Mundell v. DBA/DMC Mining Services Corp. et al

Filing 14

ORDER 1. The Report and Recommendation of Magistrate Judge Blewitt (Doc.11) is ADOPTED IN PART and REJECTED IN PART to thefollowing extent: a. Defendants Motion to Dismiss (Doc. 7) is GRANTED IN PART and DENIED IN PART to the following extent: i. Pl aintiffs Fair Labor Standards Act travel pay claims are DISMISSED with leave to amend; ii. Plaintiffs Pennsylvania Minimum Wage Act and Pennsylvania Wage Payment Collection Law claims are DISMISSED with leave to amend; iii. The Motion is DENIED in all other respects. b. Defendants John Does 1-10 are DISMISSED without prejudice. 2. Plaintiff shall FILE an amended complaint within fourteen (14) days of the entry of this order.(eo)

IN THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF PENNSYLVANIA
BRETT MUNDELL, an individual
and on behalf of all those similarly
situated
Plaintiffs,
v.
DBA/DMC MINING SERVICES
CORP. and JOHN DOES 1-10
Defendants.

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No. 4:12-cv-2614

Hon. John E. Jones III
Hon. Thomas M. Blewitt

ORDER
October 17, 2013
I.

INTRODUCTION
Presently pending before the Court is the Report and Recommendation

(“R&R”) of Magistrate Judge Thomas M. Blewitt (Doc. 11), recommending that
Defendant’s Motion to Dismiss (Doc. 7) be granted. The Plaintiff has filed
objections1 (Doc. 12) to which the Defendant has responded (Doc. 13). After an

1

Where objections to a magistrate judge’s report and recommendation are filed, the court
must perform a de novo review of the contested portions of the report. Supinksi v. United Parcel
Serv., Civ. A. No. 06-0793, 2009 WL 113796, at *3 (M.D. Pa. Jan. 16, 2009) (citing Sample v.
Diecks, 885 F.2d 1099, 1106 n. 3 (3d Cir. 1989); 28 U.S.C. § 636(b)(1)(c)). “In this regard,
Local Rule of Court 72.3 requires ‘written objections which . . . specifically identify the portions
of the proposed findings, recommendations or report to which objection is made and the basis for
those objections.’” Id. (citing Shields v. Astrue, Civ. A. No. 07-417, 2008 WL 4186951, at *6
(M.D. Pa. Sept. 8, 2008).

independent review of the record the Court shall adopt the R&R in part.2 For the
reasons articulated herein, the Court will grant in part and deny in part Defendant’s
Motion to Dismiss. (Doc. 7). We address Plaintiff’s objections seriatim.
II.

OBJECTIONS TO DISMISSAL OF PER DIEM CLAIM WITH
PREJUDICE
The Plaintiff objects to Magistrate Judge Blewitt’s recommendation that we

dismiss the Fair Labor Standards Act (“FLSA”) per diem claims (Count I) with
prejudice.3 (Doc. 12 at 3-9). The Plaintiff alleges the per diem payments are not
reasonably associated to Plaintiff’s actual expenses and therefore the Defendant
erred by not including these payments in calculating the Plaintiff’s regular rate for
purposes of overtime pay. (Doc. 1, ¶¶ 33-36). Per diem payments which do not
“reasonably approximate” actual expenses are to be included in calculating the
2

Magistrate Judge Blewitt recommends that Defendants John Does 1-10 be dismissed as
Plaintiff has failed to perfect service of process within the 120 days required of Rule 4(m). We
agree. We also agree with Magistrate Judge Blewitt’s recommendation that Plaintiff’s Count II
be dismissed with leave to amend. Finally, we agree with Magistrate Judge Blewitt that because
claims under the Pennsylvania Minimum Wage Act and the Pennsylvania Wage Payment
Collection Law (Count III) require a contractual relationship between the employee and
employer, Plaintiff’s claims as drafted must be dismissed because no contract has been alleged.
De Asencio v. Tyson Foods, Inc., 342 F.3d 301, 309 (3d Cir. 2003) (PMWA); Lehman v. Legg
Mason, Inc., 532 F.Supp.2d 726, 733 (M.D. Pa. 2007) (PWPCL). Thus, this claim shall be
dismissed and the Plaintiff given leave to amend.
3

Magistrate Judge Blewitt also recommends that the Plaintiff’s state law claims should
be dismissed with prejudice to the extent they are derivative of the FLSA per diem claims. As we
shall not dismiss the FLSA per diem claims, any state law claims derivative of the FLSA per
diem claims shall also not be dismissed with prejudice. However, as discussed in footnote 2, the
state law claims are deficient for failure to allege the existence of a contractual relationship and
therefore the state law claims shall be dismissed with leave to amend.
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regular rate. 29 C.F.R. § 778.217(c). The Defendant relies on GSA and IRS
standards to aver the per diem payments are reasonable as a matter of law. (Doc. 8
at 7). However, these standards alone cannot establish reasonableness. See Picton
v. Excel Grp., Inc., 192 F.Supp.2d 706, 713-14 (E.D. Tex. 2001). The
reasonableness of the per diem payments is a fact based inquiry set forth on a
“case-by-case basis.” Berry v. Excel Group, Inc., 288 F.3d 252, 254 (5th Cir.
2002). Cognizant of the posture of this action and the factual inquiry required to
determine reasonableness, the Plaintiff has alleged facts within his complaint
sufficient to survive a motion to dismiss.
III.

OBJECTIONS TO RECOMMENDATION THAT CLASS
CERTIFICATION BE DENIED
The Plaintiff objects to Magistrate Judge Blewitt’s recommendation that

class certification be denied. (Doc. 12 at 9-10). While dismissal of class
certification may be decided on the pleadings, it is rare to do so. See Weiss v. Regal
Collections, 385 F.3d 337, 347-48 (3d Cir. 2004). The Plaintiff has yet to file a
Motion for Class Certification and we are granting him leave to amend Counts II
and III. Thus, at this stage in the proceedings, a class certification decision is
premature, and we shall reject this portion of the R&R.4
4

FLSA § 216(b) opt-in collective actions and Rule 23 opt-out class actions are not
inherently incompatible. See Knepper v. Rite Aid Corp., 675 F.3d 249, 261-62 (3d Cir. 2012). As
previously discussed, class certification is not properly before the Court and therefore
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NOW, THEREFORE, IT IS HEREBY ORDERED THAT:
1.

The Report and Recommendation of Magistrate Judge Blewitt (Doc.
11) is ADOPTED IN PART and REJECTED IN PART to the
following extent:.
a.

Defendants’ Motion to Dismiss (Doc. 7) is GRANTED IN
PART and DENIED IN PART to the following extent:
i.

Plaintiff’s Fair Labor Standards Act travel pay claims are
DISMISSED with leave to amend;

ii.

Plaintiff’s Pennsylvania Minimum Wage Act and
Pennsylvania Wage Payment Collection Law claims are
DISMISSED with leave to amend;

iii.
b.

The Motion is DENIED in all other respects.

Defendants John Does 1-10 are DISMISSED without
prejudice.

2.

Plaintiff shall FILE an amended complaint within fourteen (14) days
of the entry of this order.

s/ John E. Jones III

adjudication of this issue is unnecessary at this time.
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John E. Jones III
United States District Judge

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