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National Fuel Gas Co. v. U.S. Energy Savings Corp.

June 11, 2008

NATIONAL FUEL GAS COMPANY, AND NATIONAL FUEL GAS DISTRIBUTION CORPORATION, PLAINTIFFS,
v.
U.S. ENERGY SAVINGS CORPORATION, DEFENDANT.



The opinion of the court was delivered by: Leslie G. Foschio United States Magistrate Judge

DECISION and ORDER

JURISDICTION

This action was referred to the undersigned by Honorable Richard J. Arcara on November 21, 2007, for all pretrial matters. The matter is presently before the undersigned on Defendant's motion to change venue (Doc. No. 21), filed February 22, 2008.

BACKGROUND and FACTS*fn1

Plaintiffs National Fuel Gas Company ("National Fuel"), and National Fuel Gas Distribution Corporation ("National Fuel Distribution") (together, "Plaintiffs"), commenced this action on July 5, 2007, alleging trademark infringement and unfair competition in violation of the Lanham Act, 15 U.S.C. § 1051 et seq., as well as pendent state claims for trademark infringement, unfair competition, injury to business reputation, and false advertising under New York law. National Fuel is engaged in the business of natural gas storage, transmission, sales, production and distribution, and holds the registered service mark "National Fuel" (registration # 3019335) ("the mark"), through the United States Patent and Trademark Office. National Fuel Distribution, a subsidiary of National Fuel, a licensed public utility for the distribution and sale of natural gas, has delivered natural gas and services to more than 700,000 customers in western New York and northwestern Pennsylvania for more than thirty years.

Plaintiffs allege Defendant U.S. Energy Savings Corporation ("U.S. Energy" or "Defendant"), exploited National Fuel's goodwill and infringed on National Fuel's trademark by unlawfully using National Fuel's service mark to lure National Fuel Distribution customers into applying for Defendant's services using unfair competition practices. Specifically, Plaintiffs claim that Defendant and its sales representatives engaged in deceptive door-to-door sales practices and canvassing tactics in Cheektowaga, a suburban township, and in downtown Buffalo in front of National Fuel's offices, including wearing clothing bearing National Fuel's mark, and using National Fuel's name to elicit information from National Fuel Distribution customers so as to deceptively register National Fuel's customers for Defendant's long-term fixed-price natural gas supply programs. Plaintiffs maintain they first learned of Defendant's alleged unlawful practices in the Spring of 2007 when National Fuel Distribution began receiving numerous complaints from National Fuel Distribution customers that Defendant's representatives were claiming either to be National Fuel Distribution employees, or were in some way affiliated with National Gas Distribution. Plaintiffs maintain Defendant's alleged deceptive solicitation tactics have caused confusion among National Fuel Distribution customers, and serious and irreparable harm to Plaintiffs.

Defendant's answer (Doc. No. 4), was filed November 19, 2007.*fn2 On February 22, 2008, Defendant filed the instant motion (Doc. No. 21) ("Defendant's motion"), seeking to change venue from the Western District of New York - Buffalo Division, to the Western District of New York - Rochester Division, and New York Energy Savings Corp.'s Memorandum of Law in Support of Its Motion to Transfer Venue (Doc. No. 23) ("Defendant's Original Memorandum"), attached to which are Exhibits A through C ("Defendant's Exh(s). __"). On March 7, 2008, Defendant filed a motion (Doc. No. 31) ("Motion for Leave to File"), seeking leave to file an amended memorandum of law in support of Defendant's motion, along with the proposed New York Energy Savings Corp.'s Corrected Memorandum of Law in Support of Its Motion to Transfer Venue (Doc. No. 32) ("Defendant's Corrected Memorandum"). According to Defendant, the proposed amendments corrected only "a minor misstatement concerning U.S. Energy's principal place of business as well as a few minor typos," but contained no substantive changes, nor any new factual allegations or arguments.*fn3 Motion for Leave to File, ¶¶ 1-2. By Text Order entered March 11, 2008 (Doc. No. 33), the undersigned granted Defendant's Motion for Leave to File.

In opposition to Defendant's motion, Plaintiffs filed on March 21, 2008, the Declaration of Kenneth W. Africano, Esq. (Doc. No. 34) ("Africano Declaration"), and Plaintiff's Memorandum of Law in Opposition to Defendant's Motion to Transfer Venue (Doc. No. 35) ("Plaintiffs' Memorandum"). In further support of Defendant's motion, Defendant filed on March 27, 2008, New York Energy Savings Corp.'s Reply in Support of Its Motion to Transfer Venue (Doc. No. 39) ("Defendant's Reply"). Following oral argument, held on April 2, 2008 (Doc. No. 40), the undersigned reserved decision.

Based on the following, Defendant's motion is DENIED.

DISCUSSION

Defendant seeks to transfer venue from the Buffalo Division of the Western District of New York to the Rochester Division of the same district because negative publicity within the Buffalo Division makes it "virtually impossible for U.S. Energy to obtain a fair trial in the Buffalo Division of the Western District." Defendant's Memorandum at 3-4. According to Defendant, local print and television media outlets in Buffalo have published stories about Plaintiffs' customers complaining of being "rippedoff" when savings on natural gas supplies promised by Defendant's representatives never materialized. Defendant's Memorandum at 2-3 (citing Defendant's Exh. A). The City of Hornell, New York recently, through its web-site, advised its residents to report any contact by U.S. Energy representatives and to refrain from engaging in any business with Defendant pending an investigation by New York's Attorney General. Id. at 3 (citing Defendant's Exh. B). Defendant maintains Plaintiffs have repeatedly made statements to its "vast customer base" in Buffalo, New York and its vicinity, numbering more than 700,000 customers, disparaging U.S. Energy, and advising customers that U.S. Energy's natural gas fixed-price program is a "scam" and requesting that any attempted solicitations by U.S. Energy be reported. Id. at 3. According to Defendant, because Plaintiffs have a 95% share of Buffalo's natural gas supply market, such statements would necessarily taint any jury pool from the Buffalo Division, making if "virtually impossible" for Defendant to obtain a fair trial. Id. at 3-4. Accordingly, Defendant seeks to change the venue for this action to the Rochester Division.*fn4 Id.

Plaintiffs argue in opposition to Defendant's motion that Defendant has failed to establish that a venue transfer to the Rochester Division is in the best interests to this case because Defendants have not established, as required, both that venue would have been proper in the transferee division, and that such a transfer will serve the convenience of the parties and witnesses and promote the interest of justice. Plaintiff's Memorandum at 1-2. In further support of Defendant's motion, Defendant asserts that because Defendant seeks only a transfer of venue between two divisions within the same district, the considerations governing a transfer between districts do not apply. Defendant's Reply at 2. Defendant further contends that Plaintiffs have failed to distinguish the instant case from the cases Defendant cites in support of the transfer request. Id.

According to 28 U.S.C. § 1404 ("§ 1404"), "[f]or the convenience of the parties and witnesses, in the interest of justice, a district court may transfer any civil action to any other division or district where it might have been brought." 28 U.S.C. § 1404(a) (underlining added). The determination whether to grant a motion to transfer under § 1404 is within the broad discretion of the district court. Van Dusen v. Barrack, 376 U.S. 612, 622 (1964); 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)); and Filmline (Cross Country) Productions, Inc., v. United Artists Corp., 865 F.2d 513, 520 (2d Cir. 1989). Section 1404(a) directs the court to conduct an "individualized, case-by-case consideration of convenience and fairness." Van Dusen, 376 U.S. at 622.

The court must consider a variety of factors in determining whether the balance of conveniences and interests weighs in favor of a trial in the proposed transferee forum, including: (1) convenience of the parties; (2) convenience of the witnesses; (3) availability of process to compel the presence of unwilling witnesses; (4) access to sources of proof; (5) where the events at issue took place; (6) where the case can be more expeditiously and inexpensively tried; (7) remoteness of the forum from the situs of the event; and (8) the forum court's need to rely on foreign law. Blanco v. Banco Industrial de Venezuela, S.A., 997 F.2d 974, 980 (2d Cir. 1993) (citing Gulf Oil Corp. v. Gilbert, 330 U.S. 501, 508-09 (1947)) (the "Gilbert factors"). Here, because Defendant only seeks a transfer between divisions within the same district, there is no need to consider the Eighth Gilbert factor. The plaintiff's choice of forum should also be considered on a motion to transfer venue, and the plaintiff's choice of form will be respected when the requested transfer would merely shift the inconvenience from one party to another. Carruthers v. Amtrak, 1995 WL 378544, ...


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