JOSEPH C. SPERO, United States Chief Magistrate Judge.
Plaintiffs in this putative class action are former Minor League baseball players who assert claims under the federal Fair Labor Standards Act ("FLSA") and California, Florida, Arizona, North Carolina and New York wage and hour laws against the Office of the Commissioner of Baseball doing business as Major League Baseball ("MLB") and its thirty member franchises. Presently before the Court are two sets of motions challenging personal jurisdiction and venue.
With respect to personal jurisdiction, two motions to dismiss have been filed in this action (the "Motions to Dismiss"). First, ten of the MLB Clubs named as Defendants in the Complaint — Atlanta National League Baseball Club, Inc., Boston Red Sox Baseball Club L.P., Chicago White Sox, Ltd., Cleveland Indians Baseball Co., Inc., Cleveland Indians Baseball Co., L.P., Detroit Tigers, Inc., New York Yankees Partnership, The Phillies, Pittsburgh Associates, L.P., Tampa Bay Rays Baseball, Ltd., and Washington Nationals Baseball Club, LLC ("Proskauer PJ Defendants") bring a Motion to Dismiss the Consolidated Amended Complaint as Against Certain Defendants for Lack of Personal Jurisdiction, Docket No. 281 ("Proskauer Motion to Dismiss"). Second, Defendant Baltimore Orioles Limited Partnership and Baltimore Orioles, Inc. (collectively, "Baltimore Orioles") join in the Proskauer Motion to Dismiss and also bring a Motion to Dismiss the Consolidated Amended Complaint for Violations of Federal and State Wage and Hour Laws Against the Baltimore Orioles Limited Partnership and Baltimore Orioles, Inc., Docket No. 285 ("Baltimore Orioles Motion to Dismiss"). The Court refers collectively to the Defendants who seek dismissal on the basis of lack of personal jurisdiction as the "Personal Jurisdiction Defendants."
Similarly, two motions seeking transfer under 28 U.S.C. § 1404(a) have been filed ("the Transfer Motions"). First, all of the Defendants except the Baltimore Orioles ("Proskauer Transfer Defendants") bring a Motion to Transfer Action to Middle District of Florida, Docket No. 283 ("Proskauer Transfer Motion"). Second, the Baltimore Orioles join in the Proskauer Transfer Motion and also bring a Motion to Transfer Case to the Middle District of Florida Filed by Defendants Baltimore Orioles, Inc. and Baltimore Orioles Limited Partnership ("Baltimore Orioles Transfer Motion"). In these motions, Defendants ask that the entire case be transferred to the Middle District of Florida.
For the reasons stated below, the Court GRANTS in part and DENIES in part the Proskaur Motion to Dismiss and GRANTS the Baltimore Orioles' Motion to Dismiss. The Court DENIES the Transfer Motions.
MLB is an unincorporated association whose members are the thirty MLB Clubs named as defendants in this action. SCAC, ¶ 62. Each MLB Club is affiliated with several Minor League teams, organized into "classes" roughly reflecting the skill levels of the players. Id., ¶ 169. Although some Minor League teams are directly owned by an MLB Club, most Minor League teams are independently owned and operated pursuant to Player Development Contracts ("PDCs"), agreements by which a Minor League club agrees to "affiliate" itself with an MLB Club for a certain time period. Id., ¶ 171.
MLB teams employ a small number of players who play at the highest level, the Major Leaguers. Id., ¶ 146. They also employ a larger number of Minor Leaguers, who the teams acquire through either an amateur draft or free agency. Id., ¶¶ 147, 150. The Minor Leaguers begin at the "Rookie" level and then, ideally, advance to higher levels (Class-A, Advanced Class-A, Double-A and Triple-A), potentially leading to the major leagues. Id., ¶ 169. Many Minor Leaguers do not advance past Class-A. Id.
MLB operates a scouting service known as the Major League Baseball Scouting Bureau ("Scouting Bureau") that evaluates amateur players on behalf of all the Defendants. Id., ¶ 163. MLB owners created the centralized service in 1974, and it operates under the umbrella of the Office of the Commissioner. Id. The Scouting Bureau hosts tryouts for amateur players seeking to enter the industry, and its scouts attend amateur games throughout the country and in Latin America to develop reports on amateur players. Id.
MLB rules require that all teams use the same uniform player contract ("UPC") when signing players. Id., ¶ 164. Under the UPC, players receive a salary during the championship season, which lasts approximately five months. Id., ¶¶ 182-83. They are not compensated during the remainder of the year. Id., ¶ 183. The UPC imposes "duties and obligations" that "continue in full force throughout the calendar year," however. Id. Thus, during the offseason,
Plaintiffs are former and current Minor League baseball players who allege that they were paid "illegally low wages during the championship season, no overtime wages, and no wages for work performed outside the championship season." Id., ¶¶ 19-61, 189. Defendants are the Office of the Commissioner of Baseball and MLB's thirty member franchises. Id., ¶¶ 62-102. Plaintiffs assert twenty state law wage and hour claims on behalf of a number of putative classes (including a California class)
The Proskauer PJ Defendants are ten MLB Clubs that contend they are not subject to personal jurisdiction in California. Proskauer Motion to Dismiss at 1. According to these defendants, they "do not have any Minor League affiliates based in California or that play games in California, and do not have any operations whatsoever in California." Id. at 4 (citing Dkt. No. 115-1 ("Heller Decl.") at ¶ 8; Dkt No. 115-2 ("Steward Decl.") at ¶ 8; Dkt No. 115-3 ("Znidarsic Decl.") at ¶ 8; Dkt. No. 115-4 ("Corvino Decl.") at ¶ 8; Dkt No. 115-5 ("Westhoff Decl.") at ¶ 8; Dkt. No. 115-6 ("Trost Decl.") at ¶ 8; Dkt No. 115-7 ("Strouse Decl.") at ¶ 8; Dkt No. 115-8 ("Stroh Decl.") at ¶ 8; Dkt. No. 115-9 ("Higgins Decl.") at ¶ 8; Dkt. No. 115-10 ("Jones Decl.") at ¶ 8)). They assert that their primary connection with California is that "their Major League Baseball Clubs occasionally play baseball games against other California-based Major League Clubs in California." Id. (citing Heller Decl. at ¶ 7; Steward Decl. at ¶ 7; Znidarsic Decl. at ¶ 7; Corvino Decl. at ¶ 7; Westhoff Decl. at ¶ 7; Trost Decl. at ¶ 7; Strouse Decl. at ¶ 7; Stroh Decl. at ¶ 7; Higgins Decl. at ¶ 7; Jones Decl. at ¶ 7). In particular, the Proskauer PJ Defendants represent that aside from "sporadic travel to California by individual employees and a small number of California-based employees," they travel to California to play Major League baseball games only one and three times per year and those trips are relatively short, ranging in duration from two to ten days per trip. Id. (citing Declaration Of Elise M. Bloom In Support Of Motion To Dismiss The Consolidated Amended Complaint As To Certain Defendants For Lack Of Personal Jurisdiction ("Bloom Jurisdiction Decl."), Ex.
The Proskauer PJ Defendants further state that they "are not licensed to do business in California; are incorporated in or organized under the laws of states other than California; maintain their principal places of business outside of California; and do not own or rent property, maintain bank accounts, or have a designated agent in the State of California." Id. at 5 (citing Heller Decl. at ¶¶ 2-6; Steward Decl. at ¶¶ 2-6; Znidarsic Decl. at ¶¶ 2-6; Corvino Decl. at ¶¶ 2-6; Westhoff Decl. at ¶¶ 2-6; Trost Decl. at ¶¶ 2-6; Strouse Decl. at ¶¶ 2-6; Stroh Decl. at ¶¶ 2-6; Higgins Decl. at ¶¶ 2-6; Jones Decl. at ¶¶ 2-6) (emphasis in original). Nor do they "receive any income from tickets, concessions, parking or similar items for regular season games played as a visiting Club in California," the Proskauer PJ Defendants contend. Id. (citing Bloom Jurisdiction Decl., Ex. K (Defendant MLB's Supplemental Objection and Answer to Interrogatory No. 5); id., Exs. A-J (Moving Defendants' Supplemental Objection and Answer to Interrogatory No. 10)).
The Proskauer PJ Defendants assert that exercise of personal jurisdiction in California is not consistent with due process and California's long-arm statute, Cal. Code Civ. Proc. § 410.10, because they do not have sufficient minimum contacts with California to comport with "traditional notions of fair play and substantial justice." Id. at 6-7 (citing Walden v. Fiore, ___ U.S. ___, ___, 134 S.Ct. 1115, 1121, 188 L.Ed.2d 12 (2014); Mavrix Photo, Inc. v. Brand Techs., Inc., 647 F.3d 1218, 1223 (9th Cir.2011); Int'l Shoe Co. v. Washington, 326 U.S. 310, 316, 66 S.Ct. 154, 90 L.Ed. 95 (1945)). In particular, the Proskauer PJ Defendants argue that they are not subject to personal jurisdiction under the doctrines of either general or specific jurisdiction. Id.
The Proskauer PJ Defendants argue that the theory of general jurisdiction applies only if their "affiliations with the State are so continuous and systematic as to render them essentially at home in the forum State." Id. (quoting Goodyear Dunlop Tires Operations, S.A. v. Brown, ___ U.S. ___, ___, 131 S.Ct. 2846, 2851, 180 L.Ed.2d 796 (2011) (quotations and citations omitted)). This is a high standard, they assert, requiring that the contacts of a defendant corporation "approximate physical presence" in the state. Id. at 7-8 (citing Brand v. Menlove Dodge, 796 F.2d 1070, 1073 (9th Cir.1986); Bancroft & Masters, Inc. v. Augusta Nat'l, Inc., 223 F.3d 1082, 1086 (9th Cir.2000)). They argue that merely "engaging in commerce with residents of the forum state is not in and of itself the kind of activity that approximates physical presence within the state's borders." Id. at 8 (quoting Bancroft & Masters, Inc., 223 F.3d at 1086 (internal quotations omitted)). They also point to the Supreme Court's recent statement that "it would be the `exceptional case' where `a corporation's operations in a forum other than its formal place of incorporation or principal place of business may be so substantial and of such a nature as to render the corporation at home in that State.'" Id. (quoting Daimler AG v. Bauman, ___ U.S. ___, ___, 134 S.Ct. 746, 761, n. 19, 187 L.Ed.2d 624 (2014)).
In light of these stringent requirements, the Proskauer PJ Defendants argue, their limited contacts with California related to the occasional major league games that are played here are insufficient to show that they are "at home" in California or to support general jurisdiction. Id. at 8. Further, the Proskauer PJ Defendants assert, the fact that MLB does not challenge personal jurisdiction in California has no
The Proskauer PJ Defendants further assert that case law specifically addressing personal jurisdiction in the context of sports teams supports the same conclusion. Id. at 10-11 (citing Davis v. Billick, Case No. 301CV1964D, 2002 WL 1398560, at *6 (N.D.Tex. June 26, 2002); Manton v. Cal. Sports, Inc., 493 F.Supp. 496, 496-98 (N.D.Ga.1980); Sullivan v. Tagliabue, 785 F.Supp. 1076, 1081 (D.R.I.1992); Evans v. Boston Red Sox, Case No. 13-00262 SOM BMK, 2013 WL 6147675, at *4-5, 2013 U.S. Dist. LEXIS 166307, at *10-12 (D.Haw. Nov. 22, 2013); Donatelli v. Nat'l Hockey League, 893 F.2d 459 (1st Cir. 1990)).
Nor do communications with California residents support a finding of general jurisdiction, the Proskauer PJ Defendants contend. Id. at 11 (citing Gates Learjet Corp. v. Jensen, 743 F.2d 1325, 1331 (9th Cir.1984); SRE-Cheaptrips, Inc. v. Media Synergy Grp., LLC, Case No. 09-cv-00622-S-EJL, 2010 WL 1913589, at *2 (D.Id. May 12, 2010); MMCA Grp., Ltd. v. Hewlett-Packard, Co., Case No. 06-cv-7067 MMC (EMC), 2007 WL 1342586, at *5 (N.D.Cal. May 8, 2007)). Even to the extent such communications might be evidence that players who reside in California performed work during the offseason, they argue, this evidence would not support a finding of general jurisdiction because it is well-established that such unilateral activities, based on those players' choice to live in California, cannot give rise to general jurisdiction. Id. at 11-12 (citing McGlinchy v. Shell Chem. Co., 845 F.2d 802, 816-17 (9th Cir.1988); Hall v. Nat'l Basketball Ass'n, 651 F.Supp. 335, 339 (D.Kan.1987)). Finally, the Proskauer PJ Defendants argue that intermittent travel to California by their employees is not sufficient to support general jurisdiction. Id. at 12-14 (citing A.C.K. Sports, Inc. v. Doug Wilson Enters., Inc., 661 F.Supp. 386 (S.D.N.Y.1987); Collyard v. Washington Capitals, 477 F.Supp. 1247, 1250, n. 3 (D.Minn.1979); Munchak Corp. v. Riko Enterprises, Inc., 368 F.Supp. 1366, 1374 (M.D.N.C.1973); Core-Vent Corp. v. Nobel Indus. AB, 11 F.3d 1482, 1490 (9th Cir. 1993); Autogenomics, Inc. v. Oxford Gene Tech., Ltd., 566 F.3d 1012, 1018 (Fed.Cir. 2009); Bancroft & Masters, Inc. v. Augusta Nat'l., Inc., 45 F.Supp.2d 777, 781 (N.D.Cal.1998), reversed on other grounds, 223 F.3d 1082 (9th Cir.2000); Vice v. Woodline USA, Inc., Case No. C 10-04103 CW, 2011 WL 207936, at *2-3, 2011 U.S. Dist. LEXIS 8014, at *6-7 (N.D.Cal. Jan. 21, 2011); Reiffin v. Microsoft Corp., Case No. 11-cv-03505 CRB, 2012 WL 1309179, at *11 (N.D.Cal. Apr. 16, 2012)).
Id. (citing Boschetto v. Hansing, 539 F.3d 1011, 1016 (9th Cir.2008)). In the class action context, they assert, "courts may not consider a defendant's contacts with unnamed putative class members residing in the forum state when considering specific jurisdiction." Id. (citing Ambriz v. Coca Cola, Case No. 13-cv-03539-JST, 2014 WL 296159 (N.D.Cal. Jan. 27, 2014)). The Proskauer PJ Defendants contend Plaintiffs fail to meet any of the three requirements for specific jurisdiction. Id.
With respect to the first part of the test, which requires either "purposeful availment" or "purposeful direction," the Proskauer PJ Defendants argue that there is no evidence of "purposeful availment" because they have not "performed some type of affirmative conduct which allows or promotes the transaction of business within the forum state." Id. at 14-15 (quoting Sinatra v. Nat'l Enquirer, Inc., 854 F.2d 1191, 1195 (9th Cir.1988)). The "purposeful direction" requirement, which is the one that applies to cases like this one, involving wage-and-hour claims, also is not met, the Proskauer PJ Defendants assert. Id. at 15 (citing Enriquez v. Interstate Group, LLC, Case No. 11-cv-05155 YGR, 2012 WL 3800801, at *3 (N.D.Cal. Aug. 31, 2012); Holliday v. Lifestyle Lift, Inc., Case No. 09-cv-4995 RS, 2010 WL 3910143, at *3 (N.D.Cal. Oct. 5, 2010)).
Purposeful direction, according to the Proskauer PJ Defendants, requires that "Defendants must have: (1) committed an intentional act that was; (2) expressly aimed at the forum state and which; (3) caused harm that Defendants knew was likely to be suffered in the forum state." Id. (quoting Schwarzenegger v. Fred Martin Motor Co., 374 F.3d 797, 803 (9th Cir. 2004)). Even assuming the first and third requirements are met, the express aiming requirement is not, the Proskauer PJ Defendants assert. Id. at 15-17. In particular, any contacts the Proskauer PJ Defendants may have with Minor League players in California are "simply a function of where the players chose to live in the offseason" and are not the result of any intentional conduct on the part of the Proskauer PJ Defendants. Id. at 16-17 (citing Walden, 134 S.Ct. at 1123; Slepian v. Guerin, 172 F.3d 58, 1999 WL 109676 (9th Cir.1999) (unpublished disposition); Novak v. NanoLogix, Inc., Case No. 13-cv-01971 EJD, 2014 WL 991119, at *2 (N.D.Cal. Mar. 11, 2014); SRE-Cheaptrips, Inc., 2010 WL 1913589 at *4; Hall, 651 F.Supp. at 339).
The Proskauer PJ Defendants argue that the second part of the specific jurisdiction test is not satisfied because Plaintiffs' claims do not arise out of or relate to the Proskauer PJ Defendants' forum-related activities. Id. at 17-18. This requirement, they contend, is satisfied only if the plaintiffs' claims "would have arisen but for the defendants' contacts with California." Id. (citing Doe v. Unocal Corp., 248 F.3d 915,
Finally, the third requirement for specific jurisdiction, that exercise of jurisdiction must be reasonable, also is not met, the Proskauer PJ Defendants assert. Id. at 18-20. In determining whether this requirement is met, they contend, courts consider the following seven factors:
Id. (citing CE Distrib., LLC. v. New Sensor Corp., 380 F.3d 1107, 1112 (9th Cir. 2004)). According to the Proskauer PJ Defendants, these factors weigh in favor of finding that exercise of personal jurisdiction over them is not reasonable. Id.
The Proskauer PJ Defendants contend the first factor favors their position because, for the reasons discussed above, their contacts with California do not amount to "purposeful interjection" and they have not sought the protection of California's laws. Id. at 19. They argue that the second factor, the burden of defending in California, is substantial "because it would require each Club's representatives and employees to travel out-of-state to litigate claims that did not arise here." Id. The Proskauer PJ Defendants concede the third factor is neutral, but assert the fourth factor favors their position because "California does not have a compelling interest in adjudicating the dispute where the conduct at issue did not take place within its borders." Id. (citing Fed. Deposit Ins. Corp. v. British-Am. Ins. Co., 828 F.2d 1439, 1444 (9th Cir. 1987)). The fifth factor, efficiency of the forum, turns primarily on where witnesses and evidence are likely to be located and weighs "heavily in favor of dismissal," the Proskauer PJ Defendants assert, because "the evidence related to the Moving Defendants' Minor League operations exists exclusively outside of California." Id. (citing Core-Vent Corp., 11 F.3d at 1489). Further, they argue, "[l]itigating Plaintiffs' claims against the Moving Defendants in California would be demonstrably inconvenient because out-of-state witnesses would be required to travel here to testify about events which occurred outside of California." Id. The Proskauer PJ Defendants note that the sixth factor, which looks to the convenience and effectiveness of relief in the forum, is "not of paramount importance." Id. at 20 (citing Dole Food Co. v. Watts, 303 F.3d 1104, 1116 (9th Cir.2002)). They suggest, however, that it
The Baltimore Orioles join in and adopt the arguments and authorities set forth in the Proskauer Motion to Dismiss. In their motion, they do not offer any new arguments but rather, highlight the evidence they contend demonstrates a lack of personal jurisdiction (either general or specific) as to the Baltimore Orioles specifically. In particular, the Baltimore Orioles point to the following evidence:
Plaintiffs respond that the Personal Jurisdiction Defendants have "deep roots in California," with "extensive contacts related to recruitment, hiring, and employment of California Minor Leaguers, all resulting from systematic, affirmative acts." Plaintiffs' Opposition to Certain Defendants' Motion to Dismiss for Lack of Personal Jurisdiction ("Personal Jurisdiction Opposition") at 1. In particular, Plaintiffs assert, "all [Personal Jurisdiction] Defendants consciously chose to base multiple scouts within California to evaluate and recruit the state's amateurs ... [then] used these contacts to consciously select California Minor Leaguers and induce them into signing contracts (which are often signed within California)." Further, Plaintiffs assert, the Personal Jurisdiction Defendants "then expect these Minor Leaguers to not only work during the season but also during the winter training months, and they even direct the work by providing training packets ... know[ing] and expect[ing] that these youths will return to their home state to perform this winter work." Id.
Plaintiffs contend Personal Jurisdiction Defendants' "other contacts with California also result from express acts." Id. According to Plaintiffs, "[t]hey all obtain significant sums of California revenue from
According to Plaintiffs, MLB "entrenched itself in California" in 1958, when the Dodgers and the Giants came to California, followed in 1969 by the San Diego Padres. Id. at 4 (citing Declaration Of Garrett R. Broshuis In Support Of Plaintiffs' Opposition To Certain Defendants' Motion To Dismiss For Lack Of Personal Jurisdiction ("Broshuis Decl."), Ex. D (Dodgers Franchise Timeline, MLB.com); Id. Ex. E (Giants Franchise Timeline, MLB.com); Id. Ex. F (Padres Franchise Timeline, MLB.com); Id. Ex. G (Team-by-Team Information, MLB.com)). There are now five franchises in California, they assert, which is more than in any other state. Id. This high number of franchises in California means that the Personal Jurisdiction Defendants "routinely travel to California to play multiple games every season — up to 16 games in a season." Id. at 5 (citing Proskauer Motion to Dismiss at 4).
Plaintiffs assert that MLB's contacts with California go beyond travel and that the Personal Jurisdiction Defendants each derive substantial income from California, including "$113,128.10 in revenue attributable to California from MLB Advanced Media (MLB's internet arm) and $52,199.17 in revenue attributable to California from MLB Network (MLB's own TV network)." Id. at 5 (citing Bloom Jurisdiction Decl., Ex. K (MLB's Objection and Answer to Interrogatory No. 5)). Plaintiffs also assert that although MLB "did not provide California revenue for television contracts or MLB Properties (its licensing arm that licenses products for all Defendants and distributes revenue) ... it goes without saying that significant revenues and sales emanate from California — the most populous state — and are eventually funneled to all Defendants." Id. (citing Broshuis Decl., Ex. H (search engine metrics showing that "three out of the five top keywords in search engines that lead consumers tomlb.com are California-related (`sf giants,' `dodgers,' and `giants'), and, frommlb.com, a significant percentage of these consumers shop on MLB's e-commerce site, shop.mlb.com"). Plaintiffs also point to the admissions of the Personal Jurisdiction Defendants that they pay taxes in California. Id. (citing Bloom Jurisdiction Decl., Exs. A-J (Objection and Answer to Interrogatory Nos. 11 & 12); Bruce Decl., Ex. 1 (Orioles Objection and Answer to Interrogatory Nos. 11 & 12)). In addition, according to Plaintiffs, the Personal Jurisdiction Defendants have participated in workers compensation claims within California and MLB has lobbied the California legislature on behalf of its franchises "to make it more difficult to bring certain sports-related workers compensation claims in California." Id. at 6 (citing Broshuis Decl., Ex. I (Injury claims by professional athletes, L.A. Times (Feb. 1, 2014)); Id. Ex. J (California limits workers' comp sports injury claims, L.A. Times (Oct. 8, 2013)). Plaintiffs also point to evidence that MLB has hosted industry-wide meetings in California in recent years. Id. (citing Broshuis Decl., Ex. K (2014 Baseball Winter Meetings returns to
In addition to the contacts discussed above, Plaintiffs point to what they contend is "systematic recruitment" of California Minor Leaguers. Id. at 6. According to Plaintiffs, "California has long produced more major leaguers than any other state, and one recent study found that over 23 percent of American major leaguers came from California — more than twice as many as the next state." Id. (citing Broshuis Decl., Ex. L (Kevin Nelson, THE GOLDEN GAME xiii (2004)); id. Ex. M (California is top producer of major league players, L.A. Times (July 12, 2010)); Bloom Jurisdiction Decl., Exs. A-J (Objection and Answer to Interrogatory No. 5); Bruce Decl., Ex. 1 (Orioles Objection and Answer to Interrogatory No. 5)). Plaintiffs further contend that more Minor Leaguers come from California than any other state, citing the discovery responses of the Personal Jurisdiction Defendants reflecting that "[a]ll PJ Defendants drafted dozens of Californians since 2008, and on average they each selected 7.2 Californians per year." Id. (citing Bloom Jurisdiction Decl., Exs. A-J (Objection and Answer to Interrogatory No. 5); Bruce Decl., Ex. 1, (Orioles Objection and Answer to Interrogatory No. 5)).
According to Plaintiffs, the recruitment of Minor Leaguers from California involves a "long, intense process requiring a substantial presence in California." Id. In particular, they contend, all of the Personal Jurisdiction Defendants have multiple employees in California (an average of 6.3 employees per franchise), many of whom are scouts. Id. (citing Bloom Jurisdiction Decl., Exs. A-J (Objection and Answer to Interrogatory No. 2); Bruce Decl., Ex. 1 (Orioles Objection and Answer to Interrogatory No. 2)). The fact that the MLB Scouting Bureau is based in California is a reflection of the importance of scouting here, Plaintiffs contend. Id. at 7. Plaintiffs also cite to evidence that the Personal Jurisdiction Defendants "systematically dispatch many other employees to California to target, evaluate, and recruit players, such as higher-level employees like cross checkers, directors of scouting, and even vice presidents and general managers." Id. (citing Bloom Jurisdiction Decl., Ex. A-J (Personal Jurisdiction Defendants' Objection and Answer to Interrogatory No. 2); Wyckoff Decl. at ¶ 5; McAtee Decl. at ¶ 5). Plaintiffs assert that in 2013, the Personal Jurisdiction Defendants sent an average of 9.7 such employees per franchise to California. Id. And further, when a player is selected, according to Plaintiffs, the scouts will continue to be involved in the formal discussions with the player and may also be present when the player signs the UPC. Id. (citing Wyckoff Decl. at ¶ 9; McAtee Decl. at ¶ 6; Watts Decl. at ¶ 4; Bennigson Decl. at ¶ 4; Kahaulelio Decl. at ¶ 4; Woodruff Decl. at ¶ 4; Henderson Decl. at ¶ 4; Giarraputo Decl. at ¶ 4; Lewis Decl. at ¶ 4).
Plaintiffs also present evidence relating to the work performed by Minor Leaguers in California. Plaintiffs note that the UPC requires that the Minor Leaguers "maintain `first class' conditioning during the entire year, and a franchise can `impose a reasonable fine' for not meeting these requirements." Id. at 8 (citing CAC, ¶ 178 (citing UPC ¶¶ VI.D and XII)). They also point to the admissions of the Personal Jurisdiction Defendants that they direct this conditioning by handing out "work-out packets" to the players. Id. (citing Bloom Jurisdiction Decl., Exs. A-J (Objection and Answer to Interrogatory No. 7); Bruce Decl., Ex. 1 (Orioles Objection and Answer to Interrogatory No. 7); Hilligoss Decl., Ex. A; Pahuta Decl., Ex. A). Further, although only five franchises provided information about how many of their players
Plaintiffs argue that there is both general and specific jurisdiction over the Personal Jurisdiction Defendants in California. Id. at 11. They assert that for general jurisdiction, the minimum contacts test of International Shoe and the "bedrock principal" of fundamental fairness are satisfied when "a defendant's systematic and continuous contacts essentially render a corporation at home ... meaning defendant's contacts `approximate physical presence' in the state." Id. (citing Goodyear Dunlop Tires Operations, S.A. v. Brown, ___ U.S. ___, ___, 131 S.Ct. 2846, 2851, 180 L.Ed.2d 796 (2011), Tuazon v. R.J. Reynolds Tobacco Co., 433 F.3d 1163, 1169 (9th Cir.2006)). Under Tuazon, Plaintiffs assert, "some non-exhaustive factors include soliciting or engaging in business in the state, as well as the `[l]ongevity, continuity, volume, economic impact, physical presence, and integration into the state's regulatory or economic markets.'" Id. (citing Tuazon, 433 F.3d at 1172). Those factors support a finding of general jurisdiction here, Plaintiffs assert, based on the "longstanding presence in California" of the Personal Jurisdiction Defendants, discussed above. Id. at 12. Plaintiffs further assert that here, as in Tuazon, the "`long and successful operation' in the state were `not accidental.'" Id. (citing 433 F.3d at 1174).
Plaintiffs also argue that "the highly interdependent nature of MLB" supports a finding of general jurisdiction. Id. at 13 (citing Erving v. Virginia Squires Basketball Club, 349 F.Supp. 709, 712-15 (E.D.N.Y.1972)). Thus, Plaintiffs assert, in Erving, the court found that the Squires basketball team, which was a member of the American Basketball Association ("ABA"), was subject to personal jurisdiction in New York, even though it played only six to eight games in New York out of a season schedule of 84 games, because the games that were played in New York were "essential to the fulfillment of the business purposes and objects of the ABA enterprise of which Squires is an integral part." Id. (citing 349 F.Supp. at 713). According to Plaintiffs, the court in Erving concluded that it "did not matter that gate receipts were not purely shared — other revenue was shared and the relationships were symbiotic." Id. (citing 349 F.Supp. at 713-14). Plaintiffs contend other courts analyzing sports teams and sports leagues have reached the same conclusion. Id. (citing Hollins v. U.S. Tennis Ass'n, 469 F.Supp.2d 67, 74 (E.D.N.Y.2006); Cent. Sports Army Club v. Arena Assocs., Inc., 952 F.Supp. 181, 188 (S.D.N.Y.1997); Hawkins v. Nat'l Basketball Ass'n, 288 F.Supp. 614, 618-19 (W.D.Pa.1968); Am. Football League v. Nat'l Football League, 27 F.R.D. 264, 268-69 (D.Md.1961)). This
Plaintiffs argue that the facts here support a finding of general jurisdiction even more strongly than the cases cited above because this case involves "a universal scheme enacted by all Defendants to depress salaries." Id. at 14. Further, as discussed above, Plaintiffs point to "common conduct [that] was applied in and directed at California, and [which] resulted from all Defendants' common decisions, uniform contracts, and common implementation." Id. Although the Personal Jurisdiction Defendants "do not directly share gate receipts, the collective bargaining agreement requires all MLB franchises to share substantial revenue, with each franchise contributing 34 percent of its local revenue into a common pool split amongst all 30 MLB franchises." Id. at 14 (citing Broshuis Decl., Ex. O (Article XXIV, 2012-2016 Basic Agreement) at 121). The rules also require other revenue sharing, Plaintiffs contend, and as there are more franchises in California than in any other state, "much of this shared revenue emanates from California." Id. Further, Plaintiffs point to substantial revenue from California, including from the website and TV network, possible licensing revenues from California, and MLB's lobbying in California, all of which show that the Personal Jurisdiction Defendants have made California their second home, Plaintiffs assert, thus giving rise to general jurisdiction. Id. at 15.
Plaintiffs also contend that there is specific jurisdiction over their claims in California. Id. at 15. According to Plaintiffs, the theory of specific jurisdiction is based on the premise that "[d]oing business within a state is a privilege, and obligations accompany that privilege." Id. (citing Int'l Shoe, 326 U.S. at 316, 66 S.Ct. 154). Thus, it is not unfair to subject a defendant to litigation in a forum where the claims are related to the defendant's activities in the forum. Id. at 15-16. The Ninth Circuit uses a "sliding scale" for determining whether there is specific jurisdiction, Plaintiffs assert, considering both "the extent of the defendant's contacts with the forum and the degree to which the plaintiff's suit is related to those contacts. A strong showing on one axis will permit a lesser showing on the other." Id. at 16 (quoting Yahoo! Inc. v. La Ligue Contre Le Racisme Et L'Antisemitisme, 433 F.3d 1199, 1210 (9th Cir.2006)). The contacts that the Court should consider, according to Plaintiffs, are not limited to the plaintiffs' contacts but also include contacts with non-plaintiffs. Id. (citing Yahoo!, 433 F.3d at 1207).
Plaintiffs agree with the Personal Jurisdiction Defendants that specific jurisdiction is evaluated under a three-part test that asks whether: (1) the defendant purposefully directed its activities towards the forum or purposefully availed itself of the privileges of the forum; (2) the claim arises out of or relates to those activities; and (3) the exercise of personal jurisdiction is reasonable. Id. (citing Yahoo!, 433 F.3d at 1205-06). Plaintiffs also agree that the proper inquiry in this case as to the first part of the test is whether the Personal Jurisdiction Defendants "purposefully directed" their activities at the forum rather than the purposeful availment test. Id. at 16-17. According to Plaintiffs, purposeful direction is satisfied when: "(1) the company commits an intentional act, (2) aimed at the forum state, that (3) causes harm that the company knows will likely be felt in the forum state." Yahoo!, 433 F.3d at 1206 (citing Calder v. Jones, 465 U.S. 783, 789-90, 104 S.Ct. 1482, 79 L.Ed.2d 804
Plaintiffs argue that because the Personal Jurisdiction Defendants did not address the first and third prongs of the purposeful direction test, the Court should find that those requirements are met. Id. In any event, they contend, the evidence shows that all three requirements are, in fact, met. Id. In particular, they argue that in wage and hour cases, the intentional act requirement is met where, as here, there is a uniform employment policy that is applied within the state, even if it is also applied to employees in other states. Id. at 18 (Holliday v. Lifestyle Lift, Inc., Case No. 09-cv-4995 RS, 2010 WL 3910143, at *3 (N.D.Cal. Oct. 5, 2010); Telles v. Li, Case No. 11-cv-1470 LHK, 2013 WL 5199811, at *5 (N.D.Cal. Sept. 16, 2013); Enriquez v. Interstate Group., LLC, Case No. 11-cv-5155 YGR, 2012 WL 3800801, at *4 (N.D.Cal. Aug. 31, 2012)). According to Plaintiffs, "[a] company expressly aims its conduct in such cases when it applies the allegedly unlawful employment practices in the state" and "knows harm will likely occur in a state when it applies a policy to workers in the state." Id. (citing Holliday, 2010 WL 3910143, at *4; Telles, 2013 WL 5199811, at *5; Enriquez, 2012 WL 3800801, at *5). Further, Plaintiffs assert, specific jurisdiction is found "[e]ven for work performed at home ... if the company knowingly hires a forum's resident and has reason to know that work will be performed at home." Id. (citing Wood v. Kinetic Sys., Inc., Case No. Case No. 09-cv — 579 SCWD, 2010 WL 893647, at *5 (D.Idaho Mar. 9, 2010)). Here, Plaintiffs assert, the Personal Jurisdiction Defendants "acted intentionally by creating the policy decision to pay no wages at all during the winter training period and to pay no minimum wage or overtime during the season," "expressly aimed their conduct at California by applying the policies to Californians working in California," and "knew harm was likely to occur because they knowingly required Californians to work in California for no pay." Id.
Plaintiffs further assert that the purposeful direction requirement is satisfied on the basis of the recruiting activities conducted by the Personal Jurisdiction Defendants in California. Id. at 19. According to Plaintiffs, numerous courts have reached this conclusion. Id. (citing Davis v. NIH Fed. Credit Union, Case No. 12-cv-5502 JCS, 2013 WL 2147468, at *6 (N.D.Cal. May 15, 2013); Ochoa v. J.B. Martin & Sons Farms, Inc., 287 F.3d 1182, 1186-87 (9th Cir.2002); Potts v. Cameron Offshore Boats, Inc., 401 F.Supp.2d 733, 737-38 (S.D.Tex.2005)). These cases are distinguishable from the Supreme Court's decision in Walden, they contend, because they "involved far more activities directed at the forum state." Id. (citing Ochoa, 287 F.3d at 1189-93; Davis, 2013 WL 2147468, at *6; GT Sec., Inc. v. Klastech GmbH, Case No. 13-cv-3090 JCS, 2014 WL 2928013, at *13-14 (N.D.Cal. June 27, 2014)). According to Plaintiffs, the Personal Jurisdiction Defendants have "systematically recruited" in California, as is apparent from evidence showing that each one of them "drafted California amateurs every year for the last 6 years," and that they "averaged 7.2 California draft picks per team per year." Id. Further, they assert, "[b]oth before and after [the Personal Jurisdiction Defendants] select California Minor Leaguers, their scouts and employees communicate with them and induce them into signing the uniform contracts at issue while they reside in California." Id.
Plaintiffs reject the argument of the Personal Jurisdiction Defendants that there is no purposeful direction because their contacts with California "are simply a function of where players choose to live
Further, Plaintiffs contend, the Personal Jurisdiction Defendants are incorrect in their assertion that in determining whether there is purposeful direction, the court should consider named plaintiffs only and not putative class members. Id. at 21. Defendants cite only a single case in support of their position, Ambriz v. Coca Cola, and that case, according to Plaintiffs, is not on point because it involved venue rather than personal jurisdiction. Id. Moreover, Plaintiffs assert, Yahoo, International Shoe, and Walden all make clear that the purposeful direction inquiry requires an evaluation of all of the defendant's contacts with the forum state that are connected with the litigation; thus even contacts with non-parties (such as putative class members) are considered in cases where the contacts of the plaintiffs are intertwined with those the non-parties. Id.
The second requirement for specific jurisdiction — that the claims must "arise out of" or be "related to" the plaintiff's activities in the forum is also met here, Plaintiffs assert. Id. at 22. Plaintiffs argue that this requirement is a "low bar" in the Ninth Circuit and merely requires "some nexus between the claims and the company's activities — a `but for' test." Id. (citing Shute v. Carnival Cruise Lines, 897 F.2d 377, 385 (9th Cir.1990), rev'd on other grounds by Carnival Cruise Lines, Inc. v. Shute, 499 U.S. 585, 111 S.Ct. 1522, 113 L.Ed.2d 622 (1991)). Here, Plaintiffs assert, "there is a clear nexus between the [Personal Jurisdiction Defendants'] policies (relating to recruitment and employment of California Minor Leaguers), the harm (relating to their failure to pay minimum wage and overtime to these Minor Leaguers), and the claims (for violations of wage and hour laws)." Id. According to Plaintiffs, "[b]ut for Defendants' uniform policies applied in California, there would be no harm to Minor Leaguers in California — and no claims." Id.
Finally, Plaintiffs assert, it is reasonable to exercise jurisdiction in this District rather than "litigating it in a piecemeal fashion in other forums." Id. at 23. The burden as to this third requirement is on the Personal Jurisdiction Defendants because Plaintiffs have met the first two prongs of the specific jurisdiction test, they contend. Id. (citing Dole Food, 303 F.3d at 1111). Plaintiffs argue that the seven factors that are considered to determine
First, for the same reasons there is purposeful direction, Plaintiffs assert, the "purposeful interjection" factor weighs in favor of reasonableness. Id. (citing Enriquez, 2012 WL 3800801, at *6).
Second, Plaintiffs argue, the burden on a defendant is only unreasonable where defending in the forum is "so gravely difficult and inconvenient that it violates due process." Id. (citing Enriquez, 2012 WL 3800801, at *6 (internal citation omitted)). Moreover, they assert, when determining whether the "burden of defending" in the forum is unreasonable, the Court must consider the burdens on both the defendants and the plaintiffs. Id. (citing Ochoa, 287 F.3d at 1192). The facts here favor Plaintiffs, they argue, because seven Plaintiffs (some of whom were employed by the Personal Jurisdiction Defendants) live in California and 22 of 34 Plaintiffs live west of the Mississippi. Id. In addition, the burden of travel is greater for Plaintiffs, who have limited resources, than it is on the Personal Jurisdiction Defendants, who regularly travel to California, Plaintiffs contend. Id. at 24. Moreover, Plaintiffs argue, because all but one of the Personal Jurisdiction Defendants are represented by the same counsel, there will be little additional burden of litigating in California. Id. In contrast, they assert, "filing a new case based on identical facts in multiple districts against the [Personal Jurisdiction Defendants] would be substantially more burdensome and inefficient." Id. Thus, this factor favors the conclusion that exercise of jurisdiction is reasonable, they contend. Id.
Plaintiffs agree with the Personal Jurisdiction Defendants that the "sovereignty" factor is neutral. Id.
Plaintiffs argue that the next factor, the forum's interest in adjudicating the dispute, strongly favors California. Id. In particular, they argue that "[w]hile residents from states throughout the country are also harmed by Defendants' practices, more California residents are harmed than residents in any other state because many more Minor Leaguers come from California than any other state." Id.
Plaintiffs argue that the exercise of jurisdiction in California will also support the fifth factor, which asks the court to consider "the most efficient judicial resolution." Id. Plaintiffs contend it would be most efficient to litigate this dispute within a single district and further, that as the "epicenter of harm," California is the most appropriate forum. Plaintiffs also assert that dismissal of the Personal Jurisdiction Defendants would result in "highly inefficient, piecemeal litigation, which would risk disparate rulings on identical factual and legal issues." Id.
The importance of the forum to Plaintiffs also favors a finding that jurisdiction is reasonable, Plaintiffs argue, because three named Plaintiffs live in this district, far more Plaintiffs reside in California than any other state and over half of Plaintiffs suffered alleged harm in California. Id. at 25.
Finally, the last factor — the existence of an alternative forum — favors Plaintiffs' position, they argue, because "far more named Plaintiffs are in California than in any other state, more Defendants are headquartered in California than in any other state, and more Minor Leaguers come from California than any other state, [and therefore] no other forum would be as convenient as California." Id.
Consequently, Plaintiffs assert, the seven factors that go to reasonableness "demonstrate that Defendants cannot demonstrate a compelling burden, and the Court
In their Reply brief, the Proskaur PJ Defendants reject Plaintiffs' assertion that there is general jurisdiction over them, asserting that Plaintiffs have relied on outdated precedent while failing to address the Supreme Court's more recent guidance in Daimler AG v. Bauman, ___ U.S. ___, 134 S.Ct. 746, 187 L.Ed.2d 624 (2014) and Goodyear Dunlop Tires Operations, S.A. v. Brown, ___ U.S. ___, 131 S.Ct. 2846, 180 L.Ed.2d 796 (2011). Reply in Support Of Motion To Dismiss The Consolidated Amended Complaint As Against Certain Defendants For Lack Of Personal Jurisdiction ("Proskauer Jurisdiction Reply") at 1. Moreover, they assert, the contention that California is their "second home" is "unsupportable." Id. They also challenge Plaintiffs' assertion that there is specific jurisdiction over them. Id. As they argued in the underlying motion, the Proskauer PJ Defendants assert that Plaintiffs' position is based almost entirely on the fact that "certain Plaintiffs and unnamed members of the putative class voluntarily choose to live in California during the offseason." Id. The Proskauer PJ Defendants argue that this is not a sufficient basis to find specific jurisdiction given that it is "undisputed that (i) not one Minor League player played a single inning for a Moving Defendant in California, and (ii) not one Minor League player was required to perform any training activities for a Moving Defendant in California." Id. The Proskauer PJ Defendants also point to Plaintiffs' assertion in response to Defendants' transfer motions that there is no personal jurisdiction over some of the MLB clubs in Florida, asserting that Plaintiffs' argument is based on the same absence of contacts with Florida that the Proskauer PJ Defendants assert in their Motion to Dismiss deprives this Court of personal jurisdiction over them. Id.
On the question of general jurisdiction, the Proskauer PJ Defendants argue that Plaintiffs have relied heavily on a Ninth Circuit case, Tuazon v. R.J. Reynolds Tobacco Co., 433 F.3d 1163 (9th Cir.2006), that predates Daimler and Goodyear and is inconsistent with those more recent Supreme Court cases. Id. at 3. In particular, the Proskauer PJ Defendants assert, in Tuazon, the Ninth Circuit found that there was general jurisdiction over a defendant that had a "serious presence" and generated "enormous revenues" in the forum even though the forum was not the defendant's "home away from home." Id. That conclusion is at odds with Daimler, the Proskauer PJ Defendants argue, in which the Supreme Court "warned that `the exercise of general jurisdiction in every State in which a corporation engages in a substantial, continuous, and systematic course of business ... is unacceptably grasping.'" Id. (citing 134 S.Ct. at 761 (internal quotations omitted)). Even if the "more lenient standard set forth in Tuazon" applies, the Proskauer PJ Defendants argue, the contacts in that case were more extensive than the contacts here. Id. Moreover, they assert, "[c]ourts have uniformly held that contacts of the sort on which Plaintiffs rely do not support personal jurisdiction over an out-of-state sports team." Id. at 4 (citing Davis v. Billick, Case No. CIV.A. 301CV1964D, 2002 WL 1398560 (N.D.Tex. June 26, 2002); Manton v. Cal. Sports, Inc., 493 F.Supp. 496 (N.D.Ga.1980); Sullivan v. Tagliabue, 785 F.Supp. 1076, 1081 (D.R.I. 1992)). The Proskauer PJ Defendants reject Plaintiffs' claim that these cases are distinguishable because they did not involve a "common scheme" or "contacts related to the action," arguing that these distinctions have no bearing on whether
Nor does the evidence establish that the Proskauer PJ Defendants are "at home" in California, they contend. They argue that "[t]o the extent that the Moving Defendants have established a second home in any jurisdiction, it could only be Florida, where they conduct spring training, extended spring training, and instructional leagues for extended periods each year at facilities that they maintain in that state, and where one or more of their Minor League teams are based." Id. In contrast, they argue, the Proskauer PJ Defendants "are `visitors' when they travel to California to play `away' games" and "do not receive income from tickets, concessions, parking, or other similar items for regular season games played in California." Id.
The Court should also reject Plaintiffs' attempt to impute the contacts of MLB and other non-moving clubs to the Proskauer PJ Defendants for the purposes of general jurisdiction, they argue. Id. at 5-6. According to the Proskauer PJ Defendants, Plaintiffs' reliance on Erving v. Virginia Squires Basketball Club, 349 F.Supp. 709 (E.D.N.Y.1972) in support of this approach is misplaced, both because the decision does not apply the post-Daimler analysis and because the facts in that case were distinguishable. Id. at 5-6. In particular, they argue, the court in that case found jurisdiction in New York over a Virginia team because the American Basketball Association's principal office was located in New York City, was listed in the telephone directory there and acted as designated agent for the basketball clubs. Id. at 6. Here, in contrast, "MLB is based in New York and MiLB is based in Florida — not California." Id. Further, the Proskauer PJ Defendants contend, the facts here do not support a finding of agency. Id.
Plaintiffs' reliance on revenues that are allegedly funneled through MLB also is misplaced, the Proskauer PJ Defendants assert, as Plaintiffs have evidence of revenue from only two sources, amounting to approximately $165,000 per club in 2013, and they merely offer speculation that the actual revenues are significantly greater. Id. Even if true, the Proskauer PJ Defendants argue, revenues from California are not sufficient to support general jurisdiction under Daimler, in which the Supreme Court "rejected the Ninth Circuit's finding that the defendant was subject to general jurisdiction because its in-state subsidiary performed services that were important to the defendant company, holding that such an agency theory would `subject foreign corporations to general jurisdiction whenever they have an in-state subsidiary or affiliate, an outcome that would sweep beyond even the sprawling view of general jurisdiction we rejected in Goodyear.'" Id. (quoting Daimler, 134 S.Ct. at 760 (internal quotations omitted)). Finally, the Proskauer PJ Defendants argue that the other cases Plaintiffs cite in support of their agency theory of jurisdiction — Daynard v. Ness, Motley, Loadholt, Richardson & Poole, P.A., 290 F.3d 42 (1st Cir. 2002) and Myers v. Bennett Law Offices, 238 F.3d 1068 (9th Cir.2001) — also do not support a finding of general jurisdiction. Id. at 7-8.
The Proskaur PJ Defendants also reject Plaintiffs' assertion that there is specific jurisdiction over them in California. As in their motion, they argue that the players' unilateral decision to live in California in the offseason is not sufficient to establish that the Personal Jurisdiction Defendants have intentionally directed their actions at California. Id. at 8. They argue that evidence that the players were recruited, received communications in California and signed contracts here, cited by Plaintiffs in support of specific jurisdiction, does not
Nor do the allegations in the remaining declarations (of players Smith, Watts, Lewis and Giarraputo) provide evidence of sufficient contacts to support jurisdiction against each of the Clubs that challenges jurisdiction, the Proskauer PJ Defendants assert. Id. It is also significant, they contend, that neither Lewis nor Giarraputo are named Plaintiffs in this action, as "a defendant's contacts with the named plaintiff[s] in a class action, without reference to the defendant's contacts with unnamed members of the proposed class, must be sufficient for the Court to exercise specific jurisdiction over the defendant." Id. (citing Ambriz, 2014 WL 296159, at *6 (N.D.Cal. Jan. 27, 2014)).
The Proskauer PJ Defendants also argue that Plaintiffs' claims do not arise out of their forum activities. Id. at 12. The "but for" test cannot be met, they contend, on the basis of the players' decision to live in California because the test requires that the contacts enabled the harm to occur, not merely that the contacts are related to the claims. Id. (citing Norris v. Okla. City Univ., Case No. 93-cv-1626 VRW, 1993 WL 313122, at *3 (N.D.Cal. Aug. 3, 1993) (quoting Alexander v. Circus Circus Enters., Inc., 939 F.2d 847, 853 (9th Cir. 1991)). Further, the Proskauer PJ Defendants assert, Plaintiffs' other forum activities, "including their recruitment, signing contracts, or receipt of various communications... are too attenuated from their wage-and-hour claims to establish `but for' causation." Id.
Finally, the Proskauer PJ Defendants reiterate their position that exercise of specific jurisdiction in California is unreasonable based on the factors that courts must consider to make such a determination. Id. at 14-15. Purposeful interjection, the first factor, favors the Proskauer PJ Defendants for the same reasons there is no purposeful direction, they assert. Id. at 14. As to the second factor, the burden of defending in the forum, they argue that Plaintiffs "grossly misrepresent the authority cited for their specious proposition that `[i]f re-filing in another jurisdiction would burden the plaintiff, then it would be unreasonable to dismiss the complaint.'" Id. at 14. Rather, they assert, the proper focus should be on the fact that "the number of likely witnesses who live in or reasonably close to Florida overwhelms the number who live in or reasonably close to California." Id. With respect to the interest of the forum state in adjudicating the claims, the Proskauer PJ Defendants contend Plaintiffs "cannot dispute that this forum's interest in enforcing California law is mitigated because the events at issue with respect to the Moving Defendants did not occur in California." Id. (citing Fed.
In their reply brief, the Baltimore Orioles join in the arguments made by the Proskauer PJ Defendants and also highlight specific facts relating to the Baltimore Orioles that they contend support those arguments. Defendants', The Baltimore Orioles, Inc. And The Baltimore Orioles Limited Partnership, Reply In Support Of Motion To Dismiss The Consolidated Amended Complaint For Lack Of Personal Jurisdiction ("Baltimore Orioles Personal Jurisdiction Reply").
In support of their assertion that there is no specific jurisdiction, the Baltimore Orioles point to the contacts (or absence of contacts) with California of named Plaintiff Roberto Ortiz, who is alleged to be a "representative plaintiff for the ML Collective Class, the Arizona Class, the Florida Class and the Maryland Class." Id. at 1-2 (quoting CAC, ¶ 43). Ortiz is alleged to reside in Bayamon, Puerto Rico and, according to the Baltimore Orioles, "[t]here is no allegation that Mr. Ortiz is a representative of the California Class, ever lived in California[,] received any documentation from the Baltimore Orioles while residing in California[,] that he played for any affiliate associated with the Baltimore Orioles in California[,] or that he was harmed by any action of the Baltimore Orioles in California." Id. at 2. Consequently, they assert, the claims against the Baltimore Orioles asserted by Mr. Ortiz do not arise out of the Baltimore Orioles' contacts with California and there is no specific jurisdiction against the Baltimore Orioles. Id.
With respect to general jurisdiction, the Baltimore Orioles acknowledge that they are registered to do business in California and pay taxes here as well, but argue that these contacts are not sufficient to make California a second home for them, and therefore, these contacts do not give rise to general jurisdiction under Daimler and Goodyear. Id. at 3-4. Nor, the Baltimore Orioles contend, can Plaintiffs establish general jurisdiction over the Baltimore Orioles based on their other "limited contacts" with California, which include "a handful of employees in California, a small amount of income derived from California, scouting trips, travel to California for occasional meetings, recruitment and a limited number of MLB games played in any given Championship Season." Id. at 5-6. In a footnote, the Baltimore Orioles concede that their Vice President of Baseball Operations lives in California during the off-season but they assert that this connection "has no bearing on whether Plaintiffs can establish general jurisdiction over the Baltimore Orioles." Id. at 5 n. 7.
In the Second Consolidated Amended Complaint, Plaintiffs add nine new named Plaintiffs: Matt Lewis (representative for Minor League Collective, Florida Class and California Class), Nick Giarraputo (representative for Minor League Collective, Arizona Class, California Class, Florida Class and New York Class), Leonard Davis (representative for the Minor League Collective, Florida Class, New York Class, California Class, Arizona Class and Pennsylvania Class), David Quinowski
In their Memorandum of Points and Authorities Regarding Personal Jurisdiction Over Certain Defendants Named in the Second Consolidated Amended Complaint ("Plaintiffs' Supp. Brief"), Plaintiffs contend that there is personal jurisdiction as to all of the Personal Jurisdiction Defendants because "[a]s alleged in the proposed [SCAC] and supported by accompanying declarations, each [Personal Jurisdiction] Defendant recruited, scouted, and ultimately hired one or more of these named Plaintiffs from California." Plaintiffs' Supp. Brief at 1. Plaintiffs further assert, "[t]hese named Plaintiffs then performed work in California on behalf of the [Personal Jurisdiction] Defendants. The [Personal Jurisdiction] Defendants knew these Plaintiffs would perform that work in California, and permitted and encouraged them to do so. But the [Personal Jurisdiction] Defendants did not pay them for that work." Id. Consequently, Plaintiffs argue, this Court may exercise personal jurisdiction over all of the Personal Jurisdiction Defendants. Id.
As directed by the Court, Plaintiffs' supplemental brief focuses on the "arising out of" prong of the test for specific jurisdiction. Plaintiffs argue that this requirement is satisfied by meeting a "but for" test, which "simply requires `that there be some nexus between the cause of action and the defendants' activities in the forum.'" Id. at 2 (citing Myers v. Bennett Law Offices, 238 F.3d 1068, 1075 (9th Cir. 2001); Shute v. Carnival Cruise Lines, 897 F.2d 377, 385 (9th Cir.1990), rev'd on other grounds by Carnival Cruise Lines, Inc. v. Shute, 499 U.S. 585, 111 S.Ct. 1522, 113 L.Ed.2d 622 (1991)). Plaintiffs further assert, as they did in their Opposition brief, that in wage and hour cases, the "arising out of" requirement is satisfied "by alleging that a company applies a wage policy in a state that leads to claims." Id. at 3 (citing Enriquez v. Interstate GRP., LLC, 11-cv-5155 YGR, 2012 WL 3800801, at *5 (N.D.Cal. Aug. 31, 2012); Telles v. Li, Case No. 11-cv-1470 LHK, 2013 WL 5199811, at *5 (N.D.Cal. Sept. 16, 2013)). According to Plaintiffs, these cases "demonstrate that knowledge is not a requirement of the but-for test when a company applies a wage policy to work performed in the state." Id. But when "the company knowingly hires a forum's resident and has reason to know work will be performed there," Plaintiffs assert, "specific jurisdiction is assuredly present." Id. (citing Wood v. Kinetic Sys., Inc., Case No. CV 09-579-S-CWD, 2010 WL 893647, at *5-6 (D.Idaho, Mar. 9, 2010); Sheets v. Integrated Info. Sys., Inc., Case No. 98-cv-1328-KI, 1999 WL 417274, at *1 (D.Or. Jun. 17, 1999); Mendelsohn, Drucker & Assocs. v. Titan Atlas Mfg., Inc., 885 F.Supp.2d 767, 779 (E.D.Pa.2012)).
Applying these standards, Plaintiffs address each of the Minor League teams that challenges personal jurisdiction, asserting that "the claims of at least one named Plaintiff can be mapped directly to purposeful
In their responsive brief, Defendants contend the addition of the new named Plaintiffs in the SCAC does not cure the deficiencies in the previous consolidated complaint with respect to the existence of personal jurisdiction over them. Opposition to Plaintiffs' Memorandum of Points and Authorities Regarding Personal Jurisdiction Over Certain Defendants Named in the Second Consolidated Amended Complaint ("Personal Jurisdiction Defendants' Supp. Brief") at 1. In particular, according to Defendants, Plaintiffs have not demonstrated that the Personal Jurisdiction Defendants "purposefully directed their activities toward California and that their claims arise out of those activities." Id. (emphasis in original).
The Personal Jurisdiction Defendants agree with Plaintiffs that the "arising out of" requirement is satisfied if there is "but for" causation but contend Plaintiffs are incorrect in asserting this test is met by "simply [showing] ... `some nexus between the cause of action and the defendant's activities in the forum." Id. at 2 (quoting Plaintiffs' Supp. Brief at 2-3). Instead, the Personal Jurisdiction Defendants contend, "the key question is `whether the entire course of events ... was an uninterrupted whole which began with, and was uniquely made possible by, the [defendant's] contacts in [the forum state].'" Id. (quoting Norris v. Okla. City Univ., Case No. C93-1626 VRW, 1993 WL 313122, at *3 (N.D.Cal. Aug. 3, 1993) (emphasis added in Defendants' brief)). Thus, they assert, "[i]f a plaintiff `would have the same claims against [the defendant]' even in the absence of the alleged forum contacts, jurisdiction is lacking." Id. (citing Young v. Actions Semiconductor Co., 386 Fed.Appx. 623, 627 (9th Cir.2010)). According to the Personal Jurisdiction Defendants, Plaintiffs have not met this standard.
First, the Personal Jurisdiction Defendants argue that Plaintiffs mischaracterize the declarations of the new named Plaintiffs, overstating their contacts with the forum. Id. They contend, for example, the declarations do not support Plaintiffs' assertion that "`each [Moving] Defendant' recruited and scouted one or more of the named Plaintiffs from California." Id. at 2-3 (quoting Plaintiffs' Supp. Brief at 1) (emphasis added in Defendants' brief). In fact, they argue, the declarations reflect that seven out of eleven of the new Plaintiffs were "scouted in California not by any of the Moving Defendants, but by unidentified `MLB teams.'" Id. at 3 (citing Lewis Decl. at ¶ 3, Giarraputo Decl. at ¶ 3, Gorgen Decl. at ¶ 3, Davis Decl. at ¶ 3, Pinckney Decl. at ¶ 3, Wagner Decl. at ¶ 3 and Quinowski Decl. at ¶ 3). Further, these contacts occurred "a decade ago, well beyond any applicable limitations period, and cannot possibly be the `but for' cause of the alleged work for which Plaintiffs seek to be compensated." Id. (citing Watts Decl. at ¶¶ 3-4, Gagnier Decl. at ¶ 3, Aguilar Decl. at ¶ 4 and Duff Decl. at ¶ 4).
The Personal Jurisdiction Defendants also challenge Plaintiffs' contention that they "`facilitated ... California work by providing extensive winter training packets and by directing communications to Plaintiffs in California.'" Id. (quoting Plaintiffs' Supp. Brief at 5). According to the Personal Jurisdiction Defendants, only five of them — the Atlanta Braves, Washington Nationals, Pittsburgh Pirates, Chicago White Sox and Tampa Bay Rays — are alleged to have sent any communications to California, while six of the declarants (Quinowski, Wagner, Aguilar, Gagnier, Duff and Pinckney) who played for the remaining Personal Jurisdiction Defendants
Next, the Personal Jurisdiction Defendants contend the "abbreviated and attenuated contacts" that can be attributed to them — scouting and recruiting, mailings, and situs of contract signing — do not establish personal jurisdiction because they are unrelated to Plaintiffs' wage and hour claims. Id. at 4-5. With respect to scouting and recruiting, the Personal Jurisdiction Defendants assert that only Watts (Pittsburgh Pirates), Gagnier (Detroit Tigers), Aguilar (Cleveland Indians/Baltimore Orioles) and Duff (New York Yankees) claim that they were recruited or scouted by one of the Personal Jurisdiction Defendants. Id. at 5. None of the remaining Personal Jurisdiction Defendants is even alleged to have recruited a named Plaintiff in California, they contend. Id. at 5-6. Further, even as to the teams who allegedly recruited named Plaintiffs in California, such recruiting activities are not sufficient to establish specific jurisdiction, the Personal Jurisdiction Defendants argue. Id. at 6 (citing Selhorst v. Alward Fisheries, LLC, Case No. C-11-3266 EMC, Case No. C-11-3266 EMC, 2011 WL 4974568, at * 6 (N.D.Cal. Oct. 19, 2011); Norris v. Okla. City Univ., Case No. C-93-1626 VRW, 1993 WL 313122, at *3 (N.D.Cal. Aug. 3, 1993)). Thus, they conclude, Plaintiffs have failed to establish personal jurisdiction over any of the Personal Jurisdiction Defendants based on recruiting in the forum. Id.
Nor do the communications cited by Plaintiffs establish personal jurisdiction over any of the Personal Jurisdiction Defendants, they argue, because none of the declarants claims that he received any communications relating to the work allegedly performed in California. Id. at 6-7. Consequently, the Personal Jurisdiction Defendants assert, Plaintiffs are unable to satisfy the "but for" test because they have not shown that their wage and hour claims "emanated from these communications." Id. at 6. According to the Personal Jurisdiction Defendants, it is well-established that "limited informational communications sent into the forum" such as the ones cited here do not give rise to specific jurisdiction. Id. at 7 (citing Norris, 1993 WL 313122, at *3-4, 1993 U.S. Dist. LEXIS 11349, at *9-10; Martin v. Clemson Univ., Case No. 07-536, 2007 WL 4531028, at *7-9, 2007 U.S. Dist. LEXIS 93703, at *21-25 (E.D.Pa. Dec. 21, 2007); Hardnett v. Duquesne Univ., 897 F.Supp. 920, 922, 924 (D.Md.1995); Sunbelt Corp. v. Noble, Denton & Assocs., Inc., 5 F.3d 28, 32 (3d Cir.1993)). In short, the Personal Jurisdiction Defendants contend, Plaintiffs "have not proffered any facts supporting
With respect to the named Plaintiffs who claim that they signed their initial contracts in California — Lewis, Wagner, Giarraputo, Gorgen, Davis, Pinckney and Duff — the Personal Jurisdiction Defendants assert that these contacts also are not sufficient to establish specific jurisdiction. Id. at 8. According to the Personal Jurisdiction Defendants, signing a contract with an out-of state defendant does not "automatically establish sufficient minimum contacts to support jurisdiction;" rather, whether such a contract is evidence that the defendant "purposefully established minimum contacts with the forum" depends on the "prior negotiations and contemplated future consequences, along with the terms of the contract and the parties' actual course of dealing." Id. (quoting Selhorst, Case No. C-11-3266 EMC, 2011 WL 4974568, at *4 (N.D.Cal. Oct. 19, 2011)). Those factors do not support a finding of specific jurisdiction here because the named Plaintiffs who signed their contracts in California are not alleging breach of contract and the contracts "do not require or even contemplate the performance of any work in California." Id. (distinguishing Wood v.Kinetic Sys., Inc., Case No. CV 09-579-S-CWD, 2010 WL 893647 (D.Idaho Mar. 9, 2010) on the basis that contract specified that forum was report-to-work location). Further, according to the Personal Jurisdiction Defendants, Plaintiffs claim that "no contract negotiations took place at all," citing allegations in the SCAC that some of the players signed the Uniform Player Contract "quickly." Id. (citing SCAC, ¶¶ 431, 450, 498,
The Personal Jurisdiction Defendants contend courts in the Ninth Circuit have "declined to exercise specific jurisdiction in circumstances where plaintiffs have alleged far more significant contract dealings occurring in California." Id. at 8. As a case that is "particularly instructive," they point to Sarkis v. Lajcak, Case No. C-08-0911 RMW, 2009 WL 3367069, 2009 U.S. Dist. LEXIS 95971 (N.D.Cal. Oct. 15, 2009), aff'd 425 Fed.Appx. 557 (9th Cir. 2011). In that case, Personal Jurisdiction Defendants assert, the court found that there was no specific jurisdiction over a claim for fraudulent inducement, even though it was based on representations contained in the contract, because the plaintiff's termination did not arise out of the pre-employment discussions and negotiations. Id. at 9.
The Personal Jurisdiction Defendants also challenge the existence of specific jurisdiction over the Boston Red Sox and the Baltimore Orioles on the basis that "Plaintiffs Wagner and Quinowski do not allege that [these teams] scouted or recruited them in California, or mailed communications to them in California[,] or entered into contracts with them in California." Id.
Finally, the Personal Jurisdiction Defendants argue that Plaintiffs' voluntary choice to perform offseason training in California does not establish contacts with California that can be imputed to them under the effects test, citing the Supreme Court's decision in Walden. Id. at 10. They reject Plaintiffs' assertion that under
Plaintiffs also fail to establish personal jurisdiction against the Tampa Bay Rays and the Philadelphia Phillies, the Personal Jurisdiction Defendants contend, because Plaintiffs' claims (based on the allegations of Gorgen and Pinckney) are time-barred. Id. at 14. Finally, the Personal Jurisdiction Defendants assert that all the claims for unpaid offseason work asserted against them are so vaguely alleged in the SCAC that Plaintiffs do not state a claim under Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) and Ashcroft v. Iqbal, 556 U.S. 662, 669, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009). Id. at 14-15. Therefore, they argue, these claims cannot give rise to personal jurisdiction. Id.
A party may move for dismissal under Rule 12(b)(2) of the Federal Rules of Civil Procedure for lack of personal jurisdiction. The plaintiff bears the burden of establishing personal jurisdiction over the defendant. See Pebble Beach Co. v. Caddy, 453 F.3d 1151, 1154 (9th Cir.2006). "Where, as here, the motion is based on written materials rather than an evidentiary hearing, `the plaintiff need only make a prima facie showing of jurisdictional facts.'" Id. (quoting Sher v. Johnson, 911 F.2d 1357, 1361 (9th Cir.1990)). "Although the plaintiff cannot simply rest on the bare allegations of its complaint, ... uncontroverted allegations in the complaint must be taken as true." Schwarzenegger v. Fred Martin Motor Co., 374 F.3d 797, 800 (9th Cir. 2004) (internal quotations omitted). "Conflicts between parties over statements contained in affidavits must be resolved in the plaintiff's favor." Id. "Where ... there is no applicable federal statute governing personal jurisdiction, the district court applies the law of the state in which the district court sits." Dole Food Company, Inc. v. Watts, 303 F.3d 1104, 1110 (9th Cir.2002). The FLSA is silent with respect to personal jurisdiction and thus, the Court applies the law of California to determine whether personal jurisdiction exists. See Kouba v. Renzenberger, Inc., Case No. C10-159 TUC FRZ (GEE), 2010 WL 5342964, 2010 U.S. Dist. LEXIS 135743 (D.Ariz. May 14, 2010). "Because California's long-arm jurisdictional statute is coextensive with federal due process requirements, the jurisdictional analyses under state law and federal due process are the same." Dole Food, 303 F.3d at 1110 (citing Cal.Code Civ. Proc. § 410.10).
"For a court to exercise personal jurisdiction over a non-resident defendant, that defendant must have at least `minimum contacts' with the relevant forum such that the exercise of jurisdiction `does not offend traditional notions of fair play and substantial justice.'" Dole Food, 303 F.3d at 1110-11 (quoting International Shoe Co. v. Washington, 326 U.S. 310, 316, 66 S.Ct. 154, 90 L.Ed. 95 (1945)). "In judging minimum contacts, a court properly focuses on `the relationship among the defendant, the forum, and the litigation.'" Calder v. Jones, 465 U.S. 783, 788, 104 S.Ct. 1482, 79 L.Ed.2d 804 (1984) (quoting Shaffer v. Heitner, 433 U.S. 186, 204, 97 S.Ct. 2569, 53 L.Ed.2d 683 (1977)).
Personal jurisdiction may be either general or specific. See Bancroft & Masters, Inc. v. Augusta Nat'l Inc., 223 F.3d 1082, 1086 (9th Cir.2000). In Goodyear Dunlop Tires Operations, S.A. v. Brown, ___ U.S. ___, ___, 131 S.Ct. 2846, 2851, 180 L.Ed.2d 796 (2011), the Supreme Court explained that "[a] court may assert general jurisdiction over foreign (sister-state or foreign-country) corporations to hear any and all claims against them when their affiliations with the State are so `continuous and systematic' as to render them essentially at home in the forum State." Id. (citing International Shoe, 326 U.S. at 317, 66 S.Ct. 154). On the other hand, the Court continued, "[s]pecific jurisdiction ... depends on an `affiliatio[n] between the forum and the underlying controversy,' principally, activity or an occurrence that takes place in the forum State and is therefore subject to the State's regulation." Id. (citation omitted). Thus, the Court stated, "[i]n contrast to general, all-purpose jurisdiction, specific jurisdiction is confined to adjudication of issues deriving from, or connected with, the very controversy that establishes jurisdiction." Id. (citation and internal quotation marks omitted).
In International Shoe, the Court observed that there are "instances in which ... continuous corporate operations within a state [are] so substantial and of such a nature as to justify suit against it on causes of action arising from dealings entirely distinct from those activities." 326 U.S. at 318, 66 S.Ct. 154. The standard for establishing general jurisdiction is "fairly high." Brand v. Menlove Dodge, 796 F.2d 1070, 1073 (9th Cir.1986). A corporate defendant may be subject to general jurisdiction when its contacts with the forum "approximate physical presence." Bancroft & Masters, Inc. v. Augusta Nat'l Inc., 223 F.3d 1082, 1086 (9th Cir.2000). Whether this standard is met turns on the "economic reality of the defendants' activities rather than a mechanical checklist." Tuazon v. R.J. Reynolds Tobacco Co., 433 F.3d 1163, 1173 (9th Cir. 2006). "Factors to be taken into consideration are whether the defendant makes sales, solicits or engages in business in the state, serves the state's markets, designates an agent for service of process, holds a license, or is incorporated there." Bancroft & Masters, 223 F.3d at 1086.
"[E]ngaging in commerce with residents of the forum state is not in and of itself the kind of activity that approximates physical presence within the state's borders." Id. On the other hand, where there is a "confluence of ... physical, economic, and political presence," in the forum, there may be sufficient minimum contacts to give rise to general jurisdiction. Tuazon v. R.J. Reynolds Tobacco Co., 433 F.3d at 1173-75. Thus, for example, in Tuazon, the Ninth Circuit held that there was general
In recent years, in Goodyear and Daimler, the Supreme Court has cautioned against an overly expansive view of general jurisdiction in the context of the parent-subsidiary relationship. In Goodyear, the Court held that there was no general jurisdiction over a foreign subsidiary, even though there was general jurisdiction over the United States parent corporation, because the subsidiary's contacts with the forum were "attenuated" and it was "at no sense at home" there. 131 S.Ct. at 2857. The Supreme Court also noted that for a corporate defendant, the "paradigm forum for the exercise of general jurisdiction" as to the corporation is "an equivalent place" to an individual's domicile, such as the place of incorporation or principal place of business. 131 S.Ct. at 2853-54.
In Daimler AG v. Bauman, ___ U.S. ___, 134 S.Ct. 746, 187 L.Ed.2d 624 (2014), the Supreme Court held that a foreign parent could not be subject to general jurisdiction based on the contacts with the forum of the subsidiary. The Court explained that the principal place of business and the place of incorporation "have the virtue of being unique — that is, each ordinarily indicates only one place — as well as easily ascertainable." Id. at 760-61. The Daimler Court noted that "Goodyear did not hold that a corporation may be subject to general jurisdiction only in a forum where it is incorporated or has its principal place of business," though it "typed those places paradigm all-purpose forums." Id. at 760-761. Nor did it "foreclose the possibility that in an exceptional case ... a corporation's operations in a forum other than its formal place of operation or principal place of business may be so substantial and of such a nature as to render the corporation at home in that State." Id. at 761 n. 19. It rejected, however, the plaintiff's argument that there is general jurisdiction in "every State in which a corporation engages in a substantial, continuous, and systematic course of business," opining that such a formulation would be "unacceptably grasping." Id. at 761 (internal citations omitted).
The Court in Daimler further advised that "the general jurisdiction inquiry does not focu[s] solely on the magnitude of the defendant's in-state contacts." Id. at 762 n. 20 (internal quotation and citation omitted) (alteration in original). The Court explained:
Id.
The Personal Jurisdiction Defendants assert that although this case does not
A number of courts have held that there is no general jurisdiction over sports teams with forum contacts that are comparable to those of the Personal Jurisdiction Defendants in this case. For example, in Davis v. Billick, the court found no jurisdiction over the Baltimore Ravens in Texas under similar facts. Case No. 301CV1964D, 2002 WL 1398560 at *6 (N.D.Tex. June 26, 2002). There, the court held that the team's contacts were not sufficiently continuous and systematic to give rise to general jurisdiction where: 1) employees regularly traveled to Texas for National Football League ("NFL") owners meetings and the annual management council meeting; 2) the Ravens had contracted with a Texas resident to conduct scouting for the team; and 3) the team derived "substantial income" from NFL merchandise sales in Texas. Id. at *5-6.
Similarly, in Manton v. Cal. Sports, Inc., the court held that there was no personal jurisdiction over the Los Angeles Lakers in Georgia despite the fact that the Lakers: 1) "occasionally play games in Georgia"; 2) received "some revenue from Georgia by way of defendant's broadcast of games played in Georgia back to the Los Angeles area"; 3) received $800,000 from the National Basketball Association ("NBA") as its share of the amount paid by TV networks to broadcast NBA games, some of which were played in Georgia; and 4) received 100% of the gate receipts when Georgia NBA member the Atlanta Hawks played them in California. 493 F.Supp. 496, 496-98 (N.D.Ga.1980).
In Sullivan v. Tagliabue, the Court considered whether there was general jurisdiction in Rhode Island over the NFL and 21 of the 28 NFL member clubs. 785 F.Supp. 1076 (D.R.I.1992). The court considered the contacts of the NFL with Rhode Island and concluded that they were insufficient to establish general jurisdiction. Id. at 1079-81. It went on to address whether the contacts of the member clubs were sufficient to establish jurisdiction. Id. at 1081. The contacts of the member clubs with Rhode Island included: 1) "occasional trips" to Rhode Island, 2) broadcasts of NFL games into Rhode Island over network and cable stations and 3) receipt of money from ticket sales in the state and transaction of business with Rhode Island banks. Id. at 1081. The court concluded that these contacts were insufficient to support jurisdiction, at least where the claims (which were based on antitrust law) were not related to the contacts. Id.
In Evans v. Boston Red Sox, the court found that there was no general jurisdiction over an MLB Club, the Boston Red Sox, in Hawaii. Case No. 13-00262 SOM BMK, 2013 WL 6147675, at *4-5, 2013 U.S. Dist. LEXIS 166307, at *10-12 (D.Haw. Nov. 22, 2013). In reaching this conclusion, the court cited the facts (which were undisputed) that: 1) the Red Sox team "does not have any offices, employees, agents or bank accounts in Hawaii and does not own, rent or lease any property in Hawaii." Id. at *10. The team also "does not have any regular season or exhibition Major League Baseball games in Hawaii." Id. Therefore, the court concluded, the Boston Red Sox did not have contacts with Hawaii that were "continuous, systematic and substantial." Id.
In all of these cases, the courts evaluated general jurisdiction with reference only to the contacts of the teams themselves to
The Supreme Court's recent guidance on the theory of general jurisdiction has made clear that the concept of "home" in the context of general jurisdiction should be understood narrowly, with the "paradigm forum" for an individual being his or her domicile and for a corporation being its principal place of business or place of incorporation. Goodyear, 131 S.Ct. at 2853-54. Daimler did not foreclose the possibility that under some circumstances a forum may be "home" even if it does not fall into one of the paradigmatic categories. Id. at 760-61. The Court emphasized, however, that merely engaging in a "substantial, continuous and systematic course of business" is not sufficient to establish general jurisdiction and described as "exceptional" the case in which a defendant would be "at home" in a state other than one that falls within the paradigm. 134 S.Ct. at 761 n. 19. It also explained that in determining whether a defendant is at home, the court must appraise the defendant's "activities in their entirety, nationwide and worldwide." Id. at 762 n. 20.
Applying these principals to the Personal Jurisdiction Defendants here, the Court concludes that California cannot be considered home to any of these Clubs. Even though they have all engaged in regular travel to California, conducted some business with California, engage in scouting activities in the State and even have employees who are based here, there is no indication that these ties represent such a significant portion of their activities that their presence in California would be analogous to being domiciled in California or having their principal place of business in California. Nor have Plaintiffs offered any evidence showing that the revenues the Personal Jurisdiction Defendants receive from MLB's internet sales and TV broadcasts constitute a significant portion of their overall revenues.
Plaintiffs' reliance on Tuazon is unavailing. There, the contacts of the defendant tobacco company were vastly more significant than the contacts of the Personal Jurisdiction Defendants in this case. In particular, the court found that Reynolds had had a "serious" presence in the forum and generated "enormous" revenues from the state. 433 F.3d at 1173. Reynolds had also held a license to do business in the state for decades, "advertised in purely local publications since at least the 1950s,"
The Court also rejects Plaintiffs' assertion that it should reach a different result based on the "interdependent nature of MLB." Personal Jurisdiction Opposition at 13. Plaintiffs' position draws on cases that have highlighted the unique characteristics of sports associations, described in one case as follows:
Am. Football League v. Nat'l Football League, 27 F.R.D. 264, 268 (D.Md.1961) (finding that venue was proper as to two NFL team members based on activities of the NFL as a whole). Plaintiffs rely heavily on Erving v. Virginia Squires Basketball Club, 349 F.Supp. 709 (E.D.N.Y. 1972), which follows a similar line of reasoning to find personal jurisdiction over a basketball team based, in part, on the contacts with the forum of the unaffiliated association (the ABA) of which it was a member. For the reasons stated below, the Court concludes that this case does not provide strong support for Plaintiffs' assertion that the contacts of MLB with California should be attributed to the Personal Jurisdiction Defendants.
In Erving, a professional basketball player sought to rescind his contract with a basketball club ("Squires"). 349 F.Supp. at 711. Although the Squires were based in Virginia, the plaintiff brought the action in New York. Id. The Squires argued that there was no personal jurisdiction, but the court disagreed, finding that under New York's long-arm statute, N.Y. CPLR § 313, the Squires were "doing business" in New York and therefore were subject to jurisdiction. Id. at 712. The court reasoned that the contacts of the Squires had to be appraised with reference to their affiliation with the ABA, which it likened to a "joint venture" through which the member clubs "carry on an integrated business operation for mutual profit." Id. at 712-13. Thus, although the Squires played only six to eight games in New York (out of a total of 84 in a season), these games were not "casual[] or fortuitous[]" but rather, were played "on a regular and continuing basis pursuant to a well-organized business plan." Id. at 713.
Many of the contacts listed in Erving mirror the ones that the Personal Jurisdiction Defendants have with California in this case. These include games in the forum that are planned and scheduled by MLB as part of a "well-organized business plan," regular travel to the forum by employees and officials of the Personal Jurisdiction Defendants, and receipt of a share of certain revenues generated by MLB. The Erving court did not, however, address the question of whether its conclusion comported with the requirements of due process as set forth in International Shoe and its progeny. Nor did the court consider whether the Squires could be considered to be "at home" in New York. In addition, to the extent that its conclusion was based on the Squires' "continuous and substantial business operations" in New York, the court's reasoning may run afoul of the Supreme Court's recent decisions relating to general jurisdiction, which suggest that the approach in Erving may be "overly grasping." Therefore, the Court does not find Plaintiffs' reliance on Erving persuasive.
The Court also rejects Plaintiffs' arguments based on the law of agency and joint ventures. Plaintiffs argue that acts of an agent may imputed to the principal for the purposes of personal jurisdiction, citing Myers v. Bennett Law Offices, 238 F.3d 1068 (9th Cir.2001). Myers held that the acts of a defendant's employee could be imputed to the employer for the purposes of determining whether there was specific jurisdiction where the plaintiff had made a prima facie case that the employee had apparent authority as to the conduct at issue and the employer subsequently ratified the act. 238 F.3d at 1073. The court in that case court did not address general jurisdiction, however. Nor does the case shed any light on how agency principles might apply to members of an unaffiliated association for the purposes of assessing general jurisdiction.
Similarly, Plaintiffs' reliance on Daynard v. Ness, Motley, Loadholt, Richardson & Poole, P.A., 290 F.3d 42 (1st Cir. 2002) is misplaced. In that case, the First Circuit addressed whether there was jurisdiction in Massachusetts over claims against a Mississippi law firm on the basis of the contacts of a second law firm that had acted as an agent of the Mississippi firm. 290 F.3d at 44. The First Circuit reversed the district court's decision, finding that because the second firm held itself out as an agent of the first, there was a prima facie showing of jurisdiction. Id. at 45. The reasoning of that case is not applicable here, however, as the court expressly rejected the district court's reliance on a "substantial influence" test that was articulated in a case involving an unaffiliated association, Donatelli v. Nat'l Hockey League, 893 F.2d 459 (1st Cir. 1990)). The court explained that:
Id. at 54. If anything, the reasoning in Daynard points to the conclusion that members of unaffiliated associations are not treated like actual agents or joint venturers for the purposes of general jurisdiction.
Accordingly, the Court finds that there is no general jurisdiction over the Personal Jurisdiction Defendants in California.
"The inquiry whether a forum State may assert specific jurisdiction over a nonresident defendant `focuses on the "relationship among the defendant, the forum, and the litigation."'" Walden v. Fiore, ___ U.S. ___, 134 S.Ct. 1115, 1121, 188 L.Ed.2d 12 (2014) (quoting Keeton v. Hustler Magazine, Inc., 465 U.S. 770, 775, 104 S.Ct. 1473, 79 L.Ed.2d 790 (1984) (quoting Shaffer v. Heitner, 433 U.S. 186, 204, 97 S.Ct. 2569, 53 L.Ed.2d 683 (1977))). The exercise of specific jurisdiction "is consistent with due process" only where "the defendant's suit-related conduct ... create[s] a substantial connection with the forum state." Id.; see also Burger King Corp. v. Rudzewicz, 471 U.S. 462, 474, 105 S.Ct. 2174, 85 L.Ed.2d 528 (1985) ("the constitutional touchstone remains whether the defendant purposefully established `minimum contacts' in the forum state").
A court may exercise specific jurisdiction over a non-resident defendant where the following requirements are met:
Dole Food Co., Inc. v. Watts, 303 F.3d 1104, 1111 (9th Cir.2002).
The plaintiff bears the burden of satisfying the first two prongs of the test for specific jurisdiction. Id. (citing Sher v. Johnson, 911 F.2d 1357, 1361 (9th Cir.1990)). "If the plaintiff succeeds in satisfying both of the first two prongs, the burden then shifts to the defendant to `present a compelling case' that the exercise of jurisdiction would not be reasonable." Id. (quoting Burger King Corp. v. Rudzewicz, 471 U.S. 462, 476-78, 105 S.Ct. 2174,
Although the first prong of the test for specific jurisdiction is often referred to as "purposeful availment," the Ninth Circuit has explained that this is "shorthand" that refers to both "purposeful availment" and "purposeful direction." Schwarzenegger v. Fred Martin Motor Co., 374 F.3d 797, 802 (9th Cir.2004). These are "two distinct concepts." Id. In Yahoo! Inc. v. La Ligue Contre Le Racisme Et L'Antisemitisme, the Ninth Circuit explained that "[i]n tort cases, we typically inquire whether a defendant `purposefully direct[s] his activities' at the forum state, applying an `effects' test that focuses on the forum in which the defendant's actions were felt, whether or not the actions themselves occurred within the forum," whereas "in contract cases, we typically inquire whether a defendant `purposefully avails itself of the privilege of conducting activities' or `consummate[s] [a] transaction' in the forum, focusing on activities such as delivering goods or executing a contract." 433 F.3d at 1206 (citing Schwarzenegger, 374 F.3d at 802-03) (citing Calder v. Jones, 465 U.S. 783, 789-90, 104 S.Ct. 1482, 79 L.Ed.2d 804 (1984)).
Wage and hour claims asserted under the FLSA and state law are neither tort nor contract claims. Some courts in this District have "likened FLSA claims to tort claims and have applied the purposeful direction standard." Telles v. Li, Case No. 11-cv-1470 LHK, 2013 WL 5199811, at *4 (N.D.Cal. Sept. 16, 2013) (citing Enriquez v. Interstate Group, LLC, Case No. 11-cv-05155 YGR, 2012 WL 3800801, at *3 (N.D.Cal. Aug. 31, 2012) (applying purposeful direction to FLSA claim); Holliday v. Lifestyle Lift, Inc., Case No. 09-cv-4995 RS, 2010 WL 3910143, at *3 (N.D.Cal. Oct. 5, 2010) (same)). In Holliday, for example, the court concluded that the allegations in that case — that two of the defendants "masterminded the employment policy that denied overtime compensation to non-exempt employees" — "[lent] itself to the intentional tort analysis" and therefore analyzed the first prong of the specific jurisdiction test under the purposeful direction standard. 2010 WL 3910143, at * 3. The court acknowledged, however, that FLSA claims are "not easily categorized as either a contract or a tort dispute" and that because an FLSA claim "assumes the existence of an employment contract ... courts have analogized violations under the contract to common law contract breach." Id. (citing Pavlo v. Stiefel Laboratories, Inc., Case No. 78, 1979 WL 105, at *6 (S.D.N.Y. Nov. 27, 1979)).
While the parties here have characterized the first prong of the specific jurisdiction test as a question of purposeful direction, both sides have relied upon purposeful availment decisions in support of their positions as well. See, e.g., Sheets v. Integrated Information Utility Systems, Inc., Case No. 98-cv-1328-KI, 1999 WL 417274 (D.Or. Jun. 17, 1999) (applying purposeful availment analysis in case involving both breach of contract and statutory wage and hour claims) (cited by Plaintiffs); Novak v. NanoLogix, Inc., Case No. 13-cv-01971 EJD, 2014 WL 991119, at *2 (N.D.Cal. Mar. 11, 2014) (applying purposeful availment analysis in case involving only claims for breach of employment agreement) (cited by Personal Jurisdiction Defendants); SRE-Cheaptrips, Inc. v. Media Synergy Group, LLC, Case No. 09-cv-00622-S-EJL,
The Court has found no case law that suggests that wage and hour claims may not be addressed under the purposeful availment approach and further finds that many of the facts here lend themselves to the contract analysis. Therefore, the Court addresses the first prong of the specific jurisdiction test under both the contractual purposeful availment approach and the purposeful direction approach. Before the Court conducts a team-by-team analysis of the Purposeful Availment prong, it sets forth certain guidelines under each approach based on the case law that it finds to be relevant to the facts of this case.
As the Personal Jurisdiction Defendants correctly note in their supplemental brief, "[s]igning a contract with an out-of-state defendant does not `automatically establish sufficient minimum contacts to support jurisdiction.'" Personal Jurisdiction Defendants' Supp. Brief at 8 (quoting Selhorst v. Alward Fisheries, LLC, Case No. 11-cv-3266 EMC, 2011 WL 4974568, at *4 (N.D.Cal. Oct. 19, 2011) (citing Burger King Corp. v. Rudzewicz, 471 U.S. 462, 478, 105 S.Ct. 2174, 85 L.Ed.2d 528 (1985))). Instead, "[b]ecause the contract is `ordinarily but an intermediate step serving to tie up prior business negotiations with future consequences which themselves are the real object of the business transaction[,] [i]t is these factors — prior negotiations and contemplated future consequences, along with the terms of the contract and the parties' actual course of dealing — that must be evaluated in determining whether the defendant purposefully established minimum contacts within the forum.'" Id. (quoting Burger King, 471 U.S. at 479, 105 S.Ct. 2174).
With respect to prior negotiations, courts do not focus narrowly on the negotiation of specific contract terms; rather, they consider which party initiated the negotiations and whether the defendant reached out to the plaintiff in the forum (a factor that may support a finding of contractual purposeful availment). See Roth v. Garcia Marquez, 942 F.2d 617, 622 (9th Cir.1991) (question of purposeful availment depends, in part, on which party initiated contact); Van Steenwyk v. Interamerican Mgmt. Consulting Corp., 834 F.Supp. 336, 342 (E.D.Wash.1993) (finding there was purposeful availment based, in part, on evidence that defendant negotiated contract with plaintiff in the forum); cf. Slepian v. Guerin, 172 F.3d 58 (9th Cir.1999) (unpublished) (finding that California employer did not direct its activities toward Oregon based, in part, on the fact that Oregon plaintiff had initiated contact with employer by sending her resume to the employer in California and going there for an interview); Novak v. NanoLogix, Inc., 2014 WL 991119, at *4 (N.D.Cal. Mar. 11, 2014) (finding no purposeful availment of right to conduct business in California where plaintiff first made contact with Ohio-based employer in California but there was no evidence the employer was
While courts also consider the "actual course of dealing," communication with the plaintiff in the forum by mail, telephone, or other forms of communications generally is not sufficient to show purposeful availment. Roth, 942 F.2d at 622 (citing Peterson v. Kennedy, 771 F.2d 1244, 1262 (9th Cir.1985)). Similarly, courts have found that even where the contract was negotiated and signed in the forum, there is no purposeful availment if this was but a "one shot" contact with no future performance envisioned in the forum. See Selhorst v. Alward Fisheries, LLC, 2011 WL 4974568, at *4 (noting that courts find purposeful availment of the privilege of doing business in the forum where "the contract was not `a one-shot deal that was merely negotiated and signed by one party in the forum,' but dependent upon further activities in the forum state" (quoting Roth v. Garcia Marquez, 942 F.2d 617, 622 (9th Cir.1991)); see also Sarkis v. Lajcak, Case No. 08-cv-01911 RMW, 2009 WL 3367069, at *3 (N.D.Cal. Oct. 15, 2009) (holding that job advertisement placed in magazine that was circulated worldwide, including in California, was not sufficient to establish purposeful availment in California where performance of contract was entirely in Bosnia, even though the defendant communicated with the plaintiff in California during the negotiations that led to the signing of the contract).
In Selhorst, the defendants recruited and hired the plaintiff in California to work as a skiffman on their vessel. 2011 WL 4974568, at *1. The plaintiff was injured while working on the vessel in Alaska and brought claims under the Jones Act in California. Id. In addressing specific jurisdiction, the court found that there was no purposeful availment of the privilege of conducting business in California because "the contract concerned fishing activities in Alaska only." Id. at *6. The court in Selhorst did not cite to any specific terms of the contract specifying the location of performance and it is not clear if the contract in that case contained any such terms. Rather, the court cited the fact that "[n]o part of the contract was performed in California, and any payments sent to California would be dependent on Plaintiff's work in Alaska." Id. This is consistent with the Ninth Circuit's instruction that in evaluating the future consequences of a contract, it is the "economic reality" that matters. See Roth, 942 F.2d at 622 (citing Haisten v. Grass Valley Med. Reimbursement Fund, Ltd., 784 F.2d 1392, 1398 (9th Cir.1986)). "This `qualitative analysis' must determine whether the [defendant] could have reasonably anticipated being haled into court in [the forum]." Sarkis, 2009 WL 3367069, at *3 (citing Harris Rutsky & Co. Ins. Services, Inc. v. Bell & Clements Ltd., 328 F.3d 1122, 1130 (9th Cir.2003)).
An instructive example of the application of the purposeful availment approach in the wage and hour context is Wood v. Kinetic Systems, Inc., Case No. 09-cv-579 SCWD, 2010 WL 893647 (D.Idaho Mar. 9, 2010). Although that case purports to be a purposeful direction case (and was cited as such by the parties), the undersigned finds that it is better understood as a purposeful availment case. In particular, in Wood, the court relied almost entirely upon a contract case in which specific jurisdiction was analyzed with reference to purposeful availment. Id. at *5 (citing Albertson's LLC v. Kleen-Sweep Janitorial Co., Inc., Case No. 09-cv-263-S-BLW, 2009 WL 3786290 (D.Idaho Nov. 9, 2009)). Analogizing the facts of Wood to those of Albertson's, the court found that the defendant
In Wood, the plaintiff ("Wood") was employed as a Regional Labor Manager in Idaho by a company, Kinetic Systems, Inc. ("Kinetic"), that was incorporated in California and had its principal place of business in Fremont, California until 2006 and then in North Carolina. Id. at *1. Kinetic did not maintain any offices in Idaho. Id. Kinetic hired Wood by sending him a letter agreement in Idaho. Id. When Wood was not travelling to other job assignments, he worked out of his home. Id. Kinetic considered Plaintiff's home to be his "report-to-work" location, although Wood travelled extensively to other locations while employed by Kinetic and Kinetic had no ongoing projects in Idaho during Wood's employment. Id. at *1-2. Kinetic provided office equipment for Wood's home office and paid for his land-line telephone expenses, union dues to a local Idaho union and unemployment insurance premiums to the state of Idaho. Id. Wood sued Kinetic in Idaho and Kinetic sought dismissal on the basis that there was no personal jurisdiction there, arguing that it had committed no intentional act aimed at Idaho other than hiring Wood and considering Idaho to be his "report-to-work" location. Id. at *5. The court, however, rejected Kinetic's position, citing the fact that Kinetic knew it was hiring an Idaho resident, sent the letter agreement to Idaho, considered Idaho to be Wood's "report-to-work" location (as reflected in the letter agreement between the parties), had a longstanding business relationship with Wood, paid local union dues and maintained its registration with the State of Idaho so that it could perform contracting work if the need arose. Id. at *6. On the basis of these contacts, the court concluded that the purposeful availment requirement was met. Id.
Purposeful direction is analyzed under the "effects test" announced in the Supreme Court's decision in Calder v. Jones, 465 U.S. 783, 104 S.Ct. 1482, 79 L.Ed.2d 804 (1984). Dole Food, 303 F.3d at 1111. "Calder stands for the proposition that purposeful availment is satisfied even by a defendant `whose only "contact" with the forum state is the "purposeful direction" of a foreign act having effect in the forum state.'" Id. at 1111 (quoting Haisten v. Grass Valley Med. Reimbursement Fund, 784 F.2d 1392, 1397 (9th Cir. 1986) (emphasis omitted)). The three-part "effects test" requires that "the defendant allegedly have 1) committed an intentional act, 2) expressly aimed at the forum state, 3) causing harm that the defendant knows is likely to be suffered in the forum state." Dole Food, 303 F.3d at 1111.
Typically, the adoption of a uniform policy regarding the payment (or nonpayment) of wages satisfies the first prong of the effects test, the intentional act requirement. See Holliday v. Lifestyle Lift, Inc., Case No. 09-cv-4995 RS, 2010 WL 3910143, at *4 (N.D.Cal. Oct. 5, 2010); Enriquez v. Interstate Group, L.L.C., Case No. 11-cv-5155 YGR, 2012 WL 3800801, at *4 (Aug. 31, 2012). Further, where an employer knows that its employee is performing
The Court looks first to Calder and Walden for guidance in applying the express aiming test. In Calder, the Supreme Court addressed whether a reporter ("South") and editor ("Calder") located in Florida could be subject to jurisdiction on a defamation claim in California based on publication of an article about the plaintiff ("Jones") — who lived and worked in California — that was published by their employer, the National Enquirer. 465 U.S. 783, 104 S.Ct. 1482, 79 L.Ed.2d 804 (1984). The National Enquirer had a nationwide circulation and did not challenge jurisdiction, but South and Calder asserted that they were not subject to jurisdiction in California because all of their alleged conduct occurred in Florida, where they resided. Id. at 785-86, 104 S.Ct. 1482. South had few contacts with California. Id. He "wrote the first draft of the challenged article ... [and] did most of his research in Florida, relying on phone calls to sources in California for the information contained in the article." Id. at 785, 104 S.Ct. 1482. In addition, "[s]hortly before publication, South called [Jones's] home and read to her husband a draft of the article so as to elicit his comments upon it" Id. at 786, 104 S.Ct. 1482. Similarly, Calder "reviewed and approved the initial evaluation of the subject of the article and edited it in its final form." Id. at 786, 104 S.Ct. 1482. "He also declined to print a retraction requested by respondent." Id. Calder did not travel to California in connection with the publication of the article. Id.
The Court found that the contacts of South and Calder were sufficient to establish personal jurisdiction. Id. at 788-89, 104 S.Ct. 1482. It acknowledged that neither the reporter nor the editor was responsible for the actual circulation of the article in California by the National Enquirer and recognized that "their contacts with California [were] not to be judged according to their employer's activities there." Id. at 790, 104 S.Ct. 1482. Nonetheless, the Court concluded that "their intentional, and allegedly tortious, actions were expressly aimed at California," citing its decision in World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 297-98, 100 S.Ct. 559, 62 L.Ed.2d 490 (1980) and the Restatement (Second) of Conflict of Laws § 37.
Id. at 788, 104 S.Ct. 1482.
The Supreme Court revisited the effects test in Walden v. Fiore, ___ U.S. ___, 134 S.Ct. 1115, 188 L.Ed.2d 12 (2014). In that case, Drug Enforcement Agency ("DEA") agents in Atlanta received information that two professional gamblers (Gina Fiore and Keith Gipson) who were carrying a substantial amount of cash, had boarded a plane from San Juan, Puerto Rico headed for Atlanta, and that they planned to catch a connecting flight to Las Vegas. 134 S.Ct. at 1119. When Fiore and Gipson arrived in Atlanta, the DEA agents questioned them and, after using a drug-sniffing dog to perform a sniff test (which was "at best, inconclusive"), seized the cash, telling Fiore and Gipson that the money would be returned if they later proved they had obtained the cash from a legitimate source. Id. At some point after the seizure, one of the DEA agents ("Walden") — a Georgia police officer who had been deputized by the DEA — drafted a probable cause affidavit in connection with the forfeiture that Fiore and Gipson asserted was false and misleading, and forwarded the affidavit to the United States Attorney's office in Georgia. Id. at 1119-20. Fiore and Gipson alleged that the affidavit omitted exculpatory information related to the encounter at the Atlanta airport, namely, that there was no drug evidence and the funds were from a legitimate source (gambling winnings). Id. at 1120. Ultimately, no forfeiture complaint was filed and the money was returned to Fiore and Gipson. Fiore and Gipson then asserted a claim against Walden in Nevada under Bivens v. Six Unknown Federal Narcotics Agents, 403 U.S. 388, 91 S.Ct. 1999, 29 L.Ed.2d 619 (1971) based on alleged violation of their Fourth Amendment rights. Id. Walden, in turn, argued that there was no jurisdiction in Nevada. Id. The Ninth Circuit, applying the Calder "effects test," concluded that Walden's original search and seizure was not directly aimed at Nevada but that the false affidavit was because by that time, Walden knew that Fiore and Gipson had a significant connection to Nevada. Fiore v. Walden, 688 F.3d 558, 577-578 (9th Cir.2012). The Supreme Court, however, disagreed.
The Walden Court began its analysis by reviewing the principles that apply to the assertion of specific jurisdiction over a non-resident, beginning with the general proposition that "[f]or a State to exercise jurisdiction consistent with due process, the defendant's suit-related conduct must create a substantial connection with the forum State." 134 S.Ct. at 1121. It then went on to highlight two "related aspects of this necessary relationship." Id. First, the Court emphasized, "the relationship must arise out of contacts that the `defendant himself' creates with the forum State." Id. at 1122 (quoting Burger King Corp. v. Rudzewicz, 471 U.S. 462, 475, 105 S.Ct. 2174, 85 L.Ed.2d 528 (1985)) (emphasis in original). Thus, the Court explained, "[w]e have consistently rejected attempts to satisfy the defendant-focused `minimum contacts' inquiry by demonstrating contacts between the plaintiff (or third parties) and the forum State." Id. (citing Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 417, 104 S.Ct. 1868, 80 L.Ed.2d 404 (1984) ("[The] unilateral activity of another party or a third person is not an appropriate consideration when determining whether a defendant has sufficient contacts with a forum State to justify an assertion of jurisdiction")).
Second, the Court in Walden cautioned that "our `minimum contacts' analysis looks to the defendant's contacts with the
Applying these principles, the Court found that Walden's contacts with Nevada were not sufficient to exercise specific jurisdiction in connection with the allegedly false affidavit. Id. at 1124. The Court reasoned:
Id. (emphasis in original). The Court found that the Ninth Circuit had erred by "shifting the analytical focus from petitioner's contacts with the forum to his contacts with respondents" and relying on Walden's "knowledge of respondents' `strong forum connections.'" Id. (quoting 688 F.3d at 577-579). This approach, the Court concluded, "obscure[d] the reality that none of [Walden's] challenged conduct had anything to do with Nevada itself." Id. The Court distinguished Calder on the basis that the "`effects' of the alleged libel connected the defendants to California, not just to the plaintiff" because of the "nature of the libel tort." Id. at 1123-24. In particular, the Court reasoned, libel is considered to occur where the statement is published because that is where the harm to reputation occurs. Id. Because the article in Calder was published in California and was read by a large number of California citizens, the tort in that case was "connected to California, not just to a plaintiff who lived there." Id. (emphasis in original).
The undersigned understands Walden to stand for the proposition that where a defendant's only contact with the forum is its knowledge of the plaintiff's connection with the forum resulting from the plaintiff's unilateral actions (e.g., the plaintiff's choice to reside in the forum), there are not sufficient contacts with the forum to support specific jurisdiction consistent with the requirements of due process. Walden does not, however, preclude a finding of specific jurisdiction where the defendant's own intentional conduct "creates the necessary contacts with the forum." Walden, 134 S.Ct. at 1123. Thus, in the wage and hour context, the express aiming requirement is met where an out-of-state defendant targets the forum by operating businesses there and applying the challenged policy to individuals hired to work at those businesses. See Enriquez v. Interstate Group, LLC, Case No. 11-cv-05155 YGR, 2012 WL 3800801
The Court further concludes that where a defendant conducts extensive and ongoing scouting and recruiting in the forum and hires residents of the forum on a regular and continuous basis, the application of a wage policy that is alleged to be in violation of the FLSA and state wage and hour laws to work that is required under the contract and is performed in California is a contact that is not "random" or "fortuitous," even if the defendant does not expressly require employees to perform the work in California. Therefore, such conduct may satisfy the express aiming requirement of purposeful direction. See Ochoa v. J.B. Martin and Sons Farms, Inc., 287 F.3d 1182 (9th Cir.2002) (finding specific jurisdiction where it was undisputed that labor contractor that hired workers in Arizona and brought them back to New York to work on the defendant's farm had "directed its recruiting activities toward Arizona");
In sum, although there is evidence that the Atlanta Braves conducted recruiting and scouting in California, there is no evidence that they reached out to Lewis in the forum to recruit him. Thus, this factor does not support a finding of purposeful availment. Nor did the contract affirmatively require that Lewis perform his offseason work in California; indeed, it is undisputed that much of the performance envisioned under the contract would occur outside of California. On the other hand, the Atlanta Braves presented the contract to Lewis in the forum, sent communications related to Lewis's employment to Lewis in the forum, and knew that the required offseason conditioning would likely be performed (and was actually performed) in California given that Lewis was a California resident. Though a close call, the Court concludes that in the absence of any evidence that the Atlanta Braves affirmatively reached out to the forum to recruit Lewis, the evidence offered by Plaintiffs is not sufficient to show that the Atlanta Braves purposefully availed themselves of the privilege of doing business in California.
In sum, Plaintiffs have presented evidence that the Pittsburgh Pirates reached out to California to recruit Watts, presented the contract to Watts in California, had an ongoing relationship with Watts in California for a significant portion of every year over a six-year period, and required Watts to perform offseason work that they knew was being performed in California. Under these circumstances, the Court finds that the Pittsburgh Pirates have purposefully availed themselves of the privilege of doing business in California.
The Court finds that Plaintiffs have offered insufficient evidence to establish that the Chicago White Sox purposefully availed themselves of the privilege of doing business in California. While they sent Giarraputo's contract to California and required him to perform preseason conditioning that they knew would likely be performed in California, their relationship with Giarraputo in California lasted only a short period and they did not affirmatively reach out to California to recruit Giarraputo. Nor has Giarraputo pointed to any ongoing communications sent to him in California while he was employed by the Chicago White Sox. Therefore, the Court concludes that Plaintiffs have not shown purposeful availment in California by the Chicago White Sox.
In sum, Plaintiffs have offered evidence that the Tampa Bay Rays presented Gorgen with the contract in California, mailed at least two communications to California relating to the contract over the course of two years, and knew that Gorgen was returning to California during the offseason, where he was performing his offseason conditioning. On the other hand, there is no evidence that the Tampa Bay Rays reached out to California to recruit Gorgen and Gorgen's description the communications he received while in California (other than the contract and the addenda) is vague, suggesting these contacts were limited. These facts, like those relating to the Atlanta Braves, present a close call. The Court concludes, however, that the evidence regarding the negotiation of the contract, ongoing course of conduct of the parties and the envisioned future performance under the contract points away from a finding of purposeful availment.
In sum, Plaintiffs have offered evidence that the Washington Nationals presented Davis with the contract in California and knew that Davis was returning to California, where he was performing his offseason conditioning. On the other hand, there is no evidence that the Washington Nationals reached out to California to recruit Davis and Davis's statement that he "believes" he received materials in California from "the teams" is too vague to support an inference that he received regular (or any) communications from the Washington Nationals in California related to the contract on an ongoing basis. The Court concludes, balancing these factors, that Plaintiffs have not offered sufficient evidence to establish purposeful availment of the privilege of doing business in California by the Washington Nationals.
In sum, even though there is no evidence that Gagnier actually signed the contract with the Detroit Tigers in California, the evidence shows that the Detroit Tigers reached out to the forum to hire Gagnier, not only by recruiting and scouting him in California but also by having their area scout contact Gagnier to work out the terms of the agreement. Though it is not clear what communications were sent to Gagnier in California (again, the description of what he believes may have been sent to him in California is vague), the evidence shows that the Detroit Tigers had an ongoing relationship with Gagnier in California for a significant portion of every year over a six-year period, and required Gagnier to perform offseason work that they knew was being performed in California. The Court finds that this evidence is sufficient to show that the Detroit Tigers purposefully availed themselves of the privilege of doing business in California.
In sum, Pinckney signed his contract with the Philadelphia Phillies in California and, in early 2010, performed between two and three months of required preseason work for the Phillies in California. It is not clear what materials may have been sent to him in California. Nor was Pinckney scouted or recruited by the Philadelphia Phillies in California. The Court finds that these contacts are insufficient to establish purposeful availment of the privilege of doing business in California by the Philadelphia Phillies.
These facts present a close call. Wagner was employed by the Boston Red Sox for a period of six years, during which time he continued to reside in California. Thus, the Boston Red Sox knew that work that was required under the contract likely was being performed by Wagner in California during this period. On the other hand, there is no evidence that the Boston Red Sox reached out to California to scout or recruit Wagner. Nor is there evidence that the contract was signed in California. And even though Wagner played for the Boston Red Sox for six years, it is not clear that how much of the offseason training occurred in California given that Wagner states only that he "generally" returned to California to perform offseason training. It also is unclear what "materials" may have been mailed to him in California; nor is there evidence of any other communications with Wagner in California. Balancing these factors, the Court concludes that Plaintiffs have failed to establish that the Boston Red Sox purposefully availed themselves of the privilege of doing business in California.
The evidence relating to Aguilar is insufficient to establish purposeful availment as to the Cleveland Indians. Although the Cleveland Indians scouted and recruited Aguilar when he was a student in California, in 2004-2005, it was not until many years later that Aguilar was employed by the Cleveland Indians, when he was traded to the Indians. There is no indication his employment with the Cleveland Indians was in any way related to their scouting of
In sum, the New York Yankees recruited Duff in California over a two-year period, had their area scout present the contract to Duff in California and had an ongoing relationship with Duff in California for a seven-year period, requiring Duff to perform offseason work that they knew was being performed in California during a significant portion of every year. The Court finds that this evidence is sufficient to show that the New York Yankees purposefully availed themselves of the privilege of doing business in California.
For the reasons stated above, the Court finds that Plaintiffs have established purposeful direction as to all of the Personal
The second prong of the specific jurisdiction test, which asks whether a claim "arises out of or relates to" the defendant's contacts with the forum, is governed by a "but for" test, that is, would the claims have arisen but for the contacts with the forum. Doe v. Unocal Corp., 248 F.3d 915, 924-25 (9th Cir.2001) (citing Ballard v. Savage, 65 F.3d 1495, 1500 (9th Cir.1995)); see also Alexander v. Circus Circus Enterprises, Inc., 939 F.2d 847, 853 (9th Cir.1991), withdrawn and superseded on rehearing, 972 F.2d 261 (9th Cir.1992) ("[t]his circuit has already decided that the critical focus in the `arising out of' prong is whether, `but for' the defendant's forum-related activities, the injury would have occurred; that is, whether the `entire course of events ... was an uninterrupted whole which began with, and was uniquely made possible by, the [defendant's] contacts in [the forum state]'") (quoting Shute v. Carnival Cruise Lines, 897 F.2d 377, 383-84 (9th Cir.1990), rev'd on other grounds by Carnival Cruise Lines v. Shute, 499 U.S. 585, 111 S.Ct. 1522, 113 L.Ed.2d 622 (1991)).
In Shute, the Ninth Circuit rejected a strict approach to the "arising out of" prong that would have required proximate causation be demonstrated, adopting instead a looser approach that requires only "some nexus between the cause of action and the defendant's activities in the forum." 897 F.2d 377, 385 (9th Cir.1990). There, the plaintiffs were residents of Southern California who had traveled to Nevada, where they were injured when a pontoon boat operated by the defendant capsized. 939 F.2d at 849. The plaintiffs sued in California, asserting that they would not have gone to Nevada and subsequently been injured but for the defendant's advertising in the travel section of the Los Angeles Times. Id. at 853. In addressing the "arising out of" prong, the court rejected the defendant's assertion that the plaintiffs were required to show that "but for the advertising, the pontoon boat would not have capsized," finding this reading of the causation requirement was overly narrow and was not necessary to "protect potential defendants from unreasonable assertions of jurisdiction." Id.
In wage and hour cases where the defendant has ongoing operations in the forum, such as stores (see Enriquez, 2012 WL 3800801, at *5), a restaurant (see Telles, 2013 WL 5199811, at *5) or medical facilities (see Holliday, 2010 WL 3910143, at *4), the "arising out of" requirement is usually easy to satisfy. Under these circumstances, but for the application of the challenged wage and hour policy to employees who were hired to work at these businesses, the harm would not have occurred and the claim would not have arisen. Nor is the location of the harm dependent upon the unilateral actions of the plaintiffs in such cases, as they were hired to work at specific locations in the forum. Thus, this conclusion is consistent with the admonition of Walden that jurisdiction cannot be based on the "unilateral activity" of a plaintiff but rather "must be based on intentional conduct by the defendant that
Here, however, Plaintiffs were not hired to work in a specific location (at least during the offseason, when the unpaid work was performed) but rather, were permitted to perform that work wherever they chose. Thus, to satisfy Walden and the requirements of due process, there can be specific jurisdiction only if Plaintiffs' claims arise out of the purposeful conduct of the Personal Jurisdiction Defendants. As discussed above, Plaintiffs have demonstrated that the Personal Jurisdiction Defendants have purposefully directed their conduct toward California by scouting and recruiting here and, as to at least some of the Personal Jurisdiction Defendants, have also availed themselves of the privilege of doing business in California by entering into contracts with California residents that envision that the plaintiffs will perform unpaid work during the offseason. Below, the Court addresses whether Plaintiffs' claims arise out of either or both of these types of conduct.
The difficult issue before the Court in determining whether Plaintiffs' claims arise out of the Personal Jurisdiction Defendants' recruiting and scouting in California is how tight the connection must be between the Personal Jurisdiction Defendants' contacts and Plaintiffs' claims. In Yahoo! Inc. v. La Ligue Contre le Racisme et L'Antisemitisme, the court explained that courts "consider the extent of the defendant's contacts with the forum and the degree to which the suit is related to those contacts," using a sliding scale whereby "[a] strong showing on one axis will permit a lesser showing on the other." 433 F.3d 1199, 1210 (9th Cir.2006) (citations omitted). According to the Yahoo! court, the "classic polar case for specific jurisdiction described in International Shoe" is the one "in which there are very few contacts but in which those few contacts are directly related to the suit." Id. (emphasis added). By implication, specific jurisdiction might also exist as to a defendant with more extensive contacts with the forum even though those contacts are not as closely related to the claims being asserted.
The tightness of the connection between the forum-related contacts and Plaintiffs' claims depends on the level of generality at which the inquiry is framed. See Rhodes, Charles W. & Robertson, Cassandra Burke, Towards a New Equilibrium in Personal Jurisdiction, 48 U.C. Davis L. Review 207, 242 (2014) (recognizing that "higher levels of generality will expand the state's jurisdictional reach"). Thus, for example, if the inquiry is framed at a rather general level, one might find that Plaintiffs' claims for wage and hour violations would not have arisen but for the collective scouting and recruiting activities of MLB teams in California; that is, as a result of the California scouting and recruiting activities of the MLB teams, including the Personal Jurisdiction Defendants, all of the named Plaintiffs were recruited to work as Minor League players, ultimately resulting in their performing unpaid work for one of the Personal Jurisdiction Defendants in California. This is how Plaintiffs have framed the issue. See Plaintiffs' Supp. Brief at 4 ("The [Personal Jurisdiction] Defendants' conscious selection of Californians ... led to named Plaintiffs performing work in California for no pay"). Alternatively, a narrower way of framing the issue would require that a plaintiff who is asserting a wage and hour claim must actually have been recruited and drafted by the team against whom the claim is asserted. Without conceding that their scouting and recruiting in California can give rise to specific jurisdiction, the Personal Jurisdiction Defendants have taken
The Court concludes that the narrower framing of the issue is more consistent with the Supreme Court's recent guidance on specific jurisdiction than the more general framing proposed by Plaintiffs. In Walden, the Court emphasized that minimum contacts cannot be based on contacts between the forum and third parties. See Walden, 134 S.Ct. at 1122. Finding that claims against one defendant arise from the recruiting and scouting activities of another defendant flies in the face of that rule. As discussed above, members of unaffiliated associations are not agents or joint venturers and therefore, it is not appropriate to impute the conduct of one member of the association to another member. Therefore, the Court finds that in order to meet the "arising out of" requirement based on the scouting and recruiting activities of the Personal Jurisdiction Defendants, Plaintiffs must show that for each Personal Jurisdiction Defendant, there is at least one named Plaintiff who was scouted or recruited by that particular Defendant in California and later suffered harm because that same defendant did not pay for work that was performed by the named Plaintiff in California.
As the Personal Jurisdiction Defendants acknowledge, four of the named Plaintiffs claim to have been scouted or recruited while they were attending high schools or colleges in California by one or more of the Personal Jurisdiction Defendants: Kris Watts (Pittsburgh Pirates), Lauren Gagnier (Detroit Tigers), Omar Aguilar (Cleveland Indians/Baltimore Orioles) and Grant Duff (New York Yankees). See Defendants' Supp. Brief at 5; see also Watts Decl. at ¶ 3; Gagnier Decl. at ¶ 3, Aguilar Decl. at ¶ 4; Duff Decl. at ¶ 4. Watts, Gagnier and Duff were recruited directly out of high school or college by the Personal Jurisdiction Defendants against whom they assert their wage and hour claims (the Pittsburgh Pirates, the Detroit Tigers and the New York Yankees, respectively) and went on to perform unpaid offseason work in California for those defendants. Therefore, as to the Pittsburgh Pirates, the Detroit Tigers and the New York Yankees the Court has no difficulty concluding that the claims of Watts, Gagnier and Duff arise out of the purposeful conduct of those Clubs.
On the other hand, the Court concludes that the claim by Aguilar that he was scouted by the Cleveland Indians is not sufficient to satisfy the "arising out of" requirement as to his claim against the Cleveland Indians because there is no indication that Aguilar entered into an employment relationship with the Cleveland Indians as a result of their scouting and recruiting of Aguilar. Rather, as discussed above, Aguilar was traded to the Cleveland Indians many years after that conduct occurred.
The Court rejects the Personal Jurisdiction Defendants' reliance on Norris v. Oklahoma City University, Case No. 93-cv-1626 VRW, 1993 WL 313122, at *3 (N.D.Cal. Aug. 3, 1993) for the broad proposition that recruiting in the forum cannot give rise to specific jurisdiction and therefore Plaintiffs cannot establish but for causation based upon such contacts. See Personal Jurisdiction Defendants' Supp. Brief at 6. In Norris, the court found that there was no specific jurisdiction in California over an Oklahoma law school as to the plaintiff's claims that she had received an inadequate legal education there. 1993 WL 313122, at *3-4. The court held that
The Court also rejects the assertion that it may not consider scouting and recruiting activities that occurred outside of the applicable limitations periods. See Personal Jurisdiction Defendants' Supp. Brief at 3. No authority was offered in support of this assertion and the Court finds none.
In addition to the scouting and recruiting activities of the Personal Jurisdiction Defendants, the Court has also found that certain of these defendants availed themselves of the privilege of doing business in California, namely, the Pittsburgh Pirates, the Detroit Tigers and the New York Yankees. As to these Club, the Court finds that the "arising out of" requirement is satisfied because their claims that the Personal Jurisdiction Defendants failed to pay them for offseason work in California is directly related to the requirement under the players' contracts that they perform such work during the offseason. But for this contractual requirement, these named Plaintiffs' claims would not have arisen.
The court rejects the Personal Jurisdiction Defendants' assertion that Plaintiffs' claims cannot arise out of any contacts they may have with the forum because their claims are too vague to satisfy the requirements of Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) and Ashcroft v. Iqbal, 556 U.S. 662, 669, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009). The case cited in support of this argument, Landers v. Quality Communications, Inc., 771 F.3d 638, 646 (9th Cir.2014), is not on point. There, the Ninth Circuit held that the allegations in support of the plaintiffs' claim for failure to pay overtime wages were so vague that a reasonable inference could not be drawn that there was any week in which they worked more than forty hours and were not paid overtime. Id. at 646. In contrast, the allegations of the named Plaintiffs against the Personal Jurisdiction Defendants easily support an inference that they performed unpaid work during specific time periods, in violation of the FLSA and state wage and hour laws.
For the reasons stated above, the Court concludes that the "arising out of" requirement is satisfied as to the Pittsburgh Pirates, the Detroit Tigers and the New York Yankees.
"Once it has been decided that a defendant purposefully established minimum contacts with a forum, `he must present a compelling case that the presence of some other considerations would render jurisdiction unreasonable' in order to defeat personal jurisdiction." Dole Food Co., 303 F.3d at 1114 (quoting Burger King Corp. v. Rudzewicz, 471 U.S. 462, 477, 105 S.Ct. 2174, 85 L.Ed.2d 528 (1985)). To
Dole Food, 303 F.3d at 1114. Here, the Court has found that the Pittsburgh Pirates, the Detroit Tigers and the New York Yankees have purposefully established minimum contacts with the forum and therefore, these Clubs must make a compelling case that jurisdiction in California would be unreasonable. They have not met that burden here.
First, the analysis of purposeful interjection into the forum state's affairs "parallels the question of minimum contacts" in determining the reasonableness of an exercise of specific jurisdiction. Amoco Egypt Oil Co. v. Leonis Nav. Co., Inc., 1 F.3d 848, 852 (9th Cir.1993). Where courts find purposeful direction, the purposeful interjection factor usually weighs in favor of a finding of reasonableness. Enriquez, 2012 WL 3800801, at *6. The Court finds that this factor weighs in favor of Plaintiffs for the same reasons it found purposeful direction and purposeful availment as to the Pittsburgh Pirates, the Detroit Tigers and the New York Yankees.
Second, the burden on these defendants of litigating in California is not "so gravely difficult and inconvenient" that it violates due process. See Burger King, 471 U.S. at 485, 105 S.Ct. 2174. As will be discussed further in connection with Defendants' transfer motion, the burden on Defendants (including the Personal Jurisdiction Defendants) of litigating in California does not rise to this level, especially when compared with the burden that would be imposed on Plaintiffs if the Court were to dismiss Plaintiffs' claims against these same defendants, requiring Plaintiffs to refile their claims in another jurisdiction. See Sinatra v. Nat'l Enquirer, Inc., 854 F.2d 1191, 1199 (9th Cir.1988) (court considers both the burden on the defendant of litigating in the forum and the burden on the plaintiff that would result from transferring or dismissing the action). The Court notes that the assertions by the Personal Jurisdiction Defendants that they will be burdened by litigating in California is undermined by the evidence showing that all of them send their employees to California on a regular basis for the purposes of recruiting and scouting of California residents, as discussed above. Therefore, this factor also favors a finding of reasonableness.
The third factor, the extent of conflict with the sovereignty of the defendant's state, is neutral because there appear to be no conflicts with any "defendant's state."
The fourth factor, the forum state's interest in adjudicating the dispute, weighs slightly in favor of Plaintiffs. Where plaintiffs reside in California and the injury occurs here, California has a strong interest in adjudicating the dispute. Enriquez, 2012 WL 3800801, at *7. Although it is impossible to determine at this stage of the litigation the exact magnitude of the alleged injury that occurred in California as compared to any other state, the evidence provided by the Personal Jurisdiction Defendants regarding the number of players they employ who reside in California during the offseason and who have
Fifth, the Court must assess reasonableness in light of the efficient judicial resolution of the case. Although the case is at a relatively early stage, it is now in a posture where the parties will soon be able to proceed to the merits. Although the Court has concluded that it may not exercise jurisdiction over all of the Personal Jurisdiction Defendants, it nonetheless finds that it is in the interest of judicial efficiency to allow Plaintiffs' claims against the Pittsburgh Pirates, the Detroit Tigers and the New York to move forward in this Court rather than requiring Plaintiffs to refile their claims against those Clubs in new forums, causing further delay. This factor favors Plaintiffs' position.
Sixth, the Court considers the importance of the forum to Plaintiffs' interest in convenient and effective relief. Given that named Plaintiffs asserting claims against the Pittsburgh Pirates, the Detroit Tigers and the New York Yankees all reside in California, this factor supports Plaintiffs' positions.
Seventh, the Court must consider whether an alternative forum is available if the Court were to dismiss these Personal Jurisdiction Defendants. As any of the Personal Jurisdiction Defendants could be sued in the states where they are based, this factor favors the Personal Jurisdiction Defendants.
Considered together, the Court finds that these factors support the conclusion that the exercise of specific jurisdiction over the Pittsburgh Pirates, the Detroit Tigers and the New York Yankees in California is reasonable.
For the reasons stated above, the Proskauer Motion to Dismiss is GRANTED in part and DENIED in part. The Baltimore Orioles Motion to Dismiss is GRANTED. The following Clubs are dismissed from this action without prejudice because the Court finds that there is no personal jurisdiction: the Atlanta Braves, the Chicago White Sox, the Tampa Bay Rays, the Washington Nationals, the Philadelphia Phillies, the Boston Red Sox, the Baltimore Orioles and the Cleveland Indians. The Court finds that there is personal jurisdiction as to the Pittsburgh Pirates, the Detroit Tigers and the New York Yankees and therefore, that Plaintiffs' claims may proceed in this Court as to those defendants.
In the Proskauer Transfer Motion, the Office of the Commissioner of Baseball (MLB) and all of the MLB Clubs named as
In support of their transfer motion, the Proskauer Transfer Defendants cite the concentration of Minor League teams in and around Florida, the number of employees whose duties and responsibilities include Minor League baseball operations located on the East Coast and in Florida, the fact that spring training occurs in Florida and Arizona, and evidence that most Minor Leaguers sign their contracts in Florida and Arizona. Id. at 3-7.
With respect to the location of the Minor League teams, the Proskauer Transfer Defendants contend, approximately 188 Minor League teams operate throughout the United States, of which 30 are based in Florida, including 23 in the Middle District of Florida. Id. at 3-4 (citing Woodfork Decl., ¶ 4, Ex. A). In contrast, they assert, only twelve Minor League teams are based in California, with only one in this District. Id. at 4. In addition, the Proskauer Transfer Defendants assert, nearly two-thirds of all Minor League teams are located east of the Mississippi River, and approximately 75 percent of all Minor League teams are located within a 1000 mile radius of the Middle District of Florida. Id. In contrast, "only 47 teams (or 25 percent) are located within a 1000 mile radius of this District," according to the Proskauer Transfer Defendants. Id. They also point to a map on the MiLB's website graphically illustrating the distribution of Minor League teams across the United States. Id. (citing www.milb.com/milb/info/geographical.jsp). Although the map
The Proskauer Transfer Defendants also argue that of the more than 1800 employees "identified by the various Defendants whose duties and responsibilities include Minor League baseball operations, approximately two thirds of them have a principal work location in states located in the eastern half of the country (i.e., east of the Mississippi River),"
The Proskauer Transfer Defendants contend the concentration of employees in Florida is even higher if "only employees with job titles indicating that they supervise Plaintiffs (i.e., managers, field managers, coaches, trainers, and coordinators)" are considered. Id. at 6. In particular, "more than 50 percent of Minor League managers, field managers, coaches, trainers and coordinators reside in Florida, and nearly three times as many of these employees live or work in Florida than live or work in California." Id. at 6 (citing Defendants' Interrogatory Objection and Answer Identifying Employees Involved in Minor League Operations). With respect to Defendant MLB, the Proskauer Transfer Defendants assert that "all of the employees identified by Defendant MLB as being involved in Minor League operations have a principal work location in New York, and 90 percent of those same employees reside in New York or in a neighboring state." Id. at 5 (citing Bloom Transfer Decl., Ex. K (Defendant MLB's Objection and Answer to Interrogatory No. 1).
The Proskauer Transfer Defendants also assert the Middle District of Florida will be more convenient because 15 of the 30 MLB Clubs have spring training sites in Florida, 12 of which are located in the Middle District of Florida. Id. at 6 (citing CAC ¶ 17, n.12; Woodfork Decl. at ¶ 2). They point to the fact that the remaining 15 Clubs have spring training sites in Arizona, while none has a spring training facility in California. Id. This is significant, they assert, because Minor League players spend between one to four months per year at the spring training facility. Id. (citing CAC ¶¶ 10 n. 6, 175-77).
Finally, the Proskauer Transfer Defendants cite players' declarations and interrogatory responses that they contend show that "[f]or the most part, Minor League players sign their employment contracts at the Club's spring training facility either in
The Proskauer Transfer Defendants argue that they have satisfied the requirements for transfer under 28 U.S.C. § 1404(a), namely, that the action "might have been brought" in the Middle District of Florida and that the convenience of the witnesses and interests of justice favor transfer. Id. at 10. In support of their contention that the action "might have been brought" in the Middle District of Florida, the Proskauer Transfer Defendants cite Florida's long-arm statute, which provides, in relevant part:
Fla. Stat. § 48.193.
According to the Proskauer Transfer Defendants, the requirements of the Florida long-arm statute are clearly satisfied as to the MLB Clubs that "(i) conduct spring training in Florida; and (ii) have Minor League affiliates based in Florida or that play games in Florida." Proskauer Transfer Motion at 9 (citing Burris v. Bangert Computer Sys., Inc., Case No. 209 CV 201-FTM-29 DNF, 2009 WL 3256477, at *2-3 (M.D.Fla. Oct. 7, 2009); In re W. States Wholesale Natural Gas Antitrust Litig., 715 F.3d 716, 741 (9th Cir.2013)). As to the remaining MLB clubs, the Proskauer Transfer Defendants argue that "it is certainly reasonable for all MLB Clubs to be called into court in Florida — the State where MiLB is headquartered and maintains its principal place of business — for this case that involves the compensation of Minor League players." Id.
The Proskauer Transfer Defendants go on to address the factors that are considered
First, the convenience of the parties and witnesses and the ease of access to proof factors favor transfer, the Proskauer Transfer Defendants contend, because "important sources of proof will be the trial testimony of the witnesses — including but not limited to the opt-in plaintiffs, Minor League players who elect not to opt-in, their managers and coaches, as well as Club employees with knowledge of Minor League operations." Id. at 11. They further assert that "substantially more witnesses with knowledge and information pertaining to Plaintiffs' claims — e.g., Minor League players, coaches, managers and trainers — work or play in the Middle District of Florida, or within a much more reasonable travelling distance to the Middle District of Florida, than is the case with respect to this District." Id. The Proskauer Transfer Defendants cite the evidence summarized above regarding the location of their employees. They conclude, "[m]ost of the witnesses with knowledge relating to the players' employment and hours reside, play and/or work in Florida or within a much more reasonable traveling distance from Florida [and][a]s such, the lives of these witnesses, as well as Defendants' business operations, will be significantly disrupted if they are required to travel across the country to San Francisco to participate in the litigation of this case." Id. at 14.
Second, the Proskauer Transfer Defendants contend the availability of compulsory process factor favors transfer because more witnesses can be compelled to testify in person in Florida under Rule 45(c)(1) of the Federal Rules of Civil Procedure.
Third, the contacts with Plaintiffs' claims are greater in the Middle District of Florida than in the Northern District of California, according to the Proskauer Transfer Defendants. Id. at 15-16. In particular, they cite the evidence discussed above, including the fact that "only one
Fourth, consideration of the location where the relevant agreements were negotiated and executed also favors transfer, the Proskauer Transfer Defendants contend. Id. at 16. They cite the evidence discussed above, showing that most players sign the UPC at the location where spring training is conducted, with eleven teams saying the primary place of signing the UPC is Florida and five saying they have a policy of not having players sign the UPC in California. Id.
Fifth, the Proskauer Transfer Defendants argue that litigation in the Northern District of California will likely be more expensive than litigation in the Middle District of Florida because "approximately two-thirds of the likely witnesses identified by Defendants in jurisdictional and venue discovery work in states in the eastern half of the United States, including the majority of managers, field managers, coaches, trainers and coordinators residing in the State of Florida, (2) more than 75 percent of the putative collective/class members are regularly located within 1000 miles of the Middle District of Florida and (3) at least half of the players will, at some point, actually be in the Middle District of Florida for spring training and during the season, it logically follows that it would be significantly less expensive to litigate this case in a venue located closer to the evidence and these witnesses." Id. at 16-17.
Sixth, the Proskauer Transfer Defendants argue that the statistics regarding the relative congestion of this District as compared to the Middle District of Florida favor transfer because these statistics show that the median time to trial in this District is longer than it is in the Middle District of Florida. Id. at 17 (citing statistics retrieved on Sept. 30, 2013 from http://www.uscourts.gov/Statistics/FederalCourtManagementStatistics.aspx).
Seventh, while acknowledging that courts may also consider whether the transferee court is more familiar with the law governing the case, the Proskauer Transfer Defendants argue that this factor does not point away from transfer; in particular, although Plaintiffs have asserted numerous claims under California law, they have also brought ancillary state law claims under the laws of Florida, Arizona, North Carolina, California, New York, Maryland, Pennsylvania and Oregon. Id. at 18. Furthermore, they assert, "[t]his Court's greater familiarity with California law is balanced out by the Florida court's greater familiarity with Florida law." Id. (citing Roberts v. C.R. England, Inc., 827 F.Supp.2d 1078, 1087 (N.D.Cal.2011)). In any event, a Florida court is fully capable of adjudicating California claims, just as it can adjudicate Plaintiffs' claims under the laws of other states, the Proskauer Transfer Defendants argue. Id. (citing Skyriver Tech. Solutions, LLC v. OCLC Online Computer Library Ctr., Inc., Case No. 10-cv-03305 JSW, 2010 WL 4366127, at *5 (N.D.Cal. Oct. 28, 2010); Holliday v. Lifestyle Lift, Inc., Case No. 09-cv-4995 RS, 2010 WL 3910143, at *8 (N.D.Cal. Oct. 5, 2010)).
Finally, the Proskauer Transfer Defendants note that some courts consider whether the case presents a "localized controversy." Id. at 19 (citing Animal Legal Def. Fund v. U.S. Dep't of Agric., Case No. 12-cv-4407-SC, 2013 WL 120185, at *5 (N.D.Cal. Jan. 8, 2013)). They argue that to the extent this case presents nationwide issues, this factor is neutral, but that there are also localized issues that favor transfer to the Middle District of Florida, "e.g., the facts that the alleged claims predominantly arose in Florida and that a substantial number of players sign their employment contracts there at spring training." Id. at 20.
Plaintiffs argue that the Transfer Motions should be denied because: 1) Defendants fail to meet their threshold burden of demonstrating that this action "could have been brought" in the Middle District of Florida; 2) even though this is a class action, Plaintiffs' choice of forum is entitled to deference and Defendants have not shown that convenience or interest-of-justice factors warrant disturbing that choice; and 3) Defendants seeks "merely to shift the inconvenience of litigation from the well-resourced corporate entities that comprise MLB to the named Plaintiffs, a group of underpaid former Minor Leaguers." Plaintiffs' Opposition to Defendants' Motion to Transfer Venue ("Transfer Opposition") at 1.
With respect to their assertion that the convenience of the parties and witnesses does not support transfer, Plaintiffs argue that the named Plaintiffs are likely to be the key witnesses in the case and point to allegations and evidence that seven of the thirty-four named Plaintiffs currently reside in California, with three living in this District and a fourth living nearby, in Solano County. Id. at 2 (citing CAC, ¶ 23 (alleging Craig Bennigson currently resides in Benicia, CA), ¶ 25 (alleging Kyle Woodruff currently resides in San Jose, CA), ¶ 32 (alleging Jake Kahaulelio resides in Windsor, CA), ¶ 37 (alleging Brandon Henderson resides in Madera CA), ¶ 45 (alleging Kris Watts resides Fremont, CA), ¶ 51 (alleging Joel Weeks resides in Torrance, CA), ¶ 128 (alleging venue is proper in the Northern District of California); Pahuta Decl. at ¶ 2 (stating that he recently moved to California and currently resides here)). According to Plaintiffs, this is the heaviest concentration of named Plaintiffs in any state. Id. Further, they assert, using the Defendants' dividing line (the Mississippi River), "far more Plaintiffs live west of the Mississippi River than east of it: 22 out of the 34 (65 percent)." Id. (citing CAC, ¶¶ 19-52). And, they contend, over 40% of the named Plaintiffs "live in or around California" — seven in California, as noted above, four in Colorado, and one each in Utah, Idaho, and Arizona. Id. (citing CAC, ¶¶ 29, 33, 35, 36, 40, 47, 49). In contrast, they assert, "only a single named Plaintiff resides in Florida... [and][n]o Plaintiffs live in a state bordering Florida." Id. (citing CAC, ¶ 26).
Plaintiffs also point to the locations of the defendants and witnesses in support of their opposition to Defendants' transfer request. Id. at 3-4. First, as noted above, five out of the thirty franchise defendants are located in California, with two located in this District. Id. at 4 (citing Broshuis Decl., Ex. D (Team-by-Team Information,
Plaintiffs also argue that the location of Defendants' employees does not support transfer to the Middle District of Florida. Id. at 4. According to Plaintiffs, Defendants have over 250 employees principally working in California whose "responsibilities related to Minor Leaguers," 200 of whom also reside in California. Id. (citing Bloom Transfer Decl., Exs. A-DD (Objection and Answer to Interrogatory No. 2); Bruce Decl., Ex. 1 (Objection and Answer to Interrogatory No. 2)). They contend that "[e]ven if scouts are removed from the calculation, Defendants still have over 250 employees involved in their Minor League operations who either reside or principally work in California." Id. Plaintiffs also assert that 27 of the 30 MLB franchises employ officials with Minor League responsibilities who either live or principally work in California" and "have many more employees — often high-level officials such as Vice Presidents, General Managers, and Assistant General Managers — frequently traveling to California on behalf of Defendants." Id. at 4-5 (citing Bloom Transfer Decl., Exs. A-J (Objection and Answer to Interrogatory No. 2); Bruce Decl., Ex. 1 (Orioles Objection and Answer to Interrogatory No. 2)). They also point to evidence that "[e]ven eastern franchises have many employees either residing or principally working in California." Id. at 5.
Plaintiffs argue that the figures presented by Defendants in their briefs regarding the location of their employees are "inaccurate and misleading." Id. at 5. They challenge the Defendants' claim that "one-fifth of employees with Minor League operations principally work in Florida," arguing instead that "even if the Baltimore Orioles are included (they apparently were not included in Defendants' original calculations), the number is actually below 15 percent (and not substantially higher than California, which is around 12 percent)." Id. at 5 (citing Defendants' Objection and Answer to Interrogatory No. 2). Plaintiffs also reject as "grossly inaccurate" Defendants' "claim that `more than 50 percent of Minor League managers, field managers, coaches, trainers and coordinators reside in Florida.'" Id. Rather, Plaintiffs assert, "the number is actually less than 20 percent (at 269 out of 1358 — again not substantially higher than California)." Id. Further, they contend, "[t]he franchises' employees overseeing the Minor Leagues and chiefly responsible for making decisions and implementing policies — employees such as general managers, along with those assistant general managers and vice presidents with the primary Minor League responsibilities — are concentrated more in California," with over 20 percent of the 98 such employees either residing or principally working in California and less than 10 percent either residing or principally working in Florida. Id.
Plaintiffs also argue that Defendants' briefs are misleading as to MLB because they did not "identify a single employee with Minor League responsibilities either residing or principally working in Florida." Id. Plaintiffs present evidence that MLB's
Plaintiffs also argue that "a substantial amount of the relevant work was performed in or around this District." Id. at 6. In particular, they contend, Defendants require Minor Leaguers to perform substantial unpaid work during the offseason and are aware that much of this work takes place in California because more Minor Leaguers reside in and are drafted from California than from any other state. Id. (citing CAC, ¶¶ 174-80; Khoury Decl. at ¶ 7; Bennigson Decl. at ¶ 7; Pahuta Decl. at ¶ 7; Lawson Decl. at ¶¶ 7-8; Watts Decl. at ¶¶ 6-11; Kahaulelio Decl. at ¶ 5; Smith Decl. at ¶ 4; Opitz Decl. at ¶ 5; Woodruff Decl. at ¶ 5; Henderson Decl. at ¶ 5; Giarraputo Decl. at ¶¶ 5-6; McAtee Decl. at ¶ 7). Based on evidence obtained in discovery, Plaintiffs estimate that an average of 24.7 Minor Leaguers per franchise maintain California addresses each winter, suggesting that "around 750 Minor Leaguers work and reside in this state every single winter training period." Id. at 7 (citing Bloom Transfer Decl., Exs. C-F (Objection and Answer to Interrogatory No. 6); Bruce Decl., Ex. 1 (Orioles Objection and Answer to Interrogatory No. 6). Plaintiffs concede, however, that "[o]nly five franchises, the Yankees, Orioles, White Sox, Indians, and Tigers, provided the information on a per year basis." Id.. "Two other franchises provided the total number of players since 2008 who resided in CA during the winter period but did not do so on a per year basis. The other franchises refused to provide any information." Id.
In addition to training that occurs in California during the offseason, Plaintiffs cite to evidence that many Minor Leaguers play for teams that are based in California. Id. According to Plaintiffs, there are 12 Minor League teams located in California and of the 34 named Plaintiffs, at least 15 worked at Minor League teams based in California. Id. (citing CAC, ¶ 227 (Odle), ¶ 242 (Bennigson), ¶ 250 (Lawson), ¶ 270 (Kiel), ¶ 278 (Nicholson), ¶ 300 (Meade), ¶ 307 (Murray), ¶ 315 (Kahaulelio), ¶ 323 (Khoury), ¶ 333 (Pease), ¶ 350 (Gaston), ¶ 382 (Newby), ¶ 433 (Hilligoss), ¶ 476 (Weeks); Woodruff Decl. at ¶ 6). Plaintiffs also point to the fact that while 15 teams hold spring training in Florida, the other 15 hold spring training in the western half of the United States, in Arizona. Id. Finally, Plaintiffs cite to the extensive recruitment of Minor Leaguers in California, pointing specifically to the fact that the MLB Scouting Bureau is based in California and evidence that all of the teams have a "heavy scouting presence" in California. Id. Plaintiffs also reject Defendants' reliance on evidence that many teams have a stated policy of having players sign the UPC in Florida during spring training, citing evidence that in the past, players frequently were asked to sign the UPC in California. Id. at 8 (citing Wyckoff Decl. at ¶ 9; Watts Decl. at ¶ 4; Bennigson Decl. at ¶ 4; Lawson Decl. at ¶ 5; Kahaulelio Decl. at ¶ 4; Opitz Decl. at ¶ 4; Woodruff Decl. at ¶ 4; Henderson Decl. at ¶ 4; Giarraputo Decl. at ¶ 4; McAtee Decl. ¶ 6). Plaintiffs also offer evidence that the teams regularly ask players to sign during the offseason addenda to their contracts establishing their salaries for the upcoming season. Id. (citing Broshuis Decl.,
Based on the foregoing evidence, Plaintiffs contend Defendants fail to meet either the threshold requirement for transfer under § 1404(a) — that the action could have been brought in the transferee district — or to establish that transfer is in the interest of the convenience or fairness. Id. at 9. With respect to the first requirement, Plaintiffs argue that Defendants bear the burden of showing that the action could have been brought in the Middle District of Florida and that the fact that Defendants could have consented to jurisdiction and venue in that District is irrelevant. Id. (citing Commercial Lighting Prods., Inc. v. U.S. Dist. Court, 537 F.2d 1078, 1079 (9th Cir.1976); Hoffman v. Blaski, 363 U.S. 335, 343, 80 S.Ct. 1084, 4 L.Ed.2d 1254 (1960)). If a defendant fails to meet this burden, Plaintiffs contend, the transfer motion must be denied. Id. (citing Goor v. Vignoles, Case 12-cv-01794 DMR, 2012 WL 5499841, at *4 (N.D.Cal. Nov. 13, 2012)). Plaintiffs do not challenge Defendants' assertion that there is personal jurisdiction in Florida as to the MLB Clubs that have affiliates and/or spring training in Florida. As to at least twelve MLB Clubs with no franchises in Florida, however, Plaintiffs assert that Defendants have failed to show that there is any basis for exercising personal jurisdiction over these Defendants. Id. at 10-11.
Plaintiffs assert that the only basis for exercising personal jurisdiction over these teams offered by Defendants is that Minor League Baseball is headquartered in Florida. Id. at 10. This argument is a "red herring," they contend, because Minor League Baseball is not a party to this action and is a "separate entity." Id. (citing Broshuis Decl., Ex. G, General History, MiLB.com). Further, Plaintiffs assert, Defendants are not members of Minor League Baseball and Plaintiffs (and similarly situated players) are not employed by Minor League Baseball. Id. In fact, under the MLB Rules, the responsibility of Minor League Baseball is limited to stadium maintenance and ticket sales. Id. (citing CAC, ¶¶ 161-66). Thus, there is no basis for imputing the contacts of Minor League Baseball to the twelve teams that have no affiliates in Florida and also do not conduct their spring training there, Plaintiffs argue. Id. For this reason alone, they contend, the Transfer Motions should be denied. Id. at 11.
Even assuming Defendants were able to demonstrate that the action could have been brought in the Middle District of Florida, Plaintiffs argue that the factors courts consider in assessing whether transfer is warranted do not support Defendants' position. Id. at 11.
First, Plaintiffs argue that their choice of forum is entitled to some deference because it is not the result of forum shopping and a number of the named Plaintiffs (and some Defendants) have ties to this District. Id. at 12-13 (citing Hendricks v. StarKist Co., 13-cv-729 YGR, 2014 WL 1245880, at *2-3 (N.D.Cal. Mar. 25, 2014); Roling v. E*Trade Sec., LLC, 756 F.Supp.2d 1179, 1185-86 (N.D.Cal.2010) (citing Lou v. Belzberg, 834 F.2d 730, 739 (9th Cir.1987)); Van Slyke v. Capital One Bank, 503 F.Supp.2d 1353, 1363 (N.D.Cal. 2007)). Plaintiffs further assert that Courts afford more deference to a plaintiff's forum choice in an FLSA collective action than in a standard class action. Id. at 12 (citing Johnson v. VCG Holding Corp., 767 F.Supp.2d 208, 216 (D.Me. 2011)). According to Plaintiffs, this is because "by arming the FLSA with the opt-in mechanism instead of the Rule 23 mechanism, `Congress intended to give plaintiffs considerable control over the bringing of a FLSA action.'" Id. (citing Koslofsky v. Santaturs, Inc., 10 CIV. 9160 BSJ, 2011
Second, Plaintiffs argue that the Northern District of California is more convenient to the parties and witnesses than the Middle District of Florida and at best, a transfer will only shift the burden from some parties and witnesses to others. Id. at 14 (citing Decker Coal Co., 805 F.2d at 843; Hendricks, 2014 WL1245880, at *4; Cal. Writer's Club v. Sonders, 11-cv-02566 JCS, 2011 WL 4595020, at *13 (N.D.Cal. Oct. 3, 2011); Kabushiki Kaisha Stone Corp. v. Affliction, Inc., 09-cv-2742 RS, 2009 WL 3429560, at *3 (N.D.Cal. Oct. 22, 2009)). Plaintiffs argue that the primary witnesses in the case will be the named Plaintiffs, and for the reasons discussed above, this District will be more convenient to them than the Middle District of Florida. Id. Further, they assert, this District will be more convenient for Defendants because more MLB Clubs are located in California than in any other state and half of the Clubs train in Arizona rather than Florida. Id. As to the other party witnesses, Plaintiffs contend, it is only the trial that matters "because depositions will be taken at a location convenient for the deponent rather than the District where the action is pending." Id. (citing Fed. R. Civ. Proc. 45(c)(1)(A); Roling, 756 F.Supp.2d at 1186); Van Slyke, 503 F.Supp.2d at 1363). Because the Court has agreed to hold the trial during the offseason, Plaintiffs argue, the locations of the Minor League teams are irrelevant. Id. at 15-16. Further, they assert, more players are found in California during the offseason than in any other state, making this District a more convenient forum for these witnesses. Id.
Plaintiffs also argue the request for transfer should be denied because Defendants have not identified any specific witnesses — party or non-party — who will be inconvenienced by litigating in California. Id. at 17 (citing Cal. Writer's Club, 2011 WL 4595020, at *14). This is significant, Plaintiffs assert, because "[t]he convenience of non-party witnesses is paramount." Id. (citing Hendricks, 2014 WL 1245880, at *3). In contrast, Plaintiffs argue, they have offered specific facts showing that Plaintiffs will be inconvenienced by a transfer, pointing to the fact that "7 named Plaintiffs reside in California, an additional 7 reside in nearby states, and 65 percent reside west of the Mississippi." Id. at 18.
Next, Plaintiffs argue that transfer should be denied because they bring far more claims under California law than under any other state's law. Id. at 19-20. While district courts are equally capable of adjudicating federal claims, this District is likely to be more familiar with issues of California state law than the Middle District of Florida, Plaintiffs assert. Id. (citing Hendricks, 2014 WL1245880, at *5; In re Ferrero Litig., 768 F.Supp.2d at 1081; Van Slyke, 503 F.Supp.2d at 1366).
The factor that considers feasibility of consolidation also does not support transfer, Plaintiffs contend, because this case has already been consolidated with a related case and no other cases have been filed in the Middle District of Florida or in any other district. Id. at 20.
Plaintiffs also argue that California has a greater interest in the controversy than the Middle District of Florida because more of the putative class likely resides in California than any other state and many of Plaintiffs' claims are asserted under California law. Id. at 20 (citing Van Slyke, 503 F.Supp.2d at 1365).
Plaintiffs reject Defendants' assertion that access to evidence and availability of compulsory process favors transfer. Id. at 20-21. According to Plaintiffs, "[u]nder revised Rule 45(c)(1), a Court can compel to trial a witness residing, working, or
Plaintiffs also challenge Defendants' assertion that there is less congestion in the Middle District of Florida, arguing that "courts examine not only time to trial but also other factors, such as filings per judgeship." Id. at 21 (citing In re Ferrero Litig., 768 F.Supp.2d at 1082). When the various metrics for the two districts are compared, Plaintiffs assert, it is apparent that the statistics as a whole disfavor transfer. Id. at 22 (citing Broshuis Decl., Ex. H (Fed. Court Mgmt. Statistics Archive, USCourts.gov).
Plaintiffs argue that the relative cost of litigation in the two districts also disfavors transfer because more Plaintiffs and Defendants are located in this District than in the Middle District of Florida. Id. at 22-23. Plaintiffs further contend transfer should be denied because many events occurred in this District, the parties have substantial contacts with this District, and many of the players' contracts were signed here. Id. at 23.
In their Reply brief, the Proskauer Transfer Defendants reject Plaintiffs' assertion that this action could not have been brought in the Middle District of Florida, again highlighting the relationship between the MLB Clubs and Minor League Baseball to establish that there is personal jurisdiction in Florida against all of the Defendants. Reply in Support of Motion to Transfer Action to the Middle District of Florida ("Proskaur Transfer Reply") at 1-5. According to the Proskauer Transfer Defendants, "the fact that MiLB — an entity to which all Minor League teams affiliated with and/or owned by MLB Clubs belong — is located in Florida makes it patently reasonable for MLB Clubs to be sued in a Florida court for claims arising out of their Minor League operations" because those Defendants "`[u]ndoubtedly... expected to gain some benefit from [their] venture' with MiLB" and "should `reasonably expect[] to be haled into the State of Florida' in connection with that venture." Id. at 2 (quoting Kim v. Keenan, 71 F.Supp.2d 1228, 1236 (M.D.Fla. 1999)).
The Proskauer Transfer Defendants reject Plaintiffs' reliance on the fact that Minor League Baseball is not a party to this action, arguing that its non-party status is irrelevant to personal jurisdiction. Id. They point in particular to the agreement between Minor League Baseball and Major League Baseball (on behalf of its members), the Professional Baseball Agreement ("PBA"), which is incorporated into the UPC and is cited in the exhibits to Plaintiffs' complaint. Id. (citing CAC, Exs. A & B; Supplemental Declaration Of Elise M. Bloom In Support Of Motion To Transfer Action To The Middle District Of Florida ("Supp. Bloom Transfer Decl."), Ex. EE (relevant portions of the PBA) and Ex. FF (Plaintiffs' Request to Franchise Defendants for Production of Documents Nos. 3 and 8)). The Proskauer Transfer Defendants reason as follows:
Id. (citing Louis Vuitton Malletier, S.A. v. Mosseri, 736 F.3d 1339, 1358 (11th Cir. 2013); Diamond Crystal Brands, Inc. v. Food Movers Int'l, Inc., 593 F.3d 1249, 1267 (11th Cir.2010); Fireman's Fund Ins. Co. v. Nat'l Bank of Coops., 103 F.3d 888, 894 (9th Cir.1996)).
The Proskauer Transfer Defendants also cite to the Florida long-arm statute, Fla. Stat. § 48.193(1)(a), in support of personal jurisdiction arguing that under it, there is personal jurisdiction wherever "two non-resident defendants `anticipated some type of benefit' from their venture with Florida residents (including non-party residents)." Id. (quoting Kim, 71 F.Supp.2d at 1234). Moreover, they contend, Plaintiffs' assertion that there is no specific jurisdiction over the Clubs that do not have affiliates or hold spring training in Florida is undercut by their contrary arguments in support of personal jurisdiction in California over the Proskauer PJ Defendants. Id. at 5.
The Proskauer Transfer Defendants also argue, for the first time, that the Court need not be able to find personal jurisdiction over each of the MLB Club Defendants in the Middle District of Florida in order to find that the action could have been brought in that district for the purposes of 28 U.S.C. § 1404(a). Id. at 5. Rather, they contend, "where claims are brought against multiple defendants `scattered all over the United States,' an exception is warranted." Id. (quoting Wild v. Subscription Plus, Inc., 292 F.3d 526, 531 (7th Cir.2002), cert. denied, 537 U.S. 1045, 123 S.Ct. 619, 154 L.Ed.2d 517 (2002)). According to the Proskauer Transfer Defendants, in Wild, "Judge Posner affirmed transfer of a complex multidefendant suit, concluding that `there is no absolute bar on the transfer of a multidefendant suit to a district in which one of the defendants cannot be served.'" Id. They note that other courts, including one in the Eastern District of California, have followed Wild. Id. (citing Leskinen v. Halsey, Case No. 10-cv-03363 MCE KJN PS, 2011 WL 4056121, at *8, n. 12 (E.D.Cal. Sept. 12, 201)). Because it is undisputed that this case could have been brought in the Middle District of Florida against at least eighteen of the MLB Clubs named as defendants, and because the Middle District of Florida is a more convenient forum, the Proskauer Transfer Defendants assert, the Court should transfer the action to the Middle District of Florida. Id. at 6.
The Proskauer Defendants also challenge Plaintiffs' assertions that transfer will not further the interests of convenience and justice. Id. at 7-15.
Pursuant to 28 U.S.C. § 1404(a), a case may be transferred to any district where the action could have been brought "[f]or the convenience of parties and witnesses, in the interest of justice[.]" The district court has discretion to transfer cases based on the individualized facts of each case and considerations of convenience and fairness. Jones v. GNC Franchising, Inc., 211 F.3d 495, 498 (9th Cir.2000). In determining whether to transfer an action under § 1404(a), courts may consider the following non-exclusive factors:
Id. at 498-99. The party that seeks a transfer of venue under § 1404(a) bears the burden of showing that the transfer is appropriate. Fabus Corp. v. Asiana Exp. Corp., Case No. C-003172, 2001 WL 253185, at *1 (N.D.Cal. Mar. 5, 2001) (citing Sec. Investor Protection Corp. v. Vigman, 764 F.2d 1309, 1316-17 (9th Cir. 1985), rev'd in part on other grounds by Holmes v. Sec. Investor Protection Corp., 503 U.S. 258, 112 S.Ct. 1311, 117 L.Ed.2d 532 (1992)).
Plaintiffs contend Defendants have not met their burden of showing that this action could have been brought in the Middle District of Florida and therefore, their request to transfer the action under § 1404(a) fails on that basis alone. The Court declines to decide this question because, as discussed below, it finds that transfer of this action to the Middle District of Florida is not in the interest of justice.
As a preliminary matter, the Court finds that Plaintiffs' choice of forum in this case is entitled to at least some deference, even though this class action involves named plaintiffs from numerous states throughout the country.
Typically, a party seeking transfer must make "a strong showing ... to warrant upsetting the plaintiff's choice of forum." Decker Coal Co. v. Commonwealth Edison Co., 805 F.2d 834, 843 (9th Cir.1986). In the context of a class or collective action, however, the named plaintiff's choice of forum is given less weight. Lou v. Belzberg, 834 F.2d 730, 739 (9th Cir.1987). "The rationale for a diminished degree of deference is that `where there are hundreds of potential plaintiffs ... all of whom could with equal show of right go into their many home courts, the claim of any one plaintiff that a forum is appropriate merely because it is his home forum is considerably weakened.'" Hendricks v. StarKist Co., Case No. 13-cv-0729 YGR, 2014 WL 1245880, at *2 (N.D.Cal. Mar.
Id., at *3. Here, there is no evidence that Plaintiffs have engaged in forum shopping. Further, a significant portion of the named plaintiffs reside in California
Turning to the factors that courts consider to determine whether transfer is appropriate under § 1404(a), the Court finds that they weigh in favor of Plaintiffs.
The parties go to great lengths to persuade the Court that more parties and witnesses are located in or near their preferred forum. Plaintiffs focus on the concentration of named Plaintiffs in or near California (20%, they contend, as opposed to 3% of plaintiffs who live in or near the State of Florida), while Defendants assert that more employees of Defendants who have job responsibilities relating to Minor League Baseball — and thus, who may be likely to offer testimony relevant to Plaintiffs' claims — reside or work in Florida than in California (more than 20%, according to Defendants, though Plaintiffs contend this number is inaccurate and is below 15%, as compared to 12% of employees involved with Minor League Baseball who are based in California). Plaintiffs also highlight the fact that five of the thirty Defendant franchises are located in California, while only two are located in Florida. On the other hand, Defendants point out that half of the franchises conduct spring training in Florida, lasting at least one month a year for those teams, whereas no Club conducts spring training in this District.
Having considered the many different measures of convenience offered by the parties, the Court concludes that, on the whole, neither of the two fora is significantly more convenient to the parties and witnesses than the other; nor will the costs of litigation likely be significantly higher in either forum. Given that many players and other relevant witnesses will likely be deposed at a location that is most
Defendants argue that the "access to evidence" factor favors transfer because there are more parties and witnesses who can be compelled under Rule 45(c)(1) of the Federal Rules of Civil Procedure to testify in Florida than there are in California. The Court does not find this argument persuasive. First, because Plaintiffs assert violations of wage and hour laws, much of the evidence on which the parties will rely is likely to be documentary evidence such as contracts, policy documents and paystubs. Second, a substantial number of parties and witnesses reside in California — possibly more than are based in Florida — and therefore will be subject to compulsory process under Rule 45(c)(1). Therefore, this factor does not favor transfer.
Plaintiffs assert claims under both Florida law and California law, and named Plaintiffs include residents of both states. Therefore, both California and Florida have an interest in this litigation. See Davis v. Social Service Coordinators, Inc., Case No. 10-cv-2372 LJO, 2013 WL 4483067, at *10 (E.D.Cal. Aug. 19, 2013). Plaintiffs contend the interest of California is greater than Florida because there are more named Plaintiffs who reside here than in Florida, but it is not clear how many opt-in plaintiffs from these states have joined — or are likely to join — in the FLSA collective action. Thus, it is difficult to determine whether the interest of California or Florida is greater. The Court concludes that this factor is neutral.
Plaintiffs assert claims under the laws of many states, including Florida and California, but the number of claims asserted under California law vastly exceeds those of the other states (including Florida). Further, while all federal courts are equally competent in applying federal law, the courts of this District have adjudicated numerous wage and hour claims under California law and are, thus, more familiar with the law governing such claims. Therefore, this factor slightly favors Plaintiffs' position that the action should remain in this District. See Van Slyke v. Capital One Bank, 503 F.Supp.2d 1353, 1366 (N.D.Cal.2007).
"The relative congestion of each proposed forum is relevant — though not as weighty as the other factors — to the Court's decision on whether to transfer, because a congested court would probably be slower to adjudicate the matter than a less busy court." Animal Legal Def. Fund v. U.S. Dep't of Agric., Case No. 12-cv-4407 S.C. 2013 WL 120185, at *6 (N.D.Cal., Jan. 8, 2013). The statistics presented by the parties reflect that this District has a slightly shorter time to disposition in civil cases, while the Middle District of Florida has a somewhat shorter time to trial. See Broshius Decl., Ex. H (Fed. Court Mgmt. Statistics Archive, USCourts.gov). Thus, as a general matter, the speed with which matters are resolved
Based on consideration of the factors discussed above, and in light of the Court's conclusion that Plaintiffs' choice of forum is entitled to some deference, the Court finds that transfer to the Middle District of Florida is not in the interest of justice and the convenience of the parties. On that basis, the Court DENIES the Proskauer Transfer Motion as to those defendants that have not been dismissed for lack of personal jurisdiction. As stated above, in footnote 9, as to the Proskauer PJ Defendants that were dismissed for lack of personal jurisdiction, the Proskauer Transfer Motion is DENIED as moot. Similarly, the Baltimore Orioles Transfer Motion is DENIED as moot.
For reasons stated above, the Proskauer Motion to Dismiss is GRANTED in part and DENIED in part. The Baltimore Orioles Motion t o Dismiss is GRANTED. The Court dismisses the following Defendants without prejudice based on lack of personal jurisdiction in California: the Atlanta Braves, the Chicago White Sox, the Tampa Bay Rays, the Washington Nationals, the Philadelphia Phillies, the Boston Red Sox, the Baltimore Orioles and the Cleveland Indians. The Transfer Motions are DENIED.
Restatement (Second) of Conflict of Laws § 37.
