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Rivendell Woods Brief

No. 04-2330
_________________________________________________________________

UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT

_________________________________________________________________

ELAINE L. CHAO, SECRETARY OF LABOR,
UNITED STATES DEPARTMENT OF LABOR,

Plaintiff-Appellant,

v.

RIVENDELL WOODS, INC., d/b/a RIVENDELL WOODS
and RIVENDELL WOODS FAMILY CARE; LANDRAW-I,
LLC; ANDREA WELLS JAMES, Individually;
and RODNEY JAMES, Individually,

Appellees-Defendants.

_________________________________________________________________

On Appeal from the United States District Court
for the Western District of North Carolina
_________________________________________________________________

BRIEF FOR THE SECRETARY OF LABOR
_________________________________________________________________

HOWARD M. RADZELY
Solicitor of Labor

STEVEN J. MANDEL
Associate Solicitor

PAUL L. FRIEDEN
Counsel for Appellate Litigation

CAROL B. FEINBERG
Senior Attorney

U.S. Department of Labor
200 Constitution Ave., N.W.
N 2716
Washington, D.C. 20210
(202) 693-5555

Counsel for the Secretary

TABLE OF CONTENTS

TABLE OF AUTHORITIES

STATEMENT OF SUBJECT MATTER AND APPELLATE JURISDICTION

STATEMENT OF THE ISSUE

STATEMENT OF THE CASE

A.    Nature of the Case and Course of Proceedings

B.    Statement of Facts

C.    Decisions Below

1.    The Magistrate's Decision

2.    The District Court Decisions

SUMMARY OF ARGUMENT

ARGUMENT

THE DISTRICT COURT ERRED IN DISMISSING THE SECRETARY'S AMENDED COMPLAINT WHICH CONTAINS A SHORT AND PLAIN STATEMENT OF THE CLAIM ALLEGING OVERTIME AND RECORD KEEPING VIOLATIONS OF THE FLSA IN CONFORMANCE WITH THE NOTICE PLEADING REQUIREMENT OF FEDERAL RULE OF CIVIL PROCEDURE 8(a)

A.    Standard of Review

B.    The Secretary's Amended Complaint Meets the Notice Pleading Requirement Of Federal Rule of Civil Procedure 8(a), And Therefore Should Have Survived Defendants' Rule 12(b)(6) Motion To Dismiss For Failure To State A Claim Upon Which Relief Can Be Granted.

CONCLUSION

STATEMENT REGARDING ORAL ARGUMENT

CERTIFICATE OF COMPLIANCE

CERTIFICATE OF SERVICE

TABLE OF AUTHORITIES

Cases:

Angulo v. The Levy Co., 568 F. Supp. 1209 (N.D. Ill. 1983) aff'd sub nom. Flores v. Levy Co., 757 F.2d 806 (7th Cir. 1985)

Bass v. DuPont de Nemours & Co., 324 F.3d 761 (4th Cir.), cert. denied, 540 U.S. 940 (2003)

Bass v. World Wrestling Federation Entertainment, Inc., 129 F. Supp.2d 491 (E.D. N.Y. 2001)

Blizzard v. Dalton, 876 F. Supp. 95 (E.D. Va. 1995)

Brock v. Hamad, 867 F.2d 804 (4th Cir. 1989)

Burton v. Zimmerman, 131 F.2d 377 (4th Cir. 1942)

Chao v. A-One Medical Services, Inc., 346 F.3d 908 (9th Cir. 2003), cert. denied, 124 S. Ct. 2095 (2004)

Cockerham v. Stokes County Board of Education, 302 F. Supp.2d 490 (M.D.N.C. 2004)

Conley v. Gibson, 355 U.S. 41 (1957)

DGM Investments, Inc. v. New York Futures Exchange, Inc., 265 F. Supp.2d 254 (S.D. N.Y. 2003)

De'Lonta v. Angelone, 330 F.3d 630 (4th Cir. 2003)

Dickson v. Microsoft Corp., 309 F.3d 193 (4th Cir. 2002), cert. denied, 539 U.S. 953 (2003)

Donovan v. Abrams Bar B. Q. of Pinetops, Inc., No. 82-69-Civ-8, 1983 WL 2014 (E.D.N.C. 1983)

Donovan v. American Leader Newspapers, Inc., 524 F. Supp. 1144 (M.D. Fla. 1981)

Donovan v. University of Texas at El Paso, 643 F.2d 1201 (5th Cir. 1981)

Donovan v. Williams Oil Co., 717 F.2d 503 (10th Cir. 1983)

Dunlop v. Oklahomans for Indian Opportunity, Inc., No. 75-0595-D, 1975 WL 275 (W.D. Okla. 1975)

Dutton v. Cities Service Defense Corp., 197 F.2d 458 (8th Cir. 1952)

Equal Employment Opportunity Comm'n v. Gilbarco, Inc., 615 F.2d 985 (4th Cir. 1980)

Farrell v. Pike, 342 F. Supp.2d 433 (M.D.N.C. 2004)

Fletcher v. Tidewater Builders Ass'n, Inc., 216 F.R.D. 584 (E.D. Va. 2003)

Franks v. Ross, 313 F.3d 184 (4th Cir. 2002)

Frasier v. General Electric Co., 930 F.2d 1004 (2d Cir. 1991)

Garrett v. Phillips Mills, Inc., 721 F.2d 979 (4th Cir. 1983) Hamilton v. Tulsa County Pub. Facilities, Auth., 85 F.3d 494 (10th Cir. 1996)

Hodgson v. Virginia Baptist Hospital, Inc., 482 F.2d 821 (4th Cir. 1973)

Howard v. Malcolm, 852 F.2d 101 (4th Cir. 1988)

Hoy v. Progress Pattern Co., 217 F.2d 701 (6th Cir. 1954)

Iodice v. United States, 289 F.3d 270 (4th 2002

Jackson v. Blue Dolphin Communications of N.C., 226 F. Supp.2d 785 (W.D.N.C. 2002)

Knight v. Columbus, Ga., 19 F.3d 579 (11th Cir.), cert. denied, 513 U.S. 929 (1994)

Manosky v. Bethlehem-Hingham Shipyard, Inc., 177 F.2d 529 (1st Cir. 1949)

Marshall v. ITT Continental Baking Co., Inc., No. 78 Civ. 3157-CSH, 1978 WL 1707 (S.D. N.Y. 1978)

Marshall v. Quik-Trip Corp., 672 F.2d 801 (10th Cir. 1982)

Marshall v. Truman Arnold Distributing Co., Inc., 640 F.2d 906 (8th Cir. 1981)

McLaughlin v. Racoon Mining Co., Inc., No. 2:87-0372, 1988 WL 156770, (S.D. W.Va. 1988)

Mitchell v. E-Z Way Towers, Inc., 269 F.2d 126 (5th Cir. 1959)

Nealon v. Stone, 958 F.2d 584 (4th Cir. 1992)

Radbod v. Washington Suburban Sanitary Comm'n, No. Civ. JFM-03-309, 2003 WL 21805288 (D. Md. 2003)

Reich v. Bay, Inc., BBI, Inc., 23 F.3d 110 (5th Cir. 1994)

Reich v. Great Lakes Collection Bureau, Inc., 176 F.R.D. 81 (W.D. N.Y. 1997)

Republican Party of North Carolina v. Martin, 980 F.2d 943 (4th Cir. 1992) cert. denied sub nom. Hunt v. Republican Party of North Carolina, 510 U.S. 828 (1993)

Revene v. Charles County Commissioners, 882 F.2d 870 (4th Cir. 1989)

Rose v. Goldman, Sachs & Co., Inc., 163 F. Supp.2d 238 (S.D. N.Y. 2001)

Shultz v. Clay Transfer Co., 50 F.R.D. 480 (E.D.N.C. 1970)

Shultz v. Manor House of Madison, Inc., 51 F.R.D. 16 (W.D. Wis. 1970)

Swierkiewicz v. Sorema N.A., 534 U.S. 506 (2002)

Tobin v. David Witherspoon, Inc., 14 F.R.D. 148 (E.D. Tenn. 1953)

United Roasters, Inc. v. Colgate-Palmolive Co., 649 F.2d 985 (4th Cir.), cert. denied, 454 U.S. 1054 (1981)

Usery v. Pilgrim Equipment, Co., Inc., 527 F.2d 1308 (5th Cir.), cert. denied, 429 U.S. 826 (1976)

Veney v. Wyche, 293 F.3d 726 (4th Cir. 2002)

Statutes and Regulations:

28 U.S.C. 1291
28 U.S.C. 1331
28 U.S.C. 1345

Age Discrimination in Employment Act, 29 U.S.C. 621 et seq

Civil Rights Act of 1964, 42 U.S.C. 2000e (Title VII)

Equal Pay Act of 1963, 29 U.S.C. 206(d)

Fair Labor Standards Act of 1938, as amended, 29 U.S.C. 201 et seq.

29 U.S.C. 203(d)
29 U.S.C. 203(r)
29 U.S.C. 203(s)(1)
29 U.S.C. 203(s)(1)(B)
29 U.S.C. 206(d)
29 U.S.C. 207
29 U.S.C. 207(a)(1)
29 U.S.C. 211(c)
29 U.S.C. 215(a)(2)
29 U.S.C. 215(a)(5)
29 U.S.C. 216(c)
29 U.S.C. 217

Family and Medical Leave Act, 29 U.S.C. 2601 et seq.

Portal-to-Portal Act, 29 U.S.C. 251 et seq.

29 U.S.C. 255(a)

Code of Federal Regulations, 29 C.F.R. Part 516

Miscellaneous:

Federal Rule of Civil Procedure

Rule 8
Rule 8(a)
Rule 8(b)
Rule 8(e)(2)
Rule 11
Rule 12(b)(6)
Rule 12(e)
Rule 26
Rule 37
Rule 56

5C Charles Alan Wright and Arthur R. Miller, Federal Practice and Procedure 1376 (3d ed. 2004)

5 Charles Alan Wright and Arthur R. Miller, Federal Practice and Procedure 1202 (2d ed. 1990)

No. 04-2330
_________________________________________________

UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT

_________________________________________________

ELAINE L. CHAO, SECRETARY OF LABOR,
UNITED STATES DEPARTMENT OF LABOR,

Plaintiff-Appellant,

v.

RIVENDELL WOODS, INC., d/b/a RIVENDELL WOODS
and RIVENDELL WOODS FAMILY CARE; LANDRAW-I,
LLC; ANDREA WELLS JAMES, Individually;
and RODNEY JAMES, Individually,

Appellees-Defendants.

_________________________________________________

On Appeal from the United States District Court
for the Western District of North Carolina
_________________________________________________

BRIEF FOR THE SECRETARY OF LABOR
_________________________________________________

STATEMENT OF SUBJECT MATTER AND APPELLATE JURISDICTION

    This case arises under the Fair Labor Standards Act of 1938, as amended ("FLSA" or "Act"), 29 U.S.C. 201 et seq. The district court had jurisdiction over this action pursuant to section 17 of the FLSA, 29 U.S.C. 217, which provides the district courts with jurisdiction to restrain violations of the Act, including restraining the withholding of back wages due for minimum wage or overtime violations. Jurisdiction also was based on 28 U.S.C. 1331 (federal question) and 28 U.S.C. 1345 (jurisdiction over suits commenced by an agency or officer of the United States).

    On August 19, 2004, the district court judge issued a Memorandum and Order of Dismissal, dismissing the complaint filed by the Secretary of Labor ("Secretary") for failure to state a claim upon which relief can be granted. See Fed. R. Civ. P. 12(b)(6). On October 14, 2004, the Secretary filed with the district court a timely Notice of Appeal of the court's August 19th Dismissal Order.

    This Court has jurisdiction of this appeal under 28 U.S.C. 1291, giving the courts of appeals jurisdiction of appeals from all final decisions of the district courts.

STATEMENT OF THE ISSUE

    Whether the district court erred in dismissing the Secretary's amended FLSA complaint when such complaint, despite not listing individual employees, contained a short and plain statement of the claim in conformance with the notice pleading requirement of Federal Rule of Civil Procedure 8(a). [1]

STATEMENT OF THE CASE

A.    Nature Of The Case And Course Of Proceedings

    On June 11, 2003, the Secretary filed a complaint pursuant to section 17 of the FLSA, 29 U.S.C. 217, seeking to enjoin the Defendants from violating sections 7, 11(c), 15(a)(2), and 15(a)(5) of the FLSA (29 U.S.C. 207, 211(c), 215(a)(2), 215(a)(5)) (overtime and recordkeeping provisions), and to restrain the Defendants from withholding unpaid overtime compensation (Joint Appendix "APP" -9-12). On September 12, 2003, the Defendants answered the complaint and moved to dismiss it pursuant to Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim upon which relief can be granted, arguing that the complaint did not contain sufficient factual support, such as the employees' identities (APP-13-18). The Secretary filed an opposition to the motion to dismiss, arguing that the complaint met the requirements for notice pleading under Federal Rule of Civil Procedure 8(a) (APP-22-25).

    On December 19, 2003, Magistrate Judge Max O. Cogburn, Jr. issued a memorandum recommending that Defendants' motion to dismiss be denied (APP 26-29). The Defendants objected to the Magistrate's Memorandum and Recommendation (APP-30-34). On May 6, 2004, District Court Judge Lacy H. Thornburg issued a Memorandum and Order denying the Defendants' motion to dismiss without prejudice, and providing the Secretary 15 days to amend her complaint (APP-35-37).

    The Secretary filed an amended complaint on May 21, 2004, setting out in greater detail the overtime and record keeping violations alleged (APP-38-43). On June 4, 2004, the Defendants renewed their motion to dismiss, reiterating that the complaint failed to provide sufficient facts (APP-44-50). The Secretary filed an opposition to Defendants' motion and argued that the amended complaint meets the notice pleading requirement of Federal Rule of Civil Procedure 8(a) (APP-168-178).

    On August 19, 2004, the district court issued a Memorandum and Order of Dismissal of the Secretary's case for failure to state a claim upon which relief can be granted (without prejudice), pursuant to Federal Rule of Civil Procedure 12(b)(6) (APP-189-195).

    The Secretary filed a timely Notice of Appeal on October 14, 2004 (APP-196-198).

B.    Statement Of Facts

    1.    The Secretary's original complaint, in essence, alleged as follows: the district court has jurisdiction pursuant to section 17 of the FLSA, 29 U.S.C. 217, and 28 U.S.C. 1345; Defendants Rivendell Woods, Inc. ("Rivendell Woods") and Landraw I, LLC ("Landraw") are corporations doing business in Buncombe County, North Carolina; Defendants Andrea and Rodney James acted directly or indirectly in the interest of the corporations in relation to their employees, and therefore are employers within the meaning of section 3(d) of the Act, 29 U.S.C. 203(d); Defendants engaged in related activities performed either through unified operation or common control for a common business purpose, and thus constitute an enterprise within the meaning of section 3(r) of the Act, 29 U.S.C. 203(r); such enterprise operates an institution primarily engaged in the care of the sick, the aged, the mentally ill or defective who reside on the premises of such institution, and thus constitutes an enterprise engaged in commerce or in the production of goods for commerce within the meaning of section 3(s)(1)(B) of the Act, 29 U.S.C. 203(s)(1)(B) (APP-9-11).

    In two separate allegations, the Secretary's complaint stated that "since May 1, 2000," Defendants repeatedly violated the provisions of sections 7 and 15(a)(2) (overtime), as well as of sections 11(c), 15(a)(5), and 29 C.F.R. Part 516 (recordkeeping), by employing employees for more than 40 hours per workweek without compensating them for those additional hours at a rate not less than one and one-half times the regular rates at which they were employed, and by failing to make, keep, and preserve adequate and accurate records of the persons employed and of their hours and wages (APP-11). The complaint sought to enjoin the Defendants from violating the overtime and recordkeeping provisions of the Act, to restrain the withholding of payment of back wages for a period of two years prior to the filing of the complaint, [2] and to recover other appropriate relief, including interest on the back wages (APP-11-12).

    2.    The Defendants answered the complaint and admitted that the two corporate Defendants do business in Buncombe County, North Carolina, and that the two individual Defendants are shareholders and corporate officers of Rivendell Woods (APP-14). [3] They further admitted that Landraw leases property to "independent contractors" who operate family care homes, and that such homes are engaged in the care of physically or mentally disabled persons (APP-14-15). The Defendants raised eight affirmative defenses to the complaint, and moved to dismiss it pursuant to Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim upon which relief can be granted, arguing that the complaint failed to set forth any facts concerning the identities of the employees or job categories, and also that the Secretary "has misidentified independent contractors as employees." (APP-13-17).

    3.    The Secretary's Amended Complaint specified that the Defendants violated the overtime provisions of the Act with respect to employees designated as "Supervisors in Charge." (APP-40). The Secretary also added the following paragraphs regarding overtime:

Defendants provide residential care to clients in homes controlled by Defendants. Employees designated by Defendants as "Supervisors in Charge" execute a "lease" for such a home with Defendant Landraw-I, LLC, which requires that the home be operated as a residential care facility for the aged and disabled.

Employees designated by Defendants as "Supervisors in Charge" worked in the residential care facility in excess of forty hours in a workweek. Defendants compensated the employees designated as "Supervisors in Charge" based on a formula created by Defendants which did not compensate such employees at rates not less than one and one-half their regular rate for hours worked in excess of forty hours in a workweek, as required by the Act.

(APP-40)

    With respect to the recordkeeping violations, the Secretary added the following paragraph:

Defendants failed to make, keep and preserve such records, for each employee designated by Defendants as "Supervisor in Charge," including:

(1)    Regular hourly rate of pay for any workweek in which overtime compensation is due,

(2)    Hours worked each workday and total hours worked each workweek,

(3)    Total daily or weekly straight-time earnings or wages due for hours worked during the workday or workweek,

(4)    Total premium pay for overtime hours,

(5)    Total wages paid each pay period,

(6)    Date of payment and the pay period covered by payment. (APP-41).

    4.    The Defendants answered the amended complaint and admitted that Landraw "owns properties particularly suited to be operated as family care homes," and that it "leases such properties to individual lessees who independently operate family care homes." (APP-46). [4] Additionally, it was admitted by Defendants that "the Lease Agreements entered into between Defendant Landraw-I, LLC and the individual lessees provides that such properties shall be used as family care homes and not for other purposes without the permission of the lessor, Defendant Landraw-I, LLC." (APP-46). [5] The Defendants raised 11 affirmative defenses to the amended complaint, including a statute of limitations defense (APP-46-48). They also renewed their motion to dismiss, in which they reiterated the arguments made in their initial motion and stated that the complaint failed to state sufficient facts as to enterprise coverage; that the complaint did not set forth an employment relationship or identify specific employees; and that the complaint failed to allege workweeks for which back wages were claimed (APP-44-45).

    5.    During both the investigation and litigation stages of this proceeding, the Secretary provided the Defendants and their counsel with considerable information concerning the case. [6] Well before the filing of the initial complaint, the Wage and Hour investigator and the investigator's supervisor held conferences with the Defendants in which the Defendants were advised of the Secretary's position that the individuals employed as Supervisors in Charge are employees under the FLSA (APP-59-60). The Secretary's counsel also discussed the investigation findings with Defendants' counsel prior to the filing of the initial complaint (APP-60,63). The Defendants were given Wage and Hour Form 56 ("Summary of Unpaid Wages"), which identifies the known employees, the workweeks during which violations occurred with respect to each employee, and the gross amount of back wages due each employee (APP-165, 184-85). To the extent that any names were not provided to the Defendants in Wage and Hour Form 56, it was because the Secretary did not have that information (APP-61, 162-63).

    6.    The parties also engaged in discovery well before the Defendants renewed their motion to dismiss (APP-5,44-167). The Secretary responded to Defendants' interrogatories and request for production of documents, explaining why she alleged overtime and recordkeeping violations. [7] The Defendants provided incomplete answers to the Secretary's discovery requests; the Secretary therefore filed a motion to compel discovery (APP-5,51-167). [8]

C.    Decisions Below

1.    The Magistrate's Decision

    Magistrate Judge Cogburn, who had before him the Secretary's original complaint, recommended that Defendants' motion to dismiss be denied because Federal Rule of Civil Procedure 8 requires only notice pleading and complaints need not plead facts (APP 26-29). The magistrate judge stated that the Secretary's complaint identified the "time, place, and circumstances of the wrong, if not the precise employees to whom the wrong was done" (APP-28); thus, the allegations were "sufficient under Rule 8 to survive a motion to dismiss." Id. [9] To hold otherwise, the magistrate judge concluded, "would place too high a burden on Government agencies vested with the responsibility of enforcing our laws. That is, prior to bringing suit, the Government agency would not only have to identify the identity of the party violating the laws, the specific violations occurring, and the general time and place of those violations, but without discovery, the agency would also have to know the identity of each and every person who suffered injury as a result of the alleged violations. Such specificity in pleading is not only not required by Rule 8, but would seriously hamper the Government's ability effectively to enforce its laws." (APP-28).

2.    The District Court Decisions

a.    On May 6, 2004, in its Memorandum and Order, the district court stated that the Secretary's original complaint "merely parrot[s] the legal standard" and "that after a five year investigation, the Secretary should be able to allege facts instead of conclusions." (APP-36-37) (internal quotation marks omitted). The court denied the Defendants' motion to dismiss, "without prejudice to renewal" if the Secretary "fails to cure the defective complaint" within 15 days (APP-37).

b.    In its August 19, 2004 Memorandum and Order of Dismissal, which dismissed the case pursuant to Federal Rule of Civil Procedure 12(b)(6) without prejudice, the district court criticized the Secretary for not filing a more detailed complaint (APP-189-195). The district court stated that "if anyone were able to do so, [the Secretary of Labor] should be able to properly draft a complaint alleging violations of the FLSA." (APP-193). The court found the "paucity of the allegations" even more troubling since it had given the Secretary "an opportunity" to amend the complaint, and because the parties engaged in discovery for over a year (APP-193,195). In particular, the district court noted, the Secretary's motion to compel discovery included documents provided by Defendants disclosing the employees alleged not to have received overtime compensation, and these documents were provided three months prior to the filing of the amended complaint; yet, the complaint contained no reference to those individuals (APP-193-194). The court also stated that more specificity was needed because of the two-year statute of limitations -- "The Defendants, therefore, had a valid stake in obtaining greater specificity in the complaint." (APP-194).

    The district court concluded that "it is virtually impossible for Defendants to prepare a defense" based on the current allegations (APP-194). Specifically, "[i]t is unclear whether the Plaintiff claims the various Defendants were related businesses, joint or common employers, a single enterprise, related enterprises, etc. These distinctions are important to a legal determination of whether, in fact, the FLSA even applies to the Defendants." (APP-194). The court cited cases involving leasing arrangements, and noted that in Hamilton v. Tulsa County Pub. Facilities, Auth., 85 F.3d 494 (10th Cir. 1996), the Tenth Circuit held that "the entity which leased its property to others did not operate a business by virtue of the lease arrangement." (APP-194-195).

    Finally, the district court concluded that the Secretary should have identified the "alleged 'Supervisors in Charge,' the dates of their employment, the extent of control held over these individuals by the Defendants, a copy of the actual lease agreements used, etc. The undersigned finds that the Plaintiff has been given every opportunity to make a case against the Defendants but has not done so." (APP-195) (emphasis added).

SUMMARY OF ARGUMENT

    The Secretary's complaint should not have been dismissed pursuant to Federal Rule of Civil Procedure 12(b)(6), for failure to state a claim upon which relief can be granted, because it meets the standard for notice pleading under Federal Rule of Civil Procedure 8(a) -- it contains "a short and plain statement of the grounds upon which the district court's jurisdiction depends," a "short and plain statement of the claim showing that the [Secretary] is entitled to relief," and "a demand for judgment for the relief" sought (APP-38-43). The Supreme Court recently reaffirmed that Rule 8(a) requires only "simplified notice pleading." Swierkiewicz v. Sorema, N.A., 534 U.S. 506, 512-13 (2002). Such simplified notice pleading is appropriate because the parties may rely on "liberal discovery rules and summary judgment motions to define disputed facts and issues and to dispose of unmeritorious claims." Id. at 512.

    This Court interprets Swierkiewicz to mean that "a plaintiff is required to allege facts that support a claim for relief," see, e.g., Bass v. DuPont de Nemours & Co., 324 F.3d 761, 765 (4th Cir.), cert. denied, 540 U.S. 940 (2003). The Secretary's complaint in the instant case clearly alleges sufficient facts to withstand a Rule 12(b)(6) motion. Specifically, the Secretary, tracking the language of the FLSA, alleges both corporate and individual employer status as well as enterprise coverage, and specifies the overtime and recordkeeping violations. Furthermore, the complaint specifies the period for which the Secretary is actually seeking relief -- "for the period since June 11, 2001," which is two years prior to the date the complaint was filed, in accordance with 29 U.S.C. 255(a) (going back two years from the date of the complaint for nonwillful violations) (APP-40-42). Finally, although the individual employees are not named in the complaint, there is no requirement that employees be named in a section 17 FLSA complaint. Compare 29 U.S.C. 216(c) with 29 U.S.C. 217. See Equal Employment Opportunity Comm'n v. Gilbarco, Inc., 615 F.2d 985, 987 (4th Cir. 1980). Additionally, the complaint specifically identifies the employees in question as the Supervisors in Charge of the residential care facilities (APP-40-41). Defendants certainly knew, or should have known, precisely who these Supervisors in Charge were during the relevant period.

    Significantly, this Court has applied flexible pleading standards to the filing of FLSA complaints alleging minimum wage, overtime, and recordkeeping violations. In the seminal case Hodgson v. Virginia Baptist Hospital, Inc., 482 F.2d 821 (4th Cir. 1973), which has been relied upon by various other courts, this Court vacated a district court's order requiring the Secretary to amend a complaint that was drafted in similar fashion to the complaint in this case. Specifically, this Court found the complaint sufficient because it "stated the jurisdictional grounds for the claim, identified the sections of the Act that the hospital allegedly violated, described the nature of the violations, specified the period of time in which they occurred, and notified the hospital of the relief the Secretary sought." Id. at 823-24. This Court also noted that since the amendment to the Federal Rules in 1948, most courts and leading commentators have agreed that "it is error to require the Secretary to augment his complaint by a more definite statement of the facts pertaining to the violations he has charged." Id. at 824.

    In this case, the district court did not pay proper heed to the role of pleading under Rule 8(a), and thus improperly dismissed the case. The complaint clearly raises a cognizable claim under the FLSA that was "neither so vague nor so ambiguous," Virginia Baptist Hospital, 482 F.2d at 824, that Defendants could not understand the claims against them.

ARGUMENT

THE DISTRICT COURT ERRED IN DISMISSING THE SECRETARY'S AMENDED COMPLAINT WHICH CONTAINS A SHORT AND PLAIN STATEMENT OF THE CLAIM ALLEGING OVERTIME AND RECORDKEEPING VIOLATIONS OF THE FLSA IN CONFORMANCE WITH THE NOTICE PLEADING REQUIREMENT OF FEDERAL RULE OF CIVIL PROCEDURE 8(a)

A.    Standard Of Review

    A dismissal by a district court pursuant to Federal Rule of Civil Procedure 12(b)(6) is subject to de novo review. See Franks v. Ross, 313 F.3d 184, 192 (4th Cir. 2002); Revene v. Charles County Commissioners, 882 F.2d 870, 872 (4th Cir. 1989). A complaint should not be dismissed pursuant to Rule 12(b)(6) "unless after accepting all well-pleaded allegations in the plaintiff's complaint as true and drawing all reasonable factual inferences from those facts in plaintiff's favor, it appears certain that the plaintiff cannot prove any set of facts in support of his claim entitling him to relief." De'Lonta v. Angelone, 330 F. 3d 630, 633 (4th Cir. 2003) (quoting Veney v. Wyche, 293 F.3d 726, 730 (4th Cir. 2002)). See also Republican Party of North Carolina v. Martin, 980 F.2d 943, 952 (4th Cir. 1992) (a 12(b)(6) motion to dismiss "tests the sufficiency of a complaint; importantly, it does not resolve contests surrounding the facts, the merits of a claim, or the applicability of defenses"), cert. denied sub nom. Hunt v. Republican Party of North Carolina, 510 U.S. 828 (1993). Thus, this Court should review the district court's Rule 12(b)(6) dismissal in the instant case de novo, with the focus on the sufficiency of the complaint under Federal Rule of Civil Procedure 8(a).

B.    The Secretary's Amended Complaint Meets The Notice Pleading Requirement Of Federal Rule Of Civil Procedure 8(a), And Therefore Should Have Survived Defendants' Rule 12(b)(6) Motion To Dismiss For Failure To State A Claim Upon Which Relief Can Be Granted.

    1.    Rule 8 of the Federal Rules of Civil Procedure sets forth the requirements for the drafting of a sufficient complaint:

A pleading which sets forth a claim for relief . . . shall contain (1) a short and plain statement of the grounds upon which the court's jurisdiction depends . . . (2) a short and plain statement of the claim showing that the pleader is entitled to relief, and (3) a demand for judgment for the relief the pleader seeks.

Fed. R. Civ. P. 8(a).

    Recently, in Swierkiewicz v. Sorema N.A., 534 U.S. 506 (2002), the Supreme Court reaffirmed that Rule 8 requires only "simplified notice pleading" for all civil actions, with limited exceptions such as complaints involving fraud or mistake. Id. at 512-13. [10] The Court explained that Rule 8(a) is the "starting point of a simplified pleading system," and quoted its holding in Conley v. Gibson, 355 U.S. 41, 47 (1957), that the complaint "must simply 'give the defendant fair notice of what the plaintiff's claim is and the grounds upon which it rests.'" Id. at 512, 514. The "simplified notice pleading standard relies on liberal discovery rules and summary judgment motions to define disputed facts and issues and to dispose of unmeritorious claims." [11] Id. at 512. Moreover, "[t]he Federal Rules reject the approach that pleading is a game of skill in which one misstep by counsel may be decisive to the outcome and accept the principle that the purpose of pleading is to facilitate a proper decision on the merits." Swierkiewicz, 534 U.S. at 514 (quoting Conley, 355 U.S. at 48).

    This Court has interpreted Swierkiewicz to mean that, "[w]hile a plaintiff is not charged with pleading facts sufficient to prove her case, as an evidentiary matter, in her complaint, a plaintiff is required to allege facts that support a claim for relief." Bass v. DuPont de Nemours & Co., 324 F.3d 761, 765 (4th Cir.), cert. denied, 540 U.S. 940 (2003). Bass is an employment discrimination case (Title VII, Age Discrimination in Employment Act, and Equal Pay Act) in which the plaintiff alleged that she is "'an African American female who was consistently paid less than and consistently did not advance as fast as similarly situated white men,'" and that the employer engaged in various acts of harassment "'because of her race and sex,' and later 'age.'" 324 F.3d at 765 (citations omitted).

    This Court found the complaint too conclusory to state a hostile work environment claim, because the plaintiff did not include facts to show that the harassment was based on her gender, race, or age, or that the harassment was sufficiently severe or pervasive to alter the conditions of her employment and to create an abusive atmosphere. Bass, 324 F.3d at 765. "Even viewed in the light most favorable to Bass, the facts she alleges merely tell a story of a workplace dispute regarding her reassignment and some perhaps callous behavior by her superiors. They do not describe the type of severe or pervasive gender, race, or age based activity necessary to state a hostile work environment claim. Bass was required to plead facts in support of her claim, and she had failed in that regard." Id. See also Dickson v. Microsoft Corp., 309 F.3d 193, 212-13 (4th Cir. 2002), cert. denied, 539 U.S. 953 (2003) (Sherman Act antitrust complaint dismissed because the plaintiff alleged that Microsoft's agreements with Compaq and Dell individually produced anticompetitive results, but did not allege any facts demonstrating that Compaq or Dell had a sufficient share of the personal computer market to affect competition); Iodice v. United States, 289 F.3d 270 (4th Cir. 2002) (third-party negligence claim dismissed because the plaintiffs failed to state facts supporting the requisite "tight nexus" between the health care provider's activities and the ultimate harm, although this Court also stated that that deficiency would have been rectified by an allegation that when the health care provider gave the patient narcotics, it knew or should have known that the patient was under the influence of alcohol or narcotics and would shortly thereafter drive an automobile). But see Cockerham v. Stokes County Board of Education, 302 F. Supp.2d 490, 495 (M.D.N.C. 2004) ("By continuing to apply a heightened pleading standard after Swierkiewicz, the Fourth Circuit is at odds with the Supreme Court's clear pronouncement that all elements of a prima facie case need not be supported with factual pleadings in order to survive a motion to dismiss."); Radbod v. Washington Suburban Sanitary Comm'n, No. Civ. JFM-03-309, 2003 WL 21805288, at *4 n.5 (D. Md. 2003) ("The Fourth Circuit's distinction between facts sufficient to prove a case as an evidentiary matter versus facts sufficient to support a claim for relief is unclear. While the Supreme Court suggested that courts should not consider the elements of a prima facie case, the Fourth Circuit seems to have done precisely that in affirming dismissal of a hostile work environment claim in Bass. Although it is unnecessary for me to reconcile this apparent discrepancy in order to resolve the current motion, there is an apparent tension between Bass and Swierkiewicz."). [12]

    2.    In this case, the Secretary's complaint meets the notice pleading requirements of Rule 8(a), as interpreted by the Supreme Court in Swierkiewicz, as well as by this Court in Bass and in other cases decided by this Court after Swierkiewicz. Unlike in a case involving causation, paraphrasing the language of the FLSA in the complaint filed in the present case (and the Secretary assuredly did more than that) essentially provides the requisite facts, i.e., those facts needed to provide necessary notice of the claim, short of proving one's entire case. Hence, it was unnecessary for the Secretary in the instant case to plead additional facts with regard to the allegations that Defendants are employers, that they constitute an enterprise, and that they have violated the overtime and recordkeeping provisions of the Act.

    Thus, the FLSA defines "employer" as "any person acting directly or indirectly in the interest of an employer in relation to an employee." 29 U.S.C. 203(d). The complaint, after specifically identifying the corporate defendants, uses almost this exact language in alleging individual employer status (APP-38-39). It further states that Defendants "employ[ed] employees designated as 'Supervisors in Charge,'" and that "Defendants provide residential care to clients in homes controlled by Defendants." (APP-40). [13] Requiring anything more to claim employer status goes beyond notice pleading. [14]

    Similarly, the complaint, tracking the language of the FLSA at 29 U.S.C. 203(r), pleads alternatively as to why the Defendants form an "enterprise" -- they "engaged in related activities performed either through unified operation or common control for a common business purpose." (APP-39). Federal Rule of Civil Procedure Rule 8(e)(2) explicitly allows for alternative pleading. See United Roasters, Inc. v. Colgate-Palmolive Co., 649 F.2d 985, 990-91 (4th Cir.), cert. denied, 454 U.S. 1054 (1981). The complaint also tracks the enterprise coverage provision of the FLSA at 29 U.S.C. 203(s)(1)(B) in regard to a named enterprise engaged in commerce, stating that "[s]uch enterprise operates an institution primarily engaged in the care of the sick, the aged, the mentally ill or defective who reside on the premises of such institution." (APP-39-40). [15] Indeed, the complaint further specifies that "[e]mployees designated by Defendants as 'Supervisors in Charge' execute a 'lease' for such a home with Defendant Landraw-I, LLC, which requires that the home be operated as a residential care facility for the aged and disabled" (APP-40), thus again making clear that what was being alleged were violations committed by a named enterprise deemed by the Act to be an "'enterprise engaged in commerce or in the production of goods for commerce.'" 29 U.S.C. 203(s)(1) (quoting 29 U.S.C. 207(a)(1) (overtime provision)). The issue whether, ultimately, various entities form an enterprise under the Act is a complicated one that should be resolved through fact finding. See, e.g., Chao v. A-One Medical Services, Inc., 346 F.3d 908, 914-16 (9th Cir. 2003), cert. denied, 124 S. Ct. 2095 (2004); Reich v. Bay, Inc., BBI, Inc., 23 F.3d 110, 114-16 (5th Cir. 1994); Brock v. Hamad, 867 F.2d 804, 806-09 (4th Cir. 1989).

    Also, the complaint is specific as to the violations alleged -- that Defendants, by employing employees designated as "Supervisors in Charge" in excess of 40 hours per workweek, without paying them at a rate not less than time and one-half, violated the overtime requirements of the Act. The complaint identifies the provisions of the FLSA prohibiting such behavior -- 29 U.S.C. 207 and 215(a)(2) (APP-40). Additionally, the complaint sets out in detail a list of six legally required records that Defendants failed to keep. Again, the complaint specifies the recordkeeping provisions of the Act, as well as the relevant section of the regulations -- 29 U.S.C. 211(c), 215(a)(5), and 29 C.F.R. Part 516 (APP-41).

    Furthermore, the language of the FLSA itself makes clear that individuals need not be named in a section 17 complaint. Compare 29 U.S.C. 216(c) ("In determining when an action is commenced by the Secretary of Labor under this subsection for the purposes of the statutes of limitations provided in section 255(a) of this title, it shall be considered to be commenced in the case of any individual claimant on the date when the complaint is filed if he is specifically named as a party plaintiff in the complaint, or if his name did not so appear, on the subsequent date on which his name is added as a party plaintiff in such action") with 29 U.S.C. 217 (allowing the Secretary to seek both prospective and restitutionary injunctions against the employer, with no requirement to name employees). See, e.g., Equal Employment Opportunity Commission v. Gilbarco, Inc., 615 F.2d 985, 987 (4th Cir. 1980) ("We believe that a [section] 17 action is commenced for all purposes when the complaint is filed, regardless of whether the individuals are named in it."). See also cases cited infra, pp. 30-31. Of course, the Secretary made clear in her complaint that the employees in question were Supervisors in Charge; Defendants surely knew who these individuals were.

    Finally, there was no lack of specificity in regard to the time period for which the Secretary was seeking back wages. The complaint alleges the existence of overtime and recordkeeping violations "[s]ince May 1, 2000." (APP-40,41). This phrasing was precisely the same used to allege violations in Hodgson v. Virginia Baptist Hospital, Inc., 482 F.2d 821, 822 (4th Cir. 1973), where this Court found the complaint to be sufficient. Moreover, the complaint here specifically seeks to enjoin Defendants from violating the overtime and recordkeeping provisions of the FLSA and from withholding back wages "for the period since June 11, 2001." (APP-41-42). The complaint was filed on June 11, 2003; thus, the Secretary is, in the absence of willful violations, appropriately going back two years from the date the complaint was filed. See 29 U.S.C. 255(a). [16] The complaint could not be any more specific on this point. Indeed, Defendants raised a statute of limitations defense, thereby indicating that they were aware of the period for which the Secretary was claiming back wages.

    Therefore, the Secretary's amended complaint, in accordance with Federal Rule of Civil Procedure 8(a), clearly gave "fair notice" to Defendants of what was being claimed and what Defendants had to defend against. Swierkiewicz, 534 U.S. at 514.

    3.    This Court has permitted more flexible pleading in complaints filed under the FLSA, specifically in regard to claims alleging minimum wage, overtime, and recordkeeping violations. In Virginia Baptist Hospital, supra, a pre-Swierkiewicz case that was not cited by the district court below but has not been overturned, this Court vacated a district court's order requiring the Secretary to amend his complaint to include a more definite statement of the claim. [17] Significantly, the complaint was drafted in a similar fashion to the complaint in this case. It alleged that the hospital in question "had its place of business in the western district of Virginia" ; "that it engaged in interstate commerce" ; that the FLSA "conferred jurisdiction on the district court" ; and that, "since September 15, 1968, the hospital had repeatedly violated the Act by failing to pay all its employees the minimum wage required by the Act, by paying wages that discriminated on the basis of the employee's sex, by employing persons for more than forty hours a week without paying them overtime rates, by failing to keep accurate records, and by employing oppressive child labor." The complaint "identified the sections of the Act that the hospital had allegedly violated, and it requested injunctive relief." Id. at 822.

    The employer in Virginia Baptist Hospital had requested that the Secretary provide "the names of the employees paid less than the minimum wage" and, specifically, "the wages paid each of these employees; the jobs in which the hospital practiced sex discrimination, the employees in those jobs, and the wages paid to each employee; the names of the employees who did not receive overtime pay and the weeks in which these employees were entitled to overtime pay; the particular records that the hospital had failed to maintain as required by the Act; and the names of employees whose employment constituted oppressive child labor, the hours worked by each of these employees, and the particular manner in which their employment violated the Act." 482 F.2d at 822. The district court ordered the Secretary to provide the requested information. Id.

    This Court, however, ruled that the district court "misconstrued the role of pleading under the Federal Rules of Civil Procedure," and that the Secretary's complaint was sufficient under Rules 8 and 12(e). It stated that "[t]he complaint stated the jurisdictional grounds for the claim, identified the sections of the Act that the hospital had allegedly violated, described the nature of the violations, specified the period of time in which they occurred, and notified the hospital of the relief the Secretary sought." Virginia Baptist Hospital, 482 F.2d at 822, 823-24. This Court stated that the hospital in question was not without recourse; it could, pursuant to Rule 8(b), "plead that it lacked sufficient information to form a belief as to the truth of the allegations" ; "establish by affidavit its compliance with the law and move for summary judgment under Rule 56" ; or "use the discovery procedures" outlined in Federal Rules of Civil Procedure 26 to 37. Id. at 824.

    Significantly, this Court in Virginia Baptist Hospital noted that, before the Federal Rules of Civil Procedure were amended in 1948, "district courts differed over whether defendants were entitled to have the Secretary's boiler plate Fair Labor Standards Act complaint amplified by allegations of the facts," but that since that time, most courts as well as leading commentators [18] have agreed that "it is error to require the Secretary to augment his complaint by a more definite statement of the facts pertaining to the violations he has charged." 482 F.2d at 824. This Court concluded as follows:

We do not hold that requiring a limited expansion of a complaint is never appropriate under Rule 12(e), for that is a matter generally left to the district court's discretion. But when the complaint conforms to Rule 8(a) and it is neither so vague nor so ambiguous that the defendant cannot reasonably be required to answer, the district court should deny a motion for a more definite statement and require the defendant to bring the case to issue by filing a response within the time provided by the rules. Prompt resort to discovery provides adequate means for ascertaining the facts without delay in maturing the case for trial.

Id.

    Indeed, many courts have relied on Virginia Baptist Hospital to deny requests that the Secretary file a more detailed complaint. See, e.g., Marshall v. Quik-Trip Corp., 672 F.2d 801, 805 (10th Cir. 1982) (complaint need not name the employees for whom section 17 relief is sought); Donovan v. University of Texas at El Paso, 643 F.2d 1201, 1204 (5th Cir. 1981) (same); Gilbarco, 615 F.2d at 999 n.21 (Murnaghan, J., concurring and dissenting in part) ("The adequacy of the [section 17] complaint under the Federal Rules of Civil Procedure would not be brought into question by reason of failure to name the individual employees in the court papers."); Reich v. Great Lakes Collection Bureau, Inc., 176 F.R.D. 81, 84 (W.D. N.Y. 1997) (Secretary need not name employees in complaint brought pursuant to section 17); McLaughlin v. Racoon Mining Co., Inc., No. 2:87-0372, 1988 WL 156770, at *1, 2 (S.D. W.Va. 1988) (motion to dismiss boilerplate FLSA complaint denied); Donovan v. Abrams Bar B. Q. of Pinetops, Inc., No. 82-69-Civ-8, 1983 WL 2014, at *2 (E.D.N.C. 1983) (motion for a more definite statement regarding Secretary's boilerplate FLSA complaint denied); Donovan v. American Leader Newspapers, Inc., 524 F. Supp. 1144, 1146-47 (M.D. Fla. 1981) (same); Dunlop v. Oklahomans for Indian Opportunity, Inc., No. 75-0595-D, 1975 WL 275, at *1-2 (W.D. Okla. 1975) (same). [19]

4.    In the instant case, the district court based its dismissal, in part, on Second Circuit precedent regarding the Equal Pay Act ("EPA"), 29 U.S.C. 206(d) (APP-191,195). For example, in Frasier v. General Electric Co., 930 F.2d 1004 (2d Cir. 1991), the court concluded that plaintiff's EPA claim was insufficient because she alleged only that she "was not receiving equal pay for equal work." Id. at 1007-08. See also Bass v. World Wrestling Federation Entertainment, Inc., 129 F. Supp.2d 491, 503 (E.D.N.Y. 2001) (plaintiff required to "elaborate facts" to support EPA claim); Rose v. Goldman, Sachs & Co., Inc., 163 F. Supp.2d 238, 242-44 (S.D.N.Y. 2001) (assertion that plaintiff and male employees of defendant received disparate wages for substantially equal jobs under similar working conditions found to be too conclusory).

    However, these cases pre-date Swierkiewicz, and thus are dubious precedent in light of the fact that the Supreme Court in Swierkiewicz refused to uphold the dismissal of a discrimination complaint for lack of sufficient facts. And, as we have noted, an overtime claim is distinguishable from a claim of discrimination. For example, in Marshall v. ITT Continental Baking Co., Inc., No. 78 Civ. 3157-CSH, 1978 WL 1707 (S.D.N.Y. 1978), the district court denied a motion for a more definite statement regarding the Secretary's "standard form blanket [overtime] complaint." Id. at *1 (internal quotation marks omitted). [20] The court observed that, "[w]ere the complaint in this action to be viewed in isolation," it may have been inclined to grant the motion; the complaint did not provide specific information about the overtime violations (the defendant claimed that it had various complicated overtime pay arrangements in place), the defendant employed 29,000 people in at least 1500 different job classifications covered by 425 separate collective bargaining agreements, and payroll records were scattered at 682 locations throughout the country. Id. at *1. However, the Secretary's counsel submitted an affidavit stating that, prior to the filing of the complaint, the Secretary's representatives held discussions about the violations with the employer, and that after the complaint was filed, the Secretary's counsel spoke with employer's counsel and "reiterated the basis for the alleged [FLSA] violation." Id. at *2. Thus, "[d]efendant is fully appraised of the information it seeks to dislodge from plaintiff on this motion [for a more definite statement]. If it did not know before, it now knows precisely which of its pay practices is at issue, the relevant collective bargaining agreement, the category of employees allegedly underpaid, and the locus of their employment. It is th[u]s in as good a position as any litigant to frame its responsive pleading." Id. In the instant case, the Secretary similarly provided the Defendants with information concerning the underlying claim, both prior to and after the filing of the complaint. [21]

CONCLUSION

    For the reasons set forth above, the Secretary requests that this Court reverse the district court's dismissal of the case.

Respectfully submitted,

HOWARD M. RADZELY
Solicitor of Labor

STEVEN J. MANDEL
Associate Solicitor

PAUL L. FRIEDEN
Counsel for Appellate Litigation

___signed___________
CAROL B. FEINBERG
Senior Attorney

U.S. Department of Labor
200 Constitution Ave., N.W.
N 2716
Washington, D.C. 20210
(202) 693-5555

Counsel for the Secretary

STATEMENT REGARDING ORAL ARGUMENT

    The Secretary requests that oral argument be heard in this case which presents the question whether the Secretary's complaint under the FLSA was sufficient under Federal Rule of Civil Procedure 8(a) to withstand dismissal under Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim upon which relief can be granted. This issue is critical to the Secretary's ability to enforce the Act. Because of the importance of the issue, and the Secretary's unique knowledge of the enforcement process, the Secretary believes that oral argument would be helpful to this Court.

___signed___________
CAROL B. FEINBERG
Senior Attorney
U.S. Department of Labor
200 Constitution Ave., N.W.
N 2716
Washington, D.C. 20210
(202) 693-5555

CERTIFICATE OF COMPLIANCE

    Pursuant to Federal Rule of Appellate Procedure 32(a)(7)(C), I certify the following with respect to the foregoing Brief for the Secretary of Labor:

    1.    This brief complies with the type-volume limitation of Fed. R. App. P. 32(a)(7)(B) because this brief contains 8,298 words, excluding the parts of the brief exempted by Fed. R. App. P. 32(a)(7)(B)(iii).

    2.    This brief complies with the typeface requirements of Fed. R. App. P. 32(a)(5) and the type style requirements of Fed. R. App. P. 32(a)(6) because this brief has been prepared in a monospaced typeface using Microsoft Office Word 2003, with 10.5 characters per inch and Courier New 12 point type style.

Date: 1/18/05

___signed___________
CAROL B. FEINBERG
Senior Attorney

CERTIFICATE OF SERVICE

    This is to certify that copies of the foregoing Brief for the Secretary of Labor has been served to the following by overnight mail, postage prepaid, this 18th day of January 2005:

Jacqueline D. Grant, Esq.
Jackson D. Hamilton, Esq.
Robert & Stevens, P.A.
Suite 1100
BB& T Building
1 Pack Square
Asheville, N.C. 28802-7647

___signed______
Carol B. Feinberg
Senior Attorney


Footnotes

[1]    Unless otherwise indicated, all references to the complaint are to the amended complaint.

[2]    The Secretary did not allege that Defendants' violations of the Act were willful. See 29 U.S.C. 255(a) (providing for a three-year statute of limitations for willful violations, and two years otherwise).

[3]    Defendants also admitted in response to the Secretary's first set of interrogatories that Andrea and Rodney James are managing members of Landraw, and that they have a 50% ownership interest in Rivendell Woods and Landraw (APP-103-05).

[4]    Defendants also had admitted in discovery that Rivendell Woods actually employed two "Supervisors in Charge." (APP-107,140-41,147,149-50).

[5]    Defendants further admitted in the course of discovery that Rivendell Woods, under the terms of a contract, supplied transportation to clients of Landraw's "lessees," i.e., the residents of the residential care homes (APP-108-09).

[6]    The Wage and Hour Division of the Department of Labor had conducted an investigation and found overtime and recordkeeping violations regarding individuals employed as "Supervisors in Charge" at the group homes. Back wages were computed for the period of May 1, 2000 through May 6, 2002.

[7]    The Secretary's responses, however, are not part of the record because they were not the subject of any dispute.

[8]    The Defendants objected and filed for a protective order (APP-6, 179-88).

[9]    Magistrate Judge Cogburn specifically referred to Jackson v. Blue Dolphin Communications of N.C., 226 F. Supp.2d 785, 788-89 (W.D.N.C. 2002), where in the context of a Title VII and 42 U.S.C. 1981 case, Judge Thornburg stated that to survive a Rule 12(b)(6) motion "a complaint need only outline a recognized legal or equitable claim which sufficiently pinpoints the time, place, and circumstances of the alleged occurrence and which, if proven, will justify some form of relief." (Internal quotation marks omitted and emphases added.)

[10]    Swierkiewicz involves the issue of whether an employment discrimination complaint filed under Title VII of the Civil Rights Act of 1964, 42 U.S.C. 2000e, et seq., must contain specific facts establishing a prima facie case of discrimination in order to survive a motion to dismiss. The court concluded that it did not. Specifically, "Petitioner alleged that he had been terminated on account of his national origin in violation of Title VII and on account of his age in violation of the ADEA. His complaint detailed the events leading to this termination, provided relevant dates, and included the ages and nationalities of at least some of the relevant persons involved with the termination. These allegations give respondent fair notice of what petitioner's claims are and the grounds upon which they rest. In addition, they state claims upon which relief could be granted under Title VII and the ADEA." Swierkiewicz, 534 U.S. at 514 (citations omitted).

[11]    The Supreme Court also quoted 5 C. Wright & A. Miller, Federal Practice and Procedure 1202, p. 76 (2d ed. 1990):

The provisions for discovery are so flexible and the provisions for pretrial procedure and summary judgment so effective, that attempted surprise in federal practice is aborted very easily, synthetic issues detected, and the gravamen of the dispute brought frankly into the open for the inspection of the court.

Swierkiewicz, 534 U.S. at 513.

[12]    Any unpublished decisions cited in the Secretary's brief will be included in an addendum to the brief. See Local Rules 36(c) and 28(b).

[13]    The district court found the complaint deficient, in part, because it did not explain the extent of control by Defendants over the Supervisors in Charge, nor did it include a copy of the lease agreements (APP-195). Whether there is an employment relationship under the Act is a largely fact-bound issue to be determined in substantial part by whether the individual is dependent on the business as matter of economic reality, which includes, importantly, the element of control; thus, rather than being fleshed out in the complaint, this analysis should form part of the trial or summary judgment papers. See Howard v. Malcolm, 852 F.2d 101, 104-05 (4th Cir. 1988) ("Under the . . . FLSA, a person is responsible as an employer of another where the work follows the usual path of the employee; and where, as a matter of economic reality, the employee is dependent upon that person for their livelihood.") (internal quotation marks omitted); Garrett v. Phillips Mills, Inc., 721 F.2d 979, 981-82 & n.5 (4th Cir. 1983) (economic reality test applicable to remedial statutes like the FLSA). Moreover, individuals working under a lease can be employees under the FLSA. See Donovan v. Williams Oil Co., 717 F.2d 503, 504-05 (10th Cir. 1983); Marshall v. Truman Arnold Distributing Co., Inc., 640 F.2d 906, 908-09 (8th Cir. 1981); Usery v. Pilgrim Equipment Co., Inc., 527 F.2d 1308, 1315 (5th Cir.), cert. denied, 429 U.S. 826 (1976).

[14]    Cf. Fletcher v. Tidewater Builders Ass'n, Inc. 216 F.R.D. 584, 590-91 (E.D. Va. 2003) (plaintiff stated a claim under the Family and Medical Leave Act ("FMLA") by alleging that she is an "eligible employee" and that Defendant is an "employer" and "person" within the meaning of FMLA).

[15]    Complaints setting forth much less in regard to coverage than that contained in the Secretary's complaint have been deemed sufficient. See Hoy v. Progress Pattern Co., 217 F.2d 701, 703 (6th Cir. 1954) (allegation that one was employed by the employer in the production of goods for interstate commerce deemed sufficient); Burton v. Zimmerman, 131 F.2d 377, 378-79 (4th Cir. 1942) (inappropriate to dismiss complaint on basis that the complaint alleged that individuals were "engaged in interstate commerce"); Farrell v. Pike, 342 F. Supp.2d 433, 439 (M.D.N.C. 2004) ("[B]are bones allegations are acceptable for 'enterprise' coverage."); Angulo v. The Levy Co., 568 F. Supp. 1209, 1215-16 (N.D. Ill. 1983) (allegation that employer "is involved in a business in interstate commerce," "while not as factually detailed as it might be, is sufficient to survive a motion to dismiss"), aff'd sub nom. Flores v. The Levy Co., 757 F.2d 806 (7th Cir. 1985). Cf. Dutton v. Cities Service Defense Corp., 197 F.2d 458, 459-60 (8th Cir. 1952) (sufficient to allege that plaintiffs were engaged in activities compensable under the Portal-to-Portal Act by virtue of a custom); Manosky v. Bethlehem-Hingham Shipyard, Inc., 177 F.2d 529, 533 (1st Cir. 1949) (unnecessary to allege express provision of contract or custom under Portal-to-Portal Act).

[16]    Each issuance of a pay check constitutes a new cause of action for statute of limitations purposes. See Knight v. Columbus, Ga., 19 F.3d 579, 581 (11th Cir.), cert. denied, 513 U.S. 929 (1994); Nealon v. Stone, 958 F.2d 584, 591 (4th Cir. 1992).

[17]    Federal Rule of Civil Procedure 12(e) allows a party to move for a more definite statement "if a pleading to which a responsive pleading is permitted is so vague or ambiguous that a party cannot reasonably be required to frame a responsive pleading." The trial court has discretion in this matter. See Virginia Baptist Hospital, 482 F.2d at 824.

[18]    According to Wright and Miller, there are a number of factors that militate against requiring the government to amend a "blanket complaint." First, Rule 11 provides "some assurance of the bona fides of the action." Second, "[t]he possibility of amendment coupled with the broad discovery procedures permitted by the federal rules create a strong incentive to gain access to the defendant's files to ascertain whether he or she should be charged with additional violations. Thus, the net result of granting a Rule 12(e) motion simply may be an increase in the time and effort expended by the litigants in refining the pleadings, with little accomplished in terms of circumscribing the scope of discovery or defining the issues." 5C C. Wright & A. Miller, Federal Practice & Procedure 1376, pp. 316-19 (3d ed. 2004).

[19]    In Mitchell v. E-Z Way Towers, Inc. 269 F.2d 126, 129-33 (5th Cir. 1959), the Secretary refused to amend his complaint and the district court dismissed the case pursuant to Rule 12(b)(6). The Fifth Circuit reversed, concluding that it also was error to require the Secretary to amend the complaint for purposes of providing a more definite statement under Federal Rule of Civil Procedure 12(e). The employer had contended that the complaint failed to allege in "reasonable detail" the violations charged, and asked that the complaint be amended to include the specific weeks during which the violations occurred, employee names and the nature of their work, and in what respect recordkeeping was inadequate. In the words of the Fifth Circuit, "In view of the great liberality of F. R. Civ. P. 8, permitting notice pleading, it is clearly the policy of the Rules that Rule 12(e) should not be used to frustrate this policy by lightly requiring a plaintiff to amend his complaint which under Rule 8 is sufficient to withstand a motion to dismiss." E-Z Way Towers, 269 F.2d at 132. See also Shultz v. Clay Transfer Co., 50 F.R.D. 480, 481 (E.D.N.C. 1970) (relying on E-Z Way Towers, Inc., the district court stated that "[a] complaint is sufficient to withstand a motion for a more definite statement if it gives notice sufficient to enable the parties to form a response. It is not to be used to assist in getting facts in preparation for trial as such; other rules relating to discovery, interrogatories and the like exist for such purposes").

[20]    The court cited Virginia Baptist Hospital, 482 F.2d at 824, and stated that caselaw prior to the 1948 amendment of the Federal Rules of Civil Procedure generally disfavors the Secretary's blanket FLSA complaint, but that the majority of recent cases reach an opposite conclusion. See ITT Continental Baking Co., Inc., 1978 WL 1707, at *1 n.3.

[21]    Indeed, courts disfavor dismissal or amendment when the requested information is in the defendants' possession. See, e.g., E-Z Way Towers, Inc., 269 F.2d at 132; DGM Investments, Inc. v. New York Futures Exchange, Inc., 265 F. Supp.2d 254, 264 (S.D.N.Y. 2003); Blizzard v. Dalton, 876 F. Supp. 95, 100 (E.D. Va. 1995); Shultz v. Manor House of Madison, Inc., 51 F.R.D. 16, 17-18 (W.D. Wis. 1970); Tobin v. David Witherspoon, Inc., 14 F.R.D. 148, 149 (E.D. Tenn. 1953).