By Gerald L. Maatman, Jr., Jennifer A. Riley, and Ryan T. Garippo
Duane Morris Takeaways: On June 3, 2024, in Loonsfoot, et al. v. Stake Center Locating, LLC, No. 23-CV-3171, 2024 WL 2815422 (S.D. Ill. June 3, 2024), Judge David Dugan of the U.S. District Court for the Southern District of Illinois denied a plaintiffs’ motion to dismiss his own lawsuit – a wage & hour class action – for lack of subject matter jurisdiction. This decision highlights one of the rare circumstances where a company may want to oppose a plaintiff’s proposed dismissal of his class action and force the plaintiff to address the merits of his arguments early in the litigation.
Case Background
Plaintiff Michael Loonsfoot (“Plaintiff”), a former employee of Stake Center Locating, LLC (“Stake Center”), brought claims for alleged wage & hour violations. Stake Center is a company that provides “utility locating services across the country.” Id. at *1. From December 2021 through June 2024, Plaintiff worked in a variety of different roles for Stake Center. Plaintiff, however, believed that his former employer allegedly deprived him of wages for “compensable ‘off the clock’ work” and failed to include certain amounts when calculating his overtime wages. Id.
Based on those allegations, Plaintiff filed a lawsuit against Stake Center in the U.S. District Court for the Southern District of Illinois for alleged violations of the Illinois Minimum Wage Law and the Illinois Wage Payment and Collection Act. In order to pursue those claims in federal court, Plaintiff argued that “jurisdiction is proper under [the Class Action Fairness Act (“CAFA”)] because the proposed class has more than 100 members, the minimal diversity requirement is met, and the amount in controversy exceeds $5 million dollars.” Id. at *2. Stake Center appeared, filed its answer, and then moved for judgment on the pleadings.
In response, Plaintiff filed a motion to dismiss his own complaint on the basis that the court lacked subject-matter jurisdiction to hear the dispute. Plaintiff argued that because Stake Center denied the Plaintiff’s general allegation that “[t]his Court has original subject matter over this action pursuant to the jurisdictional provisions of the Class Action Fairness Act” as well as similar allegations, jurisdiction must not be proper. Id.
The Court’s Opinion
The Court easily dispensed with what it called Plaintiff’s “unusual litigation tactic.” Id. at *3. The Court noted that where “the party that invoked the court’s jurisdiction in the first place” subsequently files a motion to dismiss “such motions are [considered] ‘unseemly.’” Id. (citing Napoleon Hardwoods, Inc. v. Professionally Designed Benefits, Inc., 984 F. 2d 821, 822 (7th Cir. 1993)). The Court explained that “[g]iven the procedural posture of the case, Plaintiff cannot unilaterally dismiss the action” and thus, decided to address the jurisdictional issue under the CAFA. Id. at *1, n. 2.
The Court analyzed the elements of original jurisdiction under the CAFA. It held that “there is no dispute that the parties are minimally diverse”; “that the proposed class exceeds 100 class members”; and that “the amount in controversy exceeds $5 million” as pled. Id. at *4. The Court further noted that “Plaintiff provides no legal authority for the contention that a Defendant’s denial of an allegation in an answer is controlling on any issues, including the existence of subject matter jurisdiction.” Id. at *2, n. 5. The Court, therefore, denied Plaintiffs’ motion to dismiss his own complaint — against the backdrop of Stake Center’s argument that Plaintiff was “only seeking dismissal to avoid a ruling on the pending Motion for Judgment on the Pleadings.” Id. at *1.
Implications For Companies
It should go without saying that it is atypical for a company to “decline[ ] Plaintiff’s request to consent to dismissal of” a class action lawsuit. Id. at *1, n. 2. That said, the defendant here astutely recognized that Plaintiff’s dismissal request was simply a procedural dance to avoid addressing the merits of the employer’s dispositive motion. The defendant recognized that the Plaintiff’s lawsuit would just be refiled in state court — which likely would be a less favorable forum to the corporate defendant.
For that reason, if corporate counsel has a winning argument that it can raise in a Rule 12 motion, it often makes sense to put plaintiffs to their proofs in federal court, and not indulge in procedural gymnastics that will only lead to a case being heard in a less favorable forum.