JOSEPH A. DICKSON, United States Magistrate Judge.
This matter comes before the Court upon Defendants', U.S. Sewer & Drain Inc. and Jeremy Bowman's (collectively "Defendants"), Motion to Transfer Venue to the Eastern District of Pennsylvania
The underlying lawsuit arises out of agreements between Plaintiff FerraTex,
FerraTex contends that Defendants failed to pay in full for goods and services rendered in connection with the Projects. (Am. Compl., ECF No. 17, at 5, ¶¶ 23-26). FerraTex contends that in failing to make such payments, Defendants breached the following: (1) the "Letter Agreement" (memorializing the price of the GSP Project), (2) the GSP Subcontract, (3) the Cayman Subcontract, (4) the implied covenant of good faith and fair dealing inherent in those agreements, and (5) the "Personal Guarantee" (memorializing Defendant Bowman's individual guarantee of all sums due to FerraTex in connection with the Projects). (Am. Compl., ECF No. 17). FerraTex additionally seeks recovery under the doctrine of quantum meruit in connection with the GSP Project and the Cayman Project, and raises causes of action of unjust enrichment with regard to the GSP Project and the Cayman Project, and for promissory estoppel regarding the GSP Project and the Cayman Project. (Id.).
The parties negotiated and signed the Personal Guarantee in Monmouth County, New Jersey on or about July 11, 2015. (Am. Compl., ECF No. 17, at 3-4, ¶¶ 10, 16). The parties negotiated the Letter Agreement during the same New Jersey meeting. (Id. at 3, ¶¶ 10-11). The GSP Project price, as memorialized in the Letter Agreement, included sums due to FerraTex regarding the Exxon Project. (Id. ¶ 13; Ex. A, ECF No. 26-1, at 1).
FerraTex's original pleading mentioned only sums due in connection with the New York-based Exxon Project and Cayman Islands-based Cayman Project when describing FerraTex's causes of action. (Compl., ECF No. 1). As a result, Defendants moved to transfer venue to the Eastern District of Pennsylvania on February 5, 2015, claiming that "New Jersey has utterly no material involvement with the dispute." (Def.'s Br. in Supp., ECF No. 11-1, at 5). On February 23, 2015, however, FerraTex filed an Amended Complaint that expressly included the New Jersey GSP Project in the First through Fifth Counts. (Am. Compl., ECF No. 17, at 6-10, ¶¶ 28-58).
On April 29, 2015, Defendants filed the instant Motion to Transfer. Defendants, apparently questioning the veracity of the factual allegations contained in FerraTex's amended pleading, highlight that FerraTex "now alleges that there is, in fact, and [sic] outstanding balance of $12,717.98 from the work it performed as a subcontractor in New Jersey, despite the glaring omission of the same in the initial Complaint filed." (Def.'s Br. in Supp., ECF No. 22, at 5-6). Moreover, Defendants argue that even if truthful, the amended pleading does not support a finding that New Jersey is a proper venue. Specifically,
Conversely, FerraTex relies on Shore Slurry Seal, Inc. v. CMI Corp., 964 F.Supp. 152, 154 (D.N.J.1997), to ascribe ample significance to the location in which the parties negotiated and entered into the agreements, emphasizing that the entirety of the amount at issue can be traced to a New Jersey meeting and is therefore linked to New Jersey. (See Pl.'s Br. in Opp'n, ECF No. 25, at 16, 18). In addition, FerraTex highlights that the sums owed regarding work performed for the Exxon Project and Cayman Project are recoverable under the Letter Agreement and Personal Guarantee, and are therefore connected to New Jersey. (Id. at 20).
In the alternative to transferring the matter to the Eastern District of Pennsylvania, Defendants argue that even if New Jersey is a proper venue, Plaintiffs filed this action in the incorrect vicinage. Defendants stress that the meeting during which the parties entered into the agreements at issue took place in Wall Township, located in Monmouth County, New Jersey. (Am. Compl., ECF No. 17, at 3, ¶ 10). Furthermore, Defendants contend that the construction of the GSP Project occurred solely in Ocean County, New Jersey. (Certification of Steven D. Janel in Supp., ECF No. 22-1, at 1). Because both Monmouth County and Ocean County fall within the Trenton Vicinage of this District, Defendants argue that the Court should reassign this action to the Trenton Vicinage. Defendants further contend that FerraTex filed suit in the Newark Vicinage for an improper reason, namely for the convenience of FerraTex's New Jersey-based parent company, Spinello Construction Co. (Def.'s Br. in Supp., ECF No. 22, at 6-7).
28 U.S.C. § 1404(a) and 28 U.S.C. § 1406(a) govern venue transfers in civil cases. A district court may only dismiss or transfer a case under § 1406(a) if it finds the original venue improper. Alternatively, § 1404(a) gives a district court discretion to transfer venue for the convenience of the parties even if the court finds that the original venue is proper under 28 U.S.C. § 1391(b). Section 1391(b) provides the following standard for determining whether venue is proper:
Venue in General — A judicial decision may be brought in:
28 U.S.C. § 1391(b).
Plaintiff alleges that venue is proper in this District pursuant to § 1391(b)(2). (Am. Compl., ECF No. 17, at 1).
As the legal analysis differs based on whether § 1404(a) or § 1406(a) applies,
Conversely, if Defendants cannot sustain their burden of showing that venue is improper under § 1391(b)(2), then the Court will apply § 1404(a). See Ziemkiewicz v. R+L Carriers, Inc., No. CIV.A. 12-1923, 2013 WL 505798, at *1 (D.N.J. Feb. 8, 2013) (noting that if "jurisdiction and venue is proper, this Court has the authority to sua sponte transfer this case pursuant to 28 U.S.C. § 1404(a)"); accord Lester v. Gene Exp., Inc., No. CIV. 09-0403, 2009 WL 3757155, at *8 n. 5 (D.N.J. Nov. 10, 2009). Section 1404(a) states: "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 or to any district or division to which all parties have consented."
Once the Court determines the applicable transfer statute, the Court will then determine whether transfer to the Eastern District of Pennsylvania would be appropriate under that standard.
The Court first examines the propriety of venue under § 1391(b)(2), Plaintiff's only stated basis for venue in this District. Under that subsection, venue is appropriate in a judicial district in which "a substantial part of the events or omissions giving rise to the claim occurred." § 1391(b)(2). One Court in this District has detailed the proper method for determining whether the substantiality requirement has been met:
Furthermore, "[i]n an action sounding in contract, the factors determining where the claim arose include where the contract was negotiated or executed, where the contract was to be performed, and where the alleged breach occurred." Frato v. Swing Staging, Inc., Civ. A. No. 10-5198, 2011 WL 3625064, at *4 (D.N.J. Aug. 17, 2011) (citing Allianz Life Ins. Co. of N. Am. v. Bleich, Civ. A. No. 08-668, 2008 WL 4852683, at *5 (D.N.J. Nov. 7, 2008)).
Here, in a sworn document, Gerhardt Rodenberger, General Manager of FerraTex, contends that the parties negotiated and entered into the Letter Agreement, as well as negotiated and signed the Personal Guarantee, during a meeting in New Jersey. (Aff. of Gerhardt Rodenberger, ECF No. 26, at 2-4, ¶¶ 6, 9 & 15). In its papers, FerraTex highlights the weight this factor carries in a § 1391(b)(2) substantiality determination. (Pl.'s Br. in Opp'n, ECF No. 25, at 16, 18).
Defendants argue that, as only 8.9% of the total amount at issue is potentially connected with the construction of the New Jersey-based GSP Project
Moreover, this Court agrees with FerraTex that there can be more than one place in which a "substantial part" of the acts or omissions occurred. The Third Circuit has said that a court is not required to determine the "best" forum. Cottman Transmission Sys., 36 F.3d at 294. Rather, multiple fora can serve as appropriate venues under § 1391(b)(2). Leone v. Cataldo, 574 F.Supp.2d 471, 484 (E.D.Pa.2008). Thus, while it is possible that a larger portion of the performance of the contracts at issue may have occurred in New York or in the Cayman Islands, as Defendants
While Defendants appear to doubt the veracity of the information contained within the Amended Complaint, as FerraTex did not include allegations regarding amounts due in connection with the GSP Project in the original Complaint, (Compl., ECF No. 1, at 5-16, ¶¶ 20, 23-92), this Court must take Plaintiff's factual allegations as true at this point in the litigation. See, e.g., RAIT P'ship, L.P. v. Fieldstone Lester Shear & Denberg, LLP, No. 09-28-GMS/MPT, 2009 WL 3297310, at *2 (D.Del. Oct. 14, 2009) report and recommendation adopted. No. CIV.A. 09-28, 2010 WL 786551 (D.Del. Mar. 3, 2010) ("In Rule 12(b)(3) [improper venue] motions, the court must generally accept the allegations in the complaint as true.").
In any event, as the price of the New Jersey GSP Project as memorialized in the Letter Agreement includes sums owed in connection with the Exxon Project, (Am. Compl., ECF No. 17, at 3, ¶ 13), the Court agrees with FerraTex that New Jersey, the location the parties entered into the contract and where partial performance occurred, is also the location of an alleged breach.
As contractual negotiations, contract execution, partial performance, and alleged breach appear to have occurred in New Jersey, this Court is persuaded that a substantial portion of the events or omissions giving rise to the instant action occurred in this District. The Court therefore finds that venue in New Jersey is proper pursuant to § 1391(b)(2). See Shore Slurry Seal, Inc. v. CMI Corp., 964 F.Supp. 152, 154 (D.N.J.1997) (finding venue in New Jersey proper when "[t]he parties signed the sales agreement in New Jersey" and "defendant shipped the equipment to New Jersey").
Having found that venue in New Jersey is proper in this matter, the Court must apply § 1404(a) rather than § 1406(a) to determine whether transfer is appropriate under the circumstances. See, e.g., Lafferty v. St. Riel, 495 F.3d 72, 76 (3d Cir.2007). A prerequisite for the Court to transfer pursuant to § 1404(a) is that venue would be proper in the proposed district. See, e.g., Frato, 2011 WL 3625064, at *2 (citing Santi, 722 F.Supp.2d at 606). The Court finds venue would be proper in the Eastern District of Pennsylvania, pursuant to § 1391(b)(1), as both named defendants are based in Langhorne, Pennsylvania (Bucks County), which falls within the geographic boundaries of the Eastern District of Pennsylvania. (Am. Compl., ECF No. 17, at 2, ¶¶ 4-5).
That venue is proper in the Eastern District of Pennsylvania, however, does not necessarily direct the Court to grant Defendants' motion, as venue may be proper in more than one forum. See, e.g., Giant Peach Records, LLC v. Mitchell, No. 2:13-CV-01702 SDW, 2014 WL 1234429, at *2 (D.N.J. Mar. 25, 2014) (quoting Database Am., Inc. v. Bellsouth Adver. & Pub. Corp., 825 F.Supp. 1216, 1224 (D.N.J.1993)) ("Venue may be appropriate in more than one district `provided that `substantial' activities occurred in multiple
As noted above, Section 1404(a) reads in relevant part: "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." In the Third Circuit, however, courts must not to limit their consideration to the factors expressly stated in § 1404(a), "but rather are instructed to employ an analysis of all `relevant public and private interests.'" Frato, 2011 WL 3625064, at *2 (quoting Santi, 722 F.Supp.2d at 606). The relevant private interests include: "(1) plaintiffs forum preference; (2) the defendant's preference; (3) whether the claim arose elsewhere; (4) the convenience of the parties; (5) the convenience of the witnesses; and (6) the location of books and records." Id. (citing Jumara v. State Farm Ins. Co., 55 F.3d 873, 879 (3d Cir.1995)). The relevant public interests include: "(1) the enforceability of the judgment; (2) practical considerations that could make the trial easy, expeditious or inexpensive; (3) the relative administrative difficulty in the two fora from court congestion; (4) the local interest in deciding controversies at home; (5) the public policies of the fora; and (6) the familiarity of the trial judge with the applicable state law in diversity cases." Id. (citing Jumara, 55 F.3d at 879-80). The Court will address these factors in turn.
"A `[p]laintiff's choice of forum is a paramount consideration that should not lightly be disturbed.'" Id. at *3 (quoting Clark v. Burger King Corp., 255 F.Supp.2d 334, 338 (D.N.J.2003)) (alteration in original). However, a plaintiffs preference, manifested through his or her forum choice, is to be given less deference when the choice is not the plaintiffs home forum. See, e.g., Microsoft Corp. v. LBS Innovations LLC, No. 12-CV-0848, 2012 WL 6028857, at *3 (D.N.J. Nov. 8, 2012). In the instant matter, FerraTex is a Virginia corporation. (ECF No. 17, at 2, ¶ 3). Therefore, FerraTex's preference can be more easily overcome than could a New Jersey corporation's preference.
Defendants wish to litigate in their home fora of Pennsylvania. Defendant U.S. Sewer & Drain is incorporated in Pennsylvania and has its principal place of business in Pennsylvania. (Am. Compl., ECF No. 17, at 2, ¶ 4). Defendant Bowman is a Pennsylvania resident. (Id. ¶ 5). This factor accordingly weighs in favor of transfer.
In contract actions, "the factors determining where the claim arose include where the contract was negotiated or executed, where the contract was to be performed, and where the alleged breach occurred." Frato, 2011 WL 3625064, at *4 (citing Allianz Life Ins. Co. of N. Am. v. Estate of Bleich, Civ. A. No. 08-668, 2008
The next private interest factor under § 1404(a) is convenience of the parties. FerraTex is unlikely to be more inconvenienced by either a New Jersey or Pennsylvania forum because the fora are approximately equidistant from Virginia, the place of FerraTex's incorporation and principal place of business. (Am. Compl., ECF No. 17, at 2, ¶ 3). Moreover, transfer to the Eastern District of Pennsylvania would decrease Defendants' trip by only approximately forty miles, as Langhorne, Pennsylvania (where Defendants are located) is approximately sixty-five miles from Newark, New Jersey and approximately twenty-five miles from Philadelphia, Pennsylvania (the likely destination for this case should the Court elect to transfer this matter to the Eastern District of Pennsylvania). The Court notes that "[u]nless the defendant can show that the inconvenience to the parties strongly favors its preference, plaintiffs choice of forum should prevail." Santi, 722 F.Supp.2d at 607 (citing Shutte v. Armco Steel Corp., 431 F.2d 22, 25 (3d Cir.1970)).
Furthermore, in the Personal Guarantee, which encompasses all funds at issue in this action, Defendant Bowman consented to the "jurisdiction of the courts of New Jersey in any action or proceeding ... arising out of this personal guarantee." (Ex. B, ECF. No. 26-2, at 1-2). While there is no similar consent paragraph in the Letter Agreement, it appears that traveling to New Jersey would not be burdensome to Defendant U.S. Sewer & Drain, as U.S. Sewer & Drain is the plaintiff in a breach of contract action it filed on February 26, 2015 in the District of New Jersey. (Certification of Steven D. Janel in Supp., ECF No. 22-1, at 2); U.S. Sewer & Drain, Inc. v. Earle Asphalt Co., Civ. No. 15-1461, 2015 WL 3461087 (D.N.J. June 1, 2015). As such, the Court concludes that this factor weighs against transfer.
As the two districts are spaced relatively close together, with a distance of approximately eighty-six miles apart, convenience of any witnesses should not pose a problem. Moreover, the Court only considers this factor "to `the extent that the witnesses may actually be unavailable for trial in one of the fora.'" Ziemkiewicz v. R+L Carriers, Inc., No. CIV. A. 12-1923, 2013 WL 505798, at *4 (D.N.J. Feb. 8, 2013) (quoting Jumara, 55 F.3d at 879). Here, neither party has identified any witnesses who would be unavailable to testify at trial
"The location of books and records is only material `to the extent that the files could not be produced in the alternative forum.'" Ziemkiewicz, 2013 WL 505798, at *4 (quoting Jumara, 55 F.3d at 879). "[I]t is often irrelevant today because of `recent technological advances' that enable the documents at issue in the litigation to be readily produced in even a distant forum." Id. (quoting Jumara, 55 F.3d at 879). As neither party has identified any documents that would be unavailable in either forum this factor is also neutral.
In summary, the Court finds on balance that the above private interest factors weigh against transfer to the Eastern District of Pennsylvania.
For similar reasons, the Court finds the public interest considerations involved with the Court's § 1404(a) analysis also weigh against transfer. As mentioned above, the public interests relevant to the Court's analysis are:
Frato, 2011 WL 3625064, at *2 (citing Jumara, 55 F.3d at 879-80).
The "enforceability of the judgment" factor is neutral, as a judgment rendered in either this District or the Eastern District of Pennsylvania could easily be registered in another District. Nothing in the record for this matter suggests otherwise.
Neither party has identified any practical considerations that would increase efficient use of court resources in a particular district. This factor is also neutral.
Neither party has notified the Court that one venue has a substantially more congested docket than the other. The Court recognizes that both Districts are quite busy. Therefore, this factor is neutral.
In analyzing local interest in the transfer analysis context, this Court has considered the "locus of the majority of the relevant conduct" and where the agreements "transpired," rather than the residences of the parties. Chigurupati v. Daiichi Sankyo Co., No. CIV. 10-5495, 2011 WL 3443955, at *6 (D.N.J. Aug. 8, 2011) aff'd, 480 Fed.Appx. 672 (3d Cir.2012). As the agreements here transpired primarily in New Jersey and not in Pennsylvania, the Eastern District of Pennsylvania has little local interest in adjudicating this dispute despite the Pennsylvania residencies of Defendants. Conversely, contractual negotiations and execution, an alleged breach, and construction of one of the projects at issue occurred in New Jersey. As "[t]he burden of jury duty should not be placed on citizens with a remote connection to the lawsuit," New Jersey residents rather than Pennsylvania residents should act as jurors during any trial. See Coppola v. Ferrellgas, Inc., 250 F.R.D. 195, 200-01 (E.D.Pa.2008) (quoting Nat'l Prop. Investors VIII v. Shell Oil Co., 917 F.Supp. 324, 330 (D.N.J.1995)).
Additionally, Defendants concede that the GSP Project concerns the development of the Garden State Parkway, a major
Neither party has alleged that the public policies of either forum are more or less favorable to the claims and defenses at issue. The Court finds that this factor is therefore neutral to its analysis.
The final public interest factor concerns the familiarity of the trial judge with applicable state law. This factor is relevant because the instant matter is a diversity action, so state substantive law applies. See, e.g., Santomenno, 2012 WL 1113615, at *10.
"New Jersey choice of law rules instruct that the governing law in contract cases is `that of the jurisdiction with the most significant relationship and closest contacts with the transaction and the parties.'" Chigurupati, 2011 WL 3443955, at *6 (quoting Pepe v. Rival Co., 85 F.Supp.2d 349, 380 (D.N.J.1999)) aff'd, 480 Fed.Appx. 672 (3d Cir.2012). It appears that Plaintiff's claims arose primarily in New Jersey, and that New Jersey law will therefore apply to those claims.
However, the Court notes that this factor does not weigh strongly in either direction as two districts in close proximity to each other "inevitably" must adjudicate many diversity actions and are likely capable of applying the other's law if the case does not present "novel or complex issues." Frato, 2011 WL 3625064, at *6. Moreover, nothing in the record suggests that the relevant legal principles (i.e., the law governing contract and quasi-contractual/equitable principles) differs significantly between New Jersey and Pennsylvania. The Court finds that this factor is essentially neutral to its analysis. The Court acknowledges, however, that to the extent there is any benefit to be gained by the District of New Jersey's familiarity with the New Jersey law at issue, this factor weighs against transfer.
The Court finds that, on balance, the Jumara factors weigh against transferring this matter to the United States District Court for the Eastern District of Pennsylvania. The Court therefore finds that transfer would be inappropriate under 28 U.S.C. § 1404(a).
In the alternative to transferring this matter to the Eastern District of Pennsylvania, Defendants have requested in passing that the Court reassign this case to the Trenton Vicinage of the District of New Jersey. Local Rule of Civil Procedure 40.1 governs the initial assignment and reassignment of cases to vicinages and judges within this District.
This Court therefore denies without prejudice Defendants' application to transfer this matter to the Trenton Vicinage of the District of New Jersey.
Based on the foregoing, Defendants' motion to transfer to the Eastern District of Pennsylvania (ECF No. 22) is
