Kayler et al v. Rescue Rangers LlcMOTION to Dismiss for Lack of JurisdictionE.D. Va.November 11, 201600856621-1 IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF VIRGINIA (Richmond Division) ROBERT KAYLER and ) KARINA QUILES, individually and ) on behalf of all others similarly situated ) ) Plaintiffs, ) ) v. ) Case No. 3:16-cv-00788-JAG ) ) RESCUE RANGERS, LLC, ) ) Defendant. ) ____________________________________) DEFENDANT’S MOTION TO DISMISS FOR LACK OF SUBJECT MATTER JURISDICTION AND FAILURE TO STATE A CLAIM Pursuant to Fed. R. Civ. P. 12(b)(1) and 12(b)(6), Defendant Rescue Rangers, LLC, by counsel, moves to dismiss the Complaint of Plaintiffs Robert Kayler, Karina Quiles, individually and on behalf of those others similarly situated, for lack of subject matter jurisdiction and failure to state a claim upon which relief can be granted. The Defendant further refers the Court to its accompanying Memorandum in support of its Motion to Dismiss. WHEREFORE, the Defendant respectfully requests that the Court enter an Order dismissing the Complaint and grant all other relief to Defendant Rescue Rangers, LLC at it deems appropriate. Respectfully submitted, Case 3:16-cv-00788-JAG Document 4 Filed 11/11/16 Page 1 of 3 PageID# 19 00856621-1 Rescue Rangers LLC By Counsel /s/ Jerry William Boykin Jerry William Boykin, Esq., VSB # 15056 Bean, Kinney & Korman, P.C. 2300 Wilson Boulevard, 7th Floor Arlington, VA 22201 (703) 525-4000 (703) 525-2207 (Fax) jboykin@beankinney.com Counsel for Defendant Case 3:16-cv-00788-JAG Document 4 Filed 11/11/16 Page 2 of 3 PageID# 20 00856621-1 CERTIFICATE OF SERVICE I HEREBY CERTIFY that on this 11th Day of November, 2016, a copy of the foregoing was served via electronic mail and first class mail postage prepaid to the following: Nicholas Woodfield, Esq., VSB# 48938 The Employment Law Group, P.C. 888 17th Street N.W., Suite 900 Washington, DC 20006 (202)-261-2812 (202)-261-2385 (facsimile) nwoodfield@employmentlawgroup.com Harold L. Licthen Thomas P. Fowler Olena Savytska LICTHEN & LISS-RIORDAN, P.C. 729 Boylston Street, Ste. 2000 Boston, MA 02116 (617)-499-5800 hlicthen@llrlaw.com tfowler@llrlaw.com osavytska@llrlaw.com /s/ Jerry William Boykin Jerry William Boykin Case 3:16-cv-00788-JAG Document 4 Filed 11/11/16 Page 3 of 3 PageID# 21 00856655-4 1 IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF VIRGINIA (Richmond Division) ROBERT KAYLER and ) KARINA QUILES, individually and ) on behalf of all others similarly situated ) ) Plaintiffs, ) ) v. ) Case No. 3:16-cv-00788-JAG ) ) RESCUE RANGERS, LLC, ) ) Defendant. ) ____________________________________) DEFENDANT’S MEMORANDUM IN SUPPORT OF ITS MOTION TO DISMISS FOR LACK OF SUBJECT MATTER JURISDICTION AND FAILURE TO STATE A CLAIM Pursuant to Fed. R. Civ. P. 12(b)(1) and 12(b)(6), Defendant Rescue Rangers, LLC, by counsel, states the following in support of its Motion to Dismiss for lack of subject matter jurisdiction and failure to state a claim. BACKGROUND This dispute arises out of an attempt by Plaintiffs, and others similarly situated, to have the Court declare that they are due overtime wages under the Fair Labor Standards Act, 29 U.S.C. § 201 et seq. The Plaintiffs attempt to assert, contrary to clear facts and established law, that they are employees as defined by the Act and not independent contractors. In their complaint however, the Plaintiffs fail to meet their burden to plead sufficient facts to establish a plausible claim that they are employees. For this reason, the Plaintiffs lack standing to bring an overtime Case 3:16-cv-00788-JAG Document 4-1 Filed 11/11/16 Page 1 of 11 PageID# 22 00856655-4 2 wages claim under the Act, and the Court likewise lacks subject matter jurisdiction over this controversy. Furthermore, and on similar grounds, the Plaintiffs fail to plead sufficient facts to state a claim upon which relief can be granted. For these reasons, and those discussed infra, the Plaintiffs’ action should be dismissed pursuant to Rules 12(b)(1) and 12(b)(6). FACTS Plaintiffs Robert Kayler and Zushail Karina Qulies entered into independent contractor agreements with Rescue Rangers in June 2016. Compl., at ¶ 3-4. Rescue Rangers is a Delaware limited liability company with its principal place in Fredericksburg, Virginia. Rescue Rangers enters into contracts with tow truck drivers in cities across the country. Rescue Rangers’ business model is such that it receives calls from stranded motorists who request a tow truck driver to assist them with automotive repair. Rescue Rangers then dispatches these calls to a tow truck driver under contract. The tow truck driver who accepts the referral responds to and assists the stranded motorist. The stranded motorist pays the tow truck driver directly for the services rendered. Under the contract, the tow truck driver is obligated to pay Rescue Rangers a fee for the referral. ARGUMENT Legal Standard “It is well established that before a federal court can decide the merits of a claim, the claim must invoke the jurisdiction of the court.” Miller v. Brown, 462 F.3d 312, 316 (4th Cir. 2006). “[S]tanding…is generally associated with Civil Procedure Rule 12(b)(1) pertaining to subject matter jurisdiction.” CGM, LLC v. BellSouth Telecomms., Inc., 664 F.3d 46, 52 (4th Cir. 2011). The Plaintiff has the burden of proving that subject matter jurisdiction exists. See Evans v. Case 3:16-cv-00788-JAG Document 4-1 Filed 11/11/16 Page 2 of 11 PageID# 23 00856655-4 3 B.F. Perkins Co., 166 F.3d 642, 647 (4th Cir. 1999). “When a defendant makes a facial challenge to subject matter jurisdiction, the plaintiff, in effect, is afforded the same procedural protection as he would receive under a Rule 12(b)(6) consideration,” and the facts alleged in the complaint are taken as true. Kerns v. United States, 585 F.3d 187, 192 (4th Cir. 2009) (citing Adams v. Bain, 697 F.2d 1213, 1219 (4th Cir. 1982)). “A motion filed under Rule 12(b)(6) challenges the legal sufficiency of a complaint.” Francis v. Giancomelli, 588 F.3d 186, 192 (4th Cir. 2009). “To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citing Bell Atl. Co. v. Twombly, 550 U.S. 544, 547 (2007)). To satisfy “the Federal Rules’ requirements for stating claims that are warranted and therefore form a plausible basis for relief, the Supreme Court has held that a complaint must contain ‘more than labels and conclusions…’” Francis, 588 F.3d at 193 (citing Twombly, 550 U.S. at 555). A “formulaic recitation of the elements of a cause of action will not do.” Id. I. The Plaintiffs’ complaint fails to allege sufficient facts to support a plausible claim that they are employees, and thus, the Plaintiffs lack standing to bring a claim under the Act. In order to have standing to bring an overtime wages suit under the Act, the Plaintiffs must establish that they are “employees” as contemplated by its terms. Section 207 of the Fair Labor Standards Act sates that “no employer shall employ any of his employees…for a workweek longer than forty hours unless such employee receives compensation for his employment in excess of the hours above specified at a rate not less than one and one-half times Case 3:16-cv-00788-JAG Document 4-1 Filed 11/11/16 Page 3 of 11 PageID# 24 00856655-4 4 the regular rate at which he is employed.” 29 U.S.C § 207(a)(1). The terms “employer” and “employee” are defined by the Act, but they have rather broad meanings. The Act defines an “employer” as “any person acting directly or indirectly in the interest of an employer in relation to an employee…” 29 U.S.C. § 203(d). The Act defines an “employee” as, among other things, “any individual employed by an employer.” 29 U.S.C. § 203(e)(1). Recognizing that this is an extremely broad definition, federal courts look to “the economic realities of the relationship between the worker and the putative employer” when deciding whether the worker is truly an “employee” for the purposes of the FLSA. Schultz v. Capital Int’l Sec., Inc., 466 F.3d 298, 304 (4th Cir. 2006) (citing Bartels v. Birmingham, 332 U.S. 126, 130 (1947)). “The emphasis on economic reality has led courts to develop and apply a six-factor test to determine whether a worker is an employee or an independent contractor.” Schultz, 466 F.3d at 304. These factors are often referred to as the “Silk factors” owing to their origin from the United States Supreme Court opinion United States v. Silk. See Schultz, 466 F.3d at 305 (citing United States v. Silk, 331 U.S. 704 (1947)). “The factors are (1) the degree of control the putative employer has over the manner in which the work is performed; (2) the worker’s opportunities for profit or loss dependent on his managerial skill; (3) the worker’s investment in equipment or material, or his employment of other workers; (4) the degree of skill required for the work; (5) the permanence of the working relationship; and (6) the degree to which the services rendered are an integral part of the putative employer’s business.” Schultz, 466 F.3d at 304-05. “No single factor is dispositive,” and “the ultimate question posed by the Silk test [is] whether…agents [a]re, as a matter of economic reality, dependent on the business they served, or conversely, whether they were in business for themselves.” Schultz, 466 F.3d at 305 (citing Bartels, 332 U.S. Case 3:16-cv-00788-JAG Document 4-1 Filed 11/11/16 Page 4 of 11 PageID# 25 00856655-4 5 at 130); see also McFeeley v. Jackson St. Entm’t, LLC, 825 F.3d 235, 241 (4th Cir. 2016) (applying the Silk factors to determine employer status under the Act). In Schultz, the United States Court of Appeals for the Fourth Circuit reversed a District Court’s determination that security guards hired by a Saudi prince were independent contractors. See Schultz, 466 F.3d at 307-10. The Court held the workers were employees in large part because the tasks they performed were menial, and the prince exercised substantial control over the manner in which they performed their work. See Schultz, 466 F.3d at 307-10. In regards to the first Silk factor, the Court found that the workers were subject to substantial control by the prince because of an eight page “Standard Operating Procedure” document that “strictly dictated the manner in which [they] were to carry out their duties…” Id. at 307. As to the second factor, the Court found “no evidence [the workers] could exercise or hone their managerial skill to increase their pay.” Id. at 308. As to the third factor, the Court found that the prince “supplied almost every piece of equipment the [workers] used: radios, holsters, cell phones, cars, cameras, first aid kits, business cards, and lapel pins.” Id. at 308. As to the fourth factor, the Court found that “many of [the worker’s] tasks required little skill, for example, sorting the mail, making wake up calls, moving furniture, providing newspapers for the Prince, and checking the Dallas Morning News website for updates about the Dallas Cowboys.” Id. at 308. As to the fifth factor, the Court found that “[t]he Prince clearly wanted security agents who would be with him over the long term.” Id. at 309. Finally, as to the sixth factor, the Court found that because the primary business function of the agency that hired the workers was to provide security for the prince, the worker’s job functions were integral to the business. See id. at 308-09. After balancing these factors, the Court ultimately recognized that the workers were economically dependent on their putative employer and were not in business for themselves. Id. at 306. Case 3:16-cv-00788-JAG Document 4-1 Filed 11/11/16 Page 5 of 11 PageID# 26 00856655-4 6 In McFeeley v. Jackson St. Entm’t, LLC, the United States Court of Appeals for the Fourth Circuit affirmed a District Court’s ruling that exotic dancers were employees under the Act. McFeeley v. Jackson St. Entm’t, LLC,, 825 F.3d 235, 239 (4th Cir. 2016). The Court found that the “most critical” factor of the Silk factors in that case was “the first factor of the ‘economic realities’ test: the degree of control that the putative employer ha[d] over the manner in which the work [was] performed.” Id. at 241. The Court found that because the employing dance club required dancers to obey a written rulebook, set their working schedules, and instructed them on their behavior, the dancers were properly classified as employees under the Act. Id. at 241-42. The Court did note however, that “[n]one of [these findings] is to suggest that a worker automatically becomes an employee covered by the FLSA the moment a company exercises any control over him.” Id. at 242. The Court further elaborated that “[a]fter all, a company that engages an independent contractor seeks to exert some control, whether expressed orally or in writing, over the performance of the contractor’s duties…” Id. The Court further observed that “[i]t is rather hard to imagine a party contracting for needed services with an insouciant ‘Do whatever you want wherever you want, and however you please.’” Id. A. The alleged facts do not support a plausible claim that Rescue Rangers exercises significant control over the Plaintiffs. In this case, the Plaintiffs simply have not alleged sufficient facts so as to make a plausible case that they are employees under the Act. Pursuant to the Silk test and its application in the Fourth Circuit, the Plaintiffs must demonstrate that they are not in business for themselves, but rather are in business for Rescue Rangers. The Plaintiffs must do this by pleading sufficient facts to make a plausible case under the Silk test that they are employees. Case 3:16-cv-00788-JAG Document 4-1 Filed 11/11/16 Page 6 of 11 PageID# 27 00856655-4 7 At the outset, the Plaintiffs must establish that Rescue Rangers exercises significant control over their work activity, but their complaint fails to include any factual basis to support this assertion. The allegation that the Plaintiffs are “not allowed to set their own schedule or take time off for a vacation or during a holiday,” even if true1, fails to demonstrate that Rescue Rangers exercises substantial control over them. In fact, it also fails to demonstrate that Rescue Rangers does not exercise substantial control over them. It simply reflects the fact that the Plaintiffs and Rescue Rangers entered into a contract for services that omits reference to any definite times in which performance may or may not be required. To be sure, the Complaint does not allege that Plaintiffs are required to work at any particular time like the dancers in McFeeley or the security guards in Schultz were. Further, the Complaint baldly alleges that Rescue Rangers retains the “absolute right” to “control and direct” the work of the tow truck drivers. However, the Plaintiffs fail to cite to a specific set of policies and procedures like those identified by the McFeeley and Schultz courts to support this contention. The Plaintiffs allege that Rescue Rangers requires them to wear uniforms and place magnetic signs on their trucks when they respond to a call, but this is not nearly enough to make a plausible claim that the “economic reality” is that the drivers are not in business for themselves. B. The complaint fails to contain sufficient facts to demonstrate that the Plaintiffs do not have the opportunity to be compensated commensurate with their skill. 1 Although all allegations made by the Plaintiffs must be taken as true at the Motion to Dismiss stage, it is worth noting that these allegations, along with several others in the Complaint, are nonsensical and in direct contradiction to both the terms and spirit of the agreement. The tow truck drivers do not receive “time off” or “vacations” precisely because pursuant to the terms of their continuously running agreement, they can choose to accept or deny a referral whenever they please. Case 3:16-cv-00788-JAG Document 4-1 Filed 11/11/16 Page 7 of 11 PageID# 28 00856655-4 8 The Plaintiffs must also plead sufficient facts to suggest that they have no opportunity to earn compensation in accordance with their skill. The allegations that the drivers are paid2 per call does not definitively suggest that they are employees or independent contractors. In fact, it does not speak at all to whether the pay per call is based on skill or based on parameters set by Rescue Rangers. Further, there is no Silk test factor that suggests workers paid by the job rather than per the hour are employees. Without any supporting facts to suggest that the drivers’ compensation is not based on their own skill, the Plaintiffs’ allegation about compensation falls short of that required to make out a plausible claim of employment. C. The complaint fails to include anything except bare legal conclusions in regards to the other four Silk factors. The Plaintiffs additionally must plead sufficient facts to make a plausible claim that they did not significantly invest in their own equipment, that their work is not particularly specialized, that their relationship with Rescue Rangers has a degree of permanence, and that their services are an integral part of Rescue Rangers’ business. With regards to including supporting facts for these factors, the complaint falls woefully short. Paragraphs 19 through 24 of the Complaint merely recite the six Silk test elements and do not provide any specific facts to support the allegations. This is precisely the type of “formulaic recitation of the elements” that the Fourth Circuit has said does not meet the pleading standard established under Twombly and Iqbal. See Francis, 588 F.3d at 193. This recitation of the elements similarly fails to establish a sufficient basis for standing under the Act. See Kerns, 585 F.3d at 192 (applying the 12(b)(6) standard to a 2 Once again, although it must be taken as true, this allegation mischaracterizes the true relationship between the tow truck drivers, the stranded motorists, and Rescue Rangers. The fact that the drivers are paid “per call” is absolutely consistent with their independent contractor status considering that the drivers are paid by the stranded motorists, and in turn, it is the drivers that pay Rescue Rangers a referral fee. Rescue Rangers does not compensate the drivers. Case 3:16-cv-00788-JAG Document 4-1 Filed 11/11/16 Page 8 of 11 PageID# 29 00856655-4 9 facial attack on subject matter jurisdiction); 29 U.S.C. § 207(a)(1) (stating that only an “employee” is entitled to overtime compensation). For these reasons, the Court lacks subject matter jurisdiction of the claim. II. The Plaintiffs’ defective complaint similarly fails to state a claim upon which relief may be granted. For the same reasons discussed supra, the Plaintiffs’ complaint fails to state a claim upon which relief may be granted. To survive a motion to dismiss, the Plaintiffs must plead sufficient facts to establish a plausible claim for relief. See Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). The Plaintiffs have failed to plead sufficient facts to establish that they are employees under the Act, and as such, they have failed to demonstrate that they are entitled to relief. Therefore, the complaint should also be dismissed pursuant to Federal Rule of Civil Procedure Rule 12(b)(6). CONCLUSION On balance, the Plaintiffs fail to allege sufficient facts to establish a plausible case that they are employees under the Silk test. While Plaintiffs do include a few unsubstantiated factual allegations, these facts in totality do not support the position that the answer to the “ultimate question” is that they are not in business for themselves. Since the Plaintiffs fail to plead enough facts to show they are employees under the Act, they lack standing to bring a claim for overtime wages. Furthermore, and for the same reasons, they fail to state a claim upon which relief can be granted. As such, their complaint should be dismissed for lack of subject matter jurisdiction and for failure to state a claim under Federal Rules of Civil Procedure 12(b)(1) and 12(b)(6) respectively. Case 3:16-cv-00788-JAG Document 4-1 Filed 11/11/16 Page 9 of 11 PageID# 30 00856655-4 10 WHEREFORE, the Defendant respectfully requests that the Court dismiss the Complaint and grant all further relief to Defendant Rescue Rangers, LLC as it deems appropriate. Respectfully submitted, Rescue Rangers LLC, by Counsel /s/ Jerry William Boykin Jerry William Boykin, Esq., VSB # 15056 Bean, Kinney & Korman, P.C. 2300 Wilson Boulevard, 7th Floor Arlington, VA 22201 (703) 525-4000 (703) 525-2207 (Fax) jboykin@beankinney.com Counsel for Defendant Case 3:16-cv-00788-JAG Document 4-1 Filed 11/11/16 Page 10 of 11 PageID# 31 00856655-4 11 CERTIFICATE OF SERVICE I HEREBY CERTIFY that on this 11th Day of November, 2016, a copy of the foregoing was served via electronic mail and first class mail postage prepaid to the following: Nicholas Woodfield, Esq., VSB# 48938 The Employment Law Group, P.C. 888 17th Street N.W., Suite 900 Washington, DC 20006 (202)-261-2812 (202)-261-2385 (facsimile) nwoodfield@employmentlawgroup.com Harold L. Licthen Thomas P. Fowler Olena Savytska LICTHEN & LISS-RIORDAN, P.C. 729 Boylston Street, Ste. 2000 Boston, MA 02116 (617)-499-5800 hlicthen@llrlaw.com tfowler@llrlaw.com osavytska@llrlaw.com /s/ Jerry William Boykin Jerry William Boykin Case 3:16-cv-00788-JAG Document 4-1 Filed 11/11/16 Page 11 of 11 PageID# 32 00857711-1 IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF VIRGINIA (Richmond Division) ROBERT KAYLER and ) KARINA QUILES, individually and ) on behalf of all others similarly situated ) ) Plaintiffs, ) ) v. ) Case No. 3:16-cv-00788-JAG ) ) RESCUE RANGERS, LLC, ) ) Defendant. ) ____________________________________) NOTICE OF HEARING PLEASE TAKE NOTICE that on Friday, December 2, 2016, at 10:00 AM, or as soon thereafter as counsel may be heard, Defendant Rescue Rangers, LLC, by counsel, shall appear at the United States District Court for the Eastern District of Virginia, Richmond Division, Spottswood W. Robinson III and Robert R. Merhige, Jr., Federal Courthouse, 701 East Broad Street, Richmond, VA 23219, to be heard on its pending Motion To Dismiss Complaint for Lack of Subject Matter Jurisdiction and Failure to State a Claim. Respectfully submitted, /s/ Jerry William Boykin__ Jerry William Boykin, Esq., VSB # 15056 Bean, Kinney & Korman, P.C. Case 3:16-cv-00788-JAG Document 4-2 Filed 11/11/16 Page 1 of 3 PageID# 33 00857711-1 2300 Wilson Boulevard, 7th Floor Arlington, VA 22201 (703) 525-4000 (703) 525-2207 (Fax) jboykin@beankinney.com Counsel for Defendant Case 3:16-cv-00788-JAG Document 4-2 Filed 11/11/16 Page 2 of 3 PageID# 34 00857711-1 CERTIFICATE OF SERVICE I HEREBY CERTIFY that on this 11th Day of November, 2016, a copy of the foregoing was served via electronic mail and first class mail postage prepaid to the following: Nicholas Woodfield, Esq., VSB# 48938 The Employment Law Group, P.C. 888 17th Street N.W., Suite 900 Washington, DC 20006 (202)-261-2812 (202)-261-2385 (facsimile) nwoodfield@employmentlawgroup.com Harold L. Licthen Thomas P. Fowler Olena Savytska LICTHEN & LISS-RIORDAN, P.C. 729 Boylston Street, Ste. 2000 Boston, MA 02116 (617)-499-5800 hlicthen@llrlaw.com tfowler@llrlaw.com osavytska@llrlaw.com /s/ Jerry William Boykin Jerry William Boykin Case 3:16-cv-00788-JAG Document 4-2 Filed 11/11/16 Page 3 of 3 PageID# 35
