Wright et al v. Waste Pro USA Inc et al
Filing
187
ORDER denying 178 Motion to Dismiss and ordering parties to sever in accordance with this ORDER Signed by Honorable David C Norton on November 12, 2019.(cdan, )
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF SOUTH CAROLINA
CHARLESTON DIVISION
ANTHONY WRIGHT, DANIEL HANSON,)
and KENNETH PRIVETTE, all individually)
and on behalf of all others similarly situated,)
)
Plaintiffs,
)
)
vs.
)
)
WASTE PRO USA, INC.,
)
WASTE PRO OF FLORIDA, INC.,
)
WASTE PRO OF SOUTH CAROLINA,
)
INC., and WASTE PRO OF NORTH
)
CAROLINA, INC.,
)
)
Defendants.
)
)
No. 2:17-cv-02654-DCN
ORDER
The following matter is before the court on defendants Waste Pro of South
Carolina (“Waste Pro SC”) and Waste Pro of North Carolina’s (“Waste Pro NC”)
(collectively, “defendants”) motion to dismiss for lack of subject-matter jurisdiction,
failure to state a claim, and preemption, ECF No. 178. For the reasons discussed below,
the court denies the motion, severs the lawsuit, and orders plaintiffs to file amended
complaints consistent with this order.
I. BACKGROUND
Plaintiffs brought this action against defendants individually and on a collective
and class-wide basis. Plaintiffs are waste disposal drivers for defendants. They claim
that, due to the defendants’ company-wide policies, they were deprived of wages for
hours actually worked. According to plaintiffs, defendants did this in the following
ways: (1) erroneously calculating their prevailing hourly rate; (2) only paying plaintiffs
“half-time” for all hours worked over forty hours in a given workweek; (3) requiring
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them to perform pre-shift and post-shift duties while not clocked in; and (4) automatically
deducting thirty minutes for lunch breaks that defendants knew plaintiffs worked through.
Plaintiffs bring this action on behalf of all other similarly situated non-exempt waste
disposal drivers who were paid a day rate and who have been employed by Waste Pro
entities throughout the United States, at any time from September 29, 2014 through the
final disposition of this matter. Plaintiffs all filed consent forms to join this collective
action lawsuit against Waste Pro USA. ECF Nos. 30-3, 30-4, 30-5. However, each
plaintiff specifies that they work or worked for a particular Waste Pro facility—plaintiff
Anthony Wright worked at Waste Pro’s facility in Florida, plaintiff Daniel Hansen in
South Carolina, and plaintiff Kenneth Privette in North Carolina.
The procedural history of this case is complex. Plaintiffs filed suit in this court on
October 2, 2017 against Waste Pro SC, Waste Pro NC, Waste Pro of Florida, Inc.
(“Waste Pro FL”), and Waste Pro USA, Inc. (“Waste Pro USA”). Plaintiffs filed their
second amended complaint on December 5, 2017, bringing the following causes of
action: (1) violation of the Fair Labor Standards Act (“FLSA”), 29 U.S.C. §§ 201, et seq.;
(2) violation of the South Carolina Payment of Wages Act (“SCPWA”), South Carolina
Code §§ 41-10-10, et seq.; and (3) violation of the North Carolina Wage and Hour Act,
North Carolina General Statutes §§ 95-25.1, et seq.. ECF No. 30-2. On December 20,
2017, Waste Pro USA and Waste Pro FL filed a motion to dismiss for lack of subject
matter jurisdiction, lack of personal jurisdiction, and failure to state a claim, and also
seeking the dismissal of plaintiffs’ North Carolina claim based on preemption grounds.
ECF Nos. 37 and 38. Waste Pro SC and Waste Pro NC filed nearly identical motions that
same day but declined to file motions to dismiss for lack of personal jurisdiction. ECF
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Nos. 39 and 40. On January 16, 2018, plaintiffs filed virtually identical responses to all
of the motions. ECF Nos. 46, 47, 48, and 49. On February 2, 2018, defendants filed a
joint reply to those responses. ECF No. 54. Pursuant to the court’s order to conduct
jurisdictional discovery, Waste Pre USA and Waste Pro FL filed their supplemental
briefing on the personal jurisdiction issue on November 30, 2018, ECF No. 124, and
plaintiffs filed their supplemental briefing on February 15, 2019, ECF No. 141.
Defendants filed a reply to plaintiffs’ brief on February 25, 2019. ECF No. 143.
On July 25, 2019, the court filed an order granting Waste Pro USA’s and Waste Pro
FL’s motion to dismiss for lack of personal jurisdiction and dismissing those defendants
from the case (the “July 25 Order”). Accordingly, the court dismissed all plaintiffs who
were not employed by the remaining defendants, Waste Pro SC and Waste Pro NC.
Because he was an employee of Waste Pro FL, Wright was dismissed from the case as a
plaintiff. The July 25 Order further found that plaintiffs lacked standing to jointly assert
claims against Waste Pro SC and Waste Pro NC and ordered plaintiffs to file an amended
complaint in which the plaintiffs employed by Waste Pro NC (the “North Carolina
plaintiffs”) would proceed against Waste Pro NC or the plaintiffs employed by Waste Pro
SC (the “South Carolina plaintiffs”) would proceed against Waste Pro SC. Instead, on
August 9, 2019, plaintiffs collectively filed their Third Amended Complaint, ECF No.
173, under which they proceeded jointly against Waste Pro SC and Waste Pro NC. On
August 23, 2019, defendants filed a motion to dismiss the Third Amended Complaint,
ECF No. 178. On September 6, 2019, plaintiffs responded in opposition, ECF No. 181,
to which the defendants replied on September 13, 2019, ECF No. 184. The court held a
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hearing on the matter on October 25, 2019. The matter has been fully briefed and is now
ripe for the court’s review.
II. STANDARD
A. Motion to Dismiss for Lack of Subject Matter Jurisdiction
Defendants’ standing argument implicates this court’s subject matter jurisdiction
and is governed by Rule 12(b)(1). Crumbling v. Miyabi Murrells Inlet, LLC, 192 F.
Supp. 3d 640, 643 (D.S.C. 2016). The determination of subject matter jurisdiction must
be made at the outset before any determination on the merits. Steel Co. v. Citizens for a
Better Environment, 523 U.S. 83 (1998). “The plaintiff bears the burden of persuasion if
subject matter jurisdiction is challenged under Rule 12(b)(1).” Williams v. United States,
50 F.3d 299, 304 (4th Cir. 1995). If the plaintiff cannot overcome this burden, then the
claim must be dismissed. Welch v. United States, 409 F.3d 646, 651 (4th Cir. 2005).
When a party contends that “the complaint [] fails to allege facts upon which subject
matter jurisdiction can be based[,] . . . all the facts alleged in the complaint are assumed
to be true.” Luna-Reyes v. RFI Const., LLC, 57 F. Supp. 3d 495, 499 (M.D.N.C. 2014)
(quoting Adams v. Bain, 697 F.2d 1213, 1219 (4th Cir. 1982)). “[A] trial court should
dismiss under Rule 12(b)(1) only when the jurisdictional allegations are ‘clearly . . .
immaterial, made solely for the purpose of obtaining jurisdiction or where such a claim is
wholly unsubstantial and frivolous.’” Kerns v. United States, 585 F.3d 187, 193 (4th Cir.
2009) (quoting Bell v. Hood, 327 U.S. 678, 682 (1946)).
B. Motion to Dismiss for Failure to State a Claim
Under Federal Rule of Civil Procedure 12(b)(6), a party may move to dismiss for
“failure to state a claim upon which relief can be granted.” When considering a Rule
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12(b)(6) motion to dismiss, the court must accept the plaintiff’s factual allegations as true
and draw all reasonable inferences in the plaintiff’s favor. See E.I. du Pont de Nemours
& Co. v. Kolon Indus., 637 F.3d 435, 440 (4th Cir. 2011). But “the tenet that a court
must accept as true all of the allegations contained in a complaint is inapplicable to legal
conclusions.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). On a motion to dismiss, the
court’s task is limited to determining whether the complaint states a “plausible claim for
relief.” Id. at 679. Although Rule 8(a)(2) requires only a “short and plain statement of
the claim showing that the pleader is entitled to relief,” “a formulaic recitation of the
elements of a cause of action will not do.” Bell Atl. Corp. v. Twombly, 550 U.S. 544,
555 (2007). The “complaint must contain sufficient factual matter, accepted as true, to
‘state a claim to relief that is plausible on its face.’” Iqbal, 556 U.S. at 678 (quoting
Twombly, 550 U.S. at 570).
III. DISCUSSION
Defendants assert five grounds for their motion to dismiss: (1) plaintiffs’ consent
forms are insufficient under the FLSA, (2) the court lacks subject matter jurisdiction
based on the plaintiffs’ lack of standing, (3) the Third Amended Complaint fails to state a
claim against each defendant, (4) plaintiffs’ FLSA claims are barred by the Motor Carrier
Act exemption, and (5) plaintiffs’ SCWPA claims are preempted by the FLSA. The court
addresses each ground in turn.
A. Sufficiency of Consents
Defendants argue that the consent forms of Hansen and Privette are insufficient
for their claims against Waste Pro SC and Waste Pro NC. Plaintiffs filed consent forms
to join this lawsuit, as required by the FLSA, in conjunction with their previous
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complaint. In those forms, plaintiffs stated their consent “to participate in a collective
action lawsuit against Waste Pro USA, Inc.” ECF Nos. 1-1 and 1-2. Since plaintiffs’
filing of their consent forms, the court has dismissed Waste Pro USA from the case.
Defendants now argue that plaintiffs’ consents, which continue to support their claims
against Waste Pro SC and Waste Pro NC, are insufficient because they name Waste Pro
USA as the defendant, not Waste Pro SC or Waste Pro NC. Because consent forms under
these circumstances provide consent for the collective action, rather than for a specific
claim, the consents are sufficient.
“No employee shall be a party plaintiff to any [collective FLSA] action unless he
gives his consent in writing to become such a party and such consent is filed in the court
in which such action is brought.” 29 U.S.C. § 216. Consents are to be interpreted
“according to the plain meaning of their language.” Turner v. BFI Waste Servs., LLC,
292 F. Supp. 3d 650, 653 (D.S.C. 2017). Plain-meaning construction, however, does not
require the court to be overly formalistic in interpreting consents. This court has held that
FLSA opt-in plaintiffs do not consent to join specific claims of a collective FLSA action,
but rather, consent to “join the action as a whole.” Id. at 654 (citing Prickett v. DeKalb
County, 349 F.3d 1297 (11th Cir. 2003)). In so holding, the court noted both the
language and the spirit of the statute demanded this construction:
Section 216(b) of the FLSA, which authorizes a plaintiff to sue his or her
employer for overtime or wage law violations, authorizes “[a]n action to
recover the liability prescribed” by the FLSA and provides that, by
consenting in writing, or “opting in,” an employee may become a plaintiff
to “any such action.” 29 U.S.C. § 216(b) (emphasis added). The statute does
not say that an employee may become a plaintiff to any such “claim.” If
Congress wished to parse out that plaintiffs needed to opt in to each FLSA
claim, it would have replaced the word “action” with “claim” in § 216(b).
It did not do so. Therefore, the plain language of the FLSA weighs in favor
of finding that plaintiffs opt-in to a FLSA action, not just a FLSA claim.
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...
Ultimately, the FLSA is a remedial statute that “has been construed liberally
to apply to the furthest reaches consistent with congressional direction.”
Prickett, 349 F.3d at 1296. Construing the language of § 216(b) liberally in
favor of the employees, this court follows Prickett and the many courts that
have interpreted it to hold that once a FLSA action has been conditionally
certified, opt-in plaintiffs become parties to the FLSA action as a whole.
Id. at 652, 654.
Therefore, plaintiffs’ consent to opt into the collective FLSA action against
Waste Pro USA applies to the entirety of the collective FLSA action, not just to claims
against that defendant. Thus, plaintiffs’ consent forms are sufficient for their claims
against Waste Pro SC and for their claims against Waste Pro NC. For these reasons, the
court rejects this ground for defendants’ motion to dismiss.
To prevent further confusion or controversy on this front, the court grants
plaintiffs the option to re-file consent forms that clearly indicate consent to the current
actions against Waste Pro SC and Waste Pro NC. If plaintiffs so elect, the date of any
new consent will relate back to the filing of the corresponding originally filed consent for
the purposes of the statute of limitations. This relation back will apply only to those new
consents by plaintiffs who filed consents with the court within the limitations period.
The tolling of the statute of limitations for plaintiffs yet to be joined is the subject of
another motion and not yet ripe for the court’s consideration.
B. Standing
Defendants next argue that this court is without subject matter jurisdiction
because plaintiffs do not have standing to sue both Waste Pro SC and Waste Pro NC in
the same action based on the July 25 Order. In that order, the court found that plaintiffs
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lacked standing to jointly sue Waste Pro SC and Waste Pro NC and ordered plaintiffs to
file an amended complaint. ECF No. 170. Now, defendants argue that plaintiffs’ Third
Amended Complaint did not cure their standing defect because plaintiffs still proceed
together in one action against Waste Pro SC and Waste Pro NC. Although defendants are
correct that the Third Amended Complaint is flawed, that flaw is not a lack of standing.
Instead, the Third Amended Complaint improperly joins plaintiffs’ claims against
defendants under Fed. R. Civ. Pro. 21.
The parties’ opposing positions on this issue stem from their differing
interpretations of the July 25 Order, which dismissed Waste Pro USA and Waste Pro FL
the current action. Therefore, before confronting the merits of the standing issue, it
behooves the court to revisit that order and clarify its holding. In its July 25 Order, the
court found that plaintiffs lacked standing to proceed simultaneously against Waste Pro
NC and Waste Pro SC. The court, having dismissed Waste Pro USA from the lawsuit,
first reasoned that Waste Pro NC and Waste Pro SC were not joint employers, based on
the factors the Fourth Circuit espoused in Hall v. DIRECTV, LLC, 846 F.3d 757, 769–70
(4th Cir. 2017), cert. denied, 138 S. Ct. 635 (2018). Therefore, without Waste Pro USA
providing the necessary link between Waste Pro NC and Waste Pro SC, the employees of
Waste Pro SC and Waste Pro NC could not jointly allege harms against both employers
because the South Carolina plaintiffs did not have standing to sue Waste Pro NC and the
North Carolina plaintiffs likewise did not have standing to sue Waste Pro SC.
In so finding, this court stated:
Considering the fact that plaintiffs alleged joint employer theory in
their complaint and that this theory is now rendered useless by the dismissal
of Waste Pro USA, the court orders plaintiffs to file an amended complaint.
This new complaint should reflect the court’s determination that plaintiffs
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may not bring a claim in which both North and South Carolina plaintiffs are
suing both Waste Pro NC and Waste Pro SC. Regardless of whether
plaintiffs choose to re-file with North Carolina plaintiffs against Waste Pro
NC or with South Carolina Plaintiffs against Waste Pro SC, this amended
complaint should allege with appropriate specificity the existence of an
employment relationship between the remaining plaintiffs and the
remaining defendants.
ECF No. 170 at 33 (emphasis added).
Defendants and plaintiffs interpret this holding differently. Defendants correctly
contend that the court found that the South Carolina and North Carolina plaintiffs may
not proceed together in the same lawsuit because the North Carolina plaintiffs would lack
standing to sue the South Carolina defendant and the South Carolina plaintiffs would lack
standing to sue the North Carolina defendant. Therefore, the court ordered either the
North Carolina plaintiffs to file an amended complaint against Waste Pro NC or the
South Carolina plaintiffs to file an amended complaint against Waste Pro SC. This is the
correct interpretation of the court’s order. However, plaintiffs interpreted this order to
mean that the South Carolina plaintiffs and North Carolina plaintiffs may proceed
together but must distinguish their claims such that the claims of the North Carolina
plaintiffs are asserted only against Waste Pro NC and the claims of the South Carolina
plaintiffs are asserted only against Waste Pro SC. This was not the court’s intended
holding.
The order clearly states: “Regardless of whether plaintiffs choose to re-file with
North Carolina plaintiffs against Waste Pro NC or with South Carolina Plaintiffs against
Waste Pro SC, this amended complaint should allege with appropriate specificity the
existence of an employment relationship between the remaining plaintiffs and the
remaining defendants.” ECF No. 170 at 33 (emphasis added). This holding forecloses
the possibility that the North Carolina plaintiffs and South Carolina plaintiffs may
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proceed together in the same lawsuit. Nevertheless, plaintiffs filed their Third Amended
Complaint based on their interpretation of the holding. In that complaint, plaintiffs
distinguish their claims by asserting the claims of the North Carolina plaintiffs against
Waste Pro NC and the claims of the South Carolina plaintiffs against Waste Pro SC.
Plaintiffs’ misinterpretation of the court’s order and subsequent complaint has an
interesting procedural effect. Subject matter jurisdiction, and thus standing, is subject to
a claim-by-claim analysis. Under such an analysis, there are no standing problems with
plaintiffs’ Third Amended Complaint because each claim satisfies the three requirements
of standing.
The “irreducible constitutional minimum of standing” requires (1) “an injury in
fact—a harm suffered by the plaintiff that is concrete and actual or imminent, not
conjectural or hypothetical”; (2) “causation—a fairly traceable connection between the
plaintiff's injury and the complained-of conduct of the defendant”; and (3)
“redressability—a likelihood that the requested relief will redress the alleged injury.”
McBurney v. Cuccinelli, 616 F.3d 393, 402 (4th Cir. 2010). Each of the plaintiffs’
claims alleges an injury-in-fact, causation between the plaintiff and his or her employer,
and redressability. Therefore, by distinguishing the claims of the North Carolina
plaintiffs and the South Carolina plaintiffs, the Third Amended Complaint rids plaintiffs
of any standing issues. However, the result of the Third Amended Complaint is
misjoinder.
Under the Third Amended Complaint, the North Carolina plaintiffs and the South
Carolina plaintiffs seek distinct rights to relief against distinct defendants. Under Rule
20:
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Persons may join in one action as plaintiffs if:
(A) they assert any right to relief jointly, severally, or in the
alternative with respect to or arising out of the same transaction, occurrence,
or series of transactions or occurrences; and
(B) any question of law or fact common to all plaintiffs will arise in
the action.
Fed. R. Civ. P. 20. Plaintiffs in this case do not assert a right to relief jointly, severally,
or in the alternative. The South Carolina plaintiffs seek relief from Waste Pro SC based
on its allegedly wrongful actions, and the North Carolina plaintiffs seek relief from Waste
Pro NC based on its allegedly wrongful actions. Without plaintiffs’ shared claims against
Waste Pro USA, they are improperly joined under Rule 20.
Under Rule 21, “[m]isjoinder of parties is not a ground for dismissing an action.”
Fed. R. Civ. Pro. 21. However, “the court may at any time, on just terms, add or drop a
party [or] sever any claim against a party.” Id. A district court possesses broad
discretion in determining whether severance under Rule 21 is appropriate. Saval v. BL,
Ltd., 710 F.2d 1027, 1031–32 (4th Cir. 1983). To avoid the confusion that would result
from the continued joinder of these distinct claims and to ensure that each defendant
understands the wrongs alleged against it, severance is appropriate. Therefore, the court
orders plaintiffs to file amended complaints that separate the current action against Waste
Pro SC and Waste Pro NC. The result of the amended complaints should be two separate
actions. In one, the North Carolina plaintiffs may allege their claims against Waste Pro
NC. In the other, the South Carolina plaintiffs may allege their claims against Waste Pro
SC. For these reasons, the court severs the claims and grants plaintiffs leave to file
amended complaints consistent with this order.
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C. Failure to State a Claim
Similarly, defendants argue that the Third Amended Complaint fails to state a
claim upon which relief could be granted because it “does not identify any wrongful
actions by any particular defendant.” ECF No. 178 at 6. In other words, defendants
argue that the Third Amended Complaint merely asserts generalized allegations against
them collectively and fails to put each defendant on notice of the wrongful conduct
alleged against it. The court disagrees and finds that the Third Amended Complaint
sufficiently states a claim upon which relief can be granted.
Discussed above, plaintiffs filed their Third Amended Complaint in order to
distinguish the claims of the South Carolina plaintiffs from the claims of the North
Carolina plaintiffs, based on their interpretation of the July 25 Order. To that end, the
Third Amended Complaint specifically states, “this Complaint does not allege, and
should not be construed as alleging, a claim against either Defendant by a person not
employed by that Defendant.” ECF No. 173 at 1. Despite this disclaimer, plaintiffs’
allegations within the complaint distinguish their claims with mixed results. The Third
Amended Complaint does, often confusingly, conflate Waste Pro SC and Waste Pro NC
as the “Defendants” and the North Carolina plaintiffs and the South Carolina plaintiffs as
the “Plaintiffs.” Plaintiffs explain in their response to defendants’ motion to dismiss that
“the Third Amended Complaint makes common allegations against both defendants
because each violated the FLSA in a similar manner as to each’s respective employees.”
ECF No. 181 at 11. A focused reading of the Third Amended Complaint reveals specific
allegations against each of the defendants sufficient to put each on notice of the wrongs
alleged against it. Because the court must construe a complaint liberally in favor of the
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plaintiffs, it finds that the complaint sufficiently alleges legally cognizable harms against
each defendant.
Moreover, this order mandates that plaintiffs separate the claims against each
defendant into two separate actions. Distinct complaints against the distinct defendants
will make clear the wrongful acts alleged against each party. Therefore, the court denies
the defendants’ motion to dismiss on this ground.
D. Motor Carrier Act Exemption of the FLSA
Defendants argue that the plaintiffs’ FLSA claims are barred by the Motor Carrier
Act (“MCA”), which exempts certain classes of employers from the FLSA’s overtime
protections, and thus do not state a claim for which relief can be granted. In response,
plaintiffs raise two arguments, one procedural and one substantive. First, plaintiffs argue
that the defendants waived their MCA exemption argument because they failed to raise it
in their first motions to dismiss. Second, plaintiffs argue that the facts pled are
insufficient to establish that the MCA exemption applies. Because the court finds that
this affirmative defense is an inappropriate basis for a motion to dismiss under these
circumstances, it rejects this ground for defendants’ motion to dismiss without addressing
plaintiffs’ waiver argument.
Substantively, plaintiffs argue that the MCA exemption is not a proper ground for
dismissal because the facts before the court are insufficient to support a ruling on an
affirmative defense at this early stage of the litigation. Defendants, meanwhile, contend
that the facts contained in the pleadings clearly show that the MCA exemption applies to
bar the plaintiffs’ claims. The court agrees with plaintiffs.
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Defendants contend that the MCA exemption bars plaintiffs’ claims under the
FLSA. The FLSA exempts from its overtime protections “any employee to whom the
secretary of Transportation has power to establish qualifications and maximum hours of
service pursuant to the provisions of section 31502 of Title 49 . . . .” 29 U.S.C. § 213.
Under that section, the Secretary has jurisdiction over any employee who is a “motor
carrier,” 49 U.S.C. § 31502, defined as “a person providing motor vehicle transportation
for compensation,” 49 U.S.C. §13102(14). Importantly, the transportation provided by
the employees must be in interstate commerce to trigger MCA exemption. 49 U.S.C.
§13501(1)(A).
“The purpose of a Rule 12(b)(6) motion is to test the sufficiency of the complaint,
and rarely will this involve assessing the sufficiency of defenses.” Rogers v.
Unitedhealth Grp., Inc., 144 F. Supp. 3d 792, 802–03 (D.S.C. 2015) (citing Taylor v. Oak
Forest Health & Rehab., LLC, 2013 WL 4505386, at *3 (M.D.N.C. Aug. 22, 2013).
“The burden of establishing an affirmative defense rests with the defendant, and ‘a
motion to dismiss filed under [Rule] 12(b)(6) . . . generally cannot reach the merits of an
affirmative defense.’ ” Id. (quoting Goodman v. Praxair, Inc., 494 F.3d 458, 464 (4th
Cir.2007) (en banc)). There are “relatively rare circumstances where facts sufficient to
rule on an affirmative defense are alleged in the complaint.” Id. (quoting Goodman, 494
F.3d at 464).
The parties dispute whether the complaint sufficiently alleges that plaintiffs
engaged in interstate transportation such that it is appropriate for the court to rule on the
affirmative defense on a motion to dismiss. Defendants rely on a number of allegations
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in the Third Amended Complaint, which they claim conclusively allege that plaintiffs
travelled in interstate commerce while on the job:
During plaintiffs’ employment with W[aste] P[ro] SC or W[aste] P[ro] NC,
each defendant employed at least two employees who handled goods,
materials, and supplies which travelled in interstate commerce, such as the
waste disposal trucks and other items used to run the business.
ECF No. 173 at ¶20;
Defendants’ Waste Disposal Drivers, including Plaintiffs and the Putative
Class Members, all drove assigned routes to collect and dispose of
residential or commercial waste and/or recyclable material for Defendants’
customers throughout South Carolina and North Carolina.
Id. at ¶ 39. These portions of the complaint, Defendants argue, clearly allege that
plaintiffs are “motor carriers” because they allege that plaintiffs travelled in interstate
commerce.
Plaintiffs disagree, arguing that an employee can handle goods that have travelled
in interstate commerce, thereby triggering coverage under the FLSA, without actually
using the goods in interstate transportation, as required under the MCA exemption.
Courts in the Fourth Circuit have accepted this narrow distinction. “It is well established
that local business activities fall within the FLSA when an enterprise employs workers
who handle goods or materials that have moved or have been produced in interstate
commerce.” Brock v. Hamad, 867 F.2d 804, 808 (4th Cir.1989). “This includes
situations where an employer purchases goods which have moved in interstate commerce
and his employees use such goods in the course of their employment, even when the
enterprise is the ultimate consumer of those goods.” Rains v. E. Coast Towing &
Storage, LLC, 820 F. Supp. 2d 743, 749 (E.D. Va. 2011) (citing Brock, 867 F.2d at 808).
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The allegations of the Third Amended Complaint do not give the court sufficient
grounds to determine the validity of defendants’ MCA exemption defense. The
complaint clearly alleges that the “goods, materials, and supplies” used by plaintiffs
travelled in interstate commerce, but it does not clearly allege that plaintiffs themselves
travelled in interstate commerce while on the job. Therefore, the allegations of the Third
Amended Complaint do not conclusively show that MCA exemption bars plaintiffs’
FLSA claims. To be sure, defendants’ MCA exemption defense may be perfectly valid,
but the court is without the grounds to properly evaluate it at this stage in the litigation.
Because discovery is necessary to determine whether MCA exemption applies, the issue
is better suited for a motion for summary judgment. For these reasons, the court rejects
this ground for defendants’ motion to dismiss.
E. FLSA Preemption of SCPWA Claims
Defendants next argue that the South Carolina plaintiffs’ SCPWA claims are
preempted by the FLSA. Plaintiffs again respond with both a procedural and a
substantive argument. Plaintiffs’ procedural argument exactly mirrors its argument with
respect to the MCA exemption defense, discussed above. Again, because the court finds
that the motion to dismiss on this ground is inappropriate at this stage of the litigation, it
need not resolve the merits of plaintiffs’ waiver argument. Substantively, the South
Carolina plaintiffs argue that their claims under the SCPWA are not duplicative of their
claims under the FLSA and thus not preempted. The court agrees.
Defendants rely on Anderson v. Sara Lee Corp. for the contention that plaintiff’s
SCPWA claims are barred. 508 F.3d 181, 194 (4th Cir 2007). In Anderson, the Fourth
Circuit found that “Congress prescribed exclusive remedies in the FLSA for violations of
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its mandates.” 508 F.3d at 194. Invoking the doctrine of “obstacle preemption,” the
court held that the plaintiffs there could not avail themselves of state law remedies to
protect rights that are merely duplicative of the rights guaranteed under the FLSA. Id.
The court reasoned that, because Congress intended the FLSA’s remedies to be exclusive,
allowing plaintiffs to bring duplicative state law claims would “ ‘stand[ ] as an obstacle to
the accomplishment of the full purposes and objectives of’ the FLSA.” Id. at 193
(quoting Worm v. Am. Cyanamid Co., 970 F.2d 1301, 1305 (4th Cir. 1992)).
Courts in the Fourth Circuit have found that where the SCWPA provides for relief
broader than or distinct from that provided for by the FLSA, claims under the former are
not preempted by the latter. In Meller v. Wings Over Spartanburg, LLC, the court found
that the plaintiffs’ claim to recover withheld tips in excess of the minimum wage under
the SCPWA was not preempted by the FLSA. 2016 WL 1089382, at *3 (D.S.C. Mar. 21,
2016). The court rested its decision on the fact that the FLSA did not guarantee the
substantive rights implicated by such a claim—namely, the plaintiffs’ entitlement to their
tips in excess of the FLSA’s minimum wage. Id. Other courts have denied motions to
dismiss SCWPA claims under similar analyses. See Foster v. M5 Hosp. Grp., LLC, 2015
WL 5024404, at *5 (D.S.C. Aug. 24, 2015) (finding that “[a] cause of action under the
state wage statute is separate and distinct from the FLSA claims” because, unlike the
FLSA, that statute “is not limited to controversies involving minimum wage and overtime
but applies to all wages due, and the plaintiff’s claim is based on lack of written notice of
deductions”); Spallone v. SOHO Univ., Inc., 2015 WL 5098154, at *5 (D.S.C. Aug. 31,
2015) (same).
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Further, the district court in Xue v. J&B Spartanburg LLC, found that a plaintiff’s
right to treble damages under the SCPWA made the relief sought broader than that
provided for by the FLSA. 2016 WL 3017223, at *2 (D.S.C. May 26, 2016). The court
also found that a claim under the SCWPA’s notice requirements is distinct from an FLSA
claim. Id. There, the court noted that “the FLSA does not prevent states from creating a
parallel regulatory scheme that provides additional protections for employees.” Id. at *2
(citing 29 U.S.C. § 218(a)). In considering SCPWA claims very similar to the ones at
issue here, the court stated:
the SCPWA both creates a right and a means of enforcing that right that
provides additional remedies not available under the FLSA, such as the
employee’s recovery for three times the amount owed, plus costs and
reasonable attorney's fees. S.C. Code Ann. § 41-10-80. Furthermore,
Plaintiffs’ SCPWA claims are separate and distinct from their FLSA claim
because they are seeking unpaid overtime wage payments that are based
upon an agreed-upon hourly rate, pursuant to their fixed monthly salary,
which is higher than the federal minimum wage rate . . . . Moreover, several
of Plaintiffs’ SCPWA claims are unrelated to their overtime wage claims,
specifically their allegations of Defendants’ failure to provide Plaintiffs
with the proper notice at the time of hiring, a timely written notice of any
changes in their terms of employment, and wage statements for each pay
period.
Id., at *2.
Here, Plaintiffs’ SCPWA claims allege violations of § 41-10-40(C) and § 41-1030(A), which provide, respectively, that:
[a]n employer shall not withhold or divert any portion of an employee’s
wages unless the employer is required or permitted to do so by state or
federal law or the employer has given written notification to the employee
of the amount and terms of the deductions . . . .
....
Every employer shall notify each employee in writing at the time of hiring
of the normal hours and wages agreed upon, the time and place of payment,
and the deductions which will be made from the wages, including payments
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to insurance programs. The employer has the option of giving written
notification by posting the terms conspicuously at or near the place of work.
Any changes in these terms must be made in writing at least seven calendar
days before they become effective. This section does not apply to wage
increases.
S.C. Code Ann. § 41-10-40(C); S.C. Code Ann § 41-10-30(A).
The Third Amended Complaint specifically alleges SCPWA violations based on
Waste Pro SC’s failure to provide plaintiffs with the proper notice of the hours and wages
agreed upon at the time of hiring, its failure to provide timely written notice of changes in
the terms of employment and wage statements, and improperly withholding wages.
Further, plaintiffs seek treble damages for these violations, as provided for by the
SCPWA. Plaintiffs’ “notice” claims under the SCWPA are distinct from its FLSA claims
because they seek relief distinct from that provided for by the FLSA. Therefore,
plaintiffs’ notice claims are not preempted by the FLSA.
Plaintiffs also allege an unpaid wage claim under the SCPWA. Although this
claim seeks the same type of relief that is recoverable under the FLSA, the SCPWA
provides for broader relief for this harm in the form of treble damages. The Third
Amended Complaint merely alleges that the plaintiffs are entitled to “all compensation of
wages due to them.” ECF 173 at ¶ 101 (internal quotation marks omitted). To the extent
that plaintiffs’ SCWPA claims seek wages equal to or less than the amount recoverable
under the FLSA, those SCWPA claims would be duplicative of their claims under the
FLSA. However, plaintiffs seek treble damages for these SCWPA claims, which is
broader relief than the relief provided for under the FLSA. Therefore, plaintiffs’ unpaid
wage claim under the SCWPA is not duplicative of their FLSA claims to the extent that
they seek treble damages. See Xue, 2016 WL 3017223, at *3. Because plaintiffs are
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seeking relief under the SCWPA that is either broader than or distinct from that which is
recoverable under the FLSA, their SCWPA claims are not preempted. Thus, the court
denies defendants motion to dismiss on this ground.
IV. CONCLUSION
For the foregoing reasons the court DENIES the motion to dismiss, SEVERS the
lawsuit, and ORDERS plaintiffs to file amended complaints consistent with this order.
AND IT IS SO ORDERED.
DAVID C. NORTON
UNITED STATES DISTRICT JUDGE
November 12, 2019
Charleston, South Carolina
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