurisdiction,

physical entry into the State – either by the defendant in person, or through an agent, goods, mail,

or some other means – is certainly a relevant contact.” (emphasis added) (citation omitted)). As

the Supreme Court has observed, “[I]t is an inescapable fact of modern commercial life that a

substantial amount of business is transacted solely by mail and wire communications across state

lines, thus obviating the need for physical presence within a State in which business is conducted.”

Burger King, 471 U.S. at 476.

Second, Ms. Hager alleges that Omnicare substantially collaborated with a forum

resident – the third-party courier company which directly employed Ms. Hager – and her claims

arise from that relationship. See Universal Leather, 773 F.3d at 560 (“a foreign defendant has

purposefully availed itself of the privilege of conducting business in the forum state when the

defendant ‘substantially collaborated with a forum resident and that joint enterprise constituted an

integral element of the dispute.’” (citation omitted)). And while Omnicare repeatedly asserts that

it did not contract in West Virginia during the relevant time period, this argument fails. Notably

absent from Omnicare’s contention – and from the Moffatt affidavit – is any assertion that

Omnicare has never “enter[ed] into [a] contract[] for the delivery of pharmaceuticals with a courier

company in West Virginia” that may have continued through Ms. Hager’s employment. Nor is

there any assertion that no contract existed during Ms. Hager’s employment. Indeed, it is hardly

dispositive to state that no new courier contracts were entered into during Ms. Hager’s employment

if Ms. Hager’s employment was subsequent to the entry into such a contract. And, while Omnicare

asserts it had no direct contact with Ms. Hager, it does not contest that she made deliveries on its

behalf and for its benefit within West Virginia.

Third, Omnicare has not demonstrated that it would be constitutionally

unreasonable to exercise personal jurisdiction at this stage; certainly, there is no showing that this

“litigation [is] so gravely difficult and inconvenient that” Omnicare would be unfairly placed at a

“severe disadvantage in comparison to [its] opponent[s].” ESAB Group, 685 F.3d at 392 (internal

quotation marks omitted). Omnicare offers no “compelling case that the presence of some other

considerations would render jurisdiction unreasonable.” Burger King, 471 U.S. at 477. Indeed,

Omnicare has recently litigated a similar case in this very District. See Young v. Act Fast Delivery

of W. Va., Inc., 5:16-cv-09788 (S.D.W. Va. filed Oct. 7, 2016).

At a later stage of litigation, it may become clear that the exercise of personal

jurisdiction is improper. The well-pled allegations at this point, however, clearly suffice under the

Due Process clause.

Finally, inasmuch as the Court has found it proper at this stage to exercise personal

jurisdiction over Omnicare, it similarly concludes that venue is appropriate. Omnicare is subject

to personal jurisdiction – and thus, for venue purposes, resides – in the Southern District of West

Virginia. See 28 U.S.C. § 1391(b)(1).

IV.

Accordingly, the Court DENIES Defendant’s Motion to Dismiss Plaintiff’s

Complaint [Doc. 9] without prejudice and, given that the relevant dates have passed, DENIES as

moot Defendant Omnicare, Inc.’s Motion for a Protective Order and Stay Concerning October 31,

2019 Deadline and for an Expedited Briefing Schedule [Doc. 21]. A Scheduling Order will enter

forthwith.

The Clerk is ordered to transmit copies of this Order to any unrepresented parties

and counsel of record herein.

ENTERED: November 19, 2019

fy . 4 oO

BOs ane LOL

Ss ae Frank W. Volk

<iTan □□ = United States District Judge

10