Cortez v. Mar Multiservices LLC

1 WO [5] 6 IN THE UNITED STATES DISTRICT COURT 7 FOR THE DISTRICT OF ARIZONA [8] Y oana Lu na Cortez, ) No. CV-24-02335-PHX-SPL ) 9 ) 10 Plaintiff, ) ORDER vs. ) ) [11] ) Mar Multiservices LLC, et al., ) [12] ) ) 13 Defendants. ) 14 ) 15 Before the Court is Defendants JJJ Restaurants LLC, Arturo Rubio Cervantes, and 16 Guadalupe Rubio Cervantes’ Motion to Dismiss (Doc. 37) pursuant to Federal Rules of 17 Civil Procedure (“Rules”) 12(b)(1) and 12(b)(6); Plaintiff Yoana Cortez’s Response (Doc. 18 42); and Defendants JJJ Restaurants LLC, Arturo Rubio Cervantes, and Guadalupe Rubio 19 Cervantes’ Reply (Doc. 49). The Court now rules as follows.1 20 I. BACKGROUND 21 This case is a putative class action brought by Plaintiff Yoana Cortez under the Fair 22 Labor Standards Act (“FLSA”), 29 U.S.C. §§ 201 et seq. In her First Amended Complaint 23 (“FAC”), Plaintiff brings a single count for failure to pay overtime wages in violation of [24] 29 U.S.C. § 207 against nine corporate entities as well as Arturo Rubio Cervantes and his 25 spouse, Guadalupe Rubio Arroyo. (Doc. 31 ¶¶ 149–55). Plaintiff contends that the [26] 27 1 Because it would not assist in resolution of the instant issues, the Court finds the pending motion is suitable for decision without oral argument. See LRCiv. 7.2(f); Fed. R. [28] Civ. P. 78(b); Partridge v. Reich, 141 F.3d 920, 926 (9th Cir. 1998). 1 corporate Defendants “are each restaurants operating in Arizona under the name 2 ‘Filiberto’s Mexican Food.’ at any time within the three years from the filing of the original 3 Complaint through the present.” (Id. ¶ 87). Plaintiff alleges that “Defendants willfully 4 failed or refused to pay Plaintiff and the Collective Members the applicable overtime wage 5 for all hours worked in excess of 40 in a given work week throughout the duration of their 6 employment.” (Id. ¶ 151). 7 On January 2, 2025, the parties stipulated to the voluntary dismissal of Defendants 8 AAA Restaurant LLC, A.R. Restaurant LLC, ARC Restaurant LLC, T.R. Restaurant LLC, 9 and Tucson AR Restaurant LLC under Rule 41(a)(1)(ii). (Docs. 47, 52). Accordingly, the 10 only remaining Defendants are (1) Mar Multiservices LLC, (2) J.R. Restaurant LLC, (3) 11 J.R.R. Restaurant LLC, (4) JJJ Restaurants LLC, and the individual Defendants, (5) Arturo 12 Rubio Cervantes and (6) Guadalupe Rubio Arroyo. The three Defendants moving for 13 dismissal are JJJ Restaurants LLC, Arturo Rubio Cervantes, and Guadalupe Rubio 14 Cervantes. (Doc. 49 at 2). Defendants seek dismissal of JJJ Restaurants LLC because it 15 was never Plaintiff’s employer (Doc. 49 at 7), and they seek dismissal of the individual 16 Defendants, Arturo Rubio Cervantes and Guadalupe Rubio Arroyo, because they are not 17 “employers” within the meaning of the FLSA (id. at 5). 18 II. LEGAL STANDARDS 19 a. Rule 12(b)(1) 20 A Rule 12(b)(1) motion to dismiss challenges the court’s subject matter jurisdiction 21 to hear the claims at issue. See Fed. R. Civ. P. 12(b)(1). “Federal courts are courts of 22 limited jurisdiction,” and may only hear cases falling within that jurisdiction. Kokkonen v. 23 Guardian Life Ins. Co. of Am., 511 U.S. 375, 377 (1994). “Subject matter jurisdiction ‘can 24 never be forfeited or waived’ and federal courts have a ‘continuing independent obligation 25 to determine whether subject-matter jurisdiction exists.’” Leeson v. Transamerica 26 Disability Income Plan, 671 F.3d 969 , 975 n.12 (9th Cir. 2012) (quoting Arbaugh v. Y & 27 H Corp., 546 U.S. 500, 514 (2006)). 28 /// 1 b. Rule 12(b)(6) 2 To survive a motion to dismiss under Rule 12(b)(6), a complaint must contain “a 3 short and plain statement of the claim showing that the pleader is entitled to relief” so that 4 the defendant is given fair notice of the claim and the grounds upon which it rests. Bell Atl. 5 Corp. v. Twombly, 550 U.S. 544, 555 (2007) (quoting Fed. R. Civ. P. 8(a)(2)). A court may 6 dismiss a complaint for failure to state a claim under Rule 12(b)(6) for two reasons: (1) 7 lack of a cognizable legal theory, or (2) insufficient facts alleged under a cognizable legal 8 theory. Balistreri v. Pacifica Police Dep’t, 901 F.2d 696, 699 (9th Cir. 1990). When 9 deciding a motion to dismiss, all allegations of material fact in the complaint are taken as 10 true and construed in the light most favorable to the nonmoving party. Cousins v. Lockyer, [11] 568 F.3d 1063, 1067 (9th Cir. 2009). “While a complaint attacked by a Rule 12(b)(6) 12 motion to dismiss does not need detailed factual allegations, a plaintiff’s obligation to 13 provide the ‘grounds’ of his ‘entitle[ment] to relief’ requires more than labels and 14 conclusions, and a formulaic recitation of a cause of action’s elements will not do.” 15 Twombly, 550 U.S. at 545 (citations omitted). 16 III. DISCUSSION 17 a. Rule 12(b)(1) Challenge to Subject Matter Jurisdiction over JJJ 18 Restaurants LLC 19 As a preliminary matter, Defendants contend that Plaintiff lacks standing to bring 20 FLSA claims against entities that were never her employers. (Doc. 37 at 5). Under Article 21 III of the Constitution, federal courts have jurisdiction over a dispute only if it is a case or 22 controversy. See Cetacean Cmty. v. Bush, 386 F.3d 1169, 1174 (9th Cir. 2004). “To state 23 a case or controversy under Article III, a plaintiff must establish standing.” Arizona 24 Christian School Tuition Organization v. Winn, 563 U.S. 125, 133 (2011). “The 25 constitutional requirement of standing has three elements: (1) the plaintiff must have 26 suffered an injury-in-fact—that is, a concrete and particularized invasion of a legally 27 protected interest that is actual or imminent, not conjectural or hypothetical; (2) the injury 28 must be causally connected—that is, fairly traceable—to the challenged action of the 1 defendant and not the result of the independent action of a third party not before the court; 2 and (3) it must be likely and not merely speculative that the injury will be redressed by a 3 favorable decision by the court.” Catholic League for Religious and Civil Rights v. City 4 and County of San Francisco, 624 F.3d 1043, 1049 (9th Cir. 2010). “[A]t the pleading 5 stage, the plaintiff must ‘clearly . . . allege facts demonstrating’ each element” required to 6 establish standing. Spokeo, Inc. v. Robins, 578 U.S. 330, 338 (2016), as revised (May 24, 7 2016) (quoting Warth v. Seldin, 422 U.S. 490, 490 (1975)). 8 “Employees may seek redress in an FLSA action only from ‘employers.’” Perez v. 9 Wells Fargo & Co., No. C 14-0989 PJH, 2015 WL 1887354 , at *5 (N.D. Cal. Apr. 24, 10 2015) (citing 29 U.S.C. § 216 (b)). Where a Plaintiff has more than one employer under the 11 FLSA, all joint employers are responsible for compliance with the FLSA. See Ray v. L.A. 12 Cty. Dep’t of Pub. Soc. Servs., 52 F.4th 843 , 848 (9th Cir. 2022). Here, Plaintiff argues that 13 each Defendant was a joint employer of Plaintiff because “each acted directly in the interest 14 of the others in relation to Plaintiff[]” and “because they were not completely disassociated 15 with respect to the employment of Plaintiff.” (Doc. 42 at 13). In addition to the “joint 16 employer” argument, Plaintiff also argues that each Defendant can be considered a “single 17 integrated employer under the FLSA; however, Plaintiff cites only to non-binding, out-of18 Circuit cases to support this argument. (See id. at 10–13). The Court therefore focuses its 19 analysis on the Plaintiff’s “joint employer” argument. 20 To determine whether a given entity is a joint employer, courts apply the four 21 Bonnette factors to assess the “economic reality” of whether an employer-employee 22 relationship exists: “whether the alleged employer (1) had the power to hire and fire the 23 employees, (2) supervised and controlled employee work schedules or conditions of 24 employment, (3) determined the rate and method of payment, and (4) maintained 25 employment records.” Bonnette v. Cal. Health & Welfare Agency, 704 F.2d 1465 , 1470 26 (9th Cir. 1983), disapproved of on other grounds by Garcia v. San Antonio Metro. Transit 27 Auth., 469 U.S. 528 (1985); see also, e.g., Perez v. DNC Parks & Resorts at Sequoia, No. 28 1:19-cv-00484-DAD-SAB, 2020 U.S. Dist. LEXIS 134590 , at *13 (E.D. Cal. July 29, 1 2020) (applying the four factors). In addition to pleading facts in support of the Bonnette 2 factors, “a plaintiff seeking to hold multiple entities liable as joint employers must plead 3 specific facts that explain how the defendants are related and how the conduct underlying 4 the claims is attributable to each defendant.” Johnson v. Serenity Transportation, Inc., 141 5 F. Supp. 3d 974, 990 (N.D. Cal. 2015). 6 Defendants argue that here, Plaintiff’s FAC fails to “provide a single factual 7 allegation explaining [Plaintiff’s] relationship with JJJ Restaurant LLC,” as JJJ Restaurants 8 LLC never employed Plaintiff. (Doc. 49 at 9). However, given that Plaintiff seeks 9 conditional class certification of this matter, she argues that this District “frequently grants 10 conditional certification of FLSA classes against Defendants who separately incorporate 11 each location of their chain business where the named Plaintiff did not work for all 12 entities.” (Doc. 42 at 17). While this may be true, it does not abrogate Plaintiff’s burden to 13 establish Article III standing as to each employer. Plaintiff seems to focus on her theory 14 that each of the corporate Defendants constitute a single collective enterprise under the 15 control of the individual Defendants; however, this is irrelevant to the “economic reality” 16 test that the Ninth Circuit evaluates as to each defendant. See, e.g., Patel v. Wargo, 803 17 F.2d 632, 637 (11th Cir. 1986) (“[T]he enterprise analysis is different from the analysis of 18 who is liable under the FLSA . . . . Liability is based on the existence of an employer19 employee relationship.”). 20 The Court agrees with Defendants that Plaintiff has failed to allege facts showing 21 that an employer-employee relationship exists between Plaintiff and JJJ Restaurants LLC. 22 Plaintiff’s FAC makes the following bare allegations regarding JJJ Restaurants LLC: 23 Under the FLSA, Defendant JJJ Restaurants LLC is an employer. The FLSA defines “employer” as any person who 24 acts directly or indirectly in the interest of an employer in relation to an employee. At all relevant times, Defendant JJJ 25 Restaurants LLC had the authority to hire and fire employees, supervised and controlled work schedules or the conditions of 26 employment, determined the rate and method of payment, and maintained employment records in connection with Plaintiff’s 27 and/or the Collective Members’ employment with Defendants. As a person who acted in the interest of Defendants in relation 28 to Filiberto’s Mexican Food’s employees, Defendant JJJ Restaurants LLC is subject to liability under the FLSA. [1] 2 (Doc. 31 at 10). As Defendants point out, “Plaintiff alleges that JJJ Restaurants is ‘an 3 employer,’ but not her employer.” (Doc. 49 at 9). While JJJ Restaurants LLC may very 4 well be subject to liability under the FLSA, that does not mean that Plaintiff has established 5 standing to sue JJJ Restaurants LLC in this case. Beyond recitations of the Bonnette factors, 6 Plaintiff simply has not alleged any facts to support her contention that an employer7 employee relationship existed between her and JJJ Restaurants LLC. Accordingly, JJJ 8 Restaurants LLC will be dismissed without prejudice. 9 b. Rule 12(b)(6) Challenge as to Allegations Against Individual 10 Defendants 11 In the FAC, Plaintiff alleges that “Defendants Arturo Rubio Cervantes and 12 Guadalupe Rubio Arroyo had the authority to hire and fire employees, supervised and 13 controlled work schedules or the conditions of employment, determined the rate and 14 method of payment, and maintained employment records in connection with Plaintiff’s and 15 the Collective Members’ employment with Defendants,” and that they therefore are subject 16 to individual liability under the FLSA. (Doc. 31 at 13). However, the Court agrees with 17 Defendants that “[t]hese allegations are masquerading as facts.” (Doc. 49 at 6). 18 Once again, Plaintiff seems to recite the Bonnette factors without providing any 19 specific facts regarding this case, and she has not shown that the relevant facts are in the 20 sole possession and control of Defendants. See Soo Park v. Thompson, 851 F.3d 910 , 928– 21 29 (9th Cir. 2017). Plaintiff does not further explain why, for example, she believes that 22 “all human resources and upper management functions for all Defendant entities . . . are 23 handled by four individuals–Arturo Rubio Cervantes, Guadalupe Rubio Arroyo, Malinali 24 Madera Rubio, and Miguel Madera.” (Doc. 31 at 15). Furthermore, while she alleges that 25 “all Defendant entities that comprise the single employer or single integrated employer at 26 issue in this matter are wholly owned by Defendant Arturo Rubio Cervantes” (id. at 16), 27 she also alleges that both Arturo Rubio Cervantes and Guadalupe Rubio Arroyo “are 28 owners” of the Defendant entities (id. at 13). The FAC is ambiguous whether Guadalupe 1 Rubio Arroyo has any employer relationship to Plaintiff other than as the wife of Arturo 2 Rubio Cervantes. 3 Although it is true that the pleading standard to survive a motion to dismiss under 4 Rule 12(b)(6) is fairly lenient and is broadly construed in favor of plaintiffs, here, Plaintiff 5 simply has not done enough to nudge the complaint “across the line from conceivable to 6 plausible.” Twombly, 550 U.S. at 570 . However, Plaintiff will be given an opportunity to 7 amend her complaint to add additional facts regarding the individual Defendants. 8 IV. CONCLUSION 9 Because the deficiencies in Plaintiff’s FAC may be cured by amendment, this Court 10 will allow Plaintiff leave to file a Second Amended Complaint. See Lopez v. Smith, 203 11 F.3d 1122 , 1127–29 (9th Cir. 2000) (amendment should be permitted if adding of 12 additional facts may resolve deficiencies). Plaintiff’s opportunity to amend her Complaint 13 will also prevent any prejudice to Plaintiff from Defendants’ alleged failure to adequately 14 meet and confer (see Doc. 42 at 3–4), and Defendants “do not oppose Plaintiff’s request 15 that she be granted an opportunity to amend her Complaint should this Court grant 16 Defendants’ Motion” (Doc. 49 at 4). 17 Accordingly, 18 IT IS ORDERED that Defendants’ Motion to Dismiss (Doc. 37) is granted. 19 Plaintiff’s claims against Defendants JJJ Restaurants LLC, Arturo Rubio Cervantes, and 20 Guadalupe Rubio Arroyo are dismissed without prejudice. 21 IT IS FURTHER ORDERED that Plaintiff is granted leave to file a Second 22 Amended Complaint in accordance with this Order no later than Thursday, May 15, 2025. 23 /// 24 /// 25 /// 26 /// 27 /// 28 /// 1 IT IS FURTHER ORDERED that Plaintiff’s pending Motion for Conditional 2| Certification (Doc. 46) is denied without prejudice. Plaintiff shall have leave to re-file the Motion for Conditional Certification as to any remaining Defendants after Plaintiff files 4} her Second Amended Complaint. 5 Dated this 24th day of April, 2025. [7] 8 RGR