Berman v. Informix Corp.
| Decision Date | 23 December 1998 |
| Docket Number | No. 98 Civ. 5182 (RWS).,98 Civ. 5182 (RWS). |
| Citation | 30 F.Supp.2d 653 |
| Parties | Morton BERMAN, Plaintiff, v. INFORMIX CORPORATION, Defendant. |
| Court | U.S. District Court — Southern District of New York |
Mr. Morton Berman, Brooklyn, pro se.
Lankler Siffert & Wohl, New York City by Charles T. Spada, of counsel, Wilson Sonsini Goodrich & Rosati, Palo Alto, CA by Steven M. Schatz, Laurie B. Smilan, of counsel, for Defendant.
Defendant Informix Corporation ("Informix") has moved pursuant to 28 U.S.C. § 1404(a) to transfer this action brought by Morton Berman, pro se, ("Berman"), to the Northern District of California. For the reasons set forth below, the motion is granted.
Berman filed the present action against Informix on July 29, 1998. The complaint alleges Informix engaged in various improper activities that resulted in the publication of false and misleading financial statements for the years 1995 and 1996. On August 28, 1998, Informix moved to transfer the action to the Northern District of California. The motion was deemed fully submitted on September 30, 1998.
Informix is headquartered in Menlo Park, California and designs and licenses high performance relational database management system software.
On March 31, 1997, Informix disclosed in its Annual Report on form 10-K filed with the Securities & Exchange Commission ("SEC") that as of the end of 1996, approximately $177 million worth of Informix software licenses had not been resold to end user customers, and that Informix had concurrently purchased goods or services from resellers who had purchased Informix's licenses. On April 1, 1997, Informix announced that it expected to report disappointing revenues and earnings for the recently concluded first quarter of 1997.
Following the announcements, investors filed securities fraud class action complaints against Informix and its officers in the United States District Court for the Northern District of California. See Weaver v. Informix Corporation, No. C-97-1289 SBA (N.D.Cal. April 11, 1997). By May 19, 1997, a total of twelve complaints had been filed in the Northern District of California. On August 20, 1997, these and any subsequently filed actions were consolidated.
On August 7, 1997, Informix announced its intention to restate its financial results for 1996. New complaints promptly were filed, extending the end of the alleged class period through August 7, 1997. In September 1997, responding to additional announcements by Informix, the Northern California plaintiffs filed an amended complaint, which alleged an expanded class period beginning on January 31, 1996 (the date Informix announced its 1995 results) and ending on September 22, 1997. See Kremnitzer v. Informix et al., No. C-97-1318 SBA (filed September 24, 1997). On October 17, 1997, after more than twenty complaints had been filed and more than 1,200 individual Informix shareholders had moved to lead the putative plaintiff class, U.S. District Judge Armstrong of the Northern District of California appointed lead counsel.
The lead plaintiffs then filed a consolidated amended federal complaint on April 6, 1998 (the "Consolidated Amended Complaint"). This action is now captioned In re Informix Corp. Securities Litigation, Master File No.: C 97-1289 CRB (N.D.Cal.) and is pending before U.S. District Judge Charles Breyer.
The consolidated actions also include two additional complaints brought on behalf of limited shareholder groups: Teachers Retirement System of Louisiana, et al. v. White, et al., No. C-97-02312 CRB (N.D.Ca.), and Williams v. White, et al., Case No. C-98-1096-CRB (N.D.Cal.). Both the Teachers Retirement Fund and Williams cases allege the same wrongdoing as alleged in In re Informix, and they also are pending before Judge Breyer.1
Most of Informix's witnesses and many non-party witnesses reside in Northern California. The members of Informix's senior management who managed the company's domestic operations during the time period at issue in both this action and the California actions reside in Northern California. The lower-level individuals who held positions in the company's accounting, finance and internal audit groups also reside in Northern California. Similarly, the company's outside auditors, Ernst & Young LLP (who are defendants in the Northern California securities cases but not in this action), are based in Northern California.
The relevant documents, from all over the world, are now, or soon will be, in Informix's attorneys' offices in Northern California. Most of the relevant documents are already in California. Informix has gathered a large volume of documents — approximately 1.5 million pages from around the world — that relate to the claims arising from Informix's financial restatement. All of these documents are currently stored in Northern California. Based on the review of transactions for which revenue was reversed during the restatement process, Informix has not located any relevant documents in New York to date.
I. Motion to Transfer Venue Under Section 1404(a) Is Granted
The Court has the authority, pursuant to 28 U.S.C. § 1404(a) to transfer this action to the Northern District of California. Section 1404(a) provides that:
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.
28 U.S.C. 1404(a). This section is a statutory recognition of the common law doctrine of forum non conveniens as a facet of venue in the federal courts. See Wilshire Credit Corp. v. Barrett Capital Management Corp., 976 F.Supp. 174, 180 (W.D.N.Y.1997). Section 1404(a) strives to prevent waste "`of time, energy and money' and `to protect litigants, witnesses and the public against unnecessary inconvenience and expense.'" Wilshire, 976 F.Supp. at 180 (quoting Continental Grain Co. v. Barge FBL-585, 364 U.S. 19, 27, 80 S.Ct. 1470, 4 L.Ed.2d 1540 (1960)).
"`[M]otions for transfer lie within the broad discretion of the courts and are determined upon notions of convenience and fairness on a case-by-case basis.'" Linzer v. EMI Blackwood Music Inc., 904 F.Supp. 207, 216 (S.D.N.Y.1995) (quoting In re Cuyahoga Equip. Corp., 980 F.2d 110, 117 (2d Cir.1992) (citing Stewart Org. Inc. v. Ricoh Corp., 487 U.S. 22, 29, 108 S.Ct. 2239, 101 L.Ed.2d 22 (1988))). The burden of demonstrating the desirability of transfer lies with the moving party, and in considering the motion for transfer, a court should not disturb a plaintiff's choice of forum "unless the defendants make a clear and convincing showing that the balance of convenience favors defendants' choice." Hubbell Inc. v. Pass & Seymour, Inc., 883 F.Supp. 955, 962 (S.D.N.Y.1995); see Filmline (Cross-Country) Productions, Inc. v. United Artists Corp., 865 F.2d 513, 521 (2d Cir.1989); Austin v. International Bhd. of Teamsters-Airline Div. 2747, 739 F.Supp. 206, 208 (S.D.N.Y.1990).
The defendant moving for transfer must, in essence, demonstrate "`that transfer is in the best interests of the litigation.'" Linzer, 904 F.Supp. at 216 (quoting Eskofot A/S v. E.I. du Pont de Nemours & Co., 872 F.Supp. 81, 95 (S.D.N.Y.1995)); see also Factors Etc., Inc. v. Pro Arts, Inc., 579 F.2d 215, 218 (2d Cir.1978). The movant "must support the transfer application with an affidavit containing detailed factual statements relevant to the factors [to be considered by the court in its transfer decision], including the potential principal witnesses expected to be called and a general statement of the substance of their testimony." Hernandez v. Graebel Van Lines, 761 F.Supp. 983, 987 (E.D.N.Y.1991).
The inquiry on a motion to transfer is twofold. The court must first determine whether the action sought to be transferred is one that "might have been brought" in the transferee court. Second, the court must determine whether, considering the "convenience of parties and witnesses" and the "interest of justice," a transfer is appropriate. Wilshire, 976 F.Supp. at 180.
In determining whether transfer is warranted "for the convenience of the parties and witnesses [and] in the interest of justice" under § 1404(a), courts generally consider several factors. The factors to be considered in the instant case include (1) the convenience of witnesses, (2) the convenience of the parties, (3) the location of relevant documents and the relative ease of access to sources of proof, (4) the locus of operative facts, (5) the availability of process to compel the attendance of unwilling witnesses, (6) the relative means of the parties, (7) the forum's familiarity with the governing law, (8) the weight accorded the plaintiff's choice of forum, and (9) trial efficiency and the interest of justice, based on the totality of the circumstances. See Orb Factory, Ltd. v. Design Science Toys, Ltd., 6 F.Supp.2d 203 (S.D.N.Y.1998) (citing Wilshire, 976 F.Supp. at 181); see Constitution Reinsurance Corp. v. Stonewall Ins. Co., 872 F.Supp. 1247, 1250 (S.D.N.Y.1995); Cento Group, S.p.A v. OroAmerica, Inc., 822 F.Supp. 1058, 1060 (S.D.N.Y.1993).
Venue and personal jurisdiction exist in the Northern District of California. That district encompasses the area surrounding San Francisco. Menlo Park, where Informix is headquartered, is a suburb of San Francisco within the Northern District. The public statements upon which plaintiff sues were issued by Informix at its offices in Menlo Park. Most of the company's officers worked in Menlo Park. Accordingly, this action originally could have been filed in the Northern District of California. Therefore, it is only the second inquiry that requires examination.
Application of the delineated factors reveals that defendants have met their burden under § 1404(a).
1 & 2. Convenience of the Witnesses and Parties
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