Opinion
1:24-CV-133-DII
08-01-2024
WILLIAMS O & G RESOURCES, LLC, Plaintiff, v. DIAMONDBACK ENERGY, INC., and DIAMONDBACK E&P LLC, Defendants.
ORDER
Robert Pitman, United States District Judge
Before the Court is Defendants Diamondback Energy, Inc. and Diamondback E&P LLC's (collectively, “Defendants”) renewed motion to transfer venue to the Midland-Odessa Division of this Court. (Dkt. 24). Plaintiff Williams O & G Resources, LLC (“Plaintiff”) filed a response in opposition, (Dkt. 30), and Defendants filed a reply, (Dkt. 36). Having considered the parties' briefs, the record, and the relevant law, the Court finds that the motion should be granted.
I. BACKGROUND
This case arises out of a contractual dispute relating to a tract of land situated in Reeves County, Texas (the “Mineral Reserved Land”). (Am. Compl., Dkt. 22, at 4). Plaintiff owns the soil and surface estate and 15/16ths of the minerals in the Mineral Reserved Land, and the State of Texas owns the remaining 1/16th of the minerals. (Id.). Plaintiff brings suit against Defendants, who allegedly owned the oil and gas leasehold estate of the second intermediate rights in the Mineral Reserved Land until October 31, 2023. (Id. at 9-10). Plaintiff alleges that Defendants only partially performed their obligations under an agreement with Plaintiff. (Id. at 19-20). Plaintiff brings claims under the Texas Relinquishment Act, Tex. Nat. Res. Code § 52.171, et seq.; the implied covenant to manage and administer the lease as would a reasonably prudent oil and gas operator/lessee; breach of contract; and the Texas Free Royalty Act, Tex. Nat. Res. Code § 51.054, et seq. (Am. Compl., Dkt. 22, at 20-27).
Plaintiff filed suit in the Austin Division of the United States District Court for the Western District of Texas on February 6, 2024, (Dkt. 1), and filed an amended complaint on May 31, 2024, (Dkt. 22). On June 13, 2024, Defendants filed a renewed motion to dismiss the complaint pursuant to Federal Rule of Civil Procedure 12(b)(6), (Dkt. 23), and renewed motion to transfer venue to the Midland-Odessa Division of the Western District of Texas, (Dkt. 24). Plaintiff opposed both motions, (Dkts. 31, 30, respectively), and Defendants filed replies to both motions, (Dkts. 35, 36, respectively).
II. LEGAL STANDARD
Section 1404 provides that “[f]or 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). As such, “[t]he threshold question in applying the provisions of § 1404(a) is whether the suit could have been brought in the proposed transferee district.” In re Volkswagen AG, 371 F.3d 201, 203 (5th Cir. 2004) (“Volkswagen I”). If so, the Court turns to consideration of “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.” Peteet v. Dow Chem. Co., 868 F.2d 1428, 1436 (5th Cir. 1989) (quoting 15 C. Wright, A. Miller & E. Cooper, Federal Practice and Procedure § 3847, at 370 (1986)).
The relevant factors include matters of both private and public interest. Volkswagen I, 371 F.3d at 203; Action Indus., Inc. v. U.S. Fid. & Guar. Co., 358 F.3d 337, 340 (5th Cir. 2004). The private-interest factors include: (1) the relative ease of access to sources of proof; (2) the availability of compulsory process to secure witnesses' attendance; (3) the willing witnesses' cost of attendance; and (4) all other practical problems that make the case's trial easy, expeditious, and inexpensive. Volkswagen I, 371 F.3d at 203 (citing Piper Aircraft Co. v. Reyno, 454 U.S. 235, 241 n.6 (1981)). The public-interest factors include: (1) the administrative difficulties flowing from court congestion; (2) the local interest in having local issues decided at home; (3) the forum's familiarity with the governing law; and (4) the avoidance of unnecessary conflict-of-law problems involving the application of foreign law. Id. No single factor is dispositive. Id.
The Court must also “give some weight to the plaintiffs' choice of forum.” Atl. Marine Const. Co., Inc. v. U.S. Dist. Court for W. Dist. of Texas, 571 U.S. 49, 63 n.6 (2013). However, the plaintiff's venue choice “is neither conclusive nor determinative.” In Re: Horsehoe Ent., 337 F.3d 429, 434 (5th Cir. 2003). Rather, the party seeking transfer must show “good cause:” a moving party, in order to support its claim for a transfer, must satisfy the statutory requirements and clearly demonstrate that a transfer is “[f]or the convenience of parties and witnesses, in the interest of justice.” Humble Oil & Refining Co. v. Bell Marine Serv., Inc., 321 F.2d 53, 56 (5th Cir. 1963). Thus, when the transferee venue is “not clearly more convenient than the venue chosen by the plaintiff, the plaintiff's choice should be respected.” In re Volkswagen of Am., Inc., 545 F.3d 304, 315 (5th Cir. 2008) (“Volkswagen II”). But when the movant demonstrates that the transferee venue is clearly more convenient, “it has shown good cause and the district court should therefore grant the transfer.” Id.
III. DISCUSSION
Defendants move to transfer this case to the Midland-Odessa Division of the Western District pursuant to 28 U.S.C. § 1404(a). (Mot. Transfer, Dkt. 24, at 2). In essence, Defendants argue that Defendants are headquartered in the Midland-Odessa Division and the Midland-Odessa Division is the more convenient venue for the parties and non-party witnesses; non-electronic evidence will likely be located in or near the Midland-Odessa Division; and the parties have no ties to the Austin Division. (Id. passim). In response, Plaintiff argues that the Midland-Odessa Division is not the clearly more convenient forum. (Transfer Resp., Dkt. 30, at 1). The Court will analyze the private and public interest factors to determine whether Defendants have met their burden to demonstrate that the Midland-Odessa Division is “clearly more convenient than the venue chosen by the plaintiff.” Volkswagen II, 545 F.3d at 315.
At the outset, the Court must consider whether the suit could have been brought in the Midland-Odessa Division. Volkswagen I, 371 F.3d at 203 (“[T]he first determination to be made is whether the judicial district to which transfer is sought would have been a district in which the claim could have been filed.”). All divisions within a district are proper venues for any case that may be filed within that district. See Brooks v. J.B. Hunt Transp., Inc., No. 2:18-CV-00465-RSP, 2019 WL 13210805, at *1 (E.D. Tex. May 10, 2019). While Defendants do not address this threshold question, Plaintiff concedes that the case could have been brought in the Midland-Odessa Division. (Transfer Resp., Dkt. 30, at 8). The Court agrees with Plaintiff that it could have originally brought this action in the Midland-Odessa Division of this District. Plaintiff is subject to personal jurisdiction in this District because the tract of land at issue, the Mineral Reserved Land, is located in the Midland-Odessa Division, and a substantial portion of the events at issue give rise to venue in the Midland-Odessa Division. Therefore, the preliminary question is satisfied.
The first private interest factor-access to evidence-weighs in favor of transfer. “[T]his factor weighs in favor of transfer where the current district lacks any evidence relating to the case.” In re TikTok, Inc., 85 F.4th 352, 358 (5th Cir. 2023). “But when the vast majority of the evidence is electronic, and therefore equally accessible in either forum, this factor bears less strongly on the transfer analysis.” Id. (quoting In re Planned Parenthood Fed'n Am., Inc., 52 F.4th 625, 630 (5th Cir. 2022)). Defendants argue that “the sources of proof are located in or near the Midland-Odessa Division,” while no “relevant evidence is located in Austin.” (Mot. Transfer, Dkt. 24, at 8). Accordingly, Defendants argue that this factor weighs in favor of transfer. In response, Plaintiff argues that much of the evidence likely is in or could be converted to electronic form or it could be easily moved to the Austin Division. (Transfer Resp., Dkt. 30, at 11). Accordingly, Plaintiff argues that this factor is neutral. The Court agrees with Defendants. While some of the evidence may be electronic, Defendants have alleged that a substantial portion of the documentary and physical evidence at issue in this case is located in the Midland-Odessa Division. Plaintiff has not identified a single piece of evidence in this division. Accordingly, this first factor weighs in favor of transfer.
The second factor focuses on “the availability of compulsory process to secure the attendance of witnesses.” Volkswagen II, 545 F.3d at 315. “This factor favors transfer where nonparty witnesses are outside the District's subpoena power and a proper venue that does enjoy absolute subpoena power for both depositions and trial is available.” In re TikTok, 85 F.4th at 360 (cleaned up). District courts have the authority to compel non-party witnesses “to attend a trial, hearing, or deposition” conducted “within 100 miles of where the person resides, is employed, or regularly transacts business in person.” Fed.R.Civ.P. 45(c)(1)(A). Neither party has identified any relevant witnesses who would not be willing witnesses. Defendants argue that the most likely witnesses in this case are its own employee witnesses, who are located in the Midland-Odessa Division. (Mot. Transfer, Dkt. 24, at 6-7). Defendants also identify three LLCs in the Midland-Odessa Division and one LLC located in the Northern District of Texas who bought a portion of the leasehold at issue. (Id. at 7; see also Ex. A, Dkt. 24-1, ¶ 12). Defendants also note that Plaintiff's sole managing member is a resident of New Mexico, so Plaintiff's representative will have to travel to either division. (Mot. Transfer, Dkt. 24, at 6). Accordingly, Defendants argue that this factor weighs in favor of transfer. In response, Plaintiff argues that the location of party employees is not relevant to this factor and that the LLCs will not be relevant to the case, as they purchased the leasehold after the relevant timeframe at issue in this case. (Transfer Resp., Dkt. 30, at 11-14). Accordingly, Plaintiff argues that this factor weighs against transfer. The Court finds that this factor is neutral. The Court notes that any discussion of current employees is irrelevant to its analysis of this factor, as current company employees are considered party witnesses. See In re Pandora Media, LLC, No. 2021-172, 2021 WL 4772805 (Fed. Cir. Oct. 13, 2021). Further, it seems unlikely that representatives of the various LLCs will testify in this case, as they purchased the leasehold after the relevant timeframe at issue in this case. Accordingly, the Court finds that this factor weighs neither for or against transfer, as there is no indication that there are any unwilling witnesses.
The third private interest factor focuses on the cost of attendance for willing witnesses. Volkswagen II, 545 F.3d at 317. “Testifying imposes myriad external costs on witnesses,” and the third factor “attempts to internalize and minimize those costs by favoring the venue that is more convenient from the perspective of willing witnesses.” In re Clarke, 94 F.4th 502, 514 (5th Cir. 2024). Courts in the Fifth Circuit “assess[] convenience as a function of distance.” Id. If the transferee venue is more than one hundred miles from the transferor, “the factor of inconvenience borne by witnesses positively and linearly scales with the additional distance they must travel.” Id. All potential material and relevant witnesses must be considered. Fujitsu Ltd. v. Tellabs, Inc., 639 F.Supp.2d 761, 765 (E.D. Tex. 2009). Defendants argue that the most likely witnesses in this case are its own employee witnesses, who are located in the Midland-Odessa Division. (Mot. Transfer, Dkt. 24, at 6- 7). Defendants also note that Plaintiff's sole managing member is a resident of New Mexico, so Plaintiff's representative will have to travel to either division. (Id. at 6). Accordingly, Defendants argue that this factor weighs in favor of transfer. Plaintiff argues that this factor is neutral because the Austin Division is more convenient for Plaintiff's sole representative and for an Oklahoma-based witness, while recognizing that the Midland-Odessa Division is more convenient for Defendants' employees. (Transfer Resp., Dkt. 30, at 14-15). The Court finds that this factor weighs in favor of transfer. Defendants have identified a number of employees who live in the Midland-Odessa Division and likely will be called as witnesses. On the other hand, Plaintiff has not identified any willing witnesses who live in the Austin Division. Plaintiff's sole likely witness lives in Albuquerque, New Mexico, which is 400 miles from the Midland-Odessa Division and 700 miles from the Austin Division. Accordingly, this factor favors transfer.
“When considering the private interest factors, courts must also consider all other practical problems that make trial of a case easy, expeditious and inexpensive.” Volkswagen II, 545 F.3d at 315. Defendants argue that this factor favors transfer because the case is in its infancy and because key witnesses and evidence are located in the Midland-Odessa Division. (Mot. Transfer, Dkt. 24, at 9). Plaintiff argues that this factor is neutral. (Transfer Resp., Dkt. 30, at 15-16). The Court agrees with Plaintiff. This case is in its early stages, but Defendants have not argued why this fact alone would make trial in this case easier, more expeditious, and less expensive in the Midland-Odessa Division than the Austin Division-other than pointing to the location of key witnesses and evidence, which relate to the other private interest factors, not this one. Further, neither party has alleged that there is related pending litigation that would affect the ease or expense of trying this case in one division or another. Accordingly, this factor is neutral, as the parties have identified no additional practical problems weighing for or against transfer.
The Court next turns to the public interest factors. The first public interest factor looks to “the administrative difficulties flowing from court congestion.” Volkswagen II, 545 F.3d at 315. “This factor concerns whether there is an appreciable difference in docket congestion between the two forums.” Universal Connectivity Techs. Inc. v. HP Inc., No. 1:23-CV-1177-RP, 2024 WL 3305724, at *6 (W.D. Tex. July 3, 2024) (citation omitted). While the Fifth Circuit has stated that this factor can be “speculative,” it acknowledges that, “to the extent docket efficiency can be reliably estimated, the district court is better placed to do so than this court.” Planned Parenthood, 52 F.4th at 631. The Court disagrees with the parties' contentions that this factor is neutral. (Mot. Transfer, Dkt. 24, at 10; Transfer Resp., Dkt. 30, at 17). 1,496 civil cases were filed in the Austin Division and 213 civil cases were filed in the Midland-Odessa Division last year. See Western District of Texas 2023 Fiscal Year Statistical Report, https://www.txwd.uscourts.gov/wp-content/uploads/District%20Statistics/2023/Fiscal%20Year%20Statistics%202023.pdf. Each division has one active district judge. While “a § 1404(a) transfer cannot be granted solely because of court congestion,” In re Clarke, 94 F.4th at 515, this factor strongly favors the intradivision transfer of this case.
The second public interest factor examines the benefits of deciding local issues at home. The factor focuses on the “significant connections between a particular venue and the events that gave rise to a suit.” See In re Google LLC, 2021 WL 4427899, at *5 (Fed. Cir. Sept. 27, 2021). The local interest analysis focuses on “the interest of non-party citizens in adjudicating the case.” In re Clarke, 94 F.4th at 511 (emphasis in original). Defendants argue that the Midland-Odessa Division has a greater local interest because the key events in the case “occurred in or near the Midland-Odessa Division.” (Mot. Transfer, Dkt. 24, at 10). In response, Plaintiff argues that the Texas General Land Office is located in the Austin Division and that New Mexico also has an interest in the litigation by virtue of Plaintiff's sole member being located in Albuquerque. (Transfer Resp., Dkt. 30, at 18). Neither party identifies any non-party citizens with a significant interest in this case, so the factor is neutral.
The last two public interest factors are neutral. Both forums are familiar with Texas law and there are no issues regarding conflict of laws.
Considering all of the public and private factors together-three factors favor transfer and five factors are neutral-and giving limited weight to Plaintiffs' choice of forum, the Court finds that Defendants have met their burden of showing that the Midland-Odessa Division is “clearly more convenient” than the venue chosen by Plaintiff. Volkswagen II, 545 F.3d at 315. Accordingly, the Court will grant Defendants' motion to transfer this case to the Midland-Odessa Division of this District. Because the Court finds that transfer is warranted, the Court does not reach Defendants' renewed motion to dismiss pursuant to Rule 12(b)(6). (Dkt. 23).
See Andrade v. Chojnacki, 934 F.Supp. 817, 832-33 (S.D. Tex. 1996) (“While there is ordinarily a strong presumption in favor of plaintiff's choice of forum, this factor is not significant where, as in the case at bar, the action has relatively little relationship to the chosen forum.”).
IV. CONCLUSION
For the reasons given above, IT IS ORDERED that Defendants' renewed motion to transfer venue, (Dkt. 24), is GRANTED.
IT IS FURTHER ORDERED that this case shall be TRANSFERRED the Midland-Odessa Division of the Western District of Texas.