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Cordero v. Voltaire, LLC - No. A-13-CA-253-LY, 2013 U.S. Dist. LEXIS 172532 (W.D. Tex. Dec. 6, 2013)


Federal courts are tribunals of limited subject matter jurisdiction and may only entertain a case that fits within the judicial power of U.S. Const. art. III and a statutory grant of subject matter jurisdiction, such as federal question jurisdiction and diversity of citizenship jurisdiction. When a Fed. R. Civ. P. 12(b)(1) motion is filed in conjunction with other Rule 12 motions, the court should consider the Rule 12(b)(1) jurisdictional attack before addressing any attack on the merits. Considering Rule 12(b)(1) motions first prevents a court without jurisdiction from prematurely dismissing a case with prejudice. When the court dismisses for lack of subject matter jurisdiction, that dismissal is not a determination of the merits and does not prevent the plaintiff from pursuing a claim in a court that does have proper jurisdiction.


Plaintiffs Cordero, Benitez, Cory Harvey, Remi Harvey and Marrujo sue their former employer, Defendant VoltaireLLC (Voltaire), a construction company, to recover unpaid overtime wages allegedly due under the Fair Labor Standards Act (FLSA). Four plaintiffs were employed as laborers with Voltaire, while one plaintiff was employed as Vice President of Construction. Plaintiffs allege that Voltaire willfully failed to pay them at least one and one-half times their regular rate of pay for overtime hours worked as is required under the FLSA.

In response, Voltaire alleges that Plaintiffs cannot recover under the FLSA, or that any recovery should be reduced because Plaintiffs have falsified and inflated the hours they allegedly worked. Specifically, Voltaire alleges that "[Plaintiff-Laborers] and numerous other contractors working at [Voltaire]'s job sites would provide their time to [plaintiff vice-president] who would then accumulate that time and provide it to [Voltaire]. [The Vice-president] was involved in a scheme to defraud and steal from [Voltaire] which included falsifying and inflating the time [they] claimed to work for [Voltaire] and also conspiring with the other workers to falsify and inflate their time that was turned in to [Voltaire]."  In addition, Voltaire alleges that Plaintiffs took valuable materials and equipment from it. Based upon the foregoing, Voltaire has asserted the affirmative defenses of statute of limitations, unclean hands, offset, good-faith and estoppel, as well as counterclaims for fraud, theft, conversion and breach of fiduciary duty. Voltaire has also asserted a conspiracy counterclaim against three of the Plaintiffs.


Are Voltaire's counterclaims permissive, and fail to assert an independent basis for federal court jurisdiction and, therefore, must be dismissed pursuant to Federal Rule of Civil Procedure 12 (b)(1)?




There is no claim that Voltaire's state law counterclaims of theft, conversion and fiduciary duty are supported by independent grounds of federal jurisdiction. The only question is thus whether those counterclaims fall within the supplemental jurisdiction of the federal court. Under  28 U.S. C. § 1367(a), the district court may exercise supplemental jurisdiction over state claims that do not independently come within the court's jurisdiction so long as they "form part of the same case or controversy" as the claims which do fall within the court's original jurisdiction. Therefore, the question is whether the supplemental claims are so related to the original claims that they derive from a "common nucleus of operative fact." In making this inquiry, courts should look to whether a claimant would ordinarily be expected to try all the claims under consideration in a single proceeding.

Voltaire's counterclaims for theft, conversion, and breach of fiduciary duty do not arise from the same set of facts as the FLSA claims. Voltaire's counterclaims do not share common facts with the FLSA claims and a different body of evidence will be required to prove those claims. The only nexus between the FLSA claims and Voltaire's counterclaims is the employment relationship between the parties.  The mere fact that the parties were once linked by an employer-employee relationship is insufficient when the claims would stir such different issues and rely on such different facts and evidence. Thus, the federal court held that there was no supplemental jurisdiction over the unrelated counterclaims in FLSA actions.

Furthermore, even if the counterclaims did fall within the court's supplemental jurisdiction, the federal court opined that the district judge decline to exercise jurisdiction over them because "there are other compelling reasons for declining jurisdiction, inter alia, a general aversion to permit an employer to file counterclaims in FLSA suits for money the employer claims the employee owes it, or for damages the employee's tortious conduct allegedly caused.

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