Opinion
22-CV-00076-DC-RCG
07-06-2023
JERMAINE EUGENE, Plaintiff, v. AFD PETROLEUM LTD, et al., Defendants.
REPORT AND RECOMMENDATION OF THE U.S. MAGISTRATE JUDGE
RONALD C. GRIFFIN UNITED STATES MAGISTRATE JUDGE
BEFORE THE COURT is Defendant AFD Holdings Inc.'s (“Defendant AFD Holdings”) Motion to Dismiss. (Doc. 27). This case is before the undersigned through an Order pursuant to 28 U.S.C. § 636 and Appendix C of the Local Court Rules for the Assignment of Duties to United States Magistrate Judges. After due consideration, the undersigned RECOMMENDS that Defendant's Motion to Dismiss be GRANTED. (Doc. 27).
I. Background
On April 1, 2022, Plaintiff Jermaine Eugene (“Plaintiff”) filed his Original Complaint. (Doc. 1). After Defendant AFD Petroleum Ltd. filed its first Motion to Dismiss on June 10, 2022 (Doc. 3), Plaintiff filed his First Amended Complaint (“FAC”) (Doc. 8), alleging that Defendants AFD Petroleum Ltd., AFD Petroleum (Texas) Inc. (“Defendant AFD Texas”), Alaska Fuel Distributors Inc., and AFD Holdings (collectively, “Defendants”) violated the Civil Rights Act of 1866, 42 U.S.C. § 1981, et seq. Id. Plaintiff alleges: 1) employment discrimination on the basis of race; 2) hostile work environment; and 3) retaliation. Id. at 7-8. Plaintiff seeks to recover back and front pay, compensatory damages, punitive damages, pre- and post-judgment interest, and attorneys' fees and costs. Id. at 9.
Plaintiff alleges that Defendants, functioning as an integrated enterprise and joint employers, offer “a variety of supplies and support to various industries including, but not limited to, independently sourced bulk fuel, heavy-duty lubricants, grease, and fluids; efficient, state-of-the[-]art delivery systems; on-site fuel and oil tank storage systems; accurate online satellite tank level monitoring; real-time billing and reporting; technical support; and project management.” Id. at 3. Plaintiff worked at the Midland, Texas facility from approximately June 2017 until April 2018. (Doc. 8 at 3, 8). He would “either be assigned work shifts at Defendants' Midland Facility or be assigned to work shifts at customer job sites throughout the states of Texas and Oklahoma.” Id. at 3.
Plaintiff claims that, throughout his employment, he experienced “an environment of pervasive discrimination.” Id. According to the FAC, Plaintiff's “non-Black co-workers and managers frequently use[d] racial slurs and derogatory language,” creating a hostile work environment. Id. at 3-4. Further, Plaintiff asserts that all management personnel at the Midland facility were non-Black and that they “assigned significantly more dangerous or difficult labor assignments to Black employees compared to Hispanic employees.” Id. at 5. Finally, Plaintiff contends that, in or around March 2018, he reported such behavior to the Human Resources Department. (Doc. 8 at 6). Then, in or around April 2018, Plaintiff claims that “his work shift assignments [were] dramatically reduced” and that it eventually “became impossible for Plaintiff to earn a living wage because Defendants' non-Black management at the Midland Facility refused to assign more work for Plaintiff,” resulting in his constructive discharge. Id. at 6-7.
On November 28, 2022, Defendant AFD Holdings filed its Motion to Dismiss. (Doc. 27). Plaintiff then filed his Response on December 12, 2022. (Doc. 32). On December 19, 2022, Defendant AFD Holdings filed its Reply. (Doc. 33). Consequently, this matter is ripe for disposition.
II. Legal Standard
A. Motion to Dismiss for Lack of Personal Jurisdiction
Under Federal Rule of Civil Procedure 12(b)(2), a court must dismiss a claim if it finds a lack of personal jurisdiction. Once a defendant has asserted such an argument, “the burden shifts to the plaintiff to establish that in personam jurisdiction exists.” Palmer v. Idalia Llorens Collection Agency, Inc., 434 F.Supp.3d 462, 466-67 (E.D. Tex. 2020) (citing Bullion v. Gillespie, 895 F.2d 213, 217 (5th Cir. 1990)). “When a court rules on the issue without a full evidentiary hearing, a plaintiff need only make a prima facie showing of jurisdiction.” Harding v. Alaska Fuel Distribs., Inc., No. MO:17-CV-00008-RAJ, 2017 WL 7921202, at *1 (W.D. Tex. June 29, 2017) (citing Wilson v. Belin, 20 F.3d 644, 648 (5th Cir. 1994)). Additionally, “allegations in the plaintiff's complaint are taken as true, except to the extent that they are contradicted by the defendant” and “[a]ny material and genuine, conflicting facts are resolved in favor of the plaintiff for the purpose of determining whether a prima facie case exists.” Palmer, 434 F.Supp.3d at 467 (citing Alpine View Co. v. Atlas Copco AB, 205 F.3d 208, 215 (5th Cir. 2000)).
There are two requirements for a court to exercise personal jurisdiction over a nonresident defendant: “(1) the long-arm statute of the forum state creates personal jurisdiction over the defendant; and (2) the exercise of personal jurisdiction is consistent with the due process guarantees of the United States Constitution.” Revell v. Lidov, 317 F.3d 467, 469 (5th Cir. 2002). Relevant here is Texas's long-arm statute, which “is coextensive with the federal constitutional limits of due process.” Palmer, 434 F.Supp.3d at 467 (citing Stroman Realty, Inc. v. Wercinski, 513 F.3d 476, 482 (5th Cir. 2008); Religious Tech. Ctr. v. Liebreich, 339 F.3d 369, 373 (5th Cir. 2003)). Thus, the primary inquiry is whether exercising personal jurisdiction over Defendant AFD Holdings is consistent with the Due Process Clause.
“The Texas long-arm statue states: In addition to other acts that may constitute doing business, a nonresident does business in this state if the nonresident: (1) Contracts by mail or otherwise with a Texas resident and either party is to perform the contract in whole or in part of this state; [or] (2) Commits a tort in whole or in part in this state.” Palmer, 434 F.Supp.3d at 467.
In general, the Due Process Clause requires that the defendant have “meaningful ‘contacts, ties, or relations' with the forum state” before a court may exercise personal jurisdiction over a nonresident defendant. Palmer, 434 F.Supp.3d at 468 (quoting Int'l Shoe Co. v. Wash., 326 U.S. 310, 319 (1945)). Furthermore, personal jurisdiction may be general, where the defendant has “continuous and systematic general business contacts” with the forum, or specific, where a suit “aris[es] out of or relate[s] to the defendant's contacts with the forum.” Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 414-16 (1984). For a court to possess specific jurisdiction, a defendant must “have certain minimum contacts with [the forum state] such that the maintenance of the suit does not offend ‘traditional notions of fair play and substantial justice.'” Int'l Shoe, 326 U.S. at 316 (quoting Milliken v. Meyer, 311 U.S. 457, 463 (1940)).
The Fifth Circuit determines specific personal jurisdiction using a three-step analysis:
(1) Whether the defendant . . . purposefully directed its activities toward the forum state or purposely availed itself of the privileges of conducting activities there; (2) Whether the plaintiff's cause of action arises out of or results from the defendant's forum-related contacts; and (3) Whether the exercise of personal jurisdiction is fair and reasonable.Palmer, 434 F.Supp.3d at 468 (citing Stroman Realty, 513 F.3d at 484). Furthermore, the nonresident party must have “reasonably anticipat[ed] being haled into court.” World-Wide Volkswagen Corp. v. Woodson (Volkswagen I), 444 U.S. 286, 297 (1980).
B. Motion to Dismiss for Failure to State a Claim
Federal Rule of Civil Procedure 12(b)(6) authorizes dismissal of a complaint for “failure to state a claim upon which relief can be granted.” When considering a Rule 12(b)(6) motion to dismiss, a court must “accept the complaint's well-pleaded facts as true and view them in the light most favorable to the plaintiff.” Johnson v. Johnson, 385 F.3d 503, 529 (5th Cir. 2004). Federal Rule of Civil Procedure 8 requires that a pleading contain “a short and plain statement of the claim showing that the pleader is entitled to relief.” Fed.R.Civ.P. 8(a)(2). Thus, to survive a Rule 12(b)(6) motion to dismiss, the plaintiff must plead “enough facts to state a claim to relief that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (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.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). A complaint need not include detailed facts to survive a Rule 12(b)(6) motion to dismiss. See Twombly, 550 U.S. at 555-56. However, a plaintiff must do more than recite the formulaic elements of a cause of action. See id. at 556-57. Additionally, the Court is not bound to accept as true a legal conclusion couched as a factual allegation in the complaint. See Iqbal, 556 U.S. at 678. Thus, although all reasonable inferences will be resolved in favor of the plaintiff, the plaintiff must plead “specific facts, not mere conclusory allegations.” Tuchman v. DSC Commc'ns Corp., 14 F.3d 1061, 1067 (5th Cir. 1994).
III. Discussion
Defendant AFD Holdings argues that, because it is a Canadian holding company with its headquarters and principal place of business in Canada, it is not subject to this Court's general jurisdiction. (Doc. 27 at 8). Defendant AFD Holdings also asserts that it is not subject to the Court's specific jurisdiction because “Plaintiff's Amended Complaint does not make one single specific allegation of any actionable conduct by Defendant AFD Holdings that could give rise to specific jurisdiction over AFD Holdings.” Id. at 11. Further, Defendant AFD Holdings argues that it is merely a holding company with no employees and thus could not have been Plaintiff's employer. Id. at 3-5. Lastly, Defendant AFD Holdings argues Plaintiff failed to plead facts sufficient to show it was his joint employer or part of an integrated enterprise. Id. at 15. In response, Plaintiff argues that he did establish a prima facie case of specific jurisdiction as to Defendant AFD Holdings because Defendants, together, form an integrated enterprise. (Doc. 32). Plaintiff also maintains he sufficiently pleaded joint employer status as to all Defendants under both the integrated enterprise and economic realities tests. Id. at 15-20.
Because Plaintiff does not dispute Defendant AFD Holdings' assertion that this Court does not possess general jurisdiction, the Court will treat the argument as waived and proceed with the specific jurisdiction analysis.
“Specific jurisdiction is appropriate only where the defendant ‘purposefully availed itself of the privilege of conducting activities in-state, thereby invoking the benefits and protections of the forum state's laws,' though it ‘may arise incident to the commission of a single act directed at the forum.'” Fed. Trade Comm. v. Educare Centre Servs., Inc., 414 F.Supp.3d 960, 968 (W.D. Tex. 2019) (quoting Herman v. Cataphora, Inc., 730 F.3d 460, 464 (5th Cir. 2013)). The first step in determining whether specific jurisdiction exists requires the court to inquire “[w]hether the defendant . . . purposefully directed its activities toward the forum state or purposely availed itself of the privileges of conducting activities there.” Palmer, 434 F.Supp.3d at 468. “Even a single contact can support specific jurisdiction if it creates a ‘substantial connection' with the forum.” Clay v. Palfinger USA, LLC, A-20-CV-724-LY, 2021 WL 430685, at *5 (W.D. Tex. Feb. 8, 2021), report and recommendation adopted, 2021 WL 8053491 (W.D. Tex. Feb. 26, 2021) (citing Burger King Corp. v. Rudzewicz, 471 U.S. 462, 475 n.18 (1985)). The second step requires the court to ask “[w]hether the plaintiff's cause of action arises out of or results from the defendant's forum-related contacts.” Palmer, 434 F.Supp.3d at 468. Finally, the court must determine “[w]hether the exercise of personal jurisdiction is fair and reasonable.” Id.
Defendant AFD Holdings asserts it “had no material purposeful contacts with Texas during the time that Plaintiff was employed by [Defendant] AFD Texas” and that Plaintiff's causes of action “arise from . . . a failure by management at the facility,” not Defendant AFD Holdings. (Doc. 27 at 10). To support its arguments, Defendant AFD Holdings attached the declaration of Richard Loewen, Defendant AFD Petroleum Ltd.'s Director of Organization Improvement & Quality Assurance. (See Doc. 27-1). Mr. Loewen stated that Defendant AFD Holdings never employed Plaintiff or the management personnel complained of, as it has no employees, nor has it been involved with Defendant AFD Texas's day-to-day management. Id. at 3. Further, according to Mr. Loewen, “[Defendant] AFD Holdings owns 100% of Defendant AFD Petroleum Ltd., and is itself wholly owned by a Canadian corporation not a party here. [Defendant] AFD Holdings does not do business in Texas, and never has.” Id.
“The court may consider the contents of the record, including affidavits or other recognized methods of discovery, in deciding whether to exercise specific jurisdiction.” ATX Innovation, Inc. v. Velocity Mobile Ltd, 1-15-CV-895 RP, 2016 WL 918052, at *2 (W.D. Tex. Mar. 8, 2016) (citing Stuart v. Spademan, 772 F.2d 1185, 1192 (5th Cir. 1985)).
Defendant AFD Holdings also argues that it is not an integrated enterprise or joint employer. (Doc. 27 at 12). It reasons that there is no parent-subsidiary relationship sufficient to warrant the assertion of specific jurisdiction because Defendant AFD Holdings is not the direct parent company of Defendant AFD Texas. Id. Rather, “[Defendant] AFD Holdings owns 100% of Defendant AFD Petroleum Ltd., and is itself wholly owned by a Canadian corporation not a party here.” (Doc. 27-1 at 3). Defendant AFD Holdings again relies on Mr. Loewen's declaration to support its assertions, which include: Defendant AFD Holdings owns no stock in Defendant AFD Texas; does not have a human resources department whatsoever; does not engage in business operations; has a separate headquarters from Defendant AFD Texas; and maintains separate accounting records from Defendant AFD Texas. Id. at 12-14 (citing Doc. 27-1).
Plaintiff responds that the exhibits found in his Appendix in Support of Plaintiff's Response to Defendant Alaska Fuel Distributors Inc.'s Motion to Dismiss Plaintiff's First Amended Complaint (Doc. 30) show Defendant AFD Holdings exercised high-level operational oversight of Defendant AFD Texas's managerial team and that Defendant AFD Holdings “played an active role in the day-to-day operations at the Integrated Defendants' facility in Midland, Texas” (Doc. 32 at 12). The first piece of evidence is an email between Zarina Castelo, an employee in Defendant AFD Texas's human resources department, and Misty Haines, an employee of Defendant AFD Petroleum Ltd.'s human resources department, discussing new hire packets. (Doc. 30 at 2). The second piece of evidence is an email between Ms. Haines and Astrid Eve, who appears to be an AFD Petroleum Ltd. employee, discussing Defendant AFD Petroleum Ltd.'s roll regarding payroll and benefits for Defendants AFD Texas and Alaska Fuel Distributors Inc. Id. at 3. Finally, Plaintiff relies upon an organizational chart to support his contention that Defendants worked as an integrated enterprise “underneath the same Chief Executive Officer, and at the same shared headquarters.” (Doc. 32 at 12) (citing Doc. 30 at 4). According to Plaintiff, this evidence shows Defendant AFD Holdings purposely directed its activities towards Texas and that Plaintiff's causes of action were a result of Defendant AFD Holdings's active role in the operations at the Midland, Texas facility. Id.
The undersigned finds Plaintiff has not provided prima facie evidence that Defendant AFD Holdings is subject to this Court's specific personal jurisdiction. In his Complaint, Plaintiff makes general allegations that Defendants, including Defendant AFD Holdings, operated as Plaintiff's joint employer. (Doc. 8 at 2). However, neither of the emails Plaintiff provided reference Defendant AFD Holdings. (See Doc. 30 at 2-3). Additionally, the organizational chart does not show that Defendant AFD Holdings was involved with Defendant AFD Texas's operations whatsoever; the attached chart is simply a visual aid illustrating the associations between various companies. Id. at 4. Defendant AFD Holdings, on the other hand, provided evidence disputing Plaintiff's claim that it was involved in “[Defendant] AFD Texas's day-today management of its employees or their work activities.” (Doc. 27-1 at 3). It also maintains that it does not do business in Texas, has no employees-in Texas or elsewhere-of its own, did not hire Plaintiff, does not share a direct parent corporation with Defendant AFD Texas, does not maintain a human resources department, and does not directly own stock in Defendant AFD Texas. Id. at 3-4. Based on the evidence above, even when viewed in a light most favorable to Plaintiff, his allegations do not show Defendant AFD Holdings purposefully directed any activities toward Texas, nor do Plaintiff's claims arise out of Defendant AFD Holdings's apparent non-involvement with management personnel at the Midland, Texas facility.
1. Joint Employer/Integrated Enterprise Theory
Plaintiff also makes the argument that Defendant AFD Holdings is subject to this Court's specific jurisdiction based on Plaintiff's assertion of the joint employer/integrated enterprise theory. Id. Given that the District Court previously construed Plaintiff's integrated enterprise/joint employer argument as an argument for personal jurisdiction based on the alter-ego theory, this Court shall proceed by treating Plaintiff's argument as such. See Eugene v. AFD Petroleum LTD, et al., No. 7:22-CV-00076 (W.D. Tex. Feb. 1, 2023). Generally, according to the alter-ego theory, “so long as a parent and subsidiary maintain separate and distinct corporate entities, the presence of one in a forum state may not be attributed to the other.” Hargrave v. Fibreboard Corp., 710 F.2d 1154, 1160 (5th Cir. 1983) (referencing Cannon Mfg. Co. v. Cudahy Packing Co., 267 U.S. 333 (1925)). Thus, for a court to exercise personal jurisdiction over a foreign parent corporation based purely on the existence of a parent-subsidiary relationship, “[t]he degree of control exercised by the parent must be greater than that normally associated with common ownership and directorship.” Id. (citing Reul v. Sahara Hotel, 372 F.Supp. 995, 998 (S.D. Tex. 1974)).
The Fifth Circuit set out five factors to help courts assess the degree of control exercised by a parent over a subsidiary: “(1) the amount of stock owned by the parent of the subsidiary; (2) whether the entities have separate headquarters, directors, and officers; (3) whether corporate formalities are observed; (4) whether the entities maintain separate accounting systems; and (5) whether the parent exercises complete control over the subsidiary's general policies or daily activities.” Diece-Lisa Indus., Inc. v. Disney Enters., Inc., 943 F.3d 239, 251 (5th Cir. 2011) (quoting Freudensprung v. Offshore Tech. Servs., Inc., 379 F.3d 327, 346 (5th Cir. 2004)).
As stated above, Plaintiff has not pleaded that Defendant AFD Holdings owns any stock in Defendant AFD Texas, that it exercised complete control over Defendant AFD Texas's general policies, or that Defendants maintain a joint accounting system. In fact, Defendant AFD Holdings provided evidence stating that: 1) it owns no stock in Defendant AFD Texas; 2) Defendant AFD Texas is a separate corporate entity; 3) it observes corporate formalities; 4) Defendants AFD Holdings and AFD Texas maintain separate accounting records; and 5) Defendants AFD Holdings and AFD Texas do not share a direct parent corporation. (Doc. 27-1 at 3-4). At most, Plaintiff has pleaded that Defendants AFD Holdings and AFD Texas share headquarters. (Doc. 8 at 2). Thus, the Court concludes that the Hargrave factors do not weigh in Plaintiff's favor, and therefore it cannot exercise specific jurisdiction over Defendant AFD Holdings because Plaintiff did not plead or show that it is an alter ego of Defendant AFD Texas.
The undersigned finds Plaintiff has not made a prima facie case as to specific personal jurisdiction. Therefore, the undersigned RECOMMENDS Defendant AFD Holdings's Motion to Dismiss be GRANTED based on lack of personal jurisdiction. (Doc. 27).
In the interest of thoroughness, the Court addresses Defendant AFD Holdings's arguments pursuant to Rule 12(b)(6). As such, the undersigned's analysis is restricted to Plaintiff's First Amended Complaint and does not consider any evidence attached to the Motion to Dismiss or Plaintiff's Response, as that evidence is relevant to the issue of personal jurisdiction. Furthermore, the parties' references to the attached evidence are limited to arguments regarding personal jurisdiction.
Defendant AFD Holdings argues that Plaintiff failed to plead facts sufficient to demonstrate that each Defendant, individually, was his employer, “instead making sweeping, conclusory allegations that Defendants operated as a joint employer.” (Doc. 27 at 15). Plaintiff responds that he pleaded that Defendants qualified as a joint employer, thus satisfying both the integrated enterprise and economic realities tests. (Doc. 32 at 16-20). Additionally, Plaintiff requests that, should the undersigned find it appropriate to grant Defendant AFD Holdings's Motion to Dismiss pursuant to Rule 12(b)(6), he be given leave to amend. Id. at 20.
The economic realities test is typically employed “for determining employment status under the Fair Labor Standards Act,” not claims arising from § 1981. Johnson v. Houston KP, LLC, 588 F.Supp.3d 738, 743 (S.D. Tex. 2022); see Gray v. Powers, 673 F.3d 352, 355 (5th Cir. 2012) (using the economic realities test to determine whether an employee/employer relationship existed).
“Section 1981 prohibits discrimination on the grounds of race in the making and enforcing of contracts.” Perry v. Pediatric Inpatient Critical Care Servs., P.A., Civil Action No. SA-18-CV-404-XR, 2020 WL 1248263, at *21 (W.D. Tex. Mar. 16, 2020) (citing 42 U.S.C. § 1981(a)). This language includes “the making, performance, modification, and termination of contracts, and the enjoyment of all benefits, privileges, terms, and conditions of the contractual relationship,” which encompasses employment contracts. Id. (citing 42 U.S.C. § 1981(b)). When evaluating whether there was joint employment or an integrated enterprise under § 1981, the Fifth Circuit uses “the Title VII Trevino four-factor test.” Jones v. Tubal-Cain Hydraulic Sols., Inc., No. 4:16-CV-01282, 2017 WL 1177995, at *5 (W.D. Tex. Mar. 30, 2017) (referencing Trevino v. Celanese Corp., 701 F.2d 397 (5th Cir. 1983)); see Johnson v. Crown Enters., Inc., 398 F.3d 339, 343 (5th Cir. 2005). The four factors are: 1) “interrelation of operations”; 2) “centralized control of labor relations”; 3) “common management”; and 4) “common ownership or financial control.” Id. (citing Chaiffetz v. Robertson Rsch. Holding, Ltd., 798 F.2d 731, 735 (5th Cir. 1986)). Courts have deemed the second factor, which “has [been] narrowed to an inquiry of ‘what entity made the final decisions regarding employment matters related to the person claiming discrimination,'” to be the most important. Id.
In his First Amended Complaint, Plaintiff alleges that: 1) Defendants operated as an integrated enterprise and as joint employers; 2) Defendants hired and employed Plaintiff; 3) the management at Defendants' Midland Facility “had the ability to control the assignments for each employee”; and 4) “Defendants jointly operate a single Human Resources department.” (Doc. 8 at 2-6). These statements are conclusory and do not constitute factual allegations. Stuntz v. Lion Elastomers, L.L.C., 2017 WL 11613239, at *6 (E.D. Tex. Sept. 12, 2017) (quoting ABC Arbitrage Plaintiffs Grp. v. Tchuruk, 291 F.3d 336, 348 (5th Cir. 2002)) (“[C]onclusory allegations or legal conclusions masquerading as factual conclusions will not suffice to prevent dismissal ....”). Even though the general allegation that Defendants operated a joint Human Resources department may suggest centralized control of labor relations, there are no specific allegations as to such things as Defendants' making collective decisions regarding employees, maintaining certain joint policies and procedures or records of employees, or possessing common ownership or financial control. See Stuntz, 2017 WL 11613239; Lucas v. BMS Enters., Inc., Civil Action No. 3:09-CV-2159-D, 2010 WL 1371977 (N.D. Tex. Apr. 5, 2010); see also Bass v. UPS Capital Corp., Civil Action No. 08-1288, 2008 WL 4758612, at *4 (E.D. La. Oct. 27, 2008). Although the allegations must be viewed in the light most favorable to Plaintiff, the undersigned is not required to accept mere conclusory allegations such as the ones present here. Tuchman, 14 F.3d at 1067.
Thus, the undersigned finds that, even if it did possess personal jurisdiction over Defendant AFD Holdings, Plaintiff has not pleaded “enough facts to state a claim to relief that is plausible on its face,” viewed in the light most favorable to Plaintiff. Twombly, 550 U.S. at 570. Therefore, because the undersigned has concluded that Plaintiff has not sufficiently pleaded facts showing Defendant AFD Holdings is a joint employer, the undersigned RECOMMENDS Defendant AFD Holdings's Motion to Dismiss be GRANTED. (Doc. 27).
C. Plaintiff's Request to Amend Complaint
Federal Rule of Civil Procedure 15(a)(2) provides “[t]he court should freely give leave when justice so requires.” Although “leave to amend is by no means automatic,” a court should “possess a ‘substantial reason' to deny leave to file an amended complaint.” Lawton v. Osado Water Transfer Co., LLC, No. MO:15-CV-00189-RAJ-DC, 2016 WL 11586133, at *1 (W.D. Tex. Sept. 15, 2016) (citations omitted). Here, the Court does not find leave to amend proper, as the Court concludes it does not possess personal jurisdiction over Defendant AFD Holdings.
IV. Recommendation
Based on the circumstances present in this case, the Court RECOMMENDS Defendant AFD Holdings's Motion to Dismiss be GRANTED and that Plaintiff's claims against Defendant AFD Holdings be DISMISSED. (Doc. 27).
Instructions for Service and Notice of Right to Appeal/Object
In the event that a party has not been served by the Clerk with this Report and Recommendation electronically, pursuant to the CM/ECF procedures of this District, the Clerk is ORDERED to mail such party a copy of this Report and Recommendation by certified mail. Pursuant to 28 U.S.C. § 636(b)(1), any party who desires to object to this report must serve and file written objections within fourteen (14) days after being served with a copy. A party filing objections must specifically identify those findings, conclusions, or recommendations to which objections are being made; the District Judge need not consider frivolous, conclusive, or general objections. Such party shall file the objections with the Clerk of the Court and serve the objections on all other parties. A party's failure to file such objections to the proposed findings, conclusions, and recommendations contained in this report shall bar the party from a de novo determination by the District Judge. Additionally, a party's failure to file written objections to the proposed findings, conclusions, and recommendations contained in this report within fourteen (14) days after being served with a copy shall bar that party, except upon grounds of plain error, from attacking on appeal the unobjected-to proposed factual findings and legal conclusions accepted by the District Judge. Douglass v. United Servs. Auto. Ass'n, 79 F.3d 1415, 1428-29 (5th Cir. 1996).