United States District Court, W.D. New York
Jerauld E. Brydges, Esq., Harter, Secrest and Emery, LLP, Rochester, NY, for Plaintiff.
Dennis M. Rothman, Esq., Lester Schwab Katz & Dwyer, LLP, New York, NY, for Defendant.
DECISION AND ORDER
CHARLES J. SIRAGUSA, District Judge.
This commercial contract case is before the Court on Defendant's motion to dismiss, filed on October 25, 2013, ECF No. 13. Defendant contends that this case is filed in the wrong venue and that the complaint fails to state a claim. Fed.R.Civ.P. 12(b)(3) & (6). Plaintiff filed a memorandum in opposition on November 26, 2013, ECF No. 15, and Defendant filed a reply memorandum on December 13, 2013, ECF No. 17. The Court heard oral argument on January 16, 2014. The parties thereafter unsuccessfully engaged in mediation. For the reasons stated below, the Court denies Defendant's motion.
The facts are taken from the complaint, filed on July 8, 2013, ECF No. 1. Although not attached to the complaint, the email correspondence and invoices exchanged by the parties are also considered by the Court as relied upon by OA-T-KA Milk Products Cooperative, Inc. ("OA-T-KA") in drafting the complaint. See Global Network Commons, Inc. v. City of New York, 458 F.3d 150, 156-57 (2d Cir. 2006) (quoting Chambers v. Time Warner, Inc., 282 F.3d 147, 153 (2d Cir. 2002)) ("a necessary prerequisite for that exception is that the plaintiff rel[y] on the terms and effect of [the] document in drafting the complaint...; mere notice or possession is not enough.'").
OA-T-KA and TIC Gums, Inc. ("TIC") have a history of commercial transactions dating to 2004. OA-T-KA "manufactures milk-based and other value added products... [including] a no-sugar added nutritional beverage for diabetics (the Product')." Compl. ¶ 6. TIC "manufactures texture and stabilization products for the food industry, including gum arabic." Id. ¶ 7. OA-T-KA purchased gum arabic from TIC beginning in 2004, and at that time, TIC fulfilled the orders with gum arabic manufactured in the United States. Beginning in August 2012, TIC began to fill orders with gum arabic manufactured in the United Kingdom. Compl. ¶¶ 8-10. OA-T-KA claims that the United Kingdom-manufactured gum arabic caused unsightly white particles and sedimentation in the Product. The Product was used mostly by hospital and nursing home patients through enteral feeding. Compl. ¶ 11. OA-T-KA claims that after an extensive investigation, it traced the cause of the problem to the United Kingdom manufactured gum arabic sold to it by TIC. Compl. ¶ 13. As a result of the deficiencies in the Product, OA-T-KA voluntarily recalled "hundreds of thousands of dollars worth of the affected Product...." Compl. ¶ 14. OA-T-KA seeks damages from TIC.
TIC, in its memorandum of law and reply memorandum, contends that the terms of the contract between it and OA-T-KA preclude jurisdiction other than in Maryland, that the terms limit the amount of damages to that which would be below the threshold for diversity jurisdiction in this Court, and that the complaint, in any event, fails to state a cause of action upon which relief can be granted.
STANDARD OF LAW
On a motion for improper venue, the burden is on the plaintiff to establish proper venue by a preponderance of the evidence. Since the Court will rely on pleadings and affidavits, OA-T-KA need only make a prima facie showing that venue is proper here. Gulf Ins. Co. v. Glasbrenner, 417 F.3d 353, 355 (2d Cir. 2005).
The general legal principles concerning motions under Rule ...