ASD Specialty Healthcare, Inc. v. Jeffrey P. Letzer, D.O., PLC
MEMORANDUM OPINION AND ORDER that 7 DENIED. Signed by Honorable William Keith Watkins on 7/26/2010. (cb, )
ASD Specialty Healthcare, Inc. v. Jeffrey P. Letzer, D.O., PLC
IN THE UNITED STATES DISTRICT COURT F O R THE MIDDLE DISTRICT OF ALABAMA N O R T H E R N DIVISION A S D SPECIALTY HEALTHCARE, INC., ) d /b /a ONCOLOGY SUPPLY, ) ) P la in tif f , ) ) v. ) ) J E F F R E Y P. LETZER, D.O., PLC, d/b/a ) K A L A M A Z O O HEMATOLOGY & ) ONCOLOGY, ) ) D e f e n d a n t. )
C A S E NO. 2:10-CV-388-WKW [WO]
M E M O R A N D U M OPINION AND ORDER T h is cause is before the court on Defendant Jeffrey P. Letzer, D.O., PLC d/b/a K a la m a z o o Hematology & Oncology's ("KHO") Motion to Dismiss on forum non c o n v e n ie n s grounds. (Doc. # 7.) Upon careful consideration of counsel's arguments, the re le v a n t law, and the record as a whole, the court finds that the motion is due to be denied. I. JURISDICTION AND VENUE S u b je c t matter jurisdiction is exercised pursuant to 28 U.S.C. § 1332. The parties do n o t contest personal jurisdiction or venue (in this district), and the court finds adequate a lle g a tio n s in support of both. I I . FACTUAL BACKGROUND P la in tif f ASD Specialty Healthcare, Inc., d/b/a Oncology Supply ("OS") brings this d iv e rsity action against KHO for breach of contract and unjust enrichment, alleging that
KHO failed to remit payment for certain pharmaceutical products provided by OS to KHO. The record establishes the following facts. A S D Speciality Healthcare ("ASD") is a California corporation with its principal p la c e of business in Texas. (Compl. ¶ 1 (Doc. # 1).) ASD operates under various trade n a m e s , including OS, which maintains a place of business in Dothan, Alabama. (Compl. ¶ 1 .) OS supplies medical and pharmaceutical products to cancer treatment centers. (Compl. ¶ 6.) Defendant KHO is a Michigan company that operates a cancer treatment facility in K a la m a z o o , Michigan. (Compl. ¶¶ 2, 7.) On March 27, 2009, KHO and a sales representative of OS, John Johns, met at KHO's c lin ic in Kalamazoo, Michigan, to discuss the purchase of pharmaceutical products. (Compl. ¶ ¶ 8-9; Letzer Aff. ¶ 4 (Doc. # 8, Ex. 1).) Also present at the meeting were Dr. Letzer, the s o le owner of KHO, and Ambrose Garcia, a representative of Oncology Physician Resources, P L L C ("OPR"). (Letzer Aff. ¶¶ 3-4.) OPR negotiates on behalf of its members to secure f a v o ra b le pricing for medical supplies. (Letzer Aff. ¶ 3.) Dr. Letzer is a member of OPR. (Letzer Aff. ¶ 3.) During this meeting (or shortly thereafter), Dr. Letzer signed the agreement titled, " A p p lic a tio n for New Account" that serves as the basis for this lawsuit. (Compl. ¶ 9; L e tz e r Aff. ¶¶ 4, 6.) The agreement establishes a credit account on behalf of KHO, under w h ic h OS would ship pharmaceutical supplies to KHO for future payment. (Doc. # 8, Ex. 2 ).) The agreement contains the following forum selection clause:
Governing Law: This Agreement shall be construed and enforced in a c c o rd a n c e with the laws of the State of Alabama, without reference to its p rin c ip le s of conflict of laws. Each of the parties agrees that legal or equitable a c tio n between the parties shall be brought, and each of the parties irrevocably c o n s e n ts to personal jurisdiction, in the United States District Court for the M id d le District of Alabama, Montgomery Division, or if such court does not h a v e jurisdiction or will not accept jurisdiction, in any court of general ju ris d ic tio n in Houston County, Alabama, and waives any objection it may h a v e to the laying of venue of any such action in such court. (Doc. # 8, Ex. 2.) KHO ordered medical and pharmaceutical supplies from OS pursuant to this a g re e m e n t, and OS shipped said supplies to KHO on credit. OS contends that there remains a n outstanding balance of $287,974.86, plus interest, attorneys' fees, and costs, which KHO h a s failed to pay. (Compl. ¶ 15.) III. DISCUSSION R a th e r than seek transfer pursuant to 28 U.S.C. §§ 1404 or 1406, KHO brings this m o tio n to dismiss under the common law doctrine of forum non conveniens. (See Docs. # 7 , 8.) At the outset, it is important to distinguish between a motion to dismiss under this d o c trin e and a motion to transfer venue pursuant to 28 U.S.C. § 1404(a), as the latter has la rg e ly superseded the former. (1 9 9 4 ). Prior to the enactment of § 1404(a) in 1948, the common law doctrine of forum non c o n v e n ie n s1 provided the only mechanism under which courts could transfer venue for "the
See Am. Dredging Co. v. Miller, 510 U.S. 443, 449 n.2
Pursuant to the doctrine of forum non conveniens, "`when an alternative forum has jurisdiction to hear a case, and when trial in the chosen forum would establish oppressiveness and vexation to a
convenience of the parties and witnesses." See Howe v. Goldcorp Inv., Ltd, 946 F.2d 944, 9 4 7 (1st Cir. 1991). Thus, courts used this doctrine to transfer cases between districts in the U n ite d States. Id.; see also Gulf Oil Corp. v. Gilbert, 330 U.S. 501 (1947) (applying the c o m m o n law doctrine of forum non conveniens to effect transfer from New York to V irg in ia ). Since 1948, federal courts have relied on their statutory authority under § 1404(a) to transfer cases between domestic forums. Howe, 946 F.2d at 947. Thus, subsequent to the e n a c tm e n t of § 1404(a), the doctrine of forum non conveniens applies only where there is no p ro p e r federal forum to which the case can be transferred, and where the more convenient f o ru m is in a foreign country. See Am. Dredging Co., 510 U.S. at 449 n.2 ("[T]he federal d o c trin e of forum non conveniens has continuing application only in cases where the a lte rn a tiv e forum is abroad."). B e c a u s e KHO seeks transfer to the Western District of Michigan, and not to a foreign c o u n try, a motion to dismiss pursuant to the doctrine forum non conveniens is not the proper a v e n u e for relief. KHO does not contend that venue in this district is improper (thus f o re g o in g transfer under § 1406), and its only mention of § 1404(a) appears in the first and la s t sentences of its reply brief. The court will not consider arguments raised for the first tim e in a reply brief, and KHO's motion is due to be denied on this basis. However, as
defendant out of all proportion to plaintiff's convenience, or when the chosen forum is inappropriate because of considerations affecting the court's own administrative and legal problems, the court may, in the exercise of its sound discretion, dismiss the case.'" Wilson v. Island Seas Inv., Ltd, 590 F.3d 1264, 1269 (11th Cir. 2009) (quoting Am. Dredging Co., 510 U.S. at 447-48).
discussed below, even if KHO had properly invoked § 1404(a), the motion would n o n e th e le ss be denied. P u rs u a n t to § 1404(a), a district court may transfer a civil action to any other district in which it might have been brought "[f]or the convenience of the parties and witnesses," and " in the interest of justice." Because federal courts usually accord deference to a plaintiff's c h o ic e of forum, the burden is on the movant to show that the suggested forum is more c o n v e n ie n t or that litigation there would be in the interest of justice. In re Ricoh Corp., 870 F .2 d 570, 573 (11th Cir. 1989). Ultimately, a district court has "broad discretion in weighing t h e conflicting arguments as to venue," England v. ITT Thompson Indus., Inc., 856 F.2d 1 5 1 8 , 1520 (11th Cir. 1988), and must engage in an "individualized, case-by-case c o n s id e ra tio n of convenience and fairness," Stewart Org., Inc. v. Ricoh Corp., 487 U.S. 22, 2 9 (1988) (internal quotation marks omitted). S ectio n 1404(a) mandates a two-step analysis. First, the court must determine whether th e case originally could have been brought in the proposed transferee district. § 1404(a); C .M .B . Foods, Inc. v. Corral of Middle Ga., 396 F. Supp. 2d 1283, 1286 (M.D. Ala. 2005). Second, the court must analyze whether, "[f]or the convenience of the parties and witnesses" a n d "in the interest of justice," the action should be transferred. § 1404(a); see also Corral o f Middle Ga., 396 F. Supp. 2d at 1286. In determining whether `[f]or the convenience of th e parties and witnesses" and "in the interest of justice" the case should be transferred under § 1404(a), the court considers the following factors:
(1) the convenience of the witnesses; (2) the location of relevant documents a n d the relative ease of access to sources of proof; (3) the convenience of the p a rtie s ; (4) the locus of operative facts; (5) the availability of process to c o m p e l the attendance of unwilling witnesses; (6) the relative means of the p a r t i e s ; (7) a forum's familiarity with the governing law; (8) the weight a c c o rd e d a plaintiff's choice of forum; and (9) trial efficiency and the interests o f justice, based on the totality of the circumstances. Manuel v. Convergys Corp., 430 F.3d 1132, 1135 n.1 (11th Cir. 2005). The parties present their respective positions in the context of a forum non conveniens m o tio n ; however, because § 1404(a) essentially codified the common law doctrine of forum n o n conveniens, the statute employs similar factors and requires a similar analysis. Thus, the p a rtie s ' arguments with respect to forum non conveniens are relevant in the § 1404(a) c o n te x t. The main area of contention is the relative weight that should be afforded the forum s e le c tio n clause. KHO advocates for a lesser role, contending that the forum selection clause s h o u ld be given equal consideration with the other convenience factors. (See Def.'s Br. in S u p p . of Mot. to Dismiss 6 (Doc. # 8); Def.'s Reply Br. 1 (Doc. # 13).) OS, on the other h a n d , contends that the Supreme Court's admiralty decision in M/S Bremen v. Zapata OffS h o r e Co., 407 U.S. 1, 10 (1972) holding that a forum selection clause "should be enforced u n le s s enforcement is shown by the resisting party to be `unreasonable' under the c irc u m s ta n c e s " is controlling in this case and provides the applicable standard. As d is c u s se d below, each party overstates its position.
In Stewart Organization, Inc., decided after Bremen, the Supreme Court held that a f o ru m selection clause is but one albeit significant factor in the normal § 1404(a) a n a lys is . 487 U.S. at 31 ("The forum-selection clause, which represents the parties' a g re e m e n t as to the most proper forum, should receive neither dispositive consideration . . . n o r no consideration . . . , but rather the consideration for which Congress provided in § 1 4 0 4 (a )." ). The Eleventh Circuit embracing Justice Kennedy's concurring opinion in S te w a r t Organization, Inc. has given even more import to such clauses. It held in In re R ic o h Corp. that "venue mandated by a choice of forum clause rarely will be outweighed by o th e r 1404(a) factors." 870 F.2d at 573 & n.6. Thus, while a valid 2 forum selection clause it not dispositive of a § 1404(a) motion to transfer venue, the movant carries a considerably h e a v ie r burden in seeking transfer outside of the district mandated by such a clause. Applying the factors, and giving due weight to the forum selection clause, the court f in d s that transfer is not warranted in this case. The only § 1404(a) factors addressed by K H O that arguably weigh in KHO's favor include (1) the convenience of the witnesses s p e c if ic a lly, Mr. Johns, who resides in Indiana, and KHO's employees, who presumably w o rk and live in Michigan; and (2) the convenience of Dr. Letzer who lives and works in K a la m a z o o , Michigan. However, because Mr. Johns resides in Indiana, he would have to tra v e l in either scenario (Alabama or Michigan). As to the KHO employees, KHO does not in d ic a te who these individuals are, whether they would be called as witnesses, and if so, for
KHO does not contest the validity of the forum selection clause.
what purpose(s). In other words, KHO fails to indicate the materiality of these witnesses a n essential aspect of the convenience analysis. Thus, it seems that KHO's sole reason for s e e k in g transfer in this case is the inconvenience that would confront Dr. Letzer if he had to tra v e l to Alabama for trial and/or discovery purposes. The court is not unsympathetic to the needs of Dr. Letzer and his patients; however, a s OS points out, the realities of modern litigation allow for remote discovery and c o m m u n ic a tio n . There is no indication that Dr. Letzer does not have the means to travel or th a t he would be required to travel more than two days at a time. Furthermore, there is no in d ic a tio n that OS would not be amenable to working around Dr. Letzer's schedule if need b e . The case upon which KHO relies for the proposition that the unavailability of doctors i s "problematic" Feinstein v. Curtain Bluff Resort, No. 96 Civ. 8860, 1998 WL 458060, a t *5 (S.D.N.Y. Aug. 5, 1998) is distinguishable from the case at hand, as the doctors in F e in s te in were non-party witnesses. The convenience of non-party witnesses receives c o n s id e ra b ly more weight than the convenience of parties or party-witnesses. See Gould v. N a t'l Life Ins. Co., 990 F. Supp. 1354, 1359 (M.D. Ala. 1998) (noting that "[t]he c o n v e n ie n c e of the [non-party] witnesses is often said to be the `most important factor' in d e c id in g whether to transfer"). In sum, the potential inconvenience confronting Dr. Letzer does not satisfy KHO's b u r d e n in this case. Notably, the parties do not dispute that Alabama law applies. Most im p o rta n t, however, is the fact that Dr. Letzer, acting on behalf of KHO, freely agreed to the
forum selection clause at issue and, thus, freely agreed to venue in this district. (See Def.'s B r. in Supp. of Mot. to Dismiss 6 ("[T]he forum-selection clause facially indicates a meeting o f the minds . . . that the . . . Middle District of Alabama is the proper forum.").) Accordingly, even if KHO had brought a motion to transfer under § 1404(a), its motion w o u ld be denied. I V . CONCLUSION F o r the foregoing reasons, it is ORDERED that Defendant's Motion to Dismiss (Doc. # 7) is DENIED. DONE this 26th day of July, 2010.
/s/ W. Keith Watkins UNITED STATES DISTRICT JUDGE
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