Duane Morris Takeaways: On August 22, 2025, in Shamburg, et al. v. Ayvaz Pizza, LLC, et al., No. 24-CV-00098, 2025 WL 2431652 (W.D. Va. Aug. 22, 2025), Judge Jasmine Yoon of the U.S. District Court for the Western District of Virginia partially dismissed a proposed nationwide collective action brought by pizza delivery drivers. Although Plaintiff Chandler Shamburg ("Plaintiff" or "Shamburg"), and other plaintiffs, asserted nationwide Fair Labor Standards Act ("FLSA") and state law claims from multiple jurisdictions, the Court dismissed nearly all of them for lack of personal jurisdiction. This ruling reinforces the growing trend of federal courts willing to apply the Due Process Clause's protections to expansive FLSA collective actions and underscores the difficulty plaintiffs face in keeping sprawling, multi-state, wage claims altogether in one federal court.
Case Background
In 2024, Shamburg filed a putative class and collective action that alleged that Ayvaz Pizza ("Ayvaz"), a franchisee that "operates an unidentified number of Pizza Hut Franchise Stores within" Virginia, that is neither incorporated in nor has its principal place of business in Virginia, violated the FLSA and various state laws. Id. at *1. They also sued Ayvaz's owner, Shoukat Dhanani, for this conduct as well. Id.
Shamburg (and, ultimately several other plaintiffs) alleged that both himself, and other drivers, were "required to use their own cars, ensure their cars were legally compliant, pay car-related costs including gasoline expenses, maintenance and part costs, insurance, financing charges, and licensing and registration costs, pay storage costs, cell phone costs, and data charges, and pay for other necessary equipment." Id. As a result, Shamburg and the out-of-state plaintiffs alleged that their hourly rate of pay dropped below the FLSA's minimum wage guarantee because these expenses were "kicked back" to Ayvaz. Id. at *1-2. They also brought seventeen state law claims that "assert causes of action from seven different states and invoke both state statutory and common law." Id. at *8.
But, Ayvaz was no stranger to these issues. It was also recently sued in Garza, et al. v. Ayvaz Pizza, LLC, No. 23-CV-01379 (S.D. Tex.), and Stotesbery, et al. v. Muy Pizza-Tejas, LLC, et al., No. 22-CV-01622 (D. Minn.), based on similar allegations. Based on the existence of these prior two actions, and the presence of the out-of-state plaintiffs' claims, Ayvaz and its owner moved to dismiss based on lack of personal jurisdiction (both general and specific), lack of supplemental jurisdiction, and the first-to-file doctrine. Judge Yoon's decision followed.
The Court's Ruling
In general, Judge Yoon's decision was split into four discrete parts — each addressing whether the Court could exercise various forms of jurisdiction over Ayvaz and its owner. For the most part, the Court declined each type of jurisdiction.
General Personal Jurisdiction & Out-Of-State Plaintiffs
First, although it was uncontested that Ayvaz was neither incorporated in nor headquartered out of Virginia, Plaintiffs argued that Ayvaz was subject to general personal jurisdiction in Virginia based on the U.S. Supreme Court's decision in Mallory v. Norfolk Southern Railway Co., 600 U.S. 122 (2023). In Mallory, the U.S. Supreme Court held that Due Process does not prohibit "a State from requiring an out-of-state corporation to consent to personal jurisdiction to do business there." Id. at 127. Like the Pennsylvania statute at issue in Mallory, Virginia also has "an out-of-state business registration statute." Shamburg¸ 2025 WL 2431652, at *5.
Judge Yoon, however, reasoned that "unlike Pennsylvania, Virginia law does not require the out-of-state business to condition its registration on submitting to general personal jurisdiction" consistent with the decisions of several other district courts. Id. Thus, the Court "conclude[d] that, absent explicit consent to jurisdiction in Virginia's business registration statute" it could not exercise general personal jurisdiction over Ayvaz or its owner.
Specific Jurisdiction & Out-Of-State Plaintiffs
Second, the Court addressed the out-of-state plaintiffs' argument that the Court could exercise specific personal jurisdiction over Ayvaz as to the out-of-state plaintiffs but disagreed. Judge Yoon weighed in on the pending circuit split regarding the applicability of Bristol-Myers Squibb v. Superior Court, 582 U.S. 255 (2017), to FLSA collective actions. The Third, Sixth, Seventh, Eighth and Ninth Circuits hold that Bristol-Myers applies, whereas the First Circuit stands alone and holds otherwise.
Judge Yoon agreed with "the approach taken by the majority of the Courts of Appeals" and held each plaintiff "must present independent, sufficient bases for the exercise of the court's specific jurisdiction over that claim." Id. at *6. Similarly, because none of the plaintiffs alleged facts related to the owner's minimum contacts with Virginia "beyond the fact that Ayvaz is registered to do business in Virginia and operates an unidentified number of Pizza Hut Franchise Stores," their claims could not proceed against him either.
The Seventeen State Law Counts
Third, having dismissed the out-of-state plaintiffs' claims, Judge Yoon declined to exercise supplemental jurisdiction over the seventeen state law counts. The Court observed that "the presence of more subclasses (eight) than states (seven) provides evidence of both complexity and the lack of commonality" that show that the state law claims "would substantially predominate over the FLSA claim." Id. at *8. The court dismissed those claims without prejudice, leaving only the FLSA claims brought by Virginia-based employees.
The First-To-File Doctrine
Fourth and finally, the Court declined Ayvaz's request to dismiss the case under the "first-to-file" doctrine due to the existence of the earlier filed suits in Garza and Stotesbury. The first-to-file rule allows a federal court to decline jurisdiction when a substantially similar lawsuit involving the same parties and issues is already pending in another court. Id. at *10. But, the court concluded that the "putative classes and respective issues" in the two prior suits differ enough that the first-to-file rule should not be applied. Id. at *12.
Indeed, "Stotesbery, by design, includes an FLSA claim limited to those who work in Minnesota" and thus did not overlap based on the Court's ruling. Id. And, the Court declined to apply the first-to-file doctrine to Garza because the "case was settled and dismissed with prejudice" and thus was not pending at the time of the decision. Id. at *10. "Accordingly, Plaintiffs' complaint will survive the motion to dismiss with respect to the FLSA claim for Plaintiffs who live in or work in Virginia." Id. at *12.
Implications for Employers
The Shamburg decision demonstrates that courts are increasingly unwilling to allow out-of-state employees to anchor nationwide collective actions against employers without first affording employers certain due process protections. This growing trend prevents employers from having to defend these actions in distant and unfamiliar courts, and forces plaintiffs to bring these actions where these employers are incorporated or headquartered.
With these trends in mind, corporate counsel should continue to monitor this blog for developments because the Bristol-Myers circuit split is sure to be decided by the U.S. Supreme Court soon, and if their companies are sued in putative class and collective actions, it is better to prepared in advance for when these important issues are decided.
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