Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_10-cv-00810/USCOURTS-cand-3_10-cv-00810-0/pdf.json

Parties Involved:
Customer Care Ltd.
Plaintiff
Faip North America, Inc.
Defendant
Nortek Products (Taichang) Limited
Plaintiff
Nortek Products Limited
Plaintiff
Norwood Industries, Limited
Plaintiff
O.E.M. Industries Inc.
Defendant
Simpson Delco LLC.
Defendant

Document Text:

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United States District Court

For the Northern District of California

IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF CALIFORNIA

NORTEK PRODUCTS (TAICHANG)

LIMITED, a People’s Republic of China

corporation, NORTEK PRODUCTS

LIMITED, a Hong Kong corporation,

CUSTOMER CARE LTD., a British Virgin

Island corporation, and NORWOOD

INDUSTRIES, LIMITED, a British Virgin

Island corporation,

Plaintiffs,

 v.

FAIP NORTH AMERICA, INC. d/b/a O.E.M.

INDUSTRIES INC. d/b/a SIMPSON DELCO

LLC, an Illinois Corporation.

Defendant /

No. C-10-0810 MMC

ORDER GRANTING DEFENDANT’S

ALTERNATIVE MOTION TO TRANSFER

VENUE; TRANSFERRING ACTION TO

NORTHERN DISTRICT OF ILLINOIS;

VACATING MAY 7, 2010 HEARING

Before the Court is defendant FAIP North America, Inc.’s (“FAIP”) “Motion to

Dismiss or, in the Alternative, to Transfer Venue,” filed March 15, 2010. Plaintiffs Nortek

Products (Taichang) Limited, Nortek Products Limited, Customer Care Ltd., and Norwood

Industries Limited have filed opposition, to which FAIP has replied. Having read and

considered the papers filed in support of and in opposition to the motion, the Court deems

the matter suitable for decision on the parties’ respective papers, VACATES the hearing

scheduled for May 7, 2010, and rules as follows.

Case 3:10-cv-00810-MMC Document 21 Filed 05/04/10 Page 1 of 7
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1

The AC does not allege the conduct on the part of plaintiffs that precipitated the

sending of said e-mails.

2

BACKGROUND

Plaintiffs, each of which is citizen of a country other than the United States, allege

that FAIP, a citizen of Illinois, has “contracted with [p]laintiffs to manufacture certain

products including pressure water cleaners and component parts and accessories,” which

are sold by FAIP. (See Amended Complaint (“AC”) ¶ 8.) Pursuant to the parties’

contractual relationship, the parties executed a written agreement dated October 10, 2008

and titled “Nondisclosure, Noncompetition and Nonsolicitation Agreement” (“NDA”). (See

AC Ex. A.) Plaintiffs allege that on November 16, 2009, FAIP “sent an e-mail to [p]laintiffs

in which [FAIP] informed [p]laintiff[s] that [plaintiffs] could not sell electric pressure washers

to a Mexico company named Knova due to a ‘non compete agreement that covers all of

North America’” (see AC ¶ 24), and that on November 17, 2009, FAIP “sent an e-mail to

[p]laintiffs in which [FAIP] informed [p]laintiffs that it would enforce the non-solicitation

provision of the NDA against [p]laintiffs including filing a civil action and seeking an

injunction.” (See AC ¶ 25.)1

By the instant action, plaintiffs seek declaratory relief (see AC at 6:11-13),

specifically, a declaration that the “non-solicitation and non-competition” provisions

contained in the NDA are unenforceable (see AC ¶ 27), and that such provisions “only

apply to specific ‘licensed products’ and do not encompass all products in the pressure

washer field” (see AC ¶ 31). Additionally, plaintiffs seek issuance of an injunction (see AC

at 6:14-19) prohibiting FAIP from enforcing the non-solicitation and non-competition

provisions against plaintiffs (see AC ¶ 34).

DISCUSSION

"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 U.S.C. § 1404(a). FAIP argues that the instant action should be transferred,

pursuant to 28 U.S.C. § 1404(a), to the Northern District of Illinois.

Case 3:10-cv-00810-MMC Document 21 Filed 05/04/10 Page 2 of 7
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3

At the outset, the Court finds that plaintiffs could have filed the instant action in the

Northern District of Illinois, because FAIP resides in that district. See 28 U.S.C.

§ 1391(a)(1) (providing diversity action may be brought in district where defendant resides).

The Court next considers the question of convenience. “A motion to transfer venue

under §1404(a) requires the court to weigh multiple factors in its determination whether

transfer is appropriate in a particular case.” Jones v. GNC Franchising, Inc., 211 F. 3d

495, 498 (9th Cir.), cert. denied, 531 U.S. 928 (2000). In Jones, the Ninth Circuit provided a

list of non-exclusive factors a district court may consider: “(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.” See id. at 498-99. The Court addresses the relevant

factors in turn.

First, FAIP offers evidence, undisputed by plaintiffs, that none of the parties’

contractual negotiations occurred in California, that “some communication involved email

and/or telephonic communication,” that “final negotiations occurred in Elk Grove Village,

Illinois” (see Alexander Decl. ¶ 6), and that “all major decisions relating to the business

relationships with . . . the [p]laintiffs were made at FAIP’s headquarters in Elk Grove

Village, Illinois” (see id. ¶ 9). Further, there is no evidence that either party has performed

in California any obligation owed under the parties’ contracts. Accordingly, the first factor

weighs in favor of transfer.

Second, the parties have contractually agreed that Illinois law governs the NDA,

(see AC Ex. A ¶ 10); consequently, the state most familiar with the governing law is Illinois. 

Accordingly, the second factor weighs in favor of transfer.

//

//

Case 3:10-cv-00810-MMC Document 21 Filed 05/04/10 Page 3 of 7
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2

The instant action does not involve any issue concerning plaintiffs’ manner of

shipping goods or FAIP’s sale of goods to nationwide retailers.

4

Third, plaintiffs are not citizens of California; rather, one is a citizen of the People’s

Republic of China, one is a citizen of Hong Kong, and two are citizens of the British Virgin

Islands. (See AC ¶¶ 1-4.) Nor do plaintiffs allege or assert that any plaintiff has an office in

California, owns any property located in California, or has a license to do business in

California. Further, the sole alleged basis for the existence of a justiciable controversy is

that, according to plaintiffs, FAIP has threatened to sue plaintiffs if plaintiffs attempt to do

business with a company located in Mexico (see AC ¶¶ 24, 25), and none of the events

relevant to such controversy are alleged to have occurred in California. Under such

circumstances, plaintiffs’ choice of a California forum is entitled to “little deference.” See

Vivendi SA v. T-Mobile USA Inc., 586 F.3d 689, 693 (9th Cir. 2009) (holding district court

did not err in giving foreign corporation’s choice of Washington forum “little deference”

where action “related to European transactions”); Lou v. Belzberg, 834 F.2d 730, 739 (9th

Cir. 1987) (holding where “operative facts have not occurred within the forum and the

forum has no interest in the parties or subject matter, [the plaintiff’s] choice is entitled to

only minimal consideration”). Accordingly, the third factor weighs, at best, only slightly

against transfer.

With respect to the fourth factor, plaintiffs, as noted above, neither own property nor

do business in California, nor do plaintiffs allege or offer any evidence to support a finding

that any plaintiff or FAIP has any direct contacts with California. Although plaintiffs have

shown that when they ship goods to the United States on behalf of FAIP, some of those

goods have “passed through California ports” (see Chen Decl. ¶¶ 3, 6), and that some

retailers, such as Lowe’s, sell FAIP products at stores in California, (see id. ¶ 7), any such

contacts with California are not attributable to plaintiffs or FAIP, but, rather, to non-parties,

specifically, shippers and retailers.2 According, the fourth factor weighs in favor of transfer.

Next, there is no assertion that the operative facts pertaining to the issue of whether

plaintiffs have violated the “non-solicitation and non-competition” provisions in the NDA

Case 3:10-cv-00810-MMC Document 21 Filed 05/04/10 Page 4 of 7
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3

Because FAIP has not provided any details as to the expected testimony of its nonparty witnesses, the Court cannot determine whether the absence of live testimony by such

witnesses is likely to prejudice FAIP. See, e.g., Brandon Apparel Group, Inc. v. Quitman

Manufacturing Co., 42 F. Supp. 2d 821, 834 (N.D. Ill, 1999) (holding, where party did not

provide court with information necessary to evaluate nature and quality of non-party

witnesses’ expected testimony, party failed to establish factor weighed in favor of transfer).

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arise from events occurring in California. Similarly, to the extent that any factual showing is

necessary to demonstrate such provisions either are or are not enforceable, there is no

assertion that any such facts arise from any event occurring in California. Accordingly, the

fifth factor weighs in favor of transfer.

With respect to the next factor, differences in the costs of litigation, plaintiffs note

that Karen Chen (“Chen”), plaintiffs’ principal, resides in China; consequently, plaintiffs

assert, plaintiffs will have “increased travel costs and time” if the matter is transferred to

Illinois, (see Chen Decl. ¶ 10), and, in addition, if plaintiffs hire “Illinois-based litigation

attorneys,” plaintiffs will have “fewer mutual daylight hours” to discuss matters with counsel

(see id. ¶ 10). Plaintiffs’ showing as to this issue is unpersuasive. To the extent Chen is

required to travel from China to a court in the United States, or any employee in China

needs to discuss matters with counsel in the United States, the distance and/or time

difference between California and Illinois is unlikely to cause any significant increase in

costs to plaintiffs. By contrast, the costs incurred by FAIP, which, as noted, resides in

Illinois, likely would increase significantly if it is required to defend in California. 

Accordingly, the sixth factor weighs in favor of transfer.

As to the seventh factor, plaintiffs do not identify any non-party witnesses, let alone

a non-party witness that could be compelled to testify in California but not in Illinois. 

Although FAIP has identified three non-party witnesses who reside in Illinois, each of

whom is a former employee whose testimony, according to FAIP, is “vital to FAIP’s

defenses and potential counterclaims” (see Alexander Decl. ¶ 11), FAIP does not contend

that any such non-party witness would refuse to testify at a trial in California, nor does

FAIP explain why any such witness’s testimony could not be taken at a deposition and

offered at trial. See Fed. R. Civ. P. 32(a).3 Accordingly, the seventh factor weighs neither

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4

Plaintiffs state they intend to call Chen, their principal, as a witness, while FAIP

states it intends to offer the testimony of its principal and also the testimony of six

employees. “[T]he convenience of employee-witnesses,” however, “is generally assigned

little weight.” See id.

5

In light of this finding, the Court does not address herein FAIP’s argument that the

instant action is subject to dismissal for lack of personal jurisdiction.

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in favor of nor against transfer.4

The eighth and final factor identified in Jones is the ease of access to proof in the

respective forums. Both parties address FAIP’s documentary evidence with respect to this

factor. Specifically, FAIP states it has “voluminous business records” in Illinois (see Def.’s

Mem. in Support of its Mot. at 6:15-17); FAIP has not shown, however, that it would suffer

any hardship if it were required to produce and/or use those records at a trial in this district. 

Plaintiffs, for their part, do not contend it would more difficult for plaintiffs to access

necessary documents in Illinois rather than in this district. Accordingly, the eighth factor

weighs neither in favor of nor against transfer.

In sum, five of the above-discussed factors weigh in favor of transfer, one factor

weighs, at best, only slightly against transfer, and the remaining two factors weigh neither

in favor of nor against transfer. Significantly, no factor weighs substantially in favor of the

action proceeding in the Northern District of California, given that none of the parties

resides in this district, that none of the events giving rise to the dispute occurred in this

district, that no potential witness resides in this district, and that no party has identified any

potential evidence located in this district. Accordingly, the Court finds it appropriate to

transfer the instant action to the Northern District of Illinois.5

//

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//

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//

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CONCLUSION

For the reasons stated above, to the extent FAIP’s Motion to Dismiss or, in the

Alternative, to Transfer Venue seeks an order of transfer, the motion is hereby GRANTED,

and the instant action is hereby TRANSFERRED to the Northern District of Illinois pursuant

to 28 U.S.C. § 1404(a).

IT IS SO ORDERED.

Dated: May 4, 2010 

MAXINE M. CHESNEY

United States District Judge

Case 3:10-cv-00810-MMC Document 21 Filed 05/04/10 Page 7 of 7