Archer Healthcare, Inc. v. Cuthbert-Dutcher et al
ORDER granting in part and denying in part 9 Motion to Dismiss and denying as moot with prejudice to re-filing after transfer 15 Motion to Stay. The Court in its discretion TRANSFERS this action pursuant to 28 U.S.C. § 1404(a) to the United States District Court for the District of Colorado. Signed by United States District Judge Terrence W. Boyle on 4/12/2018. (Edwards, S.)
IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF NORTH CAROLINA
ARCHER HEALTHCARE, INC. f/k/a
AOS RESEARCH, INC.,
JILL L. CUTHBERT-DUTCHER and ·
QUESTRA MED COMMUNICATIONS,
This cause comes before the Court on defendants' motion to dismiss or alternatively to
transfer venue to the United States District Court for the District of Colorado. Plaintiff has
responded, defendants have replied, and the matter is ripe for ruling. For the reasons that follow,
the motion to transfer is granted.
Plaintiff instituted this action by filing a complaint on August 29, 2017, alleging a single
claim against defendants for violation of the Computer Fraud and Abuse Act arising out of
defendants' access of plaintiffs protected computers with the intent to defraud plaintiff. Plaintiff
alleges that defendant Cuthbert-Dutcher used plaintiffs employee John Katter's email account to
gain access to plaintiff Archer's customer relationship management database using Katter's name
and password credentials. Prior to the acts giving rise to the complaint, plaintiff Archer and
defendant Questra Med had been engaged in a joint venture to provide telephone and other patient
support services to patients taking the drug Xifaxan. Katter was at that time employed by Questra
Med; Katter later became employed by Archer. At some point after becoming employed by
Archer, Katter returned a laptop that he had used while employed at Questra Med to defendants
which had stored on it Katter' s Archer email and password. At the time of the filing of the
complaint in this Court, defendant Questra Med had instituted an action against Katter and plaintiff
in Arapahoe County, Colorado district court. Plaintiff alleges that "[o]ne or more of the factual
allegations in the Colorado Lawsuit contained information that likely could only have been
obtained from a review ofKatter's Archer e-mail communications." Compl. if 19.
Rule 12(b)(3) of the Federal Rules of Civil Procedure provides for dismissal. of a complaint
that is filed in an improper venue. The complaint in this action alleges simply that "[v ]enue is
proper." Compl. if 7. Under 28 U.S.C. § 1391, venue is proper in
1) a judicial district in which any defendant resides, if all defendants are residents
of the State in which the district is located;
(2) a judicial district in which a substantial part of the events or omissions giving
rise to the claim occurred, or a substantial part of property that is the subject of
the action is situated; or
(3) ifthere is no district in which an action may otherwise be brought as provided
in this section, any judicial district in which any defendant is subject to the court's
personal jurisdiction with respect to such action.
28 U.S.C. § 1391(b). The complaint reveals that defendant Cuthbert-Dutcher does not reside in
this juridical district, and thus venue is not proper here under§ 1391(b)(l). See Compl. if 3. The
complaint alleges that the fraudulent and improper access to its materials occurred when CuthbertDutcher used Katter' s laptop; Cuthbert-Dutcher is a resident of Colorado, defendant Questra Med
is headquartered in Colorado, and there is no allegation that any offending access occurred from
anywhere outside Colorado. Ho""'.ever, plaintiff argues in response to the motion to dismiss that
a substantial part of the property that is the subject of the action, namely its database, is maintained
in Wilmington, North Carolina, thus giving rise to venue in this district under§ 1391(b)(2). As
other courts have held that the location of a server or database is sufficient to constitute the situs
of the injury or the property subject to the action, see, e.g., Verizon Online Servs., Inc. v. Ra/sky,
203 F. Supp. 2d 601, 623 (E.D. Va. 2002), the Court concludes that venue is proper in this district.
However, the Court further concludes that transfer to Colorado is appropriate under 28
U.S.C. § 1404(a). A court may transfer venue in a civil action, to any district or division in which
the action might have been brought, for the convenience of parties and witnesses and in the interest
of justice. 28 U.S.C. § 1404(a). "An order allowing transfer of a matter to another 1district is
committed to the discretion of the district court." In re Ralston Purina Co., 726 F.2d 1002, 1005
(4th Cir. 1984). A transferor court may consider numerous factors, including the plaintiff s choice
of forum, witness convenience and access, the convenience of the parties, where the events
occurred that gave rise to the action, and enforceability of judgment. See Collins v. Straight Inc.,
748 F.2d 916, 921 (4th Cir. 1984); Nutrition & Fitness, Inc. v. Blue Stuff, Inc., 264 F.Supp. 2d 357,
362 (W.D.N.C. 2003). As a court considers such factors, it is mindful that the ultimate decision
of whether transfer is appropriate is not reached by cataloguing the weighted result of each factor,
but rather is within the "art of judging." Datasouth Computer Corp. v. Three Dimensional
Technologies, Inc., 719 F.Supp. 446, 451 (W.D.N.C. 1989) (citation omitted).
This circuit has also recognized the "first-filed" rule, see Learning Network, Inc. v.
Discovery Comm., Inc., 11 F. App' x 297, 300 (4th Cir. 2001); Nutritidn & Fitness, 264 F.Supp.
2d at 360, which provides a presumption of priority in parallel litigation in the venue where
jurisdiction is first established. Northwest Airlines, Inc. v. American Airlines, Inc., 989 F.2d 1002,
1006 (8th Cir. 1993); see also VRCompliance LLC v. HomeAway, Inc., 715 F.3d 570, 574 (4th Cir.
2013) (where parallel suits pending in state and federal court, first filed should generally have
The Colorado action, which involves the same parties and business relationship and similar
issues, was the first-filed. The factors generally considered-the chronology of the filings and the
similarity of the parties and the issues - favor venue in Colorado. See US Airways, Inc. v. US
Airline Pilots Ass'n, No. 3:11-CV-371-RJC-DCK, 2011 WL 3627698, at *2 (W.D.N.C. Aug. 17,
2011) (discussing factors). The Court in its discretion concludes that the courts of Colorado are
the better venue to consider the claims between these parties. Transfer to the United States District
Court for the District of Colorado is therefore appropriate.
For the foregoing reasons, defendants' motion to dismiss or transfer [DE 9] is GRANTED
IN PART and DENIED IN PART. The Court in its discretion TRANSFERS this action pursuant
to 28 U.S.C. § 1404(a) to the United States District Court for the District of Colorado. The motion
to stay discovery [DE 15] is DENIED as MOOT without prejudice to re-filing after transfer.
SO ORDERED, this ~day of April, 2018.
UNITED STATES DISTRICT JUDGE
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