United States District Court, N.D. Illinois
March 22, 2004.
CRL INDUSTRIES, INC., Plaintiff,
DAVID E. JONES and ROPRO COMPANY, Defendants
The opinion of the court was delivered by: MARVIN ASPEN, Chief Judge, District
MEMORANDUM OPINION AND ORDER
Plaintiff CRL Industries, Inc. ("CRL") brought a breach of contract
action against Defendants David E. Jones and ROPRO Company ("ROPRO")
alleging that the defendants failed to make payments on three separate
Joan agreements. On December 5, 2003, the defendants filed the present
"Motion to Dismiss for Forum Non Conveniens." In the motion, defendants
argue that the United States District Court for the Western District of
Texas would be a more appropriate forum for the disposition of CRL's
complaint.*fn1 Their reliance on the doctrine of forum non conveniens is
misplaced. The common law
doctrine of forum non conveniens was largely superseded in 1948 when
Congress enacted 28 U.S.C. § 1404, which governs the transfer of cases
from one federal jurisdiction to another. As a result, a party may only
bring a motion to transfer based on forum non conveniens where he seeks
transfer from a federal court to a foreign or state court. Quackenbush
v. Allstate Ins. Co., 517 U.S. 706, 722 (1996). The Western District of
Texas is neither a foreign jurisdiction nor a state court, so it is §
1404 rather than the doctrine of forum non conveniens which governs our
analysis in this case. Applying that statute, we decline to transfer
venue and deny the defendants' motion.
CRL is a Delaware corporation with its principal place of business and
domicile in Bannockburn, Illinois. Defendant David E. Jones is a citizen
of Texas. Defendant ROPRO is an unincorporated Texas association with
its principal place of business in Round Rock, Texas.
In 1993 and 1994, CRL and the defendants executed three promissory
notes, whereby CRL agreed to loan defendants a total of $87,562.49. All
three of the promissory notes were negotiated in Illinois and delivered
to CRL in Illinois. CRL now alleges that, despite its demands for
payment, neither of the defendants have paid any portion of or interest
on their debts. On October 28, 2003, CRL brought the present breach of
contract action, seeking $128,792.21, which it alleges is now the total
amount (including interest) that the defendants owe.
The defendants admit to the existence of the promissory notes and
concede that they have never made any payments to CRL, but deny that
they owe CRL any money. Rather, defendants claim that the promissory
notes were executed as part of a larger transaction in which CRL
promised to pay some of ROPRO's debts and subsequently purchase ROPRO
from Jones. The amounts advanced via the promissory notes, defendants
argue, were ultimately intended to offset part of the total purchase
price of ROPRO. According to the defendants, the funds were never meant
to be repaid. Furthermore,
Defendants argue that they were justified in keeping the loan money as
a self-assessed damage award when CRL breached the purchase agreement by
failing to follow through with the acquisition of ROPRO. (Def.'s Answer
Pursuant to 28 U.S.C. § 1404(a), a court may, for the convenience of
parties and witnesses or in the interest of justice, transfer any civil
matter to another district where venue is proper. Courts employ a three
part test in determining whether to transfer a case under § 1404(a).
Specifically, a court may transfer such a case if the moving party shows
that: 1) venue is proper in the district where the action was originally
filed; 2) venue and jurisdiction would be proper in the transferee
district; and 3) the transfer will serve the convenience of the parties
and witnesses as well as the interests of justice. Sanders v. Franklin,
25 F. Supp.2d 855, 857 (N.D. Ill. 1998) (citations omitted). We address
each of these factors in turn.
First, venue is proper in the Northern District of Illinois under
28 U.S.C. § 1391(a)(2) because a "substantial part of the events or
omissions giving rise to the claim occurred" in this district.
Specifically, the promissory notes that form the central controversy in
this case were executed and delivered in Illinois. Second, venue is also
proper in the Western District of Texas because both defendants reside in
that district. See 28 U.S.C. § 1391(a)(1) (providing that venue is proper
in "a judicial district where any defendant resides, if all defendants
reside in the same State.").
Third, we must consider the factors enumerated in 28 U.S.C. § 1404(a),
including: 1) the convenience of the parties; 2) the convenience of the
witnesses; and 3) the interests of justice. Coffey v. Van Dorn Iron
Works, 796 F.2d 217, 219 (7th Cir. 1986). "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
trial judge." Id. (citations omitted). Courts should also give
to the plaintiff's choice of forum where it is also the plaintiff's home
forum. FUL, Inc. v. Unified Sch. Dist. No. 204, 839 F. Supp. 1307, 1310
(N.D. Ill. 1993). Finally, the movant has the burden of establishing that
the transferee forum is clearly more convenient. Coffey, 796 F.2d at
219-20. With these considerations in mind, we address each of the
statutory factors in turn.
I. Convenience of the Parties
Neither the Western District of Texas nor the Northern District of
Illinois appears to be a particularly convenient forum for the parties
involved in this case. On the one hand, it would be burdensome for CRL to
attend trial in the Western District of Texas because its principal
offices are in Illinois. On the other hand, it would be equally
inconvenient for the defendants to attend trial in Illinois because they
are both Texas residents. Neither party has provided evidence as to
whether there is a disparity in resources between the parties, which
would make travel to a distant forum particularly burdensome for one
side. See, e.g., Tensor Group, Inc. v. All Press Parts & Equip., Inc.,
966 F. Supp. 727, 729 (N.D. Ill. 1997) (considering a disparity in
resources in assessing the relative burden of litigating in a distant
venue). We thus find that neither party will be disproportionately
burdened by having to litigate in a distant forum.
II. Convenience of Witnesses & Availability of Evidence
Both sides argue that there will be better access to evidence and
witnesses in their chosen forum. Once again, we find this factor to be
inconclusive. On the one hand, the defendants allege that "access to
sources of proof will be easier," "compulsory process for the attendance
of unwilling witnesses is available," and "the cost of obtaining the
presence of unwilling witnesses will be lower" in the Western District of
Texas. (Defs.' Mtn. to Dismiss ¶ 6.) Aside from these vague
allegations, however, the defendants are only able to pinpoint three
Texas-based witnesses who will be called to testify at trial,
specifically, Defendant Jones; Alan Bunch, ROPRO's CPA; and Linda Jones,
Defendant Jones' wife.
The defendants have not alleged that these witnesses would be unwilling
to testify at trial. Thus, there are no concerns about the possibility
that some of these witnesses may not be amenable to subpoena in
Illinois. Tensor Group Inc. v. All Press Parts & Equip., Inc.,
966 F. Supp. 727, 729 (N.D. Ill. 1997).
CRL counters that its documents, records, and files relating to the
case are in Illinois. It also alleges that its three potential
witnesses, including John Corvino, CRL's corporate secretary; D.H.
Carroll, CRL's CEO; and Joseph S. Haas, CRL's vice-president; all work and
live in the Northern District of Illinois. Because these witnesses all
work for CRL, they will presumably testify voluntarily, even if they are
outside of Texas' subpoena power. Id.
In the end, there are relevant documents, records, and files to be
found in both locations, and three witnesses on either side of the
equation. In general, a court should consider "not only the number of
witnesses to be inconvenienced, but also the `nature and quality of the
testimony' to be given." Id. (citations omitted). However, neither of the
parties in this case has provided any information regarding the nature or
quality of the testimony to be given by each of its witnesses. Nor has
any party specifically alleged that it would be particularly inconvenient
for any of the witnesses to travel to a distant forum. We therefore find
this factor in the choice of venue analysis to be inconclusive.
III. Interests of Justice
The interests of justice factor focuses on the efficient functioning of
the court system rather than on the merits of the underlying dispute.
Coffey v. Van Dorn Iron Works, 796 F.2d 221 (7th Cir. 1986). In
evaluating the interests of justice factor, a court should consider: 1)
the court's familiarity with applicable law; 2) the relative caseload of
each docket; and 3) the locale where the parties are more likely to
receive a speedy trial.
A. Court's Familiarity With Applicable Law
The parties disagree as to whether Illinois or Texas state law applies
in this case. As a federal court sitting in diversity, we must apply our
forum state's choice of law rules to determine what state's substantive
law will govern. CSX Tramp., Inc. v. Chicago and North Western Transp.
Co., Inc., 62 F.3d 185, 188 (7th Cir. 1995). In Illinois, "the law
applicable to a contract is that which the parties intended . . . When
that intent is expressed, it should be followed." H.B. Fuller Co. v.
Kinetic Sys., Inc., 932 F.2d 681, 685 (7th Cir. 1991) (quoting Hofeld v.
Nationwide Life Ins. Co., 59 Ill.2d 522, 259 (Ill. 1975)). A court should
only refuse to honor the parties' contractual choice of law agreement
"where there is an insufficient connection between the contract and the
state designated by the parties." Wilkes v. Accustaff, Inc.,
42 F. Supp.2d 842, 844 (N.D. Ill. 1999).
The three promissory notes entered into between CRL and the defendants
all contain the following clause: "This Promissory Note and Security
Agreement shall be governed and controlled as to validity, enforcement,
interpretation, construction, effect and in all other respects, by the
statutes, laws and decisions of the State of Illinois, the place of its
making and delivery." (Pl's Response, Ex. A.) As noted above, Illinois'
choice of law provisions dictate that this clause should be honored. We
therefore find that Illinois law will govern the substantive issues
raised in this case. Because the Northern District of Illinois is more
familiar with Illinois law than the Western District of Texas, this
factor weighs against transfer of this case.
B. Speedy Trial & Status of Dockets
In general, the interests of justice are served where a case is
transferred from a busy docket to a less congested docket. FUL, Inc.
v. Unified School Dist. No. 204, 839 F. Supp. 1307, 1313 (N.D. III.
1993). Both the Western District of Texas and the Northern District of
Illinois are busy courts.
Statistical differences in disposition times between the two courts
do no persuade us in favor of one forum over the other.
III. Resolution of Factors
In the end, the only factors that influence our decision in one
direction or another are: 1) the rule that the court should respect a
plaintiff's choice of forum (in this case, Illinois); and 2) the fact
that Illinois substantive law will govern the disposition of CRL's
breach of contract action. We find that these factors ultimately weigh
in favor of keeping the case in the Northern District of Illinois.
For the foregoing reasons, we deny the defendants' motion for transfer
of venue. It is so ordered.