Opinion
CV 99-2491 (DRH) (MLO)
September 15, 2001
MEMORANDUM of DECISION and ORDER
Pursuant to the Order of District Judge Denis R. Hurley dated December 28, 1999, defendant Wheaton Van Lines, Inc.'s (hereinafter "Wheaton" or "defendant") motion pursuant to 28 U.S.C. § 1404 (a) for an order transferring venue from the United States District Court for the Eastern District of New York to the United States District Court for the Southern District of Indiana, and in the alternative, defendant's motion pursuant to 28 U.S.C, § 1406(a) to dismiss the complaint based upon improper venue has been referred to the undersigned. For the reasons that follow, the Court grants defendant's motion to transfer venue, and transfers venue to the United States District Court for the Southern District of Indiana and denies defendant's motion in the alternative to dismiss the complaint based on improper venue as moot.
FACTUAL BACKGROUND
This action arose from the termination of an Agency Agreement and Addendum (the "agreements") dated April 24, 1996, pursuant to which plaintiffs Advance Relocation Storage, Inc. ("Advance"), A. Advance Relocation Storage of Connecticut, Inc. ("Advance of Connecticut"), A. Advance Relocation Storage of New Jersey, Inc. ("Advance of New Jersey"), B. Nilsson Moving Storage, Inc. ("B. Nilsson"), New York Corporate Sales, Inc. d/b/a/ Advance North American Sales ("N.Y. Sales") and Molloy Brothers Trucking, Inc. ("Molloy") (collectively the "corporate plaintiffs") provided moving and storage services as agent for defendant in the New York Metropolitan area. (Compl. 10-13). The corporate plaintiffs exercised their rights under the foregoing agreements and on March 12, 1999, terminated the agreements without cause, effective April 26, 1999. (Compl. 17).
Paragraph 4.1 of the Agency Agreement provides in pertinent part: Either party may terminate this agreement at its option without cause. Such termination shall be effective thirty (30) days after written notice to the other party has been delivered or deposited in the United States mail, registered or certified, with postage pre-paid and addressed to the other party at the last address furnished, in writing, by the party to receive said notice. Such termination shall not relieve the agent from the necessity of accounting nor from compliance with its obligations herein, but such notice shall have the effect of terminating this agreement in every other particular. The company may terminate this agreement for any violation of this agreement, which termination shall be effective immediately upon delivery of written notice, either delivered in person or by mail . . . . The agent, in the event of the termination of this agreement by either party, agrees to immediately, peaceably and cooperatively release to the company, or as company may direct, all the company's shipments in its possession or under its control or supervision including, but not limited to, those held in storage-in-transit as well as documentation pertaining thereto. (Compl. 14, Exh. A).
Following the receipt of the corporate plaintiffs' notice of termination, in what plaintiffs alleged was a bad faith, retalitory response, defendant served a notice terminating the agreements immediately on March 25, 1999 for cause, claiming "unauthorized retention of collections which currently total $43,125.33," together with other violations. (Compl. 18,20). In connection with the foregoing March 25, 1999 termination, defendant claimed as damages the sum of $215,040.00 against the corporate plaintiffs (for reimbursement for defrayed start-up expenses pursuant to Paragraph 22 of the Addendum), of which defendant claimed $93,750.00 against plaintiff T.J. Molloy (for his personal guaranty pursuant to Paragraph 23 of the Addendum). (Compl. 19; Exh. B).
Paragraph 22 of the Addendum provides that in the event of a "for cause" termination, the corporate plaintiffs are obligated to repay a pro-rated portion (based on a certain listed formula) of the start-up assistance the defendant funded. (Compl. 15; Exh. B).
In connection with Paragraph 23 of the Addendum, the corporate plaintiffs granted to defendant as collateral security for the obligations assumed in Paragraph 22 of the Addendum a lien on twenty tractor trailers, and T.J. Molloy issued a limited personal guaranty in the amount of $125,000.00, to be reduced in accordance with the formula set forth in Paragraph 22 of the Addendum. (Compl. 16; Exh. B).
On April 30, 1999, plaintiffs commenced this action pursuant to 28 U.S.C. § 1332 (a) against defendant in the United States District Court for the Eastern District of New York, alleging two causes of action and seeking declaratory relief, an accounting and money damages arising from the termination of the Agency Agreement and Addendum. The first cause of action avers that defendant's termination of the plaintiffs' agency on a "for cause" basis constituted a pretext and retaliation for the corporate plaintiffs' prior decision to terminate the agency on thirty days notice. Plaintiffs also seek a declaratory judgment against defendant requesting the Court to require defendant to execute releases of liens held by Wheaton and to declare defendant's claim for reimbursement for the defrayed start-up costs (including the guaranty of T.J. Molloy) void. The second cause of action seeks money damages for breach of contract as a result of defendant's failure to remit to the corporate plaintiffs monies collected by defendant on moves performed by the corporate plaintiffs and also seeks an accounting with respect to those collections. Plaintiffs demand a trial by jury.
Plaintiffs Advance, B. Nilsson, N.Y. Sales and Molloy are New York corporations, each with its principal place of business located at 195 Sweet Hollow Road, Old Bethpage, New York. (Compl. 1). Plaintiff A. Advance Relocation Storage of Connecticut, Inc. ("Advance of Connecticut") is a Connecticut corporation with its principal place of business located at 195 Sweet Hollow Road, Old Bethpage, New York. (Compl. 2). Plaintiff Advance of New Jersey is a New Jersey corporation with its principal place of business located at 195 Sweet Hollow Road, Old Bethpage, New York. (Compl. 3). Plaintiff T.J. Molloy is an individual residing in Rockville Centre, New York (collectively "plaintiffs"). (Compl. 4).
Defendant is an Indiana corporation with its principal place of business located at 8010 Castleton Road, Indianapolis, Indiana. (Compl. 5).
Defendant now moves pursuant to 28 U.S.C. § 1404 (a) for an order transferring venue from the United States District Court for the Eastern District of New York to the United States District Court for the Southern District of Indiana, and in the alternative, moves pursuant to 28 U.S.C, § 1406(a) to dismiss the complaint based upon improper venue. For the reasons that follow, this Court holds that venue in this action be transferred to the Southern District of Indiana and that the motion to dismiss based upon improper venue be denied as moot.
DISCUSSION
Pursuant to 28 U.S.C. § 1404, a district court can transfer a civil action either sua sponte under subsection (a) "[f]or the convenience of parties and witnesses, in the interest of justice" or "upon motion, consent or stipulation of all parties" under subsection (b). 28 U.S.C. § 1404. This statutory transfer of venue differs from a transfer under the common law doctrine of forum non conveniens because the statutory doctrine "vests courts with power to exercise broader discretion to grant transfers upon a lesser showing of inconvenience than is required under the forum non conveniens analysis." Wine Markets Int'l, Inc. v. Bass, 939 F. Supp. 178, 181-82 (E.D.N.Y. 1996) (citing Norwood v. Kirkpatrick, 349 U.S. 29, 32, 75 S.Ct. 544, 546); see also Guidi v. Inter-Contimental Hotels Corp., 2000 WL 1158788, at *6 (2d Cir. Aug. 16, 2000) ("§ 1404(a) transfers are different than dismissals on the ground of forum non conveniens . . . . District courts [a]re given more discretion to transfer under § 1404(a) . . . [because] [tlhe statute was designed as a federal housekeeping measure, allowing easy change of venue within a unified federal system.") (internal quotation marks and citation omitted); Photoactive Prods., Inc. v. ALOR Int'l, Ltd, 99 F. Supp.2d 281, 292 (E.D.N.Y. 2000) ("Section 1404(a) vests courts with power to exercise broader discretion to grant transfers upon a lesser showing of inconvenience than is required under the forum non conveniens analysis."). The purpose of § 1404(a) is to prevent "waste of time, energy and money and to protect litigants, witnesses and the public against unnecessary inconvenience and expense." Van Dusen v. Barrack, 376 U.S. 612, 616, 84 S.Ct. 805 (1964) (internal quotation marks and citations omitted).
On a motion to transfer venue, "the movant bears the burden of clearly establishing that a transfer is appropriate and that the motion should be granted." Innovations Enter. Ltd. v. Haas-Jordan Co., 2000 WL 263745, at * 1 (E.D.N.Y. Jan. 4, 2000). The district court, however, retains broad discretion over the ultimate decision to transfer. See Minnette v. Time Warner, 997 F.2d 1023, 1026 (2d Cir. 1993); In re Cuyahoga Equip. Corp., 980 F.2d 110, 117 (2d Cir. 1992) ("motions for transfer lie within the broad discretion of the district court and are determined upon notions of convenience and fairness on a case-by-case basis."); see also Photoactive Prods., 99 F. Supp. 2 d at 291.
In accordance with the terms of 28 U.S.C. § 1404 (a), the movant meets his or her burden by showing (1) the action might have been brought in the district to which transfer is requested and (2) the transfer is for the convenience of parties and witnesses in the interest of justice. See Donellan V. Ferag, Inc., 1999 WL 33111, at *1 (E.D.N.Y. Jan. 22, 1999); Launer v. Buena Vista Winery, Inc., 916 F. Supp. 204, 212 (E.D.N.Y. 1996).
In determining whether, under 28 U.S.C. § 1404, a case being transferred might have been brought in the venue to which it may be transferred, the court applies the criteria for confirming proper venue set forth in 28 U.S.C. § 1391 (a), which states:
A civil action wherein jurisdiction is founded only on diversity of citizenship may, except as otherwise provided by law, be brought only in (1) a judicial district where any defendant resides, if all defendants reside in the same State, (2) a judicial district in which a substantial part of the events or omissions giving rise to the claim occurred, or a substantial part of property that is the subject of the action is situated, or (3) a judicial district in which any defendant is subject to personal jurisdiction at the time the action is commenced, if there is no district in which the action may otherwise be brought.28 U.S.C. § 1391 (a);see Donellan, 1999 WL 33111, at *2.
In the instant case, venue in the United States District Court for the Southern District of Indiana is proper under 28 U.S.C. § 1391 (a)(1) because the judicial district is one in which defendant, an Indiana corporation with its principal place of business in Indiana, resides, and all defendants (there being only one) reside in the same state, Indiana. Venue is also proper in the Southern District of Indiana under 28 U.S.C. § 1391(a)(2) because a substantial part of the events and operative facts giving rise to the breach of contract claim and the related declaratory judgment claims occurred in Indiana. Finally, to the extent there was no district in which the action may otherwise have been brought, venue would also have been proper in the Southern District of Indiana under 28 U.S.C. § 1391 (a)(3) because defendant is subject to personal jurisdiction of that federal judicial district. Thus, transferring venue is proper under this first inquiry.
For example, plaintiffs' breach of contract claim refers to the Agency Agreement and Addendum. (Compl. 11). Those contracts were negotiated between the parties in part in Indianapolis; the individual plaintiff T.J. Molloy came to Indianapolis to negotiate the agreements. (Burns Aff. 9). Specifically, plaintiffs allege that defendant improperly terminated the agreement for cause by a letter dated March 25, 1999. (Compl. 8). This letter was issued at the defendant's corporate office in Indiana. (Burns Aff. 11; Exh. Plaintiffs also allege that the letter breached the terms of the aforementioned contracts and defendant's Agency Manual (Compl. 20(i)). This Manual was issued and administered in Indiana. (Burns Aff. 12). In addition, the complaint alleges that collections by the corporate plaintiffs referred to in the for cause termination letter were in breach of the agreements. (Compl. 20 (ii)). Such collections were taken from shippers from locations outside of New York and throughout the United States, and plaintiffs were contractually obligated to send said collections to defendant for deposit in its account in Indiana. (Burns Aff. 13). Plaintiffs demand an accounting of certain collections they allege were wrongfully withheld in defendant's account in Indiana. (Compl. 29-31). Defendant maintains such accounting records in Indiana. (Burns Aff. 14). Finally, the complaint seeks a declaratory judgment against defendant requesting the Court to require defendant to execute releases of liens held by defendant. (Compl. 20). The release of liens would require action by an officer of defendant in Indiana. (Burns Aff. 17). The defendants also seeks a declaration that defendant pay plaintiffs $121,587.00. (Compl. 31). Wheaton's bank accounts and financial offices are located in Indianapolis, Indiana. (Burns Aff. 7). In sum, a substantial part of the events or omissions giving rise to plaintiffs breach of contract claim arising from the termination of the agreements between plaintiffs agents (involved in the interstate transport of household goods) and defendant (an interstate common carrier of household goods) occurred in Indiana, and a substantial part of the activities which plaintiffs seek to have ordered in its declaratory judgment demand would necessarily have to be done in Indiana.
In determining whether, under 28 U.S.C. § 1404, the transfer is for the convenience of parties and witnesses and the interest of justice, the courts have applied various factors, none of which are singly dispositive, including:
(1) the convenience of the parties; (2) the convenience of witnesses; (3) the relative means of the parties; (4) the locus of operative facts and relative ease of access to sources of proof; (5) the attendance of witnesses; (6) the weight accorded the plaintiffs choice of forum; (7) calendar congestion; (8) the desirability of having the case tried by the forum familiar with the substantive law to be applied; (9) practical difficulties; and (10) how best to serve the interest of justice, based on an assessment of the totality of material circumstances.
Innovations, 2000 WL 263745, at * 1; see Donellan, 1999 WL 33111, at *2; Pall Corp. v. PTI Tech., Inc., 992 F. Supp. 196, 199 (E.D.N.Y. 1998); Launer, 916 F. Supp. at 213 (E.D.N.Y. 1996). "In general, unless the balance of factors weighs strongly in favor of defendant, the plaintiffs choice of forum should remain undisturbed." Schieffelin Co. v. Jack Co. of Boca, Inc., 725 F. Supp. 1314, 1321-22 (S.D.N.Y. 1989).
The first factor, convenience of the parties is not dispositive. The focus of this factor is the residence of the parties, not the inconvenience to counsel. See generally Cento Group, S.P.A. v. OraAmerica, Inc., 822 F. Supp. 1058, 1060-61 (S.D.N.Y. 1993). Defendant resides in Indiana, and plaintiffs reside in New York. While transferring the case to Indiana removes a burden for defendant, this amounts simply to a switch of burdens. See Snyder v. Madera Broadcasting, Inc., 872 F. Supp. 1191, 1200 (E.D.N.Y. 1995) (where transfer merely serves to "shift the inconvenience from one party to the other, the plaintiffs choice of forum should not be disturbed"); see also Dostana Enters. LLC v. Federal Express Corp., 2000 WL 1170134, at *4 (S.D.N Y Aug. 16, 2000) ("The convenience of the parties factor does not weigh in favor of transfer where such transfer would merely shift the inconvenience of litigating in a particular forum from one party to the other."); Wechsler v. Macke Int'l Trade, Inc., 1999 WL 1261251, at *6 (S.D.N.Y. Dec. 26, 1999) (parties convenience a neutral factor if it merely shifts inconvenience).
The second factor, however, convenience of witnesses, is a key factor, if not the most important factor in the venue transfer analysis, see Filmline Prod., Inc. v. United Artists Corp., 865 F.2d 513, 520 (2d Cir. 1989); Donellan, 1999 WL 33111, at *2; Pall Corp., 992 F. Supp. at 201; Wine Markets, 939 F. Supp. at 183-84 (""The convenience of both the party and non-party witnesses is probably considered the single-most important factor in the analysis of whether a transfer should be granted"), and tilts in favor of defendant. A party seeking to rely on this factor "must identify the material witnesses and supply a general description of what their testimony will cover." Dostana Enters. LLC v. Federal Express Corp., 2000 WL 1170134, at *3 (S.D.N.Y. Aug. 16, 2000).
Plaintiffs' potential witnesses in this action and the nature of their proposed testimony include:
With the exception of Cliff Lisch, plaintiffs' witnesses all reside in New York. (Molloy Aff. 21).
(1) T.J. Molloy, President of each of the corporate plaintiffs and the individual plaintiff in this action, on all transactions which are the subject of the present action;
(2) Michael Silvestro, Controller of the corporate plaintiffs, on practices and procedures pertaining to collections;
(3) Robert Juergens, Manager of the corporate plaintiffs' billing department, on practices and procedures pertaining to collections;
(4) Daniel McLoughlin, Vice President of Operations of the corporate plaintiffs, on all issues in this case;
(5) Martin Blanc, a consultant to the corporate plaintiffs, on the negotiations surrounding the agreements and on the events surrounding the termination of those agreements;
(6) Cliff Lisch, defendant's regional manager.
Cliff Lisch resides in Connecticut and is an employee of defendants who plaintiff intends to use. (Molly Aff. 22).
In assessing plaintiffs' list, the Court observes as an initial matter that plaintiffs have identified a named party, T.J. Molloy. However, as previously discussed, see supra, a party's convenience does not weigh in favor of transfer where such transfer would merely shift the inconvenience of litigating in a particular forum from one party to another. See Snyder, 872 F. Supp. at 200; see also Dostana, 2000 WL 1170134, at *4; Wechsler, 1999 WL 1261251, at *6.
Next, plaintiffs have identified three employees (Silvestro, Juergens and McLoughlin) who reside and work in New York and who will be inconvenienced by transfer of this action. As a practical matter because of their employment with the corporate plaintiffs in this litigation, these employees would be available as witnesses in Indiana. See Carruthers v. Amtrak, 1995 WL 378544, at *3 (S.D.N.Y. June 26, 1995). The Court notes, however, a transfer to Indiana would be inconvenient in terms of time and expense for these witnesses. See id.
While plaintiff identifies Martin Blanc as a potential witness who would be inconvenienced if he had to travel to Indiana, Blanc is an agent of plaintiffs who was integral in the negotiation of the agreements between the parties and therefore with reasonable certainty should have been aware of the possibility that a lawsuit could arise in the state of Indiana. See, e.g., Photoactive Prods., 99 F. Supp.2d at 292. Likewise, plaintiffs have identified employee Daniel McLoughlin, Vice President of Operations of the corporate plaintiffs, as a potential witness on all issues in this case, and therefore, he too should have been aware of the possibility that an action could have commenced in Indiana. See id.
Finally, plaintiffs identify defendant's regional manager, Cliff Lisch, who resides in Connecticut, as a potential witness. Lisch is not relevant to this analysis for three reasons. First, plaintiff does not specify the nature of his testimony, and therefore the inconvenience of Lisch is not given weight. See Falconwood Financial Corp. v. Griffin, 838 F. Supp. 836, 840-41 (S.D.N.Y. 1993) (inconvenience of witness for whom nature of testimony not specified, is not given weight). Second, the Court need not consider the convenience of a witness who is located outside both the transferor and transferee forums. See Dostana, 2000 WL 1170134, at *3 ("The significance of witnesses who reside in neither the current or transferee forum is negligible at best."); Wechsler, 1999 WL 1261251, at *6 (declining to consider inconvenience of witnesses located outside both transferor and transferee forums). Finally, Lisch has advised defendant that he has no objection to appearing in Indiana if his presence is required at trial. (Kirschner Aff. 14).
Therefore, Silvestro and Juergens are the remaining relevant witnesses on plaintiffs list for analysis under this factor. Upon further examination, however, the Court notes that the testimony of these two witnesses appears to be cumulative because they will both testify on practices and procedures relating to collections. The fact that there are two witnesses to testify concerning this issue is "no more supportive of the action remaining in this District than if there would be only one." Wechsler, 1999 WL 1261251, at *7
In sum, there appears to be only one relevant employee witness on plaintiffs' list to weigh into this factor.
Defendant's potential witnesses in this action and the nature of their proposed testimony are as follows:
(1) Stephen F. Burns, Chairman and CEO, on the negotiation of the plaintiffs' contracts, dealings with plaintiffs and general policies and procedures;
(2) Bill Sterrett, President of Wheaton, on billing and credit collection practices and agency accounting;
(3) Beth Messer, Director of Accounting at the relevant time, on the accounting method used by Wheaton for its agents. (Over fifteen people in her department may be responsible for adjustments to plaintiffs' account);
Beth Messer is no longer an employee of defendant. (Burns Reply Aff 11).
(4) Mark Kirschner, Vice President and Chief Financial Officer, on accounting practices and procedures;
(5) Sharon Heneghan, Comptroller, on accounting practices and procedures;
(6) Mike Hipsher, Manager of Accounting, on credit and charges practices and procedures;
(7) Dave Collier, Manager of revenue accounting, on how revenues are credited to parties (Four people in this department may be necessary to justify individual entries);
(8) Kathy Kendall, Director of claims, on claims, policies and procedures (Any one of twelve different adjusters may be necessary to justify different claims);
(9) George Carlisle, Director of Consumer Affairs, on policies and procedures regarding customer inquiries. (He and two other employees were likely responsible for adjustments to plaintiffs account);
(10) Tom Hawkins, Director of Customer Service (during much of the relevant time), on claims and complaints received from shippers. (He and ten members of his former staff made adjustments to agents' account);
(11) Neila Teal, Supervisor of Data Processing, on how the data accompanying plaintiffs' account calculation was complied and processed;
(12) Bud Cardone, Vice President of Special Services, on credits and charges to any international moves plaintiffs were involved in;
(13) Dave Witzersman, Vice President of Marketing, on charges and credits for yellow pages and sales material;
(14) Ed Benz, Manager of Quality Training, on practices, procedures, credits and charges relating to training, printing and decals;
(15) Al Noble, Director of Military and Government work, on practices and procedures for these large accounts. (He and four people in his department may be needed to justify individual charges and credits);
(16) Dennis Whitaker, Director of Safety, on practice and procedures, costs and credits for drug screening, driving violations and related government charges. (He and nine people in his department may be necessary to testify as to individual charges);
(17) Ron Borkowski, Director of Transportation, on practices and procedures regarding en route operational issues. (He and seventeen people in his department may be needed to testify regarding individual moves, including plaintiffs' drivers' failures to pay funds collected from shippers due to Wheaton);
(18) Steve Root, East Coast Planner, who dealt with plaintiffs' drivers en route, on the drivers obligations to pay funds en route to Wheaton;
(Burns Reply Aff. 11).
In assessing defendant's potential witnesses and their proposed testimony, the Court finds these individuals appear to offer material and relevant evidence with regard to plaintiffs' (i) claims that defendant's employees breached the agreements and violated its Agency Manual and procedures established in Indiana; (ii) demand for an accounting and "an exact account on all monies collected and withheld by defendant, (Molloy Aff, 25); and (iii) demand for declaratory and injunctive relief (release of liens).
Because plaintiffs have challenged the termination of the agency agreement on the ground that it is allegedly at variance with defendant's own practices and procedures, (Compl. 20 (iv)), defendant maintains that testimony by multiple executives and accounting witnesses is required. (Dft. Reply Mem. at 3).
Defendant contends that such an accounting requires an enormous undertaking, requiring defendant to justify thousands of charge backs calculated by a large, departmentalized staff of people. Defendant explains that as an interstate motor carrier, defendant must maintain a large staff of employees to process and account for a broad array of different categories of expenses which are charged back to the agent on moves performed by the agent under the interstate operating authority of the carrier. (Dft. Reply Mem. at 2). Examples include payments to customers, custom credits, government charges, fines and drug tests, registration costs, monies expended for adjusting or defending claims or lawsuit, rental fees, payments to other agents for loading, unloading, receiving or storing shipments, vendors bills and tax payments. Id. Moreover, Supervisory employees from the Departments of Accounting, Claims, Consumer Affairs, Customer Service, Data Processing, International Operations, Marketing, Training, Military and Government Work, Safety, Transportation and Planning are needed to testify as to practices and procedures in their department, and how charges are made to agent accounts. Id. at 2-3. Defendant states that approximately 100 employees could have been involved in processing the individual charges against plaintiffs' account for the several hundred moves over the several years involved in this action. Id. at 3. In sum, defendant states that in order to meet plaintiffs' demands for an accounting for monies withheld from its account, 18 different supervisory level people may be necessary to explain practices, procedures and methods of determining plaintiffs' credits and charges, and that any one of approximately 100 people may be necessary to testify to the actual treatment of items on plaintiffs' account. (Burns Reply Aff. 9).
Defendant states that because the complaint seeks a declaration that defendant's claim against plaintiffs should be declared void and defendant should be directed to execute releases of liens held by defendant and pay plaintiffs $121,587.00, (Compl. 20,31), an adjudication of the dispute would require the testimony of its proposed employees and former employee. (Burns Aff.6-7, 18).
Although all but one of defendant's witnesses who are expected to testify in defense of these claims and demands and who reside in Indiana are Wheaton's employees and would be available as witnesses in New York by virtue of their employment relationship with defendant, see Carrruthers, 1995 WL 378544, at *3, nevertheless, these key witnesses would incur to some degree the expense of travel and time away from their jobs and other pursuits if the case were not transferred, see Mindset Ltd. v. Quality Controlled Biochemicals, Inc., 2000 WL 28167, at *5 (S.D.N.Y. Jan. 14, 2000) (finding transfer proper where majority of operative facts occurred in Massachusetts including conduct of employees and employees breach of contract); Berman v. Informix Corp., 30 F. Supp.2d 653, 657 (S.D.N.Y. 1998). Moreover, even if defendant's list is somewhat exaggerated or involves some duplication, it does appear that defendant will be required not only to produce many of these witnesses for depositions during discovery but also for trial.
More importantly, defendant's non-party witness Beth Messer, as Director of Accounting is a material and key witness to plaintiffs' claims relating to their demand for an accounting and their disputes concerning the calculation of charges and adjustments to plaintiffs' account. See Filmline, 865 F.2d at 520; Donellan, 1999 WL 33111, at *2; Pall Corp., 992 F. Supp. at 201; Wine Markets, 939 F. Supp. at 183-84. Defendant has indicated that this non-party witness would not be subject to the process of this Court to compel her attendance at a trial conducted in this district. See Wine Markets, 939 F. Supp. at 184 (an important consideration is "the availability of process to compel the attendance of witnesses to testify at trial"); see also Gerling American Ins. Co. v. FMC Corp., 1998 WL 410898, at * 3 (S.D.N.Y. June 22, 1998).
Said witness would be available during discovery if served with a subpoena pursuant to Rule 45 of the Federal Rules of Civil Procedure.
Finally, the Court notes that while the testimony of four of the Supervisory employees (Kirschner, Heneghan, Hipsher and Collier) appear to be cumulative with respect to accounting practices and procedures, this is of minimal significance given the materiality of the remaining witnesses anticipated testimony in defense of the claims and demands in this lawsuit. See Wechsler, 1999 WL 1261251, at *7.
On balance, considering the nature of the testimony of potential witnesses, the Court finds that when all potential issues raised by the complaint are considered, the convenience of witnesses factor tips in favor of defendant. See id. (finding balance of convenience weighs in favor of transfer where "[m]any of defendant's witnesses might be inconvenienced were transfer to be denied, but only one key witness for plaintiff might be inconvenienced where transfer to be granted").
The third factor, relative means of the parties, is important primarily when a disparity exists between the parties. See Pall, 992 F. Supp. at 200 ("The Court may also consider.. whether a disparity between the parties exists with respect to their relative means, such as in the case of an individual plaintiff suing a large corporation."); Wine Markets, 939 F. Supp. at 182; Hernandez, 761 F. Supp. at 989. Plaintiff contends that transfer would pose an inconvenience and a financial burden because if "plaintiffs were forced to litigate this case in Indiana, they would be required to obtain local counsel in an area in which they possess no contacts and no familiarity" and because plaintiffs are "without the substantial resources the defendant possesses." (P1. Mem. of Law in Opp. at 16).
However, while the relative means of the parties may affect convenience, a "party arguing for or against transfer because of inadequate means must offer documentation to show that transfer (or lack thereof) would be unduly burdensome to his finances." Federman Assocs. v. Paradigm Medical Indus., Inc., 1997 WL 811539, at *4 (S.D.N.Y. Apr. 8, 1997). Here, plaintiffs' unsupported assertion that plaintiffs are "without the substantial resources defendant possesses" without more does not suffice to document that transfer would be unduly burdensome. See id. Accordingly, there is no obvious disparity and this factor is of little significance in the Court's analysis. See Dostana, 2000 WL 1170134, at *4; Orb Factory, Ltd. v. Design Science Toys, Ltd., 6 F. Supp.2d 203, 210 (S.D.N.Y. 1998) ("where proof of such disparity is not adequately provided, or does not exist, this is not a significant factor to be considered").
The fourth factor, the place where the operative facts occurred is "traditionally an important factor to be considered in deciding where a case should be tried." Wechsler, 1999 WL 1261251, at *4 (internal quotation marks and citation omitted); Pall, 992 F. Supp. at 200. The consideration includes "the relative ease of access to the sources of proof." Wine Markets, 939 F. Supp. at 182. In general, courts transfer cases "when the principal events occurred and the principal witnesses are located in another district." Berman, 30 F. Supp.2d at 658. Weighing this factor results in the tipping of the scales in favor of defendant.
First, the underlying basis for this breach of contract claim and declaratory judgment demands is defendant's termination of the agreements for cause by a letter dated March 25, 1999 (plaintiffs claim that this letter breached the terms of the agreements and defendant's Agency Manual). This letter was prepared at and issued from Indiana, and each party executed the final agreements in their respective forums by mail and facsimile. (Burns Aff. 11). Moreover the Agency Manual was issued and administered in Indiana. (Burns Aff. 12). Thus, the documents that form the basis for plaintiffs' claims originated in Indiana. See Dostana, 2000 WL 1170134, at *4-5; APA Excelsior II L.P. v. Premiere Techs., Inc., 49 F. Supp.2d 644, 672-73 (S.D.N.Y. 1999) (where documents underlying claim were prepared in transferee forum this weighed towards transfer under locus of operative facts factor); Berman, 30 F. Supp.2d at 658.
Next, although the fact that plaintiffs' books and records relevant to the various accounting issues are in New York and the liens at issue are attached to vehicles registered and kept in New York is an important consideration, it is outweighed by the fact that the resolution of majority of the issues raised in the complaint concerning (1) collections the corporate plaintiffs received from shippers from locations outside New York which plaintiffs were contractually obligated to send to defendant for deposit in its account in Indiana, (Compl. 20 (ii); Burns Aff 13); (2) monies defendant retained in its accounts in Indiana and plaintiffs demand for an accounting from records maintained by defendant in Indiana, (Compl. 20 (iii); Burns Aff. 14); (3) plaintiffs' request for an adjudication regarding corporate practices and procedures administered by defendant from its corporate offices in Indiana, (Compl. 20 (iv); Burns Aff. 15); and (4) plaintiffs' request for a declaration regarding the motivation of defendant's corporate officers when they took actions in defendant's corporate offices in Indiana, (Compl. 20 (iv); Burns Aff. 16), relate to events which occurred in Indiana and seek equitable orders against defendant which are to be performed in Indiana and in New York. See Mindset, 2000 WL 28167, at *5. While it would not be impossible to obtain these proofs for a trial in New York, the complications involved provide further support for the conclusion that the direct and indirect costs of litigation would be less in Indiana.
Defendant anticipates the defense of the controversies plead by plaintiff will require that defendant have access at trial to over two truckloads of documents which are dispersed in different places in defendant's warehouses. (Burns Reply Aff. 5). Defendant explains that the agency relationship between the parties requires an enormous undertaking by Wheaton to calculate and maintain records on hundreds of categories of items of expense which figure into the calculations of the amounts due to the parties' respective amounts. Id. at 6. Defendant states he pays vendors, government agencies, other moving agents, drivers, claimants and others and must charge back these costs to each individual move, and many thousands of calculations provided by over twenty departments, and supported by truckloads of documents are required to account for, back up and defend plaintiffs' demand of an accounting on hundreds of moves over a period of several years. Id. Defendant further states that to have a fair opportunity to defend itself, defendant requires access to the voluminous records and large staff of witnesses maintained at defendant's corporate headquarters in Indiana. Id.
Defendant states that the burden to provide an accounting for its calculations is vast because the carrier pays a vast assortment of bills arising in each interstate move and charges them back to the agent when it calculates the agent's account. (Burns Reply Aff. 7). With respect to the calculations of charges from hundreds of shipments which are in issue, defendant states that each move generates three to four files. Additionally, defendant states it maintains drivers' files, weight files, drug test files, shipper files, government files, COD files, national account files and files pertaining to agents who share in fees, many of which may be necessary to prove the charges to plaintiff calculated by defendant for each move. Id. at 8.
In view of defendant's position that the documents relevant and required to defend the case are located in the defendant's warehouses in Indiana, it appears that defendant knows the locations thereof and will be able to produce these tens of thousands of documents easily during the discovery process in Indiana.
Finally, plaintiffs have stated that "the number of documents in this case are not so numerous as to make their location a relevant factor" and are "easily transportable." (White Letter, dated July 7, 1999 at 2; P1. Mem. in Opp. at 13).
The fifth factor, the attendance of witnesses, is also an important factor, see Hernandez, 761 F. Supp. at 990, and in this case weighs in favor of defendant. Similar to the second factor regarding convenience of the witnesses, more key witnesses, whose testimony will be central to the principal claims brought in this action, would be able to attend if the case is tried in Indiana. Wechsler, 1999 WL 1261251, at *7; Berman, 30 F. Supp.2d at 658.
The sixth factor, weight accorded the plaintiffs' choice of forum, weighs in favor of plaintiffs. Case law favors giving great weight to plaintiffs' initial choice of forum and to not disturbing that choice where the forums are of equal weight. See Orb Factory, 6 F. Supp.2d at 210. "However, where the transactions or facts giving rise to the action have no material relation or significant connection to the plaintiffs chosen forum, then the plaintiffs choice is not accorded the same great weight and in fact is given reduced significance." Hernandez, 761 F. Supp. at 990; see Berman, 30 F. Supp.2d at 659 ("emphasis placed by a court on this choice diminishes where the operative facts upon which the litigation is brought bear little material connection to the chosen forum") (internal quotation marks and citation omitted); see Kolko v. Holiday Inns, Inc., 672 F. Supp. 713, 715 (S.D.N.Y. 1987) (observing that if the balance of the several factors strongly favor defendant, plaintiffs choice may be disturbed). Here, the deference due plaintiffs' choice of forum is diminished by the factors discussed above which weigh strongly in favor of transfer to Indiana. See Giuliani, S.P.A. v. Vickers, Inc., 997 F. Supp. 501, 503 (S.D.N.Y. 1998) ("The only factor that weighs against transfer is plaintiffs' choice of forum . . . That minimal connection to New York does not outweigh the numerous and substantial connections that this action has to Nebraska, and the significant factors that favor transfer to that forum.").
The seventh factor, calendar congestion, is not generally accorded great weight. See Wine Markets, 939 F. Supp. at 183. In any event, calendar congestion becomes a neutral factor in the transfer analysis because this action might be litigated in less time in the Eastern District of New York or the same amount of time in the Southern District of Indiana as in the Eastern District of New York, and transferring the venue does not necessarily increase the amount of time to decide the case.
In support of this factor, defendant has provided information regarding the docket conditions of the Southern District of Indiana and the Southern District of New York to demonstrate that the median time for disposition from filing to trial ranges from one month to six months faster over the past six years in the Southern District of Indiana. (Dft. Reply Mem. at 7 Appendix). However, the relevant comparison in this case should have been made between the Southern District of Indiana and the Eastern District of New York. In any event, even assuming these statistics were applicable to this district, the Court is reminded of a comment in Laumann Mfg. v. Castings USA, 913 F. Supp. 712 (E.D.N.Y. 1996) that this factor, though entitled to some weight, is not dispositive and that "if the parties move along as urged by the Magistrate Judge in charge of discovery, ajury case can be heard within two years in this Court."
The eighth factor, the desirability of having the case tried by a forum familiar with the substantive law to be applied weighs slightly in favor of defendant. Under 28 U.S.C. § 1404 (a), the choice of law rules of the transferor court binds the choice of law rules of the transferee court. See Van Dusen v. Barrack, 376 U.S. 612, 639, 84 S.Ct. 805, 820-21 (1964). In this case, therefore, New York choice of law rules apply. The Agency Agreement between the parties provides that "[t]his Agreement shall be governed by and construed in accordance with the State of Indiana." (Compl. Exh. A, VI, Governing Law). Thus, applying New York choice of law to a proceeding transferred to Indiana, Indiana substantive law would apply. See 19A New York Jurisprudence 2d §§ 44-45, 66 (2000 Supplement).
Although federal courts in Indiana may have a working familiarity with Indiana Law, the judges in this district are extremely knowledgeable and capable of applying Indiana law to actions tried in New York.
The ninth factor, practical difficulties, weighs in favor of defendant. In light of the Southern District of Indiana being more convenient to material witnesses, more convenient for evidence supporting the operative facts and more convenient for purposes of interpreting Indiana law, the practical difficulties of transfer are much less than the practical difficulties of remaining in New York.
Finally, the tenth factor, the interest of justice and totality of the circumstances, tilts in favor of defendant. While it is financially more burdensome for plaintiffs to try this matter in Indiana, on balance, in light of the foregoing, the above factors weigh in favor of defendant. See This observation still applies, and the time to trial may now be less than two years in the Eastern District of New York.
Carruthers, 1995 WL 378544, at *5 (interest of justice factor "has been defined to be broad enough to include the particular circumstances of each case, which, when taken together, indicate that the administration of justice will be advanced by a transfer"). Thus, transferring venue accords, under 28 U.S.C. § 1404, with the convenience of the parties and witnesses and the interest of justice.
CONCLUSION
Based on the foregoing, this Court grants defendant's motion pursuant to 28 U.S.C. § 1404 (a) for an order to transfer venue and transfers venue to the United States District Court for the Southern District of Indiana. In addition, this Court directs that the Clerk of the Court for the United States District Court for the Eastern District of New York to comply with the provisions of Local Civil Rule 83.1, Transfer of Cases to Another District, and to transfer all court files from this judicial district to the United States District Court for the Southern District of Indiana following the ten business day period in which the parties have to timely file an appeal from this Order. Accordingly, this Court finds it unnecessary to reach defendant's motion to dismiss the complaint based upon improper venue, and the motion is denied as moot.
NOTICE OF RIGHT TO APPEAL
The parties are advised that the right to appeal this Memorandum of Decision and Order must be made in accordance with Fed.R.Civ.P. 72(a) and filed with the Clerk of the Court with a copy to the undersigned within ten (10) business days of the date of this Order. Failure to file timely appeal the findings and determinations set forth in this Memorandum of Decision and Order may result in waiver of the right to appeal from a judgment of this Court based on such findings and determinations. See 28 U.S.C. 636(b)(1); Fed.R.Civ.P. 72, 6(a), 6(e); Beverly v. Walker, 118 F.3d 900, 902 (2d Cir. 1997); Shenker v. Murasky, 1996 WL 650974 (E.D.N.Y. Nov. 6, 1996).