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IDT Domestic Telecom, Inc. v. Estrella Telecom

March 19, 2010


The opinion of the court was delivered by: Hon. Harold Baer, Jr., District Judge


Plaintiff IDT Domestic Telecom, Inc. ("IDT" or "Plaintiff") filed its Complaint in this action against Estrella Telecom, Inc. ("Estrella" or "Defendant") in New York State Supreme Court on or about November 23, 2009, alleging claims of breach of contract, breach of the implied covenant of good faith and fair dealing, book account, account stated, unjust enrichment, and quantum meruit. Defendant timely removed the action to this Court on December 23, 2009. Defendant now moves to dismiss the Complaint under the doctrine of forum non conveniens, or alternatively, to have the action transferred to the Southern District of Florida under 28 U.S.C. § 1404. For the reasons set forth below, Defendant's motion is denied.


IDT is a Delaware corporation with its principal place of business in New Jersey. It is also authorized to do business in New York as a foreign business corporation. Estrella is a Florida corporation with its principal place of business in Florida. Both companies are suppliers of telecommunications services.

In 2005, IDT entered into a Service Agreement (or "Agreement") with Estrella, pursuant to which the two parties agreed to provide wholesale telecommunications services to each other, at rates set forth in the Agreement. Pl. Opp. Br. 2. The Agreement includes a "Jurisdiction" provision that states, "This Agreement and the relationship between the Parties hereto will be governed by the laws of the State of New York. Both Parties consent to said jurisdiction and venue in the courts of New York." Carey Decl., Ex. C (hereinafter, the "Agreement") at ¶ 8.7.

IDT argues that transferring this action to Florida would be inappropriate, as would dismissal for forum non conveniens. After weighing the factors for transfer under 28 U.S.C. § 1404, considering the rationales for dismissal on grounds of forum non conveniens, and in light of the forum selection clause in the Agreement, I agree.


A.The Motion to Transfer Pursuant to 28 U.S.C. § 1404

Under Section 1404(a), a district court has the authority to transfer a civil action to any other federal district court where it might have been brought "[f]or the convenience of the parties and witnesses, in the interest of justice." 28 U.S.C. § 1404(a). Section 1404(a) gives a district court discretion to adjudicate motions for transfer through individualized, case-by-case consideration of convenience and fairness. 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)).

Courts address the balance of convenience and the interests of justice by weighing (1) the plaintiff's choice of forum; (2) the convenience of the witnesses; (3) the location of relevant documents and the relative ease of access to sources of proof; (4) the convenience of the parties; (5) the locus of operative facts; (6) the availability of process to compel the attendance of unwilling witnesses; and (7) the relative means of the parties. D.H. Blair & Co., Inc. v. Gottdiener, 462 F.3d 95, 106-7 (2d. Cir. 2006). The presence of a forum selection clause is "a significant factor that figures centrally in the district court's calculus." Ricoh Corp., 487 U.S. at 29.

1.The Plaintiff's Choice of Forum

A plaintiff's choice of forum "is entitled to significant consideration and will not be disturbed unless other factors weigh strongly in favor of transfer." Royal & Sunalliance v. British Airways, 167 F.Supp.2d 573, 576 (S.D.N.Y.2001); see also Gulf Oil Corp. v. Gilbert, 330 U.S. 501, 508 (1947) ("[U]nless the balance is strongly in favor of the defendant, the plaintiff's choice of forum should rarely be disturbed."). To overcome this presumption, 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." Hershman v. UnumProvident Corp., 658 F.Supp.2d 598, 601 (S.D.N.Y. Sep. 25, 2009).

Plaintiff is headquartered near New York and licensed to do business in this state. It has chosen to litigate this case in New York, the forum that the parties consented to in the Service Agreement. Not only does the Agreement contain a forum selection clause that specifies that the parties "consent to jurisdiction and venue in the Courts of New York," it also provides that any arbitration of disputes would take place in New York.*fn1 Agreement ΒΆΒΆ 5.1 -- 5.2. When it entered into the agreement, Plaintiff contemplated resolving any contractual disputes in New York, and it ...

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