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Whipstock Natural Gas Services, LLC v. Trans Energy

September 17, 2008

WHIPSTOCK NATURAL GAS SERVICES, LLC, PLAINTIFF,
v.
TRANS ENERGY, INC., DEFENDANT.



The opinion of the court was delivered by: Terrence F. McVerry United States District Court Judge

MEMORANDUM OPINION AND ORDER

Presently before he Court is the MOTION TO DISMISS FOR IMPROPER VENUE, with brief in support filed by Defendant, Trans Energy, Inc. (Document Nos. 4 and 5), the MEMORANDUM IN OPPOSITION filed by Plaintiff, Whipstock Natural Gas Services, LLC (Document No. 7), and the RESPONSE TO PLAINTIFF'S MEMORANDUM IN OPPOSITION filed by Defendant, Trans Energy, Inc. (Document No. 8). For the reasons that follow, the Motion will be granted in part and denied in part and, in the interest of justice, this case will be transferred to the United States District Court for the Northern District of West Virginia, pursuant to 28 U.S.C. § 1406(a).

Procedural Background

On August 1, 2008, Plaintiff, Whipstock Natural Gas Services, LLC, filed a two-count Complaint against Defendant, Trans Energy, Inc., in which it alleges breach of contract (Count I) and unjust enrichment (Count II).

Defendant has brought the instant motion in which it contends that venue in the Western District of Pennsylvania is improper because (i) Defendant's principal place of business is in West Virginia; (ii) no event or omission giving rise to Plaintiff's claim occurred in Pennsylvania; and (iii) Defendant is not subject to personal jurisdiction in Pennsylvania. In the alternative, Defendant requests that this lawsuit be transferred to the United States District Court for the Northern District of West Virginia.

Factual Background

As the law requires, all disputed facts and inferences are resolved most favorable to Plaintiff. The following background is drawn from the Complaint and the factual allegations therein are accepted as true for the purpose of this opinion.

Plaintiff is a limited liability company organized and existing under the laws of the State of Delaware, with its principal place of business in Clymer, Pennsylvania, which is located within the Western District of Pennsylvania. Plaintiff is involved in drilling natural gas wells in various locations in the Commonwealth of Pennsylvania, as well as in the states of Ohio and West Virginia.

Defendant is a corporation organized and existing under the laws of the state of West Virginia, with its principal place of business located in St. Mary's, West Virginia. Defendant has been the owner and/or operator of certain gas and property interests in the state of West Virginia.

On or about October 26, 2007, the parties entered into a written contract, known as a "Daywork Drilling Contract." Pursuant to the terms of the contract, Plaintiff began drilling operations in Wetzel County, West Virginia on or about November 28, 2007, and completed its work on or about December 21, 2007. Throughout the time of the drilling operations, Plaintiff submitted invoices to Defendant which evidenced the amounts due pursuant to the terms of the contract.

On or about May 27, 2008, Defendant made payment to Plaintiff in the amount of $148,450.00, but despite repeated demands, Defendant allegedly has failed and refused to pay the balance due. As of July 28, 2008, the outstanding balance, including interest, allegedly due to Plaintiff is the sum of $146,990.27.

Plaintiff alleges that Defendant has violated the terms of the contract by failing to pay the invoices and has refused to provide information as to any disputed invoices pursuant to paragraph five of the contract.

Standard of Review

In considering a motion to dismiss for improper venue under Federal Rule of Civil Procedure 12(b)(3), the Court must generally accept as true the allegations in the complaint, unless contradicted by defendant's affidavits. Holiday v. Bally's Park Place, Inc., 2007 WL 2600877, at *1 (E.D. Pa. Sept. 10, 2007). "The court may examine facts outside the complaint to determine proper venue, but must draw all reasonable inferences and resolve all factual conflicts in the plaintiff's favor." Fellner v. Philadelphia Toboggan Coasters, Inc., 2005 WL 2660351, at *1 (E.D. Pa. Oct.18, 2005); accord Heft v. AAI Corp., 355 F. Supp.2d 757, 762 (M.D. Pa.2005) ("Whatever the nature of the parties' submissions, the court is bound to view the facts in the light most favorable to the plaintiff.").

The United States Court of Appeals for the Third Circuit has held that the movant (the defendant) bears the burden of demonstrating that venue is not proper. Myers v. American Dental Ass'n, 695 F.2d 716, 724 (3d Cir. 1982). The defendant also bears the burden of establishing that a venue transfer is warranted. Furthermore, "in ruling on defendant's [transfer] motion the plaintiff's choice of venue should not be lightly disturbed." Jumara v. State Farm Ins. Co., 55 F.3d 873, 879 (3d Cir.1995).

Questions of venue are governed by either 28 U.S.C. § 1404(a) or 28 U.S.C. § 1406. See Jumara, 55 F.3d at 878. The standards for transfer of an action differ depending on whether venue has been properly laid. Section 1404(a) provides that transfer to another proper venue is appropriate ...


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