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May 4, 1988

Elliot L. Robinson and Harvey Levine, on behalf of themselves and all others similarly situated, Plaintiffs,
Sizes Unlimited, Inc., and The Limited, Inc., Defendants

The opinion of the court was delivered by: WOLIN


 This age discrimination case arises from the termination of the employment of plaintiffs Elliot Robinson and Harvey Levine, two former employees of Sizes Unlimited, Inc. ("Sizes Unlimited"). *fn1" Plaintiffs originally filed this action against Sizes Unlimited and its parent corporation, The Limited, Inc. (collectively, the defendants) in state court, whereupon defendants removed to federal court. Defendants then moved to dismiss the complaint on various grounds, all of which were denied without prejudice by Judge Ackerman. See Order filed September 29, 1987 (denying, without prejudice, defendants' motions to dismiss). Subsequently, defendants now bring a motion to dismiss plaintiffs' pendent state law claims. For the following reasons defendants' motion is denied in part and granted in part.


 The facts are simple. The substance of plaintiffs' allegation is that they were fired as part of a campaign to terminate the older employees of Sizes Unlimited which was instigated by its parent, The Limited, Inc. *fn2" From August, 1983 through December, 1984, Elliot Robinson was employed as a store manager of Sizes Unlimited. At the time of his termination Robinson was fifty-two years old. Similarly, from October, 1981 through February, 1985, Harvey Levine was employed as a district manager for Sizes Unlimited; he was forty-three at the time of his termination.

 As already noted, plaintiffs filed a four count complaint in the Superior Court of Bergen County, New Jersey on December 24, 1986 which was removed to federal court on February 20, 1987. Count III of the complaint is based on the Federal Age Discrimination in Employment Act ("ADEA"), 29 U.S.C. §§ 621 et seq.; this count is brought on behalf of plaintiffs and all others similarly situated. Counts I and II are based, respectively, on the New Jersey Law Against Discrimination ("NJLAD"), N.J. Stat. Ann. 10:5-1 et seq., and the New Jersey Constitution, Article I, paragraph 1. These two counts are also brought as class actions. In Count IV, plaintiff Elliot Robinson alleges an individual cause of action under the NJLAD, N.J. Stat. Ann. 10:5-4.1, for discrimination against the handicapped. *fn3"

 It is clear that with respect to plaintiffs' ADEA claims this court has subject matter jurisdiction because these claims present a federal question pursuant to 28 U.S.C. § 1331. As to plaintiffs' other claims, however, defendants note that they are based on alleged violations of New Jersey state law and that jurisdiction only exists if this court exercises its powers of pendent jurisdiction. See Ambromovage v. United Mine Workers of America, 726 F.2d 972, 989 n.48 (3d Cir. 1984) ("'Pendent jurisdiction' generally refers to a federal court's jurisdiction over the plaintiffs' nonfederal claims, as long as there is a federal claim which gives the court jurisdiction."). In the instant case defendants assert that there are three grounds which render pendent jurisdiction inapplicable: (1) this court does not have the power to exercise pendent jurisdiction over a state law age discrimination "opt-out" class action brought in conjunction with a federal ADEA "opt-in" class action; (2) pendent jurisdiction would cause this court to needlessly decide novel issues of state law; and (3) there would be jury confusion created with respect to the appropriate remedies applied to plaintiffs' proposed combination of federal and state age discrimination class actions. Plaintiffs respond that not only does this court have the power to exercise pendent jurisdiction, but that the exercise of jurisdiction over the state law claims is particularly appropriate in the instant action.


 A. Standards for Exercising Pendent Jurisdiction.

 This court may exercise its powers of pendent jurisdiction only if "the state and federal claims . . . derive from a common nucleus of operative fact." United Mine Workers of America v. Gibbs, 383 U.S. 715, 725, 86 S. Ct. 1130, 1138, 16 L. Ed. 2d 218 (1966). The mere existence of the power of pendent jurisdiction does not, however, mandate its use; district courts are given discretion when balancing the considerations of "judicial economy, convenience and fairness to litigants" in determining whether to invoke pendent jurisdiction. See Gibbs, 383 U.S. at 726, 86 S. Ct. at 1139 (noting that "pendent jurisdiction is a doctrine of discretion, not of plaintiff's right"). In other words, this court must determine whether "the state issues substantially predominate," thereby inviting their dismissal, or if instead, "the state claim is so closely tied to questions of federal policy that the argument for the exercise of pendent jurisdiction is particularly strong." Id. at 726-727, 86 S. Ct. at 1139.

 In applying the test for pendent jurisdiction as outlined in Gibbs, the Third Circuit has adopted a "three-tiered" analysis in which a district court must determine whether:


(1) a common nucleus of operative fact exists between the state claim at issue and the accompanying federal claim;


(2) the exercise of jurisdiction would violate existing federal policy; and


(3) in weighing various prudential factors, it is appropriate to hear the pendent state claim.

 Ambromovage, supra, 726 F.2d at 989-90. The first and second prongs of this analysis address the court's power to entertain the state law claims under the Constitution and other relevant federal statutes; the third prong, discretionary in its application, is directed at the propriety of the exercise of pendent jurisdiction.

 B. Application of the Ambromovage Test to the Pendent State Law Class Action Claims.

 (1) Frustration of Federal Policy. In the instant action plaintiffs will seek class certification under both federal and state law. *fn4" Although Federal Rule of Civil Procedure 23 generally governs class actions in federal court, *fn5" that rule is not applicable to plaintiffs' ADEA claims. Section 7(b) of the ADEA *fn6" incorporates the class action provision of the Fair Labor Standards Act ("FLSA"), 29 U.S.C. § 216(b), which provides as follows:


An action to recover the liability prescribed . . . may be maintained against any employer (including a public agency) in any Federal or State Court of competent jurisdiction by any one or more employees for and in behalf of himself or themselves and other employees similarly situated. No employee shall be a party plaintiff to any such action unless he gives his consent in writing to become such a party and such consent is filed in the court in which such action is brought.

 See also Sperling v. Hoffman-La Roche, Inc., 118 F.R.D. 392, 399 (D.N.J. 1988) (citations omitted) (noting that ADEA class actions must proceed under FLSA and not Fed.R.Civ.P. 23). Therefore, defendants assert that in light of the distinction between ADEA and Rule 23 class action provisions, *fn7" this court does not have the power to entertain plaintiffs' pendent state law claims under the second prong of the Ambromovage test (i.e., the foreclosure of pendent jurisdiction when federal policy would be frustrated).

 In other words, defendants maintain that if this court were to join and try plaintiffs' pendent state law opt-out class actions with their federal ADEA opt-in class action, it would nullify the limitations of the opt-in requirement expressly provided for under the ADEA/FLSA by effectively transforming a Section 216(b) class action into a Rule 23 class action. See Lusardi v. Xerox Corp., 99 F.R.D. 89, 91 (D.N.J. 1983) (holding that a class cannot be certified pursuant to Rule 23 on an ADEA claim). See also Pirrone v. North Hotel Associates, 108 F.R.D. 78, 80 (E.D. Pa. 1985) (noting the distinction between § 216(b) opt-in provision as opposed to Rule 23 opt-out provision).

 This court acknowledges defendants' legitimate concern that the exercise of pendent jurisdiction over plaintiffs' state law class actions in this case may well have the effect of expanding a federal age discrimination class to individuals who could not otherwise opt into the federal class. *fn8" This precise issue of "'manufacture[d] federal jurisdiction' in contravention of Part 2 of the Ambromovage test" was recently addressed by Judge Ackerman in Sperling, supra, 118 F.R.D. at 412. Judge Ackerman was unconvinced that plaintiffs were seeking to contravene the purposes of the ADEA because:


I understand plaintiffs to be requesting class certification on the NJLAD claim under Rule 23, court notice to all class members to provide them with an opportunity to opt out, and a self-imposed limit on the definition of the NJLAD class to include only those people who have already joined as class members on the ADEA claim. . . . By limiting possible membership on the state NJLAD claim to people already members of the class under the federal ADEA claim, plaintiffs appear to avoid any possible 'pendent party' difficulties.

 Id. (citing Aldinger, 427 U.S. at 14-18, 96 S. Ct. at 2420-2422). Thus, by following the example set in Sperling and strictly limiting the potential certification of the opt-out class under the pendent state law counts to those plaintiffs who have first opted into the ADEA class pursuant to Section 216(b), this court can effectively eliminate defendants' concerns as to the problem of manufactured jurisdiction over the so-called "pendent plaintiffs." *fn9"

 Moreover, this court finds that a restriction on the certification of any pendent state law class to those already certified under the ADEA will provide the added benefit of separating in time the notice required to be provided under both the federal and state class actions. See Sperling, 118 F.R.D. at 412-413 (noting that to avoid any confusion between opt-in and subsequent opt-out choices, and between notice from plaintiffs [ i.e., under Section 216(b)] and notice from the court [ i.e., under Rule 23], ADEA notice would be separated in time from any Rule 23 notice which may eventually be required).

 (2) Prudential Factors. Regardless of whether this court has the power to exercise pendent jurisdiction over the pendent state law claims, defendants assert that in weighing the factors of judicial economy, fairness to the litigants and the interests of federalism under the third prong of the Ambromovage test, this court should exercise its discretion and dismiss the pendent claims. Generally, this court recognizes that the interests of judicial economy favor one consolidated action. See Gibbs, supra, 383 U.S. at 724, 86 S. Ct. at 1138 (tendency of decisions is "to require a plaintiff to try his . . . whole case at one time[]"); see also Ambromovage, supra, 726 F.2d at 989 ("judicial reality" is to dispose of multiple claims originating from "common nucleus of operative fact" in a single action). *fn10" Notwithstanding any judicial "economies of scale," however, this court also acknowledges that, "pendent jurisdiction [is] necessarily limited, on the other hand, by the principles of federalism which underlie constitutional and statutory limits on federal jurisdiction." Ambromovage, 726 F.2d at 989.

 (a) New Jersey Law Against Discrimination (Count I). With respect to plaintiffs' NJLAD claim, defendants assert that this court will be faced with a myriad of novel issues under New Jersey state law which should first be decided by the state courts of New Jersey. For example, defendants note that there exist complicated subject matter jurisdictional questions of first impression as to the claims of plaintiff Robinson. Despite the fact that Robinson resides in New Jersey, he was employed, and thereafter dismissed, by Sizes Unlimited in New York; moreover, there is currently pending in New York an administrative proceeding in his behalf. Defendants also assert that the exercise of pendent jurisdiction will create jury confusion as to the available remedies in each of the separate actions because the ADEA does not provide for compensatory or punitive damages, but instead allows for liquidated damages, see 29 U.S.C. § 626(b), whereas the NJLAD expressly permits recovery of compensatory damages, including mental pain and humiliation damages. See Blum v. Witco Chemical Corp., 829 F.2d 367, 376-377 (3d Cir. 1987) (citing Andersen v. Exxon Co., U.S.A., 89 N.J. 483, 446 A.2d 486 (1982)). *fn11"

 Although this court will not shirk its responsibility to decide novel issues of New Jersey state law, see Woodson v. AMF Leisureland Centers, Inc., 842 F.2d 699, slip op. at 6 (3d Cir. 1988) (noting federal court must predict ruling of Supreme Court in diversity cases), this court does acknowledge that "needless decisions of [pendent] state law are to be avoided as a matter of comity." Guyette v. Stauffer Chemical Co., 518 F. Supp. 521, 524 (D.N.J. 1981) (citing Gibbs, supra, 383 U.S. at 726, 86 S. Ct. at 1139). But see also Blum v. Witco Chemical Corp., supra, 829 F.2d at 376 (federal court predicts New Jersey Supreme Court decision with respect to pendent tort cause of action). *fn12"

 With respect to the application of the NJLAD to Robinson's age discrimination claim, which apparently arose in New York, *fn13" this court is unable to find any precedent in either the state or federal courts as to whether the substantive provisions of the NJLAD protect a New Jersey resident who is employed in another state. In Warner v. Auberge Gray Rocks Inn, 827 F.2d 938 (3d Cir. 1987), the Third Circuit noted that with respect to choice-of-law questions:


The New Jersey cases have almost uniformly applied New Jersey law in instances in which the state has a significant compensation interest viz., where the plaintiff was a New Jersey domiciliary.

 Id. at 941 (quoting Schum v. Bailey, 578 F.2d 493, 496 (3d Cir. 1978) (footnote omitted; other citations omitted). Accordingly, in Grey Rocks the Third Circuit held that the longer New Jersey statute of limitations would supplant that of a foreign jurisdiction, despite the fact that the injury occurred in the other jurisdiction. 827 F.2d at 942. See accord Pine v. Eli Lilly & Co., 201 N.J. Super. 186, 492 A.2d 1079 (App. Div. 1985) (applying New Jersey statute of limitations and "discovery rule"). Thus, in light of the fact that Robinson is a New Jersey resident and Sizes Unlimited is headquartered in Secaucus and it also operates stores throughout New Jersey, it appears that the New Jersey Supreme Court would apply the NJLAD to Robinson's claim of age discrimination even though he was employed in New York. See Deemer v. Silk City Textile Mach. Co., 193 N.J. Super. 643, 648-649, 475 A.2d 648 (App. Div. 1984) (noting that New Jersey courts have abandoned "mechanical application" of lex loci delicti doctrine in favor of "governmental interest approach" in choice-of-law questions). *fn14"

 Choice-of-law and jury confusion questions aside, defendants maintain that Robinson is precluded from bringing his NJLAD claim because of ongoing administrative proceedings filed by the Federal Equal Employment Opportunity Commission ("EEOC") with the New York State Division on Human Rights ("NYDHR"). Although there appears to be no law in this jurisdiction with respect to the interrelationship of NYDHR or EEOC charge-possessing and substantive NJLAD claims, in a similar situation the Southern District of New York held that New York law did not preclude a pendent state claim by a plaintiff who filed a Title VII *fn15" charge with the EEOC which was then referred to the NYDHR by the EEOC. See Selbst v. Touche Ross & Co., 587 F. Supp. 1015, 1017 (S.D.N.Y. 1984) (noting that New York law bars pendent suit only by those who filed directly with the NYDHR).

 In the instant action, Robinson, like the plaintiff in Selbst, did not file directly with any state or local agency. Because this court finds the logic of Selbst to be intact, this court holds that Robinson is not precluded from bringing suit under the NJLAD merely because of the EEOC's deferral of his claim to the NYDHR. Therefore, this court like the court in Selbst, will not dismiss Robinson's pendent state law age discrimination claims.

 (b) New Jersey Constitution (Count II). With respect to plaintiffs' claim under Article I, Paragraph 1 of the New Jersey Constitution, defendants assert that the New Jersey courts have never decided whether, pursuant to this provision of the New Jersey Constitution, there exists a basis for a private claim for age discrimination. This argument, however, was refuted in Peper v. Princeton University Board of Trustees, 77 N.J. 55, 389 A.2d 465 (1978), in which the New Jersey Supreme Court expressly found that Article I, Paragraph 1 of the New Jersey Constitution created a private cause of action for employment discrimination arising from the "right to obtain gainful employment." 77 N.J. at 71-73. See also Weber v. LDC/Milton Roy, 42 FEP (BNA) Cases 1507, 1516 (D.N.J. 1986) (noting existence of private right of action against age discrimination under New Jersey Constitution "regardless of whether or not implementing legislation has been adopted").

 Although Peper and Weber were decided in the context of individual claims as opposed to class actions, this court cannot find (nor has defendant cited) any authority for the proposition that a class action is inappropriate under the New Jersey Constitution. Accordingly, this court will not dismiss plaintiffs' pendent claim under Article I, Paragraph 1 of the New Jersey Constitution.

 C. Application of the Ambromovage Test to Robinson's Pendent State Law Claim.

 The issue with respect to Robinson's separate claim of handicap discrimination under the NJLAD, N.J. Stat. Ann. 10:5-4.1, is whether this claim derives from a common nucleus of operative fact under the first prong of the Ambromovage test. Unlike plaintiffs' claims in the first three counts of the complaint (i.e., the age discrimination claims), all which involve the specific issue of Sized Unlimited's alleged practice of age discrimination, Robinson's claim for handicap discrimination is clearly a claim distinct unto itself.

 Despite Robinson's assertion that his handicap discrimination claim arises from the same nucleus of operative fact as the age discrimination claims, and even if it would require testimony by the same witness, this court finds that the legal theory of recovery under an ADEA age discrimination claim is entirely different from that of a handicap discrimination claim. See Mason v. Richmond Motor Co., Inc., 625 F. Supp. 883, 886 (E.D. Va. 1986) (noting that "loose factual connection" between federal and state claims does not fall within rubric of common nucleus of operative fact). But see Frye v. Pioneer Logging Machinery, Inc., 555 F. Supp. 730 (D.S.C. 1983) ("loose connection" sufficient). In following the Mason approach as opposed to that of Frye, this court finds that it does not have jurisdiction to entertain Robinson's pendent handicap discrimination claim. *fn16"


 For the above-stated reasons, defendants' motion to dismiss the state law courts of plaintiffs' complaint is hereby DENIED as to Counts I and II therein; and GRANTED as to Count IV therein.

 Defendant shall submit an order conforming to this opinion within seven (7) days of the filing of this opinion.

 Dated: May 4, 1988

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