Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_06-cv-03157/USCOURTS-cand-3_06-cv-03157-4/pdf.json

Nature of Suit Code: 190
Nature of Suit: Other Contract Actions
Cause of Action: 28:1332 Diversity-Breach of Contract

---

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

United States District Court

For the Northern District of California

IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF CALIFORNIA

CHEVRON GLOBAL TECHNOLOGY

SERVICES COMPANY (formerly known as

CHEVRONTEXACO GLOBAL

TECHNOLOGY SERVICES COMPANY) et

al.,

Plaintiffs,

 v.

MICHAEL S. LITTLE,

Defendant.

 /

No. C-06-3157 MMC

ORDER GRANTING IN PART AND

DENYING IN PART MOTION TO

DISMISS; VACATING HEARING

(Docket No. 9)

Before the Court is defendant Michael S. Little’s (“Little”) motion, filed July 12, 2006,

to dismiss the First Amended Complaint, pursuant to Rule 12(b)(6) of the Federal Rules of

Civil Procedure. Plaintiffs Chevron Global Technology Services Company (formerly known

as ChevronTexaco Global Technology Services Company), and Chevron International

Exploration and Production (formerly known as ChevronTexaco Overseas Petroleum), a

Division of Chevron U.S.A. Inc., (jointly, “Chevron”), have filed opposition to the motion. 

Little has not filed a reply. Having considered the papers filed in support of and in

opposition to the motion, the Court finds the matter appropriate for resolution without oral

argument, see Civil Local Rule 7-1(b), hereby VACATES the August 25, 2006 hearing, and

rules as follows.

Case 3:06-cv-03157-MMC Document 18 Filed 08/22/06 Page 1 of 6
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

1

 The following factual allegations are taken from the complaint and, for purposes of

the instant motion only, are presumed true. See NL Industries, Inc. v. Kaplan, 792 F.2d

896, 898 (9th Cir. 1986).

2

BACKGROUND1

Chevron brings the instant diversity action for breach of contract and breach of the

implied covenant of good faith and fair dealing against Little, its former employee.

Little is an attorney who is licensed to practice law in Louisiana. (See First Amended

Complaint (“FAC”) ¶ 8.) Little began working for Chevron-related entities in various legal

positions starting in 1984, first in the United States and then on overseas assignments from

1996 through the spring of 2003. (See id. ¶ 8.) In 1999, Little accepted a position with

Chevron in Venezuela. (See id. ¶ 9.) On December 31, 2003, Little’s employment with

Chevron was terminated. (See id. ¶ 15.) On May 4, 2004, Little filed suit against Chevron

in Venezuela (“Venezuela action”), seeking statutory employment severance benefits. 

(See ¶ 16.)

Chevron asserts that Little, by filing the Venezuela action, breached written

agreements pertaining to Little’s employment with Chevron, and the implied covenant of

good faith and fair dealing contained therein. (See id. ¶¶ 19-25.) In particular, Chevron

alleges one such agreement, the Contrato de Trabajo (“Labor Contract”), “incorporated by

reference the terms of Defendant Little’s job offer and provided that the Labor Contract

between the parties shall be governed by the laws of the State of California, USA,

regardless of conflict of laws provisions” and that “the parties shall abide by the exclusive

jurisdiction of California, USA for the solution of any dispute that may arise on occasion of

the enforcement or breach of [that] contract.” (See id. ¶¶ 10-11.) 

Chevron alleges another such agreement, the “Expatriate Agreement,” provides that

Little “was not entitled to any additional compensation – i.e., any compensation or

severance benefits other than that provided in the documents comprising Plaintiff’s

employment contract, including Plaintiff’s signed job offer and all attachments thereto.” 

(See id. ¶ 12.) Chevron alleges the Expatriate Agreement further provides that it is

Case 3:06-cv-03157-MMC Document 18 Filed 08/22/06 Page 2 of 6
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

3

governed by the laws of California, without regard to principles of conflicts of law, and that

any disputes with respect to issues related to additional compensation must be resolved in

a California forum. (See id. ¶¶ 13-14.) 

Chevron seeks an award of damages in an amount sufficient to compensate it for

the expenses it has incurred in defending against the Venezuela action. (See id. ¶ 18.) 

Additionally, Chevron seeks an award of punitive damages, based on Little’s asserted

breach of the implied covenant of good faith and fair dealing. (See id. ¶ 30.) 

LEGAL STANDARD

A motion to dismiss under Rule 12(b)(6) cannot be granted unless “it appears

beyond doubt that the plaintiff can prove no set of facts in support of his claim which would

entitle him to relief.” See Conley v. Gibson, 355 U.S. 41, 45-46 (1957). Dismissal can be

based on the lack of a cognizable legal theory or the absence of sufficient facts alleged

under a cognizable legal theory. See Balistreri v. Pacifica Police Dept., 901 F.2d 696, 699

(9th Cir. 1990).

Generally, a district court, in ruling on a Rule 12(b)(6) motion, may not consider any

material beyond the pleadings. See Hal Roach Studios, Inc. v. Richard Feiner And Co.,

Inc., 896 F.2d 1542, 1555 n. 19 (9th Cir. 1990). Material that is properly submitted as part

of the complaint, however, may be considered. See id. Documents whose contents are

alleged in the complaint, and whose authenticity no party questions, but which are not

physically attached to the pleading, also may be considered. See Branch v. Tunnell, 14

F.3d 449, 454 (9th Cir. 1994). In addition, the Court may consider any document “the

authenticity of which is not contested, and upon which the plaintiff’s complaint necessarily

relies,” regardless of whether the document is referred to in the complaint. See Parrino v.

FHP, Inc., 146 F.3d 699, 706 (9th Cir. 1998). Finally, the Court may consider matters that

are subject to judicial notice. See Mack v. South Bay Beer Distributors, Inc., 798 F.2d

1279, 1282 (9th Cir. 1986).

In analyzing a motion to dismiss, the Court must accept as true all material

allegations in the complaint, and construe them in the light most favorable to the

Case 3:06-cv-03157-MMC Document 18 Filed 08/22/06 Page 3 of 6
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

4

nonmoving party. See NL Industries, Inc. v. Kaplan, 792 F.2d at 898. The Court may

disregard factual allegations if such allegations are contradicted by the facts established by

reference to exhibits attached to the complaint. See Durning v. First Boston Corp., 815

F.2d 1265, 1267 (9th Cir. 1987). Conclusory allegations, unsupported by the facts alleged,

need not be accepted as true. See Holden v. Hagopian, 978 F.2d 1115, 1121 (9th Cir.

1992). 

DISCUSSION

A. Breach of Contract

Little moves to dismiss Chevron’s claim for breach of contract, on the ground he has

fully performed and satisfied his obligations under the agreements governing his

employment and that said agreements contain no forum selection clause governing the

instant dispute. For the reasons set forth below, Little has not demonstrated the contract

claim is subject to dismissal.

Little’s first argument in support of dismissal of the contract claim is that the Labor

Contract is not an employment contract, but, rather, a “pro forma immigration tool . . . for

the purposes of securing a business/work visa and permit” from the Venezuelan

government. According to Little, the Labor Contract is “simply an immigration formality for

the Venezuelan authorities” and “was never intended to be enforceable against the

Plaintiffs as a binding agreement to employ the Defendant Little, nor was it mean to hold

Defendant in service to Plaintiffs.” (See Motion at 5:16-19.) The Labor Contract is written

in Spanish, however, (see Little Decl. Ex. 3), and neither party has submitted a declaration

containing a translation of the document. Consequently, the Court is unable to ascertain

the provisions of the Labor Contract, much less interpret the parties’ intent in entering into

such agreement.

Little further argues that an “International to International Relocation Letter”

(“Relocation Letter”), dated June 21, 1999, governed his employment and required him to

comply with local laws. Although the Relocation Letter is not mentioned in the complaint, a

Court, in ruling on a motion to dismiss, may consider documents whose “authenticity is not

Case 3:06-cv-03157-MMC Document 18 Filed 08/22/06 Page 4 of 6
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

2

 Neither party has submitted a copy of the asserted Expatriate Agreement in

connection with the filing of the complaint or the instant motion.

5

contested” and on which the “complaint necessarily relies.” See Parrino v. FHP, Inc., 146

F.3d at 706. Here, although plaintiffs do not dispute the authenticity of the Relocation

Letter, the complaint cannot be said to “necessarily rely” on its terms; rather, the complaint

relies on certain specified provisions in the Labor Contract and Expatriate Agreement. 

Moreover, even if the Court were to consider the Relocation Letter, that document contains

no forum selection clause or choice of law clause, let alone one applicable to disputes

arising out of Little’s employment. The Relocation Letter merely alerts Little that he “will be

exposed to” the laws of the host country, which “may well be different from [his] own,” that

he “will be expected to comply with all such local laws and applicable company policies and

local work rules,” and that his failure to do so may result in discipline or termination. (See

Little Decl. Ex. 1 at 9.) Because the Relocation Letter does not contain a forum selection

clause or a choice of law clause applicable to the parties’ employment relationship, it

provides no basis for dismissal of Chevron’s claim against Little for breach of contract.

Finally, Little’s motion to dismiss fails to address Chevron’s allegation that the

Expatriate Agreement contains a forum selection clause and choice of law clause that

governs the instant dispute and requires that the instant action be litigated in California.2

Accordingly, Little’s motion to dismiss Chevron’s breach of contract claim will be

DENIED.

B. Breach of Implied Covenant of Good Faith and Fair Dealing

Little moves to dismiss Chevron’s implied covenant claim on three grounds. First,

Little, as discussed above, asserts there is no factual basis for the claim. As discussed

above, that argument is unavailing. Next, Little asserts, without citation to authority, that

the “implied covenant cannot serve to chill the abilities of parties to a contract to pursue

legal redress on issues flowing from the performance of the contract.” (See Motion at 6:12-

13.) Chevron does not contend, however, that Little is barred from filing suit against

Chevron. Rather, Chevron contends Little must do so in California courts under California

Case 3:06-cv-03157-MMC Document 18 Filed 08/22/06 Page 5 of 6
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

6

law. Little’s second argument, likewise, is unavailing.

Lastly, Little argues that to the extent Chevron seeks punitive damages for a breach

of the implied covenant of good faith and fair dealing contained in an employment

agreement, the claim is subject to dismissal. Under California law, “the employment

relationship is fundamentally contractual, and . . . in the absence of legislative direction to

the contrary[,] contractual remedies should remain the sole available relief for breaches of

the implied covenant of good faith and fair dealing in the employment context.” See Foley

v. Interactive Data Corp., 47 Cal. 3d 654, 696 (1988).

Accordingly, Little’s motion to dismiss Chevron’s claim for breach of the implied

covenant of good faith and fair dealing will be GRANTED to the extent Chevron seeks an

award of punitive damages.

CONCLUSION

For the reason set forth above, Little’s motion to dismiss is GRANTED in part and

DENIED in part, as follows:

1. The motion to dismiss Chevron’s claim for punitive damages is GRANTED.

2. In all other respects, the motion is DENIED.

This order terminates Docket No. 9.

IT IS SO ORDERED.

Dated: August 22, 2006 

MAXINE M. CHESNEY

United States District Judge

Case 3:06-cv-03157-MMC Document 18 Filed 08/22/06 Page 6 of 6