Hernandez v. Global Prisoner Services, LLC D/b/a Texas Prisoner Transportation Services

Western District of Texas, txwd-5:2019-cv-00374

MOTION to Set Aside [16] Clerk's Entry of Default by Global Prisoner Services, LLC. Motions referred to Judge Richard B. Farrer.

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2 UNITED STATES DISTRICT COURT WESTERN DISTRICT OF TEXAS SAN ANTONIO DISTRICT AMANDA HERNANDEZ, individually and on) behalf of All Others Similarly Situated,))) Plaintiff,)) No.: 5:19-cv-00374-FB v.)) GLOBAL PRISONER SERVICES, LLC d/b/a) TEXAS PRISONER TRANSPORTATION) SERVICES, PTS OF AMERICA, LLC, and)) RYAN WHITTEN,)) Defendants. GLOBAL PRISONER SERVICES, LLC'S MOTION TO SET ASIDE ENTRY OF DEFAULT, AND MOTION TO DISMISS WITH INCORPORATED MEMORANDUM OF LAW IN SUPPORT THEREOF Global Prisoner Services, LLC ("GPS") moves this Court to take the following actions on its behalf: 1. Set aside the Clerk's Entry of Default (Docket Entry No. 16) under Fed. R. Civ. P. 55(c); 2. Dismiss this case, with prejudice, as to GPS under Fed. R. Civ. P. 12(b)(6) and 12(b)(3). 1 As for grounds, GPS will state the same throughout its incorporated memorandum of law, which is presented below. I. The default entered by the clerk should be set aside under Fed. R. Civ. P. 55(c). Undersigned counsel has conferred with Plaintiff's counsel and with counsel for PTS of America, LLC ("PTS") regarding GPS's motion for the Court to set aside the Clerk's entry of 1 GPS notes that it has also filed an alternative motion to compel arbitration which may prevent the need for any ruling upon this portion of this motion. 2 default (Docket No. 16) under Fed. R. Civ. P. 55(c). Counsel for Plaintiff and Counsel for PTS have both stated that they do not oppose this non-dispositive motion. Thus, the Court should grant the same and set aside the default previously entered by the Clerk. While this motion is not opposed, GPS nevertheless wishes to offer an explanation should the Court inquire. As the return of summons previously filed indicate, actual service (as opposed to constructive service) was never made on GPS. (Docket Entry Nos. 8 & 10; See also, Whitten Dec. ¶ 3, filed contemporaneously with this motion under separate docket entry). Similarly, Plaintiff's request for the Clerk's Entry of Default was not served upon GPS, as evidenced by the lack of a certificates of service on either document. (Docket Entry Nos. 15 & 16). Thus, GPS did not receive actual notice of this lawsuit's pendency until Mr. Whitten was served with process in October 2019. (Whitten Dec. ¶ 3, attached as Exhibit A; See also, Docket Entry No. 27). Undersigned counsel was then sought out, and this motion was filed shortly after admission pro hac vice was granted. (Docket Entry No. 39, and corresponding text order). Accordingly, the default was not willful. Nor has any delay prejudiced Plaintiff, as she also moved to delay the entry of a default judgment so that she may pursue claims against other parties. (Docket Entry. No. 18). And, as described below (and as recited in PTS of America, LLC's Motion to Dismiss), various defenses exist for GPS. Accordingly, "good cause" exists to set aside the default, and GPS requests the same, which is not opposed by any party. Buckley v. Donohue Indus. Inc., 100 F. App'x 275, 278 (5th Cir. 2004). 2 2 II. GPS moves the Court to dismiss all claims against it under Fed. R. Civ. P. 12(b)(6) and 12(b)(3). Pursuant to Fed. R. Civ. P. 12(b)(6) and 12(b)(3), GPS moves this Court to dismiss all claims brought against it in Plaintiff's Amended Complaint. 2 As grounds, GPS states the following: 1. The Amended Complaint is a shotgun pleading which groups all Defendants together as if they were a single actor, and thereby fails to comply with Fed. R. Civ. P. 8. 2. The Amended Complaint fails to allege facts which establish FLSA coverage for Plaintiff, in that the Complaint only makes conclusory allegations of Plaintiff being involved in "commerce" but fails to state facts showing that she was in fact involved in interstate commerce on behalf of GPS. 3. To the extent the Court rejects any of the prior grounds, GPS relies upon the grounds cited in PTS of America, LLC's Motion to Dismiss, including the following: a. That, if Plaintiff has sufficiently alleged engaging in interstate commerce, then the Motor Carrier Exemption and Jeanna's Act bar her claims; b. That there is no private cause of action for record keeping; c. That the proposed collective action claims fail to give notice of a cohesive class, and thus must be dismiss; and d. That venue is improper in this district. Accordingly, GPS requests that it be dismissed from this case, with prejudice. STANDARD OF REVIEW Because this motion is filed under Fed. R. Civ. P. 12(b)(6), the Court must review the Amended Complaint through the well-known lens of Twombly and Iqbal, which have previously been summarized by the Austin Division of this Court: 2 As this is a dispositive motion, no request for agreement was made by undersigned counsel. However, all counsel were made aware that such a motion would be filed. 3 2 When evaluating a motion to dismiss for failure to state a claim under Rule 12(b)(6), "[t]he 'court accepts all well-pleaded facts as true, viewing them in the light most favorable to the plaintiff.' " In re Katrina Canal Breaches Litig., 495 F.3d 191, 205 (5th Cir. 2007) (quoting Martin K. Eby Constr. Co. v. Dallas Area Rapid Transit, 369 F.3d 464, 467 (5th Cir. 2004)). Although Federal Rule of Civil Procedure 8 mandates only that a pleading contain a "short and plain statement of the claim showing that the pleader is entitled to relief," this standard demands more than unadorned accusations, "labels and conclusions," "a formulaic recitation of the elements of a cause of action," or "naked assertion[s]" devoid of "further factual enhancement." Bell Atl. v. Twombly, 550 U.S. 544, 555 (2007). Rather, a complaint must contain sufficient factual matter, accepted as true, to "state a claim to relief that is plausible on its face." Id. at 570. The court must initially identify allegations in the complaint that are no more than legal conclusions or "[t]hreadbare recitals of a cause of action's elements," then assume the veracity of well-pleaded factual allegations and "determine whether they plausibly give rise to an entitlement to relief." Ashcroft v. Iqbal, 556 U.S. 662, 678-79 (2009). "[W]here 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 (quoting Fed. R. Civ. P. 8(a)(2)). Lozano v. W. Concrete Pumping, Inc., 2016 WL 4444907, at *3 (W.D. Tex. Aug. 23, 2016) (underline and bold added). Applying this standard here compels the conclusion that all claims against GPS must be dismissed. LAW AND ARGUMENT I. Plaintiff's Complaint is a shotgun pleading which fails to comply with Fed. R. Civ. P. 8 because it does not identifying which parties took which actions. Plaintiff's Amended Complaint begins by identifying the parties, but then immediately proceeds to lump Ryan Whitten, Global Prisoner Services, LLC ("GPS"), and PTS of America, LLC together as if they were one. (Amend. Compl. Preamble). From there, the Amended Complaint goes on to make a number of conclusory allegations about the "Defendants," without specifying which party actually took which set of actions. See, e.g. Id. at ¶ 3, 4, 5, 9, 13, 42, 43, 44, 45, 46, 47, 48, etc.). And, of course, Plaintiff then repeatedly incorporates all facts set forth previously into each and every count of her pleading—making it further impossible to tell which 4 2 allegations are aimed at which party. (Id. at ¶ 41, 49, and 52). This style of pleading is colloquially known as a "Shotgun Pleading," and it fails to comply with Fed. R. Civ. P. 8. See, Bell v. Wells Fargo Bank, N.A., 2017 WL 6761770, at FN. 3 (N.D. Tex. Oct. 13, 2017) (citing Hinojosa v. Livingston, 807 F.3d 657, 684 (5th Cir. 2015) ("A "shotgun pleading" uses blanket terms covering all defendants collectively or asserts multiple claims against multiple defendants without specifying which defendants are responsible for which acts."). The law of this Circuit—as summarized by the Southern District of Mississippi—is that a complaint such as the one filed by Plaintiff is subject to dismissal under Rule 12 for failure to comply with Rule 8: As opposed to the "short and plan statement" requirement contemplated by Rule 8, shotgun pleadings contain several counts within a complaint with each count " 'incorporating by reference the allegations of its predecessors, leading to a situation where most of the counts (i.e., all but the first) contain irrelevant factual allegations and legal conclusions.' " Griffin v. HSBC Mortg. Servs., Inc., No. 4:14cv132- DMB-JMV, 2015 WL 4041657, at *5 (N.D. Miss. July 1, 2015) (quoting Strategic Income Fund, L.L.C. v. Spear, Leeds & Kellog Corp., 305 F.3d 1293, 1295 (11th Cir. 2002)). Another characteristic of shotgun pleadings is that they fail to distinguish between the actions of named defendants. Magluta v. Samples, 256 F.3d 1282, 1284 (11th Cir. 2001) (cited by Griffin, 2015 WL 4041657, at *5); Sahlein v. Red Oak Capital, Inc., No. 3:13cv67-DMB-JMV, 2014 WL 3046477, at *4 (N.D. Miss. July 3, 2014) (dismissing a "shotgun pleading" when "numerous paragraphs in the complaint attribute discrete actions, such as the sending of a letter, or the public recording of a document, to all or multiple defendants without explaining the basis for such grouping or distinguishing between the relevant conduct of the named Defendants"). The Fifth Circuit specifically discourages shotgun pleading "where the pleader heedlessly throws a little bit of everything into his complaint in the hopes that something will stick." S. Leasing Partners, Ltd. v. McMullan, 801 F.2d 783, 788 (5th Cir. 1986). Shotgun pleadings are considered so objectionable, that they can even give rise to Rule 11 sanctions. See id. ("If Rule 11 is to mean anything and we think it does, it must mean an end to such expeditionary pleadings."); see also Pardue v. Jackson Cty., Miss., No. 1:14cv290-KS-MTP, 2016 WL 3024153 (S.D. Miss. May 25, 2016) (explaining why shotgun pleadings are objectionable); Payne v. Univ. of S. Miss., No. 1:12cv41-KS-MTP, 2015 WL 1482636, at *4 (S.D. Miss. Mar. 31, 2015) ("[S]anctions are an appropriate punishment for Plaintiff's counsel's 'shotgun approach to pleadings.'"). 5 2 Shotgun complaints are subject to dismissal pursuant to Federal Rule of Civil Procedure 12(b)(6). See Paylor v. Hartford Fire Ins. Co., 748 F.3d 1117, 1126–27 (11th Cir. 2014) ("A defendant served with a shotgun complaint should move the district court to dismiss the complaint pursuant to Rule 12(b)(6) or for a more definite statement pursuant to Rule 12(e) on the ground that the complaint provides it with insufficient notice to enable it to file an answer."). If a plaintiff is given leave to amend following such a dismissal, the plaintiff "should avoid lumping the defendants together and should instead separately allege the scope of any duties owed and conduct alleged to have breached those duties as to each defendant." Ware v. U.S. Bank Nat. Ass'n, No. 3:13cv387-DPJ-FKB, 2013 WL 6805153, at *4 (S.D. Miss. Dec. 20, 2013). Copeland v. Axion Mortg. Grp. LLC, 2016 WL 4250431, at *4 (S.D. Miss. Aug. 11, 2016) (bold added) (See also, Roe v. Johnson Cty., Texas, 2019 WL 5031357, at *5 (N.D. Tex. July 29, 2019), report and recommendation adopted, No. 3:18-CV-2497-B-BN, 2019 WL 3980737 (N.D. Tex. Aug. 22, 2019) ("Shotgun pleadings are subject to dismissal under Rule 12(b)(6)"). The logic of Copeland applies here: Plaintiff's Amended Complaint groups all parties together as if they were one, uses a litany of conclusory allegations, and incorporates all allegations by reference in a manner which prevents any Defendant from knowing what it is accused of (and what it is not), and is therefore "subject dismissal." Id. Moreover, while Copeland makes reference to the possibility of an amendment, it is worth remembering that Plaintiff has already amended her complaint once. And, when doing so, she failed to remedy these deficiencies—but rather, she made them worse by including PTS and Mr. Whitten in her collective and conclusory allegations. Thus, dismissal is appropriate here. Given that current Amended Complaint is a shotgun pleading which does not comply with Fed. R. Civ. P. 8, all claims brought in it against GPS must be dismissed at this point for failure to state a claim upon which relief can be granted. 6 2 II. The Amended Complaint fails to plead facts showing that Plaintiff was involved in interstate commerce at the behest of GPS. In order to proceed upon a claim under the FLSA, a plaintiff must plead facts establishing either enterprise or individual coverage by the FLSA. Plaintiff did not do so with regard to her claims against GPS, and thus her claims are subject to dismissal for failure to satisfy Rule 8. As a general matter, "[e]ither individual or enterprise coverage is enough to invoke FLSA protection." Lindgren v. Spears, 2010 WL 5437270, at *1 (S.D. Tex. Dec. 27, 2010). However, merely claiming that one or the other applies—in the absence of sufficient factual allegations to show the same—is insufficient to pass Rule 8 muster. For example, the Southern District of Texas has applied that principle to dismiss claims when the plaintiff's complaint makes only conclusory allegations of FLSA coverage: Courts have held that this coverage provision is an element of the cause of action, not a jurisdictional requirement. Brown v. Constant Care, Inc., No. Civ. A. 5:04– CV–165, 2004 WL 1836732, at *2 (N.D.Tex. Aug.17, 2004) (applying rule in FLSA case to a challenge based on failure to meet the $500,000 amount and finding subject matter jurisdiction to consider the challenge) (citing Clark, 798 F.2d at 741–42 (where the basis of federal jurisdiction is also an element of subject matter jurisdiction and the factual findings about subject matter jurisdiction are intertwined with the merits, the case should not be dismissed for lack of subject matter jurisdiction unless the alleged claim is immaterial or wholly insubstantial and frivolous; instead, the challenge should be treated as an attack on the merits)). The proper analysis is not under Rule 12(b)(1) but rather under Rule 12(b)(6). In conducting this analysis, this court confines itself to the complaint and does not include the Lindgren's affidavit or the Spears's tax return. The complaint alleges: At all times pertinent to this Complaint, Defendant was an enterprise engaged in interstate commerce. At all times pertinent to this Complaint, Defendant regularly owned and operated businesses engaged in commerce or in the production of goods for commerce as defined by § 3(r) and 3(s) of the Act, § 203(4) and 203(s). Additionally, Plaintiff was individually engaged in commerce and her work was essential to Defendant's business. 7 2 (Docket Entry No. 1). The allegations of FLSA coverage are conclusory; they merely repeat the statutory elements of coverage, which is an element of the claim. Conclusory allegations that do no more than repeat the elements of the claim are insufficient under Rule 8 of the Federal Rules of Civil Procedure. In Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007), and Ashcroft v. Iqbal, ––– U.S. ––––, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009), the Supreme Court confirmed that Rule 12(b)(6) must be read in conjunction with Rule 8(a), which requires "a short and plain statement of the claim showing that the pleader is entitled to relief." Twombly abrogated the Supreme Court's prior statement in Conley v. Gibson, 355 U.S. 41, 45–46, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957), that "a complaint should not be dismissed for failure to state a claim unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief." See Twombly, 550 U.S. at 562–63 ("Conley 's 'no set of facts' language ... is best forgotten as an incomplete, negative gloss on an accepted pleading standard ...."). To withstand a Rule 12(b)(6) motion, a complaint must contain "enough facts to state a claim to relief that is plausible on its face." Twombly, 550 U.S. at 570; see also Elsensohn v. St. Tammany Parish Sheriff's Office, 530 F.3d 368, 372 (5th Cir.2008) (quoting Twombly, 550 U.S. 544, 127 S.Ct. 1955, 167 L.Ed.2d 929). The Court explained that "the pleading standard Rule 8 announces does not require 'detailed factual allegations,' but it demands more than an unadorned, the-defendant-unlawfully-harmed-me accusation." Iqbal, 129 S.Ct. at 1949 (citing Twombly, 550 U.S. at 555). The present complaint contains no factual allegations that would permit this court to find that the elements of FLSA coverage are properly pleaded. Lindgren v. Spears, 2010 WL 5437270, at *2–3 (S.D. Tex. Dec. 27, 2010). Applying the law as summarized in Lindgren, the question before this Court is whether Plaintiff pled facts which could establish individual or enterprise coverage over her based upon any work she allegedly did for GPS, and prior to considering any exemptions. Looking solely to the allegations made by the Plaintiff in the Amended Complaint, it is readily apparent that Plaintiff has provided only conclusory allegations of coverage which are insufficient to state a claim upon which relief can be granted. 3 Indeed, here are her only allegations which relate to either enterprise or individual coverage under the FLSA: 3 GPS notes that, while it does not concede that the FLSA applies—especially in light of the exemptions under the MCA and Jeanna's Act—had Plaintiff pled differently, she likely could have asserted sufficient factual allegations as to establish work amounting to "commerce" under the FLSA as to GPS. However, she did not do so here, and thus— as it is incumbent upon a defendant to cite all known bases for dismissal in a motion such as this—GPS has called the same to the Court's attention in this motion. 8 2 23. During Hernandez's employment with Defendants, she was engaged in the commerce or the production of goods for commerce. 24. During Hernandez's employment with Defendants, the company had employees engage in commerce or in the production of good for commerce or had employees handling, selling, or otherwise working on good or materials that had been moved in or produced for commerce by others. 25. During Hernandez's employment with Defendants, the company had an annual gross volume of sale made or business done of at least $500,000. (Amend. Compl. ¶ 23-25). Not only do these allegations not pertain to any specific Defendant, but they also fail to rise to anything other than a conclusory allegation of coverage. The facts required under the Rule 8 pleading standard, as expressed in Iqbal, simply are not there. Applying the rationale of Lindgren to the case before this Court compels only one conclusion: that these allegations, are solely conclusory, and are therefore insufficient to state a claim upon which relief can be granted. Accordingly, all claims against GPS under the FLSA must be dismissed based upon the Plaintiff's failure to plead facts sufficient to show that the FLSA applies. III. GPS adopts by reference certain grounds and relief requested in PTS's recently filed motion to dismiss. GPS is aware that PTS has filed a motion to dismiss and to transfer venue as Docket Entry No. 40. Several of the points raised in that motion are equally applicable to GPS as to PTS, and thus GPS adopts the following positions laid out by PTS, with additional clarification and commentary identified below as needed: A. The FMCSA and Jeanna's Act. Should the Court find that Plaintiff has alleged sufficient facts to otherwise show that she worked in interstate commerce, and that individual or enterprise FLSA coverage could be triggered, then GPS would rely upon the argument laid out by PTS regarding the FLSA exemptions 9 2 contained in the Motor Carrier Act and Jeanna's Act. Just like PTS, GPS also was a registered motor carrier, being assigned number MC-953557, which the Court can take judicial notice of. Thus, if Plaintiff has alleged sufficient facts to show that she worked in interstate commerce (though those are not the facts set out in the Amended Complaint), then both the FMCSA and Jeanna's Act would mandate dismissal of her claims for the reasons set out by PTS, which are joined by GPS herein. B. Dismissal of all claims for "recordkeeping." As pointed out in PTS's motion to dismiss at pages sixteen and seventeen of that filing, there is no private right of action for recordkeeping violations and—even if there were—the Plaintiff's Amended Complaint fails to contain anything more than conclusory allegations related to any supposed failure to keep employment records. That logic is equally applicable to the claims against GPS, and he accordingly relies upon the same as grounds for the dismissal of Count Two of the Amended Complaint as to him. C. Dismissal of all Putative Collective Action Claims. As discussed in PTS's motion to dismiss at pages seventeen through nineteen, and as adopted here, the proposed collective action claims contained in the Amended Complaint are subject to dismissal, to the extent they are currently in existence, because the proposed class gives a complete lack of notice to any Defendant—including GPS—as to who the potential claimants are. Thus, any such extant claims must be dismissed based upon the logic espoused by PTS in its motion. As an additional ground, GPS notes that the Arbitration Agreement signed by the Plaintiff and attached as Exhibit 1 to the Declaration of Ryan Whitten on Behalf of Global Prisoner Services, LLC contains a waiver of the right to proceed in a class or collective action in an FLSA 10 2 lawsuit. (See, Whitten Dec. at Exhibit 1). This Court, via Senior Judge Junell, has previously found that such a waiver is enforceable, and requires the dismissal of all collective action claims. Serrano v. Globe Energy Serv., LLC, 2016 WL 7616716, at *6 (W.D. Tex. Mar. 3, 2016) ("Plaintiff's ability to serve as a representative party in a collective action for others similarly situated does not affect Plaintiff's substantive rights. Therefore, the Court will enforce the waiver of Plaintiff's procedural right to seek "collective or representative treatment of any claim," and dismiss the collective action allegations."). Accordingly, the same are subject to dismissal in this case at this time. D. Dismissal under Fed. R. Civ. P. 12(b)(3) for Improper Venue. As indicated in PTS's motion to dismiss, venue is improper in this Court due to GPS's then-location in Williamson County, Texas. GPS agrees, and adopts PTS's position that this case should be dismissed for improper venue, and relies upon the same. CONCLUSION For the reasons described herein, the existing default should be set aside, and GPS should be dismissed from this case under Fed. R. Civ. P. 12(b)(6) and 12(b)(3). S/ Sean C. Wlodarczyk Sean C. Wlodarczyk (TN Bar No. 30410) Admitted Pro Hac Vice for this Matter. CORNELIUS & COLLINS, LLP Suite 1500, Nashville City Center 511 Union Street P. O. Box 190695 Nashville, Tennessee 37219 (615) 244-1440 11 2 CERTIFICATE OF SERVICE I do hereby certify that a true and exact copy of the foregoing has been served by the PACER/ECF system on this 6th day of November, 2019 Melissa Moore (24013189) Mary E. Buckley (24101571) Curt Hesse (24065414) Gregory J. Northen, (Ark Bar #20111891) Moore & Associates Cross, Gunter, Witherspoon & Galchus, PC Lyric Centre 500 President Clinton Avenue, Suite 200 440 Louisiana Street, Suite 675 Little Rock, AR 72201 Houston, TX 77002 S/ Sean C. Wlodarczyk Sean C. Wlodarczyk 12