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Am Castle & Co. v. Byrne

United States District Court, Seventh Circuit

October 3, 2013

A.M. CASTLE & CO., Plaintiff,
v.
THOMAS K. BYRNE and OILFIELD STEEL SUPPLY, LLC, Defendant.

MEMORANDUM OPINION AND ORDER

SHARON JOHNSON COLEMAN, District Judge.

Plaintiff A.M. Castle & Co. ("Castle") filed a seven count complaint against defendants Thomas K. Byrne and Oilfield Steel Supply, LLC ("OSS") alleging that Byrne, while employed at OSS, misappropriated confidential customer lists, vendor contact information and sales data owned by his former employer, Castle. Castle claims that Byrne provided this confidential information to OSS, having retained the lists and information when he resigned from Castle, and that the defendants are unfairly pursuing Castle's customers. Defendants move to transfer the case pursuant to 28 U.S.C. § 1404(a) to the Southern District of Texas [7], arguing that Texas is a more convenient forum as the situs of material events, the residence of defendants and most potential non-party witnesses, in addition to the relative interests of justice. For the reasons stated below, this Court grants defendants' motion and transfers the case to the Southern District of Texas.

Background

Castle is a Maryland corporation with its principal place of business in Oak Brook, IL. (Compl. Dkt. #1 at ¶ 1) The corporation has 55 offices throughout the world, including two in Texas. (Defs' Mot. to Trans. Ven. at 7) One of the areas in which Castle does business is supplying the oil and gas industry with pipes and other materials. (Compl. Dkt. #1 at ¶ 6) Byrne represented Castle in its Houston, Texas office selling pipes and other materials as an Inside Sales Representative. ( Id. ) While working for Castle, Byrne was based in Houston, and 90% of his customers are in Texas. (Defs' Mot. to Trans. Ven. at 6) Additionally, Byrne was subject to an Employee Confidentiality Agreement during the entirety of his employment with Castle. (Compl. Dkt. #1 at ¶ 8) This agreement stipulated that, at the end of his employment, Byrne would return all property of Castle and retain no copies. ( Id. )

OSS is a Texas limited liability company with its principal place of business and sole office in Houston, Texas. (Defs' Orig. Answer at 2; Defs' Mot. to Trans. Ven. at 7) Additionally, OSS is a direct competitor to Castle in supplying pipe and materials to the oil industry. (Defs' Orig. Answer at 4-5) After Byrne, a Texas resident, resigned from Castle, he began working with OSS. (Compl. Dkt. #1 at ¶ 14) In all, since the beginning of 2013, Castle has lost 31 employees from its Houston office. (Defs' Mot. to Trans. Ven. at 7)

Castle alleges that before Byrne's resignation from the company, he forwarded confidential information from Castle to his home e-mail address and another e-mail address in his wife's name. (Compl. Dkt. #1 at ¶¶16-18) This information included e-mail contacts for Castle sales contacts, financial data for Castle, performance data on Castle personnel, lists of open transactions, and sales reports. Id. Further, Castle claims that while the data was being sent, Byrne was in talks with OSS to leave Castle and start working for OSS. Id. Defendants OSS and Byrne deny these allegations. (Defs' Orig. Answer at 6)

Castle alleges that an evaluation of the relevant evidence will likely include their "computer servers, computer access policies, data backup, and information" and associated IT personnel, all located in its headquarters in Illinois. (Pl's Resp. Br. at 5) Additionally, Castle believes that it will need testimony from Castle employees based in Illinois. ( Id. at 5) Castle also is willing to take the depositions of out-of-state witnesses wherever they may be located. ( Id. at 10)

Legal Standard

A motion to transfer venue is governed by 28 U.S.C. § 1404(a), which states 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..." 28 U.S.C. § 1404(a) (2013). A party seeking a transfer under section 1404(a) has the burden of showing that another venue is more appropriate. Coffey v. Van Dorn Iron Works, 796 F.2d 217, 219 (7th Cir. 1986). A court may order transfer when "(1) venue was proper in the transferor district, (2) venue and jurisdiction would be proper in the transferee district, and (3) the transfer will serve the convenience of the parties and the witnesses as well as the interests of justice." United Air Lines, Inc. v. Mesa Airlines, Inc., 8 F.Supp.2d 796, 798 (N.D.Ill. 1998).

Discussion

Here, there is no dispute that venue and jurisdiction are proper in both the Northern District of Illinois and the Southern District of Texas. The parties only dispute whether transfer will serve the convenience of the parties and the interests of justice. When determining whether a transfer will serve the convenience of the parties and the interests of justice, the Court should consider both private and public factors. See Amoco Oil Co. v. Mobil Oil Corp., 90 F.Supp.2d 958, 960 (N.D.Ill. 2000). The private factors to be considered are: (1) the plaintiff's choice of forum, (2) the situs of the material events, (3) the relative ease and access to sources of proof, (4) the convenience of the parties, and (5) the convenience of the witnesses. Amoco Oil Co., 90 F.Supp.2d at 960. The public factors the Court should consider include concern the judge's familiarity with the applicable law and issues concerning the efficient administration of justice, including the speed at which the case will proceed to trial and each forum's relative interest in resolving the dispute. Id. at 961-962.

I. Private Factors

a. Plaintiff's Choice of Forum

A plaintiff's choice of forum is given substantial weight when considering transfer, especially when its choice of forum is its home forum. First Nat'l Bank v. El Camino Resources, Ltd., 447 F.Supp.2d 902, 912, 914 (N.D.Ill. 2006); Macedo v. Boeing Co., 693 F.2d 683, 688 (7th Cir. 1982). However, plaintiff's choice of forum is afforded less deference if another forum has a stronger connection to the dispute. First Nat'l Bank, 447 F.Supp.2d at 912. Furthermore, deference to the plaintiff's choice of forum is not absolute, and "where the plaintiff's choice of forum is not the site of material events, plaintiff's choice of forum is entitled less deference." Id. (citing Am. Family Ins. ex rel. Suddarth v. Wal-Mart Stores, Inc., No. 02 C 8017, 2003 U.S. Dist. LEXIS 6412, 2003 WL 1895390, at *1 (N.D. Ill. Apr. 17, 2003); see Heller Fin., Inc. v. Riverdale ...


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