Nicks et al v. Koch Meat Co., Inc. et al

Filing 82

MEMORANDUM Opinion and Order Signed by the Honorable Amy J. St. Eve on 10/27/2016:Mailed notice(kef, )

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION
JIMMY R. NICKS and JAMES EARL
PATRICK, individually and on behalf of all
persons similarly situated,
Plaintiffs,
v.
KOCH MEAT CO., INC., d/b/a KOCH FOODS,
KOCH FOODS OF MISSISSIPPI, LLC, and JET
POULTRY SERVICES, INC.,
Defendants.

)
)
)
)
)
)
)
)
)
)
)
)
)

No. 16-cv-6446

MEMORANDUM OPINION AND ORDER
AMY J. ST. EVE, District Court Judge:
On June 21, 2016, Plaintiffs Jimmy R. Nicks (“Nicks”) and James Earl Patrick
(“Patrick”), individually and on behalf of all persons similarly situated, filed a Collective Class
Action Complaint against Defendants Koch Meat Co., Inc. d/b/a Koch Foods (“Koch Meat”),
Koch Foods of Mississippi, LLC (“Koch Foods of Mississippi”), and JET Poultry Services, Inc.
(“JET”), seeking relief under the Fair Labor Standards Act of 1938, 29 U.S.C. § 201, et seq.
(“FLSA”). (R.1). JET moved to dismiss the Complaint pursuant to Federal Rule of Civil
Procedure 12(b)(2) and 12(b)(3) for lack of personal jurisdiction and/or improper venue. (R.37).
Koch Meat and Koch Foods of Mississippi (collectively, the “Koch Defendants”) separately
moved to dismiss the Complaint on similar grounds. (R.40). In the alternative to dismissal, all
Defendants request a transfer to the Southern District of Mississippi pursuant to 28 U.S.C. §§
1404 or 1406.

The Court now considers the Koch Defendants’ jurisdiction and venue challenge. (R.40).
For the following reasons, the Court denies that motion without prejudice to refile after
conducting the limited jurisdictional and venue discovery described herein.
BACKGROUND
I.

FLSA Complaint Allegations
Plaintiffs Nicks and Patrick are Mississippi residents who were “previously employed by

Defendants to catch and cage chickens as . . . member[s] of a live-haul crew[.]” (R.1, Compl. ¶
3-4). Plaintiffs allege that the Koch Defendants operate “one of the largest vertically integrated
poultry processors in the United States, with locations across Alabama, Georgia, Illinois,
Mississippi, Ohio and Tennessee.” (Id. ¶ 16). As part of that enterprise, the Koch Defendants
engage third-party contractors—such as JET—to employ chicken catchers—such as Plaintiffs—
for their live-haul crews, who then “travel to [Koch] farms to capture Koch’s chickens and place
them in Koch’s cages, for transport to the Koch poultry processing plants.” (Id. ¶¶ 24-25, 31).1
According to Plaintiffs, all three Defendants play a role in hiring live-haul crews, supervising
live-haul crews, and determining and recording “the piece rate and number of loads captured in
order to compensate the live-haul crews.” (Id. ¶¶ 32-34, 41, 45-46). With respect to
compensation in particular, Plaintiffs allege that “Defendants paid [them] and the FLSA
Collective a piece rate basis, regardless of the number of hours worked, and failed to pay
overtime as required by federal law.” (Id. ¶ 59). Accordingly, Plaintiffs now bring a claim for
overtime wage violations against the Koch Defendants and JET as joint employers under the
FLSA. (Id. ¶¶ 47-48, 68, 72-73). Plaintiffs purport to bring this FLSA collective action on
behalf of “[a]ll individuals employed by [Koch Meat, Koch Foods, and/or JET] as members of
live-haul, chicken catching crews in the United States, and who were paid on a piece rate and did

1

Throughout the Complaint, Plaintiffs refer to Koch Meat and Koch Foods as a collective, “Koch.” (Id. ¶ 16).

2

not receive overtime compensation from the three years preceding the date of the filing of this
Complaint.” (Id. ¶ 14).
II.

Jurisdictional Record
In terms of jurisdictional allegations, Plaintiffs allege that Defendant Koch Meat is “an

Illinois corporation headquartered in Park Ridge, Illinois, with facilities in Alabama, Georgia,
Mississippi, Tennessee, and Illinois[.]” (Id. ¶ 5). Koch Foods of Mississippi “is a Mississippi
entity headquartered in Morton, Mississippi, with processing plants in Mississippi.” (Id. ¶ 7).
JET, meanwhile, “is a Mississippi corporation headquartered in Summit, Mississippi, providing
staffing of live-haul chicken-catcher crews for the Koch Defendants.” (Id. ¶ 9).
As Mississippi citizens, Defendants JET and Koch Foods of Mississippi challenge the
Court’s personal jurisdiction over them under Federal Rule of Civil Procedure 12(b)(2). (R.37,
R.40). JET has submitted an affidavit from its Director and Vice President, attesting that JET
has never advertised in Illinois, conducted or solicited business in Illinois, or appointed an agent
for service of process in Illinois. (R.63-1, Corrected Armstreet Decl. ¶¶ 5-7). Instead, all of
JET’s “employees, officers, agents and shareholders reside in Mississippi,” where JET manages
“a contract with Koch Farms of Mississippi to catch chickens in Morton, Mississippi.” (Id. ¶¶ 911, 15).2 Koch Farms of Mississippi pays JET “for the chickens [JET’s] workers catch in
Mississippi[,]” while JET then “pays its workers, who are Mississippi residents, in Mississippi.”
(Id. ¶¶ 12-13). According to its employment files, “the named Plaintiffs and each putative
collective action member who has filed a consent in this action was also a resident of Mississippi
when hired by [JET].” (Id. ¶ 14). JET maintains its pay records and employment files in
Mississippi. (Id. ¶ 16).

2

The original Armstreet Declaration, submitted by JET, identified the relevant contracting party as named
Defendant, Koch Foods of Mississippi. (R.38-1, Armstreet Decl. ¶¶ 9-10). The Corrected Armstreet Declaration
clarified that the signatory was actually Koch Farms of Mississippi, another Mississippi-based Koch entity.

3

Koch Foods of Mississippi, too, has submitted several employee affidavits to contest
personal jurisdiction in Illinois. (R.42-1). In particular, Lance Buckert—Chief Financial Officer
of Koch Foods Incorporated, which is the sole member of Koch Foods of Mississippi and the
sole stockholder of Koch Meat—attested that Koch Foods of Mississippi does not: (i) have an
office in Illinois; (ii) own real property in Illinois; (iii) employ anyone in Illinois; (iv) pay
income or property taxes in Illinois; or (v) have a telephone listing or phone number in Illinois.
(R.42-1, Buckert Decl. ¶¶ 2-9). In addition, Laney White, Koch Foods of Mississippi’s
“Complex Manager,” attested that its poultry processing business, including the operation of a
slaughter plan in Morton, Mississippi (the “Slaughter Plant”), is limited to the State of
Mississippi. (R.42-1, White Decl. ¶¶ 4-8). Ronnie Joe Keyes, its “Live Production Manager,”
meanwhile, explained that he “oversees the production of live broiler chickens before they are
delivered to the Slaughter Plant for processing” – commonly referred to as “grow-out”
operations. (R.42-1, Keyes Decl. ¶ 5). As part of the grow-out operations, JET “catches broiler
chickens on the growers’ farms and places them in cages that are loaded onto poultry transport
vehicles for delivery to the Slaughter Plant.” (Id. ¶ 7). All of these “live-haul services related to
chickens supplied to the Slaughter Plant for processing take place in Mississippi.” (Id. ¶ 8). In
addition, Keyes appears to be a signatory on the “Poultry Catcher Agreement” between JET and
“Koch Farms of Mississippi, LLC.” (Compare id. with R.63-1 at 4).
For its part—although not contesting personal jurisdiction in Illinois—Koch Meat “does
not have any business records relating to any services provided” by JET, and “does not control
the pay policies or the day-to-day operations” of Koch Foods of Mississippi. (R.42-1, Buckert
Decl. ¶ 12; R.62-4, Buckert Supplemental Decl. ¶ 4). Koch Meat, moreover, does not “engage in

4

any live haul operations” or “own any facilities that process any live chickens.” (R.42-1,
Buckert Decl. ¶¶ 10-11).
LEGAL STANDARD
A motion to dismiss for lack of personal jurisdiction pursuant to Rule 12(b)(2) tests
whether a federal court has personal jurisdiction over a defendant. See Fed. R. Civ. P. 12(b)(2);
Central States v. Phencorp. Reins. Co., 440 F.3d 870, 875 (7th Cir. 2006). In analyzing a Rule
12(b)(2) motion, courts may consider matters outside of the pleadings. See Purdue Research
Found. v. Sanofi-Synthelabo, S.A., 338 F.3d 773, 782 (7th Cir. 2003). Without the benefit of an
evidentiary hearing, the plaintiff “bears only the burden of making a prima facie case for
personal jurisdiction.” uBID, Inc. v. GoDaddy Grp., Inc., 623 F.3d 421, 423-24 (7th Cir. 2010).
Under such circumstances, courts take “the plaintiff’s asserted facts as true and resolve any
factual disputes in its favor.” Id. Where the plaintiff fails to refute facts contained in the
defendant’s affidavit, however, courts accept those facts in the affidavit as true. GCIU-Employer
Ret. Fund v. Goldfarb Corp., 565 F.3d 1018, 1020 n.1 (7th Cir. 2009).
Under Rule 12(b)(3), a party may move for dismissal of an action that is filed in an
improper venue. See Fed.R.Civ.P. 12(b)(3). Once a defendant challenges the plaintiff’s choice
of venue, the plaintiff bears the burden of establishing that it filed its case in the proper district.
See Gilman Opco LLC v. Lanman Oil Co., No. 13-CV-7846, 2014 WL 1284499, at *2 (N.D. Ill.
Mar. 28, 2014). Under Rule 12(b)(3), “the district court assumes the truth of the allegations in
the plaintiff’s complaint, unless contradicted by the defendant’s affidavits.” Deb v. SIRVA, Inc.,
No. 14-2484, 2016 WL 4245497, at *5 (7th Cir. Aug. 11, 2016) (emphasis in original); see also
Faulkenberg v. CB Tax Franchise Sys., LP, 637 F.3d 801, 809-10 (7th Cir. 2011) (courts may
consider matters outside of the pleadings in deciding a venue motion). Against a Rule 12(b)(3)

5

challenge, the court must resolve any factual disputes and draw all reasonable inferences in the
plaintiff’s favor. See Gilman, 2014 WL 1284499 at *2. When venue is improper, the Court
“shall dismiss [the case], or if it be in the interest of justice, transfer such case to any district or
division in which it could have been brought.” See 28 U.S.C. § 1406(a).
ANALYSIS
I.

Personal Jurisdiction
A.

Applicable Legal Principles

“In a federal question case . . . a federal court has personal jurisdiction over the defendant
if either federal law or the law of the state in which the court sits authorizes service of process to
that defendant.” Mobile Anesthesiologists Chicago, LLC v. Anesthesia Assocs. of Houston
Metroplex, P.A., 623 F.3d 440, 443 (7th Cir. 2010). Here, the federal statute on which Plaintiffs
rely—the FLSA—does not authorize nationwide service of process. See Berger v. PIKR, Ltd.,
No. 14 C 8543, 2015 WL 2208200, at *3 (N.D. Ill. May 8, 2015); 29 U.S.C. § 216(b) (“An
action to recover the liability prescribed . . . may be maintained against any employer . . . in any
Federal or State court of competent jurisdiction”). Accordingly, the Court must analyze
Defendants’ amenability to personal jurisdiction under the Illinois long-arm statute. See Mobile
Anesthesiologists, 623 F.3d at 443. That statute “permits the exercise of personal jurisdiction if
it would be allowed under either the Illinois Constitution or the United States Constitution.” Id.
(citing 735 ILCS 5/2-209(c)). “Thus, the [Illinois] statutory question merges with the
constitutional one[.]” N. Grain Mktg., LLC v. Greving, 743 F.3d 487, 492 (7th Cir. 2014).
Because the Seventh Circuit has recognized that “there is no operative difference between these
two constitutional limits,” the key question is “whether the exercise of personal jurisdiction
would violate federal due process.” Mobile Anesthesiologists, 623 F.3d at 443 (citations
omitted).
6

Personal jurisdiction may be either general or specific. See Advanced Tactical Ordinance
Sys., LLC v. Real Action Paintball, Inc., 751 F.3d 796, 800 (7th Cir. 2014) (citing Daimler v.
Bauman, 134 S. Ct. 746, 753 (2014)). A court may assert general jurisdiction over a foreign
corporation “to hear any and all claims against it” only “when the corporation’s affiliations with
the State in which suit is brought are so constant and pervasive as to render it essentially at home
in the forum State.” Daimler, 134 S. Ct. at 751 (quoting Goodyear Dunlop Tires Operations,
S.A. v. Brown, 131 S. Ct. 2846, 2851 (2011)). Specific jurisdiction, on the other hand, “is
available for a suit that arises out of the forum-related activity.” Advanced Tactical, 751 F.3d at
800. Three requirements exist to establish specific jurisdiction: “(1) the defendant must have
purposely availed himself of the privilege of conducting business in the forum state or
purposefully directed his activities at the state; (2) the alleged injury must have arisen from the
defendant’s forum-related activities; and (3) the exercise of jurisdiction must comport with
traditional notions of fair play and substantial justice.” Felland v. Clifton, 682 F.3d 665, 673
(7th Cir. 2012).
B.

Koch Foods of Mississippi’s Jurisdictional Challenge
1.

“Alter Ego” Jurisdiction

Plaintiffs argue that the Court may exercise both general and specific jurisdiction over
Koch Foods of Mississippi because it “is so inextricably intertwined with Koch Meat that they
are one in the same.” (R.56, Response Br. at 1). As evidence of this purported “alter ego”
relationship, Plaintiffs point to: (i) a webpage from “Koch Foods, Inc.” stating that “Koch Foods
is a leading poultry processor in the United States with [various] locations” and “13,000
employees across our corporate office, processing locations and distribution centers” (R.56-2);
(ii) corporate communications stating that “Koch Foods [Inc.] will spend a total of $35 million to

7

expand two poultry processing plants in Mississippi” (R.56-1); (iii) documents reflecting an
overlap in officers and directors, and external counsel, between Koch Foods, Inc., Koch Meat,
and Koch Foods of Mississippi (R.56-3; R.56-4; R.56-5; R.56-6; R.56-7; R.56-8; and R.56-9);
(iv) documents reflecting an Illinois mailing addresses for Koch Farms of Mississippi and/or
Koch Foods of Mississippi (R.56-10 (real estate records); R.56-11 (UCC filings); R.71-1, Ex. A
(OHSA News Release, “Headquartered in Park Ridge, Illinois, Koch Foods of Mississippi is a
subsidiary of Koch Foods, Inc.”)); and (v) litigation filings in which Koch Foods, Inc. prosecutes
the claims of its affiliates, and/or its affiliates assume its jurisdictional ties (R.56-12; R.56-13).
Under Seventh Circuit law, “due process requires that personal jurisdiction cannot be
premised on corporate affiliation or stock ownership alone where corporate formalities are
substantially observed and the parent does not exercise an unusually high degree of control over
the subsidiary.” See Cent. States, Se. & Sw. Areas Pension Fund v. Reimer Express World
Corp., 230 F.3d 934, 943 (7th Cir. 2000). Against this presumption, Illinois courts recognize
two methods by which plaintiffs may establish “minimum contacts” via imputation between
related entities – (1) providing “evidence that would justify piercing the corporate veil[,]” or (2)
demonstrating that one entity exercised an “unusually high degree of control” over the other. See
id. at 945; Salon Grp., Inc. v. Salberg, 156 F. Supp. 2d 872, 876 (N.D. Ill. 2001); see also
Schultheis v. Cmty. Health Sys., Inc., No. 11-0435-DRH, 2012 WL 253366, at *2-3 (S.D. Ill. Jan.
26, 2012) (noting the same and observing that plaintiffs offered a “personnel policy” reflective of
the “daily, operational control that is the sine qua non of an alter ego relationship”).
Construing the Complaint “liberally, in its entirety, and with every inference drawn in
favor” of Plaintiffs, see Phencorp, 440 F.3d at 877-78, Plaintiffs have demonstrated (i) an
overlap in directors and officers among Koch entities; (ii) a tendency by “Koch Foods, Inc.” to

8

issue corporate communications and filings on behalf of its affiliates; and (iii) the existence of a
“vertically integrated” enterprise in which “Koch” exerts some control at each stage of the
business. Thus, while Plaintiffs’ allegations and exhibits support the inference that the Koch
Defendants “work together as a vertically integrated enterprise[,]” they do not “raise reasonable
inferences about the remaining [imputation] factors, including the several that have to do with
the formal separation of Defendants’ assets or with Defendants’ internal governance structure.”
See Mountain Link Associates, Inc. v. Chesapeake Energy Corp., No. 2:13-CV-16860, 2014 WL
4851993, at *9 (S.D.W. Va. Sept. 29, 2014). The Court recognizes, however, that this
information is within the Koch Defendants’ control.
2.

Jurisdictional Discovery over Koch Foods of Mississippi

Jurisdictional discovery is appropriate here. As the Seventh Circuit has observed, “[t]he
fact that a corporation has only one single shareholder is not proof that the corporation is the
‘alter ego’ of that shareholder.” Judson Atkinson Candies, Inc. v. Latini-Hohberger Dhimantec,
529 F.3d 371, 381 (7th Cir. 2008) (citation omitted). Similarly, “having common officers and
directors . . . is insufficient to justify disregarding the corporate form[.]” Id. It is within the
Court’s discretion, though, to permit targeted jurisdictional discovery on Plaintiffs’ “alter ego”
theory as to Koch Foods of Mississippi. See Reimer, 230 F.3d at 947; see also Novo 1, Inc. v.
Levendo, LLC, No. 10-CV-892, 2011 WL 3047679, at *2 (E.D. Wis. July 25, 2011) (“the court
was not required to conclusively determine that Hines is the alter ego of Levendo before
allowing Novo 1 to conduct a limited deposition of Hines and to make limited written discovery
requests”).
Here, the factual record is ambiguous as to the Koch Defendants’ internal structure. See
Gilman, 2014 WL 1284499 at *6 (jurisdictional discovery is warranted where “the factual record

9

is at least ambiguous or unclear on the jurisdiction issue”). While Koch Foods of Mississippi
represents that Koch Meat is not its parent (R.62, Reply Br. at 4), Plaintiffs are suing “Koch
Meat Co., Inc., d/b/a Koch Foods.” Lance Buckert, the Chief Financial Officer of Koch Foods
Incorporated with “personal knowledge of the assets and operations of [its] subsidiaries,”
attested that “Koch Foods Incorporated is the sole member of Koch Foods of Mississippi, LLC
and is the sole stockholder of Koch Meat Co., Inc.” (R.42-1, Buckert Decl. ¶¶ 2-3). Koch
Foods, Inc.—not Koch Meat—likewise appears in many of Plaintiffs’ referenced exhibits.
Given this ambiguity, the Court permits Plaintiffs to take the deposition of Lance Buckert
concerning paragraphs 2-3 of his initial declaration. (Id.). Plaintiffs may inquire about the
“assets and operations” of Koch Foods of Mississippi and/or Koch Farms of Mississippi as
related to an “alter ego” showing.
In addition, the factual record is unclear as to the “control” exerted by “Koch Meat Co.,
Inc., d/b/a Koch Foods” over the chicken catching and/or caging business. See Gilman, 2014
WL 1284499 at *6. While Plaintiffs point to paragraphs 18-27 and 31-35 of the Complaint for
their “control” allegations, (R.56, Response Br. at 7), these allegations conflate the two named
Koch Defendants. Moreover, the submitted affidavits call into question the accuracy of these
generalized “Koch” allegations as related to Koch Meat’s control over and/or involvement in
“the chicken catching operation.” The Buckert Declaration, for example, states that “Koch
Meat” does not “own any live chickens or engage in any live haul operations[,]” nor does it “own
any facilities that process any live chickens.” (R.42-1, Buckert Decl. ¶¶ 10-11). Contra Heath v.
Perdue Farms, Inc., 87 F. Supp. 2d 452, 454-55 (D. Md. 2000) (observing that “Defendant
Perdue Farms, Inc.,” not any affiliate, “at all times, retains ownership of chickens”). Rather, it is
Koch Foods of Mississippi—a Mississippi entity—that oversees “grow-out” operations,

10

including the work of live-haul crews, and operates the relevant poultry processing facilities in
Mississippi. (R.42-1, White Decl. ¶¶ 4-8; R.42-1, Keyes Decl. ¶¶ 3-9). The Supplemental
Buckert Declaration, meanwhile, states that “Koch Meat does not control the pay policies or the
day-to-day operations of Koch [Foods of] Mississippi.” (R.62-4, Buckert Supplemental Decl. ¶
4).
These declarations, however, do not speak to whether “Koch Meat Co., Inc., d/b/a Koch
Foods”—that is, Koch Foods, Incorporated—exerts any operational control over Koch Foods of
Mississippi and/or Koch Farms of Mississippi. Contra Sullivan v. Sony Music Entm’t, No. 14
CV 731, 2014 WL 5473142, at *5 (N.D. Ill. Oct. 29, 2014) (jurisdictional discovery is
unwarranted where “the defendant has provided affirmative evidence that refutes the plaintiff’s
assertion of jurisdiction”). Given this ambiguity, and because Plaintiffs’ jurisdictional assertions
are not “clearly frivolous,” the Court permits Plaintiffs to take the deposition of Lance Buckert
concerning paragraphs 10-11 of his initial declaration, and paragraph 4 of his supplemental
declaration. Plaintiffs may further examine Buckert concerning Koch Foods, Incorporated’s
control over and/or involvement in the chicken-catching operations of Koch Foods of Mississippi
and/or Koch Farms of Mississippi. See Gilman, 2014 WL 1284499 at *6. The Court also grants
Plaintiffs the opportunity to conduct a Rule 30(b)(6) deposition of Koch Foods of Mississippi
concerning their “alter ego” theory of jurisdiction. In particular, Plaintiffs may examine the
30(b)(6) designee as to: (i) the “veil-piercing” factors identified by the Seventh Circuit in
Judson, 529 F.3d at 379; and (ii) the “extraordinary control” factors identified by the district
court in Schultheis, 2012 WL 253366 at *3. To the extent there is overlap between the two
theories, see Wells v. Edison Int’l, Inc., No. 09 C 1728, 2009 WL 1891801, at *5 (N.D. Ill. July
1, 2009), the Court prohibits the elicitation of duplicative testimony.

11

For the stated reasons, the Court permits limited jurisdictional discovery relevant to
Plaintiffs’ “alter ego” theory of jurisdiction. The parties shall complete these depositions by
November 18, 2016. The Court therefore denies Koch Foods of Mississippi’s Rule 12(b)(2)
motion to dismiss, without prejudice to refile once this discovery is completed.
II.

Venue
The Court next considers the Koch Defendants’ venue challenge under Rule 12(b)(3).
A.

28 U.S.C. § 1391(b)(1)

Plaintiffs first argue that venue is proper in the Northern District of Illinois under 28
U.S.C. § 1391(b)(1). The Court reserves opinion on this issue until it determines the personal
jurisdiction challenges brought by JET and, if it decides to refile, Koch Foods of Mississippi.
See 28 § 1391(b)(1) (“A civil action may be brought in a judicial district in which any defendant
resides, if all defendants are residents of the State in which the district is located”) (emphasis
added); see also 28 U.S.C. § 1391(c)(2) (“an entity with the capacity to sue and be sued in its
common name . . . shall be deemed to reside, if a defendant, in any judicial district in which such
defendant is subject to the court’s personal jurisdiction with respect to the civil action in
question”).
B.

28 U.S.C. § 1391(b)(2)

Plaintiffs next argue that venue is proper in the Northern District of Illinois under 28
U.S.C. § 1391(b)(2). Section 1391(b)(2) provides that “a civil action may be brought in a
judicial district in which a substantial part of the events or omissions giving rise to the claim
occurred[.]” As the Court has previously recognized, the test “is not whether a majority of the
activities pertaining to the case were performed in a particular district, but whether a substantial
portion of the activities giving rise to the claim occurred in a particular district.” Allstate Life

12

Ins. Co. v. Stanley W. Burns, Inc., 80 F. Supp. 3d 870, 877 (N.D. Ill. 2015).
According to Plaintiffs, a “substantial portion” of the activities giving rise to their FLSA
claim occurred in Illinois, where Koch Meat issues “[a]ll compensation policies, employment
control and protocols” for its affiliates and contractors to use in poultry processing operations.
(R.56, Response Br. at 1-2, 7, 12-13, 17). The Koch Defendants, on the other hand, argue that
this case concerns Mississippi chicken catchers, hired by JET, who were allegedly denied
overtime compensation in Mississippi. (R.1, Compl. ¶¶ 3-4, 7, 9, 14, 21, 31-35; R.63-1,
Corrected Armstreet Decl. ¶¶ 13-21; R.42-1, Keyes Decl. ¶¶ 3-9; R.42-1, Buckert Decl. ¶ 12;
R.62-4, Buckert Supplemental Decl. ¶ 4)). The operative activities giving rise to Plaintiffs’
overtime compensation claims, the Koch Defendants argue, took place in Mississippi, and
Mississippi is the situs of relevant witnesses and relevant payroll and employment records. (Id.).
Venue may be proper in more than one court. See Armstrong v. LaSalle Bank Nat. Ass’n,
552 F.3d 613, 617 (7th Cir. 2009). Thus, while the Rule 12(b)(3) record reflects that the
Southern District of Mississippi may be a proper venue under 28 U.S.C. § 1391(b)(2), the Court
cannot say—in light of Plaintiffs’ position, and without the benefit of venue discovery—that
Illinois was not also a situs of a “substantial portion of the activities giving rise” to their FLSA
claim. In particular, Plaintiffs argue that the “primary defendant” in this case, Koch Meat, has a
“corporate policy and practice of failing to give overtime pay to chicken catchers in violation of
the FLSA.” (R.56, Response Br. at 1). The Complaint, meanwhile, alleges that Defendants
“determined and recorded the piece rate and number of loads captured in order to compensate the
live-haul crews” and “failed to pay overtime as required by federal law” pursuant to “common
pay practices.” (R.1, Compl. ¶¶ 32, 44-46, 58-59). Viewing the Complaint “liberally, in its
entirety, and with every inference drawn in favor” of Plaintiffs, see Phencorp, 440 F.3d at 877-

13

78, these allegations—combined with the “control” allegations discussed above—raise the
inference that “Koch Meat, d/b/a Koch Foods,” does set the relevant wage and employment
policies.
Defendants’ evidentiary submissions, moreover, do not conclusively refute this inference.
While the Supplemental Buckert Declaration, for example, states that Koch Meat does not
“control the pay policies” of Koch Foods of Mississippi, it does not speak to (i) whether Koch
Foods, Incorporated plays any role in determining and/or controlling such pay policies; or (ii)
whether Koch Meat has any role in determining and/or controlling the pay policies of Koch
Farms of Mississippi. (R.62-4, Buckert Supplemental Decl. ¶ 4). JET’s affidavits are likewise
devoid of any indication that it—as opposed to any Koch entity—determined the relevant pay
practices. (R.38-1; R.63-1). While the Poultry Catcher Agreement discusses compensation in
consideration for JET’s services, it does not discuss compensation between JET—or any Koch
entity—and the individual chicken catchers. (R.63-1, Ex. A). Based on counsels’
representations during a recent hearing, moreover, the record also reflects ambiguity concerning
who pays, through JET, the individual chicken catchers in Mississippi – Koch Foods of
Mississippi, or Koch Farms of Mississippi.
Given these ambiguities, the Court permits limited venue discovery concerning who sets
and/or controls the relevant wage and employment policies for individual chicken catchers in
Mississippi. See Sanderson v. Spectrum Labs, Inc., 248 F.3d 1159 (7th Cir. 2000) (recognizing
district court discretion to permit limited venue discovery); see also Oppenheimer Fund, Inc. v.
Sanders, 437 U.S. 340, 351 n.13 (1978) (“where issues arise as to jurisdiction or venue,
discovery is available to ascertain the facts bearing on such issues”). Plaintiffs may issue three
targeted interrogatories on this topic to each of the Koch Defendants, in addition to examining

14

Lance Buckert concerning paragraph 4 of his supplemental declaration. Plaintiffs must issue
these written interrogatories by November 1, 2016, and the Koch Defendants must provide
written responses by November 11, 2016. The parties must complete the Buckert oral
examination by November 18, 2016.
For the stated reasons, the Court denies the Koch Defendants’ Rule 12(b)(3) motion,
without prejudice to refile following the limited venue discovery described herein.3
CONCLUSION
For the foregoing reasons, the Court denies the Koch Defendants’ motion to dismiss
pursuant to Rules 12(b)(2) and 12(b)(3), without prejudice to refile after conducting the limited
jurisdictional and venue discovery described herein. (R.40).

Dated: October 27, 2016
_________________________________
AMY J. ST. EVE
United States District Court Judge

3

The Court reserves opinion on (i) JET’s motion to dismiss and/or transfer (R.37) and (ii) the Koch Defendants’
request for transfer pursuant to 28 U.S.C. §§ 1404(a) or 1406(a).

15