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ESI/Employee Solutions, L.P. v. City of Dallas

United States District Court, E.D. Texas, Sherman Division

October 31, 2019

ESI/EMPLOYEE SOLUTIONS, L.P., HAGAN LAW GROUP L.L.C, and STATE OF TEXAS
v.
CITY OF DALLAS; T.C. BROADNAX, in his official capacity as City Manager of the City of Dallas; and BEVERLY DAVIS in her official capacity as Director of the City of Dallas Office of Equity and Human Rights

          MEMORANDUM OPINION AND ORDER

          SEAN D. JORDAN, UNITED STATES DISTRICT JUDGE.

         Before the Court is Defendants City of Dallas, T.C. Broadnax, and Beverly Davis's (collectively “the City”) Motion to Transfer Venue. (Dkt. #10). The Motion requests that the Court transfer this case to the Northern District of Texas-Dallas Division. The Plaintiffs, ESI/Employee Solutions, L.P. (“ESI”), Hagan Law Group, L.L.C. (“Hagan”), and the State of Texas, filed a Response in Opposition to the Motion (Dkt. #27), to which the City filed a Reply (Dkt. #31). After a hearing on the matter on October 8, 2019, the parties filed supplemental briefing. (Dkt. #45-46). The Court, having considered the Motion, responses, record, and applicable law, DENIES the Motion. The Court further DENIES as moot the City's Supplemental Motion to Change Venue. (Dkt. #45).

         I. Background

         This case arises from the enactment of a municipal ordinance (“the Ordinance”) by the City of Dallas on April 24, 2019, that requires certain employers to provide paid sick leave to employees working within Dallas. (Dkt. #1); Dall. City Code § 20-4(a). The Ordinance, which became effective for “medium or large employers” on August 1, 2019, and will become effective for “small employers” on August 1, 2021, requires employers to grant one hour of paid sick leave for every thirty hours worked by an employee within Dallas, regardless of the employer's location.[1] Id. § 20-4(a)-(b). The Ordinance caps the amount of paid sick leave for each employee working in Dallas at sixty-four hours per year for medium or large employers and forty-eight hours per year for small employers, although employees with a collective bargaining agreement may bargain to modify the yearly cap. Id. § 20-4(c)(1)-(2), (e). The Ordinance also includes administrative and reporting requirements for employers related to the sick-leave time. Id. § 20-7. Failure to comply with the Ordinance will result in a fine. Id. § 20-11(a).

         The Plaintiffs include the State of Texas and two Collin County-headquartered employers with employees who perform work in Dallas. The Plaintiffs claim that the Ordinance is preempted by state law and, therefore, violates the Texas Constitution. (Dkt. #1). The employer-plaintiffs also claim that the Ordinance violates their constitutional rights to freedom of association, freedom from unreasonable searches and seizures, and equal protection under the law. (Dkt. #1).

         The City has filed a Motion to Transfer Venue. (Dkt. #10). In its Motion and at the venue hearing, the City contested venue in the Eastern District of Texas as improper. See (Dkt. #10 at 2- 4) (stating in a section titled “Plaintiffs Failed to Allege Proper Venue” that “allegations for venue are unsupported and unsustainable”); (Dkt. #31 at 1) (arguing in a section titled “Plaintiffs Failed to Allege Proper Venue” that venue is improper under 28 U.S.C. § 1391(b)(2)). The City also made an alternative argument for a convenience transfer under 28 U.S.C. § 1404(a). In its supplemental briefing, however, the City has affirmatively abandoned its improper venue arguments and asks only for a § 1404(a) convenience transfer to the Northern District of Texas-Dallas Division. (Dkt. #45). Accordingly, the Court will address only the issue of whether a § 1404(a) convenience transfer is merited.

         II. Legal Standards

         Venue statutes “are drawn with necessary generality and usually give a plaintiff a choice of courts, so that he may be quite sure of some place in which to pursue his remedy.” Gulf Oil Corp. v. Gilbert, 330 U.S. 501, 507, 67 S.Ct. 839, 91 L.Ed. 1055 (1947). Although “a plaintiff has the privilege of filing his claims in any judicial division appropriate[, ] . . . § 1404(a) tempers the effects of the exercise of this privilege” by allowing courts to transfer a case that subjects the defendant to a venue that is inconvenient under its terms. In re Volkswagen of Am., Inc., 545 F.3d 304, 313 (5th Cir. 2008) (en banc) [hereinafter Volkswagen II]. A court has “broad discretion in deciding whether to order a transfer.” Id. at 311.

         Section 1404(a) states that, “[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).[2] Under § 1404(a), the moving party must first establish that the case might have been brought in the prospective transferee district. See Volkswagen II, 545 F.3d at 312. A case “might have been brought” in a district if venue is proper there. See id. (citing 28 U.S.C. § 1391). Venue is determined under the general venue statute where the cause of action alleged in a case does not implicate a special venue statute. Id. Under the general venue statute, venue is proper in:

(1) a judicial district in which any defendant resides, if all defendants are residents of the State in which the district is located;
(2) a judicial district in which a substantial part of the events or omissions giving rise to the claim occurred . . .; or
(3) if there is no district in which an action may otherwise be brought as provided in this section, any judicial district in which any defendant is subject to the court's personal jurisdiction with respect to such action.

28 U.S.C. § 1391(b).

         After establishing proper venue in the prospective transferee district, the moving party must “clearly demonstrate” that transfer would be convenient for the parties and witnesses. See Volkswagen II, 545 F.3d at 312, 315. Convenience is “clearly demonstrate[d]” when the movant overcomes a “significant burden . . . to show good cause for the transfer.” Id. at 314 n.10. As the Fifth Circuit has explained, “when the transferee venue is not clearly more convenient than the venue chosen by the plaintiff, the plaintiff's choice should be respected.” Id. at 315.

         The convenience analysis turns on the application of private and public interest factors set forth in Gilbert. Id. The private interest factors are:

(1) the relative ease of access to sources of proof;
(2) the availability of compulsory process to secure the ...

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