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IN THE UNITED STATES DISTRICT COURT

FOR THE MIDDLE DISTRICT OF PENNSYLVANIA

RITZ-CRAFT CORPORATION OF : Case No. 4:15-cv-02405

PENNSYLVANIA, INC. :

:

Plaintiff, :

:

v. : (Judge Brann)

:

THE PRICE HOME GROUP, LLC :

:

Defendant. :

MEMORANDUM

July 13, 2016

Pending before this Court is a motion to dismiss pursuant to Federal Rule of 

Civil Procedure 12(b)(1), to strike scandalous matter from the complaint, and to 

transfer the action pursuant to 28 U.S.C. § 1404(a). The motion filed by Defendant 

The Price Home Group, LLC (hereinafter “Price”) against Plaintiff Ritz-Craft 

Corporation of Pennsylvania, Inc. (hereinafter “Ritz-Craft”) seeks to dismiss RitzCraft’s complaint in its entirety based on lack of subject-matter jurisdiction, or in 

the alternative, to transfer the action to the United States District Court for the 

District of New Jersey. Price also requests that the Court strike paragraph 17 of the 

complaint, together with an exhibit attached to the complaint. This Memorandum 

will only address Price’s motion to transfer action. For the reasons discussed, the 

motion to transfer is granted and the action is transferred to the District of New 

Jersey.

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I. BACKGROUND

This case arises from an alleged breach of contract.1Following Hurricane 

Sandy in October 2012, federal and state lawmakers enacted laws providing

federal and state grant money to severely impacted homeowners along the New 

Jersey shoreline. In April 2013, Ritz-Craft, a Pennsylvania corporation with its 

principal place of business in Mifflinburg, Union County, Pennsylvania, entered 

into a contract with Price, a limited liability New Jersey company with its principal 

place of business in Manahawkin, New Jersey. Price was designated as 

“distributor” and “dealer” of Ritz-Craft manufactured homes to customers 

exclusively within a 20-mile radius of Manahawkin, New Jersey.2These homes 

were part of Ritz-Craft’s “Restore the Shore Collection,” advertised as homes 

specifically designed for areas affected by Hurricane Sandy and were offered to 

victims of the storm on expedited build times. 

Over the following two years, the relationship between the parties began to 

deteriorate. In September 2015, Ritz-Craft informed Price that it was terminating 

the parties’ contract.

On November 6, 2015, Price’s counsel forwarded to Ritz-Craft a letter 

entitled “Letter in the Nature of Settlement and Subject to Applicable Rules of 

 

1 As this Court is not addressing the motion to dismiss pursuant to 12(b)(1) and the motion to strike, the background 

facts discussed were gathered from the complaint and the parties briefs to Price’s motion.

2 The parties entered into a Builder’s Agreement in 2013 and a second Builder’s Agreement in 2014 following a 

change in ownership of Price.

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Evidence.”3In this letter, Price seeks clarification as to Ritz-Craft’s decision to 

terminate the relationship and goes on to delineate a list of “defective products that

were provided by” Ritz-Craft to Price’s customers.4The list includes forty-nine 

family customers of Price and details the defects in each of their homes; it requests 

that the issues be resolved “amicably” and without the expense of litigation.5

Two weeks later, however, on November 19, 2015, a Price customer who 

had purchased a Ritz-Craft home filed an action in New Jersey Superior Court, 

Ocean County Law Division, against Price (hereinafter the “Gwin Action”). Price 

indicates that “Ritz-Craft will be impleaded into the Gwin Action shortly.”6 On

December 10, 2015, new counsel for Price sent Ritz-Craft a second letter 

indicating that the firm had been retained by Price “to pursue certain claims it has 

against Ritz-Craft . . . as outlined in the letter . . . dated November 6, 2015.”7

Four days later, Ritz-Craft filed the instant action in this Court. In its 

complaint, Ritz-Craft seeks a declaratory judgment, declaring the rights of the 

parties under the parties’ contract.8Specifically, Ritz-Craft requests that this Court 

find that Price materially breached the parties’ contract and that Ritz-Craft’s 

termination of the contract was proper.9

 

3 ECF No. 1-2 at 84. In its motion, Price seeks to strike this letter as settlement negotiations.

4

Id. at 87.

5

Id. at 87-91.

6 ECF No. 10 at 9.

7 ECF No. 9-6.

8 ECF No. 1.

9

Id.

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On January 12, 2016, three weeks after the instant action was filed, Price 

filed a complaint against Ritz-Craft in New Jersey Superior Court, Ocean County 

Law Division; Ritz-Craft subsequently removed the action to the United States 

District Court for the District of New Jersey (hereinafter the “New Jersey 

Action”).10 The New Jersey Action alleges a breach of the parties’ contract, 

violations of New Jersey statutory and common law, and seeks indemnity in the 

event that Price’s customers are successful in establishing liability for the allegedly 

defective homes manufactured by Ritz-Craft. 

II. LEGAL STANDARD: CHANGE OF VENUE

Section 1404 of Title 28 of the United States Code provides that “a district 

court may transfer any civil action to any other district or division where it might 

have been brought” “[f]or the convenience of parties and witnesses [and] in the 

interest of justice.”11 District courts are afforded discretion to transfer an action if it 

is “warranted by the convenience of parties and witnesses and promotes the 

interest of justice” in order “to prevent the waste ‘of time, energy and money’ and 

‘to protect litigants, witnesses and the public against unnecessary inconvenience 

and expense.”12 A motion to transfer is not to be liberally granted.13 The plaintiff’s 

 

10 Docket No. 3:16-cv-00668.

11 28 U.S.C. § 1404(a).

12 Van Dusen v. Barrack, 376 U.S. 612, 616 (1964) (citing Continental Grain Co. v. The FBL-585, 364 U.S. 19, 26, 

27 (1964)).

13 High River Ltd. Partnership v. Mylan Laboratories, Inc., 353 F. Supp. 2d 487, 491 (M.D. Pa. 2005) (citing

Measurement Specialties, Inc. v. Stayhealthy.com, 275 F. Supp. 2d 638, 640 (E.D. Pa. 2003)).

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choice of venue “should not be lightly disturbed” and the burden of proving the 

need to transfer lies with the moving party.14

In considering a motion for transfer, a court must first find that the action 

could have properly been brought in the proposed forum.15 The court must 

subsequently “balance several private and public interest factors weighing in favor 

of or against transfer.”16 While there is no definitive formula or list a court must 

contemplate, the following factors are generally considered:

(1) the plaintiff's choice of forum; (2) the defendant's preference; 

(3) where the claim arose; (4) the convenience of the parties; (4) 

the convenience of the witnesses, but only to the extent that the 

witnesses may actually be unavailable for trial in one of the fora; 

(5) the location of books and records, similarly limited to the 

extent that the files could not be produced in the alternative forum; 

(6) the enforceability of the judgment; (7) practical considerations 

that could make the trial easy, expeditious, or inexpensive; (8) the 

relative court congestion in the competing courts; (9) the local 

interest in deciding local controversies at home; (10) the public 

policies of the fora; (11) and the familiarity of the trial judge with 

the applicable state law.17

III. DISCUSSION

Price argues that private and public interest factors weigh in favor of 

transfer. First, Price alleges that the matter could have been brought in New Jersey, 

and in fact was brought by Price in the New Jersey Action. Price argues that that it 

 

14Measurement Specialties, Inc., 275 F. Supp. 2d at 640 (citing Jumara v. State Farm Ins. Co., 55 F.3d 873, 878 (3d 

Cir. 1995)).

15 28 U.S.C. § 1404(a); see also Van Dusen, 376 U.S. at 621.

16 High River Ltd., 353 F. Supp. 2d at 492.

17 Id. (citing Jumara, 55 F.3d at 879-80).

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is a New Jersey limited liability company exclusively catering to New Jersey 

residents. It further contends that the operative facts giving rise to the underlying 

litigation occurred in New Jersey, including the alleged breach of contract. 

Consequently, the majority of witnesses to be deposed are in New Jersey and much 

of the evidence, including Price’s financial records and the homes constructed by 

Ritz-Craft, are in New Jersey. 

Price next alleges that Ritz-Craft faces no hardship in litigating this matter in 

New Jersey because it is “certain” that Ritz-Craft will have to defend actions in 

New Jersey brought on behalf of Price’s customers who purchased Ritz-Craft 

homes. Price alleges that Ritz-Craft may be subject to litigation by up to forty-nine 

families, and will already be subject to litigation in the pending Gwin Action once 

it is joined by Price as a defendant. 

Lastly, Price argues that the courts of New Jersey have an interest in 

presiding over local controversies. It contends that the subject of the contract at 

issue was the buying and selling of prefabricated homes sold to New Jersey 

residents whose homes were lost or damaged by Hurricane Sandy. These homes 

were largely purchased, as noted above, with federal and New Jersey state grant 

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funds. Therefore, a court in New Jersey would consequently have a strong interest 

in deciding the matter.18

Ritz-Craft argues, conversely, that, pursuant to the “first-filed rule,” this 

Court should hear the merits of this case because the instant action was filed prior 

to the filing of the New Jersey Action. It contends that, as the plaintiff, its choice of 

forum should prevail. Ritz-Craft also contends that “a significant amount of 

evidence and witnesses” are in Pennsylvania and that this Court has a “local 

interest in determining a dispute with a Pennsylvania company.”

19

A. The first-filed rule is inapplicable to the matter at hand.

Ritz-Craft argues that this Court should deny Price’s motion to transfer 

based on the first-filed rule, as adopted by the United States Court of Appeals for 

the Third Circuit. The first-filed rule states that “[i]n all cases of federal concurrent 

jurisdiction, the court which first has possession of the subject must decide it.”20

“[T]he rule's primary purpose is to avoid burdening the federal judiciary and to 

prevent the judicial embarrassment of conflicting judgments.”

21 The rule

 

18 In the New Jersey Action filed by Price, Price raises a claim under New Jersey’s Franchise Practices Act, a claim 

that presumably would be brought as a counterclaim in the instant case if it were to remain in this District. In its 

papers, however, Ritz-Craft points to a choice-of-law provision in the contract indicating that Pennsylvania law 

governs any actions brought under the contract. The applicability of the choice-of-law provision is not a matter for 

this Court to decide. This provision is not a forum selection clause and, therefore, is not relevant to the discussion on 

choice of venue. Accordingly, the claim arising under New Jersey law, together with the applicability of the choiceof-law provision is left to the District of New Jersey to decide.

19 ECF No. 11.

20 E.E.O.C. v. Univ. of Pa., 850 F.2d 969, 971 (3d Cir. 1988) (citing Crosley Corp. v. Hazeltine Corp., 122 F.2d 925, 

929 (3d Cir. 1941)).

21 E.E.O.C., 850 F.2d at 977 (citing Church of Scientology of Ca. v. U.S. Dept. of Army, 611 F.2d 738, 750 (9th Cir. 

1979)).

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effectively “promotes comity among federal courts of equal rank”

22 and provides 

guidance to federal courts as to “the orderly administration of justice.”23

The first-filed rule, however, is not inflexible.24 Courts have discretion to 

retain jurisdiction in some, albeit rare, circumstances.25 The first-filed rule “is not a 

mandate directing wooden application of the rule without regard to rare or

extraordinary circumstances . . .”26 The following exceptions have been 

recognized:

(1) the existence of rare or extraordinary circumstances; (2) the firstfiler engaged in inequitable conduct; (3) he acted in bad faith; (4) he 

engaged in forum shopping; (5) the later-filed action has developed 

further than the first-filed action; and (6) the first-filing party 

instituted suit in one forum in anticipation of the opposing party's 

imminent suit in a less favorable forum.27

Price argues that the first-filed rule is inapplicable to the matter at hand 

because Price has requested a transfer of venue under 28 U.S.C. § 1404, not under 

Federal Rule of Civil Procedure 12(b)(3), to which the first-filed rule clearly 

applies. The Third Circuit, however, has not expressly held that the first-filed rule 

only applies to transfer motions filed pursuant to Rule 12(b)(3). Regardless, courts 

 

22 Id. at 971.

23 Sinclair Cattle Co., Inc. v. Ward, 80 F. Supp. 3d 553, 559 (M.D. Pa. 2015) (citing Koresko v. Nationwide Life Ins. 

Co., 403 F. Supp. 2d 394, 400 (E.D. Pa. 2005)).

24 Id. at 558.

25 Id. (citing Zelenkofske Axelrod Consulting, L.L.C. v. Stevenson, 1999 WL 592399, at *2 (E.D. Pa. Aug. 5, 1999).

26 E.E.O.C., 850 F.2d at 972.

27 Sinclair Cattle Co., Inc., 80 F. Supp. 3d at 559 (citing Synthes, Inc. v. Knapp, 978 F. Supp. 2d 450, 455 (E.D. Pa. 

2013).

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typically proceed with analyzing whether to transfer under 28 U.S.C. § 1404, even 

after deciding whether or not to apply the first-filed rule.28

Accordingly, this Court finds that the first-filed rule is inapplicable to the 

instant matter as falling within the recognized exceptions to the rule. The letter sent 

to Ritz-Craft by Price’s counsel a few weeks after the Gwin Action was 

commenced provided notice to Ritz-Craft that Price would be pursuing legal 

claims against it.29 While the letter did not specify in which court the action would 

be filed, Ritz-Craft likely knew or should have known that Price’s action would be 

filed in New Jersey, considering the near certainty of litigation in New Jersey filed 

by the homeowners referenced in the letter sent to Ritz-Craft even before the Gwin 

Action was commenced.30 Ritz-Craft commenced this action only four days after it 

was informed of Price’s intention to pursue legal claims against it, indicating that 

Ritz-Craft instituted the instant suit in this forum in anticipation of Price’s suit in 

an arguably less favorable forum to Ritz-Craft’s interests.

B. The interests of justice require that this action be transferred to the District 

of New Jersey.

As stated above, in considering whether to transfer an action pursuant to 28 

U.S.C. § 1404(a), a court must first determine whether the action could have been 

 

28 See Sinclair Cattle Co., Inc., 80 F. Supp. 3d at 564; see also CollegeSource, Inc. v. AcademyOne, Inc., 597 Fed. 

Appx. 116, 122 (3d Cir. 2015); AVCO Corp. v. Marvel-Schebler Aircraft Carburetors, LLC, 2011 WL 484186, *3 

(M.D. Pa. February 7, 2011) (finding the first-filed rule inapplicable but nevertheless finding transfer to the Middle 

District of North Carolina appropriate).

29 ECF No. 9-6.

30 See ECF No. 1-2 at 84.

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brought in the proposed forum. Pursuant to 28 U.S.C. § 1391, an action may be 

brought in:

(1) a judicial district in which any defendant resides, if all 

defendants are residents of the State in which the district is 

located;

(2) a judicial district in which a substantial part of the events or 

omissions giving rise to the claim occurred, or a substantial part 

of property that is the subject of the action is situated; or

(3) if there is no district in which an action may otherwise be 

brought as provided in this section, any judicial district in 

which any defendant is subject to the court's personal 

jurisdiction with respect to such action.31

Price, the sole defendant, is a New Jersey limited liability company. Price 

alleges that it has never transacted any business or provided any services in 

Pennsylvania and serves New Jersey residents exclusively. Consequently, this 

action could have properly been brought in the District of New Jersey under 28 

U.S.C. § 1391(b)(1).

Likewise, after considering the factors outlined in High River Ltd.,

32 this 

Court concludes that this matter must be transferred to the District of New Jersey. I 

recognize that some of the factors weigh equally between the two forums. RitzCraft is a Pennsylvania company; therefore, this Court does have some interest in 

hearing the matter. Ritz-Craft, however, entered into a contract with a New Jersey 

 

31 28 U.S.C. § 1391(b).

32 353 F. Supp. 2d at 492.

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company for the sale of homes exclusively in New Jersey, to New Jersey residents. 

This contract was entered into after a devastating hurricane destroyed or damaged 

homes in New Jersey. In fact, the homes manufactured by Ritz-Craft were 

marketed exclusively to Ocean County, New Jersey residents through its “Restore 

the Shore” line. Many of these homes were purchased by these affected residents 

with federal and New Jersey state funds. 

Additionally, the underlying action arises from an alleged breach of contract

stemming from events occurring substantially in New Jersey. Ritz-Craft’s action 

centers on Price’s alleged inability to “complete some of the homes it had under 

contract,” “return the customer deposits for homes it could not complete,” and 

“honor its commitments . . . under the contractual arrangements between Price and 

its customers.”33 These customers were solely in New Jersey. While Ritz-Craft also 

argues that a “large part” of the activity occurred in Pennsylvania, the only activity 

it points to is the actual manufacture of the homes.34 

Finally, litigation concerning the parties and the subject of the parties’ 

contract at issue in this action is pending in New Jersey Superior Court, Ocean 

County Law Division. There is the potential for additional litigation that would

surely be filed in New Jersey. In sum, and for the reasons discussed above, I 

believe that a New Jersey court is better situated to hear the matter at hand.

 

33 ECF No. 1 at ¶¶ 23-25.

34 Id. at ¶ 9.

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IV. CONCLUSION

In accordance with the foregoing analysis, Price’s motion to transfer venue 

is granted and the action is transferred to the District of New Jersey.

An appropriate Order follows.

BY THE COURT:

/s Matthew W. Brann

Matthew W. Brann

United States District Judge

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