ROBERT KENNEY, individually and on behalf of all others similarly situated, Plaintiff-Appellee,
HELIX TCS, INC., Defendant-Appellant.
from the United States District Court for the District of
Colorado (D.C. No. 1:17-CV-01755-CMA-KMT)
D. Factor, (Jeremy T. Jonsen and Carissa V. Sears, with him
on the briefs) Allen Vellone Wolf Helfrich & Factor,
P.C., Denver, Colorado, for Defendant-Appellant.
Lyndsay R. Itkin, (Michael Andrew Josephson, with her on the
brief) Josephson Dunlap Law Firm, Houston, Texas for
HARTZ, SEYMOUR, and EID, Circuit Judges.
SEYMOUR, CIRCUIT JUDGE
Robert Kenney is a former employee of Defendant Helix TCS,
Inc. ("Helix"), which provides security services
for businesses in Colorado's state-sanctioned marijuana
industry. Mr. Kenney filed this lawsuit against Helix under
the Fair Labor Standards Act ("FLSA"), 29 U.S.C.
§§ 201–219, alleging that Helix misclassified
him and similarly situated workers as exempt from the
FLSA's overtime obligations. Helix moved to dismiss Mr.
Kenney's claim based on the Controlled Substance Act
("CSA"), 21 U.S.C. §801, et seq,
arguing that Mr. Kenney's employment activities are in
violation of the CSA and are thus not entitled to FLSA
protections. The district court denied Helix's motion to
dismiss. We affirm.
approximately February 2016 and April 2017, Mr. Kenney worked
as a security guard for Helix. Mr. Kenney alleges that he and
other similarly situated security guards regularly worked
more than forty hours per week. Nevertheless, Helix
classified these workers as exempt employees under the FLSA
and paid them a salary instead of overtime. Mr. Kenney
initiated this action against Helix under the collective
action provisions of the FLSA, see 29 U.S.C. §
216(b), contending that Helix misclassified the security
guards as exempt employees even though they frequently
performed non-exempt job duties. He claims Helix is in
violation of 29 U.S.C. § 207(a) by willfully failing to
provides security, inventory control, and compliance services
to the marijuana industry in Colorado. Kenney v. Helix
TCS, Inc., 284 F.Supp. 3d 1186');">284 F.Supp. 3d 1186, 1188 (D. Colo. 2018).
Mr. Kenney's job duties at Helix included monitoring
security cameras, patrolling assigned locations,
investigating and documenting all facility-related incidents,
and enforcing client, local, state, and federal policies and
regulations. Id. Helix asserts that the FLSA does
not apply to workers such as Mr. Kenney because
Colorado's recreational marijuana industry is in
violation of the Controlled Substances Act. It
therefore moved to dismiss Mr. Kenney's FLSA claim for
want of jurisdiction under Rule 12(b)(1) of the Federal Rules
of Civil Procedure or, alternatively, under Rule 12(b)(6) for
failure to state a claim.
district court denied Helix's motion to dismiss and then
certified Helix's interlocutory appeal of its order.
Exercising jurisdiction pursuant to 28 U.S.C. § 1292(b),
parties agree that we review de novo the district
court's denial of Helix's motions to dismiss. A Rule
12(b)(1) motion to dismiss only requires the court to
determine whether it has authority to adjudicate the matter.
Helix argued below that the district court lacked subject
matter jurisdiction because there is no federal interest at
stake. The district court correctly rejected this argument,
identifying it as a challenge to the legal sufficiency of Mr.
Kenney's claims rather than the jurisdiction of the
federal courts. Kenney, 284 F.Supp. 3d at 1189
(citing Arbaugh v. Y & H Corp., 546 U.S. 500,
516 (2006) (holding statute's definitional requirement of
who qualifies as employer "is an element of a
plaintiff's claim for relief, not a jurisdictional
issue")). Helix only cursorily mentioned this argument
in its opening brief and dropped the issue entirely in its
12(b)(6) motion to dismiss requires the court to evaluate the
sufficiency of the plaintiff's allegations. "At this
stage in the litigation, we accept as true the well pleaded
factual allegations and then determine if the plaintiff has
provided enough facts to state a claim to relief that is
plausible on its face." Hogan v. Winder, 762
F.3d 1096, 1104 (10th Cir. 2014) (internal citation and
quotation marks omitted). "A claim has facial
plausibility when the plaintiff pleads factual content that
allows the court to draw ...