VAN DUZER LANG v. PATIENTS OUT OF TIME

NOT FOR PUBLICATION

UNITED STATES DISTRICT COURT

DISTRICT OF NEW JERSEY

JEANNE VAN DUZER LANG, etal.,

Plaintiffs,

Civil Action No. 20-615 (MAS) (TJB)

MEMORANDUM OPINION

PATIENTS OUT OF TIME, et al.,

Defendants.

SHIPP, District Judge

This matter comes before the Court upon Defendants Patients Out of Time (“POT”), Mary

Lynn Mathre (“Mathre”}, Michael Aldrich, Denis Petro, Elvy Musikka, Irvin Rosenfeld, Melanie

Dreher, and Dustin Sulak’s (collectively, “Defendants”} Motion to Dismiss or, in the Alternative.

to Transfer Venue. (ECF No. 12.) Plaintiffs Jeanne Van Duzer Lang (“Lang”) and Laramie Van

Duzer Silber (“Silber”) (collectively. “Plaintiffs") opposed (ECF No. 16), and Defendants replied

(ECF No. 19). The Court has carefully considered the parties’ submissions and decides the matter

without oral argument pursuant to Local Civil Rule 78.1. For the reasons stated below, the Court

grants in part and denies in part Defendants’ Motion and transfers this matter to the United States

District Court for the Western District of Virginia.

I. BACKGROUND

Defendant POT is a 501(c)(3) non-profit organization incorporated in Virginia. (Compl.

43, Ex. A to Notice of Removal, ECF No. | at *12-38.)' Defendant Mathre is the president and

founding director of POT. (/d. 7 6.) Defendants Aldrich, Petro, Rosenfeld, Dreher, Sulak, and

Musikka are members of POT’s board of directors (the “Board”). (/d. 4] 6-12.) POT’s mission is

to educate health care professionals and the public about the scientific benefits of medical

cannabis. (/d. © 4.) In 2000, POT began to hold biannual conferences. (/d. J 17.) In 2012, POT

declared bankruptcy. (/d. ¥ 18.)

Sometime in 2013, Mathre and Plaintiffs, former POT conference attendees and volunteers,

decided to revitalize POT. (/d. §§ 17, 19.) Silber submitted and presented a formal proposal for a

2014 conference to Mathre and the Board of Directors. (/d. © 19.) After a successful conference in

2014 in Portland, Oregon, Plaintiffs and Mathre met with an accountant and an attorney to discuss

the restructuring of POT to be compliant with federal tax law and to fulfill its mission more

effectively. (/d. J 20.) From these discussions, it was agreed that POT would not produce a 2015

conference to prioritize its restructuring. (/d. £ 21.) In the late summer of 2014, however, Mathre

insisted POT produce a 2015 conference and signed a contract for a venue without Board approval.

J 22.) Unhappy with Mathre’s disregard for process and procedure, Plaintiffs “resigned.”

(id. 7 23.)

In December 2014, Plaintiffs reached an agreement with Mathre that they would return if

(1) Mathre endorsed the goal of moving POT into a professional, compliant organization with

infrastructure and procedures, rather than the flat decision-making exemplified in the summer, and

(2) Mathre became more involved in fundraising efforts. (/d, 4 25.) On behalf of POT, Mathre

' Page numbers preceded by asterisks reference the page numbers listed in the ECF header.

executed two three-month employment contracts with Plaintiffs. (/d. §] 26-30.) Plaintiffs were

given new titles reflecting increased authority and positions alongside Mathre on the Executive

Committee. (/d.) Silber was hired as POT’s Chief Operating Officer at $20.00 per hour, and Lang

was hired as POT’s Chief of Staff and Manager of Special Projects at $20.00 per hour. (/d. T§ 26.

29.) The Board unanimously approved the contracts, (/d. {J 27. 29.)

Upon the expiration of the contracts, Mathre represented to Plaintiffs that Plaintiffs would

receive compensation if they continued to work. (4d. § 34.) Thereafter, Plaintiffs’ responsibilities

quickly expanded beyond those anticipated under the contracts. (/d. 4 35.) To properly maintain

POT’s financials, Silber hired an accountant near her home office in New Jersey. (/d. J 36.)

Plaintiffs organized the 2016 conference in Baltimore, Maryland; the 2017 conference in Berkeley,

California; and the 2018 conference in Jersey City, New Jersey. (/d. $§ 40, 49, 55, 60.)

Following the 2018 conference, Plaintiffs expressed their continued concerns about POT’s

lack of compliance with its bylaws and federal laws, Mathre’s unilateral decision-making, and the

lack of Board membership. (/d. {J 67-78.) On March 13, 2019, Plaintiffs met with Mathre in

Tallahassee. Florida, to discuss the reorganization of POT. (/d. □□ 83-84.) Together, the parties

drafted and signed a memorandum of understanding. acknowledging that POT was non-compliant

with federal laws and setting forth measures POT would take to become compliant. (/d. J] 85-89.)

POT’s 2019 conference was held in Tampa, Florida. (fa. 91.) A Board meeting with

Plaintiffs, Dreher, Sulak, Mathre, and POT’s attorney, Mara Felsen, was scheduled for after the

conference. (id. 91-96.) A day before the Board meeting, however, Mathre cancelled the

meeting, even though a proper Board meeting had not been held for four years. (/d. 4 96.) Plaintiffs,

nonetheless, held an informal meeting in place of the cancelled Board meeting, during which they

laid out the details of Mathre’s malfeasance. (/¢. { 97.) Thereafter, Mathre terminated Plaintiffs on

May 7, 2019. (id. 4 102.)

From 2015 to 2019, Plaintiffs continually relied upon Mathre’s representation that

Plaintiffs would be compensated for their work. (/d. 38-39.) Plaintiffs completed thousands of

hours of work, (id. 4] 42, 44, 50, 52, 62, 64, 92, 94), but were not paid for many hours of that

work, (id. J] 43, 45, St, 53, 63, 65, 93, 95). At all relevant times, Lang maintained a home office

and storage space in New Jersey, (id. 4 13), and Silber maintained a home office in New Jersey,

(id. ¥ 14). Plaintiffs allege that they performed all their duties, stored all POT material in their

possession, and managed POT exclusively in their home office in New Jersey. (/d. J 119.) POT

did not maintain any commercial office space during Plaintiffs’ employment. (/d. { 122.) Plaintiffs

also allege that Mathre has since moved from Virginia to Florida. (/d. J 123.)

On December 19, 2019, Plaintiffs filed suit in the Superior Court of New Jersey, alleging

the following claims against Defendants: (1) violation of the New Jersey Conscientious Employee

Protection Act, N.J. Stat. Ann. §§ 34:19-1 ef seg. (NJCEPA”), (Gd. §§ 125-30); (2) breach of

contract, (id. FY 131-35); (3) promissory estoppel, (id. $9 136-41); (4) unjust enrichment, (id.

142-46); (5) violations of the New Jersey Wage Payment Law, N.J. Stat. Ann. §§ 34:11-4.1 ef

seq. (NJWPL”) and of the New Jersey Wage and Hour Law. N.J. Stat. Ann. §§ 34:11-56.1 ef seg.

(NJWHL”), (fd. §§ 147-50); and (6) violations of the Fair Labor Standards Act, 29 U.S.C.

$§ 201 ef seg. FLSA”), (id. F§ 151-56). On January 17, 2020, Defendants removed the action

to this Court. (Notice of Removal, ECF No. 1.) On February 21, 2020, Defendants moved to

dismiss the Complaint for lack of personal jurisdiction and failure to state a claim or, in the

alternative, to transfer venue to the Western District of Virginia. (See generally Defs.” Moving Br.,

ECF No. 12-1.)

il. LEGAL STANDARD

A. Personal Jurisdiction

For the purposes of a motion to dismiss pursuant to Federal Rule of Civil Procedure

12(b}{2), the “plaintiff must prove by affidavits or other competent evidence that [personal]

jurisdiction is proper.” Metcalfe v. Renaissance Marine, Inc,, 566 F.3d 324, 330 (3d Cir. 2009)

(internal quotation marks and citation omitted). When the district court does not hold an

evidentiary hearing, “the plaintiff need only make a prima facie case of personal jurisdiction and

the plaintiff is entitled to have its allegations taken as true and all factual disputes drawn in its

favor.” Miller Yacht Sales, inc. v. Smith, 334 F.3d 93, 97 (d Cir, 2004),

“A federal court sitting in New Jersey has jurisdiction over parties to the extent provided

under New Jersey state law. New Jersey's long-arm statute provides for jurisdiction coextensive

with the due process requirements of the United States Constitution.” Miller, 384 F.3d at

96 (internal citations omitted). “Thus. parties who have constitutionally sufficient minimum

contacts with New Jersey are subject to suit there.” /d. (internal quotation marks omitted).

A federal district court may exercise two types of personal jurisdiction: general jurisdiction

and specific jurisdiction. O'Connor v. Sandy Lane Hotel 496 F.3d 312, 316-17 (3d Cir. 2007);

see Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 414-15 (1984). General

jurisdiction exists when a defendant's “affiliations with the State are so ‘continuous and

systematic” as to render [it] essentially at home in the forum State.” Daimler AG v. Bauman,

571 U.S. 117, 127 (2014) (quoting Goodyear Dunlop Tires Operations, S.A. v. Brown, 364 US.

915, 919 (2011)). “The ‘paradigm* forums in which a corporate defendant is “at home”... are the

corporation's place of incorporation and its principal place of business.” BNSF Ry. Co. v. Tyrrell,

137 S. Ct. 1549, 1559 (2017) (citing Daimler, 571 U.S. at 137; Goodyear, 564 U.S. at 924). “[I]n

an ‘exceptional case,’ a corporate defendant's operations in another forum “may be so substantial

and of such a nature as to render the corporation at home in that State.’” /d. (quoting Daimler,

371 U.S. at 139 1.19. “[T]he inquiry [in Daimler] ‘calls for an appraisal of a corporation's activities

in their entirety’; *[a] corporation that operates in many places can scarcely be deemed at home in

all of them.”” /d. (third alteration in original).

Specific jurisdiction exists where: (1) the defendant “purposefully directed its activities at

the forum”; (2) the litigation “arise[s] out of or relate[s] to at least one of those activities”; and

(3) the exercise of jurisdiction “comports with fair play and substantial justice.” O'Connor,

496 F.3d at 317 (internal quotation marks and citations omitted). “The defendant need not be

physically located in the state while committing the alleged acts.” A/-Ghena Int'l Corp. v.

Radwhan, 957 F. Supp. 2d 311, 528 (2013) (citing Burger King Corp. v. Rudzewicz, 471 U.S. 462,

476 (1985)). “Nor is specific jurisdiction defeated merely because the bulk of harm occurred

outside the forum.” /d, (citing Keeton v. Hustler Magazine, Inc., 465 U.S. 770, 780 (1984)).

B. Transfer

A case “may be brought in a judicial district in which a substantial part of the events or

omissions giving rise to the claim occurred.” 28 U.S.C. § 1391(b)(2). The test for determining

proper venue under § 1391 is not the defendants” contacts with the district, but the locations of

those events or omissions giving rise to the claim. Cottman Transmission Sys., Inc. v. Martino, 36

F.3d 291, 294 (3d Cir. 1994). Moreover, “events or omissions that might only have some tangential

connection with the dispute in litigation are not enough.” DaimlerChrysler Corp. v. Askinazi,

No. 99-5581, 2000 WL 822449, at *6 (E.D. Pa. June 26, 2000) (citations and internal quotation

marks omitted). The events must have been substantial under § 1391 for venue to be proper. Pa.

Gear Corp. v. Fulton, No. 98-1538, 1999 WL 80260, at *2 (E.D. Pa. Jan. 26, 1999). To determine

if the act which gave rise to the claim is substantial, “it is necessary to look at the nature of the

dispute.” Cottman Transmission Sys., 36 F.3d at 295, “In cases with multiple claifm]s, venue must

be proper as to each claim.” Eddie Kane Steel Prod, Inc. v. Alabama Plate Cutting Co..

No. 18-15167. 2019 WL 3281623. at *3 (D.N.J. July 19. 2019).

A federal district court may transfer a civil action to a different venue under 28 U.S.C.

§ 1404(a) (Section 14047) or 28 U.S.C. § 1406(a) (“Section 14067). The Third Circuit has

explained that “Section 1404(] provides for the transfer of a case where both the original and the

requested venue are proper. Section 1406, on the other hand. applies where the original venue is

improper and provides for either transfer or dismissal of the case.” Jiwnara v. State Farm Ins., Co.,

55 F.3d 873, 878 (3d Cir. 1995).

“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... .”

§ 1404(a). Transfer is appropriate under § 1404(a) if the defendants satisfy two factors: (1) that

venue is proper in the transferee district, and (2) that the transferee district can exercise personal

jurisdiction over defendants. See Shutte v. Armco Steel Corp., 431 F.2d 22, 24 (3d Cir. 1970).

If venue in the requested district is proper, then the Court must analyze a series of private

and public factors to determine whether “on balance the litigation would more conveniently

proceed and the interests of justice be better served by transfer to a different forum.” Jumara,

55 F.3d at 879. Private interests include the plaintiffs’ choice of venue, defendants’ preference,

where the claim arose, convenience of the witnesses. and the extent to which records or other

documentary evidence would be available for production. /d. at 879. Public interests include the

enforceability of any judgment; practical considerations that could make the trial easy, expeditious

or inexpensive; relative administrative difficulty resulting from court congestion; local interest in

deciding the controversy; relative importance of public policies; and familiarity of the trial judge

with the applicable state law in diversity cases. /d. at 879-80. The district court “is vested with a

large discretion” to determine when transfer should be ordered “for the convenience of parties and

witnesses, in the interest of justice.” Solomon vy. Continental Amer. Life Ins., 472 F.2d 1043, 1045

(3d Cir. 1973) {internal quotations and citations omitted).

Section 1406 provides that “[t]he 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.” § 1406(a).

II. DISCUSSION

The Court will transfer this matter to the United States District Court for the Western

District of Virginia. Although the Court has personal jurisdiction over Defendants, for the

convenience of the parties, in the interest of justice, the Court transfers the matter pursuant to

Sections 1404 and 1406,

A. Persona}! Jurisdiction?

To determine whether it has specific jurisdiction over Defendants, the Court must consider

whether Defendants purposefully directed their activities at New Jersey; whether the litigation

arises out of, or is related to, those activities; and whether it would be unreasonable to exercise

personal jurisdiction over Defendants.

Taking Plaintiffs’ allegations as true and construing all factual disputes in Plaintiffs” favor,

the Court finds that Plaintiffs establish that Defendants purposefully directed POT’s activities at

New Jersey by contracting with Plaintiffs, New Jersey residents. knowing that Plaintiffs would

> Because the Court finds that it has specific jurisdiction over Defendants. the Court does not

determine whether general jurisdiction exists.

perform their duties under those contracts in New Jersey. (See Compl. J§ 25. 27, 29.) See, e.g.,

Cornish v. Morris Comme Co., LEC, No. 08-6395, 2009 WL 2169046, at *5 (D.N.J. July 16,

2009) (finding the defendant directed its actions towards New Jersey by obtaining information and

consulting services from a New Jersey citizen). After those initial contracts expired, Mathre

continually represented that Plaintiffs would receive compensation for their services. (Compl.

38-39.) Moreover, Plaintiffs’ claims arise out of the parties’ relationship resulting from these

contracts. (See id. Jf 125-56.) That is, “the causal connection” between Defendants’ activities

directed at New Jersey and Plaintiffs’ claims are “intimate enough to keep the quid pro quo

proportional and personal jurisdiction reasonably foreseeable.” O'Connor, 496 F.3d at 323.

On reply, Defendants do not argue that it would be unreasonable for the Court to exercise

jurisdiction over them. (See generally Defs.’ Reply Br.. ECF No. 19.) Defendants, therefore, fail

to “present a compelling case that the presence of some other considerations would render

jurisdiction unreasonable.” Burger King, 471 U.S. at 477. The Court, accordingly, finds that it may

exercise specific jurisdiction over Defendants without offending due process.

B. Transfer

Defendants argue that venue ts improper and that this matter should be transferred to the

Western District of Virginia under § 1406: and, even if suit is proper in the District of New Jersey,

this matter should nonetheless be transferred under $§ 1404. (Defs.” Moving Br. 56-63.) Plaintiffs

do not provide any argument against transfer in their lengthy opposition, (see generally Pls.”

Opp'n Br., ECF No. 16). even though Plaintiffs were granted leave to file a brief up to sixty-five

pages in length (ECF No. 15).

Here, the Court finds that this action could have been brought in Western District of

Virginia. A substantial part of the events giving rise to Plaintiffs’ claims stem from actions taken

in Virginia—not New Jersey: Plaintiffs’ NJCEPA claim is based on Defendants’ decision to

terminate Plaintiffs” employment for objecting to and reporting on POT’s failure to comply with

fundraising and federal tax law, (Compl. { 126); Plaintiffs’ promissory estoppel claim is based on

Defendants” repeated promises that Plaintiffs would be paid a reasonable salary for continued

work, (id. J 138); Plaintiffs’ unjust enrichment claim is based on the benefits Defendants had

received from Plaintiffs’ production of six conferences, (id. J 144), only one of which was in New

Jersey, (id. § 60); Plaintiffs’ NJWPL and NJWHL claims are based on Defendants’ failure to pay

appropriate wages, (id. J] 149-50); and Plaintiffs’ FLSA claim is based on Defendants’ failure to

pay appropriate wages and failure to maintain proper and accurate records, (id. Jf 154-56). None

of these actions are alleged to have occurred in New Jersey. As to Plaintiffs’ breach of contract

claim, even if Plaintiffs performed their contracts in New Jersey, it is unclear where the contracts

were signed or negotiated. In sum, upon review of the Complaint and Plaintiffs’ submissions,

including Silber’s Affidavit, the Court finds that Plaintiffs* claims could have been brought in the

Western District of Virginia. Moreover, Defendants concede that venue would be proper in the

Western District of Virginia. (Defs.” Moving Br. 57-59.) The Court, accordingly, addresses

transfer pursuant to Sections 1404 and 1406 in turn.

1. Transfer Under § 1404

Here, even if New Jersey is an appropriate venue for Plaintiffs’ contract claim, the Court

transfers the claim under § 1404. As stated above, Western District of Virginia is an appropriate

transferee forum because a substantial part of the events giving rise to Plaintiffs’ claims occurred

within the district and the private and public factors weigh in favor of transfer.

Although Plaintiffs” forum choice—the first private factor—would normally be entitled to

significant deference, Shute, 431 F.2d at 25, the Court finds it appropriate to reduce the amount

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of deference afforded to Plaintiffs’ forum choice because, as discussed above, a substantial part of

the events giving rise to Plaintiffs’ claims occurred within the Western District of Virginia. The

second and third factors—Defendants’ preference and the location where the claims arose—weigh

in favor of transfer. With respect to the convenience of the parties and witnesses, Plaintiffs do not

argue that it would be inconvenient for them to litigate in Virginia. Lastly, the location of books

and records—the sixth factor—is neutral. Given the prevalence of electronically stored

information and technological advances, documents or records can be easily moved electronically

to different venues. Overall, the Court finds the private factors weigh in favor of transfer.

The public factors also weigh in favor of transfer, First. a judgment against Defendants in

Virginia will be enforceable in Virginia. As to the second public interest factor. relevant evidence

is in Virginia. The third public interest factor weighs heavily in favor of transfer because the

District of New Jersey is currently experiencing a judicial emergency and has six judicial

vacancies. while the Western District of Virginia has one. See Current Judicial Vacancies,

https://www.uscourts.gov/judges-judgeships/judicial-vacancies/current-judicial-vacancies (last

visited August 20. 2020). The fourth factor is neutral, as both states have interests over the matter.

Virginia has an interest in the case involving a Virginia corporation, especially since a substantial

amount of the alleged conduct that gave rise to this action occurred in Virginia. Lastly. although a

judge in the District of New Jersey may be more familiar with the applicable state law, given the

relative administrative difficulty resulting from court congestion in the District of New Jersey, on

balance, the public interest factors weigh in favor of transfer.

a Transfer Under § 1406

As stated above, because a substantial part of the events giving rise to Plaintiffs’ non-

contract claims occurred within the Western District of Virginia, and not New Jersey, the Court

finds that venue is improper as to those claims. It is, however, in the interest of Justice to transfer

this matter, rather than to dismiss it. See Goldlawr, Inc. v. Heiman, 369 U.S. 463, 467 (1962)

(“Congress, by the enactment of § 1406(a), recognized that ‘the interest of justice’ may require

that the complaint not be dismissed but rather that it be transferred in order that the plaintiff not be

penalized by .. . “time-consuming and justice-defeating technicalities.*” (citation omitted)).

IV. CONCLUSION

Although the Court has jurisdiction over Defendants, for the convenience of parties and

witnesses and in the interests of justice, the Court transfers this matter to the United States District

Court for the Western District of Virginia. The Court will enter an Order consistent with this

Memorandum Opinion.

si Michael A. Shipp

MICHAEL A. SHIPP

UNITED STATES DISTRICT JUDGE

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