Crumbling v. Miyabi Murrells Inlet, LLC
Crumbling v. Miyabi Murrells Inlet, LLC
Opinion of the Court
ORDER
This matter is before the Court on several motions to dismiss filed by various Defendants (ECF Nos. 36, 39, 40, 61, 68, 70, 74).
BACKGROUND
On December 10, 2015, Plaintiffs commenced this action on behalf of themselves and all others similarly situated, seeking unpaid minimum wages and unpaid overtime wages pursuant to the collective action provision of the Fair Labor Standards Act (“FLSA”), 29 U.S.C. § 216(b). Plaintiffs also seek relief for unauthorized deductions 'from their wages pursuant to the South Carolina Payment of Wages Act (“SCPWA”), S.C. Code Ann. § 41-10-10, et seq. Plaintiffs are former servers at several Miyabi restaurant locations in South Carolina, North Carolina, and Georgia.'
Plaintiffs primarily allege that Defendants used tip pools that violated the FLSA. Specifically, Plaintiffs assert that Defendants paid some of their employees an hourly wage lower than the statutory minimum wage using the FLSA’s Tip Credit provision, 29 U.S..C. § ,203(m). Plaintiffs further assert that while Defendants were paying less than the statutory minimum wage using the Tip Credit provision, they required servers to contribute a portion of their tips to tip pools, to compensate other employees. Finally, Plaintiffs allege that some of the employees who received money from the tip pools were non-tipped employees who did not qualify to share in the tip pools because they did not customarily and ordinarily receive tips. Because these non-tipped employees did not customarily and ordinarily receive tips, as required by the Tip Credit provision, Plaintiffs allege that the tip pools they and the other potential class members shared with the non-tipped employees violated the FLSA.
LEGAL STANDARD
Defendants’ standing argument implicates this Court’s subject matter jurisdiction and is governed by Rule 12(b)(1). Usually, “questions of subject matter jurisdiction must be decided ‘first, because they concern the court’s very power to hear the case.’” Roman v. Guapos III, Inc., 970 F.Supp.2d 407, 411 (D.Md. 2013) (quoting Owens-Ill., Inc. v. Meade, 186 F.3d 435, 442 n. 4 (4th Cir. 1999)). The plaintiff bears the burdén of proof on questions of subject matter jurisdiction. See Evans v. B.F. Perkins Co., 166 F.3d 642, 647 (4th Cir. 1999). “When a defendant' challenges subject matter jurisdiction pursuant to Rule 12(b)(1), ‘the district court is to regard the pleadings as mere evidence on the issue, and may consider evidence outside the pleadings without converting the proceeding to one for summary judgment.’” Id. (quoting Richmond, Fredericksburg & Potomac R.R. Co. v. United States, 945 F.2d 765, 768 (4th Cir. 1991)). “The district court should grant, the Rule 12(b)(1) motion to dismiss ‘only if the material jurisdictional facts are not in dispute and the moving party is entitled to prevail as a matter of law.’ ” Id. (quoting Richmond, Fredericksburg & Potomac R.R. Co., 945 F.2d at 768).
DISCUSSION
Although the Court has concerns about whether Plaintiffs’ second and third amended complaints were filed in compliance with Rule 15, the Court may look beyond the pleadings in its evaluation of standing. Accordingly, without deciding whether those amended complaints are valid, the Court will consider the allegations contained therein. In their various motions to dismiss,' Defendants first contend that the Greenville, Fayetteville, and Augusta Miyabi locations should be dismissed because no plaintiff alleges that he or she worked at those locations. Second, Defendants question whether or not Plaintiffs have standing to bring this entire action in its current form. Because standing is a threshold question, the Court will address it first. See Roman, 970 F.Supp.2d at 411.
Standing
“As the party invoking federal jurisdiction, Plaintiffs bear the burden of establishing standing under Article III of the Constitution.” Roman, 970 F.Supp.2d at 412 (quoting McBurney v. Cucinelli, 616 F.3d 393, 410 (4th Cir. 2010)). As explained by the Fourth Circuit:
The irreducible constitutional minimum of standing requires (1) an injury in fact—a harm suffered by the plaintiff that is concrete and actual or imminent, not conjectural or hypothetical; (2) causation—a fairly traceable connection between the plaintiffs injury and the complained-of conduct of the defendant; and (3) redressability—a likelihood that the requested relief will redress the alleged injury.
McBurney, 616 F.3d at 402 (quoting Steel Co. v. Citizens for a Better Env’t, 523 U.S. 83, 102-03, 118 S.Ct. 1003, 140 L.Ed.2d 210 (1998)) (internal quotation marks omitted). Here, Plaintiffs have clearly alleged a sufficient injury-in-fact: the failure to properly be compensated for hours worked. However, whether those injuries may be traced to, or redressed by, the various Defendants remains in question.
Defendants make two separate standing arguments. First, Defendants assert that Plaintiffs lack standing to maintain any claims against the Miyabi restaurant entities with which Plaintiffs had no employer-employee relationship. As discussed above, standing requires both traceability and redressability. See McBurney, 616 F.3d at 402. Thus, Plaintiffs must trace their injury to the allegedly wrongful conduct of the Defendants and must be able to recover from those Defendants in the event of a favorable decision. In order for Defendants to be liable under the FLSA, they must have an employer-employee relationship with Plaintiffs. Roman, 970 F.Supp.2d at 412. Accordingly, “Plaintiffs’ injuries are only traceable to, and redressable by, those who employed them.” Id. Therefore, the Court must conduct an employer analysis to determine whether Plaintiffs may trace their injuries to each Defendant.
, An employer under the FLSA is “any person acting directly or indirectly in the interest of an employer in relation to an employee.” ■ 29 U.S.C. § 203(d). Under
Where the employee performs work which simultaneously benefits two or more employers, or works for two or more employers at different times during the workweek, a joint employment relationship generally will be considered to exist in situations such as:
(1) Where there is an arrangement between the employers to share the employee’s services, as, for example, to interchange employees;
(2) Where one employer is acting directly or indirectly in the interest of the other employer (or employers) in relation to the employee; or
(3) Where the employers are not completely disassociated with respect to the employment of a particular employee ' and may be deemed to share control of the employee, directly or indirectly, by reason of the fact that one employer controls, is controlled by, or ■ is under common control with the other employer.
29 C.F.R. § 791.2(b). If the employer-employee relationship does not match one of these examples, “courts are to consider the ‘economic realities’ of the relationship between the employee and the putative employer.” Roman, 970 F.Supp.2d at 413 (citing Schultz, 466 F.3d at 304). To examine the economic realities of the relationship, the Fourth Circuit has used the factors discussed in Bonnette v. California Health & Welfare Agency, 704 F.2d 1466 (9th Cir. 1983), and Zheng v. Liberty Apparel Co., 355 F.3d 61 (2d Cir. 2003). Those factors include the “(1) authority to hire and fire employees; (2) authority to supervise and control work schedules or employment conditions; (3) authority to determine the rate and method of payment; and (4) maintenance of employment records.” Roman, 970 F.Supp.2d at 413. However, “ ‘the determination of joint-employment must be based upon the circumstances of the whole activity.’ ” Id. (quoting Quinteros v. Sparkle Cleaning, Inc., 532 F.Supp.2d 762, 775 (D.Md. 2008)).
Defendants do not dispute that the Miyabi restaurant entities in this case are employers of each of the employees who worked for their specific restaurant. For example, Defendants do not contest that Miyabi Murrell’s Inlet is the employer of Krista Crumbling and the other employees that worked there. However, no plaintiffs have alleged that they were employees of the Miyabi restaurants in Fay-etteville and Greenville. Although there may be potential plaintiffs who worked for the Fayetteville and Greenville restaurants, Plaintiffs are not permitted to bring suit against those Miyabi entities “based on the composition of a future collective.” Roman, 970 F.Supp.2d at 416. In Roman, the plaintiffs brought suit against five locations of a restaurant chain, each of which was a separate legal entity. However, the plaintiffs had only worked in one of the five restaurants. Id. at 414. Accordingly, the court in Roman dismissed the other four locations from the suit. Id. at 412. In dismissing those entities, the court rejected. the plaintiffs’ arguments that employees of the other locations would likely become plaintiffs once the case was certified as a collective action. A future collective, the court concluded, is insufficient to “satisfy the requirement that Plaintiffs currently demonstrate standing against all defendants.” Id.; see also Pashby v. Delia, 709 F.3d 307, 316 (4th Cir. 2013) (“When the . case is a class action lawsuit, the named class representatives ‘must allege and show that they personally have been
Second, Defendants assert that Plaintiffs lack standing because each named plaintiff does not satisfy the requirements of standing as to each Defendant. Here, because each named plaintiff did not work for each defendant, Defendants contend that the named plaintiffs cannot trace their injuries to those defendants for whom they did not work. Because the -named plaintiffs and opt-ins only worked for one Miyabi restaurant location, Defendants assert that Plaintiffs cannot trace their injuries to any of the other Miyabi restaurant entities.
The bulk of Plaintiffs’ counter-argument on standing can be summarized succinctly as, “it’s not in the treatise.” While standing may not be addressed in the treatise on which Plaintiffs’ counsel relies,
Second, Plaintiffs contend that this Court and the Fourth Circuit had opportunities to raise lack of standing sua sponte in the FLSA collective action context and failed to do so in several cases. See Calderon v. GEICO Gen. Ins. Co., 809 F.3d 111 (4th Cir. 2015);McCoy v. RP, Inc., No. 2:14-cv-3171-PMD, 2015 WL 6157306 (D.S.C. Oct. 19, 2015); Herspold v. King Kong Sushi Bar & Grill, No. 4:14-cv-3418-RBH (D.S.C.), The Court believes that the above-referenced cases are of limited value on the question of standing because it was never raised before the Court. In this case, however, standing has been squarely presented to the Court and Plaintiffs have not shown that the separate Miyabi restaurant entities they have sued are joint employers. . .
For standing purposes, the Court must determine whether each defendant
The Court recognizes the inherent inefficiency in adjudicating Plaintiffs’ claims in various separate lawsuits." However, the Court may not overlook Article III in the interest of efficiency. As a result, all other pending motions (ECF Nos. 65, 69, 71, & 76) are denied as moot.
CONCLUSION
For the foregoing reasons, it is ORDERED that Defendants’ Motions to Dis
AND IT IS SO ORDERED.
. The Court omits a full procedural history section due to the overlapping motions filed
. This does not suggest that Plaintiffs' standing problem would be solved if one of the named or opt-in plaintiffs had worked for more than one Miyabi restaurant. Rather, only that plaintiff would have standing to sue each of his employers.
.' Although the Court’s analysis of this issue is focused on Article Ill’s requirements, the Court notes that Defendants have provided the Court with the relevant pages from a treatise published by Littler Mendelson that does address standing in FLSA collective actions.
. Unlike in Roman, different plaintiffs in this case have potentially legitimate claims against different defendants. Because the Court agrees with Defendants that Plaintiffs lack standing to bring this case in its current form, the Court must determine how, if at all, the case may proceed. Plaintiffs’ counsel requests that the Court permit the current case to proceed solely against Miyabi Murrell’s Inlet, Capital Japan, Inc., and the individual defendants, Koichiro Hirao and Koichiro Maeda. Plaintiffs' counsel further requests that he be permitted to file four additional actions against the other Miyabi restaurant entities and that the Court equitably toll the statute of limitations for those actions. Plaintiffs' counsel’s request is granted in part. The Court will permit the present case to continue against Miyabi Murrell’s Inlet, Capital Japan, Inc., Koichiro Hirao, and Koichiro Maeda, Plaintiffs are also permitted to file their four additional actions, but any consideration of equitable tolling will necessarily take place after those actions have been filed. Finally, Plain- , tiffs’ counsel is hereby put on notice that if he does not move..to amend his complaint in accordance with the rules, the Court will be forced to strike the now-irrelevant material contained in his current Complaint pursuant to Rule 12(f)(1).
Reference
- Full Case Name
- Krista CRUMBLING William Stone Christopher Rich and Anthony Girard, on behalf of themselves and all others similarly situated v. MIYABI MURRELLS INLET, LLC Charleston Miyabi, Inc. Columbia Miyabi, Inc. Fantasy Far East, Inc. United Will Kyoto USA, Inc. Miyabi Greenville, Inc. Fayetteville Miyabi, Inc. Augusta Miyabi, Inc. Savannah Miyabi, Inc. Capital Japan, Inc. d/b/a Miyabi Koichiro Hirao, individually Koichiro Maeda, individually and John Does 1-10, individually
- Cited By
- 14 cases
- Status
- Published