RICHARD H. KYLE, District Judge.
Plaintiff The Valspar Corporation ("Valspar")
Over the years, Valspar has purchased significant quantities of titanium dioxide from Defendants. It alleges that as early as 2002, Defendants conspired with one another and others to manipulate, raise, or maintain the market and price for titanium dioxide sold in the United States. According to Valspar, this conspiracy was successful and resulted in it paying "supra-competitive, artificially inflated prices." (Compl. ¶¶ 30, 189.)
It is undisputed that at least some of the purchases Valspar made from DuPont and Huntsman were governed by agreements containing forum-selection clauses. For example, Valspar and DuPont entered into
Invoking these clauses here, DuPont and Huntsman have separately moved to transfer Valspar's claims to the fora designated in their respective agreements.
Title 28 U.S.C. § 1404(a) provides "[f]or 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." In the "typical case," therefore, a district court considering a § 1404(a) motion "must evaluate both the convenience of the parties and various public-interest considerations" to determine whether transfer is warranted. Atl. Marine Constr. Co. v. U.S. Dist. Court for W. Dist. of Tex., ___ U.S. ___, 134 S.Ct. 568, 581, 187 L.Ed.2d 487 (2013). The plaintiff's choice of forum is entitled to "some weight" in the analysis, and the burden rests with the movant to overcome that weight by showing (1) the parties' private interests and (2) other public-interest considerations militate in favor of transfer. Id. at 581 & n. 6.
"The calculus changes, however, when the parties' contract contains a valid forum-selection clause." Id. at 581. In that instance, the plaintiff's choice of forum "merits no weight," and a court "should not consider arguments about the parties' private interests," as they previously agreed (contractually) to litigate in a specified forum. Id. at 581-82. Furthermore, the plaintiff, as the party flouting the chosen forum, bears the burden of demonstrating the public-interest factors merit transfer. Id. at 583. Yet, such factors "will rarely defeat a transfer motion," and a district court "should ordinarily transfer the case to the forum specified" in the parties' agreement. Id. at 581-82.
At the outset, the Court pauses to address a procedural issue raised by the pending Motions.
To accomplish what DuPont and Huntsman seek, therefore, the Court must proceed in two steps. First, it must sever the claims against these Defendants under Federal Rule of Civil Procedure 21, creating entirely new civil actions against them, and only then may it transfer the severed civil actions pursuant to § 1404(a). See Toro Co. v. Alsop, 565 F.2d 998, 1000 (8th Cir.1977) (per curiam) (recognizing propriety of district court severing claims under Rule 21 and then transferring them under § 1404(a)). But while the second step of this process — § 1404(a) — was discussed in the parties' briefs, no mention was made of Rule 21 or the factors to be considered when determining whether severance is appropriate. Accordingly, the Court requested supplemental briefing on those issues. (See Doc. No. 92 at 3.)
Having now reviewed those additional submissions, it is clear the legal analysis is unaffected. Severance under Rule 21 is committed to the Court's sound discretion, see, e.g., Reinholdson v. Minnesota, 346 F.3d 847, 850 (8th Cir.2003), and in exercising that discretion, courts typically consider the same general factors elucidating the § 1404(a) analysis, including judicial economy, efficiency, witness convenience, the location of and access to sources of proof, the potential for delay, and similar factors. See, e.g., Vutek, Inc. v. Leggett & Platt, Inc., No. 4:07CV1886, 2008 WL 2483148, at *1 (E.D.Mo. June 17, 2008); Cestone v. Gen. Cigar Holdings, Inc., No. 00 Civ. 3686, 2002 WL 424654, at *2-3 (S.D.N.Y. Mar. 18, 2002). Indeed, the parties' supplemental briefs largely rehash their arguments regarding § 1404(a).
Accordingly, Rule 21 is essentially irrelevant to the Court's analysis. If the Court were to conclude the pertinent factors render transfer appropriate under § 1404(a), then severance, too, would be proper. See, e.g., Monje v. Spin Master, Inc., No. CV-09-1713, 2013 WL 6498073, at *4 (D.Ariz. Dec. 11, 2013) (noting that in these circumstances, "[s]everance is a necessary precursor to ... transfer, and it is justified by the same reason[s]"). And as set forth below, the Court concludes that the relevant factors indeed militate in favor of transfer here.
Seizing upon the Supreme Court's recent decision in Atlantic Marine, DuPont and Huntsman argue the claims against them must be transferred under § 1404(a) because of the forum-selection clauses in their agreements with Valspar. Valspar responds that (1) its claims fall outside the reach of the forum-selection clauses and (2) even if the clauses apply, the Court should exercise its discretion not to transfer the claims to avoid "claim splitting." Neither contention is persuasive.
Valspar first argues the forum-selection clauses are irrelevant here because its antitrust claims are not encompassed by them. (Mem. in Opp'n (Doc. No. 75) at 6-8.) It alleges that it paid artificially inflated prices for titanium dioxide due to an unlawful conspiracy among Defendants, and to succeed on these claims, it contends it must only "show an agreement in the form of a contract, combination, or conspiracy that imposes an unreasonable restraint of trade." (Id.) As the agreements (purportedly) "do not establish a price for" titanium dioxide, and because its claims do not challenge the moving Defendants' performance under the agreements or even require the Court to interpret them, their "mere existence," argues Valspar, "is insufficient to support the conclusion that [its] antitrust claims are within the scope of the forum selection clauses." (Id.) There are two problems with this argument.
First, Valspar has its facts wrong. It contends the agreements with DuPont and Huntsman did not set the price for its purchases of titanium dioxide, but that is simply not the case. (See Wanning Aff. Ex. 1, ¶ 4 (Valspar-DuPont agreement setting per-ton prices for different types of titanium dioxide); Reeder Decl. Ex. A at 2 (Valspar-Huntsman agreement setting price per pound for titanium dioxide).) As DuPont aptly notes, "[t]he very essence of Valspar's claim is a challenge to those contractually agreed-upon prices," which set the minuend for determining Valspar's (alleged) damages.
Second, and more importantly, the forum-selection clauses are broader than Valspar contends — and broad enough to reach the antitrust claims alleged here. The clause in the Huntsman agreement, for example, provides that Valspar "irrevocably submit[s] to the exclusive jurisdiction of the Federal court . . . located in the Southern District of Texas, Houston Division,... solely in respect of the interpretation and enforcement of the provisions of this Agreement, and in respect of the transactions contemplated hereby." (Reeder Decl. Ex. A at 5 (emphasis added).) The "transactions contemplated" by the agreement were Valspar's purchases of titanium dioxide from Huntsman, allegedly at artificially inflated prices. It is these very purchases that form the basis of Valspar's claims against Huntsman and, indeed, give it standing to sue here. The same is true with respect to Valspar's claims against DuPont. (See Wanning Aff. Ex. 1, ¶ 15 (providing that Delaware courts "will be the only courts of competent jurisdiction" under the agreement).) In the Court's view, therefore, the claims alleged in this action fall within the scope of the forum-selection clauses.
This can hardly come as a surprise to Valspar, as another federal court has already reached the same conclusion. In 2010, a putative class of titanium-dioxide purchasers commenced an antitrust action against DuPont, Huntsman, and others in
With the applicability of the forum-selection clauses established, the outcome of the instant Motions essentially becomes a foregone conclusion. As the Supreme Court noted in Atlantic Marine, when a defendant invokes a valid forum-selection clause, "a district court should transfer the case unless extraordinary circumstances unrelated to the convenience of the parties clearly disfavor a transfer." 134 S.Ct. at 575. In the Court's view, no "extraordinary circumstances" that "clearly disfavor transfer" are present here.
Valspar's argument for rejecting the forum-selection clauses sounds in efficiency. It notes that its claims allege Defendants conspired to "fix" the price of titanium dioxide, and there exists a strong preference for co-conspirators to be tried together in one action. See, e.g., United States v. Joiner, 418 F.3d 863, 868 (8th Cir.2005). But that preference is not absolute, see id., and the Court does not believe the efficiency and economy achieved by trying interrelated claims in one forum should trump the forum-selection clauses agreed to by Valspar. See, e.g., 1-Stop Fin. Serv. Ctrs. of Am., LLC v. Astonish Results, LLC, No. A-13-CA-961, 2014 WL 279669, at *6 (W.D.Tex. Jan. 23, 2014) (argument that severance and transfer of related claims "would result in an `egregious waste of judicial resources'" did not "rise to a level sufficient to deny a motion to transfer"). In fact, the efficiency and economy that could be achieved by a single trial would largely inure to Valspar's benefit — precisely what the Supreme Court has counseled is not a relevant consideration. Atl. Marine, 134 S.Ct. at 582 (a court "should not consider arguments about the [plaintiff's] private interests"); see also Excentus Corp. v. Giant Eagle, Inc., Civ. A. No. 13-178, 2014 WL 923520, at *10 (W.D.Pa. Mar. 10, 2014). It is always
Valspar also argues that only certain of its purchases from Huntsman occurred while agreements containing forum-selection clauses were in place, and hence "claims relating to [] years [when no such clause existed] should remain in Minnesota regardless." (Mem. in Opp'n at 11.) But this contention falters for the very reasons offered elsewhere by Valspar. With some of the claims against Huntsman subject to forum-selection clauses and thus transferable, in the Court's view it makes eminent sense to transfer all of the claims against it — even those arguably not subject to such clauses — in order to promote the very efficiency Valspar espouses. Leaving only a portion of the claims against Huntsman pending in this Court while transferring others would run the risk of inconsistent verdicts and wasted resources that Valspar seeks to avoid. See, e.g., Compass Bank v. Palmer, No. A-13-CA-831, 2014 WL 355986, at *7 (W.D.Tex. Jan. 30, 2014) ("Because the Court must transfer the case with respect to the Notes containing forum selection provisions, it makes little sense to ... keep the matter ... with respect to the Notes without such venue restrictions.").
Based on the foregoing, and all the files, records, and proceedings herein, it is
1. Valspar's claims against DuPont are
2. Valspar's claims against Huntsman are
3. The Motions to Dismiss filed by Defendants DuPont (Doc. No. 53), Cristal (Doc. No. 44), and Kronos (Doc. No. 54) are
4. The hearing on the above Motions, currently scheduled for May 14, 2014, is