Capitol Payment Systems, Inc. v. Didonato et al
MEMORANDUM OPINION. Signed by Judge Ellen L. Hollander on 5/23/2017. (bmhs, Deputy Clerk)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MARYLAND
CAPITOL PAYMENT SYSTEMS, INC.,
Civil Action No. ELH-16-882
SALVATORE DI DONATO, et al.
This Opinion resolves the defendants’ motion to transfer this case to the District of New
On February 1, 2016, Capitol Payment Systems, Inc. (“Capitol” or “CPS”), plaintiff, filed
a “Complaint For Injunctive Relief” in the Circuit Court for Anne Arundel County against
defendants Pinnacle Processing Services, LLC (“Pinnacle”) and Salvatore Di Donato, the owner
and president of Pinnacle. ECF 4. Capitol asserts a claim for breach of contract (Count I) (id. ¶¶
33-40) and a claim for tortious interference with contractual relations (Count II). Id. ¶¶ 41-51. 1
Pinnacle removed the case to this Court on March 23, 2016, asserting diversity jurisdiction. See
28 U.S.C. §§ 1332, 1441, and 1446. ECF 3 at 1.
Pursuant to a joint motion (ECF 24), this case was stayed by Order of May 20, 2016
(ECF 26), pending mediation in a related case initiated by Pinnacle and Di Donato on February
25, 2016, in the District of New Jersey. See, e.g., ECF 26; ECF 40; see also Pinnacle Processing
The counts are imprecise in identifying the party or parties to whom or to which they
apply. Each refers to an unspecified “Defendant.” See, e.g., ECF 4 at 9 (In Count II, stating
“Defendant intentionally and improperly interfered . . . .”). Yet, relief is sought from both
defendants for each count. In context, it would appear that Count I applies to Pinnacle and
Count II applies to Di Donato.
Services, LLC et al. v. Capitol Payment Systems, Inc., et al., Case No. 3:16-CV-01084-FLWDEA (D. N.J.). The mediation was unsuccessful. See ECF 39.
Defendants have moved to transfer the case to the United States District Court for the
District of New Jersey, pursuant to 28 U.S.C. § 1404. ECF 43. The motion is supported by a
memorandum of law (ECF 43-1) (collectively, “Motion”) and several exhibits.
through ECF 43-6. Capitol responded in opposition (ECF 44, “Opposition), with exhibits. ECF
44-1 through ECF 44-10. Defendants have replied. ECF 45 (“Reply”).
The Motion has been fully briefed and no hearing is necessary to resolve it. See Local
Rule 105.6. For the reasons that follow, I shall grant the Motion.
Factual Background 2
Capitol is a Maryland corporation with its principal place of business in Anne Arundel
County. ECF 4, ¶ 3. It is a “merchant services company” that provides payment transaction
processing services “to a wide array of merchants including small business, regional and national
chains, associations, agent banks, fuel merchants and government agencies along with many
others.” Id. ¶ 6. Capitol’s business includes “processing point of sale credit, debit, [and] gift
card transactions for retail merchants and banks.” Id. ¶ 7. Robert Schoenbauer is the president
of Capitol. ECF 44-5 (Schoenbauer Affidavit), ¶ 2. He is not a party to this case.
Pinnacle is a single member limited liability company formed under the laws of New
Jersey, with its principal place of business in Red Bank, New Jersey. ECF 4, ¶ 5; ECF 43-5,
¶¶ 3-5 (Di Donato Declaration of 3/31/2016), ¶¶ 3-5. 3 Di Donato is the president, owner, and
Given the procedural posture of the case, I shall present the facts asserted in the
Complaint, as supplemented by other submissions.
In the Complaint, Capitol alleges that Pinnacle is “incorporated in the State of New
Jersey . . . .” ECF 4, ¶ 5. However, in his Declaration of March 31, 2016, Di Donato states:
operator of Pinnacle. ECF 4, ¶ 4; ECF 43-4 (Di Donato Declaration of 3/7/2016), ¶ 3. Formed
in 2008, Pinnacle operates as “an agent in the electronic payment processing industry . . . [that]
works on behalf of Independent Sales Organizations . . . .” ECF 43-3, ¶ 4.
I pause to review briefly aspects of the credit card payment processing industry that
frame this case.
According to defendants, “[w]hen merchants offer debit and credit card
payment services to consumers, they generally do so with the assistance of entities that act as
intermediaries between merchants and electronic payment processors.”
ECF 43-1 at 5.
Payment processors “often contract with entities known in the payments industry as Independent
Sales Organizations (“ISOs”) . . . , [which] acquire merchant relationships on behalf of the
processors” and provide various other services. Id.
“ISOs, in turn, commonly associate themselves with merchant-level agents: entities or
individuals that seek out new merchant relationships on behalf of the ISOs and otherwise
facilitate the relationships between merchants and ISOs.” Id. Agents are typically compensated
through ongoing monthly payments known as “residuals.” Id.
On or about July 17, 2008, Di Donato entered into an “Independent Marketing
Agreement” (“Agreement”) with Capitol. ECF 4, ¶¶ 4, 9; ECF 44-1 at 17-26 (Agreement). 4 Di
Donato states that he signed the Agreement in New Jersey and e-mailed the signed copy to
Schoenbauer. ECF 43-5, ¶ 10. In its Opposition, Capitol states: “Pinnacle signed the Agreement
in Florida and returned the signed Agreement to Capitol in Maryland.”
ECF 44 at 10.
“Pinnacle is a single member LLC . . . duly organized and existing under the laws of New Jersey,
and maintains its only offices in New Jersey.” ECF 43-5, ¶¶ 4-5.
At the time, Pinnacle had not yet been incorporated. ECF 4, ¶ 4. Pinnacle was
incorporated in November 2008. Id. ¶ 5.
Nevertheless, the disagreement as to where Pinnacle signed the Agreement is of no consequence,
as the parties seem to agree that Pinnacle did not sign the Agreement in Maryland.
According to CPS, under the Agreement, defendants “agreed to act as an agent of CPS
and solicit prospective merchants to apply to CPS for merchant agreements and otherwise
provide various merchant account and processing services to the ‘merchants.’” ECF 4, ¶ 10.
Paragraph 4(c) of the Agreement provides, ECF 44-1 at 19-20:
(c) Non-Interference So long as any Merchant Agreement of any
merchant solicited by Agent remains in effect, and for a period not to exceed five
years after such date, Agent shall not interfere in any manner whatsoever with the
contractual rights and interests of CPS under any such Merchant Agreement,
either directly or indirectly (including without limitation, through any partnership,
joint venture as an employee or other entity or arrangement[)] to engage in bank
card transaction processing through any person or entity other than CPS. Agent
may not contact bank or processor directly in an effort to buy pass [sic] CPS or
attempt to go direct in any way. Agent may not develop a direct relationship with
bank or processor in any way regardless of initiation directly or indirectly. If
Agent violates the provisions of this Subparagraph 4(c), by its own acts, or in
collusion with any other person or entity, then all payments due to Agent
hereunder shall immediately cease and CPS shall have no further obligation to
make any such payments and shall be entitled to all other remedies it may have
under this Agreement or applicable law. The covenants of Agent and all other
provisions of this Subparagraph 4(c) shall survive termination of this Agreement.
Paragraph 5 of the Agreement is titled “COMPENSATION OF AGENT.” ECF 44-1 at
20. Paragraph 5(a), titled “Processing Fees”, provides, inter alia, id.: “Agent shall be entitled to
a fee which is derived from discount fees on gross sales and which is paid to CPS for each
merchant solicited by Agent and approved by CPS.
Agent shall be entitled to receive
compensation . . . for so long as CPS is receiving corresponding compensation for such approved
merchant . . . .” (Internal quotations omitted).
Paragraph 13 of the Agreement pertains to the use of proprietary information. Id. at 2324. It defines “proprietary information” as “all printed and written material, application forms,
contracts and other information furnished by CPS to Agent.”
Id. at 23.
With respect to
proprietary information, the Agreement provides, in pertinent part, id.: “Agent shall not use or
disclose any of CPS proprietary information to any other person or entity during the term of this
Agreement and for three (3) years thereafter.”
Notably, paragraph 17 is titled “GOVERNING LAW”. Id. at 24. It provides, id.: “This
Agreement and all the documents referred to herein, shall in all respects, be interpreted, enforced
and governed by and under the laws of the State of Maryland.”
In or around June 2012, the parties became involved in a dispute concerning defendants’
residual commission percentage. ECF 4, ¶ 13. At the time, defendants threatened to move to
another provider the accounts that had been brought to Capitol. Id. To retain Pinnacle as an
independent contractor, Capitol agreed to increase defendants’ commission for new business.
Id.; see ECF 44-1 at 27 (Addendum to Agreement). Nevertheless, defendants began “selling” for
a competitor, Priority Payments Local (“Priority”), and other merchant services providers. ECF
4, ¶ 13.
In or around the fall of 2015, defendants allegedly “began soliciting various CPS
customers and encouraging those customers to terminate their merchant agreements with CPS.”
Id. ¶ 15. Defendants also directed some of CPS’s customers to Priority. Id. According to
Capitol, defendants “developed a scheme by which [they] solicit an existing CPS account,
move that account to Priority, and then approximately one month later request that the
account be closed with CPS.”
Id. ¶ 16.
Capitol alleges, on information and belief, that
defendants “tell these account holders that CPS is considering selling its portfolio of accounts,
thereby implying that CPS is no longer stable or viable.” Id. ¶ 17. Further, Capitol alleges, on
information and belief, that defendants tell the account holders that Capitol “is running a
fraudulent operation and is getting sued.” Id. ¶ 18.
Capitol points to a variety of businesses that had an account with Capitol but have since
moved to Priority. See id. ¶¶ 22, 23, 25, 27, 29, 30. It also points to several other businesses that
have either left or considered leaving Capitol. See id. ¶¶ 24, 26, 28, 31, 32.
Di Donato avers that on January 19, 2016, he received a letter from Capitol’s counsel
“purporting to terminate the Agreement based on alleged (and unspecified) breaches by
Pinnacle.” ECF 43-4, ¶ 16; id. at 24-26. The letter, dated January 19, 2016, stated, id. at 24
(emphasis in original):
Please be advised that it appears as though Pinnacle has violated, and
continues to violate, the Agreement in a variety of respects which include, but
upon information and belief are not limited to, material breaches of paragraph
4(c) of the Agreement which explicitly prohibits interference “in any manner
whatsoever with the contractual rights and interests of CPS under any such
Indeed, my client has reason to believe that Pinnacle is and has been
soliciting various CPS customers to cease doing business with CPS and otherwise
terminate their Merchant Agreements. Some of these customers have already
confirmed as much.
Given all of the foregoing, please be advised that, as a result of Pinnacle's
substantial and material breach of the Agreement, the Agreement is hereby
TERMINATED. Furthermore, pursuant to paragraph 4(c) and all other
applicable provisions in the Agreement, all payments due to Pinnacle under
the Agreement shall immediately cease.
CPS reserves all rights at law, in equity and in contract including, but not
limited to, the right to immediately institute legal proceedings against Pinnacle
which action(s) may include emergency injunctive relief prohibiting Pinnacle's
continuing violations of the Agreement and other improper activities adverse to
CPS. CPS will seek reimbursement of it’s [sic] reasonable attorney’s fees as part
of any such action.
Counsel for Pinnacle responded to Capitol by letter dated January 22, 2016. ECF 43-4,
¶ 18; id. at 28-29. The letter of January 22, 2016 stated, in pertinent part, id. at 28-29 (emphasis
The thrust of your letter appears to be a claim that Pinnacle breached
Section 4(c) of the Agreement. The relevant language in that Section is that
“Agent shall not interfere in any manner whatsoever with the contractual rights
and interests of CPS under any such Merchant Agreement… (emphasis added).”
In fact, Pinnacle has in no way interfered with any CPS merchant or Merchant
Agreement. And your letter is devoid of specific allegations to the contrary.
Conclusory and vague assertions that merchants have switched processors –
which could happen for any number of reasons – or that there were “other
improper activities” cannot satisfy any legally or commercially reasonable
definition of interference.
The failure to timely pay Pinnacle would result in irreparable harm to its
business. Section 6 of the Agreement provides for such payment by the 30th day
of each month. Based upon the lengthy course of dealing between the parties,
CPS typically makes such payments by the 25th day of each month. Pinnacle will
not sit idly by while CPS improperly withholds compensation payable to Pinnacle
pursuant to the Agreement.
To be clear, if Pinnacle does not receive payment in full by January 29,
2016, we will commence litigation on behalf of Pinnacle in an appropriate
jurisdiction and venue. Pinnacle’s claims would potentially include, among
others, breach of contract, fraud, breach of the duty of good faith, unjust
enrichment, tortious interference, a demand for accounting and equitable relief.
Di Donato maintains that Pinnacle never received a response to the letter of January 22,
2016. ECF 43-4, ¶ 18. But, according to Di Donato, at some point after Pinnacle’s letter of
January 22, 2016, Pinnacle lost access to an online system called “E-Merchant View”, which
allows it to track the status of merchant accounts that it brought to Capitol. Id. ¶ 19.
Di Donato then directed counsel to send a second letter to counsel for Capitol. Id. ¶ 20;
id. at 31-32. That letter, dated January 27, 2016, provided, in pertinent part, id. at 31 (emphasis
CPS's actions constitute a material breach of the Agreement. This
correspondence shall serve as written notice of CPS’s material breach in
accordance with Section 10(a) of the Agreement. As such, CPS’s failure to cure
this breach within five (5) days of the date hereof shall constitute grounds for
immediate termination of the Agreement. To be clear, the Agreement will
terminate as of February 2, 2016 if Pinnacle's access to E-Merchant View is not
fully restored by February l.
We reiterate our demand that CPS immediately pay Pinnacle its monthly
compensation in full. CPS must also immediately restore Pinnacle's access to EMerchant View to ensure that all merchants receive proper and timely customer
service. If CPS does not alter its present course, not only will it face costly
litigation, but its improper actions will result in accelerated merchant attrition.
A. Circuit Court for Anne Arundel County
As noted, Capitol filed suit against defendants in the Circuit Court for Anne Arundel
County on February 1, 2016. ECF 4. At the same time, Capitol filed a motion for a temporary
restraining order (“TRO”) and preliminary injunctive relief. ECF 5. Defendants “made a
limited, special appearance before the Maryland court on February 2, 2016” to respond to the
TRO. ECF 43-1 at 10. The circuit court denied the TRO by Order of February 3, 2016. ECF 6.
However, the court’s order provided that “a Preliminary Injunction hearing shall be set in within
thirty-five days . . . .” Id. It appears that the hearing was set for March 9, 2016. ECF 8.
However, Capitol withdrew its motion for preliminary injunction, without prejudice, on March 1,
Summons was issued on March 3, 2016 (ECF 10) and served on Di Donato and Pinnacle
on March 11, 2016. See ECF 44-4. As indicated, Pinnacle removed the case to this Court on
March 23, 2016. ECF 3.
B. District of New Jersey
On February 25, 2016, Pinnacle and Di Donato filed suit against Capitol and
Schoenbauer in the United States District Court for the District of New Jersey (“N.J.”). ECF 1 in
D.N.J. Case No. 3:16-cv-1084-FLW-DEA (“N.J. Case” or “New Jersey Case”); see ECF 43-2
(N.J. Case, docket). At the time the New Jersey Case was filed, Pinnacle and Di Donato had not
yet been served with process in the Maryland State case. In their Verified Complaint, Pinnacle
and Di Donato assert claims, inter alia, for breach of the Agreement, defamation, and unjust
enrichment. See N.J. Case, ECF 1.
In particular, Pinnacle and Di Donato allege that Capitol breached the Agreement by
refusing to pay Pinnacle residuals following Capitol’s letter of January 19, 2016 (ECF 43-4 at
24-26). N.J. Case, ECF 1, ¶ 37.
Moreover, Pinnacle and Di Donato assert that they “learned
that CPS and Schoenbauer have been in contact with numerous merchants who entered into
Merchant Agreements with CPS as a result of Pinnacle’s marketing efforts” (id. ¶ 27) and that
CPS and Schoenbauer were “providing those merchants with false information.” Id. ¶ 28.
Pinnacle and Di Donato allege, id.:
Schoenbauer has falsely represented that: (1) due to Pinnacle’s
involvement, the merchants’ accounts were not set up correctly; (2) merchants
were being charged unnecessarily high rates for their processing services
(including the statement, among others, that “Sal is robbing you”); and (3)
merchants could save money by terminating the prior contracts facilitated by
Pinnacle and entering into new and cheaper contracts with CPS directly.
Further, Pinnacle and Di Donato assert: “The reasons for [Capitol and Schoenbauer’s]
contacts with these merchants are transparent: CPS is attempting to bypass the contracts arranged
by Pinnacle under the Agreement and take for itself the relationships that Pinnacle has cultivated
for years, along with the corresponding income . . . .” Id. ¶ 33.
Pinnacle and Di Donato filed a motion for preliminary injunction in the New Jersey Case
on March 10, 2016. See N.J. Case, ECF 4. Capitol and Schoenbauer opposed the motion. N.J.
Case, ECF 10. On March 28, 2016, Capitol and Schoenbauer moved to dismiss the case, or
alternatively, to transfer venue to the District of Maryland. N.J. Case, ECF 11. Then, by Order
of April 7, 2016, Magistrate Judge Douglas Arpert (D.N.J.) granted the applications for pro hac
vice admission in the New Jersey Case, filed by Timothy Maloney, Esq. and Joseph Creed, Esq.,
Capitol’s counsel in the Maryland case. N.J. Case, ECF 15.
On May 13, 2016, United States District Judge Freda Wolfson, to whom the New Jersey
Case is assigned, ordered the parties to participate in mediation. N.J. Case, ECF 18. In addition,
Judge Wolfson deemed the motions pending in the New Jersey Case as withdrawn, without
prejudice, and administratively stayed the case pending the outcome of the mediation. Id.
Notably, Judge Wolfson stated that the New Jersey Case involves “substantially the same parties
and dispute” as the case sub judice.
In a joint status report submitted to Judge Wolfson on June 29, 2016, the parties stated
that on June 22, 2016, they engaged in a mediation conference with the Honorable Joel Rosen, a
retired New Jersey state court judge, and that the mediation was expected to continue until at
least July 26, 2016. N.J. Case, ECF 19. To my knowledge, nothing further has been docketed in
the New Jersey Case. See N.J. Case, docket.
C. District of Maryland
As noted, Pinnacle removed the Maryland State case to federal court on March 23, 2016
(ECF 3), about a month after suit was filed by Pinnacle and Di Donato in federal court in New
Jersey. Defendants here, who are plaintiffs in the New Jersey Case, subsequently moved to
transfer venue to the District of New Jersey, pursuant to 28 U.S.C. § 1404. ECF 15. Thereafter,
the parties informed this Court that Judge Wolfson would be entering an order directing
mediation in the New Jersey case. ECF 21. On May 18, 2016, they jointly moved to stay this
case. ECF 24 (“Motion to Stay”). In the Motion to Stay, the parties informed the Court of Judge
Wolfson’s mediation order (N.J. Case, ECF 18). Id. And, defendants agreed to withdraw their
motion to transfer (ECF 15), without prejudice. Id. I granted the Motion to Stay by Order of
May 20, 2016. ECF 26.
By Order of August 3, 2016 (ECF 27), I directed the parties to file periodic status reports
with the Court. See ECF 27; ECF 29; ECF 31; ECF 33; ECF 36; ECF 38. In the status reports,
counsel provided updates as to the progress of the mediation. See, e.g., ECF 28; ECF 30; ECF
32; ECF 35; ECF 37; ECF 39. In a status report submitted on August 12, 2016, the parties stated
that they had participated in a mediation conference on June 22, 2016, and that counsel and the
mediator held a follow-up conference on August 2, 2016. ECF 28. Thereafter, the parties
reportedly continued to engage in informal settlement discussions. See, e.g., ECF 37.
In a status report to the Court on January 5, 2017, the parties indicated that they were
unable to reach a settlement agreement. ECF 39. Therefore, they asked the Court to lift the stay.
Id. By Order of January 5, 2017, I lifted the stay. ECF 40. The Motion followed on February
10, 2017. ECF 43.
As noted, Pinnacle and Di Donato have moved to transfer this case to the District of New
Jersey, pursuant to 28 U.S.C. § 1404(a). ECF 43. They argue that New Jersey is a more
convenient forum because it is where “the Defendants reside, this dispute arose, the potential
witnesses reside, and the bulk of the evidence is located.”
ECF 43-1 at 2.
defendants point out that New Jersey is “the forum within which [Capitol] agreed to, and did,
litigate a preliminary injunction motion and conducted mediation before a local mediator, a
retired New Jersey Superior Court Judge.” Id.
Capitol disagrees. It contends that, as a Maryland corporation, it is entitled to litigate the
case in its home state. ECF 44 at 1. Further, Capitol observes that the Agreement is governed by
Maryland law and there are witnesses located in Maryland. Id. And, Capitol contends that the
first-to-file rule requires the adjudication of the case in Maryland. Id. at 2.
Section 1404(a) of Title 28 of the U.S. Code states, in pertinent part: “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 . . . .” See also
Brigham v. Patla, Straus, Robinson & Moore, P.A., 671 Fed. App’x 168 (4th Cir. 2016) (per
Notably, § 1404(a) “reflects an increased desire to have federal civil suits tried in the
federal system at the place called for in the particular case by considerations of convenience and
justice.” Van Dusen v. Barrack, 376 U.S. 612, 616 (1964). To that end, it helps “to prevent the
waste ‘of time, energy, and money’ and ‘to protect litigants, witnesses, and the public against
unnecessary inconvenience and expense.’” Id. (citation omitted). Section 1404 enables the
courts to “prevent plaintiffs from abusing their privilege under [28 U.S.C.] § 1391 by subjecting
defendants to venues that are inconvenient under the terms of § 1404(a).” In re: Volkswagen of
Am., Inc., 545 F.3d 304, 313 (5th Cir. 2008).
A motion to transfer under § 1404(a) “calls on the district court to weigh in the balance a
number of case-specific factors.” Stewart Org., Inc. v. Ricoh Corp., 487 U.S. 22, 29 (1988).
These include: “(1) the weight accorded to plaintiff's choice of venue; (2) witness convenience
and access; (3) convenience of the parties; and (4) the interest of justice.” Tr. of the Plumbers
and Pipefitters Nat. Pension Fund v. Plumbing Servs., Inc., 791 F.3d 436, 444 (4th Cir. 2015);
see, e.g., Mamani v. Bustamante, 547 F. Supp. 2d 465, 469 (D. Md. 2008); Cross v. Fleet
Reserve Ass’n Pension Plan, 383 F. Supp. 2d 852, 856 (D. Md. 2005); Lynch, 237 F. Supp. 2d at
617. Other factors include the “local interest in having localized controversies settled at home”
and the “appropriateness in having a trial of a diversity case in a forum that is at home with the
state law that must govern the action.” Stratagene v. Parsons Behle & Latimer, 315 F. Supp. 2d
765, 771 (D. Md. 2004).
In a motion to transfer venue pursuant to § 1404(a), the moving party bears the burden of
showing, by a preponderance of the evidence, that transfer to another venue is proper. See
Gilbert v. Freshbikes, LLC, 32 F. Supp. 3d 594, 607 (D. Md. 2014); CoStar Realty Info., Inc. v.
Meissner, 604 F. Supp. 2d 757, 770 (D. Md. 2009); Lynch v. Vanderhoef Builders, 237 F. Supp.
2d 615, 617 (D. Md. 2002). As to hardship on witnesses and parties, in order for the movant to
meet its burden, “the movant should submit, for example, affidavits from witnesses and parties
explaining the hardships they would suffer if the case were heard in the plaintiff's chosen
forum.” Dow v. Jones, 232 F. Supp. 2d 491, 499 (D. Md. 2002) (citing Helsel v. Tishman Realty
& Constr. Co., 198 F. Supp. 2d 710, 712 (D. Md. 2002)). As Judge Blake observed in Dow, 232
F. Supp. 2d at 499, where the movant only provides “[m]ere assertions of inconvenience or
hardship,” it will not adequately have met its burden.
Ultimately, “[t]he decision whether to transfer is committed to the sound discretion of the
trial court.” Mamani, 547 F. Supp. 2d at 469; see Volkswagen, 545 F.3d at 312 (“‘There can be
no question but that the district courts have ‘broad discretion in deciding whether to order a
transfer.’”); see also Plumbing Servs., Inc., 791 F.3d at 443; In re Ralston Purina Co., 726 F.2d
1002, 1005 (4th Cir. 1984).
Under 28 U.S.C. § 1404(a), the “preliminary” inquiry focuses on whether the civil action
“might have been brought in the destination venue.” Volkswagen, 545 F.3d at 312 (internal
quotations omitted). In order to satisfy that requirement, venue in the transferee court must be
proper, and that court must have personal jurisdiction over the defendant.
D2L Ltd. v.
Blackboard, Inc., 671 F. Supp. 2d 768, 778 (D. Md. 2009).
Section 1391 of Title 28 of the United Sates Code governs “the venue of all civil actions”
filed in federal district court. Id., § 1391(a). Under 28 U.S.C. § 1391(b), venue exists in
(1) a judicial district in which any defendant resides, if all defendants are
residents of the State in which the district is located;
(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) if there is no district in which an action may otherwise be brought as
provided in this section, any judicial district in which any defendant is subject
to the court's personal jurisdiction with respect to such action.
Section 1391(c) is titled “Residency.” Section 1391(c)(2) states:
[A]n entity with the capacity to sue and be sued in its common name under
applicable law, whether or not incorporated, shall be deemed to reside, if a
defendant, in any judicial district in which such defendant is subject to the court's
personal jurisdiction with respect to the civil action in question and, if a plaintiff,
only in the judicial district in which it maintains its principal place of business(.)
Pinnacle is a limited liability company organized under the laws of New Jersey, with its
principal place of business in New Jersey. ECF 43-5, ¶¶ 3, 5. Thus, Pinnacle is subject to
personal jurisdiction in New Jersey and is considered a “resident” of New Jersey under 28 U.S.C.
§ 1391(c). See Goodyear Dunlop Tires Operations, S.A. v. Brown, 564 U.S. 915, 924 (stating
that corporations are subject to “general jurisdiction” in places where they are “fairly regarded as
at home”). Di Donato also resides in New Jersey. See 28 U.S.C. § 1391(c)(1); see also ECF 435, ¶ 6. Accordingly, the case could have been brought in the District of New Jersey. 28 U.S.C. §
Having determined that this case could have been brought in the District of New Jersey,
the Court must weigh several factors in considering the motion to transfer under § 1404(a). As
stated, these include: (1) the weight accorded to plaintiff's choice of venue; (2) the convenience
of the witnesses; (3) the convenience of the parties; and (4) the interest of justice. Plumbing
Servs., Inc., 791 F.3d at 444.
1. Plaintiff’s Choice of Venue
“As a general rule, a plaintiff's ‘choice of venue is entitled to substantial weight in
determining whether transfer is appropriate.’” Plumbing Servs., Inc., 791 F.3d at 444 (quoting
Bd. of Trs. v. Sullivant Ave. Props., LLC, 508 F. Supp. 2d 473, 477 (E.D. Va. 1988)); see also,
e.g., Arabian v. Bowen, 966 F.2d 1441 at *1 (4th Cir. 1992) (per curiam) (table). Ordinarily,
unless the balance of factors points “strongly in favor of the defendant, the plaintiff's choice of
forum should rarely be disturbed.” Collins v. Straight, Inc., 748 F.2d 916, 921 (4th Cir. 1984);
see Gilbert, 32 F. Supp. 3d at 607; Mamani, 547 F. Supp. 2d. at 469. This is particularly true
where “‘the chosen forum is the plaintiff’s home or bears a substantial relation to the cause of
action.’” comScore, Inc. v. Integral Ad Science, Inc., 924 F. Supp. 2d 677, 682 (E.D. Va. 2013)
(quoting Pragmatus AV, LLC v. Facebook, Inc., 769 F. Supp. 2d 991, 995 (E.D. Va. 2011)); see
also, e.g., Rice v. PetEdge, Inc., 975 F. Supp. 2d 1364, 1374 (N.D. Ga. 2013) (recognizing that a
plaintiff’s choice of venue should be afforded substantial deference where “plaintiff has filed suit
in his home state”); Sentry Select Ins. Co. v. McCoy Corp., 980 F. Supp. 2d 1072, 1077 (W.D.
Wis. 2013) (“Because plaintiff . . . has chosen its home forum in which to litigate, its choice is
particularly deserving of deference.”).
As indicated, a plaintiff's choice of forum “is ordinarily accorded considerable
weight . . . .” Lynch, 237 F. Supp. 2d at 617. But, “that weight is significantly lessened when
none of the conduct complained of occurred in the forum selected by the plaintiff and said forum
has no connection with the matter in controversy.” Id.; see also Bannister v. Wal-Mart Stores E.,
L.P., 843 F. Supp. 2d 610, 615 (E.D.N.C. 2012) (“[T]he deference given to a plaintiff's choice of
forum is proportionate to the relationship between the forum and the cause of action.”); Mamani,
547 F. Supp. 2d at 473 (“[A] court need not accord the choice as much weight when the ‘forum
has no connection with the matter in controversy.’”) (citation omitted); Bd. of Trustees v.
Sullivant Ave. Properties, LLC, 508 F. Supp. 2d 473, 477 (E.D. Va. 2007) (observing that the
weight of plaintiff’s choice of forum “varies depending on the significance of the contacts
between the venue chosen by Plaintiff and the underlying cause of action”).
Defendants maintain that the Court should not afford substantial weight to Capitol’s
choice of forum because the issues raised in the suit have little connection to Maryland. ECF 431 at 16. According to defendants, Capitol “alleges that Defendants have been interfering with
CPS’s merchant relationships, and all of those merchants are located either in New York or New
Jersey.” Id. at 16 (emphasis in ECF 43-1); see ECF 43-5, ¶¶ 12-13. Indeed, in his Declaration
of March 31, 2016, Di Donato averred, ECF 43-5, ¶ 12:
[A]ll services provided by Pinnacle under the Agreement have been rendered in
the states of New Jersey and New York. All merchants I have solicited on behalf
of CPS are located either in New Jersey or New York, and all merchants that
ultimately executed Merchant Agreements with CPS as a result of my efforts are
located either in New Jersey or New York.
Further, Di Donato asserts that each of the merchants identified by Capitol in its
Complaint as former accounts misappropriated by defendants “are located and conduct business
in either New Jersey or New York.” Id. ¶ 13. In addition, Pinnacle and Di Donato assert, ECF
43-1 at 16: “Defendants themselves are located in New Jersey, and all the alleged conduct giving
rise to the claims in the action occurred in that state – not in Maryland.”
In its Opposition, Capitol argues that its choice of forum is entitled to deference because
it is a Maryland corporation with its principal place of business in Maryland. ECF 44 at 10; see
ECF 44-1, ¶ 2 (Schoenbauer Affidavit of 3/27/16). Therefore, Capitol asserts that its election to
file suit in Maryland is entitled to significant weight. ECF 44 at 10.
Moreover, Capitol contends that Maryland is “strongly connected to the controversy at
issue.” Id. To illustrate, Capitol points out that the Agreement is governed by Maryland law
(see ECF 44-1 at 24, ¶ 17); Pinnacle returned the signed Agreement to Maryland; and Di Donato
toured Capitol’s offices in Maryland. ECF 44 at 10. Further, it claims that Pinnacle “has
repeatedly contacted and communicated with Capitol in Maryland.” Id.
Capitol’s decision to file suit in its home district is entitled to weight. Capitol operates
from Maryland, and did so during the parties’ relationship. ECF 44 at 10; see ECF 44-1, ¶ 2.
But, Maryland has relatively little connection to the merits of the underlying dispute. Rather, it
appears that all of the conduct underlying the Complaint (i.e., the alleged improper conduct by
defendants) occurred in New Jersey and New York (ECF 43-5, ¶¶ 11-13; see ECF 4, ¶¶ 15-32), a
fact that Capitol does not dispute. See ECF 44. Thus, the weight attached to Capitol’s choice of
forum is somewhat diminished.
2. Convenience of Witnesses
“Perhaps the most important factor to be considered by a court in passing on a motion to
transfer is the convenience of the witnesses.” Cronos Containers, Ltd. v. Amazon Lines, Ltd.,
121 F. Supp. 2d 461, 466 (D. Md. 2000); accord Mamani, 547 F. Supp. 2d at 473; see also 15 C.
Wright & A. Miller, Fed. Practice & Procedure, § 3851 (4th ed.) (“Wright & Miller”) at 253
(“The convenience of witnesses, particularly nonparty witnesses important to the resolution of
the case, is often cited as the most significant factor in ruling on a motion to transfer under 28
U.S.C.A. § 1404(a).”). However, “the convenience of witnesses who are employees of a party is
entitled to less weight because that party can obtain their presence at trial.” Wright & Miller,
§ 3851 at 278.
Defendants argue that the convenience of the witnesses favors transfer to New Jersey. As
an initial matter, Pinnacle and Di Donato point out that they are located in New Jersey. ECF 431 at 15. Furthermore, defendants argue that transfer is warranted because all of the merchants
identified in the Complaint, whose interactions with the parties form the “heart of this dispute”,
are located in New Jersey and New York. Id. at 16-17; see ECF 43-5, ¶ 13. Pinnacle and Di
Donato assert: “All of those merchants are potential witnesses, whose testimony may be needed
for the adjudication of this action on the merits.” ECF 43-1 at 16. And, defendants note that the
District of New Jersey, sitting in Trenton, “has trial subpoena power extending into New York
City, downstate New York, and into parts of Long Island.” Id. at 16-17; see Fed. R. Civ. P.
45(c)(1) (“A subpoena may command a person to attend a trial, hearing, or deposition only as
follows . . . (A) within 100 miles of where the person resides, is employed, or regularly transacts
business in person . . . .”).
Capitol counters that the convenience of witnesses neither weighs for nor against transfer.
ECF 44 at 11. It argues, id.: “Without question, some potential witnesses in this case are likely
located in New Jersey and New York. However, other key witnesses are located in Georgia.”
For example, Capitol claims that it “intends to seek discovery from Priority and will likely call at
least one employee or representative of Priority as a witness . . . .” ECF 44 at 11. According to
Capitol, Priority is a Georgia corporation located in Alpharetta, Georgia. Id.; see ECF 44-6 (Ga.
Corps. Div., Business Search). Capitol also claims that another likely witness, First Data Card
Solutions, Inc., is located in Atlanta, Georgia. ECF 44 at 11; see ECF 44-7 (Ga. Corps. Div.,
Business Search). 5 And, Capitol contends: “Merchants with whom Pinnacle interfered are likely
located in Florida, Michigan, Pennsylvania, and possibly elsewhere.” ECF 44 at 11; see ECF 445, ¶ 6.
In my view, the convenience of witnesses favors the transfer of the case to New Jersey.
As defendants point out, without objection from Capitol, all of the merchants identified in
Capitol’s Complaint are located in New York and New Jersey, and each merchant is a potential
witness. Although Trenton may not be the most convenient forum for merchants located in
northern New Jersey or New York, it is undoubtedly more convenient than Baltimore.
Practically speaking, for witnesses taking the Amtrak northeast regional train from northern New
Jersey or New York, Trenton is at least two hours closer than Baltimore.
http://bit.ly/2pxpJVP (last accessed: Apr. 25, 2017).
In its Opposition, Capitol refers to First Data Card Solutions as an LLC. ECF 44 at 6.
However, the Georgia Corporations Division search (ECF 44-7) identifies First Data Card
Solutions as a corporation. Id.
Additionally, the existence of potential witnesses in Pennsylvania, Michigan, Florida, and
Georgia cuts neither for nor against transfer.
With respect to the potential witnesses in
Pennsylvania, plaintiff does not indicate where in Pennsylvania those witnesses are located. The
witnesses could be located in Shrewsbury, Pennsylvania, a 40-mile drive from Baltimore, or in
Morrisville, Pennsylvania, part of which is within walking distance of the U.S. Courthouse in
Trenton. Moreover, as to the potential witnesses in Michigan, Florida, and Georgia, there is no
reason to believe that travel from those locations to Baltimore is any more or less convenient
than travel to Trenton.
In my view, the convenience of witnesses favors transfer to the District of New Jersey.
3. Convenience of the Parties
“A defendant moving for transfer must show both that the original forum is inconvenient
for it and that the plaintiff would not be substantially inconvenienced by a transfer.” Wright &
Miller, § 3849 at 217. Notably, “transfer will be refused if the effect of a change of venue would
be merely to shift the inconvenience from one party to the other.” Id. at 216; see Pinpoint IT
Services, L.L.C. v. Atlas IT Export Corp., 812 F. Supp. 2d 710, 721 (E.D. Va. 2011) (“[A]
transfer of venue that merely switches the inconvenience from one party to the other generally
will be refused.”).
Although the defendants point out that they are residents of New Jersey, they do not
argue that the convenience of the parties justifies transfer to New Jersey. ECF 43-1 at 16-17.
Rather, defendants assert that the convenience of parties factor is neutral. See ECF 45 at 15. In
its Opposition, Capitol urges that the convenience of the parties favors a denial of the transfer,
because “[t]he effect of a change of venue would be to simply shift the inconvenience from
Pinnacle to Capitol.” ECF 44 at 12.
The convenience of the parties factor does not favor transfer. A transfer of the case to the
District of New Jersey would serve only to shift the inconvenience from defendants to Capitol.
However, I note that it does not appear that it would be any more burdensome for
plaintiff to litigate in New Jersey than for defendants to litigate in Maryland. As indicated,
Capitol’s Maryland counsel have been admitted pro hac vice in the New Jersey Case and have
participated in that case. N.J. Case, ECF 15; see id., ECF 10.
4. Interest of Justice
A final factor for a court’s consideration is whether transfer is in the interest of justice.
This factor is “amorphous and somewhat subjective,” and allows a court to “consider many
things.” Wright and Miller, § 3854 at 313-18.
In their Motion, defendants maintain that the interest of justice favors transfer because,
given the pendency of the New Jersey Case, transfer would promote judicial economy, prevent
inconsistent judgments, and prevent waste. ECF 43-1 at 17-18. In its Opposition, Capitol argues
that the interest of justice favors maintaining the case in Maryland, because Maryland law
applies to the breach of contract claim. Capital also contends that because it filed its action in
Maryland before defendants filed their suit in New Jersey, transfer is not appropriate. ECF 44 at
In their Reply, defendants argue that the choice of law clause of the Agreement does not
apply to the parties’ respective tort claims. ECF 45 at 14. They rely on the doctrine of lex loci
delicti, which provides that the applicable law is that of the state in which the harm occurred.
See, e.g., Proctor v. Washington Metropolitan Area Transit Authority, 412 Md. 691, 726, 990
A.2d 1048, 1068 (2010). In defendants’ view, it is more likely that the law of New Jersey or
New York will apply to plaintiff’s tort claim. ECF 45 at 14.
a. Applicable Law
“Familiarity with applicable law is one of the interests of justice factors.” Aphena
Pharma Solutions-MD LLC v. BioZone Laboratories, Inc., 912 F. Supp. 2d 309, 320 (D. Md.
2012) (citing Dicken v. United States, 862 F. Supp. 91, 93-94 (D. Md. 1994)); see also Wright
and Miller § 3854 at 353-54 (“In diversity of citizenship cases, in which state law provides the
substantive rules of decision, it is an advantage to have that law applied by federal judges who
are familiar with the governing state law.”)
However, “[t]his consideration is given
‘significantly less weight when the case involves basic or sufficiently well-established . . . issues
of state law or when there is no reason to believe that the applicable law of the forum differs
markedly from the law of the proposed transferee state.’” Topiwala v. Wessell, WDQ-11-0543,
2012 WL 122411 at *8 (D. Md. Jan. 12, 2012) (quoting 15 Wright and Miller, § 3854) (alteration
in Topiwala); see, e.g., Snyder v. Bertucci's Restaurant Corp., No. 12-5382, 2012 WL 6601384
at *5 (E.D. Pa. Dec. 18 2012) (“Federal judges are frequently called upon to apply the laws of
other states, and basic tort law is not so complicated as to advocate heavily in favor of
transfer.”); Citibank, N.A. v. Affinity Processing Corp., 248 F. Supp. 2d 172, 178 (E.D.N.Y.
2003) (“New York contract law is not overly complex so as to unduly burden the South Carolina
In my view, that the Agreement calls for the application of Maryland law to the contract
claim does not weigh against transfer. Plaintiff does not claim that Maryland contract law is so
unique or complicated as to prevent a New Jersey judge from being able to discern it and apply
it. See Topiwala, 2012 WL 122411 at *8. Moreover, under the principle of lex loci delicti, the
applicable law for plaintiff’s tort claim may be that of New Jersey or New York, where the
alleged tortious conduct is said to have occurred. See ECF 4.
b. First to File Rule and Parallel Litigation
The parties offer starkly diverging views as to the significance of the pendency of the
New Jersey Case. In defendants’ view, the pendency of the New Jersey Case supports the
transfer of this case, to promote judicial efficiency, eliminate potential waste, and prevent the
possibility of inconsistent judgments. ECF 43-1 at 17-18. In plaintiff’s view, the New Jersey
Case should be dismissed or transferred to this Court under the first-to-file rule. ECF 44 at 1316.
Although the existence of related litigation in another forum and the first-to-file rule are
sometimes analyzed separately, as the parties have done here, “the policies served by transfer are
similar in both instances” and “both are properly considered as components of the interest of
justice.” Byerson v. Equifax Info. Servs., LLC, 467 F. Supp. 2d 627, 635 (E.D. Va. 2006).
Accordingly, I shall consider the two issues together.
The first-to-file rule refers to a principle used to determine “which of two identical or
substantially similar suits should proceed.” LWRC International, LLC v. Mindlab Media, LLC,
838 F. Supp. 2d 330, 337 (D. Md. 2011). Generally, the rule affords “priority, for purposes of
choosing among possible venues when parallel litigation has been instituted in separate courts, to
the party who first establishes jurisdiction.” Id.; accord Wright & Miller, § 3854 at 339-43
(“[W]hen two courts have concurrent jurisdiction over a dispute involving the same parties and
issues, as a general proposition, the forum in which the first-filed action is lodged has
Courts have recognized several exceptions to the first-to-file rule, however. For example,
the transfer of the first-filed suit to the forum of a second-filed suit is appropriate where there is a
“showing of a balance of convenience in favor of the second [forum].” Learning Network, Inc.
v. Discovery Comms., Inc., 11 Fed. App'x 297, 300 (4th Cir. 2001) (citing Ellicott Mach. Corp. v.
Modern Welding Co., 502 F.2d 178, 180 n. 2 (4th Cir. 1974)); see also, e.g., Futurewei Techs.,
Inc. v. Acacia Research Corp., 737 F.3d 704, 708 (Fed. Cir. 2013) (“Justification for an
exception [to the first-to-file rule] may be found in ‘the convenience and availability of
witnesses, . . . the possibility of consolidation with related litigation, or considerations relating to
the real party in interest.’”); Smithfield Packing Co. v. V. Suarez & Co., 857 F. Supp. 2d 581, 585
(E.D. Va. 2012) (“‘The court must balance the convenience between the two actions before
deciding whether application of the first-to-file rule is appropriate in a given situation.’”)
(citation omitted). Moreover, courts have “refused to apply the first-filed rule when the party
that files first does so with notice that the other party is about to file.” Remington Arms Co. v.
Alliant Techsystems, Inc., No. 1:03CV1051, 2004 WL 444574, at *3 (M.D.N.C. Feb. 25, 2004)
(citing, inter alia, Anheuser–Busch, Inc. v. Supreme Int'l Corp., 167 F.3d 417, 419 (8th Cir.
1999)); accord Samsung Elecs. Co. v. Rambus, Inc., 386 F. Supp. 2d 708, 724 (E.D. Va. 2005)
(“Other scenarios giving rise to exceptions to the first-to-file rule include bad faith, anticipatory
suits, and forum shopping.”).
In considering the “showing of convenience”, courts often look to the factors considered
when evaluating a motion to transfer under 28 U.S.C. § 1404(a). See Wright & Miller, § 3854 at
339-43 (“Exceptions to the first-filed rule apply when the Section 1404(a) factors weigh in favor
of giving priority to the second action.”); see also Wheaton Indus., Inc. v. Aalto Sci., Ltd., CIV.
12-6965 RMB/JS, 2013 WL 4500321, at *2 (D. N.J. Aug. 21, 2013) (“In deciding a motion to
dismiss, stay, or transfer pursuant to the first-to-file rule, a court must consider the same factors
applicable to a motion to transfer under § 1404(a).”); Winterthur Int'l Am. Ins. Co. v. Bank of
Montreal, No. 02 CIV. 6889 (RCC), 2002 WL 31521102, at *3 (S.D.N.Y. Nov. 13, 2002) (“In
considering a departure from the first-filed rule based on a balance of conveniences, a court
evaluates the same factors considered on a motion to transfer pursuant to 28 U.S.C. § 1404(a).”).
In this case, plaintiff won the metaphorical race to the courthouse when it filed suit in a
Maryland State court. But, it did not win the race to federal court. Notably, even before the
summons was issued by the Maryland State court, defendants filed suit in federal court in New
Jersey. Further, defendants were not served in the State case until about two weeks after they
had filed suit in New Jersey. And, the federal case had been pending for about a month in the
New Jersey federal court when the underlying case was removed to the federal court in
In any event, I am of the view that the balance of convenience factors indicates that it is
more convenient to litigate this case in the District of New Jersey. As discussed, the merchants
identified in the Complaint (ECF 4, ¶¶ 22-23) are potential witnesses, and are all located in New
Jersey and New York. See ECF 43-5, ¶¶ 12-13. Moreover, in his Declaration of March 31,
2016, Di Donato stated that all services provided by Pinnacle under the Agreement were
rendered in New Jersey and New York. ECF 43-5, ¶ 12. Thus, to the extent that there are other
merchants not identified in the Complaint, those parties are likely located in New Jersey or New
York. And, Capitol has not contested Di Donato’s assertions regarding the location of witnesses,
other than to say that other potential witnesses may be in Pennsylvania, Georgia, Michigan, and
ECF 44 at 11; see ECF 44-5, ¶ 6.
Other than plaintiff (and perhaps plaintiff’s
employees), 6 plaintiff has no witnesses in Maryland. Given the number of potential witnesses in
New Jersey and New York, the convenience of witnesses factor points strongly towards the
transfer of the case to New Jersey.
In their Reply, Pinnacle and Di Donato assert that they “do not believe that any other
relevant [Capitol] employees exist, except for Mr. Schoenbaum.”
To be sure, and as indicated, Capitol is entitled to some deference as to its choice of
forum; it is a Maryland company that elected to file suit in its home state. But, the weight of that
factor must be considered in light of the conduct giving rise to this suit, which occurred almost
exclusively outside of Maryland. And, it appears that plaintiff and defendants would be equally
inconvenienced by litigating outside of their home state.
Finally, although Maryland law applies to plaintiff’s breach of contract claim, Capitol
does not claim, with good reason, that Maryland law is so complicated or unique that a New
Jersey judge would be unable to discern it and apply it. And, applying the doctrine of lex loci
delicti, the law of New Jersey or New York would likely apply to plaintiff’s claim of tortious
On balance, the convenience factors point towards the transfer of the case to New Jersey.
Accordingly, to the extent the first-to-file rule applies here, I decline to adhere to it. See
Learning Network, Inc., 11 F. App'x at 300. 7
I turn to defendants’ argument that the transfer of the case to the District of New Jersey
will promote judicial economy, prevent waste, and avoid the risk of inconsistent judgments.
“A significant factor in considering the interests of justice is ‘avoiding duplicative
litigation in courts,’ and the Court ‘may appropriately consider the conservation of judicial
resources and comprehensive disposition of litigation.’” Mamani, 547 F. Supp. 2d at 474
(quoting Cronos Containers, Ltd., 121 F. Supp. 2d at 466); see also Wright & Miller, § 3854
(“[M]any courts have transferred to a forum in which other actions arising from the same
transaction or event, or which were otherwise related, were pending.”). When a similar case is
Defendants have advanced other arguments supporting their position that the first-to-file
rule should not be applied in this case. See ECF 43-1 at 18-23; ECF 45 at 4-10. In light of my
disposition, I need not address these contentions.
already pending in another district, transfer of related claims is “favored” because it “may
facilitate efficient pretrial proceedings and discovery” and also “because it avoids inconsistent
results.” D2L, 671 F. Supp. 2d at 783. Moreover, there is “judicial economy in having the same
judge consider the same underlying facts and issues only once . . . .” U.S. Ship Mgmt., Inc. v.
Maersk Line, Ltd., 357 F. Supp. 2d 924, 939 (E.D. Va. 2005).
What the Supreme Court said in Cont'l Grain Co. v. The FBL-585, 364 U.S. 19, 26
(1960), is pertinent here, id.: “[A] situation in which two cases involving precisely the same
issues are simultaneously pending in different District Courts leads to the wastefulness of time,
energy and money that [§] 1404(a) was designed to prevent.” See also D2L Ltd., supra, 671 F.
Supp. 2d at 783 (“The interest of justice weighs heavily in favor of transfer when a related action
is pending in the transferee forum.”).
Here, there can be little doubt that the New Jersey case and the case sub judice are part
and parcel of the same dispute and are two sides of the same coin. See generally, N.J. Case, ECF
18 (noting that the two cases involve “substantially the same parties and dispute”). Although the
parties disagree as to who is to blame for the breakdown of the Agreement in January 2016, what
is clear is that the litigation here and in New Jersey centers on that implosion. ECF 4, ¶¶ 15-32;
ECF 1 in N.J., ¶¶ 24-33. Accordingly, it will promote judicial economy, conserve the parties’
resources, and reduce the burden on potential witnesses to have one court resolve both cases.
Moreover, in light of the common factual and legal issues, there is a risk of inconsistent
judgments if the two cases proceed in two fora before two finders of fact.
For the reasons stated above, the pendency of the New Jersey Case supports the transfer
of the case to the District of New Jersey.
In my view, the balance of factors strongly supports the transfer of this case to the
District of New Jersey. Therefore, I shall GRANT the Motion (ECF 43).
An Order follows, consistent with this Memorandum Opinion.
Date: May 23, 2017
Ellen Lipton Hollander
United States District Judge
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?