Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-azd-2_15-cv-00494/USCOURTS-azd-2_15-cv-00494-2/pdf.json

Nature of Suit Code: 442
Nature of Suit: Civil Rights Employment
Cause of Action: 42:2000e Job Discrimination (Employment)

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WO 

IN THE UNITED STATES DISTRICT COURT 

FOR THE DISTRICT OF ARIZONA

Amy Patterson,

Plaintiff, 

v. 

Two Fingers LLC, et al., 

Defendants.

No. CV-15-00494-PHX-NVW

ORDER 

 Before the court is Counter-Defendant Peter K. Strojnik’s Motion to Dismiss 

Second Amended Counterclaim (Doc. 67). For the following reasons, the Motion will be 

granted. 

I. BACKGROUND 

 On March 18, 2015, Plaintiff Amy Patterson filed suit against Defendant Joseph 

Popo and three limited liability corporations over which he exercises partial control. 

(Doc. 1 at 1-3.) Those corporations do business in Scottsdale, Arizona, as Stone & Vine 

Urban Italian Restaurant, Salt & Lime Modern Mexican Grill, and Black & Bleu. (Id. at 

2-3.) Beginning in 2013, while Patterson was working at these restaurants as a server and 

manager, Popo allegedly made “consistent inappropriate and grotesque sexual advances 

during each shift [Patterson] worked.” (Id. at 4.) According to the Complaint, Popo 

repeatedly made graphic remarks to Patterson, touched her in an inappropriate manner, 

and “aggressively pressure[d] [Patterson] to engage in three-way intercourse with him 

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and another employee.” (Id. at 5.) Patterson alleges the harassment became so severe 

and pervasive that she was eventually forced to resign. (Id. at 6-7.) Following her 

resignation and prior to initiation of this litigation, Popo and the other defendants 

(collectively, “Defendants”) allegedly authored statements on a local internet forum 

calling Patterson a “whore,” claiming she carried several sexually transmitted diseases, 

and intimating that she had welcomed Popo’s sexual advances. (Id. at 9-10.) 

 Patterson’s Complaint sought damages for Title VII sexual harassment, as well as 

for intentional infliction of emotional distress, battery, assault, and defamation. In 

response, Defendants filed a counterclaim against Patterson and a third-party complaint 

against her attorney, Peter K. Strojnik, and his law firm, the Strojnik Law Firm, LLC. 

(Doc. 8 at 1-3.) Defendants alleged that Patterson had “instigated” and reciprocated 

Popo’s sexual “banter,” and that rather than resigning voluntarily, Patterson had been 

forced out after a patron published a complaint about her on Yelp. (Id. at 4, 5.) In 

addition, Patterson and Strojnik allegedly “conspired with one another to extort money 

from Popo by threatening the disclosure of work related communications, potential 

criminal activity, and alleged affairs to the public at large.” (Id. at 6.) The counterclaim 

alleges Patterson and Strojnik demanded $500,000 in return for an agreement not to 

report unspecified criminal conduct to the police; “disseminated defamatory and libelous 

information to the public by posting on websites such as LinkedIn, Facebook and The 

Dirty Scottsdale”; and “visited [Defendants’] places of business on numerous occasions 

to protest, disseminate pamphlets and/or otherwise bully [Defendants] into capitulating to 

their unlawful demands.” (Id. at 6-8.) 

 Patterson and Defendants filed a Notice of Settlement on June 5, 2015 (Doc. 63), 

and all claims between those parties were dismissed on July 23, 2015 (Doc. 79). But 

Defendants have not dropped their claims against Strojnik and the Strojnik Law Firm. In 

a Second Amended Counterclaim filed on June 10, 2015, Defendants seek damages from 

Strojnik and the Strojnik Law Firm on seven causes of action, including business 

disparagement, wrongful interference with business relationships, libel per se, trade libel, 

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invasion of privacy, false light, and intentional infliction of emotional distress. (Doc. 65 

at 13-27.) All of these claims arise under Arizona law. Strojnik now moves to dismiss 

the Second Amended Counterclaim 1) for lack of subject matter jurisdiction, as provided 

by Federal Rule of Civil Procedure 12(b)(1), and 2) for failure to state a claim upon 

which relief can be granted, as provided by Rule 12(b)(6). 

II. ANALYSIS 

 Patterson’s Complaint asserted both a Title VII claim and various state law causes 

of action. This court therefore originally had jurisdiction over the entire case pursuant to 

28 U.S.C. § 1331, which establishes federal question jurisdiction, and § 1367(a), which 

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 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.” But the 

existence of supplemental jurisdiction at the inception of a case does not necessarily 

require a federal court to continue exercising jurisdiction over pendent state law claims 

once all federal questions have been resolved: 

The district courts may decline to exercise supplemental jurisdiction over a 

claim under subsection (a) if— 

(1) the claim raises a novel or complex issue of State law, 

(2) the claim substantially predominates over the claim or claims over 

which the district court has original jurisdiction, 

(3) the district court has dismissed all claims over which it has original 

jurisdiction, or 

(4) in exceptional circumstances, there are other compelling reasons for 

declining jurisdiction. 

28 U.S.C. § 1367(c). 

Here, Strojnik urges dismissal under § 1367(c)(3) on the grounds that all federal 

claims—i.e., those over which the court had original jurisdiction—have been dismissed.1

 

 

1

 Because all parties are residents of Arizona (Doc. 65 at 2), the court cannot 

exercise original jurisdiction over any state law claims pursuant to the diversity statute, 

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Defendants insist Patterson’s federal Title VII claim “has been settled, not truly 

dismissed” (Doc. 74 at 3), with the result that § 1367(c)(3) does not permit the court to 

refuse to exercise supplemental jurisdiction. This argument is without merit. After 

approving a settlement agreement, a court dismisses the action between the parties—as 

well as any “claims” that are part of that action. Indeed, in this case the court dismissed 

any and all claims between Patterson and Defendants on July 23, 2015. (Doc. 79.) For 

this reason, other courts have recognized that settlement of all federal claims justifies a 

decision under § 1367(c) to decline supplemental jurisdiction over any remaining state 

law causes of action. E.g., Denney v. City of Berkeley, No. C 02-5935 JL, 2004 U.S. 

Dist. LEXIS 24265, at *9 (N.D. Cal. Nov. 18, 2004) (“Plaintiff dismissed all federal 

claims against all defendants following settlement of those claims. . . . Accordingly, this 

Court declines to assert jurisdiction over the remaining claim under California law.” 

(emphasis added)); cf. Ametex Fabrics v. Just in Materials, Inc., 140 F.3d 101, 105 (2d 

Cir. 1998) (“By the time of the settlement of the jurisdiction-conferring claim, third-party 

plaintiffs and AFP had already engaged in discovery under an expedited discovery 

schedule and held a settlement conference before a magistrate. Therefore, we cannot say 

that the district court abused its discretion in retaining supplemental jurisdiction over the 

third-party action.”). The question thus becomes whether the exercise of supplemental 

jurisdiction is appropriate on the facts of this case. 

 “The decision whether to continue to exercise supplemental jurisdiction over state 

law claims after all federal claims have been dismissed lies within the district court’s 

discretion.” Satey v. JPMorgan Chase & Co., 521 F.3d 1087, 1091 (9th Cir. 2008). “The 

Supreme Court has stated . . . that ‘in the usual case in which all federal-law claims are 

eliminated before trial, the balance of factors . . . will point toward declining to exercise 

jurisdiction over the remaining state-law claims.’” Acri v. Varian Assocs., 114 F.3d 999, 

1001 (9th Cir. 1997) (en banc) (second ellipsis in original). “While discretion to decline 

to exercise supplemental jurisdiction over state law claims is triggered by the presence of 

 28 U.S.C. § 1332. 

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one of the conditions in § 1367(c), it is informed by . . . values ‘of economy, 

convenience, fairness, and comity.’” Id. 

 Retaining jurisdiction over Defendants’ state law claims will not promote judicial 

economy or convenience. This litigation began only four months ago, and the court has 

not yet issued a scheduling order or ruled on any substantive motions. No discovery has 

taken place. Dismissing the remaining claims without prejudice will permit Defendants 

to file a fresh action in state court without having first expended significant time or 

resources in this court. While Defendants are correct that “it would take time to bring [a 

new] judge up to speed” on the facts of this case (Doc. 74 at 4), that is true in every case 

in which a federal court has discretion to decline supplemental jurisdiction under 

§ 1367(c). Yet the Supreme Court has made clear that in the mine run of cases, residual 

state law claims should proceed in state court. A concern for “fairness” does not require 

an exemption from all the normal burdens of litigation. And comity counsels, as it will in 

most cases, that the Arizona courts be permitted to pass upon Defendants’ state law 

claims. Accordingly, the court declines to retain supplemental jurisdiction over this case. 

 Because this action will be dismissed under Rule 12(b)(1), there is no need to 

address whether Defendants have failed to state a claim upon which relief can be granted. 

 IT IS THEREFORE ORDERED that Counter-Defendant Peter K. Strojnik’s 

Motion to Dismiss Second Amended Counterclaim (Doc. 67) is granted. The Clerk shall 

dismiss the third-party claims against Peter K. Strojnik and the Strojnik Law Firm, LLC 

and shall terminate this case. 

 Dated this 27th day of July, 2015. 

Neil V. Wake

United States District Judge

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