Greist v. LendUS, LLC

Summary

The Northern District of California denied CrossCountry Mortgage, LLC’s motion to dismiss claims alleging that it is liable as LendUS, LLC’s successor for wage-and-hour violations under the Fair Labor Standards Act and California law. The court held that the plaintiffs plausibly alleged CrossCountry had notice of potential employment liabilities through acquisition due diligence and that LendUS had been subsumed into CrossCountry, satisfying the pleading-stage requirements for successor liability. The court also noted that CrossCountry waived its challenge to the first successor-liability factor by raising it for the first time in reply.

Holdings

1. The amended complaint plausibly alleged facts supporting successor-in-interest liability because it alleged that CrossCountry had or should have had notice of LendUS's wage-and-hour violations during acquisition due diligence and that LendUS had been subsumed into CrossCountry, potentially limiting LendUS's ability to provide adequate relief.
2. CrossCountry waived its challenge to the bona-fide-successor factor by raising that argument for the first time in reply.

Questions Presented

1. Whether the amended complaint plausibly alleged that CrossCountry had notice of LendUS's potential wage-and-hour liabilities for purposes of successor-in-interest liability.
2. Whether the amended complaint plausibly alleged that LendUS could not provide adequate relief directly because its assets and operations had been acquired and subsumed by CrossCountry.
3. Whether CrossCountry's motion to dismiss should be denied at the pleading stage.

Disposition

other