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HERMAN v. EXCEL CORP.

February 9, 1999

ALEXIS M. HERMAN, SECRETARY OF LABOR, UNITED STATES DEPARTMENT OF LABOR, PLAINTIFF,
v.
EXCEL CORPORATION, DEFENDANT.



The opinion of the court was delivered by: Richard Mills, District Judge.

OPINION

The Secretary of Labor has filed an enforcement action against an employer for alleged violations of the Fair Labor Standards Act.

May an employer file a counterclaim, in that enforcement action, against the Secretary of Labor?

The employer may, pursuant to the Administrative Procedure Act, if the Secretary of Labor's action constitutes a final agency action.

I. BACKGROUND

The United States Secretary of Labor ("the Secretary"), acting in her official capacity, has filed the instant enforcement action against the Excel Corporation for violations of the Fair Labor Standards Act ("FLSA"). 29 U.S.C. § 201 et seq. Based upon a new interpretation of the FLSA, the Secretary has alleged that Excel violated the FLSA by failing to compensate its employees for all of their hours of employment including, but not limited to, time spent donning, doffing, and cleaning personal protective equipment. Although Excel owns several meat processing plants, the Secretary has chosen to bring an enforcement action only against Excel's Beardstown, Illinois, processing plant.

Because the Secretary has limited her enforcement action to only one of its processing plants, Excel seeks a declaratory judgment so that it may obtain a ruling which will be applied consistently to all of its meat processing plants covered by its collective bargaining agreements. Excel believes that a counterclaim best achieves this result with no increased burden upon the Court. Accordingly, on December 2, 1998, Excel filed a motion for leave to file an amended Answer and a Counterclaim for declaratory relief. The next day, Excel filed a similar motion asking for leave to file its Answer and Counterclaim instanter.

Although the Secretary does not object to Excel's motions for leave to file a First Amended Answer, the Secretary does object to Excel's motions for leave to file a Counterclaim. The Secretary argues that Excel's Counterclaim for declaratory relief is barred by the principle of sovereign immunity. In addition, the Secretary asserts that this Court lacks subject matter jurisdiction over Excel's Counterclaim.

Excel argues that sovereign immunity does not bar its Counterclaim because the 1976 amendments to the Administrative Procedure Act ("APA"), 5 U.S.C. § 702, eliminated the Government's defense of sovereign immunity in declaratory judgment actions. Furthermore, Excel claims that this Court has subject matter jurisdiction over its Counterclaim based upon supplemental jurisdiction (28 U.S.C. § 1367), original subject matter jurisdiction (28 U.S.C. § 1331), and/or jurisdiction over statutes regulating commerce (28 U.S.C. § 1337).

II. ANALYSIS

Although the Secretary's sovereign immunity and subject matter jurisdiction arguments are somewhat intertwined, the Court will consider them separately for purposes of ruling upon Excel's motions.

A. SUBJECT MATTER JURISDICTION

Contrary to its argument, none of the statutes cited by Excel provide an independent basis for jurisdiction allowing it to file a Counterclaim.*fn1 Title 28 U.S.C. § 1367 provides supplemental jurisdiction over pendent and ancillary claims in cases over which a federal district court already has subject matter jurisdiction. Title 28 U.S.C. § 1331 and § 1337 provide subject matter jurisdiction based upon actions arising under federal laws and actions arising under any act regulating commerce, respectively.

Although the Court has jurisdiction over the Secretary's enforcement action, although the FLSA is a federal statute, and although the FLSA regulates commerce, the Act does not provide a cause of action for Excel's Counterclaim. The FLSA provides that employees and the Secretary of Labor may bring and maintain causes of action against an employer who is violating the Act; it does not provide for a declaratory judgment action by an employer against the Secretary of Labor.*fn2 29 U.S.C. ยง 215, 216, & 217. Because the FLSA does not provide a cause of ...


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