Rodriguez v. Shan Namkeen Inc et al
Memorandum Opinion and Order: Defendants' Motion 29 to Dismiss is GRANTED and Plaintiffs claims are DISMISSED WITHOUT PREJUDICE. Plaintiff is GRANTED leave to amend his complaint within 14 days of this order. Should Plaintiff fail to file an amended complaint that cures the deficiencies identified herein by the deadline imposed, the Court will enter an order of dismissal with prejudice. (Ordered by Magistrate Judge Renee Harris Toliver on 1/9/2017) (mcrd)
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF TEXAS
DIMAS RODRIGUEZ, and all
others similarly situated under
29 U.S.C. § 216 (b),
SHAN NAMKEEN, INC.,
and SHIRISH PATEL,
Civil Action No. 3:15-CV-3370-BK
MEMORANDUM OPINION AND ORDER
Pursuant to the parties’ consent to proceed before the magistrate judge, Doc. 8 at 5, the
Court now considers Defendants’ Motion to Dismiss Plaintiff’s Amended Complaint, Doc. 29.
For the reasons stated herein, Defendants’ motion is GRANTED.
In October 2015, Plaintiff Dimas Rodriguez filed this claim under the Fair Labor
Standards Act (“FLSA”) alleging that Defendants, Shan Namkeen, Inc. (“SNI”) and Shailesh
Patel, violated provisions related to the payment of overtime and minimum wages. Doc. 1 at 1.
Defendants subsequently filed an answer, Doc. 7. In September 2016, Plaintiff sought and
obtained leave to file his First Amended Complaint, Doc. 24, in which he added a joint enterprise
allegation and two additional defendants, Manisha and Shirish Patel. See Doc. 24 at 1, 3-4. In
October 2016, Defendants filed the motion sub judice, Doc. 29, seeking dismissal of Plaintiff’s
claim under Federal Rule of Civil Procedure 12(b)(6).
III. LEGAL STANDARD
Plaintiff argues that by virtue of Defendant’s answer to their Original Complaint,
Defendants waived all 12(b)(6) arguments, with the exception of those related to the newlyadded joint enterprise claim. Doc. 31 at 2. However, as Plaintiff acknowledges, a Rule 12(b)(6)
motion filed after an answer is treated as a Rule 12(c) motion for judgement on the pleadings.
Jones v. Greninger, 188 F.3d 322, 324 (5th Cir. 1999). Moreover, since same standard governs
the Court’s consideration of Rule 12(c) and Rule 12(b)(6) motions, Doe v. MySpace, Inc., 528
F.3d 413, 418 (5th Cir. 2008), it is not necessary to determine which claims Defendants move to
dismiss pursuant to Rule 12(b)(6), and which claims they move to dismiss pursuant to Rule
To survive a motion to dismiss under Rule 12(b)(6) of the Federal Rules of Civil
Procedure, a plaintiff must allege enough facts to “state a claim to relief that is plausible on its
face.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S.
544, 570 (2007)). In ruling on a motion to dismiss, a court must accept all factual allegations in
the complaint as true, but need not accept legal conclusions couched as factual allegations.
Iqbal, 556 U.S. at 678. In order to overcome a Rule 12(b)(6) motion, a complaint should plead
“factual content that allows the court to draw the reasonable inference that the defendant is liable
for the misconduct alleged.” Id.; see also Thompson v. City of Waco, 764 F.3d 500, 503 (5th Cir.
See, e.g. Saenz v. JP Morgan Chase Bank, N.A., No. 7:13-CV-156, 2013 WL 3280214, at *1
(S.D. Tex. June 27, 2013) (where defendants, who had previously answered plaintiff’s original
complaint, sought dismissal of plaintiff’s amended complaint under Rule 12(b)(6), the court
refrained from determining whether it was brought under Rule 12(b)(6) or 12(c) because the
same standard applied); Al Rushaid v. Nat’l Oilwell Varco, Inc., No. H-11-3390, 2012 WL
1981990, at *4 (S.D. Tex. June 1, 2012) (same).
2014) (same). A complaint, thus, is not sufficient if it merely contains “a formulaic recitation of
the elements,” or “naked assertions” devoid of factual enhancement. Iqbal, 556 U.S. at 678.
The sections of the FLSA dealing with minimum wage and overtime pay requirements
apply only to (1) an employer with “employees who in any workweek [are] engaged in
commerce or in the production of goods for commerce” (“individual coverage”), or (2) to an
employer with employees “employed in an enterprise engaged in commerce or in the production
of goods for commerce” (“enterprise coverage”). See 29 U.S.C. §§ 206(a)(1), 207(a)(1); Martin
v. Bedell, 955 F.2d 1029, 1032 (5th Cir.1992) (using the terms “individual” and “enterprise”
coverage).2 “Either individual or enterprise coverage is enough to invoke FLSA protection.”
Martin, 955 F.2d at 1032 (emphasis in original). The plaintiff, however, has the burden of
establishing individual or enterprise coverage. See Mendoza v. Detail Sols., LLC, 911 F.Supp.2d
433, 439 (N.D. Tex. 2012) (Fish, J.) (holding that the plaintiff has the burden of establishing that
the employer is subject to the requirements of the FLSA).
Defendants argue that Plaintiff’s pleadings are factually deficient and fail to establish (1)
individual coverage, (2) enterprise coverage, and (3) that SNI is engaged in a joint enterprise. In
response, Plaintiff contends that his pleadings contain sufficient factual support. Doc. 31 at 4-9.
In the alternative, Plaintiff requests leave to amend his complaint should the Court find his
pleadings deficient. Doc. 31 at 10.
The FLSA defines “commerce” as “trade, commerce, transportation, transmission, or
communication among the several States or between any State and any place outside thereof.”
29 U.S.C. § 203(b). “In other words, ‘commerce’ refers to interstate commerce.” Morrow v. JW
Elec., Inc., No. 3:11-CV-1988-D, 2011 WL 5599051, at *2 n.2 (N.D. Tex. Nov. 16, 2011)
(Fitzwater, J.) (citation omitted).
A. Individual Coverage
Plaintiff fails to allege individual coverage. While the FLSA does not define “individual
coverage,” the Court of Appeals for the Fifth Circuit instructs courts to determine whether the
employee’s job “is so directly and vitally related to the functioning of an instrumentality or
facility of interstate commerce as to be, in practical effect, a part of it, rather than isolated local
activity.” Mendoza, 911 F.Supp.2d at 439 (Fish, J.) (citing Sobrino v. Med. Ctr. Visitor’s Lodge,
Inc., 474 F.3d 828, 829 (5th Cir. 2007)). Plaintiff’s First Amended Complaint alleges individual
coverage, in relevant part:
12. Defendants’ business activities involve those to which the Fair Labor
Standards Act applies. Both the Defendants’ business and Plaintiff’s work for the
Defendants affected interstate commerce for the relevant time period. Plaintiff’s
work for the Defendants affected interstate commerce for the relevant time period
because the materials and goods that Plaintiff handled and/or used on a constant
and/or continual basis and/or that were supplied to Plaintiff by the Defendants to
use on the job moved through interstate commerce prior to and/or subsequent to
Plaintiff’s use of the same. Plaintiff’s work for the Defendants was actually in
and/or so closely related to the movement of commerce while he worked for the
Defendants that the Fair Labor Standards Act applies to Plaintiff’s work for the
Defendants. Defendants’ business involves commercial food manufacturing.
Doc. 24 at 3. Thus, Plaintiff’s individual coverage claim is premised on the fact that (1) the
goods he used/was provided with moved through interstate commerce before and after his use,
and (2) his work was in and/or closely related to the movement of commerce. Doc. 24 at 3.
However, Plaintiff’s naked assertions fail to assert any facts from which it can be found
that his job affected commerce. Mendoza, 911 F.Supp.2d at 439. More specifically, Plaintiff
states that he was employed as a “delivery driver and laborer,” Doc. 24 at 3, but fails to support
his claim with factual enhancements that would allow the Court to determine that his job was not
simply isolated local activity. Mendoza, 911 F.Supp.2d at 439; Twombly, 550 U.S. at 557. Thus,
Plaintiff’s allegations amount to a threadbare recitation of the elements of individual coverage,
the likes of which courts have found insufficient to survive dismissal under Rule 12(b)(6). Iqbal,
556 U.S. at 678; see Centeno v. Facilities Consulting Grp., Inc., No. 3:14-CV-3696-G, 2015 WL
247735, at *10 (N.D. Tex. Jan. 20, 2015) (Fish, J.) (dismissing FLSA claims where plaintiff’s
allegations of individual and enterprise coverage “fail[ed] to provide factual allegations
pertaining specifically to the dispute at issue”); Teaney v. Kenneth & Co. Honey Do Servs., No.
3:13-CV-4211-L, 2014 WL 3435416, at *4 (N.D. Tex. July 15, 2014) (Lindsay, J.) (“Plaintiff
does not allege any facts whatsoever to support individual coverage. He merely states in
conclusory fashion that he was individually engaged in commerce.”); Morrow, 2011 WL
5599051, at *3 (dismissing FLSA claims where the plaintiff, “rather than pleading specific facts
that establish individual or enterprise coverage[,] . . . merely recite[d] the statutory elements of
FLSA coverage, or assert[ed] generalized facts”); see also Lindgren v. Spears, No. H-10-1929,
2010 WL 5437270, at *3 (S.D. Tex. Dec. 27, 2010) (dismissing an FLSA claim where the
“allegations of FLSA coverage are conclusory [and] merely repeat the statutory elements of
Furthermore, contrary to Plaintiff’s argument, the Court’s holding in Neto et al. v. DMCC
Enter., Inc. et al., No. 3:13-CV-3528-P (N.D. Tex. Apr. 15, 2015) (Solis, J.) is not particularly
instructive. In Neto, the defendant moved for dismissal of plaintiff’s FLSA claim under Rule
12(b)(6), arguing, inter alia, that the plaintiff failed to establish individual and enterprise
coverage. Id., Dkt. No. 40 at 12. Of specific relevance, plaintiff’s allegation of individual
coverage mirrored the complaint allegations at issue in this case.3 See id., Dkt. No. 31 at 3-4.
However, the Court’s electronic order denying the motion to dismiss the complaint in Neto states
only that “the Court finds that the claims asserted in Plaintiffs’ first amended complaint survive
Counsel for Plaintiff was counsel of record for the plaintiff in Neto.
summary dismissal under Fed. R. Civ. P. 12(b)(6).” Id., Dkt. No. 44. As previously mentioned,
a plaintiff bringing an FLSA claim must establish either individual or enterprise coverage.
Martin, 955 F.2d at 1032. Without any explanation of the Court’s reasoning, it is impossible to
determine if dismissal was denied in Neto because the Court found that the allegations in
question were sufficient to allege individual coverage, as opposed to enterprise coverage, or vice
versa. Thus, based on the dearth of factual enhancement in the complaint, the Court finds in this
case that Plaintiff has failed to plausibly allege individual coverage.
B. Enterprise Coverage
Plaintiff also fails to sufficiently allege enterprise coverage. To sufficiently allege
enterprise coverage, Plaintiff must include facts that establish he was “employed in an enterprise
engaged in commerce or in the production of goods for commerce.” See 29 U.S.C. §§ 206(a)(1),
207(a)(1). For the purposes of establishing enterprise coverage, the FLSA defines an “enterprise
engaged in commerce or in the production of goods for commerce” as one that
(A)(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
29 U.S.C. § 203(s)(1). The first prong of the enterprise coverage definition can be met by either
meeting the commerce requirement (analyzed in essentially the same manner as Plaintiff’s
individual coverage claim) or the handling requirement. Mendoza, 911 F.Supp.2d at 439-40.
Additionally, Plaintiff’s allegations must satisfy the dollar-volume requirement of the second
prong. As to his enterprise coverage claim, Plaintiff alleges, in relevant part:
13. Upon information and belief, the Defendant Corporation, individually and/or
collectively as part of the joint enterprise described in paragraph 16 below, had
gross sales or business done in excess of $500,000 annually for the years 2011,
2012, 2013, and 2014.
14. Upon information and belief, the Defendant Corporation’s sales or business
done, individually and/or collectively as part of the joint enterprise described in
paragraph 16 below, is expected to exceed $500,000 for the year 2015.
15. Furthermore, Defendants regularly employed two or more employees for the
relevant time period who handled goods or materials that travelled through
interstate commerce, or used instrumentalities of interstate commerce, thus
making Defendants’ businesses an enterprise covered under the Fair Labor
Doc. 24 at 3-4.
Plaintiff has alleged the basic elements of enterprise coverage, but not the necessary
factual support. Specifically, Plaintiff’s allegations in paragraph 15 regarding the commerce and
handling requirements are merely conclusory and do not state any facts from which it can be
gleaned that the enterprise and its employees indeed are involved in commerce. While Plaintiff’s
allegations concerning the dollar volume requirement are read with some lenience,4 he
nonetheless is expected to be familiar enough with his employer’s business to be able to
supplement his application of the commerce and handling clause beyond the bare allegations he
asserts here. See Centeno, 2015 WL 247735, at *11. As it stands, Plaintiff’s complaint is in a
skeletal form, merely reciting the applicable statutory, regulatory, and precedential language.
Morrow, 2011 WL 5599051, at *3; Iqbal, 556 U.S. at 678; see also Lindgren, 2010 WL
5437270, at *3. Simply stated, the Court requires additional factual enhancements to identify the
The Court is satisfied with Plaintiff’s pleading of the dollar volume requirement. As employees
typically lack specific information concerning their employer’s volume of sales, requiring more
could lead to “gross speculation” and the violation of Federal Rule of Civil Procedure 11.
Centeno, 2015 WL 247735, at *11 (citing FED. R. CIV. P. 11(b)(3) (“[T]he factual contentions
[must] have evidentiary support or, if specifically so identified, will likely have evidentiary
support after a reasonable opportunity for further investigation or discovery.”)).
contours of Plaintiff’s claim. See Centeno, 2015 WL 247735, at *11 (“The plaintiffs’ complaint
leaves the court asking what goods or materials did the employees handle or what
instrumentalities of interstate commerce did they use. The court concludes it is not unreasonable
to require the plaintiffs to answer these questions.”).
Plaintiff again seeks support from Neto, where the court refused to dismiss a complaint
containing similar allegations of enterprise coverage. See Neto, No. 3:13-CV-3528-P, Dkt. No.
31 at 4. However, for the reasons discussed above, the Court finds this argument unavailing.
Accordingly, the Court finds that Plaintiff has failed to plausibly allege enterprise coverage.
C. Joint Enterprise
Couched within Plaintiff’s enterprise coverage theory is the assertion that SNI and S2
Brothers, LLC (“S2”) are a single enterprise. Doc. 24 at 4. Plaintiff predicates this claim on the
fact that (1) SNI shares employees with S2 and uses S2’s facilities to prepare and package its
goods for shipment and sale, and (2) Shailesh Patel is the sole director and president of S2 and
occupies “the same or similar positions” with SNI. Doc. 24 at 4. Defendants argue that
Plaintiff’s claim fails to establish that SNI (a commercial food manufacturer) and S2 (a coinoperated laundry) have a “common business purpose.” Doc. 29 at 8-9. In response, Plaintiff
argues that their common businesses purpose is reflected by the fact that SNI and S2 performed
“related activities,” i.e. prepared and packaged SNI’s goods, and are under “unified operation or
common control.” Doc. 31 at 8-9.
While an “enterprise” may consist of multiple entities, the entities must (1) perform
related activities; (2) be under unified operation or common control; and (3) share a common
business purpose. Dunlop v. Ashy, 555 F.2d 1228, 1231 (5th Cir. 1977) (citation omitted); see
also 29 U.S.C. § 203(r). Entities have a “common business purpose” when their activities “are
directed to the same business objective or to similar objectives in which the group has an
interest.” 29 C.F.R. § 779.213. “A common business purpose exists if ‘the separate [entities]
engaged in complementary businesses, and were to a significant degree operationally
interdependent.’” Reich v. Bay, Inc., 23 F.3d 110, 115-16 (5th Cir. 1994) (quoting Donovan v.
Janitorial Servs., Inc., 672 F.2d 528, 530 (5th Cir. 1982)). This requires establishing “[m]ore
than a common goal to make a profit.” Brennan, 482 F.2d at 1367. Where, however, “the
activities are not performed as a part of such enterprise but for an entirely separate and unrelated
business, they will be considered performed for a different business purpose and will not be a
part of that enterprise.” 29 C.F.R. § 779.213.
Plaintiff’s First Amended Complaint sets forth his joint enterprise allegation, in relevant
16. Upon information and belief, Defendant SHAN NAMKEEN, INC. is part of a
joint enterprise as defined by 29 U.S.C. § 203(r) with S2 Brothers, LLC as the
related activities between various businesses, performed through unified operation
and/or common control, are being done for a common business purpose. For
example, Defendant SHAN NAMKEEN, INC. shares employees with and uses the
facilities of S2 Brothers, LLC to prepare and package goods produced by Defendant
SHAN NAMKEEN, INC.’s [sic] for shipment and sale. Furthermore, Defendant
SHAILESH PATEL is listed with the Texas Secretary of State as the sole director
and president of S2 Brothers, LLC and he occupies the same or similar positions
with Defendant SHAN NAMKEEN, INC.
Doc. 24 at 4. Plaintiff’s allegations mention each of the requisite elements: related activities,
unified operation/common ownership, and common business purpose. Crucially, however,
Plaintiff does not explain how SNI – a commercial food manufacturer – and S2 – a coin-operated
laundry – are engaged in complementary businesses. Bay, 23 F.3d at 115-16. In fact, Plaintiff’s
First Amended Complaint does not even state what S2’s business entails. See Doc. 24.
Moreover, while Plaintiff alleges the benefits SNI receives from its relationship with S2
(employees and space to prepare and package its goods), he fails to offer facts from which it can
be determined that S2’s operations are dependent on its relationship with SNI. Bay, 23 F.3d at
115-16. Sans the required factual enhancement, Plaintiff has not alleged the requisite level of
interdependence that courts generally look for when finding that multiple entities share a
common business purpose. See, e.g. Bay, 23 F.3d at 116 (finding two entities – a contractor and
a subcontractor – had a common business purpose where 90 percent of the subcontractor’s
business consisted of supplying labor to the contractor); Flores v. ACT Event Servs., Inc., 55
F.Supp.3d 928, 937 (N.D. Tex. 2014) (Fish, J.) (finding that two entities – a production company
and a cleaning company – shared a common business purpose, where the cleaning company’s
“sole purpose” was to provide people to work at the production company’s events); Reich v.
Priba Corp., 890 F.Supp. 586, 589-90 (N.D. Tex. 1995) (Fish, J.) (finding that two entities
shared a common business purpose, where both entities jointly promoted and managed a
gentlemen’s club, and “neither entity would exist without the presence of the other”).
Plaintiff is correct that considerations relevant to the related activities and unified
operation/common control inquiry are relevant in determining the existence of a common
business purpose. See Wirtz v. Savannah Bank & Tr. Co. of Savannah, 362 F.2d 857, 861 (5th
Cir. 1966). However, such considerations do not obviate the requirement that a common
business purpose also be established, which, for the reasons stated above, Plaintiff has failed to
do. Thus, the Court finds that Plaintiff has failed to sufficiently allege that SNI and S2 are part
of a single enterprise covered by the FLSA.
IV. LEAVE TO AMEND
Plaintiff requests leave to amend his First Amended Complaint if one or more of his
claims is found to be insufficiently pled. Doc. 31 at 10. Although a court may dismiss a claim
with prejudice that fails to meet the pleading requirements, “it should not do so without granting
leave to amend, unless the defect is simply incurable or the plaintiff has failed to plead with
particularity after repeated opportunities to do so.” Hart v. Bayer Corp ., 199 F.3d 239, 248 n.6
(5th Cir. 2000). While Plaintiff has previously amended his complaint, the motion sub judice
was the first challenge to the sufficiency of his pleadings. Additionally, it is not immediately
apparent that Plaintiff’s pleadings are incurable. Accordingly, Plaintiff is GRANTED leave to
amend his complaint within 14 days of this order. Should Plaintiff fail to file an amended
complaint that cures the deficiencies identified herein by the deadline imposed, the Court will
enter an order of dismissal with prejudice.
Defendants’ Motion to Dismiss, Doc. 29, is GRANTED and Plaintiff’s claims are
DISMISSED WITHOUT PREJUDICE.
SIGNED January 9, 2017.
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