Kirkpatrick v. Alderwoods Group, Inc. et al

Western District of Texas, txwd-6:2011-cv-00238

ORDER RE: MOTION TO SEVER [Transferred from California Northern on 9/7/2011.]

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1 1 2 3 4 5 IN THE UNITED STATES DISTRICT COURT 6 FOR THE NORTHERN DISTRICT OF CALIFORNIA 7 8 WILLIAM HELM, et al. No. C 08-01184 SI 9 Plaintiffs, ORDER RE: MOTION TO SEVER 10 v. For the Northern District of California 11 ALDERWOODS GROUP INC., United States District Court 12 Defendant. / 13 14 On July 15, 2011, the Court heard argument on defendant's motion to sever and dismiss. Having 15 considered the arguments of counsel and the papers submitted, the Court hereby rules as follows. 16 17 BACKGROUND 18 The subject of this litigation is a wage and hour dispute brought by current and former 19 employees of Alderwoods Group, Inc. ("Alderwoods"), a provider of funerary services. As set forth 20 in detail in this Court's July 29, 2009 Order (Docket No. 174), this action originated with a complaint 21 filed in the United States District Court for the Western District of Pennsylvania, Prise, et al. v. 22 Alderwoods Group, Inc., et al., No. 06-1641. That complaint originally included both state law claims 23 and federal claims under the Fair Labor Standards Act ("FLSA") against Alderwoods and several other 24 related defendants. The district court in Prise declined to exercise supplemental jurisdiction over 25 plaintiffs' state law claims, leaving only the FLSA claims. The dismissal of the state law claims resulted 26 in the filing of a class action complaint in the Alameda County Superior Court on December 5, 2007 27 entitled Helm, et al. v. Alderwoods Group Inc., et al., alleging state law wage and hour claims against 28 1 1 Alderwoods.1 On February 27, 2008, defendants removed the action to federal court, invoking this 2 Court's diversity jurisdiction under the Class Action Fairness Act ("CAFA"). See 28 U.S.C. § 1332(d). 3 On December 29, 2009, the Court denied plaintiffs' first motion for class certification. Shortly 4 thereafter, defendant filed a motion to sever, arguing that the dozens of named plaintiffs in the case were 5 improperly joined. The Court denied the motion as premature, because plaintiffs intended to file a 6 renewed motion for class certification. On March 9, 2011, the Court denied plaintiffs' renewed motion 7 for class certification. On April 4, 2011, defendant filed a renewed motion to sever.2 8 9 LEGAL STANDARD 10 Federal Rule of Civil Procedure 20 provides that multiple plaintiffs may join in a single action For the Northern District of California 11 if (1) they assert a right to relief that arises "out of the same transaction, occurrence, or series of United States District Court 12 transactions or occurrences," and (2) they raise "any question of law or fact common to all plaintiffs." 13 Fed. R. Civ. P. 20(a)(1). "If the test for permissive joinder is not satisfied, a court, in its discretion, may 14 sever the misjoined parties, so long as no substantial right will be prejudiced by the severance." 15 Coughlin v. Rogers, 130 F.3d 1348, 1350 (9th Cir. 1997); see also Fed. R. Civ. P. 21 ("[T]he court may 16 at any time. . . sever any claim against a party."). Even if the permissive joinder requirements are met, 17 the court may sever to avoid delay, jury confusion, or prejudice to the moving party. Fed. R. Civ. P. 18 20(b); Coleman v. Quaker Oats Co., 232 F.3d 1271, 1296 (9th Cir. 2000). 19 20 21 22 1 Plaintiffs have dismissed their claims against all defendants originally named in this case other than Alderwoods Group, Inc. A related case, Bryant v. Service Corporation International, No. 23 08-1190, was brought in this Court against the entity that purchased Alderwoods in 2006. That case is now closed. 24 2 In a declaration attached to its renewed motion to sever, defendant lists 102 individuals 25 that it asserts are essentially named plaintiffs. Decl. in Supp. of Mot. to Sever (Doc. 298), Ex. 1. Defendant explains that this list is "compiled based upon the appendices to the plaintiffs' Second 26 Amended Complaint and excerpts of the Court's Docket." Id. ¶ 1. Plaintiffs argue that there are only 86 named plaintiffs, as 86 individuals are named as plaintiffs in the caption and appendices to the 27 plaintiffs' Second Amended Complaint. See 2d Am. Compl. (Doc. 177), Appxs. A & B. As defendant does not explain what "excerpts of the Court's Docket" provided defendant with the names of an 28 additional 16 "plaintiffs," the Court accepts plaintiffs' number. 2 1 1 DISCUSSION 2 The parties agree that severance is appropriate in this case, and the Court agrees. The question 3 presented by this motion is what it means to sever the claims of each plaintiff in this case, and what 4 should happen to those severed claims. Defendant argues that the Court should dismiss all claims 5 except for those of the first named plaintiff, William Helm. Defendant argues that there is no other 6 permissible course of action for the Court, because the severed plaintiffs' claims constitute new civil 7 actions, this Court and all other federal courts lack subject matter jurisdiction over them, and they were 8 not removed from state court and therefore cannot be remanded. Plaintiff argues that the Court retains 9 CAFA jurisdiction over not just plaintiff Helm's claims, but over all of the claims, and that the Court 10 should transfer the claims of those plaintiffs who do not reside in the Northern District of California to For the Northern District of California 11 the federal district courts where the plaintiffs reside.3 United States District Court 12 13 I. Severance 14 Rule 21 states that "Misjoinder of parties is not a ground for dismissing an action. On motion 15 or on its own, the court may at any time, on just terms, add or drop a party. The court may also sever 16 any claim against a party." Due to the number of named plaintiffs, the fact that the plaintiffs worked 17 in different job positions in different offices in different states, and the fact that plaintiffs raise only state 18 law claims, severance of the claims of each of the different plaintiffs is appropriate. The question for 19 the Court becomes what to do having severed the claims. 20 In Coughlin, the Ninth Circuit explained that after severing plaintiffs, "the court can generally 21 dismiss all but the first named plaintiff without prejudice to the institution of new, separate lawsuits by 22 the dropped plaintiffs 'against some or all of the present defendants based on the claim or claims 23 attempted to be set forth in the present complaint.'" Coughlin, 130 F.3d at 1350 (quoting Aaberg v. 24 ACandS Inc., 152 F.R.D. 498, 501 (D. Md. 1994)). There is no indication that dismissal is the only 25 26 3 Before the hearing on this motion, the Court issued an Order to the parties indicating the Court's preliminary view, that while severance is necessary, dismissal of the many plaintiffs' claims is 27 not required and would be unduly prejudicial at this late stage of litigation. See Doc. 314. The Court asked the parties to be prepared to discuss several questions regarding jurisdiction, transfer, and remand; 28 and to be prepared to inform the Court as to their preferred resolutions. Id. 3 1 1 proper course of action, however. It may be more accurate to describe what happened in Coughlin as 2 a district court dropping parties rather than severing claims. Coughlin itself labels the dismissed 3 plaintiffs "dropped plaintiffs," and relies on a case, Aaberg, where plaintiffs were dropped. 4 Rule 21 contemplates both flexibility in curing misjoinder, and consideration of what constitutes 5 "just terms" when doing so. See Fed. R. Civ. P. 21. In Anrig v. Ringsby United, 603 F.2d 1319, 1325 6 (9th Cir. 1979), the Ninth Circuit held that, in that particular case, the district court was required to 7 consider severing certain parties and then either transferring or dismissing the severed parties pursuant 8 to Rule 21. Here, it would not be "just" to drop the named plaintiffs at this late stage of litigation, no 9 matter the "terms" of the Court's order. Rather, the appropriate action for the Court is to sever the 10 claims of the different plaintiffs. Then, having severed the claims of the different plaintiffs, the Court For the Northern District of California 11 must determine whether to dismiss the severed claims, retain the severed claims, or transfer the severed United States District Court 12 claims to another district court. 13 Before the answering that question, however, the Court must determine whether it continues to 14 have subject matter jurisdiction over some or all of the claims. 15 16 II. Jurisdiction 17 The parties agree that the only basis for subject matter jurisdiction over the case prior to 18 severance is CAFA, and that the only possible basis for subject matter jurisdiction after severance is also 19 CAFA. In United Steel v. Shell Oil Co., 602 F.3d 1087, 1089 (9th Cir. 2010), the Ninth Circuit held that 20 where a district court has subject matter jurisdiction under CAFA, subsequent denial of class 21 certification does not divest district court jurisdiction. The question for the Court is whether the Court 22 retains CAFA jurisdiction over the severed claims. This is a matter of first impression. 23 Plaintiffs argue that if the Court retains CAFA jurisdiction over plaintiff Helm's claims, then it 24 retains CAFA jurisdiction over the claims of the 85 other named plaintiffs. The Court agrees. There 25 is a "usual and long-standing principle[]" that "post-filing developments do not defeat [subject matter] 26 jurisdiction if jurisdiction was properly invoked as of the time of filing." United Steel, 602 F.3d at 27 1091–92. The Ninth Circuit explained in United Steel that this principle applies where a CAFA class 28 is not certified. Here, the Court's CAFA jurisdiction was not merely over plaintiff Helm's claims, but, 4 1 1 independently, over all named plaintiffs' claims. After denying plaintiffs' renewed motion for class 2 certification, the Court retained CAFA jurisdiction over the claims of each of the named plaintiffs in this 3 action. The severance of those claims does not now defeat the Court's jurisdiction. 4 Defendant cites Honeywell Intern., Inc. v. Phillips Petroleum Co., 415 F.3d 429 (5th Cir. 2005), 5 to argue that the Court must treat the severed claims as though they are new lawsuits first filed at the 6 time of severance, and assess its subject matter jurisdiction over the claims in isolation both from each 7 other and from the case's history. However, Honeywell stands for the proposition that where subject 8 matter jurisdiction over some of the claims pled in the original suit was dependent on the presence of 9 other parties or claims in the suit, such as when a district court exercised supplemental jurisdiction over 10 state law claims or counterclaims, the district court might no longer have subject matter jurisdiction over For the Northern District of California 11 those dependent claims once they are severed. See United States v. O'Neil, 709 F.2d 361, 375 (5th Cir. United States District Court 12 1983) (looking for "an independent jurisdictional basis" over severed counterclaims); see also 28 U.S.C. 13 § 1367 (providing that "the district courts shall have supplemental jurisdiction over all other claims that 14 are so related to claims in the action within such original jurisdiction that they form part of the same 15 case or controversy" (emphasis added)). 16 Here, the Court had CAFA jurisdiction not only over plaintiff Helm's claim, but over the claims 17 of all of the individual named plaintiffs. Although the amount in controversy in this case was 18 determined as of the time of the filing of the suit and on the basis of the value of the suit if certified as 19 a class action, the fact that no class was certified and that the individual claims are worth less than $5 20 million did not subsequently defeat the Court's subject matter jurisdiction over any of the individual 21 plaintiffs' claims. This is the holding of United Steel. The Court's CAFA jurisdiction over the claims 22 of each plaintiff was independent of its jurisdiction over the claims of each other plaintiff, and there is 23 no need for the Court to look for a new basis for subject matter jurisdiction over the claims once 24 severed.4 25 26 4 Severance can also be used to cure jurisdictional defects. See, e.g., C.L. Ritter Lumber Co. v. Consolidation Coal Co., 283 F.3d 226 (4th Cir. 2002) (holding that district court did not abuse 27 its discretion in remedying lack of complete diversity by vacating existing judgment, dividing lawsuit into two cases, and entering judgment in favor of lessors in each of the cases). However, this is not a 28 reason to find that severance divests a district court of subject matter jurisdiction over the severed claim 5 1 1 III. Venue 2 Plaintiffs have requested that the Court transfer the claims of plaintiffs residing in locations other 3 than the Northern District of California to the federal district courts where those plaintiffs reside, 4 pursuant to 28 U.S.C. § 1404(a). See also Wyndham Associates v. Bintliff, 398 F.2d 614, 618 (2d Cir. 5 1968). Defendant argues that even if the Court retains jurisdiction over the claims, plaintiffs should be 6 required to file independent motions to transfer, and that plaintiffs in any event have not requested the 7 appropriate venue for any plaintiffs who worked for defendant in a different federal district from where 8 they now live. 9 Section 1404(a) provides that "for the convenience of parties and witnesses, in the interest of 10 justice, a district court may transfer any civil action to any other district or division where it might have For the Northern District of California 11 been brought." 28 U.S.C. § 1404(a). The purpose of 28 U.S.C. § 1404(a) is to "prevent the waste of United States District Court 12 time, energy, and money and to protect litigants, witnesses and the public against unnecessary 13 inconvenience and expense." Van Dusen v. Barrack, 376 U.S. 612, 616 (1964) (internal citations and 14 quotation omitted). A motion for transfer lies within the broad discretion of the district court, and must 15 be determined on an individualized basis. See Jones v. GNC Franchising, Inc., 211 F.3d 495, 498 (9th 16 Cir. 2000). Factors a court may consider include: 17 (1) the location where the relevant agreements were negotiated and executed, (2) the state that is most familiar with the governing law, (3) the plaintiff's choice of forum, (4) 18 the respective parties' contacts with the forum, (5) the contacts relating to the plaintiff's cause of action in the chosen forum, (6) the differences in the costs of litigation in the 19 two forums, (7) the availability of compulsory process to compel attendance of unwilling non-party witnesses, and (8) the ease of access to sources of proof. Additionally, the 20 presence of a forum selection clause is a "significant factor" in the court's § 1404(a) analysis. . . [as is] the relevant public policy of the forum state, if any. . . . 21 Id. at 498–99. 22 Although defendant opposes transfer, it does not argue that venue is proper in the Northern 23 District of California, or that venue is improper in the districts proposed by plaintiffs. It does not argue 24 it did not do business in the requested venues, that it is not subject to personal jurisdiction in those 25 venues, or that it would have any difficulty defending the actions in those venues. Nor does defendant 26 27 or claims where it had an independent basis for subject matter jurisdiction over those claims when they 28 were joined together in the original suit. 6 1 1 propose alternate venues that might be more appropriate. Rather, defendant argues that plaintiffs have 2 not carried their burden to demonstrate that venue is proper in the proposed transferee courts. 3 This case was filed nearly three and one half years ago, and the Court finds that it is in the 4 interest of justice to transfer venue rather than dismiss the claims of those plaintiffs who do not reside 5 in the Northern District of California. See Goldberg v. Wharf Constructors, 209 F. Supp. 499, 508 6 (N.D. Ala. 1962). Defendant is a corporation doing business throughout the United States, and 7 defendant employed plaintiffs throughout the United States. The venues proposed by plaintiffs are the 8 locations where they reside, and therefore they are more likely to be the locations where the plaintiffs 9 were employed, where any relevant agreements were negotiated, and where the causes of action in this 10 case ripened. The proposed district courts are more likely to be familiar with the applicable state For the Northern District of California 11 employment laws. As between the Northern District of California and the venues proposed by plaintiffs United States District Court 12 for the transfer of their severed claims, the venues proposed by plaintiffs are the more appropriate 13 forums. 14 15 CONCLUSION 16 For the foregoing reasons and for good cause shown, defendant's motion to sever and dismiss 17 is GRANTED IN PART and DENIED IN PART. (Doc. 297.) 18 The claims of each named plaintiff are ordered SEVERED. 19 The claims of William Helm remain pending in this case. Plaintiff Helm is ORDERED to file 20 an amended complaint by 5:00 p.m. on Friday, August 19, 2011. 21 The severed claims of the plaintiffs Robert Chernetsky and Robert Idemoto remain pending in 22 this Court. The clerk of the court SHALL assign to each plaintiff a new case number. The Court finds 23 that the claims of these plaintiffs are related to the claims of plaintiff Helm. Therefore, the new case 24 numbers shall end in "SI." Plaintiff Chernetsky and plaintiff Idemoto are ORDERED to file new 25 complaints in their severed cases by 5:00 p.m. on Friday, August 19, 2011. No further filing fee will 26 be required. 27 The severed claims of the following plaintiffs are ordered TRANSFERRED to the federal district 28 courts listed after the name of each plaintiff: 7 1 1 Robert A. Acevez Northern District of Indiana 2 Frederick R. Aldrich District of Massachusetts 3 Merlin Alexander Southern District of Ohio 4 Elias Alvidrez District of New Mexico 5 Steven A. Arnold Southern District of Indiana 6 James A. Baasch Eastern District of Washington 7 Robert Bowen District of South Carolina 8 Michele Breindel Southern District of Florida 9 Lawrence F. Camp Northern District of Georgia 10 Debbie K. Chatman (Brandt) Southern District of Texas For the Northern District of California 11 Corey W. Clary Northern District of Texas United States District Court 12 Johnny Coleman District of Kansas 13 Diane Craig Western District of North Carolina 14 James Crouch Northern District of Mississippi 15 Jeffrey A. Diggs District of Alaska 16 Kathryn Dildy Northern District of Mississippi 17 Marc A. Dumont Central District of California 18 James C. Durden Southern District of Georgia 19 Stephen Escobar Eastern District of California 20 John R. Ferguson Western District of Washington 21 Darin D. Foran District of Colorado 22 Strother Fulcher Western District of Virginia 23 Kenneth Giacone Northern District of Illinois 24 Elizabeth M. Grant District of Nevada 25 Linda T. Hagerty Southern District of Georgia 26 Rickie Hamilton Western District of North Carolina 27 Larry Hammock Eastern District of Tennessee 28 Douglas Hazen Southern District of Indiana 8 1 1 Bernard M. Hirrel Central District of California 2 Mary Holden Eastern District of Virginia 3 William Hudson, III Southern District of Florida 4 Roger Hugo Western District of New York 5 Johnny Johnson Northern District of Mississippi 6 Julius E. Johnson Northern District of Ohio 7 Robert Jones District of Alaska 8 John Keath District of Kansas 9 Wilton King Middle District of Georgia 10 Eddie Kirkpatrick Western District of Texas For the Northern District of California 11 Henry Klein Southern District of Florida United States District Court 12 Betty Knight Western District of Oklahoma 13 Ronald Langley Central District of California 14 Frank Lewis Southern District of Alabama 15 Charles Lowther Northern District of West Virginia 16 Sarah Malmi Northern District of Illinois 17 Steven L. Martz Northern District of Georgia 18 Eugenia C. Matthews Eastern District of Texas 19 Paul D. Meizler Western District of Missouri 20 Harold E. Metcalf District of Oregon 21 Michael Naperalsky Western District of Michigan 22 Sean J. Oberski Eastern District of Michigan 23 Richard E. Petersen Middle District of Georgia 24 Deborah Prise Western District of Pennsylvania 25 Heather Rady Western District of Pennsylvania 26 Melissa Ray Northern District of Texas 27 Jack L. Reddick District of Kansas 28 Stephanie Riggs District of Oregon 9 1 1 Dennis Robertson Eastern District of North Carolina 2 Jeffrey Sachs Northern District of Indiana 3 Richard E. Salhus District of Minnesota 4 John Schabloski Western District of Michigan 5 David Schnell Eastern District of California 6 Warren L. Seiz District of Arizona 7 Robert Shaw Northern District of New York 8 William H. Shuff Western District of Texas 9 Myra S. Sloan Eastern District of Tennessee 10 Monecia Smith Southern District of California For the Northern District of California 11 Jody P. Spiese Central District of California United States District Court 12 Mikal Stampke District of Oregon 13 Francis Steinhoff Central District of California 14 Joseph G. Tafoya, Jr. District of Colorado 15 Stephen Takesian District of Arizona 16 Jerry Tawney Western District of Virginia 17 Tori Taylor District of South Carolina 18 Sandy Thomas District of Nevada 19 Steven Tiller Eastern District of Tennessee 20 Philip R. Tillman District of South Carolina 21 Florinda D. Trejo Western District of Texas 22 Gayle Walker Southern District of Ohio 23 Stacey Weinstein Southern District of Florida 24 James Whaley Western District of North Carolina 25 George T. White Middle District of Florida 26 Chad Wickham District of Kansas 27 David Wyatt Western District of Virginia 28 10 1 1 The clerk SHALL transmit a copy of the docket in this case to the above district courts for 2 further proceedings, along with a copy of this order. No further filing fees are required. Each plaintiff 3 should be prepared to file a new complaint in his or her case, as ordered by the transferee court. 4 5 IT IS SO ORDERED. 6 7 Dated: July 18, 2011 SUSAN ILLSTON 8 United States District Judge 9 10 For the Northern District of California 11 United States District Court 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 11