Battery Solutions, Inc. v. Terralpha Industrial, Inc.
ORDER denying 8 Motion to Dismiss or Transfer Venue. Signed by District Judge Victoria A. Roberts. (LVer)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN
BATTERY SOLUTIONS, INC.,
Case No: 12-10738
Honorable Victoria A. Roberts
TERRALPHA INDUSTRIAL, INC.,
ORDER DENYING MOTION TO TRANSFER VENUE
This matter is before the Court on Defendant, Terralpha Industrial Inc.’s motion to
dismiss or, in the alternative, to transfer venue (Doc. #5). Plaintiff, Battery Solutions, Inc.
(“BSI”), invokes the “First to File” rule in response to Terralpha’s motion. BSI seeks
contribution, indemnification, and damages from Defendant, based on a breach of
There are two issues before the court: (1) Should the Court grant Terralpha’s
motion to dismiss and not apply the first-to-file rule although Terralpha filed a
declaratory judgment action in Illinois almost three weeks after BSI filed this action? And
(2), should the Court grant Terralpha’s motion to transfer this action to the Northern
District of Illinois for the convenience of the parties and witnesses, in the interest of
justice, pursuant to 28 U.S.C. § 1404(a)?
The Court held a hearing on JUNE 29, 2012.
The Court DENIES Terralpha’s motion to dismiss or transfer venue.
BACKGROUND AND PROCEDURAL HISTORY
Triumvirate Environmental, Inc. (“TEI”) is not a party in this case (the “Michigan
Action”), but the corporation plays a significant role in the dispute between BSI and
Terralpha. TEI’s principal place of business is Somerville, Massachusetts, and the
company is in the environmental services business, which includes removing and
disposing of waste materials. (Doc. 10-3, at 2). On September 12, 2007, TEI contracted
with Energizer, another non-party, to dispose of batteries. Id.
BSI and TEI also provide waste removal and recycling services. BSI is a
Michigan corporation with its principal place of business in Howell, Michigan; TEI is an
Illinois corporation with its principal place of business in Naperville, Illinois. (Doc. 1). TEI
entered into a subcontract with BSI to recycle and dispose of the materials TEI received
from Energizer. Id. In July 2008, BSI and Terralpha entered into a contract; Terralpha
agreed to purchase and/or receive batteries from BSI for recycling, and BSI agreed to
pay Terralpha for the recycling of its primary lithium batteries. Id., at 2. TEI has never
contracted with Terralpha, nor has TEI ever been in contact with Terralpha via
Terralpha’s contract with BSI. (Doc. 10-3, at 3.).
The November, 2010 Massachusetts Action
In November, 2010, TEI sued BSI and Terralpha in Massachusetts (the
“Massachusetts Action”). (Doc. 5, at 6). TEI alleged: (1) BSI breached its contract with
TEI by failing to obtain TEI’s written consent regarding the disposal of Energizer
batteries by BSI subcontractor, Terralpha; (2) Terralpha disposed of Energizer batteries
improperly in China; and (3) Terralpha is liable to TEI because TEI is a third-party
beneficiary of BSI’s contract with Terralpha. (Doc. 10, at 3). BSI filed a cross-claim
against Terralpha, asserting that Terralpha failed to recycle the batteries from BSI as
promised, which caused the damages claimed by TEI in the Massachusetts Action. Id.
Terralpha filed a motion to dismiss TEI’s complaint and BSI’s cross-claim for lack
of personal jurisdiction, which the Massachusetts court initially denied, allowing TEI to
conduct discovery. Id. at 3. After discovery, Terralpha filed a renewed motion to dismiss.
Then, TEI voluntarily dismissed its claims against Terralpha, on January 13, 2012. Id. at
4. BSI says that after TEI voluntarily dismissed its claims in the Massachusetts Action,
BSI knew it would be necessary to assert its claims against Terralpha in a different
forum because its cross-claims in the Massachusetts Action would also be dismissed.
Id. at 4. BSI requested that Terralpha enter into a Stipulation of Dismissal without
prejudice and without costs at the same time it served its response to Terralpha’s
renewed motion to dismiss; however, Terralpha never responded to the request. Id. On
February 7, 2010, BSI again contacted Terralpha via e-mail, asking Terralpha to enter
into a Stipulation of Dismissal in lieu of the hearing on Terralpha’s motion to dismiss,
which had been scheduled for March 6, 2012. Terralpha did not respond to the e-mail.
Id. On March 6, 2012, the Massachusetts court held a hearing on Terralpha’s motion to
dismiss, and dismissed BSI’s cross-claims against Terralpha, without prejudice, on
March 9, 2012. Id. at 4-5.
The 2012 Michigan and Illinois Actions
On February 17, 2012, BSI sued Terralpha in this Court, alleging the same
claims as in the Massachusetts Action. On March 7, 2012, Terralpha sued BSI and TEI
in the Circuit Court of Cook County, Illinois (“The Illinois Action”), seeking a declaratory
judgment. BSI and Terralpha disagree about the events which followed the
Massachusetts court’s March 6, 2012 dismissal and which preceded the Michigan and
Illinois Actions. BSI says that after the March 6, 2012 Massachusetts hearing, its
counsel informed Terralpha’s counsel that BSI filed a complaint against Terralpha in
Michigan. Id. at 5. Further, BSI alleges that Terralpha filed its claim in Illinois on March
7, 2012 with full knowledge of the pending Michigan Action. Terralpha, on the other
hand, claims that following the March 6, 2012 hearing, BSI’s counsel informed
Terralpha’s counsel only that BSI intended to file a complaint against Terralpha, not that
one had already been filed in Michigan. (Doc. 11, at 1). Further, Terralpha notes that it
had not been served with BSI’s Michigan Complaint at the time of the Illinois filing and
claims it was under the impression that BSI had not yet filed suit. Id. at 2.
On March 19, 2012, unaware of the Illinois Action, BSI’s counsel asked
Terralpha’s counsel whether he would accept service of the complaint filed in this
action. (Doc. 10, at 5). Terralpha’s counsel did not respond to the e-mail; instead,
Terralpha served BSI with a copy of the complaint filed in the Illinois Action later that
same day. Id. On March 28, 2012, BSI served Terralpha with a copy of the Michigan
With BSI’s consent, TEI removed the Illinois Action to federal court on April 3,
2012. Id. On April 10, 2012, BSI filed a motion to dismiss the Illinois Action based on the
first-to-file rule or, in the alternative, to transfer it to this Court, which is essentially the
same motion Terralpha filed in this case. On April 17, 2012, Terralpha filed an Amended
Complaint in the Illinois Action, asserting claims of malicious prosecution against TEI
and BSI, fraud against BSI, and seeking declaratory judgments against TEI and BSI.
(Doc. 5, at 9). On June 15, 2012, the Northern District Court of Illinois dismissed
Terralpha’s claims against BSI without prejudice to proceedings in Michigan. (Doc. 39).
The Illinois Court decided that Terralpha’s claims against TEI may proceed in Illinois,
but the case is stayed pending the outcome of the Massachusetts action, which the
Court noted may result in the relief Terralpha seeks against TEI. Id.
On April 17, 2012, Terralpha filed a motion to dismiss or transfer venue.
Terralpha’s motion raises two issues: (1) whether BSI’s claims against Terralpha should
be dismissed; and (2) whether BSI’s claims against Terralpha should be transferred to
Illinois and consolidated with the Illinois Action. Because the Illinois Court has dismissed
Terralpha’s claims against BSI -- and there is no action now pending between the two -Terralpha’s motion to transfer venue is moot.
There are two separate issues to analyze in this case. First, Terralpha’s motion
to dismiss depends on whether or not the first-to-file rule is applicable. Terralpha argues
that the rule should not apply, while BSI asserts that the rule fits well within the
circumstances at hand. Next, Terralpha argues that as an alternative to dismissal,
transfer of this case to Illinois is warranted. Terralpha’s motion to transfer venue
depends on whether or not such a transfer is appropriate based the “convenience of the
parties and witnesses, in the interest of justice,” pursuant to 28 U.S.C. § 1404(a).
Pursuant to the First-to-File Rule, Terralpha’s Motion to Dismiss the
Michigan Action Should be Denied Because the Michigan Action was
the First Filed
The first-to-file rule is a “well-established doctrine that encourages comity among
federal courts.” Certified Restoration Dry Cleaning Network v Tenke Corp., 511 F.3d
535, 551-52 (6th Cir. 2007). When actions involving the same parties and the same
issues have been filed in two different courts, the first-to-file rule provides that the suit
that was filed first “should proceed to completion.” Id.
There are three pertinent issues related to the first-to-file rule in this case. First,
in order to establish if the rule should apply, the Court should look to the chronology of
the actions, the similarity of the parties, and the similarity of the issues at stake. Second,
the Court should take into account the fact that this case involves a coercive action in
Michigan and a declaratory judgment in Illinois. Finally, the Court has discretion when
applying the first-to-file rule, and in deciding whether or not to do so, the Court may look
to any special circumstances or equitable considerations that justify departure from the
rule. As described in detail below, all three issues lead to the same conclusion: the firstto-file rule should apply.
Based on The Chronology of the Actions, the Similarity of the
Parties Involved, and the Similarity of the Issues at Stake, the
First-to-File Rule Should Apply
There are three factors that courts have identified in determining whether or not
to invoke the first-to-file rule. Clear!Blue, LLC v. Clear Blue, Inc., 521 F. Supp. 2d 612
(E.D. Mich. 2007). These factors are: (1) the chronology of the actions; (2) the similarity
of the parties involved; and (3) the similarity of the issues at stake. Id. (citing Alltrade,
Inc. V. Uniweld Prods., Inc., 946 F.2d 622, 625-26 (9th Cir. 1991)).
First-to-file chronology is controlled by “the date that an original complaint is
filed.” Zide Sport Shop of Ohio, Inc. v. Ed Tobergate Associates, Inc., 16 Fed Appx.
422, 437 (6th Cir. 2001). There is no dispute that the Michigan Action was filed on
February 17, 2012, before the Illinois Action was filed on March 7, 2012. The
chronology of these actions favors applying the first-to-file rule and denying Terralpha’s
motion to dismiss.
The second and third factors regarding the similarity of the parties and issues are
contested by the parties. BSI argues that the claims asserted by Terralpha against BSI
in the Illinois Action are the “mirror image” of the claims asserted by BSI against
Terralpha in the Michigan Action. (Doc. 10, at 6). Terralpha, however, argues that the
Illinois Action is “more comprehensive,” warranting dismissal of the Michigan Action.
(Doc. 5, at 11). Terralpha admits that its declaratory judgment claim against BSI in
Illinois raises essentially the same factual issues as BSI’s claim in Michigan; however,
Terralpha says that because the Illinois Action involves TEI as a party and contains
claims for fraud and malicious prosecution, the Michigan Action should be dismissed.
See Alltrade, 946 F.2d at 628 n.13 (“[I]f the issues or parties involved in the two suits
were not the same, adherence to the first-to-file rule would be reversible error for it
would constitute a misapplication of the law”) (emphasis in the original).
BSI argues that Terralpha’s contention that the Michigan Action should be
dismissed because the Illinois Action is more comprehensive is “meritless.” (Doc. 10, at
7). First, with regard to Terralpha’s additional claims, BSI notes that Terralpha asserted
claims against BSI for fraud and malicious prosecution in an amended complaint in the
Illinois Action on April 17, 2012, after BSI filed its motion to dismiss under the first-to-file
rule. BSI argues that not only are the additional claims baseless, but that they were
merely asserted against it in an effort to somehow distinguish the Illinois Action. Further,
BSI adds that Terralpha could easily assert the additional claims in the Michigan Action
as a counterclaim. (Doc. 10, at 6 n.1).
Second, BSI argues that Terralpha’s claims against TEI in Illinois were asserted
“merely for procedural fencing in an attempt to get this action dismissed or transferred.”
(Doc. 10, at 7). BSI notes that TEI has already contested personal (specific and
general) and subject matter jurisdiction in the Illinois Action in a memorandum in
support of TEI’s motion to dismiss (Doc. 10-3). TEI makes multiple arguments as to why
the Illinois Court lacks jurisdiction, including the fact that TEI has never transacted
business in Illinois with respect to the BSI/Terralpha contract. (Doc. 10-3 at 6). TEI also
argues that its minimal use of the Illinois state court system to enforce discovery in the
Massachusetts Action does not give rise to specific jurisdiction Id. Further, TEI argues
that the Illinois court lacks subject matter jurisdiction because there is no substantial
controversy of sufficient immediacy in the Illinois Action. Id. Finally, TEI emphasizes that
it there is no basis for TEI’s inclusion in the Illinois Action based on the facts that TEI
voluntarily dismissed third party beneficiary claims it brought in Massachusetts against
Terralpha, and has no intention of filing a new lawsuit. Id. at 9.
Because TEI entered into a contract with BSI, a Michigan corporation, there is no
dispute that TEI would be subject to jurisdiction in Michigan. (Doc. 10, at 7). As such,
BSI contends that Terralpha could assert a third-party complaint against TEI as part of
the Michigan Action and avoid a jurisdictional controversy with TEI in Illinois. Id. BSI
argues that Terralpha intentionally asserted claims against TEI in Illinois, knowing that
TEI would seek to dismiss them for lack of personal jurisdiction and also knowing that
there would be no jurisdictional battle if Terralpha asserted those claims against TEI in
Michigan. Id. at 8 n.2. In essence, BSI claims that Terralpha “engaged in blatant forum
shopping,” and that such behavior should not be allowed to circumvent the first-to-file
Despite Terralpha’s argument that the Illinois Action is more comprehensive, the
Court considers the Michigan and Illinois Actions as parallel actions for purposes of
applying the first-to-file rule. Terralpha’s choice to include an additional party and
additional claims appears to be strategic posturing by Terralpha in an attempt to
distinguish the Illinois Action and obtain a favorable venue.
Coercive Actions should be given Precedence over
Declaratory Judgment Actions in a Parallel Case
In support of its argument that Terralpha engaged in “blatant forum shopping,”
BSI raises an additional issue regarding coercive actions and declaratory judgments in
parallel actions. BSI asks, “why else would a party that is defending against claims bring
a declaratory judgment claim in another jurisdiction?” (Doc. 10, at 8) (emphasis in the
original). BSI’s answer to its own question is that Terralpha “would have no reason to
initiate an action seeking declaratory relief concerning claims for which it faces potential
liability and no recovery of damages other than to prevent those claims from being
litigated in a different forum.” Id. at 9.
Courts hold that coercive actions should be given precedence over declaratory
judgment actions, even when the coercive action was filed after the declaratory
judgment action. Clear!Blue, 521 F. Supp. at 615 (emphasis added); see AmSouth
Bank v. Dale, 386 F.3d 763, 788 (6th Cir. 2004) (“Courts take a dim view of declaratory
plaintiffs who file their suits mere days or weeks before the coercive suits filed by a
‘natural plaintiff’ and who seem to have done so for the purpose of acquiring a favorable
forum.”). In effect, this means that even if Terralpha had filed its declaratory judgment
first in time, the first-to-file rule may apply to a later filed coercive action. See
Clear!Blue, 521 F. Supp. at 614 (“Courts in the Sixth Circuit have also declined to apply
the first-to-file rule when a declaratory judgment action is filed before a coercive action
involving the same parties and issues.”). Here, not only did Terralpha file a declaratory
judgment action in what appears to be an effort to select a more favorable forum, it did
so after BSI’s coercive action was filed.
There are no Special Circumstances or Equitable
Considerations that Justify Departure from the First-to-File
Under the first-to-file rule, “the court in which the first suit was filed should
generally proceed to judgment.” Zide Sports, 16 F. App’x at 437. Accordingly,
application of the rule is subject to judicial discretion “where equity so demands.” Id.
Unless a party can demonstrate “special circumstances,” courts typically apply the firstto-file rule when determining the priority of two parallel actions filed in different states.
Innovation Ventures, LLC v. Custom Nutrition Laboratories, LLC, 554 F. Supp. 2d 754,
755 (E.D. Mich. 2008) (citing Kahn v. General Motors Copr., 889 F.2d 1078, 1081 (Fed.
Cir. 1989)). Special circumstances may render the first-to-file rule unenforceable,
pursuant to specific factors that weigh against its application. These factors include
“extraordinary circumstances, inequitable conduct, bad faith, anticipatory suits, and
forum shopping.” Zide Sports, 16 F. App’x at 437. Terralpha argues that BSI engaged in
inequitable conduct in filing its Michigan Action, which should render the first-to-file rule
inapplicable. (Doc. 5, at 10). BSI, on the other hand, maintains that there are no special
circumstances that justify departure from the rule. (Doc. 10, at 7).
First, Terralpha argues that BSI filed this action prematurely because it filed the
Michigan Complaint while its cross-claim against Terralpha was still pending in
Massachusetts. (Doc. 5, at 10). Terralpha further states that BSI filed this action while
continuing to pursue jurisdiction in Massachusetts, essentially “forcing” Terralpha to
proceed to a jurisdictional hearing. Id. In response, BSI explains that it contacted
Terralpha regarding the possibility of voluntarily dismissing its cross-claims as soon as
TEI made clear that was no longer going to pursue claims against Terralpha in
Massachusetts. (Doc. 10, at 7). Terralpha did not respond, and after the Massachusetts
Court set a hearing for March 6, 2010, BSI contacted Terralpha about the possibility of
entering into a Stipulation of Dismissal without prejudice. Id. at 8. Once again, there was
no response from Terralpha. Id. BSI states that these actions exemplify not only the
good faith conduct exercised on its part, but Terralpha’s bad faith conduct in failing to
respond to BSI’s multiple attempts of communication. Id.
Terralpha attempts to explain why it did not respond to BSI’s communications in
its Reply in Support of its Motion to Dismiss or Transfer Venue (Doc. #11). Terralpha
states that “BSI’s claim that Terralpha somehow acted inequitably by not accepting
BSI’s proposed Stipulation of Dismissal without prejudice is untrue.” (Doc. 11, at 2).
Terralpha further explains that BSI’s proposal was both “without prejudice,” and “without
costs,” which Terralpha found unacceptable. Id. BSI, however, did not argue that
Terralpha’s lack of acceptance constituted bad faith conduct, rather BSI emphasized
Terralpha’s lack of any response at all on the matter.
Additionally, Terralpha asserts that BSI attempted to “hide the fact that it had filed
in Michigan from Terralpha and the Massachusetts court,” as evidenced by the fact that
BSI did not attempt to serve Terralpha with the Michigan Action for over a month after
its filing. (Doc. 5, at 10). Terralpha claims this proves that BSI filed an anticipatory suit in
bad faith in Michigan while continuing to argue over personal jurisdiction in
Massachusetts. BSI states that contrary to Terralpha’s assertion, it did not “hide the
ball,” nor did it attempt a race to the courthouse. Rather, BSI explains that at the March
6, 2012 hearing, its counsel told Terralpha’s counsel they had already filed a complaint
in Michigan. (Doc. 10, at 8). Although Terralpha argues that BSI’s counsel never
actually stated it had already filed suit at the hearing, Terralpha does admit that BSI’s
counsel at least spoke of going forward with claims in Michigan. (Doc. 11, at 2). BSI
responds by highlighting the fact that Terralpha never indicated any desire to file a
declaratory judgment action in Illinois, nor did BSI have any reason to believe such an
action was likely to occur. Id. BSI also emphasizes that if any party engaged in
inequitable conduct it is Terralpha, by clearly engaging in forum shopping, as evidenced
by the fact that Terralpha immediately filed a declaratory judgment action in Illinois the
day after learning of the Michigan Action’s existence. Id.
Finally, in support of its own good faith, Terralpha notes the fact that the Illinois
Complaint was served on BSI a week prior to BSI’s service of the Michigan Complaint
against Terralpha; however, as already mentioned, first-to-file chronology is controlled
by “the date that an original complaint is filed,” and not by the date it is served. Zide
Sports, 16 Fed Appx. at 437 (emphasis added).
In summary, there are three reasons why the Court applies the first-fo-file rule.
First, the Michigan Action was clearly filed before the Illinois Action, and despite
Terralpha’s attempt to distinguish its case in Illinois, using what appears to be strategic
forum shopping techniques, both actions are essentially the same. Second, the coercive
action in this case is given precedence over the declaratory judgment action in Illinois.
Finally, there do not appear to be any special circumstances or examples of bad faith
conduct that would justify departure from the rule. Accordingly, the Court DENIES
Terralpha’s motion to dismiss.
Terralpha Has Not Demonstrated that Transfer of this Action to
Illinois is Warranted
The second issue the Court must decide is whether to transfer the Michigan
Action to the Northern District of Illinois, which Terralpha requests in the alternative to
its motion to dismiss. On June 15, 2012, the Illinois Court dismissed Terralpha’s claims
against BSI without prejudice to proceedings in Michigan. Accordingly, Terralpha’s
motion to transfer venue is moot. Terralpha filed a motion for reconsideration in the
Illinois action. It remains pending. Even if the issue were ripe, the Court would deny
Terralpha’s motion to transfer venue.
Terralpha seeks to transfer the Michigan Action to Illinois pursuant to 28 U.S.C. §
1404, which states that “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.” The moving party bears the burden to demonstrate that
“fairness and practicality strongly favor the forum to which transfer is sought.” Thomas
v. Home Depot, U.S.A., Inc., 131 F. Supp. 2d 934, 936 (E.D. Mich. 2001) (citing Rowe
v. Chrisler Corp., 520 F. Supp. 15, 16 (E.D. Mich. 1981). The movant must make this
showing by a preponderance of the evidence. Id. (citing International Union, U.A.W. v.
Aluminum Co. of Am., 875 F. Supp. 430, 433 (N.D. Ohio 1995).
In determining whether to transfer venue is appropriate, courts consider a variety
of factors, including:
(1) the convenience of the witnesses; (2) the location of relevant
documents and relative ease of access to sources of proof; (3) the
convenience of the parties; (4) the locus of the operative facts; (5) the
availability of process to compel the attendance of unwilling witnesses; (6)
the relative means of the parties; (7) the forum’s familiarity with the
governing law; (8) the weight accorded the plaintiff’s choice of forum; and
(9) trial efficiency and the interests of justice, based on the totality of the
circumstances. [Overland, Inc. V. Taylor, 79 F. Supp. 2d 908, 811 (E.D.
As related to factor (8), “a plaintiff’s choice of forum will be given substantial deference.”
Audi AG and Volkswagon of America, Inc. v. D’Amato, 341 F. Supp. 2d 734, 749 (E.D.
Mich. 2004) (emphasis added).
The factors discussed by the parties include: the location of most of the material
events, the convenience of the parties and witnesses, and the forum’s familiarity with
the governing law.
Most of the Material Events Occurred in Michigan
First, Terralpha suggests that venue is proper in Illinois because that is where
Terralpha resides and where a “substantial part of the events or omissions giving rise to
Terralpha’s claims occurred.” (Doc. 5, at 12). However, Terralpha does not include any
specific examples of events or omissions that gave rise to its claims, except as related
to TEI, which is not a party in this action. Terralpha also does not address where BSI’s
claims against it occurred. Terralpha notes that BSI is subject to personal jurisdiction in
Illinois based on its contract with Terralpha. Terralpha contends that although TEI
contests jurisdiction in Illinois, its arguments are “without merit” because TEI used the
Illinois courts during the discovery process of the Massachusetts Action, and because
TEI transports waste materials through Illinois.
BSI responds that the “location of most of the material events occurred in
Michigan, such as communications between Terralpha and BSI and the pick up of the
primary lithium batteries at issue by Terralpha.” (Doc. 10, at 10). BSI also contends that
TEI’s arguments for lack of jurisdiction in Illinois are not meritless at all. BSI points out
that TEI asserts that “Terralpha’s declaratory judgment action . . . does not ‘arise from’
TEI’s utilization of the Illinois state court to obtain discovery for the Massachusetts
Action.” (Doc. 10-3, at 8). Additionally, TEI explains that although it has “hauled waste
through the State of Illinois, such conduct surely does not subject it to jurisdiction for all
purposes, let alone for purposes of a lawsuit involving a contract to which it is not a
Michigan is Better Suited for the Convenience of the Parties
Second, the parties argue over which venue is better suited for the convenience
of the parties and witnesses. Terralpha, an Illinois corporation, says that the
convenience of the parties and witnesses would be better served by transferring the
Michigan Action to Illinois. (Doc. 5, at 13). Terralpha explains that Illinois is its principal
place of business and that both of its officers reside in Illinois. Id. Terralpha makes an
odd point in acknowledging that although one of its witnesses, Chad Rodriguez, lives in
Florida, his previous deposition in the Massachusetts Action happened in Illinois, and he
would likely return to Illinois if deposed again. Id. Terralpha also distinguishes between
a non-party witness and employee witnesses, explaining that “it is the convenience of
non-party witnesses, rather than employee witnesses . . . that is the more important
factor and is accorded greater weight.” (Doc. 11, at 4 (citing Ghaith v. Rauschenberger,
2010 WL 431596, at *3 (E.D. Mich. Jan. 28, 2010)). Terralpha says that because Chad
Rodriguez is not a Terralpha employee, a factor that Terralpha says weighs in favor of
transfer. Still, the non-employee witness, Mr. Rodriguez, is not a resident of Illinois.
BSI, on the other hand, argues that convenience of the witnesses and parties
weighs in favor of Michigan because BSI is a Michigan corporation and all of its
witnesses reside in Michigan. (Doc. 10, at 10). BSI also points out that Chad Rodriguez
lives in Florida and states that Terralpha’s other witness, Renee Zhang, “spends most of
the year in China.” Id. Terralpha clarifies that Zhang, Terralpha’s President, is actually a
full time resident of Illinois and “only travels to China two or three times a year.” (Doc.
11, at 4). Both parties note that TEI’s witnesses reside in neither Illinois or Michigan,
making its inclusion a neutral factor the decision to transfer venue. (Doc. 10, at 10).
This Court is Familiar With the Governing Law
Finally, Terralpha states that its fraud and malicious prosecution claims arise
under Illinois law, and that the effect of such wrongful conduct on behalf of TEI and BSI
was endured in Illinois. (Doc. 5, at 13). Terralpha argues that because the parties in the
Illinois Action have already made “several appearances,” and since Terralpha has filed
a Motion for Preservation of Evidence against TEI, which the Illinois Court has
conducted a hearing and ruled on, transfer of venue is favored. (Doc. 11, at 5). In
response, BSI first notes that “Michigan law will apply to BSI’s claims against Terralpha
for breach of contract, misrepresentation, contribution and indemnification.” (Doc. 10 at
10). Further, in regard to the fraud and malicious prosecution claims asserted by
Terralpha against BSI in Illinois, BSI states “to the extent that those are viable claims
and to the extent that Illinois law applies, Terralpha has not indicated that Illinois law is
confusing or unsettled or any different than Michigan law.” Id.
Denial of Motion to Transfer is Warranted
Terralpha’s arguments for transfer boil down to having one non-party witness
who lives in Florida, but is willing to travel; a party witness who resides in Illinois, but
travels to China often; an argument that its additional claims for fraud and malicious
prosecution would be better handled in Illinois; and a conclusory statement, lacking any
factual support, that the majority of the material events occurred in Illinois. This simply is
not enough to justify transfer of venue. Also, the very claims Terralpha makes its
transfer of venue argument on are the same claims that Terralpha is likely raising for
strategic, forum shopping purposes, as suggested in first-to-file section. Further, even if
the fraud and malicious claims are valid, Terralpha has not suggested any reason for
why they could not be heard in Michigan.
Terralpha, as the moving party, bears the burden to demonstrate why transfer is
proper. In addition to meeting this burden, Terralpha must also overcome the fact that
BSI’s choice of forum is given “substantial deference.” Audi, 341 F. Supp. 2d, 734, at
739. Terralpha has not met this burden, nor has it provided significant reasons for why
its choice of forum, in Illinois, warrants transfer. See Grand Kensington, LLC v. Burger
King Corp., 81 F. Supp 2d 834, 837 (E.D. Mich. 2000) (denying motion to transfer
because “defendant has neither overcome the presumption that plaintiffs filed this case
in the proper forum, nor proffered any reason to support transferring the case.”). Most of
the material events between these parties occurred in Michigan, all of BSI’s witnesses
live in Michigan, and Michigan law is applicable to all of BSI’s claims against Terralpha
in this case.
Because the Illinois Court dismissed Terralpha’s claims against BSI in the Illinois
Action, transfer from this Court to Illinois is no longer an option, and the motion is moot.
If Terralpha’s motion for reconsideration in Illinois is granted, the Court would deny
Terralpha’s motion to transfer venue.
Terralpha’s motion to dismiss or, in the alternative, to transfer venue is DENIED.
/s/ Victoria A. Roberts
Victoria A. Roberts
United States District Judge
Dated: June 29, 2012
The undersigned certifies that a copy of this
document was served on the attorneys of
record by electronic means or U.S. Mail on
June 29, 2012.
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