Balle-Tun v. Zeng & Wong, Inc.

• Decision Date: 13 May 2022
• Docket Number: Civil Action 21-cv-03106-NRN
• Court: U.S. District Court — District of Colorado
• Parties: JUAN BALLE-TUN, ENRIQUE TUN-HAU, and VICTOR MANUEL CEMÉ-CHÁN, Plaintiffs, v. ZENG & WONG, INC. d/b/a PARADISE ASIAN CAFE, Defendant.

JUAN BALLE-TUN, ENRIQUE TUN-HAU, and VICTOR MANUEL CEMÉ-CHÁN, Plaintiffs,
v.
ZENG & WONG, INC. d/b/a PARADISE ASIAN CAFE, Defendant.

Civil Action No. 21-cv-03106-NRN

United States District Court, D. Colorado

May 13, 2022

ORDER ON PARTIAL MOTION TO DISMISS ALL CLAIMS BROUGHT BY PLAINTIFFS ENRIQUE TUN-HAU AND VICTOR CEMÉ-CHÁN (Dkt. #10)

N. Reid Neureiter, United States Magistrate Judge

This case is before the Court upon the consent of the parties (Dkt. #9) and pursuant to an Order of Reference (Dkt. #11) entered by Chief Judge Philip A. Brimmer on January 21, 2022. The matter pending before the Court is Defendant Zeng & Wong, Inc.'s (“Defendant”) Partial Motion to Dismiss all Claims Brought by Plaintiffs Enrique Tun-Hau and Victor Cemé (the “Partial Motion to Dismiss”). (Dkt. #10.) Plaintiffs filed a response to the Partial Motion to Dismiss on February 18, 2022 (Dkt. #14) and Defendant filed its reply on March 4, 2022. (Dkt. #18.) The Court heard argument on March 18, 2022. (See Dkt. #22, Courtroom Minutes.)

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The Court has taken judicial notice of the Court's file and considered the applicable Federal Rules of Civil Procedure and case law. Now, being fully informed and for the reasons discussed below, it is hereby ORDERED that Defendant's Partial Motion to Dismiss is GRANTED.

BACKGROUND

This is a wage and hour dispute. In relevant part, Plaintiffs allege that Defendant failed to pay overtime premiums and denied rest breaks in violation of the relevant Colorado Minimum Wage Orders (MWO)^[1] and Colorado Overtime and Minimum Pay Standards Orders (“COMPS Order”)^[2] (Count II), 7 Colo. Code Regs. 1103-1, and the Colorado Minimum Wage Act (“CMWA”), Colo. Rev. Stat. § 8-6-101 (Count III). For the purposes of the motion to dismiss, the Court accepts as true the allegations that Mr. Tun-Hau and Mr. Cemé-Chán have not worked for Defendant since September 2016 and March 2018, respectively. (Dkt. #1 at 4, ¶¶ 26-27.) Defendant moves for dismissal of these claims with respect to Plaintiffs Mr. Tun-Hau and Mr. Cemé-Chán under Rule 12(b)(6), arguing that their claims are time-barred.^[3]

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Plaintiffs also assert a claim for willful filing of fraudulent information returns in violation of 26 U.S.C. § 7434 (Count V).^[4] Defendant seeks dismissal of this claim with respect to all Plaintiffs, arguing that § 7434 does not apply to claims of underreported wages, so Plaintiffs have failed to state a claim under Rule 12(b)(6).^[5] Defendant also argues that, even if § 7434 does apply, the allegations in the Complaint do not sufficiently plead fraud. Finally, Defendant argues that the Court lacks jurisdiction over this claim under Rule 12(b)(1) because Plaintiffs have not plead any actual damages, and thus lack standing to pursue their claims.

LEGAL STANDARDS

I. Fed.R.Civ.P. 12(b)(6)

To survive a Rule 12(b)(6) motion to dismiss, a complaint must contain “enough facts to state a claim to relief that is plausible on its face.” Ridge at Red Hawk, L.L.C. v. Schneider, 493 F.3d 1174, 1177 (10th Cir. 2007) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). A plausible claim is one 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 (2009). While courts must accept well-pled allegations as true, purely conclusory statements are not entitled to this presumption. Id. at 678, 681. So long as the plaintiff pleads sufficient factual allegations such that the right to relief

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crosses “the line from conceivable to plausible, ” he has met the threshold pleading standard. Twombly, 550 U.S. at 556, 570.

II. Fed.R.Civ.P. 12(b)(1)

Rule 12(b)(1) empowers a court to dismiss a complaint for “lack of jurisdiction over the subject matter.” Fed.R.Civ.P. 12(b)(1). Dismissal under Rule 12(b)(1) is not a judgment on the merits of a plaintiff's case; rather, it calls for a determination that the court lacks authority to adjudicate the matter, attacking the existence of jurisdiction rather than the allegations of the complaint. See Castaneda v. INS, 23 F.3d 1576, 1580 (10th Cir. 1994) (recognizing federal courts are courts of limited jurisdiction and may only exercise jurisdiction when specifically authorized to do so). Rule 12(b)(1) motions generally take one of two forms: a facial attack or a factual attack. When reviewing a facial attack on a complaint pursuant to Rule 12(b)(1), the Court accepts the allegations of the complaint as true. Holt v. United States, 46 F.3d 1000, 1002 (10th Cir. 1995). When reviewing a factual attack on a complaint supported by affidavits and other documents, the Court makes its own factual findings and need not convert the motion to one brought pursuant to Rule 56 of the Federal Rules of Civil Procedure. Id. at 1003.

Defendant mounts a facial attack against the Court's subject matter jurisdiction, arguing that Plaintiff's lack standing under Article III to pursue their claims. “[T]he term ‘standing' subsumes a blend of constitutional requirements and prudential considerations.” Valley Forge Christian Coll. v. Ams. United for Separation of Church and State, Inc., 454 U.S. 464, 471 (1982). To establish standing under Article III of the United States Constitution, a plaintiff must show: (1) that he or she has personally suffered an injury in fact; (2) that the injury is fairly traceable to the challenged action of

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the defendant; and (3) that it is likely, not merely speculative, that the injury will be redressed by a favorable decision. Lujan v. Defenders of Wildlife, 504 U.S. 555 (1992).

ANALYSIS

I. Mr. Tun-Hau and Mr. Cemé-Chán's claims for failure to pay overtime premiums and denial of rest breaks are time-barred.

Mr. Tun-Hau and Mr. Cemé-Chán have not worked for Defendant since September 2016 and March 2018, respectively. (Dkt. #1 at 3, ¶¶ 11-12.) This lawsuit was not filed until November 18, 2021, more than five years after Mr. Tun-Hau stopped working for Defendant and more than three years after Mr. Cemé-Chán stopped working for Defendant. The CMWA (which is implemented through the relevant MWOs and COMPS Orders) does not contain its own statute of limitations. Further, the applicable MWOs and COMPS Orders do not expressly provide a statute of limitations for bringing a private right of action.

Defendant argues that the two- or three-year statute of limitations provision of the Colorado Wage Claim Act (“CWCA”) applies and bars these claims. This provision provides: “All actions brought pursuant to this article shall be commenced within two years after the cause of action accrues and not after that time; except that all actions brought for a willful violation of this article shall be commenced within three years after the cause of action accrues and not after that time.” Colo. Rev. Stat § 8-4-122.^[6]

Plaintiffs argue that, by its own terms, § 8-4-122 does not apply to claims arising from the CMWA and MWOs/COMPs Orders. Section 8-4-122 is part of the CWCA,

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codified in article 4 of Title 8 of the Colorado Revised Statutes. The CMWA, by contrast, is codified in article 6 of Title 8. Thus, where § 8-4-22 says it applies to actions “pursuant to this article”-meaning article 4-it necessarily excludes actions brought under article 6. Plaintiffs argue that the six-year statute of limitations to recover an unliquidated, determinable amount of money applies. See Colo. Rev. Stat. § 13-80-103.5(1)(a) (applying six-year statute of limitations to “[a]ll actions to recover a liquidated debt or an unliquidated, determinable amount of money due to the person bringing the action”).

The Court starts with the principle that “[i]t is the nature of the right sued upon and not the form of action or the relief demanded, which determines the applicability of a particular statute of limitations.” McDowell v. U.S., 870 P.2d 656, 661 (Colo.App. 1994) (quoting Assoc. of Owners v. Otte, 550 P.2d 894, 896 (Colo.App. 1976)). When determining which of two possibly applicable statutes of limitations applies, the Colorado Supreme Court instructs that courts consider the following rules of statutory construction: (1) a later enacted statute should be applied over an earlier enacted statute; (2) the more specific of two applicable statutes should be applied; and (3) the longer of two applicable statutes should be applied.” Reg'l Transp. Dist. v. Voss, 890 P.2d 663, 668 (Colo. 1995) (citing Dawson v. Reider, 872 P.2d 212, 214 (Colo. 1994)). However, the third rule is the “rule of last resort, ” BP Am. Prod. Co. v. Patterson, 185 P.3d 811, 814 (Colo. 2008), and the Court refers to it as such herein.

The Colorado Supreme Court has also explained:

The legislature itself instructs us that in enacting a statute, it must be presumed to have intended that the entire statute be effective. § 2-4- 201(b), C.R.S. (2007). Furthermore, a provision existing as part of a comprehensive statutory scheme must be understood, when possible, to

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harmonize the whole. Frank M. Hall & Co. v. Newsom, 125 P.3d 444, 448 (Colo. 2005); cf. Walgreen Co. v. Charnes, 819 P.2d 1039, 1043 (Colo. 1991) (“City charters and ordinances pertaining to the same subject matter are to be construed in pari materia to ascertain legislative intent and to avoid inconsistencies and absurdities.”). The legislature is also presumed to intend that the various parts of a comprehensive scheme are consistent with and apply to each other, without being required to incorporate each by express reference in the other. See Martinez v. People, 69 P.3d 1029, 1033 (Colo. 2003); see generally 2B Norman J. Singer, Sutherland Statutory Construction, § 51.02, at 188 (6th ed. 2000) (“Provisions in one act which are omitted in another on the same subject matter will be applied when the purposes of the two acts are consistent.”).

Id. at 813; see also Yuma Cnty. Bd. of Equalization v. Cabot Petroleum...