United States District Court, D. Kansas
MEMORANDUM AND ORDER
THOMAS MARTEN, JUDGE.
employees and organizations in a collective bargaining
agreement with Williams Restoration Company, Inc.
(“Williams”), bring an Employee Retirement Income
Security Act claim against Williams and alleged successor,
Fox Holdings, Inc. (“Fox”). This matter comes
before the court on a Motion to Dismiss (Dkt. 35) filed by
Defendant Fox. For the reasons explained below,
Defendant's motion to dismiss for failure to state a
claim is denied.
Fox Holdings, Inc. moves to dismiss the Plaintiffs'
claims against it, as set forth in Plaintiffs' first
amended complaint (Dkt. 30), pursuant to Federal Rule of
Civil Procedure 12(b)(6) for failure to state a claim. Fox
also requests that the Court take judicial notice of the
documents authenticated by the affidavits of Jordan Fox and
Mark M. Schorr, which are attached to their motion to dismiss
and respectively the Asset Purchase Agreement between Fox and
Williams Restoration, Inc. and the National Labor Relations
Boards' rulings concerning a prior dispute between
Plaintiff and Defendants.
allege they are entitled to relief under a theory of
successor liability, and contend the complaint presents
factual assertions, which taken as true, state a plausible
claim for relief under the Iqbal standard for Rule 8
and the Spears standard for successor liability.
Ashcroft v. Iqbal, 556 U.S. 662, 129 S.Ct. 1937, 173
L.Ed.2d 868 (2009); Spears v. Mid-America Waffles,
Inc., No. 11-2273-CM 2011 WL 6304126 *4 (D. Kan. Dec.
reviewing a motion to dismiss, this court must look for
plausibility in the complaint . . . . Under this standard, a
complaint must include 'enough facts to state a claim to
relief that is plausible on its face.'” Corder
v. Lewis Palmer Sch. Dist. No. 38, 566 F.3d 1219,
1223-24 (10th Cir. 2009) (quoting Bell Atl. Corp. v.
Twombly, 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d
929 (2007)). “A claim has facial plausibility when the
plaintiff pleads factual content that allows the court to
draw the reasonable inference that the defendant is liable
for the misconduct alleged.” Iqbal, 129 S.Ct.
at 1949 (clarifying and affirming Twombly's
probability standard). Allegations that raise the specter of
mere speculation are not enough. Corder, 566 F.3d at
1223-24. The court must assume that all allegations in the
complaint are true. Iqbal, 129 S.Ct. at 1944.
“The issue in resolving a motion such as this is
'not whether [the] plaintiff will ultimately prevail, but
whether the claimant is entitled to offer evidence to support
the claims.'” Bean v. Norman, No.
008-2422, 2010 U.S. Dist. LEXIS 7811, 2010 WL 420057, at *2
(D. Kan. Jan. 29, 2010) (quoting Swierkiewicz v. Sorema
N.A., 534 U.S. 506, 511, 122 S.Ct. 992, 152 L.Ed.2d 1
(2002)). The Tenth Circuit utilizes a two-step process when
analyzing a motion to dismiss. Hall v. Witteman, 584
F.3d 859, 863 (10th Cir. 2009). First, the court must
identify conclusory allegations not entitled to the
assumption of truth. Id. Second, the court must
determine whether the remaining factual allegations plausibly
suggest the plaintiff is entitled to relief. Id.
evaluating whether successor liability is appropriate, Tenth
Circuit courts have considered the following factors: (1)
whether the successor company had notice of its
predecessor's legal obligation; (2) the ability of the
predecessor to provide relief; and (3) whether there has been
a substantial continuity in operations, work force, location,
management, working conditions and methods of production.
Spears v. Mid-America Waffles, Inc., No. 11-2273-CM
2011 WL 6304126 *4 (D. Kan. Dec. 16, 2011).
found that the following allegation supported a plausible
claim for successor liability:
35. Ozark Waffles, LLC is a successor in interest in that
substantial continuity of business operations exist between
Defendants Mid-America Waffles, Inc. and Ozark Waffles, LLC
in terms of the line of work, the employees, the locations,
the management in place and the name in that the same
operations continue under the Waffle House name.
36. Prior to the sale, a representative from Waffle House,
Inc. and/or Ozark Waffles, Inc. frequently and regularly
visited the facilities operated by Mid-America Waffles, Inc.
to review the manner and method in which restaurant employees
were performing duties.
common law supports successor liability when the court finds
both: (1) there is a substantial continuity of identity
between the predecessor and successor business entity; and
(2) the successor entity has notice of the obligation.
Upholsterers' Intl. Union Pension Fund v. Artistic
Furniture of Pontiac 920 F.2d 1323, 1329 (7th
Cir. 1990). Substantial continuity of identity may be
permissible when five conditions are present: (1) continuity
of employees between the predecessor and successor; (2)
continuity of management personnel between the predecessor
and successor; (3) continuity of equipment, tools and plant
between the predecessor and successor; (4) continuity of
customers between the predecessor and successor; and (5)
continuity of the type of work performed by the predecessor
and successor. Id.
must consider a complaint in its entirety, as well as other
sources courts ordinarily examined when ruling on 12(b)(6)
motions to dismiss. These may include documents referred to
in the complaint if the documents are central to the
plaintiff's claim and are undisputed, and matters of
which a court may take judicial notice. Tellabs,
Inc. v. Makor Issues & Rights, Ltd., 551 U.S.
308, 322 (2007); Alvarado v. KOB-TV, L.L.C., 493
F.3d 1210, 1215 (10th Cir. 2007); Tal v. Hogan, 453
F.3d 1244, 1264 n.24 (10th Cir. 2006).
court may take judicial notice of adjudicative facts and
facts that are not subject to reasonable dispute. Fed.R.Evid.
201(a), (b). Adjudicative facts fall into one of two
categories: (1) facts that are “generally known within
the territorial jurisdiction of the trial court”; or
(2) facts that are “capable of accurate and ready
determination by resort to sources whose accuracy cannot
reasonably be questioned.” Fed.R.Evid. 201(b). When the
interpretation of a document is subject to a reasonable
dispute, and the document is being offered for the truth of
its content, judicial notice of the document may be
unwarranted. See Southmark Prime Plus, L.P. v.
Falzone, 776 F.Supp. 888, 893 (D. Del. 1993) (explaining
that judicial notice of a letter sent between two defendants
was unwarranted because the content of the letter addressed a
disputed fact and the accuracy of this fact could reasonably
be questioned); Patel v. Parnes, 253 F.R.D. 531, 546
(C.D. Cal. 2006) (explaining ...