Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-4_05-cv-04095/USCOURTS-cand-4_05-cv-04095-0/pdf.json

Nature of Suit Code: 820
Nature of Suit: Copyright
Cause of Action: 28:1338 Copyright Infringement

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United States District Court

For the Northern District of California

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United States District Court

For the Northern District of California

NOT FOR CITATION

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

QUANTUM SYSTEMS INTEGRATORS, 

INC.,

Plaintiff, No. C 05-4095 PJH

v. ORDER GRANTING 

MOTION TO TRANSFER

SPRINT NEXTEL CORPORATION,

Defendant.

_______________________________/

Defendant’s motion to transfer this action pursuant to 28 U.S.C. § 1404(a) came on

for hearing before this court on January 18, 2006. Plaintiff appeared by its counsel Joseph

L. Strabala, and defendant appeared by its counsel Scott Feldman. Having read the

parties’ papers and carefully considered their arguments and the relevant legal authority,

and good cause appearing, the court hereby GRANTS the motion as follows

BACKGROUND

This is a case alleging copyright infringement and conspiracy to defraud by

replicating software and by illegal use of software keys. Plaintiff Quantum Systems,

Integrators, Inc. (“Quantum”) Quantum is a Nevada corporation with its principal place of

business in Costa Mesa, California. Defendant Sprint Nextel Corporation (“Sprint Nextel”)

is a Kansas corporation with its principal place of business in Reston, Virginia. Sprint

Nextel was formed as the result of the merger of Sprint Corporation with Nextel

Communications, Inc. (“Nextel”), which was a Delaware corporation with its principal place

of business in Reston or McLean, Virginia, but also having a place of business in Oakland,

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For the Northern District of California

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California. Sprint Nextel presently maintains the Oakland facility previously operated by

Nextel. Quantum has sued Sprint Nextel in this action as the successor-in-interest to

Nextel. 

Quantum is the owner of a number of registered U.S. copyrights, which it previously

licensed to Nextel. Quantum claims that Nextel installed additional unlicensed versions of

the software, thereby infringing Quantum’s copyrights. Quantum also asserts that Nextel

employees reverse engineered Quantum’s software, and generated new software based in

part on that reverse engineering. Quantum alleges in addition that it provided Nextel with

“global keys” to be used to unlock Quantum’s software for the licensed sites, and that

Nextel employees used those keys to install illegal versions of Quantum’s software on

unlicensed Nextel sites. 

Sprint now seeks an order transferring the case to the Eastern District of Virginia,

pursuant to 28 U.S.C. § 1404(a), for the convenience of parties and witnesses.

DISCUSSION

A. Legal Standard

Under 28 U.S.C. § 1404(a), “[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 provision, the district

court has discretion to adjudicate motions to transfer based on an individualized,

case-by-case consideration of convenience and fairness. Stewart Organization, Inc. v.

Ricoh Corp., 487 U.S. 22, 29 (1988), cited in Jones v. GNC Franchising, Inc., 211 F.3d

495, 498 (9th Cir. 2000). 

Although § 1404(a) lists three factors – convenience of parties, convenience of

witnesses, and the interest of justice – rulings in motions brought under § 1404(a) can

involve a number of other considerations. The court can consider the relative ease of

access to proof, the reach of subpoena power to secure witness attendance, the feasibility

of consolidation with an action pending elsewhere, the state that is most familiar with the

governing state law, the relative means of the parties, the relative docket congestion, the

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plaintiff's choice of forum, the respective parties' contacts with the forum, the contacts

relating to the plaintiff's cause of action in the chosen forum, and the differences in the cost

of litigation in the two forums. See Schwarzer, Tashima & Wagstaffe, Federal Civil

Procedure Before Trial (2005) § 4:269, et seq.; see also Jones, 211 F.3d at 498.

B. Defendant’s Motion

Sprint Nextel argues that all the relevant factors favor transfer to the Eastern District

of Virginia. As an initial matter, Sprint Nextel asserts that the action “might have been

brought” in the Eastern District of Virginia, because Quantum and Sprint Nextel both do

business in Virginia, and because Sprint Nextel resides in that district and most of the

alleged events or omissions occurred there. Thus, Sprint Nextel contends, the court has

discretion to transfer the case, assuming that transfer would be for the convenience of

parties and witnesses and in the interest of justice.

Sprint Nextel contends that the convenience of parties and witnesses warrants

transfer, for the following reasons. First, Sprint Nextel asserts that the operative facts

occurred in Virginia, as Nextel’s Northern Virginia employees negotiated and executed the

software licensing agreement with Quantum, and Nextel managed its installation of the

software at issue predominately from its Northern Virginia facilities.

Second, Sprint Nextel claims that the majority of the parties and witnesses are in

Virginia. Sprint Nextel asserts that of the five witnesses identified in the complaint (Doug

Smith, Thomas Smith, Steven Thomas, Donovan Mitchell, and Chris Janicki), four are

former Nextel employees and/or current Sprint Nextel employees who reside and/or work in

Virginia. According to Sprint Nextel, Doug Smith, Thomas Smith, and Steven Thomas are

all residents of Virginia, and those three plus Donovan Mitchell all work for Sprint Nextel’s

headquarters in Reston, Virginia. Sprint Nextel states although Chris Janicki no longer

lives in Virginia, he does work in Cambridge Massachusetts, which is closer to Virginia than

to California. Sprint Nextel also asserts that because its engineering group in Northern

Virginia is responsible for the majority of its network engineering and operations, and

because Nextel managed the software installations predominately from its Northern Virginia

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facilities, more of Sprint Nextel’s witnesses are located in Virginia. 

Sprint Nextel also contends that there is also better access to sources of proof –

such as documents, computers, and other electronic equipment – in Virginia than in

California. Sprint Nextel acknowledges that it would be possible to ship or mail documents

to California for trial, but argues that it would be markedly easier to obtain those documents

if the trial were held in Virginia. For example, Sprint Nextel asserts that the majority of

physical records that may exist concerning Nextel’s management of the installations of the

software at issue would be maintained at Nextel’s network engineering facilities in Northern

Virginia, because Nextel managed the installation predominately from its Northern Virginia

facilities.

Finally, Sprint Nextel argues that other factors favor transfer of the action to Virginia. 

Sprint Nextel claims that practical considerations (making trial easy, expeditious, and

inexpensive) favor transfer, because nearly all the material witnesses and sources of proof

are located in or near the Eastern District of Virginia. Sprint Nextel asserts in addition that

the docket in the Northern District of California is more congested than the docket in the

Eastern District of Virginia. 

Sprint Nextel contends that the district court Virginia would be more familiar with

Virginia state law than a district court in California. Although the main cause of action

alleged in the complaint is a federal claim for copyright infringement, Sprint Nextel asserts

that the licensing agreement at issue in the case serves as a basis for one of its main

defenses to the copyright infringement claim – that Nextel had a right to unlimited internal

use of all versions of the software (a state law claim governed by Virginia law) – and that

other issues relating to Virginia law are likely to arise in the case.

Sprint Nextel submits that the selection of jurors from a community with some

genuine interest in the litigation is also a factor favoring transfer. In a related argument,

Sprint Nextel claims that there is a lack of nexus between this case and the Northern

District of California, and argues that the Eastern District of Virginia has a substantial

interest in regulating the parties and activities involved here. Sprint Nextel submits further

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that the relative ease of enforceability of a judgment, if obtained, favors transfer to Virginia.

Sprint Nextel asserts that the value of plaintiff Quantum’s choice of forum is minimal

in this case, as Quantum is not a resident of the Northern District of California. Sprint

Nextel claims that Quantum chose to file in this district as part of an exercise in forumshopping, and argues that its choice should therefore be accorded little deference. 

Quantum opposes the motion, arguing that venue is proper in this district because

Sprint Nextel has a center in Oakland and is therefore “found” here; that when venue is

proper, clear and convincing evidence of a more convenient forum is required; that Sprint

Nextel’s evidence supporting its request for transfer is flawed and incompetent; that

Quantum’s choice of venue is supported by competent evidence; that copyright

infringement actions are likely to be decided on motion based on the evidence, rather than

in a trial; that Quantum does not oppose transfer to the Central District of California if Sprint

Nextel operates a center in that district comparable to its Oakland center; that financial

equities favor this forum over Virginia; and that Quantum’s contacts with California are

extensive, entitling it to adjudication here.

Quantum argues that venue is proper here because Sprint Nextel is found here, and

that personal jurisdiction is proper here because the parties have engaged in various

business dealings here. Quantum claims that when it first had dealings with Nextel in

1994, the company was based in Lafayette, California; and that even after Nextel moved to

Virginia, it operated a network center in Oakland, and nearly all of Quantum’s face-to-face

contacts with Nextel employees were not in the state of Virginia. Quantum claims that its

own contacts with Virginia are extremely attenuated. 

Quantum claims that § 1404(a) allows only a discretionary transfer of venue, and

asserts that the moving party must meet is burden of showing that the relevant factors

strongly favor transfer. Quantum claims that most of the evidence provided by Sprint

Nextel in support of its motion is incompetent and inadmissible and has filed evidentiary

objections. Quantum contends that because of these asserted evidentiary flaws, Sprint

Nextel actually has no evidence to support its motion. 

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Quantum also argues that the motion should be denied because Sprint Nextel has

not met its burden of showing what the expected testimony of these key witnesses will be,

and because there is no claim that the witnesses would be inconvenienced by having to

attend a trial in this district. Quantum claims that the Sprint Nextel personnel can travel to

Sprint Nextel’s operations center in Oakland, a facility near this court.

Quantum contends that its choice of forum should be given weight, claiming that it

picked this particular district because Sprint Nextel has a network operations center here,

where Quantum can run a software audit to determine the existence of infringing

installations of its software by Sprint Nextel nationwide. Quantum is also willing to have the

case transferred to the Central District of California, if Sprint Nextel has an equivalent

network operations center within that district. 

Quantum asserts that California is where the most pervasive copyright infringement

occurred, and also contends that Quantum’s contacts with California are extensive. In his

declaration, Jon Strabala (“Strabala”), who has been an officer of Quantum since its

formation in February 2004, details Quantum’s contacts with the state of California and with

Nextel in California prior to the merger with Sprint. For example, Strabala asserts that

Quantum personnel wrote and developed all the software at issue in California; that Nextel

took delivery of the software in California from Quantum’s website; and that all the records,

files, and data concerning this software are in California, along with all records of e-mail

communications between Quantum personnel and Nextel and Sprint Nextel personnel. 

Quantum notes, by contrast, that Sprint Nextel never addresses exactly what records might

be found in Virginia. 

With regard to the claim that the Virginia court is better able to adjudicate a case

involving issues of Virginia law, Quantum responds that the copyright infringement claim in

this case is the center of the case, and that Virginia law is irrelevant to that cause of action. 

Quantum also contends that the issue of copyright infringement will likely be

determined on motion, and that the Virginia “rocket docket” will thus be of no more

assistance to Sprint Nextel in speeding this case along than will the scheduling of this

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court.

Quantum argues in addition that the equities of size favor Quantum’s choice of

forum, noting that Sprint Nextel has a market cap exceeding $70 billion, while Quantum is

presently has only two full-time employees. Quantum asserts that with nearly all the

records located in California, and the majority of records of copyright infringement located

outside Virginia, it would place an undue burden on Quantum to force it to travel to Virginia

to make it more convenient for a few “corporate types” there. 

In reply, Sprint Nextel argues that Quantum has misstated the applicable standard,

noting that the issue with regard to “where it might have been brought” is not whether

jurisdiction and venue are proper in this court, but whether jurisdiction and venue are

proper in the transferee court. Sprint Nextel contends that Quantum has not rebutted

Sprint Nextel’s argument that jurisdiction and venue are proper in the Eastern District of

Virginia. Sprint also contends that Quantum is wrong in asserting that the moving party

must meet a “clear and convincing” evidentiary standard, noting that Quantum’s supporting

authority is a Texas district court, while the proper standard in the Ninth Circuit is a lesser

showing (which still must be “strong”) of “inconvenience.” 

Sprint Nextel argues that Quantum’s choice of forum should be accorded little

weight, as Quantum has apparently engaged in forum shopping. Sprint Nextel asserts that

Quantum’s asserted justification for choosing this district is pretextual, as Quantum has no

right to install computer programs on Sprint Nextel’s network. Sprint Nextel contends that

Quantum has admitted that its software has a built-in autonomous reporting feature, which

notifies Quantum of the date, time, version, and the unit IP number of any installation of its

software. Thus, Sprint Nextel asserts, Quantum has already passively collected this

information, and has no need to physically invade Sprint Nextel’s network operations center

to perform any diagnostics or audits. Sprint Nextel claims that Quantum’s real reason for

wanting the case heard in this district is the convenience of its counsel – which should not

be a factor in the court’s decision. 

With regard to the issue of convenience of parties and witnesses, Sprint Nextel

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contends that Quantum’s evidence does not tip the balance in favor of this forum, but

rather supports transfer. For example, Sprint Nextel notes Quantum’s claim that only 18.56

per cent of the alleged infringements occurred in California, and argues that there is

therefore no justification for keeping the case in this district. Sprint Nextel also claims that

Nextel managed the software installations predominately from its Northern Virginia

facilities, noting that Quantum has failed to rebut that assertion. Sprint Nextel argues that

California law is irrelevant to this case, as the relevant underlying facts occurred in Virginia. 

With regard to documents and records, Sprint Nextel reiterates that its operations

are headquartered in Virginia, and that it maintains its physical records there. Sprint Nextel

also asserts that the exhibits attached to the Strabala Declaration support Sprint Nextel’s

claim that the operative facts occurred in Virginia, that the majority of parties and witnesses

are in Virginia, and that there is better access to proof in Virginia. Sprint Nextel refers to

documents indicating that the software purchased by Nextel was billed to Nextel in McLean

Virginia, and delivered to a Nextel employee with a Virginia phone number; to notices from

Quantum demanding that Nextel remove illegal installations, which were addressed to a

Nextel contracts administrator in McLean, Virginia, with carbon copies to Nextel employees

in Herndon, McLean, and Reston, Virginia; and to letters sent by Nextel to Quantum, which

were authored by and sent from a Nextel employee in Virginia. 

Sprint Nextel also argues that Quantum omits a complete discussion of the elements

of copyright infringement in order to ignore the importance of Virginia law. Sprint Nextel

notes that when a license governs a defendant’s use of copyrighted software, a plaintiff

must prove ownership of a copyright in the software, and copying of the software by the

defendant beyond the scope of the defendant’s license. Sprint Nextel claims that Nextel’s

uses of the software in this case were expressly permitted under a written license

agreement governed by Virginia law. 

With regard to Quantum’s offer to agree to a transfer to the Central District of

California, Sprint Nextel contends that this offer further demonstrates that there will be no

adverse impact on Quantum if the case were transferred from the Northern District of

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California, and that no deference should be shown to Quantum’s initial choice of forum.

With regard to Quantum’s argument that the economic equities favor keeping the

case in California, Sprint Nextel argues that transferring the case to Virginia would not

cause Quantum an undue economic burden. Sprint Nextel argues that because the

majority of parties, witnesses, and physical records are located in Virginia, it would not be

unduly burdensome for Quantum to travel to Virginia, and notes that it might be necessary

for Quantum to travel to Virginia to conduct discovery in any event. Sprint Nextel contends

that the cost of bringing Quantum’s two employees as witnesses to trial in Virginia would be

minimal, and certainly less than it would cost for all the key Sprint Nextel witnesses to travel

to California from Virginia. 

With regard to Quantum’s claim that it has extensive contacts with the state of

California, Sprint Nextel argues that Quantum has had little, if any, contact with the

Northern District of California, and reiterates that there is a substantial lack of nexus

between the underlying facts of this case and the Northern District of California.

Sprint Nextel notes that it has identified five key witnesses (all of whom are also

mentioned in Quantum’s complaint) and claims that all five reside and work on the East

Coast, and that at least four reside and/or work in Northern Virginia. Sprint Nextel argues

that because Quantum itself identified these five witnesses in the complaint, and indicated

their importance, it is not proper for it to now to object because Sprint Nextel did not state

the expected substance of their testimony in this case. 

The court finds that the motion must be GRANTED. Sprint Nextel argues, and

Quantum does not disagree, that jurisdiction and venue are proper in the Eastern District of

Virginia. Thus, the case “might have been brought” in that district. Quantum argues, and

Sprint Nextel does not disagree, that jurisdiction and venue are proper in the Northern

District of California. Thus, this court can exercise discretion to retain the case or to

transfer it. 

Quantum’s principal argument is that the court should defer to its choice of forum,

and that Sprint Nextel has failed to establish that the other factors favor transfer.

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On a § 1404(a) motion, a plaintiff's choice of forum is ordinarily accorded substantial

weight, Gulf Oil Corp. v. Gilbert, 330 U.S. 501, 508 (1947), and a court will not transfer a

case unless the "convenience" and "justice" factors tip strongly in favor of the transfer. 

Florens Container v. Cho Yang Shipping, 245 F.Supp. 2d 1086, 1092 (N.D. Cal. 2002); see

also Piper Aircraft Co. v. Reyno, 454 U.S. 235, 257 (1981); Decker Coal Co. v.

Commonwealth Edison Co., 805 F.2d 834, 843 (9th Cir. 1986). In addition, the deference

accorded to a plaintiff's chosen forum must be balanced against both the extent of a

defendant's contacts with the chosen forum and a plaintiff's contacts, including those

relating to a plaintiff's cause of action. Pacific Car and Foundry Co. v. Pence, 403 F.2d

949, 954 (9th Cir. 1968). "If the operative facts have not occurred within the forum of

original selection and that forum has no particular interest in the parties or the subject

matter, [a] plaintiff's choice is only entitled to minimal consideration." Id. 

Here, Quantum’s choice of forum is the Northern District of California. The question

is whether this district has any significant contact with the activities alleged in the complaint. 

Quantum resides in California and has always resided here – though it resides in Costa

Mesa, which is located in the Central District of California, not the Northern District. Nextel

was located in the Northern District at the time that Quantum first made contact with it, but

Sprint Nextel resides in Virginia now. Jon Strabala claims in his declaration that the

contract between Quantum and Nextel was formed and executed in California, while Sprint

Nextel claims that it was executed, at least, in Virginia, and cites to the exhibits to

Strabala’s declaration to show that Quantum was corresponding with Nextel in Virginia at

the time the parties executed the agreement. 

The parties refer to “internal installation of software” but it is not clear from the

papers whether there was an actual physical location for this installation of software, or

whether it was all done electronically, directed from Nextel’s operation in Virginia. At the

hearing, counsel for Sprint Nextel stated that after Quantum provided the source code to

Nextel, the installation was electronic. The only individuals alleged to have been involved

in the wrongdoing appear to have been located in Virginia at the time. Thus, it appears that

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the Northern District of California has no strong connection with the events alleged in the

complaint, and the court gives little weight to Quantum’s choice of forum. 

With regard to the convenience of the parties, this district is convenient for Quantum,

and the Eastern District of Virginia is convenient for Sprint Nextel. Transferring the case

would simply shift the inconvenience. Section 1404(a) provides for transfer to a more

convenient forum, "not to a forum likely to prove equally convenient or inconvenient." Van

Dusen v. Barrack, 376 U.S. 612, 646 (1964). A transfer should not be granted “if the effect

is simply to shift the inconvenience to the party resisting the transfer." Id. Thus, this factor

does not favor transfer.

With regard to the convenience of witnesses, it is Sprint Nextel’s burden, as the

moving party, to show that litigating the case in this district would be inconvenient for the

witnesses, and that transfer to Virginia would be convenient. The general rule is that if the

transfer is for the convenience of witnesses, the defendant must name the witnesses it

wishes to call, the anticipated areas of their testimony and its relevance, and the reasons

why the present forum would present a hardship to them. See, e.g., Bohara v. Backus

Hosp. Med. Benefit Plan, 390 F.Supp. 2d 957, 963 (C.D. Cal. 2005) (citations omitted); see

also Steelcase, Inc. v. Haworth, 41 U.S.P.Q.2d 1468, 1470 (C.D. Cal. 1996). This

determination, however, is not solely focused on the number of witnesses in each location,

but rather on "the materiality and importance of the anticipated witnesses' testimony" and

then on their convenience to the forum. Gates Learjet Corp. v. Jensen, 743 F.2d 1325,

1335-36 (9th Cir. 1984).

Here, Sprint Nextel lists as potential witnesses five individuals (Thomas Smith, Doug

Smith, Stephen Thomas, Donovan Mitchell, and Chris Janicki) who are named in the

complaint as Nextel employees involved in the alleged infringement and misappropriation,

four of whom are still employed by Sprint Nextel. Sprint Nextel provides evidence showing

that according to its personnel records, three of those potential witnesses reside in Virginia,

one resides in Maryland, and one resides in Massachusetts. Sprint Nextel argues that it

would be inconvenient for them to travel to California for the trial. 

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However, Sprint Nextel says nothing about the content of the witnesses’ expected

testimony, provides no details regarding why it would be a hardship for them to come to

California, and lists no other witnesses besides the individuals identified in the complaint. 

On the other hand, Quantum says nothing about its own potential witnesses and offers no

representation that the individuals named in the complaint would not be called as witnesses

at trial. 

This factor slightly favors transfer, despite Sprint Nextel’s failure to articulate why the

testimony of these witnesses is essential to the case, or to show why it would be

inconvenient for them to travel to California for a trial. The fact that these five individuals

are identified in the complaint as having participated in the alleged unlawful replication of

software and use of software keys strongly supports a finding that their testimony will prove

essential to Quantum’s case. All five witnesses are located on the East Coast, and neither

side has identified any witnesses located on the West Coast. Obvious hardship factors

would include travel expenses and time away from work. 

With regard to the question of access to proof – the location of documents and other

physical evidence – Sprint Nextel has made an adequate showing that the relevant records

are located at its headquarters in Virginia. Where a motion to transfer is based on the

location of records and documents, the moving party must show particularly the location,

difficulty of transportation, and the importance of such records. Bohara, 390 F.Supp. 2d at

963. Sprint Nextel asserts that the majority of physical records that may exist concerning

Nextel’s management of the installations of the Quantum software would be maintained at

Sprint Nextel’s Virginia network engineering facilities. The court finds that Sprint Nextel has

met its burden of showing that any essential documents are located at its Virginia facility. 

This factor is neutral, however, as Sprint Nextel has not established the difficulty of

transporting the documents to California.

Most of the remaining factors slightly favor transfer. With regard to the relative

congestion of dockets, it is true that the judges in the Northern District of California have

more cases per capita than the judges in the Eastern District of Virginia, and that the

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amount of time from filing to disposition is shorter in the Eastern District of Virginia than in

this district. 

With regard to the familiarity with the governing law, this factor is applicable only with

regard to Sprint Nextel’s affirmative defense, the substance of which involves an

interpretation of the license agreement, which is governed by Virginia law. However, the

issue raised in that affirmative defense appears to be significant, with regard to the

question of Sprint Nextel’s use of the licensed software in multiple internal locations. 

With regard to the selection of jurors from the community with an interest in the

litigation, the question of the enforceability of any judgment, the court finds that those

factors also slightly favor transfer. In addition to seeking damages (which plaintiff should

not have trouble collecting from anywhere), the complaint also seeks injunctive relief and

an accounting. It would be marginally easier for a Virginia court to oversee that type of

relief against Sprint Nextel than for this court.

The only factor that conclusively falls on the side of denying the motion is the

comparative equities of size. 

CONCLUSION

In accordance with the foregoing, the court GRANTS the motion, and TRANSFERS

this case to the Eastern District of Virginia. In the absence of a nexus with this district, the

court gives little weight to Quantum’s choice of forum. Neither side has made a convincing

argument for transferring the case to the Central District of California, and the court finds

no compelling reason for the case to continue in this district. Moreover, the convenience of

witnesses, the relative congestion of dockets, the familiarity with governing law, and the

ease of enforceability of any judgment all favor transfer to the Eastern District of Virginia. 

IT IS SO ORDERED.

Dated: February 16, 2006. ______________________________

PHYLLIS J. HAMILTON

United States District Judge

Case 4:05-cv-04095-PJH Document 38 Filed 02/16/06 Page 13 of 13