Coleman v Onshore Technology Services, Inc.

Filing 30

MEMORANDUM AND ORDER : IT IS HEREBY ORDERED that plaintiff's motion to dismiss defendant's counterclaims for lack of subject matter jurisdiction [Doc. # 26 ] is granted. An order of partial dismissal will be entered separately.. Signed by District Judge Carol E. Jackson on 6/30/17. (KKS)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MISSOURI
NORTHERN DIVISION
DEWAYNE COLEMAN, on behalf of
himself and others similarly situated,
Plaintiff,
vs.
ONSHORE TECHNOLOGY SERVICES,
INC.,
Defendant.

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Case No. 2:17-CV-13 (CEJ)

MEMORANDUM AND ORDER
This matter is before the Court on plaintiff’s motion to dismiss defendant’s
amended counterclaims for lack of subject matter jurisdiction, pursuant to
Fed.R.Civ.P. 12(b)(1). Defendant has filed a response in opposition and the issues
are fully briefed.
I.

Background

Plaintiff Dewayne Coleman worked as a Quality Assurance Technician (QAT)
for defendant Onshore Technology Services, Inc. He alleges that defendant
improperly denied him and other QATs overtime compensation due under the Fair
Labor Standards Act (FLSA), 29 U.S.C. § 216(b), by improperly classifying them as
salaried “computer professionals.” He filed this purported collective action under the
FLSA, asserting claims for overtime compensation and declaratory relief.
On May 19, 2017, defendant filed amended counterclaims, alleging that
plaintiff failed to return a company-issued laptop and subsequently pawned it.

Defendant asserts claims for unjust enrichment, fraud, and conversion,1 invoking
this Court’s supplemental jurisdiction pursuant to 28 U.S.C. § 1367. Plaintiff argues
that the counterclaims must be dismissed for lack of subject matter jurisdiction.
II.

Discussion

As an initial matter, the Court addresses defendant’s contention that
plaintiff’s motion to dismiss its amended counterclaim was untimely under
Fed.R.Civ.P. 15(a)(3) (response to amended pleading must be made “within time
remaining to respond to original pleading or within 14 days after service of the
amended pleading, whichever is later.”). Because the Court has an independent
obligation to determine whether subject-matter jurisdiction exists, even in the
absence of a challenge from any party, the Court will address plaintiff’s arguments.
Arbaugh v. Y&H Corp., 546 U.S. 500, 514 (2006); Ruhrgas AG v. Marathon Oil Co.,
526 U.S. 574, 583 (1999).
The Court has original jurisdiction over plaintiff’s FLSA claims pursuant to 28
U.S.C. § 1331. Defendant’s counterclaims arise under state law, and they do not
allege facts establishing diversity of citizenship jurisdiction under 28 U.S.C. § 1332.
Accordingly, the Court has subject matter jurisdiction only if supplemental
jurisdiction is authorized under 28 U.S.C. § 1367. The burden of establishing this
Court’s jurisdiction rests on the counterclaimant. Jones v. Henry Indus., Inc., No.
4:16CV1184 SNLJ, 2017 WL 513038, at *2 (E.D. Mo. Feb. 8, 2017) (citing Riley v.
United States, 486 F.3d 1030, 1032 (8th Cir. 2007)).

1

Defendant’s conversion claim is based on Georgia Code. Ann. § 51-10-6. While defendant
is incorporated in and has its principal place of business in Missouri, it employed plaintiff in
Georgia.

2

Section 1367(a) provides that “in 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 . . . 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 are part of the same case or controversy if they “derive from a
common nucleus of operative fact.” City of Chicago v. Int’l Coll. of Surgeons, 522
U.S. 156, 164–65 (1997) (citation omitted). Claims derive from a common nucleus
of operative fact if they “are such that [the asserting party] would ordinarily be
expected to try them all in one judicial proceeding.” ABF Freight Sys., Inc. v. Int'l
Bhd. of Teamsters, 645 F.3d 954, 963 (8th Cir. 2011) (quoting United Mine
Workers v. Gibbs, 383 U.S. 715, 725 (1966)).
Defendant argues that supplemental jurisdiction exists because the FLSA
claims and state-law claims depend on the same evidence regarding its policies and
procedures. The Court disagrees. The policies and procedures on which defendant’s
claims depend are those related to employees’ obligations with respect to companyissued property, while plaintiff’s claims will require consideration of his job duties,
the number of hours he worked, and the compensation he received. See Schmucker
v. Precision Irrigation, Inc., No. 4:15-CV-00567-JCH, 2015 WL 6438351, at *2
(E.D. Mo. Oct. 22, 2015) (employer’s counterclaims will require consideration of
evidence primarily related to employee’s performance of his employment duties,
“the alleged deficiencies of which bear no relationship to the numbers of hours he
worked or [defendant’s] wage and hour policies.”). “The only overlapping fact in
this nucleus is that the plaintiff was employed by the defendants.” Shepherd v.
Kelley, No. CIV.A. 12-0424-WS-B, 2013 WL 105284, at *2 (S.D. Ala. Jan. 8, 2013);

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see also Kelso v. Complete Home Renovations, Inc., No. 216CV00430LJMMJD, 2017
WL 495789, at *2 (S.D. Ind. Feb. 7, 2017) (existence of an employment
relationship alone cannot establish a common nucleus of operative fact to support
supplemental jurisdiction in an FLSA case); Anwar v. Stephens, No. CV 15-4493
(JS)(GRB), 2016 WL 4468090, at *4 (E.D.N.Y. Aug. 3, 2016), report and
recommendation adopted, No. 15-CV-4493(JS)(GRB), 2016 WL 4468239 (E.D.N.Y.
Aug. 24, 2016) (“[P]laintiff’s employment relationship with the defendants is the
sole fact that connects the federal and state claims, but that fact alone is
insufficient to form the basis of supplemental jurisdiction.) The fact that defendant
might be entitled to offset any damages awarded to plaintiff by the value of the
laptop does not alter the analysis. See Molnoski v. Batmasian, No. 16-CV-81789,
2017 WL 1232792, at *1 (S.D. Fla. Mar. 31, 2017) (“[S]tate-law counterclaims for
conversion are improper in an FLSA case when they do not stem from the
employer/employee relationship which “implicate[s] the number of hours worked or
payment received.”) (citation omitted); Patel v. Goldspot Stores, LLC, No. 6:15-CV198-ORL-28DA, 2015 WL 3401165, at *3 (M.D. Fla. May 26, 2015) (“[T]he only
connection between an action for unpaid wages and the alleged misappropriation is
that Plaintiffs were employed by Goldspot at the time. This is not enough.”).
Latortue v. Fast Payday Loans, Inc., No. 209-CV-171-FTM-29DNF, 2010 WL
415311, at *2 (M.D. Fla. Jan. 27, 2010) (theft of money from an employer on the
one occasion alleged is not “part of the same case or controversy under Article III
of the United States Constitution” as plaintiff’s FLSA claim).

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Defendant’s counterclaims and plaintiff’s FLSA claims do not arise from a
common nucleus of operative fact.

Therefore, the Court does not have

supplemental jurisdiction under 28 U.S.C. § 1367.
Accordingly,
IT IS HEREBY ORDERED that plaintiff’s motion to dismiss defendant’s
counterclaims for lack of subject matter jurisdiction [Doc. # 26] is granted.
An order of partial dismissal will be entered separately.

CAROL E. JACKSON
UNITED STATES DISTRICT JUDGE
Dated this 30th day of June, 2017.

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