Opinion
No. 02 Civ. 2612 (PKL)
October 21, 2002
Attorneys for Plaintiff: MOUND, COTTON, WOLLAN GREENGRASS, New York, N.Y., Philip C. Silverberg, Esq., Mark S. Katz, Esq.
Attorney for Defendants: MCKENNA LONG ALDRIDGE LLP, Washington, D.C., Joseph F. Dennin, Esq.
OPINION AND ORDER
Plaintiff Royal Insurance Company of America ("Royal") commenced this action seeking declaratory judgment to determine the respective rights and obligations of the parties pursuant to a first-party insurance contract issued by Royal to the defendants Tower Records, Inc. ("TRI") and MTS, Inc. ("MTS"). Royal filed this declaratory judgment action pursuant to 28 U.S.C. § 2201 in April 2002, and then filed an amended complaint in May 2002. In July 2002, MTS answered the amended complaint and brought a counterclaim against Royal seeking declaratory judgment and claiming breach of contract and breach of the implied duty of good faith and fair dealing. MTS and TRI (collectively "Tower") have moved to transfer this action to the Eastern District of California, pursuant to 28 U.S.C. § 1404(a). For the reasons set forth below, Tower's motion is granted.
I. BACKGROUND
Plaintiff Royal is an Illinois corporation with its principal place of business in Illinois. Defendant MTS is a California corporation with its principal place of business in West Sacramento, California. MTS owns and operates the Tower Records retail stores across the country, and sells and distributes music, video and book products in these stores, as well as through its internet site. Defendant TRI is a Delaware corporation that has retail stores across the United States and shares MTS's California headquarters as its principal place of business. This Court has original subject matter jurisdiction pursuant to 28 U.S.C. § 1332(a)(1), inasmuch as there is diversity of citizenship between plaintiff and defendants and the amount in controversy exceeds $75,000, exclusive of interest and costs.
Royal sold Tower an insurance policy (hereafter "the Policy") that provided first-party insurance coverage to Tower covering the period of August 1, 2001 to August 1, 2002. The Policy provides various types of coverage, including specific coverage for: (a) actual loss sustained by Tower Records as a direct result of damage to real and personal property not owned by Tower caused by an insured peril which results in any loss of income; and (b) actual loss sustained by Tower, not exceeding two consecutive weeks, when as a direct result of damage to or destruction of property by an insured peril, access to Tower's premises is specifically prohibited by order of civil authority. See Affidavit of Barbara A. Reynolds, sworn to on July 24, 2002 ("Reynolds Aff."), ¶ 6 Exh. A. The Policy was procured through an insurance broker in Arizona, Barbara Reynolds at Summit Global Partners of Arizona, Inc. ("SGP of Arizona"). Royal underwrote the Policy through its office in San Francisco, California. See id. ¶ 7. Reynolds communicated with Royal's representative in San Francisco with respect to the application for, and purchase of, the Policy. See id. The Policy was delivered, through SGP of Arizona, to Tower's California office. See id. ¶ 8. Shortly after the terrorist attack of September 11, 2001, Tower notified Royal of a claim for coverage under the Policy for loss of income in its retail, internet and distribution businesses sustained as a result of the damage caused by the events of September 11, 2001.
In October 2001, Tower submitted a claim for its September 11th losses, which included losses from eighty-eight Tower Records retail stores and other losses sustained by MTS. Of the eighty-eight stores with losses through February 2002, forty-seven of those stores are located in California with the other stores spread among eighteen other states and the District of Columbia, including nine stores in New York. See Affidavit of Bernadette M. Haase, sworn to on July 24, 2002("Haase Aff. I"), Exh. C. It is undisputed that no Tower Records stores sustained physical damage as a result of the terrorist attack. See Plaintiffs Amended Complaint for Declaratory Relief and Jury Demand ("Am. Compl.") ¶ 18; Memorandum of Law in Support of Plaintiffs Opposition to Defendant's Motion to Transfer Venue ("Royal Memo") at 16. In March 2002, Tower submitted a preliminary claim schedule in support of its claim that set forth losses totaling $5,154,995. See Affidavit of Raymond Richter, sworn to on August 7, 2002 ("Richter Aff."), ¶ 6; Am. Compl. ¶ 17. Royal then denied coverage, and filed this declaratory judgment action to determine the rights and obligations of the parties. MTS then counterclaimed, alleging, inter alia, breach of contract and the tort of breach of implied duty of good faith.
II. DISCUSSION
Tower argues that the Court should transfer this action to the Eastern District of California pursuant to 28 U.S.C. § 1404(a) because that judicial district is substantially more convenient for the parties and witnesses at issue in this action, and a transfer to that district would be in the interests of justice. Royal opposes such a transfer, asserting that Tower has failed to meet the burden of demonstrating that the balance of convenience to the parties and the interest of justice weighs in favor of a transfer.
Section 1404(a) provides that, "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). Accordingly, a motion to transfer pursuant to this section is governed by a two-part test: (1) whether the action to be transferred is one that "might have been brought" in the district to which the movant seeks to have it transferred; and (2) whether the convenience of parties and witnesses and the interests of justice favor transfer. See Flaherty v. All Hampton Limousine Inc. 2002 U.S. Dist. LEXIS 15171, at *3(S.D.N.Y. August 16, 2002); American Alliance Ins. Co. v. Sunbeam Corp., 1999 U.S. Dist. LEXIS 713, at *10(S.D.N.Y. Jan 28, 1999). An action "might have been brought" in another forum if the transferee forum would have had personal jurisdiction over the defendants at the time the action was commenced and if venue properly lies there. See Nabisco, Inc. v. Brach's Confections. Inc., 2000 U.S. Dist. LEXIS 16168, at *4(S.D.N.Y. Nov. 8, 2000). In this case, the parties do not dispute that the first prong of this test is satisfied, since the action could have been commenced in the Eastern District of California. Indeed, the Eastern District of California is an appropriate forum pursuant to the relevant venue provision, 28 U.S.C. § 1391, because it is the district in which TRI and MTS share the same principal place of business and in which a significant portion of the events underlying the suit occurred.
The key inquiry, then, is whether the proposed transfer will promote convenience and fairness. See Nabisco. Inc., 2000 U.S. Dist. LEXIS 16168, at *4. On a motion under § 1404(a), the movant bears the burden of demonstrating that an alternative forum is available and that such a forum is clearly more appropriate than the initial forum. See id. at *3. In making this determination, a judge has "considerable discretion in adjudicating a motion for transfer according to an individualized, case-by-case consideration of convenience and fairness." Bionx Implants. Inc. v. Biomet, Inc., 1999 U.S. Dist. LEXIS 8031, at *8(S.D.N.Y. May 27, 1999) (quoting In Re Cuyahoga Equip. Corp., 980 F.2d 110, 117(2d Cir. 1992)). Courts in this Circuit consider several factors in assessing the balance of convenience and fairness: (1) the locus of the operative facts; (2) the convenience of the witnesses; (3) the location of relevant documents and the relative ease of access to sources of proof; (4) the convenience of the parties; (5) the availability of process to compel attendance of unwilling witnesses; (6) the relative means of the parties; (7) a forum's familiarity with the governing law, (8) the weight accorded a plaintiffs choice of forum; and (9) trial efficiency and the interests of justice based on the totality of the circumstances. See 800-Flowers. Inc. v. Intercontinental Florist. Inc., 860 F. Supp. 128, 130-31 (S.D.N.Y. 1992)(Leisure, J.); Nabisco, 2000 U.S. Dist. LEXIS 16168, at *4
1. Locus of the Operative Facts
The first factor, the locus of the operative facts, is "traditionally an important factor to be considered in deciding where a case should be tried." See 800-Flowers, Inc., 860 F. Supp. at 134. Defendants have set forth sufficient evidence to establish that the majority of operative facts in this case occurred in California. "In determining the locus of operative facts, a court must look to the `site of events from which the claim arises.'" Avemco Ins. Co. v. GSF Holding Corp., 1997 U.S. Dist. LEXIS 13716, at *18(S.D.N.Y. Sept. 11, 1997) (citing 800-Flowers, Inc., 860 F. Supp. at 134). The fundamental issue in this action is the interpretation and application of the insurance policy issued by Royal to Tower. When determining the locus of operative facts in a declaratory judgment action concerning the interpretation of an insurance policy contract, this Court has considered where the insurance contract was made. See Avemco, 1997 U.S. Dist. LEXIS 13716, at *18. In Avemco, the Court granted the defendant's motion to transfer the declaratory judgment action to New Jersey in part because the Court determined that the locus of operative facts existed in that state, since the insurance policy at issue in the case arose as a result of telephone conversations made in New Jersey and correspondence sent and received in New Jersey. See id. Moreover, the action in Avemco presented insurance coverage issues that would likely have been decided under New Jersey contract law.
In determining the locus of operative facts in this case, it is clear that California, the place where the Policy was applied for, purchased, and delivered, is the locus of operative facts. Discussions about the Policy took place among Royal's San Francisco office, Tower's corporate headquarters in West Sacramento, California and the insurance broker located in Arizona. See Reynolds Aff. ¶ 7. In addition, the defendants point out certain elements on the face of the Policy that indicate that the Policy was made in California, including the listing of a San Francisco address as Royal's address on the Policy's declaration page, and the inclusion of certain endorsements in the Policy entitled "California Changes" that are specific to policies sold in California.See Defendants' Memorandum of Law in Support of Defendants' Motion to Transfer Venue ("Tower Memo") at 18; Reynolds Aff. ¶ 7. In addition, it is likely that many of the insurance coverage issues will be decided under California law, since California has the most significant contacts with the insurance contract at issue. See Olin v. Ins. Co. of N. Am., 743 F. Supp. 1044, 1048 (S.D.N.Y. 1990), aff'd 929 F.2d 62(2d Cir. 1991) (holding that New York law requires the Court to apply the law of the jurisdiction "which has the most significant contacts with the matter in dispute").
Royal argues that the locus of operative facts should lie in New York because Royal's claims adjuster adjusted Tower's claim in New York, and the terrorist attack that gave rise to Tower's claim occurred in New York. However, neither of these factors would shift the locus of operative facts from California to New York. At issue in this case is the determination of the respective rights and obligations of the parties pursuant to an insurance contract. Therefore in determining the locus of operative facts, the Court looks to the "site of the events from which the claim arises" — here, as in Avemco, that event is the execution of the contract, not the location of the incident which triggered the insurance claim. Avemco, 1997 U.S. Dist LEXIS 13716, at *18 (holding that the locus of operative facts existed in the place where the insurance contract was issued, not the location of the aircraft accident which gave rise to the insurance claim); see also Royal Sunalliance v. British Airways, 167 F. Supp.2d 573(S.D.N.Y. 2001). Moreover, the minor connection to New York represented by the plaintiffs adjustment of the claim there is insufficient to make New York the locus of operative facts. See Royal Sunalliance, 167 F. Supp.2d at 576-77(Court granted transfer to Northern District of Georgia based, in part, on its view that the minor connection to New York, represented by the plaintiffs adjustment of the claim there, was insufficient to make New York the locus of operative facts). Therefore, because New York is the locus of operative facts, this factor favors transfer.
2. Convenience of the Witnesses
The convenience of witnesses may be the most important factor in the transfer analysis under § 1404(a). See Nabisco, 2000 U.S. Dist. LEXIS 16168, at *5; Olympia Group Inc. v. Cooper Indus. Inc., 2001 U.S. Dist. LEXIS 6187, at *4(S.D.N.Y. May 14, 2001). Contrary to Royal's argument that the convenience of witnesses should not be given much consideration because this action involves "issues related solely to the interpretation of contract language," see Royal Memo at 5, this Court follows other Courts in this District in considering the convenience of witnesses to be a "crucial factor" supporting the transfer of insurance contract interpretation disputes. Avemco, 1997 U.S. Dist. LEXIS 13716, at *21(considering the location, outside of the transferor district, of a key party witness who was involved in the purchase of the insurance policy "to be a crucial factor in determining whether to transfer a dispute over contract interpretation") (citing R. Siskind Co., Inc. v. Ashworth, Inc., 1996 U.S. Dist. LEXIS 4418, at *14 (S.D.N.Y. Apr. 10, 1996) (noting as significant, for the purposes of determining convenience in a motion to transfer, the location of individuals who negotiated and concluded a contract)). In this case, the Court finds that witnesses for both parties stand to suffer some inconvenience if the other's forum choice governs, and therefore this factor is neutral in the transfer analysis.
A party seeking to transfer based on the convenience of the witnesses must provide the court with a list of probable witnesses who will be inconvenienced by the current forum and a general statement of what the witnesses' testimony will cover in order for the moving party to meet its burden of proof. See Wechsler v. Macke Int'l Trade, Inc., 1999 U.S. Dist. LEXIS 19800, *16(S.D.N.Y. Dec. 27, 1999). Here, defendants and plaintiff have both provided a list of probable witnesses who will be inconvenienced, as well as the substance of the testimony of these witnesses. Tower identifies one party witness and two non-party witnesses who reside in or near California, and for whom transfer of this case would be much more convenient. Tower argues that transfer to the Eastern District of California, where Tower's headquarters are located, would be more convenient for Bernadette Haase, Vice-President of MTS's Financial Analysis Division in West Sacramento who was primarily responsible for calculating losses at Tower's stores for purposes of the claim, as well as for any other Tower insurance or financial employees who may be needed to provide testimony, since Tower's entire domestic risk management and corporate accounting operations are located in their California headquarters. See Tower Memo at 12.
In addition, Tower identifies two non-party witnesses for whom transfer would be more convement: John Likely, an independent contractor hired by Tower to calculate certain losses that are part of Tower's claim and resides in the Northern District of California and works in Towers' West Sacramento office, and Barbara Reynolds, the insurance broker for the Policy, who resides in Scottsdale, Arizona. Generally, convenience of a non-party witness is given greater weight than a party witness. See Soto v. Bey Transp. Co., 1997 U.S. Dist. LEXIS 10473, at *10(S.D.N.Y. July 21, 1997) (Leisure, J.) (considering the convenience of a non-party witness to be a more important factor in transfer analysis than the convenience of a party witness). However, while it may be more convenient for the non-party witnesses to testify in California, they both reside outside of the transferor district and therefore their increased convenience is not attributed much weight. See Wechsler, 1999 U.S. Dist. LEXIS 198000, at *17("[T]he Court dismisses from consideration the convenience of witnesses who are located outside both the current and transferee forums."); but see Hernandez v. Graebel Lines, 761 F. Supp. 983, 988-89(E.D.N.Y. 1991) (granting transfer where the majority of witnesses are located near but not in the transferee district).
Defendants have persuasively responded to Plaintiff's argument that the testimony of Ms. Haase and Mr. Likely would be cumulative by explaining that each one has personal and distinct knowledge pertaining to the calculation of losses which makes them necessary witnesses in this action, and as such, the convenience of both shall be considered as a factor. See Royal Memo at 5-6; Defendants' Reply Memorandum in Support of Defendants' Motion to Transfer Venue ("Tower Reply") at 3.
Royal has identified three potential witness, one who does reside and work in California — Lisa Marshall, the California underwriter of the Policy — and two potential witnesses who live in New York: Ray Richter, the Royal insurance adjuster, and Michael Castillo, the accountant retained by Royal to review Tower's claim submission. See Royal Memo at 7. While it would certainly be more convenient for Richter and Castillo to testify in New York rather than California, there are as many witnesses for whom it would be more convenient to testify in California. Therefore, since there are an equal number of witnesses who reside in the transferee and transferor forums, the convenience of witnesses is a neutral factor in the transfer analysis
There are even more witnesses for whom California would be a more convenient forum if the Court were to give more consideration to the convenience of the non-party witnesses who reside outside of the Eastern District of California, but for whom transfer to California would still be more convenient than testifying in New York. Nonetheless, "any slight disparity in the numbers of witnesses is too insignificant for the Court to give weight to this factor in determining this motion". American Alliance Ins. Co. v. Sunbeam Corp., 1999 U.S. Dist. LEXIS 713, at *21(S.D.N.Y. Jan. 28, 1999) (citing Continental Ins. Co. v. Wickes Cos., Inc., 1991 U.S. Dist. LEXIS 12426(S.D.N.Y. Sept. 6, 1991)).
3. Location of Relevant Documents and the Relative Ease of Access to Sources of Proof
Tower has stated that its documents relating to the Policy and claim at issue in this litigation are located at Tower's corporate headquarters in the Eastern District of California and that most of the other relevant documents in the possession of Ms. Reynolds and Royal are more likely to be located in or near the Eastern District of California. However, a defendant's assertion that documents are located in the proposed transferee forum is entitled to little weight unless the defendant makes a detailed showing as to the burden it would incur absent transfer. See Student Advantage Inc. v. Int'l Student Exch. Cards. Inc., 2000 U.S. Dist. LEXIS 13138, at *20(S.D.N.Y. Sept. 13, 2000); NBA Props. Inc. v. Salvino, Inc., 2000 U.S. Dist. LEXIS 3799, at *24(S.D.N.Y. Mar. 27, 2000). Tower has made no such showing here. In addition, Royal has stated that most of their documents and files relating to Tower's claim are maintained in Royal's Fishkill, New York office. See Richter Aff. ¶ 13. Moreover, the location of records is "not a compelling consideration when records are easily portable." Astor Holdings, Inc. v. Roski, 2002 U.S. Dist. LEXIS 758, at *37(S.D.N.Y. Jan. 17, 2002). "In today's era of photocopying, fax machines and Federal Express," Tower and Royal's documents can easily be sent to the transferee forum. Coker v. Bank of America, 984 F. Supp. 757, 766(S.D.N.Y. 1997). Therefore, this factor is neutral.
4. The Convenience of the Parties
Courts in this District have favored transferring venue in cases such as this one, where the plaintiff does not reside in the district where it filed suit and the defendant is seeking transfer to the district in which it is headquartered, because such a transfer does not generally increase the inconvenience to the plaintiff but is much more convenient for the defendant. See Olympia, 2001 U.S. Dist. LEXIS 6187, at *2-3. Tower argues that since neither of the parties is incorporated in or maintains their principal place of business in the Southern District of New York, this is not a case where transfer merely shifts the inconveniences of litigation from one party to another; rather, Tower argues, this is a case, "where transfer would aid one party and not disadvantage its adversary." Bionx Implants Inc. v. Biomet, Inc. 1999 U.S. Dist. LEXIS 8031, at *11(S.D.N.Y. May 27, 1999); see also Tower Memo at 17. However, Royal would be inconvenienced by the transfer, to some degree, since two of Royal's witnesses would have to travel from New York to California to testify. See Royal Memo at 9. Nonetheless, since Royal is not a resident of the District in which it brought this case, but rather an Illinois corporation whose principal place of business is in Illinois, the Court will consider the extent to which a transfer to the Eastern District of California, the location of Tower's corporate headquarters, would minimize the disruption to Tower's business caused by the cross-country travel of its employees. See Olympia, 2001 U.S. Dist. LEXIS 6187, at *3.see also Aquatic Amusement Assocs. v. Walt Disney World Co., 734 F. Supp. 54, 58 (N.D.N.Y. 1990) (considering the disruption of a party's business activities that would be caused by the prolonged absence of corporate officials from corporate headquarters due to litigation). While transfer would minimize the disruption to Tower's business, that disruption is not likely to be substantial since Tower has identified only two employees who would need to make the cross-country trip to testify in New York. Therefore, this factor favors neither transfer nor retention.
5. Availability of Process to Compel Attendance of Unwilling Witnesses
Both parties agree that there does not appear to be any non-party witnesses who would be unwilling to testify. As such, the Court does not consider this factor in its transfer analysis.
6. The Relative Means of the Parties
There is no dispute in this case that both parties are corporations that conduct business on a global scale, and would have the means to conduct this suit anywhere in the United States. However, the relative means of the parties is entitled to little weight where both parties are corporations. See e.g., Student Advantage, 2000 U.S. Dist. LEXIS 13138, at *23. Therefore, the relative means of the parties does not factor into the Court's transfer analysis.
7. A Forum's Familiarity with the Governing Law
In a motion to transfer venue under § 1404(a), the court must apply the choice of law principles of the transferor court in determining which state's substantive law will apply in a diversity action. See Ferens v. Deere Co., 494 U.S. 516, 523(1990); Continental Ins. Cos. v. Wickes Cos., 1991 U.S. Dist. LEXIS 12426, at *10-11(S.D.N.Y. Sept. 6, 1991). Under New York law, courts must apply the law of the state "which has the most significant contacts with the matter in dispute." Olin Corp. v. Ins. Co. of N. Amer., 743 F. Supp. 1044, 1048(S.D.N.Y. 1990), aff'd 929 F.2d 62(2d Cir. 1991) (citing Auten v. Auten, 308 N.Y. 155, 160, 124 N.E.2d 99(1954)). In determining which state's law to apply in cases involving insurance contracts, New York courts have considered the following factors: (1) the location of the insured risk; (2) the policyholder's principal place of business; (3) where the policy was issued and delivered; (4) the location of the broker placing the policy; (5) where the premiums were paid; and (6) the insurer's place of business. See Olin at 1048-49; accord Fed. Ins. Co. v. Quantachrome Corp., 1994 U.S. Dist. LEXIS 7244, at *6(S.D.N.Y. June 2, 1994)(Leisure, J).
Following the Olin analysis, this case has several factors that support the application of California law, in that: 1) the largest portion of the risk insured by the Policy is located in California, since more than half of the Tower Records stores that suffered a loss arising out of the damage caused by the September 11th attack are located in California, and Tower's internet and distribution businesses, which suffered losses as well, were conducted from Tower's California headquarters; (2) Tower's principal place of business and corporate headquarters is in West Sacramento, California; (3) the Policy was sold by Royal's San Francisco office and delivered to Tower at its West Sacramento office; and (4) the Policy lists Royal's location as being in San Francisco. See Haase Aff. ¶¶ 12, 14; Reynolds Aff. ¶¶ 7, 8; Tower Memo at 22. Since the most significant aspects of the contract formation did take place in California, it is highly likely that California law will apply to this dispute, and therefore this factor weighs in favor of transferring this action to the Eastern District of California See e.g., Ferens, 494 U.s. at 530(holding that federal courts favor adjudication of diversity actions by a federal court that sits in the state whose substantive law will govern the case).
The only factors that do not support application of California law are the location of the broker (Arizona), the location to which premiums were paid (Georgia), and Royal's principal place of business (Illinois). None of these factors support the application of New York law, since they present no significant connection to New York, and therefore the factors which do represent a connection to California outweigh the "non-California" factors, and support the application of California law in this action.
Royal argues that the Court should not consider the applicable law as a factor in its transfer analysis because Tower has not shown any conflict between California and New York law, nor has Tower shown that California law is unclear, unsettled or difficult to apply to these circumstances.See Royal Memo at 13. While Tower does demonstrate that there are substantial differences between New York and California law on the issue of punitive damages and insurance bad faith, the applicable law factor is entitled to little weight in cases where "the governing law presents no complex legal questions and has not been shown to be unclear, unsettled or difficult." Nat'l Patent Dev. Corp. v. American Hosp. Supply Corp., 616 F. Supp. 114, 119(S.D.N.Y. 1984); S-Fer Int'l Inc. v. Paladion Partners, Ltd., 906 F. Supp. 211, 215-16(S.D.N.Y. 1995)("Even if California law governs this dispute, the legal issues involve relatively unexceptional questions of contract and fraud. If New York's choice of law rules provide that California law [applies], then a New York court will be capable of applying it."). While the Eastern District of California would be more familiar with California law, this weighs only slightly in favor of transfer since it does not appear that there are any complex or unsettled legal questions to be resolved. See Howard v. Four Seasons Hotels, 1997 U.S. Dist. LEXIS 2598, at *9 (S.D.N.Y. 1997) (transferee district court "is presumably more familiar with" that state's law, which weighs in favor of transfer)
Under New York law, punitive damages are only available where the insurer has engaged in egregious conduct aimed at the public generally, while California law does not require such a showing. See Carribean Constr. Servs. Assocs., Inc v. Zurich Ins. Co., 700 N.Y.S.2d 129, 131 (App.Div. 1999); Egan v. Mut. of Omaha Ins. Co., 620 P.2d 141, 146-47 (Cal. 1979). As for bad faith claims, there is no private cause of action under New York law, while under California law, there is a private cause of action for bad faith. See Northwestern Mut. Life Ins. Co. v. Wender, 940 F. Supp. 62, 65 (S.D.N.Y. 1996); Egan, 620 P.2d at 145.
The parties have conflicting views on the application of New York choice-of-law rules to MTS's counterclaim for bad faith breach of contract. Tower argues that New York tort choice-of-law principles would apply the law of the jurisdiction where the policyholder resides see Tower Reply at 7, whereas Royal argues that those principles would apply the law of the jurisdiction which is the "locus of the tort" see Royal Memo at 14. This Court does not need to decide which state's substantive law will apply to the bad faith claim at this juncture. The likelihood that California law will apply to the other claims in this action is sufficient to find that the factor of the forum's familiarity with the governing law weighs in favor of transfer.
8. The Weight Accorded a Plaintiffs Choice of Forum
While a plaintiffs choice of forum is generally given substantial weight, the weight given to a plaintiffs choice is substantially diminished when the plaintiff has chosen a forum that is neither its home nor the place where the operative facts of the action occurred. See Avemco, 1997 U.S. Dist. LEXIS 13716, at *18; Reeder v. Yamaha Motor Corp., 1992 U.S. Dist. LEXIS 18263, at *11(S.D.N.Y. Dec. 2, 1992). In granting the policyholder's motion to transfer the insurer's declaratory judgment action, the Avemco court gave little weight to the plaintiff insurance company's choice of forum, even though the aircraft accident that triggered the insurance claim occurred in New York, because its corporate headquarters were located outside of New York and the policyholder was not a New York resident. See Avemco, 1997 U.S. Dist. LEXIS 13716 at *19. In this case, because Royal does not reside in New York, Tower is not a New York resident, and the locus of operative facts is in California, Royal's choice of forum in the Southern District of New York is entitled to little weight.
As has been previously addressed, while there are some operative facts that occurred in New York, specifically the September 11th terrorist attack that gave rise to the insurance claim and some portion of the damage, the Court finds that the locus of the majority of operative facts pertaining to the interpretation and application of the Policy issued by Royal to Tower is in California. See Royal Sunalliance v. British Airways, 167 F. Supp.2d 573(S.D.N.Y. 2001);Avemeo, 1997 U.S. Dist. LEXIS 13716, at *18.
9. Trial Efficiency and the Interests of Justice Based on the Totality of the Circumstances
The final factor, trial efficiency and the interests of justice, relates largely to issues of judicial economy, primarily the docket conditions and calendar congestion of both the transferor and the transferee districts. See Royal Sunalliance, 167 F. Supp.2d at 578-79. Tower suggests that the calendar of the transferee district is less congested than that of the transferor district by noting that as of September 30, 2001, the caseload of the Southern District of New York was more than double that of the Eastern District of California. See Tower Memo at 24. While this factor does weigh in favor of transfer, it is not accorded much weight. See Nabisco, 2000 U.S. Dist. LEXIS 16168, at *6(citing Change v. Gordon, 1997 U.S. Dist. LEXIS 13570, at *11(S.D.N.Y. Sept. 8, 1997)); Artoptic Int'l Corp. v. Rio Optical Corp., 1992 U.S. Dist. LEXIS 9602, at * 5(S.D.N.Y. July 8, 1992) (Keenan, J.)("While relative calendar conditions are a consideration in deciding section 1404(a) motions, they are never a factor to which great weight is assigned.")
Royal also suggests that this Court is somehow "uniquely situated" to hear this action because the insurance claim arises out of damage that occurred as a result of the September 11th attack in New York. See Royal Memo at 16. Royal argues that when Congress enacted the Air Transportation Safety and System Stabilization Act ("the Act"), which created a federal cause of action for certain litigation arising out of the September 11th attack and granted the Southern District of New York original and exclusive jurisdiction over a defined category of actions, they intended for the Southern District of New York to be a forum for certain claims, like the one at issue in this case, in order to promote consistent judgments for those legitimately entitled to relief. See Royal Memo at 18. However, Courts in this District and others have repeatedly held that the Act was intended to concentrate jurisdiction in the Southern District of New York for claims brought by tort victims arising out of the September 11th attack, but was not intended to dictate jurisdiction over insurance disputes. See Int'l Fine Art Antique Dealers Show Ltd. v. ASU Int'l., Inc., 2002 U.S. Dist. LEXIS 10878, at *17 (S.D.N.Y. June 19, 2002) (holding that, "whatever [the Act's] scope, it does not create jurisdiction over an action that seeks a declaration of contractual rights under an insurance policy against which the plaintiffs have claimed . . ."); 730 Bienville Partners, Ltd. v. Assurance Co. of Am. Int'l., 2002 U.S. Dist. LEXIS 13004, at *4(E.D. La. Apr. 16, 2002) (denying motion to transfer venue to Southern District of New York where plaintiffs claim is primarily for breach of contract against an insurer for wrongful denial of coverage in connection with the closing down of airports after the September 11th attack, holding that "the Act does not intend for such claims to be filed exclusively in the Southern District of New York"). Therefore while Tower's claim is one for the loss of income as a result of the September 11th attack, this Court is not particularly "uniquely situated" to hear this action, since the issue at the heart of this case is the interpretation and application of a contract executed in California, not New York.
III. CONCLUSION
While several of the relevant considerations are neutral regarding the question of transfer, there are several factors which favor transfer, and no significant factors which favor retention. See Olympia Group, Inc. v. Cooper Indus., Inc., 2001 U.S. Dist. LEXIS 6187, at *9-10 (S.D.N.Y. May 14, 2001) (Court granted defendant's motion to transfer where there were relevant considerations for and against transfer and the considerations which favored transfer outweighed those which did not). Moreover, the movant has demonstrated that the proposed transfer would promote convenience and fairness. Therefore, for the reasons set forth above, and pursuant to 28 U.S.C. § 1404(a), defendant Tower's motion to transfer this case is hereby GRANTED, and the Clerk of the Court is directed to transfer this case to the United States District Court for the Eastern District of California.