United States District Court, S.D. Texas, Houston Division
David Aguirre, Individually and on Behalf of Similarly Situated Individuals, Plaintiff,
Tastee Kreme #2, Inc. and Vahid Karami, Defendants.
MEMORANDUM OPINION AND ORDER
H. MILLER, UNITED STATES DISTRICT JUDGE.
before the court is a memorandum and recommendation filed by
Magistrate Judge Nancy Johnson (“M&R”). Dkt.
43. The M&R recommends granting, in part, plaintiff David
Aguirre's motion to strike (Dkt. 21) the defendants'
affirmative defenses. Id. Defendants Tastee Kreme
#2, Inc. and Vahid Karami (collectively,
“Defendants”) filed objections to the Magistrate
Judge's recommendation to strike their estoppel (third
defense), setoff (eighteenth defense), and payment (twentieth
defense) defenses. Dkt. 44. Defendants also object to the
M&R because the Magistrate Judge did not rule on their
motion to amend their answer. Id. After considering
the M&R, objections, relevant briefing and evidence, and
the applicable law, the court is of the opinion that the
objections should be SUSTAINED IN PART and the M&R should
be ADOPTED IN PART.
Clear Error Review
did not file any objections to the Magistrate Judge's
recommendations that Aguirre's motion to strike be
granted as to Defendants' second, fourth and eleventh
affirmative defenses. See Dkt. 44. District courts
review a Magistrate Judge's recommendation for clear
error if there is no timely objection to the recommendation.
See Fed. R. Civ. P. 72, Advisory Committee Notes
(“When no timely objection is filed, the court need
only satisfy itself that there is no clear error on the face
of the record in order to accept the recommendation.”).
After considering the M&R, related documents, and the
applicable law, the court is of the opinion that there is no
clear error with regard to the portions of the M&R to
which Defendants did not raise objections. These portions of
the M&R are ADOPTED. Thus, consistent with the Magistrate
Judge's recommendation, Aguirre's motion to strike
the defendants' second, fourth and eleventh affirmative
defenses is GRANTED and these defenses are STRICKEN.
De Novo Review
object to the Magistrate Judge's recommendations with
regard to their third, eighteenth, and twentieth affirmative
defenses. Dkt. 44. For dispositive matters, district courts
“determine de novo any part of the magistrate
judge's disposition that has been properly objected
to.” Fed.R.Civ.P. 72(b)(3). “The district judge
may accept, reject, or modify the recommended disposition;
receive further evidence; or return the matter to the
magistrate judge with instructions.” Id.
regard to the third affirmative defense, estoppel, Aguirre
argued in his motion to strike that the estoppel defense was
insufficiently pled and, regardless, is inapplicable and
improper in a Fair Labor Standards Act (“FLSA”)
case. Dkt. 21. Defendants argued that they are only required
to provide fair notice of their defenses and that pleading
the name of the defenses was sufficient to afford fair
notice. Dkt. 32. Defendants also argued that “the Fifth
Circuit has explicitly permitted an employer to rely on
estoppel to defend against an employee's FLSA
claim.” Id. (citing Brumbelow v. Quality
Mills, Inc., 462 F.2d 1324, 1327 (5th Cir. 1972)).
Aguirre replied that he is not requesting equitable relief
and that the estoppel claim should accordingly be stricken.
Dkt. 34 (citing Gonzalez v. Spears Holdings, Inc.,
No. 09-60501-CIV, 2009 WL 2391233, at *3 (S.D. Fla. July 31,
2009)). The Magistrate Judge, relying on Tran v.
Thai, No. H-08-3650, 2010 WL 5232944, at *7 (S.D. Tex.
Dec. 16, 2010), held that an estoppel affirmative defense is
not available in FLSA cases. Dkt. 43.
to Defendants, their estoppel defense is based on their
argument that Aguirre has admitted he has been paid overtime
and that he “lied to this Court by stating in a sworn
declaration that he ‘was never paid overtime for all
the hours [he] worked in excess of 40 hours a week since
2008.'” Dkt. 44. Defendants want to argue that
Aguirre is estopped from arguing that he has never been paid
overtime, asserting that otherwise Aguirre would be able to
“‘profit from [his] own wrong.'”
Id. (quoting Brumbelow, 462 F.2d at 1327).
rely on Brumbelow. The FLSA claim in
Brumbelow was made by an employee who assembled
products for her employer out of her home.
Brumbelow, 462 F.2d at 1327. The employee admitted
that “she consistently under-reported hours
worked” because she was not able to produce as many
parts as the employer expected per hour, and the employee did
not want to lose her job. Id. The district court
granted a directed verdict in the employer's favor, and
the Fifth Circuit affirmed, holding that “[o]n the
narrow facts of this case, the court correctly granted a
direct verdict on the basis that the appellant was estopped
and could not profit from her own wrong in furnishing false
data to the employer.” Id.
the court agrees with the Magistrate Judge that an estoppel
defense is generally not available in FLSA cases, the court
finds that it is appropriate to allow Defendants to assert
their estoppel defense for the very narrow purpose of arguing
that Aguirre is estopped from arguing that he was
never paid overtime. Defendants' objection to
the ruling on the estoppel defense is therefore SUSTAINED.
Setoff and Payment Defenses
eighteenth and twentieth affirmative defenses are credit for
setoff and payment. Dkt. 19. Defendants argue that the same
facts that justify their estoppel defense permit them to
raise the setoff and payment defenses. Dkt. 44. The court
finds that since there appears to be some evidence that
overtime was paid to some of the plaintiffs at some point,
these defenses should be permitted. Accordingly,
Defendants' objections to the Magistrate Judge's
recommendations relating to the eighteenth and twentieth
affirmative defenses are SUSTAINED.