Johnson v. Vcg Holding Corp..

767 F.Supp.2d 208

Ernest E. JOHNSON, III and Brian S. Prindle, Plaintiffs,

v.VCG HOLDING CORPORATION, Defendant.

No. 2:10–cv–00442–JAW.

United States District Court, D. Maine.

March 1, 2011.

Donald F. Fontaine, Law Office of Donald F. Fontaine, Portland, ME, for Plaintiffs.Allan S. Rubin, Jackson Lewis LLP, Southfield, MI, Matthew D. Freeman, Jackson Lewis LLP, Boston, MA, Paul Decamp, Jackson Lewis LLP, Reston, VA, for Defendant.

ORDER ON MOTION FOR CHANGE OF VENUE

JOHN A. WOODCOCK, JR., Chief Judge.

In this Fair Labor Standards Act (FLSA) and Maine Overtime Law case, the Court denies the employer's motion for change of venue to where it is headquartered because the employer failed to demonstrate that transfer would be in the interests of justice or for the convenience of the parties and witnesses.

I. STATEMENT OF FACTS

On October 27, 2010, Ernest E. Johnson, III and Brian S. Prindle filed a class action lawsuit against VCG Holding Corporation (VCG), alleging that, although they and others were VCG employees, VCG had failed to comply with the FLSA and state of Maine Overtime Law. Compl. (Docket # 1). On December 9, 2010, VCG moved for change of venue to the United States District Court for the District of Colorado. Def. VCG Corp.'s Mot. to Transfer Venue to the Dist. of Colorado (Docket # 8) ( VCG Mot.). On January 4, 2011, the Plaintiffs objected. Resp. of Pls. to Def.'s Mot. to Transfer Venue (Docket # 14) ( Pls' Opp'n.). On January 14, 2011, VCG replied. Def. VCG's Reply Br. in Support of its Mot. to Transfer to Dist. of Colorado (Docket # 15) ( VCG Reply ).

II. THE PARTIES' POSITIONSA. VCG's Position

VCG moves to transfer this cause of action to the District of Colorado, saying that Colorado is “the district where VCG is incorporated, the location where it principally conducts its business and where the majority of the witnesses and documents material to this dispute are located.” VCG Mot. at 1. Citing caselaw, VCG says that venue is often moved in FLSA cases to the district where the employer has its headquarters if the original forum state does not have a strong interest in the outcome. Id. at 4–5. VCG observes that its corporate and business structure is based in Colorado, not Maine. Id. at 5–6. It admits that as a holding company, VCG owns stock, membership or partnership interests in a variety of nightclubs, including KenKev II, Inc. (KenKev), a Maine corporation which does business under the name of PT's Showclub Portland. Id. at 5–6. But VCG adds that KenKev is only one of eighteen similar businesses throughout the country in which VCG has an ownership interest. Id. at 5–6. On a day to day basis, KenKev is managed, according to VCG, by a Maine resident who is in charge of employment decisions. Id. at 6. VCG has a wholly-owned subsidiary, International Entertainment Consultants, Inc. (IEC), which provides management consulting services to its subsidiaries and is located in Colorado. Id. at 6. VCG says that of the twenty-six employees it identifies as having material information about the lawsuit, a majority resides in Colorado. Id. at 7. Moreover, other potential witnesses are scattered throughout the United States; some closer to Maine than Colorado, many not. Id. at 7–8. Observing that Colorado is 1,800 miles from Maine, VCG contends that requiring its senior employees to litigate a case in Maine would cause its business “serious disruption”. Id. at 8–9. VCG also notes that the documents relevant to this cause of action, such as personnel files, payroll records, corporate books and records, are all located in Colorado. Id. at 9. Anticipating the Plaintiffs' argument, VCG says that a plaintiff's choice of forum is a less significant factor in a putative class action. Id. at 10. Finally, VCG points to statistics from the Administrative Office of the Courts (AO) which indicate that the median disposition time for civil actions in the District of Colorado is somewhat less than in the District of Maine, a factor that it says supports transfer. Id.

B. The Plaintiffs' Response

In their opposition, the Plaintiffs dispute VCG's contention that a plaintiff's choice of forum is less significant in a FLSA case. Pl.'s Opp'n. at 2–3. Instead, they cite caselaw in which courts have concluded that Congress intended a plaintiffs choice of forum to be a significant factor in FLSA lawsuits. Id. The Plaintiffs also point out that, although it is true that the District of Maine will be inconvenient for VCG's witnesses, the District of Colorado would be equally inconvenient for the Plaintiffs and their Maine witnesses. Id. at 3. They contend that about fifty of the one hundred and sixty potential opt-in plaintiffs are closer to Maine than to Colorado and that in any case, representative testimony is typically allowed in the First Circuit. Id. Furthermore, they note that the two known representatives are in Maine, that it is speculative where the ultimate opt-in plaintiffs will come from, and that a Colorado forum would be markedly inconvenient for the known plaintiffs. Id. at 4. Regarding document production, the Plaintiffs minimize the inconvenience of the actual location of the documents since most will be reduced to an electronic format. Id. at 4–5.

Conceding that Colorado has an interest in policing corporate compliance with its laws, the Plaintiffs argue that this interest is counterbalanced by Maine's interest in policing its own labor laws. They observe that part of the case involves Maine law and that Maine has an interest both in VCG's compliance with its state statutes and the protection of Maine residents working in Maine for out of state businesses. Id. at 5. Finally, the Plaintiffs distinguish the cases VCG cites. Id. at 6–7.

C. VCG's Reply

In reply, VCG points out that the Plaintiffs failed to supply any affidavits or documents in support of their factual contentions and VCG urges the Court to accept as proven for purposes of the motion to transfer, the facts as VCG set them out in its motion. VCG Reply at 1–2. VCG refutes the Plaintiffs' assertion that FLSA caselaw supports the Plaintiffs' choice of forum as a significant factor in change of venue motions. Id. at 2–4. VCG reiterates its earlier argument that the convenience of the witnesses and the location of the documents “compel[ ]” transfer. Id. at 5. Finally, regarding the Maine law claim, VCG urges the Court to refuse to assert supplemental jurisdiction over the state law claim, or if jurisdiction is asserted, to sever the state law claim and send the FLSA count to the District of Colorado for adjudication. Id. at 6.

III. DISCUSSIONA. General Principles

Under 28 U.S.C. § 1404(a), a district court is authorized “[f]or the convenience of the parties and witnesses,” to transfer any civil action to any other district or division where it might have been brought. The burden of proving the propriety of a transfer lies with the party seeking it. Coady v. Ashcraft & Gerel, 223 F.3d 1, 11 (1st Cir.2000). “Section 1404(a) is intended to place discretion in the district court to adjudicate motions for transfer according to an ‘individualized, case-by-case consideration of convenience and fairness.’ ” Stewart Org., Inc. v. Ricoh Corp., 487 U.S. 22, 29, 108 S.Ct. 2239, 101 L.Ed.2d 22 (1988) (quoting Van Dusen v. Barrack, 376 U.S. 612, 622, 84 S.Ct. 805, 11 L.Ed.2d 945 (1964)); Astro–Med, Inc. v. Nihon Kohden Am., Inc., 591 F.3d 1, 12 (1st Cir.2009).

The United States Supreme Court has advised district courts to consider both “private concerns” and “public interest factors” in exercising their § 1404(a) discretion. Stewart, 487 U.S. at 30–31, 108 S.Ct. 2239. Private factors include “the statutory considerations of convenience of the parties and witnesses, but also often include the plaintiffs forum preference, where the claim arose, and the relative ease of access to sources of proof.” 15 Charles Alan Wright, Arthur R. Miller & Edward H. Cooper, Federal Practice and Procedure § 3847 (2007 ed.) (Federal Practice and Procedure). Public factors “encompass the statutory consideration of the interest of justice, focus on judicial economy and often include the district court's familiarity with the governing law, the local interest in deciding local controversies at home, and the relative congestion of the courts.” Id.

B. Potential Jurisdiction of the Transferee District

A preliminary question is whether the lawsuit could have been brought in the proposed transferee district. Hoffman v. Blaski, 363 U.S. 335, 342–44, 80 S.Ct. 1084, 4 L.Ed.2d 1254 (1960). A lawsuit under the FLSA could have been brought in the district where the employer is headquartered and incorporated. 28 U.S.C. § 1391(c). Here, VCG says that it is headquartered and incorporated in Colorado. Accordingly, VCG has met this essential jurisdictional prerequisite for transfer.

C. Plaintiff's Choice of Forum

Traditionally, the plaintiff's choice of forum is a factor that weighs in favor of the plaintiff in evaluating a motion for transfer of venue. In Piper Aircraft Co. v. Reyno, 454 U.S. 235, 255, 102 S.Ct. 252, 70 L.Ed.2d 419 (1981), the United States Supreme Court noted that “there is ordinarily a strong presumption in favor of the plaintiff's choice of forum, which may be overcome only when the private and public interest factors clearly point towards trial in the alternative forum.” See also Coady, 223 F.3d at 11 (“The burden of proof rests with the party seeking transfer; there is a strong presumption in favor of the plaintiffs choice of forum”). VCG says that the rule is different in putative class actions, especially involving FLSA claims. The Court agrees it is logical in a nationwide class action that the plaintiff's choice of forum is entitled to less deference. Wiley v. Gerber Prods., 667 F.Supp.2d 171, 174 (D.Mass.2009) (stating that the logic of the argument against a strong presumption favoring the plaintiff's forum is “convincing”); cf. Koster v. (Am.) Lumbermens Mut....