Alternative Global Two LLC et al v. Blackstream Development LLC
Filing
64
ORDER AND OPINION granting 49 Motion to Transfer Case, including all remaining pending motions, to the Southern District of Florida. Signed by Honorable Jacquelyn D Austin on 3/26/24.(jtho, ) Modified on 3/27/2024 to edit text (jtho, ).
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF SOUTH CAROLINA
GREENVILLE DIVISION
Alternative Global Two LLC, Alternative
Global Four LLC, and Alternative Global
Five LLC, Delaware limited liability
companies,
)
)
)
)
)
Plaintiffs,
)
)
v.
)
)
Blackstream Development LLC, a South )
Carolina limited liability company,
)
)
Defendant.
)
)
Case No.: 6:22-cv-4501-JDA
ORDER AND OPINION
This matter is before the Court on Defendant’s motion to transfer. [Doc. 49.] This
motion is ripe for review.
BACKGROUND
On December 13, 2022, Alternative Global Two LLC, Alternative Global Four LLC,
and Alternative Global Five LLC, all Delaware limited liability companies (collectively,
“Plaintiffs” or “Alternative Global Companies”) sued Blackstream Development LLC, a
South Carolina limited liability company (“Defendant” or “Blackstream”), primarily alleging
as follows:
The Alternative Global Companies are industry-specific
Delaware limited liability companies that invest in certain
targeted high growth industries. Between approximately May
2020 and January 26, 2022, the Alternative Global
Companies funded at least $17,561,300 to Blackstream in
exchange for an equity investment in underlying real estate
investments [in South Carolina.] In January 2022,
Blackstream shut off the flow of information to the Alternative
Global Companies, depriving the Alternative Global
Companies of all information on the status of the $17,561,300
in funds or the underlying real estate investments.
Notwithstanding repeated demands, Blackstream has failed
to provide critical information or otherwise account to the
Alternative Global Companies.
[Doc. 1 ¶¶ 1, 12.] Currently, Richard Cardinale (“Cardinale”) is the sole management
member and member of each of the Alternative Global Companies.
[Id. ¶¶ 2–4.]1
Plaintiffs allege claims against Defendant for breach of fiduciary duty and for accounting
of the $17,561,300. [Id. ¶¶ 24–37.]
On January 26, 2023, Defendant filed a motion to dismiss that was denied by the
Honorable Timothy M. Cain, United States District Judge, on November 16, 2023. [Docs.
10; 30.] On February 13, 2024, this case was reassigned to the undersigned. [Doc. 46.]
On February 26, 2024, Defendant filed the instant motion to transfer, as well as a
motion to quash and for protective order concerning a subpoena Plaintiffs issued to
nonparty Southern First Bancshares, Inc. d/b/a Southern First Bank (“Southern First”),
the bank Plaintiffs allegedly wired the relevant funds to at Defendant’s direction. [Docs.
48; 49; 1 ¶ 13.] Relatedly, also pending before the Court is Defendant’s motion to compel
Southern First’s subpoena response. [Doc. 50.]
Also relevant, the Court notes the ongoing litigation in the Southern District of
Florida in Feingold v. Cardinale, C/A No. 1:22-20375-RKA (the “Florida Action”). On
February 5, 2022, Feingold and Dazzo sued Cardinale, his wife, and their company
RVCNY, LLC, in the Southern District of Florida, alleging that they entered into an
On or about January 28, 2022, two of the former managers of the Alternative Global
Companies, David Feingold (“Feingold”) and Michael Dazzo (“Dazzo”), sent notice to
Cardinale that they were resigning as managers and withdrawing as members of the
Alternative Global Companies, leaving Cardinale as Plaintiffs’ sole manager and member.
[Doc. 1 ¶ 16.] Plaintiffs allege Defendant’s “flow of information” concerning the relevant
investments “abruptly ceased in or around January 2022, which is when [Feingold] and
[Dazzo] resigned as Managers of the Global Entities.” [Doc. 1-1 at 2.]
1
2
agreement with Cardinale where, in part, Cardinale would handle the administrative
services for Alternative Global Companies, as well as additional companies (collectively,
“Alternative Named Entities”) and where, beginning in July 2019,
Over the next two and a half years, Cardinale billed the
Alternative Named Entities more than $1.3 million dollars.
Feingold and Dazzo paid these amounts believing they were
paying for all administrative expenses and Cardinale’s
continued promise he had maintained all the records,
reporting, due diligence, and complete back-office services for
the Alternative Named Entities.
[Florida Action, Doc. 102 ¶¶ 12, 27.]
In the Florida Action, Feingold and Dazzo argue that Cardinale fraudulently billed
the Alternative Named Entities and failed to disclose millions of dollars in earnings he
made from these companies, suing “for failure to pay fair value for membership interests,
breach of fiduciary duty, conversion, fraudulent misrepresentations, conspiracy to commit
fraud, civil conspiracy, and aiding and abetting breach of fiduciary duty. [Id. ¶¶ 1, 31, 34.]
Both Feingold and Dazzo are Florida citizens. [Id. ¶¶ 2–3.]
In the Florida Action, Blackstream has filed an appearance and moved to quash a
subpoena issued to it. In opposition to that motion to quash, Cardinale has represented
as follows as to that action:
The narrowed requests of the Broadstreet Subpoena seek
relevant documents pertaining to [Feingold and Dazzo’s]
claim for the “fair value” of their interests in the six Alternative
Global Companies. Cardinale is the sole remaining Manager
of Alternative Global Two, LLC (“AG2”), Alternative Global
Four, LLC (“AG4”), and Alternative Global Five, LLC (“AG5”)
(the “AG Companies”), special purpose investment funds that
invested at least $17,561,300 in wire transfers to Blackstream
Development, LLC’s (“Blackstream”) bank account (“Project
Account”). Those investments, in turn, funded seven (7) real
estate projects owned by special purpose vehicles and two
restaurant investments in Culver’s fast-food restaurants
3
(“Blackstream SPVs”) and in which the AG Companies
received ownership interests . . . . [In Count I, Feingold and
Dazzo] assert that, upon their resignation, Cardinale failed to
pay [Feingold and Dazzo] the “fair value” of their interest in
AG6 in accordance with 6 Del. C. § 18-604. Cardinale,
Feingold, and Dazzo were the sole members and comanaging members . . . of the AG Companies. Between May
8, 2020 and January 26, 2022, AG2, AG4, and AG5 funded at
least $17,561,300 in wire transfers to Blackstream’s Project
Account. Those investments, in turn, funded the Blackstream
SPV’s and in which the AG Companies received ownership
interest according to Feingold.
[Florida Action, Doc. 157 at 2–5 (footnotes and citation omitted).]
As of an order issued December 18, 2023, in response to a motion filed by
Cardinale, the Florida Action is currently stayed and administratively closed pending
resolution of certain outstanding motions; the court directed that once the motions are
resolved, the case will be reopened and a hearing set for a new scheduling order, and,
“[i]n the meantime, all deadlines including the trial period are stayed, but the parties may
continue to engage in discovery.” [Florida Action, Docs. 185; 186.] 2
APPLICABLE LAW
A civil action may, except as otherwise provided by law, be brought only in
(1) a judicial district where any defendant resides, if all
defendants are residents of the State in which the district is
located;
Defendant notes other cases filed by Cardinale and/or Plaintiffs including: (1) the Florida
Action; (2) Alternative Global One, LLC, Alternative Global Two, LLC, Alternative Global
Three, LLC, Alternative Global Four, LLC, Alternative Global Five, LLC, Alternative Global
Six, LLC v. David Feingold and Michael Dazzo, C/A No. 2023-000688-CA-01 (11th
Judicial Circuit, Miami-Dade County Florida); (3) Alternative Global Six, LLC v. Durham
Homes LLC, Index No. 653837/2022 (Sup. Ct., NY Cty); (4) Alternative Global Three, LLC
vs. DCG Staten Island LLC, et al., C/A No. 2022-022016-CA-01 (11th Judicial Circuit,
Miami-Dade County Florida); (5) JAMS Arbitration styled L3 Capital Management, LLC v.
RIG Select Ventures, LLC; and (6) RCG Advances, LLC v. David Feingold and Feingold
Morgan Sanchez LLC, C/A No. 9:23-cv-81128-AMC (U.S.D.C. SD Florida). [See Doc. 49
at 4 n.2.]
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(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) if there 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).
Section 1404(a) of Title 28 of the United States Code provides: “For 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
or to any district or division to which all parties have consented.” 28 U.S.C. § 1404(a).
District courts have wide discretion to transfer an action under 1404(a) “to prevent the
waste of time, energy and money and to protect litigants, witnesses and the public against
unnecessary inconvenience and expense.” Van Dusen v. Barrack, 376 U.S. 612, 616
(1964) (internal quotation marks omitted). 28 U.S.C. Section 1404(a), however, cannot
be used by a defendant to defeat advantages accruing to a plaintiff who has chosen a
forum which, though inconvenient to defendant, is a proper forum. Van Dusen, 376 U.S.
at 633–34.
Section 1406(a) provides that “[t]he district court of a district in which is filed a case
laying venue in the wrong division or district shall dismiss, or if it be in the interest of
justice, transfer such case to any district or division in which it could have been brought.”
28 U.S.C. § 1406(a).
As stated by this Court:
Notwithstanding the fact there is no such as thing as a
specific, one-size-fits-all standard for the Court to employ
5
when adjudicating § 1404(a) motions, the Court is not bereft
of some guidance. For instance, the Court will weigh and
balance both Public and Private factors in its determination as
to whether it should transfer a case under this statute. Federal
Practice and Procedure § 3847. Public factors, which concern
the statutory consideration of the interest of justice, include
judicial economy, the district’s familiarity with the governing
law, the local interest in deciding local controversies at home,
and whether the docket in one court is more congested than
the other. Id. “Private factors include the statutory
considerations of convenience of the parties and witnesses,
but also often include the plaintiff’s forum preference, where
the claim arose, and the relative ease of access to sources of
proof.” Id. The Court notes, however, this list is by no means
an exclusive one.
Del Zotto v. Universal Physician Servs., LLC, 214 F. Supp. 3d 499, 502 (D.S.C. 2016).
DISCUSSION
As a preliminary matter, Plaintiffs do not dispute that this case could have been
brought in the Southern District of Florida. [Doc. 51 at 4 n.1.] Although it is a South
Carolina company, Defendant represents that it consents to jurisdiction and venue in the
Southern District of Florida and waives any argument to the contrary. [Docs. 49-10 ¶ 7;
49-11 ¶ 7.]
Additionally, although Plaintiffs are Delaware companies, their primary
corporate and registered offices are in the Southern District of Florida. [Doc. 49-6 at 2,
10, 18.] Third, as noted above, both Dazzo and Feingold are Florida residents. The Court
therefore turns to the relevant public and private factors to assess Defendant’s motion to
transfer.
The parties’ primary dispute concerns whether Plaintiffs’ choice of venue should
be given deference and whether the first-filed rule applies in the instant case.
explained by this Court:
“Ordinarily, when multiple suits are filed in different Federal
courts upon the same factual issues, the first or prior action is
6
As
permitted to proceed to the exclusion of another subsequently
filed.” Allied-General Nuclear Servs. v. Commonwealth
Edison Co., 675 F.2d 610, 611 n.1 (4th Cir. 1982) (citation
omitted); see also Ellicott Mach. Corp. v. Modern Welding Co.,
502 F.2d 178, 180 n.2 (4th Cir. 1974) (“[A]s a principal of
sound judicial administration, the first suit should have priority,
absent the showing of balance of convenience in favor of the
second action.”) (internal quotation marks and citation
omitted). “[C]ourts consider the following three factors in
determining whether the first-filed rule applies: ‘(1) the
chronology of the filings[,] (2) the similarity of the parties
involved, and (3) the similarity of the issues being raised.’”
PTA-FLA, Inc. v. ZTE Corp., C/A No. 3:12-cv-02616-CMC,
2015 WL 13593694, at *13 (D.S.C. July 27, 2015)
(unpublished) (quoting Remington Arms Co. v. Alliant
Techsystems, Inc., No. 1:03CV1051, 2004 WL 444574, at *2
(M.D.N.C. Feb. 25, 2004) (unpublished)). Pursuant to the firstto-file rule, the “district court has the discretion to dismiss,
stay, or transfer a later-filed lawsuit in deference to the first
filed action.” Ace Prop. & Cas. Ins. Co. v. Specialty Logging,
LLC, No. 1:14-cv-00944-JMC, 2015 WL 1422181, at *2
(D.S.C. Mar. 27, 2015) (unpublished) (internal citation and
quotation omitted).
Daileader v. Certain Underwriters at Lloyd’s London - Syndicate 1861, No. 7:22-cv-916HMH, 2022 WL 2276461, at *2 (D.S.C. June 23, 2022).
Plaintiffs argue the first-filed rule is inapplicable here “where the earlier case in
question is a closed one.” [Doc. 51 at 7; see id. at 15.] However, Plaintiffs’ case cited in
support, King v. S. Poverty L. Ctr., Inc., No. 2:22-CV-207-WKW, 2023 WL 3061825 (M.D.
Ala. Apr. 24, 2023), appears inapplicable to the instant case. In King, the court explained:
Plaintiffs make two alternative arguments . . . but those ties
easily unravel because they are based on erroneous
understandings of the law. First, Plaintiffs ask the court to
“transfer this matter to the original civil action” in King I, but
they cite no authority that would permit a transfer of a laterfiled action to an earlier-filed action that is closed. (Doc. # 18
at 17.) This argument, although creative, lacks citation to
authority and would amount to a work-around for plaintiffs,
who when faced with an adverse final judgment, did not avail
themselves of available legal remedies, including the right to
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appeal. Cf. Blanchard v. Walker, No. 2:20-CV-696-WKW,
2022 WL 4357449, at *1 (M.D. Ala. Sept. 20, 2022) (finding
that the plaintiff’s motion to consolidate his time-barred action
with his earlier-filed closed action amounted to an
impermissible attempt to circumvent the finality of the earlier
judgment).
Id. at *12. As noted above, the Florida Action has not been closed such that any final
judgment has been rendered. Plaintiffs are correct that this case is set to go to trial this
year, and because the Florida Action is administratively closed, there currently is no trial
date set in that case. [See Doc. 51 at 18.] However, the Florida Action is only temporarily
closed—at Plaintiffs’ request—while the Florida court addresses the parties’ substantive
arguments, arguments that likely overlap with the arguments the parties will present in
the instant case. See, e.g., Leagans v. LeMaitre Vascular, Inc., No. 2:21-CV-01866-DCN,
2021 WL 4753269, at *7 (D.S.C. Oct. 12, 2021) (“Even if the other factors weigh in [a
plaintiff’s] favor, other courts have determined that in the application of the first-to-file rule,
the interest of justice factor (i.e., promotion of judicial economy, avoidance of inconsistent
judgments) may be decisive in ruling on a transfer motion, even though the convenience
of the parties and witnesses point in a different direction.” (internal quotation marks
omitted)). 3
Plaintiffs next argue the two cases are too dissimilar to warrant transfer:
The Florida case is limited to an internal dispute between the
Alternative Global Companies’ current and former members.
The Florida case centers around a claim by Feingold and
Dazzo, individually, against Cardinale, individually,
concerning the value, if any, of their membership interest in
the Alternative Global Companies. This case is not an internal
Plaintiffs additionally argue that “relative court congestion weighs in favor of this Court,”
while also noting that “[t]he District of South Carolina and the Southern District of Florida
are two of the busiest jurisdictions in the nation.” [Doc. 51 at 18.] The Court does not
find this factor dispositive.
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company dispute. This case, by contrast, focuses on the
conduct of Blackstream and involves Blackstream absconding
with over $17 million in funds. The claims in this case are for
breach of fiduciary duty and accounting against Blackstream.
[Doc. 51 at 15–16 (footnotes omitted).] Plaintiffs further argue that neither they nor
Defendant are parties to the Florida Action and that the measure for the damages in the
Florida Action ended well over a year ago when Feingold and Dazzo resigned from
Plaintiffs, whereas, here, the measure of damages against Blackstream is continuing,
involving “the value of the benefit conferred upon [Blackstream], the amount of funds that
[Blackstream] took, the value of those funds and their proceeds, and the value of the
projects as currently existing, including the value of the interest that [Blackstream]
converted.” Id. at 16.
The Court is not persuaded. In July 2019, as alleged by Feingold and Dazzo in
the Florida Action, Cardinale approached them and, eventually, the three created the
following arrangement, as attested to by Cardinale:
9
[Doc. 49-3 ¶ 5.]
As also attested to by Cardinale, the following arrangement also was formed:
[Id. ¶ 11.]
In the Florida Action, Feingold and Dazzo seek recompense from Cardinale
regarding his handling of the Alternative Named Entities from July 2019 to early 2022,
including Plaintiffs’ transfer of at least $17,561,300 to Blackstream. In the instant action,
Cardinale, through Plaintiffs, seek recompense from Blackstream concerning the at least
$17,561,300 transferred to it from Plaintiffs, occurring between May 2020 and January
2022.
As Defendant argues, this case appears to be subsumed by the Florida Action.
[See Doc. 49 at 4.] 4 As this Court stated, “[t]o apply the First-Filed rule, the actions being
4
Defendant has submitted portions of a transcript from a hearing before this Court and
10
assessed need not be identical if there is substantial overlap with respect to the issues
and parties.” Daileader, 2022 WL 2276461, at *3 (internal quotation marks omitted); see
also Fitzgibbons ex rel. Dir. of S.C. Dep’t of Ins. v. Atkinson, No. 8:17-CV-02092-AMQJDA, 2018 WL 11433972, at *10 (D.S.C. May 18, 2018) (“Suits are considered parallel if
substantially the same parties litigate substantially the same issues in different forums.”
(internal quotation marks omitted)), Report and Recommendation adopted by 2018 WL
3933728 (D.S.C. Aug. 16, 2018).
Next, Plaintiffs argue that even if this Court were to find the cases are similar
enough for the first-filed rule to be applicable, “there is a widely recognized exception to
it: ‘when the balance of convenience favors the second action,’ which essentially mirrors
the authority of the court to transfer under 1404(a).” [Doc. 51 at 17 (quoting Daileader,
2022 WL 2276461, at *3).]
The Court finds the first-filed rule applicable, weighing in favor of the transfer of
this case to the Southern District of Florida. Plaintiffs have presented other factors that
weigh otherwise. For example, it is certainly relevant that South Carolina substantive law
may govern this case and any judgment rendered would be enforced in South Carolina.
See, e.g., Swinton v. Charleston Cnty., No. 8:15-CV-04148-PMD-JDA, 2016 WL
Judge Cain on motions to quash subpoenas issued to Blackstream in the Florida Action,
where Cardinale’s attorney in the Florida Action, also Plaintiffs’ attorney in this action,
stated:
[T]he essential issue in the situation in the [Florida Action] and
the essential problem, the thread running through all of these
motions is Feingold and Dazzo directed the money to go to
[Blackstream], and to Durham Homes, LLC.
[Doc. 49-8 at 5:20–23.]
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7477609, at *6 (D.S.C. Nov. 21, 2016) (“Thus, with respect to convenience of the parties,
because no party is present in South Carolina, it would be more convenient if the case is
transferred to the District of Arizona. Further, any judgment obtained against the Unit
Defendants would be enforced in Arizona.”), Report and Recommendation adopted by
2016 WL 7451219 (D.S.C. Dec. 28, 2016); Massachusetts Mut. Life Ins. v. Factory Mut.
Ins. Co., No. CIV.A. 3:05-CV-69, 2007 WL 3273452, at *4 (N.D.W. Va. Nov. 2, 2007)
(“There is an appropriateness . . . in having the trial of a diversity case in a forum that is
at home with the state law that must govern the case, rather than having a court in some
other forum untangle problems in conflict of laws, and in law foreign to itself.” (internal
quotation marks omitted)). However, these factors are not dispositive and, as discussed
below, the balance of convenience does not favor retaining this case in this district. 5
First, Plaintiffs argue that South Carolina provides the greatest ease of access to
the sources of proof, while also acknowledging the location of records and documents
are given less weight because of modern technology. [Doc. 51 at 7–9]; see, e.g., Red
Bone Alley Foods, LLC v. Nat’l Food & Beverage, Inc., No. 4:13-CV-3590-PMD, 2014 WL
1093052, at *10 (D.S.C. Mar. 14, 2014). Plaintiffs also note that the subject matter in
dispute is related to property physically located in South Carolina. [Doc. 51 at 8.] Finally,
Plaintiffs argue that Blackstream’s essential employees and most of the relevant
witnesses are in South Carolina. [Id. at 8–9.]
Indeed, case law Plaintiffs cite in support of the argument that this Court’s familiarity
with South Carolina law weighs against transfer does not wholly support their position,
where it appears the Southern District of Florida is “most familiar with the parties and their
histories.” Gregory v. FedEx Ground Package Sys., Inc., No. 2:10-CV-630, 2012 WL
2396873, at *15 (E.D. Va. May 9, 2012), Report and Recommendation adopted sub nom.
by Gregory v. Fedex Ground Packaging Sys. Inc., 2012 WL 2396861 (E.D. Va. June 25,
2012).
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The Court does not find dispositive the location of records and documents, where
Defendant is in South Carolina, but also where Plaintiffs are Delaware limited liability
companies with primary corporate and registered offices in the Southern District of Florida
and which, during the relevant period, had either one managing member, Cardinale—a
New York citizen and resident—or two additional managing members, Feingold and
Dazzo— Florida citizens and residents.
The Court also does not find dispositive that the subject matter of this dispute
relates to property in South Carolina. Plaintiffs disagree, repeatedly relying on case law
that emphasizes the importance of retaining or transferring venue to where the property
in dispute is located. [Id. at 13–14.] However, this case law is of limited applicability here,
where the subject of the dispute is not real property found in South Carolina, per se, but
whether Defendant breached its responsibility to Plaintiffs concerning the funds Plaintiffs
transferred to Defendant to be invested in roughly 14 South Carolina real estate projects.
[See id. at 1–2.] This case stands in contrast to those cited by Plaintiffs where the
property location was significant to the case in a way not found here:
The rental property’s location in South Carolina weighs
heavily in favor of retaining venue. Contrary to the assertions
of Defendants, the location of the rental property is not
“happenstance,” and this dispute would not be the same if the
rental property involved was “in Maine, Florida, Alaska or
Hawaii.” Myrtle Beach and North Myrtle Beach are located
only a few miles apart. Both are oceanfront towns centered
around tourism. The consequences or damages from the
Defendants’ alleged listing mistake are impossible to
determine without reference to the specific properties and
locations involved. Plaintiffs assert that they intend to prove
damages, at least in part, by offering a witness who is an
expert in the South Carolina real estate market. This action is
based around an alleged breach of contract. The subject
matter of any contract or agreement between the parties was
the rental of property located in South Carolina. The State of
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South Carolina has an interest in the resolution of this dispute.
Kraft Real Est. Invs., LLC v. HomeAway.com, Inc., No. 4:08-CV-3788-TLW, 2009 WL
10677930, at *3 (D.S.C. May 14, 2009); see also Marom v. Pierot, No. 5:17-CV-608-D,
2018 WL 8576927, at *1 (E.D.N.C. Nov. 7, 2018) (finding venue proper where “Plaintiff
asserts defamation claims against Defendants arising out of a town board meeting that
took place on April 18, 2017 in the Town of Greenburgh, New York.
The alleged
defamatory statements relate to Plaintiff’s construction of a house on a lot adjacent to
Defendants’ residence in the Town of Greenburgh. Plaintiff previously resided in New
York where the parties have engaged in voluminous litigation.”); Williams v. Clement, No.
CV 0:18-437-JMC-SVH, 2020 WL 619929, at *6 (D.S.C. Jan. 9, 2020) (transferring to
North Carolina where the plaintiff alleged her personal property, located in a home in
North Carolina, had been damaged and where the “case concern[ed] real and personal
property that is or was located in Buncombe County and is or was subject to multiple
North Carolina court orders”), Report and Recommendation adopted by 2020 WL 615542
(D.S.C. Feb. 7, 2020). 6
Regarding Plaintiffs’ argument concerning witnesses, Plaintiffs argue that
Blackstream’s essential employees Ford Elliot (“Elliot”), Josh Howard (“Howard”), Carlos
Salgado, and Maxine Turner all reside in South Carolina. [Doc. 51 at 10.] Plaintiffs note
they have identified 30 witnesses in their Fed. R. Civ. P. 26 disclosures, 19 of whom have
For similar reasons, the Court rejects Plaintiffs’ unexplained argument that “the jury in
this case would likely benefit from viewing a physical location to understand the expenses
involved in funding land infrastructure development and end product of such
development.” [Doc. 51 at 8, 14.] It is unclear how a viewing of any development would
assist the jury in determining Defendant’s fiduciary duty to Plaintiffs or assist the jury in
determining the allocation of the $17,561,300.
6
14
addresses in South Carolina. [Id.] 7
However, examination of these disclosures show Plaintiffs have identified 30
people and corporate entities “likely to have discoverable information,” not necessarily
potential witnesses. [Doc. 51-4 at 2–12.] Notwithstanding, assuming these are potential
witnesses and where “courts typically afford greater weight to convenience of non-party
witnesses than party witnesses,” Brown v. Sullivan, No. 6:14-CV-04376-GRA, 2015 WL
12815281, at *3 (D.S.C. Mar. 3, 2015) (internal quotation marks omitted), the Court notes
Plaintiffs have identified the following non-parties and their locations: two South Carolina
banks, 13 South Carolina limited liability companies with 11 of those sharing the same
address, a Texas limited liability company, three Delaware limited liability companies with
two of those sharing the same address, a corporation listed with both a Texas and Florida
address, a corporation with a South Carolina address, a North Carolina limited liability
company, three individuals with South Carolina addresses, and one individual with a
Wisconsin address. 8 [Doc. 51-4 at 2–12.]
Plaintiffs make multiple arguments concerning witnesses, including that South
Carolina is more convenient for the witnesses, that the cost of obtaining witness
attendance favors South Carolina, and the availability of compulsory process favors
Defendant identified three potential witnesses in their Fed. R. Civ. P. 26 disclosures, as
opposed to people likely to have discoverable information: Cardinale, Elliott, and Howard.
[Doc. 51-7 at 2.]
7
Plaintiffs note Ryan Feingold, Feingold’s son, “is an analyst with Broadstreet, Inc., the
company of which David Feingold serves as CEO and Michael Dazzo serves as Senior
Managing Director” and that, in contrast to what is identified in Plaintiffs’ disclosure, “Ryan
Feingold lives in Greenville, according to his biography.” [Doc. 51 at 10 (footnote
omitted).]
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15
South Carolina. [Doc. 51 at 8–13.] 9 However, these arguments are difficult to assess in
that Plaintiffs speak in general terms about the witnesses. Additionally, although party
witnesses, Plaintiffs do not dispute Defendant’s affidavit evidence from Elliot and Howard
stating the Southern District of Florida is a more convenient forum for them [Docs. 49-10
¶¶ 5–6; 49-11 ¶¶ 5–6], nor that the Southern District of Florida is a more convenient forum
for Feingold and Dazzo. 10
Based on the above, Plaintiffs’ argument that “the overwhelming amount of
identified witnesses are located in South Carolina” is not persuasive, particularly where
Plaintiffs have failed to offer any specifics beyond addresses for the non-party, non-South
Carolina potential witnesses. See, e.g., Michelin N. Am. Inc. v. Vehicular Testing Servs.
LLC, No. 6:15-CV-01261-TMC-JDA, 2016 WL 4770054, at *3 (D.S.C. Aug. 22, 2016)
(“‘Affidavits from the concerned parties and/or witnesses [are] important in determining
whether the moving party has met its burden of proof.’”) (quoting Figgie Int’l, Inc. v.
Destileria Serralles, Inc., 925 F. Supp. 411, 414 (D.S.C. 1996)), Report and
Plaintiffs’ argument regarding the availability of compulsory process favoring South
Carolina, and case cited in support, appears inapposite where, in the relevant case, the
defendants contended, and the plaintiff did not dispute, “that they would be prejudiced if
they were required to present all of their non-party witnesses’s testimony by deposition,”
Liam Motors, LLC v. M & A Auto Sales, No. CIV.A. 4:13-1810-MGL, 2013 WL 5888581,
at *4 (D.S.C. Oct. 31, 2013), an issue not argued in the present case. [See Doc. 51 at
13.] Additionally, Plaintiffs have failed to identify any specific witness that only one court
would be able to compel exclusively of the other.
9
Plaintiffs argue “Blackstream did not identify Feingold and Dazzo as its witnesses—
which it now belatedly attempts to do via its Motion” [Doc. 51 at 11 (footnote omitted)],
but do not dispute that Feingold and Dazzo are in Florida and are potential witnesses.
The Court accepts, for purposes of the resolution of Defendant’s motion to transfer,
Plaintiffs’ argument that Feingold and Dazzo are not true non-party witnesses because
they are closely related to the party. [Id. at 10 n.26.]
10
16
Recommendation adopted by 2016 WL 4761616 (D.S.C. Sept. 13, 2016); Virginia
Innovation Scis., Inc. v. Samsung Elecs. Co., 928 F. Supp. 2d 863, 870 (E.D. Va. 2013)
(“The party asserting witness inconvenience ‘has the burden to proffer, by affidavit or
otherwise, sufficient details respecting the witnesses and their potential testimony to
enable the court to assess the materiality of evidence and the degree of inconvenience.’”
(internal quotation marks omitted)). 11
CONCLUSION
Based on the above, Defendants’ motion to transfer [Doc. 49] is granted. This
case, including all remaining pending motions, is transferred to the Southern District of
Florida.
IT IS SO ORDERED.
s/Jacquelyn D. Austin
United States District Judge
Greenville, South Carolina
March 26, 2024
The Court rejects Plaintiffs’ argument that Defendant’s delay of 14 months before
moving to transfer this case weighs against transfer. [Doc. 51 at 17.] Discovery is not
set to close in this matter until October 18, 2024 [Doc. 37]. See e.g., Herring v. LaPolla
Indus., No. 2:12-CV-2705-RMG, 2013 WL 12148849, at *5 (D.S.C. Oct. 7, 2013) (holding
that judicial economy weighed against transferring partly because the “case ha[d] been
pending for over a year [and the movant] waited until less than a week before discovery
was set to expire . . . to move for a transfer”). The Court likewise rejects Plaintiffs’
argument that Defendant’s “procedural fencing weighs against transfer,” where Plaintiffs’
focus is on Defendant’s failure to identify alleged “indispensable persons” to this case and
other discovery disputes. [Doc. 51 at 19.] At this juncture, the Court has limited insight
into these issues, and these issues do not impact its analysis of Defendant’s motion to
transfer.
11
17
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