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Llanes v. Zalewski

United States District Court, D. Oregon

April 5, 2019

JESUSA LLANES, Plaintiff,
v.
ANDREA ZALEWSKI, SILVER RIDGE ADULT FOSTER CARE HOME, LLC, Defendants.

          OPINION AND ORDER

          STACIE F. BECKERMAN UNITED STATES MAGISTRATE JUDGE.

         Plaintiff Jesusa Llanes (“Llanes”) brings this case against Defendants Andrea Zalewski (“Zalewski”) and Silver Ridge Adult Foster Care Home, LLC (“Silver Ridge”) (together, “Defendants”), alleging claims for failure to comply with the back pay and overtime wages requirements of the Fair Labor Standards Act (“FLSA”), 29 U.S.C. § 216. (ECF No. 1.) In response, Defendants assert counterclaims for quantum meruit, conversion, and unjust enrichment. (ECF No. 21.)

         Pending before the Court is Llanes' motion to dismiss Defendants' counterclaims for lack of subject matter jurisdiction under Federal Rule of Civil Procedure 12(b)(1). (ECF No. 32.) The Court has jurisdiction over this case under 28 U.S.C. § 1331, and all parties have consented to the jurisdiction of a U.S. Magistrate Judge under 28 U.S.C. § 636(c). For the following reasons, the Court denies Llanes' motion to dismiss.

         BACKGROUND

         On February 11, 2018, Llanes filed a complaint alleging that she worked seventy-five hours per week as a residential care manager for Silver Ridge. (Compl. ¶ 6.) Llanes further alleges that she did not receive any overtime pay, and that “on many paydays, ” Silver Ridge failed to pay her “anything at all.” (Compl. ¶ 6.)

         Defendants answered and counterclaimed, alleging that Llanes “ran her own culinary business out of Silver Ridge's facility[.]” (Am. Answer ¶ 17.) Llanes allegedly “used Silver Ridge's food and other resources to operate and maintain this business without permission, ” while “neglect[ing] her duties to Silver Ridge clients.” (Am. Answer ¶ 17.)

         ANALYSIS

         I. LEGAL STANDARD

         Under 28 U.S.C. § 1367(a), district courts have supplemental jurisdiction over 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). “A state law claim is part of the same case or controversy when it shares a common nucleus of operative fact with the federal claims and the state and federal claims would normally be tried together.” Bahrampour v. Lampert, 356 F.3d 969, 978 (9th Cir. 2004) (citation and quotation marks omitted).

         Before Congress enacted 28 U.S.C. § 1367(a), district courts exercised supplemental jurisdiction only over compulsory counterclaims. See Sparrow v. Mazda Am. Credit, 385 F.Supp.2d 1063, 1066 (E.D. Cal. 2005) (“Before 1990, . . . the rule was clear that federal courts did not have jurisdiction over permissive counterclaims absent an independent basis for federal subject matter jurisdiction.”). Now, both compulsory and permissive counterclaims may satisfy the test for supplemental jurisdiction because “§ 1367 supersedes case law on supplemental jurisdiction that had distinguished between compulsory and permissive counterclaims.” Glob. NAPs, Inc. v. Verizon New England Inc., 603 F.3d 71, 87 (1st Cir. 2010); see also Jones v. Ford Motor Credit Co., 358 F.3d 205, 212-13 (2d Cir. 2004) (holding that § 1367 has “displaced . . . whatever validity inhered in the earlier view that a permissive counterclaim requires independent jurisdiction”).

         Given that Congress has now granted district courts supplemental jurisdiction over all claims that arise out of the same case or controversy, the test for supplemental jurisdiction over counterclaims is whether the counterclaim shares a common nucleus of operative fact with the federal claim. See Glob. NAPs, Inc., 603 F.3d at 88 (analyzing whether a counterclaim satisfied § 1367(a) by “looking to whether the claims arose from a common nucleus of operative fact”); Channell v. Citicorp Nat'l Servs., Inc., 89 F.3d 379, 385 (7th Cir. 1996) (“Now that Congress has codified the supplemental jurisdiction in § 1367(a), courts should use the language of the statute to define the extent of their powers.”); Aliya MedCare Fin., LLC v. Nickell, No. 14-cv-07806-VAP, 2016 WL 7444610, at *12 (C.D. Cal. Aug. 16, 2016) (“Following the Second and Seventh Circuits, district courts in the Ninth Circuit have held that they may . . . exercise supplemental jurisdiction over permissive counterclaims that satisfy § 1367(a)'s ‘same case or controversy' requirement.”) (citation omitted); see also Exxon Mobile Corp. v. Allapattah Servs., Inc., 545 U.S. 546, 558-59 (2005) (“Nothing in § 1367 indicates a congressional intent to recognize, preserve, or create some meaningful, substantive distinction between the jurisdictional categories [courts] have historically labeled pendent and ancillary.”); Sparrow, 385 F.Supp.2d at 1067 (noting that the “same case or controversy” test is “clearly broader than the ‘same transaction or occurrence' test for compulsory counterclaims” and “broader than the test for permissive counterclaims”).

         II. DISCUSSION

         A. Supplemental Jurisdiction

         Llanes asks the Court to dismiss Defendants' counterclaims for quantum meruit, unjust enrichment, and conversion because they share no common facts with Llanes' FLSA claims beyond the parties' employment relationship. (Pl.'s Mot. at 3.) Defendants respond by arguing that the Court has supplemental jurisdiction over their claims because both Llanes' claims and Defendants' counterclaims require evidence about the number of ...


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