Opinion ID: 6329204
Heading Depth: 3
Heading Rank: 3

Heading: Transfer Order

Text: Because the severance order was a clear abuse of discretion, the district court likewise “lacked authority . . . to transfer a portion of the single action . . . for one purpose while retaining jurisdiction over the remainder.” Chrysler Credit Corp., 928 F.2d at 1519; In re Nine Mile Ltd., 673 F.2d at 244. But even setting aside severance as impermissible, any transfer of this case, in whole or in part, constitutes an abuse of the district court’s discretion. A party seeking a transfer under Section 1404(a) “must show good cause” by “clearly demonstrat[ing] that a transfer is ‘[f]or the convenience of parties and witnesses, in the interest of justice.’” In re Volkswagen of Am., Inc., 545 F.3d 304, 315 (5th Cir. 2008) (quoting 28 U.S.C. § 1404(a)) (emphasis added). “When the transferee venue is not clearly more convenient than the venue chosen by the Plaintiff, the Plaintiff's choice should be respected.” Id. When a defendant is haled into court, some inconvenience is expected and acceptable. Assuming that jurisdiction exists and venue is proper, the fact that litigating would be more convenient for the defendant elsewhere is not enough to justify transfer. In other words, the standard is not met by showing one forum is more likely than not to be more convenient, but instead the party must adduce evidence and arguments that clearly establish good cause for transfer based on convenience and justice. See e.g. id. 314-315. Courts are required to assess four private interest factors and four public interest factors pertinent to a transfer motion. See In re Volkswagen, 545 F.3d at 315. The private interest factors are: “(1) the relative ease of access to sources of proof; (2) the availability of compulsory process to secure the attendance of witnesses; (3) the cost of attendance for willing 24 Case: 21-50327 Document: 00516263671 Page: 25 Date Filed: 04/01/2022 No. 21-50327 witnesses; and (4) all other practical problems that make trial of a case easy, expeditious and inexpensive.” Id. The public interest factors are discussed below. As with its discussion of Rule 21 severance, the district court abused its discretion factually and legally in weighing the transfer factors against the standard. Regarding the first private interest factor, the movant has the burden to establish good cause, which requires an actual showing of the existence of relevant sources of proof, not merely an expression that some sources likely exist in the prospective forum. In re Volkswagen, 545 F.3d at 315. Here, however, the district court erred by uncritically accepting the NJAG’s conclusory assertions that “the sources of proof relevant to these issues (including any non-party witnesses) are all in New Jersey.” Defense Distributed, 1:18-cv-00637, Dkt. 121, at 15–16 (W.D. Tex.); See e.g. Hammers v. Mayea-Chang, 2019 WL 6728446, at  (E.D. Tex. Dec. 11, 2019). The NJAG’s conclusory assertions lack that necessary proof, while the Plaintiffs identified proof, documents, and witnesses that are located in Texas and support maintaining Texas as the forum. 25 Weighing the first factor as “neutral” in the face of the NJAG’s lack of proof and Plaintiffs’ proffer abused both logic and the court’s discretion. Additionally, the district court legally erred by introducing a “prejudice” consideration into the first factor. The first private interest factor does not ask whether a transfer would 25 For example, Defense Distributed provided details on how its activities, including research, design, development, manufacturing, and publishing, occurred in and around Austin, and how it also published the same computer files with digital firearms information at a brick-and-mortar public library in Austin, Texas by hosting the computer files in formats that patrons could access via computer workstations. The computer servers on which Defense Distributed hosts these files for publication to the internet are also located in Texas. 25 Case: 21-50327 Document: 00516263671 Page: 26 Date Filed: 04/01/2022 No. 21-50327 “prejudice” the non-moving party, but which forum provides easier access to sources of proof. Volkswagen, 545 F.3d at 315. Access to compulsory process for non-party witnesses is the gravamen of the second private interest factor. See e.g. Garrett v. Hanson, 429 F. Supp. 3d 311, 318 (E.D. Tex. 2019). Neither the NJAG nor the district court identified any witness who is subject to compulsory process in New Jersey but not in Texas. Yet the court inexplicably weighed this factor not as neutral but in favor of transfer. “To show good cause[, however] means that a moving party . . . clearly demonstrates” the appropriateness of transfer. Where there is no demonstration by the movant, let alone a clear one, the court cannot weigh a factor against the non-movant and in favor of transfer. Besides lacking support in the record, the district court’s weighing of this factor in favor of New Jersey does not “reflect[] the appropriate deference to which the Plaintiff’s choice of venue is entitled,” In re Volkswagen, 545 F.3d at 315. 26 The fourth private interest factor addresses “all other practical problems that make trial of a case easy, expeditious and inexpensive.” In re Volkswagen, at 315. The district court weighed this factor in favor of the NJAG because absent transfer, it would have to decide whether it has personal jurisdiction over the NJAG to adjudicate Defense Distributed’s allegedly newly raised claim challenging the constitutionality of NJ Stat. § 2C:39-9(l)(2). But as we discussed above that issue is not so novel as to require a separate analysis of personal jurisdiction. The district court itself previously recognized that “the instant action concern[ed]” The NJAG’s 26 The third private interest factor, concerning the cost for willing witnesses, is agreed to be neutral, as the district court found. 26 Case: 21-50327 Document: 00516263671 Page: 27 Date Filed: 04/01/2022 No. 21-50327 “criminal enforcement actions,” such as “threatening to enforce a criminal law against Defense Distributed.” 364 F.Supp. 3d, at 686. 27 The public interest factors bearing on transfer are: “(1) the administrative difficulties flowing from court congestion; (2) the local interest in having localized interests decided at home; (3) the familiarity of the forum with the law that will govern the case; and (4) the avoidance of unnecessary problems of conflict of laws [or in] the application of foreign law.” See In re Volkswagen, at 315. No party disputes that the first factor is neutral. As an initial matter, the district court erroneously treated the second and the third factors together. The district court reasoned that because some of Plaintiffs’ claims against the NJAG implicate New Jersey’s criminal law, § 2C:39-9(l)(2), the District of New Jersey has a greater interest in testing the constitutionality of that statute and is better equipped than Texas courts to evaluate it. The two factors, however, are distinct in the law for good reason. The second public interest factor, which focuses on the local interest in having localized interests decided at home, “most notably regards not merely the parties’ significant connections to each forum writ large, but rather the significant connections between a particular venue and the events that gave rise to a suit.” In re Apple Inc., 979 F.3d 1332, 1345 (Fed. Cir. 2020). Important considerations include the location of the injury, witnesses, and the Plaintiff’s residence. See Volkswagen, 545 F.3d at 317–18; Zurich Am. Ins. Co. v. Tejas Concrete & Materials Inc., 982 F. Supp. 2d 714, 727 (W.D. Tex. 27 And this court noted that Plaintiffs’ claims encompass the “criminal actions” that the NJAG threatened “at a live press conference.” Defense Distributed, 971 F.3d at 489. Appellants’ brief to this court confirms that Section 2C:39- 9(l)(2) was the sole legal basis for the threats. 27 Case: 21-50327 Document: 00516263671 Page: 28 Date Filed: 04/01/2022 No. 21-50327 2013). Indeed, “[t]he place of the alleged wrong is one of the most important factors in venue determinations.” Watson v. Fieldwood Energy Offshore, LLC, 181 F. Supp. 3d 402, 412 (S.D. Tex. 2016). Texas’s “local interest in having [the] localized interests” this case implicates “decided at home” cannot be overstated. Volkswagen, 545 F.3d at 315. The controversy over New Jersey’s statute is not “localized” to New Jersey. The AG has “projected himself across state lines and asserted a pseudo-national executive authority” in Texas by seeking “to bar Defense Distributed from publishing its materials anywhere,” chilling its speech, and reducing “Texans’ access to [its] materials.” Grewal, 971 F.3d at 492-95. In these circumstances, the aggressor state’s interest is considerably diminished because the Texas court’s ruling will have no direct effect on New Jersey’s citizens. If § 2C:39-9(l)(2) were declared unconstitutional in this litigation, that ruling would preclude the NJAG’s enforcing the statute against these Plaintiffs. At least the NJAG would not necessarily be prevented from enforcing the law in New Jersey. Thus, the strength of New Jersey’s interest in having this case decided at home is considerably less than that of Texas citizens whose primary recourse, as targets of this litigation in Texas, is a suit in Texas. And Texas courts have a significant interest in assessing the constitutionality and extraterritorial impact of New Jersey’s criminal law 28, especially a law that criminalizes speech. The familiarity of the forum with the law that will govern the case was also improperly weighed in favor of New Jersey. “Federal judges routinely apply the law of a State other than the State in which they sit….” This court is “not aware of any exceptionally arcane features of Texas, [New Jersey, or 28 The New Jersey statute applies extraterritorially because it criminalizes “distribution” of speech into the state, and “distribute” is defined to include any act of “mak[ing] available via the internet or by any other means.” N.J. Stat. 2C:39-9(l)(2). 28 Case: 21-50327 Document: 00516263671 Page: 29 Date Filed: 04/01/2022 No. 21-50327 constitutional law,] that are likely to defy comprehension by a federal judge sitting in [Texas].” Atl. Marine Const. Co. v. U.S. Dist. Ct. for W. Dist. of Texas, 571 U.S. 49, 67–68, 134 S. Ct. 568, 584 (2013). Moreover, New Jersey courts’ familiarity with New Jersey law produces no meaningful efficiency rendering New Jersey a more convenient forum. Defense Distributed pursues no claims arising under New Jersey law. Plaintiffs’ challenge to Section 2C:39-9(l)(2) is founded in the First Amendment and the extreme breadth of this criminal law, which purports to render illegal any speech that reaches the state from other states. Plaintiffs lodge other claims against the NJAG predicated on other federal constitutional provisions. Thus, the Texas court’s superior familiarity with Defense Distributed’s Texas law claims, and the fact that the New Jersey court would be bound to Texas law concerning such claims, see Country Chrysler, 928 F.2d at 1516, more than offsets any efficiencies that might be gained from New Jersey courts’ familiarity with New Jersey law. The last public interest factor seeks to avoid “unnecessary problems of conflict of laws [or in] the application of foreign law.” Volkswagen, 545 F.3d at 315. There are no risks of such a conflict here. Defense Distributed brought primarily federal law claims; and the state law claims involve Texas law, not New Jersey law. The district court repeatedly weighed the transfer factors against Plaintiffs by asserting that they could not be disadvantaged by transfer because they had “voluntarily” instituted additional litigation in New Jersey covering similar issues against the NJAG. This is incredible. Plaintiffs filed suit in New Jersey only because this district court had erroneously closed the door to their suit in Western District of Texas. The currently stayed litigation in New Jersey has no legitimate bearing against Plaintiffs’ original choice of forum. 29 Case: 21-50327 Document: 00516263671 Page: 30 Date Filed: 04/01/2022 No. 21-50327 Correctly assessed, the NJAG did not carry its burden to clearly demonstrate that transfer is clearly more appropriate than the Plaintiffs’ choice of forum. The district court erred legally and factually in virtually every aspect of this issue, and its decision, which has unnecessarily lengthened this litigation even more, represents a clear abuse of discretion for which mandamus is an appropriate remedy.