Hulen et al v. Crane Co. et al

Filing 75

OPINION AND ORDER. #103514 For the reasons in this Opinion and Order, the motion to dismiss the action for forum non conveniens is denied, and the motion to transfer pursuant to 28 U.S.C. § 1404(a) is granted. The conference scheduled for Septem ber 18, 2013 in Courtroom 20-C is canceled. The Clerk of Court is respectfully directed to transfer this action to the United States District Court for the Southern District of Texas. re: 61 MOTION to Dismiss under Forum Non Conveniens filed by Milwaukee Valve Company, Armstrong International, Inc. (Signed by Judge John F. Keenan on 8/27/2013) (rjm) Modified on 8/27/2013 (ca).

Case 1:09-md-02013-PAC Document 57

Filed 09/30/10 Page 1 of 45

USDC SDNY
UNITED STATES DISTRICT COURT
DOCUMENT
SOUTHERN DISTRICT OF NEW YORK
ELECTRONICALLY FILED
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DOC #: _________________
MARY HULEN, as personal
:
DATE FILED: Aug. 27, 2013
representative of the
:
UNITED STATES DISTRICT COURT
heirs and estate of
:
SOUTHERN DISTRICT OF NEW YORK
DONALD HULEN, deceased,
:
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:
No. 12 Civ. 7614 (JFK)
In re FANNIE MAE 2008 SECURITIES
:
08 Civ. 7831 (PAC)
Plaintiff,
:
LITIGATION
:
09 MD 2013& ORDER
:
OPINION (PAC)
:
- against :
:
OPINION & ORDER
:
-----------------------------------------------------------x
CRANE CO. et al.,
:
:
Defendants.
:
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HONORABLE PAUL A. CROTTY, United States District Judge:
APPEARANCES
FOR PLAINTIFF MARY HULEN
BACKGROUND1
Karst & von Oiste LLP
By: The early years of Oiste
Douglas von this decade saw a boom in home financing which was fueled, among
FOR DEFENDANTS ARMSTRONG and lax credit conditions. New lending instruments, such as
other things, by low interest rates INTERNATIONAL, INC.
AND MILWAUKEE VALVE COMPANY, INC.
Harris Beach PLLC
subprime mortgages (high credit risk loans) and Alt-A mortgages (low-documentation loans)
By: William T. Miedel
kept the boom going. Borrowers played a role too; they took on unmanageable risks on the
JOHN F. KEENAN, United States District Judge:
assumption that the market would continue to rise and that refinancing options would always be
Before the Court is a motion filed by Defendants Armstrong
available in the future. Lending discipline was lacking in the system. Mortgage originators did
International, Inc. and Milwaukee Valve Company, Inc. (together,
not hold these high-risk mortgage loans. Rather than carry the rising risk on their books, the
“Movants”) to dismiss this asbestos case for forum non
originators sold their loans into the secondary mortgage market, often as securitized packages
conveniens. In the alternative, Movants seek transfer to the
known as mortgage-backed securities (“MBSs”). MBS markets grew almost exponentially.
Southern District of Texas pursuant to 28 U.S.C. § 1404(a).
But then the housing bubble burst. In 2006, the demand for housing dropped abruptly
Although there are many other defendants in this case, none have
and home prices began to fall. In light of the changing housing market, banks modified their
objected to the motion. For the reasons that follow, the motion
lending practices and became unwilling to refinance home mortgages without refinancing.
to dismiss is denied and the motion to transfer is granted.
1

Unless otherwise indicated, all references cited as “(¶ _)” or to the “Complaint” are to the Amended Complaint,
dated June 22, 2009. For purposes of this Motion, all allegations in the Amended Complaint are taken as true.

1

I.

Background

Plaintiff Mary Hulen is a Texas resident, as was her late
husband, Donald Hulen.

Both Mr. and Mrs. Hulen were plaintiffs

in this asbestos action until Mr. Hulen’s death on November 19,
2012.

Plaintiff is now the representative of Mr. Hulen’s

estate.
Plaintiff alleges that Mr. Hulen was exposed to asbestos
throughout his life, which included service in the United States
Navy from 1960 to 1989.

As part of his Naval career, Mr. Hulen

served on various ships in various shipyards before ultimately
entering the Navy Reserves.

One such ship was the U.S.S.

Austin, where he served while it was docked at the Brooklyn Navy
Yard for a period of four to six months in 1964.
Although Mr. and Mrs. Hulen were Texas residents, this
action was originally filed in New York state court on August
24, 2012.

Plaintiff chose such a distant forum in order to seek

participation in the New York City Asbestos Litigation (“NYCAL”)
program’s “in extremis” trial group, which endeavors to expedite
the resolution of cases where the plaintiff is critically ill.
See Oral Arg. Tr. at 10; see also Miedel Aff. Ex. C.

The case

was removed to the Southern District of New York on October 11,
2012 by Defendant Crane Company.
Movants now argue that the action should be dismissed for
forum non conveniens.

They emphasize that “throughout his
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twenty-nine years of Navy service (including both active duty
and reserves duty) [Mr. Hulen] spent at most four months at a
shipyard in Brooklyn, New York.” (Mot. ¶ 16.)

They point out

that Plaintiff alleges considerable exposure to asbestos in
Texas, including all of Mr. Hulen’s Navy Reserve duty, as well
as automobile and construction work there.

Movants also assert

that they are not New York corporations or have their principal
place of business in New York; that Mr. Hulen never lived in the
Southern District of New York; and that his past medical
providers are all in Texas.

Movants request that the action be

transferred to the Southern District of Texas in the event that
this Court denies their motion to dismiss.
Plaintiff opposes the motion.

She argues that New York is

just as convenient as Texas because she consents to travel to
New York for trial and because some of her attorneys and medical
experts are here.

She further states that there are no

witnesses that will be required to testify by compulsory
process, and that the jury will not need to observe evidence in
Texas.

Plaintiff finally asserts that New York is a better

forum than Texas for this action with respect to efficiency and
the public interest.
II.

Discussion

The Supreme Court has repeatedly counseled that federal
courts should apply the common law doctrine of forum non
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conveniens to dismiss an action only where the alternative forum
is abroad, or “perhaps in rare instances where a state or
territorial court serves litigational convenience best.”
Sinochem Int’l Co. Ltd. v. Malaysia Int’l Shipping Corp., 549
U.S. 422, 430 (2007) (citations omitted).

Although Movants’

papers request dismissal under this doctrine, counsel
acknowledged at oral argument that because the proposed
alternative forum is the Southern District of Texas, this Court
should not dismiss the action outright. (Oral Arg. Tr. at 3.)
Instead, the Court’s task is to determine whether the case
should be transferred to Texas. See Sinochem, 549 U.S. at 430
(noting that Congress “has provided for transfer, rather than
dismissal, when a sister federal court is the more convenient
place for trial of the action”); Iragorri v. United Techs.
Corp., 274 F.3d 65, 72 n.4 (2d Cir. 2001) (en banc); Recurrent
Capital Bridge Fund I, LLC v. ISR Sys. & Sensors Corp., 875 F.
Supp. 2d 297, 305 (S.D.N.Y. 2012).

Accordingly, the Court

considers only Movant’s motion in the alternative for transfer
pursuant to 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.” 28 U.S.C. § 1404(a).

Motions for transfer “lie

within the broad discretion of the district court and are
4

determined upon notions of convenience and fairness on a caseby-case basis.” In re Cuyahoga Equip. Corp., 980 F.2d 110, 117
(2d Cir. 1992).

The court should rule based on the clear and

convincing evidence standard after considering whether the
moving party has carried its “‘burden of making out a strong
case for transfer.’” N.Y. Marine & Gen. Ins. Co. v. Lafarge N.
Am., Inc., 599 F.3d 102, 113–14 (2d Cir. 2010) (quoting Filmline
(Cross-Country) Prods., Inc. v. United Artists Corp., 865 F.2d
513, 521 (2d Cir. 1989)).
“The inquiry on a motion to transfer venue is two-fold.
First, the district court must determine whether the case could
have been brought in the proposed transferee district.” Frame v.
Whole Foods Mkt., Inc., No. 06 Civ. 7058, 2007 WL 2815613, at *4
(S.D.N.Y. Sept. 24, 2007) (citing Herbert v. Elec. Arts, Inc.,
325 F. Supp. 2d 282, 285 (S.D.N.Y. 2004); In re Nematron Corp.
Secs. Litig., 30 F. Supp. 2d 397, 400 (S.D.N.Y. 1998)).

If the

case could have been originally brought in the proposed
transferee district, the court must next decide whether transfer
is appropriate. Id.

Factors the court may consider include:

the weight to be accorded to plaintiff’s choice of forum and the
locus of operative facts; convenience of witnesses; convenience
and relative means of the parties; location of relevant
documents and the relative ease of access to sources of proof;
the availability of process to compel the attendance of
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unwilling witnesses; and the comparative familiarity of each
district with the governing law. See Johnson & Johnson Vision
Care, Inc. v. CIBA Vision Corp., No. 04 Civ. 7369, 2004 WL
2314424, at *1 (S.D.N.Y. Oct. 13, 2004); Capitol Records, Inc.
v. Kuang DYI Co. of RM, No. 03 Civ. 0520, 2004 WL 405961, at *3
(S.D.N.Y. Mar. 4, 2004); Prudential Secs. Inc. v. Norcom Dev.,
Inc., No. 97 Civ. 6308, 1998 WL 397889, at *3 (S.D.N.Y. July 16,
1998). See generally Citigroup Inc. v. City Holding Co., 97 F.
Supp. 2d 549, 561 (S.D.N.Y. 2000) (“There is no rigid formula
for balancing these factors and no single one of them is
determinative.”).

Another factor, judicial economy, is chiefly

relevant where there are duplicative actions, which is not the
case here.
A.

The Action Could Have Been Brought
in the Southern District of Texas

Pursuant to § 1404(a), the Court must first determine
whether the matter “might have been brought” in the proposed
transferee district.

An action may be brought “in any district

where subject-matter and personal jurisdiction exist and where
venue is proper.” Chiste v. Hotels.com L.P., 756 F. Supp. 2d
382, 399 (S.D.N.Y. 2010) (citing Schechter v. Tauck Tours, Inc.,
17 F. Supp. 2d 255, 258 (S.D.N.Y. 1998)).
Here, the proposed transferee court is the Southern
District of Texas, which is based in Houston.
6

Movants assert,

and Plaintiff does not disagree, that the action could have been
brought in Texas.

Plaintiff is a Texas resident, and Texas law

allows for civil actions relating to asbestos.

Movants further

state that all defendants are subject to service of process
there.

Given that none of these representations are in dispute,

the Court concludes that the case could indeed have been brought
in the Southern District of Texas.
B.

Transfer Is Appropriate in this Case

The Court next considers how much weight to accord
Plaintiff’s forum choice, because this “affects the burden that
a defendant must meet on the other factors.” Frame, 2007 WL
2815613, at *4.

While a plaintiff’s choice of venue is

generally given considerable deference, less deference is due
where the chosen forum is not the plaintiff’s home forum. Colour
& Design v. U.S. Vinyl Mfg. Corp., No. 04 Civ. 8332, 2005 WL
1337864, at *5 (S.D.N.Y. June 3, 2005).

“Further, the

plaintiff’s choice is generally accorded more deference where
there is a material connection or significant contact between
the forum state” and the locus of operative facts underlying the
claim. Orb Factory, Ltd. v. Design Science Toys, Ltd., 6
F. Supp. 2d 203, 210 (S.D.N.Y. 1998). See generally DiRienzo v.
Philip Servs. Corp., 294 F.3d 21, 28 (2d Cir. 2002) (in the
forum non conveniens context, “a court should begin with the
assumption that a plaintiff’s choice of forum will stand unless
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the defendant can demonstrate that reasons exist to afford it
less deference”).
Turning to the instant case, New York is neither the
Plaintiff’s home forum nor the locus of operative facts.
Plaintiff resides in Texas, as did her late husband, and far
more of his alleged asbestos exposure occurred in Texas than in
New York.

Indeed, the only New York exposure occurred for a

relatively short period of four to six months at the Brooklyn
Navy Yard.

Although Plaintiff originally sought inclusion in

NYCAL’s “in extremis” trial group, she concedes that the removal
of this case to federal court makes that impossible. (Oral Arg.
Tr. at 10.)

Due to the unusual facts and history of this

action, no compelling reason remains for the Court to defer to
Plaintiff’s choice of New York as the forum for this action.
Applying the clear and convincing evidence standard, the
Court determines that Movants have carried their burden of
making out a strong case to transfer this action. See Lafarge,
599 F.3d at 113–14.

First, on a fundamental level, the Southern

District of New York has no connection whatsoever to the case.
Plaintiff’s late husband was exposed to asbestos in the New York
area for a brief period in a decades-long career of asbestos
exposure, most of which occurred in Texas.

A Texas court and a

Texas jury have a far greater interest in adjudicating the
injury to this Texas man.
8

Moreover, because most of Mr. Hulen’s asbestos exposure
occurred in Texas, Texas state law will likely govern many of
the claims. See Lee v. Bankers Trust Co., 166 F.3d 540, 545 (2d
Cir. 1999) (noting that a New York federal court sitting in
diversity would generally apply the law of the place of the
tort). See generally Restatement (Second) of Conflicts § 146
(1971).

While this Court is capable of applying the law of

another jurisdiction, a Texas federal court will be far more
familiar with Texas state law and is better poised to apply it.
See Chiste, 756 F. Supp. 2d at 401.
The Court notes that the inverse of the above situation —
that is, the transferee Texas court having to learn and apply
New York state law — is unlikely to occur in this case.
Although Plaintiff does allege some exposure from the U.S.S.
Austin while it was docked in Brooklyn, Movants contend, and
Plaintiff has not disputed, that any injuries caused by this
exposure will probably be governed not by New York state law but
rather by federal admiralty law. (Mot. ¶ 32.) See Conner v. Alfa
Laval, Inc., 799 F. Supp. 2d 455, 466–67 (E.D. Pa. 2011)
(maritime law applies to Navy service member as long as some of
the exposure occurred on a vessel on navigable waters); see also
Riddle v. Foster Wheeler, LLC, MDL No. 875,

11 Civ. 318, 2012

WL 2914222 (E.D. Pa. May 25, 2012) (noting that “work performed
aboard a ship that is docked at the shipyard is sea-based work,
9

performed on navigable waters” (citing Sisson v. Ruby, 497 U.S.
358 (1990))).
It is true that Movants’ showing is not as strong with
respect to other relevant factors, due in part to the fact that
discovery is ongoing. 1

Nevertheless, transfer is appropriate

because Plaintiff has utterly failed to rebut the compelling
public considerations offered by Movants, or to point to any
countervailing private considerations that are significant.
After initially missing the deadline to respond to the transfer
motion, see ECF No. 72, Plaintiff’s counsel filed a breezy fourpage opposition memorandum.

It states that “[p]ractical

considerations make the trial of this case in this forum more
efficient and less expensive,” but these conclusory assertions
are unencumbered by any factual support or argument. (Pl. Opp.
at 2.)

At oral argument, counsel suggested that Mr. Hulen’s

decades of asbestos exposure in Texas is irrelevant because the
trial will focus almost exclusively on Mr. Hulen’s time at the
Brooklyn Navy Yard in 1964, before rigorous health and safety
legislation took effect in the early 1970s. (Oral Arg. Tr. at 11
1

Notably, Plaintiff does not contend that the transfer motion is
premature. Indeed, her papers argue the opposite — that Movants
delayed for too long in filing the motion. See Pl. Opp. at 3. Movants
reply to this objection by correctly pointing out that they announced
their intention to make the motion at the initial conference in this
matter on February 26, 2013. That conference was originally scheduled
for January 4, 2013, but was rescheduled after Plaintiff’s counsel
failed to appear on that date.

10

(“These other small sites may be in Texas in later years when I
don’t even know if they were using asbestos products . . . .
The Brooklyn Navy Yard will ultimately be the focus of the trial
from the defendant’s perspective and from the plaintiff’s
perspective.”)

That characterization of the “defendant’s

perspective” is, naturally, disputed by Movants. (Id. at 16.)
More important, however, it is also belied by Plaintiff’s
complaint, which does not limit its allegations to that brief
period but additionally pleads extensive later asbestos exposure
at Texas “steel mills, refineries, paper mills, chemical plants,
industrial sites and facilities, construction sites and other
facilities.” (Verified Complaint ¶ 243.) See also Miedel Aff.
Ex. D at 20–21 (interrogatory response cataloguing asbestos
exposure at various sites in Texas through the 1970s and in
1989).
Plaintiff’s counsel also opined regarding Texas’s
suitability as a forum for this litigation.

He urged this Court

not to leave Plaintiff’s case in the hands of the federal court
in her home state, speculating that “maybe the judge picks it up
down there, maybe he doesn’t.” (Oral Arg. Tr. at 12.)

Counsel

also suggested that the Southern District of Texas might somehow
be ignorant regarding asbestos litigation, (id.),
notwithstanding the fact that his own asbestos litigation firm
appears to be headquartered in Houston.
11

Needless to say, this

Court has every confidence that once the Clerk of this

strict

sends the action to the Southern District of Texas, it will be
expeditiously assigned to a judge who will prove himself or
herself eminently capable of trying an asbestos case.
Suggestions to the contrary are absurd, to say the least, and
certainly do not overcome Movants'

justifications for transfer.

In sum, after carefully weighing all of the relevant
factors and considering the parties' arguments, it is clear to
the Court that

§

1404(a) transfer is manifestly appropriate.

This case belongs in Texas.
III. Conclusion

For the foregoing reasons, the motion to dismiss the action
for forum non conveniens is denied, and the motion to transfer
pursuant to 28 U.S.C.

§

1404(a) is granted.

The conference

scheduled for September 18, 2013 in Courtroom 20-C is cancelled.
The Clerk of Court is respectfully directed to transfer this
action to the United States District Court for the Southern
District of Texas.
SO ORDERED.

Dated:

New York, New York
August
2013

Z 7'

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~~

John F. Keenan
United States District Judge

12