United States District Court, M.D. Tennessee, Nashville Division
JEANNE SACKLOW, et al., individually and on behalf of all others similarly situated, Plaintiffs,
SAKS INCORPORATED, Defendant.
WAVERLY ELCRENSHAW, JR. CHIEF UNITED STATES DISTRICT JUDGE
putative class action arises out of a data breach concerning
payment cards used at Saks' stores. Fourteen named
plaintiffs have brought claims for negligence; negligence
per se; breach of implied contract; unjust
enrichment; and violation of various state unfair
competition, data breach, consumer protection, and consumer
fraud statutes. (Doc. No. 51.) Before the Court is Saks'
Motion to Transfer Venue (Doc. No. 55) to the Southern
District of New York pursuant to 28 U.S.C. § 1404(a), to
which Plaintiffs have responded in opposition (Doc. No. 57)
and Saks has replied (Doc. No. 58). The parties have also
submitted supplemental authority. (Doc. Nos. 87, 89, 90.) For
the following reasons, the motion will be granted.
Factual Allegations and Background
April 1, 2018, Saks announced that it “became aware of
a data security issue involving customer payment card
data.” (Doc. No. 51 at ¶ 3.) On April 27, 2018,
Saks disclosed that hackers had placed malware on Saks'
retail systems in order to collect customer payment card
information, including cardholder name, payment card number
and expiration dates, when shoppers used their credit and
debit cards at its stores. (Id. at ¶ 4.) The
Amended Complaint alleges that this data breach was enabled
by Saks security failures and failure to abide by best
practices and industry standards concerning the security of
payment systems. (Id. at ¶¶ 6-7.)
a Tennessee corporation. (Id. at ¶ 11.)
However, Saks has no offices or employees in Tennessee. (Doc.
No. 56-9 at ¶¶ 5-6.) Saks does not own or operate
any of its Saks Fifth Avenue or Saks OFF 5TH stores in
Tennessee. (Id. at ¶ 7.) There is no Saks Fifth
Avenue store within 100 miles of Nashville, Tennessee.
(Id. at ¶ 8.) There is one Saks OFF 5TH store
in Tennessee, but it is not owned or operated by Saks
(rather, by another entity not party here and not itself
incorporated in Tennessee). (Id. at ¶ 9.) The
headquarters and principal place of business of Saks and its
corporate parent, Hudson's Bay Company, is in New York.
(Doc. Nos. 2 at ¶ 5; 56-9 at ¶ 3.) Saks operates 29
Saks Fifth Avenue and Saks OFF 5TH stores in New York. (Doc.
No. 56-9 at ¶¶ 10-11.)
are fourteen named plaintiffs in this action. None of them
reside in Tennessee or within 100 miles of Nashville. None of
the named plaintiffs is alleged to have shopped at the one
Saks OFF 5TH store in Tennessee. (Doc. No. 51.) Five of the
named plaintiffs live in New York and are alleged to have
shopped at Saks stores in New York. (Id. at
¶¶ 18, 19, 20, 21, 22.) Two additional named
plaintiffs reside nearby in New Jersey. (Id. at
¶¶ 16-17.) The remaining named plaintiffs reside in
Arizona, California, Florida, Illinois, Georgia,
Pennsylvania, and Texas. (Id. at ¶¶ 12,
13, 14, 15, 23, 24, 25.) The named plaintiffs seek to
represent a national class of persons who used a credit or
debit card at a Saks store from May 1, 2017 to April 1, 2018,
or, in the alternative, sub-classes of those persons across
eight different states, none of which is Tennessee. (See
id. at ¶¶ 66-67.)
Saks data breach incident led to multiple lawsuits. Two of
the named plaintiffs filed suit here in the Middle District
of Tennessee. At the same time, five similar actions were
filed in the Southern District of New York. Four of
those actions were filed by seven current named plaintiffs in
this action (Vains, Lefkowitz, Tafet, Carthan,
Levitt-Raschella, Joseph, and Wade). On April 18, 2018, Vains
- now a plaintiff in this action - filed a motion with the
Judicial Panel on Multi-District Litigation
(“JPML”) to transfer the then-pending (and any
subsequent) data breach cases to a single judge in the
Southern District of New York pursuant to 28 U.S.C.
§ 1407. (Doc. No. 56-2.) The motion argued that
consolidation in the Southern District of New York was
appropriate because that was where the defendants
“maintain their headquarters and central operations in
the United States.” (Id. at ¶ 10.) The
motion highlighted that the actions all sought national
classes for Saks and Lord & Taylor shoppers based on the
data breach incident under the common law and state statutory
theories of liability. (Id.) Further, the Motion
stated: “Absent transfer and consolidation, there is a
substantial risk of inconsistent rulings on issues ranging
from discovery to class certification in each case.
Centralization would eliminate that risk, conserve judicial
resources, reduce litigation costs, and permit the cases to
proceed to trial in a more efficient manner.”
(Id. at ¶ 9.) Eight other plaintiffs in
this action supported that motion for consolidation
in the Southern District of New York. (See Doc. Nos.
56-3, 56-4.) In one filing, some of those plaintiffs said
that the Southern District of New York is “the most
appropriate forum” and “the preferable
court” because it is accessible, the defendants
maintained their headquarters there, and witnesses and
evidence were present. (Doc. No. 56-4 at 5.) Those eight
plaintiffs noted that the Middle District of Tennessee might
“also be appropriate” in the alternative.
(Id.; see also Doc. No. 56-3 at 3.)
August 1, 2018, the JPML declined to centralize the cases
under § 1407. (Doc. No. 56-1.) It did so because
“centralization under Section 1407 should be the last
solution after considered review of all other options.”
(Id. at 1.) The JPML explained, “where
‘a reasonable prospect' exists that the resolution
of a Section 1404 motion or motions could eliminate the
multidistrict character of a litigation, transfer under
Section 1404 is preferable to Section 1407
centralization.” (Id.) After specifically
noting that one California district court had already
transferred a Saks data breach case to the Southern District
of New York under § 1404, the JPML observed that
“although no Section 1404 motion has yet been filed in
the Middle District of Tennessee action, those plaintiffs
also are New York residents and support centralization in
either the Southern District of New York or the Middle
District of Tennessee.” (Id. at 2.) But the
likely future for these cases in New York that the JPML seems
to have anticipated never came. Within two weeks of the
JPML's decision, four of the Saks data breach actions
pending in the Southern District of New York were voluntarily
dismissed. (Doc. No. 56 at 7 (collecting cases).) All but one
of the plaintiffs from those dismissed New York actions were
added to this action in Tennessee, and they now resist
transfer to the Southern District of New York.
this case has been pending, several other Saks data breach
cases have been transferred. In a case similar to this in the
Central District of California, Mekerdijian v. Saks Fifth
Avenue LLC, et al., the court considered a similar
motion to transfer under § 1404(a) and was presented
essentially the same declarations that now accompany the
motion before this Court. The court concluded that, despite
the fact that the complaint alleged extensive violations of
California law, transfer to the Southern District of New York
was clearly warranted under the relevant considerations.
(See Doc. No. 56-7.) After Mekerdijian was
transferred to New York, the plaintiffs dismissed the case.
(Doc. No. 56 at 8.)
months later, another case from California was transferred by
stipulation under § 1404(a) to the Southern District of
New York. (See Doc. No. 56-8); Rudolph v.
Hudson's Bay Co., et al. (S.D.N.Y. No. 1:18-cv-8472
(PKC)). The plaintiffs in this action recently
attempted to intervene in the Rudolph case so they
could move to dismiss, stay, or transfer it. Their motion was
denied. (Doc. No. 87-1.) As the Court considers this §
1404(a) motion, the Rudolph putative class action
based on the same data breach actively proceeds in the
Southern District of New York.
there is an additional case against a related entity arising
from the data breach that has been proceeding outside of the
Middle District of Tennessee. Up until very recently, a
putative class action against Lord & Taylor has been
pending in the District of Delaware. See Harris, et al., v.
Lord & Taylor LLC (D. Del. No. 1:18-cv-00521).
Indeed, Harris involves some of the very same
named plaintiffs as this case against Saks. On April 25,
2019, the District of Delaware granted the § 1404(a)
motion of Lord & Taylor, which is incorporated in
Delaware, to transfer the Harris case to the
Southern District of New York. (Doc. No. 90-1.) After noting
that none of the named plaintiffs lived or were alleged to
have shopped in Delaware, the court found that there was
“no indication that any of the claims arose in
Delaware” and rejected the named plaintiffs'
argument that this action arose outside of New
York. (Id. at 6-7.) The court also
found that the convenience of the parties weighed in favor of
transfer because “the substantial majority of the
parties “ are in and around New York and “all
would have to travel” to Delaware for litigation
purposes. (Id. at 7-8.) Finally, the court concluded
that transfer was appropriate so one district court could
resolve similar claims arising from the same underlying
events. (Id.at 10-11.)
the Southern District of New York is now home to two putative
class actions arising from the data breach incident.
Saks seeks transfer of this action pursuant to 28 U.S.C.
§ 1404(a), which provides 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.” With this statute, “Congress intended
to give district courts the discretion to transfer cases on
an individual basis by considering convenience and
fairness.” Kerobo v. Sw. Clean Fuels Corp.,
285 F.3d 531, 537 (6th Cir. 2002). “The onus of showing
that a plaintiff's choice of forum is unnecessarily
burdensome falls on the defendant, ” and it is a
substantial one. Heffernan v. Ethicon Endo-Surgery
Inc., 828 F.3d 488, 498 (6th Cir. 2016); Smith v.
Kyphon, Inc., 578 F.Supp.2d 954, 958 (M.D. Tenn. 2008).
Unless the balance is strongly in favor of the defendant, a
plaintiff's choice of forum should rarely be disturbed.
Reese v. CNH America LLC, 574 F.3d 315, 320 (6th
Cir. 2009); Dowling v. Richardson-Merrell, Inc., 727
F.2d 608, 612 (6th Cir. 1984). A defendant ...