Perez et al v. Wells Fargo & Company et al

Filing 134

ORDER by Judge Hamilton terminating 102 Motion to Sever and Transfer, 107 Motion for Leave to File, Motion for Leave to File; deferring ruling on 120 Motion to Sever and denying 120 Motion to Transfer; granting in part and denying in part 122 Motion to Strike (pjhlc1, COURT STAFF) (Filed on 9/21/2015)

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UNITED STATES DISTRICT COURT

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NORTHERN DISTRICT OF CALIFORNIA

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MONIQUE PEREZ, et al.,

v.

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ORDER DENYING MOTION TO
TRANSFER AND MOTION TO STRIKE

WELLS FARGO & COMPANY, et al.,
Defendants.

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United States District Court
Northern District of California

Case No. 14-cv-0989-PJH

Plaintiffs,

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Before the court is plaintiffs’ motion to sever the class claims brought under New

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York law, and the individual FLSA claims brought by New York plaintiffs, and to transfer

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those claims to the Southern District of New York pursuant to 28 U.S.C. § 1404(a); and

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motion to strike affirmative defenses. Defendants oppose the motions.
Having read the parties’ papers and carefully considered their arguments, and the

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relevant legal authority, the court hereby DENIES the motion to transfer and the motion to

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strike, and DEFERS ruling on the motion to sever.

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1.

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Motion to Sever and Transfer.
“For the convenience of parties and witnesses, in the interest of justice, a district

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court may transfer any action to any other district or division where it might have been

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brought.” 28 U.S.C. § 1404(a). The party moving for transfer of a case bears the burden

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of demonstrating transfer is appropriate. Commodity Futures Trading Comm'n v.

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Savage, 611 F.2d 270, 279 (9th Cir. 1979).

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In deciding a motion to transfer venue, the district court must consider each of the
factors enumerated in § 1404(a) – whether the action could have been brought in the

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proposed transferee district, the convenience of the parties, the convenience of the

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witnesses, and the interests of justice. Hatch v. Reliance Ins. Co., 758 F.2d 409, 414

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(9th Cir. 1985); see also Jones v. GNC Franchising, Inc., 211 F.3d 495, 498-99 (9th Cir.

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2000).

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The court may also consider a number of non-exclusive factors – the plaintiff’s

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choice of forum, the convenience of the parties, the convenience of the witnesses, the

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ease of access to the evidence, the familiarity of each forum with the applicable law, the

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feasibility of consolidation with other claims, any local interest in the controversy, and the

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relative court congestion and time of trial in each forum. See Williams v. Bowman, 157

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United States District Court
Northern District of California

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F.Supp. 2d 1103, 1106 (N.D. Cal. 2001) (citing Jones, 211 F.3d at 498-99).
Plaintiffs argue that transfer to the Southern District of New York is warranted

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under § 1404(a). They contend that the motion is timely, as § 1404(a) does not contain a

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specific time limitation, and this case is still in early stages. They also assert that the

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claims of the New York plaintiffs could have been brought in the proposed transferee

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district, because the claims all arose in New York, and some of the New York plaintiffs

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worked for defendants in the Southern District of New York.

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Plaintiffs argue that the Southern District of New York is a more convenient forum,

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taking into consideration that they have now decided it is their choice of forum, and that

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the convenience factors (access to sources of proof, availability of witnesses, interest in

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having local controversies decided in a local forum, and unfairness of burdening jurors

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with a controversy arising in another locale) all favor transfer.

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In particular, plaintiffs contend that requiring witnesses located in New York to

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travel to California would cause a great inconvenience. These New York witnesses

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allegedly include "[p]laintiffs' supervisors," who can be expected to testify as to

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defendants' practices in New York, especially with regard to the claims for overtime

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violations under New York labor law. Plaintiffs argue in addition that documents relating

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to the New York plaintiffs' claims are "likely to be found in New York . . . or in the

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neighboring state of New Jersey."
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Finally, plaintiffs assert that the interests of justice favor transfer. They contend

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that because the claims arose in New York, there is a clear public interest in trying the

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case there, and that a New York court will be more familiar with the governing state law.

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Defendants oppose the request to transfer under § 1404(a). They claim that

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plaintiffs have engaged in forum-shopping on an ongoing basis, and argue that plaintiffs

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who seek to transfer a case from the district where they originally filed it must justify the

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motion by showing a change of circumstances, which plaintiffs have not done here.

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Defendants also argue that transfer pursuant to § 1404(a) would be "manifestly
inefficient." They claim that there is a strong policy of litigating "similar claims" in the
same tribunal – but that here, plaintiffs seek transfer specifically to enable them to pursue

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United States District Court
Northern District of California

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their related claims separately, in different courts on different coasts.

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As for the convenience factors, defendants argue that the New York plaintiffs have

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already been deposed in this case (and cannot be further deposed), so there can be no

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question of further inconvenience. In addition, they assert that because both the New

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York and California plaintiffs claim violations based on allegedly widespread corporate

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policies, any discovery plaintiffs seek moving forward will be duplicated if the New York

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claims are transferred. Defendants claim that regardless of where the witnesses are

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located, this result would be unduly burdensome and inefficient.

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The motion to transfer is DENIED. The court finds that plaintiffs have not made an

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adequate showing that transfer is warranted. They have not identified witnesses (other

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than "supervisors") or any exact location where relevant documents are maintained, and

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have made no clear showing that the convenience of parties and witnesses would be

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better served by a transfer to the Southern District of New York.

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As for defendants’ argument that plaintiffs' motion to transfer should be denied

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because they have not shown "changed circumstances," it is true that some courts have

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imposed this requirement, but it is not a requirement that appears anywhere in the

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statute, and is not a requirement that has been imposed by the Ninth Circuit.

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Nevertheless, the court finds that the fact that plaintiffs filed this suit here, alleging claims
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under New York, Texas, and California law, after having previously filed suits in New

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York and Texas, at least suggests some element of forum shopping, and plaintiffs have

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made no attempt to explain why they now believe they should have filed the New York

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claims in New York at the outset, or why they no longer wish to proceed in this district.

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The court DEFERS ruling on the portion of the motion seeking an order severing

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the New York claims and the FLSA claims brought by the New York plaintiffs. The court

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will determine at some appropriate time whether and how to sever the New York claims

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for trial.

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2.

Motion to Strike Affirmative Defenses

Under Federal Rule of Civil Procedure 12(f), “[t]he court may strike from a pleading

United States District Court
Northern District of California

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an insufficient defense . . . .” In the answer to the third amended complaint (“TAC”),

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defendants assert 32 affirmative defenses. Plaintiffs argue that the court should strike

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"all 30" of defendants' affirmative defenses, because they allege no facts and are thus

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insufficient under the pleading standards articulated in Bell Atlantic Corp. v. Twombly,

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550 U.S. 544 (2007) and Ashcroft v. Iqbal, 556 U.S. 662 (2009) (“Twombly/Iqbal”).

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However, plaintiffs do not discuss even a majority of the defenses.

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Plaintiffs list four defenses, "by way of example" – the third defense (settlement

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and release); the eighth defense (no violation of law); the twelfth defense (accord and

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satisfaction); and the fourteenth defense (consent, acquiescence or ratification) – which

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they assert are insufficient, although they do not explain why except to refer generally to

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the Twombly/Iqbal standard. In addition to those four "examples," plaintiffs argue that the

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ninth defense (waiver) and the thirteenth defense (estoppel) are insufficient as a matter of

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law with respect to the FLSA claims because courts have held that those defenses

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cannot be asserted as defenses to FLSA claims (citing Barrentine v. Arkansas-Best

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Freight Sys., Inc., 450 U.S. 728 (1981)). They also assert that these defenses are also

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insufficient as to the state law claims because they are not pled as required under

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Twombly/Iqbal.

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In opposition, defendants make four main arguments. First, they argue that the
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Twombly/Iqbal standard is not applicable to the pleading of affirmative defenses under

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Ninth Circuit law. In support they cite Kohler v. Flava Enters., Inc., 779 F.3d 1016, 1019

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(9th Cir. 2015). Defendants assert that rather than requiring pleading in conformance

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with the Twombly/Iqbal "plausibility" standard, all that Rule 8 requires is "fair notice" of

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the defense. They add that even if Twombly/Iqbal applies to the pleading of defenses,

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the court should look to the entire answer and complaint to obtain "the context needed."

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In their second main argument, defendants assert that their affirmative defenses

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are adequately pled because they satisfy the "fair notice" standard. Here, they

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specifically mention the third, ninth, tenth, twelfth, thirteenth, fourteenth, seventeenth, and
eighteenth defenses, although they do not provide any analysis. They also specifically

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United States District Court
Northern District of California

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mention the fourth (unlean hands) and fifth (statute of limitations) defenses, neither of

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which were addressed by plaintiffs in their motion.

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Following this, defendants list several defenses (again, without analysis) – the

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sixth, eleventh, fifteenth, twentieth, and twenty-eighth defenses; the twenty-first defense;

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and the twenty-fifth defense – but with the exception of the sixth defense, the defenses

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listed here do not match the defenses pled in the answer to the TAC. For example, the

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opposition refers to the eleventh defense as "exempt employees – all claims," while the

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answer lists the eleventh defense as "estoppel – all claims;" and the opposition refers to

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the fifteenth defense as "uncompensated time is de minimis – all claims," while the

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answer refers to the fifteenth defense as "waiver – all claims."

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In their third main argument, defendants contend that the "negative" defenses

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should not be stricken. These are defenses that "demonstrate[ ] that plaintiff has not met

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its burden of proof" or "negate[ ] an element that [plaintiff is] require to prove."

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Defendants contend that such defenses (according to some courts) are not even subject

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to a "fair notice" pleading requirement, because they are essentially denials of the

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complaint. Defendants identify these as the first, second, seventh, eighth, sixteenth,

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nineteenth, twenty-second, twenty-third, twenty-fourth, twenty-sixth, twenty-seventh,

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twenty-ninth, and thirtieth defenses. The only one of these defenses they identify by title
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is the eighth, but unfortunately, as above, they refer in their opposition to the eighth

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defense as "no violation," while the eighth defense in the answer is "good faith – all

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claims."

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The motion is GRANTED in part and DENIED in part. Plaintiff is correct that

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judges in this district (and throughout the Ninth Circuit) generally evaluate the pleading of

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affirmative defenses under the Twombly/Iqbal standard – or at a minimum, hold that "fair

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notice" requires some specificity in pleading and that it is not enough to merely assert

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boilerplate defenses. Defendants’ citation to the Kohler decision is unpersuasive, as the

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Ninth Circuit did not specifically hold in that case that the Twombly/Iqbal standard does

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United States District Court
Northern District of California

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not apply to the pleading of affirmative defenses.
As to the present motion, however, the only defenses that will be stricken are the

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defenses of waiver and estoppel as they apply to the FLSA claims. Plaintiffs have not

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met their burden with regard to the remainder of the affirmative defenses. It is insufficient

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to simply argue that the defenses collectively are not pled in accordance with

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Twombly/Iqbal. Plaintiffs must discuss each defense separately, and where necessary,

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list the elements that must be pled in order to adequately allege the defense. The court

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can respond only to plaintiffs' motion and the arguments made in opposition to that

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motion, and absent argument by the parties will not conduct an analysis of the answer in

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order to determine which defenses are adequately pled and which are not. Moreover, the

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court will not entertain a further motion on this issue.

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The date for the hearing on these motions, previously set for September 30, 2015,
has been VACATED.

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IT IS SO ORDERED.

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Dated: September 21, 2015

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__________________________________
PHYLLIS J. HAMILTON
United States District Judge

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