The U.S. Court of Appeals for the Second Circuit reversed and remanded a ruling by retiring U.S. District Judge Katherine Forrest to dismiss a years-long wage case on the eve of trial, finding she made significant errors.
The panel of Circuit Judges Barrington Parker, Peter Hall and Raymond Lohier Jr. leveled a three-tier critique at Forrest’s decision, which was made after the low-wage worker plaintiffs stated in a footnote of a pretrial filing that they intended to pursue only state labor law claims in the upcoming trial against a number of laundromats that employed them.
Even though the plaintiffs said the decision was driven by clarifying Second Circuit law, Forrest sua sponte declined to exercise supplemental jurisdiction over their state‐law claims after stating they’d abandoned their federal claims, and dismissed the case without giving the parties notice or providing an opportunity for them to be heard. As part of her reasoning, Forrest determined the plaintiffs were forum-shopping in an attempt to manufacture federal jurisdiction.
Forrest erred by acting sua sponte without allowing the parties to be heard. Such a situation should be seen as a deviation from the general practice, the panel said. Forrest’s case did not present that rare instance, the panel found.
The court, in fact, possessed supplemental jurisdiction. It was the discretionary inquiry the panel took issue with, as “district courts must still conduct the inquiry and carefully evaluate the relevant factors.” Hearing from the parties in some form is “typically an essential component of the inquiry,” the panel stated.
Additionally, the panel found Forrest’s observation about forum-shopping to be unsubstantiated. The two-year-old case involved significant discovery, dispositive motions, and a class certification process. As the panel noted, 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 panel stated.
Finally, the court did not properly conduct its inquiry under the supplemental jurisdiction portion of the federal code. Given the record, the panel said it had significant doubt as to Forrest’s view on the factors. Her decision was made a week before a trial tackling “quotidian” wage-and-hour issues that was going to last all of three days, and presented nothing that a state court would have been particularly better suited to handle, the panel stated.
“The district court did not explain how 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,” the panel wrote. “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.”
The three plaintiffs in the case were represented on appeal by Fisher Taubenfeld name attorney Michael Taubenfeld. He did not respond to a request for comment on the decision.
The varied defendants were represented by two sets of counsel, private attorneys Mark Kook and Oleg Mestechkin. Neither responded to a request for comment.