Biggio et al v. H2O Hair Inc. et al

Filing 54

ORDER AND REASONS granting 47 Motion for Partial Dismissal of First Amended Complaint. Signed by Judge Ivan L.R. Lemelle on 5/27/2016. (ijg)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
CARRIE BIGGIO, ET AL.

CIVIL ACTION

VERSUS

NO. 15-6034

H20 HAIR INC., ET AL.

SECTION "B"(2)
ORDER AND REASONS

Before the Court is Defendants’ “Motion for Partial Dismissal
of

First

Amended

Complaint”

seeking

dismissal

of

Plaintiffs’

claims under the Louisiana Unfair Trade Practices Act. Rec. Doc.
47. Plaintiffs timely filed an opposition memorandum. Rec. Doc.
48. Thereafter, the Court granted leave for Defendants to file a
reply. See Rec. Doc. 53. For the reasons set forth below,
IT IS ORDERED that the motion is GRANTED.
I.

FACTUAL BACKGROUND AND PROCEDURAL HISTORY
As this Court has previously discussed, this case arises out

of Plaintiffs employment

as hair stylists

at H2O Hair, Inc.

(“H2O”). Plaintiffs assert claims individually and on behalf of
all those similarly situated under the Fair Labor Standards Act
(“FLSA”) for unpaid minimum wages and overtime wages among other
state law claims. At issue here are Plaintiffs’ claims under the
Louisiana Unfair Trade Practices Act (“LUTPA”) related to Training
Contracts and Non-Compete Agreements entered into by the parties,
which

they

Plaintiffs’

first
First

asserted
Amended

in

their

Complaint

1

First

Amended

alleges

that

Complaint.
Defendants

required them to sign a Training Agreement and Contract, requiring
H2O to train the Plaintiffs as part of an apprenticeship program,
which Defendants unilaterally valued at $8,000. Rec. Doc. 45 at 4.
Additionally, the contract purportedly required Plaintiffs

to

either maintain employment with H2O for thirty six months after
the end of the training program or repay the $8,000 value of the
program plus attorneys’ fees and costs. Id. Plaintiffs also claim
that they were not compensated for the training sessions. Id.
This motion derives from a previous Order and Reasons issued
by this Court that granted Plaintiffs leave to file an amended
complaint so that they could fully address certain claims for “gap
wages,” which they first raised in an opposition to an earlier
motion

filed

by

Defendants.

See

Rec.

Doc.

44.

Apparently,

Plaintiffs claims for gap wages had no basis in law or fact,1
because their amended complaint makes absolutely no reference to
such claims. Despite this, Plaintiffs took advantage of the order
granting leave to file to assert new claims under LUTPA.2 The Court
now considers Defendants’ motion to dismiss those claims.

Plaintiffs’ counsel is strongly reminded to review the parameters of Federal
Rule of Civil Procedure 11 regarding representations made to the Court and the
potential for sanctions based upon misrepresentations.
2 While
this Court’s granting of leave to file was expressly limited to
Plaintiffs’ reference to claims for gap wages, this Court will address the
viability of Plaintiffs’ claims under LUTPA because the amended complaint was
still filed prior to the deadline for amending pleadings pursuant to the Court’s
scheduling order. See Rec. Doc. 49.
1

2

II.

THE PARTIES’ CONTENTIONS

Defendants move for dismissal of Plaintiffs’ LUTPA claims
under Rules 12(b)(1) and 12(b)(6) of the Federal Rules of Civil
Procedure. First, Defendants contend that this Court lacks subject
matter jurisdiction over the LUTPA claims because they do not arise
out of a common nucleus of operative fact with the FLSA claims.
Rec.

Doc.

47-1

at

3-7.

Additionally,

Defendants

argue

that

Plaintiffs cannot maintain their claims under LUTPA because they
have not alleged an “ascertainable loss of money or property”
resulting from the unfair trade practices. Rec. Doc. 47-1 at 7-8.
Finally, Defendants argue that Plaintiffs lack standing to assert
LUTPA claims in this proceeding because LA. STAT. ANN. § 51:1409
expressly

prohibits

parties

form

bringing

LUTPA

claims

in

a

representative capacity. Rec. Doc. 47-1 at 6.
In opposition, Plaintiffs argue that the LUTPA claims fall
within the Court’s supplemental jurisdiction because they are
inextricably intertwined with the FLSA claims. Rec. Doc. 48 at 24. Plaintiffs further contend that they have properly pled all
elements

of

their

LUTPA

claims,

identifying

the

following

ascertainable losses pled in their amended complaint: (1) loss of
earning potential due to their inability to seek other employment;
(2) fees charged by Defendants for books used in the training
programs; and (3) their commissions and wages were arbitrarily
decreased.

Rec.

Doc.

48

at

5.
3

Finally,

Plaintiffs

address

Defendants’ standing argument by claiming that the individual
Plaintiffs achieve standing in their own right by opting in to the
action. Rec. Doc. 48 at 4. They do not address the seemingly clear
language of LA. STAT. ANN. § 51:1409, which states that such claims
may not be brought in a representative fashion.
The Defendants’ reply solely addresses the issue of LUTPA’s
preemption period. See Rec. Doc. 53. The parties briefly debate
whether the one-year period discussed in LA. STAT. ANN. § 51:1409
is a preemptive period or a prescriptive period, but the Court
need not address that issue here because Defendants do not actually
seek dismissal on preemption or prescription grounds.3 See Rec.
Doc. 47.
III. LAW AND ANALYSIS
Defendants

seek

dismissal

under

both

Rules

12(b)(1)

and

12(b)(6) of the Federal Rules of Civil Procedure. “The standard of
review for a Rule 12(b)(1) motion to dismiss for lack of subject
matter jurisdiction is the same as that for a Rule 12(b)(6)
motion.” SPSL OPOBO Liberia, Inc. v. Mar. Worldwide Servs., Inc.,
No. 07-3355, 2008 WL 2079918, at *1 (E.D. La. May 15, 2008) (citing
Benton

v.

United

States,

960

F.2d

19,

21

(5th

Cir.

1992).

Accordingly, this Court must accept all well-pleaded facts as true
and view them in the light most favorable to the non-moving party.

Defendants only argue that the Court should determine whether the period is
preemptive because it may become relevant later on if the claims persist.
3

4

See Baker v. Putnal, 75 F.3d 190, 196 (5th Cir. 1996). “To survive
a motion to dismiss, 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)
(internal quotation marks omitted). A claim is facially plausible
“when the plaintiff pleads factual content that allows the court
to draw the reasonable inference that the defendant is liable for
the misconduct alleged.” Iqbal, 556 U.S. at 678. As it appears
that supplemental jurisdiction exists over the claim, the Court
will begin by addressing Defendants’ standing argument.
Under the LUTPA, “any person who suffers ascertainable loss
of money or movable property . . . as a result of the use . . . of
an unfair or deceptive method, act, or practice . . . may bring an
action individually but not in a representative capacity to recover
actual damages.” LA. STAT. ANN. § 51:1409(A) (emphasis added).
Defendants

argue

that

this

provision

deprives

Plaintiffs

of

standing to bring LUTPA claims in this conditionally-certified
collective action. Rec. Doc. 47-1 at 6. Plaintiffs seemingly
contend that they are not proceeding in a representative capacity
because this is a collective action rather than a class action
where plaintiffs opt in to the litigation. Rec. Doc. 48 at 4.
Plaintiffs misconstrue the nature of the FLSA collective action.
While collective actions differ from class actions, the fact
that individuals must opt-in to the litigation rather than opt5

out does not change their status as representative actions. See
Myers v. Hertz Corp., 624 F.3d 357, 542 (2d Cir. 2010) (describing
FLSA collective actions as representative actions). It is clearly
established that named plaintiffs in collective actions act as
representatives for the opt-in plaintiffs. See Mooney v. Aramco
Servs. Co., 54 F.3d 1207, 1214 (5th Cir. 1995) (describing the
original named plaintiffs as class representatives), overruled on
other grounds by Desert Palace v. Costa, 539 U.S. 90 (2003); Sandoz
v. Cingular Wireless, LLC, 553 F.3d 913, 919 (5th Cir. 2008) (“the
language of § 216(b) and the cases construing that provision
demonstrate that Sandoz cannot represent any other employees until
they affirmatively opt in to the collective action.”); McGlathery
v. Lincare, Inc., No. 13-1255, 2014 WL 1338610, at *3 (M.D. Fla.
Apr. 3, 2014) (citing the 11th Circuit for the holding that—“where
a class is conditionally certified and the motion to decertify
denied—the

opt-in

represented

by

plaintiffs,

Biggio

plaintiffs

the

named
and

remain

in

the

plaintiffs.”).

Luminais,

bring

action

and

are

Here,

the

named

their

claims

as

representatives on behalf of all opt-in plaintiffs. This finding
is also supported by the language of the complaint, entitled “First
Amended Complaint—Collective Action,” where Plaintiffs make all
allegations and assert all claims “on their own behalf and on
behalf of those similarly situated.” Rec. Doc. 45 at 1.

6

Under the unambiguous terms of the Louisiana Unfair Trade
Practices Act, Biggio and Luminais may not maintain a claim under
the

Act

in

this

case

because

they

are

proceeding

in

a

representative capacity. LA. STAT. ANN. § 51:1409(A). Accordingly,
the Court must dismiss that claim.
IV.

CONCLUSION

For the reasons outlined above,
IT IS ORDERED that the motion is GRANTED.
New Orleans, Louisiana, this 27th day of May, 2016.

____________________________
UNITED STATES DISTRICT COURT

7