United States District Court, N.D. Illinois, Eastern Division
MICHAEL MEYER, CHRISTOPHER MEYER, and MICHAEL MEYER CAPITAL GROUP, LLC, Plaintiffs,
EVERETT GRADY, KATHRYN GRADY, KAEGEM, CORP., Defendants.
MEMORANDUM OPINION AND ORDER
M. DOW, JR. UNITED STATES DISTRICT JUDGE
the Court is Defendant Kaegem, Corp.'s motion to transfer
venue to the Central District of Illinois under 28 U.S.C.
§ 1404 . For the reasons set forth below,
Defendant's motion  is denied. This case is set for
further status on July 6, 2017, at 9:00 a.m.
case involves the operations and financial health of
Defendant Kaegem, Corp., a nonpublic Illinois corporation
that created compliance management software. Defendant
Everett Grady is an Illinois citizen and Kaegem's
President. [1, ¶ 11.] Defendant Kathryn Grady is an
Illinois citizen and Kaegem's Secretary. Id.
¶ 12. Plaintiff Michael Meyer is a Missouri citizen and
owns 15, 000 shares of Kaegem common stock. Id.
¶ 7. Plaintiff Christopher Meyer is an Oklahoma citizen
and owns 5, 000 shares of Kaegem common stock. Id.
¶ 8. Plaintiff Meyer Capital Group, LLC (“Meyer
Capital”) is a Missouri limited liability company and
both of its members (Bryan and Jeff Meyer) are Missouri
citizens. Id. ¶¶ 9-10. Meyer Capital owns
10, 000 shares of Kaegem common stock. Id. ¶ 9.
have sued Defendants under the Illinois Business Corporations
Act and for breach of fiduciary duty, common law fraud, and
unjust enrichment. Plaintiffs argue that Defendants
misrepresented Kaegem's financial condition and
capitalization in an effort to secure Plaintiffs'
investments in 2013 and 2014. During most of the events
underlying the complaint, Kaegem's principal place of
business was in Mundelein and Libertyville, Illinois-both of
which are in Lake County and fall within the Northern
District of Illinois. [1, ¶ 13.] By the time Plaintiffs
filed their complaint in January 2017, Kaegem had moved its
operations to Jacksonville, which is in Morgan County,
Illinois and the Central District of Illinois. Id.
Defendant Kaegem-but not Defendants Everett or Kathryn
Grady-filed the instant motion to transfer venue to the
Central District of Illinois . Defendant opted not to
file a reply in support of its motion.
U.S.C. § 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 or to any district or division to which all parties
have consented.” 28 U.S.C. § 1404(a). This
provision authorizes courts to transfer matters based on a
“case-by-case consideration of convenience and
fairness.” Stewart Organization, Inc. v. Ricoh
Corp., 487 U.S. 22, 29 (1988). The Seventh Circuit
“grant[s] a substantial degree of deference to the
district court in deciding whether transfer is
appropriate.” Research Automation, Inc. v.
Schrader-Bridgeport Int'l, Inc., 626 F.3d 973,
977-78 (7th Cir. 2010). The party moving to transfer venue
(here, one Defendant) “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, 219-20 (7th Cir. 1986).
Courts may transfer a case under Section 1404(a) when
“(1) venue is proper in the transferor district; (2)
venue is proper in the transferee district; (3) the transfer
will serve the convenience of the parties and witnesses; and
(4) the transfer will serve the interests of justice.”
Hanover Ins. Co. v. N. Bldg.. Co., 891 F.Supp.2d
1019, 1025 (N.D. Ill. 2012). The Court considers these
factors in turn.
Is venue proper in the transferor and transferee
the first two factors, Plaintiffs and Defendant Kaegem agree
that venue is proper both in this district and in the Central
District of Illinois. [1, ¶ 5; 17, at 2.] Under 28
U.S.C. § 1391(b), “[a] civil action may be brought
in-(1) a judicial district in which any defendant resides, if
all defendants are residents of the State in which the
district is located; (2) a judicial district in which a
substantial part of the events or omissions giving rise to
the claim occurred, or a substantial part of property that is
the subject of the action is situated; or (3) if there is no
district in which an action may otherwise be brought as
provided in this section, any judicial district in which any
defendant is subject to the court's personal jurisdiction
with respect to such action.” Venue is proper in the
Central District under subsection (1) because Kaegem's
principal place of business is Jacksonville and all three
Defendants are Illinois residents. See 28 U.S.C. §
1391(c)(2) (stating that entity-defendants “shall be
deemed to reside * * * in any judicial district in which such
defendant is subject to the court's personal
jurisdiction”). Venue is proper in the Northern
District under subsection (2) because, as alleged in the
complaint, “a substantial part of the events or
omissions” giving rise to Plaintiffs' fraud-related
claims occurred in this district while Defendant's
principal place of business was in Lake County. Therefore,
the Court agrees that venue would be proper in both the
Central and Northern Districts of Illinois.
Will transfer serve the convenience of the parties and
evaluating the convenience of the parties and witnesses,
courts weigh the following factors: (1) the plaintiff's
choice of forum; (2) the situs of the material events; (3)
the relative ease of access to sources of proof; (4) the
convenience of the witnesses; and (5) the convenience to the
parties of litigating in the respective forums.”
Hanover Ins. Co., 891 F.Supp.2d at 1025. “When
evaluating the convenience of a forum to the parties and
witnesses, we may consider, for example, the length and cost
of travel, the number of witnesses to be called, the nature
of witnesses' testimony, and witness travel time.”
Hutchinson v. Fitzgerald Equip. Co., 2016 WL 878265,
at *4 (N.D. Ill. Mar. 8, 2016).
the “plaintiff's choice of forum is generally given
substantial weight, particularly when it is the
plaintiff's home forum.” Aldridge v. Forest
River, Inc., 436 F.Supp.2d 959, 960- 61 (N.D. Ill.
2006). That choice is entitled to less deference when
“another forum bears a stronger relationship to the
dispute or the plaintiff's choice of forum has no
connection to the material events in question.”
Id. Here, no Plaintiff resides in this district;
they reside in either Missouri or Oklahoma. The Central
District is geographically closer to Missouri than this
District. That said, Plaintiffs filed their complaint in the
district where they were allegedly induced to acquire
Defendant's shares and remain as shareholders. Thus,
Plaintiff's choice of forum is entitled to some, but not
substantial, weight given this forum's connection to the
material events of this suit.
both sides agree that the situs of material events is the
Northern District. [17, at 3; 22, at 2-3.] Defendant's
principal place of business when the alleged
misrepresentations were made and Plaintiffs purchased
Defendant's shares was the Northern District. That situs
has not ...