Falls v. Katmai Support Services, LLC et al

OCR transcription for search; preserved printed pages are authoritative

IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF VIRGINIA
Richmond Division

ANTHONY W. FALLS,
Plaintiff,

Vv. Civil Case No. 3:14cev315

KATMAI SUPPORT SERVICES, LLC,
KATMAI INFORMATION TECHNOLOGIES, LLC,
KATMAI GOVERNMENT SERVICES, LLC, and
MICHAEL E. BROWN

Defendants.

MEMORANDUM OPINION

The defendants seek to transfer this case to the United States District Court for the
District of Alaska. 28 U.S.C. § 1404(a), Federal Rule of Civil Procedure 12(b)(3). The Court
finds the balance tips in favor of transfer because of the parties’ attenuated connection to the
Eastern District of Virginia, and because the transfer will meet the interests of justice.
Accordingly, the Court transfers the case to the District of Alaska.

I. Facts

Anthony W. Falls formed 1CI, Inc., a Delaware corporation, in 1987 to engage in
contracting, construction, and project management. In 2006, Falls sold his 1CI shares to Cape
Fox, an Alaskan company with its principal office in Alaska. Falls signed an Employment
Agreement with Cape Fox and remained employed as CEO of 1C1. Unfortunately for Falls, the
Small Business Administration later terminated 1CI’s participation in a business development
program. Consequently, Michael Brown,' the CEO of Cape Fox, and Katmai Support Services

(“KSS”) entered into a Management Services Agreement (“MSA”) in November 2009. Under

' Brown was originally a defendant in this case, but Falls voluntarily dismissed him. (Dk. No.
20.)

AUTHENTICATED

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INFORMATION

GPO

this agreement, KSS assumed the position as 1CI’s CEO effective November 1, 2009. Cape Fox
terminated Falls’ employment on January 11, 2010.2 These events give rise to this case.

KSS, Katmai Information Technologies, LLC, (“KIT”) and Katmai Government
Services, LLC, (“KGS”) are all Alaskan limited liability companies with their principal places of
business in Anchorage, Alaska. KSS and KIT are wholly-owned subsidiaries of KGS. Two of
the defendants, KSS and KIT, have registered to transact business in Virginia, and each has
appointed a registered agent to accept service of process in Virginia. KIT has agents and
employees physically located in Virginia. The plaintiff resides in Maryland, and at the time of
the events giving rise to this suit he worked in Maryland.

II. Discussion

In deciding whether to transfer venue, “a district court must make two inquiries: (1)
whether the claims might have been brought in the transferee forum, and (2) whether the interest
of justice and convenience of the parties and witnesses justify transfer to that forum.” Koh v.
Microtek Int'l, Inc., 250 F. Supp. 2d 627, 630 (E.D. Va. 2003). The second inquiry requires a
balance of four factors: “(1) plaintiff's choice of forum, (2) convenience of the parties, (3)
witness convenience and access, and (4) the interest of justice.” Pragmatus AV, LLC v.
Facebook, Inc., 769 F. Supp. 2d 991, 994-95 (E.D. Va. 2011) (quoting Heinz Kettler GMBH &
Co. v. Razor USA, LLC, 750 F. Supp. 2d 660, 667 (E.D. Va. 2010)).

A. The Transferee Forum

In diversity cases, such as this one, venue lies in any judicial district where all the

defendants reside. 28 U.S.C. § 1391(b)(1). Here, all three corporate defendants are citizens of

Alaska, so the plaintiff could have filed suit there.

* Falls and Cape Fox litigated their dispute through arbitration in April 2014.
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Case 3:14-cv-00239-TMB Document 28 Filed 12/05/14 Page 2of5

B. The Plaintiff's Choice of Forum, Convenience of the Parties and Witnesses.
and the Interest of Justice

“The initial choice of forum, from among those possible under the law, is a privilege
given to the plaintiff.” J7H Tax, Inc. v. Lee, 482 F. Supp. 2d 731, 736 (E.D. Va. 2007) (quoting
Koh, 250 F. Supp. 2d at 633). The plaintiff's choice of forum “is typically entitled to ‘substantial
weight,” especially where the chosen forum is the plaintiff's home forum or bears a substantial
relation to the cause of action.” Heinz Kettler, 750 F. Supp. 2d at 667. Accordingly, the
“[p]laintiff's choice of venue is entitled to substantial weight, unless plaintiff chooses a foreign
forum and the cause of action bears little or no relation to that forum.” J7H Tax, 482 F. Supp. 2d
at 736.°

The plaintiff resides in Maryland and thus, the chosen forum is not his home forum.
When the plaintiff's choice of forum is neither the nucleus of operative facts nor the plaintiff's
home forum, the plaintiffs choice receives less weight. /ntranexus, Inc. v. Siemens Med.
Solutions Health Serv. Corp., 227 F. Supp. 2d 581, 583 (E.D. Va. 2002). The complaint
provides no indication that the choice of forum reasonably and logically relates to the cause of
action. For these reasons, the Court will not give Falls’ choice of forum substantial weight.
Bluestone Innovations, LLC v. LG Elecs., Inc., 940 F. Supp. 2d 310, 316 n.9 (E.D. Va. 2013).

To assess convenience to the parties and witnesses, the Court considers factors such as

the “ease of access to sources of proof, the cost of obtaining the attendance of witnesses, and the

3 Hanover Ins. Co. v. Paint City Contractors, Inc., 299 F. Supp. 2d 554, 556 (E.D. Va. 2004);
Bd. of Trs., Sheet Metal Workers Nat'l Fund v. Baylor Heating & Air Conditioning, Inc., 702 F.
Supp. 1253, 1256 (E.D. Va. 1988).

‘ See also Cognitronics Imaging Sys. v. Recognition Research Inc., 83 F. Supp. 2d 689, 696
(E.D. Va. 2000) (finding a plaintiff's choice in venue lacks “substantial weight” when the
“plaintiff chooses a foreign forum and the cause of action bears little or no relation to that
forum’’).

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Case 3:14-cv-00239-TMB Document 28 Filed 12/05/14 Page 3of5

717 n.13 (E.D. Va. 2005). The plaintiff admits that sources of proof in this case are largely
electronic and, thus, can be accessed anywhere. As such, the location of evidence does not favor
Virginia. The plaintiff has hired two expert witnesses from Virginia, but does not indicate that
the witnesses cannot travel to Alaska or that videotaped depositions will not suffice. The
defendants have ten witnesses located outside Virginia in Alaska, California, Washington, and
Florida. No compelling evidence indicates Virginia is a necessary forum for the witnesses or the
parties in this case; only the plaintiff's two experts are Virginia residents. While these factors
weigh in favor of transfer, the Court also realizes the plaintiff will bear a burden if the Court
transfers the case to Alaska. Ultimately, the convenience factor does not weigh heavily in favor
of or against Virginia.

The interest of justice encompasses public interest factors aimed at “systemic integrity
and fairness.” Stewart Org., Inc. v. Ricoh Corp., 487 U.S. 22, 30, 108 S. Ct. 2239, 2244 (1988).
“Judicial economy and the avoidance of inconsistent judgments are prominent among the
principal elements of systemic integrity.” Samsung, 386 F. Supp. 2d at 721 (citation omitted).
“Systemic integrity, however, must also necessarily take account of a party's attempt to game the
federal courts through forum manipulation. ” /d. (citation omitted).

In some cases, “the interest of justice may be decisive in ruling on a transfer motion, even
though the convenience of the parties and witnesses point in a different direction.” Byerson v.

Equifax Info. Servs., LLC, 467 F. Supp. 2d 627, 635 (E.D. Va. 2006).° “When determining

> Samsung, 386 F. Supp. 2d at 716 (quoting 15 Wright, Miller & Cooper, Federal Practice and
Procedure: Jurisdiction 2d § 3847 at 370)).

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Case 3:14-cv-00239-TMB Document 28 Filed 12/05/14 Page 4of5

whether a fair proceeding requires a transfer of venue, courts often consider docket congestion,°
interest in having local controversies decided at home, knowledge of applicable law, unfairness
in burdening forum citizens with jury duty, and interest in avoiding unnecessary conflicts of
law.” Samsung, 386 F. Supp. 2d at 721 n.16.’

The defendants, as citizens of Alaska, have very little, if any, connection to Virginia. The
Employment Agreement at issue requires Alaskan law to govern disputes arising out of the
agreement. The Complaint fails to specify any event that took place in Virginia or otherwise
connecting the case to Virginia. Accordingly, the interest of justice weighs in favor of
transferring the case to the District of Alaska.

IV. Conclusion

For the reasons set forth above, the Court will transfer this action to the District of Alaska
pursuant to 28 U.S.C. § 1404(a).

The Court will enter the appropriate order.

Let the Clerk send a copy of this Memorandum Opinion to all counsel of record.

|: s/ “5 4 z
Date: ( 2] ¢/ [+ John A. Gibneyyir4
Richmond, VA | United States District hradee

® In this case, the Eastern District of Virginia and the District of Alaska’s docket conditions are
not a dispositive factor because no record has been developed to support either. See Samsung,
386 F. Supp. 2d at 723-24. It is well known, however, that cases move swiftly in the Eastern
District of Virginia. The Court has said many times over that “[t]his Court cannot stand as a
willing repository for cases which have no real nexus to this district.” Cognilronics Imaging Sys.,
Inc. v. Recognition Research Inc., 83 F. Supp. 2d 689, 699 (E.D. Va. 2000) (citation omitted).

” Carpenter v. Parker Drilling Offshore USA, Inc., 2005 WL 1432373, *1 (E.D. La. 2005) (citing
Gulf Oil Corp. v. Gilbert, 330 U.S. 501, 509, 67 S.Ct. 839, 91 L.Ed. 1055 (1947)).

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