United States District Court, D. Massachusetts
DHANANJAY PATEL, SAFDAR HUSSAIN, VATSAL CHOKSHI, DHAVAL PATEL AND NIRAL PATEL, AND ALL OTHERS SIMILARLY SITUATED, PLAINTIFFS,
7-ELEVEN, INC., DEFENDANT AND THIRD-PARTY PLAINTIFF.
DPNEWT01, DP TREMONT STREET INC., DP MILK STREET INC., DP JERSEY INC., THIRD-PARTY DEFENDANTS.
MEMORANDUM & ORDER
NATHANIEL M. GORTON, UNITED STATES DISTRICT JUDGE
a putative class action brought by Dhananjay Patel, Safdar
Hussain, Vatsal Chokshi, Dhaval Patel and Niral Patel
(collectively "named plaintiffs" or
``franchisees") on behalf of individuals who have
acquired franchises from 7-Eleven, Inc. (``7-Eleven" or
"defendant") in the Commonwealth of Massachusetts.
initially alleged that 7-Eleven and two 7-Eleven market
managers, Mary Cadigan and Andrew Brothers (collectively
``the individual defendants"), 1) misclassified its
franchisee convenience store workers in Massachusetts as
independent contractors instead of employees in violation of
the Massachusetts Independent Contractor Law, M.G.L. c. 149,
§ 148B, 2) violated the Massachusetts Wage Act (``the
Wage Act"), M.G.L. c. 149, § 148 and 3) violated
the Massachusetts Minimum Wage Law, M.G.L. c. 151,
§§ 1, 7.
Court dismissed the claims against the individual defendants
but allowed plaintiffs' claims against 7-Eleven to
proceed (Docket No. 49). Subsequently, 7-Eleven filed
counterclaims against the named plaintiffs (Docket No. 52)
and a third-party complaint against DPNEWT01, DP Tremont
Street Inc., DP Milk Street Inc. and DP Jersey Inc.
(collectively ``the third-party defendant corporations")
(Docket No. 53). The third-party defendant corporations are
limited liability companies through which three named
plaintiffs (Vatsal Choksi, Dhaval Patel and Niral Patel)
contracted to perform work for 7-Eleven.
third-party defendant corporations are subject to franchise
agreements with 7-Eleven. Those franchise agreements contain,
in relevant part, identical language with respect to
independent contractor status and indemnification. With
respect to independent contractor status, the franchise
agreements provide that
You and we agree that this Agreement creates an
arm's-length business relationship and does not create
any fiduciary, special or other similar relationship. You
agree: (a) to hold yourself out to the public as an
independent contractor; (b) to control the matter and means
of the operation of the Store; and (c) to exercise complete
control over and responsibility for all labor relations and
the conduct of your agents and employees, including the
day-to-day operations of the Store and all Store employees.
You and your agents and employees may not: (i) be considered
or held out to be our agents or employees or (ii) negotiate
or enter any agreement or incur any liability in our name, or
our behalf, or purporting to bind us or any of our or your
successors-in-interest. Without in any way limiting the
preceding statements, we do not exercise any discretion or
control over your employment policies or employment
decisions. All employees of the Store are solely your
employees and you will control the manner and means of the
operation of the Store. No actions you, your agents or
employees take will be attributable to us or be considered to
be actions obligating us.
respect to indemnification, the franchise agreements provide
You agree to be responsible for and indemnify us, our
Affiliates, and our and their respective officers, directors,
agents, representatives, employees, successors and assigns
(collectively, the ``7-Eleven Indemnified Parties") from
all losses arising out of or relating to your Store and its
operation, except those specifically the responsibility of or
indemnified by us. This indemnification will survive the
expiration, termination, or transfer of this Agreement or any
interest in this Agreement. You may obtain insurance to cover
your indemnification obligation. Your total indemnification
obligation to us will not exceed $500, 000.
their counterclaims and third-party complaint, 7-Eleven moves
for declaratory relief to void the franchise agreements and
makes claims for breach of contract and indemnification.
Pending before this Court are plaintiffs/third-party
defendants' motion to dismiss and motion for leave to
file an answer.
Plaintiffs' Motion to Dismiss Defendant's
Counterclaims and Third-Party Complaint
Standard of Review
survive a motion to dismiss under Fed.R.Civ.P. 12(b)(6), a
complaint (or a counterclaim) must contain sufficient factual
matter, accepted as true, to ``state a claim to relief that
is plausible on its face". Bell Atl. Corp.
v. Twombly, 550 U.S. 544, 570 (2007). In
considering the merits of a motion to dismiss, the Court may
look only to the facts alleged in the pleadings, documents
attached as exhibits or incorporated by reference in the
complaint and matters of which judicial notice can be taken.
Nollet v. Justices of Trial Court of
Mass., 83 F.Supp.2d 204, 208 (D. Mass. 2000), aff'd,
248 F.3d 1127 (1st Cir. 2000).
the Court must accept all factual allegations in the
complaint (or counterclaim) as true and draw all reasonable
inferences in the claimant's favor. Langadinos v.
Airu Airlines, Inc.,199 F.3d 68, 69 (1st Cir. 2000). If
the facts in the complaint are sufficient to state a cause of
action, a motion to dismiss the complaint must be denied.
See Nollet, 83 F.Supp.2d at 208. Although a court
must accept as true all the factual allegations contained in
a complaint, that doctrine is not applicable to legal
556 U.S. 662 (2009). Threadbare recitals of legal elements
which are supported by mere conclusory statements do not
suffice to state a cause of action. Id. Accordingly,