EAST ST. LOUIS – Great Clips salon owners who voluntarily dismissed a lockdown suit in Colorado and filed it in Madison County should have kept it in Colorado, U.S. District Judge Stephen McGlynn ruled on May 27.
He transferred a complaint of Holtzman Enterprises, owner of about 50 salons in Colorado and Missouri, proposing a class action against Continental Casualty.
McGlynn presided because Continental removed the complaint from Madison County circuit court to U.S. district court.
He wrote that a plaintiff’s choice of forum is entitled to deference, but less deference when the choice isn’t the plaintiff’s home.
He found Holtzman Enterprises is a Missouri corporation with its principal place of business in Westminster, Colo.
He also found Continental issued a commercial policy to Holtzman Enterprises at a Colorado address through a Missouri agent.
“The employees that faced hardship and fear are mainly in Colorado and Missouri,” he wrote.
Kevin Hannon of Denver filed the original action in Colorado district court, alleging violation of Colorado consumer law and breaches of contract and good faith.
He claimed there were more than 100 class members and the amount in controversy exceeded $5 million.
He claimed Colorado venue was proper, “because a substantial part if not all of the acts and omissions complained of in this action took place in this district.”
Continental moved to dismiss the complaint on Sept. 11, claiming coverage applied when direct physical loss or damage caused suspension of operations.
Continental counsel Andrew Glenn of Denver claimed Colorado consumer law expressly bars class actions.
He prepared a table showing damages around $3.7 million plus extra expenses, income after resumption of operations, punitive damages, and attorney’s fees.
On Sept. 22, Holtzman Enterprises voluntarily dismissed the complaint.
It surfaced in Edwardsville in November, with Mark Goldenberg as lead counsel.
Claims under Colorado consumer law remained, as did claims under insurance codes of Missouri and Colorado.
Continental removed it in December on the basis of diverse citizenship, and moved to dismiss it in January.
In April, McGlynn ordered the parties to show cause why he shouldn’t transfer it.
He wrote that upon reading the pleadings, it appeared the districts of Colorado and Northern Illinois were more appropriate.
Continental has headquarters in Chicago.
In response, Holtzman Enterprises recommended Northern Illinois.
Continental recommended Colorado and alternatively expressed preference for Southern Illinois over Northern Illinois.
McGlynn found relevant factors favored Colorado in a case involving Colorado law, residents, and businesses.
Joseph Guffey of Husch Blackwell in St. Louis and colleagues David Timmons of Dallas and Joshua Grabel of Phoenix represented Continental.