Musa et al v. Supershuttle International, Inc. et al
Filing
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ORDER granting in part and denying in part 17 Motion to Dismiss for Failure to State a Claim - For the reasons set forth in the ATTACHED WRITTEN MEMORANDUM AND ORDER, SuperShuttle's motion to dismiss is granted in part and denied in part. Plaintiffs' FLSA claims accruing before May 15, 2009 and Plaintiffs' NYLL claims accruing before May 15, 2006 are dismissed as time-barred. Defendant's Rule 12(b)(7) motion is denied without prejudice to renew after Plaintiffs have a mended the Complaint. Plaintiffs are directed to amend their complaint to clarify the scope of the putative class by October 30, 2013. FAILURE TO COMPLY TIMELY WITH THIS ORDER MAY RESULT IN DISMISSAL OF THIS ACTION. SO ORDERED by Judge Dora Lizette Irizarry on 9/30/13. (Irizarry, Dora)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
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MOHAMED MUSA and ALI ELMARDI,
:
individually and on behalf of all other persons
:
similarly situated who were employed by
:
SUPERSHUTTLE INTERNATIONAL, INC.,
:
SUPERSHUTTLE FRANCHISE CORPORATION, :
VEOLIA TRANSPORTATION SERVICES, INC., :
and SHUTTLE ASSOCIATES, LLC, all d/b/a
:
SuperShuttle, and any other corporate entities
:
affiliated with, controlled by, or controlling same, :
:
Plaintiffs,
:
:
-against:
:
SUPERSHUTTLE INTERNATIONAL, INC.,
:
SUPERSHUTTLE FRANCHISE CORPORATION, :
VEOLIA TRANSPORTATION SERVICES, INC., :
and SHUTTLE ASSOCIATES, all d/b/a
:
SUPERSHUTTLE, and any other corporate entities :
affiliated with, controlled by, or controlling same, :
:
Defendants.
:
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MEMORANDUM AND ORDER
12-CV-2418 (DLI)(RLM)
DORA L. IRIZARRY, U.S. District Judge:
Plaintiffs Mohamed Musa (“Musa”) and Ali Elmardi (“Elmardi,” together with Musa, the
“Plaintiffs”) bring this action (the “Musa Action”), individually and on behalf of all other
persons similarly situated, against SuperShuttle Associates (“SuperShuttle” or “Defendant”) 1 for
damages arising from alleged violations of the Fair Labor Standards Act (“FLSA”) and the New
York Labor Law (“NYLL”). Specifically, Plaintiffs contend that SuperShuttle has misclassified
the Plaintiffs, and all those similarly situated, as independent contractors instead of employees,
and, as a result they are entitled to, inter alia, recovery of unpaid wages. SuperShuttle moves to
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Plaintiffs’ claims against the other Defendants, SuperShuttle International Inc., SuperShuttle
Franchise Corporation, and Veolia Transportation Services, Inc., were voluntarily dismissed on
July 17, 2012.
dismiss all of the claims asserted against it pursuant to Rules 12(b)(6) and 12(b)(7) of the Federal
Rules of Civil Procedure. However, Defendant’s reliance on Rule 12(b)(6) is misplaced as
Defendant actually moves to dismiss the Complaint on the ground that Plaintiffs’ claims are
time-barred, which is an affirmative defense and not a Rule 12(b)(6) ground. (Docket Entry No.
17.) Plaintiff opposes. For the reasons set forth below, SuperShuttle’s motion is granted in part
and denied in part.
BACKGROUND
Except as noted otherwise, the following facts are taken from the Plaintiffs’ complaint
and are assumed true for the purposes of this motion. Defendant SuperShuttle is a New York
Corporation that provides airport transportation services. (Compl. ¶¶ 10, 23, Docket Entry No.
1.) Plaintiffs and the putative class members were hired by SuperShuttle as drivers to pick up
customers at airports, hotels, and residences and provide shuttle transportation. (Id. ¶ 23.) Musa
worked as a driver from approximately May 2004 through June 2010, and Elmardi worked as a
driver from approximately September 2006 through December 2010. (Id. ¶¶ 6, 7.) The parties
clarify in their briefs that Musa and Elmardi both entered into franchise agreements with
SuperShuttle. (Def.’s Mem. of Law in Supp. of their Mot. to Dismiss Pursuant to Fed. R. Civ. P.
12(b)(6) & (7) (“Def.’s Mem.”) at 1, Docket Entry No. 17; Pls.’ Mem. of Law in Opp. To Defs.’
Mot. to Dismiss (Pls.’ Mem.) at 1, Docket Entry No. 26.) Franchisees both could operate their
own vans as drivers and subcontract with relief drivers. (Def.’s Mem. at 1; see also Pl.’s Mem.
1-2.)
SuperShuttle exercised control over the means by which the drivers performed their jobs.
(Compl. ¶ 26.) For example, Plaintiffs were not permitted to refuse pick-ups of customers or to
schedule pick-ups and drop-offs according to the drivers’ own schedules. (Id. ¶ 27.) Instead,
Plaintiffs were required to pick-up and drop-off customers in accordance with SuperShuttle’s
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reservation and dispatch system. (Id. ¶ 27.) Plaintiffs also were required to wear SuperShuttle
uniforms and use vans that were painted a specific shade of blue, displayed the SuperShuttle
trademark, had a specific passenger capacity, and had the required interior decorations, signage,
and other interior specifications. (Id. ¶¶ 28, 31.) Plaintiffs were required to pay numerous
operating costs out of their earned wages, including a weekly “franchise” fee, a weekly shuttle
van lease fee, and payments for liability insurance. (Id. ¶ 32.) Plaintiffs allege that, based on the
type of services that Plaintiffs provided and the level of control that Defendant asserted,
SuperShuttle improperly classified the Plaintiffs as independent contractors rather than
employees. (Id. ¶ 33, 34.)
On December 2, 2008, an action was brought in this Court by fifteen current and former
SuperShuttle “independent contractors” against the same Defendants initially named in this
action (the “Reid Action”).
Reid v. SuperShuttle Int’l, Inc., 08-cv-4854 (JG)(VVP).
The
Plaintiffs in the instant action were putative class members in the Reid Action. (Pls.’ Mem. at 2.)
On January 5, 2012, the parties to the Reid Action reached a settlement agreement (Id. at 3), and,
on February 8, 2012, class certification was granted. (Id. at 10.) On April 20, 2012, Musa and
Elmardi, along with over one hundred other class members in the Reid Action, opted out of the
settlement. (Id. at 4, 11.)
Thereafter, on May 15, 2012, Plaintiffs commenced this action against SuperShuttle and
asserted claims for: (1) failure to pay minimum wages under the FLSA; (2) failure to pay
minimum wages and wages for all hours worked in violation of the NYLL; (3) failure to pay
overtime pursuant to the NYLL; (4) improper deductions under the NYLL; (5) and improper
charges under the FLSA. (Compl. ¶¶ 41-79.) SuperShuttle moves to dismiss Plaintiffs’ claims
against it pursuant to Rules 12(b)(6) and 12(b)(7) of the Federal Rules of Civil Procedure,
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claiming that some of Plaintiffs’ claims are time-barred and that Plaintiffs failed to join
necessary parties under Rule 19. (Def.’s Mem. at 1.)
DISCUSSION
I.
Legal Standard
Rule 12(b)(7) provides that an action may be dismissed for failure to join necessary
parties as defined under Rule 19. Fed. R. Civ. P. 12(b)(7). “The Second Circuit has set forth a
two-step test for determining whether the court must dismiss an action for failure to join an
indispensable party.” DePasquale v. DePasquale, 2013 WL 789209 (E.D.N.Y. Mar. 1, 2013),
reconsideration denied, 2013 WL 4010214 (E.D.N.Y. Aug. 5, 2013) (citing Viacom Int’l, Inc. v.
Kearney, 212 F.3d 721, 724 (2d Cir. 2000)). First, the court must determine whether a party is
necessary under Rule 19(a), which provides, in relevant part, that a party must be joined if, “in
that person’s absence, the court cannot accord complete relief among existing parties.” Id.
(citing Fed. R. Civ. P. 19(a)). Second, if a necessary party cannot be joined, the court then must
determine whether the party’s absence warrants dismissal pursuant to Rule 19(b) because the
party also is indispensable. Id. (citing Viacom Int’l, Inc. v. Kearney, 212 F.3d at 725).
II.
Analysis
a.
Plaintiffs’ Class Claims Did Not Toll During the Reid Action
Defendant claims that any FLSA claims accruing prior to three years before the
commencement of this action and any NYLL claims accruing prior to six years before the
commencement of this action are barred by the applicable statutes of limitation. (Def.’s Mem. at
17.) In response, Plaintiffs argue that, pursuant to the Supreme Court’s decision in American
Pipe and Construction Co. v. Utah, 414 U.S. 538 (1974), their claims are not time-barred
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because the statutes of limitation were tolled during the pendency of the Reid Action. (Pls.’
Mem. at 8.)
A two-year statute of limitations applies under the FLSA except in the case of a willful
violation, which has a three-year statute of limitations. 29 U.S.C. § 255(a). For the purposes of
this motion, Defendant assumes that the three-year limitation applies. (Def.’s Mem. at 17.)
Under the statute of limitations applicable to the NYLL, plaintiffs may recover damages going
back six years, regardless of whether the violation is willful or not. Guadalupe v. Tri-State
Employment, Mgmt. & Consulting, Inc., 2013 WL 4547242 (E.D.N.Y. Aug. 28, 2013) (citing
N.Y. Lab. Law § 663(3)).
Under the rule announced in American Pipe and Construction Co. v. Utah, a statute of
limitations may be tolled by the commencement of a class action suit as to all asserted members
of the class. 414 U.S. at 554. The plaintiffs in American Pipe originally brought a timely
putative class action antitrust suit, but class action status was denied by the district court for
failure to satisfy the prerequisite of “numerosity.” Id. at 540-43. Soon thereafter, members of
the putative class moved to intervene as named plaintiffs. Id. at 543-44. The district court
denied the motion to intervene on the basis that the applicable statute of limitations had run. Id.
at 544. On appeal, the Ninth Circuit reversed. The Supreme Court affirmed the Ninth Circuit
Court’s ruling, holding that “the commencement of a class action suspends the applicable statute
of limitations as to all asserted members of the class who would have been parties had the suit
been permitted to continue as a class action.” Id. at 554. The Supreme Court has since extended
the American Pipe tolling rule to those purported class members who file individual actions after
class action status is denied, rather than seek to intervene in the original action. Crown, Cork &
Seal Co., Inc. v. Parker, 462 U.S. 345, 350-51 (1983).
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“The theoretical basis on which American Pipe rests is the notion that class members are
treated as parties to the class action ‘until and unless they received notice thereof and chose not
to continue.’” In re WorldCom Sec. Litig., 496 F.3d 245, 255 (2d Cir. 2007) (quoting American
Pipe and Construction Co. v. Utah, 414 U.S. at 551). Thus, the limitations period does not run
against members of the asserted class until they cease to be members of the class, either upon
denial of class certification, Giovanniello v. ALM Media, LLC, 2013 WL 4016567 (2d Cir. Aug.
8, 2013), or when they opt out. In re WorldCom Sec. Litig., 496 F.3d at 255 (finding that the
tolling rule applies to those members of a putative class who file individual suits before class
certification is resolved); see also Eisen v. Carlisle & Jacquelin, 417 U.S. 176, n.13 (1974).
Defendant argues that American Pipe does not permit tolling of claims in a subsequent
class action, as opposed to individual actions by putative class members. (Def.’s Mem. at 6.) In
Korwek v. Hunt, the Second Circuit held that “the tolling doctrine enunciated in American Pipe
does not apply to permit a plaintiff to file a subsequent class action following a definitive
determination of the inappropriateness of class certification.” 827 F.2d 874, 879 (2d Cir. 1987). 2
In this case, however, there has not been a “definitive determination of the inappropriateness of
class certification.” To the contrary, the purported class was certified in the Reid Action. Thus,
Korwek does not specifically foreclose – nor does it specifically allow – tolling of the Plaintiffs’
claims during the pendency of the Reid Action.
Considering the relevant policy considerations, the Court concludes that the American
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The Korwek plaintiffs had been members of the putative class in a previously filed class action.
Korwek v. Hunt, 827 F.2d at 875-76. Upon a motion to certify the class, the district court
drastically narrowed the scope of the class, thereby excluding the Korwek plaintiffs. Id. at 876.
The Korwek plaintiffs then filed a new class action requesting certification of a class identical in
scope to the broad request rejected in the original suit. Id. The Korwek Court refused to apply
American Pipe tolling under those circumstances, but the court expressly declined to answer the
question of “whether the filing of a potentially proper subclass would be entitled to tolling under
American Pipe.” Id. at 879.
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Pipe tolling rule should not apply to the present class action. First, through the rule announced
in American Pipe and expanded by Crown, Cork & Seal, “[t]he Supreme Court sought to prevent
a ‘needless multiplicity of actions’ which might result if putative class members were required to
file separate actions to hedge against the possibility of the class action failing.” Lawrence v.
Phillip Morris Companies, Inc., 1999 WL 51845, at *3 (citing Crown, Cork & Seal Co., Inc. v.
Parker, 462 U.S. at 351); see also Trief v. Dun & Bradstreet Corp., 144 F.R.D. 193, 203
(S.D.N.Y. 1992) (finding that “[t]he American Pipe tolling rule allows putative class members
to wait on the sidelines, rather than forcing them to congest the courts with defensively filed suits
designed solely to guarantee that such plaintiff's claims are not arbitrarily precluded by the
running of a statute of limitations). Here, the individual claims of the putative class members
who opted out of the Reid Action may have been tolled during the pendency of Reid, and it may
still be possible for many members of the class to bring individual claims against SuperShuttle.
Thus, declining to extend the American Pipe rule to the present circumstances will not threaten
the policy consideration motivating the tolling rule.
Moreover, this case presents the potential for abuse. See Lawrence v. Phillip Morris
Companies, Inc., 1999 WL 51845, at *3 (E.D.N.Y. Jan. 9, 1997) (observing that “Korwek and
cases like it reflect a concern about possible abuse of the American Pipe rule.”) In particular,
courts have expressed concern that members of a putative class may abuse the American Pipe
rule by: 1) attempting to reargue the issue of class certification after it has been denied by filing
new but repetitive complaints, id. (citing Korwek v. Hunt, 827 F.2d at 879); and 2) attempting to
“piggyback one class action onto another and thus toll the statute of limitations indefinitely.” Id.
(citing Korwek v. Hunt, 827 F.2d at 878.) Here, there is no threat of the former type of abuse,
since the class was certified in the Reid Action. However, there remains the potential for a
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subset of the putative class members in the Musa Action to break off and file yet a third class
action suit against SuperShuttle. To allow tolling under these circumstances would invite further
iterations of class actions suits for any subset of putative plaintiffs dissatisfied with the
settlement offered, thereby tolling the statute of limitations indefinitely. Thus, it is consistent
with, although not dictated by, Korwek that tolling should not be permitted under the
circumstances presented in this case.
Accordingly, the Court finds that the applicable statutes of limitation were not tolled on
Plaintiffs’ class claims as a result of the Reid Action. Therefore, Plaintiffs’ FLSA claims
accruing before May 15, 2009 and Plaintiffs’ NYLL claims accruing before May 15, 2006 are
dismissed as time-barred.
b.
Plaintiffs Must Amend the Complaint to Clarify the Putative Class
Defendant argues that Plaintiffs’ complaint should be dismissed because Plaintiffs have
failed to join all necessary parties. (Def.’s Mem. at 5-6.) Specifically, Defendant claims that all
individuals or entities that entered into a franchise agreement with SuperShuttle (the
“Franchisees”) must be joined as Defendants. (Id.) According to SuperShuttle, the Franchisees’
presence is necessary to afford complete relief to any drivers who are part of the putative class
and were employed by the Franchisees through a subcontract. (Id.) In response, Plaintiffs do not
specifically object to Defendant’s joinder analysis. Instead, Plaintiffs assert that this action does
not seek relief for drivers who were not also Franchisees. (Pls.’ Mem. at 4-5.) Plaintiffs have
offered to amend the complaint to clarify the class definition. (Pls.’ Mem. at 5.)
Since the parties’ dispute turns on whether the putative class includes non-Franchisee
drivers, Plaintiffs are directed to amend their complaint to clarify the scope of the putative class
within thirty (30) days of the date of this Order. Accordingly, Defendant’s Rule 12(b)(7) motion
is denied without prejudice to renew after Plaintiffs have amended the Complaint.
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CONCLUSION
For the reasons stated above, SuperShuttle’s motion to dismiss is granted in part and
denied in part. Plaintiffs’ FLSA claims accruing before May 15, 2009 and Plaintiffs’ NYLL
claims accruing before May 15, 2006 are dismissed as time-barred. Defendant’s Rule 12(b)(7)
motion is denied without prejudice to renew after Plaintiffs have amended the Complaint.
Plaintiffs are directed to amend their complaint to clarify the scope of the putative class
by October 30, 2013.
SO ORDERED.
Dated: Brooklyn, New York
September 30, 2013
_______________/s/_____________
DORA L. IRIZARRY
United States District Judge
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