Teaney v. Kenneth & Company Honey Do Services, LLC
Filing
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MMEMORANDUM OPINION AND ORDER granting 11 Defendant's Motion to Dismiss Plaintiff's Complaint, but will allow Plaintiff to amend his pleadings. Plaintiff shall file an amended complaint by 7/29/2014. Plaintiff, however, is warned, that if another form pleading is filed in this case, the court will impose appropriate sanctions against him, his counsel, or both. (Ordered by Judge Sam A Lindsay on 7/15/2014) (skt)
IN THE UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF TEXAS
DALLAS DIVISION
PAUL TEANEY,
Plaintiff,
v.
KENNETH & COMPANY HONEY DO
SERVICES, LLC D/B/A KENNETH &
COMPANY,
Defendant.
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Civil Action No. 3:13-CV-4211-L
MEMORANDUM OPINION AND ORDER
Before the court is Defendant’s Motion to Dismiss Plaintiff’s Complaint (Doc. 11), filed
December 17, 2013. After considering the motion, briefs, pleadings, and applicable law, the court
grants Defendant’s Motion to Dismiss Plaintiff’s Complaint (Doc. 11) but will allow Plaintiff to
amend his pleadings. Plaintiff shall file an amended complaint by July 29, 2014, to cure the
deficiencies herein noted regarding FLSA coverage.
I.
Background
Plaintiff Paul Teaney (“Plaintiff”) brought this action against Defendant Kenneth & Company
Honey Do Services, LLC d/b/a Kenneth & Company (“Defendant”) on October 17, 2013, alleging
violations of the Fair Labor Standards Act (“FLSA”) for failure to pay Plaintiff overtime wages for
weeks that he worked in excess of forty hours. Plaintiff has not amended his pleadings since filing
this action. On May 16, 2014, Defendant moved to dismiss Plaintiff’s FLSA claim on the ground
that Plaintiff’s Complaint fails to allege any facts regarding FLSA coverage. Plaintiff maintains in
Memorandum Opinion and Order - Page 1
response that he has pleaded sufficient facts regarding FLSA coverage but requests to amend his
pleadings in the event the court determines otherwise.
II.
Standard for Rule 12(b)(6) - Failure to State a Claim
To defeat a motion to dismiss filed pursuant to Rule 12(b)(6) of the Federal Rules of Civil
Procedure, a plaintiff must plead “enough facts to state a claim to relief that is plausible on its face.”
Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007); Reliable Consultants, Inc. v. Earle, 517
F.3d 738, 742 (5th Cir. 2008); Guidry v. American Pub. Life Ins. Co., 512 F.3d 177, 180 (5th Cir.
2007). A claim meets the plausibility test “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.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)
(internal citations omitted). While a complaint need not contain detailed factual allegations, it must
set forth “more than labels and conclusions, and a formulaic recitation of the elements of a cause of
action will not do.” Twombly, 550 U.S. at 555 (citation omitted). The “[f]actual allegations of [a
complaint] must be enough to raise a right to relief above the speculative level . . . on the assumption
that all the allegations in the complaint are true (even if doubtful in fact).” Id. (quotation marks,
citations, and footnote omitted). When the allegations of the pleading do not allow the court to infer
more than the mere possibility of wrongdoing, they fall short of showing that the pleader is entitled
to relief. Iqbal, 556 U.S. at 679.
In reviewing a Rule 12(b)(6) motion, the court must accept all well-pleaded facts in the
complaint as true and view them in the light most favorable to the plaintiff. Sonnier v. State Farm
Mutual Auto. Ins. Co., 509 F.3d 673, 675 (5th Cir. 2007); Martin K. Eby Constr. Co. v. Dallas Area
Memorandum Opinion and Order - Page 2
Rapid Transit, 369 F.3d 464, 467 (5th Cir. 2004); Baker v. Putnal, 75 F.3d 190, 196 (5th Cir. 1996).
In ruling on such a motion, the court cannot look beyond the pleadings. Id.; Spivey v. Robertson, 197
F.3d 772, 774 (5th Cir. 1999), cert. denied, 530 U.S. 1229 (2000). The pleadings include the
complaint and any documents attached to it. Collins v. Morgan Stanley Dean Witter, 224 F.3d 496,
498-99 (5th Cir. 2000). Likewise, “‘[d]ocuments that a defendant attaches to a motion to dismiss
are considered part of the pleadings if they are referred to in the plaintiff’s complaint and are central
to [the plaintiff’s] claims.’” Id. (quoting Venture Assocs. Corp. v. Zenith Data Sys. Corp., 987 F.2d
429, 431 (7th Cir. 1993)). In this regard, a document that is part of the record but not referred to in
a plaintiff’s complaint and not attached to a motion to dismiss may not be considered by the court
in ruling on a 12(b)(6) motion. Gines v. D.R. Horton, Inc., 699 F.3d 812, 820 & n.9 (5th Cir. 2012)
(citation omitted).
The ultimate question in a Rule 12(b)(6) motion is whether the complaint states a valid claim
when it is viewed in the light most favorable to the plaintiff. Great Plains Trust Co. v. Morgan
Stanley Dean Witter, 313 F.3d 305, 312 (5th Cir. 2002). While well-pleaded facts of a complaint
are to be accepted as true, legal conclusions are not “entitled to the assumption of truth.” Iqbal, 556
U.S. at 679 (citation omitted). Further, a court is not to strain to find inferences favorable to the
plaintiff and is not to accept conclusory allegations, unwarranted deductions, or legal conclusions.
R2 Invs. LDC v. Phillips, 401 F.3d 638, 642 (5th Cir. 2005) (citations omitted). The court does not
evaluate the plaintiff’s likelihood of success; instead, it only determines whether the plaintiff has
pleaded a legally cognizable claim. United States ex rel. Riley v. St. Luke’s Episcopal Hosp., 355
F.3d 370, 376 (5th Cir. 2004). Stated another way, when a court deals with a Rule 12(b)(6) motion,
its task is to test the sufficiency of the allegations contained in the pleadings to determine whether
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they are adequate enough to state a claim upon which relief can be granted. Mann v. Adams Realty
Co., 556 F.2d 288, 293 (5th Cir. 1977); Doe v. Hillsboro Indep. Sch. Dist., 81 F.3d 1395, 1401 (5th
Cir. 1996), rev’d on other grounds, 113 F.3d 1412 (5th Cir. 1997) (en banc). Accordingly, denial
of a 12(b)(6) motion has no bearing on whether a plaintiff ultimately establishes the necessary proof
to prevail on a claim that withstands a 12(b)(6) challenge. Adams, 556 F.2d at 293.
III.
Analysis
Defendant contends that Plaintiff has not pleaded sufficient facts regarding FLSA coverage.
Plaintiff counters that his pleadings as to FLSA coverage are sufficient based on his allegations that
he: (1) worked as a foreman doing home remodeling and construction work; and (2) handled goods
that were produced in and traveled in interstate commerce. Plaintiff further asserts: “For example,
he regularly went to supply houses with his employer to pick up special-ordered tile from out of
state, loading and unloading them from trucks.” Pl.’s Resp. 4. For support that his allegations are
sufficient to support FLSA coverage, Plaintiff cites section 11c10 of the Department of Labor Field
Operations Handbook (“FOH”)1 for the proposition that “[E]mployees engaged at the construction
site in receiving materials which are still moving in interstate commerce would be individually
covered” under the FLSA. Id. at 4 (quoting FOH § 11c10 (1988)). Plaintiff also cites the following
cases, which addressed the handling of goods or materials in interstate commerce: Polycarpe v. E
1
The FOH is:
an operations manual that provides Wage and Hour Division (WHD) investigators and staff with
interpretations of statutory provisions, procedures for conducting investigations, and general
administrative guidance. The FOH was developed by the WHD under the general authority to
administer laws that the agency is charged with enforcing. The FOH reflects policies established
through changes in legislation, regulations, significant court decisions, and the decisions and opinions
of the WHD Administrator. It is not used as a device for establishing interpretative policy.
http://www.dol.gov/whd/FOH/.
Memorandum Opinion and Order - Page 4
& S Landscaping Service, Incorporated, 616 F.3d 1217, 1227-28 (11th Cir. 2010); and Brennan v.
Greene’s Propane Gas Service, Incorporated, 479 F.2d 1027, 1030 (5th Cir.1973) (quoting Schultz
v. Kip’s Big Boy, Inc., 431 F.2d 530, 533 (5th Cir. 1970)).
Defendant replies that Plaintiff’s contention and reliance on the FOH is misplaced because:
“(1) no such allegation is in the Complaint; and (2) even if Plaintiff did pick up material that had
been ordered by a supply-house from out of state, the FOH advises that Plaintiff is ‘not covered
where the sole basis for such coverage would be that materials have been shipped from out-of-state.”
Def.’s Reply 2 (quoting FOH § 11c10 (1994)). Because Plaintiff’s sole claim is under the FLSA,
Defendant contends that the case should be dismissed for lack of subject matter jurisdiction if its
motion is granted.
“The FLSA guarantees overtime pay to employees engaged in the production of goods for
commerce (“individual coverage”) or employed in an enterprise engaged in commerce or in the
production of goods for commerce (“enterprise coverage”).” Martin v. Bedell, 955 F.2d 1029, 1032
(5th Cir. 1992) (internal quotation marks and emphasis omitted). “Commerce” under the FLSA
means interstate commerce. 29 U.S.C. § 203(b) (defining “commerce” to mean “trade, commerce,
transportation, transmission, or communication among the several States or between any State and
any place outside thereof”). “Either individual or enterprise coverage is enough to invoke FLSA
protection.” Id. (emphasis omitted). Thus, to state an FLSA claim for overtime wages, a plaintiff
must either allege facts that, if proved, would establish individual or enterprise coverage under the
FLSA. Morrow v. J W Electric, Inc., No. 3:11-CV-1988-D, 2011 WL 5599051, at *2 (N.D. Tex.
Nov. 16, 2011). To satisfy this requirement, a plaintiff must allege that he was either (1) engaged in
the production of goods for commerce (“individual coverage”) or (2) employed in an enterprise
Memorandum Opinion and Order - Page 5
engaged in commerce or in the production of goods for commerce (“enterprise coverage”). Martin,
955 F.2d 1029 at 1032.
Plaintiff appears to contend in response to Defendant’s Motion to Dismiss that he has alleged
facts regarding enterprise coverage. Enterprise coverage requires that the enterprise:
(i) has employees engaged in commerce or in the production of goods for commerce,
or that has employees handling, selling, or otherwise working on goods or materials
that have been moved in or produced for commerce by any person; and (ii) is an
enterprise whose annual gross volume of sales made or business done is not less than
$500,000 (exclusive of excise taxes at the retail level that are separately stated).
29 U.S.C. § 203(s)(1)(A)(i)-(ii). Goods are considered to “have been moved . . . in commerce”
when:
they have moved across State lines before they are handled, sold, or otherwise
worked on by the employees. It is immaterial in such a case that the goods may have
“come to rest” within the meaning of the term “in commerce” as interpreted in other
respects, before they are handled, sold, or otherwise worked on by the employees in
the enterprise. Such movement in commerce may take place before they have reached
the enterprise, or within the enterprise, such as from a warehouse of the enterprise in
one State to a retail store of the same enterprise located in another State. Thus,
employees will be considered to be “handling, selling, or otherwise working on goods
that have been moved in . . . commerce” where they are engaged in the described
activities on “goods” that have moved across State lines at any time in the course of
business, such as from the manufacturer to the distributor, or to the “enterprise,” or
from one establishment to another within the “enterprise.”
29 C.F.R. § 779.242.
Plaintiff’s two-page Complaint consists of the following allegations:
1. Plaintiff brings this action for overtime compensation and other relief under
the Fair Labor Standards Act, as amended, 29 U.S.C. §216(b).
2. Plaintiff is an individual residing in Texas and worked for Defendant from
April 2009 to October 2013 as a foreman doing home remodeling and construction
work.
3. Defendant is a corporation formed and existing under the laws of the State
of Texas is authorized to conduct business in the State of Texas and at all times
Memorandum Opinion and Order - Page 6
material to this complaint, maintained and operated a business in Rockwall, Texas
Texas.
4. Jurisdiction is conferred on this Court by Title 28 U.S.C. §1337 and by
Title 29 U.S.C. §216(b). At all times pertinent to this Complaint, Defendant was an
enterprise engaged in interstate commerce. Additionally, Plaintiff was individually
engaged in commerce and the handling of goods that have been produced and moved
in such commerce, doing work essential to Defendant’s business. Venue is proper in
this district under 28 U.S.C. § 1391.
5. During one or more weeks of Plaintiff’s employment with Defendant,
Plaintiff worked in excess of forty (40) hours (overtime hours).
6. During one or more weeks of Plaintiff’s employment with Defendant
wherein Plaintiff worked overtime hours, Defendant failed to pay Plaintiff one and
one-half times his regular rate of pay for each overtime hour worked.
7. The acts described in the preceding paragraphs violate the Fair Labor
Standards Act, which prohibits the denial of overtime compensation for hours
worked in excess of forty (40) per workweek. Defendant willfully denied Plaintiff’s
right to overtime compensation under the FLSA.
8. As a result of Defendant’s unlawful conduct, Plaintiff is entitled to actual
and compensatory damages, including the amount of overtime which was not paid
and which should have been paid.
9. Plaintiff further seeks liquidated damages as a result of Defendant’s willful
failure and refusal to pay overtime in violation of Section 7 of the FLSA, 29 U.S.C.
§ 207.
10. Plaintiff also seeks compensation of the out of pocket expenses and costs
of court he will incur in this action. Plaintiff is also entitled to reasonable and
necessary attorneys fees pursuant to 29 U.S.C. § 216(b).
Pl.’s Compl. 1-2.2
Plaintiff does not allege any facts whatsoever to support individual coverage. He merely
states in conclusory fashion that he “was individually engaged in commerce.” Id. at ¶ 4. Likewise,
2
Except for a few minor changes in paragraphs two through four, Plaintiff’s formulaic allegations in this case
are virtually identical to those in numerous other cases filed by his counsel.
Memorandum Opinion and Order - Page 7
Plaintiff asserts in conclusory fashion that “Defendant was an enterprise engaged in interstate
commerce.” Id. Further, while he alleges that he “handl[ed] . . . goods that have been produced and
moved in such commerce, doing work essential to Defendant’s business,” such allegations are
factually devoid and merely track the language in 29 U.S.C. § 203(s)(1)(A). Such averments amount
to nothing more than “labels and conclusions, and a formulaic recitation of the elements of a cause
of action” and are insufficient to state a claim upon which relief can be granted. See Twombly, 550
U.S. at 555 (citation omitted). Finally, while Plaintiff asserts in response to Defendant’s Motion to
Dismiss that “he regularly went to supply houses with his employer to pick up special-ordered tile
from out of state, loading and unloading them from trucks,” Pl.’s Resp. 4, his Complaint contains
no such allegations. The court therefore cannot consider Plaintiff’s assertion in this regard in ruling
on Defendant’s Motion to Dismiss. Plaintiff has therefore failed to plead sufficient facts to enable
the court to conclude that he has pleaded “a claim to relief that is plausible on its face.” Id. at 570.
Because Plaintiff has failed to allege facts that, if proved, establish coverage under the FLSA, he has
failed to state a claim upon which relief can be granted, and Defendant is entitled to dismissal of
Plaintiff’s only claim under the FLSA. For the reasons that follow, however, the court will allow
Plaintiff to amend his pleadings to cure this deficiency.
IV.
Amendment of Pleadings
Plaintiff requested to amend his pleadings if they were determined to be insufficient. As
previously noted, Defendant contends that the FOH precludes Plaintiff’s theory of FLSA coverage,
because it indicates that a plaintiff is not “covered where the sole basis for such coverage would be
that materials have been shipped from out-of-state.” Def.’s Reply 2 (citing FOH § 11c10 (1994)).
Defendant’s quotation from the FOH is correct; however, as noted above, the FOH itself states that
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“It is not used as a device for establishing interpretative policy.” Based on the forgoing language, it
does not appear that the FOH is entitled to the same weight as that accorded to opinion letters by the
Department of Labor, which are entitled to substantial weight.
Regardless, Plaintiff’s theory of coverage appears to be based on handling or moving goods
of goods or materials that were moved in interstate commerce, not goods that were merely shipped
from out of state, and section 779.242 makes clear that “It is immaterial in such a case that the goods
may have ‘come to rest’ within the meaning of the term ‘in commerce’ as interpreted in other
respects, before they are handled, sold, or otherwise worked on by the employees in the enterprise.”
29 C.F.R. § 779.242. Accordingly, the court cannot say at this juncture that Plaintiff cannot allege
any facts to support FLSA coverage. Further, given that the trial of this case is several months away,
the court concludes that Defendant will not suffer any legal prejudice if Plaintiff is permitted to file
a first amended complaint. The court will therefore allow Plaintiff to amend his pleadings to correct
the deficiencies regarding FLSA coverage. Plaintiff, however, is warned, that if another form
pleading is filed in this case, the court will impose appropriate sanctions against him, his counsel,
or both.
Plaintiff’s counsel was recently put on notice and admonished regarding the filing of
form pleadings in Davis v. Pest Management of Texas, Inc., Case No. 3:13-CV-962-L (Doc. 22
at 5-6). The court even mentioned this case by name as one of several cases filed by Plaintiff’s
counsel in which nonspecific form pleadings were used and strongly urged Plaintiff’s counsel
to amend the pleadings filed in this and other cases pending before this court. The same
admonishment applies with equal force in this case to any amended pleadings filed by
Plaintiff’s counsel moving forward. Form pleadings waste valuable judicial resources and
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unnecessarily delay the resolution of litigation. Accordingly, Plaintiff’s counsel is ordered not
to use form pleadings and is directed to tailor the facts to the particular case in which he
provides representation. Further, the court directs Plaintiff’s counsel to review all court cases
filed in the undersigned’s court and to amend pleadings in any case where the pleadings are
form pleadings. If the deadline for amending pleadings as a matter of right has passed,
Plaintiff’s counsel shall file an appropriate motion to amend. The court considers form
pleadings to be a violation of Rule 11 of the Federal Rules of Civil Procedure.
V.
Conclusion
For these reasons explained, the court grants Defendant’s Motion to Dismiss Plaintiff’s
Complaint (Doc. 11) but will allow Plaintiff to amend his pleadings. Plaintiff shall file an amended
complaint by July 29, 2014, to cure the deficiencies noted regarding FLSA coverage. Failure to
comply with this order will result in dismissal without prejudice of this action pursuant to Federal
Rule of Civil Procedure 41(b) or dismissal with prejudice pursuant to Rule 12(b)(6) for failure to
state a claim upon which relief can be granted.
It is so ordered this 15th day of July, 2014.
_________________________________
Sam A. Lindsay
United States District Judge
Memorandum Opinion and Order - Page 10
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