Royal & Sun Alliance Insurance, PLC v. Nippon Express USA, Inc.

Citations: 202 F. Supp. 3d 399; 2016 U.S. Dist. LEXIS 118310; 2016 WL 4523885Docket: 15 Civ. 7849 (VM)

Court: District Court, S.D. New York; August 18, 2016; Federal District Court

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Plaintiff Royal Sun Alliance Insurance, PLC (RSA) is suing defendants Nippon Express USA, Inc. (NEU) and Maersk Line A/S for breach of contract related to a shipment of temperature-sensitive reactive mix monomers, which was insured by RSA. RSA alleges that NEU accepted the shipment in good condition but failed to maintain the required temperatures during storage, resulting in damage. The shipment was then transferred to Maersk for transportation, with RSA claiming that Maersk also failed to fulfill its obligation to deliver the shipment in the same condition.

NEU filed a motion to transfer the case to the Northern District of Georgia, arguing that the relevant events and witnesses are located there, and that it would be more efficient to resolve the case in Georgia. In response, Maersk acknowledged the transfer motion but noted that the bill of lading stipulates exclusive jurisdiction in the Southern District of New York and that any disputes should be arbitrated there. Maersk agreed to waive arbitration if the case remains in New York but would retain the right to enforce arbitration if transferred.

RSA opposed the transfer, citing that key witnesses are in New York, many relevant events occurred there, and judicial economy favors keeping the case in New York due to the proximity to the end of the discovery schedule. NEU replied, asserting that the majority of significant events happened in Georgia and that the transfer motion was timely, attributing any delays to RSA.

The court ultimately denied NEU's motion to transfer the venue to Georgia, maintaining the case in the Southern District of New York.

A district court may transfer a civil action to another district or division for the convenience of parties and witnesses and in the interest of justice, as per 28 U.S.C. § 1404(a). The evaluation of a motion to transfer involves a two-part inquiry. First, the court assesses if the action could have been initiated in the proposed transferee forum. If so, it then evaluates whether the transfer is appropriate based on nine factors, including witness convenience, party convenience, document location, operative facts, and judicial economy. No single factor is decisive; however, the plaintiff's choice of forum generally receives significant weight unless the defendant demonstrates a compelling need for transfer.

In this case, the court first analyzed whether the action could be brought in the Northern District of Georgia. NEU is subject to personal jurisdiction there due to its operational presence, thus satisfying the first prong for NEU. However, while RSA's response suggests that the action against NEU could proceed in Georgia, it indicates that Maersk cannot be sued there. This lack of jurisdiction over Maersk means that transferring the action to Georgia would likely lead to divided proceedings.

Transfer of venue is being considered due to the possibility of filing the action in the Northern District of Georgia with respect to NEU. The court will evaluate nine factors to determine the appropriateness of the transfer, with the convenience of witnesses being the most critical. Non-party witnesses' convenience is prioritized over that of party witnesses. The moving party must specifically identify key witnesses and outline their expected testimonies to support a transfer motion. NEU has identified numerous witnesses in Exhibit A to its Motion, emphasizing that many are third parties residing near Atlanta. Notably, Christopher Small, a trucker involved in the shipment, is expected to provide crucial testimony regarding the shipment's handling, although he is based in South Carolina, he likely conducts business in Georgia. NEU also lists other non-party witnesses from various companies. In contrast, RSA provides its own list of witnesses, asserting that most relevant third-party witnesses are located in the New York metropolitan area, with party witnesses likely being based in New York due to the contracts and investigations occurring there. Nevertheless, the presence of significant non-party witnesses in the Northern District of Georgia leads to a conclusion that this factor favors transferring the case to that district.

Convenience to the parties is assessed through their principal places of business and office locations. In this case, RSA is primarily based in the UK but has an office in New York. NEU operates from Long Island City, New York, with additional facilities in Atlanta, Georgia. Maersk's main office is in Denmark, with a presence in the New York area, and it has no objections to RSA’s chosen venue. Since all parties have offices near New York, transferring the case to Georgia would merely shift the inconvenience, thus weighing against the transfer. 

The locus of operative facts is a key factor in Section 1404(a) transfer motions, focusing on where the events related to the claim occurred. For a breach of contract case, courts consider where the contract was negotiated, executed, performed, and where the breach happened. Here, while the contracts were negotiated and executed in New York, the performance largely took place in Georgia and South Carolina, with the breach linked to actions occurring in Georgia after NEU took possession of the shipment. Consequently, despite some relevant facts in New York, the majority support transferring the case to the Northern District of Georgia.

Most documentary evidence in the case is electronic or easily shareable, with neither party claiming significant burdens in transporting evidence. Courts require substantial proof of difficulty or inconvenience related to document transportation to favor a transfer. The location of documents is considered neutral due to modern technology facilitating access. NEU claims that its facility, truck, and cargo samples are either in Atlanta or can be easily transported there, but the Court finds these items are not crucial to the case. Additionally, cargo samples are in Florida, and NEU fails to demonstrate that transporting them to Georgia poses any greater challenge than transporting them to New York. Consequently, based on the common use of electronic discovery and the lack of demonstrated inconvenience, the Court concludes that the location of documents does not favor either New York or Georgia, rendering this factor neutral.

NEU's Motion identifies two third-party witnesses whose testimony it may need to compel: Small, a trucker from Marion, South Carolina, and Carla Patrick Gay, a former NEU employee from Riverdale, Georgia. NEU argues for the convenience of having these witnesses testify closer to their homes but does not confirm any specific unwillingness to testify in New York. The defendant mentions other potential witnesses who might prefer to testify in their home state, but does not assert that they would be unwilling to appear in New York, rendering this factor neutral in the Court’s analysis.

Under Rule 45 of the Federal Rules of Civil Procedure, subpoenas can compel attendance of non-party witnesses within 100 miles of their residence or employment, or within their home state, provided it does not incur substantial expense. Therefore, the identified non-party witnesses would likely be subject to subpoena in the Northern District of Georgia, but not in the Southern District of New York. For party witnesses, the subpoena power extends similarly but allows for attendance regardless of expense within the state. Consequently, if the case were transferred to Georgia, party witnesses from New York would fall outside the court’s subpoena power. Overall, the consideration of witness availability slightly favors transfer for non-party witnesses, while it opposes transfer for party witnesses in New York, resulting in a neutral outcome since no witness has been definitively deemed unwilling to testify.

Familiarity with governing law is generally not a significant factor in federal venue transfer considerations. The parties dispute which law applies—New York, Georgia, Ireland, or federal common law—but both the current court and the Northern District of Georgia are capable of applying the relevant laws, including New York contract law, which is agreed to govern the contracts. Therefore, this consideration is neutral.

Regarding the financial means of the parties, no disparity is claimed, and such factors are typically given little weight when both parties are corporations, rendering this factor neutral as well.

The plaintiff's choice of forum typically receives substantial deference, especially if it is the plaintiff's home jurisdiction. However, in this case, the forum is not the plaintiff's home state, which reduces the weight given to this factor. Although the plaintiff maintains an office in New York, the court finds insufficient evidence of ongoing business activity in the state to justify significant deference. While there are connections to New York due to the contracting process and investigation, the majority of relevant events occurred in Georgia, making this connection tenuous. Consequently, this factor is assessed as slightly favoring transfer or neutral.

Transferring the case is generally not inefficient in its early stages, but in this instance, the parties are two months from the close of discovery, indicating that litigation is advanced and moving toward trial. A delay caused by a stay to allow for the addition of Maersk as a necessary party has not hindered progress. Transferring the case to the Northern District of Georgia would disrupt judicial efficiency and could result in split proceedings if Maersk is not subject to personal jurisdiction there. Consequently, the factors concerning trial efficiency and the interests of justice weigh against the transfer. The motion by Nippon Express USA, Inc. to transfer venue is denied. Prior to this decision, RSA sought a pre-motion conference to amend its complaint to include Maersk, which was granted. The Court had to consider the appropriateness of transferring the case solely concerning NEU, as Maersk cannot be brought in the Northern District of Georgia. While Maersk indicated it could produce witnesses in New York, it did not specify their identities or roles. The relevance of the investigation's location to the breach of contract analysis was deemed insignificant.