Coshocton Grain Company v. Caldwell-Baker Company

Filing 8

ORDER finding as moot 5 Motion to Dismiss for Lack of Jurisdiction; granting 5 Motion to Change Venue. The Clerk shall therefore transfer this case to the United States District Court for the District of Kansas in Kansas City, Kansas. Signed by Judge Gregory L. Frost on 11/18/14. (kn)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF OHIO
EASTERN DIVISION
COSHOCTON GRAIN COMPANY,
Plaintiff,
Case No. 2:14-cv-2182
JUDGE GREGORY L. FROST
Magistrate Judge Elizabeth P. Deavers

v.
CALDWELL-BAKER COMPANY,
Defendant.

OPINION AND ORDER
This matter is before the Court for consideration of Defendant’s motion to dismiss and
for change of venue (ECF No. 5) and Plaintiff’s memorandum in opposition (ECF No. 7). For
the reasons that follow, the Court finds the motion to transfer well taken and transfers the case to
the United States District Court for the District of Kansas in Kansas City, Kansas.
I. Background
This action presents a dispute between Plaintiff, Coshocton Grain Company, and
Defendant, Caldwell-Baker Company. According to the complaint, Plaintiff is an Ohio
corporation headquartered in Ohio, while Defendant is a Delaware corporation headquartered in
Gardner, Kansas. Defendant leases railcars to its customers, which include Plaintiff. In August
2014, however, Defendant sent Plaintiff a notice indicating Defendant’s intent to terminate the
parties’ lease agreement. Various correspondence ensued, and in early November 2014,
Defendant took possession of one of the railcars leased to Plaintiff.
Plaintiff subsequently filed its complaint on November 10, 2014, asserting claims for
breach of contract, tortious interference with business contracts, and declaratory relief. (ECF

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No. 1.) Plaintiff also filed a motion for a temporary restraining order and a preliminary
injunction (ECF No. 2), which led to this Court holding an informal conference. As a results of
discussions held at that conference, the Court issued a briefing schedule for motions practice
targeting the threshold issues of venue and jurisdiction. (ECF No. 3.) Pursuant to that schedule,
Defendant has filed a motion to dismiss under Federal Rules of Civil Procedure 12 and to
transfer the case under 28 U.S.C. § 1404(a). (ECF No. 5.) The parties have completed briefing
on the transfer issue, which is ripe for disposition.
II. Discussion
28 U.S.C. § 1404(a) provides that “[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.” 28 U.S.C. § 1404(a). A district court has discretion whether
to transfer venue. Gulf Oil Corp. v. Gilbert, 330 U.S. 501, 508 (1947). The exercise of this
discretion ordinarily involves evaluating “both the convenience of the parties and various publicinterest considerations,” which means that, “[o]rdinarily, the district court . . . weigh[s] the
relevant factors and decide[s] whether, on balance, a transfer would serve ‘the convenience of
parties and witnesses’ and otherwise promote ‘the interest of justice.’ ” Atlantic Marine Constr.
Co., Inc. v. U.S. Dist. Court for the Western Dist. of Texas, 134 S. Ct. 568, 581 (2013).
Thus, as the Sixth Circuit has explained, a district court deciding whether to transfer a
case “should consider the private interests of the parties, including their convenience and the
convenience of potential witnesses, as well as other public-interest concerns, such as systemic
integrity and fairness, which come under the rubric of ‘interests of justice.’ ” Moses v. Bus.

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Card Express, Inc., 929 F.2d 1131, 1137 (6th Cir. 1991). See also Atlantic Marine Constr. Co.,
Inc., 134 S. Ct. at 581 n.6. Private interest factors of the parties include “ ‘the relative ease of
access to sources of proof; availability of compulsory process for attendance of unwilling, and
the cost of obtaining attendance of willing, witnesses; . . . and all other practical problems that
make trial of a case easy, expeditious and inexpensive.’ ” Hanning v. New England Mut. Life
Ins. Co., 710 F. Supp. 213, 214 (S.D. Ohio 1989). Public interest factors include:
(1) the administrative difficulties flowing from court congestion; (2) the local interest
in having localized interests decided at home; (3) the familiarity of the forum with
the law that will govern the case; and (4) the avoidance of unnecessary problems of
conflicts of laws or in the application of foreign law.
B.E. Tech., LLC v. Sony Computer Entm’t Am. LLC, Nos. 2:12-cv-02826-JPM-tmp, 2:12-cv02827-JPM-tmp, & 2:12-cv-02828-JPM-tmp, 2013 WL 3804030, at *4 (W.D. Tenn. July 19,
2013) (quoting In re Acer Am. Corp., 626 F.3d 1252, 1254 (Fed. Cir. 2010)).
Although “[t]here is no definitive formula or comprehensive test for determining the
issue of convenience,” courts have looked at the foregoing factors and related interests,
including:
(1) convenience of the witnesses; (2) availability of judicial process to compel the
attendance of unwilling or uncooperative witnesses; (3) location of the relevant
documents or records, and the relative ease of access to sources of proof; (4)
residence and convenience of the parties; (5) relative financial means and resources
of the parties; (6) locus of the operative facts and events that gave rise to the dispute
or lawsuit; (7) each judicial forum’s familiarity with the governing law; (8) the
deference and weight accorded to the plaintiff’s choice of forum; and (9) trial
efficiency, fairness, and the interests of justice based on the totality of the
circumstances.

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Mardini v. Presidio Developers, LLC, No. 3:08-CV-291, 2011 WL 111245, at *6-7 (E.D. Tenn.
Jan. 13, 2011) (quoting Mullins v. ADB Logistics, Inc., No. 1:09–cv–160, 2009 WL 2406408, at
*2–3 (E.D. Tenn. July 31, 2009) (citations omitted)).
Transfer is wholly inappropriate if it merely shifts the burden of inconvenience. See
Reed Elsevier, Inc. v. Innovator Corp., 105 F. Supp. 2d 816, 821-22 (S.D. Ohio 2000). There is
thus a strong presumption in favor of a plaintiff’s choice of forum that “may be overcome only
when the private and public interest factors clearly point towards trial in the alternative forum.”
Piper Aircraft Co. v. Reyno, 454 U.S. 235, 255 (1981). See Trustar Funding v. Mruczynski, No.
1:09-cv-01747-CAB, 2010 WL 1539759, at *10 (N.D. Ohio Mar. 30, 2010) (“ ‘Plaintiff’s choice
of forum should be given ‘great’ or ‘substantial’ weight when considering whether to transfer a
case under § 1404(a).’ ” (quoting U.S. v. Cinemark USA, Inc., 66 F. Supp. 2d, 881, 888 (N.D.
Ohio 1987))). A plaintiff’s choice of forum is given little weight, however, “ ‘where none of the
conduct complained of occurred in the forum selected by the plaintiff.’ ” Keybanc Capital
Markets v. Alpine Biomed Corp., No. 1:07 CV 1227, 2008 WL 828080, at *7 (N.D. Ohio Mar.
26, 2008) (quoting Edmison v. Vision Inv. & Dev., LLC, No. 1:06 CV 1108, 2006 WL 3825149,
at *5 (N.D. Ohio Dec. 26, 2006)).
Defendant asserts that transfer is warranted because the parties’ lease contains a forumselection clause. The existence of a valid forum-selection clause alters the foregoing analysis in
a substantial way because when a contract contains such a clause, “the plaintiff’s choice of
forum ‘merits no weight,’ and a court ‘should not consider arguments about the parties’ private
interests,’ as they previously agreed (contractually) to litigate in a specified forum.” Keehan
Tenn. Investments, LLC v. Guardian Capital Advisors, Inc., No. 1:14 CV 994, 2014 WL

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4809448, at *2 (N.D. Ohio Sept. 26, 2014) (quoting Atl. Marine Constr. Co., Inc. v. U.S. Dist.
Ct. for W. Dist. of Texas, 134 S. Ct. 568, 581-82 (2013)).
The key issue here is whether there is a valid forum-selection clause. Section 18,
paragraph (i) of the lease provides:
(i) Applicable law. The terms of this Lease and all rights and obligations
hereunder shall be governed by the laws and venue of the State of Kansas without
regard to Kansas’ choice of law doctrine. There are words and phrases herein that
are railroad terminology defined by Car and Locomotive Cyclopedia (1997)
dictionary published by Simmons-Boardman.
Defendant argues that this provision constitutes a mandatory forum-selection clause, while
Plaintiff counters that the provision is either a simple choice of law provision or, at most, a
permissive forum-selection clause.
Much of Plaintiff’s argument is based on cases construing dissimilar language. For
example, King v. PA Consulting Group, Inc., 78 F. App’x 645 (10th Cir. 2003), provides little
help because the language at issue in that case simply recognized the possibility of filing in the
courts of a particular state as opposed to requiring such filing. Similarly, Bicknell v. Fernstrom
& Associates, Inc., No. CIV A. 89-2118-O, 1989 WL 75612 (D. Kan. June 28, 1989), is equally
unhelpful because it addressed only a clear choice of law provision inexplicably mislabeled as a
“venue” provision.
Two cases provide some persuasive guidance, however, for construing the actual
language of the lease provision at issue. The first case, Caldwell-Baker Co. v. Nebkota Railway,
Inc., No. 13-2391-RDR, 2013 WL 5467109 (D. Kan. Sept. 30, 2013), in fact involved Defendant
and the same purported forum-selection clause language. The district judge in that case
explained that removal of the case from a Kansas state court to the federal court located in

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Kansas was proper based on the forum-selection clause. Id. at *2. That judicial officer did not
regard the language as a choice of law provision, despite its title of “Applicable Law.” Rather,
the judge concluded that “the language . . . ‘venue of the state of Kansas’ includes federal venues
within the state of Kansas” in addition to Kansas state courts. Id.
The second case features a slightly different provision that nonetheless contains the same
core language, albeit within a clause with other slightly varied wording. In S.M.W. Seiko, Inc. v.
Howard Concrete Pumping Co., Inc., a magistrate judge considered a clause that read that “all
actions arising here from shall be governed by the laws and venues in the State of New
Hampshire.” 170 F. Supp. 2d 152, 158 (D.N.H. 2001). That judicial officer concluded that
transfer of the case to a district outside New Hampshire was not appropriate because the
language involved constituted a choice of venue provision reflecting the parties’ agreement as to
the appropriate venue. Id.
Both of the foregoing cases support the obvious and plain language reading of the lease
provision sub judice: the parties agreed to litigate any lease-related disputes in state or federal
courts located in Kansas, including torts related to the contractual rights and obligations they
created, and they agreed that Kansas substantive law would apply. To conclude otherwise would
read out the venue language by transforming it into mere surplusage or conflating it with the
distinct choice of law provision presented alongside the forum-selection provision. Plaintiff’s
explanation that the parties intended “and venue” to mean that Kansas local rules would apply
regardless of where litigation was brought defies common sense. Thus, although the forumselection clause could have been even more explicit, the lack of greater specificity does not
negate the plain language of the provision. Thus, giving effect to each word of the lease

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provision, the Court concludes that it mandates litigating the parties’ dispute in a court in
Kansas.
Three results occur here as a result of finding that the lease presents a valid forumselection clause. First, Plaintiff’s choice of forum is entitled to no weight. Atl. Marine Constr.
Co., Inc., 134 S. Ct. at 581. Plaintiff has then failed to show why this Court should not transfer
this case to federal court in Kansas. See id. at 582.
Second, this Court, as noted, will not consider arguments about the parties’ private
interests that the Court would consider in an ordinary transfer case. Id. The Court instead
“deem[s] the private-interest factors to weigh entirely in favor of the preselected forum.” Id.
Third, this Court will consider the remaining public-interest factors in light of the
admonition that “[b]ecause those factors will rarely defeat a transfer motion, the practical result
is that forum-selection clauses should control except in unusual cases.” Id. This is not an
unusual case, and those factors support transfer here. There is no evidence that administrative
difficulties exist related to court congestion. There is a local interest in having localized interests
decided at home, which favors courts in Kansas deciding issues of Kansas law. And the
familiarity of the transferee forum with the law that will govern the case is obvious. Finally,
there is no apparent unnecessary problems of conflicts of laws here. It is Plaintiff’s burden of
showing that these factors overwhelmingly disfavor transfer, and Plaintiff has not met that
burden. Id. at 583.
In light of the forum-selection clause and having found the balance of relevant factors to
weigh in favor of transfer, the Court in the interest of justice concludes that transfer is

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appropriate. See id. (“In all but the most unusual cases, therefore, ‘the interest of justice’ is
served by holding parties to their bargain.”).
III. Conclusion
For the foregoing reasons, the Court GRANTS Defendants’ motion to transfer and
TRANSFERS the case to the United States District Court for the District of Kansas in Kansas
City, Kansas. (ECF No. 5.) The motion to dismiss component of the filing related to personal
jurisdiction is moot. The Clerk shall therefore transfer this case to the United States District
Court for the District of Kansas in Kansas City, Kansas.
IT IS SO ORDERED.
/s/ Gregory L. Frost
GREGORY L. FROST
UNITED STATES DISTRICT JUDGE

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