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INTERNATIONAL COM. EXPORT v. NORTH PACIFIC

March 29, 1990

INTERNATIONAL COMMODITIES EXPORT CORPORATION, PLAINTIFF,
v.
NORTH PACIFIC LUMBER CO., INC., DEFENDANT.



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

MEMORANDUM DECISION

This is a diversity action in which plaintiff International Commodities Export Corporation ("ICEC") seeks a declaratory judgment under 28 U.S.C. § 2201 and 2202 stating that it has fully performed its obligations under a contract for the shipment of beans to defendant. Defendant North Pacific Lumber Company ("North Pacific") denies that the claim arose in the Southern District of New York ("the Southern District"), alleges that the complaint fails to state a claim, and denies that this court has in personam jurisdiction over it. Further, defendant counterclaims for breach of express and implied warranty and seeks return of its payment to plaintiff, lost profits and additional storage costs and fees.

Defendant now moves for an order pursuant to 28 U.S.C. § 1404(a)*fn1 changing the venue of this action to the District of Oregon located in Portland, Oregon. For the reasons stated below, we grant the order for change of venue.

FACTUAL BACKGROUND

Plaintiff ICEC is a Delaware corporation with its principal place of business in Purchase, New York. ICEC is in the business of importing and exporting various agricultural products and commodities for distribution to and from manufacturers and wholesalers around the country. See September 28, 1989 Affidavit of Robert Reynolds in Support of Motion for Change of Venue ("Reynolds Affidavit") at ¶ 3.

Defendant North Pacific is an Oregon corporation which has its principal place of business in the county of Multnomah, in the city of Portland, Oregon. North Pacific, through its various divisions, among other things, buys and sells agricultural products and commodities in the wholesale market. Id. at ¶ 4.

The major facts in this case are not disputed. In July 1988 ICEC from its White Plains office sent for inspection a packet of sample small Chinese white beans to North Pacific at its office in Portland, Oregon. The sample was identified as "Sample PC-16." Defendant alleges that ICEC represented that these beans were of a quality sufficient to permit their importation into the United States. Reynolds Affidavit at ¶ 5.

In September 1988 the beans were shipped from Hong Kong to Portland aboard two separate ships. Plaintiff alleges that the beans were of the agreed-upon quantity and condition when placed at the disposal of two vessels in Hong Kong for shipment to Portland, Oregon. Id. The shipments were preceded by the documentation required by the terms of the purchase order and confirmation. Reynolds Affidavit ¶ 6. By wire transfers dated September 16, 1988 and October 25, 1988, respectively, North Pacific paid ICEC $129,190.50 for the beans, based on receipt of the required documentation. Id. at ¶ 7.

North Pacific claims that upon physical inspection of the beans, they discovered that the beans were of inferior quality with the presence of filth, mold and discoloration. Id. at ¶ 8. Defendant alleges that the beans were not of a minimum quality necessary for importation into the United States and were consequently detained in Portland, Oregon by the U.S. Food and Drug Administration ("FDA"). Id. Agents of the FDA conducted physical inspection and tests of the beans. Defendant alleges that upon notifying ICEC of the problem with the beans, plaintiff sent its representative, Mr. Jim Lenti, to Portland. Id. at ¶ 8. According to defendant Mr. Lenti agreed that the beans were of a lower quality than that evidenced by Sample PC-16. Id.

Meanwhile, rather than reject the shipment immediately, North Pacific sought, allegedly at ICEC's urging, to obtain FDA approval of a plan to "recondition" the beans in order to bring them up to import standards. Id. at ¶ 9. This plan has been unsuccessful. The government has refused to lift the detention order, and the beans have been stored in a warehouse in Portland. Id.

On July 3, 1989 North Pacific notified ICEC by letter that it was rejecting the shipments for failure to conform with Sample PC-16 as warranted by ICEC. Id. Defendant demanded repayment of the $129,190.50 purchase price, as well as interest and storage costs amounting to $8000 and increasing at the rate of $1000 per month. Pltf's Memo at 4.

DISCUSSION

The threshold question in a motion to transfer is whether, as required by § 1404(a), the action could have been brought in the transferee forum. See In re Air Crash Disaster at John F. Kennedy International Airport, 479 F. Supp. 1118, 1123 (E.D.N Y 1978). Defendant North Pacific is an Oregon corporation with its principal place of business located in Portland, Oregon. Although in its answer to the complaint North Pacific refuses to concede that this court has personal jurisdiction over it under § 302(a)(1) of New York's long-arm statute, it does agree that the District of Oregon clearly has personal jurisdiction over North Pacific. See October 2, 1989 Defendant's Memorandum of Law in Support of Motion for Change ...


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