1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 CRISTIAN ALEXIS CLARA ALOS, et al., 7 Case No. 23-cv-02669-SK Plaintiffs, 8 v. ORDER DENYING MOTION TO 9 DISMISS AP CONSTRUCTION, LLC, et al., 10 Regarding Docket No. 17 Defendants. 11

12 This matter comes before the Court upon consideration of the motion to dismiss for lack of 13 subject matter jurisdiction filed by Defendants AP Construction, LLC and Antonio Perez 14 (collectively, “Defendants”). The Court finds the motion suitable for disposition without oral 15 argument and, thus, VACATES the hearing scheduled for November 13, 2023. See N.D. Civ. 16 L.R. 7-1(b). Having carefully considered the parties’ papers, relevant legal authority, and the 17 record in the case, the Court hereby DENIES Defendants’ motion for the reasons set forth below. 18 BACKGROUND 19 Plaintiffs Cristian Alexis Clara Also, Juan Carlos Nieto Valencia, and Natanael Adams 20 (collectively, “Plaintiffs”) bring an action against Defendants under the Fair Labor Standards Act, 21 29 U.S.C. §§ 201, et seq. (“FLSA”). Plaintiffs allege that: 22 Defendants are “an enterprise engaged in commerce or in the production of goods for commerce” under 29 USC § 203(s)(1)(A)(i) 23 and (ii) because they have annual gross volume of sales made or business done of at least $500,000; and because they are engaged in 24 interstate commerce or in the production of goods for interstate commerce. 25 (Dkt. No. 1 (Compl.), ¶ 7.) 26 Defendants move to dismiss for lack of subject matter jurisdiction under Federal Rule of 27 Civil Procedure 12(b)(1) on the grounds that they do not engage in interstate commerce and, thus, 1 are not an “enterprise” under the FLSA.1 2 ANALYSIS 3 A. Legal Standards on Motion to Dismiss. 4 When a defendant moves to dismiss for lack of subject matter jurisdiction pursuant to 5 Federal Rule of Civil Procedure 12(b)(1), the plaintiff bears the burden of proving that the court 6 has jurisdiction to decide the claim. Thornhill Publ’n Co. v. Gen. Tel. & Elecs. Corp., 594 F.2d 7 730, 733 (9th Cir. 1979). Federal courts can only adjudicate cases which the Constitution or 8 Congress authorize them to adjudicate: cases involving diversity of citizenship, or those cases 9 involving a federal question, or where the United States is a party. See, e.g., Kokkonen v. 10 Guardian Life Ins. Co. of Am., 511 U.S. 375, 377 (1994). 11 A Rule 12(b)(1) motion can be either “facial” or “factual.” Safe Air for Everyone v. Meyer, 12 373 F.3d 1035, 1039 (9th Cir. 2004). Where an attack on jurisdiction is a “facial” attack on the 13 allegations of the complaint, the factual allegations of the complaint are taken as true and the non- 14 moving party is entitled to have those facts construed in the light most favorable to him or her. 15 Federation of African Am. Contractors v. City of Oakland, 96 F.3d 1204, 1207 (9th Cir. 1996). 16 In a “factual attack,” the moving party questions the veracity of the plaintiff’s allegations 17 that “would otherwise invoke federal jurisdiction.” Safe Air for Everyone, 373 F.3d at 1039. The 18 plaintiff’s allegations are questioned by “introducing evidence outside the pleadings.” Leite v. 19 Crane Co., 749 F.3d 1117, 1121 (9th Cir. 2014). “When the defendant raises a factual attack, the 20 plaintiff must support her jurisdictional allegations with ‘competent proof,’ under the same 21 evidentiary standard that governs in the summary judgment context.” Id. (quoting Hertz Corp. v. 22 Friend, 559 U.S. 77, 96-97 (2010)). While the plaintiff typically has the burden of proof to 23 establish subject matter jurisdiction, “if the existence of jurisdiction turns on disputed factual 24 issues, the district court may resolve those factual disputes itself.” Id. at 1121-22 (citing Safe Air 25

26 1 In their reply brief, Defendants attempt to reframe their motion as one for failure to state a claim under Federal Rule of Civil Procedure 12(b)(6) and argue that Plaintiffs failed to allege 27 sufficiently that they conduct interstate commerce. (Dkt. No. 22.) Because Defendants did not 1 for Everyone, 373 F.3d at 1039-40). 2 B. Defendants’ Motion to Dismiss. 3 Defendants’ motion is remarkably thin. As Plaintiffs point out, Defendants do not cite to 4 any case law in support of their motion. Instead, Defendants simply quote the FLSA and rely on a 5 declaration from Perez, the owner of AP Construction, who states that AP Construction only 6 works on residential properties in the San Francisco Bay Area and that AP Construction does not 7 advertise or solicit business out of state. (Dkt. No. 17-2, ¶¶ 3, 4.) However, whether Defendants 8 did not or did not actually engage in interstate commerce under the FLSA goes to the merits of 9 Plaintiffs’ claim and is not a jurisdictional issue. Vega v. Peninsula Household Servs., Inc., 2009 10 WL 656291, at *3 (N.D. Cal. Mar. 12, 2009); Jiang v. Lee’s Happy House, 2007 WL 3105087 11 (N.D. Cal. Oct. 23, 2007). 12 Moreover, Defendants fail to address the fact that interstate commerce under the FLSA 13 includes purely intrastate activities if the goods handled in their business have moved in interstate 14 commerce at some point. Donovan v. Scoles, 652 F.2d 16, 18-19 (9th Cir. 1981). As the Ninth 15 Circuit explained in Donovan, the clear statutory language regarding enterprise coverage: 16 indicates that even a business engaged in purely intrastate activities can no longer claim exemption from FLSA coverage if the goods its 17 employees handle have moved in interstate commerce. . . . The language imposes no requirement that the goods have a present 18 involvement in interstate commerce when they are handled or sold. Instead it broadens coverage to include all employees within the 19 stream of commerce of such goods, even if their own participation remains purely intrastate. 20 21 Id. Defendants fail to address the correct legal standard. Even if Defendants had addressed the 22 correct legal standard, it is not clear how they could demonstrate that they do not use goods that 23 have moved through interstate commerce. Accordingly, the Court DENIES Defendants’ motion. 24 / / / 25 / / / 26 / / / 27 / / / 1 CONCLUSION 2 For the foregoing reasons, the Court DENIES Defendants’ motion to dismiss. 3 IT IS SO ORDERED. 4 Dated: November 6, 2023 + Attn [ww

SALLIE KIM

6 United States Magistrate Judge 7 8 9 10 11 a 12

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