Valdez v. Celerity Logistics, Inc.

999 F. Supp. 2d 936, 2014 U.S. Dist. LEXIS 23981, 2014 WL 736419
CourtDistrict Court, N.D. Texas
DecidedFebruary 26, 2014
DocketCivil Action No. 3:12-CV-4368-D
StatusPublished
Cited by12 cases

This text of 999 F. Supp. 2d 936 (Valdez v. Celerity Logistics, Inc.) is published on Counsel Stack Legal Research, covering District Court, N.D. Texas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Valdez v. Celerity Logistics, Inc., 999 F. Supp. 2d 936, 2014 U.S. Dist. LEXIS 23981, 2014 WL 736419 (N.D. Tex. 2014).

Opinion

MEMORANDUM OPINION AND ORDER

SIDNEY A. FITZWATER, Chief Judge.

In this action alleging overtime pay and minimum wage violations and retaliation under the Fair Labor Standards Act (“FLSA”), 29 U.S.C. § 201 et seq., defendants move to dismiss under Fed.R.Civ.P. 12(b)(6) for failure to state a claim on which relief can be granted, and one defendant moves under Rule 12(e) for a more definite statement. Among the questions presented by the motions to dismiss is whether plaintiffs have pleaded a plausible claim for successor liability. For the reasons that follow, the court grants the motions to dismiss, grants plaintiffs leave to replead, and denies the motion for more definite statement.

I

This is an action under the FLSA by plaintiffs Jesus Andres Valdez, Marta Patricia Castillo, and all others similarly situated against defendants Segue Distribution, Inc. (“Segue”), Celerity Logistics, Inc. (“CLI”), Celerity Acquisitions, Inc. d/b/a Celerity Logistics Company (“CAI”), Insperity, Inc. fik/a Administaff, Inc., BeavEx, Inc. (“BeavEx”),1 Mike Medley, and Scott Watts. Plaintiffs assert claims for overtime and minimum wage violations under the FLSA, as well as for successor liability and for retaliation under the FLSA’s anti-retaliation provision, 29 U.S.C. § 215(a)(3). Pertinent to the instant motions, plaintiffs allege that BeavEx acquired the assets of CAI, who had previously acquired the assets of CLI, who had previously acquired the assets of Segue. Plaintiffs further allege that each successor (BeavEx, CAI, and CLI) “has or had the same managers / supervisors, business model, employees, equipment and facilities and provides or provided the same services to the same clientele as its predecessor.” Am. Compl. ¶¶ 29(CLI), 30(CAI), 31 (BeavEx). Under plaintiffs’ successor liability theory, BeavEx, as the successor corporation to CAI, is liable for the liabilities of CAI, who is in turn liable for the [939]*939liabilities of CLI, who is in turn liable for the liabilities of Segue.2

CLI and CAI move to dismiss plaintiffs’ successor liability claim, contending that successor liability does not apply to FLSA claims, and that, even if it does, plaintiffs have not pleaded a plausible claim for successor liability. By separate motion,3 BeavEx moves to dismiss plaintiffs’ successor liability claim on similar grounds, and it also moves under Rule 12(e) for a more definite statement regarding plaintiffs’ allegations about their employment with BeavEx.4 Plaintiffs oppose the motions.

II

“In deciding a Rule 12(b)(6) motion to dismiss, the court evaluates the sufficiency of plaintiffs’ amended complaint by ‘accepting all well-pleaded facts as true, viewing them in the light most favorable to the plaintiff.’ ” Bramlett v. Med. Protective Co. of Fort Wayne, Ind., 855 F.Supp.2d 615, 618 (N.D.Tex.2012) (Fitzwater, C.J.) (quoting In re Katrina Canal Breaches Litig., 495 F.3d 191, 205 (5th Cir.2007) (internal quotation marks and alteration omitted)). To survive a motion to dismiss under Rule 12(b)(6), plaintiffs must plead “enough facts to state a claim to relief that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). “A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009). “The plausibility standard is not akin to a ‘probability requirement,’ but it asks for more than a sheer possibility that a defendant has acted unlawfully.” Id.; see also Twombly, 550 U.S. at 555, 127 S.Ct. 1955 (“Factual allegations must be enough to raise a right to relief above the speculative level[.]”). “[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 ‘shown’ — ‘that the pleader is entitled to relief.’ ” Iqbal, 556 U.S. at 679, 129 S.Ct. 1937 (quoting Rule 8(a)(2)) (alteration omitted). “Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice.” Id. at 678, 129 S.Ct. 1937 (citation omitted).

Ill

The court first considers defendants’ Rule 12(b)(6) motions to dismiss plaintiffs’ successor liability claim.

A

Defendants contend that the successor liability doctrine does not apply to FLSA claims, and that, even if it does, plaintiffs have failed to state a claim for successor [940]*940liability because they have not pleaded facts, with sufficient specificity, that would satisfy the requirements of such a claim. Plaintiffs respond that successor liability is cognizable under the FLSA and that the allegations in their amended complaint are sufficient to state a plausible claim.

B

When a company is sold in an asset sale, the buyer ordinarily acquires the company’s assets but not its liabilities. See Teed v. Thomas & Betts Power Solutions, L.L.C., 711 F.3d 763, 764 (7th Cir.2013). Under federal common law, there is an exception to this general rule known as the doctrine of successorship or successor liability. This doctrine is “derived from labor law principles enunciated in four Supreme Court cases.” Rojas v. TK Commc’ns, Inc., 87 F.3d 745, 749 (5th Cir.1996) (citing John Wiley & Sons, Inc. v. Livingston, 376 U.S. 543, 84 S.Ct. 909, 11 L.Ed.2d 898 (1964); NLRB v. Burns Int’l Sec. Servs., Inc., 406 U.S. 272, 92 S.Ct. 1571, 32 L.Ed.2d 61 (1972); Howard Johnson Co. v. Det. Local Joint Exec. Bd., 417 U.S. 249, 94 S.Ct. 2236, 41 L.Ed.2d 46 (1974); Fall River Dyeing & Finishing Corp. v. NLRB, 482 U.S. 27, 107 S.Ct. 2225, 96 L.Ed.2d 22 (1987)). Although initially developed in the context of labor relations, the doctrine of successor liability has been extended to statutes governing employment discrimination, such as Title VII of the Civil Rights Act of 1964 (“Title VII”), 42 U.S.C. § 2000e et seq. Id. at 750. The doctrine’s underlying policy “is that an employee’s statutory rights should not be vitiated by the mere fact of a sudden change in the employer’s business.” Musikiwamba v. ESSI, Inc.,

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999 F. Supp. 2d 936, 2014 U.S. Dist. LEXIS 23981, 2014 WL 736419, Counsel Stack Legal Research, https://law.counselstack.com/opinion/valdez-v-celerity-logistics-inc-txnd-2014.