Opinion
CASE NO. 02-60045-CIV-ZLOCH
August 13, 2002
Lawrence B. Lambert, Esq., For Defendant.
Robert Zarco, Esq., For Plaintiffs.
ORDER TRANSFERRING ACTION TO THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MASSACHUSETTS
THIS MATTER is before the Court upon the Defendant, Dunkin Donuts, Inc.'s Motion To Transfer Venue To The United States District Court For The District of Massachusetts (DE 8). The Court has carefully reviewed said Motion and the entire court file and is otherwise fully advised in the premises.
I. Background
The Plaintiffs own and operate Dunkin Donuts stores in Broward County, Florida pursuant to several franchise agreements entered into with the Defendant, Dunkin Donuts, Inc. (hereinafter "DDI"). Relevant to the instant Motion are Sections 3 and 4 of those agreements. Section 4 obligates the franchisees to pay an advertising and marketing fee of five (5) percent of the gross sales realized at any individual Dunkin Donuts store to DDI. Section 3 of the franchise agreements requires DDI to place these fees into a marketing and advertising fund known as the Dunkin Donuts of America, Inc. Franchise Owners' Advertising and Sales Promotion Fund (hereinafter "the Fund"). The Fund is an advertising cooperative of Dunkin Donuts stores throughout the United States and is used to promote the sales and public reputation of Dunkin Donuts stores.
In their Class Action Complaint (DE 1, Ex. A), the Plaintiffs allege that DDI has sought to enforce the terms of its franchise agreements and to collect advertising fees by filing numerous lawsuits against DDI franchisees throughout the United States. According to the Plaintiffs, these lawsuits ended either in judgments for DDI or settlements the results of which were that the franchisees paid to DDI whatever amounts were owed under their respective franchise agreements. The Plaintiffs further allege that through DDI's Loss Prevention Program numerous franchisees have remitted hundreds of thousands of dollars to DDI after having been found to have under reported their gross sales. Finally, the Plaintiffs allege that DDI has failed to use the fees it has collected from its franchisees for advertising purposes as required by Section 3 of the franchise agreements.
As a result of the foregoing, the Plaintiffs commenced the above-styled cause by filing a Class Action Complaint in state court on behalf of all current and former franchisees of DDI who executed franchise agreements with DDI between January 1, 1989 and August 31, 1999. (Compl. ¶ 25.) The Plaintiffs' allege breach of contract (Count I), breach of covenant of good faith and fair dealing (Count II), breach of fiduciary duty (Count III), conversion (Count IV), and accounting (Count V). DDI timely removed the above-styled cause to federal court based upon diversity jurisdiction (DE 1). In the instant Motion, DDI seeks to transfer the above-styled cause to the United States District Court for the District of Massachusetts pursuant to 28 U.S.C. § 1404.
II. Motion To Transfer
The Court notes that Title 28, United States Code, Section 1404(a) provides:
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.28 U.S.C. § 1404 (a). Whether the Court should transfer this matter to the District of Massachusetts pursuant to § 1404(a) requires a two-part inquiry. First, the Court must determine whether the Plaintiffs could have brought this action in the District of Massachusetts. See Mason v. Smithkline Beecham Clinical Lab.'s, 146 F. Supp.2d 1355, 1359 (S.D.Fla. 2001). Second, the Court must determine whether the convenience of the parties and witnesses and the interests of justice weigh in favor of transfer. Id. In making this second determination, the Court considers such factors as (1) the Plaintiffs' choice of forum; (2) convenience of the parties and witnesses; (3) availability of compulsory process for witnesses; (4) access to sources of proof and location of relevant documents; (5) financial ability of the parties to bear the costs of change; and (6) the public interest. Id. With these legal principles in mind, the Court now turns to DDI's Motion.
In support of its Motion, DDI argues that (1) this case could have been brought in the District of Massachusetts; (2) the Plaintiffs' choice of forum is entitled little deference because the operative facts took place in Massachusetts and because this is a class action; (3) the convenience of the parties and witnesses weigh in favor of transfer because the operative facts occurred in Massachusetts and all of DDI's witnesses who have knowledge of DDI's business affairs work and reside in Massachusetts; and (4) the public interest factors weigh in favor of Massachusetts because that is where DDI has its principle place of business. The Plaintiffs' respond by arguing that (1) their choice of forum is entitled to deference; (2) DDI's witnesses are all employees of DDI and their availability should not be considered; (3) access to proof does not weigh in favor of transfer because some documents are located here in South Florida and other documents will be exchanged during discovery; and (4) the Court should not consider public interest factors because DDI has failed to show that the private interests weigh in favor of transfer, and even if the Court were to consider the public interest, it weighs against transfer.
Because the parties do not dispute that this matter could have been brought in the District of Massachusetts, the Court will turn immediately to determine whether out of convenience of the parties and witnesses, and in the interests of justice, it should transfer this matter to the District of Massachusetts.
A. Plaintiffs' Choice of Forum
The Court notes that a plaintiff's choice of forum is generally afforded considerable deference where, as here, the action is brought in the district wherein the plaintiff resides. Mason, 146 F. Supp.2d at 1360. However, the Court further notes that a plaintiff's choice of forum will be afforded less deference where, as here, the action is a class action. Gould v. Nat'l Life Ins. Co., 990 F. Supp. 1354, 1358 (M.D.Ala. 1998). As stated by the United States Supreme Court:
[W]here there are hundreds of potential plaintiffs, all equally entitled voluntarily to invest themselves with the corporation's cause of action and all of whom could with equal show of right go into their many home courts, the claim of any one plaintiff that a forum is appropriate merely because it is his home forum is considerably weakened.
Koster v. Lumbermens Mutual Casualty Co., 330 U.S. 518, 524 (1947); see also Koster v. Lumbermens Mutual Casualty Co., 549 F. Supp. 1312, 1313-14 (E.D.Pa. 1982) (same). The Court further notes that a plaintiff's choice of forum will be afforded less deference when the operative facts underlying the action occurred outside the district chosen by the plaintiff. Gould, 990 F. Supp. at 1358; Bolton, 549 F. Supp. at 1315. Here, the Plaintiffs have alleged that DDI failed to use fees recovered in litigation or through its Loss Prevention Program for advertising purposes as required by its franchise agreements. Any wrongdoing on behalf of DDI would have occurred at its principle place of business, in Randolph Massachusetts. Therefore, the Court finds that the operative facts occurred outside the district chosen by the Plaintiffs.
Because this is class action, and because the operative facts underlying the action occurred in the District of Massachusetts, the Court finds that the Plaintiffs' choice of forum is entitled to less than normal deference. Gould, 990 F. Supp. at 1359.
B. Convenience of the Parties and Witnesses
Next, the Court notes that the convenience of the parties is largely irrelevant to whether the above-styled cause should be transferred to the District of Massachusetts. Central Money Mortgage Company, Inc. v. Holman, 122 F. Supp.2d 1345, 1346 (M.D.Fla. 2000). The convenience of witnesses, however, is "a primary, if not the most important, factor in passing on a motion to transfer under § 1404(a)." McEvily v. Sunbeam-Oster Co., Inc., 878 F. Supp. 337, 344-45 (D.R.I. 1994). Here, the Court notes that DDI has filed the Certification of Jack Laudermilk (DE 18, Ex. A), Assistant General Counsel for DDI, which specifies what witnesses DDI may call and the significance of their testimony. Id. (noting that party seeking transfer must state with particularity by affidavit or other proof the witnesses to be called, the significance of their testimony, and the extent of their inconvenience). Specifically, DDI states that Allison Wallach, Director of the Fund Management, is a potential witness who would testify in all respects as to the organization, management, and operation of the Fund. (DE 18, Ex. A, Certification of Jack Laudermilk, ¶ 4.) Michael Mershimer, Director of DDI's Loss Prevention Department, is a potential witness who would testify as to the operation and administration of the Loss Prevention Program. (ii at ¶ 5.) Jack Laudermilk is a potential witness who would testify to as to the litigation that occurred between DDI and its franchisees as alleged in the Plaintiffs' Complaint. (Id. at ¶ 6.) And Gary Zullig, Supervisor of Credit and Collections for DDI, is a potential witness who would testify as to the operation and administration of DDI's collection department. (Id. at ¶ 7.) All these potential witnesses reside and work in or near the District of Massachusetts. (Id. at ¶¶ 1, 4, 5 7.)
The Plaintiffs state in response that they will retain several expert witnesses, all of whom reside in Florida, who will testify as to the damages sustained by the Plaintiffs and class members as a result of DDI's wrongful conduct. (DE 22, Decl. of Manoochehr Fallah Moghaddam, ¶ 8.)
After considering this factor, the Court finds that the convenience of witnesses clearly weighs in favor of transfer. The Court notes that while DDI's witnesses would have an incentive to travel to the Southern District of Florida and testify on behalf of their employer, the inconvenience of doing so clearly weighs in favor of DDI. McEvily, 878 F. Supp. at 347. As noted above, all these witnesses would testify as to matters relevant to the issues raised in the Plaintiffs' Complaint, they all live and work in Massachusetts, and they all would be inconvenienced if their presence was required for trial in South Florida. Therefore, the Court finds that this factor clearly weighs in favor of transfer.
C. Access to Proof and Location of Relevant Documents
Here, the Court notes that the Plaintiffs' are alleging a class action on behalf of all franchisees who executed a franchise agreement with DDI between January 1, 1989 and August 31, 1999. (Compl. ¶ 25.) Clearly, the potential amount of documentation in this case is enormous. Moreover, the vast majority of these documents, including those concerning the Fund, DDI's Loss Prevention Program, DDI's litigation, and DDI's collections department are all in Massachusetts. (DE 18, Ex A., Certification of Jack Laudermilk, ¶¶ 4, 5, 7, 9 10.) In contrast, the only documents located here in South Florida are those relating to the Plaintiffs' franchisees. (DE 22, Decl. of Manoochehr Fallah Moghaddam, ¶ 5.) Because the bulk of the relevant documents are located in Massachusetts, the Court finds that this factor clearly weighs in favor of transfer. See Jewelmasters, Inc. v. May Dep't Stores Co., 840 F. Supp. 893, 896 (S.D.Fla. 1993) (location of majority of documents in California favored transfer to that district); Cortez v. First City Nat'l Bank of Houston, 735 F. Supp. 1021, 1024 (M.D.Fla. 1990) (relative ease of access to sources of proof an important consideration in motion to transfer).
D. Financial Ability to Bear Cost of Change
As to the financial ability to bear the costs of changing venue, the Court notes that the Plaintiffs have stated that they would incur significant additional expenses, experience disruption in the operation of their businesses, and be inconvenienced by a transfer. (DE 22, Decl. of Manoochehr Fallah Moghaddam, ¶ 9.) The Court further notes, however, that while "the relative bargaining power and financial positions of the parties can be a significant factor in a transfer decision," it alone cannot defeat transfer where, as here, the other factors clearly favor transfer. Bolton, 549 F. Supp. at 1317. Moreover, the Court notes that maintaining the above-styled cause in the Southern District of Florida would place a financial burden upon those witnesses who would have to take time off from their employment to travel and attend trial in the Southern District of Florida as opposed to the District of Massachusetts. Therefore, the Court finds that this factor clearly weighs in favor of transfer.
E. Public Interest
Finally, the Court notes that the public interest weighs in favor of transferring this case to the District of Massachusetts. The Plaintiffs have alleged that DDI misused advertising fees paid to it by franchisees from all over the United States. If this is true, such wrongdoing occurred at DDI's principle place of business in Randolph, Massachusetts. Therefore, the alleged acts that gave rise to this action occurred in the District of Massachusetts and the case should be tried there. Moreover, as noted above, many of the witnesses involved in the matter reside and work in Massachusetts. Therefore, the Court finds that transferring this case to the District of Massachusetts would promote the public interest.
III. Conclusion
In conclusion, the Court finds that after careful consideration of the above mentioned factors transferring the above-styled cause to the District of Massachusetts is appropriate. In particular, the Court finds that because this is a class action with potentially numerous plaintiffs and voluminous documentary evidence, the convenience of the witnesses and the location of the relevant documents, both located at DDI's principle place of business in Randolph, Massachusetts, weigh heavily in favor of transfer. See Bolton, 549 F. Supp. at 1316 (noting that many class actions are transferred to the district wherein the defendant corporation's home office, as well as many of the relevant documents, defendants, and witnesses are located).
Accordingly, after due consideration, it is
ORDERED AND ADJUDGED as follows:
1. The Defendant, Dunkin Donuts Inc.'s Motion To Transfer Venue To The United States District Court For The District of Massachusetts (DE 8) be and the same is hereby GRANTED;
2. The Clerk of the United States District Court for the Southern District of Florida is hereby DIRECTED to take all necessary steps and procedures to effect the expeditious transfer of the above-styled action to the United States District Court for the District of Massachusetts; and
3. To the extent not otherwise disposed of herein, all pending Motions are hereby DENIED without prejudice, with leave for refiling in the transferee court.
DONE AND ORDERED in Chambers at Fort Lauderdale, Broward County, Florida, this 13th day of August, 2002.