United States District Court, D. North Dakota
Jeremy Eastep, individually and on behalf of himself and all others similarly situated, Plaintiff,
KRH, Inc., Defendant.
ORDER GRANTING PLAINTIFF'S MOTION TO DISMISS
L. Hovland, Chief Judge.
the Court is Plaintiff Jeremy Eastep's Rule 12(b)(6)
motion to dismiss the Defendant's amended counterclaim
filed on March 26, 2019. See Doc. No. 19. The
Defendant, KRH, Inc. (“KRH”), filed a response in
opposition to the motion on May 8, 2019. See Doc.
No. 29. The Plaintiff filed a reply on May 15, 2019.
See Doc. No. 30. For the reasons below, the motion
a corporation organized under the laws of Montana with its
principle place of business in Kalispell, Montana. KRH
provides oil and gas well monitoring services to energy
companies in North Dakota and elsewhere in the United States.
KRH employed Eastep and others as flowback operators.
Eastep's job duties included monitoring and maintaining
oil and gas wells. On January 2, 2019, Eastep filed a
complaint contending he and other similarly situated flowback
operators employed by KRH were misclassified as independent
contractors rather than employees and were not paid overtime
in violation of the Fair Labor Standards Act, 29 U.S.C.
§ 201 et seq. (“FLSA”).
See Doc. No. 1. On January 28, 2019, KRH filed its
answer and counterclaim. See Doc. No. 7. KRH filed
an amended counterclaim on April 19, 2019, after obtaining
leave of Court on April 15, 2019. See Doc. Nos. 21
and 24. In its amended counterclaim, KRH contends Eastep
lacks standing and KRH should be awarded attorney's fees
under N.D.C.C. § 28-26-01(2) which requires the Court to
award attorney's fees “upon a finding that a claim
for relief was frivolous.” On July 9, 2019, the Court
granted Eastep's motion for conditional certification.
See Doc. No. 40. Eastep has moved to dismiss the
amended counterclaim for failure to state a claim upon which
relief can be granted. See Doc. No. 19.
STANDARD OF REVIEW
8(a)(2) of the Federal Rules of Civil Procedure requires a
pleading to contain a “short and plain statement of the
claim showing that the pleader is entitled to relief.”
Fed.R.Civ.P. 8(a)(2). Rule 12(b)(6) of the Federal Rules of
Civil Procedure mandates the dismissal of a claim if there
has been a failure to state a claim upon which relief can be
granted. In order to survive a motion to dismiss under Rule
12(b)(6), a complaint must contain “sufficient factual
matter, accepted as true, to state a claim to relief that is
plausible on its face.” Ashcroft v. Iqbal, 556
U.S. 662, 678 (2009) (quotes omitted). A plaintiff must show
that success on the merits is more than a “sheer
possibility.” Id. A complaint does not need
detailed factual allegations, but it must contain more than
labels and conclusions. Bell Atl. Corp. v. Twombly,
550 U.S. 544, 555 (2007).
court must accept all factual allegations of the complaint as
true, except for legal conclusions or “formulaic
recitation of the elements of a cause of action.”
Ashcroft, 556 U.S. at 678. A complaint does not
“suffice if it tenders ‘naked assertion[s]'
devoid of ‘further factual enhancement.'”
Id. The determination of whether a complaint states
a claim upon which relief can be granted is a
“context-specific task that requires the reviewing
court to draw on its judicial experience and common
sense.” Id. at 679. Dismissal will not be
granted unless it appears beyond doubt the plaintiff can
prove no set of facts entitling him to relief. Ulrich v.
Pope Cty., 715 F.3d 1054, 1058 (8th Cir. 2013).
contends federal courts exercising diversity jurisdiction do
not have authority to award attorney's fees and costs
pursuant to N.D.C.C. § 28-26-01(2) because KRH's
state law based counterclaim primarily regulates procedure,
which under the Erie doctrine, is governed by
federal law. See Burlington N. R. Co. v. Woods, 480
U.S. 1, 8 (1987) (finding Alabama statute which imposed
mandatory penalties on unsuccessful appeals was supplanted by
Fed. R. App. P. 38 which allowed costs and fees to be awarded
if an appeal was found to be frivolous); Erie R. Co. v.
Tompkins, 304 U.S. 64 (1938). KRH contends Section
28-26-01(2) is state substantive law that is not co-extensive
with Rule 11 of the Federal Rules of Civil Procedure. Having
carefully reviewed the parties' briefs and the relevant
case law, the Court finds Eastep's argument to be
Dakota's statute provides in relevant part as follows:
2. In civil actions the court shall, upon a finding that a
claim for relief was frivolous, award reasonable actual and
statutory costs, including reasonable attorney's fees to
the prevailing party. Such costs must be awarded regardless
of the good faith of the attorney or party making the claim
for relief if there is such a complete absence of actual
facts or law that a reasonable person could not have thought
a court would render judgment in that person's favor,
providing the prevailing party has in responsive pleading
alleged the frivolous nature of the claim. This subsection
does not require the award of costs or fees against an
attorney or party advancing a claim unwarranted under
existing law, if it is supported by a good-faith argument for
an extension, modification, or reversal of the existing law.
N.D.C.C. § 28-26-01(2). This statute requires the court
to award attorney's fees and costs to the prevailing
party upon a finding that a claim was frivolous. Good faith
is not a defense if there is a complete absence of law or
facts that a reasonable person could have not expected to
prevail on the claim. The frivolousness determination is made
on an objective basis from the perspective of the pleader at
the time the claim was asserted. Tank v. Burlington Res.
Oil & Gas Co. LP, No. 4:10-cv-088, 2013 WL 6150783,
at 16 (D.N.D. Nov. 22, 2013).
provides as follows:
(a) Signature. Every pleading, written motion, and other
paper must be signed by at least one attorney of record in
the attorney's name--or by a party personally if the
party is unrepresented. The paper must state the signer's
address, e-mail address, and telephone number. Unless a rule
or statute specifically states otherwise, a pleading need not
be verified or accompanied by an affidavit. The court must
strike an unsigned paper ...