Chambers et al v. Groome Transportation of Alabama, Inc. et al
MEMORANDUM OPINION AND ORDER: it is ORDERED that the 7 Motion to Dismiss Individual Dfts, filed by Dfts Harold V. Groome, Jr., Harold V. Groome III, and Christopher Groome, is GRANTED in part and DENIED in part as follows: (1) The 7 motion is GRA NTED as to the WARN Act claims, and the WARN Act claims against the individual Dfts are DISMISSED with prejudice; and (2) the 7 motion is DENIED as to the FLSA claims. Signed by Chief Judge William Keith Watkins on 12/12/2014. (Attachments: # 1 Civil Appeals Checklist)(wcl, )
IN THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF ALABAMA
NETTIE CHAMBERS, et al.,
GROOME TRANSPORTATION OF
ALABAMA, INC., et al.,
CASE NO. 3:14-CV-237-WKW
MEMORANDUM OPINION AND ORDER
Before the court is a Motion to Dismiss Individual Defendants (Doc. # 7),
filed by Defendants Harold V. Groome, Jr., Harold V. Groome III, and Christopher
Groome (“individual Defendants”), pursuant to Rule 12(b)(2) and (b)(6) of the
Federal Rules of Civil Procedure. Plaintiffs do not oppose the dismissal of their
claims against the individual Defendants for alleged violations of the Workers’
Adjustment and Retraining Notification Act, 29 U.S.C. §§ 2101–09 (“WARN
Act”), but they contend that they have pleaded sufficient facts to support the
exercise of personal jurisdiction over the individual Defendants and to state a claim
for relief against the individual Defendants for violations of the Fair Labor
Standards Act (“FLSA”), 29 U.S.C. §§ 201–19. (Doc. # 18, at 1.) After careful
consideration of the arguments of counsel, the relevant law, and the Complaint’s
allegations, the court finds that the motion to dismiss is due to be granted in part
and denied in part.
I. JURISDICTION AND VENUE
Subject-matter jurisdiction is proper pursuant to 28 U.S.C. § 1331, and
venue is not contested. This opinion addresses the court’s personal jurisdiction
over the individual Defendants.
II. STANDARDS OF REVIEW
A Rule 12(b)(2) motion tests the court’s exercise of personal jurisdiction
over a defendant. See Fed. R. Civ. P. 12(b)(2). In this case, Plaintiffs bear the
burden of “establish[ing] a prima facie case of personal jurisdiction over a
nonresident defendant.” Madara v. Hall, 916 F.2d 1510, 1514 (11th Cir. 1990).
The allegations in the Complaint are presumed true because they are
uncontroverted by evidence. See id.
When evaluating a motion to dismiss pursuant to Federal Rule of Civil
Procedure 12(b)(6), the court must take the facts alleged in the complaint as true
and construe them in the light most favorable to the plaintiff. Resnick v. AvMed,
Inc., 693 F.3d 1317, 1321–22 (11th Cir. 2012). To survive Rule 12(b)(6) scrutiny,
“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) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). “[F]acial
plausibility” exists “when the plaintiff pleads factual content that allows the court
to draw the reasonable inference that the defendant is liable for the misconduct
alleged.” Id. (citing Twombly, 550 U.S. at 556).
Plaintiffs are former employees of Groome Transportation of Alabama, Inc.,
which had contracted with Auburn University to provide shuttle bus services for its
students. Plaintiffs worked as shuttle bus drivers, transporting students within
Auburn’s city limits, principally on Auburn University’s campus, beginning prior
to April 2012 and continuing until July 2013 when Groome Transportation closed
its area plant. (Compl. ¶ 16.)
On April 2, 2014, Plaintiffs filed this action against Groome Transportation
and the individual Defendants. The Complaint contains two counts. In Count
One, which alleges violations of the FLSA, Plaintiffs contend that from
approximately April 1, 2012, to November 30, 2012, Groome Transportation did
not adequately compensate them for hours worked in excess of forty hours per
week. See 29 U.S.C. § 207(a)(1) (requiring that employees who work in excess of
forty hours per week be compensated “at a rate not less than one and one-half
times the regular rate at which he is employed”). Plaintiffs seek unpaid overtime
wages in a collective action under the FLSA. In Count Two, Plaintiffs bring a
claim under the WARN Act, individually and as representatives of a proposed
class, alleging that Groome Transportation failed to give the minimum sixty-day
written notice to its employees as required by the WARN Act. Plaintiffs seek all
relief available under the WARN Act, including sixty days back pay.
Defendant Groome Transportation responded to the Complaint with a
motion to compel arbitration. A prior Order denied that motion as to twenty of the
forty-five Plaintiffs and granted the motion as to twenty-five Plaintiffs. This action
against Groome Transportation and the individual Defendants for alleged
violations of the WARN Act and the FLSA proceeds, therefore, as to twenty
Pending is the individual Defendants’ motion to dismiss the WARN Act and
FLSA claims. The individual Defendants invoke Rule 12(b)(2) and (b)(6), and
Plaintiffs have responded to the arguments.
Those twenty Plaintiffs are: (1) Nettie Chambers; (2) Kevin Bartlett; (3) Adolphus
Billingslea; (4) Mattie Brown; (5) Ernest Chappell, Jr.; (6) Lavelle Cox; (7) Tracy Eden;
(8) Janice Ferrell; (9) Justin Greene; (10) Geraldine Gunn; (11) Jacqueline Hinson;
(12) LaTwanika Rhodes; (13) Christopher Rogers; (14) Gregory Rowell; (15) James M. Smith;
(16) Willie Frank Smith; (17) Charles Tate; (18) Lakecia Thomas; (19) Michael Watson; and
(20) Cassandra Young.
The WARN Act
Plaintiffs posit no opposition to the individual Defendants’ motion to
dismiss the WARN Act claims. Accordingly, the WARN Act claims will be
dismissed against the individual Defendants.
The individual Defendants also contend that the Complaint “fails to allege
sufficient facts to invoke personal jurisdiction over [them].” 2 (Doc. # 7, at 3.) A
personal-jurisdiction challenge in federal court requires a two-part analysis. The
court first must determine its jurisdiction under the forum state’s long-arm statute;
second, it must decide whether exercising jurisdiction comports with principles of
constitutional due process. Alabama’s long-arm statute permits state and federal
courts in Alabama to exercise personal jurisdiction “to the fullest extent
constitutionally permissible.” Sloss Indus. Corp. v. Eurisol, 488 F.3d 922, 925
(11th Cir. 2007) (citing Ala. R. Civ. P. 4.2(b)). Only a single analysis is necessary,
therefore, because the limits of Alabama’s long-arm jurisdiction are coterminous
with constitutional due process requirements.
The Complaint does not identify the residency of the individual Defendants, but in the
parties’ briefing, there is no disagreement that the individual Defendants do not reside in
Alabama. (See, e.g., Doc. # 7, at 3 n.1 (“[T]he addresses for service accurately reflect that each
of the[ individual] Defendants resides in the Commonwealth of Virginia.”).)
The Due Process Clause requires that (1) a defendant have “minimum
contacts” with the forum state, and that (2) the court’s exercise of jurisdiction
conform with “traditional notions of fair play and substantial justice.” Burnham v.
Superior Ct. of Cal., 495 U.S. 604, 618 (1990).
Minimum contacts may be established through either general or specific
jurisdiction. “General jurisdiction” over a defendant arises from the defendant’s
continuous and systematic contacts with the forum state that are unrelated to the
suit, while “specific jurisdiction” arises from a defendant’s sporadic or limited
contacts with the forum state that are at issue in the plaintiff’s cause of action.
Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 414–15 nn.8–9
Plaintiffs argue that the Complaint alleges facts demonstrating “personal
jurisdiction both general and specific” (Doc. # 19, at 12); however, Plaintiffs do
not point to any facts that establish that the individual Defendants had continuous
and systematic contact with Alabama. Hence, the analysis focuses only on specific
“[S]pecific personal jurisdiction is a claim-specific inquiry.” Turner v.
Regions Bank, 770 F. Supp. 2d 1244, 1248 (M.D. Ala. 2011) (Thompson, J.)
(quoting Seiferth v. Helicopteros Atuneros, Inc., 472 F.3d 266, 274 (5th Cir. 2006)
(alteration omitted)). Specific jurisdiction requires, first, “some act by which the
defendant purposefully avails itself of the privilege of conducting activities within
the forum . . . , thus invoking the benefits and protections of its laws,” and, second,
that the defendant’s contacts with the forum state relate to the cause of action or
give rise to it. Oldfield v. Pueblo De Bahia Lora, S.A., 558 F.3d 1210, 1220 (11th
Cir. 2009). Additionally, as a general principle, “jurisdiction over an employee
does not automatically follow from jurisdiction over the corporation which
employs him . . . . Each defendant’s contacts with the forum State must be
assessed individually.” Keeton v. Hustler Magazine, Inc., 465 U.S. 770, 781 n.13
The individual Defendants argue that the “only personal jurisdiction
averments contained within Plaintiffs’ complaint relate exclusively to Groome
[Transportation] as a corporate entity” and that the individual Defendants are not
subject to personal jurisdiction based upon acts taken in their corporate capacity.
(Doc. # 7, at 3.) The gist of their argument is that in their individual capacities, as
opposed to their corporate capacities, they have no contacts with Alabama, and,
thus, personal jurisdiction is lacking. Plaintiffs argue, on the other hand, that the
facts “directly give rise” to an FLSA claim against the individual Defendants
because they qualify as employers for purposes of the FLSA and that, by doing
business in Alabama, the individual Defendants “purposefully availed themselves
of conducting activity in Alabama . . . .” (Doc. # 19, at 14.)
The individual Defendants’ argument invokes Alabama’s fiduciary-shield
doctrine, which provides that personal jurisdiction “over individual officers or
employees of a corporation may not be predicated merely upon jurisdiction over
the corporation itself.” Thames v. Gunter-Dunn, Inc., 373 So. 2d 640, 641–42
(Ala. 1979); see also Ex parte Kohlberg Kravis Roberts & Co., 78 So. 3d 959, 974
(Ala. 2011) (recognizing Thames as Alabama’s first application of the fiduciaryshield doctrine). As observed in Kohlberg, however, over the years, the Alabama
Supreme Court “has distinguished Thames on several bases so as to avoid applying
the fiduciary-shield doctrine” and has made clear that “an individual is not shielded
from liability simply because his acts were done in furtherance of his employer’s
interest.” 78 So. 3d at 975 (citation, alterations, and internal quotation marks
omitted); see also Calder v. Jones, 465 U.S. 783, 790 (1984) (observing that the
individual defendants’ “status as employees does not somehow insulate them from
jurisdiction” for their contacts with the forum state).
The parties cite no controlling authority discussing the fiduciary-shield
doctrine. Further analysis of the efficacy of the fiduciary-shield doctrine is not
necessary to resolve the present motion, however, because, in the context of this
case, there are sufficient facts establishing that personal jurisdiction over the
individual Defendants is not “predicated merely upon jurisdiction over the
corporation itself.” Thames, 373 So. 2d at 641–42.
Although not cited by either party, a Fifth Circuit opinion is both instructive
and persuasive. See Donovan v. Grim Hotel Co., 747 F.2d 966 (5th Cir. 1984). In
Donovan, the court held that the fiduciary-shield doctrine did not divest the court
of personal jurisdiction in an FLSA action alleging the direct liability of the
corporate president. The Fifth Circuit explained that the president allegedly
violated the FLSA, “under which he is statutorily characterized as an employer and
is personally responsible for defaults . . . .” Id. at 973. The president, “no less than
the corporations he owned, directed, and controlled, is personally liable for unpaid
statutory wages to his employees.” Id. “Consequently, his Texas-connected acts
that produced injurious effects to the Texas-based employees cannot, as a matter of
law or fact, be regarded as performed solely in his corporate capacity.”
Because the president was personally liable under the FLSA for the alleged
violations that occurred in Texas, he had sufficient minimum contacts with Texas.
Id. at 974.
Based upon Donovan, the fiduciary-shield doctrine does not apply if the
Complaint’s allegations establish the individual Defendants’ direct liability as an
employer under the FLSA. If there is direct liability, then the Complaint is not
seeking to predicate personal jurisdiction over the individual Defendants based
solely upon the acts of Groome Transportation. Accordingly, the inquiry into
personal jurisdiction turns on whether the individual Defendants satisfy the
definition of an “employer” under the FLSA.
The FLSA broadly defines “employer” to “include[ ] any person acting
directly or indirectly in the interest of an employer in relation to an employee,” 29
U.S.C. § 203(d), and logically, a “person” includes an “individual,” id. § 203(a);
see also Reich v. Circle C Invs., Inc., 998 F.2d 324, 329 (5th Cir. 1993) (“[T]he
FLSA’s definition of employer must be liberally construed to effectuate Congress’
remedial intent.”). Under Eleventh Circuit authority, “a corporate officer with
operational control of a corporation’s covered enterprise is an employer along with
the corporation” and is “jointly and severally liable under the FLSA for unpaid
wages.” Patel v. Wargo, 803 F.2d 632, 637–38 (11th Cir. 1986) (citation and
internal quotation marks omitted). Personal liability under the FLSA attaches to an
officer who is “involved in the day-to-day operation or ha[s] some direct
responsibility for the supervision of the employee.” Id. at 638; see also Stewart v.
Sterling Tech. Solutions, LLC, No. 6:10cv630, 2010 WL 4647135, at *2 (M.D. Fla.
Oct. 12, 2010) (recommending the denial of a Rule 12(b)(6) motion to dismiss
where the complaint alleged that the individual defendants had “significant
ownership interest with operational control of significant aspects” of the corporate
employer’s “day-to-day functions” (internal quotation marks omitted)), adopted by
Stewart v. Sterling Tech. Solutions, LLC, No. 6:10cv630, 2010 WL 4646903 (M.D.
Fla. Nov. 9, 2010).
Tested against the foregoing principles, the Complaint alleges that the
individual Defendants are “corporate officer[s] of Groome [Transportation] who
had and ha[ve] operational control over the policies that determined the day-to-day
functions of Groome [Transportation] and its compensation of employees.”
(Compl. ¶¶ 7–9.) It further alleges that the individual Defendants have “direct
responsibility for the pay policies of employees, such as [ ] Plaintiffs.” (Compl.
¶¶ 7–9.) These allegations, presumed true at this stage of the litigation, premise
liability against the individual Defendants as corporate officers of Groome
Transportation based upon their control over the policies affecting the day-to-day
operation, including the pay scheme, of Groome Transportation employees. The
allegations are adequate to bring the individual Defendants within Patel’s
definition of an FLSA employer.
Based upon the foregoing, the Complaint’s allegations establish that the
individual Defendants’ activities (i.e., their operational control) expose them to
personal liability as employers under the FLSA to their Alabama-based employees
for alleged wage-payment violations. For purposes of the personal-jurisdiction
analysis, each individual Defendant is deemed to have engaged in acts as an
employer that caused injury to employees working in Alabama. These allegations
establish the minimum contacts necessary to create specific jurisdiction over the
The individual Defendants cannot hide behind the fiduciary-shield doctrine
to avoid personal jurisdiction when they allegedly engaged in acts that had
foreseeable consequences in Alabama for which they may be held personally liable
under the FLSA. The individual Defendants’ argument that minimum contacts are
lacking by application of the fiduciary-shield doctrine is unavailing. Based upon
the present record and the arguments, Plaintiffs have made a prima facie showing
of specific jurisdiction.
Fair Play and Substantial Justice
Where a plaintiff demonstrates that an out-of-state defendant has
purposefully established constitutionally sufficient minimum contacts within the
forum state, the defendant “must make a ‘compelling case’ that the exercise of
jurisdiction would violate traditional notions of fair play and substantial justice.”
Diamond Crystal Brands, Inc. v. Food Movers Int’l, Inc., 593 F.3d 1249, 1267
(11th Cir. 2010). “Relevant factors include the burden on the defendant, the
forum’s interest in adjudicating the dispute, the plaintiff’s interest in obtaining
convenient and effective relief and the judicial system’s interest in resolving the
dispute.” Licciardello v. Lovelady, 544 F.3d 1280, 1288 (11th Cir. 2008).
The individual Defendants do not contend that the exercise of jurisdiction
over them would violate traditional notions of fair play and substantial justice. In
fact, Defendants do not address this component of the personal-jurisdiction
Because the individual Defendants have not demonstrated any burden
that outweighs the interests of Alabama, the plaintiffs, and the forum court, they
have not made a compelling case that it would be unfair and unjust to require the
individual Defendants to defend against Plaintiffs’ FLSA claims in Alabama.
Personal jurisdiction over the individual Defendants comports with the Due
Plaintiffs’ FLSA suit in Alabama against the individual
Defendants is constitutionally permissible.
Accordingly, the individual
Defendants’ Rule 12(b)(2) motion is due to be denied.
The individual Defendants argue that they are not Plaintiffs’ “employer”
within the meaning of the FLSA and that, therefore, the Complaint fails to state a
claim for which relief can be granted under Rule 12(b)(6). Plaintiffs counter that
the Complaint’s allegations sufficiently plead the individual Defendants’ corporate
capacity and control over Plaintiffs’ employment, thus, bringing those Defendants
within the definition of an FLSA “employer.”
The analysis in Part IV.B.1.a. resolves these arguments against the
individual Defendants. Namely, the court found that the allegations demonstrate
that the individual Defendants satisfy the Eleventh Circuit’s definition of an FLSA
employer. Accordingly, the Complaint states a plausible claim for relief against
the individual Defendants under the FLSA, and the individual Defendants’ Rule
12(b)(6) motion to dismiss is due to be denied.
Based upon the foregoing, it is ORDERED that the Motion to Dismiss
Individual Defendants (Doc. # 7), filed by Defendants Harold V. Groome, Jr.,
Harold V. Groome III, and Christopher Groome, is GRANTED in part and
DENIED in part as follows:
The motion is GRANTED as to the WARN Act claims, and the
WARN Act claims against the individual Defendants are DISMISSED with
the motion is DENIED as to the FLSA claims.
DONE this 12th day of December, 2014.
/s/ W. Keith Watkins
CHIEF UNITED STATES DISTRICT JUDGE
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