Opinion
No. C 02-03469-CRB
October 3, 2002
ORDER GRANTING TRANSFER
This lawsuit arises out of the termination of plaintiff's employment as Chief Executive Officer of defendant HR Value Group ("HR Value"). Now before this Court is defendants' motion to transfer, motion to dismiss for lack of personal jurisdiction, motion to dismiss for improper venue, and motion to dismiss defendant CUNA Mutual Group ("CMG"). After carefully considering the papers filed by the parties and having had the benefit of oral argument, the motion to transfer is GRANTED, the motions to dismiss for lack of personal jurisdiction and improper venue are DISMISSED as moot, and the motion to dismiss defendant CUNA Mutual Group is DISMISSED without prejudice to being renewed before the transferee court.
I. BACKGROUND
A. Factual Background
Defendant HR Value is a Wisconsin limited liability corporation with its principal place of business in Wisconsin CUNA Mutual Investment Corporation, who is not a party to this action but is the subsidiary of defendant CUNA Mutual Insurance Society ("CMIS"), owns 49% of the stock of HR Value. The remaining 51% of HR Value is owned by credit union leagues or their service corporations. HR Value was formed to provide human resource products, such as recruitment, compensation and training, to credit unions. HR Value Groups's test markets during plaintiff's employment were Ohio and Pennsylvania
Defendant CMIS is a mutual insurance company incorporated in Wisconsin. Its principal place of business is also in Wisconsin CMS and its subsidiaries provide various insurance, financial services, and products to credit unions around the world. CMIS and its subsidiaries use the trade name "CUNA Mutual Group" to market its products and services.
Plaintiff, who is a California resident, was recruited and hired by HR Value to be the Chief Executive Officer. He first came to HR Value's attention through an executive recruiter, Kron/Ferry International. There were several interviews conducted between plaintiff Kron/Ferry, Thomas Olson (an HR Value Board member) and other staff from CMIS. These interviews were conducted over the phone, and in person in Chicago and Florida After the final interview, HR Value made an offer to plaintiff in California for the position of Chief Executive Officer. Olson later confirmed to offer in writing.
During the interview process, HR Value told plaintiff that the position would require plaintiff to relocate from California to the mid-west, which he did in March, 2001. Plaintiff's office was temporarily located in Madison, Wisconsin, but plaintiff then elected to move the office to Schaurnburg, Illinois. For reasons not in the record plaintiff then moved the office to Chicago, Illinois and later back to Schaurnburg. HR Value's offices remained in this location until plaintiff's termination, after which HR Value moved to Middleton, Wisconsin
Plaintiff's primary responsibilities were to develop human resource services to market to credit unions and leagues. He performed these duties either from his offices in Illinois or during business travel, which was often to the east coast HR Value never targeted credit union and leagues in California before or during plaintiff's employment, nor has HR Value done any business in California since plaintiff's termination. On August 30, 2001, HR Value discharged plaintiff on the grounds that he did not satisfactorily perform his duties of hiring staff creating human resource products, and marketing those products to credit unions.
B. Procedural History
Plaintiff filed a complaint against HR Value, CMIS, and CMG in Alameda County Superior Court for breach of contract, wrongful termination, breach of implied covenant of good faith and fair dealing, violation of Labor Code section 970, misrepresentation, employment discrimination, conversion, and interference with prospective economic advantage and contractual relations. Defendants HR Value and CMIS d.b.a CMG removed the action to this Court on the basis of diversity jurisdiction.
Defendants request that the case be transferred to the Western District of Wisconsin pursuant to 28 U.S.C. § 1404(a). Defendants argue that transfer is proper because the witnesses and most of the evidence are located in Wisconsin, Illinois, and other eastern states and because Wisconsin's interest in this controversy outweighs that of California
II. DISCUSSION
A. Legal Standard for 28 U.S.C. § 1404(a) Transfer 28 U.S.C. § 1404(a) provides: "For 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" "The defendant must make a strong showing of inconvenience to warrant upsetting the plaintiff's choice of forum." Decker Coal v. Commonwealth Edison, 805 F.2d 834, 843 (9th Cir. 1986). A plaintift's choice of forum is accorded substantial weight in proceedings under 28 U.S.C. § 1404 (a). See id.
In order to meet its heayy burden to justify a transfer, the defendants must demonstrate that the following factors strongly favor venue in Wisconsin: (1) convenience of the parties; (2) convenience of the witnesses; (3) ease of access to the evidence; (4) familiarity of each forum with the applicable law', (5) feasibility of consolidation with other claims; (6) local interest in the controversy, and (7) the relative court congestion and time of trial in each forum. Id.
In this case, feasibility of consolidation with other claims and the relative court congestion are not relevant to the analysis.
Here, defendants argue that venue is proper in the Western District of Wisconsin as both defendants reside there, part of the alleged wrong occurred there, the plaintiff once worked in Madison, Wisconsin, and witnesses reside there.
B. Analysis of relevant factors
1. Convenience of parties
This factor weighs in favor of not transferring the action since transferring to Wisconsin will simply shift the inconvenience from defendants to plaintiff. See Decker Coal, 805 F.2d at 843 (transfer is not appropriate where it would merely shift the inconvenience from one party to the other).
2. Convenience of witnesses
This factor weighs heavily in favor of transfer. All of defendants' witnesses reside in Wisconsin, Illinois and some eastern states. Also, the recruiting firm that first brought plaintiff to defendants' attention is located in Chicago. In contrast, plaintiff has presented no evidence of any witnesses that reside in California, other than plaintiff himself.
3. Ease of access to evidence
This factor weighs in favor of transfer as most of the relevant evidence is located in Wisconsin. The relevant documents pertaining to plaintiff's employment with HR Value are located at HR Value offices in Middleton, Wisconsin.
4. Governing law
This factor weighs in favor of transfening since this action will most likely apply Wisconsin state law to all of the claims, with the exception of the California Labor Code section 970 claim. HR Value was formed in Wisconsin, the employment relationship commenced in Wisconsin, the alleged discrimination and conversion occurred in Illinois, and plaintiff was terminated in Wisconsin; therefore, Wisconsin law will be applied to the claims arising out of these alleged acts.
5. Local interest of the forum in adjudicating the case
This factor weighs heavily in favor of transferring since the interest of California in adjudicating the case is limited Plaintiff lived here prior to and after his employment with HR Value and this District has an interest in this case to the extent that it has a general interest in its citizens. However, California law will not apply to nearly any of the claims in this case. This case is about employment with a Wisconsin corporation that occurred in Wisconsin and Illinois. Wisconsin has a greater interest in ensuring that its corporations comply with its laws than does California, especially with respect to employees who resided in Wisconsin (and nearby Illinois), during their employment The only thing that happened in California was that plaintiff made the decision to accept a job offer by HR Value while living there and returned to California when that employment was terminated.
6. Interest of justice factor: personal jurisdiction
Moreover, this case presents a difficult question as to personal jurisdiction over defendant HR Value. Personal jurisdiction can be either "general" or "specific," but the basic rule is that the defendant must have certain minimal contacts with the forum such that the maintenance of the suit does not offend traditional notions of fair play and substantial justice. Data Disc. Inc. v. System Technology Assoc., 557 F.2d 1280, 1287 (9th Cir. 1977) (citing International Shoe Co. v. Washington 326 U.S. 310, 316 (1945)).
This Court does not have alter ego general jurisdiction over HR Value. This Court also does not have specific jurisdiction over the breach of contract, wrongful termination, and employment discrimination California activities (i.e. employment negotiations). The alleged breach of contract and wrongful termination occurred while plaintiff was living in Illinois, alter he had moved from California likewise, any alleged employment discrimination had to have occurred in Illinois or Wisconsin.
One possible claim that this Court could have specific jurisdiction over is the conversion claim Plaintiff alleges that after he was terminated and moved back to California, HR Value took used, and converted plaintiff's intellectual property and his personal files and material for its own uses. See Compl. at ¶ 41. Plaintiff also alleges that HR Value improperly and wrongfully used his credit card alter he had moved back to California See Compl. at ¶ 42.
Plaintiff argues that these acts were aimed at plaintiff alter he returned to California and caused injuries to him while he was living in California While plaintiff was living in California when the alleged harm was done, the acts which caused the alleged harm (i.e. use of intellectual property) did not arise from the defendants' forum related activities (i.e. employment negotiations). Thus, this Court does not have personal jurisdiction over the conversion claim.
The misrepresentation and California Labor Code section 970 claims presents a more difficult jurisdictional question. Plaintiff alleges that HR Value made misrepresentations during the interview process which defrauded him and induced him to relocate to another state. However, HR Value's purposeful interjection with California is not great HR Value never physically came to California and there was an understanding by both parties that the offices would not be in California
California Labor Code section 970 governs misrepresentation in the employment setting and states: "No person, or agent or officer thereof, directly or indirectly, shall influence, persuade, or engage any person to change from one place to another in this State or from any place outside to any place within the State, or from any place within the State to any place outside, for the purpose of working in any branch of labor, through or by means of knowingly false representations, whether spoken, written, or advertised in printed form, concerning either(a) The kind, character, or existence of such work; (b) The length of time such work will last, or the compensation therefor, (c) The salutary or housing conditions relating to or surrounding the work(d) The existence or nonexistence of any strike, lockout, or other labor dispute affecting it and pending between the proposed employer and the persons then or last engaged in the performance of the labor for which the employee is sought"
The question of personal jurisdiction over the misrepresentation claims is close. Giving plaintiff the benefit of the doubt, this Court would still only have personal jurisdiction over two of plaintiff's claims as to HR Value. However, there is no doubt that the Western District of Wisconsin does have personal jurisdiction over HR Value because it is incorporated and headquartered there. Because this Court's personal jurisdiction over HR Value is not conclusive, the "interest of justice" factor weighs in favor of transfer.
C. Summary
Plaintiff's choice of forum is granted substantial weight when deciding whether to transfer pursuant to 28 U.S.C. § 1404(a); however, defendants have met their heavy burden to show that the convenience of the parties and witnesses and the interests of justice warrant transfer. This case is about plaintiff's employment with a Wisconsin corporation which occurred in Wisconsin and Illinois and as such should be litigated in Wisconsin.
III. CONCLUSION
For the foregoing reasons, defendants' motion to transfer is GRANTED. In light of this order, defendants' motions to dismiss for lack of personal jurisdiction and improper venue are DISMISSED as moot Defendants' motion to dismiss CUNA Mutual Group is DISMISSED without prejudice to being renewed before the transferee court