United States District Court, S.D. New York
August 17, 2005.
INDIAN HARBOR INSURANCE COMPANY, and THE TRUSTEES OF THE UNIVERSITY OF PENNSYLVANIA, Plaintiffs,
FACTORY MUTUAL INSURANCE COMPANY d/b/a FM GLOBAL INSURANCE COMPANY, Defendant.
The opinion of the court was delivered by: PETER LEISURE, District Judge
OPINION AND ORDER
Plaintiffs, The Trustees of the University of Pennsylvania
("Penn") and Indian Harbor Insurance Company ("Indian Harbor"),
bring this action for declaratory judgment, pursuant to
28 U.S.C. § 2201, against defendant Factory Mutual Insurance Company d/b/a
FM Global ("FM"). Plaintiffs jointly seek a declaration that an
insurance policy issued by FM to Penn provides coverage for
damages Penn sustained at its veterinary hospital. Indian Harbor
further seeks a judgment declaring that its own policy with Penn
covers only those damages in excess of those covered by the FM
policy or, in the alternative, that Indian Harbor's obligation
should be apportioned based on the respective policy limits of
the Indian Harbor and FM policies.
Defendant FM filed the instant motion to transfer venue to the
Eastern District of Pennsylvania, pursuant to
28 U.S.C. § 1404(a), on April 25, 2005. It argues that transfer would advance
the convenience of parties and witnesses as well as the interests
of justice. Plaintiffs Indian Harbor and Penn oppose the motion
and wish to remain in the Southern District of New York. For the
reasons that follow, the Court finds that FM has borne its
burden, and defendant's motion to transfer is granted.
Plaintiff, Penn, is a Pennsylvania not-for-profit corporation,
which owns the New Bolton Center Veterinary Hospital ("NBC")
located in Chester County, Pennsylvania. (Complaint ("Compl.") ¶¶
1,6.) Penn is insured by plaintiff Indian Harbor and defendant FM
under two separate insurance policies. (Id. ¶ 1.) Indian Harbor
is incorporated in North Dakota, but conducts insurance business
throughout the United States, including New York. (Id. ¶ 5.) FM
is incorporated and has its primary place of business in Rhode
Island, and conducts insurance business in New York. (Id. ¶ 7.) FM's policy insures Penn against all risk of property loss and
damages up to $1 billion, from July 1, 2003 to July 1, 2004.
(Id. ¶ 8.) The FM policy was negotiated, underwritten, issued
and serviced by Thomas Tarczali, a Connecticut-based Senior
Account Manager at FM. (Affidavit of Thomas E. Tarczali
("Tarczali Aff.") ¶ 2.) Tarczali negotiated the policy with Ian
Anderson, a Vice President at Marsh USA, Penn's insurance broker.
This occurred primarily in Connecticut, but Tarczali also met
with Andersen and Kenneth Hoffman, Penn's Director of Risk
Management and Insurance, in Pennsylvania. (Id. ¶ 3.) Tarczali
sent the binder that led to the issuance of the FM policy to
Hoffman in Pennsylvania on July 1, 2003, and issued the FM policy
in Connecticut and had it delivered to Marsh USA's New York
office on July 10, 2003. (Id. ¶ 4.)
Indian Harbor issued a Pollution and Remediation Legal
Liability Policy that provided coverage for Penn from July 1,
2003 to July 1, 2006. The Indian Harbor policy coverage was
limited to $2 million for each loss, remediation or legal defense
expenses, and to $6 million in the aggregate, with a self-insured
retention (akin to a deductible) of $50,000, and was to cover
loss in excess of that covered by any other valid and collectible
insurance policy. (Id. ¶ 9.) The Indian Harbor policy contains
a forum selection clause under which Penn and Indian Harbor agree
to resolve any dispute arising from the policy in New York State,
and submit to New York State law. (Affidavit of Nolan C.
Burkhouse, Esq. ("Burkhouse Aff.") at 11.)
In March 2004, a number of animals at the NBC fell victim to an
outbreak of Salmonella Newport which impacted several of NBC's
barns and its neo-natal care unit. (Compl. ¶¶ 10-11, 14.) NBC's
efforts to control the outbreak were unsuccessful, and Penn was
forced to close the center completely from May 2004 through
August 2004. (Id. ¶ 12.) In order to decontaminate the clinic,
NBC sandblasted its walls, repainted, removed semi-porous
materials, including mats and flooring, and undertook additional cleaning measures. (Id.
¶ 13.) Penn reported its claim to both insurers, asserting a loss
to property of $3 million, less any deductible or self-insured
retention, and seeking to recover cleanup costs and business
interruption expense. (Id. ¶¶ 15-16.) FM assigned Steven Gioia,
a Pennsylvania-based General Adjuster for the company, to assess
the Penn claim. (Affidavit of Steven A. Gioia ("Gioia Aff.") ¶
2.) Gioia traveled to the site and physically inspected the
By letter to Penn on December 1, 2004, Indian Harbor stated it
was prepared to cover Penn's loss in excess of that covered by
the FM policy. (Compl. ¶ 17, Ex. C.) However, on February 16,
2005, FM denied Penn's claim on the grounds that Penn failed to
show physical loss to property, and that the claimed loss fell
under the pollution exclusion in the FM policy. (Id. ¶ 18.) FM
also claimed that the Indian Harbor policy should apply before
the FM policy. (Id. ¶ 18, Ex. D.)
On March 4, 2005, Indian Harbor and Penn filed the instant suit
against FM seeking declaratory judgment that the FM policy (1)
provides valid and collectible insurance for Penn's loss up to $1
billion, subject to Penn's applicable deductible; (2) is
sufficient to cover Penn's loss; and, (3) must be exhausted
before the Indian Harbor policy applies. (Id. ¶ 19.) In the
alternative, Indian Harbor maintains that coverage should be
apportioned in accordance with the respective coverage limits of
the FM and Indian Harbor policies. (Id. ¶ 19.) FM now petitions
the Court for a transfer of venue to the Eastern District of
Pennsylvania under 28 U.S.C. § 1404(a), for the convenience of
parties and witnesses, and in the interest of justice. DISCUSSION
I. Transferring Venue
Title 28 United States Code Section 1404(a) provides that, "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."
28 U.S.C. 1404(a). The statute is purposed to prevent waste "`of
time, energy and money and to protect litigants, witnesses and
the public against unnecessary inconvenience and expense.'"
Generale Bank, New York Branch v. Wassel, 779 F. Supp. 310, 313
(1991) (Leisure, J.) (quoting Van Dusen v. Barrack,
376 U.S. 612, 616 (1964)).
Defendant-movant bears the burden of establishing that
plaintiffs' choice of forum is inappropriate. Factors Etc., Inc.
v. Pro Arts, Inc., 579 F.2d 215, 218 (2d Cir. 1978), cert.
denied, 440 U.S. 908 (1979) (citations omitted). Defendant must
establish that (1) the action is one that "might have been
brought" in the proposed transferee district,*fn1
28 U.S.C. § 1404(a), and (2) the transfer is appropriate given the
convenience of parties and witnesses and in the interest of
justice. See Royal Ins. Co. of Am. v. Tower Records, Inc.,
No. 02 Civ. 2612, 2002 WL 31385815, at *2 (S.D.N.Y. Oct. 22,
2002) (Leisure, J.); Lesser v. Camp Wildwood, No. 01 Civ. 4209,
2002 WL 1792039, at *2 (S.D.N.Y. Aug. 2, 2002); Reliance Ins.
Co. v. Six Star, Inc., 155 F. Supp. 2d 49, 56 (S.D.N.Y. 2001).
The moving party must "make a clear-cut showing that transfer is
in the best interests of the litigation." Miller v. Bombardier
Inc., No. 93 Civ. 0376, 1993 WL 378585, at *2 (S.D.N.Y. Sept.
23, 1993) (Leisure, J.) (citing Schieffelin & Co. v. Jack Co. of Boca, Inc., 725 F. Supp. 1314, 1321 (S.D.N.Y. 1989));
see also Factors Etc., 579 F.2d at 218. Movant must "name the
witnesses who will be appearing and describe their testimony so
that the court may measure the inconvenience caused by locating a
lawsuit in a particular forum." Schieffelin & Co.,
725 F. Supp. at 1321 (citing, inter alia, Factors, 579 F.2d at 218).
"[M]otions for transfer lie within the broad discretion of the
district court and are determined upon notions of convenience and
fairness on a case-by-case basis." In re Cuyahoga Equip. Corp.,
980 F.2d 110, 117 (2d Cir. 1992) (citing Stewart Org., Inc. v.
Ricoh Corp., 487 U.S. 22, 29 (1988)). "A court of appeals will
issue a writ of mandamus to correct a district court's
disposition of a section 1404 transfer motion for a clear abuse
of discretion." Warrick v. General Elec. Co., 70 F.3d 736, 740
(2d Cir. 1995).
The Court assesses the balance of convenience and the interest
of justice by weighing: (1) the convenience of witnesses; (2) the
location of relevant documents and the relative ease of access to
sources of proof;*fn2 (3) the convenience of the
parties;*fn3 (4) the locus of the operative facts; (5) the availability of process to compel attendance of
unwilling witnesses; (6) the relative means of the parties; (7) a
forum's familiarity with the governing law; (8) the weight
accorded a plaintiff's choice of forum; and (9) trial efficiency
and the interest of justice based on the totality of the
circumstances. See Posven, C.A., 303 F. Supp. 2d at 404;
Reliance Ins., 155 F. Supp. 2d at 56-57; Trehern v. OMI
Corp., No. 98 Civ. 0242, 1999 WL 47303, at *2 (S.D.N.Y. Feb. 1,
1999). "There is no rigid formula for balancing these factors and
no single one of them is determinative." Citigroup Inc. v. City
Holding Co., 97 F. Supp. 2d 549, 561 (S.D.N.Y. 2000) (citing S
& S Mach. Corp. v. Gen. Motors Corp., No. 93 Civ. 3237, 1994 WL
529867, at *7 (S.D.N.Y. Sept. 28, 1994)). "Instead, weighing the
balance `is essentially an equitable task' left to the Court's
discretion." Citigroup, 97 F. Supp. 2d at 561 (citing First
City Nat. Bank & Tr. Co. v. Simmons, 878 F.2d 76, 80 (2d Cir.
A. Convenience of Witnesses
To determine whether transfer is appropriate, the Court looks
to the "center of gravity of the litigation," as judged primarily
by the convenience of witnesses. Cuzzupoli v. Metro-North
Commuter R.R., No. 02 Civ. 7947, 2003 WL 21496879, at *3
(S.D.N.Y. June 30, 2003) (citation omitted). The convenience of
non-party witnesses is accorded more weight than that of party
witnesses. Royal & Sunalliance v. British Airways,
167 F. Supp. 2d 573, 577 (S.D.N.Y. 2001) (citing Nieves v. Am. Airlines,
700 F. Supp. 769, 773 (S.D.N.Y. 1988)).
Plaintiffs argue that the convenience of witnesses carries
little weight in this case because resolution of the dispute
between plaintiffs and defendant turns on a legal determination
of the extent to which, if at all, FM's policy covers Penn's
loss. (Pls.' Opp'n at 5.) Plaintiffs claim that, because most
insurance coverage disputes are decided as a matter of law on
motions for summary judgment, witness convenience is not an important factor.
(Id. citing Cont'l Ins. Cos. v. Wickes Cos., Inc., No. 90
Civ. 8215, 1991 WL 183771, at *3 (S.D.N.Y. Sept. 6, 1991).)
However, here the underlying issue is arguably a question of fact
as to whether the Salmonella outbreak constituted pollution such
that the damage it caused may be excluded from the FM policy. It
is clear that Penn and its employees on staff at the time believe
the damage was not caused by pollution; an assessment disputed by
FM and its on-site inspection conducted by Gioia. Resolution of
this dispute could, therefore, require witness testimony as to
the outbreak and its effects. See also Royal Ins., 2002 WL
31385815, at *5 (rejecting plaintiff's similar argument because
the convenience of witnesses was a "`crucial factor' supporting
the transfer of insurance contract interpretation disputes").
Thus, the convenience of specifically identified, material
witnesses is an important consideration here. See Factors,
579 F.2d at 218 (citations omitted) (A party seeking transfer "on
account of the convenience of witnesses under § 1404(a) . . .
must clearly specify the key witnesses to be called and must make
a general statement of what their testimony will cover.") The
Court considers only witnesses residing in the proposed
transferee district, the Eastern District of Pennsylvania.
Pilates, Inc. v. Pilates Inst., 891 F. Supp. 175, 183 (S.D.N.Y.
1995) (quoting Editorial Musical Latino Americana, S.A.,
829 F. Supp. 62, 66-67 (S.D.N.Y. 1993)).
At the time of FM's investigation, Penn supplied Gioia with the
names of veterinary doctors, researchers and administrators with
knowledge of the cause of the Salmonella outbreak. FM now claims
that these people are material witnesses in the instant dispute:
(1) Dr. Helen Aceto, NBC's Interim Biosecurity Officer; (2) Dr.
David M. Nunamaker, V.M.D., NBC's Chair of Clinical Studies; (3)
Dr. Barbara Dallap, NBC's Assistant Professor of Emergency
Medicine and Critical Care; (4) Bruce Rappoport, NBC's Director;
(5) Dr. Shelley Rankin, Ph.D., NBC's Assistant Professor and Clinical Epidemiologist; (6) Barry
Stupine, NBC's Associate Dean; (7) Erika Gross, an employee in
Penn's Risk Management Office in Pennsylvania; (8) Kenneth
Hoffman, same; (9) Joanna Zappala, a Pennsylvania-based employee
of Penn's insurance broker, Marsh USA; (10) and, Joseph
Latrechiano, same. (Gioia Aff. ¶¶ 3-4.)
1. Propriety of Considering Plaintiffs' Witnesses
FM has sufficiently identified and described the possible
testimony of ten Pennsylvania-based witnesses: Steven Gioia, FM's
General Adjustor, five NBC staffers, and two employees of Penn's
Office of Risk Management.*fn4 (Id. ¶¶ 1-3.) Seven of
these material witnesses are Penn employees, (Id. ¶ 3).
Consistent with their argument that this claim is to be decided
as a matter of law, plaintiffs do not directly designate these
individuals as their witnesses. (Hoffman Aff. ¶ 5). However,
plaintiffs advised the Court that the individuals named will be
made available and "may be called to testify in this case at
trial." (Id.) The Court therefore considers them plaintiffs'
witnesses for the purposes of its balancing test.
Several courts have held that a defendant cannot cite to the
inconvenience of plaintiff's witnesses in support of its motion
to transfer venue. See Williams v. Nat'l Hous. Exch. Inc.,
898 F. Supp. 157, 161 (S.D.N.Y 1995) (citation omitted); Levine
v. Arabian Am. Oil Co., No. 84 Civ. 2396, 1984 WL 1247, at *2
(S.D.N.Y. Nov. 16, 1984) (citations omitted). This District has
at times taken a broader approach to assessing witness
convenience where plaintiff chooses a forum other than its state of residence, and where the events
giving rise to the action did not occur in the forum state.
Cuzzupoli, 2003 WL 21496879, at *3 n. 1. However, Cuzzupoli
is distinguishable from the instant action because Cuzzupoli
evaluated plaintiff's physician-witnesses, stating they were
"characteristically reluctant to interrupt their practices to
appear at trials, even in the localities where they treat their
patients," and were notably "witnesses for whom participation in
these proceedings does not arise out of the usual course of their
business." 2003 WL 21496879, at *3, 6. By contrast, the
Salmonella investigation here was the responsibility of the Penn
and NBC staff. Moreover, all seven of plaintiffs' witnesses are
in Penn's control and will be made available for trial.
Accordingly the instant case does not provide the same
justification for considering plaintiffs' witnesses as did
Cuzzupoli, and the Court will not consider the materiality of
their testimony. As a result, the Court weighs only the
convenience of Gioia, FM's Pennsylvania-based claims adjuster.
2. Materiality of Gioia's Proposed Testimony
While "[c]ourts routinely transfer cases when the principal
events occurred, and the principal witnesses are located, in
another district," Cuzzupoli, 2003 WL 21496879, at *3
(citations and quotations omitted), only material witnesses are
afforded substantial weight in the balancing calculus. "When
weighing the convenience of the witnesses, courts must consider
the materiality, nature, and quality of each witness, not merely
the number of witnesses in each district." Royal & Sunalliance,
167 F. Supp. 2d at 577 (citation omitted).
FM argues that Gioia is material because he is "familiar with
the claim and coverage issues related to the claim." (Def.'s Mem.
at 15). Plaintiffs argue that Gioia is immaterial because the
matter should be decided on the law, maintaining that "this is an
insurance coverage matter about which there is little dispute
regarding the facts." (Pls.' Opp'n at 5.) Plaintiffs further assert that claims adjusters are generally considered by
the Courts in this District to be immaterial witnesses. (Pls.'
Opp'n at 6 (citing Mitsui Marine & Fire Ins. Co. v. Nankai
Travel Int'l Co., 245 F. Supp. 2d 523, 526 (S.D.N.Y. 2003);
Royal & Sunalliance, 167 F. Supp. 2d at 577-78; TM Claims,
143 F. Supp. 2d at 406).)
First, the Court notes that these cases are inapposite to
evaluating Gioia's testimony because they stand for the
proposition that, where the claims adjuster and witnesses are
geographically distinct, eye witness testimony trumps that of the
claims adjuster's evaluation of the cold record. Here, both the
claims adjuster and the eye witnesses reside in Pennsylvania.
Further, Gioia actually visited the NBC site, unlike the claims
adjusters in TM Claims Serv. and Royal & Sunalliance.
Second, it is clear to the Court that factual issues require
resolution in this litigation. Plaintiffs' assertion that the FM
policy provides "valid and collectible insurance for Penn's
loss." (Compl. ¶ 19) is directly at odds with FM's defense that
Penn failed to show physical loss to property outside of that
excluded from coverage under the FM policy's pollution exclusion.
(Defendant FM's Answer at 6.) FM disputes not only the legal
breadth of its policy coverage, but also the sufficiency of
Penn's claimed loss. This controversy turns, in part, on a
categorization of the loss at issue; an inherently factual
determination requiring the testimony of Penn and NBC staff
juxtaposed against Gioia's onsite analysis.
Thus, Gioia is a material witness and his convenience weighs in
favor of transfer.*fn5 B. Locus of the Operative Facts
"Where there is no material connection between the district and
the operative facts, . . . the interests of justice require the
transfer of [the] action." Manao Invests, 1997 WL 53200, at *2
(alteration in original) (quotation omitted). "When determining
the locus of operative facts in a declaratory judgment action
concerning the interpretation of an insurance policy contract,
this Court has considered where the insurance contract was made."
Royal Ins., 2002 WL 31385815, at *3-4 (holding that neither the
New York location of the terrorist attack giving rise to the
policyholder's claim nor the New York-based claims adjustor
rendered New York the locus of operative facts because New York
was not the site of the contract's execution).
Here, while it is unclear whether Pennsylvania is the locus of
operative facts, it is clear that New York is not, because: (1)
the FM policy was underwritten, negotiated, issued and serviced
in Connecticut, (Tarczali Aff. ¶¶ 1-2), and (2) the policy was
made either in Connecticut between Marsh and FM insurance
personnel (id. ¶ 3) or in Philadelphia, between FM and Penn
staff to whom FM issued the policy (id. ¶ 4). That FM also sent
the policy to Marsh's New York office as a courtesy (id.) is
insufficient to show the contract was created in New York.
Moreover, the policy clearly states that it was issued to the
Trustees of the University of Pennsylvania. (Compl. Ex. A.) FM
has demonstrated that its policy was not made in the Southern
District of New York, and that the policy was formed, at least in
part, in Pennsylvania. The locus of operative facts analysis
therefore favors transfer to Pennsylvania.
C. Plaintiffs' Forum Selection Power
Plaintiffs' choice of forum "is entitled to significant
consideration and will not be disturbed unless other factors
weigh strongly in favor of transfer." Royal & Sunalliance,
167 F. Supp. 2d at 576 (citing Warrick, 70 F.3d at 741). To
overcome the presumption in favor of plaintiffs, defendant must "make a clear showing that the
proposed transferee district is a more convenient one, and that
the interests of justice would be better served by a trial
there." Zangiacomi, 714 F. Supp. at 660 (quoting Schneider v.
Sears, 265 F. Supp. 257, 263 (S.D.N.Y. 1967)). "Where the
inconvenience to the parties and witnesses are evenly balanced,
the plaintiff is entitled to his choice of forum." Id. (quoting
Teachers Ins. & Annuity Ass'n of Am. v. Butler,
592 F. Supp. 1097, 1106 (S.D.N.Y. 1984)).
However, plaintiffs' chosen forum carries less weight when no
party resides in the forum nor is it the locus of operative
facts. See Chet Baker Enters., L.L.C. v. Fantasy, Inc.,
257 F. Supp. 2d 592, 597 (S.D.N.Y. 2002) (citing Dwyer v. Gen.
Motors Corp., 853 F. Supp. 690, 694 (S.D.N.Y. 1994)); Royal &
Sunalliance, 167 F. Supp. 2d at 576 ("[T]he weight accorded to a
plaintiff's choice of venue is significantly diminished . . .
where the operative facts have no connection to the chosen
district."); Eskofot A/S v. E.I. Du Pont De Nemours & Co.,
872 F. Supp. 81, 96 (S.D.N.Y. 1995) (Leisure, J.) (citing
Studiengesellschaft Kohle MBH v. Shell Oil Co., No. 93 Civ.
1868, 1993 WL 403340, at *4 (S.D.N.Y. Oct. 7, 1993)).
This precept is applicable to the instant action, where neither
Indian Harbor, Penn, nor FM reside in New York, and, while the
locus of operative facts is undefined, it is definitely not New
York. Plaintiffs argue that their choice of forum is entitled to
significant weight regardless of their residence. (Pls.' Opp'n at
15 (citing GPA Inc, 1994 WL 537017, at *3).) However, in GPA
Inc., the Court found that the parties had not yet established
whether contract negotiations occurred in New York, and weighted
that defendants maintained executive offices in New York. 1994 WL
537017, at *2-3. There is no such consideration here. Further,
plaintiffs' reliance on the forum selection clause in the Indian
Harbor policy is unavailing as it does not pertain to the instant
litigation seeking declaratory judgment as to FM's obligations
under the FM policy. The clause somewhat mitigates the appearance of forum shopping and
the "artificial quality" that causes the Court to afford
plaintiffs' forum choice less weight when there is a tenuous
relationship between plaintiffs and the forum. See
Bristol-Myers Squibb Co., 2003 WL 22888804, at *2. This
argument, too, is inapposite, however as the clause does not bind
FM, an unnamed, non-signatory to the Indian Harbor policy, to
litigate in the Southern District of New York. See Mellon
Stuart Co. v. N. River Ins. Co., No. 88 Civ. 4847, 1990 WL
13168, at *4 (S.D.N.Y. Feb. 8, 1990) (determining that a party
who was not a "claimant" as contemplated by the forum selection
clause in a bond agreement was not bound by the clause); Third
Ave. Trust v. SunTrust Bank, 163 F. Supp. 2d 215, 221 (S.D.N.Y.
2001) (requiring that a party have knowledge of the forum
selection clause to be bound by it). Plaintiffs attempt to
overcome this deficiency by couching their Complaint in terms of
a declaratory judgment regarding Indian Harbor's obligations
under its policy. This attempt falls short, however, as the
Complaint seeks declaratory judgment of Indian Harbor's
obligations only in relation to this Court's determination of
FM's obligations under the FM policy. It is not alleged that FM
has any obligation pursuant to the Indian Harbor policy, nor
would such an allegation be successful.
In sum, New York is neither Indian Harbor nor Penn's home
forum, nor is it the locus of operative facts, as discussed
supra Discussion Part I.B. Therefore, this Court will not give
great weight to plaintiffs' choice of forum.
D. Forum's Familiarity with Governing Law
If tried in the Southern District, the instant action will be
governed by New York State choice of law principles. Klaxon Co.
v. Stentor Elec. Mfg. Co., 313 U.S. 487, 496 (1941). New York
requires that the Court apply the law of the jurisdiction having
the most significant contacts with the dispute at issue. Royal
Ins. Co., 2002 WL 31385815, at *4 (citing Olin v. Ins. Co. of
N. Am., 743 F. Supp. 1044, 1048 (S.D.N.Y. 1990), aff'd,
929 F.2d 62 (2d Cir. 1991)). New York courts have considered several
factors in determining which state's law to apply in cases
involving insurance contracts, including: "(1) the location of
the insured risk; (2) the policyholder's principal place of
business; (3) where the policy was issued and delivered; (4) the
location of the broker placing the policy; (5) where the premiums
were paid; and (6) the insurer's place of business."
Transatlantic Reinsurance Co. v. Cont'l Ins. Co., No. 03 Civ.
3227, 2003 WL 22743829, at *5 (S.D.N.Y. Nov. 20, 2003).
Here, FM asserts Pennsylvania law will govern this dispute and
plaintiffs concede this is likely. However, plaintiffs claim that
a possible follow up dispute between plaintiffs will be governed
by New York law based on the forum selection clause in the Indian
Harbor policy. As stated above, this argument is a red herring as
no cross-claim is asserted between plaintiffs and thus, their
independent forum selection clause is irrelevant to this Court's
declaration of FM's obligations under the FM policy at issue.
Accordingly, while the Court does not have enough information on
the present record to determine whether Pennsylvania or
Connecticut law will govern, it is clear that New York law will
not. Therefore, the Eastern District of Pennsylvania will be as
familiar, and likely much more so, with the governing law than
the instant Court. See Mitsui Marine, 245 F. Supp. 2d at 527
("All federal courts are presumed to be fully capable of ruling
on nationally applicable legal principles.") (quoting TM
Claims, 143 F. Supp. 2d at 407).
E. Trial Efficiency and the Interest of Justice
The Court's consideration of whether transfer is in the
interest of justice is "based on the totality of the
circumstances," Mitsui Marine, 245 F. Supp. 2d at 527 (quoting
TM Claims, 143 F. Supp. 2d at 407), and "relates primarily to
issues of judicial economy," id. (citing Royal & Sunalliance,
167 F. Supp. 2d at 578). In support of its argument for transfer, FM points to the
relative congestion of the Eastern District of Pennsylvania and
Southern District of New York dockets. (Def.'s Mem. at 19; Wolf
Aff. ¶ 2.) "Although certainly not decisive, docket conditions or
calendar congestion of both the transferee and transferor
districts is a proper factor and is accorded some weight."
Miller, 1993 WL 378585, at *5. FM demonstrates that the average
time from filing to trial is 26.8 months in the Southern District
of New York, as compared to 16 months in the Eastern District of
Pennsylvania. (Wolf Aff. Exs. A, B.) This is a significant
difference, and therefore, the Court grants the appropriate
weight to the docket congestion factor.
FM also asks that the Court consider the "local interest in
having localized controversies decided at home." Sheet Metal
Workers' Nat. Pension Fund v. Gallagher, 669 F. Supp. 88, 92
(S.D.N.Y. 1987) (citing Gulf Oil Corp. v. Gilbert,
330 U.S. 501, 509 (1947)). In the instant case, the trial court must
dispose of a controversy arising in Pennsylvania, which will
determine the rights of a prominent Pennsylvania institution.
This is an inherently Pennsylvania-based claim, despite the
location of the insurer, as Pennsylvania is the locus of
operative facts and many of the potential witnesses reside in
Pennsylvania. See supra Discussion Parts I.A, B.
Moreover, plaintiffs do not offer witnesses, documents or any
other factors to counter the totality of factors demonstrating
that New York is the appropriate venue for this action. Thus, the
Court is not concerned that transfer will "switch the balance of
inconveniences from one side to the other," Stinnes Interoil,
Inc. v. Apex Oil Co., 604 F. Supp. 978, 983 (S.D.N.Y. 1985), as
plaintiffs articulate no inconvenience to litigating in
Pennsylvania. The only proposed inconvenience is the plaintiffs'
shared forum selection clause, which is irrelevant to FM's
obligations under the FM policy. See supra Discussion Part
I.D. For these reasons, the Court finds that, under the totality of
circumstances, transfer best serves the interest of justice.
II. Final Disposition
Because the locus of operative facts in the instant action lies
outside of the Southern District of New York and neither
plaintiff resides there, plaintiffs do not merit the Court's
presumption in favor of their choice of New York as the forum for
this litigation. The fact that the locus of operative facts
likely lies in Pennsylvania weighs strongly in favor of transfer.
Also in favor of transfer is the Eastern District of
Pennsylvania's familiarity with the anticipated governing law,
and the relative lightness of its docket as compared to the
Southern District of New York. Moreover, plaintiffs fail to
explain why, outside of a forum selection clause irrelevant to
the present litigation, the instant Court is the appropriate
venue or what inconvenience would be incurred by transfer to the
Eastern District of Pennsylvania. Based on the above, the Court
finds that FM has made a "clear-cut showing that transfer is in
the best interests of the litigation." Miller, 1993 WL 378585,
For the foregoing reasons, defendant FM's motion to transfer
venue to the Eastern District of Pennsylvania, pursuant to
28 U.S.C. § 1404, is hereby GRANTED.