Trevino et al v. RDL Energy Services, LP

Filing 144

OPINION AND ORDER. Greene Energy Group, LLC's motion 131 to dismiss Plaintiffs' Third Amended Complaint pursuant to Fed. R. of Civ. Proc. 12(b)(6) is DENIED, but Greene is GRANTED LEAVE to file a motion for summary judgment within 20 day s of entry of this Opinion and Order; Defendant RDL Energy Services, LP's motion 135 for clarification and/or reconsideration is GRANTED in part and DENIED in part, as indicated in this Opinion and Order; RDL's alternatively motion for le ave 133 to file a further amended answer, or motion to certify pursuant to 28 U.S.C. § 1292(b) and stay case is DENIED; and RDL's motion for leave to file its motion to dismiss 134 is DENIED, but the Court GRANTS RDL leave to file a motion for summary judgment within 20 days.(Signed by Judge Melinda Harmon) Parties notified.(rhawkins)

United States District Court
Southern District of Texas

IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF TEXAS
HOUSTON DIVISION
ALFONSO TREVINO, et al.,
§
Individually and On Behalf of §
All Persons Similarly Situated,§
§
Plaintiffs,
§
§
VS.
§
Civ. A. H-14-1936
§
RDL ENERGY SERVICES, L.P.,
§
BAKER HUGHES PIPELINE
§
MANAGEMENT GROUP, INC.,
§
GREENE’S ENERGY GROUP, LLC, and§
WEATHERFORD U.S., L.P.,
§
§
Defendants.
§

ENTERED
March 29, 2017
David J. Bradley, Clerk

OPINION AND ORDER
Pending before the Court in the above referenced cause,
brought by Plaintiffs who were at varying times employed as nonexempt day-rate employees with Defendant RDL Energy Services, L.P.,
a

Texas

States,

staffing
alleging

corporation
violations

operating
of

the

throughout

Fair

Labor

the

United

Standards

Act

(“FLSA”), 29 U.S.C. § 201, et seq., and seeking unpaid overtime
compensation

and

reimbursement

of

expenses

incurred

on

the

employer’s behalf for sums spent for the convenience of the
employer under 29 C.F.R. § 778.217, are the following motions:
(1) Defendant Greene Energy Group, LLC’s (“Greene’s”)
motion to dismiss Plaintiffs’ Third Amended Complaint1
pursuant to Fed. R. of Civ. Proc. 12(b)(6) (instrument
#131);
(2) Defendant RDL Energy Services, LP’s (“RDL’s”) motion

1

Instrument #61.
-1-

for clarification and/or reconsideration of Opinion and
Order,2 alternatively motion for leave to file a further
amended answer, or motion to certify pursuant to 28
U.S.C. § 1292(b) and stay case (#133); and
(3) RDL’s motion for leave to file its motion to dismiss
and or for summary judgment (#134).
Because the Court vacated the docket control schedule on
August 23, 2016 (#138), stating it would reset the schedule after
the

Court

resolved

the

pending

motions,

if

appropriate,

the

circumstances motivating these motions in part have changed.
I.

Greene’s Motion to Dismiss (#131)

Greene’s motion to dismiss the Third Amended Complaint rests
on the same allegations, case law, and analysis that the Court
applied when it dismissed Defendants Baker Hughes Process and
Pipeline Services, LLC and Weatherford U.S., LP, alleged joint
employers along with Greene’s of Plaintiffs, under Rule 12(b)(6).
See #130, entered on July 21, 2016.

Greene insists the Third

Amended Complaint contains no factual allegations plausibly showing
that Greene employed any of them under the applicable, multi-factor
“economics realities” test3 to determine whether an employeremployee relationship exists between the parties and then to make
out a facially plausible claim of multiple employer liability under
the FLSA.
In response, Plaintiffs emphasize that the dispositive motion

2

3

#130.
See the Court’s Opinion and Order (#130) at pp. 14-16.
-2-

deadline was June 1, 2016 and that Greene did not file the instant
Rule 12(b)(6) motion to dismiss until July 25, 2016, one month
before trial was set at the time, nor did it seek leave of Court to
do so.

Should the Court allow Greene to file the motion, it should

still be denied because Plaintiffs have met the Twombly/Iqbal
pleading standard of fair notice of their joint appointment and
facts that satisfy the standards of the economic realities test.
Bell Atlantic Corp. v. Twombly, 127 S. Ct. 1955 (2007); Ashcroft v.
Iqbal, 556 U.S. 662 (2009).

For example Plaintiffs plead that RDL

“provides workforces to oil and natural gas exploration companies”
(#61 at ¶ 20), that “Baker Hughes, Weatherford, and Greene’s
controlled means of the work, provided the tools for the work,
trained the Plaintiffs on their job duties, supervised Plaintiff’s
job duties, reported to RDL which Plaintiffs worked for them and
when, and tracked the days that Plaintiffs showed up to work for
them all the while reporting it back to RDL,” and that “Defendants
controlled the amount that Plaintiffs were paid by negotiating with
RDL their day-rate.”

Id. at ¶ 25.

Greene replies that as with the Court’s dismissal of Baker
Hughes and Weatherford, the Third Amended Complaint fails to plead
any facts specific to Greene that would establish that Greene was
a joint employer under the FLSA.

Greene also complains that

Plaintiffs contend that Greene makes three “misguided” arguments:
(1) Greene waived its opportunity to file a 12(b)(6) motion; (2)
the dispositive deadline bars the filing of Greene’s 12(b)(6)
motion; and (3) the conclusory statement in their Third Amended

-3-

Complaint sufficiently pleads joint employment.

Regarding the

first contention, Greene claims that a Rule 12(b)(6) motion has no
deadline, and relief under a failure to state a claim cannot be
“waived.”

In footnote 29 of its Opinion and Order, the Court

erroneously stated, “Unlike Baker Hughes and Weatherford, Greene[]
did not file a motion to dismiss under Rule 12(b)(6) and thus
waived its opportunity to do so.”

Rule 12(h)(1) provides that a

party can waive defenses listed under 12(b)(2)-(5), but Rule
12(b)(6) is not listed there.

Rule 12(h)(2) states that “failure

to state a claim upon which relief can be granted” can be raised in
a pleading allowed under Rule 7(a), by motion under Rule 12(c), or
“at trial.” Wright & Miller have pronounced that “failure to state
a claim upon which relief can be granted . . . [is] preserved from
the waiver mechanism by the express terms of subdivision (h).”

11

Charles Alan Wright & Arthur R. Miller, Federal Practice and
Procedure § 1361 (3d ed. 1998)(updated April 2016).
As for the second reason, Greene’s 12(b)(6) motion is not by
definition a dispositive motion because it does not seek a ruling
on the merits, because Greene did not attach anything to it that
would convert it to a motion for summary judgment under Rule 12(d),
and because relief sought under Rule 12(b)(6) may be raised at
trial according to Rule 12(h)(2)(C).
Geene also insists that the third contention is wrong because,
as this Court has already determined, the Third Amended Complaint
fails to state a claim under a joint employer theory.
Greene states that the reason he failed to file a motion to

-4-

dismiss by the deadline was because until the Court issued its
Opinion and Order, it was not clear whether Plaintiffs would be
permitted to amend their Third Amended Complaint. Greene now seeks
leave to amend and argues granting its motion will not prejudice
Plaintiffs

because the pretrial conference has not yet occurred,

trial exhibits and witnesses have not yet been identified, motions
in limine have not been filed, etc.
The Court finds that because the motion deadline passed long
ago and because the merits of the suit should be trial-ready at
this point, allowing the filing of a 12(b)(6) motion at this late
date would appear to be unfair to Plaintiffs.

Instead, the Court

denies Greene’s motion to dismiss, but grants Greene leave, if it
is able, to file a motion for summary judgment within twenty days
of

receipt

of

this

Opinion

and

Order.

If

Greene

does

so,

Plaintiffs shall file a timely response, the Court will rule on the
motion, and then will set a new pretrial order and trial date if
appropriate.
II.

RDL’s Motion for Clarification and/or Partial Reconsideration

of Opinion and Order; alternatively, Motion for Leave to File
[#130] Second

Amended Answer, or Motion to Certify pursuant to 28

U.S.C. § 1292(b) to Take an Interlocutory Appeal and Stay Case
(#133)
Federal Rule of Civil Procedure 12(f) provides, “The court may
strike from a pleading any insufficient defense or any redundant,
immaterial, impertinent, or scandalous matter” on its own motion or
“one made by a party either before responding to the pleading or,

-5-

if a response is not allowed, within 21 days after being served the
the pleading.”
RDL seeks clarification and reconsideration to the Court’s
Opinion and Order striking RDL’s affirmative defenses of (1) Motor
Carrier Act (“MCA”) exemption4; (2) FLSA section 13(a) statutory
exemptions;

(3)

good

faith

reliance

on

an

administrative

regulation, order, ruling, approval and interpretation under 29
U.S.C. § 259; (4) good faith reliance on advice of counsel; (5)
equitable estoppel; (6) judicial estoppel; and (7) prepayment
offset.

The Court also denied Plaintiffs’ amended motion to

conditionally certify a FLSA collective action and to send Notice
to the class.
RDL’s motion for clarification first argues that its MCA
exemption should not have been stricken because it was one factor
that the Court cited for denying Plaintiffs’ motion to certify this
case as a collective action.5

4

#130 at 78-81.6

Moreover the

See #130 at pp. 33-38.

5

The Court found that the lengthy and highly individualized
analysis that would be required to state an MCA claim against
each plaintiff would make a collective action inappropriate. Its
purpose for deciding whether to certify a collective action was
very different from its role as an affirmative defense.
6

The Court wrote,

Regarding the MCA exemption, RDL agrees that at least
some of RDL’s Plaintiff and putative class member
technicians might arguably be subject to this
exemption, but determining which ones requires a
factually intensive analysis of each individual’s
particular circumstances and would undermine a primary
purpose of FLSA’s collective action to efficiently
resolve common issues of law and fact that arise from
the same conduct. . . . To determine if a particular
-6-

Plaintiff is exempt under the MCA, Plaintiffs must show
that those co-Defendants for which each worked are
“joint employers” with RDL within the meaning of the
FLSA, i.e., they must examine each work assignment of a
particular Plaintiff in order to see if his employer
meets the requirements of a joint employer
relationship. The Court has found that Plaintiffs have
failed to allege facts or provide evidence that they
were joint employers. Even if they had, if a Plaintiff
is employed by more than one RDL client, and for more
than one assignment, under different terms for
differing periods, the determination whether RDL was
under the jurisdiction of the Secretary of
Transportation will be highly individualized, a
challenge inconsistent with the goal of a collective
action and unsuitable to proceed as a collective
action. Furthermore the court still has to determine
whether each Plaintiff “engage[d] in activities that
directly affect the operational safety of motor
vehicles in the transport of property in interstate
commerce,” in turn requiring analyses of whether (1)
employees belong to a class who engaged in safetyaffecting activities and (2) the employees “could
reasonably have been expected to engage in interstate
commerce consistent with their job duties.” Allen v.
Coil Tubing Services, LLC, 755 F.3d at 283-84. Further
complicating the analysis, “where the continuing duties
of the employee’s job have no substantial direct effect
on such safety of operation or where such safetyaffecting activities are so trivial, casual and
insignificant at to be de minimis, the exemption will
not apply [to the employee] so long as there is no
change in his duties.” Id. at 284, citing 29 C.F.R. §
782.2(b)(3). Not only the nature of the particular
work assignment, but also the percentage of time spent
on safety-affecting duties must be considered. Finally
a statutory “carve out” from the MCA exemption, created
in the . . . TCA places further restrictions on
employees for exemption from FLSA overtime provisions.
The TCA makes those overtime provisions applicable to
any “covered employee,” i.e., to any individual (1) who
is employed by a motor carrier; (2) whose work in whole
or in part, is defined (A) as that of a driver,
driver’s helper, loader, or mechanic; and (B) as
affecting the safety of operation of motor vehicles
weighing 10,000 pounds or less in transportation on
public highways in interstate or foreign commerce; and
(3) who performs duties on motor vehicles weighing
10,000 pounds of less. #76 at p. 20, citing TCA §
306(c), 122 Stat. 1572, 1621. Thus to decide if the
-7-

reliance on counsel affirmative defense should not have been
dismissed because RDL’s motion for leave to file amended answer
(#108) to Plaintiffs’ third amended complaint (#120) sought to
expand that defense and RDL claims it did so by adding to its
original answer the following sentences:
by

counsel

that

its

manner

of

permissible, lawful, and proper.

“RDL was further advised

paying

its

technicians

was

Relying and acting on such

advice, RDL proceeded in good faith in hiring and paying its
technicians as such independent contractors.”

Furthermore, even

though Plaintiffs opposed RDL’s motion for leave to file an amended
answer (#116), Magistrate Judge Stacy granted the motion (#119),
and Plaintiffs did not subsequently claim that the expanded defense
violated Federal Rule of Civil Procedure 8(c).
The Fifth Circuit has ruled that “[I]f [an affirmative]
defense ‘is raised at a pragmatically sufficient time, and the

TCA applies, the court must determine “when and how
often each Plaintiff individually performed duties with
noncommercial vehicles so as to qualify as a ‘covered
employee.’” Allen, 846 F. Supp. 2d at 705. See also
Aikins v. Warrior Energy Services, Civ. A. No. 6:13-CV54, 2015 WL 1221255, at *5 (S.D. Tex. March 17,
2015)(suggesting that a week-by-week analysis of
whether a plaintiff’s work met the requirements of the
TCA would be necessary). That evaluation is further
burdened by the fact that the pipeline technicians
involved here worked for different clients at different
times, requiring highly individualized analysis that
will show putative class members are not similarly
situated and do not qualify for collective action
treatment.
The Court rejects RDL’s objection because there were many other
reasons, including claims of other Defendants, that the Court
denied the request for certification as a collective action and
the fact that RDL had pleaded this claim was a factor that had to
be considered.
-8-

plaintiff was not prejudiced in its ability to respond,’” the Fifth
Cir. “‘generally will not find the defense is waived.’” Solomon v.
Spalitta, 484 Fed. Appx. 883, 884-85 (5th Cir. July 31, 2012); see
also

Rogers

v.

McDorman,

521

F.3d

381,

385

(5th

Cir.

2008)(plaintiffs could not claim surprise when they contested an
affirmative defense in pretrial brief); Standard Waste Sys. Ltd. v.
Mid-Continent Cas. Co., 612 F.3d 394, 398-99 (5th Cir. 2010)(holding
that the failure to plead policy exclusion as an affirmative
defense did not result in unfair surprise or prejudice where among
other things, it was raised in the joint status report, raised in
the designation of expert witnesses, and summary judgment was filed
on the applicability of the exclusion).

Not just fair notice, RDL

emphasizes that Plaintiffs have had actual notice so they are not
prejudiced by unfair surprise.

Similar rulings simply ask whether

the issue has been fairly raised by the pleadings, the pretrial
order or the trial itself.
such cases.

RDL has provided numerous examples of

#133 at pp. 6-16.

RDL asks the Court to reconsider its order striking its
affirmative defenses asserting that it acted in good faith in
conformity

with

and

reliance

on

any

written

administrative

regulation, or, ruling, approval, or interpretation, as well as
that it had a reasonable reliance on advice of counsel.
The Court refers RDL to pages 8-12 of its Opinion and Order
(#130), in which it explained why it applies the fair notice

-9-

standard to any affirmative defenses to claims under the FLSA,7 as
opined by the Fifth Circuit in Woodfield v. Bowman, 193 F.3d 354,
362 (5th Cir. 1999), reiterated in Rogers v. McDorman, 521 F.3d 381,
385 (5th Cir. 2008), rather than the plausibility standard of
Twombly and Iqbal. The question then becomes, what is fair notice?
Plaintiffs interpret the “fair notice” as stating that the issues,
even when not formally pleaded in a complaint, were conclusorily
raised in some pleading or hearing during the course of litigation.
(As examples, RDL points out that for the last two years the
parties have conducted discovery, including depositions, on RDL’s
affirmative defenses, so they are not a surprise to Plaintiffs.)
The Court’s Opinion and Order recognized that prevention of unfair
surprise is central to the pleading of affirmative defenses.

#130

at page 9.
As this Court wrote in its Opinion and Order at pp. 8-9,
Before the issuance of Twombly and Iqbal, the Fifth
Circuit held that affirmative defenses are subject to the
same pleading requirements as complaints, i.e., at that
time, Federal Rule of Civil Procedure 8's “short plain
statement of the claim showing the pleader is entitled to
relief.”
Woodfield v. Bowman, 193 F.3d 354, 362 (5th
Cir. 1999). The Woodfield panel continued, “Even though
the aim of the relaxed notice pleading of Federal Rule of
Procedure 8 is to prevent parties from being defaulted
for committing technical errors, a defendant nevertheless
must plead an affirmative defense with enough specificity
or factual particularity to give the plaintiff ‘fair
notice’ of the defense that is being advanced.” Id.; in

7

While no Circuit Court of Appeals has decided whether
currently the heightened, plausibility standard of Twombly and
Iqbal or the relaxed, “fair notice” requirement of Rule 8(a)
applies to the pleading of an affirmative defense, district
courts in the Fifth Circuit are divided on the issue. See U.S.
ex rel. Parikh v. Citizens Medical Center, 302 F.R.D. 416, 418
(S.D. Tex. 2014)(listing cases on both sides).
-10-

accord, Rogers v. McDorman, 521 F.3d 381, 385 (5th Cir.
2008). The Woodfield panel did “acknowledge that in some
cases, merely pleading the name of an affirmative defense
. . . may be sufficient.” Id. “Central to requiring the
pleading of affirmative defenses is the prevention of
unfair surprise. A defendant should not be permitted to
‘lie behind a log’ and ambush a plaintiff with an
unexpected defense.” Ingraham v. United States, 808 F.2d
1075, 1079 (5th Cir. 1987). “If the defense ‘is raised
at a pragmatically sufficient time, and the plaintiff was
not prejudiced in its ability to respond,’” the Fifth
Circuit “generally will not find the defense is waived.”
Solomon v. Spalitta, 484 Fed. Appx. 883, 885-86 (5th Cir.
July 31, 2012), citing, Rogers, 521 F.3d at 385.
While Woodfield required sufficient specificity or factual
particularity to give the plaintiff “fair notice,” it also noted
that in the determining whether fair notice standard is met, the
Court “makes this determination through a fact-specific analysis.”
193 F.3d at 362.
Thus

the

Court

re-examines

each

of

the

affirmative

defenses it dismissed, with a focus on whether the plaintiff faces
an “unfair surprise,” which at times may require the inquiry
whether the defense “contain[s] sufficient factual matter,” and
relevant case law:

(1) Motor Carrier Act (“MCA”) exemption; (2)

FLSA section 13(a) statutory exemptions; (3) good faith reliance on
an

administrative

regulation,

order,

ruling,

approval

and

interpretation under 29 U.S.C. § 259; (4) good faith reliance on
advice of counsel; (5) equitable estoppel; (6) judicial estoppel;
and (7) prepayment offset.
A number of cases have concluded that, as with affirmative
defenses like waiver, release and unclean hands, the simple listing
of estoppel “falls well short of the minimum particulars needed to
identify the affirmative defense in question.” Woodfield, 193 F.3d
-11-

at 362.

See also Software Publishers Ass’n v. Scott & Scott, LP,

Civ. A. No. 3:06-CV-0949-G, 2007 WL 2325585 at *2 (N.D. Tex. Aug.
2007)(Although some times the naming of the defenses is sufficient,
the “defendants’ bald assertions that the plaintiff’s claims are
barred, in whole or in part, by the doctrines of waiver, estoppel
and ratification . . . do not provide [plaintiff] with ‘fair
notice’ of the defenses being advanced”), citing Reis Robotics USA,
Inc. v. Concept Industries, Inc., 462 F. Supp. 2d 897, 907 (N.D.
Ill. 2006)(“Laches waiver, estoppel and unclean hands are equitable
defenses that must be pled with specific elements required to
establish the defense.”); Tran v. Thai, 2010 WL 5232944 at *7 (S.D.
Tex. Dec. 16, 2010)(“It is unclear whether the equitable defenses
of waiver, estoppel, unclean hands, and laches are available under
the FLSA.”), citing Ayers v. Consol. Const. Servs. of SW Fla.,
Inc., No. 2:07-cv-123, 2007 WL 4181910, at *1-2 (M.D. Fla. Nov. 26,
2006)(granting motion to strike laches and estoppel affirmative
defenses because of “the general rule that an employee cannot waive
her rights under the FLSA without supervision of the Secretary of
Labor or the Court.”), and Perez-Nunez v. North Broward Hosp.
Dist., No. 08-61583-CIV, 2009 WL 723873, at *2 (S.D. Fla. March 13,
2009 (“The doctrines of waiver, estoppel and laches are generally
not

applicable

to

FLSA

claims.”);

EEOC

v.

Courtesy

Building

Services, Inc., Civ. A. No. 3:10-CV-1911-D, 2011 WL 208408, at *4-5
(N.D. Tex. Jan. 21, 2011)(“[T]he [broad] affirmative defenses
pleaded here [waiver and release] are not so narrow that simply
naming the defense gives fair notice of the nature of the defense,

-12-

and neither Courtesy’s answer nor the EEOC’s complaint alleges any
facts that could form the basis of a waiver, release, estoppel, or
unclean hands affirmative defense” and granting motion to strike
defenses.); Herrera v. JK & HE Business, LLC, Civ. A. No. H-142986, 2016 WL 8193294, at *19 (S.D. Tex. Oct. 16, 2016)(“Even if
defenses such as waiver or laches are valid under the FLSA,
Defendants have failed to plead the defenses of laches, estoppel,
waiver, ratification and/or consent and equitable estoppel with any
specificity” . . . to put Plaintiff on notice of the factual basis
for these potential defenses.”).

As the Court observed in Herrera

v. Utilimap Corp., Civ. A. No. H-11-3851, 2012 WL 3527065, at *3
(S.D. Tex. Aug. 14, 2012), “When the Fifth Circuit has allowed
estoppel in FLSA actions, it has been based on the specific facts
of the case.

Brumbelow v. Quality Mills, Inc., 462 F.2d 1324, 1327

(5th Cir. 1972).

Without additional facts to support these claims,

the affirmative defenses of laches and estoppel cannot stand.” RDL
has not alleged such additional facts.

Accordingly the Court

reaffirms its dismissal of Plaintiffs affirmative defenses of
equitable estoppel and judicial estoppel.
RDL has listed as an affirmative defense FLSA section 13(a),
29

U.S.C.

§

213(a)(exempting

exemptions,

the

administrative,

outside sales, and combination exemptions, each of which requires
the Court to determine what constitutes plaintiffs “primary duty”
under 29 C.F.R. § 541.700(a).
narrowly

and

the

employer

The exemption must be construed

bears

the

employee’s exempt status under § 13(a).

-13-

burden

of

proving

the

Hasho v. Rockwell Space

Operations Co., 867 F. Supp. 1287, 1294 (S.D. Tex. Nov. (S.D. Tex.
1994).

Applying the fair notice standard, courts have found that

even though defendants fail to provide specific facts supporting
their

assertion

of

“good

faith,”

courts

find

such

minimal

“allegations “barely scrape[] over the fair notice stand” in
notifying the plaintiff of the nature of the defense and avoiding
unfair surprise.

See, e.g., Rodriguez v. Physician Lab Servs.,

LLC, No. 13-cv-622, 2014 WL 847126, at *3 (S.D. Tex. Mar. 4 2014);
Dyson v. Stuart Petroleum Testers, Inc., No. 01-15-CV-282 RP, 2015
WL 4935527, at *4 (W.D. Tex. Aug. 18, 2015); Floridia v. DLT 3
Girls, Inc., No. 3:11-CV-3624, 2012 WL 1565533, at *3 (S.D. Tex.
May 2, 2012)(holding defense asserting that “plaintiff was an
exempt administrative and/or executive employee under Section
13(a)(1) of the FLSA” sufficient to give plaintiff notice); Franks
v. Tyhan, Inc., Civ. A. H-15-191, 2016 WL 1531752, at *3 (S.D. Tex.
Apr. 15, 2016).

Accordingly, the Court reverses its previous

dismissal of this affirmative defense of RDL.
The Court has been unable to find a case addressing good faith
reliance on advice of counsel that recognizes such an affirmative
defense under the FLSA.
statute.

Nor is there any reference to it in the

Thus the Court reaffirms its dismissal of this defense.

Since 1974, in a change in the law, the Fifth Circuit has
recognized as an exception allowing set-offs contrary to the bar
against them established in FLSA cases in Brennan v. Heard, 491
F.2d 1, 4 (5th Cir, 1974)(holding that allowing counterclaims for
set-offs against the amount due in back pay under the FLSA for the

-14-

value of goods, including gas and supplies from the employer, was
inappropriate in a proceeding brought to enforce minimum wage and
overtime

provisions),

rev’d

on

other

grounds,

McLaughlin

v.

Richland Shoe Co., 486 U.S. 128 (1988) because these deductions in
many cases dropped the final awards below “the [statutory] minimum
payments required by the Act.”

Subsequently in Singer the Fifth

Circuit concluded that when the payments made to the plaintiff are
considered

pre-payments,

considered to be wages.

i.e.,

payments

already

received

and

Franks v. Tyhan, 2016 WL 1531752, at *3

(S.D. Tex. Apr. 15, 1016), citing Singer v. City of Waco, Tex., 324
F.3d 813, 828 (5th Cir. 2003)8; Martin v. Pepsi/Americas, Inc., 628
F.3d 738, 742 (5th Cir. 2012)(Nevertheless the court “continue[s]
to look with disfavor on set-offs unless the money being set-off
can

be

considered

wages

plaintiff-employee.”).

that

the

employer

pre-paid

to

the

Because RDL specifies in his affirmative

defense that it is for a pre-payment offset, the Court reverses its
previous dismissal of this defense.
The

Court

finds

that

RDL

has

adequately

pled

his

8

MCE

As explained in Jones v. JGC Dallas LLC, 2012 WL 4119570,
at *3 (N.D. Tex. Aug. 17, 2012), after originally denying setoffs under the FLSA, in Singer, 324 F.3d at 828,
the Fifth Circuit considered whether a district court
properly allowed an employer to set-off wage
overpayments to employees in some work periods against
shortfalls or deficiencies in wages in other work
periods. Viewing the overpayments as prepayments-i.e., payments the employer paid in advance to the
employees to compensate them for the shortfalls they
would receive in subsequent work periods--the Fifth
Circuit held that the district court did not err in
allowing the set-offs. Id. at 828.
-15-

affirmative defense, so the Court reverses its previous dismissal
that defense.
Alternatively RDL has moved for leave to amend or to certify
this case for interlocutory review pursuant to 28 U.S.C. § 1292(b).
The

Court

has

reinstated

RDL’s

affirmative

defenses

of

MCA

exemption, good faith exemption for “any employee employed in a
bona fide executive, administrative, or professional capacity”
under 29 U.S.C. § 213(a), good faith reliance on an administrative
regulation, order, ruling, approval and interpretation under 29
U.S.C. § 259, and prepayment offset.
Regarding the first motion, the Court observes that RDL has
already filed three answers; to allow another one will hold up this
trial-ready case even more.

Furthermore, there are four criteria

for granting an interlocutory appeal of an order under§ 1292(b),
all of which must be satisfied:

the appeal must involve a

controlling question of law as to which there is substantial ground
for difference of opinion, where an immediate appeal may materially
advance ultimate termination of the litigation and it must be filed
within a reasonable time after the order sought to be appealed.
Here, too, the fact that this case is trial-ready and the Court
expects to establish a schedule for the pretrial order, docket
call, and trial, makes any additional delay of this nearly threeyear-old case not only unwarranted, but it would obstruct rather
than advance the ultimate termination of the litigation. Ahrenholz
v. Board of Trustees of University of Illinois, 219 F.3d 674, 67576 (7th Cir. 2002)(“[T]o do so in such circumstances is merely to

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waste . . . time and delay the litigation in [this] district court,
since the proceeding in [this] court normally grinds to a halt as
soon as [this] judge certifies an order in the case for an
immediate appeal.”), cited by In re BP p.l.c. Oregon v. BP P.L.C.,
2013 WL 12156398, at *4-5 (S.D. Tex. Jan. 4, 2013)(“A key concern
consistently

underlying

Section

1292(b)

decisions

is

whether

permitting an interlocutory appeal will speed up the litigation,”
citing Ahrenholz, 219 F.3d at 675).

Thus the Court denies the

motion for leave to amend or to certify.
Finally, regarding RDL’s motion for leave to file a motion to
dismiss or for summary judgment, although the Court finds that RDL
has had enough bites at the apple, because the Court is allowing
Greene to file a motion for summary judgment within twenty days,
and because a summary judgment motion might resolve some issues
before trial, in the interests of efficiency the Court will allow
RDL the same opportunity.
Accordingly, for the reasons stated above, the Court
ORDERS the following:
(1)

Defendant Greene Energy Group, LLC’s (“Greene’s”)

motion to dismiss Plaintiffs’ Third Amended Complaint
pursuant to Fed. R. of Civ. Proc. 12(b)(6) (#131) is
DENIED, but Greene is GRANTED LEAVE to file a motion for
summary judgment within 20 days of entry of this Opinion
and Order;
(2) Defendant RDL Energy Services, LP’s (“RDL’s”) motion
for

clarification

and/or

reconsideration

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(#135)

is

GRANTED in part and DENIED in part, as indicated in pages
11-17 this Opinion and Order;
(3) RDL’s alternatively motion for leave to file a
further amended answer, or motion to certify pursuant to
28 U.S.C. § 1292(b) and stay case (#133) is DENIED; and
(4) RDL’s motion for leave to file its motion to dismiss
is DENIED, but the Court GRANTS RDL leave to file a
motion for summary judgment within 20 days (#134).
SIGNED at Houston, Texas, this

29th

day of

March , 2017.

___________________________
MELINDA HARMON
UNITED STATES DISTRICT JUDGE

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