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Hicks v. T.L. Cannon Management Corp.

United States District Court, Second Circuit

August 23, 2013

ASHLEY HICKS and KRISTIN RAYMOND, on behalf of themselves and all other employees similarly situated, Plaintiffs.
v.
T.L. CANNON MANAGEMENT CORP., et al., Defendants.

DECISION and ORDER

THOMAS J. McAVOY, Senior District Judge.

I. INTRODUCTION

Plaintiffs, Ashley Hicks and Kristin Raymond (collectively, "Plaintiffs"), bring this action on behalf of themselves and all other employees similarly situated for violations of the Fair Labor Standards Act of 1938, as amended, 29 U.S.C. § 201 et seq. ("FLSA"), and the Minimum Wage Act of the New York Labor Law ("NYLL"), Art. 19 § 650 et seq., against T.L. Cannon Corp., d/b/a Applebee's or Applebee's Bar and Grill, as well as several of its corporate and individual affiliates, and individual owners and officers of the defendant organizations (collectively, "Defendants"). Defendants own and operate fiftyfour Applebee's Neighborhood Grill and Bar Restaurants ("Applebee's") located throughout New York State. Plaintiffs claims concern tipped employees who assert that they were paid tipped wages below the minimum wage even though they spent more than 20% of their time working on non-tipped job duties.

Presently before the Court is Plaintiffs' motion for reconsideration of the June 4, 2013 Decision and Order of the Hon. Michael A. Telesca, United States District Judge for the Western District of New York, that transferred this action to this Court pursuant to 28 U.S.C. § 1404 (a), or, in the alternative, to transfer the matter back to the Western District of New York pursuant to 28 U.S.C. § 1404(a). See Pls. Mot., dkt. # 95. Defendants oppose the motion, Plaintiffs filed a reply, and the parties presented oral arguments on August 23, 2013.

Upon consideration of the parties' written and oral arguments, and upon examination of the merits, the Court grants Plaintiffs' motion and transfers the matter to the Western District of New York pursuant to 28 U.S.C. § 1404(a).

II. BACKGROUND

Plaintiffs commenced this action in the Western District of New York on September 24, 2012. See Compl. dkt. # 1. An amended complaint was filed on April 10, 2013. See Am. Compl. dkt. # 82. Although neither a FLSA conditional class nor a Rule 23 class action has been certified, 452 employees working at Defendants' various restaurants located throughout New York State have signed consent forms to become party plaintiffs in this action.

a. Original Transfer Motion

On June 4, 2013, Judge Telesca granted Defendants' motion to transfer this matter to this District pursuant to 28 U.S.C. §1404 (a). See Transfer Dec. & Order, dkt. no. 93. Familiarity with this Decision and Order is presumed. For present purposes, it suffices to say that the transfer decision was based in large measure on what was seen as an interrelationship between this case and the potential class claims in Roach, et al. v. T.L. Cannon Corp., et al., Case No. 10-cv-00591 (N.D.N.Y)(" Roach "). See e.g. Transfer Dec. & Order, pp. 4-5;[1] 11;[2] 11-12;[3] 12;[4] and 13-14.[5]

b. Roach

Because the operative decision in this matter turns on this case's relationship to the claims in Roach, some background of Roach is in order.

Plaintiffs Matthew Roach, Melissa Longo, Garrett Titchen, and Christina Apple, four former Applebees employees, commenced an action against T.L. Cannon Corp., as well as several of its corporate and individual affiliates, that collectively own and operate sixtyone Applebee's Neighborhood Grill and Bar Restaurants located throughout New York and portions of Connecticut. In their Amended Complaint, the Roach plaintiffs assert violations of the FLSA and the NYLL arising from the alleged existence of systemic, companywide policies and practices in place at Defendants' Appelebee's restaurants, resulting in violations of the FLSA and NYLL, and estimated to have affected thousands of current and former Applebee's employees. Shortly after commencing the action, Plaintiffs moved for leave to pursue a collective action for purposes of their FLSA claim, and for Fed.R.Civ.P. 23 class certification with respect to their NYLL claims. That motion resulted in a partial approval of Plaintiffs' request to pursue their FLSA claim as a collective action, limited to the Applebee's Front Street, Binghamton, New York restaurant. The remaining portions of the motion, however, were denied without prejudice to renewal following discovery.

Plaintiffs' renewed their motion for companywide collective action FLSA certification and Rule 23 class certification with regard to the NYLL claims. Roach, dkt. no. 91. The renewed motion was referred to the Hon. David E. Peebles, United States Magistrate Judge. In a Report, Recommendation, and Order dated March 5, 2013, Magistrate Judge Peebles ordered that a FLSA collective action be conditionally certified, and recommended that certain NYLL claims be certified as class action claims pursuant to Rule 23 of the Federal Rules of Civil Procedure. See Roach Rep. Rec. & Ord., dkt. no. 109.

In considering objections to Magistrate Judge Peebles' recommendations concerning the NYLL claims, the Court denied Rule 23 class certification of any NYLL claim.[6] See Roach 03/29/13 Dec. & Ord., pp. 4-11, dkt. no. 114.[7] Plaintiffs have appealed this decision. See Roach, dkt. no. 122 (Certified Order of the United States Court of Appeals for the Second Circuit granting leave to appeal the order denying Plaintiffs' motion for class certification); Fed.R.Civ.P. 23(f)(allowing interlocutory appeals from decision granting or denying Rule 23 class-action certification, and providing that such an appeal "does not stay proceedings in the district court unless the district judge or the court of appeals so orders.").

In considering the appeal from Magistrate Judge Peebles' FLSA collective action certification decision, this Court affirmed the decision but limited the scope of the FLSA collective action class to "defendants' employees... who were not paid regular and/or overtime compensation for all the hours to which they were entitled when the employees worked through their scheduled breaks." Roach, 08/19/13 Dec. & Ord., p. 9. This class includes employees who worked in "front of house" and "back of house" positions. Id.

III. DISCUSSION

As indicated, Plaintiffs' move for reconsideration of Judge Telesca's Decision to transfer this matter to this Court, or, in the alternative, to transfer the matter back to the Western District of New York pursuant to 28 U.S.C. § 1404(a). Under the doctrine of comity, respect for the decisional law of a sister court, and the necessity of accepting the law of the case, this Court will not reconsider Judge Telesca's decision, but instead will analyze whether, under the facts as they exist at this time, the matter should be transferred backed to the Western District of New York pursuant to 28 U.S.C. § 1404(a). See In re Cragar Industries, Inc., 706 F.2d 503, 505 (5th Cir. 1983)("Certainly, the decision of a transferor court should not be reviewed again by the transferee court. Such an independent review would implicate those concerns which underlie the rule of repose and decisional order we term the law of the case.... It does not follow, however, that a transferee court is powerless to act where the original purposes of the transfer have been frustrated by an unforeseen later event. When such unanticipatable post-transfer events frustrate the original purpose for transfer, a return of the case to the original transferor court does not foul the rule of the case nor place the transferee court in a position of reviewing the decision of its sister court. It, instead, represents a considered decision that the case then is better tried in the original forum for reasons which became known after the original transfer order.")(emphasis in original; citations omitted); 15 C. Wright, A. Miller & E. Cooper, Federal Practice & Procedure § 3846 (3d ed.)("[T]ransferee courts have expressed a strong reluctance to review a transfer order indirectly by means of a motion to retransfer.... A motion to retransfer is perfectly appropriate, however, on a showing of changed circumstances, particularly when they frustrate the purpose of the change of venue.").

Because Judge Telesca applied the proper standard in addressing the original § 1404(a) motion, the Court will apply the same standard to the instant motion. There is no dispute that this action was properly brought in the Western District of New York in the first instance, so Plaintiffs have satisfied the threshold issue on this motion. See 28 U.S.C. § 1404(a). The Court next proceeds to consider the N.Y. Marine factors. See N.Y. Marine and Gen. Ins. Co. v. Lafarge N. Am., 599 F.3d 102, 112 (2d Cir. 2010). Plaintiffs must show by clear and convincing evidence that these factors favor the transfer. Id. at 113-114; see also Aznet Comm., Inc. v. Digital P'ships, Inc., No. 89-7658, 1990 U.S. Dist. LEXIS 3527, at *1 (S.D.N.Y. Apr. 2, 1990)("The moving party bears the burden to show by clear and convincing evidence that retransfer is appropriate.").

(1) Plaintiffs' Choice of Forum

As to Plaintiffs' choice of forum, this Court agrees with Judge Telesca that "[a]lthough a plaintiff's choice of forum is generally entitled to substantial deference in the transfer analysis, in class actions, the plaintiff's choice of forum is a less significant consideration." Transfer Dec. & Order, p. 9 (and cases cited thereat). This Court finds, as did Judge Telesca, that "because Plaintiffs purport to represent a putative class of similarly situated employees located all across the State of New York, ... Plaintiffs' choice of forum is entitled to some weight, but not substantial deference." Id. p. 10.

(2) The Convenience of the Witnesses

The situation, as it presently exists with the Roach case, dramatically changes the calculus in analyzing the convenience of the witnesses. Since the parties briefed the transfer motion for Judge Telesca, this Court denied Rule 23 class certification for all NYLL claims in Roach, and limited the FLSA collective action to Defendants' employees who were not paid regular and/or overtime compensation for all the hours to which they were entitled when the employees worked through their scheduled breaks. This "break period" class includes employees who worked in "front of house" and "back of house" positions, some of whom presumably were not paid tipped wages. By contrast, this case involves NYLL and FLSA claims by tipped employees. Thus, there is presently little similarity between the claims in the two actions.[8]

Defendants have not presented a compelling argument that there will be a substantial overlap of witnesses in these two actions. While Defendants' management employees will be called to testify, Defendants' corporate offices are located in the Western District of New York, and the 54 relevant Applebee's are located throughout New York with a significant number in the Western District of New York. Further, Plaintiffs contend that the majority of the witnesses thus far identified in this case are located in the Western District of New York, and that Defendants have selected a sample of 12 Plaintiffs (2 named plaintiffs and 10 opt-in plaintiffs) for discovery, 7 of whom live and worked for Defendants at locations in the Western District of New York. Plaintiffs assert that these 12 Plaintiffs worked in 11 of Defendants' restaurants, 8 of which are located in the Western District of New York. Moreover, Plaintiffs point out that counsel for both parties are located in the Western District of New York, and that depositions in this action have been noticed to take place in Defendants' counsel's offices in the Western District of New York (where the Roach depositions occurred).

The Court finds that the convenience of the witnesses weighs strongly in favor of transfer to the Western District of New York.

(3) The Location of Relevant Documents

As to the location of relevant documents, the Court agrees with Judge Telesca that this factor neither supports nor opposes transfer because the majority of the documents at issue in this case are located at the 54 different Applebee's restaurants relevant to the case and which are located throughout the State of New York.

(4) The Convenience of Parties

Just as with the convenience of the witnesses, the calculus analyzing the convenience of the parties has been altered by the developments in Roach. As indicated, the only currently existing class claim in Roach is a FLSA break period claim that includes "back of house" employees who, presumably, are not paid tipped wages. Plaintiffs assert that, at present, there are no similar plaintiffs or opt-in plaintiffs in the two actions.[9] The Court does not discount the possibility that, in the future, there may be some overlap in the FLSA class plaintiffs in the two actions, but the overlap will be of minor significance because the plaintiffs in each action will be litigating diverse claims (break pay claims versus tipped wage claims), and because the Roach FLSA class includes "back of house" employees who, presumably, were not paid tipped wages. Moreover, Plaintiffs assert that of the current 452 plaintiffs in this action (2 named plaintiffs and 450 opt-in plaintiffs), more of these individuals worked for Defendants in the Western District of New York than in any other district, including the Northern District of New York.

Although not a ringing endorsement that the Western District of New York is the most convenient venue for the parties, the fact that more current plaintiffs have worked in the Western District of New York than any other New York district, and that Defendants' corporate offices are located in the Western District of New York, tips this factor in favor of transfer.

(5) The Locus of Operative Facts

The Court agrees with Judge Telesca that "there is no single locus of operative facts in this action. Plaintiffs purport to represent hundreds of tipped employees who worked in different restaurant throughout the state of New York - both in [the W.D.N.Y.] and in the N.D.N.Y." Transfer Dec. & Ord., p. 11. Accordingly, the Court finds this factor is neutral.

(6) The Availability of Compulsory Process

The Court also agrees with Judge Telesca that the availability of compulsory process factor neither supports nor opposes transfer. Id. Neither party has named any witness whom they could not obtain by virtue of litigating in the Western District of New York.

(7) The Relative Means of the Parties

As to the relative means of the parties, the Court agrees with Judge Telesca that because Plaintiffs and their counsel seek to represent hundreds of tipped employees who work throughout the State of New York, the relative means of the parties does not weigh in favor of or against transfer.

(8) Balancing the Factors

In balancing these factors, the Court finds that they tip in favor of transfer of the case back to the Western District of New York. Plaintiffs' choice of forum in the Western District of New York is entitled to some weight, but not substantial deference; the convenience of the witnesses weighs strongly in favor of transfer to the Western District of New York; the convenience of the parties tips in favor of transfer; and the remaining factors are neutral. None of the neutral factors outweighs Plaintiffs' choice of forum in the Western District of New York, and the factors examining the convenience of the witnesses and parties weighing in favor of transfer tips the balance in Plaintiffs' favor.

Moreover, because of the recent developments in Roach, there is little overlap between this case and Roach. Thus, the primary factor driving the original transfer decision no longer exists. Further, because Roach, which has been pending for over three years, has proceeded much further than the instant case in terms of discovery and motion practice, the Court does not find that the interests of justice and judicial efficiency are advanced by maintaining this action in this District. Likewise, because this case is in its infancy and because there has been no appreciable delay caused by the transfer and retransfer of the case, the Court does not find that the parties' or the public's interests have been prejudiced by the transfers. See HAB Carriers, Inc. v. Arrow Truck Sales, Inc., 2009 WL 2589108, at *1 (D.N.J. Aug. 21, 2009)("In determining whether a case should be retransferred, some courts have also considered whether a transfer would prejudice the parties involved as well as the private and public interests implicated by a transfer of venue.")(citations omitted). Rather, the Court finds that Plaintiffs have established by clear and convincing evidence that retransfer of this action to the Western District of New York is warranted pursuant to 28 U.S.C. § 1404(a).

IV. CONCLUSION

For the reasons set forth above, Plaintiffs' motion for reconsideration of the June 4, 2013 Decision and Order of the Hon. Michael A. Telesca, United States District Judge for the Western District of New York, that transferred this action to this Court pursuant to 28 U.S.C. § 1404 (a), or, in the alternative, to transfer the matter back to the Western District of New York pursuant to 28 U.S.C. § 1404(a) [dkt. no. 48], is GRANTED IN PART and DENIED IN PART. The motion is denied inasmuch as it asks this Court to reconsider Judge Telesca's Decision and Order, and granted inasmuch as it asks to transfer this matter back to the Western District of New York.

The Clerk of the Court is directed to transfer this case to the Western District of New York.

SO ORDERED.


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