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Ward v. Carefusion Solutions, LLC

Superior Court of Delaware

March 13, 2018

STEVE WARD and FRANCIS TRESSA, individually and on behalf of all other similarly situated persons, Plaintiffs,
v.
CAREFUSION SOLUTIONS, LLC, Defendant.

          Submitted: February 8, 2018

          Daniel C. Herr, Esq. (Argued), Jack D. Mclnnes, Esq., Attorneys for Plaintiffs and the Putative Class

          Elizabeth S. Fenton, Esq., Danielle N. Petaja, Esq., Saul Ewing Arnstein & Lehr LLP, Matthew J. Hank, Esq. (Argued), Helga P. Spencer, Esq., Littler Mendelson P.C., Attorneys for Defendant CareFusion Solutions, LLC

          OPINION

          The Honarable Mary M. Johnston.

         FACTUAL AND PROCEDURAL CONTEXT

         This is a class action suit brought to recover allegedly unpaid wages and work expenses. Defendant CareFusion Solutions, LLC ("CareFusion") licenses, sells, and leases assorted medical devices. CareFusion hired Steve Ward, Francis Tressa, and the putative class (collectively, "Plaintiffs"), to service CareFusion's products pursuant to a Maintenance and Service Agreement. Plaintiffs allege that they should be classified as CareFusion's employees, not independent contractors. Plaintiffs further allege that, as employees, Sections 510, 1194, 1198, and 2802 of the California Labor Code entitle them to recover for CareFusion's failure to reimburse Plaintiffs for work-related expenses and CareFusion's failure to pay Plaintiffs overtime wages.

         In response, CareFusion has filed this Motion to Dismiss, arguing that the California laws on which Plaintiffs rely do not apply to work performed outside of California. Plaintiffs counter by arguing that California law controls, because the Maintenance and Service Agreements designate California as the choice of law. Should the Court find that California law does not apply, the Plaintiffs seek leave to amend their complaint to add facts establishing Plaintiffs' presence within California and to include violations of Delaware and Pennsylvania law.

         MOTION TO DISMISS STANDARD

         In a Rule 12(b)(6) motion to dismiss, the Court must determine whether the claimant "may recover under any reasonably conceivable set of circumstances susceptible of proof."[1] The Court must accept as true all well-pleaded allegations.[2]Every reasonable factual inference will be drawn in the non-moving party's favor.[3]

         If the claimant may recover under that standard of review, the Court must deny the motion to dismiss.[4]

         ANALYSIS

         Generally, a court may not rely on materials extrinsic to the pleadings when ruling on a Rule 12(b)(6) motion.[5] An exception to this rule exists when "an extrinsic document is integral to a plaintiffs claim and is incorporated into the complaint by reference."[6] Plaintiffs' Complaint states that Plaintiffs brings their claims under California law "[p]ursuant to the choice of law clause contained in their Maintenance and Service Agreements" with CareFusion.[7] The Court therefore may consider the Maintenance and Service Agreements when ruling on this motion.

         There are two Agreements, both signed by representatives of CareFusion. One is signed by Ward as owner of Computers RX Ltd., and the other is signed by Tressa as owner/operator of Raymond Electronic Services. Two clauses that appear in both Agreements are relevant to the resolution of this motion.

         Section 23 of both Agreements is titled "Compliance with Laws" and states: "The Parties shall comply with all laws and regulations applicable to their respective performance of this Agreement." Section 44 of both Agreements is titled "Governing Law" and states: "This Agreement shall be governed by and construed in accordance with the laws of the State of California, without regard to that state's conflicts of law principles."

         Plaintiffs do not allege that they performed any work in California. Plaintiffs instead rely entirely on the Agreements' choice-of-law provision for the inclusion of California causes of action in the Complaint. Whether the two clauses of the Agreements enable Plaintiffs to allege a valid claim under the California Labor Code requires an examination of the California courts' interpretation of the Code's extraterritorial application.

         California courts presume that the state's statutes do not apply to occurrences outside of California.[8] This presumption against extraterritoriality can be rebutted when the "language . . . purpose, subject matter or history" of the statute in question clearly expresses or allows for a reasonable inference that ...


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