Archer and White Sales, Inc. v. Henry Schein, Inc. et al

Filing 167

MEMORANDUM OPINION AND ORDER - denying 82 Motion for Intra District Transfer. Signed by Judge Rodney Gilstrap on 7/26/2017. (ch, )

IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF TEXAS
MARSHALL DIVISION

ARCHER AND WHITE SALES, INC.,
Plaintiff,
v.
HENRY SCHEIN, INC. et al,
Defendant.

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Civil Action No. 2:12-cv-572-JRG

MEMORANDUM OPINION AND ORDER
Before the Court is the Motion for Intra-District Transfer of Venue (Dkt. No. 82) filed by
Defendant Henry Schein, Inc. (“Schein”), in which Schein moves under 28 U.S.C. § 1404(a) to
transfer the above referenced case to the Sherman Division of this District. Defendants Danaher
Corporation, Instrumentarium Dental Inc., Dental Equipment LLC, KaVo Dental Technologies,
LLC, and Dental Imaging Technologies Corporation (collectively, the “Manufacturer
Defendants”) subsequently filed a Notice (Dkt. No. 83) indicating their joinder in Defendant
Schein’s motion. Such Notice does not provide any additional arguments or evidence, but merely
adopts Schein’s motion by reference. The Court heard argument on this Motion on July 19, 2017.
Having considered the Parties’ arguments, briefing, and the relevant authorities, the Court is of the
opinion that Schein’s Motion should be DENIED.
I.

Background
Plaintiff Archer and White Sales, Inc. (“Archer”) filed this action against Schein and the

Manufacturer Defendants, alleging violations of § 1 of the Sherman Act and corresponding Texas

state law provisions based on an alleged group boycott by Schein and another distributor, which
the Manufacturer Defendants then allegedly joined. (Compl. ¶ 1–4.)
Plaintiff Archer has been in the business of distribution, sales, and service of dental
equipment and supplies to dental professionals since 1983. (Compl. ¶ 9.) Archer is located in
Plano, Texas, in the Sherman Division of the Eastern District of Texas. (Compl. ¶ 9.)
Defendant Schein is incorporated in Delaware and maintains its principal place of business
in New York. (Compl. ¶ 15.) Schein maintains multiple offices in Texas, including an office in
Southlake, Texas; a distribution center in Grapevine, Texas; a technology office in Arlington,
Texas; and other offices in San Antonio and Houston. (Decl. of Randall McLemore, Ex. A, Dkt.
No. 82-1 ¶ 6 (“McLemore Decl.”).)
As to the Manufacturer Defendants, Danaher is a Delaware corporation with its principal
place of business in Washington, D.C. (Compl. ¶ 10.) Instrumentarium, a wholly-owned subsidiary
of Danaher, is incorporated in Wisconsin and maintains its principal place of business in
Wisconsin. (Compl. ¶ 11.) Dental Equipment LLC is incorporated in North Carolina, and has its
principal place of business in that state. (Compl. ¶ 12.) Dental Equipment LLC is also a whollyowned subsidiary of Danaher, and it does business under the names Pelton & Crane, Marus, and
DCI Equipment. (Compl. ¶ 12.) Defendant KaVo, another wholly-owned subsidiary of Danaher,
is incorporated in North Carolina and maintains its principal place of business in Illinois. (Compl.
¶ 13.) Finally, Gendex is a Pennsylvania corporation with its principal place of business in
Pennsylvania. (Compl. ¶ 14.) Gendex is also wholly owned by Danaher. (Compl. ¶ 14.)

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II.

Legal Standard
Section 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). The first inquiry when analyzing a case’s
eligibility for § 1404(a) transfer is “whether the judicial district to which transfer is sought would
have been a district in which the claim could have been filed.” In re Volkswagen AG, 371 F.3d
201, 203 (5th Cir. 2004) (“Volkswagen I”).
Once that threshold is met, courts analyze both public and private factors relating to the
convenience of parties and witnesses as well as the interests of particular venues in hearing the
case. See Humble Oil & Ref. Co. v. Bell Marine Serv., Inc., 321 F.2d 53, 56 (5th Cir. 1963); In re
Nintendo Co., Ltd., 589 F.3d 1194, 1198 (Fed. Cir. 2009). The private factors are: (1) the relative
ease of access to sources of proof; (2) the availability of compulsory process to secure the
attendance of witnesses; (3) the cost of attendance for willing witnesses; and (4) all other practical
problems that make trial of a case easy, expeditious, and inexpensive. Volkswagen I, 371 F.3d at
203 (citing Piper Aircraft Co. v. Reyno, 454 U.S. 235, 241 n.6 (1981)). The public factors are (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 conflict of laws or in the application
of foreign law. Id. These factors are to be decided based on “the situation which existed when suit
was instituted.” Hoffman v. Blaski, 363 U.S. 335, 343 (1960). Though the private and public factors
apply to most transfer cases, “they are not necessarily exhaustive or exclusive,” and no single
factor is dispositive. In re Volkswagen of Am., Inc., 545 F.3d 304, 314–15 (5th Cir. 2008)
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(“Volkswagen II”). Although these factors are typically applied to analyze transfers between
districts, they apply equally to transfers between divisions within the same district. In re Radmax,
Ltd., 720 F.3d 285, 288 (5th Cir. 2013).
While a plaintiff’s choice of venue is not an express factor in this analysis, the appropriate
deference afforded to the plaintiff’s choice is reflected in a defendant’s elevated burden of proof.
Volkswagen II, 545 F.3d at 315. In order to support its claim for a transfer under § 1404(a), the
defendant must demonstrate that the transferee venue is “clearly more convenient” than the venue
chosen by the plaintiff. Id. Absent such a showing, however, the plaintiff’s choice is to be
respected. Id.
III.

Analysis
The Court will evaluate the relevant private and public factors, addressing the Parties’

specific arguments where applicable.
a. This Action Could Have Been Brought Initially in the Sherman Division
The Parties do not dispute that this case could have been filed in the Sherman Division of
this District.
b. Private Interest Factors
i. Relative Ease of Access to Sources of Proof
The first private interest factor regarding access to sources of proof looks to where
documentary evidence, such as documents and physical evidence, is stored.1 See Volkswagen II,
545 F.3d at 316 (discussing the location of documents and physical evidence relating to a vehicle

Although witnesses are “sources of proof” in a sense, the Court analyzes the various arguments made regarding
witnesses under the factors that focus on the availability of the compulsory process and the cost of attendance of
willing witnesses.
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accident). As Schein notes in its Motion, “[c]ourts analyze this factor in light of the distance that
documents, or other evidence, must be transported from their existing location to the trial venue.”
On Semiconductor Corp. v. Hynix Semiconductor, Inc., No. 6:09-cv-390, 2010 WL 3855520, at
*2 (E.D. Tex. Sept. 30, 2010).
Schein argues that sources of proof will be more readily accessible in the Sherman Division
than in the Marshall Division. (Dkt. No. 82 at 5.) First, Schein contends that since Archer is located
within the Sherman Division, its documents are “presumably” there as well. Id. However, Schein
has not presented any evidence to support such speculation, nor has Schein identified any particular
documents from Archer’s Plano office that would be relevant to this case.
As to its own documents, 2 Schein notes that “to the extent that Schein’s hard copy
customer files for North Texas, Oklahoma, and Arkansas could become relevant, those files are
stored in Southlake, Texas; Tulsa or Oklahoma City, Oklahoma; and Little Rock, Arkansas.” (Dkt.
No. 82 at 6.) Schein further notes that it has offices, distribution centers, and facilities within the
Dallas area. (Id.) Financial documents, however, are located at Schein’s corporate offices in
Wisconsin and New York. (Id.)
Although Schein notes the existence of customer files and various facilities in the Dallas
area, Schein has not explained how these files or facilities are relevant to this case. Moreover, as
Plaintiff notes, one of the offices identified by Schein as containing hard copy customer files (the
Little Rock office) is closer to Marshall than it is to Sherman. (Dkt. No. 87 at 8 n.44; Decl. of
James Archer, Jr., Ex. A, Dkt. No. 87-1 ¶ 11 (“Archer Decl.”).) Although Archer’s presence in
Plano may play a role in the convenience analysis in an appropriate case, the Court does not find

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There is no evidence in the record regarding where the Manufacturer Defendants’ documents may be located.

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that argument persuasive here, where Schein has failed to particularly identify any relevant
documents that exist at Archer’s location in Plano. Further, even if Archer’s documents contain
relevant information, Archer selected the current venue with full knowledge that such might cause
it to produce records it holds in its Plano office. Defendants should not be able to use any level of
inconvenience which Archer consciously took upon itself to defeat Archer’s choice as to venue.
As such, the Court finds this factor neutral.
ii. Availability of Compulsory Process
The second private interest factor pertains to a court’s ability to compel attendance of
witnesses. As Schein notes in its Motion, this factor particularly addresses non-party witnesses
whose attendance may need to be secured by a court order. (Dkt. No. 82 at 7.) No party has
identified any non-party witnesses for whom the compulsory process would be needed.
Schein makes the general argument that non-party witnesses such as former employees are
more likely to be located near Archer’s office in Plano or Schein’s office in Southlake, each of
which is within 100 miles of either courthouse in the Sherman Division. (Dkt. No. 82 at 7.) In
response, Plaintiff points to Federal Rule of Civil Procedure 45(c)(1)(B), which permits the court
to compel attendance “within the state where the person resides, is employed, or regularly transacts
business in person, if the person . . . is commanded to attend a trial and would not incur substantial
expense.” Fed. R. Civ. P. 45(c)(1)(B). Thus, Plaintiff argues that since Schein has not identified
any non-party witnesses that would incur substantial expense by attending a trial in Marshall, the
ability of each division to compel attendance at trial would be the same. (Dkt. No. 87 at 10.)
Further, Archer notes that to the extent that a non-party witness would be beyond the subpoena
power of both divisions, this factor would be neutral. (Id.)
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Given the speculative nature of the Parties arguments, and given that no party has linked a
real need to utilize compulsory process in this case to any specific person or persons, the Court
finds this factor to be neutral.
iii. Cost of Attendance for Willing Witnesses
The third private interest factor is the cost of attendance for willing witnesses. “When the
distance between an existing venue for trial of a matter and a proposed venue under § 1404(a) is
more than 100 miles, the factor of inconvenience to witnesses increases in direct relationship to
the additional distance to be traveled.” Volkswagen I, 371 F.3d at 204–05. However, as other courts
in this Circuit have noted, the convenience of party witnesses is given little weight. ADS Sec. L.P.
v. Advanced Detection Sec. Servs., Inc., No. A-09-CA-773-LY, 2010 WL 1170976, at *4 (W.D.
Tex. Mar. 23, 2010), report and recommendation adopted in A-09-CA-773-LY (Dkt. No. 20) (Apr.
14, 2010) (“[I]t is unclear whether Defendant is contending that the transfer would be more
convenient for non-party witnesses or merely for their own employee witnesses. If the Defendant
is referring to employee witnesses, then their convenience would be entitled to little weight.”). See
also Vassallo v. Goodman Networks, Inc., No. 5:14-cv-743-DAE, 2015 WL 502313, at *4 (W.D.
Tex. Feb. 5, 2015) (noting that the convenience of non-party witnesses is given more weight in the
transfer analysis than the convenience of party witnesses); Summit 6 LLC v. HTC Corp., No. 7:14cv-0014-O, 2014 WL 4449821, at *7 (N.D. Tex. Sept. 10, 2014) (same); RPost Holdings, Inc. v.
StrongMail Sys., Inc., No. 2:12-cv-515-JRG, 2013 WL 4495119, at *4 (E.D. Tex. Aug. 19, 2013)
(same).
Schein argues that the “likely witnesses” in this case live in or near the Sherman Division,
or that it would be easier for potential witnesses to travel to that Division. (Dkt. No. 82 at 6.) Schein
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first turns to Plaintiff’s witnesses, arguing that Archer’s current employees “presumably reside
within commuting distance” of Plano and that Archer’s former employees “are more likely to
reside within the Sherman Division than the Marshall Division.” (Dkt. No. 82 at 5–6, 8.) Plaintiff
responds, however, that even witnesses who reside in the Dallas-Fort Worth (“DFW”) area would
likely stay overnight in Sherman during trial given the traffic congestion in the DFW area, which
would put them in the same posture as would a trial in Marshall. (Archer Decl. ¶ 2.) Plaintiff further
emphasizes that the majority of witnesses will not be Archer’s employees, as the substantive
antitrust claim at issue pertains to conduct between the defendants. (Dkt. No. 87 at 7.)
As to other witnesses, Schein alludes to current and former employees who live in
Oklahoma and the DFW area, but names just two individuals who were included in Plaintiff’s
Complaint—Mark Lowery and Don Givens.3 (Dkt. No. 82 at 6, 8–10.)
Mark Lowery is a Schein employee who lives in California. (Id. at 6–7.) Schein contends
that the Sherman Division is more convenient for Mr. Lowery because of that Division’s proximity
to two particular airports (DFW and Dallas Love Field). (Id.) Don Givens is an employee of
Defendant Pelton and Crane who lives in Dallas. (McLemore Decl. ¶ 16.)
Schein contends that its failure to identify additional witnesses beyond those included in
Plaintiff’s Complaint is due to Schein’s denial of the substantive allegations in Plaintiff’s claim.
(Dkt. No. 92 at 4 (“How is Schein to identify specific witnesses with knowledge of a conspiracy

Schein submitted a declaration from Randall McLemore, a Schein employee who served as Schein’s Regional
Manager for North Texas from 2008 to 2015. (McLemore Decl. ¶ 2.) His declaration explains where Schein has offices
and where it maintains certain documents. Mr. McLemore works in Southlake, Texas, and resides in Mansfield, Texas.
(McLemore Decl. ¶ 4.) However, Schein has not indicated whether Mr. McLemore is expected to testify in this case.
Regardless, even if Mr. McLemore is a potential witness, the convenience of employee witnesses is given much less
weight than the convenience of non-party witnesses, and the addition of Mr. McLemore to the analysis would not
change the Court’s ruling.
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that never existed?”).) However, it is Schein’s burden to establish that the transferee venue is
clearly more convenient, and the alleged non-existence of witnesses only weakens Schein’s
argument that transfer is necessary for convenience in this case. The Court must look only at the
convenience of the specific witnesses named by Schein, rather than the conjectured inconvenience
of unnamed individuals.
Mr. Lowery will need to travel from California regardless of which Division hears this
case, and Schein has not explained why Mr. Lowery could not make use of a nearby airport, such
as the airport in Shreveport, Louisiana, which Plaintiff indicates is just 34 miles from the Marshall
courthouse. (Archer Decl. ¶ 11.) Any difference in convenience as to Mr. Lowery is de minimus
at best. As to Mr. Givens, who lives in Dallas, the Sherman Division would likely be more
convenient for him. However, given that both Mr. Lowery and Mr. Givens are employees of named
defendants in this case, the Court gives their convenience less weight in the transfer analysis.
Vassallo v. Goodman Networks, Inc., No. 5:14-cv-743-DAE, 2015 WL 502313, at *4 (W.D. Tex.
Feb. 5, 2015) (noting that the convenience of non-party witnesses is given more weight in the
transfer analysis than the convenience of party witnesses).
Plaintiff, on the other hand, has identified four non-party witnesses who are expected to
testify and who are located closer to Marshall than to Sherman. Plaintiff first names three dentists
with knowledge regarding “Archer and White’s business, its services, its pricing, the pricing of its
competitors, Archer and White’s inability to offer all the products its customers wanted, and the
effects of Archer and White’s inability to provide certain equipment lines.” (Archer Decl. ¶ 9.)
These three dentists are Charles Parker, DDS, who practices in Marshall, Texas; Dr. James
Shamberger, DDS, who practices in Texarkana, Texas; and Dr. Allan Ladd, DDS, who practices
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in Camden, Arkansas. (Archer Decl. ¶ 9.) Plaintiff further identifies as a witness John Callouet, an
independent contractor based in Baton Rouge, Louisiana. (Archer Decl. ¶ 10.) Mr. Callouet
services equipment sold and installed by Plaintiff and has knowledge regarding the effects of
Archer’s inability to supply customers with certain product lines. (Archer Decl. ¶ 10.) With respect
to these non-party witnesses, trial in the Marshall Division would be more convenient than trial in
the Sherman Division under the Fifth Circuit’s 100-mile rule.
Accordingly, the Court is persuaded that the presence of four non-party witnesses in or
near Marshall, Texas, outweighs the presence of one party employee witness in Dallas and one
party employee witness in California. This factor weighs against transfer.
iv. All Other Practical Problems
The final private interest factor considers “all other practical problems that make trial of a
case easy, expeditious and inexpensive.” In re Radmax, Ltd., 720 F.3d 285, 288 (5th Cir. 2013).
Schein argues that transferring this case to the Sherman Division would reduce legal expenses, as
all parties have at least some counsel located in Dallas, with additional counsel located in
Washington, D.C. and Houston. (Dkt. No. 82 at 10.) However, as Plaintiff points out, the Fifth
Circuit has expressly and adamantly rejected any consideration of where a party’s attorneys are
located. Volkswagen I, 371 F.3d at 206 (concluding that the court “reversibly erred in considering
a factor that is not part of the § 1404(a) analysis. Specifically, in its order the district court
considers that counsel for both parties are located in Dallas, Texas. The word ‘counsel’ does not
appear anywhere in § 1404(a), and the convenience of counsel is not a factor to be assessed in
determining whether to transfer a case under § 1404(a).”). This Court is bound by the Fifth

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Circuit’s explicit instruction that the location of counsel may not be considered. Thus, the Court
finds this factor neutral.
c. Public Factors
i. The Administrative Difficulties Flowing From Court Congestion
Schein argues that the factor regarding court congestion is neutral. (Dkt. No. 82 at 11.)
Plaintiff, however, compares the two judicial divisions based on the number of criminal cases in
2016: 186 cases in the Sherman Division as compared to just 8 cases in the Marshall Division.
(Dkt. No. 87 at 11–12.) Based on this significant difference, Plaintiff argues that due to
constitutional and statutory speedy trial requirements, the significant number of criminal cases will
necessarily take priority over civil cases in the Sherman Division, thus delaying the progress of
this civil case. (Dkt. No. 87 at 11–12.) Plaintiff also notes that the Judicial Conference has
identified a district court vacancy in the Sherman Division as a Judicial Emergency. (Id. at 12.)
Although Plaintiff’s statistics may theoretically have some merit, and thus may slightly
weigh against transfer, the Court recognizes that Plaintiff’s argument inherently involves some
speculation as to how such statistics may (or may not) realistically impact this particular case. As
such, the Court considers this factor to be neutral.
ii. Local Interest in Having Localized Interests Decided at Home
Schein argues that the local interest factor favors transfer because no party resides in
Marshall, Texas, while Plaintiff is headquartered in Plano, Texas. (Dkt. No. 82 at 11–12.)
Defendant Schein further notes that it has several locations in the DFW area. (Id.) Plaintiff first
responds with case law holding that the local interest factor is neutral in the antitrust context, as
such cases have national economic significance. (Dkt. No. 87 at 12 (citing United States v. H & R
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Block, Inc., 789 F. Supp. 2d 74, 83 (D.D.C. 2011)).) While Plaintiff’s argument may be persuasive
in other jurisdictions, this Court is wary of adopting such an argument in light of certain guidance
from the Fifth Circuit. See Volkswagen II, 545 F.3d at 318. Although Plaintiff’s argument is based
on the nationwide economic impact of an alleged antitrust conspiracy, the Court finds this
argument too similar to the argument previously rejected by the Circuit.
The Court is more persuaded by Plaintiff’s second argument—that some of Plaintiff’s
relationships impacted by Defendants’ alleged conduct are with dentists who maintain practices in
and near the Marshall Division. (Dkt. No. 87 at 13.) However, Plaintiff has not provided sufficient
detail about these relationships for the Court to give much credence to this argument. As such, the
Court is persuaded that this factor slightly favors transfer to the Sherman Division.
iii. Avoidance of Unnecessary Conflicts of Law
Defendant Schein states that this factor is neutral. (Dkt. No. 82 at 12.) Plaintiff concurs,
(Dkt. No. 87 at 13), and the Court agrees.
iv. The Familiarity of the Forum with the Governing Law
Defendant Schein also treats the final public interest factor as neutral (Dkt. No. 82 at 12.)
Although Plaintiff agrees that both Divisions are equally capable of analyzing the applicable law
in this case, Plaintiff argues that this factor favors denying transfer. (Dkt. No. 87 at 13.) Plaintiff’s
argument is based on the fact that before Schein filed its transfer motion, this Court had already
handled significant aspects of this case, including for example whether this dispute fell within the
scope of an arbitration agreement. (Id.) Although the Court has expended considerable efforts in
this case to date, and although such an argument could in some cases be relevant in considering

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the transfer analysis’s private interest factors, the Court is not inclined to hold such to be persuasive
in the context of the public interest factors. As such, the Court considers this factor to be neutral.
IV.

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Conclusion
Having considered the relevant factors, the Court is of the opinion that Schein has not

satisfied its “significant burden” to show that transfer to the Sherman Division is clearly more
convenient. Volkswagen II, 545 F.3d at 315 n.10. Likewise, the Manufacturer Defendants that
adopted Schein’s motion by reference have also not met their burden. Under Fifth Circuit law,
“when the transferee venue is not clearly more convenient than the venue chosen by the plaintiff,
the plaintiff’s choice should be respected.” Id. at 315. Accordingly, Schein’s Motion for IntraDistrict Transfer (Dkt. No. 82) is DENIED.
SIGNED this 19th day of December, 2011.
So ORDERED and SIGNED this 26th day of July, 2017.

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RODNEY GILSTRAP
UNITED STATES DISTRICT JUDGE

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