Opinion
No. 1:02-CV-1669-LJM
March 4, 2003
ORDER ON DEFENDANT'S MOTION TO TRANSFER
This cause is now before the Court on a motion to transfer venue pursuant to 28 U.S.C. § 1404(a) filed by the defendant, Dee Engineering, Inc. ("Dee"). Dee argues that transfer under § 1404(a) is appropriate in this case because the Central District of California best serves the convenience of the parties, the convenience of the witnesses and the interests of justice. In contrast, the plaintiffs, Volkswagen Aktiengesellschaft and Volkswagen of America, Inc. (collectively "Volkswagen"), aver that transfer is not appropriate because it would merely transfer the inconvenience from one party to the other and it would not benefit the interests of justice because the Central District of California would be unfamiliar with the Indiana state law issues and that district does not have a time advantage. Furthermore, Volkswagen argues that its choice of forum should be give great weight and is not outweighed by other considerations.
For the foregoing reasons, the Court finds that Dee's motion to transfer should be GRANTED.
I. FACTUAL BACKGROUND
In this suit Volkswagen alleges that Dee infringed its trademarks in violation of federal trademark law. In addition, Volkswagen alleges that Dee is liable to it under the Indiana Crime Victims Act.
In mid to late 1999, a hired private investigation company located in Indiana, Continental Enterprises ("Continental"), brought to Volkswagen's attention that Dee was allegedly using Volkswagen's trademarks. Under the agreement between Volkswagen and Continental, Continental may negotiate settlements, execute releases and initiate legal action on Volkswagen's behalf. Manders Decl. ¶¶ 4, 6. In fact, the agreement is entitled a "Letter of Agency." Id. ¶ 6.
Volkswagen Aktiengesellschaft is a German corporation with its principal place of business in Wolfsburg, Germany. Compl. ¶ 1. Volkswagen of America is a New Jersey corporation with its principal place of business in Auburn Hills, Michigan. Id. ¶ 2.
Dee is a California corporation has its headquarters in Costa Mesa, California, and a manufacturing facility in Ontario, California. Fulton Decl. ¶¶ 3, 5. Its primary business is manufacturing and supplying automobile parts. Id. ¶ 4. Over the past five years, less than one-half of one percent (.5%) of Dee's annual gross sales were made in Indiana. Id. ¶ 6. Volkswagen filed the instant suit on or about October 29, 2002. On or about January 24, 2003, Dee filed the instant motion to transfer pursuant to 28 U.S.C. § 1404(a).
II. STANDARD
Dee asks the Court to transfer this matter to the Central District of California pursuant to 28 U.S.C. § 1404(a). Section 1404(a) provides that "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." Transfer is appropriate under this section where the moving party establishes that (1) venue is proper in the transferor district, (2) venue is proper in the transferee district, and (3) the transfer will serve the convenience of the parties, the convenience of the witnesses, and the interests of justice. See Coffey v. Van Dorn Iron Works, 796 F.2d 217, 219 (7th Cir. 1986); Somers v. Flash Tech. Corp. of Am., No. IP00-455-C-B/S, 2000 WL 1280314, at *1 (S.D.Ind. Aug. 25, 2000).
While the third prong of 28 U.S.C. § 1404(a) directs the Court to consider the convenience of the parties, the convenience of the witnesses, and the interests of justice, it does not dictate the relative weight to be given to each factor. As a result, "the weighing of factors for and against transfer necessarily involves a large degree of subtlety and latitude, and, therefore, is committed to the sound discretion of the trial judge." Coffey, 796 F.2d at 219. As the party seeking transfer, Dee has the burden of demonstrating that transfer is appropriate. See Millennium Prod. Inc. v. Gravity Boarding Co., 127 F. Supp.2d 974, 980 (N.D.Ill. 2000) (citing Coffey, 796 F.2d at 219-20).
III. DISCUSSION
A. VENUE IS PROPER IN BOTH DISTRICTS
Briefly, in order for transfer to be appropriate under 28 U.S.C. § 1404(a), venue must be proper in both the transferor and transferee districts. The parties agree that venue is proper in this district; there is also no dispute that venue is proper in the Central District of California.
B. TRANSFER SERVES THE CONVENIENCE OF THE PARTIES AND WITNESSES AND THE INTERESTS OF JUSTICE ELEMENT OF 1404(a)
In its complaint, Volkswagen avers that it is entitled to damages under the Latham Act and the Indiana Crime Victims Act because Dee produced and/or sold products that have substantially the form of the Volkswagen "Beetle" and other trade dress owned by Volkswagen, and that Dee produced and/or sold other products that bear the "VW" trademark. See Compl. ¶ 13.
Dee does not dispute that it sold products in Indiana to a small number of retailers. Moreover, Dee concedes that Continental communicated with it several times beginning with a letter dated October 9, 2000. Manders Decl. ¶ 4. However, Dee does dispute that its products infringe Volkswagen's intellectual property rights, that it willfully infringed those rights and that Volkswagen has been harmed as a proximate result of Dee's conduct. Therefore, Dee argues that transfer is appropriate because the majority of acts relevant to Volkswagen's intellectual property claim occurred in California, the majority of the key documents are in California and the majority of the key witnesses are in California.
1. Convenience of the Parties Weighs in Favor of Transfer The first consideration under § 1404(a) is the relative convenience to the parties of litigating in the transferor versus the transferee forum. Generally, the plaintiff's choice of forum is entitled to "some weight." Fed. Deposit Ins. Corp. v. Citizens Bank Trust Co., 592 F.2d 364, 368 (7th Cir. 1979).
However, less deference is accorded the plaintiff's forum choice when the plaintiff chooses to litigate outside its home forum. See State Farm Mut. Auto Ins. Co. v. Bussell, 939 F. Supp. 646, 651 (S.D. Ind. 1996); Kendall U.S.A., Inc. v. Cent. Printing Co., 666 F. Supp. 1264, 1268 (N.D.Ind. 1987) (citing Coffey, 796 F.2d at 219); see also Gemological Inst. of Am., Inc. v. Thi-Dai Phan, 145 F. Supp.2d 68, 71 (D.D.C. 2001). In such a case, the defendant's place of residence becomes more important in determining the convenience to the parties. State Farm Mut. Auto. Ins. Co., 939 F. Supp. at 651.
The Court must also consider the relative ability of each party to bear the expense of trial in a particular forum. Id. Here, Volkswagen has chosen Indiana as the forum because its investigative agent, Continental, is based in Indiana and because it asserts that it has filed many of the same type of intellectual property-type actions in this forum. Therefore, Volkswagen asserts that its choice of forum should be accorded great weight. However, it is clear that Volkswagen itself is not a resident of this state. In addition, as Dee points out, the parties will likely find that the locus of information pertinent to the contested issues of this case is in California at Dee's places of business. In other words, the greatest amount of discovery will occur in California, not in Indiana. Moreover, the amount of business Dee does in Indiana is minimal compared with the amount of business it transacts from its locations in California.
With respect to the relative convenience of each party to Indiana versus California, the Court cannot find that Volkswagen is inconvenienced anymore by litigating in California than it would be by litigating in Indiana. The major inconvenience to Volkswagen to litigating in California is for its agent, Continental, which is more relevant to convenience of the witnesses. It is clear, however, that Dee would be more inconvenienced by litigating in Indiana than it would in its home state of California.
Finally, although there is evidence that Dee is not necessarily a small entity, it is clearly smaller than Volkswagen. Therefore, comparing the relative ability of the parties to pay for the inconvenience, the Court finds Volkswagen in a better position to bear the cost of litigating in the California forum. The Court notes that by choosing the Southern District of Indiana for this suit, Volkswagen has evidenced its ability to pay for litigation in a foreign forum.
On balance, the Court finds that the convenience of the parties factor weighs in favor of transfer to the Central District of California because the locus of information pertinent to this suit will be found in California, the defendant's place of business, California, is clearly more convenient for Dee, while Volkswagen has already chosen to litigate outside its home forum, and Volkswagen has the ability to pay the expenses of litigating outside of its home forum more easily than Dee. Therefore, the convenience of the parties factor weighs in favor of transfer to the Central District of California.
2. Convenience of the Witnesses Weights in Favor of Transfer The convenience of the witnesses is often the most significant of the three factors considered under § 1404(a). See Somers, 2000 WL 1280314, at *3; Alliance Gen. Ins. Co. v. Deutsch, Kerrigan, Stiles, L.L.P., No. 99-C-2311, 1999 WL 637205, at *1; Rose v. Franchetti, 713 F. Supp. 1203, 1214 (N.D.Ill. 1989), aff'd, 979 F.2d 81 (7th Cir. 1992). When it addresses this factor, the Court "considers not only the number of witnesses located in the respective districts, but also the nature and quality of their testimony in relationship to the issues of the case." Kretz v. Harsco Corp. BMY Wheeled Vehicles Div., No. S92-353M, 1992 WL 392633, at *3 (N.D.Ind. Sept. 22, 1992) (citing Cent. States Pension Fund v. Brown, 587 F. Supp. 1067, 1070 (N.D.Ill. 1984)).
Volkswagen argues that its key witnesses are located in Indiana because Continental's activities are centered at its principal place of business in Carmel, Indiana. The records that would support their testimony are also located in Indiana. Therefore, it is more convenient for the plaintiff's key witnesses to litigate in Indiana. Further, Volkswagen avers that the inconvenience to Dee's witnesses to travel to Indianapolis would be "de minimus." Pl.'s Br. in Opp'n, at 7. In other words, mere travel to the Indiana forum is not persuasive evidence that venue is more convenient in Dee's home state. Moreover, to the extent that Volkswagen's employees in Michigan will testify, proximity to Indiana versus proximity to California weighs in favor of Indiana. Overall, Volkswagen argues that California is not a "clearly" more convenient forum for the witnesses.
In contrast, Dee argues that the bulk of the witnesses relevant to the intellectual property allegations that form the core of Volkswagen's complaint reside in California. Dee avers that its employees and their testimony will have a larger impact on the contested issues in this case than the Continental witnesses. In addition, not all the California-resident witnesses relevant to the issues raised by Volkswagen's trademark infringement action are employed by Dee; therefore, not all of the California witnesses would be subject to process in the Indiana forum. Moreover, Volkswagen characterizes the inconvenience to Dee's witnesses of traveling to Indiana from California "de minimus" comparing the distance from California to Indiana with cases dealing with transfers that are 100 to 200 miles apart. Dee asserts that this comparison is flawed.
The Court agrees that the relative convenience to Volkswagen's Indiana witnesses compared to that of Dee's California witnesses is balanced. In other words, the inconvenience to one set of witnesses to travel is not strongly outweighed by the inconvenience to the other set of witnesses to travel. However, given the likely contested issues in the case, the testimony of witnesses in California are likely to have somewhat of a greater impact on the outcome of the case. Moreover, as Dee points out, live testimony is favored over deposition testimony at trial. Therefore, because there are at least four witnesses identified by Dee that would not be subject to service in Indiana, transfer to California would avert the potential for testimony by deposition at trial.
In summary, the Court finds that the convenience of witnesses factor weighs in favor of transfer because Dee's witnesses are more likely to provide testimony on the contested issues of the case and transfer could minimize the potential for testimony by deposition at a trial on the merits.
3. The Interests of Justice Factor is Neutral The interests of justice factor of the § 1404(a) analysis relates to the "efficient functioning of the courts, not to the merits of the underlying dispute." Coffey, 796 F.2d at 221. For example, transfer is favored where consolidation is feasible. See id.; see also Ferens v. John Deere Co., 494 U.S. 516, 531 (1990); Spherion Corp. v. Cincinnati Fin. Corp., 183 F. Supp.2d 1052, 1059 (N.D.Ill. 2002). Also considered under this factor is the relative familiarity of the courts in the two forums with the laws at issue in the case. See Van Dusen v. Barrack, 376 U.S. 612 (1964); Mut. of Omaha Ins. Co. v. Dolby, 531 F. Supp. 511, 514 (E.D. Pa. 1982).
Volkswagen argues that the interests of justice favor leaving the case in Indiana. Volkswagen asserts that this forum is more familiar with Volkswagen's litigation of its trademark rights than the Central District of California. Moreover, Indiana's courts are more familiar with Volkswagen's allegations under the Indiana Crime Victims Act than the court in California. In addition, Volkswagen argues that according to court statistics, cases in the Central District of California take one month longer to litigate than those in the Southern District of Indiana. Moreover, the Court should respect Volkswagen's choice of forum.
Dee avers that the interests of justice favor transfer because either court is well-equipped to adjudicate the trademark infringement claims brought by Volkswagen, despite Volkswagen's tendency to file such actions in Indiana. Similarly, because Volkswagen's state law claim depends upon a finding in its favor on the federal trademark infringement claim, and because the Indiana Crime Victims Act has a straightforward application, the Central District of California is equally equipped to adjudicate all of Volkswagen's claims. Moreover, Dee asserts that the one-month difference in median time to trial is insignificant. Finally, Dee argues that its smaller means compared to that of Volkswagen should weigh in favor of transfer.
The Court finds that the interests of justice factor is neutral. The Court is convinced that the Central District of California is equally capable of adjudicating fairly all of Volkswagen's claims as this Court.
Furthermore, the Court finds that a difference of one month in the median time to trial is not statistically significant enough to favor either forum over the other. With respect to the parties' arguments that relate to the fairness of litigating in one forum over the other, the Court has assessed these interests in the other factors of the § 1404(a) analysis and will not reweigh them here.
In summary, the Court finds that the interests of justice factor is neutral. Overall, however, the Court finds that Dee has clearly shown that transfer of this case to the Central District of California would be more convenient for the parties and witnesses.
IV. CONCLUSION
For the foregoing reasons, the Court finds that this case should be transferred to the Central District of California. Accordingly, the Court GRANTS the defendant's motion to transfer pursuant to 28 U.S.C. § 1404(a).