Hohenberg v. Ferrero USA, Inc
REPLY to Response to Motion re 33 MOTION for Leave to File Under Seal filed by Ferrero USA, Inc. (Attachments: # 1 Proof of Service)(Bish, Dale) (ag).
1 2 3 4 5 KEITH E. EGGLETON, State Bar No. 159842 COLLEEN BAL, State Bar No. 167637 DALE R. BISH, State Bar No. 235390 AMIR STEINHART, State Bar No. 275037 WILSON SONSINI GOODRICH & ROSATI Professional Corporation 650 Page Mill Road Palo Alto, CA 94304-1050 Telephone: (650) 493-9300 Facsimile: (650) 565-5100 6 7 Attorneys for Defendant FERRERO U.S.A., INC. 8 UNITED STATES DISTRICT COURT 9 FOR THE SOUTHERN DISTRICT OF CALIFORNIA 10 11 In re FERRERO LITIGATION 12 13 14 15 16 17 18 19 20 ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) CASE NO.: 11 CV 0205 H (CAB) DEFENDANT FERRERO U.S.A., INC.’S REPLY IN SUPPORT OF ITS MOTION TO TRANSFER VENUE Date: May 16, 2011 Time: 10:30 a.m. Before: Hon. Marilyn L. Huff 21 22 23 24 25 26 27 28 DEFENDANT’S REPLY IN SUPPORT OF MOTION TO TRANSFER VENUE 11 CV 0205 H 1 INTRODUCTION 2 As set forth in its opening memorandum, Ferrero U.S.A., Inc. (“Ferrero”) does not 3 dispute that this judicial district is one proper forum for this action. Indeed, at the outset of the 4 litigation, Ferrero intended to litigate the case here – and retained California-based lawyers to do 5 so – notwithstanding that Ferrero’s headquarters and relevant witnesses are located in and around 6 New Jersey. But the landscape changed once another plaintiff filed a nearly-identical complaint in the 7 8 District of New Jersey that challenges the same conduct, seeks the same relief, and purports to 9 represent the same nationwide class of consumers who purchased Nutella® in the United States 10 between 2008 and the present.1 From the moment that case was filed, Ferrero has attempted to 11 have these cases litigated together and efficiently. For reasons unclear to Ferrero, the California 12 and New Jersey plaintiffs have refused to work together to try to agree on a common venue, and, 13 instead, required Ferrero to seek transfer of one of the cases – i.e., either transferring the Glover 14 action to California, or transferring the Hohenberg action to New Jersey – under 28 U.S.C. 15 Section 1404(a). For the reasons set forth in this transfer motion, including that its headquarters 16 and the vast majority of witnesses and evidence are located in New Jersey, Ferrero seeks in this 17 motion to transfer the Hohenberg action to New Jersey.2 The only other options to avoid duplicative litigation are to seek dismissal of the New 18 19 Jersey action (as the Hohenberg plaintiffs prefer) or to petition the Panel on Multi-District 20 21 22 23 24 25 26 27 28 1 Although the Hohenberg plaintiffs purport to represent a class of consumers dating back to January 1, 2000, the challenged advertisements at the core of their claims did not appear in the United States until 2008 (when they were aired in test markets in Providence, Rhode Island and Albany, New York) and did not appear in California until 2009. Moreover, neither plaintiff purchased Nutella® until 2009 (Compl. ¶¶ 26, 29) and therefore lack standing to pursue any claims based on a prior formulation of Nutella® that they never purchased. Compl. ¶ 69 (alleging that Nutella® was reformulated in 2008 to remove PHVO). Therefore, the two purported classes are fundamentally identical and overlapping. 2 Concurrently, Ferrero is seeking to dismiss the Hohenberg action entirely for its failure to state any viable claims against Ferrero; the motion to dismiss is scheduled to be heard on June 13, 2011. In addition, today is the deadline for Ferrero to respond to the complaint filed in the District of New Jersey. Ferrero will do so by moving to dismiss that complaint as well for failure to state a claim. DEFENDANT’S REPLY IN SUPPORT OF MOTION TO TRANSFER VENUE -1- 11 CV 0205 H 1 Litigation for pre-trial consolidation under Section 1407 (as Ms. Glover prefers). But it is 2 unnecessary to form an MDL with only two cases pending when Section 1404(a) can be used to 3 bring the cases together. Indeed, this is a type of situation Section 1404(a) is perfectly situated to 4 address. 5 Ferrero respectfully submits that transfer under Section 1404(a) is the right procedural 6 mechanism under these circumstances. The question then becomes which judicial district – the 7 Southern District of California or District of New Jersey – has a stronger connection to the 8 parties and witnesses, the challenged conduct, and the claims asserted. As set forth in Ferrero’s 9 opening memorandum, those factors support transfer to the District of New Jersey. 10 A. 11 In their opposition, plaintiffs argue that Ferrero has “substantial contacts” with 12 California. Opp. at 1-5, 9-10. Ferrero has not suggested otherwise and does not contest this 13 Court’s jurisdiction over it. Because Ferrero sells Nutella® throughout the United States, it has 14 contacts with states around the country. However, there is nothing unique about its California 15 “substantial contacts” that makes the Southern District of California any more appropriate than 16 other judicial districts, much less the District of New Jersey. 17 There Is Nothing Unique About the “Substantial Contacts” with California Plaintiffs place most of their emphasis on the fact that two of the named plaintiffs live 18 here and that Ferrero sells a “significant amount” of Nutella® in the state. Opp. at 1-2. If those 19 were the dispositive factors under Section 1404, as plaintiffs suggest, then California’s sheer size 20 and population density would effectively convert this state into the de facto forum for resolving 21 nationwide class actions. Under plaintiffs’ approach, California residents would be able to 22 defeat virtually any motion to transfer – notwithstanding the location of relevant witnesses, 23 events, and evidence – a result that is contrary to the principles underlying Section 1404 and 24 notions of comity amongst the federal courts. Italian Colors Restaurant v. American Express 25 Co., No. C. 03-3719 SI, 2003 WL 22682482 (N.D. Cal. Nov. 10, 2003) (cautioning that due to 26 California’s population, “‘virtually every significant class action case would need to be litigated 27 28 DEFENDANT’S REPLY IN SUPPORT OF MOTION TO TRANSFER VENUE -2- 11 CV 0205 H 1 in California, a logic that has been repeatedly rejected”) quoting Ho v. Ikon Office Solutions, 2 Inc., 143 F.Supp.2d 1163, 1167-68 (N.D. Cal.2001).3 Other than its enormous population, there is nothing unique about the “significant” sales 3 4 of Nutella® in California – much less in this judicial district. Although plaintiffs suggest that 5 sales of Nutella® in California are disproportionally higher than its population (id. at 2 n.3), 6 Ferrero has repeatedly explained to plaintiffs that they could not draw such conclusions from the 7 data. For example, plaintiffs emphasize the sales data from Target and Costco (which have a 8 relatively high presence in California) while deemphasizing Wal-Mart – the largest retailer in the 9 United States by orders of magnitude – that has a substantially smaller footprint in California 10 than in other parts of the country. Opp. at 2-3. That Californians prefer to shop at Target and 11 Costco instead of Wal-Mart has no bearing whatsoever on whether this case can be transferred to 12 the District of New Jersey to avoid duplicative and wasteful litigation. 13 The other “substantial contacts” identified by plaintiffs are even less relevant. For 14 example, Nutella® is advertised nationally and despite plaintiffs’ characterization (id. at 4), there 15 is nothing unique about the advertisements that run in California. Similarly, Ferrero “sends” its 16 sales force into every state, not just California (id. at 4), and its third-party distributors “move 17 18 19 20 21 22 23 24 25 26 27 28 3 Plaintiffs argue this case is “localized” in the Southern District of California because many class members live in this state. See Opp. at 22-23. Under plaintiffs’ definition, this dispute is “localized” in every judicial district in the United States given the widespread distribution of Nutella® in this country. But the case law does not support that proposition. For example, in NBA Props, cited by plaintiffs, the court explained that “the action’s nexus with this District go beyond mere sales” because, for example, the parties had attended meetings with each other in New York and “[c]onsequently, for reasons other than sales of the Plush Toys in New York, the locus of the operative events is New York.” 2000 U.S. Dist. LEXIS 3799 at *12 (S.D.N.Y. March 27, 2000). Similarly, in King v. Johnson, the court considered the large number of class members in California but emphasized that California was a more appropriate venue than Maryland (plaintiff’s preferred venue) because: USI’s principal office and manufacturing facilities are located in Compton, California, within the district to which transfer is sought. USI has no Maryland offices. Of the companies’ six top managers, four live in California. None live anywhere near Maryland. All of the corporate records are located in California. Should the case proceed to trial in this Court, USI personnel and documents will have to be shuffled back and forth between Los Angeles and Baltimore. Clearly, this would inconvenience USI. 565 F. Supp. 711, 719 (D.Md. 1983). DEFENDANT’S REPLY IN SUPPORT OF MOTION TO TRANSFER VENUE -3- 11 CV 0205 H 1 product” to retailers throughout the country, not just California (id. at 5). None of these facts 2 weigh in favor of litigating this case in the Southern District of California, or in any other 3 particular district for that matter. Italian Colors, 2003 WL 22682482, at *3 (explaining that 4 location of named plaintiff’s transaction with defendant, when the same as those “executed by 5 merchants at thousands of individual businesses throughout the country, deprives this factor of 6 any weight in the analysis of proper venue.”). 7 B. The Southern District of California Is Not More Convenient for the Parties or the Witnesses 8 9 Plaintiffs acknowledge that the District of New Jersey would be more convenient for 10 Ferrero but argue that transferring this action to that court would “shift the inconvenience—and 11 disproportionally at that—onto Plaintiffs.” Opp at 11. Unlike plaintiffs, Ferrero did not 12 voluntarily file litigation and it is not correct that the named plaintiffs in a consumer class action 13 will “disproportionally” bear the “inconvenience” of litigation. The inconvenience of class 14 actions is overwhelmingly borne by the defendant, its employees, and third-party vendors. 15 Italian Colors, 2003 WL 22682482, at *5 (location of defendants’ documents and witnesses 16 more important in transfer analysis where named plaintiff, “can be expected to contribute 17 comparatively little documentary evidence to the action”); Metz v. U.S. Life Ins. Co. in City of 18 New York, 674 F.Supp.2d. 1141, 1147-48 (C.D. Cal. 2009) (granting transfer of class action 19 where inconvenience was unevenly borne by defendant, its employees, and third-party 20 witnesses); Gomez v. Wells Fargo Bank, NA, No. CV-09-00181-PHX-GMS, 2009 WL 1936790, 21 at *4 (D. Ariz. Jul. 2, 2009) (where plaintiffs are the only local connection to the class action, 22 and defendant’s state is the “center of discovery in this case,” as most witnesses and documents 23 are located there, transfer “will ease access to sources of proof, lessen the relative financial 24 burdens of litigation, and reduce the overall cost of litigation.”). 25 True, the named plaintiffs will each be deposed (in San Diego), will each produce the 26 documents they have (in San Diego) and attend mediations (at a mutually agreeable location). 27 But the location of those proceedings will not be affected if the case is transferred to New Jersey. 28 The only proceeding that would require the named plaintiffs to travel to New Jersey is trial DEFENDANT’S REPLY IN SUPPORT OF MOTION TO TRANSFER VENUE -4- 11 CV 0205 H 1 (likely, one day of testimony each) and, possibly, a very few number of other hearings in which 2 their participation may be required.4 While Ferrero is sympathetic to the challenges faced by 3 these individuals in their personal lives – and will work in good faith to accommodate their 4 schedules and commitments – transferring this case to New Jersey will not uproot their daily 5 lives or preclude them from participating in this lawsuit. Opp. at 13-14. Moreover, the 6 possibility of litigating this case in a different forum is attendant to plaintiffs’ decision to pursue 7 claims against a foreign defendant on behalf of a nationwide class of consumers.5 With respect to the convenience of individuals, Ferrero notes – for future purposes – 8 9 plaintiffs’ repeated representation that “the existence of fact-based witnesses in a California false 10 advertising action is of relatively little importance” (Opp. at 17-18) and plaintiffs’ position that it 11 is the expert witnesses that “are really crucial here.” Id. Although Ferrero agrees with plaintiffs 12 that this case involves a very small number of fact witnesses, plaintiffs would have the Court 13 believe that the key witnesses in this case include employees at a Los Angeles production 14 company (Believe Media) that hired actors and operated film cameras, Ferrero’s third-party 15 distributors (Aspen and OHL) that move product from warehouses to shelves, and the two 16 California brokers who sell Nutella® to California retailers (but not the brokers located 17 elsewhere, despite pursuing claims on behalf of a nationwide class). Opp at 19. But those 18 witnesses have little, if any, connection to the allegations of false and deceptive practices alleged 19 in plaintiffs’ complaint. See Italian Colors, 2003 WL 22682482, at *5 (“Since the claims arise 20 solely out of defendants’ business practices, the parties would expect that most of the witnesses 21 will be the defendants’ employees.”). 22 23 24 25 26 27 28 4 If traveling to New Jersey would constitute a burden on the named plaintiffs, Ferrero would not object to their telephonic participation at pre-trial hearings. 5 Although they acknowledge plaintiff’s choice of forum is given less weight in class actions (Opp. at 8), plaintiffs go on to cite a number of cases for the proposition that their choice of forum is entitled to “significant weight.” Id. at 9. Many of those cases were not class actions and not one involved a situation where, as here, there are virtually identical actions pending in separate districts. Although plaintiffs’ choice of forum is given some weight under the circumstances, that preference does not outweigh the considerable burden that would be placed on Ferrero and the courts of litigating the same claims on opposite sides of the country. DEFENDANT’S REPLY IN SUPPORT OF MOTION TO TRANSFER VENUE -5- 11 CV 0205 H Plaintiffs also argue that this Court has subpoena power over various agencies that have 1 2 locations in Los Angeles, without regard to the fact that the individuals who actually interact 3 with Ferrero do not work in those locations. Kreilmann Decl. ¶ 6. It does not require an 4 affidavit to demonstrate that testifying in New Jersey would be more convenient for individuals 5 who live and work in New Jersey and New York. Finally, plaintiffs argue that Ferrero did not satisfy its burden under Section 1404(a) in 6 7 moving to transfer. They are wrong. As explained in Ferrero’s opening brief, the most 8 important factor in circumstances like this are the interests of justice. Opening Memo. at 6.6 9 Had Fererro moved to transfer this case to a judicial district that did not have a nearly-identical 10 case pending, those interests would not have been as strong. But where there are two parallel 11 actions – both in their nascent stages – that assert substantially identical claims and seek identical 12 relief on behalf of the same class members, transfer “is strongly favored because it facilitates 13 pre-trial proceedings and discovery and avoids duplicative litigation and inconsistent results.” 14 Gatdula v. CRST Int’l, Inc., No. Civ. 2:10-58 WBS CMK, 2011 WL 445798, at *3 (E.D. Cal. 15 Feb. 8, 2011) (cited in Opp. at 7). As explained in Ferrero’s opening brief, the accompanying 16 declaration of Bernard Kreilmann, and reiterated above, the relevant factors weigh in favor of 17 transferring this action to the District of New Jersey. The cases that plaintiffs selectively cite do not suggest otherwise. For example, 18 19 plaintiffs’ quotation from Affymetrix, Inc. v. Synteni, Inc., 28 F. Supp. 2d 192 (D. Del. 1998) 20 (Opp. at 15) suggests that court denied a motion to transfer because the movant failed to “name” 21 relevant individuals. In fact, the court explained “that transferring the two actions to the 22 23 24 25 26 27 28 6 Plaintiffs claim that the District of New Jersey is substantially more congested than the Southern District of California. Although plaintiffs cite the higher number of civil filings in New Jersey, they ignore the criminal statistics. See Ellis v. Costco, 372 F.Supp.2d 530, 544 (N.D. Cal. 2005) (cited by plaintiffs, Opp. at 23) (“Congestion in the civil docket of the Southern District of California is lower than the Northern District, but that district’s dramatically heavier criminal docket renders the advantages of transfer on grounds of court congestion at best a marginal note in favor of the Southern District.”). In fact, the Southern District of California has substantially more total filings per judgeship (734) than the District of New Jersey (465) and the District of New Jersey had a 1.2 % decline in total filings whereas the Southern District of California had a 3.8% increase. Fitzgerald Decl. Exh. K. DEFENDANT’S REPLY IN SUPPORT OF MOTION TO TRANSFER VENUE -6- 11 CV 0205 H 1 Northern District of California where another suit filed by Affymetrix is pending may achieve a 2 certain degree of judicial economy.” Id. at 209. Similarly, plaintiffs cite King v. Johnson (Opp. 3 at 23), which actually rejected plaintiffs’ position. 565 F. Supp. at 720 n.15 (“Plaintiffs assert in 4 their opposition memorandum that USI must identify the witnesses that will be inconvenienced, 5 and that probabilities may not be relied upon to carry its burden as moving party. It seems, 6 though, that to require detailed witness lists at this stage of a proceeding as potentially 7 complicated and far-reaching as the instant suit would be impractical, at best.”). * 8 * * * 9 In their opposition, plaintiffs cite more than 75 cases – many of which weigh in favor of 10 transfer – but have failed to cite a single case in which a court denied a Section 1404(a) motion 11 where the moving party sought to transfer a case to a forum in which there was a parallel action 12 asserting the same claims on behalf of the same purported class. On the contrary, plaintiffs’ own 13 cases explain that any “inconvenience that transfer will impose on Plaintiff” does not outweigh 14 “the possibility of inconsistent rulings and the inefficiency of duplicative litigation.” Schott v. 15 Ivy Asset Mgmt. Corp, No. 10-CV-01562-LHK, 2010 WL 4117467, at *10 (N.D. Cal. Oct. 19, 16 2010) (cited in Opp. at 6, 9); Gatdula, 2011 WL 445798, at *3 (cited in Opp. at 7); see also, 17 Baird v. Cal. Faculty Ass'n., No. 00-CV-0628, 2000 WL 516378, at *1 (N.D. Cal. Apr. 24, 2000) 18 (granting transfer and holding that related litigation pending in another forum weighs heavily in 19 favor of transfer). Under these circumstances, the private and public interests overwhelmingly 20 weigh in favor of transfer to avoid the needless duplication of litigation and waste of resources 21 while also promoting the convenience of witnesses. 22 23 24 25 26 27 28 DEFENDANT’S REPLY IN SUPPORT OF MOTION TO TRANSFER VENUE -7- 11 CV 0205 H CONCLUSION 1 2 For the reasons set forth above and in its opening memorandum, Ferrero respectfully 3 submits that this action can and should be transferred to the District of New Jersey under 28 4 U.S.C. Section 1404(a). 5 6 Dated: May 9, 2011 Respectfully submitted, WILSON SONSINI GOODRICH & ROSATI Professional Corporation 7 8 9 10 By: /s/ Dale R. Bish__________________ Dale R. Bish 11 Attorneys for Defendant Ferrero U.S.A., Inc. 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 DEFENDANT’S REPLY IN SUPPORT OF MOTION TO TRANSFER VENUE -8- 11 CV 0205 H