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COMMODITY FVT. TRAD. COM'N v. FIRST NAT. MONETARY

May 26, 1983

COMMODITY FUTURES TRADING COMMISSION, PLAINTIFF,
v.
FIRST NATIONAL MONETARY CORPORATION, DEFENDANT.



The opinion of the court was delivered by: Shadur, District Judge.

MEMORANDUM OPINION AND ORDER

Commodity Futures Trading Commission ("CFTC") sues First National Monetary Corporation ("FNMC"), challenging FNMC's marketing practices under the antifraud provisions of the Commodity Exchange Act, 7 U.S.C. § 6o (1). FNMC has filed a number of motions, only one of which will be addressed in this opinion: its 28 U.S.C. § 1404(a) ("Section 1404(a)") motion to transfer this action to the United States District Court for the Eastern District of Michigan. For the reasons stated in this memorandum opinion and order, that motion is granted.

Section 1404(a) provides:

  For the convenience of the 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.

This action concededly "might have been brought" in the Eastern District of Michigan. Headquartered at Southfield in that district, FNMC plainly transacts business there.*fn1 Moreover its challenged business practices largely occurred within that district. In light of those Michigan contacts, the venue provisions of 7 U.S.C. § 13a-1 would of course have permitted the filing of this suit in the proposed transferee forum.

Inquiry turns then to the substantive criteria of Section 1404(a): convenience of the parties and witnesses and the interest of justice. Those standards evolved from, but are not precisely coextensive with, the forum non conveniens considerations identified in Gulf Oil Corp. v. Gilbert, 330 U.S. 501, 508-09, 67 S.Ct. 839, 843, 91 L.Ed. 1055 (1947). Though Section 1404(a) requires a "lesser showing of inconvenience" (Norwood v. Kirkpatrick, 349 U.S. 29, 32, 75 S.Ct. 544, 546, 99 L.Ed. 789 (1955)) than its common law antecedent, this opinion will look at both sets of principles.

"Convenience of witnesses" — a significant consideration under both Section 1404(a) and Gulf Oil's forum non conveniens formulation — weighs heavily in favor of transfer. Most of the important witnesses FNMC expects to call work at or near its Southfield headquarters and live in the transferee district:

    1. FNMC's principal officers, whose testimony would be
  especially probative as to FNMC's marketing policies and its
  underlying intent;
    2. employees of FNMC and of its Southfield advertising
  agency, who together developed the advertising campaign
  attacked by CFTC; and
    3. most of FNMC's account executives, whose solicitation
  techniques are also a major focus of CFTC's Complaint.

FNMC's remaining potential witnesses are employees from branch offices in California, Florida, New York and Texas and are therefore neutral (as between the two districts) in terms of convenience.

CFTC's anticipated witnesses essentially comprise former FNMC customers (dispersed from coast to coast) who have filed complaints with CFTC. It chose a sampling of those complaints to make up an Appendix to its responsive memorandum. Of the 119 complaints listed, only 4 involved Illinois investors (and at least one of those is not in this district!), while 13 were sited in Michigan. All the other scattered complainants provide no basis to prefer either forum. Because both districts encompass major metropolitan areas, they are equally accessible to most witnesses. United States v. Bein, 539 F. Supp. 72, 75 (N.D.Ill. 1982) (in which this Court applied the like standards of Fed.R.Crim.P. 21(b) to a similar commodities fraud criminal case).

So much then for "convenience of witnesses." As for Section 1404(a)'s "convenience of parties" criterion, it embraces many of the "private interest" factors enumerated in Gulf Oil, 330 U.S. at 508, 67 S.Ct. at 843:

  Important considerations are the relative ease of access to
  sources of proof; availability of compulsory process for
  attendance of unwilling, and the cost of obtaining attendance
  of willing, witnesses; possibility of view of premises, if view
  would be appropriate to the action; and all other ...

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