United States District Court, D. Minnesota
N. ERICKSEN United States District Judge.
KGM Contractors, Inc. (“KGM”) brought claims
against Defendants Heavy Haulers, Inc. and Cardinal
Transport, Inc. for damage sustained to an asphalt plant
during disassembly in Florida and transport to Minnesota.
Heavy Haulers moved to dismiss for lack of personal
jurisdiction and moved, in the alternative, to transfer this
action to the Northern District of Florida, where the asphalt
plant was originally located and disassembled. Cardinal
Transport separately moved to transfer to the same District.
For the following reasons, the Court denies Heavy
Haulers's motion to dismiss, but grants its alternative
motion, and Cardinal Transport's motion, to transfer to
the Northern District of Florida.
purchased an asphalt plant located in Hawthorne, Florida from
Anderson Columbia Company, Inc. (See Compl. ¶
6, Dkt. No. 1.) KGM then contracted with Heavy Haulers to
disassemble the plant into parts and transport the parts to
KGM's location in Hibbing, Minnesota. (See Id.
¶ 9.) In turn, Heavy Haulers subcontracted some of the
transportation to Cardinal Transport. (See Id.
¶ 13.) Cardinal Transport ended up delivering its parts
late. (See id.)
delivery, “KGM discovered that the [asphalt plant] was
significantly damaged and altered.” (Id.
¶ 14.) Electrical wires were cut and destroyed, parts
were broken and missing, and structural aspects of the plant
were damaged, among other things. (See id.) KGM
spent over $250, 000 repairing these conditions. (See
Id. ¶ 16.) It also sustained lost profits and
liquidated damages due to inability to use the plant.
(See Id. ¶ 17.)
Motion to Dismiss for Lack of Personal Jurisdiction
Haulers moves to dismiss this action for lack of personal
jurisdiction. (See Dkt. No. 24.) The question of
jurisdiction usually takes precedence over other
considerations. See Ruhrgas AG v. Marathon Oil Co.,
526 U.S. 574, 577 (1999). However, a federal court has
discretion “to choose among threshold grounds for
denying audience to a case on the merits.” Sinochem
Int'l Co. v. Malaysia Int'l Shipping Corp., 549
U.S. 422, 431 (2007) (quoting Ruhrgas, 526 U.S. at
585). The decision to dismiss or transfer a case based on
venue considerations is one such threshold ground, as it is
merely “a determination that the merits should be
adjudicated elsewhere” and does not entail ruling on
the merits. Id. at 432. Thus, a federal court may
address venue first, “bypassing questions of
subject-matter and personal jurisdiction, when considerations
of convenience, fairness, and judicial economy so
warrant.” Id. at 432; see also In re
LimitNone, LLC, 551 F.3d 572, 575-78 (7th Cir. 2008)
(holding that a district court did not impermissibly act by
transferring a case before addressing subject-matter
case, there are persuasive arguments for and against finding
that Heavy Haulers has sufficient minimum contacts with
Minnesota such that maintenance of the lawsuit would not
offend “traditional notions of fair play and
substantial justice.” Int'l Shoe Co. v.
Washington, 326 U.S. 310, 316 (1945). Due to this, in
view of the Court's ability to bypass the issue by
evaluating venue, and because the relevant factors
overwhelmingly favor transferring this action, the Court
declines to rule on the issue of personal jurisdiction over
Heavy Haulers in Minnesota.
Transfer under 28 U.S.C. § 1404(a)
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). Heavy
Haulers and Cardinal Transport request that the Court
transfer this action to the Northern District of Florida.
(See Dkt. Nos. 24, 29.) This action could have been
brought in that District because it is where “a
substantial part of the events or omissions giving rise to
[KGM's claims] occurred, ” namely because
disassembly and part of the transportation occurred there. 28
U.S.C. § 1391(b)(2). Also, with respect to KGM's
claim under 49 U.S.C. § 14706 against Cardinal
Transport, the Northern District of Florida is proper because
it is a state in which Cardinal Transport, the delivering
carrier, operates. See § 14706(d)(1);
Winona Foods, Inc. v. Timothy J. Kennedy, Inc., No.
07-CV-1003 (WCG), 2008 WL 2570600, at *4 (E.D. Wis. June 26,
2008). Because the Northern District of Florida is a district
in which this action could have been brought, the Court next
considers factors relevant to transfer.
must consider three categories of factors when ruling on a
motion to transfer: “(1) the convenience of the
parties, (2) the convenience of the witnesses, and (3) the
interests of justice.” Terra Int'l, Inc. v.
Miss. Chem. Corp., 119 F.3d 688, 691 (8th Cir. 1997).
The Court may consider any case-specific factors in
conducting its “flexible and individualized [transfer]
analysis.” Stewart Org., Inc. v. Ricoh Corp.,
487 U.S. 22, 29 (1988). “In general, federal courts
give considerable deference to a plaintiff's choice of
forum and thus the party seeking a transfer under section
1404(a) typically bears the burden of proving that a transfer
is warranted.” Terra Int'l, 119 F.3d at
695. “The party seeking transfer must show that the
balance of factors ‘strongly' favors the
movant.” Toomey v. Dahl, 63 F.Supp.3d 982, 993
(D. Minn. 2014) (quoting Gulf Oil Corp. v. Gilbert,
330 U.S. 501, 508 (1947)). Ultimately, the Court has
discretion to decide whether the balance of relevant factors
favors transfer. See Stewart, 487 U.S. at 29 (citing
Van Dusen v. Barrack, 376 U.S. 612, 622 (1964)).
Convenience of the Parties
evaluating the convenience of the parties, courts may
consider the parties' locations, the expenses and
disruption that the parties will likely suffer if litigation
is held in either forum, and the location where the
complained-of conduct occurred. See In re Apple,
Inc., 602 F.3d 909, 913-14 (8th Cir. 2010); Terra
Int'l, 119 F.3d at 696; The Charter Oak Fire
Ins. Co. v. The Burlington N. Santa Fe Ry. Co., No.
16-CV-140 (JNE/HB), 2016 WL 3004628, at *2-3 (D. Minn. May
24, 2016); Brockman v. Sun Valley Resorts, Inc., 923
F.Supp. 1176, 1180 (D. Minn. 1996). Transfer is not
appropriate if it will merely shift inconvenience from one
party to another. Terra Int'l, 119 F.3d at
opposing transfer to the Northern District of Florida, KGM
points out that none of the Parties are residents of
Florida. (See Plaintiff's Memorandum
in Opposition to the Motion to Transfer (“Pl. Transfer
Br.”) 7, Dkt. No. 40.) This appears to be the case: KGM
is a Minnesota corporation, with a principal place of
business in Minnesota; Heavy Haulers is a Georgia
corporation, with a principal place of business in Georgia;
and Cardinal Transport is a Delaware corporation, with a
principal place of business in Illinois. (Compl. ¶¶
3-5.) Despite this, Heavy Haulers argues that Florida is more
convenient on balance because the company is located closer
to the Northern District of Florida. (See Heavy
Haulers's Memorandum in Support of Its Motion to Dismiss
(“HH Dismiss Br.”) 16-17, Dkt. No. 25.) Cardinal
Transport's drivers, who transported the plant parts and
are independent contractors, are also closer to the Northern
District of Florida; they are located in Florida and South
Georgia. (Cardinal Transport's Memorandum in Support of
Its Motion to Transfer (“CT Transfer Br.”) 4,
Dkt. No. 30; see also Declaration of Jeffrey Clark
(“Clark Decl.”) ¶ 5, Dkt. No. 31.) These
drivers are the only identified persons affiliated with
Cardinal Transport who participated in the events underlying
the Parties' dispute. (See, e.g., Compl.
¶¶ 13, 16-17; Clark Decl. ¶ 5.) The practical
location for Cardinal Transport, acting through independent
contractors, is between Florida and South Georgia. Because,
in the context of this case, more Parties are located closer
to Florida, the Parties' locations favor transfer.
Expenses and Disruption Resulting from Litigation in Either
expenses and disruption that the parties “would likely
incur . . . for airfare, meals, and lodging, and losses in
productivity from time spent away from work” if
litigating in one forum or another is relevant to the
convenience of the parties. Oien v. Thompson, 824
F.Supp.2d 898, 903 (D. Minn. 2010) (quoting In re
Apple, 602 F.3d at 913); see also Toomey, 63
F.Supp.3d at 993 (considering hardship to the parties). As
explained above, the Parties are located closer to the
Northern District of Florida. Due to the great distance
between Minnesota and Florida, it is very likely that the
Parties' collective expenses will be greater if they
litigate this case in Minnesota, rather than in Florida.
Thus, transfer would not merely shift inconvenience from one
party to another, as KGM contends. (See
Plaintiff's Memorandum in Opposition to the Motion to
Dismiss (“Pl. Dismiss. Br.”) 18, Dkt. No. 41; Pl.
Transfer Br. 7.) KGM will face some inconvenience if the case
is transferred, but that inconvenience is outweighed by the
inconvenience both Defendants would likely suffer if this
action is litigated in Minnesota.
importantly, Heavy Haulers argues that, due to its small size
and limited resources, litigation and a trial in Minnesota
would seriously jeopardize its business operations.
(See HH Dismiss Br. 16-17; see also
Affidavit of Tony Clark (“Clark Aff.”) ¶ 7,
Dkt. No. 26 (“Trying the case in [Minnesota] . . .
would cripple Heavy Haulers'[s] ability to perform work
during the trial.”) Where a defendant's
“business would be substantially disrupted by having
litigation proceed in an inconvenient forum, ” and the
likely disruption would disproportionately burden the
defendant, transfer is favored. Sec. & Exch.
Comm'n v. Page Airways, Inc., 464 F.Supp. 461, 464
(D.D.C. 1978); see Feralloy Corp. v. Spig Indus.,
Inc., No. 09-CV-3028 (RMG), 2010 WL 3432283, at *2
(D.S.C. Aug. 30, 2010); In re Hanger Orthopedic Grp.,
Inc. Sec. Litig., 418 F.Supp.2d 164, 169 (E.D.N.Y.
Haulers has only eight employees, and it argues that five of
those employees are essential witnesses. (See HH
Dismiss Br. 16-17; Clark Aff. ¶ 7.) Thus, trial in
Minnesota could effectively shutter the company's
operations and cause long-term business and financial
consequences. On the other hand, trial in the Northern
District of Florida-much closer to where Heavy Haulers
operates-would likely have a less disruptive effect on Heavy
Haulers's business. (See HH Dismiss Br. 16-17.)
A similar argument can also be made for Cardinal
Transport's independent contractors; trial in Minnesota
would likely disrupt their ability to drive trucks and earn
income more than trial in Florida would. The record does not
reveal KGM's size, but its website indicates that it is
larger than Heavy Haulers. KGM also only identified three likely
employee witnesses and did not argue that transfer would
disrupt its business operations. (See Dkt. Nos. 27-1
at 7-8, 42-1 at 5.) By comparison, then, it appears less
likely that KGM will suffer substantial business disruption
if this action is litigated in Florida.
Florida appears on balance less expensive for the Parties,
and litigation in Minnesota will very likely force Heavy
Haulers (and, potentially, Cardinal Transport's
independent contractors) to shoulder a substantial and
disproportionate disruption to ...