Castellanos v. Saints & Santos Construction, LLC et al

Filing 24

ORDER AND REASONS granting in part and denying in part 19 Motion to Dismiss for Failure to State a Claim, dismissing without prejudice claims against Defendant Santamaria for insufficient service. Signed by Judge Ivan L.R. Lemelle on 6/20/2016. (ijg)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
JOSE CASTELLANOS

CIVIL ACTION

VERSUS

NO. 16-2501

SAINTS & SANTOS CONSTRUCTION,
L.L.C., ET AL.

SECTION “B”(2)

ORDER AND REASONS*
I.

NATURE OF MOTIONS AND RELIEF SOUGHT
Before

the

Court

is

Defendants’,

Saints

&

Santos

Construction, LLC (“Saints & Santos”), Wiliomar Oliveira, and Jose
Santamaria, “Exception of Improper Service and No Cause of Action”
(Rec. Doc. 19), treated as a motion under the Federal Rules of
Civil Procedure.1
Castellanos,

Also before the Court is Plaintiff’s, Jose

responsive

pleadings

thereto

(Rec.

Doc.

20).

Defendants seek dismissal of Plaintiff’s claims under the Fair
Labor

Standards

Defendants

seek

Act

(“FSLA”),

involuntary

29

U.S.C

dismissal

§

201.
with

Specifically,
prejudice

of

Plaintiff’s Complaint against Defendant Santamaria for improper
service pursuant to Rule 12(b)(5),and against all three defendants
for failure to state a cause of action pursuant to Rule 12(b)(6).
For the reasons stated below, IT IS ORDERED that the Motion
is GRANTED in part and DENIED in part.

*

We are grateful for work on this matter by Michael W. Moore, Jr., a Loyola
University New Orleans College of Law extern with our Chambers.
1 “Exceptions” are the state court counterparts and should not be used in the
future here.

II.

FACTS AND PROCEDURAL HISTORY
Defendants Oliveira and Santamaria are owners of Saints &

Santos, who Plaintiff alleges had the ability to hire and fire all
Saints & Santos workers. (Rec. Doc. 14 at 1-2). In June 2015,
Plaintiff was hired by Saints & Santos. (Rec. Doc. 14 at 5).
Plaintiff

installed,

painted,

and

finished

drywall

for

the

Defendant in various sites throughout Louisiana. (Rec. Doc. 14 at
5). Plaintiff was paid with two separate checks, one for forty
hours at a rate of $16 per hour, and another for any time in excess
of the forty hours. (Rec. Doc. 14 at 5). All checks bore the name
of Saints & Santos. (Rec. Doc. 14 at 6).
Plaintiff alleges that Defendants are

“employers” within the

meaning of the FLSA, 29 U.S.C §§ 203(d), (r)(1), and that the
Defendants

are

an

enterprise

engaged

in

commerce

or

in

the

production of goods for commerce under the FLSA, 29 U. S. C §
203(s)(1), due to their business of constructing various buildings
in the Greater New Orleans area. (Rec. Doc. 20 at 2). In his
complaint, Plaintiff alleges that he worked approximately fiftyfive to sixty hours a week, and that Defendants never paid him at
the required rate, of one and a half times his hourly rate or $24,
for

any

hours

worked

in

excess

of

forty;

thus

willfully

disregarding their obligations under the FSLA. (Rec. Doc. 14 at
2). Plaintiff likewise maintains that it was the customary practice
of Saints & Santos to neglect their obligations under the FSLA,

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and that there are other similarly situated individuals. (Rec.
Doc. 14 at 2). Plaintiff filed the present action on March 28,
2016, seeking on behalf of himself and all others similarly
situated, unpaid overtime wages, liquidated damages, attorney’s
fees, and any other general and equitable relief that the court
finds reasonable. (Rec. Doc. 1 at 1).
III. CONTENTIONS OF THE PARTIES
A. Contentions of Movants
Defendants contend that Plaintiff improperly served Defendant
Santamaria in accordance with Federal Rule of Civil Procedure
12(b)(5), thus warranting his dismissal from the suit. Defendants
further aver that Plaintiff failed to state a cause of action under
which adequate relief may be granted, therefore concluding that
the entire suit should be dismissed in accordance with Fed. R.
Civ. P. 12(b)(6). Defendants argue that such a dismissal is
warranted because Plaintiff failed to show that Defendants are
employers under the meaning of the FSLA. In the alternative,
Defendants maintain that the suit should be dismissed against the
individual

Defendants

because

Plaintiff

failed

to

pierce

the

corporate veil, and consequently cannot sue Defendants Oliveira or
Santamaria individually.
B. Contentions of Opponent
Plaintiff does not oppose Defendants’ 12(b)(5) motion to
dismiss Defendant Santamaria for insufficient service of process.

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However, Plaintiff argues that he adequately stated a cause of
action, as he satisfied all four requirements for alleging a claim
for unpaid overtime wages under the FLSA. Plaintiff additionally
contends

that

Defendants’

third

contention

was

a

fundamental

misunderstanding of federal law, and that under the FSLA, a
plaintiff is not required to pierce the corporate veil.
IV.

LAW AND ANALYSIS
A. Motion to Dismiss Pursuant to Rule 12(b)(5)
Under

the

Federal

Rules,

dismissal

is

warranted

for

insufficient service of process. In the absence of valid service
of process, proceedings against a party are void. Aetna Business,
Inc. v. Universal Décor & Interior Design, 635 F. 2d 434, 435 (5th
Cir. 1981). Because both parties agree that service was improper,
Defendant Santamaria is hereby dismissed from the suit without
further discussion.
B. Motion to Dismiss Pursuant to Rule 12(b)(6)
The Federal Rules also allow a party to move for dismissal of
a complaint for failure to state a claim upon which relief can be
granted. Fed. R. Civ. P. 12(b)(6). Such a motion is rarely granted
because it is viewed with disfavor. See Lowrey v. Tex. A & M Univ.
Sys. 117 F.3d 242, 247 (5th Cir. 1997) (quoting Kaiser Aluminum &
Chem. Sales, Inc. v. Avondale Shipyards, Inc., 677 F.2d 1045, 1050
(5th Cir. 1982)). When reviewing a motion to dismiss, courts must
accept all well-pleaded facts as true and view them in the light

4

most favorable to the non-moving party. Baker v. Putnal, 75 F.3d
190, 196 (5th Cir. 1996). However, “[f]actual allegations must be
enough to raise a right to relief above the speculative level.”
Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007).
“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.” Gonzales v. Kay, 577 F.3d
600, 603 (5th Cir. 2009) (quoting Ashcroft v. Iqbal, 129 S. Ct.
1937, 1949 (2009)) (internal quotation marks omitted). The Supreme
Court in Iqbal explained that Twombly promulgated a “two-pronged
approach” to determine whether a complaint states a plausible claim
for relief. Iqbal, 129 S. Ct. at 1950. First, courts must identify
those pleadings that, “because they are no more than conclusions,
are not entitled to the assumption of truth.” Id. Legal conclusions
“must

be

supported

by

factual

allegations.”

Id.

“Threadbare

recitals of the elements of a cause of action, supported by mere
conclusory statements, do not suffice.” Id. at 1949.
Upon identifying the well-pleaded factual allegations, courts
“assume their veracity and then determine whether they plausibly
give rise to an entitlement of relief.” Id. at 1950. A claim has
facial plausibility when the movant pleads factual content that
allows

the

court

to

draw

the

reasonable

inference

that

the

nonmovant is liable for the misconduct alleged. Id. at 1949. This

5

is a “context-specific task that requires the reviewing court to
draw on its judicial experience and common sense.” Id.
1. Application of the FSLA
In order to bring a claim for unpaid overtime compensation
under the FLSA, an employee must show “by a preponderance of the
evidence: (1) that there existed an employer-employee relationship
during the unpaid overtime periods claimed; (2) that the employee
engaged in activities within the coverage of FLSA; (3) that the
employer violated the FLSA’s overtime wage requirements; and (4)
the amount of overtime compensation due.” Johnson v. Heckmann Water
Res. (CVR), Inc., 758 F.3d 627,630 (5th Cir. 2014). Defendant
challenges only the first element, alleging that there was no
employer-employee relationship. (Rec. Doc. 19 at 1). Accordingly,
this Court addresses only that element.
Employer is defined by the FSLA as “any person acting directly
or indirectly in the interest of an employer relation to an
employee.”

Williams v. Henagan, 595 F. 3d 610,620 (5th Cir.

2010)(citing

29

U.S.C

§

203(d),

(e)).

Courts

have

used

the

“economic reality test” to determine who is an employer under the
FSLA. Id. Under this test, possessing the power to hire and fire
employees, supervising and controlling employee work schedules,
determining

the

rate

and

method

of

payment,

and

maintaining

employment records are all indicative of an employer-employee
relationship. Gray v. Powers, 673 F.3d 352, 355 (5th Cir. 2012).

6

In this case, Defendants’ only assertion that might indicate
the absence of an employer-employee relationship is the fact that
Plaintiff used his own tools to paint. This fact is relevant, but
ultimately outweighed by the evidence that Defendants provided
paint, hired Plaintiff, paid Plaintiff with checks that bore the
company name, and had control over Plaintiff’s day to day tasks.
(Rec. Doc. 14 at 5-6). Accordingly, since there is strong evidence
that shows that Defendant Oliveira, as an agent of Saints & Santos,
directly controlled Plaintiff’s work as an employee, it should be
determined

that

both

are

employers

as

defined

by

the

FSLA.

Therefore, the motion to dismiss should not be granted on these
grounds.
2. Application of Louisiana Corporate Law under the FSLA
Under the FSLA, a corporate officer with operational control
of a corporation’s covered enterprise is an employer along with
the corporation, jointly and severally liable for unpaid wages.
Donovan v. Sabine Irrigation Co., 695 F.2d 190, 195 (5th Cir.
1983), cert. denied, 463 U.S. 1207 (1983). Nonetheless, Defendants
argue that Plaintiff failed to pierce the corporate veil, and
therefore cannot bring suit against Defendant Oliveira.
In this case, Defendant Oliveira not only owned Saints &
Santos, but had the direct ability to hire and fire employees, as
was already established. Accordingly, he is in the realm of
individuals who can be jointly or severally liable for unpaid

7

damages

under

the

FSLA.

Therefore,

Defendants’

claim

that

Plaintiff failed to pierce the corporate veil is neither relevant
nor plausible. Assuming arguendo that such a claim could prevail,
courts have held that dismissal against individual defendants is
not appropriate at the pleading stage. Lormand v. US Unwired, Inc.,
565 F.3d 228, 247 (5th Cir. 2009). Thus, the motion to dismiss
must be denied at this early stage.
V.

CONCLUSION
For the foregoing reasons, IT IS ORDERED that Defendants’

Motion is GRANTED in part, dismissing without prejudice claims
against Defendant Santamaria for insufficient service, and DENIED
in part in all other respects against remaining Defendants.
New Orleans, Louisiana, this 20th day of June, 2016.

_____________________________
UNITED STATES DISTRICT JUDGE

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