Opinion
No. SA-05-CA-1038-RF.
March 23, 2006
ORDER DENYING DEFENDANT'S MOTION TO DISMISS PURSUANT TO RULE 12(b)(3)
BEFORE THE COURT is Defendant's Motion to Dismiss Pursuant to Rule 12(b)(3) (Docket No. 4), filed December 12, 2005 and Plaintiff's Response (Docket No. 16), filed February 3, 2006. The parties appeared before the Court for a hearing on this matter on March 22, 2006. After due consideration of the oral arguments and written briefs, the Court is of the opinion that Defendant's Motion to Dismiss Pursuant to Rule 12(b)(3) should be DENIED WITHOUT PREJUDICE.
FACTUAL AND PROCEDURAL BACKGROUND
Plaintiff and Defendants are competitors in the field of manufacture and sale of oilfield pipe testing equipment. Defendants Averitt and Hanlon are co-owners of New Tech Systems, Inc. Plaintiff is a Texas corporation with its principal place of business in San Antonio, Texas. Defendant New Tech Systems, Inc. is a Texas corporation with its principal place of business in Odessa, Texas. Defendant Hanlon is a Texas resident whose primary residence is in Odessa, Texas. Defendant Averitt is a Texas resident whose primary residence is in Odessa, Texas.
There are three suits pending between this Plaintiff and these Defendants. In December 2002, Plaintiff filed a patent infringement action against Defendants in the Western District of Texas — Midland-Odessa Division. Subsequently, in May 2005 Plaintiffs filed a second suit in Western District of Texas — Midland-Odessa Division. The second suit alleged the following causes of action: false advertising, passing off, reverse passing off, trade dress infringement, tortious interference with prospective business relations, business disparagement, common law trademark infringement, trademark dilution, and injury to business reputation and civil conspiracy. In the second suit, Plaintiff filed a Motion for Leave to Amend Complaint, which Judge Junell denied. In the September 21, 2005 Order Denying Defendants' Motion for Leave to File a First Amended Complaint, Judge Junell noted that Plaintiff failed to comply with Local Rule CV-7(h), which requires that Plaintiff contact opposing counsel and determine whether the motion is opposed. Thereafter, on October 21, 2005, Plaintiff filed suit in the Western District of Texas — San Antonio Division alleging false advertising, trade dress infringement, trademark dilution, and injury to business and false marking of an unpatented article.
On December 12, 2005, Defendants filed a Motion to Dismiss Pursuant to Rule 12(b)(3). Defendants argue that 28 U.S.C. § 1391(b)(1) and (2) mandate that this case be venued in the Western District of Texas — San Antonio Division. However, the Court cannot agree with Defendants' reading of the statute. 28 U.S.C. § 1391(b)(1) states that where jurisdiction is not premised solely on diversity jurisdiction, the case may be brought in "a judicial district where any defendant resides, if all defendants reside in the same state." Similarly, subsection (2) provides that venue is proper in "a judicial district in which a substantial part of the events or omissions giving rise to the claim occurred. . . ." Neither subsection (1) nor subsection (2) contains a divisional requirement. Instead, each subsection refers only to the proper district in which a case may be filed. Therefore, under 28 U.S.C. § 1391(b), Plaintiff was merely required to file the case within the Western District of Texas, not necessarily in any particular division. Accordingly, because transfer pursuant to § 1406(a) is only permitted if venue is improper, Defendants' request that the Court transfer the case pursuant to 28 U.S.C. § 1406(a) must be denied.
However, the inquiry does not end there. As the Court noted in its February 21, 2006 Advisory, 28 U.S.C. § 1404(a) is "broad enough that a judge can order transfer on his own initiative, but if the court is considering this course, it should make that possibility known to the parties so that they may present their views about the transfer." The Court received and read the requested briefing. 28 U.S.C. § 1404(a) permits a district court to transfer a civil action "to any other district or division where it might have been brought" if to do so is appropriate "[f]or the convenience of parties and witnesses, [and] in the interest of justice." The Fifth Circuit has determined that the first issue in consideration of a motion to transfer under § 1404(a) is whether the district or division to which transfer is sought is in fact one where the action "might have been brought." Accordingly, the Court must make the threshold determination of whether the Western District of Texas — Midland-Odessa Division is a judicial district in which this action might have been brought. Both the jurisdictional facts pleaded in this case, as well as the fact that two other suits between the same parties were filed in the Midland-Odessa Division, make it clear that this case could have originally been brought in the Western District of Texas — Midland-Odessa Division.
15 WRIGHT, MILLER, AND COOPER, FEDERAL PRACTICE AND PROCEDURE § 3844 (2d ed. 1986).
In re Horseshoe Entm't, 337 F.3d 429, 433 (5th Cir. 2003).
The Court is thus, in the exercise of its discretion, left to parse the relative importance of the private and the public interests contemplated in section 1404(a) in order to determine whether factors relevant to those interests require transfer to the alternative venue proposed by Defendant. "Section 1404(a) is intended to place discretion in the district court to adjudicate motions for transfer according to an individualized, case-by-case consideration of convenience and fairness." Such an exercise of discretion will not be disturbed on appeal, absent an abuse of discretion. The burden is on the moving party to establish why there should be a change in forum. In doing so, Defendant must persuade the Court that transfer would signify more than a shift in inconvenience from one party to another. The court must consider "all 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 forum."
Stewart Org., Inc. v. Ricoh Corp., 487 U.S. 22, 29 (1988).
Peteet v. Dow Chemical Co., 868 F.2d 1428, 1436 (5th Cir. 1989) (citing Marbury-Pattillo Constr. Co. v. Bayside Warehouse Co., 490 F.2d 155, 158 (5th Cir. 1974).
Time, Inc. v. Manning, 366 F.2d 690, 698 (5th Cir. 1966).
Van Dusen, 376 U.S. at 646.
15 C. WRIGHT A. MILLER E. COOPER, FEDERAL PRACTICE AND PROCEDURE § 3847 at 370 (1986).
Plaintiff's choice of forum is relevant, though not dispositive. The weight that is to be assigned to this factor is imprecise in the abstract because in each case the facts may be more or less compelling. Plaintiff argues that this case and the other two filed in Midland-Odessa do not turn on a common nucleus of operative facts. Plaintiff also contends that the Court should not transfer venue to the Midland-Odessa Division in part because that division is short-staffed and has a congested docket. Further, Plaintiff notes that in the two other cases filed in the Midland-Odessa Division, Judge Junell petitioned the Fifth Circuit for the appointment of a Judge from the U.S. Court of International Trade to handle the cases. The Court first notes that Judge Junell has transferred the second Midland case to Judge Restani. But more importantly, the relevant factors in determining a transfer of forum do not include speediness to trial or resolution. Plaintiff produced no evidence of unusual circumstances that suggest that a venue in Midland-Odessa will prevent or delay resolution in that forum in any meaningful way. Instead, as stated above, the Court is to consider the convenience of the parties and witnesses and the interests of justice.
In re Horseshoe Entm't, 305 F.3d 354, 358-59 (5th Cir. 2002) (citing Garner v. Wolfinbarger, 433 F.2d 117, 119 (5th Cir. 1970)); see also Norwood v. Kirkpatrick, 349 U.S. 29, 32 (1955) (noting that a plaintiff's choice of forum is but one relevant factor for consideration under § 1404(a)).
In re Horseshoe, 337 F.3d at 434 ("We recognized that in rare and special circumstances a factor of `delay' . . . might be relevant . . . but only if such circumstances are established by clear and convincing evidence." Id. As true in Horseshoe, here, "[n]o such evidence exists. . . ." Id.).
As Defendants point out, the Fifth Circuit has stated that:
[t]he determination of "convenience" turns on a number of private and public interest factors, none of which are given dispositive weight. The private concerns include: (1) the relative ease of access to sources of proof; (2) the availability of compulsory process to secure the attendance of witnesses; (3) the cost of attendance for willing witnesses; and (4) all other practical problems that make trial of a case easy, expeditious and inexpensive. The public concerns include: (1) the administrative difficulties flowing from court congestion; (2) the local interest in having localized interests decided at home; (3) the familiarity of the forum with the law that will govern the case; and (4) the avoidance of unnecessary problems of conflict of laws of the application of foreign law.
In re Volkswagen AG, 371 F.3d 201, 203 (5th Cir. 2004).
The Court agrees with the parties' assessment that many of these factors are neutral. For example, neither the familiarity of the forum law nor the avoidance of conflict of laws comes into play in this case.
Defendants rely primarily on their belief that Plaintiff is forum shopping to support their request for dismissal or transfer of this case. However, the Court must consider all of the factors discussed above, and "[u]nless the weight of these factors strongly favor the party seeking transfer, `the plaintiff's choice of forum will seldom be disturbed.'" As Plaintiffs point out in their supplemental briefing, convenience of witnesses, most importantly non-party witnesses, is often considered the most important factor in the transfer analysis. "The defendant seeking transfer `must specifically identify the key witnesses and outline the substance of their testimony.'" The parties disagree about where the events at issue occurred. Defendants argue that the Midland-Odessa Division is more convenient for the witnesses, but Defendants identify only party witnesses and provide no outline of the substance of their testimony. Plaintiff identify at least three non-party witnesses, and it details both how the San Antonio Division is more convenient in terms of travel time and cost, as well as an outline of the anticipated testimony from these witnesses.
Salinas v. O'Reilly Automotive, Inc., 358 F.Supp.2d 569, 571 (N.D.Tex. 2005).
Id. at 572 (citing Isbell v. DM Records, Inc., 2004 WL 1243153, at *14 (N.D.Tex. June 4, 2004)).
Id. (citing N2 Consulting, LLC v. Engineered Fastener Co., 2002 WL 31246770, at *3 (N.D.Tex. Oct. 2, 2002) (internal quotations omitted) (quoting Dupre v. Spanier Marine Corp., 810 F.Supp. 823, 825 (S.D.Tex. 1993)).
The Court is of the opinion that Defendants have not carried the burden necessary to warrant a transfer under § 1404(a), and their argument for dismissal pursuant to Fed.R.Civ.P. 12(b)(3) was unsuccessful. Therefore, the Court finds that Defendants' Motion to Dismiss (Docket No. 4) should be DENIED WITHOUT PREJUDICE.
It is so ORDERED.