Ash v. Anderson Merchandisers, LLC

• Decision Date: 21 August 2015
• Docket Number: No. 14–3258.,14–3258.
• Citation: 799 F.3d 957
• Parties: Linda ASH ; Abbie Jewsome, Plaintiffs–Appellants v. ANDERSON MERCHANDISERS, LLC; West AM, LLC ; AnConnect, LLC Defendants–Appellees.
• Court: U.S. Court of Appeals — Eighth Circuit

799 F.3d 957

Linda ASH ; Abbie Jewsome, Plaintiffs–Appellants

v.ANDERSON MERCHANDISERS, LLC; West AM, LLC ; AnConnect, LLCDefendants–Appellees.

No. 14–3258.

United States Court of Appeals, Eighth Circuit.

Submitted: April 16, 2015.

Filed: Aug. 21, 2015.

Brendan J. Donelon, Donelon, P.C., Kansas City, MO, argued, for appellants.

Harry W. Wellford, Jr., Littler Mendelson, P.C., St. Louis, MO, argued (Daniel B. Boatright, on the brief), for appellees.

Before MURPHY, COLLOTON, and KELLY, Circuit Judges.

Opinion

KELLY, Circuit Judge.

Linda Ash and Abbie Jewsome appeal the dismissal of their complaint alleging violations of the Fair Labor Standards Act (FLSA),29 U.S.C. § 201 et seq., and the denial of their post-dismissal motion to vacate the district court's¹ order pursuant to Federal Rules of Civil Procedure 60(b) and 59(e) and request for leave to file an amended complaint.Having jurisdiction under 28 U.S.C. § 1291, we affirm the district court.

I.Background

Ash and Jewsome filed suit against Anderson Merchandisers, West AM, and AnConnect under the FLSA on April 21, 2014, on behalf of themselves and similarly-situated persons.The original complaint alleged that Anderson, West, and AnConnect, the plaintiffs' employer, had violated the FLSA by failing to pay required overtime compensation.The defendants filed a motion to dismiss on May 23, 2014, and the district court granted the motion without a hearing on July 2, 2014.Judgment was entered on behalf of Anderson, West AM, and AnConnect on July 9, 2014.

On July 11, Ash and Jewsome moved to vacate the district court's order pursuant to Federal Rules of Civil Procedure 60(b) and 59(e) and requested leave to file their First Amended Complaint.The district court denied Ash and Jewsome's motion to vacate and request to file an amended complaint on September 11, 2014.Ash and Jewsome timely appealed the district court's dismissal of their complaint and denial of their motion to vacate and request for leave to amend.

II.Discussion

A.Motion to Dismiss

The district court dismissed Ash and Jewsome's complaint for failure to state a claim for two reasons: failure to allege that Anderson, West, and AnConnect were their employer for purposes of the FLSA, and failure to allege a substantive FLSA cause of action.Ash and Jewsome assert on appeal that their complaint was sufficient to state a claim for relief, and that the district court erred in determining otherwise.

“We review the dismissal of a complaint for failure to state a claim de novo, affirming dismissal if the complaint fails to state a claim upon which relief can be granted.”Horras v. Am. Capital Strategies, Ltd.,729 F.3d 798, 801(8th Cir.2013)(quotation, alteration, and internal citation omitted).For a pleading to state a claim for relief it must contain a short and plain statement of the claim showing that the pleader is entitled to relief.Id.(citingFed.R.Civ.P. 8(a)(2) ).The complaint must contain facts sufficient to state a claim that is plausible on its face.Bell Atl. Corp. v. Twombly,550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929(2007).“A 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.”Ashcroft v. Iqbal,556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868(2009).“A pleading that offers ‘labels and conclusions' or ‘a formulaic recitation of the elements of a cause of action will not do.’ ”Id.(quotingTwombly,550 U.S. at 555, 127 S.Ct. 1955 ).

In their complaint, Ash and Jewsome made only one allegation with regard to the defendants' status as their employer: “During all relevant times, [Anderson, West, and AnConnect] were part of an integrated enterprise and, as such, were plaintiffs' employer.During all relevant times, and upon information and belief, all of these defendants shared interrelated operations, centralized control of labor relations, common management and common ownership and/or financial control.”Ash and Jewsome provided no additional facts to support these assertions.Their only allegation is simply a restatement of the legal test used to determine whether certain entities constitute a joint employer for the purpose of civil rights litigation.SeeBaker v. Stuart Broadcasting Co.,560 F.2d 389, 392(8th Cir.1977).However, “the test of employment under the FLSA is one of ‘economic reality.’ ”Tony and Susan Alamo Found. v. Sec'y of Labor,471 U.S. 290, 301, 105 S.Ct. 1953, 85 L.Ed.2d 278(1985)(quotingGoldberg v. Whitaker House Coop., Inc.,366 U.S. 28, 33, 81 S.Ct. 933, 6 L.Ed.2d 100(1961) ).Ash and Jewsome's complaint does not include any facts describing the “economic reality” of their employment, such as their alleged employers' right to control the nature and quality of their work, the employers' right to hire or fire, or the source of compensation for their work.SeeGoldberg,366 U.S. at 32–33, 81 S.Ct. 933.Effectively, the only allegation as to who Ash and Jewsome's employer was is the conclusory statement that Anderson, West, and AnConnect were “part of an integrated enterprise.”

This conclusory allegation is insufficient to satisfy the pleading requirements of Rule 12(b)(6).Ash and Jewsome failed to set forth any facts to support the legal conclusion that Anderson, West, and AnConnect were their employer, instead providing only “labels and conclusions” and “a formulaic recitation of the elements” of their claim.Horras,729 F.3d at 801(quotingIqbal,556 U.S. at 678, 129 S.Ct. 1937 ).Ash and Jewsome could have alleged—and in their first amended complaint, did allege—such facts as the name on their business cards, the identity of their supervisors, the source of their work schedules, and the information they were given when they were hired.It is this type of factual allegation that could “allow[ ]the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.”Id.(quotingIqbal,556 U.S. at 678, 129 S.Ct. 1937 ).However, without this type of factual allegation, the complaint is insufficient for failure to state a necessary element of the claim.

It is important to note that Ash and Jewsome were not required to determine conclusively which of the three defendant companies was their employer at the pleadings stage or describe in detail the employer's corporate structure, which they contend was not within their ability to know so early in the litigation.The pleading standard under Rule 12(b)(6) contemplates that plaintiffs will often be unable to prove definitively the elements of the claim before discovery, particularly in cases where the necessary information is within the control of the defendants.The pleading standard therefore requires only that the plaintiff allege facts sufficient to state a plausible claim.Here, however, Ash and Jewsome did not allege any facts at all that would allow an inference that the defendants were their employer.Without any facts to support their allegation, the complaint contained only the recitation of a legal conclusion, and a mere legal conclusion is not enough to allege an employee-employer relationship as required for an FLSA claim.Because Ash and Jewsome did not adequately allege that Anderson, West, and AnConnect were their employer, as required to state a claim under the FLSA, the district court did not err in dismissing their complaint for failure to state a claim.

The district court also concluded that Ash and Jewsome failed to allege sufficient facts to support a substantive cause of action for overtime violations under the FLSA.Ash and Jewsome assert that in reaching that conclusion, the district court erroneously applied a heightened pleading standard.The proper pleading standard for FLSA claims is a matter of first impression in this circuit following Iqbal and Twombly, and those circuits to have considered the question have arrived at somewhat variable conclusions.CompareLundy v. Catholic Health Sys. of Long Island Inc.,711 F.3d 106, 114(2d Cir.2013)(requiring a plaintiff to allege 40 hours of work in a given workweek as well as some uncompensated time in excess of that 40 hours);andDavis v. Abington Mem. Hosp.,765 F.3d 236, 242–43(3d Cir.2014)(adoptingLundy test);andLanders v. Quality Communications, Inc.,771 F.3d 638, 644–45(9th Cir.2014)(same);withPruell v. Caritas Christi,678 F.3d 10, 13–15(1st Cir.2012)(requiring examples of unpaid time or a description of the nature of the work performed).However, having concluded that Ash and Jewsome's complaint was insufficient because it did not adequately allege that the defendant companies were their employer, we need not reach the question of whether the district court correctly applied the proper pleading standard for the substantive FLSA claim.

B.Motion to Vacate and Request for Leave to File Amended Complaint

Ash and Jewsome argue that the district court's denial of their motion to vacate and request for leave to file an amended complaint was an abuse of discretion.The stated basis for the motion to vacate is the filing of an amended complaint, therefore we must only decide whether the district court erred in denying leave to amend.

We“review the district court's denial of [a plaintiff's]motion for leave to amend for an abuse of discretion.”Horras,729 F.3d at 804(quotingMorrison Enters., LLC v. Dravo Corp.,638 F.3d 594, 602(8th Cir.2011) ).“Although a district court‘may not ignore the [Federal Rule of Civil Procedure] 15(a)(2) considerations that favor affording parties an opportunity to test their claims on the merits,’ it has ‘considerable discretion to deny a post judgment motion for leave to amend because such motions are disfavored.’ ”Id.(alteration in original)(quotingUnited States ex rel. Roop v. Hypoguard USA, Inc.,559 F.3d 818, 824(8th Cir.2009) ).“Unexcused delay is sufficient to justify the court's denial ... if the party is seeking to amend...