Fimco, Inc. v. Funk
| Decision Date | 05 December 2016 |
| Docket Number | No. C16-4109-LTS,C16-4109-LTS |
| Parties | FIMCO, INC., Plaintiff, v. CHAD FUNK, Defendant. |
| Court | U.S. District Court — Northern District of Iowa |
This case is before me on a motion (Doc. No. 12) to transfer venue filed by defendant Chad Funk. Plaintiff FIMCO, Inc. (FIMCO), has filed a resistance (Doc. No. 21) and Funk has filed a reply (Doc. No. 28). Neither party requested oral argument and, in any event, I find that oral argument is not necessary. See N.D. Ia. L.R. 7(c). The motion is ready for decision.
FIMCO, an agricultural equipment sales company, is incorporated in Iowa and has its principal place of business in South Dakota. Funk, a former FIMCO employee, has been a citizen of Nebraska at all times relevant to this case.
Funk's employment with FIMCO began in September 2013. On September 16, 2013, the parties entered into a non-compete and confidentiality agreement (the Agreement). Funk signed the Agreement in Nebraska. Among other things, the Agreement requires Funk to refrain, for a period of one year following the termination of his employment, from (1) accepting employment with any entity that competes with FIMCO within a defined geographic area and (2) soliciting the FIMCO customers with whom he worked. The Agreement contains a South Dakota choice-of-law clause but does not contain a forum-selection provision.
As a FIMCO employee, Funk called on FIMCO customers in both Iowa and Nebraska. On February 16, 2016, Funk's employment with FIMCO ended. Soon thereafter, Funk began working for Heartland Ag, a company that sells agricultural sprayers and competes directly with FIMCO. Heartland Ag is a Nebraska corporation with headquarters in Grand Island, Nebraska. As a Heartland AG employee, all of Funk's duties are performed in Nebraska and he only calls on customers located in Nebraska.
FIMCO filed this action in the Iowa District Court for Woodbury County on July 14, 2016. The state court petition (Doc. No. 3) asserts claims of breach of contract, misappropriation of trade secrets and breach of fiduciary duty. FIMCO alleges that Funk used FIMCO's confidential information in violation of the Agreement. FIMCO also alleges that Funk's employment with Heartland Ag and his contact with his previous FIMCO customers in Nebraska constitute breaches of the Agreement.
On August 17, 2016, Funk filed a notice (Doc. No. 2) of removal to this court pursuant to 28 U.S.C. § 1446 on the basis of diversity jurisdiction. Doc. No. 2. On August 24, 2016, Funk filed an answer (Doc. No. 5) denying FIMCO's claims and alleging various affirmative defenses. Funk then filed his present motion requesting a transfer of venue to the District of Nebraska.
28 U.S.C. § 1404(a) provide that "[f]or the convenience of the 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). "The statute 'was draftedin accordance with the doctrine of forum non conveniens, permitting transfer to a more convenient forum, even though the venue is proper." In re Apple, Inc., 602 F.3d 909, 912 (8th Cir. 2010) (quoting Van Dusen v. Barrack, 376 U.S. 612, 634 n. 30 (1964) (). Courts must consider "three general categories of factors . . . when deciding a motion to transfer: (1) the convenience of the parties, (2) the convenience of the witnesses, and (3) the interests of justice." Terra Int'l, Inc. v. Miss. Chem. Corp., 119 F.3d 688, 691 (8th Cir. 1997). However, a court is not limited to those three categories and must engage in a Id.
"[F]ederal courts give considerable deference to a plaintiff's choice of forum." Fru-Con Const. Corp. v. Controlled Air, Inc., 574 F.3d 527, 540 (8th Cir. 2009) (quoting Terra Int'l, Inc., 119 F.3d at 695). The party seeking transfer bears the burden of showing that the balance of factors "strongly" favors the movant. See K-V Pharm. Co. v. J. Uriach & CIA, S.A., 648 F.3d 588, 597 (8th Cir. 2011) ().
Venue of an action may be transferred only to "any other district or division where it might have been brought." 28 U.S.C. § 1404(a). Funk contends that FIMCO could have brought this action in the District of Nebraska. FIMCO agrees. See Doc. No. 21-1 at 4 n.3. However, FIMCO faults Funk for failing to "identify the division he claims would be more convenient." Id. at 4. Funk responds by noting that the entire state of Nebraska consists of one federal district court, which is not statutorily divided into separate divisions. See 28 U.S.C. § 107 (). By contrast, for example, the Northern and Southern Districts of Iowa are statutorily divided into various divisions on a county-by-county basis. See 28 U.S.C. § 95. I find that Funk's request to transfer venue is as specific as possible and meets the Section 1404(a) requirements.
In balancing the convenience factor, the Court may consider:
(1) the convenience of the parties, (2) the convenience of the witnesses—including the willingness of witnesses to appear, the ability to subpoena witnesses, and the adequacy of deposition testimony, (3) the accessibility to records and documents, (4) the location where the conduct complained of occurred, and (5) the applicability of each forum state's substantive law.
Terra Int'l, Inc., 119 F.3d at 697.
Funk contends that the District of Nebraska is a more convenient forum for the parties because the complained of actions occurred in Nebraska and Funk is a Nebraska resident. FIMCO contends that the current forum, Sioux City, Iowa, is more convenient for the parties because (a) FIMCO's headquarters are located in Dakota Dunes, South Dakota, which is just across the border from Sioux City, and (b) the Sioux City courthouse is closer to Funk's own resistance than are any of the courthouses in the District of Nebraska.
I agree with FIMCO's mileage calculations and find that this factor weighs against transfer. As a matter of pure geography, the courthouse in Sioux City is more convenient for both parties.
In considering the convenience of witnesses, "the Court must focus on non-party witnesses, since 'it is generally assumed that witnesses within the control of the party calling them, such as employees, will appear voluntarily in a foreign forum.'" Cosmetic Warriors Ltd. v. Abrahamson, 723 F. Supp. 2d 1102, 1106 (D. Minn. 2010) (quoting Austin v. Nestle USA, Inc., 677 F. Supp. 2d 1134, 1138 (D. Minn. 2009)). Thus, while FIMCO points out that all of its employee-witnesses work in nearby Dakota Dunes, South Dakota, that fact is of limited relevance.
As for non-party witnesses, Funk argues that they include (a) representatives of his new employer, Heartland Ag, and (b) customers with whom Funk has allegedly contacted in violation of the Agreement. Funk contends that all such witnesses reside in Nebraska and are outside this court's subpoena power.1 FIMCO does not deny that the likely non-party witnesses reside in Nebraska but argues (a) that Heartland Ag is based in Iowa and (b) that some of the non-party witnesses reside closer to Sioux City than to any courthouse in the District of Nebraska.
In contending that Heartland Ag is based in Iowa, FIMCO relies on a Heartland Ag website indicating that the company not only sells products in Iowa but actually has its main office in Ames, Iowa. See Doc. No. 21-1 at 10 (). Funk responds by accusing FIMCO of citing to "a website for a legal entity distinct from Heartland Ag, Inc." Doc. No. 28 at 2. Funk further claims:
[t]he entity cited by Plaintiff does not employ Funk and has no relevance to this case. Heartland Ag, Inc., the entity that employs Funk, maintains a different website, which clearly denotes that its headquarters are in Grand Island, Nebraska.
Id. (citing a website located at http://heartlandag.net/about.htm (the Second Website).
To put it mildly, comparing the two websites does not help Funk. The First Website states that the Heartland Ag operation in Grand Island, Nebraska, is a "branch office/warehouse" and indicates that the company's "main facilities are located in Ames, Iowa." The Second Website identifies the same street address and telephone numbers for the Grand Island operation that are referenced in the First Website. The design, color scheme and logos are virtually identical as between the two websites. In combination, the websites strongly suggest exactly what the First Website states: Heartland Ag is based in Ames, Iowa, and operates a "branch office/warehouse" in Grand Island, Nebraska. Funk provides no evidence supporting his contention that the Heartland Ag with whom he is employed is a "legal entity distinct from" the Heartland Ag that has its "main facilities" in Ames, Iowa. Absent such evidence, I must agree with FIMCO that Funk is employed in Nebraska by an entity based in Iowa.
This finding does not automatically tilt this factor in FIMCO's direction, as FIMCO has not identified any Heartland Ag employees based in Iowa as potential witnesses. Instead, FIMCO notes that the distance from Grand Island to Sioux City is not...
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