Electronic Packaging Solutions, Inc. et al v. Dickstein Shapiro, LLP

Filing 53

ORDER denying Defendant's 14 Motion to Transfer Venue. By Judge Robert E. Blackburn on 3/6/2014.(klyon, )

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLORADO
Judge Robert E. Blackburn
Civil Case No. 13-cv-01636-REB-KMT
ELECTRONIC PACKAGING SOLUTIONS, INC. ET AL,
Plaintiff,
v.
DICKSTEIN SHAPIRO, LLP,
Defendant.

ORDER DENYING DEFENDANT’S MOTION TO TRANSFER VENUE
Blackburn, J.
This matter is before me on defendant Disckstein Shapiro, LLP’s Motion to
Transfer Venue [#14]1 filed July 29, 2013. The plaintiff filed a response [#16], and the
defendant filed a reply [#17]. I deny the motion.
I. JURISDICTION
This is an action for declaratory judgment arising under C.R.C.P. 57 and §13-51101, C.R.S. This court has jurisdiction under 28 U.S.C. §1332 (diversity).
II. STANDARD OF REVIEW
Title 28 U.S.C. § 1404(a) allows a transfer of venue when, “[f]or the convenience
of the 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.” Because

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“[#14]” is an example of the convention I use to identify the docket number assigned to a
specific paper by the court’s case management and electronic case filing system (CM/ECF). I use this
convention throughout this order.

the current venue is proper, the burden of demonstrating increased convenience and
the furtherance of justice through a transfer of venue rests squarely on the moving
party. Chrysler Credit Corp. v. Country Chrysler, Inc., 928 F.2d 1509, 1515 (10th
Cir. 1991) (“The party moving to transfer a case pursuant to § 1404(a) bears the burden
of establishing that the existing forum is inconvenient.”) (citation omitted). While
convenience is determined by “the individualized, case-by-case consideration of
convenience and fairness,” Van Dusen v. Barrack, 376 U.S. 612, 622 (1964), district
courts weigh several factors in determining whether transfer is appropriate. The court
considers:
the plaintiff's choice of forum; the accessibility of witnesses and
other sources of proof, including the availability of compulsory process to
insure attendance of witnesses; the cost of making the necessary proof;
questions as to the enforceability of a judgment if one is obtained; relative
advantages and obstacles to a fair trial; difficulties that may arise from
congested dockets; the possibility of the existence of questions arising in
the area of conflict of laws; the advantage of having a local court
determine questions of local law; and, all other considerations of a
practical nature that make a trial easy, expeditious and economical.
Chrysler at 1516 (quoting Texas Gulf Sulphur Co. v. Ritter, 371 F.2d 145, 147 (10th
Cir.1967)).

No single factor is determinative, and none is preponderant; instead, there

is considerable discretion regarding the weight afforded to each factor. Id.
III. FACTS
Plaintiff David Stark is the principal shareholder, officer, and director of both
plaintiff EverSealed Windows, Inc. (ESW) and plaintiff Electronic Packaging Solutions,
Inc. (EPS). Complaint [#35], ¶¶ 2-5. Mr. Stark is a citizen and full-time resident of
Jefferson County, Colorado. While EPS is a Colorado corporation and ESW is a
Delaware Corporation, both entities maintain their principal place of business in

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Jefferson County, Colorado. Defendant Dickstein Shapiro, LLP is a law firm based in
Washington, D.C.
Mr. Stark, on behalf of EPS, entered into fee agreements for legal services with
Dickstein Shapiro on January 12, 2005, May 25, 2005, and February 2, 2006. In the
agreements, Dickstein Shapiro agreed to advise and represent EPS regarding a
licensing program including “review of (EPS’s) patent portfolio, developing a licensing
strategy, identifying and selecting potential licensees, drafting and negotiating licensing
agreements, and drafting and negotiating agreements with an investor.” Complaint
[#35], ¶ 10. The plaintiffs were to be billed on both a value-added and hourly basis.
Dickstein Shapiro claims it is entitled to a value-added fee of three million dollars if
certain contingencies are met. The plaintiffs and Dickstein Shapiro disagree on the
amount of hourly fees billed, paid, and owed, but they agree that no fees have been
paid since March 2007. After Dickstein Shapiro threatened to sue the plaintiffs for
outstanding legal fees, the plaintiffs filed this complaint claiming: (1) Dickstein Shapiro is
estopped from asserting any claim to Hourly Fees based on representations from an
authorized representative of Dickstein Shapiro; (2) The fee claims are barred by
applicable statutes of limitation and by laches; (3) The fees claimed by Dickstein
Shapiro are patently unreasonable and excessive; (4) Conditions in the fee agreements
preclude any fees until EPS generates revenue from licensing or sale of its assets; (5)
The fee agreements also preclude payment from ESW or Stark because Dickstein
Shapiro did not have a contractual relationship with them; and (6) The value added
contingent fees are void ab initio under Colorado law.
The plaintiffs filed their complaint in the District Court. Jefferson County,
Colorado, on June 3, 2013. Dickstein Shapiro filed a Notice of Removal [#1] on June
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21, 2013, and removed the case to this court. On July 29, 2013, Dickstein Shapiro filed
an Answer, Counterclaim, and Jury Demand [#13] and its Motion to Transfer Venue
under 28 U.S.C. §1404 [#14].
IV. ANALYSIS
§1404(a) Factors
A. Plaintiff’s Choice of Forum:
The plaintiff’s choice of forum weighs against transfer. The Tenth Circuit gives
great deference to a plaintiff’s choice of forum,2 and “‘[u]nless the balance is strongly in
favor of the movant the plaintiff's choice of forum should rarely be disturbed.’” Scheidt
v. Klein, 956 F.2d 963, 965 (10th Cir. 1992) (quoting William A. Smith Contracting
Co. v. Travelers Indem. Co., 467 F.2d 662, 664 (10th Cir.1972)); see also Deer Creek
Dev., LLC v. Kim, No. 06-CV-00083-LTB-MJW, 2006 WL 1154213, at *2 (D. Colo. May
1, 2006) (“[plaintiff’s] choice of venue carries considerable weight”); Employers Mut.
Cas. Co. v. Bartile Roofs, Inc., 618 F.3d 1153, 1167 (10th Cir. 2010) (“The plaintiff's
choice of forum weighs against transfer.”). While the plaintiff’s choice of forum is not
the deciding factor, it is significant in the court’s analysis. Dickstein Shapiro argues that
the plaintiff’s choice of forum should carry little weight because the claims involve fees
owed to a law firm located in Washington D.C., for services rendered in Washington
D.C. Given these circumstances, Dickstein Shapiro contends transfer will further the

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The court notes that the plaintiffs’ original forum of choice was the District Court of
Jefferson County, Colorado, and the current forum is the result of defendant’s motion to remove
to federal district court. While the current forum was not originally selected by the plaintiff,
because the defendant does not address this issue and plaintiffs favor the current forum, it shall
be considered the plaintiffs’ forum of choice. See Early Success Acad., Inc. v. Nat’l
Convenience Stores, Inc., No. CIVA06CV00342-WDMCBS, 2007 WL 437638, at *3 n.2 (D.
Colo. Feb. 5, 2007).

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convenience of witnesses and the interest of justice. While the majority of work
performed by Dickstein Shapiro occurred in Washington D.C., it is the fee agreement,
not the work, that is disputed. Both the claims and the counterclaims focus on the
validity and enforcement of the fee agreements. The fee agreements were executed in
Colorado, entered into by Colorado residents, and binding on Colorado residents.
Thus, the facts giving rise to the lawsuit have a material relation and significant
connection to the plaintiff’s chosen forum. See Potter Voice Techs. LLC v. Apple,
Inc., No. 12-CV-01096-REB-CBS, 2013 WL 1333483, at *3 (D. Colo. Mar. 29, 2013)
(transfer of venue is appropriate when “the facts giving rise to the lawsuit have no
material relation or significant connection to the plaintiff's chosen forum.”(citation
omitted)). The underlying facts in this case have a substantial connection to Colorado
and do not support a transfer of venue.
B. Accessibility of Witnesses and other Proof:
The accessibility of witnesses and other proof weighs against transfer. While
“[t]he convenience of witnesses is the most important factor in deciding a motion under
§ 1404(a),” Employers Mut., 618 F.3d at 1169, the movant bears the burden of
establishing inconvenience by identifying: (1) the witness and their location; (2) The
materiality of their testimony; and (3) The witness’ unwillingness to come to trial and that
a deposition is unsatisfactory. Id. Predictably, both parties argue their preferred venue
is more convenient for themselves and their employees; however, shifting
inconvenience from one party to another is not a valid basis for transfer. Id. at 1167.
Additionally, the convenience of non-party witnesses is afforded more weight than the
convenience of parties and their employees. See Potter Voice Techs., 2013 WL

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1333483 at *2 (“[T]he convenience of non-party witnesses weighs more heavily than the
convenience of parties and their employees.”). Dickstein Shapiro addresses the first
two elements for establishing inconvenience as related to three, potential, non-party
witnesses by naming the witnesses, giving their current location, and describing the
materiality of their testimony. Defendant’s reply [#17]. Dickstein Shapiro does not
discuss whether the non-party witnesses are willing to come to trial in Colorado or why
deposition testimony is unsatisfactory. Thus, Dickstein Shapiro fails to meet its burden
of establishing that the inconvenience for potential non-party witnesses weighs
significantly in favor of transfer.
C. Cost of Making Necessary Proof:
The cost of making necessary proof is a neutral factor. The proof in this case is
testimonial and documentary. Litigation in either venue will require travel and document
production. Neither venue significantly reduces the overall cost of litigation. Concerning
document production, the issues of this case revolve around three, two-page fee
agreements. Both sides argue that providing documentary evidence will be cheaper in
their forum of choice. The court remains unconvinced. Any disputed or supporting
documents may be transported physically or electronically without difficulty to either
venue. Thus, the cost of making the necessary proof does not weight in favor of either
venue.
D. Advantages of a Local Court:
The advantage of a local court is a neutral factor. The claims and counterclaims
focus on attorney fee agreements and contract law. Because the rules governing
attorney fee agreements and contract law are relatively simple and similar in both
venues, there is no advantage to having a local court decide issues of local law. See
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Scheidt, 956 F.2d at 966 (relative simplicity of legal issues involved in contract claims
does not support venue transfer).
E. Remaining Factors:
The other factors considered in a §1404 analysis are not at issue or are neutral.
While both parties argue their choice of venue will enhance enforcement of a
judgement, the court finds this factor is neutral. Plaintiffs are not seeking a monetary
judgement, and a judgment from either venue may be transferred for purposes of
collection.
V. CONCLUSION & ORDER
On balance, the relevant factors weigh against transfer of this case. Because
Dickstein Shapiro fails to demonstrate that transfer significantly will further the
convenience of the parties and witnesses and will be in the interest of justice, the
plaintiff’s choice of venue should not be disturbed.
THEREFORE IT IS ORDERED that defendant Dickstein Shapiro LLP’s Motion
To Transfer Venue [#14] filed July 29, 2013, IS DENIED.
Dated March 6, 2014, at Denver, Colorado.
BY THE COURT:

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