Opinion
Case No. 2:06cv632.
October 2, 2006
OPINION AND ORDER
Before the Court is the August 15, 2006 Motion of Defendant Pharmacon International Inc. (hereinafter "Defendant") to Dismiss or, in the Alternative, to Change Venue (Doc. 11). Plaintiff Mind-Peace, Inc. (hereinafter "Plaintiff") filed a Memorandum in Opposition on August 22, 2006 (Doc. 14). Defendant filed a Reply Memorandum on August 23, 2006 (Doc. 17).
I. FACTS
Plaintiff is a Delaware corporation with its principal place of business at 250 East Broad Street, Suite 2100, Columbus, Ohio. (Doc. 1) It is engaged in the business of marketing healthcare related services and products. (Id.) Specifically, Plaintiff sells and markets a package of services called Health Quest to brokers and companies. (Id.) Defendant is a New York corporation with its principal place of business at 88 East Broad Street, Suite 1701, New York, New York. (Id.)
The parties modified a technology platform, originally developed by Defendant for different markets, for application in the health care delivery business. (Id.) It is known as ALERTS. (Id.) The Health Quest package of services contains ALERTS. (Id.) Additionally, Plaintiff sells ALERTS on a stand alone basis as "Health Alerts." (Id.)
On June 5, 2005, Plaintiff and Defendant executed the Strategic Alliance Agreement (hereinafter "Agreement"). (Id.) Pursuant to the Agreement, Defendant appointed Plaintiff its "exclusive world-wide marketer, sales representative and distributor" for its products, including ALERTS. (Id., Exh. A) Further, the Agreement provides that Defendant will not compete with Plaintiff by directly selling any of its products or acting inconsistently with "the business goals or product offerings of this strategic alliance." (Id.) The Agreement also requires Defendant to provide Plaintiff with direct access to ALERTS and to provide appropriate technical support. (Id.) Finally, the Agreement, at § 27(b), sets forth a forum selection clause, which states:
This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware (regardless of the law that might be applicable under principles of conflicts of law). The parties hereby consent to the exclusive jurisdiction of the courts of the State of Delaware and the United States District Court for the appropriate district of Delaware and waive any contention that any such court is an improper venue for enforcement of the Agreement.
(Hereinafter "forum clause"). (Id.)
Plaintiff contends since July 10, 2006, Defendant has been in material breach of its obligations under the Agreement. (Id.)
II. ANALYSIS
Defendant seeks, pursuant to Fed.R. 12(b)(1)(3) and/or (6), to dismiss this action or in the alternative, to transfer this action to the United States District Court for the District of Delaware pursuant to the provisions of 28 U.S.C. § 1404(a). Defendant argues the forum clause is valid and, as such, jurisdiction over this dispute exists exclusively in the state and federal courts of the State of Delaware.
In response, Plaintiff contends the filing of this action in this court satisfies federal jurisdictional and venue statutes and, as such, it is not appropriate to dismiss the action. Further, Plaintiff argues the forum specified in the forum clause, the State of Delaware, is not a convenient forum for either party. Specifically, Plaintiff asserts there is no connection to the State of Delaware as neither Plaintiff nor Defendant has either an office or does business there and there are no witnesses who either live or work there. As such, Plaintiff maintains it filed suit in Ohio, which is a convenient forum, as it is the location of its offices and witnesses, including one of Defendant's key witness, its CEO, Tom Adams. Further, Plaintiff contends the only other convenient forum is New York, the location of Defendant's office and a few witnesses. As such, Plaintiff argues transferring this case to the State of Delaware would do nothing more than add to the cost of resolving their dispute for both parties and delay adjudication of the merits of its claims.
First, the Court concludes dismissal of this action pursuant to Fed.R.Civ.Pro. 12(b)(1)(3) and/or (6) is not appropriate. As such, the Court will focus on whether transfer is appropriate.
In this matter, Plaintiff does not argue the forum clause is not valid. Further, Plaintiff does not dispute it is mandatory. (Doc. 22, p. 14). "Thus, the Court next turns to whether venue should be transferred under § 1404(a). The presence of a valid forum selection clause is a significant factor in analyzing a § 1404(a) motion for discretionary change of venue, but it is not determinative. See Stewart Organization, Inc. v. Ricoh Corp., 487 U.S. 22, 32 (1988); Kerobo v. Southwestern Clean Fuels, Corp., 285 F.3d 531, 537 (6th Cir. 2002). In addition to the forum selection clause, the "district court must weigh a number of case-specific factors such as the convenience of parties and witnesses, public interest factors of systemic integrity, and private concerns falling under the heading the interest of justice." Kerobo, 285 F.3d at 537-538. Ruling on discretionary transfer of venue motions requires a court to make a case-by-case evaluation of the particular circumstances at hand and consideration of all relevant factors. See Stewart, 487 U.S. at 29.
The party moving for transfer of venue generally has the burden of proving that transfer is appropriate and the plaintiff's choice of forum is entitled to considerable weight. See Nicol v. Koscinski, 188 F.2d 537, 537 (6th Cir. 1951). However, courts have held that the presence of a forum selection clause negates the presumption given to the plaintiff's choice of forum and requires the plaintiff to prove why enforcement and transfer is unreasonable under the circumstances. See Jumara v. State Farm Ins. Co., 55 F.3d 873, 880 (3rd Cir. 1995); In re Ricoh Corp., 870 F.2d 570, 573 (11th Cir. 1989); Viron Int'l Corp. v. Boland, Inc., 237 F.Supp.2d 812, 816 (W.D.Mich. 2002). Thus, in this case, Plaintiff bears the burden of pointing to specific reasons why enforcement of the forum selection clause is inappropriate.
A. Convenience of the Parties and Witnesses
Plaintiff contends the convenience of both parties and the witnesses is best served by maintaining the action in this Court. Upon review, the Court concludes the Southern District of Ohio is a more convenient forum than a federal court in the State of Delaware. The parties have no connection to the State of Delaware. There are no witnesses residing in Delaware. Moreover, neither Plaintiff nor Defendant maintain an office in Delaware. The same cannot be said of the State of Ohio. Plaintiff's witnesses are all located in either Columbus or Toledo, Ohio. Further, while many of Defendant's witnesses are located in New York, making Delaware the closer forum, Defendant's main witness, Mr. Adams, resides in Columbus. As such, the Court concludes that convenience to the parties and witnesses weighs against transfer.
B. Public Interest Factors of Systemic Integrity
Public interest factors include the issues of congested dockets, concerns with resolving controversies locally, and, in a diversity case, having the trial in a forum that is at home with the state law that must govern the case. See Gulf Oil Corp. v. Gilbert, 330 U.S. 501, 508-509 (1947). Here, there is no evidence of significant congestion in either venue. Further, while there is no reason to believe that the controversy is of particular interest to the public in Delaware, the same cannot be said for Ohio. Plaintiff focuses on selling to self-insured employers in Ohio. As such, these employers have an interest in the resolution of this controversy. However, the forum clause contains a choice of law provision which mandates the Agreement is governed by Delaware law. Nevertheless, the Court concludes the public interest factors of systemic integrity weigh against transfer.
C Private Interest Factors
The private interests of litigants include the "relative ease of access to sources of proof; availability of compulsory process for attendance of unwilling, and the cost of obtaining attendance of willing, witnesses; possibility of view of premises . . .; and all other practical problems that make trial of a case easy, expeditious and inexpensive." Gulf Oil, 330 U.S. at 508. Plaintiff indicates the records pertaining to this controversy are located in Ohio. However, Defendant asserts its records are located in New York. Moreover, as no witnesses reside in the State of Delaware, the cost of obtaining attendance of willing witnesses may be costly. Therefore, the private interest factors weight against transfer.
D. Forum Selection Clause
The forum selection clause found in the Agreement covers this dispute and its language is mandatory. The presence of such a clause weighs heavily in a district court's analysis under § 1404(a). The party opposing its enforcement bears a heavy burden in overcoming the weight accorded to the clause. See Kerobo, 285 F.3d at 537. In this matter, the factors addressed above weigh heavily in Plaintiff's favor so as to justify avoiding the forum clause in the Agreement.
III. CONCLUSION
IT IS SO ORDERED.
DENIED.