Eugene v. AFD Petroleum Ltd.

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JERMAINE EUGENE, Plaintiff, v. AFD PETROLEUM LTD, et al., Defendants.

No. 22-CV-00076-DC-RCG

United States District Court, W.D. Texas, Midland/Odessa Division

July 6, 2023

REPORT AND RECOMMENDATION OF THE U.S. MAGISTRATE JUDGE

RONALD C. GRIFFIN UNITED STATES MAGISTRATE JUDGE

BEFORE THE COURT is Defendant AFD Holdings Inc.'s (“Defendant AFD Holdings”) Motion to Dismiss. (Doc. 27). This case is before the undersigned through an Order pursuant to 28 U.S.C. § 636 and Appendix C of the Local Court Rules for the Assignment of Duties to United States Magistrate Judges. After due consideration, the undersigned RECOMMENDS that Defendant's Motion to Dismiss be GRANTED. (Doc. 27).

I. Background

On April 1, 2022, Plaintiff Jermaine Eugene (“Plaintiff”) filed his Original Complaint. (Doc 1). After Defendant AFD Petroleum Ltd. filed its first Motion to Dismiss on June 10, 2022 (Doc. 3), Plaintiff filed his First Amended Complaint (“FAC”) (Doc. 8) alleging that Defendants AFD Petroleum Ltd., AFD Petroleum (Texas) Inc. (“Defendant AFD Texas”), Alaska Fuel Distributors Inc., and AFD Holdings (collectively, “Defendants”) violated the Civil Rights Act of 1866, 42 U.S.C. § 1981, et seq. Id. Plaintiff alleges: 1) employment discrimination on the basis of race; 2) hostile work environment; and 3) retaliation. Id. at 7-8. Plaintiff seeks to recover back and front pay, compensatory damages, punitive damages, pre- and post-judgment interest, and attorneys' fees and costs. Id. at 9.

Plaintiff alleges that Defendants, functioning as an integrated enterprise and joint employers, offer “a variety of supplies and support to various industries including, but not limited to, independently sourced bulk fuel, heavy-duty lubricants, grease, and fluids; efficient, state-of-the[-]art delivery systems; on-site fuel and oil tank storage systems; accurate online satellite tank level monitoring; real-time billing and reporting; technical support; and project management.” Id. at 3. Plaintiff worked at the Midland, Texas facility from approximately June 2017 until April 2018. (Doc. 8 at 3, 8). He would “either be assigned work shifts at Defendants' Midland Facility or be assigned to work shifts at customer job sites throughout the states of Texas and Oklahoma.” Id. at 3.

Plaintiff claims that, throughout his employment, he experienced “an environment of pervasive discrimination.” Id. According to the FAC, Plaintiff's “non-Black co-workers and managers frequently use[d] racial slurs and derogatory language,” creating a hostile work environment. Id. at 3-4. Further, Plaintiff asserts that all management personnel at the Midland facility were non-Black and that they “assigned significantly more dangerous or difficult labor assignments to Black employees compared to Hispanic employees.” Id. at 5. Finally, Plaintiff contends that, in or around March 2018, he reported such behavior to the Human Resources Department. (Doc. 8 at 6). Then, in or around April 2018, Plaintiff claims that “his work shift assignments [were] dramatically reduced” and that it eventually “became impossible for Plaintiff to earn a living wage because Defendants' non-Black management at the Midland Facility refused to assign more work for Plaintiff,” resulting in his constructive discharge. Id. at 6-7.

On November 28, 2022, Defendant AFD Holdings filed its Motion to Dismiss. (Doc. 27). Plaintiff then filed his Response on December 12, 2022. (Doc. 32). On December 19, 2022, Defendant AFD Holdings filed its Reply. (Doc. 33). Consequently, this matter is ripe for disposition.

II. Legal Standard

A. Motion to Dismiss for Lack of Personal Jurisdiction

Under Federal Rule of Civil Procedure 12(b)(2), a court must dismiss a claim if it finds a lack of personal jurisdiction. Once a defendant has asserted such an argument, “the burden shifts to the plaintiff to establish that in personam jurisdiction exists.” Palmer v. Idalia Llorens Collection Agency, Inc., 434 F.Supp.3d 462, 466-67 (E.D. Tex. 2020) (citing Bullion v. Gillespie, 895 F.2d 213, 217 (5th Cir. 1990)). “When a court rules on the issue without a full evidentiary hearing, a plaintiff need only make a prima facie showing of jurisdiction.” Harding v. Alaska Fuel Distribs., Inc., No. MO:17-CV-00008-RAJ, 2017 WL 7921202, at *1 (W.D. Tex. June 29, 2017) (citing Wilson v. Belin, 20 F.3d 644, 648 (5th Cir. 1994)). Additionally, “allegations in the plaintiff's complaint are taken as true, except to the extent that they are contradicted by the defendant” and “[a]ny material and genuine, conflicting facts are resolved in favor of the plaintiff for the purpose of determining whether a prima facie case exists.” Palmer, 434 F.Supp.3d at 467 (citing Alpine View Co. v. Atlas Copco AB, 205 F.3d 208, 215 (5th Cir. 2000)).

There are two requirements for a court to exercise personal jurisdiction over a nonresident defendant: “(1) the long-arm statute of the forum state creates personal jurisdiction over the defendant; and (2) the exercise of personal jurisdiction is consistent with the due process guarantees of the United States Constitution.” Revell v. Lidov, 317 F.3d 467, 469 (5th Cir. 2002). Relevant here is Texas's long-arm statute^[1], which “is coextensive with the federal constitutional limits of due process.” Palmer, 434 F.Supp.3d at 467 (citing Stroman Realty, Inc. v. Wercinski, 513 F.3d 476, 482 (5th Cir. 2008); Religious Tech. Ctr. v. Liebreich, 339 F.3d 369, 373 (5th Cir. 2003)). Thus, the primary inquiry is whether exercising personal jurisdiction over Defendant AFD Holdings is consistent with the Due Process Clause.

In general, the Due Process Clause requires that the defendant have “meaningful ‘contacts, ties, or relations' with the forum state” before a court may exercise personal jurisdiction over a nonresident defendant. Palmer, 434 F.Supp.3d at 468 (quoting Int'l Shoe Co. v. Wash., 326 U.S. 310, 319 (1945)). Furthermore, personal jurisdiction may be general, where the defendant has “continuous and systematic general business contacts” with the forum, or specific, where a suit “aris[es] out of or relate[s] to the defendant's contacts with the forum.” Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 414-16 (1984). For a court to possess specific jurisdiction, a defendant must “have certain minimum contacts with [the forum state] such that the maintenance of the suit does not offend ‘traditional notions of fair play and substantial justice.'” Int'l Shoe, 326 U.S. at 316 (quoting Milliken v. Meyer, 311 U.S. 457, 463 (1940)).

The Fifth Circuit determines specific personal jurisdiction using a three-step analysis:

(1) Whether the defendant . . . purposefully directed its activities toward the forum state or purposely availed itself of the privileges of conducting activities there; (2) Whether the plaintiff's cause of action arises out of or results from the defendant's forum-related contacts; and (3) Whether the exercise of personal jurisdiction is fair and reasonable.

Palmer, 434 F.Supp.3d at 468 (citing Stroman Realty, 513 F.3d at 484). Furthermore, the nonresident party must have “reasonably anticipat[ed] being haled into court.” World-Wide Volkswagen Corp. v. Woodson (Volkswagen I), 444 U.S. 286, 297 (1980).

B. Motion to Dismiss for Failure to State a Claim

Federal Rule of Civil Procedure 12(b)(6) authorizes dismissal of a complaint for “failure to state a claim upon which relief can be granted.” When considering a Rule 12(b)(6) motion to dismiss, a court must “accept the complaint's well-pleaded facts as true and view them in the light most favorable to the plaintiff.” Johnson v. Johnson, 385 F.3d 503, 529 (5th Cir. 2004). Federal Rule of Civil Procedure 8 requires that a pleading contain “a short and plain statement of the claim showing that the pleader is entitled to relief.” Fed.R.Civ.P. 8(a)(2). Thus, to survive a Rule 12(b)(6) motion to dismiss, the plaintiff must plead “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). “A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). A complaint need not include detailed facts to survive a Rule 12(b)(6) motion to dismiss. See Twombly, 550 U.S. at 555-56. However, a plaintiff must do more than recite the formulaic elements of a cause of action. See id. at 556-57. Additionally, the Court is not bound to accept as true a legal conclusion couched as a factual allegation in the complaint. See Iqbal, 556 U.S. at 678. Thus, although all reasonable inferences will be resolved in favor of the plaintiff, the plaintiff must plead “specific facts, not mere conclusory allegations.” Tuchman v. DSC Commc'ns Corp., 14 F.3d 1061, 1067 (5th Cir. 1994).

III. Discussion

Defendant AFD Holdings argues that, because it is a Canadian holding company with its headquarters and principal place of business in Canada, it is not subject to this Court's general jurisdiction. (Doc. 27 at 8). Defendant AFD Holdings also asserts that it is not subject to the Court's specific jurisdiction because “Plaintiff's Amended Complaint does not make one single specific allegation of any actionable conduct by Defendant AFD Holdings that could give rise to specific jurisdiction over AFD Holdings.” Id. at 11. Further, Defendant AFD Holdings argues that it is merely a holding company with no employees and thus could not have been Plaintiff's employer. Id. at 3-5. Lastly, Defendant AFD Holdings argues Plaintiff failed to plead facts sufficient to show it was his joint employer or part of an integrated enterprise. Id. at 15. In response, Plaintiff argues that ...