Long v. C M Long Inc

Filing 37

MEMORANDUM RULING granting in part and denying in part 26 Motion to Dismiss; denying 30 Motion for Sanctions. Signed by Magistrate Judge Kathleen Kay on 8/23/16. (crt,Keller, J)

UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF LOUISIANA
LAKE CHARLES DIVISION

SCOTT LONG

:

DOCKET NO. 2:15-cv-02424

VERSUS

:

MAGISTRATE JUDGE KAY

C.M. LONG, INC.

:

BY CONSENT

MEMORANDUM RULING

Before the court is a Motion to Dismiss Counterclaim [doc. 26] and a Motion for Contempt
and Sanctions [doc. 30] both filed by plaintiff Scott Long. Defendant C.M. Long, Inc. opposes
both motions. For the following reasons, the Motion Dismiss Counterclaim is GRANTED in part
and DENIED in part and the Motion for Contempt and Sanctions is DENIED.
I.
BACKGROUND
Plaintiff’s lawsuit against his former employer, C.M. Long, Inc., filed under the Fair Labor
Standards Act and the Louisiana Wage Payment Act for unpaid overtime wages, was removed to
this court on September 25, 2015. Doc. 1. C.M. Long, Inc. answered the complaint and asserted
a counterclaim alleging first that, if the court finds that overtime pay is due, it is entitled to an
offset of sums paid to plaintiff as bonuses and, second, that it is entitled to damages because
plaintiff and other former employees conspired to misappropriate intellectual property belonging
to C.M. Long, Inc. and start a competing business. Doc. 6.
A separate lawsuit captioned C.M. Long, Inc. v. Bruce Long et al, No. 2015-2652, is
pending in the 14th Judicial District Court, Parish of Calcasieu. Doc. 36, att. 1. The allegations

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in that proceeding are substantially the same as C.M. Long, Inc.’s second assertion in its
counterclaim, i.e., it seeks damages from plaintiff and other family members for conspiring to take
intellectual property and starting a competing business.
II.
ANALYSIS
A. Motion to Dismiss
In support of his motion to dismiss the counterclaim plaintiff alleges that the court has no
subject matter jurisdiction over the non-compulsory counterclaim and that the allegations in the
counterclaim are the subject of a pending state court action. Plaintiff argues that since the
counterclaim is permissive rather than compulsory the court must have an independent basis for
jurisdiction. Since the parties are not diverse and the counterclaim raises no issue of federal law,
plaintiff maintains that the claim must be dismissed. Plaintiff also argues that this court should
decline to exercise jurisdiction over the counterclaim since those same issues are pending in a
previously filed state court lawsuit.
In response C.M. Long, Inc. concedes that it has raised the same issues in a state court
proceeding but states that it asserted the counterclaim as a precaution. It maintains that if the
allegations in the counterclaim are compulsory, it could be precluded from pursuing them if not
joined in this action.
In his reply brief plaintiff offers to stipulate that, if C.M. Long, Inc. dismisses his
counterclaim without prejudice, 1) the dismissal would not be of a compulsory counterclaim; and
2) the dismissal would not constitute res judicata for purposes of the state court suit. C.M. Long,
Inc. has not responded to this offer.
After reviewing both lawsuits, the court agrees with plaintiff that it should dismiss the
allegations in the counterclaim alleging that he conspired to misappropriate intellectual property
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and start a competing business. These allegations are duplicative of those pending in state court
and judicial efficiency dictates that the matter proceed to conclusion in state court. The court also
notes that having plaintiff litigate the same issue in two separate forums is inefficient and
inequitable.
However, with respect to C.M. Long, Inc.’s, allegations that it is entitled to an offset of
sums paid to plaintiff as bonuses, we find that claim to be compulsory in that it “arises out of the
transaction or occurrence that is the subject matter of the opposing party’s claim” and it “does not
require adding another party over whom the court cannot acquire jurisdiction.” Fed. R. Civ. P. 13.
Thus, we will deny the motion to dismiss as to these allegations. 1
B. Motion for Contempt and Sanctions
In his motion for contempt and sanctions plaintiff alleges that C.M. Long, Inc. failed to
comply with this court’s order compelling it to answer discovery. 2 He asks that C.M. Long, Inc.
be held in contempt and that the court impose sanctions including costs, expenses, and attorney’s
fees associated with the motion to compel and the motion for contempt. As additional sanctions
plaintiff prays that C.M. Long, Inc.’s affirmative defenses be stricken.
In response, C.M. Long, Inc. contends that it has been diligently working to produce the
requested documents. It correctly points out that the court did not order that C.M. Long, Inc.
produce the documents within a specific time period. C.M. Long, Inc. attaches to its opposition
correspondence between counsel and representatives of the company which show that efforts are
being made to comply with the order. Additionally, an affidavit of an employee of C.M. Long,

1

Since we find the counterclaim to be compulsory we exercise supplemental jurisdiction pursuant to 28 U.S.C. §
1367(a). See State Nat. Ins. Co., Inc. v. Yates, 391 F.3d 577 (5th Cir. 2004).
2
On June 22, 2016 this court issued an order granting in part and denying in part plaintiff’s motion to compel. Doc.
25.
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Inc. along with photos of the voluminous files that must be searched confirms that the company is
working to produce the requested documents.
We thus find that C.M. Long, Inc. is not in contempt of a court order and refuse to award
sanctions at this time.
III.
CONCLUSION
For the reasons stated above, plaintiff’s Motion to Dismiss Counterclaim [doc. 26] is
GRANTED in part and DENIED IN PART. His Motion for Contempt and Sanctions [doc. 30]
is DENIED.
THUS DONE this 23 August 2016.

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