Lopez v. Next Generation Construction & Environmental, LLC

          ORDER REJECTING THE RECOMMENDATIONS OF UNITED STATES MAGISTRATE JUDGE KRISTEN L. MIX

          CHRISTINE M. ARGUELLO UNITED STATES DISTRICT JUDGE.

         Before the Court are two Recommendations of United States Magistrate Judge Kristin L. Mix (Doc. ## 145, 155), wherein she recommends that this Court deny Plaintiff Ricardo Lopez's Motion to Amend Class and Collective Action Complaint (Doc. # 132) and grant Defendant Next Generation Construction and Environmental, LLC's Motion to Dismiss (Doc. # 111). Plaintiff timely objected to each Recommendation, essentially challenging each in its entirety.^[1] The Court must therefore review the issues de novo and, in so doing, “may accept, reject, or modify the recommended disposition[s.]” Fed.R.Civ.P. 72(b)(3). Having conducted the required de novo review, the Court rejects both Recommendations, grants in part Plaintiff's Motion to Amend, and denies Defendant's Motion to Dismiss.

         I. BACKGROUND

         Plaintiff is a former employee of Defendant who claims that he, and others similarly situated, were not properly compensated for overtime hours or for meal and rest breaks. (Doc. # 18, ¶¶ 10-11; Doc. # 44 at 2.) Plaintiff therefore initiated this lawsuit against Defendant on January 1, 2016, alleging violations of the Fair Labor Standards Act (FLSA), 29 U.S.C. § 201, et seq., the Colorado Minimum Wage Act, Colo. Rev. Stat. § 8-6-101, et seq., and the Colorado Wage Claim Act, Colo. Rev. Stat. § 8-4-101, et seq. (Doc. # 1.)

         On March 30, 2016, Defendant filed a Motion for More Definite Statement pursuant to Federal Rule of Civil Procedure 12(e). (Doc. # 15.) Plaintiff then timely filed a First Amended Complaint on April 19, 2016, attempting to address Defendant's claimed deficiencies. (Doc. # 18.) Several weeks later, Defendant filed a Reply to the Motion for a More Definite Statement, arguing that Plaintiff's amendments failed to address the alleged deficiencies. (Doc. # 21.) Magistrate Judge Mix nonetheless denied Defendant's Motion for More Definite Statement as moot because it was based on an inoperative complaint. (Doc. # 22.)

         In February 2017, this Court granted Plaintiff's request for class certification under Federal Rule of Civil Procedure 23 and approved the parties request to send notice to all class members. (Doc. # 71.)

         On August 29, 2017, based on information provided by various class members during the notice process, Plaintiff sought leave to amend the First Amended Complaint to add a time-shaving claim. (Doc. ## 87; 92.) The Court granted Plaintiff's request (Doc. # 104), and he filed a Second Amended Complaint. (Doc. # 105).

         Thereafter, Defendant filed the instant Motion to Dismiss Plaintiff's Second Amended Complaint. (Doc. # 111.) Defendant's Motion alleges that Plaintiff's Second Amended Complaint fails to state a claim under the FLSA because it alleges insufficient facts to (1) show that he or Defendant is engaged in commerce, (2) support his claim that he was not paid for overtime or missed breaks, and (3) support his claim that Defendant did not comply with the FLSA record-keeping requirements. (Id.) For the same reasons, the Motion also asserts that the Second Amended Complaint is deficient with respect to Plaintiff's state law claims under the Colorado Wage Claim Act or the Colorado Minimum Wage Act. (Id.)

         In response to the Motion to Dismiss, Plaintiff filed a Third Amended Complaint, attempting to address the alleged inadequacies. (Doc. # 121.) The deadline to amend, however, had passed. The Court struck that filing for failure to comply with Federal Rule of Civil Procedure 15(a)(2), which states that, once the deadline has passed, “a party may amend its pleading only with the opposing party's written consent or with the court's leave.” (Doc. # 131.)

         Consequently, Plaintiff now seeks leave to amend his Complaint for a third time, primarily arguing that a Third Amended Complaint would provide more detail in response to Defendant's pending Motion to Dismiss. (Doc. # 132.) Plaintiff specifically wishes to add facts supporting that (1) Defendant is an enterprise engaged in commerce and/or in the production of goods for commerce within the meaning of the FLSA; (2) Defendant failed to pay overtime as required under the FLSA; and (3) Defendant failed to keep proper payroll records. (Doc. # 121-1.)

         In consideration of Plaintiff's Motion to Amend (Doc. # 132) and Defendant's Motion to Dismiss (Doc. # 111), Magistrate Judge Mix recommended that the Court (1) deny Plaintiff's entire request to amend and (2) subsequently grant Defendant's Motion to Dismiss on grounds that Plaintiff failed to adequately plead the enterprise element of his FLSA claim. (Doc. ## 145, 155.) The Court disagrees with those recommendations for the following reasons.

         II. LAW

         The purpose of a motion to dismiss under Federal Rule of Civil Procedure 12(b)(6) is to test “the sufficiency of the allegations within the four corners of the complaint.” Mobley v. McCormick, 40 F.3d 337, 340 (10th Cir. 1994). A complaint will survive such a motion only if it contains “enough facts to state a claim to relief that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). “The question is whether, if the allegations are true, it is plausible and not merely possible that the plaintiff is entitled to relief under the relevant law.” Christy Sports, LLC v. Deer Valley Resort Co., Ltd., 555 F.3d 1188, 1192 (10th Cir. 2009).

         In reviewing a Rule 12(b)(6) motion, a court must accept all the well-pleaded allegations of the complaint as true and must construe them in the light most favorable to the plaintiff. Williams v. Meese,926 F.2d 994, 997 (10th Cir. 1991). Nevertheless, a complaint does not “suffice if it tenders ‘naked assertion[s]' devoid of ‘further factual enhancement.'” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Twombly, 550 U.S. at 557). “The court's function on a Rule 12(b)(6) motion is not to weigh potential evidence that the parties might present at trial, but to assess whether ...