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Hickton v. Enterprise Rent-A-Car Co.

September 12, 2008

NICKOLAS C. HICKTON, ON BEHALF OF HIMSELF AND ALL OTHERS SIMILARLY SITUATED, PLAINTIFF,
v.
ENTERPRISE RENT-A-CAR COMPANY, INC.; ENTERPRISE RENT-A-CAR COMPANY OF PITTSBURGH, AND DOES 1 THROUGH 10, INCLUSIVE, DEFENDANTS.



The opinion of the court was delivered by: Joy Flowers Conti United States District

MEMORANDUM OPINION AND ORDER

Introduction

Pending before this court is the motion (Docket No. 12) filed by defendants Enterprise Rent-A-Car Company, Inc. ("Enterprise Parent") and Enterprise Rent-A-Car Company of Pittsburgh ("Enterprise") (together with Enterprise Parent, "defendants") to dismiss, stay, or transfer the claims set forth in the complaint filed by Nickolas C. Hickton ("Hickton" or "plaintiff"), on behalf of himself and all others similarly situated. (Docket No. 1.) On April 23, 2008, the court heard oral argument on defendants' motion to dismiss, stay, or transfer. Several issues raised in defendants' motion which were resolved on the record. (Docket No. 37.) Among other things, the court ordered all claims against Enterprise Parent and certain putative nationwide claims asserted in the complaint stayed. (Docket No. 39.) The court specifically reserved ruling on the issue whether the court should exercise jurisdiction over the Pennsylvania class action claim pending further briefing. The parties filed supplemental briefs. After considering the oral arguments of the parties and the parties' submissions, this court will not dismiss the Pennsylvania class action claim to the extent jurisdiction over that claim is based upon original jurisdiction.*fn1

Background

Enterprise employed Hickton as an assistant manager between November 2004 and March 2006, at one of its Pennsylvania rental locations. (Compl. ¶ 12.) In March 2006, Enterprise promoted Hickton to the position of branch manager, and he worked in this capacity at several rental locations in Pennsylvania and Ohio until March 2007. (Id. ¶ 13.) Plaintiff alleges that managers were wrongfully classified by defendants as exempt from certain federal and state wage law protections, including the requirement of premium overtime pay. (Id. ¶ 29.) Plaintiff claims that he and other managers regularly worked in excess of forty hours per week, without receiving minimum wage or premium overtime compensation for those hours worked that exceeded forty hours per week. (Id. ¶¶ 14-15.)

In support of plaintiff's argument that managers were wrongfully classified as exempt employees during the time he was employed by Enterprise, plaintiff alleges that managers: 1) were not required to have a specific degree in a field of science or learning, and were not employed in a bona fide professional capacity as required for the professional exemption (Id. ¶ 26); 2) were not qualified for the executive exemption, because they did not have the authority to hire or fire any of the employees working within the rental location (Id. ¶ 27); and 3) were not qualified for the administrative exemption, because, despite the title, the primary duties of the managers were not managerial (Id. ¶ 28).

Plaintiff argues that because he and other managers were not exempt employees and defendants failed to pay managers minimum wage or premium overtime compensation for the hours worked in excess of forty hours per week, defendants violated the Fair Labor Standards Act of 1938, as amended, 29 U.S.C. §§ 201 et seq. ("FLSA") and also violated both the Pennsylvania Minimum Wage Act of 1968, as amended, 43 PA. CONS. STAT. ANN. §§ 333.101 et seq. ("PMWA") and the Ohio Minimum Fair Wage Standards Act, OHIO REV. CODE ANN. §§ 4111.01 et seq. ("OMFWSA"). (Compl. ¶¶ 2-4, 8-10.)

Plaintiff brings the suit asserting claims under the aforementioned statutes. (Id. ¶¶ 6, 53-56.) The action based upon the FLSA is a collective action, as provided by 29 U.S.C. § 216(b). Pursuant to that section, potential plaintiffs need to "opt-in" to this lawsuit, by affirmatively electing to participate, in order for their rights to be adjudicated in this case. At oral argument, the parties indicated that the state-law action based upon the OMFWSA is likewise an "opt-in" action. The propriety of the court exercising jurisdiction over the OMFWSA claim is not disputed or otherwise addressed in the parties' briefs. In contrast, the state-law class action based upon the PMWA is comprised of "all similarly-situated persons who choose not to opt-out" pursuant to Federal Rule of Civil Procedure 23 ("Rule 23"). An "opt-out" action is the opposite of an "opt-in" action -- the potential class members' rights in an opt-out action will be adjudicated by default as members of the class, unless they affirmatively act to decline participation.

Standard of Review

A motion to dismiss tests the legal sufficiency of the complaint. Kost v. Kozakiewicz, 1 F.3d 176, 183 (3d Cir. 1993). In deciding a motion to dismiss, the court is not opining on whether the plaintiff will be likely to prevail on the merits. Rather, when considering a motion to dismiss, the court accepts as true all well-pled factual allegations in the complaint and views them in a light most favorable to the plaintiff. U.S. Express Lines Ltd. v. Higgins, 281 F.3d 383, 388 (3d Cir. 2002). While a complaint does not need detailed factual allegations to survive a Federal Rule of Civil Procedure 12(b)(6) ("Rule 12(b)(6)") motion to dismiss, a complaint must provide more than labels and conclusions. Bell Atlantic Corp. v. Twombly, 127 S.Ct. 1955, 1964 (2007). A "formulaic recitation of the elements of a cause of action will not do." Id. (citing Papasan v. Allain, 478 U.S. 265, 286 (1986)). Factual allegations must be enough to raise a right to relief above the speculative level, and sufficient to state a claim for relief that is plausible on its face. Id. A challenge to subject-matter jurisdiction on the face of a complaint is to be analyzed under the same standard as a Rule 12(b)(6) motion to dismiss. All allegations in the complaint are assumed to be true. Petruska v. Gannon University, 462 F.3d 294, 302 n.3 (3d Cir. 2006); Soliman v. Gonzales, No. 07-CV-0682, 2007 WL 4294665, at *1 (E.D. Pa. Dec. 5, 2007).

Discussion

Plaintiff pled two bases for subject-matter jurisdiction over the Pennsylvania state-law PMWA class action in the complaint: supplemental jurisdiction pursuant to 28 U.S.C. § 1367, and original jurisdiction under the Class Action Fairness Act of 2005, 28 U.S.C. § 1332(d) ("CAFA"). In their brief, defendants challenge both these bases. The court will address each basis.

A. Supplemental Jurisdiction

In De Asencio v. Tyson Foods, Inc., 342 F.3d 301 (3d Cir. 2003), the United States Court of Appeals for the Third Circuit addressed the issue whether an FLSA opt-in collective action can proceed together with a state-law opt-out class action in a single lawsuit, when jurisdiction over the state-law claim is premised upon supplemental jurisdiction. Under 28 U.S.C. § 1367(c), courts have discretion to decline jurisdiction and dismiss state-law claims in certain situations listed in that subsection. Two of these situations are when the state-law claim substantially predominates over the principal claim and when there are other compelling reasons. De Asencio, 342 F.3d at 309 (citing 28 U.S.C. § 1367(c)(2), (4)). The court of appeals in De Asencio ...


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