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United States District Court, S.D. New York

January 12, 2004.

WERNER VON PEIN, Plaintiff, -against-, HEDSTROM CORPORATION, Defendant

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


Werner Von Pein ("Plaintiff) brought suit against his former employer, Hedstrom Corporation ("Defendant"), for breach of contract and violation of the Illinois Wage Payment and Collections Law. Currently before the Court is Defendant's motion for a change of venue under 28 U.S.C. § 1404(a). The Court hereby GRANTS Defendant's motion. I. Background

Defendant employed Plaintiff as a Vice President and General Manager from November 2000 until December 12, 2002, when Plaintiff was terminated. Plaintiff alleges that the parties entered into a Severance Agreement on March 14, 2002, which gave Plaintiff the right to receive one year's salary and benefits for one year if he was terminated without cause. Plaintiff alleges that he was, in fact, fired without cause and has not received over $ 200,000 which he is owed. Defendant, however, contends he was fired for misconduct and thus it has not breached the Severance Agreement. Defendant's defense is based, in part, on an allegation that Plaintiff engaged in willful misconduct when he coerced Defendant's human resources director to make a loan to him using company funds without knowledge of the company's chief executive officer. Defendant brought a counterclaim based on an allegation that Plaintiff converted property and Page 2 was planning a business to compete with Defendant while he was still Defendant's employee.

  Defendant maintains its principal place of business in Arlington Heights, Illinois, located in the Northern District of Illinois. Plaintiff was hired in New York by Executive Interim Management ("EM"), which appears to provide executives on a temporary basis to companies. EIM and Defendant executed a contract under which Plaintiff provided executive services to Defendant on an interim basis. After that interim period, Defendant hired Plaintiff as Vice President and General Manager. While Plaintiff appears to have worked out of New York as an EIM employee, he worked in Arlington Heights once Defendant hired him.

  Defendant maintains that this suit has no nexus to New York, and that Defendant merely maintains an office in New York, used only a few weeks out of the year during an annual toy show. Moreover, Defendant states that there are eight witnesses that it intends to call, all but one of whom reside in the Northern District of Illinois.

  Plaintiff disputes the contention that the suit has no connection to New York because: (1) the employment relationship between the parties was actually formed in New York while Plaintiff was an EIM employee; (2) the contract between EEM and Defendant specified that all disputes were to be governed by New York law; and (3) Defendant spends more than $ 50,000 per year maintaining its New York showroom. In addition, Plaintiff argues that there are only two witnesses who would testify about events material to the underlying dispute, and therefore the other witnesses should be disregarded in analyzing the convenience of this venue. Finally, Plaintiff maintains that Defendant's employees regularly travel to New York, belying the argument that it would be inconvenient to do so for trial. Page 3

 II. Discussion

  Section 1404(a) provides: "For 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."*fn1 28 U.S.C. § 1404(a). The determination to transfer venue is done on a case-by-case basis, guided by notions of convenience and fairness. In re Cuyahoga Equip. Corp., 980 F.2d 110, 117 (2d Cir. 1992); Goggins v. Alliance Capital Mgmt. L.P., 279 F. Supp.2d 228, 232 (S.D.N. Y. 2003). Courts consider the following eight factors in deciding a motion to transfer: (1) Plaintiffs choice of forum; (2) the locus of the operative facts; (3) convenience and relative means of the parties; (4) convenience of the witnesses; (5) availability of process to compel the attendance of witnesses; (6) location of physical evidence; (7) relative familiarity of the courts with the applicable law; and (8) interests of justice and trial efficiency. Id. Applying these factors, the Court concludes that this case should be transferred to the Northern District of Illinois.

  A. Plaintiffs Choice of Forum

  Plaintiff's choice of forum in the Southern District of New York is entitled to considerable weight. Orb Factory Ltd, v. Design Science Toys, Ltd., 6 F. Supp.2d 203, 210 (S.D.N. Y. 1998). But that choice is given more deference if there is a material connection between the forum and the events giving rise to the cause of action. Goggins, 279 F. Supp.2d at 232. As stated below, there is little, if any, material connection between the Southern District of New York and the events that give rise to this suit. Page 4

  B. Locus of Operative Facts

  Plaintiff's case arises out of an employment relationship that took place in the Northern District of Illinois. Plaintiff worked at Defendant's offices in Arlington Heights, Illinois, and it is the events surrounding his termination from that job that gives rise to both his claims and to Defendant's counterclaim. No operative facts occurred in or have any relation to the Southern District of New York.

  Plaintiff's arguments to the contrary have little merit. First, Plaintiff was an employee of EM, not Defendant, while he worked in New York, and the contract between EM and Defendant has no relevance to this case. Thus, the fact that New York law might have governed any disputes between EM and Defendant is also irrelevant. Finally, Defendant's warehouse in New York does not have anything to do with the controversy between the parties. Neither the complaint nor the answer establishes any relevant events that occurred in, or relate to, the New York warehouse. "Courts routinely transfer cases where the principal events occurred, and the principal witnesses are located in another district." Totonelly v. Cardiology Assocs. of Corpus Christi, Inc., 932 F. Supp. 621, 623 (S.D.N.Y. 2003).

  C. Convenience of Parties

  Of course, Defendant favors transfer to Illinois while Plaintiff would find the Southern District of New York a more convenient forum. Plaintiff contends that he would be financially burdened to litigate this case in the Northern District of Illinois. While that may be so, Defendant would also be burdened by the costs of travel for its employees who are witnesses in this matter. Defendant, as a corporation, may have greater financial means than Plaintiff, but Plaintiff has not identified any witnesses whose accommodations will burden him, unlike Page 5 Defendant who will bear the transportation expense of multiple employees. Thus, the parties' convenience does not significantly tip the balance one way or the other.

  D. Convenience of Witnesses

  The convenience of witnesses is the most important factor in deciding a motion to transfer. Kiss My Face Corp. v. Bunting, 2003 WL 22244587, at *2 (S.D.N.Y. Sept. 30, 2003). Defendant's witness list includes eight individuals, five of whom are employees of Defendant at its offices in Illinois. The remaining three witnesses are former employees of Defendant. Defendant terminated all three of them and expects that they may need to be subpoenaed in order to procure their testimony. (See Affidavit of Sharon Bowerman ("Bowerman Aff.") at 4.) Two of those three witnesses are believed to live in the Northern District of Illinois; the only witness that does not reside in Illinois lives in Michigan. The convenience of Defendant's witnesses thus counsels in favor of transferring venue. Plaintiff has not identified any witnesses that he intends to call for whom this district would be more convenient.

  Plaintiff has argued that the witnesses whom Defendant claims will be inconvenienced by travel to New York will not offer material evidence, and thus should be discounted in the analysis. Defendant's witnesses are: Michael Johnston, Chief Executive Officer and President; Sharon Bowerman, Defendant's Director of Human Resources; Randy Arndorfer, Vice President of Operations; Bryce Bohr, Arndorfer's subordinate; Lisa Hall, Vice President of Sales; and Fran Coursey, Dawn Galaska, and Kathleen Hemphill, all former employees of Defendant. Plaintiff contends that only Johnston and Plaintiff himself will actually testify at trial. However, Defendant has submitted an affidavit from Ms. Bowerman explaining the issues on which all the others also will likely testify. Page 6

  Both Johnston and Bowerman would most likely provide material testimony. Johnston fired Plaintiff, and his reasons for doing so go to the crux of the dispute. Bowerman would testify regarding a loan that Defendant claims Plaintiff pressured her to make, which is material to Defendant's defense and counterclaim. (See Bowerman Aff., at 2.) Defendant also states that Arndorfer and Bohr would testify "about plaintiff's requests to Bohr for confidential information regarding defendant's production costs." (Id. at 3.) Such testimony would be material to Defendant's argument that Plaintiff violated his duties as an employee by planning a competing venture.

  Defendant asserts that Hall, Coursey, Galaska, and Hemphill would all testify regarding Plaintiffs comments at a going-away dinner in his honor. (Id. at 3-4.) Because that dinner occurred after he was terminated, Plaintiff argues that their testimony would not be material to whether Plaintiff was planning a competing venture, and violating his duties to Defendant while in Defendant's employ. Ms. Bowerman's affidavit submitted in support of Defendant's motion states that Hall, Coursey, Galaska, and Hemphill attended the dinner at which "plaintiff made statements about competing with defendant." (Id. at 3.) Although Plaintiff argues that his statements at the dinner did not concern his plans while he still worked for Defendant, the Court cannot conclude that such statements are not material to Defendant's case. The Court has not found, nor has Plaintiff provided, any authority for the proposition that the Court must search the record to determine whether those witnesses actually possess the knowledge that Defendant states, through Bowerman's sworn affidavit, that they do. Defendant has the burden of identifying "key witnesses to be called along with a general description of the substance of their testimony." Leasing Servs. Corp. v. Patterson Enters., Ltd., 633 F. Supp. 282, 284 (S.D.N.Y. Page 7 1986). Defendant, through Ms. Bowerman's affidavit, has met this burden.

  Additionally, Plaintiffs arguments regarding the witnesses' testimony is contradicted by his answers to Defendant's interrogatories, in which he stated that six of the eight witnesses that Defendant intends to call were "believed to possess knowledge relevant to the allegations pleaded in the Complaint," or "relevant to the . . . defenses and counterclaim pleaded in the Answer." (Plaintiffs Response to Interrogatories, Defendant's Reply Affidavit, Exhibit 2.) Plaintiff cannot first claim that these individuals possess material knowledge and now tell the Court that their testimony would be immaterial to the allegations in the pleadings. Therefore, this factor weighs in favor of transfer.

  E. Availability of Process

  As stated above, two of Defendant's three nonparty witnesses could be compelled to testify in the Norther District of Illinois. Process is not likely to be available for these two witnesses in New York. See Fed.R.Civ.P. 45(b)(2). Plaintiff has not identified any witnesses for whom the subpoena power of this Court would be necessary.

  F. Location of Physical Evidence

  Neither party has raised the issue of physical evidence in favor of, or in opposition to, transferring venue. Thus, this factor is not applicable to this case.

  G. Courts' Familiarity With Applicable Law

  Defendant claims that resolution of this case will, in part, turn on application of Illinois state law, with which the federal court in Chicago is more familiar. Plaintiff responds that the case involves a one-page contract and the right to attorney's fees under the Illinois wage laws. But Defendant also contends that it will argue in defense that Plaintiff committed willful Page 8 misconduct that resulted in the loss of severance payments, and that this issue involves "Illinois law concerning contracts, labor law, and breach of fiduciary duty." (Defendant's Reply Memorandum of Law, at 6 n.3.) A judge sitting in the Northern District of Illinois will be more familiar with Illinois state contract and labor law, no matter how simple the legal issues may be. Therefore, this factor also favors transfer of venue.

  H. Interests of Justice and Trial Efficiency

  Finally, "a district court has discretion to transfer an action to where the trial would best be expedient and just." In re Nematron Corp. Sec. Litig., 30 F. Supp.2d 397, 399 (S.D.N.Y. 1998). Apart from the considerations already discussed, the Court does not find any additional arguments in the interest of justice or efficiency that would dissuade it from transferring this case. The balance of factors weighs in Defendant's favor and thus venue should be transferred to the Northern District of Illinois.

  For the foregoing reasons, Defendant's motion for a change of venue is GRANTED. The Clerk of the Court is directed to remove this case from the Court's active docket; any pending motions are moot.


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