United States District Court, D. Maryland
STEPHANIE A. GALLAGHER, UNITED STATES MAGISTRATE JUDGE.
before this Court is Plaintiff/Counter-Defendant Matt
Carroll's (“Carroll”) Motion to Dismiss the
Counterclaims Filed by Defendant/Counter-Plaintiff Dan
Rainville & Associates, Inc. (“DRA”), [ECF
No. 33]. I have reviewed DRA's Opposition, [ECF No. 34],
and Carroll's Reply. [ECF No. 36]. No oral argument is
necessary. See Local Rule 105.6 (D. Md. 2016). For the
reasons set forth below, Carroll's motion will be
March 29, 2017, Carroll filed suit against his former
employer, DRA, alleging violations of the Federal Fair Labor
Standards Act (“FLSA”), the Maryland Wage and
Hour Law, and the Maryland Wage Payment and Collection Law.
[ECF No. 1, 1]. DRA engages in the “business of selling
and installing commercial HVAC and ventilation units.”
Id. at 2. From January, 2016 through August, 2016,
Carroll “worked as both an estimator and perform[ed]
inside sales jobs for which he was paid hourly, ” in
addition to earning a 20% commission on sales. Id.
at 3. In this lawsuit, Carroll seeks to recover allegedly
unpaid overtime wages and commissions from his inside sales
job. [ECF No. 33, 3].
12, 2017, DRA filed an Amended Counterclaim asserting the
following claims under Maryland law: (1) Breach of Contract -
Return of Unearned Draws; (2) Breach of Contract -
Noncompetition and Non-solicitation Agreement; (3) Breach of
Contract - Use of Confidential Information; (4) Violation of
Maryland Trade Secrets Act; (5) Intentional Interference with
Business Relations; (6) Detinue; and (7) Civil Conspiracy.
[ECF No. 19]. Carroll has moved to dismiss all seven
counterclaims under F.R.C.P. 12(b)(1), citing this
Court's lack of subject-matter jurisdiction. [ECF No.
STANDARD OF REVIEW
courts are not courts of general jurisdiction; they have only
the power that is authorized by Article III of the
Constitution and the statutes enacted by Congress pursuant
thereto.” Bender v. Williamsport Area Sch.
Dist., 475 U.S. 534, 541 (1986). “Subject-matter
jurisdiction cannot be conferred by the parties, nor can a
defect in subject-matter jurisdiction be waived by the
parties.” Brickwood Contractors, Inc. v. Datanet
Eng'g, Inc., 369 F.3d 385, 390 (4th Cir. 2004)
(citing United States v. Cotton, 535 U.S. 625, 630
(2002)). Thus, “questions of subject-matter
jurisdiction may be raised at any point during the
proceedings and may (or, more precisely, must) be raised
sua sponte by the court.” Id. (citing
Bender, 475 U.S. at 541).
Federal Rule of Civil Procedure 12(b)(1), a motion to dismiss
for lack of “subject matter jurisdiction can be
presented in either of two forms: (1) a facial challenge that
plaintiff has failed to allege facts sufficient to establish
subject matter jurisdiction, ” or (2) a contention that
“the jurisdictional allegations of the complaint are
not true.” Nicholson v. United States, 2017 WL
2793800, at *1 (E.D. Va. May 30, 2017); Adams v.
Bain, 697 F.2d 1213, 1219 (4th Cir. 1982). While the
plaintiff bears the burden of proving that a court has
jurisdiction over the claim or controversy at issue, a Rule
12(b)(1) motion should be granted “only if the material
jurisdictional facts are not in dispute and the moving party
is entitled to prevail as a matter of law.”
Ferdinand-Davenport v. Children's Guild, 742
F.Supp.2d 772, 777 (D. Md. 2010); see also Evans v. B.F.
Perkins Co., a Div. of Standex Int'l Corp., 166 F.3d
642, 647 (4th Cir. 1999).
to the Judicial Improvement Act of 1990, federal courts
“‘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 under Article III of the United States
Constitution.'” Shanaghan v. Cahill, 58
F.3d 106, 109 (4th Cir. 1995) (quoting 28 U.S.C. §
1367(a)). To form part of the same case or controversy as the
federal claim(s), the state claim(s) must
“‘derive from a common nucleus of operative
fact[, ] . . . such that [a plaintiff] would ordinarily be
expected to try them all in one judicial
proceeding.'” Hinson v. Norwest Fin. S.C.,
Inc., 239 F.3d 611, 615 (4th Cir. 2001) (quoting
Carnegie-Mellon University v. Cohill, 484 U.S. 343,
349 (1988)). Thus, where a federal court has original federal
question or diversity jurisdiction over a claim, parties may
“append state law claims over which federal courts
would otherwise lack jurisdiction, ” provided they
derive from a common nucleus of operative fact.
Cahill, 58 F.3d at 109.
is no dispute that compulsory counterclaims are, by
definition, within the supplemental jurisdiction of the
court.” Long v. Welch & Rushe, Inc., 28
F.Supp.3d 446, 452 (D. Md. 2014) (citing Painter v.
Harvey, 863 F.2d 329, 331 (4th Cir. 1988)). A compulsory
counterclaim “arises out of the transaction or
occurrence that is the subject matter of the opposing
party's claim, ” while a permissive claim does not.
Id. (quoting Fed.R.Civ.P. 13(a)). To determine
whether a counterclaim is compulsory, courts look to: (1)
whether “the issues of fact and law raised in the claim
and counterclaim [are] largely the same[;]” (2) whether
“res judicata [would] bar a subsequent suit on the
party's counterclaim, absent the compulsory counterclaim
rule[;]” (3) whether “substantially the same
evidence support[s] or refute[s] the claim as well as the
counterclaim[;]” and (4) whether “there [is] any
logical relationship between the claim and
counterclaim[.]” Painter, 863 F.2d at 331
(citing Sue & Sam Mfg. Co. v. B-L-S Const. Co.,
538 F.2d 1048 (4th Cir. 1976)). Contrary to a compulsory
counterclaim, a permissive counterclaim must have an
independent jurisdictional base such as federal question or
diversity jurisdiction. See Sue, 538 F.2d 1048, 1051
(4th Cir. 1976).
Carroll Did Not Waive the Defense that the Court Lacks
Subject-Matter Jurisdiction Over DRA's
asserts Carroll waived his defense that this Court lacks
subject-matter jurisdiction over its counterclaims, because
Carroll omitted the argument from his previously filed motion
to dismiss under F.R.C.P. 12(b)(6), [ECF No. 13], and Answer,
[ECF No. 21]. [ECF No. 34, 3]. DRA is incorrect.
Rule 12(b) provides seven affirmative defenses to a claim for
relief, including the defense that the Court lacks
subject-matter jurisdiction. Fed.R.Civ.P. 12(b). While
subsections (g) and (h) of Rule 12 provide that some defenses
will be waived if they are omitted from a party's first
Rule 12 motion or responsive pleading, subject-matter
jurisdiction is specifically exempted. Fed.R.Civ.P. 12(h).
Moreover, Rule 12(h)(3) expressly states that “[i]f the
court determines at any time that it lacks
subject-matter jurisdiction, [it] must dismiss the
action.” Id. It is thus axiomatic that