Creech v. P.J. Wichita, LLC

Filing 44

MEMORANDUM AND ORDER granting 26 Motion to Dismiss for Lack of Jurisdiction. Signed by District Judge Julie A. Robinson on 3/8/2017. (ydm)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF KANSAS
TRINA CREECH, individually and on behalf of
similarly situated persons,
Plaintiff,
Case No. 16-CV-2312-JAR-GEB
v.
P.J. WICHITA, L.L.C., HOUSTON PIZZA
VENTURE, LP, HPV-C, LLC, DEVLIN
PARTNERS LLC, PJ HAWAII, LLC, FRANK
CARNEY, and TERRY NEWMAN
Defendants.

MEMORANDUM AND ORDER
This matter is before the Court on Defendants Houston Pizza Venture, LP and HPV-C,
LLC’s (collectively Defendants) Motion to Dismiss (Doc. 27) for lack of personal jurisdiction.
The motion is fully briefed and the Court is prepared to rule. For the reasons explained in detail
below, the Court grants Defendants’ motion to dismiss for lack of personal jurisdiction.
I.

Standard
Plaintiff has the burden of establishing personal jurisdiction over Defendant.1 In the

absence of an evidentiary hearing, as in this case, the plaintiff must make only a prima facie
showing of jurisdiction to defeat a motion to dismiss.2 “The plaintiff may make this prima facie
showing by demonstrating, via affidavit or other written materials, facts that if true would
support jurisdiction over the defendant.”3 Allegations in a complaint are accepted as true if they

1

Shrader v. Biddinger, 633 F.3d 1235, 1239 (10th Cir. 2011).

2

AST Sports Sci., Inc. v. CLF Distrib. Ltd., 514 F.3d 1054, 1056–57 (10th Cir. 2008); Wenz v. Memery
Crystal, 55 F.3d 1503, 1505 (10th Cir. 1995).
3

Emp’rs Mut. Cas. Co. v. Bartile Roofs, Inc., 618 F.3d 1153, 1159 (10th Cir. 2010) (citing TH Agric. &
Nutrition, LLC v. Ace European Grp. Ltd., 488 F.3d 1282, 1286 (10th Cir. 2007)); OMI Holdings, Inc. v. Royal Ins.

are plausible, non-conclusory, and non-speculative, to the extent that they are not controverted
by submitted affidavits.4 At the same time, the Court does not have to accept as true conclusory
allegations, nor incompetent evidence. When a defendant has produced evidence to support a
challenge to personal jurisdiction, a plaintiff has a duty to come forward with competent proof in
support of the jurisdictional allegations of the complaint.5 The court resolves all factual disputes
in favor of the plaintiff.6 Conflicting affidavits are also resolved in the plaintiff’s favor, and “the
plaintiff’s prima facie showing is sufficient notwithstanding the contrary presentation by the
moving party.”7 “In order to defeat a plaintiff’s prima facie showing of jurisdiction, a defendant
must present a compelling case demonstrating ‘that the presence of some other considerations
would render jurisdiction unreasonable.’”8
II.

Factual Background
Drawing all reasonable inferences in favor of Plaintiff, the following relevant facts are

taken from the Complaint, and the exhibits attached to the parties’ briefs. The Court does not
consider any general or conclusory allegations unsupported by affidavits or other evidence.
Plaintiff Tina Creech worked as a delivery driver at a Papa John’s restaurant located at
2530 South Seneca, Wichita, Kansas, 67217, from approximately May 2014 to August 2015.
Plaintiff alleges in the First Amended Complaint that the various corporate and individual
Defendants have “together owned and operated approximately 133 Papa John’s franchise stores,

Co. of Can., 149 F.3d 1086, 1091 (10th Cir. 1998).
4

Dudnikov v. Chalk & Vermilion Fine Arts, Inc., 514 F.3d 1063, 1070 (10th Cir. 2008) (citing Bell Atl.
Corp. v. Twombly, 550 U.S. 544 (2007)); Pytlik v. Prof’l Res., Ltd., 887 F.2d 1371, 1376 (10th Cir. 1989); Behagen
v. Amateur Basketball Ass’n of U.S.A., 744 F.2d 731, 733 (10th Cir. 1984), cert. denied, 471 U.S. 1010 (1985).
5

Pytlik, 887 F.2d at 1376; see also Shrader, 633 F.3d at 1248.

6

Dudnikov, 514 F.3d at 1070.

7

Behagen, 744 F.2d at 733.

8

OMI Holdings, 149 F.3d at 1091 (quoting Burger King Corp. v. Rudzewicz, 471 U.S. 462, 477 (1985)).

2

including stores located in Kansas, Arizona, California, Hawaii, Missouri and Texas,” and that
together Defendants used the “same flawed method to determine reimbursement rates” to
reimburse delivery drivers for the costs of the business use of their vehicles, thereby causing
their wages to fall below the federal minimum wage.9 Based on these alleged facts, Plaintiff
asserts a collective action under the Fair Labor Standards Act (“FLSA”) on behalf of herself and
other similarly situated delivery drivers employed by Defendants at their Papa John’s stores.10
Defendant Houston Pizza Venture, LP (“Houston Pizza”), is a Texas Limited Partnership
and has its principal place of business in Houston, Texas. Defendant HPV-C, LLC (“HPV”) is a
Texas limited liability company with its principal place of business in Houston, Texas. HPV is
the general partner of Houston Pizza.11
Houston Pizza and HPV operate Papa John’s restaurants in the Houston, Texas area.
They do not have an office in Kansas, nor do they own any interest in P.J. Wichita, LLC.
Houston Pizza and HPV did not employ Plaintiff or have business dealings in Kansas during
Plaintiff’s employment, and they did not share in the ownership of the Papa John’s store that
employed Plaintiff.
According to the P.J. Wichita Annual Report filed with the Kansas Secretary of State in
2013, Frank Carney and Terry Newman each owned more than 5% capital in P.J. Wichita.12
According to HPV’s Texas filings, Carney is a manager of HPV.13 Carney was also the manager
and president of Houston Pizza Venture, LLC prior to its conversion to Houston Pizza Venture,

9

Doc. 15 ¶ 1.

10

29 U.S.C. § 216(b).

11

Plaintiff voluntarily dismissed Defendant P.J. Nor-Cal, LLC on January 17, 2017. Doc. 35.

12

Doc. 29-1.

13

Docs.29-4, 29-5.

3

LP in 2000.14
III.

Discussion
“In a federal question case where a defendant resides outside the forum state, a federal

court applies the forum state’s personal jurisdiction rules.”15 To establish personal jurisdiction
over a defendant, plaintiff must show that jurisdiction is proper under the laws of the forum state
and that the exercise of jurisdiction would not offend due process.16 The Kansas long-arm
statute is construed liberally so as to allow jurisdiction to the full extent permitted by due
process, therefore the Court proceeds directly to the constitutional analysis.17
The due process analysis is comprised of two steps. First, the court must consider
whether the defendant has such minimum contacts with the forum state “that he should
reasonably anticipate being haled into court there.”18 If the requisite minimum contacts are
found, the Court will proceed to the second step in the due process analysis—ensuring that the
exercise of jurisdiction “does not offend ‘traditional notions of fair play and substantial
justice.’”19
“Minimum contacts” can be established in one of two ways, either generally or
specifically for lawsuits based on the forum-related activities:
General jurisdiction is based on an out-of-state defendant’s
“continuous and systematic” contacts with the forum state, and
14

See Docs. 29-2, 29-3.

15

PDK Labs, Inc. v. Friedlander, 103 F.3d 1105, 1108 (2d Cir. 1997) (quoting Mareno v. Rowe, 910 F.2d
1043, 1046 (2d Cir. 1990)).
16

Intercon, Inc. v. Bell Atl. Internet Sols., Inc., 205 F.3d 1244, 1247 (10th Cir. 2000).

17

Federated Rural Elec. Ins. Corp. v. Kootenai Elec. Coop., 17 F.3d 1302, 1305 (10th Cir. 1994) (citing
Volt Delta Res., Inc. v. Devine, 740 P.2d 1089, 1092 (Kan. 1987)).
18

Emp’rs Mut. Cas. Co. v. Bartile Roofs, Inc., 618 F.3d 1153, 1159–60 (10th Cir. 2010) (citing OMI
Holdings, Inc. v. Royal Ins. Co. of Can., 149 F.3d 1086, 1091 (10th Cir. 1998)).
19

See World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 292 (1980) (quoting Int’l Shoe Co. v.
Washington, 326 U.S. 310, 316 (1945)).

4

does not require that the claim be related to those contacts.
Specific jurisdiction, on the other hand, is premised on something
of a quid pro quo: in exchange for “benefitting” from some
purposive conduct directed at the forum state, a party is deemed to
consent to the exercise of jurisdiction for claims related to those
contacts.20
Specific jurisdiction exists over a nonresident defendant “if the defendant has ‘purposefully
directed’ his activities at residents of the forum, and the litigation results from alleged injuries
that ‘arise out of or relate to’ those activities.”21 For jurisdictional purposes, the court must
evaluate “[e]ach defendant’s contacts with the forum State . . . individually.”22
A.

Whether “Joint Employer” and “Single Integrated Enterprise” Theories
Apply to Determine Personal Jurisdiction

The Kansas long-arm statute applies to a non-resident company if it is an alter ego of a
Kansas resident company.23 Plaintiff argues that this rule extends to non-resident companies that
are “joint employers,” or part of a “single integrated enterprise” or a “single employer” with a
Kansas resident company. There is no binding authority in the Tenth Circuit that personal
jurisdiction can extend to a nonresident company under either theory.24 Courts outside of the
Tenth Circuit are split on whether a joint employer or single integrated enterprise theory of
liability under the FLSA applies to the personal jurisdiction inquiry. Some courts treat personal
jurisdiction and liability as separate issues; others apply these tests to both personal jurisdiction

20

Dudnikov, 514 F.3d at 1078 (citations omitted).

21

OMI Holdings, 149 F.3d at 1091 (quoting Burger King Corp. v. Rudzewicz, 471 U.S. 462, 472 (1985)).

22

Calder v. Jones, 465 U.S. 783, 790 (1984) (citation omitted).

23

See Luc v. Krause Werk GMBH & Co., 289 F. Supp. 2d 1282, 1290 (D. Kan. 2003).

24

See Mendez v. Pure Foods Mgmt. Group, Inc., No. 3:14-cv-1515, 2016 WL 183473 at *2–6 (D. Conn.
Jan. 14, 2016).

5

and liability.25 The Court is most persuaded by those cases which treat personal jurisdiction and
liability as distinct issues and follows that line of authority.
The courts applying an employer liability test to determine personal jurisdiction have
largely done so without analysis. In Hajela v. ING Groep, N.V., 26 for example, the United States
District Court for the District of Connecticut held that a former employee made a prima facie
showing of joint employment by an out-of-state corporation. Noting the test used to establish a
joint employer relationship was “for the purposes of assigning liability,” the court nonetheless
found that the plaintiff made a prima facie showing of personal jurisdiction where that liability
test was met.27 Similarly, in Berry v. Lee,28 the Northern District of Texas found the plaintiff
demonstrated a prima facie case of personal jurisdiction over out-of-state defendants using
theories of liability; the court further noted that this is a “less stringent” standard than the
plaintiff needs at trial.29
The Court is more persuaded by the cases where personal jurisdiction and liability
remained distinct inquiries because they include robust analysis about the important distinctions
between liability and personal jurisdiction standards. While personal jurisdiction derives from a
constitutional inquiry of due process, liability theories arise from federal or state statutes.30 The
Seventh Circuit explained this distinction in the context of the Multiemployer Pension Plan

25

See In re Enter. Rent-A-Car Wage & Hour Empl. Practices Litig., 735 F. Supp. 2d 277, 326–28 (W.D.
Penn. 2010) (providing an overview of other courts’ approaches to applying liability theories to personal jurisdiction
and treating liability and personal jurisdiction as distinct inquiries).
26

582 F. Supp. 2d 227 (D. Conn. 2008).

27

See id. at 236, 238.

28

428 F. Supp. 2d 546, 553, 556 (N.D. Tex. 2006) (“Texas courts rely on the single business enterprise
theory to assert jurisdiction.”) (citations omitted).
29

Id. (citation omitted).

30

See Mendez, 2016 WL 183473 at *5.

6

Amendments Act of 1980 to ERISA.31 An analysis of personal jurisdiction ends when a court
finds a defendant does not have sufficient minimum contacts with the forum state “without
examining the plaintiff’s causes of action.”32 The substantive law that applies to a plaintiff’s
claims, and thus to the employer liability theories, are irrelevant to the personal jurisdiction
analysis “because a state or federal statute cannot transmogrify insufficient minimum contacts
into a basis for personal jurisdiction by making these contacts elements of a cause of action.”33
Moreover, legislatures may enact different standards for what constitutes an employer or
integrated enterprise for the purpose of liability, which would result in inconsistent
determinations of personal jurisdiction if the Court were to find personal jurisdiction arising
from employer liability theories.34 Personal jurisdiction, on the other hand, is a consistent
standard that does not change based on the law a case hinges on.35 This Court is persuaded by
the many decisions holding, consistent with the Seventh Circuit, that the personal jurisdiction
analysis should not be augmented by statutory liability standards that may apply to out-of-state
defendants.36 Accordingly, this Court will not apply either the “joint employer” or “single

31

Cent. States Se. & Sw. Areas Pension Fund v. Reimer Express World Corp., 230 F.3d 934, 944–45 (7th
Cir. 2000).
32

Id. at 944.

33

Id. at 945.

34

Mendez, 2016 WL 183473 at *5.

35

Id. (“But legislators do not have that same flexibility to fashion a more relaxed standard of personal
jurisdiction.”).
36

See e.g., United Elec., Radio & Mach. Workers v. 163 Pleasant St. Corp., 960 F.2d 1080, 1096 (1st Cir.
1992) (stating, in dicta, that the court was “highly skeptical” of plaintiff’s contention that jurisdiction was
exercisable under an “integrated enterprise” theory because it lacked support in case law “for transplanting this
theory from the liability context to the jurisdictional context.”); Mendez, 2016 WL 183473, at *5 (“[N]one of the
possible ‘single integrated enterprise’ or ‘dual employer’ tests . . . — which might be appropriate for determining
liability at a later stage of this litigation—are appropriate for determining in the first instance whether this court can
exercise personal jurisdiction over the non-Connecticut defendants.”); Walker v. THI of N.M. at Hobbs Ctr., 801 F.
Supp. 2d 1128, 1153–54 (D.N.M. 2011) (declining to use the single-employer test in its personal jurisdiction
analysis because “the single-integrated enterprise theory derives from federal law regarding Title VII, a different
body of law than regarding minimum contacts.”).

7

integrated enterprise” theory to determine whether there is personal jurisdiction over the out-ofstate Defendants in this matter.
B.

Whether Plaintiff has Made a Prima Facie Showing of Personal Jurisdiction

Courts that have rejected employer liability theories to establish personal jurisdiction
instead apply a more generic “‘agency test’ to determine whether to impute the jurisdictional
contacts of the subsidiary to the parent defendant.”37 This is akin to the veil-piercing theory used
to disregard the corporate entity in situations where corporations are only facially separate
identities, which is essentially Plaintiff’s theory in this case.38 Kansas courts have used such an
alter ego theory to establish personal jurisdiction over a defendant.39 Under the alter ego theory,
“the corporate entity is disregarded and liability fastened on an individual who uses the
corporation merely as an instrumentality to conduct his own personal business.”40 Disregarding
the corporate entity is justified “if separation of the two entities has not been maintained and
injustice would occur to third parties if the separate entity were recognized.”41
The following ten factors are used to evaluate whether to disregard a corporate entity:
(1) whether the parent corporation owns all or a majority of the
capital stock of the subsidiary; (2) whether the corporations have
common directors or officers; (3) whether the parent finances the
subsidiary; (4) whether the parent corporation subscribed to all the
capital stock of the subsidiary or otherwise causes its
incorporation; (5) whether the subsidiary has grossly inadequate
capital; (6) whether the parent corporation pays the salaries or
expenses or losses of the subsidiary; (7) whether the subsidiary has
37

See Mendez, 2016 WL 183473 at *5–6 (quoting Price v. Waste Mgmt., Inc., No. ELH–13–02535, 2014
WL 1764722, at *11 (D. Md. Apr. 30, 2014); see also Cent. States Se. & Sw. Areas Pension Fund, 230 F.3d at 943–
44 (explaining that corporate affiliation is not sufficient to establish personal jurisdiction “where corporate
formalities are substantially observed and the parent does not exercise an unusually high degree of control over the
subsidiary.”).
38

See Mendez, 2016 WL 183473, at *5–6.

39

Luc v. Krause Werk GMBH & Co., 289 F. Supp. 2d 1282, 1288 (D. Kan. 2003)..

40

Id. at 1289 (quoting Quarles v. Fuqua Indus., Inc., 504 F.2d 1358, 1362 (10th Cir. 1974)).

41

Id. (quoting Quarles, 504 F.2d at 1362).

8

substantially no business except with the parent corporation or no
assets except those conveyed to it by the parent corporation; (8)
whether in the papers of the parent corporation, and in the
statements of its officers, the subsidiary is referred to as such or as
a department or division; (9) whether the directors or executives of
the subsidiary do not act independently in the interest of the
subsidiary but take direction from the parent corporation; and (10)
whether the formal legal requirements of the subsidiary as a
separate and independent corporation are not observed.42
Plaintiff has failed to demonstrate a prima facie case of personal jurisdiction over
Defendants under an alter ego theory. Defendants challenged personal jurisdiction and
produced a declaration from the Vice President for Houston Pizza, Mr. Billy Robinett, stating
that HPV does not have an office in Kansas, own any interest in P.J. Wichita, L.L.C., did not
employ Plaintiff or have business dealings in Kansas during Plaintiff’s employment, and did not
share in ownership of the Wichita, Kansas store where Plaintiff worked with P.J. Wichita.43 In
response to this declaration, Plaintiff submits Secretary of State filings pertaining to P.J. Wichita,
HPV, and Houston Pizza,44 and a website page stating that Carney operates a franchise of Papa
John’s under umbrella companies including P.J. Wichita and Houston Pizza.45
Although no single factor or combination of factors is required to apply the alter ego
doctrine,46 Plaintiff’s factual allegations and evidence fails to demonstrate that any of these
factors are present in this case, particularly in light of Robinett’s unrebutted declaration.
Robinett’s declaration asserts that the relationship between P.J. Wichita and Defendants does not
meet any of the requisite factors considered to disregard the corporate entity under the alter ego

42

Id. (citations omitted).

43

Doc. 27-1.

44

Docs. 29-1, 29-2, 29-3, 29-4.

45

Doc. 29-5.

46

See Luc, 289 F. Supp. 2d at 1289 (quoting Doughty v. CSX Transp., Inc., 905 P.2d 106, 114 (Kan. 1995)
(citation omitted)).

9

theory. Moreover, Plaintiff’s evidence merely demonstrates that Carney owns P.J. Wichita,
L.L.C., Houston Pizza, and HPV. But common ownership alone is insufficient to show that
these corporate entities should be disregarded. In light of Robinett’s declaration denying the
involvement of Houston Pizza and HPV in the operations of P.J. Wichita, L.L.C., Plaintiff’s
evidence does not serve as competent proof that the Court can exercise personal jurisdiction
under an alter ego theory. Therefore, Plaintiff fails to establish a prima facie case of personal
jurisdiction over these Defendants, and the Court grants their motion to dismiss on this basis.
Assuming arguendo that Plaintiff could establish personal jurisdiction under a “joint
employer” or “single integrated enterprise” theory of liability, the Court finds Plaintiff would fail
to meet the burden of providing competent proof to establish personal jurisdiction. Although the
Court found Plaintiff sufficiently pled the joint employer and single integrated enterprise theories
of liability for purposes of amending the complaint,47 it does not necessarily follow that the same
factual allegations can sustain a motion to dismiss for lack of personal jurisdiction. The Court
determined Plaintiff alleged sufficient facts that, assumed to be true, could support a plausible
claim for relief under the FLSA against these Defendants.48 To establish personal jurisdiction,
however, Plaintiff must provide competent proof of minimum contacts because Defendants
submitted a declaration directly challenging Plaintiff’s allegations of personal jurisdiction.
Under the FLSA, an “employer” subject to the Act is defined as “any person acting
directly or indirectly in the interest of an employer in relation to an employee.”49 Under a
Department of Labor (“DOL”) regulation interpreting the FLSA, joint employers exist “where

47

See Creech v. P.J. Wichita L.L.C., No. 16-2312-JAR-GEB, 2016 WL 4702376 at *3–4 (D. Kan. Sept. 8,

48

Id.

49

29 U.S.C. § 203(d).

2016).

10

the employee performs work which simultaneously benefits two or more employers.”50 A joint
employment relationship generally exists in situations: (1) where employers arrange to share the
employee’s service; (2) where one employer acts in the interest of the other employer in relation
to the employee; or (3) where employers are not entirely dissociated with respect to a particular
employee and may share control of the employee, either directly or indirectly, because of the fact
that one employer is controlled by or under common control with the other employer.51 To
determine the existence of joint employers, courts generally look to whether the alleged joint
employers “exercise[d] significant control over the same employees.”52 Courts recognize
independent entities as joint employers if the entities “share or co-determine those matters
governing the essential terms and conditions of employment.”53
Robinett attests in his declaration that Pizza Venture and HPV are not joint employers
with P.J. Wichita. He specifically denies that these Defendants own an interest in either P.J.
Wichita or the Wichita Papa John’s where Plaintiff worked. Robinett also denies that these
Defendants employed Plaintiff and that Defendants had business dealings in Kansas during
Plaintiff’s employment. These statements demonstrate a lack of control over Plaintiff’s
employment. Plaintiff has not provided any conflicting declaration that would require the Court
to resolve a factual dispute in Plaintiff’s favor on this point. Because Defendants produced
evidence contradicting Plaintiff’s allegations that Defendants exercised control over employees
50

29 C.F.R. § 791.2(b)(3).

51

Id. This Court grants deference to the DOL’s regulations on the issue of when a joint employer
relationship exists. See Chevron, USA, Inc. v. Nat. Res. Def. Council, Inc., 467 U.S. 837, 842–43 (1984). The
regulation is based on a permissible reading of the statute, and the issue is not directly addressed by Congress in the
statute. Accord Matrai v. DirecTV, 168 F. Supp. 3d 1347, 1351 (D. Kan. 2016) (quoting Harris v. Universal
Contracting, LLC, No. 13-CV-00253 DS, 2014 WL 2639363, at *5 (D. Utah Jun. 12, 2014)).
52

Bristol v. Bd. of Cty. Comm’rs of Cty. of Clear Creek, 312 F.3d 1213, 1218 (10th Cir. 2002) (quoting
Graves v. Lowery, 117 F.3d 723, 727 (3d Cir. 1997)); see also Matrai v. DirecTV, 168 F. Supp. 3d 1347, 1351 (D.
Kan. 2016).
53

Bristol, 312 F.3d at 1218 (quoting Virgo v. Riviera Beach Assocs., Ltd., 30 F.3d 1350, 1360 (11th Cir.

1994)).

11

and benefited from employees’ work, Plaintiff must come forward with competent proof
supporting her jurisdictional allegation. Plaintiff’s evidence in the form of filings with the
Kansas and Texas Secretary of States, and the encyclopedic website describing Carney’s
franchises, does not amount to competent proof that would establish a prima facie case of joint
employment. This evidence provides no information concerning the relationship between
Defendants and P.J. Wichita, it does not demonstrate that Defendants made employment
decisions regarding Plaintiff, and it lacks any information suggesting that Defendants benefitted
from Plaintiff’s employment.
Under the integrated enterprise test,54 the Court considers the following four factors: (1)
interrelation of operations, (2) centralized control of labor relations, (3) common management,
and (4) common ownership or financial control.55 Evidence of interrelated operations includes
intermingling of payroll and finances; common employees, headquarters, and advertising; and
shared services, equipment and office space.56 Again, Plaintiff’s allegation that Houston Pizza
and HPV operated and maintained their principal places of business in the same office in
Wichita, Kansas is directly contradicted by Robinett’s declaration. Plaintiff submits business
filings to show that Carney has an ownership interest in P.J. Wichita, and is the “Manager and
President of HPV-C, LLC,” and an on-line biography stating that he operates a franchise of Papa
John’s outlets “under the umbrella of four different companies” including Houston Pizza and P.J.
54

The joint employer and single employer theory of liability are distinct, and typically do not apply as
alternative theories. See Bristol v. Bd. of Cty. Comm’rs of Cty. of Clear Creek, 312 F.3d 1213, 1218 (10th Cir.
2002) (citations omitted); see also Mendez, 2016 WL 183473 at *2–4 (explaining the difference between a single
employer and joint employer relationship). Whereas the single integrated enterprise (or single employer) test “asks
whether two nominally separate entities should in fact be treated as an integrated enterprise,” the joint employer test
“assumes that the alleged employers are separate entities.” Bristol, 312 F.3d at 1218 (citations omitted).
Nonetheless, the Court has considered Plaintiff’s claim under both theories.
55

See Bristol, 312 F.3d at 1220 (citing EEOC v. Wooster Brush Co. Emps. Relief Ass’n, 727 F.2d 566, 571
(6th Cir. 1984)) (applying to Title VII claims); Mendez, 2016 WL 183473, at *4 (applying test to FLSA claims
based on district court precedent within the Second Circuit).
56

Rowland v. Franklin Career Servs, LLC, 272 F. Supp. 2d 1198, 1201 (D. Kan. 2003).

12

Wichita. But these exhibits do not demonstrate an interrelation of operations between the
Defendant companies. They merely show that Carney has some ownership and operational
interest in the various business entities.
The second factor, centralized control over labor relations, is “an important factor” in
applying the integrated enterprise test.57 To demonstrate centralized control, Plaintiff must show
a single entity made day-to-day employment decisions for the entities.58 Plaintiff does not offer
any proof that a single entity made the day-to-day employment decision for these business
entities. Instead, to challenge Robinett’s declaration that Houston Pizza and HPV did not
employ Plaintiff or share ownership of the Wichita Papa John’s store, Plaintiff relies upon
allegations in the First Amended Complaint that all Defendants used the same flawed policy and
method to reimburse delivery drivers. However, the existence of common policies is not enough
to demonstrate centralized control in absence of evidence indicating an entity’s role in
implementing or affecting the policies.59 Therefore, even assuming the truth of these allegations,
they would not be sufficient to demonstrate that the second factor of the integrated enterprise test
weighs in Plaintiff’s favor.
The third factor, common management, focuses on whether the entities have common
directors and officers.60 The existence of one common manager is insufficient to establish a
disputed material fact under this prong, but the existence of common officers becomes relevant if
57

Id. at 1202 (citations omitted).

58

See id. (citing Armbruster v. Quinn, 711 F.2d 1332, 1338–39 (6th Cir. 1983)) (finding centralized control
where common officer in parent and subsidiary company approved all hiring decisions); Baker v. Stuart Broad Co.,
560 F. 2d 389, 392 (8th Cir. 1977) (finding centralized control where parent company issued rules on employment
practices for subsidiaries to follow); Smith v. Jones Warehouse, Inc., 590 F. Supp. 1206, 1208 (N.D. Ill. 1984)
(finding centralized control where parent company issued personnel policies, paid subsidiary’s non-union
employees, was listed as the employer on subsidiary’s non-union employees W-2 forms, and terminated a subsidiary
employee).
59

See Lockard v. Pizza Hut, Inc., 162 F.3d 1062, 1071 (10th Cir. 1998).

60

Rowland, 272 F. Supp. 2d at 1203 (citation omitted).

13

the officers were involved in management.61 Plaintiff presented documents showing that Frank
Carney has financial interests in P.J. Wichita, Houston Pizza, and HPV. He serves as a member
of P.J. Wichita and as the manager and president of Houston Pizza Ventures and HPV.
However, Plaintiff does not offer proof that Carney was involved in the management of all three
companies—she asks the Court to infer this fact from his titles. The Court finds that this is not a
reasonable inference in light of Robinett’s declaration that explicitly disclaims common
management.
Finally, the Court considers the fourth factor of the single integrated enterprise test,
common ownership. Common ownership alone does not establish that separate entities should
be considered an integrated enterprise or single employer.62 Plaintiff’s evidence of the Secretary
of State filings and Carney’s Papa John’s franchise demonstrates overlap in ownership between
HPV, and Kansas-based Defendant P.J. Wichita. However, Plaintiff does not offer any other
evidence to suggest something more than common ownership. Moreover, in light of the Robinett
declaration, common ownership by Carney is not enough to establish that the companies are a
single integrated enterprise.
In sum, the Court declines to apply an FLSA employer-liability theory to determine the
jurisdictional question in this matter. Under the applicable agency test, Defendants’ motion to
dismiss must be granted. Alternatively, even if the Court did apply the employer-liability tests
urged by Plaintiff, the Court would grant Defendants’ motion to dismiss on the basis that
Plaintiff fails to submit competent proof in support of her jurisdictional allegations in the face of
the evidence submitted by Defendants that directly contradicts Plaintiff’s employer-liability
theories of jurisdiction.
61

Lockard, 162 F.3d at 1071.

62

Id. (citing Frank v. U.S. West, Inc., 3 F.3d 1357, 1064 (10th Cir. 1993)).

14

IT IS THEREFORE ORDERED BY THE COURT that Defendants Houston
Pizza Venture, LP and HPV-C, LLC’s Motion to Dismiss (Doc. 26) is granted.
IT IS SO ORDERED.
Dated: March 8, 2017
S/ Julie A. Robinson
JULIE A. ROBINSON
UNITED STATES DISTRICT JUDGE

15