Courtney v. Petromar International, Inc. et al
Filing
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MEMORANDUM AND ORDER DENYING 7 MOTION TO DISMISS FOR FAILURE TO STATE A CLAIM (Signed by Judge Keith P Ellison) Parties notified.(sloewe, 4)
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF TEXAS
HOUSTON DIVISION
ISIAH COURTNEY,
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Plaintiff,
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VS.
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PETROMAR INTERNATIONAL, INC., et §
al,
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Defendants.
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CIVIL ACTION NO. 4:15-CV-215
MEMORANDUM & ORDER
Plaintiff Isiah Courtney filed this Fair Labor Standards Act (“FLSA”) suit against
Defendants Petromar International, Inc. and Alexandros Koutsakis to recover unpaid overtime
for himself and other similarly situated employees. Plaintiff alleges that he was improperly
classified as exempt from the FLSA’s requirement that employees be paid at a time-and-a-half
rate for all hours worked over forty in a workweek. Defendants have moved to dismiss the suit
for failure to state a claim. (Doc. No. 7.) In response, Plaintiff moved for leave to amend his
complaint. (Doc. No. 9.) For the reasons set forth below, Plaintiff’s Motion for Leave to Amend
is GRANTED and Defendants’ Motion to Dismiss is DENIED.
I.
BACKGROUND1
Plaintiff Isiah Courtney has worked as a marine expeditor for Defendant PetroMar
International, Inc. (“PetroMar”) since September 2013. Compl., Doc. No. 1 at ¶¶ 2, 33.
Defendant Alexandros Koutsakis was the president of PetroMar. Id. at ¶ 9. PetroMar provides
cargo expediting services to the oil and maritime industry. Id. at ¶ 29. As a marine expeditor, Mr.
Courtney performed services such as inspecting equipment, measuring fuel reserves, and
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For the purposes of a motion to dismiss, the Court takes Plaintiff’s factual allegations as true.
Bell Atl. Corp. v. Twombly, 550 U.S. 544, 556 (2007).
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checking that policies and procedures were being followed. Id. at ¶¶ 32-33.
PetroMar classified its marine expeditors as exempt from the overtime requirements of
the FLSA. Id. at ¶ 34. As a result of this classification, Mr. Courtney and other marine expeditors
were not paid time-and-a-half for hours worked over forty in a workweek. Plaintiff’s Complaint
alleges that the marine expeditors were improperly classified and are entitled to recoup overtime
pay from PetroMar. Id. at ¶¶ 65-70. Mr. Courtney seeks relief on his own behalf and on behalf of
all other similarly-situated marine expeditors who worked for PetroMar in the three years prior to
this action. Id. at ¶ 57.
Plaintiff filed his suit on January 22, 2015. (Doc. No. 1.) Defendants moved to dismiss on
February 19, 2015. (Doc. No. 7.) In his response to Defendants’ motion, Plaintiff offered a
proposed First Amended Complaint in an effort to cure pleading defects identified by
Defendants. (Doc. No. 9-4.) Among other things, the First Amended Complaint drops allegations
that Plaintiff was not paid the minimum wage, and alleges only that he was not paid the overtime
premium.
II.
LEGAL STANDARD
A court may dismiss a complaint for a “failure to state a claim upon which relief can be
granted.” Fed. R. Civ. P. 12(b)(6). “To survive a Rule 12(b)(6) motion to dismiss, a complaint
‘does not need detailed factual allegations,’ but must provide the plaintiff’s grounds for
entitlement to relief — including factual allegations that when assumed to be true ‘raise a right to
relief above the speculative level.’” Cuvillier v. Taylor, 503 F.3d 397, 401 (5th Cir. 2007)
(quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007)). That is, a complaint must
“contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on
its face.’” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Twombly, 550 U.S. at 570). A
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claim has facial plausibility “when the plaintiff pleads factual content that allows the court to
draw the reasonable inference that the defendant is liable for the misconduct alleged.” Iqbal, 556
U.S. at 678 (citing Twombly, 550 U.S. at 556). The plausibility standard “is not akin to a
‘probability requirement,’” though it does require more than simply a “sheer possibility” that a
defendant has acted unlawfully. Id. at 678. Thus, a pleading need not contain detailed factual
allegations, but 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).
III.
ARGUMENT
Defendants’ Motion to Dismiss identifies three potential flaws in Plaintiff’s pleading: 1)
insufficient facts to support FLSA coverage, 2) insufficient facts to support Mr. Koutsakis’s
individual liability as an “employer,” and 3) insufficient facts to show that the FLSA has been
violated. The Court will review each of these arguments in turn. As an initial matter, the Court
notes that in a case involving the same counsel, a very similar complaint was the subject of a
similar motion to dismiss before another court in this district, and that motion was summarily
denied. See Zannikos v. Oil Inspections (U.S.A.) Inc. et al, No. 4:12-cv-2508 (S.D. Tex. 2012)
(docket entries 1, 5, 7).
In his response to the motion to dismiss, Plaintiff asks for leave to amend his complaint
to address some of the alleged deficiencies in his pleading. As Defendant’s reply brief addressed
the new allegations, the Court finds that justice and judicial economy will be best served by
granting Plaintiff’s motion for leave to amend the complaint and treating Defendant’s motion to
dismiss as a motion to dismiss the First Amended Complaint.
A. FLSA Coverage
A plaintiff bringing claims under the FLSA must plead sufficient facts to show that he is
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protected by the statute. See Morrow v. J W Electric, Inc., No. 3:11-CV-1988-D, 2011 WL
5599051 (N.D. Tex. Nov. 16, 2011). The FLSA applies to workers who are directly “engaged in
the production of goods in commerce” — so-called “individual coverage” — and workers who
are “employed in an enterprise engaged in commerce or in the production of goods for
commerce” — termed “enterprise coverage.” Martin v. Bedell, 955 F.2d 1029, 1032 (5th Cir.
1992). Either individual or enterprise coverage suffices to invoke FLSA protection. Id.
Here, Plaintiff’s complaint alleges that “[a]t all material times, Defendants have been
enterprises in commerce or in the production of goods for commerce within the meaning of 29
U.S.C. § 203(s)(1) due to the fact that the Defendants had and continue to have employees
engaged in commerce.” Am. Compl., Doc. No. 9-4 at ¶ 17. Defendants object that this is simply
a recitation of the statutory formula that does not satisfy the pleading requirements for
“enterprise coverage.”
However, Defendant overlooks other factual allegations in Plaintiff’s complaint that
bolster his claim that PetroMar was an “enterprise engaged in commerce.” “Commerce” means
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). Plaintiff’s complaint
alleges that Defendant itself has offices in four states and five countries. Compl. at ¶¶ 8, 34. In
addition, PetroMar’s business involves shipping in the oil and maritime industry, and its
employees were sent to work on oil vessels. Id. at ¶ 33, 36. The Court can reasonably infer that
this involves work “on goods or materials that have been moved in or produced for commerce by
any person.” 29 U.S.C. § 203(s)(1)(A)(i). Accordingly, the Court finds that Plaintiff has satisfied
his pleading burden with respect to establishing that PetroMar is an “enterprise engaged in
commerce.” The Court need not consider whether allegations of individual coverage included in
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the proposed First Amended Complaint would be sufficient to invoke the FLSA.
B. Employer Status
Next, Defendants argued in their original motion that Plaintiff has not alleged sufficient
facts to support his claim that Alexandros Koutsakis was his “employer” for purposes of the
FLSA. Plaintiff’s proposed First Amended Complaint includes additional allegations pertaining
to employer status, particularly that of Mr. Koutsakis. Doc. No. 9-4 at ¶¶ 29, 31. Defendants
appear to drop their argument that Plaintiff cannot sufficiently plead employer status in their
reply brief. See Doc. No. 13. Accordingly, the Court will not dismiss the claims on the basis of
improper employer status.
C. Overtime Violation
Finally, Defendants argue that Plaintiff has not sufficiently pleaded his allegations that
the FLSA’s overtime provisions were actually violated. Defendants argue that the bare allegation
that Defendants “violated and continue to violate the FLSA when they fail to pay Plaintiff and
Class Members consistent with the overtime formula” is insufficient. Again, Defendants focus on
selected sentences from Plaintiff’s complaint rather than considering all of the facts alleged.
Plaintiff’s complaint alleges that Defendants had a policy of misclassifying marine expeditors as
exempt from overtime. See Am. Compl. at ¶¶ 39-40. His First Amended Complaint added that he
typically worked 55-60 hours per week, and was paid at straight time rather than time-and-a-half
for those hours. Id. at ¶¶ 60, 62.
Defendants also note that the Complaint does mention that Defendants had some offices
in places where the FLSA would not apply. See Am. Compl. at ¶ 34 (offices in Greece,
Colombia and Venezuela). Additionally, Plaintiff describes his job as “labor and travel
intensive.” Id. at ¶ 49. Whether some of his work was performed in a jurisdiction not covered by
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the FLSA is a question of fact that will certainly be relevant at a later stage in the case. However,
Plaintiff’s allegation that he was hired to work out of the Houston, Texas, office raises at least a
reasonable inference that some of his work was performed in a geographic location covered by
the FLSA. Id. at ¶ 38.
IV.
CONCLUSION
For the foregoing reasons, the Court finds that Mr. Courtney has properly pleaded claims
for relief under the FLSA in his First Amended Complaint. The Court hereby GRANTS
Plaintiff’s alternative motion for leave to amend his complaint. The First Amended Complaint
(Doc. No. 9-4) is deemed filed as of the date the response was filed and is now the operative
complaint in this action. The Court DENIES Defendants’ Motion to Dismiss for Failure to State
a Claim. (Doc. No. 7.)
IT IS SO ORDERED.
SIGNED at Houston, Texas, on the 27th day of May, 2015.
KEITH P. ELLISON
UNITED STATES DISTRICT JUDGE
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