17‐2497‐cv Lucia Lopez Catzin v. Thank You & Good Luck Corp.
In the United States Court of Appeals For the Second Circuit
August Term 2017
No. 17‐2497‐cv
LUCIA LOPEZ CATZIN, individually and on behalf of others similarly situated, SILVIA VILLANO CLEMENTE, and YADIRA AGUILAR‐CANO,
Plaintiffs‐Appellants,
v.
THANK YOU & GOOD LUCK CORP. and ZENG LAN WANG,
Defendants‐Cross‐ Defendants‐Appellees,
IGOR BIRZH, EXCLUSIVE MANAGEMENT SOLUTION GROUP, INC., DIMITRI BEREZOVSKY, and 115th STREET AND FIRST AVE LAUNDROMAT INC.,
Defendants‐Appellees,
OFF‐BROADWAY LAUNDROMAT INC. and 2167 3rd AVE LAUNDROMAT LLC,
Defendants‐Cross‐ Claimants‐Appellees.
1 17‐2497‐cv Lucia Lopez Catzin v. Thank You & Good Luck Corp.
Appeal from the United States District Court for the Southern District of New York No. 15 Civ. 7109 (KBF), Katherine B. Forrest, District Judge, Presiding. (Argued: February 14, 2018; Decided: August 8, 2018)
Before: PARKER, HALL, and LOHIER, Circuit Judges.
Plaintiffs, several laundromat workers, brought this action against their employers under the Fair Labor Standards Act, 29 U.S.C. ' 201, et seq. and the New York Labor Law, ' 190 et seq., alleging that their employers failed to pay plaintiffs the minimum wage, overtime, and violated other requirements of the wage‐and‐hour laws. After discovery and resolution of the parties= cross motions for summary judgment, the case was proceeding to trial on various federal‐law and state‐law claims. The day before the final pretrial conference and one week prior to the first day of trial, the District Court (Forrest, J.) sua sponte, and without notice to the parties or any opportunity to be heard, issued an order revoking its exercise of supplemental jurisdiction, vacating the trial, and dismissing the case. We conclude the District Court erred in refusing to exercise supplemental jurisdiction under the circumstances.
VACATED AND REMANDED.
Michael Taubenfeld, Fisher Taubenfeld LLP, New York, N.Y., for appellants Lucia Lopez Catzin, Silvia Villano Clemente, and Yadira Aguilar‐Cano.
Mark R. Kook, Law Office of Mark R. Kook, New York, N.Y., for appellees Igor Birzh, Exclusive Management Solution Group, Inc., and Dimitri Berezovsky.
2 17‐2497‐cv Lucia Lopez Catzin v. Thank You & Good Luck Corp.
Oleg A. Mestechkin (Wing K. Chieu, on the brief), Mestechkin Law Group P.C., New York, N.Y., for appellees Off‐Broadway Laundromat, Inc., 2167 3rd Ave Laundromat LLC, and 115th Street and First Ave Laundromat Inc.
BARRINGTON D. PARKER, Circuit Judge:
This appeal from an order of the United States District Court for the
Southern District of New York (Forrest, J.) requires us to decide whether the
District Court properly sua sponte declined to exercise supplemental jurisdiction
over plaintiffs= state‐law claims and dismissed the case without affording the
parties notice or an opportunity to be heard.
Plaintiffs, several low‐wage laundromat workers, sued their employers
under the Fair Labor Standards Act (AFLSA@), 29 U.S.C. ' 201 et seq., and the New
York Labor Law (ANYLL@), ' 190 et seq., alleging that their employers failed to pay
plaintiffs the minimum wage, overtime, and failed to provide various required
wage notices and statements.
The case was litigated for nearly two years, through discovery and
summary judgment. The parties= cross motions for partial summary judgment
were granted in part and denied in part, ultimately leaving various FLSA and
3 17‐2497‐cv Lucia Lopez Catzin v. Thank You & Good Luck Corp.
NYLL claims to be resolved at trial. Three weeks prior to the start of trial and
two weeks prior to the final pretrial conference, the parties filed their required
pretrial submissions, which omitted mention of the FLSA and focused on the
alleged NYLL violations. Shortly before the final pretrial conference, plaintiffs
filed a letter that noted, among other things, that they intended to pursue only
their NYLL claims at trial because they had concluded, on the basis of an
intervening clarification in Second Circuit law, that any potential recovery under
the FLSA would be subsumed by the recovery available under the NYLL.
For reasons that are inadequately supported by the record, the District
Court concluded that plaintiffs= inclusion of the FLSA claims had all along been
disingenuous and was a stratagem to manufacture federal jurisdiction. Acting
on this assumption, the day before the final pretrial conference, and without
affording the parties notice or an opportunity to be heard, the District Court sua
sponte issued an order that deemed plaintiffs to have abandoned their federal‐law
claims. The District Court cancelled the pretrial conference and the trial
scheduled to start the following week. The District Court then declined to
exercise supplemental jurisdiction over plaintiffs= state‐law claims and dismissed
them without prejudice, leaving the parties to start from the beginning in state
4 17‐2497‐cv Lucia Lopez Catzin v. Thank You & Good Luck Corp.
court, and ordered the case closed. Plaintiffs appeal and we vacate and remand
for further proceedings.
BACKGROUND
The procedural history of this case is important for understanding the
sequence of events that precipitated the District Court=s order. In September
2015, plaintiffs filed their original complaint, bringing claims under the FLSA and
NYLL. Plaintiffs later amended their complaint and, in June 2016, filed the
operative complaint, the Third Amended Complaint (ATAC@). The TAC
alleged seven claims against varying groups of defendants: (1) failure to pay
minimum wages in violation of the FLSA, 29 U.S.C. ' 206; (2) failure to pay
overtime wages in violation of the FLSA, 29 U.S.C. ' 207; (3) failure to pay
minimum wages in violation of NYLL ' 652; (4) failure to pay overtime wages in
violation of the NYLL, see 12 N.Y.C.R.R. ' 142‐2.2 (incorporating the FLSA
overtime definition into the NYLL); (5) failure to provide required wage notices
and wage statements in violation of NYLL ' 195; (6) failure to pay
spread‐of‐hours payments in violation of the NYLL, see 12 N.Y.C.R.R. ' 142‐2.4;
and (7) failure to properly calculate wage deductions in violation of NYLL ' 193.
As to each claim, plaintiffs alleged that defendants= violations were Awillful@
5 17‐2497‐cv Lucia Lopez Catzin v. Thank You & Good Luck Corp.
under ' 255(a) of the FLSA, and ' 198 of the NYLL. As damages, plaintiffs
sought unpaid wages, prejudgment interest, liquidated damages, and attorneys=
fees and costs.
According to the TAC and the various declarations submitted in support of
the motions for summary judgment, plaintiffs worked at laundromats in New
York City owned by various defendants. Plaintiffs= duties included loading and
unloading laundry machines and dryers, washing, drying, and folding clothes,
and occasionally working as cashiers. Plaintiffs alleged that defendants
systematically underpaid them for a number of years. The three plaintiffs are
seeking approximately $13,000 in unpaid wages and other relief available under
the wage‐and‐hour laws.
Discovery included a number of depositions (at least eight), and the
production of documentary evidence, such as pay stubs, pay logs, work
schedules, operating agreements, and tax returns. In January 2016, the District
Court conditionally certified the case as an FLSA collective action under 29 U.S.C.
6 17‐2497‐cv Lucia Lopez Catzin v. Thank You & Good Luck Corp.
' 216(b). In October 2016, the District Court denied plaintiffs= motion to certify
the case as a class action under Federal Rule of Civil Procedure 23(b)(3).1
Following discovery, plaintiffs and two subsets of defendants filed cross
motions for partial summary judgment. The District Court granted these
motions in part and denied them in part. The District Court granted summary
judgment to plaintiffs on the issue of whether the conduct of certain defendants
was willful, entitling them to liquidated damages under the FLSA and NYLL (if
they later proved their underlying wage‐and‐hour claims). The District Court
also granted summary judgment to plaintiffs on whether one of the defendants
was an individual employer under the FLSA and NYLL and on plaintiffs= claim
of wage notice and statement violations under NYLL '' 195(1) and 195(3). The
District Court granted summary judgment to defendants Thank You & Good
Luck Corp., Zeng Lan Wang, 115th Street and First Avenue Laundromat Inc.,
Exclusive Management Solution Group, Inc., and Dimitri Berezovsky on
plaintiffs= FLSA claims on the ground that those defendants were not covered by
the FLSA or could not be liable under a theory of successor liability. Finally, the
District Court determined that it would maintain supplemental jurisdiction over
Plaintiffs sought to appeal the denial of their motion for class certification under 1
Rule 23(f). In February 2017, this Court denied leave to appeal.
7 17‐2497‐cv Lucia Lopez Catzin v. Thank You & Good Luck Corp.
plaintiffs= NYLL claims over those defendants. The District Court otherwise
denied the parties= summary judgment motions.
After considerable back and forth over scheduling, the District Court set
August 2, 2017, as the trial date, with pretrial materials due July 13, motions in
limine due July 14, and oppositions due July 21. A final pretrial conference was
set for July 27, 2017, roughly one week before the first day of trial.
On July 14, the parties filed their pretrial submissions, which included a
joint final pretrial order, proposed jury instructions, a proposed verdict form, and
proposed voir dire questions. The parties anticipated a short three‐day trial
with around 11 witnesses and various documents. The parties= proposed jury
instructions did not include any mention of the FLSA and instead focused on
liability under the NYLL claims, except for several references to model jury
instructions for FLSA liability, when presumably liability under the FLSA is
coextensive with liability under the NYLL. The proposed jury instructions
section for AHours Worked Definition@ also contained references to two
provisions of the Code of Federal Regulations regarding rest breaks and meal
breaks, 29 C.F.R. '' 785.18B19. The proposed verdict form contained no
8 17‐2497‐cv Lucia Lopez Catzin v. Thank You & Good Luck Corp.
references to the FLSA and was instead limited to liability and various findings
under the NYLL.
The parties also filed motions in limine. On July 22, plaintiffs filed an
opposition to defendants= motion in limine, in which they recounted the
procedural history of the case, noting that they filed the lawsuit asserting
violations of the FLSA and NYLL. But, in a footnote, plaintiffs stated, APlaintiffs
intend to pursue at trial only their NYLL claims since the NYLL provides all
relief that the FLSA provides.@
On July 26, the day before the final pretrial conference and one week before
the start of the trial, the District Court, without affording the parties notice or an
opportunity to be heard, issued the order that is the subject of this appeal. In
that order, the District Court described the parties= pretrial filings and observed
that those filings Afocus solely on the New York Labor Law.@ Catzin v. Thank You
& Good Luck Corp., No. 15 Civ. 7109 (KBF), 2017 WL 3189871, at *1 (S.D.N.Y. July
26, 2017). Noting that plaintiffs had stated that they Aintend to pursue at trial
only their NYLL claims,@ the District Court concluded that Aplaintiffs have
expressly abandoned and waived their claims under the Fair Labor Standards
Act,@ which were their only federal‐law claims. Id.
9 17‐2497‐cv Lucia Lopez Catzin v. Thank You & Good Luck Corp.
The District Court went on to address the factors district courts must
evaluate when determining whether to continue to maintain supplemental
jurisdiction when one of the four prongs of 28 U.S.C. ' 1367(c) is applicable.
These are the familiar factors of judicial economy, convenience, fairness, and
comity. See Carnegie‐Mellon Univ. v. Cohill, 484 U.S. 343, 350 (1988). Noting the
usual rule that when Aall federal‐law claims are eliminated before trial, the
balance of factors to be considered . . . will point toward declining to exercise
jurisdiction over the remaining state‐law claims,@ id. at 350 n.7, the District Court
concluded that fairness and comity weighed strongly against exercising
supplemental jurisdiction but that there was Asome judicial economy to be gained
by the exercise of supplemental jurisdiction@ because Ait is now the eve of trial.@
Catzin, 2017 WL 3189871, at *2. In the end, however, the District Court
concluded that while plaintiffs= Amotives are not entirely clear, it appears to the
Court that plaintiffs may have strategically asserted FLSA claims for the purpose
of manufacturing jurisdiction, when they truly intended to litigate only claims
under the New York Labor Law.@ Id. The District Court concluded that the
exercise of supplemental jurisdiction would therefore Aimproperly reward
plaintiffs= actions and encourage similar behavior in the future.@ Id. The
10 17‐2497‐cv Lucia Lopez Catzin v. Thank You & Good Luck Corp.
District Court accordingly dismissed plaintiffs= NYLL claims, leaving them to be
refiled in state court, cancelled the final pretrial conference and the trial, and
closed the case. This appeal followed. We review a district court=s
determination of whether to exercise supplemental jurisdiction for abuse of
discretion. Shahriar v. Smith & Wollensky Rest. Grp., Inc., 659 F.3d 234, 243 (2d
Cir. 2011).
DISCUSSION
We conclude that by failing to exercise supplemental jurisdiction under the
circumstances of this case, the District Court committed three interrelated errors.
First, it acted sua sponte without affording the parties notice and an opportunity
to be heard. Second, it impugned, on the record, plaintiffs= counsel=s motives
without affording any notice about this assessment of counsel=s conduct or any
opportunity to explain himself. Finally, the District Court=s analysis of the
factors considered under 28 U.S.C. ' 1367(c) for determining whether to exercise
supplemental jurisdiction was inadequate.
First, as noted, the District Court undertook the supplemental
jurisdiction inquiry sua sponte and dismissed the case without affording the
parties notice or any opportunity to be heard. An opportunity to be heard prior
11 17‐2497‐cv Lucia Lopez Catzin v. Thank You & Good Luck Corp.
to dismissing a case is not a mere formality and the reasons are straightforward:
ANo principle is more fundamental to our system of judicial administration than
that a person is entitled to notice before adverse judicial action is taken against
him.@ Lugo v. Keane, 15 F.3d 29, 30 (2d Cir. 1994) (per curiam). This is because
Aproviding the adversely affected party with notice and an opportunity to be
heard plays an important role in establishing the fairness and reliability of@ the
court=s decision and Aavoids the risk that the court may overlook valid answers to
its perception of defects in the plaintiff=s case.@ Snider v. Melindez, 199 F.3d 108,
113 (2d Cir. 1999). Sua sponte dismissals without notice and an opportunity to be
heard Adeviate from the traditions of the adversarial system@ and Atend to
produce the very effect they seek to avoidCa waste of judicial resourcesCby
leading to appeals and remands.@ Perez v. Ortiz, 849 F.2d 793, 797 (2d Cir. 1988).
We have held that dismissing a case without an opportunity to be heard is,
at a minimum, bad practice in numerous contexts and is reversible error in
others. For example, generally in the context of a dismissal for failure to state a
claim, A[t]he district court has no authority to dismiss a complaint for failure to
state a claim upon which relief can be granted without giving the plaintiff an
opportunity to be heard.@ Square D Co. v. Niagara Frontier Tariff Bureau, Inc., 760
12 17‐2497‐cv Lucia Lopez Catzin v. Thank You & Good Luck Corp.
F.2d 1347, 1365 (2d Cir. 1985) (Friendly, J.). While in certain circumstances a sua
sponte dismissal Amay be appropriate,@ such as Ain cases involving frivolous in
forma pauperis complaints or frivolous habeas petitions,@ Perez, 849 F.2d at 797
(citations omitted), these circumstances require that Ait is unmistakably clear that
the court lacks jurisdiction, or that the complaint lacks merit or is otherwise
defective,@ Snider, 199 F.3d at 113. This principle also applies in the context of
sua sponte dismissals without notice for lack of subject matter jurisdiction. See
Digitel, Inc. v. MCI Worldcom, Inc., 239 F.3d 187, 189 n.2 & 190 (2d Cir. 2001) (per
curiam) (construing the district court=s order Aas one deciding . . . sua sponte [a]
Rule 12(b)(1) motion to dismiss for lack of subject matter jurisdiction@ and stating
that Asuch lack of noticeCeven when the court has authority to act sua sponteCis
to be avoided@ but affirming the district court=s order on its merits). In general, a
district court=s failure to provide an opportunity to be heard prior to a sua sponte
dismissal, as Judge Friendly noted, Ais, by itself, grounds for reversal.@ Square D,
760 F.2d at 1365 (quoting Lewis v. New York, 547 F.2d 4, 5‐6 & n.4 (2d Cir. 1976)).
This was not a case in which Ait is unmistakably clear that the court lacks
jurisdiction.@ Snider, 199 F.3d at 113. To the contrary, it is indisputable that the
District Court possessed supplemental jurisdiction. The District Court only
13 17‐2497‐cv Lucia Lopez Catzin v. Thank You & Good Luck Corp.
faced the discretionary inquiry of whether to discontinue that jurisdiction. See
28 U.S.C. ' 1367(c) (providing that the district court Amay decline to exercise
supplemental jurisdiction@ if one of four circumstances applies (emphasis
added)). Here, the District Court identified ' 1367(c)(3), which is when Athe
district court has dismissed all claims over which it has original jurisdiction,@ as
the applicable prong of ' 1367(c) that could provide an occasion to consider
whether to decline to exercise supplemental jurisdiction. Under this prong, in a
great many cases, the evaluation will usually result in the dismissal of the
state‐law claims. See Cohill, 484 U.S. at 350 n.7. But, because there will be cases
where dismissal will not be appropriate simply by virtue of the fact that the
federal‐law claims have been eliminated prior to trial, district courts must still
conduct the inquiry and carefully evaluate the relevant factors. Indeed, we have
upheld the exercise of supplemental jurisdiction even when all federal‐law claims
were eliminated prior to trial, for example, in long‐pending cases presenting no
novel issues of state law where Adiscovery had been completed, dispositive
motions had been submitted, and the case would soon be ready for trial.@
Kroshnyi v. U.S. Pack Courier Servs., Inc., 771 F.3d 93, 102 (2d Cir. 2014) (citing
14 17‐2497‐cv Lucia Lopez Catzin v. Thank You & Good Luck Corp.
Raucci v. Town of Rotterdam, 902 F.2d 1050, 1055 (2d Cir. 1990)); see, e.g., Valencia ex
rel. Franco v. Lee, 316 F.3d 299, 305B06 (2d Cir. 2003) (collecting cases).
Hearing from the parties either in person or on the papers is typically an
essential component of the inquiry into whether to decline to exercise
supplemental jurisdiction because, as this case illustrates, doing so goes a long
way towards reasoned decisionmaking and enhances the fairness of the
proceedings. At the time this action was commenced in the District Court in
2015 there was uncertainty as to whether multiple sets of liquidated damages
could be obtained under both the FLSA and the NYLL for the same conduct.
But, in December 2016, we noted in a summary order that the NYLL and FLSA
liquidated damages provisions are materially identical and can provide only one
overlapping award of liquidated damages for the same conduct. See Chowdhury
v. Hamza Express Food Corp., 666 F. App=x 59, 61 (2d Cir. 2016) (summary order).
This conclusion was later adopted as the law of the Circuit in an opinion. See
Rana v. Islam, 887 F.3d 118, 123 (2d Cir. 2018) (per curiam) (AWe therefore
interpret the NYLL and FLSA as not allowing duplicative liquidated damages for
the same course of conduct.@).
15 17‐2497‐cv Lucia Lopez Catzin v. Thank You & Good Luck Corp.
Had the District Court heard from the parties, light might have been shed
on whether this clarification in the law had impacted the case. The plaintiffs
could have explained whether they were trying to streamline the issues for the
jury by not having to prove FLSA elements not required for NYLL liability, under
which all their recovery could be obtained; whether they intended to abandon
their FLSA claims; and whether they would continue to do so if the result would
be an 11th‐hour dismissal of the case. Insofar as the District Court based its
determination on its assessment that plaintiffs were forum shopping and never
actually intended to litigate their FLSA claims, giving plaintiffs an opportunity to
be heard on this view might have enabled them to explain why they brought
FLSA claims and litigated those claims for nearly two years, through discovery,
and through summary judgment. Such an opportunity to be heard would have
increased the fairness of the proceedings and minimized the risk that the court
may have overlooked valid answers to its concerns. See Snider, 199 F.3d at 113.
We note that an opportunity to be heard on whether to exercise
supplemental jurisdiction may be inherent in the course of pre‐trial proceedings
such as those resolving motions to dismiss or for summary judgment. In such
situations, a district court need not provide a separate opportunity to be heard
16 17‐2497‐cv Lucia Lopez Catzin v. Thank You & Good Luck Corp.
beyond the briefing and resolution of such motions. But, insofar as a district
court undertakes, sua sponte, the inquiry into whether to maintain supplemental
jurisdiction under circumstances similar to those presented here, it must give the
parties notice and an opportunity to be heard prior.
Second, the District Court=s error in declining to retain supplemental
jurisdiction was exacerbated by its belief that plaintiffs were forum shopping and
had brought their FLSA claims in order to manufacture federal jurisdiction. The
problem with this explanation is that it is unsupported by the record and appears
at odds with the course of the litigation. As noted, the caseCincluding the
federal‐law claimsCwas vigorously litigated for years and involved significant
discovery, dispositive motions, and a class certification motion that the plaintiffs
attempted to appeal to the Second Circuit. The case was ready for trial.
We cannot glean from the record why counsel would have gone through
all this effort if the federal‐law claims were simply a ploy to get into federal court.
The District Court itself noted the tenuousness of its conclusion, stating that,
while plaintiffs= motives Aare not entirely clear,@ it nonetheless Aappears@ that
plaintiffs Amay@ have strategically brought their FLSA claims Afor the purpose of
manufacturing jurisdiction, when they truly intended to litigate only claims
17 17‐2497‐cv Lucia Lopez Catzin v. Thank You & Good Luck Corp.
under the New York Labor Law.@ Catzin, 2017 WL 3189871, at *2. The District
Court went on to acknowledge Athat it is now the eve of trial and there is some
judicial economy to be gained by the exercise of supplemental jurisdiction.
However, the Court believes that doing so would improperly reward plaintiffs=
actions and encourage similar behavior in the future.@ Id. The District Court
cited nothing in the recordCother than the purported recent withdrawal of the
FLSA claimsCand made no adequate findings to support this determination.
We do not think the District Court should have reached such conclusions about
plaintiffs= motives while simultaneously acknowledging that those motives were
Anot entirely clear.@ The District Court suggested that plaintiffs= counsel had
Astrategically@ asserted FLSA claims in order to Amanufactur[e] jurisdiction@ and
saw dismissal of the case as a form of sanction so that the court would not
Aimproperly reward plaintiffs= actions and encourage similar behavior in the
future.@ Id. This reasoning comes perilously close to charging plaintiffs=
counsel with unethical behavior, something a court should never do except with
the support of a careful inquiry, thorough analysis, and thoughtfully expressed
findings.
18 17‐2497‐cv Lucia Lopez Catzin v. Thank You & Good Luck Corp.
Third, we are not convinced that the District Court properly conducted the
inquiry into whether to continue to exercise supplemental jurisdiction under 28
U.S.C. ' 1367. As we have stated, that provision requires that Aonce it is
determined that a supplemental claim is related to the claim within the court=s
original jurisdiction such that they form the same case or controversy,
supplemental jurisdiction over the related claim is mandatory.@ Itar‐Tass Russian
News Agency v. Russian Kurier, Inc., 140 F.3d 442, 447 (2d Cir. 1998). In order for
a district court to decline to exercise supplemental jurisdiction, Awhere section
1367(a) is satisfied, the discretion to decline supplemental jurisdiction is available
only if founded upon an enumerated category of subsection 1367(c).@ Shahriar,
659 F.3d at 245.
Section 1367(c) provides that A[t]he district courts may decline to exercise
supplemental jurisdiction over a claim under [' 1367(a)] ifC
(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.@
19 17‐2497‐cv Lucia Lopez Catzin v. Thank You & Good Luck Corp.
28 U.S.C. ' 1367(c). If one of the ' 1367(c) categories applies, the district court
may then undertake the discretionary inquiry of whether to exercise
supplemental jurisdiction. If one of those categories applies, Aa district court
should not decline to exercise supplemental jurisdiction unless it also determines
that doing so would not promote the values articulated in Gibbs: economy,
convenience, fairness, and comity.@ Jones v. Ford Motor Credit Co., 358 F.3d 205,
214 (2d Cir. 2004) (citing United Mine Workers of America v. Gibbs, 383 U.S. 715, 726
(1966)); see also Kolari v. New York‐Presbyterian Hosp., 455 F.3d 118, 122 (2d Cir.
2006) (AOnce a district court=s discretion is triggered under ' 1367(c)(3), it
balances the traditional values of judicial economy, convenience, fairness, and
comity.@). The declining of supplemental jurisdiction must actually promote
those values as Athe fact that one or more of the grounds for declining to exercise
supplemental jurisdiction set forth in section 1367(c) applies does not mean that
dismissal is mandated.@ Oneida Indian Nation of New York v. Madison County, 665
F.3d 408, 439 (2d Cir. 2011). We have emphasized both that, insofar as a '
1367(c) category is applicable, supplemental jurisdiction is a Adoctrine of
discretion, not of plaintiffs= right,@ Kolari, 455 F.3d at 122 (quoting Gibbs, 383 U.S.
at 726), and that A[i]n providing that a district court >may= decline to exercise
20 17‐2497‐cv Lucia Lopez Catzin v. Thank You & Good Luck Corp.
[supplemental] jurisdiction, [' 1367(c)] is permissive rather than mandatory,@
Valencia, 316 F.3d at 305.
The District Court invoked ' 1367(c)(3) as the statutory basis that triggered
the discretionary inquiry of whether to exercise supplemental jurisdiction. It
determined that plaintiffs had abandoned their federal‐law claims, and then it,
sua sponte, conducted the inquiry into whether to continue to exercise
supplemental jurisdiction. The District Court framed its analysis by citing Cohill
(which was decided prior to the codification of ' 1367 in 1990) for the proposition
that Ain 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.@ Catzin, 2017 WL 3189871, at *2 (quoting Cohill,
484 U.S. at 350 n.7). But, the District Court=s application of the ' 1367(c)(3)
factors was inherently speculative. Because it did not hear from the parties, the
record does not afford us an adequate basis for examining whether the District
Court adequately assessed the ' 1367(c)(3) factors.
When ' 1367(c)(3) applies, the district court must still meaningfully balance
the supplemental jurisdiction factors. The principle that the elimination of
federal‐law claims prior to trial generally points to declining to exercise
21 17‐2497‐cv Lucia Lopez Catzin v. Thank You & Good Luck Corp.
supplemental jurisdiction Ain the usual case@ clearly does not mean that the
balance of the factors always points that way. Indeed, Cohill stated that this
principle Adoes not establish a mandatory rule to be applied inflexibly in all
cases.@ Cohill, 484 U.S. at 350 n.7. Nor does the record in this case establish that
it falls within the ambit of the Ausual case,@ where judicial economy, convenience,
fairness, and comity counsel against exercising supplemental jurisdiction when '
1367(c)(3) applies.
Our review of the record before us leaves us with significant doubt as to
how the District Court viewed the supplemental jurisdiction factors.
Supplemental jurisdiction was revoked one day prior to the final pretrial
conference and a week before the scheduled trial date. The trial was to be short,
roughly three days, and the parties and the District Court were ready for trial.
The case presented no issues of special state court expertise nor any novel
questions of state law or state‐law causes of action that would be better decided
in state court. Instead, wage‐and‐hour cases like this one are quotidian, and
federal courts are well experienced in presiding over them, even when they
involve claims under the NYLL for which there is no FLSA equivalent, such as
for failure to provide wage notices. The District Court did not explain how
22 17‐2497‐cv Lucia Lopez Catzin v. Thank You & Good Luck Corp.
comity between state and federal courts is advanced by saddling a state court
colleague with a wage‐and‐hour case of the type that is tried in federal court
every day. Nor does the record lend itself to an understanding as to how
convenience or fairness was served by setting backwards the course of a case the
parties had vigorously litigated for nearly two years and causing them to expend
who knows how much time, legal fees, and distraction starting over in state
court.
Litigants come to court to have their problems solved. The three plaintiffs
here are immigrant laborers who are seeking allegedly unpaid minimum wages
and overtime wages totaling roughly $13,000 (along with liquidated damages) for
washing, drying, and folding clothes. While this amount of money may be
modest to some, it could well be significant to individuals in plaintiffs=
circumstances. The fact that the case has been vigorously litigated for so long is
to us an indication of its importance to the parties. The defendants are small
business owners of laundromats who presumably have experienced years of
legal bills and distraction from the responsibilities of running their businesses.
The record yields no clarity as to how judicial economy, convenience, fairness, or
comity might be served by requiring the parties to expend additional years as
23 17‐2497‐cv Lucia Lopez Catzin v. Thank You & Good Luck Corp.
well as dollars re‐litigating in state court. While we are certainly mindful of the
fact that district courts face significant caseloads and real pressure to move cases
along, the pressure to close cases must not overshadow the federal courts=
paramount role of being a forum where disputes are efficiently and fairly
resolved. After all, as the very first Rule of Civil Procedure provides, procedure
in the district courts is meant Ato secure the just, speedy, and inexpensive
determination of every action and proceeding.@ Fed. R. Civ. P. 1.
CONCLUSION
For the foregoing reasons, the order of the District Court is VACATED and
the case is REMANDED for further proceedings consistent with this opinion.