Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-azd-2_14-cv-02414/USCOURTS-azd-2_14-cv-02414-0/pdf.json

Nature of Suit Code: 710
Nature of Suit: Fair Labor Standards Act
Cause of Action: 28:1441 Petition for Removal- Labor/Mgmnt. Relations

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WO 

IN THE UNITED STATES DISTRICT COURT 

FOR THE DISTRICT OF ARIZONA 

Ann T. Palmer, 

Plaintiff/Counterdefendant, 

v. 

Todd H. Franks, et al., 

Defendants/Counterclaimants

No. CV-14-02414-PHX-SMM

ORDER 

 Pending before the Court are Plaintiff Ann Palmer’s (“Palmer”) Motion and 

Memorandum of Law in Support of Plaintiff/Counterclaimant’s Rule 12(b)(1) Motion to 

Dismiss and rule (12(e) Motion for a More Definite Statement and Defendants’ Todd 

Franks, Nancy L.R. Bodinet, and Franks, Houser & McVey, P.C. (“Defendants”) 

Opposition to Plaintiff’s Counterdefendant’s Rule 12(b)(1) Motion to Dismiss and 

Motion for more Definite Statement and Cross-Motion to Remand. (Docs. 16; 24.) The 

parties have responded and the motions are fully briefed. (Docs. 25; 28.) Having 

reviewed the parties’ briefing, the Court will grant Palmer’s motion in part and dismiss 

Defendants’ counterclaims. 

BACKGROUND 

 Palmer, Defendant’s former employee, originally brought a complaint in Arizona 

state court against Defendants under the Fair Labor Standards Act (FLSA). Defendants 

removed the action to this Court and, after a failed mediation, filed an answer alleging a 

number of state law counterclaims, including: breach of contract, trespass, conversion, 

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misappropriation, violation of the Arizona Uniform Trade Secrets Act, spoliation, 

vandalism, and breach of the duty of loyalty. (Docs. 1; 12.) The parties subsequently 

settled the original FLSA claim. The counterclaims remain in dispute. 

STANDARD OF REVIEW 

 Under 28 U.S.C.A. § 1367(a), “district courts 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.” Nonetheless, “district courts may decline to exercise supplemental 

jurisdiction over a claim under subsection (a) if... the district court has dismissed all 

claims over which it has original jurisdiction.” 28 U.S.C.A. § 1367(d). The Ninth Circuit 

has not ruled on whether the nexus between an FLSA unpaid overtime claim and state 

law counterclaims is sufficient to find a “common nucleus of operative fact,” as is 

required under 1367(a). United Mine Workers v. Gibbs, 383 U.S. 715, 725 (1966). 

However, other circuits addressing this issue found that a prior employment relationship 

is insufficient to support supplemental jurisdiction over state law counterclaims brought 

in FLSA cases. See Lyon v. Whisman, 45 F.3d 758, 763 (3d Cir. 1995) (employment link 

insufficient to trigger supplemental jurisdiction over state law claims that have nothing to 

do with unpaid overtime); Wilhelm v. TLC Lawn Care, Inc., No. CIV.A. 07-2465-KHV, 

2008 WL 640733 (D. Kan. Mar. 6, 2008) (no common nucleus of operative fact between 

FLSA unpaid overtime claim and state law tort counterclaims). 

DISCUSSION 

 Palmer argues that the counterclaims should be dismissed under alternative 

theories: (1) lack of nexus between the dismissed FLSA claim and Defendant’s 

counterclaims; and (2) the Court’s authority is discretionary. (Doc. 16 at 2.) Defendants, 

regardless of the supplemental jurisdiction question, argue that dismissal would be 

inappropriate and that the counterclaims should instead be remanded to state court 

because this district, among others, have done so in similar circumstances. 

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 The Court finds an insufficient nexus between Palmer’s original FLSA claim and 

Franks’ state law coutnerclaims and therefore will dismiss the remaining counterclaims. 

As described above, the employment link, standing alone, is insufficient to trigger 

supplemental jurisdiction over state law claims that are unrelated to the underlying FLSA 

claim. See Lyon v. Whisman, 45 F.3d 758, 763 (3d Cir. 1995); Wilhelm v. TLC Lawn 

Care, Inc., No. CIV.A. 07-2465-KHV, 2008 WL 640733 (D. Kan. Mar. 6, 2008). The 

eight filed counterclaims simply do not share the requisite “common nucleus of operative 

fact” with the original unpaid overtime claim. Gibbs, 383 U.S. at 725. 

 Moreover, even if the Court found that grounds for supplemental jurisdiction 

existed, denial would still be proper. See 28 U.S.C.A. § 1367(c) (supplemental 

jurisdiction is discretionary when the court dismisses all claims over which it had original 

jurisdiction); see also Gibbs, 383 U.S. at 726 (instructing that state law claims should be 

dismissed if federal claims are dismissed before trial). The Court therefore declines to 

exercise supplemental jurisdiction over Defendant’s counterclaims and will dismiss the 

action. 

Conclusion

 In light of the Court’s findings, judgment in favor of Palmer is proper. 

Accordingly, 

 IT IS HEREBY ORDERED granting in part Palmer’s Motion to Dismiss 

Defendant’s/Counterclaimants’ Counterclaims and for a More Definite Statement. (Doc. 

16.) The counterclaims are dismissed without prejudice. 

IT IS FURTHER ORDERED denying in part Palmer’s Motion to Dismiss 

Defendant’s/Counterclaimants’ Counterclaims and for a More Definite Statement. (Doc. 

16.) Defendants need not file a more definite statement as that issue is now moot. 

IT IS FURTHER ORDERED denying Defendants’ Motion in Opposition. (Doc. 

24.) The counterclaims will not be remanded to state court. Defendants may refile the 

counterclaims in state court. Time will be tolled for six months pursuant to 28 U.S.C.A. § 

/// 

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1376(d) and A.R.S. § 12-504(A). 

 Dated this 22nd day of September, 2015. 

Honorable Stephen M. McNamee

Senior United States District Judge

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