Noetic Specialty Ins. Co. v. N.C. Mut. Wholesale Drug Co.

• Decision Date: 24 March 2020
• Docket Number: Civil Action No. 1:19-cv-1555
• Citation: 453 F.Supp.3d 842
• Parties: NOETIC SPECIALTY INSURANCE COMPANY, Plaintiff, v. The NORTH CAROLINA MUTUAL WHOLESALE DRUG COMPANY, Defendant.
• Court: U.S. District Court — Eastern District of Virginia

453 F.Supp.3d 842

NOETIC SPECIALTY INSURANCE COMPANY, Plaintiff,

v.The NORTH CAROLINA MUTUAL WHOLESALE DRUG COMPANY, Defendant.

Civil Action No. 1:19-cv-1555

United States District Court, E.D. Virginia, Alexandria Division.

Signed March 24, 2020

Kelly Marie Lippincott, Gordon Rees Scully Mansukhani, LLP, Alexandria, VA, for Plaintiff.

Harold Edward Johnson, Williams Mullen, Richmond, VA, for Defendant.

ORDER

T. S. Ellis, III, United States District Judge At issue in this insurance coverage dispute is defendant's motion to transfer this matter pursuant to 28 U.S.C. § 1404(a) to the Middle District of North Carolina, the forum in which the majority of the related underlying lawsuits have been brought and the forum in which a similar insurance coverage lawsuit against defendant is currently pending. The matter has been fully briefed and thus is ripe for disposition.

For the reasons that follow, the transfer calculus mandated by 28 U.S.C. § 1404(a) points persuasively to the conclusion that this matter is appropriately transferred to the Middle District of North Carolina.

I.

Plaintiff, Noetic Specialty Insurance Company ("Noetic"), is a Vermont corporation that sells insurance. The parties dispute whether Noetic's principal place of business is Montpelier, Vermont or Chantilly, Virginia.¹ Defendant, The North Carolina Wholesale Drug Company ("N.C. Mutual"), is a pharmaceutical distribution company incorporated and headquartered in North Carolina.

N.C. Mutual has sought insurance coverage from Noetic in connection with forty-one lawsuits arising out of N.C. Mutual's role in the sale and distribution of opioid products in North Carolina and South Carolina. On December 11, 2019, Noetic filed the instant action in the Eastern District of Virginia seeking a declaratory judgment pursuant to 28 U.S.C. § 2201 that the insurance policy Noetic issued to N.C. Mutual does not provide coverage for any liability arising out of the underlying opioid distribution related claims against N.C. Mutual. On February 14, 2020, N.C. Mutual filed its motion to transfer this matter to the Middle District of North Carolina pursuant to 28 U.S.C. § 1404(a).

II.

The analysis under § 1404(a) is too well-settled to merit extended discussion here. As an initial matter, § 1404(a) only allows transfer to a transferee district if the case "might have been brought" in that district in the first instance. 28 U.S.C. § 1404(a). The movant must show at the threshold that personal jurisdiction and venue would have been proper in the transferee forum. See Hoffman v. Blaski , 363 U.S. 335, 342–43, 80 S.Ct. 1084, 4 L.Ed.2d 1254 (1960). And importantly, the party seeking transfer cannot overcome this hurdle simply by waiving these requirements as to itself. Id. at 343–44, 80 S.Ct. 1084. Only if § 1404(a)'s threshold requirements are met may a case be transferred "for the convenience of the parties and witnesses, [and] in the interest of justice ...." 28 U.S.C. § 1404(a).

Here, neither party disputes that personal jurisdiction and venue would be proper in the Middle District of North Carolina.² N.C. Mutual is organized under North Carolina law and has its principal place of business in Durham, North Carolina.

Thus, the Middle District of North Carolina has personal jurisdiction over N.C. Mutual. See Goodyear Dunlop Tires Operations, S.A. v. Brown , 564 U.S. 915, 924, 131 S.Ct. 2846, 180 L.Ed.2d 796 (2011) (a corporation's principal place of business is a basis for the exercise of general jurisdiction). Moreover, the Middle District of North Carolina is an appropriate venue for this matter pursuant to 28 U.S.C. § 1391(b)(1). Title 28 U.S.C. § 1391(b)(1) provides that a civil action may be brought "in a judicial district in which any defendant resides." N.C. Mutual maintains its principal place of business in the Middle District of North Carolina, and thus resides within that district. See 28 U.S.C. § 1391(c)(2) (a defendant corporation resides in any district in which it is subject to personal jurisdiction). Accordingly, venue is proper in the Middle District of North Carolina pursuant to § 1391(b)(1).

III.

Where, as here, § 1404(a)'s threshold requirements are satisfied, a district court may transfer a civil action to any other appropriate district court "for the convenience of parties and witnesses, [and] in the interest of justice ...." 28 U.S.C. § 1404(a). The decision whether to transfer is committed to the sound discretion of the district court. Southern R. Co. v. Madden , 235 F.2d 198, 201 (4th Cir. 1956). In determining whether to grant a motion to transfer under § 1404(a), a court considers and balances a variety of factors, including (i) the weight accorded to plaintiff's choice of venue; (ii) witness convenience and access; (iii) convenience of the parties; and (iv) the interest of justice. See Trustees of the Plumbers & Pipefitters Nat. Pension Fund v. Plumbing Servs., Inc. , 791 F.3d 436, 444 (4th Cir. 2015) ; see also U.S. Ship Mgmt., Inc. v. Maersk Line, Ltd. , 357 F. Supp. 2d 924, 936 & n. 28 (E.D. Va. 2005).³

A.

In balancing the relevant factors, there is "ordinarily a strong presumption in favor of the plaintiff's choice of forum."

Piper Aircraft Co. v. Reyno , 454 U.S. 235, 255, 102 S.Ct. 252, 70 L.Ed.2d 419 (1981). But this principle is not conclusive; a plaintiff's choice of forum is not entitled to substantial weight if the plaintiff chooses a foreign forum, or the cause of action bears little or no relation to that forum. U.S. Ship Mgmt., Inc. , 357 F. Supp. 2d at 936.

In this respect, the parties dispute whether Virginia is Noetic's home forum. Noetic argues that Virginia is its home forum because Noetic's main administrative office is located in Chantilly, Virginia and because Noetic avers that the Chantilly, Virginia office is the nerve center for the day-to-day operations related to its "Life Sciences" policies, including the policy at issue here. N.C. Mutual counters that the policy at issue explicitly identifies Montpelier, Vermont as Noetic's "home office", that Noetic's quarterly financial statements identify Noetic's "Statutory Home Office" as located in Vermont, and that its quarterly financial statements provide that Noetic adheres to rules prescribed by the Vermont Commissioner of Insurance.

On this record, Noetic's home forum is Vermont, the state in which it is incorporated and where its home office is located. Although Noetic avers that its Virginia office is the company's nerve center for its "Life Sciences" policies, a corporation has only a single nerve center, not a nerve center for each of its business segments. See Hertz Corp. v. Friend , 559 U.S. 77, 93, 130 S.Ct. 1181, 175 L.Ed.2d 1029 (2010) ("A corporation's ‘nerve center,’ usually its main headquarters, is a single place."). Accordingly, although Noetic has an office in Virginia, Noetic's choice of forum receives less deference because Noetic has not brought suit in its home forum of Vermont.

Moreover, "the plaintiff's choice [of forum] is entitled to less weight where there is little to connect the chosen forum with the cause of action." Bd. of Trustees, Sheet Metal Workers Nat. Fund v. Baylor Heating & Air Conditioning, Inc. , 702 F. Supp. 1253, 1256 (E.D. Va. 1988). Here, the claim at issue is more closely tied to North Carolina than Virginia. The vast majority of the underlying opioid distribution related suits against N.C. Mutual have been brought by North Carolina plaintiffs.⁴ Thus, the underlying events for which coverage is sought primarily took place in North Carolina. See TRAVCO Ins. Co. v. Ward , 2010 WL 11570116 *2 (E.D. Va. 2010) ("[I]n an insurance coverage action, to establish venue via [ § 1391(b)(2) ], a court looks to the underlying events for which coverage is sought."). Moreover, the insurance policy in dispute was issued in North Carolina pursuant to North Carolina law. Accordingly, the overwhelming majority of events that give rise to this litigation occurred in North Carolina, and this is a further reason that Noetic's choice of forum of Virginia is not entitled to substantial weight.

Because Vermont is Noetic's home forum and because North Carolina has a significantly greater connection to the underlying claims at issue, plaintiff's choice of forum is entitled to less deference than it is typically accorded. See Convergence Techs. (USA) LLC v. Microloops Corp. , 711 F. Supp. 2d 626, 641-42 (E.D. Va. 2010) ("[W]hether Virginia has a substantial connection to the events giving rise to the litigation remains, at best, unclear, and therefore [plaintiff's] choice of its home forum should receive less deference than it is typically accorded."). Accordingly, there is no presumption in favor of Noetic's choice of forum in this case.

B.

The convenience of the parties and witnesses is the next § 1404(a) factor to consider. Importantly, the purpose and function of § 1404(a) is not to "shift the balance of inconvenience" from defendant to plaintiff. See Smithfield Packing Co., Inc. v. V. Suarez & Co., Inc. , 857 F. Supp. 2d 581, 589 (E.D. Va. 2012) ; Board of Trustees, Sheet Metal Workers Nat. Fund v. Baylor Heating & Air Conditioning, Inc. , 702 F. Supp. 1253, 1259 (E.D. Va. 1988). In this respect, insurance coverage disputes often do not require much discovery or witness testimony.⁵ N.C. Mutual, however, argues that fact witness testimony may be necessary in this case because the complaint alleges that "N.C. Mutual had prior knowledge of the alleged harm posed by the opioid epidemic" and Noetic is not obligated to provide coverage because of N.C. Mutual's prior knowledge. Dkt. 1, at ¶¶ 59-68. To the extent such testimony is necessary, N.C. Mutual has provided the names and business addresses of potential witnesses, and these potential witnesses work in the Middle District of North Carolina. Accordingly, the convenience for witnesses weighs slightly in favor of N.C. Mutual in this case, but it is not a significant factor given that the nature of this claim...