Opinion
Civil Action No. 00-5191 (JBS).
September 27, 2001
Terry M. Henry, Esquire, COZEN AND O'CONNOR, Cherry Hill, New Jersey, Counsel for Plaintiff.
Norman E. Lehrer, Esquire, NORMAN E. LEHRER, P.C., Cherry Hill, New Jersey, Counsel for Defendants.
Wayne D. Porter, Jr., Esquire, RANKIN, HILL, PORTER CLARK, LLP, Cleveland, Ohio, Pro Hac Vice Counsel for Defendants.
OPINION
This matter is before the Court on defendants' motion to transfer this case to the United States District Court for the Northern District of Ohio. Defendant Cleveland Track Material, Inc. ("Cleveland Track") avers that the entire case against both Cleveland Track and Blanchard Steel, Inc. ("Blanchard") should be transferred pursuant to 28 U.S.C. § 1406(a) because plaintiff's Amended Complaint alleges that the two defendants jointly infringed on plaintiff's patent rights, because plaintiff would suffer no prejudice, and because transfer might allow consolidation of this case with the declaratory judgment action filed by defendants in that court. Plaintiff contends that 28 U.S.C. § 1404(a) is the correct transfer statute to be considered and avers that Cleveland Track, the only defendant remaining in this action, has not overcome the presumption of plaintiff's choice of venue and has not met its burden of showing that a transfer would be in the interest of justice.
In an Opinion and Order filed February 9, 2001, this Court dismissed plaintiff's complaint against Blanchard due to lack of personal jurisdiction over that defendant. Because the motion to transfer was filed before this Court determined that it lacked personal jurisdiction over Blanchard, it is necessary to reference Blanchard in this Opinion, although this Opinion decides only whether it is proper to transfer the remaining case against Cleveland Track to the Northern District of Ohio. So far as the Court is aware, plaintiff has not reinstated suit against Blanchard in any other forum.
I. BACKGROUND
The procedural and factual background of this case was discussed by this Court in the Opinion filed February 9, 2001,see CMI-Promex, Inc. v. Cleveland Track Material, Inc. and Blanchard Steel, Inc., No. 00-5191, slip op. at 2-9, (D.N.J. Feb. 9, 2001), and need not be repeated at length herein. Instead, only the procedural background related to the remaining motion to transfer will be discussed.
On January 10, 2001, before defendants' motion to dismiss the complaint for lack of subject matter jurisdiction was ruled upon, defendants filed a motion to transfer the case from this Court to the United States District Court for the Northern District of Ohio. On the same date, plaintiff filed a motion to amend the complaint. That motion to amend was granted on January 25, 2001 and the Amended Verified Complaint was filed on January 30, 2001. On February 7, 2001, defendants responded to the Amended Complaint, incorporating their previously filed motion to dismiss based on a lack of personal jurisdiction and motion to transfer.
On February 9, 2001, this Court issued an Opinion and Order which dismissed the Amended Complaint against Blanchard for lack of personal jurisdiction, but found that there was personal jurisdiction in this Court over Cleveland Track. The Court, in a letter accompanying the Opinion and Order, requested short supplemental briefing addressing the implications of the jurisdiction decision on the pending motion to transfer. Supplemental briefing on the transfer issue was completed by the end of February. On March 2, 2001, defendant Cleveland Track answered plaintiff's Amended Complaint and asserted several affirmative defenses, but no counterclaims.
For the reasons stated herein, defendants' motion to transfer this case to the United States District Court for the Northern District of Ohio will be denied.
II. DISCUSSION
Defendants, who filed the present motion to transfer prior to this Court's decision on defendants' motion to dismiss for lack of personal jurisdiction, argue that transfer to the Northern District of Ohio is proper under 28 U.S.C. § 1406(a) because this Court lacks personal jurisdiction over Blanchard and the case should not proceed, in light of the allegations contained in the Amended Complaint, in this Court against Cleveland Track alone. Plaintiff disagrees that the case should be transferred pursuant to 28 U.S.C. § 1406(a), arguing that venue in this Court is proper against Cleveland Track and therefore any motion to transfer must be evaluated pursuant to 28 U.S.C. § 1404(a). The Court agrees that 28 U.S.C. § 1404(a) is the proper standard under which this motion must be analyzed, because venue is proper in this Court with respect to the only remaining defendant, Cleveland Track.
28 U.S.C. § 1406(a) reads "[t]he 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." This statute governs change of venue motions where venue was improper in the district where is was originally laid.
28 U.S.C. § 1404(a) provides "[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." This statute governs change of venue motions where venue is proper in the district where it was originally laid, but defendants seek transfer to another district where venue is proper.
A. Change of Venue under 28 U.S.C. § 1404(a) 28 U.S.C. § 1404(a) provides that a district court may transfer a case to any other court where it might originally have been brought, so long as the transfer is in the interest of justice and convenient for the parties and witnesses. The purpose of Section 1404(a) is to "avoid the waste of time, energy, and money and, in addition, to safeguard litigants, witnesses and the public against avoidable inconvenience and expense." Liggett Group, Inc. V.R.J. Reynolds Tobacco Co., 102 F. Supp.2d 518, 525-26 (D.N.J. 2000) (citing Lexecon Inc. v. Milberg Weiss Bershad Hynes Lerach, 523 U.S. 26, 33, 118 S. Ct. 956, 140 L.Ed.2d 62 (1998); Jumara v. State Farm Ins., Co., 55 F.3d 873, 879 (3d Cir. 1995)).
1. Convenience of the Parties and Witnesses, the Interest of Justice, and Other Pending Litigation
There are three factors that a district court must consider when considering whether to transfer a case to another district: 1) the convenience of the parties; 2) the convenience of the witnesses; and 3) the interest of justice. Liggett Group, 102 F. Supp.2d at 526 (citing 28 U.S.C. § 1404(a); Jumara, 55 F.3d at 879). The decision to transfer should incorporate all relevant factors and weigh whether a case would more conveniently proceed in a different forum. See Liggett Group, 102 F. Supp.2d at 526 (citing cases).
In the Third Circuit, the plaintiff's choice of forum, here the District of New Jersey, is presumptively correct and of paramount consideration and should be disturbed only rarely in a § 1404(a) transfer motion. See Lacey v. Cessna Aircraft Co., 862 F.2d 38, 43 (3d Cir. 1988); Shutte v. Armco Steel Corp., 431 F.2d 22, 25 (3d Cir. 1970), cert. denied, 401 U.S. 910 (1971); NCR Credit Corp. V. Yeseekera Horizon, Inc., 17 F. Supp.2d 317, 321 (D.N.J. 1998); American Cyanamid Co. v. Eli Lilly Co., 803 F. Supp. 781, 786 (D.N.J. 1995). To overcome the presumption in favor of the plaintiff's forum choice, the defendant bears the burden of producing substantial evidence, more than a mere preponderance of the evidence, in favor of transferring the case.See Jumara, 55 F.3d at 879 (alternative forum must be more convenient and not merely adequate); Sandvik, Inc. V. Continental Ins. Co., 724 F. Supp. 303, 307 (D.N.J. 1989). Additionally, when the plaintiff has chosen its home state as the forum, which is the case in this litigation, that forum choice is entitled to even greater deference. See Piper Aircraft v. Reyno, 454 U.S. 235, 255, 102 S. Ct. 252, 265 (1981); Sandvik, 724 F. Supp. at 307; Securities Savings Bank, SLA v. Greentree Acceptance, Inc., 703 F. Supp. 350, 353 (D.N.J. 1989).
The plaintiff, CMI-Promex, a New Jersey corporation located in Pedricktown, New Jersey, filed the instant action in the District of New Jersey, their "home district." This choice, as discussed above, is presumptively correct and must not be disturbed unless "the balance is strongly tipped in favor of the defendant." Gulf Oil Corp. V. Gilbert, 330 U.S. 501, 67 S. Ct. 839, 91 L. Ed. 1055 (1947); Tishcio v. Bontex, Inc., 16 F. Supp.2d 511, 518 (D.N.J. 1998). Defendant has come forward with little proof or evidence in support of its argument that this action is more appropriately litigated in the Northern District of Ohio. Defendant's primary argument in support of their motion is that it would be economical for the action to be transferred so that it could be consolidated with its later-filed declaratory judgment action, currently pending in the Northern District of Ohio. Defendant avers that both actions involve identical issues and should be combined, to promote economy and avoid inconsistent results. (See Defs.' Supp. Mot. At 2-3.)
Such an argument is weak and not sufficient, by itself, to justify disturbing plaintiff's chosen forum. The general rule in the Third Circuit is that first-filed suit should take priority when determining venue. See American Cyanamid Co. v. Eli Lilly and Co., 903 F. Supp. 781, 787 (D.N.J. 1995) (citingEEOC v. University of Pennsylvania, 850 F.2d 969, 971 (3d Cir. 1988)). This is particularly true in patent cases. See American Cyanamid, 903 F. Supp. at 787 (citations omitted). Defendant ignores that the New Jersey action was filed first and has offered no argument to overcome the general rule that venue should remain here.
First, the pending declaratory judgment action was filed after plaintiff's action was filed in New Jersey. See One World Botanicals, Ltd. V. Gulf Coast Nationals, 987 F. Supp. 317 (D.N.J. 1997). Defendants chose to initiate the declaratory judgment action in Ohio and therefore cannot now argue that plaintiff's action should be transferred. Second, now that this Court found that there is personal jurisdiction in the District of New Jersey over defendant Cleveland Track, if not Blanchard Steel, the subject matter of the Ohio action may only be proper as a compulsory counterclaim in New Jersey. When Cleveland Track answered plaintiff's Amended Complaint on March 2, 2001, they did not assert any counterclaims. This might constitute a waiver of any such counterclaim, and plaintiffs may indeed succeed in having the Ohio action dismissed on that ground.
Defendant also asserts that "the majority of the documents and witnesses related to the claims in this action are located in the Northern District of Ohio." (Defs.' Supp. Mot. at 3.) Defendant does not, however, supply any proof, in the form of affidavit or other, in support of this conclusory statement. The presumption in favor of the plaintiff's choice of forum, therefore, has not been adequately overcome.
In this case, the interests of justice and judicial administration and economy weigh in favor of denying defendant's motion to transfer. No adequate evidence has been presented to show that the District of New Jersey, which has jurisdiction over Cleveland Track and is a proper venue for the case, is a less suitable venue than the Northern District of Ohio. Defendant's claim that this action should be transferred so that it can be consolidated with the declaratory judgment action, which was filed after this action, is without merit, particularly in light of the distinct possibility that the Ohio action can only be litigated in New Jersey as a compulsory counterclaim, pursuant to Rule 13(a), Fed.R.Civ.P. Likewise, Blanchard does not appear to be a necessary party with respect to the remaining issues between plaintiff and defendant Cleveland Track. Defendant has failed to meet its burden of showing that transfer of this case is necessary and appropriate and, therefore, the motion to transfer will be denied.
III. CONCLUSION
For the reasons discussed herein, defendant's motion to transfer this case to the Northern District of Ohio will be dismissed. Defendant failed to meet its burden under 28 U.S.C. § 1404(a) and therefore plaintiff's chosen venue shall remain unchanged. The accompanying Order is entered.
ORDER
This matter having come before the Court upon defendants' motion to transfer this action to the United States District Court for the Northern District of Ohio [Docket Item 26-1]; and this Court having considered the parties' submissions; and for the reasons expressed in an Opinion of today's date;
IT IS this day of September 2001 hereby
ORDERED that defendants' motion to transfer this action to the Northern District of Ohio be, and hereby is, DENIED.