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MATERA v. NATIVE EYEWEAR

February 10, 2005.

PASQUALE MATERA, Plaintiff,
v.
NATIVE EYEWEAR, INC., Defendant.



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

MEMORANDUM OF DECISION AND ORDER

This case, filed on July 6, 2004, based on diversity jurisdiction, involves allegations by the plaintiff Pasquale Matera ("Matera" or the "Plaintiff") that the defendant Native Eyewear, Inc. ("Native Eyewear" or the "Defendant") failed to honor its obligations under a written consulting agreement.

Presently before the Court is a motion by the Defendant pursuant to Federal Rule of Civil Procedure ("Fed.R.Civ.P.") 12(b)(3) to dismiss the complaint in its entirety for improper venue, or in the alternative, to transfer venue to the United States District Court for the Eastern District of Pennsylvania pursuant to 28 U.S.C. § 1404(a) or § 1406(a).

  I. BACKGROUND

  For purposes of a motion to dismiss for improper venue pursuant to Rule 12(b)(3), "the Court must accept the facts alleged in the complaint and construe all reasonable inferences in the plaintiff's favor." Fisher v. Hopkins, No. 02 Civ. 7077, 2003 WL 102845, at * 2 (S.D.N.Y. Jan. 9, 2003) (citations omitted).

  The Plaintiff, a designer in the field of sunglass products, was at all times relevant to this action, a resident of the County of Nassau, State of New York. The Defendant is a Pennsylvania corporation with its principal place of business in Huntington Valley, Pennsylvania. Native Eyewear is engaged in the business of manufacturing sunglass products and is the successor by merger to J.W. Envisions, Inc., which did business under the name "Ultimate Vision."

  On August 5, 1997, the Plaintiff and Ultimate Vision entered into a written consulting agreement (the "Agreement") pursuant to which the Plaintiff agreed to supply the Defendant with certain design and marketing services, including designs, packaging ideas, trade names, trademarks, logos and intellectual property assets concerning sunglass products (the "Assets"). In return, the Defendant agreed to pay the Plaintiff specified royalties on the sale of sunglass products incorporating the Plaintiff's designs. The Agreement also provided that Ultimate Vision had to pay certain royalties to Matera based upon the sale of all Matera designs. In addition, Ultimate Vision agreed to supply a statement of sales made and a description of the calculation used in determining the royalty amount due. Significant to the resolution of this motion, Article 9 of the Agreement contained a provision addressing the "Construction" of the Agreement. This section states:
The construction and performance of this Agreement shall be governed by the law of the Commonwealth of Pennsylvania, USA. In the event of litigation, the first forum for deciding issues of venue and jurisdiction shall be the U.S. District Court for the Eastern District of Pennsylvania.
Agreement Art. 9.

  The Plaintiff alleges that Native Eyewear breached the Agreement by failing to pay to the Plaintiff the full amount of the royalties due, and, also failing to furnish royalty statements for the calendar years 2001, 2002, 2003, and 2004 as provided for in the Agreement. The Plaintiff also seeks injunctive relief restraining the Defendant from, among other things, the distribution and/or sale of any products incorporating the Assets. In addition, the Plaintiff claims that as a shareholder of the Defendant's corporation, he is entitled to a proportionate distribution of the Defendant's taxable income. Finally, the complaint contains a cause of action for conversion.

  Less than one month after the Plaintiff filed the instant complaint, on July 26, 2004, the Defendant filed an action in the Eastern District of Pennsylvania alleging that Matera breached various provisions of the Agreement and also unlawfully disclosed certain confidential trade secrets.

  In support of its motion, the Defendant claims that this action should be dismissed for improper venue because the Plaintiff has not established that venue is proper under 28 U.S.C. § 1391 (a)(1) and (2). In the alternative, should the Court find that venue is proper in the Eastern District of New York, the Defendant argues that Article 9 of the Agreement mandates that venue be transferred to the Eastern District of Pennsylvania.

  Despite the abundance of case law setting forth the requirements to succeed on a motion to transfer venue the Defendant failed to submit any affidavit in support of their motion. See Modern Computer Corp. v. Ma, 862 F. Supp 938, 948 (E.D.N.Y. 1994) ("The movant must support the application with an affidavit containing detailed factual statements relevant to why the transferee forum is more convenient, including potential principal witnesses expected to be called and a general statement of the substance of their testimony."); see also Pall Corp. v. PTI Technologies, Inc., 992 F. Supp. 196, 198 (E.D.N.Y. 1998).

  Attached to its reply brief, the Defendant included affidavits setting forth, for the first time, additional facts and arguments supporting its motion to transfer venue. However, these affidavits and arguments will not be considered by the Court. Not only did the Court deny the Plaintiff the opportunity to submit a sur-reply to respond to the additional factual contentions, but arguments cannot be made for the first time in reply papers. See Knipe v. Skinner, et al., 999 F.2d 708, 711 (2d Cir. 1993) ("Arguments may not be made for the first time in a reply brief."). In addition, the Court notes that the Defendant's Reply Brief violated the Courts Individual Rules and Motion Practices as it contained in excess of 20 pages and had several footnotes. See Indiv. Motion Practices IV(B)(I) ("reply memoranda are limited to 10 pages . . . [and] shall not contain footnotes").

  II. DISCUSSION

  A. As to the Motion to Dismiss for Improper Venue

  Under Rule 12(b)(3) of the Federal Rules of Civil Procedure, a district court may dismiss an action based on improper venue. Upon such a motion, a court has the authority to dismiss an action pursuant to 28 U.S.C. § 1406(a), which provides in pertinent part that
The district court of a district in which is filed a case laying venue in the wrong division or district shall dismiss, or if it be in the interest of justice, transfer such case to any district or division in which it could have been brought.
28 U.S.C. § 1406(a) (emphasis added). The fact that a forum selection clause exists is not a relevant part of the analysis to determine whether venue is proper in the Eastern District of New York. GMAC Commercial Credit, LLC v. Dillard Department Stores, Inc., 198 F.R.D. 402, 405 (S.D.N.Y. 2001) (citing Stewart Organization, Inc. v. Ricoh Corp., 487 U.S.22, 28 n. 8, 108 S. Ct. 2239, 101 L. Ed. 2d 22 (1998)); see also Licensed Practical Nurses, Technicians & Health Care ...

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