Warfighter FOCUSed Logistics, Inc. v. Partminer Industries, LLC et al

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UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION
WARFIGHTER FOCUSED
LOGISTICS, INC.,
Plaintiff,
v.
PARTMINER INDUSTRIES, LLC,
et al.,
Defendants.
/
Case No. 2:21-cv-11592
HONORABLE STEPHEN J. MURPHY, III
OPINION AND ORDER TRANSFERRING
CASE TO THE UNITED STATES DISTRICT COURT OF NEW HAMPSHIRE
The Court ordered the parties to show cause for why the case should not be
transferred to the United States District Court of New Hampshire under 28 U.S.C.
§ 1404(a) 	based 	on 	the 	nondisclosure 	agreement 	(“NDA”) 	between 	Plaintiff
Warfighter FOCUSed Logistics and Defendant Partminer Industries. ECF 42; see
ECF 1-3 (NDA). The NDA had a forum-selection clause that placed venue of litigation
with a court in Merrimack County, New Hampshire.1 ECF 1-3, PgID 120; see also
ECF 42, PgID 556 (“[T]he NDA’s plain text requires Plaintiff to bring the claims in
New Hampshire.”).
Partminer agreed that the Court should transfer the case based on the forum-
selection clause. ECF 43. Defendant 313 Industries did not respond to the show cause
1 The courthouse for the United States District Court of New Hampshire is in
Concord—a city in Merrimack County. 28 U.S.C. § 109.
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order, so the Court will consider 313 Industries unopposed to transfer. And Plaintiff
opposed the transfer. ECF 44. For the following reasons, the Court will transfer the
case under § 1404(a) based on the parties’ forum-selection clause. 2
LEGAL STANDARD
A district court may transfer a case on its own motion under § 1404(a). Section
1404(a) allows a district court, “[f]or the convenience of parties and witnesses, [and]
in the interest of justice, . . . [to] 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.” See Carver v. Knox Cnty., 887 F.2d 1287, 1291 n.2 (6th Cir.
1989). “[T]he Court may order transfer sua sponte provided the parties are first given
the opportunity to argue their views on the issue.” Hite v. Norwegian Caribbean
Lines, 551 F. Supp. 390, 393 (E.D. Mich. 1982) (italics omitted) (collecting cases).
“When the parties have agreed to a valid forum-selection clause, a district court
should ordinarily transfer the case to the forum specified in that clause.” Atl. Marine
Constr. Co. v. U.S. Dist. Ct. for W. Dist. of Tex., 571 U.S. 49, 62 (2013). “Only under
extraordinary circumstances unrelated to the convenience of the parties” should
transfer not occur. Id.
DISCUSSION
Because the Court already found that Plaintiff and Partminer agreed to a
forum-selection clause, ECF 42, PgID 556, the Court will first address why it must
2 Based on the parties’ briefing, the Court will resolve the show cause order on the
briefs without a hearing. See Fed R. Civ. P. 78(b); E.D. Mich. L.R. 7.1(f)(2).
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enforce the clause. After, the Court will explain why it will transfer the case under
§ 1404(a).
I. 	Forum-Selection Clause
Plaintiff argued that the Court must apply Michigan law to decide whether to
enforce a forum-selection clause. ECF 44, PgID 564–68. The Sixth Circuit disagrees.
In diversity cases, “the enforceability of the forum selection clause is governed by
federal law.” Wong v. PartyGaming Ltd., 589 F.3d 821, 828 (6th Cir. 2009) (emphasis
added); see also Williams Ins. & Consulting, Inc. v. Goosehead Ins. Agency, L.L.C.,
533 F. Supp. 3d 555, 557–58 (E.D. Mich. 2020) (Cleland, J.). The Court must uphold
a forum-selection clause unless there is “a strong showing” otherwise. Wong, 589 F.3d
at 828 (citing Carnival Cruise Lines, Inc. v. Shute, 499 U.S. 585, 595 (1991)). Plaintiff
bears the burden to show that the Court should not enforce the clause. Id. (citation
omitted).
To defeat that strong presumption for enforcing the clause, Plaintiff must show
that:
(1) the clause was obtained by fraud, duress, or other unconscionable
means; (2) the designated forum would ineffectively or unfairly handle
the suit; (3) the designated forum would be so seriously inconvenient
that requiring the plaintiff to bring suit there would be unjust; or
(4) enforcing the forum selection clause would contravene a strong
public policy of the forum state.
Lakeside Surfaces, Inc. v. Cambria Co., 16 F.4th 209, 219–20 (6th Cir. 2021) (citations
omitted). Plaintiff has not met that heavy burden.
For the first factor, no party suggested that the forum-selection clause, or the
NDA, were obtained through unconscionable means. ECF 43; 44; see ECF 40, PgID
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534 (“Defendant does not dispute the existence of the Non-Disclosure Agreement, nor
that it formed a valid contract.”). And no party could make that showing because
Plaintiff and Partminer were mature companies signing a routine NDA for a six-
figure business deal. The first factor therefore favors enforcing the clause.
Next, no party hinted that the District of New Hampshire would handle the
case unfairly or inefficiently. See ECF 43; 44. Indeed, federal courts generally
presume 	that 	other 	federal 	courts 	can 	“efficiently, 	effectively, 	and 	fairly
resolve . . . breach of contract suit[s].” E.g., Williams Ins. & Consulting, Inc., 533 F.
Supp. 3d at 559. The second factor thus favors enforcing the clause.
As for the third factor, Plaintiff asserted that transferring the case would be
“substantially less convenient” in New Hampshire than Michigan. ECF 44, PgID 564.
According to Plaintiff, “the inconvenience inherent in litigation in New Hampshire
was not contemplated by the parties at the time of executing the agreement as the
agreement did not incorporate consideration of future interference by a Michigan
corporation.” Id. But the argument is baseless because Plaintiff and Partminer did
make such considerations and incorporate it into the selection cause. After all, the
NDA plainly stated, “any cause of action arising under this Agreement shall be
brought in a court in Merrimack County, New Hampshire.” ECF 1-3, PgID 120
(emphasis added). Because the parties used sweeping, plain language in the NDA,
the 	parties 	knew 	that 	they 	must 	litigate 	any 	claim 	under 	the 	NDA 	in 	New
Hampshire.
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Plaintiff also warned about the logistical troubles for a New Hampshire trial
because the Detroit witnesses would need to testify. ECF 44, PgID 566. But that sort
of inconvenience is present in any litigation with diverse parties. And it does not rise
to an “exceptional case of hardship” given that Plaintiff and Partminer “willingly
agreed to the contract’s forum-selection clause.” Williams Ins. & Consulting, Inc., 533
F. Supp. 3d at 559 (quotation marks and quotations omitted). To confirm, the Sixth
Circuit even held that although litigating in Gibraltar would “no doubt be an
inconvenience” to plaintiffs who were “not sophisticated business entities,” litigating
the case in Gibraltar of all places was not “unjust or unreasonable.” Wong, 589 F.3d
at 829–30. In sum, the third factor warrants enforcing the forum-selection clause.
The 	last 	factor 	strongly 	supports 	enforcing 	the 	forum-selection 	clause.
“Michigan’s public policy favors the enforcement of contractual forum-selection
clauses.” Turcheck v. Amerifund Fin., Inc., 272 Mich. App. 341, 345 (2006). And
Plaintiff has pointed to no public policy suggesting that Michigan disfavors the
present forum-selection clause. See ECF 44. Because all factors favor enforcing the
forum-selection clause, the Court will now address the § 1404(a) factors.
II. 	Section 1404(a) Factors
To start, the Court can only transfer the present case to a district where it
“might have been brought or to any district . . . to which all parties have consented.”
§ 1404(a). Plaintiff could have sued Partminer and 313 Industries in the District of
New 	Hampshire 	because 	“a 	substantial 	part 	of 	the 	events” 	occurred 	there.
§ 1391(b)(2). A “substantial part” means “any forum with a substantial connection to
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the plaintiff’s claim.” First of Mich. Corp. v. Bramlet, 141 F.3d 260, 263 (6th Cir.
1998). New Hampshire is where Partminer conducted business. ECF 39-2, PgID 487–
89. Based on its business conduct, Partminer allegedly breached the NDA, disclosed
trade secrets, misappropriated the trade secrets, failed to pay Plaintiff, and engaged
in a conspiracy with 313 Industries. ECF 1, PgID 10, 16, 18, 22–23, 32, 36. To be sure,
Plaintiff alleged that Partminer is still maintaining and using its misappropriated
confidential information. Id. at 37. In short, venue is proper in New Hampshire and
no party has suggested otherwise. See ECF 43; 44.
Because venue is proper in New Hampshire, transfer must serve the parties’
private interests and the public’s interest. Atl. Marine Constr. Co., 571 U.S. at 62–63.
“The calculus changes, however, when the parties’ contract contains a valid forum-
selection clause.” Id. at 63 (citation omitted). It follows that “a valid forum-selection
clause should be given controlling weight in all but the most exceptional cases.” Id.
(cleaned up). Put differently, the Court must “deem the private-interest factors to
weigh entirely in favor of the preselected forum.” Id. at 64. Because the Court must
enforce the forum-selection clause, the private-interest factors favor transferring the
case and the Court need only consider the public-interest factors. Id.
In practice, the public-interest factors “rarely defeat” transfer. Id. The public
interest factors include: “(1) the court’s interest in judicial economy; (2) docket
congestion; (3) local interest in deciding the controversy at home[;] and (4) in diversity
cases, the interest of conducting the trial in the forum of the governing law.” Olin-
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Marquez v. Arrow Senior Living Mgmt., LLC, ---F. Supp. 3d---, 2022 WL 479781, at
*12 (S.D. Ohio 2022) (citation omitted).
First, the Court’s interest in judicial economy and docket congestion warrant
transferring the case. The Eastern District of Michigan is experiencing significant
court congestion that has resulted in a trial backlog due to COVID-19 interruptions.
See Maisano v. Sterling Heights Dodge, Inc., No. 2:18-cv-10702, 2022 WL 446741, at
*1 n.1 (E.D. Mich. Feb. 14, 2022) (Murphy, J.). That said, the local interest in deciding
the present case at home slightly pushes back. The dispute centers on alleged
misappropriation of an Ohio corporation’s trade secrets based on an NDA between it
and a New Hampshire company. ECF 1, PgID 3, 6, 16; ECF 1-3. The only local
interest present is to litigate a case that involves 313 Industries—a Michigan
resident. ECF 1, PgID 3. Last, the public has an interest in the Court trying the case
because Michigan law governs the NDA. ECF 1-3, PgID 119. Still, based on the
Court’s research, the differences between Michigan and New Hampshire contract
law, if any exist, are minimal. At best, the public-interest factors cancel out and thus
do not override the private-interest factors. The Court will therefore order the Clerk
of the Court to transfer the case to the District of New Hampshire. The Court has not
resolved the pending motion to dismiss from Partminer. ECF 39.
ORDER
WHEREFORE, it is hereby ORDERED that the Clerk of the Court must
TRANSFER the case to the United States District Court for the District of New
Hampshire.
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The Court has not resolved the motion to dismiss [39].
SO ORDERED.
s/ Stephen J. Murphy, III
STEPHEN J. MURPHY, III
United States District Judge
Dated: April 4, 2022
I hereby certify that a copy of the foregoing document was served upon the parties
and/or counsel of record on April 4, 2022, by electronic and/or ordinary mail.
s/ David P. Parker
Case Manager
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