DeSimone v. TIAA Bank, FSB

DeSimone, et al, Plaintiffs, v. TIAA Bank, FSB, Defendant.

No. 20-cv-6492 (AJN)

United States District Court, S.D. New York

September 14, 2021

OPINION & ORDER

ALISON J. NATHAN, District Judge

Plaintiffs who are former and current mortgage loan officers, bring claims against Defendant bank for unpaid wages and overtime under the FLSA and various state laws. Defendant moves to dismiss certain claims as time-barred and to compel certain claims to arbitration. Plaintiffs move to conditionally certify the action as a collective under the FLSA. For the reasons that follow, Defendant's partial motion to dismiss and motion to compel are GRANTED. Plaintiffs' motion to conditionally certify a FLSA collective is GRANTED IN PART and DENIED IN PART.

I. BACKGROUND

Named Plaintiffs Nicholas DeSimone, Patrick Gardner, Mohammad Hussain, Paul Malstrom, Stephen Gallagher, Craig Paladeau and Cory Benner bring claims against Defendant TIAA Bank, FSB on behalf of themselves and all other similarly situated employees for unpaid wages, overtime compensation, and other relief under the Fair Labor Standards Act and the laws of New York, New Jersey, California, Maryland, Washington, Pennsylvania, and Oregon. Dkt. No. 67. Plaintiffs were employed as Retail Loan Officers in various states and performed the functions of originating and producing residential mortgage loans from Defendant TIAA Bank. Id. ¶ 23. Plaintiffs allege that Defendant misclassified them as “outside sales” employees who were exempt from overtime pay and failed to pay them for overtime hours worked. Id. ¶ 131.

Before this action was filed, a related case Lesser v. TIAA Bank, FSB, 1:19-cv-01707-AJN (S.D.N.Y.) was filed in this Court on February 22, 2019. The complaint in that case contained nearly identical allegations under the FLSA and the laws of New York and New Jersey to the complaint that would later be filed in this case. See Lesser, 1:19-cv-01707, Dkt. No. 2. On October 20, 2020, the Court approved a settlement in Lesser and dismissed the case with prejudice. See id., Dkt. No. 61. Prior to that settlement approval, on August 14, 2020, named Plaintiffs DeSimone, Gardner, Hussain, and Malstrom filed the complaint in this matter against Defendant alleging wage and overtime claims under the FLSA and the laws of New Jersey (DeSimone), New York (Hussain), California (Gardner), and Maryland (Malstrom). Dkt. No. 1.

After Defendant filed an initial motion to dismiss Plaintiffs' complaint in this case, Plaintiffs filed an Amended Complaint on October 29, 2020, which is now the operative complaint. Dkt. No. 67. The Amended Complaint added named Plaintiffs Gallagher, Paladeau, and Benner. Id. In addition to FLSA claims, the added named plaintiffs assert claims under the laws of Pennsylvania (Gallagher), Washington (Paladeau), and Oregon (Benner). Id.

Defendant then filed a partial motion to dismiss the Amended Complaint, in which it argues that certain state law claims of certain plaintiffs are barred by the applicable statutes of limitations. Dkt. No. 83. Defendant also filed a motion to compel arbitration with respect to certain claims. Dkt. No. 94. Plaintiffs filed a motion to conditionally certify a collective action under § 216(b) of the FLSA. Dkt. No. 111. These motions are fully briefed.

II. MOTION TO DISMISS

Defendants move to dismiss claims on the grounds that they are untimely. First, Defendant argues that the statute of limitations period for the New Jersey and Oregon claims is two years instead of six. Additionally, Defendant argues that, other than for Plaintiffs' New York and New Jersey claims, Plaintiffs' Amended Complaint improperly asserts that the statute of limitations for Plaintiffs state law claims were tolled by the filing of Lesser. As discussed below, the Court agrees with Defendant that some of Plaintiffs' claims are untimely. Moreover, while Plaintiff raises the possibility of equitable tolling in response to Defendant's motion, Plaintiffs' speculation without plausible allegation that a potential equitable tolling argument may become available after discovery does not preclude dismissal of Plaintiffs' untimely claims.

A. Legal Standard

To survive a motion to dismiss, the complaint must include “enough facts to state a claim to relief that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). “[T]he statute of limitations is ordinarily an affirmative defense that must be raised in the answer.” Ellul v. Congregation of Christian Bros., 774 F.3d 791, 798 n.12 (2d Cir. 2014). However, although “a statute of limitations bar is an affirmative defense, the Court may consider the defense at the motion to dismiss stage because ‘a complaint can be dismissed for failure to state a claim pursuant to a Rule 12(b)(6) motion raising an affirmative defense if the defense appears on the face of the complaint.'” Newmann v. Mediterranean Shipping Co., No. 18 CIV.10518 (AJN), 2019 WL 4805864, at *2 (S.D.N.Y. Sept. 30, 2019) (citing Official Comm. of the Unsecured Creditors of Color Tile, Inc. v. Coopers & Lybrand, LLP, 322 F.3d 147, 158 (2d Cir. 2003)). Thus, the claims may be dismissed if the “complaint clearly shows the claim is out of time.” Biro v. Conde Nast, 963 F.Supp.2d 255, 266 (S.D.N.Y. 2013) (quoting Harris v. City of New York, 186 F.3d 243, 250 (2d Cir. 1999)).

A. The applicable statute of limitations for Plaintiffs' Oregon and New Jersey claims is two years

Plaintiffs state claims in their Amended Complaint under Oregon and New Jersey law going back six years. As discussed below, the statute of limitations for these claims is two years.

1. Oregon

Oregon law holds that there is a six-year statute of limitations for any “action upon a liability created by statute, other than a penalty or forfeiture, excepting those mentioned in” Or. Rev. Stat. 12:110. Or. Rev. Stat. 12:110(3) provides that “[a]n action for overtime or premium pay or for penalties or liquidated damages for failure to pay overtime or premium pay shall be commenced within two years.” Or. Rev. Stat. Ann. § 12.110.

In Plaintiff's Amended Complaint, named Plaintiff Benner asserts claims on behalf of a putative class for unpaid wages under Oregon law dating back six years prior to Lesser. Dkt. No. 67 at 3. As explained below, any of Plaintiffs' claims brought under Oregon law were not tolled by Lesser. Moreover, to the extent Plaintiffs seek to recover claims for unpaid overtime or premium pay for more than two years prior to the filing of Plaintiff's complaint, those claims are dismissed as time-barred per the express terms of Or. Rev. Stat. 12:110(3).

2. New Jersey

New Jersey law currently provides that “[n]o claim for unpaid minimum wages[] [or] unpaid overtime compensation . . . shall be valid with respect to any such claim which has arisen more than six years prior to the commencement of an action for the recovery thereof.” N.J. Stat. Ann. § 34:11-56a25.1. However, this version of the statute was enacted on August 6, 2019. Prior to that amendment, the limitations period for unpaid minimum wage and overtime claims in this provision was two years. See Magee v. Francesca's Holding Corp., No. CV 17-565 (RBK/JS), 2020 WL 2768679, at *1 (D.N.J. May 28, 2020).

Plaintiffs argue that the legislative amendment applies retroactively and therefore the limitations period for their claims is six years and not two. New Jersey law requires that courts abide by the “general principle of statutory construction that courts favor the prospective application of statutes.” Phillips v. Curiale, 128 N.J. 608, 615, 608 A.2d 895, 898 (N.J. 1992). To determine whether a New Jersey statute should be applied retroactively, courts are to consider “whether the Legislature intended to give the statute retroactive application” and “whether retroactive application of that statute will result in either an unconstitutional interference with vested rights or a manifest injustice.” James v. New Jersey Manufacturers Ins. Co., 216 N.J. 552, 563, 83 A.3d 70, 77 (N.J. 2014) (citation omitted).

When interpreting the New Jersey statute to determine whether it applies retroactively, the Court must look to “look to the state's decisional law.” Santalucia v. Sebright Transp., Inc., 232 F.3d 293, 297 (2d Cir. 2000). If the highest court of the state has not spoken on the matter, the Court must “carefully . . . predict how” it “would resolve the uncertainty or ambiguity.” Id. (citation omitted). Moreover, if “the federal appeals court in the circuit where the state is located has essayed its own prediction of the course of state law” then “the federal courts of other circuits should defer to that holding.” In re Methyl Tertiary Butyl Ether ("MTBE") Prod. Liab. Litig., 415 F.Supp.2d 261, 269 (S.D.N.Y. 2005) (cleaned up). If not, then the opinions of district courts in a state are also a source of persuasive authority on the meaning of that state's law. See Sloley v. VanBramer, 945 F.3d 30, 42 (2d Cir. 2019).

Neither the Supreme Court of New Jersey, the Third Circuit, nor the Second Circuit have spoken on the issue of whether the statute applies retroactively. However, all the District Court of New Jersey decisions to consider the issue have held that it does not. See Doe v. Bloomberg L.P., No. CV 19-9471 (FLW), 2021 WL 1578358, at *2 (D.N.J. Apr. 22, 2021); Magee, 2020 WL 2768679, at *2; Saiyed v. Archon Inc., Civ No. 16-9530, 2020 WL 7334190, at *5 n.6 (D.N.J. Dec. 14, 2020); Vasquez v. Spain Inn, Inc., Civ No. 19-452, 2019 WL 5258197, at *3 n.6 (D.N.J. Oct. 17, 2019); Buchspies v. Pfizer, Inc., Civ. No. 18-16083, 2019 WL 5078853, at *4 n.6 (D.N.J. Oct. 10, 2019). Along with other reasons, those courts held the amendment was prospective because the legislature did not explicitly state its intent...