Dial Corporation, et al v. News Corporation et al

Filing 50

ORDER Adopting 29 Report and Recommendation and granting defendants' 11 motion to transfer venue Signed by District Judge Arthur J. Tarnow. (DTyl) [Transferred from Michigan Eastern on 9/26/2013.]

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION

THE DIAL CORPORATION, ET AL.,
Case No. 12-15613
Plaintiffs,
v.

SENIOR UNITED STATES DISTRICT JUDGE
ARTHUR J. TARNOW

NEWS CORPORATION, ET AL.,

MAGISTRATE JUDGE MONA K. MAJZOUB

Defendants.
/

ORDER ADOPTING THE MAGISTRATE JUDGE’S REPORT AND
RECOMMENDATION [29] GRANTING DEFENDANTS’ MOTION TO
TRANSFER VENUE [11]
Before the Court is Magistrate Judge Majzoub’s Report and Recommendation
(R&R) [29], recommending that this Court GRANT Defendants’ Motion to Transfer
Venue [11], transferring this case to the United States District Court for the Southern
District of New York under 28 U.S.C. § 1404, and denying as moot Defendants’
alternative Motion to Dismiss [11].
For the reasons stated below, the R&R [29] is AFFIRMED, Defendants’ Motion
to Transfer Venue [11] is GRANTED, the case is transferred to the Southern District
of New York, and Defendants’ alternative Motion to Dismiss [11] is MOOT.

I. Procedural Background
On December 21, 2012, Plaintiff Dial Corporation (Dial) filed this action
alleging that Defendants have violated the Sherman Act, the Clayton Act, and the
Michigan Antitrust Reform Act. On December 27, 2012, Plaintiff H.J. Heinz
Company (Heinz) joined the action by way of an Amended Complaint [3]. Plaintiffs
H. J. Heinz, L.P. (Heinz LP) and Foster Poultry Farms (Foster) joined the action in the
Second Amended Complaint [24], filed on May 5, 2013.
On January 24, 2013, Defendants filed its Motion to Transfer Venue or, in the
Alternative, to Dismiss [11]. Plaintiffs filed a Response [15] on February 7, 2013, and
Defendants filed a Reply [17] on February 19, 2013. Plaintiffs then filed a
Supplemental Opposition to Defendants’ Motion [18] on February 22, 2013, and
Defendants filed a Supplemental Response [19] on February 27, 2013. Plaintiff then
filed a Second Supplemental Opposition [22] on April 26, 2013, and Defendants filed
a Second Supplemental Response [25] on May 2, 2013. This Court referred this matter
to Magistrate Judge Majzoub on January 25, 2013.
The R&R [29] now before the Court was filed on May 10, 2013. Plaintiffs filed
its Objections [33] on May 24, 2013. Defendants’ filed its Conditional Objections [34]
on the same day. On June 3, 2013, Plaintiffs filed a Response [35] to Defendants’
Conditional Objections [34]. On the same day, Defendants filed a Response [36] to

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Plaintiffs’ Objections [33]. On June 10, 2013, Plaintiffs filed a Reply [38], as did
Defendants [39]. On July 15, 2013, Defendants filed a Motion to Supplement the
Record [43].
Now pending is Plaintiffs’ Motion for Leave to File the Third Amended
Complaint [46], filed on August 16, 2013. In response to Plaintiffs’ Amended
Complaint [24], Defendants filed a second Motion to Transfer Case [32] on May 23,
2013, preserving its claims as to venue addressed in the R&R [29] now before the
Court.
The parties dispute whether this case is a companion case to another matter
before this Court, Valassis Communications, Inc. v. News America, Inc. et al., Case
No. 06-1024 (E.D. Mich.). On January 24, 2013, Defendants in the matter now before
the Court filed an action against Plaintiffs for declaratory relief in the United States
District Court for the Southern District of New York, News Am. Marketing In-Store
Services L.L.C., et al. v. The Dial Corporation, et al., No. 13-00550 (S.D.N.Y.).
II. Factual Background
The R&R [29] contains a detailed explanation of the factual background of this
case. The parties dispute only one point included in this section of the R&R [29]:
whether or to what extent a mandatory forum selection clause applies to the claims

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made by Plaintiff Foster. Aside from this dispute,1 the Court adopts the factual
background as set out in the R&R [29] in full.
III. Standard of Review
When a party objects to a magistrate judge's findings as to a nondispositive
issue, the district judge must consider timely objections and modify or set aside any
findings that are clearly erroneous or is contrary to law. See Fed. R. Civ. P. 72(a); see
also 28 U.S.C. § 636(b)(1)(A); see also Baker v. Peterson, 67 Fed. Appx. 308, 311
(6th Cir. 2003)(finding it is within the district court’s discretion to conduct higher
review of a nondispositive issue). A finding is clearly erroneous when, “although
there is evidence to support the finding, the Court is left with the definite and firm
conviction that a mistake has been committed.” United States v. Lucas, 640 F.3d 168,
173 (6th Cir. 2011)(citing Anderson v. City of Bessemer City, N.C., 470 U.S. 564, 573
(1985)).

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Defendants’ Conditional Objection [34] asserts that the R&R [29] incorrectly states that
the parties agree that Plaintiff Foster’s contracts with Defendants have permissive forum
selection clauses. Instead, Defendants contend that the contracts include mandatory selectionclauses. Defendants further argue that this correction either does not effect the Magistrate
Judge’s recommendation to grant the Motion to Transfer Venue [11], or further supports this
recommendation. In its Response [35], Plaintiffs counter, arguing that the clauses do not apply to
this case, that if they do apply they only apply to a small portion of the claims at issue, and that
any application of the clauses does not support transfer. Because the mandatory rather than
permissive clauses would not tend to alter the Magistrate Judge’s recommendation, and because
this Court considers Plaintiffs’ arguments as to the application of the clauses below, see infra at
Objection 3, this potential factual inaccuracy does not effect the Court’s holding.
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IV. Analysis
Title 28 U.S.C. § 1404(a) states that “[f]or the convenience of parties and
witnesses, in the interest of justice, a district court may transfer any civil action to any
other district or division where it might have been brought or to any district or
division to which all parties have consented.” District courts have broad discretion to
determine when a transfer of venue is appropriate. Reese v. CNH Am. LLC, 574 F.3d
315, 320 (6th Cir. 2009). The moving party bears the burden of proving that the court
should transfer the action. Steelcase v. Smart Technologies, Inc., 336 F.Supp.2d 714,
719 (W.D. Mich.2004).
The district to which the moving party proposing transfer to must be one in
which the case might have been brought originally. Van Dusen v. Barrack, 376 U.S.
612, 634 (1964). When this threshold requirement has been met, “a district court
should consider the private interests of the parties, including their convenience and the
convenience of potential witnesses, as well as other public-interest concerns, such as
systemic integrity and fairness. Moses v. Bus. Card Express, Inc., 929 F.2d 1131, 1137
(6th Cir.1991). The private interests of the parties include the following:
(1) the convenience to the parties; (2) the convenience of witnesses; (3)
the relative ease of access to sources of proof; (4) the availability of
process to compel attendance of unwilling witnesses; (5) the cost of
obtaining willing witnesses; (6) the practical problems indicating where
the case can be tried more expeditiously and inexpensively; and (7) the
interests of justice, a term broad enough to cover the particular
circumstances of each case, which in sum indicate that the administration
of justice will be advanced by a transfer.
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Campbell v. Hilton Hotels Corp., 611 F.Supp. 155, 157 (E.D. Mich. 1985) (citing
Schneider v. Sears, 265 F.Supp. 257, 263 (S.D.N.Y. 1967)). Public-interest factors
include the following:
(i) the enforceability of the judgment; (ii) practical considerations
affecting trial management; (iii) docket congestion; (iv) the local interest
in deciding local controversies at home; (v) the public policies of the
fora; and (vi) the familiarity of the trial judge with the applicable state
law.
Steelcase, Inc. v. Smart Technologies, Inc., 336 F.Supp.2d 714, 720 (W.D. Mich.
2004) (citing Jumara v. State Farm Ins. Co. , 55 F.3d 873, 879-80 (3rd Cir. 1995)).
Courts also regularly consider Plaintiff’s choice of forum and the existence of
a contractual forum-selection clause as significant factors when balancing the parties’
interests. Kerobo v. S.W. Clean Fuels, Corp., 285 F.3d 531, 537-38 (6th Cir. 2002).
“The existence of a forum selection clause is a significant factor that figures centrally
when determining if transfer of venue is proper, and such clauses should be enforced
unless enforcement is shown by the resisting party to be unreasonable under the
circumstances.” Fluidtech, Inc., 457 F. Supp. 2d at 767 (internal quotation marks and
citations omitted). While a choice of forum provision is not dispositive of venue,
however, a party faces a “heavy burden of proof to set aside a forum selection clause
on grounds of inconvenience.” Id.

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The R&R [29] finds that “before considering the Plaintiff’s choice of forum and
the forum-selection clause, [the] factors weight heavily in favor of transfer” and
“when combined with the other factors considered by the Court, the scales tip slightly
in favor of granting” Defendants’ Motion to Transfer Venue [11]. The R&R adds that
“with regard to Heinz’s claims that are subject to the mandatory forum-selection
clause, the existence of the clause weighs greatly in favor of transfer. Therefore, when
combined with the other factors considered by the Court, transfer of these claims is
also appropriate.”
Plaintiffs’ present eight separate objections to the R&R [29] and against transfer
of the case to the Southern District of New York. These objections are addressed in
turn below.
Objection 1
Plaintiffs first object arguing that the finding that the scales tip “slightly” in
favor of transfer is insufficient to support transfer of the case. Specifically, Plaintiffs
point to case law holding that a plaintiff’s choice of forum must be given “substantial
weight.” See United States v. Cinemark USA, Inc., 66 F. Supp. 2d 881, 887 (N.D.
Ohio 1999) (citing Picker Int'l, Inc. v. Travelers Indem. Co., 35 F. Supp. 2d 570, 573
(N.D. Ohio 1998)). However, given that the Magistrate Judge found that the balance
of factors weighs heavily of transfer prior to the consideration of Plaintiffs’ choice of

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forum, and then only slightly in favor of transfer after considering this choice, it is
rather clear that this choice was given great weight. Moreover, the finding that the
scales tip “slightly” in favor of transfer is the finding of the Magistrate before
consideration of the mandatory forum-selection clause. The R&R finds that the forumselection clause weighs greatly in favor of transfer. Therefore, Plaintiffs’ objection
here does not accurately represent the findings of the R&R [29] and is also unavailing.
Objection 2
Second, Plaintiff asserts that the R&R [29] does not properly consider the
“interest of justice” standard provided in Title 28 U.S.C. § 1404(a). Plaintiffs’ rely on
the argument that this Court’s involvement in the possible companion case, Valassis
Communications, Inc. v. News America, Inc. et al., Case No. 06-1024 (E.D. Mich.),
requires retention of the matter now before the Court. The Magistrate Judge found that
“[a]ny procedural advantage gained by the Court in having previously handled the
Valassis matter would be earned by reviewing the docket rather than by rote memory;
any judge in the Southern District of New York would be able to review the Valassis
docket as well,” but that this Court’s familiarity with the factual similarities between
the two cases weighs heavily in favor of retention. Therefore, as an initial matter, the
Magistrate Judge did in fact consider judicial economy and the interests of justice in
its weighing of all relevant factors.

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In addition, Plaintiffs incorrectly conclude that Valassis is a companion to the
matter now before the Court. Such a determination was never made because this case
was initially assigned to this Court and did not require review of the possible
companion case listed by Plaintiffs. Moreover, as Plaintiffs note, transfer is favored
when related actions are pending in the same district. However, Valassis is closed, and
no longer a pending matter before this Court. Finally, while there may be similar
issues of fact and law between the two cases, the parties are not identical.
Therefore, Plaintiffs’ second objection is also unavailing.
Objection 3
Plaintiffs next object to the Magistrate Judge’s finding that the convenience of
the parties moderately favors transfer. Instead, Plaintiffs assert that this factor is a
neutral factor.
First, Plaintiffs incorrectly state that the R&R [29] finds that “mandatory forum
selection clauses moderately support retention.” Rather, the Magistrate Judge found
that:
with regard to Dial’s claims, Foster’s claims, and any portion of Heinz’s
claims that are not covered by the forum-selection clause, Plaintiffs’
choice of forum will be given moderate weight, but not substantial
deference. With regard to Heinz’s claims that are subject to the
mandatory forum-selection clause, the Court affords no weight to
Heinz’s choice of forum and finds that this factor weighs greatly in favor
of transfer.

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Plaintiffs then suggest that this finding is inconsistent with the Magistrate
Judge’s conclusion that the convenience of the parties moderately favors transfer. The
R&R [29] specifically finds “[w]hether mandatory or permissive, Plaintiffs were all
on notice that claims arising out of the contracts at issue were subject to the laws of
the State of New York, and they consented to jurisdiction in New York courts.” For
the first time, Plaintiffs argue that the forum-selection clauses do not apply to the
claims brought in this matter. Not only did Plaintiffs most likely waive this claim by
failing to present it to the Magistrate Judge prior to presenting it to this Court, see
Murr v. United States, 200 F.3d 895, 902 n.1 (6th Cir. 2000), but also the courts have
held that federal antitrust claims can arise from or are related to the parties’ contracts.
See Roby v. Corporation of Lloyd's, 996 F.2d 1353, 1361 (2d Cir. 1993) (citing Bense
v. Interstate Battery System of America, 683 F.2d 718, 720 (2d Cir. 1982) and Scherk
v. Alberto-Culver Co., 417 U.S. 506, reh'g denied, 419 U.S. 885 (1974)).
Therefore, permissive forums-selection clauses are not exempt from
consideration in the convenience of parties. As such, the Magistrate Judge’s finding
is not clearly erroneous, and the objection fails.
Objection 4
Plaintiff then argues that the R&R [29] fails to “give heavy weight to Plaintiffs’
ability to compel the attendance of witnesses within the subpoena power of this
Court.” The Magistrate Judge found that:
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Even assuming, however, that the Michigan-based Valassis witnesses
would all refuse to travel to New York, Plaintiffs’ argument does not
account for Valassis witnesses located outside of Michigan or any other
witnesses located in New York, Arizona, Pennsylvania, California, or
Minnesota, all of whom would be beyond the Court’s subpoena power.
Thus, it appears to the Court that the limitations of the Court’s subpoena
power will impact the proceedings no matter what the forum. Therefore,
this Court finds that this factor neither weighs in favor of transfer or
retention of this matter.
Plaintiffs object, arguing that “that live testimony from the Valassis officers working
in its headquarters in Livonia, Michigan will be highly material to Plaintiffs’” case
and that it “must be assumed that they will not appear
voluntarily.” Plaintiffs made a similar argument to the Magistrate Judge. The R&R
[29] finds that this argument is based on conjecture. While Plaintiffs may be able to
show that some of these witnesses are in fact located in Michigan, Plaintiffs have
failed to provide any further evidence for the need for subpoena power over these
witnesses. Moreover, Plaintiffs have not rebutted the possibility, as pointed to by the
Magistrate Judge, that other material witnesses would not be under the subpoena
power of this Court.
Therefore, Plaintiffs have failed to show that the Magistrate Judge’s findings
are clearly erroneous or contrary to law. As such, the fourth objection is unavailing.
Objection 5
Plaintiffs’ fifth objection makes a similar argument as the fourth, asserting that
the R&R [29] fails to weigh heavily the convenience of Plaintiffs’ witnesses and
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Defendant News Corp.’s witnesses in Michigan and Minnesota. The Magistrate Judge
found that:
with regard to witnesses from Plaintiffs’ own organizations, both
Michigan and New York appear to be mutually inconvenient. And with
regard to witnesses in Defendants’ organizations, the Southern District
of New York is more convenient than the Eastern District of Michigan.
With regard to third-party witnesses that may be called, with the
exception of a few witnesses who may live in Michigan, both Michigan
and New York appear to be equally inconvenient. Thus, this factor
weighs slightly in favor of transfer.
In its objection, Plaintiffs argue that Detroit is more convenient for Plaintiff witnesses
from Arizona and California than New York City.
This argument is not compelling nor does it show that the findings within the
R&R [29] are clearly erroneous. As such, this objection also fails.
Objection 6
Next, Plaintiffs’ argue that the R&R [29] errs in finding that access to proofs
moderately favors transfer, and is instead a neutral factor. Here, Plaintiffs present an
argument opposite to the argument it presented to the Magistrate Judge. In its
Objections [33] now before the Court, Plaintiffs assert that because most discovery
is available in electronic form and transferred by electronic means, the physical
location of proofs is no longer relevant. The Magistrate Judge uses much the same
facts to conclude that this factor weighs moderately, rather than heavily, in favor of
transfer. However, as noted in the R&R [29], in its argument against Defendants’
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Motion to Transfer Venue [11] presented to the Magistrate Judge, Plaintiffs argued
that “[m]assive numbers of documents have been discovered and produced in the
Valassis [matters, so t]hey are more readily available in this forum.”
The drastic change in Plaintiffs’ argument is both concerning and unavailing.
As such, Plaintiffs’ objection here is denied.
Objection 7
Plaintiffs’ seventh objection argues that the R&R [29] erroneously found that
the local interest slightly favors transfer. Plaintiffs assert that the litigation is not
specific to New York, is relevant to Defendants’ business across the national, and that
it should therefore be a neutral factor. The Magistrate Judge specifically found that
“New York has a stronger interest in resolving this matter because the alleged
unlawful conduct was committed by Defendants, whose principal place of business
is in New York.” Plaintiffs have failed to show that this conclusion is incorrect or
irrelevant. Therefore, the objection fails.
Objection 8
Finally, Plaintiffs object to the Magistrate Judge’s alternative recommendation,
finding that should this Court fail to adopt the R&R [29], then this Court should grant
Defendants’ alternative Motion to Dismiss [11] with regard to any of Plaintiff Heinz’s
claims subject to the mandatory forum-selection clause. However, because this Court
adopts the R&R [11], this objection is now moot.
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V. Conclusion
For the reasons stated above, the R&R [29] is AFFIRMED, Defendants’ Motion
to Transfer Venue [11] is GRANTED, the case is transferred to the Southern District
of New York, and Defendants’ alternative Motion to Dismiss [11] is MOOT.
Therefore,
IT IS HEREBY ORDERED that the R&R [29] is AFFIRMED.
IT IS FURTHER ORDERED that Defendants’ Motion to Transfer Venue [11]
is GRANTED.
IT IS FURTHER ORDERED that Defendants’ alternative Motion to Dismiss
[11] is MOOT.
IT IS FURTHER ORDERED that the case is transferred to the United States
District Court for the Southern District of New York.
SO ORDERED.
s/Arthur J. Tarnow
ARTHUR J. TARNOW
SENIOR UNITED STATES DISTRICT JUDGE
DATED: September 24, 2013

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