Farrell v. Pike, No. 1:03 CCV 01055.

• Decision Date: 16 November 2004
• Docket Number: No. 1:03 CCV 01055.
• Citation: 342 F.Supp.2d 433
• Court: U.S. District Court — Middle District of North Carolina
• Parties: Charles FARRELL, Plaintiff, v. David V.B. PIKE, Rhonda W. Pike, and Witherspoon-Pike Enterprise, Inc. d/b/a Witherspoon Rose Culture, Inc., Defendants.

342 F.Supp.2d 433

Charles FARRELL, Plaintiff, v. David V.B. PIKE, Rhonda W. Pike, and Witherspoon-Pike Enterprise, Inc. d/b/a Witherspoon Rose Culture, Inc., Defendants.

No. 1:03 CCV 01055.

United States District Court, M.D. North Carolina.

November 16, 2004.

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Robert James Willis, Raleigh, NC, for Plaintiff.

Curtis Scott Holmes, Ortiz-Childers & Holmes, P.L.L.C., Durham, NC, for Defendants.

ORDER

BEATY, District Judge.

On October 14, 2004, the United States Magistrate Judge's Recommendation was filed and notice was served on the parties pursuant to 28 U.S.C. § 636. No objections were filed within the time limits prescribed by Section 636.

Therefore, the Court need not make a de novo review and the Magistrate Judge's Recommendation is hereby adopted.

IT IS THEREFORE ORDERED that defendants' motion to dismiss (docket no. 15) be, and the same hereby is, denied.

ORDER AND RECOMMENDATION OF MAGISTRATE JUDGE ELIASON

ELIASON, United States Magistrate Judge.

This matter comes before the Court on defendants' motion to dismiss the complaint for lack of subject matter jurisdiction pursuant to Fed.R.Civ.P. 12(b)(1), and also pursuant to Fed.R.Civ.P. 12(b)(6) for failing to state a claim upon relief may be granted. The Court will also entertain plaintiff's motion to strike defendants' answer to the complaint. The Court will first address defendants' motion to dismiss.

I. Motion to Dismiss

Defendants' motion to dismiss for lack of subject matter jurisdiction made pursuant to Rule 12(b)(1) may be quickly resolved. This action involves plaintiff's claim that he was due overtime wages pursuant to federal and state law. The alleged federal violation arises under the Fair Labor Standards Act, 29 U.S.C. § 201, et seq. ("FLSA"). Defendants argue that the complaint fails to state facts showing that plaintiff's work or his employer had sufficient connection to interstate commerce and, therefore, the Court lacks subject matter jurisdiction over this action. However, as plaintiff points out, jurisdiction of the federal claim is premised on 28 U.S.C. § 1331, which gives federal courts jurisdiction to hear matters which raise a federal question. The FLSA, in Section 216(b), specifically states that proceedings under Section 206 or 207 may be brought in federal or state court. The Court does not understand defendants to be arguing that the FLSA is unconstitutional for exceeding Congress' authority under the Commerce Clause of the Constitution.

In Gonzalez v. Cauley, 5:99-CV-406-BR(3) (E.D.N.C. June 1, 2000), Judge Britt faced a similar question where the defendants argued that the Court had no jurisdiction over the cause of action because they were not an enterprise engaged in commerce, inasmuch as their gross volume of sales was less than $500,000.00. However, Judge Britt found that by pleading a violation of Section 207, this gave the Court subject matter jurisdiction by virtue of either 28 U.S.C. § 1331 for actions arising under the laws of the United States or 28 U.S.C. § 1337 providing for jurisdiction over acts of Congress which involve regulating commerce. Whether the plaintiff could prove all the elements of the claim, such as the defendant's gross revenue, was a matter to be decided at a later date. This Court agrees with that reasoning and, therefore, that part of defendants' motion should be denied. The Court will next examine whether plaintiff has stated a claim upon which relief may be granted. Fed.R.Civ.P. 12(b)(6).

Congress did not intend to legislate to the full extent and breadth of its authority under the Commerce Clause when it enacted the FLSA. McLeod v. Threlkeld, 319 U.S. 491, 493, 63 S.Ct. 1248, 87 L.Ed. 1538 (1943). Therefore, it will not be enough for plaintiff to just show some effect on interstate commerce in order to succeed. He will have to meet the more stringent requirements of the FLSA. Therefore, the next question is whether plaintiff has alleged facts sufficient to assert a claim under the FLSA. The Court will now address that part of the motion.

Defendants claim that the matter should be dismissed pursuant to Fed.R.Civ.P. 12(b)(6). A motion to dismiss cannot succeed" `unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief.'" Republican Party of North Carolina v. Martin, 980 F.2d 943, 952 (4th Cir.), cert. denied, 510 U.S. 828, 114 S.Ct. 93, 126 L.Ed.2d 60 (1993), quoting Conley v. Gibson, 355 U.S. 41, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957). Further, the Court must assume that the allegations in the complaint are true and construe them in the light most favorable to plaintiff. Id.

Defendants allege that there are insufficient facts set out in the complaint to support the elements of a FLSA violation. Plaintiff disagrees. He points out that the complaint alleges that he worked for defendants and that the business was an enterprise engaged in commerce as defined by 29 U.S.C. § 203(s)(1). Plaintiff states the general time period he was employed, that he was a route manager who tended roses for the customers of defendants, that for a substantial number of days he worked in excess of eight hours, that he did not solicit business for the sale, planting, or tending of the roses or services incidental to the same, and that for most, if not all, of the work weeks in question he worked in excess of forty hours and yet did not receive wages as required by 29 U.S.C. § 207.

With respect to the hours and days in question, the Court previously denied defendants' motion for a more definite statement, but permitted defendants to ask special interrogatories pertaining to that information. However, because such information should be more accurately contained in defendants' records, the Court also required defendants to provide plaintiff with his employment record so that plaintiff could accurately answer the interrogatories. Defendants then filed an answer and the instant motion. To the extent the motion to dismiss is based on any part of the fact that plaintiff has not set out the days and hours in order to calculate the amount of alleged unpaid overtime, said basis for dismissal should be denied, inasmuch as that matter was already covered by the Court's ruling on defendants' motion for a more definite statement. Therefore, the only question before the Court at this time is whether plaintiff has made sufficient allegations that the employer with whom he worked was an enterprise engaged in commerce. (It should be noted that at no time does plaintiff argue that he performed work wherein he "engaged in commerce or in the production of goods for commerce.") 29 U.S.C. § 207(a)(1). Instead, plaintiff bases his claim on the fact that he was "employed in an enterprise engaged in commerce or in the production of goods for commerce." 29 U.S.C. § 203(s)(1). (Pl.'s Resp. Brf. at 8)¹

In alleging an "enterprise violation of the FLSA," plaintiff need not set out a complete description of the interstate activities or the exact gross revenue of defendants. A complaint is sufficient if it identifies the specific sections of the Act which are at issue, along with the nature of the violations and the time period involved, Hodgson v. Virginia Baptist Hospital, Inc., 482 F.2d 821, 823-824 (4th Cir.1973); Donovan v. Abrams Bar B.Q. of Pinetops, Inc., No. 82-69-CIV-8, 1983 WL 2014 (E.D.N.C. Apr. 29, 1983), and the plaintiff alleges that there is more than one employee. Robertson v. Dailey Elec., Supply Co., 369 F.Supp. 1069 (N.D.Tex.1974). It is true that plaintiff has not alleged the details and type of interstate activity, nor the value of sales. However, that is not necessary when the plaintiff alleges enterprise coverage under 29 U.S.C. § 207(s)(1) because of the nature of such a violation.

In 1961, Congress expanded FLSA coverage to all employees of a business if some employee engages in or produces goods for commerce. See n. 1. As the Ninth Circuit held in Donovan v. Scoles, 652 F.2d 16 (9th Cir.1981), cert. denied, 455 U.S. 920, 102 S.Ct. 1276, 71 L.Ed.2d 460 (1982):

The clear language of this amendment indicates that even a business engaged in purely intrastate activities can no longer claim exemption from FLSA coverage if the goods its employees handle have moved in interstate commerce. The language imposes no requirement that the goods have a present involvement in interstate commerce when they are handled or sold. Instead it broadens coverage to include all employees within the stream of commerce of such goods, even if their own participation remains purely intrastate.

Id. at 18 (citations omitted).

When a plaintiff alleges FLSA "enterprise" coverage, the specific information as to the dollar amount of business and the details of all employee activity will largely be unknown to the plaintiff, but known to the defendant. Moreover, because of the greatly expanded reach of the FLSA in 1961, most, if not all, businesses will likely fall under the FLSA if the amount of business exceeds a certain threshold. This threshold was enacted to exclude "Mom and Pop" operations from coverage. Reich v. Gateway Press, Inc., 13 F.3d 685, 694 (3d Cir.1994). Therefore, the most salient element of an "enterprise" allegation will be the amount of business a defendant does. That information will most often be in the hands of the defendant. For this reason, an allegation of "enterprise" coverage need not attempt to set out a separate allegation of the defendant's sales or a description of the activities of other employees. In most cases, that would only involve gross speculation and not provide the defendant with meaningful information because the defendant already has knowledge of such information. Therefore, bare bones allegations are acceptable for "enterprise" coverage, and it is best that discovery proceed and the issues concerning gross sales and type of interstate activity be left for summary...