NORA BARRY FISCHER, District Judge.
This is a contract dispute concerning the alleged improper disclosure of confidential information, intellectual property, and trade secrets. Plaintiff Waterfront Technologies, Inc. ("Waterfront") asserts four claims against Defendant InScope International, Inc. ("InScope") in connection with alleged disclosures of such information made by Joseph Celano, a former employee of InScope, to another corporation CONXX, Inc. ("CONXX"). (Docket No. 13 at ¶¶ 69-70, 84-88). As a result, CONXX was allegedly awarded a contract with the Port of Pittsburgh Commission ("Port Commission") to develop inland waterway control systems ("Wireless Waterways"), which Waterfront had been pursuing. Id. at ¶¶ 87, 89, 90-91.
Pending before the Court is InScope's Motion to Dismiss Amended Complaint, or in the Alternative, to Transfer. (Docket No. 14). InScope seeks to dismiss or stay this action pursuant to the Federal Arbitration Act. In the alternative, it seeks to transfer this case to the Eastern District of Virginia in accordance with 28 U.S.C. § 1404(a). This matter has been fully briefed by the parties and the Court held a motion hearing on May 10, 2013. (Docket Nos. 18; 20; 21; 24; 27; 28; 29; 5/10/13 Hr'g Trans). After consideration of all of the parties' arguments, the Court denies InScope's Motions for the following reasons.
The Federal Arbitration Act ("FAA"), 9 U.S.C. § 1, et seq., provides, in pertinent part, that "[a] written provision in ... a contract evidencing a transaction involving commerce to settle by arbitration a controversy thereafter arising out of such contract or transaction ... shall be valid, irrevocable, and enforceable, save such grounds as exist at law or in equity for the revocation of any contract."
The United States Court of Appeals for the Third Circuit recently articulated a two-step analysis for courts confronted with a dispute as to the validity and scope of an arbitration agreement:
Guidotti v. Legal Helpers Debt Resolution, L.L.C., No. 12-1170, __ F.3d __, 2013 WL 2302324, at *8 (3d Cir. May 28, 2013) (citations and quotations omitted). The interpretation and construction of arbitration agreements are determined by reference to federal substantive law. Harris v. Green Tree Fin. Corp., 183 F.3d 173, 179 (3d Cir. 1999) (citing [Moses H. Cone, Mem'l Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 25, n.32, 103 S.Ct. 927, 74 L.Ed.2d 765 (1983)]).
The Amended Complaint references two contracts that were contemporaneously executed on June 16, 2010—the "Mutual Non-Disclosure / Non-Circumvention Agreement" ("ND/NCA") and the "Teaming Agreement." (Docket No. 13 at ¶¶ 17, 20). Both contracts expressly prohibit the improper disclosure of confidential and/or proprietary information.
Based on the facts alleged in the Amended Complaint and the supporting documents it references, the Court does not find that arbitration is warranted at this juncture. There are insufficient facts to determine whether the arbitration clause in the Teaming Agreement governs this dispute. As in Battaglia I, there are countervailing indications about whether the agreements should be read together. Both the ND/NCA and the Teaming Agreement were entered into contemporaneously. The parties to the agreement are also the same parties that are now before the Court. To the extent that Waterfront argues the Teaming Agreement essentially expired, (Docket No. 29 at 4), the Teaming Agreement provided that the contract was to terminate in one year "[e]xcept as it relates to Proprietary Information." (Docket No. 18-1 at ¶ 4.1). Accordingly, it appears that the Teaming Agreement's protection of Proprietary Information may be perpetual. On the other hand, the agreements do not reference each other. Furthermore, they both contain "Entire Agreement" clauses that suggest each contract is to be read separately.
Alternatively, Defendant InScope seeks to transfer this action to the Eastern District of Virginia. Pursuant to 28 U.S.C. § 1404(a), a district court may transfer a civil case to another district "[f]or the convenience of the parties and witnesses, in the interest of justice." 28 U.S.C. § 1404(a). Such transfers "are discretionary determinations made for the convenience of the parties and presuppose that the court has jurisdiction and that the case has been brought in the correct forum." Lafferty v. Gito St. Riel, 495 F.3d 72, 76, 79 n. 8 (3d Cir.2007). The purpose of § 1404(a) is to protect the parties, witnesses, and the general public against unnecessary inconvenience and expense. Van Dusen v. Barrack, 376 U.S. 612, 616 (1964). The party seeking a transfer bears the burden of establishing that the transfer is appropriate and must demonstrate that the alternative forum is adequate and more convenient. Jumara v. State Farm Ins. Co., 55 F.3d 873, 879 (3d Cir. 1995). The moving party must show that "on balance the litigation would more conveniently proceed and the interests of justice be better served by transfer to a different forum." Id. (internal quotations omitted).
In Jumara, the Third Circuit outlined the private and public factors for the Court to consider in exercising its discretion. Id. The relevant private factors to consider include: (1) each party's forum preference; (2) where the claim arose; (3) the convenience of the parties as indicated by their relative physical and financial conditions; (4) the convenience of the witnesses; and, (5) the locations of books and records. Id.; see also In re Amendt, 169 F. App'x. 93, 96 (3d Cir. 2006) (same). The Court also considers a number of public factors, including: (1) enforceability of judgment; (2) practical considerations that could make the trial easy, expeditious or inexpensive; (3) the relative administrative difficulty in the two fora resulting from court congestion; (4) the local interest in deciding local 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. Jumara, 55 F.3d at 879. Upon consideration of the Jumara factors, the Court finds that transferring this case to the Eastern District of Virginia is inappropriate.
The Court also considers "whether the claim arose elsewhere." Jumara, 55 F.3d at 879. This is a separate consideration from the convenience of the parties and focuses on where the alleged wrongful activity or other activities relevant to the claims at issue took place. Courts have recognized that for purposes of analyzing a motion to transfer, the place of performance is where the claim for breach of contract arose. See Stillwagon v. Innsbrook Golf & Marina, LLC, 2013 WL 1180312, at *26 (W.D. Pa. Mar. 20, 2013) (Hornak, J.) (citing J.L. Clark Mfg. Co. v. Gold Bond Corp., 629 F.Supp. 788, 791 (E.D. Pa. 1985)).
As a background matter, it appears there are three relevant contracts at issue: the ND/NCA, the Teaming Agreement, and the Cooperative Reseach and Development Agreement ("CRADA"). Both the ND/NCA and Teaming Agreement were executed in anticipation of negotiations with the Space and Naval Warfare Systems Center Pacific ("SSC Pacific"). (Docket No. 13 at ¶¶ 17-18, 20, 29). In accordance with the CRADA that was later executed between Waterfront, InScope, and SSC Pacific, the parties were to explore common business interests, develop new technology, and market their joint capabilities to governmental and business entities. Id. at ¶¶ 29-30. They then targeted the Port Commission as a client with an eye toward developing the Wireless Waterways in Pittsburgh. Id. at ¶¶ 32, 34-36. The subject claims arose when InScope allegedly authorized a former employee, Mr. Celano, to disclose Waterfront's confidential information to CONXX. Id. at ¶¶ 68-70, 84-89. As a result, CONXX was able to win the Port Commission contract, cutting Waterfront out of the deal. Id. at ¶¶ 89-92.
In this Court's estimation, this Jumara factor does not weigh in favor or against transfer. The ND/NCA and Teaming Agreement prohibit the parties from disclosing confidential and/or proprietary information. The "performance" of the duty to refrain from disclosing such information is not limited to a particular location. Neither contract contains any reference to geographic parameters. (See Docket No. 13-1; Docket No. 18-1). Given that the parties have nationwide operations, the performance of both contracts can be said to be nationwide in scope. Thus, it is equally true that the breach of contract claims arose in the Western District of Pennsylvania as they did in the Eastern District of Virginia.
The Court further finds that the relative convenience of the parties does not tend to favor retaining or transferring this action to the Eastern District of Virginia. Neither party is a resident of the Western District of Pennsylvania. Nevertheless, Waterfront has represented it is prepared to litigate before this Court. (Docket No. 20 at 15). InScope contends that, as an organization owned by employees, veterans, and minorities, it does not have the financial wherewithal to defend its legal interests in this District. (Docket No. 21 at 12). During the motion hearing, however, Waterfront pointed out that InScope was one of the largest black-owned businesses with revenue of $33 million. 5/10/13 Hr'g Trans. at 53. In this Court's estimation, it does not seem that litigating in this forum would be unduly onerous for either party.
The convenience of the witnesses is a separate consideration from that of the parties. Since "party witnesses are presumed to be willing to testify in either forum despite any inconvenience ... [t]he convenience of the non-party witnesses is the main focus" of this factor. Hillard v. Guidant Corp., 76 F.Supp.2d 566, 570 (M.D. Pa. 1999). The Court, therefore, confines its analysis to the convenience of the non-party witnesses and considers this factor "only to the extent that the witnesses may actually be unavailable for trial in one of the fora." Jumara, 55 F.3d at 879 (emphasis added).
Based on the information provided by the parties, the Court finds that convenience of non-party witnesses favors retaining this action in this forum. There are a number of non-party individuals who could become witnesses: (1) personnel for the Port Commission; (2) CONXX employees; (3) employees with Scientel;
Jumara directs the Court to consider "the location of books and records (similarly limited to the extent that the files could not be produced in the alternative forum)." Jumara, 55 F.3d at 879. Waterfront argues that there is no reason why books and records cannot be produced in this District and believes that much of the discovery will be exchanged electronically. (Docket No. 20 at 16). Therefore, this factor neither favors nor disfavors transfer.
According to the Federal Court Management Statistics, there were 3,205 filed cases before ten judges in the Western District of Pennsylvania for an average of 321 cases per judge and a "weighted filing" score of 329 in the twelve months prior to September 30, 2012. See http://www.uscourts.gov/Statistics/FederalCourtManagementStatistics.aspx. In comparison, the Eastern District of Virginia had 5,133 filings before eleven judges for an average of 467 cases per judge and a "weighted filing" score of 472 during that same time frame. Id. Given that the Eastern District of Virginia is relatively more congested, this factor weighs in favor of retaining the case in this forum.
Courts have an interest in resolving matters of local interest. Gulf Oil Corp. v. Gilbert, 330 U.S. 501, 509 (1947) ("In cases which touch the affairs of many persons, there is reason for holding the trial in their view and reach rather than in remote parts of the country where they can learn of it by report only. There is a local interest in having localized controversies decided at home."). This factor also overlaps with factors already discussed (where the claim arose and the convenience of the parties), see LG Elecs. Inc. v. First Int'l Computer of Am., Inc., 138 F.Supp.2d 574, 592 (D.N.J. 2001), as well as the factor regarding the public policies of the forum; therefore, the Court limits its focus to the interests of local judges and juries in events in their community.
This matter arises from InScope's alleged disclosure of confidential information, which thwarted Waterfront from obtaining a contract with the Port Commission to build the Wireless Waterways. The Court takes judicial notice that the $1.3 million Wireless Waterways project has been unveiled, which the Port Commission believes will revolutionize industrial and recreational travel on the rivers in the area. See $1.3 Million Wireless Broadband Project for Rivers Unveiled, available at: http://www.post-gazette.com/stories/business/news/13-million-wireless-broadband-project-for-rivers-unveiled-690762/. This is certainly a topic of interest for the jurists and people of this District. Therefore, this factor favors keeping the action in this District.
In summation, there are three Jumara factors that favor retaining this action in the Western District of Pennsylvania—the convenience of the non-party witnesses, the relative docket congestion, and the interest in deciding matters that relate to a local project. None of the Jumara factors weigh in favor of transferring this case to the Eastern District of Virginia. All of the remaining factors are neutral as to the appropriateness of transferring venue. Accordingly, on balance, the Jumara factors weigh against transfer of venue.
For the foregoing reasons, the Court denies InScope's motion to dismiss or stay this action, without prejudice, to renewing this argument by way of an appropriate motion at the conclusion of limited discovery. In addition, the Court denies InScope's motion to transfer venue.
IT IS HEREBY ORDERED that InScope's "Motion to Dismiss Amended Complaint, or in the Alternative, to Transfer" [14] is DENIED;
IT IS FURTHER ORDERED that the parties shall conduct limited discovery on issues related to the applicability of the disputed arbitration clause in this case, to end on
FINALLY, IT IS ORDERED that the Court will conduct a telephone status conference on
(Docket No. 13-1 at ¶1(a)). The ND/NCA prohibited the disclosure of a party's Confidential Information to any other entities, except as necessary "(i) for negotiations discussions, and consultations with personnel or authorized representatives of the other party, (ii) as may be required by a governmental agency or regulatory body ..., (iii) and any purpose the other body may hereafter authorize in writing." (Id. at ¶ 21). Similarly, the Teaming Agreement prohibited disclosure of "Proprietary Information" subject to essentially the same limitations. (Docket No. 18-1 at ¶ 3.3). The Teaming Agreement broadly defined Proprietary Information as:
Id. at ¶¶ 3.2.
(Docket No. 13-1 at ¶ 18). The Teaming Agreement contains a very similar "Entire Agreement" clause:
(Docket No. 18 at ¶ 16.1). The only significant difference is the inclusion of the term "contemporaneous" in the ND/NCA. The Teaming Agreement only purports to supersede "prior" agreements.