PEREZ v. A.C.E. RESTAURANT GROUP, INC. et al, No. 1:2015cv07149 - Document 57 (D.N.J. 2017)
Court Description: OPINION. Signed by Judge Joseph H. Rodriguez on 6/12/2017. (dmr)
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PEREZ v. A.C.E. RESTAURANT GROUP, INC. et al Doc. 57 Case 1:15-cv-07149-JHR-AMD Document 57 Filed 06/12/17 Page 1 of 15 PageID: 660 UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW J ERSEY ALEXANDER ACOSTA, Secretary of Labor, United States Departm ent of Labor : Hon. J oseph H. Rodriguez : Plaintiff, : v. : A.C.E. RESTAURANT GROUP, INC., A.C.E. RESTAURANT GROUP OF NEW YORK, LLC et al., Civil Action No. 15-7149 Op in io n : : Defendants. : This m atter com es before the Court on Motion to Dism iss [Dkt. No. 15] of Defendants A.C.E. Restaurant Group, Inc., A.C.E. Restaurant Group Of New York, LLC et al., (collectively “Defendants”), pursuant to Federal Rule of Civil Procedure 12(b)(6). The Court has considered the written subm issions of the parties and the argum ents advanced at the hearing on Septem ber 27, 20 16, at which tim e Thom as E. Perez was the Secretary of Labor for the United States Departm ent of Labor.1 For the reasons stated on the record that day and for those that follow, Defendants’ m otion to dism iss is denied. I. Backgro u n d The Secretary of Labor for the United States Departm ent of Labor brings this 1 Pursuant to Fed. R. Civ. P. 25(d), Secretary of Labor Alexander Acosta has been substituted for Thom as E. Perez. 1 Dockets.Justia.com Case 1:15-cv-07149-JHR-AMD Document 57 Filed 06/12/17 Page 2 of 15 PageID: 661 action against several Defendants. Defendants A.C.E. Restaurant Group, Inc. and A.C.E. Restaurant Group of New York, LLC m anage, own, and operate seventeen restaurants in New J ersey and Long Island, New York. See Com pl. ¶ 4. Each of the seventeen restaurants is a separately form ed legal entity; however, all of the restaurants are com m only known as operating under the nam e “Houlihans.” Id. All of the restaurants are nam ed as Defendants. In general term s, the three count Com plaint 2 alleges that Defendants engaged in various unlawful tip, payroll, and recordkeeping practices. Count I alleges violations of 28 U.S.C. §§ 6(a) and 15(a)(2) of the Fair Labor Standards Act (“FLSA”) for the failure to pay m in im um wages. Id. ¶¶ 114-116. Count II alleges that Defendants failed to pay overtim e wages, in violation of 28 U.S.C. §§ 7 and 15 (a)(2) of the FLSA. Id. ¶¶ 117-119. Finally, Count III alleges that Defendants violated the FLSA by failin g to m ake, keep, and preserve adequate and accurate records, in violation of 28 U.S.C. §§ 11(c) and 15(a)(5). Id. ¶¶ 120 -121. Defendants m ake two chief argum ents in support of dism issal: 1) that the Com plaint is factually deficient and fails to m eet the pleading standards of Fed. R. Civ. P. 8 and, 2) that the Secretary is precluded, under the doctrines of res judicata and collateral estoppel, from “re-litigating” these claim s in light of the New J ersey Departm ent of Labor’s Orders of “no violation .” For the reasons that follow, the Court disagrees and will deny Defendants’ m otion to dism iss. 2 The Com plaint was am ended on J anuary 11, 20 16 and the present m otion relates to the First Am ended Com plaint. 2 Case 1:15-cv-07149-JHR-AMD Document 57 Filed 06/12/17 Page 3 of 15 PageID: 662 II. Stan d ard o f Re vie w Federal Rule of Civil Procedure 12(b)(6) allows a party to m ove for dism issal of a claim based on “failure to state a claim upon which relief can be granted.” Fed. R. Civ. P. 12(b)(6). A com plaint should be dism issed pursuant to Rule 12(b)(6) if the alleged facts, taken as true, fail to state a claim . Fed. R. Civ. P. 12(b)(6). When deciding a m otion to dism iss pursuant to Rule 12(b)(6), ordinarily only the allegations in the com plaint, m atters of public record, orders, and exhibits attached to the com plaint, are taken into consideration. 1 See Chester County Interm ediate Unit v. Pa. Blue Shield, 8 96 F.2d 8 0 8, 8 12 (3d Cir. 1990 ). It is not necessary for the plaintiff to plead evidence. Bogosian v. Gulf Oil Corp., 561 F.2d 434, 446 (3d Cir. 1977). The question before the Court is not whether the plaintiff will ultim ately prevail. Watson v. Abington Twp., 478 F.3d 144, 150 (20 0 7). Instead, the Court sim ply asks whether the plaintiff has articulated “enough facts to state a claim to relief that is plausible on its face.” Bell Atl. Corp. v. Twom bly, 550 U.S. 544, 570 (20 0 7). “A claim has facial plausibility 2 when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the m isconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (20 0 9) (citing Twom bly, 550 1“Although a district court m ay not consider m atters extraneous to the pleadings, a docum ent integral to or explicitly relied upon in the com plaint m ay be considered without converting the m otion to dism iss into one for summ ary judgm ent.” U.S. Express Lines, Ltd. v. Higgins, 281 F.3d 383, 388 (3d Cir. 20 0 2) (internal quotation m arks and citations om itted) (em phasis deleted). Accord Lum v. Bank of Am ., 361 F.3d 217, 221 n.3 (3d Cir. 20 0 4) (citations om itted). 2 This plausibility standard requires more than a m ere possibility that unlawful conduct has occurred. “When a com plaint pleads facts that are ‘m erely consistent with’ a defendant’s liability, it ‘stops short of the line between possibility and plausibility of ‘entitlem ent to relief.’’” Id. 3 Case 1:15-cv-07149-JHR-AMD Document 57 Filed 06/12/17 Page 4 of 15 PageID: 663 U.S. at 556). “Where there are well-pleaded factual allegations, a court should assum e their veracity and then determ ine whether they plausibly give rise to an entitlem ent to relief.” Iqbal, 556 U.S. at 679. The Court need not accept “‘unsupported conclusions and unwarranted inferences,’” Baraka v. McGreevey, 481 F.3d 187, 195 (3d Cir. 20 0 7) (citation om itted), however, and “[l]egal conclusions m ade in the guise of factual allegations . . . are given no presum ption of truthfulness.” Wyeth v. Ranbaxy Labs., Ltd., 448 F. Supp. 2d 60 7, 60 9 (D.N.J . 20 0 6) (citing Papasan v. Allain, 478 U.S. 265, 286 (1986)); see also Kanter v. Barella, 489 F.3d 170 , 177 (3d Cir. 20 0 7) (quoting Evancho v. Fisher, 423 F.3d 347, 351 (3d Cir. 20 0 5) (“[A] court need not credit either ‘bald assertions’ or ‘legal conclusions’ in a com plaint when deciding a m otion to dism iss.”)). Accord Iqbal, 556 U.S. at 678 -80 (finding that pleadings that are no m ore than conclusions are not entitled to the assum ption of truth). Further, although “detailed factual allegations” are not necessary, “a plaintiff’s obligation to provide the ‘grounds’ of his ‘entitlem ent to relief’ requires m ore than labels and con clusions, an d a form ulaic recitation of a cause of action’s elem ents will not do.” Twom bly, 550 U.S. at 555 (internal citations om itted). See also Iqbal, 556 U.S. at 678 (“Threadbare recitals of the elem ents of a cause of action, supported by m ere conclusory statem ents, do not suffice.”). Thus, a m otion to dism iss should be granted unless the plaintiff’s factual allegations are “enough to raise a right to relief above the speculative level on the assum ption that all of the com plaint’s allegations are true (even if doubtful in fact).” 4 Case 1:15-cv-07149-JHR-AMD Document 57 Filed 06/12/17 Page 5 of 15 PageID: 664 Twom bly, 550 U.S. at 556 (internal citations om itted). “[W]here the well-pleaded facts do not perm it the court to infer m ore than the m ere possibility of m isconduct, the com plaint has alleged-but it has not ‘shown’-‘that the pleader is entitled to relief.’” Iqbal, 556 U.S. at 679 (quoting Fed. R. Civ. P. 8(a)(2)). III. An alys is The Com plaint sufficiently sets forth claim s of m inim um wage, overtim e, and record keeping violations, pursuant to Rules 8 and 12 (b)(6). At the pleading stage, the Secretary is not required to m arshall all proofs in support of his claim . Rather, the burden on a m otion to dism iss is one that establishes a plausible claim for relief. That burden is m et. A. Claim s for Failure to Pay Minim um and Overtim e Wages The FLSA expressly contem plates claim s for m inim um wage violations and for failure to pay overtim e wages. “The FLSA establishes federal m in im um -wage, m axim um -hour, and overtim e guarantees that cannot be m odified by contract.” Genesis Healthcare Corp. v. Sym czyk, – – – U.S. – – – – , 133 S.Ct. 1523, 1527, 185 L.Ed.2d 636 (20 13). In order to recover under the FLSA, a plaintiff m ust allege either the failure to pay the m inim um wage or a failure to pay for overtim e. 29 U.S.C. §§ 20 1-19. A cognizable claim for overtim e m ust “sufficiently allege 40 hours of work in a given workweek as well as som e uncom pensated tim e in excess of the 40 hours.” Lundy v. Catholic Health System of Long Island Inc., 711 F.3d 10 6, 114 (2d Cir. 20 13) (citing 29 U.S.C. § 20 7(a)(1) (requiring that, “for a workweek longer than forty hours,” an em ployee who works “in excess of” forty hours shall be com pensated tim e and a half for 5 Case 1:15-cv-07149-JHR-AMD Document 57 Filed 06/12/17 Page 6 of 15 PageID: 665 the excess hours)). The Secretary’s Com plaint satisfies this pleadin g standard by alleging exam ples of dates and tim es when em ployees worked in excess of forty hours in a work week without the benefit of overtim e com pensation. Com pl. ¶¶ 97-98. The sam e can be said as to the nature of the pleadings with respect to other m inim um wage violations. See Com pl., ¶¶ 69-91; 73-78; 99-10 8. The Com plaint sets forth violations of § 203 (m ), which provides: “Wage” paid to any em ployee includes the reasonable cost, as determ ined by the Adm inistrator, to the em ployer of furnishing such em ployee with board, lodging, or other facilities, if such board, lodging, or other facilities are custom arily furnished by such em ployer to his em ployees: Provided, That the cost of board, lodging, or other facilities shall not be included as a part of the wage paid to any em ployee to the extent it is excluded therefrom under the term s of a bona fide collective-bargaining agreem ent applicable to the particular em ployee: Provided further, That the Secretary is authorized to determ ine the fair value of such board, lodging, or other facilities for defin ed classes of em ployees and in defin ed areas, based on average cost to the em ployer or to groups of em ployers sim ilarly situated, or average value to groups of em ployees, or other appropriate m easures of fair value. Such evaluations, where applicable and pertinent, shall be used in lieu of actual m easure of cost in determ ining the wage paid to any em ployee. In determ in ing the wage an em ployer is required to pay a tipped em ployee, the am ount paid such em ployee by the em ployee's em ployer shall be an am ount equal to-(1) the cash wage paid such em ployee which for purposes of such determ ination shall be not less than the cash wage required to be paid such an em ployee on August 20 , 1996; and (2) an additional am ount on account of the tips received by such em ployee which am ount is equal to the difference between the wage specified in paragraph (1) and the wage in effect under section 20 6(a)(1) of this title. The additional am ount on account of tips m ay not exceed the value of the tips actually received by an em ployee. The preceding 2 senten ces shall not apply with respect to any tipped em ployee unless such em ployee has been inform ed by the em ployer of the provisions of this subsection, and all tips received by such em ployee have been retained by the 6 Case 1:15-cv-07149-JHR-AMD Document 57 Filed 06/12/17 Page 7 of 15 PageID: 666 em ployee, except that this subsection shall not be construed to prohibit the pooling of tips am ong em ployees who custom arily and regularly receive tips. 29 U.S.C.A. § 20 3 (West). An em ployee is “engaged” in a particular occupation only to the extent that she perform s duties consistent with that occupation; job title alone does not suffice. See 29 C.F.R. § 541.2. Here, the Com plaint alleges that certain em ployees were included in the tip pool even though they perform ed work not eligible for “tips.” For exam ple, the Secretary alleges that tip ineligible em ployees working as janitors, or food expeditures, were included in the tip pool even though they perform ed services including “preopening custodial work . . . included vacuum ing, polishing furniture, m aintain ing grounds, and deep-cleaning restroom s.” Com pl. ¶¶ 8 1-87. Em ployers of workers engaged in “tipped” occupations m ay pay those “tipped em ployees” less than m inim um wage and realize a credit for the “tips” those workers receive from custom ers, up to the am ount that causes each worker to realize a “m inim um wage.” 29 U.S.C. § 20 3(m ); Fast v. Applebee's Int'l, Inc., 638 F.3d 8 72, 8 76 (8 th Cir. 20 11). The am ount of the tip credit is the difference between the worker’s wage per hour and the m inim um wage pursuant to 29 U.S.C. § 20 6 of 7.25 per hour. Fast, 638 F.3d at 8 74. Relevant here, an em ployer earns a tip credit only on the wages of workers who qualify as “tipped em ployees,” and, inter alia, only where the em ployer: (2) inform s the tipped em ployees of the provisions of Subsection 3(m ). 29 U.S.C. § 20 3(m ); Kilgore v. Outback Steakhouse of Fla., Inc., 160 F.3d 294, 298 (6th Cir. 1998); Martin v. Tango’s rest., Inc., 969 F.2d 1319, 1323 (1st Cir. 1992) (“Congress has in Section 3 (m ) expressly 7 Case 1:15-cv-07149-JHR-AMD Document 57 Filed 06/12/17 Page 8 of 15 PageID: 667 required notice as a condition of the tip credit and the courts have enforced that requirem ent.”)). 29 C.F.R. § 531.56(e). The Com plaint sets forth select descriptions of operational violations, including an allegation that Defendants failed to properly notify its em ployees of the tip credit provisions as required by 29 U.S.C. § 20 3 (m ). Id at ¶¶ 70 -71. Here, the Secretary sufficiently alleges that notice was lacking pursuant 29 U.S.C.A. § 20 3.3. In addition, the Secretary alleges that the Defendants failed to distribute the entirety of the tip pool to the tipped workers and distributed tips to workers who perform ed services outside the definition of a “tipped em ployee” in violation. § 20 3 (m ). See Com pl. ¶¶ 73-78 .4 The Com plaint sets forth exam ples an d allegations dem onstrating that the Defendants failed to regularly distribute the entirety of the tip pool to the tipped em ployees. Id. 3 Defendants contest the Secretary’s claim that claim that notice was lacking and argue that each restaurant had a posted detailing the provisions of 3 (m ). Such an attack sounds in sum m ary judgm ent. Moreover, there are several indicia of notice and the presence of a poster, alone, “is not sufficient notice to em ployees of the provisions of 3 (m ).” Opinion Letter Fair Labor Standards Act (FLSA), 1997 WL 95830 0 , *1 (J an. 21, 1997). The notice m ust convey: Pursuant to section 3(m ), an em ployer is not eligible to take the tip credit unless it has inform ed its tipped em ployees in advance of the em ployer's use of the tip credit of the provisions of section 3(m ) of the Act, i.e.: The am ount of the cash wage that is to be paid to the tipped em ployee by the em ployer; the additional am ount by which the wages of the tipped em ployee are increased on account of the tip credit claim ed by the em ployer, which am ount m ay not exceed the value of the tips actually received by the em ployee; that all tips received by the tipped em ployee m ust be retained by the em ployee except for a valid tip pooling arran gem ent lim ited to em ployees who custom arily and regularly receive tips; and that the tip credit shall not apply to any em ployee who has not been inform ed of these requirem ents in this section. 29 C.F.R. § 531.59; See also Driver v. Appleillinois, LLC, 917 F. Supp. 2d 793, 80 1 (N.D. Ill. 20 13) (“Before the USDOL finalized 29 C.F.R. § 531.59(b), opinions differed to som e extent about what was required to “inform ” em ployees about the provisions of § 20 3(m ).”) 4 Any em ployee who perform s “dual jobs” and does work which qualifies as tipped and non-tipped m ay only receive tips, as a “tipped em ployee,” for the tim e spent perform in g the duties of the tip eligible position . Id.; Fast, 638 F.3d at 876. It follows that as to “dual job” em ployees, the em ployer m ust pay the em ployee full m inim um wage for the tim e that em ployee works in the non-tipped position . 29 C.F.R. § 531.56(e). 8 Case 1:15-cv-07149-JHR-AMD Document 57 Filed 06/12/17 Page 9 of 15 PageID: 668 Defendants are also alleged to have kept a total balance of withheld tip pool m onies totaling $ 40 ,0 0 0 .0 0 as of May 20 14. Id. ¶ 78. Thus, the Com plaint sets forth plausible violations of 20 3 (m ). B. Record Keeping The Secretary’s Com plaint adequately sets forth claim s of failure to keep records with respect to em ployee m eals and off the clock workers. Section 211 (c) of the FLSA requires an em ployer to “m ake, keep and preserve such records of the persons em ployed by him and of the wages, hours, and other conditions an d practices of em ploym ent m aintain ed by him , and shall preserve such records for such periods of tim e.” 29 U.S.C. § 211 (c). Wage deductions for m eals m ust be recorded to include the cost of the m eal. 29 C.F.R. §516.27; Ron Chen v. Century Buffet & Rest., Civ. No. 0 9-1687 20 12 WL 113539, *5 (D.N.J . J an. 12, 20 12). In addition, the am ount per hour which the em ployer takes as a tip credit shall be reported to the em ployee in writing each tim e it is changed from the am ount per hour taken in the preceding week. 29 C.F.R. § 516.28 , Paredes v. Paulison Car Wash & Detailing, Inc., No. 14-CV-0 3957, 20 16 WL 7130 914, at *4 (D.N.J . Dec. 7, 20 16). The Secretary puts forth sufficient record keeping violations to raise the claim s beyond the speculative level. Sufficient facts are plead to support plausible record keeping violations. See Com pl. ¶¶ 10 9-113. As to the m inim um wage, overtim e, and record keeping claim s, the Secretary adm its that the Com plaint fails to set out every instance of infraction and provides only a few exam ples related to specific restaurant cites to highlight the nature of the alleged violations. The Com plaint, however, alleges a com m on m anagem ent team exercised 9 Case 1:15-cv-07149-JHR-AMD Document 57 Filed 06/12/17 Page 10 of 15 PageID: 669 control and operation of the individual defendant restaurants. Com pl. ¶¶ 4-9. In that capacity, the m anagem ent team , lead by Defendant Runstead, em ployed the executive m anagem ent team at all of the restaurants in New York and New J ersey. Id. ¶ 5. Defendants A.C.E. Restaurant Group of Inc. and A.C.E. Restaurant Group of New York, LLC control all of the day to day operations at the restaurants in New J ersey and New York. Against this backdrop, the Com plaint sufficiently details exam ples of violations, which the Secretary adm itted during oral argum ent were representative of the illegal conduct, but not an exhaustive list. The Secretary sufficiently alleges that the Defendants used the pooled tips to pay the wages of non-tipped em ployees. Id. at ¶¶ 8 191. Notably, the Secretary’s exam ples do not link each alleged exam ple of a violation to an individual restaurant, leaving the Defendants’ without m eans, at this stage, to m uster a specific defense. Defendants’ dem and that the Com plaint include additional inform ation is understandable. Com prehensive pleadings, however, are not required at this stage of the case. See Davis, 795 F.3d 243 (quoting Lundy 711 F.3d 10 6 (2d Cir. 20 13) (stating plaintiffs need not “identify the exact tim e and dates that she worked overtim e.”). The Court finds that Defendants’ argum ents sound in sum m ary judgm ent, because they m ake challenge facts and invite the Court to consider docum ents outside of the Com plaint. See, e.g., Abigail Alliance for Better Access to Developm ental Drugs v. von Eschenbach, 495 F.3d 695, 723 (D.C.Cir. 20 0 7) (observing that “a factual question ... is not properly resolved at the m otion-to-dism iss stage when all reasonable inferen ces 10 Case 1:15-cv-07149-JHR-AMD Document 57 Filed 06/12/17 Page 11 of 15 PageID: 670 m ust be drawn to the plaintiff's benefit”). Taking the facts as plead in the Com plaint as true, the Secretary sets forth plausible claim s of violations of the FLSA. Defendants’ m otion is den ied on this basis. C. Res J udicata Defendants further allege that dism issal is warranted because the Secretary is precluded, under the doctrines of res judicata and collateral estoppel, from “relitigating” these claim s in light of the NJ DOL’s Orders of “no violation.” The Court disagrees. Under the Full Faith and Credit Clause of the United States Constitution, “the judicial proceedings of a state court shall have the sam e full faith and credit within every court in the United States as they have by law or usage in the courts of the issuing state.” Param ount Aviation Corp. v. Agusta, 178 F.3d 132, 141 (3d Cir. 1999). The preclusive effect of a state court judgm ent in federal court is governed by the law of the rendering state. See 28 U.S.C. § 1738. Therefore, New J ersey law is applicable to the preclusive effect of the previous state court proceedings on the present claim . The doctrin e of claim preclusion, or res judicata, prohibits a plaintiff from relitigating the sam e claim again st the sam e parties, provided the claim s have previously been fairly litigated an d determ ined. First Union Nat'l Bank v. Penn Salem Marin a, Inc., 921 A.2d 417, 423 (N.J . 20 0 7) (em phasis added). Res judicata only serves to bar a claim when: (1) the judgm ent in the prior action m ust be valid, final, and on the m erits; (2) the parties in the later action m ust be iden tical to or in privity with those in the prior action; and (3) the claim in the later action m ust grow 11 Case 1:15-cv-07149-JHR-AMD Document 57 Filed 06/12/17 Page 12 of 15 PageID: 671 out of the sam e transaction or occurrence as the claim in the earlier one. Watkins v. Resorts Int'l Hotel and Casino, Inc., 124 N.J . 398, 412, 591 A.2d 592 (1991). The doctrin e of issue preclusion, or collateral estoppel, is a branch of the broader law of res judicata that bars re-litigation of any issue actually determ ined in a prior action between the sam e parties involving a different claim or cause of action. Sacharow, 8 26 A.2d 710 , 719 (N.J . 20 0 3). Sacharow v. The doctrine of collateral estoppel will bar subsequent re-litigation of an issue only when: (1) the issue to be precluded is identical to the issue decided in the prior proceeding; (2) the issue was actually litigated in the prior proceeding; (3) the court in the prior proceeding issued a final judgm ent on the m erits; (4) the determ in ation of the issue was essential to the prior judgm ent; and (5) the party against whom the doctrine is asserted was a party to or in privity with a party to the earlier proceeding. First Union Nat’l Bank, 921 A.2d at 424. A judgm ent is final for the purposes of issue preclusion when it is sufficiently firm to be accorded conclusive effect. Hills Developm ent Co. v. Bernards Tp. in Som erset County, 510 A.2d 621, 652 (N.J . 1986). To determ ine if the resolution was sufficiently firm to be given preclusive effect, the reviewing court m ust consider whether the parties were fully heard, whether a reasoned opinion was filed, an d whether that decision could have been, or actually was, appealed. Burlington Northern R. Co. v. Hyundai Merchant Marine Co., Ltd., 63 F.3d 1227, 1233 n.8 (3d Cir. 1995) (citing In re Brown, 951 F.2d 564, 569 (3d Cir. 1991)). The party seeking to invoke the doctrine of issue preclusion bears the burden of dem onstrating the firm ness of the prior adjudication, and reasonable doubts as to what was decided by a prior judgm ent should be resolved against using it as estoppel. Sweeney v. Sweeney, 966 12 Case 1:15-cv-07149-JHR-AMD Document 57 Filed 06/12/17 Page 13 of 15 PageID: 672 A.2d 54, 61 (N.J . Super. Ct. App. Div. 20 0 9) (citing Shtab v. Greate Bay Hotel & Casino, Inc., 173 F.Supp.2d 255, 261 (D.N.J . 20 0 1)) Here, Defen dants bear the burden of dem onstrating the applicability the defense of res judicata. See Fed. R. Civ. P. 8 (c); Davis v. United States Steel Supply, 688 F.2d 166 (3d Cir. 1982) (in banc), cert. denied, 460 U.S. 10 14, 10 3 S.Ct. 1256, 75 L.Ed.2d 48 4 (198 3). The record reflects that there was no litigation to inform the determ inations of the NJ DOL and that the Secretary was not a party to the proceedings involving the NJ DOL. The Exhibits purported to be a final determ ination by the NJ DOL are titled “field report” or “routine inspection”. See Def. Ex. A, D0 0 0 0 0 2, D0 0 0 0 0 4, D0 0 0 0 0 1. Given these circum stances, the Secretary could not advance any argum ent or appeal the determ ination. See Burlington Northern R. Co., 63 F.3d at 1233. In addition, the determ ination by the NJ DOL does not appear to be a final determ ination worthy of preclusive effect. The Court agrees with the Secretary that, pursuant to The New J ersey Wage and Hour Law, N.J . Stat. Ann. § 34:11-4.1, et seq. and § 34:11-56a et seq. and New J ersey Uniform Adm inistrative Procedure Rules, N.J . Adm in. Code §1:1-1.1, et seq., the judicial procedure through which a final order is produced was not m et. The NJ DOL cannot be said to have acted in a judicial capacity based on the record before the Court. “When an adm inistrative agency is acting in a judicial capacity and resolves disputed issues of fact properly before it which the parties have had an adequate opportunity to litigate, the courts have not hesitated to apply” the doctrine of claim preclusion. Univ. of Tenn. v. Elliott, 478 U.S. 797-98, 10 6 S.Ct. 3220 , 92 L.Ed.2d 635 (198 6).797– 98. “Accordingly ... when a state agency ‘acting in a judicial capacity ... 13 Case 1:15-cv-07149-JHR-AMD Document 57 Filed 06/12/17 Page 14 of 15 PageID: 673 resolves disputed issues of fact properly before it which the parties have had an adequate opportunity to litigate,’ federal courts m ust give the agency's factfinding the sam e preclusive effect to which it would be entitled in the State's courts.” Id. at 799 (quoting Utah Constr. & Mining Co., 384 U.S. 394, 422, 8 6 S.Ct. 1545, 16 L.Ed.2d 642 (1966)); Kiern an v. AAA Mech., Inc., No. CIV.A. 10 -4421 MLC, 20 12 WL 25230 40 , at *3 (D.N.J . J une 29, 20 12). Here, there is little indicia of a judicial proceeding and the Court finds that Defendants’ have not m et its burden of dem onstrating that res judicata applies. Moreover, there is no credible evidence, at this juncture, that the Secretary and its New J ersey Counterpart were in privity. 5 As a result, res judicata does not preclude the Secretary’s Com plaint in this case. Defendants’ Motion to Dism iss is denied on this basis. IV. Co n clu s io n For the reasons stated herein, and those set forth on the record during the hearing, Defendants’ m otion to dism iss is denied. An appropriate Order shall issue. 5 The Suprem e Court set forth several criteria for privity where non-party preclusion is appropriate: 1) the non party agrees to be bound by the determ ination of issues in an action between others; 2) a substantive legal relationship—i.e. traditional privity—exists that binds the nonparty; 3) the non party was “adequately represented by som eone with the sam e interests who [wa]s a party”; 4) the nonparty assum es control over the litigation in which the judgm ent is rendered; 5) the non party attem pts to brin g suit as the designated representative of som eone who was a party in the prior litigation ; and, 6) the non party falls under a special statutory schem e that “expressly foreclos[es] successive litigation by nonlitigants.” Taylor v. Sturgell, 128 S.Ct. 2161, 2173-74 (20 0 8); Nationwide Mut. Fire Ins. Co. v. George V. Ham ilton, Inc., 571 F.3d 299, 312– 13 (3d Cir. 20 0 9). Defendants fail to satisfy any of this criteria. 14 Case 1:15-cv-07149-JHR-AMD Document 57 Filed 06/12/17 Page 15 of 15 PageID: 674 Dated: J une 12, 20 17 / s/ J oseph H. Rodriguez HON. J OSEPH H. RODRIGUEZ, United States District J udge 15
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