Kimble v. Opteon Appraisal, Inc.Kimble v. Opteon Appraisal, Inc.
- Reporters:
- Before:
- Frank P. Geraci Jr.
INTRODUCTION
On September 20, 2024, Magistrate Judge Mark W. Pedersen filed a Decision and Order, ECF No. 37, in which he granted Plaintiff Scott Kimble‘s motion to transfer his Federal Labor Standards Act (“FLSA“) case to the Northern District of Illinois and denied a cross-motion to strike filed by Defendant, Opteon Appraisal, Inc.1 Defendant has filed its objections to the order, ECF No. 38, Plaintiff has responded, ECF No. 40, and Opteon has replied, ECF No. 42. For the reasons that follow, the order is AFFIRMED and Plaintiff‘s motion to transfer venue is GRANTED.
LEGAL STANDARDS
A district court may reconsider a magistrate judge‘s resolution of a non-dispositive2 pretrial matter “where it has been shown that the [] order is clearly erroneous or contrary to law.”
“For the convenience of parties and witnesses, in the interest of justice, a district court may transfer any civil action to any other district or division where it might have been brought or to any district or division to which all parties have consented.”
(1) plaintiff‘s choice of forum, (2) convenience of the witnesses, (3) location of evidence, (4) convenience of the parties, (5) locus of the operative facts, (6) ability to compel the attendance of witnesses, (7) relative means of the parties, and (8) trial efficiency and the interests of justice.
irth Sols., LLC v. Apex Data Sols. & Servs., LLC, No. 18-CV-6884, 2019 WL 283831, at *5 (W.D.N.Y. Jan. 22, 2019). Ultimately, “[t]he moving party . . . bears the burden of showing that transfer is warranted in light of these factors.” EasyWeb Innovations, LLC v. Facebook, Inc., 888 F. Supp. 2d 342, 348 (E.D.N.Y. 2012).
DISCUSSION
The Court assumes the parties’ familiarity with the factual background of the case. To the extent that a more detailed recounting is needed, the parties are directed to Magistrate Judge Pedersen‘s summary of the facts in the Decision and Order. The Court will elaborate below as needed.3
Defendant objects to Judge Pedersen‘s reliance on an Opteon employment agreement (the “Employment Agreement“) in determining that the Northern District of Illinois was an appropriate venue. ECF No. 38 at 7-10. For the reasons below, the Court finds no clear error.
As relevant here, the Employment Agreement provides that signing employees must “irrevocably consent to the exclusive jurisdiction of the state and federal courts located in Cook County, Illinois, for the purposes of any action or proceeding relating to or arising out of . . . your employment with [Defendant].” ECF No. 21-2 at 7-8 (pdf pagination). The Employment Agreement also incorporates by reference an arbitration agreement that states any arbitration hearing “shall be held in the federal judicial district where [the employee] applied for employment or work or worked for [Defendant].” Id. at 13 (pdf pagination). To be clear, this was not Plaintiff‘s Employment Agreement—the Employment Agreement was a new one, allegedly promulgated by Defendant after Plaintiff began this action.4 ECF No. 20 at 1; ECF No. 21 ¶ 2; ECF No. 21-1 at 1. Rather, the Employment Agreement is signed by Robert L. Stevens, Jr., an employee of Defendant who worked in Colorado. Id. at 9 (pdf pagination). Stevens filed a consent form and declaration with the Court, seeking to opt in to Plaintiff‘s FLSA collective action. ECF No. 15.
In January 2024, Judge Pedersen issued a decision in which he concluded that, per the Supreme Court‘s decision in Bristol-Myers Squibb Co. v. Superior Court of California, 582 U.S. 255 (2017), the court lacked personal jurisdiction over out-of-state plaintiffs who did not work for Defendant in New York during the relevant time because they did not have sufficient connection
In deciding upon the transfer motion, Judge Pedersen relied in part on Stevens‘s Employment Agreement. ECF No. 37 at 17-20. Judge Pedersen acknowledged that the Employment Agreement, having not been signed by Plaintiff, was not a controlling forum-selection clause in the usual sense. Id. at 17-18. However, the inclusion of an Illinois venue in the Employment Agreement was nevertheless a sign that the venue was convenient for Defendant. Id. at 18-19. After all, Defendant “would not put a forum-selection provision in every employment agreement . . . unless Illinois was the best of all available forums.” Id. 17-18 (emphasis in original). In consideration of this, as well as Defendant‘s principal place of business being in Illinois and Plaintiff‘s willingness to travel to the Illinois forum to pursue his action, Judge Pedersen concluded that the convenience of the parties favored a transfer. Id. at 18-20.
Defendant argues that, in relying on the Employment Agreement, Judge Pedersen acted in error, for the following reasons: 1) the court had no jurisdiction over Stevens; 2) the terms of Stevens‘s employment were substantially different from Plaintiff‘s; 3) Judge Pedersen failed to consider the arbitration agreement; and 4) Judge Pedersen‘s reliance on the Employment Agreement improperly shifted the burden to Defendant.
The Court is not convinced by these objections. First, Defendant argues that Judge Pedersen had previously ruled that the court lacked personal jurisdiction over Stevens but, in spite
Notably, Defendant cites to no case law suggesting that the Court may consider only factual materials relating to parties over which the Court has jurisdiction or even to parties at all. See, c.f., ZPC 2000, Inc. v. SCA Grp., Inc., 86 F. Supp. 2d 274, 276 (S.D.N.Y. 2000) (“[E]ven assuming arguendo that we were to find that this [c]ourt has no personal jurisdiction over the defendants, we could still order the case to be transferred to a more convenient forum in the interests of justice under either § 1404 or § 1406.“). Plaintiff is pursuing an FLSA collective action claim which—
Regardless, Defendant‘s argument ignores how and why Judge Pedersen relied on the Employment Agreement. Judge Pedersen did not assert that the Employment Agreement was binding on Plaintiff or even enforceable. Rather, he cited to the Employment Agreement for only one purpose: to demonstrate that Defendant considered Illinois to be a convenient forum. The Court agrees with this point. There is no obvious reason for Defendant to have specified the North District of Illinois as its choice of venue in this new Employment Agreement if that location were not convenient. Judge Pedersen‘s interpretation of the Employment Agreement was a reasonable one, and—as noted above—Defendant provides nothing to suggest that relying on the Agreement was intrinsically improper. Reversal of Judge Pedersen‘s decision requires more than Defendant merely stating their disagreement with it—Defendant must point to what law Judge Pedersen erroneously applied. See Garcia, 800 F. Supp. 2d at 403. Defendant has not done so here.
Defendant further argues that Judge Pedersen erred in relying on the Employment Agreement because Stevens‘s terms of employment differed from Plaintiff‘s. Namely, Stevens contracted to receive overtime pay, whereas Plaintiff did not. ECF No. 21-2 at 2 (pdf pagination). But the exact nature of Stevens‘s employment is not the issue. Perhaps Stevens‘s employment
As to the arbitration agreement, it is true that it provides that arbitration hearings between Defendant and its employees “shall be held in the federal judicial district where [the employee] applied for employment or work or worked for [Defendant].” ECF No. 21-2 at 13 (pdf pagination). It is also true that Judge Pedersen did not cite to the terms of the arbitration agreement in coming to his decision. But it is not clear what difference the arbitration agreement makes here. That the arbitration agreement states that arbitration could occur in any district does not detract from the employment agreement having specified the Northern District of Illinois in particular. Judge Pedersen‘s point in relying upon the employment agreement was not that Illinois was the only option, but rather that the specific mention strongly suggested that it was a convenient venue for Defendant—why else would Defendant have chosen it? Given that it is unclear how the arbitration agreement would in any way alter Judge Pedersen‘s conclusion, the Court is not “left with the definite and firm conviction” that not having relied on the arbitration agreement constituted clear error. Parker, 2022 WL 4181571, *2.
Finally, Defendant argues that in, in making his analysis, Judge Pedersen improperly shifted the burden of showing the convenience or inconvenience of the venue to Defendant. ECF No. 42 at 4-5. It is not clear how Defendant came to this conclusion. Judge Pedersen stated in his decision that the burden would indeed shift to Defendant “in the face of ‘a valid forum-selection clause‘” that applied to Plaintiff. ECF No. 37 at 17. But Judge Pedersen goes on to say that the
Defendant acknowledges this but nevertheless insists that Judge Pedersen “shifted the burden on Defendant anyways” when he concluded that Defendant had put the forum-selection clause in “every employment agreement.” ECF No. 42 at 9. This, Defendant claims, was a mistake—“the only agreement before the Court was the Stevens agreement,” and so Judge Pedersen could not have concluded that all employment agreements included the clause. Id.
It is not clear how this conclusion—even assuming it was inaccurate—constitutes burden-shifting. But regardless, Plaintiff has alleged in his filed declarations that all of the employment agreements issued to Defendant‘s employees after Plaintiff began this action—including Stevens‘s—included the forum-selection clause, and the other factual materials he submitted reflect this as well. ECF No. 20 at 1; ECF No. 21 ¶ 2; ECF No. 21-1 at 1. Defendant may dispute this, but Judge Pedersen‘s choice to credit Plaintiff was based on the evidence on the record, and the Court can find no clear error in that conclusion.
II. Jurisdictional Bar
Courts in this Circuit are clear that when a plaintiff violates “a clear jurisdictional bar in filing suit in a particular forum, dismissal rather than transfer is often warranted.” Posven, C.A. v. Liberty Mut. Ins. Co., 303 F. Supp. 2d 391, 407-08 (S.D.N.Y. 2004) (citing Spar, Inc. v. Info. Res., Inc., 956 F.2d 392 (2d Cir. 1992)). This is especially true where the plaintiff knowingly chose an incorrect venue for the purposes of forum shopping or failed to exercise diligence in finding the proper forum. See Spar, 956 F.2d at 394-95 (affirming dismissal of an action where “allowing a transfer would reward plaintiffs for their lack of diligence in choosing a proper forum and thus
Here, Plaintiff‘s action faces a jurisdictional bar, in that he attempted to bring his collective FLSA action in the Western District of New York, despite Defendant being headquartered in Arizona and incorporated in Delaware. Although Plaintiff‘s claim is connected to New York from having arisen there, Judge Pedersen concluded in his January 2024 order that the court lacked personal jurisdiction over the FLSA claims of any out-of-state opt-in plaintiffs who did not work for Defendant in New York nor reside in New York during the relevant time period. See Kimble, 712 F. Supp. 3d at 382-83. Judge Pedersen, however, concluded in his present Decision and Order this did not constitute a clear jurisdictional bar warranting dismissal rather than transfer. ECF No. 37 at 10-14. Defendant objects, arguing that Plaintiff ignored a jurisdictional bar and thus the Court should dismiss. ECF No. 38 at 10-12.
The Court concurs with Judge Pedersen‘s analysis regarding jurisdictional bar. As Judge Pedersen pointed out, the presence of a jurisdictional bar does not always warrant dismissal. Rather, a jurisdictional bar counsels against transfer only when that bar is so clear as to show a plaintiff‘s lack of diligence in choosing a venue or desire to forum-shop. See Pares v. Gordon, No. 91-CV-1344, 1992 WL 296437, at *2 (S.D.N.Y. Oct. 8, 1992) (denying transfer where the chosen forum posed a jurisdictional problem that was “easy to detect and just as easy to rectify“). Here, Plaintiff‘s mistake is not nearly so obvious. Prior to Judge Pedersen‘s ruling on the subject, it was not clear that the court lacked personal jurisdiction over the FLSA claims of out-of-state plaintiffs in a collective action—both parties conceded that the Second Circuit had not (and still has not) issued a decision on that question. ECF No. 37 at 11. Judge Pedersen‘s decision on
Defendant here argues that because Plaintiff was “well aware of an obvious circuit split,” the jurisdictional bar was clear and dismissal is justified.5 ECF No. 38 at 11. But this argument has things backwards. Plaintiff might have been aware of the circuit split, but the lack of consensus among courts meant that any answer to the question of personal jurisdiction was less clear, not more. Indeed, other courts in this Circuit had, prior to Plaintiff filing this action, found that they had personal jurisdiction over out-of-state members of a FLSA collection action. See, e.g., Meo v. Lane Bryant, Inc., No. CV 18-6360, 2019 WL 5157024, at *12 (E.D.N.Y. Sept. 30, 2019) (declining deny certification to non-resident opt-in FLSA plaintiffs because “Congress intended for nationwide FLSA collective actions” and demanding that opt-in residents demonstrate sufficient connections between their claims and the forum would “countermand that purpose“). Given the absence of clarity from the courts, Plaintiff‘s decision to file in New York seem more like a risky but understandable gamble than an unreasonable attempt at forum shopping. Accordingly, and in light of the broad deference the Court owes to Judge Pedersen‘s assessment, the Court finds there was no clear error in his conclusion that the jurisdictional bar was not clear.
III. Factors Favoring Transfer
Defendant argues that Judge Pedersen erred in concluding that the relevant Section 1404(a) factors favored transfer. The Court will address each factor to which Defendant objects and Judge Pedersen‘s analysis below.
A plaintiff‘s choice of forum ordinarily should not be disturbed unless the balance of convenience and justice “tips heavily in favor of transfer.” Izkhakov v. Educ. Comm‘n for Foreign Med. Graduates, No. 12-CV-348, 2012 WL 2861338, at *3 (S.D.N.Y. July 10, 2012). But while great deference is due to a plaintiff‘s first choice of forum, this is not the case for a second choice of forum. See Bausch & Lomb Inc. v. ZeaVision LLC, No. 20-CV-6452, 2022 WL 3927883, at *4 (W.D.N.Y. Aug. 31, 2022) (“[W]here a plaintiff‘s first choice of venue is found to be indisputably improper, a plaintiff‘s second choice of venue should not be accorded much weight.“). “When a plaintiff chooses a forum other than her home forum . . . the court must consider the reasons for the plaintiff‘s decision.” Flood v. Carlson Restaurants Inc., 94 F. Supp. 3d 572, 576 (S.D.N.Y. 2015). “[T]he more such a decision is dictated by reasons that the law recognizes as valid, the greater the deference that will be given to it; the more it appears the decision is motivated by forum shopping reasons, the less deference will be accorded to it.” Hershman v. UnumProvident Corp., 658 F. Supp. 2d 598, 601 (S.D.N.Y. 2009) (internal quotation marks omitted).
Judge Pedersen concluded that, given that Plaintiff requested the transfer, the usual deference given to Plaintiff‘s choice of forum was not warranted and Plaintiff‘s choice of forum favored neither party. ECF No. 37 at 25. The Court agrees. Defendant argues briefly that Plaintiff‘s original choice of forum should control and that Plaintiff failed to demonstrate why that choice should be disturbed. ECF No. 38 at 13-14. Things are not so clear-cut from the Court‘s perspective. While it is true that typically the Court would defer to Plaintiff‘s first choice, “[t]he usual presumptions as to a plaintiff[‘]s choice of forum are not appropriate” when a plaintiff himself moves to transfer. United States ex rel. Fisher v. Bank of Am., N.A., 204 F. Supp. 3d 618, 623 (S.D.N.Y. 2016) (internal quotation marks omitted). Plaintiff is seeking to transfer away from
b. Convenience of Witnesses
Convenience of the witnesses is generally considered the most important factor in a Court‘s determination of the appropriateness of a venue transfer. Hart v. Crab Addison, Inc., No. 13-CV-6458, 2014 WL 2865899, at *3 (W.D.N.Y. June 24, 2014); Viacom Int‘l, Inc. v. Melvin Simon Prods., Inc., 774 F. Supp. 858, 868 (S.D.N.Y. 1991) (“Courts routinely transfer cases when the principal events occurred, and the principal witnesses are located, in another district.“). Where parties each contend that convenience favors one side over the other, “[a] [c]ourt ‘does not merely tally the number of witnesses who reside in the [proposed] forum in comparison to the number located in [an alternative] forum‘; but rather ‘must qualitatively evaluate [] the testimony that the witnesses may provide.‘” Dickerson v. Novartis Corp. & Alcon Labs., Inc., 315 F.R.D. 18, 27 (S.D.N.Y. 2016) (quoting Herbert v. Elec. Arts, Inc., 325 F. Supp. 2d 282, 286 (S.D.N.Y. 2004)).
Judge Pedersen concluded that this factor favored transfer, to which Defendant objects. ECF No. 37 at 20-22. Defendant‘s argument largely concerns Judge Pedersen‘s previously-mentioned reliance on the Employment Agreement‘s forum-selection clause, asserting that “but for the forum selection clause the [c]ourt would have not held in [Plaintiff‘s] favor on this factor.”
c. Availability of Compulsory Process
“The availability of process to compel the testimony of important witnesses is an important consideration in transfer motions.” Billing v. Commerce One, Inc., 186 F. Supp. 2d 375, 378 (S.D.N.Y. 2002) (internal quotation marks omitted). Per
Judge Pedersen concluded that this factor favored transfer, owing to the fact that the potential witnesses were Defendant‘s employees and could thus be compelled by Defendant to testify in the North District of Illinois if needed. ECF No. 37 at 28. Defendant briefly objects that this analysis erred by focusing solely on Defendant‘s ability to compel process on Defendant‘s
As to Defendant‘s argument about Judge Pedersen‘s failure to account for the difficulty of compelling out-of-state plaintiffs, the compulsory process factor is “generally relevant only with respect to third party witnesses,” given that parties have a presumed interest in the proceedings of a case. Race Safe Sys., Inc. v. Indy Racing League, 251 F. Supp. 2d 1106, 1111 (N.D.N.Y. 2003). Defendant offers no caselaw to suggest that it was an error for Judge Pedersen to not address the ability to compel out-of-state plaintiffs. At any rate, neither party here suggests that their witnesses would be unwilling to testify, and so this factor is of limited importance to the overall transfer analysis. See Flood, 94 F. Supp. 3d at 580 (where there is no indication that witnesses would be unwilling to testify, “the availability of process factor is of reduced value in the transfer analysis“). At worst, this factor might be neutral, given that witnesses are likely to be spread across multiple states. See irth Sols., 2019 WL 283831, at *5 (“[S]ince witnesses are located across several states, the ability to compel their attendance is neutral.“); Martignago, 2012 WL 112246, at *8 (holding that in a collective action case where “there are likely to be witnesses from all over the United States . . . the availability of process is a neutral factor“). But because Defendant has provided nothing that clearly demonstrates error in Judge Pedersen‘s conclusion, or that this factor would
d. Interest of Justice
With respect to the interests of justice factor, Judge Pedersen found it favored Plaintiff because litigation was still in its early stages, the case had minimal connections to New York, and preventing Plaintiff from pursuing his action would contravene the purpose of FLSA collective actions and potentially lead to duplicative litigation. ECF No. 27 at 29-31. The Court finds no clear error in this analysis.
As Judge Pedersen notes, whether a transfer is in the interest of justice is “based on the totality of the circumstances” and “relates primarily to issues of judicial economy.” Travelers Prop. Cas. Co. of Am. v. Ocean Reef Charters LLC, 324 F. Supp. 3d 366, 385 (W.D.N.Y. 2018) (internal quotation marks omitted). Judicial economy typically favors transfer when litigation “remains in its early stages . . . and discovery has not begun.” Nova Nordeplast Industria E Comercio De Plasticos LTDA. v. JP Morgan Chase & Co., No. 23-CV-3429, 2024 WL 1346535, at *8 (E.D.N.Y. Mar. 29, 2024); see also Starr Indem. & Liab. Co. v. Brightstar Corp., 324 F. Supp. 3d 421, 441 (S.D.N.Y. 2018) (“When a case is in its earliest stages, it is generally not inefficient to transfer the case.“). Here, the parties are indeed in that early stage, without any significant discovery having taken place. See ECF No. 18 (Case Management Order). Defendant furthermore does not dispute that the case‘s connections to New York are minimal and that adjudication here could delay the cases brought by other parties. See Travelers, 324 F. Supp. 3d at 385 (finding that retaining a case “with only minimal contacts to New York” would “not serve the interest of justice“).6
Defendant‘s objections are primarily concerned with Plaintiff‘s conduct in bringing the case in New York despite “being on notice of the jurisdictional issue,” which forced Defendant to “litigate needlessly, engage in discovery, and respond to motions” in this Court. ECF No. 38 at 16-17. This inconvenience to Defendant, it argues, weighs heavily against transfer given that Plaintiff could have simply filed in Illinois in the first place. Id. However, as noted above, the Court does not agree that the jurisdictional issue posed by Bristol-Myers was as clear as Defendant suggests. A genuine circuit split exists on the subject, see Kimble, 712 F. Supp. 3d at 387-88, and the Court does not agree that Plaintiff attempting to pursue litigation here on the basis of that unclear caselaw is a serious mark against him for this analysis. At the very least, Defendant offers no authority to suggest that litigation and motion practice, when concerning a point of law where there exists serious disagreement, constitutes a breach of judicial efficiency. Defendant may be annoyed at having had to brief the question of jurisdiction in this case, but that annoyance is not sufficient grounds to find the interest of justice weighed against transfer. The Court finds no clear error as to Judge Pedersen conclusion as to the interest of justice.7
For the foregoing reasons, the Court OVERRULES Defendant‘s objections and AFFIRMS Magistrate Judge Pedersen‘s Decision and Order, ECF No. 37. The Clerk of Court is directed to TRANSFER this matter to the Northern District of Illinois and close the case.
IT IS SO ORDERED.
Dated: May 28, 2025
Rochester, New York
HON. FRANK P. GERACI, JR.
United States District Judge
Western District of New York