United States District Court, E.D. Kentucky Central Division, Lexington
JUSTIN SHERWOOD, On behalf of himself & all others similarly situated, et al., Plaintiff,
COOK OUT, INC., Defendant.
MEMORANDUM OPINION AND ORDER
M. Hood Senior U.S. District Judge
matter is before the Court upon the Motion to Dismiss for
Lack of Jurisdiction filed by Defendant, Cook Out, Inc. [DE
16]. Plaintiff Justin Sherwood has filed a Response [DE 20]
and Defendant has filed a Reply [DE 23]. Thus, the matter is
fully briefed and ripe for review.
Factual and Procedural Background
Complaint, Plaintiff alleges that he was employed by
Defendant, Cook Out, Inc., from approximately September 15,
2014 to November 21, 2014 as a MIT at “Defendant's
store located in Richmond, Kentucky” [DE 1, Complaint
at ¶11]. Plaintiff further alleges that he and similarly
situated employees worked in excess of 40 hours per workweek,
without receiving wages from Defendant for all hours worked,
nor overtime compensation in a timely manner as required by
federal and state laws [Id. at ¶12, 22].
Plaintiff filed his Complaint in this action individually and
on behalf of all others similarly situated, seeking all
available relief under the Fair Labor Standards Act of 1938
(“FLSA”), 29 U.S.C. §§ 201, et
seq., K.R.S. § 337.020 (“Kentucky's Wage
Payment Collection Law” or “KWPCL”), and,
in the alternative to the KWPCL claim for the class, K.R.S.
§ 446.070 (“Kentucky Remedies Law” or
filed a Motion to Dismiss Plaintiff's Complaint,
primarily arguing that this Court cannot exercise personal
jurisdiction over it, thus this case should be dismissed
pursuant to Fed.R.Civ.P. 12(b)(2) [DE 16]. Defendant has
submitted a Declaration of Rich McCormick, an insurance
administrator at Cook Out, Inc., who purports to have
familiarity with Defendant's business operations and
access to its records [DE 16-2, McCormick Decl.]. According
to McCormick, Defendant Cook Out, Inc. is a North Carolina
corporation with a principal place of business at 15 Laura
Lane, STE 300, Thomasville, NC 27360 [Id.].
McCormick also states that Defendant conducts its business in
North Carolina and operates a Cook Out Restaurant in North
further states that Defendant is a separate legal entity from
the entity that employed Plaintiff, which would have been
Cook Out-Richmond KY, Inc. [Id.]. According to
McCormick, Defendant is neither a parent, nor subsidiary of
the entity that employed Plaintiff, nor is Defendant involved
in the daily operations of Cook Out-Richmond KY, Inc.
[Id.]. McCormick also states that Defendant does not
operate any restaurants in Kentucky, does not own any real
property in Kentucky, does not conduct any regular business
in Kentucky, does not sell any products in Kentucky, does not
advertise itself in Kentucky, has never sought a license to
do business in Kentucky, has no agent for the service of
process in Kentucky, and has never registered to do business
with the Kentucky Secretary of State [Id.].
response to Defendant's Motion to Dismiss, Plaintiff
submits a declaration from their own counsel, Jason S.
Rathod, in which he describes Defendant's alleged
“significant contacts with Kentucky and employment of
Kentucky citizens, including Plaintiff Sherwood” [DE
20-1, Rathod Decl.]. Rathod details his internet searches
regarding Defendant and its connections to Kentucky and
attaches several news articles and features of
Defendant's website (which allegedly shows that it has
locations in Kentucky) and Defendant's LinkedIn profile
[Id.] Plaintiff concedes that Defendant separately
incorporates the individual restaurants that are part of its
chain, but argues that the information submitted in the
declaration shows that the individual restaurants do not
operate as autonomous entities but instead pursuant to
centralized policies and practices which are dictated by
Defendant. Essentially, Plaintiff argues that Defendant has
held itself out as having a presence in Kentucky, such that
it should not be surprised to be sued here.
alternative to dismissal, Plaintiff requests that the Court
permit Plaintiff to take limited jurisdictional discovery
with respect to the relationship between Defendant and Cook
Out - Richmond KY, Inc., as well as Defendant's
operations in Kentucky.
Standard of Review
motion to dismiss for lack of personal jurisdiction under
Fed.R.Civ.P. 12(b)(2), Plaintiff bears the burden of
establishing that jurisdiction exists. Serras v. First
Tennessee Bank Nat. Ass'n, 875 F.2d 1212, 1214 (6th
Cir. 1989)(citing McNutt v. General Motors Acceptance
Corp., 298 U.S. 178, 189 (1936)(other citations
omitted)). When faced with a properly supported motion for
dismissal, “the plaintiff may not stand on his
pleadings but must, by affidavit or otherwise, set forth
specific facts showing that the court has
jurisdiction.” Theunissen v. Matthews, 935
F.2d 1454, 1458 (6th Cir. 1991)(citation omitted).
“Presented with a properly supported 12(b)(2) motion
and opposition, the court has three procedural alternatives:
it may decide the motion upon the affidavits alone; it may
permit discovery in aid of deciding the motion; or it may
conduct an evidentiary hearing to resolve any apparent
factual questions.” Id. (citing
Serras, 875 F.2d at 1214). District courts are
afforded discretion to select which alternative it will
choose. Id. (citing Michigan Nat. Bank v.
Quality Dinette, Inc., 888 F.2d 462, 466 (6th Cir.
careful consideration, the Court determines that limited
jurisdictional discovery is warranted in this case.
Plaintiff's evidence, while thin, demonstrates that there
may be some connections between Defendant and Kentucky.
Whether Defendant's Kentucky contacts are sufficient for
personal jurisdiction purposes remains to be seen. However,
out of an abundance of caution, the Court will provide
Plaintiff with a short period of time within which to take
some limited discovery with respect to Defendant's
contacts with Kentucky, including the relationship between
Defendant and Cook Out-Richmond KY, Inc.
alternative to its personal jurisdiction argument, Defendant
also argues that dismissal is warranted because Plaintiff
fails to name the correct entity as Defendant in the caption
of his Complaint (specifically, that Plaintiff failed to name
the entity that actually employed him) in violation of
Fed.R.Civ.P. 10 [Id.]. Defendant further argues that
Plaintiff's Complaint is subject to dismissal pursuant to
Fed.R.Civ.P. 12(b)(6) because wage and hour claims are not
viable class actions under Kentucky law and also because
Plaintiff's Complaint fails to sufficiently plead
individual claims for violations of the overtime provisions
of the FLSA and the Kentucky wage and hour statute
[Id.]. Defendant also argues that, as a former
employee, Plaintiff lacks standing to seek the injunctive or
declaratory relief requested in the Complaint, thus these
claims should be dismissed pursuant to Fed.R.Civ.P. 12(b)(1).
However, because it is unclear whether the Court may properly
exercise personal jurisdiction over Defendant, it is
inappropriate to address these arguments at this time.