Heartland Payment Systems, Inc. v. Mercury Payments Systems LLC

Filing 62

ORDER by Judge Claudia Wilken DENYING 19 MOTION TO TRANSFER. (ndr, COURT STAFF) (Filed on 11/4/2014)

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IN THE UNITED STATES DISTRICT COURT

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FOR THE NORTHERN DISTRICT OF CALIFORNIA

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HEARTLAND PAYMENT SYSTEMS, INC.,

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No. C 14-0437 CW

Plaintiff,

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ORDER DENYING
MOTION TO TRANSFER

v.

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(Docket No. 19)

MERCURY PAYMENT SYSTEMS, LLC,
Defendant.

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________________________________/

United States District Court
For the Northern District of California

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Plaintiff Heartland Payment Systems (Heartland) asserts

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various unfair business practice claims against Defendant Mercury

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Payment Systems (Mercury).

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the District of Colorado under 28 U.S.C. § 1404(a) (Docket No.

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19).

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DENIES the motion to transfer.

Heartland opposes.

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Mercury moves to transfer the case to

Having considered the papers, the Court

BACKGROUND
On January 29, 2014, Heartland, a New Jersey-based company

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incorporated in Delaware, filed a complaint against Mercury, a

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Colorado-based company incorporated in Delaware, alleging various

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unfair business practices claims.

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the Northern District of California.

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The complaint was brought in

Both parties are payment processors who provide businesses,

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known as merchants, point-of-sale (POS) systems.

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POS systems enable merchants to accept credit cards and debit

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cards.

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brands are able to receive their fees, merchants are able to

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Id. at ¶ 9.

Compl. ¶ 11.

Through POS systems, banks and credit card

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receive the proceeds from the sale, and consumers have their

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accounts charged.

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Id.

The complaint alleges that Mercury engages in unfair business
practices in violation of federal and California law.

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companies use, although not exclusively, an “interchange-plus

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pricing model.”

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card brands charge a fee, typically as a percentage of the

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transaction plus a per-transaction fee.

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providers then charge an additional fee to the merchants as the

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United States District Court
For the Northern District of California

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cost for being the intermediary between the banks, credit card

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brands and the merchants.

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is charged by the banks and credit card brands, and is not

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controlled by the POS systems providers.

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controlled by the POS system providers.

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Id.

Both

According to this model, banks and credit

Id.

Id. at ¶ 16.

POS systems

The interchange fee is that which

Id.

The “plus” fee is

Id.

Heartland alleges that Mercury deceptively inflates the

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interchange fee when presenting its pricing and billing to

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merchants and prospective merchants.

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an increase in the “plus” fee, Heartland alleges that Mercury

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instead represents that any increase in the interchange-plus fee

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is due to the banks and credit card brands increasing the

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interchange fee.

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Id.

Rather than disclosing

Id.

Heartland’s claims center on how Mercury prices and bills its

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services to merchants, as well as how it advertises its services.

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Id. at ¶¶ 18-38.

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Mercury: (1) false advertising in violation of 15 U.S.C.

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§ 1125(a)(1)(B) (Lanham Act); (2) unfair competition in violation

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of California’s Unfair Competition Law, Business and Professions

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Code section 17000 et seq. (UCL); (3) false advertising in

Heartland asserts five causes of action against

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violation of California Business and Professions Code section

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17500 et seq.; (4) intentional interference with contractual

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relations; and (5) intentional interference with prospective

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economic advantage.
LEGAL STANDARD

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“For the convenience of parties and witnesses, in the

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interest of justice, a district court may transfer any civil

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action to any other district or division where it might have been

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brought or to any district or division to which all parties have

United States District Court
For the Northern District of California

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consented.”

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court has discretion to adjudicate motions for transfer according

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to an individualized, case-by-case consideration of convenience

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and fairness.

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the court to weigh multiple factors in its determination whether

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transfer is appropriate in a particular case.”

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Franchising, Inc., 211 F.3d 495, 498 (9th Cir. 2000).

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a motion for transfer, the moving party must establish: (1) that

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venue is proper in the transferor district; (2) that the

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transferee district is one where the action might have been

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brought; and (3) that the transfer will serve the convenience of

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the parties and witnesses and will promote the interest of

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justice.”

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WL 5568345, at *2 (N.D. Cal.) (citations omitted).

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28 U.S.C. § 1404(a).

“Under § 1404(a), the district

A motion to transfer venue under § 1404(a) requires

Jones v. GNC
“To support

Reflex Packaging, Inc. v. Audio Video Color Corp., 2013

The Ninth Circuit considers the following factors to

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determine whether to transfer venue: “(1) plaintiff's choice of

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forum, (2) convenience of the parties, (3) convenience of the

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witnesses, (4) ease of access to the evidence, (5) familiarity of

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each forum with the applicable law, (6) feasibility of
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consolidation with other claims, (7) any local interest in the

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controversy, and (8) the relative court congestion and time of

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trial in each forum.”

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“The burden is on the defendant to show that, of the relevant

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factors, the balance of convenience weighs in favor of transfer to

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another district.”

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Corp., 2010 WL 3619565, at *2 (N.D. Cal.) (citing Commodity

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Futures Trading Comm’n v. Savage, 611 F.2d 270, 279 (9th Cir.

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1979)).

Id. (citing Jones, 211 F.3d at 498-99.)

TransPerfect Global, Inc. v. Motionpoint

United States District Court
For the Northern District of California

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ANALYSIS

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Mercury argues that the District of Colorado is a proper

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venue, that convenience factors overwhelmingly favor the transfer

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and that the interests of justice favor the transfer to discourage

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forum-shopping.

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I. Proper Venue

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As an initial matter, the Court finds that venue is proper

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either in this district or in the District of Colorado.

Both

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districts have personal jurisdiction over the parties.

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parties agree that they both have sufficient contacts in both

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states, and that those contacts satisfy the personal jurisdiction

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“minimum contacts” analysis.

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Wash., Office of Unemployment Comp. & Placement, 326 U.S. 310, 316

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(1945).

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have subject matter jurisdiction over this case, both diversity

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jurisdiction, 28 U.S.C. § 1332, and federal question jurisdiction,

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28 U.S.C. § 1331.

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jurisdiction pursuant to 28 U.S.C. § 1331, the Court finds that

The

See Int’l Shoe Co. v. State of

In addition, the Court finds that courts in both venues

Given that both fora have subject matter

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courts in both venues have supplemental jurisdiction over the

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state claims.

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II. Convenience Factors

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28 U.S.C. § 1367.

“Once venue is determined to be proper in both districts, the

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Court evaluates which venue is more convenient to the parties and

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the witnesses.”

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Mercury argues that “convenience factors overwhelmingly favor

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transfer,” because “the alleged acts giving rise to the claims

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occurred in Colorado, the majority of witnesses (party and

Reflex Packaging, 2103 WL 5568345, at *3.

United States District Court
For the Northern District of California

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nonparty) reside in Colorado, and virtually all documentary

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evidence is located in Colorado.”

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counters that this district is the most convenient venue because

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it is its preferred forum, many of the acts in question occurred

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in California, and many third-party witnesses and evidence is

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located here.

Docket No. 19 at 8.

Heartland

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A. Heartland’s choice of forum

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The plaintiff’s choice of forum is generally given deference.

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Jones, 211 F.3d at 498-99.

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choice of forum should be given little weight because “the

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operative facts giving rise to this complaint occurred in

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Colorado.”

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occurred within the forum of original selection and that forum has

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no particular interest in the parties or the subject matter, the

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plaintiff’s choice is entitled only to minimal consideration.”

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Pac. Car & Foundry Co. v. Pence, 403 F.2d 949, 954 (9th Cir.

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1968).

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Mercury alleges that Heartland’s

Docket No. 19 at 14.

“If the operative facts have not

The operative acts alleged in the complaint occurred in
California.

The crux of Heartland’s suit is that Mercury engaged
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in deceptive business practices; because California accounts for a

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sizable percentage of each entity’s business, Heartland alleges

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that much of the deceptive practices occurred in California.

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Furthermore, Heartland provides, with specificity, the names of

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California merchants Mercury allegedly deceived.

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factor weighs against transfer.

Thus, this

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B. Convenience of the parties

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Mercury argues that it will be inconvenient to litigate this

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matter in this district.

Mercury is headquartered in Colorado,

United States District Court
For the Northern District of California

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and has no offices in California.

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offices in California and 181 employees in the state.

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one Colorado office.

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Colorado would shift the inconvenience of one party to the other

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party.

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(N.D. Cal. 1988) (“If the gain of convenience to one party is

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offset by the added inconvenience to the other, the courts have

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denied transfer of the action.”)

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transfer.

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Heartland has, however, two
It has only

Transferring this case to the District of

See STX, Inc. v. Trik Stik, Inc., 708 F. Supp. 1551, 1556

Thus, this factor weighs against

C. Convenience to witnesses
1. Party witnesses
The convenience of witnesses is often the most important

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factor in deciding whether to transfer an action.

Getz v. Boeing

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Co., 547 F. Supp. 2d 1080, 1083 (N.D. Cal. 2008).

The convenience

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of witnesses includes “a separate but related concern, the

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availability of compulsory process to bring unwilling witnesses

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live before the jury.”

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Supp. 2d 820, 820 (N.D. Cal. 2008).

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inconvenience to the parties’ employees, whom the parties can

Brackett v. Hilton Hotels Corp., 619 F.

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The Court, however, discounts

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compel to testify.

See STX, Inc., 708 F. Supp. at 1556.

Mercury argues that it would be inconvenient for it to

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litigate in this district because “key party . . . witnesses in

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this case reside in Colorado.”

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it argues that its “employees . . . will be the key witnesses in

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this case,” and that “virtually all of Mercury’s current employees

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live and work in Colorado.”

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employees residing in California, including its Executive Director

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of Business Development, who will likely be called to testify.

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United States District Court
For the Northern District of California

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Given that the Court discounts the inconvenience to Mercury’s

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employees, this factor weighs against transfer.

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Docket No. 19 at 9.

Id.

Specifically,

Heartland has, however, 181

2. Non-party witnesses
As stated above, the convenience of witnesses is often the

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most important factor in deciding whether to transfer an action.

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Mercury points to its former employees, including former sales

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executives, as some of the “key witnesses” in this case.

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rightly points out that Colorado non-party witnesses cannot be

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compelled to appear in this Court.

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not stated, however, why the former employees would have

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information its current employees lack.

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has not shown how the inability to compel the non-party witnesses

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would lead to unfair prejudice.

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Fed. R. Civ. P. 45(c).

Mercury

It has

In other words, Mercury

On the other hand, Heartland has identified several

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California witnesses, including merchants, who can be compelled to

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appear in this Court.

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out of events that occurred in California, and that the deceptive

Given that Heartland’s allegations arise

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practices have California “victims” whom Heartland will likely

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call to testify, California is more convenient to potential non-

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party witnesses.

Thus, this factor weighs against transfer.

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D. Access to evidence

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The “costs of litigation can . . . be substantially lessened

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if the venue is in the district in which most of the documentary

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evidence is stored.”

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Supp. 2d 1088, 1095 (N.D. Cal. 2013).

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has decreased, however, as technological advances in document

Park v. Dole Fresh Vegetables, Inc., 964 F.
The weight of this factor

United States District Court
For the Northern District of California

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storage and retrieval have greatly reduced the burden of

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transporting documents between districts.

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2d at 820; David v. Alphin, 2007 WL 39400, at *3 (N.D. Cal.)

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(“with technological advances in document storage and retrieval,

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transporting documents does not generally create a burden”).

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Brackett, 619 F. Supp.

Mercury claims that “the sources of proof are almost

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exclusively located in Colorado.”

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sources include “advertising and promotional materials,” its

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website and social media communications.

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however, that key evidence -- “monthly billing statements” -- is

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printed in Michigan.

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are not electronically stored (which is unlikely), the cost of

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transmitting that evidence from Michigan to Colorado will be

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equivalent to the cost of transmitting it from Michigan to

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California.

Id.

Docket No. 19 at 12.

Id.

These

Mercury admits,

Even assuming those monthly statements

Thus, this factor is neutral.

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E. Forum’s familiarity with the applicable law

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Four of Heartland’s five causes of action arise out of

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alleged violations of California law.

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states that the District of Colorado would have jurisdiction over

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Heartland’s state claims and would apply California law, it is

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clear that this Court is more familiar with California law than

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any non-California district court.

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F. Supp. 2d 1074, 1081 (S.D. Cal. 2011) (“A California district

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court is more familiar with California law than district courts in

United States District Court
For the Northern District of California

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other states”).

While Mercury rightly

See In re Ferrero Litig., 768

Thus, this factor weighs against transfer.

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F. Feasibility of consolidation

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There are no related cases pending in the federal District of

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Colorado.

Thus, the factor is neutral.

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G. Local interest in the controversy

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This Court has held that when the case implicates the rights

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of a state’s residents, a court in that state has a greater

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interest in the dispute than a court in another state.

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Transperfect, 2010 WL 36195565, at *4.

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alleged that the rights of California residents are implicated, as

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they have been the victims of unfair and deceptive business

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practices.

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residents are implicated, nor does it assert that the rights of

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Colorado residents are at stake.

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transfer.

Here, Heartland has

Mercury does not dispute that the rights of California

Thus, this factor weighs against

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United States District Court
For the Northern District of California

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H. Relative court congestion
Heartland alleges that the median time from filing a
complaint to trial is similar in both districts (24.6 months in
this district, and 24.4 months in the District of Colorado.)

The

backlogs are not significantly disproportionate; thus, this factor
is neutral.
III. Forum-Shopping
“Evidence of forum-shopping by a plaintiff supports a
defendant’s motion to transfer venue.”

Lucas v. Daiichi Sankyo

Co., 2011 WL 2020443, at *4 (N.D. Cal.).
Mercury argues that “the interests of justice favor transfer
to discourage forum-shopping.”

Docket No. 19 at 15.

It asserts

that the parties and the subject matter “are disconnected from
California” and “have nothing to do with California.”

Id.

Heartland has alleged, however, that many of the operative acts
occurred in California, and that both parties have contacts in the
state.

Courts have found evidence of forum shopping when a party

does not reside in the district, see id., or when, in a class
action, the class members reside outside of the state, see Wilson
v. Walgreen Co., 2011 WL 4345079, at *3 (N.D. Cal.).

While

Heartland does not reside in this district, it does have
significant contacts in the district due to its California office
and employees.

Thus, the Court does not find sufficient evidence

to support an inference that Heartland is forum-shopping.

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IV. Balancing of Factors
All of the factors weigh against transfer or are neutral.

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Thus, Mercury has failed to show that the balance of

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inconveniences favors transfer to the District of Colorado.

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CONCLUSION
For the foregoing reasons, Mercury’s motion to transfer
(Docket No. 19) is DENIED.

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IT IS SO ORDERED.

United States District Court
For the Northern District of California

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Dated:

November 4, 2014
CLAUDIA WILKEN
United States District Judge

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