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Kinne v. IMED Health Products, LLC

United States District Court, S.D. Florida

July 3, 2019

Thomas Kinne, Plaintiff,
IMED Health Products, LLC, and Christopher McCall, Defendants.


          Robert N. Scola, Jr., United States District Judge.

         Plaintiff Thomas Kinne has filed suit, seeking relief for unpaid overtime wages and the willful filing of fraudulent information returns by IMED Health Products, LLC (“IMED”) and Christopher McCall (together, “Defendants”). In response, the Defendants submit Kinne's complaint should be dismissed for its failure to state a claim under the Fair Labor Standards Act (FLSA) and 26 U.S.C § 7434. (Def.'s Mot., ECF No. 14.) After careful analysis, the Court mostly disagrees with the Defendants and finds Kinne has indeed stated a claim for relief under both the FLSA and 26 U.S.C. § 7434. The Court agrees with the Defendants, however, that Kinne has not sufficiently alleged individual coverage under the FLSA. The Court therefore denies the Defendants' motion in large part but grants it with respect to Kinne's allegations as to individual coverage. (ECF No. 14.)

         1. Background[1]

         Kinne worked for Dependable Healthcare, a wholesales medical supplies company owned by IMED, where he provided marketing, sales, and delivery services. (Compl. at ¶¶ 5, 7, ECF No. 1.) Kinne worked approximately 50 hours per week from July 2015 to January 2018, excluding April through mid-July 2017. (Id. at ¶ 22.) However, Kinne did not receive overtime pay. (Id. at ¶ 19.) Kinne's salary was supposed to have been $500 per week plus commissions; the Defendants, however, never paid him the commissions. (Id. at ¶ 23.) The Defendants controlled the manner and scope of Kinne's employment. (Id. at ¶ 28.) Initially, the Defendants classified Kinne as an employee and provided him a W-2. (Id. at ¶¶ 17-18.) Beginning in mid-2016, however, the Defendants issued Kinne a Form 1099 and identified him as an independent contractor. (Id. at ¶ 37.) The amount listed on the 2017 Form 1099-$22, 900-did not reflect the amount paid to Kinne during that year-$13, 800. (Id. at ¶ 38.)

         McCall is the owner and operator of IMED and has operational control of IMED's functions: hiring and firing employees, setting wages, retaining time and/or wage records, supervising and controlling Kinne's work, and the power to stop any illegal pay practices. (Id. at ¶¶ 8-10.) At all times relevant to this dispute, IMED's gross revenue exceeded $500, 000. (Id. at ¶ 14.)

         2. Legal Standard

         A court considering a motion to dismiss, filed under Federal Rule of Civil Procedure 12(b)(6), must accept all allegations in the complaint as true, construing them in the light most favorable to the plaintiff. Pielage v. McConnell, 516 F.3d 1282, 1284 (11th Cir. 2008). Although a pleading need only contain a short and plain statement of the claim showing that the pleader is entitled to relief, a plaintiff must nevertheless articulate “enough facts to state a claim to relief that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). Faced with a motion to dismiss, a court should therefore “1) eliminate any allegations in the complaint that are merely legal conclusions; and 2) where there are well-pleaded factual allegations, ‘assume their accuracy and then determine whether they plausibly give rise to an entitlement to relief.'” Am. Dental Ass'n. v. Cigna Corp., 605 F.3d 1283, 1290 (11th Cir. 2010) (quoting Ashcroft v. Iqbal, 556 U.S. 662, 662 (2009)).

         3. Kinne sufficiently pleads a cause of action under the FLSA.

         The FLSA requires an employer to pay its employee “an overtime wage of one and one-half times his regular rate for all hours he works in excess of forty hours per week.” See Josendis v. Wall to Wall Residence Repairs, Inc., 662 F.3d 1292, 1298 (11th Cir. 2011); see also 26 U.S.C. § 207(a). “If a covered employee is not paid the statutory wage, the FLSA creates for that employee a private cause of action against his employer for the recovery of unpaid overtime wages and back pay.” Josendis, 662 F.3d at 1298; see also 26 U.S.C. § 216(b). “In order to be eligible for FLSA overtime, however, an employee must first demonstrate that he is ‘covered' by the FLSA.” Josendis, 662 F.3d at 1298. This requires a showing that the jurisdictional prerequisite of “interstate commerce” exists in a given case, a showing that may be made by establishing “individual coverage” or “enterprise coverage.” Id. Here, the court finds that the complaint alleges only enterprise coverage.

         A. Kinne does not sufficiently allege individual coverage under the FLSA.

         To assert individual coverage, an employee must show that “he is directly and regularly ‘engaged in' interstate commerce.” Id. (emphasis in original) (citing Thorne v. All Restoration Servs. Inc., 448 F.3d 1264, 1266 (11th Cir. 2006)). Thus, an employee must allege that he was “directly participating in the actual movement of persons or things in interstate commerce by (i) working for an instrumentality of interstate commerce, e.g., transportation or communication industry employees, or (ii) by regularly using the instrumentalities of interstate commerce in his work, e.g., regular and recurrent use of interstate telephone, telegraph, mails, or travel.” Id. (citations omitted).

         Here, Kinne alleges that his work for the Defendants included “marketing, sales, and deliveries.” (Compl. at ¶ 5.) Although, Kinne contends that the Court can infer this means Kinne made and received interstate telephone calls, it is not enough for the Court to find that Kinne directly participated in the actual movement of persons or things in interstate commerce on a recurrent basis. See Curry v. High Springs Family Practice & Diagnosis Center, Inc., No. 1:08-cv-0008-MP-AK, 2009 WL 3163221, at *3-4 (N.D. Fla. Sept. 30, 2009) (holding that a plaintiff was not engaged in commerce under the FLSA because her communication with out-of-state insurers, which occurred two or three times per week, “did not rise to the level of regular activities in interstate commerce”). Although a plaintiff “need not do much” to plead individual or enterprise coverage, this Court has held that a plaintiff fails to adequately plead individual coverage where the plaintiff does not allege specific facts concerning the nature of the plaintiff's work and whether the work involved a connection to interstate commerce. Ceant v. Aventura Limousine & Transp. Serv., Inc., 874 F.Supp.2d 1373, 1377 (S.D. Fla. 2012) (Scola, J.); see also Perez v. Muab, Inc., No. 10-62441, 2011 WL 845818, at *3 (S.D. Fla. Mar. 7, 2011) (Cohn, J.) (mere recitation of the statutory language that an individual was engaged in commerce is insufficient to allege individual coverage). The Court agrees with the Defendants that Kinne's allegations relating to individual coverage are too conclusory to state a claim. The Court therefore dismisses, without prejudice, Kinne's claim to the extent he claims individual coverage under the FLSA.

         B. Kinne alleges enterprise coverage under the FLSA.

         An employee may assert “enterprise coverage” if his employer (1) has employees engaged in interstate commerce or in the production of goods for interstate commerce, or employees who handle, sell, or otherwise work on goods or materials that have been moved in, or produced for, interstate commerce by any person, and (2) has gross volume sales or business of at least $500, 000 annually. 26 U.S.C. § 203(s)(1)(A). “To satisfy the first prong, [a] [p]laintiff must demonstrate that, on a regular and recurrent basis, at least two of [the] [d]efendants' employees engaged in commerce or handled goods and material that have been moved in commerce.” Williams v. Signature Pools & Spas, Inc., 615 F.Supp.2d 1374, 1378 (S.D. Fla. 2009) (Ungaro, J.). Tools used by a company's ...

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