Civil Action No. 98-539 (JEI)
April 29, 1998
IAN STUART, P.C., By: John M. Clark, Esq., Haddon Heights, New Jersey, for Plaintiff.
SCHNADER HARRISON SEGAL LEWIS LLP, By: Louis R. Moffa, Esq., Richard A. Barkasy, Esq., Cherry Hill, New Jersey, for Defendant.
Presently before the Court is the motion of defendant York International Corporation ("York") for transfer of venue in this action to the Western District of Louisiana, the district in which the fire giving rise to plaintiff Zurich Insurance (UK) Limited's ("Zurich") action on behalf of its insured occurred. Because we find the Western District of Louisiana to be a better forum in which to litigate this matter, we will grant York's motion and transfer the case forthwith.
On February 4, 1998, Zurich filed this action in the Superior Court of New Jersey for Camden County. On February 27, 1998, York removed the case to this Court. Zurich seeks to recoup monies it paid under a homeowner's insurance policy as a result of a fire that occurred at real property located at 2708 Locust Street, Arcadia, Louisiana. Zurich, the subrogee of the property owner, contends that the fire was caused by an unsafe and dangerous HVAC furnace which York allegedly placed into the stream of commerce without acting in conformance with the relevant merchandising and/or manufacturing/design procedures.
Zurich is a foreign corporation that maintains its principal place of business in the United Kingdom. York is a Delaware Corporation that maintains its principal place of business in the Commonwealth of Pennsylvania. Zurich brought suit in New Jersey alleging that York regularly conducts business in New Jersey.
"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). Section 1404(a) vests "discretion in the district court to adjudicate motions to transfer according to individualized, case-by-case consideration of convenience and fairness." Stewart Organization, Inc. v. Ricoh Corp., 487 U.S. 22, 27 (1988) (quoting Van Dusen v. Barrack, 376 U.S. 612, 622 (1964)).
The threshold question under Section 1404(a) is whether the action might have been brought in Louisiana. Van Dusen, 376 U.S. at 613. In a suit based on diversity, as is this one, venue is proper 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 (3) a judicial district in which the defendants are 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). In the case at bar, venue is proper in Louisiana under 28 U.S.C. § 1391(a)(2) since the plaintiff's claims arise out of a nucleus of facts that, for the most part, took place in Louisiana.
In deciding motions to transfer venue, courts have not limited their consideration to the three factors, "the convenience of parties and witnesses, [and] in the interest of justice," enumerated in § 1404(a). Rather, courts have considered "`all relevant factors to determine whether on balance the litigation would more conveniently proceed and the interests of justice better served by transfer to a different forum.'" Jumara v. State Farm Ins. Co., 55 F.3d 873, 879 (3d Cir. 1995) (quoting 15 Charles Alan Wright et al., Federal Practice and Procedure § 3847 (2d ed. 1986)) Although a plaintiff's choice of forum is entitled to deference, see Jumara, 55 F.3d at 879; Lony v. E.I. DuPont de Nemours Co., 886 F.2d 628, 633 (3d Cir. 1989); National Property Investors VIII v. Shell Co., 886 F.2d 628, 633 (3d Cir. 1989), where the central facts of a lawsuit occurred outside of the forum state, a plaintiff's choice of forum is afforded less deference.National Micrographic Systems, Inc. v. Cannon U.S.A. Inc., 825 F. Supp. 671, 681 (D.N.J. 1993).
According to the Third Circuit, "in deciding a motion under § 1404(a), the Court must consider both the public and private interests affected by the transfer." Jumara, 55 F.3d at 879. Those private interests include: the plaintiff's original choice of forum; the defendant's preference; the place where the claim arose; the relative physical and financial condition of the parties; whether witnesses will be unavailable in one forum; and the location of relevant books and records. Id. The public interests which the Court should consider include: the enforceability of the judgment; practical considerations that would make the trial "easy, expeditious, or inexpensive;" an interest in resolving local controversies in a local court; court congestion in each forum; the public policies of the fora; and in diversity cases, the judge's familiarity with the applicable state law. Id. at 879-80 (citations omitted). However, the appellate court noted "there is no definitive formula or list of the factors to consider." Id.
In the case at hand, the private interests, with the exception of the plaintiff's choice of forum, all weigh in favor of transferring this case to the Louisiana federal courts. Defendant has expressed its preference of litigating this action in Louisiana, where the fire took place and where the property owner resides. Obviously, Louisiana is where this claim arose, where the relevant witnesses will be available and where the location of relevant records and reports regarding the fire are located. The relative physical and financial condition of the parties is not much affected since Zurich is a foreign corporation who may presumably just as easily come to Louisiana as to New Jersey and York has expressed its willingness to travel to Louisiana.
If the case were not transferred, the witnesses to the fire, the investigators of the fire, local contractors installing and/or servicing the furnace and the homeowner will be outside the subpoena power of the court. The availability of process to compel testimony of these witnesses is an important consideration in determining whether to grant the defendant's motion to transfer. See Arrow Elec., Inc. v. Ducommum, Inc ., 724 F. Supp. 264, 266 (S.D.N.Y. 1989). Zurich's contention that York has not provided it with a list of the Louisiana witnesses does not change our conclusion that more witnesses are likely to be located in Louisiana than in New Jersey. In fact, we doubt whether any witnesses would be located in New Jersey as this action seems to have almost no connection to this state other than the attorneys presently handling the matter. Furthermore, York contends that it does not possess any of the information relating to the fire, information which we find most likely to be within the custody and control of Zurich. Because Zurich apparently has not yet provided Rule 26 disclosures, it cannot expect York to be capable of providing a witness list.
The public interests, on the whole, also weigh in favor of transferring venue to the Western District of Louisiana. The judgment will be as easily enforceable in either forum. Court congestion is relatively similar as well, although the Louisiana federal system is somewhat less congested then the New Jersey federal system. During the twelve-month period ending September 30, 1997, the number of weighted filings per federal judgeship in Louisiana was slightly lower than in New Jersey: 350 civil cases and 84 criminal cases compared to New Jersey's 353 civil cases and 90 criminal cases. Leonidas Ralph Mecham, Judicial Business of the United States Court, 1997 Annual Report of the Director (Administrative Office of the United States Courts, Washington, D.C.) March, 1997, at Table X-1A. However, the time to trial for cases in the Western District of Louisiana was much lower than the time to trial in the District of New Jersey: 15 months compared to New Jersey's 28 months. Id. at Table C-10. Practical considerations also dictate in favor of a transfer. Not only is the possibility of a jury view of the fire site obviously increased if trial is held in Louisiana, see Ricoh Co., Ltd. v. Honeywell, Inc., 817 F. Supp. 473, 478 (D.N.J. 1993), but it is also more likely that the trial will be "easy, expeditious or inexpensive" where the fire took place, the homeowner resides, the investigation occurred, the parties who have installed or serviced the furnace and the majority of witnesses are located. Similarly, the interest in resolving local controversies in a local court is clearly best served by litigating in Louisiana.
There are only two public interests which must be analyzed further before determining whether a transfer to Louisiana is appropriate: the public policies of the fora and the judge's familiarity with state law. Zurich alleges that it will be prejudiced if we grant the transfer to the Western District of Louisiana because, unlike New Jersey, Louisiana does not have a favorable fictitious pleading rule and therefore any amendments replacing John Doe parties with actual parties would not relate back to the time of the filing of the original complaint for statute of limitations purposes. Federal Rule of Civil Procedure 15(c)(1) allows state relation back law to govern a state claim in federal court if state law "affords a more forgiving principle of relation back than the one provided by [Rule 15(c)]." Fed.R.Civ.P. 15(c), Advisory Committee Notes, 1991 Amendment; see Bryan v. Assoc. Container Transp., 837 F. Supp. 633, 643 (D.N.J. 1993) (quoting same). Under Fed.R.Civ.P. 15(c)(1), if New Jersey law would permit relation back, the federal rules permit the amendment to relate back. See Bryan, 837 F. Supp. at 644; In re Sharps Run Associates, L.P., 157 B.R. 766, 799-800 (D.N.J. 1993); Jordan v. Tapper, D.O., 143 F.R.D. 567, 572 (D.N.J. 1992); Wilson v. City of Atlantic City, 142 F.R.D. 603, 605-06 (D.N.J. 1992). New Jersey law permits Zurich to amend its complaint with the John Doe defendants' true identity and enjoy relation back. See N.J. Civ.R. 4:26-4; Jordan, 143 F.R.D. at 575; Viviano v. CBS, Inc., 101 N.J. 538, 548, 503 A.2d 296 (1986); Farrell v. Votator Div. of Chemetron Corp., 62 N.J. 111, 299 A.2d 394 (1973). On the other hand, Louisiana law, while not totally clear on the issue, may prohibit relation back. See Hensgens v. Deere Co., 869 F.2d 879, 882 (5th Cir.), reh'g denied, 875 F.2d 858, cert. denied, 493 U.S. 851 (1989) (describing confusion in Louisiana case law regarding the effect on the running of the statute of limitations of a petition containing a misdescription or misnomer of a defendant without addressing whether the old case law prohibiting relation-back does or does not apply to fictitious parties). Compare Payne v. Pedus Bldg. Serv. Inc., 671 So.2d 13, 14 (La.App. 1996) (the naming of fictitious parties in a petition does not interrupt running of statute of limitations as to parties later substituted by an amending petition); and Picone v. Lyons, 593 So.2d 829, 831 (La.App. 1992) (same), rev'd on other grounds, 601 So.2d 1375 (La. 1992); with Wallace v. Nathan, 678 So.2d 595, 598 (La.App. 1996) (finding that La. C. C. P. art. 1153, which, like Fed.R.Civ.P. 15(c)(2) allows an amendment to a petition to relate back to the date of the filing of the original pleading when the amendment arises out of the conduct, transaction, or occurrence set forth in the original pleading, permits the amendment of a complaint to identify the real name of a party rather than the fictitious name).
N.J. Civ.R. 4:26-4 provides:
In any action . . . if the defendant's true name is unknown to the plaintiff, process may issue against the defendant under a fictitious name stating it to be fictitious and adding an appropriate description sufficient for identification. Plaintiff shall on motion, prior to judgment, amend the complaint to state defendant's true name. . . . No final judgment shall be entered against a person designated by a fictitious name.
Although New Jersey generally allows relation back for the substitution of real parties for fictitious ones, relation back is not automatically permitted in every case. For example, where the description of the fictitious party contained in the complaint is deemed insufficient to identify or put any potential party on notice of the claim, relation back may not be permitted. See Rutkowski v. Liberty Mutual Ins. Co . , 209 N.J. Super. 140, 143, 506 A.2d 1302 (App.Div. 1986) (designation of fictitious parties as those "who had designed, manufactured, sold . . . or were otherwise responsible for the allegedly defective machine" could not "have indicated to even the most thorough reader that plaintiff intended to make a claim for negligent safety inspections."); Cruz v. City of Camden , 898 F. Supp. 1100, 1108-09 (D.N.J. 1995) (relation back not permitted for officers whose specific positions and acts were not included in complaint's description of fictitious officers).
However, we need not concern ourselves with whether or not Louisiana law would permit relation back of an amendment identifying a John Doe party because the Louisiana federal court would be required to apply New Jersey law, thus eliminating any potential prejudice to Zurich and preserving its right to enjoy New Jersey's favorable fictitious pleading and relation back policies. In a diversity action, a federal court must apply the choice of law rules of the state in which it sits. Klaxon v. Stentor Elec. Mfg. Co., 313 U.S. 487 (1941). However, when a case is transferred for the convenience of the parties, pursuant to 28 U.S.C. § 1404(a), the transferee court must apply the choice of law rules that the transferor court would have applied. Van Dusen v. Barrack, 376 U.S. 612 (1964).
In Van Dusen v. Barrack, plaintiffs, on behalf of the decedents, brought forty wrongful death actions in the Eastern District of Pennsylvania for deaths resulting from an airplane crash that occurred in Massachusetts. 376 U.S. 612. The defendants tried to transfer the actions to Massachusetts where over 100 similar actions were pending. Plaintiffs objected to the transfer because, pursuant to Massachusetts law, they would no longer qualify as legal representatives of the decedents. The district court granted the transfer order, but the Third Circuit reversed. The Third Circuit held that the transfer would be appropriate only if the plaintiffs were legal representatives under Massachusetts law, which in this case, they were not. The Supreme Court granted certiorari and reinstated the transfer order. The Court held that where the defendant obtains a change of venue under § 1404(a), the state law of the transferor forum will govern.
The Supreme Court has subsequently held that even where a plaintiff obtains a change of venue pursuant to 1404(a), the state law of the transferor forum will still govern. Ferens v. John Deere Co . , 494 U.S. 516, 523 (1990) .
The Van Dusen Court explained that § 1404(a) is designed to promote convenience. Id. at 634-35. Nonetheless, it recognized that federal law gives plaintiffs the right to choose the forum with the most favorable law and defendants should not be able to use § 1404(a) to defeat plaintiff's choice of law:
There is nothing, however, in the language or policy of § 1404(a) to justify its use by defendants to defeat the advantages accruing to plaintiffs who have chosen a forum which, although it was inconvenient, was a proper venue. . . . § 1404(a) was not designed to narrow the plaintiff's venue privilege or to defeat the state-law advantages that might accrue from the exercise of this venue privilege but rather the provision was simply to counteract the inconveniences that flowed from the venue statutes by permitting transfer to a convenient federal court.Id. at 633-35. See Ferens v. John Deere Co., 494 U.S. 516, 523 (1990). The Supreme Court clearly stated that § 1404(a) should not be construed to allow forum shopping. Van Dusen, 376 U.S. at 636-38. Accordingly, § 1404(a) should be interpreted in a manner that promotes federal-state uniformity. Id.; see also Erie R.R. Co. v. Tompkins, 304 U.S. 64 (1938) (federal courts sitting in diversity apply the substantive law of the state in which they sit). While the Erie doctrine generally calls for uniformity between a federal court and the state courts where it sits, in Van Dusen, the Supreme Court held that plaintiff's original choice of law should be protected and that § 1404(a) should be construed to achieve uniformity between the Massachusetts federal court (transferee court) and the state courts of Pennsylvania where the action was filed. Defendants were not able to use § 1404(a) in Massachusetts' federal courts to obtain a result that they could not obtain in the state courts of Pennsylvania.
Thus, the Western District of Louisiana must respect Zurich's choice of New Jersey law and its favorable relation back rules by applying New Jersey law to this action as required by Van Dusen. Hence, the public policies of Zurich's chosen forum will govern, weighing in favor of a transfer. The Louisiana federal judge, of course, will not be as familiar with New Jersey law as would this Court and this weighs against the transfer. Nonetheless, because the majority of the other private and public interests weigh in favor of transferring the case, see Jumara, 55 F.3d at 879; supra at 4-5, we feel a transfer to the Western District of Louisiana is appropriate. There are simply not enough connections with New Jersey to justify the litigation of this action in this Court.
This matter is similar to National Property Investors VIII v. Shell Oil Co., 917 F. Supp. 324 (D.N.J. 1995). In that case, the plaintiff was a California limited partnership owning an apartment complex in North Carolina. The complaint alleged various claims related to failures of an allegedly defective plumbing system in the North Carolina apartment complex. All of the defendants conducted business in New Jersey and one of them maintained its principal place of business in New Jersey. Nonetheless, the court granted the defendant's motion to transfer venue to the Eastern District of North Carolina. The court emphasized that New Jersey did not have a substantial connection to the facts of the case:
The Court does not accord great weight to Plaintiff's choice of New Jersey as the forum in which to bring this action, because New Jersey has a tangential relationship to the facts underlying Plaintiff's claims. The operative facts of this action occurred for the most part in North Carolina: the suit concerns a polybutylene system in an apartment in North Carolina; the allegedly defective products failed to perform adequately in North Carolina; the allegedly defective products were sold and installed in North Carolina by North Carolina residents and companies.Id. at 3327. Because we feel New Jersey has a similarly tangential relationship to the facts of this case and the balancing of the private and public interests weighs in favor of a transfer, we will grant York's motion and transfer this action to the Western District of Louisiana.
Zurich's request that, if we grant York's motion, we transfer the case to the Eastern District of Pennsylvania rather than the Western District of Louisiana is denied for the same reasons we are denying its request to keep the litigation in New Jersey. Pennsylvania has only one more connection to this case, that York's principal place of business is located there. However, as York points out, it is not necessarily true that any more records or documents would be located in Pennsylvania than in New Jersey or Louisiana. York has manufacturing plants all over the country and may not have designed the furnace at issue in Pennsylvania.
For the foregoing reasons, we will grant York's motion to transfer venue. Accordingly, we will transfer this case to the Western District of Louisiana. An appropriate order will issue.