Cabahug et al v. Tucker, et al

Filing 25

ORDER: IT IS ORDERED that 16 MOTION to Dismiss for Failure to State a Claim filed by Defendants is DENIED. IT IS FURTHER ORDERED that Plaintiffs must file an Amended Complaint, re-alleging their claim under the Fair Labor Standards Act, on or before July 14, 2017. Signed by Judge Jay C. Zainey on 6/19/2017.(ajn)

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UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
CHERISSA CABAHUG and
GINA RAMOS

CIVIL ACTION

VERSUS

NO: 17-241

MICHELLE SEILER TUCKER,
ADVANCED MEDICAL REHAB, LLC
And CAPITAL BUSINESS SOLUTIONS

SECTION: A (4)

ORDER
Before the Court is a Motion to Dismiss for Failure to State a Claim (Rec. Doc. 16) filed
by Defendants. Plaintiffs oppose the Motion. (Rec. Doc. 21). The Motion, set for submission on
April 19, 2017, is before the Court on the briefs without oral argument.
I.

Background
Plaintiffs, Cherissa Cabahug and Gina Ramos, assert claims against their former employers

under the Fair Labor Standards Act (“FLSA”), Louisiana’s Last Paycheck Act law, Louisiana’s
Timely Payment law, and for invasion of privacy. (Rec. Doc. 1). Plaintiffs allege that Defendants
failed to compensate Plaintiffs for services performed, which Plaintiffs requested from Defendants
following their termination in 2016. On January 9, 2017, Plaintiffs filed their Complaint against
Defendants. Defendants filed the instant Motion to Dismiss for Failure to State Claim alleging that
Plaintiffs’ Complaint does not satisfy the minimum standards to plead an FLSA claim. (Rec. Doc.
21).
II.

Analysis
The central issue in a Rule 12(b)(6) motion to dismiss is whether, in the light most

favorable to the plaintiff, the Complaint states a valid claim for relief. Gentilello v. Rege, 627 F.3d
540, 544 (5th Cir. 2010) (quoting Doe v. MySpace, Inc., 528 F.3d 413, 418 (5th Cir. 2008). To

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avoid dismissal, a plaintiff must plead sufficient facts to "state a claim for relief that is plausible
on its face." Id. (quoting Ashcroft v. Iqbal, 129 S. Ct. 1937, 1949 (2009)). "A claim has facial
plausibility 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. The Court does not accept as
true "conclusory allegations, unwarranted factual inferences, or legal conclusions." Id. (quoting
Plotkin v. IP Axess, Inc., 407 F.3d 690, 696 (5th Cir. 2005)). Legal conclusions must be supported
by factual allegations. Id. (quoting Ashroft v. Iqbal, 556 U.S. 662, 678 (2009)).
Federal Rule of Civil Procedure 8(a)(2) requires that plaintiffs give a “short plain statement
of the claim showing that the pleader is entitled to relief.” Fed. R. Civ. P. 8(a)(2). The United
States Court of Appeals for the Fifth Circuit has noted that the requirements of Rule 8(a) are
relaxed and minimal, and fulfilled by simply giving defendants fair notice of a plaintiff’s claim
and the grounds on which it rests. General Electric Capital Corp. v. Posey, 415 F.3d 391, 396-97
(5th Cir. 2005) (citing Swierkiewicz v. Sorema N.A., 534 U.S. 506, 512 (2002)). Additionally, in
this Circuit, neither the notice requirements under Rule 8(a)(2) nor the dismissal standards under
Rule 12(b)(6) “require a claimant to set out in detail the facts upon which he bases his claim.”
Williams v. United Credit Plan of Chalmette, Inc., 526 F.2d 713, 714 (5th Cir. 1976).
First, Defendants assert that Plaintiffs’ FLSA claims should be dismissed because they
don’t allege that Defendants failed to pay minimum wage or overtime. Second, Defendants assert
that Plaintiffs’ Fair Labor Standards Act claims should be dismissed because they fail to allege
any facts to show FLSA coverage. Finally, should the Court dismiss Plaintiffs’ FLSA claims,
Defendants argue that the Court should decline to exercise supplemental jurisdiction over
Plaintiffs’ state-law claims.
a. Fair Labor Standards Act – Minimum Wage and Overtime

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Defendants assert that Plaintiffs’ Complaint fails to state a valid claim for relief, arguing
that Plaintiffs’ Complaint does not allege that Defendants failed to pay them minimum wage or
overtime. Plaintiffs contend that their Complaint sufficiently alleges a valid FLSA claim, and that
FLSA plaintiffs are not required to plead a precise amount for unpaid overtime wages.
To state a claim for unpaid overtime wages under the FLSA, a plaintiff must plead “1) that
there existed an employer-employee relationship during the unpaid ... periods claimed; 2) that the
employee engaged in activities within the coverage of the FLSA; 3) that the employer violated the
FLSA's overtime wage requirements; and 4) the amount of overtime compensation due.” Johnson
v. Heckmann Water Resources, Inc., 758 F.3d 627, 630 (5th Cir. 2014).
Defendants argue that Plaintiffs fail to state a claim for unpaid overtime wages or minimum
wages because their Complaint does not reference unpaid overtime or failure to pay minimum
wage. (Rec. Doc. 24) (emphasis added). Instead, “both Plaintiffs allege that defendants reduced
their salaries, withheld monthly salary, and deducted wages.” (Rec. Doc. 24). Defendants are
correct in their assertion that Plaintiffs’ response to Defendants’ motion alleges that they seek “all
unpaid overtime wages,” while their Complaint only states that they demand their “unpaid wages.”
(Rec. Doc. 21, Pg. 2-3) (Rec. Doc. 1, Pg. 11). However, as Defendants themselves state, at the
very least Plaintiffs should be required to amend their Complaint to adequately allege FLSA
violations.
The Court can grant the plaintiff leave to amend the Complaint “when justice so requires.”
Fed. R. Civ. P. 15(a)(2). District courts have discretion to grant leave to amend, but the federal
rules favor granting leave over denying it. See Jamieson By & Through Jamieson v. Shaw, 772
F.2d 1205, 1208 (5th Cir. 1985). Justifications for denying leave to amend include “undue delay,
bad faith, dilatory motive, repeated failure to cure deficiencies by prior amendment, undue

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prejudice to the opposing party, and the futility of the amendment.” Id. Allowing a plaintiff to
amend a Complaint is “futile” when “the amended Complaint would fail to state a claim upon
which relief could be granted.” Stripling v. Jordan Prod. Co., LLC, 234 F.3d 863, 873 (5th Cir.
2000). Here, there is no indication that allowing Plaintiffs to amend their Complaint would be
futile. Plaintiffs’ Complaint specifically alleges that Defendants violated the FLSA and gave facts
detailing Defendants’ alleged violation, but simply fails to include the word overtime or minimum.
Additionally, given the early stage of this litigation, granting leave to amend will not result in
undue prejudice to Defendants. Therefore, the Court will grant Plaintiffs leave to amend their
Complaint to re-allege their FLSA overtime or minimum wage claim.
b. Fair Labor Standards Act – Coverage
Defendants also argue that Plaintiffs’ Complaint fails to allege any facts to show FLSA
coverage because Plaintiffs failed to provide any support for their contention that they are
employees or that Defendants are employers covered under the FLSA. Plaintiffs respond that their
Complaint facially establishes that Defendants were employers under FLSA and that Plaintiffs’
employment was connected to interstate commerce. (Rec. Doc. 21).
The FLSA’s minimum wage and overtime provisions apply to employees who are either
A) engaged in commerce or in the production or goods for commerce (individual coverage), or B)
employed in an enterprise engaged in commerce or in the production of goods for commerce
(enterprise coverage). 29 U.S.C. §§ 206(a), 207(a). The United States Court of Appeals has stated
that “[e]ither individual or enterprise coverage is enough to invoke FLSA protection.” Martin v.
Bedell, 955 F.2d 1029, 1032 (5th Cir. 1992).
i. Individual Coverage

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To plead individual coverage a plaintiff must allege facts giving rise to a reasonable
inference that he was engaged in interstate commerce. The United States Court of Appeals for the
Fifth Circuit uses a practical test to determine whether an employee was engaged in interstate
commerce. Williams v. Henagan, 595 F.3d 610, 621 (5th Cir. 2010). This practical test asks
whether the employee’s work was “so directly and vitally related to the functioning or an
instrumentality or facility of interstate commerce as to be, in practical effect, a part of it rather than
an isolated activity.” Id.
Plaintiff Cabahug was employed as a marketing and sales representative for Defendant
Advanced Medical Rehab, a company that contracted with chiropractors to market their services
to personal injury attorneys. (Rec. Doc. 1). Her position required her to visit law firms, make
telephone calls, coordinate lunches between doctors and attorneys, and entertain clients. (Rec. Doc.
1). Plaintiff Ramos was employed by Defendant Capital Business Solutions to assist “with the
sales of businesses in Louisiana, Texas, and California.” (Rec. Doc. 1).
The Court finds that Plaintiffs’ factual allegations in their Complaint give rise to the
inference that they were engaged in interstate commerce. Plaintiff Cabahug’s work, which
included communicating with different attorneys and doctors on the phone and face to face,
appears to be a part of interstate commerce because it is likely that at least one of the doctors or
attorneys that she worked with was licensed or employed in another state. Coordinating and
entertaining a number of professionals does not appear to be “purely local in nature,” because
professionals often work in more than one state. Williams v. Henagan, 595 F.3d 610, 621 (5th Cir.
2010). Additionally, Plaintiff Ramos’ work, which included assisting in the sales of business in
Louisiana, Texas, and California,” clearly engages interstate commerce because it directly
involves commerce among three states. (Rec. Doc. 1). Because Plaintiffs’ Complaint gives rise to

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a reasonable inference that they were engaged in interstate commerce, Defendants’ claim that
Plaintiffs’ Complaint fails to allege any facts to show FLSA coverage fails.
ii. Enterprise Coverage
In order to plead enterprise coverage, a plaintiff must allege facts that give rise to a
reasonable inference that a defendant qualifies as an enterprise 1 engaged in commerce 2 or the
production of goods for commerce. 29 U.S.C. §§ 206(a), 207(a). Having already found that
Plaintiffs’ Complaint gives rise to the inference that they were engaged in interstate commerce,
and because “[e]ither individual or enterprise coverage is enough to invoke FLSA protection,” the
Court need not address whether Plaintiffs’ Complaint alleges facts to show enterprise coverage.
Martin, 955 F.2d at 1032 (5th Cir. 1992).
c. Supplemental Jurisdiction
Finally, Defendants argue that, should the Court dismiss Plaintiffs’ FLSA claims, the Court
should decline to exercise supplemental jurisdiction over Plaintiff’s state-law claims. Because the
Court declines to dismiss Plaintiffs’ FLSA claims at this juncture, the Court maintains its
supplemental jurisdiction over Plaintiffs’ Louisiana state-law claims.
Accordingly;
IT IS ORDERED that the Motion to Dismiss for Failure to State a Claim (Rec. Doc.
16) filed by Defendants is DENIED.

1

The FLSA defines such an enterprise as one that (A)(i) has employees engaged in commerce or in the
production of goods for commerce, or that has employees handling, selling, or otherwise working on goods
or materials that have been moved in or produced for commerce by any person; and (ii) is an enterprise whose
annual gross volume of sales made or business done is not less than $500,000 (exclusive of excise taxes at
the retail level that are separately stated). 29 U.S.C. § 203(s)(1).
2
The FLSA defines commerce as the “trade, commerce, transportation, transmission, or communication
among the several States or between any State and any place outside thereof.” 29 U.S.C. § 203(b).

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IT IS FURTHER ORDERED that Plaintiffs must file an Amended Complaint, realleging their claim under the Fair Labor Standards Act, on or before July 14, 2017.
New Orleans, Louisiana this 19th day of June, 2017.

____________________________________
JAY C. ZAINEY
UNITED STATES DISTRICT JUDGE

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