United States District Court, Northern District of Illinois, E.D
March 28, 1985
HARRIS TRUST AND SAVINGS BANK, PLAINTIFF,
SLT WAREHOUSE COMPANY, INC., DEFENDANT.
The opinion of the court was delivered by: Shadur, District Judge.
MEMORANDUM OPINION AND ORDER
Harris Trust and Savings Bank ("Harris") has charged SLT
Warehouse Company, Inc. ("SLT") with breach of duty and failure
to exercise due care as a warehouseman of grain in which Harris
held a security interest. SLT now moves under 28 U.S.C. § 1404(a)
("Section 1404(a)") for transfer of this action to the
United States District Court for the Western District of
Kentucky. For the reasons stated in this memorandum opinion and
order, the motion is granted.
Both Harris' place of incorporation and its principal place of
business are in Illinois. As to SLT, both those relationships
are with Missouri. SLT is licensed to do business in both
Illinois and Kentucky and conducts field warehousing operations
in both states.
This action arises out of warehousing services SLT provided to
Wathen's Elevators, Inc. ("Wathen's")*fn1 in Henderson
County, Kentucky between 1977 and 1982. To obtain credit from
Harris for grain purchases, Wathen's turned over to SLT control
of the grain storage facilities and inventory on Wathen's
property. Wathen's would purchase grain from farmers and store
it with SLT. SLT would issue a non-negotiable warehouse receipt
to Harris, to secure the latter's interest in the
grain. SLT could not release grain for resale without Harris'
SLT hired Wathen's bookkeeper and office manager Raymond Sheets
("Sheets") to conduct SLT's warehousing operation on Wathen's
premises. Sheets' duties to SLT included maintaining grain
elevator and inventory records, preparing and issuing the
warehouse receipts to Harris and obtaining executed withdrawal
records for grain released for shipment. Harris in turn
employed the First National Bank in Henderson ("Henderson
Bank") as its agent to deal with Sheets and SLT. Henderson Bank
processed the paperwork, including the warehouse receipts, for
Wathen's line of credit. Upon notification by Henderson Bank
that the proper paperwork had been completed, Harris would wire
funds to Wathen's.
In March 1982 Wathen's ceased operations and filed for
bankruptcy. When Harris attempted to enforce its security
interest in Wathen's remaining inventory it discovered soybeans
and white corn valued at over $435,000 were missing. Harris
then filed its Complaint here against SLT:
1. Counts I and II charge SLT with failure to exercise the
due care required of warehousemen under Kentucky common law.
2. Count III asserts SLT (through Sheets) breached its duty
to notify Harris of a change in Wathen's financial condition
that rendered Wathen's unable to perform its agreement with
3. Count IV charges SLT violated its Kentucky statutory duty
(Ky.Rev.Stat. § 359.110) to deliver grain promptly upon
demand by Harris.
Wathen's bankruptcy has also given rise to other lawsuits
currently pending in the Western District of Kentucky.
Section 1404(a) Standards
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
As this Court has had frequent occasion to explain,*fn2
district court's discretion to transfer a case under Section
1404(a) is broader than its discretion to dismiss under the
older doctrine of forum non conveniens. Norwood v.
Kirkpatrick, 349 U.S. 29
, 32, 75 S.Ct. 544, 546, 99 L.Ed. 789
(1955). Section 1404(a) does not accord plaintiff's choice of
forum the decisive weight it enjoyed under forum non
conveniens. Piper Aircraft Co. v. Reyno, 454 U.S. 235
102 S.Ct. 252, 264, 70 L.Ed.2d 419 (1981). Today the choice of
forum is only one of many factors to consider. And for over 30
years it has been clear that factor merits minimal
consideration where (as here) the chosen forum bears no
relation to the events giving rise to the cause of action.
Chicago, Rock Island & Pacific R.R. Co. v. Igoe,
220 F.2d 299
, 304 (7th Cir. 1955); Berks v. Rib Mountain Corp.,
571 F. Supp. 500
, 501 n. 2 (N.D.Ill. 1983).
Nonetheless a transfer will not be ordered "if the result is
merely to shift the inconvenience from one party to another."
15 Wright & Miller, Federal Practice & Procedure:
Jurisdiction § 3848, at 246. SLT has the burden of
demonstrating that litigation of this action in Illinois would
result in a "clear balance of inconvenience." Hotel
Constructors, Inc. v. Seagrave Corp., 543 F. Supp. 1048, 1050
That balancing process involves the factors identified in
Section 1404(a): the convenience of parties and witnesses and
"the interest of justice." As for the last catchall item,
Piper Aircraft, 454 U.S. at 241 n. 6, 102 S.Ct. at 258 n. 6
(citations omitted) recapitulated from Gulf Oil Corp. v.
Gilbert, 330 U.S. 501, 508-09, 67 S.Ct. 839, 843, 91 L.Ed.
1055 (1947) (the classic case on forum non conveniens) the
generally grouped under the "interest of justice" rubric:
The factors pertaining to the private interests of the
litigants included 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 inexpensive."
. . . The public factors bearing on the question included the
administrative difficulties flowing from Court congestion; the
"local interest in having localized controversies decided at
home"; the interest in having the trial of a diversity case in
a forum that is at home with the law that must govern the
action; the avoidance of unnecessary problems in conflict of
laws, or in the application of foreign law; and the unfairness
of burdening citizens in an unrelated forum with jury duty.
Applying the Standards*fn3
1. Convenience of Parties
Harris contends there is a major imbalance in the "convenience
of parties" factor because Missouri corporation SLT would be
equally inconvenienced by an Illinois or Kentucky venue, while
Illinois-based Harris would find litigating here much more
convenient than a Kentucky venue. However, two items on the
Kentucky side of the balance tip the scales back most of the
way toward equilibrium:
1. Because the actors, events and property at issue in this
lawsuit are all located in Kentucky (Hinderer Aff. ¶ 4), all
direct discovery must be carried out there. Harris would thus
have to carry on substantial litigation activities in
Kentucky even if Illinois venue were preserved.
2. SLT is already involved in extensive litigation in
Kentucky related to Wathen's bankruptcy (Hinderer Aff. ¶¶ 6,
7, 8). It would therefore find a Kentucky venue significantly
more convenient than an Illinois venue, where it would also
have to retain additional counsel.
In sum, "convenience of parties" weighs only slightly in
2. Convenience of Witnesses
"Convenience of witnesses" strongly favors Kentucky. Certainly
the most important witnesses in this action are Sheets and the
other Wathen's and Henderson Bank employees involved in the
operation of the Wathen's grain elevator. All those people are
Kentucky residents (Hinderer Aff. ¶ 9).*fn4
Harris attempts to avoid that obvious analysis by (1)
identifying two Illinois employees it intends to call as
witnesses and (2) urging SLT has not committed itself to
calling a single specific Kentucky resident. But those
arguments are only so much smoke:
1. Harris' employee-witnesses would only authenticate
documents and verify account balances (Breen Aff. ¶ 9). Even
were that testimony not obviated by stipulation (as it might
well be), it would not be nearly as important as that of
Sheets and other Kentucky occurrence witnesses.
2. Harris is disingenuous in contending SLT fails to identify
a single Kentucky witness. Harris' own complaint singles out
Kentucky resident Sheets as the most important actor in this
affair. And although it is too early for SLT to commit itself
to calling specific witnesses, SLT has clearly indicated —
must concede — the prime prospects are all Kentuckians.
3. Interest of Justice
"Interest of justice," as given content in Piper Aircraft,
also points decidedly toward Kentucky. Of the four relevant
considerations in this area,*fn5 two favor Kentucky slightly
and two do so strongly.
(a) Access to grain elevators. Kentucky-based litigation
would allow inspection of the location where the grain was
stored. That must be viewed as no more than a marginal
consideration, because there is no indication at this stage
of the proceedings that such access will be necessary.
(b) Judicial economy. SLT and Harris differ strenuously
over the state of Wathen's non-bankruptcy litigation in the
Western District of Kentucky. There is no assurance that any
aspect of this litigation could be coordinated with that
pending in Kentucky. But a Kentucky venue offers at least the
remote possibility of such coordination, while none exists in
(c) (c) Application of Kentucky law. Kentucky common and
statutory law govern this action. Piper Aircraft, 455 U.S.
at 285, 102 S.Ct. at 255 teaches a diversity case should,
when possible, be decided by a court most at home with the
applicable state law. Harris retorts the Kentucky law to be
applied here is simple and should therefore not be a factor
in the current motion. But at this early stage only a
soothsayer could predict how sticky the legal issues might
become. Moreover, no matter how simple the law may be, Piper
Aircraft (drawing on Gulf Oil) also stresses the "local
interest in having localized controversies decided at
(d) Availability of compulsory process. There is no contest
on this important factor. Key witness Sheets is a Kentucky
resident and is not currently an employee of SLT (Harris
Surreply Mem. 1). Thus neither the parties nor this Court
could compel him to testify in Illinois. Other Wathen's and
Henderson Bank employees appear to be in the same position.
Although the lack of compulsory process is normally not a
strong factor unless the potential witness has demonstrated
recalcitrance, it would be imprudent to proceed in a forum
where none of the important witnesses is subject to
process. That would unnecessarily risk a major impediment to
an effective trial.
This is clearly a Kentucky case. Although the convenience of
the parties favors Illinois slightly, the convenience of
witnesses and the interest of justice far overbalance the
scales toward Kentucky. SLT's motion is granted, and this
action is transferred to the Western District of Kentucky.