Agapito v. Amir Ram Bagels, Inc.
- Stewart Aaron
- 1:18-cv-08079-SDA
- U.S. District Court · Southern District of New York
- 5
In Agapito v. Amir Ram Bagels, Inc., Magistrate Judge Aaron denied venue transfer and denied as moot plaintiffs’ severance motion.
The ruling kept the action in the Southern District of New York, affecting the plaintiffs, the three corporate defendants that had filed for bankruptcy, and the individual defendants. It denied the requested transfer and left the plaintiffs’ severance motion denied as moot.
What happened
Agapito v. Amir Ram Bagels, Inc. involves wage claims under federal and New York law brought by Jose Luis Agapito and MD Mazharul Islam. Three corporate defendants filed for bankruptcy in the Eastern District of New York, and the defendants asked to move the case there.
The defendants argued that transferring the case would allow it to be referred to the bankruptcy court. The plaintiffs opposed transfer and sought to separate claims connected to the bankrupt companies so the case could continue against the individual defendants.
Magistrate Judge Stewart D. Aaron denied the transfer motion because the claims did not arise under bankruptcy law and the defendants did not show that the case could have been filed in the Eastern District. He denied the severance motion as moot because the case would proceed against the individual defendants.
The detailed version
- Agapito v. Amir Ram Bagels, Inc. · No. 1:18-cv-08079-SDA
- Stewart Aaron
- Oct. 31, 2020
Background
Jose Luis Agapito and MD Mazharul Islam brought this proposed collective and class action against Amir Ram Bagels, Inc., LX Avenue Bagels, Inc., Tal On 1st Inc., Imanuel Halon, Mohammed Kamal, Amir Ram, and Hossam Zebib. They alleged violations of the Fair Labor Standards Act and New York Labor Law.
Amir Ram Bagels, LX Avenue Bagels, and Tal On 1st filed for bankruptcy in the Eastern District of New York. The defendants then moved to transfer the lawsuit from the Southern District of New York to the Eastern District so that it could be referred to the bankruptcy court there. The plaintiffs separately moved to sever claims connected to the debtor defendants while the bankruptcy proceedings continued.
Transfer Under the Bankruptcy Venue Statute
The defendants first relied on 28 U.S.C. § 1412, which permits a district court to transfer a case or proceeding under Title 11 when transfer is in the interest of justice or for the parties’ convenience. The court explained that claims arising under Title 11 include claims made under a provision of the Bankruptcy Code. It also considered the related category of “core proceedings,” which includes matters arising under the Bankruptcy Code or arising in a bankruptcy case.
The court held that this wage-and-hour action was not a core proceeding because the plaintiffs’ claims did not owe their existence to the Bankruptcy Code. The defendants’ argument that the action was merely related to the bankruptcy proceedings was insufficient. The court therefore found that transfer under § 1412 was not warranted.
Transfer Under the General Venue Statute
The defendants alternatively sought transfer under 28 U.S.C. § 1404(a). Because the plaintiffs did not consent, the defendants had to show that the action could originally have been brought in the Eastern District and that transfer was supported by clear and convincing evidence.
The court found that the defendants did not address the threshold question of whether the Eastern District was a proper place to bring the action. Instead, they argued only that the factors generally considered for a venue transfer favored the Eastern District. The defendants therefore did not meet their burden. The court also noted that venue did not appear to lie in the Eastern District because the events giving rise to the claims arose in the Southern District.
Severance Motion and Disposition
Because the court denied the transfer motion, the case would proceed against the individual defendants in the Southern District. The court therefore found the plaintiffs’ motion to sever moot. Magistrate Judge Stewart D. Aaron denied the defendants’ motion to transfer venue and denied as moot the plaintiffs’ motion to sever. The parties were ordered to meet and confer and submit a joint letter, or separate proposals, concerning a schedule for the case.
Read the full 5-page opinion on CourtListener, the free public archive maintained by the Free Law Project.