United States District Court, N.D. Illinois, Eastern Division
August 4, 2004.
S.J.G. ENTERPRISES, LTD. d/b/a S.J.G. Associates, Ltd., Plaintiff,
EIKENBERRY & ASSOCIATES, INC., Defendant.
The opinion of the court was delivered by: CHARLES KOCORAS, District Judge
This matter comes before the court on Defendant Eikenberry &
Associates, Inc.'s ("Eikenberry") motion to transfer. For the
reasons set forth below, the motion is denied.
Eikenberry is a corporation based in Kokomo, Indiana that is in
the business of molding plastics products. In either 1984 or
1985, Eikenberry entered into a relationship with Stephen Gulyas,
President of Illinois-based and incorporated Plaintiff S.J.G.
Enterprises, Ltd. ("SJG") whereby SJG would represent Eikenberry
as a sales agent. From that time until the beginning of 2000, the
relationship continued without incident with SJG soliciting orders for Eikenberry and being
compensated on a commission basis. By the end of 2003, a
significant dispute arose between the parties concerning the
purported nonpayment of commissions owed by Eikenberry to SJG.
While the parties initially attempted to resolve their
differences on their own, by the beginning of 2004 negotiations
had broken down and SJG had threatened to sue Eikenberry in
Illinois. In anticipation of this lawsuit, Eikenberry filed suit
on January 16, 2004, in the Circuit Court of Howard County,
Indiana. Eikenberry's complaint sought a declaratory judgment
concerning the terms of its relationship with SJG, the applicable
law governing the dispute, and the amount owed to either party.
While Eikenberry's counsel mailed a copy of the complaint and
summons to SJG's counsel on January 16, 2004, Eikenberry was not
able to properly effectuate service on SJG until March 4, 2004,
when the complaint and summons were delivered to Gulyas' wife.
On February 18, 2004, SJG filed a complaint against Eikenberry
in this court, seeking an accounting and alleging violations
under the Illinois Sales Representative Act, 820 ILCS 120/0.01
et seq, with Eikenberry being served on February 20. The
subject matter of the two lawsuits is nearly identical.
Eikenberry then filed a motion to stay or dismiss the action in
this court, which we denied as moot because the Indiana action
had been removed to federal court in the Southern District of
Indiana. On May 25, 2004, the Southern Indiana District Court denied
Eikenberry's motion to remand Eikenberry now moves to transfer
this case for consolidation with the previously filed action
pending in the Southern District of Indiana.
The First to File Rule
Eikenberry first suggests that we should transfer this case to
the Southern District of Indiana pursuant to the "first to file
rule," which generally favors the forum of the first-filed suit.
See Schwarz v. National Van Lines, Inc., 317 F. Supp. 2d 829,
832-33 (N.D. Ill. 2004). Under this rule, a district court has
the discretion to transfer a suit that "is duplicative of a
parallel action already pending in another federal court."
Serlin v. Arthur Andersen & Co., 3 F.3d 221, 223 (7th Cir.
1993) (citations omitted). However, the Seventh Circuit has never
rigidly adhered to the "first to file" rule. Trippe Mfg. Co. v.
American Power Conservation Corp., 46 F.3d 624, 629 (7th Cir.
1995). As Judge St. Eve has noted, courts will not enforce the
rule when the first filed action was an "improper anticipatory
filing" made for the purpose of forum shopping. Schwarz at 833.
In particular, the rule cannot be permitted to allow a potential
defendant to dictate the forum by filing "mirror image"
declaratory judgement actions "brought in the face of clear
threats of suit and seeking determinations that no liability
exists." Id. By July 15, 2003, SJG's counsel had expressed to Eikenberry
that if its dispute with SJG over commissions could not be
resolved, SJG felt entitled to relief under the Illinois Sales
Representatives Act, including the statute's provisions for
treble damages. Both parties affirm that by January 2004, their
negotiations had broken down and that litigation appeared
imminent. On January 16, 2004, Eikenberry filed the Indiana
complaint seeking a declaratory judgment as to the applicable law
governing its commissions dispute and to the amounts owed to
either party. The complaint states that SJG is wrongfully
claiming entitlement to commissions and acknowledges that SJG had
"threatened to file a lawsuit seeking additional compensation."
Eikenberry's Indiana action is precisely the type of mirror-image
declaratory relief claim, brought in anticipation of litigation
with the intent to preempt the plaintiff's choice of forum, to
which the "first to file" rule does not apply. We accordingly
will not transfer the present case to Indiana on first to file
grounds. However, we must also determine whether transfer is
appropriate pursuant to 28 U.S.C. § 1404(a) ("Section 1404(a)").
Section 1404(a) provides that "[f]or the convenience of 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." The decision to transfer an action is within the sound discretion of the trial court. Coffey
v. Van Dorn Iron Works, 796 F.2d 217, 219 (7th Cir. 1986). The
party seeking transfer bears "the burden of establishing, by
reference to particular circumstances, that the transferee forum
is clearly more convenient." Id. at 219-20. In order to
succeed, the moving party must demonstrate that (1) venue is
proper in the transferor district, (2) the transferee court is in
a district where the action may have originally been brought, and
(3) transfer is for the convenience of the parties and will serve
the interests of justice. Bukhari v. American Express Travel
Related Services, 2002 WL 385561, *1 (N.D. Ill. 2002) (citing
Heller Financial, Inc. v. Midwhey Powder Co., Inc.,
883 F.2d 1286, 1293 (7th Cir. 1989)). As the parties do not dispute that
venue is proper here and that the suit could have originally been
brought in the Southern District of Indiana, we will limit our
analysis to whether transfer would be more convenient for the
parties and serve the interests of justice.
In analyzing whether transfer would be for the convenience of
the parties and in the interest of justice, the court must first
examine five factors relating to convenience: (1) the plaintiff's
choice of forum, (2) the locations of the material events, (3)
the relative ease of access to sources of proof in each forum,
(4) the convenience of the parties, and (5) the convenience of
the witnesses. Bukhari at *1 (citing Amoco Oil Co. v. Mobil
Oil Corp., 90 F. Supp. 2d 958, 960 (N.D. Ill. 2000)). A plaintiff's choice of forum is entitled to substantial weight
when making a Section 1404(a) determination, particularly when
the transferor court sits in the plaintiff's home district.
Schwarz, 317 F. Supp. 2d at 835. On the other hand, where the
plaintiff's chosen forum is not the plaintiff's home or the
location of material events, the plaintiff's choice is entitled
less deference. Id. For this reason, courts will often discuss
the choice of forum and location of material events factors
In the present case, SJG is based in Barrington, Illinois,
within the Northern District. There exists pointed disagreement
between the parties as to where the material events took place.
SJG contends that the events at issue arose in Illinois,
including the formation of its sales commission contract with
Eikenberry as well as the contract's performance and breach.
Namely, SJG states that Eikenberry retained SJG's services in
Illinois, SJG sold on behalf of Eikenberry only in Illinois and
Michigan, and that no aspects of SJG's duties related to Indiana.
For its part, Eikenberry claims that the commissions contract was
negotiated and executed at its office and plant in Kokomo, not in
Illinois. Eikenberry further avers that SJG's orders were
processed, billed, and coordinated in Kokomo, where most of
Eikenberry's production took place.
Because the record does not conclusively demonstrate that the
majority of relevant events took place in either Illinois or
Indiana, and the important factual issue of where the contract
was formed remains in dispute, the location of material events factor is not dispositive. However, the deference afforded to
SJG's choice when suing in its home forum supports keeping the
The next factor looks to the relative ease of access to sources
of proof. Since this action calls for an accounting of sales and
commissions over a four-year period, neither party suggests that
the documentary record will be voluminous.*fn1 As the only
other sources of proof that the parties plan on introducing at
trial will be in the form of witness testimony, which will be
discussed below, this factor will not influence our analysis.
The fourth factor in our determination looks to the convenience
of the parties. Each party resides in the forum in which it seeks
to litigate, so the parties would be equally inconvenienced by
having to litigate in the other's choice forum. As "it is
axiomatic that a motion to transfer cannot be used simply to
shift the one's party's inconvenience onto another party," IP
Innovation LLC v. Lexmark Int'l, Inc., 289 F.Supp.2d. 952, 955
(N.D.Ill. 2003), this factor does not bolster the position of
The remaining convenience factor, the convenience of witnesses,
"is often viewed as the most important factor in the transfer
balance." Schwarz, 317 F. Supp. 2d at 836. In making this determination, courts look to "the
nature and quality of the witnesses' testimony with respect to
the issues of the case." Id. Eikenberry has identified
twenty-seven witnesses who are current and former Eikenberry
employees who could potentially testify concerning Eikenberry's
accounts payable and receivable, its commissions rates for sales
agents and relationships with customers, as well as SJG's
activities on behalf of Eikenberry. Eikenberry has specifically
identified ten current and former employees, all Indiana
residents, with the greatest and most relevant knowledge of the
circumstances and events at issue. Eikenberry argues that because
these ten witnesses all reside in Southern Indiana, with the
three former employees outside the scope of our subpoena power,
the convenience factor tilts especially in its favor.
SJG contends that it could potentially call certain customers
from Illinois and Michigan, who could not be subpoenaed by the
Southern District of Indiana and would themselves be
inconvenienced by a transfer. However, SJG fails to specifically
identify the witnesses who would purportedly be inconvenienced by
a transfer, which it must do when arguing against the
appropriateness of transfer. See Celozzi v. Boot, 2000 WL
1141568, *7 (N.D.Ill. 2000). While we recognize that the three to
four-hour drive from Kokomo to Chicago is not particularly
burdensome, because Eikenberry references and identifies at least ten witnesses, compared to
none by SJG, the convenience of witnesses factor tilts in
When adjudicating a motion to transfer, the "interests of
justice" analysis "relates to the efficient functioning of the
courts, not the merits of the underlying dispute." Schwarz,
317 F.Supp.2d at 837. Factors to be considered include the speed with
which the case will be resolved, familiarity of the respective
courts with the law that applies to the dispute, the communities'
relation to the events in question, and the desirability of
resolving cases in the places where they arise. IP Innovation,
289 F. Supp. 2d at 955. The speed factor weighs against transfer,
as courts in our district resolve cases, on average, over six
months faster than do courts in the Southern District of
Indiana.*fn2 So too does the next factor, as our court is
more seasoned and familiar with the law governing this suit the
Illinois Sales Representative Act than would be a court in
Indiana. The final two factors cannot be determined because of
the factual dispute that exists concerning where the relevant
events in question, namely the initial contract formation, took
place. The being said, the interests of justice aspect favors SJG
and against transfer. When balancing the appropriate considerations, two elements
plaintiff's choice of forum and interests of justice support
SJG's position against transfer while only the convenience of
witnesses aspect gives merit to Eikenberry's argument for
transfer We therefore cannot say that Eikenberry has overcome its
burden of demonstrating the need for transfer, and its motion is
Based on the foregoing analysis, Eikenberry's motion to
transfer is denied.