Ashley Furniture Industries, Inc. v. Packaging Corporation of America et al
Filing
140
OPINION AND ORDER denying 63 Motion to Sever and Transfer to District of Delaware; denying 78 Motion to Transfer to Northern District of Illinois. Signed by District Judge William M. Conley on 7/27/2017. (kwf)
IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF WISCONSIN
ASHLEY FURNITURE INDUSTRIES, INC.,
Plaintiff,
OPINION AND ORDER
v.
16-cv-469-wmc
PACKAGING
AMERICA, et al.,
CORPORATION
OF
Defendants.
Plaintiff
Ashley
Furniture
Industries,
Inc.
alleges
that
defendants,
vertically-integrated manufacturers of containerboard products, conspired to restrict
output and raise prices in violation of Section 1 of the Sherman Act, 15 U.S.C. § 1. All
but a single defendant move to transfer this case to the District Court for the Northern
District of Illinois pursuant to 28 U.S.C. § 1404(a), asserting that this lawsuit is
substantially related to a class action pending in that forum, from which the plaintiff here
opted-out. (Dkt. #78.) The other defendant, Georgia-Pacific LLC (“Georgia-Pacific”),
moves to sever and then transfer plaintiff’s claims against it to the District of Delaware,
pointing to a forum selection clause contained in its terms and conditions for sale. (Dkt.
#63.) In response, plaintiff Ashley Furniture emphasizes its right to file and have the
case decided in its home forum, along with its addition of specific claims under
Wisconsin law and expansion of the alleged conspiracy period, arguing that each compel
the denial of both motions.
defendants’ motions.
For other reasons explained below, the court will deny
BACKGROUND1
Plaintiff Ashley Furniture Industries, Inc. (“Ashley”) is a Wisconsin corporation
with its principal place of business in Arcadia, Wisconsin. During the period relevant to
this
lawsuit,
plaintiff
containerboard2
directly
purchased
from
containerboard
defendants,
all
of
and
products
which
made
manufacture
out
and
of
sell
containerboard and containerboard products.3 Plaintiff asserts that venue is proper in
this district because a substantial part of the events giving rise to its antitrust claims
occurred in this district by virtue of defendants’ sales of containerboard to plaintiff.
More generally, plaintiff claims that defendants began conspiring in or around
2004 to restrict production of and to raise prices for containerboard products. Plaintiff
alleges
that
defendants
were
able
to
carry
out
this
conspiracy
and
charge
supra-competitive prices through coordination facilitated by frequent gatherings
sponsored by industry trade organizations.
Plaintiff further asserts that the
containerboard industry is vulnerable to collusive behavior, due to factors including the
The following background facts are derived from plaintiff’s second amended complaint (dkt.
#95), undisputed representations in the parties’ submissions regarding the motions to transfer
and proceedings to date in the Northern District of Illinois.
1
Containerboard is a material composed of linerboard (a “flat wood-fiber paperboard”) and a
corrugated medium made out of the same material as linerboard that is fluted and laminated,
which are combined to make sheets that can be formed into products such as boxes and other
containers. (Second Am. Compl. (dkt. #95) ¶ 29.)
2
Defendant Georgia-Pacific LLC asserts that it “is a holding company separate from the GP
operating businesses that actually produce or sell linerboard, medium, containerboard, or
containerboard products,” and offers that “it is prepared to make appropriate arrangements with
Plaintiff’s counsel for the substitution of the proper GP operating entities as defendants,” but the
parties treat Georgia-Pacific LLC as a proper defendant for purposes of the instant motions, and
so will the court. (Def.’s Opening Br. (dkt. #73) at 1 n.1.)
3
2
commoditized nature of containerboard, inelastic demand for containerboard and the
small number of containerboard manufacturers.
Defendants identify significant similarities between plaintiff’s allegations in this
case and the § 1 class action that is being actively litigated before Judge Leinenweber in
the Northern District of Illinois, Kleen Products LLC, et al. v. International Paper, et al., Case
No. 1:10-cv-05711.4 Kleen Products began as five putative class actions that were filed in
2010, and then consolidated upon the plaintiffs’ motions into a single case originally
assigned to Judge Shadur and then reassigned to Judge Leinenweber in 2012. (Defs.’
Opening Br. (dkt. #79) at 3.)
Defendants represent that there have been more than 60 status hearings in Kleen
Products and that discovery has been “extensive,” including “dozens of written discovery
requests, millions of pages of produced documents (or their electronic equivalents), and
more than one hundred depositions, including at least ten third-party depositions.” (Id.
at 3-4.) Defendants also indicate that the parties’ discovery disputes in Kleen Products
generated seventeen motions to compel, requiring the Magistrate Judge to “overs[ee] two
days of evidentiary hearings,” as well as “conduct[] eleven status hearings and Rule 16
conferences with all parties, and facilitate[] three additional Rule 16 conferences between
the plaintiffs and specific defendants.” (Id. at 4.) In addition, defendants point out that
Judge Leinenweber granted the Kleen Products plaintiffs’ motion for class certification,
which “spawned seven separate briefs that total more than 300 pages,” in a 66-page
Although defendant Georgia-Pacific does not join in the motion to transfer, the court refers to
“defendants” for ease of reference, differentiating as to Georgia-Pacific only with respect to its
separate motion to sever and transfer to the District of Delaware based on a forum selection
clause.
4
3
opinion on March 26, 2015.5 Kleen Prods. LLC v. Int’l Paper, 306 F.R.D. 585, 588 (N.D.
Ill. 2015).
The Seventh Circuit affirmed Judge Leinenweber’s decision on August 4,
2016. Kleen Prods. LLC v. Int’l Paper Co., 831 F.3d 919 (7th Cir. 2016).
With respect to the similarities between this case and Kleen Products, defendants
emphasize in their opening brief that: (1) much of plaintiff’s complaint is identical to the
Kleen Products pleadings, including excerpted examples of matching language; (2) plaintiff
essentially alleges the same conspiracy period, 2004 to 2010; and (3) both cases name
the same defendants, with the exception of changes reflecting “certain Defendants’
corporate organization that post-date the class action complaint.” (Defs.’ Opening Br.
(dkt. #79) 4-8.) Defendants acknowledge in their opening brief that plaintiff Ashley
Furniture also asserts claims under Wis. Stat. § 133.14, but argue that the state law
claims are largely immaterial to the transfer analysis, because “the legal standard is the
same under either statute,” while acknowledging that “the Wisconsin statute may in
some circumstances permit certain forms of relief not available under the Sherman Act.”
(Id. at 8.)
Plaintiff filed a second amended complaint before the deadline established in the
court’s pretrial conference order to file amended pleadings without leave, and then filed a
brief in opposition to defendants’ transfer motion.
The second amended complaint
Plaintiff would argue that defendants’ citations of the number of discovery disputes and
hearings is somewhat misleading, since Judge Shadur “oversaw the first two years of that case,”
(Pl.’s Opp’n Br. (dkt. #96) at 10), but defendants highlight that Judge Leinenweber has “handled
all motions” since Magistrate Judge Nolan retired in late 2012. (Defs.’ Opening Br. (dkt. #79) at
12 n.7.) They further underscore that since late 2012, Judge Leinenweber “has presided over
multiple motions to compel, numerous status hearings, a motion to amend the pleadings,
settlement of certain defendants, and class certification.” (Defs.’ Reply Br. (dkt. #102) at 7 n.3.)
5
4
added several paragraphs of “post-2010” allegations suggesting that defendants’
conspiracy lasted into 2013. While Ashley Furniture concedes in its opposition brief that
“the plaintiffs in Kleen Products . . . assert a substantially similar federal antitrust claim
against essentially the same defendants,” plaintiff argues this case is different from Kleen
Products “in two significant ways.” (Pl.’s Opp’n Br. (dkt. #96) at 3.)
First, plaintiff
alleges claims under Wisconsin law, and second, plaintiff alleges a longer conspiracy
period.
For its part, defendant Georgia-Pacific moves to sever plaintiff’s claims against it
under Federal Rule of Procedure 21, and then moves to transfer the severed action to the
District Court for the District of Delaware to vindicate the forum selection clause
included in its terms and conditions attached to the sale of its containerboard products.
Specifically, that clause states that “the courts of Delaware shall have exclusive
jurisdiction.”
(Decl. of Mary K. McLemore Ex. C (dkt. #75-3).)
Plaintiff does not
contest the validity of the forum selection clause, but rather argues that Georgia-Pacific’s
insistence that the forum selection provision significantly outweighs other factors
typically considered regarding transfer is overblown, especially considering that plaintiff
alleges a conspiracy involving Georgia-Pacific and the other defendants.
The other
defendants oppose Georgia-Pacific’s motion on grounds similar to those raised in support
of their transfer motion, namely that transfer of the entire action to the Northern
District of Illinois would best serve judicial economy.
5
OPINION
I. Georgia-Pacific’s Motion
Because the parties agree that § 1404(a) requires transfer of an action as a whole,
see Paduano v. Express Scripts, Inc., 55 F. Supp. 3d 400, 431 (E.D.N.Y. 2014), the court
will first decide whether severance and transfer of plaintiff’s claims against defendant
Georgia-Pacific is warranted before addressing the remaining defendants’ motion.
Federal Rule of Civil Procedure 21 extends broad discretion to district courts to “sever
any claim against a party.” See Rice v. Sunrise Exp., Inc., 209 F.3d 1008, 1016 (7th Cir.
2000). When a party’s motion to sever and transfer is principally based on a forum
selection clause, as is Georgia Pacific’s, courts have merged the relevant analyses under
Rule 21 and 28 U.S.C. § 1404(a). See Paduano, 55 F. Supp. 3d at 431-32 (“In exercising
that discretion [whether to grant a Rule 21 severance motion], courts typically consider
the same general factors elucidating the § 1404(a) analysis. In other words, if the Court
were to conclude that the pertinent factors render transfer appropriate under § 1404(a),
then severance, too, would be proper.”) (brackets omitted) (internal quotation marks and
citations omitted) (quoting Valspar Corp. v. E.I. DuPont de Nemours & Co., 15 F. Supp. 3d
928 (D. Minn. 2014)); see also Monje v. Spin Master Inc., No. CV-09-1713-PHX-GMS,
2013 WL 6498073, at *4 (D. Ariz. Dec. 11, 2013) (“Severance is a necessary precursor
to . . . transfer, and it is justified by the same reasoning[.]”); Atlantic Marine Contsr. Co. v.
U.S. Dist. Ct. for the W. Dist. of Tex., 571 U.S. ___, 134 S. Ct. 568, 579 (2013) (holding
that motions to transfer to another federal court pursuant to a forum selection provision
are governed by § 1404(a)).
6
“For the convenience of the parties and witnesses [and] in the interest of justice,”
§ 1404(a) provides that “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.”
Courts deciding a § 1404(a) transfer motion, therefore,
typically “must evaluate both the convenience of the parties and various public-interest
considerations,” ultimately deciding “whether, on balance, a transfer would serve the
convenience of the parties and witnesses and otherwise promote the interest of justice.”
Atlantic Marine, 134 S. Ct. at 581 (internal quotation marks and citation omitted).
When the transfer motion is based on a valid forum selection clause between the parties,
this traditional § 1404(a) analysis is altered in three ways: (1) the plaintiff’s choice of
forum deserves no weight; (2) the parties’ private interests are immaterial; and (3) the
court should not weigh the transferee court’s familiarity with the law dictated by the
transferor court’s choice of law rules, since those rules would not follow along with a
transfer. Id. at 581-82. Consequently, the Supreme Court explained in Atlantic Marine
that “[w]hen the parties have agreed to a valid forum-selection clause, a district court
should ordinarily transfer the case to the forum specified in that clause. Only under
extraordinary circumstances unrelated to the convenience of the parties should a §
1404(a) motion be denied.” Id. at 581.
The forum selection provision in the terms and conditions attached to sales of
Georgia-Pacific’s corrugated products states as follows:
These Terms and Conditions of Sale shall be governed by the
laws of the State of Delaware, USA, and the courts of
Delaware shall have exclusive jurisdiction without reference
7
to the choice of law, conflicts of law, or principles of any
other state or county which might otherwise be applied.
(Def.’s Opening Br. (dkt. #73) at 3 (quoting Decl. of Mary K. McLemore Ex. C (dkt.
#75-3).) Plaintiff does not contest the validity of this forum selection provision, but
rather argues that the force of the Supreme Court’s “extraordinary circumstances”
requirement is satisfied here, because unlike Atlantic Marine, this case involves allegations
of a multi-defendant conspiracy. In support, plaintiff cites several other cases in which
district courts denied a single defendant’s motion to sever and transfer where multiple
other defendants were facing the same claims.
Raising the same concerns, the other defendants filed their own brief in opposition
to Georgia-Pacific’s motion,6 echoing plaintiff’s argument that “Atlantic Marine says
nothing about forum-selection clauses in a case like this one, where multiple defendants
who did not ‘agree’ to the clause oppose transfer to the specified forum.” (Defs.’ Opp’n
Br. (dkt. #89) at 2 (emphasis in original).) Instead, defendants argue this court should
apply the same factors that other courts have found important in deciding Rule 21
motions: “(1) whether the claims arise out of the same transaction or occurrence; (2)
whether the claims present some common questions of law or fact; (3) whether
settlement of the claims or judicial economy would be facilitated; (4) whether prejudice
would be avoided if severance were granted; and (5) whether different witnesses and
Georgia-Pacific’s argument that the other defendants lack standing to “challenge the
enforceability of [its] forum selection clause with Ashley” (Def.’s Reply Br. (dkt. #103) at 7) is
fruitless, since they do not challenge the clause’s enforceability, but rather whether it should control
over the other factors that they and plaintiff raise. In addition, the various authorities
Georgia-Pacific cites in support of its argument are inapposite, since defendants are not
purporting to raise improper venue arguments on behalf of Georgia-Pacific.
6
8
documentary proof are required for the separate claims.” In re High Fructose Corn Syrup
Antitrust Litig., 293 F. Supp. 2d 854, 862 (C.D. Ill. 2003). This court agrees, finding that
all of these factors militate against severance, most of them strongly so.
Georgia-Pacific’s reply underscores that the parties’ central dispute centers around
whether the Supreme Court’s decision in Atlantic Marine dictates transfer. While Atlantic
Marine “did a lot to clear up the law of forum selection,” commenters have noted that the
Supreme Court left important questions unanswered, including “[i]f the [forum
selection] clause applies to only some parties or claims but not others, how should the
court review a transfer motion?”
Linda S. Mullenix, Gaming the System: Protecting
Consumers from Unconscionable Contractual Forum-Selection and Arbitration Clauses, 66
Hastings L.J. 719, 721 (2014); see also Stephen E. Sachs, Five Questions after Atlantic
Marine, 66 Hastings L.J. 761 (2014). Nor has the Seventh Circuit yet answered that
question.
Even so, this court is not without persuasive guidance. The Fifth Circuit explained
that “Atlantic Marine was premised on the fact that the parties had agreed in advance
where their private litigation interests lie, and the reviewing court had no cause to disturb
those expectations,” but the transfer analysis is “more complicated” when “not all parties
to the lawsuit have entered into a forum selection agreement.” In re Rolls Royce Corp., 775
F.3d 671, 679 (5th Cir. 2014). In the latter context, the Fifth Circuit concluded that
“[a] litigant not party to such a contract did not, of course, make any such advance
agreements and their private interests must still be considered by the district court.” Id.
(emphasis in original).
This highlighted for the Fifth Circuit the tension between
9
“Atlantic Marine not[ing] that public factors, standing alone, were unlikely to defeat a
transfer motion” and “that section 1404 was designed to minimize the waste of judicial
resources of parallel litigation of a dispute.” Id. (citing Cont’l Grain Co. v. The FBL-585,
364 U.S. 19, 26 (1960); U.S.O. v. Mizuho Holding Co., 547 F.3d 749, 750 (7th Cir.
2008)); see also id. at 680 (acknowledging the Fifth Circuit’s own “jurisprudence
suggest[ing] that the severance inquiry is different -- and more focused on judicial
efficiency -- when it is combined with a section 1404 motion to transfer than when the
severed case would remain in the original judicial district”).
Accordingly, the Fifth Circuit adopted the following test:
We are persuaded that the severance-and-transfer inquiry in
situations where some but not all parties have entered into a
forum selection clause ought go as follows: First, pursuant to
Atlantic Marine, the private factors of the parties who have
signed a forum agreement must, as matter of law, cut in favor
of severance and transfer to the contracted for forum.
Second, the district court must consider the private factors of
the parties who have not signed a forum selection agreement
as it would under a Rule 21 severance and section 1404
transfer analysis.
Finally, it must ask whether this
preliminary weighing is outweighed by the judicial economy
considerations of having all claims determined in a single
lawsuit. In so determining, the district court should consider
whether there are procedural mechanisms that can reduce the
costs of severance, such as common pre-trial procedures,
video depositions, stipulations, etc. Such practices could
echo those used by judges in cases managed pursuant to
multidistrict litigation statutes.
Rolls Royce, 775 F.3d at 681 (footnotes omitted); but see id. at 685 (Jones, J., concurring)
(disagreeing with the majority’s test, including consideration of private factors, because
“[i]t seems highly unlikely that the Supreme Court granted certiorari and awarded the
10
extraordinary relief of mandamus simply to proclaim that a forum selection clause must
prevail only when one party sues one other party”).
Certainly, the Fifth Circuit’s analysis in Rolls Royce carries some weight, just as
does the Supreme Court’s pronouncement in Atlantic Marine that “a district court
[deciding a motion transfer based on a valid forum selection clause] may consider
arguments about public-interest factors only,” which immediately followed the Court’s
explanation that “[w]hen parties agree to a forum-selection clause, they waive the right to
challenge the preselected forum as inconvenient or less convenient for themselves or their
witnesses, or for their pursuit of the litigation.” 134 S. Ct. at 582. Moreover, Atlantic
Marine’s adjustment of the traditional § 1404(a) analysis was predicated on the notion
that “[t]he ‘enforcement of valid forum-selection clauses, bargained for by the parties,
protects their legitimate expectations and furthers vital interests of the justice system.’”
Id. at 581 (quoting Stewart Org., Inc. v. Ricoh Corp., 487 U.S. 22, 33 (1988) (Kennedy, J.,
concurring)). This explains why both the Supreme Court and the Fifth Circuit, even
more explicitly, recognized that the interests of the contracting parties may be
outweighed by the private interests of any defendants who did not similarly waive a
challenge to an inconvenient forum.
Fortunately, Georgia-Pacific’s motion here does not turn on the relative public
weight assigned these competing private interests. Rather, the court is persuaded that
public interest factors favoring all members of an alleged conspiracy to restrain trade be
judged in one lawsuit weigh strongly against severance and, consequently, against the
transfer of plaintiff’s claims against Georgia-Pacific. Like the Fifth Circuit, the court does
11
“not read Atlantic Marine to mandate severance and transfer of a party bearing a forum
selection clause in all multiparty cases, regardless of countervailing considerations of
judicial economy.” Rolls Royce, 775 F.3d at 677; see id. at 679 (“[T]he need -- rooted in
the valued public interest in judicial economy -- to pursue the same claims in a single
court can trump a forum-selection clause.”); see also In re TFT-LCD (Flat Panel) Antitrust
Litig., MDL No. 1827, 2014 WL 1477748, at *2 (N.D. Cal. Apr. 14, 2014) (denying
motion to transfer based on a forum selection clause that would “require [plaintiff’s]
claims against [one defendant] be tried separately from its substantially similar claims
against the other defendants”); Aquila v. Fleetwood, R.V., Inc., No. 12-CV-3281
(LDW)(GRB), 2014 WL 1379648, at *4-5 (E.D.N.Y Mar. 27, 2014) (denying motion to
transfer based on a forum selection clause by a single defendant in “a case involving
overlapping claims against multiple defendants” because of “the public interests in
avoiding duplicative proceedings and potentially inconsistent results”).
Generally, public interest factors “include ‘the administrative difficulties flowing
from court congestion; the local interest in having localized controversies decided at
home; and the interest in having the trial of a diversity case in a forum that is at home
with the law.’” Atlantic Marine at 581 n.6 (brackets omitted) (quoting Piper Aircraft Co. v.
Reyno, 454 U.S. 235, 241 n.6 (1981)). The parties do not argue that these classic public
interest factors weigh significantly in either direction, nor does it appear to the court that
they do.
However, in view of Atlantic Marine’s recognition that “the overarching
consideration under § 1404(a) is whether a transfer would promote ‘the interest of
justice,’” id. at 581, it is also appropriate for the court to consider, “outside of the
12
traditional public interest factors, . . . [the] interest in efficiency and avoiding the
possibility of multiplicity of litigation.” Cont’l Cas. Co. v. Staffing Concepts, Inc., No. 06 C
5473, 2009 WL 3055374, at *7 (N.D. Ill. Sep. 18, 2009).
Each of these factors favor denying Georgia-Pacific’s motion, since otherwise it
would mean litigating plaintiff’s claims against it separately, while plaintiff would be
simultaneously litigating in a different forum nearly identical claims against all of the
other defendants, who are alleged to be co-conspirators to fix the price of containerboard
products with Georgia-Pacific. Given the commonality (if not nearly identical nature) of
the facts and the law applicable to plaintiff’s claims against Georgia-Pacific and the other
alleged co-conspirators, the judicial inefficiencies for which Georgia-Pacific’s motion calls
is not justified here by any countervailing public interest in enforcing the forum selection
clause. See Ferens v. John Deere Co., 494 U.S. 516, 531 (1990) (“We have made quite
clear that ‘to permit a situation in which two cases involving precisely the same issues are
simultaneously pending in different District Courts leads to the wastefulness of time,
energy and money that § 1404(a) was designed to prevent.’”) (brackets omitted) (quoting
Cont’l Grain, 364 U.S. at 26); Research Automation, Inc. v. Schrader-Bridgeport Int’l, Inc., 626
F.3d 973, 978 (7th Cir. 2010) (“The ‘interest of justice’ is a separate element of the
transfer analysis that relates to the efficient administration of the court system. . . . The
interest of justice may be determinative, warranting transfer or its denial even where the
convenience of the parties and witnesses points toward the opposite result.”) (citing Van
Dusen v. Barrack, 376 U.S. 612, 626-27 (1964)).
13
The inefficiency is underscored by the fact that these same parties (including
Georgia-Pacific) have been litigating essentially the same antitrust conspiracy claims in
the Northern District of Illinois for several years, and are continuing to do so.7
Georgia-Pacific also fails to convince the court that careful management of discovery
could eliminate most of the judicial inefficiencies created by severance and transfer to a
new judge in Delaware. Finally, the likelihood for inconsistent results would increase
substantially should this court grant Georgia-Pacific’s motion to sever and transfer.
Contrary to Georgia-Pacific’s assertions then, the nature of plaintiff’s antitrust
conspiracy claims here, as well as the parties’ long-standing relationship in the Kleen
Products litigation, present just the “extraordinary circumstances” where the interests of
justice do not support transfer pursuant to a narrow, private forum selection clause.8
Accordingly, the court will deny Georgia-Pacific’s motion.
II. The Remaining Defendants’ Motion
Perhaps it is needless to say that the reasons for denying Georgia-Pacific’s motion
similarly support granting the other defendants’ § 1404(a) transfer motion. Since their
transfer motion is not based on a forum selection clause, however, transfer is appropriate
In fairness, that claim may be winding down with the defendants there, save Georgia-Pacific,
and the class having a conditional settlement approved by the court, and Georgia-Pacific awaiting
a ruling on its motion for summary judgment as the lone non-settling defendant remaining.
7
As plaintiff points out, one of the cases on which Georgia-Pacific relies heavily, Paduano, is easily
distinguishable. In that case, the district court noted that “unlike in Aquila, the decision whether
to grant or deny the motion to sever and transfer, by itself, will have a marginal impact on judicial
economy,” because it was “duty-bound to refer [the plaintiff’s] claims [against the remaining
defendants] to arbitration.” Paduano, 55 F. Supp. 3d at 435.
8
14
only if they demonstrate that: (1) venue is proper in the transferor district; (2) venue
and jurisdiction are proper in the transferee district; and (3) the transfer will (a) serve the
convenience of the parties and witnesses and (b) promote the interests of justice. Coffey
v. Van Dorn Iron Works, 796 F.2d 217, 219-20 (7th Cir. 1986). The parties raise no
disputes as to the first two factors, and so they focus, as will the court, on the
convenience of the parties and the interests of justice.9
A. Convenience of the Parties
When weighing how transfer will affect the convenience of the parties, courts
consider factors including: (1) the plaintiff’s choice of forum; (2) the convenience to
parties; and (3) the convenience to witnesses.
Illumina, Inc. v. Affymetrix Inc., No.
09-CV-227-BBC, 2009 WL 3062786, at *2 (W.D. Wis. Sept. 21, 2009). As the moving
party, defendants have the burden of establishing “that the transferee forum is clearly
more convenient.” Coffey, 796 F.2d at 219-20.
1. Plaintiff’s Choice of Forum
A plaintiff’s chosen forum is generally entitled to deference, particularly when the
plaintiff chooses its home forum. See Piper Aircraft Co., 454 U.S. at 255-56; In re Nat’l
Presto Indus., Inc., 347 F.3d 662, 663-64 (7th Cir. 2003) (“[U]nless the balance is
strongly in favor of the defendant, the plaintiff’s choice of forum should rarely be
Although the court addresses each factor separately, it keeps in mind the Seventh Circuit’s
instruction that “[§ 1404(a)] permits a ‘flexible and individualized analysis’ and affords district
courts the opportunity to look beyond a narrow or rigid set of considerations in their
determinations.” Research Automation, 626 F.3d at 978 (quoting Stewart, 487 U.S. at 29).
9
15
disturbed.”) (quoting Gulf Oil Corp. v. Gilbert, 330 U.S. 501, 508 (1947)).
Ashley’s
principal place of business is in Arcadia, Wisconsin, and so the Western District of
Wisconsin is indeed plaintiff’s home forum.
Defendants nevertheless argue that plaintiff’s choice of forum deserves no
deference, since the Kleen Products litigation is an “identical suit” in another venue. As
plaintiff Ashley Furniture points out, however, the case defendants cite in support of this
proposition actually concerned the application of the “first-to-file rule” to “mirror-image
lawsuits in two different district courts [with] each [party] claiming the other had
breached their contract for the manufacture and sale of an industrial cleaning machine.”
Research Automation, 626 F.3d at 975. While Ashley Furniture acknowledges that the case
here presents a “substantially similar federal antitrust claim against essentially the same
defendants” as in Kleen Products (Pl.’s Opp’n Br. (dkt. #96) at 3), the two cases are
decidedly not “identical” in the sense that they were in Research Automation. See 626 F.3d
at 980 (“a declaratory judgment action and a mirror-image action seeking coercive
relief”). Moreover, Ashley Furniture exercised its right to opt out of that lawsuit to avoid
being forced into a class resolution of its claim. Plaintiff’s choice of this forum must,
therefore, receive substantial deference.
2. Parties and Witnesses
Although this court is certainly more convenient for plaintiff, whose employees
and witnesses plaintiff plausibly asserts are mostly located in Northern Wisconsin,
defendants argue that transfer is nevertheless warranted because the Northern District of
Illinois is more convenient for defendants, since they are all already defendants in the
16
Kleen Products class action and “already have counsel with substantial knowledge of the
cases in that jurisdiction.” (Defs.’ Opening Br. (dkt. #79) at 15.) Of course, § 1404(a)
references “the convenience of parties and witnesses,” not counsel, but there is an
obvious, potentially sizable cost to the defendants associated with bringing an entirely
new cast of lawyers, not to mention a new judge, up to speed on a Section 1 conspiracy
claim of this magnitude.10
Even so, § 1404(a) does not require transfer where
convenience is only shifted from the non-moving party to the moving party. See Heller
Fin., Inc. v. Midwhey Powder Co., 883 F.2d 1286, 1293 (7th Cir. 1989).
Moreover,
defendants witnesses will be inconvenienced regardless of the forum because they are
located in various parts of the country. Admittedly, even this is somewhat offset by the
greater ease in traveling in and out of Chicago (at least by air).11 Still, defendants fail to
establish that the Northern District of Illinois is a clearly more convenient forum.
B. Interest of Justice
“The ‘interest of justice’ is a separate component of a § 1404(a) transfer analysis
and may be determinative in a particular case, even if the convenience of the parties and
witnesses might call for a different result.” Coffey, 796 F.2d at 220 (internal citations
omitted). “Factors traditionally considered in an ‘interest of justice’ analysis relate to the
While the latter cannot be helped, the court views much of the retention of separate, local
counsel for each defendant as a largely self-inflicted cost, even in a conspiracy case, since federal
law will largely control, existing counsel for each defendant can continue to provide independent
representation and the role of attorneys “on the ground” is of little value, except to advise of local
court procedures.
10
Even plaintiff’s counsel located in Kansas City would likely find Chicago more convenient for
this reason, and those in Milwaukee would find it a wash at best given the availability of train
service.
11
17
efficient administration of the court system.” Id. at 221. Those factors typically include:
(1) docket congestion and likely speed to trial in the transferor and transferee forums; (2)
each court’s familiarity with the relevant law; (3) the respective desirability of resolving
the claims in each court; and (4) the relationship of each community to the controversy.
Research Automation, 626 F.3d at 978. In the same way that “the interest of justice may
be served by transfer to a district where the litigants are more likely to receive a speedy
trial,” it may also be served by transferring “related litigation . . . to a forum where
consolidation is feasible.” Coffey, 796 F.2d at 221.
Defendants do not respond to plaintiff’s arguments that this court is more familiar
with and has a greater interest in resolving plaintiff’s claims for “full damages” under
Wis. Stat. § 133.14, but given the substantial overlap between the determinations of
liability under § 133.03 and the Sherman Act, those factors weigh against transfer to a
very limited extent.12 See Lerma v. Univision Communications, Inc., 52 F. Supp. 2d 1011,
1015-16 (E.D. Wis. 1999) (Wisconsin antitrust statute generally controlled by federal
case law in light of its intended reenactment of the Sherman Act).
Plaintiff further
asserts that cases tend to reach trial faster in this district than in the Northern District of
Illinois (a median of 18.7 months to trial versus 32.6 months, respectively (Pl.’s Ex. 2
(dkt. #96-2))), but this factor also carries little weight here because, as defendants point
out, the district-wide median time to trial statistics are “somewhat misleading,” given
that they include all cases before all judges in each district, and because Judge
Unlike § 133.03, which essentially adopts the elements of an illegal antitrust conspiracy in the
Sherman Act, plaintiff correctly points out that the civil remedies in § 133.14 differ in some
material respects from its federal counterpart, but those differences are not so unique or
significant to tilt the consolidation of these cases either way.
12
18
Leinenweber’s familiarity with Kleen Products “may allow for a faster time to trial than the
parties would otherwise receive in this court.”
Kimberly-Clark Worldwide, Inc. v. First
Quality Baby Prods., LLC, No. 14-cv-502-wmc, 2014 WL 6612881, at *5 (W.D. Wis.
Nov. 20, 2014).
Determining the interests of justice, therefore, largely turns on whether judicial
economy would be served by a transfer. Indeed, defendants’ motion is premised almost
entirely on judicial economy, citing Ferens for the proposition that “to permit a situation
in which two cases involving precisely the same issues are simultaneously pending in
different District Courts leads to the wastefulness of time, energy and money that §
1404(a) was designed to prevent.” 494 U.S. at 531 (brackets omitted) (quoting Cont’l
Grain, 364 U.S. at 26). While this case may not present precisely the same issues as the
Kleen Products class action from which plaintiff opted-out, the antitrust claims are without
question “substantially similar.” (Pl.’s Opp’n Br. (dkt. #96) at 3.)
Plaintiff argues that defendants overestimate the judicial economy to be gained
from transfer because of the differences between this case and Kleen Products, particularly:
(1) plaintiff’s state law claim for “full payments” damages under Wis. Stat. § 133.14; (2)
defendant Georgia-Pacific’s Wisconsin state law counterclaim; and (3) the allegations
that the conspiracy continued for an additional three years. However, the court again
agrees with defendants that plaintiff overstates the differences between this case and
Kleen Products.
To begin, § 133.14 provides for recovery of “[a]ny payment made upon, under or
pursuant to” a “contract[] or agreement[] made by any person while a member of any
19
combination or conspiracy” in restraint of trade prohibited by Wis. Stat. § 133.03. As
previously discussed, while the Wisconsin antitrust statutes provide for different types of
recovery than the Sherman Act under some circumstances, any complexity that might be
added by the addition of plaintiff’s state law claim will likely be lessened, if not mooted,
because Wisconsin courts traditionally look to federal law to interpret substantive
violations of the Wisconsin antitrust statutes. See, e.g., Emergency One, Inc. v. Waterous
Co., 23 F. Supp. 2d 959, 970 (E.D. Wis. 1998) (“Wisconsin case law makes clear that
federal court decisions construing the Sherman Act control application of Wisconsin
antitrust law, including determination of what acts constitute a combination or
conspiracy in restraint of trade.”) (internal quotation marks and citations omitted); State
v. Waste Mgmt. of Wis., Inc., 81 Wis. 2d 555, 574, 261 N.W.2d 147 (1978) (“Except for
the fact that the state act applies to intrastate commerce while the federal act applies to
interstate commerce, what amounts to a conspiracy in restraint of trade under the
Sherman Act amounts to a conspiracy in restraint under the Wisconsin antitrust act.”)
As for the counterclaim, defendant Georgia-Pacific merely seeks recovery of unjust
enrichment damages in the event that any sales agreements between it and plaintiff are
found to be void as illegal under Wis. Stat. § 133.14.
As a result, plaintiff would
“inequitably retain” benefits “in the form of corrugated boxes.” (Answer (dkt. #68) at
96-97.) Accordingly, plaintiff can neither plausibly assert that plaintiff’s state law claims
or Georgia-Pacific’s counterclaim predominate over the principal disputes in this case
under the Sherman Act, nor that any unique elements of the state law claims will be
particularly difficult for a federal judge sitting outside this district to apply. See Atlantic
20
Marine, 134 S. Ct. at 584 (“[F]ederal judges routinely apply the law of a State other than
the State in which they sit. We are not aware of any exceptionally arcane features of
Texas contract law that are likely to defy comprehension by a federal judge sitting in
Virginia.”).
This leaves plaintiff’s added allegation in its second amended complaint that the
price fixing conspiracy continued for an additional, three-year period, but this, too, fails
to materially distinguish plaintiff’s claims from those in Kleen Products. At most, the
alleged continuation of the conspiracy will add limited nuance to the basic factual and
legal issues with which Judge Leinenweber is already well familiar with regard to the
2004-2010 conspiracy period alleged in Kleen Products.
Indeed, defendants have
demonstrated persuasively that Judge Leinenweber’s familiarity with those complex issues
in the substantially similar Kleen Products class action after several years would minimize
the relatively minor differences that plaintiff argues militate in favor of keeping its case
separate. In addition, a failure to transfer while that case pends creates at least some risk
of an inconsistent judgment.
Were the two litigations on a similar track, these possible efficiencies and risks of
inconsistent results might be sufficiently strong to overcome plaintiff’s limited
inconvenience factors and even disrupt plaintiff’s more substantial right to choose its
own forum. Given that the Kleen Products litigation appears to be winding down for all
defendants save Georgia-Pacific and WestRock CP, LLC, however, the promises of
efficiencies and risks of inconsistent results are largely ephemeral. Indeed, it appears that
Judge Leinenweber has already given preliminary or final approval to class action
21
settlements for all but three of the companies here (Kleen Products, Case No. 1:10-cv05711 (dkt. ##734, 902, 1365)) and that a summary judgment decision is pending as to
two of them, Georgia-Pacific and WestRock CP, LLC.13 (Kleen Products, Case No. 1:10cv-05711 (dkt. ##1086, 1088).)
Even if the final claims against Georgia-Pacific and WestRock CP, LLC, were to go
forward to trial, that would likely happen before a trial will take place in this case. And
while Judge Leinenweber no doubt has learned much about the containerboard industry,
its products and marketplace, the bulk of his efforts have centered on class action issues,
which for the most part will not be repeated here, see Kleen Products, 306 F.R.D. 585, and
discovery and expert opinions on which this court can learn much to avoid reinventing
the wheel. See, e.g., Kleen Products LLC v. International Paper, Case No. 1:10-cv-05711,
2017 WL 2362567 (N.D. Ill. May 31, 2017). Moreover, the court expects that the
parties will agree to streamline discovery consisting largely of production of documents
and deposition transcripts created as part of the Kleen Products lawsuit and orderly
discovery from Ashley Furniture Industries pursued by all the defendants through a more
discrete group of attorneys and law firms.
Finally, while there will obviously be a ramp-up period for me, the factual and
legal issues in this lawsuit are hardly daunting, nor need be the expense of educating me
on the essential facts and theories for what is essentially a claim of a per se illegal,
antitrust conspiracy to restrain production and fix prices. Accordingly, defendants have
The third company, WestRock RKT Company, which filed a motion to dismiss plaintiff’s
claims against it in this case (dkt. #119), does not appear to be a defendant in Kleen Products.
13
22
failed to meet their burden to establish that transfer of this case to the Northern District
of Illinois is appropriate.
ORDER
IT IS ORDERED that defendant Georgia-Pacific’s motion to sever and transfer
(dkt. #63) and the other defendants’ motion to transfer (dkt. #78) are DENIED;
Entered this 27th day of July, 2017.
BY THE COURT:
/s/
__________________________________
WILLIAM M. CONLEY
District Judge
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