Loonsfoot v. Stake Center Locating, LLC

Filing 41

ORDER denying 33 Motion to Dismiss Case for Lack of Jurisdiction. Signed by Judge David W. Dugan on 6/3/2024. (dsw)

IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF ILLINOIS
MICHAEL LOONSFOOT, Individually )
and for Others Similarly Situated
)
)
)
Plaintiff,
)
)
vs.
)
)
STAKE CENTER LOCATING, LLC,
)
Defendant.

Case No. 23-CV-3171-DWD

MEMORANDUM & ORDER
DUGAN, District Judge:
Plaintiff Michael Loonsfoot filed the instant case, a purported class action, seeking
to recover unpaid wages and other damages from his former employer, Stake Center
Locating, LLC (“SCL”). Plaintiff brings two claims for relief: (1) a claim under the Illinois
Minimum Wage Law (“IMWL”) for failure to pay overtime wages and (2) a claim under
the Illinois Wage Payment and Collection Act (“IWPCA”) for failure to pay all agreed upon
wages. In his Complaint, Loonsfoot alleges that this Court has original subject matter
jurisdiction pursuant to the Jurisdictional provisions of the Class Action Fairness Act, 28
U.S.C. § 1332(d) (“CAFA”).
In response to the Complaint, SCL filed a Motion for Judgment on the Pleadings,
seeking a Judgment on Plaintiff’s IMWL claim (regarding the “auto allowance”) and on
Plaintiff’s entire IWPCA claim. (Doc. 29). Perplexingly, eighteen days after SCL filed its
Motion for Judgment on the Pleadings, Loonsfoot filed a Motion to Dismiss, his own

Complaint, for lack of subject matter jurisdiction. 1 SCL opposes the motion, arguing that
subject matter jurisdiction clearly exists, and that Plaintiff is only seeking dismissal to
avoid a ruling on the pending Motion for Judgment on the Pleadings. 2 The Court
therefore is in the unusual position of resolving a motion to dismiss for lack of subject
matter jurisdiction, filed by the party that invoked this Court’s jurisdiction in the first
place.
I.

BACKGROUND

SCL is a limited liability company that provides utility locating services across the
country. Plaintiff is a former SCL employee. He worked as a Gas Tech, Lead Gas Tech,
Area Manager, and Trainer in Illinois and Texas from approximately December 2021 until
June 2023.
Plaintiff initiated this lawsuit on September 21, 2023, on behalf of himself and a
putative class of similarly situated employees. Plaintiff claims that SCL failed to pay
employees for compensable “off the clock” work (work employees were allegedly
required to complete during their meal breaks, as well as before and after work). In
addition, Plaintiff claims that SCL paid its employees an allowance for “auto pay,” but
failed to include that amount in each employee’s regular rate of pay for purposes of
calculating the appropriate amount of overtime pay. In Count I, Plaintiff claims that
SCL’s “off the clock” and “auto pay” practice violates the IMWL by depriving employees

Plaintiff fails to identify a rule under which his motion is made. The Court therefore construes Plaintiff’s
motion as a Motion to Dismiss pursuant to Rule 12(b)(1) of the Federal Rules of Civil Procedure.
2 SCL filed its answer on November 16, 2023. (Doc. 21). Given the procedural posture of the case, Plaintiff
cannot unilaterally dismiss the action, see Fed. R. Civ. P. 41, and SCL declined Plaintiff’s request to consent
to dismissal of the action (Doc. 40, pp. 2-3).
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of overtime wages. In Count II, Plaintiff claims that SCL’s “off the clock” and “auto pay”
practice violates the IWPCA by depriving employees of all their earned wages at the rates
agreed to by the parties for all hours worked.
In his Complaint, Plaintiff contends that jurisdiction is proper under CAFA
because the proposed class has more than 100 members, the minimal diversity
requirement is met, 3 and the amount in controversy exceeds $5 million dollars. (Doc. 1).
On December 6, 2023, the Court ordered Plaintiff to submit supplemental briefing
clarifying SCL’s citizenship. (Doc. 22). Plaintiff responded, filing a supplemental
memorandum stating that SCL’s sole member, S&N Communications, Inc. (“S&N”), is a
citizen of North Carolina. 4
SCL answered the Complaint (Doc. 21) and filed a Motion for Judgment on the
Pleadings (Doc. 29). Plaintiff then filed a Motion to Dismiss for Lack of Jurisdiction (Doc.
33) and a Motion to Prioritize Jurisdictional Dismissal (Doc. 34), asking the Court to
resolve the question of federal subject matter jurisdiction before ruling on the Motion for
Judgment on the Pleadings. In his Motion to Dismiss for Lack of Jurisdiction, Plaintiff
does not present any newly discovered facts demonstrating that his original allegations

The Complaint alleges that Plaintiff is domiciled in Illinois and that SCL, a limited liability company, is
domiciled Utah and North Carolina.
4 The Court sua sponte ordered Plaintiff to identify each of SKL’s members and the citizenship of each of
those members. (Doc. 9). See Camico Mut. Ins. Co. v. Citizens Bank, 474 F.3d 989, 992 (7th Cir. 2007) (the
citizenship of an LLC is the citizenship of each of its members). Plaintiff filed a supplemental pleading
indicating that SCL’s sole member is S&N Communications, Inc. (S&N), and that S&N is incorporated and
has its principal place of business in North Carolina. (Doc. 23). As is discussed more fully below, however,
when jurisdiction is premised on CAFA, “an unincorporated association shall be deemed to be a citizen of
the State where it has its principal place of business and the State under whose laws it is organized.” 28
U.S.C. § 1332(d)(10). Thus, the Court need not consider S&N’s citizenship. Instead, in evaluating whether
minimal diversity is present under CAFA, SCL will be deemed a citizen of the State where it has its
principal place of business and the State under whose laws it is organized.
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as to the presence of CAFA jurisdiction were mistaken. Instead, Plaintiff claims that SCL’s
Answer demonstrates that subject matter jurisdiction is lacking. Specifically, Plaintiff
notes that the Complaint (Doc. 1, ¶ 16) includes a general allegation that “[t]his Court has
original subject matter jurisdiction over this action pursuant to the jurisdictional
provisions of the Class Action Fairness Act, 28 U.S.C. § 1332(d).” Additionally, the
Complaint (Doc. 1, ¶ 17) alleges that the amount in controversy exceeds $5,000,000, at
least one member of the Putative Class and SCL are citizens of different states, and the
Putative Class exceeds 100 members. In answering the Complaint, however, SCL denied
these allegations. According to Plaintiff, these denials demonstrate that jurisdiction is
lacking because “the information necessary to determine whether this Court has subject
matter jurisdiction is solely in [SCL’s] hands.” (Doc. 33, p. 2). 5
SCL responds to this argument, explaining that SCL denied the general allegation
that jurisdiction is proper under CAFA (Doc. 1, ¶ 16) because it is a legal conclusion. (Doc.
40, p. 2). As to the allegations regarding minimal diversity, the amount in controversy,
and the size of the class (Doc. 1, ¶ 17), SCL explains that SCL: (1) Admitted that SCL is
domiciled in Utah and North Carolina; (2) admitted that Plaintiff is domiciled in Illinois;
and (3) “denied the rest of the factual allegations, simply because [SCL] contends that
class treatment is inappropriate.” (Doc. 40, p. 2) (See also (Doc. 40, p. 6) (“In denying the
allegations in Paragraph 17, SCL was simply signaling that it disagrees that class
treatment is appropriate, or that the Plaintiff and the class are entitled to $5 million in

Plaintiff provides no legal authority for the contention that a Defendant’s denial of an allegation in an
answer is controlling on any issue, including the existence of subject matter jurisdiction.
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damages.”)). SCL’s response also maintains that, as defined by Plaintiff in the Complaint,
the proposed IMWL class and the proposed IWPCA class consist of more than 100
members. Moreover, SCL contends, when accepting Plaintiff’s allegations regarding off
the clock work as true, the alleged amount of unpaid wages exceeds $5 million in
damages. SCL’s contentions are supported by the Declaration of Scott McCullough, SCL’s
Director of Human Resources, including a spreadsheet summarizing a census of SCL’s
current and former employees (members of the putative class) and the alleged amount of
unpaid wages as defined by Plaintiff.
II.

LEGAL STANDARD

Although any party may seek dismissal of a case at any time for lack of subject
matter jurisdiction, the Seventh Circuit has noted that such motions are “unseemly”
when filed by the party that invoked the court’s jurisdiction in the first
place.

Napoleon Hardwoods, Inc. v. Professionally Designed Benefits, Inc., 984 F.2d 821, 822

(7th Cir. 1993); Feezor v. Excel Stockton, LLC, 2013 WL 2485623, at *12 (E.D. Cal. June 10,
2013). Nevertheless, it is the responsibility of a court to make an independent evaluation
of whether subject matter jurisdiction exists in every case, Foster v. Hill, 497 F.3d 695, 696–
97 (7th Cir. 2007).
Given Loonsfoot’s unusual litigation tactic 6 (and SCL’s response to the same),
Loonsfoot, the party that initially invoked this court’s jurisdiction, has become the party
opposing federal jurisdiction and SCL has become the proponent of federal jurisdiction.

Notably, Loonsfoot is not alleging that he has discovered new information demonstrating that his original
jurisdictional allegations were incorrect. Instead, Loonsfoot contends that, given the denials in SCL’s
answer, subject matter jurisdiction must be lacking.

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Given this role reversal, the Court believes it is appropriate to employ authority
addressing burden allocation in the context of a motion to remand for lack of subject
matter jurisdiction. Applying that case law, SCL, as the proponent of federal jurisdiction,
bears the burden of establishing the general requirements of CAFA jurisdiction. Appert v.
Morgan Stanley Dean Witter, Inc., 673 F.3d 609, 618 (7th Cir. 2012).
Further, because Loonsfoot is contesting the amount in controversy, SCL must
“prove those jurisdictional facts by a preponderance of the evidence.” Blomberg v. Serv.
Corp. Int'l, 639 F.3d 761, 763 (7th Cir. 2011) (quotation marks omitted). This means that
SCL must “show not only what the stakes of the litigation could be, but also what they are
given the plaintiff’s actual demands. The demonstration concerns what the plaintiff is
claiming (and thus the amount in controversy between the parties), not whether plaintiff
is likely to win or be awarded everything he seeks.” Spivey v. Vertrue, Inc., 528 F.3d 982,
986 (7th Cir. 2008) (alterations in original) (quotation marks omitted). In other words, SCL
“does not need to establish what damages the proposed class will recover, but only how
much is in controversy between the parties. This burden thus is a pleading requirement,
not a demand for proof.” Bloomberg, 639 F.3d at 763 (citations omitted). “A good-faith
estimate is acceptable if it is plausible and adequately supported by the evidence.” Id.
The Seventh Circuit has identified several acceptable sources of information for
establishing the amount in controversy, including “contentions, interrogatories or
admissions in state court;” “calculation from the complaint’s allegations;” “reference to
the plaintiff’s informal estimates or settlement demands;” and “affidavits from the
defendant’s employees or experts, about how much it would cost to satisfy the plaintiff’s
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demands.” Meridian Sec. Ins. Co. v. Sadowski, 441 F.3d 536, 541-42 (7th Cir. 2006). However,
this “list is not exclusive; any given proponent of federal jurisdiction may find a better
way to establish what the controversy between the parties amounts to, and this
demonstration may be made from either side’s viewpoint.” Once SCL has “explained
plausibly how the stakes exceed $5 million, then the case belongs in federal court unless
it is legally impossible for the plaintiff to recover that much.” Spivey, 528 F.3d at
986 (citations omitted).
III.

DISCUSSION

Under CAFA, federal courts have jurisdiction to hear a class action if the proposed
class has more than 100 members, the parties are minimally diverse, and the amount in
controversy exceeds $5 million. Sudholt v. Country Mut. Ins. Co., 83 F.4th 621, 625 (7th Cir.
2023) (citing 28 U.S.C. § 1332(d)(2), (d)(5)(B)).
Here, there is no dispute that the parties are minimally diverse. SCL is a Utah LLC
with its principal place of business in North Carolina. (Doc. 1 at ¶ ¶ 17, 37). Therefore,
under CAFA, SCL is a citizen of Utah and North Carolina. 7 Loonsfoot, a natural person,
is a citizen of Illinois. (Doc. 1 at ¶ 17). As such, the requisite minimal diversity exists.

7 Normally, the Court considers a

limited liability company's citizenship to be the citizenship of its members
for purposes of diversity jurisdiction. See Cosgrove v. Bartolotta, 150 F.3d 729, 731 (7th Cir. 1998). But under
CAFA, “an unincorporated association shall be deemed to be a citizen of the State where it has its principal
place of business and the State under whose laws it is organized.” 28 U.S.C. § 1332(d)(10). Although the
Seventh Circuit does not appear to have expressly considered the issue, “[c]ourts have widely held that an
LLC is an “unincorporated association” within the meaning of section 1332(d)(10).” Calchi v. TopCo Assocs.,
LLC, 676 F. Supp. 3d 604, 612 (N.D. Ill. 2023) (collecting cases). Accordingly, “for purposes of determining
subject matter jurisdiction under [CAFA], a limited liability company is an ‘unincorporated association’ as
that term is used in 28 U.S.C. § 1332(d)(10).” Ferrell v. Express Check Advance of S.C. LLC, 591 F.3d 698, 699–
700 (4th Cir. 2010). Further, even if the Court were to determine SCL’s citizenship under CAFA using the
citizenship of its members, minimal diversity would still be present because SCL would be deemed a citizen

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The record also reflects that the proposed class exceeds 100 class members.
Plaintiff’s proposed IMWL class consists of “[a]ll hourly employees who worked for SCL
in Illinois at any time during the past three years.” (Doc. 1, ¶ 34), and Plaintiff’s proposed
IWPCA class consists of “[a]ll hourly employees who worked for SCL in Illinois at any
time during the past 10 years.” (Doc. 1, ¶ 35). A declaration from Scott McCullough, the
Director of Human Resources for SCL, demonstrates that each class, as defined by
Loonsfoot, exceeds 100 class members. (Doc. 40-1). Loonsfoot, who initially alleged that
the proposed class exceeds 100 class members, does not offer any proof refuting Mr.
McCullough’s declaration. Instead, Loonsfoot relies on the fact that, in answering the
Complaint, SCL, the party with “vastly superior access to relevant information”, denied
the jurisdictional allegations in the Complaint. Plaintiff, however, does not cite to (and
the Court is not aware of) any authority establishing that denials in SCL’s answer control
the Court’s determination of jurisdictional facts.
Finally, the allegations in the Complaint and the Declaration of Scott McCullough
support a finding that the amount in controversy exceeds $5 million. Pursuant to the
Declaration, when Loonsfoot’s allegations regarding off the clock work are applied to the
putative class members, the alleged amount of unpaid wages totals approximately $2.3
million. (Doc. 40-1 ¶ 8). Approximately $2.15 million of those alleged unpaid wages are
subject to the provisions of the IMWL. And, with respect to the IMWL claim, Loonsfoot
is seeking treble damages, as well as monthly statutory damages, and attorney’s fees.
of North Carolina. (Doc. 23) (SCL’s sole member, S&N, is incorporated and has its principal place of
business in North Carolina).

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(Doc. 1, ¶ 157); see 820 ILCS 105/12(a). Once the amount of unpaid wages is trebled, the
amount in controversy well exceeds $5 million, without even considering monthly
statutory damages and attorney’s fees. 8 SCL, therefore, has plausibly explained how,
when accepting Loonsfoot’s claims as true, the amount in controversy exceeds $5 million.
Loonsfoot, who once again only points to denials in SCL’s answer, has failed to show that
such recovery is legally impossible.
IV.

CONCLUSION

Considering the record as a whole, the Court finds that SCL has demonstrated this
case satisfies CAFA’s minimal diversity, class size, and amount in controversy
requirements. Accordingly, the Court has CAFA jurisdiction over the claims in this case. 9
For these reasons, the Motion to Dismiss for Lack of Subject Matter Jurisdiction (Doc. 33)
is DENIED. The Motion for Partial Judgment on the Pleadings (Doc. 29) will be addressed
by separate order.
SO ORDERED.
Dated: June 3, 2024
s/David W. Dugan
DAVID W. DUGAN
United States District Judge
In determining whether a suit exceeds the amount-in-controversy threshold, courts consider all damages
available to a plaintiff, including compensatory and punitive damages, as well as attorneys' fees. See Oshana
v. Coca–Cola Co., 472 F.3d 506, 512 (7th Cir. 2006) (evaluating the propriety of removal under CAFA and
considering all of these types of damages in holding that a class action brought under CAFA satisfied the
$5 million threshold). The Court further notes that attorney's fees may count toward
the amount in controversy when the prevailing party is entitled to recover them as part of
damages. Gardynski–Leschuck v. Ford Motor Co., 142 F.3d 955, 956 (7th Cir.1998). If attorney's fees are
awarded as part of costs, they may not be counted toward the amount in controversy because then they
would fall within the rule that “interest and costs” do not count towards the jurisdictional minimum. 28
U.S.C. § 1332(a); Gardynski–Leschuck, 142 F.3d at 956.
9 Considering the Court’s finding as to CAFA jurisdiction, the Court need not resolve SCL’s argument as
to this Court having original subject matter jurisdiction over Loonsfoot’s claims and supplemental
jurisdiction over the putative class members’ claims.
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