Opinion
CV-22-00354-PHX-SMB
11-02-2022
Sean McCune, Plaintiff, v. JD Towing LLC, et al., Defendants.
ORDER
Honorable Susan M. Brnovich United States District Judge
Pending before the Court is Defendant Jorge Duenas' (“Defendant”) Motion to Dismiss with prejudice under Federal Rule of Civil Procedure 12(b)(6). (Doc. 15.) Plaintiff Sean McCune (“Plaintiff”) filed a Response (Doc. 16), and Defendant filed a Reply (Doc. 17). After considering the briefing and relevant law, the Court will deny Defendant's Motion to Dismiss.
I. BACKGROUND
Plaintiff brings this action against Defendants “for their unlawful failure to pay minimum wage and overtime in violation of the Fair Labor Standards Act [(“FLSA”)]” and the Arizona Minimum Wage Statute. (Doc. 1 at 1.) While employed as a tow truck driver for Defendants between January 2020 and January 2022 (id. at 6), Plaintiff alleges he was paid about $8-10 per hour for 45-50 hours per week when not on call, and less than $3 per hour for 168 hours per week while on call. (Id. at 8-9.) Plaintiff thus alleges Defendants violated sections 206 and 207 of the FLSA and failed to pay minimum and owed wages under Arizona law. (Id. at 12-15.) Defendant Jorge Duenas now moves under Rule 12(b)(6) to dismiss the Complaint, with prejudice. (Doc. 15 at 1.)
II. LEGAL STANDARDS
To survive a 12(b)(6) motion for failure to state a claim, a complaint must meet the requirements of Rule 8(a)(2). See Fed.R.Civ.P. 12(b)(6). Rule 8(a)(2) requires a “short and plain statement of the claim showing that the pleader is entitled to relief,” as to “give the defendant fair notice of what the . . . claim is and the grounds upon which it rests.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 545 (2007) (cleaned up). Dismissal under Rule 12(b)(6) “can be based on the lack of a cognizable legal theory or the absence of sufficient facts alleged under a cognizable legal theory.” Balistreri v. Pacifica Police Dep't, 901 F.2d 696, 699 (9th Cir. 1988). A complaint will survive a motion to dismiss if its claims contain sufficient factual assertions, which if accepted as true, state a claim to relief that is “plausible on its face.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Twombly, 550 U.S. at 570). Facial plausibility exists if the complaint contains “factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Id. “Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice.” Id. Plausibility does not equal “probability,” but requires “more than a sheer possibility that a defendant has acted unlawfully.” Id. “Where a complaint pleads facts that are ‘merely consistent' with a defendant's liability, it ‘stops short of the line between possibility and plausibility of ‘entitlement to relief.'” Id. (quoting Twombly, 550 U.S. at 557).
III. DISCUSSION
A. “Employer” Under the FLSA
At issue is whether the Complaint sufficiently alleges Defendant was Plaintiff's “employer” under the FLSA. (See Doc. 15 at 2.) The FLSA imposes liability on “employers.” Bonnette v. Cal. Health and Welfare Agency, 704 F.2d 1465, 1468 (9th Cir. 1983), disapproved on other grounds by Garcia v. San Antonio Metro. Transit Auth., 469 U.S. 528 (1985). “Employer includes any person acting directly or indirectly in the interest of an employer in relation to an employee.” 29 U.S.C. § 203(d). The Ninth Circuit provides four factors to consider whether an individual or entity is an employer: “whether the alleged employer (1) had the power to hire and fire the employees, (2) supervised and controlled employee work schedules or conditions of employment, (3) determined the rate and method of payment, and (4) maintained employment records.” Garcia, 469 U.S. at 1469-70 (“The touchstone is economic reality.”). “[T]his is not a mechanical determination . . . and will not be blindly applied.” Id. at 1470. Rather, “[t]he ultimate determination must be based upon the circumstances of the whole activity.” Id. (cleaned up).
The Complaint alleges Plaintiff was an employee for Defendant, who is the owner and manager of co-defendant JD Towing, LLC (“JD Towing”). (Doc. 1 at 3.) The Complaint alleged that: (1) Defendant had the authority to hire and fire Plaintiff, and Defendant did in fact hire and fire him (id. at 4); (2) Defendant controlled Plaintiff's training, working hours, on-call schedule, and work assignments (id.); (3) Defendant determined Plaintiff would receive a 25% commission for each completed tow (id.); and (4) Defendant maintained Plaintiff's employment records (id. at 4-5).
Defendant argues the Complaint merely recites the required elements “without any of the necessary factual allegations required to support those elements.” (Doc. 15 at 10.) The Court disagrees. While the allegation about Defendant's maintenance of employment records represents a “legal conclusion couched as a factual allegation,” see Iqbal, 556 U.S. at 678 (quoting Twombly, 550 U.S. at 555), the Complaint's other allegations are sufficient under Rule 8(a)(2). As Plaintiff notes in his Response, the Complaint implies and asserts Defendant's authority to hire and fire employees-Defendant owns and manages JD Towing, and Defendant actually did hire and fire Plaintiff. (Doc. 16 at 7.) The Complaint alleges Defendant controlled how Plaintiff was trained, what hours he worked, and what assignments he worked on. The Complaint also alleges that Defendant supplied the tow trucks, lockout kits, battery jump starters, fuel, and insurance. (Doc. 1 at 6.) The Complaint specifically alleges that when on call, Plaintiff had to be on-scene within thirty minutes of dispatch's call, and that Plaintiff had no discretion to decline tow requests from police. (Id. at 7.) The Complaint further alleges that Defendant agreed to compensate Plaintiff with 25% of each tow job completed, but that Defendant withheld $100 each paycheck as a “deposit for potential damages,” and Defendant “regularly paid Plaintiff up to five days late.” (Id. at 10.) Looking at the entirety of Plaintiff's allegations, the Court finds the Complaint successfully alleges that Defendant employed Plaintiff under the FLSA. See Twombly, 550 U.S. at 555. As such, dismissal under Rule 12(b)(6) would be improper.
B. “Employer” Under State Law
In his Reply, Defendant argues that the Complaint failed to establish that Defendant was an employer under Arizona law. Defendant's argument was a rebuttal to Plaintiff's citing Cramton v. Grabbagreen Franchising LLC, No. CV-17-04663-PHX-DWL, 2019 WL 7048773 (D. Ariz. Dec. 23, 2019) in the Response. Notably, Defendant did not raise this argument in the Motion to Dismiss. (See Doc. 15 at 6-11.) Despite Defendant's intent to rebut Plaintiff's Response's assertion, the Court will not “consider issues raised for the first time in a reply memorandum.” Rawls v. Maricopa Cnty., No. CV-10-231-PHX-GMS, 2010 WL 2927309, at *2 (D. Ariz. July 23, 2010).
C. Alter Ego and Joint Employer Liability
Defendant also argues the Complaint fails to establish alter ego or joint employer liability. (Doc. 15 at 7-8.) Plaintiff responds that he does not rely on either theory and instead points to the FLSA's broad “employer” definition. (Doc. 16 at 3-4.)
Citing Boucher v. Shaw, Plaintiff asserts that corporate officers with ownership interests may be personally liable under the FLSA. 572 F.3d 1087, 1091 (9th Cir. 2009) (holding that former employees may seek unpaid wages from owner-managers). The Ninth Circuit has reiterated that employer status is determined by the economic reality test and is not limited by “common law concept[s].” See id. at 1090-91. Plaintiff was thus not required to include alter ego allegations in the Complaint.
The Complaint similarly lacks allegations that Defendant and JD Towing were joint employers. See Bonnette, 704 F.2d at 1469 (providing examples of joint employment situations). The Court notes that only Defendant moved to dismiss the Complaint-JD Towing did not. (See Doc. 15 at 1.) Because the Court found the Complaint set forth sufficient allegations that Defendant, individually, was Plaintiff's employer, the Complaint need not contain joint employment allegations to withstand dismissal.
IV. CONCLUSION
Accordingly, IT IS ORDERED denying Defendant's Motion to Dismiss. (Doc. 15.)