Dipizio v. Empire State Development Corporation et al.
Filing
57
MEMORANDUM OPINION AND ORDER. Weighing the factors set forth above, the Court in its discretion determines that defendants have met their burden of demonstrating by clear and convincing evidence that transfer is appropriate. Accordingly, it is HEREBY ORDERED that defendants' motion to transfer is GRANTED, and that this action shall be transferred to the Western District of New York. The Clerk of Court is directed to terminate the motions pending at Docket Numbers 22 and 28. SO ORDERED. re: 22 MOTION to Change Venue filed by Phillips Lytle, LLP, William J. Brennan, Esq., Sam Hoyt, Erie Canal Harbor Development Corporation, Mark E. Smith, Thomas Dee, Empire State Development Corporation, 28 MOTION to Change Venue to the Western District of New York under 28 U.S.C. 1404(a) filed by Travelers Casualty and Surety Company of America. (Signed by Judge Gregory H. Woods on 10/5/2015) (rjm)
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
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ROSANNE DIPIZIO and DREAMCO
:
DEVELOPMENT CORPORATION,
:
:
Plaintiffs, :
:
:
-v :
EMPIRE STATE DEVELOPMENT
:
CORPORATION, ERIE CANAL HARBOR
:
DEVELOPMENT CORPORATION, THOMAS :
DEE, SAM HOYT, MARIA LEHMAN, THE
:
LIRO GROUP, PHILLIPS LYTLE, LLP,
:
TRAVELERS CASUALTY AND SURETY
:
COMPANY OF AMERICA, MARK E. SMITH, :
and WILLIAM J. BRENNAN, ESQ.
:
:
Defendants. :
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USDC SDNY
DOCUMENT
ELECTRONICALLY FILED
DOC #: _________________
DATE FILED: 10/5/2015
1:15-cv-5339-GHW
MEMORANDUM OPINION AND
ORDER
GREGORY H. WOODS, United States District Judge:
I.
INTRODUCTION
Plaintiffs allege a broad conspiracy of public corruption, “orchestrated by high-level public
officials of New York State,” one designed to divert blame for delays and mismanagement of a large
construction project in Buffalo by various defendants to the general contractor in charge of the
project. The complaint discusses at length the “backrooms of Erie County’s notorious culture of
political insider dealing” through which the conspiracy operated—including spiteful emails targeted
at political outsiders, insinuations of campaign contributions and fundraisers being exchanged for
political favors, and leaks of false news stories to local newspapers. But what the complaint packs in
salacious allegations, it lacks in meaningful connections to the Southern District of New York.
Defendants’ motion to transfer venue to the Western District of New York is accordingly
GRANTED.
II.
BACKGROUND1
Plaintiffs in this case are Dreamco Development Corporation (“Dreamco”) and its principal,
Rosanne DiPizio. Dreamco provides consulting services and supplies construction materials to
DiPizio Construction Company, Inc. (“DiPizio Construction”), a construction company operated by
Ms. DiPizio’s father. Am. Compl. at ¶¶ 12, 38. Defendant Erie Canal Harbor Development
Corporation (“Erie Canal”), is a subsidiary of defendant Empire State Development Corporation
(“Empire State”), a New York public benefit corporation. Id. at ¶¶ 13-16. Erie Canal is governed by
a nine-member board, and was created with the goal of restoring economic growth in the area by
revitalizing Buffalo’s Inner and Outer Harbors. See id.
In November 2011, Erie Canal solicited bids for the services of a general contractor in
connection with the Inner Harbor Project (the “Project”), a high-profile construction project in
downtown Buffalo. Id. at ¶ 29. The bid solicitation called for the construction of “Historically
Aligned Canals, Towpaths, and Bridges” on the site of the former Memorial Auditorium, which
would allow for seasonal ice skating. See Id.; Dkt. No. 23-1, Bench Decision in DiPizio Construction
Co. v. Erie Canal Harbor Development Corp., No. 2013-602666 (Sup. Ct. Erie Cnty. July 12, 2013) at 1.
After receiving the plans and specifications called for in the solicitation, DiPizio Construction
submitted a bid on December 22, 2011. Am. Compl. at ¶ 44. DiPizio Construction’s bid was the
lowest submitted, and it was selected as general contractor. Id. at ¶¶ 30, 44, 55. Shortly thereafter, it
hired Dreamco as a subcontractor to supply construction material for the Project. A performance
Unless otherwise noted, the facts are taken from the amended complaint, and are accepted as true for the
purposes of this motion. See Cerussi v. Union Coll., 144 F. Supp. 2d 265, 266 (S.D.N.Y. 2001) (accepting as true
facts alleged by plaintiff or otherwise undisputed in deciding motion to transfer). Moreover, “[i]n deciding a
motion to transfer, a court may consider material outside of the pleadings.” Mohsen v. Morgan Stanley & Co.
Inc., No. 11 CIV. 6751 PGG, 2013 WL 5312525, at *3 (S.D.N.Y. Sept. 23, 2013) (collecting cases).
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and payment bond was issued by DiPizio Construction’s surety, defendant Travelers Casualty and
Surety Company of America (“Travelers”), guaranteeing completion of the Project. Id. at ¶ 58.
No sooner was DiPizio Construction’s bid accepted than a plot was hatched by Erie Canal’s
president, defendant Thomas Dee, to replace DiPizio Construction as general contractor. Mr. Dee
made overly-optimistic public statements that construction on the project would be completed by
the end of 2012. Id. at ¶ 59. When it soon became clear that this timetable was unworkable—due to
a lack of funding, design changes, and errors caused by Erie Canal’s design team—Mr. Dee and
certain other defendants sought to deflect blame by using DiPizio Construction as a scapegoat for
the delays. Id. at ¶¶ 31–32, 42, 61. DiPizio Construction was targeted due to a personal dislike of
Ms. DiPizio; Mr. Dee was said have “wanted to put a sword through her heart.” Id. at ¶ 279. He
and others thus sought to have DiPizio Construction replaced with Pike Company, a “politically
connected contractor” who was the second-highest bidder on the Project. Id. at ¶¶ at 1, 32, 65, 258.
Mr. Dee’s primary cohorts in the alleged scheme were defendants Sam Hoyt, the regional president
of Empire State, and Mark Smith, Erie Canal’s construction project manager.
The complaint alleges that Messrs. Dee, Hoyt, and Smith, among other defendants, went to
great lengths to sabotage their own project—deliberately trying to drive up costs and impede
progress on the construction—in the hopes of pinning the blame on DiPizio Construction. For
example, Messrs. Dee and Smith directed defendant The LiRo Group (“LiRo”), Erie Canal’s
construction manager, to routinely deny DiPizio Construction’s proposed work plans and refuse to
grant otherwise justified change orders. Id. at ¶ 91. Mr. Smith and LiRo interfered with DiPizio
Construction’s plans for soil excavation and disposal, adding further cost and delays. Id. at ¶ 67–72.
Erie Canal issued several design changes, each adding months to the project’s completion date. Id.
at ¶¶ 96–99. Messrs. Dee and Smith directed Erie to withhold payments DiPizio Construction was
otherwise due. Id. at ¶¶ 92, 112. Thus, despite the significant cost overruns and delays that DiPizio
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Construction encountered, plaintiffs allege these were solely the result of defendants’
mismanagement and deliberate interference.
While frustrating DiPizio Construction’s progress on the Project, the alleged conspirators
simultaneously sought to convince others that DiPizio Construction needed to be replaced as
general contractor. For example, Messrs. Dee, Smith, and others sent numerous emails deriding
DiPizio Construction’s performance to Erie Canal Board members and others. Id. at ¶¶ 76–83, 85,
103–05, 107–11. Mr. Dee and others also publicly blasted Ms. DiPizio and DiPizio Construction in
the local media, leaking false stories that placed all blame for delays squarely on them. Id. at ¶¶ 241–
243, 269. Messrs. Dee and Smith also had several reports and memoranda prepared, each blaming
DiPizio Construction for the project’s delays and mismanagement while ignoring the actual causes
for those failures. These included two reports issued by LiRo, a memorandum prepared by
defendant Phillips Lytle, LLP, and an opinion from civil engineer and defendant Maria Lehman. Id.
at ¶¶ 116–124; 128–130; 131–147.
After laying the necessary groundwork, Mr. Dee and his alleged co-conspirators set out to
terminate DiPizio Construction as general contractor for the Project. First, Mr. Hoyt emailed
Kenneth Adams, Empire State’s President, informing him of Erie Canal’s intention to serve DiPizio
Construction with a notice of termination. Id. at ¶ 207. Mr. Hoyt then provided Mr. Adams with
the reports and memoranda recommending that DiPizio Construction be terminated. Id. Relying
on these documents and misrepresentations made by Mr. Dee and others, and without any
knowledge of the actual causes for the delays, Mr. Adams decided that DiPizio Construction should
be terminated “for cause.” Id. at ¶¶ 207–210. Mr. Dee then recommended that DiPizio
Construction be terminated to the Erie Canal Board. Id. at ¶¶ 211–213. Despite no formal vote by
the Board authorizing the action, Mr. Dee had a Notice of Intention to Terminate issued to DiPizio
Construction on May 13, 2013. Id. at ¶¶ 214–15. Mr. Dee, acting on behalf of Erie Canal but again
without a formal vote of the Board, terminated DiPizio Construction for cause on July 22, 2013. Id.
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at ¶¶ at 251–52. Because it was no longer general contractor of the Project, DiPizio Construction
subsequently terminated its contract with Dreamco. Id. at ¶ 260.
With DiPizio Construction removed as general contractor, Erie Canal made a claim on the
performance bond for Travelers, DiPizio Construction’s surety, to complete the project. Id. at
¶¶ 251, 259. Travelers accepted the claim on the bond and formally agreed to take over the Project
on September 23, 2013. Id. at ¶¶ 233–35, 244, 275, 283–84. A re-bid was then held to select a
contractor to complete the project. Although DiPizio Construction sought to bid and have
Travelers issue it new bonds, it was not allowed to participate. Id. at ¶¶ 273, 286, 322. Instead,
Travelers appointed Pike as completion contractor for the project, despite it being the highest of the
completion contractor bids submitted. Id. at ¶¶ 286–287.
After DiPizio Construction’s termination, a barrage of litigation ensued. DiPizio
Construction filed five separate state court actions in Erie County: (1) A suit against Erie Canal,
seeking a preliminary injunction from termination and damages for breach of contract. Id. at ¶ 236;
Dkt. No. 23-5, Complaint in DiPizio Construction Co. v. Erie Canal Harbor Development Corp., No. 2013602666 (Sup. Ct. Erie Cnty. May 13, 2013). The trial court denied the preliminary injunction and
granted partial summary judgment in DiPizio Construction’s favor, but the latter decision was
subsequently reversed by the Appellate Division. Id. at ¶¶ at 280, 282, 303. After Travelers
successfully intervened as plaintiff, it was declared to be the real party-in-interest and DiPizio
Construction was dismissed for lack of standing. Id. at ¶¶ at 306, 309, 318. (2) A suit against
Empire State, Erie Canal, and Messrs. Hoyt, Dee, and Smith for defamation and tortious
interference with contract in connection with the Project. Id. ¶ at 274; Dkt. No. 23-11, Complaint in
DiPizio Construction Co. v. Empire State Development, et al., No. 2013-801815 (Sup. Ct. Erie Cnty.
September 13, 2013). (3) A suit against Erie Canal, seeking a declaratory judgment that DiPizio
Construction’s termination was a “nullity” because Mr. Dee acted without requisite Board approval.
Dkt. No. 23-12, Complaint in DiPizio Construction Co. v. Erie Canal Harbor Development Corp., No.
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2013-2612 (Sup. Ct. Erie Cnty. September 13, 2013). (4) A suit against Erie Canal seeking a
declaratory judgment that the conditions precedent for DiPizio Construction’s performance bond
had not been triggered. Id. at ¶ 290; Dkt. No. 23-13, DiPizio Construction Co. v. Erie Canal Harbor
Development Corp., No. 2013-803777 (Sup. Ct. Erie Cnty. November 26, 2013). And, finally, (5) A
suit against LiRo, alleging that it interfered with the construction agreement and acted in bad faith in
managing the Project. Dkt. No. 23-14, Complaint in DiPizio Construction Co. v. The LiRo Grp., No.
2013-801829 (Sup. Ct. Erie Cnty. September 10, 2013).
In addition, Travelers filed suit against DiPizio Construction and its indemnitors in the
United States District Court for the Western District of New York, seeking reimbursement for the
losses it suffered in connection with the performance bond. Id. at ¶ 301; Dkt. No. 30-1, Complaint
in Travelers Casualty and Surety Co. v. DiPizio Construction Co., et al., No. 14-cv-576A (W.D.N.Y. July 16,
2015). Ms. DiPizio was also later added as a defendant. Id. at ¶ 316; Dkt. 30-8, Second Amended
Complaint. In DiPizio Construction’s answer and counterclaims, it brings counterclaims based on
Travelers’s: interference with the construction agreement; refusal to issue new surety bonds to
DiPizio Construction; refusal to appoint DiPizio Construction as completion contractor; and refusal
to decline Erie Canal’s claim on the performance bond. Dkt. No. 30-4, Answer and Counterclaims.
On July 30, 2015, Magistrate Judge Schroeder issued a Report, Recommendation and Order that
Travelers be granted partial summary judgment and be indemnified for reasonable, good faith
payments made in connection with the Inner Harbor Project, the amount to be determined by
inquest at a later date. Dkt. No. 30-9, Report, Recommendation and Order at 17.
Ms. DiPizio filed the present suit on July 9, 2015, and the complaint was amended on
September 22, 2015 to add Dreamco as a plaintiff. The amended complaint alleges claims for RICO
conspiracy under 18 U.S.C. § 1962(c–d) and civil rights violations under 42 U.S.C. § 1983 against all
defendants but Travelers, as well as various state law claims for fraud and tort against all defendants.
The claims against Travelers do not allege that it was a conspirator, but rather allege that plaintiffs
6
were harmed by its “failure to conduct an investigation; protect the interests of its insured; capitulate
to Pike’s appointment as Completion Contractor; and terminate [DiPizio Construction’s] bonding
capacity . . . .” Am. Compl. at ¶¶ 370, 384, 391. Prior to an initial pretrial conference and the
issuance of a case management plan setting a discovery schedule, defendants requested leave to file a
motion to transfer venue pursuant to § 1404(a). See Dkt. Nos. 14–15. The Court granted the
request, and defendants filed the present motion on August 28, 2015.
III.
LEGAL STANDARD
Section 1404(a) provides: “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). “Thus, § 1404(a) proposes a two-part test. First, the
transferee district must be one where jurisdiction over the defendant could have been obtained at
the time suit was brought, regardless of defendant’s consent. Second, the transfer must be in the
interest of justice and convenience of the parties and witnesses.” In re CenturyLink, Inc. Sec. Litig., No.
13 CIV. 03839 LTS, 2014 WL 1089116, at *1 (S.D.N.Y. Mar. 18, 2014) (internal quotation marks
and ellipses omitted) (quoting Whitehaus Collection v. Barclay Products, Ltd., No. 11 Civ. 217, 2011 WL
4036097 (S.D.N.Y. Aug. 29, 2011)).
The parties do not dispute that plaintiffs’ claims could have been brought in the Western
District of New York. Having satisfied that threshold inquiry, the Court must evaluate the following
factors to determine whether to grant a motion to transfer venue:
(1) the convenience of the witnesses; (2) the convenience of the parties; (3) the
location of relevant documents and the relative ease of access to sources of proof;
(4) the locus of operative facts; (5) the availability of process to compel the
attendance of unwilling witnesses; (6) the relative means of the parties; (7) the
forum’s familiarity with the governing law; (8) the weight accorded the plaintiff’s
choice of forum; and (9) trial efficiency and the interests of justice.
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Steck v. Santander Consumer USA Holdings Inc., No. 14-CV-6942 JPO, 2015 WL 3767445, at *2
(S.D.N.Y. June 17, 2015) (quoting Ritchie Capital Mgmt., L.L.C. v. U.S. Bank Nat. Ass’n, No. 14 CIV.
8513 PAE, 2015 WL 1611391, at *1 (S.D.N.Y. Apr. 10, 2015)).
The list of factors is not exhaustive, see Pausch Med. GmbH v. Pausch LLC, No. 14-CV-1945
PAC, 2015 WL 783365, at *1 (S.D.N.Y. Feb. 24, 2015), and “[t]here is no rigid formula for
balancing these factors and no single one of them is determinative.” Citigroup Inc. v. City Holding Co.,
97 F. Supp. 2d 549, 561 (S.D.N.Y. 2000). Rather, “weighing the balance is essentially an equitable
task left to the Court’s discretion.” Id. (internal quotation marks omitted). The Court, moreover,
has “broad discretion in making determinations of convenience under Section 1404(a) and notions
of convenience and fairness are considered on a case-by-case basis.” D.H. Blair & Co. v. Gottdiener,
462 F.3d 95, 106 (2d Cir. 2006).
“[T]he party requesting transfer carries the burden of making out a strong case for transfer,”
and district courts “have consistently applied the clear and convincing evidence standard in
determining whether to exercise discretion to grant a transfer motion.” New York Marine & Gen. Ins.
Co. v. Lafarge N. Am., Inc., 599 F.3d 102, 114 (2d Cir. 2010) (internal quotation marks and citation
omitted).
IV.
ANALYSIS
A. The Convenience of the Witnesses
“Courts typically regard the convenience of witnesses as the most important factor in
considering a § 1404(a) motion to transfer.” Jackson v. Avis Rent A Car Sys., LLC, No. 14 CIV. 1658
LLS, 2015 WL 1004299, at *3 (S.D.N.Y. Mar. 6, 2015) (quoting Herbert Ltd. P’ship v. Elec. Arts Inc.,
325 F.Supp.2d 282, 286 (S.D.N.Y. 2004)). In conducting this analysis, the Court “weighs more
heavily the convenience of non-party witnesses than party witnesses.” McGraw-Hill Companies Inc. v.
Jones, No. 12-CV-7085 AJN, 2014 WL 988607, at *7 (S.D.N.Y. Mar. 12, 2014).
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The party moving for transfer “must provide the Court with a detailed list of probable
witnesses who will be inconvenienced if required to testify in the current forum.” Kiss My Face Corp.
v. Bunting, No. 02CIV2645 (RCC), 2003 WL 22244587, at *2 (S.D.N.Y. Sept. 30, 2003). The Court
“does not merely tally the number of witnesses who reside in the current forum in comparison to
the number located in the proposed transferee forum”; but rather “must qualitatively evaluate the
materiality of the testimony that the witnesses may provide.” Herbert, 325 F. Supp. 2d at 286.
Defendants provided an initial list of eighteen “key witnesses” in their brief in support of the
motion, consisting of the names of corporate entities of non-party subcontractors and consultants
who participated in the Project. They did not include a description of the any witness’s expected
testimony. In their reply brief, however, defendants identify twenty-six individuals from the
eighteen non-party entities, and include the subject matter of their expected testimony. The nonparty witnesses expect to testify regarding: DiPizio Construction’s performance on the Project,
compliance with the construction agreement, and quality of workmanship; structural issues with
concrete after installation; and various causes of delays relating to pipe installation, fabrication and
installation of bridges, soil excavation, installation of electrical components, and granite
procurement. Nineteen individuals from thirteen entities are located in the Western District of New
York, but four individuals from four of these entities have indicated that the Southern District of
New York would not be inconvenient. Accordingly, the Western District of New York is more
convenient for fifteen witnesses from nine non-party entities. One witness is located in the
Northern District of New York, which is closer in proximity and therefore more convenient to the
Western District of New York. Two witnesses are located in the Eastern District of New York, and
the Southern District of New York is more convenient. Four witnesses are located out of state in
North Carolina, Massachusetts, and Rhode Island; the Southern District and Western District are
equally inconvenient.
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Plaintiffs identify a list of twelve “key witnesses.” Of these, eight are current employees of
defendants, and unsurprisingly, all eight are employees from the three defendants with principal
places of business outside of the Western District of New York. Moreover, two of the remaining
“key witnesses” are agents of a defendant. The two non-party witnesses are located in New York
City, and the Southern District of New York is more convenient. Of the ten remaining “key
witnesses” that are either employees of defendants or their agents, six are located in New York City,
two are located in Philadelphia, and two are located in New Jersey; the Southern District is more
convenient for these witnesses.
Plaintiffs attack defendants’ designation of a number of subcontractors as “key witnesses”
because they were “limited to middling issues pertaining to the Project’s delay and of no import to
the unlawful conspiracy.” Pls.’ Mem. Opp’n at 15. But plaintiffs’ allegations put the circumstances
surrounding the Project’s delays front and center in their complaint—alleging that defendants
sought to shift blame on DiPizio Construction “for the extensive delays in completing Phase 3A of
the Inner Harbor Project in Buffalo, New York, which were in fact actually caused by the
incompetence of [defendants].” Am. Compl. at ¶ 1. Given that the cause of delays is a central issue,
plaintiffs can hardly claim that witnesses testifying as to the cause of those delays is “of no import.”
The number of non-party witnesses who would be inconvenienced by having to travel to the
Southern District of New York greatly outweighs those inconvenienced by a transfer to the Western
District. Although plaintiffs attempt to bolster the number of “key witnesses” who would find the
Southern District more convenient by identifying employees and agents of defendants in close
proximity, the Court does not weigh their inconvenience as heavily as that of non-party witnesses.
See Payless Shoesource, Inc. v. Avalon Funding Corp., 666 F. Supp. 2d 356, 364 (E.D.N.Y. 2009)
(inconvenience of employees or agents of the parties does not weigh as heavily as inconvenience of
non-party witnesses). The Court finds that this factor weighs heavily in favor of transfer.
10
B. The Convenience of the Parties
“The convenience of the parties favors transfer when transfer would increase convenience to
the moving party without generally increasing the inconvenience to the non-movant.” Liberty Mut.
Ins. Co. v. Fairbanks Co., 17 F. Supp. 3d 385, 399 (S.D.N.Y. 2014). Plaintiffs and seven of the ten
defendants have their residences or principal places of business in the Western District of New
York. Of the remaining three defendants, their principal places of business are located in: the
Southern District of New York, the Eastern District of New York, and Connecticut. Two of these
three defendants have offices in Buffalo that worked on the Project. Moreover, all defendants have
either joined the motion to transfer, or supported the motion by letter or sworn affidavit. Because
transfer “will result in no additional inconvenience to plaintiff[s], while at the same time making the
forum substantially more convenient for defendants,” this factor weighs strongly in favor of
transfer. Spiciarich v. Mexican Radio Corp., No. 14-CV-9009 SHS, 2015 WL 4191532, at *8 (S.D.N.Y.
July 10, 2015) (internal quotation marks and citation omitted).
C. The Location of Relevant Documents And the Relative Ease of Access to
Sources of Proof
Defendants contend that over one million documents have been produced in the related
litigation in state court and the Western District of New York. Although plaintiffs do not argue that
any relevant documents or sources of proof are located close to the Southern District, they do
correctly note that this factor is entitled to relatively little weight. McGraw-Hill Companies, 2014 WL
988607, at *9 (“[T]his factor is entitled to relatively little weight in the modern era of ‘faxing,
scanning, and emailing documents.’”) (quoting Am. Steamship Owners Mut. Prot. & Indem. Ass'n, Inc. v.
Lafarge N. Am., Inc., 474 F. Supp. 2d 474, 484 (S.D.N.Y. 2007)). Thus, this factor weighs only
slightly in favor of transfer.
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D. The Locus of Operative Facts
“The location of operative facts is a primary factor in determining a § 1404(a) motion to
transfer.” Rosen v. Ritz-Carlton Hotel Co. LLC, No. 14-CV-1385 RJS, 2015 WL 64736, at *4 (S.D.N.Y.
Jan. 5, 2015) (quoting Whitehaus, 2011 WL 4036097, at *2). Despite the construction project’s
location in Buffalo, plaintiffs argue that the transactions underlying the conspiracy occurred in the
Southern District of New York. See S.E.C. v. Lybrand, 2000 WL 913894, at *6 (S.D.N.Y. July 6,
2000) (looking at where “transactions that constituted the core of the fraudulent scheme” were
undertaken to determine locus of operative facts). Kenneth Adams, Empire State’s President,
maintains his office in the Southern District. Because Mr. Adams made the decision to terminate
DiPizio Construction as general contractor, plaintiffs argue that this factor weighs against transfer.
The Court disagrees. The complaint clearly alleges that the Western District is the location
of operative facts: it alleges a conspiracy “led by Thomas Dee” and carried out largely by Messrs.
Dee, Hoyt, and Smith, all Erie residents; “rooted in the backrooms of Erie County’s notorious
culture of political insider dealing;” and involving a plot to replace DiPizio Construction (a company
with its principal place of business in the Western District) with Pike (another company with its
principal place of business in the Western District) as the general contractor for a large construction
project in downtown Buffalo.
The core of the alleged conspiracy also occurred in the Western District. Although plaintiffs
point to Mr. Adams’s New York City office as the key location for transactions underlying the
conspiracy, the complaint concedes that he had no knowledge of the conspiracy alleged. Indeed,
plaintiffs make clear that Mr. Adams “did not know about the design errors and design delays
caused by [Erie Canal’s] design team,” and “relied solely on Defendants Hoyt, Dee and Smith in the
decision to terminate [DiPizio Construction] ‘for cause.’” Am. Compl. at ¶ 210. Moreover, the
complaint repeatedly alleges that Mr. Dee, not Mr. Adams, made the decision to terminate DiPizio
Construction—stating that “Dee, on behalf of [Erie Canal], terminated for cause [DiPizio
12
Construction] as the Project’s General Contractor,” and asserting that “[h]e did so despite the fact
that Erie’s Board did not vote to do so.” Id. at ¶¶ 251–52; see also at Id. at ¶¶ 211, 214–15. Indeed,
DiPizio Construction’s state court action against Erie Canal, seeking a declaratory judgment that its
termination was “nullity,” is premised on the notion that Mr. Dee, not Mr. Smith, made the decision
to terminate DiPizio Construction. Dkt. No. 23-12, Complaint at 4 (“[T]he decision to serve the
Notice of Intent on May 8, 2013 and ultimately, the decision to terminate [DiPizio
Construction] . . . were ultra vires actions taken by Defendant’s President, Mr. Dee, without the
required approval of a majority of the Board.”). The Court finds that the location of operative facts
is in the Western District of New York, and that this factor strongly favors transfer.
E. The Availability of Process to Compel the Attendance of Unwilling Witnesses
Neither party asserts that a witness would be unwilling to testify in either the Southern
District or Western District. “[I]f neither party asserts that a witness will be unwilling to testify
voluntarily, the availability of process to compel testimony is irrelevant to the transfer analysis.”
Rosen, 2015 WL 64736, at *4. Accordingly, this factor is neutral.
F. The Relative Means of the Parties
“Where disparity exists between the parties, such as an individual plaintiff suing a large
corporation, the relative means of the parties may be considered.” Coast to Coast Fabrics, Inc. v. Exact
Change Only Corp., No. 04 CIV. 7300 (DAB), 2006 WL 846716, at *5 (S.D.N.Y. Mar. 29, 2006)
(quoting Berman v. Informix Corp., 30 F. Supp. 2d 653, 659 (S.D.N.Y. 1998)). Neither party argues
that this factor is applicable to the analysis. The Court finds that this factor is neutral.
G. The Forum’s Familiarity With the Governing Law
“Familiarity with the governing law as a factor in determining transfer of venue is generally
given little weight in federal courts.” Am. Eagle Outfitters, Inc. v. Tala Bros. Corp., 457 F. Supp. 2d 474,
479 (S.D.N.Y. 2006) (internal quotation marks and citation omitted). Neither party argues that this
13
factor is applicable because both fora are equally familiar with the federal and state causes of action.
The Court finds that this factor is neutral.
H. The Weight Accorded the Plaintiffs’ Choice of Forum
“A plaintiff’s choice of forum is entitled to considerable weight and is generally not
disturbed unless the balance of the factors strongly favors transfer.” McGraw-Hill, 2014 WL 988607,
at *7. Where “the forum selected is not plaintiff’s home forum or the place where the operative
facts of the action occurred,” however, “this diminishes the weight assigned to this factor.” Id; see
also Hix v. Morgan Stanley & Co. LLC, No. 15CV217-LTS-JCF, 2015 WL 1726548, at *2 (S.D.N.Y.
Apr. 15, 2015) (“[A] plaintiff’s choice of forum is given less deference when it is not her home
district.”); Simpson v. Rodas, No. 10-CV-6670 CS, 2012 WL 4354832, at *10 (S.D.N.Y. Sept. 21, 2012)
(importance of plaintiff’s choice “measurably diminishes” where operative facts “have few
meaningful connections” to plaintiff’s chosen forum).
The Southern District is not plaintiffs’ home district and the operative facts have only a
limited connection to the Southern District of New York. Plaintiffs’ choice of forum weighs against
transfer, but the weight of this factor is diminished accordingly.
I. Trial Efficiency and the Interests of Justice
Defendants argue that Travelers’ action against DiPizio Construction and Ms. DiPizio in the
Western District of New York favors transfer. Moreover, defendants note that the five state court
actions filed in Erie County by DiPizio Construction are based on the same set of facts. “Courts
consistently recognize that the existence of a related action in the transferee district is a strong factor
to be weighed with regard to judicial economy; it can be decisive.” McGraw-Hill, 2014 WL 988607,
at *10 (quoting Brown v. New York, 947 F. Supp. 2d 317, 325–26 (E.D.N.Y. 2013)).
Plaintiffs primarily contend that the other actions are not “related” because none allege “an
unlawful conspiracy by Defendants to wrongfully vilify Plaintiff[s] as the cause of the Project’s
delays.” Pls.’ Mem. Opp’n at 3–4. Although the causes of action alleged may be different, [“t]he
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interests of justice require that the cases be related, not identical.” Columbia Pictures Indus., Inc. v.
Fung, 447 F. Supp. 2d 306, 309–10 (S.D.N.Y. 2006) (quoting Manufacturers Hanover Trust Co. v. Palmer
Corp., 798 F. Supp. 161, 167 (S.D.N.Y. 1992). Even a cursory comparison with the state court
complaints reveals that the suits are undeniably “related.” The same operative facts are at issue,
many of the same parties are involved, and what lies at the heart of each of these cases is the same
allegation made here—namely, that DiPizio Construction’s termination was not warranted.
Moreover, DiPizio Construction has filed counterclaims against Travelers in the Western
District, where Ms. DiPizio is also party, making similar claims as the present allegations against
Travelers. In both cases, the claims against Travelers raise: (1) the propriety of Travelers’s contacts
with Erie Canal; (2) whether Travelers should have accepted Erie Canal’s claim on the performance
bond; (3) the propriety of Travelers’s selection of completion contractor; and (4) Travelers’s refusal
to issue surety bonds. Transferring this case to the Western District will promote judicial economy
by avoiding duplicative work, and allow one Court to resolve the similar factual and legal issues
raised. This factor weighs strongly in favor of transfer
Plaintiffs also argue that the case is likely to proceed more rapidly in this Court than in the
Western District, which they assert is “backed up” due to judicial vacancies. “While relative calendar
conditions are a consideration in deciding section 1404(a) motions, they are never a factor to which
great weight is assigned.” Artoptic Int’l Corp. v. Rio Optical Corp., No. 91 CIV. 1270 (JFK), 1992 WL
170674, at *2 (S.D.N.Y. July 8, 1992). Although plaintiffs claim that their argument is supported by
statistics compiled by the Administrative Office of the United States Courts, they fail to actually cite
any relevant statistics in their brief. Plaintiffs’ failure to offer supporting evidence may be a basis to
discount the weight assigned to this factor. See Longo v. Wal-Mart Stores, Inc., 79 F. Supp. 2d 169, 173
(E.D.N.Y. 1999) (“[B]ecause the Defendant has offered no evidence showing the District of
Arizona’s current caseload, the Court finds that this factor should be given minimal weight in the
overall analysis.”).
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In any event, the median disposition time for the Western District is not so much greater
than the Southern District to support weighing this factor heavily in the Court’s analysis. Viewing
the Administrative Office’s statistics for the twelve month period ending March 21, 2015, the
median disposition time for a civil case was 8.9 months in the Southern District of New York and
11.4 months in the Western District of New York. See Admin. Office of the U.S. Courts, U.S.
District Courts—Combined Civil and Criminal Federal Court Management Statistics (March 31, 2015),
available at http://www.uscourts.gov/statistics-reports/caseload-statistics-data-tables. The Court
finds that the 2.5 month difference in median disposition times weighs only marginally against
transfer. See In re Hanger Orthopedic Grp., Inc. Sec. Litig., 418 F. Supp. 2d 164, 171 (E.D.N.Y. 2006)
(2.7 month difference in relative median disposition times weighs only marginally in favor of
transfer); De Jesus v. Nat’l R.R. Passenger Corp., 725 F. Supp. 207, 209 (S.D.N.Y. 1989) (requiring a
large difference in docket conditions to substantially bear on transfer analysis).
V.
CONCLUSION
Weighing the factors set forth above, the Court in its discretion determines that defendants
have met their burden of demonstrating by clear and convincing evidence that transfer is
appropriate. Accordingly, it is HEREBY ORDERED that defendants’ motion to transfer is
GRANTED, and that this action shall be transferred to the Western District of New York. The
Clerk of Court is directed to terminate the motions pending at Docket Numbers 22 and 28.
SO ORDERED.
Dated: October 5, 2015
New York, New York
_____________________________________
GREGORY H. WOODS
United States District Judge
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