Opinion
CASE NO. 21-24051-CIV-LENARD/LOUIS
2022-02-16
Manuel Rodriguez FERRER, Plaintiff, v. ATLAS PILES, LLC, Hammer Time Builders, Inc., Carbajal Investments 1, Inc., AC Real Estate Investments Inc., Reinaldo Aquit, and Alberto Carbajal, Defendants.
Toussaint Marcus Cummings, Quintairos, Prieto, Wood and Boyer, Miami, FL, Brian Howard Pollock, FairLaw Firm, Coral Gables, FL, for Plaintiff. Vanessa D. Torres, Djebelli Torres PLLC, Coral Gables, FL, for Defendants Hammer Time Builders Inc., Carbajal Investments 1, Inc., AC Real Estate Investments Inc., Alberto Carbajal.
Toussaint Marcus Cummings, Quintairos, Prieto, Wood and Boyer, Miami, FL, Brian Howard Pollock, FairLaw Firm, Coral Gables, FL, for Plaintiff.
Vanessa D. Torres, Djebelli Torres PLLC, Coral Gables, FL, for Defendants Hammer Time Builders Inc., Carbajal Investments 1, Inc., AC Real Estate Investments Inc., Alberto Carbajal.
ORDER DENYING DEFENDANTS HAMMER TIME BUILDERS INC., CARBAJAL INVESTMENTS 1, INC., AC REAL ESTATE INVESTMENTS INC., AND ALBERTO CARBAJAL'S MOTION TO DISMISS PLAINTIFF'S COMPLAINT (D.E. 22)
JOAN A. LENARD, UNITED STATES DISTRICT JUDGE
THIS CAUSE is before the Court on Defendants Hammer Time Builders, Inc., Carbajal Investments 1, Inc., AC Real Estate Investments Inc., and Alberto Carbajal's Motion to Dismiss Plaintiff's Complaint, ("Motion," D.E. 22), filed January 14, 2022. Plaintiff Manuel Rodriguez Ferrer filed a Response on January 28, 2022, ("Response," D.E. 25), to which Defendants did not reply. Upon review of the Motion, Response, and the record, the Court finds as follows.
I. Background
According to the Complaint, "Defendants collectively operated as Plaintiff's ‘employer(s)’ for purposes of the [Fair Labor Standards Act ("FLSA").]" (D.E. 1 ¶ 11.) "Defendants regularly employed two or more employees for the relevant time period that handled goods or materials that travelled through interstate commerce, or used instrumentalities of interstate commerce ...." (Id. ¶ 13.) "Defendants were at all times material engaged in interstate commerce in the course of their installation of foundation piles using bobcats, heavy equipment, machinery, hadn [sic] tools, parts, fluids, adhesives, lubricants, goods, materials, supplies, and equipment that have all moved through interstate commerce." (Id. ¶ 14.) "Defendants also, as part of their services, sell steel and metal piles, goods, materials, and supplies that previously traveled in interstate commerce." (Id. ¶ 15.) "Defendants also engage in interstate commerce in the course of their submission of billings and receipt of payment involving out-of-state payors." (Id. ¶ 16.) "Furthermore, Defendants obtain, solicit, exchange and send funds to and from outside of the State of Florida, regularly and recurrently use telephonic transmissions going outside of the State of Florida to conduct business, and transmit electronic information through computers, the internet, via email, and otherwise outside of the State of Florida in the course of their business." (Id. ¶ 17.) "Defendants’ annual gross revenues derived from this interstate commerce are believed to be in excess of $500,000.00 per year and/or in excess of $125,000 for each fiscal quarter during the preceding three years." (Id. ¶ 18.)
The Complaint further alleges that Plaintiff was an hourly, non-exempt employee of Defendants from about April 2019 until November or December 2020. (Id. ¶¶ 19-20, 23.) "Plaintiff regularly and routinely utilized telephones, cellular telephones, hand tools, lubricants, mechanical parts, and other goods and supplies that moved through interstate commerce." (Id. ¶ 22.) Plaintiff regularly and routinely worked more than 40 hours in a work week. (Id. ¶ 26.) "Defendants failed and refused to pay Plaintiff overtime wages calculated at time and one-half times of Plaintiff's regular hourly rate(s) of pay for all of the hours worked beyond 40 hours in a given workweek." (Id. ¶ 27.)
On November 17, 2021, Plaintiff filed the Complaint alleging, inter alia, overtime wage violations under the Fair Labor Standards Act, 29 U.S.C. § 207, against Defendants Atlas Piles, LLC, Hammer Time Builders Inc., Carbajal Investments 1, Inc., AC Real Estate Investments Inc., Reinaldo Aquit, and Alberto Carbajal. (Id. ¶¶ 11-30.)
The Complaint also alleges claims for civil damages for fraudulent filing of information returns under 26 U.S.C. § 7434 against Atlas Piles LLC and Reinaldo Aquit only. (Compl. ¶¶ 31-44.)
On January 14, 2022, Defendants Hammer Time Builders Inc., Carbajal Investments 1, Inc., AC Real Estate Investments Inc., and Alberto Carbajal (hereafter "Defendants") filed the instant Motion to Dismiss Plaintiff's Complaint for lack of subject matter jurisdiction pursuant to Federal Rule of Civil Procedure 12(b)(1) and (h)(3) and for failure to state a claim pursuant to Rule 12(b)(6). (D.E. 22 at 1.) Alternatively, Defendants ask the Court to convert the Motion to Dismiss into a Motion for Summary Judgment pursuant to Rule 56. (Id. ) In support of summary judgment, Defendants attach to their Motion three affidavits executed by Defendant Alberto Carbajal, (D.E. 22-1, 22-2, 22-3), the 2019 and 2020 tax returns for Defendant Hammer Time Builders Inc., the 2019 tax returns for non-party Carbajal Investments 6, Inc., and the 2019 tax returns for Defendant AC Real Estate Investments, Inc. (D.E. 22-4.) Plaintiff filed a Response, (D.E. 25), to which Defendants did not reply.
II. Legal Standards
a. Rule 12(b)(1) & (h)(3)
Under Rule 12(b)(1), a party may move to dismiss a complaint for lack of subject matter jurisdiction. "If the court determines at any time that it lacks subject-matter jurisdiction, the court must dismiss the action." Fed. R. Civ. P. 12(h)(3).
Attacks on subject matter jurisdiction come in two forms: (1) facial attacks, and (2) factual attacks. Lawrence v. Dunbar, 919 F.2d 1525, 1529 (11th Cir. 1990) (citing Menchaca v. Chrysler Credit Corp., 613 F.2d 507, 511 (5th Cir. 1980) ).
Facial attacks on a complaint "require the court merely to look and see if the plaintiff has sufficiently alleged a basis of subject matter jurisdiction, and the allegations in [plaintiff's] complaint are taken as true for the purposes of the motion." Lawrence v. Dunbar, 919 F.2d 1525, 1529 (11th Cir. 1990). Factual attacks challenge "the existence of subject matter jurisdiction in fact, irrespective of the pleadings, and matters outside the pleadings, such as testimony and affidavits, are considered." Lawrence, 919 F.2d at 1529. This circuit has explained that in a factual attack, the presumption of truthfulness afforded a plaintiff under Federal Rule of Civil Procedure 12(b)(6) does not attach, and the court is free to weigh the evidence, stating:
[in a factual attack upon subject matter jurisdiction] the trial court may proceed as it never could under 12(b)(6) or Fed. R. Civ. P. 56. Because at issue in a factual 12(b)(1) motion is the trial court's jurisdiction—it's very power to hear the case—there is substantial authority that the trial court is free to weigh the evidence and satisfy itself as to the existence of its power to hear the case. In short, no presumptive truthfulness attaches to plaintiff's allegations, and the existence of disputed material facts will not preclude the trial court from evaluating for itself the merits of jurisdictional claims.
Lawrence, 919 F.2d at 1529 (quoting Williamson v. Tucker, 645 F.2d 404, 412–13 (5th Cir. 1981) ).
Scarfo v. Ginsberg, 175 F.3d 957, 960-61 (11th Cir. 1999).
b. Rule 12(b)(6)
Under Federal Rule of Civil Procedure 12(b)(6), a court may dismiss a claim for "failure to state a claim upon which relief can be granted." "To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’ " Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) ). Conclusory statements, assertions or labels will not survive a 12(b)(6) motion to dismiss. Id. "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." Id.; see also Edwards v. Prime, Inc., 602 F.3d 1276, 1291 (11th Cir. 2010) (setting forth the plausibility standard). "Factual allegations must be enough to raise a right to relief above the speculative level[.]" Twombly, 550 U.S. at 555, 127 S.Ct. 1955 (citation omitted). Additionally:
Although it must accept well-pled facts as true, the court is not required to accept a plaintiff's legal conclusions. Ashcroft v. Iqbal, 556 U.S. 662, 129 S. Ct. 1937, 1949, 173 L. Ed. 2d 868 (2009) (noting "the tenet that a court must accept as true all of the allegations contained in a complaint is inapplicable to legal conclusions"). In evaluating the sufficiency of a plaintiff's pleadings, we make reasonable inferences in Plaintiff's favor, "but we are not required to draw plaintiff's inference." Aldana v. Del Monte Fresh Produce, N.A., Inc., 416 F.3d 1242, 1248 (11th Cir. 2005). Similarly, "unwarranted deductions of fact" in a complaint are not admitted as true for the purpose of testing the sufficiency of plaintiff's allegations. Id.; see also Iqbal, 129 S. Ct. at 1951 (stating conclusory allegations are "not entitled to be assumed true").
Sinaltrainal v. Coca-Cola, 578 F.3d 1252, 1260 (11th Cir. 2009), abrogated on other grounds by Mohamad v. Palestinian Auth., 566 U.S. 449, 132 S. Ct. 1702, 1706 n.2, 182 L.Ed.2d 720 (2012). The Eleventh Circuit has endorsed "a ‘two-pronged approach’ in applying these principles: 1) eliminate any allegations in the complaint that are merely legal conclusions; and 2) where there are well-pleaded factual allegations, ‘assume their veracity and then determine whether they plausibly give rise to an entitlement to relief.’ " Am. Dental Ass'n v. Cigna Corp., 605 F.3d 1283, 1290 (11th Cir. 2010) (quoting Iqbal, 556 U.S. at 679, 129 S.Ct. 1937 ).
Pursuant to Rule 12(d), "[i]f, on a motion under Rule 12(b)(6) ... matters outside the pleadings are presented to and not excluded by the court, the motion must be treated as one for summary judgment under Rule 56. All parties must be given a reasonable opportunity to present all the material that is pertinent to the motion."
c. Rule 56
On a motion for summary judgment, the Court is to construe the evidence and factual inferences arising therefrom in the light most favorable to the nonmoving party. Adickes v. S.H. Kress & Co., 398 U.S. 144, 157, 90 S.Ct. 1598, 26 L.Ed.2d 142 (1970). Summary judgment can be entered on a claim only if it is shown "that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a). The Supreme Court has explained the summary judgment standard as follows:
[T]he plain language of [ Rule 56 ] mandates the entry of summary judgment, after adequate time for discovery and upon motion, against a party who fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial. In such a situation, there can be no genuine issue as to any material fact, since a complete failure of proof concerning an essential element of the non-moving party's case necessarily renders all other facts immaterial.
Celotex Corp. v. Catrett, 477 U.S. 317, 322-23, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986) (internal quotation omitted). The trial court's function at this juncture is not "to weigh the evidence and determine the truth of the matter but to determine whether there is a genuine issue for trial." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249-50, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). "An issue of fact is material if it ‘might affect the outcome of the suit under the governing law.’ " W. Grp. Nurseries, Inc. v. Ergas, 167 F.3d 1354, 1360 (11th Cir. 1999) (quoting Anderson, 477 U.S. at 248, 106 S.Ct. 2505 ). "An issue of fact is genuine ‘if the evidence is such that a reasonable jury could return a verdict for the nonmoving party.’ " Id. (quoting Anderson, 477 U.S. at 248, 106 S.Ct. 2505 ).
The party moving for summary judgment "always bears the initial responsibility of informing the district court of the basis for its motion, and identifying those portions of the ‘pleadings, depositions, answers to interrogatories, and admissions on file, together with affidavits, if any,’ which it believes demonstrate the absence of a genuine issue of material fact." Celotex, 477 U.S. at 323, 106 S.Ct. 2548. Once the movant makes this initial demonstration, the burden of production, not persuasion, shifts to the nonmoving party. The nonmoving party must "go beyond the pleadings and by [its] own affidavits, or by the ‘depositions, answers to interrogatories, and admissions on file,’ designate ‘specific facts showing that there is a genuine issue for trial.’ " Id. at 324, 106 S.Ct. 2548 ; see also Fed. R. Civ. P. 56(c). In meeting this burden the nonmoving party "must do more than simply show that there is a metaphysical doubt as to the material facts." Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986). That party must demonstrate that there is a "genuine issue for trial." Id. at 587, 106 S.Ct. 1348. An action is void of a material issue for trial "[w]here the record taken as a whole could not lead a rational trier of fact to find for the nonmoving party." Id.
III. Discussion
Defendants argue that Plaintiff never worked for Defendants, but even if he did, Plaintiff is not eligible for FLSA overtime because he is not an employee "covered" by the FLSA. (Mot. at 10-16.) First, they argue that Plaintiff may not claim "individual coverage" because he was not "engaged in commerce." (Id. at 11.) They argue that the Complaint's allegations that Plaintiff "regularly and routinely utilized telephones, cellular telephones, hand tools, lubricants, mechanical parts, and other goods and supplies that moved through interstate commerce" do not establish individual coverage under the FLSA because "an allegation that goods or tools were originally shipped from outside of Florida, is wholly insufficient to establish individual coverage under FLSA." (Id. at 12 (citing Josendis v. Wall to Wall Residence Repairs, Inc., 662 F.3d 1292, 1316 (11th Cir. 2011) ; Thorne v. All Restoration Servs., Inc., 448 F.3d 1264, 1267 (11th Cir. 2006) ; Joseph v. Nichell's Caribbean Cuisine, Inc., 862 F. Supp. 2d 1309, 1313 (S.D. Fla. 2012) ); see also id. at 13 (citing Pino v. Painted to Perfection Corp., 563 F. Appx 764, 767 (11th Cir. 2014) ; Guzman v. Irmadan, Inc., 322 F. Appx 644, 645 (11th Cir. 2009) ).) They argue that "where an employer is the ‘ultimate consumer" of the goods that have moved in interstate commerce, the journey of those goods through interstate commerce is at an end." (Id. at 14 (citing Thorne, 448 F.3d at 1267 ).)
Second, Defendants argue that Plaintiff may not claim "enterprise coverage" because Defendants "never grossed near $500,000, based on the sworn affidavit and defendant's tax returns, attached as Composite Exhibits A, B, C, and D respectively[.]" (Id. at 15.) Defendants argue that the affidavits and tax returns are sufficient for court to dismiss the case for lack of subject matter jurisdiction, (id. (citing Russell v. Cont'l Rest., Inc., 430 F. Supp. 2d 521, 524 (D. Md. 2006) )), or to grant Defendants summary judgment, (id. (citing Josendis, 662 F.3d at 1317 )). They argue that "there is virtually no discovery that could be obtained by the Plaintiff, in the form of concrete, admissible evidence based on personal knowledge, that would rebut the attached affidavit and filed tax returns. The company's gross sales are so below the $500,000.00 threshold, that further discovery is especially not warranted." (Id. at 15-16.) However, "if the Court is inclined to defer ruling on the instant Motion, until further discovery is exchanged, the Defendants respectfully request that any such discovery be narrowly tailored to the authenticity of the financial documents in Composite Exhibit D, as this is the only issue where further discovery could potentially lead to a dispute of genuine issues of material facts." (Id. at 16.)
Defendants assert that " ‘[t]he issue of whether individual or enterprise coverage is jurisdictional or only a required element of the Plaintiff's claim has not been resolved in this Circuit.’ " (Mot. at 4 n.1 (quoting Rodriguez v. Diego's Rest., Inc., 619 F. Supp. 2d 1345, 1348–52 (S.D. Fla. 2009) ).) They argue that if the Court finds that these issues are not jurisdictional, "then a Rule 56 Summary Judgment Standard should be applied."
Defendants attached to their Motion three affidavits executed by Defendant Alberto Carbajal in which he declares "under penalty of perjury" and "based upon facts and circumstances personally known to" him that the gross revenue of Carbajal Investments 1, Inc., AC Real Estate Investments Inc., and Hammer Time Builders Inc. "never exceeded $500,000.00 in 2019, 2020, or 2021[,]" and the companies’ gross revenue "never exceeded $125,000.00 in any quarter from 2019-2021." (D.E. 22-1 ¶ 5; D.E. 22-2 ¶ 5; D.E. 22-3 ¶ 5.) Defendants attached to the Motion the 2019 tax returns of non-party Carbajal Investments 6, Inc. (D.E. 22-4 at 1-16.) They also attached the 2019 tax returns of AC Real Estate Investments Inc., (id. at 17-49), and the 2019 and 2020 tax returns of Hammer Time Builders Inc., (id. at 50-80). The tax returns for Hammer Time Builders Inc. reflect that it grossed $929,255 in 2019, (id. at 50), and $567,344 in 2020, (id. at 66).
In his Response, Plaintiff initially argues that "an attack on the issues of individual or enterprise coverage is intertwined with the merits of Mr. Rodriguez Ferrer's FLSA claim, and so these arguments are properly raised after the close of discovery." (D.E. 25 at 7 (citing Amazon v. Law Office of Lynnette Ann Ensign, Inc., Civil Action No. 14-60672-Civ-Scola, 2015 WL 11110556, at *1 (S.D. Fla. Jan. 5, 2015) ) (citing Rodriguez v. Diego's Rest., Inc., 619 F. Supp. 2d 1345, 1350 (S.D. Fla. 2009) )); see also id. at 9 (citing Turcios v. Delicias Hispanas Corp., 275 F. App'x 879, 883 (11th Cir. 2008).) As such, he argues that the Court should not convert the Motion to Dismiss into one for summary judgment, (id. at 7-8 (citing Elwadi v. Yassir Alam, LLC, Case No: 2:17-cv-646-FtM-99CM, 2018 WL 582759, at *2 (M.D. Fla. Jan. 29, 2018) ; Bautista v. Fantasia Enters., Inc., Case No. 13-61218-Civ-Brannon, 2013 WL 12124616, *2 (S.D. Fla. July 30, 2013) )), but if the Court does allow the conversion to occur, due process requires that he have the opportunity to conduct discovery regarding the issues raised in the Motion, and an opportunity to present all material pertinent to the motion, (id. at 8 (citing Fed. R. Civ. P. 12(d) ; WSP-TV v. Lee, 842 F.2d 1266, 1269 (11th Cir. 1988) )). Plaintiff further argues that the Court should deny Defendants’ "invitation to convert their Motion into one for summary judgment when they failed to comply with Local Rule 56.1 by not filing a separate Statement of Material Facts." (Id. at 8-9.) He further argues that "Defendants’ decision to challenge these jurisdictional issues in their motion for summary judgment precludes them from including any other issues, due to the prohibition against multiple motions for summary judgment. Local Rule 56.1(e)." (Id. at 9.)
Plaintiff further argues that Defendants have not disputed the sufficiency with which he pled his FLSA claim but rather dispute the facts supporting the claim. (Id. at 8.) He argues that the Court should accept the facts pled as true and deny the Motion. (Id. (citing Botero v. S. Fla. Pain & Rehab. Ctr. Corp., Inc., No. 12-20924-CIV, 2012 WL 3614329, at *1 (S.D. Fla. Aug. 21, 2012) ).) He argues that he "alleged the prima facie case necessary to withstand Defendants’ Motion to Dismiss, which is especially true considering that Defendants never identified what element(s) of his FLSA claim that Mr. Rodriguez Ferrer failed to allege." (Id. at 9.) He argues that he has "alleged both individual and enterprise coverage under the FLSA ...." (Id. at 10.) He argues that the allegation that he "regularly and routinely utilized telephones, cellular telephones, hand tools, lubricants, mechanical parts, and other goods and supplies that moved through interstate commerce" is sufficient to allege individual coverage. (Id. at 10-11 (citing Kuehn v. Kristina Reed, P.A., Case No. 9:19-cv-80607-ROSENBERG/REINHART, 2020 WL 109059, at *5 (S.D. Fla. Jan. 9, 2020) ; Lefevre v. La Cote Basque Winehouse, Inc., CASE NO. 8:15-cv-1428-T-23TBM, 2015 WL 6704107, at *1 (M.D. Fla. Nov. 3, 2015) ).) He attempts to distinguish Thorne and Josendis, the cases on which Defendants rely. (Id. at 11.)
Plaintiff further argues that he sufficiently pled enterprise coverage "by alleging that Defendant employed at least two employees who were handling, selling, or working on goods or materials that traveled in interstate commerce, and had at least $500,000 in gross annual revenues." (Id. at 12 (citing Compl. ¶¶ 13-19)); see also id. at 13 (citing Blake v. Batmasian, 191 F. Supp. 3d 1370, 1374-75 (S.D. Fla. 2016) ; Duarte v. Maldonado Bros., Inc., No. 13–80552–CIV, 2014 WL 6751720, at *2 (S.D. Fla. Dec. 1, 2014) ; Dybyk v. RLF Pizza, Inc., No. 13–81028–CIV, 2014 WL 1153044, at *2 (S.D. Fla. Mar. 17, 2014) ; Centeno v. I & Earthmovers Corp., 970 F. Supp. 2d 1280, 1296 (S.D. Fla. 2013) ); see also id. at 14 (citing Polycarpe v. E&S Landscaping Serv., Inc., 616 F.3d 1217, 1224 (2010) ; Certain v. Van Horst Gen. Contractors, LLC, CASE NO. 20-60395-CIV-DIMITROULEAS, 2020 WL 10618316, at *2 (S.D. Fla. Apr. 10, 2020).) He further argues that he sufficiently alleged that Defendants operated as a joint enterprise to establish enterprise coverage under the FLSA, (id. at 14-15 (citing Domingo v. Midnight Xpress, Inc., Civil Action No. 17-23010-Civ-Scola, 2018 WL 770478, at *2 (S.D. Fla. Jan. 16, 2018) )), and, as such, "all the Defendants gross annual incomes can be combined for purposes of the $500,000 jurisdictional threshold[,]" (id. at 15). He argues that the tax returns Defendants filed in support of their Motion establish that Defendants’ aggregate gross revenues exceeded $500,000 in 2019 and 2020. (Id. at 15-16.) He argues that the Affidavit Alberto Carbajal executed under penalty of perjury stating that Hammer Time Builders Inc. never had gross annual revenues exceeding $500,000 is demonstrably false based on the tax returns which show that Hammer Time Builders Inc. had gross annual revenues of $929,255 in 2019 and $567,344 in 2020. (Id. (citing D.E. 22-4 at 5).) Plaintiff argues that the Court should refer Mr. Carbajal's Affidavit to the United States Attorneys’ Office for consideration of prosecution for felony perjury under 18 U.S.C. §§ 1621 and 1623. (Id. at 16-19 (citing Qantum Commc'ns Corp. v. Star Broad., Inc., 473 F. Supp. 2d 1249, 1269 (S.D. Fla. 2007) ).)
Defendants did not file a Reply.
Initially, the Court must determine whether the FLSA's restrictions on enterprise coverage are jurisdictional. If they are jurisdictional, the Court may treat Defendants’ Motion as a facial attack on subject matter jurisdiction under Rule 12(b)(1) and consider the evidence attached to their Motion. See Lawrence, 919 F.2d at 1529 ("Because at issue in a factual 12(b)(1) motion is the trial court's jurisdiction—its very power to hear the case—there is substantial authority that the trial court is free to weigh the evidence and satisfy itself as to the existence of its power to hear the case. In short, no presumptive truthfulness attaches to plaintiff's allegations, and the existence of disputed material facts will not preclude the trial court from evaluating for itself the merits of jurisdictional claims.") (quoting Williamson, 645 F.2d at 412-13 ). If they are not jurisdictional, the Court must construe the Motion as one under Rule 12(b)(6) and will have to decide whether to convert the Motion to Dismiss into one for summary judgment.
The Eleventh Circuit has apparently not yet decided whether the FLSA's restrictions on enterprise coverage (or individual coverage) are jurisdictional. In Turcios, the Eleventh Circuit declined to address the issue, but observed that the First Circuit has concluded that enterprise coverage is not jurisdictional, based upon the Supreme Court's decision in Arbaugh v. Y & H Corp., 546 U.S. 500, 126 S.Ct. 1235, 163 L.Ed.2d 1097 (2006). 275 F. App'x at 882 n.5 (citing Chao v. Hotel Oasis, Inc., 493 F.3d 26, 33 (1st Cir. 2007) ). In Arbaugh, the Supreme Court explained that "when Congress does not rank a statutory limitation on coverage as jurisdictional, courts should treat the restriction as nonjurisdictional in character." 546 U.S. at 516, 126 S.Ct. 1235. It appears that virtually every reported decision to have addressed the issue has agreed with the First Circuit's decision in Chao and found that under the Supreme Court's reasoning in Arbaugh, enterprise (and individual) coverage under the FLSA is not jurisdictional, but rather is an element of an FLSA claim. See, e.g., Biziko v. Van Horne, 981 F.3d 418, 419 (5th Cir. 2020) ; Gordon v. Gen. Prop. Mgmt. Assocs., Inc., 496 F. Supp. 3d 830, 837 (S.D.N.Y. 2020) ; Gaughan v. Rubenstein, 261 F. Supp. 3d 390, 422 (S.D.N.Y. 2017) ; Guereca v. Cordero, 487 F. Supp. 3d 1138, 1143-44 (D.N.M. 2020) ; Luna-Reyes v. RFI Constr., LLC, 57 F. Supp. 3d 495, 501 (M.D.N.C. 2014) ; Gilbert v. Freshbikes, LLC, 32 F. Supp. 3d 594, 601 (D. Md. 2014) ; Malloy v. Ass'n of State and Territorial Solid Waste Mgmt. Offs., 955 F. Supp. 2d 50, 53-54 (D.D.C. 2013) ; Williams v. Hooah Sec. Servs., LLC, 729 F. Supp. 2d 1011, 1013 (W.D. Tenn. 2010) ; Padilla v. Manlapaz, 643 F. Supp. 2d 298, 302 (E.D.N.Y. 2009) ; Rodriguez, 619 F. Supp. 2d at 1348-49 ; see also Velasquez v. Salsas & Beer Rest., Inc., 735 F. Appx 807, 809 (4th Cir. 2018).
But see Russell v. Cont'l Res., Inc., 430 F. Supp. 2d 521, 524 (D. Md. 2006) (granting motion to dismiss for lack of subject matter jurisdiction because affidavits and tax returns attached to the defendants’ motions showed that they had gross revenues of less than $500,000).
The Court notes that the district court's order in Russell does not cite to the Supreme Court's opinion Arbaugh, which was rendered less than three months prior to the order in Russell. The Court further notes that Russell was issued more than a year before the First Circuit's opinion in Chao, and the Fourth Circuit, in which the District of Maryland sits, has since adopted the reasoning in Chao, albeit in an unpublished opinion. Velasquez, 735 F. Appx at 809.
The Court agrees with these cases and finds that under the Supreme Court's reasoning in Arbaugh, enterprise coverage under the FLSA is not jurisdictional.
This is because the FLSA provisions addressing enterprise coverage contain no language suggesting that the limitation on coverage is jurisdictional. See §§ 207(a)(1), 203(s)(1)(A). And in the absence of such language, the Court must treat enterprise coverage as a substantive ingredient of the plaintiff's claim
rather than a jurisdictional prerequisite to her ability to bring this action.
Malloy, 955 F. Supp. 2d at 53-54. See also Williams, 729 F. Supp. 2d at 1014 (finding that the defendant's challenge to "whether there is individual or enterprise coverage speaks to the merits of the Plaintiffs’ case rather [than] the Court's jurisdiction over it"). As such, Rule 12(b)(1) is not the appropriate procedural vehicle for Defendants’ Motion, and the Motion is properly construed as one under Rule 12(b)(6). Malloy, 955 F. Supp. 2d at 54 (finding that because enterprise coverage is not jurisdictional, "the appropriate procedural vehicle for the defendant's motion is not Rule 12(b)(1)" but rather Rule 12(b)(6) ) (citing Peckmann v. Thompson, 966 F.2d 295, 297 (7th Cir. 1992) ("If a defendant's Rule 12(b)(1) motion is an indirect attack on the merits of the plaintiff's claim, the court may treat the motion as if it were a Rule 12(b)(6) motion to dismiss for failure to state a claim upon which relief can be granted."); Highland Renovation Corp. v. Hanover Ins. Grp., 620 F. Supp. 2d 79, 82 (D.D.C. 2009) (after determining that affirmative defense raised in a 12(b)(1) motion was "substantive" and "not jurisdictional," treating the motion "as one brought under Rule 12(b)(6)")).
Next, the Court declines Defendant's invitation to consider matters outside the pleadings and convert the Motion to Dismiss into one for summary judgment.See Harper v. Lawrence Cnty., Ala., 592 F.3d 1227, 1232 (11th Cir. 2010) ("A judge need not convert a motion to dismiss into a motion for summary judgment as long as he or she does not consider matters outside the pleadings."); Prop. Mgmt. & Invs., Inc. v. Lewis, 752 F.2d 599, 604 (11th Cir. 1985) ("The court has discretion as to whether to accept material beyond the pleading that is offered in conjunction with a 12(b)(6) motion. Ware v. Associated Milk Producers, Inc., 614 F.2d 413, 415 (5th Cir. 1980). However, once the court decides to accept matters outside the pleading, it must convert the motion to dismiss into one for summary judgment."). Therefore, the Court will not consider Mr. Carbajal's Affidavits and the tax returns when considering the Motion to Dismiss, and Defendants are not precluded from filing a motion for summary judgment in the future.See Harper, 592 F.3d at 1232.
The Court also declines, at this time, Plaintiff's invitation to refer Mr. Carbajal's affidavits to the U.S. Attorney's Office for consideration of prosecution for perjury. However, the Court reserves the right to revisit this request.
In Bonner v. City of Prichard, 661 F.2d 1206, 1209 (11th Cir. 1981), the Eleventh Circuit adopted as binding precedent all decisions handed down by the former Fifth Circuit before October 1, 1981.
Pursuant to Local Rule 56.1(e): "Filing and service of multiple motions for partial summary judgment is prohibited, absent prior permission of the Court.... This prohibition ... is not triggered when, as permitted by Fed. R. Civ. P. 12(d), the Court elects to treat a motion filed pursuant to Fed. R. Civ. P. 12(b) or 12(c) as a summary judgment motion." Here, the Court is electing to not treat the Motion to Dismiss as one for summary judgment, so any motion for summary judgment Defendants may file in the future will be treated as their first such motion.
Next, the Court must decide whether the Complaint plausibly alleges individual coverage and/or enterprise coverage. "Under the FLSA, an employer may not employ his employee for a workweek longer than forty hours unless his employee receives overtime compensation at a rate not less than one and a half times his regular rate." Allen v. Bd. of Pub. Educ. for Bibb Cnty., 495 F.3d 1306, 1314 (11th Cir. 2007) (citing 29 U.S.C. § 207(a)(1) ). The Eleventh Circuit has explained that to prevail on an FLSA claim, a plaintiff "must prove that they were suffered or permitted to work without compensation." Id. "Courts have interpreted this to mean that a FLSA plaintiff must demonstrate that (1) he or she worked overtime without compensation and (2) the [defendant] knew or should have known of the overtime work." Id. at 1314-15 (citing Reich v. Dep't of Conservation and Nat. Res., 28 F.3d 1076, 1082 (11th Cir. 1994) ). However, as a precondition to imposing liability against an employer, the plaintiff must establish individual coverage or enterprise coverage. Thorne, 448 F.3d at 1265-66.
a. Individual coverage
The FLSA requires an employer to pay overtime wages to any employee "who in any workweek is engaged in commerce or in the production of goods for commerce ... for a workweek longer than forty hours ...." 29 U.S.C. § 207(a)(1). "An employee is subject to individual coverage if he is directly and regularly ‘engaged in’ interstate commerce." Josendis, 662 F.3d at 1315.
[F]or an employee to be "engaged in commerce" under the FLSA, he must be directly participating in the actual movement of persons or things in interstate commerce by (i) working for an instrumentality of interstate commerce, e.g., transportation or communication industry employees, or (ii) by regularly using the instrumentalities of interstate commerce in his work, e.g., regular and recurrent use of interstate telephone, telegraph, mails, or travel.
Thorne, 448 F.3d at 1266 (citing McLeod v. Threlkeld, 319 U.S. 491, 493-98, 63 S.Ct. 1248, 87 L.Ed. 1538 (1943) ).
Here, the Complaint alleges that "Plaintiff regularly and routinely utilized telephones, cellular telephones, hand tools, lubricants, mechanical parts, and other goods and supplies that moved through interstate commerce." (D.E. 1 ¶ 22.) Defendants argue that this allegation is insufficient to allege individual coverage under the FLSA because "[u]nder controlling authority from the Eleventh Circuit, an allegation that goods or tools were originally shipped from outside of Florida, is wholly insufficient to establish individual coverage under FLSA." (Mot. at 12 (citing Thorne, 448 F.3d at 1267 ).) Plaintiff argues that this allegation is sufficient to allege individual coverage under the FLSA. (Resp. at 10-11 (citing Kuehn, 2020 WL 109059, at *5 ; Lefevre, 2015 WL 6704107, at *1 ).)
Defendants are correct that merely using goods and tools that have been shipped through interstate commerce is insufficient to establish individual coverage under the FLSA. Josendis, 662 F.3d at 1316 (finding that using an employer's vehicles "that had, at some point, moved in interstate commerce" was insufficient to establish individual coverage: "While the point of origin of these vehicles may be relevant under a theory of enterprise coverage, their origin is irrelevant to the issue of individual coverage—namely, whether Josendis himself directly participated in the actual movement of persons or things in interstate commerce"); Guzman, 322 F. Appx at 645 (finding that picking up materials that had moved in interstate commerce from a hardware store for later use in the construction of the employer's cabinets did not establish individual coverage because "the materials were removed from the flow of interstate commerce when they arrived at the retail stores[,]" and the plaintiff's "later transport of the materials and installation of cabinets purchased by [the defendant's] customers purely was intrastate activity ‘not covered under the Act’ "); Thorne, 448 F.3d at 1267 ("[T]he fact that some of the tools he purchased may have crossed state lines at a previous time does not in itself implicate interstate commerce. When goods reach the customer for whom they were intended, the interstate journey ends and employees engaged in any further intra state movement of the goods are not covered under the Act."). Thus, the Court finds that Plaintiff was not "engaged in commerce" simply because he used "telephones, cellular telephones, hand tools, lubricants, mechanical parts, and other goods and supplies that moved through interstate commerce." (Compl. ¶ 22.)
Although the Eleventh Circuit recently held that a plaintiff may be "engaged in commerce" for purposes of individual coverage under the FLSA if he regularly uses the telephone to communicate with out-of-state customers and vendors, St. Elien v. All Cnty. Env't Servs., Inc., 991 F.3d 1197, 1199 (11th Cir. 2021), the Complaint does not allege that Plaintiff used telephones to communicate with out-of-state customers or vendors. (See Compl. ¶ 22.) Rather, it alleges that "Defendants ... regularly and recurrently use telephonic transmissions going outside of the State of Florida to conduct business, and transmit electronic information through computers, the internet, via email, and otherwise outside of the State of Florida in the course of their business." (Compl. ¶ 17 (emphasis added).) However, the test for individual coverage focuses on the activities of the employee, not the employer, St. Elien v. All Cnty. Env't Servs., Inc., 477 F. Supp. 3d 1283, 1287 (S.D. Fla. 2020) (citing Martin v. Briceno, No. 11-23228-CIV, 2014 WL 2587484, at *3 (S.D. Fla. June 10, 2014) ), and the Complaint simply does not allege that Plaintiff used telephones to communicate with out-of-state customers or vendors. Consequently, the Court finds that the Complaint fails to plausibly allege individual coverage under the FLSA.
b. Enterprise coverage
The FLSA requires an employer to pay overtime wages to an employee who "is employed in an enterprise engaged in commerce or in the production of goods for commerce, for a workweek longer than forty hours ...." 29 U.S.C. § 207(a)(1). Relevant here, "[e]nterprise engaged in commerce or in the production of goods for commerce" means an enterprise that
(A)(i) has employees engaged in commerce or in the production of goods for commerce, or that has employees handling, selling, or otherwise working on goods or materials that have been moved in or produced for commerce by any person; and
(ii) is an enterprise whose annual gross volume of sales made or business done is not less than $500,000 (exclusive of excise taxes at the retail level that are separately stated)[.]
29 U.S.C. § 203(s)(1) (emphasis added). For purposes of this definition, " ‘[g]oods’ means goods ..., wares, products, commodities, merchandise, or articles or subjects of commerce of any character, or any part or ingredient thereof, but does not include goods after their delivery into the actual physical possession of the ultimate consumer thereof other than a producer, manufacturer, or processor thereof." 29 U.S.C. § 203(i). The underlined language is commonly referred to as the "ultimate-consumer exception." Polycarpe, 616 F.3d at 1222. The ultimate-consumer exception does not apply to "materials" that have been moved in or produced for commerce. Id. Thus, if a defendant has employees " ‘handling, selling, or otherwise working on ... materials’ (and [the defendant] met the statute's other requirements), [the defendant] would be subject to the FLSA." Id. " ‘[M]aterials’ in the FLSA means tools or other articles necessary for doing or making something." Id. at 1224 (citation omitted).
Defendants appear to concede that the Complaint sufficiently alleges that Defendants had employees who "handled materials" for purposes of FLSA enterprise coverage. (See Mot. at 14-15 (acknowledging that the there may be a genuine issue of material fact as to whether Defendants had employees who "handled materials" under the FLSA).) And the Court finds that the Complaint plausibly alleges that Defendants have employees handling, selling, or otherwise working on materials that have been moved in or produced for commerce by any person. (See D.E. 1 ¶ 14 (alleging that Defendants install "foundation piles using bobcats, heavy equipment, machinery, hadn [sic] tools, parts, fluids, adhesives, lubricants, goods, materials, supplies, and equipment that have all moved through interstate commerce")); id. ¶ 15 (alleging that Defendants "sell steel and metal piles, goods, materials, and supplies that previously traveled in interstate commerce).
Defendants also appear to concede that the Complaint sufficiently alleges that Defendants’ annual gross volume of sales made or business done exceeded $500,000 during the relevant period, as they limit their argument to disputing the merits of this allegation, presenting evidence that allegedly establishes that Defendants’ annual gross volume of sales made or business done did not exceed $500,000 during the relevant period. (See Mot. at 14-16.) However, the Court has already declined Defendants’ request to convert the Motion to Dismiss into one for summary judgment and to consider the evidence Defendants attached to their Motion.
To state a claim for enterprise coverage, the $500,000 threshold need only be generally alleged, Vignoli v. Clifton Apts., Inc., 930 F. Supp. 2d 1342, 1346 (S.D. Fla. 2013) (citing Ceant v. Aventura Limousine & Transp. Serv., Inc., 874 F. Supp. 2d 1373, 1378 (S.D. Fla. 2012) ), and is satisfied if joint employers’ gross annual sales exceed $500,000 in the aggregate,see Cornell v. CF Center, LLC, 410 F. Appx 265, 266-67 (11th Cir. 2011) ; Scott v. K.W. Max Invs., Inc., 256 F. Appx 244, 250 (11th Cir. 2007). Here, Plaintiff argues that "Defendants collectively operated as Plaintiff's ‘employer(s)’ for purposes of the FLSA, as that term ‘employer’ is defined by 29 U.S.C. § 203 (d) [,]" (Compl. ¶ 11), and that "Defendants’ annual gross revenues derived from this interstate commerce are believed to be in excess of $500,000.00 per year and/or in excess of $125,000 for each fiscal quarter during the preceding three years[,]" (id. ¶ 18). Thus, the Court finds that the Complaint plausibly alleges that Defendants’ annual gross volume of sales made or business done exceeded $500,000 during the relevant period.
Defendants do not argue that Plaintiff failed to allege that Defendants were "joint employers" with regard to Plaintiff's employment.
IV. Conclusion
Accordingly, it is ORDERED AND ADJUDGED that Defendants Hammer Time Builders, Inc., Carbajal Investments 1, Inc., AC Real Estate Investments Inc., and Alberto Carbajal's Motion to Dismiss Plaintiff's Complaint (D.E. 22) is DENIED .
DONE AND ORDERED in Chambers at Miami, Florida this 16th day of February, 2022.