78 F. Supp. 3d 997
N.D. Cal.2015Background
- Plaintiff Yan sued General Pot, Inc. and Wang for purported FLSA and California wage claims.
- General Pot is a Fremont, California restaurant; Wang is owner and sole shareholder.
- Yan served the complaint on General Pot; default was entered against General Pot on Sept. 23, 2014 and against Wang on Nov. 20, 2014.
- Yan moved for default judgment; Defendants moved to set aside default and to dismiss for lack of jurisdiction.
- Court granted Defendants’ motion to dismiss for lack of FLSA jurisdiction (no enterprise or individual coverage).
- Court also granted Defendants’ motion to set aside default and dismissed the case without prejudice to state-law claims in state court.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether FLSA claims are subject to federal jurisdiction | Yan argues FLSA jurisdiction exists due to interstate commerce involvement. | General Pot lacked enterprise or individual coverage; no interstate commerce effect. | No federal subject-matter jurisdiction; FLSA claims must be dismissed. |
| Whether the default should be set aside | Yan contends default should stand absent excusable neglect. | Wang lacked culpable conduct; he acted in good faith with limited English and no malice. | Default set aside; case dismissed without prejudice to state court claims. |
| Whether the state-law claims can be adjudicated in federal court | Yan asserts supplemental jurisdiction over related state claims. | Without federal subject-matter jurisdiction, there is no supplemental jurisdiction. | No supplemental jurisdiction; state claims dismissed in light of lack of jurisdiction. |
Key Cases Cited
- Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375 (U.S. 1994) (jurisdictional limits and dismissal authority)
- Safe Air for Everyone v. Meyer, 373 F.3d 1035 (9th Cir. 2004) (facial vs. factual challenges to jurisdiction)
- Warth v. Seldin, 422 U.S. 490 (U.S. 1975) (standing and jurisdictional sufficiency principles)
- McCarthy v. United States, 850 F.2d 558 (9th Cir. 1988) (jurisdictional evidence can be considered)
- Chandler v. State Farm Mut. Auto. Ins. Co., 598 F.3d 1115 (9th Cir. 2010) (burden on proponent of jurisdiction after Rule 12(b)(1))
- Nowak v. Ironworkers Local 6 Pension Fund, 81 F.3d 1182 (2d Cir. 1996) (supplemental jurisdiction limitations when no original federal jurisdiction)
- United States v. One 1990 GEO Storm, 106 F.3d 410 (9th Cir. 1997) (void judgment when court lacked jurisdiction)
- Bateman v. U.S. Postal Serv., 231 F.3d 1220 (9th Cir. 2000) (prejudice to plaintiff in default-relief analysis)