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LLC v. Apex Energy Group, LLC

United States District Court, W.D. Pennsylvania

May 8, 2015

UNTITLED 3, LLC, a Pennsylvania limited liability company doing business as Apex Energy Solutions of Pittsburgh, Plaintiff,
v.
APEX ENERGY GROUP, LLC, an Indiana limited liability company, Defendant.

MEMORANDUM OPINION

MARK R. HORNAK, District Judge.

Now before the Court is Defendant's Motion to Transfer this case pursuant to 28 U.S.C. § 1404(a). ECF No. 7. After considering the Motion, Plaintiff's Opposition, ECF No. 15, Defendant's Reply, ECF No. 17, the record to date, and the applicable law, and for the reasons set forth below, the Court will grant Defendant's Motion and transfer this action to the Southern District of Indiana at Indianapolis for further proceedings.

This case arises from what appears to be (at least from Plaintiff's perspective) a particularly unsatisfactory business relationship. According to the Complaint, the Defendant, Apex Energy Group, LLC ("Apex" or "Defendant") sold to Plaintiff, Untitled 3, LLC, doing business as Apex Energy Solutions of Pittsburgh ("Untitled" or "Plaintiff"), "a franchised window sales business in violation of" Pennsylvania and Indiana statutes as well as common law. ECF No. 1, at ¶¶ 2, 16. Plaintiff alleges that Defendant committed a variety of unfair and/or deceptive trade practices, including referring to the business relationship as one between a "licensor and licensee, " when in fact the businesses sold by Defendant are franchises that require additional disclosures and are subject to additional legal requirements. Id. at ¶¶ 6-7. Specifically, Plaintiff alleges that Defendant fraudulently induced it to purchase the franchised business at issue in February of 2013 through a "License Agreement, " which Plaintiff signed because it relied on unsupported financial performance representations made by Defendant that it says were inadequate under the law. Id. at ¶¶ 8-13. Plaintiff seeks rescission of the License Agreement, as well as various forms of damages, costs, and fees, id. at ¶ 15, as well as other remedies including "a declaratory judgment that Defendant has breached its warranties, representations, and commitments under the License Agreement in a fashion that justified rescission of the License Agreement and reimbursement of Plaintiff's restitution damages, " id. at ¶ 17; see also id. at 31-32, ¶¶ 1-4 (prayer for relief of actual and exemplary damages, costs, disbursements, attorneys' fees, treble damages, rescission, restitution, and any other relief deemed just and equitable).[1]

The crux of Apex's argument for transfer is that Apex and Untitled entered into a contract titled as a License Agreement, and that Agreement has a forum selection clause mandating that "any claim made pursuant to or in connection with" the Agreement must be brought in Indianapolis. ECF No. 7, at 2. Because "[a]ll of Plaintiff's claims are related to the Agreement, " Apex argues, this case must be transferred to the Southern District of Indiana at Indianapolis, consistent with the Supreme Court's decision in Atlantic Marine Construction Company, Inc. v. United States District Court for the Western District of Texas, et al, 134 S.Ct. 568, 580 (2013). ECF No. 7, at 2.

In opposition to transfer, Untitled argues that in addition to money damages, it requests rescission of the Agreement because "but for the constructive fraud, fraudulent concealment and consumer protection violations, there would have been no such agreement between these parties." ECF No. 15, at 2, 3. Plaintiff contends that this Court must balance the factors set forth by our Court of Appeals in Jumara v. State Farm Insurance Company, 55 F.3d 873 (3d Cir. 1995), to determine whether transfer is appropriate, and argues that those factors counsel against transferring the case. ECF No. 15, at 2-7.

Section 1404(a) states 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 or to any district or division to which all parties have consented." 28 U.S.C. § 1404(a). Transferring a case under § 1404(a) is appropriate in situations "where both the original and the requested venue are proper."[2] Jumara, 55 F.3d at 878.

"Ordinarily, a strong presumption of convenience exists in favor of a domestic plaintiff's chosen forum, and this presumption may be overcome only when the balance of the public and private interests clearly favors an alternate forum."[3] Kisano Trade & Invest Ltd. v. Lemster, 737 F.3d 869, 873 (3d Cir. 2013) (internal quotation marks and citation omitted). Balancing the interests requires an assessment of both public and private factors set out by the Third Circuit:

The private interests have included: 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 relative physical and financial condition; the convenience of the witnesses-but only to the extent that the witnesses may actually be unavailable for trial in one of the fora; and the location of books and records (similarly limited to the extent that the files could not be produced in the alternative forum).
The public interests have included: the enforceability of the judgment; practical considerations that could make the trial easy, expeditious, or inexpensive; 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.

Jumara, 55 F.3d at 879-80 (internal citations omitted).

However, the Supreme Court also held that when suit is filed in any venue outside that specified in a valid contractual forum selection clause, "a district court should ordinarily transfer the case to the forum specified in that clause" and only refrain from doing so "under extraordinary circumstances unrelated to the convenience of the parties." Atl. Marine, 134 S.Ct. at 581. A valid forum selection clause renders the plaintiff's choice of venue inconsequential, id., and such a clause is in fact treated as conclusive as to the private interest factors id. at 582. Simply put, the Supreme Court says that forum selection clauses "should be given controlling weight in all but the most exceptional cases." Id. at 581 (internal quotation marks, alterations, and citation omitted).

Section 8.3 of the License Agreement relevant to this lawsuit provides in part:

[A]ny claim made pursuant to or in connection with this Agreement may be brought exclusively in a court of competent jurisdiction in Indianapolis, Indiana. Each party hereto consents to venue and personal and subject matter jurisdiction in such forum, and ...

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