United States of America et al v. Bostwick Laboratories

Filing 92

OPINION AND ORDER denying 82 Motion to Transfer Venue Pursuant to 28 USC Section 1404(a) to the USDC for the Eastern District of Virginia. Signed by Judge S Arthur Spiegel on 5/23/2013. (km1)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF OHIO
WESTERN DIVISION

UNITED STATES OF AMERICA,
ex rel. MICHAEL DAUGHERTY,

:
:
:
Plaintiff,
:
:
v.
:
:
BOSTWICK LABORATORIES, et al. :
:
Defendants.
:

NO. 1:08-CV-00354

OPINION AND ORDER

This matter is before the Court on Defendants’ Joint
Motion to Transfer Venue Pursuant to 28 U.S.C. §1404(a) (doc.
82), Relator’s response in opposition thereto (doc. 85), and
Defendants’ reply in support thereof (doc. 86).

The Court held

a hearing on the motion on May 9, 2013, and, for the following
reasons, the Court DENIES Defendants’ motion.
I.

Background
The

facts

of

this

case

are

well-detailed

in

other

filings and will not be repeated here except as necessary for
this Order.
this

qui

Defendants
submitted

In brief, Relator filed his amended complaint in

tam

action

Bostwick
false

on

February

Laboratories

claims

to

13,
and

Medicare,
1

2012,

alleging

that

David

Bostwick

(i)

Medicaid

and

other

federally-funded programs for non-allowable lab services done
without

a

physician’s

healthcare

programs

order

for

lab

and

(ii)

services

billed

federally-funded

unlawfully

referred

to

Defendants in violation of the Anti-Kickback Statute, 42 U.S.C.
§ 1320a-7b(b); the Stark Laws, 42 U.S.C. § 1395nn; and the False
Claims Act, 31 U.S.C. §§ 3729-3733 (doc. 34).

The Government,

as well as the states of Florida, Georgia, Indiana, New York,
Tennessee, Texas, Virginia and the District of Columbia declined
to intervene (doc. 18).
The seal on the case was lifted on June 29, 2011.
Defendants filed motions to dismiss on January 9, March 22 and
June 11, 2012.
2012.

The Court denied those motions on December 18,

Shortly thereafter, Defendant Bostwick Laboratories hired

new counsel, and on February 15, 2013, nearly two years since
the seal on the case was lifted, Defendants filed the instant
motion to change venue.
filed

this

action

in

The Court notes that Relator properly
the

Southern

District

of

Ohio,

and

Defendants do not challenge the Court’s jurisdiction; nor do
they move to dismiss on the basis of improper venue.

On the

contrary,

U.S.C.

Defendants

seek

to

transfer

venue

under

28

§1404(a).
Defendants argue that venue in the Eastern District of
Virginia

is

appropriate

because,
2

while

the

company’s

headquarters

recently

moved

to

New

York,

the

accounting,

finance, marketing, information technology, and human resources
operations

remained

Defendants

note

in

that

their

Virginia

Defendant

office.

Bostwick

In

and

addition,

seven

other

potentially key witnesses reside in or near the Eastern District
of Virginia.

Further, Defendants argue that the proposed change

of venue is appropriate because the state of Virginia, unlike
the state of Ohio, has an interest in this action because the
action is based on conduct that either allegedly occurred in
Virginia or occurred pursuant to corporate policies that were
formulated

and

issued

from

Virginia,

complaint ties the case to Ohio.

whereas

nothing

in

the

Finally, Defendants note that

the only connection this case has to Ohio is that Relator’s
counsel reside here, and convenience of attorneys is not an
appropriate factor for the Court to consider in deciding the
instant motion.
In
remain

here

response,
because

Relator
his

argues

choice

of

that

the

case

should

venue

is

entitled

to

deference; the case does have ties to Ohio because the alleged
fraud occurred on a national basis; and to change venue would
merely shift whatever inconvenience Defendants are faced with
here to Relator.
II.

The Legal Standard and the Court’s Analysis and Conclusion
3

“[T]he

threshold

consideration

under

§

1404(a)

is

whether the action ‘might have been brought’ in the transferee
court.” Kay v. National City Mortgage Co., 494 F. Supp. 2d 845,
849 (S.D. Ohio 2007).

“Once it is determined that a case could

have been brought in the transferee court, the issue becomes
whether

the

transfer

is

justified

under

the

balance

of

the

language of Section 1404(a).” Jamhour v. Scottsdale Ins. Co.,
211 F. Supp. 941, 945 (S.D. Ohio 2002).
Under 28 U.S.C. § 1404, a district court may transfer
a civil action to any other district where the action may have
been brought for the convenience of the parties or witnesses.
“In order for a transfer to take place, the Defendant must make
a

strong

showing

Plaintiff’s

choice

of
of

inconvenience
forum.”

to

Hobson

warrant
v.

upsetting

the

Princeton-New

York

Investors, Inc., 799 F.Supp. 802, 805 (S.D. Ohio 1992).

“A

plaintiff’s choice of forum is given great weight.” Id. at 804.
When

considering

a

motion

to

transfer

venue,

a

district court should consider the convenience of the parties,
the convenience of potential witnesses, and the interests of
justice.

Moses v. Business Card Express, Inc., 929 F.2d 1131,

1137 (6th Cir. 1991).

Venue should not be transferred unless

these factors weigh heavily in favor of the defendant.

West

American Insurance v. Potts, 1990 U.S. App. LEXIS 12513 at *6
4

(6th Cir. July 25, 1990).

Indeed, as this Court has previously

noted, 28 U.S.C. § 1404 does not allow for transfer to a forum
that is equally convenient or inconvenient, nor does it allow
for transfer if that transfer would only shift the inconvenience
from one party to another.

United States ex rel. Roby v. Boeing

Co., 1998 U.S. Dist. LEXIS 22456 at *5 (S.D. Ohio Jan. 21,
1998).
No one disputes that this case could have properly
been brought in the Eastern District of Virginia, so the first
component of the test is easily met.

However, Defendants have

not made the requisite strong showing of inconvenience.

It may

be true that the Eastern District of Virginia would be more
convenient for Defendants, but that is not the question the
Court must answer.

Instead, Defendants must show that they

would be strongly inconvenienced if the case were to remain
here, not that they would be strongly “convenienced” were the
case to be transferred.

According to Defendants, the majority

of witnesses are located in or near Virginia.
notes

that

witnesses

the
are

final

witness

scattered

list

across

is

many

not

However, Relator
complete

states,

and

meaning

that
that,

regardless of the venue, either the witnesses or the lawyers
will have to travel.
change

in

venue

is

Similarly, Defendants contend that the
supported

by

5

the

fact

that

most

of

the

documentary evidence is located in Virginia.
that

nearly

all

of

the

documents

But Relator notes

will

be

produced

electronically, which means that the location of the original
documents is essentially irrelevant and certainly does not tip
the scale “strongly” towards Defendants’ choice of venue.
Finally, the Court cannot escape the concern that the
instant

motion

is

merely

an

attempt

to

forum

shop.

To

be

seeking a new venue just after this Court denied Defendants’
motions to dismiss simply raises this red flag.

It may be a

purely innocent motion, but the Court nevertheless cannot help
but question the timing.

In addition, the Court notes that

Defendants have tried to frame the question of venue as being
about

convenience

Defendants

properly

for

Relator’s

note

should

deliberation on the instant motion.
this argument.

counsel,
not

a

affect

factor
this

that

Court’s

The Court is unmoved by

While it is true that Relator’s counsel are

located here, that does nothing to show that Defendants would be
strongly inconvenienced by the case remaining here.

Indeed, if

anything, a change in venue would force Relator to either hire
new counsel or to, minimally, hire local counsel, which, as he
notes, impermissibly shifts the burden of inconvenience to him.
A district court has broad discretion when considering
motions to transfer venue under 28 U.S.C. § 1404.

6

Hayes v.

Chesapeake & Ohio Railway Co., 374 F. Supp. 1068 (S.D. Ohio,
1973).

After reviewing the facts of this case, this Court is

not satisfied that the Defendants have made a strong showing of
inconvenience

by

Relator’s

choice

of

forum.

Therefore,

the

Court DENIES Defendants’ Joint Motion to Transfer Venue (doc.
82).

SO ORDERED.

Dated:

May 23, 2013

s/S. Arthur Spiegel________________
S. Arthur Spiegel
United States Senior District Judge

7