Schilling Foods, LLC v. First Data Corporation et al

Filing 35

ORDER advising that Plaintiff shall have 10 days to Respond to 13 MOTION to Change Venue : Responses due by 4/30/2018. Signed by District Judge Michael P. Mills on 4/18/2018. (lpm)

IN THE UNITED STATES DISTRICT COURT FOR THE
NORTHERN DISTRICT OF MISSISSIPPI
ABERDEEN DIVISION
SCHILLING FOODS, LLC

PLAINTIFF

VS.

CASE NO. 1:17-cv-00201-MPM-DAS

FIRST DATA CORPORATION;
FIRST DATA MERCHANT SERVICES
LLC; CITICORP PAYMENT SERVICES,
INC.; and ABC CORPORATIONS 1-10

DEFENDANTS

ORDER
Defendants have filed a motion to transfer venue, in which they rely upon a forum
selection clause in the contract between plaintiff and defendant Citicorp Payment Services, Inc.
(“CPSI”) which provides for venue in “a state or federal court of competent subject matter
jurisdiction in Shelby County, Tennessee.” In its response to defendant’s motion, plaintiff
Schilling Foods, LLC (“Schilling”) refused to admit that it had agreed to the alleged contract
between itself and CPSI, noting that defendant had merely submitted a blank copy of the contract
in support of its motion to transfer. In its reply brief, however, CPSI duly submitted the actual
contract between itself and plaintiff, which was, in fact, signed by Don V. Schilling in his
capacity as president of Schilling Foods, LLC. Plaintiff has submitted no arguments or proof
casting doubt upon the authenticity of this document, and it therefore seems highly likely that
plaintiff did, in fact, agree to litigate its dispute against CPSI in “a state or federal court of
competent subject matter jurisdiction in Shelby County, Tennessee.”
However, this court notes that, in its response to the motion to transfer venue, plaintiff
wrote that “in the event that a signed agreement is produced during the pendency of the Motion,
Plaintiff requests the Court allow it to respond further to the Defendants’ Motion.” [Plaintiff’s
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brief at 3]. While it would have been preferable for plaintiff to file an actual motion for leave to
file a sur-rebuttal brief, this court will grant plaintiff’s request and give it an opportunity to file a
sur-rebuttal brief to defendant’s motion to transfer venue.
This court notes, however, that a proposed amended complaint which plaintiff has
recently sought leave to file appears to cast doubt upon some of its arguments in opposition to
transfer. This proposed amended complaint provides in pertinent part that:
Schilling Foods executed a contract (hereinafter the “Merchant Agreement”) with
CPSI and CTS to retain their services. The Merchant Agreement has previously been
made a part of the record. [See ECF 23-1]. These Defendants, along with their affiliates,
FDC and FDMS, provided Schilling Foods with an electronic settlement program,
whereby they would collect the receivable credit card, debit card, and EBT/ Food Stamps
funds of Save-A-Lot stores owned by Schilling Foods and deposit settlement payments
into the stores’ bank accounts.
[Proposed amended complaint at 1-2, located at docket entry 30]. In its response in opposition to
the motion to transfer venue, plaintiff argued that, even assuming that it executed a forum
selection clause with defendant CPSI, the other defendants are not sufficiently related to CPSI to
allow them to enforce the terms of that clause. However, the above-quoted portion of plaintiff’s
proposed amended complaint, which described FDC and FDMS as “affiliates” of the other
defendants, appears to cast doubt upon this argument. Indeed, in its brief, plaintiff wrote that
defendant had offered “no evidence . . . to support its bare assertion that FDMS is an affiliate to
CTS Holdings, LLC,” [plaintiff’s brief at 3], but it now seems to agree that defendants are, in
fact, closely-related affiliates of one another.
In light of the foregoing, this court must wonder whether plaintiff has any good faith
argument in opposition to transfer, and it frankly seems highly likely that this case will, in fact,
be transferred to the Western District of Tennessee. Nevertheless, out of an abundance of
caution, this court will grant plaintiff the opportunity it requested to further brief this issue.

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Having said that, this court recommends that plaintiff consider simply agreeing to litigate this
matter in the Western District of Tennessee, which hardly represents a distant or onerous forum,
and which does appear to be the forum agreed to by the parties in this case.
It is therefore ordered that plaintiff has ten (10) days from the date of this order to file any
sur-rebuttal brief to defendant’s motion to transfer venue. Any such brief should be within the
proper scope of sur-rebuttal briefing, and it should not involve responses to legal arguments
made in defendant’s original briefing which plaintiff could have, but chose not to, raise in its
initial response to the motion to transfer venue.
So ordered, this the 18th day of April, 2018.
/s/ MICHAEL P. MILLS
UNITED STATES DISTRICT JUDGE
NORTHERN DISTRICT OF MISSISSIPPI

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