Securities and Exchange Commission v. Bobby Jones et al

Filing 25

ORDER DENYING MOTIONS FOR CHANGE OF VENUE 14 , 16 , 17 , 18 , 19 , 20 by Judge Dean D. Pregerson. (lc). Modified on 12/13/2013 (lc).

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UNITED STATES DISTRICT COURT

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CENTRAL DISTRICT OF CALIFORNIA

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IN THE MATTER OF AN
APPLICATION TO ENFORCE
ADMINISTRATIVE SUBPOENAS OF
THE SECURITIES AND EXCHANGE
COMMISSION,

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Petitioner,

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v.
BOBBY JONES, RAYMON
CHADWICK, TERRY JOHNSON,
INNOVATIVE GROUP, REDWATER
FUNDING GROUP, LLC and
EXPECTRUM, LLC,

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Respondents.

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___________________________

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Case No. CV 13-08314 DDP (Ex)
ORDER DENYING MOTIONS FOR CHANGE
OF VENUE
[DKT Nos. 14, 16, 17, 18, 19, 20]

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Before the court are motions for change of venue filed by

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Respondents Bobby Jones, Raymon Chadwick, Terry Johnson, Innovative

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Group, Redwater Funding Group, LLC, and Expectrum, LLC. The motions

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are briefed and suitable for adjudication without oral argument.

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Having considered the parties’ submissions, the court now adopts

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the following order.

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I.

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BACKGROUND
On November 8, 2013, the Securities and Exchange Commission

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(SEC) applied for an order compelling compliance by Respondents

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with administrative subpoenas served on Respondents on August 26,

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2013. (DKT No. 1.) The court will address this application in a

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separate order.

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During November 22 through 27, Respondents filed pro se

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motions for change of venue to the United States District Court for

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the Northern District of Texas. (DKT Nos. 14, 16-20.) With the

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exception of the Respondents’ names, each of the six motions

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contain identical text.

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The only relevant fact alleged by Respondent is that “the

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majority of defendant’s/parties reside in the Northern District of

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Texas.” (Mots. at 2.) Five of the six Respondents list addresses in

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various Texas cities in their moving papers, (DKT Nos. 16-20),

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while the sixth, Bobby Jones, lists an address in Phoenix, Arizona

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(DKT No. 14).

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II.

LEGAL STANDARD
28 U.S.C. § 1404(a) provides that "[f]or the convenience of

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parties and witnesses, in the interest of justice, a district court

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may transfer any civil action to any other district or division

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where it might have been brought."

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change of venue, the court must consider, as a threshold matter, if

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venue in the requested district would have been proper.

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Court must then balance the convenience of the parties, the

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convenience of the witnesses, and the interests of justice.

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In considering a motion for a

If so, the

E. &

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J. Gallo Winery v. F. & P. S.p.A. , 899 F. Supp. 465, 466 (E.D.

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Cal. 1994).

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The moving party bears the burden of showing the balance of

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inconveniences to it.

E. & J. Gallo Winery, 899 F. Supp. at 466.

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“The defendant must make a strong showing of inconvenience to

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warrant upsetting the plaintiff's choice of forum.” Decker Coal Co.

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v. Commonwealth Edison Co., 805 F.2d 834, 843 (9th Cir. 1986).

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III. DISCUSSION
The Court first considers whether this suit could have been

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brought in the district to which Respondents seek to transfer this

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action. Venue in a federal question case such as this one is

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governed by 28 U.S.C. § 1391(b). Subsection (b) provides that venue

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is proper only in a judicial district: (1) where any defendant

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resides; (2) where a substantial part of the events or omissions

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giving rise to the claim occurred; or (3) where any defendant may

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be found, if there is no district in which the action may otherwise

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be brought. See 28 U.S.C. § 1391(b)(1)-(3).

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Respondents assert, in conclusory fashion, that this action

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could have been brought in the Northern District of Texas. (Mots.

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at 2.) The SEC does not appear to contest this assertion. The court

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does not have the facts before it necessary to reach a finding on

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this question. Nevertheless, because it will not affect the outcome

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of its analysis, the court assumes for the purposes of this motion

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that the action could have been brought in the Northern District of

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Texas.

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The Court is next tasked with determining whether Respondents
have demonstrated that the transfer is warranted. The first
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consideration under § 1404(a) is convenience to the parties and

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witnesses. The SEC asserts, and the court agrees, that such

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convenience factors carry little weight in the context of a summary

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enforcement proceeding such as the present one. (Opp. at 3.) As the

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SEC notes, federal securities laws authorize the SEC to seek to

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enforce its administrative subpoenas in streamlined enforcement

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proceedings. See SEC v. McCarthy, 322 F.3d 650, 655-59 (9th Cir.

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2003) (explaining that the Exchange Act authorizes summary

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proceedings to enforce SEC subpoenas).1 Unlike civil lawsuits,

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summary enforcement proceedings do not typically involve discovery,

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testimony from parties or witnesses, or the presentation of

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evidence.

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1072, 1078 (D.D.C. 1978) (“A proceeding to enforce a subpoena or a

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special order is summary in nature, and except in the most

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extraordinary circumstances, discovery and testimony are not

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allowed.”). As a result, the inconvenience to parties and witnesses

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associated with litigation, as may be considered under § 1404(a),

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is largely eliminated. See, e.g., FTC v. Carter, 464 F. Supp. 633,

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637 (D.D.C. 1979 (“in summary proceedings such as this testimony

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from parties or witnesses is rarely necessary,” thereby

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“eliminat[ing] a significant convenience factor involved in the §

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1404(a) determinations”). In the case at bar, Respondents have made

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no attempt to explain how the minimal burdens placed on them by

See U.S. v. Firestone Tire & Rubber Co., 455 F. Supp.

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McCarthy also explained that “summary proceedings may be
‘conducted without formal pleadings, on short notice, without
summons and complaints, generally on affidavits, and sometimes even
ex parte.’” McCarthy, 322 F.3d at 655 (9th Cir. 2003) (quoting
New Hampshire Fire Ins. Co. v. Scanlon, 362 U.S. 404, 406 (1960)).

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this summary enforcement proceeding constitutes undue inconvenience

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so as to justify a transfer of venue.

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Nor have Respondents explained how the interests of justice

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are in any way served by a change in venue to the Northern District

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of Texas. Respondents merely assert, with no explanation, that a

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change in venue would serve the interests of justice. (Mots. at 3.)

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In sum, the court finds that Respondents have failed to meet

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their burden of demonstrating why Plaintiff’s choice of venue

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should be disturbed.

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III. CONCLUSION
For the foregoing reasons, the Court DENIES Respondent’s
motion to transfer.

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IT IS SO ORDERED.

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Dated: December 13, 2013
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DEAN D. PREGERSON
United States District Judge

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