Scherillo v. Dun & Bradstreet, Inc.

• Decision Date: 17 February 2010
• Docket Number: No. 09-cv-1557 (JFB)(ARL).,09-cv-1557 (JFB)(ARL).
• Citation: 684 F. Supp.2d 313
• Parties: John SCHERILLO, Plaintiff, v. DUN & BRADSTREET, INC., Defendant.
• Court: U.S. District Court — Eastern District of New York

684 F.Supp.2d 313

John SCHERILLO, Plaintiff, v. DUN & BRADSTREET, INC., Defendant.

No. 09-cv-1557 (JFB)(ARL).

United States District Court, E.D. New York.

February 17, 2010.

Eliot F. Bloom, Mineola, NY, for Plaintiff.

A. Ross Pearlson and Katherine Marguerite Lieb, Esqs., of Sills Cummis & Gross P.C., New York, NY, for Defendant.

MEMORANDUM AND ORDER

JOSEPH F. BIANCO, District Judge:

John Scherillo ("Scherillo" or "plaintiff") brought this action for gross negligence and negligent misrepresentation against Dun & Bradstreet, Inc. ("Dun and Bradstreet" or "defendant"). In particular, plaintiff alleges, among other things, that defendant's negligence in providing him with a report regarding Agape World, Inc. ("Agape") caused him to maintain an existing investment and invest additional funds in Agape. Moreover, the complaint alleges that, less than four months after receiving the report regarding Agape from defendant, it was revealed that Agape was operating a "Ponzi" investment scheme and was insolvent.

Dun and Bradstreet has moved, pursuant to 28 U.S.C. § 1404(a), to transfer this case to the United States District Court for the District of New Jersey. In connection with the motion, the Court conducted an evidentiary hearing regarding a forum selection clause that defendant contends plaintiff agreed to on the Dun and Bradstreet website before purchasing the report. For the reasons set forth below, the Court grants defendant's transfer motion.

I. BACKGROUND

A. The Complaint

The complaint alleges that, in September 2008, plaintiff purchased, through defendant's "Small Business Solutions" ("SBS") website, a financial report ("the report") about a company called "Agape," in which plaintiff was an investor. (Compl.ss 4, 6-7.) According to the complaint, the report gave positive indications about Agape's financial health, its business practices, and its future prospects. (Compl.ss 7-9.) Plaintiff contends that, based on the positive report, he decided to maintain his existing investment in Agape and to invest additional money. (Compl.s 9). Subsequently, it was revealed that Agape had operated as a "Ponzi scheme" and was insolvent. (Compl.s 7.) Plaintiff alleges that, as a result of defendant's gross negligence and negligent misrepresentation in connection with the information provided to him, he was damaged in the sum of $75,000, which reflects his initial investment in Agape of $50,000, as well as his additional investment of $25,000 in September 2008. (Compl.ss 9, 18, 25.)

B. Procedural History

Claiming that Dun and Bradstreet was negligent in preparing the report, plaintiff filed this lawsuit in New York State Supreme Court, Nassau County, on March 9, 2009. Defendants removed the case to this Court on April 14, 2009. Defendant has now moved, pursuant to 28 U.S.C. § 1404(a), for an order transferring the case to the U.S. District Court for the District of New Jersey. As will be discussed in greater detail below, the Court determined, after reviewing the parties' papers on the motion to transfer, that a centralâ though not necessarily dispositive â issue was the applicability of a forum selection clause which defendant claimed plaintiff had agreed to. Plaintiff, however, denied reading or assenting to the forum selection clause. (See Pl. Opp. at 4-5.) Therefore, because of the disputed facts regarding the clause, the Court held an evidentiary hearing on February 5, 2010. See New Moon Shipping v. MAN B & W Diesel, A.G., 121 F.3d 24, 32 (2d Cir.1997) ("A disputed fact may be resolved in a manner adverse to a party opposing a forum selection clause only after an evidentiary hearing."); Caputo v. Holland Am. Line, Inc., No. 08-CV-4584 (CPS)(SMG), 2009 WL 2258326, at *1 (E.D.N.Y. July 29, 2009) (citing New Moon for the proposition that "a court may not resolve a disputed fact against a party opposing a forum selection clause without conducting an evidentiary hearing"). The matter is now fully submitted.

II. DISCUSSION

A. Applicable Law

Under 28 U.S.C. § 1404(a), "for 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." Thus, in determining whether to transfer venue, courts examine: (1) whether the action could have been brought in the proposed forum; and (2) whether "the transfer would promote the convenience of parties and witnesses and would be in the interests of justice." Clarendon Nat'l Ins. Co. v. Pascual, No. 99 Civ. 10840(JGK)(AJP), 2000 WL 270862, at *2 (S.D.N.Y. Mar. 13, 2000) (quoting Coker v. Bank of Am., 984 F.Supp. 757, 764 (S.D.N.Y.1997)).

B. Application

i. This Action Could Have Been Brought in the District of New Jersey

Thus, as a threshold matter, the Court must determine whether this action could have been brought in the District of New Jersey. Diversity of citizenship forms the basis for federal jurisdiction in this tort case. 28 U.S.C. § 1391(a) states that, in diversity cases, venue is proper in:

(1) a judicial district where any defendant resides, if all defendants reside in the same State,

(2) a judicial district in which a substantial part of the events or omissions giving rise to the claim occurred, or a substantial part of property that is the subject of the action is situated, or

(3) a judicial district in which any defendant is subject to personal jurisdiction at the time the action is commenced, if there is no district in which the action may otherwise be brought.

Additionally, under § 1391(c), "a defendant that is a corporation shall be deemed to reside in any judicial district in which it is subject to personal jurisdiction at the time the action is commenced." Plaintiff does not dispute defendant's assertion that Dun and Bradstreet's principal place of business is New Jersey. Therefore, Dun and Bradstreet "resides" in New Jersey, and the District of New Jersey is a permissible venue under § 1391(a)(1) and (c). See, e.g., Am. Motorists Ins. Co. v. Roller Bearing Co. of Am., Inc., No. 99 CIV 9133 AGS, 2001 WL 170658, at *6 (S.D.N.Y. Feb. 21, 2001) ("This action could have been brought in the District of Connecticut because it is undisputed that defendant has its principal place of business in Fairfield, Connecticut. Accordingly ... venue would be proper under § 1391(a)(1) and (c) as to all of plaintiff's claims."); Advance Relocation & Storage, Inc. v. Wheaton Van Lines, Inc., No. CV 99-2491(DRH)(MLO), 2000 WL 33155640, at *3 (E.D.N.Y. Sept. 15, 2000) ("In the instant case, venue in the United States District Court for the Southern District of Indiana is proper under 28 U.S.C. § 1391(a)(1) because the judicial district is one in which defendant, an Indiana corporation with its principal place of business in Indiana, resides, and all defendants (there being only one) reside in the same state, Indiana.").

ii. Discretionary Factors

Because this action could have been brought in the District of New Jersey, the Court must now determine whether the action should be transferred there. In doing so, the Court has "broad discretion" and may consider a number of factors relating to convenience and the interests of justice. See D.H. Blair & Co. v. Gottdiener, 462 F.3d 95, 106 (2d Cir.2006) ("District courts have broad discretion in making determinations of convenience under Section 1404(a) and notions of convenience and fairness are considered on a case-by-case basis."); accord In re Cuyahoga Equip. Corp., 980 F.2d 110, 117 (2d Cir. 1992). Among these factors are

(1) the plaintiff's choice of forum,

(2) the convenience of the witnesses,

(3) the location of relevant documents and relative ease of access to sources of proof,

(4) the convenience of the parties,

(5) the locus of operative facts,

(6) the availability of process to compel the attendance of unwilling witnesses, and

(7) the relative means of the parties.

D.H. Blair & Co., 462 F.3d at 106-07 (quoting Albert Fadem Trust v. Duke Energy Corp., 214 F.Supp.2d 341, 343 (S.D.N.Y.2002)). Some courts have identified additional factors, including (1) "the forum's familiarity with the governing law," and (2) "trial efficiency and the interests of justice, based on the totality of the circumstances." Glass v. S & M NuTec, 456 F.Supp.2d 498, 501 (S.D.N.Y.2006); accord In re Hanger Orthopedic Group, Inc. Sec. Litig., 418 F.Supp.2d 164, 167-68 (E.D.N.Y.2006); see also Dealtime.com v. McNulty, 123 F.Supp.2d 750, 755 (S.D.N.Y.2000).

There is no strict formula for the application of these factors, and no single factor is determinative. See, e.g., Hilti Aktiengesellschaft v. Milwaukee Elec. Tool Corp., No. 04 Civ. 629(ARR)(ASC), 2004 WL 1812821, at *4 (E.D.N.Y. July 19, 2004); Indian Harbor Ins. Co. v. Factory Mut. Ins. Co., 419 F.Supp.2d 395, 402 (S.D.N.Y.2005). Instead, these factors should be applied and weighed in the context of the individualized circumstances of the particular case. Moreover, the moving partyâ here the defendantâ has the burden "of establishing the need for a change of forum...." Wildwood Imports v. M/V Zim Shanghai, No. 04 Civ. 5538(MBM), 2005 WL 425490, at *3 (S.D.N.Y. Feb. 20, 2005) (citing Factors, Etc., Inc. v. Pro Arts, Inc., 579 F.2d 215, 218 (2d Cir.1978) and Jasol Carpet, Inc. v. Patcraft Comm. Carpet, Inc., No. 96-3064, 1997 WL 97831, at *3 (S.D.N.Y. Mar. 6, 1997)).

a. The Effect of a Forum Selection Clause

Defendant argues that the case should be transferred to the District of New Jersey because, inter alia, plaintiff agreed to a forum selection clause when he purchased the report at issue from defendant.

The presence of a valid forum selection clause is a "significant," but not dispositive, factor in the district court's analysis of a motion made under § 1404(a). See Stewart Org., Inc. v. Ricoh Corp., 487 U.S. 22, 28-31, 108 S.Ct. 2239, 101 L.Ed.2d 22 (1988) ("The forum-selection clause, which represents the parties' agreement as to the most proper forum, should...