Opinion
CIVIL ACTION NO. 21-1151
2022-07-27
Romy THOMPSON v. Sheldon THOMPSON, et al.
Edward John Rantz, Jr., Middleberg Riddle Group, New Orleans, LA, Erin Rebekka Wedge Latuso, Elizabeth Riddell Penn, Forman Watkins & Krutz LLP, New Orleans, LA, for Romy Thompson. David Greenberg, Adrian Frank LaPeyronnie, III, Greenberg & LaPeyronnie, LLC, Gretna, LA, for Sheldon Thompson, et al.
Edward John Rantz, Jr., Middleberg Riddle Group, New Orleans, LA, Erin Rebekka Wedge Latuso, Elizabeth Riddell Penn, Forman Watkins & Krutz LLP, New Orleans, LA, for Romy Thompson.
David Greenberg, Adrian Frank LaPeyronnie, III, Greenberg & LaPeyronnie, LLC, Gretna, LA, for Sheldon Thompson, et al.
SECTION M (5)
ORDER & REASONS
BARRY W. ASHE, UNITED STATES DISTRICT JUDGE
Before the Court is a motion by defendants Sheldon Thompson, Marie-Merced Thompson, and Skye Thompson (collectively, "Defendants") to transfer to a more convenient forum pursuant to 28 U.S.C. § 1404(a) and to dismiss plaintiff's request to enjoin a state-court eviction proceeding due to a violation of the Anti-Injunction Act, 28 U.S.C. § 2283. Plaintiff Romy Thompson ("Plaintiff") responds in opposition, and Defendants reply in further support of their motion. Having considered the parties’ memoranda, the record, and the applicable law, the Court grants the motion.
R. Doc. 20.
R. Doc. 22.
R. Doc. 24.
I. BACKGROUND
This case involves a property dispute between family members who run a business together. Plaintiff, a Louisiana citizen, and her brother Skye, a California citizen, jointly own Romy-Skye Properties, which, in turn, owns five properties in North Dakota and eleven houses and the common area of a condominium complex in Mississippi. Plaintiff's parents, Sheldon and Marie-Merced, who are both California citizens, manage the properties for their children. Plaintiff filed this action against her parents and brother alleging that her parents improperly withheld profits generated by Romy-Skye Properties. She seeks an accounting for the properties and a money judgment representing their diminution in value and lost profits due to her parents’ alleged breach of fiduciary duty.
R. Doc. 1 at 1-2.
Id.
Id. at 2, 9-12.
Id. at 2, 9-12.
Plaintiff also seeks a declaratory judgment that she has an ownership interest in a property located on Dante Street in New Orleans, and she requests an injunction to stop an eviction proceeding filed against her by the record owners of the Dante Street property, Sheldon and Skye, that is pending in the First City Court for the Parish of Orleans, State of Louisiana. According to Plaintiff, she had prior oral agreements with Sheldon and Skye that give her ownership rights in the property because it was purchased from a sheriff's sale at least in part with profits generated by Romy-Skye Properties.
Id. at 2, 6-9, 12-15.
Id. at 6.
II. PENDING MOTION
Defendants filed the instant motion to dismiss Plaintiff's injunction request as barred by the Anti-Injunction Act. They argue that, because this case does not fit within one of the Act's narrow exceptions, this Court cannot interfere with the state-court proceedings and Plaintiff's request for an injunction must be dismissed. Defendants also seek a transfer of this case to the United States District Court for the Eastern District of California, Sacramento Division, pursuant to § 1404(a), arguing that such venue is a more convenient forum as Defendants are all citizens of California and all of the witnesses with information regarding the formation, management, and accounting of Romy-Skye Properties (other than Plaintiff) are located in California.
R. Doc. 20-2 at 8-12.
Id.
Id. at 2-8.
In opposition, Plaintiff argues that enjoining the eviction proceeding is necessary to preserve her ownership defense. Plaintiff also maintains that the case should not be transferred because Defendants failed to name the California witnesses, Louisiana has a greater interest than California in these proceedings since the Dante Street property is situated in Louisiana, and Louisiana law will apply to her claim of ownership in the Dante Street property. She argues that Sheldon and Skye are connected to this Louisiana forum through their alleged ownership of the Dante Street property. Plaintiff adds that Skye has instituted a suit against her in Mississippi state court so travel to Louisiana cannot be inconvenient for him.
R. Doc. 22 at 6-8.
Id. at 3-6.
Id.
Id.
Defendants reply specifically naming each California witness they anticipate will have information relevant to Romy-Skye Properties. According to Defendants, there are a total of eleven witnesses (including themselves) who reside in California, and Plaintiff has a second home in Reno, Nevada, rendering the Eastern District of California a more convenient forum for all the parties and witnesses. Defendants insist further that Skye's action against Plaintiff in Mississippi is irrelevant to the question of venue so it should be disregarded in making a determination about transfer. As to the motion to dismiss the injunction request, Defendants argue that Plaintiff has a remedy in state court for the objection she raises – namely, she can seek to have the eviction proceeding (including any ownership claim) transferred from the city court to a Louisiana district court, which would be a court of competent jurisdiction for resolving her ownership claim.
R. Doc. 24 at 2-3.
Id. at 3-4.
Id. at 4.
Id. at 5-6.
III. LAW & ANALYSIS
A. Anti-Injunction Act
The Anti-Injunction Act prohibits a federal court from enjoining state-court proceedings. 28 U.S.C. § 2283. There are only three exceptions to this prohibition: an injunction may issue if (1) it has been "expressly authorized" by Congress, (2) it is "necessary in aid of" the federal court's jurisdiction, or (3) it serves to "protect or effectuate" the federal court's judgments. Id. These exceptions " ‘are narrow and not to be enlarged by loose statutory construction,’ " and " ‘any doubt as to the propriety of a federal injunction against state court proceedings should be resolved in favor of permitting the state courts to proceed.’ " Smith v. Bayer Corp. , 564 U.S. 299, 306, 131 S.Ct. 2368, 180 L.Ed.2d 341 (2011) (first quoting Chick Kam Choo v. Exxon Corp. , 486 U.S. 140, 146, 108 S.Ct. 1684, 100 L.Ed.2d 127 (1988), and then Atl. Coast Line R. Co. v. Locomotive Eng'rs , 398 U.S. 281, 297, 90 S.Ct. 1739, 26 L.Ed.2d 234 (1970) ).
The first and third exceptions are not applicable in this case: no party claims that a federal statute authorizes an injunction for the circumstances presented in this case, and the Court has issued no judgments sought to be relitigated and thus in need of protection or effectuation. "The second exception applies only when a case is removed from state to federal court, or when the federal court acquires jurisdiction over a case involving the disposition of real property." Ports Am. Gulfport, Inc. v. Johnson , 2022 WL 742440, at *2 (E.D. La. Mar. 11, 2022) (citing ERWIN CHEMERINSKY , FEDERAL JURISDICTION § 11.2.3 (8th ed. 2021)).
Plaintiff invoked this Court's diversity subject-matter jurisdiction under 28 U.S.C. § 1332 to assert in personam claims against her parents and brother. This suit involves no in rem claim directed against property over which this Court acquired jurisdiction. See In re Am. Boat Co. , 2018 WL 1635654, at *3 (M.D. La. Apr. 5, 2018) ("The Fifth Circuit has found that this exception applies to in rem rather than in personam proceedings generally.") (citing Carter v. Ogden Corp. , 524 F.2d 74, 76 (5th Cir. 1975) ). The rationale for applying the second exception in this way is that a state court should not be permitted to meddle with property that is the basis for a federal court's in rem jurisdiction and so in its custody. See 17A CHARLES ALAN WRIGHT , ARTHUR R. MILLER , EDWARD H. COOPER & VIKRAM DAVID AMAR , FEDERAL PRACTICE AND PROCEDURE § 4225 (3d ed. 2022). This usually requires that the federal action be the first-filed, such that the federal court already has custody over the res by the time the state proceeding begins. Id. Here, the state eviction proceeding was filed first, ahead of this federal lawsuit in which jurisdiction is not in rem in any event. Thus, the second exception does not apply, and this Court cannot enjoin the state-court eviction action. See Lafitte Econ. Dev. Corp. v. Cisneros , 1994 WL 665773, at *1 (E.D. La. Nov. 29, 1994) (holding that the Anti-Injunction Act prohibited the court from enjoining an ongoing state-court eviction action); Green v. Bank of Am. N.A. , 2013 WL 2417916, at *1 (S.D. Tex. June 4, 2013) (denying a temporary restraining order to halt an eviction brought in state court because the Anti-Injunction Act prevents federal courts from interfering with state-court proceedings) (citing Knoles v. Wells Fargo Bank, N.A. , 513 F. App'x 414 (5th Cir. 2013) ). Accordingly, Plaintiff's request for an injunction, as alleged in Count III of the complaint, must be dismissed.
In addition to the injunction, Plaintiff seeks a declaration of her ownership rights in the Dante Street property, which, of course, would alter the outcome of the eviction proceeding were she to prevail and such declaration enforced by the city court. R. Doc. 1 at 3-9. In doing so, Plaintiff essentially transforms her ownership defense to the eviction proceeding into an affirmative claim to resolve the question of ownership. "The Fifth Circuit has decided that when a state lawsuit is pending, more often than not, issuing a declaratory judgment will be tantamount to issuing an injunction – providing the declaratory plaintiff an end run around the requirements of the Anti-Injunction Act." Travelers Ins. Co. v. La. Farm Bureau Fed'n, Inc. , 996 F.2d 774, 776 (5th Cir. 1993). Although Defendants did not move to dismiss the declaratory judgment action, the Court notes that in the light of this authority Plaintiff's declaratory judgment action – which seeks an answer to the issue of ownership, a presumed predicate for an eviction action – is likely barred by the Act.
Plaintiff insists that she filed for federal declaratory relief because the city court, where the eviction is pending, is without jurisdiction to address her claim of ownership. Even if true, Plaintiff is not without recourse in state court. See La. Code Civ. P. art. 4845(A)(2) (authorizing transfer of an action over which the city court does not have jurisdiction to a Louisiana court of proper jurisdiction).
B. Transfer
Section 1404(a) provides that "[f]or the convenience of parties and witnesses, in the interest of justice, a district court may transfer any civil action to any other district or division where it might have been brought." 28 U.S.C. § 1404(a). A defendant seeking transfer must show "good cause," meaning the defendant "must satisfy the statutory requirements and clearly demonstrate that a transfer is ‘for the convenience of parties and witnesses, in the interest of justice.’ " In re Volkswagen of Am., Inc. , 545 F.3d 304, 315 (5th Cir. 2008). "Thus, when the transferee venue is not clearly more convenient than the venue chosen by the plaintiff, the plaintiff's choice should be respected." Id.
Courts apply the private and public interest factors originally set out in Gulf Oil Corp. v. Gilbert , 330 U.S. 501, 67 S.Ct. 839, 91 L.Ed. 1055 (1947), when evaluating whether another district could be clearly more convenient. In re Volkswagen , 545 F.3d at 315. "The private interest factors are: (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." Id. (quotation omitted). "The public interest factors are: (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 or in the application of foreign law." Id. (quotation and alteration omitted). These factors are not necessarily exhaustive or exclusive and none has dispositive weight. Id.
Here, the Eastern District of California constitutes a district where this diversity action might have been brought, and the balance of the factors demonstrates that it is a "clearly more convenient" venue. All of the private interest factors favor California. The bulk of this case concerns claims related to Romy-Skye Properties, a business formed in and operated from California. As shown by Defendants, all identified witnesses (other than Plaintiff) who have knowledge of the formation and running of that business are located in California. Other than Defendants, these witnesses cannot be compelled to appear in the Eastern District of Louisiana and the cost of attendance for willing witnesses would be high. Rule 45(c)(1) of the Federal Rules of Civil Procedure provides that "[a] subpoena may command a person to attend a trial within 100 miles of where the person resides, is employed, or regularly transacts business in person; or within the state where the person resides, is employed, or regularly transacts business in person, if the person is a party or a party's officer [or] would not incur substantial expense." There is no information before the Court suggesting that any of the California witnesses meet these criteria. Moreover, travel from California to Louisiana would require substantial expense, including airline tickets, hotels, ground transportation, and meals. Although out-of-town witnesses could potentially appear for trial via videoconference, the preference for in-person testimony is especially strong where key factual issues turn on credibility. See, e.g., Iragorri v. Int'l Elevator, Inc. , 203 F.3d 8, 17 (1st Cir. 2000) ("live testimony of key witnesses for the purpose of presenting demeanor evidence is essential to a fair trial") (quotation and alterations omitted); Miller v. Paschall Truck Lines, Inc. , 2020 WL 4192497, at *4 (D.N.M. July 21, 2020) (noting preference for in-person testimony as factor in resolving transfer motion). In addition, these California witnesses will need to rely on documentary evidence that is physically located in California.
These witnesses include California-based attorneys, accountants, and bookkeepers who offered business and tax advice regarding Romy-Skye Properties or who provided services to the business in California. R. Docs. 20-2 at 6, 14; 24 at 2-3.
The public interest factors slightly favor California. The parties do not provide any information regarding the relative congestion of this Court as compared with the Eastern District of California, so the first factor will be deemed neutral. The second factor – having local interests decided at home – favors California. Although Louisiana has an interest in the question of ownership of Louisiana real estate, Plaintiff's declaratory judgment claim is likely barred by the Anti-Injunction Act (as discussed in footnote 21) and, given this Court's refusal to interfere with the pending Louisiana eviction proceeding, she can pursue her ownership claim in that proceeding by seeking a transfer to a Louisiana court of proper jurisdiction should she choose to do so. Hence, California has the stronger interest in the issues more properly litigated in federal court – namely, those related to the accounting and management of a business formed and operated in California. The third factor – familiarity with the governing law – also favors California. While Louisiana law might apply to Plaintiff's claim of ownership regarding the Dante Street property, the laws of California, North Dakota, and Mississippi will likely apply to her predominant claims concerning the accounting and management of Romy-Skye Properties. Finally, the Court will consider the fourth factor – avoiding unnecessary problems of conflict of laws – neutral because the parties provided no information regarding this factor.
Thus, on balance, California is clearly the more convenient (and less expensive) forum due to the availability there of witnesses and sources of proof and California's interest in adjudicating claims related to the accounting and management of a California business and the application of its law to those claims. As such, this case is best transferred to the Eastern District of California, Sacramento Division.
IV. CONCLUSION
Accordingly, for the foregoing reasons,
IT IS ORDERED that Defendants’ motion (R. Doc. 20) is GRANTED.
IT IS FURTHER ORDERED that Plaintiff's request to enjoin the eviction action pending in the First City Court for the Parish of Orleans, State of Louisiana (as alleged in Count III of the complaint) is DISMISSED.
IT IS FURTHER ORDERED that this case be and is hereby TRANSFERRED to the United States District Court for the Eastern District of California, Sacramento Division.