Judd v. Keypoint Government Solutions Incorporated

Filing 24

ORDER that Defendant's 9 Motion is granted in part as to transfer of venue, and denied in part without prejudice as to dismissal for failure to state a claim. IT IS FURTHER ORDERED that Clerk of Court transfer this matter to the United States District Court for the District of Colorado and terminate the case in the District of Arizona. Signed by Judge Steven P Logan on 2/8/2018. (ATD)

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1 WO 2 3 4 5 6 IN THE UNITED STATES DISTRICT COURT 7 FOR THE DISTRICT OF ARIZONA 8 9 10 11 12 13 14 ) ) ) Plaintiff, ) ) vs. ) ) KeyPoint Government Solutions, Inc., ) ) ) Defendant. ) ) Orson Judd, No. CV-17-08050-PHX-SPL ORDER 15 Before the Court is Defendant’s Motion to Transfer Venue, or in the Alternative, 16 Dismiss for Failure to State a Claim and for a Stay of Litigation. (Doc. 9.) The Court has 17 already addressed Defendant’s Motion to Stay. (Doc. 14.) Also pending before the Court 18 is Plaintiff’s Motion for Conditional Certification. (Doc. 11.) The motions are ready for 19 resolution. 20 I. Background 21 Plaintiff Orson Judd brings this action against Defendant KeyPoint Government 22 Solutions, Inc. (“KeyPoint”) for alleged violations of the Fair Labor Standards Act 23 (“FLSA”). Defendant KeyPoint is incorporated in Delaware, and maintains its corporate 24 headquarters and principal place of business in Loveland, Colorado. (Doc. 1 at 6; Doc. 9 25 at 3.) Defendant provides “security-clearance background investigations and screening 26 services to the United States Government.” (Doc. 1 at 7.) Plaintiff Judd lives in Arizona 27 and worked for Defendant as an investigator from June of 2008 until September of 2014. 28 (Doc. 1 at 5.) Plaintiff alleges that Defendant misclassified numerous investigators as 1 independent contractors, rather than as employees, in violation of the FLSA. (Doc. 1 at 2- 2 3.) In spite of classification differences, Plaintiff argues that all investigators “perform the 3 same basic job: interviewing subjects, conducting public records searches, interviewing 4 sources, and writing investigation reports.” (Doc. 1 at 7.) Plaintiff alleges his position as 5 an investigator regularly required him to work more than forty hours a week, but that he 6 was not eligible for overtime because of his classification as an independent contractor. 7 (Doc. 1 at 3.) 8 Plaintiff has brought suit against Defendant on behalf of himself, and all other 9 investigators working for Defendant nationwide,1 for failure to pay overtime wages in 10 violation of 29 U.S.C. § 207. (Doc. 1 at 16-18.) Defendant has moved to transfer this case 11 to the District of Colorado, or in alternative, to dismiss for failure to state a claim and to 12 stay this litigation until the Court’s resolution of the Motion to Transfer Venue. (Doc. 9.) 13 While Defendant’s motion was pending, Plaintiff filed a Motion for Conditional 14 Certification. (Doc. 11.) Defendant moved for an expedited stay of all litigation deadlines 15 until resolution of the Motion to Transfer Venue (Doc. 12), which the Court granted. 16 (Doc. 14.) 17 II. Standard of Review 18 “For the convenience of parties and witnesses, in the interest of justice, a district 19 court may transfer any civil action to any other district or division where it might have 20 been brought.” 28 U.S.C. § 1404(a). District courts exercise broad discretion to 21 adjudicate motions to transfer on an individualized, case-by-case determination. Jones v. 22 GNC Franchising, Inc., 211 F.3d 495, 498 (9th Cir. 2000) (citing Stewart Org. v. Ricoh 23 Corp., 487 U.S. 22, 29 (1988)). In making such a determination, courts consider (1) 24 25 26 27 1 Because Plaintiff alleges that Defendant reclassified investigators working in California from independent contractors to employees, the Court infers that Plaintiff is not suing on behalf of investigators working for Defendant in California. (Doc. 1 at 4.) Plaintiff’s description of the proposed Collective also supports this inference. (Doc. 1 at 13.) 28 2 1 whether the case could have been brought in the forum which the moving party seeks to 2 have the case transferred to, and (2) whether the proposed forum is a more suitable venue 3 based on the convenience of the parties and the interests of justice. Hatch v. Reliance Ins. 4 Co., 758 F.2d 409, 414 (9th Cir. 1985). A plaintiff’s choice of forum is given deference 5 and will not ordinarily be disturbed unless a defendant is capable of “making a strong 6 showing” of inconvenience so as to warrant transfer. Decker Coal Co. v. Commonwealth 7 Edison Co., 805 F.2d 834, 843 (9th Cir. 1986). Transfer of venue is inappropriate, 8 however, if “the result is merely to shift the inconvenience from one party to another.” 9 Scovil v. Medtronic, Inc., 995 F.Supp.2d 1082, 1098-99 (D. Ariz. 2014) (citing Van 10 Dusen v. Barrack, 376 U.S. 612, 645-46 (1964)). 11 III. Discussion 12 A. 13 28 U.S.C. § 1391 governs the venue of all civil cases in federal district courts and 14 15 16 17 18 19 20 21 22 23 Proper venue reads, in part: A civil action may be brought in— (1) a judicial district in which any defendant resides, if all defendants are residents of the State in which the district is located; (2) a judicial district in which a substantial part of the events or omissions giving rise to the claim occurred, or a substantial part of property that is the subject of the action is situated; or (3) if there is no district in which an action may otherwise be brought as provided in this section, any judicial district in which any defendant is subject to the court’s personal jurisdiction with respect to such action. 28 U.S.C. § 1391(b). 24 Here, venue is proper in the District of Colorado because Defendant is a resident 25 of Colorado. A corporation is “deemed to reside, if a defendant, in any judicial district in 26 which such defendant is subject to the court’s personal jurisdiction with respect to the 27 civil action in question.” 28 U.S.C. § 1391(c)(2). Because Defendant’s principal place of 28 business is in Loveland, Colorado, it follows that Defendant is subject to the District of 3 1 Colorado’s jurisdiction2 and Plaintiff could have filed suit against Defendant there. 2 B. 3 Courts may consider a variety of factors when determining whether transfer is 4 10 warranted based on the convenience of the parties and in the interest of justice, including: (1) the location where the relevant agreements were negotiated and executed, (2) the state that is most familiar with the governing law, (3) the plaintiff’s choice of forum, (4) the respective parties’ contacts with the forum, (5) the contacts relating to the plaintiff’s cause of action in the chosen forum, (6) the differences in the costs of litigation in the two forums, (7) the availability of compulsory process to compel attendance of unwilling non-party witnesses, and (8) the ease of access to sources of proof. 11 Jones, 211 F.3d at 498-99. Other factors that may be considered are “ensuring speedy 12 trials, trying related litigation together, and having a judge who is familiar with the 13 applicable law try the case.” Conte v. Ginsey Indus., Inc., No. CV-12-0728-PHX-JAT, 14 2012 WL 3095019, at *2 (D. Ariz. 2012) (internal citations omitted). No single factor is 15 dispositive. R. Prasad Indus. v. Flat Irons Envtl. Sols. Corp., No. CV-12-08261-PCT- 16 JAT, 2017 WL 4409463, at *3 (D. Ariz. 2017) (citing Stewart, 487 U.S. at 31). 5 6 7 8 9 Convenience of the parties and witnesses and the interest of justice 17 Defendant argues that the District of Colorado is a more appropriate venue to 18 litigate this case than the District of Arizona for several reasons. According to Defendant, 19 Plaintiff’s consent to join the Smith litigation3 demonstrates Plaintiff’s previous 20 willingness and capacity to litigate these exact claims in the District of Colorado. (Doc. 9 21 2 22 23 A corporation’s “place of incorporation and principal place are paradigm bases for general jurisdiction.” Daimler AG v. Bauman, 134 S. Ct. 746, 760 (2014) (internal citations and punctuation omitted); see also Fed. R. Civ. P. 4(k)(1)(A). 3 24 25 26 27 Richard Smith worked as an independent contractor for Defendant and filed suit against Defendant, individually and on behalf of all others similarly situated, for unpaid wages under the FLSA in 2015. Smith v. KeyPoint Gov’t Sols., Inc., No. 15-CV-00865REB-KLM, 2016 WL 7324606, at *1-2 (D. Colo. 2016). Judge Robert E. Blackburn granted summary judgment in favor of Defendant upon finding Smith’s claims to be barred by the FLSA’s statute of limitations. Id. at 4. The FLSA claims of those who “opted-in” to the collective action—including Plaintiff Judd—were dismissed without prejudice. Id. 28 4 1 at 7.) Defendant further maintains that Colorado is more convenient for Defendant’s 2 witnesses, putative class members, and non-party witnesses. (Doc. 9 at 7-11.) Defendant 3 also points to the ease with which evidence stored at Defendant’s headquarters in 4 Loveland could be accessed in the District of Colorado. (Doc. 9 at 11-12.) Defendant 5 asserts that Plaintiff’s claims against Defendant will, by virtue of Defendant’s work on 6 behalf of the United States, implicate unique security concerns that the District of 7 Colorado is familiar with because of the Smith litigation. (Doc. 9 at 12-13.) Finally, 8 Defendant emphasizes the differences in the courts’ dockets, and argues that the District 9 of Colorado’s caseload will allow for faster resolution of Plaintiff’s claims than if the 10 case remains in the District of Arizona. (Doc. 9 at 13-14.) 11 Plaintiff opposes Defendant’s Motion to Transfer. (Doc. 16.) Focusing heavily on 12 the deference Plaintiff’s choice of forum should be afforded, Plaintiff maintains that 13 Defendant’s arguments regarding his forum choice are mistaken. (Doc. 16 at 7-10.) 14 Moreover, Plaintiff directs the Court to the parties’ contacts with Arizona (Doc. 16 at 10- 15 11), as well as Defendant’s failure to meet its burden of proof regarding the convenience 16 of the District of Colorado for party and non-party witnesses. (Doc. 16 at 12-15.) Finally, 17 Plaintiff characterizes the differences between the districts’ dockets as insignificant. 18 (Doc. 16 at 17.) 19 Interestingly, both parties accuse the other of forum shopping. (Doc. 9 at 2; Doc. 20 16 at 4.) That being said, the Court finds that there are several factors that support a 21 finding that transfer of this case to the District of Colorado is warranted. First, the weight 22 given to Plaintiff’s choice of forum is afforded less deference than customary because 23 Plaintiff seeks to represent a class. Lou v. Belzberg, 834 F.2d 730, 739 (9th Cir. 1987); 24 Wenokur v. AXA Equitable Life Ins. Co., No. CV-17-00165-PHX-DLR, 2017 WL 25 4357916, at *3 (D. Ariz. 2017). Further, Plaintiff voluntarily opted-in to the Smith 26 litigation prior to its dismissal, which lends credence to the idea that Plaintiff is capable 27 and willing to litigate these claims in the District of Colorado. See, e.g., Reiffin v. 28 Microsoft Corp., 104 F.Supp.2d 48, 52 (D. D.C. 2000) (finding that transfer of venue was 5 1 supported by plaintiff’s previous decision to litigate “clearly related” action in transferee 2 forum). 3 “The convenience of witnesses is said to be the most important factor in passing 4 on a transfer motion.” F.T.C v. Wyndham Worldwide Corp., No. CV-12-1365-PHX-PGR, 5 2013 WL 1222491, at *3 (D. Ariz. 2013) (internal citation omitted). In evaluating this 6 factor, courts look not just at the quantity of witnesses in each potential venue, but to the 7 nature and quality of witness testimony. Id. at *4. “To demonstrate an inconvenience to 8 witnesses, the moving party must identify relevant witnesses, state their location and 9 describe their testimony and its relevance.” Haswell v. Nat’l R.R. Passenger Corp., No. 10 CV-05-723-TUC-DCB(JM), 2006 WL 839067, at *2 (D. Ariz. 2006). 11 Here, Defendant has identified two witnesses—Jennifer Boaz and Julie 12 Hammond—each of whom Defendant expects will have prominent roles in this litigation. 13 (Doc. 9 at 8.) Jennifer Boaz serves as the “National Director of Independent Contracts” 14 for Defendant. (Doc. 9 at 8.) Boaz lives in North Carolina, but regularly travels to 15 Loveland, Colorado. (Doc. 9 at 8.) According to Defendant, Boaz will testify to the 16 following: “the Company’s engagement with independent contractor Investigators; the 17 purpose for those contracts; the requirements imposed on KeyPoint by its clients; how 18 independent contractors receive work; and how the Company pays independent 19 contractor Investigators.” (Doc. 9 at 8.) Julie Hammond who is employed by Defendant 20 as a “Contractor Liaison” and worked directly with Plaintiff is expected to testify to 21 “Judd’s contractual relationship with the Company, including the investigations he 22 agreed to perform and the compensation he received.” (Doc. 9 at 8.) Like many of 23 Defendant’s Contractor Liaisons who may be called to testify, Hammond resides in 24 Colorado. (Doc. 9 at 9, n.1.) The Court agrees with Defendant that the potential 25 testimony of Arizona witnesses is not as significant as that of the Colorado witnesses. 26 Accordingly, the convenience of the parties is weighted towards transfer. 27 Finally, the Court is persuaded by Defendant’s argument that the District of 28 Arizona’s docket, as compared to that of the District of Colorado, favors transfer. (Doc. 9 6 1 at 13-14.) Bearing in mind the interest of ensuring a speedy trial, docket conditions are a 2 factor that courts may consider in deciding a motion to transfer venue. See Conte, 2012 3 WL 3095019, at *2. As of September 2017, judges in the District of Arizona had 636 4 pending cases, whereas judges in the District of Colorado had 451 pending cases; the 5 median time between the filing of a civil action to trial was 32.6 months in the District of 6 Arizona and 23.9 months in the District of Colorado.4 Because it is likely that Plaintiff’s 7 claims will be resolved faster in the District of Colorado, this factor also weighs in favor 8 of transfer. 9 IV. Conclusion 10 The Court finds that in the interest of justice, transferring the present case to the 11 District of Colorado is appropriate. Because the Court’s Order to stay the litigation during 12 pendency of Defendant’s Motion to Transfer precluded Defendant from filing a response 13 to Plaintiff’s Motion for Conditional Certification, it will be for the District of Colorado 14 to determine how it wishes to address Plaintiff’s Motion for Conditional Certification. 15 (Doc. 11.) Accordingly, 16 IT IS ORDERED that Defendant’s Motion (Doc. 9) is granted in part as to 17 transfer of venue, and denied in part without prejudice as to dismissal for failure to 18 state a claim. 19 IT IS FURTHER ORDERED that Clerk of Court transfer this matter to the 20 United States District Court for the District of Colorado and terminate the case in the 21 District of Arizona. Dated this 8th day of February, 2018. 22 23 Honorable Steven P. Logan United States District Judge 24 25 26 4 27 28 Federal district court docket statistics are calculated every six months. U.S. COURTS, U.S. District Courts Combined Civil and Criminal Federal Court Management Statistics (September 30, 2017), http://www.uscourts.gov/statistics/table/na/federal-courtmanagement-statistics/2017/09/30-1. 7

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