SAUNDERS et al v. GETCHELL AGENCY INC et al

Filing 51

ORDER granting 37 Defendants' Renewed Motion to Dismiss for Lack of Jurisdiction, dismissing the claims of Plaintiff Kristopher Saunders without prejudice and dismissing the Maine state law claim under 26 ME. REV. STAT. Section 664(3) against Defendant Rena Getchell. By JUDGE JOHN A. WOODCOCK, JR. (MFS)

UNITED STATES DISTRICT COURT
DISTRICT OF MAINE
KRISTOPHER T. SAUNDERS, et al., )
)
Plaintiffs,
)
)
v.
)
)
THE GETCHELL AGENCY, et al.,
)
)
Defendants.
)

1:13-cv-00244-JAW

ORDER ON MOTION TO DISMISS
In this Fair Labor Standards Act and Maine wage and hour case, the
Defendants move to dismiss all claims brought by Kristopher Saunders, one of the
Plaintiffs, and to dismiss the Maine wage and hour law claim brought individually
against Rena Getchell. Because Mr. Saunders has filed for bankruptcy and has
listed his claims as an asset in the bankruptcy estate, the Court grants the motion
because it lacks subject matter jurisdiction over Mr. Saunders’ claims. The Court
also grants the Defendants’ motion to dismiss the state law claim against Rena
Getchell because on this record, Ms. Getchell cannot be held personally liable for
the state of Maine wage and hour violations that the remaining Plaintiffs have
asserted.
I.

STATEMENT OF FACTS
A.

Procedural History

On July 7, 2013, Kristopher Saunders and Cory Scribner filed “an individual,
collective, and class action” for unpaid wages pursuant to the Fair Labor Standards
Act (FLSA), 29 U.S.C. § 201 et seq. and the state of Maine’s wage and hour law, 26

ME. REV. STAT. § 661 et seq. The Plaintiffs twice amended their Complaint without
objection by the Defendants. Mot. for Leave to File Second Am. Compl. and to Add
Additional Parties Pl. with Incorporated Mem. of Law (ECF No. 23); Resp. of Defs. to
Second Mot. to Am. Compl. (ECF No. 29); Order (ECF No. 31); Second Am.
Collective and Class Action Compl. (Sept. 16, 2013) (ECF No. 32) (Second Am.
Compl.). The latest Complaint includes four additional plaintiffs: Jared Forrest,
Taylor Perkins, Karey Ann Sinclair, and Katelin Varney, Second Am. Compl. ¶¶ 617, and is brought on the named plaintiffs’ own behalf and on behalf of two
overlapping putative classes of individuals, against The Getchell Agency, Inc.
(Getchell) and Rena Getchell. Id. at 1. The members of both putative classes were
employed by the Defendants and “performed tasks of caretakers of disabled
individuals in homes operated by the [D]efendants.” Id.
On July 29, 2013, the Defendants filed a motion to dismiss all claims of
Plaintiff Kristopher Saunders and to dismiss the state law claim against Defendant
Rena Getchell. Mot. to Dismiss of Defs. (ECF No. 6). They also filed, on the same
date, a partial answer to the Complaint, denying its essential allegations and
asserting a series of affirmative defenses. Partial Defenses and Answer of Defs.
(ECF No. 8) (Ans.). On September 30, 2013, in response to the filing of the Second
Amended Complaint, the Defendants filed an updated motion to dismiss and an
updated answer. Renewed and Supplemental Mot. to Dismiss of Defs. (ECF No. 37)
(Def.’s Mot.); Partial Defenses and Ans. of Defs. to Second Am. Compl. (ECF No. 38)
(Ans.). The Plaintiffs responded on October 9, 2013. Opp’n of Pls. to Defs.’ Renewed

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and Supplemental Mot. to Dismiss (ECF No. 39) (Pls.’ Opp’n).
replied on October 23, 2013.

The Defendants

Reply of Defs. in Support of Renewed and

Supplemental Mot. to Dismiss (ECF No. 45) (Defs.’ Reply).
B.

The Parties’ Positions
1.

The Plaintiffs’ Definition of the Putative Classes

The Second Amended Complaint defines two overlapping proposed group
classifications, each consisting of the named plaintiffs along with a group of
Getchell employees. The first—the collective action class—is defined pursuant to
the Fair Labor Standards Act, 29 U.S.C. § 216(b). Second Am. Compl. ¶ 33. The
Plaintiffs define the FLSA class as: “House Managers who were paid on an hourly
basis sometime during three years prior to the Complaint and who were required to
be with consumers Twenty-four (24) hours per day.” Id.
The second class—the class action class—is defined pursuant to Rule 23 of
the Federal Rules of Civil Procedure, id. ¶ 44, and alleges violations of Maine state
minimum wage and overtime law, 26 ME. REV. STAT. § 664(3). Id. ¶¶ 44, 62-65.
The Plaintiffs define the Rule 23 class as:
All persons who were, are, or will be employed by Defendant as House
Managers in the State of Maine and who were paid on an hourly basis
during the six years prior to the filing of the complaint in this case, and
who were required to be with the consumers for 24 hours per day.
Id. ¶ 44.
2.

The Defendants’ Motion

The Defendants move to dismiss two components of the Second Amended
Complaint. First, the Defendants seek to dismiss the claims of Plaintiff Kristopher

3

Saunders, asserting that Mr. Saunders lacks standing to pursue his FLSA and
Maine wage and hour law claims. Def.’s Mot. at 1-3. Specifically, the Defendants
note that Mr. Saunders filed a petition for bankruptcy on June 11, 2012, which is
still pending in the United States Bankruptcy Court for the District of Maine. Id. at
1-2.

An asset in Mr. Saunders’ bankruptcy estate is described as “[p]art of a

possible class action lawsuit against Getchell Brothers [sic] with other former
employees for unpaid wages”; the Defendants claim that Mr. Saunders has no
standing to pursue the claims in this case because his claims are the property of the
bankruptcy estate.

Id. at 2.

As a result, the Defendants move to dismiss Mr.

Saunders’ claims pursuant to either Federal Rule of Civil Procedure 12(b)(1) on the
ground that the Court lacks subject matter jurisdiction over his claims, or
alternatively pursuant to Rule 12(b)(6) on the ground that Mr. Saunders fails to
state a claim against the Defendants due to his lack of standing. Id. at 2-3.
Second, the Defendants argue that the Second Amended Complaint fails to
state a claim under the state of Maine’s wage and hour law against Rena Getchell.
Id. at 3-5. The Second Amended Complaint seeks damages against Rena Getchell
individually, alleging that she “is now, and at all times relevant to this Complaint
was an owner, the President, and the Treasurer, of the aforesaid The Getchell
Agency, Inc., and actively managed, supervised, and directed the business affairs
and operations of said corporation and had operational control over significant
aspects of the corporation’s day-to-day functions including compensation of
employees.” Second Am. Compl. ¶ 5. The Defendants seek to dismiss the state law

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claim in the Second Amended Complaint as against Ms. Getchell as an individual
on the ground that Maine’s wage and hour law does not impose liability on
individual shareholders and officers of a corporation for wage-related claims, a
conclusion that they maintain was recently reached by this District in Affo v.
Granite Bay Care, Inc., 2:11-cv-482-DBH, 2013 U.S. Dist. LEXIS 76019, at *26-29
(D. Me. May 30, 2013). Id. at 3. With no provision for individual liability in the
statute, the Defendants maintain there can be no personal liability absent
allegations that a corporate officer “undertook any individual acts of wrongdoing
apart from those of the [corporation],” or unless the standards to pierce the
corporate veil are met. Id. at 4 (quoting Lebanon v. E. Lebanon Auto Sales, LLC,
2011 ME 78, 25 A.3d 950). As the Plaintiffs allege neither that Ms. Getchell “was
an employer of [the] Plaintiffs apart from her alleged leadership role” at Getchell,
id. at 3, nor that Getchell abused the corporate form, the Defendants contend the
Second Amended Complaint fails to state a claim against Ms. Getchell under Maine
law upon which relief can be granted.1 Id. at 4.
3.

The Plaintiffs’ Opposition

The Defendants had moved to dismiss the FLSA claims of Mr. Forrest, Ms. Perkins, and Ms.
Varney, asserting that they lack standing to be plaintiffs because they had not filed written consent
with this Court. Defs.’ Mot. at 5. They stated that the FLSA provides that “[n]o employee shall be a
party plaintiff to any such action unless he gives his consent in writing to become such a party and
such consent is filed in the court in which such action is brought,” id. (quoting 29 U.S.C. § 216(b)),
and that “[f]ailure to file such consent is a basis for dismissal.” Id. However, in their reply, the
Defendants conceded that the Plaintiffs filed consents for Mr. Forrest, Ms. Perkins, and Ms. Varney,
and the Defendants have withdrawn that portion of their motion to dismiss. Defs.’ Reply at 6.
1

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In response, the Plaintiffs oppose each of the Defendants’ grounds for partial
dismissal of the Second Amended Complaint. With respect to the claims brought by
Mr. Saunders, the Plaintiffs state that “[t]he Court should deny the Motion because
it is unclear whether as of this date the plaintiff lacks standing in this matter.” Pls.’
Opp’n at 1 (emphasis in original). The Plaintiffs implicitly acknowledge that Mr.
Saunders’ claims against the Defendants were at some point part of his bankruptcy
petition, but state that the bankruptcy trustee “has no intention of prosecuting the
claim on behalf of the bankruptcy estate.” Id. at 2. Instead, they explain that Mr.
Saunders intends to “make a higher offer to the Trustee [to purchase the claim]
than that of” an insurance company that has allegedly made an offer to purchase
the claim.

Id.

The Plaintiffs argue “[i]t will accomplish little to dismiss Mr.

Saunders’ complaint and require him to re-file after the standing issue is resolved,”
and request that the Court deny this portion of the motion without prejudice, delay
its ruling for 30 days, or permit the dispute to be resolved between the parties and
trustee. Id.
Next, the Plaintiffs insist that the Second Amended Complaint alleges a
proper state law claim against Ms. Getchell, the key consideration being that she
“participated directly in the alleged wrongdoing described in the Complaint.” Id. at
3 (emphasis in original). They assert that, under Maine law: “Shareholders may
only be held personally liable on a theory of piercing the corporate veil. In contrast,
officers, directors and other participants in a corporation who are not shareholders .
. . are liable if they participate in wrongful acts.” Id. (emphasis in original). Thus,

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the Plaintiffs maintain that an owner and officer such as Ms. Getchell who “actively
managed, supervised and directed the business affairs and operation of the
corporation” may be liable under Maine law for the nonpayment of wages. Id. at 23. For example, they contend that Ms. Getchell would be liable if she participated
in the failure to pay employees for the nighttime hours worked. Id. (citing Blue
Star Corp. v. CKF Properties, LLC, 2009 ME 101, ¶ 44, 980 A.2d 1270, 1280). The
Plaintiffs dispute the Defendants’ interpretation of Affo, stating that “it did not deal
with the body of state law that makes officers and owners liable, as opposed to
shareholders, for acts in which they directly participate.” Id. at 4 (emphasis in
original).
The Plaintiffs also reject the Defendants’ reliance on Lebanon. Id. at 4-5.
They note that while the Lebanon Court dealt with express statutory language
providing that an owner of a limited liability company is not individually liable for
the company’s debts or liabilities, no such express language exists here. Id. at 5.
Further, the Plaintiffs argue that the Maine Law Court in Lebanon “did not
reverse[] the rather clear holding of Blue Star Corp.” Id. at 5. Next, the Plaintiffs’
reject the comparative argument that because Maine’s severance pay statute, 26
ME. REV. STAT. § 625-B, defines employer as including some individuals, the lack of
a similar definition in Maine’s wage and hour law demonstrates that the
Legislature meant to exclude owners of corporations engaged in wrongful activities.
Id. They assert that such logic “is unpersuasive to anyone with any understanding
of the legislative process.” Id. In sum, the Plaintiffs contend that in Blue Star, the

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Maine Supreme Judicial Court decided in their favor the question of Ms. Getchell’s
potential individual liability for unpaid overtime and they maintain that in Affo,
this District did not resolve this issue to the contrary. Accordingly, they argue that
the motion to dismiss Ms. Getchell as a defendant must be denied.
4.

The Defendants’ Reply

In reply, the Defendants first reassert that Mr. Saunders lacks standing to
bring the present claims. Defs.’ Reply at 1. They note that the Plaintiffs have
admitted Mr. Saunders is the debtor in the bankruptcy petition described in their
motion to dismiss, and that “[Mr. Saunders] does not indicate that the bankruptcy
schedules he filed have been amended to disclose the present claim to creditors, or
assert that the claim is exempt.”

Id.

The Defendants insist that the “various

alleged extra-judicial communications” with the bankruptcy trustee do not change
the fact that Mr. Saunders lacks standing to pursue his claims. Id. at 2.
Next, the Defendants state that “[t]he Court should decline [the] Plaintiffs’
invitation to create a new cause of action against individual business owners and
officers under the Maine wage and hour law.” Id. at 2. They argue that Blue Star
only supports a finding of personal liability when allegations of “tortious or
deceptive conduct” are raised, id. at 2-4 (citing Blue Star, 2009 ME 101, ¶ 44, 980
A.2d at 1280; Advanced Const. Corp. v. Pilecki, 2006 ME 84, ¶¶ 13-17, 901 A.2d 189,
195-96), or where the wrongful acts are separate and distinct from the acts of the
corporation. Id. (citing Lebanon, 2011 ME 78, ¶ 9 n.3, 25 A.3d at 953 n.3). The
Defendants conclude that the Second Amended Complaint does not allege facts or

8

claims supporting these possible bases to impose liability and therefore fails to state
a claim against Ms. Getchell upon which relief can be granted. Id. at 4-6.
II.

DISCUSSION
A.

Plaintiff Kristopher Saunders
1.

Legal Standard

Once raised, “the parties asserting jurisdiction, here the plaintiffs, have the
burden of demonstrating the existence of federal jurisdiction.” Acosta-Ramirez v.
Banco Popular de Puerto Rico, 712 F.3d 14, 20 (1st Cir. 2013); Elkins v. Elkins, Civ.
No. 09-582-P-H, 2010 U.S. Dist. LEXIS 57139, at *8-9 (D. Me. June 7, 2010)
(recommended decision), aff’d, Elkins v. Elkins, 2010 U.S. Dist. LEXIS 63964, at *2
(D. Me. June 25, 2010).

“Federal courts are obligated to resolve questions

pertaining to subject-matter jurisdiction before addressing the merits of a case.”
Acosta-Ramirez, 712 F.3d at 18. On a motion to dismiss for lack of subject matter
jurisdiction under Rule 12(b)(1) of the Federal Rules of Civil Procedure, the plaintiff
retains the burden of proof but “the district court must construe the complaint
liberally, treating all well-pleaded facts as true and indulging all reasonable
inferences in favor of the plaintiff.” Aversa v. United States, 99 F.3d 1200, 1209-10
(1st Cir. 1996). The Court may consider extrinsic evidence introduced by either
party in determining subject matter jurisdiction. Elkins, 2010 U.S. Dist. LEXIS
57139, at *9 (citing Aversa, 99 F.3d at 1210).
2.

The Pending Lawsuit and the Bankruptcy Estate

“When a debtor files a bankruptcy petition, all of his property becomes
property of the bankruptcy estate.” Taylor v. Freeland & Kronz, 503 U.S. 638, 642

9

(1992); Elkins, 2010 U.S. Dist. LEXIS 57139, at *10; 11 U.S.C. § 541(a)(1). “The
bankruptcy trustee has exclusive standing to pursue causes of action that are
property of the bankruptcy estate,” Elkins, 2010 U.S. Dist. LEXIS 57139, at *10
(citing 11 U.S.C. § 323; Schertz-Cibolo-Universal City v. Wright, 25 F.3d 1281, 1284
(5th Cir. 1994)), although the trustee may abandon such assets. Id. A properly
scheduled asset of the estate normally reverts back to the debtor’s possession at the
close of a bankruptcy proceeding if the trustee has taken no actions toward it. Id. at
*12.
Significantly, Mr. Saunders admitted in his opposition to being the debtor in
the bankruptcy petition at issue, and has implicitly admitted that his unpaid wages
claim is an asset of the bankruptcy estate. Pls.’ Opp’n at 1-2; see Def.’s Reply at 1-2.
Further, the Plaintiffs request that the Court “either deny the motion to dismiss
without prejudice, or . . . delay its ruling on the motion for 30 days to permit the
dispute to be resolved between the parties and the Trustee.” Pls.’ Opp’n at 2. By
the delay in the issuance of this decision, this Court effectively granted this part of
Mr. Saunders’ request.2 But, much more than thirty days have passed and the
Court has received no indication that the dispute between the parties and the
Trustee has been resolved.

Indeed, Mr. Saunders has supplied the Court no

evidence that his petition is no longer pending in bankruptcy court or that the
bankruptcy court has abandoned his FLSA and state law claims. See Elkins, 2010
U.S. Dist. LEXIS 57139, at *10-12.
It was on October 9, 2013 that Mr. Saunders requested thirty days to “permit the dispute to
be resolved between the parties and the Trustee.” Pls.’ Opp’n at 2.
2

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The Plaintiffs have therefore not carried their burden of demonstrating
federal subject matter jurisdiction in this Court over Mr. Saunders’ legal claims
against the Defendants.
B.

State Law Claim Against Defendant Rena Getchell
1.

Legal Standard: Federal Court Consideration of Maine’s
Wage and Hour Law

The Defendants’ motion to dismiss the state law claim against Ms. Getchell
turns on a question of Maine law. Federal courts “are bound by the teachings of the
state’s highest court” when considering state law claims. Phoung Luc v. Wyndham
Mgmt. Corp., 496 F.3d 85, 88 (1st Cir. 2005) (quoting N. Am. Specialty Ins. Co. v.
Lapalme, 258 F.3d 35, 37-38 (1st Cir. 2001)).

A federal court may “make an

informed prophecy” about what rule the state courts would likely follow, but the
First Circuit has cautioned that federal courts should generally do so “only on
interstitial questions.” Phoung Luc, 496 F.3d at 88; Samaan v. St. Joseph Hosp.,
755 F. Supp. 2d 236, 247 (D. Me. 2010). “A federal court must not ‘create new rules
or significantly expand existing rules. We leave those tasks to the state courts.’”
Samaan, 755 F. Supp. 2d at 247 (quoting Phoung Luc, 496 F.3d at 88).
Maine’s wage and hour law states that “[a]ny employer shall be liable” for
violating the wage or overtime provisions of the statute, 26 ME. REV. STAT. §§ 664,
670,3 but the statute does not provide a definition of the term “employer.” See id. §
663 (definitions section). When a term in Maine’s wage and hour law “is not defined
The statutory provision on overtime states as follows: “An employer may not require an
employee to work more than 40 hours in any one week unless 1 ½ times the regular hourly rate is
paid for all hours actually worked in excess of 40 hours in that week.” 26 ME. REV. STAT. § 664(3).
3

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in either the relevant statutory provisions or in prior decisions of [the Law] [C]ourt,
Maine Courts may look to analogous federal statutes, regulations, and case law for
guidance.” Gordon v. Me. Cent. R.R., 657 A.2d 785, 786 (Me. 1995); accord Affo,
2013 U.S. Dist. LEXIS 76019, at *26-27. Notably, the Law Court has upheld a trial
court’s reference to federal caselaw interpreting the FLSA definition of “employer”
in fashioning a test to determine whether a “collection of corporate and partnership
entities” could be held liable as “joint employers” under Maine’s wage and hour law.
Dir. of Bureau of Labor Standards v. Cormier, 527 A.2d 1297, 1298-1300 (Me. 1987).
2.

Affo v. Granite Bay Care and Maine’s Wage and Hour
Law

The Court must determine whether Ms. Getchell is an “employer,” as the
term is used in Maine’s wage and hour law. In 2013, in Affo, Judge Hornby of this
District resolved this issue as regards officers and shareholders of a corporation.
2013 U.S. Dist. LEXIS 76019, at *26-30. The plaintiffs in Affo sued a corporation
and its corporate officers and shareholders for unpaid wages and overtime under
the Maine wage and hour statute. Id. at *2. The individual defendants moved for
summary judgment on the Maine wage and hour statutory claim, arguing that the
Maine wage and hour law does not extend to individual shareholders and officers of
the corporation.

Id. at *26-30. Judge Hornby agreed with the defendants and

granted summary judgment on the Maine wage and hour claim. Id. at *83.
Judge Hornby noted that the Legislature enacted Maine’s statute over two
decades after Congress enacted the FLSA, and the state statute’s definitions of
“employee” and “employ” closely track the definitions in the FLSA. Affo, 2013 U.S.

12

Dist. LEXIS 76019, at *28; compare 26 ME. REV. STAT. §§ 663(2) and 663(3), with 29
U.S.C. §§ 203(g), and 203(e). Additionally, certain portions of the Maine statute
expressly incorporate FLSA standards; for example, the overtime pay provision
states that the “regular hourly rate . . . does not include any sums excluded from the
definition of ‘regular rate’ under the [FLSA].” Id. (quoting 26 ME. REV. STAT. §
664(3)).
By contrast, the FLSA defines “employer” to include “any person acting
directly or indirectly in the interest of an employer in relation to an employee.” 29
U.S.C. § 203(d). Judge Hornby noted that the First Circuit has commented that the
FLSA definition of employer is so broad that it “require[s] . . . application to many
persons and working relationships, which prior to [the FLSA] were not deemed to
fall within an employer-employee category.”

Id. at *27 (quoting Baystate

Alternative Staffing v. Herman, 163 F.3d 668, 675 (1st Cir. 1998)); see Donovan v.
Agnew, 712 F.2d 1509, 1510 (1st Cir. 1983) (“Taken literally this language would
support liability against any agent or employee with supervisory power over other
employees. It has, indeed, been interpreted expansively”).
Significantly, however, Maine law does not track the FLSA with respect to
the definition of “employer.” In fact, Judge Hornby pointed out that the statute
provides no definition of the term, see 26 ME. REV. STAT. § 663. Furthermore, Judge
Hornby determined that the Maine courts have been “generally reluctant to
disregard the legal entity.”

Id. at *28-29 (quoting Johnson v. Exclusive Props.

Unlimited, 1998 ME 244, ¶ 5, 720 A.2d 568, 571). Judge Hornby concluded that

13

extending Maine wage and hour laws to individual shareholders and officers would
represent a “drastic step,” one that he was not prepared to make. Id. at *28-30.
This Court will not reinvent Judge Hornby’s well-crafted wheel and accepts
his Affo analysis. The Plaintiffs seek to distinguish this case from Affo on two
grounds: (1) that Judge Hornby ruled that the issue would have to be resolved by
the state court; and, (2) that Judge Hornby did not “deal with the body of state law
that makes officers and owners liable, as opposed to shareholders, for acts in which
they directly participate.”4

Pls.’ Opp’n at 4.

Neither distinction is convincing.

First, although Judge Hornby commented in a footnote that “this is a close
question” and the issue “may ultimately need to be resolved by certification to the
Law Court,” Affo, 2013 U.S. Dist. LEXIS 76019, at *30 n.15, Judge Hornby did in
fact rule on the defendants’ motion for summary judgment and granted it. Id. at
*83. Also, the individual defendants in Affo were impleaded as shareholders and
officers of the corporation and Judge Hornby expressly declined “to extend liability
under Maine’s wage and hour law to individual shareholders and officers.” Id. at
*30.

The Plaintiffs in this case are suing Rena Getchell as “an owner, the

The Plaintiffs note that “[a] motion is pending before the Affo [C]ourt to clarify its ruling in
this regard.” Pls.’ Opp’n at 4. In that motion, the plaintiffs admitted that Judge Hornby’s conclusion
(in Affo, 2013 U.S. Dist. LEXIS 76019) encompassed both shareholders and officers, but argued that
his Order only refers to the “reluctance of Maine courts to hold shareholders individually liable.”
Mot. in Limine Regarding Admissibility of Evidence Concerning the Liability of Defendants Mumpini
and Alicea Under State Law at 1, Affo v. Granite Bay Care, Inc., 2:11-cv-482-DBH (D. Me. Aug. 8,
2013) (ECF No. 99) (emphasis in original). The plaintiffs stated that they “failed in [their] brief to
point out the distinction in Maine law between the liability of shareholders versus the liability of
officers and directors,” id., and proceeded to make the same arguments that the Plaintiffs here raise
regarding Ms. Getchell’s potential liability. Id. at 1-3. Judge Hornby denied the plaintiffs’ motion
for timing and procedural reasons. See Minute Entry, Affo, supra (D. Me. Oct. 24, 2013) (ECF No.
144).
4

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President, and the Treasurer” of The Getchell Agency, Inc. Second Am. Compl. ¶ 5.
Thus, Judge Hornby’s ruling in Affo applies to this lawsuit.
3.

Maine State Law

Despite the clear message in Affo, the Plaintiffs strenuously contend that
Judge Hornby gave short shrift to their contention that the Maine courts have held
officers and owners liable for acts in which they directly participate. Pls.’ Opp’n at
4. Although there is no direct authority on the Maine wage and hour statute, in
2012, the Maine Supreme Judicial Court addressed a similar argument in a case
involving supervisor liability under the Maine Whistleblowers’ Protection Act
(MWPA) and the Maine Human Rights Act (MHRA). Fuhrmann v. Staples Office
Superstore E., Inc., 2012 ME 135, 58 A.3d 1083. In Fuhrmann, the plaintiff sued
four individual supervisors under both the MWPA and the MHRA.

Id.

The

individual supervisors moved to dismiss on the ground that neither statute provided
for individual supervisor liability. Id. ¶ 12, 58 A.3d at 1089. Despite statutory
language more friendly to the plaintiffs than the language here and despite the
Maine Human Rights Commission’s contrary interpretation, the Maine Supreme
Judicial Court declined to conclude that either Act provided for individual liability.
Id. ¶¶ 22-35, 58 A.3d at 1093-98. Significantly, the Fuhrmann Court wrote that “[i]f
the Legislature had intended to create individual supervisor liability it would have
done so explicitly in much clearer terms” and “such a significant change in
employment law would be much clearer and more direct.” Id. ¶ 34, 58 A.3d at 1098.
Like Fuhrmann, this Court declines to extend Maine wage and hour liability to

15

corporate officers and owners in the absence of a clearer legislative directive to do
so.5
The Plaintiffs next argue that Maine law provides for individual liability in
the corporate context under two theories: (1) piercing the corporate veil; and (2)
where the officers, directors, and others participated in the wrongful acts. Pls.’
Opp’n at 3. The Plaintiffs are correct that the Law Court has put forth two theories
under which corporate employees or agents may be found individually liable to third
parties. First, the Law Court allows for a “piercing the corporate veil” theory of
liability, where a defendant abuses the corporate form and an unjust or inequitable
result would occur if the court recognized only a separate corporate existence.
Lebanon, 2011 ME 78, ¶ 8, 25 A.3d at 953; Blue Star, 2009 ME 101, ¶ 43, 980 A.2d
at 1280; Pilecki, 2006 ME 84, ¶ 10, 901 A.2d at 194-95. The Defendants maintain
there is no allegation giving rise to this theory of liability, Defs.’ Mot. at 3-4, and the
Plaintiffs do not dispute this assertion. See Pls.’ Opp’n at 3-6.
Under a second theory of liability, “[c]orporate officers who participate in
wrongful acts can be held liable for their individual acts, and such liability is
distinct from piercing the corporate veil.” Blue Star, 2009 ME 101, ¶ 44, 980 A.2d
at 1280 (quoting Pilecki, 2006 ME 84, ¶ 13, 901 A.2d at 195). The Plaintiffs insist
that, under Blue Star, Ms. Getchell’s participation in the “failure to pay the

The Plaintiffs argue that Fuhrmann is limited to supervisors, not owners. Pls.’ Opp’n at 6.
Although it is true that the Fuhrmann Court addressed claims against individuals as supervisors,
not as owners, the significance of Fuhrmann is that the Maine Supreme Judicial Court refused to
extend liability to individuals—as opposed to the employer—without more direct legislative
guidance.
5

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employees for the nighttime hours that they worked” qualifies as a wrongful act.
Pls.’ Opp’n at 3.

The Defendants reject this assertion and insist that, under

Lebanon, “such wrongful acts must be separate and distinct from the acts of the
corporation” for personal liability to follow. Defs.’ Reply at 4.
Lebanon is instructive. There, the Town of Lebanon filed a lawsuit against a
limited liability company (LLC) and its sole member,6 alleging violations of Maine’s
junkyard and graveyard statute, 30-A ME. REV. STAT. §§ 3751-3760. Lebanon, 2011
ME 78, ¶ 9, 25 A.3d at 953. The Lebanon Court considered whether judgment could
issue against the sole member individually. Preliminarily, the Law Court noted
that under the Maine statute governing LLCs, “a member of a limited liability
corporation is not individually liable for the debts or liabilities of the LLC.” Id. ¶ 8,
25 A.3d at 953 (citing 31 ME. REV. STAT. §645(1) (2010) (repealed July 1, 2011)).
After finding that the LLC appeared to be fully under the individual defendant’s
control, the Law Court addressed the two recognized theories of individual liability:
piercing the corporate veil and individual wrongful acts. First, it concluded that the
record contained no evidence to suggest that the defendant had “abused the
privilege of incorporating, or that an unjust result would occur if only the [corporate
entity] were held liable on the [plaintiff’s] complaint.” Id. ¶ 9, 25 A.3d at 953.
The Law Court then commented on the second theory of liability in a
footnote: “Neither is there any evidence or a finding that [the individual defendant]
undertook any individual acts of wrongdoing distinct from those of the LLC.” Id. ¶ 9
A member of an LLC is an owner of the LLC.
(repealed July 1, 2011).
6

17

See 31 ME. REV. STAT. § 602(12) (2010)

n.3, 25 A.3d at 953 n.3 (citing Blue Star, 2009 ME 101, ¶ 24, 980 A.2d at 1280)
(emphasis added). Although this comment is dictum, it provides some guidance as
to “what rule the state courts would likely follow”—namely, how the Maine
Supreme Judicial Court is likely to interpret the term “wrongful act” as a basis for
extending liability to individual shareholders and officers. In adding “distinct from
those of the LLC,” the Law Court shed light on Blue Star and Pilecki, where it
referred to “participation in a wrongful act” as the basis for liability. See Blue Star,
2009 ME 101, ¶¶ 44-48, 980 A.2d at 1280-81; Pilecki, 2006 ME 84, ¶¶ 13-14, 901
A.2d at 195).
Here, the Plaintiffs make no allegation that Ms. Getchell “undertook any
individual acts of wrongdoing distinct from those of” The Getchell Agency. Lebanon,
2011 ME 78, ¶ 9 n.3, 25 A.3d at 953 n.3. In fact, the Second Amended Complaint
states that Ms. Getchell “has acted at all times material herein directly and
indirectly in the interest of said corporation in relation to its employees.” Second
Am. Compl. ¶ 5. Thus, based on the record before the Court on this motion to
dismiss, there are no facts upon which Ms. Getchell could be found liable on either
the “piercing the corporate veil” or the “wrongful acts” theory of liability.
After examining the Law Court’s precedents on the individual liability of
owners acting in an executive—as opposed to a shareholder—capacity, the Court
concludes that the Second Amended Complaint fails to state a claim against Ms.
Getchell under Maine’s wage and hour law upon which relief can be granted. The

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Court therefore grants the Defendants’ motion to dismiss as to the Maine wage and
hour law claim against Rena Getchell.
III.

CONCLUSION
The Court GRANTS the Defendants’ Renewed and Supplemental Motion to

Dismiss (ECF No. 37), dismissing the claims of Plaintiff Kristopher Saunders
without prejudice and dismissing the Maine state law claim under 26 ME. REV.
STAT. § 664(3) against Defendant Rena Getchell.
SO ORDERED.

/s/ John A. Woodcock, Jr.
JOHN A. WOODCOCK, JR.
CHIEF UNITED STATES DISTRICT JUDGE
Dated this 11th day of February, 2014

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