Jacobs v. Sustainability Partners LLC
| Decision Date | 18 September 2020 |
| Docket Number | Case No. 20-cv-01981-PJH |
| Parties | JOEL RAY JACOBS, Plaintiff, v. SUSTAINABILITY PARTNERS LLC, et al., Defendants. |
| Court | U.S. District Court — Northern District of California |
Before the court is defendants Sustainability Partners LLC ("SP") and Thomas Cain's ("Cain" and together with SP, "defendants") motion to dismiss and motion to transfer venue. The matter is fully briefed and suitable for decision without oral argument. Having read the parties' papers and carefully considered their arguments and the relevant legal authority, and good cause appearing, the court rules as follows.
On March 20, 2020, Plaintiff Joel Ray Jacobs ("plaintiff") filed his complaint ("Compl.") against defendants asserting seven claims: (1) breach of contract; (2) wrongful termination in violation of public policy; (3) violation of California Labor Code §§ 201, 203; (4) violation of California Labor Code § 2802; (5) fraud/false promise/intentional misrepresentation; (6) quantum meruit; and (7) violation of the Private Attorney General Act ("PAGA"), Cal. Labor Code § 2698 et seq. Dkt. 1.
Plaintiff is an individual residing in Geyserville, California, (id. ¶ 3), defendant SP is a Delaware limited liability company that is headquartered in Chandler, Arizona, (id. ¶ 4), and defendant Cain is SP's founder and Chief Executive Officer, residing in Arizona, (id. ¶ 5). Plaintiff alleges he began working for defendants in April 2016 for the purpose of improving SP's business strategy. Id. ¶¶ 13, 15. Prior to undertaking this work, plaintiff sought assurances from defendant Cain that he would receive both an annual salary and equity ownership in SP and in August 2016, plaintiff entered into a written employment agreement with SP. Id. ¶¶ 15-16. Plaintiff was hired as SP's managing director with a base salary of $300,000 annually, plus other payments and bonuses and equity in the company. Id. ¶ 16. Plaintiff alleges that his relationships and reputation in the investor community allowed SP to access the investments it needed to stay afloat. Id. ¶ 18.
In or around April 2017, in connection with a change in the company's ownership, plaintiff's employment agreement was amended twice and, as part of the amendment, plaintiff released his claims to equity ownership in return for $50,000. Id. ¶ 21. In or about July 2017, SP purported to terminate plaintiff's employment and treated him as an independent contractor providing the same services as when plaintiff was employed by SP. Id. ¶ 22. Defendants represented that the change would be temporary, and plaintiff alleges he did not agree to the reclassification. Id. In early July 2017, defendant Cain verbally offered plaintiff a 15% equity position in SP in consideration for his performance of past services and promise to provide future services, which plaintiff accepted. Id.
Between July 2017 and his termination, plaintiff repeatedly asked Cain to provide to provide a written agreement affirming plaintiff's ownership of 15% of the company and Cain responded that a written contract was forthcoming. Id. ¶¶ 26-27. On or around April 16, 2019, defendant Cain and SP's Chief Administrative Officer Adam Cain presented plaintiff with a proposed agreement that would have altered plaintiff's status from employee to independent contractor. Id. ¶ 33. Plaintiff was told that SP was terminating his existing agreement. Id. ¶ 34. Plaintiff expressed his belief that he was an employee and that it was improper to misclassify him as an independent contractor; he refused to sign the agreement and was terminated. Id. ¶ 35.
Defendants now move to dismiss for improper venue or, in the alternative to transfer for convenience pursuant to 28 U.S.C. § 1404(a). Defendants also move in thealternative to dismiss all of plaintiff's claims for failure to state a claim under Federal Rule of Civil Procedure 12(b)(6).
"The district court of a district in which is filed a case laying venue in the wrong division or district shall dismiss, or if it be in the interest of justice, transfer such case to any district or division in which it could have been brought." 28 U.S.C. § 1406(a). If a defendant files a motion pursuant to Federal Rule of Civil Procedure 12(b)(3) to dismiss for improper venue, it is the plaintiff's burden to establish that venue is properly in the district where the suit was filed. Piedmont Label Co. v. Sun Garden Packing Co., 598 F.2d 491, 496 (9th Cir. 1979). In considering a motion to dismiss under Rule 12(b)(3), a court need not accept the pleadings as true and may consider facts outside the pleadings. See Argueta v. Banco Mexicano, S.A., 87 F.3d 320, 324 (9th Cir. 1996).
Where venue is improper, a court has discretion to dismiss the case pursuant to Rule 12(b)(3) or transfer the case in the interests of justice to an appropriate jurisdiction under 28 U.S.C. § 1406(a). See King v. Russell, 963 F.2d 1301, 1304 (9th Cir. 1992) (per curiam).
In addition, "[f]or the convenience of parties and witnesses, in the interest of justice, a district court may transfer any civil action to any other district or division where it might have been brought . . . ." 28 U.S.C. § 1404(a). The party moving for transfer for the convenience of parties and witnesses the burden of demonstrating transfer is appropriate. Commodity Futures Trading Comm'n v. Savage, 611 F.2d 270, 279 (9th Cir. 1979). In considering a § 1404(a) motion to transfer, the court must look at each of the enumerated factors—whether the action could have been brought in the proposed transferee district, the convenience of the parties, the convenience of the witnesses, and the interests of justice. Hatch v. Reliance Ins. Co., 758 F.2d 409, 414 (9th Cir. 1985).
If the action could have been brought in the transferee venue, the court then must determine if the defendant has made a "strong showing of inconvenience to warrant upsetting the plaintiff's choice of forum" by considering private factors relating to "the convenience of the parties and witnesses" and public factors relating to "the interest of justice," including "the administrative difficulties flowing from court congestion and [the] local interest in having localized controversies decided at home." Decker Coal Co. v. Commonwealth Edison Co., 805 F.2d 834, 843 (9th Cir. 1986) (internal quotation marks omitted).
Courts in this district commonly examine the following factors to determine convenience and fairness under § 1404(a): (1) the plaintiff's choice of forum, (2) the convenience of the parties, (3) the convenience of the witnesses, (4) the ease of access to the evidence, (5) the familiarity of each forum with the applicable law, (6) the feasibility of consolidation with other claims, (7) any local interest in the controversy, and (8) the relative court congestion and time to trial in each forum. Williams v. Bowman, 157 F. Supp. 2d 1103, 1106 (N.D. Cal. 2001) (citation omitted); see Jones v. GNC Franchising, Inc., 211 F.3d 495, 498-99 (9th Cir. 2000). Courts may examine all these factors, but "[n]o single factor is dispositive." Ctr. for Biological Diversity v. Kempthorne, 2008 WL 4543043, at *2 (N.D. Cal. Oct. 10, 2008) (citing Stewart Org., Inc. v. Ricoh Corp., 487 U.S. 22, 29 (1988)). The weighing of the factors for and against transfer is within a trial court's discretion. Ventress v. Japan Airlines, 486 F.3d 1111, 1118 (9th Cir. 2007) (citation omitted).
A motion to dismiss under Federal Rule of Civil Procedure 12(b)(6) tests for the legal sufficiency of the claims alleged in the complaint. Ileto v. Glock, 349 F.3d 1191, 1199-1200 (9th Cir. 2003). Under Federal Rule of Civil Procedure 8, which requires that a complaint include a "short and plain statement of the claim showing that the pleader is entitled to relief," Fed. R. Civ. P. 8(a)(2), a complaint may be dismissed under Rule 12(b)(6) if the plaintiff fails to state a cognizable legal theory, or has not alleged sufficientfacts to support a cognizable legal theory. Somers v. Apple, Inc., 729 F.3d 953, 959 (9th Cir. 2013).
While the court is to accept as true all the factual allegations in the complaint, legally conclusory statements, not supported by actual factual allegations, need not be accepted. Ashcroft v. Iqbal, 556 U.S. 662, 678-79 (2009). The complaint must proffer sufficient facts to state a claim for relief that is plausible on its face. Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555, 558-59 (2007) (citations and quotations omitted).
A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Iqbal, 556 U.S. at 678 (citation omitted). "[W]here the well-pleaded facts do not permit the court to infer more than the mere possibility of misconduct, the complaint has alleged—but it has not 'show[n]'—that the pleader is entitled to relief.'" Id. at 679. Where dismissal is warranted, it is generally without prejudice, unless it is clear the complaint cannot be saved by any amendment. Sparling v. Daou, 411 F.3d 1006, 1013 (9th Cir. 2005).
Because one of plaintiff's claims sound in fraud, the complaint must also meet the heightened pleading standard of Federal Rule of Civil Procedure 9(b). See Kearns v. Ford Motor Co., 567 F.3d 1120, 1125 (9th Cir. 2009). Rule 9(b) requires a party alleging fraud or mistake to state with particularity the circumstances constituting fraud or mistake. To satisfy this standard, the "complaint must identify the who, what, when, where, and how of the misconduct charged, as well as what is false or misleading about the purportedly fraudulent statement, and why it is false." Salameh v. Tarsadia Hotel, 726 F.3d 1124, 1133 (9th Cir. 2013) (citation and internal quotation marks omitted).
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