Katz v. Dnc Services Corporation et al

MOTION TO DISMISS FOR FAILURE TO STATE A CLAIM

E.D. Pa.March 30, 2017

IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF PENNSYLVANIA BETHANY KATZ, et al. Plaintiffs, v. DNC SERVICES CORPORATION d/b/a DEMOCRATIC NATIONAL COMMITTEE, et al. Defendants. Civil Action No. 16-5800 DEFENDANT DEMOCRATIC NATIONAL COMMITTEE’S MOTION TO DISMISS SECOND AMENDED COMPLAINT Defendant Democratic National Committee (“DNC”), moves, pursuant to Federal Rule of Civil Procedure 12(b)(6) to dismiss, with prejudice, Plaintiffs’ claims against DNC. In support of this motion, DNC incorporates the accompanying Memorandum of Law. Case 2:16-cv-05800-CDJ Document 84 Filed 03/30/17 Page 1 of 2 - 2 - Dated: March 30, 2017 By: s/ Thomas J. Barton Thomas J. Barton, Esq. (PA ID 50603) Dennis M. Mulgrew, Jr., Esq. (PA ID 312359) DRINKER BIDDLE & REATH LLP One Logan Square, Ste. 2000 Philadelphia, PA 19103-6996 T: (215) 988-2700 F: (215) 988-2757 thomas.barton@dbr.com dennis.mulgrew@dbr.com Elisabeth C. Frost, Esq. PERKINS COIE LLP 700 Thirteenth Street, N.W., Suite 600 Washington, D.C. 20005-3960 T: 202.654.6200 F: 202.654.6211 D.C. Bar No. 443754 efrost@perkinscoie.com (Admitted Pro Hac Vice) William B. Stafford, PERKINS COIE LLP 1201 Third Avenue, Suite 4900 Seattle, WA 98101-3099 T: 206.359.8000 F: 206.359.9000 BStafford@perkinscoie.com (Admitted Pro Hac Vice) Attorneys for Defendants MISSOURI DEMOCRATIC PARTY; THE DEMOCRATIC PARTY OF VIRGINIA; and THE DNC SERVICES CORPORATION d/b/a DEMOCRATIC NATIONAL COMMITTEE Case 2:16-cv-05800-CDJ Document 84 Filed 03/30/17 Page 2 of 2 IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF PENNSYLVANIA BETHANY KATZ, et al. Plaintiffs, v. DNC SERVICES CORPORATION d/b/a DEMOCRATIC NATIONAL COMMITTEE, et al., Defendants. Civil Action No. 16-5800 MEMORANDUM OF LAW IN SUPPORT OF DEFENDANT DEMOCRATIC NATIONAL COMMITTEE’S MOTION TO DISMISS SECOND AMENDED COMPLAINT Case 2:16-cv-05800-CDJ Document 84-1 Filed 03/30/17 Page 1 of 38 TABLE OF CONTENTS Page I. INTRODUCTION ................................................................................................. 1 II. FACTS ALLEGED IN THE COMPLAINT ......................................................... 2 III. ARGUMENT ......................................................................................................... 3 A. Standard for a Motion to Dismiss For Failure to State a Claim............................. 3 B. Plaintiffs’ FLSA Claims Against DNC Fail as a Matter of Law ........................... 4 1. The Complaint Does Not Plausibly Allege that DNC Employed Plaintiffs ..................................................................................................... 4 a. The Complaint Does Not Plausibly Allege that DNC was a “Joint Employer” with the State Parties......................................... 4 (i) “Joint employer” analysis .................................................. 5 (ii) The Complaint does not allege that DNC had the authority to hire and fire Plaintiffs ..................................... 7 (iii) The Complaint contains no plausible allegation that DNC had the authority to promulgate work rules and assignments and to set conditions of employment........................................................................ 7 (iv) The Complaint does not allege that DNC participated in day-to-day employee supervision .............. 8 (v) The Complaint does not allege that DNC had control of employee records ............................................... 9 b. The Complaint Does Not Plausibly Allege that DNC and the State Parties Were a “Single Employer” .................................. 9 (i) The Complaint does not sufficiently allege interrelation of DNC and State Party operations ............. 10 (ii) The Complaint does not allege common management of DNC and any State Party ....................... 12 (iii) The Complaint contains no plausible allegations of centralized control of labor relations ............................... 13 (iv) The Complaint does not allege common ownership or financial control ........................................................... 13 Case 2:16-cv-05800-CDJ Document 84-1 Filed 03/30/17 Page 2 of 38 TABLE OF CONTENTS (continued) Page 2. Plaintiffs Do Not Plausibly Allege that They Are “Covered” by the FLSA ........................................................................................................ 14 a. Plaintiffs Do Not Allege Individual Coverage under the FLSA ............................................................................................ 14 b. Plaintiffs Do Not Allege Enterprise Coverage under the FLSA ............................................................................................ 18 C. The Court Should Decline to Exercise Supplemental Jurisdiction Over Plaintiffs’ State Law Claims ................................................................................ 20 D. The Complaint Fails to Allege Plausible Claims Against DNC for Relief under Any Applicable State Minimum Wage Law.............................................. 24 1. Plaintiffs Fail to State a Claim Under Pennsylvania’s Minimum Wage Law ................................................................................................ 24 2. Plaintiffs Fail to State a Claim Under North Carolina’s Minimum Wage Law ................................................................................................ 25 3. Plaintiffs Fail to State a Claim Under Missouri’s Minimum Wage Law .......................................................................................................... 26 4. Plaintiffs Fail to State a Claim Under Michigan’s Minimum Wage Law .......................................................................................................... 27 E. The Complaint Fails to State a Plausible Civil Conspiracy Claim ...................... 27 1. Plaintiffs Cannot Evade the FLSA’s Procedural Requirements by Recasting Their FLSA Claim as a Common Law Conspiracy Claim ........................................................................................................ 28 2. The Complaint Fails to Allege the Elements of Common Law Conspiracy Under Any of the Relevant State Jurisprudence ................... 30 3. The Conspiracy Claims Must Be Dismissed Because, if Defendants Qualify as “Joint Employers” or as a “Single Employer,” the Claims Would be Barred by the Intracorporate Conspiracy Doctrine ................................................................................ 32 IV. CONCLUSION .................................................................................................... 33 Case 2:16-cv-05800-CDJ Document 84-1 Filed 03/30/17 Page 3 of 38 I. INTRODUCTION Defendant DNC Services Corporation (“DNC”) moves under Rule 12(b)(6) of the Federal Rules of Civil Procedure to dismiss the Second Amended Individual, Collective, and Class Action Complaint (“Complaint”) as against DNC. Before the Court is Plaintiffs’ third attempt to plead plausible claims for relief against DNC.1 Plaintiffs’ latest effort fares no better than their earlier attempts. With regard to the Fair Labor Standards Act (“FLSA”) claims for unpaid overtime wages, which Plaintiffs purport to bring on behalf of themselves and other organizers employed by a host of different entities across the country, the Complaint fails sufficiently to allege that DNC was Plaintiffs’ (or any other organizers’) employer. For the same reason, DNC moves to dismiss the claims brought against it under various state minimum wage laws. Alternatively, DNC moves to dismiss all claims brought under the FLSA because the Complaint fails to allege that the FLSA applies to Plaintiffs (or the other organizers) under either an “individual” or “enterprise” theory of coverage. DNC also moves to dismiss all state common law conspiracy claims. First, these claims are an obvious and illegitimate attempt to evade the procedural rules governing FLSA claims and they are preempted by federal law. Second, and in any event, the Complaint fails adequately to allege the elements of a conspiracy claim. Third, if this Court finds that Plaintiffs successfully pled that DNC was Plaintiffs’ employer (something DNC adamantly denies), and that Plaintiffs otherwise pled plausible conspiracy claims, then those claims would be barred by the intra- corporate conspiracy doctrine. Fourth and finally, the Court should decline to exercise supplemental jurisdiction over Plaintiffs’ various state law claims. Should the Court dismiss Plaintiffs’ individual wage claims and conspiracy claims against DNC, it need not address their purported class and collective claims against DNC. 1 On January 19, 2017, the day DNC’s response to Plaintiff Bethany Katz’s initial Complaint was due, Plaintiffs filed an amended complaint (Dkt. #37). On February 21, 2017, the day after DNC filed a motion to dismiss the amended Complaint, Plaintiffs sought and obtained Defendants’ leave to try again and file a second amended complaint. The changes in Plaintiffs’ latest Complaint are limited to an effort to bolster their claims that the FLSA “covers” them. See Compl. ¶¶ 101-110. Case 2:16-cv-05800-CDJ Document 84-1 Filed 03/30/17 Page 4 of 38 2 II. FACTS ALLEGED IN THE COMPLAINT The Complaint alleges that the seven Plaintiffs in this case were employed in seven different states by seven different state-specific entities, namely, defendants the Pennsylvania Democratic Party, the Arizona Democratic Party, the Florida Democratic Party, the Michigan Democratic Party, the Missouri Democratic Party, the North Carolina Democratic Party, and the Democratic Party of Virginia (collectively, the “State Parties”). Compl. ¶¶ 2-8.2 The State Parties raise money, hire staff, and coordinate strategy to support local, state, and national candidates in their respective states. Id. ¶¶ 32-38. Plaintiffs allege that they were “directly employed” as “organizers” or “field organizers” by the respective State Parties at various times between May 2016 and November 2016. Id. ¶¶ 91-97. As organizers, Plaintiffs’ duties consisted of making phone calls to voters, assisting in voter registration efforts, soliciting volunteers, canvassing, and accessing and entering data into a “Votebuilder” database. Id. ¶ 101. Plaintiffs do not allege that they were employed “directly” by DNC. Rather, they assert baldly-and only “[u]pon information and belief”-that all state democratic parties in the country-both the named State Parties and other unnamed entities-are “vertically integrated with [the] DNC” and, “consequently, [DNC] [is] a joint employer of all organizers employed by all state parties, including Defendants.” Id. ¶¶ 98-99.3 Alternatively, the Complaint also alleges that the State Parties and DNC are a “single enterprise, single employer.” See id. ¶ 12. The Complaint alleges that DNC is responsible for governing the Democratic National Party and that it raises money, hires staff, and coordinates strategy to support candidates throughout the United States for local, state, and national office. Id. ¶ 31. As the caption of the Complaint notes, DNC is located in Washington, D.C. See id. at p. 1. The Complaint makes a few other “information and belief” allegations regarding DNC. According to the Complaint, DNC and the State Parties share resources and funds to assist in a 2 As is proper for a motion brought under Rule 12(b)(6), the well-pleaded factual allegations of the Complaint are treated as true for purposes of this motion only. 3 Plaintiffs’ allegations about unnamed, non-defendant, state Democratic parties are not separately addressed in this motion because none of these unnamed entities allegedly employed any of the Plaintiffs. Accordingly, such allegations have no bearing on the subject of this motion (Plaintiffs’ own claims against the DNC). Case 2:16-cv-05800-CDJ Document 84-1 Filed 03/30/17 Page 5 of 38 3 nationally coordinated campaign, which includes the coordination and direction of strategic initiatives. Id. ¶¶ 39, 41. The Complaint further alleges that DNC directs the State Parties to hire and retain organizers to assist in these functions, directs the State Parties regarding the qualifications and job duties of organizers, and directs the State Parties to classify organizers as overtime-exempt under state and federal law. Id. ¶ 39. In contrast, even this newest, third version of the Complaint does not allege that DNC plays any role itself in the hiring processes of any of the State Parties, such as selecting particular individuals who will or will not be hired, or setting their rates of pay. Nor does the Complaint allege that DNC was or is in any way involved in the day-to-day activities of any State Party. Beyond these brief, vague, and conclusory allegations, the Complaint contains no factual allegations to support the assertion that DNC is a “joint employer” or a “single employer” and, accordingly, an appropriate defendant in this litigation. III. ARGUMENT A. Standard for a Motion to Dismiss For Failure to State a Claim Under Federal Rule of Civil Procedure 12(b)(6), a motion to dismiss should be granted if the Court finds that a plaintiff’s claims, as alleged in the Complaint, lack facial plausibility. See Warren Gen. Hosp. v. Amgen Inc., 643 F.3d 77, 84 (3d Cir. 2011) (citing Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555-56 (2007)); see also Ashcroft v. Iqbal, 556 U.S. 662, 697 (2009). “[C]onclusory or bare-bones allegations” cannot sustain a complaint under this standard, nor will “threadbare recitals of the elements of a cause of action, supported by mere conclusory statements . . . suffice.” Warren Gen. Hosp., 643 F.3d at 84 (citing Twombly, 550 U.S. at 555). In considering whether a complaint is adequately pled to survive a 12(b)(6) motion, courts apply a two-pronged analysis. Iqbal, 556 U.S. at 680-81. First, the court identifies “the allegations in the complaint that are not entitled to the assumption of truth,” that is, allegations which are legal conclusions, bare assertions, or merely conclusory. Id. at 678-81. Second, the Court considers factual allegations to determine if they plausibly show an entitlement to relief. Id. at 681. Case 2:16-cv-05800-CDJ Document 84-1 Filed 03/30/17 Page 6 of 38 4 “[W]here the well-pleaded facts do not permit the court to infer more than the mere possibility of misconduct, the complaint has alleged-but it has not ‘show[n]’-‘that the pleader is entitled to relief.’” Id. at 679 (quoting Fed. R. Civ. P. 8). B. Plaintiffs’ FLSA Claims Against DNC Fail as a Matter of Law 1. The Complaint Does Not Plausibly Allege that DNC Employed Plaintiffs The Complaint fails to adequately allege that DNC actually employed Plaintiffs (or any other organizers) for purposes of the FLSA. Plaintiffs’ FLSA claims should be dismissed. The Complaint alleges that Plaintiffs were misclassified as exempt under the FLSA and, as a result, were not paid overtime compensation. See Compl. ¶¶ 137, 139. The Complaint further alleges that Plaintiffs were “directly employed” as organizers by their respective State Parties, but does not allege that they were directly employed by DNC. Instead, Plaintiffs attempt to impute liability to DNC by repeatedly reciting the unsupported legal conclusion that the State Parties and DNC were “joint employers” because the State Parties were “vertically integrated” with DNC. See id. ¶¶ 12, 98-99, 133, 143, 151, 163, 179. Plaintiffs also allege in passing that DNC and the State Parties are “horizontally integrated” and a “single employer.” Id. ¶¶ 12, 133. Plaintiffs purport to bring their FLSA claims for unpaid wages against DNC on behalf of themselves and other persons employed as organizers by any and “all other state democratic committees.” Id. ¶ 43. These claims cannot be sustained against DNC for the reasons that follow. a. The Complaint Does Not Plausibly Allege that DNC was a “Joint Employer” with the State Parties Plaintiffs allege that DNC is a “joint employer” with the State Parties because it is “vertically” (id. ¶¶ 98, 133, 143, 151, 163, 179) and “horizontally” integrated with them (id. ¶ 133). The Department of Labor and some courts have distinguished between “vertical” and “horizontal” joint employers,4 but the Third Circuit does not. Thus, the two concepts are analyzed together below. 4 Compare Opinion Letter Fair Labor Standards Act (FLSA), 2016 WL 284582 (Dep’t of Labor Jan. 20, 2016), ¶ II (“[Vertical] [j]oint employment may . . . exist when an employee of [an intermediary] employer . . . is also, with regard to the work performed for the intermediary employer, economically dependent on another employer[.]”) with Case 2:16-cv-05800-CDJ Document 84-1 Filed 03/30/17 Page 7 of 38 5 (i) “Joint employer” analysis As legal conclusions, Plaintiffs’ “joint employer” assertions are not entitled to the assumption of truth. Iqbal, 556 U.S. at 679. And the Complaint fails to state a claim against DNC because it does not allege plausible factual allegations supporting Plaintiffs’ legal conclusions. Specifically, Plaintiffs fail to plausibly allege that DNC exercised “significant control” over the employment of any of the named Plaintiffs, which is a factual predicate to joint employer liability. In re Enterprise Rent-A-Car Wage & Hour Employment Practices Litig., 683 F.3d 462, 468 (3d Cir. 2012) (citing N.L.R.B. v. Browning-Ferris Indus. of PA., 691 F.2d 1117, 1124 (3d Cir. 1982)) (“Enterprise”). The Third Circuit has adopted four key factors (the “Enterprise factors”) to determine whether a defendant exercises sufficient control to qualify as a joint employer. They require the Court to consider whether the employer in question has: 1) authority to hire and fire the relevant employees; 2) authority to promulgate work rules and assignments and to set the employees’ conditions of employment: compensation, benefits, and work schedules, including the rate and method of payment; 3) involvement in day-to-day employee supervision, including employee discipline; and 4) actual control of employee records, such as payroll, insurance, or taxes. Id. at 469. This Court has previously dismissed an FLSA collective action claim because the complaint failed to include sufficient factual content for the Court to apply the Enterprise test. Richardson v. Bezar, No. CV 15-0772, 2015 WL 5783685 (E.D. Pa. Oct. 5, 2015). The Court summarized the Complaint in that case as follows: The Complaint’s pertinent paragraphs include allegations that Defendant is an employer as defined by the FLSA and “acted in the interest of an employer towards Plaintiffs and other similarly id. (“[Horizontal] [j]oint employment may exist when two (or more) employers each separately employ an employee and are sufficiently associated with or related to each other with respect to the employee.”) (emphasis added); see also Chao v. A-One Med. Servs., Inc., 346 F.3d 908, 917 (9th Cir. 2003); Berrocal v. Moody Petroleum, Inc., No. 07-22549, 2010 WL 1372410, at *13 n. 16 (S.D. Fla. Mar. 31, 2010). Case 2:16-cv-05800-CDJ Document 84-1 Filed 03/30/17 Page 8 of 38 6 situated employees at all material times, including without limitation directly or indirectly controlling the terms of employment of Plaintiffs and other similarly situated employees.” Plaintiffs state that Defendant was VPB’s President managing, owning and/or operating VPB and VPFS, and he “regularly exercised the authority to hire and fire employees, determine the work schedules of employees, set the rate of pay of employees, and control the finances and operations of [VPB] and [VPFS].” Id. at *2 (citations omitted). The Court found that, “[o]ther than these general allegations, the Complaint [was] void of any factual allegations by which [the court] [could] conclude that Defendant [was] Plaintiffs’ joint employer under the FLSA.” Id.5 Here, the Complaint similarly fails to allege facts sufficient to support a joint employer finding; indeed, it fails entirely to allege that DNC exercised any control over Plaintiffs, let alone “significant control” as evaluated by the Enterprise factors.6 5 See also Garcia v. Nunn, No. 13-6316, 2015 WL 5585451, at *5 (E.D. Pa. Sept. 23, 2015) (granting motion to dismiss where, although defendant was “alleged to have had some control over” the plaintiffs there was “nothing in the Complaint which allege[d] that [defendant] had authority to hire and fire the plaintiff janitors; that it had the authority to set the conditions of employment, including compensation, benefits, and work schedules; that it had the authority to discipline the plaintiff janitors; or that it kept employee records for payroll, insurance, or taxes.”); Attanasio v. Cmty. Health Sys., Inc., 863 F. Supp. 2d 417, 425-26 (M.D. Pa. 2012) (same, where the plaintiffs alleged the putative joint employer had (a) “the ability to hire and fire Plaintiffs and all of the Class members;” (b) to “control the work performed by Plaintiffs and all of the Class members;” (c) to “direct the manner in which Plaintiffs and all of the Class members performed their work;” (d) to “inspect and supervise the work Plaintiffs and all of the Class members performed;” (e) to “promulgate policies and procedures (including the work, time, pay, overtime, appearance and uniform maintenance policies and procedures at issue here) governing the employment of Plaintiffs and all of the Class members;” (f) to “enforce these policies and procedures with respect to Plaintiffs and all of the Class members;” and (g) to “determine the pay given to Plaintiffs and all of the Class members”). 6 Some district courts in Pennsylvania have found that complaints did, in fact, state claims for failure to pay wages by relying on the existence of a joint employment relationship, but the facts of those cases are distinguishable. See Reed v. Friendly’s Ice Cream, LLC, No. 15-CV-0298, 2016 WL 2736049, at *3 (M.D. Pa. May 11, 2016) (complaint sufficiently plead joint employment relationship where plaintiffs alleged that parent company “was actively engaged in the day-to-day operation of all Friendly’s restaurants, . . . set the policies for all Friendly’s restaurants, including policies relating to hiring, training, hours of work, overtime, timekeeping and compensation[,] . . . provide[d] on-going operations support to franchisees through an assigned Franchise Business Consultant, ha[d] the authority to hire and fire employees, inspect and supervise their work through quality assurance visits, and use[d] the same payroll system at all restaurants.”) (citations and quotation marks omitted); Rapczynski v. DirecTV LLC, & Mastec North America, Inc., No. 3:14-CV-2441, 2016 WL 1071022, at *5 (M.D. Pa. Mar. 17, 2016) (same, where complaint alleged that the joint employer, among other things, “control[led] its Providers through detailed Provider Agreements including mandatory policies and procedures handed down to technicians[,] . . . created Plaintiffs’ daily work orders, . . . determined whether their work merited compensation and at what pay rate, and . . . used a network of quality control personnel and field managers to oversee their work.”). Case 2:16-cv-05800-CDJ Document 84-1 Filed 03/30/17 Page 9 of 38 7 (ii) The Complaint does not allege that DNC had the authority to hire and fire Plaintiffs The Complaint is devoid of any allegations that could satisfy the first Enterprise factor, which asks whether the alleged employer has “authority to hire and fire employees.” Enterprise, 683 F.3d at 468. Here, the Complaint alleges only that DNC “direct[ed] [state parties] . . . to hire and retain organizers” generally, Compl. ¶ 39, not that it did so itself or exercised any control over the process, such as by interviewing prospective employees, or that it played any role in specific hiring or discharge decisions. Cf. Solis v. A-1 Mortg. Corp., 934 F. Supp. 2d 778, 791 (W.D. Pa. 2013) (finding joint employment authority present where, inter alia, “defendant interviewed prospective employees and advised [the President of the direct employer] about which candidates to hire”). In short, the Complaint fails to allege, as required, that DNC had the authority to hire Plaintiffs (or other employees) on behalf of the state parties or to fire Plaintiffs or other employees. See, e.g., Garcia, 2015 WL 5585451, at *4 (allegations of joint employer status insufficient where “is no mention in the amended complaint that Defendant had the authority to hire and fire the plaintiff employees”). (iii) The Complaint contains no plausible allegation that DNC had the authority to promulgate work rules and assignments and to set conditions of employment The Complaint also fails sufficiently to allege facts to support the second relevant factor, which considers whether the alleged employer has “authority to promulgate work rules and assignments and to set the employees’ conditions of employment: compensation, benefits, and work schedules, including the rate and method of payment[.]” Enterprise, 683 F.3d at 468. The Complaint states only that DNC “direct[ed]” [the State Parties] regarding the qualifications and job duties of organizers, and further direct[ed] [the State Parties] to classify organizers as overtime-exempt under state and federal law.” Compl. ¶ 39. The first clause of this sentence is conclusory and lacks any description of how or in what manner DNC allegedly directed the qualifications and job duties of organizers. See Richardson, 2015 WL 5783685 at *2 (rejecting generic allegation that defendant “regularly exercised the Case 2:16-cv-05800-CDJ Document 84-1 Filed 03/30/17 Page 10 of 38 8 authority to hire and fire employees, determine[d] the work schedules of employees, set the rate of pay of employees, and control[led] the finances and operations”); Attanasio, 863 F. Supp. 2d at 425 (same, where complaint “omit[ted] particularized assertions explaining the specific role [the joint employer] played in regard to the Plaintiffs within this administrative structure”). But even if the statement were supported by plausible factual allegations (which it is not), it nevertheless fails to allege that DNC “promulgate[d] work rules and assignments” once Plaintiffs were hired. Compare Solis, 934 F. Supp. 2d at 792 (evidence supported that defendant was a “joint employer” where defendant “assist[ed] the employees with any job-related concerns and issues[,] . . . communicated policy information, such as the requirements of the employee dress code, to the employees[,] . . . handled A-1 scheduling issues such as vacations and dealt with the employees’ hours, their start times, and the lengths of their workdays[,] . . . and had authority to write out some company checks and to distribute the payroll[.]”), with Compl. ¶ 39. The second clause of the quoted sentence (i.e., DNC directed the State Parties to classify organizers as overtime-exempt), even if true, is insufficient to show that DNC controlled compensation in any meaningful way, that is, that DNC controlled the “rate and method of payment.” Enterprise, 683 F.3d at 469; see also Attanasio, 863 F. Supp. 2d at 425 (finding insufficient conclusory allegation that putative joint employer “determine[s] the pay given to Plaintiffs”). Thus, the second factor also weighs against a finding of a joint employment relationship. See Attanasio, 863 F. Supp. 2d at 525 (dismissing complaint where second Enterprise factor was supported only through conclusory statements). (iv) The Complaint does not allege that DNC participated in day- to-day employee supervision The Complaint also fails to make any allegations that would satisfy the third Enterprise factor bearing on the existence of a joint employment relationship, that is, whether the alleged employer was involved in the “day-to-day supervision of the employee, including employee discipline.” Enterprise, 683 F.3d at 468. Simply put, the Complaint contains no allegations that Case 2:16-cv-05800-CDJ Document 84-1 Filed 03/30/17 Page 11 of 38 9 DNC was involved in the day-to-day supervision of Plaintiffs or in taking disciplinary action against them. Attanasio, 863 F. Supp. 2d at 425 (granting 12(b)(6) motion on claim of joint employer status and finding it “notable that no daily control is alleged”). (v) The Complaint does not allege that DNC had control of employee records Finally, the Complaint also fails to make any allegations that would support finding the presence of the fourth joint employment factor, that is, whether the alleged employer has “control of employee records, such as payroll, insurance, or taxes.” Enterprise, 683 F.3d at 468. The Complaint is devoid of any allegations that DNC maintained control of Plaintiffs’ employment records. In sum, the Complaint fails to allege facts bearing on any of the Enterprise factors, much less facts that, if established, would support a joint employer finding. The Complaint does, of course, allege a general relationship between DNC and the State Parties, but it does not sufficiently allege that DNC employs the State Parties’ employees. Thus, the Complaint does not adequately plead that DNC jointly employed Plaintiffs or any of the other organizers. b. The Complaint Does Not Plausibly Allege that DNC and the State Parties Were a “Single Employer” In addition to their primary contention that DNC is a “joint” employer of the State Parties’ employees, Plaintiffs also assert in passing that all Defendants constitute a “single employer.” Compl. ¶ 12. This is another legal conclusion that is not entitled to the assumption of truth, is not supported by the Complaint’s factual allegations, and hence cannot survive scrutiny.7 7 As a threshold matter, it is not clear that the “single-employer” test is available to plaintiffs bringing FLSA claims in the Third Circuit. See Jackson v. Art of Life, Inc., 836 F. Supp. 2d 226, 236 (E.D. Pa. 2011) (“[T]here is no Third Circuit precedent which speaks to the issue of whether the integrated enterprise test can be used in this circuit to impose direct liability in a FLSA overtime case.”). In Jackson, the district court concluded that the single-employer test could apply in the FLSA context and relied on the factors of the traditional NLRB “integrated enterprise” test. See id. at 235 (citing Pearson v. Component Tech. Corp., 247 F.3d 471 (3d Cir. 2001)). Because, as discussed below, the Complaint here cannot meet that test, this Court need not decide whether the Third Circuit would or should even recognize such liability under the proper circumstances. It should also be noted that the Third Circuit has adopted a slightly different “single-employer” test in the Title VII context, which looks at: “(1) the unity of ownership, management, and business functions; (2) whether the entities present themselves as a single entity to Case 2:16-cv-05800-CDJ Document 84-1 Filed 03/30/17 Page 12 of 38 10 “The ‘single-employer’ theory is distinct from the ‘joint-employer’ concept.” Davis v. Abington Mem’l Hosp., 817 F. Supp. 2d 556, 564 (E.D. Pa. 2011). As the Davis court explained: [A] finding that companies are joint employers assumes in the first instance that companies are what they appear to be-independent legal entities that have merely historically chosen to handle jointly . . . important aspects of their employer-employee relationship. The single-employer theory, on the other hand, examines whether separate corporations are not what they appear to be, that in truth they are but divisions or departments of a single enterprise.” Id. (citations and quotation marks omitted and alterations in original). “Under this theory, ‘nominally separate companies may be so interrelated that they constitute a single employer.’” Id. (quoting Torres-Negron v. Merck & Co., Inc., 488 F.3d 34, 41 (1st Cir. 2007)). The four factors of the “single-employer” test (also known as the “integrated enterprise test”) are “(1) interrelation of operations, (2) common management, (3) centralized control of labor relations, and (4) common ownership or financial control.” Nesbit v. Gears Unlimited, Inc., 347 F.3d 72, 84 (3d Cir. 2003). “No one factor is controlling, although the first three factors, particularly centralized control over labor relations, are generally considered more compelling that [sic] the fourth.” Grane Health Care v. N.L.R.B., 712 F.3d 145, 150 (3d Cir. 2013). Here, the Complaint fails to allege facts sufficient to support any of these factors, much less a finding that a single-employer relationship is adequately alleged. (i) The Complaint does not sufficiently allege interrelation of DNC and State Party operations The Complaint fails to satisfy the first factor of the single-employer test, which considers “interrelation of operations” between multiple alleged employers. Nesbit, 347 F.3d at 84. Two third parties; (3) whether the parent company indemnifies the expenses or losses of its subsidiary; and (4) whether one entity does business exclusively with the other.” Isenhour v. Outsourcing of Millersburg, Inc., No. 1:14-CV- 1170, 2015 WL 6447512, at *11 (M.D. Pa. Oct. 26, 2015); see also Nesbit, 347 F.3d at 87. The Complaint would also fail under the test that applied in the Title VII context. Case 2:16-cv-05800-CDJ Document 84-1 Filed 03/30/17 Page 13 of 38 11 entities’ operations may be interrelated, for example, where all of the work performed by one is done pursuant to a contract with another, and the former has no independent assets of its own. See Jackson, 836 F. Supp. 2d at 234. Mere coordination or direction of strategic initiatives and hiring policies, however, is insufficient to plead “interrelation of operations.” See, e.g., Attanasio, 863 F. Supp. at 425 (no “interrelation of operations” even where plaintiffs alleged defendants followed numerous common policies and received wages from defendants “that were determined by common systems and methods that [d]efendants selected and controlled”); Ferrell v. Harvard Indus., Inc., No. CIV. A. 00-2707, 2001 WL 1301461, at *23 (E.D. Pa. Oct. 23, 2001) (“plaintiff may not succeed in showing the requisite level of interrelation simply by proving that [one defendant’s] chain of command ultimately reached to [the other defendant]-day-to-day control must be evident” and “showing that [defendant] voted in directors’ meetings and set general policies would be insufficient to establish this prong”). Here, the Complaint falls far short. Plaintiffs contend that DNC and the State Parties comprise “a single enterprise, single employer” simply because DNC exercised a “sufficient amount of operational control” over the State Parties for a brief period in connection with the 2016 presidential campaign, id. ¶ 12, and that the Defendants shared “resources and funds” to assist in “DNC’s nationally coordinated campaign,” which included the coordination and direction of strategic initiatives. Id. ¶¶ 39, 41. At the same time, however, the Complaint admits that the State Parties each independently “raises money, hires staff, and coordinates strategy to support candidates throughout [their respective states] for local, state, and national office.” Id. ¶¶ 32-38. In other words, this is scarcely a case where the DNC and State Parties “are not what Case 2:16-cv-05800-CDJ Document 84-1 Filed 03/30/17 Page 14 of 38 12 they appear to be”-i.e., independent entities that worked in coordination in connection with the 2016 presidential election. Davis, 817 F. Supp. 2d at 564. Moreover, it is noteworthy that Plaintiffs’ allegations are exactly the same with respect to each State Party (and, indeed, as to all unnamed, non-party “state democratic committees,” as well). See Compl. ¶¶ 39, 99. As explained by the district court in Attanasio, non-particularized, boilerplate allegations are insufficient: “Plaintiffs’ allegations establishing employer control by WVHCS and later CHS are effectively identical. This forecloses the possibility that these pleadings are particularized and demonstrates that these allegations are devoid of any actual factual support.” 863 F. Supp. 2d at 425. That is precisely what Plaintiffs have done: offer identical allegations with respect to seven State Parties-and other unnamed state Democratic parties throughout the country-without a single deviation. Indeed, that is the definition of boilerplate. (ii) The Complaint does not allege common management of DNC and any State Party The Complaint also fails to satisfy the second factor of the single-employer test, which considers whether there is “common management.” Nesbit, 347 F.3d at 84. The Complaint contains no allegations that DNC shares common management with any State Party-let alone that all Defendants are run by the same common management. Indeed, the only factual allegations in the Complaint related to this factor highlight the Defendants’ independence, as the DNC and each State Party is alleged to be “responsible for governing” a different enterprise. Compl. ¶¶ 31-38. There are no other factual allegations about the legal status, organization, structure, leadership, or management of any Defendant. Case 2:16-cv-05800-CDJ Document 84-1 Filed 03/30/17 Page 15 of 38 13 (iii) The Complaint contains no plausible allegations of centralized control of labor relations The Complaint similarly fails to satisfy the third factor of the single-employer test, which considers whether there is “centralized control of labor relations.” Nesbit, 347 F.3d at 84. As a general matter, this factor is met if the alleged additional employer effectively controls day-to- day employment decisions. See Attanasio, 863 F. Supp. 2d at 423. As discussed above, Plaintiffs allege vaguely and conclusorily that DNC directs the State Parties (a) to hire and retain organizers; (b) regarding organizers’ qualifications and job duties, and (c) to classify organizers as overtime-exempt under state and federal law. Compl. ¶ 39. Notably lacking from the Complaint are any allegations that DNC was involved in the actual hiring (or firing) of any Plaintiff, or that it controlled (or was even involved in) any day-to-day employment decisions for any State Party employees. See Braden v. Cnty. of Washington, 749 F. Supp. 2d 299, 310 n.15 (W.D. Pa. 2010) (“As a linguistic matter, the term ‘labor relations’ conjures the numerous interchanges between employer and employee.”). Instead, the Complaint separately alleges that every State Party “hires staff” for its own operations. Compl. ¶¶ 32-38. (iv) The Complaint does not allege common ownership or financial control Finally, the Complaint fails to satisfy the fourth factor of the single-employer test, which looks to whether there is “common ownership or financial control.” Nesbit, 347 F.3d at 84. The Complaint contains no allegations that DNC and the State Parties share common ownership. While the Complaint does allege that “Defendants share resources and funds[]” toward a shared aim of electing Democrats, there is no allegation that DNC exercises financial “control” over any State Party. To the contrary, the Complaint alleges that each State Party conducts its own fund- raising. Compl. ¶¶ 32-38. Case 2:16-cv-05800-CDJ Document 84-1 Filed 03/30/17 Page 16 of 38 14 As a result, the Complaint fails to adequately plead that DNC and each of the State Parties is a “single employer.” Plaintiffs cannot pursue claims against DNC by formulaically reciting the allegation that DNC is a “joint employer” or “single employer.” 2. Plaintiffs Do Not Plausibly Allege that They Are “Covered” by the FLSA Even if the Complaint sufficiently alleged that DNC employed Plaintiffs under either theory discussed above, their claims against DNC must still be dismissed because the Complaint fails to adequately allege a basis for finding that the FLSA applies in this situation. To make out a viable FLSA claim, plaintiffs must “establish that they were employees who were ‘covered’ by the FLSA’s overtime wage provision.” Razak v. Uber Techs., Inc., No. CV 16-573, 2016 WL 5874822, at *5 (E.D. Pa. Oct. 7, 2016). As the court in Razak explained: The FLSA extends coverage to employees by two means: (1) the employee himself may be engaged in commerce or in the production of goods for commerce (so-called “individual” coverage), see 29 U.S.C. § 207(a)(1)(1); or (2) the employee may be employed in an enterprise engaged in commerce or the production of goods for commerce (so-called “enterprise coverage.”), see 29 U.S.C. § 203(s)(1). Id. The Complaint fails to set out plausible factual allegations establishing either basis of FLSA coverage. a. Plaintiffs Do Not Allege Individual Coverage under the FLSA The Complaint does not and cannot allege that the FLSA permits claims against the DNC under an “individual coverage” theory, because an employee is subject to such coverage only if he or she is “engaged in commerce or in the production of goods for commerce[.]” Id. Employees are “engaged in commerce” under the FLSA “when they are performing work involving or related to the movement of persons or things . . . among the several States or between any State and any place outside thereof.” 29 C.F.R. § 779.103. Federal regulations provide several examples: Typically, but not exclusively, employees engaged in interstate or foreign commerce include employees in distributing industries, such as wholesaling or retailing, who sell, handle or otherwise Case 2:16-cv-05800-CDJ Document 84-1 Filed 03/30/17 Page 17 of 38 15 work on goods moving in interstate commerce as well as workers who order, receive, pack, ship, or keep records of such goods; clerical and other workers who regularly use the mails, telephone or telegraph for interstate communication; and employees who regularly travel across State lines while working. Id. Here, the Complaint does not allege that Plaintiffs or the other organizers were engaged in commerce. In fact, the Complaint implies the opposite. Plaintiffs’ duties, as described in the Complaint, were hyper-local and did not involve trade or commerce: “assisting with voter registration, handing out paperwork and forms to potential voters in person, reminding potential voters of deadlines, and soliciting volunteers.” Compl. at p. 4. Plaintiffs and the other organizers they seek to represent each performed these duties “in” a single state. See e.g., id. ¶¶ 24, 50 (Pennsylvania organizers performed their job duties “in Pennsylvania”); id. ¶ 26 (North Carolina organizers performed job their duties “in North Carolina”); see also id. ¶ 27 (“in Missouri”), ¶ 28 (“in Virginia”), ¶ 29 (“in Arizona”), ¶ 30 (“in Michigan”). Further, in each case, the State Party that “directly employed” a given Plaintiff (¶¶ 91-97) operated “in” a single state. Thus, for example, the Pennsylvania organizers who worked “in Pennsylvania” were employed by the Pennsylvania Democratic Party, which “raises money, hires staff, and coordinates strategy to support candidates throughout the Commonwealth of Pennsylvania.” Id. ¶ 32 (emphasis added).8 Thus, by the Complaint’s own admission, Plaintiffs’ “direct” employers focused solely on supporting candidates in their respective states. Despite this tacit acknowledgment that Plaintiffs were engaged in what were inherently non-commercial, intra-state activities, Plaintiffs sought and obtained Defendants’ leave to file a second amended complaint in a last-ditch attempt to establish individual coverage. Plaintiffs added two new vague and conclusory allegations, but the Complaint still falls far short of stating a plausible claim for relief against DNC. 8 See also id. ¶ 33 (same, as to Florida); id. ¶ 34 (same, as to North Carolina); id. ¶ 35 (same, as to Missouri); id. ¶ 36 (same, as to Virginia); id. ¶ 37 (same, as to Arizona); id. ¶ 38 (same, as to Michigan). Case 2:16-cv-05800-CDJ Document 84-1 Filed 03/30/17 Page 18 of 38 16 First, Plaintiffs assert that their job duties included “making calls to individuals who were outside the state Named Plaintiffs’ [sic] were calling from[.]” Id. ¶ 102. This threadbare assertion can be dismissed out of hand. Most fundamentally, Plaintiffs do not even allege that they made interstate phone calls “regularly,” an indispensable element because de minimis interstate activity does not trigger individual coverage. See 29 C.F.R. § 776.10(b) (requiring “regular and recurrent” use of instruments of interstate commerce when communicating across state lines to establish individual coverage); 29 C.F.R. § 779.103 (Employees “engaged in commerce” include “workers who regularly use the mails, telephone or telegraph for interstate communication[.]”).9 Plaintiffs thus fail to plead a plausible assertion that any specific Plaintiff made interstate calls routinely enough to trigger individual FLSA coverage. This allegation is also insufficient because it is so vague as to be meaningless. The Complaint conspicuously fails to allege that any individual Plaintiff (let alone all of them) actually made interstate phone calls. Rather, Plaintiffs allege only that their overall list of “job duties included making calls to individuals who were outside the state Named Plaintiffs’ [sic] were calling from.” Compl. ¶ 102 (emphasis added). It thus is unclear from the Complaint whether any specific Plaintiff performed this particular “job dut[y]” during the course of their employment. Relatedly, Plaintiffs fail to plead any facts regarding who they supposedly called 9 See also Cruz v. Chesapeake Shipping, Inc., 932 F.2d 218, 228 (3d Cir. 1991) (finding to establish individual coverage under the FLSA, an employee’s “contact with interstate commerce must be regular and not an isolated incident”); Thorne v. All Restoration Servs., Inc., 448 F.3d 1264, 1266 (11th Cir. 2006) (“[F]or an employee to be ‘engaged in commerce’ under the FLSA, he must . . . regularly us[e] the instrumentalities of interstate commerce in his work, e.g., regular and recurrent use of interstate telephone, telegraph, mails, or travel.”) (emphasis added); Reagor v. Okmulgee Cty. Family Res. Ctr., 501 F. App’x 805, 809 (10th Cir. 2012) (finding employees must “regularly and recurrently use an instrument of interstate commerce, such as a telephone. . . . Isolated or sporadic activities do not satisfy this requirement.”) (citations omitted); Perez v. Nwb Aspen, Inc., No. 616CV412ORL41DAB, 2016 WL 5853734, at *3 (M.D. Fla. June 6, 2016) (finding periodic placement of interstate calls fails to establish individual coverage as a matter of law), report and recommendation adopted, No. 616CV412ORL41DAB, 2016 WL 5815903 (M.D. Fla. Oct. 5, 2016); Bowrin v. Catholic Guardian Soc., 417 F. Supp. 2d 449, 468 (S.D.N.Y. 2006) (“[I]t is the use of the interstate mails and placement of out-of-state phone calls occurring in the course of conducting an organization’s clerical or administrative business that appear to trigger individual coverage, if ‘regular and recurrent’ and a ‘substantial part’ of the employee's work.”); cf. Dent v. Giaimo, 606 F. Supp. 2d 1357, 1360 (S.D. Fla. 2009) (discussing whether employee is engaged in commerce for purposes of enterprise coverage: “Isolated or sporadic activities” do not satisfy this requirement); Kitchings v. Fla. United Methodist Children’s Home, Inc., 393 F. Supp. 2d 1282, 1293 n.26 (M.D. Fla. 2005) (finding for purposes of enterprise coverage [f]or an employee to be engaged in commerce, a substantial part of the employee’s work must be related to interstate commerce” (quotation marks omitted)). Case 2:16-cv-05800-CDJ Document 84-1 Filed 03/30/17 Page 19 of 38 17 (or even the states in which the call recipients were located), when they supposedly made these calls, or what the calls were actually about-all information conspicuously missing and important to determining whether such calls could even be relevant to the question at hand. Further, the Complaint lumps together all supposed interstate calls generically made by all Named Plaintiffs (who worked in seven different states) without attempting to explain why any Plaintiff would be calling individuals outside the states in which he or she was employed when (as discussed above) their duties were inherently local. See id. In short, even if Plaintiffs had alleged that they regularly made interstate phone calls (which they did not), this allegation is implausible on its face as pled. Similarly deficient is Plaintiffs’ second new assertion; that their job duties included “accessing and entering data into the Votebuilder” database. Id. ¶¶ 101, 104. Plaintiffs claim that Votebuilder is a “national online database which contains information about every registered voter in each state” and is maintained in Washington D.C. Id. ¶¶ 103-104. According to the Complaint, “[b]y entering data into the Votebuilder system, Named Plaintiffs provided information across state lines while employed by Defendants.” Id. ¶ 103. These threadbare allegations again fail to state plausible claims for relief. Most notably, Plaintiffs fail to allege that any particular Plaintiff regularly used Votebuilder in such a way as to “provide[] information across state lines.” Id. More fundamentally, tangential digital activity-undertaken for noncommercial, political purposes-is insufficient to establish that organizations are “engaged in commerce” and subject to individual coverage under the FLSA. As a matter of law, even tangential digital activity undertaken for commercial purposes is insufficient to establish individual coverage.10 10 Cf. Dean v. Pac. Bellwether, LLC, 996 F. Supp. 2d 1044, 1049 (D.N. Mar. I. 2014) (finding employee had not “engaged in commerce” for purposes of the FLSA by merely “search[ing] for recipes on the Internet and download[ing] them” as part of her job duties as a cook); Dent v. Giaimo, 606 F. Supp. 2d 1357, 1361 (S.D. Fla. 2009) (“This Court also holds that plaintiff’s use of the telephone or facsimile machines to make long distance phone calls or use of the internet and credit cards is insufficient to establish jurisdiction. To be considered ‘engaged in interstate commerce’ a business must use a credit card specifically to transact business in interstate commerce.”); Attai v. Delivery Dudes, LLC, No. 15-CV-62522, 2016 WL 828816, at *3 (S.D. Fla. Mar. 3, 2016) (“[T]he mere use of a telephone or the Internet does not evidence regular use of the instrumentalities of interstate commerce”); Mayo Case 2:16-cv-05800-CDJ Document 84-1 Filed 03/30/17 Page 20 of 38 18 As the Supreme Court has emphasized, “whether an employee is engaged ‘in commerce’ within the meaning of [the FLSA] is determined by practical considerations, not by technical conceptions.” Mitchell v. C.W. Vollmer & Co., 349 U.S. 427, 429 (1955). In the digital age, virtually any employee-no matter how hyperlocalized their job duties-may well occasionally access information or data from the Internet or nationwide databases. These days, even appliances may connect to the Internet. But where Plaintiffs themselves clearly plead that the core of their job was in-person contact with voters in the states of their employment, mere access to a database-regardless of where the server housing that database is physically located-hardly supports FLSA coverage. b. Plaintiffs Do Not Allege Enterprise Coverage under the FLSA Nor does the Complaint sufficiently allege “enterprise coverage.” Enterprise coverage requires that an employee be employed in an enterprise engaged in commerce or the production of goods for commerce whose annual gross volume of sales made or business done is not less than $500,000. See 29 U.S.C. §§ 203(s)(1), 206(a). “Enterprise” is defined as “the related activities performed (either through unified operation or common control) by any person or persons for a common business purpose[.]” 29 U.S.C. § 203(r)(1); see also Reich v. Gateway Press, Inc., 13 F.3d 685, 694 (3d Cir. 1994) (“To be considered an enterprise, a business must satisfy three elements. It must 1) be engaged in related activities, 2) under unified operation or common control, and 3) have a common business purpose.”). By the Complaint’s own factual allegations, DNC is not an “enterprise” because it is not engaged in a “business purpose.” In determining whether a nonprofit has a “business purpose,” the inquiry focuses on “whether the non-profit agency is primarily engaged in competition in the public with ordinary commercial enterprises.” Briggs v. Chesapeake Volunteers in Youth Servs., Inc., 68 F. Supp. 2d 711, 715 (E.D. Va. 1999) (citing Tony & Susan Alamo Found., 471 U.S. 290, 295-99 (1985)). Here, Plaintiffs allege that DNC’s purpose is governance of the Democratic v. Jean Nicole Hair Salons, Inc., No. 2:15-CV-115-FTM, 2015 WL 4751202, at *3 (M.D. Fla. Aug. 11, 2015) (“[M]erely using a customer's credit card to ring up the sale does not constitute interstate commerce.”). Case 2:16-cv-05800-CDJ Document 84-1 Filed 03/30/17 Page 21 of 38 19 National Party and provision of support to candidates for local, state, and national office. Compare Compl. ¶ 9, with Joles v. Johnson Cnty. Youth Serv. Bureau, Inc., 885 F. Supp. 1169, 1175 (S.D. Ind. 1995) (“Unless it engages in commercial activities in competition with private entrepreneurs or qualifies as one of the organization[s] listed in 29 U.S.C. § 203(r)(2), a non- profit charitable organization is not an ‘enterprise’”); see also 29 C.F.R. § 779.214 (discussing the Department of Labor’s interpretation of “business” purpose). In their latest Complaint, Plaintiffs try to salvage their FLSA claim with two new paragraphs targeting enterprise coverage, but these vague and conclusory allegations do not establish plausible claims. Plaintiffs allege that all defendants collectively “sell merchandise to the public, including T-shirts, hats, buttons, water bottles, posters, signs, and other items” and “license and sell access and data from Votebuilder to candidates and other third party organizations” which supposedly generated revenues in excess of $500,000 in 2016. Compl. ¶¶ 107-108 (emphasis added). But nowhere do Plaintiffs allege that DNC’s annual revenue from selling merchandise or access to Votebuilder data exceeded $500,000 in 2016, as required to establish that DNC is “engaged in commerce” for purposes of enterprise coverage. See 29 U.S.C. § 203(s)(1)(A). In other words, Plaintiffs allege that if one totals up the “revenue” from all activities conducted by all Defendants in 2016, that revenue number exceeds $500,000. Plaintiffs thus once again incorrectly assume (without pleading sufficient facts to support it) that DNC and the seven state party Defendants constitute a single enterprise. For the reasons discussed in Section III(B)(1)(b) above,11 Plaintiffs fail to plead that DNC and the various state parties are under unified operation 11 While the “single-employer” test (also known as the “integrated enterprise test”) discussed above is distinct from the “enterprise test” discussed here, the factors overlap and the outcome is the same in this case. Compare Nesbit, 347 F.3d at 84 (Single-employer test factors are “(1) interrelation of operations, (2) common management, (3) centralized control of labor relations, and (4) common ownership or financial control.”) with Reich, 13 F.3d at 695 (Enterprise test requires that separate businesses must “1) be engaged in related activities, 2) under unified operation or common control, and 3) have a common business purpose.”). See also Jackson, 836 F. Supp. 2d at 236 (“[T]he integrated enterprise test is consistent with FLSA, which extends overtime protection to employees of any “enterprise” engaged in interstate commerce”) (citations omitted). Case 2:16-cv-05800-CDJ Document 84-1 Filed 03/30/17 Page 22 of 38 20 or common control.12 As a result, the enterprise test is not met and the annual gross volume of sales made by the DNC and the individual state parties cannot be combined to reach $500,000. See Reich, 13 F.3d at 695 (“The enterprise test is the way to determine whether to combine the dollar figures.”). As a result, regardless of whether Plaintiffs have adequately alleged that DNC is an employer for purposes of their FLSA claim, that claim must be dismissed as a matter of law. C. The Court Should Decline to Exercise Supplemental Jurisdiction Over Plaintiffs’ State Law Claims Plaintiffs ask the Court to exercise supplemental jurisdiction over eleven distinct state law claims based on the common law of seven different states and four state-specific wage statutes, and to certify Rule 23 classes for each claim.13 Compl. ¶ 9. Whether it dismisses the FLSA claim (without which the Court lacks federal subject matter jurisdiction) or not, the Court should dismiss all of these state law claims. Supplemental jurisdiction is a “doctrine of discretion, not of plaintiff’s right,” United Mine Workers of Am. v. Gibbs, 383 U.S. 715, 726 (1966), and the exercise of supplemental jurisdiction “must depend on questions of judicial economy, convenience, and fairness to litigants.” City of Pittsburgh Comm’n on Human Relations v. Key Bank USA, 163 F. App’x 163, 166 (3d Cir. 2006) (citing Gibbs, 383 U.S. at 726). Although a district court may assert supplemental jurisdiction over state law claims that 12 See Layden v. HSL Builders, Inc., No. CIV.A. 01-2196, 2002 WL 1397455, at *2 (E.D. Pa. June 26, 2002) (finding “unified operation” where enterprise consisted of “a corporation at a single location with [a single individual] as the sole owner, shareholder and President in charge of running the company.”); see also Reich, 13 F.3d at 697 (applying the “unified operation or common control” prong of the enterprise test in the context of the FLSA small newspaper exemption and finding that each geographic group of newspapers constituted a single newspaper where major decisions about administration and editorial policy were made from a central office, a single publisher decided how many pages would be in each edition, all advertising was sold from a central office, the managing editor oversaw all editorial decisions for all papers, all employment-related decisions (hiring, firing, payroll) occurred at a central office, and all printing was done at a central location). 13 Under each state’s common law, Plaintiffs allege (albeit insufficiently) that Defendants engaged in a conspiracy to violate the FLSA. Compl. ¶¶ 2-8. Plaintiffs also bring claims under state wage laws in Pennsylvania, Michigan, Missouri, and North Carolina and claim that Defendants engaged in a conspiracy to violate those laws. Id. For each of their state law claims, Plaintiffs seek class certification under Rule 23. Case 2:16-cv-05800-CDJ Document 84-1 Filed 03/30/17 Page 23 of 38 21 share a “common nucleus of operative fact” with the claims supporting the court's original jurisdiction, the court is not required to do so. See Gibbs, 383 U.S. at 725; 28 U.S.C. § 1367(a). To the contrary, Section 1367(c) specifically permits a court to decline to hear a supplemental state claim, despite its power to do so, when: (1) the claim raises a novel or complex issue of State law. (2) the claim substantially predominates over the claim or claims over which the district court has original jurisdiction. (3) the district court has dismissed all claims over which it has original jurisdiction, or (4) in exceptional circumstances, there are other compelling reasons for declining jurisdiction. 28 U.S.C. § 1367(c). Based on the Section 1367(c) factors, and considerations of judicial economy and fairness, the Court should decline to exercise supplemental jurisdiction here. As an initial matter, if the Court finds that DNC is not a joint employer under the FLSA or that Plaintiffs are not covered by the FLSA, original jurisdiction is destroyed.14 See 28 U.S.C. § 1367(c)(3). Third Circuit law requires that, “where the claim over which the district court has original jurisdiction is dismissed before trial, the district court must decline to decide the pendent state claims unless considerations of judicial economy, convenience, and fairness to the parties provide an affirmative justification for doing so.” Hedges v. Musco, 204 F.3d 109, 123 (3d Cir. 2000) (emphasis in original) (citation omitted). “[I]f it appears that all federal claims are subject to dismissal, the court should not exercise jurisdiction over remaining claims unless ‘extraordinary circumstances’ exist.” City of Pittsburgh, 163 Fed. Appx. at 166 (citation omitted). 14 Plaintiffs have not invoked diversity jurisdiction. In any event, diversity jurisdiction does not exist because more than one of the state plaintiffs and defendants are from the same states. 28 U.S.C § 1332. Case 2:16-cv-05800-CDJ Document 84-1 Filed 03/30/17 Page 24 of 38 22 No extraordinary circumstances exist in this action and dismissal at this early stage comports with the notions of judicial economy, efficiency, and fairness. See, e.g., Leder v. Shinfeld, No. 06-1805, 2008 WL 2165097, at *8 n.10 (E.D. Pa. May 22, 2008) (“[T]he cases are clear that when all of the federal claims are dismissed at an early stage, the district court should decline the exercise of supplemental jurisdiction over the state claims absent extraordinary circumstances”). This case presents an example of an ordinary circumstance where courts routinely decline to exercise supplemental jurisdiction. See, e.g., Lopez v. Tri-State Drywall, Inc., 861 F. Supp. 2d 533 (E.D. Pa. 2012) (declining to exercise supplemental jurisdiction over Pennsylvania Wage Payment and Collection Law claim after dismissing FLSA claim). Even if the Court declines to dismiss Plaintiffs’ FLSA claims against DNC, the Court should still decline to exercise supplemental jurisdiction over Plaintiffs’ state law claims, because they present complex and novel questions of law and are likely to substantially predominate over the FLSA claims. See 28 U.S.C. §§ 1367(c)(1), (2). The Court would first have to determine whether the common law of seven different states would even recognize a cause of action for civil conspiracy to violate the FLSA and/or state wage laws. As discussed further below, DNC is not aware of any state court recognizing this kind of claim under its conspiracy law, likely because such a claim would be preempted by federal law. See infra Section III.E. The lack of precedent alone on this issue is a sufficient justification to decline an exercise of supplemental jurisdiction. See Hawa v. Coatesville Area Sch. Dist., No. CV 15-4828, 2016 WL 4720968, at *6 (E.D. Pa. Sept. 9, 2016) (declining to exercise supplemental jurisdiction on “novel” remaining state claim under Pennsylvania’s Whistleblower Law where there was “a marked lack of precedent regarding application” of the law). Case 2:16-cv-05800-CDJ Document 84-1 Filed 03/30/17 Page 25 of 38 23 To further complicate the analysis, under the intracorporate conspiracy doctrine (discussed below), the DNC could not “conspire” to violate a state wage law as to a person if it employed that person itself. Accordingly, before determining the merits of Plaintiffs’ conspiracy claims against DNC, it would first need to determine-for purposes of various state laws- whether and how a different joint employer rule or standard applied. State courts are better suited to address the complex interplay and uncertainties of these state law questions and have a stronger local interest in applying their own precedent to resolve them. See De Asencio v. Tyson Foods, Inc., 342 F.3d 301, 311-12 (3d Cir. 2003), as amended (Nov. 14, 2003) (district court abused its discretion where it exercised supplemental jurisdiction over a Wage Payment Collection Law class action because the statute raised novel issues of undecided state law). That is particularly true here, where Plaintiffs are attempting to circumvent the rules that govern and limit their state law claims. To provide just one example, Plaintiffs seek to pursue a class action civil conspiracy claim under Virginia law, but “Virginia jurisprudence does not recognize class actions.” Casey v. Merck & Co., 722 S.E.2d 842, 846 (Va. 2012). Thus, Plaintiffs seek to manufacture class claims on a Virginia state law claim where none would exist in Virginia. Moreover, because Plaintiffs bring claims under multiple state laws, judicial economy and fairness are plainly better served in each respective state court. See, e.g., United States ex rel. Silver v. Omnicare, Inc., No. CV 11-1326, 2016 WL 6997010, at *10 (D.N.J. Nov. 28, 2016) (declining to exercise supplemental jurisdiction over plaintiffs’ claims raised under 28 state false claims act statutes because “judicial economy may be enhanced insofar as it would give each local forum the opportunity to apply its own statutory law” and “retention of supplemental Case 2:16-cv-05800-CDJ Document 84-1 Filed 03/30/17 Page 26 of 38 24 jurisdiction will necessarily require this Court to apply 28 individual state statutes in a single suit-an unwieldy task”).15 Finally, because Plaintiffs seek certification of “opt out” Rule 23 class actions for their state law claims as opposed to a narrower “opt in” collective action under the FLSA,16 it is apparent that the putative state law class actions would be substantially larger and more significant than the putative FLSA collective action. This also suggests the Court should decline to exercise supplemental jurisdiction under 28 U.S.C. § 1367(c)(2). See De Asencio, 342 F.3d at 311. Thus, even if Plaintiffs’ FLSA claim goes forward, the Court should decline to exercise supplemental jurisdiction over Plaintiffs’ state law claims. D. The Complaint Fails to Allege Plausible Claims Against DNC for Relief under Any Applicable State Minimum Wage Law Plaintiffs’ state law claims may also be dismissed under Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim. Specifically, the Complaint alleges that Plaintiffs and other local Democratic party organizers in Michigan, Missouri, North Carolina, and Pennsylvania were not paid adequate compensation under each of these states’ minimum wage laws. These respective claims are boilerplate cut-and-paste jobs, substituting only the name of the state party and the name of the state law. Compare Compl. ¶¶ 142-145 with id. ¶¶ 150-153, 162-165, 178- 181.17 Similar to the FLSA claim, the Complaint attempts to assert liability against DNC under these state laws based on the naked claim that DNC was a “joint employer” together with the 15 Moreover, judicial economy is better served by declining supplemental jurisdiction at this early stage. See Hawa, 2016 WL 4720968, at *6 (declining to exercise supplemental jurisdiction where state claims were “at an early stage in this litigation-no answers have yet been filed-so that neither the Court nor the parties have invested substantial resources in addressing them”). 16 See Section III.E.1 infra for a further discussion of the distinction between Rule 23 class actions and FLSA collective actions. 17 These state laws are, respectively, the Pennsylvania Minimum Wage Act (“PMWA”), the Michigan Workforce Opportunity Act, the Missouri Minimum Wage Act, and the North Carolina Wage and Hour Act. Case 2:16-cv-05800-CDJ Document 84-1 Filed 03/30/17 Page 27 of 38 25 Pennsylvania Democratic Party, Michigan Democratic Party, the Missouri Democratic Party, and North Carolina Democratic Party. See id. ¶ 143 (“PDP was vertically integrated with DNC making PDP and DNC joint employers under the PMWA.”); see also id. ¶¶ 151, 163, 179 (identical boilerplate allegations as to other three state parties). For the reasons that follow, none can survive a Rule 12(b)(6) challenge. 1. Plaintiffs Fail to State a Claim Under Pennsylvania’s Minimum Wage Law For the same reasons discussed above in Section III.B, the Complaint fails to state a claim under Pennsylvania’s wage and hour law, the PMWA. Federal courts in Pennsylvania have held that the analysis for determining whether a joint employment relationship exists under the FLSA applies equally to the PMWA. In Schneider v. IT Factor Prods., No. CIV.A. 13-5970, 2013 WL 6476555, at *3-4 (E.D. Pa. Dec. 10, 2013), the district court applied the Enterprise factors to determine whether an individual supervisor was a “joint employer” for purposes of the FLSA and PMWA. In doing so, the court recognized that the analysis for determining “joint employer” is the same under the FLSA and the PMWA. Id.18 As a result, when analyzing whether a “joint employment” relationship exists for purposes of PMWA claims, this Court should engage in the Enterprise analysis. As previously discussed, the Complaint fails to sufficiently allege that Plaintiff Bethany Katz was employed by DNC using the Enterprise analysis, and, as a result, the claim should be dismissed. 18 See also Rapczynski, 2016 WL 1071022, at *5 (“[T]he Court notes that [t]he PMWA is essentially the Pennsylvania analogue of the federal FLSA, and, as Plaintiffs point out, defines the terms ‘employer,’ ‘employee,’ and ‘employ’ similarly”; as a result, “[t]he Court’s analysis as to the FLSA applies equally to Plaintiffs PMWA claims.”) (quotation marks and citations omitted); Mackereth v. Kooma, Inc., No. CIV.A. 14-04824, 2015 WL 2337273, at *8 (E.D. Pa. May 14, 2015) (“Pennsylvania courts look to federal case law and the tests employed by the federal courts to determine if a defendant is an employer under the PMWA.”); see also Com., Dep’t of Labor & Indus., Bureau of Labor Law Compliance v. Stuber, 822 A.2d 870, 873 (Pa. Commw. Ct. 2003), aff’d sub nom. Com. v. Stuber, 580 Pa. 66, 859 A.2d 1253 (2004) (adopting “the ‘economic reality’ test employed by the federal courts” to determine whether a worker is an employee or an independent contractor after recognizing that “it is proper to give deference to federal interpretation of a federal statute when the state statute substantially parallels it”). Case 2:16-cv-05800-CDJ Document 84-1 Filed 03/30/17 Page 28 of 38 26 2. Plaintiffs Fail to State a Claim Under North Carolina’s Minimum Wage Law In contrast, the North Carolina, Missouri, and Michigan statutory claims are not subject to the Enterprise analysis. Each state uses a different test to determine whether an entity other than an employee’s direct employer can be considered a “joint” employer. But-as is true for the Pennsylvania statutory claim-Plaintiffs have failed to state plausible claims for relief under any of these state wage and hour laws. The primary reason why Plaintiffs’ overtime claim fails under the North Carolina Wage and Hour Act is simple: “North Carolina law itself provides for FLSA preemption of certain NCWHA claims,” including precisely the type of claims that Plaintiffs attempt to raise here. Luna-Reyes v. RFI Const., LLC, 109 F. Supp. 3d 744, 752 (M.D.N.C. 2015). “Under N.C. Gen.Stat. § 95-25.14, the FLSA preempts North Carolina’s . . . overtime (§ 95-25.4)” provisions.” Id. Thus, settled North Carolina law bars Plaintiffs’ claim that “Defendants violated the NCWHA by failing to pay overtime premiums for work in excess of 40 hours per workweek performed by Named Plaintiff and North Carolina Plaintiffs.” Compl. ¶ 164. For this reason alone, Plaintiffs’ North Carolina claims should be subject to summary dismissal with prejudice. Plaintiffs have further failed to plead plausibly that DNC is a “joint employer” under North Carolina law. In considering whether a person is an “employee” of a claimed employer, North Carolina courts consider “(1) whether the alleged employee performs services for the employer; (2) ‘the degree of control exerted by the alleged employer’ over the individual or entity; and (3) the alleged employee’s opportunity for profit or loss derived from its relationship with the employer.” Jones v. Am. Airlines, Inc., 2008 WL 9411160, at *3 (E.D.N.C. Oct. 16, 2008) (dismissing claim against putative joint employer under North Carolina law) (citation and quotation marks omitted). Here, for the same basic reasons described in Section III.B.1.a above, Plaintiffs have failed to allege plausibly that DNC employed Plaintiff Marcus Price (or any other Case 2:16-cv-05800-CDJ Document 84-1 Filed 03/30/17 Page 29 of 38 27 organizer in North Carolina) and thus fails to state a plausible claim against DNC under North Carolina law. 3. Plaintiffs Fail to State a Claim Under Missouri’s Minimum Wage Law Plaintiffs also fail to state a claim under Missouri law. Again, Plaintiffs allege that the DNC was a joint employer for the purposes of this claim, which must be analyzed under a five- factor iteration of the joint employer test that is similar to, but distinct from, the Enterprise test. Thornton v. Charter Commc’ns, LLC, No. 4:12CV479 SNLJ, 2014 WL 4794320, at *16 (E.D. Mo. Sept. 25, 2014) (joint employment requires consideration of “the following factors: ‘(1) who has the power to hire and fire the worker; (2) who supervises and controls the worker’s work schedule and conditions of work; (3) who determines the rate and method of payment of the worker; (4) who maintains work records; and (5) whether the alleged employers’ premises and equipment were used for the plaintiff’s work.’”) (quoting Tolentino v. Starwood Hotels & Resorts Worldwide, Inc., 437 S.W.3d 754 (Mo. 2014)). The Complaint fails to allege adequately that DNC employed Plaintiff Thomas Olsen (or any other organizer in Missouri and thus fails to state a plausible claim against DNC under Missouri law. 4. Plaintiffs Fail to State a Claim Under Michigan’s Minimum Wage Law DNC is unaware of any decision recognizing a “joint employer” relationship under the Michigan Workforce Opportunity Act. This is yet another novel and complex state law issue Plaintiffs would ask the Court to resolve. Generally speaking, under Michigan law, “[t]he general characteristics of an employer are: (1) they select and engage the employee, (2) they pay the wages, (3) they have the power of dismissal, and (4) they have power and control over the employee’s conduct.” Mich. Council 25 v. Louisiana Homes, Inc., 480 N.W.2d 280, 282 (1991), vacated 503 N.W.2d 442 (1992), reinstated on remand 511 N.W.2d 696 (1993). Case 2:16-cv-05800-CDJ Document 84-1 Filed 03/30/17 Page 30 of 38 28 Once again, Plaintiffs’ Complaint fails to sufficiently allege that DNC employed Plaintiff Scott Ward or any other organizer in Michigan, and, as a result, the claim should be dismissed. E. The Complaint Fails to State a Plausible Civil Conspiracy Claim Finally, the Complaint purports to assert various state common law causes of action for “civil conspiracy,” alleging that Defendants “conspired” to violate the FLSA by failing to pay overtime wages due. These claims appear designed to end-run the opt-in process for collective actions under the FLSA. Regardless of their motive, however, Plaintiffs fail to state a conspiracy claim under any state law. 1. Plaintiffs Cannot Evade the FLSA’s Procedural Requirements by Recasting Their FLSA Claim as a Common Law Conspiracy Claim As an initial matter, Plaintiffs’ state law “conspiracy to violate the FLSA” claims fail because there is no such claim. DNC is unaware of any case from any jurisdiction that has ever recognized a claim for “conspiracy to violate the FLSA.” For good reason. While the FLSA does not preempt state minimum wage laws, it does establish the exclusive means of recovering damages for violations of the FLSA itself. The “FLSA sets forth a . . . detailed statutory scheme that ‘provides for a careful blend of administrative and judicial enforcement powers’” and “provides the exclusive remedy for wage and hour violations that fall within the FLSA’s scope.” DeSilva v. N. Shore- Long Island Jewish Health Sys., Inc., 770 F. Supp. 2d 497, 513 (E.D.N.Y. 2011) (quoting Brown v. Gen. Servs. Admin., 425 U.S. 820, 833 (1976)); see also Anderson v. Sara Lee Corp., 508 F.3d 181, 192 (4th Cir. 2007) (discussing FLSA’s “unusually elaborate” enforcement scheme). Among other things, the FLSA (a) establishes criminal liability for certain violations; (b) specifies the damages that can be recovered for violations of the FLSA; (c) authorizes the Secretary of the Department of Labor to pursue actions on behalf of employees; and (d) provides Case 2:16-cv-05800-CDJ Document 84-1 Filed 03/30/17 Page 31 of 38 29 that if the Secretary chooses to exercise that authority, an employee’s ability to bring a private right of action ends. See DeSilva, 770 F. Supp. 2d at 513 (citing various provisions of FLSA). Accordingly, although the Third Circuit has not itself addressed the issue, courts around the country have held that the FLSA preempts state common law claims that do nothing more than set out an alternative theory of relief for recovery of money allegedly owed under the FLSA, as such claims interfere with Congress’ carefully designed enforcement scheme. See Anderson, 508 F.3d at 194 (concluding “that the Class Members’ FLSA-based contract, negligence, and fraud claims [were] precluded under a theory of obstacle preemption”).19 Plaintiffs’ conspiracy claims do nothing more than recast their FLSA claims in the guise of state common law claims. Plaintiff alleges that DNC “conspired” with the various State Parties to fail to pay “overtime wages” due and, as a result, that Plaintiffs “suffered damages” (i.e., overtime wages Plaintiffs claim are owed under the FLSA). See Compl. ¶¶ 148, 156, 160, 168, 172, 176, 184. In so doing, Plaintiffs seek to evade the “opt in” requirement applicable to their FLSA claim and inflate the size of their putative class. “In order to be bound by a FLSA collective action settlement, potential class members must affirmatively ‘opt in.’ If they do not choose to opt in, they can bring a separate suit at a later time. This stands in contrast to a Rule 23(b)(3) ‘opt out’ class action.” Keller v. TD Bank, N.A., No. 23-5054, 2014 WL 5591033, at 19 See also Roman v. Maietta Const., Inc., 147 F.3d 71, 76 (1st Cir. 1998) (“The FLSA is the exclusive remedy for enforcement of rights created under the FLSA. . . . That is, the plaintiff cannot circumvent the exclusive remedy prescribed by Congress by asserting equivalent state claims in addition to the FLSA claim.”) (quotation marks omitted); Bonham v. Wolf Creek Acad., 767 F. Supp. 2d 558, 567 (W.D.N.C. 2011) (“[P]laintiffs’ [claims for breach of fiduciary duty and constructive fraud] are preempted as they are clearly dependent on and even incorporate their claims under the FLSA”); Wood v. TriVita, Inc., No. CV-08-0765-PHX-SRB, 2008 WL 6566637, at *4 (D. Ariz. Sept. 18, 2008) (“To allow Plaintiff to bring suit for a violation of the FLSA and seek a remedy other than that provided by the FLSA would stand as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress in enacting the FLSA.”); Moeck v. Gray Supply Corp., 2006 WL 42368, at *2 (D.N.J. Jan. 6, 2006) (fraud and misrepresentation claims preempted by FLSA: “[M]ost courts have held that claims directly covered by the FLSA (such as overtime), must be brought under the FLSA.”); Johnston v. Davis Sec., Inc., 217 F. Supp. 2d 1224, 1227 (D. Utah 2002) (same, where “Plaintiff’s common law claims are based on the same facts and circumstances as her FLSA claims.”); Alexander v. Vesta Ins. Grp., Inc., 147 F. Supp. 2d 1223, 1240 (N.D. Ala. 2001) (same, as to claim premised on “alleged misrepresentations to Plaintiffs that they were exempt from the overtime requirements of the FLSA”). Case 2:16-cv-05800-CDJ Document 84-1 Filed 03/30/17 Page 32 of 38 30 *13 (E.D. Pa. Nov. 4, 2014). Plaintiffs’ “conspiracy to violate the FLSA” claims are an attempt to try collectively the claims of people who do not “opt in” to this lawsuit. The Court should reject Plaintiffs’ attempt to do an end run around the FLSA and dismiss Plaintiffs’ conspiracy claims. 2. The Complaint Fails to Allege the Elements of Common Law Conspiracy Under Any of the Relevant State Jurisprudence Even assuming that Plaintiffs could theoretically assert plausible claims for conspiracy to violate wage statutes, they have not done so here. Simply put, the Complaint fails to state a claim for common law conspiracy under any of the relevant states’ governing jurisprudence. In Pennsylvania, for example, the elements of a civil conspiracy claim are: (1) a combination of two or more persons acting with a common purpose to do an unlawful act or to do a lawful act by unlawful means or for an unlawful purpose; (2) an overt act done in pursuance of the common purpose; and (3) actual legal damage. McKeeman v. Corestates Bank, N.A., 751 A.2d 655, 660 (Pa. Super. Ct. 2000). The other six states all have their own iterations of a common law conspiracy claim. Like Pennsylvania, however, each requires an agreement between multiple parties to commit an unlawful act.20 It is not enough to prove that a person knowingly acted in a way that aided another to commit the unlawful act-the plaintiff must “prove an actual agreement to participate” intentionally in the unlawful act. See, e.g., Dawson, 163 P.3d at 1054 (“[S]uspicious cooperative activity between the alleged conspirators may not amount to clear and convincing evidence of an actual agreement to participate in the tortious conduct.”). 20 See Raimi v. Furlong, 702 So.2d 1273, 1284 (Fla. Dist. Ct. App. 1997); Higgins v. Ferrari, 474 S.W.3d 630, 642 (Mo. Ct. App. 2015); Firestone v. Wiley, 485 F. Supp. 2d 694, 703 (E.D. Va. 2007), Suntrust Mortg. Inc. v. Busby, 651 F. Supp. 2d 472, 488 (W.D.N.C. 2009); Dawson v. Withycombe, 163 P.3d 1034, 1053 (Ariz. Ct. App. 2007); Mays v. Three Rivers Rubber Corp., 352 N.W.2d 339, 341 (Mich. Ct. App. 1984). Case 2:16-cv-05800-CDJ Document 84-1 Filed 03/30/17 Page 33 of 38 31 Here, Plaintiffs fail to allege the existence of an agreement to commit unlawful conduct. In fact, the Complaint alleges the opposite, i.e., that DNC unilaterally “direct[ed]” the state parties to “classify organizers as overtime-exempt under state and federal law.” Compl. ¶ 39. This is fundamentally inconsistent with the existence of an agreement (or “meeting of the minds”) necessary for a conspiracy claim. Even if the Complaint did explicitly plead the existence of an agreement to commit an unlawful act, under Iqbal/Twombly, it would also need to include sufficient factual allegations to suggest that an agreement was, in fact, made. See Twombly, 550 U.S. at 556 (“[S]tating [an anti- trust conspiracy] claim requires a complaint with enough factual matter (taken as true) to suggest that an agreement was made.”).21 The allegation that DNC “direct[ed]” the state parties to classify organizers as exempt is insufficient to support the existence of an agreement. See, e.g., 21 See also Great W. Mining & Mineral Co. v. Fox Rothschild LLP, 615 F.3d 159, 179 (3d Cir. 2010) (plaintiff “has not pleaded any facts that plausibly suggest a meeting of the minds” between the alleged conspirators where plaintiff “failed to allege except in general terms the approximate time when the agreement was made, the specific parties to the agreement [], the period of the conspiracy, or the object of the conspiracy”); ITP, Inc. v. OCI Co., Ltd., 865 F.Supp.2d 672, 684 (E.D. Pa. 2012) (“A civil conspiracy claim “must set forth allegations that address the period of the conspiracy, the object of the conspiracy, and the certain actions of the alleged conspirators taken to achieve that purpose.”); Alhassid v. Bank of Am., N.A., 60 F. Supp. 3d 1302, 1319 (S.D. Fla. 2014) (dismissing conspiracy claim because “the fact that Defendants entered into the [mortgage agreements], absent any allegations of any agreement to conspire, cannot alone support Plaintiffs’ conclusory assertion that Defendants ‘engaged in a conspiracy’”); Beasley v. FV-I, Inc., 1:13-CV-116 JCC/TRJ, 2013 WL 1192018, at *5 (E.D. Va. Mar. 21, 2013) (“Plaintiff’s nebulous contention that the Defendants ‘proceeded together to deprive Plaintiff of his legal rights regarding his own financial asset [] and to deprive him of his legal rights . . .’ is insufficient to state a claim for conspiracy to commit fraud” where “[t]he Complaint neither identifies nor details any sort of agreement between [Defendants], nor does the Complaint describe the manner in which the Defendants colluded.”); Feldman v. Law Enf’t Assocs. Corp., 779 F. Supp. 2d 472, 502 (E.D.N.C. 2011) (“[E]ven if the court were somehow able to find that plaintiffs have alleged a viable underlying claim against the conspiracy defendants, plaintiffs have also failed to plead sufficient facts to show the existence of an agreement.”); Van Weelden v. Hillcrest Bank, No. 2:10-CV-01833-PHX, 2011 WL 772522, at *8 (D. Ariz. Feb. 28, 2011) (dismissing conspiracy claim: plaintiff failed to plead “clear and convincing evidence of an agreement to carry out, and the actual completion, of a specific underlying tort”); Blair v. City of Hannibal, 179 F. Supp. 3d 901, 915 (E.D. Mo. 2016) (plaintiffs “fail[ed] to properly plead a claim for civil conspiracy” where “their Complaint merely restates the elements of conspiracy” and that “[p]laintiffs must provide factual support of a meeting of the minds and the act in furtherance of the conspiracy”); Bray v. Unified Prop. Grp., LLC, No. 12-12618, 2012 WL 5363792, at *7 (E.D. Mich. Oct. 30, 2012) (plaintiff “failed to state a claim for civil conspiracy against [defendant], because she has not pled any facts to show that [defendant] had any agreement, explicit or tacit, with either of the other defendants” where plaintiff “offer[ed] nothing to show that [defendants] came to any meeting of the minds over how to handle the [alleged wrong] at any time” before the damage occurred). Case 2:16-cv-05800-CDJ Document 84-1 Filed 03/30/17 Page 34 of 38 32 Fernanders v. Michigan Dep’t of Military & Veteran Affairs, No. 12-11752, 2012 WL 6088311, at *5 (E.D. Mich. Dec. 6, 2012). In Fernanders, the district court stated: Plaintiff alleges that Defendants “direct[ed]” his supervisor “to make false statement[s] regarding [his] employment.” He then concludes that “the fair inference to be drawn” from the allegations is that Defendants conspired to terminate his employment and deny him unemployment benefits because he is black. But Plaintiff does not plead factual allegations that suggest multiple upper management employees at the Academy engaged in concerted action to terminate him because of his race. Id. (citations omitted). The Complaint does not include any details regarding the existence of an agreement to commit unlawful conduct, such as the individuals who allegedly entered into an agreement, specific communications between those individuals about an agreement, or any other particularized information about the manner in which those individuals allegedly colluded.22 Finally, Plaintiffs also fail to plead plausibly that there was an agreement to violate an applicable wage law. Plaintiffs assert simply that Defendants “erroneously treated Organizers as exempt employees.” Compl. at p. 4. As set out in this motion, DNC did not employ the “organizers” and, in any event, the organizers are not covered under the FLSA. Even assuming, for the sake of argument, that Plaintiffs had meritorious claims that they should have been treated as non-exempt based on the specific facts of their employment, they have scarcely alleged a plausible claim that DNC willfully “conspired” with the State Parties to violate the FLSA.23 22 See, e.g., Petula v. Mellody, 588 A.2d 103, 107 (Pa. Cmwlth. 1991) (plaintiff “fail[ed] to set forth any supporting facts such as meetings, conferences, telephone calls or joint signatures on written recommendations sent to potential employers to indicate a conspiracy” or any other “facts inferring conspiratorial conduct”). 23 Additionally, with respect to Pennsylvania, Plaintiffs failed to plead the requisite unjustified intent to injure or malice. See Guy Chem. Co., Inc. v. Romaco S.p.A., No. 06-96, 2009 WL 840386, at *16 (W.D. Pa. Mar. 27, 2009) (citing Thompson Coal Co. v. Pike Coal Co., 412 A.2d 466, 472 (Pa. 1979)). Malice “will only be found when the sole purpose of the conspiracy is to cause harm to the party who has been injured.” Becker v. Chicago Title Ins. Co., CIV.A. No. 03-2292, 2004 WL 228672, at *13 (E.D. Pa. Feb. 4, 2004) (emphasis added). “[W]here the facts show that a person acted to advance his own business interests, and not solely to injure the party injured, those facts negate any alleged intent to injure.” Id. Not only does the Complaint fail to allege malice, it implies the opposite, i.e., that Defendants failed to pay overtime compensation in order to save money, not to harm Plaintiffs. See Compl. ¶ 129 (“Defendants received a significant economic benefit in not paying extra compensation to Collective Action and Class Plaintiffs for any hours worked beyond 40 per workweek by lowering their wage costs.”). Case 2:16-cv-05800-CDJ Document 84-1 Filed 03/30/17 Page 35 of 38 33 3. The Conspiracy Claims Must Be Dismissed Because, if Defendants Qualify as “Joint Employers” or as a “Single Employer,” the Claims Would be Barred by the Intracorporate Conspiracy Doctrine As noted above, Plaintiffs allege that DNC and the State Parties are either “joint employer[s],” or a “single employer.” See Compl. ¶ 12. For the reasons discussed above, Plaintiffs have fallen far short of sufficiently alleging those claims. Assuming, for the sake of argument, that Plaintiffs have sufficiently alleged that DNC and the State Parties should be treated jointly for liability purposes, that would sound the death knell for their conspiracy claims. Under the intracorporate conspiracy doctrine, “[a] single entity cannot conspire with itself and, similarly, agents of a single entity cannot conspire among themselves.” Grose v. Procter & Gamble Paper Products, 866 A.2d 437, 441 (Pa. Sup. Ct. 2005).24 The doctrine has been interpreted to apply to separate individuals engaged in an “agency” relationship.25 Thus, if Plaintiffs’ bare bones assertions that Defendants should, in fact, be treated as a single or joint employer are correct, Plaintiffs would be unable to pursue their common law conspiracy claims as a matter of law. Simply put, Plaintiffs cannot have their cake and eat it too. IV. CONCLUSION For the foregoing reasons, the FLSA and state law wage claims in the Complaint should be dismissed as to DNC because the Complaint fails to sufficiently allege that DNC employed Plaintiffs. Alternatively, the FLSA claim should be dismissed because the Complaint does not sufficiently allege that Plaintiffs or the DNC are covered by the FLSA. Whether or not the FLSA claim is dismissed, the Court should decline to exercise supplemental jurisdiction over any of the 24 Similar doctrines have been explicitly recognized in at least three other jurisdictions implicated in the Complaint. See Metts v. Clark Oil & Refining Corp., 618 S.W.2d 698, 702 (Mo. App. E.D. 1981) (“[A] corporation cannot conspire with its own employees.”); Rowland v. Union Hills Country Club, 157 Ariz. 301, 306, 757 P.2d 105, 110 (Ariz. Ct. App. 1988) (“A corporation cannot conspire with itself anymore than a private individual can[.]”); Rogers v. Deane, 992 F. Supp. 2d 621, 624 (E.D. Va.), aff’d, 594 F. App’x 768 (4th Cir. 2014) (“Defendant[s] . . . were one legal entity because they had an agency relationship and therefore could not legally conspire.”). 25 See, e.g., Macke Laundry Serv. Ltd. P’ship v. Jetz Serv. Co., 931 S.W.2d 166, 176 (Mo. Ct. App. 1996) (“Two entities which are not legally distinct cannot conspire with one another.”); Rogers, 992 F. Supp. 2d at 624. Case 2:16-cv-05800-CDJ Document 84-1 Filed 03/30/17 Page 36 of 38 34 Complaint’s state law claims. If the Court does elect to exercise supplemental jurisdiction, all of the conspiracy claims should be dismissed as preempted by federal law, for failure to state a claim upon which relief can be granted under applicable state law, and/or because the Complaint fails sufficiently to plead plausible conspiracy claims.26 Given that Plaintiffs have already had three bites at the apple, and still have failed to plead plausible claims for relief, the Court should dismiss Plaintiffs’ claims with prejudice.27 26 Finally, it is worth emphasizing that campaigns (especially those on very tight budgets) often rely entirely on volunteers, who receive no compensation at all to do the type of organizing work for which Plaintiff was paid to do. Nothing in the FLSA or the relevant state minimum wage laws forbids this. Thus, the practical effect of the position that Plaintiff urges will be to require political campaigns to either not compensate organizers like Plaintiffs at all and rely instead solely on volunteers who have independent means that enables them to assist without any compensation, or to severely limit positions for paid organizers. Such a result would raise obvious First Amendment concerns, both for those individuals who would be effectively barred from association with campaigns that they support and for which they want to engage in organizing activities, but cannot afford to unless they are compensated to some degree, and for campaigns itself, for which it will plainly “shrink the size of the audience that can be reached [and] like the campaign expenditure limitations struck down” by the Supreme Court in Buckley v. Valeo, 424 U.S. 1 (1976), “necessarily reduce[] the quantity of expression.” Meyer v. Grant, 486 U.S. 414, 419-20 (1988) (citing Grant v. Meyer, 828 F.2d 1446, 1453-54 (10th Cir. 1987)). Thus, the doctrine of constitutional avoidance also weighs in favor of granting the motion to dismiss. See United States v. Grier, 475 F.3d 556, 567 (3d Cir. 2007) (“The doctrine of constitutional avoidance applies ‘[w]here an otherwise acceptable construction of a statute would raise serious constitutional problems.’”) (quoting Edward J. DeBartolo Corp. v. Fla. Gulf Coast Bldg. & Const. Trades Council, 485 U.S. 568, 575 (1988)). 27 See, e.g., Cal. Pub. Employees' Ret. Sys. v. Chubb Corp., 394 F.3d 126, 163 (3d Cir. 2004) (affirming dismissal with prejudice where the plaintiffs had already been given “ample opportunity [three complaints] to state a cognizable cause of action”); see also Cornelius v. Bank of Am., NA, 585 F. App’x 996, 1000 (11th Cir. 2014) (affirming dismissal with prejudice where the claims where dismissed after the plaintiff’s “second attempt to make a legally cognizable claim” because the plaintiff “already had been given an opportunity to correct his pleadings”) Case 2:16-cv-05800-CDJ Document 84-1 Filed 03/30/17 Page 37 of 38 35 Dated: March 30, 2017 By: s/ Thomas J. Barton Thomas J. Barton, Esq. (PA ID 50603) Dennis M. Mulgrew, Jr., Esq. (PA ID 312359) DRINKER BIDDLE & REATH LLP One Logan Square, Ste. 2000 Philadelphia, PA 19103-6996 T: (215) 988-2700 F: (215) 988-2757 thomas.barton@dbr.com dennis.mulgrew@dbr.com Elisabeth C. Frost, Esq. PERKINS COIE LLP 700 Thirteenth Street, N.W., Suite 600 Washington, D.C. 20005-3960 T: 202.654.6200 F: 202.654.6211 D.C. Bar No. 443754 efrost@perkinscoie.com (Admitted Pro Hac Vice) William B. Stafford, PERKINS COIE LLP 1201 Third Avenue, Suite 4900 Seattle, WA 98101-3099 T: 206.359.8000 F: 206.359.9000 BStafford@perkinscoie.com (Admitted Pro Hac Vice) Attorneys for Defendants MISSOURI DEMOCRATIC PARTY; THE DEMOCRATIC PARTY OF VIRGINIA; and THE DNC SERVICES CORPORATION d/b/a DEMOCRATIC NATIONAL COMMITTEE Case 2:16-cv-05800-CDJ Document 84-1 Filed 03/30/17 Page 38 of 38 IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF PENNSYLVANIA BETHANY KATZ, et al. Plaintiffs, v. DNC SERVICES CORPORATION d/b/a DEMOCRATIC NATIONAL COMMITTEE, Defendants. Civil Action No. 16-5800 ORDER AND NOW, this ____day of _______________, 2017, upon consideration of Defendant Democratic National Committee’s (“DNC”) Motion to Dismiss Second Amended Complaint, Plaintiffs’ response, if any, and DNC’s reply, if any, it is ORDERED that DNC’s Motion to Dismiss is GRANTED. Plaintiffs’ claims are dismissed against DNC with prejudice. ____________________________ Case 2:16-cv-05800-CDJ Document 84-2 Filed 03/30/17 Page 1 of 1 88221252.1 IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF PENNSYLVANIA BETHANY KATZ, et al. Plaintiffs, v. DNC SERVICES CORPORATION d/b/a DEMOCRATIC NATIONAL COMMITTEE, Defendants. Civil Action No. 16-5800 CERTIFICATE OF SERVICE I, Dennis M. Mulgrew, certify that a copy of Defendant DNC Services Corporation’s (d/b/a Democratic National Committee) to Dismiss, Memorandum of Law in Support, and Proposed Order was served on counsel of record for all parties via the Court’s Electronic Filing System, as follows: Justin L. Swidler, Esq., Joshua S. Boyette, Esq. SWARTZ SWIDLER LLC 1101 Kings Highway North, Suite 402 Cherry Hill, NJ 08032 Counsel for Plaintiffs Colin D. Dougherty, Esq. Jonathan D. Christman, Esq. Thomas J. Szymanski, Esq. Fox Rothschild LLP 10 Sentry Parkway Suite 200 Blue Bell, PA 19422-3001 Counsel for Defendants Pennsylvania Democratic Party, Florida Democratic Party, North Carolina Democratic Party, Arizona Democratic Party, and Michigan Democratic Party Dated: March 30, 2017 s/ Dennis M. Mulgrew, Jr. Dennis M. Mulgrew, Jr. Case 2:16-cv-05800-CDJ Document 84-3 Filed 03/30/17 Page 1 of 1