Hohenberg v. Ferrero USA, Inc
ORDER denying without prejudice Motion to Transfer. Signed by Judge Marilyn L. Huff on 5/11/2011. (ag) (jrl).
1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 SOUTHERN DISTRICT OF CALIFORNIA 10 11 In re FERRERO LITIGATION. CASE NO. 11-CV-205 H (CAB) ORDER DENYING WITHOUT PREJUDICE DEFENDANT’S MOTION TO TRANSFER 12 13 14 15 On March 24, 2011, Defendant Ferrero U.S.A., Inc. (“Ferrero”) filed a motion to 16 transfer this action to the District of New Jersey. (Doc. No. 19.) On May 2, 2011, Plaintiffs 17 filed a response in opposition to Defendant’s motion to transfer. (Doc. No. 33.) On May 9, 18 2011, Defendant filed a reply in support of its motion. (Doc. No. 36.) A hearing on the matter 19 is currently scheduled for May 16, 2011 at 10:30 a.m. The Court, pursuant to its discretion 20 under Local Rule 7.1(d)(1), determines this matter is appropriate for resolution without oral 21 argument, submits the motion on the parties’ papers, and vacates the hearing. For the 22 following reasons, the Court DENIES without prejudice Defendant’s motion to transfer. 23 Background 24 This is a consolidated consumer class action lawsuit brought on behalf of people who 25 have purchased Ferrero’s Nutella® spread after relying on allegedly deceptive and misleading 26 labeling. (Doc. No. 14, Cons. Compl.) Specifically, Plaintiffs allege that Ferrero misleadingly 27 promotes its Nutella® spread as healthy and beneficial to children when in fact it contains 28 dangerous levels of sugar. (Id. ¶ 99-102.) Based on these representations, Plaintiffs bring -1- 11cv205 1 causes of action alleging (1) violations of California’s Unfair Competition Law (“UCL”), Cal. 2 Bus. & Prof. Code §§ 17200 et seq.; (2) violations of California’s False Advertising Law, 3 (“FAL”), Cal. Bus. & Prof. Code §§ 17500 et seq.; (3) violations of California’s Consumer 4 Legal Remedies Act (“CLRA”), Cal. Civ. Code §§ 1770 et seq.; (4) breach of express 5 warranty; and (5) breach of implied warranty of merchantability. (Id.) Discussion 6 7 I. Motion to Transfer – Legal Standard 8 Under 28 U.S.C. § 1404, a district court “may transfer any civil action to any other 9 district or division where it might have been brought” “for the convenience of parties and 10 witnesses” and “in the interest of justice.” 28 U.S.C. § 1404(a).1 This statute “is intended to 11 place discretion in the district court to adjudicate motions for transfer according to an 12 ‘individualized, case-by-case consideration of convenience and fairness.’” Stewart Org., Inc. 13 v. Ricoh Corp., 487 U.S. 22, 29 (1988) (quoting Van Dusen v. Barrack, 376 U.S. 612, 622 14 (1964)). Similarly, the Ninth Circuit recognizes that the “[w]eighing of factors for and against 15 transfer involves subtle considerations and is best left to the discretion of the trial judge.” 16 Sparling v. Hoffman Constr. Co., Inc., 864 F.2d 635, 639 (9th Cir. 1988) (quotation marks 17 omitted). Defendant, as the moving party, carries the burden of showing that transfer is 18 warranted. Commodity Futures Trading Comm’n v. Savage, 611 F.2d 270, 279 (9th Cir. 19 1979). 20 In deciding whether to transfer a case under Section 1404(a), Ninth Circuit courts 21 employ a nonexclusive multi-factor test considering: (1) the plaintiff’s choice of forum, (2) 22 the contacts relating to the plaintiff’s cause of action in the chosen forum, (3) the respective 23 parties’ contacts with the forum, (4) the availability of compulsory process to compel 24 attendance of unwilling non-party witnesses, (5) the differences in the costs of litigation in the 25 two forums, (6) the ease of access to sources of proof, (7) the location where the relevant 26 agreements were negotiated and executed, and (8) the state that is most familiar with the 27 28 1 Plaintiffs do not dispute that this action could have been brought in the District of New Jersey. (Doc. No. 33 at 6 n.8.) -2- 11cv205 1 governing law. Jones v. GNC Franchising, Inc., 211 F.3d 495, 498-99 (9th Cir. 2000). 2 II. 3 4 5 6 Analysis of Relevant Factors To determine whether a transfer is appropriate in this action, the Court analyzes each of the Jones factors as they relate to the facts of this case. A. Plaintiff’s Choice of Forum and The Contacts Relating To Plaintiffs’ Cause of Action 7 Generally, a defendant “must make a strong showing of inconvenience to warrant 8 upsetting the plaintiff’s choice of forum.” Decker Coal Co. v. Commonwealth Edison Co., 805 9 F.2d 834, 843 (9th Cir. 1986). In class actions, however, a plaintiff’s choice of forum is often 10 accorded less weight. Lou v. Belzberg, 834 F.2d 730, 739 (9th Cir. 1986) (“Although great 11 weight is generally accorded plaintiff’s choice of forum . . . when an individual . . . represents 12 a class, the named plaintiff’s choice of forum is given less weight.”). Nonetheless, even in a 13 class action lawsuit, “[i]n judging the weight to be accorded [plaintiff’s] choice of forum, 14 consideration must be given to the extent of both [plaintiff’s] and the [defendant’s] contacts 15 with the forum, including those relating to [plaintiff’s] causes of action . . . .” Id. (internal 16 citations omitted). “In part, the reduced weight on plaintiff’s choice of forum in class actions 17 serves as a guard against the dangers of forum shopping, especially when a representative 18 plaintiff does not reside in the district.” Roling v. E*Trade Securities, LLC, 2010 U.S. Dist. 19 LEXIS 123714, at *9-10 (N.D. Cal. 2010). 20 Here, there is no evidence of forum shopping by the two representative plaintiffs. Both 21 plaintiffs reside in this district and purchased the product at issue in this district. (Doc. No. 33- 22 1, Declaration of Athena Hohenberg (“Hohenberg Decl.”) ¶¶ 2-5; Doc. No. 33-2, Declaration 23 of Laura Rude-Barbado (“Rude-Barbado Decl.”) ¶¶ 1-5.) A plaintiff’s choice of forum is 24 entitled to greater deference when the plaintiff has chosen its “home forum.” Piper Aircraft 25 Co. v. Reyno, 454 U.S. 235, 256 (1981). 26 Courts may also consider the facts of the case in determining how much deference to 27 give the plaintiff’s choice. See Pacific Car & Foundry Co. v. Pence, 403 F.2d 949, 954 (9th 28 Cir. 1968) (considering whether “the operative facts” “occurred within the forum of original -3- 11cv205 1 selection” and whether that forum had any “particular interest in the parties or the subject 2 matter”). The Ninth Circuit directs courts to consider the relationship between the forum and 3 the plaintiff’s claims when deciding whether to transfer a case under 28 U.S.C. § 1404. Jones, 4 211 F.3d at 498-99. The Ninth Circuit affirms transfers in cases where the district court finds 5 “no significant connection between [the forum] and the facts alleged in the complaint.” 6 Ventress v. Japan Airlines, 486 F.3d 1111, 1118 (9th Cir. 2007). 7 Defendant argues that the challenged conduct occurred in New Jersey because that is 8 where the misrepresentations or omissions were created, citing In re Yahoo!, 2008 U.S. Dist. 9 LEXIS 20605, at *8 (C.D. Cal. 2008) (stating that “defendants’ alleged misrepresentations and 10 omissions . . . are deemed to ‘occur’ in the district where they are transmitted or withheld, not 11 where they are received”). (Doc. No. 19-1 at 9.) However, Defendant’s reliance on Yahoo! 12 is “unavailing for three reasons.” Rafton v. Rydex Series Funds, 2010 U.S. Dist. LEXIS 13 75411, at *8 (N.D. Cal. 2010). First, in Yahoo!, the named Plaintiff was not a resident of the 14 district in which the case was filed. See Yahoo!, 2008 U.S. Dist. LEXIS 20605, at *8. 15 “Second, although Defendant[’s] alleged misrepresentations and omissions may have occurred 16 in the District of [New Jersey], Plaintiff[s’] reliance on those misrepresentations, and the 17 resulting harm, occurred here. Thus, not all of the ‘operative facts’ in this case took place in 18 [New Jersey].” Rafton, 2010 U.S. Dist. LEXIS 75411, at *9. Finally, “by choosing to market 19 and sell [its Nutella® product] nationwide, rather than just in the state of [New Jersey],” 20 Defendant exposed itself to the risk of being sued in the districts in which its product is sold. 21 Id. 22 Because some of the operative facts occurred in this district, and Plaintiffs reside in this 23 district and did not engage in forum shopping, the Court gives deference to Plaintiffs’ choice 24 of forum. See Roling, 2010 U.S. Dist. LEXIS 123714, at *9-10; Rafton, 2010 U.S. Dist. 25 LEXIS 75411, at *9. Accordingly, this factor weighs against transfer to the District of New 26 Jersey. 27 /// 28 /// -4- 11cv205 1 B. The Parties’ Contacts With the Forum 2 Both parties have substantial contacts with this district. The two representative 3 Plaintiffs both work and reside in this district. (Doc. No. 33-1, Hohenberg Decl. ¶¶ 1-2; Doc. 4 No. 33-2, Rude-Barbado Decl. ¶¶ 1-2.) Defendant sells the product at issue, Nutella®, 5 throughout California, and its California sales alone account for between 13% and 15.2% of 6 its total U.S. sales of Nutella® over the last five years. (Doc. No. 33 at 2; Doc. No. 33-3, 7 Declaration of Jack Fitzgerald (“Fitzgerald Decl.”) Ex. D.) From January 2007 to the present, 8 13.7% of Defendant’s Nutella® shipments went to California customers. (Doc. No. 33 at 3; 9 Doc. No. 33-3, Fitzgerald Decl. ¶¶ 7-8.) In addition, Ferrero employs a 15-person sales force 10 in California, (Doc. No. 19-2, Declaration of Bernard F. Kreilmann ¶ 4), and Ferrero works 11 with California venders and distributors in marketing its Nutella® product. (Doc. No. 33 at 12 4; Doc. No. 33-3, Fitzgerald Decl. Ex. B.) 13 Defendant argues that there is nothing unique about its contacts with California because 14 it sells Nutella® throughout the United States. (Doc. No. 36 at 2-4.) However, this argument 15 fails to recognize that this factor considers the parties’ contacts with the forum, not whether 16 those contacts are unique or whether the parties have contacts with other forums. See Jones, 17 211 F.3d at 498; see also Shultz v. Hyatt Vacation Mktg. Corp., 2011 U.S. Dist. LEXIS 24692, 18 at *13-16 (N.D. Cal. 2011). Based on the parties’ general contacts with the forum, it is 19 reasonable to assume that this forum is convenient. Accordingly, the Court concludes that this 20 factor weighs against transfer. 21 22 C. Convenience of Third Parties and Availability of Compulsory Process for Non-Party Witnesses 23 A party may compel the testimony of its employees at trial. STX, Inc. v. Trik Stik, Inc., 24 708 F. Supp. 1551, 1556 (N.D. Cal. 1988). For non-party witnesses, the Court’s subpoena 25 power extends to anywhere within the district and one hundred miles of the place of trial. Fed. 26 R. Civ. P. 45(b)(2). For these reasons, courts frequently state that the convenience of third 27 party witnesses is more important than that of party witnesses. See, e.g., HollyAnne Corp. v. 28 TFT, Inc., 199 F.3d 1304, 1307 n.2 (1999) (stating that the location of employees “is not as -5- 11cv205 1 important a factor as it would be if they were not under the [party’s] control”); Saleh v. Titan 2 Corp., 361 F. Supp. 2d 1152, 1160 (S.D. Cal. 2005) (“the convenience of non-party witnesses 3 is a more important factor than the convenience of party witnesses”). “In support of a motion 4 to transfer, a party must identify potential witnesses by name and describe their testimony.” 5 Clark v. Sprint Spectrum L.P., 2010 U.S. Dist. LEXIS 136510, at *11 (N.D. Cal. 2010) (citing 6 Saleh, 361 F. Supp. 2d at 1161-65); see also Bohara v. Backus Hosp. Med. Benefit Plan, 390 7 F. Supp. 2d 957, 963 (C.D. Cal. 2005). 8 In its motion, Defendant does not identify any specific potential witnesses, and only 9 states in a conclusory manner that “the key witnesses in this action are located in New Jersey 10 (or elsewhere on the east coast) while none (beside plaintiffs themselves) are located in 11 California.” (Doc. No. 19-1 at 9.) This sole conclusory statement does not satisfy Defendant’s 12 burden of showing that transfer is warranted based on this factor. See Clark, 2010 U.S. Dist. 13 LEXIS 136510, at *11; Saleh, 361 F. Supp. 2d at 1161-65. To the contrary, Plaintiffs have 14 identified at least three potential third party witnesses that are within the subpoena power of 15 this Court, four that are within the subpoena power of the District of New Jersey, and many 16 others that outside of the subpoena power of both courts. (Doc. No. 33 at 19; Doc. No. 33-3, 17 Fitzgerald Decl. Ex. J.) Accordingly, the Court concludes that this factor is at best neutral. 18 D. Cost of Litigation in Either Forum 19 Defendant argues that absent transfer to the District of New Jersey, it will 20 overwhelmingly bear the costs of litigation. (Doc. No. 36 at 4.) Similarly, Plaintiffs argue that 21 a transfer would disproportionally shift the costs of litigation to Plaintiffs. (Doc. No. 33 at 11- 22 13.) The primary costs that both parties rely on in making their arguments is travel costs for 23 party witnesses although both parties admit that party witnesses would not have to travel for 24 their depositions. (Doc. No. 33 at 11-17; Doc. No. 36 at 4-5.) Plaintiffs also note the added 25 costs of obtaining local counsel if the action was transferred due to the District of New Jersey’s 26 local rules. (Doc. No. 33 at 11-12.) 27 In deciding whether to transfer, the Court must be careful to avoid a transfer that “would 28 merely shift rather than eliminate” the inconvenience of costs. Decker Coal, 805 F.2d at 843. -6- 11cv205 1 In this case, transfer would decrease Defendant’s litigation costs, but it might increase 2 Plaintiffs’ costs to the same extent. In addition, “corporations are better-equipped than 3 individuals to absorb increased litigation costs.” Shultz, 2011 U.S. Dist. LEXIS 24692, at *17. 4 Accordingly, the Court concludes that this factor is neutral and does not weigh in favor of 5 transfer to the District of New Jersey. See Decker Coal, 805 F.2d at 843; Shultz, 2011 U.S. 6 Dist. LEXIS 24692, at *17-18. 7 E. 8 Neither party addressed this factor in their briefing. Accordingly, the Court concludes 9 Access to Sources of Proof that this factor is neutral and gives it little weight. 10 F. 11 The record before the Court does not indicate the existence of any agreement between 12 Location of Relevant Agreements the parties relevant to this litigation. Accordingly, this factor is neutral. 13 G. Familiarity With Governing Law 14 All five of Plaintiffs’ causes of actions are governed by California law. (See Doc. No. 15 14, Cons. Compl.) A California district court is more familiar with California law than district 16 courts in other states. See Getz v. Boeing Co., 547 F. Supp. 2d 1080, 1085 (N.D. Cal. 2008) 17 (“A court in the Northern District of California is more familiar with California law than a 18 court in the District of Arizona.”) Accordingly, the Court concludes that this factor weighs 19 against transfer. See id. 20 H. Other Factors (Feasability of Consolidation and Relative Court Congestion) 21 Defendant argues that the pendency of a substantially similar action in the District of 22 New Jersey weighs in favor of transfer. (Doc. No. 19-1 at 6-8.) “‘An important consideration 23 in determining whether the interests of justice dictate a transfer of venue is the pendency of a 24 related case in the transferee forum.’” Callaway Golf Co. v. Corp. Trade, Inc., 2010 U.S. Dist. 25 LEXIS 17906, at *19-20 (S.D. Cal. 2010). “The feasibility of consolidation is a significant 26 factor in a transfer decision, although even the pendency of an action in another district is 27 important because of the positive effects it might have in possible consolidation of discovery 28 and convenience to witnesses and parties.” A.J. Indus., Inc. v. U.S. Dist. Court for Cent. Dist. -7- 11cv205 1 of Cal., 503 F.2d 384, 386-87 (9th Cir. 1974) (citations omitted). “In addition . . . , centralizing 2 the adjudication of similar cases will also avoid the possibility of inconsistent judgments.” 3 Callaway Golf, 2010 U.S. Dist. LEXIS 17906, at *20. 4 In making its argument, Defendant fails to note that the New Jersey action could be 5 consolidated with this case. See Applied Elastromerics, Inc. v. Z-Man Fishing Prods., 2006 6 U.S. Dist. LEXIS 75339, at *17-18 (N.D. Cal. 2006). Also, Defendant fails to recognize that 7 the two complaints that were consolidated in this action were filed three weeks earlier than the 8 complaint in the New Jersey action. Compare Doc. No. 1 (filed Feb. 1, 2011); Rude-Barbato 9 v. Ferrero U.S.A., Inc., 11-cv-249-H (S.D. Cal., filed Feb. 4, 2011 [Doc. No. 1]) with Doc. 10 No. 20, Declaration of Dale R. Bish Ex. A (filed Feb. 27, 2011). “There is a generally 11 recognized doctrine of federal comity which permits a district court to decline jurisdiction over 12 an action when a complaint involving the same parties and issues has already been filed in 13 another district.” Pacesetter Systems, Inc. v. Medtronic, Inc., 678 F.2d 93, 94-95 (9th Cir. 14 1982). “This doctrine, known as the first-to-file rule, ‘gives priority, for purposes of choosing 15 among possible venues when parallel litigation has been instituted in separate courts, to the 16 party who first establishes jurisdiction.’” Callaway Golf, 2010 U.S. Dist. LEXIS 17906, at *6- 17 7. The earlier filing dates likely give the cases in this district priority over the case that was 18 filed in the District of New Jersey. See id. Accordingly, this factor weighs against transfer. 19 See Applied Elastromerics, 2006 U.S. Dist. LEXIS 75339, at *17-18. 20 As to relative court congestion, Plaintiffs argue that this district is less congested than 21 the District of New Jersey. (Doc. No. 33 at 24.) In support of this argument, Plaintiffs have 22 presented evidence that the District of New Jersey’s time to trial for civil cases is currently 23 40.6 months, whereas this district’s time to trial is 31.6 months. (Doc. No. 33-3, Fitgerald Dec. 24 Ex. K.) Also, the District of New Jersey has 414 civil filings per judgship, while this district 25 has 241 civil filings per judgship. (Id.) Accordingly, this factor weighs against transfer. See 26 Saleh, 361 F. Supp. 2d at 1167; see also Gates Learjet Corp. v. Jensen, 743 F.2d 1325, 1337 27 (9th Cir. 1984). 28 /// -8- 11cv205 Conclusion 1 2 The above analysis shows that all of the Jones factors are either neutral or weigh against 3 transfer. Accordingly, exercising its discretion, the Court concludes that transfer is not 4 warranted, and denies without prejudice Defendant’s motion to transfer this action to the 5 District of New Jersey. 6 IT IS SO ORDERED. 7 DATED: May 11, 2011 ________________________________ MARILYN L. HUFF, District Judge UNITED STATES DISTRICT COURT 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -9- 11cv205