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finding the location where the conduct complained of occurred a neutral factor because “the alleged fraudulent conduct [in California] was directed at [Plaintiff] in Minnesota”
Summary of this case from Toomey v. DahlOpinion
Civil No. 03-3210 (JRT/FLN).
July 7, 2004
David R. Marshall and Crystal M. Ovsak, FREDRIKSON BYRON, Minneapolis, MN, for plaintiff.
Morton R. Branzburg, KLEHR, HARRISON, HARVEY, BRANZBURG ELLERS, Philadelphia, PA; and Joseph M Sokolowski, PARSINEN KAPLAN ROSBERG GOTLIEB, Minneapolis, MN, for defendant AmerisourceBergen Corporation, AmerisourceBergen Drug Corporation, AmerisourceBergen Services Corporation, and Bergen Brusnwig Drug Company.
Robert M. Gardner, GARDNER LAW OFFICE, St. Paul, MN and Richard L Miller, II, NOVACK AND MACEY LLP, Chicago, IL, for defendant Stayhealthy.
William J. Egan, WILLIAM J EGAN, PLC, Edina, MN, for defendant Gary Yoshimo.
MEMORANDUM OPINION AND ORDER ON MOTION TO TRANSFER VENUE
The AmerisourceBergen defendants ("ABC") have moved to transfer this case, pursuant to 28 U.S.C. § 1404(a), to the Central District of California. Defendant Stayhealthy, Inc. ("Stayhealthy") opposes the transfer, as does plaintiff Petters Corporation ("Petters"). Defendant Gary Yoshimo filed a letter on May 17, 2004, joining ABC's motion to transfer. For the reasons discussed below, the Court denies the motion to transfer.
ANALYSIS
The Court will discuss background facts as they relate to each factor in the transfer analysis.
I. STANDARD
Title 28 U.S.C. § 1404(a) allows the Court to transfer a case to any other federal district court with jurisdiction "for the convenience of parties and witnesses, in the interest of justice." As the Eighth Circuit paraphrased, section 1404(a) "reveals three general categories of factors that courts must consider when deciding a motion to transfer: (1) the convenience of the parties, (2) the convenience of the witnesses, and (3) the interest of justice." Terra Int'l, Inc. v. Mississippi Chem. Corp., 119 F.3d 688, 691 (8th Cir. 1997) (citing 28 U.S.C. § 1404(a)). Although the statute articulates these three factors, the Court is not limited to them. "Instead, courts have recognized that such determinations require a case-by-case evaluation of the particular circumstances at hand and a consideration of the relevant factors." Id.
In its entirety, the provision reads: "For the convenience of the 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." There seems no dispute that the Central District of California would have jurisdiction.
As a rule, "transfer under § 1404(a) `should not be freely granted.'" Graff v. Qwest Communications Corp., 33 F. Supp.2d 1117, 1121 (D. Minn. 1999) (quoting In re Nine Mile Ltd., 692 F.2d 56, 61 (8th Cir. 1982)). "The party seeking transfer bears the burden of proof to show that the balance of factors `strongly' favors the movant." Id. (quoting Gulf Oil Corp. v. Gilbert, 330 U.S. 501, 508 (1947) ("Unless the balance is strongly in favor of the defendant, the plaintiff's choice of forum should rarely be disturbed."); Durabla Mfg. Co. v. Continental Cas. Co., No. 98-1596, 1998 WL 957250 at *3 (D. Minn. Oct. 26, 1998) (explaining that the moving party bears a heavy burden of proving that the balance of factors strongly favors transfer). If the factors are evenly balanced or weigh only slightly in favor of transfer, the transfer motion should be denied. Graff, 33 F. Supp.2d at 1121. In addition to considering the convenience of the parties and witnesses and the interests of justice, "the court must conduct a case-by-case evaluation of the particular circumstances involved." Id. (citing Terra Int'l, Inc., 119 F.3d at 691).
A. Convenience factors
In assessing these two categories, the Eighth Circuit has approved consideration of several "sub-factors" including (1) the convenience of the parties, (2) the convenience of the witnesses — the willingness of witnesses to appear, the ability to subpoena witnesses, and the adequacy of deposition testimony, (3) the accessibility to records and documents, (4) the location where the conduct complained of occurred, and (5) the applicability of each forum state's substantive law. Terra Int'l, Inc., 119 F.3d at 696 (citing Terra Int'l, Inc. v. Mississippi Chem. Corp., 922 F. Supp. 1334, 1357-61 (N.D. Iowa 1996)).
1. Convenience of the parties
Petters argues this factor supports keeping the case in Minnesota. Petters is headquartered in Minnesota, and is represented by Minnesota counsel. Petters employees with information relevant to this dispute are located in Minnesota as well. Similarly, all Petters documents related to the dispute are in Minnesota. ABC is based in Pennsylvania and its main counsel is from Pennsylvania. ABC does not argue that it lacks resources to litigate in Minnesota.
Individual defendant Gary Yoshimo is now a cross-claim defendant. Yoshimo joins the ABC defendants' arguments in favor of transfer. Yoshimo, a former employee of ABC, resides in California, and was represented at the transfer hearing by a Minnesota attorney. Although Mr. Yoshimo argues that a trial in California would be more convenient, he does not indicate that this forum would be unduly burdensome or would prevent him from participating in his defense.
The presence of an individual defendant in California tips this factor more toward transfer. On balance, however, the convenience of the parties does not weigh heavily in favor of transfer.
2. Convenience of witnesses
The convenience of the witnesses is an important factor to the extent it determines the "relative ease of access to sources of proof." Gulf Oil Corp., 330 U.S. at 508. In Coast-to-Coast Stores, Inc., the court found that relevant considerations concerning this factor include the number of essential non-party witnesses, their location and the preference of courts for live testimony as opposed to depositions. Coast-to-Coast Stores, Inc. v. Womack-Bowers, Inc., 594 F. Supp. 731, 734 (D. Minn. 1984). However, this factor "should not be determined solely upon a contest between the parties as to which of them can present a longer list of possible witnesses located in the respective districts; the party seeking the transfer must clearly specify the essential witnesses to be called and must make a general statement of what their testimony will cover." Nelson v. Master Lease Corp., 759 F. Supp. 1397, 1402 (D. Minn. 1991) (emphasis added) (citing Charles A. Wright, Arthur R. Miller Edward H. Cooper, Federal Practice and Procedure § 3851 at 425). In determining this factor, the Court must examine the materiality and importance of the anticipated witnesses' testimony and then determine their accessibility and convenience to the forum. Reid-Walen v. Hansen, 933 F.2d 1390, 1396 (8th Cir. 1991).
Petters and Stayhealthy indicate that their witnesses are primarily from Minnesota. However, Petters witnesses are Petters employees, so their attendance could be compelled in California. Int'l Truck Eng. Corp. v. Dow-Hammond Trucks Co., 221 F. Supp.2d 898, 905 (N.D. Ill. 2002). ABC, on the other hand, has identified several "essential" nonparty witnesses from outside of Minnesota. Three of the witnesses ABC identified have already been deposed, and the depositions were video-taped. ABC points out that a witness's consent to a deposition in his or her home State does not necessarily indicate that the witness would be willing to travel to Minnesota for a trial. Nonetheless, even assuming the witnesses are unwilling to make the journey to Minnesota, ABC will not be totally without access to the testimony of these witnesses.
ABC specifically discusses two witnesses who are no longer employed by ABC but have important information about the dispute, Doug Batezel and David Wright. Batezel and Wright have been deposed, and ABC does not indicate that either individual would be unwilling to give testimony in Minnesota. Therefore, defendants have not established that this factor weighs strongly in favor of transfer on the basis of witnesses Batezel and Wright.
In its moving papers, ABC also included Gary Yoshimo in this category. As discussed, Mr. Yoshimo is now a party, therefore this argument no longer applies to his testimony.
ABC also points to witness Linda Pfeffer, a representative of the AFAA (Aerobics and Fitness Association of America). Ms. Pfeffer purportedly has knowledge about certain aspects of the ABC-Stayhealthy relationship implicated by the crossclaims. ABC names two additional individuals, Charles Jarvis and David Snyder, and also notes "IMB employees associated with the "Stayhealthy Kiosk" project.
ABC concedes that it has no knowledge that these individual non-party witnesses will be unwilling to testify in Minnesota. It appears that most of the potential witnesses have participated in depositions, and as such their sworn testimony would be available at trial on video. Therefore, although this factor favors transfer, it does so only slightly.
3. Records and documents
This factor does not weigh significantly either way. Records and documents exist in both locations, and both Petters and ABC are capable of producing them in either location.
4. The location where the conduct complained of occurred
ABC suggests that the majority of the conduct at issue occurred in California. There is no doubt that some conduct occurred in California. However, there were frequent communications between California and Minnesota, and some conduct occurred in Minnesota. Petters also points out that important conduct occurred in Minnesota, and Petters notes that the alleged fraudulent conduct was directed at Petters in Minnesota. This factor therefore is neutral.
B. Interests of justice
The interest of justice factor weighs heavily on the transfer analysis. Radisson Hotels Int'l, Inc. v. Westin Hotel Co., 931 F. Supp. 638, 641 (D. Minn. 1996); Nelson, 759 F. Supp. at 1402 (citations omitted). Among the considerations which may be relevant in analyzing this factor are the relative familiarity of the two courts with the law to be applied, the relative ability of the parties to bear the expenses of litigating in a distant forum, judicial economy, the plaintiff's choice of forum, obstacles to a fair trial, and each party's ability to enforce a judgment. See Terra Int'l, Inc., 119 F.3d at 696; Nelson, 759 F. Supp. at 1403 (citing Van Dusen, 376 U.S. at 643-45).
1. Judicial economy
Each party says judicial economy favors its position. The Court finds this factor weighs in favor of maintaining the case here, because any transfer risks delaying the ultimate resolution of this dispute. In addition, this Court has already become familiar with the dispute by addressing defendant ABC's appeal of an Order by United States Magistrate Judge Franklin L. Noel.
2. Plaintiff's choice of forum
Courts give considerable deference to a plaintiff's choice of forum, and there is a "normal presumption in favor of a plaintiff's choice of forum." Christensen Hatch Farms, Inc. v. Peavey Co., 505 F. Supp. 903, 911 (D. Minn. 1981). This is particularly true where the plaintiff resides in the district in which the lawsuit was filed. Sky Valley Ltd. Partnership v. ATX Sky Valley, Ltd., 776 F. Supp. 1271, 1276 (N.D. Ill. 1991); see also Medtronic, Inc. v. American Optical Corp., 337 F. Supp. 490, 497 (D.Minn. 1971) ("it is now clear that a plaintiff's choice of forum is no longer entitled to the great weight given it under the doctrine of forum non conveniens, and is simply one factor to be considered.") (emphasis added). Moreover, section 1404(a) provides for transfer to a more convenient forum, not to a forum likely to prove equally convenient or inconvenient, and a transfer should not be granted if the effect is simply to shift the inconvenience to the party resisting the transfer. Van Dusen v. Barrack, 376 U.S. 612, 646 (1964). Therefore the party seeking a transfer under section 1404(a) bears the burden of proving that a transfer is warranted. Terra Int'l, Inc., 119 F.3d 695 (citing Jumara v. State Farm Ins. Co., 55 F.3d 873, 879 (3d Cir. 1995)); Scheidt v. Klein, 956 F.2d 963, 965 (10th Cir. 1992).
ABC argues that because the conduct occurred in California, plaintiff's choice of forum is not entitled to controlling weight. ABC cites a District of Minnesota case for this proposition, GMAC/Residential Funding Corp. v. The Platinum Co. of Real Estate Fin. Serv., Inc., 2003 WL 1572007, at *2 (D. Minn. March 13, 2003) (RHK). However, in that case, the Court acknowledged that the plaintiff's choice of forum weighed against transfer. Other factors supported transfer; in particular the Court noted that it did not have personal jurisdiction over the third-party defendant, and "both parties agree[d], the operative events constituting the fraud alleged in the Complaint took place in Ohio. The property-flipping scheme occurred in Ohio and all of the public records at issue in the litigation that arose from the scheme are located in Ohio." Id.
This case does not present equivalent factors in the "interest of justice" analysis that would undermine Petters' choice of forum. The Court has personal jurisdiction over all parties, some operative events took place in Minnesota, and public records are not at issue. Therefore, this factor does not impact the transfer analysis.
3. Conflicts issues and other factors
Petters makes claims premised on contract law, the law of secured transactions, common law fraud, and the RICO statute (The Racketeer Influenced and Corrupt Organizations Act). ABC suggests that the questions of state law are relatively simple, therefore this factor does not favor maintaining the case in Minnesota. Although California courts are certainly capable of applying Minnesota contract law, Minnesota has an interest in providing a forum to parties seeking to remedy the alleged breach of contract with its residents. See GMAC/Residential Funding Corp. v. Infinity Mortgage, Civ. No. 02-4090, 2003 WL 21406189, *3 (D. Minn. June 13, 2003). This interest supports maintaining the case in this forum.
The Court is not persuaded by defendant ABC's argument that transfer is warranted so that defendant Stayhealthy is able to mount a vigorous defense. Stayhealthy opposes the transfer, and argues that it will present a vigorous defense in this forum. Counsel for Stayhealthy also informed the Court during oral argument that Stayhealthy has retained additional counsel to represent it in this matter.
Other factors, such as the parties' abilities to bear the expenses of litigating this matter, and the parties' abilities to enforce a judgment, are not called into play in this case.
C. Conclusion
In this case, the only factors fairly supporting transfer are the residency of the individual defendant, and the location of a handful of non-party witnesses whose testimony will be available on video, in the "worst case scenario." Balanced against the plaintiff's choice of forum, this Court's familiarity with the case, and the fact that transfer should not be granted only to transfer the inconvenience from one party to another, the Court denies defendant ABC and Yoshima's motion to transfer. Graff, 33 F. Supp.2d at 1121 (transfer motion should be denied where factors are evenly balanced therefore or only slightly favor transfer).
ORDER
Based upon the foregoing, the submissions of the parties, the arguments of counsel and the entire file and proceedings herein, IT IS ORDERED that the ABC defendants' motion to transfer this matter to the Central District of California [Docket No. 82], joined in by defendant Gary Yoshima [Docket No. 103], is DENIED.