Opinion
Civil No. SA-01-CA-699-FB
December 26, 2002
REPORT AND RECOMMENDATION OF THE UNITED STATES MAGISTRATE
TO: Honorable Fred Biery United States District Judge
Pursuant to the order of referral in the above-styled and numbered cause of action to the undersigned United States Magistrate Judge and consistent with the authority vested in United States Magistrate Judges under the provisions of 28 U.S.C. § 636 (b)(I)(B) and rule 1(d) of the Local Rules for the Assignment of Duties to United States Magistrates, effective January 1, 1994, in the Western District of Texas, the following report is submitted for your review and consideration.
Docket no. 20.
I. JURISDICTION
Plaintiff's first amended complaint alleges jurisdiction under 28 U.S.C. § 1331, 1337(a) and 1339. The second amended complaint, which will be discussed further below, alleges these same jurisdictional bases. The second amended complaint also alleges state law claims over which the Court could assert supplemental jurisdiction pursuant to 28 U.S.C. § 1367.
Docket no. 28, attachment.
II. PROCEDURAL HISTORY
On August 2, 2001, defendant Oxmoor House, Inc. ("Oxmoor") removed this case to this Court from the 166th Judicial District Court of Bexar County, Texas alleging that the parties were of diverse citizenship and the amount in controversy exceeded $75,000, exclusive of interests and costs. Plaintiff Mary Ann Randolph's ("Randolph") original petition alleged, in sum, that Oxmoor violated Texas Business and Commerce Code § 35.45, California Civil Code § 1584.5, Florida Statutes Annotated § 570.545, New York General Business Law § 396, and the laws of other states when Oxmoor delivered to Randolph a book that she had not ordered "unaccompanied by disclosure that there is no obligation to pay for or return the goods[,] . . . invoicing for the unordered book and initiating a series of dunning letters and collection efforts if the books are not promptly paid for." Randolph requested that her action be maintained as a class action and pleaded one cause of action for "money had and received — restitution" in which she requested restitution of "all money had and received from residents of Texas, Florida, California and New York" for money paid for books not ordered. Plaintiff sought restitution for monies paid, an injunction to prohibit defendant from sending unsolicited books and seeking to collect for unsolicited books, pre and post judgment interest, attorney's fees, and costs.Prior to the time of removal, Oxmoor filed its answer in the nature of a general denial. Following removal, on August 8, 2001, Randolph filed a demand for jury trial. On August 31, 2002, plaintiff filed a motion for leave to file a first amended complaint, a conditional motion to remand seeking an Order remanding her case if the District Court denied her leave to file the first amended complaint, and a motion for class certification. The then-proposed first amended complaint alleged a federal cause and was premised on federal question rather than diversity jurisdiction. On September 12, 2001, Oxmoor filed a combined response to the motion to amend and a motion for an extension of time to respond to the motion for remand and the motion for class certification. In brief, defendant indicated that it "does not oppose plaintiff's motion for leave" to amend, requested an extension of time to respond to Randolph's motion to remand which would be mooted by an Order granting leave to amend, and argued that plaintiff's motion for class certification should not be taken up by the Court until defendant had briefed class-wide issues and had been allowed the opportunity to conduct discovery on class certification issues. On October 2, 2001, the District Court denied the motion to remand, granted Randolph leave to file a first amended complaint, and granted Oxmoor an extension of time to file a response to the motion for class certification until such time as the District Court ruled on the motion to dismiss.
Docket no. 1, answer at 1.
Docket no. 2.
Docket nos. 3, 4, and 5.
Docket no. 6.
Docket no. 6 at 3-6.
Docket no. 9.
Randolph's first amended complaint alleged a cause of action under the Federal Unauthorized Merchandise Statute. The first amended complaint alleged, in sum, that Oxmoor had violated the statute "by sending books to people who did not order them and then dunning the people for payment of `debts' they are not obligated to pay;" alleged that the certification of a nationwide class under FED. R. CIV. P. 23 is merited; and sought restitution "for the full amount paid by each member of the class for each unordered book paid for by a class member," an injunction restraining Oxmoor "from collecting or attempting to collect debts from the class members who have been sent unordered books," and "such other and additional relief as the Court may deem just and proper." The state law claims were dropped from the case.
Docket no. 10 at 1.
Id. at 22.
In lieu of filing an answer to the first amended complaint, on October 17, 2001, Oxmoor filed a motion to dismiss arguing, in sum, that there was no express or implied private right of action for restitution or for injunctive relief under the Federal Unauthorized Merchandise Statute, Title 39, United States Code, § 3009. On October 22, 2001, Randolph filed her response to the motion to dismiss, arguing, in sum, that two reported cases have addressed the existence of an implied right of action under § 3009, and both cases have held that a limited private right of action exists belonging to a recipient of unordered merchandise to obtain restitutionary relief. Randolph argued those cases were on point, correctly decided, and this Court should follow them. Within the text of her arguments, in the event the Court determined that no private right of action existed, Randolph asked for leave to amend her complaint to assert other causes of action, "including the several state statutes which prohibit the sending of unordered goods, the deceptive trade practice acts of most states, the Federal Fair Debt Collection Practices Act, the unfair debt collection statutes of several states, and the common law claims of money had and received, unjust enrichment and other claims."
Docket no. 14.
Docket no. 16.
Docket no. 16 at 1-10.
Id. at 10.
On November 2, 2001, Oxmoor filed its reply in support of its motion to dismiss, reiterating its arguments that: Congress' intent is the dispositive factor as to whether a private right of action should be implied; there is a presumption that Congress did not intend to create a private right of action; and plaintiff had not sustained her burden to demonstrate that Congress intended that private individuals be allowed to sue in court to obtain restitution, damages and/or an injunction. Oxmoor did not address Randolph's motion for leave to amend or motion for hearing.
Docket no. 17.
On June 20, 2002, the Court referred this case to the undersigned for pretrial management, and on July 18, 2002, the undersigned entered a report and recommendation on the then-pending motions. Noting that the undersigned was bound by the decision of a District Court in the Western District of Texas in Crosley v. Lens Express, Inc., that there was an implied private right of action under § 3009, the undersigned recommended that the Oxmoor's motion to dismiss Randolph's claims for restitution and injunctive relief should be denied. In addition, the undersigned recommended that the District Court should deny Randolph's motion for leave to amend the first amended complaint as moot.
Docket no. 20.
Docket no. 21.
Id. at 16-17.
2001 WL 650728, * 3 and *6 (W.D. Tex. Feb. 12, 2001).
Docket no 21 at 31.
Id. at 31-32 and n. 120. The undersigned also recommended that "plaintiff's motion for hearing should be denied and motion for class certification should be dismissed without prejudice to plaintiff renewing the motion to be filed in accordance with a scheduling Order after the District Court has entered a ruling on this report." Id. at 32.
Alternatively, the undersigned noted that "a decision of a District Judge of this Court is persuasive authority, but not necessarily binding precedent to another District Judge of this Court." In the event the District Judge found and found merit in Oxmoor's argument that Crosley was wrongly decided in light of subsequent Supreme Court precedent and other factors, then defendant's motion to dismiss should be granted, and plaintiff's motion for leave to amend should be denied
Id. at 17.
See generally, id.
Id. at 27.
on the ground that plaintiff has already amended once as a matter of course as provided by FED. R. CIV. P. 15(a), and, in the current briefing, appears to ask for leave to amend as an aside, without showing sufficient reason to amend again to add a new federal claim. Such a ruling would be without prejudice to plaintiff pursuing any available state remedies in state court.
Id. at 31 and n. 120. The undersigned's recommendations for the motion for hearing and the motion for class certification remained the same as set forth above.
The parties filed objections to the report and recommendation. Oxmoor objected to that portion of the report that recommended the District Court should follow Crosley and deny the motion to dismiss the claims for restitution and for injunctive relief. Randolph filed a response to Oxmoor's objections arguing that Crosley was correctly decided and that "precedent established by the United States Supreme Court and the Fifth Circuit compel the conclusion that there is a private right of action for restitution and injunctive relief under subsection (b) of 39 U.S.C. § 3009." In addition, Randolph filed an objection to the portion of the report that recommended plaintiff's motion for leave to amend should be denied. Randolph argued that
Docket nos. 22 and 23.
Docket no. 22.
Docket no. 24 at 4 and 6.
Docket no. 23.
Dismissal of Randolph's claims without leave to amend, as opposed to remand of Randolph's claims after leave to amend, could create statute of limitations problems which would prejudice the unnamed members of the class without notice to them. Ordinarily this would not be an issue. In this case, however, the four-year statute of limitations tolled by Randolph is important to the substantive rights of some of the class members who allegedly "enrolled" or received unordered books between June 15, 1997 and about July 1, 1998. In July 1998, Oxmoor changed some of its "enrollment" marketing and advertising methods. By filing suit when she did, Randolph tolled limitations for an estimated 200,000-300,000 potential class members whose rights are related to [Oxmoor's] pre-July 1, 1998 advertising copy. Those rights could be jeopardized by dismissal, but would not be jeopardized if leave to amend were granted and the case remanded (if Randolph elects not to plead the Federal Unfair Debt Collection Practices Act). The law applicable to tolling of limitations after dismissal is confused at best and dismissal without leave to amend may unfairly prejudice members of the class.
Id. at 2-3.
Randolph urged the District Court "to allow her to amend to preserve without controversy these important statute of limitations issues." Finally, Randolph stated that "[a]fter amendment, and as appropriate, Randolph will move for remand or transfer and consolidation with one of the other class actions" filed in the Southern District of Texas, Galveston Division or the Middle District of Florida, Tampa Division.
Id. at 3 (emphasis added).
Id. and n. 1.
On September 30, 2002, the District Court entered an Order rejecting the portion of the undersigned's report that recommended denying plaintiff's motion for leave to amend the first amended complaint based on Crosley. The Order provided that plaintiff's amended complaint be filed fourteen days from the date of the Order or the case would be dismissed "without prejudice to plaintiff pursuing any available remedies in state court." On September 30, 2002, the District Court entered an Order accepting the remainder of the undersigned's report and granted Oxmoor's motion to dismiss on the basis there was no implied private right of action under the Federal Unauthorized Merchandise Act; plaintiff's motion for hearing was denied; and plaintiff's motion for class certification was denied as moot.
The docket sheet reflects that the Order was entered on September 27, 2002, but Order was signed on September 30, 2002.
Docket no. 25.
Id.
Docket no. 26.
On October 11, 2002, Randolph filed a motion for leave to file a second amended complaint. Oxmoor did not respond to the motion. On October 11, 2002, plaintiff also filed a motion to transfer venue pursuant to 28 U.S.C. § 1404 (a) to the Middle District of Florida, Tampa Division. In brief, Randolph seeks to consolidate this action with a case pending in the Florida Middle District styled Robert Osterhout, et al. v. Oxmoor House Inc., Civil No. 02-CA-1355. Oxmoor filed a response and Randolph filed a reply. On October 28, 2002, Oxmoor filed a motion for a more definite statement of Randolph's claims. Plaintiff has filed a response. This report addresses the pending motions to amend, to transfer and for more definite statement.
Docket no. 28.
Docket no. 27 at 1-2.
Id.
Docket nos. 29 and 32.
Docket no. 35.
Docket no. 36.
III. ISSUES
1. Whether plaintiff should be granted leave to file a second amended complaint
2. Whether venue should be transferred to the United States District Court for the Middle District of Florida, Tampa Division
3. Whether plaintiff needs to provide a more definite statement of the state law claims
IV. ARGUMENT AND ANALYSIS
A. RANDOLPH'S MOTION TO FILE SECOND AMENDED COMPLAINTOn September 30, 2002, the District Court entered an Order rejecting the portions of the recommendation and alternative recommendation that Randolph's motion for leave to file a second amended complaint be denied. The District Court noted that the undersigned's recommendation "was based in part on the fact plaintiff has already amended once as a matter of course and in the current briefing appeared to ask for leave to amend as an aside without showing sufficient reason to amend again to add a new federal claim." But, the District Court found merit in Randolph's arguments, as raised in her objections to the undersigned's recommendation, that dismissal without leave to amend could create statute of limitations problems for some potential class members:
Plaintiff claims that by filing when she did in state court, she tolled limitations for an estimated 200,000 to 300,000 potential class members whose rights are related to the pre-July 1, 1998 advertising copy. Plaintiff asserts that these rights would not be jeopardized if leave to amend were granted and the case remanded should plaintiff elect not to plead another federal cause of action. Plaintiff urges this Court to allow her to amend to preserve without controversy the important statute of limitations issues. Plaintiff contends that after amendment and as appropriate she will move for remand or transfer and consolidation with one of the other pending class actions.
Docket no. 25.
Id.
Id. As the issue was not raised, the District Court's Order should not be construed as a decision on the merits of whether plaintiff has satisfied the statute of limitations in bringing her claims.
Docket no. 25 at 2-3 (emphasis added).
Accordingly, the District Court allowed plaintiff leave to amend.
Plaintiff Mary Ann Randolph has now filed a motion for leave to file a second amended complaint pursuant to the September 30, 2002 Order. The second amended complaint alleges no new federal claim and continues to allege a claim under 39 U.S.C. § 3009. In addition, plaintiff appears to allege violations of statutes from forty-nine states and the District of Columbia. Randolph also re-urges the class action allegations. Defendant Oxmoor House, Inc. has not objected to the motion to amend.
Docket no. 28, attached second amended complaint at 2 ("Violations of Law; Federal Unordered Merchandise. 4. Oxmoor has violated the Federal Unauthorized Merchandise Statute, which prohibits the sending of unordered merchandise, unless accompanied by certain disclosures absent from any of Oxmoor's missives. The statute also prohibits Oxmoor's dunning for payment for unordered merchandise. 39 U.S.C. § 3009.").
Id. at 2-7. Plaintiff did not list laws from Kansas that may have been violated.
Id. at 7-9.
In light of the District Court's September 30, 2002 Order allowing plaintiff to tender a second amended complaint, the un-opposed motion for leave to file an amended second complaint should be granted and the second amended complaint should be filed. But, to the extent the second amended complaint re-asserts a claim under § 3009, such a cause of action should be stricken from the second amended complaint and considered a nullity in light of the District Court's September 30, 2002 Order which dismissed the § 3009 cause of action asserted in the first amended complaint for the reason there is no private right of action under § 3009. Accordingly, as discussed further below, the only claims asserted in the second amended complaint are state law claims.
B. RANDOLPH'S MOTION TO TRANSFER VENUE
1. Supplemental Jurisdiction
The ultimate question presented by plaintiff's motion to transfer this case is whether the District Court has jurisdiction and otherwise should exercise the power to transfer Randolph's remaining state law claims as requested. As recited above, plaintiff initially filed her case in a state court and asserted causes of action based on state, not federal law. Defendant removed the case on the basis of diversity of the parties. Randolph then "abandon[ed]" and voluntarily dismissed the state claims alleged in her original complaint when she amended her complaint to assert only a federal claim under § 3009. Subsequently, the District Court dismissed the federal claim under § 3009, the only cause of action alleged in the first amended complaint.
Plaintiff stated: "In her First Amended Complaint sought to be filed in this Court, Randolph abandons the state statutes in favor of the similar federal statute, 39 U.S.C. § 3009, the Federal Unauthorized Merchandise Statute" (docket no. 4 at 2).
Plaintiff has now amended her complaint a second time to assert claims under the laws of multiple states and the District of Columbia and requests that the case be transferred to federal court in Florida. It could be argued that the Court lacks subject matter jurisdiction over the state law claims because Randolph has merely reasserted the dismissed federal claim and alleged federal question jurisdiction; if the Court lacks federal question jurisdiction, since no new federal claim was asserted, the Court arguably cannot assert supplemental jurisdiction over the state claims pursuant to 28 U.S.C. § 1367. But, because plaintiff sought leave to amend prior in a pleading filed before the District Court dismissed the federal claim and because the District Court granted plaintiff leave to amend simultaneously with the dismissal Order, in the interests of fairness and in furtherance of the District Court's Order allowing plaintiff to tender a second amended complaint, the Court construes the second amended complaint as adding state claims that are supplemental to the now-dismissed federal claim under § 3009.
As noted, the second amended complaint does not allege diversity jurisdiction, 28 U.S.C. § 1332. See docket no. 28, second amended complaint at 1. The second amended complaint, or for that matter any prior petition or complaint, asserts no factual basis from which the Court could conclude that the amount in controversy element of diversity jurisdiction is satisfied by plaintiff's request for damages. Moreover, when the case was initially removed from state court on the basis of diversity, Randolph argued that removal was not proper because the amount in controversy was not satisfied. Docket no. 4 at 1-2. Specifically, plaintiff argued that her actual damages and/or punitive damages could not be aggregated with those of the potential class members; her actual and punitive damages and attorney's fees could not be aggregated; the attorney's fees in the case could not be attributed solely to plaintiff; and there is no evidence to establish that complying with an injunction would cost Oxmoor $75,000 or more. Id. The Court finds plaintiff's arguments well taken. See Snyder v. Harris, 394 U.S. 332, 338, 89 S.Ct. 1053, 1057 (1969) (separate and distinct claims of class members cannot be aggregated to satisfy jurisdiction); HD Tire and Automotive-Hardware, Inc. v. Pitney Bowes, Inc., 227 F.3d 326, 328-331 (5th Cir. 2000) (evidence did not show amount in controversy was satisfied by aggregating plaintiff's actual and punitive damages; punitive damages of class members could not be aggregated; attorney's fees attributed to the putative class as whole would be allocated pro rata),cert. denied, 122 S.Ct. 214 (2001). With regard to whether defendant's costs resulting from compliance with an injunction can be considered in determining the amount in controversy, Oxmoor has presented no evidence to show its potential costs. In sum, there is no basis for the Court to conclude that diversity jurisdiction, not alleged in the second amended complaint, exists.
When a district court dismisses all claims over which it had original jurisdiction, the court has the discretion to retain supplemental jurisdiction over any remaining state law claims. If a court declines to retain supplemental jurisdiction over state claims initially filed in federal court, the claims must be dismissed without prejudice. If, however, the case was removed to federal court, but the basis of original jurisdiction no longer exists, the court also has the discretion to remand the state claims to "accommodate the values of economy, convenience, fairness, and comity[.]" Should the court retain supplemental jurisdiction, the case could, "for the convenience of parties and witnesses, in the interest of justice," be transferred to "any other district or division where the it might have been brought."
Carnegie-Mellon Univ. v. Cohill, 484 U.S. 343, 350, 108 S.Ct. 614, 619 (1988).
Id. at 351 108 S.Ct. at 619; Giles v. NYL Care Health Plans, Inc., 172 F.3d 332, 339 (5th Cir. 1999).
Although this case has features of both a removed case and an original federal case, because the case was initially removed to federal court, the case should be treated as a removed case. The basis of original federal jurisdiction, whether diversity or federal question, no longer exists. Therefore, the District Court has the discretion to retain jurisdiction and transfer the case as Randolph requests. Alternatively, the District Court has the discretion to refuse supplemental jurisdiction and remand the state claims to the state court or dismiss the state claims without prejudice. Given plaintiff's motion, the decision of whether to retain supplemental jurisdiction turns in part on whether she has sufficiently established a basis for transferring the case to a Florida district court.
2. Summary of Arguments
Randolph has moved to transfer venue under 28 U.S.C. § 1404 (a) to the Middle District of Florida, Tampa Division, so that the case may be consolidated with another similar case. Plaintiff asserts:
Docket no. 27.
Plaintiff's counsel in the three federal actions have made an agreement to jointly prosecute the claims against defendant Oxmoor House. Oxmoor House has significant presence and facilities in Tampa, including defendant's "Order Fulfillment Center" that is the geographical origin of the alleged scheme. Defendant's Order Fulfillment Center generates the bills, correspondence, and dunning letters that are the subject of these actions.
Id. at 2.
Plaintiff alleges that "Oxmoor House has either relocated its principal office to Tampa or is in the process of doing so" and that counsel, both the lead defense and plaintiff's counsel in the Florida case, are located in Tampa. Plaintiff contends the transfer is appropriate "[f]or the convenience of the parties, their counsel, and witnesses, many of whom are located in Tampa[.]" Plaintiff also contends transfer will prevent statute of limitations issues that would be raised by a dismissal. Plaintiff alleges that "Tampa is a venue where this case might have been brought, and in fact has been brought, and the Court there will have subject matter and personal jurisdiction over all the parties." Plaintiff further alleges that: the Tampa court would not be burdened because another class action against Oxmoor has been filed there; transfer will effect judicial economy, avoid duplicative litigation, and prevent the waste of money and time; and the docket in Tampa is much less congested than the docket in this district. Finally, plaintiff asserts that consolidation of the cases is feasible because plaintiff's counsel has agreed to joint prosecution of the claim, and little has changed in this case since it was filed while the Tampa case is just underway.
Id.
Id.
Id.
Id.
Id. at 3.
Id.
Oxmoor opposes transfer of this case, arguing that Randolph has not satisfied her burden as the party seeking a transfer under § 1404(a) because she has provided no "discovery, affidavit, or other proof to support her conclusory assertion that transfer is appropriate based on the convenience of the parties or witnesses." In particular, defendant argues that plaintiff is a resident of San Antonio, Texas with no evidence of connections to Florida, and Oxmoor's operations and management are located in Birmingham, Alabama, such that any relevant witnesses will be in those locations and not Florida. Moreover, Oxmoor asserts that Randolph has not identified any witness who might be inconvenienced by testifying in San Antonio or provided evidence showing that Florida would be more convenient to any witness. Oxmoor contends that the alleged wrongful conduct occurred in Birmingham because "every significant aspect of the operation of Oxmoor House's business is directed and managed by Oxmoor personnel in Birmingham, Alabama." Oxmoor notes the evidence that the company's only connection with Florida is a third party vendor in Tampa who began receiving and processing Oxmoor House's mail in May 2001. Oxmoor argues that Randolph's sixteen-month delay in filing the motion should preclude a transfer because the parties have expended time and effort in discovery, production, and briefing and the Court has expended resources and time in resolving the federal question issue in this case. Defendant notes that an answer in the Florida case was not even due until November 8, 2002 and that the Rule 26(f) conference had not taken place at the time the response was filed. Oxmoor argues because Randolph selected the Texas forum upon filing this case, her "blatant attempt to forum shop" for a more favorable forum after the adverse ruling on her federal claim should be disallowed. Oxmoor contends that the Florida court has no advantage over a Texas court in addressing plaintiff's state law claims. Finally, Oxmoor argues that Randolph is not entitled to rely on the convenience of the Oxmoor and its witnesses or the location of some attorneys as grounds to justify transfer.
Docket no. 29 at 3 and 8.
Id. at 5 and 8.
Id.
Id. at 5.
Id. at 8.
Id. at 4.
Id.
Id. at 5.
Id.
Id. at 8-9. Oxmoor notes that plaintiff's counsel is also located in San Antonio, Galveston, Texas, and San Diego, California. Oxmoor's co-counsel is located in San Antonio. Id. at 9.
In reply, Randolph notes that Oxmoor initially "removed this case while only state law claims were made [and] now wants the case remanded so it will face multiple state and federal court suits instead of one federal court suit in Florida." Plaintiff contends that the Florida case will continue even if this case is remanded and argues that Oxmoor "should welcome the opportunity" to cut costs, for consistency and efficiency, and to litigate in its new hometown of Tampa. Plaintiff argues that transfer and consolidation in cases such as this are encouraged by the "Manual for Complex Litigation." Plaintiff asserts that "what Oxmoor really wants is to use this Court as a pawn to execute its divide and conquer strategy." Further, plaintiff addresses several of Oxmoor's allegedly misleading arguments. In particular, Randolph argues that:
Docket no. 32 at 1.
Id.
Id. at 2.
Id.
• the possibility of consolidation did not arise until the recent filing of the Florida case;
• Oxmoor has not explained why transfer would be a waste given the meager discovery in this case and Oxmoor has not filed an answer;
• the agreements between plaintiffs' counsel in the three pending federal cases were made prior to the ruling on the motion to dismiss;
• Oxmoor authorized a release of information to the Florida attorneys in attempt to garner a global settlement agreement;
• it would be more economical and expedient for the parties to produce documents and witnesses once time and in one place; and
• Oxmoor's claim of little or no presence in Tampa is belied by advertisements and order cards that are returnable to Tampa and by a website that shows customer service for some Oxmoor products is located in Tampa.
The Court notes that Oxmoor filed an answer to plaintiff's original petition and, because the sole claim in the first amended complaint has been dismissed, Oxmoor was not required to answer that complaint. An answer to the second amended complaint will not be due until after the District Court rules on this report.
Id. at 2-3.
Finally, Randolph argues that "transfer and consolidation (as opposed to remand or dismissal) may well preserve, for the entire class, the statute of limitations tolled for the class when Mrs. Randolph filed her case."
Id. at 3-4.
3. Analysis
Section 1404(a) provides that "[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." The decision to transfer venue under § 1404(a) lies within the sound discretion of the court. The party seeking a transfer of venue has the burden of demonstrating that factors weigh in favor of the transfer. The factors include the following:
§ 1404(a).
Peteet v. Dow Chem. Co., 868 F.2d 1428, 1436 (5th Cir. 1989),cert. denied sub nom, Dow Chem. Co. v. Greenhill, 493 U.S. 935, 110 S.Ct. 328 (1989); Barnett v. Kirby Inland Marine, Inc., 202 F. Supp.2d 664, 666 (S.D. Tex. 2002).
Peteet, 868 F.2d at 1436; N2 Consulting, LLC v. Engineered Fastener Co., No. 3-02-CV-0308-BD, 2002 WL 31246770, at * 1 (N.D. Tex. Oct. 2, 2002); Barnett, 202 F. Supp.2d at 666.
(1) the availability and convenience of the witnesses and parties; (2) the availability of process to compel the attendance of unwilling witnesses; (3) the cost of obtaining unwilling witnesses; (4) the relative ease of access to sources of proof; (5) the place of the alleged wrong; (6) the possibility of delay and prejudice of the case is transferred; and (7) the plaintiff's right to choose its forum.
N2 Consulting, 2002 WL 31246770, at * 1; Barnett, 202 F. Supp.2d at 666-67 (adding as factor location of counsel).
A motion to transfer venue under § 1404(a) is not subject to a filing deadline, but it must be filed with "reasonable promptness."
Peteet, 868 F.2d at 1436; N2 Consulting, 2002 WL 31246770, at * 2.
Oxmoor does not challenge Randolph's conclusory statements that venue, subject matter jurisdiction, and personal jurisdiction are proper in Tampa, Florida such that plaintiff's case could have initially been brought there. Nevertheless, even assuming this case could have been brought in Tampa, the record and Randolph's scant evidence do not satisfy her burden to establish that, under the above factors, a transfer is necessary to further the interests of justice.
In weighing the factors relevant to transfer, the Court notes that convenience of witnesses is commonly regarded as the most important factor when consideration is given to transferring a case under § 1404(a). When seeking transfer on that basis, a party "must specifically identify the key witnesses and outline the substance of their testimony." Although Randolph has contended that transfer is necessary for the convenience of the witnesses, the declaration of attorney Benjamin R. Bingham, the only evidence plaintiff has offered, does not discuss or identify potential witnesses. Because Randolph has not met her burden to show who the witnesses might be or what testimony they might offer, the Court cannot conclude that transfer to Florida would be more convenient for the witnesses; process is more available in Florida for compelling unwilling witnesses; or the costs of obtaining the testimony of unwilling witnesses would be less in Florida. Therefore, these factors weigh against transfer.
N2 Consulting, 2002 WL 31246770, at * 3; Barnett, 202 F. Supp.2d at 668.
N2 Consulting, 2002 WL 31246770, at * 3 (citing Dupre v. Spanier Marine Corp., 810 F. Supp. 823, 825 (S.D. Tex. 1993)); Barnett, 202 F. Supp.2d at 668 ("At an absolute minimum, a Defendant must identify key witnesses and provide a brief summary of their likely testimony in an effort to demonstrate to the Court why it would be inconvenient for them to testify in Galveston.").
Docket no. 32, attachment.
Randolph also has asserted that transfer would be convenient for the parties and for their attorneys, some of whom are located in Tampa. But, plaintiff has offered no explanation for why prosecuting this case in Florida would be more convenient for her when the record reflects she is a resident of Bexar County, Texas, and she is represented by counsel from San Antonio. Relatedly, Randolph contends that Oxmoor either has relocated or is in the process of relocating its business to Florida, and attachments to Mr. Bingham's declaration reflect that order cards included in some October and November 2002 magazines for Oxmoor publications bear a Tampa, Florida mailing address. In addition, Mr. Bingham declared that Oxmoor's website listed a Tampa address for some Oxmoor customer services. But, Oxmoor has offered the affidavit of its publisher, Brian Carnahan, which shows that Oxmoor is a Delaware corporation with its principal place of business in Alabama. Mr. Carnahan also testified that Oxmoor has no employees in Florida; is not registered to do business in Florida; and is not planning to relocate any portion of the business to Florida. Mr. Carnahan testified that prior to late 2000, an independent contractor in Tampa was responsible for printing and mailing Oxmoor bills and that since May 2001, Oxmoor has outsourced certain initial mail processing functions to the same contractor. The record reflects that Oxmoor, in this case, is represented by counsel from San Antonio. Randolph has offered no evidence to show that any party to the instant case is relying to a great extent on Florida counsel. Because the Court cannot conclude from the evidence that transfer to Florida is more convenient to either party or to counsel, this factor weighs against transfer.
Docket no. 1, petition.
Docket no. 32, signature.
Id., attachments to declaration.
Id.
Docket no. 29, exhibit 1.
Id.
Id.
Id., signature.
The location of Randolph's alleged injury also weighs against transfer. Although plaintiff argues that Oxmoor's facilities in Florida are the "geographical origin of the alleged scheme," the evidence of a Florida connection, as discussed above, includes order cards and a website showing a Tampa address. Randolph has not explained how order cards from 2002 magazines or a current website relate to claims that allegedly arose sometime before June 15, 2001. Oxmoor argues that the place of the alleged wrong is Birmingham, Alabama and has presented Mr. Carnahan's testimony that for at least the last five years: no books have been printed or shipped from Florida; no promotional pieces have been printed or mailed from Florida; the advance notices were printed and mailed from Georgia; and all customer service was handled in Alabama. In addition, Mr. Carnahan testifies that "all material aspects of the promotion and publication of its books" and all significant decisions occur in Alabama. Independent contractors in Florida and New York have/are printing and mailing Oxmoor bills and the Florida contractor initially processes some of Oxmoor's incoming mail by entering information into a computer. But, all decisionmaking regarding the billing or based on gathered information originates in Alabama. Because Randolph has not established a connection between her alleged injuries and Florida, this factor weighs against transfer.
Docket no. 29 at 5.
Id., exhibit 1.
Id.
Id.
Id.
With respect to the remaining factors, either Randolph has failed to establish the importance of the factor or the factor does not weigh for or against transfer. Specifically, plaintiff has not established that any documents or other evidence are more easily accessible in Florida. Given the limited discovery in the case, that a class has not been certified, and no scheduling deadlines have been set, any delay or prejudice caused by a transfer would be minimal. As for Randolph's choice of venue, she has chosen Texas in this case and, apparently, Florida in another case. Other factors have also been considered by the Court. For instance, the Court considered Randolph's assertion that counsel for plaintiffs in this and two other cases have agreed to jointly prosecute the claims against Oxmoor and notes that defendant has apparently not consented to such a joint prosecution. In addition, Randolph has not established that the claims in the other cases are so similar to plaintiff's remaining state claims that joint prosecution would be feasible. Randolph argues that transfer, as opposed to dismissal, "will preserve the statute of limitations for the proposed class of Oxmoor House customers, tolled by Mrs. Randolph's case," but plaintiff does not argue that the benefits of transfer outweigh those of a remand to state court. In that regard, the Court notes that Randolph's remaining claims are governed by state law, that plaintiff originally sought to have a Texas state judge decide claims based on the law of Texas and other states, and that a Texas court is "equally competent" to address plaintiff's state claims, whether arising under Texas law or the law of any other jurisdiction.
As noted, plaintiff requests transfer of this case to the Florida federal court presiding over Robert Osterhout, et al., v. Oxmoor House, Inc., Civil No. 02-CA-1355 (docket no. 27 at 1-2). It appears that Robert Osterhout and Gordon Sanderson are the named plaintiffs in the Florida federal case and they seek to pursue claims on behalf of themselves and all others similarly situated. Plaintiff Randolph does not allege that she is a named plaintiff in the Florida federal case and, therefore, apparently would be within the class of similarly situated individuals and, as such, her interest in the Florida federal case is particularly dependent upon the class certification decision to be made in the Florida federal case. Because the report assumes that plaintiff has chosen Florida as a venue, whether or not Randolph is a named plaintiff in the Florida federal case would not change the transfer analysis set forth in this report.
See Giles, 172 F.2d at 339 (affirming remand of state claims and federal ERISA preemption defense and explaining, "But state courts, being of equal dignity with federal courts, are equally competent to address [a federal] defense").
Finally, the motion to transfer was filed sixteen months after Randolph brought her claims. By way of explanation, plaintiff states, "The truth is that the Tampa venue for consolidation was not available until recently." The Court notes that such a statement raises the question of whether plaintiff's claims actually could have been brought in Florida at the time this action was filed, as required for transfer under § 1404(a). In addition, as mentioned above, Randolph has not presented evidence to establish that her state claims are sufficiently similar to the claims pending in the Florida federal court such that consolidation is even feasible. Moreover, at this point in the litigation, Randolph's cause of action has yet to be certified as a class action, nor has plaintiff shown that the Florida case, or any other case against Oxmoor, has been certified as a class action, such that consolidation might be proper on that basis.
Docket no. 32 at 2.
If Randolph is not a named plaintiff in the federal Florida case and is merely a member of the yet-to-be-certified class, then, if the District Court decides to transfer this case, the record in this case should be clear that this case, of course, does not speak to the issue of whether a class should be certified in the Florida federal case.
In sum, after weighing the relevant factors and considering the evidence, or lack thereof, the Court cannot conclude that it would be proper to transfer venue for convenience or in the interests of justice to the Middle District of Florida.
4. Remand
Ms. Randolph has expressed concern that if the District Court declines to retain supplemental jurisdiction and her pendent claims are dismissed, even without prejudice, the statute of limitations may bar the claims of some potential class members. Indeed, it would appear that a concern about the claims which might be brought on behalf of others not yet joined to this case was the primary concern of the District Judge when he allowed plaintiff to file a second amended complaint in this court rather than dismissing the case without prejudice.
In Goode, et al. v. Comal Independent School District, a case involving federal and state claims, the District Court recently noted that dismissal of the federal claims "alone does not divest [the Court] of jurisdiction." The Court explained:
No. SA-02-CA-437-FB, October 18, 2002, docket no. 26.
Id. at 5.
Instead, this Court is given discretion in determining whether to exercise supplemental jurisdiction over the remaining state law claims. Bass v. Parkwood Hosp., 180 F.3d 234, 246 (5th Cir. 1999). However, the general rule in a situation where the court dismisses all federal claims before trial is "to dismiss any pendent claims," and the dismissal should "expressly be without prejudice so that the plaintiff may refile his claim in the appropriate court" Id.; McClelland v. Gronwaldt, 155 F.3d 507, 520 (5th Cir. 1998) (recognizing general rule and acknowledging that Supreme Court has "counseled that the dismissal of all federal claims weighs heavily in favor of declining jurisdiction;" federal court to consider "judicial economy, convenience, fairness, and comity in order to decide whether to exercise jurisdiction over pendent state-law claims; "when a balance of these factors indicates that a case properly belongs in state court, as when the federal-law claims have dropped out of the lawsuit in its early stages and only state-law claims remain, the federal court should decline the exercise of jurisdiction" quoting Carnegie-Mellon Univ. v. Cohill, 484 U.S. 343 (1988)). Here, because the dismissal of the federal claims has come only five months after the case was filed, this Court accepts the recommendation that the pendent state-law claims be dismissed without prejudice.
Id. at 5-6.
Unlike the instant case, Goode was not removed to federal court and remand was not an option available to the District Court when it dismissed the federal claims. The United States Supreme Court has held that when a case has been removed to federal court and the basis for federal jurisdiction is eliminated, as an alternative to dismissal without prejudice, a district court may remand pendent claims to the state court from which the case was removed. The Supreme Court explained:
Carnegie-Mellon, 484 U.S. at 351, 108 S.Ct. at 619.
Id. at 357 108 S.Ct. at 623.
[A] remand will be preferable to a dismissal when the statute of limitations over the plaintiff's state-law claims has expired before the federal court has determined that it should relinquish jurisdiction over the case. In such a case, a dismissal will foreclose the plaintiff from litigating the claims. This consequence may work injustice to the plaintiff: although he has brought his suit in timely manner, he is time barred from pressing his case. Equally, important, and more easily overlooked, the foreclosure of the state-law claims may conflict with the principle of comity to States. The preclusion of valid state-law claims initially brought in a timely manner in state court undermines the State's interest in enforcing its law. The operation of state statutes of limitations thus provides a potent reason for giving federal district courts discretion to remand, as well as to dismiss removed pendent claims.
Id. at 352 108 S.Ct. at 620.
Randolph has acknowledged that, in the event she elected not to plead a federal cause of action in her second amended complaint, remand of the case to state court, as opposed to dismissal without prejudice, is an appropriate disposition. In light of the Supreme Court's test, here, the federal claim has been dismissed at an early stage in the litigation. The parties have conducted only limited discovery, no scheduling Order has been entered, and a trial date has yet to be determined. Thus, the undersigned recommends that the District Court decline to exercise supplemental jurisdiction over Randolph's pendant state law claims. In light of Randolph's statute of limitations concerns and Supreme Court discussion set forth above, the undersigned recommends that Randolph's state law claims be remanded to the 166th Judicial District Court of Bexar County Texas, the Court from which this case was removed.
See docket no. 23 at 2-3; see also text associated with note 35, above.
C. OXMOOR'S MOTION FOR MORE DEFINITE STATEMENT
Oxmoor has filed a motion for more definite statement of plaintiff's claims as alleged in the second amended complaint. Specifically, Oxmoor complains that the second amended complaint
Docket no. 35.
purports to assert claims against Oxmoor House, Inc. under 111 different statutory schemes consisting of one or more statutes from each of the 50 states and the District of Columbia. In so doing, Plaintiff has provided nothing more than a list of citations to a multitude of statutory provisions. Consequently, her pleading is so vague and ambiguous that Oxmoor cannot reasonably respond to it.
As noted above, plaintiff did not list any Kansas statutes that may have been violated.
Docket no. 36 at 1.
Randolph has responded to the motion and asks the Court to defer a ruling until a decision is made on her motion to transfer venue because such ruling "may impact what amendments are appropriate." Alternatively, plaintiff states she will amend her complaint but requests "an order requiring her to amend within 30 days of the Court's order directing a more definite statement.
Docket no. 36.
Id.
In light of the above recommendation that the case be remanded to the state court, the Court recommends that Oxmoor's motion for more definite statement should be denied without prejudice to again presenting any request for a more definite statement to the presiding state court to decide the specificity and particularity necessary to plead the state claims.
V. RECOMMENDATION
Based on the foregoing analysis, it is recommended that:
(a) Randolph's motion for leave to file a second amended complaint should be GRANTED and the second amended complaint appended to the motion should be filed;
Docket no. 28.
(b) to the extent the second amended complaint re-alleges a claim under 39 U.S.C. § 3009, the claim should be considered as STRICKEN from the second amended complaint and considered a nullity in light of the District Judge's Order holding that there is no private right of action under § 3009 and dismissing the cause of action based on § 3009 from the first amended complaint;
Id. at 2.
(c) Randolph's motion to transfer venue should be DENIED;
Docket no. 27.
(d) Randolph's supplemental state law claims and any motion for class certification imbedded in the second amended complaint should be REMANDED to the 166th Judicial District Court of Bexar County Texas, the Court in which plaintiff filed her original complaint at the inception of this lawsuit; and
Docket no. 28 at 2-9.
(e) Oxmoor's motion for more definite statement should be DENIED without prejudice to consideration or reconsideration by the presiding State Court to decide the specificity and particularity necessary for pleading state claims.
Docket no. 35.
Any other requests for relief should be DENIED.