Goodly v. Check-6, Inc. et al
Filing
17
ORDER & REASONS: granting 11 MOTION to Transfer Venue; FURTHER ORDERED that this matter is hereby TRANSFERRED to the United States District Court for the Northern District of Oklahoma. Signed by Judge Carl Barbier on 6/1/16.(sek)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
JOSEPH GOODLY
CIVIL ACTION
VERSUS
NO: 16-1936
CHECK-6, INC., ET AL.
SECTION: “J” (5)
ORDER AND REASONS
Before the Court are a Motion to Transfer Venue (Rec. Doc. 11)
filed by Defendants Check-6, Inc., Yarema Sos, Brian Brurud, Dennis
Romano, S. Eric Benson, Laura Owen, and John Dillion (“Defendants”)
and an opposition thereto (Rec. Doc. 14) filed by Plaintiff Joseph
Goodly (“Plaintiff”). Also before the Court are a Motion to Toll
Statute of Limitations (Rec. Doc. 12) filed by Plaintiff and an
opposition thereto (Rec. Doc. 15) filed by Defendants. Having
considered the motions and legal memoranda, the record, and the
applicable law, the Court finds that the motion to transfer should
be GRANTED.
FACTS AND PROCEDURAL BACKGROUND
This
litigation
is
based
on
the
Fair
Labor
Standards
Act
(“FLSA”), 29 U.S.C. § 201 et seq., and arises from a contract
executed by Plaintiff and Defendants on March 26, 2014. (Rec. Doc.
11-2.)
Services
The
agreement,
Agreement,”
designated
provided
as
that
a
“Contractor’s
Plaintiff
would
Master
provide
“coaching” services in the oil and gas industry to Defendants. Id.
1
at 2-3. Plaintiff agreed to provide consulting, client training,
and sales services. Id. at 5. In turn, Defendants agreed to
compensate Plaintiff as set forth in the agreement. Id. at 5-6.
The contract contained a forum selection clause, which stated:
In the event that a lawsuit is filed by either party in
connection with this Agreement or any breach thereof,
the parties hereto agree that jurisdiction and venue are
waived and that any such lawsuit shall be brought in the
county and state of the principal office of the Company.
Id.
at
20.
The
agreement
defined
the
“Company”
as
“Check-6
International Inc. and its Affiliates.” Id. at 3. The contract
also noted that the Company’s principal office was located in
Jenks, Oklahoma. Id. at 19.
On March 7, 2016, Plaintiff filed suit in this Court, alleging
that Defendants required him to work in excess of forty hours in
a work week but failed to pay him overtime in accordance with the
FLSA. (Rec. Doc. 1.) Plaintiff asserted claims against Defendants
on his own behalf and on behalf of other similarly situated
employees of Defendants. Plaintiff contends that his agreement
with
Defendants
maintain
that
was
they
an
employment
retained
contract,
Plaintiff
as
while
Defendants
an
independent
contractor.
On May 5, 2016, Defendants filed the instant motion to transfer
venue to the United States District Court for the Northern District
of Oklahoma in accordance with United States Code Title 28, Section
1404(a) and the forum selection clause in the agreement. Plaintiff
2
opposed the motion on May 24. Also pending before the Court is a
Motion to Toll the Statute of Limitations filed by Plaintiff on
May 13, 2016. (Rec. Doc. 12.)
PARTIES’ ARGUMENTS
In their motion, Defendants argue that the Court should transfer
this matter to the Northern District of Oklahoma, the district
that encompasses Jenks, Oklahoma. Defendants argue that the forum
selection clause is valid and applicable to Plaintiff’s FLSA
claims.
Further,
Defendants
emphasize
that
the
clause
is
mandatory, not permissive. Accordingly, Defendants argue that the
existence of a valid forum selection clause shifts the burden to
Plaintiff to show why the Court should not transfer this matter.
Defendants assert that Plaintiff will not be able to demonstrate
that the clause is unreasonable.
In his opposition, Plaintiff argues that enforcing the forum
selection clause is contrary to the public policy of the forum
state. The crux of Plaintiff’s argument is that the agreement
signed by the parties was actually an employment contract, not an
independent
contractor
agreement.
Plaintiff
points
out
that
Louisiana holds a strong public policy against forum selection
clauses in employment agreements. Because Plaintiff claims to be
an employee of Defendants, he asserts that the forum selection
clause
in
the
alleged
employment
agreement
is
unenforceable.
Further, Plaintiff argues that Defendants bear the burden of
3
proving their motion and that a plaintiff’s choice of forum is
entitled to deference.
LEGAL STANDARD
The proper procedure for enforcing a forum selection clause that
points to a particular federal district is a motion to transfer
venue pursuant to 28 U.S.C. § 1404(a). Atl. Marine Const. Co. v.
U.S. Dist. Court for W. Dist. of Tex., 134 S. Ct. 568, 580 (2013).
Section 1404(a) states 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.” 28 U.S.C. § 1404(a). The moving party
has the burden of showing “good cause” for a transfer by clearly
demonstrating that a transfer is “[f]or the convenience of parties
and witnesses, in the interest of justice.” In re Volkswagen of
Am., Inc., 545 F.3d 304, 315 (5th Cir. 2008) (quoting 28 U.S.C. §
1404(a)). Thus, if the transferee venue is not clearly more
convenient than the venue chosen by the plaintiff, the plaintiff’s
choice should be respected. Id.
In the typical case not involving a forum selection clause, a
court considering a Section 1404(a) motion must determine whether
a
transfer
would
serve
“the
convenience
of
the
parties
and
witnesses” and otherwise promote “the interest of justice.” In
making this determination, the court should consider the public
4
and private interest factors adopted by the Fifth Circuit. “The
private interest factors are: ‘(1) the relative ease of access to
sources of proof; (2) the availability of compulsory process to
secure the attendance of witnesses; (3) the cost of attendance for
willing witnesses; and (4) all other practical problems that make
trial of a case easy, expeditious and inexpensive.’” Id. (quoting
In re Volkswagen AG, 371 F.3d 201, 203 (5th Cir. 2004)). “The
public interest factors are: ‘(1) the administrative difficulties
flowing from court congestion; (2) the local interest in having
localized interests decided at home; (3) the familiarity of the
forum with the law that will govern the case; and (4) the avoidance
of unnecessary problems of conflict of laws [or in] the application
of foreign law.’” Id. The above-listed factors are not necessarily
exhaustive or exclusive, and none should be given dispositive
weight. Id. Furthermore, unless the balance of factors strongly
favors the moving party, the plaintiff’s choice of forum should
not be disturbed. Peteet v. Dow Chem. Co., 868 F.2d 1428, 1436
(5th Cir. 1989).
The presence of a valid, mandatory forum selection clause,
however, requires the court to adjust its usual Section 1404(a)
analysis in three ways. Atl. Marine, 134 S. Ct. at 581. “First,
the plaintiff’s choice of forum merits no weight.” Id. “Rather, as
the party defying the forum-selection clause, the plaintiff bears
the burden of establishing that transfer to the forum for which
5
the parties bargained is unwarranted.” Id. Second, the court should
not consider the parties’ private interests; it may consider only
public interests. Id. at 582. “When parties agree to a forumselection 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. Therefore,
the court must “deem the private-interest factors to weigh entirely
in favor of the preselected forum.” Id. Third, a transfer of venue
premised on enforcement of a valid forum selection clause “will
not carry with it the original venue’s choice-of-law rules—a factor
that
in
some
circumstances
may
affect
public-interest
considerations.” Id.
In Atlantic Marine, the United States Supreme Court adjusted
the typical § 1404(a) analysis because “a valid forum-selection
clause [should be] given controlling weight in all but the most
exceptional cases.” Id. at 581 (quoting Stewart Org., Inc. v. Ricoh
Corp., 487 U.S. 22, 33 (1988) (Kennedy, J., concurring)). The party
who is acting in violation of the forum selection clause bears the
burden of showing that the public interest factors “overwhelmingly
disfavor a transfer.” Id. at 583. Because the public interest
factors will rarely defeat a transfer motion, “the practical result
is that forum-selection clauses should control except in unusual
cases.” Id. at 582. In sum, when a defendant files such a motion,
“a district court should transfer the case unless extraordinary
6
circumstances unrelated to the convenience of the parties clearly
disfavor a transfer.” Id. at 575.
Contractual forum selection clauses are “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, 15 (1972); see also Sherman v.
RK Restaurants Holdings, Inc., No. 13-6054, 2014 WL 4540023, at *8
(E.D. La. Sept. 11, 2014). However, a court should refuse to
enforce such a clause “if enforcement would contravene a strong
public policy of the forum in which suit is brought, whether
declared by statute or by judicial decision.” The Bremen, 407 U.S.
at 15. Additionally, the clause may be unreasonable when “(1) the
incorporation of the forum selection clause into the agreement was
the product of fraud or overreaching; (2) the party seeking to
escape enforcement will for all practical purposes be deprived of
his day in court because of the grave inconvenience or unfairness
of the selected forum; [or] (3) the fundamental unfairness of the
chosen law will deprive the plaintiff of a remedy . . . .”
Haynsworth
v.
The
Corp.,
121
F.3d
956,
963
(5th
Cir.
1997)
(internal quotation marks omitted).
DISCUSSION
As discussed above, the agreement at issue contained a forum
selection
clause.
This
is
presumptively
valid.
Moreover,
the
clause is mandatory because it provides that a lawsuit shall be
7
brought in the district of Defendants’ principal office. See Caldas
& Sons, Inc. v. Willingham, 17 F.3d 123, 128 (5th Cir. 1994).
Further, the clause applies to any lawsuit “filed by either party
in connection with this Agreement or any breach thereof.” (Rec.
Doc. 11-2, at 20.) Plaintiff’s FLSA claim arises out of his
agreement
with
Defendants,
which
he
claims
is
an
employment
agreement. Thus, the forum selection clause applies to the instant
litigation.
Because a presumptively valid forum selection clause exists,
Plaintiff
bears
the
burden
of
proving
that
the
clause
is
unenforceable. Atl. Marine Const. Co., 134 S. Ct. at 582. Plaintiff
attempts to do so by showing that Louisiana holds a strong public
policy against enforcing forum selection clauses in employment
agreements. As evidence of this public policy, Plaintiff points to
Louisiana Revised Statute 23:921, which provides:
The provisions of every employment contract or
agreement, or provisions thereof, by which any foreign
or domestic employer or any other person or entity
includes a choice of forum clause or choice of law clause
in an employee's contract of employment or collective
bargaining agreement, or attempts to enforce either a
choice of forum clause or choice of law clause in any
civil or administrative action involving an employee,
shall be null and void except where the choice of forum
clause or choice of law clause is expressly, knowingly,
and voluntarily agreed to and ratified by the employee
after the occurrence of the incident which is the subject
of the civil or administrative action.
La. Rev. Stat. § 23:921(A)(2). Courts have found that this statute
evidences a strong public policy against forum selection clauses
8
in employment contracts. Sawicki v. K/S Stavanger Prince, 802 So.
2d 598, 606 (La. 2001). However, “a state law cannot automatically
void a forum selection clause, thereby subordinating federal law
. . . to an inconsistent state law.” Haughton v. Plan Adm'r of
Xerox Corp. Ret. Income Guarantee Plan, 2 F. Supp. 3d 928, 933 n.
2 (W.D. La. 2014) (internal citations omitted).
Forum selection clauses are not per se violative of Louisiana
public policy. Shelter Mut. Ins. Co. v. Rimkus Consulting Grp.,
Inc. of La., 148 So. 3d 871, 878 (La. 2014). Such clauses only
violate public policy in limited circumstances, including when
they are used in employment agreements. Id. at 881. Thus, to
prevail in his opposition to transfer, Plaintiff must demonstrate
that the instant forum selection clause appeared in an employment
agreement.
Plaintiff failed to do so. In fact, his FLSA claim
itself depends on the distinction between an employment agreement
and an independent contractor agreement. At this time, Plaintiff
has not introduced sufficient evidence to convince the Court of
the contract’s characterization.
Without further evidence, the Court cannot determine whether
the
forum
selection
clause
violates
Louisiana
public
policy.
Because the forum selection clause is presumptively valid, the
Court finds that Plaintiff failed to show that the clause is
unreasonable. Similarly, Plaintiff did not introduce evidence to
show that Defendants fraudulently inserted the clause in the
9
contract, that Plaintiff will be deprived of his day in court, or
that he will be deprived of a remedy.
Moreover, the public interest factors point towards transferring
this case to the Northern District of Oklahoma. “The public
interest factors are: ‘(1) the administrative difficulties flowing
from court congestion; (2) the local interest in having localized
interests decided at home; (3) the familiarity of the forum with
the law that will govern the case; and (4) the avoidance of
unnecessary problems of conflict of laws [or in] the application
of foreign law.’” In re Volkswagen, 545 F.3d at 315. Defendants
introduced evidence to show that the Northern District of Oklahoma
has fewer pending cases than this District. (Rec. Doc. 11-3; Rec.
Doc. 11-4.) Further, each judge has an average of 277 pending cases
in the Northern District of Oklahoma, while each judge in this
District has an average of 802 cases. Id.
Plaintiff
did
not
introduce
any
evidence
to
contradict
Defendants’ evidence, nor did Plaintiff introduce any evidence
bearing on the other public interest factors. Thus, Defendants
have demonstrated that the Northern District of Oklahoma is a more
suitable
venue
for
this
litigation.
Because
a
transfer
is
warranted, the Court will defer ruling on Plaintiff’s pending
motion to toll.
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CONCLUSION
Accordingly,
IT IS HEREBY ORDERED that Defendants’ Motion to Transfer Venue
(Rec. Doc. 14) is GRANTED.
IT IS FURTHER ORDERED that the above-captioned matter is
hereby TRANSFERRED to the United States District Court for the
Northern District of Oklahoma.
New Orleans, Louisiana this 1st day of June, 2016.
____________________________
CARL J. BARBIER
UNITED STATES DISTRICT JUDGE
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