Peery v. Nixon Engineering,llc

Western District of Texas, txwd-6:2018-cv-00358

RESPONSE to Motion, filed by Jayme Peery, re {{10}} MOTION to Dismiss (Def.'s Partial Motion to Dismiss 1st Amended Complaint) filed by Defendant Nixon Engineering, LLC

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UNITED STATES DISTRICT COURT WESTERN DISTRICT OF TEXAS WACO DIVISION JAYME PEERY, § Individually and on behalf of all others § similarly situated § Civil Action No. 6:2018-cv-00358-AA § § Plaintiff, § JURY TRIAL DEMANDED § v. § COLLECTIVE ACTION § PURSUANT TO 29 U.S.C. §216(b) NIXON ENGINEERING, LLC, § § CLASS ACTION PURSUANT TO Defendant. § FED. R. CIV. P. 23(b) PLAINTIFF'S RESPONSE TO DEFENDANT'S PARTIAL MOTION TO DISMISS PLAINTIFF'S FIRST AMENDED COMPLAINT TO THE HONORABLE JEFFREY C. MANSKE, MAGISTRATE JUDGE: Plaintiff Jayme Peery, individually and on behalf of all others similarly situated ("Plaintiff" or "Plaintiff and the Putative Class Members"), respectfully files this Response to Defendant Nixon Engineering, LLC's ("Nixon") Partial Motion to Dismiss First Amended Complaint ("Motion") pursuant to Federal Rule of Civil Procedure 12(b)(6). By way of its Motion, Nixon seeks to dismiss Plaintiff's Texas common-law claims brought pursuant to Federal Rule of Civil Procedure 23(b)(3). I. SUMMARY OF RESPONSE Ironically, Plaintiff agrees with Nixon that his Texas common-law claims should be covered by, and therefore preempted by, the Fair Labor Standards Act ("FLSA"), 29 U.S.C. §§ 201–19. Recognizing the divergent authority in the Fifth Circuit on the issue of "gap-time" or "straight-time" claims in an FLSA action, and out of an abundance of caution, Plaintiff has plead his "gap-time" claims as a separate cause of action to ensure that he is able to recover all of his unpaid wages.1 Here, Plaintiff has alleged that he and the Putative Class Members performed work for Nixon while 1 off-the-clock, and without pay. Those hours worked but not paid have been considered by some courts to be Plaintiff's Response to Defendant's Partial Motion to Dismiss Page 1 Nixon has alleged three grounds for the dismissal—of those three, only one provides this Court with a legal non-discretionary basis for dismissal—the preemption argument. Nixon's remaining arguments allege that dismissal is appropriate because (1) the equitable class claims are "fundamentally incompatible" with a collective action pursuant to 29 U.S.C. § 216(b); and (2) this Court should decline to exercise supplemental jurisdiction pursuant to 28 U.S.C. § 1367(c) as the state-law claim will predominate over the FLSA claims. Nixon's preemption argument provides the only ground for dismissal that is properly before this Court pursuant to a 12(b)(6) Motion to Dismiss. Should this Court determine that Plaintiff's state law claims are not preempted—Nixon's Motion to Dismiss should be denied in its entirety. II. ARGUMENT & AUTHORITY A. PLAINTIFF'S TEXAS COMMON-LAW CLAIM SHOULD BE PREEMPTED Plaintiff agrees with Nixon that his Texas common-law claim for quantum meruit should be preempted by the FLSA and asks this Court to enter an order finding that that Plaintiff and the Putative Class Members' claims for their unpaid "straight time" or "gap time" hours are recoverable under the FLSA. Recognizing that there is a split in authority among district courts in the Fifth Circuit—and between the Fourth and Second Circuit Courts of Appeals—Plaintiff brought his Texas common-law claim as a class action to preserve his rights and the rights of the Putative Class Members. While the Fifth Circuit has not addressed "gap-time" or "straight-time" claims, district courts in the Fifth Circuit have come to very differing conclusions as to what claims are covered (and not covered) by the FLSA. Multiple courts have determined that "straight-time" or "gap-time" claims— "gap time" or straight time" hours that fall outside the protections of the FLSA. See Carman v. Meritage Homes Corp., 37 F. Supp. 3d 860, 865 (S.D. Tex. 2014) (finding that "gap-time" or "straight time" claims are not recoverable under the FLSA but are instead recoverable pursuant to state law); but see Valcho v. Dallas Cnty. Hosp. Dist., 658 F. Supp. 2d 802, 811 (N.D. Tex. 2009) (recognizing that "gap-time" claims are recoverable under the FLSA in overtime weeks) Plaintiff's Response to Defendant's Partial Motion to Dismiss Page 2 that is, claims for unpaid hours worked, are not recoverable under the FLSA because the statute protects only against overtime and minimum wage violations. See Carman v. Meritage Homes Corp., 37 F. Supp. 3d 860, 865 (S.D. Tex. 2014) (describing a "gap time claim" as one in which an employee has worked over forty (40) hours in a given week but seeks recovery for unpaid work under 40 hours and granting summary judgment on the plaintiff's "gap time" claims because it is not a recognized FLSA claim) (citing Lundy v. Catholic Health Sys. of Long island Inc., 711 F.3d 106, 115 (2d Cir. 2013) (employees that have been paid at least the minimum wage cannot recover under the FLSA for allegedly unpaid hours below the forty-hour threshold, regardless of whether overtime was worked in that week)); see also Serrano v. Progressive Waste Solutions of Tex., Inc., No. 2:17-cv-00100, ECF No. 76, at * 12–13 (S.D. Tex. Dec. 4, 2017) (granting the defendant's motion to dismiss the "gap time" claim and advising that plaintiffs "must look to state employment and contract law").2 Other district courts in the Fifth Circuit, including courts in the Northern District of Texas and the Northern District of Mississippi, have reached the opposite conclusion and "recognize claims for unpaid "straight-time" pay when the employee has worked overtime qualifying hours during that pay period." See Valcho v. Dallas Cnty. Hosp. Dist., 658 F. Supp. 2d 802, 811 (N.D. Tex. 2009); Carmichael v. Monarch Dental Corp., 3:12-cv-706, 2014 WL 1622709, at *2 (N.D. Tex. Mar. 31, 2014) ("thus, gap time claims are only cognizable [under the FLSA] where an employer's failing to pay straight time resulted in its failing to pay overtime correctly or in its failing to pay minimum wage over a given workweek."); Newson v. Carolina Logistics Servs., Inc., No. 2:11-cv-172, 2012 WL 3886127, at *1 (N.D. Miss. Sept. 6, 2012); Green v. Dallas Cnty. Sch., No. 3:04-cv-891P, 2005 WL 1630032, at *3 (N.D. Tex. July 6, 2005). 2 Attached as Exhibit A. Plaintiff's Response to Defendant's Partial Motion to Dismiss Page 3 Plaintiff would ask this Court to follow the lead of its sister courts in Valcho, Carmichael, Green, and Newsom, and hold that Plaintiff and the Putative Class Members are entitled to recover their unpaid straight time and overtime in weeks in which they worked over forty hours per week. See Valcho, 658 F. Supp. 2d at 811; Carmichael, 2014 WL 1622709, at *2; Newson, 2012 WL 3886127, at *1; Green, 2005 WL 1630032, at *3. Alternatively, should this Court determine that Plaintiff's straight-time or gap-time claims are not covered by the FLSA, then the converse must be true—they cannot be preempted by the FLSA. See Newsom, 2012 WL 3886127, at *1 (recognizing that claims not covered by the FLSA are not preempted by it). B. RULE 23 "OPT-OUT" CLASSES ARE COMPATIBLE WITH FLSA "OPT-IN" COLLECTIVE ACTIONS There is no question that the procedural mechanisms controlling a section 216(b) collective action and a Rule 23 class action are different. Compare 29 U.S.C. § 216(b) and FED. R. CIV. P. 23. Those differences, however, do not render them mutually exclusive or otherwise incompatible. [I]n the FLSA context, a plaintiff must affirmatively join the lawsuit or 'opt in,' whereas under Rule 23(b)(3), a claimant must affirmatively 'opt out' of the class action in order to preserve individual claims. The procedures are indeed different, but those differences do not justify remanding plaintiffs' state law claims. The requirement that class members opt into a collective action applies only to claims under the FLSA and does not limit the procedural mechanisms available to employees who bring state law actions. In cases with both FLSA collective action claims and Rule 23 class action claims based on state law, most courts have held that the difference between opt-in and opt-out procedures do not justify remanding the state law claims. Lane v. DirectTV, Inc., 735 F. Supp. 2d 421, 429 (E.D. La. 2010) (emphasis added) (maintaining jurisdiction over both the FLSA collective and state law claims as a Rule 23 class action). In fact, Nixon cited no relevant authority in support of its position that there was a "fundamental, irreconcilable difference" between a Rule 23 class action and a collective action pursuant to section 216(b) such that dismissal of Plaintiff's state-law claim is appropriate. Instead, Nixon cited LaChapelle Plaintiff's Response to Defendant's Partial Motion to Dismiss Page 4 v. Owens-Illinois, Inc., and its progeny, but failed to inform the Court that LaChapelle was procedurally distinct as the plaintiff in that case attempted to assert his claim under the Age Discrimination in Employment Act of 1967 ("ADEA") itself as a Rule 23 class action.3 Here, however, Plaintiff does not seek to bring his FLSA claims for unpaid overtime as a class action. Instead, he seeks to bring only his independent state-law claim(s) for his unpaid "gap time" or "straight-time" as a Rule 23 class action. See Lane, 735 F. Supp. 2d at 429. Should this Court determine that his "straight-time" or "gap-time" claims are protected by the FLSA, Plaintiff would agree that there is no basis for a class action under Rule 23 and that it should be dismissed.4 C. THIS COURT SHOULD EXERCISE SUPPLEMENTAL JURISDICTION OVER THE PENDENT STATE-LAW CLAIM(S) That this Court has jurisdiction over the pending state-law claims is undisputed as the presence of a federal claim brings the entire action within the Court's original jurisdiction. See City of Chicago v. Int'l College of Surgeons, 522 U.S. 156, 166 (1997). Although jurisdiction is appropriate, Nixon has asked this Court to decline to exercise its supplemental jurisdiction. Section 1367(c) provides that a district court may decline to exercise its supplemental jurisdiction if: (1) the claim raises a novel or complex issue of state law; (2) the claim substantially predominates over the claim or claims over which the district court has original jurisdiction; (3) the district court has dismissed all claims over which it has original jurisdiction; or Nixon's reliance on McKnight v. D. Houston, Inc., is equally unavailing. See 756 F. Supp. 2d 794, 808 3 (S.D. Tex. 2010). McKnight, in dicta, merely recognized the procedural difference between a collective and a class action. See id. 4 To the extent that Nixon argues that this Court should dismiss Plaintiff's Rule 23 class action allegations because they "Require an Individualized Inquiry and Therefore Cannot Be Maintained as a Class Action"—that argument is improper at the pleading state. Indeed, that argument would be appropriate opposition to Plaintiff's future motion to certify the class. See Lane, 735 F. Supp. 2d at 439–40 (finding that the defendant's arguments against class certification are premature as "[p]laintiffs have not moved for class certification, and the record is not sufficiently developed for the Court to determine whether class certification would be appropriate"). Plaintiff's Response to Defendant's Partial Motion to Dismiss Page 5 (4) in exceptional circumstances, there are other compelling reasons for declining jurisdiction. 28 U.S.C. § 1367(c). Nixon relies on subsection (2) as the basis to ask this Court to decline to exercise its supplemental jurisdiction. See ECF No. 10, p. 10–13. Namely, Nixon contends that the state-law claims will "substantially predominate" over the FLSA claims. See id. Nixon is incorrect. Should this Court determine that Plaintiff's state-law claims are not preempted by the FLSA, that cannot change the fact that the FLSA and state-law claims in this case are wholly intertwined. The basis of Plaintiff's claims under the FLSA is that he and the Putative Class Members were not paid for all hours worked, thereby causing a miscalculation of their regular rate of pay for overtime purposes. Essentially, because Plaintiff worked hours that were neither counted nor paid, he was owed additional overtime for those hours. As such, Plaintiff and the Putative Class Members cannot prove their FLSA claim without first proving their respective state-law claim—that they worked compensable hours that were neither counted nor paid. Both violations will be established by the same evidence. While the FLSA claim will involve additional evidence pertaining to Nixon's willfulness in violating the FLSA, all other elements will involve significant, if not total, overlap. The state-law claims do not predominate, instead they lay the necessary predicate upon which Plaintiff and the Putative Class Members' overtime claims are based. As such, dismissing Plaintiff's state law claim and creating parallel proceedings in state and federal court would waste judicial and party resources, and would create identical litigation efforts. See Lane, 735 F. Supp. 2d at 427–28 (determining that parallel proceedings would waste judicial and party resources as the claim involved a single wrong and substantially the same facts). Plaintiff's Response to Defendant's Partial Motion to Dismiss Page 6 III. CONCLUSION Both parties agree that the FLSA covers Plaintiff's claims, and therefore preempts his state law claims. Should this Court disagree and find that Plaintiff's state-law claims are not subject to preemption, Plaintiff asserts that Nixon's remaining arguments are improperly brought pursuant to a Motion to Dismiss under Federal Rule of Civil Procedure 12(b)(6) and should be denied. Alternatively, collective and class actions are not incompatible and promote judicial efficiency and this Court should not decline to exercise its supplemental jurisdiction over Plaintiff's state law claims. Date: February 19, 2019 Respectfully submitted, ANDERSON ALEXANDER, PLLC By: /s/ Clif Alexander Clif Alexander Texas Bar No. 24064805 clif@a2xlaw.com Lauren E. Braddy Texas Bar No. 24071993 lauren@a2xlaw.com Alan Clifton Gordon Texas Bar No. 00793838 cgordon@a2xlaw.com Carter T. Hastings Texas Bar No. 24101879 carter@a2xlaw.com 819 N. Upper Broadway Corpus Christi, Texas 78401 Telephone: (361) 452-1279 Facsimile: (361) 452-1284 Attorneys for Plaintiff and the Putative Class Members Plaintiff's Response to Defendant's Partial Motion to Dismiss Page 7 CERTIFICATE OF SERVICE I hereby certify that on February 19, 2019, I electronically filed the foregoing document with the clerk of the court for the U.S. District Court, Western District of Texas, using the electronic case filing system of the court. The electronic case filing system sent a "Notice of Electronic Filing" to the attorneys of record who have consented in writing to accept this Notice as service of this document by electronic means. /s/ Clif Alexander Clif Alexander Plaintiff's Response to Defendant's Partial Motion to Dismiss Page 8