Inventel Products LLC v. Penn LLC et al

Filing 34

MEMORANDUM & ORDER granting 19 Motion to Dismiss or, in the alternative, to Transfer Venue. For the foregoing reasons, the motion to transfer to the Northern District of Illinois is granted. The Court declines to reach the motion to dismiss. The Clerk of Court is directed to transfer this action to the Northern District of Illinois for all future proceedings. This resolves Docket Number 19. (Signed by Judge Alison J. Nathan on 2/28/2017) (cla)

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UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK

Inventel Products LLC,
Plaintiff,
16-cv-1649 (AJN)

-vMEMORANDUM &
ORDER

Penn LLC, et al.,
Defendants.

ALISON J. NATHAN, District Judge:
In this case, Defendants have filed a motion to transfer the case to the Northern District
of Illinois and, in the alternative, a motion to dismiss. For the following reasons, the Court
grants the motion to transfer to the Northern District of Illinois and therefore declines to address
the motion to dismiss.

I.

Background

Plaintiff Inventel Products ("Inventel") is a company that creates and markets "As Seen
On TV" products. Compl.

iii! 10-11

(Dkt No. 1); Opp. at 2 (Dkt No. 25). Inventel is organized

under the laws of, and based in, the state of New Jersey. Comp.

if 5.

The company sells its

products on television and online to customers across the United States. Compl.

iii! 11, 14; Opp.

at 2. One of the company's products is the "DashCam Pro," a personal security camera that
mounts to the interior windshield of a car. Compl. if l 2-16. Inventel "prominently markets" its
DashCam as an "As Seen on TV" product. Compl.

if 15.

Defendant Penn LLC owns PulseTV.com, a website that sells various consumer products.
Compl.

iii! 6,

Compl.

if 7; Mot. at 2 (Dkt No. 20); Zegar Deel. if 3 (Dkt No. 22).

17; Opp. at 7. Defendant Pulse Direct, Inc. is Penn LLC's managing member.

1

Both Defendants are located

in Illinois. Compl. ~~ 6-7; Mot. at 2; Zegar Deel.~~ 2-3, 25. One of Defendants' products is the
"Hype Dashboard Camera," which, like Inventel's DashCam, is a personal security camera for
cars. Compl. ~~ 17-18; Mot. at 2-3. Defendants promote this product online to customers
throughout the United States. Compl. ~~ 18, 24; Mot. at 2-3; Zegar Deel.~ 5.
According to Inventel, Defendants have falsely advertised their Hype Dashboard Camera
as an "As Seen On TV" product. Compl. ~~ 18, 36. Inventel alleges that Defendants use "the As
Seen On TV marketing description" in order to induce customers to purchase the Hype
Dashboard Camera, even though Defendants' camera is not actually an "As Seen on TV"
product. Compl. ~~ 36-37; Opp. at 4. Inventel contends that these actions constitute, among
other things, unfair competition in violation of the Lanham Act. Compl. ~~ 35-41; 15 U.S.C.

§ 1125.
Invented originally filed a lawsuit in New Jersey state court on December 11, 2015.
Shravah Deel. Ex. A (Dkt No. 21-1 ); Mot. at 1-2; Opp. at 5. That lawsuit also raised a Lanham
Act claim. Shravah Deel. Ex. A. Defendants removed the case to the United States District
Court for the District of New Jersey on January 8, 2016. Shravah Deel. Ex. B (DktNo. 21-2);
Mot. at 2; Opp. at 5. On January 25, 2016, Inventel voluntarily dismissed the New Jersey action.
Shravah Deel. Ex. C (Dkt No. 21-3); Mot. at 2; Opp. at 5. The parties dispute why Inventel did
so. Inventel claims it dismissed the case because the parties reached an agreement that
Defendants would stop using "As Seen on TV" marketing for the Hype Dashboard Camera.
Opp. at 5; Abdul Deel.,! 48. Defendants respond that this allegation is fabricated and that there
was never any such agreement. Reply at 4 (Dkt No. 28).
A few months later, on March 3, 2016, Inventel filed the instant lawsuit. Dkt No. 1. Just
as in the previously filed New Jersey case, Inventel contends that Defendants' "As Seen on TV"

2

marketing campaign for the Hype Dashboard Camera violates the Lanham Act. Compl. ,-r,-r 3541. According to Inventel, it was forced to refile its lawsuit because Defendants continued to use
"As Seen on TV" marketing in violation of the agreement allegedly reached in the New Jersey
action. Opp. at 5. Inventel also asserts that it decided to refile this case in New York, rather than
New Jersey, because it obtained new counsel that is located in New York. Opp. at 5-6; Abdul
Deel. ,-r 50.
On April 11, 2016, Defendants filed a motion to dismiss and, in the alternative, a motion
to transfer the case to the Northern District of Illinois. Dkt No. 19. The motion to dismiss
contends that the Court lacks personal jurisdiction over the Defendants, that venue is improper,
and that two of Inventel' s state law claims should be dismissed for failure to state a claim. Mot.
at 4-10, 17-20. Upon receiving the motion to dismiss, the Court sua sponte gave Inventel an
opportunity to amend its complaint, but the company declined to do so. Dkt Nos. 23-25.
Instead, Inventel filed an opposition to the motion to dismiss and the motion to transfer. Dkt No.
25.
II.

Personal Jurisdiction

Defendants' motion contends both that the Court lacks personal jurisdiction over them
and that the case should be transferred in the interests of justice. Mot. at 4-9, 11-16. The Court
need not rule on the personal jurisdiction question because a district court may resolve a motion
to transfer without first resolving the issue of personal jurisdiction. See Sinochem Int'! Co. v.
Malay. lnt'l Shipping Corp., 549 U.S. 422, 431 (2007); Fort Knox Music, Inc. v. Baptiste, 257
F.3d 108, 112 (2d Cir. 2001) ("The district court has th[e] power to transfer venue [under§
1404(a)] even ifit lacks personal jurisdiction over the defendants."); McGraw-Hill Cos. Inc. v.
Jones, No. 12-CV-7085 (AJN), 2014 WL 988607, at *5 (S.D.N.Y. Mar. 12, 2014).

3

III.

The Court Grants the Motion to Transfer
Defendants seek to transfer this case to the Northern District of Illinois pursuant to 28

U.S.C. § 1404(a). Mot. at 11. Under Section 1404(a), "[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." 28 U.S.C. § 1404(a).
To determine whether transfer is appropriate, the Court applies a two-step inquiry. First,
the Court examines whether the action could have been brought in the proposed transferee court,
in this case the Northern District of Illinois. Gross v. British Broad. Corp., 386 F.3d 224, 230
(2d Cir. 2004); P.E.A. Films, Inc. v. Metro-Goldwyn-Mayer, Inc., No. 14-CV-7263 (JSR), 2014
WL 6769377, at* 1 (S.D.N.Y. Nov. 12, 2014); McGraw-Hill, 2014 WL 988607, at *5. Second,
the Court "balance[s] the private and public interests," Gross, 386 F.3d at 230, to determine
whether transfer is warranted "[f]or the convenience of parties and witnesses, [and] in the
interest of justice," 28 U.S.C. § 1404(a).

A.

This Action Could Have Been Brought in the Northern District of Illinois

"The first step in deciding a motion to transfer venue under§ 1404(a) is to assess whether
the action could have been brought in the transferee district." De Souza v. JPMorgan Chase &

Co., No. 12 Civ. 1738 (AJN), 2013 WL 11313241, at* 1 (S.D.N.Y. July 16, 2013). Here, the
parties agree that this lawsuit could have been brought in the Northern District of Illinois. Mot.
at 11-12; Opp. at 10 ("It is not in dispute that the action could have been brought in the N.D.Il.").
Under 28 U.S.C. § 139l(b)(l), a civil action may be brought in "ajudicial district in which any
defendant resides, if all defendants are residents of the State in which the district is located."
Both of the defendants "reside" in the Northern District of Illinois, and thus venue would be

4

proper in the transferee district. Mot. at 11-12; Zegar Deel.~~ 2-3, 25-26; see SBAV LP v. Porter
Bancorp, Inc., No. 13 Civ. 372(PAE), 2013 WL 3467030, at *3 (S.D.N.Y. July 10, 2013).

B.

The Other Factors Favor Transfer

"Next, the Court must determine whether transfer would be an appropriate exercise of its
discretion." De Souza, 2013 WL 11313241, at *2. A multifactor, totality of the circumstances
test applies when making the decision. "Among the factors to be considered in determining
whether to grant a motion to transfer venue are, inter alia: ( 1) the plaintiff's choice of forum, (2)
the convenience of witnesses, (3) the location of relevant documents and relative ease of access
to sources of proof, (4) the convenience of parties, (5) the locus of operative facts, (6) the
availability of process to compel the attendance of unwilling witnesses, and (7) the relative
means of the parties." NY Marine & General Ins. Co. v. Lafarge North Am., Inc., 599 F.3d 102,
112 (2d Cir. 2010) (citation and quotation marks omitted). The Court analyzes each of these
factors in turn.

1.

Plaintifrs Choice of Forum

In many instances, the plaintiff's choice of forum is "entitled to substantial deference."
Gross, 386 F.3d at 230. Accordingly, the fact that Inventel wishes to litigate this case in New

York cuts against Defendants' motion to transfer. However, the deference a court should give to
this factor diminishes when, as here, "the forum selected is not the plaintiff's home forum or the
place where the operative facts of the action occurred." McGraw-Hill, 2014 WL 988607, at *7;
see also Gross, 386 F.3d at 230 ("[T]he degree of deference to the plaintiff's forum depends in

part on a number of considerations, such as the plaintiff's own connection to that forum."). This
principle applies "even when the plaintiff's home district is adjacent to the forum." Levy v.
Welsh, No. 12-CV-2056 (DLI)(VMS), 2013 WL 1149152, at *5 (E.D.N.Y. Mar. 19, 2013)

5

(quoting Nabisco, Inc. v. Brach's Confections, Inc., 2000 WL 1677935, at *4 (S.D.N.Y. Nov. 8,
2000)).
Here, Inventel has almost no connection to its chosen forum. Inventel is a New Jersey
company. Compl.

~

5. Beyond being the location of its lawyers, Inventel's only connection to

New York is that, through its online sales, it inevitably sells products to New York customers.
See Compl.

~

1O; Opp. at 4-5. But Inventel sells its products to customers across the United

States, and New York has no more of a significant connection to this case than any of the other
states in which Inventel's consumers are located. "[S]ince New York is not Plaintiffs home
district, little weight is afforded to its choice to litigate in this District." Pausch Medical GmBH
v. PauschLLC, No. 14-cv-1945 (PAC), 2015 WL 783365, at *1 (S.D.N.Y. Feb. 24, 2015)
(citing Tole v. Glenn Miller Prods., Inc., 2013 WL 4006134, at *5 (S.D.N.Y. Aug. 6, 2013)).

2.

The Convenience of the Witnesses and the Parties

"Convenience of both the party and non-party witnesses is probably the single-most
important factor in the analysis of whether transfer should be granted." ESPN, Inc. v. Quiksilver,
Inc., 581 F. Supp. 2d 542, 547 (S.D.N.Y. 2008) (quoting Fuji Photo Film Co., Ltd. v. Lexar
Media, Inc., 415 F. Supp. 2d 370, 373 (S.D.N.Y. 2006)). Here, none of the parties have any
significant connection to New York. As mentioned above, Plaintiff Inventel is a New Jersey
company: the company was organized under the laws of New Jersey, and the company's
principal place of business is Rockaway, New Jersey. Compl.

~

5; Abdul

Dec.~

2 (Dkt No. 26).

The defendants are from Illinois: Defendant Penn LLC is a Delaware Corporation based in
Illinois, and Defendant Pulse Direct is organized under Illinois law and based in Illinois. Compl.
~~

6-7; Mot. at 2; Zegar

Deel.~~

2-3, 25. None of the parties have any sort of place in business

in New York. See Opp. at 4; Zegar Deel.

~~

2-3; Abdul Deel.

6

~~

2, 31. They do not do any in-

person sales of their products in New York, nor do they specifically target New York customers.
See Opp. at 4; Abdul

Deel.~~

10-16. To the extent any of the parties in this litigation do any

sales in New York, it is because their products are available online and on television and may be
purchased by anyone in the United States, including customers located in New York.
Similarly, the expected witnesses in this case overwhelmingly reside outside of New
York. Inventel identifies twelve witnesses it expects to testify, all of which except for one live or
work in New Jersey. Abdul

Dec.~~

33-46. Most of the witnesses are employees oflnventel,

and the rest are mainly retailers located in New Jersey who sell Inventel products. Id.
Defendants identify four witnesses that they expect will testify, all of whom are employees of
Defendants and work in Defendants' Illinois office. Zegar Dec.~~ 24-25. In short, only one of
sixteen identified potential witnesses is located in Inventel' s chosen forum. In contrast, the
Defendants and all of their witnesses are located in the proposed transferee forum. This suggests
that transfer is appropriate.
Despite the lack of connection between New York and the parties and witnesses, Inventel
contends that "convenience of both the party and non-party witnesses" factor favors keeping the
case here because New York is close to New Jersey. Opp. at 11-14. The Court finds this
argument unpersuasive. While it is true that the Southern District of New York is more
convenient than Illinois for Inventel and its witnesses, this is only because Inventel and nearly all
of its witnesses are located in New Jersey, not because they live in New York. The proximity of
New Jersey to New York does not preclude transfer. See Freeman v. Hoffmann-La Roche Inc.,
No. 06CIV13497(RMB)(RLE), 2007 WL 895282, at *2 (S.D.N.Y. Mar. 21, 2007) (granting
motion to dismiss out of the Southern District of New York when one plaintiff resided in New
Jersey, one plaintiff resided in Kansas, and the defendants had their headquarters and principal

7

place of business in New Jersey); Bernal v. Du Pont De Nemours E.I. and Corp., No. 93 Civ.
1639 (PKL), 1993 WL 378790, at *3 (S.D.N.Y. Sept. 24, 1993) (granting motion to transfer to
New Jersey, even though the plaintiffs "continually stressed that the Southern District is easily
accessible from New Jersey"); De Jesus v. Nat'! R.R. Passenger Corp., 725 F. Supp. 207, 209
(S.D.N.Y. 1989) (granting motion to transfer, notwithstanding "the proximity ofNew York to
New Jersey," because the case "ha[d] no significant connection" to New York).
The Court concludes that the "convenience of witnesses and parties" factor is either
neutral or favors transfer.
3.

Location of Relevant Documents and Relative Ease of Access to
Sources of Proof

In today's modern world of electronic documents, the location of relevant documents is a
largely neutral factor. Dentsply Int 'l Inc. v. Dental Brands for Less LLC, No. 15 Civ. 8775
(LOS), 2016 WL 868335, at *2 (S.D.N.Y. Mar. 4, 2016); Nelson v. Myrtle Beach Collegiate
Summer Baseball League, LLC, No. 3:12cv1655 (JBA), 2013 WL 6273890, at *10 (D. Conn.
Dec. 4, 2013) ("[M]odern technology limits the weight of this factor."). Both parties concede
that the location of relevant documents has little relevance to the transfer motion. See Mot. at 13
("Admittedly, it would not be particularly burdensome for Defendants to bring its documents to
New York."); Opp. at 15 ("[I]n the age of electronic documents, it is not inconvenient for either
party to bring their documents to either comi house."). The Court therefore finds this factor
neutral.
4.

The Locus of Operative Facts

The "locus of operative facts" is an important factor to consider when deciding a motion
to transfer. CY!, Inc. v. Ja-Ru, Inc., 913 F. Supp. 2d 16, 19 (S.D.N.Y. 2012). But this factor has
proved problematic in cases like this, where a plaintiff alleges that an infringing product was sold
8

in multiple states. Id. at 19-21. Some courts have concluded that the "locus of operative facts"
is the plaintiffs initially chosen forum so long as there have been any sales in that forum. See
id.; see, e.g., Quiksilver, 581 F. Supp. 2d at 549; Kiss My Face Corp. v. Bunting, No. 02CIV2645

(RCC), 2003 WL 22244587, at *3 (S.D.N.Y. Sept. 30, 2003). If true, then this factor would
favor keeping the case in New York. In contrast, other courts have concluded that "where a
party's products are sold in many states, sales alone are insufficient to establish a material
connection to the forum and to override other factors favoring transfer." Mola, Inc. v. Kacey
Enters., LLC, No. 10-CV-1045S, 2011WL3667505, at *9 (W.D.N.Y. Aug. 21, 2011)

(alteration omitted) (quoting Invivo Research, Inc. v. Magnetic Resonance Equip. Corp., 119 F.
Supp. 2d, 433, 439-40 (S.D.N. Y. 2000)).
This Court has previously sided with those courts taking the latter position. The Court
concluded "that those cases holding that the initially chosen forum is the locus of operative facts
if there have been sales in that district, notwithstanding sales outside the district, are not
persuasive." CY!, Inc., 913 F. Supp. 2d at 21. The Court explained that, when an infringing
product (or, in this case, a product with an allegedly false marketing campaign) has been sold in
multiple districts, "each such district has a roughly equivalent claim to being the locus of
operative facts." Id. Furthermore, to conclude that the locus of operative facts is the initially
chosen forum would be to "conflate" the two factors "of the locus of operative facts" and "the
Plaintiffs choice of forum." Id. This Court further reasoned that the location of "the design and
development of the allegedly infringing products" was relevant to the locus of the operative
facts. Id. Applying that concept here, the location of the design of the allegedly false marketing
campaign, in this case Illinois, is relevant to the "locus of operative facts" factor. See id.; see
also Mak Mktg., Inc. v. Kalapos, 620 F. Supp. 2d 295, 310 (D. Conn. 2009)

9

("[M]isrepresentations and omissions are deemed to occur in the district where they are
transmitted or withheld, not where they are received." (citations and quotation marks omitted)).
For these reasons, the Court concludes that the "locus of operative facts" factor is either neutral
or slightly favors transfer. See also AEC One Stop Grp., Inc. v. CD Listening Bar, Inc., 326 F.
Supp. 2d 525, 530 (S.D.N.Y. 2004) (concluding the locus of operative facts in an unfair
competition case was the initial forum but affording this factor limited weight given that most of
defendant's contacts were in the proposed transferee district and most of the allegedly illegal acts
occurred outside New York); Herbert Ltd. P 'ship v. Electronic Arts Inc., 325 F. Supp. 2d 282,
289 (S.D.N.Y. July 8, 2004) (concluding that the locus of operative facts was the initial forum
but giving this factor little weight because sales of the allegedly infringing products also
occurred in other states).
5.

The Availability of Process to Compel the Attendance of Unwilling
Witnesses

"Ordinarily availability of process to compel the attendance of unwilling non-party
witnesses ... is a consideration in determining a motion to transfer." FTC v. Navestad, No. 09CV-6329T, 2010 WL 743899, at *3 (W.D.N.Y. Feb. 25, 2010). Here, Defendants do not
identify any nonparty witnesses they anticipate will testify, but Inventel does identify five such
witnesses. Abdul

Deel.~~

41-45. Four oflnventel's potential nonparty witnesses are located in

New Jersey, and one of them is located in New York. Id. This Court could exercise subpoena
power over these nonparty witnesses if they refused to testify. See Fed. R. Civ. P. 45(c); Local
Union No. 3 Int 'l Bhd. of Elec. Workers v. General Elec. Int 'l, No. 10 CV. 7319(BSJ), 2011 WL

1842239, at *4 (S.D.N.Y. May 9, 2011) ("[T]he Court could exercise subpoena power over all
those domiciled within a 100-mile radius from Manhattan under Rule 45[.]"). This suggests that
New York is an appropriate forum.
10

Although the Court concludes that this factor cuts against transfer, it also finds that this
factor is entitled to less weight than others because Inventel does not assert that any of its
potential nonparty witnesses have indicated an unwillingness to testify. See Opp. at 14-15;
Abdul Deel.

'i!'il 41-45; Accantia Grp.

Holdings v. Food Mkt. Merch., Inc., 908 F. Supp. 2d 439,

442 n.1 (S.D.N.Y. 2012) ("[A]vailability of process to compel attendance does not weigh in
favor of transfer when no non-party witness indicated unwillingness to testify."); Easy Web
Innovations, LLC v. Facebook, Inc., 888 F. Supp. 2d 342, 354 (S.D.N.Y. 2012) ("There is no

indication that any non-party witnesses would refuse to appear and, thus, this factor is neutral.");
Mastr Asset Backed Secs. Trust 2007-WMCJ ex rel. US. Bank NA. v. WMC Mortgage LLC, 880

F. Supp. 2d 418, 422 (S.D.N. Y. 2012); Fuji Photo Film Co., Ltd., 415 F. Supp. 2d at 375
("Because paiiies can compel the testimony of their own employees without the need for
subpoena, and because neither plaintiffs nor defendant indicate that any non-party witnesses will
be called to testify, or that if they are called they will be unwilling to testify, this factor has no
impact on the analysis.").

6.

The Relative Means of the Parties

Finally, "the relative means of the parties" is relevant when deciding a motion to transfer.
D.H Blair & Co., Inc. v. Gottdiener, 462 F.3d 95, 107 (2d Cir. 2006) (citation omitted).

However, "[t]his factor is not entitled to great weight" when, as is true here, "plaintiff and
defendant are both corporations." American Eagle Outfitters, Inc. v. Tala Bros. Corp., 457 F.
Supp. 2d 474, 478 (S.D.N.Y. 2006) (quoting Toy Biz, Inc. v. Centuri Corp., 990 F. Supp. 328,
331 (S.D.N.Y. 1998)). The Court therefore finds this factor neutral. See Opp. at 17 (conceding
this point).

11

C.

Summary

Applying the multi-factor test, the Court concludes that transfer is warranted in this case.
This case has very little connection to New York. Neither Plaintiff nor Defendants are
incorporated in, or have any places of business in, New York. The parties do not appear to target
New York customers any more vigorously than they target customers in other states. The
connections between this case and Plaintiffs chosen forum appear limited to the fact that
Inventel' s attorneys are located in New York and that Inventel sells the Dash Cam across the
United States, including in New York. Given the lack of connection between this case and New
York, it is unsurprising that nearly all of the relevant factors are either neutral or favor a transfer
to the Northern District of Illinois, a forum that has a more significant relationship to this case
given that it is where the defendants are located. See McGraw-Hill, 2014 WL 988607, at * 11
(granting motion to transfer when "[t]he only factor pointing in favor ofretaining jurisdiction in
this district is that Plaintiffs chose the Southern District of New York as their forum."); Carlton
Int'!., PLC v. Am. Concord Techage, Inc., No. 94 CIV. 3750 (JFK), 1995 WL 450274, at *5
(S.D.N.Y. July 31, 1995) (granting motion to transfer when "Plaintiffs only contact with the
Southern District of New York appears to be the location of their attorney").
IV.

Conclusion

For the foregoing reasons, the motion to transfer to the Northern District of Illinois is
granted. The Court declines to reach the motion to dismiss. The Clerk of Court is directed to
transfer this action to the Northern District of Illinois for all future proceedings.
This resolves Docket Number 19.

12

SO ORDERED.

Dated:ft\

~2f

,2017

New York, New York
J. NATHAN

13