Opinion
Civil Action No. 98-1987 (JBS)
December 23, 1998
Steven Kudatzky, Esq., STEVEN KUDATZKY CHARTERED, Marlton, New Jersey, for Plaintiff.
Michael P. Madden, Esq., MADDEN, MADDEN AND DEL DUCA, Haddonfield, New Jersey, Robert T. Quackenboss, Esq., HUNTON WILLIAMS, NationsBank Plaza, Atlanta, Georgia, for Defendants.
OPINION
Plaintiff Holtec International brought this lawsuit alleging that defendants, NAC International, Inc. and Charles Pennington, misappropriated and publicly revealed various trade secrets of which defendant Pennington learned while employed at Holtec in New Jersey before leaving to work for NAC International, Inc., in Georgia. Plaintiff filed this lawsuit in the Superior Court of New Jersey for the County of Camden, and defendants removed the case to this Court. Now before the Court is defendants' motion to transfer this case to the United States District Court for the Northern District of Georgia pursuant to 28 U.S.C. § 1404(a). For the reasons stated herein, defendants' motion will be denied.
A number of the facts as stated in affidavits attached to the plaintiff's briefs in opposition to the current motion have been denied or disputed by the defendants in their Answer to the Complaint. Defendants have not submitted affidavits that address the alleged facts of this case, instead using affidavits to discuss the location of various individuals and tangible evidence alleged to be necessary to the trial of this lawsuit. At this stage, the Court accepts the facts actually stated in affidavits submitted by either the plaintiff or defendants as true for the purposes of determining whether the motion to transfer should be granted. However, the present statement of the facts should not be deemed to be dispositive of any factual disputes in this case.
This lawsuit arises between two competitors in the spent fuel storage business and a business executive who switched teams. Plaintiff Holtec International ("Holtec") is a New Jersey diversified energy technology engineering company which supplies products and services to the power generation industry on a global basis, mostly to nuclear power plants. (Singh Aff. ¶ 2.) One of Holtec's specialized lines is spent fuel technology, the development of systems for the transfer and storage of spent nuclear fuel. (Id.) This business line breaks down into two sub-business lines, dry storage technology products and services and wet storage technology products and services. (Id.) Wet storage involves the storage of spent nuclear fuel in racks under water, while dry storage involves storing spent nuclear fuel in sealed canister-link containers on the ground. (Id.)
Holtec was incorporated in New Jersey in late 1986 and has maintained its principal office in southern New Jersey since its founding, as well as a satellite office in Florida that is not permanently staffed with Holtec employees. (Id. at ¶ 4.) It is a privately owned company with 46 full-time employees, 37 of whom reside and work in southern New Jersey. (Id.)
Defendant NAC International, Inc. ("NAC") is a Delaware corporation with its corporate headquarters in Norcross, Georgia, and with separate offices in Washington, D.C., Tokyo, London, Moscow, Zurich, Pleasantville (New York), Aiken (South Carolina), and San Jose (California). (Id. at ¶ 5.) NAC is a competitor of Holtec, supplying products and services to the nuclear power generation industry throughout the United States (including New Jersey), as well as outside of the United States. NAC has recently sought business from a prospective customer in New Jersey, General Public Utilities ("GPU") of Parsippany in late 1997/early 1998. (Id.)
Defendant Charles Pennington is an individual who now resides in Alpharetta, Georgia, a northern suburb of Atlanta. (Pennington Aff. ¶ 3.) Until April of 1996, Pennington worked for Holtec. (Id. at ¶ 4.) From October, 1992 to the end of April, 1996, Pennington lived in Medford, New Jersey and served as Holtec's Vice President of Business Development, where he was paid approximately $115,000 a year. (Singh Aff. ¶ 7.) Pennington held the number three position at Holtec, behind only the President, Dr. Krishna P. Singh, and the Executive Vice-President, Dr. Alan Soler. (Id. at ¶ 11.) Pennington was hired because of his expertise in dry storage systems (id.). He had no involvement with wet storage before coming to Holtec. (Id. at ¶ 12.)
According to Holtec, as Holtec's Vice-President of Business Development, Pennington became intimately familiar with and was privy to the confidential strategies, trade secrets, and proprietary information of both the Dry Storage Systems and Wet Storage Systems aspects of the Spent Fuel Technology Business Line. (Id.) He also allegedly had access to all of Holtec's pricing and commercial data and its confidential strategic business alliances. (Id.) One portion of his employment agreement purportedly restricted his ability to engage in competitive activity with one of Holtec's business lines. (Id. at ¶ 13.)
On April 9, 1996, Pennington informed Dr. Singh that he would be resigning, as he had accepted a position with NAC in the "front end" of the nuclear fuel cycle industry because the "back end," which dealt with spent nuclear fuel including dry storage systems, was a long way from being a viable industry. (Id. at ¶ 14.) According to Singh, Singh approved Pennington's employment with NAC based on that representation, as well upon Pennington's assurance that NAC would set up an impenetrable "firewall" between Pennington and the spent fuel technology line. (Id.) Pennington had interviewed with NAC, Holtec's competitor, in February of 1996, but he had not disclosed that fact to Holtec at the time. (Defendants' Answer ¶ 19.) Pennington did not disclose his actual or potential affiliation with NAC to Holtec until April.
Singh asked Pennington to stay on with Holtec through the end of April, 1996, in order to bring to fruition Holtec's efforts to secure a dry storage systems contract with Yankee Atomic Electric Company for its Rowe, Massachusetts nuclear facility, which was scheduled to be awarded at the end of April. (Id. at ¶ 15.) Pennington, who was Holtec's sole contact with Yankee Atomic representatives on the Yankee Rowe Contract (id.), told the Holtec employees who were taking over the Yankee Rowe Contract bid that though the bid award had been postponed to a later date, the award of the contract to Holtec was a "done deal." (Id. at ¶ 16.) Based on his stated assessment that he was not needed at Holtec in order for this contract to be awarded to Holtec, Pennington refused to stay beyond his stated departure date of April 24, 1996. (Id. at ¶ 15.) According to Holtec, it believes that Pennington had already notified Yankee Atomic that he was leaving Holtec to join NAC. (Id. at ¶ 16.) Ultimately, NAC was awarded the Yankee Rowe Contract. (Id. at ¶ 17.)
Upon his departure from Holtec, on May 2, 1996, Pennington signed an exit interview form which represented that he did not possess any of Holtec's intellectual property. (Id. at ¶ 18; Amended Complaint Ex. J.) In this lawsuit, Holtec charges that Pennington, despite his representation during the exit interview, disclosed Holtec's trade secrets and proprietary information concerning the Spent Fuel Technology Line to NAC both during and after his employment with Holtec, leading to Holtec's loss of the Yankee Rowe Contract to NAC. (Singh Aff. ¶ 19.) Holtec also charges that NAC knew or should have known that Pennington's information could have come only from his employment at Holtec. (Id.)
In this lawsuit, Holtec does not only charge, however, that Pennington, with NAC's knowledge and encouragement, breached his duty not to disclose. Holtec also charges that NAC itself violated an agreement with Holtec not to disclose and use certain information about wet storage which Holtec had shared with NAC. On July 24, 1991, predating Pennington's employment with either Holtec or NAC, Holtec and NAC entered into a "Teaming Agreement" in connection with a joint effort to secure a contract for the supply of spent nuclear fuel storage racks and services to the Czech Energy Board, and agency of the then-Republic of Czechoslovakia for its Dukovany Nuclear Power Plant. (Id. at ¶ 20 and Ex. A1.) NAC had contacted Holtec and requested it to serve as NAC's subcontractor/team member because the project required the utilization of wet storage racks which NAC could not provide, (id.) but which Holtec could provide; NAC had described Holtec's designs as "unique technical solutions" to wet storage issues. (Id. at ¶ 21 and Ex. B3.) As noted in Paragraph Four of the Teaming Agreement, "in tandem" with that Agreement, the parties entered into a "Non-disclosure and Non-Use Agreement ("NANA"), effective for ten years from 1991, which set forth the terms under which Holtec would disclose certain of its intellectual property ("the Information") to NAC. (Id. at ¶ 22 and Ex. A2.) The various provisions of the NANA indicated that NAC would keep the Information secret and confidential, treat the Information as proprietary and not use it for any purpose except in furtherance of the Teaming Agreement, not disclose the Information to NAC affiliates, not copy or reproduce the Information, and not use the Information in any work relating to nuclear fuel storage racks without Holtec's written consent. (Id. at ¶ 23 and Ex. A2 ¶¶ 2-6.) In early 1992, the Dukovany Contract was awarded to another bidder. (Id. at ¶ 22.) Had the contract been awarded to NAC, it would have generated approximately ten million dollars in revenue. (Id.)
According to Holtec, NAC entered the wet storage business sometime in 1997 or 1998. (Id. at ¶ 28.) In early 1998, representatives of NAC actively solicited a wet storage contract from General Public Utilities ("GPU") in New Jersey. (Id.) Holtec states that NAC previously had not had the technical expertise to secure and perform a wet storage contract, and Holtec believes that NAC was able to enter the wet storage industry only because of NAC's use of Holtec's confidential trade secrets learned by Pennington while employed by Holtec and/or by NAC pursuant to the Teaming Agreement and NANA.
On March 31, 1998, Plaintiff Holtec filed its Complaint in the Superior Court of New Jersey, Camden County, alleging that Defendant Pennington, as a former Holtec employee, misappropriated Holtec's confidential and trade secret information and disclosed the information to his new employer, NAC. The Complaint further alleges that Defendant NAC improperly used Holtec's confidential information, gleaned both from Pennington and from Holtec itself, to compete unfairly against Holtec and to profit in the markets in which the companies compete. (Compl. ¶¶ 4-5.) Further, the Complaint states that Defendants disclosed and publicized certain of Plaintiff's trade secrets at a seminar held in Atlanta, Georgia, in 1997. Allegedly, Defendants NAC and Pennington misappropriated or publicized confidential information regarding product research and development efforts, marketing strategies, customer information, and pricing policies. (Id. at ¶ 35.) The defendants filed their Answer on April 30, 1998 and removed the matter to this Court. This motion for transfer of venue was filed on June 4, 1998. As the remainder of this Opinion explains, that motion for transfer to the Northern District of Georgia will be denied.
The Complaint originally also charged NAC and Pennington with acting in concert with a disgruntled former Holtec employee to interfere maliciously with Holtec's prospective business relationship with the Southern Nuclear Operating Company ("SNOC") for on-site dry storage of spent nuclear fuel at its Hatch nuclear facility by sending a false letter to SNOC on Commonwealth Edison stationery ("the Poison Pen letter"). (Compl. at ¶¶ 41-44, 84-86.) An Amended Complaint, filed on July 30, 1998, deleted those allegations.
An Amended Complaint was filed on July 30, 1998, removing allegations regarding the defendants' conduct regarding the SNOC Hatch facility contract.
II. DISCUSSION
A. Standard for Motions to Transfer Venue
Defendant's motion to transfer is governed by 28 U.S.C. § 1404(a), which provides:
For the convenience of parties and witnesses, and in the interest of justice, a District Court may transfer any civil action any other District or Division where it might have been brought.28 U.S.C. § 1404(a). There are thus three main things which courts must take into consideration: 1) the convenience of the parties; 2) the convenience of the witnesses; and 3) the interests of justice.
Additionally, the district to which a defendant seeks to transfer the case must be one in which the action could have originally been brought. As this is a diversity case, under 28 U.S.C. § 1391(a) and (c), this case could have been brought in the Northern District of Georgia either because both defendants reside in that district of Georgia or because a substantial part of the events giving rise to this lawsuit are alleged to have taken place within that district.
In Gulf Oil Corp. v. Gilbert, 330 U.S. 501, 508 (1970), the Supreme Court laid out several other factors, which fall into two broad categories. The first category is comprised of factors relating to the so-called "private interests" of the parties to the litigation. Those private interests include: (1) the plaintiff's choice of forum; (2) relative ease of access to sources of proof; (3) availability of compulsory process of attendance over unwilling witnesses; (4) the cost of obtaining attendance of willing witnesses; (5) obstacles to a fair trial; and (6) the possibility of a jury view of the subject of the suit.See Sandvik, Inc. v. Continental Ins. Co., 724 F. Supp. 303, 307 (D.N.J. 1989) (citing Gulf Oil, 330 U.S. at 508).
The second category consists of "public interest" considerations. These are: (1) court congestion and other administrative difficulties; (2) placing the burden of jury duty on those having the closest ties to the action; (3) local interests in having the case adjudicated at home; and (4) familiarity of the forum court with the law applicable to the action. Sandvik, 724 F. Supp. at 307 (citing Gulf Oil, 330 U.S. at 508-09). The analysis courts apply in ruling on motions to transfer is a flexible one that turns on the specific facts of each individual case. Piper Aircraft Co. v. Reyno, 454 U.S. 235, 249-50 (1981).
The plaintiff's choice of forum may be overruled if the defendant demonstrates that there are countervailing considerations that strongly weigh in favor of transfer. For example, when the central facts of a lawsuit occur outside the forum state, the plaintiff's selection of that forum is entitled to less deference. Ricoh Co., Ltd. v. Honeywell, Inc., 817 F. Supp. 473, 481 (D.N.J. 1993). However, the plaintiff's choice carries great weight. In the Third Circuit, the plaintiff's choice of forum is a "paramount consideration" in the determination of whether transfer is appropriate, and thus a plaintiff's decision to litigate in a particular district should not be disturbed lightly. Shutte v. Armco Steel Corp., 431 F.2d 22, 25 (3d Cir. 1970).
The moving party has the burden of persuasion on a motion to transfer. Jumara v. State Farm Ins. Co., 55 F.3d 873, 879 (3d Cir. 1995). It is not enough for a defendant to prove that another forum is adequate or even equally as convenient as the plaintiff's chosen forum; that defendant must convince the court that a different forum is more convenient. Id. The movant's choice of forum must be more appropriate than the plaintiff's chosen forum, in terms of convenience for the courts, the parties, the witnesses, and the public interest; it is not enough that a different district is more convenient for the defendants. Indeed, "unless the balance is strongly tipped in favor of the defendant, the plaintiff's choice of forum should not be disturbed." Gulf Oil, 330 U.S. at 508; Honeywell, 817 F. Supp. at 480 (quotingHardaway Constr. Inc. v. Condesco Indus., Ltd., 583 F. Supp. 617, 620 (D.N.J. 1983)).
Because I find that defendants have not shown that countervailing interests strongly tip the balance in their favor, I will deny the motion to transfer venue under 1404(a). While the Northern District of Georgia certainly might be another convenient forum for this case — at least for the defendants themselves — the evidence before me indicates that it is not necessarily a more convenient or appropriate forum. Thus, plaintiff's choice of this forum will not be disturbed.
B. Private Interests
The private interests in this matter are in equipoise. Georgia and New Jersey would be equally convenient or inconvenient. While defendants contend that Georgia will be much more convenient based on the volume of evidence and witnesses in the Georgia area, much of the evidence and many of the potential witnesses in this case are either in New Jersey or in states closer to New Jersey than to Georgia. As the following subsections describe, the equal balance between New Jersey and Georgia in terms of difficulty for defendants, plaintiff, and third-party witnesses does not tip the determination in defendants' favor.
1. Party Witnesses
Defendants plan to call as witnesses key NAC personnel, including NAC's President and Chief Executive Officer, Executive Vice President, Director of U.S. Sales, Vice President and Chief Financial Officer, Vice President of Engineering Operations and Chief Engineer, Senior Vice President for Special Projects, Director of Design and Analysis, and Senior Vice President, all of whom live within thirty minutes of Atlanta (Pennington Aff. ¶¶ 10-11), as well as defendant Pennington himself. (Defs.' Br. Supp. Transfer at 17-18.) They contend that the absence of these individuals from the Georgia hub of NAC for extended periods of time for this trial will adversely affect NAC operations.
However, travel to Georgia will be just as difficult for Holtec and its employees. Holtec plans to call its Chief Executive Officer, Executive Vice President, Chief Financial Officer, Vice President of Sales and Marketing, Operations Manager, and Program manager. (Singh Aff. ¶ 31.) Those persons represent virtually all of Holtec's top management employees; because of Holtec's small size (46 full-time employees), the loss of these "hands on" managers to Atlanta for significant amounts of time could have greater impact upon Holtec's ability to operate effectively as a company. (Id.)
Since all of these are party witnesses, compelling their appearance in either Georgia or New Jersey would not be a problem. However, the practical difficulty to either company of having its top officers gone for significant amounts of time is, at best, equal. As such, it does not tip in defendants' favor and does not overcome the presumption of following the plaintiff's choice of forum.
2. Third-Party Witnesses
Another private interest to be considered is the convenience of the chosen and alternative fora to nonparty witnesses and whether nonparty witnesses could be compelled to appear. As with party witnesses, this factor is in equipoise.
Defendants contend that Georgia is a much more convenient forum for their third party witnesses. Most of the third party witnesses who NAC and Pennington had originally argued to this Court that they would call, however, were relevant to rebut the charge that defendants drafted a "poison pen letter" to the Southern Nuclear Operating Company ("SNOC"), a Birmingham, Alabama company. (Def.'s Br. at 12.) Though these witnesses are now largely irrelevant because plaintiff's Amended Complaint deleted all allegations and charges relating to the SNOC Hatch Facility, they might still be of some use because SNOC was itself the target of NAC's marketing efforts, and therefore its executives and principals would be able to testify as to NAC's technology, pricing policies, and marketing strategies as compared to those of Holtec. (Id.) That information would be relevant to the allegations that NAC misappropriated or incorporated Holtec technology into its own products. Some of these witnesses from SNOC live in Georgia and would be within the Northern District of Georgia's subpoena power. Others live in Birmingham, Alabama; while those witnesses are not within the 100 mile subpoena range from Atlanta, Atlanta would be a shorter and less costly trip from home than would New Jersey.
Defendants also propose to call Dr. Ratib Karam, the former director of the Neely Nuclear Research Facility at the Georgia Institute of Technology, who currently lives in Atlanta, to testify as to the nature, development, and state of NAC transportation technology prior to Pennington's arrival at NAC. Dr. Karam would be subject to the subpoena power of the Northern District of Georgia but not of the District of New Jersey.
However, plaintiff Holtec itself proposes to call a number of third-party witnesses who are not subject to the subpoena power of the Georgia court. Some of these witnesses are from New Jersey and are subject to this Court's subpoena power, such as witnesses with knowledge of Holtec's bid to do wet storage for General Public Utilities ("GPU"). Others are not subject to the subpoena power of either this Court or the Northern District of Georgia, but they may find New Jersey a less burdensome trip than Georgia. These include a former NAC vice president of sales and marketing who signed the Teaming Agreement and NANA who lives in Collinsville, Connecticut, as well as persons with knowledge of NAC's and Pennington's alleged use of Holtec intellectual property to secure various contracts in Nebraska, Michigan, Pennsylvania, Illinois, and Wisconsin. (Singh Aff. ¶ 33.) At best, these third-party witnesses are in a geographic stand-off. New Jersey and Georgia will both be convenient for some and inconvenient for others. The sum total does not weigh so heavily in favor of defendants' as to tip the scale away from plaintiff Holtec's chosen forum.
3. Documentary and Tangible Evidence
Defendants contend that trial of this matter should be held in Georgia because it is a much more convenient site for the voluminous documentary and tangible evidence which they plan to present. For instance, defendants say, all documentary and tangible evidence related to NAC's design, development, and marketing activity is in Norcross, Georgia. (Defs.' Br. Supp. Transfer at 15.) Moreover, defendants argue, they would like jurors to see their large, heavy scale models of casks which NAC "drop-tests" to ensure packaging security and protection of nuclear contents, so that jurors can see the development and design of NAC technology and products over time. (Id. at 15-16.) Finally, defendants point to 350 boxes of safety analysis reports and engineering calculation packages stored in Georgia which document development of NAC's technology, products, and services, as contained in historic submissions to the United States Nuclear Regulatory Commission. (Id. at 16.)
Defendants' arguments, however, are not persuasive for several reasons. First, Holtec, too, will seek to offer documentary and physical evidence of their product, marketing, and pricing strategy development. Holtec's records are kept in its New Jersey office and would have to be brought to Georgia, just as NAC's documents would need to be brought to New Jersey. Furthermore, it is likely that documentary evidence of wet storage product development will be contained in bids and proposals to various wet storage customers, and those bids will probably be small in quantity and identical in nature, such that mountains of documents will not be necessary to either prosecution or defense of this case.
Second, the fact that the NAC casks are in Georgia does not compel this Court to transfer the trial there. If NAC and Pennington seek to show the actual physical casks so that jurors can trace product development visually, it is likely that Holtec will also seek to show jurors their own products and product-testing equipment for comparison; those storage machines, like NAC's casks, are large and heavy and difficult to move. Holding trial in either New Jersey or Georgia would be problematic to one side or the other, because one side would have to move its heavy equipment to the other state. In any case, video or sophisticated animation may be a more effective way to let jurors compare the actual product development steps, and such methods do not involve the problems associated with moving equipment from one state to another or conducting site visits by jurors. Such site visits, in any event, are disfavored where the cumbersome, time-consuming, and potentially prejudicial circumstances are not outweighed by some unique, probative evidence that can only be gained through a viewing on site.
Finally, defendants' argument that the fact that 350 boxes of materials tracing NAC product development are in Georgia should compel transfer of the case to Georgia is ineffective. The parties dispute whether these 350 boxes of documents are even relevant to the case, since they document NAC's development of dry, not wet, storage technology; according to Holtec, its only claim related to dry storage technology is that Pennington, with NAC's encouragement, breached his contract and duty of loyalty by stealing Holtec intellectual property related to pricing strategies and profit-enhancing methodologies, and thus documentary evidence of NAC dry storage product development (contained in those 350 boxes), as opposed to marketing development, would be irrelevant to NAC's defense. (Singh Aff. ¶ 38.) Such questions of relevancy are better left to the sound discretion of a magistrate judge if this issue arises at a later time. In any case, the fact that these boxes of documents are in Georgia does not compel me to transfer the trial to the Northern District of Georgia. At the discovery stage, the location of the documents is not problematic, for they need not be moved; under Rule 34(b), Fed.R.Civ.P., they simply must be available at the site at which they are normally kept, at the convenience of plaintiff's counsel who will have to travel to Georgia for the document inspection. Moreover, some pretrial practice will eventually need to be conducted as to these documents' admissibility, for 350 boxes of documents, as a very practical matter, are not coming into evidence for the jury at trial.
Though summaries of these voluminous records do not currently exist, NAC might perhaps choose to create them. Additionally, some of these records might be cumulative of each other and thus not admissible. Finally, stipulations can greatly reduce the volume of documentary evidence at trial.
In short, documentary and physical evidence exists both in Georgia and New Jersey. No matter which federal court holds the trial, evidence will have to be moved; the relative burden is no greater on one side than another. Moreover, as the previous discussion has elucidated, the evidence actually used at trial may not be as large and voluminous as NAC has anticipated. Overall, on balance, I find that the private interests in transfer do not so strongly favor defendants as to tip the balance in their favor, away from plaintiff Holtec's chosen forum of the District of New Jersey.
C. Public Interest and Interest of Justice Factors
Like the private interest factors, the public interest factors discussed in Gulf Oil, 330 U.S. at 508, also balance out between this Court and the Northern District of Georgia. The main three factors to be considered here are the levels of court congestion in the alternative districts, the amount of local interest in the matter such that the burden of jury duty is on those with the closest ties to the case, and the difficulty of one of the courts in applying the law of another jurisdiction.
1. Court Congestion
One factor which might be relevant is the relative difference in court congestion between suggested fora. If defendants' proposed forum is significantly less congested than plaintiff's chosen forum, then transfer might be appropriate. In the instant matter, the difference between New Jersey and the Northern District of Georgia does have significantly fewer three year old cases than the District of New Jersey (.8% versus 4.6% in the twelve-month period ending September 30, 1997). (Federal Court Management Statistics, attached as Ex. A to Quackenboss Aff.) My own three-year case list consists of ten cases, or about 3.0% of my civil caseload. Those cases are principally related to environmental litigation and insurance coverage disputes related to it. Moreover, the statistics on the speed from filing to trial in Georgia and New Jersey are "not significantly divergent (Defs.' Br. Supp. Transfer at 20): 23 months in Georgia, compared to 28 months in New Jersey. (Id.) Like the Northern District of Georgia, the District of New Jersey is also noted for well-functioning ADR programs, including mediation for complex commercial cases such as this one, which can aid an early and complete resolution. It is likely that trial will proceed, if necessary (as it is for fewer than 2% of civil cases) about as swiftly here as in the Northern District of Georgia.
2. Local Interests
Another factor to consider is whether the chosen forum has enough local interest that it is fair to place the burden of jury duty upon citizens of that state. See Gulf Oil, 330 U.S. at 508. Here, both Georgia and New Jersey have a nexus to the alleged facts of the case, and thus either would be appropriate. The citizens of Georgia have a direct interest in passing judgment upon other citizens — both of the defendants are Georgia residents — whose activities are accused. However, plaintiff has alleged a number of connections between the defendants' actions and New Jersey. Holtec accuses Pennington of acts of disloyalty and misappropriation both during his employment with New Jersey and post-employment. New Jersey citizens have an interest in seeing that the former employee of a New Jersey corporation carries out his contractual duties and common law duties of loyalty. Likewise, Holtec has accused NAC of soliciting Holtec to enter the Teaming Agreement for the Dukovany Project and then allegedly breaching the NANA by misusing intellectual property which Holtec had disclosed in confidence. New Jersey citizens also have an interest in seeing that out-of-state corporations honor the agreements which they solicit New Jersey companies to make. There is therefore a strong nexus between New Jersey and the alleged facts of this case, such that venue here is proper. The fact that some of Pennington's alleged improper disclosures and NANA's alleged misuse of Holtec trade secrets would have occurred outside of New Jersey does not diminish the nexus to New Jersey or New Jersey's strong interest in deciding upon the fate of its own corporation; New Jersey's interest does not end at its borders. The "local interests" factor therefore does not fall in defendants' favor.
Though NAC is a resident of Georgia because its primary place of business is in Georgia, it is actually registered as a Delaware corporation.
3. Applicable Law/Forum Selection
A final consideration is whether the chosen or alternative fora courts will have to apply foreign law and whether choice of law/forum selection clauses apply. In this case, part of the lawsuit was brought under New Jersey law (Count Eight: Violation of N.J.S.A. 2C:20-20); other counts were brought under general common law claims of breach of duty of loyalty or misappropriation which, under a conflicts of law analysis, might be governed by either New Jersey law or Georgia law. In reality, as federal courts often apply the laws of states in which they do not sit, it would not be problematic for either this Court or the Northern District of Georgia to apply New Jersey or Georgia law, so this consideration does not hold much sway.
According to plaintiff Holtec, however, the case must be tried in this Court and under New Jersey law due to a provision in the Teaming Agreement with NAC. Paragraph Nine of the Teaming Agreement entered into by Holtec and NAC regarding the Dukovany Project in 1991 provides as follows:
Governing Law; Jurisdiction
This Agreement shall be governed by and construed in accordance with the interal [sic] laws of the State of New Jersey without regard to conflict of laws principles. The parties consent to the personal jurisdiction and venue of the New Jersey Superior Court for Camden County and the United States District Court for the District of New Jersey and further consent that any such process, notice of motion or other application to either such court or a judge thereof may be served outside the State of New Jersey by registered or certified mail or by personal service, provided that a reasonable time for appearance is allowed.
(Singh Aff. Ex. A-1.)
The parties dispute the applicability of this provision to the instant case. According to defendant NAC, NAC's selection for the Dukovany Contract was a pre-condition to the Teaming Agreement taking effect at all. (Defs.' Br. Supp. Transfer at 22.) Plaintiff Holtec, on the other hand, argues that the Teaming Agreement was in effect from the time it was signed until the Dukovany Contract was awarded to a different bidder. (Pl.'s Br. Opp'n Transfer at 11-12.) Second, NAC argues, even if the Teaming Agreement was in effect, any claim here would actually be under the NANA, which was referenced in the Teaming Agreement but which was not incorporated into it, and the NANA does not have a forum selection clause. (Defs.' Reply Br. Supp. Transfer at 3.) Holtec replies to that argument by noting that the two agreements were made "in tandem" and the forum selection clause was intended to govern both agreements. (Singh Aff. ¶ 25.) Third, NAC argues that even if the provision does apply, it is not a mandatory forum selection clause which would prevent this Court from ordering a change of venue. (Defs.' Reply Br. Supp. Transfer at 3.) Holtec responds that the existence of a non-exclusive forum selection clause is nevertheless a "substantial factor weighing against transfer." NCR Credit Corp. v. Ye Seekers Horizon, Inc., 17 F. Supp.2d 317l, 321 (D.N.J. 1998) (citing Plum Tree v. Stockment, 488 F.2d 754, 758 and n. 7 (3d Cir. 1973) and Stewart Org., Inc. v. Ricoh Corp., 487 U.S. 22, 29 (1988)).
The determination of whether the forum selection clause applies necessarily requires a determination that the Teaming Agreement and NANA themselves were in effect and govern this action. That, however, is one of the central issues in dispute in this case, and it is not appropriate for this Court to delve into a complex and decisive issue of contract interpretation and fact determination at this early stage, prior to the end of discovery and without more extensive briefing by the parties specifically related to these agreements. Moreover, this is not an issue that I need to decide at this point, for it would not change my determination that defendants have not shown that the balance falls strongly in their favor.
As defendant Pennington was not a party to either the Teaming Agreement or the NANA, the determination of whether the forum selection clause applies does not affect the proper forum in which to try claims related to him. However, to the extent that the clause would apply and require this Court to hear claims related to NAC, the clause's applicability would be a reason to keep the Pennington claims, which are closely intertwined with the NAC claims, here as well.
If plaintiff Holtec is correct that the forum selection clause applies to the instant action, that would be, at the very least, even more evidence that the plaintiff's chosen forum is the proper forum and that transfer pursuant to 28 U.S.C. § 1404(a) is not warranted. If defendants, on the other hand, are correct that the forum selection clause is not controlling, that determination does not itself lead to the conclusion that Georgia law necessarily applies, nor would it represent affirmative evidence that the Northern District of Georgia is a more convenient forum than the District of New Jersey. The burden is not on the plaintiff to prove that the proposed alternative forum is inadequate,Honeywell, 817 F. Supp. at 480; rather it is on the defendants to prove that their alternative forum is more convenient — that the balance so strongly favors the defendants that it is proper to deviate from the presumption in favor of the plaintiff's chosen forum and grant transfer. Jumara, 55 F.3d at 879. The only forum selection clause potentially in play recites application of New Jersey law in a New Jersey forum. Even if defendants are correct that the forum selection clause does not apply, I still find that they have not met their burden of showing that the balance strongly tips in their favor.
III. CONCLUSION
Because I find that defendants, Charles Pennington and NAC International, Inc. have not met their burden of showing that the Northern District of Georgia is a more convenient forum than this Court, which is the plaintiff Holtec's chosen forum, Jumara, 55 F.3d at 879, the plaintiff's choice to litigate in the District of New Jersey will not be disturbed. Defendants' motion for transfer of venue to the Northern District of Georgia, therefore, will be denied. The accompanying Order is entered.
ORDER
This matter having come before the Court upon the motion of defendants, NAC International, Inc., and Charles Pennington, for transfer of venue to the Northern District of Georgia pursuant to 28 U.S.C. § 1404(a); and the Court having considered the submissions of the parties; and for the reasons stated in the Opinion of today's date;
IT IS this 23rd day of December, 1998, hereby
ORDERED that defendants' motion for transfer of venue to the Northern District of Georgia pursuant to 28 U.S.C. § 1404(a) be, and hereby is, DENIED.