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holding that plaintiff's choice is entitled to less weight because plaintiff was "not a resident of the Southern District of New York"
Summary of this case from Samson Lift Technologies v. Jerr-Dan CorporationOpinion
04 Civ. 9404 (NRB).
July 25, 2005
MEMORANDUM AND ORDER
Plaintiff Brasseler USA Dental, L.L.C. ("Brasseler") brought this action pursuant to, inter alia, Section 43(a) of the Lanham Act, 15 U.S.C. § 1125(a), alleging that Discus Holdings, Inc. ("Holdings") and its wholly-owned subsidiary Discus Dental, Inc. ("Discus") (collectively "defendants") engaged in false advertising and unfair competition. Defendants moved under 28 U.S.C. § 1404(a) for a transfer of venue to the United States District Court for the Central District of California. For the reasons set forth below, defendants' motion is granted.
BACKGROUND
Brasseler and Discus are competing sellers of dental instruments and accessories. Brasseler is a Georgia company with its principal place of business in Savannah, Georgia. Discus is a California corporation with its principal place of business in Culver City, California. Late in the summer of 2004, James Stuart and Heather Felix, both employees of Discus at its Culver City office, had a discussion about potential marketing strategies for an upcoming Discus' product line known as Zip! Premium Burs ("Zip! Burs"). Felix Decl. ¶¶ 5-6; Stuart Decl. ¶¶ 13-14. They decided to commission a study at the UCLA School of Dentistry ("the study") to, among other things, compare the cutting speed of Zip! Burs to other similar burs, including ones sold by Brasseler. Stuart Decl. ¶¶ 14-16. The study was done as planned and made the following summary conclusion:
Holdings, also incorporated in California, is only a holding company. It neither conducts business nor has employees. Stuart Decl. ¶ 5.
A bur is a diamond-tipped cutting and grinding tool similar to a drill bit. Defs.' Mem. in Supp. of Trans. at 4.
The cutting efficiency of all four diamond burs was found to decrease due to cyclic cutting and autoclaving. Under these experimental conditions, Discus burs cut more efficiently at the 2nd, 3rd, and 4th cycle, than the other three burs [including the Brasseler]. By the 5th cycle, cutting efficiency of all burs had decreased to the same level.
Chou Reply Decl. Ex. C. When Discus brought Zip! Burs to market in November of 2004, it mailed out approximately 90,000 brochures referencing the results of the study to dentists across the country. Stuart Decl. ¶ 7. Discus also placed advertisements in two nationally distributed magazines and handed out promotional materials at a dental trade show in New York City ("the New York trade show"). Compl. ¶ 14. These materials stated, in part: "[i]ndependent laboratory testing proves that new Discus Zip! Premium Diamond Burs out-perform the market leaders by an average of 25% in speed of cut." Compl. Ex. 2; 3. A bar chart accompanying the text mentioned Brasseler by name. The magazine advertisements also contained scanning electron microscope images of four burs, including a Brasseler bur identified by name. Compl. Ex. 2.
An asterisk note in the magazine ad said, "Data on file. To be dispensed by or on the order of a dental professional." A similar note in the promotional materials handed out at the New York trade show said, "Study based on depth of cut in 30 seconds averaged over 4 cuts. Instrument type tested from each manufacturer is a coarse grit 856-018. Data on file. To be dispensed by or on the order of a dental professional." Discus claims that four cuts is the industry standard for the life of a bur. Stuart Decl. ¶ 21.
A note above the bar chart said, "Averaged over 4 cuts and autoclaving."
The initial marketing campaign for Zip! Burs ended in late December of 2004. Stuart Reply Decl. ¶ 4. Thereafter Discus began a new campaign that did not mention the study. Cooper Decl. ¶ 6. Discus also instructed its sales personnel to no longer refer to the study. Stuart Reply Decl. ¶¶ 4-5.
Some materials referencing the study, specifically Zip! Burs catalogs and copies of a promotional letter from the founder of Discus, were "inadvertently" distributed at conferences in Tennessee and Florida after the initial advertising campaign ended. Cooper Decl. ¶¶ 6-10; Allen Decl. ¶¶ 2-4. Discus now claims to have "remedied the administrative error that resulted in the distribution of the old Zip! catalog." Cooper Decl. ¶ 12.
Brasseler became aware of the Zip! Burs marketing materials in early November of 2004 and immediately took issue with Discus' comparative claims. Compl. Ex. 5. In its complaint filed November 30, 2004, Brasseler alleges that Discus "either `cherry picked' from or simply misstated the actual results of" the study with the conscious intent of misleading "consumers into concluding that Discus' burs are better than Brasseler's burs." Compl. ¶¶ 17-18. The alleged result is "substantial harm" to Brasseler, particularly in the New York area, which is its largest market. Whelan Decl. ¶¶ 2, 5-6. Discus denies these allegations.
Discus does not maintain any domestic offices outside of California. Stuart Decl. ¶ 4. Most of its roughly 252 employees work at the Culver City location, and it maintains only two salespeople in the New York area. Stuart Decl. ¶ 8; Cooper Decl. ¶ 13. Discus' executives work "almost exclusively" out of the Culver City office and "rarely" travel to New York for business. Cooper Decl. ¶ 14. The advertisements, brochures, and other promotional materials for Zip! Burs were designed in-house. Stuart Decl. ¶ 23.
James Stuart, a marketing director who, as noted above, was integrally involved in the marketing of Zip! Burs, recently resigned his position at Discus and moved from California to Texas. Stuart Reply Decl. ¶ 1. He does not maintain a residence in New York and "rarely" travels to New York. Stuart Reply Decl. ¶ 7.
Brasseler has 189 employees working in sales and marketing for its dental products. Whelan Decl. ¶ 8. It does not maintain an office in New York. Most if not all of Brasseler's top executives work in the Savannah office. Pl.'s Opp'n to Trans. at 10.
Brasseler has not explicitly stated that it does not have an office in New York, but Discus has alleged as much and Brasseler has not refuted it. Stuart Decl. ¶ 25; Defs.' Mem. in Supp. of Trans. at 4.
DISCUSSION
When the transferee district is a proper venue, as is undisputedly the case here, "motions for transfer lie within the broad discretion of the district court and are determined upon notions of convenience and fairness on a case-by-case basis." In re Cuyahoga Equip. Corp., 980 F.2d 110, 117 (2d Cir. 1992). Courts routinely consider nine factors in this analysis: (1) the convenience of the parties; (2) the convenience of witnesses; (3) the relative means of the parties; (4) the locus of operative events; (5) the relative ease of access to sources of proof; (6) the weight accorded to plaintiff's choice of forum; (7) the availability of process to compel the presence of unwilling witnesses; (8) the forum's familiarity with the governing law; and (9) trial efficacy and the interests of justice based upon the totality of the circumstances. Lewis v. C.R.I., Inc., No. 03 Civ. 651, 2003 WL 1900859, at *2, (S.D.N.Y. Apr. 17, 2003);Eisenberg v. Wachovia Bank, N.A., No. 00 Civ. 7910, 2001 WL 30452, at *2 (S.D.N.Y. Jan. 11, 2001) (citations omitted). The burden of demonstrating that a transfer is warranted lies with the moving party and a court should not disturb a plaintiff's choice of forum "unless the defendants make a clear and convincing showing that the balance of convenience favors" a transfer. Hubbell Inc. v. Pass Seymour, Inc., 883 F. Supp. 955, 962 (S.D.N.Y. 1995);see Filmline (Cross-Country) Productions, Inc. v. United Artists Corp., 865 F.2d 513, 521 (2d Cir. 1989). For the following reasons, we find that the balance of convenience favors transfer of this action to California.
A. The Convenience of Witnesses
"The convenience of party and non-party witnesses is perhaps the most important consideration on a Section 1404(a) motion."Garrel v. NYLCare Health Plans, Inc., No. 98 Civ. 9077, 1999 WL 459925, at *5 (S.D.N.Y. June 29, 1999). Indeed, this consideration is specifically mentioned in the venue transfer statute. Discus has identified seven of its employees as potential witnesses, all of whom reside in California and for whom California would be a more convenient forum for the litigation. In addition, Discus has also identified five potential non-party witnesses, individuals at UCLA associated with the study, who reside in California and for whom litigation in that state would be more convenient.
In contrast, Brasseler has identified only three potential party witnesses for whom New York would be a more convenient forum. These individuals, employees of Brasseler, all reside in Georgia and contend that the longer flight from Georgia to California would be more inconvenient than flying to New York. Pl.'s Opp'n to Trans. at 10-11; Whelan Decl. ¶ 9. However, because these witnesses must travel substantial distances in any situation, "the Court dismisses from consideration the convenience of witnesses who are located outside both the current and transferee forums." Wechsler v. Macke Int'l Trade, Inc., No. 99 Civ. 5725, 1999 WL 1261251, at *6 (S.D.N.Y. Dec. 27, 1999).
Brasseler also argues that a transfer to California would inconvenience as-of-yet unidentified nonparty witnesses in New York who could testify "about the false or misleading impressions they drew from the [Zip! Burs] ads." Pl.'s Opp'n to Trans. at 11-12; Vassallo Letter April 20, 2005 at 2. We are not convinced that such testimony will be necessary. The accused marketing material largely speaks for itself, and Discus will know more than any non-party witness about how extensively it was distributed. Even if testimony about the effect of the marketing campaign turns out to be necessary, the campaign for Zip! Burs was nationwide in scope and therefore it does not appear that the testimony of New York witnesses would be critical to the litigation. Finally, even if Brasseler disagrees with our view and decides to call such witnesses, their testimony can be recorded in a videotaped deposition and played at trial.
Among the subjects of discovery identified in the parties' Rule 26(f) Discovery Plan are "facts concerning the understanding of the relevant dental professionals as to the meaning of the ads" and "facts concerning the distribution of the ads." Brasseler apparently believes that testimony from attendees of the New York trade show who received the Zip! Burs marketing material will be necessary to establish a violation of the Lanham Act, 15 U.S.C. § 1125(a) (1)-(a) (1) (A) (referring to any commercial "word, term, name, symbol, or device . . . which is likely to cause confusion, or to cause mistake, or to deceive"), and to establish the extent of damages. Pl.'s Opp'n to Trans. at 12.
B. The Locus of Operative Events
"The location of the operative events is a `primary factor' in a transfer motion." WellQuest Int'l Inc. v. Genesis Intermedia. com, Inc., No. 00 Civ. 6558, 2001 WL 1246592, at *4 (S.D.N.Y. Oct. 18, 2001) (quoting ZPC 2000, Inc. v. SCA Group, Inc., 86 F. Supp. 2d 274, 279 (S.D.N.Y. 2000)). When analyzing this factor in unfair competition and false advertising cases, some courts consider the location where the accused material was distributed while other courts focus on the location where it was designed or created. Compare, e.g., Orb Factory, Ltd. v. Design Science Toys, Ltd., 6 F. Supp. 2d 203, 209 (S.D.N.Y. 1998), with Schuur v. Walt Disney Co., No. 98 Civ. 2212, 1998 WL 190321, at *3 (S.D.N.Y. Apr. 21, 1998).
In this case, we believe the latter focus is more appropriate because the primary issues revolve around the creation of the advertisement. Resolution of the case will likely turn on whether the Zip! Burs comparative claims were false or misleading, not where they were distributed. Those claims and the associated advertisements were created in California and based on a study conducted in California. While New York area is undoubtedly an important market for both parties, there is nothing unique about New York's role in this dispute beyond the size of its market. Nor has Brasseler alleged that Discus did anything improper at the New York trade show other than disseminate Zip! Burs promotional material. As there is no dispute regarding the content of the advertisements distributed, nor that the advertisement were distributed in New York, New York is no more relevant to this case than any of the other places nationwide where potential Brasseler customers received Zip! Burs advertisements. Accordingly, we find that this factor weighs in favor of transfer to California.
Brasseler makes several rather confusing statements about the location issue in its Opposition to Transfer. At one point, it writes, "[T]he advertisements distributed in New York to dental professionals attending [the New York trade show] is the principal act that gave rise to this suit." Pl.'s Opp'n to Trans. at 12. Yet in the very next sentence it describes "the falsity of the advertising claims" as a "critical issue." Id. Elsewhere it writes that the "ultimate" issue is "whether Discus disseminated false or misleading advertisements." Pl.'s Opp'n to Trans. at 10.
C. The Relative Ease Of Access To Sources Of Proof
The relative ease of access to proof also weighs slightly in favor of transfer since nearly all materials relevant to this case will be found in California. Documents related to the development and execution of the initial Zip! Burs marketing campaign and the materials related to the study, including the actual burs tested, are located either at Discus' Culver City office or at UCLA. Stuart Decl. ¶ 28. The cost of copying and transporting these materials to New York, although by no means substantial, is a cost that can be avoided by a transfer of venue. See Herbert Ltd. P'ship v. Elec. Arts, Inc., 325 F. Supp. 2d 282, 289 (S.D.N.Y. 2004) (weighing the "location of relevant evidence" factor "slightly in favor of transfer" because "retaining [the] case in New York [would impose] some incrementally greater burden, however slight, on defendants to copy or transport documents that they would not incur if the case proceeded in California").
D. The Availability Of Process To Compel The Presence Of Unwilling Witnesses
"The availability of process to compel the testimony of important witnesses is an important consideration in transfer motions." Arrow Elec., Inc. v. Ducommun Inc., 724 F. Supp. 264, 266 (S.D.N.Y. 1989). This Court does not have the power to compel the non-party UCLA researchers to testify at trial, while a district court in the Central District of California could compel them. See Fed.R.Civ.P. 45 (b) (2). This may well become an issue because the researchers have indicated, through their counsel, that they are unwilling to attend trial in New York. Chou Reply Decl. ¶¶ 36-39. Given the centrality of their work is to this case, we find that this factor weighs heavily in favor of transfer.
E. The Weight Accorded To Plaintiff's Choice Of Forum
Although "[a] plaintiff's choice of forum is to be given considerable deference," that choice is not necessarily controlling, and is given less weight when "the plaintiff is not a resident of the forum and the cause of action is minimally connected with the forum." Eichenholtz v. Brennan, 677 F. Supp. 198, 201 (S.D.N.Y. 1988) (citations omitted). Thus, Brasseler's choice is entitled less weight because Brasseler is not a resident of the Southern District of New York and, as discussed above, the central issues of this case are only minimally connected to New York.
Although we have considered the other four factors in the venue transfer analysis, we do not discuss them because we find each to be either neutral or lean only slightly in Brasseler's favor.
CONCLUSION
For the reasons discussed above, we find that the balance of convenience clearly favors litigating this case in California. Hence we grant defendants' motion for transfer. The Clerk of the Court is respectfully requested to forthwith transfer this case to the Central District of California pursuant to 28 U.S.C. § 1404 (a).SO ORDERED.