United States District Court, W.D. Kentucky, Louisville
Charles R. Simpson III, Senior Judge United States District
se plaintiffs, current and retired teachers Randolph Wieck,
Betsey Bell, and Jane Norman (collectively,
“Plaintiffs”), filed this putative class action
on behalf of similarly situated members of the Kentucky
Teachers' Retirement System (“KTRS”). Compl.
1, ECF No. 1. The complaint asserts many causes of action,
including violations of the Contract Clause, Takings Clause,
and Due Process Clause of the Fifth Amendment of the United
States Constitution, the Fair Labor Standards Act
(“FLSA”), the Securities Act, the Investment
Advisers Act of 1940, various state statutes, and common law
breach of fiduciary duty. Id. at 2-3, 5-8.
Plaintiffs' claims rest on alleged mismanagement of KTRS,
resulting in an underfunding of the system. Id.
¶ 5. The defendants included the Board of Trustees of
KTRS, the Attorney General, the Auditor of Public Accounts,
the Kentucky Education Association (“KEA”),
multiple investment companies, including The Carlyle Group
L.P. (“Carlyle”). Id. at 1. This Court
previously dismissed all the defendants except KEA and
Carlyle. Order, ECF No. 47.
moves to dismiss under Federal Rule of Civil Procedure
12(b)(6) for failure to state a claim upon which relief can
be granted, ECF No. 48. KEA moves for judgment on the
pleadings for lack of subject matter jurisdiction under
Federal Rule of Civil Procedure 12(h)(3), or, in the
alternative, failure to state a claim upon which relief can
be granted under Rule 12(h)(2), ECF No. 51. Plaintiffs did
not respond. Because these motions involve the same facts and
issues, the Court will address them in a single memorandum
opinion and order.
reasons below, the Court will grant KEA's motion for
judgment on the pleadings for lack of subject matter
jurisdiction. Because the Court lacks subject matter
jurisdiction over these remaining claims, the Court will deny
Carlyle's motion to dismiss as moot. The Court will
dismiss all claims against KEA and Carlyle without prejudice.
allege that the Board of Trustees of KTRS mismanaged the
pension fund, allowing underfunding that resulted in a nearly
4% additional taking from teachers. Compl. ¶¶
18-22, ECF No. 1. The vast majority of Plaintiffs'
allegations are aimed at the Board of Trustees of KTRS and
assert violations of the Fair Labor Standards Act, Investment
Advisers Act, and Securities Act, various constitutional
violations, various violations of Kentucky state law, and
breach of fiduciary duty. Id. ¶¶ 7, 11,
14-18, 22, 26, 29, 30. Plaintiffs do not appear to assert any
particular causes of action against Carlyle. Plaintiffs
appear to assert only one cause of action against KEA, which
is based on Kentucky state law. Id. ¶ 38.
filed this action, seeking as damages a refund of any amounts
collected in excess of the original contribution rate.
Id. ¶ 46. In the alternative, they seek
injunctive relief, by which they seek to prevent future
additional amounts from being deducted from their pay, above
the original contribution rate. Id. Plaintiffs also
seek injunctive relief by which they demand that the Court
order the Board to (1) communicate honestly the underfunding
to its members, (2) demand full contributions from the
legislature, (3) bring civil suit against the legislature
within one year of inaction, and (4) amend its investment
guidelines. Id. ¶¶ 44-52. In addition,
Plaintiffs ask the Court to order the federal government to
direct federal education funds solely to education, rather
than to pensions. Id. ¶ 50. Finally, Plaintiffs
are asking for attorney fees and costs under 42 U.S.C. §
1983. Id. ¶ 52. Plaintiffs do not appear to
seek any particular damages or injunctive relief from Carlyle
moves for judgment on the pleadings under Federal Rule of
Civil Procedure 12(c), 12(h)(2), and 12(h)(3). KEA's Mot.
J. Pleadings, ECF No. 51. KEA asks this Court for judgment
either because of lack of subject matter jurisdiction or for
failure to state a claim upon which relief may be granted.
KEA's Mem. Supp. J. Pleadings 1, ECF No. 51-1.
asks this Court for judgment on the pleadings and argues that
the Court lacks subject matter jurisdiction under Federal
Rule of Civil Procedure 12(h)(3). Id. at 2. Federal
courts are courts of limited jurisdiction. The Court must
dismiss an action if it determines that it lacks subject
matter jurisdiction. Fed.R.Civ.P. 12(h)(3). A federal court
has original federal question jurisdiction over “civil
actions arising under the Constitution, laws, or treaties of
the United States.” 28 U.S.C. § 1331. A federal
court has original diversity jurisdiction where the suit is
between “citizens of different states” and
“where the matter in controversy exceeds the sum or
value of $75, 000, exclusive of interest and costs.” 28
U.S.C. § 1332(a). Finally, “in any civil action of
which the district courts have original jurisdiction, the
district courts shall 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.” 28 U.S.C. § 1367(a).
typically do not look into the validity of federal causes of
action in determining whether there is subject matter
jurisdiction. Steel Co. v. Citizens for a Better
Env't, 523 U.S. 83, 89 (1998). Subject matter
jurisdiction is not defeated simply because the federal
claims asserted fail to state a claim. See Id.
“Dismissal for lack of subject-matter jurisdiction
because of the inadequacy of the federal claim is proper only
when the claim is ‘so insubstantial, implausible,
foreclosed by prior decisions of this Court, or otherwise
completely devoid of merit as not to involve a federal
controversy.'” Id. (citing Oneida
Indian Nation of N.Y. v. Cty. of Oneida, 414 U.S. 661,
complaint did not assert a basis for subject matter
jurisdiction in this Court, but Plaintiffs did assert
violations of the Constitution and federal statutes in their
complaint. In this Court's last order, it dismissed all
claims against all defendants in this action except for KEA
and Carlyle. Order, ECF No. 47. Upon review, dismissal of
these claims eliminated all federal questions from this case.
There are no longer any valid, live causes of action based ...