Lanham v. Metro Towing, LLC
OPINION & ORDER: The 20 MOTION to File an Amended Answer and Counterclaim is DENIED. Signed by Judge Karen K. Caldwell on June 26, 2014.(AWD) cc: COR
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF KENTUCKY
CIVIL ACTION NO. 5:13-188-KKC
OPINION & ORDER
METRO TOWING, LLC,
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This matter is before the Court on a motion by Defendant Metro Towing, LLC to amend
its answer and file a counterclaim (DE 20). Plaintiff Michael Lanham objects on the
grounds that the amendment would be futile as the counterclaim cannot survive a motion
to dismiss for lack of subject-matter jurisdiction. For the following reasons, the motion to
amend will be denied.
Michael Lanham seeks unpaid overtime compensation pursuant to the Fair Labor
Standards Act (FLSA), 29 U.S.C. § 216(b). He alleges in his complaint that during the
course of his eleven-month employment at Metro Towing, Lanham’s pay was decreased to
such an extent that he no longer received compensation for some of the overtime hours he
worked. Lanham brings only one count against Metro Towing, which is for recovery of the
unpaid overtime compensation.
On April 25, 2014, Metro Towing filed a timely motion for leave to file an amended
answer and counterclaim. The only change proposed to its answer is the addition of a
counterclaim, which alleges that Lanham breached a contract in which he agreed to
purchase and finance a Ford Explorer from Metro Towing. According to Metro Towing,
Lanham agreed to purchase the vehicle for $1,500, paid through monthly installments of
$200. But Lanham failed to make a single payment, despite using the vehicle from May
through November of 2012. Moreover, Metro Towing alleges that when it recovered the
vehicle from the plaintiff in November, it was in “very poor condition.” (DE 20-1, ¶ 9). Metro
Towing seeks the fair rental value of the Explorer for the period of May until November,
along with compensation for any damage to the truck beyond normal wear and tear.
“A motion to amend . . . should be denied if the amendment . . . would be futile.” Colvin
v. Caruso, 605 F.3d 282, 294 (6th Cir. 2010) (quoting Crawford v. Roane, 53 F.3d 750, 753
(6th Cir. 1995)). Lanham contends that Metro Towing’s proposed counterclaim is futile
because the claim cannot survive a motion to dismiss for lack of subject-matter jurisdiction.
The Court agrees and the motion to amend will be denied.
The problem for Metro Towing is that it has failed to assert any adequate grounds on
which this Court could exercise jurisdiction over its state-law claims. Instead of addressing
the jurisdictional issue squarely, Metro Towing states only that “[w]hile [the counterclaim]
does not arise directly out of the Plaintiff’s claim of failure to pay overtime it does affect the
ultimate issue of who owes whom money in this situation.” (DE 20, ¶ 3).
Lanham generously construed this statement as asserting supplemental jurisdiction
pursuant to 28 U.S.C. § 1367(a). District courts “shall have 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.” 28 U.S.C. § 1367(a). “Claims form part of the same case or controversy when
they ‘derive from a common nucleus of operative facts.’” Harper v. AutoAlliance Intern., Inc.,
392 F.3d 195, 209 (6th Cir. 2004) (quoting Ahearn v. Charter Township of Bloomfield, 100
F.3d 451, 454–55 (6th Cir. 1996)). Accordingly, this Court has subject-matter jurisdiction
over Metro Towing’s state-law counterclaim only if it “derive[s] from a common nucleus of
But as noted above, Metro Towing makes almost no attempt to establish such a basis for
jurisdiction over its counterclaim. The only statement that might be construed as support
for supplemental jurisdiction is its assertion that the counterclaim “affect[s] the ultimate
issue of who owes whom money in this situation.” (DE 20, ¶ 3). This is insufficient. It’s clear
that the claim raised by Metro Towing derives from a very different set of facts than the
original FLSA suit brought by Lanham. Lanham contends that Metro Towing failed to
compensate him for overtime wages, and Metro Towing contends that Lanham breached a
contract for the sale of a vehicle by refusing to pay his monthly $200 installments. Metro
Towing does not assert, as one might imagine, that it withheld overtime pay as part of the
parties’ agreement for Lanham to purchase the truck. Instead, the defendant alleges only
that these claims are related because, to paraphrase, both parties contend that they owe
each other money.
This cannot be a basis for supplemental jurisdiction. Accepting Metro Towing’s
argument would permit any defendant to file unrelated counterclaims without regard to the
jurisdictional limitations of the federal courts. It is always true that when two parties bring
suit against each other, the result of each action will determine “who owes whom money.”
This statement, while obviously true, says nothing about whether the claims are related or
arise from a common nucleus of operative facts.
The Court finds that the defendant’s proposed amended answer and counterclaim is
futile as the counterclaim cannot withstand a motion to dismiss for lack of subject-matter
jurisdiction. Accordingly, and for all of the above-stated reasons, IT IS ORDERED that the
motion to file an amended answer and counterclaim (DE 20) is DENIED.
Dated this 26th day of June, 2014.
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