Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_06-cv-06601/USCOURTS-cand-3_06-cv-06601-4/pdf.json

Parties Involved:
Appliance Recycling Centers of America, Inc.
Counter-claimant
Appliance Recycling Centers of America-California, Inc.
Counter-claimant
Edward R. Cameron
Defendant
JACO Environmental, Inc.
Counter-defendant
SEG Basis GmbH
Counter-defendant
SEG Umwelt-Service GmbH
Counter-defendant

Document Text:

United States District Court

For the Northern District of California

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IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF CALIFORNIA

JACO ENVIRONMENTAL INC., et al.,

Plaintiffs,

 v.

APPLIANCE RECYCLING CENTERS OF

AMERICA, INC., et al.,

Defendants. /

No. C 06-06601 JSW

ORDER GRANTING

DEFENDANTS’ MOTION TO

TRANSFER VENUE

Now before the Court is Defendants’ motion to transfer venue to the United States

District Court for the Central District of California pursuant to 28 U.S.C. § 1404(a). Having

carefully reviewed the parties’ papers and considered their arguments and the relevant legal

authority, and good cause appearing, the Court hereby GRANTS Defendants’ motion to transfer

venue. The Court finds this matter suitable for disposition without oral argument. Civil L.R. 7-

1(b). 

BACKGROUND

On October 23, 2006, Plaintiffs JACO Environmental, Inc. (“JACO”), SEG Basis

GmbH (“SEG Basis”), and SEG Umwelt-Service GmbH (“SEG Umwelt”) (collectively,

“Plaintiffs”) filed a complaint in this Court against Appliance Recycling Centers of America,

Inc. (“ARCA America”) and Appliance Recycling Centers of America-California, Inc. (“ARCA

California”) (collectively, “ARCA” or “Defendants”) and Edward R. Cameron. (Compl. ¶¶ 1-

6.) The complaint alleges that Defendants infringed two of Plaintiffs’ patents. (Id. ¶¶ 10-21.) 

Plaintiffs

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United States District Court

For the Northern District of California

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seek declaratory and injunctive relief as well as damages, attorneys fees, and costs. (Id. at 4-5.) 

On January 12, 2007, the Court dismissed Mr. Cameron for lack of personal jurisdiction

and ordered the parties to file supplemental briefing addressing whether the entire case should

be transferred pursuant to 28 U.S.C. § 1404(a). (Order Dated January 12, 2007 Granting in Part

and Denying in Part Defendants’ Motion to Dismiss and to Transfer and Requiring Further

Briefing.) Now before the Court is Defendants’ resulting motion to transfer venue to the

Central District of California pursuant to 28 U.S.C. § 1404(a).

Plaintiffs and Defendants are both in the business of providing refrigerator recycling

services. (Declaration of Charles Rosenberg in Support of Motion to Transfer (“Rosenberg

Transfer Decl.”), Ex. 2 at 2.) Plaintiff JACO is incorporated in Washington state and maintains

its principal place of business in Washington. (Compl. ¶ 1.) Plaintiffs SEG Basis and SEG

Umwelt are both German corporations with their principal places of business in Germany. (Id.

¶¶ 2-3.) ARCA America is incorporated in Minnesota with its principal place of business in

Minnesota. (Id. ¶ 4.) ARCA California is incorporated in California with its principal place of

business in California. (Id. ¶ 5.) Defendants maintain a recycling center in Compton,

California. (Id.) The instant infringement action arises out of refrigerator recycling technology. 

(See Id. ¶¶ 10, 16.)

A similar dispute between the same parties is currently pending in the Central District

before the Honorable Alicemarie H. Stotler. (Rosenberg Transfer Decl., Ex. 2.) In that action,

ARCA (Defendants in this action) filed suit against JACO (Plaintiff in this action) and its

principals for claims under the Lanham Act and California’s unfair competition law. (Id.) That

action involves the same general refrigerator recycling technology that is at issue in this suit and

specifically claims that JACO misrepresented the identity of the inventor of a patent related to

refrigerator recycling technology. (Id.) The court in that action denied JACO’s motion for

summary judgment on October 19, 2006, four days before the Plaintiffs filed the complaint

before this Court. (Id.) The Court will address additional specific facts as required in the

analysis.

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United States District Court

For the Northern District of California

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ANALYSIS

A. Legal Standard for Motion to Transfer.

Defendants seek to transfer this action to the Central District of California. Pursuant to

28 U.S.C. § 1404(a), a district court may transfer a civil action to any district where the case

could have been filed originally for the convenience of the parties and witnesses and in the

interest of justice. As the moving party, Defendants bear the burden of showing that the

inconvenience of litigating in this forum favors transfer. See E. & J. Gallo Winery v. F. & P.

S.p.A., 899 F. Supp. 465, 466 (E.D. Cal. 1994).

A district court has discretion “to adjudicate motions for transfer according to an

‘individualized, case-by-case consideration of convenience and fairness.’” Steward Org., Inc.

v. Ricoh Corp., 487 U.S. 22, 29 (1988) (quoting Van Dusen v. Barrack, 376 U.S. 612, 622

(1964)). In order for a district court to transfer an action under section 1404, the court must

make the following two findings: (1) that the transferee court is one where the action “might

have been brought,” and (2) that the convenience of the parties and witnesses and the interest of

justice favor transfer. Hatch v. Reliance Ins. Co., 758 F.2d 409, 414 (9th Cir. 1985). There is

no dispute in this case that Plaintiffs could have brought this suit in the Central District of

California. Accordingly, Defendants have met their burden under the first prong. 

To determine whether Defendants have met their burden on the second prong, the Court

considers the following factors: Plaintiffs’ choice of forum; convenience of the parties and

witnesses; ease of access to sources of proof; local interest in the controversy; familiarity of

each forum with the applicable law; and relative congestion in each forum. Decker Coal Co. v.

Commonwealth Edison Co., 805 F.2d 834, 843 (9th Cir. 1986) (citing Gulf Oil Corp. v. Gilbert,

330 U.S. 501, 508-09 (1947)).

A. Defendants’ Motion to Transfer.

1. Plaintiffs’ Choice of Forum.

Typically, a court should give a plaintiff’s choice of forum great deference unless the

defendant can show that other factors of convenience clearly outweigh the plaintiff’s choice of

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forum. Id. at 843. There are, however, factors that diminish the deference given to a plaintiff’s

choice of forum. 

For instance, “in contrast to the strong presumption in favor of a domestic plaintiff’s

forum choice, ‘a foreign plaintiff’s choice deserves less deference.’” Ravelo Monegro v. Rosa,

211 F.3d 509, 513 (9th Cir. 2000) (citing Piper Aircraft v. Reyno, 454 U.S. 235, 256 (1981)). 

“The policy behind not deferring to a nonresident plaintiff’s choice of venue appears tied into

the notion that plaintiffs should be discouraged from forum shopping.” Williams v. Bowman,

157 F. Supp. 2d 1103, 1107 (N.D. Cal. 2001). Moreover, if there is any indication that a

plaintiff is forum shopping, its choice will be given little deference. Id. at 1106. Additionally, a

plaintiff’s choice of forum is afforded less deference when the facts giving rise to the action

have little connection to the forum of original selection. 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,

the plaintiff’s choice is entitled only to minimal consideration.”) (footnote omitted).

As deference to a plaintiff’s choice of forum decreases, a defendant’s burden to upset

the plaintiff’s choice of forum also decreases. Chodock v. Am. Econ. Ins. Co., 2005 WL

2994451, *3 (D. Ariz. 2005) (quoting Chrysler Capital Corp. v. Woehling, 663 F. Supp. 478,

482 (D. Del. 1987) (“[W]hen the plaintiff chooses a forum which has no connection to the

plaintiff himself or the subject matter of the suit . . . the burden on the defendant is reduced and

it is easier for the defendant to show that the balance of convenience favors transfer.”)).

Plaintiffs here are not citizens of California; rather, two are German corporations and the

other is a Washington state corporation. (Compl. ¶¶ 1-3.) Moreover, the underlying action has

no connection to the Northern District of California. Plaintiffs assert that the action is

connected to the Northern District because Defendants operated a business in Oakland,

California, have ongoing business relationships in the Northern District, and have conceded that

jurisdiction is proper in the Northern District. (Opp. Br. at 1.) However, Defendants’ Oakland

business has been closed for over ten years. (Declaration of Edward R. Cameron in Support of

Motion to Dismiss (“Cameron Dismissal Decl.”) ¶ 7.) Second, while Defendants do have at

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least one ongoing business relationship in the Northern District, the evidence indicates that the

allegedly infringing activity occurs in the Central District. (Id. ¶ 9.) In particular, although

Defendants have at least one contract with a company in Northern California, that contract is to

provide recycling services at its recycling center in the Central District. (Id.) Finally, the fact

that jurisdiction is proper in the Northern District is not dispositive of the issue of whether

transfer is appropriate under § 1404(a). See 28 U.S.C. § 1404(a). 

In sum, Defendants’ burden to make a strong showing of inconvenience is significantly

reduced because the Plaintiffs are not from California and because the underlying action is not

connected to the Northern District. On this record, the Court finds this factor weighs in favor of

transfer. 

2. The Convenience of the Parties and Witnesses.

In addition to considering Plaintiffs’ choice of forum, the Court takes into account the

relative convenience to all the parties and their witnesses. See Decker Coal Co., 805 F.2d at

843 (citing Gulf Oil Corp., 330 U.S. at 508). Defendants argue that it would be more

convenient to litigate this matter in the Central District because the allegedly infringing

equipment is located in its recycling center in the Central District and the Central District is

more convenient for Defendants’ anticipated witnesses, who are either located in or conduct

frequent business in the Central District. (Declaration of Edward R. Cameron in Support of

Transfer (“Cameron Transfer Decl.”) ¶¶ 5-6.) Plaintiffs present no evidence to oppose the

convenience of the Central District. 

Neither party has identified any third-party witnesses. Defendants have named two

witnesses who they anticipate will testify at trial: (1) Edward R. Cameron, Defendants’ Chief

Operating Officer, and (2) Michael Dunham, Plaintiff JACO’s manager. (Rosenberg Transfer

Decl. ¶¶ 2-4.) Mr. Dunham resides in the Central District and Mr. Cameron resides in

Minnesota but takes regular business trips to the Central District. (Id. ¶ 5; Cameron Dismissal

Decl. ¶ 5.) 

First, the convenience of Defendants’ party witness, Mr. Cameron, is entitled to little

weight because the witness is an employee of the party seeking transfer, and Defendants will be

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able to compel his testimony at trial. See, e.g., Ashmore v. N.E. Petroleum Div. of Cargill, Inc.,

925 F. Supp. 36, 38 (D. Me. 1996) (“a defendant’s motion to transfer under section 1404(a) may

be denied when the witnesses are employees of the defendant and their presence may be

obtained by the party”). In addition, Mr. Dunham’s residence in the Central District weighs in

favor of transfer. Moreover, Plaintiffs failed to allege any inconvenience in their opposition. 

The record before the Court indicates that evidence and witnesses relevant to the litigation will

be located in the Central District, or outside of California altogether. 

On balance, the Court finds that Defendants will benefit from transfer and Plaintiffs will

not be significantly inconvenienced by transfer. Accordingly, this factor weighs in favor of

transfer. 

3. The Ease of Access to Sources of Proof.

Access to evidence is another factor that may favor transfer. Decker Coal Co., 805 F.2d

at 843 (citing Gulf Oil Co., 330 U.S. at 508). Defendants state, and Plaintiffs do not dispute,

that the relevant evidence is located in the Central District or in Minnesota. (Cameron Transfer

Decl. ¶¶ 5, 6.) Therefore, on balance, this factor weighs in favor of transfer.

4. The Local Interest.

Another consideration in a decision to transfer venue is the local interest in having

localized controversies decided at home. Decker Coal Co., 805 F.2d at 843 (citing Gulf Oil

Co., 330 U.S. at 508). Here, one of the recycling centers that houses the allegedly unlawful

technology is in the Central District, while the other is in Minnesota. (Cameron Dismissal Decl.

¶ 3.) Because none of the allegedly infringing activity occurred in the Northern District and at

least some occurred in the Central District, the Court finds this factor to be slightly in favor of

the Central District. 

5. Familiarity of Each Forum with the Applicable Law.

The parties dispute whether the Central District has the appropriate expertise to handle

this matter since the related case is pending there. (Br. at 8; Opp. Br. at 2.) Plaintiffs claim that

because the only remaining claim in the Central District litigation is one for unfair competition,

not patent infringement, and because Judge Stotler has not yet decided any substantive issues

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about the technology itself, that the Central District is no more familiar with the law or the

underlying technology than this Court. (Opp. Br. at 2.) However, both actions involve the

same refrigerator recycling technology and the parties in the Central District are the same as

those before the Court. (See generally Compl.; Declaration of Charles Rosenberg in Support of

Motion to Dismiss, Ex. 3.) At the very least, Judge Stotler is generally familiar with the

underlying subject matter and the ongoing dispute between the parties. Therefore, the Court

finds this factor to weigh in favor of transfer. 

6. Relative Court Congestion in Each Forum.

Defendants contend that the Northern District is slightly more congested than the

Central District. (Br. at 8.) Plaintiffs do not address the issue. Although less significant, the

relative court congestion is a factor the Court considers. The Court finds this factor to weigh

slightly in favor of transfer because the median times from filing to disposition in civil cases is

slightly higher in the Northern District than the Central District. (See id. (citing

http://www.uscourts.gov/cgi-bin/cmsd2006.pl).

In sum, the Court finds that the instant case could have been brought in the Central

District and that the balance of factors weighs in favor of transfer.

CONCLUSION

For the reasons state herein, Defendants’ motion to transfer to the Central District of

California is GRANTED. The Clerk is directed to transfer this case, forthwith.

IT IS SO ORDERED.

Dated: March 27, 2007 

JEFFREY S. WHITE

UNITED STATES DISTRICT JUDGE

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