Case 1:16-cv-02425-LMM Document 31 Filed 01/18/17 Page 1 of 21

IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF GEORGIA
ATLANTA DIVISION
CHRYSTEN WRIGHT, et al.,
Plaintiffs,
v.
SCALES 925 ATLANTA, LLC, et al.,
Defendants.

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CIVIL ACTION NO.

1:16-CV-02425-LMM

ORDER
This case comes before the Court on Defendant Clifford Joseph Harris,
Jr.s Motion to Dismiss [11] and Plaintiffs Motion to Amend [16]. After a review
of the record, the Court issues the following Order.
I.

BACKGROUND1

Defendants Clifford Joseph Harris, Jr. (Harris) and Charles Hughes

(Hughes) were business partners. Dkt. No. [1] 13. Harris is a rapper, actor,
and entrepreneur, and Hughes was responsible for booking Harris at concerts
and nightclubs. Id. Plaintiffs allege that in March 2015, Harris, Hughes, and
other entity partners (Restaurant Partnership) opened a restaurant called
Scales 925 (Restaurant) and agreed to share the Restaurants profits. Id.
Because the Court grants in part Plaintiffs Motion to Amend, the following facts
are drawn both from the original Complaint [1] and Proposed Amended
Complaint [16-1]. Any fact-finding is made solely for the purposes of resolving the
motions addressed in this Order and is construed in favor of Plaintiffs.

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17, 26.2 Harris (1) decided what entrees were sold on the restaurants menu; (2)
decided the layout and look of the restaurant; (3) used his celebrity status to
advertise for and promote the Restaurant; and (4) selected the Head Chefs. Id.
21. Hughes was the managing partner and made daily decisions concerning
Restaurant employee performance. Dkt. No. [16-1] 95, 98. In addition, both
Harris and Hughes had the power to (1) determine the rates and methods of
payment; and (2) hire, fire, or modify the employment conditions. Dkt. No. [1]
22.3
On or about June 25, 2015, Harris and Hughes hired Plaintiffs Sammy
Davis (Davis) as Restaurant Head Chef and Monique Simms (Simms) as
Restaurant Manager pursuant to contractual agreements. Dkt. No. [1] 28-33;
Dkt. No. [16-1] 156-159. Plaintiffs Kurel Scott, Millan Rodrigo, DeMarquis
Denson, Ongeli McMillan, Whitley Middleton, Jenair Perry, Shomari Davis,
Chrysten Wright, and Cashara Tate (collectively the Server Plaintiffs) were also
employed at the Restaurant at various times during 2015 and 2016.4 Id. 3478; Dkt. No. [16-1] 77-81.

The lease to the Restaurant was assigned to both Harris and Hughes. Dkt. No.
[16-1] 25.

Plaintiffs also allege that Harris admitted in an Instagram post that a

partnership existed between him and Hughes when he said that he and Hughes
have NO dealings nor partnerships outside of my restaurant Scales925. Dkt.
No. [16-1] 19; Dkt. No. [16-10] at 2.

Presumably Keandra Daniels is no longer a Plaintiff because she does not

appear in the Proposed Amended Complaint.

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The Server Plaintiffs allege that Hughes told them that they would get paid
for working during the Grand Opening of the Restaurant on or about September
1, 2015, and that the Server Plaintiffs gratuity was guaranteed because it would
be paid in advance by the public. Dkt. [16-1] 210, 213, 215. However, they did
not get paid either an hourly rate or gratuity and Hughes would never explain
why, according to the Server Plaintiffs. Id. 216-217. The Server Plaintiffs only
worked during the Grand Opening because Hughes told them that gratuity was
paid in advance. Id. 217. The Server Plaintiffs also allege similar facts regarding
working during the New Years Eve Celebration a few months later. Id. 218224.
Plaintiffs also allege that the Restaurant did not adequately compensate
them throughout their employment. The Server Plaintiffs contend that their
payments of $2.13 per hour plus tips did not add up to $7.25 per hour, and when
they informed Hughes of this fact, he ignored them. Dkt. No. [1] 81-82; Dkt.
No. [16-1] 106-107. The Server Plaintiffs contend that they were not paid
overtime despite routinely working more than forty hours per week, and when
they informed Hughes of this fact, he ignored them. Dkt. No. [1] 88; Dkt. No.
[16-1] 127-128. The Server Plaintiffs also allege that when they complained to
Hughes about their inadequate compensation, Hughes retaliated by yelling at
them, cutting their hours, taking them off the schedule, and firing them. Dkt. No.
[16-1] 146. Moreover, both Davis and Simms allege that they were not paid
their contractual salary and bonuses. Dkt. No. [1] 100.
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In addition, Plaintiffs allege that the Restaurants time and billing software
Aloha facilitated their inadequate compensation. The Server Plaintiffs contend
that Aloha required them to claim tips they did not receive, and that Hughes set
up Aloha to prematurely log them out during their shifts. Dkt. No. [1] 107; Dkt.
No. [16-1] 188. The Server Plaintiffs contend that when they complained to
Hughes that they were losing hours on their paychecks, he responded that
nothing could be done. Dkt. No. [16-1] 189. The Server Plaintiffs also allege that
Hughes changed the information in Aloha if Plaintiffs worked over forty hours in
a week, and that Hughes took money out of their paychecks for other dubious
reasons. Id. 190, 192-194. Moreover, Plaintiffs Davis and Simms allege that
Hughes concealed the true Restaurant sales to prevent them from receiving their
contractual bonuses. Id. 191.
All Plaintiffs have quit working for the Restaurant because of inadequate
compensation. Dkt. No. [1] 103. Plaintiffs allege that Hughes refused to give
them their last paycheck, despite the fact that they have asked for it. Dkt. No. [161] 179.
On July 5, 2016, Plaintiffs filed a Complaint against Hughes, Harris, and
various legal entities related to the Restaurant alleging violations of the Fair
Labor Standards Act (FLSA) (29 U.S.C. 201, et seq.), breach of contract,
failure to pay lawful wages (O.C.G.A. 34-7-2), deceptive business practices
(O.C.G.A. 16-9-50), fraud (O.C.G.A. 51-6-2), attorneys fees (O.C.G.A. 13-6-

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11, 29 U.S.C. 216(b)), and punitive damages (O.C.G.A. 51-12-5.1).5 Dkt. No. [1].
On September 15, Harris filed a Motion to Dismiss for Failure to State a Claim
relating to all claims against him. Dkt. No. [11]. On October 12, 2016, Plaintiffs
filed a Motion to Amend the Complaint. Dkt. No. [16]. The Court will consider
both in turn.
II.

PLAINTIFFS MOTION TO AMEND

A. Legal Standard

Federal Rule of Civil Procedure 15(a) allows a party to amend its pleading
only by leave of court or with written consent of the adverse party once more than
21 days have passed after service of the initial pleading, responsive pleading, or
certain Rule 12 motions. Fed. R. Civ. P. 15(a)(2). The rule also provides that [t]he
court should freely give leave when justice so requires, id., though granting leave
to amend is not automatic. Faser v. Sears Roebuck & Co., 674 F.2d 856, 860 (11th
Cir. 1982). This is because district courts have extensive discretion in

deciding whether to grant leave to amend and may choose not to allow a party
to amend when the amendment would prejudice the defendant, follows
undue delay or is futile. Campbell v. Emory Clinic, 166 F.3d 1157, 1162 (11th
Cir. 1999). Denial of leave to amend is justified by futility when the complaint as
amended is still subject to dismissal. Hall v. United Ins. Co. of Am., 367 F.3d

Plaintiffs maintain that O.C.G.A. 51-1-6 provides the cause of action for its
claims under O.C.G.A. 34-7-2 and 16-9-50.

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1255, 1263 (11th Cir. 2004) (quoting Burger King Corp. v. Weaver, 169 F.3d 1310,
1320 (11th Cir. 1999)).
B. Discussion
From the Courts review of the Proposed Amended Complaint, it appears
its purpose is to distinguish the actions of Hughes and Harris while beefing up
its allegations that a general partnership6 existed between them regarding the
Restaurant.7 Under the legal standard, the Court will allow the relevant
amendments for each count unless such amendments are futile because the count
should still be dismissed under Rule 12(b)(6) despite the amendments. The
futility of each count is addressed below.
1.

FLSA Counts

The Server Plaintiffs argue that Defendants violated the FLSA by failing to
pay them minimum wage and overtime, and that Hughes retaliated against them
for complaining. Harris argues that the claims should be dismissed as to him
because he was not an employer and therefore cannot be held individually
liable under the FLSA.

The Court will use the terms partnership and general partnership
interchangeably in this Order.
6

The Proposed Amended Complaint also deletes former Plaintiff Keandra

Daniels and discusses for the first time existing Plaintiff Cashara Tate.

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The FLSA creates a private right of action against any employer who
violates its minimum wage or overtime provisions.8 Lamonica v. Safe Hurricane
Shutters, Inc., 711 F.3d 1299, 1309 (11th Cir. 2013) (citing 29 U.S.C. 216(b)).
Individuals in partnerships can be employers under the FLSA if they are either
involved in the day-to-day operation or have some direct responsibility for the
supervision of the employee. Patel v. Wargo, 803 F.2d 632, 638 (11th Cir. 1986).9
As managing partner, Hughes was involved in the day-to-day operation of the
Restaurant and had direct responsibility for the supervision of employees. For
example, Hughes allegedly fielded employee complaints about hours and pay,
controlled the billing software Aloha, told employees that they would be paid for
working certain special days, and hired and fired employees. Thus, as alleged in
the Complaint, Hughes was likely an employer and could be liable under the
FLSA.
Even if Harris was not an employer under the FLSA,10 he could still face
FLSA liability if he was a partner in the Restaurant Partnership. A partnership is
an association of two or more persons to carry on as co-owners a business for
In addition, the retaliation provision prohibits any person from discharg[ing]
or in any other manner discriminat[ing] against any employee because such
employee has filed any complaint. 29 U.S.C. 215(a)(3).

See also Layton v. DHL Exp. (USA), Inc., 686 F.3d 1172, 1176 (11th Cir. 2012)
(listing economic reality test factors to determine whether an individual or entity
is an employer under the FLSA).
9

The Court does not have to reach the issue of whether Harris was an
employer outside the partnership context for the FLSA claims against him to
move forward, so the Court has not addressed it in response to this motion.

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profits . . . . O.C.G.A. 14-8-6. The receipt by a person of a share of the profits

of a business is prima-facie evidence that he is a partner in the business . . . .
O.C.G.A. 14-8-7. Additional [f]actors that indicate the existence of a
partnership include a common enterprise . . . [and] a joint right of control over
the business. But the intention of the parties is the true test of whether there is a
partnership . . . . Rosenfeld v. Rosenfeld, 648 S.E.2d 399, 402 (Ga. Ct. App.
2007).
Harris and Hughes were both co-owners of a business for profits, namely
the Restaurant. As evidence of their co-ownership, Plaintiffs allege that both
Harris and Hughess names were on the Restaurant lease. Moreover, Plaintiffs
allege that Harris and his other partners shared the Restaurants profits. This is
prima-facie evidence that a partnership existed. Additional factors also point
towards the existence of partnership: (1) there was a common enterprise in the
running of the Restaurant; (2) both Harris and Hughes had joint rights of control
over the business in designing/promoting and managing the Restaurant,
respectively; and (3) Harris intended to establish a partnership with Hughes as
evidenced by Harriss Instagram post announcing that he and Hughes have NO
dealings nor partnerships outside of my restaurant Scales925. Thus, Plaintiffs
have sufficiently alleged that Harris and Hughes were likely partners in the

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Restaurant Partnership and the Court will assume as much for purposes of this
Order.11
Harris and Hughess partnership is relevant to Harriss liability because a
partnership is bound by the wrongful acts or omissions of any partner acting in
the ordinary course of business of the partnership. O.C.G.A. 14-8-13. Moreover,
all partners are jointly and severally liable for all debts, obligations, and
liabilities of the partnership.12 O.C.G.A. 14-8-15(a) (emphasis added).
Specifically, [w]hen suit is brought for a debt due by the partnership, the
plaintiff may hold the individual partners liable by serving them. Southcom
Group, Inc. v. Plath, 570 S.E.2d 341, 343 (Ga. Ct. App. 2002) (internal citations
omitted).
Because Harris is a partner, he can be individually sued for any acts or
omissions by his co-partner Hughes that occurred in the ordinary course of
business of the Restaurant Partnership. Hughess FLSA violations occurred in the
ordinary course of business. Thus, Harris can be liable for them.
Harris argues that he cannot be held individually liable under the FLSA
unless he is an employer. Dkt. No. [27] at 6. In support, Harris cites cases
where the Eleventh Circuit held that only individuals who are employers can be
liable under the FLSA. However, in most of those cases the individuals were
In other words, the Court cannot say as a matter of law that Harris and Hughes
were not partners in the Restaurant Partnership.

11

The statutes use of the word all shows that the statute, on its face, does not
limit the types of partnership liabilities for which partners are responsible.
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corporate officers (not partners) and were not jointly and severally liable for the
corporations actions. See Lamonica, 711 F.3d at 1313-15 (analyzing whether
corporate minority shareholders were employers as a prerequisite for FLSA
liability); Olivas v. A Little Havanna Check Cash, Inc., 324 F. Appx 839, 841,
845-46 (11th Cir. 2009) (analyzing whether individual co-owner, corporate
officer, and shareholder was an employer as a prerequisite for FLSA liability);
Patel, 803 F.2d at 633, 638 (analyzing whether a corporate president was an
employer as a prerequisite to FLSA liability). Because a partner is already jointly
and severally liable for the acts of other partners, it is unnecessary for a court to
find that partner to be an employer for FLSA liability to attach.13
To be sure, the Eleventh Circuit may have analyzed whether a partner was
an employer for FLSA purposes in Alvarez-Perez v. Sanford-Orlando Kennel
Club, Inc., 515 F.3d 1150, 1153-55, 1160-62 (11th Cir. 2008), a case Harris cites in
passing. However, the opinion never mentioned that the defendant was a partner,
only that the defendant exercised some control over a partnership. Id. at 161.
Moreover, the plaintiff in Alvarez-Perez never argued that the defendant could
have been jointly and severally liable under state partnership law. Because
Harris never mentioned the cases partnership-specific facts in his briefs and the
The Eleventh Circuit has held that an entity that forms an enterprise with
another entity is not liable for the other entitys FLSA violations. Patel, 803 F.2d
at 636. However, a federal-law enterprise is different than a state-law
partnership. Moreover, the courts reasoning for not granting enterprise-wide
liability does not apply to partnerships, namely that Congress did not intend to
disregard the personal liability shield which is one of the major purposes of doing
business in the corporate form. Id.
13

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Eleventh Circuit did not discuss the partnership issue in depth, the Court does
not find at this stage of the litigation that Alvarez-Perez mandates that Plaintiffs
FLSA claim is futile on this basis.
Defendant also argues that because FLSA violations are federal claims,
state partnership law should not apply. The Court disagrees. Contrary to what
Defendant argues, if partners are jointly and severally liable for the debts of the
partnership under state law, partners can be liable for the FLSA violations of the
partnership. Fegley v. Higgins, 19 F.3d 1126, 1131-32 (6th Cir. 1994). The Sixth
Circuit reached this conclusion without needing to determine whether the
partners were also employers. Id.14
The Eleventh Circuit has also demonstrated this principle, albeit with
another federal statute. See Canadyne-Georgia Corp. v. NationsBank, N.A.
(South), 183 F.3d 1269, 1275 (11th Cir. 1999) (As an example, if a partnership
were directly liable [under CERCLA] as an owner of the land, then the general
partners in that partnership might be indirectly liable.).15 Accordingly, the

This ruling has been reconceptualized as partners of an association that was

an employer are also employers under the FLSA. Reich v. PTC Career Inst. of
Pa., Inc., 1994 WL 283681 (E.D. Pa. June 24, 1994) (citing Fegley, 19 F.3d at
1131-32).
14

Similarly, though Harris would not be directly liable under the FLSA if he was
not an employer, he could still be indirectly liable under partnership law.

15

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Server Plaintiffs amendments to their FLSA counts are not futile and Plaintiffs
Motion to Amend is GRANTED as to the FLSA counts.16
2.

Breach of Contract

Davis and Simms argue that Defendants breached the contracts they had
with Davis and Simms by not paying Davis and Simms their salary and bonuses
pursuant to the contracts. Harris argues that because he did not sign Davis and
Simmss contracts, he is not a party to those contracts and cannot be bound by
them.
In a general partnership, all partners are jointly and severally liable for all
debts, obligations, and liabilities of the partnership. O.C.G.A. 14-8-15(a).
[T]he partners, as to partnership debts, are joint contractors; and each is the
agent of the other to a limited extent. Southcom Group, Inc. v. Plath, 570 S.E.2d
341, 342-43 (Ga. Ct. App. 2002). Under O.C.G.A. 9-2-20, an action on contract
may only be brought against the party who made [the contract] in person or by
agent. (emphasis added).

Harris also argues in his response brief that the Court does not have subject
matter jurisdiction over him because he is not an employer under the FLSA and
therefore the relief sought against him personally does not spring from federal
law. Dkt. No. [27] at 3. However, subject matter jurisdiction concerns whether a
federal court can hear a category of cases, not whether that court has jurisdiction
over an individual defendant. The latter issue is the domain of personal
jurisdiction. See Ruhgras AG v. Marathon Oil Co., 526 U.S. 574 (1999)
(Jurisdiction to resolve cases on the merits requires both authority over the
category of claim in suit (subject-matter jurisdiction) and authority over the
parties (personal jurisdiction).
16

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Because general partners act as agents to one another in partnership

matters, as alleged in the Complaint, Hughes acted as Harriss agent when
Hughes signed Davis and Simmss contracts. Thus, Harris was a party to Davis
and Simmss contracts and can be sued for breaching those contracts. See Pullar
v. Gen. MD Grp., 2013 WL 5284684, at *3 (N.D. Ga. Sept. 17, 2013) (denying
motion to dismiss breach of contract claim against partner who did not sign the
contract because partner was a party to the contract through his agent-co partner
that did sign the contract). Accordingly, Davis and Simmss amendments to their
breach of contract count are not futile and Plaintiffs Motion to Amend is
GRANTED as to the breach of contract count.
3.

Lawful Wages (O.C.G.A. 34-7-2 and 51-1-6)

Plaintiffs argue that Defendants violated O.C.G.A. 34-7-2 when

Defendants refused to give Plaintiffs their last paychecks after Plaintiffs quit
working for Defendants. Harris argues that because O.C.G.A. 34-7-2 does not
provide a cause of action independent from a breach of contract claim, Plaintiffs
must identify the alleged contracting party liable for wages.
O.C.G.A. 34-7-2 provides, in relevant part, that payment dates shall be
such that the month will be divided into at least two equal periods ; and . . . that
the payments made on each date shall in every case correspond to the full net
amount of wages or earnings due. O.C.G.A. 34-7-2(b). Moreover, O.C.G.A.
51-1-6 provides that [w]hen the law requires a person to perform an act for the
benefit of another . . . although no cause of action is given in express terms, the
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injured party may recover for the breach of such legal duty if he suffers damage
thereby. O.C.G.A. 51-1-6.
Despite Harriss arguments to the contrary, the Proposed Amended
Complaint sufficiently identifies managing partner Hughes as the contracting
party liable for wages. This is particularly true because Plaintiffs allege that
Hughes was the one who refused to give Plaintiffs their last paycheck and
otherwise acted as Plaintiffs employer. See Preston v. Settle Down Enters., Inc.,
90 F. Supp. 2d 1267, 1277 (N.D. Ga. 2000) (analyzing whether defendant was a
contractual employer as a prerequisite for O.C.G.A. 34-7-2 liability). And, because
Harris is jointly and severally liable for the actions of his co-partner Hughes,
Plaintiffs lawful wages claim is appropriate as to Harris.
Harris also argues that O.C.G.A. 51-1-6 does not provide a cause of action
for a failure to pay lawful wages claim because O.C.G.A. 51-1-6 concerns tort law
damages and failure to pay wages is not a tort. Dkt. No. [25] at 17. However,
whether failure to pay lawful wages is a tort is irrelevant; O.C.G.A. 34-7-2
establishes a legal duty to pay wages in a certain manner, and O.C.G.A. 51-1-6
provides that violating such a legal duty is negligence per se. See Hines v. Midfirst
Bank, 2014 WL 12088559, at *13 (analyzing O.C.G.A. 51-1-6 as negligence per
se). Moreover, courts have found that O.C.G.A. 34-7-2 provides an independent
cause of action when paired with O.C.G.A. 51-1-6. See Preston, 90 F. Supp. 2d at
1277 n.2 (analyzing O.C.G.A. 34-7-2 claim independently and noting that

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although no express right of action is provided for violations of O.C.G.A. 34-7-2,

plaintiff could recover based on O.C.G.A. 51-1-6).
Accordingly, Plaintiffs amendments to their failure to pay lawful wages
count are not futile and Plaintiffs Motion to Amend is GRANTED as to the
lawful wages count.
4. Deceptive Business Practices (O.C.G.A. 16-950 and 51-1-6)
Plaintiffs argue that Defendants engaged in deceptive business practices in
violation of O.C.G.A. 16-9-50 when, among other things, Defendants billing
software required the Server Plaintiffs to claim nonexistent tips and logged them
out prematurely during their shifts. Harris argues that Plaintiffs claim should be
dismissed because Plaintiffs improperly invoke the criminal code for a civil cause
of action.
Under Georgia law, the violation of a criminal statute does not
automatically give rise to a civil cause of action. Am. Gen. Life & Acc. Ins. Co. v.
Ward, 509 F. Supp. 2d 1324, 1330 (N.D. Ga. 2007) (quoting Oswald v. Am. Natl
Can Co., 392 S.E.2d 26, 27 (Ga. Ct. App. 1990)). Instead, where a criminal
statute evidences no intent to create a private cause of action, civil liability must
be determined upon the applicable provisions of [state] tort law, if any. Am.
Gen., 509 F. Supp. 2d at 1330 (quoting Rolleston v. Huie, 400 S.E.2d 349, 351
(Ga. Ct. App. 1990)).

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O.C.G.A. 16-9-50 does not purport to create a private cause of action.

Plaintiffs try to get around this by using O.C.G.A. 51-1-6 to provide the cause of
action. That provision states: When the law requires a person to . . . refrain from
doing an act which may injure another, although no cause of action is given in
express terms, the injured party may recover for the breach of such legal duty if
he suffers damage thereby. O.C.G.A. 51-1-6. However, where the legislature did
not intend to create additional implicit remedies for violations of criminal
statutes, O.C.G.A. 51-1-6 does not create a private right of action for the plaintiff
to obtain damages.17 Jastram v. Williams, 623 S.E.2d 686, 687 (Ga. Ct. App.
2005) (emphasis added). Accordingly, Plaintiffs amendments to their deceptive
business practices count are futile, Plaintiffs Motion to Amend is DENIED as to
their deceptive business practices count.
5.

Fraud

Plaintiffs argue that Hughes committed fraud when he told Plaintiffs that
they would get paid for working during the Grand Opening and New Years Eve
Celebrations and then did not pay them. Harris argues that this claim should be
dismissed as to him because it does not satisfy the heightened Rule 9(b) pleading
standard and does not meet any of the elements of fraud.
In alleging fraud or mistake, a party must state with particularity the
circumstances constituting fraud or mistake. FED. R. CIV. P. 9(b). The
This is in contrast to the use of O.C.G.A. 51-1-6 in conjunction with
noncriminal statutes like O.C.G.A. 34-7-2.
17

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particularity rule serves an important purpose in fraud actions by alerting

defendants to the precise misconduct to which they are charged and protecting
defendants against spurious charges of immoral and fraudulent behavior.
Ziemba v. Cascade Intl, Inc., 256 F.3d 1194, 1202 (11th Cir. 2001) (internal
quotations removed). To satisfy this standard, a plaintiff alleging fraud must
state:
(1) precisely what statements were made . . . and (2) the time and
place of each statement and the person responsible for making . . .
same, and (3) the content of such statements and the manner in
which they misled the plaintiff, and (4) what the defendants
obtained as a consequence of the fraud.
Id.
The Server Plaintiffs allege that Hughes told them that they would be
paid for working during the September 1, 2015 Grand Opening of the
Restaurant, and that gratuity was included in the price the public paid. The
Server Plaintiffs contend that they were not paid after the Grand Opening,
and that Hughes would never tell them why they were not paid. The Server
Plaintiffs also contend that they only worked the Grand Opening because
Hughes told them that gratuity had already been paid by the public. A
similar scenario occurred during New Years Eve as well, according to the
Server Plaintiffs.
The Server Plaintiffs detail the precise statements made, namely that
if the Server Plaintiffs worked, they would get paid, and that the gratuity
had already been paid by the public. They allege that Hughes was
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responsible for making the statements, and that the Server Plaintiffs were
misled into thinking that they would get paid for working those dates. They
allege that the Defendants received free labor as a consequence of the
fraud. Also, because the Server Plaintiffs specified the dates they worked
without getting paid, Defendants are aware of the general time and place
the statements were made. These combined allegations alert Harris to the
precise misconduct with which he and the other Defendants are charged.
Harris also argues that the tort of fraud has five elements, and the
Proposed Amended Complaint contains no allegation whatsoever that
Harris engaged in conduct even establishing a single element of fraud
under Georgia law. Dkt. No. [25] at 19-20. However, because Harris is
jointly and severally liable for Hughess statements that occur in the
ordinary course of business of the Restaurant Partnership, Plaintiffs have
sufficiently pled the elements of fraud against Harris. Accordingly, the
Server Plaintiffs amendments to their fraud count are not futile and the
Server Plaintiffs Motion to Amend is GRANTED as to their fraud count.
6.

Attorneys Fees and Punitive Damages

Whether Plaintiffs are entitled to litigation expenses and punitive

damages depends on the mind set and culpability of Defendants, which presents
questions of fact for a jury. Alliant Tax Credit Fund 31-A, Ltd. v. Murphy, 2014
WL 3955642, at *12 (N.D. Ga. Aug. 12, 2014). Plaintiffs have specially pleaded for
attorneys fees, litigation costs, and punitive damages, and several of Plaintiffs
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substantive causes of action against Harris remain in this litigation. Accordingly,

Plaintiffs amendments to their attorneys fees and punitive damages counts are
not futile and Plaintiffs Motion to Amend is GRANTED as to their attorneys
fees and punitive damages counts.
III.

HARRISS MOTION TO DISMISS

A claim is subject to dismissal where the facts as pleaded do not state a

claim for relief that is plausible on its face. Fed. R. Civ. P. 12(b)(6); Ashcroft v.
Iqbal, 556 U.S. 662, 679 (2009) ([O]nly a complaint that states a plausible claim
for relief survives a motion to dismiss.); Bell Atl. Corp. v. Twombly, 550 U.S.
544, 56162, 570 (2007) (retiring the no set of facts pleading standard
established in Conley v. Gibson, 355 U.S. 41, 4546 (1957)). In Iqbal, the
Supreme Court reiterated that although Rule 8 of the Federal Rules of Civil
Procedure does not require detailed factual allegations, it does demand more
than an unadorned, the-defendant-unlawfully-harmed-me accusation. Iqbal,
556 U.S. at 678. In Twombly, the Supreme Court emphasized that a complaint
requires more than labels and conclusions, and a formulaic recitation of the
elements of a cause of action will not do. 550 U.S. at 555. Factual allegations in a
complaint need not be detailed, but must be enough to raise a right to relief
above the speculative level on the assumption that all the allegations in the
complaint are true (even if doubtful in fact). Id. (internal citations and emphasis
omitted). A complaint is plausible on its face when it provides the factual content

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necessary for the court to draw the reasonable inference that the defendant is
liable for the misconduct alleged. Iqbal, 556 U.S. at 678.
As discussed earlier, the futility standard for Plaintiffs Motion to Amend is
the same as the standard for Harriss Motions to Dismiss.18 The amendments to
Plaintiffs FLSA, breach of contract, lawful wages, fraud, attorneys fees, and
punitive damages counts are not futile because those counts are not still subject
to dismissal. Accordingly, Harriss Motion to Dismiss is DENIED as to those
counts. However, the amendments to Plaintiffs deceptive business practices
count are futile because that count is still subject to dismissal. Accordingly,
Harriss Motion to Dismiss is GRANTED as to that count.
IV.

CONCLUSION

Plaintiffs Motion to Amend [16] is DENIED as to Plaintiffs deceptive

business practices count and GRANTED as to all other counts. Harriss Motion
to Dismiss [11] is GRANTED as to Plaintiffs deceptive business practices count
and DENIED as to all other counts. The Clerk is DIRECTED to docket
Plaintiffs Proposed Amended Complaint [16-1] as the operative complaint in this
matter.

See Hall v. United Ins. Co. of Am., 367 F.3d 1255, 1263 (11th Cir. 2004)
(Denial of leave to amend is justified by futility when the complaint as amended
is still subject to dismissal.) (quoting Burger King Corp. v. Weaver, 169 F.3d
1310, 1320 (11th Cir. 1999)).

18

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IT IS SO ORDERED this 18th day of January, 2017.

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