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CAPP, INC. v. DICKSON/UNIGAGE

United States District Court, E.D. Pennsylvania


February 19, 2004.

CAPP, INC., t/a CAPP/USA, Plaintiff,
v.
DICKSON/UNIGAGE, INC., t/a DICKSON, Defendant

The opinion of the court was delivered by: WILLIAM YOHN, JR., District Judge

Memorandum and Order

Plaintiff Capp, Inc. ("Capp") brings this action against defendant Dickson/Unigage, Inc. ("Dickson"), seeking a declaratory judgment that neither its "private labeling" of SL4 temperature chart recorders nor its marketing of the "Capp Recorder" violates the Lanham Act, 15 U.S.C. § 1051 et seq. Capp also seeks damages for Dickson's alleged trade disparagement, as well as injunctive relief to preclude future disparagement.*fn1 Presently before this court is defendant's motion to transfer this action to the Western District of Washington pursuant to 28 U.S.C. § 1404(a). For the reasons outlined below, this motion will be denied.

BACKGROUND

  This dispute stems from a business relationship gone wrong. After two decades of a successful business arrangement, plaintiff and defendant have parted ways and now find Page 2 themselves in direct competition with one another. This competition has resulted in a dispute as to the parties' rights under the Lanham Act, a chain of aggressive and unpleasant correspondence, and allegations that malicious and disparaging comments have been disseminated in the marketplace.

  Plaintiff is a supplier and distributor of process instrumentation controls and temperature chart recorders, devices which are used to monitor and maintain the temperature in vaccine storage units. Pl's Am. Compl. ¶ 6. A Pennsylvania corporation, plaintiff maintains its principal place of business in Clifton Heights, PA, and markets its products in Pennsylvania as well as throughout the United States. Id. Defendant, an Illinois corporation, manufactures chart recorders, data loggers, and software for recording and monitoring climatic variables. Id. at ¶¶ 3, 6. In the past, defendant received purchase orders from plaintiff, sold its products to plaintiff, and shipped these products to plaintiff's Pennsylvania headquarters. Id. at ¶¶ 8-9.

  In 2002, plaintiff was awarded a contract by the State of Texas, under the terms of which it would provide Texas with 4,000 temperature chart recorders. Id. at ¶¶ 11-13. Defendant provided the product — its "SL4 Recorder" — to plaintiff, and plaintiff supplied the recorders to the State of Texas in increments of 250, beginning August 31, 2002. Id. at ¶¶ 14-15. As part of its distribution practice, plaintiff engaged in "private labeling," a process by which it placed its own trademark and identifying information on Dickson recorders before supplying them to customers. Id. ¶ 17. Plaintiff contends that defendant was aware of, and had consented to, this practice. Id. ¶ 18. Defendant denies this assertion. Def.'s Am. Answ. to Am. Compl., ¶ 18.

  Following a change in defendant's billing practices, plaintiff was no longer financially able to fulfill the Texas contract with Dickson recorders. Am. Compl., ¶¶ 18-20. As a result, Page 3 plaintiff and defendant ceased to do business with one another and plaintiff began marketing the "Capp Recorder" instead, to its Texas client as well as to potential customers in this district and around the country. Id. ¶ 22. Defendant claims that this recorder was designed to look identical to its SL4 Recorder, and has asserted counterclaims under the Lanham Act to this effect. Def.'s Am. Answ. to Am. CompL, ¶ 22; Def.'s Counterclaim & Third Party CompL, ¶¶ 62-156.

  In 2003, the Washington State Department of Health requested bid submissions for a contract to supply temperature chart recorders. Am. CompL ¶ 23. Both plaintiff and defendant submitted bids, and defendant was awarded the contract. Id. ¶¶ 24-27. Plaintiff protested this award and was eventually given the contract instead of defendant, at which point defendant then protested as well. Id. at ¶¶ 28, 36-37. The State of Washington suspended implementation of its contract pending evaluation of the protests, and has since re-awarded the contract to defendant. Id. ¶ 39. During this bidding and protest process, plaintiff avers that it received threatening and disparaging letters from defendant. Id. ¶¶ 29-34. Plaintiff also contends that defendant sent similarly disparaging letters to Capp customers in this district. Id. ¶ 35. The existence and substance of these letters are in dispute; according to plaintiff, however, the letters sent by defendant accused plaintiff of wrongdoing with respect to its labeling and production of temperature chart recorders. Id.

  Plaintiff originally instituted this action against Dickson as well as against Michael Unger, defendant's president and CEO. Defendant then filed a motion to dismiss for lack of personal jurisdiction and improper venue, or, in the alternative, to transfer. Because plaintiff's amended complaint no longer names Unger, defendant's jurisdictional arguments are now moot. See Def.'s Reply Pl's Mem. Opp. Def.'s Mot. Trans. at 1 n.1. Accordingly, the sole issue Page 4 before the court is whether this action should be transferred to the Western District of Washington.

  DISCUSSION

  Section 1404(a) provides that "[f]or 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." 28 U.S.C. § 1404(a). As the Supreme Court has recognized, § 1404(a) was intended to provide district courts with the discretion to evaluate motions for transfer according to an "individualized, case-by-case consideration of convenience and fairness." Stewart Org. Inc. v. Ricoh, Corp., 487 U.S. 22, 29 (1988). While there is no "definitive formula or list" of the factors relevant to this analysis, "courts have considered many variants of the private and public interests protected by the language of § 1404(a)." Jumara v. State Farm Ins. Co., 55 F.3d 873, 879 (3d Cir. 1995). Private interests to be considered include the plaintiff's forum preference, as manifested in the original choice; the defendant's preference; whether the claim arose elsewhere; the convenience of the parties as indicated by their physical location and financial condition; the convenience of the witnesses (only to the extent that the witnesses may be unavailable at a trial held in one of the fora); and the location of the evidence. Id. In addition, courts consider public interest factors, such as the relative enforceability of the judgment; practical considerations; the relative administrative difficulty in the two fora resulting from court congestion; the local interest in deciding local controversies at home; the public policies of the fora; and the familiarity of the trial judge with the applicable state law in diversity cases. Id. at 879-80.

  It is significant that defendant, the movant, bears "[t]he burden of establishing the need Page 5 for transfer." Id. at 879. Moreover, plaintiff's choice of venue "should not be lightly disturbed." Id. In this case, Dickson has not met its burden of demonstrating that the interests of justice mandate a transfer of this action to the Western District of Washington.

  Capp originally selected this district as the venue for its declaratory judgment action, creating a heavy presumption in favor of retaining this action in this district. Defendant argues that plaintiff's choice of forum should be given little weight because its claim did not arise in this district. Def.'s Reply Pl's Mem. Opp. Def.'s Mot. Trans. at 4. While it is true that a plaintiff's choice of forum is given less deference where the plaintiff does not reside in its chosen district and when none of the operative facts occurred there, see Reed v. Weeks Marine, Inc., 166 F. Supp.2d 1052, 1057 (E.D. Pa. 2001) citing Shutte v. Armco. Steel Co., 431 F.2d 22, 25 (3d Cir. 1970), plaintiff's claims did — in large part — arise in this district.

  Plaintiff's claims involve the manufacture, labeling, and distribution of temperature chart recorders in this district. First, plaintiff seeks a declaration that its practice of private labeling the SL4 Recorder did not violate the Lanham Act. See Am. Compl. ¶¶ 40-43. The events underlying the private labeling include defendant's shipment of SL4 Recorders into Pennsylvania, plaintiff's private labeling of these recorders, here in Pennsylvania, and plaintiff's subsequent shipment of the recorders to its customers, from its office in Pennsylvania. Furthermore, plaintiff's request for a declaratory judgment that its manufacture and marketing of the Capp Recorder do not violate the Lanham Act also involves events taking place in this district, as plaintiff is located in this district and therefore its marketing necessarily originates here.*fn2 Page 6

  Certain events which occurred in Washington are also relevant to this action, and defendant correctly points out that several non-party witnesses reside in Washington. Defendant overstates its position, however, when it argues — repeatedly — that "[t]his litigation centers around a contract for the State of Washington bid." Def.'s Reply Pl.'s Mem. Opp. Def.'s Mot. Trans. at 6. While letters written by defendant may reference this contract, and may be relevant to plaintiff's claim for trade disparagement, plaintiff is no longer asserting a claim for intentional interference with business relations. See supra note 1. The Washington contract, therefore, is not the sole event underlying this lawsuit. To that end, witnesses and documents from Pennsylvania, Texas, and elsewhere will undoubtedly become relevant to the litigation of this dispute. Although defendant claims that the Western District of Washington has a strong interest in this suit, the facts underlying the parties' dispute are not state-specific. This district, therefore, has an equally strong interest in ensuring the enforcement of the Lanham Act. Furthermore, defendant has failed to demonstrate that a trial in its proposed forum would be any less costly and Page 7 inconvenient than would a trial in this court. Washington State is home to neither party, therefore I do not see how this would result in added convenience; in fact, transferring this case to Washington would most likely increase the cost of litigation, as both parties — instead of only one — would be required to travel.

  Neither the public nor the private interests, therefore, militate in favor of transferring this action to Washington. Plaintiff resides in this district, conducts business in this district, and several of the claims in this lawsuit arose in this district. Because defendant has not presented specific facts sufficient to meet its burden, I will decline to transfer this action.

  CONCLUSION

  In sum, factors weighing in favor of transferring this case include the defendant's preference for proceeding in Washington, and the presence of several non-party witnesses in Washington. Weighing against transfer is the significance of the plaintiff's choice of forum, plaintiff's residence and business practices in this district, the occurrence in this district of many of the events and practices giving rise to plaintiff's request for a declaratory judgment, and the relative expediency and efficiency of litigating this case in a district in which one party — rather than neither party — resides. Because the factors do not favor transfer, because plaintiff's choice of forum is entitled to deference, and because transfer under § 1404(a) lies within the broad discretion of the district court, I will deny defendant's motion to transfer venue. An appropriate order follows. Page 8

  And now, this ___ day of February, 2004, upon consideration of the motion of defendant Dickson to transfer this action to the Western District of Washington (Docs. #5 & #13), and plaintiff's response thereto (Doc. #15), it is hereby ORDERED that defendant's motion is DENIED. Defendant's motion to dismiss (Doc. #5) is also DENIED as moot.


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