Diaz v. Castro

• Decision Date: 14 August 2014
• Docket Number: Civil Action No. H–13–1242.
• Citation: 122 F.Supp.3d 603
• Parties: Daniel M. DIAZ and All Others Similarly Situated, Plaintiffs, v. Felipe Sandoval CASTRO d/b/a Castro Contractors, Defendant.
• Court: U.S. District Court — Southern District of Texas

122 F.Supp.3d 603

Daniel M. DIAZ and All Others Similarly Situated, Plaintiffs,

v.Felipe Sandoval CASTRO d/b/a Castro Contractors, Defendant.

Civil Action No. H–13–1242.

United States District Court, S.D. Texas, Houston Division.

Signed Aug. 14, 2014.

Joe Micah Williams, The Law Offices of Joe M. Williams & Associates, Houston, TX, for Plaintiffs.

Dennis A. McQueen, Michael Andrew Harris, Pagel Davis et al., Houston, TX, for Defendant.

OPINION AND ORDER

MELINDA HARMON, District Judge.

Pending before the Court in the above referenced putative collective action under the Fair Labor Standards Act ("FLSA"), 29 U.S.C. § 201 et seq., to recover unpaid overtime wages and compensation for hours worked but not recorded or paid ("off-the-clock"), liquidated damages, attorney's fees, costs, and post-judgment interest,¹ are the following motions: (1) Plaintiff Daniel M. Diaz's ("Diaz's") motion for conditional class certification (instrument # 12); (2) Plaintiff's motion to strike Defendant Felipe Sandoval Castro d/b/a Castro Contractor's ("Castro's") good faith defense (# 15); and (3) Castro's motion to dismiss for lack of subject matter jurisdiction under Federal Rule of Civil Procedure 12(b)(1) (# 18).

Because the last motion addresses the threshold issue of the Court's subject matter jurisdiction, which the Court must have to entertain the other motions, the Court reviews it first.

Castro's Motion to Dismiss under Rule 12(b)(1) (# 18)

A. Federal Rule of Civil Procedure 12(b)(1)

Rule 12(b)(1) allows a party to move for dismissal of an action for lack of subject matter jurisdiction. The party seeking to invoke federal jurisdiction, here Diaz, bears the burden of establishing subject matter jurisdiction for the 12(b)(1) motion. Ramming v. United States, 281 F.3d 158, 161 (5th Cir.2001).

In reviewing a motion under 12(b)(1) the court may consider (1) the complaint alone; (2) the complaint supplemented by undisputed facts evidenced in the record; or (3) the complaint supplemented by undisputed facts plus the court's resolution of disputed facts. Williamson v. Tucker, 645 F.2d 404, 413 (5th Cir.1981).

A motion to dismiss for lack of subject matter jurisdiction under Rule 12(b)(1) is characterized as either a "facial" attack, i.e., the allegations in the complaint are insufficient to invoke federal jurisdiction, or as a "factual" attack, i.e., the facts in the complaint supporting subject matter jurisdiction are questioned. In re Blue Water Endeavors, LLC, Bankr.No. 08–10466, Adv. No. 10–1015, 2011 WL 52525, *3 (Bankr.E.D.Tex. Jan. 6, 2011), citing Rodriguez v. Texas Comm'n of Arts, 992 F.Supp. 876, 878–79 (N.D.Tex.1998), aff'd, 199 F.3d 279 (5th Cir.2000). A facial attack happens when a defendant files a Rule 12(b)(1) motion without accompanying evidence. Paterson v. Weinberger, 644 F.2d 521, 523 (5th Cir.1981). In a facial attack, allegations in the complaint are taken as true. Blue Water, 2011 WL 52525 at *3, citing Saraw Partnership v. United States, 67 F.3d 567, 569 (5th Cir.1995).

If it is a factual attack, the Court may consider any evidence (affidavits, testimony, documents, etc.) submitted by the parties that is relevant to the issue of subject matter jurisdiction. Id., citing Irwin v. Veterans Admin., 874 F.2d 1092, 1096 (5th Cir.1989). A defendant making a factual attack on a complaint may provide supporting affidavits, testimony or other admissible evidence. Paterson v. Weinberger, 644 F.2d 521, 523 (5th Cir.1981). The plaintiff, to satisfy its burden of proof, may also submit evidence to show by a preponderance of the evidence that subject matter jurisdiction exists. Id. The court's consideration of such matters outside the pleadings does not convert the motion to one for summary judgment under Rule 56(c). Robinson v. Paulson, H–06–4083, 2008 WL 4692392 at *10 (S.D.Tex. Oct. 28, 2008), citing Garcia, 104 F.3d at 1261. "Unlike in a facial attack where jurisdiction is determined upon the basis of allegations of the complaint, accepted as true[,] when a factual attack is made upon federal jurisdiction, no presumption of truthfulness attaches to the plaintiffs' jurisdictional allegations, and the court is free to weigh the evidence and satisfy itself as to the existence of its power to hear the case. In a factual attack, the plaintiffs have the burden of proving that federal jurisdiction does in fact exist." Evans v. Tubbe, 657 F.2d 661, 663 (5th Cir.1981). In resolving a factual attack on subject matter jurisdiction under Rule 12(b)(1), the district court, which does not address the merits of the suit,² has significant authority " ‘to weigh the evidence and satisfy itself as to the existence of its power to hear the case.’ " Robinson v. Paulson, No. H–06–4083, 2008 WL 4692392, *10 (S.D.Tex. Oct. 22, 2008), quoting Garcia v. Copenhaver, Bell & Assocs., 104 F.3d 1256, 1261 (11th Cir.1997), and citing Clark v. Tarrant County, 798 F.2d 736, 741 (5th Cir.1986).

Because both Diaz and Castro have submitted evidence with their briefs, this is a factual 12(b)(1) attack.

Mootness Doctrine and Jurisdiction

Article III of the United States Constitution mandates that federal courts may only adjudicate "cases" or "controversies," which must exist at all stages of a litigation. U.S. CONST. art. III, § 2. Without an actual case or controversy, a federal court has no subject matter jurisdiction. Genesis Healthcare Corp. v. Symczyk, ––– U.S. ––––, 133 S.Ct. 1523, 1528, 185 L.Ed.2d 636 (2013) ; Lewis v. Continental Bank Corp., 494 U.S. 472, 477, 110 S.Ct. 1249, 108 L.Ed.2d 400 (1990) ; Preiser v. Newkirk, 422 U.S. 395, 401, 95 S.Ct. 2330, 45 L.Ed.2d 272 (1975). For purposes of Article III, a matter becomes moot if the issues raised are no longer live or if the plaintiff lacks a legally cognizable interest in the outcome. Already, LLC v. Nike, Inc., ––– U.S. ––––, 133 S.Ct. 721, 726, 184 L.Ed.2d 553 (2013) ; Chafin v. Chafin, ––– U.S. ––––, 133 S.Ct. 1017, 1023, 185 L.Ed.2d 1 (2013) ; Genesis, 133 S.Ct. at 1528. A case "becomes moot only when it is impossible for a court to grant any effectual relief whatever to the prevailing party." Knox v. Service Employees, ––– U.S. ––––, 132 S.Ct. 2277, 2287, 183 L.Ed.2d 281 (2012). If an event occurs that deprives the plaintiff of a personal stake in the outcome of the case or makes it impossible for a court to grant effectual relief to it, the case must be dismissed as moot. Genesis, 133 S.Ct. at 1528 ; Sandoz v. Cingular Wireless LLC, 553 F.3d 913, 921 n. 5 (5th Cir.2008).

In the Fifth Circuit the mootness doctrine generally applies to FLSA collective action overtime cases when, before other employees opt into the suit, the defendant offers the plaintiff the full relief sought, even if he rejects it. Sandoz, 553 F.3d at 915³ ; Rollins v. Sys. Integration, Inc., No. 4:05–CV–408, 2006 WL 3486781, at *1, *4 (N.D.Tex. Dec. 4, 2006) If the Offer of Judgment does not compensate the plaintiff for all reasonable statutory damages, it is inadequate and will not moot the plaintiff's claims. To determine if the case is mooted by a Rule 68 Offer of Judgment, the Court thus must determine if the offer provides complete relief to the plaintiff. Mabary v. Hometown Bank, N.A., 276 F.R.D. 196, 201 (S.D.Tex.2011)

C. The FLSA

The FLSA mandates that employers pay overtime compensation for nonexempt employees.⁴ Rainey v. McWane, Inc., 314 Fed.Appx. 693, 694 (5th Cir.2009), citing 29 U.S.C. § 207(a). The FLSA, 29 U.S.C. § 207(a)(1), generally requires an employer to pay employees who work more than forty hours per seven-day work week at a rate for the overtime not less than one and one-half times the employee's regular rate. Allen v. Coil Tubing Servs., LLC, Civ. A. No. H–08–3370, 2011 WL 4916003, *5 (S.D.Tex. Oct. 17, 2011) ; Vela v. City of Houston, 276 F.3d 659, 666 (5th Cir.2001) ; Thibodeaux v. Executive Jet Intern., Inc., 328 F.3d 742, 749 (5th Cir.2003). Under 29 U.S.C. § 216(b), an employer who violates the FLSA shall be liable for "unpaid overtime compensation ... and an additional equal amount as liquidated damages."⁵ Thus an employer who violates the FLSA is liable for liquidated damages equal to the unpaid overtime unless the court finds that the employer acted in good faith and had reasonable grounds to believe that his actions complied with the statute and therefore declines to award or reduces the amount of the liquidated damages. Stokes v. BWXT Pantex, LLC, 424 Fed.Appx. 324, 326 (5th Cir.2011), citing 29 U.S.C. § 260. The employer bears the burden of demonstrating that it acted in good faith to escape mandatory liquidated damages under the statute. Perez v. Guardian Equity Management, LLC, 2011 WL 2672431, at *9 (S.D.Tex. July 7, 2011), citing Singer v. City of Waco, Tex., 324 F.3d 813, 821 (5th Cir.2003), and Stokes v. BWXT Pantex, LLC, 424 Fed.Appx. at 326.

Title 29 U.S.C. § 211(c) requires that the employer "make, keep and preserve such records of the persons employed by him and of the wages, hours, and other conditions of employment maintained by him." The United States Supreme Court in Anderson v. Mt. Clemens Pottery Co., 328 U.S. 680, 66 S.Ct. 1187, 90 L.Ed. 1515 (1946), superceded on other grounds by the Portal–To–Portal Act. 29 U.S.C. § 251 et seq. ), set the standard of proof for any employee suing under § 16(b) of the FLSA "for unpaid minimum wages or unpaid overtime compensation, together with liquidated damages" to satisfy his burden of proof that "he performed work for which he was not properly compensated." 328 U.S. at 686–87, 66 S.Ct. 1187. It held,

When the employer has kept proper and accurate records the employee may easily discharge his burden by securing the production of those records. But where the employer's records are inaccurate or inadequate and the employee cannot offer convincing substitutes a more difficult problem arises, The solution is not to penalize the employee by denying him any recovery on the ground that he is unable to prove the precise extent of uncompensated work. Such

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