Opinion
Case No. 11-759 SC.
June 16, 2011
ORDER GRANTING DEFENDANTS' MOTION TO DISMISS
I. INTRODUCTION
Plaintiff Fatemeh Khalili ("Plaintiff") commenced this putative collective action, alleging violation of the Fair Labor Standards Act ("FLSA") by Defendants Comerica Bank, Comerica Incorporated, and Comerica Management Company, Inc. (collectively, "Defendants"). ECF No. 1 ("Compl."). Now Defendants move to dismiss Plaintiff's Complaint for failure to state a claim, or, in the alternative, for a more definitive statement. ECF No. 6 ("Mot."). Plaintiff filed an Opposition, and Defendants filed a Reply. ECF Nos. 10 ("Opp'n"), 12 ("Reply"). For the following reasons, the Court GRANTS Defendants' Motion.
II. BACKGROUND
As it must on a Federal Rule of Civil Procedure 12(b)(6) motion, the Court assumes the truth of the well-pleaded facts in Plaintiff's Complaint. However, because Plaintiff pleads very few facts in her Complaint, this section is brief. Plaintiff alleges that Comerica Management Company is a subsidiary of Comerica Bank, and that Comerica Bank is a subsidiary of Comerica Incorporated. Compl. ¶ 7. Plaintiff is a California resident who was employed by Defendants as a "Personal Banker" in Defendants' Los Altos, California banking center location from November 2005 until June 2008. Id. ¶¶ 3, 22. Plaintiff describes this position as a "non-exempt banking center position." Id. Plaintiff claims that although she "consistently worked in excess of forty hours in a workweek," Defendants failed to pay "proper overtime compensation." Id. ¶ 32. Plaintiff alleges Defendants had a "single, uniform policy or practice to deny overtime compensation." Id.
In alleging the facts underlying her claims, Plaintiff exclusively refers to the three Defendants collectively as "Defendants." Plaintiff suggests that this is justified because all three allegedly share a human resources department, as well as "information systems, technology, legal department and treasury." Id. ¶¶ 7-8.
Plaintiff's Complaint recites two claims: failure to pay both overtime and minimum wages under the FLSA. 29 U.S.C. §§ 207, 206. Pursuant to 29 U.S.C. § 216(b), Plaintiff claims to represent a class of "[a]ll current and former non-exempt banking center employees who worked for Defendants within the three years prior to the filing of this complaint and chose to opt-in to this action." Id. ¶ 15.
III. LEGAL STANDARD
A motion to dismiss under Federal Rule of Civil Procedure 12(b)(6) "tests the legal sufficiency of a claim." Navarro v. Block, 250 F.3d 729, 732 (9th Cir. 2001). Dismissal can be based on the lack of a cognizable legal theory or the absence of sufficient facts alleged under a cognizable legal theory.Balistreri v. Pacifica Police Dep't, 901 F.2d 696, 699 (9th Cir. 1990). "When there are well-pleaded factual allegations, a court should assume their veracity and then determine whether they plausibly give rise to an entitlement to relief." Ashcroft v. Iqbal, 129 S. Ct. 1937, 1950 (2009). However, "the tenet that a court must accept as true all of the allegations contained in a complaint is inapplicable to legal conclusions. Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice." Iqbal, 129 S. Ct. at 1950 (citing Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007)). The allegations made in a complaint must be both "sufficiently detailed to give fair notice to the opposing party of the nature of the claim so that the party may effectively defend against it" and sufficiently plausible such that "it is not unfair to require the opposing party to be subjected to the expense of discovery."Starr v. Baca, 633 F.3d 1191, 1204 (9th Cir. 2011).
IV. DISCUSSION
Defendants seek dismissal of Plaintiff's Complaint on the basis that it fails to state a claim with the specificity required byIqbal and Twombly. Defendants argue: "Plaintiff has failed to allow the Court to reasonably conclude that the allegations are more than a sheer possibility." Mot. at 1. Defendants argue that the "facts" Plaintiff pleads "are merely legal conclusions couched as facts," and that the Complaint is "devoid of specific calculations, estimates or examples of Defendants' purported failure to pay overtime or minimum wages or any other information that would allow Defendants to understand the basis for Plaintiff's class allegations or make their own calculations."Id. at 4.
Plaintiff responds that her Complaint satisfies Iqbal andTwombly. See Opp'n. She argues that Iqbal's plausibility standard is "context-specific," and that in the context of an FLSA claim, "[s]tating a plausible claim for relief . . . means little more than pleading that Defendants' employment policy is contrary to a statutory mandate, and Plaintiff and the class members were subject to those policies." Id. at 5. In support of this argument, Plaintiff cites to a pre-Iqbal order issued by this Court, Velasquez v. HSBC Financial Corp., No. 1:08-cv-1285, 2009 U.S. Dist. LEXIS 5428, at *13 (N.D. Cal. Jan, 16, 2009). Opp'n at 1. Plaintiff argues that requiring "specific factual details about each and every [FLSA] violation is impractical and unrealistic," in part because "Defendants, not Plaintiffs, are in possession of the class's employment records chronicling Defendants' history of violations." Id. at 7-8.
The Court begins its discussion by noting that the Ninth Circuit has recently opined on the policy rationale underlying the Iqbal and Twombly opinions: a complaint must include enough detail to provide a defendant with fair notice of the nature of the claim so it may effectively defend against it. Starr, 633 F.3d at 1204. It must also be sufficiently plausible as to justify subjecting the defendant to the expense of discovery. Id.
The Court finds Plaintiff's Complaint serves neither policy consideration. Plaintiff alleges that through an unidentified "policy or practice," Defendants have failed to pay "the proper overtime compensation" to Plaintiff and all non-exempt "banking center employees." The "facts" Plaintiff pleads in support of this allegation are almost entirely legal conclusions couched as facts. The actual facts pleaded can be counted on one hand: Plaintiff worked for Defendants, her title was "personal banker," and she worked for more than forty hours per week. Every other alleged "fact" is a legal conclusion: Plaintiff alleges Defendants failed to pay "proper" overtime, without alleging what made Defendants' actions "improper." She alleges that Defendants' failure to pay overtime "was and is a result of a single, uniform policy or practice" without identifying, or even suggesting, what this policy or practice was or how it was promulgated.
The actual facts pleaded do not provide Defendants with fair notice of the nature of Plaintiff's claims. It is unclear, for example, whether Plaintiff's claim is premised on exempt/non-exempt miscategorization, failure to properly calculate the overtime rate, or a failure to account for hours worked "off-the-clock." Because the Complaint is so broad and vague, Defendants cannot raise a meaningful defense to the action going forward. For example, the FLSA provides a two-year statute of limitations for claims of unpaid minimum wages or overtime; if such conduct was willful, the statute of limitations is three years. 29 U.S.C. § 255(a). Thus, to state a claim upon which relief could be granted, Plaintiff must allege plausible facts supporting a claim that Defendants violated FLSA at some point after February 18, 2008 (three years before the filing of this action), and that Defendants' violation was willful. Due to the vagueness of the Complaint, Defendants cannot raise such a challenge.
Nor do the facts pleaded justify subjecting Defendants to discovery. Discovery is costly, time-consuming, and invasive, and before a plaintiff can compel a defendant to open its books and sit for depositions, it must justify this imposition by stating a plausible claim for relief. See Starr, 633 F.3d at 1204. Here, Plaintiff makes a bald allegation that Defendants failed to pay her overtime, and seeks to represent a class of all banking center employees Defendants employed during the relevant period. In so doing, Plaintiff essentially states, "Defendants wrongly harmed me," without explaining the nature of that alleged harm. This is insufficient.
Plaintiff argues that requiring "specific factual details about each and every [FLSA] violation is impractical and unrealistic," in part because "Defendants, not Plaintiffs, are in possession of the class's employment records chronicling Defendants' history of violations." Opp'n at 7-8. The Court finds this argument to be unavailing. Plaintiff need not recite "every violation" to survive a Rule 12(b)(6) motion — she merely must provide a factual narrative that provides Defendants with notice of her claims and a plausible factual underpinning of those claims. There are many ways Plaintiff could do this without first acquiring Defendants' employment records, such as by providing more detail about the "policy or practice" Defendants allegedly implemented in violation of FLSA, how this policy or practice caused Plaintiff to be underpaid for overtime work, and why Plaintiff believes other similarly situated individuals have been underpaid.
For these reasons, the Court finds Plaintiff's Complaint to fall far below the relevant pleading standard. It therefore GRANTS Defendants' Motion to Dismiss. Because it is possible Plaintiff may cure the deficiencies in her Complaint through amendment, the Court DISMISSES Plaintiff's Complaint WITH LEAVE TO AMEND.
V. CONCLUSION
For the foregoing reasons, the Motion to Dismiss filed by Defendants Comerica Bank, Comerica Incorporated, and Comerica Management Company, Inc. is GRANTED; Plaintiff Fatemeh Khalili's Complaint is DISMISSED WITHOUT PREJUDICE. Plaintiff is granted thirty (30) days to file an amended complaint; if Plaintiff fails to amend her complaint within this period, the Court will dismiss this action WITH PREJUDICE.
IT IS SO ORDERED.