Goodyear Tire & Rubber v. McDonnell Douglas Corp.

• Decision Date: 29 December 1992
• Docket Number: No. CV 92-3120-WJR (JGx).,CV 92-3120-WJR (JGx).
• Citation: 820 F. Supp. 503
• Court: U.S. District Court — Central District of California
• Parties: GOODYEAR TIRE & RUBBER CO., Plaintiff, v. McDONNELL DOUGLAS CORPORATION, Defendant.

820 F. Supp. 503

GOODYEAR TIRE & RUBBER CO., Plaintiff, v. McDONNELL DOUGLAS CORPORATION, Defendant.

No. CV 92-3120-WJR (JGx).

United States District Court, C.D. California.

December 29, 1992.

COPYRIGHT MATERIAL OMITTED

Don A. Proudfoot, Jr., Graham & James, Los Angeles, CA, for plaintiff.

Law Offices of Bryan Cave, Jeffrey W. Morof, Robert J. Marshall, Los Angeles, CA, for defendant.

MEMORANDUM AND ORDER

REA, District Judge.

This action came on for hearing September 28, 1992, before the Court, the Honorable William J. Rea presiding, on Plaintiff Goodyear Tire and Rubber Company's Motion to Transfer Venue, or in the Alternative, for Summary Judgment. After full consideration of the authorities submitted by the parties and oral argument of counsel, the Court hereby denies Plaintiff's motion.

I. BACKGROUND

This action was filed by Goodyear Tire and Rubber Company ("Goodyear"), seeking a declaratory judgment that McDonnell Douglas Corporation's ("MDC") settlement of claims arising out of a 1988 airplane accident in Dallas precludes a contribution action by MDC against Goodyear. MDC has filed a counterclaim for contribution.

On May 21, 1988, a MDC DC-10-30 aircraft operated by American Airlines was involved in an accident at Dallas International Airport, Texas. During takeoff, a cockpit warning light indicated that there was possible misalignment of the slats on the leading edges of the wings. This caused the flight crew to abort the takeoff, which included applying maximum brake pressure. Almost immediately after applying brake pressure, the aircraft experienced brake failure, which resulted in injuries to certain passengers and crew members, and destroyed the plane. Goodyear was responsible for the brake/ wheel assemblies for all series of the DC-10 aircraft produced by MDC.

On October 1, 1990, MDC without a prior judgment or lawsuit entered into a settlement agreement ("Settlement Agreement") with American Airlines, Inc. ("American"), and American's insurer, United States Aviation Underwriters, Inc., ("AAU"), for and on behalf of United States Aircraft Insurance Group ("USAIG"). Goodyear was not a party to the settlement. MDC has made payments totaling $10,718,069.39, which represents 50% of USAIG's net hull loss payout and 100% of the non-hull claims from the accident. Defendant MDC expects to pay USAIG an additional $200,000 to cover unsettled claims.

According to MDC, after it entered into the Settlement Agreement in November, 1990, MDC's insurers initiated discussions with Goodyear's insurers in an effort to obtain contribution from Goodyear with respect to the settlement figure. If this failed MDC suggested the claim be submitted through alternate dispute resolution procedures.¹ In March, 1991, MDC asked Goodyear to contribute one-half of the estimated $12 million that MDC paid in settlement. On October 31, 1991, Goodyear rejected MDC's request, and immediately filed the instant action.

Plaintiff initially filed this action in the U.S. District Court, Second Circuit. Goodyear subsequently moved for summary judgment, on the same grounds found in the instant motion. In response, MDC filed a cross-motion to transfer the action to the Central District of California. On May 11, 1992, the Honorable Joseph Sprizzo of the New York court denied Plaintiff's motion for summary judgment, and granted Defendant's motion to transfer the action to the Central District of California.

In the instant motion, Plaintiff moves to transfer the action to the Northern District of Texas. In the alternative, Plaintiff moves for summary judgment.

II. DISCUSSION

A. Plaintiff's Motion to Transfer

The instant action was filed in New York. Defendant subsequently moved to transfer the action to California. Defendant's motion was granted.² Plaintiff now moves the Court to transfer the action to the Northern District of Texas, based on the assertion that Texas is a more convenient forum than California.³

To support a motion for transfer the moving party must show: (1) that venue is proper in the transferor district; (2) that the transferee district is one where the action might have been brought; and (3) that the transfer will serve the convenience of the parties and witnesses and will promote the interest of justice. Mercury Serv., Inc. v. Allied Bank of Texas, 117 F.R.D. 147, 154-55 (C.D.Cal.1987), aff'd without opinion, 907 F.2d 154 (9th Cir.1990).

Venue is proper in the Central District of California because Defendant was subject to personal jurisdiction in the Central District at the time the action commenced. 28 U.S.C. § 1391(a)(3). Venue is also proper in the Northern District of Texas because the airplane crash occurred in Dallas, Texas. 28 U.S.C. § 1391(a)(2). Thus, the resolution of this motion turns on whether transfer will serve the interests of justice.

To determine whether transfer will serve the interests of justice, the Ninth Circuit has applied the following criteria: (1) plaintiff's initial choice of forum; (2) the convenience of the witnesses—the ability to mandate attendance of unwilling witnesses and the cost of obtaining willing witnesses; (3) where the events took place, and the relative ease of access to sources of proof; (4) convenience of the parties; and (5) all other practical considerations that make the trial of a case easy, expeditious and inexpensive. See Decker Coal Co. v. Commonwealth Edison Co., 805 F.2d 834, 842-43 (9th Cir. 1986).

1. Plaintiff's Choice of Forum

Plaintiff's initial choice of forum was New York. Texas is Plaintiff's second choice of venue. Plaintiff contends that Texas is a more convenient forum than California. It should have raised this argument in the New York court, and not after the case was transferred to California.

2. Convenience of the Witnesses

The majority of Goodyear's witnesses are located in Ohio. The testing and design of the brake system occurred at Aircraft Braking Systems Corporation ("ABSC"), Goodyear's successor, in Akron, Ohio. Although Goodyear asserts it has "key" witnesses located in Texas, it only identifies two.⁴

The pilot in command of the aircraft is a resident of Laguna Niguel, California. In addition, MDC intends to call seven engineers who worked on the design and certification of the brake system, all of whom reside in California. Thus, the number of witnesses and the importance of their respective testimony favors California.

3. Where the Events at Issue Took Place

The accident occurred in Dallas, Texas. This is the only contact with the state of Texas, and it has minor significance in the resolution of the instant action.

The National Transportation Safety Board ("NTSB") conducted an investigation to determine the probable cause of the accident. The investigation was conducted at the NTSB's headquarters in Washington, D.C. The certification and testing of the DC-10 brake system occurred at ABSC's headquarters in Akron, Ohio. Douglas Aircraft Company ("DAC"), MDC's unincorporated commercial aircraft manufacturing division, is located in Long Beach, California. All DC-10 aircraft were designed and produced at this location in Long Beach between 1968 and 1989. Although the accident occurred in Texas, the events which involve the brake failure occurred in California and Ohio. Thus, the balancing of crucial events supports California venue, where DC-10 aircraft were designed and produced.

4. Convenience of the Parties

Goodyear is an Ohio corporation. The policy decisions affecting Goodyear's design and manufacture of the aircraft brakes and tires were made in Ohio. Goodyear is licensed to do business in Texas, as well as every state in the United States. If the action is transferred to Texas, the only convenience to Goodyear is that it will be closer in proximity to Ohio.

MDC is a Maryland corporation, with its principal place of business in Missouri. MDC maintains an office in Texas. MDC's commercial DC-10 aircraft operation is located in Long Beach, California. California is clearly the most convenient forum for MDC.

5. Other Relevant Factors

The resulting delay if the action is transferred to Texas weighs against transfer. This action is based on an airplane crash that occurred in May, 1988. The case was originally filed on November 1, 1991. Transferring the case to Texas, some three years after the crash and a year after the case was filed would cause further unnecessary delay.

In addition, the Court notes that Judge Sprizzo was of the belief that Goodyear filed the instant action in New York based on an attempt to have Texas substantive law control. During oral argument on Defendant's motion to transfer the instant action, Judge Sprizzo stated, on three separate occasions, he believed Plaintiff filed the action in New York in an attempt to obtain a favorable choice of law analysis under New York law.⁵ The New York court's statements were based on the timing of Goodyear's filing of the action, as well as the clear lack of contact New York has with the instant action.

Upon independent review, the Court agrees that the facts indicate that Goodyear is engaging in forum shopping. Primarily, the timing of Plaintiff's filing its declaratory relief action indicates that Goodyear was forum shopping. Even assuming that MDC did not contact Goodyear until March 1991, it is undisputed that Goodyear requested six months to evaluate MDC's claim, and MDC agreed. On October 31, 1991, Goodyear sent a letter to MDC rejecting settlement efforts. The next day, November 1, 1991, Goodyear filed this action for declaratory relief. Goodyear commenced this action the first day after the expiration of the six month grace period Goodyear had requested to consider MDC's claims.

In addition, the action was filed in New York, a forum having little contact with the underlying dispute. It appears that the only contacts with New York are: that the Settlement Agreement was executed in New York; MDC sent payment to New York; and the insurance...