Ortiz v. Panera Bread Company et al
Filing
26
MEMORANDUM OPINION re: Motion to Dismiss. (see Order for details) Signed by District Judge Claude M. Hilton on 8/2/11. (tfitz, )
IN THE UNITED STATES DISTRICT COURT j
FOR THE
EASTERN DISTRICT OF VIGINIA
Alexandria Division
i
•2
h.M
L.
IC!SZV.:Vr-T('>''''r
JAIME ORTIZ,
Plaintiff,
Civil Action No.
V.
1:10CV1424
PANERA BREAD COMPANY,
et al. ,
Defendants,
MEMORANDUM OPINION
This case is before the Court on Defendants Panera Bread
Company and Panera, LLC's (hereinafter collectively as "Panera")
Motion To Dismiss Or, In The Alternative, To Stay This Action.
On December 16, 2010, Plaintiffs Denarius Lewis,
Carroll
Ruiz, and Corey Weiner ("Lewis Plaintiffs") filed a Complaint in
the United States District Court for the Middle District of
Florida, Lewis, et al. v. Panera Bread Company, Case No. 2:10cv00760-CEH-DNF, alleging that they, and other similarly
situated, current and former Assistant Managers of Panera stores
were misclassified and thus improperly denied premium
compensation of time-and-a-half for overtime hours worked.
Specifically, the Lewis Plaintiffs claim that between December
2007 and the present,
Defendant has misclassified Plaintiffs and
the other employees who have worked as 'Assistant Managers'
at
Defendant's bakery-cafes across the United States as being
'exempt' from the protections of the Fair Labor Standards Act,
paying Plaintiffs and the other similarly situated employees on
a salaried basis without compensating them at time and one-half
of their regular rate of pay for their overtime hours worked.
Defendants failed to pay Plaintiffs and the other employees the
overtime they were due while they were employed by Defendant in
a non-exempt training position, and that Defendant has failed to
maintain records of the start times,
stop times, actual hours
worked each day, and total hours worked each week by Plaintiffs
and the other similarly situated employees for each work week
between December 2006 and the present.
As a result,
the Lewis
Plaintiffs claim that Panera violated the FLSA.
On March 11,
2011,
the Lewis Plaintiffs and Panera entered
into a Tolling Agreement which suspended the litigation in an
effort to facilitate settlement discussions of the Lewis claims
against Panera. These discussions are continuing and a formal
mediation of the Lewis matter is expected to occur within the
next
few months.
On December 20, 2010, Jaime Ortiz filed his Complaint for
Damages in this Court,
alleging in Count I that he, and
similarly situated, current and former Assistant Managers of
Page 2 of 18
Panera stores were misclassified and thus improperly denied
premium compensation of time-and-a-half for overtime hours
worked. Ortiz claims that Plaintiff was misclassified by
Defendants as exempt from the overtime requirements of the and
that Plaintiff and other similarly situated Assistant Managers
were non-exempt employees, and eligible for overtime
compensation, under the FLSA. They routinely worked more than 40
hours in a week but were not paid overtime. Just like the Lewis
Plaintiffs,
The
Complaint
Ortiz claims that Panera violated the FLSA.
proposed
are
class
essentially
filed Lewis Complaint.
and
claims
identical
alleged
to
those
in
in
the
the
Ortiz
earlier-
Ortiz and Lewis both assert claims based
on the same legal theories against the same Defendant,
on behalf
of the same group of employees and seek the same remedies.
In light of the nearly identical nature of the claims and
of the persons who are alleged to be "similarly situated" in
both Ortiz and Lewis,
dismissal of the later-filed lawsuit is
warranted under the first-to-file rule.
The first to file rule
states that in cases of federal concurrent jurisdiction, the
court which first has possession of the subject should decide
it.
("The general rule in federal courts is that the court in
which jurisdiction first attaches should be the one to decide
the case.");
Allied-General Nuclear Servs v.
Page 3 of 18
Commonwealth Edison
Co., 675 F.2d 610, 611 n.l (4th Cir. 1982)
("Ordinarily, when
multiple suits are filed in different Federal courts upon the
same factual issues, the first or prior action is permitted to
proceed to the exclusion of another subsequently filed.")
(citing Carbide & Carbon Chems. Corp. v. United States Indus.
Chems,
Inc.,
140 F. 2d 47,
49 (4th Cir.
1944)).
The first to file rule gives priority for purposes of
choosing among possible venues when parallel litigation has been
instituted in separate courts,
establishes jurisdiction.
Welding Co.,
Inc.,
to the party who first
Ellicott Mach.
502 F.2d 178,
180 n.2
Corp. v. Modern
(4th Cir.
1974).
The
purpose underlying the first-to-file rule is the avoidance of
duplicative litigation and the conservation of judicial
resources and to ensure judicial efficiency, consistency, and
comity.
The first-to-file rule is particularly appropriate in the
context of competing FLSA collective actions, which threaten to
present overlapping classes, multiple attempts at certification
in two different courts, and complicated settlement
negotiations.
It is not surprising that federal courts
consistently apply the first-to-file rule to overlapping wage
and hour collective actions. See, e.g., Fisher v. Rite Aid Corp.
& Eckerd Corp., No.
RDB-09-1909,
2010 U.S. Dist. LEXIS 56383
Page 4 of 18
(D.
Md.
June 8, 2010); Meyers v. GC Servs.,
2010 U.S.
Dist.
LEXIS 25764,
Walker v. Progressive Cas.
*4
(S.D.
Ins. Co.,
L.P.,
W. Va.
No.
25,
Stores, Inc.,
18,
2010);
2003 U.S.
2003); White v. Peco
546 F. Supp. 2d 339 (S.D. Miss. 2008); Steavens v.
Elec. Data Sys. Corp.,
Mich. Nov.
Mar.
3:09-1242,
C03-656R,
Dist. LEXIS 7871, at *10 (W.D. Wash. May 9,
Foods, Inc.,
No.
No.
2008)(same);
07-14536,
2008 U.S. Dist.
LEXIS (E.D.
Fuller v. Abercrombie & Fitch
370 F. Supp. 2d 686 (E.D. Tenn. 2005)
(same);
Goldsby v. Ash, 2010 U.S. Dist. LEXIS 40213 (M.D. Ala. Apr. 22,
2010)
(same); Nava v. Belfor USA Grp.,
LEXIS 45041 (E.D. Mich. June 10,
2008)
Inc.,
2008 U.S. Dist.
(same).
The parties in these two cases are identical. Panera is the
defendant employer in both actions.
Both Ortiz and the Lewis
Plaintiffs seek to represent the exact same class of current and
former Assistant Manager employees who worked at Panera stores
nationwide during the past three years.
Jaime Ortiz is a member
of the putative collective class alleged in Lewis. And the Lewis
Plaintiffs are now members of the putative collective class
alleged in Ortiz.
In both lawsuits,
Plaintiffs seek to recover
from Panera.
The claims alleged by Ortiz in the present litigation are a
mirror image of those alleged in the Lewis action. Both lawsuits
allege that Panera misclassified Assistant Managers as exempt
Page5 of18
from the overtime requirements of the FLSA,
and failed to pay
time and-a-half for overtime hours worked in violation of the
FLSA. Both cases allege that this was done pursuant to a
uniform,
company-wide policy aimed at avoiding paying overtime
compensation.
Both cases seek the same relief under the same
substantive law while requesting certification of the same
putative class.
Defendant Panera also moves
to dismiss
Plaintiff's common
law claims in Counts III and IV as Plaintiff has failed to state
a
claim for relief
in either count.
"On a Rule 12(b)(6)
if
'a complaint must be dismissed
it does not allege enough facts
that
is
plausible
Charlottesville,
Giarratano v.
R.
motion,
Civ.
P.
579
Johnson,
on
F.3d
its
380,
to
state a claim to relief
face.'"
386
Monroe
(4th Cir.
521 F.3d 298, 302
v.
2009)
City
of
(quoting
(4th Cir. 2008));
Fed.
12(b)(6).
Under Federal Rule of Civil Procedure 8(a)(2), a complaint
is required to contain "a short and plain statement of the claim
showing that the pleader is entitled to relief."
As the Supreme
Court has explained, the purpose of the Rule is to "give the
defendant fair notice of what the claim is and the grounds upon
which it rests."
(2007).
Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555
While Rule 8(a)(2) does not require detailed factual
Page 6 of 18
allegations,
"it demands more than an unadorned,
unlawfully-harmed- me accusation."
the-defendant-
Ashcroft v. Iqbal,
U.S.
, 129 S.Ct. 1937, 1949 (2009) . Hence, a pleading that offers
only "labels and conclusions" or "a formulaic recitation of the
elements of a cause of action will not do." Id.
Twombly, 550 U.S. at 555).
(quoting
Nor will a complaint that tenders
mere "naked assertion[s]" devoid of "further factual
enhancement." Twombly,
1949.
550 U.S. at 557;
Iqbal,
129 S.Ct.
at
Indeed, the Fourth Circuit has concluded that the Supreme
Court's decision in Twombly establishes a review that is "more
favorable to dismissal of a complaint" at the earliest stages of
a case. Giarratano,
Under
the
plausibility
allows
the
defendant
S.Ct.
at
above
when
court
is
521 F.3d at 304 n.3.
the
to
liable
1949.
standard,
plaintiff
draw
for
the
the
"[a]
pleads
claim
factual
reasonable
misconduct
The plausibility standard
has
content
inference
alleged."
"asks
facial
that
that
the
Iqbal,
129
for more
than a
sheer possibility that a defendant has acted unlawfully."
Id.
"[W]here the well-pleaded facts do not permit the court to infer
more than the mere possibility of misconduct,
alleged —
entitled
8(a)(2)).
but
to
it
has
not
~show[ny]'
relief.'"
Id.
at
1950
-
the complaint has
'that
(quoting
the
Fed.
pleader
R.
Civ.
is
P.
As a result, even a complaint that pleads facts that
Page 7 of 18
are
consistent
Rather,
a
with
defendant's
liability
is
insufficient.
the facts in the complaint must allow the court to reach
reasonable inference that the defendant is liable.
Specifically,
be
a
dismissed
if
under Rule 12(b)(6),
he
fails
to
allege
a plaintiff's claim must
"enough
facts
to
state
a
claim to relief that is plausible on its face" such that he has
"nudged
[his]
claims
plausible." Twombly,
To
state
a
across
the
line
from
conceivable
to
550 U.S. at 570.
claim
for
defamation
under
Virginia
law,
the
Plaintiff must allege enough facts to raise beyond a speculative
level:
"(1) publication of
the requisite intent."
(Va.
2005)
Moore,
makes
275
no
slander").
S.E.2d 632,
"to
the
635
87,
actionable
90 (Va.
(Va.
some
actions
when
third
person
S.E.2d 203,
libel);
(noting
for
an
612
of
1981)
occurs
understood by such person."
S.E.
elements
between
Publication
transmitted
an actionable statement with
Jordan v. Kollman,
(identifying
distinction
(2)
that
libel
actionable
so
as
Thalhimer Bros.,
to
Fleming
and
206
v.
"Virginia
those
statement
be
(3)
for
is
heard
and
Inc. v. Shaw,
159
1931). Certain types of false statements are
per se:
(1)
those
which
impute
to a person
the
commission of some criminal offense involving moral turpitude,
for which the party,
punished;
(2)
if the charge is true, may be indicted and
those which impute that a person is infected with
Page 8 of 18
some contagious disease, where if the charge is true,
exclude
the
party
person
unfitness
from
to
society;
perform
employment of profit,
(3)
the
or want of
those
which
duties
of
it would
impute
an
office
and
(4)
275
defamation
per
S.E.2d
se
at
must
635.
V.
Melton,
Here,
458 S.E.2d 580,
Private
prove
negligently by a preponderance of
584
(Va.
or
those which
prejudice such person in his or her profession or trade.
Moore,
a
integrity in the discharge of
the duties of such an office or employment;
v.
to
that
plaintiffs
the
the evidence.
Fleming
alleging
defendant
acted
Food Lion,
Inc.
1995).
Plaintiff's claim for defamation per se fails to
state a claim as he does not allege the first element of
publication to a third party. "The failure to allege and prove
that there was publication of defamatory statements by the
Defendant to a third party is fatal to an action for common law
libel in Virginia." Cybermotion, Inc. v. Vedcorp, L.C., 41 Va.
Cir.
348,
349 (Va. Cir.
Ct.
1997).
Plaintiff's defamation per se claim is subject to a
qualified privilege. The Virginia Supreme Court has advised
that, in the context of an employment relationship, an allegedly
defamatory statement is afforded a qualified privilege when the
statement is made between persons on a subject in which they
have an interest or duty. Union of Needletrades, Indus. &
Textile Emp. v. Jones,
603 S.E.2d 920, 924 (Va. 2004).
Page9 of18
See also
Larimore v. Blaylock,
528 S.E.2d 119,
121 (Va. 2000).
("We have
applied the doctrine of qualified privilege in a number of cases
involving defamatory statements made between co-employees and
employers in the course of employee disciplinary or discharge
matters."). Courts have applied this privilege to communications
by employers to employees explaining a co-worker's termination
and to communications by employers discussing former employees
with their prospective employers. See Wynn v. Wachovia Bank, No.
3:09CV136, 2009 U.S. Dist. LEXIS 38250, at *9-10 (E.D. Va. May
6, 2009); Hargrave v. Tignor,
1991)
24 Va.
Cir.
353,
358
(Va. Cir. Ct.
("It is an established general rule that a communication
respecting the character of an employee or former employee is
qualifiedly privileged if made in good faith by a person having
a duty in the premises to one who has a definite interest
therein ... So long as good faith is present, the person
making the statement is not limited to facts that are within his
personal knowledge but may, and should, pass on to his inquirer
all relevant information that has come to him, regardless of
whether he believes it to be true or not").
A showing of malice is necessary to overcome the privilege.
Larimore, 528 S.E.2d at 121.
"Common law malice exists where:
(1) the defendant knew the statement was false or made it with
reckless disregard of whether it was false or not; or (2) the
statement was deliberately made in such a way that it was heard
Page 10 of 18
by persons having no interest or duty in the subject of the
statement; or (3) the statement was unnecessarily insulting; or
(4) the language used was stronger or more violent than was
necessary under the circumstances; or (5)
because of hatred,
the statement was made
ill will or a desire to hurt the plaintiff
rather than as a fair comment on the subject." Hargrave,
24 Va.
Cir. at 359. The plaintiff "must affirmatively prove the
existence of actual malice,
and to do so,
[the facts]
must be
more consistent with the existence of actual malice than with
its nonexistence, and at least raise a probability of its
existence ... if the language of the communication and the
circumstance attending its publication are as consistent with
the non-existence of malice as with its existence, there is no
issue for the jury ."
Id. at 360-61. "Repeated assertions that
a party acted with malice or with a motive of personal spite is
not sufficient; rather, such conclusory language does not state
a claim for malice if the facts as alleged cannot support a
finding as such." Wynn v. Wachovia Bank, No. 3:09CV136, 2009
U.S. Dist. LEXIS 38250, at *10-11 (E.D. Va. May 6, 2009).
In this case, Plaintiff alleges that Panera communicated
the reasons for his termination with the General Manager of the
store where he was employed at the time of his discharge.
Clearly, Plaintiff's direct supervisor needed to be informed of
Plaintiff's termination and the reasons behind it. Plaintiff
Page11 of18
does not allege that Panera communicated with any other
employees about his termination. Any discussions concerning
Ortiz's termination were between members of management who were
fulfilling their job responsibilities and acting on common,
corresponding duties or interests when they discussed
Plaintiff's termination. Therefore,
Plaintiff s defamation claim
fails and should be dismissed. No malice on the part of Panera
has been established, as Plaintiff has pled only conclusory
statements regarding Panera's motive and malicious intent.
See
Larimore, 528 S.E.2d at 122 ("employment matters are occasions
of privilege in which the absence of malice is presumed").
Therefore,
Plaintiff's defamation claim lacks the essential
publication element,
and should be dismissed.
Plaintiff also claims that he was "required to republish
the false accusations to others because of the need to look for
new employment and explain to family what happened." However,
Virginia law does not recognize self-publication as a means of
establishing the publication element of a claim for defamation.
This Court recently addressed this very issue in Wynn v.
Wachovia Bank, No. 3:09CV136, 2009 U.S. Dist. LEXIS 38250, at
*7-8 (E.D. Va. May 6, 2009). The Court stated, "Virginia has not
recognized a relatively new theory of self-publication--a theory
Plaintiff relies on in her defamation claim." The Court cited to
a case from the Circuit Court of the City of Salem, Cybermotion,
Page 12 of18
Inc. v. Vedcorp, L.C.,
41 Va. Cir. 348, 348
(Va. Cir. Ct. 1997),
which considered the issue of "whether the theory of compelled
self publication by the Plaintiff can be a substitute for the
requirement that the Defendant must publish the defamatory words
to a third person. The answer is that it cannot." Therefore,
Plaintiff's
claim that he has been forced to defame himself
is
insufficient to support the publication requirement of a
defamation claim.
Accordingly,
the Court should dismiss Count
III of Plaintiff's Complaint, as Plaintiff has failed to
establish the publication element of his defamation claim.
In
order
emotional
to
state
distress,
allegations
tending
a
a
claim
for
Virginia
to show
was intentional or reckless;
intentional
litigant
that:
(1)
must
infliction
plead
factual
the wrongdoer's
conduct
(2) that his conduct was outrageous
and intolerable, offending the generally accepted standards
decency
and
morality;
(3)
of
that
there
is
a
causal
of
connection
between the conduct and the emotional distress; and (4)
that the
resulting emotional distress was severe. Womack v. Eldridge, 210
S.E.2d 145,
of
148
(Va.
1974)
(recognizing intentional
emotional distress as a cause of
action for the
infliction
first
time
under Virginia law). Plaintiff has failed to allege that Panera
engaged
in
conduct
so
outrageous
and
intolerable
that
it
offended generally accepted standards of decency and morality.
Moreover,
Plaintiff has not alleged any
Page 13 of18
facts
from which
the
Court
could
conclude
emotional distress.
or
infer
that
he
experienced
severe
These omissions are fatal to his claim.
Claims for intentional infliction of emotional distress are
disfavored under Virginia law. Russo v. White,
162
4 00 S.E.2d 160,
(Va. 1991). The burden of proof for this claim is high and
not often met, as the plaintiff must prove his or her case by
clear and convincing evidence. Ruth v. Fletcher,
416
(Va.
377 S.E.2d 412,
1989).
When evaluating a claim for intentional infliction of
emotional distress,
" [i]t is for the court to determine,
in the
first instance, whether the defendant's conduct may reasonably
be regarded as so extreme and outrageous as to permit recovery
. . . ." Womack,
meet
210 S.E.2d,
at 148.
Plaintiff's claim fails to
this standard.
Because the tort provides no clear definition of the
prohibited conduct,
it is difficult to state a viable claim for
intentional infliction of emotional distress. Russo, 400 S.E.2d
at 162. The second element of the claim cannot be satisfied by
alleging that the defendant's behavior was tortious, or even
criminal.
Moreover, malice or intentional behavior which would
justify punitive damages for other torts will not suffice.
"Liability has been found only where the conduct has been so
outrageous in character, and so extreme in degree, as to go
beyond all possible bounds of decency, and to be regarded as
Page 14 of18
atrocious, and utterly intolerable in a civilized community."
Id.
(quoting the Restatement (Second) of Torts, § 46, comment d,
with approval).
See Doe v. Bruton Parrish Church, 42 Va. Cir.
467, 471 (Vir. Cir. Ct.
1997).
This high standard is
exceptionally difficult
employment context where multiple
the
assertion.
See Long v.
933,
(E.D.
945
outrageous
Va.
conduct
courts
First Union Corp.
1995)
as
a
(defendant
matter
of
prove
in
have
Va.,
of
rejected its
894
bank
did
when
law
to
it
F.
not
Supp.
commit
instituted
a
policy that employees were to speak only English while at work).
Karpel v.
38137,
Inova Health Sys.
*7
(E.D.
discrimination or
the
level
of
Va.
Servs.,
Jan.
retaliation,
outrageousness
27,
Inc.,
No.
1997)
even if proven,
required
Isom,
Mgmt.
828
Grp.,
March
1,
F.
Inc.,
1990)
Supp.
No.
397
(E.D.
LM-827-4,
(court
Va.
to
1993));
that
do
state
1990 WL 751079,
determined
1997 WL
(well-settled
intentional infliction of emotional distress)
v.
96-347-A,
not
a
that
rise
claim
to
for
(citing Beardsley
Brooks
*3
v.
Kilborn
(Va. Cir.
allegations
that
Ct.
the
defendant had a severe drinking problem, frequently went to work
drunk,
intentionally
harassed
plaintiff
employee
on numerous
occasions, and was argumentative and hostile were not enough to
state a claim for intentional infliction of emotional distress).
Plaintiff's intentional infliction of emotional distress
claim also fails because he has insufficiently alleged the
Page 15 of18
severity of any alleged mental or emotional distress. Under the
fourth element,
emotional distress would be considered "severe"
"only when the emotional distress is extreme, and only where the
distress inflicted is so severe that no reasonable person could
be expected to endure it." Russo v. White,
(Va. 1991). In Russo,
400 S. E. 2d 160, 163
the plaintiff attempted to support her
claim for intentional infliction of emotional distress by
alleging that "she was nervous, could not sleep, experienced
stress and its physical symptoms, withdrew from activities, and
was unable to concentrate at work." Id.
The Virginia Supreme
Court affirmed the ruling of the trial court which had sustained
the defendant's demurrer.
In particular,
the Court noted that
Plaintiff's allegations were deficient because she had no
objective physical injury caused by the emotional distress,
sought no medical attention for it,
was not confined in a
hospital or at home, and had loss no income. Id.; see also
Molina v. Summer Consultants, Inc., No. 152715, 1996 WL 1065653,
*3 (Va. Cir. Ct. Dec. 9, 1996)
(holding that plaintiff's
allegations that she suffered shock, panic attacks, lost sleep,
lost income, humiliation, stress, pain, suffering, medical
expense, physical impact, and other injury as a result of her
employer's continued sexual harassment were not sufficient to
sustain a claim for "severe" emotional distress); Michael v.
Sentara Health Sys., 939 F. Supp. 1220, 1234 (E.D. Va. 1996)
Page 16 of18
(dismissing claim for intentional infliction of emotional
distress where plaintiff did not allege that she sought medical
treatment, ceased functioning normally,
or that the stress
caused her any objectively verifiable physical or emotional
injury) ^
In this case,
Plaintiff alleges that Panera's actions
caused him to "experience emotional pain and suffering,
loss of
enjoyment, and other damages." He further claims that he
"suffered severe mental and emotional distress."
These bare and
conclusory assertions do not suffice under the above standards.
Plaintiff's claim for intentional infliction of mental and
emotional distress is based upon statements allegedly made by
his supervisors during the termination of his employment from
Panera. As these alleged statements arose out of Plaintiff's
employment with Panera and occurred during the course of
Plaintiff's employment with Panera, Plaintiff's exclusive remedy
against Panera for such alleged injuries would be recovery under
the Virginia Workers'
Compensation Act. See Va. Code Ann. §
65.2-307.
For
these
reasons
Defendant
Panera's
Motion
To
Dismiss
Plaintiff's Complaint should be granted for these Plaintiff's to
join in the Lewis case in the Middle District of Florida and to
pursue any common law claims at that time.
Page 17 of18
An appropriate Order shall issue,
ML
Claude M. Hilton
,...
.......
United States District Judge
b
Alexandria, Virginia
August .0^"
, 2011
Page 18 of 18
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