Behavioral Health Industry News, Inc. v. Mental Health Systems, Inc.
MEMORANDUM (Order to follow as separate docket entry) re: 5 MOTION to Dismiss for Lack of Jurisdiction or, in the alternative, to Transfer Venue, filed by Mental Health Systems, Inc. (See memo for complete details.)Signed by Chief Judge Christopher C. Conner on 5/4/17. (ki)
IN THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF PENNSYLVANIA
BEHAVIORAL HEALTH INDUSTRY
NEWS, INC. D/B/A OPEN MINDS,
MENTAL HEALTH SYSTEMS, INC.,
CIVIL ACTION NO. 1:16-CV-1874
(Chief Judge Conner)
Plaintiff Behavioral Health Industry News, Inc. d/b/a Open Minds, Inc.
(“Open Minds”) alleges that defendant Mental Health Systems, Inc. (“Mental
Health”) failed to make payments to Open Minds in accordance with two contracts.
(See Doc. 1). Presently before the court is Mental Health‟s motion (Doc. 5) to
dismiss for lack of personal jurisdiction pursuant to Federal Rule of Civil Procedure
12(b)(2), FED. R. CIV. P. 12(b)(2), or, in the alternative, to transfer this case to the
United States District Court for the Southern District of California pursuant to 28
U.S.C. § 1404(a). For the reasons that follow, the court will deny the motion.
Factual & Procedural Background
Open Minds is a Pennsylvania corporation with its principal place of business
in the Commonwealth. (Doc. 1 at 11 ¶ 1). Open Minds offers consulting and other
services in the health and human services field. (Id. at 12 ¶ 8). Mental Health is a
California corporation that provides mental health and drug and alcohol
rehabilitation services to California residents. (Id. at 11 ¶ 2; Doc. 6 at 3). Mental
Health‟s services are primarily funded by San Diego County, with additional
funding from Riverside, Fresno, Santa Barbara, San Bernardino, and Contra Costa
Counties. (Doc. 6 at 3) Mental Health does not provide any services in the
Commonwealth of Pennsylvania. (Id.) It also does not receive state funding from
the Commonwealth. (Id.)
Open Minds entered into four contracts with Mental Health, only two of
which are subjects of the instant case. (Doc. 1 at 12-14 ¶¶ 10, 13 & n.1). The first
contract involves Open Minds assisting Mental Health in identifying a software
vendor for Mental Health‟s electronic healthcare records of California patients (the
“Services Agreement”). (Id. at 12 ¶ 10). The contract features Open Minds‟
letterhead and originated in Pennsylvania before being sent to Mental Health in
California. (Id. at 19). Mental Health also agreed to reimburse Open Minds “for any
additional pre-authorized services billed monthly at . . . discounted hourly rates.”
(Id. at 13 ¶ 12). Mental Health and Open Minds signed this contract on December
21, 2010, and January 2, 2011, respectively. (Id. at 20). Mental Health paid Open
Minds a $51,500 fixed fee under this contract. (Id. at 13 ¶ 15).
Appendix A of the Services Agreement enumerates Open Minds‟ contractual
responsibilities in greater detail. (See id. at 21-22). Open Minds would first
“conduct an on-site assessment and review” of Mental Health‟s “organizational
materials” to determine Mental Health‟s requirements for an electronic healthcare
records provider. (Id. at 21). The on-site assessment would be conducted over the
course of a one-time, three-day site visit to Mental Health‟s facilities in California.
(Id.) Open Minds also agreed to “assist [Mental Health] leadership with on-site
vendor demonstrations,” by providing “two one-day on-site visits.” (Id. at 22).
Open Minds also entered into a Discounted Hourly Basis Agreement (the
“Hourly Agreement”) with Mental Health. (Id. at 13 ¶ 13). The Hourly Agreement
proffered by Open Minds is a letter sent to Mental Health on August 3, 2011 by
Monica Oss, president and founder of Open Minds. (Id. at 24). The letter states that
Open Minds would “set up a new project number for ongoing consultation as
requested.” (Id.) The work contemplated would be billed at “[Open Minds‟]
discounted hourly rates, as per [the] original agreement.” (Id. at 13 ¶ 13).
Mental Health requested and paid for Open Minds‟ consultation services
pursuant to the Services Agreement and Hourly Agreement for four years. (Id. at
14 ¶¶ 16-18). Mental Health ceased making payments after July 1, 2015. (Id. at 14 ¶
19). In the fall of 2015, Kim Bond (“Bond”), Mental Health‟s Chief Executive
Officer, flew to Pennsylvania to discuss amounts due to Open Minds. (Id. at 14 ¶ 20).
Open Minds received no subsequent payments despite Bond‟s alleged agreement to
pay in full any amounts due from 2015 to 2016. (Id. at 14-15 ¶¶ 20-21).
Open Minds commenced this action in the Court of Common Pleas for Adams
County on August 5, 2016. (Id. at 2 ¶ 1). Open Minds‟ complaint contains two
counts: breach of contract and, in the alternative, unjust enrichment. (Id. at 15-17
¶¶ 23-35). Open Minds alleges that Mental Health failed to make payments
pursuant to the Services Agreement and the Hourly Agreement, totaling
$236,045.08. (Id. at 15-16 ¶¶ 24-29). Mental Health timely removed the action to the
Middle District of Pennsylvania on September 12, 2016. (Id. at 1-5). On September
19, 2016, Mental Health filed the instant motion (Doc. 5) to dismiss for lack of
personal jurisdiction or, in the alternative, to transfer this case to the United States
District Court for the Southern District of California. The motion is fully briefed
(Docs. 6, 7, 15) and ripe for disposition.
Pursuant to Federal Rule of Civil Procedure 12(b)(2), a party may move to
dismiss a complaint for lack of personal jurisdiction. FED. R. CIV. P. 12(b)(2). In
ruling on a Rule 12(b)(2) motion, the court must accept the allegations in the
complaint as true and draw all reasonable inferences supported by the well-pled
factual allegations in the plaintiff‟s favor. Pinker v. Roche Holdings Ltd., 292 F.3d
361, 368 (3d Cir. 2002); Carteret Sav. Bank, FA v. Shushan, 954 F.2d 141, 142 n.1 (3d
Cir. 1992). The court‟s review is not limited to the face of the pleadings, as
consideration of affidavits submitted by the parties is both appropriate and
required. See Carteret Sav. Bank, 954 F.2d at 146.
Even though the plaintiff bears the ultimate burden of proving personal
jurisdiction over a defendant, Mellon Bank (East) PSFS Nat‟l Ass‟n v. Farino, 960
F.2d 1217, 1223 (3d Cir. 1992), the plaintiff need not make such a showing at the
pleading stage of litigation. Metcalfe v. Renaissance Marine, Inc., 566 F.3d 324, 330
(3d Cir. 2009). To survive a motion to dismiss, the plaintiff must merely allege
sufficient facts to establish a prima facie case of jurisdiction over the defendant. Id.;
Carteret Sav. Bank, 954 F.2d at 142 n.1.
Motions for dismissal or transfer based on the inconvenience of the forum
require an individualized analysis of the facts of each case. Jumara v. State Farm
Ins. Co., 55 F.3d 873, 879-80 (3d Cir. 1995); Lony v. E.I. Du Pont de Nemours & Co.,
935 F.2d 604, 608-15 (3d Cir. 1991). The moving party bears the burden of proving,
by a preponderance of evidence, the facts supporting the inadequacy of the current
venue and the benefits of the proposed location. Jumara, 55 F.3d at 879-80; Lony,
935 F.2d at 609. An evidentiary hearing is permissible, and sometimes necessary,
but such motions may often be resolved on the basis of the undisputed allegations
of the pleadings and affidavits submitted by the parties. See Plum Tree, Inc. v.
Stockment, 488 F.2d 754, 756 (3d Cir. 1973); see 15 CHARLES ALAN WRIGHT ET AL.,
FEDERAL PRACTICE AND PROCEDURE §§ 3828, 3844 (2d ed. 1986).
Mental Health contends that it does not have sufficient minimum contacts
with Pennsylvania to justify the court‟s exercise of personal jurisdiction. (Doc. 6 at
14, 16). Mental Health avers that it does not: (1) conduct business in the
Commonwealth, (2) run any programs in the Commonwealth, or (3) receive any
funding from the Commonwealth. (Id.) Open Minds rejoins that Mental Health
purposefully directed its activities at the Commonwealth by requesting services
from Open Minds, while knowing said services would be provided from and within
the state. (Doc. 7 at 13).
A federal court may assert jurisdiction over a nonresident of the forum state
to the extent authorized by the law of the forum. See FED. R. CIV. P. 4(k)(2). The
Pennsylvania Long-Arm Statute grants jurisdiction coextensive with that permitted
by the Due Process Clause of the Fourteenth Amendment. 42 PA. CONS. STAT. §
5322(b). The court‟s constitutional inquiry is guided by the “minimum contacts”
test established in Int‟l Shoe Co. v. Washington, 326 U.S. 310 (1945). Under this test,
the plaintiff must show that the nonresident defendant has “certain minimum
contacts with [the forum] such that the maintenance of the suit does not offend
traditional notions of fair play and substantial justice.” Int‟l Shoe, 326 U.S. at 316
(internal quotations and citation omitted); see also Marten v. Godwin, 499 F.3d 290,
296 (3d Cir. 2007). The focus of the minimum contacts analysis is “the relationship
among the defendant, the forum, and the litigation,” Shaffer v. Heitner, 433 U.S.
186, 204 (1977), such that the defendant has fair warning that he may be subject to
suit in that forum. Gen. Elec. Co. v. Deutz AG, 270 F.3d 144, 150 (3d Cir. 2001);
Marten, 499 F.3d at 296. “[T]he mere unilateral activity of those who claim some
relationship with a nonresident defendant cannot satisfy the requirement of contact
with the forum State.” World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 298
(1980) (internal citation omitted).
A federal court must possess one of two forms of personal jurisdiction to
comport with these principles. See D‟Jamoos ex rel. Estate of Weingeroff v. Pilatus
Aircraft Ltd., 566 F.3d 94, 102 (3d Cir. 2009) (citing Helicopteros Nacionales de
Colombia v. Hall, 466 U.S. 408, 414-15 (1984)). General jurisdiction allows a court to
exercise its jurisdiction over any party that possesses “continuous and systematic”
contacts with the forum state, regardless of whether the claim arises out of the
party‟s forum-related activities. Helicopteros, 466 U.S. at 415 n.9; Marten, 499 F.3d
at 296. Specific jurisdiction, on the other hand, allows the court to hear claims
arising out of or relating to the party‟s contacts with the forum state. Helicopteros,
466 U.S. at 414 n.8; Telcordia Tech Inc. v. Telkom SA Ltd., 458 F.3d 172, 177 (3d Cir.
Open Minds asserts only specific jurisdiction. (Doc. 7 at 13). To establish
specific jurisdiction over a party, the court must find that (1) the party purposefully
directed its activities at the forum; (2) the causes of action arise out of or relate to at
least one of those activities; and (3) the exercise of jurisdiction comports with fair
play and substantial justice. See D‟Jamoos, 566 F.3d at 102; Marten, 499 F.3d at 296.
The purposeful availment and relatedness inquiries are often described
collectively as requiring „minimum contacts‟ between the defendant and the
relevant forum. In re Chocolate Confectionary Antitrust Litig., 602 F. Supp. 2d 538,
548 (M.D. Pa. 2009) (citing Toys “R” Us, Inc. v. Step Two, S.A., 318 F.3d 446, 451 (3d
Cir. 2003)). A party reaching out and creating continuing relationships and
obligations satisfies the minimum contacts test in contractual disputes. See Burger
King Corp. v. Rudzewicz, 471 U.S. 462, 473-74 (1985); Miller Yacht Sales, Inc. v.
Smith, 384 F.3d 93, 98-100 (3d Cir. 2004). The existence of a contract between a
resident plaintiff and nonresident defendant, without more, is insufficient to
establish defendant‟s minimum contacts with the resident forum. Mellon Bank, 960
F.2d at 1223.
Courts must consider the totality of the circumstances when determining
whether minimum contacts exist. Remick v. Manfredy, 238 F.3d 248, 256 (3d Cir.
2001) (citing Mellon Bank, 960 F.2d at 1223); see Vetrotex Certainteed Corp. v.
Consolidated Fiber Glass Prod. Co., 75 F.3d 147, 152-53 (3d Cir. 1996)). Of
significant import are prior negotiations, contemplated future consequences, the
terms of the contract, and the parties‟ actual course of dealing. Remick, 238 F.3d at
256. Additional considerations include where the services under the contract were
performed and whether the challenging party should have known the services
would be performed there. See id. While actual presence during pre-contractual
negotiations, performance, and resolution of post-contract difficulties is generally
factored into the jurisdictional determination, id. at 255-56, physical presence within
the forum state is not required to establish minimum contacts. O‟Connor v. Sandy
Lane Hotel Co., 496 F.3d 312 at 317 (3d Cir. 2007) (citing Grand Entm‟t Grp., Ltd. v.
Star Media Sale, Inc., 988 F.2d 476, 482 (3d Cir. 1993)).
The court finds that Mental Health has sufficient minimum contacts with
Pennsylvania. Mental Health actively pursued a business relationship with Open
Minds and purposefully directed its business at Pennsylvania. See D‟Jamoos 566
F.3d at 102; Marten 499 F.3d at 296. This case is not one of a resident claiming a
connection to a non-resident through its own unilateral activity: Open Minds did
not solicit the business of Mental Health. See O‟Connor, 496 F.3d at 317, 323.
Mental Health reached into the Commonwealth of Pennsylvania and solicited Open
Minds‟ services. (Doc. 1 at 12 ¶¶ 3-4).
Mental Health was physically present in Pennsylvania. Bond traveled to the
state in the fall of 2015. (Doc. 1 at 14 ¶ 20; Doc. 7 at 14). Open Minds alleges that the
purpose of this visit was to discuss the “overdue invoices” that are the subject of
Open Minds‟ complaint. (Doc. 7-1 at 7-8 ¶¶ 26-27). Taking Open Minds‟ allegations
as true begets finding that Bond was in Pennsylvania to resolve a post-contractual
dispute. See Pinker 292 F.3d at 368. Mental Health was not only physically present
in Pennsylvania, but fully engaged in an on-going business relationship. See
Burger King, 471 U.S. at 478. The court finds that Bond‟s presence in Pennsylvania
evidences Mental Health‟s minimum contacts with Pennsylvania.
The terms of the disputed contracts and the parties‟ course of dealing
likewise support a finding of sufficient minimum contacts. The parties executed the
Services Agreement on Open Minds‟ letterhead, which prominently displays Open
Minds‟ Commonwealth address. (Doc. 1 at 19). Despite Open Minds‟ two visits in
California, Mental Health clearly understood that certain work was contemplated in
the Commonwealth of Pennsylvania, see Remick, 238 F.3d at 256, and that the
contract subjected it to the benefit of Pennsylvania law. See Marten, 499 F.3d at
296. Open Minds produced all of the deliverables pursuant to the Services
Agreement and Hourly Agreement in the Commonwealth. (Doc. 7-1 at 6 ¶¶ 12, 17,
18). From approximately January 2011 until the end of June 2015, Mental Health
received invoices from and remitted payment to Open Minds‟ Pennsylvania
headquarters without protest. (Doc. 1 at 14 ¶¶ 16-18; Doc. 7-1 at 7 ¶¶ 21-23). Four
years of solicitation of, and payment for, services from Open Minds in the
Commonwealth provides a concrete nexus between Mental Health and the
Commonwealth. Miller Yacht Sales, Inc., 384 F.3d at 98. This nexus and the terms
of the contracts justify jurisdiction over Mental Health in the Commonwealth of
In support of its motion, Mental Health relies upon Vetrotex, where a
Pennsylvania manufacturer and a California manufacturer engaged in “sporadic
contacts” concerning a sales contract and a passive buyer. Vetrotex, 75 F.3d at 149.
The matter sub judice is easily distinguishable. Vetrotex was not a case where (1)
“the defendant solicited the contract or initiated the business relationship leading
up to the contract;” (2) “the defendant sent any payments to the plaintiff in the
forum state;” or (3) “the defendant engaged in extensive post-sale contacts with the
plaintiff in the forum state.” Id. at 152-53. Mental Health initiated contact with
Open Minds. (Doc. 1 at 12 ¶ 4). Mental Health sent payments pursuant to the
Services Agreement to Open Minds in the Commonwealth. (Id. at 13-14 ¶¶ 11, 15,
18). And Mental Health and Open Minds entered into several subsequent contracts.
(Id. at 13-14 ¶¶ 13, 16 & n.1; Doc. 6-2 at 20-23, 25-26, 29-30). The Hourly Agreement
in particular contemplates “ongoing consultation as requested.” (Doc. 1 at 24).
Together the contracts reveal a continuing business relationship spanning more
than four years. (See Doc. 1 at 14 ¶¶ 16-18). Mental Health was therefore not a
“passive buyer” of Open Minds‟ services. See Vetrotex, 75 F.3d at 152. Open Minds
has met its prima facie burden of demonstrating Mental Health‟s minimum contacts
Fair Play and Substantial Justice
The court must also inquire whether the exercise of jurisdiction comports
with “traditional notions of fair play and substantial justice.” See Int‟l Shoe, 326
U.S. at 316. Jurisdiction is presumptively constitutional upon a finding of minimum
contacts, and the defendant “must present a compelling case that the presence of
some other considerations would render jurisdiction unreasonable.” See Burger
King, 471 U.S. at 477. Showing an absence of fairness or lack of substantial justice
requires the defendant to overcome a heavy burden. Grand Entm‟t Grp., 988 F.2d
at 483. Determining jurisdictional reasonableness requires balancing the burden on
the defendant, the forum state‟s interest in adjudicating the dispute, the plaintiff‟s
interest in obtaining efficient relief, the interstate judicial system‟s interest in
obtaining the most efficient resolution of controversies, and the shared interest of
the several states in furthering fundamental substantive social policies. O‟Connor,
496 F.3d at 324 (citing Burger King, 471 U.S. at 477).
The court‟s exercise of personal jurisdiction in this case comports with fair
play and substantial justice. To require Open Minds to litigate in California would
impose a burden upon it substantially equivalent to Mental Health‟s burden in
Pennsylvania. See O‟Connor, 496 F.3d at 325. One of the parties to the matter sub
judice will inevitably have to familiarize itself with a new legal system. See id. at
324. Litigating in Pennsylvania will satisfy Open Minds‟ interest in obtaining
convenient and effective relief. See id. at 325. And while California‟s interest in
adjudicating the dispute may be substantial—given that Mental Health is funded by
its citizens—the Commonwealth of Pennsylvania has a “„manifest interest in
providing effective means of redress‟ when a foreign corporation reaches into the
state and solicits its citizens.” Id. (quoting McGee v. Int‟l Life Ins. Co., 355 U.S. 220,
223 (1957)). Mental Health has not overcome its heavy burden of showing that the
court‟s exercise of personal jurisdiction fails to comport with traditional notions of
fair play and substantial justice.
Mental Health moves to transfer this action to the Southern District of
California pursuant to 28 U.S.C. § 1404(a). (Doc. 5 at 1). A district court may
transfer a case to any district “where it might have been brought” if transfer is “in
the interest of justice.” 28 U.S.C. § 1404(a). Mental Health argues that the Southern
District of California is an appropriate forum, (Doc. 6 at 17); Open Minds does not
address this contention. (Doc. 7 at 18-22). The court finds that California has
jurisdiction over Mental Health, given that Mental Health is a resident of California.
See CAL. CIV. PROC. CODE § 410.10 (2017); (Doc. 1 at 11 ¶ 2). Venue is proper in the
Southern District of California pursuant to 28. U.S.C. § 1391(b)(1), which states that
an action may be brought in a judicial district where the defendant resides. See 28
U.S.C. § 1391(b)(1); (Doc. 1 at 11 ¶ 2). The court will weigh private and public
interests to determine whether the interests of convenience and justice would be
better served by transfer under 28 U.S.C. § 1404(a). Jumara, 55 F.3d at 879 (citation
Private Interest Factors
The court first considers (1) the plaintiff‟s choice of forum; (2) the defendant‟s
forum preference; (3) where the claims arose; (4) the convenience of the parties as
indicated by their physical and financial condition; (5) the convenience of the
witnesses (to the extent of their unavailability for trial in one of the fora); and (6) the
location of documents and other evidence. Id. Mental Health advances arguments
regarding factors three, five, and six.
At the outset, it is axiomatic that a plaintiff‟s choice of venue “should not be
lightly disturbed.” Jumara, 55 F.3d at 879 (citations omitted); Shutte v. Armco Steel
Corp., 431 F.2d 22, 25 (3d Cir. 1970). The deference accorded a plaintiff‟s choice of
forum is somewhat diminished when the conduct complained of did not occur in
plaintiff‟s selected forum. Sinclair Cattle Co. v. Ward, 80 F. Supp. 3d 553, 564 (M.D.
Pa. 2015) (citing Lomanno v. Black, 285 F. Supp. 2d 637, 644 (E.D. Pa. 2003)).
Mental Health argues that the central events of the case sub judice occurred
in California, (Doc. 6 at 19), and in the process it mischaracterizes the parties‟
dispute. The instant case is not one concerning “excessive billings and possible
fraud” rendered upon Mental Health, (id.), but one concerning Mental Health‟s
alleged breach of contract. (Doc. 1 at 15-17 ¶¶ 23-35). To determine “where the
claims arose” in a breach of contract case, courts look to where the contract was
negotiated, executed, performed, and breached. Bolus v. Morrison Homes, Inc., No.
07-1978, 2008 WL 4452658, at *3 (M.D. Pa. Sept. 30, 2008) (citing Leone v. Cataldo,
No. 07-3636, 2008 WL 3495634, at *10 (E.D. Pa. Aug. 11, 2008)). Venue will ordinarily
lie in the district where the contract was to be performed, Waste Mgmt. of Pa., Inc.
v. Pollution Control Fin. Auth. of Camden Cty., No. 96-1683, 1997 WL 22575, at *1
(E.D. Pa. Jan. 21, 1997), or where the benefits of the contract were to be received.
Keating v. Whitmore Mfg. Co., 981 F. Supp. 890, 893 (E.D. Pa. 1997) (quoting Bostic
v. Ohio River Co. (Ohio Division) Basic Pension Plan, 517 F. Supp. 627, 636 (S.D. W.
Va. 1981) (internal citations omitted)).
Open Minds‟ claims arose in the Commonwealth. Mental Health solicited
Open Minds in the forum state. (Doc. 1 at 12 ¶ 4). Open Minds drafted at least one
of the disputed contracts in the Commonwealth, (id. at 19), and developed “a
substantial amount of the work product” in the Commonwealth. See Bolus, 2008
WL 4452658, at *3; (Doc. 1 at 12 ¶¶ 5, 7). Mental Health remitted payments to Open
Minds in the forum state, and the breach at issue occurred when Mental Health
allegedly discontinued payment. (Doc. 1 at 13-15 ¶¶ 11, 15, 18, 19, 21-22). But for the
alleged breach, the contract benefits set to accrue to Open Minds in the
Commonwealth would have come to fruition. See Keating, 981 F. Supp. at 893.
Open Minds‟ claims therefore arose in the Commonwealth.
Mental Health also asserts that the location of key witnesses supports
transfer to California. The court finds this argument unconvincing for two reasons.
First, Mental Health does not adequately specify its “key” witnesses, as is its
responsibility. See Sinclair, 80 F. Supp. 3d at 565 (citations omitted). Bond, David
Conn, and Michael Hawkey, current and former employees of Mental Health, are
the only witnesses clearly identified. (Doc. 6 at 19-20). A conclusory claim that
“witnesses would be forced to travel from California to Pennsylvania and would
therefore be required to incur undue hardships such as loss of work” is too vague
and too tenuous to satisfy Mental Health‟s burden. See Sinclair, 80 F. Supp. 3d at
565. Second, assuming arguendo that Mental Health‟s identified witnesses are
essential, Mental Health has not demonstrated that these witnesses would be
unavailable for trial. Jumara, 55 F.3d at 879; (Doc. 15 at 10-11). Defendant‟s
arguments concerning location and availability of witnesses do not weigh heavily in
favor of transfer.
Mental Health further submits that key documents concerning Open Mind‟s
work and fraud are located in California. (Doc. 6 at 20). Per contra, evidence
regarding Open Minds‟ breach of contract and unjust enrichment claims—
including, inter alia, the contracts themselves, invoices, and receipts—are all
located in the Commonwealth. (Doc. 7 at 21). Any relevant documents or evidence
located in California could easily be “photographically reproduced” here in the
Commonwealth. See Wise v. Williams, No. 10-CV-02094, 2011 WL 2446303, at *12
(M.D. Pa. May 18, 2011), report and recommendation adopted, No. 10-CV-2094, 2011
WL 2436524 (M.D. Pa. June 15, 2011) (citing Kovatch Corp. v. Rockwood Sys. Corp.,
666 F.Supp. 707, 709 (M.D. Pa. 1986)). The location of documents and other
evidence therefore does not support transfer.
Public Interest Factors
Having determined that Mental Health has failed to satisfy its burden of
proof in the private factors arena, the court shifts its attention to the public interest
factors. Those factors include: (1) the enforceability of the judgment; (2) practical
considerations regarding trial; (3) relative administrative difficulty in the two fora
due to court congestion; (4) the interest in deciding local controversies; (5) the
public policies of the two fora; and (6) the court‟s familiarity with the applicable
state law in diversity cases. Jumara, 55 F.3d at 879-80. Some of these public
interest factors may “play no role” in the § 1404(a) balancing analysis. Lomanno,
285 F. Supp. 2d at 647.
Mental Health argues that California, and San Diego in particular, has a
strong interest in seeing this case adjudicated in the Southern District of California.
(Doc. 6 at 20-21). This interest stems from the state of California‟s role in providing
funds to Mental Health, and Mental Health providing services to California
residents. (Id.) California‟s strong interest in this matter weighs in favor of
transfer. See Ritz-Craft Corp. of Pa., Inc. v. The Price Home Grp., LLC, No. 15-CV-
02405, 2016 WL 3742875, at *3 (M.D. Pa. July 13, 2016). But Mental Health‟s burden
is not met by the strength of this factor alone.
Mental Health‟s only other argument is that California law likely applies.
Pennsylvania choice of law rules state that “in cases involving contract disputes, the
state having the most interest in the controversy and which is most intimately
concerned with the outcome is the forum whose law should be applied.” Shannon
v. Keystone Info. Sys., Inc., 827 F. Supp. 341, 343 (E.D. Pa. 1993). In determining
which forum has the most significant contact, the court must consider: (1) the place
of negotiation, contracting, and performance of the contract; (2) the location of the
subject matter of the contract; and (3) the parties‟ citizenship. Id. As discussed
supra, the contracts originated from Open Minds in Pennsylvania, Open Minds
performed contractual obligations in Pennsylvania, and post-contractual
negotiations occurred in Pennsylvania. (Doc. 1 at 12, 14 ¶¶ 4, 5, 7, 20). Despite
California‟s interest in the well-being of a party that it funds, it is by no means
certain that California law would apply. The Commonwealth‟s interest in deciding
a controversy stemming from Pennsylvania contacts supports retaining the action
in this forum. See Sinclair, 80 F. Supp. 3d at 566. These considerations weigh
After balancing the relevant private and public interest factors and
considering the arguments posited by the parties, the court concludes that transfer
to the Southern District of California would promote neither “the convenience of
the parties and witnesses” nor “the interests of justice.” 18 U.S.C. § 1404(a). Mental
Health has failed to meet its burden of demonstrating that the factors favor transfer.
See Jumara, 55 F.3d at 879-80; Lony, 935 F.2d at 609. The suit will remain in the
Middle District of Pennsylvania.
For the above stated reasons, the court will deny Mental Health‟s motion
(Doc. 5) to dismiss for lack of personal jurisdiction, or, in the alternative, to transfer
the case to the Southern District of California. An appropriate order shall issue.
/S/ CHRISTOPHER C. CONNER
Christopher C. Conner, Chief Judge
United States District Court
Middle District of Pennsylvania
May 4, 2017
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