Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-casd-3_10-cv-02056/USCOURTS-casd-3_10-cv-02056-0/pdf.json

Nature of Suit Code: 190
Nature of Suit: Other Contract Actions
Cause of Action: 28:1441 Petition For Removal--Other Contract

---

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

10cv2056

UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF CALIFORNIA

GREG PASSMORE, an individual, and

3D PIPELINE CORP., a California

corporation doing business as Passmore

Labs,

Plaintiffs,

v.

CHRIS JOHNSON, an individual, and

DERMA-MED TECHNOLOGIES

CORP., an Alabama corporation,

Defendants.

 

)

)

)

)

)

)

)

)

)

)

)

)

)

)

)

Civil No. 3:10-cv-2056-JAH (BGS)

ORDER DENYING DEFENDANTS’

MOTION TO DISMISS OR, IN

THE ALTERNATIVE, TRANSFER

VENUE [DKT. NO. 18]

INTRODUCTION

Before the Court is defendants Chris Johnson and Derma-Med Technologies

Corporation’s (“Defendants”) Motion to Dismiss Based on the Anticipatory Suit

Exception to the First-to-file Rule or, in the Alternative, to Transfer Venue under 28

U.S.C. § 1404(a) (“Motion”). (Dkt. No. 18.) Plaintiffs Greg Passmore and 3D Pipeline

Corporation (“Plaintiffs”) have filed an opposition to the Motion, (Dkt. No. 21), and

Defendants have filed a reply, (Dkt. No. 22). After a careful review of the parties’

submissions, including accompanying declarations, exhibits, lodgments, and objections,

and for the reasons set forth below, the Court DENIES Defendants’ Motion.

PROCEDURAL BACKGROUND

Plaintiffs initiated this action in the Superior Court of the State of California,

Case 3:10-cv-02056-JAH-BGS Document 26 Filed 11/28/11 Page 1 of 15
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28 For ease of reference, all page numbers cited herein refer to the CM/ECF page 1

numbers of the documents indicated by docket entry number.

2 10cv2056

County of San Diego (“San Diego Superior Court”) on March 30, 2010, by filing a

complaint that asserts four causes of action: (1) breach of contract, (2) negligent

misrepresentation, (3) unjust enrichment, and (4) declaratory relief. (Dkt. No. 1 at 10. )

1

Plaintiffs’ suit arises from an apparent dispute regarding performance under a

contract the parties apparently entered into in September 2007. (Dkt. No. 1 at 13.)

Pursuant to the contract, Plaintiffs were to develop a skin scanning device for Defendants

and, in exchange, Defendants would give Plaintiffs $200,000.00 and a stock interest in

defendant Derma-Med Technologies Corporation. (Id.) The written agreement contains

the following provision: 

27. Any disagreements not covered in this Agreement that cannot be

worked out between the parties will be handled through mediation. The

parties [sic] agents shall select a mutually agreed upon state, excluding

Alabama and California, in which to handle all legal proceedings.

(Dkt. No. 18-1 at 9; Dkt. No. 9 at 65.)

After Plaintiffs filed suit in the San Diego Superior Court, Defendants filed suit in

the Texas District Court of Harris County on April 12, 2010. (Dkt. No. 18 at 19; Dkt.

No. 21 at 5.) Thereafter, on May 7, 2010, Defendants moved to dismiss or stay the San

Diego Superior Court action based on the above-referenced forum selection clause, but the

San Diego Superior Court denied the motion, finding the forum selection clause

unenforceable. (Dkt. No. 18 at 8; Dkt. No. 21 at 5.) On September 3, 2010, Defendants

filed another lawsuit in the United States District Court for the Southern District of

Alabama. (Dkt. No. 18 at 8; Dkt. No. 21 at 5.) Defendants then filed, in this Court, a

Notice of Removal on October 1, 2010, and an additional Notice of Removal on

November 23, 2010 – each seeking to remove the instant action from the San Diego

Superior Court to this Court. (Dkt. Nos. 1, 9.) In response, Plaintiffs filed a Motion to

Remand on October 7, 2010, and an additional Motion to Remand on December 6, 2010.

(Dkt. Nos. 2, 12.) On March 21, 2011, Plaintiffs withdrew both motions to remand.

Case 3:10-cv-02056-JAH-BGS Document 26 Filed 11/28/11 Page 2 of 15
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

 The parties agree the document at page 15 of Docket Number 18-1 is a true and 2

accurate copy of the letter that Morris sent Dyson. (Dkt. No. 18-1 at 2; Dkt. No. 21-2

at 2.)

 The parties agree the document at page 20 of Docket Number 18-1 is a true and 3

accurate copy of the email that Morris sent Dyson. (Dkt. No. 18-1 at 2; Dkt. No. 21-2

at 2.)

3 10cv2056

(Dkt. No. 17.) And on April 18, 2011, Defendants filed the instant motion. (Dkt. No.

18.)

BACKGROUND

It appears relations between the parties began to disintegrate during the latter half

of 2009. (Dkt. No. 18 at 7; Dkt. No. 21-2 at 2.) Thereafter, it appears the parties,

through counsel, attempted to agree upon a location (other than California or Alabama)

to mediate and litigate the dispute pursuant to the forum selection clause in the parties’

written agreement. 

Counsel for Plaintiffs, Dyson, declares that, “after two months of correspondence

and telephone contacts” between him and counsel for Defendants, he received a letter

from Morris, Defendants’ counsel, on February 5, 2010. (Dkt. No. 21-2 at 2.) In the

letter, Morris acknowledged the written agreement’s forum selection clause, asked Dyson

to call to discuss the matter, and conveyed Defendants’ desire to mediate in either

Mississippi or Florida. (Dkt. No. 18-1 at 15. ) Dyson declares that he called Morris on 2

February 5, 2010, to discuss a mediation location but the two did not reach a resolution.

(Dkt. No. 21-2 at 2.) Dyson then avers that, on February 22, 2010, he again discussed

the matter with Morris, suggesting the parties mediate in Austin, Texas. (Id.) On

February 24, 2010, Dyson received an email from Morris stating Defendants did not wish

to mediate in Texas but did want to mediate in New Orleans, Louisiana. (Dkt. No. 18-1

at 20. ) Dyson declares he and Morris spoke again on February 24, 2010, but the two 3

were again unable to reach a resolution on the issue of a mediation location. (Dkt. No.

21-2 at 2.)

On March 3, 2010, Dyson received a letter from Morris, in which Morris reiterated

Defendants’ desire to mediate in New Orleans. (Dkt. No. 18-1 at 16; Dkt. No. 21-2 at

Case 3:10-cv-02056-JAH-BGS Document 26 Filed 11/28/11 Page 3 of 15
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

 The parties agree the document at page 19 of Docket Number 18-1 is a true and 4

accurate copy of the email that Dyson sent Morris. (Dkt. No. 18-1 at 2; Dkt. No. 21-2

at 2.)

 Plaintiffs object to Defendants’ proffers of evidence regarding the purported 5

March 30, 2010, conversation between Dyson and Morris. (Dkt. No. 21 at 9.) As the

Court will explain below, however, even if the Court found that Dyson and Morris had

the conversation that Defendants assert they had on March 30, 2010, Defendants still

would not have demonstrated that an exception to the first-to-file rule applies.

Accordingly, the Court makes no findings of fact with respect to the purported March 30,

2010, conversation and therefore overrules Plaintiffs’ objections to Defendants’ proffers

on the issue as moot.

4 10cv2056

2.) Dyson responded with an email stating he was not in the position to respond to

Defendants’ request to mediate in New Orleans but that he anticipated being able to

respond within about a week. (Dkt. No. 18-1 at 19. ) The parties appear to agree that 4

Morris and Dyson did not speak again until at least March 30, 2010, at which point their

versions of events diverge.

In an affidavit, Morris swears he “was informed by Mr. Dyson on March 30, 2010

that he would let [Morris] know [Plaintiffs’] position on litigation/mediation locale ‘asap,

but certainly within the week.’” (Dkt. No. 22-2 at 4.) And in defendant Chris Johnson’s

Declaration, Johnson restates Morris’s account of the March 30, 2010, conversation as

follows:

Defendants [sic] agent called Plaintiffs [sic] agent to get an update on

Defendants’ counter offer of March 4, 2010 [regarding mediation in New

Orleans]. Plaintiffs’ agent stated in the conversation with Defendants [sic]

agent that “he would call his client (Plaintiffs) today and get confirmation

that a New Orleans, Louisiana mediation locale would work. He then stated

he would let me (Defendants [sic] agent) know something firm asap, but

certainly within this week.”

(Dkt. No. 18-1 at 2.) Attached to Johnson’s Declaration is a confirmatory email that

Morris apparently sent to his client, Johnson, that states: 

After telling me how busy he has been, [Dyson] said that he would call his

client [i.e., Plaintiffs] today and get confirmation that a New Orleans,

Louisiana mediation locale would work. 

He then stated he would let me know something firm asap, but certainly

within this week.

(Dkt. No. 18-1 at 17.)5

Case 3:10-cv-02056-JAH-BGS Document 26 Filed 11/28/11 Page 4 of 15
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

5 10cv2056

Plaintiffs filed their Complaint the same day Dyson purportedly told Morris he

would “get confirmation that a New Orleans, Louisiana mediation locale would work” –

March 30, 2010. (Dkt. No. 1 at 7.)

DISCUSSION

I. Legal Standard

Generally recognized doctrines of federal comity permit a district court to decline

jurisdiction over an action when a complaint that involves the same parties and issues has

already been filed in another district. See Kerotest Mfg. Co. v. C-O-Two Fire Equip. Co.,

342 U.S. 180, 185-86 (1952). Under those circumstances, a district court may transfer,

stay, or dismiss an action. Alltrade, Inc. v. Uniweld Products, Inc., 946 F.2d 622, 623

(9th Cir. 1991). The purpose of the first-to-file rule is to promote judicial efficiency and

should not be taken lightly. Church of Scientology v. U.S. Dep't of the Army, 611 F.2d

738, 750 (9th Cir. 1979); Alltrade, Inc., 946 F.2d at 625. 

The first-to-file rule, however, should not be applied mechanically, but “rather is

to be applied with a view to the dictates of sound judicial administration” with a goal

toward avoidance of conflicting judgments and placement of an unnecessary burden on

the federal judiciary. Pacesetter Sys., Inc. v. Medtronic, Inc., 678 F.2d 93, 95 (9th Cir.

1982); Church of Scientology, 611 F.2d at 750. Courts should consider three factors

when deciding whether to apply the first-to-file rule: (1) the chronology of the two actions,

(2) the similarity of the parties, and (3) the similarity of the issues. Alltrade, Inc., 946

F.2d at 625-26; Ward v. Follett Corp., 158 F.R.D. 645, 648 (N.D. Cal. 1994).

Absent compelling circumstances, the first-filing party should be permitted to

proceed without concern about a conflicting order being issued in a later-filed action.

Ward, 158 F.R.D. at 648. A court may determine the rule should not be applied based

on equitable considerations, such as, where the first action was filed merely as a means of

forum shopping or was filed in bad faith. Alltrade, Inc., 946 F.3d at 627. In that vein,

“[a]nticipatory suits are disfavored because they are aspects of forum-shopping.” Id. at

628 (citing Mission Ins. Co. v. Puritan Fashions Corp., 706 F.2d 599, 602 n.3 (5th Cir.

Case 3:10-cv-02056-JAH-BGS Document 26 Filed 11/28/11 Page 5 of 15
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

6 10cv2056

1983)). 

A suit is anticipatory if a plaintiff files suit upon receipt of specific, concrete

indications that a suit by the defendant is imminent. Ward v. Follett Corp., 18 F.R.D.

645, 648 (N.D. Cal. 1994) (citing Amerada Petroleum Corp. v. Marshall, 381 F.2d 661

(5th Cir. 1967)); see also Callaway Golf Co. v. Corp. Trade Inc., 2010 WL 743829, at *3-

4 (S.D. Cal. Mar. 1, 2010) (applying the same standard); see also Z-Line Designs, Inc. v.

Bell’O Int’l, LLC, 218 F.R.D. 663, 665-66 (N.D. Cal. 2003) (applying the same standard).

Another exception to the first-to-file rule applies if “the balance of convenience

weighs in favor of the later-filed action.” Ward, 18 F.R.D. at 648 (citing Alltrade, 946

F.2d at 628. This balancing analysis is analogous to the analysis undertaken to decide a

motion to transfer venue pursuant to 28 U.S.C. § 1404(a). Callaway Golf Co., 2010 WL

743829, at *3 (citing Med-Tec Iowa, Inc. v. Nomos Corp., 76 F. Supp. 2d 962, 970 (N.D.

Iowa 1999); 800-Flowers, Inc. v. Intercontinental Florist, Inc., 860 F. Supp 128, 133

(S.D.N.Y. 1994)). Pursuant to 28 U.S.C. § 1404(a), even when venue is proper, the court

has discretion to transfer an action “[f]or the convenience of parties and witnesses, in the

interest of justice, . . . to any other district or division where it might have been brought.”

Once a moving party demonstrates venue is proper in a proposed transferee court, courts

in the Ninth Circuit weigh several “private and public interest factors” to determine

whether transfer is appropriate: (1) plaintiff's choice of forum, (2) convenience of the

parties, (3) convenience of the witnesses and availability of compulsory process, (4) ease

of access to the evidence, (5) feasibility of consolidation of other claims, (6) familiarity

of each forum with the applicable law, (7) any local interest in the controversy, and (8)

the relative court congestion and time of trial in each forum. See Decker Coal Co. v.

Commonwealth Edison Co., 805 F.2d 834, 843 (9th Cir. 1986); see also Jones v. GNC

Franchising, Inc., 211 F.3d 495, 498-99 (9th Cir. 2000), cert. denied, 531 U.S. 928

(2000).

Deciding whether and how to apply the first-to-file rule is within a district court’s

sound discretion. Alltrade, 946 F.2d at 622.

Case 3:10-cv-02056-JAH-BGS Document 26 Filed 11/28/11 Page 6 of 15
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

7 10cv2056

/ / /

II. Analysis

A. First-to-file Rule Applies

Because the parties do not dispute the chronology of the two actions, the similarity

of the parties, or the similarity of the issues, the Court finds Plaintiffs have first-to-file

status. Thus, the Court must only decide whether an exception to the first-to-file rule

applies such that this Court should dismiss, stay, or transfer the instant action.

B. The Bad Faith Exception Does Not Apply

Defendants argue Plaintiffs acted in bad faith because they contributed only

“minimal efforts” in attempting to agree on a mediation location and because Dyson

purportedly told Morris he would call his clients (i.e., Plaintiffs) to obtain confirmation

that a New Orleans mediation location would work the same day Plaintiffs initiated this

action in the San Diego Superior Court. (Dkt. No. 18 at 15.) 

In opposition, Plaintiffs argue they “endeavored for months in good faith” in an

attempt to resolve the mediation location issue. (Dkt. No. 21 at 8.) Plaintiffs, however,

do not respond to Defendants’ proffers regarding the purported March 30, 2010,

conversation between Morris and Dyson. Instead, as noted above, Plaintiffs merely object

to Defendants proffers, claiming “the vast majority of ‘evidence’ submitted by Defendants

. . . is inadmissible and must be disregarded.” (Id. at 9.) Plaintiffs note that nearly a

month passed between the time Morris and Dyson corresponded on March 3 and 4, 2010,

and when Plaintiffs filed suit in the San Diego Superior Court on March 30, 2010. (Id.)

Lastly, Plaintiffs argue that, because the San Diego Superior Court ultimately found the

forum selection clause in the parties’ September 2007 agreement to be unenforceable,

Plaintiffs did not act in bad faith by commencing suit in California despite the forum

selection clause’s express bar on legal proceedings in either Alabama or California. (Id.)

Plaintiffs argue that, moreover, Defendants themselves are now seeking transfer of this

case to a forum barred by the forum selection clause – the Southern District of Alabama.

(Id.)

Case 3:10-cv-02056-JAH-BGS Document 26 Filed 11/28/11 Page 7 of 15
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

8 10cv2056

In reply, Defendants assert Plaintiffs offered no evidence that they “endeavored for

months in good faith” in an attempt to resolve the mediation location issue. (Dkt. No.

22 at 6.) Defendants further assert that no where in the correspondence between Dyson

and Morris (i.e., the exhibits attached to Johnson’s Declaration) did Dyson express

dissatisfaction with the negotiation process such that Defendants would have been alerted

to Plaintiffs’ apparent intention to file suit in violation of the forum selection clause. (Id.

at 7.) Regarding the month prior to Plaintiffs filing their Complaint, Defendants assert

their delay in following up with Plaintiffs should not be held against Defendants because,

per Dyson’s March 4, 2010, email, Dyson was to inform Morris of Plaintiffs’ decision

regarding a New Orleans mediation location within approximately a week. (Id.)

Defendants, however, do not explain the approximately twenty days that passed from

March 11, 2010, (about one week after Dyson’s March 4, 2010, email) to March 30,

2010, (the day Plaintiffs filed their Complaint) in which the parties apparently had no

contact. Lastly, Defendants assert that, with regard to filing suit in Alabama (i.e., a forum

apparently barred by the forum selection clause), “Plaintiffs are responsible for Alabama

becoming open as a potential forum due to their anticipatory California suit creating a

precedent.” (Id. at 8.)

The Court finds that Defendants have not sufficiently demonstrated that, even

accepting Defendants’ proffers of evidence as true, the Court should disregard the first-tofile rule because Plaintiffs acted in bad faith. There is no evidence that Plaintiffs promised

to negotiate the mediation location issue for a specific period of time or indicated they

would not file suit until the mediation location issue was resolved. Neither is there

evidence that Plaintiffs represented they would not challenge the forum selection clause’s

enforceability. At most, Plaintiffs’ counsel merely represented he would confirm Plaintiffs’

position on Defendants’ suggested mediation locations.

Further, nearly a month passed between the time Morris first followed up with

Dyson regarding a New Orleans mediation location and Plaintiffs’ filing of this action.

While Defendants claim they were waiting for Dyson’s response, the approximately

Case 3:10-cv-02056-JAH-BGS Document 26 Filed 11/28/11 Page 8 of 15
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

 The Court offers no opinion regarding the enforceability of the forum selection 6

clause.

 Because anticipatory suits are “aspects of forum shopping,” and because 7

Defendants’ arguments regarding the more general exception of forum shopping merely

reiterate Defendants' arguments regarding anticipatory suits, the Court considers the two

together.

9 10cv2056

twenty days that passed after Dyson was supposed to respond provided or should have

provided some indication to Defendants that Plaintiffs were not actively engaged in

resolving the mediation location issue. Further, regardless of the purported phone

conversation between Dyson and Morris on March 30, 2010, it appears Plaintiffs had

already decided to file on or about March 30, 2010. That is, it appears Plaintiffs were

going to file on or about March 30, 2010, and Morris just happened to call Dyson that

day. In that regard, what Dyson may have said on March 30, 2010, is inconsequential.

This view is supported by the position Plaintiffs took in opposition to Defendants’ Motion

to Dismiss or Stay the San Diego Superior Court action, i.e., Plaintiffs considered the

forum selection clause to be unenforceable. Defendants could have reached a similar

conclusion and filed in Alabama. 

6

In sum, Plaintiffs’ conduct did not rise to the level of bad faith. Accordingly, the

Court finds this exception to the first-to-file rule inapplicable.

C. The Forum Shopping/Anticipatory Suit Exception Does Not Apply7

The Court finds Plaintiffs’ suit was not anticipatory because Defendants have

proffered no evidence that would demonstrate Plaintiffs filed suit upon receipt of specific,

concrete indications that a suit by Defendants was imminent. As discussed above,

Defendants were proceeding under the assumption that the forum selection clause was

enforceable and were therefore engaged in choosing a neutral location at which the parties

could mediate and/or litigate their dispute. Accordingly, the Court finds Plaintiffs’ suit

was not anticipatory and therefore finds the forum shopping exception inapplicable.

D. The Balance of Convenience Exception Does Not Apply

As a preliminary matter, the Parties do not dispute this action could have been

brought in the Southern District of Alabama. Thus, the Court will address the following

Case 3:10-cv-02056-JAH-BGS Document 26 Filed 11/28/11 Page 9 of 15
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

10 10cv2056

factors to decide whether, on balance, the case should be transferred: plaintiff’s choice of

forum, convenience of the parties and witnesses and availability of compulsory process,

ease of access to the evidence, feasibility of consolidation of other claims, familiarity of

each forum with the applicable law, any local interest in the controversy, and the relative

court congestion and time of trial in each forum.

1. Plaintiffs’ Choice of Forum

Ordinarily, a strong presumption exists in favor of a plaintiff’s choice of forum.

Piper Aircraft Co. v. Reyno, 454 U.S. 235, 255 (1981). This presumption is overcome

only when private and public interest factors “clearly” point toward an alternative forum.

Id. A plaintiff’s choice of forum is entitled to only minimal consideration, however, where

the operative facts have not occurred within the plaintiff’s chosen forum and where the

chosen forum has no particular interest in the parties or the subject matter. Pacific Car

& Foundry Co. v. Pence, 403 F.2d 949, 954 (9th Cir. 1968).

Plaintiffs argue the operative facts of their Complaint (e.g., contract formation and

the development and modification of the skin scanning device) occurred within this forum

and that this forum has a strong interest in Plaintiffs themselves, as plaintiff 3D Pipeline

Corporation is a California corporation and plaintiff Greg Passmore is a California

resident. (Dkt. No. 21 at 13.)

Defendants argue Plaintiffs’ choice of forum “bears no weight in Plaintiffs [sic]

favor,” as Defendants have demonstrated Plaintiffs’ suit was anticipatory, involved forum

shopping, and was filed in bad faith. (Dkt. No. 22 at 9.)

As will be discussed below, the private and public interest factors do not clearly

point toward the alternative forum. Plaintiffs’ argument that the operative facts of

Plaintiffs’ Complaint occurred in this forum and that this forum has an interest in the

parties is supported by the allegations in Plaintiffs’ Complaint. Accordingly, the Court

finds Plaintiffs’ choice of forum is entitled to significant consideration.

2. Convenience of the Parties and Witnesses

Defendants submit they have thirty-six non-party, non-employee witnesses that will

Case 3:10-cv-02056-JAH-BGS Document 26 Filed 11/28/11 Page 10 of 15
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

 Defendants do not provide sufficient information regarding the witnesses who will 8

purportedly require compulsion to testify for the Court to assess Defendants’ ability to

compel their testimony.

11 10cv2056

testify in support of Defendants’ case. (Dkt. No. 18-2 at 18, 46-48; Dkt. No. 22-1 at 6.)

Defendants provide only a few words describing the scope of each witness’s testimony,

e.g., “System Claims,” “Capital,” and “Medical Device Standards.” (Dkt. No. 18-2 at 46-

48.) Of those witnesses, apparently nineteen are located in Alabama, two in Florida, ten

in Georgia, two in Tennessee, two in California, and one in Arizona. (Dkt. No. 18-2 at

46-48; Dkt. No. 22-1 at 6.) Defendants predict twelve of the non-Alabama witnesses will

require compulsion to testify. (Dkt. No. 18-2 at 46-48; Dkt. No. 22-1 at 6.) 8

Plaintiffs, on the other hand, submit they have fourteen non-party, non-employee

witnesses. (Dkt. No. 21-3 at 2-3.) Plaintiffs provide explanations regarding the role and

scope of testimony for each witness on their list. (Id.) Of those witnesses, apparently

nine are located in California, one in Texas, two in Nevada, and two in Kansas. (Id.) Of

those located outside of California, Plaintiffs predict the witness in Texas will require

compulsion. (Id.) Plaintiffs further anticipate that seven employee witnesses, each of

whom are located in California, will also testify. (Id.) 

In opposition to Defendants’ Motion, Plaintiffs contend that Defendants have

failed to provide any explanation as to why the testimony of Defendants’ anticipated

witnesses will be relevant. (Dkt. No. 21 at 11.) Plaintiffs assert Defendants have listed

“every individual they could think of simply to up their witness number count.” (Id.) In

support of this position, Plaintiffs note that Defendants list sixteen witnesses who will

testify regarding “System Claims,” four witnesses will testify regarding “Medical Device

Standards,” and ten witnesses will testify regarding “Capital.” (Id. at 13-14.) Plaintiffs

assert they have never heard of over eighteen of Defendants’ potential witnesses. (Id.)

In reply, Defendants do not address Plaintiffs’ implication that the testimony of the

witnesses on Defendants’ list would be cumulative. Defendants merely reassert, among

other things, that sixteen witnesses will testify regarding “System Claims,” four witnesses

will testify regarding “Medical Device Standards.” (Dkt. No. 22 at 10.) Defendants also

Case 3:10-cv-02056-JAH-BGS Document 26 Filed 11/28/11 Page 11 of 15
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

12 10cv2056

assert Plaintiffs have inappropriately bolstered their list of witnesses for purposes of this

Motion. (Dkt. No. 22 at 9-15.)

First, regarding the convenience of the parties, the Court recognizes that, in this day

and age, the convenience of parties who are already engaged in interstate business, is

entitled to less consideration than the convenience of witnesses who may have had little

to do with the decision to transact interstate business. Further, a change of venue in this

case would merely shift the apparent inconvenience from one party to the other. As such,

this factor does not weigh in favor of either party. Therefore, the Court focuses its

analysis on the convenience of the witnesses.

With respect to witnesses, the Court is not in the position, at this juncture, to

decide factual disputes regarding the necessity or scope of testimony of each party’s

witnesses. Taking the parties’ representations regarding their proposed witnesses at face

value, however, the Court finds Defendants have not adequately explained why the

testimony of each of their proposed witnesses would be necessary and, given the seemingly

redundant nature of their proposed testimonies, not cumulative. Plaintiffs, on the other

hand, have provided unique explanations regarding the role that each witness played in

the project. Thus, given the record before the Court, the Court finds consideration of the

convenience of the witnesses tips the balance in favor of Plaintiffs.

3. Ease of Access to the Evidence

In their Motion, Defendants appear to argue a majority of the events giving rise to

the allegations in Plaintiffs’ Complaint must have taken place in Alabama and, therefore,

the evidence supporting those allegations must also be in Alabama. (Dkt. No. 18 at

19-20.) Defendants assert this evidence would include Defendants’ corporate documents,

accounting records, board meeting minutes, telephone records, and the personal financial

records of defendant Chris Johnson. (Id. at 20.) Defendants submit that all of the

administrative work related to development of the skin scanning device, including

marketing efforts, was conducted in Alabama. (Dkt. No. 18-2 at 21.) Defendant Chris

Johnson also declares he modified the device's “interior/exterior connector interface” in

Case 3:10-cv-02056-JAH-BGS Document 26 Filed 11/28/11 Page 12 of 15
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

13 10cv2056

Alabama and shipped it to California. (Id. at 22.) Defendants also submit the only

non-testimonial evidence they will need for their Southern District of Alabama case is the

skin scanning device, which is currently stored at Plaintiffs’ facilities in California, and

which Defendants argue is not necessary to support the allegations in Plaintiffs’

Complaint. (Dkt. No. 18 at 20; Dkt. No. 18-2 at 18.)

Plaintiffs submit that development of the skin scanning device was undertaken

exclusively in, and that the device has always been in, San Diego, California. (Dkt. No.

21-3 at 4.) Plaintiffs further submit that all modifications of the device were carried out

in California and that the website, videos of the device, and work on the users manual

were also undertaken in California. (Id.) Lastly, Plaintiffs submit that all meetings

concerning the project and inspections of the device took place in California and that

Plaintiffs have never traveled to Alabama to work on the project. (Id. at 4-5.)

Additionally, Plaintiffs dispute that the activities Defendants point to in Plaintiffs’

Complaint actually occurred in Alabama, thus negating Defendants’ argument that a

majority of the evidence must also be in Alabama. (Dkt. No. 21 at 15.) Plaintiffs note,

for example, that Defendants claim the following activity, alleged in Plaintiffs’ Complaint,

occurred in Alabama: “by developing three completely different version of the scanner in

an attempt to satisfy the moving target of features and specifications demanded by

Defendants.” (Id.) The development of three different versions of the device, assert

Plaintiffs, was undertaken in California. (Id.) In response to Defendants’ argument that

the system is unnecessary for Plaintiffs’ case, Plaintiffs assert the system will be required

to support the allegations in their Complaint that they performed, to the extent possible,

their obligations under the parties’ agreement.

This Court finds this case centers on a contract dispute in which each party takes

issue with various representations made, either in writing or in person, regarding

performance under the contract. There is evidence relevant to this action in both Alabama

and California: administrative and financial documents in Alabama and documents related

to the development and modification of the device along with the device itself in

Case 3:10-cv-02056-JAH-BGS Document 26 Filed 11/28/11 Page 13 of 15
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

14 10cv2056

California. 

In sum, the Court finds the ease of access to the evidence in this case does not

greatly tilt the balance of these factors in either party’s favor.

4. Feasibility of Consolidation of Other Claims

Because each party argues the other party’s case should be (at least in the

alternative) transferred for consolidation with their own, the Court finds this factor to be

neutral.

5. Familiarity of Each Forum with the Applicable Law

Because the parties agree this factor is neutral, (Dkt. No. 21 at 16; Dkt. No. 22 at

16), the Court does not consider it.

6. Local Interest in the Controversy

Because each party’s argument that their chosen forum has an interest in the

controversy is based on their assertions that they are each citizens of their chosen forums,

(Dkt. No. 21 at 17; Dkt. No. 22 at 18), the Court finds this factor to be neutral.

7. Relative Court Congestion and Time of Trial in Each Forum

Defendants submit that, on average, it takes approximately twenty-nine months to

conclude a civil jury trial in the Southern District of California, whereas it takes

approximately eighteen months in the Southern District of Alabama. (Dkt. No. 22 at 17.)

Plaintiffs note that, due to Defendants’ lawsuits in Texas and Alabama, along with

Defendants’ motions to dismiss, stay, or transfer this case in both the San Diego Superior

Court and this Court, Defendants have already caused a significant delay in this case.

(Dkt. No. 21 at 16-17.)

The Court first notes that this case has been ongoing in this Court for

approximately thirteen months and, in total, for approximately twenty months. The

Court finds that, while there may be, on average, an eleven-month difference in the time

required to conclude a trial in this forum versus the Southern District of Alabama, the

additional delay that would be required to transfer this case weighs in favor of proceeding

in this forum.

Case 3:10-cv-02056-JAH-BGS Document 26 Filed 11/28/11 Page 14 of 15
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

 The Court notes that Plaintiffs objected to other statements made in the 9

declarations and affidavits filed in support of Defendants’ Motion. Because the Court did

not rely on those statements in deciding this Motion, the Court overrules Plaintiffs’

remaining objections as moot.

15 10cv2056

In sum, considering all of the above factors, the Court finds the balance of factors

does not weigh in favor of transferring this case to the District Court for the Southern

District of Alabama. Accordingly, the Court finds this exception to the first-to-file rule

does not apply. Having found that no exception to the first-to-file rule applies, the Court

must DENY Defendants’ Motion.

E. Motion to Transfer Venue

 Defendants moved, in the alternative, to transfer venue pursuant to 28 U.S.C. §

1404(a). Because the analysis under the balance of convenience exception to the

first-to-file rule mirrors the analysis under § 1404(a), and because the Court finds the

convenience factors do not weigh in favor of transfer, Defendants’ motion to transfer

under § 1404(a) is DENIED.

CONCLUSION AND ORDER

Based on a careful review of the parties’ submissions, and for the foregoing reasons,

IT IS HEREBY ORDERED that Defendants’ Motion, (Dkt. No. 18), is DENIED. The 9

case shall proceed in due course.

Dated: November 28, 2011

 

HON. JOHN A. HOUSTON

United States District Judge

cc: Magistrate Judge Skomal

Case 3:10-cv-02056-JAH-BGS Document 26 Filed 11/28/11 Page 15 of 15