Shay v. Sight & Sound Systems, Inc.

• Court: District Court, District of Columbia
• Decided: November 9, 2009
• Docket: Civil Action No. 2009-1215
• Status: Published

Opinion

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