798 F.3d 72 (2nd Cir. 2015), 14-1315-cv, Chen v. Major League Baseball Props., Inc.

Docket Nº:Docket 14-1315-cv
Citation:798 F.3d 72
Opinion Judge:POOLER, Circuit Judge :
Party Name:JOHN CHEN, on behalf of himself and all others similarly situated, Plaintiff-Appellant, v. MAJOR LEAGUE BASEBALL PROPERTIES, INC., THE OFFICE OF THE COMMISSIONER OF BASEBALL, dba Major League Baseball, Defendants-Appellees, MAJOR LEAGUE BASEBALL, MAJOR LEAGUE BASEBALL ENTERPRISES, INC., Defendants
Attorney:DEEPAK GUPTA, Gupta Beck PLLC, Washington, DC, (Jonathan E. Taylor, Gupta Beck PLLC; Justin M. Swartz, Juno Turner, Michael N. Litrownik, Outten & Golden LLP, New York, NY, on the brief) for Plaintiff-Appellant. ELISE M. BLOOM, Proskauer Rose LLP (Mark D. Harris, Patrick J. Lamparello, III, Joshu...
Judge Panel:Before: POOLER and CARNEY, Circuit Judges, and GLEESON, District Judge.[1]
Case Date:August 14, 2015
Court:United States Courts of Appeals, Court of Appeals for the Second Circuit
 
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798 F.3d 72 (2nd Cir. 2015)

JOHN CHEN, on behalf of himself and all others similarly situated, Plaintiff-Appellant,

v.

MAJOR LEAGUE BASEBALL PROPERTIES, INC., THE OFFICE OF THE COMMISSIONER OF BASEBALL, dba Major League Baseball, Defendants-Appellees, MAJOR LEAGUE BASEBALL, MAJOR LEAGUE BASEBALL ENTERPRISES, INC., Defendants

Docket Nos. 14-1315-cv

United States Court of Appeals, Second Circuit

August 14, 2015

         Argued March 30, 2015

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         Plaintiff-Appellant John Chen appeals from the dismissal by the United States District Court for the Southern District of New York (John G. Koeltl, J.) of his putative collective action claims under the Fair Labor Standards Act. Chen alleged, inter alia, violations of the minimum wage provisions of the Act arising from his work as an unpaid volunteer at FanFest, a five-day " interactive baseball theme park" organized in conjunction with Major League Baseball's 2013 All-Star Week. We agree with the district court that (1) for purposes of the amusement or recreational establishment exemption, 29 U.S.C. § 213(a)(3), the term " establishment" means a distinct, physical place of business, and (2) the exemption applies to FanFest.

         DEEPAK GUPTA, Gupta Beck PLLC, Washington, DC, (Jonathan E. Taylor, Gupta Beck PLLC; Justin M. Swartz, Juno Turner, Michael N. Litrownik, Outten & Golden LLP, New York, NY, on the brief) for Plaintiff-Appellant.

         ELISE M. BLOOM, Proskauer Rose LLP (Mark D. Harris, Patrick J. Lamparello, III, Joshua Fox, Mark W. Batten, Laura E. Deck, on the brief), New York, N.Y. for Defendants-Appellees.

         Before: POOLER and CARNEY, Circuit Judges, and GLEESON, District Judge.1

          OPINION

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          POOLER, Circuit Judge :

         Plaintiff-Appellant John Chen brought suit against Major League Baseball Properties, Inc. and the Office of the Commissioner of Baseball (" Defendants" ) alleging violations of the minimum wage and recordkeeping provisions of the Fair Labor Standards Act (" FLSA" ), 29 U.S.C. § § 201 et seq., and the New York Labor Law (" NYLL" ), § § 190 et seq. & 650 et seq. Chen alleged that he worked without pay as a volunteer for FanFest, a five-day " interactive baseball theme park" organized in conjunction with Major League Baseball's 2013 All-Star Week. Defendants moved to dismiss the Complaint asserting that FanFest is a seasonal amusement or recreational establishment and therefore exempt from the FLSA's minimum wage requirements pursuant to 29 U.S.C. § 213(a)(3).2 By opinion and order the United States District Court for the Southern District of New York (John G. Koeltl, J. ) dismissed Chen's putative FLSA collective action claims and declined to exercise supplemental jurisdiction over his would-be NYLL class action claims. Chen appeals.

         We conclude that the term " establishment" for purposes of the amusement or recreational establishment exemption to the FLSA means a distinct, physical place of business, agree with the district court that the exemption applies to FanFest, and do not reach the question of whether Chen was an employee.

         BACKGROUND

         We draw the following facts from Chen's first amended complaint (" Complaint" ) and the documents incorporated therein by reference. Fed.R.Civ.P. 10(c); see Roth v. Jennings, 489 F.3d 499, 509 (2d Cir. 2007) ( " Documents that are attached to the complaint or incorporated in it by reference are deemed part of the pleading and may be considered." ). We accept these facts as true for purposes of our de novo review of the district court's grant of Defendants' motion to dismiss. See Gatt Commc'ns, Inc. v. PMC Assocs., L.L.C., 711 F.3d 68, 74-75 (2d Cir. 2013).

         In July 2013 Defendants organized a series of All-Star Week festivities throughout New York City, the host city of that year's Major League Baseball All-Star Game. These included a race, concert, fantasy camp, parade, and an event called FanFest. Between July 12 and July 16, 2013, FanFest operated in the Jacob K. Javits Center (" Javits Center" ) at 655 West 34th Street in New York City. Defendants, who maintain an office at 245 Park Avenue in New York City, described FanFest as " the largest interactive baseball theme park in the world." App'x at 10, ¶ 2. The venue floor map distributed to patrons proclaims that FanFest offers " [o]ver 450,000 [s]quare [f]eet to [h]it, [p]itch, [c]atch, [s]hop, [e]at & [l]ive [b]aseball." Supp. App'x at 8. Activities at FanFest included basebal-themed video games, photo booths, a simulated baseball dugout and fields, baseball clinics, batting cages, music offerings, and autograph signing. In addition, a news item referenced

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in the Complaint notes that " [a] green carpeted replica baseball diamond" was constructed for the event. " MLB FanFest Touted As 'Baseball Heaven on Earth,'" CBS New York, July 10, 2013, available at http://newyork.cbslocal.com/2013/07/10/mlb-fanfest-touted-as-baseball-heaven-on-earth/ (last visited Aug. 13, 2015). Memorabilia collections, a historical presentation on the Negro Leagues, and the world's largest baseball were also on display.

         Defendants staffed the 2013 All-Star Week events primarily with volunteers -- some two thousand in total. The volunteers carried out a range of duties including greeting customers, answering questions and providing directions, taking tickets, checking credentials, staffing activities, and distributing gifts. Chen alleges that although these individuals were identified as volunteers, they expected and received compensation in the form of free admission to events and in-kind benefits such as t-shirts, caps, drawstring backpacks, fanny packs, water bottles, baseballs, lanyards, free admission to FanFest for each volunteer and a guest, and a chance to win a pair of tickets to the All-Star Game.3

         Chen worked three shifts, totaling approximately fourteen hours, at FanFest between July 12 and July 16, 2013. During his shifts, Chen stamped the wrists of FanFest attendees, handed out bags of baseball paraphernalia, placed paper flyers in bags, directed attendees to the exits, alphabetized liability waivers, and worked at a fielding station instructing attendees to deposit the balls they fielded into buckets. Prior to FanFest Chen also attended three hours of mandatory information and orientation sessions in June and July, 2013, at Citi Field, the site of the All-Star Game, and at the Javits Center. Chen received no wages for the shift work or training sessions but was provided a t-shirt, cap, drawstring backpack, water bottle, and baseball.

         Alleging, inter alia, that Defendants failed to pay the minimum wage as required under the FLSA, Chen filed suit. He moved the district court to certify a collective action on behalf of himself and similarly situated volunteers who worked without pay at various All-Star Week events since 2010. Defendants moved to dismiss. Chen filed an amended complaint, which Defendants also moved to dismiss, arguing that (1) Chen was not an employee for purposes of the FLSA and (2) FanFest, as a seasonal amusement or recreational establishment, as defined in 29 U.S.C. § 213(a)(3), was exempt from the FLSA's minimum wage requirements. The district court granted the motion, concluding that, on the face of the Complaint, FanFest qualified for the exemption, and it declined to exercise supplemental jurisdiction over the NYLL claims. Chen v. Major League Baseball, 6 F.Supp.3d 449 (S.D.N.Y. 2014). Chen timely appealed.

         DISCUSSION

         This appeal centers principally on the meaning of the word " establishment" as it is used in Section 13(a)(3) of the FLSA, which exempts seasonal amusement and recreational establishments from the FLSA's minimum wage requirements. See 29 U.S.C. § 213(a)(3). Chen contends that because the district court held that " establishment" meant a distinct, physical place of business, it erroneously concluded that FanFest was the relevant establishment and was covered by the exemption.

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Chen argues instead that FanFest and Major League Baseball, which Defendants concede is not covered by the exemption, are a single establishment for purposes of the FLSA. The district court, in Chen's view, should have applied the Department of Labor's (" DOL" ) multi-prong test for determining whether a business unit is a separate establishment. This approach looks not just to physical separation but also to whether the unit operates separately and whether employees are shared between units -- both fact-intensive inquiries likely not resolvable from the face of the Complaint.

         As this Circuit has not previously addressed the amusement or recreational establishment exemption, we must determine, as a threshold matter, the meaning of the term " establishment" for purposes of Section 13(a)(3). We then turn to the question of whether, at the motion to dismiss stage, the district court properly determined (on the facts alleged) that FanFest, as the relevant establishment, is covered by the exemption.

         A. Standard of Review

          We review de novo the dismissal of a complaint under Federal Rule of Civil Procedure 12(b)(6), construing the complaint liberally and drawing all reasonable inferences in the plaintiff's favor. Sherman v. Town of Chester, 752 F.3d 554, 560 (2d Cir. 2014). To withstand such a motion, 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, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (quoting Bell A. Corp. v. Twombly, 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007)). We review de novo the district court's legal interpretation of a statute. Price Trucking Corp. v. Norampac...

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