United States District Court, N.D. Texas, Dallas Division
DIMAS RODRIGUEZ, and all others similarly situated under 29 U.S.C. § 216 (b), Plaintiff,
SHAN NAMKEEN, INC., et al., Defendants.
MEMORANDUM OPINION AND ORDER
HARRIS TOLIVER UNITED STATES MAGISTRATE JUDGE.
to the parties' consent to proceed before the magistrate
judge, Doc. 9 at 5, this case has been transferred to the
undersigned for a final ruling, Doc. 10. The Court now
considers Defendants' Emergency Motion to Stay
Discovery, Doc. 35, and Motion to Dismiss Plaintiff
s Second Amended Complaint, Doc. 41. After carefully
reviewing the pleadings, the parties' briefing, and the
applicable law, Defendants' Motion to Dismiss is
GRANTED IN PART and its Motion to Stay Discovery is
DENIED AS MOOT.
BACKGROUND AND PROCEDURAL HISTORY
October 2015, Plaintiff Dimas Rodriguez filed this claim
under the Fair Labor Standards Act ("FLSA")
alleging that Defendants, Shan Namkeen, Inc.
("SNI") and Shailesh Patel violated provisions
related to the payment of overtime and minimum wages. Doc. 1
at 1. In September 2016, Plaintiff sought and obtained leave
to file his First Amended Complaint, Doc. 24, which
added a joint enterprise allegation and two additional
defendants, Manisha and Shirish Patel. See Doc. 24
at 1, 3-4. In October 2016, Defendants moved to dismiss
Plaintiffs claims under Federal Rule of Civil Procedure
12(b)(6). See Doc. 29. The Court granted
Defendants' motion, yet permitted Plaintiff to amend his
complaint a second time. Doc. 34. Shortly thereafter, and in
response to Plaintiffs discovery requests, Defendants filed
an Emergency Motion to Stay Discovery until
Plaintiff filed his amended complaint and Defendants'
forthcoming motion to dismiss was decided. Doc. 35. Since
that time, Plaintiff has filed his Second Amended
Complaint, Doc. 39, which Defendants again move to
dismiss under Rule 12(b)(6), Doc. 41. Following Plaintiffs
response, Doc. 42, and Defendants' reply, Doc. 43, the
motion is now ripe for consideration.
plaintiff fails to state a claim for relief under Rule
12(b)(6) when the complaint does not contain "enough
facts to state a claim to relief that is plausible on its
face." BellAtl. Corp. v. Twombly, 550 U.S. 544,
570 (2007). In making this determination, the court accepts
"all well-pleaded facts as true, viewing them in the
light most favorable to the plaintiff." In re
Katrina Canal Breaches Litig., 495 F.3d 191, 205 (5th
Cir. 2007) (internal quotation marks and citation omitted).
However, the court cannot "accept as true conclusory
allegations or unwarranted deductions of fact."
Collins v. Morgan Stanley Dean Witter, 224 F.3d 496,
498 (5th Cir. 2000) (internal quotation marks and citation
omitted). In sum, a plaintiffs factual allegations "must
be enough to raise a right to relief above the speculative
level on the assumption that all the allegations in the
complaint are true (even if doubtful in fact)."
Twombly, 550 U.S. at 555 (internal citations and
again argue that Plaintiffs pleadings are factually deficient
and fail to establish (1) individual coverage, (2) enterprise
coverage, and (3) that SNI is engaged in a joint enterprise
with S2. Doc. 41 at 2, 4-11. In response, Plaintiff contends
that his pleadings contain sufficient factual support, and
alternatively he requests leave to amend his complaint should
the Court find his pleadings deficient in whole or in part.
Doc. 42 at 4-15.
sections of the FLSA dealing with minimum wage and overtime
pay requirements apply only to (1) an employer with
"employees who in any workweek [are] engaged in commerce
or in the production of goods for commerce"
("individual coverage"), or (2) to an employer with
employees "employed in an enterprise engaged in commerce
or in the production of goods for commerce"
("enterprise coverage"). 29 U.S.C. §§
206(a)(1), 207(a)(1); see Martin v. Bedell, 955 F.2d
1029, 1032 (5th Cir. 1992) (using the terms
"individual" and "enterprise" coverage).
While "[e]ither individual or
enterprise coverage is enough to invoke FLSA protection,
" Martin, 955 F.2d at 1032 (emphasis in
original), the plaintiff has the burden or establishing the
application of either. Mendoza v. Detail Sols.,
L.L.C., 911 F.Supp.2d 433, 439 (N.D. Tex. 2012) (Fish,
plausibly alleges individual coverage. While the FLSA does
not define "individual coverage, " the Court of
Appeals for the Fifth Circuit instructs courts to determine
whether the employee's job "is so directly and
vitally related to the functioning of an instrumentality or
facility of interstate commerce as to be, in practical
effect, a part of it, rather than isolated local
activity." Sobrinio v. Med. Ctr. Visitor's
Lodge, Inc., 474 F.3d 828, 829 (5th Cir. 2007) (per
curiam) (quoting Mitchell v. KB. Zachry Co., 362
U.S. 310, 324 (I960)). If an employer conducts business in
several states, then an employee of that business engages in
commerce "when their work is an essential and integral
part of the employer's interstate business."
Barr v. Custom Design & Installation, Inc., No.
13-CV-4925-M, 2015 WL 1255870, at *2 (N.D. Tex. Mar. 19,
2015) (Lynn, J.) (citing Wirtz v. WohlShoe Co., 382
F.2d 848, 851 (5th Cir. 1967)). "Employees are engaged
'in the production of goods for commerce' if they are
involved with any 'incidental operation preparatory to
putting goods into the stream of commerce.'"
Flores v. ACTEvent Servs., Inc., 55 F.Supp.3d 928,
935 (N.D. Tex. 2014) (Fish, J.) (quoting W. Union Tel.
Co. v. Lenroot, 323 U.S. 490, 503 (1945)).
Second Amended Complaint expands on the allegation
of individual coverage the Court previously found lacking in
factual specificity. It includes allegations that (1) the
products, ingredients, and tools Plaintiff transported and
used to prepare Defendants' goods had previously traveled
across state lines; (2) SNI conducted business outside of
Texas; and (3) the goods Plaintiff prepared for Defendants
were sold outside of Texas. See Doc. 39 at 3-5.
the fact that Plaintiff may have used tools or worked on
products that previously traveled across state lines does not
establish individual coverage. Devore v. Lyons, No.
16-CV-1083-BN, 2016 WL 6277810, at *9 (N.D. Tex. Oct. 25,
2016) (Horan, J.) (citations omitted); see also Tran v.
Thai, No. H-08-3650, 2010 WL 5232944, at *4 (S.D. Tex.
Dec. 16, 2010) ("[R]eception of items from out of state
wholesalers ends the interstate journey and employees engaged
in further intrastate movement of the goods are 'not
covered under the [FLSA]'") (citation omitted). That
being said, Plaintiff alleges that (1) Defendants conduct
business outside of Texas, and (2) the goods Plaintiff
manufactured for Defendants during the course of his
employment were being distributed to states surrounding
Texas, as well as Illinois and North Carolina. Doc. 39 at
4-5. Taken as true, these allegations show that Plaintiff was
engaged in commerce, as the preparation of goods for
interstate sale would necessarily be an "essential and
integral" part of Defendants' interstate business,
and not - as Defendants suggest - tangentially related
thereto. Barr, 2015 WL 1255870, at *2; see also
Walling v. Sondock, 132 F.2d 77, 78 (5th Cir. 1942)
("[I]f an employee's services are part of and
contribute materially to the consummation of transactions in
interstate commerce, the employee is engaged in commerce as
defined by the [FLSA].").
Defendants demand that Plaintiff further specify the states
to which SNFs products were sent, and the regularity with
which the products he worked on were sold out of state, they
fail to cite - and the Court is unable to find - any
authority suggesting Plaintiffs fact7ual enhancements to his
amended complaint are insufficient to overcome a Rule
12(b)(6) challenge. Additionally, Plaintiffs Second
Amended Complaint specifically mentions that
Defendants' products were sent to Illinois and North
Carolina; the mere fact that Plaintiff also generally
mentions "states surrounding Texas" does not make
his allegation of individual coverage implausible or
conclusory. Doc. 39 at 5; Doc. 43 at 3-4. On the contrary,
Plaintiffs allegations demonstrate that he regularly
"work[ed] with goods intended for use, ...