Villafane-Santiago v. The Facilitators Camp Ironhorse

JOSE VILLAFANE-SANTIAGO et al., Plaintiffs, v. THE FACILITATORS CAMP IRONHORSE et al., Defendants.

Civil No. 21-1261 (BJM)

United States District Court, D. Puerto Rico

April 12, 2022

OPINION & ORDER

BRUCE J. McGIVERIN, United States Magistrate Judge

Plaintiffs Jose Villafane-Santiago et al (“Plaintiffs”) bring the overlying action pursuant to the Fair Labor Standards Act (“FLSA”), 29 U.S.C. §§ 201 et seq., and local laws against defendants the Federal Emergency Management Agency (“FEMA”) and The Facilitators: Camp Ironhorse Inc. (“TFCI”), a nonprofit corporation based in Oklahoma. Plaintiffs allege that they have not been paid in accordance with the FLSA and local laws and request unpaid wages pursuant to 29 U.S.C § 201 et seq., unpaid accrued vacation time and bonuses pursuant to 3 L.P.R.A. § 501 et seq and 29 L.P.R.A. § 250, penalty fees pursuant to 29 U.S.C. § 216, and tort damages pursuant to Article 1536 of the Civil Code of Puerto Rico. Dkt. 8. FEMA has moved to dismiss the complaint as it pertains to FEMA pursuant to Federal Rules of Civil Procedure 12(b)(1) and 12(b)(6) for lack of subject matter jurisdiction, failure to state a claim upon which relief can be granted, sovereign immunity, and failure to exhaust administrative remedies. Dkt. 21. Plaintiffs oppose FEMA's motion but acknowledge that their local law and tort claims are not applicable to FEMA. Dkt. 31 at 15. FEMA has replied to Plaintiffs' motion in opposition, Dkt. 40, and Plaintiffs have entered a surreply. Dkt. 45. The parties have consented to proceed before me Dkt. 36 at 32; Dkt. 41; Dkt. 42. For the reasons set forth below, the motion to dismiss is GRANTED IN PART and DENIED IN PART.

APPLICABLE LEGAL STANDARDS

FEMA makes the present motion in accordance with Federal Rules of Civil Procedure 12(b)(1) and 12(b)(6). “Motions brought under Rule 12(b)(1) and Rule 12(b)(6) are subject to the same standard of review.” Hart v. Mazur, 903 F.Supp. 277, 279 (D.R.I. 1995).

12(b)(1) governs motions to dismiss for lack of subject-matter jurisdiction. Fed.R.Civ.P. 12(b)(1). The “party invoking the jurisdiction of a federal court carries the burden of proving its existence.” P.R. Tel. Co. v. Telecomm's Reg. Bd. of P.R., 189 F.3d 1, 7 (1st Cir. 1999). When deciding whether subject-matter jurisdiction exists, the court follows two general rubrics: (1) when a defendant challenges the legal sufficiency of the facts alleged, the court credits plaintiffs' factual allegations and draws reasonable inferences in his or her favor; and (2) when the defendant challenges the truth of facts alleged by the plaintiff and offers contrary evidence, the court weighs the evidence. Valentín v. Hosp. Bella Vista, 254 F.3d 358, 363 (1st Cir. 2001). “While the court generally may not consider materials outside the pleadings on a Rule 12(b)(6) motion, it may consider such materials on a Rule 12(b)(1) motion.” Gonzalez v. United States, 284 F.3d 281, 288 (1st Cir. 2002).

When faced with a motion to dismiss for failure to state a claim upon which relief can be granted under Rule 12(b)(6), the court “accept[s] as true all well-pleaded facts alleged in the complaint and draws all reasonable inferences therefrom in the pleader's favor” to determine if the complaint states a claim for which relief can in fact be granted. Santiago v. Puerto Rico, 655 F.3d 61, 72 (1st Cir. 2011). The court “may augment these facts and inferences with data points gleaned from documents incorporated by reference into the countercomplaint, matters of public record, and facts susceptible to judicial notice.” Starr Surplus Lines Ins. Co. v. Mountaire Farms Inc., 920 F.3d 111, 114 (1st Cir. 2019) (quoting Haley v. City of Boston, 657 F.3d 39, 46 (1st Cir. 2011)) (internal quotations omitted). In undertaking this review, the court must first “‘isolate and ignore statements in the complaint that simply offer legal labels and conclusions or merely rehash cause-of-action elements[, ]' then ‘take the complaint's well-pled (i.e., non-conclusory, non-speculative) facts as true, drawing all reasonable inferences in the pleader's favor, and see if they plausibly narrate a claim for relief.'” Zell v. Ricci, 957 F.3d 1, 7 (1st Cir. 2020) (alteration in original) (quoting Zenón v. Guzmán, 924 F.3d 611, 615-16 (1st Cir. 2019)). “Plausible … means something more than merely possible, ” and gauging the plausibility of a claim for relief is “a ‘context-specific' job” that requires drawing on “‘judicial experience and common sense.'” Schatz v. Republican State Leadership Comm., 669 F.3d 50, 55 (1st Cir. 2012) (quoting Ashcroft v. Iqbal, 556 U.S. 662, 679 (2009)).

FINDINGS OF FACT

The following facts are drawn from the amended complaint, Dkt. 8. Where there are legitimate conflicts apparent in the record regarding factual assertions, I have noted these conflicts. Plaintiffs have frequently mixed legal assertions with factual assertions in their filings; I have considered the intermingled factual assertions where possible, but I have excised conclusory legal assertions from this section. See, e.g., Papasan v. Allain, 478 U.S. 265, 286 (1986) (when considering a motion to dismiss, courts “are not bound to accept as true a legal conclusion couched as a factual allegation”).

On June 1, 2018, FEMA published a notice entitled “Opportunity for Funding for Disaster Case Management in Puerto Rico.” This invitation provided that funded entities would “implement and provide disaster case management in support of disaster survivors in the Commonwealth of Puerto Rico” and stated that they would “be selected to provide services to a population of approximately 23, 000 across the 78 municipalities [of Puerto Rico].” The application invitation also said that “FEMA will serve as both the managing entity and the award oversight agency for this program and be assigned to the FEMA Region II office and the Joint Recovery Office/LongTerm Recovery Office in Puerto Rico.”

TFCI submitted an application to FEMA. The proposal was accepted by FEMA via a letter dated July 27, 2018, which stated that TFCI would receive $7, 855, 680.00 to perform services on behalf of disaster victims for one year.

Plaintiffs were hired by TFCI pursuant to the agreement between FEMA and TFCI in order to perform public services on behalf of disaster victims in Puerto Rico. Under their contracts, Plaintiffs' regular schedule was eight hours a day and forty hours a week, and Plaintiffs were entitled to accrued vacations and a non-discretionary Christmas bonus. Some of the plaintiffs were also entitled to reimbursements for work-related travel. Payroll cycles were biweekly.

Plaintiffs claim that under the agreement between TFCI and FEMA, FEMA was supposed to pay Plaintiffs' salaries via a reimbursement method, but FEMA claims that this is a mistaken belief on Plaintiffs' part. FEMA's application invitation (attached to FEMA's countercomplaint) denotes that “[f]unding will be awarded on a reimbursable basis to recipients based on receipts and invoices submitted” and that there is “no set period for reimbursement”; rather, requests for reimbursement could be “submitted at the convenience of the recipient.” It appears likely that FEMA did not pay or determine Plaintiffs' salaries directly but instead generally agreed to reimburse TFCI when TFCI submitted receipts and invoices to FEMA in line with the agreement; however, this is not entirely clear. Plaintiffs state that TFCI requested reimbursement from FEMA in order to pay Plaintiffs' salaries, but that FEMA refused to provide the reimbursement.

From on or around June 6, 2019 until on or before September 30, 2019, all plaintiffs worked for TFCI. Plaintiffs were dismissed due to termination of the agreement between FEMA and TFCI.

Plaintiffs did not receive any of the following: compensation (wages or salaries) for their work subsequent to June 5, 2019; a Christmas bonus; payment for their accrued vacation time; or reimbursement for work-related travel.

DISCUSSION

I note at the outset that Plaintiffs have acknowledged that their tort and local law claims do not apply to FEMA. Dkt. 31 at 15. As a result, I will not consider these claims when ruling upon the present motion and I will grant FEMA's motion to dismiss those claims. I will not consider FEMA's argument that Plaintiffs have failed to exhaust administrative remedies; FEMA made that argument in response to Plaintiffs' local law and tort claims, and so it is no longer applicable here.

“When faced with motions to dismiss under both 12(b)(1) and 12(b)(6), a district court, absent good reason to do otherwise, should ordinarily decide the 12(b)(1) motion first.” Ne. Erectors Ass'n of BTEA v. Sec'y of Lab., Occupational Safety & Health Admin., 62 F.3d 37, 39 (1st Cir. 1995). I shall therefore first turn to the 12(b)(1) subject matter jurisdiction issue.

A. Rule 12(b)(1) Issue

When considering subject matter jurisdiction, FEMA must meet a particularly tough standard to prevail on the argument that Plaintiffs have not demonstrated that FEMA was their employer. “It is firmly established in our cases that the absence of a valid (as opposed to arguable) cause of action does not implicate subject-matter jurisdiction, i.e., the courts' statutory or constitutional power to adjudicate the case.” Steel Co. v. Citizens for a Better Env't, 523 U.S. 83, 89 (1998). “Dismissal for lack of subject-matter jurisdiction because of the inadequacy of the federal claim is proper only when the claim is ‘so insubstantial, implausible, foreclosed by prior decisions of this Court, or otherwise completely devoid of merit as not to involve a federal controversy.'” Id. (quoting Oneida Indian Nation of N.Y. v. County of Oneida, 414 U.S. 661, 666 (1974)).

As discussed at greater length in the section ...