Kennedy v. LTI Trucking Services, Inc.
Filing
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OPINION, MEMORANDUM AND ORDER - IT IS HEREBY ORDERED that Defendants Motion to Dismiss [Doc. No. 20 ] is GRANTED IN PART AND DENIED IN PART.IT IS FURTHER ORDERED that Plaintiffs First Amended Complaint is DISMISSED as to the minimum wage claims, wit hout prejudice.IT IS FURTHER ORDERED that Plaintiff may file a Second Amended Complaint in accordance with this Opinion, Memorandum, and Order within 14 days of the date of this Order.( Amended/Supplemental Pleadings due by 1/3/2019.). Signed by District Judge Henry Edward Autrey on 12/20/2018. (AAS)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MISSOURI
EASTERN DIVISION
JOANN L. KENNEDY, on behalf of
herself and all others similarly situated
Plaintiff,
v.
LTI TRUCKING SERVICES, INC.,
Defendant.
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Case No. 4:18-CV-00230-HEA
OPINION, MEMORANDUM AND ORDER
This matter is before the Court on Defendant LTI Trucking Services’ Motion
to Dismiss [Doc. No. 20]. For reasons set forth below, the Motion to Dismiss is
granted in part and denied in part.
Facts and Background 1
Plaintiff Joann L. Kennedy is a truck driver and a former employee of
Defendant, a trucking carrier. Plaintiff entered into an “Independent Contractor
Operating Agreement” with Defendant, making her a “Lease Owner Operator.” As
a Lease Owner Operator, Plaintiff was classified as an independent contractor but
was treated as an employee. Plaintiff alleges that Defendant failed to pay minimum
wages in violation of the Fair Labor Standards Act, 29 U.S.C. § 206 et seq. and
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The recitation of the facts is set forth for the purpose of this motion only. It in no way relieves the parties from
the necessary proof of the facts in later proceedings.
Missouri’s Labor and Industrial Relations laws, R.S.Mo § 290.500-290.530.
Plaintiff alleges that the payment system used by Defendant failed to pay her per
mile driven as agreed to under the contract and did not compensate her for time
spent performing mandatory cleanups, travel to cleaning facilities, and post-arrival
detention periods.
Plaintiff also alleges that the independent contractor operating agreement
was unconscionable under Missouri statutory and common law because it was a
contract of adhesion, was unilaterally terminable by Defendant, imposed severe
financial consequences upon Plaintiff, forced Plaintiff’s continued employment
with Defendant, and was misrepresented as an independent contract relationship in
order to shift business expenses to Plaintiff. Plaintiff also states that she was
deceptively induced to enter the contract based on a per-mile payment system,
while in practice she was paid based on the zip codes through which she traveled.
Motion to Dismiss Standard
The purpose of a Rule 12(b)(6) motion to dismiss for failure to state a claim
is to test the legal sufficiency of a complaint so as to eliminate those actions
"which are fatally flawed in their legal premises and designed to fail, thereby
sparing litigants the burden of unnecessary pretrial and trial activity." Young v. City
of St. Charles, 244 F.3d 623, 627 (8th Cir. 2001) (citing Neitzke v. Williams, 490
U.S. 319, 326-27, 109 S. Ct. 1827, 104 L. Ed. 2d 338 (1989)). "To survive a
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motion to dismiss, a claim must be facially plausible, meaning that the 'factual
content. . . allows the court to draw the reasonable inference that the defendant is
liable for the misconduct alleged.'" Cole v. Homier Dist. Co., Inc., 599 F.3d 856,
861 (8th Cir. 2010) (quoting Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S. Ct. 1937,
173 L. Ed. 2d 868 (2009)). The Court must "accept the allegations contained in the
complaint as true and draw all reasonable inferences in favor of the nonmoving
party." Id. (quoting Coons v. Mineta, 410 F.3d 1036, 1039 (8th Cir. 2005)).
However, "[t]hreadbare recitals of the elements of a cause of action, supported by
mere conclusory statements," will not pass muster. Iqbal, 556 U.S. at 678.
Under Fed.R.Civ.P. 12(b)(6), a party may move to dismiss a claim for
"failure to state a claim upon which relief can be granted." The notice pleading
standard of Fed.R.Civ.P. 8(a)(2) requires a plaintiff to give "a short and plain
statement showing that the pleader is entitled to relief." Courts must assess the
plausibility of a given claim with reference to the plaintiff's allegations as a whole,
not in terms of the plausibility of each individual allegation. Zoltek Corp. v.
Structural Polymer Group, 592 F.3d 893, 896 n. 4 (8th Cir. 2010) (internal citation
omitted). This inquiry is "a context-specific task that requires the reviewing court
to draw on its judicial experience and common sense." Iqbal, 556 U.S. at 679. The
Court must grant all reasonable inferences in favor of the nonmoving party.
Lustgraaf v. Behrens, 619 F.3d 867, 872-73 (8th Cir. 2010).
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Minimum Wage Claims
Defendant argues that Plaintiff has only alleged general policies resulting in
underpayment, citing this Court’s order granting a motion to dismiss similar claims
in Wegat v. Prosteam Carpet Care LLC, No. 4:16-CV-1931 HEA, 2017 WL
3458368 (E.D. Mo. Aug. 11, 2017). As with the FLSA and MMWL overtime
claims in Wegat, Plaintiff in this case has failed to allege that she earned less than
minimum wage in any workweek. Taking Plaintiff’s allegations of fact as true, she
may have plausibly alleged that she was paid less than she expected or to which
she was entitled, but she has not necessarily alleged that she was paid less than the
minimum wage per hour in any particular workweek. The Court will dismiss the
minimum wage claims without prejudice. Plaintiff will be granted leave to file an
amended complaint.
Unconscionability Claim
Defendant argues that Plaintiff has not alleged facts demonstrating
unconscionability. "Unconscionability has two aspects: procedural
unconscionability and substantive unconscionability. Procedural unconscionability
deals with the formalities of making the contract, while substantive
unconscionability deals with the terms of the contract itself." State ex rel. Vincent
v. Schneider, 194 S.W.3d 853, 858 (Mo. 2006) (citing Bracey v. Monsanto Co.,
Inc., 823 S.W.2d 946, 950 (Mo. 1992)). To find a contract unconscionable,
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Missouri courts examine the circumstances surrounding the transaction “to
determine the objectively reasonable expectations of the parties and to the question
of unconscionable unfairness imposed upon respondents under the terms of the
form contract." Heartland Computer Leasing Corp., Inc. v. Ins. Man, Inc., 770
S.W.2d 525, 528 (Mo. Ct. App. 1989). Plaintiff alleges that Defendant induced her
acceptance of the contract by misrepresenting the nature of the agreement, which is
a plausible allegation of procedural unconscionability. Plaintiff alleges that the
terms of the agreement imposed the burdens of independent contract without the
benefit of actual independence, demonstrating a plausible allegation of substantive
unconscionability.
Plaintiff claims that the terms of the contract permit Defendant to terminate
and initiate remedies as an “Event of Default.” While Defendant disagrees with
this interpretation, it is plausible under the terms of the contract, which provide for
an “Event of Default” when the Plaintiff fails to enter into a new contract
agreement, subject to Defendant’s approval and “sole discretion,” within five days
of termination by any party. Defendant’s other arguments only indicate remaining
factual questions about the amount payable in the event of a default and nature of
the working relationship under the independent operator agreement, rather than
outright contradictions to Plaintiff’s factual allegations.
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Plaintiff has plausibly stated a claim of unconscionability. Defendant’s
motion to dismiss the unconscionability claim will be denied.
Accordingly,
IT IS HEREBY ORDERED that Defendant’s Motion to Dismiss [Doc. No.
20] is GRANTED IN PART AND DENIED IN PART.
IT IS FURTHER ORDERED that Plaintiff’s First Amended Complaint is
DISMISSED as to the minimum wage claims, without prejudice.
IT IS FURTHER ORDERED that Plaintiff may file a Second Amended
Complaint in accordance with this Opinion, Memorandum, and Order within 14
days of the date of this Order.
Dated this 20th day of December, 2018.
________________________________
HENRY EDWARD AUTREY
UNITED STATES DISTRICT JUDGE
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