The Brown Publishing Company Liquidating Trust v. Brown et al

Filing 24

MEMORANDUM & ORDER granting 1 Motion to Withdraw Reference Bankruptcy Court Adversary Proceeding Case Number 12-08193(REG); dismissing 4 Motion for Joinder; denying 16 Motion to Strike; Appellant's motion to strike is DENIED. (D ocket Entry 16.) Sodalis, LLC's joinder motion is DISMISSED AS MOOT. (Docket Entry 4.) Appellees' motion to withdraw the reference and transfer venue is GRANTED. (Docket Entry 1.) The reference to the Bankruptcy Court is hereby WITHDRAWN, a nd this case is hereby TRANSFERRED to the United States District Court for the Southern District of Ohio. The Clerk of the Court is directed to amend the caption by removing all appellees except for Richard Haines, Dorothy Haines, and Catherine Brinnon Brown. The Clerk of the Court is also directed to mark this case CLOSED. So Ordered by Judge Joanna Seybert on 2/1/2017. Bankruptcy Case No. 10-73295. C/ECF (Valle, Christine) (Main Document 24 replaced on 2/2/2017) (Valle, Christine).

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
----------------------------------------X
THE BROWN PUBLISHING COMPANY
LIQUIDATING TRUST,
Appellant,
-againstROY E. BROWN, CLARENCE J. BROWN, III,
CLARENCE BROWN, JR., JOYCE E. BROWN,
DOROTHY HAINES, RICHARD HAINES,
CATHERINE BROWN BRINNON, CRJ
INVESTMENTS LLC, AEG EQUITY LTD.,
SODALIS, LLC, B’S NEST PARTNERSHIP,
and AEG EQUITY HOLDINGS, LTD.

MEMORANDUM & ORDER
15-MC-0531(JS)
Bankruptcy Case No.:
10-73295(REG)
Adversary Proc. No.:
12-08193(REG)

Appellees.
----------------------------------------X
APPEARANCES
For Appellant:
Edward M. Fox, Esq.
Polsinelli PC
900 Third Avenue
New York, NY 10022
Eric Todd Moser, Esq.
Rich Michaelson Magaliff Moser, LLP
335 Madison Avenue, Ninth Floor
New York, NY 10173
Jon Paul Robbins, Esq.
Lee S. Shalov, Esq.
Wade Christopher Wilkinson, Esq.
McLaughlin & Stern, LLP
260 Madison Avenue
New York, NY 10016
Sonya J. Brouner, Esq.
Law Office of Sonya J. Brouner
8 Loewen Court
Rye, NY 10580
For Appellees:
Roy E. Brown, Clarence J.
Brown, III, CRJ Invs. LLC,
Sodalis, LLC, B’s Nest

Alan E. Marder, Esq.
Meyer, Suozzi, English & Klein, P.C.
900 Stewart Avenue, Suite 300

Partnership, & AEG Equity
Holdings, Ltd.

PO Box 9194
Garden City, NY 11530

Clarence Brown, Jr. &
Joyce E. Brown

Charles M. Meyer, Esq.
Santen & Hughes
600 Vine Street, Suite 2700
Cincinnati, OH 45202

Dorothy & Richard Haines

David Blansky, Esq.
LaMonica Herbst & Maniscalco
3305 Jerusalem Avenue
Wantagh, NY 11793

Catherine Brown Brinnon

Adam Kegley, Esq.
Frost Brown Todd LLC
250 West Main Street, Suite 2800
Lexington, KY 40507
James Frooman, Esq.
Frost Brown Todd LLC
3300 Great American Tower
301 East Fourth Street
Cincinnati, OH 45202
Thomas A. Draghi, Esq.
Westerman Ball Ederer Miller &
Sharfstein, LLP
1201 RXR Plaza
Uniondale, NY 11556

AEG Equity Ltd.

James Frooman, Esq.
Frost Brown Todd LLC
3300 Great American Tower
301 East Fourth Street
Cincinnati, OH 45202

SEYBERT, District Judge:
The
(“Appellant”)

Brown
filed

Publishing
an

adversary

Company

Liquidating

proceeding

against

Trust
various

defendants alleging claims under federal law and Ohio state law.

2

The remaining defendants are Richard Haines, Dorothy Haines, and
Catherine Brinnon Brown (collectively, “Appellees”).1
Three motions are pending before the Court.

First,

Appellees ask this Court (i) to withdraw the reference of the
adversary proceeding from the United States Bankruptcy Court for
the Eastern District of New York (the “Bankruptcy Court”) and
(ii) to change venue to the United States District Court for the
Southern District of Ohio where the operative facts took place and
several witnesses reside.
Second,

before

being

(Mot. to Withdraw, Docket Entry 1.)

dismissed

from

the

case,

(“Sodalis”) moved to join the previous motion.
Docket Entry 4.)

Sodalis,

LLC

(Joinder Mot.,

Third, Appellant moves to strike declarations

submitted for the first time in reply papers.

(Mot. to Strike,

Docket Entry 16.)
For the reasons set forth below, Appellant’s motion is
DENIED; Sodalis motion is DISMISSED AS MOOT, and Appellees’ motion
is GRANTED.

Thus, the reference to the Bankruptcy Court is hereby

By Memorandum and Order (“M&O”) dated March 4, 2015, the
Bankruptcy Court granted summary judgment in favor of defendants
on various claims. (Mar. 22, 2015 M&O, Case No. 12-08193-reg,
Docket Entry 242, at 34.) In light of this ruling and separate
stipulations, Richard Haines, Dorothy Haines, and Catherine
Brinnon Brown are the remaining defendants and thus the
remaining appellees. (See Case No. 12-08193-reg, Docket
Entries 239, 239-1, 251, 251-1.) The Clerk of the Court is
respectfully directed to amend the caption accordingly.
1

3

WITHDRAWN, and this case is hereby TRANSFERRED to the United States
District Court for the Southern District of Ohio.
BACKGROUND
The Court assumes familiarity with the underlying facts
and proceedings, which are referenced only as necessary to explain
the Court’s decision.2
I.

Procedural History
The Brown Publishing Company (“BPC”) was a family-owned

newspaper business incorporated under Ohio law.
M&O at 5.)

(Mar. 22, 2015

The former chief executive officer was Roy Brown.

(Am. Compl., Docket Entry 1 at 25-61, ¶ 1.)
On April 30 and May 1, 2010, the BPC and its debtor
affiliates (collectively, the “Debtors”) filed for relief under
Chapter 11 of Title 11 of the Bankruptcy Code in the Eastern
District of New York.

(Am. Compl. ¶ 19.)

On May 27, 2011, the

Debtors filed a Chapter 11 Plan, which was ultimately confirmed.
(Am. Compl. ¶¶ 20–21.)
On

April

30,

2012,

Appellant

filed

an

adversary

proceeding against Roy Brown, members of his family, and entities
that the Browns controlled.

(See generally Am. Compl.)

Virtually

all of the defendants resided in Ohio at one point, and some

The Adversary Proceeding is designated as Case No. 12-08193reg. The Bankruptcy Case is designated as Case No. 8-10-73295reg. Related cases can be found at Case Nos. 12-mc-00452(JS)
and 12-mc-00535(JS).
2

4

continue to do so.

(Am. Compl. ¶¶ 4–15.)

In Appellant’s view,

the defendants enriched themselves with fraudulent transfers at
the

expense

of

BPC

creditors.

(Am.

Compl.

¶¶

1,

83–207.)

Specifically, BPC entered into stock redemption agreements, among
others, with Appellees.3
The Amended Complaint asserts, in pertinent part, the
following causes of action:
Count 6: An intentional fraudulent transfer claim under the
Bankruptcy Code and Ohio statute law against Catherine
Brinnon Brown. (Am. Compl. ¶¶ 118–20.)
Count 7: A constructive fraudulent transfer claim under the
Bankruptcy Code and Ohio statute law against Catherine
Brinnon Brown. (Am. Compl. ¶¶ 121–24.)
Count 8: A constructive fraudulent transfer claim under the
Bankruptcy Code and Ohio statute law against Catherine
Brinnon Brown. (Am. Compl. ¶¶ 125–28.)
Count 9: An unjust enrichment claim under the Bankruptcy Code
and Ohio common law against Catherine Brinnon Brown. (Am.
Compl. ¶¶ 129–32.)
Count 10: A constructive fraudulent transfer claim under the
Bankruptcy Code and Ohio statute law against Richard Haines.
(Am. Compl. ¶¶ 133–37.)
Count 11: A constructive fraudulent transfer claim under the
Bankruptcy Code and Ohio statute law against Richard Haines.
(Am. Compl. ¶¶ 138–41.)
Count 12: An intentional fraudulent transfer claim under the
Bankruptcy Code and Ohio statute law against Dorothy Haines.
(Am. Compl. ¶¶ 142–45.)

(See Case No. 12-08193-reg, Docket Entries 107-3, 107-4, 107-5,
107-6, 107-7, 107-8, 194-7, 194-8, 194-13, 194-14, 194-15, 19416.)
3

5

Count 13: A constructive fraudulent transfer claim under the
Bankruptcy Code and Ohio statute law against Dorothy Haines.
(Am. Compl. ¶¶ 146–49.)
Count 14: A constructive fraudulent transfer claim under the
Bankruptcy Code and Ohio statute law against Dorothy Haines.
(Am. Compl. ¶¶ 150–53.)
Count 15: An unjust enrichment claim under the Bankruptcy
Code and Ohio common law against Dorothy Haines. (Am. Compl.
¶¶ 154–58.)
Count 21: An intentional fraudulent transfer claim under the
Bankruptcy Code and Ohio statute law against Catherine
Brinnon Brown. (Am. Compl. ¶¶ 183–86.)
Count 22: A constructive fraudulent transfer claim under the
Bankruptcy Code and Ohio statute law against Catherine
Brinnon Brown. (Am. Compl. ¶¶ 187–90.)
Count 23: A constructive fraudulent transfer claim under the
Bankruptcy Code and Ohio statute law against Catherine
Brinnon Brown. (Am. Compl. ¶¶ 191–93.)
Count 24: A preferential transfer claim under the Bankruptcy
Code against Catherine Brinnon Brown. (Am. Compl. ¶¶ 194–
200.)
Count 26: Disallowance of any claims of Appellees against the
Debtors. (Am. Compl. ¶¶ 204–207.)4
Although Appellees demanded a jury trial, they did not file a proof
of claim.

(See generally Case No. 8-10-73295-reg.)

Nor did they

assert any counterclaims in their respective answers.5

Because Appellees did not file any proof of claims, it appears
that this count is moot.
4

Appellees’ answers can be found at Docket Entry 1 at pages 62–
89 (Dorothy Haines); pages 90–117 (Richard Haines); and
pages 118–141 (Catherine Brinnon Brown).
5

6

In July and August 2012, various defendants filed a
motion to withdraw the reference from the Bankruptcy Court to this
Court.6

By Memorandum and Order dated July 31, 2013, this Court

denied the motions as premature but granted leave to renew when
the case was ready for trial.

(July 31, 2013 M&O, Case No. 12-

mc-00452(JS), Docket Entry 21, at 3.)
Since

then,

discovery

has

been

substantive motions have been adjudicated.
ready.
II.

completed,

and

all

The case is now trial-

(See Mar. 22, 2015 M&O at 34.)

Potential Witnesses at Trial
Essentially,

potential witnesses.7

the

parties

have

identified

fourteen

They are as follows:

1. Richard Haines, minority shareholder of the BPC (Ohio).
2. Dorothy Haines, minority shareholder of the BPC (Ohio).
3. Roy Brown, former President and CEO of the BPC (Ohio).

(Mot. to Withdraw by Clarence Brown, Jr. & Joyce Brown, Case
No. 12-mc-00452-JS, Docket Entry 1; Mot. to Withdraw by Dorothy
& Richard Haines, Case No. 12-mc-00535-JS, Docket Entry 1.)
6

On June 3, 2015, Richard and Dorothy Haines submitted their
Second Amended Initial Disclosures, which listed potential
witnesses. (Second Am. Initial Disclosures, Ex. A, Docket Entry
20-1, at 3–4.) One month earlier, Richard Haines and Catherine
Brinnon Brown submitted declarations that detailed the testimony
of several witnesses with specificity. (Brown Decl., Docket
Entry 13, ¶¶ 13-17; Haines Decl., Docket Entry 14, ¶¶ 5, 12.)
The parties also submitted information regarding their
respective expert witnesses. (Warshavsky Report, Case No. 1208193-reg, Docket Entry 209-25, at 32; Risius Decl., Case No.
12-08193-reg, Docket Entry 197, ¶ 27.)
7

7

4. B. Joseph Ellingham, former Vice President and Chief
Financial Officer of the BPC (Florida).
5. Paul Hogan, at one time a Managing Director at National
City Bank8 (Pennsylvania).
6. George Mestre, at one time the Vice President of National
City Bank (Ohio).
7. An Individual with relevant knowledge at Wells Fargo Bank,
N.A. (unknown).
8. Joel Dempsey, Esq., former in-house counsel to the BPC
(Ohio).
9. Edward M. Fox., Esq., pre-petition counsel to the BPC (New
York).
10. Michael Grimes, former Vice President of National City
Bank (Pennsylvania).
11. Philip W. Murray (New Mexico).
12. Pete Koening, accountant for Catherine Brinnon Brown
(Ohio).
13. Mark Warshavsky, expert witness for Appellant (New York).
14. Jeffrey Risius, expert witness for Appellees (Michigan).
For reasons to be explained below, Dorothy Haines is ninety-seven
and currently in frail health.

(Haines Decl. ¶ 8.)

DISCUSSION
I.

Appellant’s Motion to Strike Declarations
To support a motion to transfer venue, the moving party

should

submit

an

affidavit

that

lists

potential

principal

National City Bank acted as an agent for lenders that provided
the BPC with credit. Wells Fargo Bank, N.A., acted as a
syndication agent. (Second Am. Initial Disclosures at 4.)
8

8

witnesses and their anticipated testimony.

HomeoPet LLC v. Speed

Lab. Inc., No. 14-CV-0663, 2014 WL 2600136, at *17 (E.D.N.Y.
June 11, 2014) (citing EasyWeb Innovations, LLC v. Facebook, Inc.,
888 F. Supp. 2d 342, 350 (E.D.N.Y. 2012)).

For the first time on

reply, Appellees submitted the declarations of Richard Haines and
Catherine

Brinnon

Brown

(collectively,

the

“Declarations”)

ostensibly to satisfy this requirement.
Appellant moves to strike the Declarations as improper
because they were not filed with Appellees’ initial moving papers.
However, this Court has wide discretion to consider arguments
raised for the first time on reply.

Dixon v. NBCUniversal Media,

LLC, 947 F. Supp. 2d 390, 396 (S.D.N.Y. 2013). Indeed, the Court’s
primary

concern

is

whether

the

opposing

party

suffered

any

prejudice. Id.; see also Revise Clothing, Inc. v. Joe’s Jeans
Subsidiary, Inc., 687 F. Supp. 2d 381, 387 (S.D.N.Y. 2010) (denying
a motion to strike when the moving party suffered no prejudice
even though it was “plainly improper to submit on reply evidentiary
information that was available to the moving party at the time
that it filed its motion and that is necessary in order for that
party to meet its burden”).
Although the Declarations contain new facts, Appellant
has filed two briefs in support of this motion discussing how these

9

issues are immaterial.9

(Appellant’s Decls. Br., Docket Entry 16,

¶¶ 7-12; Appellant’s Decls. Reply Br., Docket Entry 21, ¶¶ 13-16.)
Thus, Appellant suffered no prejudice because it had a chance to
respond, and the Court will consider the Declarations.
Separately,

the

Court

is

mindful

that

Appellees’

thirteen-page reply brief in connection with their withdrawal and
venue motion exceeds the ten-page limit under the Local Rules.
(Appellee’s Reply Br. at 4.)
this

Court

enjoys

“broad

Like the previous issue, however,

discretion

to

determine

whether

to

overlook a party’s failure to comply with local court rules.”
Holtz v. Rockefeller & Co., 258 F.3d 62, 73 (2d Cir. 2001).
Appellees’ violation, though improper, does not warrant a summary
dismissal.
II.

Accordingly, Appellant’s motion is DENIED.

Appellees’ Motion
The Court will address the withdrawal and venue aspects

of Appellees’ motion separately.

As an initial matter, because

Sodalis has been dismissed from the Adversary Proceeding, its
joinder motion is DISMISSED AS MOOT.
A.

Withdrawing the Reference from the Bankruptcy Court
In light of the Supreme Court’s decision in Stern v.

Marshall, 564 U.S. 462, 131 S. Ct. 2594, 180 L. Ed. 2d 475 (2011),

Appellant reserved the right to respond, (Appellant’s Opp. Br.,
Docket Entry 11, at 11 n.5), and Appellees did not oppose this
request. (Appellees’ Reply Br., Docket Entry 12, at 3 n.2).
9

10

Appellees seek to withdraw the reference to the Bankruptcy Court
under 28 U.S.C. § 157(d).

Appellant does not oppose this request.

(Appellant’s Opp. Br. at 2 n.1.)
Under
flexibility

to

Section

157(d),

“withdraw,

in

district

whole

or

courts

in

part,

have
any

broad

case

or

proceeding referred under this section, on its own motion or on
timely motion of any party, for cause shown.”

28 U.S.C. § 157(d).

The term “cause” is not defined.
In determining whether cause was shown, the Court of
Appeals for the Second Circuit previously considered (1) “whether
the claim or proceeding is core or non-core,” (2) “whether it is
legal or equitable,” and (3) whether withdrawal is supported by
“considerations of efficiency, prevention of forum shopping, and
uniformity

in

the

administration

of

bankruptcy

law.”

Orion

Pictures Corp. v. Showtime Networks, Inc., 4 F.3d 1095, 1101 (2d
Cir. 1993).

In the wake of Stern, however, “the relevant inquiry

under the first prong of the Orion test is not whether a matter is
core

or

non-core,

but

whether

the

bankruptcy

authority to finally adjudicate the matter.”10

court

has

the

Thaler v. Parker,

525 B.R. 582, 585 (E.D.N.Y. 2014); see also Lehman Bros. Holdings
Inc. v. Intel Corp., 18 F. Supp. 3d 553, 557 (S.D.N.Y. 2014)

The Court is aware of the intra-district split over the extent
to which Stern’s holding modifies the Orion framework. In re:
FKF 3, LLC, No. 13-CV-3601, 2016 WL 4540842, at *5–6 (S.D.N.Y.
Aug. 30, 2016) (collecting cases and noting three approaches).
10

11

(“While the core/non-core determination is an important factor,
courts

have

repeatedly

emphasized

that

this

factor

is

not

dispositive of a motion to withdraw a reference.”); Mishkin v.
Ageloff,

220

B.R.

784,

800

(S.D.N.Y.

1998)

(“[T]he

critical

question is efficiency and uniformity.”).
“[A] bankruptcy court may enter final judgment only
(1) if the claim involves a public right; (2) the process of
adjudicating

the

creditor’s

proof

of

claim

would

resolve

a

counterclaim; or (3) the parties consent to final adjudication by
the

bankruptcy

omitted).

court.”

Thaler,

525

B.R.

at

585

(citations

First, the Adversary Proceeding is largely premised on

fraudulent transfer claims, which fall outside of the public rights
exception.

See, e.g., In re Lyondell Chem. Co., 467 B.R. 712, 720

(S.D.N.Y. 2012) (“[A] fraudulent conveyance claim against a person
who has not submitted a claim against a bankruptcy estate, brought
solely to augment the bankruptcy estate, is a matter of private
right.”).

Second, Appellees have not filed a proof of claim, and

third, they have not consented to final adjudication by the
Bankruptcy Court.

Therefore, the Bankruptcy Court does not have

authority to enter final judgment, at minimum, on the fraudulent
transfer claims.
Based on the remaining Orion factors, the Court finds
that cause exists to withdraw the case from the Bankruptcy Court.
See In re Lyondell Chem. Co., 467 B.R. at 723.
12

This case is trial-

ready, and withdrawal would not impose any further delays. Because
the Bankruptcy Court cannot enter final judgment on the fraudulent
conveyance claims, withdrawal does not promote forum shopping.
Nor would withdrawal affect the efficient administration of the
bankruptcy estate because the Chapter 11 Plan has already been
confirmed.

Thus, in the Court’s discretion, the reference to the

Bankruptcy Court is hereby withdrawn.
B.

Transferring Venue to the Southern District of Ohio
Assuming

that

the

Adversary

Proceeding

is

a

core

proceeding, Appellees seek to change venue to the Southern District
of Ohio under 28 U.S.C. §§ 1408 and 1412.11

See Official Comm. of

Asbestos Claimants of G–I Holding, Inc. v. Heyman, 306 B.R. 746,
749 (S.D.N.Y. 2004) (“Where a party seeks to transfer venue for a
core proceeding, the applicable statute is 28 U.S.C. § 1412.”)
(internal

quotation

marks

and

citation

omitted).

Under

Section 1412, a district court may transfer a case under Title 11
to another district if the transfer is either (1) “in the interest
of justice” or (2) “for the convenience of the parties.” 28 U.S.C.
§ 1412; see also Enron Corp. v. Arora (In re Enron Corp.), 317
B.R. 629, 638–39 (S.D.N.Y. 2004), (“[T]ransferability pursuant to
[section] 1412 is an either-or test, not a two-fold one.”) (second

Appellant asserts that the Adversary Proceeding is a core
proceeding. (Am. Compl. ¶ 18.) Also, Appellant has not
challenged that venue is proper under Section 1408.
11

13

alteration in original; internal quotation marks and citations
omitted).

The analysis is a context-specific inquiry subject to

the Court’s discretion. See, e.g., In re Northwest Airlines Corp.,
384 B.R. 51, 60 (S.D.N.Y. 2008).

Appellees, as the moving party,

bear the burden of proving that transfer is appropriate “by a
preponderance of the evidence.”

In re Manville Forest Prods.

Corp., 896 F.2d 1384, 1390 (2d Cir. 1990).
By and large, Appellees contend that transfer is proper
because: (1) a greater number of party and non-party witnesses
reside in Ohio, and (2) the underlying facts occurred in Ohio.
(Appellees’ Br. ¶¶ 36-37.)

Appellant’s argument to the contrary

is rooted in the following facts: (1) New York is Appellant’s
choice of forum; (2) Appellant’s counsel and expert witness reside
in New York; (3) the case hinges on expert witnesses, not lay
witnesses; and (4) BPC’s corporate documents are located in New
York.

(Appellant’s Opp. Br. ¶¶ 25-26, 31.)
The Court finds that the Adversary Proceeding should be

transferred to the Southern District of Ohio based on two key
considerations:

(1) the

convenience

of

the

witnesses

parties and (2) the location of operative events.12

and

the

Because both

Even if the Adversary Proceeding was a non-core proceeding and
the Court applied Section 1404(a), the result would not change.
See 28 U.S.C. § 1404(a) (“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 Delaware
12

14

parties analyzed the factors articulated in (In re Enron Corp.),
317 B.R. 629 (S.D.N.Y. 2004), the Court largely follows the same
format for uniformity.

(Appellees’ Br. ¶ 33; Appellant’s Opp. Br.

¶¶ 24, 33; Appellees’ Reply Br. ¶ 5.)
1.

Interests of Justice

Concerning the “interests of justice,” this Court will
consider the following six factors: (i) “plaintiff’s original
choice of forum,” (ii) “interests of judicial economy,” (iii)
forum’s “interest in having the controversy decided within its
borders,”

(iv)

“economic

and

efficient

administration

of

the

bankruptcy estate,” (v) the ability “to receive a fair trial in
each of the possible venues,” and (vi) “the enforceability of any
judgment.”

In re Enron Corp., 317 B.R. at 638–39.

As explained

below, this analysis is essentially neutral.
a.

Plaintiff’s Choice of Forum

Generally, a plaintiff’s choice of forum carries great
weight.

See Coker v. Bank of Am., 984 F. Supp. 757, 766 (S.D.N.Y.

1997) (collecting cases).

But this factor does not receive the

same deference “when the forum chosen has no material connection
with the action.”

Invivo Research, Inc. v. Magnetic Resonance

Equip. Corp., 119 F. Supp. 2d 433, 438 (S.D.N.Y. 2000).

Here, the

Trust Co. v. Wilmington Trust, N.A., 534 B.R. 500, 519 (S.D.N.Y.
2015) (“In determining whether to transfer under 28 U.S.C.
§ 1412, courts consider the same factors as under the general
transfer provision, 28 U.S.C. § 1404(a).”) (citation omitted).
15

operative facts took place in Ohio where BPC maintained its
principal

business;

where

stock

redemption

agreements

were

executed; and where virtually all of the defendants resided at one
point.

(Am. Compl. ¶¶ 4–15.)

Thus, this factor does not weigh in

favor of retaining jurisdiction.
b.

Interests of Judicial Economy

“‘Although certainly not decisive, docket conditions or
calendar

congestion

of

both

the

transferee

and

transferor

districts is a proper factor and is accorded some weight.’”

Neil

Bros. Ltd. v. World Wide Lines, Inc., 425 F. Supp. 2d 325, 334
(E.D.N.Y. 2006) (quoting Miller v. Bombardier Inc., No. 93-CV0376, 1993 WL 378585, at *5 (S.D.N.Y. Sept. 23, 1993)).

Based on

recent analysis dated September 30, 2016, the Southern District of
Ohio

has

6,810

cases

pending

with

eight

judgeships

(or

approximately 851 cases per judge), and the Eastern District of
New York has 12,870 cases pending with fifteen judgeships (or 858
cases per judge).13
c.

As such, these factors are virtually neutral.
Forum Interest

Although the Amended Complaint asserts claims under Ohio
law, this fact carries little weight. See Vassallo v. Niedermeyer,
495

F.

Supp.

757,

760

(“The

fact

that

the

law

of

another

jurisdiction governs the outcome of the case is a factor accorded

See http://www.uscourts.gov/sites/default/files/data_tables/
fcms_na_distprofile0930.2016.pdf.
13

16

little weight on a motion to transfer . . . especially in an
instance such as this where no complex questions of foreign law
are involved.”)

In fact, the Bankruptcy Court applied Ohio law in

its Memorandum and Order dated March 4, 2015.

(Mar. 4, 2015 M&O

at 2.)
d.

Remaining Factors

The remaining factors were not addressed by the parties
or are inapplicable.

In sum, transfer of venue is not appropriate

under this set of Enron factors.
2.

Convenience of the Parties

However, transfer is appropriate “for the convenience of
the parties.”

28 U.S.C. § 1412.

Under this analysis, the Court

will consider these five Enron factors: (i) “the convenience of
the witnesses and the parties and their relative physical and
financial condition,” (ii) “the location of the plaintiff and the
defendant,” (iii) “the ease of access to the necessary proof,”
(iv)

“the

witnesses,”
witnesses.”

availability
and

(v)

of
“the

the

subpoena

expense

of

power

for

obtaining

In re Enron Corp., 317 B.R. at 639.

unwilling
unwilling

In addition, the

Court will consider the location of operative events.

See Pall

Corp. v. PTI Techs., Inc., 992 F. Supp. 196, 200 (E.D.N.Y. 1998)
(“Where the operative facts occurred is an obvious factor to
consider.”); see also WD Encore Software, LLC v. The Software
MacKiev Co., No. 15-CV-6566, 2016 WL 1056628, at *3 (W.D.N.Y.
17

Mar. 17, 2016) (recognizing that in a venue transfer motion, “other
factors may be considered in the court’s discretion”) (citations
omitted).
a.

Convenience of Witnesses and Parties

“The convenience of parties and witnesses is generally
the most important factor in a court’s determination of whether to
grant a motion for transfer.”

Dwyer v. Gen. Motors Corp., 853 F.

Supp. 690, 692 (S.D.N.Y. 1994) (citations omitted).
witnesses are weighed equally.

But not all

“The convenience of non-party

witnesses is accorded more weight than that of party witnesses.”
Indian Harbor Ins. Co. v. Factory Mut. Ins. Co., 419 F. Supp. 2d
395, 402 (S.D.N.Y. 2005) (citations omitted).

The convenience of

expert witnesses and witnesses who neither reside in the current
district nor the proposed district are “accorded little if any
weight.”

Fullwood v. SDH Servs. West, LLC, No. 16-CV-0001, 2016

WL 3951186, at *2–3 (S.D.N.Y. July 20, 2016).

Finally, “the

convenience of counsel is not an appropriate factor to consider on
a motion to transfer.”

Invivo, 119 F. Supp. 2d at 438.

Here, two potential witnesses reside in New York: a nonparty

witness

Warshavsky).

(Edward

M.

Fox)

and

an

expert

witness

(Mark

On the other hand, six potential witnesses reside in

Ohio: two party witnesses (Dorothy and Richard Haines) and four
non-party witnesses (Roy Brown, George Mestre, Joel Dempsey, and

18

Pete Koening).

The remaining six witnesses reside elsewhere, and

the Court need not consider the convenience of party attorneys.
While balancing the competing impacts and costs, the
Court makes a few observations.

First, although Dorothy Haines’

age and physical condition support Ohio, Appellant asserts that
she is unlikely to testify because neither party deposed her and
Richard

Haines

could

provide

the

relevant

information.

(Appellant’s Decls. Br. ¶ 7 n.2.)

Second, the Southern District

of Ohio is located in Cincinnati.

George Mestre, who is located

in Cleveland, would need to travel approximately 250 miles to the
courthouse.

(See Second Am. Initial Disclosures at 2.)

unclear whether Peter Koening resides in Cincinnati.
¶¶ 14, 17.)

It is

(Brown Decl.

However, the other Ohio witnesses do reside in

Cincinnati.
In its discretionary judgment, the Court finds that the
convenience of the witnesses favors Ohio.

In rebuttal, Appellant

contends that the case “hinge[s] on expert analysis,” obviating
the need for lay witnesses.
the

expert

witnesses

would

established by lay witnesses.

(Appellant’s Decls. Br. ¶ 2.)
need

to

rely

on

the

But

foundation

Thus, this argument is unavailing,

and the Court maintains that this factor supports a transfer.
b.

Location of Operative Events

As courts in this Circuit have made clear, “‘[t]he
location of the operative events is a primary factor.”
19

Goggins v.

Alliance

Capital

Mgmt.,

L.P.,

279

F.

Supp.

2d

228,

233

(S.D.N.Y. 2003) (quoting Billing v. Commerce One, Inc., 186 F.
Supp. 2d 375, 376 (S.D.N.Y. 2002)).

Despite Appellant’s choice of

forum, the facts at issue did not occur in New York, and that alone
provides a good reason to transfer.

See Viacom Int’l, Inc. v.

Melvin Simon Prods., Inc., 774 F. Supp. 858, 868 (S.D.N.Y. 1991)
(“Courts

routinely

transfer

cases

when

the

principal

events

occurred, and the principal witnesses are located, in another
district.”); cf. Jacobsen v. Dhundale, No. 15-CV-6677, 2016 WL
94256, at *1 (S.D.N.Y. Jan. 1, 2017) (“Defendants have amply
demonstrated

that

major

factors

in

this

action,

including

convenience of the witnesses and parties and locus of operating
facts, weigh in favor of transfer of venue to [another district].
These factors outweigh plaintiff’s own choice of forum.”).
c.

Location of Plaintiff and Defendants

Appellant is located in New York, and Appellees are
located in Ohio.

Accordingly, this factor is neutral.

d.

Ease of Access to Proof

Appellant asserts that “all of BPC’s records are located
in New York.”

(Appellant’s Opp. Br. ¶ 36.)

“However, the Court

does not view this factor as particularly significant given the
technological age in which we live, with the widespread use of,
among other things, electronic document production.”
F. Supp. 2d at 352.

EasyWeb, 888

Furthermore, Appellant has not identified any
20

documents that are “very voluminous or difficult to convert into
electronic form for electronic distribution.”

Eres N.V. v. Citgo

Asphalt Ref. Co., 605 F. Supp. 2d 473, 481 (S.D.N.Y. 2009).
e.

Remaining Factors

In their declarations, Richard Haines and Catherine
Brinnon Brown did not address the expense of obtaining unwilling
witnesses or the availability of subpoena power.

Thus, these

factors are neutral.
In the Court’s sound discretion, two factors heavily
weigh in favor of transferring venue: (1) the convenience of the
witnesses and the parties and (2) the location of operative events.
On that basis, the Adversary Proceeding should be transferred to
the Southern District of Ohio, and Appellees’ motion is GRANTED.

[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK.]

21

CONCLUSION
Appellant’s
Entry 16.)

motion

to

strike

is

DENIED.

(Docket

Sodalis, LLC’s joinder motion is DISMISSED AS MOOT.

(Docket Entry 4.)

Appellees’ motion to withdraw the reference and

transfer venue is GRANTED.

(Docket Entry 1.)

The reference to

the Bankruptcy Court is hereby WITHDRAWN, and this case is hereby
TRANSFERRED to the United States District Court for the Southern
District of Ohio.
The Clerk of the Court is directed to amend the caption
by removing all appellees except for Richard Haines, Dorothy
Haines, and Catherine Brinnon Brown.

The Clerk of the Court is

also directed to mark this case CLOSED.

SO ORDERED.

/s/ JOANNA SEYBERT______
Joanna Seybert, U.S.D.J.
Dated:

February
1 , 2017
Central Islip, New York

22