Chao v. Rivendell Woods Inc

PUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
ELAINE L. CHAO, Secretary of Labor, 
United States Department of Labor,
Plaintiff-Appellant,
v.
RIVENDELL WOODS, INCORPORATED,
d/b/a Rivendell Woods Family Care,  No. 04-2330
d/b/a/ Rivendell Woods; LANDRAW-I,
LLC; ANDREA WELLS JAMES,
individually; RODNEY JAMES,
individually,
Defendants-Appellees.

Appeal from the United States District Court
for the Western District of North Carolina, at Asheville.
Lacy H. Thornburg, District Judge.
(CA-03-142)
Argued: May 27, 2005
Decided: July 19, 2005
Before MOTZ and KING, Circuit Judges, and
Eugene E. SILER, Jr., Senior Circuit Judge of the
United States Court of Appeals for the Sixth Circuit,
sitting by designation.
Reversed and remanded by published opinion. Judge Motz wrote the
opinion, in which Judge King and Senior Judge Siler joined.
2 CHAO v. RIVENDELL WOODS, INC.
COUNSEL
ARGUED: Carol Beth Feinberg, UNITED STATES DEPART-
MENT OF LABOR, Office of the Solicitor, Washington, D.C., for
Appellant. Kevin Patrick Kopp, Jacqueline Denise Grant, ROBERTS
& STEVENS, P.A., Asheville, North Carolina, for Appellees. ON
BRIEF: Howard M. Radzely, Solicitor of Labor, Steven J. Mandel,
Associate Solicitor, Paul L. Frieden, Counsel for Appellate Litigation,
UNITED STATES DEPARTMENT OF LABOR, Office of the Solic-
itor, Washington, D.C., for Appellant. Jackson D. Hamilton, ROB-
ERTS & STEVENS, P.A., Asheville, North Carolina, for Appellees.
OPINION
DIANA GRIBBON MOTZ, Circuit Judge:
The Secretary of Labor appeals the district court’s order dismissing
her action against various defendants for violations of the Fair Labor
Standards Act, 29 U.S.C. § 201 et seq. (2000) ("FLSA" or the "Act").
For the reasons that follow, we reverse the judgment of the district
court and remand for further proceedings consistent with this opinion.
I.
The FLSA prohibits an "employer" from employing "employees"
who are "engaged in commerce" or "employed in an enterprise
engaged in commerce" without compensating the employees at a rate
of at least one and one-half times their regular rate for the hours
worked in excess of forty hours per week. 29 U.S.C. § 207(a)(1). It
also requires employers to keep records of the "wages, hours, and
other conditions and practices of employment" of their employees. 29
U.S.C. § 211(c). On June 11, 2003, after an investigation lasting
approximately five years, the Secretary of Labor filed a complaint
against Rivendell Woods, Inc., Landraw-I, L.L.C., and Andrea and
Rodney James (collectively "Rivendell"), seeking injunctive and other
relief for alleged violations of these overtime and record-keeping pro-
visions.
CHAO v. RIVENDELL WOODS, INC. 3
After the case was referred to a magistrate judge, Rivendell filed
an answer and moved to dismiss the complaint for failure to state a
claim. The magistrate judge recommended denying the motion, and
Rivendell filed objections seeking dismissal of the complaint. The
district court found merit in Rivendell’s objections, concluding that
the complaint merely "‘parrot[ed] the legal standard’" and stated
"vague, conclusory and speculative allegations." However, the court
denied Rivendell’s motion to dismiss "without prejudice to renewal"
of that motion by Rivendell if the Secretary failed "to cure the defec-
tive complaint" within fifteen days.
The Secretary timely filed an amended complaint. The amended
complaint asserts, inter alia, the following factual allegations: (1)
Rivendell Woods and Landraw-I are North Carolina corporations, and
the individual defendants, Andrea and Rodney James, "acted directly
or indirectly in the interest of [these] corporations in relation to their
employees" and, therefore, are "employer[s] within the meaning of
. . . the Act"; (2) the defendants "engaged in related activities per-
formed either through unified operation or common control for a
common business purpose" and, therefore, "constitute an enterprise
within the meaning of . . . the Act"; (3) the enterprise "operates an
institution primarily engaged in the care of the sick, the aged, the
mentally ill or defective" and, therefore, "constitutes an enterprise
engaged in commerce . . . within the meaning of . . . the Act"; (4)
Rivendell had, since May 1, 2000, violated the overtime provisions
of the Act by compensating certain employees, including "Supervi-
sors in Charge," at a rate of less than time-and-a-half for the hours
they worked in excess of forty hours per week; and (5) since May 1,
2000, Rivendell had violated the record-keeping provisions of the
FLSA by failing to "make, keep and preserve" required records for
the Supervisors in Charge and other employees, including records
reflecting the regular hourly rate of pay for weeks when overtime
payment was due; the hours worked each day and week; the total
daily or weekly regular pay; the total overtime pay; the total wages
per pay period; and the date of payment and period covered by pay-
ment. The Secretary sought an injunction "restraining the withholding
of payment of back wages . . . for the period since June 11, 2001,"
as well as other appropriate relief, including interest on the wages,
and costs.
4 CHAO v. RIVENDELL WOODS, INC.
The district court granted Rivendell’s renewed and amended
motion to dismiss, finding the complaint still did not state a claim
upon which relief could be granted. The court characterized the Sec-
retary’s allegations as "merely boilerplate recitations of the statute
itself." The court also asserted the complaint was deficient for failing
to identify the Supervisors in Charge, the dates of their employment,
and the nature of the employment relationship. According to the dis-
trict court, the deficiencies in the complaint made it "virtually impos-
sible for the Defendants to prepare a defense." The court therefore
entered an order stating that the "action is hereby dismissed without
prejudice in its entirety."
II.
Although the parties did not raise the question, we must initially
determine whether we have jurisdiction to consider the district court’s
dismissal without prejudice. See Snowden v. CheckPoint Check Cash-
ing, 290 F.3d 631, 635 (4th Cir. 2002) ("[W]hen our appellate juris-
diction is in doubt, we must sua sponte raise and address the matter.").1
In Domino Sugar Corp. v. Sugar Workers Local Union 392, 10
F.3d 1064, 1067 (4th Cir. 1993), we held that the district court’s dis-
missal of the complaint without prejudice "qualifie[d] as a final order
subject to appeal." The appellee had argued that the order dismissing
the complaint was not appealable because "such an order does not
preclude the losing party from filing a new complaint," and, thus,
could not be considered final. Id. at 1066. But we reasoned that allow-
ing an appeal from such an order would not frustrate the interests of
judicial economy, if it were clear that amendment of the complaint
could not cure its defects. Id. at 1067. "Under this approach, an appel-
late court may evaluate the particular grounds for dismissal in each
case to determine whether the plaintiff could save his action by
merely amending his complaint." Id. at 1066-67. Thus, Domino Sugar
requires us to examine the appealability of a dismissal without preju-
dice based on the specific facts of the case in order to guard against
piecemeal litigation and repetitive appeals.
1
At oral argument, we asked the parties to provide supplemental brief-
ing on the issue of appellate jurisdiction, which they have done.
CHAO v. RIVENDELL WOODS, INC. 5
Engaging in that inquiry here, we conclude that amendment of the
Secretary’s complaint would not "permit [her] to continue the litiga-
tion in the district court." Id. at 1067. First, the district court did not
merely dismiss the complaint, but dismissed the "action . . . in its
entirety." In Domino Sugar, we noted the difference between an order
dismissing an action without prejudice and one dismissing a com-
plaint without prejudice, stating that the latter order is generally not
appealable. See id. at 1066; Zayed v. United States, 368 F.3d 902, 905
(6th Cir. 2004) ("Where an action, and not merely an amendable com-
plaint . . . , is dismissed without prejudice, the order of dismissal is
final and appealable."); see also Furnace v. Bd. of Trs. of S. Ill. Univ.,
218 F.3d 666, 669 (7th Cir. 2000).
Moreover, the Secretary contends that she must be able to employ
similarly-worded complaints throughout the country for consistency,
and so elects to stand on the complaint presented to the district court.
The Secretary asserts that the amended complaint "is consistent with
her longstanding practice" and argues that it is "crucial that the Secre-
tary be able to challenge the district court’s erroneous application of
[Rule] 8(a) to her FLSA complaints so as to maintain a uniform,
nationwide practice." Supp. Brief of Appellant at 5. By electing to
stand on her complaint, the Secretary has waived the right to later
amend unless we determine that the interests of justice require amend-
ment. See, e.g., Cohen v. Ill. Inst. Tech., 581 F.2d 658, 662 (7th Cir.
1978). The Secretary’s election, and consequent waiver, thus protect
against the possibility of repetitive appeals that concerned us in Dom-
ino Sugar. See, e.g., Coniston Corp. v. Village of Hoffman Estates,
844 F.2d 461, 463 (7th Cir. 1988); DiVittorio v. Equidyne Extractive
Indus., Inc., 822 F.2d 1242, 1247 (2d Cir. 1987); Borelli v. City of
Reading, 532 F.2d 950, 951-52 (3d Cir. 1976).
Therefore, we have jurisdiction over this appeal.
III.
Turning to the merits, we review de novo the dismissal of a com-
plaint pursuant to Federal Rule of Civil Procedure 12(b)(6). Iodice v.
United States, 289 F.3d 270, 273 (4th Cir. 2002). A district court
should not dismiss a complaint for failure to state a claim "unless
after accepting all well-pleaded allegations in the plaintiff’s complaint
6 CHAO v. RIVENDELL WOODS, INC.
as true and drawing all reasonable factual inferences from those facts
in the plaintiff’s favor, it appears certain that the plaintiff cannot
prove any set of facts in support of his claim entitling him to relief."
De’lonta v. Angelone, 330 F.3d 630, 633 (4th Cir. 2003) (internal
quotation marks and citation omitted).
A.
The district court apparently concluded that the Secretary’s
amended complaint did not satisfy Rule 8(a). The rule requires a com-
plaint to include "(1) a short and plain statement of the grounds upon
which the court’s jurisdiction depends . . . , (2) a short and plain state-
ment of the claim showing that the pleader is entitled to relief, and
(3) a demand for judgment for the relief the pleader seeks." Fed. R.
Civ. P. (8)(a).
The Supreme Court has recently reaffirmed that Rule 8(a)’s "sim-
plified notice pleading standard" merely requires a statement that
"‘give[s] the defendant fair notice of what the plaintiff’s claim is and
the grounds upon which it rests.’" Swierkiewicz v. Sorema N.A., 534
U.S. 506, 512 (2002) (quoting Conley v. Gibson, 355 U.S. 41, 47
(1957)). "[T]his notice function . . . represents the core of the pleading
process under the federal rules." 5 Charles Alan Wright & Arthur R.
Miller, Federal Practice and Procedure: Civil 3d § 1215, at 173-74
(3d ed. 2004).
Swierkiewicz resolved a circuit split regarding "the proper pleading
standard for employment discrimination cases." 534 U.S. at 509-10.
The Court rejected the view that a plaintiff had to plead a prima facie
case of discrimination under the evidentiary standard of McDonnell
Douglas Corp. v. Green, 411 U.S. 792 (1973), to survive a 12(b)(6)
motion to dismiss. The Court reasoned that any such heightened
pleading standard "conflicts" with the simplified pleading standard of
the Federal Rules of Civil Procedure, which "applies to all civil
actions, with limited exceptions." Swierkiewicz, 534 U.S. at 512, 513.
As a leading treatise recognizes, then, Rule 8(a) only:
requires the pleader to disclose adequate information regard-
ing the basis of his claim for relief as distinguished from a
CHAO v. RIVENDELL WOODS, INC. 7
bare averment that he wants relief and is entitled to it.
Undoubtedly great generality in the statement of these cir-
cumstances can be permitted so long as the defendant is
given fair notice of what is being asserted against him.
5 Wright & Miller, supra, § 1202, at 94-95. Under this relaxed stan-
dard, unmeritorious claims and attempts at surprise are eliminated not
by motions to dismiss, but rather primarily through "liberal discovery
rules and summary judgment motions." Swierkiewicz, 534 U.S. at
512-13.
We are mindful that "[w]hat constitutes a short and plain statement
must be determined in each case on the basis of the nature of the
action, the relief sought, and the respective positions of the parties in
terms of the availability of information and a number of other prag-
matic matters." 5 Wright & Miller, supra, § 1217, at 240-41. In our
post-Swierkiewicz case law, we have hewed closely to the Supreme
Court’s instruction that "all the Rules require is a short and plain
statement of the claim that will give the defendant fair notice of what
the plaintiff’s claim is and the grounds upon which it rests." Conley,
355 U.S. at 47 (internal quotation marks and citation omitted). Our
adherence to this standard becomes particularly clear in the cases on
which Rivendell principally relies.
For example, in Iodice, we addressed the sufficiency of the com-
plaint in an action brought under the Federal Tort Claims Act. The
plaintiffs, victims of an intoxicated driver who had been taking nar-
cotics prescribed by a VA hospital, alleged that the hospital had negli-
gently trained, monitored, and supervised its staff regarding the
dispensing of narcotics and that such negligence proximately caused
the plaintiffs’ injuries. Iodice, 289 F.3d at 277. Because state law gov-
erned the claim, we examined North Carolina’s negligence cases, ulti-
mately determining that "North Carolina would require a tight nexus
between the provision of narcotics and the harm to the victim, if it
permitted third party plaintiffs to recover at all." Id. at 279. Conclud-
ing that this "nexus" constituted an element of the cause of action, we
noted that, in order to state a claim, the plaintiffs merely had to allege
that the hospital knew or should have known that the patient was
under the influence of intoxicants and would "shortly thereafter drive
an automobile." Id. at 280 (internal quotation marks and citation omit-
8 CHAO v. RIVENDELL WOODS, INC.
ted). However, we affirmed the dismissal of the action because the
plaintiffs had made no such allegations. We emphasized that we did
not affirm "because the [plaintiffs] failed to forecast evidence suffi-
cient to prove an element" of the claim, but only because they "failed
to allege facts sufficient to state elements" of the claim. Id. at 281.
Dickson v. Microsoft Corp., 309 F.3d 193, 198-99 (4th Cir. 2002),
involved allegations of a complex conspiracy between Microsoft and
certain computer manufacturers to restrain trade and maintain alleged
monopolies through, inter alia, the use of commercial licensing
agreements. Proving anticompetitive effect under either section 1 or
2 of the Sherman Antitrust Act requires "that the defendants played
a significant role in the relevant market." Id. at 207 (internal quotation
marks and citation omitted). Although the plaintiffs had alleged that
Microsoft had "significant market power," they refused to provide
allegations of the computer manufacturers’ power in the market, argu-
ing that it was "immaterial" to the manufacturers’ ability to influence
competition. Id. at 209-10. We disagreed, concluding that such a
showing was necessary to establish anticompetitive effect. See id. at
211. Because of the plaintiffs’ refusal to allege any facts regarding the
manufacturers’ market power, the complaint "failed to . . . support the
basic elements" of its claims. Id. at 213. We emphasized again that
all that was required was "that a plaintiff set forth facts sufficient to
allege each element of his claim." Id.
Finally, in Bass v. E.I DuPont de Nemours & Co., 324 F.3d 761
(4th Cir. 2003), we examined the sufficiency of a complaint
assertedly alleging employment discrimination. We noted that, in
order to state a hostile work environment claim, a plaintiff must allege
that "the harrassment was based on her gender, race, or age" and that
"the harrassment was sufficiently severe or pervasive to alter the con-
ditions of employment and create an abusive atmosphere." Id. at 765.
The complaint in Bass failed because it alleged facts that did "not
seem to have anything to do with gender, race, or age harrassment,"
but merely told "a story of a workplace dispute . . . and some perhaps
callous behavior by . . . superiors." Id. In other words, we once again
held dismissal of the complaint proper because the complaint did not
allege the elements of the cause of action purportedly pursued.
These cases illustrate the rule, which we reaffirm here, that the
pleading standard of the Federal Rules of Civil Procedure is "not
CHAO v. RIVENDELL WOODS, INC. 9
onerous." Id. at 764. Rather, a complaint meets Rule 8’s requirements
if, in light of the nature of the action, the complaint sufficiently
alleges each element of the cause of action so as to inform the oppos-
ing party of the claim and its general basis.
B.
When these principles are applied here, it is clear that the district
court demanded more of the Secretary’s complaint than the Federal
Rules of Civil Procedure require. Rivendell argues that the district
court properly dismissed the action because the Secretary did not pro-
vide sufficient facts to "establish[ ]" "coverage under the FLSA," "op-
erat[ion] of an enterprise engaged in commerce," or employment by
Rivendell of the allegedly aggrieved persons. Brief of Appellees at
20. Rivendell asserts that the complaint "merely paraphrases the lan-
guage of the statute," which "does not equate to alleging facts." Id.
But, actually, the amended complaint alleges each element of the
claim — and that is all that is necessary. The complaint alleges that
Rivendell is an employer and/or enterprise covered by the Act. The
complaint adequately identifies the employees who are alleged to
have worked overtime without proper remuneration as "Supervisors
in Charge." It states that, for a particular time period, Rivendell had
"repeatedly violated" both the overtime and the record-keeping provi-
sions of the Act and describes the manner of these violations. Finally,
it seeks relief for violations that occurred after June 11, 2001 — that
is, violations that occurred within the relevant two-year statute of lim-
itations for non-willful violations. 29 U.S.C. § 255(a).2
In Hodgson v. Virginia Baptist Hospital, Inc., 482 F.2d 821 (4th
Cir. 1973), we upheld the validity of a very similar complaint alleging
violations of the FLSA. The complaint in Virginia Baptist Hospital
merely charged that:
since September 15, 1968, the hospital had repeatedly vio-
lated the [FLSA] by failing to pay all its employees the
2
As noted above, the Secretary filed the original complaint on June 11,
2003. The amended complaint, filed on May 21, 2004, relates back to the
date of the original pleading. See Fed. R. Civ. P. 15(c)(2).
10 CHAO v. RIVENDELL WOODS, INC.
minimum wage required by the Act, by paying wages that
discriminated on the basis of an employee’s sex, by employ-
ing persons for more than forty hours a week without paying
them overtime rates, by failing to keep accurate records, and
by employing oppressive child labor. The complaint identi-
fied the sections of the Act which the hospital had allegedly
violated, and it requested injunctive relief.
Id. at 822. We concluded that the complaint need not specify the
names of the aggrieved employees, their wages, the weeks in which
the employees were entitled to overtime pay, or the particular records
that the hospital had failed to maintain. See id. Rather, we held that
— without any of these additional facts — the complaint survived a
motion for a more definite statement under Fed. R. Civ. P. 12(e). Id.
at 824.3
In dismissing the action here, the district court not only ignored
Virginia Baptist Hospital, but it also employed a rationale demonstra-
bly at odds with the Federal Rules. For the court reasoned that the
complaint failed because it did not "make a case" against Rivendell
and because, from the complaint, "it is virtually impossible for the
Defendants to prepare a defense."
We reemphasize that a complaint need not "make a case" against
a defendant or "forecast evidence sufficient to prove an element" of
the claim. Iodice, 289 F.3d at 281. It need only "allege facts sufficient
to state elements" of the claim. Id.; see also Brown v. Budz, 398 F.3d
904, 914 (7th Cir. 2005) ("[T]he district court’s order, as well as
defendants’ arguments . . . are replete with references to what Brown
failed to ‘show’ or ‘establish.’ Such use of the language of summary
judgment in disposing of a motion under Rule 12(b)(6) is incompati-
3
Rivendell asserts that Virginia Baptist Hospital is inapposite here
because it deals with a motion for a more definite statement under Rule
12(e), while the present case involves a motion to dismiss under Rule
12(b)(6). Brief of Appellees at 21. This argument is meritless. A pleading
that can survive a Rule 12(e) motion necessarily can withstand a motion
to dismiss under Rule 12(b)(6). See 5C Wright & Miller, supra, § 1376,
at 310-11 (noting that to survive a Rule 12(e) motion, a "pleading must
be sufficient to survive a Rule 12(b)(6) motion to dismiss").
CHAO v. RIVENDELL WOODS, INC. 11
ble with the liberal notice pleading requirements of Rule 8."). Thus,
the sufficiency of a complaint does not depend on whether it provides
enough information to enable the defendant "to prepare a defense,"
but merely "whether the document’s allegations are detailed and
informative enough to enable the defendant to respond."4 5 Wright &
Miller, supra, § 1215, at 193; see also Virginia Baptist Hosp., Inc.,
482 F.2d at 824. The Secretary’s complaint clearly meets this stan-
dard.
IV.
For the foregoing reasons, the judgment of the district court is
REVERSED AND REMANDED.
4
Here, Rivendell, although objecting to the complaint’s purported
vagueness, answered the complaint and asserted affirmative defenses.