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finding the convenience of the witnesses to be a neutral factor in part because neither party asserted "that the use of videotaped depositions will be an inadequate substitute"
Summary of this case from Starr Indem. & Liab. Co. v. Brightstar Corp.Opinion
04 CV 2805 (JG).
November 1, 2004
PAUL A. LANNI, Blodnick Gordon Fletcher Sibell, P.C., Syosset, NY, Attorney for Plaintiffs.
SCOTT MICHAEL SALENT, Collier, Halpern, Newberg, Nolletti Bock, LLP, White Plains, NY, Attorney for Defendant.
MEMORANDUM AND ORDER
The dispute in this case centers upon whether an enforceable agreement was reached between plaintiff Adam Kriftcher, the president of plaintiff GLMKTS, Inc., and defendant Decorize, Inc., whereby GLMKTS would provide services to Decorize in return for shares of Decorize's stock. Decorize has moved to transfer venue from this Court to the Western District of Missouri. For the reasons set forth below, the motion is denied.
BACKGROUND
Plaintiffs GLMKTS and Kriftcher (collectively "Kriftcher") allege that on June 15, 2001, Kriftcher entered into an agreement with Decorize to provide certain services to help publicize Decorize. Kriftcher alleges that in reliance on this agreement, he performed various services, including: profiling Decorize on his StockScholar.com website; e-mailing Decorize's news releases to subscribers to that web-site; personally introducing Decorize's principals to at least twelve investment bankers for prospective marketing purposes; flying six employees to Missouri to consult with Decorize about the services that Kriftcher would perform; and making introductions on behalf of Decorize at business dinners in New York. Kriftcher alleges that as a result of his efforts, Decorize entered into several agreements related to investor relations. Kriftcher alleges that in return for his services, Decorize promised to pay him in stock valued at $365,000. Decorize, for its part, denies that it entered into an agreement with Kriftcher.
On June 7, 2004, Kriftcher commenced an action against Decorize in the Supreme Court of the State of New York, County of Nassau, seeking $365,000 in damages, exclusive of costs and interest. On July 6, 2004, Decorize filed a notice of removal to this Court based on diversity of citizenship, as Kriftcher is a citizen of New York and Decorize is a citizen of Missouri. On August 20, 2004, Decorize filed this motion for change of venue from this Court to the Western District of Missouri pursuant to 28 U.S.C. § 1404(a).
DISCUSSION
A. Transfer Pursuant to 1404(a)
Motions to transfer venue from one federal district court to another are governed by 28 U.S.C. § 1404(a), which reads: "For the convenience of parties and witnesses, in the interest of justice, a district court may transfer any civil action to any other district or division where it might have been brought." The burden of demonstrating that a case should be transferred is on the movant, Factors Etc., Inc. v. Pro Arts, Inc., 579 F.2d 215, 218 (2d Cir. 1978), abrogated on other grounds by Pirone v. MacMillan, Inc., 894 F.2d 579, 585-86 (2d Cir. 1990), who must make a "clear-cut showing" that transfer is in the best interests of the litigation. See Smart v. Goord, 21 F. Supp. 2d 309, 315 (S.D.N.Y. 1998).
The inquiry on a motion to transfer has two steps. First, the court must establish that the action "might have been brought" in the district to which the moving party seeks transfer. If it could have been brought there, the court inquires as to whether, considering "the convenience of parties and witnesses" and "the interest of justice," a transfer is appropriate. See Hernandez v. Graebel Van Lines, 761 F. Supp. 983, 986 (E.D.N.Y. 1991) (citing Schneider v. Sears, 265 F. Supp. 257, 261 (S.D.N.Y. 1967)).
There is no dispute here that this action "might have been brought" in the Western District of Missouri because Decorize resides in that district, and a diversity action may be brought in the district where the defendant resides. See 28 U.S.C. § 1391(a). I therefore turn to the issue of whether the convenience of witnesses and parties and the interest of justice make transfer appropriate. This question is left to the sound discretion of the district court. Filmline (Cross-Country) Prods., Inc. v. United Artists Corp., 865 F.2d 513, 520 (2d Cir. 1989).
In making this determination, courts have considered a variety of factors, none of which is individually dispositive. These factors include: (1) the convenience of the parties; (2) the convenience of witnesses; (3) the locus of operative facts; (4) the plaintiff's choice of forum; (5) calendar congestion; (6) the relative means of the parties; (7) any practical difficulties; (8) the forum court's familiarity with the substantive law; and (9) the interests of justice. See, e.g., Longo v. Wal-Mart Stores, Inc., 79 F. Supp.2d 169, 171 (E.D.N.Y. 1999) (citing Pall Corp. v. PTI Techs., Inc., 992 F.Supp. 196, 199 (E.D.N.Y. 1998)). I discuss each of these factors in turn.
Because both parties agree that relative means has no bearing here on the change of venue analysis, I will not address it further.
1. The Convenience of the Parties
The first two factors — that of the convenience of the parties and witnesses — are "generally the most important factor[s] in a court's determination of whether to grant a motion for transfer." Dwyer v. General Motors Corp., 853 F. Supp. 690, 692 (S.D.N.Y. 1994). Here, the convenience factor for both parties and witnesses is virtually a wash. Decorize states that "numerous party witnesses" would need to travel to New York, but they specify only three: the current CEO, the Vice-President of Finance, and the Corporate Secretary, all of whom will apparently testify as to the absence of any corporate records reflecting the alleged agreement. On the plaintiffs side, Kriftcher states that "one or two" party witnesses will testify. A transfer of venue here would merely shift the burden of inconvenience from one party to another, and as such is a neutral factor. See Schwartz v. Marriot Hotel Servs., Inc., 186 F. Supp. 2d 245, 250 (E.D.N.Y. 2002).
2. The Convenience of the Witnesses
Decorize states that its three key witnesses, who dealt directly with Kriftcher during the relevant period, are non-party witnesses who either no longer work for Decorize (Jon Baker, the former CEO; and Alex Budzinsky, the former CFO), or never worked for Decorize (Robert Smith, a Missouri stockbroker who introduced Adam Kriftcher to Decorize). Kriftcher, for his part, has identified 11 non-party witnesses: eight reside in New York, two reside in Missouri, and one resides in Canada. Decorize argues that its three witnesses will provide more material testimony because they can testify to the circumstances surrounding the alleged formation of the agreement, and as such this should tip the venue balance in its favor. In some instances, the materiality of anticipated testimony can influence the venue-change calculus. See Dwyer, 853 F. Supp. at 693 ("it is not the number of prospective witnesses that determines the appropriateness of a transfer, but rather, the materiality of their anticipated testimony."). Here, however, Kriftcher states that several of plaintiffs' witnesses can testify to being introduced by Kriftcher to Baker in Missouri and New York, while others can testify to entering into agreements with Decorize because of Kriftcher's efforts. While Decorize characterizes such testimony as "irrelevant," see Reply Aff. of Steve Crowder, ¶ 12, such testimony would clearly buttress Kriftcher's argument that plaintiffs performed services that benefitted Decorize. I conclude that Decorize has not shown that the materiality of its witnesses' testimony so outweighs that of Kriftcher's witnesses that this factor should weigh in Decorize's favor.
Finally, both parties argue that their disfavored venue will disadvantage them because the court will not have subpoena power over the witnesses residing in the favored venue. While the ability to compel the attendance of witnesses may be an important factor in a court's determination of a transfer motion, see Dwyer, 853 F. Supp. at 694, here it appears to cut equally both ways. In addition, neither party has demonstrated that its witnesses will not appear voluntarily, or that the use of videotaped depositions will be an inadequate substitute. See American Alliance Ins. Co. v. Sunbeam Corp., No. 98 CIV. 4703 (LMM), 1999 WL 38183, at *7 (S.D.N.Y. Jan. 28, 1999) (citing Collier v. Stuart-James Co., Inc., No. 89 CIV. 5805 (LLS), 1990 WL 55798, at *5 (S.D.N.Y. April 26, 1990). Accordingly, I find that the convenience of the witnesses factor favors neither party.
3. The Locus of Facts
This dispute revolves around whether an agreement was formed between a New York company and one in Missouri. Decorize relies heavily on the fact that the initial discussions between Kriftcher, Baker, and Smith took place in Missouri. Kriftcher counters that much of the performance of the alleged agreement, such as introducing Baker to several investors, took place in New York. Accordingly, I find that this factor favors neither party.
4. The Plaintiffs' Choice of Forum
A plaintiff's choice of forum is "generally entitled to considerable weight and should not be disturbed unless other factors weigh strongly in favor of transfer." Schwartz, 186 F. Supp. 2d at 251-52. A plaintiff's choice will merit less deference, however, where it is neither his home district or the locus of the majority of operative events. American Alliance, 1999 WL 38183, at *4. Decorize argues that Kriftcher's choice of forum should not be given much weight because the events surrounding whether an agreement was formed took place in Missouri. Kriftcher, however, resides in New York, and at least some of the operative events, and specifically Kriftcher's alleged performance, took place in New York. Accordingly, I find that Kriftcher's choice of forum remains entitled to the considerable deference it is normally due. See id. at *9.
5. Calendar Congestion
Decorize has submitted undisputed evidence that the calendar in this district is more crowded than that in the Western District of Missouri, and that this action would almost certainly come to trial there before it would here. Therefore, this factor weighs in favor of transfer.
6. Practical Difficulties
Decorize argues that the practical difficulties it will face in arguing the case in this district stem from the limits of this Court's subpoena power as it relates to Decorize's Missouri witnesses. As addressed above, this difficulty will cut equally in both directions, and accordingly is a neutral factor.
7. The Forum Court's Familiarity with Governing Law
This factor is "not generally considered a highly significant one." Hernandez, 761 F.Supp. at 991; see Schwartz, 186 F. Supp. 2d at 251 (explaining that where an action does not involve complex questions of another state's laws, courts accord little weight to this factor) (citation omitted). Decorize argues that Missouri law will govern the determination as to whether an enforceable agreement was ever entered into between itself and Kriftcher. Kriftcher apparently accepts this argument for the purposes of this motion. While Decorize is surely right that, generally speaking, a Missouri federal court will be more familiar with Missouri law than this Court, it has made no claim that the Missouri law in question is particularly complex. Therefore, I find that while this factor weighs in favor of Decorize, it does not weigh much.
8. Interests of Justice
Neither party has suggested any additional interests that might be implicated by this factor other than those discussed above.
Balancing the factors set forth above, I find that plaintiff's choice of forum outweighs the two factors that favor transfer — calendar congestion and the forum court's familiarity with governing law. Because Kriftcher resides in New York and some of the operative facts at issue took place in New York, his choice of forum is entitled to substantial weight. Cf. Ayers v. Arabian Am. Oil Co., 571 F.Supp. 707, 709 (S.D.N.Y. 1983) ("Where the balance of convenience is in equipoise, plaintiff's choice of forum should not be disturbed."). (citation omitted). I find therefore, that Decorize has failed to make a "clear-cut showing" that transfer to the Western District of Missouri is warranted in the interests of convenience and justice.
CONCLUSION
For the foregoing reasons, the motion for a change of venue is denied.
So Ordered.