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Glaxosmithkline Biologicals, S.A. v. Hospira Worldwide, Inc.

United States District Court, Second Circuit

May 20, 2013

GLAXOSMITHKLINE BIOLOGICALS, S.A., Plaintiff,
v.
HOSPIRA WORLDWIDE, INC. and HOSPIRA, INC., Defendants.

MEMORANDUM AND ORDER

P. KEVIN CASTEL, District Judge.

Plaintiff GlaxoSmithKline Biologicals, S.A. ("GSK") is a Belgian pharmaceutical company engaged in the development of human vaccines. GSK brought suit against Illinois-based defendants Hospira Worldwide, Inc., a contract pharmaceutical manufacturer, and its parent company, Hospira, Inc. (together, "Hospira"). GSK alleges that defendants breached an agreement among the parties under which defendants were to manufacture plaintiff's influenza vaccine in Kansas. Defendants now move, under 28 U.S.C. § 1404(a), to transfer the case to the United States District Court for the Northern District of Illinois. In the alternative, defendants move to dismiss the complaint in part under Rule 12(b)(6), Fed.R.Civ.P. For the reasons set forth below, defendants' motion to transfer is granted. The Court declines to reach so much of the motion as seeks dismissal of the claims.

BACKGROUND

Plaintiff GSK, a Belgian corporation with its principal place of business in Rixensart, Belgium, is a global healthcare company that researches and develops vaccines for distribution around the world. (Compl. § 9.) Hospira, Inc., a Delaware corporation headquartered in Lake Forest, Illinois (approximately 40 miles north of Chicago), specializes in pharmaceutical delivery products. (Tran Decl. § 4.) Hospira, Inc.'s business includes the "One 2 One" contract manufacturing business, which it conducts through its wholly-owned subsidiary, Lake Forest-headquartered Hospira Worldwide, Inc. (Id. 5.)

According to the complaint, GSK and Hospira entered into a Toll Manufacturing Agreement (the "Agreement"), dated December 31, 2010, for the production and manufacture of an influenza vaccine to be sold throughout the United States. (Compl. § 15.) The Agreement was to remain in force until December 31, 2015. (Id.)

Under the Agreement, GSK would supply Hospira with the raw materials for the manufacture of a vaccine. (Id. § 16.) Hospira agreed to use the raw materials supplied by GSK to produce batches of the vaccine ("Validation Batches") that complied with the Agreement's quality requirements and that were otherwise acceptable to GSK in its sole discretion. (Id. § 17.) Hospira agreed that all Validation Batches would be ready for regulatory filing in 2011. (Id. § 19.) Hospira also agreed to manufacture the final vaccine product in compliance with the terms of the Agreement, good manufacturing practices, and a separately executed Quality Agreement (incorporated into the Agreement as a schedule). (Id. §§ 17, 20.)

GSK alleges that, despite its efforts to help Hospira meet its obligations under the Agreement, Hospira breached the Agreement by failing to produce, on schedule, Validation Batches and a final vaccine product that complied with the terms of the Agreement and were acceptable to GSK. (Id. §§ 21-29.) Among other things, GSK alleges that Hospira's product contained unacceptable inconsistencies, was adulterated with silicone, and did not adequately mitigate against contamination risks. (Id. § 22.) GSK also alleges that, in late March and early April of 2012, with more than three years before the end of the Agreement's term, Hospira unilaterally terminated the Agreement. (Id. §§ 30-32.)

DISCUSSION

Defendants seek to transfer the action to the Northern District of Illinois under 28 U.S.C. § 1404(a). Section 1404(a) 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 or to any district or division to which all parties have consented." 28 U.S.C. § 1404(a). Thus, "[d]eciding a § 1404(a) motion to transfer venue requires a two-part inquiry: first, whether the action to be transferred might have been brought in the transferee court; and second, whether considering the convenience of the parties and witnesses, and the interest of justice, a transfer is appropriate.'" AGCS Marine Ins. Co. v. Associated Gas & Oil Co., Ltd. , 775 F.Supp.2d 640, 645 (S.D.N.Y. 2011) (quoting Fuji Photo Film Co., Ltd. v. Lexar Media Inc. , 415 F.Supp.2d 370, 373 (S.D.N.Y. 2006)).

I. Propriety Of The Transferee Forum

As a threshold matter, venue would have been proper had this case been brought in the Northern District of Illinois in the first instance because both defendants reside in that district for venue purposes. (Tran Decl. §§ 4, 5.) See 28 U.S.C. § 1391(b)(1) ("A civil action may be brought in... a judicial district in which any defendant resides, if all defendants are residents of the State in which the district is located...."); see also 28 U.S.C. § 1391(c)(2), (d).

II. Factors Governing Transfer

The next question is whether "the convenience of parties and witnesses" and "the interest of justice" justify a transfer. 28 U.S.C. § 1404(a). "Among the factors to be considered in determining whether to grant a motion to transfer venue are, inter alia: (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, and (7) the relative means of the parties." New York Marine & Gen. Ins. Co. v. Lafarge N. Am., Inc. , 599 F.3d 102, 112 (2d Cir. 2010) (citation and quotation marks omitted). Other factors considered by district courts include "the forum's familiarity with the governing law" and "trial efficiency and the interests of justice." Everlast World's Boxing Headquarters Corp. v. Ringside, Inc., 12 Civ. 5297 (PAE), 2013 WL 788054, at *6 (S.D.N.Y. Mar. 4, 2013). The burden of demonstrating the desirability of transfer lies with the moving party, who must "make a clear and convincing showing that the balance of convenience favors [its] choice" of forum. Hubbell Inc. v. Pass & Seymour, Inc. , 883 F.Supp. 955, 962 (S.D.N.Y. 1995); see New York Marine & Gen. Ins. Co. v. Lafarge N. Am., Inc. , 599 F.3d 102, 114 (2d Cir. 2010) (noting that it is "appropriate that the district courts in our Circuit have consistently applied the clear and convincing evidence standard in determining whether to exercise discretion to grant a transfer motion"). "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).

As explained below, the Court concludes that defendants have carried their burden of demonstrating that transfer is appropriate. Although plaintiff's choice of forum would ordinarily be entitled to considerable deference, neither GSK nor the underlying facts has any meaningful connection to New York and transferring the action will significantly ease the burden of litigation on defendants while not materially increasing the burden on plaintiff. Perhaps most importantly, transferring the ...


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