Martin Lunn v. Mike Flower
ORDER AND OPINION granting 4 Motion to Change Venue and TRANSFERS the matter to the United States District Court for the Central District of California; finding as moot 4 Motion to Dismiss. Signed by Honorable J Michelle Childs on 9/20/2016.(asni, ) [Transferred from South Carolina on 9/20/2016.]
UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF SOUTH CAROLINA
Civil Action No. 1:15-cv-04454-JMC
ORDER AND OPINION
Plaintiff Martin Lunn (“Plaintiff”) filed the instant action against Defendant Mike Flower
(“Defendant”) to recover allegedly unpaid wages pursuant to the South Carolina Payment of
Wages Act (“SCPWA”), S.C. Code Ann. §§ 41-10-10 to -110 (2016). (ECF No. 1-1.)
This matter is before the court pursuant to Defendant’s Motion to Transfer Venue to the
United States District Court for the Central District of California pursuant to 28 U.S.C. §
1404(a). (ECF No. 4 at 1.) In the alternative, Defendant moves for dismissal of the matter
pursuant to the doctrine of forum non conveniens. (Id.) Plaintiff opposes Defendant’s Motions
in their entirety. (ECF No. 9.) For the reasons set forth below, the court GRANTS Defendant’s
Motion to Transfer Venue and DENIES Defendant’s Motion to Dismiss.
RELEVANT BACKGROUND TO PENDING MOTIONS
Plaintiff alleges that he was an employee of MDM Services Corporation (“MDM”) in
which Defendant was the owner and Chief Executive Officer. (ECF No. 1-1 at 4 ¶¶ 2, 5.)
Plaintiff alleges that his wages were based on commissions received for contracts that he
procured on behalf of MDM. (Id. at ¶ 6.) Despite making numerous demands for unpaid
commissions, Plaintiff alleges that MDM in concert with Defendant failed to pay Plaintiff the
wages that were due him. (Id. at 4 ¶ 6–5 ¶ 13.)
On September 2, 2015, Plaintiff filed a Complaint against Defendant seeking unpaid
commissions pursuant to the SCPWA in the Aiken County (South Carolina) Court of Common
Pleas. (ECF No. 1-1.) On November 2, 2015, Defendant removed the matter to this court
pursuant to 28 U.S.C. § 1332 on the basis that “Plaintiff is a citizen of South Carolina, and
Defendant is not a citizen of South Carolina” and “[t]he matter in controversy exceeds the sum of
$75,000.00, exclusive of interest and costs.” (ECF No. 1 at 2 ¶¶ 5–7.) In response to Plaintiff’s
Complaint, Defendant filed an Answer and Counterclaims (ECF No. 5) and the instant Motions
to Transfer Venue and to Dismiss (ECF No. 4) on November 9, 2015. Plaintiff filed a Response
in Opposition to the Motion to Dismiss/Change Venue on December 3, 2015, to which
Defendant filed a Reply in Support of Motion to Transfer Venue or Dismiss on December 14,
2015. (ECF Nos. 9, 11.) Additionally, Plaintiff filed a Sur-Response on January 5, 2016, and
Defendant filed a Sur-Reply on January 22, 2016. (ECF Nos. 13, 14.)
The court has subject matter jurisdiction over this action, pursuant to 28 U.S.C. § 1332,
because the parties are citizens of different states and the amount in controversy exceeds
$75,000.00. Plaintiff “is a citizen and resident of Aiken County, South Carolina.” (ECF No. 1-1
at 4 ¶ 1.) Defendant “resides in the State of California.” (Id. at ¶ 2.) The court is satisfied that
the amount in controversy exceeds $75,000.00. (ECF Nos. 1 at 2 ¶ 7 & 1-1 at 5 ¶ 10.)
Motions to Transfer Venue under 28 U.S.C. § 1404(a) in the Context of a Forum
28 U.S.C. § 1404(a) provides that “[f]or 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.” Id. “The appropriate venue of an action is a procedural matter that is governed by
federal rule and statutes.” Albemarle Corp. v. AstraZeneca UK Ltd., 628 F.3d 643, 651 (4th Cir.
2010) (citing Fed. R. Civ. P. 12(b)(3); 28 U.S.C. § 1391; 28 U.S.C. § 1406(a)). “Whether a case
should be transferred to an alternative venue rests within the sound discretion of the district
court.” Sw. Equip., Inc. v. Stoner & Co., Inc., C/A No. 6:10-1765-HMH, 2010 WL 4484012, at
*2 (D.S.C. Nov. 1, 2010) (citing In re Ralston Purina Co., 726 F.2d 1002, 1005 (4th Cir. 1984)).
“In the typical case not involving a forum-selection clause, a district court considering a §
1404(a) motion (or a forum non conveniens motion) must evaluate both the convenience of the
parties and various public-interest considerations.”1 Atl. Marine Constr. Co. v. U.S. Dist. Ct.
W.D. Tex., 134 S. Ct. 568, 581 (2013). However, “[w]hen the parties have agreed to a valid
forum-selection clause, a district court should ordinarily transfer the case to the forum specified
in that clause.” Id. “[A] valid forum-selection clause, which ‘represents the parties’ agreement
as to the most proper forum[,]’” should be “‘given controlling weight in all but the most
exceptional cases.’” Id. (quoting Stewart Org., Inc. v. Ricoh Corp., 487 U.S. 22, 31 & 33
The Court in Atlantic Marine identified the private and public factors as follows:
Factors relating to the parties’ private interests include “relative ease of access to
sources of proof; availability of compulsory process for attendance of unwilling,
and the cost of obtaining attendance of willing, witnesses; possibility of view of
premises, if view would be appropriate to the action; and all other practical
problems that make trial of a case easy, expeditious and inexpensive.” Piper
Aircraft Co. v. Reyno, 454 U.S. 235, 241, n.6, 102 S. Ct. 252, 70 L. Ed. 2d 419
(1981) (internal quotation marks omitted). Public-interest factors may include
“the administrative difficulties flowing from court congestion; the local interest in
having localized controversies decided at home; [and] the interest in having the
trial of a diversity case in a forum that is at home with the law.” Ibid. (internal
quotation marks omitted). The Court must also give some weight to the plaintiffs'
choice of forum. See Norwood v. Kirkpatrick, 349 U.S. 29, 32, 75 S. Ct. 544, 99
L. Ed. 789 (1955).
Atl. Marine, 134 S. Ct. at 581 n.6.
A court conducts a two-part analysis in deciding whether to enforce a forum selection
clause. First, the court determines whether the forum-selection clause is valid and enforceable.
Atl. Marine, 134 S. Ct. at 581. A forum-selection clause is “prima facie valid and should be
enforced unless enforcement is shown by the resisting party to be ‘unreasonable’ under the
circumstances.” M/S Bremen v. Zapata Off–Shore Co., 407 U.S. 1, 10 (1972). A forumselection clause may be considered unreasonable if “(1) [its] formation was induced by fraud or
over-reaching; (2) the complaining party “will for all practical purposes be deprived of his day in
court” because of the grave inconvenience or unfairness of the selected forum; (3) the
fundamental unfairness of the chosen law may deprive the plaintiff of a remedy; or (4)[its]
enforcement would contravene a strong public policy of the forum state.” Albemarle Corp., 628
F.3d at 651 (quoting Allen v. Lloyd’s of London, 94 F.3d 923, 928 (4th Cir. 1996)).
Second, the court must consider whether “extraordinary circumstances” would hinder the
enforcement of the forum-selection clause. Atl. Marine, 134 S. Ct. at 581. In considering
whether extraordinary circumstances are present to avoid enforcement of a valid forum selection
clause, a court may consider “arguments about public-interest factors only.”2 Id. at 581–82.
Dismissal for Forum Non Conveniens
Forum non conveniens is “a supervening venue provision, permitting displacement of the
ordinary rules of venue when, in light of certain conditions, the trial court thinks that jurisdiction
ought to be declined.” Sinochem Int’l Co. Ltd. v. Malay. Int’l Shipping Corp., 549 U.S. 422,
“The presence of a valid forum-selection clause requires district courts to adjust their usual §
1404(a) analysis in three ways.” Atl. Marine, 134 S. Ct. at 581. “First, the plaintiff’s choice of
forum merits no weight.” Id. “Second, a court evaluating a defendant’s § 1404(a) motion to
transfer based on a forum-selection clause should not consider arguments about the parties’
private interests.” Atl. Marine, 134 S. Ct. at 582. “Third, when a party bound by a forumselection clause flouts its contractual obligation and files suit in a different forum, a § 1404(a)
transfer of venue will not carry with it the original venue’s choice-of-law rules—a factor that in
some circumstances may affect public-interest considerations.” Atl. Marine, 134 S. Ct. at 582.
429 (2007) (citations omitted). “A federal court has discretion to dismiss a case on the ground of
forum non conveniens ‘when an alternative forum has jurisdiction to hear [the] case, and . . . trial
in the chosen forum would establish . . . oppressiveness and vexation to a defendant . . . out of all
proportion to plaintiff’s convenience, or . . . the chosen forum [is] inappropriate because of
considerations affecting the court’s own administrative and legal problems.’” Id. “For the
federal court system, Congress has codified the doctrine and has provided for transfer, rather
than dismissal, when a sister federal court is the more convenient place for trial of the action.”
Id. at 430 (citing 28 U.S.C. § 1404(a)).
The Parties’ Arguments
Defendant contends that the unpaid commissions at issue in this action arise from a Profit
Improvement Incentive Program (the “Commission Agreement”) agreed to by MDM and
Plaintiff on September 15, 2003. (ECF No. 4 at 2 (referencing ECF No. 4-1).) Defendant further
contends that the Commission Agreement has a forum selection clause that requires the litigation
of disputes in a state or federal court in Orange County, California. (Id. (citing ECF No. 4-1 at 3
¶ V (“This agreement shall be construed and interpreted according to the laws of the State of
California and the jurisdiction and venue of any legal action concerning same shall be Orange
Defendant further contends that the Commission Agreement is
enforceable because both he and Plaintiff each personally signed the document. (Id. at 8.)
Based on the aforementioned, Defendant argues that the court should give the forum
selection clause “controlling weight” and either transfer the case or dismiss it. (Id. at 3 (citing,
e.g., Atl. Marine Constr. Co. v. U.S. Dist. Ct. W.D. Tex., 134 S. Ct. 568, 581 (2013) (“When the
parties have agreed to a valid forum-selection clause, a district court should ordinarily transfer
the case to the forum specified in that clause.”)).) Defendant argues that because there is a forum
selection clause, the court in the context of its § 1404(a) analysis can only consider publicinterest factors because “[w]hen parties agree to a forum-selection clause, they waive the right to
challenge the preselected forum as inconvenient or less convenient for themselves or their
witnesses, or for their pursuit of the litigation.” (Id. at 4 (quoting Atl. Marine, 134 S. Ct. at
582).) In this regard, Defendant asserts that in conjunction with the forum selection clause, the
public interest factors weigh in favor of transferring the case to California because (1) case load
numbers demonstrate that court congestion in the District of South Carolina is greater than in the
Central District of California, (2) only one party to the Commission Agreement is located in
South Carolina, and (3) the forum in which the case proceeds will have to apply California law
as required by the Commission Agreement. (Id. at 6–7.) More specifically, Defendant asserts
that the Central District of California is the appropriate transfer recipient because it includes
Orange County, California. (Id. at 18.)
In addition to the foregoing, Defendant asserts that the forum selection clause in the
Commission Agreement is valid because it was “negotiated at arms-length” and there is no
evidence of “fraud, duress, misrepresentation, or any other contractual misconduct.” (ECF No.
11 at 5.)
Plaintiff opposes the Motion to Transfer Venue arguing that Defendant’s invocation of
the forum selection clause was invalid because he was not a party to the Commission Agreement
in that “[h]e signed the contract, but only in his capacity as the agent of the corporation.” (ECF
No. 9 at 3.) Plaintiff argues that venue is proper in South Carolina because the Albemarle Corp.
factors required to be weighed under § 1404 do not support a transfer of venue from this proper
district. In support of his arguments, Plaintiff asserts that if the case is transferred to California,
he will be deprived of (1) his day in court as a result of the increased cost of litigation, the loss of
access to certain witnesses, and his inability to travel out of South Carolina3; (2) his remedy
under the SCPWA because the forum selection clause requires application of California law and
“S.C. Code § 41-10-80(c) obviously does not exist under California law”; and (3) the protection
of the SCPWA, which represents the strong public policy interest in South Carolina of
“protect[ing] its citizens from unscrupulous employers who fail to pay their employees the wages
that are earned inside the borders of this state.” (ECF No. 9 at 5–6.)
Plaintiff also asserts that the public interest factors as outlined in Atlantic Marine weigh
in favor of keeping the matter in South Carolina because the case would only add to the
administrative congestion in the California court system. Moreover, Plaintiff asserts that the
controversy is clearly localized to South Carolina for the following reasons:
This case is based on a South Carolina statute that was enacted to protect South
Carolina citizens from employers who unlawfully withhold wages . . . . All of the
bad acts alleged by both Plaintiff and Defendant occurred in the State of South
Carolina. All of the damages alleged by both parties were incurred in South
Carolina. Every witness that can be identified in the pleadings, with the exception
of Defendant himself, is located in the State of South Carolina . . . .
The only forum that is at home with the law is South Carolina. The sole cause of
action is based on a South Carolina statute.
(Id. at 7–8.)
Plaintiff filed a Sur-Response wherein he stated that he was diagnosed with Neuromyelitis
Optica, a medical condition allegedly “caused by an antibody that attacks the myelin sheathing
of the nerves behind the eyes in the spinal cord of the patient.” (ECF No. 13 at 1.) Plaintiff
stated that he had been instructed by his doctors to not travel and remain within proximity to the
hospital. (Id. at 2.) In response, Defendant pointed out that Plaintiff had failed to provide
sufficient “evidentiary support for any threat of recurrence or any travel restriction.” (ECF No.
14 at 1.)
The Court’s Review
Plaintiff filed the instant action seeking to recover allegedly unpaid commissions. (ECF
No. 1-1 at 4 ¶ 6.) Defendant moves to transfer the matter to the Central District of California
pursuant to a forum selection clause contained in a purported Commission Agreement. (ECF
No. 4 at 1.)
Plaintiff opposes transfer first arguing that Defendant cannot invoke the forum selection
clause because he was not a party to the Commission Agreement. To aid in its analysis of this
issue, the court looked partly to decisions regarding agreements to arbitrate since the Supreme
Court has characterized an arbitration clause as “a specialized kind of forum-selection clause.”
Scherk v. Alberto-Culver Co., 417 U.S. 506, 519 (1974). “Equitable estoppel allows a nonsignatory to compel arbitration of claims brought by a signatory when the claims are
‘inextricably intertwined’ with the underlying agreement.” Swane Co. v. Berkeley Cty. S.C.,
No. 2:15-cv-02586, 2015 WL 6688072, at *6 (D.S.C. Oct. 30, 2015) (citation omitted). “When
non-signatory defendants seek to avail themselves of an arbitration clause contained in
agreement entered into by the plaintiff ‘[t]he essential question . . . is whether [the] [p]laintiff[ ]
would have an independent right to recover against the non-signatory [d]efendant[ ] even if the
contract containing the arbitration clause were void.’” Id. (citation omitted).
Upon review, the court observes that the Commission Agreement was signed by Plaintiff
as “Manager of Construction Services” and signed by Defendant as “CEO” of MDM. (ECF No.
4-1 at 3.) Plaintiff claims that “the Commission Agreement is not intimately founded in and
intertwined with the single cause of action being pursued.” (ECF No. 9 at 4.) However, the
claim for unpaid commissions appears on its face to relate to the Commission Agreement since
the document’s express purpose was to set up a commission compensation schedule “[i]n
consideration of marketing and business development services rendered by [Plaintiff] Martin
Lunn (Employee) resulting in the awarding of contracts to MDM . . . .” (ECF No. 4-1 at 2.) In
this regard, without the Commission Agreement, there is no evidence before the court as to why
Plaintiff would have the right to recover commissions from Defendant.
This court has previously held that a non-party to a forum selection clause can be bound
to it if the entity is “‘closely related’ to the dispute such that it becomes reasonably ‘foreseeable’
that it will be bound.” Sagittarius Sporting Goods Co., Ltd. v. LG Sourcing, Inc., C/A No. 3:1500496-MGL, 2016 WL 721302, at *5 (D.S.C. Feb. 23, 2016) (citing Hugel v. Corp. of Lloyd’s,
999 F.2d 206, 209 (7th Cir. 1993)). Herein, because Plaintiff has alleged that Defendant was
close enough to MDM’s failure to pay Plaintiff commissions that Defendant should be held
individually liable under the SCPWA, the court finds that Defendant should be allowed to
benefit from invocation of the forum selection clause in the Commission Agreement.
Benefits in a Card, LLC v. Talx Corp., C/A No. 6:06-cv-03655-GRA, 2007 WL 750638, at *4
(D.S.C. Mar. 7, 2007) (“[A] a non-signatory officer of a signatory corporation may compel
arbitration when the disputed actions are intertwined with his duties to the corporation.”)
However, the foregoing finding does not resolve Defendant’s Motion to Transfer because
the court still must determine whether the forum selection clause is valid. Plaintiff asserts that it
is not. (ECF No. 9 at 5.) As noted above, a forum selection clause is presumptively valid unless
it is shown to be unreasonable as a result of the following: “(1) [its] formation was induced by
fraud or over-reaching; (2) the complaining party “will for all practical purposes be deprived of
his day in court” because of the grave inconvenience or unfairness of the selected forum; (3) the
fundamental unfairness of the chosen law may deprive the plaintiff of a remedy; or (4)[its]
enforcement would contravene a strong public policy of the forum state.” Albemarle Corp. v.
AstraZeneca UK Ltd., 628 F.3d 643, 651 (4th Cir. 2010) (quoting Allen v. Lloyd’s of London,
94 F.3d 923, 928 (4th Cir. 1996)). Plaintiff does not allege fraud, the first factor, but does
contend that the other three factors weigh heavily in his favor. (ECF No. 9 at 5.)
In assessing the first of the three remaining factors, the court observes that it is
constrained by Atlantic Marine to accord no weight to Plaintiff’s choice of forum in the District
of South Carolina and “not consider the parties’ private interests [i.e., convenience, litigation
costs, location of witnesses] where, as here, the parties already have bargained for them in a
forum selection clause.” Generation Co., LLC v. Holiday Hosp. Franchising, LLC, NO. 5:15CV-220-FL, 2015 WL 7306448, at *10 (E.D.N.C. Nov. 19, 2015) (citing Atl. Marine, 134 S. Ct.
at 581–82). Therefore, to meet his burden, Plaintiff can only use public interest factors4 to show
the deprivation of his right to his day in court. Because of this limitation, Plaintiff’s statistics
showing greater court congestion in California and arguments as to why the matter is localized to
South Carolina and involves only South Carolina law do not persuasively demonstrate why
Plaintiff’s due process rights will be lost if this action is transferred to the Central District of
California. Varnadore v. Nationwide Mut. Ins. Co., C/A No. 3:13-cv-01777-CMC, 2013 WL
4504770, at *6 (D.S.C. Aug. 22, 2013) (“His arguments do not, in any event, suggest any greater
inconvenience or difficulty than would be faced by any person required to pursue litigation, if at
all, in a state other than his home state.”). For as many public interest assertions as Plaintiff
provides that this matter should be litigated in South Carolina, Defendant provides just as many
public interest contentions as to why the matter is properly litigated in California. (Compare
“Public-interest factors may include ‘the administrative difficulties flowing from court
congestion; the local interest in having localized controversies decided at home; [and] the
interest in having the trial of a diversity case in a forum that is at home with the law.’” Atl.
Marine, 134 S. Ct. at 581 n.6 (citation omitted).
ECF No. 9 at 1–3 with ECF No. 11 at 2–3.) For this reason, the court is not persuaded that this
factor renders the forum selection clause unreasonable.
Next, the court does not agree with Plaintiff that he would be deprived of his remedy if
forced to litigate in California. Like South Carolina, California’s public policy “in favor of full
and prompt payment of an employee’s earned wages is fundamental and well established.”
Monastiero v. appMobi, Inc., No. C 13-05711 SI, 2014 WL 1991564, at *6 (N.D. Cal. May 15,
2014). California courts have observed that “[d]elay of payment or loss of wages results in
deprivation of the necessities of life, suffering inability to meet just obligations to others, and, in
many cases may make the wage-earner a charge upon the public.” Id. (quoting Smith v. Superior
Court, 39 Cal. 4th 77, 82 (Cal. 2006)). More to the point, the California Labor Code expressly
requires prompt payment of earned wages and, like South Carolina, allows for payment of treble
damages under certain circumstances. Cal. Lab. Code §§ 204, 206 (2016). Notwithstanding
Plaintiff’s arguments, the court is not persuaded that Plaintiff would lose his employee wage
rights if his lawsuit is transferred to California.
Finally, as to Plaintiff’s assertion that the enforcement of the forum selection clause
would contravene a strong public policy of South Carolina, the court observes that the Court of
Appeals for the Fourth Circuit has expressly rejected this position. Albemarle, 628 F.3d at 652
(noting that South Carolina courts and federal courts sitting in South Carolina have enforced
forum-selection clauses in contracts). “In light of Albemarle, Plaintiff cannot argue that South
Carolina has a sufficiently strong public policy against enforcement of forum selection clauses to
preclude enforcement of the forum selection clause at issue in this action.” Leventis v. AT&T
Advert. Sols., C/A No. 3:11-cv-03437-CMC, 2012 WL 931081, at *7 (D.S.C. Mar. 19, 2012).
As a result of the foregoing, the court finds that the forum selection clause in the
Commission Agreement is valid and that Plaintiff fails to present exceptional circumstances
mandating that the forum selection clause not be given controlling weight. Therefore, this case
should be transferred to the Central District of California as requested by Defendant.
Accordingly, Defendant’s Motion to Dismiss (ECF No. 4) should be DENIED AS MOOT.
Sinochem Int’l, 549 U.S. at 430.
Upon careful consideration of the entire record and for the reasons set forth above, the
court hereby GRANTS Defendant Mike Flower’s Motion to Transfer Venue and TRANSFERS
the matter to the United States District Court for the Central District of California. (ECF No. 4.)
The court DENIES AS MOOT Defendant’s Motion to Dismiss. (Id.)
IT IS SO ORDERED.
United States District Judge
September 20, 2016
Columbia, South Carolina
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