Frazier v. Morgan Stanley & Co, LLC et al
Filing
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ORDER by Judge Hamilton granting 18 Motion to Transfer Case (pjhlc2, COURT STAFF) (Filed on 1/29/2016)
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UNITED STATES DISTRICT COURT
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NORTHERN DISTRICT OF CALIFORNIA
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KATHY FRAZIER,
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United States District Court
Northern District of California
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Case No. 15-cv-4512-PJH
Plaintiff,
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v.
ORDER GRANTING MOTION TO
TRANSFER VENUE
MORGAN STANLEY, et al.,
Defendants.
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On January 6, 2016, plaintiff’s motion to transfer venue came on for hearing before
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this court. Plaintiff Kathy Frazier (“plaintiff”) appeared through her counsel, Linda
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Friedman. Defendants Morgan Stanley & Co. LLC, Morgan Stanley Smith Barney LLC,
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and Morgan Stanley (referred to collectively as “defendants” or “Morgan Stanley”)
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appeared through their counsel, Mark Dichter. Having read the papers filed in
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conjunction with the motion and carefully considered the arguments and the relevant
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legal authority, and good cause appearing, the court hereby rules as follows.
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BACKGROUND
This is an employment discrimination case brought by a former financial advisor
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for Morgan Stanley. She brings the action both as an individual and on behalf of a
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putative class. At a general level, plaintiff alleges that defendants have policies and
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practices that result in racial disparities. In particular, plaintiff challenges defendants’
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“teaming and pooling” policy and practice, under which financial advisors form “teams”
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with other financial advisors of their choosing, each member of the team sharing their
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client account and books of business with the rest of the team. Plaintiff claims that
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African-American financial advisors are almost entirely excluded from favorable teams
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and pools. Overall, plaintiff claims that Morgan Stanley is engaged in a pattern and
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practice of racial discrimination and knowingly employs policies and practices that have a
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disparate impact on African Americans.
Plaintiff filed suit in this court on September 30, 2015, and then filed a motion to
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relate this case to an earlier case filed in this district, Jaffe v. Morgan Stanley & Co., Inc.,
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Case No. C 06-3903. Jaffe was also a class action challenging racial discrimination at
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Morgan Stanley, and resulted in a settlement that was approved by the court in 2008.
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The motion to relate was denied, as the judge presiding over Jaffe found that the two
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cases did not meet the relevant standard to relate cases under Civil Local Rule 3-12.
After the motion to relate was denied, plaintiff filed this motion to transfer the case
United States District Court
Northern District of California
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to the Southern District of New York.
DISCUSSION
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A.
Legal Standard
“For the convenience of parties and witnesses, in the interest of justice, a district
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court may transfer any civil action to any other district or division where it might have
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been brought.” 28 U.S.C. § 1404(a). Section 1404(a) “is intended to place discretion in
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the district court to adjudicate motions for transfer according to an ‘individualized, case-
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by-case consideration of convenience and fairness.’” Stewart Org., Inc. v. Ricoh Corp.,
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487 U.S. 22, 29 (1988) (citation omitted). Thus, in considering whether to grant a motion
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to transfer, the district court may consider any of a number of “case-specific factors.” See
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id.
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Although § 1404(a) lists three factors - convenience of parties, convenience of
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witnesses, and the interest of justice - rulings in motions brought under § 1404(a) can
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involve a number of other considerations. For example, the court can consider:
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(1) the location where the relevant documents were negotiated and executed;
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(2) the state most familiar with the governing law (in order to avoid confusion with
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application of foreign law);
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(3) plaintiff’s choice of forum;
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(4) the parties’ contacts with the forum and the connection between plaintiff’s
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cause of action and the chosen forum;
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(5) the differences in the costs of litigation in the two forums and congestion of the
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courts;
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(6) the ability to compel attendance of unwilling non-party witnesses;
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(7) the ease of access to sources of proof and the convenience of the witnesses;
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(8) the relevant public policy of the forum state and whether there is a local interest
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in having localized controversies decided at home; and
(9) the unfairness of imposing jury duty on citizens in a forum unrelated to the
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United States District Court
Northern District of California
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action.
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Jones, 211 F.3d at 498-99; see also Schwarzer, Tashima & Wagstaffe, Federal Civil
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Procedure Before Trial (2006) § 4:269, et seq. (relevant factors may include relative ease
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of access to proof; reach of subpoena power to secure witness attendance; the feasibility
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of consolidation with action pending elsewhere; state that is most familiar with governing
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state law; relative means of parties; relative docket congestion; plaintiff’s choice of forum;
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each party’s contacts with forum; contacts relating to plaintiff’s cause of action in chosen
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forum; and differences in cost of litigation in two forums).
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B.
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Legal Analysis
As a threshold matter, the court will consider whether this district’s connection to
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Jaffe warrants a finding that the interest of justice is better served by allowing this case to
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proceed in this district. In their opposition to plaintiff’s motion to transfer, defendants
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argue that this suit “challenges several of Morgan Stanley’s policies [], the same policies
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that are encompassed within the Jaffe settlement agreement.” Defendants further argue
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that plaintiff’s first claim, for breach of contract, “is based entirely on plaintiff’s allegation
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that defendants failed to abide by the terms of the Jaffe settlement agreement, an
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agreement that was entered into, approved, and being overseen literally in the United
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States District Court for the Northern District of California.”
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However, earlier in this case, defendants held a decidedly different view. In
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opposing plaintiff’s motion to relate this case to Jaffe, defendants argued that this case
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had no connection to Jaffe, as “the two actions involve substantially different facts and
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legal claims.” Defendants further pointed out that, while this court technically retained
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jurisdiction over the Jaffe settlement agreement, such retention of jurisdiction was “solely
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for the purpose of entering all orders and judgments authorized that may be necessary to
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implement and enforce the relief provided” in the settlement agreement. Dkt. 303 at 1
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(internal citation and bracketed language omitted). Defendants then directly challenged
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the merits of plaintiff’s breach of contract claim – the same claim that defendants now
invoke to argue against transfer – arguing that the Jaffe settlement agreement
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United States District Court
Northern District of California
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“preclude[s] Frazier’s breach of contract claim,” because it “explicitly states that
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‘[e]nforcement of this Modified Settlement Agreement shall be prosecuted by Lead Class
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Counsel or counsel for [Morgan Stanley] only, not third parties.” Dkt. 303 at 3 (internal
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citation omitted) (emphasis added by defendants).
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While the court will not address the merits of plaintiff’s breach of contract claim in
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connection with this motion, it does take the Jaffe settlement’s terms into account when
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evaluating whether the existence of the settlement weighs against transferring this case
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out of this district. And because the court retained jurisdiction over the agreement only
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for the limited purpose discussed above, a purpose which is not relevant to this case, the
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court finds that there is no relevant “nexus” between the agreement and this district. To
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the extent that plaintiff claims a breach of that agreement, this court is no better equipped
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than any other court to interpret the contract and rule on the merits of plaintiff’s claim.
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Accordingly, the court will conduct the section 1404 analysis without reference to the
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Jaffe settlement agreement.
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With Jaffe off the table, the court must look only at plaintiff’s suit to determine
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whether the convenience of parties and witnesses and the interest of justice warrant
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transfer to the Southern District of New York. Plaintiff argues that she is challenging
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firmwide policies that were designed and implemented by defendants’ senior executives
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in New York, making New York the most convenient venue for the parties and witnesses.
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Defendants, on the other hand, argue that plaintiff worked in Morgan Stanley’s Honolulu,
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Hawaii branch office, which is closer to California than to New York, and further argue
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that the Honolulu office is “part of the Palo Alto/Hawaii Complex based in Palo Alto,
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California.” Defendants explain that a “Complex” is a group of branches composed of
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one lead branch (in this instance, the Palo Alto branch) and other, smaller branches
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(such as the Honolulu branch) overseen by the Complex branch.
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However, defendants provide an incomplete picture of the connection between the
Honolulu branch and the Palo Alto branch. In their opposition, defendants argue that
“[s]ince October 2012, the Palo Alto/Hawaii Complex, of which the Honolulu branch is a
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United States District Court
Northern District of California
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part, has been headquartered at the Complex branch in Palo Alto.” Dkt. 19 at 1.
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Defendants further argue that “[a]s of October 2012, and at the time of plaintiff’s
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resignation and today, Cira Nickerson, the Complex Manager, managed this Complex,”
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and that “Ms. Nickerson works in Palo Alto.” Id.
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Based on the above, defendants have established a connection between the
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Honolulu branch and the Palo Alto branch from October 2012 to the present. However,
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plaintiff’s employment with Morgan Stanley began much earlier – in 2007 – and ended in
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November 2013. For the time period from 2007 to October 2012 (i.e., the majority of the
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time that plaintiff was employed by Morgan Stanley), defendants have provided no
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indication that plaintiff’s employment was connected to this district.
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Moreover, while plaintiff’s individual claims may involve witnesses from this district,
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there is no indication that the same is true of her class claims. As mentioned above,
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plaintiff challenges company-wide policies, and defendants’ headquarters are located in
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New York. Defendants do not dispute that point, nor do they argue that any challenged
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policies were designed or implemented in this district. The court finds that the gravamen
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of this suit arises out of plaintiff’s challenges to defendants’ policies on behalf of a
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putative class, not out of her individualized claims. Accordingly, the court finds that
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transfer to the Southern District of New York would be more convenient to the parties and
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wit
tnesses, an in the interest of jus
nd
stice, and th
herefore, plaintiff’s mo
otion to transfer venue
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is GRANTED.
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IT IS SO ORDER
S
RED.
Da
ated: Janua 29, 2016
ary
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__________
__________
__________
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PH
HYLLIS J. H
HAMILTON
Un
nited States District Ju
s
udge
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United States District Court
Northern District of California
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