McCormick et al v. Payne et al

Filing 18

Memorandum Opinion and Order granting 8 Motion to Transfer Venue. The case is TRANSFERRED to the Sherman Division of the Eastern District of Texas. (Ordered by Judge Barbara M.G. Lynn on 11/23/2015) (axm)[Transferred from Texas Northern on 11/24/2015.]

UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF TEXAS
DALLAS DIVISION

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Plaintiffs,
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v.
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RICHARD C. PAYNE, BRETT C. BRAYTON, §
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and WARREN TRANSPORT, INC.
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Defendants.
MATTHEW R. MCCORMICK, DENVAN
BENTLEY, MARTIN R. STEWART,
SPENCER L. POLLARD, LEE R. SPIELMAN,
and GARRETT STEVENSON,

No. 3:15-cv-02729-M

MEMORANDUM OPINION AND ORDER
Before the Court is the Motion to Transfer, filed by Brett C. Brayton and Warren
Transport, Inc. [Docket Entry #8]. For the reasons stated below, the Motion is GRANTED. The
case is TRANSFERRED to the Sherman Division of the Eastern District of Texas. The Court
will not reach Plaintiffs’ Motion to Remand [Docket Entry #12].
I.

BACKGROUND

This case arises out of a motor vehicle accident that occurred in the city of McKinney,
Texas, which is located in Collin County, in the Sherman Division of the Eastern District of
Texas. Following the accident, Plaintiffs filed suit in County Court, No. 3, of Dallas County,
Texas. In their Petition, Plaintiffs claimed venue was proper in Dallas County because “all or a
substantial part of the events or omissions giving rise to th[e] lawsuit occurred in [that] county.”
However, they acknowledged that the accident occurred in McKinney and provided no reference
to any events or omissions giving rise to the lawsuit that occurred in Dallas County.
All of the Plaintiffs but Bentley are citizens of California. Plaintiff Bentley is a citizen of
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New York. Defendant Warren Transport, Inc. is a citizen of Nebraska and Iowa, because it is
incorporated in Nebraska and has its principal place of business in Iowa. Defendant Brayton is a
citizen of Iowa, and Defendant Payne is a citizen of Texas.
Before this case was filed, Defendant Payne filed suit against the other Defendants in
County Court at Law No. 2, in Collin County, Texas. The other Defendants removed that case to
the Eastern District of Texas. However, when this case was filed, the parties voluntarily
dismissed the case in the Eastern District. The Defendants then removed this case, maintaining
that Payne was improperly joined as a Defendant, but instead was in fact the first-filing Plaintiff.
After removal, Defendants filed a Motion to Transfer pursuant to 28 U.S.C. § 1406(a), or,
alternatively, pursuant to 28 U.S.C. § 1404(a). Plaintiffs have not responded to the Motion to
Transfer, and the Certificate of Conference reflects that Plaintiffs do not oppose transfer to the
Eastern District. However, Plaintiffs moved to remand the case, arguing that diversity
jurisdiction does not exist because Payne was properly joined as a Defendant.
II.

ANALYSIS

A. The Court May Address Improper Venue Before Reaching Subject Matter
Jurisdiction
Although a district court must determine whether it has subject matter jurisdiction before
proceeding to adjudicate the merits, courts may reach questions of venue prior to determining
subject matter jurisdiction. See Sinochem Int’l Co. v. Malaysia Int’l Shipping Corp., 549 U.S.
422, 425 (2007) (“[A] court need not resolve whether it has authority to adjudicate the cause
(subject matter jurisdiction) . . . if it determines that, in any event, a foreign tribunal is plainly the
more suitable arbiter of the merits of the case”); see also Envtl. Conservation Org. v. City of
Dallas, 529 F.3d 519, 525 (5th Cir. 2008).
As the Supreme Court has noted, “[j]urisdiction is vital only if the court proposes to issue
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a judgment on the merits.” Sinochem, 549 U.S. at 431–32 (quoting Intec USA, LLC v. Engle,
467 F.3d 1038, 1041 (7th Cir. 2006)). A decision to transfer a case is not a merits decision.
Hardwick v. Factor, 2011 WL 1831706, at *2 (S.D. Tex. May 9, 2011) (Rosenthal, J.). Thus,
where a case is filed in the wrong forum, courts are authorized to take “the less burdensome
course” and transfer the case, rather than address subject matter jurisdiction. Sinochem, 549 U.S.
at 435.
Other district courts in this circuit have transferred cases before a determination of
subject matter jurisdiction. See, e.g., In re BP S’holder Derivative Litig., 2011 WL 4345209, at
*2 (S.D. Tex. Sept. 15, 2011), aff’d sub nom. City of New Orleans Employees’ Ret. Sys. ex rel.
BP P.L.C. v. Hayward, 508 F. App’x 293 (5th Cir. 2013); Woodlands Dev., LLC v. Regions
Bank, 2013 WL 3233472, at *3 (E.D. La. June 24, 2013); Hardwick, 2011 WL 1831706, at *2;
Doubletree Partners, L.P. v. Land America American Title Co., 2008 WL 5119599, at *2 (N.D.
Tex. Dec. 3, 2008).
Here, where none of the events giving rise to the lawsuit occurred in this district, and
there was a previously filed case involving the same facts in the Eastern District of Texas, and
the subject matter jurisdiction inquiry involves a detailed improper joinder analysis, the Court
will analyze the proper venue, and if it is not this district, will transfer the case, including the
Motion to Remand.
B. Improper Venue
28 U.S.C. § 1391(b) states that “[a] civil action may be brought in—(1) a judicial district
in which any defendant resides, if all defendants are residents of the State in which the district is
located; (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

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(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.” § 1391(b). When venue is challenged, the court must determine whether
the case falls within one of the three categories set out in § 1391(b). If it does, venue is proper; if
it does not, venue is improper, and the case must be dismissed or transferred under § 1406(a).
Atl. Marine Const. Co. v. U.S. Dist. Court for W. Dist. of Texas, __ U.S. ___, 134 S. Ct. 568,
577 (2013).
Once a defendant has objected to venue, the burden shifts to the plaintiff to establish that
venue is proper, but the Court must accept as true all allegations in the complaint and resolve all
conflicts in favor of the plaintiff. Emelike v. L-3 Commc’ns Corp., 2013 WL 1890289, at *1
(N.D. Tex. May 7, 2013) (Lynn, J.) (citing Ginter ex rel. Ballard v. Belcher, Predergast &
Laporte, 536 F.3d 439, 449 (5th Cir. 2008)). Courts may consider evidence in the record beyond
those facts alleged in the complaint and its proper attachments. Id. Since Plaintiffs have
provided no evidence to support their conclusory allegation that the events giving rise to the
claims occurred in Dallas County, and the facts alleged in and evidence attached to the First
Amended Petition show that the accident giving rise to the claims occurred in McKinney, the
Court finds that the accident giving rise to the claims occurred in the Eastern District. First Am.
Pet. [Docket Entry #1-2] at 40, 82.
Because not all Defendants are citizens of Texas, venue is not proper in this district under
§ 1391(b)(1). Additionally, because none of the events or omissions giving rise to the claim
occurred in this district, venue here is not proper under § 1391(b)(2). Venue in this district also
is not proper under § 1391(b)(3), since a substantial part of the events or omissions giving rise to
the claim occurred in the Eastern District of Texas, not the Northern District of Texas.

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§ 1391(b)(2); see Beasley v. Krafcisin, 2014 WL 4651996, at *3 (N.D. Tex. Sept. 17, 2014)
(Lynn, J.), aff’d, 609 F. App’x 215 (5th Cir. 2015).
If venue is improper, “a district court has broad discretion in determining whether to
dismiss or transfer a case in the interest of justice.” Caldwell v. Palmetto State Savs. Bank, 811
F.2d 916, 919 (5th Cir. 1987). Plaintiffs have not objected to transfer, and, in the interests of
justice, the Court will transfer the case.
III.

CONCLUSION

The Motion to Transfer Venue is GRANTED. The case is TRANSFERRED to the
Sherman Division of the Eastern District of Texas.
SO ORDERED.
November 23, 2015.

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BARBARA M. G. LYNN
UNITED STATES DISTRICT JUDGE
NORTHERN DISTRICT OF TEXAS

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