Opinion
No. 04 Civ. 8364 (LMM).
February 8, 2005
MEMORANDUM AND ORDER
Kara Technology Incorporated ("Kara"), a Texas corporation with its principal place of business in Ontario, Canada, filed this action against Stamps.com Inc. ("Stamps"), a Delaware corporation with its principal place of business in Los Angeles, California, alleging patent infringement, misappropriation and misuse of trade secrets, breach of contract, unfair competition, and unjust enrichment. Stamps has asserted various affirmative defenses and counterclaims, and moves to transfer the case to the United States District Court for the Central District of California, pursuant to 28 U.S.C. § 1404(a). Kara, in turn, moves to dismiss the counterclaims and strike certain of Stamps' affirmative defenses. For the reasons stated below, Stamps' motion to transfer is granted. The Court will not reach Kara's motion to dismiss or its motion to strike.
Kara also moves to strike Stamps' Reply brief in support of its motion to transfer for exceeding page limitations, and by letter, requests the same as to Stamps' Amended Reply brief. The motion is denied.
1
Kara holds two patents covering technology relating to the "generation or creation of postage of any value on label stock" ("the technology"). (Compl. at ¶ 17) In May 2000, Kara commenced discussions with Stamps about licensing the technology. The companies signed a Non-Disclosure Agreement ("NDA"), after which Kara disclosed the technology to Stamps. (Id. at ¶¶ 17-19) The discussions continued until Stamps decided that it did not want to license the technology. (Id. at ¶ 19) Days later, Stamps launched "NetStamps," a product line that Kara alleges unlawfully uses the technology. Kara filed this suit in October 2004, maintaining that it "has been driven to the brink of bankruptcy" and is now "nearly defunct" as a result of Stamps' unlawful conduct. (Pl. Opp'n at 13) In response, Stamps has asserted various affirmative defenses and counterclaims. The motions before the Court include Kara's motions to dismiss Stamps' counterclaims and to strike certain of Stamps' affirmative defenses, as well as Stamps' motion to transfer the case to the United States District Court for the Central District of California. The Court considers Stamps' motion first.2
For the convenience of parties and witnesses, and 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. 28 U.S.C. § 1404(a). The burden of demonstrating the desirability of transfer lies with the movant. See, e.g., Miller v. Bombardier, Inc., No. 93 Civ. 0376, 1993 WL 378585, *2 (S.D.N.Y. Sept. 23, 1993). The Court has "broad discretion,"Ainbinder v. Potter, 282 F. Supp.2d 180, 191 (S.D.N.Y. 2003), to determine where trial will be most convenient and will serve the ends of justice, see, e.g., R. Maganlal Co. v. M.G. Chem. Co., 942 F.2d 164, 167 (2d Cir. 1991) (other citations omitted). A number of factors must be considered, including the convenience of the parties, the ease of access to the sources of proof, the susceptibility of the witnesses to process, the plaintiff's choice of forum, and the interests of justice. See, e.g., Arrow Electronics, Inc. v. Ducommun, Inc., 724 F.Supp. 264, 265 (S.D.N.Y. 1989).
3
Kara asserts various arguments in opposition to transfer, which all boil down to the contention that it would be prohibitively expensive for Kara to litigate the case in Los Angeles, as opposed to New York, which is closer to Ontario. (Pl. Opp'n at 9, 13, 18) The Court sympathizes with Kara's precarious economic state, but finds its argument unpersuasive. Given that this is a civil case, frequent court appearances by Kara's lone employee will not be necessary. Moreover, the added cost of flying from Ontario to Los Angeles, as opposed to New York City, will be minor compared to the other costs that are typically incurred in litigation, regardless of the forum. (See Pl. Opp. Exs. D, E)
"The location of witnesses . . . is a major factor to be considered when evaluating a transfer motion." See, e.g., Miller, 1993 WL 378585 at *3 (citations omitted). Although Kara repeatedly questions the necessity of many of Stamps' witnesses, it provides, in its opposition motion, a chart illustrating the fact that 27 of the 28 potential employee witnesses, and 15 of the 40 third-party witnesses are located in Los Angeles, while only one witness is located in New York. (Id. at 17) Los Angeles is clearly the more convenient forum for the witnesses in this case. The Court thus finds that the interest of justice and the convenience of the witnesses weigh in favor of transfer.
Moreover, the Court notes that the Central District of California may properly assert jurisdiction because Stamps "resides" in California, as its principal place of business is in Los Angeles. See, e.g., Arrow Electronics, Inc., 724 F.Supp. at 266 (other citation omitted) ("In a diversity action such as this one, venue is proper in the judicial district(s) where . . . defendant reside[s].").
4
For the reasons stated above, Stamps' motion to transfer is granted. Kara's motion to strike Stamps' Amended Reply brief is denied, and the Court will not reach Kara's motion to dismiss or motion to strike. The clerk is directed to transfer this action, pursuant to 28 U.S.C. § 1404(a), to the United States District Court for the Central District of California.So Ordered.