Opinion
99 Civ. 10840 (JGK)(AJP)
March 13, 2000
OPINION AND ORDER
Defendants have moved to transfer this case, which stems from alleged self-dealing by an information systems manager at a New York insurance company, to the United States District Court for the Central District of California pursuant to 28 U.S.C. § 1404(a). For the reasons discussed below, defendants have not met their heavy burden of showing that a change of venue is appropriate "[f]or the convenience of parties and witnesses, in the interest of justice." 28 U.S.C. § 1404(a). Therefore, defendants' transfer motion is DENIED .
FACTS The Parties
Plaintiff Clarendon Insurance Company is an insurance company incorporated in New Jersey, with its principal place of business in New York. (Compl. ¶ 1.) Defendant Gene Pascual is sole shareholder, founder and president of defendant Quality System Solutions Corp. ("QSS"), which is a California software development corporation with its principal place of business in City of Industry, California. (Compl. ¶¶ 3-4; Answer ¶¶ 3-4; Pascual Aff. ¶ 2.)
Clarendon hired Pascual on January 6, 1989 as a computer programmer in its Diamond Bar, California office. (Dkt. No. 19: Sbaschnig Aff. ¶ 3.) Clarendon's Diamond Bar office was closed and Pascual was transferred to New York in 1995. (Id. ¶ 4.) According to Clarendon, the company paid Pascual's moving expenses, Pascual lived in a New Jersey home purchased with a $50,000 loan from Clarendon, and Pascual worked out of Clarendon's New York office from June 1995 through February 2, 1999, when he resigned. (Id. ¶¶ 4-6.) In contrast, Pascual claims that he "lived and worked in California at all times relevant to this action." (Pascual Br. at 5; Pascual Aff. ¶¶ 2, 6; see also Pascual Reply Br. at ¶ n. 5.) The Court, however, finds Pascual's assertions questionable in light of tax documents showing that Pascual deducted moving expenses and was working in New York and living in New Jersey during this time period. (See Sbaschnig Aff. Ex. A: Pascual IRS 1996 Employee Moving Expense Information; id. Ex. B: Pascual 1996 W-4 Employee Withholding Allowance Certificate; id. Ex. C: Pascual 1998 W-2.)
Pascual offers a recent Internet "yellow pages" printout indicating that Clarendon still maintains an office in Diamond Bar, California. (See Pascual Aff. Ex. C: Go Network Yellow Pages Listing.) Clarendon describes that office as "staffed by three persons who do ministerial work in connection with Clarendon's subsidiary," North American Risk Services ("NARS"). (Sbaschnig Aff. ¶ 5.)
The Transaction At Issue
In Fall 1997, Clarendon assigned Pascual to identify potential third party vendors to develop a computer system for processing insurance applications through the Internet. (Sbaschnig Aff. ¶¶ 8-9.) Pascual identified an entity known as Information Providers Group ("IPG"), which Clarendon alleges was a mere shell for Pascual's own company, QSS. (Compl. ¶¶ 12, 22-23; Answer ¶¶ 12, 22-23; Sbaschnig Aff. ¶ 9.)
Meetings to discuss the project took place both in New York and California. (Compl. ¶¶ 13-14; Answer ¶¶ 13-14; Sbaschnig Aff. ¶ 11.) In addition to Pascual, all the meetings were attended by Mary Sbaschnig, Pascual's New York based supervisor at Clarendon, and another Clarendon official, James Bain. (Compl. ¶ 13; Answer ¶ 13; Sbaschnig Aff. ¶ 10.) Also present at the first meeting, which took place at the NARS office in California, were Richard Carale and Pierre Beauvoir, allegedly IPG's principals. (Id.) At the second meeting, in New York, a presentation was given by Mike Desai, a computer consultant working with Pascual. (Compl. ¶ 14; Answer ¶ 14.) At that meeting, Clarendon was told that three other IPG employees — John Said, Loan Nguyen and Carl Service — would be working on the project. (Id.) IPG presented a letter contract to Clarendon in New York, which Clarendon signed in New York. (Answer Ex. A: 10/23/97 Letter Agreement; Sbaschnig Aff. ¶ 13; Compl. ¶ 20; Answer ¶ 20.)
According to Clarendon, in early 1998 it discovered that IPG had dropped out of the picture and that Pascual had decided to develop the project himself through QSS. (Sbaschnig Aff. ¶ 14; Compl. ¶¶ 21-22; Answer ¶¶ 21-22.) Because of time constraints, Clarendon decided to permit QSS to complete the project, and Pascual promised to resign as president of QSS and to develop the project on a cost pass-through basis. (Sbaschnig Aff. ¶ 15; Compl. ¶¶ 26-29; Answer ¶¶ 26-29.) This resulted in a written agreement between Clarendon and QSS in February 1999. (Compl. ¶ 30 Ex. 1; Answer ¶ 30.)
Clarendon conducted an audit of QSS's books using a California auditing firm. (Sbaschnig Aff. ¶ 16; Compl. ¶ 31.) The audit showed at least $600,000 in overcharges. (Id.) Although Pascual's Answer (6 31) denies the $600,000 overcharge, e-mails from Pascual to Clarendon in April-May 1999 admit and apologize for $600,000 of overcharges. (Sbaschnig Aff. ¶¶ 18-19 Exs. H-I.)
Pascual resigned from Clarendon on or about February 2, 1999. (Sbaschnig Aff. ¶¶ 6-7 Exs. D-E.)
On October 27, 1999, Clarendon filed suit against Pascual and QSS in this District, asserting claims including fraud, breach of fiduciary duty and breach of contract. (Compl. ¶¶ 37-83.)
Clarendon points to two New York based Clarendon employees in addition to Sbaschnig and Bain who have knowledge about the project and may serve as witnesses. (Sbaschnig Aff. ¶ 20.) Pascual claims that except for Clarendon's employees, everyone involved with the development of the program — Beauvoir, Carale, Desai, and "most likely" Said, Nguyen and Service — lives in California. (Pascual Aff. ¶¶ 3-5.)
Pascual argues that "the overwhelming weight of the relevant factors" under 28 U.S.C. § 1404(a) supports transferring this case to the United States District Court for the Central District of California. (Pascual Br. at 2.) Clarendon, which brought this case in the Southern District of New York in the first place, disagrees, arguing that Pascual has not made a sufficient showing to overcome the deference owed to the plaintiff's choice of forum. (Clarendon Br. at 2.)
ANALYSIS I. GOVERNING LEGAL STANDARDS
The change of venue statute 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). "Thus, a `court may transfer an action only if 1) the plaintiff could have brought the case initially in the proposed transferee forum; and 2) the transfer would promote the convenience of parties and witnesses and would be in the interests of justice.'" Coker v. Bank of America, 984 F. Supp. 757, 764 (S.D.N.Y. 1997) (Keenan, D.J. Peck, M.J.) (quotingHoward v. Four Seasons Hotels Ltd., 96 Civ. 4587, 1997 WL 107633 at *1 (S.D.N.Y. March 10, 1997)); accord, e.g., Old Republic Ins. Co. v. Hansa World Cargo Serv., Inc., 51 F. Supp.2d 457, 467 (S.D.N.Y. 1999); Geiger v. E.I. Du Pont Nemours Co., 96 Civ. 2757, 1997 WL 83291 at *3 (S.D.N.Y. Feb. 27, 1997).
As to the first prong, neither party disputes that both this District and the Central District of California would have been a proper forum under 28 U.S.C. § 1391, which provides that a case may be brought in "a judicial district in which a substantial part of the events or omissions giving rise to the claim occurred." 28 U.S.C. § 1391(a)(2). (See Compl. ¶ 6; Answer ¶ 6; Pascual Br. at 3; Clarendon Br. at 6.) A substantial part of the events giving rise to this lawsuit took place in both the Central District of California and the Southern District of New York. Thus, the remaining question, under the second prong, is whether the case should be transferred under § 1404(a) as a matter of judicial discretion. See, e.g., Filmline (Cross-Country) Prods., Inc. v. United Artists Corp., 865 F.2d 513, 520 (2d Cir. 1989) ("The determination whether to grant a change of venue requires a balancing of conveniences, which is left to the sound discretion of the district court."); see also, e.g., Coker v. Bank of America, 984 F. Supp. at 764 ( cases cited therein).
As to the second prong, the movant — here, Pascual and QSS — "must satisfy the `heavy' burden of demonstrating that a weighing of the appropriate factors dictates that the case be transferred." Coker v. Bank of America, 984 F. Supp. at 764;see also, e.g., Warrick v. General Electric Co., 70 F.3d 736, 740-41 (2d Cir. 1995) (plaintiff's forum choice entitled to "substantial consideration"); Panama Processes, S.A. v. Cities Serv. Co., 650 F.2d 408, 414 (2d Cir. 1981); Factors Etc., Inc. v. Pro Arts, Inc., 579 F.2d 215, 218 (2d Cir. 1978) ("There can be no doubt that the burden is on the defendant, when it is the moving party, to establish that there should be a change of forum."), cert. denied, 440 U.S. 908, 99 S.Ct. 1215 (1979); S-FER Int'l, Inc. v. Paladion Partners, Ltd., 906 F. Supp. 211, 213 (S.D.N.Y. 1995) (Koeltl, D.J.); Xpressions Footwear Corp. v. Peters, 885 F. Supp. 630, 633 (S.D.N.Y. 1995) (Koeltl, D.J.).
See also, e.g., Old Republic Ins. Co. v. Hanza World Cargo Serv., 51 F. Supp.2d at 467; Howard v. Four Seasons Hotels, 1997 WL 107633 at *2 ("Section 1404(a) requires the moving party to satisfy a heavy burden."); Geiger v. Du Pont, 1997 WL 83291 at *4 (same); Raines v. Switch Mfg. Corp., 96 Civ. 2361, 1996 WL 413720 at *1 (S.D.N.Y. July 24, 1996) (movant "has the burden of establishing the propriety of the transfer by a clear and convincing showing"); Douglas v. Syracuse Univ. College of Law, 94 Civ. 9195, 1995 WL 555693 at *1 (S.D.N.Y. Sept. 18, 1995);Dwyer v. General Motors Corp., 853 F. Supp. 690, 692 (S.D.N Y 1994).
"`The moving party may meet its burden by applying the following established factors to guide the court's discretion:'"
"(1) the place where the operative facts occurred; (2) the convenience of the parties; (3) the convenience of the witnesses; (4) the relative ease of access of proof; (5) the availability of process to compel the attendance of unwilling witnesses; (6) the plaintiff's choice of forum; (7) the forum's familiarity with the governing law; and (8) trial efficiency and the interests of justice."Coker v. Bank of America, 984 F. Supp. at 764 (quoting Howard v. Four Seasons Hotels, 1997 WL 107633 at *2) ( cases cited inCoker); see also, e.g., Wechsler v. Macke Int'l Trade, Inc., 99 Civ. 5725, 1999 WL 1261251 at *3 (S.D.N.Y. Dec. 27, 1999); Smart v. Goord, 21 F. Supp.2d 309, 315 (S.D.N.Y. 1998); Geiger v. DuPont, 1997 WL 83291 at *4; Xpressions Footwear Corp. v. Peters, 885 F. Supp. at 633; Tomchuck v. Union Trust Co., 875 F. Supp. 242, 243 (S.D.N.Y. 1995) (Koeltl, D.J.).
II. APPLICATION OF THESE FACTORS DOES NOT SUPPORT TRANSFER
The first factor, the place where the underlying facts of the case took place, is a wash — there was activity in both New York and California, and there is no way to tell from the parties' submissions at this stage of the case whether more activity took place in New York or California. See, e.g., Fintech Research Assocs., Inc. v. Dynagro Corp., 96 Civ. 8156, 1998 WL 148423 at *3 (S.D.N.Y. March 27, 1998) (where facts occurred in both New York and California, location where operative facts occurred does not favor either party); Aarons v. Worldtel Servs., Inc., 95 Civ. 8415, 1996 WL 185714 at *4 (S.D.N.Y. April 17, 1996) (same); GPA Inc. v. Liggett Group, Inc., 94 Civ. 5735, 1994 WL 537017 at *2 (S.D.N.Y. Oct. 4, 1994);Don King Productions v. Douglas, 735 F. Supp. 522, 534 (S.D.N Y 1990).
Similarly, the second factor, the parties' convenience, also is a wash — despite strenuous argument by both sides, each party will be inconvenienced if the litigation is in the forum desired by the other; it is not possible to say that Pascual would be substantially more inconvenienced by a New York forum than Clarendon would be by a trial in California. See, e.g., Wechsler v. Mache Int'l Trade, Inc., 99 Civ. 5725, 1999 WL 1261251 at *6 (S.D.N.Y. Dec. 27, 1999) ("The parties' convenience becomes a neutral factor in the transfer analysis if transferring venue would merely shift the inconvenience to the other party.");Aarons v. Worldtel Servs., Inc., 1996 WL 185714 at *4.
For all his protestations, Pascual has chosen to engage counsel based in Chicago, not Los Angeles or New York. Although convenience of counsel is not a significant factor to be considered, see, e.g., Butcher v. Gerber Prods. Co., 98 Civ. 1819, 1998 WL 437150 at *4 (S.D.N.Y. Aug. 3, 1998); Frene N.V. v. Kmart Corp., 96 Civ. 9585, 1998 WL 427688 at *4 (S.D.N.Y. July 29, 1998) (citing Coker v. Bank of America, 984 F. Supp. at 767), Pascual's choice of Chicago counsel undercuts his convenience arguments, since Chicago is closer to New York than to California. The Court further notes that it has allowed defense counsel to participate by telephone in discovery and other pretrial status conferences.
The fourth factor also is a wash — documents describing and implementing the agreement between the parties are located both in California and New York, and easily can be photocopied for production in discovery. See, e.g., Coker v. Bank of America, 984 F. Supp. 757, 766 (S.D.N.Y. 1997) (Keenan, D.J. Peck, M.J.) ("In today's era of photocopying, fax machines and Federal Express," location of documents factor is neutral); see also, e.g., Fintech Research Assoc. Inc. v. Dynagro Corp., 1998 WL 148423 at *3; Aarons v. Worldtel Servs., Inc., 1996 WL 185714 at *4; S-FER Int'l, Inc. v. Paladion Partners Ltd., 906 F. Supp. 211, 215 (S.D.N.Y. 1995) (Koeltl, D.J.) ("A transfer to California would do no more than shift the burden of transporting documents from one coast to the other. A zero-sum exchange of burden does not favor a transfer."); Falconwood Fin. Corp. v. Griffin, 838 F. Supp. 836, 841 (S.D.N.Y. 1993) (Leval, D.J.) (location of records is "not a compelling consideration when records are easily portable"); 15 Wright, Miller Cooper,Federal Practice Procedure: Jurisdiction 2d § 3853 at 439. Even Pascual concedes that "[t]he location of documents that might be required for evidence is often considered a less important factor, since documents can be shipped inexpensively." (Pascual Br. at 7.)
Pascual has not specified what documents located in California will be needed for trial, or why they cannot be transported to New York. See, e.g., Falconwood Fin. Corp. v. Griffin, 838 F. Supp. at 841 ("the moving party must establish the location and importance of the documents in question");Babbidge v. Apex Oil Co., 676 F. Supp. 517, 521 (S.D.N.Y. 1987); 15 Wright, Miller Cooper, Federal Practice Procedure: Jurisdiction 2d § 3853 at 439.
The sixth factor, plaintiff's choice of forum, weighs heavily towards New York. The deference to plaintiff's choice of forum not only places the burden of proof on the defendant moving for a transfer, but is also a factor to be considered in its own right:
[A] defendant has the burden of making out a strong case for a transfer and . . . plaintiff's privilege, conferred by statute, of choosing the forum he selected is a factor to be considered as against the "convenience" of the witnesses or what might otherwise be the balance of "convenience" as between the parties.Ford Motor Co. v. Ryan, 182 F.2d 329, 330 (2d Cir.), cert. denied, 340 U.S. 851, 71 S.Ct. 79 1950); accord, e.g., Sterline Nat'l Bank Trust Co. v. CenCor, Inc., 91 Civ. 8264, 1992 WL 176588 at *2 (S.D.N.Y. July 15, 1992). See also, e.g., Smart v. Goord, 21 F. Supp.2d 309, 315 (S.D.N.Y. 1998) ("A court must give significant consideration to a plaintiff's choice of venue, not disturbing it unless other factors weigh strongly in favor of transfer."); Coker v. Bank of America, 984 F. Supp. at 766 ("A plaintiff's choice of forum is generally given substantial weight.") ( cases cited therein); R. Siskind Co. v. Ashworth, Inc., 95 Civ. 7707, 1996 WL 167722 at *4 (S.D.N.Y. April 10, 1996); S-FER Int'l, Inc. v. Paladion Partners, Ltd., 906 F. Supp. at 213, 214; Xpressions Footwear Corp. v. Peters, 885 F. Supp. 630, 633 (S.D.N.Y. 1995) (Koeltl, D.J.); see generally 15 Wright, Miller Cooper, Federal Practice Procedure: Jurisdiction 2d § 3848 (citing cases).
As to the seventh factor, the governing law, it is not clear at this point whether New York or California law will apply; nevertheless, there is no doubt that this Court is fully qualified to apply New York's choice of law rules and either state's substantive law to Clarendon's claims. See, e.g., Coker v. Bank of America, 984 F. Supp. at 766 ( cases cited therein);S-FER Int'l, Inc. v. Paladion Partners, Ltd., 906 F. Supp. at 215-16 ("[E]ven if California law governs this dispute, the legal issues involve relatively unexceptional questions of contract and fraud. If New York's choice of law rules provide that California law is the appropriate law to apply, . . . then a New York court will be capable of applying it."). Indeed, Pascual concedes this point. (Pascual Br. at 9: choice of law factor "is of little matter, however, since none of the claims calls for application of complex state law," and so "this factor plays little role in the Section 1404(a) analysis.")
The remaining factors — the convenience of witnesses, the means to compel unwilling witnesses, and judicial efficiency in light of pending cases in California — require greater discussion.
Witness Factors
"The convenience of both party and non-party witnesses is probably considered the single most important factor in the analysis of whether a transfer should be granted." Coker v. Bank of America, 984 F. Supp. at 765 (internal quotation marks omitted); see also, e.g., Howard v. Four Seasons Hotels, 1997 WL 107633 at *2; Raines v. Switch Mfg. Corp., 96 Civ. 2361, 1996 WL 413720 at *2 (S.D.N.Y. July 24, 1996) (the "convenience of the party and non-party witnesses is particularly important"); Arrow Elecs., Inc. v. Ducommun Inc., 724 F. Supp. 264, 265 (S.D.N Y 1989); 15 Wright, Miller Cooper, Federal Practice Procedure: Jurisdiction 2d § 3851 at 415-17.
To succeed on a transfer motion, however, the moving party — here defendants Pascual and QSS — "must clearly specify the key witnesses to be called and must make a general statement of what their testimony will cover."
Factors Etc., Inc. v. Pro Arts, Inc., 579 F.2d 215, 218 (2d Cir. 1978); accord, e.g., Wechsler v. Mache Int'l Trade, Inc., 1999 WL 1261251 at *6; Coker v. Bank of America, 984 F. Supp. at 765; Xpressions Footwear Corp. v. Peters, 885 F. Supp. 630, 633 (S.D.N.Y. 1995) (Koeltl, D.J.); Tomchuck v. Union Trust Co., 875 F. Supp. 242, 244 (S.D.N.Y. 1995) (Koeltl, D.J.).
See also, e.g., Howard v. Four Seasons Hotel, 1997 WL 107633 at *3; Geiger v. Du Pont, 1997 WL 83291 at *5; Falconwood Fin. Corp. v. Griffin, 838 F. Supp. at 840-41, Don King Prods., Inc. v. Douglas, 735 F. Supp. at 534; 15 Wright, Miller Cooper,Federal Practice Procedure: Jurisdiction 2d § 3851 at 424-32 (citing cases).
Pascual has made no such showing here. His recitation that "all of the likely non-party witnesses reside in the Central District of California" (Pascual Br. at 4) neither clearly identifies the witnesses nor shows why these individuals will be necessary for the defense at trial. Indeed, it appears that the non-party witnesses Pascual points to — predominantly former employees or associates of QSS — may be important to Clarendon's case; if they also are relevant to the defense, Pascual has not shown the Court how. Nor has Pascual shown whether any of the California-based non-party witnesses would be willing to travel to New York for trial. The party most likely to be prejudiced by the absence of these witnesses from trial in New York is Clarendon, not Pascual. Furthermore, contrary to Pascual's argument (Pascual Reply Br. at 3), the non-party witnesses themselves will not be inconvenienced if the suit remains in New York. By bringing suit in New York, Clarendon will have to persuade the witnesses to appear voluntarily at trial (presumably by paying their expenses) or make do with their deposition testimony. The witnesses themselves might be more inconvenienced if this litigation were taking place in a court that had the power to command their presence, since they would then be deposed and also have to take time to appear at trial. While the location of the non-party witnesses factor slightly favors transfer, it is insufficient because of Pascual's failure to be more specific on this issue and in light of the other factors favoring denial of transfer. See, e.g., Smith McDonnell Stone Co. v. Delicato Vineyards, 94 Civ. 6474, 1995 WL 33306 at *3-4 (S.D.N.Y. Jan. 26, 1995); S S Mach. Corp. v. General Motors Corp., 93 Civ. 3237, 1994 WL 529867 at *7-8 (S.D.N Y Sept. 28, 1994); Beverage Mktg. Corp. v. Emerald Coast Spring Water Co., 697 F. Supp. 767, 769-70 (S.D.N.Y. 1988); First Nat'l City Bank v. Nanz, Inc., 437 F. Supp. 184, 189 (S.D.N.Y. 1975) (declining to transfer even where defendant's non-party witnesses were not subject to compulsory process by the court, where no showing that these "witnesses could not or would not appear at a trial in New York," and other factors weighed against transfer);cf. Computer Operations, Inc. v. Digital Equipment Corp., 387 F. Supp. 8, 11 (E.D.N.Y. 1975) ("Section 1404(a) was designed primarily for those cases . . . where defendant's essential witnesses were not under its control and were located in the proposed transferee district and plaintiff could not make the same claim as to its witnesses in the transferor district. . . .").
An example of why the movant must identify the witnesses and explain their relevance is shown by Pascual's reliance on the California location of the person Clarendon hired to audit QSS. (See Pascual Br. at 4 n. 3.) As Clarendon points out, it is Clarendon's burden to get the auditor to New York for trial. (Clarendon Br. at 8-9.) Presumably, Clarendon already has such an understanding in place with its auditor. His location in California offers no support to Pascual's transfer motion.
The Court also notes that while a deposition, even if videotaped, is not a perfect substitute for a witness's appearance at trial, the ability to videotape depositions makes the non-party witness availability factor less compelling than in pre-videotape days, at least where other factors do not favor transfer. See, e.g., Longo v. Wal-Mart Stores, Inc., 79 F. Supp.2d 169, 171 (E.D.N.Y. 1999) (citing cases and materials on the use of videotaped depositions at trial); Carron v. Holland America Line- Westours Inc., 51 F. Supp.2d 322, 326-27 (E.D.N Y 1999) (noting alternatives to live testimony when witnesses are distant); Somerville v. Major Exploration, Inc., 576 F. Supp. 902, 907 (S.D.N.Y. 1983).
The Interests of Justice: Cases Pending in California
Finally, Pascual urges that the case should be transferred to California in the interests of justice because two related actions are pending in California. (Pascual Br. at 7-8; Pascual Aff. ¶¶ 8-9.) The case initiated by QSS, Quality System Solutions Corp. v. North American Risk Services, Inc., Case No. 00-00997 (C.D.Cal.), was originally brought by QSS in California state court on November 10, 1999 (Pascual Aff. ¶ 9) — shortly after the instant complaint was filed on October 27, 1999 — and was removed by Clarendon's subsidiary, NARS, to federal court on January 28, 2000 (see Notice of Removal at 2), after this transfer motion was filed.
Pascual's argument that this case should be transferred to California so it can be consolidated with QSS v. NARS in the Central District of California for the sake of judicial efficiency is misplaced, if not disingenuous. Courts in this Circuit adhere to the first filed rule: "Where two courts have concurrent jurisdiction over an action involving the same parties and issues, courts will follow a `first filed' rule whereby the court which first has possession of the action decides it."800-Flowers, Inc. v. Intercontinental Florist, Inc., 860 F. Supp. 128, 131 (S.D.N.Y. 1994) (after weighing § 1404 factors, dismissing second action in favor of the first filed case in Florida); see also, e.g., City of New York v. Exxon, 932 F.2d 1020, 1025 (2d Cir. 1991) ("The `first filed' rule states that `where an action is brought in one federal district court and a later action embracing the same issue is brought in another federal court, the first court has jurisdiction to enjoin the prosecution of the second action.'") (quoting Meeropol v. Nizer, 505 F.2d 232, 235 (2d Cir. 1974)). This case is the "first filed" case, QSS v. NARS is second filed.
When, as here, a case is filed in state court and removed to federal court, "the state court filing date is the relevant benchmark." Manufacturers Hanover Trust Co. v. Palmer Corp., 798 F. Supp. 161, 166 (S.D.N.Y. 1992); accord, e.g., S-FER Int'l, Inc. v. Paladion Partners Ltd., 906 F. Supp. at 216 n. 2;800-Flowers, Inc. v. Intercontinental Florist, Inc., 860 F. Supp. at 131 n. 1.
While the first filed rule is not directly applicable here since the two lawsuits are not identical (and Pascual so far has not asserted counterclaims in this action), the interests of justice should be read in light of the principle behind the first filed rule: the fact that another proceeding is pending in California is to be given minimal weight since QSS filed that action after it was sued here, and thus the California action seems tactical; if Pascual really were concerned with judicial efficiency, he would have brought that claim as a counterclaim in this Court, rather than start a new case in California state court. Moreover, if QSS's action against Clarendon's subsidiary had remained in state court in California, as QSS apparently would have preferred, consolidation with a federal action would have been difficult even if this case were transferred. See generally Manual For Complex Litigation (Third) § 31.3 (describing difficulties in coordinating and jurisdictional conflicts in state and federal litigation). Finally, Clarendon has conceded that NARS, which it controls, will raise "no venue or personal jurisdiction objection to defendants proceeding against it in this Court, rather than in a California court." (Clarendon Br. at 12.) Thus, if Pascual's concern for judicial efficiency is sincere, not tactical, QSS can drop its California case and assert a counterclaim against Clarendon's subsidiary NARS in this action instead.
See, e.g., 800-Flowers, Inc. v. Intercontinental Florist, Inc., 860 F. Supp. at 133 ("The interests analysis under the first to file rule includes consideration of the same factors considered under a 28 U.S.C. § 1404(a) transfer motion.").
Pascual also points to another case pending in California state court, Thor Group, Inc. v. Pascual et al., Case No. BC 213794. (Pascual Br. at 7; Pascual Aff. ¶ 8 Ex. A.) Pascual avers that he brought Clarendon into that case on cross-claims for indemnity, contribution and declaratory relief. (Pascual Br. at 7-8; Pascual Aff. ¶ 8.) But Pascual did not serve that indemnity claim in the Thor action until January 7, 2000 (see Clarendon Br. at 11) — the same day he brought this transfer motion, months after initiation of the Thor suit. The timing of Pascual's crossclaim against Clarendon in Thor suggests that it was brought for tactical reasons connected to this transfer motion. Moreover, Pascual could bring his indemnity claim against Clarendon as a counterclaim here. In any event, since Pascual has presented no theory as to how this federal case and the Thor state case could be consolidated or coordinated even if this action were transferred to the Central District of California, the pendency of that state action provides no efficiency ground for transfer. See e.g., 15 Wright, Miller Cooper, Federal Practice Procedure: Jurisdiction 2d § 3554 at 454-55 (related case factor "need not be given weight if there is no realistic possibility of consolidating the present case with the related cases" citing cases).
Finally, to the extent that the transferor and transferee courts' docket conditions are part of the "judicial efficiency" factor, see, e.g., Coker v. Bank of America, 984 F. Supp. at 768, the Court notes that the Southern District of New York and the Central District of California both are extremely busy judicial districts. However, I run a "rocket docket" and have established a May 12, 2000 discovery cutoff date in this case and a deadline for submission of the Pretrial Order of May 26, 2000. The case can be tried during Summer 2000. I am skeptical the case would be trial-ready as quickly if transferred. E.g., Babbidge v. Apex Oil Co., 676 F. Supp. 517, 522-23 (S.D.N.Y. 1987) (no transfer where, inter alia, court could provide a trial as soon as parties were ready); National Super Spuds, Inc. v. New York Mercantile Exch., 425 F. Supp. 665, 668 (S.D.N.Y. 1977) (same).
CONCLUSION
Based on the above analysis of all of the applicable factors, Pascual has not met his heavy burden of showing that a weighing of the factors favors transfer, sufficiently to overcome plaintiff Clarendon's choice of forum in this District. Pascual's motion to transfer is DENIED.
SO ORDERED.
Copies to: Bernard J. Rosenthal, Esq. Mary K. Braza, Esq. Kristin J. Achterhof, Esq. Thomas F. Berner, Esq. Judge John G. Koeltl