Opinion
CIVIL ACTION NO. 3:02-CV-0764-P
July 9, 2002
MEMORANDUM OPINION AND ORDER
Now before the Court for consideration are:
1. Defendant Hauppauge Computer Works, Inc.'s Motion to Transfer Venue to the United States District Court for the Eastern District of New York, with brief in support and appendix filed April 15, 2002;
2. Plaintiff Polywell International, Inc.'s Response to Defendant's Motion to Transfer Venue, with brief in support and appendix, filed May 6, 2002; and
3. Defendant's Reply to Plaintiff's Response to Defendant's Motion to Transfer Venue, with Exhibit, filed May 23, 2002.
After reviewing the motion, the parties' arguments and briefing and the relevant law, the Court hereby DENIES Defendants' Motion to Transfer Venue.
BACKGROUND
Plaintiff Polywell International, Inc. ("Polywell") filed suit on March 14, 2002, in the 192nd District Court for Dallas County, Texas, claiming damages in the amount of $361,682.18 arising from Defendant Hauppauge Computer Works, Inc.'s ("Hauppauge") alleged failure to pay for customized circuit boards and cable assemblies ("products") received from Polywell. Pl.'s Original Pet. ¶ VII. On April 12, 2002, Hauppauge removed the action to the U.S. District Court for the Northern District of Texas, Dallas Division, and now seeks to transfer venue from this Court to the U.S. District Court for the Eastern District of New York, Hauppauge Division.
Hauppauge does not dispute that it received the products but asserts an affirmative defense that it did pay Polywell's New York "agent," Martin H. Bernstein, ("Bernstein") for the products it received. Br. in Supp. of Def.'s Mot. to Transfer Venue at 5. (hereinafter "Def.'s Br."). Bernstein, who operates under the business name "MS Associates," resides in New York and is not a party to this action. App. to Def.'s Mot. to Transfer Venue at 3 (hereinafter "Def.'s App.").
Defendant claims that in November 2000, Bernstein, acting as Polywell's exclusive agent, requested that Hauppauge make payment by wire transfer into MS Associates' account for all products shipped to Hauppauge's European facilities. Id. at 4. Hauppauge contends that it continued to make payment in this manner until February 2002. Def.'s Br. at 5. Hauppauge states that it paid for products shipped to its U.S. facilities by issuing checks to Polywell which were collected by Bernstein to be forwarded by him to Polywell. Def.'s App. at 4. Polywell claims never to have received any of these payments and calls into question its relationship with Bernstein, referring to him as an "alleged agent," a "former independent sales representative" with a "limited purpose." Polywell Int'l, Inc.'s Br. in Resp. to Def.'s Mot. to Transfer Venue ¶¶ 2, 19 (hereinafter "Pl.'s Br."); App. to Polywell Int'l, Inc.'s Br. in Resp. to Def.'s Mot. to Transfer Venue at 4 ¶¶ 12-13 (hereinafter "Pl's App."). On February 18, 2002, Polywell sent Hauppauge a formal demand letter requesting immediate payment of all allegedly past due amounts. Def.'s App. at 5. When Defendant claimed it had already paid Polywell via Bernstein, Plaintiff filed the instant suit.
DISCUSSION
The issue before this Court is whether it is proper to transfer this case from the Plaintiff's chosen forum, the Northern District of Texas, to the Eastern District of New York as requested by Defendant. Following Defendant's removal of this action to federal court, Defendant properly brings its request for transfer of venue under 28 U.S.C. § 1404(a). See Burlington Northern Santa Fe Railway v. Herzog Svcs., 990 F. Supp. 503, 504 (N.D. Tex. 1998) (stating that following removal of an action by a defendant, defendant may not seek transfer based on claim of improper venue but may seek transfer for issues of convenience). Pursuant to section 1404(a), a district court, at its discretion, may transfer a case to any district where it could have been originally brought "for the convenience of the parties and witnesses in the interest of justice." Jarvis Christian College v. Exxon Corp., 845 F.2d 523, 528 (5th Cir. 1988); see also Peteet v. Dow Chemical Co., 868 F.2d 1428, 1436 (5th Cir. 1989). It is clear that this action might have been properly brought in the Eastern District of New York. Defendant is incorporated and has its principal place of business in New York. Def.'s App. at 2. Plaintiff has transacted its business with Defendant, at least in part, through its alleged agent, Bernstein, a New York resident. Pl.'s App. at 4 ¶¶ 11-13. So, the Court focuses its attention on whether issues of convenience and justice warrant a transfer of venue.
The burden falls squarely on the movant to prove with particularity why its potential inconvenience and issues of justice favor disturbing Plaintiff's choice of forum. Time, Inc. v. Manning, 366 F.2d 690, 698 (5th Cir. 1966); Gundle Lining Const. Corp. v. Fireman's Fund Ins., 844 F. Supp. 1163, 1165 (S.D. Tex. 1994); Young v. Armstrong World Indus., Inc., 601 F. Supp. 399, 401 (N.D. Tex. 1984). Though this action could have originally been brought in Hauppauge, New York, Plaintiff chose Texas as the forum in which to bring this claim. Defendant alleges that Polywell is an international company based in Taiwan with an American subsidiary operating in Dallas County, Texas. Def.'s App. at 2-3. However, Plaintiff argues that a Texas forum is proper. Polywell President Robert Lo states in his affidavit that Polywell is a Texas corporation, has its principal place of business here, and neither owns nor is owned by any Taiwan-based company. Pl.'s App. at 3 ¶¶ 3-5.
It is "well settled in the Fifth Circuit that `a Plaintiff's privilege to choose, or not be ousted from, his choice of forum is highly esteemed.'" Aguero v. Christopher, 481 F. Supp. 1272, 1274 (S.D. Tex. 1980) (quoting Time, 366 F.2d at 698). However, Plaintiff's choice of forum, while significant, is no longer accorded the decisive weight it once enjoyed under the doctrine of forum non conveniens but is merely one of several factors that must be addressed when considering a transfer of venue. Gundle, 844 F. Supp. at 1165; Continental Airlines, Inc. v. American Airlines, Inc., 805 F. Supp. 1392, 1395 (S.D. Tex. 1992).
The overarching purpose of section 1404(a) is to protect litigants, witnesses, and the public against unnecessary inconvenience and expense by preventing the waste of time, energy, and money. Van Dusen v. Barrack, 376 U.S. 612, 616 (1964); Cooper v. Pied Piper Mills, Inc., No. Civ.A. 3:98-CV-1309-D, 1998 WL 713270, *1 (N.D. Tex. 1998) (Fitzwater, J.).
To determine whether transferring venue will serve this purpose, the trial court "must consider all relevant factors to determine whether or not the balance of litigation would more conveniently proceed and the interest of justice be better served" by the transfer. Id. (quoting 15 Charles Alan Wright, Arthur R. Miller Edward H. Cooper, Federal Practice and Procedure § 3847, at 370 (2d ed. 1986)). Typically, these relevant factors include the (1) convenience of parties, (2) convenience of material witnesses, (3) availability of process to compel unwilling witnesses, (4) cost to witnesses of being present, (5) relative accessibility to sources of proof; (6) calendar congestion, (7) location of events in issue, (8) general interest of justice. D.T. Systems, Inc. v. SOS Co., Inc., No. Civ.A. 301CV1560G, 2002 WL 413898, *3 (N.D. Tex. 2002) (Fish, J.) (citing Gundle, 844 F. Supp. at 1165).
Factors (2), (3), and (5) — Convenience of Material Witnesses, Availability of Process to Compel Unwilling Witnesses, and Accessibility to Sources of Proof
Witness convenience is often the most important factor in a section 1404(a) motion. Gundle, 844 F. Supp. at 1166. The list of potential witnesses in this case is a short one. Both Hauppauge and Polywell foresee presenting the testimony of a few employees, all residents of either New York or Texas respectively. Reply to Pl.'s Resp. to Def.'s Mot. to Transfer Venue at 3 (hereinafter "Def.'s Reply"); Pl.'s Br. at 8 ¶ 23. However, the Court declines to base venue on which party can produce the greater number of "warm bodies" on the witness stand from a given location. "[C]ourts have uniformly `refused to let applications for transfer become a battle of numbers.'" Dupre v. Spanier Marine Corporation, 810 F. Supp. 823, 826 (S.D. Tex. 1993) (quoting Wright, Miller Cooper, supra § 3851, at 424-25). Instead, the court is more interested in the substance of a potential witness' testimony, its materiality to the issue at hand, and the ease of access to such key testimony. See Scheidt v. Klein, 956 F.2d 963, 966 (10th Cir. 1992); see also Gundle, 844 F. Supp. at 1166-67; see also State Street Capital Corp. v. Dente, 855 F. Supp. 192, 197 (S.D. Tex. 1994).
It is well established that "the convenience of one key witness may outweigh the convenience of numerous less important witnesses." Dupre, 810 F. Supp. at 825 (citing Young, 601 F. Supp. at 401-402). To transfer venue based in part on witness convenience, the moving party must not merely allege that certain witnesses are key, but must meet the dual burden of specifically identifying key witnesses and outlining the substance of their testimony. Smith v. Colonial Penn Ins. Co., 943 F. Supp. 782, 784 (S.D. Tex. 1996); Dupre, 810 F. Supp. at 825. In support of its motion, Defendant has specifically named Bernstein as the key non-party witness vital to this suit. Def's Br. at 14. Hauppauge argues that central to this action is Bernstein's knowledge of the alleged transactions that took place in New York between him — purportedly acting on behalf of Polywell — and Hauppauge. Id. at 14-15. Hauppauge has specifically outlined the testimony it expects from Bernstein regarding his relationship with Polywell, his authority under that relationship, and his disposition of moneys intended as payment for Polywell products. Def.'s Reply at 4-5.
However, Bernstein is not the only witness and the Court considers his potential testimony in the context of the agreed facts and the other testimony likely to be offered at trial. While Bernstein is a central witness, other testimony from Plaintiff's and Defendant's employees regarding the parties' relationship with each other and with Bernstein are as important, if not more so, than what Bernstein himself says. It appears undisputed that Bernstein directed Defendant to make checks payable to him and to send the cheeks directly to him. Other witnesses will provide the context which will prove the importance of Bernstein's actions. Both parties will likely need to call witnesses to testify about these events. Although Bernstein is in New York and may be unwilling to testify in Texas, the Court finds that to transfer the case to New York would amount to shifting the inconvenience in presenting witnesses from Defendant to Plaintiff.
Factors (1), (4) Parties' Convenience and Cost to Witnesses of Being Present
A district court "will not transfer any case where the only practical effect is a shifting of inconveniences from the non-moving party to the moving party." Sanders v. State St. Bank and Trust Co., 813 F. Supp. 529, 535 (S.D. Tex. 1993). Venue transfer is not appropriate where it serves to merely shift the burden, expense, and inconvenience of litigation between parties. Time, 366 F.2d at 698; Continental Airlines, 805 F. Supp. at 1392.
Plaintiff's strongest argument is that Texas is its principal place of business and state of incorporation and it is not one to be dismissed lightly. If the chosen forum is a plaintiff's home and defendant's home is the transfer district, then plaintiff's choice is favored. Time, 366 F.2d at 698. However, the Supreme Court acknowledged the court's greater freedom to consider other factors when it held "the term `for the convenience of parties and witnesses, in the interest of justice,' intended to permit courts to grant transfers upon a lesser showing of inconvenience. This is not to say that the relevant factors have changed or that the plaintiff's choice of forum is not to be considered, but only that the discretion to be exercised is broader." Norwood v. Kirkpatrick, 349 U.S. 29, 32 (1955).
As noted above, although transferring to New York would ease the burden on Defendant to produce Bernstein, Bernstein's testimony is not so paramount as to shift the inconvenience. The Court does not find that either of these factors favors disturbing the Plaintiff's choice of forum.
Factors (7) and (8) location of events in issue and general interest of justice
Plaintiff established a connection with Bernstein in New York for the specific purpose of furthering its business there and in so doing set in motion the chain of events that led to this action. Although payment never reached Polywell in Texas, thereby causing the alleged injury in that forum, Defendant claims that payment was effectively made to Polywell via its New York agent, both by wire transfer to M.S. Associates and by checks made payable to Polywell and retrieved by Bernstein. Plaintiff's choice of forum is given less emphasis where there is "little material connection between the chosen forum and the facts or issues of the case." Anadigics, Inc. v. Raytheon Co., 903 F. Supp. 615, 617 (S.D.N.Y. 1995). Several events occurred in New York involving a New York resident and Polywell representative, Bernstein, and a New York corporation, Hauppauge, and the wire transfers and deposits were handled by New York financial institutions. However, Texas is the corporate home of Plaintiff, Plaintiff chose to bring suit here, and Defendant has not shown sufficient reason to disturb Plaintiff's choice of forum.
Other issues relating to these proceedings have a neutral effect on both parties or are too insubstantial to outweigh the importance of those factors already discussed. The Court concludes Defendant has failed to overcome the presumption favoring Plaintiff's choice of forum.
Delay — The case is in its early stages so transfer would have little chance of delay or prejudice. See Barton v. Young, 144 F. Supp.2d 685, 688 (E.D. Tex. 2001). Calendar Congestion — The possibility that trial will be held sooner in Texas than in New York does not justify denial of transfer where other issues support transfer. Burstein v. Applied Extrusion Technologies, Inc., 829 F. Supp. 106, 114 (D. Del. 1992).
CONCLUSION
For the reasons discussed herein, Defendant's Motion to Transfer Venue is DENIED.
It is so ordered.