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Lopez v. Ram Shirdi Inc.

United States District Court, N.D. Illinois, Eastern Division

August 26, 2014

JOSE LOPEZ, Plaintiff,
RAM SHIRDI INC., ET AL., Defendants.


MANISH S. SHAH, District Judge.

Plaintiff seeks to pierce the corporate veil and hold his former employers personally liable for retaliation in violation of Title VII of the Civil Rights Act and the Illinois Human Rights Act. Plaintiff also seeks to hold these individuals personally liable for failing to pay him overtime in violation of the Fair Labor Standards Act and the Illinois Minimum Wage Law. Defendants Vivak Khanna and Ajai Agnihotri, the owners of the now-bankrupt companies at issue, move to dismiss the complaint for lack of subject matter jurisdiction, arguing that the bankruptcy trustee alone has standing to bring these claims. These defendants further contend that plaintiff has failed to state a veil-piercing claim. For the following reasons, the motions are granted in part, and denied in part. The complaint is dismissed without prejudice for failure to state a claim.

I. Legal Standards

A. Standard Under Rule 12(b)(1)

The standard under Rule 12(b)(1) depends on the motion's claim. See Apex Digital, Inc. v. Sears, Roebuck & Co., 572 F.3d 440, 443-44 (7th Cir. 2009). If a defendant challenges the sufficiency of the allegations regarding subject matter jurisdiction, the court must accept all well-pleaded factual allegations as true and draw all reasonable inferences in favor of the plaintiff. See Apex Digital, 572 F.3d at 443-44; G & S Holdings LLC v. Continental Casualty Co., 697 F.3d 534, 539 (7th Cir. 2012). If, however, the defendant denies or controverts the truth of the jurisdictional allegations, the court may look beyond the pleadings and view any evidence submitted to determine if subject matter jurisdiction exists. See Apex Digital, 572 F.3d at 443-44. "Where jurisdiction is in question, the party asserting a right to a federal forum has the burden of proof, regardless of who raises the jurisdictional challenge...." Craig v. Ontario Corp., 543 F.3d 872, 876 (7th Cir. 2008).

B. Standard Under Rule 12(b)(6)

"A motion under Rule 12(b)(6) tests whether the complaint states a claim on which relief may be granted." Richards v. Mitcheff, 696 F.3d 635, 637 (7th Cir. 2012). Under Rule 8(a)(2), a complaint must include "a short and plain statement of the claim showing that the pleader is entitled to relief." Fed.R.Civ.P. 8(a)(2). The short and plain statement under Rule 8(a)(2) must "give the defendant fair notice of what the claim is and the grounds upon which it rests." Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007) (quotation omitted). Under the federal notice pleading standards, a plaintiff's "[f]actual allegations must be enough to raise a right to relief above the speculative level...." Twombly, 550 U.S. at 555. Put differently, a "complaint must contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face.'" Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Twombly, 550 U.S. at 570). "In reviewing the sufficiency of a complaint under the plausibility standard, [the court] accept[s] the well-pleaded facts in the complaint as true...." Alam v. Miller Brewing Co., 709 F.3d 662, 665-66 (7th Cir. 2013).

II. Background

Defendant Vivak Khanna was president of the defendant corporations, Ram Shirdi, Inc. and American Hotel Partners, Inc., and defendant Ajai Agnihotri was their secretary. Dkt. 151 ¶¶46-47. At all relevant times, defendants[1] each owned 50 percent of these corporations. Id. ¶¶ 48-50. Defendants and their corporations were in the business of operating hotels. See id. ¶ 79.

In September 2009, defendants hired plaintiff Jose Lopez as a maintenance worker for their Motel 6 in Calumet Park, Illinois. Dkt. 151 ¶¶ 84-85. Plaintiff was never paid any overtime even though he regularly worked more than 40 hours a week. Id. ¶¶ 116-18.

Starting in December 2009, plaintiff became aware that a manager working for defendants, Pervez Akhtar, was sexually harassing some of defendants' female employees. Id. ¶¶ 25, 88-97. When plaintiff complained of Akhtar's behavior to Vivak, Vivak asked plaintiff for a list of all the women Akhtar had been harassing. Id. ¶ 98. Plaintiff gave Vivak the list as well as other details about Akhtar's harassment. Id. ¶ 99-101. Although Vivak told plaintiff he would look into it, Vivak never again spoke with plaintiff about the issue. Id. ¶ 102. Instead, Vivak terminated plaintiff a few weeks later. Id. ¶ 103.

Plaintiff filed this suit on October 14, 2010, alleging retaliation in violation of Title VII of the Civil Rights Act, 42 U.S.C. § 2000e, et seq., and the Illinois Human Rights Act, 775 ILCS 5/6-101, et seq., and failing to pay overtime in violation of the Fair Labor Standards Act, 29 U.S.C. § 201, et seq., and the Illinois Minimum Wage Law, 820 ILCS 105/1, et seq. Plaintiff originally named Ram Shirdi and American Partners as sole defendants, but he later amended his complaint to name Vivak Khanna and Ajai Agnihotri as well (likely because both corporations filed for bankruptcy on June 20, 2013, see Case Nos. 13-BK-25356 and 13-BK-25358 (N.D. Ill. Bankr.)). Dkt. 5; Dkt. 151. Although plaintiff brings his four substantive claims against only the corporations, he also seeks to hold defendants personally liable by piercing the corporate veil.[2] See Dkt. 151.

Defendants move to dismiss plaintiff's complaint, arguing that he lacks standing to bring a veil-piercing claim and, thus, that I lack subject matter jurisdiction. Dkt. 160; Dkt. 166. Defendants also move to dismiss on the ground ...

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