Lusk et al v. Serve U Brands, Inc. et al

Filing 115

DECISION AND ORDER CONVERTING 67 FED. R. CIV. P. 12(c) MOTION FOR JUDGMENT ON PLEADINGS Defs' Motion to Dismiss the Claims of Putative Opt-In Plaintiffs Subject to Individual Dispute Resolution Agreements filed by Seth Berkowitz, Serve U Brands, Inc., Insomnia Cookies, LLC, to FED. R. CIV. P. 56 MOTION FOR SUMMARY JUDGMENT. Defendants are hereby ordered to submit a memorandum of law by Monday, February 11, 2019, addressing the choice-of-law issue and any other issues they b elieve are pertinent to establishing their entitlement to summary judgment under Fed. R. Civ. P. 56. Once Defendants submit their filing, the Court will set a briefing schedule for Plaintiffs' opposition papers and Defendants' reply. Signed by Hon. Michael A. Telesca on 1/14/19. (AFB)

UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF NEW YORK

SKYLER LUSK, TIA COUNCIL, VIKTORIA
O’BRIEN, and JUSTIN BYROAD, on
behalf of themselves and all other
employees similarly situated,

No. 6:17-cv-06451-MAT
DECISION AND ORDER

Plaintiffs,
-vsSERVE U BRANDS, INC., INSOMNIA
COOKIES, LLC, and SETH BERKOWITZ,
Defendants.

INTRODUCTION
Skyler Lusk, Tia Council, Viktoria O’Brien, and Justin Byroad
(collectively, “Named Plaintiffs”), former delivery drivers for
Insomnia Cookies, LLC (“Insomnia”), commenced the instant action
against

Serve

U

Brands,

Inc.,

Insomnia,

and

Seth

Berkowitz

(collectively, “Defendants”) on July 11, 2017, alleging violations
of the Fair Labor Standards Act, 29 U.S.C. § 201 et seq. (“the
FLSA”), as well as violations of the state laws of New York,
Michigan, and Indiana. Docket No. 1. On August 13, 2018, Defendant
filed a Motion to Dismiss the Claims of Putative Opt-In Plaintiffs
Subject to Individual Dispute Resolution Agreements (“Defendants’
Motion

to

Dismiss”).

See

Docket

No.

67.

In

response,

Named

Plaintiffs filed a Cross-Motion to Stay Proceedings for the Six
Putative Opt-In Plaintiffs Subject to Individual Dispute Resolution
Agreements (“Plaintiffs’ Cross-Motion to Stay”). See Docket No. 79.
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For the reasons set forth below, the Motion to Dismiss is converted
to a motion for summary judgment pursuant to Federal Rule of Civil
Procedure (“FRCP”) 56.
BACKGROUND
Pursuant to 29 U.S.C. § 216(b), the Named Plaintiffs filed
consent forms for approximately 88 current and former Insomnia
employees. Since the commencement of the action, Defendants have
identified

six

of

the

Opt-In

Plaintiffs,

i.e.,

Avery

Buggs,

Christopher Lee Caldwell, Dylan Burgett, Hannah Stanger, Michael
Crespo and Ben Sehnert, as individuals who executed Mediation
Agreements which, Defendants assert, contain a provision precluding
them from joining a class action to litigate any employment claims.
Defendants state that the Mediation Agreement also contains a class
and collective action waiver which, Defendants argue, precludes the
individuals who signed Mediation Agreements from participating in
this action. The individuals who signed the Mediation Agreement,
whom the

parties

refer to

as

“DRA Opt-In

Plaintiffs,” filed

Consents to Join this lawsuit against Defendants; the Consents were
filed with the Court on July 11, 2017. See Docket Nos. 3 & 4.
Citing the Mediation Agreement’s class and collective waiver,
Defendants argue in their Motion to Dismiss, inter alia, that (1)
an employee’s right to litigate on a collective basis is a waivable
procedural right, and the DRA Opt-In Plaintiffs waived that right
in the Mediation Agreement to resolve employment disputes with

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Insomnia; (2) contractual collective action waivers, like those in
the Mediation Agreement, are enforceable; (3) the claims asserted
by the DRA Opt-In Plaintiffs here fall within the scope of the
Mediation Agreement and must be resolved pursuant to the terms of
the Mediation Agreement; and (4) the Court should address the
Mediation

Agreement’s

enforceability

prior

to

a

decision

on

conditional class certification is rendered. Defendants further
argue

that

because

the

Opt-in

Plaintiffs

ignored

Defendants’

multiple communications regarding the Agreement, necessitating the
Motion to Dismiss, they should be responsible for Defendants’ fees
and costs associated with making this motion pursuant to Federal
Rule of Civil Procedure (“FRCP”) 41.
For the reasons discussed below, Defendants’ Motion to Dismiss
must be converted to a motion for summary judgment pursuant to Rule
56 of the Federal Rules of Civil Procedure.
DISCUSSION
I.

Standard for Deciding Rule 12(c) Motions
In deciding a Rule 12(c) motion for judgment on the pleadings,

courts “‘employ[ ] the same standard applicable to dismissals
pursuant to Fed. R. Civ. P. 12(b)(6).’” Hayden v. Paterson, 594
F.3d 150, 160 (2d Cir. 2010) (quoting Johnson v. Rowley, 569 F.3d
40, 43 (2d Cir. 2009) (per curiam) (alterations in original;
internal quotation marks omitted in original).
factual

allegations

in

the

complaint
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as

Thus, accepts all

true

and

draw

all

reasonable inferences in the plaintiff’s favor. Ashcroft v. Iqbal,
556 U.S. 662, 129 S. Ct. 1937, 1949 (2009) (internal citation and
quotation marks omitted). To survive a Rule 12(c) motion, the
plaintiff’s complaint “must contain sufficient factual matter,
accepted as true, to state a claim to relief that is plausible on
its face.” Id.
II.

The Rule 12(b)(6) Conversion Requirement
For purposes of deciding motions under Rule 12(b)(6), and by

extension, Rule 12(c), “the complaint is deemed to include any
written instrument attached to it as an exhibit or any statements
or documents incorporated in it by reference.” Int’l Audiotext
Network, Inc. v. Am. Tel. & Tel. Co., 62 F.3d 69, 72 (2d Cir. 1995)
(per curiam) (quoting Cortec Indus., Inc. v. Sum Holding L.P., 949
F.2d 42, 47 (2d Cir. 1991)); see also FED. R. CIV. P. 10(c) (“A copy
of any written instrument which is an exhibit to a pleading is a
part

thereof

for

all

purposes.”).

When

determining

whether

materials “were integral to [a plaintiff]’s complaint, a necessary
prerequisite for that exception is that the ‘plaintiff[ ] rel[y] on
the terms and effect of [the] document in drafting the complaint .
. . ; mere notice or possession is not enough.’” Glob. Network
Commc’ns, Inc. v. City of New York, 458 F.3d 150, 156 (2d Cir.
2006) (quoting Chambers, 282 F.3d at 153; first alteration added;
emphasis and ellipsis in original).
As the Second Circuit has emphasized,
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[u]pholding [Rule 12(b)(6)’s] standard of review is the
requirement that “[i]f . . . matters outside the pleading
are presented to and not excluded by the court, the
motion shall be treated as one for summary judgment and
disposed of as provided in Rule 56, and all parties shall
be given reasonable opportunity to present all material
made pertinent to such a motion by Rule 56.”
Glob. Network Commc’ns, Inc. v. City of N.Y., 458 F.3d 150, 154–55
(2d Cir. 2006) (quoting Fed. R. Civ. P. 12(b); citing Friedl v.
City of N.Y., 210 F.3d 79, 83-84 (2d Cir. 2000) (“This conversion
requirement is strictly enforced whenever there is a ‘legitimate
possibility’ that the district court relied on material outside the
complaint in ruling on the motion.”) (quotation omitted). “As
indicated by the word ‘shall,’ the conversion of a Rule 12(b)(6)
motion into one for summary judgment under Rule 56 when the court
considers matters outside the pleadings is ‘strictly enforce[d]’
and ‘mandatory.’” Glob. Network Commc’ns, Inc., 458 F.3d at 154–55
(quoting

Amaker

v.

Weiner,

179

F.3d

48,

50

(2d

Cir.

1999);

alteration in original; other citation omitted).
III. Conversion Is Required in This Case
Defendants’ motion relies heavily on the Mediation Agreements
signed by the DRA Opt-In Plaintiffs. Defendants have assumed that
the Mediation Agreements are properly considered in connection with
this

Rule

12(c)

motion

to

dismiss.

However,

the

Mediation

Agreements were not attached to Plaintiffs’ Complaint as exhibits;
nor were they incorporated into the Complaint by reference. Indeed,
Defendants, in their recitation of the events leading up to their
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motion to dismiss, state that they provided copies of the Mediation
Agreements to opposing counsel under cover of letter dated June 22,
2018.
The Mediation Agreements were presented to the Court as
exhibits in support of their Motion to Dismiss. However, the Second
Circuit has held that “a district court errs when it ‘consider[s]
affidavits and exhibits submitted by’ defendants. . . .” Friedl,
210 F.3d at

83–84 (2d Cir. 2000) (quoting Kopec v. Coughlin, 922

F.2d 152, 155 (2d Cir. 1991) (collecting cases)). Under these
circumstances, the Court concludes that Defendants’ motion for
judgment on the pleadings is requesting it to consider matters
outside the pleadings, which it is not permitted to do. See, e.g.,
Nakahata v. New York-Presbyterian Healthcare Sys., Inc., 723 F.3d
192, 203 (2d Cir. 2013) (“Because the [collective bargaining
agreements] at issue here were submitted with Defendants’ motions
to dismiss, and not excluded from consideration, the District Court
could have decided these issues pursuant to the summary judgment
standard of Rule 56, but it did not. We cannot affirm the dismissal
on the basis of LMRA preemption pursuant to Rule 12(b)(6) because
such dismissal was premised on matter outside of the pleadings, and
was, therefore, inappropriate.”) (citing Global Network Commc’ns,
Inc., 458 F.3d at 155).
IV.

Additional Briefing Is Required on the Choice of Law Issue
The Mediation Agreements do not appear to contain a choice-of-6-

law provision. “In the absence of a choice of law provision, New
York law allows courts to infer that the parties have agreed to
apply the law of the forum state.” Tripifoods, Inc. v. Mkt., No.
15-CV-00556-FPG-LGF, 2016 WL 7117257, at *3 (W.D.N.Y. Dec. 7, 2016)
(citing Krumme v. WestPoint Stevens Inc., 238 F.3d 133, 138 (2d
Cir. 2000)). Such an inference is permissible when the parties
themselves assume in their submissions to the Court that the law of
the forum

state

controls.

Krumme,

238

F.3d

at

138 (citation

omitted). Here, however, Defendants appear to rely on the Federal
Arbitration

Act,

and

they

also

cite

state

law

cases

from

a

multitude of jurisdictions. Plaintiffs, for their part, insist that
determining

enforceability

of

the

Mediation

Agreements

is

premature. Thus, the parties have not provided the Court with any
basis for inferring that the law of the forum state (New York)
controls.

See Tripifoods, 2016 WL 7117257, at *3 (where parties

have not cited or referred to any state law in their submissions,
there is no indication that the parties have implicitly consented
to the application of New York law, requiring the district court to
conduct a choice of law analysis). The parties therefore will be
directed

to

provide

briefing

on

what

law

applies

to

the

interpretation of the Mediation Agreements here at issue.
CONCLUSION
For

the

foregoing

reasons,

the

Court

hereby

converts

Defendants’ Motion to Dismiss (Docket No. 67) to a Rule 56 motion

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for summary judgment. Defendants are hereby ordered to submit a
memorandum of law by Monday, February 11, 2019, addressing the
choice-of-law issue and any other issues they believe are pertinent
to establishing their entitlement to summary judgment under Rule
56. Once Defendants submit their filing, the Court will set a
briefing schedule.
SO ORDERED.
s/ Michael A. Telesca

HON. MICHAEL A. TELESCA
United States District Judge
Dated:

January 14, 2019
Rochester, New York.

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