Scogin v. Tex. Eagle Ford Shale Magazine

Decision Date16 February 2016
Docket NumberCIVIL NO. 2:14-CV-478
PartiesNANCY L. SCOGIN, Plaintiff, v. TEXAS EAGLE FORD SHALE MAGAZINE, et al, Defendants.
CourtU.S. District Court — Southern District of Texas

BE IT REMEMBERED that on February 16, 2016 the Court DENIED Plaintiff's Motion to Reconsider Ruling on Plaintiff's Motion for Summary Judgment. SeeDkt. No. 26.

I. Background

On December 4, 2014, Plaintiff Nancy Scogin ("Scogin") filed a complaint against Sandra Castillo Swallow ("S. Swallow"), Troy W. Swallow ("T. Swallow"), and Texas Eagle Ford Shale Magazine ("the Magazine") alleging violations of overtime and minimum wage payments under the Fair Labor Standards Act ("FLSA") and breach-of-contract claims on three promissory notes. Orig. Compl. Dkt. No. 1. On December 23, 2015, the Court denied in part and granted in part Scogin's motion for summary judgment. Dkt. No. 21. The Court held that there was a genuine issue of material fact as to whether the Magazine's annual gross volume of sales exceeded $500,000, a threshold requirement for FLSA coverage. Dkt. No. 21 at 6-11. The Court granted summary judgment on the three promissory notes, and determined that only S. Swallow was liable based on the record before the Court. Dkt. No. 21 at 13. The Court did not enter summary judgment that any other Defendant is liable to Scogin under those notes. Dkt. No. 21 at 14.

The Court held a final pretrial conference on January 22, 2016. At that conference, Defendants agreed to stipulate that the Magazine's annual gross volume of sales exceeded $500,000. Scogin filed this motion for reconsideration requesting that the Court grant her summary judgment because the genuine issue of material fact has been resolved in Scogin's favor. Dkt. No. 26. Defendants responded to Scogin's motion, Dkt. No. 30, and Scogin filed a reply, Dkt. No. 31.

II. Legal Standards
A. Motion for Reconsideration

The Federal Rules of Civil Procedure do not specifically provide for motions for reconsideration. Shepherd v. Int'l Paper Co., 372 F.3d 326, 328 (5th Cir. 2004). A motion for reconsideration is generally analyzed under the standards for a motion to alter or amend judgment under Rule 59(e) if the motion is filed within twenty-eight days of the complained of order. See Hamilton Plaintiffs v. Williams Plaintiffs, 147 F.3d 367, 371 n. 10 (5th Cir. 1998). Because the Court did not dispose of all of the claims against all of the parties, the Court will analyze the parties' motion to reconsider under Federal Rule of Civil Procedure 54(b). See, e.g., Stoffels ex rel. SBC Tel. Concession Plan v. SBC Commc'ns, Inc., 677 F.3d 720, 727-28 (5th Cir. 2012) (citing Zarnow v. City of Wichita Falls, Tex., 614 F.3d 161, 171 (5th Cir. 2010)). "District courts have considerable discretion in deciding whether to grant a motion to reconsider an interlocutory order. The exact standard applicable to the granting of a motion under Rule 54(b) is not clear, though it is typically held to be less exacting than would be a motion under Rule 59(e), which is in turn less exacting than the standards enunciated in Rule 60(b)." Livingston Downs Racing Ass'n, Inc. v. Jefferson Downs Corp., 259 F. Supp. 2d 471, 475 (M.D. La. 2002). Under this standard, "the trial court is free to reconsider and reverse its decision for any reason it deems sufficient, even in the absence of new evidence or an intervening change in or clarification of the substantive law." Estate of Henson v. Wichita Cty., 988 F. Supp. 2d 726, 730 (N.D. Tex. 2013) (quoting Lavespere v. Niagara Mach. & Tool Works, Inc., 910 F.2d 167, 185 (5th Cir. 1990)). Rule 54(b),however, "does not mean that the Court has carte blanche to reconsider newly presented theories of liability or the lack thereof." Livingston, 288 F. Supp. 2d at 480; see also id. at 481 ("Any position is supportable by boundless arguments, and lawyers are trained and paid to find those arguments. Judicial economy counsels against reconsidering an issue each time someone presents a new argument.").

B. Motion for Summary Judgment

"Summary judgment is appropriate where the competent summary judgment evidence demonstrates that there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law." Brumfield v. Hollins, 551 F.3d 322, 326 (5th Cir. 2008) (citing Bolton v. City of Dall., 472 F.3d 261, 263 (5th Cir. 2006)); accord. Fed. R. Civ. P. 56(c). "A genuine issue of material fact exists when the evidence is such that a reasonable jury could return a verdict for the non-movant." Piazza's Seafood World, LLC v. Odom, 448 F.3d 744, 752 (5th Cir. 2006) (citing Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986)). The Court must view all evidence in the light most favorable to the non-moving party. Brumfield, 551 F.3d at 326 (citing Matsushita Elec. Indus. Co. v. Zenith Radio, 475 U.S. 574, 587 (1986)); Piazza's Seafood World, 448 F.3d at 752; Lockett v. Wal-Mart Stores, Inc., 337 F. Supp. 2d 887, 891 (E.D. Tex. 2004). Factual controversies must be resolved in favor of the non-movant, "but only when there is an actual controversy, that is, when both parties have submitted evidence of contradictory facts." Little v. Liquid Air Corp., 37 F.3d 1069, 1075 (5th Cir. 1994) (en banc, per curiam).

The party moving for summary judgment bears the "burden of showing this Court that summary judgment is appropriate." Brumfield, 551 F.3d at 326 (citing Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986)). Once the party seeking summary judgment has discharged its initial burden, the non-movant must come forward with specific evidence to show that there is a genuine issue of fact. Lockett, 337 F. Supp. 2d at 891; see also Ashe v. Corley, 992 F.2d 540, 543 (5th Cir. 1993). The non-movant may not merely rely on conclusory allegations or the pleadings. Lockett, 337 F. Supp. 2d at 891. Rather, it must cite specific facts identifying agenuine issue to be tried in order to avoid summary judgment. See Fed. R. Civ. P. 56(e); Piazza's Seafood World, 448 F.3d at 752; Lockett, 337 F. Supp. 2d at 891. "Rule 56 does not impose upon the district court a duty to sift through the record in search of evidence to support a party's opposition to summary judgment." Ragas v. Tenn. Gas Pipeline Co., 136 F.3d 455, 458 (5th Cir. 1998) (quoting Skotak v. Tenneco Resins, Inc., 953 F.2d 909, 915-16 & n.7 (5th Cir. 1992)). Thus, once it is shown that a genuine issue of material fact does not exist, "[s]ummary judgment is appropriate . . . if the non-movant 'fails to make a showing sufficient to establish the existence of an element essential to that party's case.' " Arbaugh v. Y&H Corp., 380 F.3d 219, 222-23 (5th Cir. 2004) (quoting Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986)).

III. Discussion
A. Corporate Entity Status

At the final pretrial conference, the Court questioned Defendants about the Magazine's corporate status because neither party identified its status in any submission. Defendants' counsel requested time to investigate this issue further and to confer with Defendants. In her motion for reconsideration, Scogin argues that the Magazine cannot defend itself because it forfeited its corporate status after failing to pay franchise taxes. Dkt. No. 26 at 2-3. In their response, Defendants inform the Court that they contacted the Texas Comptroller's office and learned that the Magazine forfeited its corporate privileges on September 25, 2015. Dkt. No. 30 at 3. The lawsuit was initiated on December 4, 2014. Dkt. No. 1. Defendants argue that the Magazine retains its ability to defend itself in this lawsuit because it forfeited its corporate privileges after the lawsuit was filed. Dkt. No. 30 at 3. Defendants further inform the Court that it has made an open records request to the Texas State Comptroller's office to obtain documentary evidence for the Court. Dkt. No. 30 at 2.

Under Texas Tax Code § 171.251,1 the Secretary of State may forfeit the corporate privileges of a corporation that fails to pay franchise taxes under Texas Tax Code § 171.309.2 Once the corporate privileges are forfeited, then "the corporation shall be denied the right to sue or defend in a court of this state." Tex. Tax Code Ann. § 171.252 (West 2015). However, "[section] 171.252 bars corporations from filing suit only after they have forfeited their right to do business." Tex. Clinical Labs, Inc. v. Leavitt, 535 F.3d 397, 403 (5th Cir. 2008). Consequently, both Texas state and federal courts have construed this section to permit entities whose rights were forfeited after the lawsuit was filed to continue to defend or prosecute the action. See Tex. Clinical Labs, Inc. 535 F.3d at 403-05 (concluding that a Texas corporation that had forfeited its corporate status after initiating a lawsuit had capacity to proceed with the action); Waterway Ranch, L.L.C. v. City of Annetta, 411 S.W.3d 667, 673-74 (Tex. App.—Fort Worth, 2013, no pet. filed) (allowing a corporation's appeal to move forward despite its forfeiture because it forfeited its corporate status after the lawsuit was commenced).

The Court concludes that Magazine may continue to defend itself in this suit because it forfeited its status after this suit commenced. Accordingly, Plaintiff's motion for reconsideration of summary judgment as to the Magazine based on its claim that it forfeited its corporate privileges is DENIED.

B. Plaintiff's FLSA Claims
1. Enterprise Coverage under the FLSA

The minimum wage and maximum hour protections under the FLSA apply to an employee "who in any workweek is engaged in commerce or in the production of goods for commerce, or is employed in an enterprise engaged in commerce or in the production of goods for commerce." 29 U.S.C. §§ 206(a), 207(a)(1).3 The FLSA defines an "enterprise engaged in commerce or in the production of goods for commerce" as one that:

(i) has employees engaged in commerce or in the production of goods for commerce, or that has

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