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Valero Marketing and Supply Co. v. Southcap Pipe Line Co.

August 2, 2007

VALERO MARKETING AND SUPPLY COMPANY AND THE PREMCOR REFINING GROUP, INC., PLAINTIFFS,
v.
SOUTHCAP PIPE LINE COMPANY, DEFENDANT.



The opinion of the court was delivered by: Reagan, District Judge

MEMORANDUM and ORDER

On August 11, 2006, Plaintiffs, Valero Marketing and Supply Company and The Premcor Refining Group, Inc., (collectively, "Premcor")*fn1 filed suit against Defendant Southcap Pipe Line Company ("Southcap") for Interstate Commerce Act ("ICA") liability for loss of Premcor's barrels of Qua Iboe crude oil, violation of the filed rate doctrine, unjust discrimination or preference, breach of bailment contract and conversion.

Subject matter jurisdiction lies under 49 U.S.C. §§ 8, 9 and 20(11) and the filed rate doctrine pursuant to 28 U.S.C. §§ 1331 and 1337. The Court has supplemental jurisdiction over Premcor's state law bailment and conversion claims under 28 U.S.C. § 1367(a) because those claims are related to and form a part of the same case or controversy as the federal claims. Southcap moves this Court to transfer this action to the United States District Court for the Southern District of Texas, Houston Division, pursuant to 28 U.S.C. § 1404(a) (Doc. 31). This matter is fully briefed and ready for disposition.

Under § 1404(a), "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 court or division where it might have been brought." 28 U.S.C. § 1404(a).A transfer is proper if (1) venue is proper in both the transferee and transferor courts; (2) it is for the convenience of the parties or witnesses; and (3) it is in the interest of justice. Coffey v. Van Dorn Iron Works, 796 F.2d 217, 219 (7th Cir. 1986). District Courts have broad discretion to grant or deny motions to transfer, and the burden is on the moving party to establish that the transfer is warranted. Heller Financial, Inc. v. Midwhey Powder Co., Inc., 883 F.2d 1286, 1293 (7th Cir. 1989).

The Propriety of the Transferee District

The parties do not dispute that venue is proper in both the Southern District of Illinois and the Southern District of Texas. Thus, the Court turns to the second prong of its analysis and must determine if transfer is for the convenience of the parties and witnesses and in the interest of justice.

The Convenience of the Parties and Witnesses

Factors to be considered by the Court in assessing the convenience aspect of a § 1404(a) transfer include: (1) the plaintiff's choice of forum, (2) the location of the parties and witnesses, (3) the ease of access to sources of proof, and (4) the situs of material events. ISI International, Inc. v. Borden Ladner Gervais LLP, 256 F.3d 548, 553 (7th Cir. 2001); Tice v. American Airlines, 162 F.3d 966 (7th Cir. 1998); General Portland Cement Co. v. Perry, 204 F.2d 316, 318-19 (7th Cir. 1953).

Premcor's Choice of Forum

A plaintiff's choice of forum normally is given substantial weight under § 1404(a). Piper Aircraft Co. v. Reyno, 454 U.S. 235, 255 (1981).However, where the plaintiff's choice is not its resident forum, the chosen forum is entitled to less deference. Id. at 255-56.

Southcap asserts that Premcor's choice of forum is entitled to little weight because Illinois is neither Premcor's state of incorporation (Delaware) nor the location of its principal place of business (San Antonio, Texas). However, these facts are not dispositive of this issue because, if Premcor demonstrates that the Southern District of Illinois has a strong connection with the operative facts giving rise to the claim, the Court will accord Premcor the deference traditionally given to its choice of forum. Tomkins v. Forte Capital Partners, LLC. 2006 WL 907776, *5 (N.D.Ill. 2006). In such a case, Premcor's choice of forum is an important consideration in determining whether a motion to transfer should be granted, but it is not determinative. Id.

Stated simply, this dispute is about Southcap's delivery, or rather failure or refusal to deliver, 418,537 barrels of Premcor's Qua Iboe crude oil at Patoka, Illinois, in Marion County, which is in the Southern District of Illinois. Crude oil transported on Southcap's capacity on the Capline System travels over a pipeline segment that lies entirely within this District beginning, according to Premcor, roughly at Joppa, Illinois, and ending at Patoka.*fn2 Moreover, Premcor has a continuing presence in this District since it operated a refinery in this District, at Hartford, Illinois, and continues to operate a terminaling and distribution center in Hartford. For these reasons, the Southern District of Illinois has a strong connection with the operative facts giving rise to Premcor's claim, and this factor weighs substantially against transfer.

The Location and Convenience of the Parties

As to the convenience of the parties, courts traditionally give relatively less weight to this factor. If, for instance, the convenience of the witnesses and the interest of justice point strongly in a contrary direction, the location and convenience of the parties is not controlling. See 15 CHARLES ALAN WRIGHT,ARTHUR ...


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