Opinion
EP-00-CA-255-DB.
November 7, 2000.
ORDER
On this day, the Court considered Defendant United States Fire Insurance Company's "Amended Motion to Transfer Venue," filed in the above captioned-cause on September 27, 2000. Plaintiff Maria Serrano submitted an untimely "Response to Defendant's Motion to Transfer Venue," on October 20, 2000. On October 24, 2000, the Court granted Plaintiff leave to file the untimely response. After due consideration, the Court is of the opinion that Defendant's motion must be denied for the reasons that follow.
BACKGROUND
According to the Petition filed in County Court at Law Number 7 of El Paso County, Texas, Plaintiff alleges she was injured on February 5, 1993, while in the performance of her employment duties at Sturgis Co. of El Paso, Texas. As a result of the injury, Plaintiff avers that she sustained back injuries for which she subsequently filed a claim with the Texas Workers' Compensation Commission. Plaintiff further maintains that Defendant United States Fire Insurance Company, the workers' compensation insurance carrier for Sturgis Co., mishandled her workers' compensation claim by acting in bad faith and refusing to approve payment for reasonable and necessary medical services for Plaintiff's injuries. Plaintiff is a resident of El Paso County. The injury alleged occurred in El Paso County, and Plaintiff sought treatment for her workers' compensation claim in El Paso County.
Defendant is an insurance company incorporated under the laws of New York, with its principal place of business in New Jersey. Defendant's main office in Texas is in Collin County, Texas ("Collin County"), and Defendant avers that all employees with relevant knowledge of the events in question reside in Collin County.
On July 31, 2000, Plaintiff filed a cause of action in the County Court alleging that Defendant intentionally acted with bad faith in connection with her workers compensation claim. Defendant removed the action from state court to this Court on August 25, 2000. The instant motion followed.
DISCUSSION
Defendant asks the Court to transfer this cause to the United States District Court for the Eastern District of Texas, Sherman Division ("Eastern District of Texas"), pursuant to 28 U.S.C. § 1406(a), which provides for transfer or dismissal of a case "laying venue in the wrong division or district." In the alternative, Defendant asks that the case be transferred pursuant to 28 U.S.C. § 1404(a), which provides for discretionary transfer of venue for the convenience of the parties.
A. Title 28 U.S.C. § 1406(a)
The general removal statute, 28 U.S.C. § 1441(a) provides that any action brought in a state court may be removed by the defendant to the district court "for the district and division embracing the place where such action is pending." Accordingly, venue in removed cases being defined by 28 U.S.C. § 1441, the general venue statute that applies to cases originally filed in federal court — 28 U.S.C. § 1391 — does not apply to removed cases. See Polizzi v. Cowles Magazines, Inc., 345 U.S. 663, 665, 73 S.Ct. 900, 902, 97 L.Ed. 1331 (1953) ("But even on the question of venue, § 1391 has no application to this case because this is a removed action. The venue of removed actions is governed by 28 U.S.C. § 1441(a). . . ."). Hence, pursuant to 28 U.S.C. § 1441, the proper venue of a removed action is the "district court of the United States for the district and division embracing the place where such action is pending."
Following this line of reasoning, courts have widely held that venue is proper in the district court if it was proper in the state court in which it was filed. See e.g. Burlington N. Santa Fe Ry. Co. v. Herzog Servs., 990 F. Supp. 503, 504 (N.D.Tex. 1998); see also 14C CHARLES ALAN WRIGHT ET AL., FEDERAL PRACTICE AND PROCEDURE, § 3726 (3d ed. Supp. 2000). Courts have also held that venue is proper in the federal court to which it was removed even if venue was improper in the underlying state cause of action, since by seeking removal, the defendant effectively waives any objection to the state court's venue. See e.g. Seaboard Rice Milling Co. v. Chicago, R.I. P. Ry., 270 U.S. 363, 367, 46 S.Ct. 247, 248, 70 L.Ed. 633 (1926). There are cases to the contrary, holding, as Defendant now argues, that "[b]ecause the jurisdiction of the federal court on removal is, in a limited sense, a derivative jurisdiction, any defect in jurisdiction or process present in the state suit may be asserted in the district court." PT United Can Co. v. Crown Cork Seal Co., 138 F.3d 65 (2d Cir. 1998) (internal quotation marks removed) (quoting Freeman v. Bee Mach. Co., 319 U.S. 448, 452, 63 S.Ct. 1146, 1148-49, 87 L. Ed. 1509 (1943)); see also Greenberg v. Giannini, 140 F.2d 550, 553 (2d. Cir. 1944) ("when a defendant removes an action from a state court in which he has been sued, he consents to nothing and `waives' nothing. . . ."). Even where courts have recognized a defendant's right to preserve challenge to venue in the underlying state cause of action, however, they give no indication as to how this challenge is to be asserted in federal court or whether state or federal law should determine the propriety of venue. Moreover, no cases out of the First or Second Circuits, where this principle has been recognized, indicate that such challenges were ever successfully lodged.
A minority of cases, however, have held that improper state court venue precludes a federal court to which the case has been removed from exercising jurisdiction. See e.g. Cobb v. National Lead Co., 215 F. Supp. 48 (E.D.Ark. 1963).
After carefully considering the caselaw, this Court is not convinced that challenges to venue in the underlying state cause of action can be preserved. Better-reasoned cases hold to the contrary, and the Fifth Circuit has not spoken on the matter. Hence, the Court finds that the only proper way to assert a challenge to venue, without flouting the venue provisions of 28 U.S.C. § 1441, is to do so pursuant to 28 U.S.C. § 1404(a), rather than 28 U.S.C. § 1406(a). The latter section is only applicable in cases in which there is improper venue, and venue in removed cases is proper under 28 U.S.C. § 1441, even where it would not comply with the venue requirements of 28 U.S.C. § 1391. Accordingly, pursuant to 28 U.S.C. § 1441, venue in this Court subsequent to removal from the County Court is proper, and transfer pursuant to 28 U.S.C. § 1406(a) is not appropriate.
The Fifth Circuit has held that transfer under 28 U.S.C. § 1406(a) is proper where a defendant removed the case to the wrong "division," see Kreimerman v. Casa Veerkamp, S.A. de C.V., 22 F.3d 634 (5th Cir. 1994), or where venue itself is proper but where there is some "obstacle to an expeditious and orderly adjudication on the merits," namely, personal jurisdiction. Aguacate Consol. Mines, Inc., of Costa Rica v. Deeprock, Inc., 566 F.2d 523, 524 (5th Cir. 1978) (internal quotation marks omitted) (quoting Dubin v. United States, 380 F.2d 813, 815 (5th Cir. 1967)). Neither case applies to the matter at hand.
In the alternative, Defendant requests transfer of venue pursuant to 28 U.S.C. § 1404 (a), which 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." It is well-settled that the movant bears the burden of showing why a transfer of venue under § 1404(a) is warranted. See Peetet v. Dow Chem. Co., 868 F.2d 1428, 1436 (5th Cir. 1989).
Preliminarily, the Court notes that the Eastern District of Texas is a district in which the case "might have been brought." Defendant's principal office in Texas is located in the Eastern District of Texas; hence, venue would have been appropriate in the Eastern District and the Court would have properly exercised personal jurisdiction over the parties had the cause of action been brought there.
Next the Court considers "all the relevant factors to determine whether or not on balance the litigation would more conveniently proceed and the interests of justice be better served by transfer to a different [venue]." Id. (internal quotation marks omitted). The following factors are considered relevant: (1) the availability and convenience of witnesses; (2) the availability and convenience of the parties; (3) the place of the alleged wrong; (4) the location of books and records; (5) the possibility of delay or prejudice if transfer is granted; (6) the location of counsel; and (7) the plaintiff's choice of forum. See, e.g., Hall v. Environmental Chem. Corp., 64 F. Supp.2d 638, 644 (S.D.Tex. 1999).
Here, upon consideration of the evidence submitted and the Parties' arguments, the Court finds that Defendant has not met its burden to show that the balance tips in favor of transferring this cause to the Eastern District of Texas.
1. Availability and Convenience of the Witnesses and Parties
Defendant argues, without more, that Defendant's employees and agents who are familiar with the facts of this case and who will be material witnesses, are located primarily in Collin County. Defendant further notes that no employee with knowledge of the relevant facts resides anywhere near El Paso County. "Requiring employees to take time off from work," Defendant avers, "and travel great distances to testify in this action not only disrupts U.S. Fire's business, but is also terribly inconvenient and costly."
Typically, the convenience of the witnesses and parties are the most important factors in determining whether a case should be transferred pursuant to 28 U.S.C. § 1404(a). See Dupre v. Spanier Marine Corp., 810 F. Supp. 823, 825 (S.D.Tex. 1993). Notwithstanding, Defendant has not identified the witnesses it intends to call at trial or identified the substance of any witness' expected testimony. See id. ("The movant must specifically identify the key witnesses and outline the substance of their testimony."). Defendant has produced no evidence to suggest that the testimony of its potential witnesses would take such a long time as to actually disrupt the company's business or incur great costs to the company. The Court presumes that testimony regarding the denial of benefits must, under normal circumstances, be an ordinary part of an insurance adjustor's job description. The Court is not inclined to believe, without further evidence, that Defendant operates its business under the assumption that all litigation will be tried in the county where it maintains its main administrative offices. Nor has Defendant presented any evidence to suggest that it would be prejudiced severely if its witnesses were required to appear before this Court. Plaintiff, for her part, is no more diligent in identifying witnesses. However, as the Defendant bears the burden on this point, the Court places more emphasis on Defendant's omissions. Consequently, the Court finds that Defendant has failed to show that this factor favors transfer.
2. Place of the Alleged Wrong
Defendant submits the affidavit of Vicki Hoover, supervisor for its workers' compensation claims department, which recites that the alleged wrong occurred in Collin County, where the Plaintiff's claim was handled. Plaintiff, for her part, argues that the events that gave rise to the complaint transpired for the most part in El Paso County. To Plaintiff's argument the Court adds that Defendant's alleged mishandling of Plaintiff's medical claim is only one event among the many that will be examined if this case proceeds to trial. The Court further notes that there can be more than one county in which a substantial part of the events giving rise to the claim occurred. See 15 CHARLES ALAN WRIGHT ET AL., FEDERAL PRACTICE AND PROCEDURE § 3806 (2d ed. Supp 2000). In this case, the court finds that Defendant has not met its burden of showing that a sufficiently substantial part of the events took place in Collin County as to favor transfer of venue.
3. Location of Books and Records
When considering a motion to transfer venue, the location of documents and business records is usually given little weight, unless the documents "`are so voluminous [that] their transport is a major undertaking.'" See Gardipee v. Petroleum Helicopters, Inc., 49 F. Supp.2d 925, 931 (E.D.Tex. 1999) (quoting Met-L-Wood Corp. v. SWS Indus., Inc., 594 F. Supp. 706, 710 (N.D.Ill. 1984)). Here, Defendant avers, through affidavit testimony, that Defendant's books and records relevant to this cause are located in Collin County. Other than that general allegation, however, Defendant has made no showing to suggest which documents it believes are relevant to this cause or that those documents are so voluminous that transporting them would be impractical. That type of general allegation simply is not enough to sustain Defendant's burden on this point. See id. at 931-32.
4. Possibility of Delay or Prejudice if Transfer is Granted
Here, Defendant has offered no indication of what effect transfer would have upon the disposition of this case. Nevertheless, the Court notes that this case is still in its inception and thus, transferring this matter likely will not delay the hearing of this cause on the merits.
5. Location of Counsel
With respect to the location of counsel, Defendant has provided no evidence bearing on this issue. There is no indication that traveling to the Western District of the same, albeit large, state would cause such hardship and disruption as to prejudice Defendant. Similarly, Plaintiff's counsel is not likely to be prejudiced by having to travel to the Eastern District of Texas. The factor, therefore, is neutral.
6. Plaintiff's Choice of Forum
Finally, the Court considers Plaintiff's choice of forum. In general, a plaintiff's choice of forum is given considerable weight and will not be disturbed unless the other factors weigh substantially in favor of transfer. See Texas Eastern Transmission Corp. v. Marine Office-Appleton Cox Corp., 579 F.2d 561, 567 (10th Cir. 1978). As Defendant has raised few factors that weigh in favor of transfer, the Court is unwilling to disturb Plaintiff's choice of forum.
All told, of the seven relevant factors considered, five weigh in favor of trying this cause in the Western District of Texas, one is neutral, and only one weighs in favor of transfer. Consequently, the Court finds Defendant has failed to meet its burden of demonstrating that the balance of convenience and justice substantially weigh in favor of transferring this cause to the Eastern District of Texas.
Accordingly, IT IS HEREBY ORDERED that Defendant United States Fire Insurance Company's Motion to Transfer Venue is DENIED.