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Acosta v. Madeira Restaurant Inc.

United States District Court, D. Rhode Island

July 15, 2019

R. ALEXANDER ACOSTA, Secretary of Labor, United States Department of Labor, Plaintiff,
v.
MADEIRA RESTAURANT INC. d/b/a MADEIRA RESTAURANT, THE WATERFRONT RESTAURANT AND LOUNGE INC. d/b/a AL'S WATERFRONT RESTAUARANT & MARINA, and ALBERTINO MILHO, DAVID MILHO, and KAREN DASILVA, Individually, Defendants.

          MEMORANDUM AND ORDER

          JOHN J. McCONNELL, JR., UNITED STATES DISTRICT JUDGE.

         This is an action under the Fair Labor Standards Act ("FSLA") brought by Plaintiff R. Alexander Acosta, Secretary of Labor of the United States Department of Labor ("the Secretary of Labor") against Madeira Restaurant Inc. and The Waterfront Restaurant and Lounge Inc. d/b/a Al's Waterfront Restaurant & Marina[1] (all Defendants collectively "Madeira Restaurant"). By answer, Madeira Restaurant asserts two counterclaims under the Federal Tort Claims Act ("FTCA"), 28 U.S.C. §§ 1346(b), 2671-2680, and the Equal Access to Justice Act ("EAJA") against the Secretary of Labor. The United States, on behalf of the Secretary of Labor, moves to dismiss Madeira Restaurant's counterclaims pursuant to Federal Rules of Civil Procedure 12(b)(1) and 12(b)(6). ECF No. 12. For the following reasons, the Court GRANTS the Secretary of Labor's Motion to Dismiss Madeira Restaurant's two counterclaims.

         I. BACKGROUND

         The Secretary of Labor's complaint alleges that Madeira Restaurant violated the FLSA by failing to compensate properly eleven employees for overtime hours worked. The Secretary of Labor also alleges that Madeira Restaurant violated the FLSA by failing to "make, keep, and preserve adequate and accurate records" related to employees' wages and hours. ECF No, 1 at 10. The alleged violations were discovered during an investigation by the Secretary of Labor that examined Madeira Restaurant's employment practices from October 31, 2015 to October 28, 2017. The Secretary of Labor sought monetary relief of $45, 130.77 for unpaid wages and an equal amount in liquidated damages for a total of $90, 261.54.

         Upon completion of the investigation and filing of the complaint, the Secretary of Labor issued the following statement in a press release: "The defendants knew what the FLSA required of them yet intentionally disregarded or violated those requirements. In doing so, they not only deprived their employees of their hard- earned wages, they also undercut those competitors who chose to obey the law." ECF No. 9 at 4.

         Madeira Restaurant responded by bringing the counterclaims that are at issue here, seeking damages under the FTCA, for harm caused by the "false or misleading" press release that "intentionally or negligently" damaged the business as well as reimbursement of legal fees and costs under the EAJA. Id., The Secretary of Labor has moved to dismiss the FTCA claim for lack of subject matter jurisdiction and to dismiss the EAJA claim for failure to state a claim upon which relief can be granted.

         II. APPLICABLE LEGAL STANDARDS

         A defendant may move for relief asserting lack of subject matter jurisdiction under Federal Rule of Civil Procedure 12(b)(1). Fed.R.Civ.P. l2(b)(1). Subject matter jurisdiction is "never presumed." Viqueira v. First Bank, 140 F.3d 12, 16 (1st Cir. 1998). If a party invokes subject matter jurisdiction, it must show by a preponderance of the evidence that jurisdiction is proper. Padilla-Mangual v. Pavia Hosp., 516 F.3d 29, 31 (1st Cir. 2008). The Court may look to materials beyond the pleadings when deciding on a Rule l2(b)(1) motion. Gonzalez v. United States, 284 F.3d 281, 288 (1st Cir. 2002).

         A complaint can also be dismissed under Federal Rule of Civil Procedure 12(b)(6) where it fails to state a claim upon which relief can be granted. Fed.R.Civ.P. 12(b)(6). To survive a motion for dismissal under Rule 12(b)(6), the complaint must contain enough facts "to state a claim to relief that is plausible on its face." Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007). A claim that is simply conceivable is not enough. Id. For a claim to be "facially plausible," the factual allegations, accepted as true, must provide a "reasonable inference that the defendant is liable for the misconduct alleged." Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). The Court must accept as true only factual allegations, and not legal conclusions. Id.

         III. DISCUSSION

         A. Madeira Restaurant's Claim Under the FTCA

         As a longstanding principle, the United States, as sovereign, "is immune from suit save as it consents to be sued ... and the terms of its consent to be sued in any court define that court's jurisdiction to entertain the suit." United States v. Sherwood, 312 U.S. 584, 586 (1941), When the Government waives sovereign immunity, "limitations and conditions upon which the Government consents to be sued must be strictly observed and exceptions thereto are not to be implied." Soriano v. United States, 352 U.S. 270, 276 (1957).

         In some circumstances, the United States consents to be sued under the FTCA. "The FTCA provides a 'carefully limited waiver' of the federal government's sovereign immunity for certain claims alleging harm caused by United States employees or agents." Carroll v. United States, 661 F.3d 87, 93 (1st Cir. 2011) (quoting Bolduc v. United States, 402 F.3d 50, 62 (1st Cir. 2005)). More precisely, the FTCA grants district courts jurisdiction in civil suits against the United States for:

[I]njury or loss of property ... caused by the negligent or wrongful act or omission of any employee of the Government while acting within the scope of his office or employment, under circumstances where the United States, if a private person, would be liable to the claimant in ...

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