Shay v. Sight & Sound Systems, Inc. ( 2009 )

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
_____________________________
)
MARGOT SHAY, et al., )
)
Plaintiffs, )
)
v. ) Civil Action No. 09-1215 (RWR)
)
SIGHT & SOUND SYSTEMS, INC., )
et al., )
Defendants. )
_____________________________ )
MEMORANDUM OPINION AND ORDER
The plaintiffs, five former employees of defendants Sight &
Sound Systems, Inc. (“SASSI”), Koorosh Kaymanesh and Hamid
Akrami, bring claims of federal Fair Labor Standards Act (“FLSA”)
violations, unlawful retaliation, breach of contract, and quantum
meruit largely for the defendants’ failure to compensate them for
overtime hours worked. The defendants have moved to dismiss for
lack of personal jurisdiction and improper venue, or in the
alternative, to transfer venue. Because the District of Columbia
is not an appropriate venue for the plaintiffs’ claims, but the
Eastern District of Virginia is an appropriate venue and a
transfer is in the interest of justice, the case will be
transferred.
BACKGROUND
Plaintiffs Margot Shay, Edsel Talbert, Richard Findley, Ron
Perez and Melissa Coleman are former employees of SASSI,
Kaymanesh and Akrami. (Compl. ¶¶ 2-4.) Kaymanesh and Akrami are
-2-
co-owners of SASSI, which installs electronics and sight and
sound systems for residential, corporate, and commercial clients
in the District of Columbia, Maryland, and Virginia. (Id.)
Kaymanesh, Akrami, and all of the plaintiffs are residents of
Virginia. (Id. ¶ 1; see also Defs.’ Stmt. of P. and A. in Supp.
of Mot. to Dismiss (“Defs.’ Stmt.”) at 2.) SASSI is a Virginia
corporation with its principal place of business in Dulles,
Virginia. (Compl. ¶ 2.) It makes all substantive decisions
related to wage payments and terminations, and computes and
processes wage payments, in its sole Virginia office. (Defs.’
Stmt. at 13.)
The plaintiffs allege that throughout the course of their
employment with the defendants, they worked in excess of forty
hours per week, and, in violation of the FLSA, the defendants
failed to pay them at a rate of one-and-one-half times their
regular rate for these overtime hours worked. (Compl. ¶¶ 8, 15,
22, 25, 28.) Shay alleges that on April 16, 2009, she met with
the defendants to discuss their refusal to compensate her for the
overtime hours worked, and she later filed a complaint with the
United States Department of Labor (“DOL”). (Id. ¶ 10-11.) Shay
contends that SASSI terminated her the following month in
retaliation for her complaints. (Id. ¶ 12.) Talbert alleges
that the defendants refuse to pay him a promised five percent of
a successful bid he procured on their behalf to install a fire
-3-
alarm system at the Manassas Park Town Center in Virginia. (Id.
¶¶ 17, 19.) Shay and Talbert also allege that they were never
compensated for their final two weeks of work. (Id. ¶ 44.)
The defendants move to dismiss this case under Federal Rule
of Civil Procedure 12(b)(2) for lack of personal jurisdiction and
under Rule 12(b)(3) for improper venue, or, in the alternative,
to transfer venue under 28 U.S.C. § 1404(a). (See Defs.’ Mot. at
1.)
DISCUSSION
I. ADDRESSING VENUE BEFORE JURISDICTION
A federal court may “choose among threshold grounds for
denying audience to a case on the merits.” Ruhrgas AG v.
Marathon Oil Co., 526 U.S. 574, 585 (1999). “[C]ertain non-
merits, nonjurisdictional issues may be addressed preliminarily,
because ‘[j]urisdiction is vital only if the court proposes to
issue a judgment on the merits.’” Pub. Citizen v. U.S. Dist.
Court for D.C., 486 F.3d 1342, 1348 (D.C. Cir. 2007) (quoting
Sinochem Int’l Co. Ltd. v. Malay. Int’l Shipping Corp., 127 S.
Ct. 1184, 1191-92 (2007) (internal quotation marks omitted)).
For example, a court may consider a question of forum non
conveniens before addressing whether subject matter or personal
jurisdiction exists because a forum non conveniens dismissal
denies audience to a case on the merits. Sinochem, 127 S. Ct. at
1192. This principle also applies to cases raising questions
-4-
involving transfer of venue. Aftab v. Gonzalez, 597 F. Supp. 2d
76, 79 (D.D.C. 2009). Because there is no automatic priority for
sequencing jurisdictional issues, In re LimitNone, LLC, 551 F.3d
572, 576 (7th Cir. 2008), a court may decide questions of venue
before addressing issues of personal or subject matter
jurisdiction. See Kazenercom TOO v. Turan Petroleum, Inc., 590
F. Supp. 2d 153, 157 n.5 (D.D.C. 2008); Cheney v. IPD Analytics,
LLC, 583 F. Supp. 2d 108, 117 (D.D.C. 2008).
II. ASSESSING VENUE
Rule 12(b)(3) “allows a case to be dismissed for improper
venue.” Fed. R. Civ. P. 12(b)(3). “‘[T]he plaintiff . . . bears
the burden of establishing that venue is proper.’” Walden v.
Locke, 629 F. Supp. 2d 11, 13 (D.D.C. 2009) (quoting Varna v.
Gutierrez, 421 F. Supp. 2d 110, 113 (D.D.C. 2006)). In
considering a motion to dismiss for improper venue, a “court
accepts the plaintiff’s well-pled factual allegations regarding
venue as true, draws all reasonable inferences from those
allegations in the plaintiff’s favor, and resolves any factual
conflicts in the plaintiff’s favor.” Id. (internal quotation
marks omitted). “To prevail on a motion to dismiss for improper
venue, a defendant must present facts sufficient to defeat a
plaintiff’s assertion of venue.” Id. (citing Darby v. U.S. Dep’t
of Energy, 231 F. Supp. 2d 274, 277 (D.D.C. 2002)). “If a case
is filed in the wrong judicial district, a federal court in that
-5-
district must dismiss the case or ‘if it be in the interest of
justice, transfer such case to any district or division in which
it could have been brought.’” Ifill v. Potter, Civil Action No.
05-2320 (RWR), 2006 WL 3349549, at *1 (D.D.C. Nov. 17, 2006)
(quoting 28 U.S.C. § 1406(a)).
When, as here, jurisdiction is not based solely on diversity
of citizenship, the applicable venue provision is 28 U.S.C.
§ 1391(b). Under that statute, venue is proper in a judicial
district (1) “where any defendant resides, if all defendants
reside in the same State,” (2) “in which a substantial part of
the events or omissions giving rise to the claim occurred, or a
substantial part of property that is the subject of the action is
situated,” or (3) “in which any defendant may be found, if there
is no district in which the action may otherwise be brought.” 28
U.S.C. § 1391(b)(1)-(3). A corporate defendant is deemed to
reside in “any district in which it is subject to personal
jurisdiction at the time the action is commenced.” 28 U.S.C.
§ 1391(c).
Kaymanesh and Akrami reside in Virginia and SASSI is a
Virginia corporation with its principal place of business in
Dulles, Virginia. (Compl. ¶ 2; Defs.’ Stmt. at 7, 12.) The
plaintiffs allege that SASSI resides in the District of Columbia,
and is subject to personal jurisdiction here, because it
maintains continuous and systematic sales activities in the
-6-
District of Columbia.1 (Pls.’ Opp’n at 1.) The plaintiffs
invoke the District of Columbia’s long-arm statute to establish
that SASSI is subject to personal jurisdiction in the District of
Columbia. (Id. at 2.)
The District’s long-arm statute provides, in relevant part,
that personal jurisdiction arises from a person’s2 “(1)
transacting any business in the District of Columbia; [or] (2)
contracting to supply services in the District of Columbia....”
D.C. Code Ann. § 13-423(a)(1)-(2). Under this statute, personal
jurisdiction is proper only when a claim arises from acts
enumerated in this section. See D.C. Code Ann. § 13-423(b).
“Even when the literal terms of the long-arm statute have
been satisfied, a plaintiff must still show that the exercise of
personal jurisdiction is within the permissible bounds of the Due
Process Clause.” GTE New Media Servs. Inc. v. BellSouth Corp.,
199 F.3d 1343, 1347 (D.C. Cir. 2000). That is, “a plaintiff must
show ‘minimum contacts’ between the defendant and the forum
establishing that ‘the maintenance of the suit does not offend
traditional notions of fair play and substantial justice.’” Id.1
The plaintiffs’ argument that SASSI resides in both
Virginia and the District of Columbia implies that venue is
proper in the District of Columbia under § 1391(b)(1) because all
of the defendants reside in the same state, namely Virginia, and
the District of Columbia is a district where SASSI also resides.
2
A corporation is a person under the District’s long-arm
statute. D.C. Code Ann. § 13-421 (2001).
-7-
(quoting Int’l Shoe Co. v. State of Wash., Office of Unemployment
Comp. and Placement et al., 326 U.S. 310, 316 (1945) (internal
quotation marks omitted)). Minimum contacts are required to
ensure that the defendant can “reasonably anticipate being haled
into [the forum state’s] court,” id., rather than being “haled
into a jurisdiction solely as a result of ‘random,’ ‘fortuitous,’
or ‘attenuated’ contacts.” Burger King Corp. v. Rudzewicz, 471
U.S. 462, 475 (1985) (citing Keeton v. Hustler Magazine, Inc.,
465 U.S. 770, 774 (1984); World-Wide Volkswagen Corp. v. Woodson,
444 U.S. 286, 299 (1980)). Personal jurisdiction is proper where
the defendant has “create[d] a substantial connection with the
forum State,” and “deliberately has engaged in significant
activities within a State, or has created continuing obligations
between himself and residents of the forum.” Id. at 475-76
(internal quotation marks and citations omitted). The question
of whether due process is satisfied is not “simply mechanical or
quantitative”; rather it is “the quality and nature of the
activity in relation to the fair and orderly administration of
the laws” that matters. Int’l Shoe Co., 326 U.S. at 319.
The plaintiffs provide no facts to satisfy the District’s
long-arm statute. They have not shown that their claims for
unpaid wages arise out of SASSI’s business transactions or
contracts formed in the District of Columbia. The plaintiffs
also fail to demonstrate that SASSI has established minimum
-8-
contacts with the District of Columbia. The plaintiffs’
conclusory allegations that SASSI has engaged in a substantial
amount of business operations and contracted to perform services
in the District of Columbia are not supported by any details
regarding the time frame, extent, or nature of these purported
operations or contracts. Meanwhile, the defendants estimate, and
the plaintiffs do not refute, that SASSI has “performed less than
10 out of 15,000 projects in D.C. since its inception in 1995,
and that it did not actively solicit, or advertise for, any of
that business.” (Defs.’ Reply to Pls.’ Opp’n at 4; see also
Defs.’ Stmt. at 3.) Even though this quantitative estimate is
not conclusive as to whether due process is satisfied, the
plaintiffs have failed to allege sufficient facts demonstrating
the quality and nature of the defendants’ contacts as to satisfy
the demands of due process. Because the plaintiffs have shown
neither that their claims arise from SASSI’s business
transactions or contracts in the District of Columbia nor that
SASSI maintains continuous and significant contacts here, there
is no basis to conclude that SASSI is subject to personal
jurisdiction and resides in the District of Columbia, and venue
is improper under § 1391(b)(1).
Under 28 U.S.C. § 1391(b)(2), jurisdiction is proper in the
judicial district where a substantial part of the events or
omissions giving rise to the claim occurred. 28 U.S.C.
-9-
§ 1391(b)(2). Here, the plaintiffs assert the conclusory
allegation that a “significant portion of the events that gave
rise to [their] claim[s] transpired in the District of Columbia”
(Pls.’ Opp’n at 7), but they provide no factual details to
support this allegation. Four of the five plaintiffs allege that
their job duties included installing stereo and electronic
equipment throughout the Washington, D.C. metropolitan areas, but
they fail to provide any specific facts to show that they
performed work in the District of Columbia for which they have
gone uncompensated. In support of the assertion that a
substantial part of the events giving rise to the plaintiffs’
claims occurred in the District of Columbia, the plaintiffs
identify one project at the Jordanian Embassy in the District of
Columbia, on which three of the plaintiffs worked. (Id. at 3.)
The plaintiffs, however, fail to state whether they are owed
overtime compensation for their work on this specific project.
Similarly, none of the counts in the plaintiffs’ complaint
is alleged to stem directly from work completed in the District
of Columbia. Count I alleges that the defendants failed to
compensate the plaintiffs for overtime hours worked but fails to
specify where the work took place. (Compl. ¶ 34.) In Count II,
Shay alleges that she was terminated unlawfully in retaliation
for her April 16, 2009 meeting with the defendants and for filing
a complaint with the DOL, but she specifies neither where the
-10-
meeting nor the subsequent termination took place. (Id. ¶¶ 38-
40.) Counts III and IV, which allege claims for breach of
contract and quantum meruit based on the defendants’ alleged
failure to compensate Shay and Talbert for services rendered
during their last two weeks of work, fail to detail where the
work occurred. (Id. ¶¶ 44, 47-48.) Finally, Counts V and VI are
breach of contract and quantum meruit claims that stem from the
bid allegedly prepared by Talbert to conduct work in Manassas
Park, Virginia. (Id. ¶¶ 51-52, 55-56.)
By contrast, the defendants undermine any allegation that
plaintiffs’ claims stem from work performed in the District of
Columbia by presenting facts showing that a very small proportion
of the plaintiffs’ work occurred here. For example, the
defendants show that Shay was assigned to work on only one
project located in the District of Columbia. (Defs.’ Stmt., Exh.
1, Affidavit of Koorosh Kaymanesh at 2-3.)3 The defendants also
establish that Talbert and Perez each worked on only one project
located in the District of Columbia out of the 100 and 50
projects respectively that they worked on during the course of
their employment. (Id. at 3.) Findley and Coleman never worked
in the District of Columbia. (Id.)
3
They also show that the April 16, 2009 meeting took place
at SASSI’s office in Virginia. (Id. at 3.)
-11-
Moreover, where claims arise from a plaintiff “being owed
compensation from . . . employment,” all of the events giving
rise to the litigation occur where “all computation and
processing of payments owed to the plaintiff occurred.” See
Smith v. US Investigations Servs., Inc., Civil Action No. 04-0711
(RMU), 2004 WL 2663143, at *3 (D.D.C. Nov. 18, 2004). The
defendants aver that they make all substantive decisions related
to wage payments and termination and compute and process all wage
payments in Virginia. (Defs.’ Stmt. at 13.) Because the claims
here center around the defendants’ alleged failure to compensate
the plaintiffs for prior employment, a substantial portion of the
events giving rise to the litigation occurred in Virginia where
the wage payments were computed and processed. Thus, venue is
improper in the District of Columbia under § 1391(b)(2).
Finally, § 1391(b)(3) does not provide a basis for venue. It
applies only when venue will not lie in any district under
§ 1391(b)(1) or (2), and proper venue can be established in this
case under § 1391(b)(1) or (2).
Because venue is improper in the District of Columbia under
28 U.S.C. § 1391(b), this court may transfer the case to a venue
where the case might have been brought under 28 U.S.C. § 1406(a).
Here, because all of the defendants can be found in the Eastern
District of Virginia (Defs.’ Stmt. at 13), this action will be
transferred to that district.
-12-
CONCLUSION
The plaintiffs have failed to show that venue is proper in
the District of Columbia. This case could have been brought in
the Eastern District of Virginia, and a transfer is in the
interest of justice. Accordingly, it is hereby
ORDERED that defendants’ motion [5] to dismiss for lack of
personal jurisdiction or improper venue, or in the alternative,
transfer venue be, and hereby is, GRANTED IN PART. The motion to
transfer is GRANTED. The Clerk is directed to transfer this case
to the United States District Court for the Eastern District of
Virginia.
SIGNED this 9th day of November, 2009.
/s/
RICHARD W. ROBERTS
United States District Judge