Kisu Seo v. H Mart Inc.
| Docket Number | 19-cv-03248 |
| Decision Date | 23 November 2021 |
| Parties | KISU SEO, on behalf of himself and all other Plaintiffs similarly situated known and unknown, Plaintiff, v. H MART INC., H MART HOLDINGS, INC., H MART LOGISTICS, INC., H MART AMERICAN DREAM LLC, H MART COMPANIES, INC., H MART MIDWEST CORP. d/b/a SUPER H MART, BK SCHAUMBURG, INC., H MART TROY, LLC, H MART GARDEN GROVE, LLC, H MART NORWALK LLC and IL YEON KWON, Defendants. |
| Court | U.S. District Court — Northern District of Illinois |
Plaintiff Kisu Seo brings this second amended complaint (“SAC”) against multiple defendants alleging he worked overtime hours without proper compensation and when he complained about those conditions, he faced retaliation. Defendants are or are connected with a supermarket chain. Dkt. 70. Seo brings claims under Fair Labor Standards Act, 29 U.S.C. § 201, et seq. (FLSA), Illinois Minimum Wage Law, 820 ILCS 105/1, et seq. (IMWL), and the Illinois Wage Payment and Collection Act, 820 ILCS 115 et seq. (IWPCA) and for retaliation. Defendants move to dismiss for lack of personal jurisdiction and for failure to state a claim pursuant to Federal Rules of Civil Procedure 12(b)(2) and 12(b)(6). [79]. For the reasons explained below, the Court grants the Rule 12(b)(2) motion and grants in part and denies in part the Rule 12(b)(6) motion.
The following factual allegations are taken from the Second Amended Complaint (Dkt. 70) and are accepted as true for the purposes of the motion to dismiss. See W. Bend Mut. Ins. Co. v. Schumacher, 844 F.3d 670, 675 (7th Cir. 2016). H Mart (HQ) is a supermarket chain specializing in Asian foods with over 60 stores. In June 2015, Seo was hired by HQ as a produce buyer. HQ transferred Seo to Ridgefield, New Jersey, for training. Dkt. 70 ¶ 5. After training, HQ assigned Seo to work at a store in Garden Grove, California, and over the following four years Seo was transferred to a total of nine different H Mart locations and warehouses across the country, including California, Michigan, New Jersey, and Illinois. Id. at ¶ 17. On average, Seo worked from 8:00 a.m. to 6:00 p.m., six days a week, or 7:00 a.m. to 10:00 p.m. every day, depending on the location. Id. at ¶¶ 22-24. At all times during his employment, regardless of hours, Seo was paid $4, 500 a month. Id. at ¶ 25. Seo contends that Defendants willfully violated his rights by paying him on a fixed salary basis even though he was a non-exempt employee who frequently worked overtime. Id. at ¶ 26.
Seo contends that HQ manages and operates all subsidiaries as an integrated enterprise and had complete control over Seo's employment. According to Seo, HQ “formulates every aspects [sic] of employment and labor rules, guidelines and policies for all itself [sic] and its subsidiaries.” Id. at ¶ 11. The subsidiaries are “given the duties to carry out HQ's policies.” Id. at ¶ 13. Defendant Il Yeon Kwon (“Kwon”) is the CEO of H Mart, Inc. and “exercises sole financial control over the [Defendants].” Id. at ¶18. He also makes all employment related decision for the defendants. Id.
On May 14, 2019, Seo filed this suit initially only naming H Mart Midwest Corp., BK Schaumburg, Inc., and Hye Joo Choi. Dkt. 1. On August 6, 2019, the Court denied Defendants' first motion to dismiss in light of Seo's intent to file an amended complaint. Dkt. 13. On August 28, 2019, when Seo did not file an amended complaint by the deadline, Defendants re-filed their motion to dismiss. Dkt. 15. On September 30, 2019, the Court extended Seo's deadline to file an amended complaint or respond to the motion to dismiss. Dkt. 24. Seo filed the first amended complaint on October 21, 2019, adding new defendants. Defendants again filed a motion to dismiss. Dkt. 34. This Court granted in part and denied in part Defendants' motion. Specifically, this Court found that it did not have personal jurisdiction over several defendants. Only two defendants remained, Hye Joo Choi and BK Schaumburg, Inc. Dkt. 54. Seo now brings his second amended complaint, renaming several previously dismissed subsidiary defendants and adding new defendants, (the H Mart CEO Il Yeon Kwon and three California based subsidiary H Marts), and adding an additional claim of retaliation. Defendants move to dismiss Seo's second amended complaint.[1]
A motion to dismiss tests the sufficiency of a complaint, not the merits of the case. Gibson v. City of Chicago, 910 F.2d 1510, 1520 (7th Cir. 1990). “To survive a motion to dismiss under Rule 12(b)(6), the complaint must provide enough factual information to state a claim to relief that is plausible on its face and raise a right to relief above the speculative level.” Haywood v. Massage Envy Franchising, LLC, 887 F.3d 329, 333 (7th Cir. 2018) (quotations and citation omitted). See also Fed. R. Civ. P. 8(a)(2) (). A court deciding a Rule 12(b)(6) motion accepts plaintiff's well-pleaded factual allegations as true and draws all permissible inferences in plaintiff's favor. Fortres Grand Corp. v. Warner Bros. Entm't Inc., 763 F.3d 696, 700 (7th Cir. 2014). A plaintiff need not plead “detailed factual allegations”, but “still must provide more than mere labels and conclusions or a formulaic recitation of the elements of a cause of action for her complaint to be considered adequate under Federal Rule of Civil Procedure 8.” Bell v. City of Chi., 835 F.3d 736, 738 (7th Cir. 2016) (citation and internal quotation marks omitted).
Dismissal for failure to state a claim is proper “when the allegations in a complaint, however true, could not raise a claim of entitlement to relief.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 558, 127 S.Ct. 1955, 1966 (2007). Deciding the plausibility of the claim is “‘a context-specific task that requires the reviewing court to draw on its judicial experience and common sense.'” McCauley v. City of Chi., 671 F.3d 611, 616 (7th Cir. 2011) (quoting Ashcroft v. Iqbal, 556 U.S. 662, 679, 129 S.Ct. 1937, 1950 (2009)).
Under Rule 12(b)(2), a court may dismiss a claim for lack of personal jurisdiction over the defendant. Fed.R.Civ.P. 12(b)(2). A complaint need not include facts alleging personal jurisdiction. But once the defendant moves to dismiss the complaint under Rule 12(b)(2), the plaintiff must demonstrate that personal jurisdiction exists. Purdue Research Found. v. Sanofi-Synthelabo, S.A., 338 F.3d 773, 782 (7th Cir. 2003).
Defendants argue that this Court does not have personal jurisdiction over eight (8) of the subsidiary defendants: H Mart American Dream LLC, H Mart Holdings, Inc., H Mart Logistics, Inc., H Mart Companies, Inc., H Mart Troy, Inc., H Mart Torrence LLC, H Mart Garden Grove, LLC, and H Mart Norwalk, LLC (the “Foreign Defendants”). “The nature of the defendant's contacts with the forum state determines the propriety of personal jurisdiction and also its scope-that is, whether jurisdiction is proper at all, and if so, whether it is general or specific to the claims made in the case.” Tamburo v. Dworkin, 601 F.3d 693, 701 (7th Cir. 2010). In determining personal jurisdiction, the Court “take[s] as true all well-pleaded facts alleged in the complaint and resolve[s] any factual disputes in the affidavits in favor of the plaintiff.” Id. at 700. Seo has the burden of establishing a prima facie case of personal jurisdiction over these defendants. Purdue Research, 338 F.3d at 782. Neither party has submitted affidavits or other written evidentiary material, so the Court determines whether the well-pleaded allegations in the complaint show Seo has met his burden.
Defendants argue that Seo cannot establish either general or specific personal jurisdiction over the Foreign Defendants. “The threshold for general jurisdiction is high; the contacts must be sufficiently extensive and pervasive to approximate physical presence.” Tamburo, 601 F.3d at 701. And specific jurisdiction requires a defendant's contacts with the forum state to “directly relate to the challenged conduct or transaction.” Id. at 702. The test for whether specific jurisdiction is appropriate is a three-pronged inquiry. The court considers whether “(1) the defendant has purposefully directed his activities at the forum state or purposefully availed himself of the privilege of conducting business in that state; (2) the alleged injury arises out of or relates to the defendant's forum-related activities;” and (3) the exercise of jurisdiction “comport[s] with traditional notions of fair play and substantial justice.” Rogers v. City of Hobart, Indiana, No. 20-2919, 2021 WL 1827318, at *4 (7th Cir. May 7, 2021).
Seo does not specify whether he believes these defendants are subject to general or specific personal jurisdiction in Illinois. Rather, he argues that the various subsidiaries are “joint employers” or fall under a “single enterprise theory” and that is sufficient to establish personal jurisdiction.[2] Dkt. 81 at 7-8. In the alternative, Seo asks this Court to pierce the corporate veil and impute HQ's undisputed Illinois contacts onto all named defendants. Id. at 9.
The Court previously rejected Seo's “joint employer” theory as a basis to establish personal jurisdiction. Dkt. 54 at 6. Seo has provided case law that supports his position that the “joint employer” test under the FLSA can provide the basis for a court to find it has personal jurisdiction over a foreign corporation. See Dkt. 81 at 8 (...
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