FRANKLIN U.S. RISING DIVIDENDS FUND et al v. AMERICAN INTERNATIONAL GROUP, INC.
Filing
24
OPINION. Signed by Magistrate Judge Joseph A. Dickson on 4/14/14. (jd, )
NOT FOR PUBLICATION
THE UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY
·--FRANKiiN-u.s. RisiNG-DiviDENDs__________]
FUND; et al.,
I Civil Action No. 2:13-05805 (JLL) (JAD
Plaintiffs,
OPINION
v.
AMERICAN INTERNATIONAL GROUP,
INC.,
I
I
I
______________________________________________________________________________________]I
Defendant.
JOSEPH A. DICKSON, U.S.M.J.
This matter comes before the Court upon motion by defendant, American Internatio al
Group, Inc., ("AIG" or "Defendant") to transfer venue to the United States District Court for
Southern District ofNew York, pursuant to 28 U.S.C. § 1404(a) (the "Motion to Transfer"). (E
No. 3). 1 Pursuant to Rule 78 ofthe Federal Rules of Civil Procedure, the Court did not hear
argument. Upon consideration of the parties' submissions, and for the reasons stated bel
Defendant's Motion to Transfer is GRANTED. This case shall be transferred to the United St
District Court for the Southern District ofNew York.
1
Defendant's Motion to Transfer, (ECF No.3), also sought to stay the response to the Complaint, which this Co
granted on November 22, 2013, by way of Letter Order. (See ECF No. 12).
e
I. INTRODUCTION.
There can be no doubt that this matter is venued here, in New Jersey, because of
unrelated case decided by the Court of Appeals for the Second Circuit. It is therefore necess
initially address that case, and its impact on Plaintiffs' litigation strategy, particularly their cho e
ofvenue. On June 21, 2011, the United States District Court for the Southern District ofN w
York (hereinafter the "SDNY") in In re IndyMac Mortgage-Backed Sec. Litig., denied motion o
intervene, reasoning that the repose period had expired and could not be tolled under exist
Litig., 718 F. Supp. 2d 495 (S.D.N.Y. 2010), (citing American Pipe & Const. Co. v. Utah,
U.S. 538 94 S. Ct. 756 38 L. Ed. 2d 713 (1974)). Three of the five putative plaintiffs in that c e
subsequently filed a notice of appeal as proposed intervenors to the United States Court of App
for the Second Circuit on July 20, 2011. Police & Fire Ret. S s. of Cit of Detroit v. Ind
MBS, Inc., 721 F.3d 95, 103-04 (2d Cir. 2013). Notably, Counsel for the Plaintiffs in this c e
filed an Amicus Curiae brief in support oflntervenors-Appellants, W.R. Huff Asset Managem
Co. Id. at 100.
On June 27, 2013, prior to the filing of this current action, the Second Circuit issued ts
decision in IndyMac and found that the American Pipe holding does not toll the statute of rep se
for class members' claims under the Exchange Act, (the "IndyMac decision"). 2 During
e
pendency of the appeal in the IndyMac matter, but before the Second Circuit issued its Opini n,
Plaintiffs chose to opt out of the class in a previous action involving identical facts to this mat
in December of2011. The five-year statute of repose on their claims under the Exchange Act
2
Citing Police & Fire Retirement System of Detroit v. IndyMac MBS, Inc .. 721 F.3d 95 (2d Cir. 2013).
2
d
ostensibly been tolled pursuant to judicial authority follpwing the Supreme Court's holding 'n
American Pipe but the Second Circuit had not yet rendered a decision in IndyMac, as Plainti
Attorneys were aware. 414 U.S. 538, 540,94 S. Ct. 756,760, 38 L. Ed. 2d 713 (1974). (Pis.
.,
ECF No. 11, at 8-9). The Second Circuit's IndyMac decision effectively closed the door in
e
SDNY in connection with their claims in this case. Accordingly, Plaintiffs filed here, at leas in
part, to find a more favorable forum because the Third Circuit has not directly addressed t is
specific tolling issue. Defendant now moves to transfer this matter to the SDNY, but Plaint fs
argue that a resulting injustice will occur if this case is transferred because it will subsequent!
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time-barred in the SDNY, and therefore Plaintiffs will be the only investors injured by
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Defendant and left without any recovery or remedy. (Pis. Br., ECF No. 11 at 15).
The Court in Patton Boggs LLP v. Chevron Com., recognized that while transferring
case to the SDNY could "sound the death knell for [Plaintiffs] claims ... neither the public nor
e
private interests [ofJumara] 3 require the Court to consider this issue." No. 12-901 (ES), 2012
6568526 *2 (D.N.J. Dec. 14, 2012). This Court is constrained to follow the holding in Pa
n
Boggs LLP and, upon careful consideration, cannot allow the IndyMac decision, and
consequences on Plaintiffs' chances in the SDNY, to supplant a proper analysis of the :::...;J=F-=a
factors. The Jumara analysis reveals that this case should be transferred.
II. BACKGROUND AND PROCEDURAL HISTORY.
a. The Parties
The Plaintiffs in this case are seven mutual funds with investors who are pension and retir
funds, educational, research and charitable endowments, and other institutional and indivi
3
Citation omitted.
3
al
investors. (Decl., ECF No. 11-1 at~ 4). 4 Plaintiffs were formerly members of a putative class f
investors seeking to recover damages for losses sustained as a result of, among other improprieti s,
an alleged securities fraud stemming from illegal kickbacks to insurance brokers. (Pis. Br., E F
No. 11, at 2). That class action (hereinafter the "Class Action") was pending in the SDNY,
d
ultimately settled. (Mh). Plaintiffs subsequently exercised their right to opt out of the class in 2
1
and brought the current action. (Id.).
Plaintiffs are entities associated with Franklin Resources, Inc., an investment managem t
firm that, together with its subsidiaries, operates under the name Franklin Templeton Investme
(Decl., ECF No. 5 at Ex. 5). Franklin Resources, Inc. is incorporated in Delaware,
headquartered in California. (Id.).
The Defendant is American International Group, Inc. a
corporation incorporated in Delaware with its principal place ofbusiness in New York. (Id. at x.
2,
~
44). Although not a party in this action, Franklin Advisory Services, LLC ("F AS") is n
investment adviser registered with the SEC, with its principal place ofbusiness in Fort Lee,
Jersey. (Pis. Br., ECF No. 11, at 9). As mutual funds, each Plaintiffs structural composit n
reflects management by an investment adviser, such as FAS, which has full discretion
d
authority to make investment decisions on behalf of that fund. (Mh). That discretion and autho
includes researching, reviewing, analyzing and determining which securities to purchase, an
4
The Plaintiffs are Franklin U.S. Rising Dividends Fund ("U.S. Rising Dividends Fund"), Franklin Managed T stFranklin Rising Dividends ("FMT Rising Dividends"), Franklin Value Investors Trust-Franklin Large Cap Value F d
("Large Cap Value Fund"), Franklin Templeton Variable Insurance Products Trust-Franklin Rising Divid ds
Securities Fund ("FTVIP Rising Dividends"), Templeton Funds-Templeton World Fund, Franklin Tempi
Variable Insurance products Trust-Franklin Large Cap Growth Securities Fund, and Franklin Templeton Invest
Funds-Franklin US Equity Fund, (collectively "Plaintiffs").
4
what amounts. (Id.). FAS is designated as the investment adviser with full investment discreti n
and authority for only fo~ of the seven Plaintiffs in this action. (Id.). 6
b. The Class Action and Settlement
Plaintiffs purchased AIG stock from October 28, 1999 through April 1, 2005. (Co
ECF No. 1, ~ 1). On October 14, 2004, the Attorney General for the State ofNew York file a
complaint against the brokerage firm Marsh & McLennan Companies, Inc. ("Marsh") contend·
Marsh unlawfully rigged bids and demanding "contingent commission" payments for insur
companies to steer business towards them. (.Mh
~
130-134). On or about October 15, 2004,
AIG shareholder filed a class action complaint (the "Class Action Complaint") in the SD
against AIG based upon the Attorney General's findings. (Def. Br., ECF No 3-1, at 4). The Cl s
Action Complaint, in which Plaintiffs and others joined, alleged, in short, that AIG and others
engaged in a "massive accounting and securities fraud" that forced the restatement of nearly
years of earnings as a result. (Decl., ECF No. 5 at Ex. 2, ~ 18).
Judge Deborah A. Batts ("Judge Batts") presided over the Class Action in the SDNY
r
approximately the last five years. (Def. Br., ECF No 3-1, at 8). The docket sheet from the Cl ss
Action7 yields a total of210 pages with over 700 docketed entries. (See Decl., ECF No. 5-8). In
July of 2010, the parties to the Class Action reached a settlement (the "Class Action Settlem
or the "Settlement"), which was finalized in November of2010 and approved by Judge Batts n
5
"FAS is, and at all relevant times was, the investment adviser with full investment discretion and authority or
Plaintiffs, FMT Rising Dividends, U.S. Rising Dividends Fund, FTVIP Rising Dividends, and Large Cap V ue
(collectively the 'New Jersey-Managed Funds')". (Pls. Br., ECF No. 11, at 9).
6
(Hereinafter the "New Jersey-Managed Funds")
7
Among other items, the docket sheet includes motions, document requests, and references to depositions condu ed
ofboth fact witnesses and expert witnesses. (Def. Br., ECF No. 3-1, at 6).
5
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February 2, 2012. (Decl., ECF No.5, at Ex. 4, -,r 150-152). Plaintiffs opted out ofthe Class Acf n
Settlement with AIG on December 23, 2011. (Def. Br., ECF No. 3-1, at 9). The Court then ent
an Order excluding them from the class, and Plaintiffs forfeited any right to participate in
e
Settlement. (Pls. Br., ECF No. 11, at 13-14).
c. The Current Action
Plaintiffs filed the current action in the District of New Jersey on September 30, 20 3,
asserting violations of Section 1O(b) of the Securities Exchange Act of 1934 ("Exchange Ac ').
(Compl. ECF No.1, W 815-826). Plaintiffs' choice ofvenue is based on Plaintiffs' use ofFA
their financial adviser, as FAS maintains its principal place ofbusiness is in New Jersey, altho
none of the Plaintiffs themselves, however, are actually organized under the laws ofNew Jer
or have their principal places ofbusiness there. (Pls. Br., ECF No. 11, at 8-9). 8 Plaintiffs all
e
that FAS, as an advisor, is considered "personnel necessary to actually conduct their busin ss
operations," as FAS 9 managers and analysts received and reviewed AIG's public filings with
SEC in connection with their decisions to purchase AIG stock for the New Jersey-Managed Fu
(Decl., ECF No. 11-1, at -,r-,r 8-11, 20). Plaintiffs opine that such filings were published
disseminated by AIG in New Jersey. (@. On October 31, 2013, Defendant moved to tran
this case to the SDNY and to stay its response to the Complaint. (ECF No. 3). On November
2013 this Court granted Defendant an extension to file its Answer, pending the decision rend
on this Motion to Transfer. (ECF No. 12).
8
Furthermore, only four of the Plaintiffs used F AS as their advisor.
Plaintiffs state that it was F AS who made the decisions for the New Jersey-Managed Funds to purchase
securities in reliance on AIG's apparently false and misleading statements. However, FAS lacks Article III stan
to sue directly. (Pls. Br., ECF No. 11, pg. 12, at n. 5).
9
6
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III. STANDARD OF REVIEW.
The decision whether to transfer a case is committed to the trial court's sound discreti
Worldwide, Inc. v. RAM Lodging, LLC, No. 09-2275,2010 WL 1540926, at *2 (D.N.J. April
2010). Pursuant to 28 U.S.C. § 1404(a), the Court may transfer a case to any venue where it
have been brought "[ f]or the convenience of parties and witnesses, in the interest of justice."
U.S.C. § 1404(a). "The purpose of§ 1404(a) is to avoid the waste of time, energy and money
in addition, to safeguard litigants, witnesses, and the public against avoidable inconvenience
expense." Rappoport v. Steven Spielberg, Inc., 16 F. Supp. 2d 481, 497 (D.N.J. 1998).
The three factors a court must consider when determining whether to transfer a rna er
pursuant to§ 1404(a) are: (1) the convenience ofthe parties, (2) the convenience ofthe witnes s,
and (3) the interests of justice. Id. In addition to these statutory factors, the Third Circuit
forth public and private interests that should also be considered when deciding whether to tran
an action:
The private interests have included: 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 ofbooks and records
(similarly limited to the extent that the files could not be produced in the
alternative forum).
The public interests have included: 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.
7
Johnson v. RiteAid, No. 10-2012,2011 WL2580375, at *2-3 (D.N.J. June28, 2011) (citing
Jumara v. State Farm Ins. Co., 55 F.3d 873, 879-80 (3d Cir. 1995)).
Thus, the Court must engage in a two part analysis to determine whether a motion to
transfer venue should be granted. As a threshold matter, the Court must decide whether
e
proposed transferee district has proper jurisdiction and venue, such that the case could have b n
brought in that district in the first instance. Lawrence v. Xerox Corp., 56 F. Supp. 2d 442,
0
(D.N.J. 1999). The Court must then conduct an "individualized, case-by-case consideration of
convenience and fairness" regarding which forum is most appropriate to consider the case. d.
"There is no rigid rule governing a court's determination; 'each case turns on its facts."' Id. (cit
Lacey v. Cessna Aircraft Co., 862 F.2d 38, 43 (3d Cir. 1988) (internal citations omitted)).
The Court is also mindful of the Court of Appeals' admonition against considering
e
merits of a case during the pendency of a transfer application. McDonnell Dou las Co . v. Po n,
429 F.2d 30 (3d Cir. 1970) ("Judicial economy requires that another district court should ot
burden itself with the merits of the action until it is decided that a transfer should be effected
such consideration additionally requires that the court which ultimately decides the merits of e
action should also decide the various questions which arise during the pendency of the suit inst
of considering it in two courts.")
8
IV. DISCUSSION.
a. Plaintiffs Could Have Filed This Action in the Southern District of New York.
As a preliminary consideration, the Defendant contends that Plaintiffs could have filed t is
action in the United States District Court for the Southern District ofNew York, as required by
U.S.C. § 1404(a), permitting the transfer of an action to any district "where it may have b n
brought". (Def. Br., ECF No. 3-1, at 11). 10 Plaintiffs do not challenge this point. Indeed,
e
Court finds that venue would be appropriate in the SDNY pursuant to 29 U.S.C. § 1132(e)
Accordingly, the Court now turns to whether the§ 1404(a) factors, as well as the relevant pu
and private interest factors, weigh in favor of such a transfer.
b. On Balance the
i. Practical Considerations that Could Make the Trial Eas
Inexpensive .
Prior to the filing of this action, the Class Action was litigated for many years
ultimately settled in the SDNY. The Plaintifis chose to opt out of the Settlement. 11 Thus, it wo
appear that a trial would be easier, more expeditious, and less expensive if adjudicated ther
The Class Action was pending in the SDNY for almost five years prior to the filing of this c
Over the course of that time, Judge Batts 12 has presumably become thoroughly familiar with
10
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"SDNY is a district where this action might have been brought-there is subject matter jurisdiction over the cla·
personal jurisdiction over AIG, and proper venue in the SDNY." (Def. Br., ECF No. 3-1, at 11).
11
(See Decl., ECF No. 5-8).
12
The Court notes that this action will almost certainly be assigned to Judge Batts should the matter be transferre
the SDNY. Like the District of New Jersey, the SDNY employs a screening process to ensure that nearly iden
actions are heard by the same judge. For instance, if Plaintiffs had filed this action in the SDNY, they would have
to complete and submit that District's form "Civil Cover Sheet". The Civil Cover sheet asks: "Has this action, ca
proceeding, or one essentially the same been previously filed in the SDNY at any time?'' and requires the litiga
identify the judge assigned to the previous action. United States Court for the Southern District of New York Web te,
Civil Cover Sheet Form, http://www.nysd.uscourts.gov/file/forms/civil-cover-sheet (last visited April 10, 20 4).
Plaintiffs would, therefore, have had to identify the previous SDNY Class Action on that Civil Cover Sheet and re al
9
allegations and facts of the case and accordingly, is well positioned to conduct pretrial proceedi
s
in an expeditious manner for claims that are almost identical to those at issue in that previ
s
action. See American Cyanamid Co. v. Eli Lilly & Co .. 903 F.Supp. 781, 787 (D.N.J.1995).
Plaintiffs do not argue that the litigation presented in this case involves separate fac
and legal issues to be determined by this Court, but rather that Judge Batts has never determi d
the merits of the Plaintiffs' claims as the Class Action resulted in settlement. (Pis. Br., ECF
11, at 37). To promote the just and efficient conduct of this litigation however, this Court m st
consider Judge Batts' work during pre-trial proceedings. For instance, all23 former defenda ts
filed motions to dismiss in the Class Action, and the documents filed in connection with th se
motions totaled almost four thousand pages (including briefs, declarations, and exhibits). (
Br., ECF No. 3-1, at 6). The motions were denied and the parties engaged in extensive discov
(Id.). Plaintiffs to the Class Action served numerous document requests on Defendant and n
many non-parties. (Id.). The parties conducted 97 depositions of fact and expert witnes
several of which lasted for multiple days. The parties also engaged in extensive motion pract e
concerning the issue of class certification. (Id.).
Substantial judicial resources are consumed in pre-trial proceedings and discovery, ot
only when a court makes an adjudication on the merits. Judge Batts presided over the Class Act n
for approximately the last five years, overseeing extensive discovery and considering the stren
s
and weaknesses of the Parties' claims. (Def. Br., ECF No. 3-1, at 8). See, e.g., Job Haines,
F. Supp. at 233-34 (finding that where judge in proposed transferee district was "intimat ly
Judge Batts' involvement in that case. The Court has no reason to believe that the SDNY's assignment process w ks
any differently with regard to transferred matters.
10
familiar" with the case at hand, it would be a "gross waste of judicial resources" not to transfer
e
case).
Plaintiffs admittedly opted out of the class in reliance on the prior tolling law within
Second Circuit after years of pre-trial proceedings in the SDNY. (Pis. Br., ECF No. 11, at 3).
the past nine years however, every other securities action against AIG related to the s
allegations has been filed in New York. (Def. Br. ECF No. 3-1 at 11 ). So this Court must consi
the following question: why did the Plaintiffs choose to bring this case to the District of N
Jersey, essentially starting their case over? The Plaintiffs have plainly asked this Court o
adjudicate the same claims that resulted in a settlement after five years in the SDNY, without
benefit of those five years. The Court reluctantly concludes that Plaintiffs' choice of venue in t is
case, while understandable, is a type of forum shopping.
While Plaintiffs' hesitation to file this case in the SDNY following the Second Circu 's
IndyMac decision is understandable, the Court cannot condone forum shopping at the expens
judicial resources, efficiency, and in disregard of the Jumara factors. (Def. Br. ECF No. 3-1 at
2). 13 Plaintiffs could have timely asserted their claims in the SDNY, but instead, faced with
IndyMac decision, brought their claims to New Jersey, a district which has very little, if
connection to this dispute. Plaintiffs who opt out of class action settlements bear risks relatin
their new action, including new judicial precedent that may be issued between the date of opt
out and the date of filing the new action. This action is better suited in the same forum wh
produced the Class Action Settlement and carefully considered the same issues before this Co
13
Citing 55 F.3d 873, 879-80 (3d Cir. 1995).
11
regardless of Plaintiffs' view that the resulting settlement amount was unjust. 14 This factor wei
s
in favor of a transfer.
ii. Whether the Claim Arose Elsewhere.
The inquiry in determining this factor turns on "which forum contains the center of gra
of the dispute, its events, and transactions." Park Inn Int'l, L.L.C. v. Mody Enterprises. 1
F.Supp.2d 370, 377-78 (D.N.J.2000). Here, the cause of action centers on AIG's alleged sch
to defraud investors, including Plaintiffs. (Pis. Br. ECF No. 11, at 2). Plaintiffs argue that beca e
their business is maintained by investing in, buying, and selling securities, and these decisions
made solely by their advisers in New Jersey, that New Jersey is the primary location where
e
claim arose. (DecL, ECF No. 11-1 at ,-r 19). 15 FAS, however, is not a party to this action, and
connection to New Jersey remains irrelevant to three of the seven Plaintiffs in this action, as
are not managed by FAS. (Pis. Br. ECF No. 11, at 10). Specifically, the following Plaintiffs
e
not managed by FAS: 1) Templeton Funds-Templeton World Fund; 2) Franklin Temple n
Variable Insurance products
Trust~Franklin
Large Cap Growth Securities Fund; and 3) Fr
Templeton Investment Funds-Franklin US Equity Fund. (Id. at 9). Plaintiffs' argument that
claims arose in New Jersey because FAS, a non-party to this action, received and relied u
n
AIG's alleged misrepresentations in New Jersey, which affected some of the Plaintiffs, is ot
persuasive. Plaintiffs do not delineate what connection, if any, the claims of the three ot er
14
Plaintiffs state that the Settlement amount would not provide sufficient recovery for their claims, stating "[u]
the [S]ettlement's allocation formula, the net settlement distribution the [Plaintiffs] would have received bas
Class counsel's estimated net recovery (after deduction of fees and expenses) of $0.38 per damaged share would
been less than $1.9 million (against $60 million in losses) on an aggregate basis". (Pls. Br., ECF No. 11, at 13).
15 Plaintiffs admit that three of the funds in this action are managed in the Bahamas and California rather than Ne
Jersey. (Pl. Br., ECF No. 11, pg. 10, n. 4).
12
Plaintiffs have to New Jersey. Rather, Plaintiffs rely as a cohesive unit on FAS as their connecti n
to New Jersey and as a basis to deny transfer.
Plaintiffs also argue that New York is not the "center of gravity" for this dispute, as A
failed to engage in "localized wrongdoing". (Pis. Br. ECF No. 11, at 29). Plaintiffs argue that
SDNY, therefore, has no greater connection to this fraud than any other district. (Id.). Accord'
to Plaintiffs, through publishing false and misleading press releases and false public filings
the SEC, AIG "lured" investors, like the Plaintiffs, to buy its stock at inflated prices. (Id. at ).
However, "when examining claims for misrepresentation on a motion to transfer ven e,
'misrepresentations and omissions are deemed to occur in the district where they were transmit
or withheld, not where they are received.' " Branthover v. Goldenson, No. 10-7677, 2011
6179552, at *3 (S.D.N.Y. Dec.12, 2011) (internal quotation omitted). Additionally, courts h e
required that the events or omissions supporting a claim be "substantial," where events
r
omissions that might only have some tangential connection with the dispute in litigation are
enough. See Cottman Transmission Sys .. Inc. v. Martino, 36 F.3d 291, 294 (3d Cir. 1994).
example, in Metro. Life Ins. Co. v. Bank One, N.A., the Court held that in a securities fraud acti
transfer to SDNY was proper where defendant's misrepresentations and omissions caus g
plaintiffs losses were made in New York, where their headquarters were located. See Metro.
Ins. Co. v. Bank One, N.A., No. 03-1882 (SDW), No. 03-2784 (SDW), 2011 WL 4464026 (D.
Sept. 25, 2012). As AIG is located in New York, its alleged misrepresentations stemmed fr m
New York. 16
Thus, the better view is that AIG's misrepresentations and omissions caus g
16
Many courts have transferred claims to districts where the alleged misrepresentations were made, and not where e
alleged misrepresentations were relied upon (either by advisers or otherwise) or received. See e.g., Prato v. S
Staging, Inc., No. 10-5198, 2011 WL 3625064, at *4 (D.N.J. Aug.l7, 2011) (rejecting argument that "[plainti s]
Fraud/Misrepresentation Claims arose in New Jersey because [that is where] he relied on Defendants'[ ] alle ed
misrepresentations regarding the financial condition of Defendant;" finding claims arose in New York); Pu ell
13
Plaintifis' losses were made in New York, AIG's forum. The Court finds that the claims arose
and the center of gravity of the Parties' dispute is, New York, and this factor weighs in favor f
transfer.
iii. The Forum Preference of the Plaintiffs and the Defendant.
The Plaintiffs argue that their choice of forum must be given great weight in a Secf n
1404(a) analysis. However, when the plaintifihas not chosen its home forum, then the plainti s
choice of forum deserves less deference. See Lony v. E.I. Dupont de Nemours & Co., 886 F
628, 633 (3d Cir.1989). See also Piper Aircraft Co. v. Reyno, 454 U.S. 235, 256, 102 S.Ct. 2 2,
70 L.Ed.2d 419 (1989); Ricoh Co. v. Honeywell, Inc., 817 F.Supp. 473, 480 (D.N.J.1993). H
Plaintiffs have selected a foreign forum. Though they choose to file suit in New Jersey, non
f
the Plaintiffs reside in New Jersey.
Plaintiffs contend that, while none of them are headquartered in New Jersey, "the locat n
of the investment adviser and middle-office provider for four of the seven Plaintiffs" is in N w
Jersey. (Pis. Br., ECF No. 11, at 3). The fact that some of the functions of the funds are conduc d
through an investment adviser located in New Jersey, does not render any of the Plaintiffs N w
Jersey entities for the purposes of this analysis. Ricoh, 817 F.Supp. at 481; American Tel. &
Co. v. MCI Communications Corp., 736 F.Supp. 1294, 1306 (D.N.J.1990) (explaining that, e n
though a corporation "maintains a considerable presence in New Jersey, it is a New Y
corporation with a principal place of business in that state" and therefore it could not be "entit d
to the greatly enhanced deference due to a plaintifi suing in its home state"). Further, w le
Graham, Inc. v. National Bank of Detroit, No. 93 Civ. 8786, 1994 WL 584550, at *4 (S.D.N.Y. Oct. 24, 1
(transferring to district where defendant "allegedly made representations or failed to disclose information.").
14
Plaintiffs' decision to bring their case to New Jersey would ordinarily be a strong bulwark agai st
transfer, here, none ofthe facts alleged in the Complaint appear to have any substantial New Jer
nexus, and such an attenuated connection to the chosen forum substantially undercuts the wei
of this choice. See Andrews v. Norfolk S. Corp., No.07-2688(JLL), 2008 WL 687255 (D.
Mar. 4, 2008). Accordingly, the Court afl:ords less deference to Plaintiffs' choice of forum beca e
none of the Plaintiffs are residents ofNew Jersey. See Fellner v. Phila. Tobo
an Coasters I
No. 05-1052, 2005 WL 2660351, at *4 (E.D.Pa. Oct. 18, 2005) ("[W]hen plaintiff brings suit i a
district other than his home state, his venue choice is entitled to less deference.").
iv. The Convenience of the Parties.
In considering the "convenience of the parties," district courts should focus on the relat e
physical and financial condition of the parties. See Jumara, 55 F.3d at 879. Neither party
s
proffered any significant argument showing a physical or financial burden to litigating in N w
Jersey. Plaintiffs argue that the Defendant has not met its burden of proving either finan
inconvenience or ''unique or unusual burden" if the action were litigated in New Jersey. (quot g
Intellectual Ventures I LLC v. Altera Corp., 842 F. Supp 2d 744, 751 (D. Del. 2012)). (Pis.
.,
ECF No. 11, at 32). While it is true that Defendant provides no evidence of a financial hurd
litigating in New Jersey, Plaintiffs have not provided the Court with evidence of the like in
litigating in New York.
The Defendant argues that because none of the Plaintiffs reside in either New Jerse
New York, both potential forums would be equally inconvenient for them. (Def. Br., ECF No
1, at 24). Additionally, the Defendant argues that because the Defendant has its principal plac of
business in New York, the SDNY provides for a more convenient forum for the Defendant,
15
d
thus, this factor weighs in favor of a transfer. @. at 24-25). The Court finds that Defend
argument that both New Jersey and New York would be equally inconvenient for them applica
Defendant has its principal place ofbusiness in New York, and the Plaintiffs only tie to New Jer
is through a financial adviser, FAS, which is not a party to this case. Accordingly, this fa
r
therefore appears to weigh slightly more in favor of a transfer to the SDNY, but is of minor v
given the proximity of the potential transferee forum.
v. The Local Interest in Deciding Local Controversies at Home.
As this Court has already determined that New York is the center of gravity of the Part
dispute, this Court :finds, on balance, that New York has a stronger local interest in the outcom
this litigation. See Ricoh Co. v. Honeywell, Inc., 817 F.Supp. at 486; Mediterranean Golf. I c.
v. Hirsh, 783 F.Supp. 835, 849 (explaining that courts have a "local interest in having locali
controversies decided at home") (quoting Lony v. E.l. DuPont de Nemours & Co., 886 F.2d 6
640 (3d Cir.1989)). Since AIG is located in New York, the conduct at issue allegedly occurr
that district, and Judge Batts has already invested substantial time and energy into this matter,
e
SDNY has a particular local interest in deciding this dispute. See LG Electronics Inc. v. First I t'l
Computer, Inc., 138 F. Supp. 2d 574, 592 (D.N.J. 2001) (finding that the local interest in decid
disputes weighed in favor of transfer to the Northern District of California where the "cente
gravity" of the lawsuit was California and where that district had familiarity with the matter). Y
v. Odom, 409 F. Supp. 2d 599, 609 (D.N.J. 2006). Therefore, this factor weighs in favor
transfer.
16
vi. The Convenience of Witnesses.
When taking into account the convenience of the witnesses in this case, this factor is
neutral value. Defendant's primary argument regarding witness convenience is that since at le t
64 of the 73 depositions in the Class Action took place in New York, it would be more conveni t
for witnesses to stay in New York. (Def. Br., ECF No. 3-1, at 25). Plaintiffs contend
t
Defendant's argument on witness convenience is frivolous and not enough to favor their mof n
to transfer. (Pis. Opp., ECF No. 11, at 34).
According to Jumara, the convenience of witnesses should be considered "only to
extent that the witnesses may actually be unavailable for trial in one of the fora." 55 F.3d at 8
Further, this Court relies on Days Inns Worldwide, Inc. v. Ram Lodging, LLC, where the Co
found that neither party was able to offer evidence suggesting that any witness would
e
unavailable for trial in either forum as opposed to merely being inconvenienced by the distan
No. 09-2275 (SDW), 2010 WL 1540926 (D.N.J. Apr. 14, 2010). From there, the Court held t
convenience of the witnesses was a neutral factor that did not weigh in either party's favor.
This Court agrees with that analysis.
Neither Plaintiffs nor the Defendant has offered evidence that any witnesses would e
unavailable to appear in either New Jersey or New York, as opposed to merely b ·
inconvenienced. Although the Defendant claims that because a majority of the depositions w e
taken in New York, it has not established that any of the witnesses would be unavailable for
in New Jersey. (Def. Br., ECF No. 3-1, at 25). Likewise, Plaintiffs have not established that
of their witnesses would be unavailable for trial in New York. Indeed the Court doubts that eit
party could make a legitimate argument on this point given the proximity of the forums in questi
17
.
Therefore, to the extent that the convenience of witnesses is determined under Jumar~ this fac r
is neutral and does not weigh in favor of either party. 55 F.3d at 879.
vii. The Location of Books and Records.
Under Jumar~ a court should consider the location ofbooks and records only to the extent
the files "could not be produced in the alternative forum." 55 F.3d at 879; See also Trile ·
Loyalty Solutions, Inc. v. Maritz, No. 04-360 (JJF), 2005 WL 441077 (D. DeL Feb. 15, 20
(holding that the location of books and records do not necessarily weigh in favor of a trans er
where the defendant contends that documents could be produced in either fora). Defend
contends that many of the original documents related to this action are in the possession of
e
Defendant and its attorneys in New York. (Def. Br., ECF No. 3-1, at 25). However, Defend
also states that although the original documents are in New York, they recognize that copies
many relevant documents could be readily available electronically. (Id.). Additionally, Plaint
make no mention in their opposition to this specific factor. Ultimately, the parties have ot
submitted any evidence that the transportation of documents to either forum would be und ly
burdensome or expensive. Similarly, given the close proximity of the SDNY and the Distric
f
New Jersey, the Court cannot conceivably find that documents would be unattainable for trans
to either venue. Therefore, the factor regarding the location of books and records is neutral.
viii. The PubUc PoUcies of the Fora.
Defendant contends that New York has a strong public policy interest in determining
action because investigations into Defendant's misconduct were New York focused. (Def.
ECF No. 3-1, at 20). Plaintiffs argues this factor is neutral. (Pis. Br., ECF No. 11, at 38).
18
e
.,
factor is more suitable to weigh in favor of the Defendant but not for the reasons offered by
e
Defendant. The Court finds that because not even one of the seven Plaintiffs is a resident ofN
Jersey, public policy favors judicial efficiency in this case.
FAS, although from New Jersey and deemed to be in charge of maintaining investm
for some of the Plaintiffs, is not a party to this suit; therefore, the only connection Plaintiffs h e
to New Jersey is that some, but not all, of them hired an outside investment adviser who resi s
here. (Def. Rep., ECF No. 14, at 1). In addition, the claims against Defendant harp back to N
York-based agencies such as the New York State Attorney General's Office, the New Y
Department of Insurance, the Unites States' Attorney General's Office of SDNY, the New Y
Regional Office of the SEC, all of which were likely encountered in pre-trial proceedings by Ju
e
Batts. (Def. Br., ECF No. 3-1, at 20). Public policy within the District of New Jersey clea y
disfavors a waste of judicial resources, which is implicated in this case when Plaintiffs ask t is
Court to litigate class claims here, when a court in the SDNY already has experience with th e
same Issues:
involving substantially the same transactions, occurrences, and issue
Considering the fact that the very same circumstances are the basis for the claims before this Co
favors transfer. Therefore, as a matter of public policy, this action is better situated in the SD
ix. The Familiarity of the Trial Judge with the Applicable State Law.
Defendant contends that although Plaintiffs do not assert any state law claims, this fa
nevertheless also supports a transfer as the claims are based, in part, on the requirements of sev
New York statutes. (Def. Br., ECF No. 3-1, at 21 ). However, as this Court has already discus
17
MP Vista, Inc. v. Motiva Enterprises LLC, 2008 WL 5411104 at *3 (D. Del. 2008).
19
Judge Batts' familiarity to the case and as Plaintiffs' claims are based in federal law, this facto is
neutral.
x. Relative Administrative Difficulty Resulting from Court Congestion.
The Court finds this action could be tried without undue administrative
resulting from court congestion in either this District or the SDNY. Defendant states that as
June 30, 2013, the median time from filing to trial for a civil action in the SDNY was 2
months; in this District it was 37.2 months. (Def. Br., ECF No. 3-1, at 16). Alternative ,
Plaintiffs submit a Declaration opining the median time from case filing to disposition w · h
conflicts with Defendant's further states that only 5.0% of pending civil cases in this Court
e
more than 3 years old, as opposed to 25.7% in Southern District. (See Rolnick Decl., ECF N .
11 at Ex. F.).
This Court is guided by Eastman v. First Data Corp., stating that where "the parties h
e
submitted conflicting data regarding comparative court congestion, and the Court finds that
factor does not tip the balance in either party's favor." No. 10-4860 WHW, 2011 WL 1327
(D.N.J. Apr. 5, 2011). Further, the Court expressed that no matter how the statistics are tweak ,
the reality is that New York and New Jersey are both busy districts, as is the case here.
Furthermore, "relative congestion of the respective courts' dockets is not a factor of
importance" on a motion to transfer. ld. (quoting Kisko v. Penn. Cent. Transp. Co .. 408 F.Su p.
984 (M.D.Pa.1976). Therefore, this factor is of neutral weight.
20
x. The Enforceability of the Judgment.
Any judgment would be enforceable in either District. Both parties concede t e
enforceability factor is neutral and the Court finds the same. (Pis. Br., ECF No. 11, at 38).
V. CONCLUSION.
Taking the foregoing findings into consideration, this Court concludes that on balance,
e
Jumara factors weigh in favor of transfer and the Defendant has therefore met its burden in
demonstrating that a transfer is appropriate under 28 U.S. C. § 1404(a). For this reason, Defend
Motion to Transfer, (ECF No. 3), is GRANTED, and this matter will be transferred to the Uni d
States District Court for the Southern District of New York. The Order implementing this decis n
shall be stayed for twenty (20) days to accommodate any appeal to the District Court.
SO ORDERED
cc:
Honorable Jose L. Linares, U.S.D.J.
21
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