DIAZ v. NWPH LLC (2018)

SUMMARY ORDER

Plaintiffs in this case are hotel room service waiters who brought claims under the Fair Labor Standards Act (FLSA) and the New York Labor Law (NYLL) against the operator of their hotel, Amedeo, alleging that they were illegally underpaid. Amedeo appeals the district court’s ruling, on summary judgment, that Plaintiffs’ NYLL claims are not preempted by the Labor Management Relations Act (“LMRA”). We assume the parties’ familiarity with the underlying facts, the procedural history, and the issues presented for review.

The district court granted summary judgment to Amedeo dismissing Plaintiffs’ FLSA claims, but declined to retain supplemental jurisdiction under 28 U.S.C. § 1367 over Plaintiffs’ state claims, which it remanded to state court. Prior to analyzing the supplemental jurisdiction discretionary factors, however, the district court reached the merits of Amedeo’s preemption argument, concluding that Plaintiffs’ state claims are not preempted by the LMRA because those claims would not require much, if any, reference to the parties’ collective bargaining agreement. The district court only then addressed supplemental jurisdiction, ultimately declining in its discretion to retain jurisdiction because the remaining claims would involve novel questions of New York law.

To have standing on appeal, “a party must be aggrieved by the judicial action from which it appeals.” Kass v. City of New York, 864 F.3d 200, 205 (2d Cir. 2017) (internal quotation marks omitted). “A party that is not bound by a district court order will, in the usual case, have difficulty showing that it meets the Article III standing requirement that it has suffered such an injury.” Id. (internal quotation marks and alteration omitted). “Because the decision to retain jurisdiction is discretionary and not a litigant’s right, a court is not required either to accept or decline supplemental jurisdiction when a state law claim raises federal preemption issues.” Klein & Co. Futures, Inc. v. Bd. of Trade of City of New York, 464 F.3d 255, 263 (2d Cir. 2006).

Because the district court exercised its broad discretion not to retain supplemental jurisdiction over the state claims, the district court’s preemption ruling was dicta, unnecessary to the ultimate resolution of Amedeo’s summary judgment motion. Accordingly, Amedeo was not sufficiently aggrieved by the district court’s preemption conclusion to have standing to challenge it on appeal.

The appeal is DISMISSED for lack of jurisdiction.