United States District Court, E.D. Michigan, Southern Division
OPINION AND ORDER GRANTING PLAINTIFF'S MOTION TO
AMEND COMPLAINT AND TO DISMISS DEFENDANTS'
HONORABLE LINDA V. PARKER JUDGE.
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.)
Motion for Leave to Amend
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.
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.
Motion to Dismiss Defendants' Counterclaims Pursuant to
Federal Rules of Civil Procedure 12(b(1) or (6)
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.
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
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)).
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. 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.
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 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
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).
these reasons, the Court concludes that it lacks supplemental
jurisdiction over Defendants' ...