Nakahata, et al. v. New York-Presbyterian HealthCare System, Inc. et al., No. 11-734 (2d Cir. 2013)
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Plaintiffs appealed the district court's dismissal of their complaints alleging that defendants failed to compensate them for work performed during meal breaks, before and after schedule shifts, and during required training sessions. The court affirmed the district court's dismissal with prejudice of the Fair Labor Standards Act (FLSA), 29 U.S.C. 201 et seq., gap-time, conversion, estoppel, fraud, negligent misrepresentation, and Racketeer Influenced and Corrupt Organizations Act (RICO), 18 U.S.C. 1961, claims. The court remanded, however, the FLSA and New York Labor Law claims, the NYLL gap-time claims, the breach of express and implied oral contract claims, the breach of an implied covenant of good faith and fair dealing claims, the quantum meruit claims, and the unjust enrichment claims for amended pleading. Accordingly, the court vacated and remanded for further proceedings.
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11-0734-cv, 11-0710-cv, 11-0713-cv, 11-0728-cv Nakahata, et al., v. New York-Presbyterian Healthcare System, Inc., et al. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT August Term, 2012 (Argued: November 9, 2012 Decided: July 11, 2012) Docket Nos. 11-0734, 11-0710, 11-0713, 11-0728 - - - - - - - - - - - - - - - - - - - -x MASAHIRO NAKAHATA, on behalf of herself and all other employees similarly situated, DIANA GARDOCKI, on behalf of herself and all other employees similarly situated, Plaintiffs-Appellants, DIANE LEE SUSSMAN, STEVIE HARISTON, CAROLE TASSY, MARY MAHONEY, LINDA MARRONE, MARY OLDAK, VOLVICK DESIL, STEPHANIE UHRIG, Plaintiffs, - v.NEW YORK-PRESBYTERIAN HEALTHCARE SYSTEM, INC., HERBERT PARDES, NEW YORK AND PRESBYTERIAN HOSPITAL, WAYNE OSTEN, Defendants-Appellees, NEW YORK-PRESBYTERIAN FUND, INC., NEW YORK-PRESBYTERIAN HOSPITAL, BROOKLYN HOSPITAL CENTER, HOLY NAME HOSPITAL, INC., HOLY NAME MEDICAL CENTER, LAWRENCE HOSPITAL CENTER, MARY IMOGENE BASSETT, ONAL CARE NEW MILFORD HOSPITAL, INC., NEW YORK COMMUNITY HOSPITAL OF BROOKLYN, INC., NEW YORK DOWNTOWN HOSPITAL, NEW YORK HOSPITAL MEDICAL CENTER OF QUEENS, NEW YORK METHODIST HOSPITAL, WESTCHESTER SQUARE MEDICAL CENTER, INC., NYACK HOSPITAL, PALISADES MEDICAL CENTER, STAMFORD HOSPITAL, VALLEY HOSPITAL, WHITE PLAINS MEDICAL CENTER, WINTHROPUNIVERSITY HOSPITAL, WYCHOFF HEIGHTS MEDICAL CENTER, ST. MARY S HEALTHCARE SYSTEM FOR CHILDREN, INC., A. SOLOMON TORRES, NEW YORK SOCIETY FOR THE RELIEF OF THE RUPTURED AND CRIPPLED, MAINTAINING THE HOSPITAL FOR SPECIAL SURGERY, MARY IMOGENE BASSETT HOSPITAL, NEW MILFORD HOSPITAL, INC., NORTHERN WESTCHESTER HOSPITAL ASSOCIATION, WHITE PLAINS HOSPITAL MEDICAL 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 CENTER, WYCKOFF HEIGHTS MEDICAL CENTER, NEW YORK GRACIE SQUARE HOSPITAL, INC., AMSTERDAM NURSING HOME CORPORATION, Defendants. - - - - - - - - - - - - - - - - - - - -x JONATHAN YARUS, on behalf of themselves and all other employees similarly situated, MOHAMED ALI, on behalf of himself and all other employees similarly situated, Plaintiffs-Appellants, LLOYD BLACKWOOD, on behalf of themselves and all other employees similarly situated, MARTIN UKEJE, TAE JOO KIM, SHARON CAMPBELL, JEROME CROMWELL, HELENA ACHAMPONG, ERNESTINE DANIEL, VOLVICK DESIL, STEPHANIE UHRIG, GAIL WHICKUM, Plaintiffs, - v.NEW YORK CITY HEALTH AND HOSPITALS CORPORATION, BELLEVUE HOSPITAL CENTER, KINGS COUNTY HOSPITAL CENTER, JACOBI MEDICAL CENTER, ELMHURST HOSPITAL CENTER, HARLEM HOSPITAL CENTER, METROPOLITAN HOSPITAL CENTER, ALAN D. AVILES, LINCOLN MEDICAL AND MENTAL HEALTH CENTER, NORTH CENTRAL BRONX HOSPITAL, CONEY ISLAND HOSPITAL, WOODHULL MEDICAL AND MENTAL HEALTH CENTER, QUEENS HOSPITAL CENTER, Defendants-Appellees. - - - - - - - - - - - - - - - - - - - -x PATRICIA MEGGINSON, on behalf of herself and all other employees similarly situated, Plaintiff-Appellant, HELEN BRUGGER, on behalf of herself and all other employees similarly situated, MARY OLDAK, MICHELLE ALVAREZ, STEPHANIE UHRIG, Plaintiffs, - v.- 2 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 WESTCHESTER COUNTY HEALTH CARE CORPORATION, WESTCHESTER MEDICAL CENTER, MARIA FARERI CHILDREN S HOSPITAL, MICHAEL D. ISRAEL, PAUL S. HOCKENBERG, Defendants-Appellees, KERRY ORISTANO, PAULA REDD ZEMAN, Defendants. - - - - - - - - - - - - - - - - - - - -x OLUSOLA ALAMU, on behalf of himself and all other employees similarly situated, JACQUELINE COOPER-DAVIS, on behalf of herself and all other employees similarly situated, Plaintiffs-Appellants, - v.BRONX-LEBANON HOSPITAL CENTER, INCORPORATED, BRONX-LEBANON HOSPITAL CENTER-FULTON DIVISION, BRONX-LEBANON HOSPITAL CENTERCONCOURSE DIVISION, MIGUEL A. FUENTES, JR., SHELDON ORTSMAN, Defendants-Appellees, SELENA GRIFFIN-MAHON, Defendant.* - - - - - - - - - - - - - - - - - - - -x Before: LOHIER, Circuit Judge, POGUE, Judge * The Clerk of the Court is directed to amend the official caption as shown above. Donald C. Pogue, Chief Judge of the United States Court of International Trade, sitting by designation. Debra A. Livingston, Circuit Judge, recused herself before oral argument. The two remaining members of the panel, who are in agreement, have decided this case in accordance with Second Circuit Internal Operating Procedure E(b). 3 1 Plaintiffs-Appellants in four related cases appeal from a 2 single order of the United States District Court for the 3 Southern District of New York (Crotty, J.) dismissing their 4 claims that Defendants-Appellees violated the Fair Labor 5 Standards Act, New York Labor Law, Racketeer Influenced and 6 Corrupt Organizations Act, and New York common law. 7 following reasons, the judgment is affirmed in part, vacated in 8 part, and remanded. 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 For the MICHAEL J. LINGLE (Guy A. Talia, J. Nelson Thomas, on the brief), Thomas & Solomon LLP, Rochester, New York, for Appellants. JAMES S. FRANK (Kenneth W. DiGia, Kenneth J. Kelly, on the brief), Epstein Becker & Green, P.C., New York, New York, (Terence K. McLaughlin, Willkie Farr & Gallagher LLP, New York, New York, on the brief), for Appellees New York-Presbyterian Healthcare System, Inc., et al. VICTORIA SCALZO, Assistant Corporation Counsel of the City of New York, New York, New York (Kristin M. Helmers, Blanche Greenfield, on the brief), for Michael A. Cardozo, Corporation Counsel of the City of New York, for Appellees New York City Health and Hospitals Corporation, et al. LEONARD M. ROSENBERG and SALVATORE PUCCIO (Lauren M. Levine, on the brief), Garfunkel Wild, P.C., Great Neck, New York, for Appellees Westchester County Healthcare Corp., et al. 4 1 2 3 4 5 6 7 8 9 NANCY V. WRIGHT (Ricki E. Roer, Scott R. Abraham, on the brief), Wilson Elser Moskowitz Edelman & Dicker LLP, New York, New York, for Appellee Bronx-Lebanon Hospital Center, Inc., et al. POGUE, Judge: 10 This is an appeal from an order by the United States 11 District Court for the Southern District of New York dismissing 12 the complaint in each of four cases: Nakahata v. New York- 13 Presbyterian Healthcare System, Inc., No. 10 Civ. 2661; Yarus v. 14 New York City Health and Hospitals Corp., No. 10 Civ. 2662; 15 Megginson v. Westchester Medical Center, No. 10 Civ. 2683; and 16 Alamu v. The Bronx-Lebanon Hospital Center, Inc., No. 10 Civ. 17 3247. Nakahata v. New York-Presbyterian Healthcare Sys., Inc., 18 2011 WL 321186 (S.D.N.Y. Jan. 28, 2011) ( Nakahata I ). 19 Plaintiffs current and former healthcare employees allege 20 that the Defendants healthcare systems, hospitals, corporate 21 heads, and affiliated entities violated the Fair Labor 22 Standards Act ( FLSA ), New York Labor Law ( NYLL ), Racketeer 23 Influenced and Corrupt Organizations Act ( RICO ), and New York 24 common law by failing to compensate Plaintiffs for work 25 performed during meal breaks, before and after scheduled shifts, 26 and during required training sessions. 27 dismissed the four complaints in their entirety for failing to 5 The District Court 1 state a claim pursuant to Federal Rule of Civil Procedure 2 12(b)(6). 3 We affirm in part the District Court s decision and remand 4 in part. 5 gap-time, RICO, and certain common law claims. 6 the dismissal of the FLSA and NYLL overtime claims, but we 7 remand these claims with leave to replead. 8 on the dismissal of the NYLL gap-time claims and remand for 9 reconsideration. 10 We affirm the dismissal, with prejudice, of the FLSA We also affirm We reserve judgment Finally, we vacate the dismissal of certain common law claims and remand with leave to replead. 11 12 BACKGROUND 13 The four cases before us on appeal are but a few among many 14 such actions brought by a single law firm, Thomas & Solomon LLP, 15 and premised on a stock set of allegations concerning 16 underpayment in the healthcare industry. 17 decision of this Court addressing these allegations, following 18 the recent opinion in Lundy v. Catholic Health System of Long 19 Island Inc., 711 F.3d 106 (2d Cir. 2013). 20 remain pending before this Court.1 1 This is the second Several related cases See Hinterberger v. Catholic Health Sys., Inc., No. 120630; Hinterberger v. Catholic Health Sys., Inc., No. 12-0918; Gordon v. Kaleida Health, No. 12-0654; Gordon v. Kaleida Health, 12-0670; Nakahata v. New York-Presbyterian Healthcare Sys., Inc., No. 12-4128; Megginson v. Westchester Med. Ctr., No. 124084; Alamu v. The Bronx-Lebanon Hosp. Ctr., No. 12-4085. 6 1 The parties are healthcare workers, on behalf of a putative 2 class, and their alleged employers. 3 identified only as employees or employees of the defendants, 4 are Masahiro Nakahata and Diana Gardocki, Nakahata 2d Am. Compl. 5 ¶ 62; Patricia Megginson, Megginson Am. Compl. ¶ 61; Olusola 6 Alamu and Jacqueline Cooper-Davis, Alamu Am. Compl. ¶ 64; and 7 Jonathan Yarus and Mohamed Ali, Yarus Am. Compl. ¶ 52. 8 Plaintiffs filed their suits as putative collective and class 9 actions on behalf of those employees of defendants who were The named Plaintiffs, 10 suffered or permitted to work by defendants and not paid their 11 regular or statutorily required rate of pay for all hours 12 worked. Alamu Am. Compl. ¶ 65; Megginson Am. Compl. ¶ 62; 13 Nakahata 2d Am. Compl. ¶ 63; Yarus Am. Compl. ¶ 53. 14 Defendants named in the complaints include corporate healthcare 15 systems, individual hospitals in those systems, persons in 16 corporate leadership roles, and affiliated healthcare 17 facilities.2 2 The Named Defendants include (1) The Bronx-Lebanon Hospital Center, The Bronx-Lebanon Hospital Center-Fulton Division, The Bronx-Lebanon Hospital Center-Concourse Division, Miguel A. Fuentes, Jr. (President and CEO of Bronx-Lebanon Hospital Center), and Sheldon Ortsman (former Vice President of the Human Resources Division of Bronx-Lebanon Hospital Center), Alamu Am. Compl. ¶¶ 18, 40, 52; (2) Westchester Medical Center, Westchester County Health Care Corporation, Maria Fareri Children s Hospital at Westchester Medical Center, Michael D. Israel (President and CEO of Westchester Medical Center), and Paul S. Hochenberg (Senior Vice President of Human Resources for Westchester Medical Center), Megginson Am. Compl. ¶¶ 18, 41, 51; 7 1 Plaintiffs allege that it is Defendants policy not to pay 2 employees for all hours worked, including some overtime hours. 3 In particular, Plaintiffs allege: (1) Defendants have a policy 4 of automatically deducting time for meal breaks from employees 5 paychecks despite consistently requiring employees to work 6 during meal breaks; (2) employees engage in work activities both 7 before and after their shift without compensation; and (3) 8 Defendants require employees to attend training sessions for 9 which they are not compensated. Based on these allegations, 10 Plaintiffs seek to recover unpaid compensation pursuant to the 11 FLSA, NYLL,3 and New York common law. Plaintiffs further allege (3) New York-Presbyterian Healthcare System, Inc., The New York and Presbyterian Hospital, Herbert Pardes (President and CEO of New York-Presbyterian Healthcare System), and Wayne Osten (Senior Vice President and Director for New York-Presbyterian Healthcare System), Nakahata 2d Am. Compl. ¶¶ 18, 41, 51; and (4) New York City Health and Hospitals Corporation, Bellevue Hospital Center, Kings County Hospital Center, Jacobi Medical Center, Elmhurst Hospital Center, Harlem Hospital Center, Metropolitan Hospital Center, Lincoln Medical and Mental Health Center, North Central Bronx Hospital, Coney Island Hospital, Woodhull Medical and Mental Health Center, Queens Hospital Center, and Alan D. Aviles (President and CEO of New York City Health and Hospitals Corporation), Yarus Am. Compl. ¶¶ 18, 39. Plaintiffs complaints also include extensive lists of affiliated healthcare facilities that Plaintiffs allege are under the operational control of the named Defendants. See Alamu Am. Compl. ¶¶ 19 20; Megginson Am. Compl. ¶¶ 19 20; Nakahata 2d Am. Compl. ¶¶ 19 20; Yarus Am. Compl. ¶¶ 19 20. These lists comprise several dozen entities and do not require reproduction in full. 3 Plaintiffs in Yarus v. New York City Health and Hospitals Corp., No. 11-0710, withdrew their NYLL claims prior to the District Court s decision. Pls. Mem. L. Opp n Defs. Mot. 8 1 that their paychecks were misleading and part of a fraudulent 2 scheme to hide the underpayment in violation of RICO and New 3 York common law. 4 Defendants moved the District Court to dismiss the 5 complaint in each case for failure to state a claim. 6 District Court, observing that all four complaints contain[ed] 7 strikingly similar allegations and deficiencies, Nakahata I, 8 2011 WL 321186 at *1, issued a single opinion dismissing each 9 complaint in its entirety and terminating all four cases. Id. at The 10 *7. 11 repleading the FLSA and NYLL claims, but it did not permit 12 refiling of the RICO and common law claims. Id. at *6 7. 13 Plaintiffs both appealed the District Court s decision and filed 14 new actions alleging claims pursuant to the FLSA and NYLL. The District Court permitted Plaintiffs to file new actions 15 16 17 JURISDICTION & STANDARD OF REVIEW The District Court had original jurisdiction over 18 Plaintiffs FLSA and RICO claims pursuant to 28 U.S.C. § 1331 19 (2006). See 29 U.S.C. § 216(b) (2006) (creating a civil right of 20 action for violation of the FLSA); 18 U.S.C. § 1964(c) (2006) 21 (creating a civil right of action for violation of RICO). 22 District Court had supplemental jurisdiction over the NYLL and The Dismiss at 1 n.1, Nakahata I, 2011 WL 321186 (No. 10 Civ. 2662), ECF No. 96. Therefore, our decision with regard to the NYLL claims does not apply to the Plaintiffs in Yarus. 9 1 common law claims pursuant to 28 U.S.C. § 1367. 2 jurisdiction over the appeal pursuant to 28 U.S.C. § 1291. 3 We have We review a dismissal for failure to state a claim de novo. 4 Harris v. Mills, 572 F.3d 66, 71 (2d Cir. 2009). 5 the sufficiency of the complaint, we take all factual 6 allegations as true and draw all reasonable inferences in the 7 plaintiff s favor. Id. 8 When reviewing A well-pled complaint must contain sufficient factual 9 matter, accepted as true, to state a claim to relief that is 10 plausible on its face. Ashcroft v. Iqbal, 556 U.S. 662, 678 11 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 12 (2007)); see also Harris, 572 F.3d at 71 72. 13 the complaint need not show a probability of plaintiff s 14 success, but it must evidence more than a mere possibility of a 15 right to relief. Iqbal, 556 U.S. at 678; Twombly, 550 U.S. at 16 556. 17 see Starr v. Sony BMG Music Entm t, 592 F.3d 314, 328 29 (2d 18 Cir. 2010) (Newman, J., concurring), that requires the court to 19 draw upon its experience and common sense, Iqbal, 556 U.S. at 20 679. 21 To be plausible, Determining plausibility is a context specific endeavor, Allegations of fraud are subject to a heightened pleading 22 standard. 23 particularity the circumstances constituting fraud, Fed. R. 24 Civ. P. 9(b), which we have repeatedly held requires the When alleging fraud, a party must state with 10 1 plaintiff to (1) specify the statements that the plaintiff 2 contends were fraudulent, (2) identify the speaker, (3) state 3 where and when the statements were made, and (4) explain why the 4 statements were fraudulent. Mills v. Polar Molecular Corp., 12 5 F.3d 1170, 1175 (2d Cir. 1993) (citing Cosmas v. Hassett, 886 6 F.2d 8, 11 (2d Cir. 1989)); see also Anatian v. Coutts Bank 7 (Switz.) Ltd., 193 F.3d 85, 88 (2d Cir. 1999). 8 plaintiff must allege facts that give rise to a strong 9 inference of fraudulent intent. First Capital Asset Mgmt., Inc. In addition, the 10 v. Satinwood, Inc., 385 F.3d 159, 179 (2d Cir. 2004) (citation 11 omitted). 12 13 DISCUSSION 14 On appeal, Plaintiffs challenge the dismissal of the FLSA 15 and NYLL claims, dismissal of the common law claims, dismissal 16 of the RICO claims, and the determination that there was no 17 basis for a collective or class action. 18 requested assignment of a new district court judge on remand. 19 Before discussing these challenges, however, we address 20 Plaintiffs argument that the District Court improperly denied 21 leave to amend the complaints. 22 23 24 11 Plaintiffs have also 1 2 I We review a district court s denial of leave to amend for 3 abuse of discretion. See Anatian, 193 F.3d at 89. 4 principle, district courts should freely grant a plaintiff leave 5 to amend the complaint. Kleinman v. Elan Corp., 706 F.3d 145, 6 156 (2d Cir. 2013). 7 of the district court s discretion to order a case closed when 8 leave to amend has not been sought. Anatian, 193 F.3d at 89 9 (quoting Campaniello Imps., Ltd. v. Saporiti Italia, S.p.A., 117 As a general Nonetheless, we will not deem it an abuse 10 F.3d 655, 664-65 n.3 (2d Cir. 1997)) (internal quotation marks 11 omitted). 12 if the denial was harmless error. See In re Agent Orange Prod. 13 Liability Litig., 517 F.3d 76, 104 (2d Cir. 2008). 14 Nor will we upset a decision denying leave to amend While we will not upset a denial of leave to amend where 15 the plaintiff failed to seek such leave, the record in this case 16 indicates that Plaintiffs were not provided an opportunity to 17 seek leave to amend in response to the District Court s order of 18 dismissal. 19 no indication that final judgment should await a motion for 20 leave to amend. See Nakahata I, 2011 WL 321186, at *7. 21 clerk of the court entered final judgment the next business day 22 after the opinion was issued. Judgment, Special App. to Nakahata 23 Pls. Br. 15. The District Court ordered the cases terminated with The Absent an opportunity to seek leave to amend, 12 1 Plaintiffs cannot be held accountable for failing to make the 2 necessary motion. 3 Nor can we deem this error harmless. The District Court 4 did permit Plaintiffs to refile their FLSA and NYLL claims in a 5 new action, which obviated much but not all of the prejudice 6 Plaintiffs experienced from the denial of leave to amend. 7 option to file a new action preserved the FLSA and NYLL claims 8 that remained timely on the date the new action was filed, but 9 Plaintiffs lost the opportunity to pursue claims that became The 10 time-barred pursuant to the statute of limitations4 in the 11 interim between the filing of the original complaints and the 12 filing of the new complaints. 13 NYLL claims accrues on the next regular payday following the 14 work period when services are rendered. 29 C.F.R. § 790.21(b) 15 (2012) (last revision 1947 Supp.); see also Rigopoulos v. 16 Kervan, 140 F.2d 506, 507 (2d Cir. 1943); McMahon v. State, 19 17 N.Y.S.2d 639, 642 (N.Y. Ct. Cl. 1940). 18 represents a potential cause of action, it is likely that the 19 statute of limitations expired on some causes of action in the 20 period between the filing of the original complaints and the 21 filing of the new complaints; therefore, some causes of action The cause of action for FLSA and 4 Because each paycheck The limitations period for the FLSA is two years or, if the violation was willful, three years. 29 U.S.C. § 255(a) (2006). The limitations period for the NYLL is six years. N.Y. Lab. Law § 663(3) (McKinney 2002). 13 1 became time-barred upon termination of the original complaints. 2 In other words, every two, three, or six year anniversary of 3 payment depending on the statute of limitations applicable 4 that fell within the period between filing of the original 5 complaints and filing of the new complaints was the occasion of 6 a lost cause of action.5 7 through lost causes of action resulting from the termination of 8 the original complaints, we hold that the District Court abused 9 its discretion in not permitting Plaintiffs to file an amended 10 Because Plaintiffs were prejudiced complaint.6 5 This assumes that Plaintiffs were employed by Defendants prior to the statute of limitations period, a fact which is not pled in the complaints. This is a serious deficiency in the complaints, but, as discussed above, Plaintiffs should be provided the opportunity to amend lest they be time-barred from pursuing legitimate claims. 6 Plaintiffs did pursue those FLSA and NYLL claims that were not time-barred by filing new actions in the Southern District of New York: Nakahata v. New York-Presbyterian Healthcare System, Inc., No. 11 Civ. 6658; Megginson v. Westchester Medical Center, No. 11 Civ. 6657; Alamu v. The Bronx-Lebanon Hospital Center, No. 11 Civ. 6366; and Ali v. New York City Health and Hospitals Corp., 11 Civ. 6393. The District Court again dismissed three of these actions, Nakahata, Megginson, and Alamu, for failure to state a claim, Nakahata v. New York-Presbyterian Healthcare Sys., Inc., 2012 WL 3886555 (S.D.N.Y. Sept. 6, 2012) ( Nakahata II ), and the Nakahata II decision is currently before this Court on appeal in Nakahata v. New York-Presbyterian Healthcare System, Inc., No. 12-4128; Megginson v. Westchester Medical Center, No. 12-4084; and Alamu v. The Bronx-Lebanon Hospital Center, No. 12-4085. The complaints filed in the cases heard collectively as Nakahata II are more detailed than those filed in the cases heard collectively as Nakahata I, and those more detailed allegations may address some of the deficiencies discussed below. Because 14 1 II 2 Plaintiffs allege twelve claims in their complaints, but 3 the heart of their case is the allegation that Defendants failed 4 to compensate them appropriately for all hours worked in 5 violation of the FLSA and NYLL. 6 Plaintiffs and Class members regularly worked hours both under 7 and in excess of forty per week and were not paid for all of 8 those hours. Alamu Am. Compl. ¶ 148; Megginson Am. Compl. 9 ¶ 145; Nakahata 2d Am. Compl. ¶ 146; Yarus Am. Compl. ¶ 136. Plaintiffs allege broadly that 10 Plaintiffs allegation that Defendants did not compensate them 11 for hours worked in excess of forty per week alleges an overtime 12 claim, whereas their allegation that Defendants did not 13 compensate them for hours worked under forty per week alleges a 14 gap-time claim. the more detailed complaints will be tested by this Court in its review of Nakahata II, the District Court may appropriately stay proceedings in this case on remand, pending the outcome of our decision in Nakahata II. The fourth action filed in response to Nakahata I, Ali, remains pending before the District Court. That case was filed by one, but not both, of the named plaintiffs in Yarus. In this regard, Plaintiff Ali is in a position similar to that of the plaintiffs in the three cases discussed above. Plaintiff Yarus has no second case pending either in the District Court or before this Court, but his claims have been preserved through appeal. As a result, on remand the time period for which causes of action are available may be different for Plaintiffs Ali and Yarus because Plaintiff Ali has pursued some causes of action in a separate case, whereas Plaintiff Yarus has not. 15 1 The District Court dismissed both the FLSA and NYLL claims 2 for lack of sufficient factual allegations. 3 District Court found three categories of facts lacking: (1) when 4 unpaid wages were earned and the number of hours worked without 5 compensation; (2) specific facts of employment including dates 6 of employment, pay, and positions; and (3) the entity that 7 directly employed the Plaintiffs. Nakahata I, 2011 WL 321186, 8 at *4. 9 on the same grounds, we will discuss the claims separately. 10 In particular, the Although the overtime and gap-time claims were dismissed The FLSA mandates that an employee engaged in interstate 11 commerce be compensated at a rate of no less than one and one- 12 half times the regular rate of pay for any hours worked in 13 excess of forty per week,7 29 U.S.C. § 207(a) (2006); the NYLL 14 adopts this same standard, N.Y. Comp. Codes R. & Regs. tit. 12, 15 § 142-2.2 (2011) (incorporating the FLSA definition of overtime 16 into the NYLL). 17 Catholic Health System of Long Island Inc., 711 F.3d 106, 114 18 (2d Cir. 2013), to survive a motion to dismiss [an FLSA 19 overtime claim], Plaintiffs must allege sufficient factual 20 matter to state a plausible claim that they worked compensable 21 overtime in a workweek longer than 40 hours. As noted in the recent decision, Lundy v. 7 The FLSA also permits employers and employees in the healthcare field to agree that overtime will be calculated on the basis of eighty hours worked over two weeks instead of forty hours worked over one week. 29 U.S.C. § 207(j) (2006). 16 1 Prior to the decision in Lundy, we had not considered the 2 degree of specificity necessary to state an FLSA overtime claim 3 an issue that has divided courts around the country, see 4 Butler v. DirectSat USA, LLC, 800 F. Supp. 2d 662, 667 68 (D. 5 Md. 2011) (discussing the varying levels of specificity required 6 in different jurisdictions). 7 law on this question, Lundy conclude[d] that in order to state 8 a plausible FLSA overtime claim, a plaintiff must sufficiently 9 allege 40 hours of work in a given workweek as well as some After reviewing the disparate case 10 uncompensated time in excess of the 40 hours. Lundy, 711 F.3d 11 at 114. 12 Lundy was an appeal from an Eastern District of New York 13 decision dismissing essentially the same allegations presented 14 in this case.8 15 complaints in the district court; therefore, the claims were 16 pled with greater factual specificity than the complaints now 17 before us. 18 of hours the plaintiffs were typically scheduled to work in a 19 week. See id. at 114 15. 20 typical week and the alleged time worked without pay, Lundy The plaintiffs in Lundy filed several amended In particular, the Lundy complaint pled the number Given the number of hours worked in a 8 Some of the claims raised in this case were not raised in Lundy, as will be discussed in detail below; however, the core claims of both cases FLSA, NYLL, and RICO claims premised on unpaid hours worked during lunch breaks, before and after shifts, and at required trainings are the same. Lundy, 711 at 113. 17 1 concluded that the plaintiffs could not plausibly allege work in 2 excess of 40 hours in any given week;9 therefore, Lundy affirmed 3 the district court s dismissal. 4 The complaints currently before us contain no similar 5 specificity.10 6 paid for overtime hours worked. 7 Plaintiffs were not compensated for work performed during meal 8 breaks, before and after shifts, or during required trainings Plaintiffs have merely alleged that they were not These allegations that 9 For example, one of the Lundy plaintiffs alleged that she was typically scheduled to work 37.5 hours per week over three shifts with an additional 12.5 hour shift on occasion. She further alleged that she typically worked through her 30 minute meal break, worked an additional 15 minutes before or after her scheduled shift, and was required to attend monthly staff training of 30 minutes and an additional respiratory therapy training totaling 10 hours per year. Assuming she missed a meal and worked an additional 15 minutes every shift, the Lundy court deduced that she had alleged a total of only 39 hours and 45 minutes per week of work. Therefore, she had failed to allege work in excess of 40 hours in any given week. Id. at 114 15. 10 Although the complaints currently before us clearly do not meet the Lundy standard, we should note that the standard employed by the District Court in this case was more demanding than that employed in Lundy. Compare Nakahata I, 2011 WL 321186, at *4 ( At a minimum, [the complaint] must set forth the approximate number of unpaid regular and overtime hours allegedly worked. ), with Lundy, 711 F.3d at 114 ( [A] plaintiff must sufficiently allege 40 hours of work in a given workweek as well as some uncompensated time in excess of the 40 hours. ). While the standard we reaffirm today does not require an approximate number of overtime hours, we reiterate that determining whether a claim is plausible is a context-specific task that requires the reviewing court to draw on its judicial experience and common sense, Lundy, 711 F.3d at 114 (quoting Iqbal, 556 U.S. at 679), and that [u]nder a case-specific approach, some courts may find that an approximation of overtime hours worked may help draw a plaintiff s claim closer to plausibility, id. at 114 n.7. 18 1 raise the possibility that Plaintiffs were undercompensated in 2 violation of the FLSA and NYLL; however, absent any allegation 3 that Plaintiffs were scheduled to work forty hours in a given 4 week, these allegations do not state a plausible claim for such 5 relief. 6 must provide sufficient detail about the length and frequency of 7 their unpaid work to support a reasonable inference that they 8 worked more than forty hours in a given week. 9 reasons, the District Court properly dismissed the FLSA and NYLL 10 11 To plead a plausible FLSA overtime claim, plaintiffs For these overtime claims. Because we hold that the Plaintiffs failed to plead 12 sufficient facts to make it plausible that they worked 13 uncompensated hours in excess of 40 in a given week, we need not 14 decide whether the District Court s other bases for dismissal 15 were proper. 16 amended pleadings, we note that Plaintiffs actual and direct 17 employer is an essential element of notice pleading under these 18 circumstances. 19 dates of employment are necessary to state a plausible claim for 20 relief consistent with this decision and Lundy is a case- 21 specific inquiry for the trial court. Iqbal, 556 U.S. at 679. 22 As the District Court noted, however, generalized allegations 23 that may prove false at trial are not necessarily the basis for Nonetheless, because we will remand this claim for What aspects of Plaintiffs position, pay, or 19 1 dismissal at the pleadings stage. See Nakahata I, 2011 WL 2 321186, at *4 n.11. 3 While Plaintiffs overtime claims fail for the reasons 4 discussed above, their allegations can also be read to state a 5 gap-time claim. 6 has not worked 40 hours in a given week but seeks recovery of 7 unpaid time worked, or in which an employee has worked over 40 8 hours in a given week but seeks recovery for unpaid work under 9 40 hours. Lundy, 711 F.3d at 115. 10 Gap-time claims are those in which an employee As discussed in Lundy, the FLSA does not provide a cause of 11 action for unpaid gap time. Id. at 116 17. 12 requires payment of minimum wages and overtime wages only, see 13 29 U.S.C. §§ 201 19 (2006); therefore, the FLSA is unavailing 14 where wages do not fall below the statutory minimum and hours do 15 not rise above the overtime threshold. Lundy, 711 F.3d at 115. 16 The FLSA is unavailing even when an employee works over 40 hours 17 per week and claims gap-time wages for those hours worked under 18 40 per week, unless the wages fall below the minimum threshold. 19 This is because the statutory language simply does not 20 contemplate a claim for wages other than minimum or overtime 21 wages. Id. at 116 17. 22 Court s dismissal with prejudice of any gap-time claims made 23 pursuant to the FLSA. The FLSA statute For this reason, we affirm the District 20 1 Plaintiffs may, however, have a gap-time claim pursuant to 2 the NYLL. 3 claim would be consistent with the language of NYLL § 663(1), 4 which states that [i]f any employee is paid by his or her 5 employer less than the wage to which he or she is entitled . . . 6 he or she shall recover in a civil action the amount of any such 7 underpayments . . . . N.Y. Lab. Law § 663(1) (McKinney Supp. 8 2012), as amended by Wage Theft Prevention Act, ch. 564, § 16, 9 2010 N.Y. Sess. Laws 1446, 1457 (McKinney); Lundy, 711 F.3d at Lundy acknowledged, without deciding, that a gap-time 10 118. 11 District Court had acknowledged the possibility of such a claim, 12 it inconsistently dismissed all of the NYLL claims with 13 prejudice. Lundy, 711 F.3d at 118. 14 Lundy remanded the NYLL gap-time claim because, while the In this case, the District Court dismissed the gap-time 15 claims on the same basis as the overtime claims without 16 acknowledging the separate standard for a gap-time claim. 17 Unlike an overtime claim, a gap-time claim requires no predicate 18 showing of minimum hours worked; rather, an allegation of hours 19 worked without compensation may give rise to a gap-time claim. 20 Nonetheless, in the first instance it is for the trial court to 21 decide whether the allegations in the complaints are plausible. 22 Because the District Court did not consider the NYLL gap-time 23 claims separately from the overtime claims, and because 24 Plaintiffs will have an opportunity to amend their pleadings, we 21 1 remand the NYLL gap-time claims to the District Court to 2 consider in light of any amended pleadings. 3 4 5 III In addition to their FLSA and NYLL claims, Plaintiffs 6 allege nine common law claims.11 7 the common law clams with prejudice on the grounds that they 8 were preempted by collective bargaining agreements and on the 9 basis of pleading deficiencies unique to each claim.12 10 11 The District Court dismissed We address these arguments in turn. The District Court dismissed the common law claims as 12 preempted by applicable collective bargaining agreements 13 ( CBAs ) and § 301 of the Labor Management Relations Act 14 ( LMRA ), 29 U.S.C. § 185 (2006). Nakahata I, 2011 WL 321186, at 15 *2, *6. 16 rather, the Defendants attached the CBAs, or relevant portions 17 thereof, to their motions to dismiss. No CBAs were pled or attached to the complaints; 11 Plaintiffs allege (1) breach of an implied oral contract, (2) breach of an express oral contract, (3) breach of an implied covenant of good faith and fair dealing, (4) quantum meruit, (5) unjust enrichment/restitution, (6) fraud, (7) negligent misrepresentation, (8) conversion, and (9) estoppel. Nakahata I, 2011 WL 321186, at *1 n.3. 12 The parties also addressed FLSA preemption of the common law claims in their briefs; however, FLSA preemption was only given cursory treatment in the District Court s opinion and was not essential to the disposition. Therefore, we do not address FLSA preemption. 22 1 We do not consider matters outside the pleadings in 2 deciding a motion to dismiss for failure to state a claim. 3 Global Network Commc ns, Inc. v. City of New York, 458 F.3d 150, 4 154-55 (2d Cir. 2006). 5 pleadings is offered and not excluded by the trial court, the 6 motion to dismiss should be converted to a motion for summary 7 judgment. Fed. R. Civ. P. 12(d) ( If, on a motion under Rule 8 12(b)(6) or 12(c), matters outside the pleadings are presented 9 to and not excluded by the court, the motion must be treated as Rather, where matter outside the 10 one for summary judgment under Rule 56. ). 11 word shall, the conversion of a Rule 12(b)(6) motion into one 12 for summary judgment under Rule 56 when the court considers 13 matters outside the pleadings is strictly enforce[d] and 14 mandatory. Global Network Commc ns, 458 F.3d at 155 (citations 15 omitted) (internal quotation marks omitted). 16 at issue here were submitted with Defendants motions to 17 dismiss, and not excluded from consideration, the District Court 18 could have decided these issues pursuant to the summary judgment 19 standard of Rule 56, but it did not. 20 dismissal on the basis of LMRA preemption pursuant to Rule 21 12(b)(6) because such dismissal was premised on matter outside 22 of the pleadings, and was, therefore, inappropriate. Id. 23 24 As indicated by the Because the CBAs We cannot affirm the Nor do we agree with the District Court that Plaintiffs were responsible for pleading the CBAs in the complaints. 23 The 1 plaintiff is master of the complaint and may assert state law 2 causes of action that are independent of the CBA. See 3 Caterpillar Inc. v. Williams, 482 U.S. 386, 394 95 (1987). 4 is a defendant s responsibility to raise preemption by the CBA 5 as a defense, but, as discussed above, a motion addressed to the 6 adequacy of the pleadings is not necessarily the proper place 7 for preemption to be decided. Cf. Drake v. Lab. Corp. of Am. 8 Holdings, 458 F.3d 48, 66 (2d Cir. 2006) ( For those claims for 9 which preemption cannot be easily determined from the pleadings, It 10 our standard of review requires us to affirm the district 11 court s decision to deny the defendant-appellants motion to 12 dismiss, with the understanding that the claims may ultimately 13 prove to be preempted at a later stage of the litigation. ) 14 (emphasis added) (citation omitted) (internal quotation marks 15 omitted).13 13 The District Court cited I. Meyer Pincus & Assocs. v. Oppenheimer & Co., 936 F.2d 759 (2d Cir. 1991), for the proposition that the CBAs should be considered because they are integral to the issues raised in the complaint. Nakahata I, 2011 WL 321186, at *1 n.5. In Pincus, we held that where the plaintiff s claims were grounded solely in the language of a prospectus, the prospectus was integral to the complaint and would be considered in deciding a motion to dismiss despite not having been attached to the complaint. Pincus, 936 F.2d at 762. To do otherwise would have create[d] a rule permitting a plaintiff to evade a properly argued motion to dismiss simply because plaintiff has chosen not to attach the prospectus to the complaint or to incorporate it by reference. Id. Pincus, however, is distinguishable from this case. Unlike the complaint in Pincus, the complaints currently before us do not ground their claims in the CBAs. Nor, is it Plaintiffs 24 1 The District Court also identified deficiencies unique to 2 each common law claim. 3 corrected through amended pleading. 4 claims for breach of express and implied oral contracts, quantum 5 meruit, and unjust enrichment for reconsideration in light of 6 any amended pleading. 7 claims relied on the existence of a collective bargaining 8 agreement, which was not included with the pleadings and could 9 not be considered on a motion to dismiss. Some of the deficiencies may be We remand Plaintiffs The District Court s dismissal of those The claim for breach 10 of an implied covenant of good faith and fair dealing was 11 properly dismissed insofar as it duplicates the breach of 12 contract claims, see Harris v. Provident Life and Accident Ins. 13 Co., 310 F.3d 73, 80 (2d Cir. 2002); however, if Plaintiffs can 14 state such a claim on a basis independent of the breach of 15 contract claims, they may do so in the amended pleading. 16 Plaintiffs other common law claims are unavailing on the 17 facts of this case, and the dismissal with prejudice is 18 affirmed. 19 prejudice of the fraud and negligent misrepresentation claims 20 premised on the mailing of paychecks for the same reasons 21 discussed below regarding the RICO claims. We affirm the District Court s dismissal with Dismissal of the responsibility to plead the CBAs. In short, the CBAs are not integral to the complaint in the same way that the prospectus in Pincus was integral; rather, the CBAs have been raised as an affirmative defense and can properly be considered on a motion for summary judgment. 25 1 conversion claim with prejudice is affirmed because Plaintiffs 2 never had ownership, possession, or control of the wages in 3 question prior to the alleged conversion. See ESI, Inc. v. 4 Coastal Power Prod. Co., 995 F. Supp. 419, 433 (S.D.N.Y. 1998) 5 (recognizing that New York law requires prior ownership, 6 possession, or control to assert a claim for conversion). 7 Regarding estoppel, Plaintiffs assert that Defendants should be 8 estopped from asserting a statute of limitations defense. 9 not entirely clear whether such a claim may be made in the 10 complaint or must be asserted in response to a statute of 11 limitations defense under New York law,14 but we need not resolve 12 this issue. 13 response to a statute of limitations defense on remand; 14 therefore, they have suffered no prejudice in this regard, and 15 the dismissal was harmless error if error at all. 16 It is The Plaintiffs may raise equitable estoppel in Therefore, the District Court s dismissal of the common law 17 claims with prejudice is affirmed in part and vacated in part. 18 Those claims that Plaintiffs may replead are remanded to the 19 District Court. 14 Compare Tierney v. Omnicom Grp. Inc., No. 06 Civ. 14302, 2007 WL 2012412, at *10 (S.D.N.Y. July 11, 2007) (dismissing a claim for estoppel because the court understood estoppel to be an affirmative defense not a cause of action), with Forman v. Guardian Life Ins. Co. of Am., 901 N.Y.S.2d 906 (Table), 2009 WL 3790200, at *5 (N.Y. Sup. Ct. Sept. 25, 2009) (recognizing an equitable estoppel claim but relying on New York Appellate Division cases that discuss equitable estoppel as an affirmative defense). 26 1 IV 2 In addition to the claims for unpaid wages, Plaintiffs 3 allege that the Defendants committed mail fraud in violation of 4 RICO. 5 the U.S. mail, misleadingly purported to pay Plaintiffs for all 6 hours worked. 7 complete paychecks concealed a scheme by Defendants to 8 undercompensate the Plaintiffs. Plaintiffs allege that their paychecks, delivered through Plaintiffs further allege that the purportedly 9 RICO makes it unlawful for any person employed by or 10 associated with any enterprise . . . to conduct or participate, 11 directly or indirectly, in the conduct of such enterprise s 12 affairs through a pattern of racketeering activity . . . . 18 13 U.S.C. § 1962(c) (2006); First Capital Asset Mgmt., Inc. v. 14 Satinwood, Inc., 385 F.3d 159, 173 (2d Cir. 2004). 15 pursuant to 18 U.S.C. § 1341, is among the activities defined as 16 racketeering. Sedima, S.P.R.L. v. Imrex Co., 473 U.S. 479, 482 17 n.3 (1985) (quoting 18 U.S.C. § 1961(1) (1982 ed., Supp. III)). 18 Mail fraud, The District Court dismissed the RICO claims because the 19 paychecks did not perpetuate a fraud; rather, they disclosed any 20 alleged underpayment. Nakahata I, 2011 WL 321186, at *5. 21 endorsed this reasoning, holding that the mailing of pay stubs 22 cannot further the fraudulent scheme because the pay stubs would 23 have revealed (not concealed) that Plaintiffs were not being 24 paid for all of their alleged compensable overtime. Lundy, 711 27 Lundy 1 F.3d at 119. 2 RICO claims, and, because the claims cannot be pled on these 3 facts, they were properly dismissed with prejudice. Thus, the District Court properly dismissed the 4 5 V 6 Finally, Plaintiffs challenge the District Court s 7 conclusion that there is no basis for a collective or class 8 action and request that the case be remanded to a new judge. 9 Neither argument has merit. First, the District Court dismissed 10 the Megginson, Alamu, and Yarus Plaintiffs motions to certify 11 the collective and class actions as moot following dismissal of 12 the complaints in their entirety, which was not error. Nakahata 13 I, 2011 WL 321186, at *7. 14 their motions for certification on remand, so there was no 15 prejudice. 16 impartiality on the part of the District Court, and we find no 17 reason to believe that the District Court will be unable to 18 effectuate the remand order; therefore, the request for remand 19 to a new judge is denied. Cf. Shcherbakovskiy v. Da Capo Al 20 Fine, Ltd., 490 F.3d 130, 142 (2d Cir. 2007) (reassigning a case 21 on remand where the trial judge rendered a visceral judgment on 22 appellant s personal credibility, namely that his denial of 23 control was nonsense, drivel, a fraud, and a lie ). Furthermore, Plaintiffs may renew Second, Plaintiffs have failed to show any lack of 24 28 1 2 CONCLUSION Consistent with the foregoing opinion, the District Court s 3 dismissal with prejudice of the FLSA gap-time, conversion, 4 estoppel, fraud, negligent misrepresentation, and RICO claims is 5 AFFIRMED. 6 gap-time claims, the breach of express and implied oral contract 7 claims, the breach of an implied covenant of good faith and fair 8 dealing claims, the quantum meruit claims, and the unjust 9 enrichment claims for amended pleading. We REMAND the FLSA and NYLL overtime claims, the NYLL Therefore, we VACATE 10 the order terminating the case and REMAND for further 11 proceedings consistent with this opinion. 29
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