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Acosta v. Gaudin

United States District Court, W.D. Pennsylvania

October 18, 2017

ROBERT GAUDIN, Individually and as Chief Executive Officer of Holland Acquisitions, Inc. Defendant.


          Mark R. Hornak United States District Judge

         Pending before the Court is Defendant's Motion to Dismiss Plaintiffs Complaint pursuant to both the claim-splitting doctrine and Federal Rule of Civil Procedure 12(b)(6). (ECF No. 7 ("Motion").) For the reasons that follow, the Motion is granted on the terms set forth in this Opinion.

         I. Background

         The Secretary of Labor ("Secretary") filed this case against Robert Gaudin ("Defendant") in his individual capacity and as Chief Executive Officer of Holland Acquisitions, Inc., ("Holland") under the Fair Labor Standards Act ("FLSA"). (Compl., ECF No. 1.) The Secretary seeks to recover purported unpaid back wages from Defendant, alleging that he was a responsible officer of Holland and is thus individually liable for any wages owed. (Id.) The Secretary is simultaneously maintaining just such an action with this same Court against Holland itself and another senior officer, Bryan Gaudin, at Acosta v. Holland Acquisitions, Inc., No. 2:15- cv-1094 (W.D. Pa.). In both of his pending cases, the Secretary specifically alleges that Holland misclassified certain employees as independent contractors, and that alleged misclassification resulted in Holland's failure to compensate such individuals for overtime worked, in violation of §§ 7, 11(c), 15(a)(2), and 15(a)(5) of the FLSA. The Secretary also seeks identical relief in both cases: injunctive relief and monetary damages.

         The relationship between this case and Holland Acquisitions is at the heart of Defendant's Motion, so some facts surrounding Holland Acquisitions are relevant here. The Secretary filed a complaint against Holland and its Chief Operating Officer, Bryan Gaudin, on August 20, 2015. (Holland Acquisitions, ECF No. 1.) The Secretary amended that complaint on November 13, 2015, but he did not add or replace any named defendant. (Id., ECF No. 21.) After filing a motion to amend, followed by full briefing and oral argument by the parties, the Court granted the Secretary leave to file his Second Amended Complaint. (Id., ECF Nos. 44, 46, 51, 54, 55.) The Secretary filed the Second Amended Complaint on July 18, 2016, but the Secretary did not add or replace any named defendant. (Id., ECF No. 57.) On July 7, 2017, the Secretary filed a Motion to Amend/Correct "Schedule A," which is a list attached to the original and both amended complaints that provides names of individuals allegedly affected by the purported FLSA violations. (Id., ECF No. 105.) Again, the Secretary did not seek to add or replace any named defendant. The Court granted that motion as well. (Id., ECF No. 132.) Thus, the Secretary has been granted three (3) opportunities to amend in his first filed case with nary a mention of claims against Robert Gaudin. Nor has the Secretary provided any indication in his prior four (4) Complaints, including the one at issue here, of unlawful conduct by Robert Gaudin, as we will see below.

         The Complaint in this case is nearly identical to the Second Amended Complaint in Holland Acquisitions. (Compare ECF No. 1, with Holland Acquisitions, ECF No. 57.) Most importantly, both refer to the same alleged violations, during the same time frame, at and by the same company. To boil it down, this is a separate action that comes two years later against a company's CEO for the very same FLSA overtime compensation violations that the Secretary is already litigating against the company's COO and the company itself.

         The Defendant in this case has moved to dismiss the Complaint on two grounds. First, he asks the Court to dismiss this case asserting that the Secretary has impermissibly sought to "split" what is really a single case into two cases. In the alternative, he asks the Court to dismiss the Complaint without prejudice for the Secretary's failure to plead with sufficient detail to state a plausible claim for relief. The Secretary opposes the Motion asserting that this case can stand on its own two feet since Defendant has individual liability under the FLSA, and, in any event, the Complaint sufficiently pleads the FLSA claims asserted.

         II. Legal Standard

         The plausibility standard governing motions to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6) requires courts to "accept all factual allegations [in the complaint] as true, construe the complaint in the light most favorable to the plaintiff, and determine whether, under any reasonable reading of the complaint, the plaintiff may be entitled to relief." Fowler v. UPMC Shadyside, 578 F.3d 203, 210 (3d Cir. 2009) (quoting Phillips v. Cty. of Allegheny, 515 F.3d 224, 233 (3d Cir. 2008)). A complaint need only contain "a short and plain statement of the claim." Fed. R. Civ. P. 8(a)(2). While a plaintiff is not required to plead detailed factual allegations, a complaint must nevertheless plead "enough facts to state a claim to relief that is plausible on its face." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555, 570 (2007). While "[f]he plausibility standard is not akin to a probability requirement," it "asks for more than a sheer possibility that a defendant has acted unlawfully." Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). A complaint containing only "naked assertions devoid of further factual enhancements" will not survive a 12(b)(6) motion to dismiss. Id. Thus, "labels and conclusions" are not enough to survive a motion to dismiss, and the "courts are not bound to accept as true a legal conclusion couched as a factual allegation." Twombly, 550 U.S. at 555.

         III. Analysis

         A. Claim-Splitting

         The claim-splitting doctrine prohibits plaintiffs from "maintaining] two separate actions involving the same subject matter at the same time in the same court and against the same defendant." Walton v. Eaton Corp., 563 F.2d 66, 70 (3d Cir. 1977) (citing United States v. Haytian Republic, 154 U.S. 118, 123-24 (1894)). "The long-standing rule against improper claim splitting prohibits a plaintiff from prosecuting his case piecemeal and requires that all claims arising out of a single alleged wrong be presented in one action." Prewitt v. Walgreens Co., No. 12-6967, 2013 WL 6284166, at *5 (E.D. Pa. Dec. 2, 2013). The claim-splitting doctrine is widely considered derivative of the res judicata doctrine. See Hartsel Springs Ranch of Colo., Inc. v. Bluegreen Corp., 296 F.3d 982, 986 (10th Cir. 2002) (noting "more recent cases analyze claim-splitting as an aspect of res judicata"); Davis v. Sun Oil Co., 148 F.3d 606, 613 (6th Cir. 1998) (per curiam) (describing claim-splitting as "the 'other action pending' facet of the res judicata doctrine"); Shaver v. F.W. Woolworth Co., 840 F.2d 1361, 1365 (7th Cir. 1988) ("This application of the doctrine of res judicata prevents the splitting of a single cause of action and the use of several theories of recovery as the basis for separate suits.").

         A court must "carefully insure[] [sic] that the plaintiff does not use the tactic of filing two substantially identical complaints to expand the procedural rights he would have otherwise enjoyed." Walton, 563 F.2d at 71. Specifically, this Court must be wary of the Secretary seeking to "use the incorrect procedure of filing duplicative complaints for the purpose of circumventing the rules pertaining to the amendment of complaints." Id. at 71 (referencing Fed. R. Civ. P. 15). A court's decision to dismiss a new complaint under the claim-splitting doctrine is subject to the abuse of discretion standard of review. Schneider v. United States, 301 F. App'x 187, 190 (3d Cir. 2008).

         The claim-splitting doctrine in this Circuit "applies when two cases: (1) take place in the same court; (2) with the same defendants; (3) involving the same subject matter." McKenna v. City of Philadelphia, 304 F. App'x 89, 92 (3d Cir. 2008); Walton, 563 F.2d at 70. The cases need not be actually identical to involve the same subject matter. McKenna, 304 F. App'x at 92. When the difference between the two cases is "purely semantic" and both cases rely ...

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