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Cobble v. 20/20 Communications, Inc.

United States District Court, E.D. Tennessee, Greeneville Division

November 2, 2017

JAMES COBBLE, et al., Plaintiffs,
v.
20/20 COMMUNICATIONS, INC., Defendant.

          REPORT AND RECOMMENDATION

          Clifton L. Corker United States Magistrate Judge.

         Defendant 20/20 Communications has filed a Motion to Transfer the Claims of the Opt-In Plaintiffs [Doc. 46] and Supplemental Motion to Transfer Claims of the Opt-in Plaintiffs [Doc. 66]. Plaintiffs have responded, opposing the relief [Doc. 63, 74]. The matter is before the undersigned pursuant to 28 U.S.C. § 636 and an Order of Reference from the District Court [Doc. 77].

         Defendant also filed a Motion for a Rule 16 Conference and to Stay Discovery [Doc. 55]. That motion was also referred to the undersigned for a Report and Recommendation [Doc. 58]. Finally, Plaintiffs have filed a “expedited motion to certify class and facilitate notice to potential opt-in Plaintiffs” [Doc. 71]. This motion was referred to the undersigned by order of reference[1][Doc. 76]. All of these motions have been fully briefed and are ripe for resolution.

         For the reasons stated herein, the undersigned RECOMMENDS Defendant's motion to transfer [Doc. 46, 66] be GRANTED. By granting this motion to transfer, Defendant's motion to stay discovery is rendered MOOT [Doc. 55] as is Plaintiffs' expedited motion to certify class [Doc. 71]. Thus, the undersigned RECOMMENDS these motions [Docs. 55, 71] be DENIED AS MOOT.

         I. BACKGROUND

         On April 5, 2017, Plaintiff James Cobble (“Plaintiff”) filed this action under the Fair Labor Standards Act, (“FLSA”), 29 U.S.C. § 201 et seq., on behalf of himself and other employees similarly situated alleging 20/20 Communications (“Defendant”) required him to work more than 40 hours a week without paying him overtime compensation [Doc. 1]. Plaintiff Cobble is a resident of Tennessee and worked for Defendant in Tennessee. Since the filing of the complaint, a number of non-resident prospective Plaintiffs have given notice of their consent to opt-in, alleging they are “similarly situated” as Plaintiff Cobble.[2] See 29 U.S.C. § 216(b). These prospective Plaintiffs are from all over the United States.

         Defendant is a Delaware corporation and maintains its principal place of business in Tarrant County, Fort Worth, Texas, which is located in the Northern District of Texas. Defendant's motion to transfer the case to the Northern District of Texas is based on two arguments: (1) Plaintiffs entered into a written employment agreement which contained a forum- selection clause designating the Northern District of Texas as the forum in which disputes were to be litigated; and (2) this Court lacks specific and general jurisdiction to address Plaintiffs' claims. Plaintiffs oppose the motion.

         II. ANALYSIS

         A. Venue

         Defendant claims this Court should transfer the opt-in Plaintiffs case to the Northern District of Texas because each of the prospective Plaintiffs entered into an employment contract which contained a forum-selection clause, designating the Northern District of Texas as the proper forum to address any disputes involving the parties. A defendant's motion to transfer a case pursuant to a valid forum-selection clause should be considered a motion to transfer venue under 28 U.S.C. § 1404(a); Atl. Marine Constr. Co., Inc. v. U.S. Dist. Ct. for W.D. Tex., --- U.S. __, 134 S.Ct. 568, 579 (2013). Section 1404(a) authorizes the district court to transfer any civil action to another district “where it might have been brought or to any district … to which all parties have consented….” The focus of a typical Section 1404(a) transfer motion is on the “convenience of the parties and witnesses, [and] in the interest of justice … to prevent the waste ‘of time, energy and money' and ‘to protect litigants, witnesses, and the public against unnecessary inconvenience and expense....'” 28 U.S.C. § 1404(a); Van Dusen v. Barrack, 376 U.S. 612, 616, 84 S.Ct. 805, 11 L.Ed.2d 945 (1964) (quoting Cont'l Grain Co. v. Barge F.B.L.-585, 364 U.S. 19, 26, 27, 80 S.Ct. 1470, 4 L.Ed.2d 1540 (1960)). “[I]f a case is transferred via § 1404(a), the law of the transferor court applies.” K-Tex, LLC v. Cintas Corp., 693 Fed.Appx. 406, 409 (6th Cir. 2017)(citing Van Dusen, 376 U.S. at 642). In considering a transfer motion, a plaintiff's choice of forum deserves “foremost consideration” and should not be disturbed unless the balance of factors strongly favors the defendant. West Amer. Insurance Co. v. Potts, No. 89-6091, 1990 WL 104034 at *2 (6th Cir. July 25, 1990) (unpublished) (citing Nicol v. Koscinski, 188 F.2d 537 (6th Cir. 1951)).

         But where there is a valid forum-selection clause, those considerations do not enter in the analysis. A plaintiff's choice of forum and the private-interest factors such as the convenience of the parities and witnesses are given no weight. Atl. Marine, 134 S.Ct. at 581-83. Moreover, a § 1404(a) transfer based on a forum-selection clause also does not carry with it the original venue's choice-of-law rules. Id. at 581-83. Rather, the Court's focus is on whether the forum selection clause is valid in the first instance. If the clause is valid, then the Supreme Court has held that it “should be given controlling-weight in all but the most exceptional cases.” Atl. Marine, 134 S.Ct. at 581 (citing Stewart Organization, Inc. v. Ricoh Corp., 487 U.S. 22 (1988)). The burden is on the plaintiff to show a transfer is not warranted. Id. at 581.

         In an effort to show the “most exceptional case, ” Plaintiffs make a number of objections. Id. Plaintiffs claim that because Defendant has only produced Agreements for roughly half of the opt-in Plaintiffs, it cannot prove “that half of the opt-in Plaintiffs signed the ‘Agreements' containing the venue selection clause in the first instance.” [Doc. 63, pg .2]. For those Plaintiffs, they argue that there is “no evidence” of an offer and acceptance, the sine qua non for an enforceable contract. In its reply, Defendant notes that it has “provided unrebutted sworn testimony that its electronic onboarding process made it impossible for any opt-in Plaintiff to have become an employee without entering into the Agreements.” [Doc. 75, pg. 2] (emphasis in original).

         Fed.R.Evid. 1004 addresses Plaintiffs concerns about the existence of the written contract. It provides that “[a]n original is not required and other evidence of the content of a writing, recording, or photograph is admissible if … all the originals are lost or destroyed, and not by the proponent acting in bad faith….” In this case, Defendant has produced Agreements for roughly half of the Plaintiffs. The ones it could not produce, Defendant alleges, were destroyed, not in bad faith, but by its onboarding vendor, Enwisen, “which had electronically maintained the Agreements.” [Doc. 75, pg. 1, n. 3]. Defendant notes that Enwisen stored the documents for only a short time after Defendant terminated its business relationship with them. The documents were then deleted. Plaintiffs do not challenge that assertion. Instead, they simply claim a lack of evidence. It is clear based on the record that all the job applicants (and ultimately prospective Plaintiffs) followed the same procedure to apply for a job with Defendant. All of them signed the Agreement in order to be considered for employment. Thus, given the unrebutted sworn testimony that all of the Field Sales Manager applicants had to proceed through Defendant's onboarding process and that this process required the applicant to sign the Agreement containing the forum-selection clause, the Court finds that all Plaintiffs entered into the Agreement, and each Agreement contained the forum-selection clause at issue.

         Plaintiffs then claim the forum-selection clause is not valid. For this issue, the Sixth Circuit has instructed courts to look to three factors when ...


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