Summary
ordering transfer based on location of non-party witnesses and physical evidence
Summary of this case from Worldwide Financial LLP v. Kopko, (S.D.Ind. 2004)Opinion
CASE NO. 1:03-cv-0638-DFH
February 10, 2004
ENTRY ON MOTION TO DISMISS
In this diversity action, plaintiff JMC Technology Group, Inc. alleges that it sold an expensive piece of manufacturing machinery to defendant EDM Sales Supplies, Inc., and that EDM has failed to pay the agreed sum. EDM contends, among other defenses, that the machine did not work properly and that it never actually accepted delivery of the machine. Now pending is EDM's motion to dismiss this action for lack of personal jurisdiction. Defendant EDM is located in Minnesota, while plaintiff JMC is in Indiana. As explained below, the court denies the motion to dismiss but finds that the case should be transferred to the District of Minnesota pursuant to 28 U.S.C. § 1404(a).
Plaintiff JMC acts as a United States distributor for Okada, a Japanese company that manufactures CNC machining equipment. For several years, EDM acted as a representative for JMC in Minnesota and other adjoining states, though neither party has presented a written agreement reflecting such a relationship. The machine in question in this case was apparently never in the physical custody of either JMC or EDM before the sale occurred. The machine in question was shipped directly from Okada in Japan to a company called Tooling Science, Inc. in Minnesota. Tooling Science was a customer of EDM. EDM placed the purchase order in its own name, however, and submitted by mail the order and down payment to JMC in Indiana.
Indiana Trial Rule 4.4(A), which is Indiana's "long-arm" statute, now provides that Indiana courts may exercise jurisdiction over a defendant "on any basis not inconsistent with the Constitutions of this state or the United States." This case is very close to the edge of the federal constitutional limits of personal jurisdiction, but the court finds that specific personal jurisdiction is proper in Indiana. EDM chose to do business with JMC, an Indiana business, and that relationship extended over several years. The ongoing business relationship was not as extensive as the relationship in Burger King Corp. v. Rudzewicz, 471 U.S. 462 (1985), but it was still a relationship that extended over several years and several substantial transactions. JMC's contacts with Indiana were sufficiently purposeful and related to the cause of action here so that EDM could reasonably anticipate being haled into court here in the event of a dispute with JMC arising from that relationship, such as EDM's refusal to pay for machinery purchased from the Indiana business. See Burger King, 471 U.S. at 474.
The interstate business transaction at issue here was not an isolated instance, like the situations discussed in Federated Rural Elec. Ins. Corp. v. Inland Power Light Co., 18 F.3d 389, 395 (7th Cir. 1994) ("Additionally, the purchase of goods or insurance from the forum state alone is an insufficient foundation upon which to assert personal jurisdiction."), citing Lakeside Bridge Steel Co. v. Mountain State Constr. Co., 597 F.2d 596, 604 (7th Cir. 1979) (mailing of purchase order to forum state "does not significantly aid jurisdiction."), or Capitol Indemnity Corp. v. Certain Lloyds Underwriters, 487 F. Supp. 1115, 1121 (E.D. Wis. 1980) ("One who merely purchases insurance from an insurer residing in the forum state does not, by the purchase through an intermediary, subject himself to the jurisdiction of the courts of the insurer's state").
Although the court has the power to exercise jurisdiction over EDM, the briefing on the jurisdictional issue shows that a transfer to the District of Minnesota under 28 U.S.C. § 1404(a) is clearly appropriate for the convenience of the witnesses and in the interests of justice. This type of § 1404(a) transfer, for the convenience of the parties and witnesses and in the interests of justice, is committed to the sound discretion of the district court. Under § 1404(a), a transfer is appropriate if Minnesota would be "clearly more convenient" than the Southern District of Indiana. Coffey v. Van Dorn Iron Works, 796 F.2d 217, 220 (7th Cir. 1986).
Either forum, Indiana or Minnesota, would be inconvenient for one party, and merely shifting inconvenience from one party to another does not warrant a transfer. E.g., Moore v. ATT Latin Am. Corp., 177 F. Supp.2d 785, 789 (N.D. Ill. 2001), citing Promatek Med. Sys., Inc. v. Ergometrics, Inc., 1990 WL 19491, *4 (N.D. Ill. 1990); Sage Prods., Inc. v. Devon Indus., Inc., 148 F.R.D. 213, 216 (N.D. Ill. 1993); accord, Educational Visions, Inc. v. Time Trend, Inc., 2003 WL 1921811, *7 (S.D. Ind. April 17, 2003) (denying motion to transfer that would have merely shifted inconvenience between parties); Beller v. MacDermid, Inc., 2002 WL 31045377, *6 (S.D. Ind. Sept. 9, 2002) (same).
Because merely shifting inconvenience from one party to another does not justify a transfer, a major concern under § 1404(a) is the availability of non-party witnesses and evidence. The assumption is that the parties will be sufficiently motivated to have their own employees or other allies appear for trial wherever it might take place. See, e.g., FUL Inc. v. Unified Sch. Dist. No. 204, 839 F. Supp. 1307, 1311(N.D. Ill. 1993), cited in Greene Mfg. Co. v. Marquette Tool Die Co., 1998 WL 395155, *3 (N.D. Ill. July 9, 1998). Parties may use Rule 45 of the Federal Rules of Civil Procedure to conduct discovery all over the United States, so the principal concern along these lines is to make non-party witnesses available for trial. The aim is to minimize the risk of "trial by deposition." See, e.g., Volkswagen Aktiengesellschaft v. Dee Engineering, Inc., 2003 WL 1089515, *4 (S.D. Ind. March 4, 2003); Kendall U.S.A., Inc. v. Central Printing Co., 666 F. Supp. 1264, 1268 (N.D. Ind. 1987); Preston v. Missouri-Nebraska Exp., Inc., 1991 WL 626751, *2 (W.D. Mo. Oct. 16, 1991).
In this case, critical non-party evidence will come from Tooling Science, which was EDM's customer in Minnesota. Tooling Science will have evidence concerning the machine in question and whether it operated properly. Also, EDM has come forward with evidence showing that most of its contacts with JMC were in Minnesota. Specifically, a now-former JMC employee who actually used office space in EDM's offices is expected to testify that he exercised control over the machine (by removing and replacing from the machine a critical part that was defective) at a time when JMC contends the machine had already been sold to and accepted by EDM. That former JMC employee also resides in Minnesota.
Accordingly, because the vast majority of critical non-party evidence is in Minnesota, and because most of the relevant events occurred there, the court finds that a transfer is warranted under 28 U.S.C. § 1404(a). The clerk of the court is directed to transfer this case to the United States District Court for the District of Minnesota.
So ordered.