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Holmes v. Sid'S Sealants, LLC

United States District Court, W.D. Wisconsin

August 31, 2017

ERIC HOLMES, on behalf of himself and all others similarly situated, Plaintiff,



         Plaintiff Eric Holmes alleges that he and a group of similarly situated workers were deprived of wages and overtime pay by defendants Sid Arthur and his two companies, Sid's Sealants, LLC, and North Shore Restoration, LLC. Plaintiff brings a collective action under 29 U.S.C. § 216(b) of the Fair Labor Standards Act (“FLSA”), as well as claims under Wisconsin law. Before the court is a renewed motion to dismiss or transfer this action in which defendants assert if the action is allowed to proceed at all, then it should be venued in the Eastern District of Wisconsin where all of the parties and counsel reside. (Dkt. #19.) Because venue is proper in this district and any arguable inconvenience of litigating this case in the Western District is outweighed by the deference due plaintiff's choice of forum, the court will deny defendants' motion.


         Plaintiff Holmes resides in Milwaukee, Wisconsin, where the principal courthouse for the Eastern District is located. Nevertheless, Holmes elected to bring his claim for wage theft and prevailing wage violations in the Western District of Wisconsin, whose principal courthouse is in Madison, roughly 80 miles away. In support of his choice of venue, Holmes asserts that he and other employees performed a substantial amount of work in the Western District on behalf of the defendants, at least some of which contributed to their claims in this case. (Am. Compl. (dkt. #17) ¶ 4.)

         Even so, both corporate defendants share a primary business address in Port Washington, Wisconsin, not far from Milwaukee and squarely within the Eastern District. Moreover, company policy is set at those headquarters, and all payroll and time-keeping records are made and stored there. (Aff. of Sidney Arthur (dkt. #11) ¶ 4.) Defendant Arthur also resides in Port Washington, and counsel for both parties maintain offices within walking distance of the Eastern District courthouse in Milwaukee.

         Port Washington is 103 miles from Madison and 27 miles from Milwaukee, according to Google Maps. The drive from Port Washington to Madison takes approximately one hour and 40 minutes; Port Washington to Milwaukee takes about 30 minutes.


         I. Motion to Dismiss

         There is little merit in defendant's motion to dismiss this action for improper venue under Fed.R.Civ.P. 12(b)(3). When all defendants are residents of one state, venue is proper in any district where a defendant resides. 28 U.S.C. § 1391(b)(1). A corporation “resides” in a district when its contacts in that district would suffice to establish personal jurisdiction if that district were a separate state. 28 U.S.C. § 1391(d). Thus, in a state with multiple judicial districts, such as Wisconsin, venue is proper in any district where a corporation would be subject to personal jurisdiction if that district were a separate state. KM Ents., Inc. v. Global Traffic Techs., Inc., 725 F.3d 718, 724 (7th Cir. 2013); see also Fabio v. Diversified Consultants, Inc., No. 13-cv-524, 2014 WL 713104, at *5 (W.D. Wis. Feb. 25, 2014) (accepting the parties' argument that “venue for suits against corporations is proper in a district in which a corporation would otherwise be subject to personal jurisdiction”) (internal quotation marks omitted). While the plaintiff bears the burden of establishing jurisdiction, the court resolves all disputes concerning relevant facts in the plaintiff's favor. Purdue Research Found. v. Sanofi-Synthelabo, S.A., 338 F.3d 773, 782 (7th Cir. 2003). Given that there is no dispute that defendant Sid Arthur does not reside in the Western District, plaintiff must demonstrate that this court has personal jurisdiction over at least one of the corporate defendants to defeat the motion to dismiss for improper venue.

         Citing KM Enterprises, both parties devote a portion of their briefs to disputing the scope and applicability of Wisconsin's long-arm statute to defendants, rather than focusing on due process. However, applying this test, which emerged in the diversity context, to a case in which all parties reside in Wisconsin is pointless since doing so renders the first element superfluous here. 725 F.3d at 723. In fact, this case need not involve Wisconsin's long-arm statute at all, since it is but one avenue of demonstrating amenability to process under Rule 4. Swaim v. Moltan Co., 73 F.3d 711, 719-20 (7th Cir. 1996).[2] Even if the court were to conduct the analysis along those lines, the result would remain the same since that statute authorizes personal jurisdiction to the maximum extent permitted by due process. See Felland v. Clifton, 682 F.3d 665, 678 (7th Cir. 2012) (holding that the Wisconsin long-arm statute is generally coextensive with due process).

         Federal Rule of Civil Procedure 4 states that “[s]erving a summons . . . establishes personal jurisdiction over a defendant . . . who is subject to the jurisdiction of a court of general jurisdiction in the state where the district court is located.” Fed.R.Civ.P. 4(k)(1)(A). Wisconsin state courts of general jurisdiction have personal jurisdiction over individuals domiciled within the state and over domestic corporations. Wis.Stat. § 801.05(1). Because defendants in this case comprise two domestic Wisconsin corporations and one individual domiciled in Wisconsin, they are subject to the personal jurisdiction of the state courts under the state's jurisdictional statute. It follows from Rule 4 that service of summons establishes personal jurisdiction in any district court based in Wisconsin. Defendants are, therefore, amenable to process in the Western District of Wisconsin.

         The separate determination as to this court's exercise of personal jurisdiction over defendants for purposes of due process generally is only a slightly closer question because the Western District of Wisconsin is treated like a separate state from its sister district to the east. See 28 U.S.C. § 1391(d); KM Ents., 725 F.3d at 724; De Ortiz, 910 F.2d at 381. To satisfy due process, plaintiff must prove that: (1) defendants have purposefully availed themselves of the privilege of conducting business in the district or purposefully directed their activities here; (2) the alleged injury has arisen from defendants' forum-related activities; and (3) the exercise of jurisdiction comports with traditional notions of fair play and substantial justice.[3] Felland, 682 F.3d at 673 (internal quotation marks omitted).

         First, taking the uncontested facts in the complaint as true, defendants have purposefully availed themselves of the privilege of conducting business in the Western District. Although the bulk of the companies' work occurs in the Eastern District, their employees appear to have travelled extensively to do work at far-flung jobsites. (Am. Compl. (dkt. #17) ¶¶ 17-23.) According to plaintiff, a substantial amount of that work performed on these excursions occurred in the Western District. (Id. at ¶ 4.) Although none of the defendants maintain a normal place of business within the Western District, “lack of physical presence in the forum . . . is not determinative of personal jurisdiction.” Fabio, 2014 WL 713104, at *3 (brackets omitted) (citing Daniel J. Hartwig Assocs., Inc. v. Kanner, 913 F.2d 1213, 1219 n.3 (7th Cir. 1990)). Because the defendants voluntarily conducted business in the Western District, therefore, the first due process element is satisfied.

         The second element of the due process test is also satisfied. As discussed above, plaintiff asserts that a substantial amount of work and travel time took place in the Western District. Those unpaid (or underpaid) hours form part of the claims in this case. Although the amount of work and travel done in the Western District may be minor relative to the hours spent in the Eastern District, the fact that a smaller proportion of the alleged wrongful activity occurred in this district does not remove personal jurisdiction. Cf. Sentry Select Ins. Co. v. McCoy Corp., 980 F.Supp.2d 1072, 1076 (W.D. Wis. 2013) (“Nowhere in the Wisconsin law or due process does personal jurisdiction hinge upon an analysis of the percentage of defendant's own sales in the forum state.”). The only time when the district ...

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