Opinion
Civil Action No. 04-2266 Section: "D" (4).
October 5, 2004
Before the court is the "FRCP 12(b) Motions to Dismiss for Lack of Personal Jurisdiction and for Improper Venue" filed by Defendant, the Texas Mexican Railway Company (Tex Mex). Plaintiff, Sun Drilling Products Corporation (Sun Drilling), filed a memorandum in opposition. The motion, set for hearing on Wednesday, September 29, 2004, is before the court on briefs, without an evidentiary hearing or oral argument. Now, having reviewed the memoranda of counsel and the applicable law, the court finds that motion should be denied.
I. Background
Plaintiff, Sun Drilling, a corporation organized and existing under the laws of the State of Louisiana and domiciled in Belle Chasse, Louisiana, is a reorganized debtor in a bankruptcy case entitled " In re: Sun Drilling Products Corporation," No. 99-14143 (B), in the Bankruptcy Court for the Eastern District of Louisiana. Defendant Tex Mex, allegedly a Texas corporation organized under the laws of the state of Texas and doing business in Louisiana, filed a proof of claim in that bankruptcy proceeding in the amount of $1,990,321.59, alleging a general unsecured claim for property damages, environmental clean up and exemplary damages. (Complaint, ¶¶ 2, 6-7).
Tex Mex represents that:
The Texas Mexican Railway Company is owned by its stock holder, Mexrail, Inc., a Delaware corporation. Mexrail, Inc. is wholly owned by TFM, a Mexican corporation. TFM's stock is owned fifty one (51%) by TMM, a Mexican corporation, and forty nine (49%) by Kansas City Southern, Inc. (KCSI). Kansas City Southern, Inc. is a holding company, which owns the controlling shares of the stock of Kansas City Southern Railway Company and other entities. The Texas Mexican Railway Company is not part of the Kansas City Railway Company and does not form a part of the Kansas City Railway Company's system. The Texas Mexican Railway Company does not now have any trackage in Louisiana by ownership, lease, or any other method and has not since 1995, if ever.See Supplemental Affidavit of Arturo Dominguez, p. 7.
On March 19, 1998, Tex Mex filed suit against Sun Drilling, among others, in the 111th District Court of Web County, Texas, No. 98CVQ00286, seeking damages to Tex Mex's right of way property resulting from leaking and corroding barrels and containers in violation of the Texas Water Code and solid waste management laws. ( See Affidavit of Arturo Dominguez, p. 4, attached to Defendants' Motion to Dismiss).
Sun Drilling objected to Tex Mex's proof of claim, however, Sun Drilling and Tex Mex ultimately agreed to a compromise and settlement agreement which provided that Tex Mex's claim would be reduced and allowed in the amount of $550,000.00, subject to approval of a plan incorporating terms of the settlement agreement. (Complaint, ¶¶ 9-10).
The Bankruptcy Court ultimately approved the settlement agreement in conjunction with the confirmation of the Amended Plan of Reorganization. The Amended Plan was modified to provide that in consideration for the release by Tex Mex of certain claims, the Tex Mex allowed claim would be increased to $625,000.00 payable over seven years. ( Id. at 13).
The parties also entered an exclusive licensing agreement, although the parties now dispute whether or not this exclusive licensing agreement was a part of the settlement agreement approved by the Bankruptcy Court. In any event, the exclusive licensing agreement was signed by Leonard Pipkin for Sun Drilling on June 16, 2000, and by Arturo Dominguez for Tex Mex on June 19, 2000, and the Order approving the Motion for Authority to Enter into Exclusive Licensing Agreement was entered in the Chapter 11 bankruptcy case on July 17, 2000. ( See Exclusive Licensing Agreement, attached to Sun Drilling's Opposition as an attachment to Heller Declaration; see also Order approving Motion for Authority to Enter into Exclusive Licensing Agreement, Bankruptcy Ct. Docket 99-14143 "B", Doc. No. 610).
Sun Drilling alleges that " as part of the Settlement Agreement, the parties negotiated a business arrangement which resulted in an exclusive licensing agreement between Sun and Tex Mex." (Complaint at ¶ 11, emphasis added).
However, Tex Mex maintains that "[n]either the Motion to Approve the Compromise and Settlement Agreement nor the Agreement itself refer to an Exclusive Licensing Agreement between Sun Drilling and the Railway. The Railway's position throughout the negotiations with Sun Drilling was that it would not enter into any licensing agreement with Sun Drilling until after the Compromise and Settlement Agreement was approved by the Bankruptcy Court." ( See Supp. Affidavit of Arturo Dominguez at p. 6). Further, according to Mr. Dominguez,
Neither the Motion for Authority to Approve Licensing Agreement nor the Agreement itself refer to a Compromise and Settlement Agreement between Sun Drilling and the Railway. It was the Railway's position throughout the negotiations that it would not agree to a final order on the Motion to Enter the Licensing Agreement until the Sun Drilling Amended Chapter 11 Plan of Reorganization was confirmed by the final order of the bankruptcy Court.
. . .
It was additionally the Railway's position throughout all negotiations about the Licensing Agreement with Sun Drilling that it would not be connected in any way with the chapter 11 case, other than a motion seeking Bankruptcy Court approval for Sun Drilling o enter into the licensing agreement. The railway never reached any agreement with Sun Drilling that the Licensing Agreement was tied in any way with the Compromise and Settlement Agreement concerning the Railway's Class 6 claim in the chapter 11 case. It was the Railway's position throughout the negotiations and approval of the exclusive Licensing Agreement that it would not be tied in any way with the Sun Drilling chapter 11 bankruptcy case, which is why the hearing on the Motion to approve it was delayed until after the June 30, 2000 confirmation of the amended plan. The Railway wanted the licensing agreement to be with the reorganized debtor and not the chapter 11 debtor.
(Dominguez Supp. Affidavit at pp. 6-7).
The Licensing Agreement provided that Tex Mex would act as Sun Drilling's exclusive licensee and distributor in Mexico and sell Sun Drilling's products on an exclusive basis in Mexico. ( See Complaint at ¶¶ 11, 21; see also Exclusive Licensing Agreement attached to Heller Declaration). Further, Tex Mex was to sell Sun Drilling's products on a non-exclusive basis in Central and South America. ( See Complaint at ¶ 22 Exclusive Licensing Agreement).
Sun Drilling made payments to Tex Mex totaling $137,236.00 during the approximately two years following confirmation of the Amended Plan of Reorganization. However, Sun Drilling now alleges that Tex Mex failed to perform its obligations under the Exclusive Licensing Agreement to market Sun's products in Mexico, and thus Sun Drilling made no further payments to Tex Mex. (Complaint at ¶ 14).
On June 14, 2004, Tex Mex notified Sun Drilling that it was in default under the provisions of the Amended Plan of Reorganization in payment of Tex Mex' approved claim for $625,000, since no payments had been received since June 2002. Tex Mex also moved to reopen the bankruptcy case because of this alleged default. Sun Drilling opposed the reopening of the bankruptcy proceeding for lack of jurisdiction, and on August 4, 2004, the Bankruptcy Court denied Tex Mex' motion to reopen. ( Id. at 15-17).
On September 21, 2004, Tex Mex filed in the United States District Court for the Eastern District of Louisiana, a Notice of Appeal from the Bankruptcy Court's Order denying Tex Mex' Motion to Reopen Chapter 11 case. ( See Civil Docket No. 04-2613 "T", EDLA).
On August 10, 2004, Sun Drilling filed this Declaratory Judgment action seeking a determination that: (1) Tex Mex defaulted under the Exclusive Licensing Agreement; and (2) thus, Sun Drilling is relieved of its obligations to pay any monies to Tex Mex under the Amended Reorganization Plan and incorporated Settlement Agreement. Tex Mex now seeks dismissal of this action for lack of personal jurisdiction and improper venue.
II. Legal Analysis
A. Personal JurisdictionWhen, as here, the court does not conduct an evidentiary hearing on Defendant's motion to dismiss, the party seeking to assert jurisdiction is required only to present sufficient facts to make out a prima facie case supporting jurisdiction. Central Freight Lines Inc. v. APA Transport Corp., 322 F.3d 376, 380 (5th Cir. 2003). Further, the court shall accept as true that party's uncontroverted allegations (so long as the allegations are not merely conclusory) and resolve all factual conflicts in favor of the party seeking to invoke the court's jurisdiction. Id.
In a diversity case, such as this, a federal court may exercise personal jurisdiction over a defendant only to the extent permitted by the applicable law of the forum state. Id. Here, it is well-established that the Louisiana long-arm statute authorizes the exercise of personal jurisdiction to the full extent allowed by the Due Process Clause of the Fourteenth Amendment. LSA-R.S. 13:3201(B).
LSA-R.S. 13:3201(B) provides:
In addition to the provisions of Subsection A, a court of this state may exercise personal jurisdiction over a nonresident on any basis consistent with the constitution of this state and of the Constitution of the United States.
The Due Process Clause permits the exercise of personal jurisdiction over a nonresident defendant when (1) that defendant has purposefully availed himself of the benefits and protections of the forum state by establishing 'minimum contacts' with the forum state and thus reasonably could anticipate being haled into court there; and (2) the exercise of jurisdiction over the defendant does not offend 'traditional notions of fair play and substantial justice.'" Latshaw v. Johnston, 167 F.3d 208, 211 (5th Cir. 1999), quoting Int'l Shoe Co. v. Washington, 326 U.S. 310, 316, 66 S.Ct. 154, 90 L.Ed.2d 95 (1945).
"Minimum contacts" can be established either through contacts sufficient to assert specific jurisdiction, or contacts sufficient to assert general jurisdiction. Alpine View Co. v. Atlas Copco AB, 205 F.3d 208, 215 (5th Cir. 2000).
Specific jurisdiction over a non-resident corporation is appropriate when that corporation has purposefully directed its activities at the forum state and the "litigation results from alleged injuries that 'arise out of or relate to' those activities." Burger King Corp. v. Rudzewicz, 471 U.S. 462, 472, 105 S.Ct. 2174, 85 L.Ed.2d 528 (1985), quoting Helicopteros Nacionales de Columbia, S.A. v. Hall, 466 U.S. 408, 414, 104 S.Ct. 1868, 80 L.Ed.2d 404 (1984). Further, a single act may support specific jurisdiction where the act is directed at residents of the forum, and the cause of action relates to the act. Burger King, 471 U.S. at 476 n. 18.
On the other hand, general jurisdiction exists where a defendant's contacts with the forum state are substantial and "continuous and systematic," but unrelated to the plaintiff's cause of action. Central Freight Lines Inc. v. APA Transport Corp., 322 F.3d 376, 381 (5th Cir. 2003); Helicopteros, 466 U.S. at 415-16.
Here, Tex Mex does not appear to have the kind of substantial, continuous, and systematic contacts with the State of Louisiana sufficient to support an exercise of general jurisdiction. However, specific jurisdiction is another matter. Tex Mex does appear to have contacts with the State of Louisiana related to the transaction and events giving rise to this specific cause of action that are sufficient to support specific jurisdiction. Burger King, 471 U.S. at 474-79, 105 S.Ct. 2174.
1. Sufficient contacts to support specific jurisdiction
According to the Declaration of Douglas P. Heller, the President of Sun Drilling, it was during the pendency of Sun Drilling's bankruptcy proceeding (wherein Tex Mex had made a claim), that Tex Mex approached Sun Drilling with a proposal to sell Sun Drilling's products to Petroleos Mexicanos ("Pemex"). ( See Heller Declaration, attached to Sun Drilling's Opposition, at ¶ 6). However, according to the Supplemental Affidavit of Arturo Dominguez of Tex Mex, Tex Mex did not approach Sun Drilling concerning an exclusive licensing agreement, but rather "Mr. Leonard Pipkin or one of Sun Drilling's attorneys first breached the prospect of the Railway selling Sun Drilling's products a few weeks prior to May 4, 2000." ( See Supp. Affidavit of Arturo Dominguez, p. 6, attached to Tex Mex' Supp. Memo.).
In any event, Tex Mex admits that the negotiations leading to the confection of the Exclusive Licensing Agreement ("Agreement") between the two parties took place over several weeks over the telephone and by correspondence. Further, while attending at least two hearings in New Orleans, Louisiana before the Bankruptcy Court in Sun Drilling's Chapter 11 case, in New Orleans, Louisiana, representatives of Tex Mex met with representatives of Sun Drilling to also discuss the proposed licensing agreement. Ultimately, the Agreement was finalized and signed by the Sun Drilling's representative in New Orleans, and by Tex Mex representative in Laredo, Texas. ( See Supp. Affidavit of Arturo Dominguez at pp. 3-5).
Further, the Licensing Agreement itself states that it "will be governed by the laws of the united States and of the State of Louisiana." (Agreement at ¶ 11). And attached to the Licensing Agreement is a document entitled "Terms and Conditions of Sale," which again states that "THIS CONTRACT SHALL BE GOVERNED BY THE LAWS OF LOUISIANA." (Agreement, Exhibit A "TERMS AND CONDITIONS OF SALE").
The Licensing Agreement also provides that "[a]ll shipments shall be made F.O.B. Sun's Belle Chasse, Louisiana facility." ( See Agreement at ¶ 4(B), attached to Heller Declaration). Pursuant to Louisiana Civil Code Article 2616,
When the contract requires the seller [here, Sun Drilling] to ship things through a carrier, but does not require him to deliver the things at any particular destination, the risk of loss is transferred to the buyer [here, Tex Mex] upon delivery of the things to the carrier, regardless of the form of the bill of lading.
When the contract of sale requires the seller to deliver the things at a particular destination, the risk of loss is transferred to the buyer when the things, while in possession of the carrier, are duly tendered to the buyer at the place of destination.
When the parties incorporate well established commercial symbols into their contract, the risk of loss is transferred in accordance with the customary understanding of such symbols.
The commentary to Article 2616 provides that:
(a) . . . when the seller is not required to deliver at a particular destination, the things that are the contractual object will travel at the buyer's risk even under a bill of lading that makes the things deliverable to the seller or his agent. . . .
(b) The well-established commercial symbols referred to in this Article are those that represent particular kinds of agreements that contemplate the transportation of things, such as F.O.B., C.I.F., F.A.S., and others recognized and frequently used in the practice of commerce. Such symbols allude the contractual duties of the parties, who in their freedom thus may depart from the basic rules that are provided in this Article for situations where the parties made no express provision. Such symbols are defined in great detail in U.C.C. 2-319 and U.C.C. 2-320; INCOTERMS (International Chamber of Commerce Terms); and R.A.F.T.D. (Revised American Foreign Trade Definitions). Those bodies of rules and definitions are to be regarded as subsidiary to the suppletive nature of this Article, as they reflect the customs and usages of commerce, which, in Civil Code Articles 2053, 2054, and 2055 (Rev. 1984), are recognized as sources of guidance to ascertain the intention of the parties.
(c) Under this Article, when the seller has agreed to deliver the things free on board (F.O.B.) the place of shipment, he must ship the things at that place and bear the expense of putting them in possession of the carrier there, at which moment the risk of loss is passed to the buyer. When the seller has agreed to deliver the things free on board (F.O.B.) the place of destination he must transport the things at his own expense and risk to that place and tender delivery to the buyer there. See U.C.C. 2-319; INCOTERMS F.O.B., R.A.F.T.D.F.O.B.; Commercial Code of Honduras, Article 790.
. . . .
LSA-C.C. Art 2616, Comments.
Thus, under the language used in the Licensing Agreement, i.e., "[a]ll shipments shall be made F.O.B. Sun's Belle Chasse, Louisiana facility," Sun Drilling agreed to deliver the things free on board (F.O.B.) the place of shipment (Belle Chasse, Louisiana), and Sun Drilling had to ship its products to that place and bear the expense of putting them in possession of the carrier there, but at that moment the risk of loss was passed to Tex Mex. And finally, the Tex Mex's alleged breach of the Licensing Agreement gives rise to Sun Drilling's Complaint for Declaratory Judgment, with the harm of the alleged breach felt by Sun Drilling in Louisiana.
The court thus concludes that Tex Mex specifically and deliberately "reached out" to a Louisiana corporation with the deliberate aim of entering into a long-standing contractual relationship with a Louisiana corporation. Burger King, 471 U.S. at 479-80, 105 S.Ct. at 2174. The significance of Tex Mex' representative signing the agreement in Texas, is diminished by both the provision specifying that the agreement would be governed by the laws of the state of Louisiana and the provision requiring that shipments of the products (which were the subject of the agreement) be made F.O.B. Sun Drilling's Belle Chasse, Louisiana facility.
Such contacts by Tex Mex with the State of Louisiana cannot be characterized as "random," "fortuitous," or "attenuated." Burger King, 471 U.S. at 474, 478-80, 105 S.Ct. 2174; Central Freight Lines, 322 F.3d at 383. Rather, the court concludes (but "quite apart from the merits of [Sun Drilling's claims]"), that
[u]nder any "highly realistic" and non-"mechanical" understanding of the [Licensing] Agreement, its negotiations, and its future consequences for the parties' business relationship, it is clear that [Tex Mex] purposefully directed its in-state and out-of-state activities at a resident of the forum (namely, [Sun Drilling]) with the aim of establishing a long-term association with that resident and with the foreseeable and intended result of causing economic activity within the forum state. Based on these facts, [Tex Mex] should have reasonably anticipated being haled into court in [Louisiana] on the breach of contract claims related to that [Licensing] Agreement, notwithstanding [Tex Mex'] relatively brief physical presence in the state.Central Freight Lines, 322 F.3d at 383. 2. Traditional Notions of Fair Play and Substantial Justice
Compare Central Freight Lines Inc. v. APA Transport Corp., 322 F.3d 376, 381-84 (5th Cir. 2003) (while APA, a New Jersey company, did not have substantial, continuous and systematic contacts with the State of Texas sufficient to support an exercise of general jurisdiction, it did appear to have contacts with the State of Texas related to the transaction giving rise to the specific cause of action that were sufficient to support specific jurisdiction).
In Central Freight Lines, the Defendant APA (a New Jersey freight delivery company) sent two representatives to meet with Plaintiff Central Freight Lines (CFL), a freight delivery company at its headquarters in Waco, Texas. "APA provided CFL with information about APA. It also obtained information about CFL with the hope of finding a partner in Texas to interline freight to the East Coast . . . [T]his meeting led the parties to negotiate and enter into their Interline Agreement. Furthermore, although the parties dispute[d] whether the formal negotiations took place in . . . Texas or . . . New Jersey, the record appears to indicate that all of the formal negotiations took place via telephone and written correspondence between the two parties from their respective headquarters." Id. at 382. Further, "by entering into the Interline Agreement, APA knew that it was affiliating itself with an enterprise based primarily in Texas." Id.
Further, unlike the Licensing Agreement here that has a choice of law clause, the Interline Agreement in Central Freight Lines did not even have a choice of law clause or some other provision that could have put the defendant on specific notice that it might be amenable to suit in plaintiff's home state. Id. at 383.
Once a plaintiff establishes minimum contacts between the defendant and the forum State, the burden shifts to defendant to show the assertion of jurisdiction would be unfair and unreasonable. Wien Air Alaska, Inc. v. Brandt, 195 F.3d 208, 215 (5th Cir. 1999). And "[t]o show that an exercise of jurisdiction is unreasonable once minimum contacts are established, the defendant must make a 'compelling case' against it. It is rare to say the assertion is unfair after minimum contacts have been shown." Id. (citations omitted).
"The interests to balance in this determination are the burden on the defendant having to litigate in the forum; the forum state's interests in the lawsuit; the plaintiff's interests in convenient and effective relief; the judicial system's interest in efficient resolution of controversies; and the state's shared interest in furthering fundamental social policies." Id.
Here, Tex Mex has failed to present a compelling case in support of its argument that asserting personal jurisdiction in this case would be offensive to traditional notions of fair play and substantial justice. Burger King, 471 U.S. at 477, 105 S.Ct. 2174.
More specifically, Tex Mex has failed to show that it will be substantially burdened if it is required to litigate in Louisiana. Further, Louisiana has interests in the lawsuit as the Agreement itself contains a choice of law clause that calls for the application of Louisiana law, and the Agreement also required that all shipments of Sun Drilling's products be made F.O.B. Belle Chasse, Louisiana. Finally, Louisiana has an interest in providing a convenient forum where it citizens can seek redress for breach of contract by a non-resident corporate defendant.
B. Venue
For purposes of venue in this diversity case, Plaintiff Sun Drilling could file its complaint against Tex Mex (a Texas corporation) in
(1) a judicial district where [Tex Mex] resides . . ., (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 subject of the action is situated, or (3) a judicial district in which [Tex Mex] 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.28 U.S.C. § 1391(a).
Further, for purposes of venue,
a defendant [such as Tex Mex] that is a corporation shall be deemed to reside in any judicial district in which it is subject to personal jurisdiction at the time the action is commenced.28 U.S.C. § 1391(c).
Here, because Tex Mex is subject to personal jurisdiction in the Eastern District of Louisiana (as discussed above), it is deemed to reside within the Eastern District of Louisiana for purposes of venue. 28 U.S.C. § 1391(a)(1) (c). Further, because the Exclusive Licensing Agreement was confected in Belle Chasse, Louisiana, and the effects of the alleged breach are felt in this forum, the Eastern District of Louisiana is also "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). Accordingly, the court finds that venue is proper in the Eastern District of Louisiana, and rejects Tex Mex's arguments that the matter should be dismissed for improper venue.
The court notes that § 1391(c) qualifies personal jurisdiction "at the time the action is commenced". However, as the commentary to 28 U.S.C. § 1931 "Commencement of Action Is Key Time in Measuring Jurisdiction" discusses:
Some of the jurisdictional bases a plaintiff may rely on to show proper venue against a defendant will exist without regard to when the action is commenced. They will depend on other factors that make the time of commencement irrelevant, With longarm jurisdiction, for example, the jurisdiction will be based on the contacts that the defendant had with the state earlier, when the defendant performed the acts out of which the claim arises. If the defendant had such contacts, they freeze in time and stand ready at all times to supply longarm jurisdiction. Hence, for both jurisdiction and for venue in a longarm case, the moment of commencement of the action won't matter (however much it may matter, of course, in measuring the statute of limitations).
David D. Siegel, Commentary on the 1988 and 1990 Revisions of Section 1391, Commencement of Action Is Key Time in Measuring Jurisdiction, quoted in 28 U.S.C. § 1391 (1993).
As the commentary to 28 U.S.C. § 1391(a)(2) discusses:
The new language accepts venue in a district in which "a substantial part" of the activities (out of which the claim arose) took place, and there may be several districts that qualify as a situs of such "substantial" activities.
The fact that substantial activities took place in district B [e.g. Texas] does not disqualify district A [e.g. Louisiana] as proper venue as long as "substantial" activities took place in A, too. Indeed, District A should not be disqualified even if it is shown that the activities in B were more substantial, or even the most substantial. Any other approach would restore the pinpointing problem that created the difficulties under the now discarded "claim arose" standard. If the selected district's contacts are "substantial", it should make no difference that another's are more so, or the most so.
David D. Siegel, Commentary on the 1988 and 1990 Revisions of Section 1391, Subdivision (a), Clause (2), quoted in 28 U.S.C. § 1391 (1993).
See also, TIG Ins. Co. v. NAFCO Ins. Co., Ltd., 177 F.Supp.2d 561, 567 (N.D. Tx. 2001) (in a diversity case alleging breach of reinsurance contracts, venue proper in district where contract were negotiated and issued, and where a significant amount of remediation efforts took place); TruServ Corp. v. Neff, 6 F.Supp.2d (N.D. Ill. 1998) (venue in Illinois was proper for suit to enforce guaranties which were negotiated and executed in Pennsylvania and which required payment be made in Illinois since alleged failure to perform a contractual duty in Illinois gave rise to the breach of contract claim, even though guarantors' activities in Pennsylvania might have been more significant); Figgie Inter'l, Inc. v. Destileria Serralles, Inc., 925 F.Supp. 411 (D.S.C. 1996) (venue in a breach of contract case between a South Carolina based manufacturer and seller of bottle labeling equipment against buyer, a Puerto Rican based rum bottler, was proper in South Carolina, where considerable correspondence and invoices were either sent or received, and Plaintiff's base of operations for the negotiation of the contract and for the coordination of the engineering, manufacturing, and shipping of the bottling equipment took place in South Carolina); Latex Chem. Corp. v. Phoenix Med. Tech., Inc., 765 F.Supp. 1246, 1250-51 (W.D.N.C.) (venue proper in North Carolina district where Defendant Buyer entered into an agreement with Plaintiff Seller whereby chemicals would be shipped from North Carolina to South Carolina, Defendant Buyer's failure to pay for goods had obvious impact on North Carolina district and led to cause of action accruing there).
Finally, Tex Mex moves the court to transfer this case to the Southern District of Texas, Laredo Division, under 28 U.S.C. 1406(a), which provides:
The district court of a district in which is filed a case laying venue in the wrong division or district shall dismiss, or if it be in the interest of justice, transfer such case to any district or division in which it could have been brought.28 U.S.C. § 1406(a) (italics added).
However, because venue is proper in the Eastern District of Louisiana, there is no basis to transfer this case under § 1406(a). Further, even if Tex Mex had moved for a transfer of venue under 28 U.S.C. § 1404(a), which allows the court to transfer a case "[f]or the convenience of parties and witnesses, in the interest of justice, . . . to any other district or division where it might have been brought," the court finds that, under the circumstances presented here, Tex Mex has failed to carry its burden of showing that the balance of factors (such as convenience of parties and witnesses, locus of operative facts and relative ease of access to sources of proof, availability of process to compel the attendance of material witnesses, cost of obtaining the presence of witnesses, the desirability of having the case tried by a forum familiar with the substantive law to be applied, and Plaintiff's choice of forum) favors such a transfer. Indeed, the only practical effect of a transfer to the Southern District of Texas, Laredo Division, would be the shifting of inconvenience from Defendant to Plaintiff.
Such private and public interest factors were identified by Gulf Oil Corp. Gilbert, 330 U.S. 501, 67 S.Ct. 839, 91 L.Ed.2d 1055 (1947), in applying the doctrine of forum non conveniens.
Accordingly;
IT IS ORDERED that the "FRCP 12(b) Motions to Dismiss for Lack of Personal Jurisdiction and for Improper Venue" filed by Defendant, the Texas Mexican Railway Company, be and are hereby DENIED.