CLAIRE C. CECCHI, District Judge.
Before the Court is Defendants' motion to dismiss or alternatively transfer venue to the Central District of California. (ECF No. 12). The Court decides this matter without oral argument pursuant to Rule 78 of the Federal Rules of Civil Procedure.
This case arises out of allegations that Defendant Silva used his position within Plaintiff's organization to divert customers to his own business, Defendant Lucas Builders, Inc. ("LBI"). Once Defendants moved to dismiss on jurisdictional and venue wounds, the Court ordered the Parties to take jurisdictional discovery, The following facts are taken from that discovery and the assertions in the Complaint.
Plaintiff is a California corporation with its principal place of business and headquarters in New Jersey. (Compl. ¶ 4). Defendants are California residents. (
Plaintiff alleges that from 2007 onward Silva: (1) engaged in self-dealing when he awarded subcontracts to LBI without disclosing his financial interest in the company (Compl. ¶ 60; P1. Opp. 6); (2) diverted Plaintiff's confidential bid opportunities to LBI (Compl. ¶ 61; P1. Opp. 6); and (3) diverted Plaintiff's confidential information to LBI by forwarding the confidential information from his work email address to his personal email address, and by improperly modifying files on Plaintiffs servers. (Compl. ¶¶ 51-54). From this final allegation, Plaintiff contends that Silva and LBI violated the Computer Fraud and Abuse Act ("CFAA"), 18 U.S.C. § 1030.
Defendants move to dismiss on two grounds, venue and failure to state a claim.
There appears to be no dispute that the only provision that might confer venue on this court is 28 U.S.C. § 1391(b)(2). which provides that venue is proper in any district where "a substantial part of the events or omissions giving rise to the claim occurred." (Def. Opp. 26). In this circuit, the test to determine whether an event or omission arose in a particular district focuses on "the location of those events or omissions giving rise to the claim."
Defendants argue that venue is improper because "Plaintiff does not allege that actionable conduct occurred in New Jersey." (Def Br. at 23). However, even if that were so, Defendants would not have met their burden to show improper venue because "it is not necessary for the plaintiff to include allegations in his complaint showing that venue is proper."
In any event. Plaintiff has supported its claim that venue is proper in this district. Plaintiff has introduced evidence that Defendant Silva: (1) was a high-ranking employee who often worked from the New Jersey office (Silva Tr. 30:8-31:20. 86:14-25; P1. op. 10-11); (2) reported directly to the New Jersey office for approval of contracts and bids (Black Cert. ¶¶ 7-8); (3) regularly traveled to Plaintiff's New Jersey headquarters on behalf of Plaintiff (Black Cert. ¶¶ 10-11); and (4) that LBI and Silva accepted a loan from Plaintiff in New Jersey (Compl. 99-100; Black Cert. ¶ 14). "Courts have upheld venue where an illegal action was repeated in more than one state and venue was laid in a state that accounted for only a small number of those actions."
28 U.S.C. § 1404(a) permits transfer to a more convenient forum "[f]or the convenience of parties and witnesses, in the interest of justice." To guide the trial court's inquiry, "the Supreme Court has prescribed a balancing of private interest factors affecting the convenience of the litigants and public interest factors affecting the convenience of the forum."
The moving party bears the burden of establishing that the transfer is appropriate and must demonstrate that the alternate forum is more convenient than the present forum,
The private interests of the parties do not favor transfer. For domestic plaintiffs, "[i]t is black letter law that a plaintiffs choice of a proper forum is a paramount consideration in any determination of a transfer request, and that choice should not be lightly disturbed."
The public factors favor New Jersey. The underlying employment contract contains a New Jersey choice of law provision (Compl. ¶ 22). Accordingly. this Court is likely to be more familiar with the law underlying Plaintiff's New Jersey state law claims, favoring Plaintiff. Furthermore, New Jersey has a strong interest in this case, considering that the center of gravity of the parties' relationship is New Jersey.
Accordingly, because neither the private nor public factors weigh in favor of transfer, the Court declines to transfer this case to California pursuant to 28 U.S.C. § 1404(a).
Defendants ask this court to dismiss Plaintiff's sole federal claim and to subsequently decline to exercise supplemental jurisdiction over the remaining state law claims. Defendants argue that the allegations against Silva do not state a claim under CFAA because they do not sufficiently allege that Silva "exceed[ed] authorized access" on Plaintiff's computer system or accessed a computer "without authorization" under 18 U.S.C. §§ 1030(a)(2)(C), (a)(4), and (a)(5)(C). The CFAA defines "exceeds authorized access" as follows: "to access a computer with authorization and to use such access to obtain or alter information in the computer that the accessor is not entitled to so obtain or alter." 18 U.S.C. § 1030(e)(6).
As the parties acknowledge, there is a circuit split regarding the proper interpretation of these terms. The Seventh Circuit held that when an employee accesses files after breaching the duty of loyalty to his employer, he exceeds his authorized access.
Plaintiff alleges that Silva accessed its servers and improperly deleted files. (Compl. ¶¶ 53-54). Drawing all inferences in favor of Plaintiff, this is enough to state a claim that Silva exceeded his authorized access under any interpretation of the law, since it is alleged that he altered files without authorization. 18 U.S.C. § 1030(e)(6). The Complaint also states a claim that Silva accessed the computer "without authorization" because, at this stage in the proceedings, any difference between "without authorization" and "exceeding authorized access" is "paper thin."
Further, because the complaint alleges that Silva was performing these actions on behalf of LBI, the complaint states a claim against both Defendants. (Compl. ¶¶ 6, 50-54).
For the forgoing reasons it is on this 30th day of September. 2014:
ORDERED that Plaintiffs' motion (ECF No. 12) is DENIED.