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Sneed v. Wireless PCS Ohio #1, LLC

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

March 6, 2017

BRADFORD SNEED, Plaintiff,
v.
WIRELESS PCS OHIO #1, LLC, et al., Defendants.

          MEMORANDUM OPINION & ORDER

          THOMAS M. PARKER, MAGISTRATE JUDGE

         I. Introduction

         Plaintiff claims defendants employed him from May 1, 2015 through February 1, 2016 and didn't pay him the overtime required by the Fair Labor Standards Act (“FLSA”).[1]Defendants filed a joint answer, and in a counterclaim[2] alleged that plaintiff didn't do the work for which he was paid and also stole credit card information from their customers and other items from their stores. Defendants have not clearly identified the causes of action they are attempting to assert against plaintiff.[3]

         Plaintiff moves to dismiss defendants' counterclaim under Fed.R.Civ.P. 12(b)(1) for lack of jurisdiction and under Fed.R.Civ.P. 12(b)(6) for failure to state a claim. Plaintiff contends that the defendants' counterclaims are not compulsory because they arise out of a different occurrence, and that the court should not exercise supplemental jurisdiction over them.

         Defendants argue in response that their counterclaim contains both compulsory and permissive claims. They assert that both parties' claims involve the same agreement. They request that the court deny plaintiff's motion to dismiss and retain jurisdiction over the permissive claims. The parties have consented to the jurisdiction of the magistrate judge under 28 U.S.C. §636(c).[4]

         Defendants' counterclaims are not compulsory; they do not arise from the same transaction or occurrence that is the subject matter in plaintiff's claims. The court declines to exercise supplemental jurisdiction over defendants' counterclaims because they would predominate over plaintiff's claim for a violation of the FLSA and would change the entire nature of this lawsuit. Plaintiff's motion to dismiss for lack of jurisdiction will be GRANTED and defendants' counterclaims will be DISMISSED.

         II. Standard of Review

         Plaintiff moves to dismiss the counterclaims for lack of subject matter jurisdiction pursuant to Fed.R.Civ.P. 12(b)(1). The court has federal subject matter jurisdiction over plaintiff's complaint under 28 U.S.C. § 1331 because it asserts a claim for violation of the FLSA, 29 U.S.C. § 201, et seq. The court must determine whether it also has jurisdiction over defendants' counterclaims.

         The determination of whether the court should exercise supplemental jurisdiction is closely related to the analysis of whether defendants' counterclaims are compulsory or permissive. Fed.R.Civ.P. 13(a)(1)(A) makes the pursuit of a counterclaim compulsory when it arises “out of the transaction or occurrence that is the subject matter of the opposing party's claim.” Counterclaims that are not compulsory may be asserted permissively. Fed.R.Civ.P. 13(b). Similarly, 28 U.S.C. § 1367 grants supplemental jurisdiction to district courts over “all other claims that are so related to claims in the action within such original jurisdiction that they form part of the same case or controversy under Article III of the United States Constitution.” Basically, the court must determine whether the counterclaims arise out of the same transaction or controversy asserted in plaintiff's original claims.

         28 U.S.C. § 1367(c) guides the court in determining whether supplemental jurisdiction should be exercised. It provides that “[t]he district courts may decline to exercise supplemental jurisdiction over a claim under subsection (a) if:

(1) the claim raises a novel or complex issue of State law,
(2) the claim substantially predominates over the claim or claims over which the district court has original jurisdiction,
(3) the district court has dismissed all claims over which it has original ...

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