Williams v. MJC Acquisition, LLC
| Decision Date | 22 June 2020 |
| Docket Number | CAUSE NO. 1:20-cv-68 DRL-SLC |
| Parties | AMY WILLIAMS, Plaintiff, v. MJC ACQUISITION, LLC, Defendant. |
| Court | U.S. District Court — Northern District of Indiana |
Amy Williams filed this action in the United States District Court for the Southern District of West Virginia seeking unpaid wages under the Fair Labor Standards Act and state law. On February 6, 2020, then-presiding Judge Robert C. Chambers ordered the case transferred to this district. Ms. Williams asks this court to send it back so that Judge Chambers can reconsider the transfer or alternatively asks this court to reconsider the transfer order. Because her claims arise from or relate to a contract containing a valid and reasonable forum selection clause directing any federal suit to the Northern District of Indiana, the court denies her motion.
Neither party objects to the facts in the transfer order, so the court adopts its findings for purposes here. In March 2018, Ms. Williams began working as a salesperson for MJC Acquisition, LLC, d/b/a Matilda Jane Clothing (MJC). MJC is an Indiana corporation that primarily sells clothing for women and girls through its network of "Trunk Keepers," or individuals who purchase inventory to sell to their personal networks. This business model, often referred to as multi-level marketing (MLM), is a subset of direct sales in which salespeople can earn income through not only product sales to consumers but also recruitment of additional salespeople. "Trunk Keepers" are commonly classified as independent contractors.
When Ms. Williams joined MJC, the company employed thousands of people. She was recruited by a friend and experienced Trunk Keeper on the promise that she would be able to work from home and spend more time with her children. Before working with MJC, Ms. Williams was required to sign an electronic copy of the Matilda Jane Clothing Independent Trunk Keeper Agreement, with both MJC and Ms. Williams as parties to the contract. ECF 44-1. The six-page agreement includes a list of policies and procedures. It also contains a choice-of-law and forum selection clause:
GOVERNING LAW/VENUE. This Agreement shall be governed by, construed, and enforced in accordance with the laws of the State of Indiana, without reference to its conflict of laws rules. The parties agree that any controversies of any nature whatsoever arising out of or relating to this Agreement, shall be subject to the exclusive jurisdiction of the state or federal courts having jurisdiction over Allen County, Indiana, and Allen County, Indiana, shall be the exclusive jurisdiction and venue for any disputes, actions, or lawsuits arising out [of] or relating to this Agreement and you wave [sic] any argument related to jurisdiction or forum non conviens [sic]; except that the Company may choose, at its discretion, to file any action for your breach of Sections 6.1 through 6.7 in a court in a state or county where You can be found.
Id. at 11 ¶ 7.4. Ms. Williams electronically signed the agreement on June 29, 2018.
To begin, Ms. Williams paid approximately $3,000 for an initial supply of clothing samples, order forms, tags, clothing racks, and other supplies. Over the course of the next six months, she spent approximately $8,000 more on additional samples and supplies. To sell her merchandise, she used social media sites to create groups of buyers and to hold virtual trunk sales. Despite working full time for approximately six months, she says she only earned about $1,000. Faced with this low income, she stopped selling the merchandise in October 2018.
On September 9, 2019, Ms. Williams filed this lawsuit against MJC in the Southern District of West Virginia. She argued that MJC violated the Fair Labor Standards Act, 29 U.S.C. § 201 et seq., and the West Virginia Minimum Wage and Maximum Hours Standards for Employees, W. Va. Code § 21-5C-1 et seq. Essentially, she says she was an employee rather than an independent contractor, so she is entitled to damages for unpaid wages. On February 6, 2020, the West Virginia district court transferredthe case here. Ms. Williams thereafter requested that the case be sent back. She had already voluntarily dismissed Matilda Jane, leaving only MJC as defendant.
A Rule 54(b) motion for reconsideration allows this court to reconsider any non-final order, such as an order transferring venue, "at any time before the entry of a judgment adjudicating all the claims and all the parties' rights and liabilities." Galvan v. Norberg, 678 F.3d 581, 587 (7th Cir. 2012). Ordinarily, a motion for reconsideration is decided by the judge who made the original ruling.
When a party seeks reconsideration of an order transferring a case to another district and that case has already been transferred, however, a unique situation arises to permit another district judge to reconsider the previous district judge's order. Once the transfer occurs, the transferor court loses jurisdiction over the case. Jones v. InfoCure Corp., 310 F.3d 529, 533 (7th Cir. 2002); Starnes v. McGuire, 512 F.2d 918, 924 (D.C. Cir. 1974) (en banc). Accordingly, as a practical matter, court clerks often retain case files until a sufficient period of time has passed in which a party might seek reconsideration. See In re Nine Mile Ltd., 673 F.2d 242, 243 (8th Cir. 1982); Semro v. Halstead Enters., Inc., 619 F. Supp. 682, 683 (N.D. Ill. 1985). When that doesn't happen, the party seeking retransfer can request the transferee court to transfer the case back. See Capstone Int'l, Inc. v. Univentures, Inc., 2011 U.S. Dist. LEXIS 129745, 5 (N.D. Ind. Nov. 8, 2011) (DeGuilio, J.).
This case was transferred here a mere four days after the order granting transfer, so the court has the authority to reconsider Judge Chambers' order. See Christianson v. Colt Indus. Operating Corp., 486 U.S. 800, 816-17 (1988). The court's discretion in reconsidering the order is significantly limited nevertheless.
First, the court adheres to the law of the case doctrine. Though the court "has the power to revisit prior decisions of its own or of a coordinate court in any circumstance," it "should be loathe to do so in the absence of extraordinary circumstances such as where the initial decision was 'clearlyerroneous and would work a manifest injustice.'" Christianson, 486 U.S. at 817 (quoting Arizona v. California, 460 U.S. 605, 618 n.8 (1983)). This rule applies especially to those decisions involving transfer because courts don't want to "send litigants into a vicious circle of litigation." Id. at 816; see In re Mathias, 867 F.3d 727, 730 (7th Cir. 2017); United States v. Wyatt, 672 F.3d 519, 523 (7th Cir. 2012); see also Moses v. Bus. Card Exp., Inc., 929 F.2d 1131, 1137 (6th Cir. 1991) (). Generally, then, this court shouldn't "respond by batting the suit back again." Wyatt, 672 F.3d at 523.
Second, the statute governing the transfer order (28 U.S.C. § 1404) gave the West Virginia district court broad discretion:
For 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 or to any district or division to which all parties have consented.
28 U.S.C. § 1404(a). Districts court have "broad discretion to grant or deny a motion to transfer under § 1404(a)." Heller Fin., Inc. v. Midwhey Powder Co., Inc., 883 F.2d 1286, 1293 (7th Cir. 1989). Together, the law of the case doctrine and the district court's broad discretion under 28 U.S.C. § 1404(a) presents an uphill battle to reverse the transfer order here. See In re Mathias, 867 F.3d at 730.
At the outset, the court denies the request to retransfer this case for the West Virginia district court to reconsider its order. To do so would be inefficient, force the litigants into an unenviable circle of litigation, and begin the jurisdictional ping-pong that should be avoided. The court instead turns to the request to reconsider the transfer order.
The transfer order relied on the forum selection clause pointing to this federal venue. The enforceability of forum selection clauses in the § 1404(a) context was recently addressed by the United States Supreme Court in Atl. Marine Const. Co., Inc. v. U.S. Dist. Court for W. Dist. of Tex., 571 U.S. 49 (2013). A "valid forum-selection clause [should be] given controlling weight in all but the most exceptional cases." Id. at 63 (quoting Stewart Org., Inc. v. Ricoh Corp., 487 U.S. 22, 33 (1988) (Kennedy,J., concurring)); see also M/S Bremen v. Zapata Off-Shore Co., 407 U.S. 1, 10 (1972) (). When the parties have agreed to a valid forum selection clause, the plaintiff's choice of forum "merits no weight," and she instead has the burden to establish that "transfer to the forum for which the parties bargained is unwarranted." Atl. Marine, 571 U.S. at 63. So Atlantic Marine directs the court to determine whether the forum selection clause is valid, and, even if valid, whether Ms. Williams has met her burden establishing the transfer to this district was unwarranted. Federal law governs the validity of a forum selection clause in § 1404(a) disputes. See IFC Credit Corp. v. Aliano Bros. Gen. Contractors, Inc., 437 F.3d 606, 608 (7th Cir. 2006).
Ms. Williams invites a preliminary argument. She says the forum selection clause shouldn't apply because this case doesn't arise from her employment contract but instead relies only on federal and state statutory promises of minimum wage. This argument is hogwash. The forum selection clause states that "any controversies of any nature whatsoever arising out of or relating to" the Trunk Keeper Agreement must be brought here. The language "arises from or relates to" remains the broadest of language. See Gore v. Alltel Commc'ns, LLC,...
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