Forte Supply, LLC et al v. Mojo Frozen Yogurt, LLC et al
Filing
57
ORDER Denying Defendants' Motion to Change Venue and to Dismiss (ECF No. 17 ). By Judge Raymond P. Moore on 09/30/13. (alvsl)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLORADO
Judge Raymond P. Moore
Civil Action No. 13-cv-00797-RM-BNB
FORTE SUPPLY, LLC, a Colorado Limited Liability Company, and
JEFF RESNICK, a resident of the state of Colorado, in his official capacity,
Plaintiffs,
v.
MOJO FROZEN YOGURT, LLC, a New Jersey Limited Liability Company, and
THOURIA IBRAHIM, a resident of the state of New Jersey,
Defendants.
______________________________________________________________________________
ORDER DENYING
DEFENDANTS’ MOTION TO CHANGE VENUE AND TO DISMISS (ECF NO. 17)
______________________________________________________________________________
THIS MATTER is before the Court on Motion to Change Venue and to Dismiss
(“Motion”) (ECF No. 17) filed by Defendants Mojo Frozen Yogurt LLC (“Mojo”) and Thouria
Ibrahim (“Ibrahim”) (collectively, “Defendants”). The Court has subject matter jurisdiction
pursuant to 28 U.S.C. § 1332.
I. BACKGROUND
This case arises from Defendants’ alleged actions taken after they purchased yogurt
machines from Plaintiffs. In their Complaint, Plaintiffs alleged the following. Plaintiff Forte
Supply LLC (“Forte”) is a Colorado limited liability company and Plaintiff Jeff Resnick
(“Resnick”) is Forte’s owner and a Colorado resident. Plaintiffs’ business – store – is located in
Colorado. (Complaint ¶¶ 1-2 & Ex. 6.) Mojo is a New Jersey limited liability company and
Ibrahim is Mojo’s owner and a New Jersey resident. (Complaint ¶¶ 4-5.)
In 2012, Defendants contacted Plaintiffs in Colorado to purchase four yogurt machines
for use in New Jersey. (Complaint ¶¶ 8-9 &16.) On June 4, 2012, the parties entered into a
purchase agreement for the purchase and sale of four machines, each of which came with a
warranty.1 (Complaint ¶¶ 16-18.) The transaction was consummated in Colorado. (Complaint
¶ 8.)
Soon after the purchase, Defendants contacted Plaintiffs with complaints about the
machines. (Complaint ¶ 19.) Plaintiffs sent three local, i.e., New Jersey, service providers to
check the machines and found no problems. (Complaint ¶¶ 16, 17 & 20.) Defendants continued
to experience problems and contacted Plaintiffs again. Resnick traveled to New Jersey twice to
inspect the machines but concluded there were no problems with the machines. (Complaint
¶¶ 20-21.)
Thereafter, Defendants engaged in a number of actions directed at Plaintiffs. In January
and February 2013, Ibrahim contacted a potential client of Forte, accused Plaintiffs of selling
faulty machines, and stated the legal action against Plaintiffs was imminent. (Complaint ¶ 22 &
Exhibit [Ex.] 5.) Defendants notified Plaintiffs via e-mail that Defendants would continue to
make negative reports concerning Plaintiffs until they provided a refund on the machines.
(Complaint ¶ 10 & Exs. 3 & 5.) Defendants told Plaintiffs to “[w]atch out for more negative
reports.” (Complaint, Ex. 3.) Defendants made other threats to file suit against Plaintiffs.
(Complaint ¶¶ 10-11.)
1
Defendants argued they signed no paperwork and received no bill of lading or bill of sale but provided no affidavit
to contradict Plaintiffs’ allegations; therefore, at this stage, such allegations are assumed true. See Dudnikov v.
Chalk & Vermilion Fine Arts, Inc., 514 F.3d 1063, 1070 & 1076 (10th Cir. 2008) (“Dudnikov”).
2
On March 13, 2013, Ibrahim posted a negative review concerning Plaintiffs on “Yelp,”
an online review website. The review identified that Plaintiffs were located in Colorado and
showed a picture of Plaintiffs’ storefront. (Complaint ¶ 24 & Ex. 6.) Also in March 2013,
Defendants filed a complaint against Plaintiffs with the Colorado Consumer Protection Unit,
which was investigated by the Colorado office of the Better Business Bureau (“BBB”).
(Complaint ¶ 10 & Ex. 2) Defendants’ complaint is posted publicly on the BBB’s website.
(Complaint ¶ 10.) Defendants’ actions were taken with the sole purpose of ruining Plaintiffs’
Colorado based business, causing lost business and damaging their business reputation.
(Complaint ¶ 10.)
As a result of Defendants’ alleged actions, Plaintiffs filed suit before this Court asserting
claims for: (1) Injunctive Relief and Temporary Restraining Order based on Defendants’ alleged
defamatory statements; (2) Intentional Interference with Contractual Relations; (3) Breach of
Covenant of Good Faith and Fair Dealing; (4) Injury to Business Reputation; and (5)
Defamation. Except for the claim for breach of covenant of good faith and fair dealing, the
other claims appear to be based in, or premised on a question of, tort. E.g., City of Golden v.
Parker, 138 P.3d 285, 292 (Colo. 2006); see Wood v. New Jersey Manuf. Ins. Co., 206 N.J. 562,
21 A.3d 1131, 1132 (2011).
In response to Plaintiffs’ Complaint, Defendants moved to dismiss under Fed.R.Civ.P.
12(b)(2) for lack of personal jurisdiction and moved to change venue under 28 U.S.C. §§ 1404(a)
and 1406(a). None of the parties filed affidavits or verified documents.
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II. ANALYSIS
A.
Personal Jurisdiction.
Where the court’s jurisdiction is contested, the plaintiff bears the burden of establishing
personal jurisdiction. Dudnikov, supra at 1069-1070. Where the court considers a pre-trial
motion to dismiss for lack of personal jurisdiction without conducting an evidentiary hearing, the
plaintiff need only make a prima facie showing that jurisdiction is proper. AST Sports Science,
Inc. v. CLF Distrib. Ltd., 514 F.3d 1054, 1056-1057 (10th Cir. 2008) (“AST Sports Science”);
Dudnikov, supra at 1069-1070. The court will take as true all well-pled facts alleged in the
complaint to determine if the plaintiff has made such a showing. Dudnikov, supra at 1070.
Colorado’s long-arm statute extends jurisdiction to the fullest extent permitted by the Due
Process Clause of the Fourteenth Amendment, thereby obviating the need for a long-arm
statutory analysis separate from the due process inquiry. Archangel Diamond Corp. v. Lukoil,
123 P.3d 1187, 1193 (Colo. 2005); AST Sports Science, supra at 1057. In order to determine
whether the exercise of personal jurisdiction over Defendants comports with due process, the
Court is required to conduct a two-step inquiry. First, do the nonresident Defendants have
sufficient “minimum contacts” with Colorado that they should reasonably anticipate being haled
into court here. If so, the next step is to determine whether the exercise of personal jurisdiction
over Defendants offends “traditional notions of fair play and substantial justice.” International
Shoe Co. v. State of Wash., 326 U.S. 310, 316 (1945) (internal quotations omitted); AST Sports
Science, supra at 1057.
Plaintiffs rely on the exercise of specific personal jurisdiction over Defendants. The
parties did not break out their specific jurisdiction analysis by claim or by Defendants but treated
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the claims and Defendants as identical in all material respects. Unlike subject matter
jurisdiction, the courts are not obligated to independently assess personal jurisdiction. See
Grynberg v. Ivanhoe Energy, Inc., 490 Fed.Appx. 86, 2012 WL 2855777, at * 4 (10th Cir. July
12, 2012). Accordingly, the Court will not attempt to parcel out the claims or Defendants but
treat them as the parties have done.
1.
Specific Personal Jurisdiction.
a)
Minimum Contacts. In order to meet the “minimum contacts” standard for
specific jurisdiction over a nonresident defendant: (1) that defendant must have “purposefully
directed” its activities at residents of the forum state; and (2) the plaintiff’s alleged injuries must
“arise out of or relate to” those activities. AST Sports Science, supra at 1058.
(1) “Purposeful Direction.”
Plaintiffs rely on Dudnikov, supra and its application of the test set forth in Calder v.
Jones, 465 U.S. 783 (1984). Accordingly, this Court will begin its analysis there. Calder, supra
involved an action based in tort, i.e., libel, invasion of privacy, and intentional infliction of
emotional harm, brought by a California resident against a writer and editor based in Florida.
Applying the “effects” test, the U.S. Supreme Court found the Florida residents were subject to
suit in California because California was the focal point of the story and of the harm suffered.
“Distilling Calder to its essence,” Dudnikov, supra at 1072, the Tenth Circuit stated that
“purposeful direction” exists where there is the presence of (a) an intentional action, which was
(b) expressly aimed at the forum state, with (c) knowledge that the brunt of the injury would be
felt in the forum state. Id. at 1072.
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In the context of Internet activities, however, the Tenth Circuit has held that the posting
of allegedly defamatory comments or information on an internet site, without more, does not
subject the poster to personal jurisdiction wherever the posting could be read or the subject of the
posting may reside. Schrader v. Biddinger, 633 F.3d 1235, 1241 & 1244 (10th Cir. 2011). The
plaintiff’s residence in the forum, and suffering harm there, standing alone, are also insufficient.
Id. at 1244. Instead, the courts look “to indications that a defendant deliberately directed its
message to an audience in the forum state and intended harm to the plaintiff occurring primarily
or particularly in the forum state,” id. at 1241, or “otherwise [made] the forum state the focal
point of the message,” id. at 1244. In other words, “the forum state itself must be the focal point
of the tort.” Id. at 1244 (italics in original).
In this case, Plaintiffs have sufficiently alleged intentional wrongful acts by Defendants
which interfered with and harmed Plaintiffs’ business, e.g., Defendants intentionally posted false
and negative reviews of Plaintiffs’ business, and intentionally and improperly provided false and
misleading statements concerning Plaintiffs.
Similarly, Plaintiffs have sufficiently alleged Defendants’ intentional actions were
“expressly aimed” at Colorado. Defendants are alleged to have wrongfully posted negative
reviews about and filed a Colorado based BBB complaint against Plaintiffs, who Defendants
knew were located in Colorado and intended their extra-forum conduct to reach Colorado.
Plaintiffs obviously conducted their business nationally, if not internationally, through the
Internet but their business – store – was centered in Colorado. As such, Defendants’ alleged
conduct would inherently have included a substantial number of forum state residents and
businesses. While Defendants may have acted, e.g., made the posting, in New Jersey, those
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actions can be fairly characterized as intended to negatively affect Plaintiffs’ business in
Colorado.
Had Plaintiffs only alleged Defendants posted derogatory comments on Yelp, a
geographically–neutral forum, and/or Plaintiffs had no local physical location in Colorado, a
different conclusion may have been reached. Here, however, Plaintiffs also alleged Defendants
did something more – they filed a complaint with the Colorado Consumer Protection Unit,
causing the local Colorado BBB to act. Accordingly, neither the lack of Defendants’ physical
presence in Colorado nor the fact they used the Internet to effectuate their purpose negates the
fact that Defendants’ express aim was to affect a Colorado resident and his Colorado based
business, and target a Colorado audience. Dudnikov, supra at 1076.
Finally, the allegations are sufficient to show Defendants knew the brunt of the injury
would be felt in Colorado. As shown in the Complaint and supporting exhibits, Defendants
knew Forte was a Colorado based company. Defendants’ public postings and complaints are
available in the United States, and presumably worldwide, but all affect Plaintiffs’ Colorado
business. Accordingly, this prong has also been met.
(2) “Arising Out Of.”
In addition to purposeful direction, the specific personal jurisdiction test requires the
Court to determine whether Plaintiffs’ injuries “arise out of” Defendants’ forum-related
activities. The Tenth Circuit stated there are potentially two tests – the “but-for” test and the
“proximate cause” test – but has not yet decided which one to choose. Newsome v. Gallagher,
722 F.3d 1257, 1269-1270 (10th Cir. 2013).
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Under the but-for approach, any event in the causal chain leading to the plaintiff’s
injury is sufficiently related to the claim to support the exercise of specific
jurisdiction. The proximate cause approach, by contrast, is considerably more
restrictive and calls for courts to examine whether any of the defendant’s contacts
with the forum are relevant to the merits of plaintiff’s claim.
Id. at 1269-1270 (quoting Dudnikov, supra at 1078; internal brackets omitted).
In this case, Plaintiffs’ allegations are sufficient even under the more restrictive
proximate cause test. Here, Plaintiffs alleged Defendants purposely and intentionally
provided false information concerning Plaintiffs’ Colorado based business which caused
Plaintiffs to lose business and suffer damage to their business reputation. Defendants
argue Plaintiffs have shown no injury because the BBB has closed its investigation of
Defendants’ complaint. The issue before the Court, however, is whether it may exercise
personal jurisdiction over Defendants and not whether Plaintiffs can establish their
claimed injury. See Newsome v. Gallagher, supra at 1270-1271 (recognizing importance
of keeping 12(b)(2) and 12(b)(6) analyses distinct).
Defendants also argue their “one isolated purchase of defective goods from a business in
Colorado” and “appropriate contacts with Colorado’s Better Business Bureau” regarding that one
purchase are insufficient. Defendants, however, ignore the allegations concerning their contacts
with Plaintiffs in Colorado arising from the servicing of the machines and their negative
comments about Plaintiffs on Yelp and to a third-party. Accordingly, Defendants’ argument is
unavailing.
b)
Fair Play and Substantial Justice. Where a plaintiff satisfies its
minimum contacts burden, the burden shifts to the defendant to demonstrate that
exercising personal jurisdiction would nonetheless “offend traditional notions of fair play
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and substantial justice.” Newsome v. Gallagher, supra 1271 (quoting Dudnikov, supra at
1080; quotation marks omitted). Five factors to consider are: “(1) the burden on
defendant[;] (2) the forum state’s interest in resolving the dispute[;] (3) the plaintiff’s
interest in receiving convenient and effective relief[;] (4) the interstate judicial system’s
interest in obtaining the most efficient resolution of controversies[;] and (5) the shared
interest of the several states in furthering fundamental substantive social policies.” Id. at
1271 (quoting Omni Holdings, Inc. v. Royal Ins. Co. of Canada, 149 F.3d. 1086, 1095
(10th Cir. 1998) (“Omni”)).
(1) “Burden on Defendants.”
Defendants argue the burden on them is “extreme” as the technicians who attempted to
repair the machines are in New Jersey and the person to whom they allegedly provided false
information lives in “the New Jersey area,” i.e., Pennsylvania; therefore, all are beyond the
subpoena power of this court. Defendants also argue they would be “run out of business” if they
must defend the allegations in Colorado, nearly two thousand miles away. Plaintiffs did not
dispute the location of the witnesses but contend that videotaped depositions are available.
Plaintiffs also assert that it would be unreasonable and inconvenient for them to litigate a case
two thousand miles away based on Defendants’ actions.
“[M]odern transportation and communications have made it much less burdensome for a
party sued to defend himself in a State where he engages in economic activity.” Burger King
Corp. v. Rudzewicz, 471 U.S. 462, 474 (1985) (internal quotation marks omitted). The Court
finds that traveling from New Jersey to Colorado will impose some burden on Defendants, but
not unduly so as “in any case in which the parties reside in different fora, one side must bear the
9
inconvenience of litigating ‘on the road.’” Dudnikov, supra at 1081. Further, while New Jersey
or Pennsylvania witnesses may be beyond the subpoena power of this Court to compel them to
appear in Colorado, Defendants have not shown that all of such witnesses would be unwilling to
appear absent a subpoena. Defendants have also failed to establish their defense would be
burdened by presenting the testimony of such non-Colorado witnesses by other than live
testimony. Accordingly, this factor does not weigh definitively in Defendants’ favor.
(2) “The Forum State’s Interest in Resolving the Dispute.”
Defendants argue that if they prevail, the impact on Colorado would be minimal, as only
one relatively small company is involved and because Plaintiffs’ damages are “highly
speculative.” Defendants further contend that, while Colorado admittedly has an interest in
protecting its citizens from legal harm, New Jersey’s interest in protecting its citizens from
frivolous lawsuits outweighs Colorado’s interests. Plaintiffs counter that Colorado has an
interest in providing residents with a forum to resolve disputes where out-of-state actors have
caused residents injuries, regardless if the residents offer their products nationally. This Court
agrees. As previously stated, the issue before this Court is whether specific personal jurisdiction
exists not whether Plaintiffs may ultimately win or lose their lawsuit. Further, Colorado has an
important interest in providing a forum for Colorado residents and businesses to seek redress for
injuries caused by out-of-state actors. See AST Sports Science, Inc., supra at 1062. Accordingly,
Defendants have not shown this factor weighs in their favor.
(3) “The Plaintiff’s Interest in Receiving Convenient and Effective Relief.”
“‘This factor may weigh heavily in cases where a Plaintiff’s chances of recovery will be
greatly diminished by forcing him to litigate in another forum because of that forum’s laws or
10
because the burden may be so overwhelming as to practically foreclose pursuit of the lawsuit.’”
Newsome v. Gallagher, supra at 1273 (quoting OMI, supra at 1097). Defendants argue that in
the unlikely event that Plaintiffs prevail, they would have a greater ability to secure relief in New
Jersey as Defendants have no assets in Colorado. Plaintiffs respond they are fully capable of
registering any judgment in the United States District Court for the District of New Jersey. The
burden is on the Defendants and they have not shown whether Plaintiffs may receive convenient
and effective relief in New Jersey.
(4) “The interstate judicial system’s interest in obtaining the most efficient
resolution of controversies.”
The focus of the inquiry here are “the location of witnesses, where the wrong underlying
the lawsuit occurred, what forum’s substantive law governs the case, and whether jurisdiction is
necessary to prevent piecemeal litigation.’” Newsome v. Gallagher, supra at 1274 (quoting
Omni, supra at 1097).
First, Defendants asserted, and Plaintiffs did not dispute, that the majority of witnesses
are located in New Jersey. Next, the wrong underlying the lawsuit occurred in Colorado. As
previously discussed, while Defendants’ actions complained of were taken in New Jersey, they
were directed to and allegedly injured Plaintiffs in Colorado.
As to what forum’s substantive law governs, “[i]n a diversity action, a federal district
court must apply the substantive law of the state in which it sits…including principles regarding
choice of law.” Vandeventer v. Four Corners Elec. Co., Inc., 663 F.2d 1016, 1017 (10th Cir.
1981). Therefore, Colorado’s choice of law principles applies. Colorado applies the “most
significant relationship” approach under the Restatement (Second) for contract and tort actions.
See Wood Bros. Homes, Inc. v. Walker Adj. Bureau, 198 Colo. 444, 601 P.2d 1369, 1372 (1979).
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At this stage, the burden is on Defendants to show this factor weighs against the exercise
of personal jurisdiction. Defendants did not address this factor in their personal jurisdiction
analysis but did so in their request for a change of venue, which this Court has considered.
Defendants argue that New Jersey law would apply as their alleged tortious actions took place in
New Jersey. Nonetheless, they argue the common law legal issues are “relatively
straightforward,” which diminishes the importance of having a local court decide local law.
Plaintiffs argue Colorado law applies and Defendants have not shown whether the two forums
interpret common law principles the same way. They also assert that even if New Jersey law
applied, that could be looked up on the Internet. The parties have provided insufficient
information on this issue as to the likelihood that New Jersey versus Colorado law would apply.
Nonetheless, it is Defendants’ responsibility to make a showing and, at this juncture, they have
not done so.
Finally, on the question of whether jurisdiction is necessary to prevent piecemeal
litigation, Defendants also did not address this factor. Presumably, Plaintiffs could bring suit in
New Jersey if this Court were to dismiss Defendants.
In sum, Defendants have not shown this Court that the sub-factors favor a forum other
than Colorado. On balance, this factor is neutral.
(5) “The Shared Interest of the Several States in Furthering Fundamental
Substantive Social Policies.”
This factor focuses on whether the exercise of personal jurisdiction affects the substantive
social policy interests of other states or foreign nations. AST Sports Science, Inc., supra at 1062.
Here, this factor favors Plaintiffs as Defendants have not shown how the exercise of personal
12
jurisdiction by Colorado would interfere with any substantive social policies of New Jersey, or
how the litigation of this action in New Jersey would advance such policies, if any.
c) Exercise of Specific Jurisdiction Would Be Reasonable.
This Court may properly exercise specific personal jurisdiction over Defendants.
Plaintiffs have made a prima facie showing that Defendants had minimum contacts with
Colorado. Defendants have not met their burden of showing that the exercise of jurisdiction by
Colorado over them would offend fair play and substantial justice, i.e., is unreasonable. None of
the factors, separately or in combination, weighs definitively in favor of Defendants.
B.
Improper Venue.
Pursuant to 28 U.S.C. § 1406(a), the district court “in which is filed a case laying venue
in the wrong ...district shall dismiss, or if it be in the interest of justice, transfer such case to any
district...in which a case could have been brought.” As relevant to this case, in an action based
on diversity, venue lies in a judicial district in which a substantial part of the events or omissions
giving rise to the claim occurred. 28 U.S.C. § 1391(b)(2). Under this provision, “venue is not
limited to the district with the most substantial events or omissions.” Employers Mutual Cas. Co.
v. Bartile Roofs, Inc., 618 F.3d 1153, 1165 (10th Cir. 2010) (italics in original).
The court conducts a two-part analysis to determine whether venue is proper. First, the
court examines the nature of plaintiff’s claims and acts or omissions underlying those claims.
Secondly, the court determines whether substantial events material to those claims occurred in
the forum district. Id. at 1166.
In this case, Defendants argue venue is improper because the machines malfunctioned in
New Jersey; they made comments, spoke with the BBB, and contemplated litigation in New
13
Jersey; and their attorney who is a witness regarding the alleged threats of litigation is also in
New Jersey. This Court is not persuaded such factors show venue in Colorado is improper.
First, where the machines malfunctioned does not serve as a basis for Plaintiffs’ claims.
Instead, as argued by Plaintiffs, it is Defendants’ alleged intentional actions in reaching into
Colorado and contacting the Colorado BBB, hindering future relations with Colorado customers,
and threatening Plaintiffs with litigation which serve as the bases for Plaintiffs’ claims. As
previously discussed, the fact that Defendants’ alleged acts physically occurred in New Jersey
does not, in the context of this case, support a finding that such actions are not significantly
connected to Colorado.
C.
Change of Venue.
Defendants’ request for a change of venue under 28 U.S.C. § 1404(a) requires the Court
to weigh the following factors: (a) the plaintiff’s choice of forum; (b) the accessibility of
witnesses and other sources of proof; (c) the cost of making the necessary proof; (d) the
enforceability of a judgment if one is obtained; (e) relative advantages and obstacles to a fair
trial; (f) difficulties that may arise from congested dockets; (g) the existence of any questions
arising in the area of conflict of laws; (h) the advantage of having a local court determine
questions of local law; and (i) other considerations of a practical nature that make a trial easy,
expeditious and economical. See Employers Mutual Cas. Co. v. Bartile Roofs, Inc., supra at
1167. The burden is on Defendants to establish that the existing forum is inconvenient. Id. at
1167. The mere shifting of inconvenience from one side to the other side is not a permissible
justification for a change of venue. Id. at 1167.
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1.
Plaintiffs’ Choice of Forum.
“Unless the balance is strongly in favor of the movant, the plaintiff’s choice of forum
should rarely be disturbed.” Id. at 1167-1168 n.13 (quoting Scheidt v. Klein, 956 F.2d 963, 965
(10th Cir. 1992); internal alteration and quotation marks omitted). The plaintiff’s choice of
forum receives less deference, however, if the plaintiff does not reside in this district or where
the facts giving rise to the lawsuit have no material relation or significant connection to the
chosen forum. Id. at 1168. Such facts are not present here. In this case, Plaintiffs are a
Colorado resident and his Colorado company. Further, Plaintiffs’ claims, as alleged, are based
on Defendants’ actions taken against and directed to Plaintiffs in Colorado seeking to harm their
Colorado based business. Such allegations show the facts giving rise to this action are
materially related or have a significant connection to Colorado. Accordingly, this factor weighs
against transferring this action.
2.
Accessibility of Witnesses and Sources of Proof.
The convenience of witnesses is the most important factor. “To demonstrate
inconvenience, the movant must (1) identify the witnesses and their locations; (2) indicate the
quality or materiality of their testimony; and (3) show that any such witnesses [are] unwilling to
come to trial, that deposition testimony would be unsatisfactory, or that the use of compulsory
process would be necessary.” Id. at 1169 (internal alterations and brackets omitted).
As previously discussed, Defendants have identified four witnesses located in New Jersey
– the three technicians and Defendants’ former attorney. Defendants assert, without any support,
that, absent compulsory process, such witnesses are “unlikely” to testify at trial or deposition,
particularly in Colorado, and that nearly all of Defendants’ witnesses are beyond this Court’s
15
power to compel their cooperation. Defendants also contend the videotaped testimony of such
witnesses at trial is a “pale substitute” for live testimony. On the other hand, Plaintiffs argue,
also without evidentiary support, they have business relationships with the three technicians who
“may very well be willing to travel to Colorado.” Plaintiffs also represented they would make
arrangements for the technicians to provide their testimony, “in whatever form it takes.”
Defendants’ unsupported assertions do not demonstrate the requisite inconvenience to the
witnesses. First, as to Defendants’ prior attorney, the Court finds it difficult to believe that such
attorney would require her former clients to compel her to appear to testify at her deposition or
trial. Second, in light of the limited nature of her anticipated testimony, the Court is not
persuaded that her videotaped deposition or “live” testimony through videoconferencing would
be insufficient. As for the three technicians, Plaintiffs’ allegations, which are presumed true at
this stage, that they sent the three technicians to examine/service the machines, and paid for the
same, support a fair inference that Plaintiffs have a business relationship with these individuals.
Nonetheless, they too have insufficiently shown that such individuals would willingly appear in
Colorado. Nonetheless, Defendants’ speculation that such witnesses are “unlikely” to testify at
trial or deposition is insufficient to demonstrate the requisite inconvenience to such witnesses.
See Scheidt v. Klein, supra at 966.
Defendants also point to the fact that the machines are located in New Jersey and that
testing should be done where they were supposed to be operated – in New Jersey. Plaintiffs
assert they wish to test the machines at their place of business, by their technicians and under
video surveillance, and would bear the cost of transporting the machines back to Colorado.
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The Court finds the fact that the machines are located New Jersey is a neutral consideration
because, if Defendants wish to conduct any testing, it can do so there but that does not preclude
Plaintiffs from also testing the machines. Assuming the actual machines are necessary at trial,
Defendants have not shown why such “bulky” machines could not be shipped to Colorado as
they had been shipped to Defendants in New Jersey. Accordingly, Defendants have not
demonstrated this factor weighs in favor of a transfer.
3.
Cost of Making the Necessary Proof.
The cost of making the necessary proof weighs in favor of a transfer. Here, the three
technicians are located in New Jersey as are the machines. Even assuming, as Plaintiffs assert,
the technicians may be willing to travel to Colorado for trial, the cost for doing so is higher than
if the case was heard in New Jersey. There is also the additional cost of shipping one or more of
the machines to Colorado, even if Plaintiffs are willing to bear the costs. Thus, this factor
weighs in favor of a transfer.
4.
Enforceability of any Judgment.
This factor is neutral. As Defendants concede, a federal judgment would be equally
enforceable regardless of the issuing court. Defendants’ argument that enforcement would be
easier in New Jersey because Plaintiffs would have to docket a Colorado judgment or settlement
in New Jersey before they could enforce does not tip the balance in Defendants’ favor.
5.
Relative Advantages and Obstacles to a Fair Trial.
Defendants argue witnesses would be difficult to secure and the production of evidence
“would be nearly impossible.” As previously discussed, Defendants have failed to establish the
witnesses identified could not be secured. As for the machines, again, while it may be more
17
expensive to have them shipped to the Colorado courthouse rather than to the New Jersey
courthouse, Defendants have failed to explain why it would be “nearly impossible” to do so.
Therefore, this factor is neutral.
6.
Difficulties that May Arise from Congested Dockets.
Defendants concede docket congestion favors Colorado but argues it is a minor
consideration because the difference is either one month shorter (from filing to non-trial
disposition) to 12 months shorter (from filing to trial) in Colorado. This factor, however
“minor,” weighs slightly against a transfer to New Jersey.
7.
Conflict of laws.
As discussed above, the record is unclear as to which state’s laws would apply.
Moreover, Defendants have argued that the legal issues are “relatively straightforward.” Thus, it
would appear this would be a neutral factor.
8.
Local court to Determine Questions of Local Law.
For the reasons stated regarding the conflicts of law issue, this factor also appears to be
neutral.
9.
Other Considerations for an Easy, Expeditious and Economical Trial.
Plaintiffs assert there are obstacles to a fair trial in New Jersey by summarily stating that
witnesses they would call to testify would be difficult to secure and “possibl[y] other obstacles.”
Such conclusory statements are insufficient. Nonetheless, in sum, based on the record before the
Court, Defendants have failed to show this case should be transferred to New Jersey.
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III. CONCLUSION
Plaintiffs have met their burden of establishing personal jurisdiction over Defendants, but
Defendants have failed to show venue in Colorado is improper or that this case should be
transferred. The Court recognizes Defendants will suffer some burden and inconvenience in
litigating in Colorado. Nonetheless, on the record before this Court, Defendants’ alleged actions
toward Plaintiffs, citizens and residents of Colorado, over the Internet or otherwise gave rise or
were sufficiently related to Plaintiffs’ claims to make the exercise of jurisdiction – and the
determination of Plaintiffs’ case here – reasonable and fair. Accordingly, it is therefore
ORDERED that Defendants’ Motion (ECF No. 17) is DENIED.
DATED this 30th day of September, 2013.
BY THE COURT:
____________________________________
RAYMOND P. MOORE
United States District Judge
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