Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_16-cv-01914/USCOURTS-cand-3_16-cv-01914-1/pdf.json

Nature of Suit Code: 190
Nature of Suit: Other Contract Actions
Cause of Action: 28:1332 Diversity-Breach of Contract

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United States District Court

Northern District of California

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

AT&T CORP.,

Plaintiff,

v.

TELIAX, INC.,

Defendant.

Case No. 16-cv-01914-WHO 

ORDER DENYING MOTION TO 

CHANGE VENUE

Re: Dkt. No. 10

INTRODUCTION

Plaintiff AT&T Corp. contends in this case that defendant Teliax, Inc. failed to make 

payments pursuant to a contract between the parties. Teliax seeks to transfer the case from this 

district to the District of Colorado. Because Teliax waived personal jurisdiction, venue is proper 

in this district. A discretionary transfer under 28 U.S.C. § 1404(a) is unwarranted. Teliax’s 

motion is DENIED. 

BACKGROUND

AT&T provides national telecommunication and information services. Compl. ¶ 1 [Dkt. 

No. 1]. AT&T is a New York corporation with its principal place of business in Bedminster, New 

Jersey. Id. Teliax is a carrier certified by the California Public Utilities Commission to provide 

telephone exchange services to users in California. Id. ¶ 2. Its principal place of business is in 

Denver, Colorado and it is incorporated in Colorado. Id.

Around July 2011, AT&T and Teliax entered into a contract in which AT&T agreed to 

provide Voice Over IP Connect Service (“AVOICS”) to Teliax under contractually specified terms 

and conditions. Id. ¶¶ 6-7. AVOICS is an internet communication software that Teliax 

subscribers used for long-distance calls. Id. ¶ 7. In exchange for these services, Teliax agreed to 

pay AT&T a monthly fee, plus extra charges associated with late payments. Id.

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AT&T performed its obligations under the contract from October 2011 to September 2015. 

Id. ¶ 8. It asserts that Teliax stopped making many of its payments beginning around May 2014. 

Id. ¶ 9. AT&T issued multiple demands for payment and ultimately terminated its services around 

September 2015. Id. ¶¶ 10-11. As a result, Teliax allegedly owes AT&T at least $382,497.29 

including late payment charges. Id. ¶ 12.

The complaint consists of two claims, a breach of contract claim and a “Common Count -

Open Book Account” claim based on liquidated damages stemming from the breach of contract 

allegation. AT&T contends that venue is proper in the Northern District of California under 28 

U.S.C. § 1391(b)(2) because a substantial part of the events or omissions under the AVOICS 

Contract occurred in this district. Id. ¶ 5. According to AT&T, Teliax “substantially performed” 

the Contract in California “based on Teliax’s termination of access services to end users in [this 

state].” Id. ¶ 4. Additionally, about 80% of the AVOICS calls terminated in California and “the 

largest portion of end users [were] located in Northern California.” Id. ¶ 8. 

LEGAL STANDARD

Federal Rule of Civil Procedure 12(b)(3) allows a party to move to dismiss a case for 

improper venue. The question of whether venue is “wrong” or “improper” is generally governed 

by 28 U.S.C. § 1391. When venue is challenged, the court must determine whether the case falls 

within one of the three categories set out in § 1391(b). If it does, venue is proper. If it does not, 

venue is improper, and the district court “shall dismiss, or if it be in the interests of justice, transfer 

such case to any district or division in which it could have been brought.” 28 U.S.C. § 1406(a). 

Additionally, 28 U.S.C. § 1404(a) provides 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 the action might have been brought.” The purpose of this section is to 

“prevent the waste of time, energy, and money and to protect litigants, witnesses and the public 

against unnecessary inconvenience and expense.” Van Dusen v. Barrack, 376 U.S. 612, 616 

(1964) (internal citations and quotations omitted). The moving party bears the burden of showing 

that the inconvenience of litigating in this forum favors transfer. Florens Container v. Cho Yang 

Shipping, 245 F. Supp. 2d 1086, 1088 (N.D. Cal. 2002). A motion for transfer lies within the 

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broad discretion of the district court, and must be determined on an individualized basis. Jones v. 

GNC Franchising, Inc., 211 F.3d 495, 498 (9th Cir. 2000).

DISCUSSION

Teliax moves under Rule 12(b)(3) to have this case transferred to the District of Colorado 

pursuant to 28 U.S.C. § 1406 or, alternatively, to transfer venue for “convenience” purposes under 

28 U.S.C. § 1404. 

I. 28 U.S.C. § 1406

Under 28 U.S.C. § 1406(a), “[t]he district court of a district in which is filed a case laying 

venue in the wrong division or district shall dismiss, or if it be in the interest of justice, transfer 

such case to any district or division in which it could have been brought.” Venue is proper in “a 

judicial district in which any defendant resides,” or “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). A defendant is 

deemed to reside in any judicial district in which it is subject to personal jurisdiction at the time 

the action is commenced. 28 U.S.C. § 1391(c). It is the plaintiff’s burden to demonstrate that

venue is proper. Piedmont Label Co. v. Sun Garden Packing Co., 598 F.2d 491, 496 (9th Cir. 

1979).

AT&T asserts that venue is proper in this district because Teliax failed to argue lack of 

personal jurisdiction in its motion. Oppo. at 6 [Dkt. No. 18]. A party waives a defense based on 

lack of personal jurisdiction by omitting it from its first Rule 12(b) motion. Fed. R. Civ. P. 12(h). 

In its reply brief, Teliax concedes that it waived its right to challenge personal jurisdiction but 

argues that venue is nonetheless improper. Reply at 6 (“AT&T is also correct that Teliax waived 

its right to challenge personal jurisdiction by not raising it in a 12(b) motion.”). But, because 

Teliax did not contest personal jurisdiction, it is therefore “subject to personal jurisdiction” in this 

district for the purposes of establishing venue. 28 U.S.C. § 1391; see also Wright & Miller § 

3811.1Particular Classes of Parties – Corporations, 14D Fed. Prac. & Proc. Juris. § 3811.1 (4th 

ed.) (“[I]f an entity defendant waives its right to object to personal jurisdiction, it has ipso facto 

consented to venue under [28. U.S.C. § 1391]. It is, after all, ‘subject to personal jurisdiction with 

respect to the civil action in question.’”); Underberg v. Employers Mut. Cas. Co., No. 15-cv-112, 

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2016 WL 1466506, at *5 (D. Mont. Apr. 14, 2016) (holding that because the defendant did not 

challenge personal jurisdiction, it waived its right to do so under Rule 12(h)(1) and therefore 

venue was proper under 28 U.S.C. § 1391(1)). Accordingly, no transfer or dismissal is proper

pursuant to 28 U.S.C. § 1406. 

II. 28 U.S.C. § 1404

Section 1404(a) provides: “For 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 USC § 1404(a). “Unlike § 1406(a), § 1404(a) does not condition transfer 

on the initial forum’s being ‘wrong.’” Atl. Marine Const. Co. v. U.S. Dist. Court for W. Dist. of 

Texas, 134 S. Ct. 568, 579 (2013). A motion to transfer venue under section 1404 requires a 

consideration of multiple factors including: “(1) the location where the relevant agreements were 

negotiated and executed, (2) the state that is most familiar with the governing law, (3) the 

plaintiff’s choice of forum, (4) the respective parties’ contacts with the forum, (5) the contacts 

relating to the plaintiff’s cause of action in the chosen forum, (6) the differences in the costs of 

litigation in the two forums, (7) the availability of compulsory process to compel attendance of 

unwilling non-party witnesses, and (8) the ease of access to sources of proof.” Jones, 211 F.3d at 

498-99.

Teliax has not made the required “strong showing” that this case should be transferred to 

the District of Colorado. See Decker Coal Co. v. Commonwealth Edison Co., 805 F.2d 834, 843 

(9th Cir. 1986) (“The defendant must make a strong showing of inconvenience to warrant 

upsetting the plaintiff’s choice of forum.”). Many of the factors, including the governing law, the 

location where the agreements were executed, and the ease of access to sources of proof, do not 

weigh in favor of either forum. For example, the parties agree that New York law governs the 

contract at issue. Both this district and the District of Colorado would be equally positioned to 

apply New York law. Further, Teliax contends that given that the contract was negotiated and 

executed in Colorado, “most” of the documents related to AT&T’s breach of contract claim are 

expected to be in Colorado. Mot. at 8 [Dkt. No. 10]. But AT&T, which is likely more familiar 

with the evidentiary basis for its complaint, asserts that the relevant documents have been 

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generated and maintained electronically and therefore can be accessed from computers 

nationwide. See Lax v. Toyota Motor Corp., 65 F. Supp. 3d 772, 780 (N.D. Cal. 2014) (“[W]here 

electronic discovery is the norm (both for electronic information and digitized paper documents), 

ease of access is neutral given the portability of the information.”).

The factors that weigh in Teliax’s favor do so only slightly. Teliax contends the location 

of the witnesses dictates that this case should be heard in Colorado. It asserts that “roughly half” 

of its anticipated witnesses are in Colorado. Mot. at 7. “However, the convenience of a litigant’s 

employee witnesses are entitled to little weight because litigants are able to compel their 

employees to testify at trial, regardless of forum.” Skyriver Tech. Sols., LLC v. OCLC Online 

Computer Library Ctr., Inc., No. 10-cv-03305-JSW, 2010 WL 4366127, at *3 (N.D. Cal. Oct. 28, 

2010). More important to me is the convenience of non-party witnesses, and Teliax acknowledges 

that their identities are not known at this stage of the lawsuit. Mot. at 9. Moreover, AT&T 

represents that its likely witnesses are scattered throughout the United States including in Florida, 

Wisconsin, Illinois, and Texas. Oppo. at 8. In addition, AT&T represents that depositions will be 

taken in a location convenient to the witnesses or via teleconference. Oppo. at 8.

Teliax also argues that because it is principally located in Colorado, litigating in this 

district would be expensive. Mot. at 8. While I recognize that litigating in California may be 

more burdensome than litigating in Colorado for Teliax, which is dwarfed in size and revenue by 

AT&T, a plaintiff’s choice of forum is afforded substantial weight. See Lou v. Belzberg, 834 F.2d 

730, 739 (9th Cir. 1987) (recognizing that “great weight is generally accorded plaintiff’s choice of 

forum”). 

Lastly, courts also consider the “administrative difficulties flowing from court congestion” 

as another factor relevant to determining whether to grant a motion to transfer pursuant to section

1404(a). Decker Coal Co. v. Commonwealth Edison Co., 805 F.2d 834, 843 (9th Cir. 1986). 

Teliax contends that AT&T has chosen to burden the already “busy” Northern District of 

California when it could have brought its lawsuit as a counterclaim (although not a compulsory 

one) in other litigation pending between the parties in the District of Colorado. Mot. at 1, Reply at 

3. While I appreciate the concern for this district’s docket, AT&T is not required to bring its suit 

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in Colorado. The Colorado case is a suit for monetary damages under the Communications Act 

based on Teliax’s allegations that AT&T refused to pay it for the use of its facilities to switch and 

deliver toll free calls from end users to AT&T’s toll free subscribers. Aldworth Decl., Exh. A 

[Dkt. No. 10-1]. This case, on the other hand, involves an alleged breach of the AVOICS contract 

under which AT&T performed a long-distance, internet-based service for Teliax’s subscribers. As 

AT&T represents, and Teliax does not dispute, none of the phone calls at issue in the Colorado 

case are at issue here and different divisions within AT&T are involved in the two lawsuits. 

Lordo Decl. ¶ 4 [Dkt. No. 18-1]. While the two lawsuits share some overlapping elements, and 

AT&T likely could have brought the instant suit in Colorado, it was not required to do so. 

Administrative considerations do not compel a transfer. 

Ultimately, Teliax has not carried its burden to present a strong show of inconvenience. 

Transfer pursuant to 28 USC § 1404(a) is unwarranted.

CONCLUSION

Teliax’s motion to transfer venue is DENIED.

IT IS SO ORDERED.

Dated: August 11, 2016

______________________________________

WILLIAM H. ORRICK

United States District Judge

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