Esquivel v. Downhole Tech.

Decision Date30 June 2022
Docket NumberCivil Action 4:21-cv-00181
PartiesCARLOS ESQUIVEL, et al., Plaintiffs. v. DOWNHOLE TECHNOLOGY, LLC, et al., Defendants.
CourtUnited States District Courts. 5th Circuit. United States District Courts. 5th Circuit. Southern District of Texas

MEMORANDUM AND RECOMMENDATION

ANDREW M. EDISON, UNITED STATES MAGISTRATE JUDGE

Pending before me is The WellBoss Company LLC's Motion for the Court to Deny Supplemental Jurisdiction Over Plaintiffs' State Law Claims. Dkt. 83. After carefully reviewing the motion, the response, and the reply, as well as the applicable law, I recommend that the motion be DENIED.[1]

BACKGROUND

Carlos Esquivel originally brought this lawsuit in February 2020 against Defendants Downhole Technology LLC, National Boss Hog Energy Services LLC, and The WellBoss Company LLC (“WellBoss”) (collectively Defendants) on behalf of himself and other similarly situated individuals to recover allegedly unpaid overtime under the Fair Labor Standards Act (“FLSA”) and New Mexico state law. Over time, 58 individuals have opted-in to this lawsuit. The Third Amended Class and Collective Action Complaint, filed on May 7, 2021 alleges causes of action under the FLSA and its state counterparts in five states: Colorado, New Mexico, North Dakota, Ohio, and Pennsylvania. Plaintiffs contend that Defendants violated these federal and state wage-and-hour laws by failing to compensate employees at time and one-half their regular rate of pay for all overtime hours worked. The FLSA claims are brought as a collective action; the New Mexico state-law claims are brought as a putative class action; and the remaining state-law claims are brought individually by selected Plaintiffs.

Although there is no question that this Court possesses original jurisdiction over the FLSA claims, WellBoss asks me to decline to exercise supplemental jurisdiction over Plaintiffs' state-law claims.

DISCUSSION

When there is original jurisdiction due to a federal question federal law provides that “the district courts shall have supplemental jurisdiction over all other claims that are so related to claims in the action within such original jurisdiction that they form part of the same case or controversy.” 28 U.S.C. § 1367(a).

In this case, the operative facts underlying the FLSA and state-law claims are essentially the same. Plaintiffs, all of whom acted as Wellsite Performance Advisors in the oil field servicing business, contend that they were improperly paid an annual amount plus a day rate with no allowance for overtime pay. To address the FLSA and state-law claims, the parties will rely substantially on the same operative facts. Each Plaintiff will need to show that he was an employee, worked more than 40 hours per week, and was not paid time and one-half for overtime.

Even though supplemental jurisdiction may be proper, 28 U.S.C § 1367(c) provides that district courts may decline to exercise supplemental jurisdiction over a claim if: (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.' D'Onofrio v. Vacation Publ'ns, Inc., 888 F.3d 197, 207 (5th Cir. 2018) (quoting 28 U.S.C. § 1367(c)). In deciding whether to relinquish supplemental jurisdiction, a district court looks “to the statutory factors set forth by 28 U.S.C. § 1367(c), and to the common law factors of judicial economy, convenience, fairness, and comity.” Enochs v. Lampasas Cnty., 641 F.3d 155, 159 (5th Cir. 2011). “In examining these grounds, the Court balances both its responsibility to manage complex litigation, requiring it to determine whether to exercise supplemental jurisdiction over pendent claims and parties and its discretion in evaluating whether an exercise of supplemental jurisdiction furthers the values of economy, convenience, fairness, and comity.” Jackson v. City of San Antonio, 220 F.R.D. 55, 59 (W.D. Tex. 2003) (cleaned up). Federal courts may exercise their supplemental jurisdiction over state-law claims that are pled concurrently with an FLSA collective action, but this is a matter of the district court's wide discretion, “not of plaintiff's right.” United Mine Workers v. Gibbs, 383 U.S. 715, 726 (1966). See also D'Onofrio, 888 F.3d at 206 (evaluating a district court's decision on whether to exercise supplemental jurisdiction over state-law claims under a highly deferential abuse-of-discretion standard); Mendoza v. Murphy, 532 F.3d 342, 346 (5th Cir. 2008) (same).

WellBoss asks me to decline to exercise supplemental jurisdiction over Plaintiffs' state-law claims because: (1) Plaintiffs' New Mexico state law claims raise a novel or complex issue of state law that should be adjudicated by the New Mexico state courts; (2) Plaintiffs' state law claims substantially predominate over the federal law claims that create the Court's original jurisdiction”; and (3) Plaintiffs' myriad and sundry patchwork of federal and state law claims has created exceptional circumstances under which there are other compelling reasons for declining supplemental jurisdiction.” Dkt. 83 at 3. I will address each argument separately.

A. Novel or Complex Issues of State Law

As noted, a district court has the discretion to dismiss a claim supported only by supplemental jurisdiction when the claim raises a novel or complex issue of state law. See 28 U.S.C. § 1367(c)(1). “In determining whether an issue of state law is novel or complex, district courts examine the difficulty of the state law issue and the amount of state decisional law interpreting the particular provisions.” Mendoza v. United States, 481 F.Supp.2d 643, 646-47 (W.D. Tex. 2006) (citing 13 CHARLES ALAN WRIGHT & ARTHUR R. MILLER, FEDERAL PRACTICE AND PROCEDURE § 3523.1 (2d ed. 2006)). These considerations serve to inform an inquiry into whether state-law claims “present . . . novel or especially unusual questions which cannot be readily and routinely resolved by the court.” Newport Ltd. v. Sears, Roebuck & Co., 941 F.2d 302, 308 (5th Cir. 1991).

WellBoss maintains that the proper statute of limitations for claims brought under the New Mexico Minimum Wage Act (“NMMWA”) is uncertain, thus qualifying as a novel or complex issue that should be left to the New Mexico state courts to decide. Plaintiffs summarily dismiss this argument, noting that a federal district court in New Mexico has squarely addressed this legal issue, holding that the New Mexico statute in dispute, N.M. Stat. 1978, § 50-4-32, provides for an unlimited statute of limitations. See Felps v. Mewbourne Oil Co., Inc., 336 F.R.D. 664, 680-81 (D.N.M. 2020). Although it is true that no New Mexico state court has opined on the proper limitations period for an NMMWA claim, the fact that a federal court in New Mexico (interpreting New Mexico law) has addressed the issue indicates to me that there is nothing particularly novel or complex that requires me to decline supplemental jurisdiction over the NMMWA claims.

WellBoss suggests that anytime an NMMWA claim is brought before a federal district court, that federal court should step aside and allow New Mexico state courts to handle any unresolved issues of New Mexico's statutory wage and hour law regime. That position is quite extreme and would result in federal courts-both in New Mexico and elsewhere-refusing to handle any case involving the NMMWA. I do not believe there is anything wrong with a federal judge located in Texas applying the NMMWA, and many other federal judges here in the Lone Star State seem to agree with me. See, e.g., Campos v. W&WEnergy Servs., Inc., No. MO:20-CV-102-DC-RCG, 2021 WL 8082317, at *4 (W.D. Tex. July 20, 2021) (holding that “there is no such novel or complex issues of state law that would compel the Court to decline to exercise supplemental jurisdiction over the NMMWA claims”); McLeland v. 1845 Oil Field Servs., 97 F.Supp.3d 855, 865 (W.D. Tex. 2015) (denying request to dismiss NMMWA claims in an FLSA case); Castillo v. Hernandez, No. EP-10CV-247-KC, 2011 WL 2489910, at *1 (W.D. Tex. June 17, 2011) (noting the district court was handling both FLSA and NMMWA claims).

The particular facts in this case highlight why it would be illogical for me to relinquish jurisdiction over the NMMWA claims. Plaintiffs' employment agreements include a venue provision that requires all employment-related claims to be heard by a court located in Houston, Harris County, Texas. As a result, if I decline jurisdiction over the NMMWA claims, Plaintiffs will be forced to file a claim for relief in Texas state court. As Plaintiffs observe:

There is no reason to believe that such state court is more qualified to interpret New Mexico wage claim law than this Court. There is also no reason to think that forcing a Harris County state district court to hear a New Mexico state claim for overtime (when this Court has the same operative facts before it) and forcing the Harris County state district court to rule on issues of New Mexico state law is in any way furthering the values of economy, convenience, fairness, and comity.

Dkt. 84 at 10-11 (quotation omitted). I wholeheartedly agree.

To summarize, I do not believe there is a novel or complex issue of state law that compels me to decline to exercise supplemental jurisdiction over the NMMWA claims brought by Plaintiffs.

B. Predominate State or Federal Claims

Section 1367(c)(2) authorizes a district court to decline supplemental jurisdiction over a state-law claim if “the claim substantially predominates over the claim or claims over which the district court has original jurisdiction.” 28...

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