United States of America v. Energy Solutions, Inc. et al
MEMORANDUM. Signed by Judge Gregory M. Sleet on 12/21/2016. (mdb)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF DELAWARE
UNITED STATES OF AMERICA,
ENERGYSOLUTIONS, INC., ROCKWELL
HOLDCO, INC., ANDREWS COUNTY
HOLDINGS, INC., and WASTE CONTROL
Civil Action No. 16-cv-01056-GMS
On November 16, 2016, the United States initiated this lawsuit against EnergySolutions,
Inc. ("ES"), Rockwell Holdco, Inc., Andrews County Holdings, Inc., and Waste Control
Specialists LLC ("WCS"). (D.I. 1.) This action arises out of a merger agreement between
Defendants, ES and WCS, consummated on November 18, 2015. Id.
The United States seeks
to permanently enjoin the planned acquisition ofWCS by ES, and have the acquisition adjudged
a violation of Section 7 of the· Clayton Act, 15 U.S.C. § 18. Id.
(b)). Presently before
the court is the Defendants' Motion to Transfer Venue, pursuant to 28 U.S.C. § 1404(a). (D.I. 17).
For the reasons that follow, the court will deny the Defendants' motion.
Rockwell Holdco, Inc. is the corporate parent of ES, and both are organized under the laws
of Delaware. (D.I. 1 if 81); (D.I. 28 at 3). ES maintains its corporate headquarters in Salt Lake
City, Utah. (D.I. 28 at 3). WCS is a wholly owned subsidiary of Andrews County Holdings and
both companies are organized under the law of Delaware, WCS being a Delaware Limited Liability
Company and Andrews County Holdings being a Delaware Corporation. Id.; (D.I. 1if81). WCS
has its corporate headquarters in Dallas, Texas. (D.I. 28 at 3).
STANDARD OF REVIEW
"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 or to
any district or division to which all parties have consented." 28 U.S.C. § 1404(a). Under this
provision, a district court may exercise "broad discretion to determine, on an individualized, caseby-case basis, whether convenience and fairness considerations weigh in favor of transfer."
Jumara v. State Farm Ins. Co., 55 F.3d 873, 883 (3d Cir. 1995). The purpose of transfer is to
protect litigants, witnesses, and the public from the unnecessary waste of time; energy, and money.
See Virgin Wireless, Inc. v. Virgin Enters. Ltd., 201 F. Supp. 2d. 294, 299 (D. Del. 2002) (citing
Van Dusen v. Barrack, 376 U.S. 612, 616 (1964)).
The court undertakes a two-step inquiry in order to resolve a motion to transfer. "The court
first asks whether the action could have been brought in the proposed transferee venue and then
determines whether transfer to a different forum would best serve the interests of justice and
convenience." Smart Audio Techs., L.L.C. v. Apple, Inc., 910 F. Supp: 2d 718, 724 (D. Del. 2012).
At each step, the defendant has the burden to demonstrate that a transfer is appropriate, Jumara,
55 F.3d at 879-80, and "unless the balance of convenience of the parties is strongly in favor of the
defendant, the plaintiffs choice of forum should prevail." Shutte v. Armco Steel Corp., 431 F.2d
22, 25 (3d Cir. 1970).
A. The Propriety of the Transferee Forum
The parties do not dispute that the present action could have been brought in the Western
District of Texas. Accordingly, the court proceeds to the second step of the transfer analysis.
B. The Jumara Analysis
The court next must consider whether transfer to the Western District of Texas would serve
the interests of convenience and justice. In the Third Circuit, this requires an individualized
analysis, accounting for the various private and public interests guarded by § 1404(a). See Jumara,
55 F.3d at 879. Rather than applying any "definitive formula," the court considers each of these
"Jumara factors" on a case-by-case basis. See id. The private interests may include:
plaintiffs forum preference as manifested in the original choice; the
defendant's preference; whether the claim arose elsewhere; the
convenience of the parties as indicated by their relative physical and
financial condition; the convenience of the witnesses -- but only to
the extent that the witnesses may actually be unavailable for trial in
one of the fora; and the location of books and records (similarly
limited to the extent that the files could not be produced in the
Id. (citations omitted). And the public interests may include:
the enforceability of the judgment; practical considerations that
could make the trial easy, expeditious, or inexpensive; the relative
administrative difficulty in the two fora resulting from court
congestion; the local interest in deciding local controversies at
home; the public policies of the fora; and the familiarity of the trial
judge with the applicable state law in diversity cases.
Id. at 879-80 (citations omitted). Importantly, the Jumara analysis is not limited to these explicitly
enumerated factors, and no one factor is dispositive. See id. at 879.
1. Private interest factors
a. Plaintiff's forum preference
"The plaintiff's choice of a proper forum is a paramount consideration in any determination
of a transfer request, and that choice should not be lightly disturbed." Shutte, 431 F.2d at 25
(internal quotations omitted). Section 12 of the Clayton Act provides that "[a]ny suit, action, or
proceeding under the antitrust laws against
a corporation may be brought not only in the judicial
district whereof it is an inhabitant, but also in any district wherein it may be found or transacts
business." 15 U.S.C. § 22 (1973). Because of these liberal venue requirements, some courts have
found that the United States' choice of forum in antitrust cases should receive heightened respect.
See, e.g., United States v. Brown University, 772 F. Supp. 241, 242, 244 (E.D. Penn. 1991) (citing
the Second Circuit); Ferguson v. Ford Motor Co., 89 F. Supp. 45, 51(S.D.N.Y.1950), affdFord
Motor Co. v, Ryan, 182 F.2d 329, 330 (2d Cir. 1950) (''the plaintiffs privilege, conferred by statute,
of choosing the forum he selected is a factor to be considered as against the 'convenience' of the
witnesses."). As the District Court for the District of Columbia highlighted, deference to the
plaintiffs choice of forum is mitigated where the plaintiffs' chosen forum does not have ties to the
controversy and an interest in the subject matter or parties. F. T C. v. Graco Inc., No. 11-CV-0223 9
RLW, 2012 WL 3584683, at *5 (D.D.C. Jan. 26, 2012) (citing Greater Yellowstone Coal. v.
Bosworth, 180 F. Supp. 2d 124, 128 (D.D.C. 2001)).
This factor clearly weighs in favor of denying Defendants' motion to transfer. First,
deference to Plaintiff's forum choice is not mitigated here as it was in Graco. See id. The District
of Delaware does have an interest in the subject matter and the parties because the Defendants
chose to incorporate here and selected this forum as the District to litigate disputes resulting from
their merger agreement. (D.I. 1 if 81); (D.I. 28, Ex. A§§ 13.14, 13.15). Even though that forum
selection clause does not apply to the present action brought by the Government, it still ties the
parties to this District.
The court additionally acknowledges that when the plaintiff brings its claim to a venue that
is not its home forum, the plaintiffs forum preference is entitled to less weight.
See In re
Link_A_Media Devices Corp., 662 F.3d 1221, 1223 (Fed. Cir. 2011). The court notes, however,
that Link_A_Media is not binding on its decision here. This is an antitrust case-as opposed to a
patent case-and, due to the Clayton Act's liberal venue provisions, the fact that Delaware is not
the Government's home forum will not affect the weight the court gives to its forum preference.
Defendants cite case law for the proposition that it is immaterial to the analysis that the
federal government is the plaintiff in this case.
The court finds such case law easily
distinguishable, however. Defendants contend that the court in FTC v. Cephalon, Inc., 551 F.
Supp. 2d 21 (D.D.C. 2008) transferred the case to the Eastern District of Pennsylvania, despite the
fact that it was a Government-brought antitrust action, because there were no "meaningful ties" its
District. 551 F. Supp. 2d at 26. The most important reason for transfer in that case, however, was
to avoid the risk that Defendants would "be subject to inconsistent judgments arising out of the
same conduct" because identical cases were simultaneously pending before the court in the Eastern
District of Pennsylvania. Id. at 32. Here, there are no identical cases pending before the Western
District of Texas.
Defendants also cite FTC v. Graco Inc., No. l 1-cv-02239, 2012 WL 3584683 (D.D.C. Jan.
26, 2012) to support their position that "district courts routinely transfer antitrust cases to more
suitable venues under Section 1404(a) when federal agencies attempt to engage in forum
shopping." (D.I. 18 at 4). The court does not believe that the Government is trying to engage in
forum shopping because ES and WCS are incorporated in Delaware and, therefore, at home in this
District. The factual scenario in Graco is also quite different from the one presented here. See
2012 WL 3584683, at *3-4. In Graco, it is not even clear whether venue would have been proper
in the District of Columbia had the defendant not authored a stipulation agreeing to accept service
of process and subject themselves to personal jurisdiction in all United States federal districts. Id.
The court found that because they had personal jurisdiction over the defendants, both companies
were deemed to reside in that district within the meaning of the general venue statute. Id. at *4.
Accordingly, the court found that "residence of either ITW or ITWF in this district makes venue
proper here." Id. In addition to the fact that venue was really only proper given the stipulation,
one of the defendants was headquartered in Minnesota, almost all of the conduct giving rise to the
claims occurred in Minnesota, and the Asset Purchase Agreement at issue was negotiated, drafted
and executed in Minnesota. Id. at *5. Even still, the court found that only two private interest
factors and one public interest factor weighed in favor of transfer to Minnesota. Id. at *5-7. The
court thus finds Graco inapposite, and does not see it or Cephalon as reasons to transfer the present
case out of this District.
b. Defendant's forum preference
For the defendants' choice of forum to carry weight in the Jumara analysis, the defendants
must demonstrate "a legitimate and rational reason for seeking an alternative forum." Audatex N.
Am., Inc. v. Mitchell Int'!, Inc., No. 12-139-GMS, 2013 U.S. Dist. LEXIS 90847, at *3 (D. Del.
June 28, 2013) (citing Intellectual Ventures I LLC v. Altera Corp., 842 F. Supp. 2d 744, 755 (D.
Del. 2012)). Defendants prefer to litigate in the Western District of Texas for five reasons: "(1)
both the Texas Commission on Environmental Quality ("TCEQ") and the State of Texas are
directly involved in the facts of this case and have significant interest in the transaction challenged
in this law suit; (2) the Compact Waste Facility ("CWF") that is the principal asset at issue in this
lawsuit is located in the Western District of Texas and is actually owned by the state of Texas; (3)
the CWF and Federal Waste Disposal Facility ("FWF") landfills were financed by public bonds
issued by Andrews County, Texas, which owns most of the land and facilities where WCS
operates, including the Resource Conservation and Recovery Act ("RCRA") landfill; (4) critical
third-party witnesses, including Government and customer witnesses, are located in or near the
Western District of Texas; and (5) the transaction underlying this case has no meaningful nexus to
Delaware." (D.I. 31 at 1). Though the court is not persuaded by Defendants' reasons for transfer,
it finds those reasons legitimate and rational, nonetheless. Therefore, this factor weighs in favor
of granting Defendants' motion.
c. Whether claims arose elsewhere
At least one district court addressing whether a claim under the Clayton Act arose in that
district evaluated "where the corporate decisions underlying those claims were made." Graco,
2012 WL 3584683, at *5. The Graco court analyzed where the acquisition agreement was
negotiated, drafted, and executed. Id.
Plaintiffs allege that negotiations for the merger agreement took place in three different
locations: "Dallas, Texas; Short Hills, New Jersey; and Salt Lake City, Utah." (D.I. 28 at 9). Amy
Samford, the Vice President and Chief Financial Officer of WCS, stated that negotiations and
execution of the final purchase agreement occurred in Texas. (D.I. 18, Samford Deel.
if 7). The
record so far does not definitively indicate that negotiations occurred in the Western District of
Texas. The record also does not indicate where a majority of the negotiations took place. Because
the factual scenario surrounding the execution of the purchase agreement is either contested or not
entirely clear, the third private interest factor is largely neutral.
d. Convenience of the parties
In evaluating the convenience of the parties, the court considers: "(1) the parties' physical
location; (2) the associated logistical and operational costs to the parties' employees in traveling
to Delaware (as opposed to the proposed transferee district) for litigation purposes; and (3) the
relative ability of each party to bear these costs in light of its size and financial wherewithal."
Smart Audio, 910 F. Supp. 2d at 731 (citation omitted).
Defendants state that the convenience of the parties favors the Western District of Texas
because that is where WCS's principal place of business and a majority of its employees are
located. (D .I. 31 at 8). While that may be true, the court does not find "convenience of the parties"
to be synonymous with "convenient for WCS." The Antitrust Division of the Department of
Justice is located in Washington, D.C. Delaware is certainly closer to Washington, D.C. than the
Western District of Texas. Additionally, there is another Defendant in this case that has its
headquarters in Utah. (D.I. 18, Robuck Deel.
While ES's headquarters are not located in
Delaware, they are also not located in the Western: District of Texas.
Further, the Fourth
Amendment to the Purchase Agreement states that ES "shall control and direct the defense of any
Antitrust Action." (D.I. 28, Ex. 3 at if 2(a)). It is unclear to the court how transferring this action
to the Western District of Texas makes it any more convenient for ES, a company headquartered
in Utah, to direct the defense of this case.
Both Defendants are incorporated in Delaware and the Purchase Agreement reached
between the two parties designates Delaware as the venue where any disputes arising out of the
agreement should be litigated. (D.I. 28, Ex. A at§ 13.15(a)). The court agrees with Defendants
that they are not obligated by the forum selection clause to litigate actions brought by third parties
in Delaware. (D.I. 31 at 2). Nonetheless, the parties' willingness to travel to and litigate in
Delaware, made apparent by the forum selection clause, undermines any argument Defendants
could make that Delaware is an inconvenient forum. See Altera, 842 F. Supp. 2d at 7 56 (explaining
that a company cannot claim that litigation in its state of incorporation is inconvenient, absent
unique circumstances). As such, Defendants do not really try to argue that litigating this matter in
Delaware would be inconvenient for them. They admit in a footnote to their Reply that the parties
"all have the resources to litigate in either forum."· (D.I. 31 at n.3). Therefore, the fourth private
interest factor is neutral since litigating in Delaware is likely just as convenient for all the parties
as litigating in the Western District of Texas. 1
e. Convenience of witnesses
The court next considers "the convenience of the witnesses--but only to the extent that the
witnesses may actually be unavailable for trial in one of the fora." Jumara, 55 F.3d at 879. With
respect to party witnesses, or witnesses employed by a party, the court has previously explained
that they "carry no weight in the 'balance of convenience' analysis since each party is able, indeed,
obligated to procure the attendance of its own employees for trial." Ajfymetrix, Inc. v. Synteni,
Inc., 28 F. Supp. 2d 192, 203 (D. Del. 1998). Nonetheless, Plaintiffs contend that three of the four
Defendants, ES, Rockwell, and Andrews County Holdings, do not have facilities or employees in
the Western District of Texas. (D.I. 28 at 8).
As for third-party fact witnesses, 15 U.S.C. § 23 states that in any proceeding brought by
the United States "subpoenas for witnesses who are required to attend a court of the United States
The court is aware that the Federal Circuit admonished the District Court for making the defendant's state of
incorporation "a dispositive fact in the venue transfer analysis." Link_A_Media, 662 F.3d at 1224. While the court
is placing substantial weight on the fact that Defendant corporations are incorporated in Delaware, that fact alone is
not dispositive. See Altera, 842 F. Supp. 2d at 756.
in any judicial district in any case, civil or criminal, arising under the antitrust laws may run into
any other district." Accordingly, § 23 ensures that third-party witnesses will be available in either
this District or the Western District of Texas. Though third-party witnesses will be available in
either district, how convenient or inconvenient it will be for them to testify in a given forum still
weighs quite heavily in the analysis. See Affymetrix, 28 F. Supp. 2d at 203.
Plaintiffs and Defendants disagree over the location of a majority of the relevant fact
witnesses. Defendants contend that a number of witnesses they anticipate calling at trial are
located in or near the Western District of Texas. (D.I. 18 at 6). Such witnesses include employees
from the Texas Commission on Environmental Quality ("TCEQ"), who will be called to explain
the agencies role in regulating WCS's contracts and rates. Id. at 7. Additionally, Defendants
intend to call three ofES's customers and six of WCS's customers, all of which are located in or
near the Western District of Texas. (D.I. 31at7). Plaintiffs insist that many of the witnesses that
Defendants call at trial will not be from the Western District of Texas because Defendants' top
twenty customers are not headquartered there. (D.I. 28 at 13-14). Plaintiffs further state that
Defendants have customers in 36 states that rely on the merging firms for radioactive-waste
disposal services. (D.I. 28 at 10). It seems that customers from any of those 36 states could be
called to testify. Defendants have, however, explicitly identified material witnesses located in or
near the Western District of Texas.
Accordingly, this factor weighs in favor of granting
Defendants' motion, but only slightly considering the factual dispute between the parties.
f. Location of books and records
The court must also consider the location of books and records relevant to the case, but
again, only to the extent that those documents could not be produced in one of the fora. Jumara,
55 F.3d at 879. Modern technology has made this factor largely obsolete, given the ease with
which documents can be compressed and transferred electronically. See Cypress Semiconductor
Corp., Int'l Microcircuits v. Integrated Circuit Sys., Inc., No. 01-199-SLR, 2001WL1617186, at
*3 (D. Del. Nov. 28, 2001). The court recognizes the Federal Circuit's statementinLink_A_Media
that "while advances in technology may alter the weight given to these factors, it is improper to
ignore them entirely." 662 F.3d at 1224. The court does not ignore these factors, though it is
worth noting that the parties did not brief the issue. The court can assume that the location of
relevant books and records is the same location as the parties' corporate headquarters. As such,
relevant documents would be located in Dallas, Texas and Park City, Utah. Neither Dallas nor
Park City are located in the Western District of Texas. Those locations are also not within the
District of Delaware, however. Consequently, this factor does not weigh in favor of granting or
denying Defendants' motion.
2. Public interest factors
a. Practical considerations
Jumara instructs the court to assess "practical considerations that could make the trial easy,
expeditious, or inexpensive." Jumara, 55 F.3d at 879. One such factor that Defendants ask this
court to consider is the involvement of a local government agency in the conduct underlying the
case. See Downing v. Globe Direct LLC, No. CIVA 09-693, 2010 WL 2560054, at *4 (D. Del.
June 18, 2010) (holding that public factors weighed in favor of transfer to Massachusetts because
the conduct of a Massachusetts government agency was indirectly involved in the case).
Defendants argue that TCEQ's interest in this case warrants transfer to the Western District of
Texas, where TCEQ is located, because the state agency's conduct and authority are at the center
of this litigation. (D.I. 31 at 5).
The court disagrees with Defendants characterization of TCEQ's involvement in this case.
It is true that TCEQ regulates certain aspects of WCS's business. Specifically, TCEQ provides
WCS with the license required for it to operate in Texas, and the agency is charged with
establishing the low-level radioactive disposal fees by rule.
See Texas Commission on
Environmental Quality, Radioactive Waste, https ://www. tceq. texas. gov/permitting/radmat/
licensing/rw.html (last visited December 20, 2016). While executives from TCEQ may serve as
witnesses at trial, and TCEQ's pricing regulations pre- and post-merger will be useful in
formulating a defense to the Government's claims, Downing is still inapposite.
In Downing, the statutory violation at issue arose when Defendants used the names and
addresses of motor vehicle owners that it obtained from the Massachusetts Registry of Motor
Vehicles ("MRMV") to send unsolicited junk mail. 2010 WL 2560054, at *l. The defendants
maintained that such mailings were sent as part of a contract that MRMV awarded Defendants.
Id. In addition to the fact that the private information misappropriated by Defendants came from
MRMV, virtually every other Jumara factor weighed in favor of transfer to Massachusetts. Id. at
*2--4. It is not hard to distinguish Downing-a case where the defendants used the state agency's
private data in violation of the Driver Privacy Protection Act-from the current case. Here, the
state agency is only tangentially related to heart of this lawsuit: a merger agreement that violates
Section 7 of the Clayton Act, 15 U.S.C § 18. TCEQ merely exercises some regulatory authority
over one of the parties as part of a larger federal regulatory scheme. (D.I. 28 at 15-16). Such a
situation does not warrant transfer of venue to the location of the state agency as it did in Downing.
This factor thus does not weigh in favor of or against granting Defendants' motion.
b. Relative administrative difficulty
To assess the relative administrative difficulty of trying a case in one court over another,
the court looks to the disparity in court congestion between the two venues. See Jumara, 55 F.3d
at 879. The parties did not brief this issue, so the court will simply note that the difference in court
congestion between the W estem District of Texas and this District is negligible. In the District of
Delaware, the average time from filing to trial is 24.2 months, and the same metric in the Western
District of Texas is 20.4 months. See United States Courts, Federal Court Management Statistics,
September 2016, http://www.uscourts.gov/sites/default/files/data_tables/
fcms_na_distprofile0630.2016.pdf. Therefore, this factor does not weigh in favor of or against
granting Defendants' motion.
c. Local interest in deciding controversy
Lastly, the court considers "the local interest in deciding local controversies at home."
Jumara, 55 F.3d at 879. This factor is neutral here because this case concerns a "question that has
nationwide significance, the resolution of which will have the same effect if rendered by this court"
or the Western District of Texas. Cephalon, 551 F. Supp. 2d at 31. Any harm that may result from
the merger ofWCS and ES will be felt by the firms various customers, distributed throughout 36
states, that rely on the firms for their commercial low-level radioactive waste disposal needs. (D.I.
28 at 10). This factor is therefore neutral, not weighing either for or against transfer.
C. Transfer Analysis Summary
Considering the Jumara factors as a whole, the court finds the defendants have not met
their burden of demonstrating that the interests of justice and convenience strongly favor transfer.
See Shutte, 432 F.2d at 25. Indeed, only Defendants' forum preference weighed in favor of
transfer. The convenience of the witnesses only slightly favored transfer due to the factual dispute
between the parties. Defendants' forum preference is eclipsed by the Government's forum choice,
which was afforded a degree of heightened deference as an individual Jumara factor. Though
many of the factors did not weight in favor of or against transfer, the court finds Plaintiffs forum
preference, the Defendants' decision to incorporate in Delaware, and the fact that this is an antitrust case to be enough to warrant keeping the case in this District.
For the reasons stated above, the court will deny the defendants' motions to transfer to the
Western District of Texas pursuant to 28 U.S.C. § 1404(a).
Dated: December _1l, 2016
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