The opinion of the court was delivered by: GEORGE DANIELS, District Judge
Plaintiff Patrick J. Lynch, as trustee of the Health and Welfare Fund
of the Patrolmen's Benevolent Association of the City of New York ("PBA")
and the Retiree Health and Welfare Fund of the PBA (collectively, the
"Funds") brings this suit alleging breach of fiduciary duty in violation
of the Employee Retirement Income Security Act ("ERISA"),
29 U.S.C. § 1001 et. seq. and common law. Defendants moved to transfer the
instant action to the Eastern District of Missouri pursuant to
28 U.S.C. § 1404(a). For the reasons stated below, defendants' motion to
transfer the case to the Eastern District of Missouri is denied.
Plaintiff Patrick Lynch, the Trustee for the Funds of the PBA, retained
defendant National Prescription Administrators ("NPA"), headquartered in
East Hanover, New Jersey, as its Pharmacy Benefit Manager ("PBM") from
1981 to August 2002. In this capacity, NPA worked with prescription drug
plan sponsors, insurance companies and/or third party administrators to
facilitate the supply of prescription drugs to participants whose plans
provide such benefits. Defendant Express Scripts, Inc. ("ESI"), also a
PBM, acquired NPA in April 2002 and served as
the Funds' PBM from April until August 2002. In his complaint,
plaintiff alleges that NPA and ESI breached their fiduciary duty under
ERISA and under common law by benefitting from various "pricing spreads"
and "kickbacks" from the drug manufacturers. Complaint at 2, ¶¶ 3, 4.
According to plaintiff, these activities allowed defendants to "enrich
themselves at the expense of the [Funds]" by receiving discounts and
rebates from drug manufacturers which defendants then converted for their
benefit.*fn1 Plaintiff further alleges that unnamed drug manufacturer
defendants aided and abetted NPA and ESI in breaching their fiduciary
Under 28 U.S.C. § 1404(a), "[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." This statute gives district courts discretion to transfer cases
according to "an individualized, case-by-case consideration of
convenience and fairness." Stewart Organization. Inc. v. Ricoh
Corp., 487 U.S. 22, 29, 108 S.Ct. 2239, 101 L.Ed.2d 22 (1988).
The inquiry on a motion to transfer is twofold.
The court must first determine whether the action
sought to be transferred is one that `might have
been brought' in the transferee court. Second, the
court must determine whether, considering the
`convenience of parties and witnesses' and the
interest of justice, a transfer is appropriate.
Wilshire Credit Corp. v. Barrett Capital Management
Corp., 976 F. Supp. 174 (W.D.N.Y. 1997). Plaintiff does not dispute
that the present action could have been brought in the Eastern District
of Missouri, as defendant ESI's principal place of business is located
within that district in St. Louis, Missouri.
In deciding the appropriate choice of forum, courts have looked to both
the "`private interest factors' affecting the convenience of the
litigants" and the "`public interest factors'
affecting the convenience of the forum." Piper Aircraft Co. v.
Reyno, 454 U.S. 235
, 241, 102 S.Ct. 252, 258, 70 L.Ed.2d 419 (1981)
The private interest factors include:
(1) the convenience of witnesses; (2) the location
of relevant documents and relative ease of access
to sources of proof; (3) the convenience of the
parties; (4) the locus of operative facts; (5) the
availability of process to compel the attendance
of unwilling witnesses; (6) the relative means of
the parties; (7) the forum's familiarity with the
governing law; (8) the weight accorded the
plaintiffs choice of forum; and (9) trial
efficiency and the interest of justice, based on
the totality of the circumstances.
MBCP Peerlogic LLC v. Critical Path, Inc., 2002 WL 31729626
at *3 (S.D.N.Y.2002) (citing Constitution Reins. Corp. v. Stonewall
Ins. Co., 872 F. Supp. 1247, 1250 (S.D.N.Y. 1995)). See also
Dwyer v. General Motors Corp., 853 F. Supp. 690, 692 (S.D.N.Y. 1994);
Gulf Oil Corp. v. Gilbert, 330 U.S. 501
, 508, 67 S.Ct. 839,
91 L.Ed. 1055 (1947). While courts are to consider the above factors, there
is "no rigid formula for balancing these factors and no single one of
them is determinative." Citigroup, Inc. v. City Holding Company and
City Nat'l Bank, 97 F. Supp.2d 549, 561 (S.D.N.Y.2000) (citations
omitted). In addition, the Court must defer to the plaintiffs choice of
forum unless the balance of convenience and justice weigh heavily in
favor of defendant's proposed forum. Id.; Toy Biz, Inc. v.
Century Corp. 990 F. Supp. at 330 (S.D.N.Y.1998); Jannus Group,
Inc. v. Independent Container. Inc., 1998 U.S. Dist. LEXIS 13106 *9
(S.D.N.Y. Aug. 24, 1998).
Defendants advance several theories in favor of transfer. They contend
that this case is related to Minshew v. ESI, a case presently
pending before the United States District Court for
the Eastern District of Missouri, and should therefore be
transferred in the interest of judicial economy. They also contend that
the majority of the witnesses and relevant documents are in the Eastern
District of Missouri. They further argue that in class actions like the
present case, the plaintiffs choice of forum is entitled to minimal
weight. Berman v. Informix Corp., 30 F. Supp.2d 653, 659
A. Convenience of the Witnesses
The first factor, the convenience of witnesses, is considered the
single most important factor in the analysis of whether a transfer should
be granted. Aerotel Ltd. v. Sprint Corp., 100 F. Supp.2d 189,
197 (S.D.N.Y. 2000). The moving party must clearly specify the key
witnesses to be called and must make a general statement of what their
testimony will cover. Factors Etc, v. Four Seasons Hotels.
Ltd., 579 F.2d 215. 218 (1978). Defendants contend that the location
of the primary witnesses favors transfer to the Eastern District of
Missouri. Defendants provide supporting affidavits naming seventeen
members of the ESI Senior Management Team in St. Louis as potential
witnesses, and state that the "management activities" of NPA have been
transferred to ESI in St. Louis. Cordes Affidavit ("Aff."), ¶¶ 1, 3-8;
Zimmerman Aff., ¶ 2. Although the number of witnesses named seem to
favor defendants' argument, "[determining] the convenience of a forum to
witnesses requires more than simply adding up the number of potential
witnesses in the alternative fora. The nature and importance of a
potential witness's testimony also inform the Court's determination."
Gaarrel v. NYLCare Health Plans, Inc. & NYLCare Health Plans of
the Mid-Atlantic, Inc., 1999 WL 459925 (S.D.N.Y.
1999) (citing Vaughn v. American Basketball Assn.,
419 F. Supp. 1274, 1276 (S.D.N.Y. 1976).
Defendants contend that most of NPA's senior employees are no longer
employed by ESI. They deny knowledge of any NPA witnesses in New York.
Despite the defendants'
contentions, plaintiff asserts that former NPA employees comprise
most of the key witnesses and that many of them continue to reside in the
New York New Jersey area.*fn3 Plaintiff further argues that NPA
continues to employ other key witnesses and is still located in East
Hanover, New Jersey, approximately twenty miles from this Court. Because
ESI headquarters are located in St. Louis, at least some records and
witnesses relevant to this case may be found in Missouri. However,
defendants have not established that convenience of the witnesses as a
whole will be increased through transfer of venue. The defendants fail to
consider that NPA, located in New Jersey, served as the pharmacy benefit
manager of the NYC PBA Funds for twenty years prior to its acquisition by
ESI. Moreover, although defendants argue that discovery and trial will be
costly, disruptive and will involve "high-level managers," they fail to
explain precisely in what manner its own employees would be
inconvenienced or their business operations disrupted. Memorandum in
Support of Defendants' Motion for Transfer Under 28 U.S.C. § 1404(a)
("Defendants' Brief) at 10-12. The convenience of the witnesses,
therefore, does not favor transfer of this case from this jurisdiction.
B. Location of Documents and Access to Sources of Proof
Courts have held that "[t]he location of documents factor is neutral
`[in] today's era of photocopying, fax machines and Federal Express,'"
Aerotel, Ltd. v. Sprint Corp., 100 F. Supp.2d 189, 197 n.2
(S.D.N.Y. 2000) (quoting Coker v. Bank of America, 984 F. Supp. 757,
766 (S.D.N.Y. 1997). Here, defendants argue that because ESI's
principal place of business is in St. Louis and NPA "records, practices,
and governance" have been shifted to ESI headquarters, the
cost to them in terms of "time, money and disruption of their
business operations, particularly in arranging for virtually all the
sources of proof in the case to be transported to New York" would far
outweigh the cost to plaintiff in attending trial in Missouri.
Defendants' Brief at 10-11. However, defendants do not specify the nature
and extent of relevant documents located in Missouri. They also fail to
demonstrate that the amount of physical evidence situated in Missouri is
so overwhelming that it is impractical and unduly burdensome to ship it
back to, New York. Moreover, ...