Opinion
Civil Action No. 3:01-CV-1560-G
March 13, 2002
MEMORANDUM ORDER
Before the court is the motion of the defendants, SOS Company, Inc. d/b/a Dogtra Company ("SOS"), Han Seung Enterprise Company, Limited ("Han Seung"), and Ho-Yun So ("So") (collectively, "the defendants"), for transfer of venue to the United States District Court for the Central District of California, Western Division. For the reasons discussed below, the defendants' motion to transfer is denied.
I. BACKGROUND
The plaintiff, D.T. Systems, Inc. ("DTS"), is a Texas corporation with its headquarters and principal place of business in Dallas, Texas. Complaint ¶ 1. SOS is a California corporation with its headquarters and principal place of business in California. Id. ¶ 2. Han Seung is a corporation or partnership organized under the laws of the Republic of (South) Korea. Id. ¶ 3. So is the president of Han Seung. Id. Han Seung's principal place of business is in Seoul, Korea. Id. So is a citizen of the Republic of (South) Korea. Id. ¶ 4.
DTS alleges that in about 1979, J.S. Kim ("Kim"), who is now DTS's president, and So went into the pet supply business together. Id. ¶ 7. So is the brother-in-law of Kim's youngest brother. Id. So agreed to manufacture the products in South Korea and Kim's company was to sell the products. Id. In about 1984, DTS was formed to distribute dog-training collars. Id. Kim and So agreed to undertake this business venture together as well. Id. Han Seung manufactured the dog-training collars in South Korea and DTS sold them in the United States under its own brands. Id. DTS claims that Han Seung and DTS were allegedly formed to work together, and jointly developed the products DTS sold. Id. According to DTS, because the companies were formed to work together, and because Kim and So were family members, many agreements were made orally and with a "heightened sense of trust." Id.
DTS alleges that in furtherance of the "joint venture or special relationship" that existed between it and Han Seung, it shared confidential, proprietary information with Han Seung, including the identities of dealers and customers, pricing information, consumer complaints, etc. Id. ¶ 8. Furthermore, DTS allegedly funded research and development for new products at the request of So and Han Seung. Id.
DTS alleges that So and Han Seung induced DTS to share this confidential information by representing that Han Seung would stay in business with DTS and would continue to supply DTS with products. Id. ¶ 9. Furthermore, DTS alleges that So and Han Seung expressly or impliedly represented and agreed that Han Seung would not compete with DTS and that the proprietary information given to Han Seung by DTS would not be used to the detriment of DTS. Id. DTS maintains that it relied on these representations to its detriment by giving So and Han Seung the proprietary information, funding the research and development, advertising the products manufactured by Han Seung, and developing the market and building its reputation based on its ability to obtain the products supplied by Han Seung. Id.
According to DTS, So and Han Seung engaged in a pattern of surreptitious activities that was inconsistent with the joint venture or special relationship that existed between them. Id. ¶ 10. Han Seung contacted one of DTS's dealers to form a direct relationship selling dog-training products. Whenlearned about this, he confronted So, who allegedly "begged forgiveness" and represented that Han Seung would cease its direct relationship with the dealer. In 1998, Kim learned that So had applied for two Korean patents in his own name. DTS claims that when Kim confronted So about the patents, So agreed to add Kim's name to all patents, and represented that the patents were for the benefit of So, Han Seung, and DTS. Id. So purportedly signed an agreement allowing DTS to sell the products covered by these patents. Id. DTS alleges that So had also applied for two other patents in Korea and in 1999 filed virtually identical patent applications in the United States, without including Kim as an inventor or assigning DTS these patents, contrary to the agreement he signed with Kim. Id. A patent was issued in the United States under number 6,131,535 (the "`535 patent") on October 17, 2000. Id.; Id., Exhibit A.
In July 2000, DTS alleges, Han Seung informed DTS that it would discontinue supplying the dog-training collars to DTS, and that Han Seung began distributing the collars through SOS. Id.
DTS claims that So and/or his relatives formed SOS in California. Id. ¶ 12. SOS is now engaged in the business of selling dog-training collars in the United States in direct competition with DTS. Id. DTS alleges that SOS "apparently" assigned at least one, if not both, of the U.S. patents for which he applied in 1999, including the `535 patent. Id. On or about July 19, 2001, SOS demanded that DTS cease and desist from selling certain of its products because they allegedly infringe the `535 patent. Id.; Id., Exhibit B.
DTS distributed the products at issue with its own brand name throughout the United States. Id. ¶ 13. DTS allegedly maintained responsibility for identifying the market, fielding customer complaints, and providing warranties to customers. Id. ¶ 13. Thus, DTS contends, the public associated the trademarks and the trade dress of the products with DTS. Id.
II. ANALYSIS — TRANSFER OF VENUE
A district court may transfer any civil 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." 28 U.S.C. § 1404(a). The purpose of Section 1404(a) "is to prevent the waste `of time, energy, and money' and `to protect litigants, witnesses and the public against unnecessary inconvenience and expense . . .'". Van Dusen v. Barrack, 376 U.S. 612, 616 (1964) (quoting Continental Grain Company v. Barge FBL-585, 364 U.S. 19, 26, 27 (1960)). The decision to transfer a pending case is committed to the sound discretion of the district court. Jarvis Christian College v. Exxon Corporation, 845 F.2d 523, 528 (5th Cir. 1988). The plaintiff's choice of forum, however, is given substantial weight and should not be disturbed without giving full consideration to the equities of the particular case. See Time, Inc. v. Manning, 366 F.2d 690, 698 (5th Cir. 1966). Accordingly, the defendants have the burden of demonstrating why the forum should be changed. Id.
In deciding whether to transfer a case, the court should consider (1) the convenience of the parties, (2) the convenience of material witnesses, (3) the availability of process to compel the presence of unwilling witnesses, (4) the cost of obtaining the presence of witnesses, (5) the relative ease of access to sources of proof, (6) calendar congestion, (7) where the events in issue took place, and (8) the interests of justice in general. Gundle Lining Construction Corporation v. Fireman's Fund Insurance Company, 844 F. Supp. 1163, 1165 (S.D. Tex. 1994). The defendants have not shown, upon analysis of these factors, that this case should be transferred to the Central District of California.
A. Factors (1), (2), (3), and (4): The Convenience of the Parties, The Convenience of Material Witnesses, Availability of Process, and Cost of Obtaining WitnessesThe defendants are residents of Korea, as are the employees of So and Han Seung. Defendants' Motion to Transfer Venue Pursuant to 28 U.S.C. § 1404(a) and Memorandum in Support of Motion ("Motion") at 7-8. The defendants claim that it is far more convenient for them to travel to California than to Dallas. Id. Korean Airlines conducts non-stop service three times a week between Seoul, Korea, and Dallas, Texas. Id. at 8; Declaration of Peter S. Veregge ("Veregge Declaration") ¶ 2, located in Defendants' Appendix at 1-2. The defendants point out that Korean Airlines flies non-stop between Seoul and Los Angeles twice a day, seven days a week. Id. at 1. The non-stop flight from Seoul to Dallas is between an hour and two and a half hours longer than the one from Seoul to Los Angeles. Motion at 8; Plaintiffs' Response to Defendants' Motion to Transfer Venue and Supporting Brief ("Response") at 5. The flight from Dallas to Los Angeles is about three hours. Motion at 8; Response at 5.
On the other hand, DTS maintains that many important witnesses reside in Dallas, including six witnesses who are not employed by the plaintiff or the defendants. Response at 4. Three of these witnesses purportedly have health problems that would make travel to California difficult. Id. Additionally, the plaintiffs assert that the defendants have conducted business in Dallas and traveled to Dallas regularly for sixteen years. Id. at 5.
The defendants also indicate that interpreters who can speak the Korean language will be required and that the defendants' counsel in California, Michael Gill, speaks Korean and can interpret during conferences with counsel. Motion at 12. The court agrees with the plaintiffs, however, that there are interpreters in Dallas who are capable of translating the Korean language. Response at 5-6; Affidavit of Cristy Walters, Plaintiff's Appendix, Exhibit B. Furthermore, Mr. Gill can travel to Dallas just as easily as DTS's counsel can travel to California if this case were transferred.
Weighing all of the evidence presented on these issues, the court finds that these factors are neutral.
B. Factors (5) and (7): Sources of Proof and Where the Events in Issue Occurred
The parties dispute the location where most of the relevant events took place. Motion at 13-15; Response at 7-8. According to DTS, most of the events took place in Dallas. Response at 7-8. DTS is based in Dallas, and for sixteen years, Han Seung shipped the products at issue in this case to Dallas. Id. at 7. For a few years, SOS shipped these products to Dallas. Id. Furthermore, So has regularly traveled to Dallas as part of the business. Id. DTS contends that many of the representations So allegedly made were made in Dallas. Id. The products that DTS allegedly sold in violation of SOS's patents were sold in Dallas, were shipped to Dallas, and were shipped out of Dallas. Id.
According to the defendants, however, the majority of the events in issue took place in Southern California and Korea. Motion at 13. The events which took place in Korea, however, do not have any bearing on this portion of the analysis. The defendants claim that DTS admits that virtually all of SOS's actions giving rise to DTS's claims occurred in California. Id. at 14. It is undisputed that SOS is a California corporation and that SOS's operations are based in California. Id.; Complaint ¶ 12. It is also undisputed, however, that SOS distributes the products at issue in Texas. Motion at 14; Response at 7.
Weighing the evidence presented on both sides of this issue, the court finds that this factor is neutral.
C. Factor (6): Calendar Congestion
The parties agree that this factor is neutral. Response at 9; Motion at 18-19.
D. Factor (8): The interest of Justice
Although a court considering transfer of venue under section 1404(a) does not necessarily exercise a strong presumption in favor of plaintiff's choice of forum, it is certainly a factor to be considered. See Continental Airlines, Inc. v. American Airlines, Inc., 805 F. Supp. 1392, 1395 (S.D. Tex. 1992) (comparing the standard of 28 U.S.C. § 1404(a) with the standard of forum non conveniens); Mohamed v. Mazda Motor Corporation, 90 F. Supp.2d 757, 771-74 (E.D. Tex. 2000). In this case, each factor considered is neutral. After giving full consideration to the equities of this case, none of the evidence presented by the defendants outweighs the plaintiff's choice of forum. See Time, Inc. v. Manning, 366 F.2d at 698. Therefore, the court concludes that this case should not be transferred to the Central District of California.
III. CONCLUSION
For the reasons discussed, the defendants' motion to transfer this case to the Central District of California is DENIED.
SO ORDERED.