No. 00 € 7300 wv wo Page 3

Plaintiff has its main office in this district, the Agreement is to be governed by Illinois
law, some relevant financial and other records may be located here, and plaintiff may want
one of its executives and perhaps others to testify about the absence of any complaints by
defendant at a meeting in Chicago and in telephone conversations. Those persons are,
however, subject to plaintiff’s direction.

In contrast, defendant is located near Los Angeles. The Agreement was negotiated by
defendant’s personnel and one or two of plaintiff's employees, both of whom are located in
plaintiff's Los Angeles office. The entire performance was in California. The program
manager for plaintiff, Michael Macy, is an independent contractor not subject to plaintiff's
direction. He is located in the Los Angeles area. Defendant, like many dot com companies, has
apparently fallen upon hard times. Those of the personnel who were involved with the project
have, with the exception of Marc Von Arx, its executive vice-president and general counsel, left
the company although they remain in the area. They number six and, we are told, each was
substantially involved, one way or another, in what was being done or not done and what
worked and what did not. And Von Arx is also there. Since the evidence in this case is likely
primarily to center on what happened in California and the key witnesses are largely centered
there as well and not subject to the subpoena power of this court, we think that all the
considerations stated in 28 U.S.C. § 1404(a) dictate that this case be transferred to the Central

District of California.

&.

JAMES B. MORAN

+ Senior Judge, U. S. District Court
Gark 9 » 2001.



«1 Money tei 0607

real” LO
wd

Sepiss

United Sta. District Court, Northern Distri¢__f Illinois

=

(r0)

ee Name of Assigned Judge James B. Moran Sitting Judge if Other
or Magistrate Judge . than Assigned Judge
CASE NUMBER 00 C 7300 DATE 4/9/2001
CASE Lante Corporation vs. WHAT’SHOTNOW.COM
TITLE
[In the following box (a) indicate the party filing the motion, ¢.g., plaintiff, defendant, 3rd party plaintiff, and (b) state briefly the
MOTION: nature of the motion being presented.)
Memorandum Opinion and Order
DOCKET ENTRY:
qd) Oo Filed motion of [ use listing in “Motion” box above.]
(2) a Brief in support of motion due
(3) Oo Answer brief to motion due. . Reply to answer brief due :
(4) im} Ruling/Hearing on set for at
(5) o Status hearing[held/continued to} (set for/re-set for] on set for at
(6) im) Pretrial conference[held/continued to] [set for/re-set for] on set for at.
(7) Oo Trial[set for/re-set for] on at
(8) o [Bench/Jury trial] [Hearing] held/continued to at
(9) Oo This case is dismissed [with/without] prejudice and without costs[by/agreement/pursuant to}
OOFRCP4(m) General Rule 21 OFRCP41(a)(1) OC FRCP4i(a)(2).

(0) «off [Other docket entry] Enter Memorandum Opinion and Order. We think that all the considerations

stated in 28 U.S.C. Section 1404(a) dictate that this case be transferred to the Central District of California.
(a1) ff (For further detail see order attached to the original minute order.]

No notices required, advised in open court.

No noti uired.
No notices required. number of notices

Notices mailed by judge’s staff.

Notified counsel by telephone.

¥ | Docketing to mail notices.

Mail A 450 form.

Copy to judge/magisteate judge.

date mailed notice
courtroom

deputy’s.
initials

WAH

Date/time received in

central Clerk’s Office nailing deputy initials



p

~/ . WG

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS

EASTERN DIVISION
LANTE CORPORATION, DUCKEYER
Plaintiff, ) AR 10 200
)
vs. No. 00 C 7300 yeeverey
WHAT’SHOTNOW.COM, )
‘ APR VOR
Defendant. )

MEMORANDUM OPINION AND ORDER

Plaintiff provided consulting and development services to defendant relating to the
creation of an e-commerce web site. The Agreement was entered into effective March 15,2000,
with possible work assignments during the following two years. The work that was assigned
was allegedly completed by September 1, 2000, and defendant ceased assigning any new work.
Defendant, according to plaintiff, paid $2,229,349, but that still leaves a balance due and owing
of $2,700,886, plus late charges. It seeks recovery of what is allegedly owed, asserts that
defendant continues to use the benefits of plaintiff’s work without paying for them, and
contends that it, not defendant, owns the intellectual property involved because defendant had
rights to that property only if it paid its bills.

Defendant now moves to dismiss, claiming that the dispute is subject to binding
arbitration. Alternatively, it moves to transfer the action to the Central District of California.
Plaintiff opposes both.

Weare inclined to believe that the dispute is not subject to arbitration. We are mindful

that federal law favors arbitration and “any doubts concerning the scope of arbitrable issues


No. 00 C 7300 7, Page 2

should be resolved in favor of arbitration whether, the problem at hand is the construction of
the contract language itself or an allegation of waiver, delay or a like defense to arbitrability.”
Moses H. Cone Hospital v. Mercury Construction Corp., 460 U.S. 1, 24-25 (1983). Nor are we
particularly impressed by plaintiff’s assertion that its claim to intellectual property is a claim
to property, not to fees. After all, it appears to concede that the intellectual property belongs
to plaintiff if the fees have been properly paid. Still, arbitration is a matter of consent between
the parties and the scope of the arbitration provision is a matter of contract interpretation.

Here the arbitration provision is related to an escrow arrangement. If there was a good
faith dispute about fees defendant was to deposit the contested amount in an escrow account
“reasonably acceptable to the parties or approved by the arbitrator...” and the proceeds were
to be distributed pursuant to the arbitrator’s award. Ifthe deposit was not timely made, then
plaintiff could terminate the Agreement. The arrangement appears to contemplate a way to
safeguard both parties and resolve fee disputes while the work was in process. But defendant
did not pay any disputed amounts into escrow, the work has been completed, and the
relationship is at an end. Defendant claims that the work was not properly done, a dispute
related to the warranty provisions, and those provisions are separate from the payment
provisions embodying the arbitration arrangements. To escape the warranty restrictions on
remedy to the reperforming of services, we assume that defendant is claiming that the
necessary work was not done properly in a timely fashion.

We do not, however, decide the matter because this case clearly should be transferred
to the Central District of California. Even if we did rule, the federal court in California could
be and would be asked to reconsider the issues, and therefore we leave it to that court for

determination.