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Royal Canin U. S. A. v. Wullschleger
Anastasia Wullschleger sued Royal Canin in state court, alleging that Royal Canin had engaged in deceptive marketing practices. Her original complaint asserted claims based on both federal and state law. Royal Canin removed the case to federal court.
That removal was premised on Wullschleger’s federal claim, which gave rise to federal-question jurisdiction and also allowed the federal court to exercise supplemental jurisdiction over Wullschleger’s factually intertwined state claims. But federal court isn’t where Wullschleger wanted the case to be resolved. So she amended her complaint, deleting every mention of federal law, and petitioned the district court for a remand to state court.
The district court denied Wullschleger’s request, but the 8th Circuit Court of Appeals reversed. In the 8th Circuit’s view, Wullschleger’s amendment had eliminated any basis for federal-question jurisdiction. And without a federal question, the court concluded, there was no possibility of supplemental jurisdiction over Wullschleger’s state-law claims.
The U.S. Supreme Court held that when a plaintiff amends a complaint to delete the federal-law claims that enabled removal to federal court, leaving only state-law claims behind, the federal court loses supplemental jurisdiction over the state claims, and the case must be remanded to state court.
Justice Elena Kagan delivered the opinion for a unanimous court.
In 1938, Congress enacted the Fair Labor Standards Act, guaranteeing a federal minimum wage for covered workers and requiring overtime pay for those working more than 40 hours per week. Congress exempted many types of employees from the FLSA’s overtime pay requirement, including outside salespeople who primarily work away from their employer’s place of business. The law places the burden on the employer to show that an exemption applies.
Petitioner EMD distributes food products in the Washington, D.C., area and employs sales representatives who manage inventory and take orders at grocery stores. Several sales representatives sued EMD alleging that the company violated the FLSA by failing to pay them overtime. EMD argued that the sales representatives were outside salespeople and therefore exempt from the FLSA’s overtime-pay requirement.
After a bench trial, the district court found EMD liable for overtime because EMD didn’t prove by clear and convincing evidence that its sales representatives were outside salespeople. On appeal, EMD argued that the district court should have used the less stringent preponderance-of-the-evidence standard instead of the clear-and-convincing-evidence standard. Applying circuit precedent, the 4th Circuit Court of Appeals disagreed and affirmed the district court’s judgment.
The U.S. Supreme Court held that the preponderance-of-the-evidence standard applies when an employer seeks to demonstrate that an employee is exempt from the minimum-wage and overtime-pay provisions of the FLSA.
Justice Brett Kavanaugh delivered the opinion for a unanimous court. Justice Neil Gorsuch filed a concurring opinion, in which Justice Clarence Thomas joined.