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Hiskey v. Insurance Company of West

United States District Court, D. Montana, Great Falls Division

July 20, 2018

DAVID L. HISKEY, RANDY A. FALLANG, and OTHERS SIMILARLY SITUATED, Plaintiffs,
v.
INSURANCE COMPANY OF THE WEST, Defendant.

          ORDER

          Brian Morris United States District Court Judge.

         INTRODUCTION

         Plaintiffs David L. Hiskey and Randy A. Fallang, on behalf of themselves and a proposed class of others similarly situated, filed this action in Montana's Eighth Judicial District Court, Cascade County on October 27, 2017. (Doc. 4.) Defendant Insurance Company of the West ("ICW") removed this action to federal court on February 16, 2018, pursuant to 28 U.S.C. § 1441, based on diversity of citizenship jurisdiction under 28 U.S.C. § 1332. (Doc. 1 at 3.) Plaintiff filed a Motion to Remand on February 27, 2018. (Doc. 8.) Defendants filed a Motion to Dismiss on February 23, 2018. (Doc. 5.)

         The Court held a hearing on the motions on April 26, 2018. (Doc. 20.) The Court ordered the parties to notify the Court of any supplemental authority on the issue of whether the anti-aggregation rule applies where a class of plaintiffs proceeding on a state law class claim seek declaratory judgment regarding a defendant's joint and several liability. The parties filed supplements on May 4, 2018. (Docs. 21; 22.)

         FACTUAL BACKGROUND

         Plaintiffs are construction workers who worked for Wadsworth Builders Company, Inc. ("Wadsworth") and its various subsidies. (Doc. 4 at 1.) Wadsworth employed Plaintiffs on public works construction projects. Id. Some of the Wadsworth projects were subject to the prevailing wage provisions of the Little Davis Bacon Act of Montana, Mont. Code Ann. §§ 18-2-101, et seq.

         Wadsworth deducted $0.20 per hour from the Plaintiffs' wages on certain public works projects. (Doc. 17 at 2.) The Montana Department of Labor ("MDOL") issued two determinations finding that Wadsworth's deductions violated Montana law. Id. MDOL advised Wadsworth that Wadsworth could avoid further liability and penalties by refunding the deduction to all of its employees. Id. Wadsworth and MDOL entered into a settlement agreement with MDOL in which Wadsworth agreed to refund each employee the deduction. Id. Wadsworth provided the refund checks to MDOL, and MDOL, in turn, disbursed the checks to Wadsworth's employees. Id. at 3.

         Plaintiffs, on behalf of themselves and a putative class, filed suit against Wadsworth in the Montana Eighth Judicial District Court, Cascade County, on March 8, 2010. Id. Plaintiffs seek statutory damages and penalties under Montana law to which they claim they are entitled due to Wadsworth's deductions, and Wadsworth's alleged misclassification of employees resulting in underpayment.

         Defendant Insurance Company of the West ("ICW") provided performance and payment surety bonds for some of the Wadsworth construction projects at issue in the underlying case. (Doc. 17 at 2.) Plaintiffs seek declaratory judgment that these surety bonds render ICW jointly and severally liable for Plaintiffs' damages in the underlying state court claim. (Doc. 4 at 3-4.) Plaintiffs further seek to hold ICW responsible for breach of contract. Id. at 6.

         PROCEDURAL BACKGROUND

         ICW filed a Notice of Removal on February 16, 2018. (Doc. 1.) Plaintiffs filed a Motion to Remand on February 27, 2018, asserting that ICW had not met the amount in controversy required for this Court to exercise diversity jurisdiction under 28 U.S.C. § 1332. (Doc. 9 at 2.) Plaintiffs contend that the claims of the named Plaintiffs alone, without the members of the putative class, must meet the $75, 000 threshold prescribed by statute. Id. at 11.

         IC W has also filed a Motion to Dismiss for failure to state a claim upon which relief may be granted. (Doc. 5.) ICW argues that Plaintiffs' failure to identify specific projects and surety bonds render ICW unable to respond to the allegations contained in the complaint. (Doc. 6 at 8.) ICW further argues that Plaintiffs' failure to allege that they filed a notice with ICW within 90 days of the completion of each project subject to an ICW surety bond, as required by Montana law, represents a failure to assert all the elements of a viable claim for relief. Id. at 10. Finally, ICW claims that Plaintiffs lack standing. Id. at 11.

         LEGAL STANDARD

         A defendant may remove an action from state court if the action could have originally been brought in federal court. 28 U.S.C. § 1441, A court must remand any case removed from a state court "if at any time before final judgment it appears that the district court lacks subject matter jurisdiction." 28 U.S.C. § 1447(c), This Court must first determine subject matter jurisdiction. Federal courts are always "under an independent obligation to examine their own jurisdiction." Hernandez v. Campbell,204 ...


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