If while on FMLA my supervisor wants to demote and transfer me to a different location, what kind of legal action may I take?

The FMLA requires that upon return from FLMLA leave, you be returned to the same job or an equivalent position.  You may not be subjected to a materially adverse employment action, such as a demotion.  Therefore, if you are demoted, you have a right to bring a claim under the FMLA in federal court.  Your damages may be limited to any wages denied or lost due to the violation, plus you may be able to recover attorneys fees.