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Crumbling v. Miyabi Murrells Inlet LLC

United States District Court, D. South Carolina, Charleston Division

June 16, 2016

Krista Crumbling; William Stone; Christopher Rich; and Anthony Girard, on behalf of themselves and all others similarly situated, Plaintiffs,
v.
Miyabi Murrells Inlet, LLC; Charleston Miyabi, Inc.; Columbia Miyabi, Inc.; Fantasy Far East, Inc.; United Will Kyoto USA, Inc.; Miyabi Greenville, Inc.; Fayetteville Miyabi, Inc.; Augusta Miyabi, Inc.; Savannah Miyabi, Inc.; Capital Japan, Inc. d/b/a Miyabi; Koichiro Hirao, individually; Koichiro Maeda, individually; and John Does 1-10, individually, Defendants.

          ORDER

          PATRICK MICHAEL DUFFY United States District Judge.

         This matter is before the Court on several motions to dismiss filed by various Defendants (ECF Nos. 36, 39, 40, 51, 68, 70, 74).[1] Also before the Court are three motions to stay filed by various Defendants (ECF Nos. 69, 71, 76), and Plaintiffs’ Motion to Certify (ECF No. 65). For the reasons set forth herein, the motions to dismiss are granted in part and denied in part, and the other motions are denied as moot.

         BACKGROUND

         On December 10, 2015, Plaintiffs commenced this action on behalf of themselves and all others similarly situated, seeking unpaid minimum wages and unpaid overtime wages pursuant to the collective action provision of the Fair Labor Standards Act (“FLSA”), 29 U.S.C. § 216(b). Plaintiffs also seek relief for unauthorized deductions from their wages pursuant to the South Carolina Payment of Wages Act (“SCPWA”), SC Code Ann. § 41-10-10, et seq. Plaintiffs are former servers at several Miyabi restaurant locations in South Carolina, North Carolina, and Georgia.

         Plaintiffs primarily allege that Defendants used tip pools that violated the FLSA. Specifically, Plaintiffs assert that Defendants paid some of their employees an hourly wage lower than the statutory minimum wage using the FLSA’s Tip Credit provision, 29 U.S.C. § 203(m). Plaintiffs further assert that while Defendants were paying less than the statutory minimum wage using the Tip Credit provision, they required servers to contribute a portion of their tips to tip pools to compensate other employees. Finally, Plaintiffs allege that some of the employees who received money from the tip pools were non-tipped employees who did not qualify to share in the tip pools because they did not customarily and ordinarily receive tips. Because these non-tipped employees did not customarily and ordinarily receive tips, as required by the Tip Credit provision, Plaintiffs allege that the tip pools they and the other potential class members shared with the non-tipped employees violated the FLSA.

         LEGAL STANDARD

         Defendants’ standing argument implicates this Court’s subject matter jurisdiction and is governed by Rule 12(b)(1). Usually, “questions of subject matter jurisdiction must be decided ‘first, because they concern the court’s very power to hear the case.’” Roman v. Guapos III, Inc., 970 F.Supp.2d 407, 411 (D. Md. 2013) (quoting Owens-Ill., Inc. v. Meade, 186 F.3d 435, 442 n.4 (4th Cir. 1999)). The plaintiff bears the burden of proof on questions of subject matter jurisdiction. See Evans v. B.F. Perkins Co., 166 F.3d 642, 647 (4th Cir. 1999). “When a defendant challenges subject matter jurisdiction pursuant to Rule 12(b)(1), ‘the district court is to regard the pleadings as mere evidence on the issue, and may consider evidence outside the pleadings without converting the proceeding to one for summary judgment.’” Id. (quoting Richmond, Fredericksburg & Potomac R.R. Co. v. United States, 945 F.2d 765, 768 (4th Cir. 1991)). “The district court should grant the Rule 12(b)(1) motion to dismiss ‘only if the material jurisdictional facts are not in dispute and the moving party is entitled to prevail as a matter of law.’” Id. (quoting Richmond, Fredericksburg & Potomac R.R. Co., 945 F.2d at 768).

         DISCUSSION[2]

         Plaintiffs filed their initial complaint on December 10, 2015. Then, on February 1, 2016, Plaintiffs filed their first amended complaint. Without Defendants’ consent or the Court’s leave, Plaintiffs then filed second and third amended complaints on March 8 and March 10, respectively. Defendants filed three different motions to dismiss Plaintiffs’ first amended complaint pursuant to Rule 12(b)(6) on February 22, 2016.

         Although the Court has concerns about whether Plaintiffs’ second and third amended complaints were filed in compliance with Rule 15, the Court may look beyond the pleadings in its evaluation of standing. Accordingly, without deciding whether those amended complaints are valid, the Court will consider the allegations contained therein. In their various motions to dismiss, Defendants first contend that the Greenville, Fayetteville, and Augusta Miyabi locations should be dismissed because no plaintiff alleges that he or she worked at those locations. Second, Defendants question whether or not Plaintiffs have standing to bring this entire action in its current form. Because standing is a threshold question, the Court will address it first. See Roman, 970 F.Supp.2d at 411.

         Standing

         “As the party invoking federal jurisdiction, Plaintiffs bear the burden of establishing standing under Article III of the Constitution.” Roman, 970 F.Supp.2d at 412 (quoting McBurney v. Cucinelli, 616 F.3d 393, 410 (4th Cir. 2010)). As explained by the Fourth Circuit:

The irreducible constitutional minimum of standing requires (1) an injury in fact-a harm suffered by the plaintiff that is concrete and actual or imminent, not conjectural or hypothetical; (2) causation-a fairly traceable connection between the plaintiff’s injury and the complained-of conduct of the defendant; and (3) redressability-a likelihood that the requested relief will redress the alleged injury.

McBurney, 616 F.3d at 402 (quoting Steel Co. v. Citizens for a Better Env’t, 523 U.S. 83, 102-03 (1998)) (internal quotation marks omitted). Here, Plaintiffs have clearly alleged a sufficient injury-in-fact: the failure to properly be compensated for hours worked. However, whether those injuries may be ...


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