Blume v. Int'l Servs., Inc., 4:12 CV 165 DDN

CHARLES BLUME, individually and on behalf of all others similarly situated, Plaintiff,

v.INTERNATIONAL SERVICES, INC., et al., Defendants.

No. 4:12 CV 165 DDN

UNITED STATES DISTRICT COURT EASTERN DISTRICT OF MISSOURI EASTERN DIVISION

Dated: May 31, 2012

MEMORANDUM AND ORDER

This action is before the court upon the motions of defendants International Services, Inc., f/k/a International Profit Associates, Inc., a/k/a ROI-North America, Inc.; GPS USA, Inc.; and Integrated Business Analysis, Inc., a/k/a IBA USA, to dismiss for lack of personal jurisdiction (Doc. 10), to dismiss for improper venue (Doc. 11), and to transfer (Doc. 13). The parties have consented to the exercise of plenary authority by the undersigned United States Magistrate Judge pursuant to 28 U.S.C. § 636(c). (Doc. 17.) Oral argument was heard on April 5, 2012.

I. BACKGROUND

On January 31, 2012, plaintiff Charles Blume commenced this action, individually and on behalf of all others similarly situated, against his former employer, defendants International Services, Inc., f/k/a International Profit Associates, Inc., a/k/a ROI-North America, Inc.; GPS USA, Inc.; and Integrated Business Analysis, Inc., a/k/a IBA USA (collectively, defendants),¹ for unpaid wages. (Doc. 1.) According to the complaint, defendants are Illinois corporations with their principalplace of business in Buffalo Grove, Illinois. (Id. at ¶ 5.) Defendants are in the business of providing on-site business consulting services to small-to-medium sized businesses. (Id. at ¶¶ 1, 7) Plaintiff, a resident of St. Louis County, Missouri, worked as a Senior Business Consultant (SBC) for defendants from 1999 to 2010. (Id. at ¶¶ 2, 6.) SBCs travel to clients nationwide to perform consulting services. (Id. at ¶¶ 7-9.) Defendants' clients are charged based upon the number of hours billed by the SBCs. (Id. at ¶ 7.)

Plaintiff alleges that defendants do not accurately record the time that their SBCs work and instead track only the hours billed by their SBCs. (Id. at ¶ 10.) Defendants instruct their SBCs to bill only for time spent working at client locations, even though the SBCs must perform work away from client locations and defendants pay their SBCs only for time billed to clients. (Id. at ¶¶ 11-12.) Defendants also require their SBCs to perform other, non-compensated work, including attending "pre-meetings" before the beginning of a project and attending weekend meetings in Chicago, Illinois. (Id. at ¶¶ 13-14.) SBCs are also required to be at their respective "Hotel of Record" by the Sunday evening before a project is set to begin. (Id. at ¶ 15.) SBCs travel home on Fridays unless they are required to travel to Chicago for a meeting. (Id.) If an SBC is not booked by Friday afternoon for a project beginning during the coming week, the SBC must go to his or her home airport on Sunday afternoon to wait for a project assignment. (Id. at ¶ 16.) Upon receiving a project assignment, the SBC immediately travels to the client's city. (Id.) The SBC must stay at the airport until as late as 8:00 p.m. waiting to be assigned a project. (Id.) If the SBC is not assigned a project, he or she is released and allowed to return home, but is required to return to the airport the following afternoon to again await assignment of a project. (Id.)

Plaintiff alleges that he and all other SBCs were not compensated for their time waiting at airports or traveling to and from client locations. (Id. at ¶¶ 17, 18.) Plaintiff alleges that defendants expect their SBCs to work at least 50 hours each week but do not pay their SBCs overtime wages. (Id. at ¶¶ 19-20.) Plaintiff also alleges that in 2011, the Department of Labor investigated defendants' practices and determinedthat defendants' SBCs were entitled to overtime wages, which defendants refused to pay voluntarily. (Id. at ¶ 21.)

Plaintiff commenced this action as an "opt-in" collective action under 29 U.S.C. § 216(b). (Id. at ¶ 23.) Plaintiff seeks individual and collective relief from defendants' method of record keeping and for defendants' failure to pay overtime wages and wages for all hours worked. (Id. at ¶ 24.)

In Count I, plaintiff alleges that defendants violated the federal Fair Labor Standards Act (FLSA), 29 U.S.C. §§ 201-19, by failing to pay SBCs overtime wages and wages for all hours worked. (Id. at ¶¶ 25-34.) Plaintiff alleges that defendants have wilfully failed to keep accurate records of all hours worked by SBCs. (Id. at ¶ 29.) Plaintiff seeks compensatory damages, liquidated damages, attorney's fees, costs, pre-judgment interest, and post-judgment interest. (Id. at ¶¶ 33-35.)

II. MOTIONS TO DISMISS

Defendants move to dismiss under Rule 12(b)(2) for lack of personal jurisdiction and under Rule 12(b)(3) for improper venue. Defendants argue that the applicable venue statute, 28 U.S.C. § 1391, requires that the court have specific jurisdiction over a defendant,² and that dismissal is necessary because the court lacks specific jurisdiction over them. Defendants alternatively argue that the court also lacks general jurisdiction over them and, as such, the Eastern District of Missouri is not the proper forum for this action. (Docs. 10-12.)

Plaintiff responds that defendants have substantial contacts with Missouri and, pursuant to Missouri's long-arm statute, the court has personal jurisdiction over them. Plaintiff also argues that defendants consented to jurisdiction by registering with the Missouri Secretary of State and by designating an agent in Missouri for service of process. (Doc. 18.)

Defendants reply that the court does not have specific jurisdiction over them because the allegations in plaintiff's complaint do not arise out of their contacts with Missouri. Defendants also argue that under Missouri law, they have not consented to jurisdiction by registering with the Missouri Secretary of State or by appointing a registered agent in Missouri for service of process. (Doc. 21.)

III. MOTION TO TRANSFER

Defendants alternatively move to transfer this action to the United States District Court for the Northern District of Illinois. Defendants argue that plaintiff could have originally brought this action in the Northern District of Illinois and that the Northern District of Illinois is a more convenient venue for the parties and the possible witnesses. (Docs. 13-14.)

Plaintiff responds that his decision to commence this action in the Eastern District of Missouri should be accorded great weight. Plaintiff also argues that defendants hope to shift any inconvenience from them onto him and the prospective opt-in plaintiffs. Plaintiff further argues that the Eastern District of Missouri is a more convenient forum for most of the possible witnesses. (Doc. 19.)

Defendants reply that plaintiff's choice of forum should be afforded little weight and that the Northern District of Illinois would be a more convenient forum for most of the parties, including the prospective opt-in plaintiffs, and most of the possible witnesses. (Doc. 22.)

IV. DISCUSSION

The court may transfer a case pursuant to 28 U.S.C. § 1404(a)³ even without personal jurisdiction over a defendant.⁴ Goldlawr, Inc. v.Heiman, 369 U.S. 463, 465-67 (1962); Follette v. Wal-Mart Stores, Inc., 41 F.3d 1234, 1238 (8th Cir. 1994); Election Sys. & Software, Inc. v. Avante Int'l Tech. Corp., No. 8:07CV375, 2008 WL 943338, at *2 (D. Neb. Apr. 7, 2008); Naegler v. Nissan Motor Co., 835 F. Supp. 1152, 1156 (W.D. Mo. 1993).

Thus, the court first considers defendants' motion to transfer the action to the United States District Court for the Northern District of Illinois. See Miller v. Hambrick, 905 F.2d 259, 262 (9th Cir. 1990) (explaining that transfer is often more appropriate than dismissal because often "dismissal of an action that could be brought elsewhere is 'time-consuming and justice-defeating' " (quoting Goldlawr, 369 U.S. at 467)); accord Poku v. FDIC, 752 F. Supp. 2d 23, 27 (D.D.C. 2010).

A. Motion to Transfer

A district court has the authority to transfer a case to another district when transfer would further (1) the convenience of the parties; (2) the convenience of the witnesses; and (3) the interest of justice. 28 U.S.C. § 1404(a). The court must consider each of these factors but is not limited by them; determining whether transfer is appropriate "require[s] a case-by-case evaluation of the particular circumstances at hand and a consideration of all relevant factors." Terra Int'l, Inc. v. Miss. Chem. Corp., 119 F.3d 688, 691 (8th Cir. 1997); accord In re Apple, Inc. , 602 F.3d 909, 912 (8th Cir. 2010) (per curiam). Other relevant factors can include: (4) the accessibility to records and documents;

(5) the location of the alleged conduct; (6) the law of each forum; (7) issues of judicial economy; (8) the plaintiff's choice of forum; (9) the costs of litigating in each forum; (10) each party's ability to enforce a judgment; (11) obstacles to a fair trial; (12) conflict of law issues; and (13) a court's expertise with the law of the forum. Terra, 119 F.3d at 696. The party seeking transfer bears the burden of showingthat the balance of factors "strongly" favors transfer. Graff v. Qwest Commc'ns Corp., 33 F. Supp. 2d 1117, 1121 (D. Minn. 1999).

Initially, the parties agree that plaintiff could have commenced this action in the United States District Court for the Northern District of Illinois, as his claim arises under federal law and defendants' corporate headquarters is located within the Northern District of Illinois. (Doc. 14-1 at ¶ 5); see 28 U.S.C. § 1331 (federal question subject matter jurisdiction); § 1391(b)(1) and (c)(2) (venue and residency of corporate defendants). Thus, transfer to the Northern District of Illinois is potentially available under § 1404(a). See § 1404(a) (the court may transfer only to a district in which the action could have originally been brought).

1. Convenience of the Parties

Concerning the convenience of the parties, defendants argue that litigating in the Northern...