Trustmark National Bank v. First NBC Bank

Filing 11

ORDER denying 5 Motion to Change Venue for the reasons stated in the order. Signed by District Judge Daniel P. Jordan III on September 18, 2013. (SP)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF MISSISSIPPI
JACKSON DIVISION
TRUSTMARK NATIONAL BANK
VS.

PLAINTIFF
CIVIL ACTION NO. 3:13CV00185 DPJ-FKB

FIRST NBC BANK

DEFENDANT
ORDER

This contract dispute is before the Court on Defendant First NBC Bank’s Motion to
Dismiss for Improper Venue [5]. Plaintiff Trustmark National Bank responded [8] in opposition
to Defendant’s motion, to which Defendant replied [10]. Having considered the parties’
memoranda and submissions, along with the pertinent authorities, the Court finds that
Defendant’s motion should be denied.
I.

Facts and Procedural History
This is an action for breach of two loan-purchase contracts. Plaintiff Trustmark National

Bank (“Trustmark”)—whose principal place of business is Jackson, Mississippi—purchased a
series of loans from Defendant First NBC Bank (“First NBC”)—whose principal place of
business is New Orleans, Louisiana.
It appears that the parties executed the loans in their respective home offices in Jackson
and New Orleans. But according to Trustmark, First NBC originated and sold the two disputed
loans from its Gulfport, Mississippi, mortgage office. Resp. Opp’n Mot. Change Venue [8] Ex.
A, Miller Aff. ¶ 4. Trustmark then sold the loans to Fannie Mae, id. ¶ 5, but the two Louisiana
residences that secured the loans foreclosed. Id. ¶¶ 6, 11; Reply Mem. Supp. Def.’s Mot. to
Dismiss [10] at 3.

Fannie Mae conducted a post-foreclosure review and demanded reimbursement from
Trustmark because the loans did not comply with the Fannie Mae origination requirements.
Resp. Opp’n Mot. Change Venue [8] Ex. A, Miller Aff. ¶ 11. This demand triggered a provision
in the purchase contracts between Trustmark and First NBC by which First NBC agreed to
indemnify and reimburse Trustmark if Fannie Mae subsequently declared the loans ineligible (as
it did). Id. ¶ 7.
In this suit, Trustmark argues that First NBC never reimbursed Trustmark for the amount
Trustmark paid Fannie Mae and therefore breached the purchase contracts. Pl.’s Amd. Compl.
[4] ¶ 47. First NBC counters that Trustmark negligently serviced the loans and failed to mitigate
its damages. Reply Mem. Supp. Def.’s Mot. to Dismiss [10] at 2. First NBC now seeks
dismissal under Rule 12(b)(3), but alternatively asks the Court to transfer the matter to the
Eastern District of Louisiana. The Court has subject-matter and personal jurisdiction and is
prepared to rule.
II.

Standard of Review
On a Rule 12(b)(3) motion to dismiss, “the court views all the facts in the light most

favorable to the plaintiff.” Ambraco Inc. v. Bossclip B.V., 570 F.3d 233, 237–38 (5th Cir. 2009)
(quotation omitted). It may consider “evidence in the record beyond simply those facts alleged in
the complaint and its proper attachments.” Id. at 238 (quotation omitted).
III.

Analysis
A.

Proper Venue Under § 1391

First NBC suggests that Trustmark filed in the wrong venue, but the position receives
only passing reference in First NBC’s two memoranda. Venue is proper under 28 U.S.C.
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§ 1391(b)(2) if the case is “brought in . . . a judicial district in which a substantial part of the
events or omissions giving rise to the claim occurred, or a substantial part of the property that is
the subject of the action is situated . . . .” At best, First NBC demonstrates that the Eastern
District of Louisiana is also a proper venue, but it fails to show that this district is improper. See
28 U.S.C. § 1391(b)(2).
B.

Venue Transfer Under § 1404

The main thrust of First NBC’s motion is its claim that the Eastern District of Louisiana
is a more convenient forum necessitating transfer. Title 28 U.S.C. § 1404(a) allows a change of
venue “[f]or the convenience of parties and witnesses, in the interest of justice.” “He who seeks
the transfer must show good cause.” In re Volkswagen of Am., Inc. (“Volkswagen II”), 545 F.3d
304, 315 (5th Cir. 2008) (citation omitted).
To show good cause means that the moving party, in order to support its claim for
a transfer, must satisfy the statutory requirements and clearly demonstrate that a
transfer is “[f]or the convenience of parties and witnesses, in the interest of
justice.” Thus, when the transferee venue is not clearly more convenient than the
venue chosen by the plaintiff, the plaintiff’s choice should be respected. When
the movant demonstrates that the transferee venue is clearly more convenient,
however, it has shown good cause and the district court should therefore grant the
transfer.
Id. (quoting 28 U.S.C. § 1404(a)). Ultimately, the movant must show that the desired venue is
“clearly more convenient.” In re Radmax, Ltd., 720 F.3d 285, 288 (5th Cir. 2013).
The trial court may exercise its sound discretion when deciding whether to transfer venue.
Broussard v. State Farm Fire & Cas. Co., 523 F.3d 618, 631 (5th Cir. 2008). That decision
“turns on a number of public and private interest factors, none of which can be said to be of
dispositive weight.” Action Indus., Inc. v. U.S. Fid. & Guar. Co., 358 F.3d 337, 340 (5th Cir.

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2004) (footnote omitted). Thus, the factors are weighed, not counted. In re Radmax, 720 F.3d at
290 n.8.
1.

Private-Interest Factors

The first group of factors accounts for the parties’ interests. These are: “(1) the relative
ease of access to sources of proof; (2) the availability of compulsory process to secure the
attendance of witnesses; (3) the cost of attendance of willing witnesses; and (4) all other practical
problems that make trial of a case easy, expeditious and inexpensive.” Action Indus., 358 F.3d at
340 n.8 (citing Syndicate 420 at Lloyd’s London v. Early Am. Ins. Co., 796 F.2d 821, 831 (5th
Cir. 1986)).
The first private-interest factor—relative ease of access to sources of proof—favors
neither forum. While First NBC concedes that both parties already possess the contracts and the
pertinent loan documents, it argues baldly that its remaining physical evidence and documents
would be more accessible if the case were in the Eastern District of Louisiana. First NBC fails,
however, to describe its other evidence or how voluminous it may be. And even assuming First
NBC does have certain unidentified documents or other evidence in its possession in Louisiana,
it is only natural to conclude that Trustmark would likewise possess additional evidence in
Mississippi, especially in light of First NBC’s argument that Trustmark acted negligenctly. First
NBC has not shown that this factor is anything other than neutral.
Second, the availability of compulsory process for witnesses is likewise neutral. Neither
party has identified any potential non-party witnesses. It would be impossible, then, to decide
whether such witnesses reside within the Court’s 100 mile subpoena power. See Fed. R. Civ. P.
45(b)(2)(B). Again, First NBC has not shown that this factor is anything other than neutral.
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Third, the cost of attendance of willing witnesses weighs against transfer. First NBC
argues that the New Orleans courthouse is more convenient for its witnesses because they all live
in Louisiana, but it fails to identify those witnesses or address Trustmark’s potential witnesses.
While First NBC need not produce witness affidavits, Volkswagen II, 545 F.3d at 317 n.12, it
must at least give the Court some relevant information. See Piper Aircraft Co. v. Reyno, 454
U.S. 235, 258 (1981) (“[D]efendants must provide enough information to enable the District
Court to balance the parties’ interests.”); cf. Volkswagen II, 545 F.3d at 317 (finding this factor
weighed in favor of transfer when defendant submitted a potential witness list and affidavits from
two witnesses stating that travel would be inconvenient). Yet First NBC offers no such
information. Trustmark, on the other hand, identified two key witnesses, Richard Miller and
Linda Stephens, both of whom live and work in Jackson, Mississippi. It also indicated—without
contradiction—that its employees communicated “mostly only” with two First NBC employees
who worked in First NBC’s Mississippi mortgage office. Because the only identified witnesses
are located in this venue, this factor militates against transfer.
The fourth and final private-interest factor covers “all other practical problems that make
trial of a case easy, expeditious and inexpensive.” Action Indus., Inc., 358 F.3d at 340 n.8
(citation omitted). Trustmark points out that it has no offices or branches in Louisiana, whereas
First NBC has a mortgage office in Mississippi. But Trustmark fails to explain how this would
impact the efficiency of a trial. Next, it contends that, since its attorneys have no Louisiana
license and First NBC’s attorneys hold Mississippi licenses, transfer to Louisiana would result in
an unnecessary practical hardship. This argument fails because, under § 1404, courts consider
the parties’ and witnesses’ convenience, not the lawyers’ convenience. In re Volkswagen AG
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(“Volkswagen I”), 371 F.3d 201, 206 (5th Cir. 2004). Because the parties submitted no other
evidence of practical problems, this factor helps neither party. So the only private interest factor
that is not neutral—the willing witnesses’ costs of attendance—favors the Southern District of
Mississippi.
2.

Public-Interest Factors

The second set of factors accounts for the public’s interest in the trial’s location. These
are: “(1) the administrative difficulties flowing from court congestion; (2) the local interest in
having localized controversies decided at home; (3) the familiarity of the forum with the law that
will govern the case; and (4) the avoidance of unnecessary problems of conflict of laws [or] the
application of foreign law.” Volkswagen II, 545 F.3d at 315 (citation omitted).
The first public-interest factor considers the administrative challenges caused by judicial
congestion. This factor is “most speculative,” and raw statistics are not always reliable. In re
Genentech, Inc., 566 F.3d 1338, 1347 (Fed. Cir. 2009). Nevertheless, this Court has compared
the current venue’s median disposition time with the proposed transferee venue’s median time.
Skyhawke Techs., LLC v. DECA Int’l Corp., 3:10cv708–TSL–MTP, 2011 WL 1806511, at *7
(S.D. Miss. May 11, 2011). Under this method, the Eastern District of Louisiana takes slightly
longer to dispose cases.1 Consequently, this factor would disfavor transfer but only by the
slightest margin.
Courts must next consider whether the case is of local interest, since “[j]ury duty is a
burden that ought not to be imposed upon the people of a community which has no relation to the
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See Table C-5 U.S. District Courts—Median Time Intervals from Filing to Disposition of Civil
Cases Terminated, UNITED STATES COURTS 2, www.uscourts.gov/uscourts/Statistics/
JudicialBusiness/2012/appendices/C05Sep12.pdf.
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litigation.” Camejo v. Ocean Drilling & Exploration, 838 F.2d 1374, 1380 (5th Cir. 1988). This
factor favors transfer but requires a little more attention.
Both venues boast connections to the litigation as they are home to the two parties. Also,
accepting the arguments of First NBC’s counsel as true, the contracts were negotiated and
executed in Louisiana and were secured by property in Louisiana, where the work to be
performed in the subject contracts occurred. Def.’s Reply [10] at 8. But Trustmark counters that
it was injured in the Southern District of Mississippi. It also provides the affidavit of its Senior
Vice President Richard Miller, who oversaw the contract negotiations and Trustmark’s
performance. According to him: (1) the loans actually originated—the disputed conduct—from
First NBC’s Mississippi mortgage office; (2) Trustmark purchased the loans using funds
disbursed from Mississippi; (3) First NBC’s Mississippi mortgage office was the primary
foundation and source of Trustmark’s relationship with First NBC; (4) Trustmark serviced the
loans from Mississippi; (5) Trustmark’s side of the contract negotiations were performed in
Mississippi where it signed all documents; (6) Trustmark collected certain fees on the loans in
Mississippi; (7) Trustmark’s dealings with Fannie Mae and First NBC regarding Fannie Mae’s
demands occurred in Mississippi; and (8) Trustmark communicated with First NBC most
frequently through First NBC’s employees in its Mississippi mortgage office. Miller Aff. [8-1]
¶¶4–18.
First NBC never adequately disputes Miller’s claim that the loans originated in First
NBC’s Mississippi mortgage office. This is a significant point given that alleged departures from
Fannie Mae’s origination requirements led to its demand on Trustmark and Trustmark’s demand
on First NBC. Resp. Opp’n Mot. Change Venue [8] Ex. A, Miller Aff. ¶¶ 5, 7. At most, First
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NBC argues that the two parties negotiated and executed the loans from their homes—which
would be neutral. And in terms of establishing a local interest in Louisiana, First NBC has not
explained why the contacts it cites—such as the location of the secured property—are overly
relevant to the actual dispute. Finally, the record establishes that after the deal was struck,
Trustmark serviced the loans from Jackson, Mississippi. Id. ¶ 5. This fact gains significance
given First NBC’s avoidance arguments that “Trustmark failed to mitigate its damages and was
otherwise negligent in servicing” these loans. Def.’s Mem. [7] at 1. That alleged conduct would
have occurred in this venue and further tips the scales with respect to this public-interest factor.
The third factor—forum’s familiarity with the applicable law—disfavors transfer.
Trustmark’s assertion that Mississippi law will apply, either based on the choice of law provision
or otherwise, goes uncontested by First NBC. And a Mississippi federal court has more
experience applying Mississippi law than a Louisiana federal court does. Cf. Dale v. First Am.
Nat’l Bank, 395 F. Supp. 2d 451, 456 (S.D. Miss. 2005) (finding this factor favored transfer to a
federal court in Tennessee when Tennessee law applied). While the factor may not be
significant, it does not support transfer.
The final public-interest factor is the avoidance of difficulties with conflicts of laws or
with applying foreign law. The contracts contain choice-of-law provisions, and neither party has
argued that a conflict in laws will arise. As such, the final factor is neutral.
First NBC has failed to show that any of the private-or public-interest factors favor
transfer. Half of the factors are neutral, and the rest disfavor transfer, at least to some extent.
And while some may offer only slight weight, there is nothing to balance against them. First

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NBC therefore fails to show good cause to transfer this matter to the Eastern District of
Louisiana.
IV.

Conclusion
Venue is proper in the Southern District of Mississippi, and First NBC has failed to

clearly demonstrate that the Eastern District of Louisiana would be a more convenient place for
trial. For these reasons, First NBC’s Rule 12(b)(3) Motion to Dismiss is denied. This Court has
considered all of the parties’ arguments. Those not addressed would not change the result.
SO ORDERED AND ADJUDGED this the 18th day of September, 2013.
s/ Daniel P. Jordan III
UNITED STATES DISTRICT JUDGE

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