IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF ILLINOIS

EASTERN DIVISION

MICHAEL Y. GRANGER, et al., )

)

Plaintiffs, )

)

v. ) No. 11 C 9213

)

THOMAS F. REINER, SR., et al. )

)

Defendants. )

MEMORANDUM OPINION

SAMUEL DER-YEGHIAYAN, District Judge

This matter is before the court on Defendant Thomas F. Reiner’s (Reiner)

motion to dismiss, and motion in the alternative to transfer or stay the instant action. 

For the reasons stated below, the motion to transfer is granted, and the motions to

dismiss and stay are denied without prejudice.

BACKGROUND

In Spring 2008, Reiner allegedly met with Plaintiff Michael Y. Granger

(Granger) to discuss starting a new medical equipment business together. Reiner

also allegedly told Granger that another company named Spectra Group, Inc.

(Spectra Group) might be good to use as a starting platform. In June 2008, Reiner

and Granger allegedly met with the President of Defendant Hollister, Inc. (Hollister)

and learned that Hollister wanted to sell its “Evadri Bladder Control System”
business. (Compl. Par. 11). In November 2008, Granger allegedly informed

Kenneth E. Feltman (Feltman) of the proposed medical equipment business. In

December 2008, Reiner allegedly met with Granger and Feltman (Meeting). Reiner

allegedly told Granger and Feltman that Reiner’s company, Spectra Medical

Products, Inc. (Spectra Medical), was an ongoing business with a financial history

and a valuation of $300,000 to $350,000, when in fact it had been incorporated only

for two months, it had no value, and it was merely a shell corporation. Reiner also

allegedly named Granger as the Secretary and Director of Spectra Medical without

authorization from Granger. At the Meeting, the parties allegedly formed an

agreement (Agreement) that Spectra Medical would acquire the Hollister business

and agreed to the distribution of shares in the new business. The new company was

allegedly incorporated as UroMed Technology, Inc. (UroMed), and pursuant to an

asset purchase agreement, UroMed allegedly purchased certain assets from Spectra

Group.

Plaintiffs contend that Reiner breached his fiduciary duty as the Chief

Executive Officer and Director of UroMed by failing to distribute dividends to

shareholders, giving preference to his own financial interests, failing to disclose

material facts about the operations of UroMed, engaging in self-dealing transactions

between UroMed and himself, and secretly entering UroMed into invalid contracts

with himself, his wife, and Spectra Group in order to dilute the shares controlled by

Granger and Feltman. Reiner also allegedly breached his fiduciary duty to UroMed

by making misrepresentations about the financial status and the extent of the

operations of Spectra Group. 
In the complaint filed in state court, Plaintiffs included breach of fiduciary

duty claims (Counts I-II), fraud and deceit claims (Counts III-IV), claims alleging

violations of the Illinois Consumer Fraud and Deceptive Business Practices Act, 815

ILCS 505/12 et seq. (Counts V-VI), breach of contract claims (Counts VII-VIII), and

an unjust enrichment claim (Count IX). In June 2011, the claims brought against

Hollister were dismissed in the state court. In December 2011, the instant action was

removed to federal court by Reiner. Reiner now moves to dismiss the instant action,

and moves in the alternative to transfer or stay the instant action.

DISCUSSION

Reiner moves to dismiss the instant action, arguing that he is not subject to

personal jurisdiction in Illinois. In the alternative, Reiner requests that the court

transfer this case to the Northern District of California or stay the instant action. 

Plaintiffs were given until January 24, 2012 to file a response to the instant motion,

and Plaintiffs have not filed any response opposing Reiner’s arguments.

The court will address the transfer motion first, since if the transfer request is

granted, the personal jurisdiction issue and stay issues before the court will be moot. 

This court is not required to resolve the personal jurisdiction issue prior to a transfer. 

See, e.g., Cote v. Wadel, 796 F.2d 981, 985 (7th Cir. 1986)(stating that “under

1404(a) as under 1406(a), the transferring court need not have personal jurisdiction

over the defendants”). 

If the Northern District of Illinois is a proper venue, a transfer is governed by

28 U.S.C. § 1404(a), which provides that “[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 or to any district or

division to which all parties have consented.” Id. If the Northern District of Illinois

is not a proper venue, this court may still transfer the instant action pursuant to 28

U.S.C. § 1406(a), which provides that “[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.” Id. Reiner concedes that he has significant contacts with the

Northern District of California, and thus would be subject to personal jurisdiction in

that district. (Mem. 13-14). 

I. Plaintiffs’ Choice of Forum

Reiner argues that Plaintiffs’ choice of forum is not entitled to great deference. 

In considering whether to transfer an action, the court should “give some weight to

the plaintiff’s choice of forum.” Federal Deposit Ins. Corp. v. Citizens Bank & Trust

Co. of Park Ridge, Ill., 592 F.2d 364, 368 (7th Cir. 1979); see also In re National

Presto Industries, Inc., 347 F.3d 662, 664 (7th Cir. 2003)(stating that “‘unless the

balance is strongly in favor of the defendant, the plaintiff's choice of forum should

rarely be disturbed’”)(quoting in part Gulf Oil Corp. v. Gilbert, 330 U.S. 501, 508

(1947)). The record reflects that this case has connections with various locations all

across the United States. For example, the complaint indicates that UroMed, which

is the main company at issue in this case, was incorporated in Massachusetts. 

(Compl. Par. 25 29). Agreements relating to UroMed, such as the UroMed Common
Stock Purchase Warrant, indicate that they are governed by Delaware law. (STW

Sec 8). Although the complaint references meetings between Reiner and Granger in

Illinois, the complaint also references meetings in states such as California. (Compl.

Par. 9). The UroMed Asset Purchase Agreement, which is an agreement that is

directly at issue in this case, indicates that it is governed in part by California law. 

(Asset Agr. Sec. 8.3). Reiner also asserts, and Plaintiffs have not contested, that the

principal places of business for both UroMed and Spectra Group are in California. 

(Mem. 14). The minutes from the meetings of the UroMed Board of Directors

indicate that meetings were held in locations such as California and Washington,

D.C. (5/28/09 Min. 2); (09 CH 16617 Pet. Par. 29). Plaintiffs have not pointed out

any connections that this case has with Illinois. While the court has given substantial

deference to Plaintiffs’ choice of the instant forum, Plaintiffs’ choice is not

dispositive, particularly in a case such as this where Plaintiffs have not shown that

there is any special or unique connection to Illinois. 

II. Convenience of Parties and Witnesses

Reiner argues that the convenience of the parties and witnesses would clearly

be best served by a transfer to the Northern District of California. Reiner contends

that the vast majority of witnesses would be located in California. Reiner has also

shown that the majority of the books and records that will be at issue in this case are

located in California. Plaintiffs have not contested either point. Reiner has shown

that a transfer to the Northern District of California would clearly be more

convenient to the parties and witnesses. 
III. Interest of Justice

Reiner contends that the interest of justice would be promoted by a transfer to

the Northern District of California. In addressing the interest of justice factor, a

court may consider: (1) whether a transfer promotes the “efficient administration of

the court system,” (2) whether the action could be consolidated with other actions in

the transferee district, (3) whether the judges in the transferee district are more

familiar with the pertinent state law, (4) whether jurors in a particular district have a

“financial interest in [the] case,” and (5) which district would have jurors that could

“best apply community standards.” Coffey v. Van Dorn Iron Works, 796 F.2d 217,

220-21, 21 n.4 (7th Cir. 1986). In addressing the interest of justice factor, the

transferor court should focus on whether the proposed transfer would promote the

“efficient functioning of the courts.” Coffey, 796 F.2d at 221. The interest of justice

factor does not involve a consideration of the merits of the plaintiff’s claim. Id. 

Reiner has shown that this action can be resolved more efficiently in

California, where the majority of the witnesses and key evidence is located. This

case has many close connections with California and limited connections with

Illinois. The record also indicates that California law will likely govern at least in

part in the instant action. Thus, the interest of justice factor clearly favors a transfer. 

Under either 28 U.S.C. § 1404(a) or 28 U.S.C. § 1406(a), a transfer of this

case to the Northern District of California is clearly warranted. Considering the

factors under 28 U.S.C. § 1404(a), Plaintiffs’ choice of Illinois is entitled to limited

deference considering this case’s limited connections to Illinois, and the convenience
of the parties and witnesses clearly would be best served by a transfer. Considering

the interest of justice factor under 28 U.S.C. § 1404(a) or 28 U.S.C. § 1406(a), the

interest of justice factor is clearly served by a transfer to California, where there are

close ties to this action and where this action can be most effectively and efficiently

resolved. See, e.g., Nichols v. G.D. Searle & Co., 991 F.2d 1195, 1201 n.5 (4th Cir.

1993)(stating that “[t]he analysis of whether a transfer is ‘in the interest of justice’ is

the same under section 1404(a) as it is under section 1406(a)”).

Finally, Plaintiffs have previously brought an action against Reiner and others

in which many of the same issues were raised on behalf of themselves and UroMed.

That case was removed to federal court (Case Number 09 C 3493), and in February

2010, that case was transferred to the Northern District of California. Reiner

contends that Plaintiffs subsequently voluntarily dismissed that action in California. 

Therefore, based on the above, Reiner’s motion to transfer to the Northern District of

California is granted. Reiner’s motion to dismiss for lack of personal jurisdiction

and motion to stay are denied as moot.
CONCLUSION

Based on the foregoing analysis, Reiner’s motion to transfer is granted, and

the motion to dismiss and motion to stay are denied as moot.

___________________________________

Samuel Der-Yeghiayan

United States District Court Judge

Dated: February 7, 2012