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noting that a Kansas court "may be able to compel the attendance of employees of the defendants"
Summary of this case from Zentral-Genossenschaftsbank v. All General Lines InsOpinion
CIVIL ACTION No. 99-2519-CM.
January 18, 2001.
MEMORANDUM AND ORDER
This matter is before the court on the motion (Doc. 16) of the defendants, First Union Insurance Group and First Union Mortgage Corporation (First Union), for a change of venue pursuant to 28 U.S.C. § 1404(a). Plaintiff, Meek Associates, Inc. (Meek), opposes the motion.
Background
Defendants are North Carolina Corporations with their principle place of business in Charlotte, North Carolina. Meek is a Kansas Corporation with its principle place of business in Overland Park, Kansas. Plaintiff alleges that First Union and Meek entered into contractual business relationships whereby plaintiff was to perform certain consulting services and generate ancillary insurance programs for defendants.
Plaintiff filed this suit on November 16, 1999, alleging that it was not properly compensated under the contracts. On June 5, 2000, defendants filed a motion for change of venue to the Western District of North Carolina arguing that the convenience of the parties and witnesses and the interests of justice require the transfer. The parties agree that the contracts were executed in North Carolina and that North Carolina law controls in this case.
Legal Standard for Transfer of Venue Pursuant to 28 U.S.C. § 1404 (a)
The transfer statute 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." 28 U.S.C. § 1404(a). The party making the motion to transfer a case under the statute bears the burden of establishing that the existing forum is inconvenient. Chrysler Credit Corp. v. Country Chrysler, Inc., 928 F.2d 1509, 1505 (10th Cir. 1991). Transfer is not justified where the transfer merely results in shifting the inconvenience from one party to the other. Scheidt v. Klein, 956 F.2d 963, 966 (10th Cir. 1992); Sheldon v. Vermonty, 31 F. Supp.2d 1287, 1298 (D.Kan. 1998).
The court must make a case-by-case determination of whether transfer is proper in the circumstances. Chrysler Credit, 928 F.2d at 1516. The Tenth Circuit in Chrysler Credit provided a nonexclusive list of factors to be considered by the district court in deciding whether a transfer is proper:
the plaintiff's choice of forum; the accessibility of witnesses and other sources of proof, including the availability of compulsory process to insure attendance of witnesses; the cost of making the necessary proof; questions as to the enforceability of a judgment if one is obtained; relative advantages and obstacles to a fair trial; difficulties that may arise from congested dockets; the possibility of the existence of questions arising in the area of conflict of laws; the advantage of having a local court determine questions of local law; and, all other considerations of a practical nature than make a trial easy, expeditious and economical.
Chrysler Credit, 928 F.2d at 1516.
Courts in this district have considered the relative financial burden of litigating the case as a factor in deciding whether to allow a transfer. Victor Co., v. Ortho Organizers, Inc., 932 F. Supp. 261, 263-64 (D.Kan. 1996). Convenience of the non-party witnesses is the most important factor to be considered. Cook v. Atchison, Topeka Santa Fe Ry., 816 F. Supp. 667, 669 (D.Kan. 1993).
Where a movant argues the necessity of a witness, the movant must show some factual basis that the witness's testimony is relevant and material, that the witness is unwilling to come to trial, that deposition testimony would be inadequate, or that compulsory process would be useful. Scheidt, 956 F.2d at 966; Boilermaker-Blacksmith Nat'l Pension Fund v. Gendron, 67 F. Supp.2d 1250, 1257 (D.Kan. 1999) (insufficient information to determine availability of witnesses). Furthermore, "[u]nless the balance is strongly in favor of the movant the plaintiff's choice of forum should rarely be disturbed." Scheidt, 956 F.2d at 965 (quoting William A. Smith Contracting Co. v. Travelers Indem. Co., 467 F.2d 662, 664 (10th Cir. 1972).
Analysis
Defendants argue that plaintiff's choice of forum is not controlling in this case, that North Carolina is the most convenient forum for the accessibility of witnesses and other sources of proof, that the costs of litigation favor venue in North Carolina, and that controlling law and the interests of justice support venue in North Carolina.
Plaintiff's Choice of Forum
The plaintiff is a citizen of Kansas who chose to litigate its cause of action in this district. Plaintiff's choice of forum will be given substantial weight. Cook, 816 F. Supp. at 669. The Cook court cited the rule that "where the facts giving rise to the lawsuit have no material relation or significant connection to the plaintiff's chosen forum, the plaintiff's choice of forum is given reduced weight." Id. (citing Hernandez v. Graebel Van Lines, 761 F. Supp. 983, 990 (E.D.N.Y. 1991)). However, in Cook the plaintiffs were residents of the district to which the defendant sought transfer pursuant to section 1404(a), and were residents of the town in which the majority of witness could be found. Id. Furthermore, all of the witnesses which were residents of the district in which the plaintiffs filed that action were employees of the defendant and resided closer to the transferee court than to the court in which the plaintiffs sued. Id.
Because the plaintiff here is a citizen of Kansas, the court believes the better rule is that relied upon in KCJ Corp. v. Kinetic Concepts, Inc., 18 F. Supp.2d 1212 (D.Kan. 1998). The court in KCJ Corp., stated: "It is not sufficient for defendant to show that the claim arose elsewhere." Id. at 1214 (citing Headrick v. Atchison, Topeka Santa Fe Ry., 182 F.2d 305 (10th Cir. 1950)). In KCJ Corp. the plaintiff, a citizen of Kansas, sued defendants, citizens of Texas, in the Western District of Missouri seeking to take advantage of local rules and procedures which would "promote prompt and cost effective disposition of cases." Id. at 1215. Defendant sought transfer to the Western District of Texas pursuant to § 1404(a). Id.
The Missouri court at first gave plaintiff's choice of forum no deference because plaintiff was not a resident of Missouri. Consequently, it granted the motion to transfer to Texas. The plaintiff filed a motion for partial reconsideration requesting transfer to the District of Kansas. The Missouri court granted plaintiff's motion as a cross-motion for transfer of venue. In the District of Kansas, the defendants renewed their motion to transfer to the Western District of Texas. Id.
Citing the doctrine of law of the case, the Kansas court treated defendants' motion as a motion for reconsideration. The Kansas court agreed with the Missouri court that transfer to Texas was not in the interest of justice or for the convenience of the parties and witnesses. It found no clear error in the fact that the Missouri court afforded great deference to the plaintiff's second choice of forum — the District of Kansas. The court noted that the plaintiff's selection of Missouri or Kansas was not made to vex, harass, or oppress the defendants, and that the plaintiff did not gain an advantage in substantive law by litigating in Kansas. Consequently, the District of Kansas court found no forum-shopping and no clear error in the decision to transfer venue to the District of Kansas instead of the Western District of Texas. Id. at 1216. This court, likewise, affords great deference to Meek's choice of forum and finds that, although the contracts at issue were executed in North Carolina, that fact alone is not controlling as to the issue of venue under § 1404(a).
Witnesses and Other Sources of Proof
Of thirty-two potential witnesses, fourteen non-party witness reside in states other than North Carolina and Kansas, seventeen employees or former employees of the defendants reside in North Carolina and only the president of the plaintiff resides in Kansas. Defendants argue that this court will be unable to compel attendance of any of the witnesses except the plaintiff's president, that it would be unfair to require such extensive testimony by deposition, and that the plaintiff's president owns a residence in North Carolina and could easily live there while a trial is conducted in that forum.
Defendants provide no information concerning the significance of the testimony of the thirty-one potential witnesses not residing in Kansas. They do not show whether any of the witnesses are willing to appear without subpoena, and they do not consider that this court may be able to compel the attendance of employees of the defendants. Mason v. Texaco, Inc., 741 F. Supp. 1472, 1504 (D.Kan. 1990). The fact that the non-party witnesses reside neither in North Carolina nor in Kansas does not weigh in favor of venue in either district because compulsory process will be unavailable to either court.
Defendants' arguments concerning documentary proof are similarly unavailing. Defendants do not show which documents are significant to the trial, and why the documents cannot be inexpensively or conveniently transferred. Defendants argue that "[w]ith the exception of plaintiff's own documents, all of the remaining discoverable documents . . . are not in Kansas and most are located in . . . North Carolina." (Def.'s Mem., at 4) (emphasis added). Defendants admit that plaintiff's documents are in Kansas and some documents are located in neither Kansas nor North Carolina. Defendants' attorneys are located in Kansas City, Missouri, and the court presumes it will be necessary to make the documentary proof available to them. Furthermore, defendants do not suggest that exhibits in North Carolina are outsized, excessively heavy, or not economically transportable for some other reason.
Defendants make much of the issue of the convenience of witnesses in their arguments, and the court agrees that it is the most important factor. However, convenience of the witnesses appears to be a neutral factor in the circumstances. The fact that witnesses associated with the plaintiff reside in Kansas and witnesses associated with defendants reside in North Carolina is unremarkable. The court expects that, in many cases, witnesses associated with each party reside near that party. Considering the convenience of witnesses which are employees of a party is much the same as considering the convenience of that party. Defendants' argue that they would bear a greater expense in bringing more witnesses to trial in Kansas than the plaintiff would bear in bringing its witnesses to trial in North Carolina. That burden is largely the result of our judicial preference for allowing the plaintiff to choose the venue so long as that forum has jurisdiction over the subject matter and the parties. Changing the forum to accommodate the party with the most potential witnesses results merely in shifting the burden from one party to the other and is an improper reason to transfer venue. Therefore, the convenience of defendants' employee witnesses does not weigh the balance toward venue in North Carolina.
Moreover, the convenience of the fourteen non-party witnesses does not weigh in favor of venue in North Carolina. Five non-party witnesses live in Maryland, five in Texas, two in Illinois, one in Florida, and one in Pennsylvania. (Pl.'s Response, Affidavit of David Meek, at 2-3) Neither court can compel attendance of those witnesses. The court notes that it appears a North Carolina forum might be more convenient for the witnesses from Maryland, Pennsylvania and Florida, while Kansas might be more convenient to the witnesses from Illinois and Texas. However, neither party has provided facts from which the court can determine which forum is most convenient for the non-party witnesses. The court finds that the convenience of witnesses and accessibility of witnesses and other sources of proof does not weigh in favor of either forum in this case.
Costs of Litigation
The court finds that the costs of litigation do not weigh in favor of transfer of venue to North Carolina. As the defendants explain, "[t]he cost of discovery . . . will be approximately the same whether this case is heard in Kansas or North Carolina." (Defs.' Mem., at 5). Therefore, the cost of discovery is not material to this decision.
Defendants arguments relating to other costs of litigation fail for the same reasons as those regarding the convenience of employee witnesses. Transfer of venue would serve merely to shift the greatest trial costs from defendant to plaintiff. Defendants note that both parties are represented by attorneys located in Kansas City, Missouri. To that extent, a transfer of venue to North Carolina would work to the inconvenience of both parties. Costs of obtaining testimony from a non-party witness will be borne by the party seeking testimony of that witness. Assuming that all fourteen witnesses will testify at trial, the costs appear to be approximately equal regardless of the forum, although the court notes that neither party has provided information sufficient to accurately determine the costs involved. Litigation costs do not support venue in either district.
Controlling Law and the Interests of Justice
Defendants argue the interests of justice support venue in North Carolina. They assert that North Carolina law is controlling, the court in North Carolina will better apply its law, and that a court in North Carolina has a considerable interest in applying its law. The court agrees with the defendants. However, the application of North Carolina law "is not a significant concern in light of the relative simplicity of the legal issues involved in the . . . breach of contract claims." Scheidt, 956 F.2d at 996.
Defendants argue that the congestion of the courts in this district justify transfer to North Carolina. However, the arguments presented show that the median time to trial in both districts is 19 months, and that the median time to final disposition of a case is only one month quicker in the Western District of North Carolina. Furthermore, the case load per judge is less in this district than in North Carolina. The court finds that congestion of the courts' dockets is not a significant factor.
Finally, the plaintiff argues that it is proper for the court to consider the relative resources of the parties in considering which forum is proper in the interests of justice and the convenience of the parties. The court agrees. The parties' relative ability to litigate in a distant forum is a factor to consider. Victor Co., 932 F. Supp. at 263-64. Defendants argue that the plaintiff, through its president, had sufficient resources to seek and establish a business relationship in North Carolina and to purchase a residence in North Carolina while performing in that relationship. Therefore, they contend it is disingenuous to argue that plaintiff is a "one-man operation" without resources to litigate in North Carolina.
The court disagrees. Plaintiff sought the business relation at issue and, in hopes of turning a profit, invested in the relationship. However, the complaint alleges the defendants failed to perform their end of the agreement. Plaintiff filed this suit seeking to recover for the defendants' alleged failure to perform. Defendants now seek to force the plaintiff to prosecute its suit in a forum distant from its present business. The effect of trial on the business of a party is a factor which affects the convenience of that party. Defendants may not force the plaintiff to pursue its case in a distant venue where the effect of the transfer of venue is merely to shift the burden from defendants to plaintiff.
Conclusion
Several factors support a decision not to transfer venue. Plaintiff chose this forum. Plaintiff's choice of forum is to be given great deference. Defendants do not provide information to establish that the accessibility of witnesses and other sources of proof is significantly more burdensome in this forum than in North Carolina. The convenience of non-party witnesses, the most important consideration in this case, is not significantly different in either forum. Congestion in the docket of either district does not justify change of venue. The relative financial resources of the parties support retaining venue.
The only factor supporting a change of venue is that North Carolina law applies, the North Carolina court will be more well-versed in that law, and a North Carolina court will have an interest in determining North Carolina law. However, the significance of this factor is reduced because this case involves relatively simple issues of contract law.
Defendants will be inconvenienced by litigating in this district, but they do not argue that jurisdiction is improper in this district or that their contacts with this district are too tenuous to assert personal jurisdiction. In light of all the circumstances, the court finds that a change of venue would merely shift the inconvenience from the defendants to the plaintiff. Therefore, the court denies defendants' motion for a change of venue because defendants have failed to meet their burden to show the balance is strongly in favor of venue in the Western District of North Carolina.
IT IS THEREFORE ORDERED that defendants' motion (Doc. 16) is denied.