Bustamante v. D.O. Prods., LLC

HERMES BUSTAMANTE, on behalf of himself and others similarly situated, Plaintiff, v. D.O. PRODUCTIONS, LLC and MCCAIN FOODS USA, INC., Defendants.

Civil Action No. 16-4618

UNITED STATES DISTRICT COURT DISTRICT OF NEW JERSEY

August 30, 2017

Not for Publication

OPINION

John Michael Vazquez, U.S.D.J.

The present matter comes before the Court on Defendant D.O. Productions, LLC's¹ ("Defendant" or "D.O. Productions") motion to dismiss the Complaint pursuant to Rule 12(b)(1) for lack of subject matter jurisdiction.² D.E. 71. Plaintiff Hermes Bustamante ("Plaintiff") opposes the motion on behalf of himself and others similarly situated.³ This case concerns allegations that Defendants failed to pay Plaintiff, and other similarly situated employees, compensation for rest time and overtime, as required by law. This motion was decided without oral argument pursuant to Federal Rule of Civil Procedure 78 and Local Civil Rule 78.1. The Court has considered the parties' submissions and denies Defendant's motion without prejudice.

I. FACTUAL⁴ & PROCEDURAL HISTORY

The facts of this matter are derived from Plaintiff's Complaint ("Compl."). D.E. 1. Defendants manufacture frozen foods at their facility in Lodi, New Jersey (the "Lodi Facility"). Compl. ¶¶ 9, 11, 26. The Lodi Facility was owned and operated for many years by Defendant McCain. Id. ¶ 27. On or about November 1, 2014, Defendant D.O. Productions bought the business from McCain. Id. ¶¶ 13, 27.

Plaintiff was an employee at the Lodi Facility, first for McCain and subsequently for D.O. Productions. Id. ¶ 6. Plaintiff alleges that Defendants failed to pay him for compensable rest periods and overtime pay for hours worked in excess of 40 hours per week. Id. ¶ 15. Specifically, Plaintiff asserts that he was required to take two rest periods of 20 minutes during his shift, but was only paid for five minutes of each rest period. Id. ¶ 28. According to Plaintiff, he should have been paid for the full 20-minute rest periods and overtime wages, where applicable. Id. ¶ 30.

Plaintiff filed his Complaint on behalf of himself and similarly situated individuals on July 29, 2016, alleging causes of action for (1) unpaid wages and overtime under the Fair Labor Standards Act ("FLSA"); and (2) unpaid wages and overtime under the New Jersey Wage and Hour Law ("NJWHL"). D.E. 1. On August 17, 2016, Plaintiff filed consent forms on behalf of himself and 41 individuals to participate in the current action. See D.E. 6-47. Additional consent forms were filed on August 24, 2016 for ten more individuals, as well as for two more persons on August 31, 2016 and October 5, 2016. D.E. 51-60, 63, 68. On October 12, 2016, Defendant served on Plaintiff and the remaining opt-ins an offer of judgment pursuant to Rule 68.⁵ Defendant McCain answered the Complaint on October 14, 2016. D.E. 69. In lieu of answering, Defendant D.O. Productions moved to dismiss the Complaint for lack of subject matter jurisdiction. D.E. 71. Plaintiff opposes Defendant's motion. D.E. 74.

II. STANDARD OF REVIEW

Rule 12(b)(1) permits a party to move to dismiss a complaint based on "lack of subject matter jurisdiction." See Fed. R. Civ. P. 12(b)(1). In deciding a Rule 12(b)(1) motion to dismiss, a court must first determine whether the party presents a facial or factual attack because that distinction determines how the pleading is reviewed. See Mortensen v. First Fed. Sav. & Loan Ass'n, 549 F.2d 884, 891 (3d Cir. 1977). "A facial attack concerns an alleged pleading deficiency whereas a factual attack concerns the actual failure of a plaintiff's claims to comport factually with the jurisdictional prerequisites." Young v. United States, 152 F. Supp. 3d 337, 345 (D.N.J. 2015) (quotations and citation omitted).

Here, the parties dispute whether the proper standard is a factual or facial attack. See Pl. Opp'n at 7-9; Def. R.Br. at 2-3. Plaintiff argues that Defendant's motion must be construed as facial because Defendant has not yet filed an answer. Pl. Opp'n at 7-9. Defendant argues that the Supreme Court and Third Circuit have held that the timing of a motion to dismiss is irrelevant when determining whether the attack is factual or facial. Def. R.Br. at 2-3. Therefore, Defendant contends that the Court should construe its motion as a factual attack and consider allegations outside the pleadings. Id. at 3.

Defendant cites to Bernardi v. Swanson Memorial Lodge No. 48 of the Fraternal Order of Police, 920 F.2d 198 (3d Cir. 1990) for support. There, the Third Circuit specifically held that the timing of filing a motion to dismiss is not determinative of whether the attack is factual or facial. Id. at 200. Thus, the Third Circuit concluded that the defendant's motion was properly considered a factual attack, despite the fact that it was brought pre-answer. Id.

While Bernardi has not explicitly been overruled, recent Third Circuit cases suggest that only facial attacks, and not factual attacks, can be brought in a motion to dismiss before an answer is filed. See, e.g., Constitution Party of Pa. v. Aichele, 757 F.3d 347, 358 (3d Cir. 2014) ("The [defendant] filed the attack before it filed any answer to the [c]omplaint or otherwise presented competing facts. Its motion was therefore, by definition, a facial attack." (emphasis added)); Askew v. Trustees of Gen. Assembly of Church of the Lord Jesus Christ of the Apostolic Faith Inc., 684 F.3d 413, 417 (3d Cir. 2012) (concluding that "[a]s the defendants had not answered and the parties had not engaged in discovery, the first motion to dismiss was facial."). Other courts in this district have reached the same conclusion. See, e.g, Curlin Med. Inc. v. ACTA Med., LLC, No. 16-2464, 2016 WL 6403131, at *2 (D.N.J. Oct. 27, 2016) (finding that recent Third Circuit cases support the conclusion that factual attacks to jurisdiction can only be brought post-answer); Smalls v. Jacoby & Meyers, LLP, No. 15-6559, 2016 WL 354749, at *2 (D.N.J. Jan. 26, 2016) (same).

This Court will follow the recent development in Third Circuit law and construe the present motion as a facial attack, since Defendant brought a pre-answer motion to dismiss for lack of subject matter jurisdiction. Accordingly, "the court must only consider the allegations of the complaint and documents referenced therein . . . in the light most favorable to the plaintiff." Gould Elecs. Inc. v. United States, 220 F.3d 169, 176 (3d Cir. 2000).

III. DISCUSSION

Even though the Court is reviewing Defendant's motion pursuant to a facial attack, the Court will nevertheless cite to the extraneous factual allegations raised by Defendant so that the record is complete.

Facts Averred by Defendant

Defendant alleges that when it purchased the business from McCain, the Collective Bargaining Agreement ("CBA") in place required production employees, such as Plaintiff, to take two 20-minute rest periods, of which five minutes would be paid. Def. Br. at 2-3. During the months leading up to April 7, 2016, Defendant negotiated a new CBA with production employees. Id. In these negotiations, Defendant was represented by "experienced labor counsel"⁶ and the production employees were represented by the local union (the "Union"). Id. Defendant and the Union ultimately agreed to and ratified the CBA, including the provision for two 20-minute rest periods, of which five minutes were paid. Id.

On May 13, 2016, the Wage and Hour Division of the United States Department of Labor ("USDOL") advised Defendant of its intent to investigate Defendant's compliance with the FLSA. Id. at 4. Defendant alleges it cooperated with the investigation, including providing USDOL with payroll and time records for all employees for the previous two years. Id. After reviewing the records, the USDOL concluded that current and former employees should have been paid for the full 20-minute rest periods taken during their shifts and, where applicable, overtime compensation between November 9, 2014 and June 5, 2016. Id. at 5. By a letter dated August 18, 2016, the USDOL advised Defendant of its determination of the specific amount of back wages due to 57 current and former employees. Id.

In response, Defendant agreed to pay the back wages recommended by the USDOL. Id. The USDOL also prepared a "Receipt for Payment of Back Wages, Liquidated Damages, Employment Benefits, or Other Compensation," Form WH-58, in both English and Spanish, to distribute to each current and former employee who was due payment pursuant to the agreement. Id. When Defendant distributed payment and the Form WH-58 to its employees, it also attached a cover letter and rider, which included a release for all claims of back wages, including claims under the NJWHL. Id. at 6.⁷ Defendant alleges that "[t]o date, 43 of the 57 current and former production employees signed and returned the releases and accepted payment issued to them." Id. Two employees received, but did not sign, the releases and accepted the payment issued to them. Id. at 7. Thus, 11 employees refused to sign the Form WH-58, the Rider, or accept payment. Id. On October 12, 2016, Defendant offered judgment to each of the remaining 11 current and former employees who declined to accept payment, including Plaintiff. Id. at 10.

On September 8, 2016, "counsel for Defendant contacted Plaintiff's counsel by telephone and advised of the pending supervised payments." Id. at 9. On September 9, defense counsel again contacted Plaintiff's counsel to provide a copy of the documents given to Plaintiff and the other employees in connection with the conclusion of the USDOL investigation. Id. In response, Plaintiff's counsel stated that any of the releases signed by his clients "should be considered null and void." Id. Plaintiff's counsel later clarified that that by his "clients" they meant "all of [his] clients, i.e. all of the employees or former employees of [D]efendants who have submitted FLSA consent forms." Id. Thereafter, Defendant sent Plaintiff's counsel a letter, disputing...