SUMMIT FOOD ENTERPRISES, INC. v. CONTINENTAL CONCESSIONS SUPPLIES, INC. et al

Filing 43

OPINION AND ORDER granting 27 Motion to transfer this matter to the Eastern District of Pennsylvania ***CIVIL CASE TERMINATED. Signed by Magistrate Judge Joseph A. Dickson on 3/10/2015. (nr, )

THE UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY

·--suMMIT-Foon ENTERPRls-Es:-1Nc~---------,
l

Plaintiff,

Civil Action No.: 2:13-cv-07748-JLL-JA

v.
OPINION AND ORDER
CONTINENTAL CONCESSIONS
SUPPLIES INC. AND ADAM
GOTTLIEB, Individually, and JUST
BORN, INC.
---------------~~!~~~~!1J!~___________________________________________________J

JOSEPH A. DICKSON, U.S.M.J.
This matter comes before the Court upon the following motions: (1) the motion by Plain ff
Summit Food Enterprises, Inc., ("Summit"), to amend the Complaint, (ECF No. 24), and (2)

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motion by Defendant Just Born, Inc., ("Just Born"), to dismiss or, in the alternative stay, or tran
the instant action to the Eastern District of Pennsylvania. (Motion to Dismiss, ECF No. 27).
defendants ("CCSI") and ("Gottlieb") have also requested that in the alternative to dismissal,

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Court stay or transfer this matter to the Eastern District of Pennsylvania. (CCSI & Gottl
Response, ECF No. 33). This Court has carefully considered the written submissions of the part" s,
as well as the oral arguments presented to the Court on February 27, 2015. For the reas

s

expressed below, the Court concludes that venue is improper in this District. The Court there£
in its discretion, will transfer, rather than dismiss, this action, pursuant to 28 U.S.C. § 1406(a) o
the United States District Court for the Eastern District of Pennsylvania. 1

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The Court need not address the merits of Summit's motion to amend the Complaint, (ECF N
24), as Plaintiff's Counsel has agreed to withdraw said motion. See February 27, 2015, Oral
Argument Transcript at 17.

I.

BACKGROUND AND PROCEDURAL HISTORY
Summit brought the instant action against Defendants, CCSI and Gottlieb, individual ,

alleging tortious interference with contractual relations and intentional interference wi
prospective business advantage. (Complaint, ECF. No 1-1). Thereafter, on January 29, 2014,

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Complaint was amended by Summit to join Just Born as a Defendant. (Amended Complaint, E
No. 8). The underlying lawsuit arises out of an alleged agreement entered into by Summit
Just Born, which Summit claims authorized Summit to act as Just Born's exclusive representat e
in the movie theater concession industry. (Id. at 3).
On or about August 21, 2014, Just Born filed a motion to dismiss or, in the alternative st ,
or transfer the instant action. (Motion to Dismiss, ECF No. 27). Specifically, Just Born ar
that this Court lacks personal jurisdiction over Just Born. (Id. at 9). Just Born contends that gen
jurisdiction does not exist because "while Just Born sells products to retailers in New Jers

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Summit has not demonstrated more than such minimum contacts" and that to support the exerc e
of general jurisdiction, "a defendant must have continuous and systematic contacts with the fo
state." (Id. at 9-10). Moreover, Just Born also maintains that this Court does not have speci c
jurisdiction over it because the lawsuit does not arise from nor is related to Just Born's cond
within New Jersey. (Id. 11).
Just Born also contends that the case should be dismissed, or transferred to the East
District of Pennsylvania because New Jersey is an improper venue under 28 U.S.C. §139l(a).
at 11-12). Just Born explains that venue is improper because (1) all the defendants do not res e
in New Jersey, (2) the majority of the events giving rise to the litigation did not occur in N

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Jersey, but rather in Pennsylvania, and (3) alternative venues, such as the Eastern District f
Pennsylvania, exist in which this action could have been properly brought. (Id. at 12).
In support of the position that the Eastern District of Pennsylvania represents an appropri te

venue for this action, Just Born emphasizes that a substantial part of the events giving rise to
instant lawsuit occurred in Pennsylvania. (Id. at 21-22). For instance, Just Born contends that ts
business transactions with CCSI and Gottlieb, as well as its dealings with Summit took plac
Pennsylvania. (Id. at 21 ). Similarly, Just Born also asserts that the Eastern District of Pennsylv
is a proper forum because personal jurisdiction over all of the Defendants exists. (Id. at 23).
Lastly, Just Born argues that dismissal or transfer is appropriate under the "first to ti "
rule because the instant action arises out of the same transactions and occurrences as does ano
case, (Civil Action No. 13-cv-07313), which Just Born contends was filed earlier in the East
District of Pennsylvania. @ at 13). Specifically, Just Born asserts that both actions arise fr
the same alleged agreement between Just Born and Summit. (Id.) Just Born maintains that
Court should either dismiss, stay, or transfer the instant action because the action pending in

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Eastern District of Pennsylvania was filed on December 13, 2013, while Just Born was notjoi
as a Defendant in the instant action until January 29, 2014, when the First Amended Compla
(ECF No. 8), was filed by Summit. (Id. at 16; ECF No. 29). Based on this reasoning, Just B
argues that the Eastern District of Pennsylvania action is the first-filed action as Just Born had o
ability to contest the claim by Summit until January 29, 2014, more than a month after the East
District of Pennsylvania action was filed. (Id. at 16).
On or about September 02, 2014, Summit submitted an opposition to Just Born's moti
(Summit Opp'n, ECF No. 30). Summit argues that the District of New Jersey is an appropri e
forum for the following reasons: (1) Just Born defended a similar action brought by AICPC n

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New York, which is farther away in distance than New Jersey, without any objection to perso
jurisdiction, improper venue, or complaints of hardship, inconvenience, or prejudice, (ML at 4),
under the "first to file" rule, Summit filed the original complaint on November 18, 2013, whic
prior to the filing of the Eastern District of Pennsylvania complaint, (ML at 5), (3) CCSI
Gottlieb waived any jurisdictional and venue defenses by failing to file a pre-Answer motion r
preserving such defenses in their Answer, as well as by asserting counterclaims against Su
(Id. at 6-7), (4) this Court has personal jurisdiction over Just Born on the basis of its substant
continuous and systematic course of business activity in New Jersey, (Id. at 8), (5) New Jerse
a proper venue under 1391(c) because the Court has personal jurisdiction over CCSI, Gottlieb,
Just Born, (Id. at 14), (6) and in addition to not being the "first to file" forum, the Eastern Dis
of Pennsylvania would not afford adequate relief to the parties and is a forum non conveniens, s
Summit is located in Massachusetts and CCSI and Gottlieb are located in NY, (Id. at 20-23).
In addition, on or about September 02, 2014, Defendants CCSI and Gottlieb collectiv
filed an informal letter response to Just Born's motion to dismiss, or in the alternative, stay r
transfer the matter to the Eastern District of Pennsylvania. (CCSI & Gottlieb Response, ECF
33). In their letter dated September 02, 2014, Defendants CCSI and Gottlieb advise the Court
they have no objections to Just Born's instant motion. (ML at 1). In fact, Defendants CCSI
Gottlieb state that they "support a stay of this matter pending the outcome of the EDP A Actio
that this matter be transferred to the Eastern District of Pennsylvania and consolidated with
EDPA Action to avoid inconsistent decisions." (ML at 2). Furthermore, Defendants CCSI
Gottlieb contend that they are subject to personal jurisdiction in Pennsylvania, as provided in

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Affidavit of Adam Gottlieb, (Affidavit of Adam Gottlieb, ECF No. 28). (Id. at 1). In his affida 't,
Adam Gottlieb explains that CCSI is authorized to do business with the State of Pennsylvania,

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generated millions of dollars in revenue from business within Pennsylvania, and has e n
conducted business with Just Born, a Pennsylvania company within the past year.

(Aff.

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Gottlieb, ECF No. 28).
On February 27, 2015, the parties appeared before this Court for oral argument.

II.

LEGAL STAND ARD - Venue

28 U.S.C. § 1404(a) and 28 U.S.C. § 1406(a) are the two provisions governing venue
transfers in civil cases. § 1404(a) reads in relevant part, as follows: "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." §1406(a) provides in pertine
part: "The district court of a district in which is filed a case laying venue in the wrong division r
district shall dismiss, or if it be in the interest of justice, transfer such case to any district or
division in which it could have been brought."
Distinctions between § § 1404(a) and 1406(a) have to do with discretion, jurisdiction,
choice oflaw. Section 1404(a) transfers are discretionary determinations made for the
convenience of the parties and presuppose that the court has jurisdiction and that the case has
been brought in the correct forum. Jumara v. State Farm Ins. Co .. 55 F.3d 873, 878 (3d
Cir.1995); 17A Moore's Federal Practice, § 111.02 (Matthew Bender 3d ed.2006). Section
1406(a) comes into play where plaintiffs file suit in an improper forum. Jumara. 55 F.3d at 87
Moore's Federal Practice, supra, § 111.02. In those instances, district courts are required eith
to dismiss or transfer to a proper forum. Goldlawr, Inc. v. Heiman. 369 U.S. 463, 465-66, 82
S.Ct. 913, 8 L.Ed.2d 39 (1962) (emphasizing that federal district courts may transfer-rather

5

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than dismiss-cases that plaintiffs initially brought in an improper forum, regardless whether
they otherwise have personal jurisdiction).
III.

DISCUSSION AND ANALYSIS
A. Venue in the District of New Jersey
Although Just Born argues that the instant matter must be dismissed, stayed, or transferr

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to the Eastern District of Pennsylvania because the Court lacks personal jurisdiction over Ji ISt
Born, or in the alternative, the "first-filed" rule mandates such action by the Court, we ha e
determined that the Court need not address these issues at this time. 2 Generally, a court consid1 ps
personal jurisdiction before venue, but "'a court may reverse the normal order' whenjustificati m
exists for doing so." Stalwart Capital, LLC v. Warren St. Partners, LLC, No. CIV. 11-5249 JI '"''
2012 WL 1533637, at *3 (D.N.J. Apr. 30, 2012) (quoting Leroy v. Great W. United Corp., 4 3
U.S. 173, 180, 99 S.Ct. 2710, 61L.Ed.2d464 (1979)). Moreover, the Third Circuit has found st

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justification when the venue analysis "resolves" the case. Cumberland Truck Eauin. Co. v. Detr it
Diesel Corp., 401 F.Supp.2d 415, 419 (E.D.Pa.2005); see, e.g., J.F. Lomma. Inc. v. Stevem m

It is noteworthy, however, that the Hon. Joseph F. Leeson, Jr. of the U.S. District Court for th~
Eastern District of Pennsylvania has already determined that under the "first-filed" rule, the
Pennsylvania action was filed first on December 13, 2013. See March 06, 2015 Order and
Memorandum, Civil Action No. 13-cv-07313, at 5.

2

Moreover, consistent with this Court's ruling, District Judge Leeson also found upon a balanci g
of private and public factors in determining where venue should lay under Jumara v. State Farr
Ins. Co., 55 F.3d 873, 879 (3d Cir. 1995), that "enforceability of a judgment, access to the coui ,
local interest in deciding a local controversy, and the trial judge's familiarity with Pennsylvani
law, all favor Pennsylvania. The remaining factors are neutral. None weighs in favor of New
Jersey." Id. at 7.
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Crane Servs., Inc., Civ. No. 10-3496, 2011WL463051, at *1n.1 (D.N.J. Feb.3, 2011); Loman o
v. Black, 285 F.Supp.2d 637, 640 (E.D.Pa.2003); Leech v. First Commodity Com. of Boston, 5 3
F.Supp. 688, 689 (W.D.Pa.1982). Because, as the Court discusses below, venue in the district )f
New Jersey is improper and the case may be transferred to the Eastern District of Pennsylvan a,
the Court need not consider whether it has personal jurisdiction over Just Born. See Goldlm r.
Inc. v. Heiman, 369 U.S. 463, 466, 82 S. Ct. 913, 916, 8 L. Ed. 2d 39 (1962) (holding language )f
§ 1406 is "amply broad enough to authorize the transfer of cases ... whether the court in whic it
was filed had personal jurisdiction over the defendants or not); see also Gehling v. St. Geon

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Sch. of Med .• Ltd., 773 F.2d 539, 544 (3d Cir. 1985) ( finding "district court lacking perso al
jurisdiction can transfer a case to a district in which the case could have been brought originall ).
28 U.S.C. § 1391 is the general venue statute. Subsection (b) of the statute deals w th
venue in federal question cases, while subsection (a) deals with venue in diversity jurisdict m
actions. Because the Court has jurisdiction on the basis of complete diversity of the parties, rat er
than a federal question, §1391(a) is applicable. (Notice of Removal, ECF No. 1). §1391 a)
provides that venue is proper in a diversity action in:
(1) A judicial district where any defendant resides, if all defendants reside in the
same State, (2) a judicial district in which a substantial part of the events or
omissions giving rise to the claim occurred, or a substantial part of property that is
the subject of the action is situated, or (3) a judicial district in which any defendant
is subject to personal jurisdiction at the time the action is commenced, ifthere is no
district in which the action may otherwise be brought.
28 U.S.C. 1391(a).

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Moreover, § 139l(c) provides that ''under this chapter, a defendant that is a corporation shall e
deemed to reside in any judicial district in which it is subject to personal jurisdiction at the ti e
the action is commenced." 28 U.S.C. § 1391(c).
a.

Venue Pursuant to§ 1391(a)(l)

Upon an analysis of the record, venue cannot be established in New Jersey as to the part s
under section 1391(a)(l) because none of the defendants reside in New Jersey. Just Born i a
resident of Pennsylvania, while CCSI and Gottlieb reside in New York. (Certification of Dou

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J. Smillie, ECF No. 27-1, Affidavit of Adam Gottlieb, ECF No. 28).
b. Venue Pursuant to§ 139l(a)(2)
Moreover, although Summit argues the contrary, venue cannot be established in N w
Jersey pursuant to section 1391(a)(2). Summit, in aruging that New Jersey is an appropriate ve

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because "Summit has suffered injury in New Jersey and Just Born's contacts with New Jersey

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substantial, continuous, and systematic" is mistaken. (Br. in Opp'n, ECF No. 30 at 7). The C
notes that Summit's papers mistakenly incorporate language and assertions related to perso al
jurisdiction, rather than venue. See, Taube v. Common Goal Sys., Inc., No. CIV.A. 11-2
(SDW), 2011WL5599821, at *4 (D.N.J. Nov. 1, 2011) report and recommendation adopted,
CIV.A. 11-2380 SDW, 2011 WL 5825792 (D.N.J. Nov. 16, 2011) (noting confusion betw
"jurisdictional facts potentially sufficient to confer personal jurisdiction over a defendant with
proper venue of a civil action"). For instance, Summit contends venue is proper in New Jer
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•
because "Just Born is present in New Jersey through its substantial, continuous and systema c
course of business activity for more than 50 years ... " (Br. in Opp'n, ECF No. 30 at 14). T ~e
Third Circuit, however, has established that "[T]he test for determining venue is not the defendar 's
'contacts' with a particular district, but rather the location of those 'events or omissions giving r se
to the claim.'" Cottman Transmission Systems, Inc. v. Martino, 36 F.3d 291, 294 (3d Cir.199 );
accord Bookman v. First Am. Mktg. Coro., 459 F. App'x 157, 161 (3d Cir.2012); Eviner v. E1 v,
Civ. No. 12-2245, 2013 WL 6450284, at *3 (D.N.J. Dec. 6, 2013). As such, Just Born's conta ts
with the District of New Jersey are not relevant to the determination of venue.
Instead, pursuant to section 139l(a)(2), the inquiry before the Court is whether a substan1 al
part of the acts giving rise to the instant claim occurred in New Jersey. In making sucl a
determination in cases involving contract claims, such as the one before us, Courts should consi1 er
where the contract was negotiated, executed, and performed and where the breach occurred. Lee 11e
v. Cataldo, 574 F. Supp. 2d 471, 484 (E.D. Pa. 2008). Here, the Court agrees with Just Born t at
"this case involves a dispute centering on the existence of a contract alleged to exist between J Jst
Born and Summit which arose in Pennsylvania, and which was partially performed in
Pennsylvania through Summit's many orders for product and Just Born filling those orde1 ."
(Motion to Dismiss, ECF No. 27-3 at 22-23). Additionally, upon questioning at oral argum( tit,
Summit's counsel conceded that the alleged breach of contract did not occur in New Jersey, ut
rather "either in Pennsylvania or New York." See February 26, 2015, Oral Argument Transcr: lt,
9

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at 21. Accordingly, the Court concludes that a substantial part of the alleged conduct giving r ;e
to Summit's claims occurred in Pennsylvania, not New Jersey.
Summit also points to "the loss that Summit Food has suffered in New Jersey'' as bri lg
requisite for establishing New Jersey as a proper venue. (Br. In Opp'n, ECF No. 30 at 14). Wh le
it may be true that the alleged breach of contract has caused Summit to suffer a loss of income a td
business in New Jersey, the Court is not persuaded that this amounts to a "substantial part of 1 ie
events giving rise to the claims." As the Third Circuit stated in Cottman Transmission Svster s,
"[ e]vents or omissions that might only have some tangential connection with the dispute in
litigation are not enough." Cottman Transmission Sys., 36 F.3d at 294; see also Loeb v. B::ink nf
Am., 254 F. Supp. 2d 581, 587 (E.D. Pa. 2003) (finding impact of economic harm insufficien1 to
establish venue in district); see also Manningv. Flannery, No. CIV.A. 09-03190, 2010 WL 552 5,
at *12 (E.D. Pa. Jan. 6, 2010) (holding plaintiffs allegation of economic harm as a result of tis
inability to obtain new employment in the Eastern District falls short of the substantia ty
requirements of§ 1391(a)(2)). Accordingly, the Court finds that New Jersey is not a proper ver lle
under §1391(a)(2).

c. Venue Pursuant to§ 139l(a)(3)
Having determined that pursuant to§ 1391(a)(l) and (2), New Jersey is not a properven e,
we must finally examine§ 1391(a)(3). Section (a)(3) provides that an action may be brough1 in
"a judicial district in which any defendant is subject to personal jurisdiction at the time the act )n
10

"
is commenced, ifthere is no district in which the action may otherwise be brought." 28 U.S.C §
1391(a)(3). The plain language of this section makes it clear that in order to be applicable, th e
must be "no district in which the action may otherwise be brought." As such, the Court finds

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this section may only be utilized if no other district has personal jurisdiction over the defend
and is a proper venue.
The Court having already concluded that pursuant to§ 1391(a)(2), the Eastern Distric

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Pennsylvania is an appropriate venue because a substantial part of the alleged conduct giving
to Summit's claims occurred there, need only determine whether the Eastern District

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Pennsylvania has personal jurisdiction over the parties. If this action could have been brough in
the Eastern District of Pennsylvania then venue is not proper in the District of New Jersey un r
§ 1391(a)(3).
B. Personal Jurisdiction in the Eastern District of Pennsylvania

For the reasons that follow, this Court finds that the Eastern District of Pennsylvania
properly exercise personal jurisdiction over all the parties in the instant action. It is undispu
that all three defendants, Just Born, CCSI, and Gottlieb, have consented to the jurisdiction of e
Eastern District of Pennsylvania in their papers. See Certification of Douglas J. Smillie, ECF
27-1 at 4; see also Affidavit of Adam Gottlieb, ECF No. 28 at 1-2; see also CCSI & Gottl b
Response, ECF No. 33). Therefore, the only ·determination left is whether the Eastern Distric
Pennsylvania has personal jurisdiction over Summit, a Massachusetts corporation. The Court fi
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that Summit, by virtue of being a party in the pending Eastern District of Pennsylvania, (Ci
Action No. 13-cv-07313), is unequivocally subject to jurisdiction there. Accordingly, the East
District of Pennsylvania may properly exercise personal jurisdiction over all the parties. A a
result, because the instant action could have been brought in the Eastern District of Pennsylv

a,

the District of New Jersey is not a proper venue under the plain language of§ 1391(a)(3).

C. Transfer Pursuant to 28 U.S.C. § 1406(a)
The final inquiry before the Court is whether transfer pursuant to § 1406 is appropri te
under the facts of this case. As mentioned above, because New Jersey is an improper ven e,
section 1406(a) governs this action. Section 1406(a) states the following in pertinent part:
(a) The district court of a district in which is filed a case laying venue in the wrong
division or district shall dismiss, of if it be in the interest of justice, transfer such
case to any district or division in which it could have been brought.

Therefore, under this section, the Court may transfer the instant action to the Eastern Distric

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Pennsylvania if the action (1) "could have been brought" there, and (2) the transfer is "in

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interest of justice." As set forth above, this case could have been brought in the Eastern Dis
of Pennsylvania because personal jurisdiction exists over the parties there, and venue is pro er
there as well. As such, the Court need only determine whether such a transfer would be in
interest of justice.

Upon consideration of these interests, 3 and having found that venu

3

Although "there is no definitive formula or list of factors to consider," the Third Circuit has
identified potential factors it characterized as either private or public interests to be considered
on a motion to transfer, including private interests as follows: "(1) plaintiffs forum preference
12

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...
inappropriate in this court and, in lieu of dismissal of this claim, the Court transfers the action o
the District Court for the Eastern District of Pennsylvania.
As there are two pending actions that could potentially result in inconsistent rulings, i
in the interest of justice to transfer the instant matter to the Eastern District of Pennsylvania.
Elan Suisse Ltd. v. Christ, No. CIV A 06-3901, 2006 WL 3838237, at *4 (E.D. Pa. Dec. 29, 20
(finding presence of a related case in the transferee forum, a powerful reason to grant a change
venue). In addition, at oral argument, upon questioning, counsel for Summit was unable to pro
a reason why this action should not be transferred to the Eastern District of Pennsylvania, as e
from counsel's argument that New Jersey is a more convenient location for Summit's princi
Paul Bonfiglio to travel to than Pennsylvania. See February 26, 2015, Oral Argument Transc
at 18 (" ... for him to get from Boston to New Jersey is - - much easier than for him to get to Leh
Valley."). The Court finds this argument unpersuasive as the Eastern District of Pennsylv
Court is located only about 80 miles away from this Court. As such, if Summit is able to maint ·n

manifested in the original choice; (2) defendant's preference; (3) whether the claim arose
elsewhere; (4) the convenience of the parties as indicated by their relative physical and financi
condition; (5) 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 (6) location of books and records
(similarly limited to the extent that the files could not be produced in the alternative forum)."
Jumara v. State Farm Ins. Co., 55 F.3d 873, 879 (3d Cir.1995). Public interests to be consider
include: "(1) the enforceability of the judgment; (2) practical considerations that could make t
trial easy, expeditious or inexpensive; (3) the relative administrative difficulty in the two fora
resulting from court congestion; (4) the local interest in deciding local controversies at home; ( )
the public policies of the fora; and (6) the familiarity of the trial judge with the applicable state
law in diversity cases." Id.
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a lawsuit in the District of New Jersey, then it should be able to maintain a lawsuit in the East
District of Pennsylvania. 4 Moreover, Summit's counsel was also unable to provide the Court
any witnesses that reside in New Jersey. See February 26, 2015, Oral Argument Transcript, at
21.
In addition, at oral argument, counsel for Just Born emphasized the following:
... the genesis of the case is a letter that Just Born issued out of Pennsylvania on
May 1, 2012 that said that Summit was going to their exclusive representative in
the - in the movie theater concession field. That letter was issued out of
Pennsylvania by a Just Born employee from Just Born's headquarters in
Pennsylvania. Subsequently, Just Born sent another letter out of Pennsylvania
whereby it terminated the exclusive relationship. That letter also came out of
Pennsylvania and was sent to Mr. Bonfiglio in Massachusetts.
See February 26, 2015, Oral Argument Transcript at 19.
The Court finds Just Born's position persuasive as Pennsylvania is where the alleged contrac
issue was entered into, and also where Just Born's purported rescission took place. Accordin
this Court finds that it is in the interest of justice to transfer this matter to the Eastern Distric

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Pennsylvania.

CONCLUSION:

The Court having concluded venue is improper in New Jersey and having determined

at

this action could have been brought in the Eastern District of Pennsylvania, and that a trans£ is

4

The Court also notes that Summit's counsel conceded that producing records located in their
Massachusetts's office was not an inconvenience in this matter because Summit can easily put
such records on a computer disk. See February 26, 2015, Oral Argument Transcript at 19.
14

in the interest of justice, hereby transfers this matter to the Eastern District of Pennsylv
pursuant to 28 U.S.C. § 1406(a).

cc:

Hon. Jose L. Linares, U.S.D.J.

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