Listug v Molina Healthcare, Inc.
Filing
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MEMORANDUM OPINION AND ORDER. 1. Defendant's Motion to Dismiss (Doc. No. 3 ) is DENIED. 2. The Court directs the Clerk of Court to effect the transfer of this action to the Southern District of West Virginia pursuant to 28 U.S.C. § 1631. (Written Opinion). Signed by Judge Donovan W. Frank on 8/8/2014. (BJS)
UNITED STATES DISTRICT COURT
DISTRICT OF MINNESOTA
Kitda Machelle Listug,
Civil No. 14-386 (DWF/SER)
Plaintiff,
v.
MEMORANDUM
OPINION AND ORDER
Molina Information Systems, LLC,
Defendant.
________________________________________________________________________
Gerald T. Laurie, Esq., and Ian S. Laurie, Esq., Laurie & Laurie, PA, counsel for
Plaintiff.
Mary M.L. O’Brien, Esq., and R. Henry Pfutzenreuter, Esq., Meagher & Geer, PLLP,
counsel for Defendant.
________________________________________________________________________
INTRODUCTION
This matter is before the Court on a Motion to Dismiss brought by Molina
Information Systems, LLC d/b/a Molina Medicaid Solutions (“MMS” or “Defendant”). 1
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Molina Healthcare, Inc. (“Molina”) was named as the defendant in the original
Complaint. (Doc. No. 1, Ex. 1 (“Compl.”).) On March 5, 2014, Plaintiff filed an
Amended Complaint, which asserts claims against MMS, instead of its parent company,
Molina. (Doc. No. 10 (“Am. Compl.”).) Defendant submits that its counsel represents
both entities, that MMS joins the motion to dismiss, and that all facts and arguments
apply equally to both companies. (Doc. No. 16 at 1 n.1.)
MMS is a West Virginia based subsidiary of Molina. (Doc. No. 7 (“Panepinto
Aff.”) ¶ 6.) Plaintiff was employed by MMS. (Doc. No. 14 (“Listug Aff.”) ¶ 1.) The
Court refers to MMS as Defendant since MMS is the only named defendant in the
Amended Complaint and Plaintiff acknowledges that she worked for MMS.
(Doc. No. 3.) For the reasons set forth below, the Court denies the motion and transfers
this action to the Southern District of West Virginia pursuant to 28 U.S.C. § 1631.
BACKGROUND
Molina is a multi-state health care organization that assists individuals and
families who receive care through Medicaid, Medicare, and other government-funded
programs. (Compl. ¶ 2; Am. Compl. ¶ 2; Panepinto Aff. ¶ 3.) Molina is incorporated in
Delaware and has its primary place of business in California. (Panepinto Aff. ¶ 2.) MMS
is a West Virginia subsidiary of Molina, licensed to do business in West Virginia. (Id.
¶¶ 4, 6.) Defendant claims that it does not conduct business in Minnesota. (Id. ¶¶ 5, 7.) 2
Plaintiff is a resident of Brooklyn Park, Minnesota. (Compl. ¶ 1; Am. Compl.
¶ 1.) Plaintiff alleges that she has extensive experience in the health care industry and in
developing Medicaid systems in various states. (Compl. ¶ 3; Am. Compl. ¶ 5.) Plaintiff
2
Plaintiff alleges that Molina does business with Medication Management Systems,
a Minnesota business with a home office in Golden Valley, Minnesota. (Doc. No. 15
(“Laurie Aff.”) ¶¶ 2, 3, Exs. A, B.) The evidence submitted indicates that Medication
Management Systems entered into a business relationship with “Molina Healthcare,
Inc.,” whereby “Medication Management Systems will work with Molina Healthcare to
define quality medication management services for its Part D members” and further
acknowledges that Molina Healthcare “conducts its business primarily through licensed
health plans in the states of California, Florida, Michigan, Missouri, New Mexico, Ohio,
Texas, Utah and Washington.” (Id. ¶ 2, Ex. A.) This evidence does not demonstrate that
MMS provides services in the state of Minnesota. Defendant maintains that neither
Molina nor MMS conducts business in Minnesota. (Panepinto Aff. ¶¶ 5, 7.)
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was hired by MMS on April 1, 2013, as a Design, Development and Implementation
(“DDI”) coordinator. (Compl. ¶ 7; Am. Compl. ¶ 7; Listug Aff. ¶ 1.) 3
Plaintiff contends MMS initiated contact with her by e-mailing her on
January 23, 2013 to recruit her for the position at MMS. (Listug Aff. ¶¶ 3, 4, Ex. A.)
The e-mail reads: “My name is Bob Bates and Kirk recommended you to me? If you are
interested in a new opportunity, can you call me after 4PM EST either today or
tomorrow?” (Id.) Defendant asserts that MMS never recruited Plaintiff and has put forth
evidence that it maintains a website open to all internet users that lists open positions.
(Panepinto Aff. ¶ 10.) Defendant further alleges that Plaintiff reached out to MMS based
on a recommendation of one of her friends. (Id. ¶ 11.) Defendant also claims that none
of its employees met with Plaintiff in Minnesota during the hiring process. (Id.) Plaintiff
does not allege otherwise.
While working for MMS, Plaintiff provided project management services in
connection with MMS’s contract with the state of West Virginia to design, develop, and
implement its Medicaid management information system. (Compl. ¶ 4; Am. Compl. ¶ 7;
Panepinto Aff. ¶ 9.) As an employee of MMS, Plaintiff retained her principal residence
in Minnesota, returned to Minnesota most weekends to see her family, and often worked
from Minnesota on Mondays. (Am. Compl. ¶ 9.) Plaintiff alleges that she worked from
Minnesota approximately twenty percent of the time and that she paid Minnesota (not
3
MMS asserts that Plaintiff was hired as a “Technical Project Manager.”
(Panepinto Aff. ¶ 9.)
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West Virginia) income taxes. (Id.) Plaintiff asserts that she was classified as a “remote
employee” at MMS. (Am. Compl. ¶ 8.) Defendant acknowledges that Plaintiff was
allowed to work from Minnesota occasionally, but contends that she was not required to
do so. (Panepinto Aff. ¶ 2.) Defendant has submitted evidence that its contract with the
state of West Virginia provides that the position for which Plaintiff was hired was
“envisioned to be located onsite at the Bureau 100%” in West Virginia through the
design, development, and implementation stage. (Id. ¶ 13, Ex. A.)
Plaintiff alleges that Defendant withheld $2,803.01 from her salary to pay state
income taxes in Minnesota, and registered with the state of Minnesota to do so. (Listug
Aff. ¶¶ 7-8, Ex. C.) Defendant contends that it does not incur or pay any tax obligations
of its own in Minnesota.
Plaintiff filed this action in Minnesota state court on January 8, 2014, and served
the Complaint on Molina on January 23, 2013. (Doc. No. 1 (“Notice of Removal”) ¶ 1;
Compl.) Defendant removed the action to this Court on February 12, 2014. (Id.) In this
action, Plaintiff asserts three causes of action: (1) sex discrimination under the
Minnesota Human Rights Act (“MHRA”); (2) reprisal in violation of the MHRA; and
(3) intentional infliction of emotional distress. (Am. Compl. ¶¶ 28-40.) Plaintiff’s claims
against Defendant all arise from alleged discrimination and unsafe workplace practices
that occurred exclusively in West Virginia. While not relevant to the present motion, the
Court notes that the allegations of discrimination in Plaintiff’s Complaint, if proven to be
true, paint a shocking picture of the workplace conditions at Defendant’s West Virginia
Office.
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Defendant now moves to dismiss this action based on a lack of personal
jurisdiction or, in the alternative, improper venue.
DISCUSSION
I.
Personal Jurisdiction
When a defendant challenges personal jurisdiction, the plaintiff has the burden of
showing that personal jurisdiction exists. Epps v. Stewart Info. Servs. Corp., 327 F.3d
642, 647 (8th Cir. 2003). To survive a motion to dismiss for lack of personal jurisdiction,
however, the plaintiff need only make a prima facie showing of personal jurisdiction over
the defendant. Id.; Digi-Tel Holding, Inc. v. Proteq Telecomms. (PTE), Ltd., 89 F.3d 519,
522 (8th Cir. 1996) (citing Northrup King Co. v. Compania Productora Semillas
Algodoneras Selectas, S.A., 51 F.3d 1383, 1387 (8th Cir. 1995)). When considering
whether personal jurisdiction exists, the court may consider matters outside the pleadings:
“the court may inquire, by affidavits or otherwise, into the facts as they exist.” Stevens v.
Redwing, 146 F.3d 538, 543 (8th Cir. 1998) (citation omitted). For the purposes of
determining whether the plaintiff has made a prima facie showing of personal
jurisdiction, the court must view the evidence in the light most favorable to the plaintiff
and resolve all factual conflicts in the plaintiff’s favor. Digi-Tel, 89 F.3d at 522 (citing
Dakota Indus., Inc. v. Dakota Sportswear, Inc., 946 F.2d 1384, 1387 (8th Cir. 1991)).
In determining whether a court has personal jurisdiction over a non-resident
defendant, a court must ordinarily satisfy both the requirements of the state long-arm
statute and of federal due process. Northrup King, 51 F.3d at 1387. The Minnesota
long-arm statute extends jurisdiction to the maximum limit consistent with due process,
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and therefore a court in Minnesota need only evaluate whether the requirements of due
process are satisfied. Wessels, Arnold & Henderson v. Nat’l Med. Waste, Inc., 65
F.3d 1427, 1431 (8th Cir. 1995).
Federal due process requires that a defendant have “certain minimum contacts”
with the forum state such that “maintenance of the suit does not offend traditional notions
of fair play and substantial justice.” Int’l Shoe Co. v. Wash., 326 U.S. 310, 316 (1945)
(internal quotations omitted). The defendant’s conduct and connection with the forum
state must be such that the defendant should reasonably anticipate being haled into court
there. World-Wide Volkswagen Corp v. Woodson, 444 U.S. 286, 297 (1980). It is
essential in each case that the defendant has purposefully availed itself of the privilege of
conducting activities within the forum state, thus invoking the benefits and protections of
its laws. Burger King Corp. v. Rudzewicz, 471 U.S. 462, 475 (1985) (quoting Hanson v.
Denckla, 357 U.S. 235, 253 (1958)).
A court may use one of two different analyses to determine whether a defendant’s
contacts with the forum state establish personal jurisdiction. Epps, 357 F.3d at 648. In a
general jurisdiction case, a defendant maintains such “continuous and systematic”
contacts with a state that it becomes subject to the jurisdiction of that state’s courts for
any purpose. Goodyear Dunlop Tires Operations, S.A. v. Brown, 131 S. Ct. 2846, 2851
(2011) (citing Int’l Shoe Co., 326 U.S. at 317). Specific jurisdiction, on the other hand,
requires that the defendant has “purposely directed” its activities at residents of the forum
and that the litigation results from alleged injuries that “arise out of or relate to” those
activities. Wessels, 65 F.3d at 1432 (quoting Burger King, 471 U.S. at 472).
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Regardless of which analysis is used, the Eighth Circuit applies a five-factor test in
determining whether the exercise of personal jurisdiction would pass constitutional
muster: (1) the nature and quality of defendant’s contacts with the forum state; (2) the
quantity of contacts; (3) the source and connection of the cause of action with those
contacts; and, to a lesser degree, (4) the interest of the forum state; and (5) the
convenience of the parties. Wessels, 65 F.3d at 1432. The first three factors are of
primary importance, while the last two are “secondary factors.” Pecoraro v. Sky Ranch
for Boys, Inc., 340 F.3d 558, 562 (8th Cir. 2003). The third factor distinguishes between
specific and general jurisdiction. Id.
When viewing the evidence in the light most favorable to Plaintiff, the record
establishes that Defendant is not subject to jurisdiction within Minnesota. First, the Court
finds that it lacks specific jurisdiction over Defendant. In particular, Plaintiff has failed
to establish a prima facie showing that Defendant “purposely directed” its activities in
Minnesota or that the litigation results from alleged injuries that “arise out of or relate to”
those activities. Wessels, 65 F.3d at 1432 (quoting Burger King, 471 U.S. at 472). The
only contacts related to the cause of action are isolated communications with Plaintiff
when Defendant hired Plaintiff to work for it in its West Virginia office. These
communications are insufficient to confer jurisdiction. See, e.g., Lucachick v. NDS
Americas, Inc., 169 F. Supp. 2d 1103, 1107 (D. Minn. 2001) (explaining that negotiations
conducted over the telephone are not enough to confer jurisdiction); Farris v. Williams,
Civ. No. 06-609, 2006 WL 1716285, at *3 (D. Minn. June 21, 2006) (same). Moreover,
the record shows that Plaintiff was permitted, but not required, to work from home in
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Minnesota on occasion. Plaintiff’s decision to work from home in Minnesota does not
confer jurisdiction. See, e.g., Cafesjian v. Armenian Assembly of Am., Inc., Civ.
No. 07-2079, 2008 WL 906194, at *10 (D. Minn. Mar. 31, 2008) (citing Lucachick,
169 F. Supp. 2d at 1107) (“An agent’s decision to work from home in the forum state
generally does not bind an entity to personal jurisdiction in that state where the purpose
of the arrangement is merely for the agent’s personal convenience.”). Finally, Plaintiff’s
claims against Defendant relate to alleged discriminatory practices that occurred
exclusively in West Virginia. The Court concludes that Defendant’s contacts with
Minnesota are not sufficient to show that Defendant purposefully availed itself of the
privilege of conducting activities in Minnesota such that Defendant could “reasonably
anticipate being haled into court” in Minnesota. 4
Second, the Court concludes that Plaintiff has failed to establish a prima facie
case supporting the exercise of general jurisdiction. Plaintiff has failed to demonstrate
that Defendant conducted business in Minnesota or has established a business presence in
Minnesota. There is evidence that Molina (not MMS) has a business relationship, in
some capacity, with a Minnesota business, but that evidence also indicates that Molina
“conducts its business primarily through licensed health plans in the states of California,
4
Plaintiff also argues that Defendant availed itself of the benefits and privileges of
Minnesota law by withholding her Minnesota income tax from her paycheck. Plaintiff
suggests that by withholding her taxes, Defendant itself paid taxes in Minnesota and thus
has sufficient contacts with Minnesota to support jurisdiction. The Court disagrees. The
withholding of taxes was of Plaintiff’s tax obligation, not Defendant’s, and therefore does
not show purposeful availment.
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Florida, Michigan, Missouri, New Mexico, Ohio, Texas, Utah and Washington.” (Id. ¶ 2,
Ex. A.) There is no evidence that Defendant markets or sells its services, pays its own
taxes, or has offices in Minnesota. Based on a review of the record, the Court finds that
Defendant does not have continuous and systematic contacts with Minnesota such that
general jurisdiction exists in this case.
The Court acknowledges that Plaintiff, as a Minnesota resident, was allegedly
discriminated against, and it is certainly in the interest of Minnesota to provide a forum
for Plaintiff’s lawsuit. However, because the interests of the forum state are accorded
less weight by the Court, they are not sufficient to establish jurisdiction alone. And while
Plaintiff may benefit from the Court exercising jurisdiction, most witnesses and evidence
are located outside of Minnesota.
For the reasons discussed above, the Court concludes that the Court lacks personal
jurisdiction over Defendant.
II.
Venue
Defendant asserts that venue in this district is improper. Under 28 U.S.C. § 1391(a),
venue in cases based on diversity is only appropriate in:
(1) a judicial district where any defendant resides, if all defendants reside in
the same state, (2) a judicial district in which a substantial part of the events
or omissions giving rise to the claim occurred, or a substantial part of
property that is the subject of the action is situated, or (3) a judicial district
in which any defendant is subject to personal jurisdiction at the time the
action is commenced, if there is no district in which the action may
otherwise be brought.
28 U.S.C. § 1391(a). When a defendant seeks dismissal for improper venue, it bears the
burden of demonstrating that the plaintiff’s chosen venue is improper. See United States
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v. Orshek, 164 F.2d 741, 742 (8th Cir. 1947). Based on the discussion above, the Court
concludes that Minnesota is an improper venue. Defendant does not reside in the District
of Minnesota, none of the events giving rise to the claim occurred in Minnesota, and the
Court does not have jurisdiction over Defendant in Minnesota.
III.
28 U.S.C. § 1631
Defendant also moves, in the alternative, to transfer this action to the Southern
District of West Virginia pursuant to 28 U.S.C. § 1404(a). Because the Court finds that
there are insufficient contacts to support the exercise of jurisdiction over Defendant in
Minnesota, the motion to transfer is moot. Even so, the Court finds that the interests of
justice warrant transfer of this action to the Southern District of West Virginia.
Section 1631 permits federal courts to transfer an action in order to cure a want of
jurisdiction. 28 U.S.C. § 1631. To determine whether a § 1631 transfer is appropriate,
the Court must find: (1) a want of jurisdiction; (2) that the interests of justice support a
transfer; and (3) that the action could have been brought in the transferee court at the time
it was filed. Id. The Court finds all three factors are satisfied in this case. The Court,
therefore, directs the Clerk of Court to transfer this action to the Southern District of
West Virginia where jurisdiction undoubtedly rests.
CONCLUSION
Based on the files, records, and proceedings herein, and for the reasons set forth
above, IT IS ORDERED that:
1.
Defendant’s Motion to Dismiss (Doc. No. [3]) is DENIED.
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2.
The Court directs the Clerk of Court to effect the transfer of this action to
the Southern District of West Virginia pursuant to 28 U.S.C. § 1631.
Dated: August 8, 2014
s/Donovan W. Frank
DONOVAN W. FRANK
United States District Judge
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