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Jeanne Shultz, Individually, On Behalf of v. Hyatt Vacation Marketing Corporation

UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF CALIFORNIA SAN JOSE DIVISION


February 28, 2011

JEANNE SHULTZ, INDIVIDUALLY, ON BEHALF OF PLAINTIFFS,
v.
HYATT VACATION MARKETING CORPORATION, HYATT VACATION
OWNERSHIP, INC., AND DOES 1-50, INCLUSIVE,
DEFENDANTS.

The opinion of the court was delivered by: Lucy H. Koh United States District Judge

For the Northern District of California others similarly situated, and on behalf of the general public, No.: K United States District Court

ORDER DENYING MOTION TO TRANSFER

Jeanne Schultz, the named Plaintiff in this putative class action, brought suit in this Court asserting various employment law violations based on federal and California law. Defendants

Hyatt Vacation Marketing Corporation and Hyatt Vacation Ownership, Inc. (together, Hyatt) 21 moved to transfer this case to the Middle District of Florida pursuant to 28 U.S.C. § 1404(a). Mot. 22 to Transfer (Mot., Dkt. No. 12). The Court finds this matter suitable for determination without oral 23 argument. See Civ. L.R. 7-1(b). Therefore, the hearing on this matter set for May 5, 2011 at 1:30 24 p.m. is hereby VACATED. For the reasons set forth below, the Court DENIES the motion to 25 transfer. Accordingly, the case management conference scheduled on May 5, 2011 at 1:30 p.m. 26 will remain as set.

3 violations of the Fair Labor Standards Act (FLSA, 29 U.S.C. § 201 et seq.) and the California Labor Code. Plaintiff alleges that Defendants failed to pay Plaintiff and other employees minimum 5 wage and overtime compensation. First Am. Compl. (FAC) ¶ 1. Plaintiff asserts two classes.

First, a nationwide class, composed of "all persons who are or have been employed by Defendants 7 as sales executives at any time within three years prior to this action's filing date . . . ." Second, a 8

I.INTRODUCTION

Jeanne Schultz, the named Plaintiff in this case, brings a putative class action alleging California class, composed of "all persons who are or have been employed by Defendants as sales 9 executives within the State of California within four years of the filing of this Complaint . . . ."

FAC ¶ 40.

See FAC ¶¶ 2-3. Plaintiff alleges that the California class is made up of at least 40 people. See Plaintiff worked for Defendants as a sales executive at their Hyatt Vacation Club office in Carmel, Plaintiff asserts that she and other sales executives were designated "commission only" and therefore, at times, received no compensation from Defendants. FAC ¶ . At other times,

Plaintiff states that Defendants paid a "recoverable draw," but that this sometimes resulted in 18 payments of less than the minimum wage. FAC ¶¶ 19-20. These draws were deducted from Plaintiffs' future commissions. FAC ¶ 21. Plaintiff also alleges that Defendants failed to pay 20 overtime, failed to provide meal and rest periods, and failed to provide accurate wage statements.

In addition to the Vacation Club office in Carmel, Hyatt maintains Vacation Club offices in Texas, Arizona, Colorado and Florida. See Mot. at 3. Hyatt states that it has three "sales offices 24 for resort properties" in Florida, and one office in each of the other states. See Yong-Kagimoto

Decl. ISO Mot. (Dkt. No. 14) at ¶ 4. Plaintiffs have submitted information apparently from Hyatt's 26 website which shows that three of Hyatt's Florida offices are located in Key West, in the Southern

District of Florida. See Helland Decl. ISO Opp'n. to Mot., Ex. A. Hyatt has two other Florida 28 offices, located in Bonita Springs and Siesta Key, Florida, both in the Middle District of Florida.

Plaintiff resides in Monterey, California, within the Northern District of California. California (also in the County of Monterey) for various periods during 2005-2010. FAC ¶ 5. 15

FAC ¶¶ 23-31. 22

Id. It is not clear which three of these five Florida offices are the three "sales offices for resort 2 purposes" that Hyatt identifies in its Motion, and Hyatt does not clarify in its Reply. In any event, 3 it appears that a substantial number of Florida offices are outside the Middle District, and Hyatt 4 does not dispute this. 5

Both defendants maintain their headquarters in Florida. Id. ¶ 3. Hyatt has submitted a declaration from Kathy Francis, payroll manager for Hyatt Residential Group, Inc. (formerly Hyatt Vacation Ownership, Inc.). Ms. Francis states that she has searched payroll records for every 8 employee and has thus determined that "more members of the putative class currently reside or 9 show a last known address in the State of Florida than in any other state." See Francis Decl. ISO Mot. (Dkt. No. 13) at ¶ 7. Neither Hyatt nor Plaintiff submit information regarding how many putative class members reside outside of California or in Florida, nor does either party specify what judicial district within Florida these class members reside in. centralized at its St. Petersburg, Florida headquarters. See Yong-Kagimoto Decl. at ¶¶ 3, 5. Most 15 human resources-related documents, including policies and some personnel files, are maintained at 16 the corporate headquarters. Id. at ¶ 8. Key personnel who make decisions regarding classification 17 of employees and terms and conditions of employment of sales executives work in the Florida 18 headquarters. Id. at ¶ 9. However, each office location has one employee who performs some 19 human resources-related tasks, including submitting payroll and processing new hires. Id. at ¶ 8. 20

Hyatt maintains its Information Technology Department at its headquarters, and maintains all sales 21 data there. Id. at ¶ 7. The Defendants' e-mail server is located at the Florida headquarters. In 22 addition, the Hyatt payroll is calculated, processed and paid out of the Florida headquarters. Id. at 23

¶ 9. The "commission specialists," who calculate commissions on real estate sales for all U.S. 24 sales personnel, work at the Florida headquarters. See Francis Decl. at ¶ 6. transfer any civil action to any other district or division where it might have been brought."

Hyatt submits information indicating that its payroll and human resources functions are

II.LEGAL STANDARD

"For the convenience of parties and witnesses, in the interest of justice, a district court may U.S.C. § 1404(a). In the Ninth Circuit, the district court has discretion to transfer under § 1404(a), depending on a "case-by-case consideration of convenience and fairness." Jones v. The Court must consider public factors relating to "the interest of justice" and private factors 4 relating to "the convenience of the parties and witnesses." See Decker Coal Co. v. Commonwealth GNC Franchising, Inc., 211 F.3d 495, 498 (9th Cir. 2000) (internal citation and quotation omitted).

Edison Co., 805 F.2d 834, 843 (9th Cir. 1986). Such factors may include: (1) the location where 6 relevant agreements were negotiated and executed; (2) the state that is most familiar with the 7 governing law; (3) the plaintiff's choice of forum; (4) the parties' respective contacts with the 8 forum; (5) the contacts relating to the plaintiff's cause of action in the chosen forum; (6) the 9 differences in the costs of litigation in the two forums; (7) the availability of compulsory process to 10 compel attendance of unwilling non-party witnesses; (8) the ease of access to sources of proof; (9) the presence of a forum selection clause; and (10) the relevant public policy of the forum state, if any. Jones, 211 F.3d at 498-99. The moving party bears the burden of showing that transfer is 13 appropriate. Jones, 211 F.3d at 499. been brought in the transferee venue. 28 U.S.C. § 1404(a). Therefore, the Court addresses this 18 issue first. Plaintiffs do not dispute that this case could have been brought in the Middle District of St. Petersburg, Florida, in the Middle District of Florida. Therefore, Defendants are subject to 21 personal jurisdiction in Florida and venue in the Middle District is proper under 28 U.S.C.

Florida, the Court proceeds to weigh the interests of convenience and justice to determine whether transfer is appropriate. and the Court addresses this factor first. When deciding whether to transfer venue, the Court "must 28 balance the preference accorded plaintiff's choice of forum with the burden of litigating in an

III.ANALYSIS

a. Venue Is Available in the Middle District of Florida Transfer under 28 U.S.C § 1404(a) is only appropriate if the action could properly have Florida. Defendants are a Florida corporation and a Delaware corporation, both headquartered in § 1391(b), (c). Having established that jurisdiction and venue are proper in the Middle District of

b. Plaintiff's Choice of Forum

The parties dispute the proper amount of deference owed to the Plaintiff's choice of forum inconvenient forum." Jones, 211 F.3d at 498. Generally, the plaintiff's choice of forum is treated 2 with great deference, and only significant inconvenience or unfairness will justify transfer. See Creative Tech., Ltd. v. Aztech Sys., 61 F.3d 696, 703 (9th Cir. 1995); Florens Container v. Cho Yang Shipping, 245 F.Supp.2d 1086, 1092 (N.D. Cal. 2002), citing Sec. Investor Prot. Corp. v. In a class action, this deference is somewhat tempered, however. A class action with potential class members located all over the United States has been found to reduce the 8 significance of the plaintiff's choice. "[W]here there are hundreds of potential plaintiffs, all equally entitled voluntarily to invest themselves with the corporation's cause of action and all of whom could with equal show of right go into their many home courts, the claim of any one Vigman, 764 F.2d 1309, 1317 (9th Cir. 1985). plaintiff that a forum is appropriate merely because it is his home forum is considerably weakened." Koster v. Lumbermens Mut. Cas. Co., 330 U.S. 518, 525-26 (1947). But the forum 13 choice of a class action plaintiff may still be entitled to some deference. "In judging the weight to 14 be accorded [the plaintiff's] choice of forum, consideration must be given to the extent of both [parties'] contacts with the forum, including those relating to [the plaintiff's] cause of action. If the operative facts have not occurred within the forum and the forum has no interest in the parties or subject matter, [the plaintiff's] choice is entitled to only minimal consideration." Lou v. Belzberg,

In this case, the Plaintiff alleges that her claims arose within the Northern District of California in the office that Hyatt maintains there, and that she is a resident of this district. In 21 addition, the California Class is comprised of other employees or former employees who worked at 22 the same office, bringing claims for violation of California law. Plaintiff alleges that there are 40 23 putative plaintiffs in the California Class. FAC ¶ 40. Defendants counter that "more members of 24 the putative class currently reside or show a last known address in the State of Florida than in any 25 other state," but do not provide an estimated number of putative class members in Florida or in any 26 other location. In light of these facts and allegations, the Court finds that Plaintiff's choice of 27 forum is due some weight. Several other judges in this district have concluded likewise when 28 presented with very similar facts and claims. See Holliday v. Lifestyle Lift, Inc., No. C 09-4995, 834 F.2d 730, 739 (9th Cir. 1987) (internal citations omitted).

2010 WL 3910143 at *6 (N.D. Cal. Oct. 5, 2010); Milton v. Trueposition, Inc., No. C 08-3616, 2 2009 WL 323036 at *2 (N.D. Cal. Feb. 9, 2009). Accordingly, this factor weighs against transfer. other Jones factors. Specifically, these factors are: (2) the state that is most familiar with the 6 governing law; (4) the parties' respective contacts with the forum; (5) the contacts relating to the 7 plaintiff's cause of action in the chosen forum; (6) the differences in the costs of litigation in the 8 two forums; (7) the availability of compulsory process to compel attendance of unwilling non-party 9 witnesses; (8) the ease of access to sources of proof; and (10) the relevant public policy of the 10 forum state, if any.*fn1 Jones, 211 F.3d at 498-99. Because most of the remaining factors weigh against transfer or are neutral, the Court concludes that this case should not be transferred.

(2) State Most Familiar With the Governing Law

Both districts are familiar with federal law, which is the basis for Plaintiff's Federal Class claims. This Court is likely more familiar than the Middle District of Florida with the California 15 laws underlying the California Class claims. However, other federal courts are "fully capable of 16 applying California law." Foster v. Nationwide Mut. Ins. Co., No. C 07-4928, 2007 WL 4410408 17 at *6 (N.D. Cal. 2007). Therefore, this factor weighs only slightly against transfer.

Club office where Plaintiff was employed in Monterey, California (within the Northern District of Hyatt's business at the Carmel office involves selling property within California. See Mot. at 1.

Plaintiff's contacts with this district are also extensive. Plaintiff is a resident of this district and 25 worked for Hyatt in this district.

Hyatt's headquarters are located in the Middle District of Florida, a substantial number of Hyatt's Florida. Only one of the sales offices that Hyatt cites as relevant to the transfer analysis appears to 6 be in the Middle District of Florida. See Helland Decl., Ex. A. Of course, Hyatt also maintains 7 one sales office in the Northern District of California. Neither party has submitted evidence 8 showing that one office is significantly bigger or employs more sales executives than the other. In 9 contrast, it appears that the Plaintiff has no contacts with Florida at all. On balance, then, while Northern District of California due to its Florida headquarters, it has extensive contacts with both districts. Plaintiff has extensive contacts only with the Northern District of California. Since both parties have extensive contacts with the Northern District of California, but only Hyatt has contacts with its desired district, this factor weighs against transfer.

Both parties cite substantial contacts relating to Plaintiff's cause of action in each forum.

As already discussed, Plaintiff's cause of action arises out of her employment at the Hyatt Vacation

Plaintiff worked were created at the Carmel office, and that an employee there performs "processing of new hires." Yong-Kagimoto Decl. ¶ 8. Therefore, there are substantial contacts 21 relating to Plaintiff's cause of action in this judicial district. those with the Northern District of California, Hyatt emphasizes the functions performed at its 24 headquarters, and the contacts of members of the putative Federal Class. Hyatt cites the formation 25 of policies governing classification and compensation for sales executives, and the computation of 26 sales commissions, as activities closely related to the Plaintiff's cause of action that take place in 27 the Middle District of Florida. Yong-Kagimoto Decl. ¶ 6, 9. Hyatt argues that "[a]ll operations 28 pertaining to the payment of commissions, including development of the commission structure and

Hyatt urges that because its contacts with Florida are more extensive than its contacts with California, this factor should weigh in favor of transfer. See Mot. at 11-12. Although it is true that Vacation Club offices appear to be located in Key West, which is in the Southern District of

Hyatt's contacts with the Middle District of Florida are more extensive than its contacts with the

(5) Contacts Relating to the Plaintiff's Cause of Action in the Chosen Forum

Club office in Carmel, California. Hyatt admits that the payroll records relating to the hours

In arguing that contacts with the Middle District of Florida are much more significant than plans, interpretation of payment plan issues, resolution of disputes, and calculation and payment of 2 commissions, take place at the corporate headquarters." Francis Decl. ¶ 6. Hyatt also argues that 3 because it has determined that "more members of the putative class currently reside or show a last 4 known address in the State of Florida than in any other state," the Court should find that the Middle 5 The Court recognizes that Hyatt's human resources functions, including payroll and commissions computations, are "centralized" and directed from its Middle District of Florida 8 headquarters, and that these are substantial contacts relating to Plaintiff's claims. However, this 9 does not negate the importance of Plaintiff's Northern District of California contacts. Simply 10 because Hyatt determines policies or makes compensation decisions in Florida does not negate the District of Florida contacts are more significant. local impact of those decisions when they are implemented elsewhere. Accord Holliday, 2010 WL 3910143 at * 8. In addition, Hyatt has provided no evidence regarding how many putative class 13 members are located within its desired transferee district versus within other districts in Florida.

Evidence submitted by the Plaintiff suggests that a substantial number of the putative class members in Florida likely worked in and may reside in the Southern District of Florida rather than 16 the Middle District of Florida. While the convenience of potential witnesses is a factor the Court considers below, for the purposes of establishing claim-specific contacts, activity outside the 18 district itself is generally discounted. See, e.g., Foster, 2007 WL 4410408 at *3 (finding that the

"operative facts have not occurred within the forum" where the plaintiff worked only 30% of the 20 time in the district where he filed the case, while working 70% of the time in another California 21 district). Because both parties cite substantial claim-related contacts in each forum, this factor is 22 neutral regarding transfer.

Florida will impose travel costs for Plaintiff and her attorneys, and will require Plaintiff to hire 27 local counsel in Florida. Hyatt argues that its costs will outweigh Plaintiff's if the case is not 28 transferred, because a trial in California will cause Hyatt to "bear the significant expense of (6) Differences in the Costs of Litigation in the Two Forums Differences in costs of litigation are weighted neutrally regarding transfer. Because the Plaintiff lives in the Northern District of California, transferring the case to the Middle District of 26 providing transportation, accommodations, and meals" for any employee witnesses it wishes to 2 bring to trial. Further, Hyatt argues that its business operations and the lives of its employees will 3 be more significantly disrupted if trial proceeds in California rather than Florida. See Mot. at 8-9.

In support of its argument that its inconvenience and expense should outweigh the Plaintiff's in the transfer analysis, Hyatt cites a Southern District of New York decision 6 transferring a case to the Northern District of Ohio "because it appeared that resolution of the 7 major issues would depend almost exclusively upon the testimony of the defendant's employees . . 858 (S.D.N.Y. 1960). In the present case, however, the testimony of the Plaintiff and the members 10 of the putative classes appear to be critical to establishing their right to relief. Therefore, General Motors is distinguishable. The Court is persuaded by authority holding that corporations are better-equipped than individuals to absorb increased litigation costs. See, e.g., Healthtrac Corp. v. 2005). While each party will face increased litigation expenses if the case proceeds to trial in its 15 disfavored district, and while Hyatt's expenses will likely be greater overall than Plaintiff's if the 16 case is not transferred to Florida, the Court finds that Hyatt's ability to bear these expenses tempers 17 the importance of the expenses' relative size. Transfer is not appropriate if it simply shifts the 18 inconvenience from one party to another. Decker Coal Co. v. Commonwealth Edison Co., 805 F.2d 834, 843 (9th Cir. 1986). Therefore, on balance, litigation costs are weighted neutrally in the 20 transfer analysis. convenience should be weighed in the transfer analysis. Accordingly, the compulsory process 25 issue is not relevant here. However, both parties stress the convenience of party witnesses in the 26 transfer analysis. The Court considers the convenience of these witnesses. See Morris v. Safeco Ins. Co., No. C 07-2890, 2008 WL 5273719 at *4 (N.D. Cal. Dec. 19, 2008).

. ." Mot. at 8 (summarizing the holding in United States v. General Motors Corp., 183 F. Supp. 9

Caterpillar Inc., No. C 05-2727, 2005 U.S. Dist. LEXIS 25272 at *12-*13 (N.D. Cal. Oct. 26, 14 (7) Availability of Compulsory Process to Compel Attendance of Unwilling Non-Party Witnesses

Neither party has submitted evidence indicating that there are third-party witnesses whose development, human resources, and payroll who work at its Florida headquarters. See Mot. at 6-7, Francis Decl. The Court has already weighed the inconvenience and expense relating to these 4 employee witnesses against the Plaintiff's inconvenience in the preceding factor, and has found 5 that the two considerations balance each other. members of the Federal Class, present and former employees of its Florida Vacation Club offices.

As described above, Hyatt cites the convenience of employees involved in policy In addition to these Hyatt employee witnesses, Hyatt relies on the convenience of putative

Hyatt states that "more current and former sales executives reside in Florida than in any other 9 state." Francis Decl. ¶ 7. However, Hyatt does not identify how many more putative class 10 members reside in Florida than in the four other states where Hyatt maintains Vacation Club 11 offices (Texas, California, Colorado, and Arizona). In addition, under the Fair Labor Standards Act, individuals must "opt in" to become members of the Federal Class. Until class members opt 13 in, the Court has no way to know whether any putative class members residing in Florida (or any of 14 the other states) will in fact opt in to become members of the Federal Class. Even if they do opt in, 15 the Court might ultimately find that no Federal Class can be certified.

In contrast, Plaintiff notes that the California Class is a Federal Rule of Civil Procedure class. Under this Rule, once a class is certified, class members are presumed to be part of the class 18 unless they opt out. See Fed. R. Civ. P. 23(c)(2). Therefore, if the California Class is certified, the Plaintiff estimates that it will consist of 40 current and former employees who work or worked in 20 the Hyatt Carmel office and for whom the California forum is presumably more convenient. FAC 21

Class will be certified, and if they are, what putative class members may opt in or out.

District. This proposal is simply not practical. It would not serve the interests of judicial 26 efficiency to task the Middle District of Florida with determining class certification and, after it has 27 become familiar with the case and the issues, to transfer the case back to this Court. This would 28 also delay the litigation. Therefore, the Court cannot approve this proposal.

¶ 40. At this point in the litigation, it is simply not clear that either the California or the Federal

Hyatt proposes transferring the case to the Middle District of Florida pending resolution of Federal Class certification, and if this certification is denied, transferring the case back to this Given the uncertainty regarding the number and location of putative class members, the Court does not find that the convenience of these possible party witnesses provides much support 3 for either side in the transfer analysis at this stage of the litigation. See Holliday, 2010 WL Federal classes consisted of "unnamed plaintiffs in as yet undetermined locations."). While trial in Florida would be more convenient for any party witnesses residing in that state, trial in California 7 would be more convenient for any party witnesses residing in California, Colorado, or Arizona. 8

Given that there is no way to know now whether these putative class members will eventually play 10 a role in this case, it would be unduly speculative to place significant weight on their convenience. commissions, payroll, and real estate sales are located in St. Petersburg, Florida . . . [t]ransferring Plaintiff's claims to the Middle District of Florida would obviate the necessity of shipping 16 documents across the country for document review." Reply at 8. This argument seems to ignore 17 the modern realities of document production.*fn2 As this court has previously held, "[w]ith 18 technological advances in document storage and retrieval, transporting documents does not 19 generally create a burden." Van Slyke v. Capital One Bank, 503 F. Supp. 2d 1353, 1362 (N.D. Cal. 2007). Although Hyatt argues that many of its documents are "irregularly shaped/sized such that 21 they cannot be easily copied or scanned," Hyatt is only obligated to "permit the requesting party or 22 its representative to inspect [or] copy" these originals in a "reasonable time, place and manner."

3910143 at *7 (analyzing only the named plaintiff's convenience when putative California and For putative class members residing in Texas, trial in either proposed venue is likely inconvenient. Id. Therefore, the Court finds that this factor is neutral in the transfer analysis. (8) Ease of Access to Sources of Proof

Hyatt argues that because "documents pertaining to the calculation and processing of

See Reply at 8; Fed. R. Civ. Proc. 34. Whether or not the case is transferred to Florida, Hyatt's discovery obligations remain the same. If it is truly unduly burdensome for Hyatt to provide copies 2 of such irregularly-shaped documents to Plaintiff, it can propose making such documents available 3 where they are stored. The parties will have to work out potential discovery disputes such as this 4 one regardless of where the case is venued. Therefore, the Court finds that this factor weighs only 5 slightly in favor of transfer.

(10) Relevant Public Policy of the Forum State The Court finds that this factor is neutral regarding transfer. Each proposed venue has an interest in the matter. The Middle District of Florida has an interest because it is the site of Hyatt's 9 headquarters and because Hyatt's personnel and compensation policies are made there. Likewise, 10 the Northern District of California has an interest in protecting the rights of the putative California Class and in enforcing California law. Therefore, this factor does not weigh for or against transfer.

IV.CONCLUSION

Weighing all of the relevant factors as discussed above, the Court finds that transfer to the Middle District of Florida is not in the interests of justice or convenience. Accordingly, Hyatt's

Motion is DENIED, and the case will proceed in this District. The case management conference 16 set for May 5, 2011 at 1:30 p.m. remains as set. In addition, the Court intends to issue a Case Management Order. The parties' proposed case schedule in the Joint Case Management Statement 18 does not include a deadline for filing class certification motion(s). The parties shall propose such a deadline by March 15, 2011.

IT IS SO ORDERED.


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