Senne v. Kan. City Royals Baseball Corp.

• Decision Date: 20 May 2015
• Docket Number: Case Nos. 14–cv–00608–JCS, 14–cv–03289–JCS
• Citation: 105 F.Supp.3d 981
• Parties: Aaron Senne, et al., Plaintiffs, v. Kansas City Royals Baseball Corp., et al., Defendants.
• Court: U.S. District Court — Northern District of California

105 F.Supp.3d 981

Aaron Senne, et al., Plaintiffs, v. Kansas City Royals Baseball Corp., et al., Defendants.

Case Nos. 14–cv–00608–JCS

14–cv–03289–JCS

United States District Court, N.D. California.

Signed May 20, 2015

Daniel L. Warshaw, Bobby Pouya, Pearson, Simon & Warshaw, LLP, Sherman Oaks, CA, Aaron Michael Zigler, Korein Tillery, Garrett Ray Broshuis, Stephen Matthew Tillery, Korein Tillery, LLC, St. Louis, MO, Anne Brackett Shaver, Lieff, Cabraser, Heimann & Bernstein LLP, Benjamin Ernest Shiftan, Bruce Lee Simon, Thomas Kay Boardman, Pearson, Simon & Warshaw, LLP, San Francisco, CA, Brian P. Murray, Lee Albert, Glancy Prongay & Murray LLP, Rachel Geman, Lieff Cabraser Heimann & Bernstein, LLP, New York, NY, George Andrew Zelcs, Korein Tillery LLC, Chicago, IL, Randall K. Pulliam, Carney Bates & Pulliam, PLLC, Little Rock, AR, for Plaintiffs.

Nick Giarraputo, pro se.

Lauren Gagnier, pro se.

Leonard Davis, pro se.

Gaspar Santiago, pro se.

Grant Duff, pro se.

Omar Aguilar, pro se.

Mark Wagner, pro se.

Matt Lewis, pro se.

David Quinowski, pro se.

Brandon Pinckney, pro se.

Elise M. Bloom, Neil H. Abramson, Adam M. Lupion, Howard L. Ganz, Proskauer Rose LLP, New York, NY, Laura L. Reathaford, Enzo Der Boghossian, Proskauer Rose LLP, Los Angeles, CA, D. Gregory Valenza, Shaw Valenza LLP, San Francisco, CA, Alan Mark Rifkin, Joyce Elizabeth Smithey, Marie Celeste Bruce, Rifkin, Weiner, Livingston, Levitan and Silver, LLC, Annapolis, MD, for Defendants.

ORDER RE MOTIONS TO DISMISS AND MOTIONS TO TRANSFER

Re: Docket Nos. 281, 283, 285, 286

JOSEPH C. SPERO, United States Chief Magistrate Judge

I. INTRODUCTION

Plaintiffs in this putative class action are former Minor League baseball players who assert claims under the federal Fair Labor Standards Act (“FLSA”) and California, Florida, Arizona, North Carolina and New York wage and hour laws against the Office of the Commissioner of Baseball doing business as Major League Baseball (“MLB”) and its thirty member franchises. Presently before the Court are two sets of motions challenging personal jurisdiction and venue.

With respect to personal jurisdiction, two motions to dismiss have been filed in this action (the “Motions to Dismiss”). First, ten of the MLB Clubs named as Defendants in the Complaint—Atlanta National League Baseball Club, Inc., Boston Red Sox Baseball Club L.P., Chicago White Sox, Ltd., Cleveland Indians Baseball Co., Inc., Cleveland Indians Baseball Co., L.P., Detroit Tigers, Inc., New York Yankees Partnership, The Phillies, Pittsburgh Associates, L.P., Tampa Bay Rays Baseball, Ltd., and Washington Nationals Baseball Club, LLC (“Proskauer PJ Defendants”) bring a Motion to Dismiss the Consolidated Amended Complaint as Against Certain Defendants for Lack of Personal Jurisdiction, Docket No. 281 (“Proskauer Motion to Dismiss”). Second, Defendant Baltimore Orioles Limited Partnership and Baltimore Orioles, Inc. (collectively, “Baltimore Orioles”) join in the Proskauer Motion to Dismiss and also bring a Motion to Dismiss the Consolidated Amended Complaint for Violations of Federal and State Wage and Hour Laws Against the Baltimore Orioles Limited Partnership and Baltimore Orioles, Inc., Docket No. 285 (“Baltimore Orioles Motion to Dismiss”). The Court refers collectively to the Defendants who seek dismissal on the basis of lack of personal jurisdiction as the “Personal Jurisdiction Defendants.”

Similarly, two motions seeking transfer under 28 U.S.C. § 1404(a) have been filed (“the Transfer Motions”). First, all of the Defendants except the Baltimore Orioles (“Proskauer Transfer Defendants”) bring a Motion to Transfer Action to Middle District of Florida, Docket No. 283 (“Proskauer Transfer Motion”). Second, the Baltimore Orioles join in the Proskauer Transfer Motion and also bring a Motion to Transfer Case to the Middle District of Florida Filed by Defendants Baltimore Orioles, Inc. and Baltimore Orioles Limited Partnership (“Baltimore Orioles Transfer Motion”). In these motions, Defendants ask that the entire case be transferred to the Middle District of Florida.

All of the Motions came on for hearing on Friday, February 13, 2015 at 2:00 p.m. Following the Motion hearing, the Court gave Plaintiffs leave to file a proposed amended complaint that included additional named Plaintiffs to address possible defects with respect to personal jurisdiction over the Personal Jurisdiction Defendants. The Court further instructed Plaintiffs to file a supplemental brief addressing the “arising out of” requirement for specific jurisdiction on a team-by-team basis. Plaintiffs have filed a Proposed Second Consolidated Amended Complaint (“SCAC”)¹ adding name Plaintiffs, as well as the supplemental brief requested by the Court; the Baltimore Orioles and the Proskauer PJ Defendants have filed a brief in response in which they assert that Plaintiffs still cannot establish the existence of personal jurisdiction as to the teams that challenge jurisdiction.

For the reasons stated below, the Court GRANTS in part and DENIES in part the Proskaur Motion to Dismiss and GRANTS the Baltimore Orioles' Motion to Dismiss. The Court DENIES the Transfer Motions.²

II. BACKGROUND

A. Overview of Major League Baseball

MLB is an unincorporated association whose members are the thirty MLB Clubs named as defendants in this action. SCAC, ¶ 62. Each MLB Club is affiliated with several Minor League teams, organized into “classes” roughly reflecting the skill levels of the players. Id., ¶ 169. Although some Minor League teams are directly owned by an MLB Club, most Minor League teams are independently owned and operated pursuant to Player Development Contracts (“PDCs”), agreements by which a Minor League club agrees to “affiliate” itself with an MLB Club for a certain time period. Id., ¶ 171.

MLB teams employ a small number of players who play at the highest level, the Major Leaguers. Id., ¶ 146. They also employ a larger number of Minor Leaguers, who the teams acquire through either an amateur draft or free agency. Id., ¶¶ 147, 150. The Minor Leaguers begin at the “Rookie” level and then, ideally, advance to higher levels (Class–A, Advanced Class–A, Double–A and Triple–A), potentially leading to the major leagues. Id., ¶ 169. Many Minor Leaguers do not advance past Class–A. Id.

MLB operates a scouting service known as the Major League Baseball Scouting Bureau (“Scouting Bureau”) that evaluates amateur players on behalf of all the Defendants. Id., ¶ 163. MLB owners created the centralized service in 1974, and it operates under the umbrella of the Office of the Commissioner. Id. The Scouting Bureau hosts tryouts for amateur players seeking to enter the industry, and its scouts attend amateur games throughout the country and in Latin America to develop reports on amateur players. Id.

MLB rules require that all teams use the same uniform player contract (“UPC”) when signing players. Id., ¶ 164. Under the UPC, players receive a salary during the championship season, which lasts approximately five months. Id., ¶¶ 182–83. They are not compensated during the remainder of the year. Id., ¶ 183. The UPC imposes “duties and obligations” that “continue in full force throughout the calendar year,” however. Id. Thus, during the offseason, players are required to participate in spring training (lasting approximately one month) and sometimes in extended spring training and instructional leagues as well. Id., ¶¶ 185–86. Players are also required to maintain “first-class” conditioning throughout the year. Id., ¶ 187.

B. Summary of Plaintiffs' Claims

Plaintiffs are former and current Minor League baseball players who allege that they were paid “illegally low wages during the championship season, no overtime wages, and no wages for work performed outside the championship season.” Id., ¶¶ 19–61, 189. Defendants are the Office of the Commissioner of Baseball and MLB's thirty member franchises. Id., ¶¶ 62–102. Plaintiffs assert twenty state law wage and hour claims on behalf of a number of putative classes (including a California class)³ under Rule 23 of the Federal Rules of Civil Procedure. Id., ¶¶ 103–27. In particular, Plaintiffs assert eight claims under California law, two claims under Florida law, three claims under Arizona law, three claims under North Carolina law, four claims under New York law, three claims under Pennsylvania law, three claims under Maryland law and three claims under Oregon law. They also assert two claims under the FLSA on behalf of themselves and all persons similarly situated since three years before filing of the action. Id., ¶ 128.

III. MOTIONS TO DISMISS

A. Motions

1. Proskauer PJ Defendants

The Proskauer PJ Defendants are ten MLB Clubs that contend they are not subject to personal jurisdiction in California. Proskauer Motion to Dismiss at 1. According to these defendants, they “do not have any Minor League affiliates based in California or that play games in California, and do not have any operations whatsoever in California.” Id. at 4 (citing Dkt. No. 115–1 (“Heller Decl.”) at ¶ 8; Dkt No. 115–2 (“Steward Decl.”) at ¶ 8; Dkt No. 115–3 (“Znidarsic Decl.”) at ¶ 8; Dkt. No. 115–4 (“Corvino Decl.”) at ¶ 8; Dkt No. 115–5 (“Westhoff Decl.”) at ¶ 8; Dkt. No. 115–6 (“Trost Decl.”) at ¶ 8; Dkt No. 115–7 (“Strouse Decl.”) at ¶ 8; Dkt No. 115–8 (“Stroh Decl.”) at ¶ 8; Dkt. No. 115–9 (“Higgins Decl.”) at ¶ 8; Dkt. No. 115–10 (“Jones Decl.”) at ¶ 8)). They assert that their primary connection with California is that “their Major League Baseball Clubs occasionally play baseball games against other California-based Major League Clubs in California.” Id. (citing Heller Decl. at ¶ 7; Steward Decl. at ¶ 7; Znidarsic Decl. at ¶ 7; Corvino Decl. at ¶ 7; Westhoff Decl. at ¶ 7; Trost Decl. at ¶ 7; Strouse Decl. at ¶ 7; Stroh Decl. at ¶ 7; Higgins Decl. at ¶ 7; Jones Decl. at ¶ 7). In particular, the Proskauer PJ Defendants represent that aside from “sporadic travel to California by individual employees and a small number of...