United States District Court, E.D. Louisiana
ORDER AND REASONS
ZAINEY, UNITED STATES DISTRICT JUDGE
the Court is a Motion to Dismiss (Rec. Doc.
19) filed by Plaintiff Ashley Lund. Defendants
Hové Parfumeur Ltd., Bill Wendel, and Amy Van
Calsem-Wendel (herein after collectively referred to as
“Defendants”) oppose the Motion (Rec. Doc. 22).
The Motion, set for submission on November 28, 2018, is
before the Court on the briefs without oral argument. Having
considered the motion and memoranda of counsel, the
opposition, the record, and the applicable law, the Court
finds that the Motion to Dismiss (Rec. Doc.
19) is GRANTED for the reasons set
Lund brought claims against her former employer under the
Fair Labor Standards Act (“FLSA”). (Rec. Doc. 1).
She alleged that Defendants failed to pay one-and-a-half
times per hourly rate for all hours worked in excess of a
forty-hour workweek. (Id.). Defendants filed a
counterclaim alleging that Lund stole and used confidential
information to unjustly enrich herself in violation of the
Louisiana Trade Secrets Act (“LTSA”) and the
Louisiana Unfair Trade Practices Act (“LUPTA”).
(Rec. Doc. 24). Lund files the instant motion to dismiss
Defendants' counterclaims involving the LTSA and the
LUPTA for lack of subject matter jurisdiction. (Rec. Doc.
courts are courts of limited jurisdiction and may only hear
those cases authorized by the United States Constitution and
federal statutes. Coury v. Prot, 85 F.3d 244, 248
(5th Cir. 1996). Rule 12(b)(1) of the Federal Rules of Civil
Procedure provides that a party may assert that a court lacks
subject matter jurisdiction. “A case is properly
dismissed for lack of subject matter jurisdiction when the
court lacks the statutory or constitutional power to
adjudicate the case.” Home Builders Ass'n of
Miss., Inc. v. City of Madison, Miss., 143 F.3d 1006,
1010 (5th Cir. 1998). “Courts may dismiss for lack of
subject matter jurisdiction on any one of three different
bases: (1) the complaint alone; (2) the complaint
supplemented by undisputed facts in the record; or (3) the
complaint supplemented by undisputed facts plus the
court's resolution of disputed facts.” Clark v.
Tarrant Cnty., 798 F.2d 736, 741 (5th Cir. 1986). The
burden of proof on a 12(b)(1) motion is on the party
asserting jurisdiction over the claim. Ramming v. United
States, 281 F.3d 158, 161 (5th Cir. 2001).
to 28 U.S.C. § 1367, district courts shall only exercise
supplemental jurisdiction “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.” A court may assert supplemental
jurisdiction over any state law claims that do not
independently satisfy original jurisdiction, if the state law
claims are part of the same case or controversy as a federal
claim over which the court has original jurisdiction.
Energy Management Services, LLC v. City of
Alexandria, 739 F.3d 255, 259 (5th Cir. 2014). The
Supreme Court has held that “federal-question
jurisdiction over a claim may authorize a federal court to
exercise jurisdiction over state-law claims that may be
viewed as part of the same case because they ‘derive
from a common nucleus of operative fact' as the federal
claim.” DaimlerChrysler Corp. v. Cuno, 547
U.S. 332, 351 (2006) (quoting United Mine Workers v.
Gibbs, 383 U.S. 715, 725 (1966)).
asserts that Defendants' counterclaims should be
dismissed for lack of subject matter jurisdiction because
they are state law claims that do not share the same
operative facts as her FLSA claim. (Rec. Doc. 19, p. 1).
Neither the LUPTA nor the LTSA counterclaim rely on the same
operative facts as the Lund's FLSA claim concerning
wages, hours, and overtime. (Id., p. 2). Lund
concludes that the fact that Defendants' counterclaims
arise out of the same employment relationship is not enough
to confer supplemental jurisdiction. (Id.).
argue that the Court may exercise jurisdiction on all claims
because the counterclaims share a common nucleus of operative
fact such that the presentation of common evidence requires
this Court to make many of the same factual determinations.
(Rec. Doc. 24, p. 9). Defendants state that the discovery
necessary for the FLSA claim regarding Lund's managerial
role, job duties, and responsibilities is also necessary to
determine the scope of the duty Lund may have owed to
Defendants under the LUPTA and LTSA claims. (Rec. Doc. 22, p.
3). The execution of Lund's job duties and the details of
her employment are also facts that arise as relevant to
Plaintiff's claim and Defendants' counterclaims.
(Id.). Defendants assert that allowing the claims to
be heard together promotes judicial efficiency and
convenience. (Id., p. 4).
Fifth Circuit in Martin held that it continues to
look with disfavor on employer counterclaims in FLSA cases.
Martin v. PepsiAmericas, Inc. 628 F.3d 738, 742 (5th
Cir. 2010). “Generally speaking, courts have been
hesitant to permit an employer to file counterclaims in FLSA
suits for money the employer claims the employee owes it, or
for damages the employee's tortious conduct allegedly
caused.” Id. at 740. The court reasoned that
the purpose of FLSA actions is to bring the employer into
compliance with the FLSA by enforcing a public right, and
allowing the employer to try his private claims against his
employees would delay and subvert the process. Id.
at 741 (citing Donovan v. Pointon, 717 F.2d 1320,
1323 (10th Cir. 1983)). The Fifth Circuit found “that
the only function of the federal judiciary under the FLSA
‘is to assure to the employees of a covered company a
minimum level of wages… to clutter [FLSA] proceedings
with the minutiae of other employer-employee relationships
would be antithetical to the purpose of the Act.'”
Id. (quoting Brennan v. Heard, 491 F.2d 1,
4 (5th Cir. 1974)). The court identified this as a
bright-line rule with a very narrow exception for cases where
the money set-off in counterclaim is considered wages that
the employer pre-paid to the employee. Id. at 742.
In the instant matter, the Court applies the holding in
Martin to decline to exercise supplemental
jurisdiction for Defendants' state law counterclaims. The
Court holds that Plaintiffs Motion to Dismiss is granted.