Pilkington v. Abuela's Cocina LLC, CV-18-00281-TUC-RCC

• Decision Date: 23 July 2019
• Docket Number: No. CV-18-00281-TUC-RCC,CV-18-00281-TUC-RCC
• Parties: Everett Pilkington, Plaintiff, v. Abuela's Cocina LLC, et al., Defendants.
• Court: U.S. District Court — District of Arizona

Everett Pilkington, Plaintiff, v. Abuela's Cocina LLC, et al., Defendants.

No. CV-18-00281-TUC-RCC

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF ARIZONA

July 23, 2019

ORDER

Pending before the Court is Defendants' Motion to Dismiss Amended Complaint Pursuant to Fed. R. Civ. P. 12(b)(1) and 12(b)(6), ("Motion to Dismiss") (Doc. 48), Motion for Sanctions (Doc. 32), and Motion for Attorneys' Fees (Doc. 48 at 16.) The Plaintiff's First Verified Amended Complaint ("Amended Complaint") asserts the Court has federal question jurisdiction over this matter under the Fair Labor Standards Act with supplemental jurisdiction over all state claims. (Doc. 36 at 2.) Defendants' Motion to Dismiss argues Amended Complaint fails to assert a viable claim under the Fair Labor Standards Act ("FLSA"), 29 U.S.C. §201-219, because Plaintiff has failed to plead necessary facts to establish either enterprise or individual coverage, and he has failed to plead necessary facts to establish Defendants were his employers. (Doc. 48 at 1-2.)

The Court will deny Defendants' Motion to Dismiss, deny Defendants' Motion for Sanctions, and dismiss without prejudice Defendants' Motion for Attorneys' Fees.

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I. PLEADING STANDARDS FOR FLSA CLAIM

A plaintiff is required to give a short and plain statement of the grounds for the Court's jurisdiction, a short and plain statement of the claim showing that the pleader is entitled to relief, and a demand for relief sought. Fed. R. Civ. P. 8(a)(1-3). The Supreme Court has expanded on those criteria, requiring a plaintiff also to plead sufficient alleged facts to support the claim. Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007) (holding that a claim must also be more than "a formulaic recitation of the elements of a cause of action"); see also Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (holding that a claim must be supported by more than "mere conclusory statements.")

In order for the Court to have federal question jurisdiction pursuant to 28 U.S.C. §1331 and supplemental jurisdiction over the state claims within the Arizona Minimum Wage Statute and the Arizona Wage Statute pursuant to 28 U.S.C. § 1367, the Plaintiff must first meet the FLSA's requirements to establish a claim.

To establish jurisdiction under the FLSA, Plaintiff must plead that 1) Defendants employed Plaintiff, 2) Plaintiff is employed by an enterprise engaged in commerce ("enterprise coverage") or Plaintiff "is engaged in commerce or in the production of goods for commerce" ("individual coverage"), and 3) Defendants failed to pay Plaintiff minimum wage. 29 U.S.C. §206(a).

II. FACTUAL & PROCEDURAL HISTORY FOR MOTION TO DISMISS

Plaintiff Everett Pilkington alleges he was not paid for two weeks of full-time work as lead production cook at Abuela's Cocina, LLC ("Abuela's") between around February 11, 2018 and February 25, 2018. (Doc. 36 at 9-10.) Plaintiff's original Complaint was dismissed by the Court with leave to amend for lack of subject matter jurisdiction. (Doc. 22.) Plaintiff had failed to allege sufficient facts to support his claim that he satisfied the requirements of individual coverage or that Defendants satisfied the requirements of enterprise coverage in order to establish federal question jurisdiction under the FLSA. Id.

Defendants named in Amended Complaint are Abuela's, Jorge Alvarez, David Aldecoa, John Aldecoa, and Brother John's. (Doc. 36.) To cure the defects of the originalcomplaint, Plaintiff alleges that Defendants David and John Aldecoa were employers of Plaintiff at Defendant Alvarez's restaurant, Abuela's, and that the Aldecoa's restaurant, Brother John's BBQ, LLC ("Brother John's"), was under common control with Abuela's. Id. at 7. Defendants David Aldecoa, John Aldecoa, and Brother John's filed another Motion to Dismiss (Doc. 48), contending that Plaintiff had not cured the defects of his original Complaint and his alleged facts continued to be insufficient to support subject matter jurisdiction under the FLSA. Defendants also asserted that, regardless of the Court's jurisdiction, the Amended Complaint should be dismissed for failure to state a claim under Fed. R. Civ. P. 12(b)(6) because Plaintiff could not properly allege the Aldecoas had been his employers. (Doc. 48 at 11.)

III. MOTION TO DISMISS

i) SUBJECT MATTER JURISDICTION

A motion to dismiss challenging subject matter jurisdiction under Fed. R. Civ. P. 12(b)(1) may be "facial" or "factual." See Safe Air for Everyone v. Meyer, 373 F.3d 1035, 1039 (9th Cir. 2004). A facial attack contends the allegations of a complaint are "insufficient on their face to invoke federal jurisdiction." Id. Comparatively, a factual attack is one which challenges the truth of the allegations which would invoke federal jurisdiction. Id. The allegations of a complaint are taken as true when a court considers a facial attack. Courthouse News Service v. Plant, 750 F.3d 776, 780 (9th Cir. 2014). Regarding a factual attack on federal jurisdiction, a court "may review evidence beyond the complaint without converting the motion to dismiss into a motion for summary judgment . . . [and] [t]he court need not presume the truthfulness of the plaintiff's allegations." Safe Air, 373 F.3d at 1039 (internal quotation marks and citation omitted).

In the instant case, Defendants' Motion to Dismiss both factually and facially attacks the jurisdiction of the Court based on the Amended Complaint. Facially, Defendants assert that Plaintiff has not pleaded sufficient facts alleging that Plaintiff was engaged in commerce (for individual coverage) or pleaded sufficient facts to allege that Defendants were engaged in commerce (for enterprise coverage). Factually, Defendantsdeny Plaintiff's assertion that Abuela's and Brother John's were under common control, and therefore their combined gross income should not be used to determine the existence of enterprise coverage under the FLSA in this case.

Defendants contend it is Plaintiff's burden to not only plead but prove jurisdictional facts, citing Indus. Tectonics, Inc. v. Aero Alloy, 912 F.2d 1090, 1092 (9th Cir. 1990). (Doc. 48 at 3). Defendants also argue that "[f]aced with a factual attack . . . '[no] presumptive truthfulness attaches to plaintiff's allegations, and the existence of disputed material facts will not preclude the trial court from evaluating for itself the merits of jurisdictional claims.'" Thornhill Pub. Co., Inc. v. Gen. Tel. & Electronics Corp., 594 F.2d 730, 733 (9th Cir. 1979) (quoting Mortensen v. First Fed. Sav. & Loan Ass'n, 549 F.2d 884, 891 (3rd Cir. 1977)); (Doc. 48 at 4.)

However, the court in Thornhill goes on to say that when "a statute provides the basis for both the subject matter jurisdiction of the federal court and the plaintiffs' substantive claim for relief, a motion to dismiss for lack of subject matter jurisdiction . . . is proper only when the allegations of the complaint are frivolous." Thornhill at 734 (quoting Timberlane Lumber Co. v. Bank of America, 549 F.2d 597, 602 (9th Cir. 1976)). See also Safe Air for Everyone v. Meyer, 373 F.3d 1035, 1039 (9th Cir. 2004) (holding that a "[j]urisdictional finding of genuinely disputed facts is inappropriate when the jurisdictional issue and substantive issues are so intertwined that the question of jurisdiction is dependent on the resolution of factual issues going to the merits of an action.")

The allegations of Plaintiff's complaint are not frivolous, and the question of subject matter jurisdiction in the present case is dependent upon Plaintiff proving Defendants were his employers and proving either enterprise or individual coverage (elements which also go to the merits of his action). Therefore, the Court declines to dismiss the action on the basis that Plaintiff must prove his jurisdictional facts.

ii) ENTERPRISE COVERAGE

In order "to be subject to the Fair Labor Standards Act, two conditions must besatisfied. First, the...businesses must constitute an enterprise engaged in commerce or in the production of goods for commerce . . . Second, the associates must be 'employees' within the meaning of the Act." Tony and Susan Alamo Foundation v. Sec. of Labor, 471 U.S. 290 (1985) (internal quotation marks and citation omitted.)

To establish "enterprise coverage," Plaintiff must allege sufficient facts to support the claim that his employer's "annual gross volume of sales made or business done is not less than $500,000." 29 U.S.C. §203(s)(1)(ii). Defendants contend Abuela's Cocina grossed only $308,738.99 in its less than three months in business and, as a result, cannot be considered an enterprise under the FLSA. (Doc. 48 at 5). However, the FLSA defines "enterprise" as "the related activities performed (either through unified operation or common control) by any person or persons for a common business purpose." 29 U.S.C. §203(r)(1). Further, "unified operation" is defined as "a business which may consist of separate segments but which is conducted or operated as a unit or as a single business for a common business purpose." 29 C.F.R. § 779.217. Plaintiff asserts Defendants do satisfy the requirements of enterprise coverage under the FLSA, alleging that Brother John's and Abuela's were under common control. (Doc. 36 at 7.)

Regarding unified operation or common control, "[i]f these three elements—related activities, unified operation or common control and common business purpose—are present, different organizational units are grouped together for the purpose of determining FLSA coverage." Chao v. A-One Medical Services, 346 F.3d 908, 915 (9th Cir. 2003). To support his allegation that Abuela's and Brother John's were under common control, Plaintiff alleges Defendants Aldecoas had the authority to hire and fire employees; were present at Plaintiff's interview; supervised and controlled employees' work schedules and conditions; set employees' rates of pay; and tested recipes for Abuela's. (Doc. 36 at 4-5.) Among other claims, Plaintiff further alleges that Brother...