2:24-cv-02646
E.D. Cal.Apr 8, 2025Background
- Plaintiff Eminent Consulting LLC, a Tennessee-based healthcare staffing company, sued RightSourcing Inc., a vendor contracting with NYC hospitals, alleging Defendant failed to pay agreed-upon rates for personnel.
- Plaintiff's complaint asserts breach of contract and related claims based on several written and negotiated agreements with Defendant regarding compensation for staffed personnel.
- Defendant filed a counterclaim for express contractual indemnity, alleging Plaintiff failed to indemnify it for $65,000 in settlements related to employment claims.
- Plaintiff moved to dismiss the counterclaim for lack of subject matter jurisdiction, arguing that neither diversity nor supplemental jurisdiction exists for the counterclaim.
- The motion is Plaintiff's first dispositive challenge in this case; Defendant has not previously amended its pleading.
- The Court ruled on the papers without oral argument and granted Defendant leave to amend its counterclaim.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Diversity Jurisdiction under § 1332 | There is no diversity jurisdiction; amount in controversy not met. | Complete diversity exists; damages are over $65,000 (and in excess of that). | No diversity jurisdiction; damages stated are insufficient to meet the $75,000 threshold. |
| Supplemental Jurisdiction under § 1367 | Counterclaim does not share a common nucleus of operative fact with complaint. | Claims are related and should be adjudicated together. | No supplemental jurisdiction; claims do not arise from same facts. |
| Dismissal of Counterclaim | Dismiss for lack of jurisdiction. | Court has jurisdiction under original or supplemental grounds. | Counterclaim dismissed for lack of subject matter jurisdiction. |
| Leave to Amend | (No opposition stated) | Should be granted opportunity to cure defects. | Leave to amend granted to plead proper jurisdictional basis. |
Key Cases Cited
- Kokkonen v. Guardian Life Ins. Co. of America, 511 U.S. 375 (Rule: Federal courts are courts of limited jurisdiction; party asserting jurisdiction bears burden)
- Arbaugh v. Y & H Corp., 546 U.S. 500 (Rule: Where subject-matter jurisdiction is lacking, the case must be dismissed in its entirety)
- Savage v. Glendale Union High Sch., 343 F.3d 1036 (Rule: Distinguishes between facial and factual attacks on jurisdiction under Rule 12(b)(1))
- Bahrampour v. Lampert, 356 F.3d 969 (Rule: Supplemental jurisdiction requires a common nucleus of operative fact)
- Foman v. Davis, 371 U.S. 178 (Rule: Leave to amend should be freely given unless futile or unfair)