Opinion
EP-04-CA-353-DB.
December 7, 2004
MEMORANDUM OPINION AND ORDER
On this day, the Court considered Defendant Ventura Associates, Inc.'s "Motion To Dismiss For Failure To State A Claim Or Alternatively, Motion For Change Of Venue" filed in the above-captioned cause on September 17, 2004. Plaintiff International Outsourcing Services, LLC, filed a "Response To Defendant's Motion To Dismiss For Failure To State A Claim Or Alternatively, Motion For Change Of Venue" on September 27, 2004. On September 30, 2004, Defendant filed a "Reply to Plaintiff's Response To Defendant's Motion To Dismiss For Failure To State A Claim Or Alternatively, Motion For Change Of Venue." After due consideration, the Court is of the opinion that Defendant's "Motion For Change Of Venue" ("Motion to Transfer") should be granted, while Defendant's "Motion to Dismiss For Failure To State A Claim" should be denied as moot.
BACKGROUND
Defendant is a corporation organized and existing under New York law, with its sole office and place of business in New York, New York. Plaintiff is an Indiana limited liability company, with its corporate headquarters in Bloomington, Indiana, and its North American operational headquarters in El Paso, Texas. Plaintiff also maintains a regional plant in Pennsauken, New Jersey.
In late 2001, Kal Kan, a non-Party, contracted with Defendant to design and operate an instant win game to promote Kal Kan's product, Whiskas Cat Food. As part of the promotion, the cat food containers were to include a prize ticket; instant winners would receive a gift card with which the winner could purchase $25 worth of gasoline. In January 2002, Defendant contracted with Plaintiff's New Jersey office to process the winning tickets and distribute the gift cards to the winners nationwide. Defendant sent the 5,000 gift cards to Plaintiff's Pennsauken, New Jersey plant. Plaintiff sent 137 cards to instant winners, and claims that it stopped processing the cards when one of Plaintiff's employees received instructions from Defendant's employee to stop distributing the cards because the cards were defective. Defendant denies that its employees, instructed Plaintiff to stop distributing the cards, and claims that it was not aware that such distribution was halted until one of its employees received an e-mail from one of Plaintiff's employees in the New Jersey office. In said e-mail, Plaintiff's employee advised that Plaintiff was storing the undistributed cards in New Jersey, and sought instructions regarding disposal. The cards had since expired. On November 3, 2003, Defendant's employee wrote to another of Plaintiff's employees in New Jersey making claim for the value of the gas cards.
Plaintiff does not specify when this alleged phone call was made, but states that it was informed the cards allowed winners to purchase only $20 worth of gasoline, rather than $25 worth of gasoline.
On July 9, 2004, Plaintiff filed this cause of action in County Court at Law Number 3, El Paso County, Texas. In its Original Petition, Plaintiff sought a declaration from that court that it did not breach its contract with Defendant. On September 13, 2004, Defendant filed a "Notice of Removal," pursuant to 28 U.S.C. § 1446, claiming that the Court possesses diversity jurisdiction over the instant cause because the Parties are citizens of different states, and the amount in controversy exceeds $75,000. The instant Motion followed. Therein, Defendant asks the Court to dismiss this cause for failure to state a claim, or in the alternative to transfer this cause, pursuant to 28 U.S.C. § 1404(a), to the Southern District of New York, where Defendant filed a Complaint on July 30, 2004, alleging Plaintiff's breach of contract. That cause is styled Ventura Associates, Inc. v. Int'l Outsourcing Services, Inc., Cause Number 04-CV-5962-PKL. The Parties agree that the instant cause and the one filed with the Southern District of New York involve the same contract.
Section 1446 establishes the procedures by which a defendant may remove a suit filed in state court to federal court. See 28 U.S.C.A. § 1446 (West 1994). 28 U.S.C. § 1332 grants the Court original jurisdiction over civil actions where the matter in controversy exceeds $75,000 and is between citizens of different states. 28 U.S.C.A. § 1332 (West Supp. 2004).
STANDARDS
When a federal district court's jurisdiction is premised solely on diversity of citizenship, 28 U.S.C. § 1391(a) controls venue, establishing three places where venue is proper:
(1) a judicial district where any defendant resides, if all defendants reside in the same State, (2) a judicial district in which a substantial part of the events or omissions giving rise to the claim occurred, or a substantial part of property that is the subject of the action is situated, or (3) a judicial district in which any defendant is subject to personal jurisdiction at the time the action is commenced, if there is no district in which the action may otherwise be brought."28 U.S.C.A. § 1391(a) (West 2004). Pursuant to § 1391(c), a corporation is "deemed to reside in any judicial district in which it is subject to personal jurisdiction at the time the action is commenced." 28 U.S.C.A. § 1391(c) (West 1993).
Title 28 U.S.C. § 1404(a) permits transfer of a case "for the convenience of the parties and witnesses, [and] in the interest of justice" to another district where the case "might have been brought," 28 U.S.C.A. § 1404(a) (West 1993). The "have been brought" limitation requires that at least venue and subject-matter jurisdiction must be proper in the transferee district. See Ellis v. Great Southwestern Corp, 646 F.2d 1099, 1104 n. 5 (5th Cir. 1981). The purpose of a venue transfer is to prevent the waste of time and money on the part of the parties, the litigants, and the public. Van Dusen v. Barrack, 376 U.S. 612, 616, 84 S. Ct. 805, 809, 11 L. Ed. 2d 945 (1964) (citations omitted). It is well-settled that the movant bears the burden of showing why a transfer of venue under § 1404(a) is warranted. Peteet v. Dow Chem. Co., 868 F.2d 1428, 1436 (5th Cir. 1989). In ruling on a motion to transfer venue, a court must make a "flexible and individualized analysis," weighing factors that are specific to the case. Stewart Org., Inc. v. Ricoh Corp., 487 U.S. 22, 29, 108 S. Ct. 2239, 2244, 101 L. Ed. 2d 22 (1988).
The Court considers "all the relevant factors to determine whether or not on balance the litigation would more conveniently proceed and the interests of justice be better served by transfer to a different [venue]." Peteet, 868 F.2d at 1436 (internal quotation marks omitted). A plaintiff is generally entitled to choose the forum, Peteet, 868 F. 2d at 1436, and "unless the balance is strongly in favor of the defendant, the plaintiff's choice of forum should rarely be disturbed." Schexnider v. McDermott Int'l, Inc., 817 F. 2d 1159, 1162 (5th Cir. 1987). Beyond that, the following factors are commonly considered relevant: (1) the availability and convenience of witnesses; (2) the availability and convenience of the parties; (3) the place of the alleged wrong; (4) the location of books and records; (5) the possibility of delay or prejudice if transfer is granted; and (6) the location of counsel. See, e.g., Hall v. Environmental Chem. Corp., 64 F. Supp. 2d 638, 644 (S.D. Tex. 1999).
DISCUSSION
Defendant's instant Motion requests the Court dismiss this cause for failure to state a claim, or in the alternative to transfer it to the Southern District of New York pursuant to 28 U.S.C. § 1404(a). For the reasons stated below, the Court takes up Defendant's Motion to Transfer before addressing Defendant's Motion to Dismiss.I. Motion to Transfer
Defendant's Motion to Transfer requests that the Court transfer the instant cause to the Southern District of New York for the convenience of the parties and witnesses, and in the interest of justice, pursuant to 28 U.S.C. § 1404(a). See 28 U.S.C.A. § 1404(a). The Court may only transfer the instant case to the Southern District of New York, if it might have been brought there. 28 U.S.C.A. § 1404(a). For the purposes of § 1404(a), this case might have been brought in the Southern District of New York if at least subject-matter jurisdiction and venue are proper in the Southern District of New York. See Ellis, 646 F.2d at 1104 n. 5. The Court discusses each of these below.
Generally, a federal court's subject-matter jurisdiction over a cause involving two private parties is premised on either a federal question or on diversity of citizenship. See 28 U.S.C.A. § 1330, et seq (vesting jurisdiction in the federal district courts). Here, the Court's subject-matter jurisdiction is premised on diversity of citizenship, pursuant to 28 U.S.C. § 1332. Section § 1332 grants Court original jurisdiction over this civil action because the amount in controversy exceeds $75,000 and the parties are citizens of different states. See 28 U.S.C.A. § 1332 (West Supp. 2004). The forum to which Defendant seeks transfer is another federal district court. Thus, pursuant to § 1332, the Southern District of New York could posses subject-matter jurisdiction over this case.
In addition to possessing subject-matter jurisdiction, venue must be proper in the Southern District of New York for the Court to be able to transfer the instant cause to that District. Because subject-matter jurisdiction over this case is based on diversity of citizenship, 28 U.S.C. § 1391(a) controls in which districts venue is proper. See 28 U.S.C.A. § 1391(a). Pursuant to § 1391(a), the Southern District of New York might be a proper venue for this cause if it is a judicial district in which: (1) Defendant resides; (2) a substantial part of the proceedings took place; or (3) a judicial district in which the Defendant is subject to personal jurisdiction at the time the action was commenced, if there is no other district in which the case may otherwise have been brought. 28 U.S.C.A. § 1391(a).
Defendant is a corporation, and, as such, is deemed to reside in any judicial district in which it is subject to personal jurisdiction at the time the action was commenced. See 28 U.S.C.A. § 1391(c). Though neither Party specifically addresses whether Defendant is subject to personal jurisdiction in the Southern District of New York, Defendant has plead that it is incorporated under New York law and that it maintains an office in New York City, which is located within the Southern District of New York. Therefore, the Court finds that maintaining said office subjects Defendant to personal jurisdiction in the Southern District of New York. Thus, for the purposes of § 1391(a), Defendant resides in the Southern District of New York, and the Southern District of New York could be a proper venue pursuant to 28 U.S.C.A. § 1391(a)(1).
Venue in the Southern District of New York might also be proper under 28 U.S.C. § 1391(a)(2), as a judicial district where a substantial part of the events or omissions giving rise to the claim occurred because Defendant transacted with Plaintiff from the Southern District of New York. See portion of opinion discussing the place of the alleged wrong, infra p. 8.
Having determined that the Southern District of New York could possess subject-matter jurisdiction and would be a proper venue for this cause, the Court finds that this cause could have been brought in that district. The Court now turns to balancing whether the litigation would more conveniently proceed and the interests of justice be better served by transfer to the Southern District of New York, by considering the following seven factors: (1) the availability and convenience of witnesses; (2) the availability and convenience of the parties; (3) the place of the alleged wrong; (4) the location of books and records; (5) the possibility of delay or prejudice if transfer is granted; (6) the location of counsel; and (7) plaintiff's choice of forum. See, e.g., Hall v. Environmental Chem. Corp., 64 F. Supp. 2d 638, 644 (S.D. Tex. 1999). The Court scrutinizes each factor in turn.
Instead of utilizing these factors, Defendant's Motion, as well as Plaintiff's Response, presented analysis on the elements considered when a case is dismissed for forum non conveniens. Federal courts do not dismiss a case for forum non conveniens when there is an alternative federal forum. Dismissal on forum non conveniens grounds is proper in those instances in which the alternative forum is a state court or the court of a foreign country. WRIGHT MILLER, FEDERAL PRACTICE AND PROCEDURE: CIVIL 3d § 1352, pp. 328 (2004). Because the Parties did not examine the appropriate factors, the Court combed the pleadings for facts that provided guidance in conducting the proper analysis.
A. Availability and Convenience of Witnesses
The availability of key witnesses is considered to be the most important of the factors. Acosta v. United States, No. EP-01-CA-007-DB, 2001 WL 1910558, at *3 (W.D. Tex. 2001) (citing Dupre v. Spanier Marine Corp., 810 F. Supp. 823, 825 (S.D. Tex 1993)). In its Response, Plaintiff states that Defendant "has not identified a single witness it believes is located in either New York or New Jersey . . . [and] has deprived the Court of the necessary evidence to review the convenience of the witnesses." The Court disagrees. Defendant identifies several witnesses, and places them all in New York or New Jersey. Moreover, Plaintiff does not contend that key witnesses are elsewhere, much less in or near the Western District of Texas. Rather, Plaintiff relies on the fact that if such witnesses are Defendant's employees, Defendant "has control over its own employees." While Plaintiff's assertion might be true, it speaks to the availability and convenience of the Parties and does not impact the factor. In considering this factor, the Court is concerned solely with the availability and conveniences of the witnesses who might be called to testify before the Court.
Defendant states that all of its witnesses are in the Southern District of New York. Though Plaintiff does not identify its witnesses, the pleadings allow the Court to surmise that Plaintiff's likely witnesses will be its employees who transacted with Defendant, all of whom are located in New Jersey, and a former employee who now resides in Pennsylvania. Neither party identifies a single witness in or near the Western District of Texas, which indicates that every witness would have to travel to the Western District of Texas to testify at trial. Because all of the putative witnesses are located in New Jersey, New York, or Pennsylvania, the cost and inconvenience of attending a trial in the Western District of Texas will greatly surpass that of testifying at a trial in the Southern District of New York.
The Court is of the opinion that since none of the witnesses reside in or near the Western District of Texas, and all of them reside in or near the Southern District of New York, Defendant has amply demonstrated that transferring this cause to the Southern District of New York would be more convenient for the witnesses. B. Availability and Convenience of the Parties
The Parties do not directly address this factor in their pleadings. However, the Court notes that Defendant is incorporated under New York law, with its sole office in New York City, where, presumably, all of its 15 employees are located. Defendant, in contrast, is incorporated in Indiana, has international offices, employs over 6,000 persons, has its eastern regional plant in Pennsauken, New Jersey, and its North American operations headquarters in El Paso, Texas. While it may slightly inconvenience Plaintiff to litigate this cause in the Southern District of New York, based on their comparative resources and presences near the venues, it will much more greatly inconvenience the Defendant to proceed in the Western District of Texas. Similarly, though the Parties have control over their respective employees, as Plaintiff's Response suggests, it will more greatly impact Defendant's business to send its employees to the Western District of Texas, than for Plaintiff to send its employees to the Southern District of New York. Therefore, the Court finds that this factor weighs in favor of transferring this cause to the Southern District of New York.
C. Place of the Alleged Wrong
In the instant Motion, Defendant asserts that the "contract was initiated and effectuated in New York and New Jersey" and that none of the events giving rise to the dispute occurred in the Western District of Texas. While Plaintiff states that Defendant "assumes, without proving, the action arose in New York," Plaintiff does not substantiate that challenge. It does not provide the Court any basis to believe that the action arose in any location other than New York, much less in the Western District of Texas. Indeed, Defendant sent the instant win cards from New York City to Plaintiff's Pennsauken, New Jersey plant for processing. Further, Plaintiff processed 137 cards in the Pennsauken plant, and the remaining cards were also stored in the Pennsauken plant. Additionally, all correspondence between the parties flowed to and from New York City and Pennsauken, New Jersey. These facts indicate the location of the alleged wrong. While the Court is not confident that the situs of the alleged wrong is New York, rather than New Jersey, the Court is clear that it is not the Western District of Texas because no part of the transaction in question occurred in the Western District of Texas. Because all of the dealings between the parties both before and after the alleged wrong occurred in New York and New Jersey, the location of the alleged wrong weighs in favor of transferring this case to the Southern District of New York. D. Location of Books and Records
While the facts surrounding this cause might also warrant transferring it to the District of New Jersey, the Court is of the opinion that it is more prudent to transfer this cause to the Southern District of New York because Defendant has already filed suit against Plaintiff in that venue.
When considering a motion to transfer venue, the location of books and other records is usually given little weight, unless the documents are so voluminous that their transportation is a major undertaking. Acosta, 2001 WL 1910558, at *3 (citing Gardipee v. Petroleum Helicopters, Inc., 49 F. Supp.2d 925, 931 (E.D. Tex. 1999). Here, Plaintiff asserts that there will be very few documents presented at trial. Moreover, Defendant has not indicated which documents it believes are relevant to this cause or that those documents are so voluminous that transporting them would be impractical. Therefore, the Court finds that this factor neither favors nor disfavors transfer.
E. Possibility of Delay or Prejudice if Transfer is Granted
Defendant's Motion provided no indication what effect transfer would have upon the disposition of this case. Nevertheless, the Court notes that this case is still in its inception and thus, transferring the matter will not likely delay the hearing of this cause on its merits. This factor neither favors nor disfavors transfer. F. Location of Counsel
Of the factors considered, location of counsel is entitled to the least consideration. Dupre, 810 F. Supp. at 826. Plaintiff and Defendant each have local counsel in each forum, and neither Party will be more convenienced by transferring this cause. Thus, this factor weighs neither in favor of retaining or transferring this cause.
G. Plaintiff's Choice of Forum
Plaintiff's choice of forum is entitled to great deference. Peteet, 868 F.2d at 1436. However, Plaintiff's choice of forum is by no means dispositive or cases would never be transferred. See Flintkote Co. v. Allis-Chalmers Corp., 73 F.R.D. 463, 466 (S.D.NY. 1977). Here, Plaintiff chose to bring its claims in the Western District of Texas, which is not the district in which the contract in question was entered into, nor do any of the putative witnesses reside in this District. There is all but a complete lack of nexus between this forum and the parties or transaction at issue. For this reason, the Court finds that Plaintiff's choice of forum must yield to these considerations, and that this factor weighs in favor of transfer.
All told, of the seven relevant factors considered by the Court, the availability and convenience of the witnesses, the availability and convenience of the Parties, the place of the alleged wrong and Plaintiff's choice of forum weigh favor of transfer, while the location of the books and records, the possibility of delay or prejudice if transfer is granted, and the location of counsel, neither favor nor disfavor transfer. Because four of the seven factors significantly weigh in favor of transferring, the Court is of the opinion that the balance of the factors weigh in favor of granting Defendant's Motion to Transfer. II. Motion to Dismiss
Having determined that transfer to the Southern District of New York should be granted, the Court finds that Defendant's "Motion To Dismiss For Failure To State A Claim" should be denied as moot.
CONCLUSION
The Defendant has demonstrated that the balance of conveniences weigh in favor of transferring this cause to the Southern District of New York. The Court finds that, for the convenience of the Parties and witnesses and in the interests of justice, this case should be transferred to the Southern District of New York. Therefore, the Court is of the opinion that Defendant's Motion to Transfer should be granted. As such, Defendant's "Motion To Dismiss For Failure To State A Claim" should be denied a moot.
Accordingly, IT IS HEREBY ORDERED that Defendant Ventura Associates, Inc.'s "Motion For Change Of Venue" is GRANTED. IT IS FURTHER ORDERED that the above-captioned cause is TRANSFERRED to the Southern District of New York.
FINALLY, IT IS ORDERED that Defendant's "Motion To Dismiss For Failure To State A Claim" is DENIED AS MOOT.