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noting that the movant must specifically identify the witnesses and outline their testimony
Summary of this case from Holmes v. Warrior Gulf Navigation CompanyOpinion
Civil Action No. H-02-0293
May 30, 2002
MEMORANDUM AND OPINION
Plaintiffs, S J Diving, Inc. and Deep Sea Champion, Inc., Texas corporations, sued Doo-Pie, Inc., a Louisiana corporation, in Texas state court. Plaintiffs asserted numerous causes of action relating to an oral agreement for the sale and installation of equipment on plaintiffs' ship. Doo-Pie removed on the basis of diversity jurisdiction and moved to dismiss, for lack of personal jurisdiction, or to transfer to the federal district court for the Western District of Louisiana, LaFayette/Oppalousas Division. Plaintiffs purchased winches from Doo-Pie that Doo-Pie installed on plaintiffs' ship, in Louisiana. Doo-Pie asserts that there is an insufficient basis for personal jurisdiction and, in the alternative, that if jurisdiction is proper, the case should be transferred to Louisiana where the equipment was purchased and installed, under 42 U.S.C. § 1404(a). Plaintiffs contend that Doo-Pie made representations about the winches through telephone calls, faxes, and emails that were sent to Texas, on which plaintiffs relied in Texas, providing a basis for personal jurisdiction in Texas.
Based on the pleadings, the motion and response, the parties' submissions, and the applicable law, this court DENIES the motion to dismiss and DENIES the motion to transfer. The reasons are set out below.
I. Background
S J Diving, Inc. and Deep Sea Champion, Inc. are Texas corporations with their principal place of business in Harris County, Texas. Deep Sea Champion owns the MN DEEP SEA CHAMPION, which has its home port in Houston, Texas. Doo-Pie is a Louisiana corporation with its only office in Monroe, Louisiana. In November 2000 to January 2001, Doo-Pie and plaintiffs communicated by telephone, fax, and email between Doo-Pie's office in Louisiana and plaintiffs' office in Texas. The subject of these communications was plaintiffs' proposed purchase of a four-point mooring system to be installed on the M/V DEEP SEA CHAMPION. In January 2001, S J Diving, Deep Sea Champion, and Doo-Pie entered into an oral agreement for Doo-Pie to install the winch system on the vessel. The goods were delivered, and the work accomplished, in Louisiana. Plaintiffs sent a representative of S J Diving to Louisiana to supervise Doo-Pie's work on the ship.
In this lawsuit, initially filed in Texas state court and removed to this court on the basis of diversity of citizenship, plaintiffs allege that the work done by Doo-Pie, and the materials provided by Doo-Pie, were flawed in material respects. Plaintiffs allege that Doo-Pie removed certain winches from the vessel, constituting conversion, loss, or destruction for which Doo-Pie should be responsible. Plaintiffs also allege that Doo-Pie was three months late in performing under the parties' contract, despite the parties' agreement that time was of the essence. Plaintiffs assert causes of action for breach of warranty, misrepresentation, unconscionability, fraud, and negligence, under common law and the Texas Deceptive Trade Practices Act, TEX. BUS COMM. CODE § 17.46 et seq.
It is undisputed that Doo-Pie has no office in Texas; has no agent or representative in Texas; does not advertise in Texas; and has no property or bank account in Texas. Doo-Pie has three employees, all in Louisiana. Doo-Pie provided the goods and services in Louisiana, where the winches were manufactured and installed on the vessel. The threshold issue is whether the communications between Doo-Pie and plaintiffs before the contract was entered provides a basis for jurisdiction over Doo-Pie in Texas. If so, the issue is whether venue should be maintained in Texas.
II. The Issue of Jurisdiction
A. The Legal Standard
A federal court sitting in diversity may exercise personal jurisdiction over a nonresident defendant if: (1) the long-arm statute of the forum state confers personal jurisdiction over that defendant; and (2) the exercise of such jurisdiction by the forum state is consistent with due process under the United States Constitution. See Latshaw v. H.E. Johnston, 167 F.3d 208, 211 (5th Cir. 1999). Texas's long-arm statute has been interpreted to extend to the limits of due process. The question is whether subjecting defendants to suit in Texas would be consistent with the Due Process Clause of the Fourteenth Amendment. See Electrosource, Inc. v. Horizon Battery Technologies, Ltd., 176 F.3d 867, 871 (5th Cir. 1999) (citing Schlobohm v. Schapiro, 784 S.W.2d 355, 357 (Tex. 1990)).
The Due Process Clause of the Fourteenth Amendment permits the exercise of personal jurisdiction over a nonresident defendant when that defendant has purposefully availed himself of the benefits and protections of the forum state by establishing "minimum contacts" with the forum state, and the exercise of jurisdiction over that defendant does not offend "traditional notions of fair play and substantial justice." Latshaw, 167 F.3d at 211 (quoting International Shoe Co. v. State of Washington, 326 U.S. 310, 316 (1945)).
The "minimum contacts" aspect of the analysis can be established through "contacts that give rise to "specific' personal jurisdiction or those that give rise to `general' personal jurisdiction." Wilson v. Belin, 20 F.3d 644, 647 (5th Cir. 1994). Specific jurisdiction exists when the nonresident defendant's contacts with the forum state arise from, or are directly related to, the cause of action. See id. (citing Helicopteros Nacionales de Columbia, S.A. v. Hall, 466 U.S. 408, 414 n. 8 (1984)). General jurisdiction exists when a defendant's contacts with the forum state are unrelated to the cause of action but are "continuous and systematic." See id. (citing Helicopteros, 466 U.S. at 414 n. 9).
When a nonresident defendant challenges personal jurisdiction, the plaintiff bears the burden of demonstrating facts sufficient to support jurisdiction. Stuart v. Spademan, 772 F.2d 1185, 1192 (5th Cir. 1985) (citations omitted). "The court may determine the jurisdictional issue by receiving affidavits, interrogatories, depositions, oral testimony, or any combination of the recognized methods of discovery." Id. The plaintiff "need only present a prima facie case for personal jurisdiction; proof by a preponderance of the evidence is not required." D.J. Investments, Inc. v. Metzeler Motorcycle Tire Agent Gregg, Inc., 754 F.2d 542, 545 (5th Cir. 1985), quoted in WNS, Inc. v. Farrow, 884 F.2d 200, 203 (5th Cir. 1989). "[O]n a motion to dismiss for lack of jurisdiction, uncontroverted allegations in the plaintiffs complaint must be taken as true, and conflicts between the facts contained in the parties' affidavits must be resolved in the plaintiffs favor. . . ." D.J. Investments, 754 F.2d at 546, quoted in Bullion v. Gilllespie, 895 F.2d 213, 217 (5th Cir. 1990).
A court exercises specific jurisdiction" over a defendant if the cause of action alleged arises out of or is related to the defendant's contacts with the forum. Helicopteros, 466 U.S. at 414 n. 8. In order to exercise specific jurisdiction, a court must "examine the relationship among the defendant, the forum, and the litigation to determine whether maintaining the suit offends traditional notions of fair play and substantial justice." Southmark Corp. v. Life Investors, Inc., 851 F.2d 763, 772 (5th Cir. 1988) (citations omitted). There must be a sufficient nexus between the nonresident defendant's contacts with the forum and the cause of action. Rittenhouse v. Mabry, 832 F.2d 1380, 1390 (5th Cir. 1987). Specific jurisdiction is limited to adjudication of the particular controversy that arises out of or is related to the defendant's contacts with the forum. Petroleum Helicopters, Inc. v. Avco Corp., 804 F.2d 1367, 1370 (5th Cir. 1986). Even a single contact can support specific jurisdiction if the defendant "purposefully avails itself of the privilege of conducting activities within the forum state, thus invoking the benefits and protections of its laws." Burger King Corp. v. Rudzewicz, 471 U.S. 462, 475 (1985). "The non-resident's `purposeful availment' must be such that the defendant "should reasonably anticipate being haled into court' in the forum state." Ruston Gas Turbines, Inc. v. Donaldson Co., Inc., 9 F.3d 415, 419 (5th Cir. 1993) (citing World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 297 (1980)).
B. Analysis
The record in this case discloses that there is no basis for asserting general jurisdiction over Doo-Pie in this case. Doo-Pie lacks the continuous and systematic presence in Texas necessary for general jurisdiction. See Alpine View Co., Ltd. v. Atlas Copco AB, 205 F.3d 208, 217 (5th Cir. 2000) (describing substantial, systematic, and continuous presence required for general jurisdiction). The issue is whether the exercise of specific jurisdiction over Doo-Pie by a Texas court is proper. Plaintiffs assert that the emails, faxes, and telephone calls from Doo-Pie in Louisiana to plaintiffs in Texas, relating to the agreement to provide and install the winches made the basis of this suit, are a sufficient basis for jurisdiction. Plaintiffs have asserted and submitted evidence of communications between the parties, including communications that Doo-Pie initiated. Plaintiffs assert that during these communications, Doo-Pie made material misrepresentations about the condition of the winches and Doo-Pie's ability to perform the work in a timely manner. For the purpose of this motion, this court must assume the facts that plaintiffs assert in their affidavits and supporting documents to be true. See D.J. Investments, 754 F.2d at 546; see also Stripling v. Jordan Production Co., 234 F.3d 863, 869 (5th Cir. 2000).
Plaintiffs' claims for fraud and misrepresentation arise in part out of the communications Doo-Pie directed to plaintiffs in Texas. The claims plaintiffs assert as to the quality and timeliness in delivery arise directly from that contract. The contacts between the plaintiffs and Doo-Pie relating to the parties' agreement cannot "be viewed as `random,' `forfuitous,' or `attenuated.'" Burger King, 471 U.S. at 480; Lewis v. Fresne, 252 F.3d 352, 358-59 (5th Cir. 2001) (one telephone call with plaintiff in Texas and one contract sent to Texas, both containing material misrepresentations forming basis of cause of action, sufficient to establish minimum contacts); Mem'l Hosp. Sys. v. Fisher Ins. Agency, Inc., 835 S.W.2d 645, 648-51 (Tex.App.-Houston [14th Dist.] 1992, no writ) (one telephone call in which defendant made fraudulent statements to plaintiff in Texas, forming basis of cause of action, sufficient to establish minimum contacts); cf. Wilson, 20 F.3d at 649 (receipt of single unsolicited telephone call from forum state insufficient for specific jurisdiction). Plaintiffs have established that Doo-Pie has sufficient contacts with Texas to make the exercise of specific personal jurisdiction proper. See McGee, 355 U.S. at 223; Lewis, 252 F.3d at 358-59.
Because this court finds that Doo-Pie has sufficient "minimum contacts" with Texas, this court must address whether the exercise of personal jurisdiction in this case would offend the traditional notions of fair play and substantial justice. In Electrosource, Inc. v. Horizon Battery Techs., Ltd., 176 F.3d 867, 874 (5th Cir. 1999), the court listed the factors considered in the fairness analysis: "(1) the burden on the nonresident defendant; (2) the interests of the forum state; (3) the plaintiffs interest in securing relief; (4) `the interstate judicial system's interest in obtaining the most efficient resolution of controversies'; and (5) `the shared interest of the several States in furthering fundamental substantive social policies.'" (quoting Wilson, 20 F.3d at 647).
The burden on Doo-Pie of litigating in Texas may be greater than litigating in Louisiana. However, Doo-Pie purposely negotiated and entered into a contract with Texas residents. Both Texas and Louisiana have an interest in this suit. Doo-Pie communicated the alleged misrepresentations made the basis of this suit to plaintiffs in Texas and performed the work at issue on a ship that has its homeport in Texas. The contract negotiations occurred between a party in Texas and a party in Louisiana, making it reasonably foreseeable that a lawsuit arising from the content of those negotiations could proceed in Texas or in Louisiana. Traditional notions of fair play and substantial justice are not offended by the exercise of in personam jurisdiction over Doo-Pie by a Texas court.
III. The Issue of Venue
A. The Legal Standards
Doo-Pie has alternatively moved to transfer this case under 28 U.S.C. § 1404 (a). Section 1404(a) provides: "For 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." The purpose of this statute is to protect litigants, witnesses, and the public against unnecessary inconvenience and expense, and to avoid wasted time, energy, and money. See Van Dusen v. Barrack, 376 U.S. 612. 616 (1964); Houston Trial Reports, Inc. v. LRP Publications, Inc., 85 F. Supp.2d 663, 667 (S.D. Tex. 1999).
The decision to transfer a pending case is committed to the sound discretion of the district court. See Jarvis Christian College v. Exxon Corp., 845 F.2d 523, 528 (5th Cir. 1988); Robertson v. M/V Cape Hunter, 979 F. Supp. 1105, 1106 (S.D. Tex. 1997). The party moving for a change of venue bears the burden of demonstrating why the forum should be changed. See Peteet v. Dow Chem. Co., 868 F.2d 1428, 1436 (5th Cir. 1989); Dearing v. Sigma Chem. Co., 1 F. Supp.2d 660, 664 (S.D. Tex. 1998). "Unless the balance of factors strongly favors the moving party, the Plaintiffs choice of forum generally should not be disturbed." Henderson v. AT T Corp., 918 F. Supp. 1059, 1065 (S.D. Tex. 1996).
Section 1404(a) permits transfer of venue "[f]or the convenience of parties and witnesses, and in the interest of justice." The district court adjudicates motions to transfer through "individualized, case-by-case consideration[s] of convenience and fairness." Van Dusen, 376 U.S. at 622. "A motion to transfer thus calls on the district court to weigh in the balance a number of case-specific factors." Stewart Org., Inc. v. Ricoh Corp., 487 U.S. 22, 29 (1988); see also Hogan v. Malone Lumber, Inc., 800 F. Supp. 1441, 1443 (E.D. Tex. 1992); Frazier v. Commercial Credit Equip. Corp., 755 F. Supp. 163, 166 (S.D. Miss 1991); Fletcher v. Southern Pacific Transp. Co., 648 F. Supp. 1400, 1401 (E.D. Tex. 1986).
Both private and public interest factors influence the court's transfer determination. Private interest factors involve the preferences and conveniences of the parties and witnesses in the case. These factors include: (1) the availability and convenience of witnesses and parties; (2) the cost of obtaining the attendance of witnesses and other trial expenses; (3) the location of books and records; (4) the place of the alleged wrong; (5) the plaintiffs choice of forum; (6) the possibility of delay and prejudice if transfer is granted; and (7) the location of counsel. See Houston Trial Reports, 85 F. Supp. at 668; Lebouef v. Gulf Operators, Inc., 20 F. Supp.2d 1057, 1059 (S.D. Tex. 1998). The public interest factors address broader objectives, such as the fair and efficient administration of the judicial system. See, e.g., Jumara v. State Farm Ins. Co., 55 F.3d 873, 879-80 (3d Cir. 1995). The court must determine whether the balance of the public and private interest factors "strongly outweighs the plaintiffs choice of forum" such that transfer is appropriate. Henderson, 918 F. Supp. at 1068.
B. Threshold Considerations
A transfer of venue is appropriate only if the transferring court is a proper venue for the action and if the case is transferred to a venue in which the suit could originally have been brought. See 28 U.S.C. § 1404. In this case, both the present venue and the proposed transferee court are appropriate venues. This suit may proceed in either the Southern District of Texas or the Western District of Louisiana.
C. Private Interest Factors
1. The Availability, Convenience, and Cost of Obtaining Witnesses
This factor "is arguably the most important of the factors listed." Lebouef, 20 F. Supp.2d at 1060; see also Henderson, 918 F. Supp. at 1066; Dupre, 810 F. Supp. at 825; Quicksilver, Inc. v. Academy Corp., 1998 WL 874929, at *2 (N.D. Tex. 1998). "The convenience of one key witness may outweigh the convenience of numerous less important witnesses." Lebouef, 20 F. Supp.2d at 1060. "[T]he moving party must offer more than mere allegations that certain key witnesses are not available or are inconveniently located. Instead, the movant must specifically identify the key witnesses and outline their testimony." Id. (citation omitted).
The primary focus of this inquiry is to ensure the availability of the identified witnesses to testify at trial. Id. at 1060. The analysis favors a forum in which the parties will be able to compel the key witnesses to testify. 17 JAMES WM. MOORE ET AL., MOORE'S FEDERAL PRACTICE § 111.13[1][g] (3d ed. 1999). When the "key witnesses are . . . employees of the party seeking transfer, their convenience is entitled to less weight because that party will be able to compel their testimony at trial." Continental Airlines, Inc. v. American Airlines, Inc., 805 F. Supp. 1392, 1397 (S.D. Tex. 1992); see Lebouef, 20 F. Supp.2d at 1060 ("[W]here these anticipated witnesses are employees of the party seeking transfer, the sympathy of this Court is forfeited."); cf. Quicksilver, Inc., 1998 WL 874929 at *2 ("[T]he availability and convenience of party-witnesses is generally insignificant because a transfer based on this factor would only shift the inconvenience from movant to non-movant."). The availability and convenience of nonparty witnesses, rather than that of party and expert witnesses, is accorded the greatest weight in a transfer of venue analysis. See State Street Capital Corp. v. Dente, 855 F. Supp. 192, 198 (S.D. Tex. 1994).
Both plaintiffs and defendant have identified key party witnesses located in both Texas and Louisiana. Both plaintiffs and defendant have also identified nonparty witnesses located in Texas and in Louisiana, who are expected to testify about the condition of the winches, their installation, the problems with the winches, the repairs undertaken, and the losses alleged to have resulted. The presence of key party and nonparty witnesses located in both Texas and Louisiana weighs in favor of retaining venue in this district.
2. The Location of the Books and Records
The books and records of plaintiffs are in Houston, Texas. The books and records of Doo-Pie are in Louisiana. This factor favors retaining venue in this district.
3. The Place of the Alleged Wrong
The place of the alleged wrong is a significant factor in the transfer analysis. See Robertson, 979 F. Supp. at 1108; Henderson, 918 F. Supp. at 1067; Dupre, 810 F. Supp. at 827. In this case, plaintiffs allege that the place of the alleged wrong is Texas, where the misrepresentations were received; Doo-Pie alleges that the place of the alleged wrong is Louisiana, where all the work relating to the contract was performed. Although a portion of the dispute centers around alleged misrepresentations made to plaintiffs in Texas, the vast majority of the dispute centers around the work performed in Louisiana. This factor weighs in favor of transfer to Louisiana.
4. Other Factors
"When considering a § 1404(a) motion to transfer, `[a] prompt trial . . . is not without relevance to the convenience of parties and witnesses and the interest of justice.'" Dupre, 810 F. Supp. at 827 (quoting Fannin v. Jones, 229 F.2d 368, 369-70 (6th Cir. 1956)) (alterations in original). The parties have not shown that delay or prejudice would result if this court granted the motion to transfer venue or retained venue. The location of counsel "is entitled to the least consideration of the factors relevant to a transfer motion." Henderson, 918 F. Supp. at 1066; see also Dupre, 810 F. Supp. at 826. Both parties have retained counsel in Houston, Texas. Neither of these factors weighs in favor of transfer.
The plaintiffs choice of forum is normally given deference, especially when the forum is the plaintiffs "home." See Dearing, 1 F. Supp.2d at 665; Robertson, 979 F. Supp. at 1108-09; Henderson, 918 F. Supp. 1067-68; Dupre, 810 F. Supp. at 828; United Sonics, Inc. v. Schock, 661 F. Supp. 681, 683 (W.D. Tex. 1986). This choice is rarely disturbed unless the other factors weigh strongly in favor of transferring the case. See Henderson, 918 F. Supp. at 1068.
Although important, the plaintiffs choice of venue is not dispositive. See, e.g., Martin v. South Carolina Bank, 811 F. Supp. 679, 686 (M.D. Ga. 1992); Howell v. Tanner, 650 F.2d 610, 615 (5th Cir. 1981); First Federal Sav. Loan Ass'n v. Berger, 672 F. Supp. 1454, 1456 (M.D. Ga. 1987). A court may transfer venue even from a plaintiffs home after weighing all of the factors if the other factors strongly outweigh the plaintiffs choice of venue.
In this case, the other factors, such as the location of key party and nonparty witnesses and the place of the alleged wrong, do not outweigh the deference entitled to plaintiffs' choice of forum. The private interest factors weigh in favor of retaining this case in Texas.
D. Public Interest Factors
The public interest factors relevant to the section 1404(a) analysis concern the societal interest in the fair and efficient administration of justice. This factor favors transfer of venue to enable different cases involving the same parties or issues to be heard in a single forum. See Continental Grain Co., 364 U.S. at 26. In this case, where there is one lawsuit, at an early stage, that could be heard in either district, the conservation of resources does not tip the balance in either direction.
IV. Conclusion
This court concludes that it has jurisdiction over Doo-Pie and that to transfer venue would merely shift inconvenience from one side to the other. The motion to dismiss or to transfer is DENIED.