Goldco Direct LLC v. Clackum et al

Filing 77

MEMORANDUM OPINION. Signed by Chief Judge Karon O Bowdre on 3/27/2019. (JLC)

FILED
2019 Mar-27 PM 12:28
U.S. DISTRICT COURT
N.D. OF ALABAMA

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ALABAMA
MIDDLE DIVISION
GOLDCO DIRECT, LLC,

)
)
Plaintiff,
)
)
v.
)
)
WARREN WILSON,
)
WHOLESALE GOLD SILVER IRA, INC., )
And WILD WEST COINS, INC.,
)
)
Defendants.
)

Case No. 4:18-CV-850-KOB

MEMORANDUM OPINION
This matter now comes before the court on Defendant Warren Wilson’s motion to
dismiss and motion to transfer. 1 (Docs. 55–58). For the reasons discussed below, in addition to
the reasons discussed on the record during the telephone conference held on March 7, 2019, the
court will DENY Mr. Wilson’s motion to dismiss and will DENY Mr. Wilson’s motion to
transfer.
I. Background
In three separate transactions between October 2016 and March 2018, Goldco Direct,
LLC sold investment products to Barbara Clackum, a resident of Gadsden, Alabama, for a total
price exceeding $400,000. Within 24 hours of her final purchase for $159,901.72, Ms. Clackum
sought to cancel the order and requested a full refund. Goldco refunded her most recent purchase
but did not agree to cancel or repurchase Ms. Clackum’s first or second order.

1

Mr. Wilson’s motion purported to make arguments on behalf of his co-defendants Wholesale Gold Silver IRA, Inc.
and Wild West Coins, Inc. Because (1) Mr. Wilson is not an attorney and thus cannot represent anyone but himself
and (2) business entities cannot appear pro se, the court previously struck Mr. Wilson’s motion as to the two
business entities. (See Doc. 59).

Goldco alleges that around this same time Ms. Clackum began working with Warren
Wilson, president of Goldco competitor Wholesale Gold Silver IRA, Inc. and founder of Wild
West Coins, Inc., and Keith Cope, an attorney licensed to practice law in California. Specifically,
Goldco alleges that Mr. Wilson adopted the alias “Bruce Clackum,” held himself out as the
nephew of Barbara Clackum, and actively induced former Goldco employees to violate their
nondisclosure agreements by providing him confidential Goldco customer information.
Goldco alleges Mr. Wilson used this confidential customer information to defame Goldco
by directly contacting Goldco’s customers and encouraging them to initiate lawsuits against
Goldco. Mr. Wilson also allegedly created the website www.goldcosucks.com to publish his
claims that Goldco violated Alabama law when it declined to refund a “$300,000 IRA
transaction” five days after the transaction date. The record indicates that Goldco’s customers
were contacted by someone with a “205” area code, and the domain name
www.goldcosucks.com was purchased using a credit card in the name of “B Clackum” with a
shipping and billing address at Ms. Clackum’s residence in Gadsden, Alabama. The website
encouraged Goldco customers to contact their state attorney general about Goldco’s actions and
indicated that “Bruce Clackum” had already contacted the Alabama Attorney General’s Office.
Goldco alleges it was then presented an ultimatum: refund Ms. Clackum her purchase
price or “Bruce Clackum” would send the website link to Goldco’s customers, which included a
forum in which they could complain about Goldco.
Goldco originally filed this lawsuit against Barbara Clackum and Bruce Clackum,
alleging conspiracy to commit RICO violations, violation of the Defend Trade Secrets Act,
violation of the California Uniform Trade Secrets Act, and four additional common law torts.
Goldco also requested injunctive relief and moved for a temporary restraining order to prohibit

Defendants’ further communication with any Goldco customers and further operation of the
website. This court granted the preliminary injunction and later granted Goldco’s request for a
permanent injunction.
After preliminary discovery to determine the actual identity of “Bruce Clackum,” Goldco
filed its first amended complaint, which removed Bruce Clackum as a defendant and added
Warren Wilson, Wholesale Gold, and Wild West Coins. (Doc. 50). Goldco then moved to
voluntarily dismiss Barbara Clackum, which this court granted, leaving only Mr. Wilson and his
two business entities as defendants. Mr. Wilson subsequently moved the court to either dismiss
him for lack of personal jurisdiction or to transfer the case to an appropriate jurisdiction in
California. The court ordered Goldco to show cause why it should not grant Mr. Wilson’s
motion, and Goldco timely filed its response. (Docs. 59 and 63). Two days before a status
conference in this case, Mr. Wilson filed a “Notice,” which at least in part attempted to argue
why dismissal or transfer is appropriate in this case. (Doc. 70). At the status conference, the
parties further discussed Mr. Wilson’s motion with this court. The parties have therefore fully
briefed this issue, and the motion is ripe for review.
II. Discussion
Defendant Warren Wilson moves to dismiss Goldco’s claims against him for lack of
personal jurisdiction pursuant to Federal Rule of Civil Procedure 12(b)(2). When a defendant
moves to dismiss for lack of personal jurisdiction, “the plaintiff bears the burden of establishing
a prima facie case of jurisdiction over the movant, non-resident defendant.” Morris v. SSE, Inc.,
843 F.2d 489, 492 (11th Cir. 1988) (internal citations omitted). Mr. Wilson alternatively moves
to transfer the case, presumably under 28 U.S.C. § 1404(a) and presumably to the United States
District Court of the Central District of California.

A. Motion to dismiss under Rule 12(b)(2)
“In analyzing a motion to dismiss for lack of personal jurisdiction under Fed. R. Civ. P.
12(b)(2), [the court must] first determine whether the applicable statute potentially confers
jurisdiction over the defendant, and then determine whether the exercise of jurisdiction comports
with due process.” Republic of Panama v. BCCI Holdings (Luxembourg) S.A., 119 F.3d 935, 942
(11th Cir. 1997) (citations omitted). Goldco’s amended complaint brings claims pursuant to the
RICO Act and asserts grounds for personal jurisdiction pursuant to RICO’s nationwide service of
process provision. The Eleventh Circuit has explicitly held that RICO’s nationwide service of
process provision can serve as the statutory basis for personal jurisdiction and that serving
process on a United States resident satisfies the statutory basis for personal jurisdiction over that
resident. Id. Mr. Warren is a United States resident, so the only remaining question is whether
exercising personal jurisdiction in this case comports with due process.
“[W]hen, as here, a federal statute provides the basis for jurisdiction, the constitutional
limits of due process derive from the Fifth, rather than the Fourteenth, Amendment.” BCCI
Holdings, 119 F.3d at 942 (citing In re Chase & Sanborn Corp., 835 F.2d 1341, 1344 (11th Cir.
1988)). “[T]o evaluate whether the Fifth Amendment requirements of fairness and
reasonableness have been satisfied, courts should balance the burdens imposed on the individual
defendant against the federal interest involved in the litigation. . . . As in other due process
inquiries, the balancing seeks to determine if the infringement on individual liberty has been
justified sufficiently by reference to important governmental interests.” Id., at 946.
But courts “must engage in this balancing only if a defendant has established that his
liberty interests actually have been infringed.” BCCI Holdings, 119 F.3d at 946 (emphasis added)
(citations omitted).

So Mr. Wilson first bears the burden of showing that the inconvenience of litigating the
case in the chosen forum rises to a level of constitutional concern, and “only in highly unusual
cases” will a defendant be able to show “constitutionally significant inconvenience.” BCCI
Holdings, 119 F.3d at 946–47. If Mr. Wilson meets his high burden, Goldco would then bear the
burden of showing that “the federal interest in litigating the dispute in the chosen forum
outweighs the burden imposed on the defendant.” Id., at 948.
The defendant shoulders the burden “to demonstrate that the assertion of jurisdiction in
the forum will ‘make litigation so gravely difficult and inconvenient that [he] unfairly is at a
severe disadvantage’ in comparison to his opponent.” BCCI, 119 F.3d at 948 (quoting Burger
King Corp. v. Rudzewicz, 471 U.S. 462, 478 (1985)).
In his brief supporting his motion to dismiss and his “notice” filed on March 5, 2019, Mr.
Wilson asserted that the inconvenience of litigating this case in Alabama will be constitutionally
significant because he resides in California and takes care of an adult son. (Doc. 70 at 1). Mr.
Wilson also references having a “handicapped granddaughter who will rely on [his] son as long
as they are alive” and a “daughter in law who was left crippled by life-saving brain surgery,” but
he does not specify if he personally takes care of them. (Id.). Mr. Wilson also argues that
litigating this matter in Alabama puts him at a disadvantage because “all of the lawyers that [he]
know[s] and trust[s] are not admitted to practice” here, and the Alabama lawyers he has
contacted “will not challenge Cooper Gayle [sic] because the firm is so powerful in Alabama.”
(Id.). By comparison, Mr. Wilson alleges that Goldco has “the resources to hire multiple law
firms in multiple states.” (Id.).
The court initially notes that “nothing [is] inherently burdensome about crossing a state
line.” BCCI Holdings, 119 F.3d at 947. And while Mr. Wilson’s responsibilities for his child,

grandchild, and daughter-in-law could make litigation in Alabama more onerous, he failed to
specifically explain how litigating this case in this forum will be so inconvenient as to rise to
constitutionally significant levels. Further, accepting Goldco’s allegations as true, Mr. Wilson
controlled the events giving rise to this action via contacts with Ms. Clackum, use of a phone
number with an Alabama area code, and threatening to contact the Alabama Attorney General’s
Office, so Mr. Wilson should not be surprised at being “haled into court” in this forum. Cf.
World-Wide Volkwagen Corp. v. Woodson, 444 U.S. 286, 297 (1980). Finally, the court notes
that the law firm representing Goldco in this case, Maynard Cooper & Gale, P.C., frequently
appears before this court, usually against a party represented by Alabama counsel; so based on its
personal knowledge, Alabama lawyers do frequently challenge Goldco’s chosen counsel.
So, while the court acknowledges that Plaintiff Goldco’s chosen forum presents certain
challenges for Defendant Mr. Wilson, he has failed to meet his initial burden of showing that
these challenges rise to constitutionally significant levels of inconvenience. Having determined
that Mr. Wilson failed to establish constitutionally significant inconvenience, the court concludes
it can exercise personal jurisdiction over him without violating his due process rights under the
Fifth Amendment.
B. Motion to transfer under § 1404(a)
Alternatively, Mr. Wilson moves this court to transfer the case, pursuant to 28 U.S.C.
§ 1404(a), presumably to the Central District of California, although his motion does not specify.
The statute provides as follows: “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.” 28 U.S.C. § 1404(a) (emphasis added). The moving party bears the
burden of demonstrating that the interests weigh strongly in favor of transfer. In re Ricoh Corp.,

870 F.2d 570, 573 (11th Cir. 1989); Bartronics, Inc. v. Power-One, Inc., 510 F. Supp. 2d 634,
637 (S.D. Ala. 2007).
Preliminarily, Goldco argues transfer would be improper because it could not have
originally brought this action in the Central District of California. (Doc. 63 at 16–18). A district
court cannot transfer a case to another district or division unless “the transferee district was one
in which the action ‘might have been brought’ by the plaintiff.” Hoffman v. Blaski, 363 U.S. 335,
343 (1960). Goldco argues that it could not have originally brought this action in the Central
District of California because 18 U.S.C. § 1965 provides that RICO claims “may be instituted in
the district court of the United States for any district in which [a defendant] resides, is found, has
an agent, or transacts his affairs.” The original complaint makes clear that Goldco believed that
the two named defendants, Barbara Clackum and “Bruce Clackum,” were residents of Alabama
and Georgia, respectively. (Doc. 1 at ¶¶ 3–4). So, Goldco argues, it could not have originally
brought the action in the Central District of California.
But RICO’s venue provision is not necessarily exclusive:
There is no binding Eleventh Circuit precedent addressing whether the
RICO venue provision is exclusive. However, several courts have concluded that
both the RICO provision and § 1391 apply where a RICO claim is at issue. . . .
That conclusion is consistent with the permissive wording of § 1965(a) (which
states that an action “may be instituted” in the identified fora) as well as its
legislative history, which indicates Congress’s intent to provide a liberal venue
standard modeled on the venue provisions of the antitrust laws. . . . With respect
to antitrust actions, the Eleventh Circuit has concluded that the antitrust venue
provisions supplement rather than supplant the general venue provisions
in § 1391.
Riley v. Donatelli, No. 3:16-cv-898-J-34JBT, 2017 WL 3316479, at *8 n. 11 (M.D. Fla. Aug. 3,
2017) (citations omitted). In fact, Goldco’s original complaint argues that venue was proper in
the Northern District of Alabama pursuant to 28 U.S.C. § 1391(b)—not 18 U.S.C. § 1965. (See
Doc. 1 at ¶ 9).

But this court does not need to decide whether RICO’s venue provision supplements or
supplants § 1391 in this case. Even assuming Goldco could have originally brought this case in
the Central District of California, Mr. Wilson has not met his burden of showing the interests of
justice weigh strongly in favor of transfer.
“Section 1404 factors include (1) the convenience of the witnesses; (2) the location of
relevant documents and the relative ease of access to sources of proof; (3) the convenience of the
parties; (4) the locus of operative facts; (5) the availability of process to compel the attendance of
unwilling witnesses; (6) the relative means of the parties; (7) a forum's familiarity with the
governing law; (8) the weight accorded a plaintiff's choice of forum; and (9) trial efficiency and
the interests of justice, based on the totality of the circumstances.” Manuel v. Convergys Corp.,
430 F.3d 1132, 1135 n. 1 (11th Cir. 2005) (citing Gibbs & Hill, Inc. v. Harbert Int’l, Inc., 745 F.
Supp. 993, 996 (S.D.N.Y. 1990)).
The first and fifth factors—convenience of the witnesses and availability of process—
weigh against transfer, as the chief nonparty witness in this case, Barbara Clackum, resides in the
Northern District of Alabama. Ms. Clackum is seventy-nine years old and cares for her mentally
handicapped daughter, making the Central District of California an inconvenient forum for her.
And Ms. Clackum resides more than 100 miles away from the Central District of California,
placing her beyond its nonparty witness subpoena power. See Fed. R. Civ. P. 45(c)(1)(A).
The fourth factor—locus of operative facts—also weighs against transfer, as the central
facts occurred in Alabama. Ms. Clackum transacted with Goldco while residing in Alabama, the
first in a chain of incidents that ultimately gave rise to this case. Mr. Wilson allegedly
impersonated an Alabama native, used a phone number with an Alabama area code, and claimed
to have called the Alabama Attorney General’s Office. Goldco also alleges that Mr. Wilson’s

actions caused the greatest reputational injury in Alabama because Mr. Wilson specifically
accused Goldco of violating Alabama law to defraud an elderly Alabama resident.
Finally, the eighth factor—plaintiff’s choice of venue—weighs against transfer because
Goldco selected the Northern District of Alabama by filing its lawsuit here. Even after learning
the supposed identity of “Bruce Clackum” to be a resident of California, Goldco maintains that
the Northern District of Alabama is its preferred venue. This court must give Goldco’s
preference proper weight.
While factors two and three—location of relevant documents and convenience of
parties—weigh in favor of transfer, other courts have discounted the value of these factors. For
example, the Southern District of Florida has held that “producing documents and other files for
litigation . . . is not usually a burdensome ordeal due to technological advancements, such as
electronic document-imaging and retrieval.” Game Controller Tech., LLC v. Sony Computer
Entm’t Am., LLC, 994 F. Supp. 2d 1268, 1274 (S.D. Fla. 2014) (internal quotation marks and
alterations omitted). And the Middle District of Alabama has noted that the “convenience of nonparty witnesses receives considerably more weight than the convenience of parties or partywitnesses.” ASD Specialty Healthcare, Inc. v. Letzer, No. 2:10-CV-388-WKW, 2010 WL
2952573, at *4 (M.D. Ala. July 26, 2010).
The court acknowledges that a California district court likely has more familiarity with
the law governing some of Goldco’s claims. But Mr. Wilson’s allegedly weaponizing Alabama
law to extort Goldco comprises an important part of Goldco’s claims, so this court’s familiarity
with Alabama law could prove similarly useful.

This court lastly notes that the parties have presented no evidence regarding their relative
means, nor any argument that a trial in the Central District of California would be more
efficient. 2
With the above factors in mind, and affording proper weight to Goldco’s decision to file
this lawsuit in this forum, the court will DENY Mr. Wilson’s motion to transfer this case to the
Central District of California, or any other court in California.
III. Conclusion
For the reasons stated above, the court will DENY Mr. Wilson’s motion to dismiss and
will DENY Mr. Wilson’s alternative motion to transfer.
DONE and ORDERED this 27th day of March, 2019.

____________________________________
KARON OWEN BOWDRE
CHIEF UNITED STATES DISTRICT JUDGE

2

But the court points out that the September 2018 Civil Justice Reform Act Report indicated, as of September 30,
2018, the Central District of California had 295 cases pending longer than three years and 216 motions pending
longer than six months, while the Northern District of Alabama had 124 cases pending longer than three years and
82 motions pending longer than six months. U.S. Courts, Civil Justice Reform Act Report Summary, app. A, at 57,
72 (Sept. 30, 2018), https://www.uscourts.gov/sites/default/files/cjra_na_0930.2018_1.pdf.