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INGURAN, L.P. v. XY, INC.

United States District Court, W.D. Texas, San Antonio Division
Jun 1, 2006
Civil Action No. SA:06-CV-0200-XR (W.D. Tex. Jun. 1, 2006)

Opinion

Civil Action No. SA:06-CV-0200-XR.

June 1, 2006


ORDER


On this date, the Court considered Defendant XY, Inc.'s motion to transfer this action to the District of Colorado under 28 U.S.C. § 1404(a). The motion is opposed. After careful consideration, the Court will GRANT the motion (docket no. 10).

Facts and Procedural Background

This case involves a dispute arising from the sale and use of Defendant XY, Inc.'s ("XY") patented sex selection technology for use in breeding livestock and other mammals. Sex selection technology allows a breeder to influence the chances of producing offspring of a particular gender and thus create breeding and marketing plans for their herds. Plaintiff Inguran, L.P. d/b/a Sexing Technologies ("Inguran") filed this action against Defendant XY, Inc. on February 21, 2006, in the 407th Judicial District Court, Bexar County Texas. Plaintiff alleged that XY breached written license agreements and other oral agreements pertaining to the sale and use of its technology by Inguran. The agreements were made by written correspondence, telephone calls, and face-to-face meetings. Among other claims, Inguran alleged that XY breached the contracts by: failing to keep adequate spare parts in stock, not completing a stock swap, not stopping patent violations, and failing to forward sales leads to Inguran. Inguran also asserts fraud and negligent misrepresentation regarding the capabilities of XY technology. On March 6, 2006, Defendant removed the case to this Court based on diversity of citizenship. XY, Inc., is a Colorado corporation with its principal place of business in Fort Collins, Colorado. Inguran is a Texas limited partnership with offices in San Antonio, Texas and Navasota, Texas. On March 30, 2006, XY filed the instant motion to transfer venue under 28 U.S.C. § 1404(a).

Analysis

For the convenience of the parties, and in the interest of justice, a district court may transfer any civil matter to any other district or division where it might have been brought. 28 U.S.C. § 1404(a). In applying the provisions of § 1404(a), the 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 brought. In re Horseshoe Entm't, 337 F.3d 429, 433 (5th Cir. 2003). Under the general venue provision of 28 U.S.C. § 1391(a), a civil action wherein jurisdiction is founded solely on diversity of citizenship may be brought in:

(1) a judicial district where any defendant resides, if all defendants reside in the same State,
(2) a judicial district in which a substantial part of the events or omissions giving rise to the claim occurred, or a substantial part of property that is the subjection of the action is situated, or
(3) a judicial district in which any defendant is subject to personal jurisdiction at the time the action is commenced, if there is no district in which the action may otherwise be brought.

For purposes of venue, a corporate defendant is a resident of any judicial district in which it is subject to personal jurisdiction at the time the action is commenced. 28 U.S.C. § 1391(c).

Defendant XY is a Colorado corporation with its principal place of business in Fort Collins, Colorado. Defendant XY's substantial contacts with the state means that the District of Colorado has personal jurisdiction over the defendant. The action could have been brought in the District of Colorado pursuant to 28 U.S.C. § 1391(a)(1). In addition, the action could have been brought under U.S.C. § 1391(a)(2) because a substantial part of the events or omissions giving rise to the claim occurred there. The Lead Licensee Agreement was signed by both parties in Colorado, and XY negotiated and corresponded from Colorado.

The determination of "convenience" turns on a number of private and public interest factors, none of which is given dispositive weight. Action Indus., Inc. v. U.S. Fidelity Guar. Co., 358 F.3d 337, 340 (5th Cir. 2004) (citing Syndicate 420 at Lloyd's London v. Early Am. Ins. Co., 796 F.2d 821, 827 (5th Cir. 1986)). 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. Piper Aircraft Co. v. Reyno, 454 U.S. 235, 241 n. 6 (1981). 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. Id. Finally, a plaintiff's choice of forum is "clearly a factor to be considered but in and of itself is neither conclusive nor determinative." In re Horseshoe Entm't, 337 F.3d at 434.

Applying these factors, the court concludes that transferring this case to the District of Colorado is appropriate. With regard to the private factors, Inguran argues that the relative ease of access to sources of proof and cost of attendance for willing witnesses do not favor transfer. However, travel to Denver, Colorado is no more inconvenient for Inguran than traveling to San Antonio would be for XY. Sources of proof such as records of the parties' transactions are located in both Texas and Colorado.

In fact, the availability of compulsory process of potential non-party witnesses strongly favors transfer. While compulsory process of two former XY employees involved in training Inguran employees on XY technology and compulsory process of three XY researchers would not be available in the Western District of Texas, it would be available in the District of Colorado because the non-party witnesses are residents of Colorado. See FED.R.CIV.P. 45(c)(3). Inguran argues that XY has not stated why these witnesses are relevant. This argument is without merit. Inguran asserts in its complaint that XY misrepresented the capabilities of XY technology. Thus, the testimony of those who researched and developed XY technology and trained Inguran employees to use the technology would certainly be relevant. Requiring the case to proceed in Texas where the defendant may not be able to rely on key non-party witnesses would not be consistent with the "interest of justice." 28 § 1404(a). In contrast, Plaintiff has not identified any non-party witnesses that would be unavailable in Colorado.

In addition, there is evidence that the parties themselves agreed that Colorado would be a convenient forum to hear lawsuits. In each license contract, the parties agreed to the following:

This license Agreement shall be construed, interpreted, and enforced pursuant to laws of Colorado, and the parties hereto submit and consent to jurisdiction and venue in Larimer County, Colorado, except to the extent preempted by federal jurisdiction in which case such jurisdiction shall be in the Federal courts of Colorado. Notwithstanding the preceding sentence, nothing contained in this license agreement shall preclude Licensor from bringing action in an appropriate forum to enforce the terms and provisions of this License Agreement or any award or judgement thereon.

Plaintiff's exhibit A-G paragraph 6.3. While this clause is permissive and not compulsory, it demonstrates that the District of Colorado was agreed upon as a convenient forum for both parties. Section 1404(a) "encompasses consideration of the parties' private expression of their venue preferences." Stewart Org., Inc. v. Ricoh Corp., 487 U.S. 22, 29-30 (1988).

See Caldas Sons, Inc. v. Willingham, 17 F.3d 123, 127-28 (5th Cir. 1994).

The public factors do not tip the scales in favor of proceeding in the Western District of Texas. Colorado law will apply to claims relating to the license agreements pursuant to paragraph 6.3 of the contract. Inguran argues, however, that Texas law will apply to its fraud and promissory estoppel claims because they are based on an oral agreement to exchange stock. The reasoning behind Inguran's assertion is unclear. Texas uses the "most significant relationship" test to determine choice-of-law issues. In this case, correspondence was sent to and from Colorado, telephone calls were made to and from Colorado, and much of the technology at issue was developed in Colorado in conjunction with Colorado State University. Thus, it is not clear that Texas law will apply to the additional claims, but it is clear that Colorado law will apply to claims involving construction, interpretation, and enforcement of the license agreement. Moreover, these facts indicate that the citizens of the District of Colorado have just as significant an interest in resolving the controversy as the citizens in the Western District of Texas.

Conclusion

Considering the relevant § 1404(a) factors as set forth by Fifth Circuit, the Court concludes that a transfer under section § 1404(a) is warranted. Accordingly, XY's motion to transfer venue (docket no. 10) is GRANTED, and this case is transferred to the District of Colorado.

See In re Volkswagen AG, 371 F.3d 201 (5th Cir. 2004).


Summaries of

INGURAN, L.P. v. XY, INC.

United States District Court, W.D. Texas, San Antonio Division
Jun 1, 2006
Civil Action No. SA:06-CV-0200-XR (W.D. Tex. Jun. 1, 2006)
Case details for

INGURAN, L.P. v. XY, INC.

Case Details

Full title:INGURAN, L.P. d/b/a SEXING TECHNOLOGIES, Plaintiff, v. XY, INC., Defendant

Court:United States District Court, W.D. Texas, San Antonio Division

Date published: Jun 1, 2006

Citations

Civil Action No. SA:06-CV-0200-XR (W.D. Tex. Jun. 1, 2006)