Opinion
Cause No. IP00-0455-C-B/S
August 25, 2000
ENTRY GRANTING DEFENDANT'S MOTION TO TRANSFER
On February 19, 1990, Plaintiff, John R. Somers, entered into an Employment Agreement with Defendant, Flash Technology Corporation of America, to become a plant manager for Defendant's Nashua, New Hampshire manufacturing facility. See Compl. Ex. A. Plaintiff was a Tennessee resident at the time he and Defendant negotiated and executed the Agreement, and Defendant's headquarters were also based in Tennessee. The Agreement provided that Plaintiff would move to New Hampshire for three years to serve as plant manager and then return to work for Defendant in Tennessee, but the record does not reflect whether Plaintiff ever returned to Tennessee. Id. Section 13 of the Agreement provided that Defendant would "at the end of five years, [if certain conditions were met], provide the Plant Manager [Plaintiff] a 20% equity ownership of [Defendant]."
From February of 1990 until September of 1996, Defendant employed Plaintiff as a plant manager under the terms of the Agreement. See Ans. ¶¶ 5, 8. On February 17, 2000, Plaintiff filed a Complaint against Defendant in state court in Hamilton County, Indiana, demanding a twenty-percent equity ownership of Defendant. Defendant removed Plaintiff's action to this Court and on June 8, 2000, filed a Motion to Transfer to the Federal District Court for the Middle District of Tennessee, Nashville Division, pursuant to 28 U.S.C. § 1404(a). WeGRANT Defendant's Motion to Transfer the case.
Plaintiff currently resides in Hamilton County, but the record does not reflect when he moved to Indiana. See Pl.'s Brief in Opp. to Venue Transfer, Ex. A.
Legal Standard
Section 1404(a) provides: "For the convenience of parties and witnesses, in the interest of justice, a district court may transfer any civil action to any other district or division where it might have been brought." 28 U.S.C. § 1404(a). The purpose of this provision is to "prevent avoidable waste of time, energy and money, as well as to protect parties, witnesses and the public against inconvenience and expense." Hess v. Gray, 85 F.R.D. 15, 23 (N.D.Ill. 1979). Transfer is appropriate under Section 1404(a) where the moving party establishes that (1) venue is proper in the transferor district, (2) venue and jurisdiction are proper in the transferee district, and (3) the transfer will serve the convenience of the parties, the convenience of the witnesses, and the interest of justice. See State Farm Mutual Auto. Ins. Co. v. Bussell, 939 F. Supp. 646, 650 (S.D.Ind. 1996); Vandeveld v. Christoph, 877 F. Supp. 1160, 1167 (N.D.Ill. 1995); Von Holdt v. Husky Injection Molding Sys., Ltd., 887 F. Supp. 185, 188 (N.D.Ill. 1995). Plaintiff does not contest that venue is proper in this district or that venue and jurisdiction are proper in the Middle District of Tennessee. Therefore, we need only address the third prong of the analysis: whether transfer to the Middle District of Tennessee would serve the convenience of the parties and the witnesses, and the interest of justice.
Section 1404(a) does not dictate the relative weight to be given to each factor, allowing the district court discretion to "adjudicate motions for transfer according to an individualized, case-by-case consideration of convenience and fairness." Stewart Org., Inc. v. Ricoh Corp., 487 U.S. 22, 29, 108 S.Ct. 2239, 2244, 101 L.Ed.2d 22 (1988); See also Coffey v. Van Dorn Iron Works, 796 F.2d 217, 219 n. 3 (7th Cir. 1986). We must therefore balance the three factors specified by the statute in light of the particular circumstances of the case. See Coffey, 796 F.2d at 219, n. 3. Moreover, the party moving for transfer has the "burden of establishing, by reference to particular circumstances, that the transferee forum is clearly more convenient" than the transferor forum. Id at 220. Under the particular circumstances of this case, as described more fully below, we conclude that this action should be transferred to the Middle District of Tennessee.
A. Convenience to the Parties
The first factor relevant to our analysis is whether the available forums are convenient to the plaintiff and the defendant. As an initial matter, the plaintiff's choice of forum is entitled to "some" weight, especially when the action is brought in the plaintiff's home forum.See FDIC v. Citizens Bank Trust Co., 592 F.2d 364, 368 (7th Cir. 1979). However, an exception to this principle arises where the chosen venue has no connection to the plaintiff's underlying cause of action.See Chicago R.F. P.P. Co. v Igoe, 220 F.2d 299, 304 (7th Cir. 1955) (holding that factor according "large measure of deference" to "plaintiff's freedom to select his own forum . . . has minimal value where none of the conduct complained of occurred in the forum selected by the plaintiff"); Alliance General Ins. Co. v Deutsch, No. 99 C 2311, 1999 WL 637205, at *1 (N.D.Ill. 1999) (stating that "a claim having no substantive connection to a forum creates only a minimal preference for the plaintiff's choice of forum"). In addition, courts must also consider "the parties' respective residences and their abilities to bear the expense of trial in a particular forum." College Craft Co., Ltd. v. Perry, 889 F. Supp. 1052, 1056 (N.D.Ill. 1995) (quoting Heller Financial, Inc. v. Riverdale Auto Parts Inc., 713 F. Supp. 1125, 1130-31 (N.D.Ill. 1989)). On the basis of these factors, the court should determine which forum is more convenient to the parties. However, transfer of an action is not appropriate if its only effect will be to shift the inconvenience from one side to another. See Ronco, Inc. v. Plastics, Inc., 539 F. Supp. 391, 402 (N.D.Ill. 1982); 15 Charles Alan Wright, Arthur R. Miller Edward H. Cooper, Federal Practice and Procedure § 3848 (2d ed. 1986).
In this case, Plaintiff's residence in the Southern District of Indiana would make trial here more convenient for him; indeed, this is likely the reason he selected Indiana to be the forum for the action. However, Plaintiff's choice is entitled to "minimal" weight because this cause of action bears little, if any, relation to Indiana. As we describe more fully in the following sections, the vast majority of witnesses and documents are available outside of Indiana, and much of the relevant conduct occurred outside of Indiana.
In fact, nothing on the record shows any factual relation to Indiana. In contrast, Tennessee is clearly the more convenient forum for Defendant. Defendant has its principal place of business in the Middle District of Tennessee, and most of its employees reside in or around the Middle District of Tennessee. Requiring Defendant's employees to travel to testify in this action would be inconvenient, causing disruption to their personal lives and Defendant's business. On the other hand, Defendant's status as a corporation could mean it is better able than the individual Plaintiff to withstand the burdens of such inconvenience.
In short, it appears that both sides would suffer inconvenience if required to travel to the other party's preferred jurisdiction to litigate this matter. While we recognize the inconvenience that Defendant could suffer from litigating this case in Indiana, we do not believe that it substantially outweighs the inconvenience and expense Plaintiff would suffer from litigating this case in a venue other than the one it selected. We should not transfer this case to Tennessee if the only effect of our action is to shift the inconvenience from Defendant to Plaintiff. We therefore conclude that this factor does not weigh in favor of transfer.
B. Convenience to Witnesses
The next relevant consideration is the convenience to the witnesses. While again we note there is no set weight that we must give to each of the three controlling considerations, courts often conclude that convenience to the witnesses is the most significant of the three factors considered under section 1404(a). See Alliance General Ins. Co., 1999 WL 637205, at *1; Rose v. Franchetti, 713 F. Supp. 1203, 1214 (N.D.Ill. 1989) (citing 15 Wright, Miller, Cooper, Federal Practice and Procedure § 3851 at 264). This analysis is not merely a numbers game: what is significant is the substance and materiality of potential witnesses' testimony. See Vandeveld, 877 F. Supp. at 1168. However, under the circumstances of this case, we believe that it is helpful to consider the number of witnesses for whom each venue will be convenient.
Virtually all the Defendant's witnesses will be convenienced if venue lies in Tennessee. Defendant submitted a list of thirteen potential witnesses, most of whom reside in the Middle District of Tennessee. Eight of the potential witnesses identified by Defendant are employees of Defendant, and we have considered the potential inconvenience to these party witnesses in Section (a), supra. The remaining five witnesses identified by Defendant are Defendant's former employees, who no longer appear to be under the control of Defendant and, as will be discussed below, are outside of the subpoena power of this Court. Four of these five currently reside in Tennessee, so transferring this action to Tennessee would avoid the expenditures of time and money required for these witnesses to travel to Indiana. The increased convenience to the witnesses of appearing in court in Tennessee might also mean that these witnesses would be more likely to appear voluntarily rather than waiting until they receive a subpoena.
One of these witnesses is Defendant's accountant who is likely to be willing to travel at Defendant's behest even though the accountant is not an employee.
Courts normally accord less weight to the convenience to party witnesses than to non-party witnesses when analyzing this factor. See Alliance General Ins. Co., 1999 WL 637205, at *1.
Plaintiff argues that Defendant has attempted to insert the "false issue" of the quality of his performance under the Agreement into this controversy, and that the proposed testimony of Defendant's witnesses on this matter is not germane to this dispute. We disagree; Plaintiff's claim for an equity interest in the Defendant corporation arises from Section 13 of the Agreement, which clearly conditions Plaintiff's receipt of an equity share upon Plaintiff's and the corporation's satisfaction of certain budgetary and other performance goals. Therefore, the witnesses' testimony regarding Plaintiff's performance could be highly relevant. Plaintiff has identified no witness (other than himself) who would be forced to travel or be otherwise inconvenienced if this action is pursued in Tennessee. We therefore conclude that because virtually all the Defendant's witnesses will be convenienced if venue resides in Tennessee, and Plaintiff makes virtually no countervailing argument in favor of Indiana, the equities lie in favor of the transfer.
C. Interest of Justice
The third consideration listed in Section 1404(a) is "conditions which are in furtherance of the administration of justice." Chicago R.I. and P.P. Co., 220 F.2d at 303. In Gulf Oil v. Gilbert, 330 U.S. 501, 508-09 (1947), the Supreme Court identified factors relevant to the analysis of a motion to transfer based on forum non conveniens; subsequently, courts have applied the same factors to a Section 1404(a) motion to transfer venue. See Chicago R.I. and P.P. Co., 220 F.2d at 303; Alliance General Ins. Co., 1999 WL 637205, at *1. Those factors include: (1) the relative ease of access to sources of proof; (2) the amenability of unwilling witnesses to service of process; (3) the cost of attendance at trial of unwilling witnesses; (4) the relation of the community in which the courts and jurors are required to serve to the occurrence at issue in the litigation; (5) the accessibility of premises involved in the litigation; (6) the relative congestion of the court dockets and prospects for earlier trial; and (7) in a diversity case, the relative familiarity of the courts with the state law supplying the applicable rules of decision. Gulf Oil, 330 U.S. at 508-509.
As to the ease of access to sources of proof, the underlying conflict between the parties is centered in the Middle District of Tennessee. We have previously noted that nearly all the witnesses reside in or around Tennessee, and no witnesses identified to date, other than Plaintiff, reside in this district. The parties negotiated and executed the Agreement in Tennessee, and we expect the majority of documents relevant to the dispute will be available in Tennessee. Although documents may be transported from Tennessee to Indiana, there appears to be little doubt that the sources of proof will be more readily accessible in Tennessee.
The factors relating to the amenability of unwilling witnesses to service of process and the cost of attendance at trial of unwilling witnesses similarly weigh in favor of Tennessee. Again, as noted in the previous section, five of Defendant's witnesses are beyond the subpoena power of this Court. The live testimony of those witnesses therefore may be lost if they cannot be convinced to travel to this venue for trial.See Hotel Constructors, Inc. v. Seagrave Corp., 543 F. Supp. 1048, 1051 (N.D.Ill. 1982) (citing 15 Wright, Miller, Cooper, Federal Practice and Procedure § 3851 for the proposition that transfer may be based in part on the concern of insuring live testimony of non-party witnesses whenever possible). By contrast, four of those five non-party witnesses are subject to the subpoena power of the Tennessee court, and their testimony should be easily secured in that district if they will not appear voluntarily. As explicated above, Tennessee is a more convenient forum than Indiana and will maximize the parties' abilities to present live witnesses and minimize the witnesses' costs of appearing.
The relationship between the community where the court sits and from which jurors are drawn and the occurrence at issue in the litigation is more extensive in Tennessee than in Indiana. This case arose in Tennessee; Indiana has far less interest in this matter. The parties negotiated and executed the Agreement in Tennessee. Defendant's headquarters were based in Tennessee at that time and remain there today. Plaintiff lived in Tennessee at or around the time he negotiated and executed the Agreement, and the Agreement required him to transfer back to Tennessee after working in New Hampshire for three years. While Plaintiff is now a resident of Indiana, and an Indiana court has a general interest in protecting the welfare of its residents, a Tennessee court also has an interest in protecting the welfare of its corporate residents. Indiana has no other countervailing interest in this case. Tennessee, thus, has the greater relationship to this litigation.
Similarly, the locus of this dispute is more closely tied to Tennessee. The Defendant resides in Tennessee, the Agreement was negotiated in Tennessee, and Plaintiff worked in the New Hampshire division of Defendant's business. Although neither Indiana nor Tennessee accords easy access to Defendant's New Hampshire factory, to the extent that it may be necessary to access the premises involved in the negotiation and execution of the Agreement, or to access Defendant's Tennessee facilities for information regarding performance under the Agreement, proximity preponderates in Tennessee's favor.
The final two factors — congestion of the court dockets and familiarity of the courts with the state supplying the applicable rules of decision — also dictate that Tennessee is the appropriate venue for this case. We are unable to determine whether this case will proceed to trial more expeditiously if we transfer this case; however, it appears that the courts in the Southern District of Indiana are more congested than those in the Middle District of Tennessee. The Southern District of Indiana has 21% more civil cases filed per year per judge than in the Middle District of Tennessee (562 compared to 443), the median time from filing to disposition is one month longer in Indiana (nine versus ten), and Indiana has 56 more cases pending per judge than Tennessee (473 compared to 417). See Administrative Office of the United States Courts, 1999 Federal Court Management Statistics (2000). Moreover, a judge sitting in Tennessee would unquestionably be more familiar with that state's contract law than would be an Indiana judge. While we believe that courts in both venues are competent to apply Tennessee contract law to this case, there is no doubt that Tennessee courts have had more experience applying Tennessee law.
Conclusion
For the reasons stated above, we conclude that this cause should be transferred to the United States District Court for the Middle District of Tennessee. The interest of justice will be better served by a transfer to Tennessee and the convenience to the witnesses will be greater if this case is litigated in Tennessee. Accordingly, Defendant's Motion to Transfer, pursuant to 28 U.S.C. § 1404(a), is hereby GRANTED.
It is so ORDERED.