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Qvc, Inc v. Patiomats.Com

August 3, 2012

QVC, INC., PLAINTIFF,
v.
PATIOMATS.COM, LLC N/K/A ALTERRA CAPITAL, LLC AND KEECO, LLC, DEFENDANTS.



The opinion of the court was delivered by: Schiller, J.

MEMORANDUM

Plaintiff QVC, Inc. brings this interpleader action against Patiomats.com, LLC, now known as Alterra Capital, LLC ("Patiomats"), and Keeco, LLC, alleging that both companies have asserted competing claims to funds held by QVC. Before the Court is Defendant Keeco's motion to transfer the case to the Middle District of Florida pursuant to 28 U.S.C. § 1404(a) or, in the alternative, to stay all proceedings pending the disposition of a related action in the Middle District of Florida. For the reasons set forth below, the motion to transfer will be granted.

I. BACKGROUND

On April 20, 2011, Keeco and Patiomats, a manufacturer and seller of patio mats and related products, entered into an Asset Purchase Agreement whereby Keeco purchased certain assets of Patiomats. (Am. Compl. ¶¶ 2, 3, 8, 10.) QVC, "a general merchandise electronic retailer that markets and distributes a wide variety of products directly to consumers through various means and media," ordered merchandise from Patiomats prior to April 20, 2011. (Id. ¶ 7.) QVC made payments to Keeco in connection with purchase orders between QVC and Patiomats. (Id. ¶ 13.) Keeco remitted some of the payments to Patiomats but refused to turn over additional funds received. (Id. ¶¶ 14-15.) A dispute arose between Patiomats and Keeco as to which company was entitled to the funds, and both Patiomats and Keeco have made claims to QVC for additional funds held by QVC. (Id. ¶¶ 14-19.) QVC has retained the additional funds, unsure of which claimant to pay. (Id. ¶ 22.) QVC claims that it is now holding at least $1,507,413.31 in funds. (Id. ¶¶ 22-23.)

On June 13, 2011, Patiomats initiated an action against Keeco in the Thirteenth Judicial Circuit in Hillsborough County, Florida (the "Florida action"), alleging that Keeco breached the Asset Purchase Agreement by failing or refusing to remit to Patiomats certain payments, including the funds from QVC. (Id. ¶ 11.) QVC is not a party to the Florida action. (Id.) The action was removed to the United States District Court for the Middle District of Florida on June 15, 2011, and was referred for arbitration.*fn1 The arbitrator issued an arbitration award in favor of Patiomats on July 27, 2012, which specifically discussed whether the QVC transactions were excluded from the assets purchased by Keeco. (Civ. A. No. 11-1592, Document No. 26.) Following the arbitration, the Court directed the parties to determine whether the arbitrator's award resolves the parties' dispute. (Id., Document No. 27.)

On June 5, 2012, QVC filed the instant action against Patiomats and Keeco seeking an Order from this Court permitting it to pay $1,507,413.31 into the Registry of the Court, discharging QVC from any liability in connection with the funds, permanently enjoining Patiomats and Keeco from participating in any proceeding against QVC to recover the funds, and requiring Patiomats and Keeco to interplead and settle between themselves their rights to the QVC funds. (Am. Compl. ¶¶ 25-28.) On July 10, 2012, Keeco moved to transfer this action to the Middle District of Florida or, in the alternative, stay all proceedings in this action pending the disposition of the Florida action. QVC opposes the motion to transfer. Patiomats has neither indicated its support nor its opposition to Keeco's motion.

QVC contends that both the relationships between QVC and Keeco and the relationships between QVC and Patiomats are governed by the terms and conditions of the purchase orders, which include a forum selection clause. (Mem. of Law in Supp. of the Resp. of Pl. QVC, Inc. in Opp'n. to the Mot. of Keeco, LLC to Trans. or Stay [Pl.'s Mem.] at 7.) QVC issued fifteen purchase orders to Patiomats for the purchase and delivery of merchandise. (Am. Comp. ¶ 9.) QVC included a copy of a purchase order in its response to the motion to transfer currently before the Court, however, it is not signed by any party. (Pl.'s Mem. Ex. A [Purchase Order].) The purchase order sets out the terms and conditions between a "Buyer" and a "Vendor" of "Merchandise." (Id.) While the purchase order is not signed, presumably QVC is the "buyer" and Patiomats is the "vendor." The forum selection clause in the purchase order provides, "Vendor hereby consents to the exclusive jurisdiction of the state courts of the Commonwealth of Pennsylvania for the County of Chester and the federal courts for the Eastern District of Pennsylvania in all matters arising hereunder." (Purchase Order¶ 15.)

II. STANDARD OF REVIEW

Pursuant to 28 U.S.C. § 1404(a), "[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 or to any district or division to which all parties have consented." The decision to grant a transfer under § 1404(a) lies within the discretion of the trial court. Wilce v. Gen. Motors Corp., Civ. A. No. 96-6194, 1996 WL 724936, at *1 (E.D. Pa. Dec. 13, 1996). The trial court possesses broad discretion in this matter. Solomon v. Cont'l Am. Life Ins. Co., 472 F.2d 1043, 1045 (3d Cir. 1973); see also Stewart Org., Inc. v. Ricoh Corp., 487 U.S. 22, 29 (1988). The defendant, as the moving party, bears the burden of proving that venue is proper in the transferee district and that transfer is appropriate. Lindley v. Caterpillar, Inc., 93 F. Supp. 2d 615, 617 (E.D. Pa. 2000); see also Shutte v. ARMCO Steel Corp., 431 F.2d 22, 25 (3d Cir. 1970); Idasetima v. Wabash Metal Prods., Inc., Civ. A. No. 01-197, 2001 WL 1526270, at *1 (E.D. Pa. Nov. 29, 2001).

Additionally, the presence of a valid forum selection clause places on the party seeking to avoid the forum selection clause "the burden of demonstrating why they should not be bound by their contractual choice of forum." Jumara v. State Farm Ins. Co., 55 F.3d 873, 880 (3d Cir. 1995) (internal quotation marks omitted). Although the presence of a valid forum selection clause is entitled to considerable weight, this Court must still consider the familiar Jumara factors that govern whether transfer under § 1404 is appropriate. See id.

III. DISCUSSION

Keeco asserts that, in the interest of justice, this action must be transferred to the Middle District of Florida under 28 U.S.C. § 1404(a) so that it may be consolidated, or at least coordinated, with the action currently pending there. QVC responds that Keeco's request for transfer should be denied because it would be inconvenient for QVC to litigate "in a foreign jurisdiction where it has no corporate presence, no counsel, no documents, and no witnesses" and "is not subject to personal jurisdiction." (Pl.'s Mem. at 1-3.).

A. The First-Filed Rule

Although the parties' briefs failed to mention the first-filed rule, it bears on the Court's analysis.Transcore, L.P. v. Mark IV Indus. Corp., Civ. A. No. 09-2789, 2009 WL 3365870, at *4 (E.D. Pa. Oct. 15, 2009) (discussing the court's sua sponte application of first-filed rule). The first-filed rule provides that "in all cases of federal concurrent jurisdiction, the court which first has possession of the subject must decide it." EEOC v. Univ. of Pa., 850 F.2d 969, 971 (3d Cir. 1988). The date the original complaint was filed is determinative for purposes of the first-filed rule. See Colony Nat'l Ins. Co. v. UHS Children Servs., Inc., Civ. A. No. 09-2916, 2009 WL 3007334, at *2 n.5 (E.D. Pa. Sept. 11, 2009). The rule "encourages sound judicial administration and promotes comity among federal courts of equal rank. It gives a court the power to enjoin the subsequent prosecution of proceedings involving the same parties and the same issues already before another district court." EEOC, 850 F.2d at 971 (internal quotation marks omitted). "The party who first brings a controversy into a court of competent jurisdiction for adjudication should, so far as our dual system permits, be free from the vexation of ...


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