Acosta v. Wellfleet Commc'ns, LLC
| Decision Date | 29 September 2018 |
| Docket Number | Case No.: 2:16-cv-02353-GMN-GWF |
| Parties | R. ALEXANDER ACOSTA, Secretary of Labor, United States Department of Labor, Plaintiff, v. WELLFLEET COMMUNICATIONS, LLC, et al., Defendants. |
| Court | U.S. District Court — District of Nevada |
Pending before the Court is the Motion for Summary Judgment, (ECF No. 150), filed by Plaintiff Secretary of Labor, R. Alexander Acosta ("Plaintiff"). Defendants Wellfleet Communications, LLC ("Wellfleet") and Allen Roach filed a Response, (ECF No. 158). Defendants Lighthouse Communications, LLC ("Lighthouse"), New Choice Communications, Inc. ("New Choice"), and Ryan Roach also filed a Response, (ECF No. 160). To both of those Responses, Plaintiff filed one Reply, (ECF No. 163).
Also pending before the Court is the Motion to Dismiss or Alternatively for Summary Judgment, (ECF No. 64), filed by Defendants Allen Roach and Wellfleet. Plaintiff filed a Response, (ECF No. 74), and Allen Roach and Wellfleet filed a Reply, (ECF No. 80).
Also pending before the Court is Allen Roach and Wellfleet's Motion for Summary Judgment, (ECF No. 148). Plaintiff filed a Response, (ECF No. 159), and Allen Roach and Wellfleet filed a Reply, (ECF No. 162).
Also pending before the Court is the Motion to Dismiss, (ECF No. 71), filed by Lighthouse Communications, New Choice, and Ryan Roach. Plaintiff filed a Response, (ECF No. 81), and Lighthouse, New Choice, and Ryan Roach filed a Reply, (ECF No. 87).
Also pending before the Court is the Motion for Summary Judgment, (ECF No. 149), filed by Lighthouse, New Choice, and Ryan Roach. Plaintiff filed a Response, (ECF No. 159), and Lighthouse, New Choice, and Ryan Roach filed a Reply, (ECF No. 165).
For the reasons discussed below, the Court GRANTS in part and DENIES in part Plaintiff's Motion for Summary Judgment, (ECF No. 150); DENIES the Motion to Dismiss or Alternatively for Summary Judgment, (ECF No. 64), filed by Wellfleet and Allen Roach; DENIES the Motion to Dismiss, (ECF No. 71), filed by Lighthouse, New Choice, and Ryan Roach; DENIES the Motion for Summary Judgment, (ECF No. 148), filed by Wellfleet and Allen Roach; and DENIES the Motion for Summary Judgment, (ECF No. 149), filed by Lighthouse, New Choice, and Ryan Roach.
This case involves alleged violations of the Fair Labor Standards Act of 1938, 29 U.S.C. § 201, et seq. ("FLSA") by Wellfleet, New Choice, Lighthouse, Allen Roach, and Ryan Roach (collectively "Defendants"). Defendants either currently operate or operated call center businesses in Las Vegas, Nevada; and Plaintiff, as the Secretary of Labor, represents over one-thousand current and previous workers employed by Defendants. (Am. Compl. 2:3-15, ECF No. 44); (see Ex. A to Am. Compl., ECF No. 44-1) (listing the workers that Plaintiff currently represents in the lawsuit). Plaintiff alleges that Defendants violated several provisions of the FLSA by failing to keep employment records and failing to pay their employees minimum wage and overtime. (Am. Compl. ¶¶ 31-37).
Plaintiff's investigation into Defendants began in October 2015 with Wellfleet and its general manager, Allen Roach. (Id. ¶ 4); (see Decl. Allen Roach ¶ 1, Ex. N to Resp., ECF No. 74-8). Through this investigation, Plaintiff discovered that each worker employed by Wellfleet and Allen Roach "functioned solely as sellers and were paid solely for their sales." (Decl. Allen Roach ¶ 3, Ex. N to Resp., ECF No. 74-8) ("[Wellfleet] paid . . . for their sales, never for theirtime."). Further, Wellfleet and Allen Roach "kept no time records" for its employees, and instead compensated the employees solely based on commission earned from sales. (Id.). Because of this scheme, Plaintiff filed its initial Complaint alleging violations of the FLSA by paying employees less than the federal minimum wage, making illegal deductions from employees' Social Security and Medicare contributions, failing to pay employees for hours worked over forty in a workweek, failing to maintain time records of employees, and interfering with Plaintiff's investigation. (Compl. ¶¶ 17-22, ECF No. 1). Plaintiff's Complaint sought relief from the Court in the form of: (1) permanently enjoining and restraining Wellfleet from "prospectively violating . . . the FLSA;" (2) finding Wellfleet and Allen Roach liable for "unpaid minimum wage and overtime compensation due under the FLSA to present and former employees;" (3) enjoining Wellfleet and Allen Roach from withholding payment of unpaid wages owed to employees; and (4) awarding costs to Plaintiff resulting from the lawsuit. (Id. at 8-9).
During Plaintiff's investigation, Plaintiff also learned of call center businesses that Allen Roach's nephew, Ryan Roach, operated alongside Wellfleet and Allen Roach. (See Dep. Tr. Allen Roach at 3, Ex. A to Am. Compl., ECF No. 74-5). Plaintiff discovered that Ryan Roach acted as the owner of New Choice, which sold telephone lines to residential customers from 2010 to March 2016 through the work of Wellfleet's call center workers. (Id. at 3, 8). In March 2016, New Choice took over the operations of Wellfleet. (Am. Compl. ¶¶ 6-8). Ryan Roach also established Lighthouse in 2010 to sell phone services, which served as another call center among New Choice and Wellfleet as well as a "depository for the funds" from Wellfleet. . Lighthouse's business ended in October 2015. (Am. Compl. ¶ 14).
On September 18, 2017, Plaintiff filed an Amended Complaint, (ECF No. 44), that added New Choice, Lighthouse, and Ryan Roach as Defendants. Plaintiff's theory is that allthe call centers ran by Allen and Ryan Roach consisted of one business. (MSJ 8:22-9:2, ECF No. 150) ( that the "Roaches operated the call center through the Wellfleet, Lighthouse, and New Choice [] shell companies, and managed all the entities as one 'family-run business.'"). The Amended Complaint alleged the same violations of the FLSA by New Choice, Lighthouse, and Ryan Roach as those against Wellfleet and Allen Roach in Plaintiff's Initial Complaint.
Federal Rule of Civil Procedure 12(b)(6) mandates that a court dismiss a cause of action that fails to state a claim upon which relief can be granted. See N. Star Int'l v. Ariz. Corp. Comm'n, 720 F.2d 578, 581 (9th Cir. 1983). When considering a motion to dismiss under Rule 12(b)(6) for failure to state a claim, dismissal is appropriate only when the complaint does not give the defendant fair notice of a legally cognizable claim and the grounds on which it rests. See Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). In considering whether the complaint is sufficient to state a claim, the Court will take all material allegations as true and construe them in the light most favorable to the plaintiff. See NL Indus., Inc. v. Kaplan, 792 F.2d 896, 898 (9th Cir. 1986).
The Court, however, is not required to accept as true allegations that are merely conclusory, unwarranted deductions of fact, or unreasonable inferences. See Sprewell v. Golden State Warriors, 266 F.3d 979, 988 (9th Cir. 2001). A formulaic recitation of a cause of action with conclusory allegations is not sufficient; a plaintiff must plead facts showing that a violation is plausible, not just possible. Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citing Twombly, 550 U.S. at 555).
A court may also dismiss a complaint pursuant to Federal Rule of Civil Procedure 41(b) for failure to comply with Federal Rule of Civil Procedure 8(a). Hearns v. San BernardinoPolice Dept., 530 F.3d 1124, 1129 (9th Cir.2008). Rule 8(a)(2) requires that a plaintiff's complaint contain only "a short and plain statement of the claim showing that the pleader is entitled to relief." Fed. R. Civ. P. 8(a)(2).
Hal Roach Studios, Inc. v. Richard Feiner & Co., 896 F.2d 1542, 1555 n.19 (9th Cir. 1990) (citations omitted). Similarly, "documents whose contents are alleged in a complaint and whose authenticity no party questions, but which are not physically attached to the pleading, may be considered in ruling on a Rule 12(b)(6) motion to dismiss" without converting the motion to dismiss into a motion for summary judgment. Branch v. Tunnell, 14 F.3d 449, 454 (9th Cir. 1994). Under Federal Rule of Evidence 201, a court may take judicial notice of "matters of public record." Mack v. S. Bay Beer Distrib., 798 F.2d 1279, 1282 (9th Cir. 1986). Otherwise, if the district court considers materials outside of the pleadings, the motion to dismiss is converted into a motion for summary judgment. See Arpin v. Santa Clara Valley Transp. Agency, 261 F.3d 912, 925 (9th Cir. 2001).
If the court grants a motion to dismiss, it must then decide whether to grant leave to amend. The court should "freely give" leave to amend when there is no "undue delay, bad faith[,] dilatory motive on the part of the movant . . . undue prejudice to the opposing party by virtue of . . . the amendment, [or] futility of the amendment . . . ." Fed. R. Civ. P. 15(a); Foman v. Davis, 371 U.S. 178, 182 (1962). Generally, leave to amend is only denied when it is clear that the deficiencies of the complaint cannot be cured by amendment. See DeSoto v. Yellow Freight Sys., Inc., 957 F.2d 655, 658 (9th Cir. 1992).
The Federal Rules of Civil Procedure provide for summary adjudication when the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that "there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a). Material facts are those that may affect the outcome of the case. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). A...
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