Magistrate Judge Austin Explains which Affirmative Defenses and Counterclaims Are Appropriate in FLSA Cases and which Aren’t

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Cordero v. Voltaire, LLC, No. A-13-CV-253-LY, slip op. (W.D. Tex. Dec. 6, 2013)(Austin, M.J.)

In this Fair Labor Standards Act case, the issue was whether Voltaire had alleged viable counterclaims and affirmative defenses.  Voltaire’s counterclaim charged one employee committed fraud by submitting work statements for “falsified and inflated hours” and billing for time and expenses on personal projects.  Slip op. at 8.  Magistrate Judge Austin found that this was a compulsory counterclaim over which there supplemental jurisdiction under 28 U.S.C. § 1367(a).  Slip op. at 7-9.  But he concluded that Voltaire’s theft, conversion, breach of fiduciary duty, and conspiracy claims were permissive, and that there was no independent basis for federal jurisdiction; therefore, he recommended the dismissal of those claims under Rule 12(b)(1).  Slip op. at 10-13 (theft, conversion, and breach of fiduciary duty) and 16 (sua sponte reaching Voltaire’s conspiracy counterclaim).  Magistrate Judge also recommended that Voltaire’s unclean hands and estoppel defenses be stricken under Rule 12(f).  Slip op. at 18-20.  But he concluded that its offset defense (based on allegedly falsified or inflated hours) as well as good faith defense should stand.  Id. at 15-16.

Here’s What Happens When You Don’t Follow Through on What You Said at a Status Conference

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Aubrey v. Barlin, No. A-10-CV-076-SS, slip op. (W.D. Tex. Dec. 6, 2013)(Austin, M.J.)

In this order, Magistrate Judge Austin disposed of a series of discovery motions and other matters related to the plaintiffs’ filing of an amended complaint after a status conference at which they reported to Judge Sparks that little discovery remained to be done before trial.  Slip op. at 1-3.  The amended complaint added additional parties, precipitating disputes over the discovery directed at the new parties and new claims.  Id. at 3.  Noting that he had earlier recommended the amended complaint be stricken, Magistrate Judge Austin attempted to cabin discovery to the limitations agreed to before Judge Sparks at the status conference (the particulars involved denying the plaintiffs’ motion to compel, quashing a batch of plaintiff-issued subpoenas, granting a protective order, and assessing costs and fees against the plaintiffs).  Id. at 3-5.

Judge Rodriguez Remands a Slip-and-Fall Case

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Barreras v. Wal-Mart Stores, Inc., No. SA-13-CV-960-XR, slip op. (W.D. Tex. Dec. 6, 2013)(Rodriguez, J.)

The issue here was whether Wal-Mart had properly removed this slip-and-fall case on the basis of diversity jurisdiction.  She argued that there was no diversity of citizenship because Wal-Mart’s counsel had asserted the “correct entity for this lawsuit was Wal-Mart Stores Texas L.L.C.”  Slip op. at 2.  The District Court rejected this contention because the Texas entity had not been substituted and the named defendant was a resident of Delaware and Arkansas for diversity purposes.  Id. at 2-3.  The District Court found, however, that Wal-Mart had failed to demonstrate the requisite $75,000 amount in controversy.  The removal papers merely recited that the required amount was at issue.  On the other hand, Barreras had invoked the expedited Texas procedures for cases under $100,000 in her petition and there was no evidence on the severity of the accident.  The District Court noted that Barreras had refused to stipulate that her damages were below the $75,000 removal threshold, but it gave no that fact little or no weight.  Id. at 3-5.