United States District Court, Northern District of Illinois, E.D
May 26, 1983
COMMODITY FUTURES TRADING COMMISSION, PLAINTIFF,
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
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
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
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
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
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 practical
problems that make trial of a case easy, expeditious and
Those considerations too would be far better served by transfer
than by retention in this Illinois forum. FNMC would be greatly
1. Requiring FNMC's principal officers and account executives
to travel 250 miles to Chicago for days or perhaps weeks
during the trial would at a minimum be enormously
inconvenient. Indeed it would pose the potential of a severe
disruption of FNMC's entire business operations.
2. All FNMC records relating to customers who have filed
reparations cases with CFTC are located in Southfield and
would have to be transported to Chicago at considerable
3. Because FNMC's Michigan witnesses live more than 100 miles
from Chicago, compulsory process would not be available to
secure their attendance at trial.*fn2
Without question transfer would obviate those practical
difficulties, for FNMC's Southfield office is a short distance
from the transferee court.
By contrast an Illinois forum would at most afford marginal
convenience to CFTC:
1. With only one exception, every reported previous CFTC
enforcement action has been brought in a district in which
the defendant was incorporated or had an office. That almost
exclusive practice at least hints CFTC derives little added
convenience from trying a case in a district (such as this
one) in which it has an office but the defendant does not.
2. Only a minute portion of the documents CFTC intends to use
are located in Illinois: documents currently in the hands of
the few Illinois residents among the complaining FNMC
customers. And surely the choice of forum will not
significantly affect the cost of transporting records held by
the widely-scattered mass of dissatisfied FNMC customers.
3. CFTC's subpoena power in each forum extends to
approximately the same number of potential CFTC witnesses.
On balance, the minimal inconvenience CFTC would experience via
transfer is far eclipsed by the substantially increased
convenience to FNMC.*fn3
Finally, Section 1404(a)'s "interest of justice" standard and
the Gulf Oil counterpart considerations also point to
Michigan. Michigan is a much more interested forum state than
Illinois for three reasons:
1. FNMC is a Michigan enterprise with minimal contacts in
2. FNMC's challenged activities apparently affected more
Michigan than Illinois residents.
3. Most of those activities took place in Michigan, while the
remaining conduct occurred at FNMC's branch offices, all
located in states other than Illinois.*fn4 See Neminski,
CFTC claims retention would further the interest of justice
because plaintiff's choice of forum is entitled to overriding
consideration. That is simply not the law in this circuit.
Plaintiff's preference for an Illinois court has long been
accorded "minimal value where [as here] none of the conduct
complained of occurred in the forum selected by
plaintiff. . . ." Chicago Rock Island & Pacific R.R. Co. v.
Igoe, 220 F.2d 299
, 304 (7th Cir. 1955). And even if the
alleged misrepresentations made to the Illinois FNMC customers
were deemed to have taken place in Illinois (at best a
questionable proposition), CFTC's choice of forum should still be
heavily discounted. As already indicated, this lawsuit resembles
a class action, with the complaining FNMC customers readily
viewed as the real parties in interest. In those analogous
circumstances courts have uniformly depreciated an individual
plaintiff's selection of his home forum. In affirming a forum
non conveniens dismissal, Koster v. (American) Lumber mens
Mutual Casualty Co., 330 U.S. 518
524, 67 S.Ct. 828, 832, 91
L.Ed. 1067 (1947 declared (emphasis added, footnote omitted):
In any balancing of conveniences, a real showing of convenience
by a plaintiff who has sued in his home forum will normally
outweigh the inconvenience the defendant may have shown. But
where there are hundreds of potential plaintiffs, all equally
entitled voluntarily to invest themselves with the
corporation's cause of action and all of whom could with equal
show of right go into their many home courts, the claim of any
one plaintiff that a forum is appropriate merely because it is
his home forum is considerably weakened.
That pronouncement applies a fortiori to the balancing calculus
of Section 1404(a), which displays less solicitude for
plaintiff's choice of forum than its common law precursor.
If a private litigant were to bring an action in a blatantly
inappropriate district, with the only apparent reason being
that his, her or its lawyer were officed there, all of us would
be critical of that choice as impermissible forum-shopping.
Indeed this Court has had occasion to voice such criticisms in
the past.*fn5 Yet that looks to be the only predicate for
institution of this suit in this district, having as it does
the most attenuated linkage to the asserted claims. Government
should be held to at least the same standards as private
litigants, and CFTC has not approached meeting them here.
Transfer of this case to the United States District Court for
the Eastern District of
Michigan will serve the "convenience of parties and witnesses"
and the "interest of justice." FNMC's Section 1404(a) motion is
therefore granted, and this action is so transferred.