SCHINDLER ELEVATOR CORPORATION v. SRC CONSTRUCTION OF WHITE PLAINS, LLC
Filing
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OPINION. Signed by Judge Stanley R. Chesler on 10/23/15. (DD, )
NOT FOR PUBLICATION
UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY
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SCHINDLER ELEVATOR
CORPORATION,
Plaintiff,
v.
SRC CONSTRUCTION OF WHITE
PLAINS, LLC a/k/a/ SRC
CONSTRUCTION,
Civil Action No. 15-5306 (SRC)
OPINION
Defendant.
CHESLER, District Judge
This matter comes before the Court upon the motion filed by Defendant SRC
Construction of White Plains, LLC (“SRC”) to dismiss this action, pursuant to Federal Rule of
Civil Procedure 12(b)(2), or, in the alternative, to transfer venue to the Southern District of New
York, pursuant to 28 U.S.C. § 1404(a), under the doctrine of forum non conveniens. Plaintiff
Schindler Elevator Corporation (“Schindler”) has opposed the motion. The Court has considered
the papers filed by the parties and proceeds to rule on the motions without oral argument,
pursuant to Federal Rule of Civil Procedure 78. For the reasons discussed below, the Court will
grant SRC’s motion to transfer the action to the Southern District of New York, and accordingly
finds that, in light of the transfer, the motion to dismiss the case for lack of personal jurisdiction
is moot.
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I.
BACKGROUND
The Complaint alleges the following facts. This breach of contract action arose from the
performance of a contract between Schindler and SRC to furnish and install escalators in the
Metropolitan Plaza building, located in White Plains, New York. (Compl. ¶ 3.) The contract was
executed on or around February 4. 2013. (Compl. ¶ 3.) SRC agreed to pay $572,722.00 for this
service, but allegedly only paid $489,000.00 to Schindler. (Compl. ¶¶ 4-5.) Accordingly,
Schindler alleges that SRC breached the contract by failing the pay the full amount due under the
contract, and owes Schindler the amount due plus interest. (Compl. ¶¶ 6-7.)
Schindler is incorporated in the State of Delaware and has its principal place of business
in New Jersey. (Compl. ¶ 1.) SRC is incorporated in and has its principal place of business in
New York. (Compl. Ex. 4.6.)
Schindler originally brought this action in the Superior Court of New Jersey, Morris
County, on May 18, 2015. SRC removed the action to this court on July 8, 2015, based on
diversity jurisdiction [Docket Entry 1].
II.
DISCUSSION
Section 1404(a) provides that “[f]or 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 or to any district or division to which all parties have
consented.” 28 U.S.C. § 1404(a). The party seeking to transfer must show that the alternative
venue is not only adequate, but also more convenient than the current one. Jumara v. State Farm
Ins. Co., 55 F.3d 873, 879 (3d Cir. 1995); Ricoh Co., Ltd. v. Honeywell, Inc., 817 F. Supp. 473,
480 (D.N.J. 1993). The Third Circuit has held that the transferor court need not have jurisdiction
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over a defendant to grant a plaintiff’s transfer motion under section 1404(a). United States v.
Berkowitz, 328 F.2d 358 (3d Cir. 1964); cf. Goldlawr, Inc. v. Heiman, 369 U.S. 463 (1962)
(holding that the transferor court need not have jurisdiction over the defendant to transfer a case
under 28 U.S.C. § 1406(a)).
The Third Circuit has held that “[s]ection 1404(a) transfers are discretionary
determinations made for the convenience of the parties.” Lafferty v. St. Riel, 495 F.3d 72, 76–77
(3d Cir. 2007). In exercising its discretion, the transferor court must evaluate whether a venue
transfer would further the goals of section 1404(a), which are “to prevent the waste of time,
energy and money and to protect litigants, witnesses and the public against unnecessary
inconvenience and expense . . . .” Van Dusen v. Barrack, 376 U.S. 612, 616, (1964).
In Jumara, the Third Circuit provided a list of private and public interest factors a district
court should consider when deciding a motion to transfer. The private interest factors are: (1) the
plaintiff’s forum preference as manifested in the original choice; (2) the defendant’s preference;
(3) whether the claim arose elsewhere; (4) the convenience of the parties as indicated by their
relative physical and financial condition; (5) the convenience of the witnesses (only to the extent
that the witnesses may actually be unavailable for trial in one of the fora; and (6) the location of
books and records (only to the extent that the files could not be produced in the alternative
forum). Id. The public interest factors are: (1) the enforceability of the judgment; (2) practical
considerations that could make the 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; (5) the public policies of the fora; and (6) the familiarity of
the trial judge with the applicable state law in diversity cases. Id. at 879-80.
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A. Private Interest Factors
The first two factors, the forum preferences of the parties, favor a transfer to the Southern
District of New York overall. Schindler plainly prefers the District of New Jersey as the
litigation forum, and the corporation is at home in New Jersey given that its principal place of
business is in Morristown, New Jersey. SRC prefers the Southern District of New York as a
forum. These considerations balance out, although the Court recognizes that Schindler’s choice
of forum is entitled to deference unless the other factors strongly favor transfer. See, e.g., Shutte
v. Armco Steel Corp., 431 F.2d 22, 25 (3d Cir. 1970). A plaintiff’s choice of forum, however,
deserves little deference when the chosen forum has little connection to the facts underlying the
claims. See, e.g., Wm. H. McGee & Co. v. United Arab Shipping Co., 6 F. Supp. 2d 283, 290
(D.N.J. 1997). In this case, the breach of contract claim revolves around the construction project
in White Plains, New York. These facts have little, if any, relationship to New Jersey.
The third private interest factor, whether the claim arose elsewhere, also supports a
transfer of the case to the Southern District of New York. The claim in this case, breach of
contract, arose out of performance of a construction contract in the Southern District of New
York. Schindler claims that emails exchanged between the parties, where one party may have
been located in New Jersey, creates a sufficient locus such that this Court should retain this case.
But the Court does not find this logic persuasive considering the nexus of facts linking the breach
of contract to the Southern District of New York as a forum.
The fourth factor, the convenience of the parties as indicated by relative physical and
financial condition, is neutral or may slightly favor transfer. By its own admission, Schindler is
the North American subsidiary of one of the world’s largest elevator and escalator companies.
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SRC is an LLC comprised of two members, and likely does not have the same types of resources
to litigate an action as Schindler. Neither party has directly made representations as to financial
hardship that would be suffered from litigating in a non-preferred forum, so the Court will not
give this factor great weight in its analysis.
The fifth factor, the convenience of witnesses, is neutral in this case. The Third Circuit
has held that convenience of witnesses is a factor to be considered “only to the extent that the
witnesses may actually be unavailable for trial in one of the fora.” Jumara, 55 F.3d at 879. SRC
identified representatives of the Project Developer WP Hotel and Metro Plaza, with offices in
White Plains, who will testify at trial. But SRC has not identified any witnesses who could not be
produced in the present forum, nor argued that some of these individuals would not be under the
control of the parties to this action. Furthermore, as Schindler has noted, the current and
proposed forums are within fifty miles of each other, meaning that witnesses in White Plains,
New York would be within the subpoena power of this Court. See Fed. R. Civ. P. 45(b)(2)(B)
(providing that a subpoena issued by a district court “may be served at any place . . . outside that
district but within 100 miles of the place specified for the deposition, hearing, trial production, or
inspection.”). Similarly, there is no reason to believe New Jersey witnesses would not be
available for a trial in New York, considering that Morristown is within 100 miles of White
Plains.
Finally, the location of records pertinent to this case is a neutral factor in this case. The
location of books and records is a factor to be considered only “to the extent that the files could
not be produced in the alternative forum.” Jumara, 55 F.3d at 879. SRC has stated that
documents, drawings, and permits are located in White Plains, New York, but there is no reason
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to conclude that these documents could not be made available in New Jersey (or vice versa for
any documentation for Schindler that is currently in New Jersey).
SRC has demonstrated that there is a very tenuous connection at best between Schindler’s
choice of forum—New Jersey—and either the wrongdoing underlying this action or the party
against which it seeks recovery. The private factors in this case weigh in favor of transfer to the
Southern District of New York.
B. Public Interest Factors
The public interest factors strongly support this Court’s conclusion that the Southern
District of New York would be a more appropriate forum for this action. The enforceability of
the judgment, court congestion, and public policy are neutral factors in this analysis, and neither
party has strongly disputed this point. A court in New York may have more familiarity with the
application of New York law than this Court does, but the Court does not find this factor to
weigh strongly in favor of transfer because this Court regularly applies the laws of other states in
diversity jurisdiction.
Two public interest factors, however, strongly support the transfer of this action to the
Southern District of New York: practical considerations relating to the litigation of this case, and
the consideration of keeping local interests in local courts.
1. Practical Considerations Related to Litigation
Practical considerations relating to the litigation of this case are brought to the forefront
by SRC’s argument that Schindler cannot establish personal jurisdiction over him in the District
of New Jersey. The Third Circuit has held that where there is a bona fide dispute over the
existence of in personam jurisdiction, the interests of justice are furthered by transfer of the
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action to another district in which the action could have clearly been brought. Schwilm v.
Holbrook, 661 F.2d 12, 16 (3d Cir. 1981); see also Societe Novelle Generale de Promotion v.
Kool Stop Int’l, Inc., 633 F. Supp. 153, 155 (E.D. Pa. 1985) (following Schwilm and granting
section 1404(a) transfer, reasoning that “[i]f the lack of in personam jurisdiction is in doubt,
sound judicial administration requires transfer to a district where it clearly could have been
brought.”).
Here, the Court must contend with the type of personal jurisdiction issue that can be
avoided by transfer of the action to a venue where SRC is located and is at home. As SRC has
asserted with regard to the question of jurisdiction, it is now and has been at all relevant times a
resident of New York. Nevertheless, New Jersey’s long-arm statute permits the exercise of
jurisdiction over a non-resident defendant to the extent allowed by the Due Process Clause of the
Constitution. N.J. Court Rule 4:4-4(c); Carteret Sav. Bank, FA v. Shushan, 954 F.2d 141, 145
(3d Cir. 1992); Fed. R. Civ. P. 4(k)(1)(A) (providing that a federal court has personal jurisdiction
over a defendant “who is subject to the jurisdiction of a court of general jurisdiction in the state
where the district court is located”). It is well established that “due process requires only that in
order to subject a defendant to a judgment in personam, if he be not present within the territory
of the forum, he have certain minimum contacts with it such that the maintenance of the suit does
not offend ‘traditional notions of fair play and substantial justice.’” Int’l Shoe Co. v. State of
Washington, 326 U.S. 310, 316 (1945).
In conducting a minimum contacts analysis, the Court must determine if the defendant’s
contacts with the state are sufficient to support general or specific jurisdiction. A defendant is
subject to general jurisdiction when it has continuous and systematic contacts with the forum
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state. Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 414-16 (1984). This
Court agrees with SRC’s assertion that on the facts pled, no general jurisdiction exists over SRC
in this case, and Schindler has not disputed this point. In the absence of general jurisdiction, in
personam jurisdiction is dependent on the presence of specific jurisdiction over the defendant:
“when a non-resident defendant has ‘purposefully directed’ his activities at a resident of the
forum and the injury arises from or is related to those activities.” Gen. Elec. Co. v. Deutz AG,
270 F.3d 144, 150 (3d Cir. 2001) (quoting Burger King Corp. v. Rudzewicz, 471 U.S. 462, 472
(1985)). Specific jurisdiction analysis should be tied to the claims at issue in a case, and for
contract disputes the court should determine whether the defendant’s contacts with the forum
“were instrumental in either the formation of the contract or its breach.” Id. (citing Phillips
Exeter Acad. v. Howard Phillips Fund, Inc., 196 F.3d 284, 289 (1st Cir. 1999)). Parties who
“‘reach out beyond [their] state and create continuing relationships and obligations with citizens
of another state’ are subject to the regulations of their activity in that undertaking.” Id. (quoting
Burger King, 471 U.S. at 473 (quotations omitted)). The mere fact that a non-resident of the
forum state has contracted with a resident of the forum state is not enough to establish personal
jurisdiction, but the required contacts may be established from the terms of the contract, where
the negotiations occurred, the future consequences of the contract, or the overall course of
dealings between the parties. Burger King, 471 U.S. at 479.
Mail and telephone calls sent by a defendant into a forum state may count towards the
minimum contacts that support jurisdiction. Mesalic v. Fiberfloat Corp., 897 F.2d 696, 701 (3d
Cir. 1990). But email, telephone calls, or mail do not trigger personal jurisdiction if they “do not
show purposeful availment” of the forum state. Toys R Us Inc v Step Two SA, 318 F.3d 446, 455
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(3d Cir. 2003) (quoting Mellon Bank (E.) PSFS, N.A. v. DiVeronica Bros., Inc., 983 F.2d 551,
556 (3d Cir. 1993)). A district court following this logic found that the exchange of three emails
between the plaintiff and defendant regarding the contents of the defendant’s web site, without
more, did not “amount to the level of purposeful targeting required under the minimum contacts
analysis.” Barrett v. Catacombs Press, 44 F. Supp. 2d 717, 729 (E.D. Pa. 1999); see also
Machulsky v. Hall, 210 F. Supp. 2d 531, 542 (D.N.J. 2002) (holding that minimal email
correspondence, “by itself or even in conjunction with a single purchase, does not constitute
sufficient minimum contacts.”).
The main point of contention between the parties is whether the emails exchanged between
Schindler and SRC prior to signing the contract at issue are sufficient minimum contacts such that
this Court can exercise personal jurisdiction over SRC. Schindler contends that SRC initially
targeted Schindler’s employees in Morristown, New Jersey with an email solicitation requesting a
proposal from Schindler, and that subsequently SRC made contact by email and telephone with
Schindler employees located in New Jersey. SRC disputes that it made first contact with Schindler.
SRC also asserts that Schindler’s office in White Plains, New York ran the project arising from
the contract, and further notes that it does not undertake any kind of activity in New Jersey. SRC
maintains that it did not purposefully establish any contact with New Jersey relating to the breach
of contract dispute in litigation, and thus that it is not subject to personal jurisdiction in New Jersey.
On these facts, SRC has raised a legitimate question as to whether this Court has personal
jurisdiction over it.
This case presents a situation in which the operative facts have only a tenuous connection
to New Jersey. Here, the Court faces precisely the type of personal jurisdiction issue which may
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be avoided by transfer of the action to the Southern District of New York. In contrast,
proceeding with the action in the District of New Jersey would require this Court to resolve the
personal jurisdiction issue, at the expense of the litigants’ time and money as well as the Court’s
own resources. Moreover, the bona fide dispute over in personam jurisdiction calls into doubt
the parties’ ability to obtain a speedy, full and final resolution of Schindler’s claims in the
District of New Jersey. A section 1404(a) transfer to an appropriate venue where this doubt is
removed serves to prevent wasteful litigation draining to both the private parties involved in this
suit and to the public, which has an interest in the efficient and effective use of the courts. Thus,
practical considerations regarding the litigation of this action militate strongly in favor of transfer
to the Southern District of New York.
2. Local Interests in Local Courts
The Court briefly notes that in general, courts have an interest in deciding local
controversies, and consequently, when an action “involves injuries sustained in a particular
locale, the public interest supports adjudication of the controversy in that locale.” Coppola v.
Ferrellgas, Inc., 250 F.R.D. 195, 201 (E.D. Pa. 2008) (quoting In re E. Dist. Repetitive Stress
Injury Litig., 850 F. Supp. 188, 195 (E.D.N.Y. 1994)). The alleged injury in this action arose
from a breach of contract in the Southern District of New York, and thus this factor also supports
the transfer of this action to that district.
For the reasons set forth above, SRC has carried its burden of demonstrating that the
Southern District of New York is a more convenient venue than the District of New Jersey for
the litigation of this action. The Court concludes that a transfer would serve the interests of
justice and further the goals of 28 U.S.C. § 1404(a).
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III. CONCLUSION
For the foregoing reasons, the Court will grant SRC’s motion to transfer venue, and in its
discretion, it will order this action transferred to the United States District Court for the Southern
District of New York, pursuant to 28 U.S.C. § 1404. To the extent SRC’s motion seeks
dismissal of the claims pursuant to Federal Rule of Civil Procedure 12(b)(2) for lack of in
personam jurisdiction, the Court will deny that portion of the motion as moot. An appropriate
Order will be filed.
s/Stanley R. Chesler
STANLEY R. CHESLER
United States District Judge
Dated: October 23, 2015
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