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Fochtman v. Darp, Inc.

United States District Court, W.D. Arkansas, Fayetteville Division

June 27, 2018

MARK FOCHTMAN; CORBY SHUMATE; MICHAEL SPEARS; ANDREW DANIEL; FABIAN AGUILAR; and SLOAN SIMMS Individually, and on Behalf of All Others Similarly Situated PLAINTIFFS
v.
DARP, INC.; HENDREN PLASTICS, INC.; and JOHN DOES 1-29 DEFENDANTS

          MEMORANDUM OPINION AND ORDER

          Timothy L. Brooks, Judge

         Now pending before the Court are a Motion to Dismiss (Doc. 13), a Brief in Support (Doc. 14), and a Reply in Support (Doc. 25) filed by Defendant DARP, Inc. ("DARP"), as well as a Motion to Dismiss (Doc. 15) and a Brief in Support (Doc. 16) filed by separate Defendant Hendren Plastics, Inc. ("Hendren"). Also before the Court are Plaintiffs' Oppositions to the Motions to Dismiss (Doc. 17, 18). For the reasons explained herein, Defendants' Motions are GRANTED IN PART AND DENIED IN PART.

         I. BACKGROUND

         This case is a putative class action, originally filed in Benton County, Arkansas Circuit Court on October 23, 2017, and removed to this Court on November 6, 2017, as Case Number 5:17-CV-05228, Mark Fochtman and Shane O'Neal v. CAAIR, Inc., Simmons Foods, Inc, DARP, Inc., and Hendren Plastics, Inc. ("Fochtman f). This Court found jurisdiction is proper under the Class Action Fairness Act, and denied Defendants' motions to remand on February 27, 2018 (Doc. 2). The instant case was severed from Fochtman I on February 27, 2018. See Case Number 5:17-CV-05228, Doc. 97.

         Plaintiffs filed the instant Complaint on March 9, 2018, and alleged violations of the Minimum Wage Act of the State of Arl<ansas ("AIVIWA") (Counts I and II), the Slavery Clause of the Arkansas Constitution (Count III), and the Arkansas Human Trafficking Act of 2013 (Count IV). (Doc. 1). The claims arise from Plaintiffs' drug-court ordered participation in DARP's substance abuse recovery program, where DARP required Plaintiffs to work in Defendant Hendren's plastics plant.

         DARP filed a Motion to Dismiss all counts pursuant to Federal Rule of Civil Procedure 12(b)(6) (Doc. 13), and Hendren filed a Motion to Dismiss pursuant to Rules 12(b)(6) and (7) (Doc. 15). Regarding the alleged AMWA violations in Counts I and II, both Defendants DARP and Hendren argue that Plaintiffs fail to state a claim because no employee-employer relationship existed. Defendants assert that Plaintiffs did not expect to receive compensation for their labor because they were criminal defendants who voluntarily and knowingly chose to participate in DARP where work was an essential program component. In the alternative, Hendren argues that it did not violate the AMWA because it paid DARP directly for the hours Plaintiffs worked, including overtime.

         Regarding the allegations of slavery/involuntary servitude and human trafficking in Counts III and IV, first, both Defendants DARP and Hendren argue that Plaintiffs fail to state valid claims because they entered DARP voluntarily, and they were free to leave the program at any time. Second, Defendants also similarly argue that if Plaintiffs received any alleged threats of incarceration while living at DARP and working for Hendren, such were permissible reminders about the possible future consequences of quitting the program. Third, both Defendants argue that Plaintiffs have not alleged sufficient facts to show that DARP or its agents made statements that constitute coercion, duress, or menace and rise to the level of slavery/involuntary servitude. Fourth, both Defendants argue that Plaintiffs participated in DARP as part of the punishment for a crime they had committed, and the Arkansas Constitution's Slavery Clause expressly exempts criminal punishment from its proscription on slavery/involuntary servitude.

         Hendren offers three additional arguments regarding the slavery/involuntary servitude and human trafficking allegations. First, Hendren argues that the Arkansas Constitution does not provide for a private cause of action to remedy a violation of the Slavery Clause. Next, Hendren argues that the Complaint should be dismissed because the States of Arkansas and Oklahoma are indispensable parties under Rule 19, and sovereign immunity prevents their joinder. Finally, Hendren argues that the slavery/involuntary servitude and human trafficking claims should be dismissed because they are impermissible collateral attacks on sentences.

         II. LEGAL STANDARD

         To survive a motion to dismiss, a pleading must contain "a short and plain statement of the claim showing that the pleader is entitled to relief." Fed.R.Civ.P. 8(a)(2). The purpose of this requirement is to "give the defendant fair notice of what the . . . claim is and the grounds upon which it rests." Erickson v. Pardus, 551 U.S. 89, 93 (2007) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007)). The Court must accept all of a complaint's factual allegations as true, and construe them in the light most favorable to the plaintiff, drawing all reasonable inferences in the plaintiff's favor. See Ashley Cnty., Ark. v. Pfizer, Inc., 552 F.3d 659, 665 (8th Cir. 2009).

         However, the complaint "must contain sufficient factual matter, accepted as true, to 'state a claim to relief that is plausible on its face.'" Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Twombly, 550 U.S. at 570). "A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Id. "A pleading that offers 'labels and conclusions' or 'a formulaic recitation of the elements of a cause of action will not do.' Nor does a complaint suffice if it tenders 'naked assertion[s]' devoid of 'further factual enhancement.'" Id. In other words, while "the pleading standard that Rule 8 announces does not require 'detailed factual allegations,' ... it demands more than an unadorned, the defendant-unlawfully-harmed-me accusation." Id.

         III. DISCUSSION

         A. Counts I and II: AMWA Violations

         The critical issue in the first two Counts of Plaintiffs' Complaint is whether Plaintiffs state a plausible claim that they were Defendants' employees. To determine if an employment relationship exists under Arkansas law, courts initially turn to the text of the AMWA, which uses language identical to that of the Fair Labor Standards Act ("FLSA") to define an "employee," "an employer," and "to employ." Compare Ark. Code Ann. § 11-4-203 with 29 U.S.C. § 203 (both defining "employee" as "any individual employed by an employer"; "employer" as anyone "acting directly or indirectly in the interest of an employer in relation to an employee"; and "to employ" as "to suffer or to permit to work"). Arkansas Administrative Code 010.14.1-112 provides that the Arkansas Department of Labor may rely upon federal precedent established by the FLSA in interpreting the AMWA, and courts regularly use federal FLSA precedent to interpret the AMWA. See Karlson v. Action Process Serv. & Private Investigation, LLC, 860 F.3d 1089, 1092 n.3 (8th Cir. 2017); Harris v. Express Courier Int'l, 2017 WL 5606751, at M (W.D. Ark. Nov. 21, 2017).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Supreme Court has instructed courts to broadly interpret the meaning of "employee" under the FLSA. See Nationwide Mut. Ins. Co. v. Darden,503 U.S. 318, 326 (1992); see also Ark. Code Ann. &sect; 11-4-204 (stating that the AMWA should be "liberally construed In favor of its purpose"). Furthermore, under the FLSA, the test for employment is one of "economic reality." Ash v. Anderson Merchandisers, LLC,799 F.3d 957, 961 (8th Cir. 2015) (citing Tony & Susan Alamo Found, v. Sec&#39;y of Labor,471 U.S. 290, 301 (1985)). Under the economic reality test, courts look at the total circumstances of the economic relationship between the parties, including such factors as the "alleged employers' right to control the nature and quality of their work, the employers' right to hire, or fire, or the source of ...


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