Bigham v. Envirocare of Utah, Inc.

• Decision Date: 06 December 2000
• Docket Number: No. CivA G-00-514.,CivA G-00-514.
• Citation: 123 F.Supp.2d 1046
• Parties: Kenneth BIGHAM and KNB Holdings, Ltd., Plaintiffs, v. ENVIROCARE OF UTAH, INC., Khosrow B. Semnani, Charles A. Judd, and Frank C. Thorley, Defendants.
• Court: U.S. District Court — Southern District of Texas

Page 1046

123 F.Supp.2d 1046

Kenneth BIGHAM and KNB Holdings, Ltd., Plaintiffs, v. ENVIROCARE OF UTAH, INC., Khosrow B. Semnani, Charles A. Judd, and Frank C. Thorley, Defendants.

No. CivA G-00-514.

United States District Court, S.D. Texas, Galveston Division.

December 6, 2000.

Gerald John Galow, Watson Bishop et al, Austin, TX, for Kenneth N Bigham, plaintiff.

Kenneth Ross Citti, Citti & Associates, Houston, TX, for Envirocare of Utah Incorporated, defendant.

ORDER OF TRANSFER

KENT, District Judge.

Plaintiffs Kenneth Bigham and KNB Holdings, Ltd. (collectively "Bigham") bring this action against Defendants Envirocare of Utah, Inc., Khosrow B. Semnani, Charles A. Judd, and Frank C. Thorley (collectively "Envirocare") seeking damages and injunctive relief for injuries allegedly sustained in violation of the Racketeer Influenced and Corrupt Organizations Act ("RICO") and the common law. Now before the Court is: (1) Defendants' Motion to Dismiss or Transfer for Improper Venue, and (2) Defendants' 28 U.S.C. 1404(a) Motion to Transfer Venue, both filed September 18, 2000. For the reasons stated below, Defendants' 1404(a) Motion to Transfer Venue is GRANTED.

I. MOTION TO DISMISS FOR IMPROPER VENUE

A RICO plaintiff may establish venue based upon either the general venue statute, 28 U.S.C. § 1391 or the special RICO venue provision in 18 U.S.C. § 1965(a). See Toyota, Inc. v. Southeast Toyota Distribs., Inc., 784 F.Supp. 306, 319 (D.S.C.1992). In a civil action, such as this, where federal subject matter jurisdiction is not based solely upon diversity of citizenship,¹ questions of venue are governed by 28 U.S.C. § 1391(b), which provides that:

A civil action wherein jurisdiction is not founded solely on diversity of citizenship may, except as otherwise provided by law, be brought only 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 may be found, if there is no district in which the action may otherwise be brought.

The RICO venue provision states that venue is proper against a person in any judicial district "in which such person resides, is found, has an agent, or transacts his affairs." 18 U.S.C. § 1965(a).

The Federal Rules of Civil Procedure authorize a court, upon suitable showing, to dismiss an action where venue in that court is improper. See Fed. R.Civ.P. 12(b)(3). Once a defendant raises the issue of proper venue by motion, the burden of proof is placed upon the plaintiff to sustain venue. See Seariver Maritime Fin. v. Pena, 952 F.Supp. 455 (S.D.Tex. 1996); 15 Charles A. Wright, Arthur R. Miller & Edward H. Cooper, Federal Practice and Procedure § 3826 (1986) ("There are cases holding that the burden is on the objecting defendant to establish that venue is improper. But `the better view,' and the clear weight of authority, is that, when objection has been raised, the burden is on the plaintiff to establish that the district he chose is a proper venue."); but see Bounty-Full Entm't, Inc. v. Forever Blue Entm't Group, Inc., 923 F.Supp. 950, 957-58 (S.D.Tex.1996). However, in the absence of an evidentiary hearing, a court should allow a plaintiff to carry this burden based upon setting forth facts that taken as true would establish venue. Cf. Wilson v. Belin, 20 F.3d 644, 648 (5th Cir.1994) (holding that when a court rules upon a motion to dismiss for lack of personal jurisdiction without holding an evidentiary hearing, "the plaintiff may bear his burden by presenting a prima facie case that personal jurisdiction is proper."). The court should accept uncontroverted facts contained in plaintiff's pleadings as true and resolve conflicts in the parties' affidavits in the plaintiff's favor. See id. Thus, while a defendant need not affirmatively disprove all bases for the plaintiff's venue choice, the court will nevertheless give plaintiff every benefit of doubt in ascertaining what facts control its legal decision.

Plaintiffs make two arguments why venue is proper in Galveston under the general venue statute. First, Plaintiffs argues that the Southern District of Texas constitutes "a judicial district in which a substantial part of the events or omissions giving rise to the claim occurred." 28 U.S.C. § 1391(b)(2). Second, Plaintiffs argue that Defendant Envirocare "resides" in this judicial district. 28 U.S.C. § 1391(b)(1).

The analysis of whether or not venue is proper in a judicial district based upon the occurrence of a "substantial part of the events or omissions" does not require the Court to decide if the Southern District of Texas is the best venue for a plaintiff's lawsuit. See Seariver Maritime, 952 F.Supp. at 459. Often, a lawsuit may allow for proper venue in more than one judicial district. See id. at 458-59. In determining whether or not venue is proper, the Court looks to the defendant's conduct, and where that conduct took place. See Woodke v. Dahm, 70 F.3d 983, 985-86 (8th Cir.1995). Actions taken by a plaintiff do not support venue. See id. at 985 (holding that the venue statute requires courts to focus not on the plaintiff's conduct but on the defendant's). Moreover, the fact that a plaintiff residing in a given judicial district feels the effects of a defendant's conduct in that district does not mean that the events or omissions occurred in that district. See id. (rejecting the plaintiff's argument that the district where the effects are felt is valid venue).

Plaintiffs in the present action set forth a litany of events or omissions that give rise to their claims under RICO and state common law. According to Plaintiffs, some of these events took place in the Southern District of Texas. Generally Plaintiffs argue that three classes of events allegedly occurred in this district. First, Plaintiffs contend that several illegal letters were written by Defendants and sent to persons in Houston, Texas, a part of this judicial district. Second, Plaintiffs recite several instances in which a Defendant personally or through a seeming agent allegedly approached persons in the Houston area and spread misinformation about Plaintiff Bigham and also harassed Bigham as well as third parties. Third, Plaintiffs contend that all of Defendants' conduct had its damaging effects on Plaintiff Bigham and his reputation in the Southern District of Texas.

Only Plaintiffs' second class of behavior can clearly be considered a venue contact.² However, Defendants' suggest that these events are somehow insignificant and cannot establish venue here. While the Court agrees that the overwhelming majority of Defendants' allegedly wrongful actions occurred outside the Southern District of Texas, the Court cannot hold that the events that did purportedly happen here are not "substantial." See Setco Enters., Corp. v. Robbins, 19 F.3d 1278, 1281 (8th Cir.1994) (holding that a court must ask "whether the district the plaintiff chose had a substantial connection to the claim, whether or not other forums had greater contacts.") Accordingly, venue is proper in the Southern District of Texas pursuant to 28 U.S.C. § 1391(b)(2).³

II. DISCRETIONARY TRANSFER OF VENUE

Defendants alternatively seek a transfer to either the Austin Division or the Midland Division of the Western District of Texas based on 28 U.S.C. § 1404(a). 28 U.S.C. § 1404(a) provides 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." 28 U.S.C. § 1404(a). Under this statute, the party seeking the transfer of venue bears the burden of demonstrating that the Court should, in its sound discretion, transfer the action. See Peteet v. Dow Chem. Co., 868 F.2d 1428, 1436 (5th Cir.1989) (noting that the decision to transfer a case rests exclusively within the sound discretion of the district court); Time, Inc. v. Manning, 366 F.2d 690, 698 (5th Cir.1966) (highlighting that the movant bears the burden of demonstrating that the action should be transferred).

When considering whether a transfer is warranted, the Court considers the following factors: the availability and convenience of witnesses and parties; the location of counsel; the location of pertinent books and records; the cost of obtaining attendance of witnesses and other trial expenses; the place of the alleged wrong; the possibility of delay and prejudice if transfer is granted; and the plaintiff's choice of forum. See, e.g., Henderson v. AT & T Corp., 918 F.Supp. 1059, 1065 (S.D.Tex.1996); Dupre v. Spanier Marine Corp., 810 F.Supp. 823, 825 (S.D.Tex.1993); Hogan v. Malone Lumber, Inc., 800 F.Supp. 1441, 1443 (E.D.Tex.1992); United Sonics, Inc. v. Shock, 661 F.Supp. 681, 682-83 (W.D.Tex.1986). Generally, a plaintiff's choice of forum is entitled to great deference. See Continental Airlines, Inc. v. American Airlines, Inc., 805 F.Supp. 1392, 1395-96 (S.D.Tex.1992) (discussing the importance of the plaintiff's choice of forum in light of the policies underlying § 1404(a)); United Sonics, 661 F.Supp. at 683 (stating that the plaintiff's choice of forum is "most influential and should rarely be disturbed unless the balance is strongly in defendant's favor").

Defendants maintain that this case should be transferred to the Western District of Texas primarily because: (1) the actions giving rise to this dispute occurred principally in the Western District of Texas; (2) there are many key nonparty witnesses in the Western District of Texas. In response, Plaintiffs argue that this case should remain in Galveston in that: (1) Defendants have not overcome the deference traditionally accorded a plaintiff's choice of forum; (2) a transfer would merely shift witness inconvenience to ...