Lefeve v. Kim's Day Spa, LLC et al
OPINION and ORDER Granting Plaintiff's 8 Motion to Amend Complaint and to Dismiss Defendants' Counterclaims. Amended Complaint due by 2/20/2018. Signed by District Judge Linda V. Parker. (RLou)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN
Civil Case No. 17-12689
Honorable Linda V. Parker
KIM’S DAY SPA, LLC d/b/a
COSI BELLA NAIL SPA, and
TRIEU NGUYEN a/k/a
TRIEU OLIVIERI and KIM OLIVIERI,
OPINION AND ORDER GRANTING PLAINTIFF’S MOTION TO AMEND
COMPLAINT AND TO DISMISS DEFENDANTS’ COUNTERCLAIMS
This, initially, was a Fair Labor Standards Act (“FLSA”) lawsuit. Plaintiff
Jennifer Lefeve filed a one-count complaint against Defendants on August 16,
2017, alleging that Defendants employed her as a nail technician, wrongfully
classified her as an independent contractor, and failed to pay her overtime wages as
required under the FLSA. (See ECF No. 1.) On October 13, 2017, Defendants
filed an Answer to Plaintiff’s Complaint and a Counter-Complaint asserting the
following state law claims: (I) unfair competition; (II) tortious interference with
business relationships and economic expectancy; (III) conversion; (IV)
“irreparable harm”; (V) unjust enrichment; (VI) business defamation; and (VII)
injurious falsehood. (ECF No. 5.) Asserting that Defendants filed their
counterclaims to retaliate against her for exercising her FLSA rights, Plaintiff now
seeks to amend her complaint to add a claim of retaliation. (ECF No. 8.) In her
motion, filed October 26, 2017, Plaintiff also seeks dismissal of Defendants’
counterclaims pursuant to Federal Rules of Civil Procedure 12(b)(1) or (6).
Defendants filed a response to Plaintiff’s motion on November 16, 2017, stating
that they do not oppose Plaintiff’s request to amend her Complaint, but that their
counterclaims are not subject to dismissal. (ECF No. 10.) Plaintiff filed a reply
brief on November 29, 2017. (ECF No. 11.)
Plaintiff’s Motion for Leave to Amend
Pursuant to Federal Rule of Civil Procedure 15(a), leave to amend is “freely”
granted “when justice so requires.” See Fed. R. Civ. P. 15(a). The United States
Supreme Court has advised that a plaintiff should be allowed the opportunity to test a
claim on the merits if the facts and circumstances underlying the claim suggest that it
may be a proper subject of relief. Foman v. Davis, 371 U.S. 178, 182 (1962). However,
the Court further instructed that a motion to amend a complaint should be denied if the
amendment is brought in bad faith or for dilatory purposes, results in undue delay or
prejudice to the opposing party, or would be futile. Id.
As indicated, Defendants do not oppose Plaintiff’s request to amend her
Complaint. They do not contend that Plaintiff’s proposed amendment is brought in bad
faith, for dilatory reasons, will delay this litigation, prejudice Defendants, or is futile.
The Court concludes that the amendment should be allowed.
Plaintiff’s Motion to Dismiss Defendants’ Counterclaims
Pursuant to Federal Rules of Civil Procedure 12(b(1) or (6)
Plaintiff seeks dismissal of Defendants’ counterclaims arguing, first, that the Court
lacks subject matter jurisdiction over them. Second, Plaintiff argues that Defendants fail
to state a claim upon which relief should be granted with respect to those claims. The
Court must address Plaintiff’s subject matter jurisdiction argument first, for if jurisdiction
is lacking, it cannot reach the merits of the claims.
Although not set forth in their Counter-Complaint, Defendants’ response to
Plaintiff’s motion reflects that they believe the Court has jurisdiction over their
counterclaims under 28 U.S.C. § 1367. (See Defs.’ Resp. Br. at 4, ECF No. 10 at Pg ID
99.) With certain exceptions not applicable here, § 1367(a) provides:
[I]n any civil action of which the district courts have original
jurisdiction, the 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. Such
supplemental jurisdiction shall include claims that involve the joinder
or intervention of additional parties.
28 U.S.C. § 1367. As the Supreme Court has explained, the statute grants
supplemental “jurisdiction over state law claims that ‘derive from a common
nucleus of operative fact,’ such that ‘the relationship between the federal claim and
the state claim permits the conclusion that the entire action before the court
comprises but one constitutional ‘case.’” City of Chicago v. Int’l Coll. of
Surgeons, 522 U.S. 523, 529 (1997) (quoting Mine Workers v. Gibbs, 383 U.S.
715, 725 (1966)).
Contrary to Defendants’ assertion (see Defs.’ Resp. Br. at 3, ECF No. 10 at
Pg ID 98), Plaintiff is not simply arguing that the Court should decline to exercise
jurisdiction under § 1367.1 By seeking dismissal under Rule 12(b)(1), Plaintiff is
contending that supplemental jurisdiction is lacking under § 1367 because
Defendants’ counterclaims are not part of the same case or controversy as her
FLSA claim. This Court agrees.
Except for their business defamation claim, Defendants’ counterclaims arise
from their assertion that Plaintiff has obtained and misused their confidential and
proprietary information. (See Defs.’ Counter-Compl.; ECF No. 5.) Defendants
allege that Plaintiff used this information to steal their clients, interfere with their
business relationships and economic expectancy, and unjustly enrich herself. (Id.)
In their business defamation counterclaim, Defendants allege that Plaintiff has
made false and defamatory statements to their current and former clients to injure
their business. (Id.) Defendants contend that they discovered the facts supporting
these claims when investigating and gathering evidence into Plaintiff’s FLSA
Only once a court has supplemental jurisdiction over claims may it exercise its
discretion to decide whether to hear those claims. See 28 U.S.C. § 1367(c). As
such, the Court only will consider Defendants’ arguments for why the Court should
not decline to exercise supplemental jurisdiction if it finds that supplemental
claim. (Defs.’ Resp. Br. at 2, ECF No. 10 at Pg ID 97.) This, however, does not
demonstrate the connection between Plaintiff’s FLSA claim and Defendants’
counterclaims necessary to establish supplemental jurisdiction.
Plaintiff’s FLSA claim turns on whether Defendants were obligated to pay
her overtime under the statute and whether they failed to do so. The Court finds it
unlikely that any facts relevant to Defendants’ counterclaims will have any bearing
on Plaintiff’s claim. In other words, they do not arise from a “common nucleus of
operative fact” and are not “part of the same case or controversy.” See Cruz v.
Don Pancho Mkt., LLC, 167 F. Supp. 3d 902, 907-10 (W.D. Mich. 2016) (holding
that the court lacked supplemental jurisdiction over the defendants’ state law
claims alleging fraud, breach of contract, and conversion, as those counterclaims
did not arise out of the same case or controversy as the plaintiff’s FLSA claim).
For these reasons, the Court concludes that it lacks supplemental jurisdiction
over Defendants’ counterclaims under § 1367.
IT IS ORDERED that Plaintiff’s motion to amend her complaint and to
dismiss Defendants’ counterclaims (ECF No. 8) is GRANTED;
IT IS FURTHER ORDERED that Plaintiff shall file her amended
complaint within seven (7) days of this Opinion and Order;
IT IS FURTHER ORDERED that Defendants’ Counter-Complaint is
DISMISSED WITHOUT PREJUDICE pursuant to Rule 12(b)(1) of the Federal
Rules of Civil Procedure.
s/ Linda V. Parker
LINDA V. PARKER
U.S. DISTRICT JUDGE
Dated: February 13, 2018
I hereby certify that a copy of the foregoing document was mailed to counsel of
record and/or pro se parties on this date, February 13, 2018, by electronic and/or
U.S. First Class mail.
s/ R. Loury
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