Young v. Caesars Entm't
| Decision Date | 05 May 2023 |
| Docket Number | Civil Action 22-5331 |
| Parties | MIKE YOUNG, ET AL. v. CAESARS ENTERTAINMENT, INC. |
| Court | U.S. District Court — Western District of Louisiana |
MEMORANDUM RULING
Before the Court are two motions to dismiss filed by Defendant Caesars Entertainment, Inc. (“Caesars”). See Record Documents 16 and 19. Plaintiff Mike Young, individually and on behalf of all others similarly situated (“Young”), filed an Amended Complaint in response to the first motion to dismiss and an opposition brief in response to the second motion to dismiss. See Record Documents 18 and 23. For the reasons assigned below Caesars's first motion to dismiss is GRANTED and Caesars's second motion to dismiss is DENIED AS MOOT.
Caesars is the ultimate parent company of various subsidiaries which own and/or operate numerous casinos around the country. See Record Documents 19-2 and 18 at ¶ 17. Horseshoe Entertainment, a subsidiary of Caesars, owns and operates Horseshoe Bossier City Hotel and Casino (“Horseshoe Bossier”) in Bossier City, Louisiana. See Record Document 18 at ¶¶ 4, 18 n.l Young alleges that at Caesars's casinos, patrons may gamble using electronic gaming systems (“slot machines”). See id, at ¶ 6. When playing slot machines, a patron pays for credits and if he stops gambling with remaining credits on the slot machine, the machine generates a gaming voucher that reflects the amount owed to the patron. See id. at ¶¶ 7, 9. Patrons insert the gaming vouchers into cash-out kiosks to be paid their balance. See id. at ¶ 11. Young alleges that in many non-Caesars casinos, cash-out kiosks pay patrons in exact change, but at some of Caesars's casinos, including Horseshoe Bossier, “the Kiosk round[s] down to the nearest dollar and pa[ys] that amount in cash.” Id. at ¶¶ 11, 13. Young argues that by dispensing less change than the amount owed to patrons, Caesars has been “keeping the change off of hundreds of thousands if not millions of Gaming Vouchers, essentially robbing [its] customers a few cents at a time, on millions of transactions.” Id. at ¶ 12.
Young claims that on several occasions in 2021, he played the slot machines at Horseshoe Bossier, and that when he went to cash out, the kiosk short-changed him by rounding down to the nearest dollar. See id. at ¶¶ 15,16. Young filed suit in this Court on September 23,2022, claiming that Caesars's failure to give patrons exact change when they cash out constitutes breach of contract, conversion, and alternatively, unjust enrichment. See id. at ¶¶ 17-24. Young's lawsuit seeks to represent “all visitors to a casino owned or operated by [Caesars] between September 23, 2012 and present who were deprived of their change by [Caesars].” Id. at¶ 3.
On December 28, 2022, Caesars filed a motion to dismiss for lack of subject matter jurisdiction and for failure to state a claim upon which relief can be granted. See Record Document 16. On January 18, 2023, Young filed his First Amended Complaint in lieu of an opposition brief in which he raised an alternative ground for subject matter jurisdiction and added factual allegations. See Record Document 18. On February 1, 2023, Caesars filed a motion to dismiss Young's Amended Complaint, in which it argues that Young's Amended Complaint fails to state a claim for relief. See Record Document 19.
Federal courts are courts of limited jurisdiction. See In re FEMA Trailer Formaldehyde Prods. Liab. Litig., 668 F.3d 281, 286 (5th Cir. 2012). Motions filed under Federal Rule of Civil Procedure 12(b)(1) challenge the court's exercise of subject matter jurisdiction. See Fed.R.Civ.P. 12(b)(1). The party asserting jurisdiction always has the burden of proof as to a Rule 12(b)(1) motion to dismiss. See Ramming v. United States, 281 F.3d 158, 161 (5th Cir. 2001). If the court finds that it lacks subject matter jurisdiction, it must dismiss without prejudice. See id. For this reason, “[w]hen a Rule 12(b)(1) motion is filed in conjunction with other Rule 12 motions, the court should consider the Rule 12(b)(1) jurisdictional attack before addressing any attack on the merits.” Id. (citing Hitt v. City of Pasadena, 561 F.2d 606, 608 (5th Cir. 1977)) (per curiam).
A motion to dismiss under Rule 12(b)(6) is appropriate when the plaintiff fails to state a legally cognizable claim. See Fed.R.Civ.P. 12(b)(6). The moving party has the burden under a Rule 12(b)(6) motion to dismiss. See Philips N. Am., LLC v. Image Tech. Consulting, LLC, 22-CV-0147, 2022 WL 17168372, at *7 (N.D. Tex. Nov. 21, 2022). In considering a Rule 12(b)(6) motion to dismiss, the district court “accept[s] all well-pleaded facts as true and view[s] those facts in the light most favorable to the plaintifff]Gonzalez v. Kay, 577 F.3d 600, 603 (5th Cir. 2009). “To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.'” Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937 (2009) (quoting Bell Atl. Corp, v. Twombly, 550 U.S. 544, 570, 127 S.Ct. 1955 (2007)). “A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Iqbal, 556 U.S. at 678,129 S.Ct. at 1949 (quoting Twombly 550 U.S. at 556,127 S.Ct. at 1955). Thus, “where the well-pleaded facts do not permit the court to infer more than the mere possibility of misconduct, the complaint has alleged - but it has not ‘show[]n' - ‘that the pleader is entitled to relief.'” Id. at 679, 129 S.Ct. at 1937 (quoting Fed.R.Civ.P. 8(a)(2)). Importantly, legal conclusions without factual support are not entitled to the presumption of truth. See Young Conservatives of Tex. Found, v. Univ, of N. Tex., 569 F.Supp.3d 484, 489 (E.D. Tex. 2021).
In its first motion to dismiss, Caesars argues that this Court should dismiss Young's claims for three reasons. First Caesars argues that this Court does not have subject matter jurisdiction over Young's claims because Young does not meet the amount in controversy required by diversity jurisdiction, which is Young's only asserted ground for subject matter jurisdiction. Second, Caesars argues that even if this Court may exercise subject matter jurisdiction over Young's claims, Caesars is not the proper defendant for this suit because Caesars's subsidiary, not Caesars itself, owns Horseshoe Bossier. Finally, Caesars argues that even if it may be held liable for the acts of its subsidiary, the Court should dismiss Young's claims because Young fails to establish the requisite elements for conversion, breach of contract, or unjust enrichment.
In response to Caesars's first motion to dismiss, Young filed an Amended Complaint which alleges alternative grounds for subject matter jurisdiction - diversity jurisdiction specifically over a class action lawsuit. Additionally, Young filed an opposition brief in response to Caesars's second motion to dismiss in which he argues that Caesars is the proper defendant for this suit. Young acknowledges that while a parent company is generally not liable for the acts of its subsidiary, the Court may pierce the corporate veil in order to impose onto Caesars liability for Horseshoe Entertainment's actions. Young argues that Caesars's subsidiaries are completely controlled by Caesars, share common board members with Caesars, and that the companies do not observe corporate formalities, all of which allow the Court to pierce the corporate veil. Young also insists that his factual allegations are sufficient to allege the requisite elements for conversion, breach of contract, and unjust enrichment.
In his Amended Complaint, Young invokes subject matter jurisdiction through diversity jurisdiction. Specifically, Young claims that this Court may exercise diversity jurisdiction over his individual claims pursuant to 28, United States Code, Section 1332(a), and over the claims of the class pursuant to 28, United States Code, Section 1332(d).
A federal court may exercise diversity jurisdiction under Section 1332(a) if the amount in controversy exceeds $75,000, exclusive of interests and costs, and is between citizens of different states. See 28 U.S.C. § 1332(a)(1)-(2). Notably, Section 1332(a) does not permit multiple parties to aggregate their claims to satisfy the $75,000 jurisdictional amount. See Garcia v. Koch Oil Co. of Tex. Inc, 351 F.3d 636, 639 (5th Cir. 2003) (citing Snyder v. Harris, 394 U.S. 332, 336, 89 S.Ct. 1053 (1969)). Section 1332(d) allows federal courts to exercise jurisdiction over class actions in which the amount in controversy exceeds $5,000,000, exclusive of interests and costs, and in which any member of the class is a citizen of a state different from any defendant. See 28 U.S.C. § 1332(d)(2). Unlike Section 1332(a), Section 1332(d) requires the $5,000,000 jurisdictional amount to be aggregated among the class members. See Preston v. Tenet Healthsys. Mem'l Med. Ctr., Inc., 485 F.3d 804, 810 (5th Cir. 2007). When a plaintiff alleges that the amount in controversy requirement under Section 1332 is met, “it [must] appear to a legal certainty that the claim is really for less than the jurisdictional amount” in order for a court to dismiss for lack of subject-matter jurisdiction.” Allen v. R&H Oil & Gas Co., 63 F.3d 1326, 1335 (5th Cir. 1995) (internal quotations and citations omitted).
This Court does not have subject matter jurisdiction over Young's claims. Although Young appears to meet Section 1332(a) and (d)'s diversity of...
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