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finding no personal jurisdiction over out-of-state law firm with clients based in New York and attorneys admitted in New York where the plaintiff "neither alleged nor offered evidence that [defendant law firm] has made specific efforts to make itself known in the New York legal market, or to establish a client base here."
Summary of this case from Lipin v. HuntOpinion
No. 02 Civ. 4695 (LTS) (HBP)
June 24, 2003
MEMORANDUM OPINION AND ORDER
Plaintiff BHC Interim Funding, L.P. ("BHC" or "Plaintiff"), a New York-based entity, alleges that it was defrauded into providing financing to a Texas entity, TTK Wireless Telecom, Inc. ("TTK"), through misrepresentations regarding the ownership of TTK's stock. Defendant Bracewell Patterson, LLP ("Bracewell"), a Texas-based law firm, represented TTK in connection with the loan transaction and delivered an opinion, the receipt of which by BHC was a condition of closing, regarding the ownership of TTK's shares, which were included in the collateral pledged to BHC in support of the loan. The action was originally commenced in New York State Supreme Court and was removed to this Court by Bracewell, which was originally the sole named defendant. Following the removal, BHC has twice amended the Complaint, to add as defendants TTK, Robert Erwin ("Erwin"), an individual who was allegedly an undisclosed TTK shareholder, and Aeicon Corporation Limited ("Aeicon"), to allege a fraudulent conspiracy, and to allege additional facts in support of subject matter jurisdiction. As used in this opinion, the term "Complaint" refers to the Second Amended Complaint, dated September 27, 2002, unless otherwise indicated.
Bracewell now moves pursuant to Rule 12(b)(2) of the Federal Rules of Civil Procedure to dismiss the Complaint for lack of personal jurisdiction or, in the alternative, for transfer of the venue of the action to the United States District Court for the Southern District of Texas. For the following reasons, Bracewell's motion is granted insofar as it seeks the transfer of this action to the United States District Court for the Southern District of Texas.
BACKGROUND
A federal court sitting in diversity jurisdiction may exercise personal jurisdiction to the same extent as courts of general jurisdiction in the state in which it sits. See Bank Brussels Lambert v. Fiddler Gonzalez Rodriguez, 305 F.3d 120, 124 (2d Cir. 2002) ("BBLII"); Fed.R.Civ.P. 4(k)(1)(A). Federal courts sitting in New York thus engage in a 2-step analysis, examining first whether New York law would support the exercise of personal jurisdiction and, if so, turning to the question of whether New York's extension of jurisdiction would under the circumstances be permissible under the Due Process Clause of the Fourteenth Amendment to the Constitution of the United States. BBL II, 305 F.3d at 124. Here, the relevant provision of New York law is New York's long-arm statute, found at section 302 of the New York Civil Practice Law and Rules.
A plaintiff opposing a motion to dismiss under Rule 12(b)(2) for lack of personal jurisdiction has the burden of establishing that the court has jurisdiction over the defendant. Bank Brussels Lambert v. Fiddler Gonzalez Rodriguez, 171 F.3d 779, 784 (2d Cir. 1999) ("BBL I"). Where, as here, no discovery has been had and no evidentiary hearing held, the plaintiff can satisfy its burden by making allegations sufficient to establish a prima facie case for the exercise of jurisdiction. All such allegations are taken as true for purposes of determination of the motion and all inferences are drawn in favor of the plaintiff. See In re Sumitomo Copper Litigation, 120 F. Supp.2d 328, 335 (S.D.N.Y. 2000); Drucker Cornell v. Assicuranzioni Generali S.P.A., No. 97 Civ. 2262 (MBM), No. 98 Civ. 9186 (MBM), 2000 WL 284222, *1 (S.D.N.Y. March 16, 2000). In opposing the instant motion, Plaintiff relies upon the allegations of its Second Amended Complaint and the affidavit of Gerald Houghton, sworn to October 14, 2002. The Court has reviewed thoroughly these documents; their content will be discussed in the context of the following analysis.
The following relevant facts are alleged in the Complaint. BHC was approached by Erwin to make the loan to TTK, Erwin holding himself out as the Chief Financial Officer of TTK. Bracewell partner, Martin Hunt, had a longstanding business and personal relationship with Erwin and with Erwin's wholly-owned company, Aeicon. (Compl. ¶ 2) BHC was informed that TTK had only three shareholders — Duke and Peter Nguyen and James Lee. The Ngyuens and Lee met personally with BHC's principals at BHC's offices in New York. (Id. ¶ 3). A New York law firm, Wolf, Block, Schorr and Solis-Cohen LLP ("Wolf-Block") represented BHC, and Bracewell represented TTK, in negotiating the deal, in which the parties ultimately agreed that BHC would make a one-year secured loan of $1,500,000 to TTK. The collateral to be pledged in support of the loan included certain property of TTK, as well as all of the issued and outstanding stock of TTK and warrants to purchase additional shares of TTK. (Id. ¶¶ 11-14). BHC was also to receive the written guarantees of TTK's shareholders. (Id. ¶ 14). Further conditions to the closing of the loan included the provision to BHC of information and documentation, including a written pledge agreement for the TTK shares and a legal opinion of Bracewell. (Id. ¶ 15).
BHC reviewed numerous documents in a "due diligence" process, all of which showed Nguyen and Lee owning all of TTK's outstanding shares. Bracewell provided the same capitalization and ownership information in a written "Legal Due Diligence Response", transmitted on stationery of Bracewell's Houston office to a Wolf Block attorney in New York. (Id. ¶¶ 17-20 and Ex. A thereto.) Plaintiff alleges that the due diligence information was fraudulent and that Bracewell, with Erwin, TTK, the Nguyens and Lee, were conspiring to conceal a plan to issue secret, fraudulent shares to Erwin and/or Aeicon before the closing. (Id. ¶ 18).
Bracewell participated in the negotiations and drafting that culminated in the execution of the loan agreement which, among other things, recited the foregoing false capitalization and share ownership information. By the time the agreement was executed, secret stock had — unbeknownst to BHC — been issued to Erwin. (Id. ¶¶ 22-24.) Bracewell later participated in forwarding all TTK shares, other than those issued to Erwin, to BHC. (Id. ¶ 26) Bracewell participated in negotiations and drafting that culminated in the execution of a stock pledge agreement in which the Nguyens and Lee represented that they were BHC's sole shareholders and covenanted that no additional stock would be issued without BHC's consent. BHC never consented to the issuance of any additional shares. (Id. ¶¶ 28-30)
The plan to issue additional shares to Erwin existed, and was known to Bracewell, as early as November 1999. The additional shares were issued on or about February 25, 2000, with Bracewell preparing a stock transfer ledger and other corporate documents reflecting the transaction around that time. (Id. ¶¶ 31-34)
On or about March 23, 2000, as required by the loan agreement, Bracewell delivered an opinion letter to Wolf Block. The letter recited that it was "'intended solely for [BHC's] use in connection with the transactions referred to'" in the opinion letter. It represented that, to Bracewell's knowledge, the authorized and issued share capital of TTK consisted of 9 million shares. That is the total amount of shares held by the Nguyens and Lee. The representation was fraudulent. The opinion letter also represented that the pledge agreement executed by the Nguyens and Lee was sufficient to give BHC a security interest in all of the pledged collateral. BHC would not have entered into the transaction and funded the loan in the absence of the opinion letter. (Id. ¶¶ 36-41.)
In or about April 2000, Bracewell participated in negotiating and drafting documentation for an additional advance under the loan, at a time when one of its attorneys had prepared a TTK shareholder agreement signed by Erwin. Although the Nyugens and Lee amended their promissory notes and confirmed their guarantees, Erwin did not execute such documents and was not asked to because his ownership was fraudulently concealed by the conspiratorial group. (Id. ¶¶ 42-45) In May 2000, a Bracewell attorney drafted a form seeing BHC's consent to the issuance of stock to Aeicon; Erwin forwarded the request to BHC. BHC did not act on the request for consent and the prior issuance of stock remained undisclosed. (Id. ¶¶ 46-48)
Bracewell did not merely assist TTK but took affirmative steps of its own "to advance and further" what Plaintiff characterizes as "the fraudulently-induced events." The Complaint alleges that a Bracewell attorney, knowing that shares had previously been issued to Erwin, nonetheless forwarded only the Nguyen and Lee shares to BHC's Wolf Block attorney in New York in June 2000. The Erwin shares were not disclosed, nor was the earlier Bracewell opinion letter corrected. In late August 2000, another Bracewell attorney corresponded with Wolf Block concerning stock powers and did not disclose the Erwin share fraud. "Bracewell was instrumental in having those stock powers delivered to Wolf Block." (Id. ¶¶ 48-50).
At TTK's request, Bracewell in or about February 2001 participated in legal work relating to an amendment to the loan agreement extending the maturity date of the loan. Bracewell engaged in correspondence with Wolf Block in this connection. Erwin did not provide or confirm a guarantee in connection with the amendment. (Id. ¶¶ 51-52)
No information relating to the Erwin shares was provided to BHC until July 2001. (Id. ¶ 56.) Bracewell never amended its opinion letter. (Id. ¶ 57)
TTK defaulted on the loan. BHC's loan guarantee enforcement and collateral realization efforts were substantially thwarted by Erwin, who invoked provisions of the previously-concealed documents in asserting his rights as a TTK shareholder. (Compl. ¶¶ 61-67) Bankruptcy petitions by TTK and the Nguyens followed; BHC has lost its entire investment and related expenses. (Id. ¶¶ 68-79).
DISCUSSION
Section 302(a) of the New York CPLR provides three principal bases for the exercise of long-arm jurisdiction. Such jurisdiction may be exercised over a person who:
1. transacts any business within the state or contracts anywhere to supply goods or services in the state; or
2. commits a tortious act within the state, except as to a cause of action for defamation of character arising from the act; or
3. commits a tortious act without the state causing injury to person or property within the state, except as to a cause of action for defamation of character arising from the act, if he
(i) regularly does or solicits business, or engages in any other persistent course of conduct, or derives substantial revenue from goods used or consumed or services rendered, in the state, or
(ii) expects or should reasonably expect the act to have consequences in the state and derives substantial revenue from interstate or international commerce. . . .
N.Y.C.P.L.R. § 302 (McKinney 2001). Plaintiff contends that jurisdiction can be exercised in this case pursuant to CPLR sections 302(a)(1), 302(a)(2) or 302(a)(3)(ii). The Court reviews each of these contentions in turn.
Section 302(a)(1) of the CPLR provides for jurisdiction over a non-domiciliary who, in person or through an agent, "transacts any business within the state or contracts anywhere to supply goods or services in the state." A finding that a party has transacted business in N.Y. within the meaning of this statute requires that the defendant "have engaged in "purposeful" activities within New York and that there be a "substantial relationship" between those activities and the transaction from which the cause of action arises. See PDK Labs, Inc v. Friedlander, 103 F.3d 1105, 1109 (2d Cir. 1997); Southridge Capital Management, LLC v. Lowry, 188 F. Supp.2d 388, 397 (S.D.N.Y. 2002). Plaintiff asserts that its allegations concerning the preparation and delivery of the opinion letter and continuing misrepresentations in connection with the transaction are sufficient to constitute a prima facie showing of jurisdiction over Bracewell on a "transacting business" basis. The Court disagrees, as the relevant allegations of the Complaint do not demonstrate that Bracewell transacted business in New York.
Notably absent from the Complaint's detailed recitation of facts relating to the alleged fraud are allegations that could reasonably be construed to support even an inference of the "purposeful conduct" required for a finding that Bracewell transacted business in New York in connection with the TTK events. Bracewell, a Texas entity, represented BHC's counter-party, which was another Texas entity. There is no allegation that any of Bracewell's legal work was done in New York or that Bracewell participated in any transaction-related activities in New York. Nor does the Complaint allege that Bracewell agreed to provide services or goods in New York. Rather, the Complaint alleges that certain documents were delivered by Bracewell to BHC's attorneys or representatives in New York.
The Houghton Affidavit focuses on BHC's New York presence and orientation, and recites travel to New York by the Nyugens and Lee. Its only mention of Bracewell is an allegation that Martin Hunt, a Bracewell attorney, participated by telephone in meetings held at BHC's offices in New York.
The totality of circumstances alleged, including the telephonic communications, is insufficient to support the exercise of jurisdiction over Bracewell pursuant to CPLR section 302(a)(1). See BBL I, 171 F.3d at 787-89 (No CPLR section 302(a)(1) jurisdiction over Puerto Rican law firm retained by New York banks to provide opinion in connection with transactions, where all legal work performed in Puerto Rico, no physical presence of defendant in New York, telephonic conversations did not include representation of client at New York closing, defendant was solicited outside New York to perform the services). The cases cited by Plaintiff do not compel any different conclusion. Schur v. Porter, 712 F. Supp. 1140 (S.D.N.Y. 1989) involved the representation of individuals and entities based, and whose business was based, in New York, in connection with a New York business transaction, and a malpractice claim by the clients arising from the services. Liberatore v. Calvino, 293 A.D.2d 217 (1st Dep't 2002) also involved a malpractice claim arising from services provided in New York, namely pursuit of New York litigation.
In the instant case, by contrast, Plaintiff is suing the out-of-state firm that represented its out-of-state contract counter-party; there is no allegation of participation by Bracewell in closing or other activities in New York, nor any allegation that the offending documents were prepared, or the alleged misrepresentations made by Bracewell, in New York. The activity alleged in the Complaint is insufficient, even when construed in the light most favorable to Plaintiff, to support CPLR section 302(a)(1) long arm jurisdiction.
Plaintiff also asserts that personal jurisdiction may properly be exercised over Bracewell under CPLR section 302(a)(2), which authorizes the exercise of long arm jurisdiction where a defendant has, in person or through an agent, "commit[ed] a tortious act within the state." Plaintiff relies on its allegations of Bracewell's participation in a conspiracy to accomplish the alleged fraud, as the basis for its argument that Bracewell committed a tort in the state.
It is well established under New York law that the acts of a co-conspirator may be attributed, as those of an agent, to an out-of-state defendant under certain circumstances. "However, before an agency relationship will be held to exist under section 302(a)(2), a showing must be made that the alleged agent acted in New York for the benefit of, with the knowledge and consent of, and under some control by, the nonresident principal." Grove Press Inc. v. Angleton, 649 F.2d 121, 122 (2d Cir. 1981). To establish prima facie a conspiracy as the basis for exercise of jurisdiction under section 302(a)(2), a party must, first, make a prima facie showing of a conspiracy. Such a showing requires allegation of the primary (underlying) tort and four elements: (a) a corrupt agreement between two or more persons, (b) an overt act in furtherance of the agreement, (c) the parties' intentional participation in furtherance of a plan or purpose, and (d) resulting damage or injury. In re Sumitomo Copper Litigation, 120 F. Supp.2d 328, 339 (S.D.N.Y. 2000) (citing Chrysler Capital Corp v. Century Power Corp., 778 F. Supp. 1260, 1267 (S.D.N.Y. 1991)). In addition to the prima facie showing of the existence of a conspiracy, the plaintiff must allege specific facts warranting the inference that the defendant was a member of the conspiracy, and that a co-conspirator committed a tortious act in New York. Sumitomo, 120 F. Supp.2d at 339. To establish membership, the plaintiff must show "(1) that the out-of-state co-conspirator had an awareness of the effects of this activity in New York, (2) that the New York co-conspirators' activity was for the benefit of the out-of-state conspirators, and (3) that the co-conspirators in New York acted at the behest of or on behalf of, or under the control of the out-of-state conspirators." Id. at 340 (quoting Laborers Local 17 Health and Benefit Fund, 26 F. Supp.2d 593, 602 (S.D.N.Y. 1998)). See also Cleft of the Rock Foundation v. Wilson, 992 F. Supp. 574, 583 (E.D.N.Y. 1998).
Here, Plaintiff has alleged sufficiently the existence of a conspiracy, overt acts, intentional participation and damages, albeit in a conclusory fashion. Plaintiff has failed, however, sufficiently to allege facts from which an inference of Bracewell's membership in the alleged conspiracy can properly be drawn. Most significantly, Plaintiff fails to allege any facts from which such membership could reasonably be inferred on the basis that the alleged activity was for Bracewell's benefit, or that any action of the co-conspirators in New York was taken at the behest of, on behalf of, or under the control of Bracewell. The Complaint describes a law firm-client relationship and alleges no facts from which it could be inferred that Bracewell was instead a principal controlling or benefitting from the activity in the underlying, allegedly fraudulent transaction as opposed to earning legal fees and performing legal work for its client. Indeed, the Complaint is devoid of any allegations whatsoever of benefit to, or control by, Bracewell. In its brief, Plaintiff argues that the requisite benefit can be inferred from Bracewell's interest in earning fees and continuing its relationship with the client. Such interests, standing alone, are consistent with the normal professional and economic motives of legal counsel and therefore are insufficient to support an inference of membership in a business conspiracy, operation of the alleged conspiracy for the law firm's benefit or on its behalf, or of the law firm's control of actions taken by the alleged co-conspirators. Furthermore, Plaintiff has proffered no rational economic motive for Bracewell's alleged membership in the conspiracy which, if uncovered and proven, would expose it to liability for the funds disbursed to its client. Cf. Matsushita Electric Ind. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 596 (1986) (absence of rational motive bears on range of permissible conclusions that may be drawn from ambiguous circumstantial evidence of conspiracy); Atlantic Gypsum Co., Inc. v. Lloyd's International Corp., 753 F. Supp. 505, 512 (S.D.N.Y. 1990) (view of facts that "defies economic reason" does not yield a reasonable inference of fraudulent intent).
CPLR section 302(a)(3)(ii), providing for jurisdiction over an out-of-state party that commits a tortious act outside the state causing injury within the state, where the actor expects or should reasonably expect the act to have consequences in the state and derives substantial revenue from interstate or international commerce, is the chief focus of Plaintiff's effort to establish personal jurisdiction over Bracewell in this action. Plaintiff alleges that Bracewell's alleged misrepresentations constituted the requisite out-of-state torts, and that Bracewell expected or should reasonably have expected the acts to have consequences in New York, where Plaintiff is located. Plaintiff does not, however, in this third iteration of its Complaint, allege that Bracewell derives substantial revenues in from interstate or international commerce. Plaintiff merely alleges that Bracewell has as clients several New York-based entities and that Bracewell maintains several offices outside of the state of Texas (none of which is in New York), has some lawyers who are admitted to practice in New York, and characterizes itself as an international law firm.
Bracewell has, however, admitted in its papers submitted in opposition to the motion that some 14 per cent of its year 2001 revenue ($20 million of $141 million in total firm revenue) was derived from its offices outside of the state of Texas. Reply Aff. of Mary Anne Jay at ¶¶ 2, 3. The Court assumes for purposes of this analysis that the portion of Bracewell's revenues derived from interstate or international commerce is substantial. The Court also accepts as true for purposes of this analysis Plaintiff's representation in its brief that the initial disbursement of the loan in question was made in New York, in reliance on the alleged misrepresentations, such that New York was the situs of Plaintiff's injury. See BBL I, 171 F.3d at 792. Plaintiff's anticipated reliance on the Bracewell opinion in taking action in New York is sufficient to satisfy the requirement of contemplated in-state consequences. LaMarca v. Pak-Mor Manufacturing Co., 95 N.Y.2d 210, 216 (2000) ("The defendant need only reasonably foresee that any defect in its product would have direct consequences within the State.").
The disbursement allegation is not made in the Complaint.
The information before the Court is not, however, indicative of a purposeful availment by Bracewell of the privileges of conducting business in New York, a criterion until recently uniformly included in CPLR section 302(a)(3)(ii) jurisdictional analyses. See Kernan v. Kurz-Hastings, 175 F.3d 236, 241 (2d Cir. 1999). In LaMarca, its most recent examination of jurisdiction under the statute, however, the New York State Court of Appeals omitted this element from its catalogue of the elements required to establish jurisdiction, leading the United States Court of Appeals for the Second Circuit to question, without deciding, whether LaMarca eliminated the purposeful availment element of the traditional test for section 302(a)(3)(ii) jurisdiction. Despite its omission of purposeful availment from the five-factor test it does not, however, appear that the LaMarca Court considered New York business activity irrelevant to its section 302(a)(3)(ii) analysis. The Court not only found unequivocally that, as "[a] Texas corporation with a manufacturing facility in Virginia," the defendant in that case was "inherently engaged in interstate commerce" (LaMarca, 95 N.Y.2d at 215), but went on to note the defendant company's use of a New York distributor and district representative, as well as the defendant's New York sales figures, in holding that the requisite showing of substantial revenue from interstate commerce had been established. Id. LaMarca's attention to the defendant's New York activity suggests strongly that the Court of Appeals continues to consider purposeful availment an element of the interstate commerce analysis for long arm jurisdictional purposes. Purposeful availment remains, in any event, an element of the federal constitutional test for "'minimum contacts with [the forum state] such that the maintenance of the suit does not offend 'traditional notions of fair play and substantial justice.'" Id. at 216, quoting International Shoe Co. v. State of Washington, 326 U.S. 310, 316 (1945). "A non-domiciliary tortfeasor has 'minimum contacts' with the forum State — and may thus reasonably foresee the prospect of defending a suit there — if it 'purposefully avails itself of the privilege of conducting activities within the forum State.'" Id. (citations omitted).
"The conferral of jurisdiction under [CPLR section 302(a)(3)(ii)] rests on five elements: First, that defendant committed a tortious act outside the State; second, that the cause of action arises from that act; third, that the act caused injury to a person or property within the State; fourth, that defendant expected or should reasonably have expected the act to have consequences in the State; and fifth, that defendant derived substantial revenue from interstate or international commerce." LaMarca, 95 N.Y.2d at 214.
That Bracewell has clients that are based in New York is not indicative of such purposeful availment — Plaintiff does not allege that Bracewell secured those clients by advertising in New York, or that it established any sort of presence here in connection with those relationships. Cf. BBL II, 305 F.3d at 126-127 (finding jurisdiction under CPLR section 302(a)(i) and satisfaction of due process requirements based on maintenance of apartment in New York for servicing New York clients, faxing newsletters to persons in New York, and advertising its "close relationship with the Federal Reserve Bank of New York"). Nor does the allegation that certain of Bracewell's lawyers are admitted to practice in New York establish, alone or in combination with the client census allegations, purposeful availment. Plaintiff has neither alleged nor offered evidence that Bracewell has made specific efforts to make itself known in the New York legal market, or to establish a client base here. Cf. BBL II at 128-29. Accordingly, Plaintiff's proffer in opposition to the motion is insufficient to show a basis for a finding of the requisite minimum contacts.
The due process analysis further queries whether "'the assertion of personal jurisdiction comports with "traditional notions of fair play and substantial justice" — that is, whether it is reasonable under the circumstances of the particular case.'" Id. at 129 (citations omitted.) Five factors are relevant to this determination: "'(1) the burden that the exercise of jurisdiction will impose on the defendant; (2) the interests of the forum state in adjudicating the case; (3) the plaintiff's interest in obtaining convenient and effective relief; (4) the interstate judicial system's interest in obtaining the most efficient resolution of the controversy; and (5) the shared interest of the states in furthering substantive social policies.'" Id. (citations omitted).
Bracewell, unlike the defendant in BBL II, has no ongoing New York presence. Although telecommunications and transportation decrease the burden of litigating in a forum remote from Bracewell's home base and hundreds of miles from its East Coast office, it is clear that the exercise of jurisdiction will impose a burden on this defendant which has not, as explained above, been shown purposely to have availed itself of the privilege of conducting business in New York and did not do so in connection with the transaction in question. New York, as Plaintiff's home state, clearly has an interest in regulating the business transactions at issue. In that Bracewell's alleged misconduct arose in the context of its relationship with its Texas client that state may, however, have a greater interest in regulating the particular form of professional misconduct here alleged. The third factor can but necessarily favor Plaintiff as a geographic matter; to the extent it goes to the relative efficiency of the potential fora in adjudicating disputes there is nothing in the record to show that this jurisdiction would do so as to Bracewell more, or less, efficiently than the United States District Court for the Southern District of Texas. For the same reason the fourth factor is neutral; there is nothing to indicate that litigation in either forum would offend relevant social policies of either jurisdiction. Furthermore, although some potential for economy in the presentation of proof could be lost were the litigation against the other defendants to continue here while separate litigation proceeds in Texas against Bracewell, it is not at all clear that nonparty witness testimony to the Texas facts and circumstances can efficiently be obtained in connection with New York-based litigation. The combination of factors as a whole favoring Bracewell, the Court finds, in the context of the entire record, that it would be unreasonable under the circumstances of this case to require Bracewell to defend this suit in New York. Accordingly, Plaintiff has failed to demonstrate the propriety of the Court's exercise of personal jurisdiction over defendant Bracewell.
The Court notes in this connection that Bracewell is the only named defendant that has thus far appeared in this litigation.
The Court has determined that grant of the alternative branch of Bracewell's motion — for transfer to the United States District Court for the Southern District of Texas — is appropriate. Even where a court lacks personal jurisdiction of a defendant, it has the power to transfer venue, "[f]or the convenience of parties and witnesses, in the interests of justice," to another district in which it might have been brought. Fort Knox Music Inc. v. Baptiste, 257 F.3d 108, 111-12 (2d Cir. 2001) (citing 28 U.S.C. § 1404(a)). The Court has carefully considered the circumstances of this case and the relevant factors. Here, there is no dispute that the action could have been brought as against Bracewell in the Southern District of Texas, witnesses knowledgeable as to Bracewell's activities are located in Texas, there has been no showing that the attendance of such witnesses in New York could be compelled, other defendants are Texas citizens as well, relevant documents are located in Texas and, as explained above, this Court lacks personal jurisdiction of defendant Bracewell. Under these circumstances, transfer of the action to the Southern District of Texas serves the convenience of parties and witnesses and the interests of justice. See Reliance Ins. Co. v. Six Star Inc., 155 F. Supp.2d 49, 56-57 (S.D.N.Y. 2001) and cases cited therein.
See Preliminary Pretrial Statement, dated October 23, 2002, at ¶ 2.
Defendant Bracewell's motion is therefore granted to the extent it seeks the transfer to the United States District Court for the Southern District of Texas of Plaintiff's claims against Bracewell. Bracewell's motion is denied insofar as it seeks dismissal of the action.
Plaintiff BHC shall appear before the undersigned for a pre-trial conference on August 29, 2003 at 3:30 p.m. if it has not discontinued the action as against defendants Erwin, Aeicon and TTK before that time.
SO ORDERED.