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O'Brien & Gere Inc. v. Barton Rands

July 20, 2007

O'BRIEN & GERE INC., OF NORTH AMERICA, PLAINTIFF,
v.
BARTON RANDS, LTD., A DIVISION OF CONSTELLATION BRANDS, INC., DEFENDANT.



The opinion of the court was delivered by: David G. Larimer United States District Judge

DECISION AND ORDER

O'Brien & Gere, Inc., of North America ("OGINA") filed this action against Barton Brands, Ltd. ("Barton Brands") for breach of contract. Currently before the Court is Barton Brands' motion to dismiss for lack of personal jurisdiction and improper venue, or, in the alternative, to transfer the action to the Western District of Kentucky. For the reasons discussed below, the motion is granted in part, and this action is transferred to the Western District of Kentucky.

BACKGROUND

Barton Brands is a Delaware corporation with its principal place of business in Chicago, Illinois, and is a subsidiary of Barton, Inc., which is also a Delaware corporation with its principal place of business in Chicago. Barton, Inc., in turn, is a subsidiary of Constellation Brands, Inc. ("Constellation Brands"), incorporated in Delaware with its headquarters located in Fairport, New York.

In November 2005, Barton Brands issued a request seeking proposals to design, fabricate and install a pollution control system ("baghouse system") on an existing coal-fired boiler at its distillery in Bardstown, Kentucky. OGINA, a Delaware corporation with its principal place of business in Syracuse, New York, submitted a proposal, which Barton Brands ultimately accepted, for a baghouse system to be installed at a price of roughly $1,251,000.

After accepting OGINA's proposal, Barton Brands issued a series of purchase orders for the baghouse system, two on February 2, 2006, for $100,000 and $275,000, respectively, and a third on March 20, 2006, for the remaining $875,650. Barton Brands made payments to OGINA on the purchase orders over the spring and summer of 2006 to a bank in Buffalo, New York, totaling about $1,126,000. As of today, about $125,000 of the contract price remains unpaid.

OGINA completed installation of the baghouse system in September 2006. In October and November of that year, Barton Brands experienced a series of four small fires in the baghouse system, resulting in an estimated $16,500 in damages. On December 5, 2006, a more serious fire rendered the boiler inoperable. A subsequent inspection by an independent consultant allegedly concluded that the inadequate design and construction of OGINA's baghouse system was the cause of the fires. OGINA denies any causal connection between its baghouse system and the fires, insisting instead that problems in Barton Brands' boiler caused the fires.

On January 31, 2007, OGINA filed its complaint in this action in New York State Supreme Court, Monroe County, alleging breach of contract based on Barton Brands' failure to pay the full contract price for the baghouse system. Barton Brands removed the complaint to this Court on February 20, and thereafter filed the pending motion to dismiss.

Several days earlier, on February 15, 2007, Barton Brands had filed suit in the United States District Court for the Western District of Kentucky against OGINA, alleging breach of contract, negligence and related claims, all related generally to the baghouse system fires.

On April 23, 2007, the District Court in Kentucky issued a decision denying OGINA's motion to dismiss or to stay that action, and directed OGINA to answer the complaint. OGINA filed an answer and counterclaim in the Kentucky action on May 15, 2007. Its counterclaim is by and large identical to the complaint filed in the case at bar.

DISCUSSION

Barton Brands moves to dismiss this action for lack of personal jurisdiction and improper venue, pursuant to Rules 12(b)(2) and 12(b)(3) of the Federal Rules of Civil Procedure. In the alternative, Barton Brands moves for an order transferring the case to the Western District of Kentucky pursuant either to 28 U.S.C. § 1406 (providing for transfer to cure improper venue) or § 1404 (discretionary transfer for the convenience of parties and witnesses).

"The question of personal jurisdiction, which goes to the court's power to exercise control over the parties, is typically decided in advance of venue, which is primarily a matter of choosing a convenient forum." Leroy v. Great Western United Corp., 443 U.S. 173, 180 (1979). There is no absolute requirement that the court address personal jurisdiction before venue, however, since "neither personal jurisdiction nor venue is fundamentally preliminary in the sense that subject matter is. ... Accordingly, when there is a sound prudential justification for doing so, ... a court may reverse the normal order of considering personal jurisdiction and venue." Id.

The motion before me now presents an instance of such "sound prudential justification" for considering the issue of venue before that of personal jurisdiction. First, plaintiff does not oppose a transfer of this action to Kentucky. In its brief in response to Barton Brands' motion, OGINA states that it "will not oppose the transfer of this action to the District Court for the Western District of Kentucky, in light of the assertions made by Barton as to the non-party witnesses located in Kentucky." Dkt. #8-2 at 11. See also ...


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