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Hampton v. Navigation Capital Partners, Inc.

United States District Court, D. Delaware

August 19, 2014

DANIEL HAMPTON, on behalf of himself and all others similarly situated, Plaintiff,

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Frederick Brian Rosner, Julia Bettina Klein, THE ROSNER LAW GROUP, LLC, Wilmington, DE; Jack A. Raisner, Roupinian S. Rene, OUTTEN & GOLDEN, LLP, New York, NY, Attorneys for Plaintiffs.

Kathleen Furey McDonough, Michael Brendan Rush, POTTER ANDERSON & CORROON, LLP, Wilmington, DE; Flora Manship, James H. Coil, III, KILPATRICK, TOWNSEND & STOCKTON, LLP, Atlanta, GA, Attorneys for Defendant.

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Leonard P. Stark, U.S. District Judge.

Presently before the Court is Defendant's Motion to Dismiss Plaintiff's Claims. (D.I. 8) Defendants filed the motion on June 3, 2013, and the Court heard oral argument on March 20, 2014. For the reasons discussed below, the Court will deny Defendant's motion.


I. The Parties and the Complaint

Plaintiff Daniel Hampton (" Plaintiff" ) filed this putative class action against Defendant Navigation Capital Partners, Inc. (" NCP" or " Defendant" ) alleging that Defendant and its subsidiaries, Metadigm Holdings, Inc. (" Holdings" ), Metadigm Services, Inc. (" Services" ), Metadigm Engineering, Inc. (" Engineering" ) (collectively, " Metadigm" ), terminated Plaintiff and other workers from employment in violation of the Worker Adjustment and Retraining Notification Act (" WARN Act" ), 29 U.S.C. § 2101 et seq. (D.I. 1)

NCP is a private equity firm that sought to engage in the electricity grid services market by acquiring a series of companies operating in that sector. (D.I. ¶ 2) To that end, NCP first created Holdings, retaining at least 68% of its shares, and hired an experienced industry executive, Robert Shively, for the purpose of identifying potential acquisitions for NCP in the market. ( Id. at ¶ ¶ 2, 18) NCP then purchased a metering company, which became Services, and subsequently acquired an engineering firm, which became Engineering,

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and made it a subsidiary of Services. ( Id. at ¶ ¶ 3, 4) NCP made Mr. Shively President, CEO, and a Director of Metadigm Holdings, Services, and Engineering and installed three of its partners, NCP founders Larry Mock and Eerik Giles as well as NCP Operating Partner Craig Kirsch, on the Metadigm entities' boards as directors. ( Id. at ¶ ¶ 3, 39(b)(i)-(iii)) NCP - which owned 68% of Holdings, which itself wholly-owned Services, which in turn wholly-owned Engineering - was the ultimate owner of Metadigm. ( Id. at ¶ 39(a))

On March 18, 2013, Metadigm terminated Plaintiff and other workers from employment at two of its facilities in the State of Georgia. (D.I. 1 ¶ 7) Three days later, on March 21, 2013, Metadigm filed for Chapter 7 bankruptcy in the United States Bankruptcy Court for the District of Northern Georgia. ( Id. at ¶ 8) Plaintiff filed adversary proceedings against Metadigm on March 27, 2013 in that same court. ( Id. at ¶ 9) Thereafter, on April 29, 2013, Plaintiff brought this action against NCP, seeking relief on the grounds that NCP failed to give him and roughly 150 other employees the 60 days' notice required under the WARN Act. ( Id. at ¶ 10)

II. The WARN Act

Congress enacted the WARN Act in 1986 in response to extensive worker dislocation occurring throughout the 1970s and 1980s as a result of companies being acquired, merging, or closing. See In re APA Transp. Corp. Consol. Litig., 541 F.3d 233, 239-40 (3d Cir. 2008). Not only did employees working at these companies often lose their jobs without any notice, but at times the projected closing was actively concealed from the employees. See Hotel Employees & Rest. Employees Int'l Union Local 54 v. Elsinore Shore Associates, 173 F.3d 175, 182 (3d Cir. 1999). Thus the stated purpose of the WARN Act is " to allow workers to adjust to the prospective loss of employment, to seek and obtain alternative jobs and . . . to enter skill training or retraining that will allow [them] to successfully compete in the job market." Id. (internal quotation marks omitted). Therefore, the " thrust of WARN is to give fair warning in advance of prospective plant closings." Id.

Giving effect to this intent, the WARN Act requires that employers employing at least 100 full time employees provide 60 days written notice prior to a plant shutdown or a mass layoff. See 29 U.S.C. § 2101 et seq. Employers that violate the WARN Act's notice requirement are liable to the affected workers for each day notice is not provided, for up to 60 days. See 29 U.S.C. § 2104(a).


I. Rule 12(b)(6)

The sufficiency of pleadings for non-fraud cases is governed by Rule 8 of the Federal Rules of Civil Procedure, which requires " a short and plain statement of the claim showing that the pleader is entitled to relief." When presented with a Rule 12(b)(6) motion to dismiss for failure to state a claim, courts conduct a two-part analysis. See Fowler v. UPMC Shadyside, 578 F.3d 203, 210 (3d Cir. 2009). First, courts separate the factual and legal elements of a claim, accepting " all of the complaint's well-pleaded facts as true, but [disregarding] any legal conclusions." Id. at 210-11. This step requires courts to draw all reasonable inferences in favor of the non-moving party. See Maio v. Aetna, Inc., 221 F.3d 472, 500 (3d Cir. 2000). However, the Court is not obligated to accept as true " bald assertions," Morse v. Lower Merion Sch. Dist., 132 F.3d 902, 906 (3d Cir. 1997) (internal quotation marks omitted), " unsupported conclusions and un

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warranted inferences," Schuylkill Energy Res., Inc. v. Pa. Power & Light Co., 113 F.3d 405, 417 (3d Cir. 1997), or allegations that are " self-evidently false," Nami v. Fauver, ...

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