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Emanuel v. Rolling in the Dough

November 2, 2010

KIM EMANUEL, PLAINTIFF,
v.
ROLLING IN THE DOUGH, INC., AND KENNETH R. LINDEMAN, DEFENDANTS.
ROLLING IN THE DOUGH, INC., AND KENNETH R. LINDEMAN, THIRD-PARTY PLAINTIFFS,
v.
DAVID P. SHAFER, THIRD-PARTY DEFENDANT.



The opinion of the court was delivered by: The Honorable Sharon Johnson Coleman, Judge Presiding.

MEMORANDUM OPINION AND ORDER

This case comes before the Court on Third-Party Defendant David P. Shafer's ("Shafer") Motion to Dismiss the Third-Party Complaint pursuant to Rule 12(b)(1)*fn1 and Rule 12(b)(6).

Alternatively, Shafer seeks a more definite statement under Rule 12(e). Defendants/Third-Party Plaintiffs, Rolling in the Dough and Kenneth Lindeman ("Rolling in the Dough") filed a three count third-party complaint against Shafer seeking (1) a declaratory judgment finding that Shafer is an "employer" within the meaning of the Fair Labor Standards Act ("FLSA"), the Illinois Minimum Wage Act, and the Illinois Wage Payment and Collection Act; (2) common law indemnity and/or contribution; and (3) breach of common law and/or statutory duties. Rolling in the Dough asserts as damages "the litigation costs, expenses, attorneys' fees and other potential losses and/or damages in defending the instant civil action and pursuing these third-party claims." Third-Party Complaint ¶¶ 9, 12,15.

Background

Plaintiff, Kim Emanuel filed a complaint against Rolling in the Dough and Kenneth Lindeman, asserting that she had worked for Rolling in the Dough for approximately two years and had never received any compensation. Emanuel's complaint alleges violations of the Fair Labor Standards Act, the Illinois Minimum Wage Act, and the Illinois Wage Payment and Collection Act. She is seeking recovery of unpaid wages among other remedies.

Rolling in the Dough and, its principal, Lindeman, filed a third-party complaint against David Shafer, which is the subject of the instant motion to dismiss. Rolling in the Dough alleges that Shafer was employed as the store manager and either hired or allowed Emanuel to work against the express instruction by Rolling in the Dough not to employ her in any way. Shafer now moves to dismiss the third-party complaint against him.

Rule 12(b)(1): Lack of Subject Matter Jurisdiction

Shafer moves to dismiss on the basis that the claims in the third-party complaint are not the same case or controversy and thus the Court lacks subject matter jurisdiction. Shafer contends that an employment relationship alone is insufficient in an FLSA case to provide a common nucleus of operative fact establishing supplemental jurisdiction over the employer's state law claims against an employee.

Rolling in the Dough's third-party complaint does not contain a jurisdictional statement as required by Rule 8. "If subject matter jurisdiction is not evident from the face of the complaint, the motion to dismiss pursuant to Rule (b)(1) would be analyzed as any other motion to dismiss, by assuming for purposes of the motion that the allegations in the complaint are true." United Phosphorus, Ltd. v. Angus Chem. Co., 322 F.3d 942, 946 (7th Cir. 2003). Dismissal is required if, taking the properly pleaded facts as true, a complaint fails to describe a claim that is plausible on its face. Ashcroft v. Iqbal, __ U.S. __, 129 S.Ct. 1937, 1949, 173 L.Ed. 2d 868 (2009).

Presumably, Rolling in the Dough is asserting supplemental jurisdiction pursuant to 28 U.S.C. §1367 since its claims are based on state law with the possible exception (as discussed below) of Count I, seeking declaratory judgment. Section 1367(a) provides for supplemental jurisdiction in over all other claims that are so related to any civil action of which the district court has original jurisdiction that they form part of the same case or controversy under Article III of the United States Constitution. The Seventh Circuit has generally found that "a loose factual connection" is sufficient to satisfy the same case or controversy requirement. See Houskins v. Sheahan, 549 F.3d 480, 495 (7th Cir. 2008); Baer v. First Options of Chicago, Inc., 72 F.3d 1294, 1299 (7th Cir. 1995); Ammerman v. Sween, 54 F.3d 423, 424 (7th Cir. 1995). Here, Rolling in the Dough has alleged that Shafer was the manager of the store at which the plaintiff Kim Emanuel claims to have been employed and that Shafer was principally responsible for the daily operations of the store, including employee work schedules and general supervision. Third-Party Complaint ¶¶ 3-4. Rolling in the Dough also alleges that Shafer and Emanuel were romantic partners and Shafer permitted Emanuel to work or in the store against Rolling in the Dough's instructions not to hire or employ Emanuel without prior consent. Third-Party Complaint ¶¶ 3, 5. All three counts of the third-party complaint concern the employment relationships of Shafer and Emanuel relative to Rolling in the Dough. Thus, regardless of whether Rolling in the Dough's third-party claims against Shafer ultimately have merit, the Court has supplemental jurisdiction over those claims. See REP MCR Realty, LLC. v. Lynch, 200 Fed. Appx. 592, 593 (7th Cir. 2006) (finding that because it was the defendant who impleaded pursuant to Rule 14 the third-party defendants, the third-party claim (over which there was no independent diversity jurisdiction) fell within the court's supplemental jurisdiction).

Rule 12(b)(6): Failure to State a Claim

Shafer also moves to dismiss pursuant to Rule 12(b)(6) on the basis that Rolling in the Dough failed to state a claim upon which relief can be granted as to any of the counts. Specifically, Shafer argues that Count II for implied indemnity or contribution under common law is preempted by federal law and no court has allowed an employer to seek indemnification from an employee under FLSA. As to Count III, Shafer contends that Rolling in the Dough has failed to adequately allege breach of loyalty based on Shafer's allege disobedience of instructions from Rolling in the Dough not to hire or permit Emanuel to work in the restaurant. Shafer also asserts that Count I for declaratory judgment is deficient because Rolling in the Dough did not allege that it sought declaratory judgment pursuant to the federal Declaratory Judgment Act (28 U.S.C. §2201).

"A complaint will withstand a motion to dismiss if it provides a short and plain statement of the claim showing that the pleader is entitled to relief that is also sufficient to provide the defendant with fair notice of the claim and its basis.

In order to demonstrate that he is entitled to relief, however, the pleader must show through his allegations that it is plausible, rather than merely ...


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