United States District Court, W.D. New York
J. Nelson Thomas, Esq., Jared Kimball Cook, Esq., Michael J. Lingle, Esq., Justin M. Cordello, Esq., Thomas & Solomon LLP, Rochester, NY, for Plaintiff.
Jeffrey Howard Ruzal, Esq., Kenneth John Kelly, Esq., Epstein, Becker & Green, P.C., New York, NY, for Defendants.
DECISION AND ORDER
CHARLES J. SIRAGUSA, District Judge.
Now before the Court are Defendants' motions to dismiss the Complaint for failure to state a claim, or, in the alternative, to transfer venue. (Docket Nos. [#23][#30][#43][#50]). The request to transfer venue is denied. The application to dismiss is granted as to the FLSA minimum wage claim, and Plaintiffs are granted leave to re-plead. Otherwise, Defendants' motions are denied.
Unless otherwise noted, the following facts are taken from the Complaint [#1], and are presumed to be true for purposes of this Decision and Order. Defendant Crab Addison, Inc. ("Crab Addison") is a wholly-owned subsidiary of Ignite Restaurant Group, Inc. ("Ignite"), which is a Delaware corporation with its principal place of business in Houston, Texas. Ignite owns and operates more than 135 "Joe's Crab Shack" restaurants in thirty-two states,  including New York, Maryland, Missouri, Illinois and Arizona. During the relevant three-year period at issue in this action, Ignite employed 29, 945 employees, though it is unclear how many of those employees worked in the five states involved in this action (New York, Maryland, Missouri, Illinois and Arizona).
Virtually all of Ignite's corporate infrastructure, including "finance and accounting, marketing, business development/publicity, operations, information technology, purchasing, human resources and legal, " is located in Houston. Ignite does not maintain regional offices. Ignite's "principal personnel and payroll records" are kept in Houston. In that regard, while each restaurant manager maintains documentation pertaining to his employees, other "information and documents regarding compensation of current and former employees, including payroll, hours worked, and tip credits[, ] are consolidated, recorded and maintained in Houston." Ignite's CEO, defendant Raymond Blanchette ("Blanchette"), and Ignite's Senior Vice President of Human Resources, defendant Rodney Morris ("Morris"), both live in Houston and maintain their offices there. Morris's predecessor, defendant Kevin Cottingim ("Cottingim"), is retired from Ignite and resides in Florida.
The six named Plaintiffs are Christopher Hart ("Hart"), Jeffrey Beyer ("Beyer"), Maria Sargent ("Sargent"), Taylor Ramsey ("Ramsey"), Andrea Randlett ("Randlett") and Shelly Carrera ("Carrera"). When this action was commenced, Hart and Beyer resided in New York; Ramsey and Carrera resided in Illinois; and Sargent and Randlett resided, respectively, in Maryland and Arizona. All six of the Plaintiffs previously worked at Joe's Crab Shack restaurant locations. At all relevant times, Hart and Beyer worked at the restaurant in Henrietta, New York, as servers; Ramsey worked in Branson, Missouri, as a hostess; Sargent worked in Greenbelt, Maryland, as a server; Randlett worked in Tempe, Arizona, as a server; and Carrera worked in Fairview Heights, Illinois, as a server and bartender.
On August 28, 2013, Plaintiffs commenced this action. The Complaint purports to assert claims under the Fair Labor Standards Act ("FLSA"), 29 U.S.C. § 201 et seq., and under the state minimum-wage laws of New York, Maryland, Missouri, Illinois and Arizona. The action is styled as a proposed class action, with five subclasses for the state minimumwage claims. The Complaint maintains that Defendants paid Plaintiffs less than the required minimum wage, in the following respects:
Defendants' policy is not to pay Plaintiffs the legally required minimum wage even though the Plaintiffs [were] performing jobs unrelated to their tipped job[s]. Defendants' policy [was] also to not pay Plaintiffs the legally required minimum wage even though the Plaintiffs [were] spending more than 20% of their time on jobs that [were] related to, but not themselves, tipped jobs. Specifically, Defendants' policy [was] to utilize the Named Plaintiffs and similarly situated employees to perform "back of the house" duties and other jobs that [were] not tipped jobs.
Complaint [#1] at ¶ ¶ 126-128. The Complaint further alleges that Defendants violated the FLSA by failing to provide Plaintiffs with notice regarding the minimum wage "tip credit." Id. at ¶ 129. Finally, the Complaint asserts similar claims under the minimum-wage laws of New York, Maryland, Missouri, Illinois and Arizona.
There are presently 46 plaintiffs in this action, consisting of six named Plaintiffs and forty "opt-in" Plaintiffs. These Plaintiffs reside in fourteen different states. More specifically, the states in which the Plaintiffs reside, and the number of Plaintiffs residing in those states, is as follows: New York 11; Florida 10; New Jersey 5; Virginia 3; Illinois 3: Arizona 3; Texas 3; Maryland 2; Massachusetts 1; Michigan 1; Pennsylvania 1; Iowa 1; Indiana 1; and Utah 1.
In lieu of answering the Complaint, Defendants filed the subject motions to dismiss,  or, in the alternative, to transfer venue to the U.S. District Court for the Southern District of Texas.
On February 26, 2014, counsel for the parties appeared before the undersigned for oral argument.
Where district courts are presented with both a motion to dismiss, under Fed.R.Civ.P. 12(b)(6), and a motion to transfer venue, under 28 U.S.C. § 1404(a), they commonly address the venue motion first, and, where transfer is appropriate, leave the motion to dismiss to be decided by the transferee court. See, e.g., Hafstad v. Hornick, Civ. A. No. 86-2811, 1987 WL 10871 at *3 (D.D.C. May 6, 1987) ("[I]t is fitting to leave all decisions on the merits to [the transferee] court, rather than to tie that court's hands with substantive decisions made in this jurisdiction."); Brown v. New York, 947 F.Supp.2d 317, 326 (E.D.N.Y. 2013) ("As the Court finds that transfer is appropriate, it defers decision on the Defendants' motion to dismiss for failure to state a claim to allow the transferee court an opportunity to consider the merits of the case."); Lyon v. Cornell University, No. 97 Civ. 7070(JGK), 1998 WL 226193 at *2 (S.D.N.Y. May 4, 1998) ("It is appropriate for the transferee court to consider the merits of a motion for summary judgment. That Court should decide the critical issues on that motion, including whether there are any disputed issues of material fact. The defendant's motion is critical to the disposition of this case. The transferee court in the Northern District should rule on the motion in the first instance.") (citations omitted). Accordingly, although Defendants asked the Court to consider the venue transfer motion only in the event that their motion to dismiss was denied, the Court will consider the venue motion before the motion to dismiss.
Motion to Transfer Venue
Defendants maintain that the Court should transfer venue of this action to the United States District Court for the Southern District of Texas, pursuant to 28 U.S.C. § 1404(a), which states: "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." "The threshold question in deciding a § 1404(a) motion is whether venue would be proper in the transferee forum." Lewis v. C.R.I., Inc., No. 03 Civ. 651(MBM), 2003 WL 1900859 at *2 (S.D.N.Y. Apr. 17, 2003) (citations omitted). If so,
[a] district court may exercise its discretion to transfer venue "for the convenience of parties and witnesses, in the interest of justice." 28 U.S.C. § 1404(a). Among the factors to be considered in determining whether to grant a motion to transfer venue are, inter alia: (1) the plaintiff's choice of forum, (2) the convenience of witnesses, (3) the location of relevant documents and relative ease of access to sources of proof, (4) the convenience of parties, (5) the locus of operative facts, (6) the availability of process to compel the attendance of unwilling witnesses, and (7) the relative means of the parties.
New York Marine and General Ins. Co. v. Lafarge North America, Inc., 599 F.3d 102, 112 (2d Cir. 2010) (citation and internal quotation marks omitted). In addition to those factors, many district courts consider additional factors, such as "a forum's familiarity with the governing law" and "trial efficiency and the interests of justice." See, e.g., Lewis v. C.R.I., Inc., 2003 WL 1900859 at *2. The party requesting the transfer has the "burden of making out a strong case for transfer, " by clear and convincing evidence. New York Marine and General Ins. Co. v. Lafarge North America, Inc., 599 F.3d at 114 (citations omitted).
In the instant case, the parties do not dispute that the action could have been filed in the proposed transferee court. Accordingly, the Court will proceed to consider the convenience factors set forth above. In that regard, Defendants admit that three of the factors - the relative means of the parties, the forum's familiarity with the law and the availability of process to compel attendance of witnesses, do not weigh in favor of transfer. Accordingly, the Court will only consider the remaining factors.
The Convenience of Witnesses
This factor is generally considered the most important in deciding whether to transfer venue under § 1404(a). See, Truk International Fund, LP v. Wehlmann, No. 08 Civ. 8462(PGG), 2009 WL 1456650 at *3 (S.D.N.Y. May 20, 2009) ("The convenience of the witnesses is generally considered the most important factor in deciding a motion to transfer venue. Moreover, the convenience of non-party witnesses is accorded more weight than that of party witnesses.") (citations and internal quotation marks omitted). Generally, to sustain its burden, "the moving party submits an affidavit explaining why the transferee forum is more convenient, which includes the potential principal witnesses expected to be called and the substance of their testimony." EasyWeb Innovations, LLC v. Facebook, Inc., 888 F.Supp.2d 342, 350 (E.D.N.Y. 2012) (citations and internal quotation marks omitted).
Defendants contend that this factor weighs in favor of transfer, since, under Plaintiffs' theory of liability, the focus of the proof will be on Defendant's "human resources employees, most of [whom are] located in Houston." In that regard, Defendants indicate that the witnesses are likely to be the named Defendants, as well as unnamed "employees who were involved in the alleged policies, procedures and human resources matters at issue." Plaintiff responds that this factor weighs against transfer, since "the vast majority of relevant witnesses are located outside of [Texas], " including many witnesses in this District. Plaintiffs also indicate that any inconvenience to Defendants' employees will be minimal in any event, since they will be deposed in Texas. Considering all of the foregoing, Defendants have not made a strong showing that this factor weighs in favor of transfer.
The Convenience of the Parties
"As to whether the convenience of the parties favors transfer, the Court first looks to the residence of the parties, and then ensures an order of transfer would not simply switch the burden of inconvenience from one party to another." Novel v. Lowe, No. 1:12-CV-01447 (MAD/RFT), 2013 WL 3206977 at *7 (N.D.N.Y. Jun. 24, 2013) (citation omitted). Ordinarily, in considering the effect that a transfer would have on the convenience of the plaintiffs in a proposed class action, the proper focus in on the residences of named plaintiffs. However, the Second Circuit has, on at least one occasion, also considered the residences of "putative class members." See, In re Warrick, 70 F.3d at 741, n. 7 (Though in the context of considering the weight to accord to the Plaintiff's choice of forum).
Defendants maintain that this factor favors transfer, since their key employees are located in Texas, and litigation in New York will disrupt Ignite's business. However, Plaintiffs contend that this factor weighs against transfer, since "the vast majority of [the] parties are... located outside of Texas, " and "more of th[o]se parties reside in New York than in any other state." It appears that transferring venue from this District to Texas would merely shift the burden of ...