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Marvel Entertainment, LLC v. Stephen Kimble

December 20, 2010

MARVEL ENTERTAINMENT, LLC, PLAINTIFF,
v.
STEPHEN KIMBLE DEFENDANT.



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

OPINION & ORDER

Plaintiff Marvel Entertainment, LLC ("Marvel") brings this action for declaratory judgment on an oral agreement it allegedly entered into with Defendant Stephen Kimble ("Kimble") relating to the rights to a toy that Kimble invented. The parties are engaged in a related dispute in the Tucson Division of the United States District Court for the District of Arizona. Kimble moves to transfer venue there pursuant to 28 U.S.C. § 1404, or, in the alternative, to dismiss. For the reasons described below, the motion to transfer is GRANTED.

FACTUAL AND PROCEDURAL BACKGROUND

Marvel is an international entertainment company whose business derives from super hero comic books and related products, including toys. Kimble is a toy inventor who developed a toy that shot aerosol string from a hand glove. Kimble brought his toy idea to a company called Toy Biz, Inc., which is Marvel's predecessor in interest. Toy Biz and Kimble entered into the "1990 Oral Agreement" whereby they agreed that if Kimble disclosed the idea, Toy Biz "would not use the ideas disclosed by [him] without first negotiating a reasonable royalty payment for their use." Kimble v. Marvel Enter., Inc., 692 F. Supp. 2d 1156, 1157-58 (D. Ariz. 2010). The idea was disclosed and Toy Biz developed and sold a toy, now called the "Web Blaster," which had a design similar to the one Kimble had created.*fn1

A dispute ensued and a suit filed by Kimble in 1997 in the District of Arizona resulted in a jury finding that an oral agreement had in fact been made and that Toy Biz had breached it; the jury awarded Kimble 3.5% of net product sales. See Kimble v. Toy Biz, Inc., 97 Civ. 557 (TUC) (Dec. 20, 2000). Both parties appealed. However, in 2001, Marvel, as successor in interest to Toy Biz, entered into a settlement agreement wherein Kimble sold the toy's patent to Marvel for $516,214.62 and 3% of future sales (the "2001 Settlement Agreement").

In 2008, following a recalculation of the royalty payments by Marvel, Kimble filed for breach of contract. The District Court for the District of Arizona ruled on summary judgment that, among other things, the 2001 Settlement Agreement's obligations would expire on May 25, 2010 but that fact issues remained concerning the parties' entitlement to proceeds from sales of improved Web Blasters and related products. See Kimble v. Marvel Enter., 692 F. Supp. 2d at 1159. Kimble moved to amend his complaint to argue that if the 2001 Settlement Agreement did not obligate Marvel to pay royalties beyond May 25, 2010, then the 1990 Oral Agreement did. Marvel opposed this motion, and the court denied leave to amend on grounds that the motion was untimely and futile. See Kimble v. Marvel Enter., Inc., No 08 Civ. 372 (DCB) (D. Ariz. Apr. 8, 2010).

The very next day, April 9, 2010, Marvel filed the present declaratory judgment action in this Court that seeks resolution of the effect of the 1990 Oral Agreement. On May 28, 2010, Kimble moved to transfer this action to the District of Arizona pursuant to 28 U.S.C. § 1404, or, in the alternative, to dismiss. Litigation in the Arizona action is ongoing. The action will be transferred to Arizona.

DISCUSSION

On a motion to transfer, the moving party must make a "clear and convincing showing" that transfer is proper by demonstrating that "(1) the action is one that might have been brought in the proposed transferee forum; and (2) the transfer promotes convenience and justice." Hershman v. UnumProvident Corp., 658 F. Supp. 2d 598, 600 (S.D.N.Y. 2009); 28 U.S.C. § 1404(a) (2006). "District courts have broad discretion in making determinations of convenience under Section 1404(a) and notions of convenience and fairness are considered on a case-by-case basis." D.H. Blair & Co., Inc. v. Gottdiener, 462 F.3d 95, 106 (2d Cir. 2006.

A district court may consider (1) the plaintiff's choice of forum, (2) the convenience of witnesses, (3) the location of relevant documents and relative ease of access to sources of proof, (4) the convenience of parties, (5) the locus of operative facts, (6) the availability of process to compel the attendance of unwilling witnesses, (7) the relative means of the parties, (8) a forum's familiarity with the governing law, and (9) trial efficiency and the interest of justice based on the totality of the circumstances. See, e.g., N.Y. Marine & Gen. Ins. Co. v. Lafarge N. Am., Inc., 599 F.3d 102, 112 (2d Cir. 2010); Hershman, 658 F. Supp. 2d at 600-601. "There is no rigid formula for balancing these factors and no single one of them is determinative." Hershman, 658 F. Supp. 2d at 601.

A. Whether the action might have been brought in the proposed transferee forum.

Marvel does not dispute that this action could have been brought in the United States District Court for the District of Arizona, and indeed venue is proper because the sole defendant resides in Arizona. See 28 U.S.C. § 1391(a); AIG Fin. Prods. Corp. v. Pub. Util. Dist. No. 1 of Snohomish County, Wash., 675 F. Supp. 2d 354, 368 (S.D.N.Y. 2009).

B. Whether the transfer promotes ...


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