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Nipponkoa Insurance Co., Ltd. v. Ceva Logistics

July 2, 2012


The opinion of the court was delivered by: Shira A. Scheindlin, U.S.D.J.


In June 2003, Toshiba American Information Systems ("Toshiba"), a California corporation with its principal place of business in California,*fn1 contracted with Eagle Global Logistics, LP ("EGL") for portal-to-portal carriage of Toshiba products.*fn2 The duly executed Transportation Agreement included a Governing Law and Jurisdiction clause providing:

This Agreement shall be governed by and interpreted in accordance with the laws of the State of California, excluding California's conflict of law provisions that direct the application of another jurisdiction's laws. The parties expressly consent to the jurisdiction of the federal and state courts located in Orange County, California in the event of any litigation relating to this Section.*fn3 Although the Agreement originally did not cover ocean shipments from the Far East to Mexcio, it was eventually expanded to do so.*fn4 In 2007, EGL merged with TNT Logistics*fn5 to form CEVA Logistics, U.S., Inc.*fn6 and CEVA Freight LLC*fn7 (collectively, "CEVA"), and CEVA assumed EGL's obligations under the Transportation Agreement.*fn8 CEVA has an office in Torrance, California, that handles, inter alia, business relating to the Agreement.*fn9

The events giving rise to this action are scattered across the globe. The plaintiff, Nipponkoa Insurance Co., Ltd., is a Japanese corporation that insures Toshiba against damage and loss of cargo, and now brings a subrogated action for the costs it incurred in paying out on that insurance policy. Nipponkoa's complaint centers on a shipment of laptop computers stolen in 2011. CEVA was transporting the laptops for Toshiba from Shanghai, China to Mexico City, Mexico, pursuant to the Transportation Agreement.*fn10 The laptops were stolen from a truck in Mexico while under the care of one of CEVA's Mexican subcontractors.*fn11 Trying this case would likely require testimony from citizens of China, Japan, Mexico, California and Texas.*fn12 In short, this is a truly international case with no obvious home forum.

Nipponkoa's various theories under which it may recover include CEVA's alleged failure to procure insurance payable to Nipponkoa as required by the Transportation Agreement.*fn13 Such an omission is presumably attributable to the California office that managed CEVA's business in relation to the Agreement.*fn14

None of the claims relate to any activity in New York by any entity.

Section 1404(a) of Title 28 of the United States Code provides that "[f]or 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." The district court has broad discretion to decide motions to transfer, and should do so upon determinations of "convenience and fairness on a case-by-case basis."*fn15 Transfer motions must satisfy two elements: "First, the transferee court must be able to exercise jurisdiction over the parties and must be an appropriate venue for the action; second, the balance of convenience and justice must favor transfer."*fn16 Though courts typically grant section 1404(a) transfers on motions by defendants, a plaintiff "is not precluded from seeking transfer even though it had the original choice of forum."*fn17 Such motions should not be treated differently than those brought by defendants: transfer is permissible if it "would be in the interest of justice."*fn18

In deciding transfer motions, a non-exclusive list of factors to consider includes:

(1) the plaintiff's choice of forum, (2) the convenience of witnesses, (3) the location of relevant documents and ease of access to sources of proof, (4) the convenience of the parties, (5) the locus of operative facts, (6) availability of process to compel the attendance of unwilling witnesses, (7) the relative means of the parties, (8) the forum's familiarity with the governing law, and (9) trial efficiency and the interest of justice, based on the totality of the circumstances.*fn19

No individual factor is dispositive and a court has discretion to weigh each factor in its efforts to reach a fair result.*fn20

The facts here compel transfer, as Nipponkoa could have originally brought this action in the Central District of California. Analysis of the fairness factors yields an obvious result: California, not New York, is the appropriate forum for this action.

First, the California district court can exercise jurisdiction over the parties and is an appropriate venue for the action. The parties expressly agreed to jurisdiction in the Central District of California in the Transportation Agreement's Governing Law and Jurisdiction clause.*fn21 The Central District is an appropriate venue as well, given that CEVA has an office in the District that is directly implicated in this action.*fn22 CEVA correctly argues that, because the Jurisdiction clause is permissive,*fn23 CEVA may prevail on a forum non conveniens motion in California.*fn24 However, "[t]he principle of forum non conveniens is simply that a court may resist imposition upon its jurisdiction even when jurisdiction is authorized by the letter of a general venue statute."*fn25 Whether the Central District of California chooses to resist imposition on its jurisdiction is for that court to decide.*fn26 This Court need only determine if the action originally "might have been brought" in the Central District of California.*fn27 For the reasons stated above, Nipponkoa could have brought this action in the Central District of California.

Second, the balance of convenience to the parties favors transfer. Though Nipponkoa originally chose a New York forum, it has stated that the Central District of California is its second choice of forum.*fn28 Further, Nipponkoa acknowledges that neither forum is especially more convenient than the other, as it has a large affiliated office in each district, and regularly litigates in both.*fn29 The Central District should also be more convenient to CEVA, given that it maintains an office in that district.*fn30

Third, the convenience and availability of evidence and witness testimony counsels in favor of transfer. Letters rogatory are as available to California courts as they are to New York courts.*fn31 Similarly, California has as much access as New York does to the "advances in modern telecommunications and jet travel" for transport of witnesses and documents to the trial forum.*fn32 To the extent witnesses from Japan, ...

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