Pruell v. Caritas Christi

United States Court of Appeals
For the First Circuit

No. 11-1929

ASHLEIGH PRUELL, on behalf of herself and all other employees
similarly situated; AMY GORDON, on behalf of herself and all
other employees similarly situated,

Plaintiffs, Appellants,

v.

CARITAS CHRISTI; CARITAS CHRISTI NETWORK SERVICES; CARITAS GOOD
SAMARITAN MEDICAL CENTER, INC.; CARITAS NORWOOD HOSPITAL, INC.;
CARITAS SOUTHWOOD HOSPITAL, INC.; CARITAS ST. JOHN OF GOD
HOSPITAL, INC.; SAINT ANNE'S HOSPITAL CORPORATION; RALPH DE LA
TORRE, M.D.; RICHARD KROPP; CARITAS CARNEY HOSPITAL, INC.;
CARITAS HOLY FAMILY HOSPITAL, INC.; CARITAS ST. ELIZABETH'S
MEDICAL CENTER OF BOSTON, INC.; CARITAS CHRISTI RETIREMENT PLAN,

Defendants, Appellees.

APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MASSACHUSETTS

[Hon. George A. O'Toole, Jr., U.S. District Judge]

Before
Boudin, Lipez and Thompson,
Circuit Judges.

Guy A. Talia with whom Patrick J. Solomon, Thomas & Solomon
LLP and Dwyer & Collora, LLP were on brief for appellants.
Barry J. Miller with whom Richard L. Alfred, Jessica M.
Schauer and Seyfarth Shaw LLP were on brief for appellees.

April 18, 2012
 BOUDIN, Circuit Judge. In September 2009, plaintiffs

Ashleigh Pruell and Amy Gordon filed suit in the district court in

Massachusetts against hospitals and health care providers in the

Caritas Christi hospital network ("Caritas"), as well as two

hospital executives.1 Pruell and Gordon complained of systematic

under-compensation--in particular, a failure to compensate them for

work performed during their meal break, for work performed before

and after shifts, and for time spent attending training sessions.

The complaint set forth several claims under federal law:

specifically, that Caritas

-violated the minimum wage and overtime
provisions of the Fair Labor Standards Act
("FLSA"), 29 U.S.C. §§ 206-207 (2006);

-failed to keep accurate records and to credit
all hours worked in violation of the Employee
Retirement Income Security Act ("ERISA"), 29
U.S.C. §§ 1059(a)(1), 1104(a)(1); and

-engaged in a pattern of mail fraud by sending
misleading payroll checks, in violation of the
Racketeer Influenced and Corrupt Organizations
Act ("RICO"), 18 U.S.C. § 1962, 1964(c).

Plaintiffs purport to represent a large class of Caritas employees;

the FLSA claim was brought under that statute's "collective action"

1
At the same time, Pruell and Gordon filed a companion suit in
Massachusetts state court, asserting similar claims against the
same defendants based on state law. That case was removed to
district court and thereafter dismissed. On appeal, the case was
remanded to determine whether it had properly been removed, Pruell
v. Caritas Christi, 645 F.3d 81 (1st Cir. 2011), and it remains
pending in the district court.

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provision, 29 U.S.C. § 216(b), rather than as a class action, but

that distinction makes no difference here.

In January 2010, Caritas moved to dismiss plaintiffs'

original complaint. The FLSA guarantees covered employees a

minimum wage of $7.25 an hour, 29 U.S.C. § 206(a), and payment of

one-and-one-half times their regular rate for hours worked in

excess of forty in any workweek, id. § 207(a)(1). The district

court held that the FLSA claim was deficiently pled, Pruell v.

Caritas Christi, No. 09-11466, 2010 WL 3789318 (D. Mass. Sept. 27,

2010), and that this was fatal to the complaint because the ERISA

and RICO claims are derivative of the FLSA claim.

The reasoning was straightforward. To state a valid FLSA

claim, plaintiffs had to allege (1) that they were employed by

Caritas; (2) that their work involved interstate activity; and (3)

that they performed work for which they were under-compensated. 29

U.S.C. §§ 206(a), 207(a)(1). The district court found insufficient

the allegation of the last element, given the lack of any

information on plaintiffs' approximate weekly wages and hours

worked, or even an allegation that they had worked in excess of

forty hours in any workweek. The court granted plaintiffs leave to

amend the complaint. Pruell, 2010 WL 3789318 at *3-*5.

In October 2010, plaintiffs filed their amended

complaint, adding only the general allegation that the named

plaintiffs and the 12,000 putative class members "regularly worked"

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over 40 hours a week and were not compensated for such time. In

June 2011, on Caritas' renewed motion, the district court found

that the FSLA claim remained deficient; it said also that the

allegation of employment--providing no information about the named

plaintiffs' specific employer or positions--was too vague. Pruell

v. Caritas Christi, No. 09-11466 (D. Mass. July 13, 2011).

The district court this time refused to permit further

amendment and dismissed the complaint with prejudice. The

plaintiffs now appeal. Review of the district court's dismissal of

the claims is de novo, Estate of Bennett v. Wainwright, 548 F.3d

155, 162-63 (1st Cir. 2008), and the denial of leave to amend

further is reviewed for abuse of discretion, Universal Commc'n

Sys., Inc. v. Lycos, Inc., 478 F.3d 413, 418 (1st Cir. 2007).

The need for pleading specificity in federal complaints

has been somewhat unsettled since the Supreme Court's decisions in

Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007) and Ashcroft v.

Iqbal, 129 S. Ct. 1937 (2009). The Federal Rules of Civil

Procedure have long provided for "notice pleading," requiring a

"short and plain statement of the claim showing that the pleader is

entitled to relief," Fed. R. Civ. P. 8(a)(2), but the Supreme Court

also made clear in Twombly that

Rule 8(a)(2) still requires a "showing,"
rather than a blanket assertion, of
entitlement to relief. Without some factual
allegation in the complaint, it is hard to see
how a claimant could satisfy the requirement
of providing not only "fair notice" of the

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 nature of the claim, but also "grounds" on
which the claim rests.

550 U.S. at 555 n.3.

Indeed, well before Twombly and Iqbal, specificity

requirements had been stiffened in many circuit courts, see

Twombly, 550 U.S. at 562 (collecting cases), redressing what had

been a much earlier swing of the pendulum to the other end of its

arc, e.g., Conley v. Gibson, 355 U.S. 41 (1957); other pressures

for tightening up have come from growing dockets, the enormous cost

of modern discovery, and the benefits to court and parties of

sorting out hopeless claims early on. But, as in any transition,

there remain issues of fair warning and elucidation.

To allege an employment relationship, plaintiffs in this

case state: "At all relevant times, Ashleigh Pruell and Amy Gordon

("Plaintiffs") were employees under the FLSA, employed by

defendants within this district and reside within this District";

and to allege underpayment of overtime, the complaint as amended

says: "Throughout their employment with defendants, Plaintiffs

regularly worked hours over 40 in a week and were not compensated

for such time, including the applicable premium pay." Amended

Complaint ¶¶ 75-76, Pruell, No. 09-11466.

The key statement--"regularly worked hours over 40 in a

week and were not compensated for such time"--is one of those

borderline phrases. As we explained in Peñalbert-Rosa v.

Fortuño-Burset, "some allegations, while not stating ultimate legal

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conclusions, are nevertheless so threadbare or speculative that

they fail to cross 'the line between the conclusory and the

factual.'" 631 F.3d 592, 595 (1st Cir. 2011) (quoting Twombly, 550

U.S. at 557 n.5). Standing alone, the quoted language is little

more than a paraphrase of the statute.

The general allegations found inadequate in Iqbal were

themselves "factual" assertions but highly general and made without

offering any detail, Peñalbert, 631 F.3d at 595, and prior First

Circuit cases are to the same effect, id. at 595 n.2. Similarly,

Plumbers' Union Local No. 12 Pension Fund v. Nomura Asset

Acceptance Corp., 632 F.3d 762, 771 (1st Cir. 2011), warned that

[t]o state a claim, 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,
129 S. Ct. 1937, 1949 (2009) (quoting Bell
Atl. Corp. v. Twombly, 550 U.S. 544, 570
(2007)); "'naked assertions devoid of further
factual enhancement'" need not be accepted,
Maldonado v. Fontanes, 568 F.3d 263, 266 (1st
Cir. 2009) (quoting Iqbal, 129 S. Ct. at
1949); and "[i]f the factual allegations in
the complaint are too meager, vague, or
conclusory to remove the possibility of relief
from the realm of mere conjecture, the
complaint is open to dismissal," [SEC v.
Tambone, 597 F.3d 436, 442 (1st Cir. 2010) (en
banc)].

The harder question is whether the deficiency is cured by

three general allegations in the complaint--namely, charges that

Caritas requires unpaid work through meal-breaks due to an

automatic timekeeping deduction, unpaid preliminary and

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postliminary work, and unpaid training sessions. The first is the

most concrete and so can stand in for the others. In a nutshell,

the complaint said that the plaintiffs and other class members

regularly worked through their lunch breaks but that the computer

system tracking time for compensation automatically deducted a half

hour for lunch.

Arguably, once the complaint was amended to allege

regular work by plaintiffs and others of more than 40 hours a week,

it now described a mechanism by which the FLSA may have been

violated as to those who worked through their lunches. But such

persons could still have been properly compensated under the FLSA:

in particular, various forms of "work" may not be not compensable.

See 29 U.S.C. § 254(a) (non-"principal" preliminary or postliminary

work not compensable); 29 C.F.R. §§ 785.27-785.32 (various types of

training not compensable); id. § 785.47 (insignificant time beyond

scheduled working hours not compensable).

Yet even the amended complaint does not provide examples

(let alone estimates as to the amounts) of such unpaid time for

either plaintiff or describe the nature of the work performed

during those times. Also, additional compensation--say, premium

pay above the time-and-a-half mandatory rate, or differential pay

for certain shifts--may offset any deficiency created by other

uncompensated time. See 29 U.S.C. § 207(e)(5)-(7), (h); 29 C.F.R.

§ 778.200, 778.202.

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 As defendants are quick to point out, similar complaints

have been filed around the country in hospital compensation cases

using boilerplate complaints of this character; and counsel may

have some incentive to keep the claims unspecific to achieve the

largest possible class. A number of district courts, although not

all, have expressed their displeasure and found the complaints

inadequate.2 Class actions are useful to remedy widespread wrongs,

but such lawsuits still require at the outset a viable named

plaintiff with a plausible claim. In that respect, this complaint

even as amended is deficient although not by a large margin.

It is also telling that when the district court asked for

more detail, plaintiffs' amendment offered the barest possible

minimum--again with no detail as to either plaintiff. Cf. Kueter

v. Rancourt, 89 F.3d 823 (1st Cir. 1996) (unpublished table

decision) (warnings about adequacy of original complaint relevant

to assessing adequacy of amended complaint). Adequacy is not

always a clear line; and when the district judge asks for more

2
Compare Davis v. Abington Mem'l Hosp., No. 09-5520, 2011 WL
4018106, at *4 (E.D. Pa. Sept. 8, 2011), and DeSilva v. North
Shore-Long Island Jewish Health Sys., Inc., 770 F. Supp. 2d 497,
508-10 (E.D.N.Y. Mar. 16, 2011), and Manning v. Boston Med. Ctr.
Corp., No. 09-11463, 2011 WL 796505, at *1-*2 (D. Mass. Feb. 28,
2011), and Nakahata v. New York Presbyterian Healthcare Sys., Inc.,
No. 10 Civ. 2661, 2011 WL 321186, at *4 (S.D.N.Y. Jan. 28, 2011),
with Meyers v. Crouse Health Sys., Inc., 274 F.R.D. 404 (N.D.N.Y.
2011), and Hamelin v. Faxton-St. Luke's Healthcare, 274 F.R.D. 385
(N.D.N.Y. 2011).

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specifics, a serious effort to flesh out the complaint is fairly to

be expected.

Plaintiffs' counsel says that (after the complaint and in

aid of conditional certification) they submitted additional

information by affidavit, albeit late in the day and not as an

amendment to the complaint. These affidavits do identify the

employee position and hospital name for the plaintiffs. But this

is an answer to a different concern--raised only later by the

district judge, likely in response to his colleague's opinion in

Cavallaro v. UMass Mem'l Health Care Inc., No. 09-40152, 2011 WL

2295023 (D. Mass. June 8, 2011); and the affidavits added nothing

to show that the plaintiffs were in fact under-compensated.

Nevertheless, we think the motion to amend should be

allowed. The precedents on pleading specificity are in a period of

transition, and precise rules will always be elusive because of the

great range and variations in causes of action, fact-patterns and

attendant circumstances (e.g., warnings, good faith of counsel).

"Determining whether a complaint states a plausible claim for

relief will . . . be a context-specific task that requires the

reviewing court to draw on its judicial experience and common

sense." Iqbal, 129 S. Ct. at 1950.

While specifics as to the named plaintiffs here are

lacking, some of the information needed may be in the control of

defendants. Plaintiffs certainly know what sort of work they

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performed and presumably know how much they were paid as wages; but

precisely how their pay was computed and based upon what specific

number of hours for particular time periods may depend on records

they do not have. Complaints cannot be based on generalities, but

some latitude has to be allowed where a claim looks plausible based

on what is known.

Finally, the district judge said originally that there

was no allegation that the plaintiffs worked more than forty hours;

the plaintiffs then supplied such an allegation; and perhaps

plaintiffs' counsel here were genuinely uncertain about just what

more the district court wanted. Under all of these circumstances

we think another amendment should be permitted, and it would be

helpful on remand for the district judge to indicate to plaintiffs

what deficiencies remain and what the court expects to be supplied

in a final amended complaint.

The judgment is affirmed so far as it finds the complaint

inadequate to state an FLSA claim, but the dismissal with prejudice

is vacated, and the case remanded to give the plaintiffs a final

opportunity to file a sufficient complaint. Each side shall bear

its own costs on this appeal.

It is so ordered.

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