United States District Court, N.D. Illinois
February 23, 2004.
SOFIA SCHWARZ, Plaintiff,
NATIONAL VAN LINES, INC., DWAYNE SCHIESSER, and APEX RELOCATION SPECIALISTS, INC., Defendants
The opinion of the court was delivered by: AMY J. ST. EVE, District Judge
MEMORANDUM OPINION AND ORDER
Plaintiff Sofia Schwarz filed an eight-count complaint against
Defendants National Van Lines, Inc. ("National"), Dwayne Schiesser, and
Apex Relocation Specialists, Inc. ("Apex"), alleging breach of contract in
a bill of lading under 49 U.S.C. § 14706 (the "Carmack Amendment") (Count
I), statutory claims under section 1961 of the Racketeer Influenced and
Corrupt Organizations Act ("RICO") (Counts VII and VIII), conversion
(Count II), intentional infliction of emotional distress (Count III),
negligent infliction of emotional distress (Count IV), breach of the
implied covenant of good faith and fair dealing (Count V), and
constructive fraud based on breach of fiduciary duty (Count VI). In
response to Schwarz's complaint, National filed a motion to transfer
venue pursuant to 28 U.S.C. § 1404(a). For the reasons stated herein,
Defendant's motion to transfer is denied.
Schwarz is a citizen of the United States and of Oregon. Defendant
National is an Illinois corporation. (R. 9-1, Def.'s Mem. Supp. Mot. to
Transfer Venue, Ex. B at 3.) Defendant
Schiesser is a citizen of the United States and of Texas. (Id. at 3.)
Defendant Apex is a defunct Texas corporation. (Id.)
I. Events Surrounding Schwarz's Move from Scottsdale to Salem
In December of 2000, Schwarz hired National to move her belongings from
Scottsdale, Arizona to Salem, Oregon. (R, 11-1, Pl.'s Opp'n to Def.'s
Mot. to Transfer Venue at 1); (R. 9-1, Def.'s Mem. Supp. Mot. to Transfer
Venue at 1.) National's disclosed agent, Apex, through Schiesser, Apex's
alleged owner and operator, picked up Schwarz's belongings in
Scottsdale, Arizona. (R. 3-1, Pl.'s First Am. Compl. ¶¶ 4-5, 28-33.)
Central Moving and Storage ("Central") acted as National's agent in
Arizona, coordinating and facilitating Apex and Schiesser's pickup of
Schwarz's belongings on December 31, 2000. (Id. ¶¶ 12-17, 24-29.)
Schwarz's belongings were scheduled to arrive in Salem, Oregon between
December 30 and January 10, 2001, but did not arrive within the scheduled
delivery window. (R. 11-1, Pl.'s Opp'n to Def.'s Mot. to Transfer Venue
at 2.); (R. 9-1, Def.'s Mem. Supp. Mot. to Transfer Venue, Ex. C.) When
January 10, 2001 passed with no sign of her belongings, Schwarz began to
search for their whereabouts. (R. 11-1, Pl.'s Opp'n to Def.'s Mot. to
Transfer Venue at 2.) Schwarz claims that she repeatedly called National
in Illinois while her belongings were missing. (R. 3-1, Pl.'s First Am.
Compl. ¶¶ 41, 59.)
On March 18, 2001, a third party informed Schwarz's sister that
Schwarz's belongings were in Weatherford, Texas. (Id. at ¶ 61.) National
finally delivered Schwarz's belongings on April 22, 2001, without
charge. (Id. ¶ 78.)
II. Schwarz's Insurance Claim and the Ensuing Litigation
On May 16, 2001, Schwarz filed a formal insurance claim with National
for costs resulting from the late delivery of her belongings. (R. 3-1,
Pl.'s First Am. Compl. ¶ 78.) On
October 12, 2001, National rejected a portion of her claim and offered to
settle the remainder of the claim. (Id. ¶ 93.) On August 29, 2003,
Schwarz's attorney sent National a draft complaint that Schwarz
contemplated filing in the United States District Court for the Northern
District of Illinois. (R. 11-1, Pl.'s Opp'n to Def.'s Mot. to Transfer
Venue at 2.) National responded by filing a declaratory judgment action
in the United States District Court for the District of Arizona on
September 9, 2003 (the "Arizona Action").
Schwarz filed her complaint in this Court on October 7, 2003. On
December 9, 2003, Schwarz moved to dismiss National's Arizona Action for
lack of personal jurisdiction and improper venue, or alternatively, to
transfer the case to the Northern District of Illinois ("Illinois
Action"). (R. 11-1, Pl.'s Opp'n to Def.'s Mot. to Transfer Venue at 3.)
I. The First-to-File Rule
When two similar actions are filed, the general rule favors the forum
of the first-filed suit MLR, LLC v. U.S. Robotics Corp., No. 02 C 2898,
2003 WL 685504, *1 (N.D. Ill., Feb 26, 2003) (citations omitted);
Barrington Group, Ltd. v. Genesys Software Systems, Inc.,
239 F. Supp.2d 870, 873 (E.D. Wis. 2003) (citing Warshawsky & Co. v.
Arcata Nat. Corp., 552 F.2d 1257, 1263 (7th Cir. 1977)). Under this
"first to file" rule, district courts normally stay or transfer a federal
suit "for reasons of wise judicial administration . . . whenever it is
duplicative of a parallel action already pending in another federal
court."*fn1 Serlin v. Arthur Anderson Co., 3 F.3d 221, 223 (7th Cir.
1993) (citations omitted); Barrington Group, 239 F. Supp.2d at 873
The Seventh Circuit, however, does not rigidly adhere to a "first to
file" rule, Trippe Mfg.
Co. v. American Power Conversion Corp., 46 F.3d 624, 629 (7th Cir. 1995)
(citations omitted). Second-filed actions may proceed where favored by
the interests of justice. Tempco Elec. Heater Corp. v. Omega Eng'g,
Inc., 819 F.2d 746, 749-750 (7th Cir. 1987). Similarly, courts refuse to
enforce the first to file rule where forum shopping motivated the
first-filed action or the first-filed action constitutes an "improper
anticipatory filing" made under threat of an imminent suit and asserting
the mirror-image of that suit in another district. Barrington Group, 239
F. Supp.2d at 873; MLR, 2003 WL 685504 at *1 (citations omitted).
The Declaratory Judgment Act is not a tool with which potential
litigants may secure a delay or choose the forum. Schumacher Elec. Corp.
v. Vector Products, Inc., 286 F. Supp.2d 953, 955 (N.D. Ill. 2003)
(citations omitted). Declaratory judgment actions brought in the face of
clear threats of suit and seeking determinations that no liability exists
will be closely scrutinized as potentially improper anticipatory filings
if the other party proceeds to file. Barrington Group, 239 F. Supp.2d at
873-874 (citing Tempco Elec. Heater Corp., 819 F.2d at 749-750).
Here, National filed the Arizona Action shortly after Schwarz provided
National with a copy of the complaint that she anticipated filing in
Illinois. Since National filed its declaratory judgment action in the
face of a clear threat that Schwarz would sue, the Court will treat the
present case as an exception to the first to file rule. National's
declaratory judgment action appears to be an attempt to trump Schwarz's
choice of forum. Further, as addressed below, the interests of justice
counsel against invoking the first to file rule here.
II. National's Motion to Transfer
Assuming that venue is proper in a federal district court, "[f]or the
convenience of parties and witnesses, in the interest of justice, [that]
district court may transfer any civil action to any other district or
division where it might have been brought." 28 U.S.C. § 1404(a).
under section 1404(a) is appropriate where the moving party demonstrates
that (1) venue is proper in the transferor district; (2) venue and
jurisdiction are proper in the transferee district; and (3) the transfer
will serve the convenience of the parties, the convenience of the
witnesses, and the interests of justice. Vandeveld v. Christoph,
877 F. Supp. 1160, 1167 (N.D. Ill. 1995). The movant has the burden of
establishing, by reference to particular circumstances, that the
transferee forum is clearly more convenient. Coffey v. Van Dorn Iron
Works, 796 F.2d 217, 219-220 (7th Cir. 1986). In assessing a motion to
transfer, the Court must consider the statutory factors in light of all
of the circumstances of the case. Id. at 219. The weight accorded to each
factor is committed to the sound discretion of the Court. Id.
Where a party moves to transfer venue pursuant to section 1404(a), the
burden is on the movant to establish that venue is proper in the
transferee court. IP Innovation, 289 F. Supp.2d at 954 (citations
omitted). To establish venue, a plaintiff need only demonstrate that a
"substantial part" of the events or omissions giving rise to the claim
occurred within the forum district, not that a majority of the events
took place there.*fn2 Pasulka v. Syke, 131 F. Supp.2d 988, 994 (N.D.
Ill. 2001). The test for venue under 28 U.S.C. § 1391 focuses on the
location of the events giving rise to the cause of action. Master Tech
Prods., Inc. v. Smith, 181 F. Supp.2d 910, 913 (N.D. Ill. 2002). To be
"substantial," the events that occurred in the forum district must be a
part of the historical predicate of the claim. Id. at 914.
Even when the defendant never personally enters the forum district,
venue can nonetheless be appropriate in that district. Master Tech, 181
F. Supp.2d at 913. Telephone conversations and correspondence can support
venue under section 1391(b)(2) depending on the nature of the contacts
and their relationship to the claim. Id. at 913-914.
Here, neither party disputes that venue is proper in the Northern
District of Illinois. Venue also is proper in the District of Arizona.
Schwarz entered into the contract in Arizona, and the original location
of Schwarz's belongings in and the shipping of these belongings from
Arizona form a part of the historical predicate of the claim. If Schwarz
had not entered into the contract for the shipment of her belongings or
if National's agent had not picked up her belongings, the sequence of
events culminating in Schwarz's complaint would not have taken place.
B. Jurisdiction in the District of Arizona
The Arizona long-arm statute provides for personal jurisdiction
co-extensive with the limits of federal due process. Doe v. Am. Nat'l Red
Cross, 112 F.3d 1048, 1050 (9th Cir. 1997). Due process requires that
nonresident defendants have certain minimum contacts with the forum
state, so that the exercise of personal jurisdiction does not offend
traditional notions of fair play and substantial justice. RAR, Inc. v.
Turner Diesel, Ltd., 107 F.3d 1272, 1276 (7th Cir. 1997) (quoting Int'l
Shoe Co. v. Washington, 326 U.S. 310, 316 (1945)). A court's exercise of
personal jurisdiction over a nonresident defendant may be either general
or specific. Id. If the defendant's activities in the state are
substantial or continuous and systematic, a court may assert general
jurisdiction over the defendant even if the cause of action is unrelated
to those activities. Id. (citation omitted). Specific jurisdiction
originates in cases "arising out of or related to the defendant's
contacts with the forum." Id. (citing Helicopteros Nacionales de
Colombia, S.A. v.
Hall, 466 U.S. 408, 416 (1984)). Specific jurisdiction arises when the
underlying suit relates to the defendant's contacts with the forum
state. EAR, Inc., 107 F.3d at 1277. The defendant's connections with the
forum state must be substantial enough that the defendant should
reasonably anticipate being haled into court there. Id. (citing
World-Wide Volkswagen, Corp. v. Woodson, 444 U.S. 286, 297(1980)).
National does business in all states, and has accordingly designated an
agent for service of process in every state, including Arizona.; (R. 15-1
Def.'s Reply to PL's Opp. to Def.'s Mot. to Transfer Venue at 3.) By
designating ah agent for service of process in the State of Arizona,
National has subjected itself to general jurisdiction in the State of
Arizona. Accordingly, the District of Arizona has jurisdiction over
Because Apex and Schiesser have not subjected themselves to general
jurisdiction in the State of Arizona, the District of Arizona's
jurisdiction depends on whether specific jurisdiction exists. Here, the
connection between both Apex and Schiesser and the State of Arizona began
when Apex and Schiesser accepted the business of transporting Schwarz's
belongings out of the forum, which required coordination with National's
agents within Arizona. Apex and Schiesser created substantial contacts
with the State of Arizona when they entered the state to pick up
Schwarz's belongings. Because Schwarz's goods were picked up in Arizona,
Apex and Schiesser cannot claim that they could not reasonably anticipate
being haled into court in the District of Arizona. Accordingly, the
District of Arizona has specific jurisdiction over both Apex and
Schiesser, and jurisdiction would be proper over Schwarz's complaint in
the District of Arizona.
C. Convenience and the Interests of Justice
In analyzing the third prong of section 1404(a), the Court must examine
factors relating to both convenience and the interests of justice. Five
factors bear on this prong: (1) the plaintiffs choice of forum, (2) the
locations of the material events, (3) the relative ease of access to
sources of proof, (4) the convenience of the parties, and (5) the
convenience of the witnesses. Amoco Oil Co. v. Mobil Oil Corp.,
90 F. Supp.2d 958, 960 (N.D. Ill. 2000). "The weighing of factors for and
against transfer necessarily involves a large degree of subtlety and
latitude, and therefore, is committed to the sound discretion" of the
court. Coffey, 796 F.2d at 219-220. Transfer is inappropriate if it
merely transforms an inconvenience for one party into an inconvenience
for another party. Vandeveld, 877 F. Supp. at 1167. Here, National "has
the burden of establishing, by reference to particular circumstances,
that the transferee forum is clearly more convenient" than the transferor
court. Coffey, 796 F.2d at 219-220. National has failed to meet this
1. Plaintiffs Choice of Forum
A plaintiffs choice of forum is entitled to substantial weight under
section 1404(a), particularly where it is also the plaintiffs home
forum. Id. Where the plaintiffs chosen forum is not the location of the
material events, however, it is entitled to less deference. Tingstol
Co.v. Rainbow Sales, Inc., 18 F. Supp.2d 930, 933 (N.D. Ill. 1998). It is
appropriate, therefore, to discuss choice of forum together with the
location of material events. Truserv Corp. v. Neff, 6 F. Supp.2d 790,
793-794 (N.D. Ill. 1998).
2. Locations of the Material Events
Here, the parties dispute where the material events took place. Schwarz
claims that the breach of contract occurred not in Arizona, but in
Oregon, when National failed to deliver Schwarz's belongings within the
specified delivery window. Schwarz also argues that nearly all
of National's conduct giving rise to Schwarz's claims took place in
Illinois, including all of the communications alleged to have caused
Schwarz's emotional distress, and the omissions resulting in the
constructive fraud and the breach of implied covenant of good faith and
National, on the other hand, argues that the contract was partially
performed in Arizona, and that the breach occurred when Schiesser
exercised unauthorized control over Schwarz's belongings. Id. at 8.
National also argues that Schwarz's entire cause of action is contingent
upon the existence of the contract to ship Schwarz's belongings, focusing
on the negotiation, execution, and partial performance of the contract
within the District of Arizona.
In this case, the events material to the various claims took place in
many different locations. Accordingly, the location of the material
events is not dispositive.
3. Relative Ease of Access to Sources of Proof
Schwarz argues that the existence of "potentially voluminous
documentary evidence" located in the Northern District of Illinois weighs
in favor of denying transfer. National's response indicates that the
documentary evidence relating to Schwarz's claim totals approximately 450
pages, and National indicated that it would copy and provide those
documents to the plaintiff. Accordingly this factor is inapposite in
determining whether a transfer is warranted.
4. Convenience of the Parties
Neither party argues that either venue would be inconvenient.
Accordingly, this factor is not determinative.
5. Convenience of the Witnesses
The convenience of witnesses is often viewed as the most important
factor in the transfer balance. Tingstol, 18 F. Supp.2d at 933. To
determine the convenience to the witnesses, the court must look to the
nature and quality of the witnesses' testimony with respect to the issues
of the case. Id. (citations omitted). The court looks at the persons who
will be required to take time away from their respective home bases and
activities to deal with trial preparation and trial. Riviera Fin. v.
Trucking Servs., Inc., 904 F. Supp. 837, 839 (N.D. Ill. 1995).
Both National and Schwarz dispute the convenience of each forum.
Schwarz argues that the parties have collectively identified at least
four Illinois witnesses, and claims that National has padded its
anticipated witness list. Schwarz also claims that two out of every three
of the potential RICO witnesses presently identified reside closer to
Chicago than Phoenix.*fn3 Schwarz also argues that travel to Chicago is
more convenient than travel to the District of Arizona. National responds
that the majority of its witnesses reside closer to the District of
Arizona than the Northern District of Illinois.*fn4
Regardless of the venue, a significant number of anticipated witnesses
will be forced to travel to take part in the proceedings in this case.
Although Schwarz argues that Chicago is closer to Texas than Phoenix and
that there are twice as many flights from Texas to Chicago than there are
from Texas to Phoenix, these minor differences fail to impact the
convenience of the witnesses. Any difference in the inconvenience that
results from either forum is negligible, and
therefore this factor normally one of the most important factors in
determining the convenience of the proposed transferee venue does not
tilt the convenience scale in either direction.
2. Interests of Justice
The "interest of justice" analysis relates to the efficient functioning
of the courts, not the merits of the underlying dispute. Coffey, 796 F.2d
at 221. The "interests of justice" may be determinative in a particular
case, even if the convenience of the parties and witnesses might call for
a different result. Id. at 220. Factors traditionally considered in an
"interests of justice" analysis include determining where the litigants
are most likely to receive a speedy trial and having judges familiar with
the applicable law try the case. Vandeveld, 877 F. Supp. at 1167 (citing
Heller Fin., Inc. v. Midwhey Powder Co., Inc., 883 F.2d 1286, 1293 (7th
a. Likelihood of a Speedy Trial
Two statistics bear significant relevance when analyzing the likelihood
of a speedy trial. Tingstol, 18 F. Supp.2d at 934 (N.D. Ill. 1998)
(citations omitted). The first is the median number of months from filing
to disposition, and the second is the median number of months from filing
to trial. Id.
The 2002 Federal Court Management Statistics show that the median
number of months from filing to disposition of a civil case in the
Northern District of Illinois is 5.5 months, whereas the District of
Arizona disposes of civil actions in a median 10.7 months. (R. 9-1,
Def.'s Mem. Supp. Mot. To Transfer Venue, Ex. E.) Similarly, the median
number of months between filing a civil action and going to trial in the
Northern District of Illinois is 26.0 months, whereas the filing to trial
time for a civil action in the District of Arizona is 37.8 months. Id.
Accordingly, the likelihood of a speedy trial is greater in the Northern
District of Illinois, and this "interest of justice" factor weighs in
favor of denying National's motion.
b. Familiarity With Applicable Law
The law of the transferor district continues to apply to an action
following its transfer under section 1404(a). Coffey, 796 F.2d at 221.
Once the plaintiff has exercised her choice of forum by selecting a
permissible forum, the state law of that forum governs the action and
remains controlling, even if the action is transferred to a more
convenient forum. Id. Certainly, the Northern District of Illinois is
more familiar with Illinois law, which governs five of eight counts in
the complaint, than the District of Arizona. See Truserv, 6 F. Supp.2d at
793 (stating that the Northern District of Illinois is definitely more
familiar with Illinois law than the Western District of Pennsylvania).
Accordingly, this factor favors denying the defendant's motion to
transfer venue and retaining the action in the Northern District of
D. Balancing the Factors Impacting the Motion to Transfer
Venue is proper in the Northern District of Illinois, and venue and
jurisdiction are both proper in the District of Arizona. None of the
convenience factors weigh significantly in favor of transferring
Schwarz's complaint to the District of Arizona. Indeed, the slight
preference for the Plaintiffs chosen forum is the most significant factor
with bearing on the convenience analysis. Furthermore, the interests of
justice both the likelihood of a speedy trial and the familiarity with
the applicable law weigh in favor of this Court denying National's
motion. Accordingly, National has failed to carry its burden of showing
that the District of Arizona is clearly more convenient than this Court.
For the foregoing reasons, National's motion to transfer venue is