Carolina Internet, LTD. v. TW Telecom Holdings Inc.

Filing 21

ORDER granting 5 Motion to Transfer case to Western District of Colorado; denying 18 Motion to Strike. Signed by Senior Judge Graham Mullen on 7/25/11. (com)

IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF NORTH CAROLINA
CHARLOTTE DIVISION
No. 3:11-CV-00310
CAROLINA INTERNET, LTD,
Plaintiff,
vs.
TW TELECOM HOLDINGS, INC,
Defendant,

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ORDER

THIS MATTER is before the Court on Defendant’s Motion to Change Venue [Doc. No.
5] with Memorandum in Support [Doc. No. 6], and Plaintiff’s Response in Opposition to
Defendant’s Motion to Change Venue [Doc. No. 17], and Defendant’s Reply [Doc. No. 20]. For
the reasons stated below, the Defendants’ motion is GRANTED.
I.

FACTUAL BACKGROUND
On July 29, 2010, tw telecom (“Defendant”) filed suit against Carolina Internet, Ltd.

(“Plaintiff”) in the Western District of Colorado. Doc. No. 6, Brief in Support, at 1. On January
26, 2011, the Western District of Colorado entered a default judgment in favor of tw telecom.
TW Telecom Holdings, Inc. v. Carolina Internet Ltd., No. 10-cv-01799-ZLW-MJW, 2011 WL
250398 (D.Co. January 26, 2011). This same court denied Carolina Internet’s request for a
reconsideration of the default judgment. Id. at *1 n. 1. Carolina Internet has appealed this ruling
to the Tenth Circuit. Brief in Support at 2.
Plaintiff filed the present action on May 26, 2011, in the Mecklenburg County Superior
Court. Doc. No. 1, Ex. 1, Complaint at 1. Defendant removed the case to this Court on June 24,
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2011. Doc. No. 1, Notice of Removal, at 1. Plaintiff alleges several contract-based claims, all
arising out of the Service Agreement for Defendant to provide internet services to Plaintiff.
Complaint, ¶ 3. The parties adopted the Service Agreement in 1999 and renewed it most
recently in 1999. Id. The parties litigated the same Service Agreement in TW Telecom. See
2011 WL 250398, at *1.
II.

ANALYSIS
“A district court may transfer any civil action to any other district where it might have

been brought” in the “interest of justice” or for the “convenience of parties and witnesses.” 28
U.S.C. § 1404(a) (1996). The decision to transfer a case is committed to the court’s discretion.
Id. at (b); In re Ralston Purina Co., 726 F.2d 1002, 1005 (4th Cir. 1984). Usually, the party
requesting transfer bears the “burden of establishing that transfer is warranted.” D.P. Riggins &
Assocs., Inc. v. Am. Bd. Cos., Inc., 796 F.Supp. 205, 211 (W.D.N.C. 1992) (quoting 1A Part 2 J.
Moore, MOORE 'S FEDERAL PRACTICE ¶ 0.345[5] (2d ed. 1991)).
However, the Fourth Circuit has created a “first-filed” doctrine which “giv[es] priority to
the first suit absent showing of a balance of convenience in favor of the second.” Learning
Network, Inc. v. Discovery Commc’ns, Inc., No. 01-1202, 2001 WL 627618, at *3 (4th Cir. June
7, 2001) (quoting Ellicott Mach. Corp. v. Modern Welding Co., Inc., 502 F.2d 178, 180 n. 2 (4th
Cir. 1974)). The first-filed doctrine balances a respect for the plaintiff’s first choice of forum
with considerations of judicial economy. R.J. Reynolds Tobacco Co. v. Star Scientific, Inc., 169
F.Supp.2d 452, 455 (M.D.N.C. 2001) (quoting Serco Servs. C. v. Kelley Co., 51 F.3d 1037, 1039
(Fed. Cir. 1995)). The first filed doctrine prevents courts from interfering with the existing
authority of a sister court. Id. The following factors guide whether the first filed doctrine is
applicable in a given instance: “1) the chronology of the filings, 2) the similarity of the parties
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involved, and 3) the similarity of the issues at stake.” Nutrition & Fitness, Inc. v. Blue Stuff,
Inc., 264 F.Supp.2d 357, 360 (W.D.N.C. 2003). Moreover, in determining whether a transfer is
in the interest of justice, there are eleven factors to guide a court’s discretion.1 Weighing these
factors is a qualitative, not quantitative, process. Uniprop, 753 F.Supp. at 1322.
Here, the first filed doctrine is applicable. The District Court for the Western District of
Colorado has recently entered a default judgment against Plaintiff in an action which involved a
dispute over the same 2009 Service Agreement. The issues are thus substantially similar and the
parties are identical. Furthermore, Carolina Internet has appealed the Western District of
Colorado’s decision and continues to engage in litigation surrounding the 2009 Service
Agreement in the Tenth Circuit. Because the first filed doctrine applies here, tw telelcom’s §
1404(a) transfer request is presumptively appropriate.
This presumption is not overcome by the balance of the Uniprop factors. The parties are
currently litigating a similar dispute in the Western District of Colorado and both lawsuits are
primarily contractual. Further, Plaintiff has identified only two nonparty witnesses who will be
inconvenienced by having to travel to Colorado. Thus, Carolina Internet should not suffer
practical difficulties in presenting its evidence in Colorado. Additionally, there is little concern
about the Colorado court’s ability to apply North Carolina law as they have successfully done so

“The plaintiff's initial choice of forum; the residence of the parties; the relative ease of access
of proof; the availability of compulsory process for attendance of witnesses and the costs of
obtaining attendance of willing witnesses; the possibility of a view; the enforceability of a
judgment, if obtained; the relative advantages and obstacles to a fair trial; other practical
problems that make a trial easy, expeditious, and inexpensive; the administrative difficulties of
court congestion; the interest in having localized controversies settled at home and the
appropriateness in having the trial of a diversity case in a forum that is at home with the state law
that must govern the action; and the avoidance of unnecessary problems with conflict of laws.”
Uniprop Manufactured Hous. Cmtys. Income Fund II v. Home Owners Fnding Corp. of Am., 753
F.Supp. 1315, 1322 (W.D.N.C. 1990).

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in the prior suit. See TW Telecom, 2011 WL 250398, at *2. Plaintiff is also represented by a
firm in Colorado. Id. Therefore, it is unlikely that Plaintiff will be prejudiced by litigating its
claim in the Western District of Colorado.
Plaintiff claims that Sartin v Macik governs this case. Plaintiff correctly identifies that
Sartin v. Macik holds that under North Carolina law a default judgment does not have a
collateral estoppel effect. 535 F.3d 284, 289 (4th Cir. 2008). However, Defendant tw telecom
has not asserted collateral estoppel in its motion to transfer, nor is collateral estoppel presently
relevant. Collateral estoppel is about which, not where, arguments can be made in future
litigation.
III.

CONCLUSION
As the Western District of Colorado is familiar with the present dispute, it is in the

interests of judicial economy for this case to be tried in our sister court in Colorado.
Accordingly, Defendant’s Motion to Transfer pursuant to 28 U.S.C. § 1404(a) is GRANTED.
The Defendant’s Motion to Strike is DENIED. On an issue of this magnitude, the Court found it
important to consider the Plaintiff’s response; however, the Plaintiff is warned that the Court’s
deadlines exist for a reason and should be followed for any further proceedings in which the
Plaintiff is a party. All other pending motions shall be transferred with the case.
Signed: July 25, 2011

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