Garza et al v. Cherokee Healthcare Services

Western District of Texas, txwd-5:2019-cv-00353

MOTION to Dismiss by Cherokee Healthcare Services.

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6 IN THE UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF TEXAS SAN ANTONIO DIVISION CYNTHIA GARZA, ELSA TOSCANO § NORMA BEXAR-MOLINE, TERESA § VILLANUEVA, AND SAN JUANA § GOMEZ, INDIVIDUALLY AND ON § BEHALF OF ALL THOSE SIMILARLY § SITUATED § § Plaintiff, § § v. § CIVIL ACTION NO. 5:19-cv-353-FB § CHEROKEE HEALTHCARE SERVICES § § Defendant. § ______________________________________________________________________________ DEFENDANT'S MOTION TO DISMISS ______________________________________________________________________________ Shannon B. Schmoyer Texas Bar No. 17780250 SCHMOYER REINHARD LLP 17806 IH 10 West, Suite 400 San Antonio, Texas 78257 Telephone: 210.447.8033 Facsimile: 210.447.8036 -and- W. Kirk Turner, OBA # 13791 (admitted pro hac vice) Philip R. Bruce, OBA# 30504 (admitted pro hac vice) Jacob S. Crawford, OBA# 31031 (admitted pro hac vice) McAfee & Taft, A Professional Corporation Williams Center Tower II Two W. Second Street, Suite 1100 Tulsa, Oklahoma 74103 May 29, 2019 i 6 TABLE OF CONTENTS ARGUMENTS AND AUTHORITIES........................................................................................... 1 I. Legal Standard ................................................................................................................ 1 II. Plaintiffs Have Failed to Adequately Plead the Putative Class Members Are Similarly Situated. .......................................................................................................... 3 III. Plaintiffs' Individual Claims Should Be Dismissed for Failure to State a Claim. ......... 9 CONCLUSION ............................................................................................................................. 10 ii 6 TABLE OF AUTHORITIES Cases Page(s) Ainsworth v. Rod's Production Services, LLC, No. A-15-CA-605-SS, 2015 WL 13567093 (W.D. Tex. Aug. 28, 2015) ......................2, 3, 4, 5 Anders v. Kashmir Road Lines, LLC, No. H-17-453, 2017 WL 6520478 (S.D. Tex. Dec. 18, 2017) ..................................................6 Ashcroft v. Iqbal, 556 U.S. 662 (2009) ......................................................................................................... passim Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007) ...........................................................................................................1, 2, 4 Creech v. Holiday CVS, LLC, No. 11-CV-46, 2012 WL 4483384 (M.D. La. Sept. 26, 2012) ..........................................2, 3, 4 Dumas v. Wal-Mart Stores East, LP, No. SA-09-CA-126-FB, 2009 WL 10700071 (W.D. Tex. Apr. 30, 2009) ................................1 Fairchild v. All Am. Check Cashing, Inc., 815 F.3d 959 (5th Cir. 2016) .................................................................................................7, 8 Flores v. Act Event Services, Inc., 55 F.Supp.3d 928, 934 (N.D. Tex. 2014) ........................................................................ passim Hutchingson v. Rao, No. 5:14-cv-1118, 2015 WL 1655113 (W.D. Tex. Apr. 14, 2015) ...........................................2 Longoria v. KHM Rentals, LLC, No. SA-13-CA-1143-FB, 2015 WL 12734176 (W.D. Tex. July 27, 2015) ........................9, 10 Newton v. City of Henderson, 47 F.3d 746 (5th Cir. 1995) ...................................................................................................7, 8 Pickering v. Lorillard Tobacco Co., Inc., No. 2:10-CV-6330-WKW, 2011 WL 111730 (M.D. Ala. Jan 13, 2011) ..........................3, 4, 5 St. Croix v. Genentech, No. 8:12-cv-891-T-33EAJ, 2012 WL 2376668 (M.D. Fla. June 22, 2012) ..............................4 Williamson v. BOPCO, L.P., No. PE:16-CV-79-RAJ-DF, 2017 WL 5071336 (W.D. Tex. Sept. 27, 2017) ...........................7 Statutes 29 U.S.C. § 216(b) ...........................................................................................................................2 iii 6 Other Authorities Federal Rule of Civil Procedure Rule 8 ...............................................................................1, 2, 5, 8 Federal Rule of Civil Procedure Rule 12 .............................................................................1, 2, 3, 5 iv 6 Defendant Cherokee Nation Healthcare Services, LLC ("Cherokee") 1, pursuant to Federal Rules of Civil Procedure 8(a)(2) and 12(b)(6), respectfully requests the Court dismiss Plaintiffs' claims brought pursuant to the Fair Labor Standards Act ("FLSA"). In support of this Motion, Cherokee states as follows: ARGUMENTS AND AUTHORITIES I. Legal Standard Federal Rule of Civil Procedure 8(a)(2) requires a complaint to contain "a short and plain statement of the claim showing that the pleader is entitled to relief." As the Supreme Court has explained, the purpose of the rule is to "give the defendant fair notice of what the. . . claim is and the grounds upon which it rests." Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007) (internal citations and quotation marks omitted); see also Ashcroft v. Iqbal, 556 U.S. 662 (2009). The purpose of a Rule 12(b)(6) motion is to test the sufficiency of a complaint against the pleading requirements set forth in Rule 8. See Dumas v. Wal-Mart Stores East, LP, No. SA-09- CA-126-FB, 2009 WL 10700071, at *2 (W.D. Tex. Apr. 30, 2009). In order to survive a motion to dismiss, a cause of action must be supported by "enough facts to state a claim to relief that is plausible on its face." Twombly, 550 U.S. at 570. While Rule 8(a)(2) does not require detailed factual allegations, "it demands more than an unadorned, the- defendant-unlawfully-harmed-me accusation." Iqbal, 556 U.S. at 678. Hence, a pleading that offers only "labels and conclusions" or "a formulaic recitation of the elements of a cause of action will not do." Twombly, 550 U.S. at 555. Nor will a complaint that tenders merely "'naked assertion[s]' devoid of 'further factual enhancement.'" Iqbal, 556 U.S. at 678 (quoting Twombly, 550 U.S. at 557). 1 The proper legal name of the Defendant is Cherokee Nation Healthcare Services, LLC, which is a diversified business of the Cherokee Nation. 1 6 In determining whether a complaint meets this standard, "the tenet that a court must accept as true all of the allegations contained in a complaint is inapplicable to legal conclusions. Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice." Iqbal, 556 U.S. at 678. In keeping with those principles a court considering a motion to dismiss can choose to begin by identifying the pleadings that, because they are no more than conclusions, are not entitled to the assumption of truth. While legal conclusions can provide the framework of a complaint, they must be supported by factual allegations. Id. at 679 (emphasis added). Courts should not "unlock the doors of discovery for a plaintiff armed with nothing more than conclusions," id. at 678-79, particularly when the complaint asserts a putative class which would greatly increase the scope and expense of discovery. See Twombly, 550 U.S. at 558-59. If a complaint fails to meet the requirements of Rule 8, then the Court may dismiss the claims therein under Rule 12(b)(6) for "failure to state a claim upon which relief can be granted. . . ." The FLSA authorizes a plaintiff to file suit on her behalf and on behalf of a collective, or class, comprised of "other employees similarly situated." 29 U.S.C. § 216(b). This Court, along with others, has held that Rules 8(a)(2) and 12(b)(6) apply to FLSA collective claims. See Ainsworth v. Rod's Production Services, LLC, No. A-15-CA-605-SS, 2015 WL 13567093, at *1- 3 (W.D. Tex. Aug. 28, 2015); Hutchingson v. Rao, No. 5:14-cv-1118, 2015 WL 1655113, at *3 (W.D. Tex. Apr. 14, 2015); Flores v. Act Event Services, Inc., 55 F.Supp.3d 928, 934 (N.D. Tex. 2014) ("The Federal Rules of Civil Procedure apply in all civil actions pending before federal courts. . . . [T]he court will consider Rule 12(b)(6) motions directed at FLSA collective action claims."); Creech v. Holiday CVS, LLC, No. 11-CV-46, 2012 WL 4483384, at *6-7 (M.D. La. Sept. 26, 2012) (dismissing collective claims pursuant to Rule 12(b)(6)). Therefore, the Court 2 6 should dismiss a collective claim when the plaintiff fails to plead facts sufficient to "nudge" such a claim "across the line from conceivable to plausible." Iqbal, 556 U.S. at 680, 683. Here, the collective claim contained in Plaintiffs' Original Collective Action Complaint ("Complaint") is insufficient because it does not contain factual allegations to give Cherokee fair notice of who is in the putative class. Similarly, the Complaint fails to adequately plead individual claims on behalf of the named Plaintiffs. II. Plaintiffs Have Failed to Adequately Plead the Putative Class Members Are Similarly Situated. To survive a Rule 12(b)(6) motion, a complaint asserting an FLSA collective claim must provide the defendant with fair notice of who might be in the putative class. See Ainsworth, 2015 WL 13567093, at *3 (citing Rao, 2015 WL 165113, at *3); Flores, 55 F.Supp.3d at 934. It must also contain specific factual allegations that create a plausible inference that the putative class members are similarly situated. See Ainsworth, 2015 WL 13567093, at *3 (citing Rao, 2015 WL 165113, at *3); Creech v. Holiday CVS, LLC, No. 11-CV-46, 2012 WL 4483384, at *6-7 (M.D. La. Sept. 26, 2012). A plaintiff must do more than rely on conclusory allegations about the make-up of the putative class or the similarity of its members. Iqbal, 556 U.S. at 678-79. To provide the defendant with sufficient notice of the putative class, "an FLSA plaintiff must allege specific facts describing the job duties of the alleged 'similarly situated' employees. . . ." Ainsworth, 2015 WL 13567093, at *3. "A job title alone will not meet this standard." Id. (citing Pickering v. Lorillard Tobacco Co., Inc., No. 2:10-CV-6330-WKW, 2011 WL 111730, at *1 (M.D. Ala. Jan 13, 2011)). In Pickering, the plaintiff defined the putative class as "sales representatives." 2011 WL 111730, at *2. The plaintiff alleged he and the putative class members were similarly situated 3 6 and worked in excess of 40 hours per week without being paid overtime wages. See id. The court held "[m]erely alleging a job title—sales representative—was insufficient to satisfy the Twombly and Iqbal pleading standard where the title was not accompanied by a specific job description or other 'allegation revealing what Plaintiff did when he reported to work.'" Ainsworth, 2015 WL 13567093, at *3 (quoting Pickering, 2011 WL 111730, at *2); see also St. Croix v. Genentech, No. 8:12-cv-891-T-33EAJ, 2012 WL 2376668, at *2-3 (M.D. Fla. June 22, 2012) (holding the plaintiff failed to state a plausible collective action when he alleged he was a "Pharmaceutical Sales Representative" but failed to allege the job duties, or even specific job titles, of the putative class members). Overly broad job descriptions do not meet this standard either. See Ainsworth, 2015 WL 13567093, at *3 (citing Creech, 2012 WL 4483384, at *6-7). In Creech, the plaintiff alleged the putative class members were similarly situated because they all "provided customer services" for the defendants. 2012 WL 4483384, at *3. The court held "[s]uch a broad rendition of a position's job duties was 'not descriptive enough to give rise to a plausible right to relief.'" Ainsworth, 2015 WL 13567093, at *3 (quoting Creech, 2012 WL 4483384, at *3). Also, a plaintiff cannot avoid dismissal by broadly alleging the putative class members are similarly situated in that they were subject to the same unlawful pay practices. See Flores, 55 F.Supp.3d at 940. In Flores, the plaintiffs defined the putative class members as employees "who were/are subject to Defendants' unlawful pay practices and policies at any point from three years prior to the filing of the instant matter to the present. . . ." Id. The court held this definition did not provide the defendants with the requisite fair notice of the putative class. See id. It did not matter that elsewhere in the complaint the plaintiffs identified some of their specific job duties; they did not use those job duties in the class definition. See id. "It is not the 4 6 defendants' responsibility to define the putative class by piecing together factual allegations strewn throughout a complaint; rather, fair notice requires the plaintiffs to clearly define the putative collective class." Flores, 55 F.Supp.3d at 940. Here, Plaintiffs have not met the pleading standard set forth in Rule 8(a)(2) regarding the putative class. Plaintiffs' paltry description of the putative class is as follows: All hourly paid medical coders (regardless of actual job title) who worked for Defendant within the last three years who worked in excess of 40 hours in one or more workweeks and were not compensated at one and one-half times their regular rate of pay for all hours worked in excess of 40 hours in one or more workweeks and/or were forced to work off the clock and thus not paid for all hours worked. Compl. ¶ 6.6.1. The only descriptive, albeit anemic, allegations about the putative class members are that they were (1) medical coders and (2) subject to unlawful pay practices. Neither allegation is sufficient to survive a Rule 12(b)(6) motion. The term "medical coders" is much too broad to provide Cherokee with fair notice of the putative class. In a different section of the Complaint, Plaintiffs allege they "work(ed) for Defendant coding medical charts." But, they do not allege any "specific facts describing the job duties" of medical coders. Ainsworth, 2015 WL 13567093, at *3. Like the Pickering plaintiff's attempt to define the class as "sales representatives," Plaintiffs' reliance on the generic term "medical coders" to define a class is insufficient. 2011 WL 111730, at *2. Moreover, Plaintiffs do not allege the type of medical coding performed by the putative class members. Did they perform inpatient coding? Outpatient coding? Coding of diagnoses? Coding of treatments? Another type of coding? Coding for specific healthcare facilities? They do not allege any details of what coding medical charts entails. They do not allege the putative class provided services to the same clients of Cherokee, that the same coding requirements applied to 5 6 all types of coding or to all medical coders, that all medical coders were required to have the same qualifications, or any other information that might demonstrate all medical coders are similarly situated. Cherokee does not have fair notice of what class Plaintiffs intend to represent. As in Flores, Plaintiffs' allegation that the class members were subject to unlawful pay practices cannot save their deficient Complaint. See 55 F.Supp.3d at 940. Plaintiffs do not even allege all members were subject to the same unlawful practice. They allege members were not paid overtime rates for time worked in excess of 40 hours in a workweek "and/or" were not paid for "off the clock" work. Compl. ¶ 6.6.1. Plaintiffs' use of the disjunctive "or" demonstrates they have alleged two separate unlawful pay practices—(1) failure to pay overtime wages for time worked in excess of 40 hours in a workweek and (2) failure to pay for work performed "off the clock." It also demonstrates that not all putative members were subject to both practices. In other words, Plaintiffs allege some members might have only been subject to working overtime without being paid overtime wages, some might have only been subject to working "off the clock" without pay, and some might have been subject to both alleged practices. Cherokee does not admit it engaged in any unlawful pay practices. Nonetheless, the distinction between the two alleged practices is significant. It is generally unlawful for a covered employer to not pay overtime wages to non-exempt employees who work in excess of 40 hours in a workweek. Therefore, overtime claims are valid under the FLSA. The same is not true for Plaintiffs' "off the clock" claims. Such claims are referred to as "gap-time" claims. Anders v. Kashmir Road Lines, LLC, No. H-17-453, 2017 WL 6520478, at *2 (S.D. Tex. Dec. 18, 2017). "A gap-time claim is one in which an employee has not worked 40 hours in a given week but seeks recovery of unpaid time worked, or in which an employee has worked over 40 hours in a given week but seeks recovery for unpaid work under 40 hours." Id. "Gap-time claims are not 6 6 actionable under the FLSA." Id. (citing Lundy v. Catholic Health Sys. of Long Island Inc., 711 F.3d 106, 115 (2d Cir. 2013); Carman v. Meritage Homes Corp., 37 F. Supp. 3d 869, 865 (S.D. Tex. 2014)); see also Williamson v. BOPCO, L.P., No. PE:16-CV-79-RAJ-DF, 2017 WL 5071336, at * (W.D. Tex. Sept. 27, 2017) ("the FLSA does not provide a cause of action for unpaid wages in excess of the minimum wage"). Accordingly, Plaintiffs have alleged that some members of the putative class were subject to an alleged practice that potentially gives rise to an FLSA claim (failure to pay overtime wages) and others were subject to an alleged practice that does not give rise to an FLSA claim (failure to pay wages for "off the clock" time). The difference between the two policies, and Plaintiffs' failure to allege all putative members were subject to both, demonstrates the putative class members are not similarly situated and fails to state a claim. More still, Plaintiffs fail to state a claim even for the allegations that Plaintiffs and the putative class members worked unpaid overtime. Plaintiffs' threadbare recitals of their purported overtime work do not nudge the case across the line from conceivable to plausible. Iqbal, 556 U.S. at 680, 683. Nor do Plaintiffs' bare-bones allegations give Cherokee fair notice of its alleged wrong doing. Under controlling law, it is not merely enough that Plaintiffs actually worked unpaid overtime: the employer must have actual or constructive knowledge of the employees' overtime work. See Newton v. City of Henderson, 47 F.3d 746, 748 (5th Cir. 1995) ("[I]f the 'employee fails to notify the employer or deliberately prevents the employer from acquiring knowledge of the overtime work, the employer's failure to pay for the overtime hours is not a violation of § 207.'") (internal citations omitted); see also Fairchild v. All Am. Check Cashing, Inc., 815 F.3d 959, 964 (5th Cir. 2016) (holding that plaintiff could not prevail on 7 6 overtime claims since employer did not have constructive knowledge of overtime work from mere access to plaintiff's computer usage reports"). Here, Cherokee is flummoxed as to Plaintiffs' alleged overtime claims. Plaintiffs allege that "Plaintiffs worked hours that Plaintiffs' supervisor(s) refused to record in the timekeeping system", "Defendant's management knew Plaintiffs were working over 40 hours in most, if not every, work week", and "[D]efendant did not accurately track and pay for all hours worked…" Compl. ¶ 5.6-5.8. These naked assertions are insufficient to both state a claim for either the purported class or of the individual Plaintiffs. There is no indication from the face of the Complaint that these allegations are part of the class allegations. They are not incorporated into the class definition or part of the class allegations. Moreover, there are no factual allegations regarding these threadbare assertions, such as whether Plaintiffs actually requested that any supervisor(s) 2 record time for Plaintiffs. Indeed, as Plaintiffs well know, they all worked remotely from home using a secure laptop issued by the federal government and there was no way for Cherokee to know the actual hours Plaintiffs worked, and thus, like in Newton and Fairchild, Plaintiffs were responsible for recording their own hours and complying with Cherokee's timekeeping policies. Similarly, there are no allegations about how management allegedly knew Plaintiffs were working over 40 hours or how Cherokee did not accurately track Plaintiffs' hours—particularly when they all worked from home. The Complaint contains no factual allegations that make it plausible that the putative class members were similarly situated. Plaintiffs' inadequate pleading is more than just a technical violation of Rule 8. Plaintiffs have deprived Cherokee of adequate notice as to who 2 Note there is no specific allegation of which supervisor or supervisors allegedly refused to record time. 8 6 might be part of the putative class or how Cherokee allegedly violated the FLSA rights of the Plaintiffs or putative class members. Therefore, Plaintiffs' collective claims should be dismissed for failure to state a claim upon which relief can be granted. III. Plaintiffs' Individual Claims Should Be Dismissed for Failure to State a Claim. A complaint alleging FLSA claims, whether individual or collective, "must include more than labels and conclusions or a formalistic recitation of the elements of a cause of action." Longoria v. KHM Rentals, LLC, No. SA-13-CA-1143-FB, 2015 WL 12734176, at *3 (W.D. Tex. July 27, 2015). As demonstrated earlier, it must provide some specifics as to the Plaintiffs' job description. See id. It must also allege dates the Plaintiffs' were not properly paid, their rates of pay, and at least an approximation of amounts owed. See id. In Longoria, the plaintiffs alleged they were regularly required to work between 70 and 120 hours per week but were not paid one-and-a-half times their regular rate for time worked in excess of 40 hours each week. See id. They also alleged they were required to work on their off days but were not fully compensated for those days. See Longoria, 2015 WL 12734176, at *3. This Court held the allegations were insufficient to state a claim upon which relief may be granted because the plaintiffs did not identify the specific dates they worked overtime, the specific dates they were required to work off the clock without pay, their pay rates, and they did not allege the approximate amounts the defendant owed them. See id. By failing to include these allegations, this Court held the complaint was an improper "bare bones claim with a formalistic recitation of an FLSA cause of action." Id. (citing Twombly, 550 U.S. at 555). This Court also noted that by omitting any specific job descriptions from the Complaint, the plaintiffs had failed to adequately plead that "they are truly not exempt [from the FLSA.]" Id. 9 6 In the present case, Plaintiffs' Complaint is even more deficient than the one in Longoria. Unlike in Longoria, Plaintiffs do not allege how many hours they were required to work in excess of 40 hours per week. They do not allege specific weeks they were required to work overtime without being paid overtime rates, nor do they allege specific dates they were required to work off the clock without pay. They also do not attempt to approximate the amounts of pay they are owed. Moreover, Plaintiffs' failure to include any job descriptions in the Complaint means they have failed to plausibly allege they are non-exempt under the FLSA. In short, Plaintiffs' Complaint contains no factual allegations about Plaintiffs' FLSA claims. It is nothing more than conclusory statements and a "formalistic recitation of an FLSA cause of action." Longoria, 2015 WL 12734176, at *3. Accordingly, Plaintiffs' Complaint should be dismissed in its entirety for failure to state any claims upon which relief may be granted. CONCLUSION Because Plaintiffs have failed to adequately plead claims for relief, and have failed to adequately plead the putative class is similarly situated, the Court should dismiss Plaintiffs' Complaint in its entirety. In the alternative, the Court should require Plaintiffs to amend their Complaint to provide a more definite statement of their claims. 10 6 Respectfully submitted, /s/ Philip R. Bruce Shannon B. Schmoyer Texas Bar No. 17780250 sschmoyer@sr-llp.com SCHMOYER REINHARD LLP 17806 IH 10 West, Suite 400 San Antonio, Texas 78257 Telephone: 210.447.8033 Facsimile: 210.447.8036 W. Kirk Turner, OBA # 13791 (admitted pro hac vice) Philip R. Bruce, OBA# 30504 (admitted pro hac vice) Jacob S. Crawford, OBA# 31031 (admitted pro hac vice) McAfee & Taft, A Professional Corporation Williams Center Tower II Two W. Second Street, Suite 1100 Tulsa, Oklahoma 74103 Telephone: (918) 587-0000 Facsimile: (918) 599-9317 kirk.turner@mcafeetaft.com philip.bruce@mcafeetaft.com ATTORNEYS FOR DEFENDANT CHEROKEE NATION HEALTHCARE SERVICES, LLC 11 6 CERTIFICATE OF SERVICE ☒ I hereby certify that on May 29, 2019, I electronically transmitted the foregoing document to the Clerk of Court using the ECF System for filing and transmittal of a Notice of Electronic Filing to the following ECF registrants: Chris R. Miltenberger Texas Bar NO. 14171200 The Law Office of Chris R. Miltenberger, PLLC 1360 N White Chapel Suite 200 Southlake, Texas 76092-4322 Office 817-416-5060 Fax 817-416-5062 chris@crmlawpractice.com ATTONERY FOR PLAINTIFFS /s/ Shannon B. Schmoyer Shannon B. Schmoyer 12