Son et al v. Kim et al

Filing 64

ENTER MEMORANDUM OPINION AND ORDER Signed by the Honorable Harry D. Leinenweber on 6/10/2016:Mailed notice(wp, )

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION

KWANG HOON SON and PYONG UK
KIM, on Behalf of Themselves
and all Other Plaintiffs
similarly situated known
and unknown,
Plaintiffs,

Case No. 15 C 3758

v.

Judge Harry D. Leinenweber

COMPREHENSIVE PAIN &
REHABILITATION CENTER, LTD.,
and DAVID Y. KIM,
Defendants.

MEMORANDUM OPINION AND ORDER
Before the Court is Defendants’ Motion to Dismiss Plaintiffs’
First Amended Complaint pursuant to Rule 12(b)(7) [ECF No. 45].

For

the reasons stated herein, the Motion is denied.
I.

BACKGROUND

Plaintiffs brought this action under the Fair Labor Standards
Act

(“FLSA”)

alleging

that

on

behalf

of

Defendants,

themselves

and

Comprehensive

the

putative

Rehabilitation

class,
Center

(“CRC”) and David Y. Kim, failed to pay proper wages and time-andone-half

overtime

compensation

to

numerous

CRC

employees.

Plaintiffs claim that they were employed by CRC as drivers tasked
with providing transportation services to patients.

Defendants now

move to dismiss the action for failure to join an indispensable

party, namely Hankook Pain & Rehabilitation (“HPR”).

Defendants

argue that Plaintiffs were employees of HPR, not CRC, and therefore
if anyone is liable to Plaintiffs under the FLSA it is HPR.
In support, Defendants cite to the affidavit of Defendant Kim,
in which he states that HPR and CRC entered into an oral agreement
under which CRC agreed to provide certain physician services to HPR
patients.

Kim Aff. ¶ 5.

HPR agreed to provide the transportation

services for its patients who received treatment from CRC, and in
return, CRC agreed to pay HPR a flat monthly fee of $3,800.
¶ 6.

Id. at

In his affidavit, Defendant Kim also describes Plaintiffs’

relationship with HPR, claiming that “at all times relevant, the
Plaintiffs were employees of HPR and worked for HPR as drivers . . .
provid[ing] transportation services for HPR patients who received
services under the [agreement with CRC] as well as for HPR patients
who received services from HPR exclusively.”

Id. at ¶ 7.

Defendant

Kim states that under the oral agreement with HPR, CRC was required
to

pay

a

portion

directly.

of

the

Id. at ¶ 8.

interviewed,

hired,

disciplined,

$3,800

fee

to

Plaintiff

Son

But neither CRC nor Defendant Kim ever

supervised,

reprimanded,

monthly

directed,

promoted,

controlled,

determined

the

terminated,
rate

of

compensation or the work schedule, or changed the employment status
of any of the Plaintiffs, nor did they have the authority to do so.
See, id.
HPR.

Rather, Defendant Kim claims that all of this was done by

See, id.

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Plaintiffs contest the characterization of HPR as their true
employer.
both

of

They rely on the affidavits of Plaintiffs Son and Kim,
whom

Complaint)

assert

that

at

Defendants, not HPR.

(consistently
all

relevant

with

the

times

allegations

they

were

in

employed

the
by

Plaintiffs also provide copies of numerous

paychecks issued to Plaintiff Son by Defendant CRC, and a copy of
Plaintiff Son’s W-2 form from 2013 stating that he was an employee
of CRC.
II.

LEGAL STANDARD

For purposes of a motion to dismiss for failure to join a party
under

Rule

19,

the

Complaint as true.

Court

must

accept

the

allegations

in

the

Davis Cos. v. Emerald Casino, Inc., 268 F.3d

477, 479 n.2 (7th Cir. 2001).

But it may also consider extrinsic

evidence. Id. at 480 n.4. Further, the moving party has the burden
of persuasion when it argues for dismissal pursuant to Rule 19.
III.

ANALYSIS

“The purpose of Rule 19 is to ‘permit joinder of all materially
interested parties to a single lawsuit so as to protect interested
parties and avoid waste of judicial resources.’”
of

Cook

County,

Ill.,

568

F.3d

632,

634

Askew v. Sheriff
(7th

Cir.

2009)

(quoting Moore v. Ashland Oil, Inc., 901 F.2d 1445, 1447 (7th Cir.
1990)).

A court analyzing a motion to dismiss based on Rule 19 uses

a two-step inquiry. Davis Cos., 268 F.3d at 481.

The first step is

to identify the “persons required to be joined if feasible.”

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Askew,

568

F.3d

at

635.

Rule

19(a)(1)

sets

forth

who

is

a

“required

party,” and states as follows:
(1)

Required Party.
A person who is subject to
service of process and whose joinder will not
deprive the court of subject-matter jurisdiction
must be joined as a party if:
(A)
in that person’s absence, the court cannot
accord complete relief among existing parties; or
(B)
that person claims an interest relating to
the subject of the action and is so situated that
disposing of the action in the person’s absence
may:
(i)
as a practical matter impair or impede the
person’s ability to protect the interest; or
(ii) leave an existing party subject to a
substantial risk of incurring double, multiple, or
otherwise inconsistent obligations because of the
interest.

FED. R. CIV. P. 19(a).
Defendants argue that HPR must be joined as a “required party”
because:

(a) HPR constitutes the Plaintiffs’ “employer” under the

“economic realities” test under prevailing FLSA standards; and (b)
given the agreement between CRC and HPR, there is a substantial risk
that Defendants will be subject to double liability as a result of
HPR’s absence.

In support of these assertions, Defendants attach

only the affidavit of Defendant Kim.

Although in ruling on a motion

to dismiss for failure to join a necessary party, the Court may
consider affidavits and other extrinsic evidence, the Court is also
obligated to accept the allegations in the complaint as true. Davis
Cos., 268 F.3d at 479 n.2.

The affidavit of Defendant Kim directly

contradicts the allegations in the Complaint.

Moreover, Defendant

Kim’s assertion that HPR was Plaintiffs’ employer is undermined by
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the

other

extrinsic

evidence

presented

to

the

Court,

Plaintiff Son’s paychecks and W-2 forms issued by CRC.

including
Defendant

Kim explains that the checks were issued under the terms of CRC’s
agreement with HPR and that the W-2 form was issued mistakenly by
CRC’s accountant, but these claims are unsubstantiated.

In light of

documentary evidence suggesting the contrary, the Court is unwilling
to accept Defendant Kim’s self-serving affidavit, standing alone, as
true.
Because Defendants have not carried their burden of proving
that HPR is a necessary party under Rule 19(a), the Court need not
consider whether HPR is indispensable within the meaning of Rule
19(b).

However, should Defendants discover additional support for

their position, after further investigation, they are free to move
for permissive joinder of HPR under Rule 20.
IV.

CONCLUSION

For the reasons stated herein, Defendants’ Motion to Dismiss
for Failure to Join an Indispensable Party is denied.

IT IS SO ORDERED.

Harry D. Leinenweber, Judge
United States District Court
Dated:6/10/2016

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