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Rueling v. Mobit LLC

United States District Court, D. Arizona

November 19, 2018

Kristina Rueling, Plaintiff,
v.
MOBIT LLC, et al., Defendants.

          ORDER

          BRIDGET S. BADE UNITED STATES MAGISTRATE JUDGE

         Plaintiff Kristina Rueling has filed a “Motion for Attorneys' Fees and Costs.” (Doc. 25.) Defendants MOBIT LLC and James Koch (“Defendants”) have filed an “Opposition to Plaintiff's Motion for Attorneys' Fees and Costs and Cross-Motion for Attorneys' Fees.” (Doc. 26.) The motions are fully briefed. (Docs. 27, 28.) As set forth below, the Court denies Plaintiff's and Defendants' motions.

         I. Background

         In her complaint, Plaintiff asserted claims for failure to pay minimum wages under the Fair Labor Standards Act (“FLSA”), 29 U.S.C. §§ 201-219, and failure to make timely payment of wages under the Arizona Wage Act, Ariz. Rev. Stat. §§ 23-351, 23-353, and 23-355. (Doc. 1.) Plaintiff sought to recover unpaid minimum wage compensation, liquidated damages, and statutory penalties for Defendants' alleged violations of the FLSA (id. at ¶ 2), as well as unpaid wages, treble damages, and statutory penalties for Defendants' alleged violations of the Arizona Wage Act. (Id. at ¶ 3.)

         In response, Defendants filed a motion to dismiss for lack of subject matter jurisdiction. (Doc. 10.) Defendants argued that Plaintiff's FLSA minimum wage claim was moot because a non-party, MOBIT Technologies Ltd., the New Zealand company that had contracted with Plaintiff, had wired $5, 000 to Plaintiff's bank account. (Id. at 2.) Defendants asserted that this amount covered the wages allegedly owed to Plaintiff under her contract, plus an additional sum. (Id., Ex. 1 at ¶ 8.)

         The Court found that Plaintiff's minimum wage claim under the FLSA was moot because Plaintiff “ha[d] been fully compensated for all possible damages under the FLSA.” (Doc. 23 at 10.) Therefore, the Court granted Defendants' motion to dismiss Plaintiff's FLSA claim. The Court declined to exercise supplemental jurisdiction over Plaintiff's claim under the Arizona Wage Act and dismissed this matter in its entirety. (Id. at 9-10.)

         II. Plaintiff's Motion for Attorney's Fees

         In her motion for attorney's fees, Plaintiff argues that she is the prevailing party on her FLSA minimum wage claim, even though she did not obtain a favorable judgment, and therefore she is entitled to an award of attorney's fees. (Doc. 25 at 2-3.) In their response to Plaintiff's motion, Defendants argue that they are not Plaintiff's employers and therefore she has named the wrong parties as defendants. (Doc. 26 at 3.) In her reply, Plaintiff argues that Defendants have waived this argument because they did not move to dismiss her claims on this basis. (Doc. 27 at 2.) Finally, Plaintiff argues that the Defendants are liable for her FLSA minimum wage claims because they were “joint employers” with non-parties MOBIT Technologies, Ltd. and Sean McDonald. (Id.) The Court considers these arguments below.

         A. Plaintiff's Status as Prevailing Party Without a Favorable Judgment

          In her motion for attorney's fees, Plaintiff asserts that she is the prevailing party on her FLSA minimum wage claim and therefore she is entitled to an award of attorney's fees and costs under 29 U.S.C. § 216(b). (Doc. 25 at 2-3.) Relying on Orozco v. Borenstein, Plaintiff asserts that although she did not obtain a judgment in her favor, she prevailed on her FLSA claims because the lawsuit she filed caused Defendants to pay the alleged unpaid wages. (Id. at 3 (citing Orozco v. Borenstein, 2013 WL 4543836, at *2 (D. Ariz. Aug. 18, 2013)).) In Orozco, the court dismissed the plaintiff's FLSA minimum wage claim as moot after the defendant paid the unpaid wages and liquidated damages. Orozco, 2013 WL 4543836, at *2. The court held that even though plaintiff did not obtain a favorable judgment on his FLSA minimum wage claim, he was the prevailing party and entitled to attorney's fees because the filing of the lawsuit caused defendants to pay the unpaid wages. Id. In Orozco, the court addressed circumstances that are similar to this case. In both cases, after filing suit, but before a favorable judgment or settlement, the plaintiffs received full compensation for their claims and their claims were dismissed as moot. Thus, the court's decision in Orozco supports Plaintiff's argument that, in some circumstances, a favorable judgment is not required for an award of attorney's fees under the FLSA.

         The Orozco decision, however, does not address the issue presented in this case- whether Defendants were Plaintiff's employer and thus can be liable for her FLSA wage claims or attorney's fees. In Orozco, the defendants filed an answer and admitted that they employed the plaintiff, that they were an enterprise engaged in commerce with an annual gross volume of sales or business of not less than $500, 000, and that they were an employer. Orozco v. Borenstein, et al, CV 11-2305-PHX-FJM, Doc. 11 at ¶¶ 1, 15, and 16. In contrast, in this case Defendants have consistently asserted that they are not Plaintiff's employer. Therefore, the Court concludes that Plaintiff's reliance on Orozco to support her claim for attorney's fees is misplaced.

         In their response to Plaintiff's motion for attorney's fees, Defendants argue that Plaintiff did not prevail on her FLSA claim because the Court granted Defendants' motion to dismiss and entered judgment in their favor.[1] (Doc. 26 at 4.) The Court, however, does not address the parties' arguments on whether Plaintiff should be considered the prevailing party in the absence of a favorable judgment. Instead, as set forth below, the Court concludes that Plaintiff did not establish an essential element of her FLSA claim-that Defendants were her employers-and therefore she did not establish their liability under the FLSA for damages or attorney's fees.

         B. Defendants Did Not Waive Defenses to Merits of Plaintiff's Claims

          Plaintiff argues that Defendants waived any argument that they were not her employers because they did not move to dismiss the complaint on this basis. (Doc. 27 at 2.) Plaintiff argues that Defendants should have asserted that they were not her employer “in the pre-judgment phase of this lawsuit.” (Id.) Plaintiff does not provide any support for her suggestion that a defendant who files a motion to dismiss ...


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