Varela et al v. North Shore-Long Island Jewish Health System et al
Filing
210
ORDER granting in part and denying in part 168 Motion to Dismiss. For the reasons set forth in the attached Memorandum and Order, IT IS HEREBY ORDERED that the defendants' motion to dismiss is granted in part and denied in part. Specificall y, plaintiffs' RICO and ERISA causes of action are dismissed with prejudice. Plaintiffs' state law claims are also dismissed with prejudice. Defendants' motion to dismiss on the grounds of LMRA preemption is denied at this juncture without prejudice. SO ORDERED. Ordered by Judge Joseph F. Bianco on 3/7/2012. (O'Neil, Jacquelyn)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
_____________________
No 10-CV-1341 (JFB) (ETB)
_____________________
CLAUDIA DESILVA, ET AL.,
Plaintiffs,
VERSUS
NORTH SHORE-LONG ISLAND JEWISH HEALTH SYSTEM, INC., ET AL.,
Defendants.
___________________
MEMORANDUM AND ORDER
March 7, 2012
___________________
JOSEPH F. BIANCO, District Judge:
Plaintiffs Claudia DeSilva, Gregg
Lambdin, Kelly Iwasiuk, Eileen BatesBordies, Margaret Hall, and Brenda Gaines
(collectively, “plaintiffs”) commenced this
action on March 24, 2010, on behalf of
themselves and others similarly situated,
against defendants North Shore-Long Island
Jewish Health System, Inc., North ShoreLong Island Jewish Health Care, Inc.,
Peninsula Hospital Center1, Forest Hills
Hospital, Franklin Hospital, Glen Cove
Hospital, Huntington Hospital Association,
Long Island Jewish Medical Center, Long
Island Jewish Hospital, Zucker Hillside
Hospital, North Shore University Hospital,
Plainview Hospital, Schneider Children’s
1
By Stipulation and Order dated September 9, 2010,
defendant Penninsula Hospital Center was dismissed
from this action.
Hospital, Southside Hospital, Staten Island
University Hospital, Syosset Hospital,
Michael J. Dowling, Joseph Cabral, and
North Shore-Long Island Jewish Health
System
403B
Plan
(collectively,
“defendants” or “LIJ”), alleging violations
of the Fair Labor Standards Act of 1938, 29
U.S.C. §§ 201 et seq. (“FLSA”), the
Employee Retirement Income Security Act
of 1974, 29 U.S.C. §§ 1001 et seq.
(“ERISA”), the Racketeer Influenced and
Corrupt Organizations Act, 18 U.S.C.
§§ 1961 et seq. (“RICO”), and New York
Labor Law (“NYLL”).
Plaintiffs also
alleged a number of state common law
claims, namely: breach of implied oral
contract, breach of express oral contract,
breach of implied covenant of good faith
and fair dealing, quantum meruit, unjust
enrichment, fraud and conversion. Plaintiffs
are seeking, inter alia, unpaid wages and
without prejudice for failure to state a claim.
Plaintiffs’ estoppel claim was dismissed
because, as pled by plaintiffs, “estoppel” is
not a distinct cause of action but instead is
an equitable bar to defendants’ assertion of a
statute of limitations defense. Regarding
plaintiffs’ ERISA claims, plaintiffs’ claim of
failure to keep accurate records was
dismissed without prejudice for failure to
plead exhaustion of administrative remedies.
As to the breach of fiduciary duty claim, the
Court denied defendants’ motion to dismiss
this claim, but held that defendants could
renew this motion after the parties
conducted limited discovery on the issue of
how benefits are determined under the
controlling ERISA plans.
Defendants’
motion to dismiss on the grounds of
preemption under the Labor Management
Relations Act (“LMRA”) was also denied at
this juncture without prejudice.
overtime, an order enjoining defendants
from engaging in the pay violations that
form the basis of plaintiffs’ complaint, an
award crediting plaintiffs for all hours
worked, liquidated damages under the FLSA
and NYLL, and an amount equal to the
value that would make plaintiffs whole for
defendants’ alleged violations.
By Memorandum and Order dated
March 16, 2011, this Court granted in part
and denied in part defendants’ motion to
dismiss the Second Amended Complaint in
this action. DeSilva v. North-Shore-Long
Island Jewish Health System, Inc., 770 F.
Supp. 2d 497 (E.D.N.Y. 2011) (“DeSilva
I”). In particular, the Court dismissed
without prejudice plaintiffs’ FLSA and
NYLL claims—construed only as claims
regarding overtime and not as claims
regarding “straight time” or “gap time”
pay—for failure to state a claim. The Court
also dismissed plaintiff’s RICO cause of
action with prejudice to the extent that this
claim was based upon defendants’ failure to
pay plaintiffs overtime, and thus was
duplicative of plaintiffs’ FLSA claim.
However, to the extent that the RICO cause
of action was based upon defendants’
alleged failure to pay plaintiffs for “straight
time” wages, the Court held that this claim
was preempted by the FLSA. Nevertheless,
the remaining RICO cause of action was
dismissed without prejudice for failure to
state a claim. As to plaintiffs’ state common
law claims, the Court dismissed these claims
with prejudice as preempted by the FLSA to
the extent that they sought overtime wages
and, thus, were duplicative of the FLSA
claim. The Court construed the surviving
common law claims as seeking only unpaid
“straight time” pay. However, plaintiffs’
breach of implied oral contract, breach of
express oral contract, breach of implied
covenant of good faith and fair dealing,
quantum meruit, fraud, and negligent
misrepresentation claims were dismissed
On April 11, 2011, plaintiffs filed a
Third Amended Complaint.
Currently
before the Court is defendants’ motion to
dismiss the Third Amended Complaint. In
particular, defendants argue that: (1)
plaintiffs have failed to correct the pleading
defects identified by the Court with respect
to the civil RICO claim, the ERISA
recordkeeping claim, and the state commonlaw claims; (2) plaintiffs’ newly-added civil
RICO claim based upon the predicate act of
forced labor must be dismissed for failure to
state a claim; (3) plaintiffs’ breach of
fiduciary duty claim under ERISA must be
dismissed because the controlling plan
documents demonstrate that plaintiffs cannot
state such a claim; and (4) the claims of
those plaintiffs who are union members are
preempted by the LMRA. In addition, on
May 13, 2011, plaintiffs renewed their
motion for expedited notice under the FLSA
to affected employees.
For the reasons set forth herein, the
Court agrees with defendants that plaintiffs’
2
have failed to correct the pleading defects
identified in DeSilva I with respect to their
civil RICO, ERISA recordkeeping, and state
common-law claims. Accordingly, having
already given plaintiffs an opportunity to
amend their complaint to correct these
defects, the Court dismisses these claims
with prejudice. In addition, the Court
dismisses with prejudice plaintiff’s ERISA
breach of fiduciary claim, because the Court
agrees with defendants that the controlling
plan documents indicate that plaintiffs
cannot state such a claim. However, as to
defendants’ contention that the LMRA
preempts all of plaintiffs’ claims, the Court
finds that, based on the current record at the
motion to dismiss stage, it cannot conclude
as a matter of law that LMRA preemption
applies here. Thus, defendants’ motion to
dismiss on this ground is denied without
prejudice to renewal at the summary
judgment stage. Finally, as to plaintiffs’
newly-asserted RICO claims based upon the
predicate act of forced labor, this claim is
also dismissed with prejudice.2
Complaint (“TAC”) ¶¶ 69-93.) According
to plaintiffs, each of the hospitals and
locations for which plaintiffs worked is part
of the North Shore-Long Island Jewish
Health System (“LIJ”), which is a
consortium that operates over seventy health
care facilities and centers. (Id. ¶¶ 15-16, 2223.) Plaintiffs purport to represent a class of
over 38,000 current and former employees
of the defendant hospitals and LIJ system
“whose pension and 401(k) or 403(b) plans
were not credited with their non-reduced
weekly wages and correct overtime
compensation” and “who were injured by
defendants’ scheme to cheat employees out
of their property and to convert the
employees’ property, including their wages
and/or overtime pay. . . .” (Id. ¶¶ 7, 9.)
Specifically, plaintiffs contend that LIJ
maintained three illegal pay policies – the
meal and break deduction policy, the unpaid
pre-and post-schedule work policy, and the
unpaid training policy – that denied
plaintiffs and class members compensation
for all hours worked, including overtime
hours and hours that would have been
compensated at applicable premium pay
rates. (Id. ¶¶ 98, 136, 204.) As to the meal
and break deduction policy, plaintiffs note
that defendants’ timekeeping system
automatically deducts time from employees’
paychecks for meals and breaks. (Id. ¶ 100.)
However, plaintiffs allege that they do, in
fact, work during their meals and breaks and
are not paid for that work. (Id. ¶ 103; see
I. BACKGROUND
A. Facts3
Named plaintiffs work or have worked
for defendants in various nursing positions
and in various locations.4 (Third Amended
2
The Court notes that defendants have not challenged
plaintiffs’ re-pled FLSA and NYLL claims based
upon defendants’ alleged failure to pay overtime
wages.
3
The following facts are taken from the Third
Amended Complaint and are not findings of fact by
the Court. Instead, the Court will assume the facts in
the Third Amended Complaint to be true and, for
purposes of the pending 12(b)(6) motion to dismiss,
will construe them in a light most favorable to
plaintiffs, as the non-moving party.
4
Plaintiff Claudia DeSilva has worked as a field
nurse at Franklin Hospital since February 2006.
(TAC ¶ 70.) Plaintiff Gregg Lambdin worked as a
registered nurse and nurse clinician at North Shore
University Hospital from 1995 until 2007. (Id. ¶ 73.)
Plaintiff Kelly Iwasiuk worked as a registered nurse
at “defendants’ Huntington location” from May 2003
until November 2007. (Id. ¶ 76.) Plaintiff Eileen
Bates-Bordies worked as a registered nurse at
Southside Hospital from May 2001 until August
2006. (Id. ¶ 79.) Plaintiff Margaret Hall worked as a
staff registered nurse and field nurse at North Shore
University Hospital and North Shore Home Care
division from July 1991 until April 2009. (Id. ¶ 82.)
Plaintiff Brenda Gaines worked as a staff nurse and a
home care staff nurse for Long Island Jewish
Hospital from July 1990 until June 2009. (Id. ¶ 88.)
3
training programs, but are not paid for all
time spent attending such programs. (Id.
¶¶ 127-32.) As a result of these “unpaid
work policies,” defendants required
plaintiffs and class members to “[w]ork
hours both under and in excess of forty
hours per week and were not paid for all of
those hours.” (Id. ¶¶ 204-05.) Plaintiffs also
contend that, through wage payments and
payroll information provided to employees,
defendants deliberately concealed from
plaintiffs and other employees that they
were not being fully compensated for all
hours worked and “misled them into
believing they were being paid properly.”
(Id. ¶ 140.)
also id. ¶ 105 (“[D]efendants are aware of
such work being performed is because the
defendants know they permit, and often
request, that such work be done by the
employees during their unpaid meal
breaks”).) Plaintiffs further allege that
defendants know, or should have known,
that plaintiffs work through their breaks,
because, inter alia, such work has been
performed in plain sight of defendants’
management and also at management’s
request. (Id. ¶¶ 105-06, 111.) When asked
by employees about the meal and break
deduction policy, “defendants affirmatively
stated that the employees were being fully
paid for the work time for which they were
entitled to be paid, even though defendants
knew compensable work time was being
excluded from the employees’ pay.” (Id. ¶
107.)
Plaintiffs
claim
that
these
representations by defendants were part of a
course of conduct to defraud plaintiffs “from
the pay they were owed, and to mislead
them into believing they had been fully paid
as required by law.” (Id.) Plaintiffs state
that they are entitled to compensation for all
time spent working for defendants, including
during plaintiffs’ breaks, and that “[t]his
additional uncompensated time should have
been paid at overtime rates when Plaintiffs
and Class members’ scheduled shifts
exceeded 40 hours in a week, or when the
uncompensated time from missed or
interrupted meal breaks, pre- and postschedule work, and training time, pushed
their hours for the week over 40.” (Id. ¶¶
113, 93-94.)
B. Procedural History
Plaintiffs filed their original complaint in
this action on March 24, 2010. After the
Court granted in part and denied in part
defendants’ motion to dismiss plaintiffs’
Second Amended Complaint,5 plaintiffs
filed a Third Amended Complaint on April
11, 2011. On May 13, 2011, defendants
filed their motion to dismiss, and plaintiffs
filed their motion for expedited notice to
affected employees pursuant to Section
216(b) of the FLSA. On June 13, 2011,
plaintiffs filed their opposition to
defendants’ motion to dismiss, and
defendants filed their opposition to
plaintiffs’ motion for expedited notice. The
5
Defendants originally had moved to dismiss
plaintiffs’ Amended Complaint. However, during
oral argument on that motion, the Court informed
plaintiffs that their Amended Complaint was clearly
deficient as to their FLSA claim, insofar as it did not
provide sufficient information regarding the named
plaintiffs. Accordingly, the Court granted plaintiffs
leave to file a Second Amended Complaint to remedy
this deficiency, and directed that the complaint as
amended should set forth the facilities at which the
named plaintiffs worked, the positions they held, and
the approximate dates of their employment.
Plaintiffs subsequently filed their Second Amended
Complaint on December 8, 2010.
Furthermore, plaintiffs allege that,
pursuant to defendants’ “unpaid pre- and
post-schedule work policy,” plaintiffs are
required to perform work before and after
their scheduled shifts, but are not fully and
properly compensated for such work. (Id.
¶¶ 117-24.) Likewise, plaintiffs claim that,
under defendants’ “unpaid training policy,”
plaintiffs are required to attend compensable
4
parties submitted their replies in support of
their respective motions on July 8, 2011.
The Court heard oral argument on the
parties’ motions on July 26, 2011. The
parties thereafter submitted several letters to
the Court regarding class definitions and
regarding supplemental authority for the
Court’s consideration.
supported by factual allegations.”
Id.
Second, if a complaint contains “wellpleaded factual allegations[,] a court should
assume their veracity and then determine
whether they plausibly give rise to an
entitlement to relief.” Id. “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. The
plausibility standard is not akin to a
‘probability requirement,’ but it asks for
more than a sheer possibility that a
defendant has acted unlawfully.” Id. at 1949
(quoting and citing Twombly, 550 U.S. at
556-57 (internal citations omitted)).
The motions are fully submitted, and the
Court has considered all of the parties’
arguments.
II. STANDARD OF REVIEW
In reviewing a motion to dismiss
pursuant to Federal Rule of Civil Procedure
12(b)(6), the Court must accept the factual
allegations set forth in the complaint as true
and draw all reasonable inferences in favor
of the plaintiff. See Cleveland v. Caplaw
Enters., 448 F.3d 518, 521 (2d Cir. 2006).
“In order to survive a motion to dismiss
under Rule 12(b)(6), a complaint must
allege a plausible set of facts sufficient ‘to
raise a right to relief above the speculative
level.’” Operating Local 649 Annuity Trust
Fund v. Smith Barney Fund Mgmt. LLC, 595
F.3d 86, 91 (2d Cir. 2010) (quoting Bell Atl.
Corp. v. Twombly, 550 U.S. 544, 555
(2007)). This standard does not require
“heightened fact pleading of specifics, but
only enough facts to state a claim to relief
that is plausible on its face.” Twombly, 550
U.S. at 570.
The Court notes that, in adjudicating this
motion, it is entitled to consider: “(1) facts
alleged in the complaint and documents
attached to it or incorporated in it by
reference, (2) documents ‘integral’ to the
complaint and relied upon in it, even if not
attached or incorporated by reference, (3)
documents or information contained in
defendant’s motion papers if plaintiff has
knowledge or possession of the material and
relied on it in framing the complaint, (4)
public disclosure documents required by law
to be, and that have been, filed with the
Securities and Exchange Commission, and
(5) facts of which judicial notice may
properly be taken under Rule 201 of the
Federal Rules of Evidence.” In re Merrill
Lynch & Co., Inc., 273 F. Supp. 2d 351,
356-57 (S.D.N.Y. 2003) (internal citations
omitted), aff’d in part and reversed in part
on other grounds sub nom., Lentell v.
Merrill Lynch & Co., 396 F.3d 161 (2d Cir.
2005), cert. denied, 546 U.S. 935 (2005);
see also Cortec Indus., Inc. v. Sum Holding
L.P., 949 F.2d 42, 48 (2d Cir. 1991) (“[T]he
district court . . . could have viewed [the
documents] on the motion to dismiss
because there was undisputed notice to
plaintiffs of their contents and they were
integral to plaintiffs’ claim.”); Brodeur v.
The Supreme Court clarified the
appropriate pleading standard in Ashcroft v.
Iqbal, setting forth a two-pronged approach
for courts deciding a motion to dismiss. 556
U.S. 662, 129 S. Ct. 1937 (2009). The
Court instructed district courts to first
“identify[ ] pleadings that, because they are
no more than conclusions, are not entitled to
the assumption of truth.” 129 S. Ct. at 1950.
Though “legal conclusions can provide the
framework of a complaint, they must be
5
City of N.Y., No. 04 Civ. 1859, 2005 U.S.
Dist. LEXIS 10865, at *9-10 (E.D.N.Y. May
13, 2005) (stating court could consider
documents within the public domain on a
Rule 12(b)(6) motion to dismiss).
hours which they had worked, and whether
defendants had included all compensable
time, as well as their status and rights under
the FLSA.” (Id. ¶ 123.) Plaintiffs alleged
that the mailing of these misleading payroll
checks constituted individual acts of mail
fraud, which served as the predicate acts
underlying plaintiffs’ RICO claim. (Id. ¶
126.)
II. DISCUSSION
A. RICO
In their civil RICO claim that was
dismissed by the Court in DeSilva I,
plaintiffs had alleged, inter alia, that
defendants engaged in a scheme to defraud
plaintiffs by concealing that defendants were
willfully and systematically withholding
from plaintiffs their regular or statutorily
required rate of pay for all hours worked.
(Second Amended Complaint (“SAC”) ¶
In furtherance of this scheme,
120.)6
defendants allegedly mailed payroll checks
to plaintiffs that were “false and deceptive
because they misled Plaintiffs and Class
Members about the amount of wages to
which they were entitled, the number of
Here, in contrast, plaintiffs have
abandoned their mail fraud claims and,
instead, have alleged that defendants
violated RICO by engaging in a pattern of
racketeering activity through the predicate
acts of wire fraud and forced labor. In
particular, plaintiffs allege in the TAC that
defendants “devised, intended to devise, and
carried out a scheme to obtain free labor and
services performed by Plaintiffs and Class
Members, by threatening serious harm,
while at the same time cheating Plaintiffs
and Class Members out of their property and
converting Plaintiffs’ and Class Members’
property, including their wages and/or
overtime pay.” (TAC ¶ 157.) Further,
plaintiffs claim that defendants’ scheme
“consisted of illegally, willfully and
systematically withholding or refusing to
pay Plaintiffs and Class Members their
regular or statutorily required rate of pay for
all hours worked in violation of the law . . .
and of concealing from Plaintiffs and Class
Members the fact that they were being
deprived of their wages.” (Id.)
6
The Court notes that, in their Second Amended
Complaint (“SAC”), plaintiffs attempted to allege
RICO violations under 18 U.S.C. § 1962(a) (which
prohibits using income received from a pattern of
racketeering activity to acquire an interest in or to
establish an enterprise engaged in interstate
commerce), § 1962(c) (which prohibits conducting or
participating in the conduct of an enterprise through a
pattern of racketeering activity), and § 1962(d)
(which proscribes conspiring to violate the prior
subsections). See DeSilva I, 770 F. Supp. 2d at 520
n.9. In addition, in the SAC, plaintiffs claimed to
have suffered two injuries: first, interference with
their right to recover due to defendants’ concealment
of their fraud, and, second, reduction in wages
because the fraudulent mailings allowed defendants
to continue their fraudulent scheme. Id. at 520-21.
In their Third Amended Complaint, however,
plaintiffs have abandoned their § 1962(a) and
§ 1962(d) claims, as well as their claim that they
were injured through interference with their right to
recover. Accordingly, the Court here will only
discuss its prior decision as it pertains to plaintiffs’
§ 1962(c) and reduction in wages claims, which are
both relevant to the current motion.
As to the wire fraud allegations,
defendants contend that plaintiffs’ claims
must fail for the same reasons that their mail
fraud claims failed. For the reasons set forth
below, the Court finds that, as with their
mail fraud allegations, plaintiffs have failed
to state a claim for wire fraud because they
have failed to allege how the purportedly
fraudulent
wire
payments
furthered
defendants’ scheme. Because this is the
exact same defect already identified by the
6
Plaintiffs have failed to show how
defendants furthered their allegedly
fraudulent scheme by mailing the
paychecks in question. According to
plaintiffs, the mailed paychecks
fraudulently omitted time that they
had actually worked, and thus
concealed from them the fact that
they were not being fully
compensated. But if the paychecks
were as plaintiffs allege, they did not
further
defendants’
fraudulent
scheme; to the contrary, they made
the scheme’s discovery more likely. .
. . Under plaintiffs’ version of
events, the paychecks did not
accurately reflect the number of
hours worked, although they did
accurately reflect the number of
hours for which plaintiffs were paid.
. . . [H]ere, the plaintiffs . . . know
better: they know how many hours
they have worked and how much
money they have been paid. Merely
by looking at the face of their
paychecks, the plaintiffs can
ascertain whether they are being
underpaid.
And because those
paychecks put them on notice of the
alleged fraudulent scheme, plaintiffs
have failed to state a cause of action
under § 1961(c).
Court in connection with the mail fraud
claims in DeSilva I, 770 F. Supp. 2d at 527,
and because the Court has already provided
plaintiffs with an opportunity to replead
their claims to correct this defect but they
have failed to do so, the Court dismisses
with prejudice plaintiffs’ civil RICO claim
based upon wire fraud. Likewise, as to
plaintiffs’ forced labor allegations, the Court
finds that the “threats of serious harm”
alleged by plaintiffs do not state a claim
under the forced labor statute and, as such,
this claim is also dismissed with prejudice,
for the reasons discussed herein.
The Court will address the predicate acts
of wire fraud and forced labor in turn.
1. Wire Fraud Allegations
As an initial matter, the Court notes that
the elements of a mail fraud and wire fraud
claim parallel each other and, consequently,
the Court’s analysis in DeSilva I with
respect to plaintiffs’ mail fraud allegations is
equally applicable here to plaintiffs’ wire
fraud claims. See United States v. Shellef,
507 F.3d 82, 107 (2d Cir. 2007) (“The
‘essential elements of a mail or wire fraud
violation are (1) a scheme to defraud, (2)
money or property as the object of the
scheme, and (3) use of the mails or wires to
further the scheme.’” (quoting Fountain v.
United States, 357 F.3d 250, 255 (2d Cir.
2004)).
Id. at *3-5. Furthermore, this Court noted
that “[r]elying upon Cavallaro, several
district courts in the Second Circuit have
dismissed complaints that were virtually
identical to the complaint in this case.”
DeSilva I, 770 F. Supp. 2d at 527 (citing
Sampson v. Medisys Health Network Inc.,
No. 10-CV-1342 (SJF) (ARL), 2011 WL
579155, at *6 (E.D.N.Y. Feb. 8, 2011) (“[I]f
plaintiffs were repeatedly not paid for time
worked in violation of the contract, as
plaintiffs allege, the conclusory allegation
that the payroll checks constituted a
fraudulent scheme to conceal that fact will
In DeSilva I, the Court held that
plaintiffs had failed to allege how the
purportedly fraudulent paychecks mailed by
defendants furthered defendants’ scheme.
770 F. Supp. 2d at 527. In so holding, the
Court cited Cavallaro v. UMass Memorial
Health Care Inc., No. 09-CV-40152 (FDS),
2010 WL 3609535 (D. Mass. July 2, 2010),
in which the court had dismissed a RICO
claim that was nearly identical to the claim
brought here:
7
purportedly paid plaintiffs less than the full
amount of wages owed to them–would not
have furthered defendants’ scheme, but
instead would have put plaintiffs’ on notice
of that scheme, by revealing that defendants
were not compensating plaintiffs for all
hours worked. Thus, the Court finds that
plaintiffs have failed to state a claim for wire
fraud. Additionally, because the Court
already identified this exact pleading defect
in DeSilva I and gave plaintiffs an
opportunity to replead to correct the defect,
and because plaintiffs clearly have failed to
do so, the Court dismissed with prejudice
plaintiffs’ civil RICO claim to the extent
that it is premised upon the predicate acts of
wire fraud.7
not support the RICO claim. If plaintiffs are
aware of their hours worked, the payroll
checks would put plaintiffs on notice of any
fraudulent scheme, not conceal it.”);
Nakahata v. New York-Presbyterian
Healthcare Sys., Inc., Nos. 10-CV-2661
(PAC), 10-CV-2662 (PAC), 10-CV-2683
(PAC), 10-CV-3247 (PAC), 2011 WL
321186 (S.D.N.Y. Jan. 28, 2011) (“[A]s the
[Cavallaro court] observed in dismissing a
nearly identical complaint, the mailing of
the paychecks, if they did anything ‘serve[d]
to expose, not further, the alleged fraud.’”);
Wolman v. Catholic Health Sys. of Long
Island, Inc., No. 10-CV-1326 (JS)(ETB),
2010 WL 5491182, at *5-6 (E.D.N.Y. Dec.
30, 2010) (same)). The Court agreed with
the reasoning of the above-cited decisions
and, as such, found that plaintiffs had failed
to state a claim for mail fraud.
2. Forced Labor Allegations
In addition to their
allegations, plaintiffs claim:
Here, plaintiffs’ wire fraud allegations
suffer from the same fatal defect as their
mail
fraud
allegations.
Specifically,
plaintiffs claim that the wire payments made
by defendants purportedly “misrepresented
to Plaintiffs and Class Members that they
were being properly compensated for all
time worked” because “the fraudulent wage
payments wired to Plaintiffs and Class
Members actually represented an amount
less than the full amount of wages owed to
Plaintiffs and Class Members for all
compensable work performed.” (TAC ¶¶
161-62.) Consequently, plaintiffs “relied to
their detriment on the misleading wage
payments that defendants wired to Plaintiffs’
and Class Members’ bank accounts, and
those misleading transmissions were a
proximate cause of Plaintiffs’ and Class
Members’ injuries.” (Id. ¶ 164.) However,
as with the allegedly fraudulent paychecks,
plaintiffs have failed to plead how the wire
payments were made in furtherance of
defendants’ scheme. Again, plaintiffs were
aware of the number of hours they worked
and, accordingly, the wire payments–which
wire
fraud
Defendants’ Scheme also involved
the forced labor of Plaintiffs and
Class Member[s] to perform labor
and services by threatening serious
harm to Plaintiffs and Class
Members. Specifically, defendants
threatened serious financial harm to
Plaintiffs and Class Members in the
event Plaintiffs and Class Members
failed to perform the requested labor
and services for which defendants
were not paying the Plaintiffs and
Class Members.
(TAC ¶ 168.) In particular, plaintiffs allege
that defendants represented that plaintiffs’
“employment would be in jeopardy if
Plaintiffs and Class Members failed to
7
Because the Court finds that plaintiffs have failed to
plead that the purported acts of wire fraud furthered
defendants’ scheme, the Court need not reach
defendants’ remaining arguments as to why
plaintiffs’ wire-fraud based civil RICO claim must
fail.
8
suffer serious harm or physical
restraint,
complete all assigned tasks.” (Id. ¶ 169.)
Plaintiffs claim that they performed labor
and services during their meal breaks, before
and after scheduled shifts, and during
training “out of fear of losing their jobs, and
thus, the fear of suffering serious financial
harm.” (Id. ¶ 170.) Plaintiffs also claimed
that they “feared reputational harm . . . for
failure to perform their required labor and
services.” For example, plaintiffs allege that
“defendants would openly question and
criticize Plaintiffs and Class Members for
being unable to complete their required
assignments within the timeframe of their
scheduled shifts,” which could have a
“detrimental effect” on plaintiffs’ “employee
evaluations, future wage increases, and the
ability to obtain employment elsewhere.”
(Id. ¶ 171.)
shall be criminally liable.
18 U.S.C.
§ 1589(a).
Plaintiffs here claim that
defendants have obtained labor and service
from plaintiffs by means of threats of
serious harm. However, for the reasons set
forth infra, the Court finds that plaintiffs
have not pled a viable RICO claim based
upon the alleged predicate acts of forced
labor.
First, to the extent that plaintiffs’ forced
labor claims are premised upon defendants
forcing plaintiffs to work overtime without
pay, these claims are clearly subsumed
within plaintiffs’ FLSA claim and, therefore,
are preempted for the reasons discussed at
length in DeSilva I, 770 F. Supp. 2d at 51219.
Moreover, plaintiffs’ conclusory
allegations that they provided labor and
services to defendants because defendants
either threatened to fire plaintiffs or berated
plaintiffs in public for not finishing their
work, the Court finds that such allegations
do not state a claim under the forced labor
statute. Specifically, even accepting these
allegations as true, these threats would
merely be threats of adverse but legitimate
consequences, and such threats do not
constitute forced labor. See United States v.
Bradley, 390 F.3d 145, 151 (1st Cir. 2004),
vacated on other grounds, 545 U.S. 1101
(“We do agree that the phrase ‘serious
harm,’ as extended to non-physical coercion,
creates a potential for jury misunderstanding
as to the nature of the pressure that is
proscribed.
Taken literally, Congress’
‘threats’ and ‘scheme’ language could be
read to encompass conduct such as the
employer’s ‘threat’ not to pay for passage
home if an employee left early. Depending
upon the contract, surely such a ‘threat’
could be a legitimate stance for the
employer and not criminal conduct. Thus,
in an appropriate case we think that the court
Under the forced labor statute, 18 U.S.C.
§ 1589:
Whoever knowingly provides or
obtains the labor or services of a
person by any one of, or by any
combination of, the following
means—
(1) by means of force, threats of
force, physical restraint, or threats of
physical restraint to that person or
another person;
(2) by means of serious harm or
threats of serious harm to that person
or another person;
(3) by means of the abuse or
threatened abuse of law or legal
process; or
(4) by means of any scheme, plan, or
pattern intended to cause the person
to believe that, if that person did not
perform such labor or services, that
person or another person would
9
in instructing the jury would be required to
draw a line between improper threats or
coercion and permissible warnings of
adverse but legitimate consequences.”); cf.
Pasamba v. HCCA International, Inc., No.
08-CV-247 (PHX)(NVW), 2008 WL
2562928, at *6 (D. Ariz. June 24, 2008)
(where employer warned nurse whom
employer had recruited from abroad that
“she would be ‘in danger of being deported’
if her employment terminated” and allegedly
coerced plaintiff into signing a promissory
note based on “the threat of having her visa
process terminated to her detriment if she
wanted to obtain a subsequent United States
visa and the threat of owing $10,000 on the
first promissory note,” plaintiff had not
alleged sufficient facts to establish that
defendant had committed RICO predicate
act of forced labor because “warning of
adverse but legitimate consequences to
terminating her employment prematurely
would not constitute abuse of process” under
§ 1589).8 Notably, plaintiffs have not cited
a single case to support their novel theory
that threatening to fire an at-will employee
or berating an employee in public constitutes
forced labor. Thus, plaintiffs’ RICO claim
based upon the predicate acts of forced labor
must be dismissed. In dismissing this claim,
the Court has considered whether to dismiss
with or without prejudice. However, given
that plaintiffs have already been given ample
opportunity to allege a RICO claim and have
failed to do so, the Court declines to grant
plaintiffs yet another opportunity to replead. See De Jesus v. Sears, Roebuck &
Co., 87 F.3d 65, 72 (2d Cir. 1996) (noting
that the Second Circuit has “upheld
decisions to dismiss a complaint without
leave to replead when a party has been given
ample prior opportunity to allege a claim”)
(citing Armstrong v. McAlpin, 699 F.2d 79,
93–94 (2d Cir. 1983) (“Because the
complaint whose allegations were being
considered by the district court was
plaintiffs’ second amended complaint, the
district court did not abuse its discretion in
refusing to give plaintiffs a fourth attempt to
plead.”)).
Accordingly, plaintiffs’ civil
RICO claim is dismissed in its entirety with
prejudice.
B. State Common-Law Claims9
In the Third Amended Complaint,
plaintiffs have alleged seven common law
causes of action for breach of implied oral
contract, breach of express oral contract,
breach of implied covenant of good faith
and fair dealing, quantum meruit, unjust
enrichment/restitution,
fraud,
and
conversion. For the reasons set forth below,
the Court finds that plaintiffs have failed to
9
Defendants argue that plaintiffs have still based
their common-law claims on defendants’ alleged
failure to pay statutory overtime and that,
accordingly, plaintiffs’ state-law claims are still
preempted under the FLSA as discussed in DeSilva I.
The Court disagrees. Having reviewed the Third
Amended Complaint, plaintiffs’ state-law claims are
premised on defendants’ failure to pay plaintiffs for
all hours worked including at “applicable premium
pay” rates. Although the Court noted in DeSilva I
that it was not entirely clear whether these
“applicable premium pay” claims were subsumed
within the non-preempted “straight time” claims or
arose separately from those claims, the Court
nonetheless held that “to the extent that these
premium pay rates were set by plaintiffs’ alleged
employment contracts and not by the minimum
overtime pay standards set forth in the FLSA, the
premium pay claims also are not be duplicative of
their FLSA claims and, thus, are not preempted.”
770 F. Supp. 2d at 533 n.18. That reasoning still
applies here. Accordingly, construing the allegations
in plaintiffs’ favor for purposes of defendants’
motion to dismiss, the Court finds that plaintiffs
common law claims are based upon the pay rates set
in the alleged employment contracts, and not by the
FLSA, and that such claims accordingly are not
preempted.
8
Again, to the extent plaintiffs claim that defendants’
threats were illegitimate because they forced
plaintiffs to work overtime without the pay that they
were entitled to under the FLSA, such a claim is
duplicative of plaintiffs’ FLSA claim and is
preempted.
10
correct the pleading defects identified by the
Court in DeSilva I, and, accordingly,
plaintiffs’ common law claims are dismissed
with prejudice.10
[t]he terms of this express oral
contract included defendants’
explicit promise to compensate
Plaintiffs and Class members for
‘all hours worked,’ in return for
the labor and services provided
by Plaintiffs and Class members.
The labor and services provided
by Plaintiffs and Class members
included tasks, as described in
detail above, performed by
Plaintiffs and Class members
pursuant to defendants’ Unpaid
Work policies.
First, as to plaintiffs’ fraud claim, the
Court agrees with defendants that plaintiffs
have failed to satisfy the particularity
requirements of Federal Rule of Civil
Procedure 9(b).
As acknowledged by
plaintiffs, Rule 9(b) requires all averments
of fraud and the circumstances constituting
fraud to be stated with particularity. The
reasons discussed supra, for the dismissal of
plaintiffs’ RICO claims apply with equal
force to plaintiff’s fraud claim.
See
Nakahata, 2011 WL 321186, at *6.
Accordingly, plaintiffs’ fraud claim is
dismissed with prejudice.
(TAC ¶ 203.) Plaintiffs allege that this
language satisfies their burden to plead the
specific provisions of the contract upon
which liability is predicated. However,
again, plaintiffs’ allegations are merely
general and conclusory.
Accordingly,
because plaintiffs’ TAC fails to adequately
plead breach of implied and express oral
contract, those claims are dismissed with
prejudice. Moreover, given that plaintiffs’
contractual claims have been insufficiently
pled in the Third Amended Complaint, the
Court finds that plaintiffs’ breach of implied
covenant of good faith and fair dealing
claim, which is based upon the same
conduct giving rise to the contract claims,
also cannot survive.11 See Blessing v. Sirius
Second, plaintiffs fail to plead either a
breach of express contract or a breach of
implied contract because they still do not
“allege the essential terms of the parties’
purported contract in nonclonclusory
language, including the specific provisions
of the contract upon which liability is
predicated.” Sirohi v. Trustees of Columbia
Univ., No. 97-CV-7912, 1998 WL 642463,
at *2 (2d Cir. Apr. 16. 1998) (quoting Sud v,
Sud, 621 N.Y.S.2d 37, 38 (App. Div. 1995));
see also Nakahata 2011 WL 321186, at *6.
The Third Amended Complaint alleges that
“[d]efendants contracted to hire Plaintiffs
and Class Members at a set rate of pay, with
a minimum work schedule for a particular
position, and under set terms of
employment.” (TAC at ¶¶ 202, 210.) The
Third Amended Complaint further alleges
that
11
Plaintiffs argue that their claim is based on
“something other than defendants’ alleged breach of
the employment contracts.” (Pls.’ Opp. Memo at
n.13.) Plaintiffs point to their allegations in the Third
Amended Complaint that “[p]laintiffs and Class
Members feared reputational harm, both internally
and externally, for failure to perform their required
labor and services. Specifically defendants would
openly question and criticize Plaintiffs and Class
Members for being unable to complete their required
assignments . . . .” and that “[t]his fear of reputational
harm compelled Plaintiffs and Class members to
perform the labor and services required by defendants
outside the confines of their scheduled shifts. (TAC
¶¶ 171, 172; Pls.’ Opp. Memo at n.13.) However, the
Court finds that despite these allegations, it is clear
that plaintiffs’ breach of implied covenant of good
10
As already discussed at length in DeSilva I, to the
extent plaintiffs premise their state common law
claims on alleged failures to provide statutorily
required compensation for overtime hours, those
claims must be dismissed as preempted by the FLSA.
770 F. Supp. 2d at 530-33.
11
XM Radio Inc., 756 F. Supp. 2d 445, 460
(S.D.N.Y. 2010) (“Under New York law, a
cause of action for breach of the implied
covenant of good faith and fair dealing
should be dismissed where it is ‘duplicative
of the insufficient breach of contract
claim.’”) (quoting Jacobs Private Equity,
LLC v. 450 Park LLC, 22 A.D.3d 347, 803
N.Y.S.2d 14, 15 (2005) and citing Triton
Partners LLC v. Prudential Secs., Inc., 301
A.D.2d 411, 752 N.Y.S.2d 870, 870 (2003)).
benefit conferred upon defendants by
Plaintiffs and Class members was at least
the applicable hourly rate for the time
worked, including premium pay.” (TAC ¶
221.) However, plaintiffs have failed to
plead how the “reasonable value for the
benefit conferred” can be calculated.
Plaintiffs also fail to plead where the
applicable hourly rate can be found or how it
can be calculated. Accordingly, plaintiffs’
claim for quantum meriut must also be
dismissed with prejudice in its entirety.
Third, plaintiffs’ quantum meriut claim12
must also be dismissed because plaintiffs
have failed to correct the defects present in
the Second Amended Complaint or in their
Third Amended Complaint. Plaintiffs have
set forth no more than vague and conclusory
allegations regarding what services they
provided to defendants or what the
reasonable value for these services was. See
Singerman v. Reyes, 240 A.D.2d 335, 659
N.Y.S.2d 762, 763 (1997). Plaintiffs merely
allege that “[t]he reasonable value for the
Finally, plaintiffs’ claim for conversion
must also fail.13 “To state a cause of action
for conversion of money, the money must be
described or identified in the same as a
specific chattel. In other words, the money
must be specifically identified and
segregated.” Global View Ltd. Venture
Capital v. Great Central Basin Exploration,
L.L.C., 288 F. Supp. 2d 473, 480 (S.D.N.Y
2003) (internal quotation marks and
citations omitted). Here, plaintiffs have
failed to specifically identify the tangible
funds that were converted, but instead seek
to enforce an obligation to pay money owed
in the form of wages owed. See Ehrlich v.
Howe, 838 F. Supp. 482, 492 (S.D.N.Y
1994) (“[a]n action for conversion does not
lie to enforce a mere obligation to pay
money”). Accordingly, plaintiffs’ complaint
must be dismissed.
faith and fair dealing claim is based on the same
conduct and facts as plaintiffs’ breach of contract
claims.
12
In DeSilva I the Court did not dismiss plaintiffs’
unjust enrichment claim because defendants did not
make any arguments regarding why this claim should
be dismissed. DeSilva I, 770 F. Supp. 2d at 534.
Defendants now argue that quantum meruit and
unjust enrichment/restitution claims “[a]re not
separate causes of action under New York law, but
are instead conceptualized as different facets of a
single quasi contract cause of action and should be
treated as such.” (Defs.’ Memo at 13 (citing MidHudson Catskill Rural Migrant Ministry, Inc. v. Fine
Host Corp., 418 F.3d 168, 175 (2d Cir. 2005); David
R. Maltz & Co., No. 07-CV-1049 (WDW), 2010 WL
1286308, at *10 (E.D.N.Y. March 31, 2010); Seiden
Assocs., Inc. v. ANC Holdings, Inc., 768 F. Supp. 89,
96 (S.D.N.Y. 1991) rev’d on other grounds 959 F.2d
425 (2d Cir. 1992); Clark-Fitzpatrick, Inc. v. Long
Island Rail Road Co., 70 N.Y.2d 382, 388, 516
N.E.2d 190, 193, 521 N.Y.S.2d 653, 656 (1987).)
This Court agrees and finds that for the same reasons
that plaintiffs’ quantum meriut claim will be
dismissed, plaintiffs’ unjust enrichment/restitution
claim must also be dismissed.
Thus, for the reasons set forth supra,
plaintiffs’ state law claims must be
dismissed with prejudice in their entirety.
13
The Court notes that in DeSilva I the Court did not
dismiss plaintiffs’ conversion claim because the only
argument put forth by the defendants was that it was
duplicative of the contract claims. DeSilva I, 770 F.
Supp. 2d at 534. However, defendants now argue
that the conversion claim should be dismissed on
alternative grounds. This Court agrees.
12
C. ERISA Claims
D. LMRA Preemption
In plaintiffs’ Third Amended Complaint,
plaintiffs again bring a cause of action under
ERISA alleging that the defendants
breached their fiduciary duties under
ERISA.14 For the reasons set forth below,
plaintiffs’ claim under ERISA is dismissed
with prejudice.
Defendants also move to dismiss
plaintiffs’ Third Amended Complaint on the
ground that plaintiffs’ claims are preempted
by the LMRA. As in defendants’ motion to
dismiss the Second Amended Complaint,
defendants argue that because plaintiffs’
claims will require the interpretation of a
collective bargaining agreement (“CBA”),
these claims are preempted by Section 301
of the LMRA, which, according to
defendants, “preempts the field with respect
to claims ‘substantially dependent on
analysis
of
a
collective-bargaining
agreement.’” (Defs.’ Memo. at 18 (quoting
Caterpillar Inc. v. Williams, 482 U.S. 386,
395, 107 S.Ct. 2425, 96 L.Ed.2d 318
(1987)).)
In DeSilva I, the Court ruled that “if the
controlling plan documents reveal that
benefits are tied to compensation actually
paid – rather than to hours worked or
compensation earned through hours worked
– then plaintiffs have failed to state an
ERISA cause of action.” DeSilva I, 770 F.
Supp. 2d at 545 (emphasis in the original).
Each of the plan documents annexed to
defendants’ motion to dismiss defines
benefits in terms of “compensation” and
defines compensation in terms of wages
actually paid.15 (Chen Dec. Ex. A – Ex. C.)
Accordingly, plaintiffs’ breach of fiduciary
duty claim under ERISA is dismissed with
prejudice.16
In DeSilva I, the Court denied
defendants’ motion to dismiss without
prejudice on this ground. DeSilva I, 770 F.
Supp. 2d at 546. The Court stated
Even assuming arguendo that
defendants
are
correct
that
plaintiffs’ claims will require
14
Plaintiffs do not appear to be bringing a claim for
failure to keep accurate time of “all time worked”
under Section 209 of ERISA. However, defendants
point to plaintiffs’ allegation in paragraph 152 of the
Third Amended Complaint and argue that plaintiffs’
record keeping claim under ERISA must be
dismissed for failure to plead exhaustion of
administrative remedies. (Defs.’ Memo at 15.)
Although the Court does not believe plaintiffs were
intending to plead a record keeping claim under
ERISA, to the extent that one was pled, it is
dismissed with prejudice.
15
The Court can consider the plan documents on a
motion to dismiss because they are incorporated by
reference in the Third Amended Complaint and, in
any event, are integral to the claim.
16
Although plaintiffs do not dispute that each
applicable plan defines benefits in terms of
compensation, plaintiffs attempt to argue that they
have stated a valid ERISA claim with respect to those
plans that “define ‘compensation’ broadly and do not
limit wages to only those reported on a W-2,” and
with respect to those plans that establish a benefit
vesting threshold tied to “hours of service.” (Pls.’
Opp. Memo at 22.) After reviewing the plan
documents, the Court finds the plaintiffs’ argument to
be without merit.
First, hours of service is not
relevant to the question of whether ERISA benefits
under the plans are tied to wages paid. See Mathews
v. ALC Partner, Inc., No. 08-CV-010636, 2009 WL
3837249, at *6-7 (E.D. Mich. Nov. 16, 2009):
Henderson v. UPMC, No. 09-CV-187J, 2010 WL
235117, at *2-3 (W.D. Pa. Jan 11, 2010) aff’d 640
F.2d 524 (3d Cir. 2011). Moreover, the three plans
identified by plaintiffs as allegedly tying benefits to
wages earned instead of wages paid (The Saving Plan
for Employees of Southside Hospital, The Saving
Plan for Registered Nurses of South Side Hospital
and the North Shore-Long Island Cash Balance Plan)
clearly define benefits in terms of compensation and
define compensation in terms of wages actually paid.
Accordingly, plaintiffs’ claims are without merit.
13
preemption. (TR17 15:9-14). This Court
agrees with plaintiffs that, at this stage, it is
premature to determine whether or not the
plaintiffs’ claims are preempted by the
CBAs because the Court is unable to
determine in this particular case, at the
motion to dismiss stage, whether the CBAs
will need to be interpreted to resolve the
claims in this case.
interpretation of a CBA and thus are
preempted, and even if “many” LIJ
employees are unionized, it is not
clear which of the named plaintiffs
or class members are unionized, if
any. Accordingly, it is not possible
to determine based upon the
pleadings which of the named
plaintiffs and class members might
have
claims
that
require
interpretation of a CBA, and the
Court, therefore, must deny
defendants’ motion to dismiss at
this juncture, without prejudice.
“The Second Circuit has noted that the
boundary between claims requiring
‘interpretation’ of a CBA and those that
require the CBA be ‘consulted’ is an
elusive one.” Gordon v. Keleida Health,
No. 08-CV-378S, 2009 WL 4042929, at *3
(W.D.N.Y. Nov. 19, 2009) (citing Wynn v.
AC Rochester, 273 F.3d 153, 158 (2d Cir.
2001)); see also Pruell v. Caritas Christi,
645 F.3d 81, 85 n.4 (1st Cir. 2011) (noting
uncertainties in the law regarding, inter
alia, “what it means to ‘interpret,’ rather
than merely ‘consult,’ a CBA, and
remanding for determination of whether
any CBA is implicated by the claims
asserted).
Id. Plaintiffs were also ordered to “to file an
amended complaint that includes specific
factual allegations that state which, if any, of
the named plaintiffs are unionized and,
accordingly, which of the named plaintiffs
are subject to the terms of a CBA.” Id.
Accordingly, in the Third Amended
Complaint, plaintiffs indicate that named
plaintiff Kelly Iwasiuk was a member of the
Huntington Hospital Nurses’ Association
and was subject to their CBA and that Eileen
Bates-Bordies is a member of the NYSNA
and subject to their CBA. (TAC ¶¶ 78, 81.)
As the court in the Western District of
New York explained,
Defendants argue that the two CBAs will
need to be consulted by the Court to
determine whether or not the defendants had
actual or constructive knowledge of the
alleged unscheduled work that they failed to
report and were ultimately not compensated
for. (Defs.’ Memo at 18, 21). Plaintiffs
contend that the Court does not need to
interpret a CBA provision to make a
determination as to whether there was notice
because, for example, supervisors at a
particular hospital observe the fact that
people are working during their meal break,
(Pls.’ Opp. Memo at 28.) At oral argument
on July 26, 2011, plaintiff also argued that at
this stage of the litigation it is too early to
tell whether or not the CBA requires
[c]ourts first consider whether the
right at issue derives from state law
or solely from a provision of the
CBA. If it is the latter, the claim is
preempted.
Whether the right
derives from state law, the court
must go on to consider whether the
state
law
claim
requires
interpretation of a provision of the
CBA. If contract interpretation is
required, the claim is preempted.
17
“TR” refers to the transcript of the Oral Argument
held on July 26, 2011.
14
resolution of the IMWL claim will not
require interpretation of the ‘authorized by
management’ clause, which in turn means
that the presence of the clause in the CBAs
does not result in preemption.”).
Gordon, 2009 WL 4042929, at *3 (citing
Levy v. Verizon Info. Servs. Inc., 498 F.
Supp. 2d 256, 259 (E.D.N.Y. 2007)).
In the instant case, as a threshold
matter, defendants did not provide the
relevant CBA provision covering an
employee for the entire period at issue;
rather, they attached two CBAs which do
not cover the entire statute of limitations
period.
Similarly, defendants contend that the
Court must interpret the CBA in order to
decide whether defendants had knowledge
that plaintiffs were working without
compensation that is required by the FLSA,
because the CBAs “require employees to
make the employer ‘aware’ of missed meal
breaks.” (Defs.’ Memo at 21.) However,
plaintiffs intend to prove, inter alia, that
defendants had actual knowledge that
plaintiffs were working through their meal
breaks without compensation, and thus any
interpretation of this CBA provision may
become irrelevant. Finally, several of the
CBA provisions cited by defendants would
only be referenced to determine damage,
and would not provide a basis for
preemption. See Vera v. Saks & Co., 335
F.3d 109, 115 (2d Cir. 2003) (a claim is not
preempted where its “application required
mere referral to the CBA for ‘information
such as rate of pay and other economic
benefits that might be helpful in
determining damages to which a worker
prevailing in a state-lawsuit is entitled’”
(quoting Lingle v. Norge Div. of Magic
Chef, Inc., 486 U.S. 399, 413 n.12 (1988))).
In any event, even if CBAs for the
entire period were submitted, it is too early
to determine whether the CBAs need to be
consulted or interpreted.
The Court
recognizes that, in certain cases, the
preemption issue can be decided based
upon the pleadings. See, e.g., Levy, 498 F.
Supp. 2d at 596; Ellis v. HarperCollins
Pubs., Inc., No. 99-CV-12123 (DLC), 2000
WL 802900, at *2 (S.D.N.Y. June 21,
2000). This case, however, is not one of
them. In particular, the Court cannot
conclude at this juncture that interpretation
of the CBAs will be required to resolve
plaintiffs’ claims. For example, defendants
cite several examples of factual issues that
they assert will require interpretation of a
CBA, such as provisions in the CBA
regarding compensation for meal breaks
with supervisory approval. (See Defs.’
Memo at 21-22.)
Plaintiffs, however,
counter that they intend to prove their
claims based upon statutory and common
law obligations, rather than any violation of
the CBA, and that defendants cannot avoid
paying overtime required by statute simply
because the employee was unable to obtain
“supervisory
approval”
under
the
provisions of the CBA. Thus, it is unclear
at this juncture whether interpretation of
these types of provisions will be required.
See, e.g., Hawkins v. Securitas Security
Services USA, Inc., No. 09 C 3633, 2011
WL 5122679, at *6 (N.D. Ill. Oct. 28,
2011) (“It follows that the court’s
In short, construing the allegations in
the Third Amended Complaint most
favorably to plaintiffs, they may be able to
demonstrate that no interpretation of the
CBAs is required in connection with their
claims. Thus, this preemption issue –
namely, whether the claims require
interpretation,
rather
than
merely
consultation with, the CBAs – cannot be
resolved at the motion to dismiss stage.
See, e.g., Hintergerger v. Catholic Health
System, No. 08-CV-948S, 2012 WL
125152, at *4 (W.D.N.Y. Jan. 17, 2012)
15
(“Because it is not yet evident which
Plaintiffs are members of a bargaining unit
or which CBAs are relevant, this Court has
no basis upon which to evaluate the need to
refer to or interpret any wage-related
provision(s). It may well be that, with
more
information,
Defendants
can
demonstrate preemption. At this juncture,
however, their showing is insufficient to
establish subject matter jurisdiction based
on the LMRA.”); Hinterberger v. Catholic
Health, No. 08-CV-380S, 2009 WL
4042718, at *5 (W.D.N.Y. Nov. 19, 2009)
(“It may well be that Plaintiffs’ NYLL
claim is preempted, in whole or in part.
However, in the Court’s considered view,
the time to make that determination is after
the parties and the Court are clear on which
bargaining units are implicated in this
action and which CBA or CBAs apply.”);
Andrako v. United States Steel Corp., No.
07-1629, 2008 WL 2020176, at *5 (W.D.
Pa. May 8, 2008) (“Because, viewing the
Complaint in the light most favorable to
Plaintiff, the FLSA claim is not dependent
on the interpretation of a disputed provision
of the CBA, it would be improper for me to
dismiss the FLSA claim on that basis at this
stage of the proceedings.”).
previously identified by the Court’s
Memorandum and Order. Moreover, in
requesting leave to re-plead in a conclusory
manner, plaintiffs have failed to articulate
how another amended pleading could cure
the defects that continue to exist in their
pleadings as it relates to these claims.
Under these circumstances, further leave to
re-plead is unwarranted as futile. Thus, as
noted supra, the RICO claims and common
law state claims are dismissed with
prejudice. See, e.g., Denny v. Barber, 576
F.2d 465 (2d Cir. 1978) (holding plaintiff
was not entitled to “still a third go-around”
where district judge, in dismissing the initial
complaint, had put plaintiff’s counsel on
notice of the defects); see also Tyler v. Liz
Claiborne, Inc., No. 09 Civ. 04147 (RJH),
2011 WL 44998983, at *17 (S.D.N.Y. Sept.
29, 2011) (“[A]s plaintiff has already
amended his complaint twice, dismissal with
prejudice is appropriate at this stage in the
litigation.”); Harris v. Westchester Cnty.
Medical Center, No. 08 Civ. 1128, 2011 WL
2637429, at *4 (S.D.N.Y. July 6, 2011)
(dismissing third amended complaint with
prejudice); Treppel v. Biovail Corp., No. 03
Civ. 3002, 2005 WL 2086339, at *12
(S.D.N.Y. Aug. 30, 2005) (“[T]he Court
finds that leave to amend would be futile
because plaintiff has already had two bites at
the apple and they have proven fruitless.”).
Accordingly,
the
Court
denies
defendants’ motion to dismiss on
preemption grounds without prejudice to
renewal at the summary judgment stage.
IV. LEAVE TO RE-PLEAD
In a conclusory fashion in their
opposition papers, plaintiffs request leave to
re-plead if the Court finds that the RICO and
common law claims are subject to dismissal.
However, in its discretion, the Court
concludes that leave to re-plead is
unwarranted.
Specifically, plaintiff has
already amended the complaint several
times and, in the most recent amended
pleading, failed to correct the deficiencies
16
V. CONCLUSION
For the foregoing reasons, defendants’
motion to dismiss is granted in part and
denied in part.
Specifically, plaintiffs’
RICO and ERISA causes of action are
dismissed with prejudice. Plaintiffs’ state
law claims are also dismissed with
prejudice. Defendants’ motion to dismiss on
the grounds of LMRA preemption is denied
at this juncture without prejudice.
SO ORDERED.
________________________
JOSEPH F. BIANCO
United States District Judge
Date: March 7, 2012
Central Islip, NY
*
*
*
Plaintiffs are represented by J. Nelson
Thomas, Esq. and Michael J. Lingle, Esq. of
Thomas & Solomon LLP, 693 East Avenue,
Rochester, New York 14607. Defendants
are represented by Anthony J. D’Auria, Esq.
of Winston & Strawn LLP, 200 Park
Avenue, New York, New York 10166.
17
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