17‐2497‐cv Lucia Lopez Catzin v. Thank You & Good Luck Corp.

In the United States Court of Appeals For the Second Circuit

August Term 2017

No. 17‐2497‐cv

LUCIA LOPEZ CATZIN, individually and on behalf of others similarly situated, SILVIA VILLANO CLEMENTE, and YADIRA AGUILAR‐CANO,

Plaintiffs‐Appellants,

v.

THANK YOU & GOOD LUCK CORP. and ZENG LAN WANG,

Defendants‐Cross‐ Defendants‐Appellees,

IGOR BIRZH, EXCLUSIVE MANAGEMENT SOLUTION GROUP, INC., DIMITRI BEREZOVSKY, and 115th STREET AND FIRST AVE LAUNDROMAT INC.,

Defendants‐Appellees,

OFF‐BROADWAY LAUNDROMAT INC. and 2167 3rd AVE LAUNDROMAT LLC,

Defendants‐Cross‐ Claimants‐Appellees.

1 17‐2497‐cv Lucia Lopez Catzin v. Thank You & Good Luck Corp.

Appeal from the United States District Court for the Southern District of New York No. 15 Civ. 7109 (KBF), Katherine B. Forrest, District Judge, Presiding. (Argued: February 14, 2018; Decided: August 8, 2018)

Before: PARKER, HALL, and LOHIER, Circuit Judges.

Plaintiffs, several laundromat workers, brought this action against their employers under the Fair Labor Standards Act, 29 U.S.C. ' 201, et seq. and the New York Labor Law, ' 190 et seq., alleging that their employers failed to pay plaintiffs the minimum wage, overtime, and violated other requirements of the wage‐and‐hour laws. After discovery and resolution of the parties= cross motions for summary judgment, the case was proceeding to trial on various federal‐law and state‐law claims. The day before the final pretrial conference and one week prior to the first day of trial, the District Court (Forrest, J.) sua sponte, and without notice to the parties or any opportunity to be heard, issued an order revoking its exercise of supplemental jurisdiction, vacating the trial, and dismissing the case. We conclude the District Court erred in refusing to exercise supplemental jurisdiction under the circumstances.

VACATED AND REMANDED.

Michael Taubenfeld, Fisher Taubenfeld LLP, New York, N.Y., for appellants Lucia Lopez Catzin, Silvia Villano Clemente, and Yadira Aguilar‐Cano.

Mark R. Kook, Law Office of Mark R. Kook, New York, N.Y., for appellees Igor Birzh, Exclusive Management Solution Group, Inc., and Dimitri Berezovsky.

2 17‐2497‐cv Lucia Lopez Catzin v. Thank You & Good Luck Corp.

Oleg A. Mestechkin (Wing K. Chieu, on the brief), Mestechkin Law Group P.C., New York, N.Y., for appellees Off‐Broadway Laundromat, Inc., 2167 3rd Ave Laundromat LLC, and 115th Street and First Ave Laundromat Inc.

BARRINGTON D. PARKER, Circuit Judge:

This appeal from an order of the United States District Court for the

Southern District of New York (Forrest, J.) requires us to decide whether the

District Court properly sua sponte declined to exercise supplemental jurisdiction

over plaintiffs= state‐law claims and dismissed the case without affording the

parties notice or an opportunity to be heard.

Plaintiffs, several low‐wage laundromat workers, sued their employers

under the Fair Labor Standards Act (AFLSA@), 29 U.S.C. ' 201 et seq., and the New

York Labor Law (ANYLL@), ' 190 et seq., alleging that their employers failed to pay

plaintiffs the minimum wage, overtime, and failed to provide various required

wage notices and statements.

The case was litigated for nearly two years, through discovery and

summary judgment. The parties= cross motions for partial summary judgment

were granted in part and denied in part, ultimately leaving various FLSA and

3 17‐2497‐cv Lucia Lopez Catzin v. Thank You & Good Luck Corp.

NYLL claims to be resolved at trial. Three weeks prior to the start of trial and

two weeks prior to the final pretrial conference, the parties filed their required

pretrial submissions, which omitted mention of the FLSA and focused on the

alleged NYLL violations. Shortly before the final pretrial conference, plaintiffs

filed a letter that noted, among other things, that they intended to pursue only

their NYLL claims at trial because they had concluded, on the basis of an

intervening clarification in Second Circuit law, that any potential recovery under

the FLSA would be subsumed by the recovery available under the NYLL.

For reasons that are inadequately supported by the record, the District

Court concluded that plaintiffs= inclusion of the FLSA claims had all along been

disingenuous and was a stratagem to manufacture federal jurisdiction. Acting

on this assumption, the day before the final pretrial conference, and without

affording the parties notice or an opportunity to be heard, the District Court sua

sponte issued an order that deemed plaintiffs to have abandoned their federal‐law

claims. The District Court cancelled the pretrial conference and the trial

scheduled to start the following week. The District Court then declined to

exercise supplemental jurisdiction over plaintiffs= state‐law claims and dismissed

them without prejudice, leaving the parties to start from the beginning in state

4 17‐2497‐cv Lucia Lopez Catzin v. Thank You & Good Luck Corp.

court, and ordered the case closed. Plaintiffs appeal and we vacate and remand

for further proceedings.

BACKGROUND

The procedural history of this case is important for understanding the

sequence of events that precipitated the District Court=s order. In September

2015, plaintiffs filed their original complaint, bringing claims under the FLSA and

NYLL. Plaintiffs later amended their complaint and, in June 2016, filed the

operative complaint, the Third Amended Complaint (ATAC@). The TAC

alleged seven claims against varying groups of defendants: (1) failure to pay

minimum wages in violation of the FLSA, 29 U.S.C. ' 206; (2) failure to pay

overtime wages in violation of the FLSA, 29 U.S.C. ' 207; (3) failure to pay

minimum wages in violation of NYLL ' 652; (4) failure to pay overtime wages in

violation of the NYLL, see 12 N.Y.C.R.R. ' 142‐2.2 (incorporating the FLSA

overtime definition into the NYLL); (5) failure to provide required wage notices

and wage statements in violation of NYLL ' 195; (6) failure to pay

spread‐of‐hours payments in violation of the NYLL, see 12 N.Y.C.R.R. ' 142‐2.4;

and (7) failure to properly calculate wage deductions in violation of NYLL ' 193.

As to each claim, plaintiffs alleged that defendants= violations were Awillful@

5 17‐2497‐cv Lucia Lopez Catzin v. Thank You & Good Luck Corp.

under ' 255(a) of the FLSA, and ' 198 of the NYLL. As damages, plaintiffs

sought unpaid wages, prejudgment interest, liquidated damages, and attorneys=

fees and costs.

According to the TAC and the various declarations submitted in support of

the motions for summary judgment, plaintiffs worked at laundromats in New

York City owned by various defendants. Plaintiffs= duties included loading and

unloading laundry machines and dryers, washing, drying, and folding clothes,

and occasionally working as cashiers. Plaintiffs alleged that defendants

systematically underpaid them for a number of years. The three plaintiffs are

seeking approximately $13,000 in unpaid wages and other relief available under

the wage‐and‐hour laws.

Discovery included a number of depositions (at least eight), and the

production of documentary evidence, such as pay stubs, pay logs, work

schedules, operating agreements, and tax returns. In January 2016, the District

Court conditionally certified the case as an FLSA collective action under 29 U.S.C.

6 17‐2497‐cv Lucia Lopez Catzin v. Thank You & Good Luck Corp.

' 216(b). In October 2016, the District Court denied plaintiffs= motion to certify

the case as a class action under Federal Rule of Civil Procedure 23(b)(3).1

Following discovery, plaintiffs and two subsets of defendants filed cross

motions for partial summary judgment. The District Court granted these

motions in part and denied them in part. The District Court granted summary

judgment to plaintiffs on the issue of whether the conduct of certain defendants

was willful, entitling them to liquidated damages under the FLSA and NYLL (if

they later proved their underlying wage‐and‐hour claims). The District Court

also granted summary judgment to plaintiffs on whether one of the defendants

was an individual employer under the FLSA and NYLL and on plaintiffs= claim

of wage notice and statement violations under NYLL '' 195(1) and 195(3). The

District Court granted summary judgment to defendants Thank You & Good

Luck Corp., Zeng Lan Wang, 115th Street and First Avenue Laundromat Inc.,

Exclusive Management Solution Group, Inc., and Dimitri Berezovsky on

plaintiffs= FLSA claims on the ground that those defendants were not covered by

the FLSA or could not be liable under a theory of successor liability. Finally, the

District Court determined that it would maintain supplemental jurisdiction over

Plaintiffs sought to appeal the denial of their motion for class certification under 1

Rule 23(f). In February 2017, this Court denied leave to appeal.

7 17‐2497‐cv Lucia Lopez Catzin v. Thank You & Good Luck Corp.

plaintiffs= NYLL claims over those defendants. The District Court otherwise

denied the parties= summary judgment motions.

After considerable back and forth over scheduling, the District Court set

August 2, 2017, as the trial date, with pretrial materials due July 13, motions in

limine due July 14, and oppositions due July 21. A final pretrial conference was

set for July 27, 2017, roughly one week before the first day of trial.

On July 14, the parties filed their pretrial submissions, which included a

joint final pretrial order, proposed jury instructions, a proposed verdict form, and

proposed voir dire questions. The parties anticipated a short three‐day trial

with around 11 witnesses and various documents. The parties= proposed jury

instructions did not include any mention of the FLSA and instead focused on

liability under the NYLL claims, except for several references to model jury

instructions for FLSA liability, when presumably liability under the FLSA is

coextensive with liability under the NYLL. The proposed jury instructions

section for AHours Worked Definition@ also contained references to two

provisions of the Code of Federal Regulations regarding rest breaks and meal

breaks, 29 C.F.R. '' 785.18B19. The proposed verdict form contained no

8 17‐2497‐cv Lucia Lopez Catzin v. Thank You & Good Luck Corp.

references to the FLSA and was instead limited to liability and various findings

under the NYLL.

The parties also filed motions in limine. On July 22, plaintiffs filed an

opposition to defendants= motion in limine, in which they recounted the

procedural history of the case, noting that they filed the lawsuit asserting

violations of the FLSA and NYLL. But, in a footnote, plaintiffs stated, APlaintiffs

intend to pursue at trial only their NYLL claims since the NYLL provides all

relief that the FLSA provides.@

On July 26, the day before the final pretrial conference and one week before

the start of the trial, the District Court, without affording the parties notice or an

opportunity to be heard, issued the order that is the subject of this appeal. In

that order, the District Court described the parties= pretrial filings and observed

that those filings Afocus solely on the New York Labor Law.@ Catzin v. Thank You

& Good Luck Corp., No. 15 Civ. 7109 (KBF),

, at *1 (S.D.N.Y. July

26, 2017). Noting that plaintiffs had stated that they Aintend to pursue at trial

only their NYLL claims,@ the District Court concluded that Aplaintiffs have

expressly abandoned and waived their claims under the Fair Labor Standards

Act,@ which were their only federal‐law claims.

9 17‐2497‐cv Lucia Lopez Catzin v. Thank You & Good Luck Corp.

The District Court went on to address the factors district courts must

evaluate when determining whether to continue to maintain supplemental

jurisdiction when one of the four prongs of 28 U.S.C. ' 1367(c) is applicable.

These are the familiar factors of judicial economy, convenience, fairness, and

comity. See Carnegie‐Mellon Univ. v. Cohill,

(1988). Noting the

usual rule that when Aall federal‐law claims are eliminated before trial, the

balance of factors to be considered . . . will point toward declining to exercise

jurisdiction over the remaining state‐law claims,@

at 350 n.7, the District Court

concluded that fairness and comity weighed strongly against exercising

supplemental jurisdiction but that there was Asome judicial economy to be gained

by the exercise of supplemental jurisdiction@ because Ait is now the eve of trial.@

Catzin,

, at *2. In the end, however, the District Court

concluded that while plaintiffs= Amotives are not entirely clear, it appears to the

Court that plaintiffs may have strategically asserted FLSA claims for the purpose

of manufacturing jurisdiction, when they truly intended to litigate only claims

under the New York Labor Law.@

The District Court concluded that the

exercise of supplemental jurisdiction would therefore Aimproperly reward

plaintiffs= actions and encourage similar behavior in the future.@

The

10 17‐2497‐cv Lucia Lopez Catzin v. Thank You & Good Luck Corp.

District Court accordingly dismissed plaintiffs= NYLL claims, leaving them to be

refiled in state court, cancelled the final pretrial conference and the trial, and

closed the case. This appeal followed. We review a district court=s

determination of whether to exercise supplemental jurisdiction for abuse of

discretion. Shahriar v. Smith & Wollensky Rest. Grp., Inc.,

(2d

Cir. 2011).

DISCUSSION

We conclude that by failing to exercise supplemental jurisdiction under the

circumstances of this case, the District Court committed three interrelated errors.

First, it acted sua sponte without affording the parties notice and an opportunity

to be heard. Second, it impugned, on the record, plaintiffs= counsel=s motives

without affording any notice about this assessment of counsel=s conduct or any

opportunity to explain himself. Finally, the District Court=s analysis of the

factors considered under 28 U.S.C. ' 1367(c) for determining whether to exercise

supplemental jurisdiction was inadequate.

First, as noted, the District Court undertook the supplemental

jurisdiction inquiry sua sponte and dismissed the case without affording the

parties notice or any opportunity to be heard. An opportunity to be heard prior

11 17‐2497‐cv Lucia Lopez Catzin v. Thank You & Good Luck Corp.

to dismissing a case is not a mere formality and the reasons are straightforward:

ANo principle is more fundamental to our system of judicial administration than

that a person is entitled to notice before adverse judicial action is taken against

him.@ Lugo v. Keane,

(2d Cir. 1994) (per curiam). This is because

Aproviding the adversely affected party with notice and an opportunity to be

heard plays an important role in establishing the fairness and reliability of@ the

court=s decision and Aavoids the risk that the court may overlook valid answers to

its perception of defects in the plaintiff=s case.@ Snider v. Melindez,

(2d Cir. 1999). Sua sponte dismissals without notice and an opportunity to be

heard Adeviate from the traditions of the adversarial system@ and Atend to

produce the very effect they seek to avoidCa waste of judicial resourcesCby

leading to appeals and remands.@ Perez v. Ortiz,

(2d Cir. 1988).

We have held that dismissing a case without an opportunity to be heard is,

at a minimum, bad practice in numerous contexts and is reversible error in

others. For example, generally in the context of a dismissal for failure to state a

claim, A[t]he district court has no authority to dismiss a complaint for failure to

state a claim upon which relief can be granted without giving the plaintiff an

opportunity to be heard.@ Square D Co. v. Niagara Frontier Tariff Bureau, Inc., 760

12 17‐2497‐cv Lucia Lopez Catzin v. Thank You & Good Luck Corp.

F.2d 1347, 1365 (2d Cir. 1985) (Friendly, J.). While in certain circumstances a sua

sponte dismissal Amay be appropriate,@ such as Ain cases involving frivolous in

forma pauperis complaints or frivolous habeas petitions,@ Perez,

(citations omitted), these circumstances require that Ait is unmistakably clear that

the court lacks jurisdiction, or that the complaint lacks merit or is otherwise

defective,@ Snider,

. This principle also applies in the context of

sua sponte dismissals without notice for lack of subject matter jurisdiction. See

Digitel, Inc. v. MCI Worldcom, Inc.,

, 189 n.2 & 190 (2d Cir. 2001) (per

curiam) (construing the district court=s order Aas one deciding . . . sua sponte [a]

Rule 12(b)(1) motion to dismiss for lack of subject matter jurisdiction@ and stating

that Asuch lack of noticeCeven when the court has authority to act sua sponteCis

to be avoided@ but affirming the district court=s order on its merits). In general, a

district court=s failure to provide an opportunity to be heard prior to a sua sponte

dismissal, as Judge Friendly noted, Ais, by itself, grounds for reversal.@ Square D,

760 F.2d at 1365 (quoting Lewis v. New York,

, 5‐6 & n.4 (2d Cir. 1976)).

This was not a case in which Ait is unmistakably clear that the court lacks

jurisdiction.@ Snider,

. To the contrary, it is indisputable that the

District Court possessed supplemental jurisdiction. The District Court only

13 17‐2497‐cv Lucia Lopez Catzin v. Thank You & Good Luck Corp.

faced the discretionary inquiry of whether to discontinue that jurisdiction. See

28 U.S.C. ' 1367(c) (providing that the district court Amay decline to exercise

supplemental jurisdiction@ if one of four circumstances applies (emphasis

added)). Here, the District Court identified ' 1367(c)(3), which is when Athe

district court has dismissed all claims over which it has original jurisdiction,@ as

the applicable prong of ' 1367(c) that could provide an occasion to consider

whether to decline to exercise supplemental jurisdiction. Under this prong, in a

great many cases, the evaluation will usually result in the dismissal of the

state‐law claims. See Cohill,

n.7. But, because there will be cases

where dismissal will not be appropriate simply by virtue of the fact that the

federal‐law claims have been eliminated prior to trial, district courts must still

conduct the inquiry and carefully evaluate the relevant factors. Indeed, we have

upheld the exercise of supplemental jurisdiction even when all federal‐law claims

were eliminated prior to trial, for example, in long‐pending cases presenting no

novel issues of state law where Adiscovery had been completed, dispositive

motions had been submitted, and the case would soon be ready for trial.@

Kroshnyi v. U.S. Pack Courier Servs., Inc.,

(2d Cir. 2014) (citing

14 17‐2497‐cv Lucia Lopez Catzin v. Thank You & Good Luck Corp.

Raucci v. Town of Rotterdam,

(2d Cir. 1990)); see, e.g., Valencia ex

rel. Franco v. Lee,

, 305B06 (2d Cir. 2003) (collecting cases).

Hearing from the parties either in person or on the papers is typically an

essential component of the inquiry into whether to decline to exercise

supplemental jurisdiction because, as this case illustrates, doing so goes a long

way towards reasoned decisionmaking and enhances the fairness of the

proceedings. At the time this action was commenced in the District Court in

2015 there was uncertainty as to whether multiple sets of liquidated damages

could be obtained under both the FLSA and the NYLL for the same conduct.

But, in December 2016, we noted in a summary order that the NYLL and FLSA

liquidated damages provisions are materially identical and can provide only one

overlapping award of liquidated damages for the same conduct. See Chowdhury

v. Hamza Express Food Corp., 666 F. App=x 59, 61 (2d Cir. 2016) (summary order).

This conclusion was later adopted as the law of the Circuit in an opinion. See

Rana v. Islam,

(2d Cir. 2018) (per curiam) (AWe therefore

interpret the NYLL and FLSA as not allowing duplicative liquidated damages for

the same course of conduct.@).

15 17‐2497‐cv Lucia Lopez Catzin v. Thank You & Good Luck Corp.

Had the District Court heard from the parties, light might have been shed

on whether this clarification in the law had impacted the case. The plaintiffs

could have explained whether they were trying to streamline the issues for the

jury by not having to prove FLSA elements not required for NYLL liability, under

which all their recovery could be obtained; whether they intended to abandon

their FLSA claims; and whether they would continue to do so if the result would

be an 11th‐hour dismissal of the case. Insofar as the District Court based its

determination on its assessment that plaintiffs were forum shopping and never

actually intended to litigate their FLSA claims, giving plaintiffs an opportunity to

be heard on this view might have enabled them to explain why they brought

FLSA claims and litigated those claims for nearly two years, through discovery,

and through summary judgment. Such an opportunity to be heard would have

increased the fairness of the proceedings and minimized the risk that the court

may have overlooked valid answers to its concerns. See Snider,

.

We note that an opportunity to be heard on whether to exercise

supplemental jurisdiction may be inherent in the course of pre‐trial proceedings

such as those resolving motions to dismiss or for summary judgment. In such

situations, a district court need not provide a separate opportunity to be heard

16 17‐2497‐cv Lucia Lopez Catzin v. Thank You & Good Luck Corp.

beyond the briefing and resolution of such motions. But, insofar as a district

court undertakes, sua sponte, the inquiry into whether to maintain supplemental

jurisdiction under circumstances similar to those presented here, it must give the

parties notice and an opportunity to be heard prior.

Second, the District Court=s error in declining to retain supplemental

jurisdiction was exacerbated by its belief that plaintiffs were forum shopping and

had brought their FLSA claims in order to manufacture federal jurisdiction. The

problem with this explanation is that it is unsupported by the record and appears

at odds with the course of the litigation. As noted, the caseCincluding the

federal‐law claimsCwas vigorously litigated for years and involved significant

discovery, dispositive motions, and a class certification motion that the plaintiffs

attempted to appeal to the Second Circuit. 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 District Court itself noted the tenuousness of its conclusion, stating that,

while plaintiffs= motives Aare not entirely clear,@ it nonetheless Aappears@ that

plaintiffs Amay@ have strategically brought their FLSA claims Afor the purpose of

manufacturing jurisdiction, when they truly intended to litigate only claims

17 17‐2497‐cv Lucia Lopez Catzin v. Thank You & Good Luck Corp.

under the New York Labor Law.@ Catzin,

, at *2. The District

Court went on to acknowledge Athat it is now the eve of trial and there is some

judicial economy to be gained by the exercise of supplemental jurisdiction.

However, the Court believes that doing so would improperly reward plaintiffs=

actions and encourage similar behavior in the future.@

The District Court

cited nothing in the recordCother than the purported recent withdrawal of the

FLSA claimsCand made no adequate findings to support this determination.

We do not think the District Court should have reached such conclusions about

plaintiffs= motives while simultaneously acknowledging that those motives were

Anot entirely clear.@ The District Court suggested that plaintiffs= counsel had

Astrategically@ asserted FLSA claims in order to Amanufactur[e] jurisdiction@ and

saw dismissal of the case as a form of sanction so that the court would not

Aimproperly reward plaintiffs= actions and encourage similar behavior in the

future.@

This reasoning comes perilously close to charging plaintiffs=

counsel with unethical behavior, something a court should never do except with

the support of a careful inquiry, thorough analysis, and thoughtfully expressed

findings.

18 17‐2497‐cv Lucia Lopez Catzin v. Thank You & Good Luck Corp.

Third, we are not convinced that the District Court properly conducted the

inquiry into whether to continue to exercise supplemental jurisdiction under 28

U.S.C. ' 1367. As we have stated, that provision requires that Aonce it is

determined that a supplemental claim is related to the claim within the court=s

original jurisdiction such that they form the same case or controversy,

supplemental jurisdiction over the related claim is mandatory.@ Itar‐Tass Russian

News Agency v. Russian Kurier, Inc.,

(2d Cir. 1998). In order for

a district court to decline to exercise supplemental jurisdiction, Awhere section

1367(a) is satisfied, the discretion to decline supplemental jurisdiction is available

only if founded upon an enumerated category of subsection 1367(c).@ Shahriar,

.

Section 1367(c) provides that A[t]he district courts may decline to exercise

supplemental jurisdiction over a claim under [' 1367(a)] ifC

(1) the claim raises a novel or complex issue of State law, (2) the claim substantially predominates over the claim or claims over which the district court has original jurisdiction, (3) the district court has dismissed all claims over which it has original jurisdiction, or (4) in exceptional circumstances, there are other compelling reasons for declining jurisdiction.@

19 17‐2497‐cv Lucia Lopez Catzin v. Thank You & Good Luck Corp.

28 U.S.C. ' 1367(c). If one of the ' 1367(c) categories applies, the district court

may then undertake the discretionary inquiry of whether to exercise

supplemental jurisdiction. If one of those categories applies, Aa district court

should not decline to exercise supplemental jurisdiction unless it also determines

that doing so would not promote the values articulated in Gibbs: economy,

convenience, fairness, and comity.@ Jones v. Ford Motor Credit Co.,

(2d Cir. 2004) (citing United Mine Workers of America v. Gibbs,

(1966)); see also Kolari v. New York‐Presbyterian Hosp.,

, 122 (2d Cir.

2006) (AOnce a district court=s discretion is triggered under ' 1367(c)(3), it

balances the traditional values of judicial economy, convenience, fairness, and

comity.@). The declining of supplemental jurisdiction must actually promote

those values as Athe fact that one or more of the grounds for declining to exercise

supplemental jurisdiction set forth in section 1367(c) applies does not mean that

dismissal is mandated.@ Oneida Indian Nation of New York v. Madison County,

(2d Cir. 2011). We have emphasized both that, insofar as a '

1367(c) category is applicable, supplemental jurisdiction is a Adoctrine of

discretion, not of plaintiffs= right,@ Kolari, 455 F.3d at 122 (quoting Gibbs,

), and that A[i]n providing that a district court >may= decline to exercise

20 17‐2497‐cv Lucia Lopez Catzin v. Thank You & Good Luck Corp.

[supplemental] jurisdiction, [' 1367(c)] is permissive rather than mandatory,@

Valencia,

.

The District Court invoked ' 1367(c)(3) as the statutory basis that triggered

the discretionary inquiry of whether to exercise supplemental jurisdiction. It

determined that plaintiffs had abandoned their federal‐law claims, and then it,

sua sponte, conducted the inquiry into whether to continue to exercise

supplemental jurisdiction. The District Court framed its analysis by citing Cohill

(which was decided prior to the codification of ' 1367 in 1990) for the proposition

that Ain the usual case in which all federal‐law claims are eliminated before trial,

the balance of factors . . . will point toward declining to exercise jurisdiction over

the remaining state‐law claims.@ Catzin,

, at *2 (quoting Cohill,

n.7). But, the District Court=s application of the ' 1367(c)(3)

factors was inherently speculative. Because it did not hear from the parties, the

record does not afford us an adequate basis for examining whether the District

Court adequately assessed the ' 1367(c)(3) factors.

When ' 1367(c)(3) applies, the district court must still meaningfully balance

the supplemental jurisdiction factors. The principle that the elimination of

federal‐law claims prior to trial generally points to declining to exercise

21 17‐2497‐cv Lucia Lopez Catzin v. Thank You & Good Luck Corp.

supplemental jurisdiction Ain the usual case@ clearly does not mean that the

balance of the factors always points that way. Indeed, Cohill stated that this

principle Adoes not establish a mandatory rule to be applied inflexibly in all

cases.@ Cohill,

n.7. Nor does the record in this case establish that

it falls within the ambit of the Ausual case,@ where judicial economy, convenience,

fairness, and comity counsel against exercising supplemental jurisdiction when '

1367(c)(3) applies.

Our review of the record before us leaves us with significant doubt as to

how the District Court viewed the supplemental jurisdiction factors.

Supplemental jurisdiction was revoked one day prior to the final pretrial

conference and a week before the scheduled trial date. The trial was to be short,

roughly three days, and the parties and the District Court were ready for trial.

The case presented no issues of special state court expertise nor any novel

questions of state law or state‐law causes of action that would be better decided

in state court. Instead, wage‐and‐hour cases like this one are quotidian, and

federal courts are well experienced in presiding over them, even when they

involve claims under the NYLL for which there is no FLSA equivalent, such as

for failure to provide wage notices. The District Court did not explain how

22 17‐2497‐cv Lucia Lopez Catzin v. Thank You & Good Luck Corp.

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. 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.

Litigants come to court to have their problems solved. The three plaintiffs

here are immigrant laborers who are seeking allegedly unpaid minimum wages

and overtime wages totaling roughly $13,000 (along with liquidated damages) for

washing, drying, and folding clothes. While this amount of money may be

modest to some, it could well be significant to individuals in plaintiffs=

circumstances. The fact that the case has been vigorously litigated for so long is

to us an indication of its importance to the parties. The defendants are small

business owners of laundromats who presumably have experienced years of

legal bills and distraction from the responsibilities of running their businesses.

The record yields no clarity as to how judicial economy, convenience, fairness, or

comity might be served by requiring the parties to expend additional years as

23 17‐2497‐cv Lucia Lopez Catzin v. Thank You & Good Luck Corp.

well as dollars re‐litigating in state court. While we are certainly mindful of the

fact that district courts face significant caseloads and real pressure to move cases

along, the pressure to close cases must not overshadow the federal courts=

paramount role of being a forum where disputes are efficiently and fairly

resolved. After all, as the very first Rule of Civil Procedure provides, procedure

in the district courts is meant Ato secure the just, speedy, and inexpensive

determination of every action and proceeding.@ Fed. R. Civ. P. 1.

CONCLUSION

For the foregoing reasons, the order of the District Court is VACATED and

the case is REMANDED for further proceedings consistent with this opinion.

24