United States District Court, N.D. Illinois, Eastern Division
JIMMY R. NICKS and JAMES EARL PATRICK, individually and on behalf of all persons similarly situated, Plaintiffs,
KOCH MEAT CO., INC., d/b/a KOCH FOODS, KOCH FOODS OF MISSISSIPPI, LLC, and JET POULTRY SERVICES, INC., Defendants.
MEMORANDUM OPINION AND ORDER
ST. EVE, United State District Court Judge.
21, 2016, Plaintiffs Jimmy R. Nicks (“Nicks”) and
James Earl Patrick (“Patrick”), individually and
on behalf of all persons similarly situated, filed a
Collective Class Action Complaint against Defendants Koch
Meat Co., Inc. d/b/a Koch Foods (“Koch Meat”),
Koch Foods of Mississippi, LLC (“Koch Foods of
Mississippi”), and JET Poultry Services, Inc.
(“JET”), seeking relief under the Fair Labor
Standards Act of 1938, 29 U.S.C. § 201, et seq.
(“FLSA”). (R.1). JET moved to dismiss the
Complaint pursuant to Federal Rule of Civil Procedure
12(b)(2) and 12(b)(3) for lack of personal jurisdiction
and/or improper venue. (R.37). Koch Meat and Koch Foods of
Mississippi (collectively, the “Koch Defendants”)
separately moved to dismiss the Complaint on similar grounds.
(R.40). In the alternative to dismissal, all Defendants
request a transfer to the Southern District of Mississippi
pursuant to 28 U.S.C. §§ 1404 or 1406.
Court now considers the Koch Defendants' jurisdiction and
venue challenge. (R.40). For the following reasons, the Court
denies that motion without prejudice to refile after
conducting the limited jurisdictional and venue discovery
FLSA Complaint Allegations
Nicks and Patrick are Mississippi residents who were
“previously employed by Defendants to catch and cage
chickens as . . . member[s] of a live-haul crew[.]”
(R.1, Compl. ¶ 3-4). Plaintiffs allege that the Koch
Defendants operate “one of the largest vertically
integrated poultry processors in the United States, with
locations across Alabama, Georgia, Illinois, Mississippi,
Ohio and Tennessee.” (Id. ¶ 16). As part
of that enterprise, the Koch Defendants engage third-party
contractors-such as JET-to employ chicken catchers-such as
Plaintiffs- for their live-haul crews, who then “travel
to [Koch] farms to capture Koch's chickens and place them
in Koch's cages, for transport to the Koch poultry
processing plants.” (Id. ¶¶ 24-25,
31).According to Plaintiffs, all three
Defendants play a role in hiring live-haul crews, supervising
live-haul crews, and determining and recording “the
piece rate and number of loads captured in order to
compensate the live-haul crews.” (Id.
¶¶ 32-34, 41, 45-46). With respect to compensation
in particular, Plaintiffs allege that “Defendants paid
[them] and the FLSA Collective a piece rate basis, regardless
of the number of hours worked, and failed to pay overtime as
required by federal law.” (Id. ¶ 59).
Accordingly, Plaintiffs now bring a claim for overtime wage
violations against the Koch Defendants and JET as joint
employers under the FLSA. (Id. ¶¶ 47-48,
68, 72-73). Plaintiffs purport to bring this FLSA collective
action on behalf of “[a]ll individuals employed by
[Koch Meat, Koch Foods, and/or JET] as members of live-haul,
chicken catching crews in the United States, and who were
paid on a piece rate and did not receive overtime
compensation from the three years preceding the date of the
filing of this Complaint.” (Id. ¶ 14).
terms of jurisdictional allegations, Plaintiffs allege that
Defendant Koch Meat is “an Illinois corporation
headquartered in Park Ridge, Illinois, with facilities in
Alabama, Georgia, Mississippi, Tennessee, and
Illinois[.]” (Id. ¶ 5). Koch Foods of
Mississippi “is a Mississippi entity headquartered in
Morton, Mississippi, with processing plants in
Mississippi.” (Id. ¶ 7). JET, meanwhile,
“is a Mississippi corporation headquartered in Summit,
Mississippi, providing staffing of live-haul chicken-catcher
crews for the Koch Defendants.” (Id. ¶
Mississippi citizens, Defendants JET and Koch Foods of
Mississippi challenge the Court's personal jurisdiction
over them under Federal Rule of Civil Procedure 12(b)(2).
(R.37, R.40). JET has submitted an affidavit from its
Director and Vice President, attesting that JET has never
advertised in Illinois, conducted or solicited business in
Illinois, or appointed an agent for service of process in
Illinois. (R.63-1, Corrected Armstreet Decl. ¶¶
5-7). Instead, all of JET's “employees, officers,
agents and shareholders reside in Mississippi, ” where
JET manages “a contract with Koch Farms of Mississippi
to catch chickens in Morton, Mississippi.”
(Id. ¶¶ 9-11, 15). Koch Farms of Mississippi
pays JET “for the chickens [JET's] workers catch in
Mississippi[, ]” while JET then “pays its
workers, who are Mississippi residents, in
Mississippi.” (Id. ¶¶ 12-13).
According to its employment files, “the named
Plaintiffs and each putative collective action member who has
filed a consent in this action was also a resident of
Mississippi when hired by [JET].” (Id. ¶
14). JET maintains its pay records and employment files in
Mississippi. (Id. ¶ 16).
Foods of Mississippi, too, has submitted several employee
affidavits to contest personal jurisdiction in Illinois.
(R.42-1). In particular, Lance Buckert-Chief Financial
Officer of Koch Foods Incorporated, which is the sole member
of Koch Foods of Mississippi and the sole stockholder of Koch
Meat-attested that Koch Foods of Mississippi does not: (i)
have an office in Illinois; (ii) own real property in
Illinois; (iii) employ anyone in Illinois; (iv) pay income or
property taxes in Illinois; or (v) have a telephone listing
or phone number in Illinois. (R.42-1, Buckert Decl.
¶¶ 2-9). In addition, Laney White, Koch Foods of
Mississippi's “Complex Manager, ” attested
that its poultry processing business, including the operation
of a slaughter plan in Morton, Mississippi (the
“Slaughter Plant”), is limited to the State of
Mississippi. (R.42-1, White Decl. ¶¶ 4-8). Ronnie
Joe Keyes, its “Live Production Manager, ”
meanwhile, explained that he “oversees the production
of live broiler chickens before they are delivered to the
Slaughter Plant for processing” - commonly referred to
as “grow-out” operations. (R.42-1, Keyes Decl.
¶ 5). As part of the grow-out operations, JET
“catches broiler chickens on the growers' farms and
places them in cages that are loaded onto poultry transport
vehicles for delivery to the Slaughter Plant.”
(Id. ¶ 7). All of these “live-haul
services related to chickens supplied to the Slaughter Plant
for processing take place in Mississippi.”
(Id. ¶ 8). In addition, Keyes appears to be a
signatory on the “Poultry Catcher Agreement”
between JET and “Koch Farms of Mississippi, LLC.”
(Compare Id. with R.63-1 at 4).
part-although not contesting personal jurisdiction in
Illinois-Koch Meat “does not have any business records
relating to any services provided” by JET, and
“does not control the pay policies or the day-to-day
operations” of Koch Foods of Mississippi. (R.42-1,
Buckert Decl. ¶ 12; R.62-4, Buckert Supplemental Decl.
¶ 4). Koch Meat, moreover, does not “engage in any
live haul operations” or “own any facilities that
process any live chickens.” (R.42-1, Buckert Decl.
motion to dismiss for lack of personal jurisdiction pursuant
to Rule 12(b)(2) tests whether a federal court has personal
jurisdiction over a defendant. See Fed. R. Civ. P.
12(b)(2); Central States v. Phencorp. Reins. Co.,
440 F.3d 870, 875 (7th Cir. 2006). In analyzing a Rule
12(b)(2) motion, courts may consider matters outside of the
pleadings. See Purdue Research Found. v.
Sanofi-Synthelabo, S.A., 338 F.3d 773, 782 (7th Cir.
2003). Without the benefit of an evidentiary hearing, the
plaintiff “bears only the burden of making a prima
facie case for personal jurisdiction.” uBID, Inc.
v. GoDaddy Grp., Inc., 623 F.3d 421, 423-24 (7th Cir.
2010). Under such circumstances, courts take “the
plaintiff's asserted facts as true and resolve any
factual disputes in its favor.” Id. Where the
plaintiff fails to refute facts contained in the
defendant's affidavit, however, courts accept those facts
in the affidavit as true. GCIU-Employer Ret. Fund v.
Goldfarb Corp., 565 F.3d 1018, 1020 n.1 (7th Cir. 2009).
Rule 12(b)(3), a party may move for dismissal of an action
that is filed in an improper venue. See Fed.R.Civ.P.
12(b)(3). Once a defendant challenges the plaintiff's
choice of venue, the plaintiff bears the burden of
establishing that it filed its case in the proper district.
See Gilman Opco LLC v. Lanman Oil Co., No.
13-CV-7846, 2014 WL 1284499, at *2 (N.D. Ill. Mar. 28, 2014).
Under Rule 12(b)(3), “the district court assumes the
truth of the allegations in the plaintiff's complaint,
unless contradicted by the defendant's
affidavits.” Deb v. SIRVA, Inc., No. 14-2484,
2016 WL 4245497, at *5 (7th Cir. Aug. 11, 2016) (emphasis in
original); see also Faulkenberg v. CB Tax Franchise Sys.,
LP, 637 F.3d 801, 809-10 (7th Cir. 2011) (courts may
consider matters outside of the pleadings in deciding a venue
motion). Against a Rule 12(b)(3) challenge, the court must
resolve any factual disputes and draw all reasonable
inferences in the plaintiff's favor. See ...