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Barrus v. Dick's Sporting Goods

August 4, 2010


The opinion of the court was delivered by: Siragusa, J.



This Fair Labor Standards Act ("FLSA") matter is before the Court on Defendants' motions (Docket Nos. 255 and 293): to deny certification of state law classes; to strike state law class allegations: and to dismiss preempted state common law claims, ERISA claims, and RICO claims. For the reasons set out below, the motions are granted in part and denied in part.


Defendants Dick's Sporting Goods and Galyan's Trading Company, Inc. ("Galyan's") are national sporting goods retailers who merged in 2004 and currently operate under the Dicks Sporting Goods ("DSG") name. DSG operates 255 stores in 34 states with approximately 16,000 employees who are subject to the Fair Labor Standards Act ("FLSA") wage and hour requirements. (See Falce Aff. (Docket No. 43) at 1--2.) According to Plaintiffs, DSG and Galyan's implemented formal and informal wage and hour policies which were in direct contravention of the protections afforded employees under the FLSA. Specifically, Plaintiffs have identified three different policies utilized by Defendants which allegedly violate the FLSA. Plaintiffs are suing both stores, now merged, along with individual defendants, alleging violations of the FLSA, state law and the Employee Retirement Income Security Act ("ERISA") and the Racketeer Influenced Corrupt Organization Act ("RICO").

In the subject application, as indicated above, Defendants seek dismissal of the state common law overtime claims arguing that they are preempted by FLSA, denial of class certification of all the state law claims, dismissal of the ERISA claims and dismissal of the RICO claims.


Motion to Dismiss Standard

The U.S. Supreme Court, in Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007), clarified the standard to be applied to a 12(b)(6) motion:

Federal Rule of Civil Procedure 8(a)(2) requires only a short and plain statement of the claim showing that the pleader is entitled to relief, in order to give the defendant fair notice of what the claim is and the grounds upon which it rests. While a complaint attacked by a Rule 12(b)(6) motion to dismiss does not need detailed factual allegations, a Plaintiff's obligation to provide the grounds of his entitlement to relief requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do. Factual allegations must be enough to raise a right to relief above the speculative level, on the assumption that all the allegations in the complaint are true (even if doubtful in fact).

Id. at 1964-65 (citations and internal quotations omitted). See also, ATSI Communications, Inc. v. Shaar Fund, Ltd., 493 F.3d 87, 98 (2d Cir. 2007) ("To survive dismissal, the plaintiff must provide the grounds upon which his claim rests through factual allegations sufficient 'to raise a right to relief above the speculative level.'") (quoting Bell Atl. Corp. v. Twombly) (footnote omitted); Iqbal v. Hasty, 490 F.3d 143 (2d Cir. 2007) (Indicating that Bell Atl. Corp. v. Twombly adopted "a flexible 'plausibility standard,' which obliges a pleader to amplify a claim with some factual allegations in those contexts where such amplification is needed to render the claim plausible[,]" as opposed to merely conceivable.)

When applying this standard, a district court must accept the allegations contained in the complaint as true and draw all reasonable inferences in favor of the nonmoving party. Burnette v. Carothers, 192 F.3d 52, 56 (1999), cert. denied, 531 U.S. 1052 (2000). On the other hand, "[c]onclusory allegations of the legal status of the defendants' acts need not be accepted as true for the purposes of ruling on a motion to dismiss." Hirsch v. Arthur Andersen & Co., 72 F.3d 1085, 1092 (2d Cir. 1995)(citing In re American Express Co. Shareholder Litig., 39 F.3d 395, 400-01 n. 3 (2d Cir.1994)). As the Supreme Court clarified in Ashcroft v. Iqbal, __ U.S. __, 129 S.Ct. 1937, 173 L.Ed. 2d 868 (2009):

Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice. Id., at 555, (Although for the purposes of a motion to dismiss we must take all of the factual allegations in the complaint as true, we "are not bound to accept as true a legal conclusion couched as a factual allegation" (internal quotation marks omitted)). Rule 8 marks a notable and generous departure from the hyper-technical, code-pleading regime of a prior era, but it does not unlock the doors of discovery for a plaintiff armed with nothing more than conclusions. Second, only a complaint that states a plausible claim for relief survives a motion to dismiss. Id., at 556. Determining whether a complaint states a plausible claim for relief will, as the Court of Appeals observed, be a context-specific task that requires the reviewing court to draw on its judicial experience and common sense. 490 F.3d at 157-158. But where the well-pleaded facts do not permit the court to infer more than the mere possibility of misconduct, the complaint has alleged-but it has not "show[n]"-"that the pleader is entitled to relief." Fed. Rule Civ. Proc. 8(a)(2).

Iqbal, 129 S.Ct. at 1949--50.

Class Action Certification Standard

Plaintiffs allege that they have sufficiently plead a class action maintainable under Federal Rule of Civil Procedure 23(b)(1), (2), and (3). Rule 23(a) and the relevant (b) subsections state:

(a) Prerequisites to a Class Action. One or more members of a class may sue or be sued as representative parties on behalf of all only if (1) the class is so numerous that joinder of all members is impracticable, (2) there are questions of law or fact common to the class, (3) the claims or defenses of the representative parties are typical of the claims or defenses of the class, and (4) the representative parties will fairly and adequately protect the interests of the class.

(b) Class Actions Maintainable. An action may be maintained as a class action if the prerequisites of subdivision (a) are satisfied, and in addition:

(1) the prosecution of separate actions by or against individual members of the class would create a risk of

(A) inconsistent or varying adjudications with respect to individual members of the class which would establish incompatible standards of conduct for the party opposing the class, or

(B) adjudications with respect to individual members of the class which would as a practical matter be dispositive of the interests of the other members not parties to the adjudications or substantially impair or impede their ability to protect their interests; or

(2) the party opposing the class has acted or refused to act on grounds generally applicable to the class, thereby making appropriate final injunctive relief or corresponding declaratory relief with respect to the class as a whole, or

(3) the court finds that the questions of law or fact common to class members predominate over any questions affecting only individual members, and that a class action is superior to other available methods for fairly and efficiently adjudicating the controversy. The matters pertinent to these findings include:

(A) the class members' interests in individually controlling the prosecution or defense of separate actions;

(B) the extent and nature of any litigation concerning the controversy already begun by or against class members;

(C) the desirability or undesirability of concentrating the litigation of the claims in the particular forum; and

(D) the likely difficulties in managing a class action.

Fed. R. Civ. P. 23(a), (b)(1)(A), (b)(1)(B), (b)(2) and (b)(3)(A)--(C) (2009). The party seeking class certification has the burden of demonstrating that Rule 23's requirements are satisfied. Caridad v. Metro-North Commuter Railroad, 191 F.3d 283, 291 (2d Cir. 1999) (citation omitted), cert. denied, 529 U.S. 1107, 120 S.Ct. 1959, 146 L.Ed. 2d 791 (2000); see also, 5 James W m. Moore et al., MOORE'S FEDERAL PRACTICE § 23.60[2] ("[A] class action must satisfy each of the requirements of Rule 23, and the plaintiff must plead more than a simple reiteration of those requirements in conclusory allegations. Instead, the plaintiff should allege facts demonstrating that all of the requirements for bringing a class action are fulfilled.") (citation omitted). It is well settled that before certifying a class, a district court must conduct a "rigorous analysis" to determine whether or not Rule 23's requirements have been met.*fn1 Caridad,191 F.3d at 291. However, the court should not inquire into the merits of the plaintiffs' underlying claims. Id. (citation omitted). Moreover, courts are required to construe Rule ...

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